UK authorities offload £1.26bn in NatWest shares

The UK government has sold £1.26bn worth of NatWest shares back to the bank, marking a reduction in the taxpayer’s stake in the high street bank. The government originally bailed out NatWest, then known as the Royal Bank of Scotland Group, with a near £46bn deal in 2008. The sale has lowered the government’s ownership from 41.4% to 38.6%. NatWest, with a market value of approximately £25bn, has agreed to repurchase around 469 million shares from HM Treasury at a price of 268.4p per share, which was the closing price on Friday.

NatWest Group Chief Executive Alison Rose described the transaction as a step towards achieving the bank’s strategic priorities and the path to privatization, as it brings government ownership below the 40% threshold. In a move to adapt to the recent banking turmoil and stabilize the lender’s shares, the government extended its plan to sell off its stake in NatWest by an additional two years. UK Government Investments (UKGI), responsible for managing the shares on behalf of the Treasury, announced that the strategic sell-off of the taxpayer’s shareholding will now continue until August 2025.

The initial plan, launched in mid-2021, aimed to gradually sell up to 15% of the shares back to the private market. However, due to market conditions and recent uncertainties, the timeframe was extended. UKGI and HM Treasury stated that they would consider other disposal options, such as accelerated bookbuilds, when market conditions are more favorable. The new timeline for divestment is double the duration it took for the government to sell its stake in Lloyds Banking Group, which acquired HBOS in a government-led rescue plan during the financial crisis and received a £20.3bn bailout. Lloyds completed the repurchase of its remaining shares from the government in 2017.