RBS closes in on £3.6bn settlement over US mortgage bond mis-selling

Oliver Gill
Follow Oliver
RBS is negotiating with two separate US authorities over mis-selling of securities (Source: Getty)

Royal Bank of Scotland (RBS) is close to agreeing a multi-billion pound fine with US authorities over the mis-selling of mortgage bonds, according to reports.

Discussions are understood to be at an advanced stage between the state-backed lender and the US Federal Housing Finance Agency (FHFA), according to reports by Sky News.

A settlement is likely to leave RBS facing a bill of more than $4.5bn (£3.6bn).

Read more: RBS in yet more hot water over fresh Libor case appeal

Such an agreement would draw a line under one of RBS' largest legal challenges and potentially pave the way for the government selling down its stake. A deal is believed to be only a matter of weeks away, Whitehall sources told Sky News.

The fines relate to the mis-selling of the bonds to US state-owned mortgage firms Fannie Mae and Freddie Mac prior to the 2008 financial crisis.

Read more: RBS shares rise as it returns to profit for the first time in 18 months

However, the settlement is separate from further penalties facing RBS in relation to the sale of residential mortgage-backed securities in the US.

It was in discussions with the US Department of Justice, a process that has been held up US President Donald Trump changing a number of senior officials involved. Such fines are expected to billions of pounds more.

RBS declined to comment.

Related articles