This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-44062479
The article has changed 11 times. There is an RSS feed of changes available.
| Version 9 | Version 10 |
|---|---|
| RBS set for share sale after agreeing $4.9bn US penalty | RBS set for share sale after agreeing $4.9bn US penalty |
| (about 1 hour later) | |
| Royal Bank of Scotland has agreed a $4.9bn (£3.6bn) penalty with US regulators, paving the way for the government to sell down its 70% stake. | Royal Bank of Scotland has agreed a $4.9bn (£3.6bn) penalty with US regulators, paving the way for the government to sell down its 70% stake. |
| The long-running probe focused on the sale of financial products including toxic mortgage bonds in 2005-7, ahead of the financial crisis. | The long-running probe focused on the sale of financial products including toxic mortgage bonds in 2005-7, ahead of the financial crisis. |
| RBS was bailed out by the government at the height of the financial crisis. | RBS was bailed out by the government at the height of the financial crisis. |
| Chief executive Ross McEwan said the settlement will create a "cleaner bank" that is easier to sell. | Chief executive Ross McEwan said the settlement will create a "cleaner bank" that is easier to sell. |
| Chancellor Philip Hammond said the agreement "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". | Chancellor Philip Hammond said the agreement "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". |
| Shares in RBS rose 4.3% in morning trading to 287.9p. | Shares in RBS rose 4.3% in morning trading to 287.9p. |
| Analysis: Simon Jack, BBC business editor | Analysis: Simon Jack, BBC business editor |
| The settling of the outstanding penalty for RBS' role in the financial crisis was the last obstacle standing in the way of selling the government's enormous 71% stake back to the private sector in what will be the biggest privatisation in UK history. | The settling of the outstanding penalty for RBS' role in the financial crisis was the last obstacle standing in the way of selling the government's enormous 71% stake back to the private sector in what will be the biggest privatisation in UK history. |
| The government owns over £20bn worth of shares. That is a colossal amount to sell and will take several years. | The government owns over £20bn worth of shares. That is a colossal amount to sell and will take several years. |
| The first sales will be at a loss, but the government will hope that over time, as the huge overhang of shares to sell dwindles and profits continue to rise, the public may get more money back. | The first sales will be at a loss, but the government will hope that over time, as the huge overhang of shares to sell dwindles and profits continue to rise, the public may get more money back. |
| The public though are unlikely to ever recoup the £45bn poured into the biggest banking debacle in UK corporate history. | The public though are unlikely to ever recoup the £45bn poured into the biggest banking debacle in UK corporate history. |
| Read more from Simon here | |
| Clearer outlook | Clearer outlook |
| RBS said about $3.6bn of the penalty would be covered by funds already set aside. Many analysts had forecast that the settlement could be larger than $4.9bn. | RBS said about $3.6bn of the penalty would be covered by funds already set aside. Many analysts had forecast that the settlement could be larger than $4.9bn. |
| Last July, RBS paid another hefty penalty of $5.5bn to the US Federal Housing Finance Agency. | Last July, RBS paid another hefty penalty of $5.5bn to the US Federal Housing Finance Agency. |
| The US Department of Justice said further details must be negotiated with RBS before a final deal is done. But Mr McEwan called the settlement a "milestone moment" for the bank. | The US Department of Justice said further details must be negotiated with RBS before a final deal is done. But Mr McEwan called the settlement a "milestone moment" for the bank. |
| "Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer," he said. | "Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer," he said. |
| Jane Sydenham, from Rathbone Investment Management, told the BBC: "Removing this final cloud will make a difference, it will mean the government can press ahead with a sale and it can start to look forward, rather than spending all their time worrying about what happened in the past." | Jane Sydenham, from Rathbone Investment Management, told the BBC: "Removing this final cloud will make a difference, it will mean the government can press ahead with a sale and it can start to look forward, rather than spending all their time worrying about what happened in the past." |
| RBS is the last in a line of major banks to pay penalties to the DoJ for their activities ahead of the financial crisis. | RBS is the last in a line of major banks to pay penalties to the DoJ for their activities ahead of the financial crisis. |
| In March, Barclays agreed a $2bn settlement with US regulators, and Deutsche Bank paid $7.2bn. | In March, Barclays agreed a $2bn settlement with US regulators, and Deutsche Bank paid $7.2bn. |
| Rivals also charged by the DoJ include Citigroup, JPMorgan Chase, Credit Suisse, Morgan Stanley, Goldman Sachs and Bank of America. | Rivals also charged by the DoJ include Citigroup, JPMorgan Chase, Credit Suisse, Morgan Stanley, Goldman Sachs and Bank of America. |