Royal Bank of Scotland profits rise as lender issues £1.6bn dividend
ROYAL BANK of Scotland is putting the dark days of the financial crisis behind it with the announcement of its second successive year in the black and a £1.6bn final dividend.
The bank will pay back nearly £1bn to the taxpayer after the Government provided a £45bn bailout at the height of the financial crisis a decade ago.
However, RBS chief executive Ross McEwan warned the bank faced a difficult economic environment amid a “heightened level of uncertainty related to ongoing Brexit negotiations”.
Mr McEwan said “political uncertainty around Brexit has gone on far too long”, adding that the bank’s corporate clients are pausing investment and this will have an impact on income over the next two years.
“The economy is cooling off and we are starting to feel it,” he added.
The lender, still 62.4 per cent owned by the Government, saw bottom line profits more than double from £752m last year to £1.62bn, a 116 per cent increase.
Full-year pre-tax operating profit rose 50 per cent to £3.4bn.
It marks the bank’s second year in the black following a decade-long run of stinging losses, during a period marred by crisis-era legacy and conduct charges.
The Government will pocket £977m as RBS paid out its second dividend since its bailout a decade ago.
The cash will be given to UK Government Investments, which manages the taxpayer’s stake in the lender.
The bank paid out a 3.5p final dividend and a 7.5p special dividend, meaning the total returned to shareholders in the year amounts to £1.6bn.
Mr McEwan 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.
“We are also announcing an intention to pay back more capital to shareholders and almost £1bn is set to be returned to UK taxpayers for 2018.
“With strong capital and liquidity levels, we are well positioned to support the UK economy.”