RBS settles with shareholder groups for $1.02 billionStaff Writer | December 5, 2016
Royal Bank of Scotland Group (RBS) will pay up to GBP800 million ($1.02 billion) to settle claims with shareholder groups.
Banking The GBP800 million has already been set aside
RBS said it had concluded settlements with three out of the five shareholder groups without admitting fault and said that it would "vigorously defend" claims from any parties that wouldn't settle.
The dispute relates to a GBP12 billion cash call just before RBS was bailed out by taxpayers in 2008.
The GBP800 million has already been set aside in RBS's accounts. RBS continues to negotiate with the remaining two groups and if no agreement is reached, then a trial is due to commence in 2017.
Shareholders were suing the bank for GBP4 billion after alleging management at the time weren't transparent about the bank's financial health when it tapped them for funds. The bank said that 77% of those claims are now settled.
RBS, which is 73% government owned, entered into talks with the shareholder groups earlier this year. Management at the bank have wanted to settle the dispute that has proved a distraction from a grinding turn around plan.
One of the groups, the RBoS Shareholder Action Group, which represents thousands of retail investors, has pledged not to settle as it wants RBS's former management, including then Chief Executive Fred Goodwin, to face a trial.
RBS continues to face a number of legal woes, including having to hash out multibillion-dollar settlements with U.S. authorities over the sale of toxic mortgage-backed securities. ■