RBS hoping to buy back £1.5bn in shares from Government

Capital: Howard Davies SHAREHOLDERS in Ulster Bank parent Royal Bank of Scotland have approved a proposal that allows the lender to buy back up to £1.5bn worth of shares from the Government, as it looks to deploy excess capital and speed up its privatisation.

A total of 98.7% of investors approved the plan at a general meeting in Edinburgh.

The Government, which still owns 62% of RBS, did not vote on the resolution.

The lender’s special resolution sought permission to make off-market share purchases from the Treasury through a “directed buy-back” scheme.

Under the scheme, which will need to be approved by the Bank of England, the bank will be able to buy back up to 4.99% of the Government’s stake in any one year.

However, one shareholder at the meeting described the plan as “abhorrent”, arguing that RBS should be holding back the cash to pay compensation for potentially huge legal settlements.

He also accused the bank of “running scared” from a potential general election and resultant Labour Government, which would seek to nationalise the bank.

But chairman Howard Davies said: “This is something that the board has carefully considered. The bank has a sufficiently strong capital position. They (Labour) will have to speak for themselves.”

RBS has been majority taxpayer-owned since 2008, when it received a £45bn bailout at the height of the financial crisis.

The Treasury plans to sell its stake by 2024, but is expected to lose billions in the process.

RBS was bailed out at 502p per share in 2008.