RBS Agrees $4.9bn US Fine In ‘Milestone Moment’
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The $4.9bn civil settlement with the DoJ – which is lower than analysts predicted and includes $3.46bn that has already been covered – will mean the government is able sell more shares in the bank, the FT reports.
The preliminary deal follows the DoJ’s investigation into the issuance and underwriting of US residential mortgage-backed securities by the bank between 2005 and 2007, and follows a separate fine of $5.5bn agreed in July 2017 with the Federal Housing Finance Agency.
UK Chancellor Philip Hammond laid out plans last year to sell a stake of up to £3bn in RBS – which is 71% owned by the government having been bailed out by the UK taxpayer after the 2008 financial crisis – by March 2019 but was reluctant to do so until the fine had been agreed.
“Today’s announcement is a milestone moment for the bank,” said RBS chief executive Ross McEwan. “Reaching this settlement in principle with the US Department of Justice will, when finalised, allow us to deal with this significant remaining legacy issue and is the price we have to pay for the global ambitions pursued by this bank before the crisis.”
“Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer,” he added.
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Author: Beth Brearley
Source: Investment Week
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