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RBS to seek authorisation for share buy backs from Treasury

By Alexander Bueso

Date: Thursday 17 Jan 2019

RBS to seek authorisation for share buy backs from Treasury

(Sharecast News) - RBS will ask shareholders for approval to deploy some of its excess capital for the repurchase of shares from the Treasury off-market.
The chairman's lender, Howard Davies, said the buybacks will make it easier for the company to return to private ownership.

"This resolution would provide the bank with the flexibility to use some of its excess capital to buy back Government shares at a time and price agreed with HM Treasury," Davies said.

"The Board believes that this is in the best interests of the bank and its shareholders by helping to facilitate the return of the company to full private ownership."

As of the third quarter of 2018, RBS's common equity Tier 1 capital ratio stood at 16.7%, versus a medium-term target of over 13%.

Subject to agreement with the Treasury, the RBS board proposed three options for conducting the buy backs: as part of a placement by the Treasury among various market participants, through direct purchases from the Treasury or via a so-called 'trading programme' conducted by a nominated broker.

Under the special resolution that would be presented at the General Meeting on 6 February, the cap for buy backs from the Treasury would be set at 4.99% of RBS's ordinary share capital.

At the then current share price, that would equate to a 70 basis point reduction in the lender's CET1 ratio.


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