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The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) has announced that it expects financial penalties to settle the regulators’ probes into the rate-rigging scandal. The U.S. and UK authorities are probing into allegations that RBS, along with over a dozen banks, manipulated the London interbank offered rate, which is the benchmark rate for over $300 trillion of securities.

The Edinburgh-based bank said on Friday that it would enter into negotiations with authorities regarding the potential settlement of the Libor issue. The company’s chief executive didn’t clarify when those talks would begin or how large would be the potential fine. In June, Barclays PLC (LON:BARC) (NYSE:BCS) had to pay $450 million in penalties for Libor manipulation.

Libor has been a big obstacle in the company’s restructuring plans after receiving the biggest bailout in the history of banking in 2008. The British government poured in 45.5 billion-pound to rescue RBS during the global financial crisis. As a result, the government owns an 81 percent stake in the bank.

During the third quarter, the bank posted a net loss of £1.38 billion, or $2.3 billion after putting aside a further £400 million to compensate clients who were inappropriately sold insurance. The bank also took a charge on its own debts. So far, the bank has earmarked £1.7 billion to compensate customers. RBS had earned a net profit of £1.2 billion in the same period last year.

Excluding the adjustments, The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) earned just over £1 billion in pretax profits for the September 30 ending quarter, compared to a meager £2 million in Q3 last year. According to analysts, British banks, including HSBC Holdings Plc (HKG:0005) (NYSE:HSBC) (LON:HSBA) and Barclays PLC (LON:BARC) (NYSE:BCS), have set aside more than £10 billion to compensate customers.

Despite the Eurozone crisis, The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) said the pretax profits from its investment banking jumped to £295 million in the third quarter from the net loss of £348 million in a year ago quarter. The bank is rapidly scaling back its risky trading activities by selling the cash equities unit and spinning off the advisory business.

However, the retail banking business continues to suffer from the weak consumer confidence present in European countries. During the third quarter, pretax profits in retail unit declined 7 percent to £1.1 billion.

Shares of The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS)  are down 1.8 percent to 282 pence in London trading.