Royal Bank of Scotland has reached a $4.9bn (£3.6bn) settlement agreement with the US Department of Justice, bringing to an end a long-running probe into the bank’s actions ahead of the 2008 financial crisis.
The DoJ had been investigating RBS ’s role in issuing and underwriting mortgage-backed securities between 2005 and 2007. A decline in the value of these financial products ultimately led to the global markets crisis 10 years ago.
RBS chief executive Ross McEwan said the settlement deal was 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,” he said.
“Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer."
The settlement will make it easier for the UK government to resume selling off its stake in the lender, which it has held since bailing the bank out during the crisis .
The government currently holds 71 per cent of RBS, and had been delaying selling until an agreement had been reached with the US.
