RBS to be fined for IT mishap, mis-selling scandals

Royal Bank of Scotland is expected to incur a 300m-pound one-off charge in relation to IT breakdowns at Natwest and two mis-selling scandals.

According to an exclusive report by Mark Kleinman, the City Editor of Sky News, the bank will reveal details of the financial impact from these issues on Friday when it releases its first-half results.

The IT meltdown in June, which resulted in millions of customers of RBS and Natwest being unable to access their cash, will see the bank take a £125m charge relating to compensation and costs to improve its computer systems.

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In regards to the payment protection insurance (PPI) mis-selling scandal, the bank is expected to increase its provisions for compensating victims by around £130m, taking the total hit to £1.2bn, of which the rest was recognised in the lender's results last year.

Meanwhile, the provisions for compensating small businesses that were wrongfully sold expensive interest rate hedging products is thought to total £50m. Barclays, meanwhile, revealed last week that it took a £450m hit in the first quarter for that issue.

Shares were trading 5.23% lower at 204.13p by 14:37 on Thursday, pressured down further by rumours that the government, which already owns an 83% stake, is considering nationalising the bank in an effort to kick-start lending to businesses.

BC