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Business

RBS hit by $1.1 bln U.S. settlement

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Business

RBS hit by $1.1 bln U.S. settlement

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COMING UP:RBS hit by $1.1 bln U.S. settlement

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00:00:01
>> Royal Bank of Scotland forced to fork out $1.1 billion to settle a misselling claim in the US. The US regulator accusing Britain's state funded lender of selling toxic mortgage-backed securities to credit unions that later failed. Reuters UK banking correspondent, Lawrence White, says when it comes to righting the wrongs of the 2008 financial crisis, there's still more to come.
00:00:23
>> This is one of the biggest settlements that RBS has made yet, but they have another 15 outstandings. In terms of impact, this is really the tremor in the water cup before the T Rex arrives. The settlement with the DOJ could be multiple times bigger than today's settlement.
00:00:37
>> RBS has set aside $5 billion to settle historic misconduct charges. Tuesday's settlement taking a decent bite out of that pot. And analysts are concerned total claims will be much higher.>> The Justice Department settlement is the big one that analysts are worried about. Estimates range anything from $9 billion upwards of $20.
00:00:57
Which, with RBS's market capped at about $26 billion US, would be an existential threat were it were to get that far.>> RBS hasn't made a profit since 2007. It's also struggling to find a buyer for 300 branches it must sell before the end of next year under EU competition rules.
00:01:14
Shares in the bank flat on Wednesday. A reflection, perhaps, that this might be the calm before the storm.