RBS boss urges UK central bank to lift dividend ban

Royal Bank of Scotland chairman Howard Davies on Friday urged the Bank of England, the UK’s central bank, to lift the current ban on bank dividends by the autumn to make UK lenders attractive to investors once again. 

Reuters reported that Davies told a City & Financial webinar: “It’s probably fair to say the banking sector is not investible because when people try to do the models about what banks are worth they can’t plug in any numbers for cash out.”

Davies said UK banks, forced in March to scrap dividends and buybacks until the end of 2020, could not suspend payouts indefinitely. 

RBS — which will soon change its name to NatWest — was rescued in a £45.5 billion bailout in 2008 by the UK government, which still owns 62.4% of the bank.

The Bank of England was not immediately available for comment. 

UK banks have lent more than £40 billion of state-backed funds to struggling businesses during the crisis, but are now bracing for an expected wave of defaults.

“We can see clouds gathering on the horizon, but it hasn’t yet started to pour down with rain, but I think we know that it’s going to, and that’s going to be a very difficult period for us,” Davies said.