Royal Bank of Scotland will pay $5.5 billion to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed bonds that it needs to resolve before the British government can sell its shares. David Pollard reports.
For a bank trying to reform its image, this is a big step. At a big price. The five and half billion dollar settlement is almost as much as Bank of America paid over a similar lawsuit, and tops four billion from JPMorgan Chase. It's also more than the three and half to five billion dollar range analysts had expected. But RBS chief exec Ross McEwan welcomed it for moving the bank towards resolving one of its 'most significant legacy matters' .... This settlement for one of two major US investigations into allegations it missold mortgage-backed securities before the financial crisis. The UK government has said it won't resume selling its stake until the bank settles its US fines. It owns more than 70 per cent of RBS after a 46 billion pound state bailout. At current valuations, it's estimated taxpayers face a near 30 billion pound loss on the value of their shares.