RBS shareholders agree to settle legal dispute

A group of Royal Bank of Scotland investors have reached an agreement with the bank over a legal dispute dating back to 2008.

The RBS Shareholders Action Group confirmed on Monday that it had reached a settlement deal with the bank's legal representatives, following claims RBS had misled the group about its financial well-being during the financial crisis of 2008.

The investors group, which is made up of 9,000 shareholders, accepted an offer of 82p per share, which is nearly double the original offer made by the bank.

Both sides had been set to head to the High Court after the determined group refused to accept a settlement for the 82p share price on Friday.

The UK High Court delayed the start of the trial between RBS and the action group until 1 June, following the postponed start of the trial for three consecutive days as the two parties sought an out-of-court settlement.

RBS asked its shareholders for an investment of £12bn following its disastrous acquisition of Dutch bank Abn-Amro, before being taken over by the government shortly afterwards.

Berenberg analysts said last week that RBS has even more significant challenges facing it before the end of 2017.

"In our view, the key task for RBS during 2017 is to overcome legacy issues, in particular US litigation and state aid requirements. Resolving these issues is a key hurdle for recommencing capital returns and would help remove uncertainties that continue to cloud the strength of the core business."