Belfast Telegraph

RBS moves closer to settling all compensation claims over 2008 rights issue

Royal Bank of Scotland (RBS) has moved one step closer to reaching a settlement with all five shareholder groups that brought compensation claims against the lender in connection with its 2008 rights issue.

The bank said on Thursday that it has reached a "full and final settlement" with a further 9% of total claimants, which represent part of the fifth and final shareholder group that has yet to resolve the dispute.

Those claimants are estimated to have received around £80 million of the £800 million pot that was put aside by the bank to cover the claims.

However, the bank stressed it made the payments "without any admission of liability".

Having settled this further portion of the rights issue claims, RBS said it had now "reached a resolution" with shareholders representing 87% of the claims by value in the litigation, leaving 13% of claims unresolved.

RBS has put aside an extra £10 million in provisions in light of the legal costs that claimants have faced since December.

However, the extra cost has already been taken into account and is not expected to weigh on first quarter results, set to be released on Friday.

RBS reached settlements with four of the shareholder groups in December 2016.

The legal action is linked to a rights issue overseen by disgraced former boss Fred Goodwin.

In April 2008, RBS asked existing shareholders to inject £12 billion into the firm to strengthen its reserves after the bank had spent £49 billion to acquire Dutch bank ABN Amro.

The deal proved toxic and, just months later, the value of RBS shares plunged 90% and the Government had to step in.

Chief executive Ross McEwan said: "We have been very clear that putting our legacy issues behind us is a priority so that we can focus on building the best bank for our customers, shareholders and employees.

"We are pleased to have reached this agreement. We will continue to explore the possibility of settlement with the remaining claimants but if we cannot settle on agreeable terms we will defend the claims at trial."