Hopes for a turnaround at the nationalized Royal Bank of Scotland (RBS) took a hit on Monday when the lender said it set aside ￡3 billion (US$5 billion) more to cover US legal costs and customer compensation claims in Britain.
The British bank, which is 80 percent-owned by taxpayers, announced the decision in a statement issued a month ahead of its full-year results. At the time of the financial crisis, the bank was involved in a number of businesses that have since come under scrutiny by regulators, chief executive Ross McEwan said.
“The scale of the bad decisions during that period means that some problems are still just emerging,” he said in a statement. “Billions of pounds have been spent to resolve conduct and litigation issues in recent years. Costs on this scale were not predicted by anyone when RBS was rescued in 2008.”
The UK government rescued RBS in 2008 with a ￡45 billion capital injection after former swashbuckling CEO Fred Goodwin brought the bank to near-collapse with an aggressive global expansion strategy that included the ill-fated purchase of Dutch lender ABN Amro.
Yet the bank’s problems did not end with the rescue and both McEwan and his immediate predecessor, Stephen Hester, have tried desperately to unravel years of mismanagement and excess.
UK Treasury Select Committee Chairman Andrew Tyrie said the bank and its customers continue to pay a heavy price for past misconduct.
“There is little prospect that the money needed to pay these fines can covered by claw-back of either vested remuneration or deferred bonuses from those responsible,” Tyrie said. “There should be in [the] future.”
The amount RBS said it has set aside on Monday included ￡1.9 billion to cover various claims related to mortgage-backed securities and securities-related litigation in the US.
The decision comes after other banks settled to pay for similar issues.
Last year, JPMorgan Chase paid a staggering US$13 billion in fines for selling risky mortgage bonds that it knew might fail to investors before the crisis.
Besides the mortgage-backed securities measure, RBS allocated ￡465 million to compensate customers to whom it had improperly sold payment protection insurance.
It set aside another provision of ￡500 million for interest rate hedging products.
“After five years of hard work and tough choices, the path ahead for RBS is much clearer,” McEwan said.
“We have restored our fundamental soundness and have the financial strength to deal with issues like this. We will now become a much simpler, more effective bank for our customers and shareholders,” he added.
McEwan had already said he would not take a bonus for last year or this year, while the bank on Monday said that eight other executives would also not be taking their bonuses.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS