RBS could settle U.S mortgage case this quarter

RBS building sign

Royal Bank of Scotland could pay a fine to settle claims of misconduct in its handling of U.S. mortgage securities as early as this quarter, a person with knowledge of the matter said.

Bloomberg News reports that the lender is bracing to settle Federal Housing Finance Agency accusations it sold faulty mortgage bonds to Fannie Mae and Freddie Mac from 2005 to 2007, said the person, who asked not to be identified because the talks are private.

RBS could pay a fine of as much as $8bn, Chirantan Barua, an analyst at Sanford C. Bernstein, wrote in a note.

'We expect a settlement in the next three to six months', said Barua, who has an outperform rating on RBS. While the bank may pay as much as $8bn under a 'worst-case' scenario, $5bn is more probable, he wrote.

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

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