Royal Bank of Scotland said it agreed a “full and final settlement” with three out of the five shareholder groups involved in the litigation surrounding the bank’s ill-fated £12 billion shareholder rights issue in 2008.
Many shareholders had alleged they were misled by RBS before the rights issue in April 2008 — and six months later RBS was bailed out in a £45.5 billion rescue by the UK taxpayer.
The shares in the rights issue have lost roughly 90% of their value, according to Reuters data — and UK taxpayers still own 73% of the Edinburgh-based banking group.
More than 35,000 shareholders who took part in the rights issue allege RBS hid the extent of its problems before it raised the cash.
“In order to minimise further material litigation expense and management distraction and without any admission of liability, RBS has concluded a full and final settlement with three out of the five shareholder groups representing 77% of the claims by value in the 2008 Shareholder Rights Issue litigation,” said RBS in a statement.
RBS said it is willing “to make available settlement sums of up to £800 million assuming settlement of all claims, to be split among all five shareholder groups, subject to agreement and claim validation.”
RBS said it will now seek to agree finalised terms with members of the remaining two groups “whose claims are presently continuing.”
“Any claims for which settlement is not achieved will, however, continue to be vigorously defended,” said RBS.
It said the trial for such claims is due to start in March 2017.
RBS CEO Ross McEwan said: “We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016.
“We are pleased to have reached this agreement and hope that it will be accepted by the remaining claimant group(s) so that this long course of complex and costly litigation can now be concluded.”