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RBS to book extra £3.1B provision for RMBS misselling

Royal Bank of Scotland Group Plc will book an additional £3.1 billion in provisions related to the misselling of residential mortgage-backed securities in the U.S.

The additional charge, which will be reflected on the bank's fourth-quarter 2016 results due to be published Feb. 24, takes the total aggregate of such provisions to £6.7 billion as of 2016-end.

The bank said the further provision would have reduced its tangible net asset value per share as of Sept. 30, 2016, by 27 pence to 311 pence, and its third-quarter 2016 common equity Tier 1 capital ratio by 135 basis points to 13.6%. The provision will not directly impact the group's distributable reserves, it noted.

RBS said it continues to cooperate with the U.S. Department of Justice in its investigations relating to RMBS misselling. It warned that it could recognize "further substantial additional provisions and cost" and that "other adverse consequences may occur" depending on the outcome.