RBS Will Pay $1.1 Billion in Settlement Over Mortgage Securities
- by Dan Gutierrez
- in Markets
- — Sep 29, 2016
The Royal Bank of Scotland (RBS) agreed to pay $1.1bn (£846) to settle two legal claims that it allegedly miss-sold mortgage securities in the run-up to the 2008 financial crisis.
RBS said the "settlement amount is substantially covered by existing provisions", although the bank noted it may need to set aside additional funds awaiting the outcome of other similar claims faced by the bank.
The Edinburgh lender, which has been in restructuring mode since a $45.5 billion ($59.2 billion) state bailout during the credit crisis, said it reached a final settlement with the National Credit Union Administration Board to resolve two civil lawsuits.
With the RBS settlement, the U.S. regulator takes its recoveries from various banks to $4.3bn in lawsuits pertaining to sale of mortgage-backed securities before the 2008 financial crisis, Reuters reported.
NCUA chairman Rick Metsger said that the agency was pleased with the RBS settlement and intends to continue going forward with recoveries against financial firms that hit the credit union system.
Suspicious package found at CMPD headquarters taken to remote location
The bomb squad was brought in to investigate "out of an abundance of caution", police spokeswoman Jessica Wallin said. Charlotte-Mecklenburg police have removed a suspicious package from its headquarters that led to an evacuation.
According to Bloomberg, RBS' chief executive Ross McEwan said at a conference organised by Bank of America Merrill Lynch in London that the bank may fail to sell the division to a rival lender by the end of this year.
But the bank still faces nearly 20 claims over its sale of mortgage-backed securities in the US, the largest of which are those brought by the Federal Housing Finance Agency and the US Department of Justice (DoJ).
RBS was also in the spotlight on Tuesday as investors anxious that it too would be hit by a fine similar to the one dished out by the US Department of Justice to Deutsche Bank.
The bank also faces a multi-billion dollar lawsuit by the U.S. Federal Housing Finance Agency, which has acted as the conservator for mortgage giants Fannie Mae and Freddie Mac since their government takeover in 2008. It added that it would pursue other similar lawsuits pending against Swiss banks, Credit Suisse and UBS.
