RBS to be fined £15m for giving poor sales advice to mortgage customers

RBS branch sign

The Financial Conduct Authority (FCA) will fine Royal Bank of Scotland about £15m for giving poor sales advice to mortgage customers in the latest blow to the taxpayer-controlled bank's reputation.

RBS's chief executive, Ross McEwan, has promised to clean up RBS after it was hit by a series of big fines across its businesses. The fine relates to UK customers.

McEwan has said RBS needs to regain the trust of its customers if it is to turn itself around after six years of scandals and dire financial performance, and has admitted the bank's mortgage advisers needed better training.

The bank has been fined hundreds of millions of pounds by UK and international regulators since it was rescued by the taxpayer in 2008. Past penalties include £390m for rigging the benchmark Libor rate and £8.75m for breaches of money-laundering rules by its Coutts business. RBS has also set aside £3.2bn for misselling customers payment protection insurance.

RBS is under investigation, along with other banks, in connection with alleged collusion in the foreign exchange market. It is also waiting for a big fine from the FCA over the breakdown of its computer systems in 2012.

McEwan joined RBS that year to lead its retail bank and took over as group chief executive in October last year to replace Stephen Hester, who was ousted by the chancellor, George Osborne. McEwan and his chairman, Sir Philip Hampton, have said the threat of litigation and regulatory action is the biggest obstacle to the government starting to sell the 81% stake in RBS acquired when the taxpayer bailed the bank out at the height of the financial crisis.

The punishment for RBS will take the FCA's fines this year to about £265m. The regulator doled out £136m in penalties in the first half of this year, suggesting a slowdown from last year's record £474m. But last month's £105m fine for Lloyds Banking Group put it on track for another bumper year.

RBS and the FCA declined to comment on the fine, which is due to be announced on Wednesday morning.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for The Guardian on Tuesday 26th August 2014 19.36 Europe/London

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