RBS Assessing Conduct, Mulling Bonus Cuts After Currency FineRichard Partington
Royal Bank of Scotland Group Plc is assessing the behavior of employees at its investment bank and considering bonus cuts after taking a $669 million fine from U.S. authorities for rigging currency markets.
The “thorough review” into currency traders’ conduct at the Corporate and Institutional Banking division has so far led to the dismissal of three employees while two were suspended, RBS said in a statement on Wednesday. The bank will take the latest fines into account when taking decisions on future compensation, it said without elaborating.
RBS Chief Executive Officer Ross McEwan’s efforts to overhaul the lender’s culture and return it to profit have been overshadowed by a series of fines. The lender was among six banks paying $5.8 billion in Wednesday’s settlement, with five of them -- including RBS and British rival Barclays Plc -- pleading guilty to charges tied to a currency-rigging probe.
“It has taken far longer than anyone hoped to root out all the past conduct problems and practices and as a result we still have significant challenges on the horizon,” McEwan said in the statement. The bank will “hold those responsible fully to account for their actions,” he added.
RBS shares rose 1.9 percent to 355.2 pence at 4:04 p.m. in London. They have decreased about 9.9 percent this year.
To resolve the probe, RBS paid $395 million to the Department of Justice and $274 million to the Federal Reserve. The Edinburgh-based bank remains in talks with other regulators about the conduct within its foreign-exchange business.
As part of tougher internal controls, RBS imposed restrictions on messaging and chat rooms, banned mobile phones on trading floors and stepped up its surveillance. The lender is also reviewing the actions and responsibilities of the managers of the currency business and the wider investment bank during the relevant period, it said.
“This episode has exposed serious shortcomings at both individual and collective levels from which we continue to learn,” RBS Chairman Philip Hampton said in the statement. “We are continuing thorough investigations into the conduct of employees” and “are committed to implementing further improvements to systems and controls,” he added.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.