RBS Debt Repayment Paves Way for Dividend Next Year

RBS has paid the Treasury £1.2 billion, meaning that the bank can initiate dividend payments to retail shareholders - although it remains 73% government owned

Erin Davis 22 March, 2016 | 4:27PM
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We were pleased with the Royal Bank of Scotland’s (RBS) announcement on Tuesday that it has made the necessary £1.2 billion payment on the Treasury’s Dividend Access Share, as management had signalled it planned to do. The payment eliminates the Treasury’s priority on RBS’s dividend payments, and thereby paves the way for dividends for ordinary shareholders.

Meaningful dividends are a long way off

However, we think meaningful dividends are a long way off, and we’re currently pencilling in dividends to resume in the second half of 2017.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
NatWest Group PLC191.00 GBP0.00Rating

About Author

Erin Davis  is a senior banking analyst for Morningstar.

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