Royal Bank of Scotland to Pay Fine to Settle Libor Investigations

Royal Bank of Scotland Group Plc , Britain’s biggest taxpayer-owned lender, said it expects to pay a fine in the coming months to settle regulators’ probes into allegations the lender tried to manipulate Libor. Whether the penalty exceeds the record 290 million pounds ($467 million) Barclays Plc paid in June or not “it will still be a miserable day in RBS’s history,” Chief Executive Officer Stephen Hester told reporters on a call today as the bank posted third-quarter operating profit that beat analyst estimates. “I’d be disappointed if we were talking to you at our full-year results in February without having had more news.” RBS is one of more than a dozen banks worldwide facing regulatory probes into allegations that they manipulated the London interbank offered rate, thebenchmark for more than$300 trillion of securities. The Edinburgh-based lender has fired at least four traders following an internal probe, and last month suspended its head of rates trading for Europe and the Asia- Pacific region, the first senior manager to be put on leave. Libor is the biggest regulatory obstacle to overshadow Hester’s attempts to overhaul the company after it received the biggest banking bailout in history in 2008. RBS said today it would set aside a further 400 million pounds to compensate clients wrongly sold loan insurance and derivatives,bringing the total the bank has earmarked to 1.7billion pounds.