RBS share price: Bank given week to settle investor dispute

Lender struggles to reach deal with disgruntled shareholders

RBS share price: Bank given week to settle investor dispute

A judge has given Royal Bank of Scotland Group (LON:RBS) a week to avoid a trial by reaching a settlement with investors suing the lender over its disastrous rights issue during the financial crisis. The move came after the case was adjourned twice this week.

RBS’ share price has jumped in today’s session, having added 2.03 percent to 270.27p as of 13:04 BST, outperforming the benchmark FTSE 100 index which has climbed marginally higher and is currently 0.32 percent better off at 7.509.12 points. The group’s shares have added more than 10 percent to their value over the past year, and are up by a little over a fifth in the year-to-date.

Reuters reported today that Judge Robert Hildyard had adjourned the RBS case for a third time this week, this time until June 7. He, however, warned that this would be the final chance for the bailed-out lender to reach an out-of-court settlement, and noted that the two sides must inform him whether a deal has been reached by June 1.

“We must have certainty one way or another [...] and that must be made clear,” Judge Hildyard told London’s High Court, as quoted by the newswire.

RBS is being sued by shareholders who claim that they were misled about the financial health of the lender in the group’s rights issue in 2008, just a few months before the company had to be rescued by the British taxpayer. The bulk of claimants agreed to a 41.2p-per-share settlement in December, while more investors settled at 43.2p last month. RBS is said to have almost doubled its out-of-court offer to the remaining claimants over the weekend to 82p per share.

Sources, however, told Reuters late yesterday that a number of shareholders in the 9,000-strong group suing RBS remained determined to reject its offer and take the case to trial.

As of 13:21 BST, Wednesday, 24 May, Royal Bank of Scotland Group share price is 269.80p.

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