Royal Bank of Scotland will pay $5.5 billion to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed bonds that it needs to resolve before the British government can sell its shares.
The Edinburgh-based lender said it agreed to settle the lawsuit with the U.S. Federal Housing Finance Agency (FHFA) that accuses it of mis-selling $32 billion of mortgage-backed securities before the global financial crisis.
Analysts had previously estimated RBS would have to pay between $3.5 to $5 billion to settle the case with the FHFA.
The case against RBS is the biggest and last of 18 lawsuits filed in 2011 over about $200 billion in mortgage-backed securities.
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