The Royal Bank of Scotland Group plc has reached a civil settlement in principle with the US Department of Justice to resolve its investigation into its residential mortgage-backed security operations (RMBS) between 2005 and 2007.

RBS has agreed to pay a civil monetary cash penalty of US $4.9 billion (c. £3.6bn at the current exchange rate). 

This figure is less than what was widely expected.

Ross McEwan, RBS’s CEO, said: “Today’s announcement is a milestone moment for the bank. Reaching this settlement in principle with the US Department of Justice will, when finalised, allow us to deal with this significant remaining legacy issue and is the price we have to pay for the global ambitions pursued by this bank before the crisis.  

“Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer.”