RBS settles shareholder lawsuits as part of £800m deal

Royal Bank of Scotland (LSE: RBS.L - news) (RBS) has agreed a settlement with three out of five shareholder groups currently suing the bank for compensation.

The claims relate to a £12bn fundraising drive which RBS undertook in 2008, just months before it had to be bailed out by the British taxpayer to the tune of more than £45bn.

The investor groups involved say they were misled when they bought shares in the bank in an effort to help shore up its finances, after a £49bn deal to acquire Dutch bank ABN Amro went south.

But the value of those shares plummeted when RBS was bailed out by the government.

The bank is still 73% owned by the British taxpayer and is struggling to get back on its feet following the financial crash.

RBS last week was the only major British bank to fail the Bank of England's stringent stress tests , which were put in place to ensure that financial institutions in the UK are better prepared should another crash occur.

As previously reported by Sky News , the bank has set aside £800m to pay the claims of all five shareholder groups.

A trial to settle the other claims is due to begin in March, and seems likely to go ahead after one of the outstanding groups - the RBoS Shareholder Action Group, representing 27,000 retail investors - vowed to bring the matter all the way to court.

According to RBS, it has agreed the settlements to "minimise further material litigation expense and management distraction" and has done so without any admission of fault.

Ross McEwan, chief executive of RBS, said: "We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016.

"We are pleased to have reached this agreement and hope that it will be accepted by the remaining claimant group(s) so that this long course of complex and costly litigation can now be concluded."