US regulators have hit the Royal Bank of Scotland £4.2bn for sales of mortgages to incapable institutions under its US subsidiary before the 2008 financial crisis.
The bank had sold risky home loans to investors in 2005 to 2007 under its US branches and other subsidiaries. Observers estimate US regulators’ investigations into its mortgage activity in the country could earn the bank an additional £9bn recompense bill.
This is on top of the £6bn PPI bill due for its consumers.
RBS Chief Ross McEwan blames Fred Goodwin, the former chief, of his activities that led to the massive fines RBS faces today. McEwan said the “price to pay for a better organisation” is quite difficult to repay, but is necessary.
RBS, Lloyds, HSBC and Barclays, UK’s “Big Four” banks, all have sold toxic mortgages to US investors a few weeks before the financial meltdown of 2008. During this time, the UK government had bailed out Lloyds and RBS with taxpayer money. Lloyds is successfully returning to the private sector while RBS is still 70 per cent owned by the country.
The announcement of the PPI deadline would see RBS’ PPI bill increase further before August 29, 2019. According to the Association of Claims Companies, RBS, along with several financial institutions, have used a “missing document” alibi increasingly since the deadline’s announcement.