RBS Clears Path to Pay Dividends After $4.9 Billion DOJ Deal

May 10, 2018 | Bloomberg     Royal Bank of Scotland Group Plc cleared one of the last barriers keeping the U.K. from reducing its stake in the lender and resuming dividends after it reached a tentative deal to pay $4.9 billion to resolve a U.S. mortgage probe.

Top executives said the U.K.’s biggest government-owned bank will begin discussions with British regulators about restarting dividends after a decade.

“The investment case for this bank is much clearer,” RBS Chief Executive Officer Ross McEwan said on a call with reporters on Thursday. This is “a milestone moment to restore capital distribution,” he said.

A preliminary settlement with the U.S. Department of Justice makes it easier for the U.K. government to attract buyers for its approximate 70 percent stake after bailing out RBS during the financial crisis. Chancellor of the Exchequer Philip Hammond welcomed the agreement in principle. “It marks another significant milestone in RBS’s work to resolve its legacy issues, and will help pave the way to a sale of taxpayer-owned shares,” he said in a statement.  Read more here

Deutsche Bank and Justice Dept. Complete Deal on Mortgage Crisis

The New York Times |  January 17, 2017        The Justice Department completed a deal with Deutsche Bank on Tuesday that will require the bank to pay $7.2 billion for its sale of toxic mortgage securities in the run-up to the 2008 financial crisis, the department said.

The settlement calls on Deutsche Bank to pay a civil penalty of $3.1 billion and provide $4.1 billion in consumer relief to homeowners, borrowers and communities harmed by its practices.

The total is the largest amount ever paid to resolve charges against a single entity for misleading investors in residential mortgage-backed securities, the department said in a statement.  Read more here.

Virginia Reaches $63 Million Pact with 11 Banks in Mortgage Bond Fraud Suit

Reuters | January 22, 2016   A group of 11 banks agreed to pay more than $63 million to settle allegations that they misled the Commonwealth of Virginia and its retirement system about residential mortgage backed-securities, Attorney General Mark R. Herring said on Friday.

The banks, which include two Bank of America Corp units , Morgan Stanley and a unit of the Royal Bank of Scotland Group PLC, defrauded the state's retirement fund by selling it shoddy mortgage bonds in the run-up to the financial crisis, Virginia's attorney general said in a 2014 lawsuit.

None of banks admitted liability in the settlement, Herring said.

The $63 million pact is the largest non-health care-related sum ever obtained in a suit brought under a Virginia law aimed at curbing fraud against the commonwealth's taxpayers, Herring said in a statement.

In the lawsuit, Herring said an analysis showed nearly 40 percent of the mortgages that backed 220 securities purchased by Virginia's retirement fund were fraudulently represented as posing a lower risk of default than they actually did.  Read more here.