Bulletin: Royal Bank of Scotland Ratings Unaffected By Increased U.S. RMBS Provision

LONDON (S&P Global Ratings) Jan. 26, 2017--S&P Global Ratings said today that its ratings on The Royal Bank of Scotland Group PLC (RBSG; BBB-/Stable/A-3) are unaffected by the announced increase in RBSG's provision for litigation related to legacy issuance and underwriting of U.S. residential mortgage-backed securities (RMBS). RBSG disclosed today that it expects to book a £3.1 billion ($3.8 billion) provision for RMBS matters in its earnings for the fourth quarter of 2016, which are due for release on Feb. 24, 2017. This increase would raise RBSG's aggregate RMBS provisions to £6.7 billion ($8.3 billion) as of Dec. 31, 2016. On a pro forma basis, the fourth-quarter provision would have lowered RBSG's Common Equity Tier 1 ratio as of Sept.

...LONDON (S&P Global Ratings) Jan. 26, 2017--S&P Global Ratings said today that its ratings on The Royal Bank of Scotland Group PLC (RBSG; ###-/Stable/A-3) are unaffected by the announced increase in RBSG's provision for litigation related to legacy issuance and underwriting of U.S. residential mortgage-backed securities (RMBS). RBSG disclosed today that it expects to book a ú3.1 billion ($3.8 billion) provision for RMBS matters in its earnings for the fourth quarter of 2016, which are due for release on Feb. 24, 2017. This increase would raise RBSG's aggregate RMBS provisions to ú6.7 billion ($8.3 billion) as of Dec. 31, 2016. On a pro forma basis, the fourth-quarter provision would have lowered RBSG's Common Equity Tier 1 ratio as of Sept. 30, 2016 by 135 basis points, to 13.6%. RBSG commented that the provision does not directly affect parent company distributable reserves, which it intends to bolster later this year through a planned capital reorganization. While material, the magnitude...

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