RBS could start paying dividends to preference shareholders again later this year, which could lead to £400m capital raising, a report has suggested.
The bank, which is mostly state owned, would need to get approval from both the government and the Financial Services Authority to make the pay outs. The Telegraph reports negotiations will begin this week.
The report said the watchdog has pushed RBS to raise capital levels and ensure it preserves its financial strength - over paying out through dividends and bonuses.
It added European Union state aid rules have barred RBS from paying dividends for the past two years, but that ban is lifted at the end of this month.
Due to leave 31 May
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