RBS share price surges as group pays first post-bailout dividend

Payout worth about £240 million

RBS share price surges as group pays first post-bailout dividend

Shares in Royal Bank of Scotland Group (LON:RBS) have climbed higher in today’s session as the part government-owned lender paid its first dividend to shareholders since the financial crisis when it was rescued by the UK taxpayer. The bank restored its payout to investors earlier this year, after inking a landmark settlement with the US Department of Justice over mis-sold mortgage-backed securities in the run-up to the financial crisis.

As of 13:30 BST, RBS’ share price had added 1.64 percent to 248.20p. The stock is outperforming the broader London market, with the blue-chip FTSE 100 index currently standing 0.66 percent higher at 7,053.39 points. The group’s shares have lost just under 10 percent of their value over the past year, as compared with about a 6.6-percent drop in the Footsie.

RBS pays dividend

RBS announced in a statement today that it had paid its first dividend since 2008. The lender paid out a dividend of two pence per share to around 190,000 ordinary shareholders, or about £240 million in total. The shareholders include UK Government Investments (UKGI), which holds the taxpayers’ 62-percent stake in the lender. The Guardian noted in its coverage of the news that the Treasury will pick up nearly £150 million.

Another ‘milestone’

“I’m pleased to be able to pay a dividend to our shareholders; a small return after their many years of patience,” RBS’ chief executive Ross McEwan commented in the statement, adding that the payout marked “another important milestone in our turnaround, almost ten years to the day that RBS was rescued by the British taxpayer”.

Earlier this week, however, McEwan commented that it while the lender’ finances may now be fixed when it came to building levels of trust, there was still a long way to go.

RBS is scheduled to update investors on its third-quarter performance on October 26.

As of 14:01 BST, Friday, 12 October, Royal Bank of Scotland Group share price is 248.30p.

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