Royal Bank of Scotland (RBS)  shares extended declines Thursday following testimony from a senior U.K. government official who warned the majority state-owned lender could face U.S. Department of Justice fines of $12 billion.

RBS shares fell 1.5% by 10:30 GMT Thursday, changing hands at 204.9 pence each extending their two-day decline past 3.5% and halting the stock's strong rally following U.S. President-elect Donald Trump's win on November 8.

James Leigh-Pemberton, chairman of U.K. Financial Investments, or UKFI, which manages the government's stake in RBS, to lawmakers on Britain's Parliament's Commons Treasury Committee Wednesday that RBS could face a fine of between $5 billion and $12 billion

Leigh-Pemberton told the Committee that the range of possible outcomes meant investors could not work out how much RBS's shares should be worth. He said the uncertainty was one of the reasons the government was not looking to sell a further stake in the state-controlled lender at present.

At the Treasury's behest, UKFI last year raised £2.08 billion in a Rothschild-run placement that cut its stake in the bank to 72.9% from 78.3%. It has not sold any further shares since.

The DoJ is investigating RBS over its sales of mortgage-backed securities ahead of the 2008 financial crisis, but has not announced a specific fine.

Leigh-Pemberton's account comes as the DoJ is still in talks with Germany's Deutsche Bank  (DB) over similar alleged miss-selling. The Frankfurt lender has been hoping to bring the fine down from the DoJ's initial demand of $14 billion to as little as $5.4 billion. But more than a month after the German bank was first reported to be on the verge of agreement, the talks are still ongoing.

RBS is also facing litigation from investors who are claiming that the bank misled them over the valuation of its assets when it turned to existing shareholders in a 2008 cash call.

The bank later had to be rescued by the British government as a result of its disastrous acquisition of Dutch lender ABN Amro together with Belgium's Fortis Bank and Spain's Banco Santander. The bailout cost the British taxpayer £45.5 billion, a sum few believe will ever be fully recouped.

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