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RBS's worst-case legal bill could hit $27 billion

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http://uk.reuters.com/article/uk-rbs-legal-idUKKCN12A1WQ

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Royal Bank of Scotland (RBS.L) may have to pay out as much as $27 billion (21.74 billion pounds), roughly the market value of the bank, in misconduct fines and lawsuits over the next few years, lawyers and analysts said.That bill represents the upper end of estimates to settle a range of claims related to RBS's alleged misconduct before and during the financial crisis, including mis-selling mortgage backed securities (MBS) in the United States.

Investor concern over RBS's outstanding legal and compliance woes increased after news last month that the DOJ is seeking up to $14 billion from Deutsche Bank (DBKGn.DE) for its role in the mis-selling of MBS in the run up to the financial crisis. "The concern is that it could be another Deutsche Bank-style situation where the fines that come in are higher than the market expects," said Laith Khalaf, an analyst at Hargreaves Lansdown, Britain's largest retail stockbroker. "Litigation is a real Sword of Damocles hanging over the bank at the moment and until that is out of the way it is very difficult to see a reason to invest in RBS." An RBS spokeswoman declined to comment on the potential size of the legal bill. If RBS wins the court cases and the fines are at the lower end of analyst estimates, the total would be around $5.5 billion, most of which it has set aside to cover those damages. However, analysts say the bank could have to pay the U.S. Department of Justice as much as 9 billion pounds ($11.19 billion) in the next few months. Even the lowest estimate of 2 billion pounds ($2.49 billion) would make it largest fine in the bank's history. In addition, analysts estimate RBS will have to pay between $3.5 to $5 billion to settle a similar case with the U.S. Federal Housing Finance Agency, after it sold $32 billion of MBS before the financial crisis.

At least this 5h1t isn't owned by the taxpayer.....

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If i understand correctly thats only mortgage securities misselling. 

Rbs is Looking down the barrel of another payout - £5.5bn class action for a £12bn share issue without disclosing the state the bank was in. http://uk.mobile.reuters.com/article/idUKKCN10X1CF

Not looking good on the williams and glyn/rbs england forced branch sale. 1.5bn pissed up the wall over just the last two years, two abortive attempts to sell off part of the bank that took 5 years, a year left to go before a potential european fine. Were they really in a position to turn down a low offer from santander? Can see the europeans making an example out of rbs before brexit eventually completes. 

Looks like GRG restructuring is about to become a big story, potential FCA fine for turning up to a 1.2bn profit out of struggling businesses in a year. On bbc and ft today, fca judgement due soon.

A shambles and continuing disgrace for the govt and taxpayer. 

My personal opinion - Should be nationalised and turned to a 'basic' cards and savings provider by govt to nip the current fetish for monthly paid current accounts in the bud. 

 

 

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RBS was (probably still is) a despicable outfit.

https://www.buzzfeed.com/heidiblake/dash-for-cash

The Dash For Cash: Leaked Files Reveal RBS Systematically Crushed British Businesses For Profit
The RBS Files expose the bank’s secret scheme to boost revenues during the financial crisis by draining businesses of cash and stripping their assets, blowing apart its previous statements to the public and parliament.

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2 hours ago, dgul said:

RBS was (probably still is) a despicable outfit.

https://www.buzzfeed.com/heidiblake/dash-for-cash

The Dash For Cash: Leaked Files Reveal RBS Systematically Crushed British Businesses For Profit
The RBS Files expose the bank’s secret scheme to boost revenues during the financial crisis by draining businesses of cash and stripping their assets, blowing apart its previous statements to the public and parliament.

This has been known for a while but only seems to have hit the mainstream recently.

They did this actively BEFORE the 'crisis' also.

They had a specific wing to help businesses get going and another to deliberately run them down once up and running, change the goal posts for repayments etc all to asset strip.

They knew what they were up to and hid behind other operating names as not to tarnish RBS. I'll bet not the only ones who did/are still carrying out this criminality.

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Some borrowers were leveraged greedsters themselves, and just bad failure and sore losers imo.

The US fine is the uncertainty.  The US sure has had its fill of levying fines on global banks.  Nice $billions.  Why haven't we fined any one on the US financial side?

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Slightly off topic... I worked for RBS from '00 to '06. Only in a call centre mind! Is there a way to transfer my pension out for those years?

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9 hours ago, hotairmail said:

Worth giving a shout out to Ian Fraser, his blog with a lot of history but little activity now and his book: "Shredded: Inside RBS The bank that broke Britain"..."The pimp, the ghetto of fraud and the whorehouse of debt"

http://www.ianfraser.org/shredded-the-pimp-and-the-whorehouse-of-debt/

 

I read his book and was shocked, however the reality is that they aren't an exception in finance. There are more than likely many others to who play fast and loose is seen as good business.

Finance should be split and compartmentalised.

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2 hours ago, hotairmail said:

 

I think you'' find that ALL banks trade whilst technically insolvent. I believe there are special provisions for this.


So why do they ever need bailing out?

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