Royal Bank of Scotland (RBS) has agreed a £3.6bn mis-selling settlement with US regulators, as it tries to draw a line under costly legacy mistakes.
The fine agreed with the Federal Housing Finance Agency (FHFA) relates to sales to US government-backed loan firms Fannie Mae and Freddie Mac prior to the 2008 financial crisis, when RBS was among the biggest players on Wall Street.
The bank is yet to agree a separate deal with the US Department of Justice which could be higher.
RBS said that while it had largely made enough provision for the FHFA penalty, it would take an additional charge in its second quarter of £151m to cover the cost.
The lender – now more UK focused since its taxpayer bailout – said it had agreed to pay £4.2bn but that sum was to be reduced to £3.6bn following a number of reimbursements.
Its chief executive, Ross McEwan, said: “Today’s announcement is an important step forward in resolving one of the most significant legacy matters facing RBS and is further evidence of the determination of the bank’s leadership to put our remaining issues behind us.”This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions.”