The UK government has extended a deadline for reducing its stake in NatWest by two years, after bank stocks worldwide were hit by the fallout from the collapse of Silicon Valley Bank in the US and a $3.25bn rescue deal for Credit Suisse.
UK Government Investments, which oversees the Treasury’s stake in the bank, said on Monday that the deadline for its “trading plan”, which allows the government to sell its stake gradually over time at market prices, had been pushed back to August 11 2025.
The bank was known as Royal Bank of Scotland when it was rescued in a £46bn bailout in 2008.
UKGI said that share sales under the trading plan had generated approximately £3.7bn over the past two years. NatWest was majority owned by the government until last March, with its stake currently at 41.5 per cent.
It is the second time the trading plan, originally announced as a one-year scheme in July 2021, has been delayed. In June 2022, UKGI announced a 12-month extension.
UKGI said that no more than 15 per cent of total trading volume would be sold during the latest extended period.
“We are determined to return NatWest to full private ownership,” said City minister Andrew Griffith.
Bank shares have fallen sharply since March because of the collapse of California-based SVB, followed by the UBS rescue of Credit Suisse.
Analysts have emphasised that reforms since the financial crisis have put the UK’s largest lenders in a strong position.
“No bank is bulletproof, but the UK incumbents look well positioned to weather the storm,” Jonathan Pierce at Numis wrote in a report last week, pointing to factors including high holdings of liquid assets.
Nevertheless, fears over possible contagion have contributed to a more than 9 per cent fall in NatWest shares over the past month.
Shares were at 266.7p on Monday afternoon. The government paid 502p a share to bail out RBS in 2008.
UKGI said that alternative methods of reducing ownership such as large bookbuilds that tend to be completed at a discount would be carried out only if they “achieve value for money for taxpayers”.
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