A settlement between UK bank Royal Bank of Scotland (RBS) and authorities regarding the investigation into attempted LIBOR-fixing may be announced in the next few months.

The interest-rate rigging scandal that led to numerous resignations on fellow lender Barclays's board - including Chief Executive Officer (CEO) Bob Diamond - may prompt politicians to pressure RBS's CEO, Stephen Hester, into leaving, The Wall Street Journal reported on Tuesday.

Due to the government's 83% stake in RBS, UK authorities have been put in a awkward position: they need to get tough on banks that do not follow rules, but also should consider the value of their shareholding.

The paper cites analyst Shailesh Raikundlia from Espirito Santo as saying: "If Hester were to leave, we think it would definitely affect the share price, and the government is probably very aware of that."

Hester, who joined the bank as CEO in 2008 when the bank was bailed out by the government, is seen as responsible for turning the group around, trimming its toxic balance sheet and cutting losses.

Speaking to The Guardian on Sunday, he said: "RBS is one of the banks tied up in Libor. We'll have our day in that particular spotlight as well."

RBS's first-half results are expected on Friday.

Shares were trading 3.92% lower at 213.5p on Tuesday afternoon in London.

BC

Related share prices
Barclays (BARC) share price
Royal Bank of Scotland Group (RBS) share price