New York — Royal Bank of Scotland (RBS) agreed to pay $500m to settle New York’s probe into its marketing of toxic mortgage-backed securities that triggered the financial crisis, moving the government-owned lender a step closer to resolving a series of costly US investigations. The deal boosts the bank’s US settlement costs to $6bn in less than a year for bundling dubious mortgages into top-rated securities and pitching them to investors in 2006 to 2008, before the housing bubble burst. In July, the lender agreed to pay $5.5bn to the Federal Housing Finance Agency to resolve a parallel investigation. A separate probe by the justice department is still pending. RBS was down 0.6% to 258.6 pence at 9.09am in London trading. Edinburgh-based RBS will pay New York $100m in cash and $400m for residents who were hurt by the housing crash, New York attorney-general Eric Schneiderman said on Tuesday in a statement. The deal boost’s New York’s mortgage-bond recoveries from a half dozen banks t...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.