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RBS settles three claims over 2008 rights issue

The Royal Bank of Scotland (RBS) has agreed settlements with three of the five shareholder groups that claimed the bank had misled investors during a funding request in 2008.

Amber-Ainsley   Pritchard

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RBS announced it needed funding of £12bn to absorb losses which resulted from the financial crisis in April 2008.


Investors came forward to help the bank recover but later found evidence to show the prospectus they were given contained "material mis-statements" and "omissions".


RBS has today (December 5 2016) announced a settlement with three of the shareholder groups that represent 77 percent of the claims by value in the 2008 shareholder rights issue litigations.


The bank, which is still 73 percent owned by the government, has set aside a total of £800m to settle all five shareholder group claims.


RBS said it has concluded this settlement to “minimise further material litigation expense and management distraction”.


Last month the bank published its results for the third quarter of 2016 and recorded redress costs of nearly £2bn.


Ross McEwan, chief executive of RBS, 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 groups so that this long course of complex and costly litigation can now be concluded.”


The bank is now seeking to agree a final settlement with the remaining two groups whose claims are presently continuing.


It said: “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.”

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