RBS Hit By £15m FCA Mortgage Advice Fine
Royal Bank of Scotland (RBS) will on Wednesday add to the list of misconduct for which it has been fined since it was bailed out by British taxpayers when it pays millions of pounds for giving poor advice to mortgage customers.
Sky News has learnt that RBS is to pay in the region of £15m as part of a settlement with the Financial Conduct Authority (FCA).
The penalty imposed by the watchdog's enforcement division is understood to relate to inadequate advice given to consumers who took out mortgages with RBS after the Government became a major shareholder in 2008.
The news threatens to embarrass Ross McEwan, RBS chief executive, who took on responsibility for the bank's retail operations in 2012 and has since vowed to clean up the lender in an effort to restore trust among customers.
People close to RBS insisted that the misconduct to which the fine related was "historic" and that Mr McEwan had already taken significant steps to improve staff training and advice given to customers.
Insiders said that there had been a brief period last year when RBS had effectively ceased selling mortgages while staff were retrained although it is unclear whether this related directly to the FCA fine being levied this week.
The penalty will be only the latest of a string of fines with which RBS has been hit by the FCA and its predecessor, the Financial Services Authority (FSA), since it was rescued from the brink of collapse almost six years ago.
The bank has paid out hundreds of millions of pounds for its role in the global Libor rate-rigging scandal; been fined for failing to report transactions properly; compensated customers of Coutts, its wealth management operation; and settled with regulators in the UK and the US for failing to comply with anti-money laundering requirements.
Last month, Mr McEwan and Sir Philip Hampton identified ongoing litigation risks as among the most significant threats to RBS's continuing recovery, which saw it bring forward its half-year results announcement because the underlying figures were better than the City had been expecting.
A settlement with the FCA's enforcement division over an IT systems failure in 2012 is expected within months, while huge fines for manipulating foreign exchange markets could hit RBS and other banks before the end of the year.
The FCA and RBS both declined to comment.