RBS agrees $4.9bn to settle United States subprime case

RBS agrees $4.9bn to settle United States subprime case

Royal Bank of Scotland has agreed a £3.6billion penalty to end an investigation into its actions in the run up to the 2008 financial crisis. But Mr McEwan called the settlement a "milestone moment" for the bank.

The settlement could pave the way for the British government to begin selling its stake in RBS again, which now amounts to 71 per cent of the business. Late on Wednesday it reached a $4.9 billion settlement in principle with US prosecutors over crisis-era mortgage bond sales, one of the last banks to do so.

"The number is a firm number", Stevenson said.

RBS said 3.46 billion U.S. dollars (£2.5 billion) of the proposed civil settlement will be covered by existing provisions and the bank will take a 1.44 billion USA dollar (£1.1 billion) hit in its second quarter results.

The latest settlement follows a 5.5 billion U.S. dollars (£4.1 billion) United States penalty agreed with the Federal Housing Finance Agency last July.

That suit ended on March 29, when Barclays reached an agreement with the Trump Justice Department to pay the same $2 billion it had offered the prior administration. Incidentally, the settlement is deemed to pave the way ahead for the long-awaited return of cash to United Kingdom tax payers - the ones who bankrolled its survival post the 2008 financial crisis.

It narrowly avoided insolvency in 2008 after the government agreed a 45 billion pound ($61 billion) bailout, just six months after it had raised 12 billion pounds of cash from shareholders.

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The fine had been a big obstacle to the government's plan, laid out in November, to begin reprivatising RBS before the end of the 2018-19 fiscal year - a much-needed boost for finance minister Philip Hammond's coffers.

And the bank recently revealed that this year's first-quarter net profits more than tripled on lower restructuring costs and rising income. He described a new policy in which US prosecutors will work closely with their counterparts in other enforcement agencies to coordinate penalties, with the Justice Department adjusting its assessments to account for other fines.

With (Other OTC: WWTH - news) the penalty paid, RBS can now open talks with United Kingdom regulators about the resumption of dividend payments.

"This is hardly a Silicon Valley company".

"We need to consider the impact on innocent employees, customers and investors who seek to resolve problems and move on", he said.

The final agreement may take several weeks to negotiate, RBS said.

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