RBS share price: Group suffers legal setback in US

Royal Bank of Scotland Group (LON:RBS) has suffered a legal setback in the US, having lost a bid together with peer Nomura to overturn an order requiring them to pay $839 million in relation to mortgage-backed securities. The news comes as the FTSE 100 lender continues to deal with the consequences of its turbulent past.

RBS’ share price has been little changed in London this morning and as of 08:46 BST stood at 266.40p, flat in percentage terms. The group’s shares are underperforming the broader market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.42 percent higher at 7,353.83 points.

Reuters reported last night that RBS and Nomura had lost a US court appeal to overturn an order requiring them to pay $839 million for making false statements while selling mortgage-backed securities to Fannie Mae and Freddie Mac. The two lenders had challenged the 2015 award on multiple grounds, including that the loss of the securities’ value was largely caused not by any false statements, but by the broader financial crisis in 2008.

The award is related to a 2011 lawsuit brought against RBS and Nomura by the Federal Housing Finance Agency in 2011. The FHFA has acted as conservator of mortgage agencies Fannie Mae and Freddie Mac since their 2008 takeover by the federal government after the collapse of the US housing market.

The news marks a challenge for RBS which continues to deal with the consequences of its turbulent past, marked by a £45.5-billion taxpayer-funded bailout. The company, however, recently managed to avoid the forced sale of its Williams & Glyn branches, a condition of its rescue, with the European Commission approving an alternative plan. 

As of 09:13 BST, Friday, 29 September, Royal Bank of Scotland Group share price is 267.80p.