RBS suspends bonuses as part of forex review

Royal Bank of Scotland Group suspended bonuses of 18 traders as part of a review of foreign-exchange business in the wake of a $634m (€521.25m) fine.

RBS is reviewing the conduct of more than 50 current and former traders who worked at the investment bank, it said in a statement yesterday. Six employees face disciplinary action, with three of them suspended pending investigations.

A former RBS trader was arrested on December 19 in relation to the UK Serious Fraud Office’s investigation into currency rigging — according to a person with knowledge of the situation.

Regulators in the US, Britain and Switzerland last month ordered six banks, including RBS and HSBC Holdings, to pay about $4.3bn to settle a probe into the rigging of foreign-exchange rates.

“We are undertaking a robust and thorough review into the actions of the traders that caused this wrongdoing and the management that oversaw it,” Jon Pain, RBS’s head of conduct and regulatory affairs, said in the statement.

“No further bonus payments will be made or unvested bonus awards released to those in scope of the review until it has concluded.”

The SFO confirmed that it had last week arrested a man in Billericay, a town in Essex, east of London. The agency declined to comment on his identity or employment.

RBS was up 0.6% to 390.2p yesterday evening in London trading, valuing the bank at £44.7bn.

CEO Ross McEwan’s efforts to return the 80% government-owned bank to full private ownership have been overshadowed by a series of scandals. Edinburgh-based RBS was also fined £56m in November by British regulators for the 2012 collapse of its computer system that left millions of customers without access to accounts.

The currency settlements last month were the first since authorities began investigating allegations last year that dealers at the biggest banks colluded with counterparts at other firms to rig foreign-exchange benchmarks. Banks could still face further penalties in the probe into misconduct in the $5.3tn-a-day currency market, the world’s largest. The US Justice Department and the SFO are carrying out criminal investigations.

RBS said that given the “complex” nature of the investigations, it will provide a further update when the review is complete, probably in the first quarter.

The lender recovered money paid to some employees and cut bonuses for some executives after it was fined $612m for manipulating the London interbank offered rate last year.