RBS gets nod for buyback

BAILED- OUT Royal Bank of Scotland has won approval from shareholders to buy back its shares from the Government.

At a meeting in Edinburgh yesterday, investors said that RBS could buy up to 4.99pc of its stock from the Treasury in any one year. It would cost RBS around £1.5bn at current market prices.

The Government did not vote, but more than 98pc of voting shareholders approved the resolution, well above the 75pc threshold it needed to pass.

Howard Davies, RBS’s chairman, said that the bank had strong cash reserves to support the buyback.

And he pointed to the fact that it paid a dividend last year for the first time in a decade.

He added: ‘Those were important moments in the recovery of the bank and have allowed us to start thinking about how to distribute our excess capital.’

The High Street lender ended up in the Treasury’s hands following its rescue during the 2008 financial crisis, where £45.5bn of taxpayers’ money was pumped in. It will now be up to the Treasury to decide if it is willing to sell any of its 62.3pc stake to RBS.

Chancellor of the Exchequer Philip Hammond has said he wants to reduce the state’s shareholding to zero by 2024.

The Government will almost certainly make a huge loss on shares it bought for 501p each.

They are now worth just 250p, and estimates have put the total loss at close to £30bn.

The Labour Party said last night that it would halt the sale of RBS’s Government- owned shares if it came to power.