R.B.S. to pay $1.1 billion to settle U.S. lawsuits

Sep 28, 2016, 7:04 AM EDT
Royal Bank of Scotland
(Source: Money Bright/flickr)

Royal Bank of Scotland will pay $1.1 billion as settlement amount to resolve two lawsuits over mis-selling toxic mortgage securities to two credit unions, which failed after the U.S. housing bubble burst in 2008. Under the settlement with the National Credit Union Administration Board (N.C.U.A.), R.B.S. has not admitted fault in the cases. The announcement was followed by a 0.4 percent rise in R.B.S. shares on Wednesday.

The bank, which still faces almost 20 claims over its sale of mortgage-backed securities in the U.S., said in January that it has set aside about $5 billion to resolve civil lawsuits however analysts believe that the total claims will be much larger, reports Reuters.

R.B.S. also has outstanding civil and criminal cases against it from the U.S. Department of Justice (Do.J.) and the Federal Housing Finance Agency.

N.C.U.A. chairman Rick Metsger said that the regulatory body will continue its efforts to make recoveries from the financial firms, including Credit Suisse and U.B.S., which allegedly contributed to the corporate crisis, writes the BBC. In 2015, R.B.S. agreed to pay $129.6 million to settle a similar lawsuit in New York.