Updated March 4 at 7:04pm

RBS reaches agreement with U.K. to end dividend access share

Royal Bank of Scotland Group PLC, Britain’s biggest government-owned lender, reached an agreement to end the U.K. Treasury’s dividend access share, bringing the company a step closer to paying dividends. More

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RBS reaches agreement with U.K. to end dividend access share

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NEW YORK – Royal Bank of Scotland Group PLC, Britain’s biggest government-owned lender, reached an agreement to end the U.K. Treasury’s dividend access share, bringing the company a step closer to paying dividends.

“The DAS retirement agreement sets out the process for removal of the DAS – a key element of the government’s 2009 capital injection into RBS,” the Edinburgh-based company said in a statement. “The retirement of the DAS will in future allow the board of RBS to state more clearly a dividend policy to existing and potential investors.”

The British government, which owns 80 percent of RBS, has been pushing the lender to focus on U.K. consumer and corporate banking as it tries to recoup some of the 45.5 billion pounds ($76.1 billion) spent bailing out the company five years ago.

By providing a clearer route to resuming dividends, the agreement will “increase the appeal of RBS’s ordinary shares to a wider range of equity investors and may expedite” the timeline for the Treasury to reduce its stake in the bank, RBS said in the statement.

RBS faces a tougher challenge selling its U.S. subsidiary after the unit failed the Federal Reserve’s stress test last month. RBS Citizens Financial Group Inc., based in Providence, was one of three U.S. units of foreign banks whose capital plan was rejected by the Fed.

RBS has said it would be open to takeover offers for its U.S. unit even as it prepares the division for an initial public offering this year. The bank’s options may be limited now that the Fed has found flaws in its internal processes, something that has held up other U.S. bank deals.

Royal Bank of Scotland Group, U.K. Treasury, corporate banking, dividend access share, RBS Citizens Financial Group, Federal Reserve, Citizens IPO, Citizens Fed stress test,

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