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- Sale of more than 262 million common shares marks second transaction this year
The Government has agreed to the £1bn sale of a proportion of the taxpayer’s stake in NatWest, as the lender resumes its journey back to full privatisation.
NatWest will buy back more than 262 million ordinary shares for cancellation at a price of 380.8 pence each, cutting the Government’s stake from 14.2 to about 11.4 per cent.
It is the first sale of NatWest shares held by the Treasury since the general election. The Government’s stake fell below 30 per cent for the first time in March, meaning it is no longer a “majority shareholder”.
NatWest to be fully privatized in financial year 2025-26
Natwest came under public control in 2008, when the Government was forced to inject a total of £45.5bn into the affected lender, then Royal Bank of Scotland, during the height of the financial crisis.
It ended up having an 84 per cent stake in NatWest after the hefty taxpayer bailout.
Since then, the Government has steadily unwound its stake in the bank.
But the sales have come at a loss: the Treasury initially bailed out the bank at about £5 a share.
NatWest shares They have almost doubled over the last year, driven by a rising tide of higher interest rates, and closed at 386.5p on Friday.
Under the leadership of former chief executive Alison Rose, the bank – which includes the Royal Bank of Scotland, NatWest, Coutts and Ulster Bank brands – dropped the RBS group name in a bid to break with its crisis-plagued past.
But Rose was forced to resign in the wake of the Nigel Farage “debanking” scandal, and NatWest appointed Paul Thwaite as interim boss. He has since been assigned the job permanently.
Former chancellor Jeremy Hunt had lined up M&C Saatchi to launch an 1980s-style advertising campaign, ‘Tell Sid’, to boost investment in the London stock market.
His spring budget plans to sell the Government’s entire remaining stake to retail investors later this summer were canceled in response to the impending general election.
Labor chancellor Rachel Reeves scrapped the plans in July, saying they “would not represent good value for money”, but has recommitted to plans to return NatWest to full private ownership by the 2025-26 financial year.
Thwaite said Monday that the latest share buyback “represents another important milestone on the path to full privatization.”
He added: “We believe this is a positive use of capital for the bank and our shareholders and we are pleased with the sustained momentum in reducing HM Treasury’s stake in NatWest Group throughout this year.”
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