31 Jan 2013 14:19
Update on past sales of Interest Rate Hedging Products
The Royal Bank of Scotland Group Plc
31 January 2013
Statement on FSA announcement on interest rate hedging products
The Royal Bank of Scotland Group plc ("RBS") notes the announcement by the Financial Services Authority ("FSA") on the findings of its industry wide review of the sale of interest rate hedging products ("IRHPs") to some small and medium sized businesses ("SMEs") that were classified as retail clients under FSA rules. RBS is committed to treating its customers fairly and to delivering on its obligations under its Undertaking to the FSA.
In its Q2 2012 results, RBS provided £50 million for the redress it expects to offer retail clients who were sold structured collar products. As a result of today's rulings from the FSA on IRHPs (to be applied to past business) RBS will, in its 2012 Annual Results, meaningfully increase its provision to meet the additional costs of redress across its broader SME IRHP portfolio (attributable primarily to products sold in the period 2001 to 2008 when interest rates were higher). This larger provision will be determined once we have further engaged with the FSA on its position. We expect that this provision will remain consistent with the achievement of RBS's target capital ratios.
For further information contact:
RBS Group Investor Relations Richard O'Connor, Head of Investor Relations +44 207 672 1758 | RBS Group Media Relations +44 207 672 1913 |
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