Royal Bank of Scotland is edging towards a multi billion-dollar settlement with the US Department of Justice (DoJ) over its mis-selling of toxic mortgage-backed securities — paving the way for the UK government to resume selling the British public’s 71% stake in RBS — Sky News reported on Friday, citing sources.
UK finance minister Philip Hammond has signalled that any further sale of the public’s 71% stake is contingent upon the US fine being announced.
RBS declined to comment.
RBS had expected to have reached a deal over its last large remaining legacy issue — but this has been delayed, weighing on its share price and complicating the government’s plan to sell the UK taxpayer’s stake in the bank.
Sky News said RBS is due to hold formal negotiations with the Department of Justice (DoJ) this month as discussions begin to focus on the size of the multibillion dollar penalty that RBS will ultimately pay.
A final deal over the bank’s mis-selling of retail mortgage-backed securities (RMBS) prior to the 2008 financial crisis could be reached within a matter of weeks, the report said.
A figure much higher than the roughly $3.5bn (£2.5bn) that RBS has already set aside to cover the fine is now said to have been put on the table for the first time.
The DoJ’s work is focused on civil penalties rather than criminal penalties.