Shares in Royal Bank of Scotland Group (LON:RBS) have gained ground in London this morning amid reports that the lender is in advanced talks with US a
Shares in Royal Bank of Scotland Group (LON:RBS) have gained ground in London this morning amid reports that the lender is in advanced talks with US authorities over a multibillion dollar settlement over mis-sold mortgage bonds in the run-up to the financial crisis. The potential deal would help remove one legacy issue for the group, which continues to struggle to return to profitability following its taxpayer-funded bailout.
As of 08:37 BST, RBS’ share price had added 2.76 percent to 257.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.29 percent higher at 7,533.41 points. The group’s shares have added more than 18 percent to their value over the past year, and are up by some 14 percent in the year-to-date.
Sky News reported last night that RBS lawyers were in advanced talks with the Federal Housing Finance Agency (FHFA) in the US about a settlement over the mis-selling of mortgages to government-backed loan firms Fannie Mae and Freddie Mac prior to the 2008 financial crisis. The potential deal is almost certain to cost the state-backed bank more than $4.5 billion (£3.5 billion).
A source in Whitehall told the newswire that the discussions had progressed sufficiently far to leave both sides hopeful that an announcement can be made in the next few weeks. The precise size and timing of the settlement are reportedly still moving around and are subject to further negotiations. One inside further indicated to Sky News that there were concerns in Whitehall that the fine could significantly exceed $4.5 billion.
RBS meanwhile also has to agree another settlement with the US Department of Justice over mis-sold residential mortgage-backed securities, with the process reportedly delayed by a clearout of senior officials at the Department under President Donald Trump’s new administration.