RBS says sorry as it amasses £830 million in penalties over forex rigging scandal

RBS joined Barclays, JPMorgan, UBS and Citigroup in being penalised in what is one of the biggest combined bank settlements in history.

RBS said it had dismissed three employees, and suspended two more, following its role in the manipulation of the £3 trillion-a-day foreign exchange markets.

It came as the Treasury revealed that RBS will not be included in plans to offload £23 billion worth of shares in the biggest ever sell-off of corporate assets.

Chancellor George Osborne has confirmed plans to offload shares in Lloyds Banking Group, Eurostar and part of the student loan book. But RBS will not be included, the Treasury said.

As the bank agreed its forex penalty, it said it was continuing to review the actions and responsibilities of the managers of the foreign exchange business and the Corporate and Institutional Banking division during the relevant period.

RBS, which was landed with a £430m penalty in the US, said it would pay £254m to its Department of Justice and £176m to the country's Federal Reserve System to "resolve the investigations".

It comes on top of a £399m penalty last November, including £217m by the UK's Financial Conduct Authority and £186m by the US Commodity Futures Trading Commission (CFTC).

In addition, RBS and RBS Securities Inc. have reached an agreement to settle an antitrust class action brought on behalf of plaintiffs who entered into foreign exchange transactions with RBS.

The bank said the agreement is subject to execution of a final settlement agreement and approval of the federal court in New York that is presiding over the matter.

The five banks pled guilty to manipulating the price of US dollars and euros traded on the foreign currency exchange spot market from December 2007 to January 2013, the US Justice Department said.

Traders at the firms, who described themselves as members of The Cartel used electronic chat rooms and code words to manipulate exchange rates "in an effort to increase their profits," the justice department said.

US Attorney General Loretta Lynch said the they were guilty of "breathtaking flagrancy".

The agreements do not prevent the US Justice Department from prosecuting executives and other employees at the banks for the illegal activity.

Ms Lynch said the Department of Justice was still investigating the cartel and declined to comment on whether individuals would eventually be charged.

The issues were "so systemic" that prosecutors said the parent companies had to be sanctioned at the highest levels, she said.

"The penalty all these banks will now pay is fitting considering the long-running and egregious nature of their anticompetitive conduct. It is commensurate with the pervasive harm done. And it should deter competitors in the future from chasing profits without regard to fairness, to the law or to the public welfare," she said.

Sir Philip Hampton, RBS chairman, issued an apology, saying: "The RBS board fully accepts the conclusions.... We strongly condemn the actions of those responsible and regret the control failings that allowed such misconduct to take place.

"This episode has exposed serious shortcomings at both individual and collective levels from which we continue to learn. As part of this effort we are committed to implementing further improvements to systems and controls.

"We are continuing thorough investigations into the conduct of employees in this part of the business. As a result, we have dismissed three people and suspended two more pending further investigation. This work is on-going and will take into account the findings contained in these settlements."

The new penalty now brings the total bill for the foreign exchange scandal, one of the most expensive in banking history, to almost $10bn.

UBS said it also reached a settlement in a wide-ranging Justice Department criminal investigation into manipulation of foreign exchange markets, agreeing to pay penalties of more than $500 million and pleading guilty to a criminal charge stemming from a separate case.

Ross McEwan, RBS chief executive, added: "The serious misconduct that lies at the heart of the announcements has no place in the bank that I am building. Pleading guilty for such wrongdoing is another stark reminder of how badly this bank lost its way and how important it is for us to regain trust.

"To regain that trust we are putting the interests of our customers at the heart of this business and its culture. It has taken far longer than anyone hoped to root out all the past conduct problems and practices and as a result we still have significant challenges on the horizon.

"We are determined to learn the lessons from our past mistakes and to hold those responsible fully to account for their actions."