Government no longer majority owner of RBS parent NatWest in 'milestone' moment

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Royal Bank of Scotland parent NatWest is no longer majority owned by the taxpayer nearly a decade and a half since the UK government stepped in to rescue the banking giant.

The Treasury said it had sold £1.2 billion worth of shares in the group, taking its stake below 50 per cent.

Economic secretary to the Treasury John Glen said: “This sale means that the government is no longer the majority owner of NatWest Group and is therefore an important landmark in our plan to return the bank to the private sector.

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“We will continue to prioritise delivering value for money for the taxpayer as we take forward this plan.”

NatWest recently reported a big swing to the black as it moves closer to full private ownership again.NatWest recently reported a big swing to the black as it moves closer to full private ownership again.
NatWest recently reported a big swing to the black as it moves closer to full private ownership again.

In 2008, the government started to build a stake in the group following the financial crash which had left it teetering on the brink of collapse.

The initial investment, which saw the Treasury owning 57 per cent of the bank, was extended a couple of times before peaking at 84 per cent in 2009.

The government has been selling off its stake since 2015, and the latest sale takes its ownership from 50.6 per cent to 48.1 per cent.

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NatWest said the latest deal saw it buying 550 million shares at around £2.21 each. The process of selling off the shares is likely to continue for some time to come, and has already taken considerably longer than the sell-off of Lloyds Banking Group, owner of Bank of Scotland and Scottish Widows.

The government’s stake in Lloyds Bank, which hit more than 43 per cent following the financial crash, was finally unwound in 2017.

The government was handed its shares in the banks in 2008 after announcing a £37bn injection of capital into the sector. Then prime minister Gordon Brown was clear at the time that it was not an attempt to nationalise the banks, but that they would be sold back “at the right time”.

Susannah Streeter, senior investment and markets analyst at investment platform Hargreaves Lansdown, said: “NatWest Group has reached a milestone with the UK government’s stake in the bank peeled back to below 50 per cent for the first time since the financial crisis.

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“It’s been a long road back from emergency purchase of the beleaguered Royal Bank of Scotland group, with a rebrand, and the step by step repurchase of the government holdings.

“This is the fifth sale, returning £1.2bn to treasury coffers, at a time when the government sorely needs the cash with the costs of borrowing mounting.”

AJ Bell investment director Russ Mould noted: “Natwest is finally free of state control after well over a decade as the UK government reduced its stake below 50 per cent, though any champagne might have to be put on ice given the challenges facing the bank from the cost-of-living crisis and the risks of mounting bad debts.”

Last month, NatWest Group reported an operating pre-tax profit of £4bn for 2021, up from an operating pre-tax loss of £481 million a year earlier. The bonus pool for NatWest's bankers increased from £200m to £298m.

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