RBS to pay USD 5.5 billion to resolve major US mortgage probe

RBS will pay USD 5.5 billion to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed bonds that it needs to resolve before the government can sell its shares.

Royal Bank of Scotland. (File photo | Reuters) 

LONDON: Royal Bank of Scotland will pay $5.5 billion to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed bonds that it needs to resolve before the government can sell its shares in the bailed-out bank.

The Edinburgh-based bank lender on Wednesday said it agreed to settle the lawsuit with the U.S. Federal Housing Finance Agency (FHFA) that accuses it of mis-selling $32 billion of mortgage-backed securities before the global financial crisis.

Analysts had previously estimated RBS would have to pay between $3.5 to $5 billion to settle the case with the FHFA.