Tags: RBS | CEO | Mortgage | Probe

RBS CEO Sees Potential to Settle Major Mortgage Probe

Image: RBS CEO Sees Potential to Settle Major Mortgage Probe
(DreamsTime)

Friday, 12 May 2017 06:14 AM

Royal Bank of Scotland Chief Executive Ross McEwan said the bank is in talks to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed securities that it needs to overcome before the British government can sell its shares in the bailed-out bank.

McEwan has been trying to clean up RBS's balance sheet and end a string legal cases against the bank. This would open the way for the government to sell its more than 70 percent stake in RBS held since it had to step in with a more than 45 billion pound ($57.83 billion) bailout during the financial crisis.

The CEO said the bank could settle a multibillion-dollar lawsuit by the U.S. Federal Housing Finance Agency separately from an investigation by the Department of Justice (DOJ), which has stalled because of changes in the U.S. government since the election of President Donald Trump.

"They are quite separate ... and we are in discussions with them and we are not in discussions with the DOJ other than them still seeking information," McEwan told reporters at bank's annual shareholder meeting in Edinburgh.

RBS was one of the world's leading sellers of mortgage-backed securities in the mid-2000s that plunged in value when the global financial crisis hit in 2008.

The British government, which has sold off some RBS shares, has said the uncertainty about the scale of the penalties from the U.S. investigations is one of the reasons why it halted plans to sell more.

Taxpayers face a 29.2 billion pound loss on the value of the government's shares in RBS, according to the Office for Budget Responsibility, Britain's independent budget watchdog.

Analysts estimate RBS will have to pay between $3.5 to $5 billion to settle the case with the U.S. Federal Housing Finance Agency.

They estimate the bank could have to pay between 2 billion to 9 billion pounds to settle the case with the U.S. Department of Justice.

But RBS has made little progress on settling with the DOJ because of staff changes since Trump was inaugurated in January. A number of key positions at the department remain empty. 

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
Personal-Finance
Royal Bank of Scotland Chief Executive Ross McEwan said the bank is in talks to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed securities.
RBS, CEO, Mortgage, Probe
353
2017-14-12
Friday, 12 May 2017 06:14 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved