Royal Bank of Scotland has warned investors it faces ‘significant penalties’ for its role in the Libor-rigging scandal with the market expecting it to face a fine of up to £500 million.
Reports suggest investment banking head John Hourican will quit today, albeit with a generous payoff.
In a stock exchange announcement this morning, the bank said it was in late-stage negotiations with the FSA in the UK and the US Commodity Futures Trading Commission and Department of Justice over the nature of the sanctions.
RBS said: ‘Although the settlements remain to be agreed, RBS expects they will include the payment of significant penalties as well as certain other sanctions. RBS will update the market on all pertinent issues relating to this matter shortly.’
The bank is under intense pressure to fund the fine from its bankers’ bonus pool with business secretary Vince Cable demanding that the taxpayer will not foot the bill.
Barclays paid £290 million in fines to the UK and US authorities for its role in the Libor fixing scandal last June, while UBS paid a whopping £953 million.