Royal Bank of Scotland writes off $4bn for US mortgage mis-selling cases

Royal Bank of Scotland has taken a 3.1 billion pound ($3.92 billion) provision as it is set to settle claims in the United States that it mis-sold toxic mortgage-backed securities in the run up to the 2008 financial crisis.

The surprise provision means that RBS is unlikely to make a profit in 2016, the ninth straight year the bank has failed to make an annual profit.

RBS is currently in negotiations with the U.S. Department of Justice over the settlement, the timing of which is still uncertain.

Chief Executive Ross McEwan has been trying to clean up RBS’s balance sheet and end an array of legal cases so the government can sell its more than 70 percent stake in the lender after a 45.5 billion pound bailout during the financial crisis.

The British government has said that the uncertainty about the scale of the penalty is one of the reasons why it halted plans to sell any further shares in the lender.

“Putting our legacy litigation issues behind us, including those relating to RMBS, remains a key part of our strategy,” McEwan said in a statement.

Source: Reuters