[Photo:  Philip Toscano/PA]

Royal Bank of Scotland (RBS), in common with other European lenders, faces a settlement with the U.S. Department of Justice (DOJ) over its role in selling mortgage-backed securities in the run-up to the 2008 financial crisis. That fine can range anywhere from $5 billion to $12 billion, which supposedly hinders Britain’s plans to sell its 73% stakes in the bailed-out bank.  [Notwithstanding the fact that the U.K. has delayed the sale numerous times in the past.]

Adding to the U.K.’s sales efforts woes is the fact that RBS has not made a profit since it was rescued with a 46 billion pound ($57 billion) government bailout during the financial crisis. In any case, investors will be unlikely to want to buy RBS shares until the bank has resolved its DoJ settlement because of the likely impact on the bank's capital position.

Of course, all bets seem to be off on what the fine will ultimately be.  Deutsche Bank, which admittedly has a ‘sweetheart’ relationship with president-elect Trump, has said it will fight a $14 billion initial demand from the DLJ, which claims the bank sold bad mortgage-backed securities.

RBS shares have fallen 31% for the year to date.