Royal Bank of Scotland said it reached a final settlement with the National Credit Union Administration Board to resolve two outstanding civil lawsuits for $1.1 billion (£846 million).
The settlements involving subsidiary RBS Securities related to the two residential mortgage-backed securities (RMBS) cases asserting claims on behalf of US Central Federal Credit Union and Western Corporate Federal Credit Union most which were disclosed in RBS’s 2016 interim results.
“The settlement amount is substantially covered by existing provisions as of 30 June 2016 and will have no material impact on the RBS Group’s CET1 ratio,” said the Edinburgh-based banking group.
RBS said it continues to litigate various other RMBS-related civil claims identified in its disclosure, including those of the Federal Housing Finance Agency, and to respond to investigations by the civil and criminal divisions of the US Department of Justice and various other members of the RMBS Working Group of the Financial Fraud Enforcement Task Force including several state attorneys general.
RBS said RMBS litigation and investigations “may require additional provisions in future periods that in aggregate could be materially in excess of the provisions existing as of 30 June 2016.”
According to Reuters, RBS said in January it had set aside £3.8 billion ($4.95 billion) to resolve civil lawsuits over mortgage-backed securities sold before the US housing meltdown and financial crisis in 2008.
RBS said that provision did not cover the ongoing investigations by the US Justice Department or various state attorneys general.
RBS will publish its third quarter 2016 results on October 28.