RBS agrees $4.9bn settlement with US justice department over mortgage mis-selling claims
PUBLISHED: 08:44 10 May 2018 | UPDATED: 08:44 10 May 2018
Royal Bank of Scotland is to pay a $4.9bn (£3.6bn) settlement agreed with US regulators over claims it mis-sold toxic mortgage bonds in the run-up to the financial crisis.
It ends a long-running probe into the taxpayer-backed lender and paves the way for the UK government to relaunch plans to sell its 72% stake in the bank.
RBS said $3.46bn (£2.5bn) of the proposed civil settlement will be covered by existing provisions – while the bank will take a $1.44bn (£1.1bn) hit to its second quarter profits.
The settlement with the Department of Justice (DoJ) still needs to be finalised, with further details to be negotiated.
RBS chief executive Ross McEwan said: “Today’s announcement is a milestone moment for the bank.
“Reaching this settlement in principle will, when finalised, allow us to deal with this significant remaining legacy issue and is the price we have to pay for the global ambitions pursued by this bank before the crisis.”
The latest settlement follows a £5.5bn (£4.1bn) US penalty agreed with the Federal Housing Finance Agency last July.
RBS is one of the last to settle with US regulators, following rival Barclays, which agreed a $2bn (£1.5bn) agreement in March with the DoJ and Deutsche Bank, which struck a $7.2bn (£5.3bn) settlement at the end of 2016.
It has also been a major hurdle to the bank’s return to private hands, with the government having said the US mis-selling claims need to be resolved before it can start to sell its shares in the lender.
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