ROYAL Bank of Scotland, Lloyds, HSBC and Barclays are facing around £19 billion of conduct and litigation charges over the next two years, according to a report from Standard & Poor's (S&P).

The research said the big four banks have already incurred £42bn of charges over the past five years, the vast majority of the £48bn paid out by the industry as a whole.

The researchers believe claims for the mis-selling of payment protection insurance have probably peaked while compensation for mis-sold complex business loans, where £5bn has been paid out since 2012, is also expected to reduce to a "modest" level.

PPI has so far cost the banks more than £26 billion with S&P factoring in a further £5bn over the next two years.

But the ratings agency warns of "material" charges for investment banking related litigation charges this year.

Among the active investigations are probes into the rigging of foreign exchange markets and possible breaches of anti-money laundering controls.

The S&P research suggests the banks have enough capital to cope with any fines and said the industry is making "substantial strides" to make sure products being sold today do not lead to problems in the future.

It argued sales practices are less aggressive and focused on the short term, banks are providing more evidence about customer care and many chief compliance officers are reporting directly to chief executives.

The report said: "While such developments are good examples of progress, we believe that they cannot on their own mitigate against mis-selling or conduct risk; the fundamental changes in culture being enacted will take many years to permeate through all areas of large and complex banking groups."

Separately, RBS has agreed to sell a tranche of North American loans worth around £3.7 billion to Mizuho Financial Group.

It marks the second such transaction between the two banks in recent months. In February Japanese firm Mizuho bought around £5bn of US and Canadian loans from RBS.

RBS said the latest portfolio it is selling made a profit in the region of £13 million during 2014.It expects to receive cash of £330 million as part of the deal but said that would generate a loss on disposal of £20m.