The government cuts NatWest’s stake to 11.4% with a £1 billion share sale

The government has agreed to sell part of the taxpayer’s stake in NatWest, worth £1 billion, as the lender resumes its path back towards full privatisation.

NatWest will buy back more than 262 million ordinary shares for cancellation at a price of 380.8p each, reducing the government’s stake from 14.2 to around 11.4 percent.

It marks the first sale of NatWest shares held by the Treasury since the general election. The government’s stake fell below 30 percent for the first time in March, meaning it is no longer a ‘controlling shareholder’.

Natwest came under public scrutiny in 2008 when the government had to inject a total of £45.5 billion into the stricken lender, the then Royal Bank of Scotland, at the height of the financial crisis.

After the major taxpayer bailout, it ended up with an 84 percent stake in NatWest.

Since then, the government has steadily reduced its stake in the bank.

But the sales have been at a loss, as the Treasury initially bailed out the bank for around £5 per share.

NatWest shares have almost doubled in the past year, lifted by a rising tide of higher interest rates, closing at 386.5p on Friday.

Under the leadership of former CEO Alison Rose, the bank – which also includes the Royal Bank of Scotland, NatWest, Coutts and Ulster Bank brands – dropped the RBS group name in an attempt to break with its crisis-ridden past.

But Rose was forced to quit in the wake of Nigel Farage’s ‘debanking’ scandal, with NatWest appointing Paul Thwaite as interim boss. He has since been given the job permanently.

Former Chancellor Jeremy Hunt had lined up M&C Saatchi to launch a 1980s-style ‘Tell Sid’ advertising campaign to boost investment in the London stock market.

His spring budget plans to sell the government’s entire remaining stake to private investors later this summer were scrapped in response to the looming general election.

Labor Chancellor Rachel Reeves scrapped the plans in July, claiming they would ‘not provide value for money’, but has again backed plans to return NatWest to full private ownership by the 2025-2026 financial year.

Thwaite said on Monday that the latest share buyback “marks another important milestone on the path to full privatization.”

He added: ‘We believe this is a positive use of capital for the bank and for our shareholders and we are pleased with the continued momentum in reducing HM Treasury’s stake in NatWest Group during this year.’