RBS: Multi-Billion Pound Fine for Mis-Selling Imminent

Royal Bank of Scotland (RBS) is set to to announce in the next few days that it is on the receiving end of another multi-billion pound charge for mis-selling mortgage-backed securities, according to Sky News.

The precise size of the provision to be included in the bank’s 2016 full-year results was unclear, but is expected to be between $3 billion (£2.4 billion) and $4 billion (£3.2 billion).

RBS is already in the process of preparing for a DoJ settlement by putting aside billions of dollars for a fine for an eventual settlement which could even be as high as $12 billion (£9.5 billion).

Last month, Barclays was sued by the DoJ for refusing to settle a multi-million dollar claim, while Deutsche Bank agreed to pay to resolve the case.

In terms of fines, the mis-selling of residential mortgage-backed securities has been the biggest scandal to emerge from the pre-crisis era, with investors duped into buying toxic mortgages that were packaged up by banks and sold as ultra-safe.

Based on its share of selling these securities, analysts believe that RBS can expect to pay a fine at least as large as Deutsche Bank’s.

Until now, it has been unclear when RBS would be able to announce a formal settlement with the DoJ, but current speculation suggests that a deal may be imminent.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *