Shares in Royal Bank of Scotland (RBS) have risen towards the top of the FTSE 100 after the bank unveiled a bigger-than-expected dividend payout.

The shares jumped 2.4% to 247.3p, as the FTSE 100 rallied 55 points, or 0.8%, to 7,252.

RBS announced a 3.5p final dividend and a 7.5p special payout, well ahead of analysts' expectations.

Taken with October's 2p interim dividend, the bank's first in a decade, it represents a 13p annual payout.

That was fuelled by profits that more than doubled, to £1.6 billion in 2018, up from £752 million in 2017.

'The cash it has been able to generate has enabled the payment of a special dividend in addition to the standard payout, propelling the dividend yield to around 5%, and immediately switching its appeal from a growth to an income stock, said Richard Hunter, head of markets at Interactive Investor.

'Shareholders are being paid to wait, but it is unclear whether this will light any sort of fire under a share price which has declined 12% over the last year.'

Nearly £1 billion in dividends from RBS will go into the Treasury's coffers, given the government's 62% remaining stake in the bank following its bailout during the financial crisis.

'The real question is just how quickly the Treasury decides to sell down its stake,' said Neil Wilson at

'Philip Hammond may feel that selling the roughly £18 billion the government owns would be a nice little bonus for his Brexit war chest. The shares are worth half what the government paid for them, but needs must some times.'

Standard Life Aberdeen (SLA) fell to the bottom of the FTSE 100, down 6.4% at 232.7p on the fund group's discounted share placing.

On the FTSE 250, Plus500 (PLUSP) was a heavy faller, down 11.4% at 930p after The Times reported the sports betting firm may have misled investors about losses.

Shares in the business tumbled 31% on Tuesday after a profit warning.