Economy
RBS targets bankers’ bonuses to pay off imminent Libor fine
The Royal Bank of Scotland (RBS) looks set to cover half of its impending Libor fine using last year’s investment banking bonus pool.
The bank is expecting a higher penalty than the $450m (£276m) charge handed out to Barclays in 2012, but less than the $1.5 billion (£940m) that Swiss bank UBS was ordered to pay.
Instead, previous figures suggest that the sum will total around £350m, as RBS is forced to cough up for its role in fixing Libor – the rate at which London banks borrow from each other.
Investment bankers at RBS were rewarded with bonuses worth £390m last year, and Reuters has reported that over £100m could be set aside from this pot in order to lessen the financial impact of the fine.
Friends of the Earth Scotland corporate accountability campaigner, Paul Daly, said in December that it was time for RBS to “shape up” ahead of receiving the fine.
Writing in the Financial Times, banking editor Patrick Jenkins said, “There is virtually no scope for RBS to recoup any of the settlement cost from the few dozen individuals who are understood to have been involved in the scandal, many of whom have already left the bank.”
This could prompt calls for the individuals no longer working with RBS to be named and shamed, in order for some sort of culpability to be levelled at them.
The bank received continued criticism in 2012 for its funding of Canadian tar sands operations, on top of recording a £1.5 billion half year loss and amassing a payment protection insurance compensation pot worth £1.7 billion.
Further reading:
RBS urged to ‘shape up’ after expected Libor fine
‘Unethical behaviour’ at UBS warrants £940m Libor fine
With Libor fixing, the surprise is anyone was surprised