RBS confirms Libor-related dismissals
LONDON - State-controlled lender Royal Bank of Scotland (RBS) confirmed on Friday it had dismissed a number of employees for misconduct as a result of its investigations into the Libor interest rate-rigging scandal and, along with other banks, is still under investigation by regulators.
The bank said it was not possible to reliably measure what effect the investigations would have, including the timing and amount of fines or settlements, creating uncertainty for investors.
Rival Barclays was fined $453m last month by US and UK regulators.
"The Libor situation is on our agenda and is a stark reminder of the damage individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact," CE Stephen Hester said.
RBS said it was co-operating with investigations by governments and regulators into its submissions and procedures around the setting of Libor and other interest rates.
Last month sources with knowledge of the matter said RBS had fired four traders in connection with the affair.
The bank said it was being investigate by regulators in the US, Britain and Japan and by competition authorities in Europe, the US and Canada.
RBS, which is 82% owned by the government, also reported on Friday that it made a first-half operating profit of £1,83bn ($2,8bn), down from £1,97bn in the same period last year.
RBS confirmed it had set aside a further £135m to compensate customers who were missold loan insurance. It has taken a £125m hit from costs arising from a computer systems failure in June.
It said the planned flotation of its insurance arm, Direct Line, was on track and planned for October this year.
Shares in RBS were up 5% at 214,7p on Friday morning, outpacing a 2,3% rise in the Stoxx Europe 600 banking sector index.
"We see this set of numbers as in line with expectations. With recent negative headlines, this may generate some amount of relief in the stock," said analysts at Nomura.
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