It’s a payday at last as RBS doubles profit

Bonuses 67pc lower for women Boss pockets £3.6m bonanza 13p dividend for investors

PROFITS at Royal Bank of Scotland more than doubled to £1.6bn last year – paving the way for a bumper dividend pay-out.

The bailed-out lender’s army of retail investors will get out 13p per share in total for 2018, the first year they have been handed any cash since the financial crisis struck a decade ago.

Around £977m will go to the Treasury, which owns 62pc of the bank – a legacy from its £46bn rescue by taxpayers in 2008.

Chief executive Ross McEwan (pictured) said RBS is finally moving beyond the legacy of the financial crisis after paying more than £20bn in fines and compensation for past wrongdoing, shutting 1,380 branches and axing 159,000 jobs.

He said: ‘This is a good performance in the face of economic and political uncertainty, with bottom line profits more than double what we achieved the previous year.’

Profits jumped to £1.6bn from £752m in 2017, which was the lender’s first in the black since its state rescue.

The bank set aside an extra £1.3bn in 2018 for misbehaviour that took place before its nearcollapse a decade ago, including extra cash for victims of PPI misselling and £1bn to pay a fine for selling toxic mortgages during the financial crisis.

It also spent £1bn on restructuring, axing jobs, improving creaky IT systems and ditching unprofitable parts of its business to try and become a more healthy bank. Both costs are expected to start falling over the next few years – leaving the lender in a position to throw off more and more cash to investors. The bank faces criticism for a gender pay gap which sees women earn nearly 37pc less than men, with bonuses that are on average 66.7pc less. This is because many lower-paid jobs at the bank, which do not have a bonus attached, are done by women.

More than 430 branches were shut during the year but RBS has pledged not to close any more until 2020 at the earliest.

The Treasury wants to have sold all of its stake in the lender by 2024. RBS shares have fallen 52pc since its bailout, meaning taxpayers face a multi-billion pound loss. Although the bank may be past the worst of its fines and lawsuits its reputation remains badly damaged. It has faced criticism over a business turnaround unit called the global restructuring group (GRG) which was meant to keep troubled small companies afloat during the financial crisis but instead loaded them up with massive fees.

The Treasury has been dragged into the GRG row, amid claims Whitehall officials gave instructions on lending decisions. McEwan rejected claims that the business could face fresh legal action due to the latest revelations, saying: ‘There may be some who will try it, but I don’t think they will succeed.’

The 61-year-old, who was paid £3.6m last year, £91,000 more than in 2017, warned turmoil over Brexit is having a negative effect on the economy, and urged MPs to back a deal with the European Union.

He said: ‘If this goes on for a long period we’re going to see the economy slowing down more than the Bank of England suggested.’