RBS expects fine over Libor scandal
The Royal Bank of Scotland expects to be fined for its role in the Libor rigging scandal, its chief executive has said.
Stephen Hester said the state-backed lender was in the process of being investigated by the Financial Services Authority over its role in attempting to manipulate the benchmark borrowing rate.
But he did not comment on the size of any financial penalty the bank expects to face.
It comes after Barclays was last month fined £290 million by UK and US regulators and saw a number of executives, including boss Bob Diamond, resign over the controversy.
"RBS is one of the banks tied-up in Libor," Mr Hester said. "We'll have our day in that particular spotlight as well."
He continued: "Even though when all the Libor (fines) are out most of it is going to be around the wrongdoings of a handful of people at a number of banks. Those wrongdoings taint the whole industry beyond the handful of people and that makes it a huge problem."
The senior banker's Libor admission follows last month's computer meltdown which hit millions of RBS customers and comes ahead of the bank's first-half results, which are due to be published on Friday.
Mr Hester, who waived his annual bonus following the IT crash, said the problems may have been avoided if more had been spent on upgrading existing computer systems rather than on developing new ones.
"RBS has seen a big mushrooming in spending on technology," he added. "With hindsight maybe a bit more of that increase in spend should have been in the core taken-for-granted systems that work every day."
Mr Hester is expected to highlight the reputational challenge facing the City and signal a programme within the RBS to address corporate culture when the interim results are announced.