RBS sets aside £400 million to settle forex probe
The lender's total bill for PPI is £3.3 billion
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Taxpayer-owned Royal Bank of Scotland has taken a £400 million hit for its role in forex market rigging allegations and warned there may well be more to come from this and other past banking scandals.
But a strong improvement in Irish property prices, lower bad debts and lower costs saw the bank swing from third-quarter losses of £634 million in 2013 to profits of £1.27 billion this year.
So-called conduct issues such as the forex scandal cost £780 million including a further £100 million for PPI mis-selling. RBS shares, which are 80 per cent owned by the taxpayer after its £45 billion bail-out, rose 14.7p to 380p — their highest level for 12 months.
“We are actively managing a slug of significant legacy issues,” said chief executive Ross McEwan. “For some of them the cheques are already in the post but there are plenty more bumps in the road ahead.”
RBS, with five other banks, is near reaching a deal with the Financial Conduct Authority and some US regulators over the forex scandal but will still have to deal with others at a later date.
It also has outstanding cases against it over US mortgage-backed securities and the IT collapse two years ago. McEwan said: “We cannot make any firm provisions on legacy issues until we have some fairly clear numbers and discussions going on with the regulators.”
He also said RBS would not pay a dividend until its key core tier 1 capital ratio is up from today’s 10.8 per cent to above his 2016 target of 12 per cent.
He said: “There’s no way we will pay a dividend until we are well above that 12 per cent target.”
Analysts feel there is little chance the Government will sell its first tranche of RBS shares before next year’s election.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments