Royal Bank of Scotland has reported its second successive year in the black and announced a £1.6 billion final dividend, resulting in a near £1 billion windfall for the taxpayer.
The lender, still 62.4% owned by the Government, saw bottom line profits more than double from £752 million last year to £1.62 billion, a 116% increase.
Full year pre-tax operating profit rose 50% to £3.4 billion.
It marks the bank’s second year in the black following a decade-long run of stinging losses, during a period marred by crisis-era legacy and conduct charges.
The Government will also pocket £977 million as RBS coughed up its second dividend since its £45 billion bailout a decade ago.
The cash will be given to UK Government Investments, which manages the taxpayer’s stake in the lender.
The bank on Friday paid out a 3.5p final dividend and a 7.5p special dividend, meaning the total returned to shareholders in the year amounts to £1.6 billion.
Chief executive Ross McEwan said: “This is a good performance in the face of economic and political uncertainty, with bottom line profits more than double what we achieved the previous year.
“We are also announcing an intention to pay back more capital to shareholders and almost £1 billion is set to be returned to UK taxpayers for 2018.
“With strong capital and liquidity levels, we are well positioned to support the UK economy. Our total lending to business and commercial customers reached over £100 billion at the end of 2018.”
RBS begun paying dividends since August, when it reached a 4.9 billion US dollar (£3.7 billion) settlement with US authorities over claims that it mis-sold mortgages in the run-up to the financial crisis.
Friday’s figures take into account conduct and litigation costs of £1.28 billion.
RBS’ annual report, published alongside the results, showed that Mr McEwan’s total pay package rose from £3.5 million to £3.6 million in 2018.
The bank also confirmed that it will dish out £335 million in bonuses to staff.
Accounts show that RBS stripped out £278 million in costs last year, and aims to slash another £300 million this year.
The stellar figures will prompt the Government to consider when to recommence the next round of share sales.
Last week the lender gained shareholder approval that allows it to buy back up to £1.5 billion worth of shares from the Treasury.
The move, which aims to speed up its privatisation and deploy excess capital, permits RBS to purchase up to 4.99% of the Government’s stake in any one year.
RBS has been majority taxpayer owned since 2008, when it received a £45 billion bailout at the height of the financial crisis.
The Treasury plans to sell its stake by 2024 but is expected to lose billions in the process.
The bank’s shares have rallied since December, but the company’s stock is trading at around 240p, a far cry from when it was bailed out at 502p per share.