Richard Partington London
ROYAL Bank of Scotland (RBS), Britain’s largest taxpayer-owned lender, could pay as much as $4.5 billion (R53.9bn) to resolve claims of misconduct in its handling of US mortgage securities, according to Bloomberg Intelligence (BI).
RBS might be closer to JPMorgan Chase’s $4bn accord with the US Federal Housing Finance Agency (FHFA) over its sale of mortgage-backed securities than Deutsche Bank’s $1.9bn deal, Elliott Stein, an analyst for BI, wrote yesterday.
The FHFA, suing on behalf of government-owned lenders Fannie Mae and Freddie Mac, is seeking to add to more than $19bn it has already collected in settlements from 16 other banks. RBS has set aside about £2.1bn (R38.9bn) to cover the cost of the lawsuit.
RBS is seeking to have the case dismissed, arguing that the suit by the FHFA filed in 2011 came too late, according to BI. The legal action relates to $32bn in residential mortgage-backed securities sold to Fannie and Freddie from 2005 to 2007.
RBS and Nomura lost a trial in a separate FHFA case this month. The banks sought to postpone their payments while they appealed the judgment.
A RBS spokeswoman did not immediately respond to a request for comment. – Bloomberg