RBS to slash bonuses to pay Libor fines - source

LONDON Fri Jan 11, 2013 2:43pm GMT

A logo of a Royal Bank of Scotland (RBS) is seen at a branch in London February 23, 2012. REUTERS/Stefan Wermuth

A logo of a Royal Bank of Scotland (RBS) is seen at a branch in London February 23, 2012.

Credit: Reuters/Stefan Wermuth

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LONDON (Reuters) - Royal Bank of Scotland is preparing to slash bonuses for its investment bankers this year to help pay fines for its role in an interest rate rigging scandal, a source familiar with the situation said.

The part state-owned bank is expected to face a worse punishment than the $450 million (279.1 million pounds) paid by rival Barclays following an investigation into the alleged manipulation of the London interbank offered rate (Libor) and other benchmark rates, said the source, who declined to be named.

RBS plans to set aside over 100 million pounds, mostly by reducing bonuses but also by clawing back past bonus payments paid to those implicated in the affair, the source said. Last year, the bank paid its investment bankers bonuses totalling 390 million pounds.

RBS declined to comment.

The bank is also considering whether two senior executives should be asked to quit when the settlement is announced. John Hourican, head of RBS's investment bank, and Peter Nielsen, head of markets, could be asked to step down, the source told Reuters on Thursday.

Britain's Financial Services Authority is nearly ready to make public the sanctions it will take against RBS and is waiting for U.S. regulators to complete their investigations.

RBS, which is 81 percent owned by the UK taxpayer following a government bailout, is keen to draw a line under the episode in order to focus on its long-term recovery plan.

(Reporting by Matt Scuffham; Editing by Alex Smith and Mark Potter)

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Comments (2)
Raymond.Vermont wrote:
I’m not a very well educated boy, and have a very meagre understanding how the world works, but as RBS is under mostly state control now, the fine that it has been fined… a. Whom is paying it? (presumably the state and therefore the tax payer) b. Where does the fine levy go?

Is this a case of Courts and State, finding inventive ways of fleecing the citizenship again or are the real people whom allowed such financial misdemeanours going to pay?

Whom are the Courts actually punishing… The wrong doers or the victims again?

I’d be delighted for any superior mind, to enlighten mine upon here!

Jan 11, 2013 2:25pm GMT  --  Report as abuse
Hale wrote:
Hi,
RBS to slash bonuses to pay Libor fines. The biggest “hold-up” of all time, yet not banker goes to prison, Strange?

Jan 11, 2013 5:38pm GMT  --  Report as abuse
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