The Treasury has offloaded 580 million shares in NatWest at a discount price of 190p each to institutional investors, trimming its stake in the bank from 59.8 per cent to 54.8 per cent and equating to some £1.1bn. Shares in NatWest closed at 197.1p on Monday evening.
NatWest – formerly known as Royal Bank of Scotland Group – has been majority owned by the taxpayer since it was bailed out for almost £46bn in 2008 at the height of the financial crisis.
But the latest stake sale takes the government a step closer to ending its status as majority owner of the bank and its commitment to return it to the private sector by 2025.
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The latest move comes less than two months after the previous stake sale, which saw NatWest buy back 591 million shares in March for 190.5p each, reducing its shareholding from 61.7 per cent to 59.8 per cent.
The Treasury initially took an 82 per cent stake in the then RBS for 440p a share in 2008 to avoid the bank collapsing during the credit crunch and financial crisis.
According to the latest estimates from the Office for Budget Responsibility, (OBR) of the £45.8bn spent to prop up the bank during the crisis, the taxpayer is expected to make a loss of £38.8bn.
Last year, just as the coronavirus crisis struck the UK, the Treasury pushed back a deadline to sell the entire stake by a year, to March 2025.
Last month, NatWest Group become the latest big lender to report a surge in profits after cutting reserves for debts that may turn sour due to the pandemic.
Earnings across the sector are bouncing back as banks begin to trim their reserves for loan losses thanks to a brighter outlook for the UK economy due to the vaccination programme and easing of lockdown restrictions.
NatWest reported pre-tax operating profits of £946 million for the first three months of 2021 against £519m a year earlier – an increase of 82 per cent.