R.B.S. to Take Nearly $5 Billion Charge Related to Litigation Claims

LONDON - The Royal Bank of Scotland said it would take nearly £3 billion, or about $4.97 billion, in charges to cover potential litigation claims related to mortgage-backed securities and other products sold before the financial crisis.

Bailed out by the British government five years ago, Royal Bank of Scotland said it would take a £1.9 billion charge for potential claims related to mortgage-backed securities and other securities litigation in the United States.

It also will take additional £465 million provision to cover claims related to payment protection insurance, a controversial insurance product that British banks have paid billions of dollars in claims for being improperly sold, and another £500 million to cover claims related to so-called interest rate hedging products.

R.B.S. had paid out £2.2 billion in claims and other costs related to payment protection insurance claims as of Dec. 31 after setting aside £3.1 billion to cover those claims. The bank had previously set aside £1.25 billion to cover claims related to the interest-rate products.

“Billions of pounds have been spent to resolve conduct and litigation issues in recent years,” said Ross M. McEwan, the bank’s chief executive. “Costs on this scale were not predicted by anyone when R.B.S. was rescued in 2008. They come in addition to the costs of restructuring the bank’s bad assets and restoring its funding to prudent levels after the financial crisis.”

The announcement comes about a little more than a week after Deutsche Bank reported its results earlier than expected, saying it had posted a loss of 1.2 billion euros, or about $1.64 billion, related to litigation and restructuring costs.

R.B.S. is scheduled to report its results on Feb. 27.

Mr. McEwan, who took over as C.E.O. in October, has already said he would not take a bonus for the bank’s performance in 2013 and 2014. On Monday, R.B.S. said that the eight other members of its executive committee would not receive bonuses for 2013.

“We have to show we take accountability seriously,” Mr. McEwan said on a conference call with journalists on Monday evening.

Last year, R.B.S. said that it planned to create an internal “bad bank,” known as R.B.S. Capital Resolution, to manage about £38 billion in troubled assets. On Monday, the bank reiterated that it expects to report impairments and asset-valuation adjustments associated with that strategy in the range of £4 billion to £4.5 billion in the fourth quarter.

“We have a stronger bank that can take these provisions,” Mr. McEwan said Monday.

Mr. McEwan has said he wants to change the culture of R.B.S., which received £45 billion from the British government during the financial crisis five years ago and repay the government as quickly as possible.

But, he has had to navigate a series of bad news and bad luck as he tries to turn around the bank, which is 81 percent owned by the British government.

The Financial Conduct Authority, a British financial regulator, is reviewing the bank’s lending practices after two reports last year criticized its treatment of small and medium-sized business clients, including claims the bank pushed some business clients into serious financial difficulties. R.B.S. separately hired the law firm Clifford Chance to conduct an independent inquiry into the claims.

A systems crash in December left customers unable to pay with their debit or credit cards on “Cyber Monday,” one of the busiest online shopping days of the year. Then, Nathan Bostock, the bank’s chief financial officer, resigned after less than three months on the job.

The bank also has found itself recently in the middle of a dispute between Prime Minister David Cameron and Ed Miliband, the leader of the opposition Labour Party over banker bonuses. Mr. Miliband wants the British government to block any attempts by R.B.S. to pay bonuses up to double a banker’s annual salary.