RBS Bank Slides into Loss on US Litigation Charges

Britain's state-rescued Royal Bank of Scotland slid into the red in the third quarter on US litigation and company-wide restructuring costs, it said Friday.

RBS made a loss after tax of £469 million ($570 million, 523 million euros) in the three months to September 30 compared with one year earlier when it had posted a net profit of £940 million.

Litigation and conduct costs of £425 million include a charge linked to a fine in the United States.

Royal Bank of Scotland agreed during the third quarter a fine of $1.1 billion (1.0 billion euros) with US authorities over the alleged mis-selling of mortgage securities ahead of the 2008 financial crisis that triggered a state bailout of the Edinburgh-based lender. 

Much of the underlying lending was worthless or fraudulent, delivering billions of dollars in losses to holders of the mortgage bonds when the housing market collapsed, bringing down numerous banks.

The US Department of Justice last month ordered Deutsche Bank to pay a $14 billion fine over its role in the subprime mortgage crisis -- sparking fears it may have to raise fresh capital.

A source told AFP in late September that the German bank was in talks with the DoJ to reduce its fine to about $5.4 billion, while the bank's chief financial officer Markus Schenck on Thursday said discussions on reaching a final settlement were "ongoing".