BBC News, 27
January 2014
Related
Stories
RBS may
face full-year losses of up to £8bn, after the bank said it needed another
£3.1bn for claims relating to the financial crisis.
Shares in
the 80%-taxpayer owned bank dropped 3% on the news.
RBS boss Ross McEwan said: "The scale of the bad decisions during that period [the
financial crisis] means that some problems are still just emerging."
RBS said
its executive committee would not receive a bonus for 2013, Mr McEwan has
waived his bonus for 2013-14.
RBS said on
Monday the £3.1bn it planned to set aside would be used to settle claims
relating to mortgage products, PPI claims and interest rate hedging.
Surprise
It would
allocate:
- £1.9bn to pay for fines and damages relating to mis-selling mortgage bonds in the US, as well as other penalties relating to market manipulation
- £650m of losses for mis-selling payment protection insurance (PPI)
- £500m of losses for compensating small businesses who were wrongly sold interest rate hedging products
- The bank also said there would be £4.5bn of further losses on bad loans and investments
- It suggested there could be unspecified further losses from selling off bad assets
RBS
chairman Philip Hampton said: "RBS did suffer more than most banks in the
crisis and these charges today represent an extra clearing-up of the mess that
was created in the bank in the run-up to the financial crisis of 2008."
The
announcement of the new provisions came near the end of share dealing in
London.
Ian Gordon,
from Investec Securities, said the news was not entirely unexpected, but the
amounts involved were: "Some of this is a pull forward of future bad news
and some of this is additional.
"Most
of the items aren't surprising, but the amounts are at or above the top end of
expectations."
The
cumulative amount set aside to cover the mis-selling of PPI, payment protection
insurance, alone, is now £3.1bn, said RBS.
RBS, has
also, in common with most of its rivals, been fined for fixing the key Libor
interest rate and has suspended traders amid an investigation into alleged
rigging of the foreign exchange markets.
The BBC
learned earlier this month that general discussions about bonuses had taken
place with shareholders, including UK Financial Investments, the body that
manages the government's shareholding in the bank.
The
controversy over bank bonuses flared up in Parliament earlier this month, with
Labour demanding George Osborne block any attempt by RBS to pay bonuses of up
to double its bankers' annual salary.
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