Royal Bank of Scotland Group (LON:RBS) is nearing a multibillion-pound settlement with US regulators over the mis-selling of toxic mortgage bonds, Sky
Royal Bank of Scotland Group (LON:RBS) is nearing a multibillion-pound settlement with US regulators over the mis-selling of toxic mortgage bonds, Sky News has reported. The deal, which will remove one uncertainty for the bailed-out lender, could potentially come as soon as this week.
RBS’ share price has surged in London in today’s session, having added 1.64 percent to 259.90p as of 10:06 BST, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.11 percent lower at 7,359.41 points. The group’s shares have added more than 74 percent to their value over the past year, and are up by some 15 percent in the year-to-date.
Sky News reported last night that RBS could reach a deal with the Federal Housing Finance Agency (FHFA) as soon as this week. Sources told the newswire that while a settlement was imminent, it could yet slip into next week with lawyers on both sides finalising the agreement.
The settlement, which is expected to cost the bailed-out lender at least $4.5 billion, relates to the mis-selling of mortgages to the US government-backed loan firms Fannie Mae and Freddie Mac in the run-up to the financial crisis. RBS also has yet to agree another settlement with the US Department of Justice over mis-sold residential mortgage-backed securities.
The 21 analysts offering 12-month price targets for RBS for the Financial Times have a median target of 260.00p on the shares, with a high estimate of 346.00p and a low estimate of 190.00p. As of June 30, the consensus forecast amongst 25 polled investment analysts covering the blue-chip lender advises investors to hold their position in the company.