RBS dividend hope

ROYAL Bank of Scotland could finally start paying dividends next year – ending a ten-year wait for hard-pressed shareholders.

The struggling lender, which received a £46bn Government bailout in 2008, made a £259m profit in the first quarter.

This was up from a £968m loss a year earlier, and is its first quarter in the black since 2015.

Bosses have said they will not resume payouts to investors until a settlement has been reached with US authorities over the sale of toxic bundles of mortgage debt. They also want to satisfy EU competition chiefs who demanded that 300 branches were sold as a condition of its rescue. Efforts to split them off have failed and the bank is hoping to satisfy Brussels by setting up a £750m fund to boost small rivals.

Both these issues could be resolved by the end of 2017, paving the way for a return to annual profit next year and the first dividends since the financial crisis.

Chief executive Ross McEwan said RBS had ‘great potential’, but refused to apologise after the Government said taxpayers were likely to make a loss on the 71.5pc stake it took to save the bank. Shares rose 4.7pc, or 12p, to 265.4p.