RBS has settlement with the Federal Housing Finance Agency, will pay $5.5 billionStaff Writer | July 13, 2017
The Royal Bank of Scotland Group (RBS) has reached a settlement with the Federal Housing Finance Agency (FHFA) as conservator of Fannie Mae and Freddie Mac.
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As part of the settlement, FHFA’s outstanding litigation against RBS will be withdrawn.
Under the settlement, RBS will pay FHFA $5.5 billion (£4.2 billion), of which $754 million (£581 million) will be reimbursed to RBS under indemnification agreements with third parties.
The cost to RBS (net of the indemnity mentioned above) of $4.75 billion (£3.65 billion) is largely covered by existing provisions. An incremental charge of $196 million (£151 million) will be recorded in the RBS Q2 2017 results which will be published on 4 August 2017.
As at end Q1 2017, RBS held a provision of $8.3 billion (£6.6 billion) against RMBS, of which $4.55 billion (£3.6 billion) related to FHFA and the remainder principally relates to a number of the matters ■