Royal Bank of Scotland Group (LON:RBS) is moving closer toward a settlement with the US Department of Justice (DoJ) over mis-sold mortgage-backed securities in the run-up to the financial crisis, Sky News has revealed. The report comes after the bailed-out lender disclosed in its full-year results statement last month that it had booked £442 million for the fine, taking its total provision for the issue to £3.2 billion.
RBS’ share price has gained more than one percent in London this morning, having added 1.55 percent to 261.60p as of 09:40 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.36 percent higher at 7,095.24 points. The group’s shares are up by about 5.6 percent over the past year.
RBS ‘within weeks’ of settlement
Sources with knowledge of the matter told Sky News on Friday that a final deal over RBS’ mis-selling of retail mortgage-backed securities prior to the 2008 financial crisis could be reached within a matter of weeks. The newswire, however, cautioned that the ongoing status of the discussions between lawyers for the bailed-out lender and DoJ officials meant that a final settlement figure, and its timing, have yet to be determined.
Insiders further indicated to Sky News that the focus of the DoJ’s work was on civil rather than criminal penalties being imposed on RBS.
Fine to move RBS closer to privatisation
Reaching a settlement with US authorities meanwhile is expected to move the government closer to trimming its stake in RBS, with Chancellor of the Exchequer Phillip Hammond having signalled that any further sale of the British taxpayers’ 71-percent interest in the bailed-out lender is contingent upon the US fine being announced.