RBS reportedly doubles offer to investors ahead of court case
State-owned bank trying to avert showdown over 2008 £12bn rights issue
Royal Bank of Scotland (RBS) has reportedly doubled its offer to disgruntled shareholders suing the firm over a 2008 rights issue only hours before a High Court case was due to start.
UK media were reporting that RBS had doubled its settlement offer to 82p a share after an intervention by the bank's chief executive Ross McEwan. The trial would also see an appearance by disgraced former boss Fred Goodwin.
RBS was bailed out of the financial crisis with £45bn of taxpayers' cash as it teetered on the brink of collapse during the financial crisis. The government still holds a 70% stake and seems unlikely to ever recoup its cash.
Other groups, representing 80% of claimants, have settled at 41p a share, but around 9,000 investors and some institutions have pursued their case. In December the bank said it paid out £800m
The investors allege that RBS misled them about the state of the bank's finances when it called on them for £12bn in a rights issue at 220p a share.
The bank has spent more than £100m defending the claims, a figure that Justice Hildyard earlier this month said was “staggering”. The bill includes the legal costs of Goodwin and other former directors.
In 2016, the Financial Times cited documents it had seen alleging that former managers at RBS disregarded warnings from staff over risky investments and its investment bank’s dependency on the “heroin of unsecured funding” before the financial crisis.
Senior RBS managers were told by internal risk experts, months before the financial crisis, that the bank had overvalued billions of dollars of risky debt, such as subprime mortgage bonds, the court documents said.