RBS pays £150m to Treasury in f irst dividend

THE Government has pocketed £150million as Royal Bank of Scotland yesterday paid the first dividend since its £45billion bailout a decade ago.

The bank paid a total of £240million to around 190,000 ordinary shareholders including UK Government Investments, which manages the Government’s 62 per cent stake in the lender.

It came after RBS achieved its first full year of profit since the financial crisis.

RBS announced the 2p per share interim dividend in August after reaching a £3.7billion settlement with US authorities over claims that it mis-sold mortgages in the run-up to the banking meltdown of 2007-8.

Ten years ago the bank received the first tranche of a Government rescue package at the height of the crash on October 13, 2008.

RBS chief executive Ross McEwan said: ‘I’m pleased to be able to pay a dividend to our shareholders; a small return after their many years of patience and a testament to the hard work of everyone at this bank.’

He added: ‘We have created a smaller, safer bank that is generating more sustainable profits. Our capital position is above our target and we are looking to return any excess capital as soon as possible to shareholders.’

While the dividend was welcomed by the Treasury, the Government is unlikely to ever recoup the cash it stumped out for RBS during the bailout. Earlier this year, it sold a 7.7 per cent stake in RBS at a £2.1billion loss to the UK taxpayer.

The sale of 925million shares brought the public holding in RBS down from approximately 70.1 per cent to 62.4 per cent, resulting in proceeds of just £2.5billion at 271p per share. The Government paid an average of 502p per share.

RBS chairman Howard Davies said last month taxpayers were ‘unlikely to recoup investment in full’, given the bank’s languishing share price. ‘The focus on survival has had a cost,’ he said.

Loan loss provisions, hits from acquisitions and costs linked to the mis-selling of payment protection insurance (PPI) and sub-prime mortgages in the US have all dragged on finances.

The lender is exploring a share buyback deal to bring the public holding to less than 50 per cent by the end of the present parliament.

A Treasury spokesman said: ‘All money recovered from our shareholding in RBS will be used to pay down the national debt.’

‘Focus on survival has had a cost’