Royal Bank of Scotland's chances of reaching a deal this year with the US Department of Justice over its mis-selling of toxic mortgage-backed securities are "diminishing", its chief executive said today.
RBS CEO Ross McEwan made his comments in a Bloomberg TV interview.
Ross McEwan had said several times this year he expected to reach a settlement in 2017, a key step in allowing the bank to return to full-year profit in 2018.
Analysts have estimated the bank could pay up to $12 billion to settle the case.
"There are diminishing chances we settle in the year," McEwan said in the Bloomberg interview.
The CEO has been trying to clean up RBS's balance sheet and end an array of legal cases so the UK government can sell the more than 70% stake in the bank it obtained via a £46 billion bailout during the financial crisis.
The case with the US Department of Justice is the last major such problem remaining, after RBS in July paid the US Federal Housing Finance Agency $5.5 billion to settle similar claims.
RBS, which owns Ulster Bank here, has not made an annual profit since 2007. It has forecast it will in 2018, contingent on settling with the Department of Justice.
If the deal is delayed into 2018, as is now likely, it could jeopardise the bank's plan to return to profit at a time when Britain's government is preparing to offload its stake in RBS.
Analysts said they expect the bank will need to make an additional provision $2.5 billion to cover the settlement.
If shifted into 2018, that would wipe out much of the £3.2 billion of profit the bank is forecast to make.
Talks with the Department of Justice initially stalled due to staffing changes in the US government following the election of President Donald Trump.
McEwan said there had been no substantial discussions with the department when reporting the bank's third quarter results in October, but that he remained hopeful of settling this year and some preliminary conversations had taken place.
This had seemed optimistic to some. Most market participants had been expecting a settlement some time between now and the first half of 2018.