RBS settles compensation claims over 2008 rights issue
The Edinburgh-headquartered lender, which is still 73 per cent owned by the UK government, said the settlement represents 77 per cent of the claims by value in the litigation.
The bank said the deal was struck in order to “minimise further material litigation expense and management distraction and without any admission of liability”, adding that it is willing to make available £800 million in total to be “split among all five shareholder groups”.
The money is covered by existing provisions.
Advertisement
Hide AdAdvertisement
Hide AdThe legal action is linked to a rights issue overseen by disgraced former boss Fred Goodwin.
In April 2008, RBS asked existing shareholders to inject £12 billion into the firm to strengthen its reserves after the bank had splurged £49 billion to acquire Dutch bank ABN Amro. The deal proved toxic and, just months later, the value of RBS shares plunged 90 per cent and the UK government had to step in.
Current chief executive Ross McEwan said: “We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016.
“We are pleased to have reached this agreement.”