By Emma Rumney
Royal Bank of Scotland (RBS) has paid its first dividend since a 2008 British government bailout, rewarding around 190,000 shareholders with a 2p per share payout.
RBS has spent a decade trying to return to its roots as a prudent lender following its near-collapse during the financial crisis, enduring hefty restructuring costs and years of losses.
Ross McEwan, RBS’ chief executive, said the dividend was a small return for many years of patience from its shareholders, which still include the British government after it bailed the bank out with £45.5bn (€52bn) at the peak of the crisis.
“This is another important milestone in our turnaround, almost 10 years to the day that RBS was rescued by the British taxpayer,” Mr McEwan said.
UK Government Investments, which manages Britain’s remaining 62% stake, will receive around £150m from the payout, first announced at the bank’s half-year results.
A spokesman for Britain’s Treasury said it welcomed the payment, which it said demonstrated the progress RBS has made in resolving its major legacy issues.
“All money recovered from our shareholding in RBS will be used to pay down the national debt,” he said.
While the payment is a welcome boost to Britain’s coffers, the UK government is set to make a loss overall on its investment.
It resumed sales of its shares earlier this year, after RBS agreed to pay $4.9bn to settle an investigation by US authorities into its sale of toxic mortgage-backed securities in the run up to the crisis.
Re-privatisation is now the last remaining strand of RBS’s return to normality, and is likely to take a number of years.
Even after yesterday’s payment, the bank has excess capital which it plans to return to investors, possibly via a special dividend or share buy back.
While the bank has recovered financially, the longer-term damage to its reputation has endured.
Positive Money yesterday delivered a “birthday card” to a London branch criticising RBS for what the campaign group said was its failure to reform in the 10 years since the crash.
RBS detailed its long-awaited plans to resume dividends in August, saying its intentions were “a great sign of the progress” it had made in the ten years, and calling the payout “a huge event” for the bank.