RBS Sets Aside $3.92b for US Fines

Royal Bank of Scotland has taken a £3.1 billion ($3.92 billion) provision as it prepares to settle claims in the US that it mis-sold toxic mortgage-backed securities in the run up to the 2008 financial crisis, Reuters reported. The provision means that state-backed RBS is unlikely to make a profit in 2016, the ninth straight year the bank has failed to make an annual profit. RBS is preparing to start negotiations with the US Department of Justice over a settlement of the mis-selling claims, the timing of which is still uncertain. “This bank, and of course the British taxpayers, have paid a very heavy price for the decisions that were made at RBS before the crisis,” said RBS Chief Executive Ross McEwan. “Today’s announcement is yet another painful example of that legacy,” he said. This is the first time that RBS has set aside any money to directly cover a settlement with the US Department of Justice over the alleged decades-old mis-selling of mortgage-backed securities.