RBS puts aside over $3bn for US fines

Edinburgh, Jan 26 (IANS) The Royal Bank of Scotland (RBS) has set aside 3.1 billion pounds ($3.8 billion) to cover fines in the US, it announced on Thursday.

The provision is for an expected penalty over the sale of financial products linked to risky mortgages before the 2008 financial crisis, the BBC reported.

RBS, which is 72 per cent state-owned, has now put a total of 6.7 billion pounds aside to cover litigation by the US Department of Justice.

It means the bank is set to report a loss for 2016, the ninth year in a row that RBS has lost money.

Chief executive Ross McEwan has been trying to end RBS’s legal wrangles so that the government can sell its stake in the bank, which was the result of a 45.5 biilion pounds bailout during the financial crisis.

RBS said the “duration and outcome” of the investigations into its mortgage selling activities before 2008 were uncertain – including whether a settlement with the Department of Justice (DoJ) could be reached.

It also said that “further substantial additional provisions and costs may be recognised” and that other “adverse consequences may occur”.