RBS warns of pain as it pays £1.7bn in divis

TAXPAYeRS and other long-suffering shareholders are being handed a dividend boost by bailed-out Royal Bank of Scotland.

Investors will share a bumper £1.7bn as RBS unveiled a total interim payout of 14p per share – its highest since the start of the financial crisis more than a decade ago.

The Treasury, which still owns a 62pc stake in the lender after rescuing it with £46bn in 2008, will be handed almost £1.1bn of this cash.

The remaining £750m will go to private shareholders, including RBS’s army of 180,000 retail investors.

It came as the Natwest owner unveiled a profit of £2.7bn for the first half of 2019, up 48pc on a year earlier.

This increase was largely triggered by a one-off windfall from the sale of RBS’s stake in Saudi Arabian bank Alawwal for £700m.

The results failed to reassure investors, who are concerned that banks will suffer as the economy takes a turn for the worse ahead of Brexit.

Ross Mcewan, RBS’s chief executive, said it is very unlikely to hit its long-term profitability targets given Britain’s flagging performance.

The warning sent shares down 6.2pc, or 13.4p, to 203.7p yesterday.

Mcewan said that large companies are refusing to invest until the future becomes clearer over Brexit. The 62year-old said: ‘We’ve continued to see our larger corporate clients just sitting, waiting for a decision and not investing as they would normally have done in this economy and we are starting to see the uncertainty flow through into business.

‘The smaller, medium-sized businesses have just continued on with their life as have most of the personal customers, and that’s why we’re seeing strong mortgage growth.’