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RBS settles US mortgage mis-selling claim for $1.1bn

  • 28/09/2016
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RBS settles US mortgage mis-selling claim for $1.1bn
The Royal Bank of Scotland has agreed a $1.1bn (£846m) settlement in the US relating to accusations it mis-sold residential mortgage-backed securities (RMBS) in the lead up to the financial crisis.

In a statement RBS said it had come to the agreement to resolve two outstanding civil lawsuits with the National Credit Union Administration Board, the US agency in charge of regulation of federal credit unions, which are part owned by its members.

Just last week, Deutsche Bank was slapped with a $14bn fine for mis-selling of mortgage-backed securities by the US Department of Justice. UK bank share prices were hit shortly after as the negative impact of the announcement reverberated throughout the sector.

RBS said the settlement was “substantially covered by existing provisions” and would have no material impact on its capital adequacy.

However, the bank is continuing to litigate a number of other RMBS-related claims in the US.

It said: “As previously stated, RMBS litigation and investigations may require additional provisions in future periods that in aggregate could be materially in excess of the provisions existing as of 30 June 2016.”

RBS will publish its Q3 results on 28 October.

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