Bulletin: Royal Bank of Scotland Ratings Unaffected By Litigation Settlement With The U.S. Department of Justice On U.S. RMBS

LONDON (S&P Global Ratings) May 10, 2018--S&P Global Ratings said today that its ratings and outlook on The Royal Bank of Scotland Group PLC (RBSG; BBB-/Stable/A-3) and subsidiaries are unaffected by today's announcement that RBSG has agreed in principle to settle a U.S. Department of Justice (DoJ) investigation into legacy issuance and underwriting of U.S. residential mortgage-backed securities (RMBS). Under the terms of the proposed settlement, RBSG will pay a $4.9 billion civil cash penalty, of which $3.46 billion is covered by existing provisions and the remaining $1.44 billion will be charged to RBSG's second-quarter earnings. After adjusting for the combined effect of this settlement and a planned £2 billion pension contribution, RBSG disclosed that the 16.4% Common Equity Tier

...LONDON (S&P Global Ratings) May 10, 2018--S&P Global Ratings said today that its ratings and outlook on The Royal Bank of Scotland Group PLC (RBSG; ###-/Stable/A-3) and subsidiaries are unaffected by today's announcement that RBSG has agreed in principle to settle a U.S. Department of Justice (DoJ) investigation into legacy issuance and underwriting of U.S. residential mortgage-backed securities (RMBS). Under the terms of the proposed settlement, RBSG will pay a $4.9 billion civil cash penalty, of which $3.46 billion is covered by existing provisions and the remaining $1.44 billion will be charged to RBSG's second-quarter earnings. After adjusting for the combined effect of this settlement and a planned ú2 billion pension contribution, RBSG disclosed that the 16.4% Common Equity Tier 1 ratio reported at March 31, 2018, would fall to 15.1% on a pro forma basis. This remains comfortably above management's target of at least 13%. The settlement addresses a key element of uncertainty in our...

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