HSBC has agreed to pay $765m to the US Department of Justice (DOJ) to settle claims of mis-selling residential mortgage-backed securities (RMBS) prior to the financial crisis.

Under the agreement with the DOJ, the bank has agreed to settle all investigations related to its legacy securitisation, issuance and underwriting of RMBS, which were issued between 2005 and 2007.

The settlement resolves claims that the bank misguided buyers on the quality of loans in RMBS.

Of the settlement amount, $492m will be paid by HSBC USA, which is HSBC North America’s US-based public company. The remaining amount will be paid by HSBC North America Holdings.

Both the HSBC entities have already reserved the penalised amount, as of 30 June 2018.

HSBC agreed to the settlement without admitting any liability or wrongdoing.

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HSBC USA president and CEO Patrick Burke said: “We are pleased to put this investigation related to activity that occurred more than a decade ago behind us.

“Since the financial crisis, HSBC has been strengthening our culture, processes and internal controls to ensure fair outcomes for our clients. The US management team is focussed on putting historical matters into the rear view mirror and completing the turn-around of HSBC’s US operations.”

In August, HSBC announced that its retail banking earnings with adjusted profit before tax soared by 7% in the first half of 2018.