The Royal Bank of Scotland Group  

RBS pays out $1.1bn in mortgage-backed securities deal

RBS pays out $1.1bn in mortgage-backed securities deal

Royal Bank of Scotland has agreed to pay $1.1bn (£846m) to settle two lawsuits relating to the sale of mortgage-backed securities.

It had been alleged that RBS mis-sold these securities before the 2008 financial crisis but as part of the deal with the US National Credit Union Administration Board it will not admit any fault.

The bank, which is majority owned by the British government, still has suits by the US Department of Justice and the Federal Housing Finance Agency outstanding.

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RBS said the settlement would have “no material impact” on its capital ratio.

In a statement it said: “Residential mortgage-backed securities litigation and investigations may require additional provisions in future periods that in aggregate could be materially in excess of the provisions existing as of 30 June 2016.”

In August RBS scrapped its plans to launch Williams & Glyn as a standalone bank after reporting a £2bn loss for the first six months of the year.

Rick Metsger, chairman of the NCUA, said: “NCUA is pleased with today’s settlement and fully intends to stay the course in fulfilling its statutory responsibilities to protect the credit union system and to pursue recoveries against financial firms that we maintain contributed to the corporate crisis.”