While most of the cost will be covered by money the company already set aside, the deal will cut second-quarter earnings by $1.44 billion, the bank said in an emailed statement. Late on Wednesday it reached a $4.9 billion settlement in principle with USA prosecutors over crisis-era mortgage bond sales, one of the last banks to do so.
The settlement, agreed in principle, is in respect of a Department of Justice investigation into RBS's issuance and underwriting of U.S. residential mortgage-backed securities ("RMBS") between 2005 and 2007.
The owner of Ulster Bank has agreed to pay the US Department of Justice US$4.9bn (€4.12bn) as part of a settlement.
The accord is also expected to mitigate a major litigation issue of RBS that has reportedly complicated the United Kingdom government's long-term plan to sell down its over 70 percent share in the bank.
The settlement also means RBS can start to pay back the United Kingdom government, who provided the bank with a £45 billion ($61 billion) bailout in 2008.
The widening of the appeal process shows RBS still grappling to deal with past misconduct issues on the same day it reached a $5 billion settlement with USA authorities over its sale of mortgage bonds.
Including the penalty announced Thursday, RBS has paid out roughly £21 billion ($28.4 billion) in settlements and fines following the 2008 global financial meltdown.More news: McCain urges Senate to reject Haspel's nomination for CIA director
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"That's the last really big milestone before the bank can be seen to be fully normalised".
It has also been a major hurdle to the bank's return to private hands, with the government having said the United States mis-selling claims need to be resolved before it can start to sell its shares in the lender.
McEwan said: "It's been 10 years since this bank paid a dividend and our objective is to get it back into a strong position so it can do so".
Chief Executive McEwan also said the bank will start discussing paying RBS's first dividend in a decade with regulators this month, leaving open the possibility the bank would start returning years' worth of excess capital to shareholders before its next annual results.
RBS, however, cautioned that the settlement was subject to the parties entering into a legally-binding agreement, with no assurance that they would "agree on the final terms of any proposed settlement".
The letter said the bank had only received one such claim so far, but expected it could face some very large claims once the claims process gets further underway. "I'd like to see much of that ploughed into the bank's IT systems", said the investor, who asked not to be named.
RBS may have benefited from settling under Trump's administration, which has been softer on banks than that of his predecessor Barack Obama.