RBS moves closer to UK government stake sale

Thu Feb 28, 2013 7:30am EST
 
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By Matt Scuffham and Steve Slater

LONDON (Reuters) - Royal Bank of Scotland RBS.L has reported its strongest underlying profit since the financial crisis, potentially paving the way for Britain to sell its 82 percent stake if some big hurdles are overcome.

The bank had to be rescued in a 45.5 billion pound ($68.9 billion) state bailout during 2008 but the government has begun looking at ways to sell off its holding as RBS starts to return to financial health.

"The light at the end of the tunnel is coming closer," Chief Executive Stephen Hester said on Thursday. "Our job is to deliver a company that is doing its job well and that other investors will want to invest in."

RBS made an operating profit of 3.5 billion pounds ($5.2 billion) last year, up from 1.8 billion the year before and the highest since its 2008 bailout.

The bank paid out 607 million pounds in bonuses for 2012, down 23 percent from 2011.

RBS has cut about 302 million pounds from bonuses, clawed back from past awards or to be cut from future payments to account for behavior related to the rigging of interest rates, for which the bank was fined $612 million.

Bankers in Europe will have bonuses capped in future after agreement in Brussels on pay limits to try to curb financial sector excess.

FURTHER SHRINKAGE   Continued...

 
People walk past a Royal Bank of Scotland office in London February 6, 2013. REUTERS/Neil Hall