By Jonathan Davies

The Royal Bank of Scotland (RBS) has set aside £400m to cover the costs of an investigation into alleged manipulation of currency markets.

It comes a day after Barclays revealed it had set aside £500m for the same reason.

The bank is one of several banks being investigated over alleged rigging of currency markets, something which Financial Conduct Authority (FCA) chief Martin Wheatley said is 'every bit as bad as rigging the Libor rate'.

RBS made the announcement as it revealed its third quarter profits, which were up £260m to £1.27bn from the previous quarter. And it was far better than the same period last year when the bank reported a £634m loss.

But the £400m set aside for the costs of the investigation sent RBS' investment banking division into a £557m loss.

RBS chief executive Ross McEwan said the bank was closer to being clearer, simpler and fairer, but added that "we know we still have a long list of conduct and litigation issues to deal with and much, much more to do to restore our customers' trust in us".

we know we still have a long list of conduct and litigation issues to deal with and much, much more to do to restore our customers' trust in us."