Trader bonuses hit as RBS looks to pay £350m libor fine

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.

Traders at the bank’s investment arm are understood to have been told by senior staff that the bonus pool will be diminished as cash is diverted to settle allegations 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, including household mortgages.

The UK’s Financial Services Authority and two US regulators have fined Barclays a combined £290m, while Swiss bank UBS has agreed to pay almost £1 billion to regulators in Switzerland, the UK and US.

Traders at RBS are also said to have been told the bank may confiscate earlier bonuses that are due to be paid in the new year. RBS declined to comment.