RBS shareholders must be patient in wait for dividend

ROYAL Bank of Scotland has dashed hopes that it will finally resume paying dividends next year – warning that shareholders will not receive payouts until the start of 2017 at the earliest.

The sobering announcement came as the state-backed lender revealed it had slumped to a £153m loss in the first half of the year, down from a £1.4bn profit in the same period last year.

The dramatic swing was caused by a £1.3bn provision to pay lawsuits and compensation to customers and another £1.5bn earmarked for ‘restructuring’ costs.

Treasury insiders last night insisted the latest loss would not derail its plans to start selling taxpayers’ 79pc stake in RBS as soon as September.

The bank (down 10.8p to 342.4p) has not paid a dividend since it was rescued with a £45.5bn bailout from taxpayers in 2008.

Finance chief Ewen Stevenson said it had to clear up ‘conduct issues’, make sustainable profits and boost capital before it is in a position to pay a dividend.

Arguing it was important to be transparent and realistic, he said: ‘We do not expect to return to capital distribution until the first quarter of 2017 at the earliest.’ Stripping out the huge costs for misconduct and restructuring, adjusted operating profits nudged up 2pc to £3.45bn in the first half.

Even with all the nasty stuff thrown in the bank made an unexpected profit of £293m in the second quarter, up from a £446m loss in the first three months. This was partly driven by a surge in UK mortgage lending.

Chief executive Ross McEwan warned ‘there will be a lot of noise’ this year, with the bank braced for a huge settlement in the US for mis-selling toxic mortgage-backed securities.

But he revealed that the settlement may still be some way off.

RBS has set aside £2.4bn for likely settlements in the US. It was one of six banks fined around £2.8bn for rigging foreign exchange rates and has already paid £399m in fines to UK and US regulators.