RBS closes in on £3.6bn settlement over US mortgage bond mis-selling

Royal Bank of Scotland (RBS) is close to agreeing a multi-billion pound fine with US authorities over the mis-selling of mortgage bonds, according to reports.

Discussions are understood to be at an advanced stage between the state-backed lender and the US Federal Housing Finance Agency (FHFA), according to reports by Sky News.

A settlement is likely to leave RBS facing a bill of more than $4.5bn (£3.6bn).

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Such an agreement would draw a line under one of RBS’ largest legal challenges and potentially pave the way for the government selling down its stake. A deal is believed to be only a matter of weeks away, Whitehall sources told Sky News.

The fines relate to the mis-selling of the bonds to US state-owned mortgage firms Fannie Mae and Freddie Mac prior to the 2008 financial crisis.

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However, the settlement is separate from further penalties facing RBS in relation to the sale of residential mortgage-backed securities in the US.

It was in discussions with the US Department of Justice, a process that has been held up US President Donald Trump changing a number of senior officials involved. Such fines are expected to billions of pounds more.

RBS declined to comment.