Royal Bank of Scotland agrees to $4.9bn settlement to resolve US subprime probe
Boston/Washington — Royal Bank of Scotland Group has agreed to pay $4.9bn to resolve a US department of justice probe into its structuring and sale of mortgage-backed securities ahead of the 2008 financial crisis, the bank said on Wednesday. The British state-backed bank said that $3.46bn of the proposed civil settlement would be covered by existing provisions and the bank will take a $1.44bn incremental charge in 2018’s second quarter to cover the rest. The accord would resolve a major issue that has weighed on the company’s share price and complicated the UK government’s plan to sell down its more than 70% stake in the bank. RBS CEO Ross McEwan called the deal a "milestone". "Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer," he said in a statement. The US attorney’s office in Massachusetts, which led the investigation, confirmed it had reached an agreement in principle with RBS that would resolve potential civ...
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