RBS fined £29m for sharing confidential price information

| March 30, 2010 | 0 Comments

The Royal Bank of Scotland (RBS), which is 84% state-owned, has been fined £28.6 million by the Office of Fair Trading (OFT) after admitting breaches of competition law.

RBS confessed to passing on loan pricing information to its rival Barclays and the OFT began its investigation after receiving a tip-off from Barclays.

According to the OFT, RBS broke the rules between October 2007 and February or March 2008.

The information concerned the pricing of loans to large professional services firms, such as solicitors, accountancy, and property companies.

However, the OFT said the fine would have been £33.6 million but RBS agreed to co-operate, thereby reducing the penalty.

Meanwhile, if Barclays continue to co-operate, the OFT said it “is not expected to pay a fine in this case”.

Ali Nikpay, OFT Senior Director of Cartels and Criminal Enforcement, said: “Any company that discloses confidential future pricing information to its competitors risks a substantial penalty.

“It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation,” he said.

In related news, yesterday RBS announced it is to dispose of its factoring unit in Germany to GE Capital, the financial services division of General Electric.

The sale is part of the bank’s five-year strategic plan, announced a year ago. The deal, which is subject to regulatory approval, is expected to be finalised by the third quarter of 2010.

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