RBS's stock falls after reports of $7.7bn settlement

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A good start to the year!

Royal Bank of Scotland fell after the Times reported in London that the bank could pay at least $7.7bn to resolve claims of misconduct in its handling of U.S. mortgage securities.

Bloomberg News reports that the bank’s stock declined 2.4% to 385 pence at 10:40 a.m. local time, while the U.K. benchmark FTSE 100 Index was little changed.

The Times reported Sunday that RBS may have to add to a $2.9bn provision it took a year ago for a settlement of Federal Housing Finance Agency accusations that the bank sold faulty mortgage bonds to Fannie Mae and Freddie Mac from 2005 to 2007. Chief Executive Officer Ross McEwan has warned fines could delay his plan to return the 80% state-owned lender to private ownership.

RBS may have to pay as much as $5bn to close the case, Chirantan Barua, an analyst at Sanford C. Bernstein in London, said last month.

To access the complete Bloomberg News article hit the link below:

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