RBS ensures it gets a £1bn dividend

Royal Bank of Scotland is in line for a windfall dividend of up to £1 billion following the planned flotation of the insurance unit in the second half of next year.

The RBSI arm plans to pay its parent group a dividend of between £500 million and £1bn before the initial public offering, funded in part by hybrid debt issuance, its finance director John Reizenstein said yesterday in a presentation to analysts.

RBSI, which trades under the Direct Line and Churchill brands, is being spun out to appease European regulators.