Shareholders in what was NatWest, before the clearing bank was taken over by Royal Bank of Scotland nearly four years ago, are to receive an unexpected £1.5bn windfall this week.
RBS is to pay investors 55p for every NatWest share they owned as a signal of the success of the £21bn takeover.
The Scottish bank had agreed to the payment in its original offer document, but said that it was conditional on the successful integration of NatWest, which was more than twice the size of RBS at the time.
However, under Fred Goodwin, RBS's steely chief executive, a ruthless integration of NatWest has been pursued, eliminating 21,000 jobs and delivering returns that have made RBS one of the City's favourite banking stocks.
Mr Goodwin has continued to make acquisitions using the cash that has been generated from NatWest. In the past year the bank has spent more than £3.4bn on deals, the largest being Churchill Insurance. It also wants to buy a bank in the north east of the US, to graft on to its Citizens Financial business in New England, and has been in talks with Sovereign Bancorp of Pennsylvania, which is valued at around $7.5bn (£4.4bn).
RBS signalled its interest in Sovereign in August when Mr Goodwin said: "We've got the radar screen on ... for anyone that might be for sale in our area of the US. Sovereign sits right in the middle of it."
Mr Goodwin also hinted that RBS might buy back some of its shares, with the £4bn of cash the group is generating each year, if it does not conclude a deal.
"We are committed to tight capital ratios and do not want to build up a war chest," he said. "History has been very unkind to companies who have done that."Reuse content