NatWest has taken another significant step towards full privatisation as the government’s stake in the bank falls to 11.4% after NatWest bought back £1 billion of its shares. The taxpayer-backed lender purchased 263 million shares from the government at a price of 380.8p each, leading to a reduction in the government’s stake from 14.81% to around 11.4%, as of the end of October.
This move marks a crucial milestone in NatWest’s journey towards complete privatisation. The bank has now repurchased a total of £2.2 billion of state-owned shares this year through two rounds of buybacks. Along with the ongoing share sales by the Treasury, this initiative has significantly decreased the government’s stake by more than two-thirds since December last year, when it stood at 38%.
Paul Thwaite, the chief executive of NatWest Group, expressed that this transaction signifies an important achievement in the bank’s path to full privatisation. He stated, “We believe it is a positive use of capital for the bank and for our shareholders, and we are pleased with the sustained momentum in reducing HM Treasury’s stake in NatWest Group throughout this year.”
NatWest, formerly known as Royal Bank of Scotland, received substantial bailouts during the financial crisis of 2008 and 2009, leading to the government owning an 84% stake in the bank. However, the Treasury has been progressively selling off its stake in the lender, including Coutts, with the aim of returning the bank to private ownership. In March, the stake dropped below 30%, marking the government no longer as a controlling shareholder in the bank.
The accelerated share sale plan has been made possible due to changes in listing rules that removed the 5% cap on the amount of stock that could be repurchased in a year. Following the election in July, Labour abandoned previous Conservative plans for a public share sale, indicating a shift in strategy for the bank’s future ownership.
The recent developments at NatWest have garnered significant interest in the financial sector, as the bank’s trajectory towards full privatisation gathers pace. With the government’s stake now reduced to 11.4%, the bank is poised to achieve complete independence from state ownership.
As NatWest continues on its privatisation journey, stakeholders and investors are closely monitoring the bank’s progress and the implications of these buybacks on its overall financial stability and strategic direction. The successful reduction in the government’s stake reflects a positive outlook for NatWest as it moves closer towards complete privatisation in the coming months.