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Home / Business / RBS reaches $ 4.9 billion deal to settle mortgage bond sample

RBS reaches $ 4.9 billion deal to settle mortgage bond sample



(Reuters) – The Royal Bank of Scotland said it had reached an agreement in principle with the U.S.

FILE PHOTO: The logo of the Royal Bank of Scotland (RBS) is located at an office building in Zurich March 27, 2015. REUTERS / Arnd Wiegmann / File Photo

The bank said in a statement that $ 3.46 billion of the proposed penalty will be covered by existing provisions, with the rest to come from an incremental charge of $ 1

.44 billion in 2018's second quarter.

Both the bank and the U.S. Attorney's office in Massachusetts, which first announced the deal, said more negotiations were needed before a formal agreement could be reached.

The implosion of risky residential mortgage-backed securities and related derivatives contributed to the 2008 global financial crisis and the recession that followed.

RBS said on March 31, 2018 Common Equity Tier 1 ratio is a reduction of about 50 basis points and a reduction of 9p on March 31 2018 fully diluted TNAV per share.

"TNAV is 274p," the RBS statement said.

"Adjusting for the combined impact of both the RMBS settlement and the pension deficit contribution of £ 2 trillion" on 17 April, the Q1 2018 pro forma CET1 is 15.1 percent and fully diluted.

RBS Chief Executive Ross McEwan said in a statement that the agreement will be finalized, it would allow RBS to "settle for the future" Crisis. "

A conference call for investors and analysts is scheduled for 8:00 am (0700 GMT) in London on Thursday, the statement said.

RBS reached a $ 500 million settlement with the New York state in March.

Last December, it is therefore agreed to pay that to one of the United States. mortgage-backed securities in the run-up to the 2008 financial crisis.

The investigation had been led by the U.S. Attorney's Office in Massachusetts, which had been a criminal trial into the company and former employees.

But the RBS and the Office reported on Thursday that civil in nature, signaling no criminal charges were likely to result from the trial.

The Justice Department had previously settled with banks including Citigroup, Deutsche Bank, JPMorgan, Credit Suisse, Morgan Stanley, Goldman Sachs, Bank of America and Barclays.

Reporting by Nate Raymond and Eric Walsh; Editing by Sandra Painter and Grant McCool


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