RBS Pays $1.7 Billion to Scrap U.K. Treasury's Dividend Rights
- Lender makes payment to retire Britain's dividend access share
- Latest step toward RBS returning capital to shareholders
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Royal Bank of Scotland Group Plc and the U.K. government agreed to scrap the state’s rights to preferential dividends, paving the way for the bank to return capital to shareholders as early as next year.
The bank paid 1.2 billion pounds ($1.7 billion) to the Treasury to retire Britain’s so-called dividend access share, the Edinburgh-based lender said in a statement on Tuesday. The payment will reduce the bank’s tangible net asset value per share by about 10 pence in the first quarter and would have lowered its common equity Tier 1 capital ratio, a measure of financial strength, by about 50 basis points at the end of 2015.