Home Financial News RBS : inline for GBP1 billion dividend ahead of insurance float

RBS : inline for GBP1 billion dividend ahead of insurance float

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According to the Sunday Telegraph, the Royal Bank of Scotland Group is to receive a dividend of as much as GBP1 billion ahead of the flotation of its insurance arm late next year.

The high street banks, which is 83%-owned by the British taxpayer, is to receive a windfall of between GBP500 million and GBP1 billion from RBS Insurance, or RBSI, the owner of Direct Line and Churchill, the paper quotes divisional head Paul Geddes as saying during the presentation.

RBSI is held on RBS’s books with a value of GBP4.3 billion. It quoted Geddes as saying RBSI would look at the possibility of talking on hybrid capital prior to divestment. Hybrid capital is essentially a form of debt substituted fir equity and can include preference shares that can be used to strengthen an company’s capital ratio.

London, October 09, 2011 (Dow Jones)

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