Blueprint
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For
July 12, 2017
Commission
File Number: 001-10306
The
Royal Bank of Scotland Group plc
RBS,
Gogarburn, PO Box 1000
Edinburgh
EH12 1HQ
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form
20-F X Form 40-F
___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1):_________
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7):_________
Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes ___
No X
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
________
The following information was issued as Company announcements
in London, England and is furnished pursuant to General Instruction
B to the General Instructions to Form
6-K:
The Royal Bank of Scotland Group plc
Settlement reached with the Federal Housing Finance Agency
regarding US RMBS claims
12 July
2017
The
Royal Bank of Scotland Group plc (together with its subsidiaries,
"RBS") has reached a settlement with the Federal Housing Finance
Agency ("FHFA") as conservator of Fannie Mae and Freddie Mac, to
resolve claims by FHFA in relation to RBS's issuance and
underwriting of approximately US$32 billion (£25 billion) of
residential mortgage-backed securities ("RMBS") in the
US. As part of
the settlement, FHFA's outstanding litigation against RBS will be
withdrawn.
Ross
McEwan, RBS CEO, said:
"Today's announcement is an important step forward in resolving one
of the most significant legacy matters facing RBS and is further
evidence of the determination of the bank's leadership to put our
remaining issues behind us.
"This settlement is a stark reminder of what happened to this bank
before the financial crisis, and the heavy price paid for its
pursuit of global ambitions."
Financial Impact of the FHFA settlement
Under
the settlement, RBS will pay FHFA US$5.5 billion (£4.2
billion), of which US$754 million (£581 million) will be
reimbursed to RBS under indemnification agreements with third
parties.
The
cost to RBS (net of the indemnity mentioned above) of US$4.75
billion (£3.65 billion) is largely covered by existing
provisions. An incremental charge of US$196 million (£151
million) will be recorded in the RBS Q2 2017 results which will be
published on 4 August 2017.
As at
end Q1 2017, RBS held a provision of US$8.3 billion (£6.6
billion) against RMBS, of which $4.55 billion (£3.6 billion)
related to FHFA and the remainder principally relates to a number
of the matters described below.
Ongoing Legacy Inquiries and Litigation
RBS is
one of 17 financial institutions to have settled RMBS claims filed
by FHFA. Following this settlement, RBS's unresolved RMBS
litigation matters involve the issuance of less than US $1 billion
of RMBS issued primarily from 2005 to 2007, assuming court approval
of an agreed and provided for settlement. This unresolved
amount does not include the FHFA case involving RMBS issued by
Nomura, which RBS estimates its net exposure as approximately US
$383 million (£295 million) and intends to pursue
indemnification for. This net exposure was also included
within RMBS related provisions as at Q1 2017.
As
previously disclosed, RBS continues to cooperate with RMBS related
investigations and proceedings (both formal and informal) by
federal and state governmental law enforcement and other agencies
including the US Department of Justice ("DOJ") and various other
members of the RMBS Working Group of the US Financial Fraud
Enforcement Task Force. The duration and outcome of these
investigations, including in particular the DOJ's civil and
criminal investigations, and other RMBS litigation matters remain
uncertain, including in respect of whether settlements for all or
any of such matters may be reached.
RBS is
not making any other adjustments to existing provisions relating to
RMBS matters as a result of today's settlement but continues to
advise that further substantial provisions and costs may be
recognised and, depending upon the final outcomes, other adverse
consequences may occur. Please see RBS's 2016 Annual Report and
Accounts for further information on these outstanding
investigations and litigation matters.
Investor call
Ewen
Stevenson (Chief Financial Officer) will host a conference call for
investors and analysts at 14.30 BST. A replay of the call will be
made available shortly afterwards. Only items relating to the above
announcement will be discussed on the call; there will be no
references and discussion relating to other matters and the Q2 2017
results.
Dial-in
details:
UK:
0800 694 8082
International:
+44 (0) 1452 568 172
US: +1
866 966 8024
Conference
ID: 54462050
Replay
details:
UK
FreeCall: 0800 953 1533
Std
International: +44 (0)1452 550 000
USA
FreeCall: +1 (866) 247 4222
Conference
ID: 54462050
For
further information, please contact:
RBS
Investor Relations
+44 (0)
20 7672 1758
RBS
Media Relations
+44 (0)
131 523 4205
Forward Looking Statements
This
announcement contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including
those related to RBS and its subsidiaries' regulatory capital
position, risk-weighted assets, impairment losses and credit
exposures under certain specified scenarios. In addition,
forward-looking statements may include, without limitation,
statements typically containing words such as "intends", "expects",
"anticipates", "targets", "plans", "estimates" and words of similar
import. These statements concern or may affect future matters, such
as RBS's future economic results, business and capital plans and
current strategies. Forward-looking statements are subject to a
number of risks and uncertainties that might cause actual results
and performance to differ materially from any expected future
results or performance expressed or implied by the forward-looking
statements. Factors that could cause or contribute to differences
in current expectations include, but are not limited to,
legislative, fiscal and regulatory developments, competitive
conditions, technological developments, exchange rate fluctuations
and general economic conditions. These and other factors, risks and
uncertainties that may impact any forward-looking statement or
RBS's actual results are discussed in RBS's UK annual report
and accounts and interim reports and materials filed with, or
furnished to, the US Securities and Exchange Commission, including,
but not limited to, RBS's Reports on Form 6-K and most recent
Annual Report on Form 20-F. The forward-looking statements
contained in this announcement speak only as of the date of this
announcement and RBS does not assume or undertake any obligation or
responsibility to update any of the forward-looking statements
contained in this announcement, whether as a result of new
information, future events or otherwise, except to the extent
legally required.
MAR
This
announcement contains information that qualified or may have
qualified as inside information for the
purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014
(MAR). For the purposes of MAR and Article 2 of Commission
Implementing Regulation (EU) 2016/1055, this announcement is made
by Matt Waymark, Head of Investor Relations for The Royal Bank of
Scotland Group.
LEI -
The Royal Bank of Scotland Group plc -
2138005O9XJIJN4JPN90
LEI -
The Royal Bank of Scotland plc - RR3QWICWWIPCS8A4S074
Date: 12
July 2017
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THE
ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
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By: /s/
Jan Cargill
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Name:
Jan Cargill
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Title:
Deputy Secretary
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