World Economy
0

RBS in $4.9b US Settlement

RBS in $4.9b US SettlementRBS in $4.9b US Settlement

Royal Bank of Scotland has agreed to pay a smaller-than-expected $4.9 billion to resolve a US investigation into its sale of mortgage-backed securities, paving the way for a long-awaited return of cash to UK taxpayers who bankrolled its post-crisis survival, Reuters reported. RBS said that $3.46 billion of the proposed civil settlement would be covered by existing provisions and that the bank would take a $1.44 billion charge in the second quarter to cover the rest. Analysts had estimated the US Department of Justice could impose a fine of up to $12 billion on RBS for misselling mortgage-backed securities in the run-up to the 2007-2008 financial crisis. The agreement will draw a line under RBS’s last outstanding major litigation issue, which had weighed on its share price, blocked dividend distributions to shareholders and complicated the UK government’s plan to sell down its more than 70% stake. Once the world’s largest bank by assets, RBS was one of the biggest casualties of the financial crisis which crippled credit, stock and housing markets, and upended the global economy.

 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com