The Royal Bank of Scotland said Wednesday that it will pay 1.5 billion pounds ($2.52 billion) to end an agreement with the British government, in a move that will help clear the way for the bank to be privatized.
The British government rescued the bank during the financial crisis, leaving it 81 per cent owned by taxpayers. RBS has been working toward becoming privatized by the middle of 2014.
RBS said it will cancel the dividend access share arrangement, which entitled the government to certain dividend payments. This allows the bank to streamline its dividend policy and makes it more attractive to investors.
Ross McEwan, RBS Group’s chief executive, said the agreement is a vote of confidence in rebuilding the company.
The agreement must be approved by RBS shareholders.