ROYAL BANK of Scotland is preparing for negotiations with regulators to settle claims over its role in the manipulation of Libor but has said it is not yet possible to know how much it will be fined.
Yesterday, the bank – which is 82 per cent-owned by the British government – said it expected to enter negotiations “in the near term” and that these were likely to result in financial penalties.
RBS is being investigated by authorities including the US commodity futures trading commission, the US department of justice and the Financial Services Authority in the UK.
The disclosure came as RBS announced quarterly results that were hit by a further £400 million provision for compensating customers who were mis-sold payment protection insurance.
The bank posted a £1.26 billion pretax loss for the third quarter, compared with a profit of £2 billion for the same period a year earlier.
The charge – blamed on a higher number of claims than the bank expected – took RBS’s total estimate of its PPI compensation exposure to £1.7 billion.
RBS’s third-quarter results were also hit by a £1.46 billion “own credit” loss linked to the fluctuating value of its own debt and derivative liabilities. At an operating level – which excludes PPI and own credit charges – the bank posted a quarterly profit of £1.05 billion, up from £2 million a year earlier.
RBS shares closed down 2 per cent to 281p in London yesterday. – (Copyright The Financial Times Limited 2012)
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