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RBS agrees to pay $4.9bn to US

Business-General-Handshake-Hire-Appointment-700x450.jpgRoyal Bank of Scotland has agreed to pay the US Department of Justice $4.9bn (£3.6bn), paving the way for the British government to sell more shares in the bank.

RBS said the settlement was agreed on Wednesday night and most of the sum is already covered.

The prospect of a heavy fine by US authorities made the government reluctant to sell shares in the bank bailed out by UK tax payers after the 2008 financial crisis.

But the £3.6bn sum is lower than many analysts expected and is another sign RBS is putting the past behind it.

Last year Chancellor Philip Hammond promised to sell a stake of up to £3bn in RBS by March 2019 but was hesitant to sell shares while a large US fine hung over it.

The provisional settlement between the DoJ and RBS follows months of negotiations and takes the total fines banks have paid for the misselling of subprime mortgages in the US to more than £48bn.

RBS chief executive Ross McEwan says: “Today’s announcement is a milestone moment for the bank. Reaching this settlement in principle with the US DoJ will, when finalised, allow us to deal with this significant remaining legacy issue and is the price we have to pay for the global ambitions pursued by this bank before the crisis.”

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