A notice on Friday confirmed that the Government’s shareholding in the bank has fallen by about 3.5 percentage points to 22.5%.
The UK Government has boosted the privatisation process of high street bank NatWest by selling off £1.24 billion worth of shares.
The stake held by the Government in the bank has fallen around 3.5 percentage points, currently standing at 22.5%, as confirmed on Friday. Back in 2008 and 2009, during the financial crisis, NatWest, formerly known as Royal Bank of Scotland, received many huge bailouts, resulting in an 84% government stake.
However, the Treasury has been progressively reducing its share in the banking establishment which also owns Coutts. Recently, the privatisation process has picked up pace under Chancellor Jeremy Hunt who reiterated plans to fully disinvest from the bank by 2025 or 2026 in his Spring Budget.
While a public share sale was initially planned for this summer aiming to foster a “new generation of retail investors”, it has been pushed aside due to the forthcoming General Election. A representative from the Treasury declared: “A retail offer will not happen during the election period.”
Prior to this, share blocks were sold exclusively to institutional investors; the plan this summer would have marked the first time NatWest stocks were available to individual investors. Amidst these plans, the General Election is slated to take place on July 4 with Parliament being recalled to sit again on Tuesday July 9.
During the most recent sell-off, NatWest bought back over 392 million shares off-market at their Thursday’s closing price of 316.2p per share. Paul Thwaite, chief executive of NatWest Group, has announced: “This transaction represents another important milestone for NatWest Group, building on recent momentum in the reduction of HM Treasury’s stake in the bank.”
He added, “We believe it is a positive use of capital for the bank and for our shareholders and represents further progress against the ambition to return NatWest Group to full private ownership. Our focus remains on delivering for our customers which will, in turn, deliver for our shareholders and the UK economy.”
Back in 2018, the Government had a 62% share of the group, but by December that number had dropped to 37.98%. By March, the stake dipped below 30%, meaning the Government no longer holds a controlling interest in the bank. Earlier in the year, NatWest reached out to its shareholders for approval to increase the cap on stock buybacks from the Government within a year, from just under 5% to 15%.
