Full year pre-tax operating profits increased by half to £3.4billion. It marks RBS’ second year in the black following a decade-long run of crushing losses. The bank, which is 62 percent owned by the government, will pay £977million to the Treasury through dividend payments – its second dividend since its £45billion bailout at the hight of the financial crisis a decade ago.
The cash will be given to UK Government Investments, which manages the tapers’ stake in the lender.
On Friday, the bank paid out a 3.5p final dividend and a 7.5p special dividend, meaning the total returned to shareholders in the year totals £1.6billion.
RBS chief executive Ross McEwan said: “This is a good performance in the face of economic and political uncertainty, with bottom-line profits more than double what we achieved the previous year.
“We are also announcing an intention to pay back more capital to shareholders and almost £1 billion is set to be returned to UK taxpayers for 2018.”
“With strong capital and liquidity levels, we are well positioned to support the UK economy. Our total lending to business and commercial customers reached over £100 billion at the end of 2018.”
But in an interview with BBC Radio 4’s Today programme, Mr McEwan warned the uncertainty over Brexit was hitting business investment and urged politicians to quickly reach a conclusion.
He said: “What we are seeing already in the marketplace – and this has been happening over the last few quarters – is that larger businesses have been pausing on their investments in the UK,” Mr McEwan told BBC Radio 4’s Today programme.
“Over time, that does trickle down into small businesses who support those larger businesses and therefore into jobs and money that comes into this economy. We’ve certainly seen that.
“It’s time, I think, we got a result from this. We’ve got a very small period of time left to the end of March and it’s time that our politicians got to the conclusion so we can get some certainty going forward.
“The longer this drags on the harder it is for business to invest, and it does impact on everyday people in this economy. Resolution is required.”
RBS started paying dividends in August, when it reached a £4.9billion settlement with US authorities over claims it mis-sold mortgages in the run-up to the financial crisis.
Friday’s annual financial results also take into account conduct and litigation costs of £1.28billion.
RBS’ annual report, also published alongside the annual figures, revealed Mr McEwan’s pay package rose slightly from £3.5million to £3.6million.
The bank also confirmed it will pay £355million in bonuses to staff.
The accounts showed made cost savings of £278million last year, with aims to slash a further £300million in 2019.
This morning’s positive numbers will prompt the Government to consider when to start the next round of share sales.
Last week, RBS gained shareholder approval that allows it to buy back up to £1.5billion worth of shares from the Treasury.
The move aims to accelerate its privatisation and deploy capital, permitting the lander to buy up to 4.99 percent of the Government’s stake in one year.
The Treasury is planning to sell its stake in RBS by 2024.
Since December, RBS’ shares have recovered, but the lender’s stock is still only trading at around 240p – massively down when it was bailed out at 502p per share.