Royal Bank of Scotland has reached a settlement with three out of five shareholder groups involved in claims relating to a rights issue the bank carried out during the financial crisis.
RBS said today that it has concluded a "full and final" settlement with three of the groups, representing around 77 per cent of the claims by value in what it termed the 2008 Shareholder Rights Issues litigation.
The case was brought by investors who claim the lender misled them into taking part in a 2008 rights issue to prop up the bank to the tune of £12bn. The bank almost collapsed and received a £45.5bn taxpayer bailout just months later.
In total, RBS said it is "willing to make available settlement sums of up to £800m assuming settlement of all claims, to be split among all five shareholder groups, subject to agreement and claim validation".
RBS, which last week failed on all measures of the Bank of England's stress test, will now seek to agree finalised terms with members of the remaining two groups whose claims are presently continuing. Any claims for which settlement is not achieved will, however, continue to be vigorously defended. The trial for those claims is due to commence in March 2017.
Shares in the bank were up by three per cent by mid-morning.
"We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016," said RBS boss Ross McEwan.
"We are pleased to have reached this agreement and hope that it will be accepted by the remaining claimant groups so that this long course of complex and costly litigation can now be concluded."
Clive Zietman, partner and head of commercial litigation at Stewarts Law, which represented shareholders acting against RBS, said: "The case brought by our clients against RBS arising from the April 2008 rights issue has settled. RBS will pay up to £800m to the various shareholder groups.
"The litigation, in which we act for more than 300 institutional investors, was due to go to a six month trial starting in March 2017. We are unable to comment further at this stage."
RBS is also facing a potential mega-fine from the US Department of Justice for mis-selling mortgage-backed securities, with some estimates pegging the size of the penalty as high as $12bn (£9.4bn).