The Royal Bank of Scotland Group plc
Settlement reached with the Federal Housing Finance Agency regarding US RMBS claims
12 July 2017
The Royal Bank of Scotland Group plc (together with its subsidiaries, "RBS") has reached a settlement with the Federal Housing Finance Agency ("FHFA") as conservator of Fannie Mae and Freddie Mac, to resolve claims by FHFA in relation to RBS's issuance and underwriting of approximately
Ross McEwan, RBS CEO, said:
"Today's announcement is an important step forward in resolving one of the most significant legacy matters facing RBS and is further evidence of the determination of the bank's leadership to put our remaining issues behind us.
"This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions."
Financial Impact of the FHFA settlement
Under the settlement, RBS will pay FHFA
The cost to RBS (net of the indemnity mentioned above) of
As at end Q1 2017, RBS held a provision of
Ongoing Legacy Inquiries and Litigation
RBS is one of 17 financial institutions to have settled RMBS claims filed by FHFA. Following this settlement, RBS's unresolved RMBS litigation matters involve the issuance of less than US
As previously disclosed, RBS continues to cooperate with RMBS related investigations and proceedings (both formal and informal) by federal and state governmental law enforcement and other agencies including the US Department of Justice ("DOJ") and various other members of the RMBS Working Group of the US Financial Fraud Enforcement Task Force. The duration and outcome of these investigations, including in particular the DOJ's civil and criminal investigations, and other RMBS litigation matters remain uncertain, including in respect of whether settlements for all or any of such matters may be reached.
RBS is not making any other adjustments to existing provisions relating to RMBS matters as a result of today's settlement but continues to advise that further substantial provisions and costs may be recognised and, depending upon the final outcomes, other adverse consequences may occur. Please see RBS's 2016 Annual Report and Accounts for further information on these outstanding investigations and litigation matters.
Ewen Stevenson (Chief Financial Officer) will host a conference call for investors and analysts at 14.30 BST. A replay of the call will be made available shortly afterwards. Only items relating to the above announcement will be discussed on the call; there will be no references and discussion relating to other matters and the Q2 2017 results.
International: +44 (0) 1452 568 172
US: +1 866 966 8024
Conference ID: 54462050
Std International: +44 (0)1452 550 000
Conference ID: 54462050
For further information, please contact:
RBS Investor Relations
+44 (0) 20 7672 1758
RBS Media Relations
+44 (0) 131 523 4205
Forward Looking Statements
This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to RBS and its subsidiaries' regulatory capital position, risk-weighted assets, impairment losses and credit exposures under certain specified scenarios. In addition, forward-looking statements may include, without limitation, statements typically containing words such as "intends", "expects", "anticipates", "targets", "plans", "estimates" and words of similar import. These statements concern or may affect future matters, such as RBS's future economic results, business and capital plans and current strategies. Forward-looking statements are subject to a number of risks and uncertainties that might cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statements. Factors that could cause or contribute to differences in current expectations include, but are not limited to, legislative, fiscal and regulatory developments, competitive conditions, technological developments, exchange rate fluctuations and general economic conditions. These and other factors, risks and uncertainties that may impact any forward-looking statement or RBS's actual results are discussed in RBS's
This announcement contains information that qualified or may have qualified as inside information for the
purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR). For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Matt Waymark, Head of Investor Relations for The Royal Bank of Scotland Group.
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