RBS to pay US $500M for mis-selling financial products

Finance, UK News | Wed 7 Mar | Author – Business & Finance

The Royal Bank of Scotland (RBS) has agreed to pay $500 million (£359.7 million) to New York state for mis-selling financial products in the lead-up to the 2008 global crash.

RBS is not the only bank to suffer similar consequences; it is the sixth bank to pay out for circumstances linked to risky mortgages.

$400 million will be paid to homeowners as relief and $100 will be paid to the state. Not only this, RBS could still face a huge fine from the US Department of Justice. The bank itself said it had put aside $3.2 billion ($4.4 billion) to cover potential settlements with the US and others.

This mis-sell is related to risky mortgage-backed securities that contributed to the housing price crash during the financial crisis of 2008.

RBS is majority owned by the UK government and has worked since the global crash to return to financial health. At the time it was bailed out for tens of billions of pounds.

Recently RBS released its 2017 results showing operating profit at £2,239 million, an increase of £6,321 million in 2016. Adjusted operating profit increased by 31.1% to £4,818 million. The attributable profit for last year was £752 million. There was a 4% increase in adjusted income and an 8.1% reduction in adjusted operating expenses, which drove a 12.1 improvement in operating leverage.