RBS sets aside R7bn for forex probes

Pedestrians are reflected in the window of a branch of the Royal Bank of Scotland in London. Picture: Suzanne Plunkett

Pedestrians are reflected in the window of a branch of the Royal Bank of Scotland in London. Picture: Suzanne Plunkett

Published Oct 31, 2014

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London - Britain's state-owned Royal Bank of Scotland has set aside £400 million (R7 billion) linked to global probes into alleged price-rigging in foreign exchange markets, it said Friday.

RBS revealed in a results statement that litigation and conduct costs for the third quarter “included £400 million of potential conduct costs following investigations into the foreign exchange market”.

The news comes one day after rival Barclays - which was also at the centre of the 2012 Libor interest-rate rigging scandal - made a similar £500-million provision as regulators investigate alleged manipulation of the £3-trillion-a-day global forex market.

RBS also revealed Friday that net profits rebounded to £896 million in the three months to the end of September, buoyed partly by cost-cutting, after a net loss of £828 million in the same part of last year.

The Edinburgh-based bank set another £100 million aside for compensation costs from the mis-selling of payment protection insurance (PPI).

That took its total PPI mis-selling bill to more than £3.3 billion.

“Ongoing conduct and regulatory investigations and litigation continue to present challenges and are expected to be a material drag on both earnings and capital generation over the coming quarters,” RBS warned in the earnings release.

“The timing and amounts of any further settlements or redress however remain uncertain and could be significant.” - Sapa-AFP

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