RBS to pay $4.9 billion in settlement with Department of Justice

The Royal Bank of Scotland Group PLC on Thursday said it will pay $4.9 billion in a settlement with the U.S. Department of Justice over its role in the misselling of toxic mortgage-backed securities. In a statement, RBS said it will pay a civil monetary cash penalty of US $4.9 billion, linked to its issuance and underwriting of U.S. residential mortgage-backed securities between 2005 and 2007. The bank, which is 71% owned by the U.K. government, said $3.46 billion will be covered by existing provisions and it will take a charge of $1.44 billion in the second quarter. The proposed settlement is subject to the DOJ and RBS entering into a legally-binding agreement. Chief Executive Officer Ross McEwan said the settlement is a "milestone moment" for the bank.