Royal Bank of Scotland Group (LON:RBS) is planning to hold an extraordinary general meeting (EGM) to seek investor support for a move to buy back shares held by the government, The Sunday Times reported. The news comes after the lender, bailed out by the UK taxpayer during the financial crisis, recently restored its payout to shareholders.
RBS’ share price has climbed into positive territory this morning, having gained 0.48 percent to 242.45p as of 10:05 BST. The stock is marginally underperforming the benchmark FTSE 100 index which currently stands 0.81 percent higher at 7,492.79 points.
RBS plans extraordinary general meeting
The Sunday Times reported yesterday that RBS was planning to hold an EGM to win investor support for a share buyback aimed at reducing the government’s stake which currently stands at 62.4 percent. While the lender is expected to wait until after the Bank of England’s annual stress tests in November, it could announce the EGM early next year.
“I would imagine that it [an EGM] would be announced alongside full-year results at the end of February,” said Gary Greenwood, banking analyst at Shore Capital, as quoted by the newspaper. “That would be the most likely timing to announce the programme.”
A directed buyback which will see RBS purchase shares only from the government, would have to come in tandem with a placement by UKGI, the body which manages the taxpayer’s stake in the lender. The share sale would set the price, with the bank committed to buying at that same level.
Bank thought to be looking at special dividends
The Sunday Times further notes that RBS is also thought to be looking at special dividends to return more capital to investors. Last month, the group declared an interim ordinary dividend of two pence per share, to be paid on October 12, marking its first payout to shareholders since the financial crisis.