RBS hopeful on divi after cash call

14.05.2008

Royal Bank of Scotland should be able to afford a dividend equal to 45% of earnings going forward, chairman Tom McKillop told shareholders at the meeting to vote on its proposed record £12bn rights issue.

"While the board must take each dividend decision in the light of the circumstances prevailing at the time, we would expect in future years to continue to pay approximately that proportion of the group's earnings as dividends," McKillop said.

RBS needed the huge cash injection to repair its balance sheet after big write-downs on sub-prime investments taken on by both itself and recent acquisition ABN Amro.

McKillop said that deal had built a platform "with all the attributes necessary to achieve good, sustainable growth".

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