Royal Bank of Scotland (NYSE:RBS) shares were down more than 3% in New York on Wednesday after it learned that may be hit with a fine as high as $12bn from US authorities, the head of the government arm that manages the UK’s stake in the lender has told Westminster lawmakers.
RBS is under investigation by the US Department of Justice over the way it sold mortgage-backed securities in the run-up to the 2008 financial crisis.
James Leigh-Pemberton, the head of UK Financial Investments, told the Treasury Select Committee that the eventual fine stemming from the DoJ’s probe might be even higher than $12bn.
The DoJ’s plans to fine Deutsche Bank (NYSE:DB) as much as $14bn over the issue sent the German lender’s shares plummeting to a three-decade low, although they have since rebounded. Deutsche’s negotiations with the DoJ over the size of its penalty are ongoing.
RBS shares were down 3.3% at $5.17. Deutsche shares were down 3% at $16.05.
Story by ProactiveInvestors