RBS plans first dividend since 2008 bailout

By Wale Azeez, business reporter
The Royal Bank of Scotland plans to pay a dividend of 2p to shareholders - its first since the 2008 bailout.
But the final decision is subject to RBS' legal settlement with the US Department of Justice over its probe into the banking group's packaging and sale of mortgage-backed securities before the 2008 financial crisis.The banking group said: "We intend to declare an interim dividend of 2p per ordinary share."Declaration of the interim dividend is subject to the timing of finalisation of the previously announced civil settlement in principle with the DoJ (Dept of Justice) in relation to the DoJ's investigation into RBS's issuance and underwriting of US RMBS (residential mortgage-backed securities)."We expect to finalise the settlement with the DoJ and will make a further announcement at the relevant time."The bank made the announcement on Friday as it declared its half-yearly results to June 30.In May RBS agreed to pay $4.9bn (€3.62bn) to settle the US Department of Justice probe.
RBS plans first dividend since 2008 bailout

RBS: Symbolic moment after bank 'lost its way'
The proposed dividend - if paid - would realise a return to shareholders of 2p per share of approx €240m in total - with about two-thirds of that going to government coffers because of the taxpayers' stake in the bank.RBS remains 62.4% owned by the taxpayer after its €45bn bail-out by the government during the crisis.The bank's intention to pay its first dividend in a decade comes as it reported a first-half attributable profit of €888m - down 9% on same period last year.
The drop was largely because of its proposed settlement with the DoJ, as the bank took a charge of €1.04bn in the second quarter as provision for the settlement.RBS saw an operating profit before tax of €1.8bn for the period, after taking an €801m litigation and conduct charge, down from a €1.95bn profit a year earlier.Nicholas Hyett, equity analyst at Hargreaves Lansdown said: "It would be easy to lose yourself in the good news today, but investors should keep half an eye on the challenges ahead."Net interest margins are under pressure as competition rises, and there's still the issue of the government's 62% stake to be dealt with."However, for today at least CEO Ross McEwan will be feeling pretty untouchable - the bank's back in profit, the government's reducing its stake and restarting the dividend was the last major milestone the CEO set himself."The state-backed lender reported its first annual profit in a decade last year of €752m.
More from Business

HSBC to pay $765m to settle US toxic mortgage probe

House of Fraser resolves legal battle as it seeks rescue deal

Liam Fox: EU pushing Britain towards no-deal Brexit

?10m cash call rescues payday lender Wonga from insolvency

Ex-Sainsbury's boss Justin King: 'Make Amazon pay fair share of tax'

Risk of no deal Brexit 'uncomfortably high', Bank of England governor admits

That profit compared to a €7bn loss in 2016, which was the last in a succession of losses going back to the financial crisis, adding up to €58bn.RBS shares were trading up 3% after the announcement.
See also:
Leave a comment
  • Latest
  • Read
  • Commented
Calendar Content
«    Февраль 2019    »