RBS fined for loan leak to Barclays
Ulster Bank parent the Royal Bank of Scotland (RBS) was yesterday fined £28.6m for breaking competition law after revealing details of its loan prices to rival Barclays.
The Office of Fair Trading (OFT) said RBS told Barclays the cost of its loans to large professional firms such as solicitors and accountants through a series of contacts between October 2007 and February or March 2008.
Ali Nikpay, the OFT's senior director of cartels and criminal enforcement, said: "Any company that discloses confidential future pricing information to its competitors risks a substantial penalty." The breaches date back to the early stages of the credit crunch, when disgraced former boss Sir Fred Goodwin was still running RBS and banks across the board were tightening up lending terms.
But the fine for competition offences comes at a time when the banking sector already faces anger for starving firms of credit while investment bankers continue to collect bumper payouts.
RBS, which is now 84% taxpayer-owned after a series of bailouts, had its fine reduced from an original £33.6m by agreeing to co-operate with the OFT. As well as general details of loan pricing, RBS also disclosed specific confidential details on the cost of two facilities it intended to offer.
The OFT added that it had "found evidence that the information was taken into account by Barclays in determining its own pricing".
Mr Nikpay added: "It is important companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation. This case underlines the OFT's commitment to protecting competition in the financial services sector."
An RBS spokesman said: "This is a deeply regrettable and isolated case from nearly two years ago, involving only two members of staff."