NatWest has made a significant move by buying back £1 billion in shares from the UK Treasury, reducing the government’s involvement to just 11%.
- This share repurchase marks the second such transaction by NatWest in 2024, aiming to reduce state ownership.
- The government once held an 84% stake in NatWest, post-2008 financial bailout, which has been steadily decreasing.
- The latest buyback accumulates to £2.2 billion in 2024, marking progress towards privatization.
- Plans for a public share sale were canceled due to potential taxpayer costs, continuing the focus on institutional sales.
NatWest’s recent purchase of £1 billion in shares from the UK Treasury further decreases the government’s stake to 11%. This move is part of NatWest’s strategic plan toward full privatization, as confirmed by CEO Paul Thwaite. He highlighted the acquisition of 263 million shares at 380.8p each as a pivotal step in this journey.
After the 2008 financial crisis, the government held as much as 84% of NatWest, formerly known as Royal Bank of Scotland, due to a bailout. Over time, state ownership has been reduced through sales to institutional investors and strategic buybacks.
In 2024 alone, NatWest has successfully repurchased £2.2 billion worth of shares from the Treasury. This significant reduction in government holdings has been achieved in less than a year, indicative of a deliberate push towards privatization.
Initially, there were plans to organize a public share sale in June, which was expected to lessen the government’s 20% stake. However, these plans were retracted by the Labour government due to concerns over potentially substantial costs to taxpayers, estimated at up to £450 million.
The previous Conservative government had proposed a public offering reminiscent of the ‘Tell Sid’ campaigns. The shift away from this approach underscores the current administration’s preference for internal and institutional routes to privatization.
NatWest’s actions are a clear indication of its commitment to complete privatization after years of state involvement.
