New York hits RBS with $500m mortgage securities penalty
6 March 2018, 20:56
Royal Bank of Scotland (RBS) has agreed a $500m (£360m) settlement with New York state over historical mis-selling claims.
The announcement, by New York Attorney General Eric Schneiderman, was made ahead of what is expected to be a much larger deal with the US Department of Justice (DoJ).
Sources told Sky News last Friday that the state-backed lender was "within weeks" of agreeing a multi-billion dollar sum with federal officials, in a settlement that would pave the way for the sale of the taxpayers' majority stake to resume.
The penalties relate to the sale of retail mortgage-backed securities (RMBS) ahead of the 2008 financial crisis.
Mr Schneiderman said RBS admitted to having sold investors RMBS that did not meet underwriting guidelines, contrary to its representations, and did not comply with applicable laws and regulations.
He said the settlement involved a $100m cash payment to the state, plus $400m for consumer relief for homeowners and communities.
The bank is desperate to put legacy conduct issues behind it though delays helped RBS report its first annual profit for a decade last month.
The bank warned then that 2018's financial performance, and its ability to resume dividend payments for the first time since its £45.5bn bailout, would be affected by the unresolved DoJ case.
It has set aside roughly $3.5bn to cover the expected fine.
The bank was yet to comment on the New York settlement.
(c) Sky News 2018: New York hits RBS with $500m mortgage securities penalty