Just reward in offing for RBS faithful

ROYAL Bank of Scotland could reward its long-suffering investors next week by announcing plans for bumper dividend payouts at its preliminary results on Friday.

Aside from unveiling a full year dividend of 3p per share, it is believed that RBS will say that it intends to pay a special dividend to return surplus cash to shareholders.

According to Investec analyst Ian Gordon that dividend could be worth as much as £1.2billion or 10p per share, which RBS can easily afford as it has £4 billion surplus capital.

Analysts believe RBS – 62 per cent owned by the taxpayer – will say that its net profits for 2018 more than doubled to £1.6 billion this week.

It finally returned to profit after a decade of losses in 2017.

Last week RBS received shareholder approval to spend £1.4billion on buying back its shares from the Government so it can cancel them, which in turn would boost share price. However RBS is expected to announce a special dividend this week instead, as its share price is too low to make a buyback worthwhile.

On Friday night the shares closed at 239.1p, below the 271p level the Treasury sold at when it disposed of part of its stake last June. To break even on its RBS shares the Government needs to sell them at 625p per share.

Since its near death during the credit crunch, RBS has rebuilt its financial strength, selling off businesses, dismantling its investment bank, pulling back its lending, shrinking its balance sheet and focusing on domestic lending.

Elsewhere, the consumer champion Which? says that Santander plans to shut a fifth of its branch network, which would take the total number of closures to 3,101 since 2015.