NatWest has taken a significant step in its journey towards privatisation by buying back £1 billion in shares from the UK Treasury, reducing the government’s stake to 11%.
- In 2024, NatWest conducted its second buyback of the year, purchasing 263 million shares.
- Since December, the government’s stake has been reduced by more than two-thirds.
- This move follows a Labour government decision to cancel a public share sale due to potential taxpayer costs.
- The privatisation process has been ongoing since the 2008 financial crisis bailout.
In a strategic move, NatWest has repurchased £1 billion in shares from the UK Treasury. This action is described by CEO Paul Thwaite as an “important milestone on the path to full privatisation.” The acquisition involved 263 million shares, each priced at 380.8p. This is the bank’s second buyback this year, showcasing its dedication to reducing government ownership.
The government’s stake in NatWest, once as high as 84% following the 2008 financial crisis bailout, has now been significantly diminished. Over the years, the government has consistently reduced its ownership through share sales to institutional investors and buybacks. In 2024 alone, NatWest has repurchased £2.2 billion worth of shares, effectively cutting the government’s holding by over two-thirds since December.
The decision to opt for a buyback rather than a public share sale was influenced by the Labour government’s concerns over potential costs to taxpayers, estimated to be as high as £450 million. The public offering, initially proposed by the previous Conservative government, was cancelled in June. This indicates a strategic shift in how the government plans to divest its stake in the bank.
This latest transaction signifies a continued effort to privatise the bank, following the taxpayer-funded bailout over a decade ago. It is a testament to NatWest’s progress and stability as it seeks to fully transition away from government ownership.
NatWest’s recent actions underscore its commitment to achieving full privatisation, marking a pivotal point in its post-crisis recovery.
