RBS chiefs face grilling on closures
ROYAL Bank of Scotland executives are expected to face questions from shareholders over dividends, branch closures and reprivatisation at the lender’s annual meeting this week.
The bank, 72 per cent owned by the taxpayer, is likely to be quizzed over plans to kickstart dividend payments after a $4.9billion (£3.6billion) settlement with US regulators.
The deal, which related to claims RBS mis-sold toxic mortgage bonds in the run-up to the financial crisis, paves the way for the resumption of payouts, ending a barren decade for investors.
Chief executive Ross McEwan said earlier in May the bank would have conversations with the regulator “in the next month or so” over relaunching shareholder payouts, which equity analysts at Jefferies expect could start at 6p per share. That figure could grow to 16p by 2020, the broker predicts.
The US settlement also removes a major hurdle to the bank’s return to private hands, with the Government signalling that it is ready to start selling shares in the lender.
The Government hopes to sell £15billion of shares by 2023.
However, it is facing a near £26.2 billion loss on its holding, with the lender’s shares languishing well below the average 502p share price paid during the 2008 and 2009 bailout, at around 292p.
The bank is also likely to be grilled at the May 30 AGM in Edinburgh over plans to shut 162 branches in England and Wales following a review of its network.
The lender said this month that it was targeting sites that were close to other branches, as it starts to reintegrate its Williams & Glyn network back into the core bank.
Last year, RBS avoided the compulsory sale of Williams & Glyn, which had been ordered by regulators as part of state aid rules following its £45billion government bailout at the height of the financial crisis.
Instead, RBS will fund an £800million pot to spur competition, £350million of which will help challenger banks convince small firms to switch accounts from the lender.
Investors are expected to probe executives about its alleged mistreatment of small business at the hands of its now defunct turnaround unit, Global Restructuring Group (GRG).
The Treasury Select Committee released data this year showing that 30 staff currently working for the RBS restructuring division previously worked in the heavily criticised GRG.