ARRAY OF LEGAL CASES
RBS settles lawsuit over mis-selling
London/New York — Royal Bank of Scotland will pay $5.5bn to settle one of two major US investigations into allegations it mis-sold mortgage-backed bonds that it needs to resolve before the British government can sell its shares.
The lender said on Wednesday it had agreed to settle the lawsuit with the US Federal Housing Finance Agency that accuses it of mis-selling $32bn in mortgage-backed securities before the global financial crisis.
Analysts had previously estimated RBS would have to pay $3.5bn-$5bn to settle the case with the Federal Housing Finance Agency.
RBS CE Ross McEwan said the announcement was "an important step forward in resolving one of the most significant legacy matters".
McEwan has been trying to clean up RBS’s balance sheet and end an array of legal cases to allow the government to sell its more than 70% stake in the bank after a £46bn bail-out.
RBS said it would get a reimbursement of about $754m from other parties and the fine was largely covered by existing provisions. The bank said it would record a charge of £151m in August’s result related to the fine.