RBS agrees £3.6bn settlement over US mortgage-backed securities

Under the terms of the proposed settlement, RBS has agreed to pay $4.9bn (£3.6bn), with $3.46bn already covered by existing provisions with a further charge of $1.44bn in Q2 2018.

In a statement, RBS said the proposed settlement is subject to the DOJ and RBS entering into a legally-binding agreement, "and there can be no assurance that the parties will agree on the final terms of any proposed settlement".

Separately, as at 31 March 2018, RBS held provisions of $0.8 billion for other legacy RMBS matters.

RBS CEO, Ross McEwan, said: “Today’s announcement is a milestone moment for the bank. Reaching this settlement in principle with the US Department of Justice will, when finalised, allow us to deal with this significant remaining legacy issue and is the price we have to pay for the global ambitions pursued by this bank before the crisis. Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer.”

Justin Cooper, CEO of Link Market Services, commented: “RBS’s settlement with US regulators, coupled with sharply improving profitability paves the way for the long-awaited restoration of its dividend. The bank has paid nothing for ten years. At first the dividend is likely to be a fraction of the £770m paid in 2007, but it will be a hugely significant milestone on the road to the bank’s eventual return to the private sector.”