RBS fines and settlement amounts could equal market value of the bank

11th Oct 2016

Royal Bank of Scotland (RBS) may be forced to pay out as much as $27 billion in fines and lawsuits to settle claims related to allegations of the pre-financial crisis sale of mortgage-backed securities. That amount, however, is “roughly the market value of the bank”, reports Reuters.

Concerns over RBS’s growing legal tab grew after reports the U.S. Department of Justice may be seeking $14 billion from Deutsche Bank over similar allegations.

“The concern is that it could be another Deutsche Bank-style situation where the fines that come in are higher than the market expects”, said Laith Khalaf, an analyst at Hargreaves Lansdown. “Litigation is a real Sword of Damocles hanging over the bank at the moment and until that is out of the way it is very difficult to see a reason to invest in RBS”.