ROYAL Bank of Scotland is gearing up to return around £150 million to taxpayers by way of a 2p interim dividend although its chief executive has warned that Brexit could hamper its ability to adopt its planned progressive dividend policy.

Although pre-tax profits at the bank fell by 10 per cent in the first six months of the year, from £2 billion in the first half of 2017 to £1.8bn, RBS chief executive Ross McEwan said due to the organisation’s strong capital position the intention is to declare an interim dividend of 2p per share for the first six months of the year.

The payment is dependent on the bank agreeing a final settlement with the US Department of Justice over the historical mis-selling of financial products, but if it goes ahead it will see the bank pay out a total of £241m for the first half of this year.

The UK Government, which bailed out RBS to the tune of £45.5 billion at the height of the financial crisis, holds 62% of the bank’s shares, meaning it is in line for £149m of that sum.

While the figure is tiny in comparison to the amount that RBS received from the taxpayer in 2008, Mr McEwan said the intention is to build the bank’s dividend over time to reach a payout ratio of 40%.

“The intention has always been to get capital back into the hands of shareholders when we don’t need it,” he said.

“We’re running into a more uncertain time with Brexit, which we would want to look at before we started making more major capital distributions, but we are signalling that we want to get capital back into the hands of shareholders.”

The intention is for the dividend to be paid in October, with Mr McEwan noting that the only condition on making a formal declaration is reaching a final settlement with the DoJ.

“[The settlement] needs to be papered,” he said. “I don’t anticipate any change to it other than we have to sign the agreement when it gets here.”

In May RBS agreed to pay a fine of £3.7bn to the DoJ, with the bulk of that sum - £2.7bn - already provided for. During the period under review the bank set aside a further £1bn to cover the cost of the settlement.

The last time RBS paid a dividend was May 2008, when its final payment for the 2006/07 year was 23.1p. The bank was bailed out in November of that year, with the Government paying an average of 502p per share for the majority of the bank’s equity.

The Government began selling down its position last year, receiving £2.1bn for 630 million shares priced at 330p. In June it sold a further 925 million shares at 271p, meaning it has so far made a loss of £3.2bn on its investment in RBS.

Looking at the bank’s performance across the first half, Mr McEwan said he was pleased with its progress, adding that he felt the results “demonstrate the investment case for this bank”.

“This is a good performance given the uncertain operating environment and competitive market,” he added.

There was little change in the book of business the bank earns interest on during the period, with loans and advances to customers falling from £323.2bn at the end of December 2017 to £320bn at the end of June.

Balances it pays interest on, meanwhile, dropped slightly, with the total value of customer deposits falling from £367bn to £366.3bn.

After paying out interest on deposits, the bank made a net income from interest of £4.3bn, which was down 4% on the £4.5bn it received in the same period last year.

In terms of payment protection insurance, while RBS expects to receive a further 371,000 claims before the Government’s August 2019 cut-off date, it did not set aside any additional cash to cover that cost in the first half.

Of the £5.1bn it has provided since 2011, £4.4bn had been used by the end of June, with £400m of the total going on administrative expenses.