RBS (RBS) has agreed to pay £1.5B ($2.5B) to the U.K. government to end the sides' dividend access share arrangement, which has been in place since the bank's £45.8B bailout during the financial crisis and gives the Treasury priority over dividend payments.
The cancellation clears another obstacle to RBS's privatization and enables the bank to make its future dividend policy more clear. However, RBS has no plans to restart shareholder payouts in the near future.
Meanwhile, the EU has given RBS extra time to divest 315 branches that the bank has to sell as a condition of its bailout. RBS must start selling shares in the branches, re-branded as Williams & Glyn, by the end of 2016 and divest the whole interest a year later. RBS plans to float Williams & Glyn in an IPO.
RBS shares are +1.7% in London.