UK government lowers its stake in NatWest bank

Bank to buy back £1.1bn of its shares from the state, edging it further towards private ownership

NatWest, formerly Royal Bank of Scotland, will be 59.8% government-owned after the deal, down from 62% previously.

NatWest — which recently confirmed plans to pull Ulster Bank out of the Republic — will buy back £1.1bn (€1.3bn) of its shares from the British government, edging the state-backed lender further towards private hands as the UK government pushes to fully sell off banks bailed out in the financial crisis.

The sale crystallises a further loss of around £1.8bn for the UK government on its £45bn rescue of NatWest.

Britain’s Office for Budget Responsibility forecast in March the UK government would make an overall loss of about £39bn on the bailout once finance costs were factored in.

State's shareholding below 60%

NatWest, formerly Royal Bank of Scotland, will be 59.8% government-owned after the deal, down from 62% previously. The price of the transaction was Thursday’s share price close of 190.5p, well below the 502p bailout level.

“We believe this is a good use of capital for the bank and our shareholders,” NatWest CEO Alison Rose said.

The UK government’s two previous sales of part of its holding in NatWest, in August 2015 and June 2018, were wider market placements involving private investors.

NatWest has long argued that the rescue deal was needed to stabilise Britain’s financial system during the 2007-09 crisis, and that it was unrealistic for the UK government to expect a profit to be made.

•  Irish Examiner and Reuters