Bailed-out British lender Royal Bank of Scotland (RBS) has been fined £28.6 million (US$43 million) for sharing loan pricing details with rival Barclays, Britain’s Office of Fair Trading (OFT) said yesterday.
The OFT said RBS executives broke competition law by giving their counterparts at Barclays information on how RBS priced its loans to professional services firms such as lawyers and accountants, a market dominated by the two lenders.
There is evidence Barclays used the information to set its own prices, but the bank escaped a fine because it reported the matter to the OFT, the watchdog said.
“Any company that discloses confidential future pricing information to its competitors risks a substantial penalty,” said Ali Nikpay, the OFT’s senior director of cartels and criminal enforcement. “It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organization.”
RBS, 84 percent state-owned after receiving a taxpayer-funded bailout at the height of the banking crisis, said that of the two employees involved, one had left the bank, while the other faced suspension and further investigation.
“This is a deeply regrettable and isolated case from nearly two years ago,” an RBS spokesperson said. “We have cooperated fully with the OFT throughout and have introduced stringent additional competition law training to ensure that this unacceptable behavior does not happen again.”
Barclays said it alerted the OFT in March 2008 after it emerged that some executives in its professional services banking team “had been unilaterally approached from outside Barclays in a manner which we regarded as inappropriate.”
The OFT’s investigation did not go beyond the professional services banking division, Barclays said.
RBS’s fine was reduced from £33.6 million because the bank admitted breaking the law and agreed to cooperate with investigators, the OFT said.
The watchdog has the power to fine companies up to 10 percent of their turnover for breaches of competition law, but has a policy of showing leniency towards companies who report their wrongdoing.
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