The bonus pot at state-backed Royal Bank of Scotland will shrink this year as the lender pays an estimated £350 million fine for its role in the interbank lending rate scandal, according to reports.
Traders at the bank’s investment arm are understood to have been told by senior staff that the bonus pool will be smaller as cash is diverted to settle claims that it was involved in the Libor-rigging controversy.
RBS is thought to be nearing a deal with regulators in Japan, Singapore, the UK and US over claims that it was involved in manipulating the rate that governs the price of more than $500 trillion (£309tn) of loans and transactions around the world, including household mortgages.
The UK’s Financial Services Authority and two US regulators have already fined Barclays a combined £290m, while Swiss bank UBS has agreed to pay almost £1 billion to regulators in Switzerland, the UK and US.
Zurich-based UBS admitted that some staff had “engaged in efforts to manipulate submissions” and others had “colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions”.
Traders at RBS have also been told the bank may confiscate bonuses from previous years that are due to be paid in the new year, according to the reports. RBS declined to comment.