Bank payouts are kick in the teeth
Fury as RBS pay dividend to shareholders while closing dozens of vital local bank branches
ROYAL Bank of Scotland’s decision to pay out dividends to shareholders is sure to infuriate communities across Scotland.
The bailed-out bank have tested the country’s patience to the limit over the last decade. After almost bankrupting us all, they have bounced from one PR disaster to another.
And the only thing you’ve been able to take for granted is that their public pronouncements will be characterised by a sense of detached arrogance.
They also seem to have forgotten the importance of the personal touch in banking and are too keen to conduct all business online or over the phone.
Now the bank’s bosses say they have finally left what they comically call “legacy issues” behind them after coming to a deal with US authorities over mortgage mis-selling.
But rather than paying out to shareholders, RBS should be giving back to the communities that stood by them.
Instead they are planning these dividends at a time when they are axing branches across the country. It’s hard to see that as anything other than a kick in the teeth for the affected communities.
And it’s particularly hard to take when you consider the Government last month lost £2.1billion after selling a tranche of RBS shares at almost half what the taxpayer paid for them in 2008.
The people remain the majority shareholder in RBS and what we want is local bank branches.
FURY erupted yesterday after Royal Bank of Scotland unveiled plans to pay their first dividend in 10 years.
Politicians lined up to blast the handout to shareholders, which comes amid plans to axe scores of branches and following a fall in profits.
The high street bank – who are still around 62 per cent owned by the taxpayer – yesterday revealed bottom-line profits have dropped following a major settlement with US authorities.
But they said they’d pay 2p a share as an interim dividend as soon as the £3.8billion deal with the US Department of Justice over mortgage-backed securities was completed.
The cost of the settlement meant that RBS banked lower profits for the January to June period than in 2017.
Attributable profit was £888million, compared with £939million the previous year.
RBS booked a £1billion charge to deal with the settlement with US regulators, which was agreed in May. It relates to their mis-selling of mortgages in the run-up to the financial crisis.
The bank had already put aside money to cover the rest of the cost. They said they expected the deal with the Department of Justice to be finalised within months, paving the way for the dividend to be paid out.
But politicians reacted with fury to the news RBS would be paying dividends again amid plans to close dozens of Scots branches. Labour’s Jackie Baillie said: “This is a kick in the teeth for communities seeing local branches close across Scotland.” Lib Dem MP Jamie Stone added: “Rather than give money back to shareholders, RBS should be giving something back to the communities who stood by them when times were tough.”
But RBS chief executive Ross McEwan admitted there may be further branch closures this year, after announcing they would shut 162 across England and Wales earlier this year. That was on top of hundreds of closures announced last year, including 62 in Scotland.
McEwan said they were “pleased to announce an intention to pay our first dividend in 10 years”, adding: “Our sector is undergoing significant change and we are positioning ourselves well to compete.”