RBS fires staff for role in Libor manipulation
The bank confirmed reports it had sacked some traders over the rate fixing scandal that saw Barclays fined £290m
By CFOWorld staff | CFO UK | Published 11:21, 03 August 12
Royal Bank of Scotland said on Friday it had sacked some individuals over the rate fixing scandal as regulators’ investigations continue over its role in manipulating Libor.
The part-nationalised bank said it was fully co-operating with regulators and governments into its submissions and procedures around the setting of Libor and other inter-bank lending rates.
"The Libor situation is on our agenda and is a stark reminder of the damage that individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact," chief executive Stephen Hester said in reporting first-half results.
Last month sources with knowledge of the matter said RBS had fired four traders in connection with the affair. New details from court documents and sources suggest that groups of traders working at three major European banks, including RBS were heavily involved.
The bank said on Friday it was being investigated by regulators in the US, Britain and Japan and by competition authorities in Europe, the US and Canada.
RBS said it was not possible to reliably measure what effect the investigations would have, including the timing and amount of fines or settlements. Rival Barclays was fined £290 million last month by US and UK regulators.
The issue has heaped pressure on Hester, who was appointed CEO four years ago with a remit to rebuild the bank and its reputation following the bailout.
Government sources told Reuters on Thursday that it had no plans to fully nationalise RBS, contradicting a report in the Financial Times.
The bank, which is 82 percent-owned by the government, also reported on Friday it made a first-half operating profit of £1.83 billion, down from £1.97 billion in the same period last year.
The bank made a statutory pre-tax loss of £1.5 billion, which included a £2.9 billion accounting loss due to a rise in the value of its own debt.
Britain's banks are also facing a bill running into billions of pounds to address claims of mis-selling various financial products.
RBS confirmed it had set aside a further £135 million to compensate customers mis-sold loan insurance taking its total provision so far to £1.3 billion.
RBS also said on Friday the planned flotation of its insurance arm, Direct Line, was on track and planned for October this year.
Shares in RBS were up 3 percent at 210.7 pence by 0734 GMT, when the Stoxx Europe 600 banking sector index was up 1.7 percent.
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