RSA Insurance Group’s Irish unit is likely to be fined following its accounting scandal last year.
Group chief executive Stephen Hester said: "There will be some sort of Irish regulatory action in the summer. I don't expect the fine will be a headline-making one."
Mr Hester joined the insurer in February after an accounting scandal, three profit warnings and a £200 million capital injection in Ireland cost then chief executive Simon Lee his job.
Mr Hester has since overseen a £775 million rights issue and scrapped the company’s dividend to clean up the balance sheet.
While the Irish division had “significant” losses in the year’s first half, the chief executive said the unit will remain part of the group as it seeks to divest other assets.
Ireland is seen as one of RSA’s core markets, he said.
The insurer expects to report further "clean-up" charges in 2014 from the Irish scandal that Hester had previously referred to as an "ugly banana skin". He hired Ken Norgrove from Zurich Insurance Group to head the Irish unit.
“The tidy up of Ireland has gone into the first half,” said Mr Hester. “There is nothing wrong with Ireland in the longer term and I see no reason why Ireland can’t in two or three years time be making its cost of capital.”
‘Fall guy’
Mr Norgrove replaced
Philip Smith
, who resigned in November saying he was made a “fall guy” amid an investigation into the firm’s accounting practices. The unit’s chief financial officer Rory O’Connor and claims director
Peter Burke
were later fired after a probe found that some executives had made reports that were “inaccurate and potentially misleading”.
Mr Hester, previously chief executive of Royal Bank of Scotland Group, said both the regulators and the police have access to company files but declined to comment further. – (Financial Times/Bloomberg)
