RBS Among Eight Banks in Euro Bond Cartel Probe
(Bloomberg) -- Royal Bank of Scotland Group Plc is among eight global banks being scrutinized in a probe into an alleged euro bond trading cartel, a person familiar with the matter said.
The details of the Edinburgh-based lender’s involvement and any potential fine resulting from the European Union investigation is unknown, the person said, declining to be identified as the details are private.
RBS and the European Commission declined to comment. Shares in RBS fell as much as 0.7 percent before recovering.
While the EU’s powerful antitrust arm often trails behind financial authorities in the U.S. and the U.K. in punishing collusion between traders, its fines can sometimes be hefty. The European Commission said in January it’s investigating several unidentified firms for “a collusive scheme that aimed at distorting competition” for trading sovereign bonds issued by eurozone states from 2007 to 2012.
Chief Executive Officer Ross McEwan has worked to turn around RBS following the world’s most expensive bailout during the financial crisis. He took the reins at RBS in 2013 and set about reversing Fred Goodwin’s aggressive global expansion, while cleaning up the balance sheet and trailing litigation costs.
The bank’s legal tab since the start of 2008 amounts to about $17.9 billion, according to company filings and calculations by Bloomberg. Last year, it paid $4.9 billion for its role in peddling mortgage-backed bonds that fueled the U.S. housing meltdown.
For the first time since the financial crisis, RBS resumed paying dividends last year and it’s running one of the highest capital ratios in Europe. The government still owns a 62 percent stake in the lender but is considering selling some of this.
The bank is due to reports its results on Feb. 15.
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