RBS coughs up its first div­i­dend for a full decade

Govern­ment says £150 mil­lion will be used to pay down na­tional debt

The Courier & Advertiser (Dundee Edition) - - BUSINESS - KA­LY­EENA MAKO­RTOFF

The UK Govern­ment has pock­eted £150 mil­lion as Royal Bank of Scot­land coughed up the first div­i­dend since its £45 bil­lion bailout a decade ago.

The bank yes­ter­day paid out a to­tal of £240m to around 190,000 or­di­nary share­hold­ers in­clud­ing UK Govern­ment In­vest­ments, which man­ages the govern­ment’s 62% stake in the lender.

RBS an­nounced the 2p per share in­terim div­i­dend in Au­gust af­ter reach­ing a $4.9bn (£3.7bn) set­tle­ment with US au­thor­i­ties over claims that it mis-sold mort­gages in the run-up to the fi­nan­cial cri­sis.

The share­holder pay­out comes al­most 10 years since the bank re­ceived the first tranche of a govern­ment res­cue pack­age at the height of the bank­ing crash on Oc­to­ber 13 2008.

Chief ex­ec­u­tive Ross McEwan said: “I’m pleased to be able to pay a div­i­dend to our share­hold­ers – a small re­turn af­ter their many years of pa­tience and a tes­ta­ment to the hard work of every­one at this bank.

“This is an­other im­por­tant mile­stone in our turn­around, al­most 10 years to the day that RBS was res­cued by the Bri­tish tax­payer.

“We have cre­ated a smaller, safer bank that is gen­er­at­ing more sus­tain­able prof­its.

“Our cap­i­tal po­si­tion is above our tar­get and we are also look­ing to re­turn any ex­cess cap­i­tal as soon as pos­si­ble to share­hold­ers.”

But while the div­i­dend was wel­comed by the Trea­sury, the govern­ment is un­likely to ever re­coup the cash it stumped out for RBS dur­ing the bailout.

The govern­ment ear­lier this year sold a 7.7% stake in RBS at a £2.1bn loss to the UK tax­payer.

The sale of around 925 mil­lion shares brought the pub­lic hold­ing in RBS down from ap­prox­i­mately 70.1% to 62.4%, re­sult­ing in pro­ceeds of just £2.5bn at 271p per share.

The govern­ment paid an av­er­age of 502p per share on its bailout of RBS dur­ing the fi­nan­cial cri­sis.

RBS chair­man Howard Davies said last month that tax­pay­ers are “un­likely to re­coup (the) in­vest­ment in full”, given that the bank’s share price has failed to ap­proach such heights since then.

“The fo­cus on sur­vival over a decade has had a cost,” he said.

Com­ment­ing on the div­i­dend pay­out, a Trea­sury spokesman said: “All money re­cov­ered from our share­hold­ing in RBS will be used to pay down the na­tional debt.”

Top and above: RBS is pay­ing a div­i­dend to share­hold­ers for the first time since its govern­ment bailout.

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