RBS

Britain's new financial watchdog will investigate RBS over its 2012 computer failure that left millions of customers unable to access their accounts.

The Financial Conduct Authority has launched an enforcement proceeding into the IT failures which occurred in June and July of last year, the FCA said in a statement published Tuesday on its website.

"The FCA will reach its conclusions in due course and will decide whether or not enforcement action should follow that investigation," the statement said. RBS had around 17m customers at the time of the system failure but has never confirmed how many were affected by the fault. It set aside £125m in August of last year to compensate affected customers.

Bank of England Governor Mervyn King told UK lawmakers last year that the FCA's precursor - the Financial Services Authority - should investigate the failure and said the BoE was in constant contact with the state-owned lender during the days-long glitch.

"One of the big lessons from this is how important the basic functions of banking are," said King during testimony to UK lawmakers on 26 June. "Once the current difficulties are over, we will need the FSA to go in and carry out a very detailed investigation and find out, first of all, what went wrong and then perhaps even more importantly, why it took so long to recover."

RBS CEO Stephen Hester admitted the bank had "let down" customers because of the system-wide failure and apologized to customers and shareholders in a statement published on the bank's website.

"I am very sorry for the difficulties people are experiencing. Our customers rely on us day in and day out to get things right, and on this occasion we have let them down. Right now my top priority, and the priority of the entire RBS Group, is to fix these problems and put things right for our customers."

The failure of one of our IT systems in June had unacceptable consequences for many of our customers in the UK and the Republic of Ireland," said chairman Philip Hampton in a letter to shareholders included in its annual results. "The Board Risk Committee has led a rigorous review of what went wrong. The Committee has sought to ensure that customers who were affected are appropriately compensated. It will continue to oversee the management of technology risks and lead our communication with customers, regulators and others when the investigations conclude. The response of our staff in branches, call centres and elsewhere in dealing with the problems we had caused to our customers was outstanding."

RBS was rescued with around £45.4bn in public funds in 2008, the largest bank bailout in history.

Shares in the group were trading at 274.3 pence each in London Tuesday, a 3 percent gain from the 8 April close. The shares have fallen around 15.5 percent over the past year.

Bank of England London