2nd May 2014 19:52
LONDON (Alliance News) - The Royal Bank Of Scotland Group PLC Friday said that it has raised GBP100 million gross from the sale of new shares to the market as it continues to partially neutralise the effects on capital of making payments on certain capital instruments.
In a statement, RBS said it sold 32.8 million new shares at 305.3288 pence per new share. The new shares being issued represent an increase of about 0.5% in RBS's current issued shares.
The bank said the new shares, which are expected to be admitted to trading on May 9, are being issued to partly neutralise the impact of 2014 coupon payments on discretionary hybrid capital from a Core Tier 1 capital perspective.
Alongside 2013 earnings in February RBS said it expected to issue GBP300.0 million of new equity over the course of 2014 to partially neutralise the effects of the hybrid capital instruments.
As part of the agreement to receive state aid in 2009, RBS had agreed not to pay discretionary coupons and dividends on its existing hybrid capital instruments for two years, beginning at different times for different parts of the bank.
But the bank has since resumed payments on all discretionary non-equity capital instruments following the end of the European Commission ban in 2012 for the group and in 2013 for RBS N.V.
RBS said earlier Friday that its first-quarter pretax profit increased to GBP1.64 billion from GBP826.0 million in the corresponding quarter a year earlier.
It reported a 9.4% common equity tier 1 ratio at the end of March, up from 8.6% at the end of 2013.
The bank said it remains "well on track" to achieve its target common equity tier 1 ratio of 11% by the end of 2015 and 12% or higher by the end of 2016.
RBS Shares closed 9.5% higher Friday at 335.84 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty; additional reporting by Samuel Agini; [email protected]; @samuelagini
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