Western Mail

RBS to be grilled over dividends

- KALYEENA MAKORTOFF & RAVENDER SEMBHY Press Associatio­n newsdesk@walesonlin­e.co.uk

Royal Bank of Scotland executives are expected to face a barrage of questions from shareholde­rs over dividends, branch closures and reprivatis­ation at the lender’s annual meeting this week.

The bank, 72% taxpayer-owned, is likely to be quizzed over plans to kickstart dividend payments after recently agreeing a $4.9n (£3.6bn) settlement with US regulators.

The deal, which related to claims RBS missold toxic mortgage bonds in the run-up to the financial crisis, paves the way for the resumption of payouts, ending a barren decade for investors.

Chief executive Ross McEwan said earlier in May that the bank would have conversati­ons with the regulator “in the next month or so” over relaunchin­g shareholde­r payouts, which equity analysts at Jefferies expect could start at 6p per share. That figure could grow to 16p by 2020, the broker predicts.

The US settlement also removes a major hurdle to the bank’s return to private hands, with the Government signalling that it is ready to start selling shares in the lender.

The Government hopes to sell £15bn worth of shares by 2023, around two-thirds of its stake.

However, it is facing a near£26.2bn loss on its holding, with shares languishin­g well below the average 502p price paid during the 2008-09 bailout, at around 292p.

The bank is also likely to be grilled at the May 30 AGM in Edinburgh over plans to shut 162 branches in England and Wales following a review of its network.

The lender said earlier this month that it was targeting sites that were in close proximity to other branches, as it starts to reintegrat­e its Williams & Glyn network back into the core bank.

Last year, RBS avoided the compulsory sale of Williams & Glyn, which had been ordered by regulators as part of state aid rules following its £45bn Government bailout at the height of the financial crisis. Instead, RBS will fund a near-£800m pot to spur competitio­n, £350m of which will help challenger banks convince small firms to switch accounts from the state-backed lender.

Investors are expected to probe RBS executives about alleged mistreatme­nt of small business by its now-defunct turnaround unit Global Restructur­ing Group (GRG). The Treasury Select Committee earlier this year released data showing that 30 staff currently working for the RBS restructur­ing division previously worked in the heavily criticised GRG.

Nicky Morgan, chairwoman of the cross-party group of MPs, said the discovery suggested the overhauled turnaround division at the bank may have been a mere “rebranding exercise”.

RBS has been dogged by allegation­s that GRG intentiona­lly pushed firms towards failure in the hope of picking up their assets on the cheap. But the lender has said that the culture, structure and operations at RBS have “fundamenta­lly” changed.

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