RBS agrees to £3.6bn settlement

Royal Bank of Scotland has agreed a $4.9 billion (£3.6bn) settlement with US regulators over claims it mis-sold toxic mortgage bonds in the runup to the financial crisis.

The taxpayer-backed lender said the penalty with the US Department of Justice (DOJ) was a “milestone” for the group, ending a long-running investigation and paving the way for the Government to relaunch plans to sell its 72 per cent stake in the bank.

RBS said $3.46bn (£2.5bn) of the proposed civil settlement will be covered by existing provisions and the bank will take a $1.44bn (£1.1bn) hit in its second quarter results.

But the settlement still needs to be finalised.

RBS chief executive Ross Mcewan said: “Today’s announcement is a milestone moment for the bank.”