Blog Coverage Royal Bank of Scotland Clears a Lawsuit and Pays $1.1 Billion to NCUA

LONDON, UK / ACCESSWIRE / September 29, 2016 / Active Wall St. blog coverage looks at the headline from The Royal Bank of Scotland Group PLC (NYSE: RBS) as the company declared on September 28, 2016, that it has entered into a final settlement with the National Credit Union Administration’s (NCUA) Board to resolve two outstanding civil lawsuits for $1.1 billion. Reportedly, RBS is paying this sum to settle the two claims regarding the sale of ‘toxic’ mortgage security products during the 2008 financial crisis. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

Today, AWS is promoting its blog coverage on RBS. Get all of our free blog coverage and more by clicking on the link below: http://www.activewallst.com/registration-3/?symbol=RBS

The lawsuit battle

This resolution is feasible as RBS prepares to settle a number of U.S. cases where it was accused of wrongly selling mortgage-backed bonds, hence elevating the U.S. regulator’s recoveries against various banks to $4.3 billion over the sales of such securities before the financial crisis of 2008.

According to a Reuters report, RBS has set aside $5 billion to settle historical misconduct charges; however, perpetual claims state that the amount would be much higher. The settlement, involving its subsidiary RBS Securities Inc., is related to the two mortgage-backed securities, namely in response to the claims filed by US Central Federal Credit Union, and Western Corporate Federal Credit Union. The settlement will resolve lawsuits filed in federal courts California and Kansas with the NCUA’s role as the agent behind the liquidity of the funds for these two entities.

RBS is paying the sum to the NCUA in the US and speculates that this settlement is covered by the existing provisions. NCUA’s Board Chairman Rick Metsger said the regulator plans to continue “to pursue recoveries against financial firms that we maintain contributed to the corporate crisis.”

The final settlement

The NCUA stated that it continues to sue other banks including the likes of Credit Suisse and UBS, over the similar issue of sale of faulty mortgage-backed securities. The NCUA has been recently litigating those corporate firms, whose calculated steps led to financial instabilities in the crisis of 2008.

Seemingly, RBS paid $129.6 billion to resolve a federal lawsuit, quite similar to the current one, the NCUA filed in New York in 2015. This settlement is said to have no impact on the earnings and profit estimates, rather, it is assumed to be primarily provisional, hence dormant to any market repercussions. The bank holds yet another multi-billion dollar lawsuit by the U.S. Federal Housing Finance Agency, which has reportedly acted as the conservator for mortgage giants Fannie Mae and Freddie Mac since the government took over in 2008.

RBS CEO, Ross McEwan, stated in a conference on September 27, 2016, that the bank has initiated the steps to resolve different mortgage claims over the year and the next.

“The NCUA intends to stay the course in fulfilling its statutory responsibilities to protect the credit union system and to pursue recoveries against financial firms that we maintain contributed to the corporate crisis,” Chairman Rick Metsger said in a statement reported by Bloomberg.

Stock Performance

On Wednesday, September 28, 2016, Royal Bank of Scotland’s shares closed the trading session at $4.68, climbing 1.74% from its previous closing price of $4.60. A total volume of 1.81 million shares exchanged hands at the end of the day. At the close yesterday, the stock’s market cap was $27.73 billion.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

ReleaseID: 446214