Royal Bank of Scotland (RBS) is set to to announce in the next few days that it is on the receiving end of another multi-billion pound charge for mis-selling mortgage-backed securities, according to Sky News.
The precise size of the provision to be included in the bank’s 2016 full-year results was unclear, but is expected to be between $3 billion (£2.4 billion) and $4 billion (£3.2 billion).
RBS is already in the process of preparing for a DoJ settlement by putting aside billions of dollars for a fine for an eventual settlement which could even be as high as $12 billion (£9.5 billion).
One Bank to Rule Them All: Atlas Bank Outlines 2020 StrategyGo to article >>
Last month, Barclays was sued by the DoJ for refusing to settle a multi-million dollar claim, while Deutsche Bank agreed to pay $7.2 billion in penalties to resolve the case.
In terms of fines, the mis-selling of residential mortgage-backed securities has been the biggest scandal to emerge from the pre-crisis era, with investors duped into buying toxic mortgages that were packaged up by banks and sold as ultra-safe.
Based on its share of selling these securities, analysts believe that RBS can expect to pay a fine at least as large as Deutsche Bank’s.
Until now, it has been unclear when RBS would be able to announce a formal settlement with the DoJ, but current speculation suggests that a deal may be imminent.