RBS announces first dividend in a decade
Britain’s Royal Bank of Scotland will pay its first dividend since it nearly collapsed and took a state bailout in 2008.
This is paving the way for the government to further reduce its stake in the lender.
Taxpayer-owned RBS said it would pay an interim dividend of 2 pence per share, subject to the finalization of a $4.9 billion settlement with the U.S. Department of Justice (DOJ) over the bank’s sale of mortgage-backed securities in the run up to the financial crisis.
The dividend marks a milestone in RBS’s rocky road to rehabilitation over the last decade. Together with hefty cuts made to its investment bank and international business, it could shift its profile with investors from a risky bet into a safe, predictable value stock.
“We’re pleased but not totally surprised about the dividend news, it just show they have really cleaned the bank up and it’s one of the best capitalized banks in Europe now,” said Alasdair McKinnon, manager at The Scottish Investment Trust which owns RBS shares.
Until its agreement in May, the looming settlement had blocked RBS’s restoration of dividends, excluding a whole class of income-focused investors from buying its stock.
Published: by Radio NewsHub