RBS just lost an obscene amount of money because it wanted to start paying dividends again

The Dark Knight the Movie

The Royal Bank of Scotland just posted a horrific set of results.

And the main reason for why it lost a lot of money is because it had to pay for the right to start paying dividends to shareholders again.

The 73% state-owned bank said in a results statement that its losses nearly doubled to £968 million in the first quarter this year, compared to £459 million last year. It overshot analysts’ expectations of £957 million.

Income also fell to £3 billion, from £3.5 billion the previous year.

This is because it forked out £1.2 billion to the UK Treasury in order for it to remove a block over paying dividends — money to shareholders out of its profits or reserves.

Around seven years ago, RBS had to beg the government for a bailout. Over 2008 and 2009 it borrowed £45.4 billion ($70.1 billion), worth 500p per share, from the taxpayer and it has yet to pay it back. As part of the deal, it would stop paying dividends.

So it decided to spend a lot of money and turn a huge loss in its first quarter so it could start giving stockholders a reward. But it seems unlikely shareholders will get a payment any time soon.

Late on Thursday, RBS said it is likely to miss the European deadline to sell off its challenger bank Williams & Glyn by the end of 2017. Under the terms of its deal with the EU, RBS has to hive off W&G, just like Lloyds did with the sale of retail unit TSB.

On top of that, it warned that it will be spending a lot more than an originally planned £1.7 billion on upgrading its technology. In 2013, millions of customers were left unable to pay for goods and services or receive funds into their accounts, in the run-up to Christmas that year, due to a massive IT glitch.

Meanwhile, the costs for restructuring the bank — under a plan which CEO Ross McEwan launched last year in February — has grown to £238 million. It has also set aside another £31 million in litigation and conduct expenses.