RBS fined for competition breach

Royal Bank of Scotland has agreed to pay a fine after admitting breaches of competition law, OFT said
12 April 2012

Royal Bank of Scotland has been hit with a £28.6 million fine by the competition watchdog after two employees revealed details of its loan prices to Barclays.

The part-nationalised bank was hit with the penalty following a two-year probe by the Office of Fair Trading (OFT) after Barclays came forward in March 2008.

The duo in the RBS professional practices team told its rival the cost of loans to firms such as solicitors and accountants between October 2007 and February or March 2008.

The bank, which owns NatWest and is 84% owned by the taxpayer, said the behaviour of its staff was "unacceptable". One of the employees involved has since left - although the other still works for RBS and now faces suspension and further investigation.

The breaches probed by the OFT date back to the early stages of the credit crunch, when disgraced former boss Sir Fred Goodwin was still running RBS and lenders were tightening up terms for borrowers. But the fine comes at a time when banks already face public anger over starving firms of credit in the recession and the lingering bonus culture within the industry.

Ali Nikpay, the OFT's senior director of cartels and criminal enforcement, said: "Any company that discloses confidential future pricing information to its competitors risks a substantial penalty."

RBS had its fine reduced from an original £33.6 million by agreeing to co-operate with the OFT. Barclays approached the OFT over the breaches in March 2008 and will avoid sanctions under leniency rules.

As well as general details of loan pricing, RBS also disclosed specific confidential details on the cost of two facilities it intended to offer.

The OFT added that it had "found evidence that the information was taken into account by Barclays in determining its own pricing".

An RBS spokesman said: "This is a deeply regrettable and isolated case from nearly two years ago, involving only two members of staff, one of whom has left the bank and one other who faces suspension and further investigation now the case has been settled. We have co-operated fully with the OFT throughout and have introduced stringent additional competition law training to ensure that this unacceptable behaviour does not happen again."

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