Hester: RBS faces big fine over Libor scandal
Royal Bank of Scotland chief executive Stephen Hester has hinted the bank is set for a huge fine on the back of the Libor scandal.
The bank is also set to announce, in its results, a further £100m provision for the misselling of payment protection insurance and £100m to cover the costs relating to the IT problems it suffered in June.
Speaking to The Guardian, Hester admitted the bank was likely to follow Barclays, which was fined £290m by US and UK regulators earlier this month.
He said: “RBS is one of the banks tied up in Libor. We will have our day in that particular spotlight as well.”
Hester said he did not know the size of the fine but added that the investigation by the Financial Services Authority was “in proces”.
He added: “Even though when all the Libor [fines] are out most of it is going to be around the wrongdoings of a handful of people at a number of banks. Those wrongdoings taint a whole industry beyond the handful of people and that makes it a huge problem.”
Hester did not offer any sympathy to Barclays chief executive Bob Diamond following his departure in the wake of the scandal.
Hester said: “Everyone has to live with the prospect of professional mortality. Chief executive jobs bring with them job insecurity … I’ve always accepted that part of it is that I will not exit in a way and timing of my choice.”
RBS is to reveal results on Friday that are expected to show lender made a £1.2bn pre-tax loss. The bank is also set show that it paid £25m to a single businessman who was mis-sold products intended to protect against interest rate rises.
Earlier this month a report by Morgan Stanley said RBS was likely to be one of the banks hit hardest by the Libor scandal. The group said banks’ Libor costs could rise to £14bn for the banking industry.