Northern, WI 02/07/2013 (wallstreetpr) – In a shameful move, Royal bank of Scotland Group PLC (: LON:RBS) plans to retrieve back fund bonuses as bonus and awards to the company’s employees. It has been forced to take this step to raise money in order to pay the $612 million fine imposed on it for rigging the benchmark interest rates.
One of Britain’s most high-profile lenders could end up paying 87.5 million pounds to the Financial Services Authority of UK, and $0 million to the US, Commodity Futures’ Trading Commission (CFTC).
Treasury minister Greg Clark said marked today as a, “day of shame for Britain’s banks”. “This is an extremely serious matter, motivated by greed”, he added.
Royal bank of Scotland Group Plc (LON:RBS) ‘s bailout cost tax payers a biggest ever sum of 45.5 billion pounds. Since then, this is the biggest blow to CEO Stephen Hester’s plans to overhaul the lender. This fine is much greater than the 290 million pounds paid by Barclays Plc.(LOV:BARC) earlier in 2012.
Hester termed Libor manipulation as “an extreme example of a selfish and self-serving culture” which prevailed banking industry during its boom. The lessons learned from this “episode” will be used as a motivator to reject and change “the vestiges of that culture”, he added.
Royal bank of Scotland Group PLC (: LON:RBS) shares had climbed 19% last year. According to Ian Gordon, an analyst said, “ the news has an immaterial impact in terms of the “financial position”. The bank’s primary challenge isn’t the “regulatory issues” that spurred immediately after the news of the rigging broke,. Instead it is the “anemic earnings growth” Which is the real matter of concern, he said.
John Hourican, chief of investment banking, will resign, said Royal bank of Scotland Group Plc (LON:RBS).
Hourican, in charge of the securities unit since Oct. 2008 was responsible for bringing stability and safety, following losses incurred in the credit market and increase in bad loans following a decade-long expansion scheme under Fred Goodwin, the CEO.
Royal bank of Scotland Group PLC (LON:RBS) announced that as many as 3,500 investment banking employees were laid off on Jan. 2012. The bank said that John Hourican had no role in this fraud. However, both the board and John felt it would be right for him to go.
David Meister of CFTC said that benchmark interest rates are bound to be distorted when traders are falsely spinning their respective bank’s Libor submissions.
It is said that RBS made as many as 219 requests for inaccurate Libor submissions. Derivative traders tried to influence submissions by communicating with the Libor submitters.
Until March 2011, Royal bank of Scotland Group Plc (LON:RBS) did not have any systems in place to govern its Libor submissions. Also, in June 2011, that they realized that derivatives traders could influence the Libor submitters. However, no evidence has been found of the senior management being involved in this.
In order to meet costs for paying regulators, RBS will cut bonuses and payments.
Royal bank of Scotland Group Plc (LON:RBS) has been pressed to plead guilty by the Justice Department, thus prolonging the settlement.
U.K. Business Secretary Vince Cable has said that RBS may not be privatized in the near future. He further added that the stocks should be handed over to the taxpayers.
The Royal bank of Scotland Group Plc (LON:RBS)trades at the New York stock exchange as Royal bank of Scotland Group Plc (ADR) (NYSE:RBS). The Barclays Plc. (LON:BARC) trades at NYSE as Barclays Plc. (ADR) (NYSE:BCS).
Royal bank of Scotland Group Plc (ADR) (NYSE:RBS) were decreased by 2.50% and currently trading at $10.51.
Barclays Plc. (ADR) (NYSE:BCS) were decreased by 1.13% and currently trading at $18.32