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RBS sets aside further US$1.3b for misconduct charges
[LONDON] Royal Bank of Scotland set aside 856 million pounds (S$1.72 billion) to cover charges for past misconduct and litigation, helping push the state-backed lender to a loss in the first quarter.
The charges include 334 million pounds to cover issues relating to alleged foreign exchange manipulation. The bank said it was in advanced discussions over a settlement in relation to a criminal investigation conducted by the U.S. Department of Justice and other authorities.
RBS was one of six banks fined a combined US$4.3 billion for failing to stop traders trying to manipulate currency markets last year. Rival Barclays, which has yet to settle with regulators over the matter, on Wednesday set aside another 800 million pounds to cover the issue.
RBS, which is 80 per cent owned by the government, made an operating profit of 1.63 billion pounds in the first quarter, up 16 per cent on the same period a year ago.
The improved performance was clouded by a number of one-off charges, resulting in RBS posting an attributable loss of 446 million, compared with a 1.2 billion pound profit a year ago.
Restructuring charges cost the bank 453 million pounds. It also set aside 100 million pounds to cover compensation for the mis-selling of loan insurance and 257 million pounds for other customer compensation, primarily relating to paid-for accounts.