That followed criticism from politicians and former RBS business customers about how it was handling complaints about the GRG unit, which is alleged to have pushed customers into bankruptcy during and after the 2007-8 financial crisis.
Announcing the preliminary agreement on Wednesday, RBS Chief Executive Ross McEwan called the deal a "milestone".
Britain's state-rescued Royal Bank of Scotland said on Thursday (May 10) it had been fined US$4.9 billion by the US Justice Department over its role in the sub-prime crisis. The group has already booked $3.46 billion for the settlement, noting that it would take a $1.44-billion charge in its second-quarter results.
Shares in Royal Bank of Scotland rose as much as 6% on Thursday after it secured a far lower than expected settlement with U.S. authorities, paving the way for a long-awaited return of cash to British taxpayers who provided support during the financial crisis.
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Royal Bank of Scotland Group has agreed to pay $4.9 billion to resolve a US Department of Justice investigation into the mis-selling of subprime mortgage bonds before the financial crisis.
It ends a long-running probe into the taxpayer-backed lender and paves the way for the United Kingdom government to relaunch plans to sell its 72% stake in the bank.
Britain's Conservative government is meanwhile planning to return RBS to private ownership with the aim of selling £15 billion of its stake by 2023.
UK Chancellor Philip Hammond then said he was reluctant to sell shares while the DOJ probe was still to be resolved. The bank has paid nothing for ten years.
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"This is hardly a Silicon Valley company".
RBS said the proforma impact of the proposed settlement on the bank's March 31, 2018 Common Equity Tier 1 ratio is a reduction of about 50 basis points and a reduction of 9p on March 31 2018 fully diluted TNAV per share. "I'd like to see much of that ploughed into the bank's IT systems", said the investor, who asked not to be named.
RBS may have benefited from settling under Trump's administration, which has been softer on banks than that of his predecessor Barack Obama.
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It was not immediately clear how Avenatti knew about the payments, and he declined to say how in TV interviews with ABC and MSNBC. It said Mr Cohen was paid for advice on health policy. "Novartis considers this matter closed".
RBS had previously set aside roughly $3.5bn for the fine, but many analysts had feared it could be even larger than the $4.9bn provisionally agreed today.