RBS sets aside 3 billion pounds for litigation and compensation
January 29, 2014, 12:08 am TWN
LONDON--Britain's state-controlled Royal Bank of Scotland said Monday it has set aside more than 3 billion pounds (US$5 billion) for litigation and compensation claims in the UK and United States.
The total includes 1.9 billion pounds to cover largely U.S. action over mortgage-backed financial products, RBS said in a surprise statement that sent its shares sliding.
The bank added it has made another 465 million pound provision for compensation for the misselling of payment protection insurance (PPI), which covered repayments on credit products such as consumer loans or mortgages in Britain.
The Edinburgh-based lender said it would take another 500 million pound provision over the misselling of interest rate hedging products, known as swaps, to small businesses in Britain.
There will also be an extra 200 million pounds for “various conduct related and legal expenses” when the bank publishes its fourth-quarter results next month.