RBS sets aside $6b for litigation, compensation claims in Britain, US
LONDON (AFP) - Britain's state-controlled Royal Bank of Scotland (RBS) has set aside more than 3 billion pounds (S$6.3 billion) for litigation and compensation claims in Britain and in the United States.
The total includes 1.9 billion pounds to cover largely US 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 mis-selling 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 mis-selling of interest rate hedging products, known as swaps, to small businesses in Britain. There will also be an extra 200 million pounds for "for various conduct related and legal expenses" when the bank publishes its fourth-quarter results next month.
RBS made the shock statement ahead of the stock market close, sending its share price sliding 2.21 per cent to finish at 332.2 pence on London's FTSE 100 index.