RBS to reveal funds held to settle forex probes
By Matt Scuffham
LONDON (Reuters) - Royal Bank of Scotland will announce how much it has set aside to cover potential fines for manipulating currency markets when it reports third-quarter results on Friday, several banking sources said.
RBS, which is 80 percent-owned by the British government, is one of six banks in talks with Britain's financial regulator to settle allegations that its staff were involved in the rigging of the $5 trillion-a-day global currency market.
Rival Barclays said on Thursday that it had set aside 500 million pounds ($800 million) to cover potential FX fines. JP Morgan , UBS and Deutsche Bank have also set aside large sums.
Chief Executive Ross McEwan has previously said that the FX investigation could pose a bigger problem for banks than the Libor rate-rigging scandal. RBS paid $612 million last year to settle allegations that it manipulated Libor - one of several banks hit with big fines for rigging interest rate benchmarks.
Analyst estimates provided by RBS forecast a pretax profit of 1.1 billion pounds in the third quarter, against a 634 million pound loss in the same period last year.
The economic revival in Britain and Ireland has enabled RBS to recover debts that it had previously written off. The amount recovered is expected to be 590 million pounds in the third quarter, according to the average forecast of five analysts polled by Reuters. In the same period last year the bank booked impairments of 1.2 billion pounds.
The improvement in the bank's performance has sparked hopes that the government could soon start selling the RBS shares Britain acquired through its 45 billion pound rescue of the bank during the 2007-09 financial crisis.
Oliver Holborn, head of capital markets at UK Financial Investments (UKFI), the government agency that manages the state's RBS stake, told lawmakers this month that Britain is closer to selling part of its stake than previously envisaged.
Bankers and political sources told Reuters this month that a first sale of RBS shares could be possible in the next two years.
(1 US dollar = 0.6193 British pound)
(Editing by David Goodman)
