John Hourican: Right That I Give Up £4m
Attempts by Royal Bank of Scotland (RBS) traders to manipulate interbank borrowing rates were "a disgrace" and had "brought shame on our company", the departing head of its investment bank said today.
In a memo to staff, which has been obtained by Sky News, John Hourican said he bore "some responsibility for the continuing actions of all our employees" despite having no involvement in or knowledge of efforts to rig Libor submissions by RBS staff.
The taxpayer-backed bank has announced that it is to pay £390m in fines to UK and US regulators and that it has struck a two-year deferred prosecution agreement with the US Department of Justice.
Confirming his intention to step down in April after nearly five years in charge of one of the world's largest investment banks, Mr Hourican said it was "with some sadness" that he would be leaving.
The RBS executive confirmed Sky News' disclosure that he would give up millions of pounds of deferred share awards and receive no bonus for 2012.
"I will forfeit all unvested compensation awarded to me in respect of prior years that is subject to clawback and I will take no bonus in relation to 2012. It is the right thing to do," he told staff. "The jobs that many of us do are well paid and with high reward comes a greater responsibility."
RBS's markets and international banking arm, which Mr Hourican heads, employs more than 16,000 people around the world. The disgracing of the bank was, it said today, the result of actions by 21 employees who have since been sacked or been subject to disciplinary proceedings.
Mr Hourican told staff that the Libor manipulation had been of the utmost seriousness.
"These settlements arise because of the misconduct of some of our former colleagues who engaged in improper and unauthorised attempts to manipulate interest rate data submissions between 2006 and 2010," he wrote.
"The effect of this behaviour, sometimes acting in concert with individuals at other firms, has been to undermine the integrity of Libor, a key international metric used to price many financial instruments."
Mr Hourican added that the continuation of the misconduct even as RBS's management fought to keep the company alive had made the situation even more intolerable.
"The conduct of those involved was disgraceful and has brought shame on our company. Although the attempts to influence Libor submissions started before I took this job, it continued whilst I was in charge of the division.
"The continuation of this behaviour during the company's darkest hours, when so many of us were fighting to ensure its survival, makes it all the more shameful.
"The people involved have left RBS and there is no place for that kind of behaviour in this company."
The investment bank chief also paid tribute to his staff, saying he had been "very pleased to play my part in the rehabilitation of this company and I have been humbled, at every turn, by the commitment, energy and faith that each of you have shown".
During the last four-and-a-half years, he said, RBS had achieved much, reducing the investment bank's balance sheet by £500bn, closing its operations in 14 countries and delivering more than £12bn of profits to shareholders.
"Regrettably, we saw thousands of our colleagues lose their jobs," Mr Hourican said.
Signing off, he said he was confident that the business was in safe hands.
"[You have] the resources and the leadership to re-establish the value of this business for all its stakeholders. Keep up the good work. Be honest. Earn trust every day that you come to work," he wrote.