23rd Jun 2015 13:31
LONDON (Alliance News) - Royal Bank of Scotland Group PLC is on track to deliver against its targets for 2015, Chief Executive Ross McEwan said on Tuesday, as he reiterated his intention to return future surplus capital to shareholders.
McEwan, who is turning the state-backed lender into a retail bank focused on lending in the UK and Ireland, expects his strategy to result in a "substantial" increase in the group's capital levels as he cuts risky assets and divests of other parts of the business.
Speaking at the banking group's annual meeting of shareholders, McEwan stuck to his goal of returning capital held over and above the group's targeted 13% core equity tier 1 ratio.
Before being in a position to return surplus capital to shareholders, RBS must pay a further GBP1.18 billion to retire the dividend access share, which was issued to the government in 2009 as part of the bank's GBP45.5 billion bailout. It has already paid GBP320 million towards that end. Chancellor George Osborne has revealed plans to begin selling down the government's 80% stake at a loss, as he looks to commence the lender's slow return to full private ownership.
McEwan said the group needs to shrink its investment bank, which will no longer operate as a standalone entity under his plans, and deal with a range of misconduct and litigation issues on its was to becoming "the number one UK bank for customers".
"We are now in a position where we can accelerate our strategy while taking clear actions to address areas where returns are not sustainable. As a result, the wind down of our exit bank will be substantially achieved by the end of 2016," McEwan told shareholders.
RBS shares were up 0.8% at 357.70 pence on Tuesday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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