RBS braced for questions on Libor involvement
LONDON (Reuters) - British bank RBS (RBS.L: Quote) faces questions over the extent of its involvement in a global interest rate rigging scandal when it publishes first half results on Friday that will detail the cost of a disastrous IT glitch and compensation for mis-selling.
New details from court documents and sources suggest that groups of traders working at three major European banks, including RBS, were heavily involved in rigging global benchmark interest rates.
RBS's Chief Executive Stephen Hester acknowledged in an interview on Sunday that the bank was braced to be punished over its role in the affair. Rival Barclays (BARC.L: Quote) was fined $453 million last month by U.S. and UK regulators.
RBS, which is 82 percent owned by the British government, has already endured a miserable 2012 with a computer systems failure disrupting millions of customer accounts.
The bank is also expected to increase provisions for mis-selling payment protection insurance (PPI) on loans and mortgages and will also estimate what it could pay small firms for wrongly selling complex interest rate hedging products.
Britain's battered banks are facing a bill running into billions of pounds to address mis-selling claims.
Sky News reported on Thursday that RBS will set aside a further 130 million pounds to compensate customers mis-sold PPI, on top of the 1.2 billion pound provision already made.
It will take a hit of 125 million pounds for costs relating to the computer systems failure and 50 million pounds to settle claims on mis-selling hedging products, the broadcaster said.
The issues have heaped pressure on Hester, who was appointed CEO four years ago with a remit to rebuild the bank and its reputation following its bailout. Continued...