Past sales of Interest Rate Hedging Products
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:
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RBS Group Investor Relations Richard O'Connor, Head of Investor Relations +44 207 672 1758 |
RBS Group Media Relations +44 207 672 1913 |
This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to RBS's regulatory capital position, risk-weighted assets, impairment losses and credit exposures under certain specified scenarios. In addition, forward-looking statements may include, without limitation, statements typically containing words such as "intends", "expects", "anticipates", "targets", "plans", "estimates" and words of similar import. These statements concern or may affect future matters, such as RBS's future economic results, business plans and current strategies. Forward-looking statements are subject to a number of risks and uncertainties that might cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statements. Factors that could cause or contribute to differences in current expectations include, but are not limited to, legislative, fiscal and regulatory developments, competitive conditions, technological developments, exchange rate fluctuations and general economic conditions. These and other factors, risks and uncertainties that may impact any forward-looking statement or the Group's actual results are discussed in RBS's UK Annual Report and materials filed with, or furnished to, the US Securities and Exchange Commission, including, but not limited to, RBS's Reports on Form 6-K and most recent Annual Report on Form 20-F. The forward-looking statements contained in this announcement speak only as of the date of this announcement and RBS does not assume or undertake any obligation or responsibility to update any of the forward-looking statements contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.
This information is provided by RNS
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