RBS fends off flak as Sir Philip Hampton vows to restore dividend ‘soon’

The loss experienced by shareholders is a matter of “profound regret” he said, “but all we can do is run the business as effectively as we can”.

RBS shares closed today at 20p, well below half the 50p paid by the UK government when it put up £45 billion to bail out the lender.

Hampton conceded: “I don’t believe that shareholders’ wealth is likely to be restored in my lifetime.”

Shareholders arriving for the meeting at RBS’s Gogarburn headquarters near Edinburgh were faced by protests against the selling of complex interest rate swap products to small businesses taking out loans with the bank. One investor said the issue was comparable to the mis-selling of payment protection insurance, which has so far cost the group £1.2bn.

However, Hampton described the swaps as “simple risk-management products” and said 67 cases have so far been referred to the Financial Ombudsman Service, of which 66 have been decided in favour of the bank.

During an often heated meeting, one employee and shareholder said more than 28,000 members of staff will get no pay rise this year, while executives received bumper pay rises.

To applause from the 180-strong audience, she said: “It feels to me and my colleagues that RBS has little respect for us. This is no way for a respectable organisation to conduct itself.”

Hampton replied: “I have a lot of sympathy with some of the criticisms that are made about excessive top levels of executive pay, in the City particularly. But I can only tell you that our own pay levels tend to be at the lowest end of that particular spectrum.”

Shareholder group Pirc had urged its members to vote against “excessive pay” at the bank, despite chief executive Stephen Hester waiving his £963,000 annual bonus for 2011.

Some 99.3 per cent of shareholder votes went in favour of its remuneration report, although this includes UK Financial Investments (UKFI), which manages the taxpayers’ 82 per cent stake. All other resolutions passed with near-unanimous approval, including its share consolidation plans, which will see investors receive one new share in place of every ten shares they hold.

Asked by one shareholder for a timescale for the resumption of dividend payments, Hampton said: “I can give you a date, which is as soon as possible.

“That is our top priority. It would also help the government in terms of selling their shares as well. There is complete alignment between our aspirations and those of shareholders.”

The issue of independence was also raised, with one investor asking whether RBS would have to relocate if Scotland broke away from the rest of the UK.

Hampton said the bank was keeping track of the independence debate, but not enough details were known to provide a definitive answer.

“There is a link between the perceived strength of an institution and its domicile, which is why large institutions tend to be in large economies,” he said.

“The nature of any changes in Scotland is unclear, and this is a ball that has a lot of rolling to do. We are a Scottish company and we have no plans to be anything other than a Scottish company.”

• Read the RBS chairman’s speech in full (PDF)