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RBS to pay $5.5 bln to resolve major US mortgage probe

  • RBS agreed to settle the lawsuit that accuses it of mis-selling $32 billion of mortgage-backed securities before the global financial crisis
ATM cash machines outside a branch of the Royal Bank of Scotland in Edinburgh.
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ATM cash machines outside a branch of the Royal Bank of Scotland in Edinburgh.

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 government can sell its shares in the bailed-out bank.

The Edinburgh-based bank lender on Wednesday said it agreed to settle the lawsuit with the U.S. Federal Housing Finance Agency (FHFA) that accuses it of mis-selling $32 billion of mortgage-backed securities before the global financial crisis.

Analysts had previously estimated RBS would have to pay between $3.5 to $5 billion to settle the case with the FHFA.

Shares in RBS are trading 2 percent higher on the back of this news.

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