RBS will set aside more money to settle claims brought by investors over its rights issue, Sky News said.

Lawyers for RBS had recently approached a group of five institutional claimants, including Aviva, Legal & General and the Universities Superannuation Scheme, about a potential settlement, Sky News said.

A deal could be reached with some of these shareholders within weeks, Sky News said.

Royal Bank of Scotland could not immediately be reached for comment.

RBS is still being sued by thousands of shareholders who are claiming around 4 billion pounds in compensation over the rights issue.

Chief Executive Officer Ross McEwan said in May that he was considering an out-of-court settlement in the shareholder case.

The Edinburgh-based bank in May 2008 had asked shareholders to stump up 12 billion pounds to bolster the its capital position, after losing billions on U.S. mortgage assets and an ill-fated acquisition spree that included the takeover of Dutch rival ABN Amro.

The bank, once the world's largest by assets, was partly-nationalised just five months later, diluting the value of shares held by other investors.

(Reporting by Sangameswaran S in Bengaluru)