The Royal Bank of Scotland has apparently reached a tentative deal of USD 4.9 billion to resolve the United States probe into the sale and structuring of its mortgage backed securities. Incidentally, the settlement is deemed to pave the way ahead for the long-awaited return of cash to UK tax payers – the ones who bankrolled its survival post the 2008 financial crisis.
According to authentic sources, the bank has confirmed that USD 3.46 billion of the proposed amount would be negotiated through existing provisions as of now. Additionally, USD 1.44 billion would be taken as an incremental charge in the second quarter of the year to settle the rest. However, as per analysts’ opinion, the United States Department of Justice might impose a lawsuit of USD 12 billion on RBS for mis-selling the mortgage backed securities.
The accord is also expected to mitigate a major litigation issue of RBS that has reportedly complicated the UK government’s long-term plan to sell down its over 70 percent share in the bank. As per reliable sources, the regional government had confirmed that the process of reprivatizing the bailed-out lender is soon to commence via the sale of 3 billion pounds of shares before the culmination of the 2018-2019 fiscal year. Big shots of the bank seem to be highly positive about the deal, claiming it to be a ‘milestone’.
As per the official confirmation from the U.S. Attorney Office in Massachusetts, the agreement would also resolve potential civil claims with regards to mortgage backed securities that were issued within the span of 2005-2008. For the record, the Office had been also conducting criminal investigation into former employees of RBS who were closely involved in selling and structuring securities. However, the agreement that was disclosed by the U.S. government and RBS conjointly this Thursday, is reported to be absolutely civil in nature, with a clear indication of no criminal charges in the near future.
