Scotland: Royal Bank of Scotland Group Plc may overtake Deutsche Bank AG as the European lender with the highest disclosed legal bills since the financial crisis.
RBS, which once ran one of the world’s largest securities firms, is set to pay a fine for misconduct by its investment bank. Its role in peddling mortgage-backed bonds that fuelled the US housing meltdown could cost RBS $4.9 billion (Dh18 billion), according to the terms of a tentative deal it reached with the US Justice Department last week.
That would increase the bank’s legal tab since the start of 2008 to $17.9 billion, ahead of the $17.3 billion Deutsche Bank had spent through the first quarter, according to company filings and calculations by Bloomberg. Deutsche Bank still has outstanding legal issues, meaning it could reclaim the top spot. Representatives of both RBS, 70 per cent owned by the UK government after a bailout, and Deutsche Bank declined to comment.
Last year, RBS posted its first annual profit in a decade. The lender has been hit by the multitude of costly scandals that ensnared global banks. These include Libor and foreign-exchange index rigging or its practices around the issuance and underwriting US residential mortgage-backed securities.
— Bloomberg
