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The Royal Bank of Scotland Group plc (RBS)

  • Nov. 20, 2014, 6:40 AM
    • British regulators fined Royal Bank of Scotland (NYSE:RBS) £56M ($88M) today over a technology failure that left millions of customers unable to access their accounts in 2012.
    • The Financial Conduct Authority says that the IT failure had affected more than 6.5M RBS, NatWest, and Ulster Bank customers over the course of several weeks.
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  • Nov. 14, 2014, 2:07 AM
    • Royal Bank of Scotland (NYSE:RBS) is fully exiting its U.S. mortgage trading business after originally planning to reduce it by two-thirds.
    • RBS said in May it would eliminate hundreds of jobs in the U.S. due to new legislation passed by the Fed in February.
    • The new laws impose foreign banks with $50B or more in U.S. assets, to set up an intermediate holding company subject to the same capital, risk management and liquidity standards as U.S. banks.
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  • Nov. 12, 2014, 2:24 AM
    • Global regulators have fined five major banks, including UBS (NYSE:UBS), HSBC (NYSE:HSBC), Citigroup (NYSE:C), Royal Bank of Scotland (NYSE:RBS) and JPMorgan (NYSE:JPM) a total of $3.4B over allegations of price fixing and manipulating benchmarks in the $5T-a-day foreign exchange market.
    • The penalties were imposed by Britain's Financial Services Authority, the U.S. Commodity Futures Trading Commission and Swiss regulator FINMA.
    • Barclays (NYSE:BCS) had been expected to be part of the settlement but the FCA said its investigation into the U.K. bank was continuing.
  • Oct. 31, 2014, 10:38 AM
    • Royal Bank of Scotland (RBS +4.8%) is the latest to do so, today announcing the setting aside of $640M for potential settlements in the currency-rigging investigations.
    • In total, seven major U.S. and European banks have boosted their legal reserves by $6.5B in October. Last night, Citigroup (C +0.4%was forced to cut its Q3 earnings by $600M amid "rapidly-evolving" probes.
    • UBS has put aside the most of any single bank this month - $1.9B. Next in line is Deutsche Bank (DB +0.7%) with $1.1B, and JPMorgan (JPM +1.3%) with $1B. None of the lenders disclosed exactly how much was specifically for foreign exchange, and none have yet been formally accused of wrongdoing.
    • Barclays (BCS +5.6%) reserved $800M for FX-related settlements, and Credit Suisse (CS +0.5%) $400M.
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  • Oct. 31, 2014, 6:03 AM
    • Customers of 154 branches have been told about closures, but RBS (NYSE:RBS) has not formally announced them.
    • CEO Ross McEwan conceded today that 102 branches had already been shut. He insisted RBS doesn't have a formal branch reduction program, and wouldn't indicate how many would be closed next year against a backdrop of a 30% reduction in the number of branch transactions as customers increasingly adopt internet technology.
    • Source: The Guardian
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  • Oct. 31, 2014, 3:54 AM
    • Following in the footsteps of Barclays and Citi, Royal Bank of Scotland (NYSE:RBS) says it had set aside £400M ($639M) to cover potential fines for manipulating currency markets.
    • Another £100M will be set aside to compensate customers mis-sold loan insurance.
    • Regarding Q3 earnings, the bank announced that it had made a pretax profit of £1.27B vs. a loss of 634M the year before.
    • RBS also confirmed that it plans to keep its Ulster Bank business, following an upturn in the Irish economy.
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  • Oct. 24, 2014, 2:44 AM
    • Thirty-one banks are set to participate in the Fed's 2015 stress tests, which will see how they can withstand pressures such as a spike in oil prices, a rise in the U.S. unemployment rate or an increase in risky corporate loans. The capital plans are due in January.
    • Among the bank's that failed last year's tests are Citigroup (NYSE:C), and the U.S. units of HSBC (NYSE:HSBC), Santander (NYSE:SAN) and RBS (NYSE:RBS).
    • Deutsche Bank (NYSE:DB) will participate for the first time, and has already felt pressure from the NY Fed, which has told it in a private letter that its regulatory reports were "low quality, inaccurate and unreliable".
    • This Sunday, the ECB will release results for stress tests of 130 eurozone banks amid a deteriorating economic outlook for the region.
  • Oct. 21, 2014, 8:49 AM
    • At issue are charges of rigging Swiss franc Libor benchmark interest rates, and JPMorgan (NYSE:JPM), UBS, and Credit Suisse (NYSE:CS) will be collectively fined more than $115M, reports Reuters. Not being penalized is RBS thanks to its role as a whistleblower in the case.
    • JPMorgan is reportedly set to receive the biggest fine at about $89M.
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  • Oct. 10, 2014, 5:22 AM
    • The U.K.'s Financial Services Authority has accused six banks, including JPMorgan (NYSE:JPM) and UBS (NYSE:UBS), of system and control failures in their forex operations, the FT reports.
