Daily Management Review

RBS to pay $ 1.1 billion to the US regulator


09/28/2016


Royal Bank of Scotland (RBS) will pay $ 1.1 billion to settle claims of the US National Credit Union Administration (NCUA), according to Reuters.



by ell brown
by ell brown
The regulator accuses bank in selling "toxic" mortgage-backed securities to US credit unions, which subsequently ceased to exist.

RBS will not admit its guilt under terms of the agreement, reads the NCUA’s statement. In 2015, RBS agreed to pay $ 129.6 million on a similar lawsuit that NCUA filed in New York.

In January, RBS said it allocated 3.8 billion pounds ($ 4.95 billion) for settle cases of mortgage securities and investment products sold during the US mortgage crisis and the financial crisis in 2008.

The bank still faces a multibillion dollar lawsuit from the Federal Housing Finance Agency (FHFA). The agency accuses RBS in selling and underwriting risky mortgage bonds of US mortgage agencies Fannie Mae and Freddie Mac in the run-up to the 2008 financial crisis.

Earlier, the bank's executive director Ross McEwan said at a conference in London that in 2016 and 2017, the bank will be working towards settlement of various claims related to mortgage bonds,.

NCUA, in turn, said that it continues proceedings against other banks, including Credit Suisse and UBS, which, according to the regulator, sold low-quality mortgage-backed securities to corporate credit unions

Net loss of Royal Bank of Scotland rose to 2.05 billion pounds in the first half of the year ($ 2.68 billion) amid rising costs and restructuring costs.

According to the bank’s statement, revenues amounted to 6.1 billion pounds, compared to 7.26 billion pounds in the same period of the last year.

Net loss of the Edinburgh bank amounted to 1.08 billion pounds ($ 1.4 billion) compared with a profit of 280 million pounds a year earlier. This is significantly more than 247 million pounds’ loss as predicted experts interviewed earlier. 

Such a loss occurred after spending 1.28 billion pounds on legal penalties associated with the scandal, when bank customers were wrongfully imposed upon credit insurance.

Executive Director of RBS Ross McEwan is currently half way through a five-year implementation plan for conversion of one of the world's largest banks in just a British bank against the backdrop of slowing UK economy after Brexit.

RBS said that the bank is unlikely to achieve its goals by 2019. In addition, the company had to abandon an idea of spin-off of consumer bank Williams & Glyn as a separate business, even though RBS has already spent 1.4 billion pounds on the project.

Already, the bank has almost ceased its international operations. In August, it asked more than 3 thousand its customers, using the global transaction banking services, to accelerate the process of finding alternative financial institutions.

RBS warned customers that current accounts, cash management and settlement of international trade transactions, most likely will not be available after 31 December.

According to the financial institution, it’s been working with nearly 7000 clients in 32 countries. More than half of them have already shifted.

As reported, RBS decided to withdraw from nearly all foreign operations and concentrate on the domestic market of the UK.

The bank is going to stop financial transactions outside the UK and Ireland, as it is too costly to invest in the technology needed to serve customers without an adequate return. 

source: bloomberg.com






Science & Technology

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

Over 270,000 Account Globally Banned From Twitter For Promotion Of Terrorism

Device Capable Of Hearing The Inner Voice Developed By Researchers

New mobile technologies will warn about natural disasters

The brewing industry welcomes blockchain

Asset-Sharing App Of Ryder Is Meant For Commercial Vehicles

Credit Suisse: China will become the leader in AI sphere

Five new technologies that will change the world

World Politics

World & Politics

Will Merkel accept Macron's plans for Europe?

USA and China are pushing North Korea to denuclearization

Germany's dilemma: Will the atomic energy win?

A Forceful Response To Syria Attack Will Be Given By U.S.: Trump

Is Trump’s Maximum Pressure Tactic On North Korea Succeeding Because Of China?

Why are Turkey-EU relations moving back?

Record-Breaking $39 Million raised for Rare Cancer Research in 2018 by Cycle for Survival

Hackers stole data of 5 million bank cards