The Treasury today sold down its stake in NatWest further, days after it was revealed the election could cause the highly anticipated retail sale of its stake in the bank to be scrapped.
After selling another 392 million shares in the business back to the bank for £1.24 billion in an off-market deal, the Treasury’s stake in the bank is down 22.5%. The shares were sold for 316.2p each.
NatWest will cancel a little over half of the shares and sell the rest.
The Government bailed out NatWest after the Global Financial Crisis, giving it an 84% stake in the banking group that was then known as RBS, and has been selling down its stake since. That selling accelerated in the past year, as the taxpayer’s part-ownership of the bank received heightened attention amid the controversy over politician Nigel Farage’s account with NatWest-owned Coutts.
Last year, Jeremy Hunt announced a retail sale of the Government NatWest stake, allowing the general public to buy shares in the bank from the Government for the first time, as part of its effort to return the bank to full private ownership.
A marketing campaign of the share sale was planned, intended to invoke the “tell Sid” campaign for the privatisation of British Gas. However, Rishi Sunak’s decision to call a July general election meant the retail share sale was put on ice. Labour has not yet revealed whether it would go ahead with the sale if it wins the election.
NatWest CEO Paul Thwaite said: “This transaction represents another important milestone for NatWest Group, building on recent momentum in the reduction of HM Treasury’s stake in the bank.
“We believe it is a positive use of capital for the bank and for our shareholders and represents further progress against the ambition to return NatWest Group to full private ownership. Our focus remains on delivering for our customers which will, in turn, deliver for our shareholders and the UK economy.”
Analysts at Peel Hunt noted that the buyback was bigger than it had expected, and — when combined with NatWest’s strong first-quarter results — suggest that returns to shareholders this year could be larger than initially expected.
NatWest shares were steady today at 316.6p, valuing the bank at £27.6 billion, and the Treasury’s remaining stake at £6.2 billion.
