'Today is a stark reminder of the importance of culture and integrity in banking and we will rightly be judged on the strength of our response'.
The Royal Bank of Scotland (RBS) has reached a settlement with the Financial Conduct Authority (FCA) in the United Kingdom and the United States Commodity Futures Trading Commission (CFTC) in relation to investigations into failings in the bank’s Foreign Exchange business within its Corporate & Institutional Banking division.
RBS has agreed to pay penalties of £217m ($345.8m) to the FCA and $290m to the CFTC to resolve the investigations.
These penalties are covered by the £400m ($637.4m) provision recorded in the Q3 2014 results. As previously disclosed, RBS remains in discussions with other governmental and regulatory authorities on these issues, including the United States Department of Justice and certain other financial regulatory authorities. The timing and amounts of any further settlements and related litigation risks however remain uncertain and could be significant.
Philip Hampton, RBS Chairman, said: 'The RBS Board fully accepts the criticisms within today’s announcements and condemns the actions of those employees responsible for this misconduct. Today is a stark reminder of the importance of culture and integrity in banking and we will rightly be judged on the strength of our response.
'We take these criticisms extremely seriously and are acting to ensure that our employees adhere to the highest standards and that our systems and controls are fit for purpose. We are continuing thorough investigations into the conduct of all employees who were involved in this part of the business. We have analysed millions of documents and are reviewing the conduct of over 50 current and former members of trading staff around the world as well as dozens of supervisors and senior management responsible and accountable for this business. As part of that process, we have already placed six individuals into a disciplinary process, three of whom are currently suspended, pending further investigation. We will make a public statement before the end of the year on the progress of the conduct investigation'.
Ross McEwan, RBS Chief Executive, said: 'We have insisted on a comprehensive investigation and an open and honest dialogue with the regulators. I am grateful to the FCA and the CFTC for recognising RBS’s cooperation throughout the process and the remediation work we have already undertaken in the Corporate & Institutional Banking division. RBS fully supports the industry-wide remediation programme announced today and will actively contribute to the important work of the Fair and Effective Markets Review. We will continue to take an open and cooperative approach with other global regulators as part of their investigations.
'Since becoming Chief Executive, I have worked to ensure that everyone within the bank understands the importance of regaining the trust of our customers. In order to achieve that trust we must set ourselves the highest standards of integrity and professionalism, both individually and collectively - this episode has clearly shown us to have fallen well short of that. Now, it’s up to us to show that we can learn the lessons of these mistakes and can be worthy of earning trust in the future'.