UK government sells £1.26bn of NatWest shares

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

The UK government is selling £1.26bn of its stake in NatWest, reducing its ownership of the lender it bailed out in 2008 to less than 40%.

The sale, announced on Monday, will reduce the government’s stake in the bank to 38.6%, down from 41.4%.

“Today’s sale is another important milestone in NatWest’s return to full private ownership, as promised,” City Secretary Andrew Griffith said. “The government has now sold well over half its stake.”

The shares will be sold to Nat West at Friday’s closing price of 268.4 pence, well below the 502 pence the government paid in 2008 for the £46bn bailout of the lender then known as RBS. At its peak, the government owned 84% of the bank, one of the big four lenders.

Alison Rose, group chief executive, said: “This transaction reduces government ownership to below 40% and demonstrates positive progress on the bank’s strategic priorities and path to privatisation.”

In April, UK Government Investments, which manages the stake on behalf of the government, said it would extend by two years the deadline of its “commercial plan”, which allows the government to gradually sell its stake at market prices, until It’s August 11, 2025. .

The Treasury still intends to fully exit its stake by 2025-26, “subject to market conditions and the achievement of value for money for taxpayers.”

NatWest has a total market capitalization of approximately £25 billion. Since 2013, the stock has averaged barely traded half the average price of the bailout, partly a reflection of its move from a global player and part of a consortium that bought Dutch lender ABN Amro in 2007 to a UK bank focused primarily on the domestic market.

Shares were stable at 270.30p on Monday morning and have held steady for the past six months.

NatWest has posted better-than-expected profits in recent quarters, benefiting from the Bank of England’s efforts to beat inflation by pushing up interest rates, although customer deposit outflows in the first quarter disappointed analysts.

As with other lenders, its share price was impacted by uncertainty in the markets resulting from the collapse of Silicon Valley Bank and other smaller US lenders, as well as the emergency takeover of Credit Suisse by rival UBS.

“One would have hoped the share price would have been even stronger, but that’s how banks are valued at the moment,” NatWest chairman Howard Davies said. he told the FT in April.

He will leave the bank by the middle of next year before reaching a nine-year mandate, the maximum recommended length of time for the role under the UK’s corporate governance code.