RBS share price rallies as group announces first dividend since financial crisis

Bailed-out lender to pay initial 2p interim dividend

RBS share price rallies as group announces first dividend since financial crisis

Shares in Royal Bank of Scotland Group (LON:RBS) have jumped in London this morning as the bailed-out lender unveiled plans to pay an interim dividend, marking the company’s first shareholder payout since the financial crisis. The move came as the bank updated investors on its interim performance, posting a drop in profits.

As of 08:58 BST, RBS’ share price had added 2.24 percent to 255.70p. The shares are outperforming with broader UK market, with the benchmark FTSE 100 index which currently stands 0.45 percent higher at 7,610.17 points.

RBS to pay first dividend since financial crisis

RBS announced in a statement this morning that it intended to declare an interim dividend of 2p per ordinary share, with the move subject to the timing of finalisation of the previously announced civil settlement in principle with the US Department of Justice over mis-sold mortgage-backed securities in the run-up to the financial crisis. The move marks a major milestone for the FTSE 100 group which was rescued by the UK taxpayer during the financial crisis with a £45.5-billion bailout and has since been undergoing a massive restructuring which has seen it reduce its international footprint and focus on its UK retail operation.

The dividend announcement came as the group updated investors on its interim performance, posting attributable profit of £888 million for the first six months of the year, and second-quarter  operating profit before tax of £613 million, compared with £1.24 billion in the prior-year period.

Morgan Stanley veteran approached for CFO role

The results come with RBS on the lookout for a new chief financial officer and Sky News reports that William Chalmers, who jointly leads Morgan Stanley’s global financial institutions group,  is among a number of external candidates identified as a potential replacement for Ewen Stevenson.

A longlist of names is understood to have been drawn up by headhunters acting for the bailed-out lender, with the appointment of a new chief financial officer unlikely until the autumn. Sources close to RBS further told the newswire that there was also at least one internal candidate to replace Stevenson who is due to take the top finance job at HSBC Holdings (LON:HSBA).

As of 09:08 BST, Friday, 03 August, Royal Bank of Scotland Group share price is 256.30p.

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