RBS agree settlement of £4.2bn with US government

Royal Bank of Scotland has agreed a £4.2 billion ($5.5bn) deal to settle claims over the way it sold mortgage-backed securities in the US before the financial crisis.

Pic Lisa Ferguson 02/04/2015 The Royal Bank of Scotland, Dundas Street, Edinburgh

The bank said £3.65 billion would be largely covered by existing provisions.

The settlement was reached with the Federal Housing Finance Agency.

In a statement Ross McEwan, RBS CEO, 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.”

More to follow.