Landmark share sale: government no longer majority owner of NatWest
It may have taken the best part of 15 years, but the recent £1.2 billion share sale sees the Government stake in NatWest Group reduced to below 50%. This is the first time since the financial crisis that brought the global banking industry to its knees.
More shares in private than public sector
For the first time since the financial crisis, NatWest Group plc (formerly named The Royal Bank of Scotland Group plc) is no longer under majority public ownership. This follows the share sale of part of the government’s shareholding back to NatWest.
This is the government’s fifth sale of its NatWest shareholding, bringing its level of ownership down from 50.6% to 48.1%. This is a landmark in the government’s plan to return the banking institutions brought into public ownership as a result of the 2007-2008 financial crisis back to private ownership.
The Economic Secretary to the Treasury, John Glen said:
“This sale means that the government is no longer the majority owner of NatWest Group and is therefore an important landmark in our plan to return the bank to the private sector. We will continue to prioritise delivering value for money for the taxpayer as we take forward this plan.”
The Economic Secretary to the Treasury authorised the sale of approximately 550 million shares in NatWest at 220.5p per share, raising a total of £1.2 billion. The shares were bought back by NatWest and the process was managed by UK Government Investments.
A taxpayer owned bank
The taxpayer stake has been slowly reduced from 79% in 2015. This was when the then chancellor, George Osborne, launched the first disposal of shares at a loss of more than £1bn to the public. It comes despite pressure from campaigners to use public ownership of NatWest to create a network of state-owned regional banks.
Analysts expect NatWest to be fully returned to private ownership by 2025, almost two decades on from its effective nationalisation. Russ Mould, the investment director at the stockbroker AJ Bell, said: “the bank will likely be pleased as it marks another step in the long rehabilitation of the group from the financial crisis.”
Please refer to the UKGI RNS announcement Disposal of Shares in NatWest Group for £1.2 billion – 07:00:09 28 Mar 2022 – News article – London Stock Exchange for more information.
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