RBS pays a dividend, but has it paid for its sins?

The announcement of the first payout for a decade comes just a couple of days after the Financial Conduct Authority strafed the bank over the activities of its Global Restructuring Group

RBS is provisionally paying a dividend again (PA)

Attention Royal Bank of Scotland shareholders! It’s payback time! At last! So have tuppence on us. For each one of your holdings. Provisionally.

Yes, after a lost decade of loss making misery, RBS wants to show it is at long last a normal bank that makes profits and pays them out to its shareholders. Provisionally.

The qualification comes in because the divvy is dependent on the confirmation of a $4.9bn (£3.8bn) settlement with the US Department of Justice over the sale of dodgy mortgage backed securities in the run up to the financial crisis.

There were some analysts who felt this might lead to the payment being delayed to the full rather than the half year stage, when there should be no need for any doubt.

But the bank had a powerful motivation to get moving early.

It made the announcement just a couple of days after the Financial Conduct Authority strafed it over the behaviour of its Global Restructuring Group, that had the job of dealing with distressed borrowers before being shut down.

You may recall that the watchdog said it lacked the power to impose any penalties, commercial lending being an unregulated activity, but nonetheless felt that RBS had behaved in a manner that fell a long way short of its expectations.

Announcing a dividend provides a marvellous opportunity to blow away the negative narrative that has hung around like a bad smell ever since the FCA cast its judgement.

Let’s all move on! Into the future!

The results unveiled alongside the news of the provisional payout provided more grist to that mill.

RBS made an “attributable” profit, even after all the nasties banks like to describe as exceptionals or one offs were taken off the top, when many analysts had expected a loss. Revenues rolled in, costs were contained. Yesterday’s Bank of England interest rate rise should make the bank’s life easier (although Brexit will do the reverse) because higher rates make for better margins.

The City reaction was largely positive. The shares got a nice bump. CEO Ross McEwan spoke bullishly.

The Treasury will certainly now take the opportunity to sell more of the state’s 62 per cent stake, even though it doesn’t need to and will crystalise a thumping loss in so doing.

Let’s move on! Into the future!

No let’s not. As well as paying shareholders, RBS has set up a compensation scheme for those hurt by the GRG affair.

I’ve spoken to some of them. The pain they feel is still raw, which shouldn’t surprise anyone given how personal it gets with business owners.

Banks will tell you that they sometimes have to play the bad guy and pull the plug, and that’s true. The trouble with GRG is it went beyond that. It became a villain and its villainous activities extended into the brave new world after the state had used taxpayers money to bail RBS out.

It will be time to move on only after it has definitively proved that it can pay back not just its shareholders for their faith, but those whose faith was obliterated by the hurt it caused.