Royal Bank of Scotland in $5.5B settlement over US mortgages
LONDON — Royal Bank of Scotland said Wednesday it has reached a $5.5 billion settlement in the United States over the mis-selling of mortgage-backed securities before the financial crisis — a key milestone in the institution’s efforts to put its past sins behind it.
The deal with the Federal Housing Finance Agency — the conservator of Fannie Mae and Freddie Mac — resolves claims regarding the issuance and underwriting of approximately $32 billion (25 billion pounds) of residential mortgage-backed securities. The bank must still resolve outstanding civil and criminal claims with the Department of Justice.
RBS CEO Ross McEwan characterized the settlement as a “stark reminder” of the heavy price British taxpayer and the bank itself paid for the global ambitions of the institution under disgraced former boss Fred Goodwin.
“It’s never a great experience for a CEO to effectively be writing such a large check — 4.2 billion pounds,” McEwan said on a conference call with reporters. Nonetheless, he said that the bank was “nearly through” with issues that have dogged efforts to return to profit.