News Column

RBS pays £165m over mortgage sales in the US

February 20, 2014

TIM WALLACE



RBS SETTLED a class action case in the US yesterday, agreeing to pay disgruntled investors $275m (165m) over mortgage-backed securities sold in the pre-crisis boom years.


The bank also suspended a third foreign exchange trader this week as part of its internal probe into alleged abuse of the markets.


Separately, RBS announced the sale of parts of its investment banking arm, the structured retail investor products unit and the equity derivatives business, to French bank BNP Paribas for an undisclosed sum.


The class action was brought against RBS by investors including the New Jersey Carpenters Vacation Fund and covers more than $15bn of mortgage backed securities (MBS), which the investors said were misrepresented to them.


The settlement still needs court approval, which is expected in the coming weeks.


The bank had already set money aside to cover the bill which is included in provisions of 750m and 1.9bn made over last year.


"The outcome in this case should not be seen as indicative of how other MBS lawsuits involving the RBS Group may be resolved," said RBS.


The bank's shares fell 0.22 per cent.


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Source: City A.M. (UK)


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