Royal Bank of Scotland Group (LON:RBS) has started talks with regulators about launching a special share buyback, the Financial Times has reported. The move comes with the bailed-out lender looking to speed up its return to private ownership following the completion of Bank of England (BoE) stress tests in December.
RBS’ share price has climbed higher in today’s session, having added 1.54 percent to 263.50p as of 09:46 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.85 percent higher at 7,429.87 points. The group’s shares have added a little more than one percent to their value over the past year, as compared with an over two-percent rise in the Footsie.
RBS in talks over buyback
The FT reported yesterday that Katie Murray, RBS’ deputy finance director, had told investors that the lender was in the process of working through with the BoE’s Prudential Regulation Authority about a share buyback. She, however, added that investors should ‘temper enthusiasm’ about any imminent announcements before the publication of the BoE’s stress test results on December 5.
“We’re in a good position, but we need to get through that as well. So, it will come, but it will take us a little bit of time,” she pointed out. Her comments come after RBS chairman Sir Howard Davies recently signalled that the group could use up to £4 billion of surplus capital to pay out a special one-off dividend to shareholders.
CFO search update
The FT further reported that Murray, who will take over as RBS’ finance chief on an interim basis at the beginning of next month following Ewen Stevenson’s departure, is also considered the leading internal candidate to take the role permanently. The newspaper notes, however, that the lender is also understood to be considering external hires.