LONDON (Reuters) - Royal Bank of Scotland paid its first dividend since a 2008 British government bailout on Friday, rewarding around 190,000 shareholders with a 2 pence 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, its 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 45.5 billion pounds ($60.10 billion) at the peak of the crisis.
“This is another important milestone in our turnaround, almost ten years to the day that RBS was rescued by the British taxpayer,” McEwan said in a statement.
UK Government Investments, which manages Britain’s remaining 62 percent stake, will receive around 150 million pounds 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 in a statement.
While the payment is a welcome boost to Britain’s coffers, the 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 $4.9 billion to settle an investigation by U.S. 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 Friday’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 on Friday delivered a “birthday card” to a London branch criticising RBS for what the campaign group said was its failure to reform in the ten years since the crash.
($1 = 0.7571 pounds)
Reporting by Emma Rumney, Editing by Janet Lawrence and Alexander Smith