McEwan: need to seek best outcome

RBS poised for 9th year of losses ahead of US fine

RBS hqRoyal Bank of Scotland is setting aside a further £3.1bn ($3.8bn) to pay fines related to mis-selling mortgage-backed securities in the US.

In a statement this morning it said the latest provision takes the total aggregate to £6.7bn ($8.3bn) as at 31 December 2016.

 RBS said it “continues to cooperate” with the US Department of Justice in its civil and criminal investigations.

It said the duration and outcome of these investigations and other litigation matters remain uncertain, including in respect of whether settlements for all or any of such matters may be reached.

RBS emphasises that further substantial additional provisions and costs may be recognised and, depending on the final outcome, other adverse consequences may occur.

Ross McEwan, RBS’s chief executive, said: “Putting our legacy litigation issues behind us, including those relating to RMBS, remains a key part of our strategy. It is our priority to seek the best outcome for our shareholders, customers and employees.”

In a media conference call this morning he described the latest provision as “another painful example of the cost of that legacy”.

He said he could not say if £3bn would be the limit of the fine. It was the bank’s view that  this is an “appropriate” provision.

The board had “noted” the scale of fines issued to other banks, including Deutsche.

Asked how the fine may impact on bonuses to executives, he said: “Pay reflects the bank we are today and not the bank we were in 2007.”

He said the bank had been “building capital” ahead of making the provision.

The fine will plunge the bank into a ninth successive year of losses. The bank has paid £50bn since the financial crisis.

RBS will announce full year results on 24 February.

 



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.