RBS chief to step down without pay-off after rate-fixing scandal
The head of Royal Bank of Scotland's investment arm will stand down and forgo millions of pounds in share awards following political pressure over the Libor-rigging scandal, it has emerged.
John Hourican, who was brought into “rescue” the business after its Government bailout in 2008, will reportedly leave the bank without a payoff and relinquish £4m in share options awarded to him based on past performance.
The details of his exit are due to be announced by RBS on Wednesday with Mr Hourican expected to leave at the end of the month having led the winding-down of the bank's investment operation. The move followed weeks of pressure on RBS, which is 80 per cent taxpayer-owned, to claw-back shares owed to Hourican.
RBS is today expected to agree to pay around £400m in fines to British and American regulators for Libor rate-rigging.
The development emerged after the new Barclays chief executive Antony Jenkins said he was “shredding” the former boss Bob Diamond's legacy. Mr Diamond lost his job when the bank was hit with a £290m fine after traders tried to fix Libor rates.
The beleaguered bank had become “too short-term focused, too aggressive and too self-serving”, Mr Jenkins told the Parliamentary Commission on Banking Standards, in devastating testimony about previous management failures. Mr Jenkins, who plans to outline his own strategy in detail next week, was speaking shortly after the bank set aside a further £1bn to cover compensation to people who were mis-sold payment protection insurance (PPI) and to small businesses that mis-sold interest-rate-swap contracts.
Mr Jenkins told members that changing the bank's culture would take “an iron will” but pledged that “you absolutely will see changes”.
He said: “We should shred the past, where we were too short-termist. We are shredding that legacy.” He spoke after the commission's chairman Andrew Tyrie said: “It doesn't seem to matter what the scandal is, Barclays seems to have a finger in each pie, quite a big one.”
Mr Tyrie also called into question the sincerity of the bank's reform pledges after its chairman Sir David Walker leapt to the defence of its remuneration committee that sets pay rates for top bankers. At an earlier hearing, the pay committee chair Sir John Sunderland said that even with hindsight he would still have paid Mr Diamond a bonus for a 2011, despite the former chief executive saying himself that performance was “unacceptable” with the bank missing targets. Sir David earlier ducked questions about the bank's controversial fundraising during the financial crisis which is now subject to a Serious Fraud Office investigation.
A cash call involving selling shares to Qatar and other investors in the Middle East saw the bank raise enough money to avoid being bailed out by British taxpayers, although the generous terms offered were criticised by some shareholders. Last week, allegations arose that the Qataris were loaned the money to buy the new shares in Barclays by Barclays. Sir David said he could not comment on the situation because it was subject to an investigation.
Committee members were further angered that the bank had blacked out huge sections of a internal report into the “flawed” culture at Barclays Wealth in America. Even the page numbers were inked over.
Barclays said it would consider refiling the report with less “redaction” although names will still be blacked out.
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