LONDON Nov 30 Royal Bank of Scotland
still faces challenges from past misconduct and bad assets, Bank
of England Governor Mark Carney said on Wednesday after the
British lender failed the central bank's latest stress test.
The BoE ruled that RBS must boost its capital buffers, an
unexpected result that underlines a litany of problems that RBS
is grappling with.
"That institution (RBS) has made a lot of progress over the
last several years, particularly around its core business
franchise," Carney said at a news conference after the central
bank published its latest financial stability outlook.
"Its challenge is that it still has legacy issues associated
with that. There's misconduct costs, there's impaired assets,
they're still working through the so-called non-core assets on
which they have made progress."
Royal Bank of Scotland may have to pay out as much as $27
billion in misconduct fines and lawsuits over the next few
years, according to estimates by lawyers and analysts.
Analysts say the bank could have to pay the U.S. Department
of Justice as much as 9 billion pounds in the next few months
for mis-selling mortgage backed bonds in what would be largest
fine in the bank's history.
(Reporting by David Milliken and Huw Jones; Writing by Andy
Bruce; Editing by Rachel Armstrong)