TAXPAYER-backed Royal Bank of Scotland yesterday agreed a £391 million settlement with US and UK regulators as it became the third banking giant to admit its part in the Libor rate rigging scandal.
RBS, which is 81 per cent government owned, will recoup around £300m from its staff bonus pool and by clawing back previous awards and said investment banking boss John Hourican will step down, forfeiting his 2012 bonus and long-term incentive shares.
George Osborne condemned “totally unacceptable” behaviour at the bank as the details emerged.
Under its settlement, RBS, owner of the Ulster Bank, has also agreed a deferred prosecution agreement with the US Department of Justice (DoJ) - a deal that could see it face tough sanctions if it commits any form of criminal offence during the period - while its Japanese arm has pleaded guilty to wire fraud.
RBS said 21 staff were involved in attempting to manipulate interbank lending rates - specifically Japanese Yen and Swiss Franc Libor submissions - from October 2006 to as recently as November 2010.
All 21 have left or been subject to disciplinary action and two managers with supervisory responsibilities have stepped down.
Six staff have been dismissed, including two managers, while six have been severely disciplined or are going through a disciplinary process.
Another eight left the organisation before disciplinary action could be taken and one was dismissed for misconduct not related to these findings, added RBS.
All staff that have left the bank as a result of the investigation received no bonus for 2012 and saw full claw-back of any outstanding past awards.
Mr Hourican leaves with 12 months pay worth £775,000, but will forfeit £9m in bonuses for last year and clawed-back previous awards.
In a statement to the House of Commons, Financial Secretary to the Treasury Greg Clark said the manipulation of Libor was “motivated by greed” and the findings against RBS were “grave”.
It was right for Mr Hourican to leave his post and forfeit bonuses, he said.
“This is another day of shame for Britain’s banks, and it is vital that we recognise it as such, not because Britain stands alone in this and similar scandals - which, as we know, is far from being the case - but because Britain must stand out in the way we put things right.
“So let there be no excuses. Instead, let us have enduring, fundamental reform and let us have justice too.
“’My word is my bond’ is the motto on which the City was built. We must rebuild that bastion of confidence here in Britain, the best place in the world to do business, but the worst place to abuse the trust on which free enterprise depends.”