The British government is selling £1.26bn worth of its stake in NatWest, reducing its ownership of the lender that it bailed out in 2008 to below 40 per cent.
The sale, announced on Monday, will cut the government’s stake in the high street bank to 38.6 per cent, down from 41.4 per cent.
“Today’s sale is another major milestone in returning NatWest to full private ownership as promised,” said City minister Andrew Griffith. “The government has now sold well over half of its shareholding.”
The shares will be sold to NatWest at Friday’s closing price of 268.4p, well below the 502p the government paid in 2008 in the £46bn bailout of the lender then known as RBS. At its height, the government owned 84 per cent of the bank, one of the big four high-street lenders.
Alison Rose, group chief executive, said: “This transaction reduces government ownership below 40 per cent and demonstrates positive progress on the bank’s strategic priorities and the path to privatisation.”
In April, UK Government Investments, which handles the stake for the government, said it would extend the deadline for its “trading plan”, which allows the government to sell its stake gradually over time at market prices, by two years to August 11 2025.
The treasury still intends to fully exit its shareholding by 2025-26, “subject to market conditions and achieving value for money for taxpayers”.
NatWest has a total market capitalisation of about £25bn. Since 2013, the stock has on average traded at barely half the average price of the bailout, in part a reflection of its shift from global player and part of a consortium which took over Dutch lender ABN Amro in 2007 to a primarily domestically focused UK bank.
Shares were steady at 270.30p on Monday morning and have traded flat over the past six months.
NatWest reported stronger than expected profits in recent quarters, benefiting from the Bank of England’s efforts to beat inflation by pushing up interest rates, though customer deposit outflows in the first quarter disappointed analysts.
As with other lenders, its share price was affected by uncertainty in the markets stemming 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 the way banks are valued at the moment,” NatWest chair Howard Davies told the FT in April.
He will depart the bank by the middle of next year before he reaches nine years of tenure, the maximum recommended time to serve in the role under the UK corporate governance code.
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