RBS to pay its first dividend in a decade

Royal Bank of Scotland has seen first-half profits fall, but is on course to pay its first dividend in 10 years.

The bank said it would be paying 2p a share as an interim dividend as soon as its $4.9bn (£3.8bn) settlement with the US Department of Justice over mortgage-backed securities was completed.

The cost of the settlement meant that RBS banked lower profits for the January-to-June period than in 2017.

Attributable profit was £888m, compared with £939m in 2017. RBS booked a £1bn charge to deal with the settlement with US regulators, which was agreed in May. It relates to RBS’s mis-selling of the securities in the run-up to the financial crisis.

The bank had already put aside money to cover the rest of the cost.

It said it expected the deal with the Department of Justice to be finalised within months, paving the way for the dividend to be paid out.

RBS was bailed out by the government at the height of the financial crisis and is still about 62% publicly owned.

Last month, the government lost £2.1bn after selling a tranche of RBS sharesat 271p each, almost half the 502p a share it paid for them in 2008.

Announcing the half-year results, RBS chief executive Ross McEwan said the bank was pleased with its progress, although the environment was uncertain and highly competitive.

He added: “We still have a lot more to do to achieve our ambition of being the best bank for customers in the UK and Republic of Ireland.

“However, with our major legacy issues largely behind us, we are able to fully focus on closing this gap.”