RBS reaches £800m settlement over 2008 right issue

Royal Bank of Scotland today said it has agreed to pay up to £800 million to settle claims dating back to its £12 billion rights issue in 2008.

RBS chief Ross McEwan is hoping for an end to the 'costly and complex' legal row. Picture: Phil Wilkinson
RBS chief Ross McEwan is hoping for an end to the 'costly and complex' legal row. Picture: Phil Wilkinson

The Edinburgh-based lender, which remains 72 per cent owned by the taxpayer, said the payment, being made without any admission of liability, was aimed at minimising “further material litigation expense and management distraction”.

The settlement has been agreed with three out of the five shareholder groups, representing 77 per cent of the claims by value relating to its 2008 cash call, just before that year’s financial crash. Investor action groups had alleged that the bank’s prospectus failed to include material information about the state of its finances.

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RBS said today that it was “willing to make available settlement sums of up to £800m assuming settlement of all claims, to be split among all five shareholder groups, subject to agreement and claim validation”.

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It added: “RBS 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. The trial for such claims is due to commence in March 2017.”

The group’s chief executive, 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.”

RBS said that the total settlement amount was covered by existing provisions.

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