Government cuts NatWest stake to 11.4% with £1bn share sale

The Government has agreed the £1billion 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 262million ordinary shares for cancellation at a price of 380.8p each, slashing the Government’s stake from 14.2 to approximately 11.4 per cent.

It marks the first sale of Treasury-held NatWest shares 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 ‘controlling shareholder’.

Natwest was taken into public control in 2008 when the Government was forced to injected a total of £45.5billion into the stricken lender, then Royal Bank of Scotland, during the height of the financial crisis.

It ended up holding an 84 per cent stake in NatWest after the hefty taxpayer bailout.

Since then, the Government has steadily been unwinding its stake in the bank.

But sales have come at a loss, with the Treasury having initially bailed out the bank at around £5 a share. 

NatWest shares have almost doubled over the last year, lifted by a rising tide of higher interest rates, and closed at 386.5p on Friday. 

Under the leadership of former chief executive of Alison Rose, the bank – which includes the Royal Bank of Scotland, NatWest, Coutts and Ulster Bank brands – ditched the RBS group name in an attempt to break with its crisis-ridden past.

But Rose was forced to quit in the wake of the Nigel Farage ‘debanking’ scandal, with NatWest naming Paul Thwaite as interim boss. He has since been given the job permanently.

Former Chancellor Jeremy Hunt had lined up M&C Saatchi to launch a 1980s-style ‘Tell Sid’ advertising campaign to boost investment in London’s stock market.

His Spring Budget plans to sell the Government’s entire remaining stake to retail investors later this summer were called off in response to a looming General Election.

Labour Chancellor Rachel Reeves scrapped the plans in July, claiming it would ‘not represent value for money’, but has recommitted to plans to return NatWest to full private ownership by the 2025-26 financial year.

Thwaite said on Monday the latest repurchase of shares ‘represents another important milestone on the path to full privatisation’.

He added: ‘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.’

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