Royal Bank of Scotland said on Thursday it will set aside more money to compensate small firms mis-sold interest rate hedging products when it publishes its full-year results in February.
Britain's financial regulator said on Thursday the products had been widely mis-sold to business and said a significant proportion of complaints will require compensation from banks.
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Part-nationalized RBS had previously set a provision of 50 million pounds ($79 million) to deal with claims.
"RBS, will, in its 2012 annual results, meaningfully increase its provision to meet the additional costs of redress...This larger provision will be determined once we have further engaged with the FSA on its position," the bank said in a statement.
(Reporting by Matt Scuffham; Editing by Steve Slater)