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‘Is potential $12 bln fine for RBS enough?’ asks BCG Partners’ Mike Ingram

Thursday, November 17, 2016 8:02
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The Royal Bank of Scotland (LON:RBS) could reportedly face a penalty of more than $12 bln over its mis-selling scandal in the US . The bank, which is more than 70% owned by the British taxpayer, hasn’t set aside any money for a settlement with the US Department of Justice over its sale of residential mortgage-backed securities before the 2008 banking crisis.

Market Strategist at BCG Partners, Mike Ingram tells Proactive: ”The question I’m asking myself is will it just be $12 bln. As a benchmarking exercise consider what we know for instance about the Deutsche Bank debacle … supposedly a $14 bln fine has been suggested by the DoJ.”

”Deutsche’s total RMBS exposure to my understanding is something like $18.6 bln  … RBS’ exposure is potentially north of $32 bln, which of course raises the question is $12 bln enough”.

Ingram adds: ”It’s not the only legal battle and possible fine RBS is facing going forward. They are somewhat behind the curve in reaching financial settlements and there are potentially huge contingent liabilities against their capital base, against their balance sheet.”

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