    • The allegations are part of the FSA's investigation into the possible manipulation of currency markets, which is one of a number of probes by authorities around the world.
    • Last month, the U.K. regulator started settlement talks with the two banks, as well as with Barclays (NYSE:BCS), Citigroup (NYSE:C), HSBC (NYSE:HSBC) and RBS (NYSE:RBS). The discussions could lead to fines of £1.5B in total.
    • By focusing on an inability to stop staff from engaging in misconduct rather than on actual manipulation, the FSA could help the banks limit the impact of lawsuits that have been filed in the U.S. over forex rigging.
  • Oct. 8, 2014, 2:18 AM
    • Eighteen of the world's largest banks, ranging from Credit Suisse (NYSE:CS) to Goldman Sachs (NYSE:GS), have agreed to give up the right to "close out" deals on derivatives contracts if a financial institution runs into trouble, FT reports.
    • The International Swaps and Derivatives Association is due to announce the agreement to change its “protocols”, which govern the $700T market, in the next few days. They will take effect from January 1, 2015.
    • Related stocks: HSBC, JPM, OTC:BNPZY, DB, BCS, BAC, SAN, C, RBS,
  • Sep. 30, 2014, 3:20 AM
    • Royal Bank of Scotland (NYSE:RBS) says it will release £800M ($1.3B) from provisions it had put aside to cover losses on bad loans following an improvement in the economy, especially in Ireland.
    • The bank expects losses from bad loans to be "significantly" lower than its previous guidance of £1B this year due to continued improvement in economic conditions and asset prices.
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  • Sep. 29, 2014, 6:43 AM
    • UBS (NYSE:UBS) has entered settlement talks over allegations it was involved in manipulating foreign exchange rates.
    • Although the bank did not identify a regulator, Reuters was informed by sources on Friday that Britain's Financial Conduct Authority was talking to UBS and five other banks - Barclays (NYSE:BCS), HSBC (NYSE:HSBC), Royal Bank of Scotland (NYSE:RBS), JP Morgan (NYSE:JPM) and Citi (NYSE:C).
    • A settlement could result in each bank being fined hundreds of millions of pounds, depending on the severity of the misconduct.
    • As well as the FCA, authorities in the U.S., Switzerland and Hong Kong are investigating the $5.3T a day foreign exchange market.
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  • Sep. 25, 2014, 6:59 AM
    • Philip Hampton has been chairman of RBS since 2009, but he will step down at some point next year, and begin serving on the board at GlaxoSmithKline (NYSE:GSK) on January 1. He's expected to succeed Christopher Gent as Glaxo's chairman by September 2015.
    • RBS notes Hampton's departure is in line with his longstanding intention of serving as bank chairman for 5-7 years. Nevertheless, the move comes as RBS shifts focus from being a global investment bank to a U.K. lender - the bank yesterday sold in an IPO 25% of its U.S. retail unit, Citizens Financial Group.
    • Previously: Citizens Financial little-changed in opening trades
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  • Sep. 24, 2014, 10:16 AM
  • Sep. 23, 2014, 8:06 PM
    • RBS had hoped to sell 140M shares of Citizens Financial (NYSE:CFG) for between $23 and $25 each, but chatter over the past few days suggesting investors were balking at that price proved correct.
    • At a price of $21.50, the sale will raise $3B for RBS (prior to the greenshoe), well less than the $3.5B which would have been raised at the top end of the hoped-for range. While a setback, the more important issue will be the boost to RBS's capital ratio from cutting its stake in Citizens below 50% and removing the units assets from its balance sheet.
    • Today's offering was for roughly 25% of Citizens.
    • Previously: Largest bank IPO since Goldman prices today
  • Sep. 23, 2014, 9:41 AM
    • Royal Bank of Scotland's (RBS +0.2%) IPO of Citizens Financial Group could raise as much as $3.5B when it prices after the close today. It would be the largest bank IPO in the U.S. since Goldman came public in 1999.
    • The deal will free RBS of unneeded assets amid the new regulatory regime and allows Citizens to detach itself from its parent. "Citizens has some catching up to do compared to other U.S. regional banks,” says Morningstar's Dan Werner. At the high end of the expected offering range of $23-$25 per share, Citizens would be valued at just 1.07x tangible book vs. 1.91x for other U.S. banks with a market cap greater than $1B. The bank's ROE last year of 5% compares to 10.7% at PNC Financial and 13.4% at Fifth Third.
    • Citizens will trade on the Big Board under the ticker symbol CFG. RBS is selling 140M shares or about 25% of the bank.
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Company Description
Royal Bank of Scotland Group (The) PLC is an international banking and financial services company. The Company through its subsidiaries provides banking products and services to personal, commercial and large corporate and institutional customers.
Sector: Financial