RBS planning payment to end government dividend priority -CFO

LONDON, Oct (HKSE: 3366-OL.HK - news) 30 (Reuters) - Royal Bank of Scotland (LSE: RBS.L - news) is planning to make a final payment to Britain's finance ministry to cancel an arrangement that gives the government priority over dividends after selling its U.S (Other OTC: UBGXF - news) . business Citizens (NYSE: CIA - news) , CFO Ewen Stevenson told reporters.

The sale of RBS's remaining shares in Citizens, announced on Thursday, will help free up funds for the bank to make the payment, Stevenson said.

RBS must pay the Treasury a further 1.2 billion pounds ($1.8 billion) to terminate the dividend access share (DAS (Other OTC: DASX - news) ), which was put in place after its 45.8 billion pound government rescue during the 2007-09 financial crisis.

"Given the full exit of Citizens, I think we've now got ourselves into a capital position where we can start to more actively think about repaying that," Stevenson told reporters.

($1 = 0.6520 pounds) (Reporting by Matt Scuffham, editing by Sinead Cruise)