Thursday 20 September 2018 7:01 pm

RBS in talks with the Bank of England over share buyback plans

The Royal Bank of Scotland has started discussions with the Bank of England over a special share buyback in a bid to speed up the privatisation process.

Speaking at a conference in New York RBS deputy chief financial officer Katie Murray confirmed that the bank is in talks with the Prudential Regulation Authority (PRA) over the details of buying back its own shares.

Murray, who will become interim chief financial officer at the beginning of next month, told investors: "Now, we've spoken very publicly about our desire to do some directed buybacks.

"A directed buyback is not as common a transaction in the UK as it is, I understand, over here in the States.

"And so, we are in the process of working through, with the PRA, how we might do that, what's the timing of that."

The bank will call an extraordinary general meeting to get permission from investors to do directed buybacks at an unspecified date.

However, no action will be taken on the buyback proposals until after the results of a Bank of England stress test are received, which is scheduled for 5 December.

Murray told investors to "temper enthusiasm" and said: “We’re in a good position, but we need to get through that as well. So, it will come, but it will take us a little bit of time.”

RBS chairman Howard Davies told Bloomberg last week that the bank could pay a special dividend but buybacks are more likely if the stress test reveals there is surplus capital to return to shareholders.