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RBS agrees £800m payout over 2008 crisis rescue RBS agrees £800m payout over 2008 crisis rescue
(about 5 hours later)
Royal Bank of Scotland has reached an £800m pay-out deal with shareholders who say the bank misled them before a £12 billion rescue package in 2008. Royal Bank of Scotland has reached an £800m pay-out deal with shareholders who say the bank misled them before a £12bn rescue package in 2008.
The majority state-owned lender said it had reached a "full and  final settlement" with three of the five groups seeking compensation. The majority state-owned lender said it had reached a “full and final settlement” with three of the five groups seeking compensation.
RBS also said that it was looking to finalise a settlement with the two remaining groups, represented by Leon Kaye and Signature Litigation.RBS also said that it was looking to finalise a settlement with the two remaining groups, represented by Leon Kaye and Signature Litigation.
The legal action is linked to a rights issue overseen by disgraced former boss Fred Goodwin.The legal action is linked to a rights issue overseen by disgraced former boss Fred Goodwin.
In April 2008, RBS asked existing shareholders to inject £12 billion into the firm to strengthen its reserves after the bank had splurged £49 billion to acquire Dutch bank ABN Amro. In April 2008, RBS asked existing shareholders to inject £12bn into the firm to strengthen its reserves after the bank had splurged £49bn to acquire Dutch bank ABN Amro.
The deal proved toxic and, just months later, the value of RBS shares plunged 90 per cent and the Government had to step in.The deal proved toxic and, just months later, the value of RBS shares plunged 90 per cent and the Government had to step in.
Chief executive Ross McEwan said: "We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016. Chief executive Ross McEwan said: “We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016.
"We are pleased to have reached this agreement and hope that it will be accepted by the remaining claimant group(s) so that this long course of complex and costly litigation can now be concluded." “We are pleased to have reached this agreement and hope that it will be accepted by the remaining claimant group(s) so that this long course of complex and costly litigation can now be concluded.”
The bank said it did not admit any liability and also said the money is covered by money it has already set aside to cover legal costs.The bank said it did not admit any liability and also said the money is covered by money it has already set aside to cover legal costs.
"RBS will now seek to agree finalised terms with members of the remaining two groups whose claims are presently continuing. Any claims for which settlement is not achieved will, however, continue to be vigorously defended. The trial for such claims is due to commence in March 2017," RBS said. “RBS will now seek to agree finalised terms with members of the remaining two groups whose claims are presently continuing. Any claims for which settlement is not achieved will, however, continue to be vigorously defended. The trial for such claims is due to commence in March 2017,” RBS said.
Additional reporting by PAAdditional reporting by PA