UK government sells upcoming £ 1bn stake in NatWest

The UK government will reduce its stake in NatWest for the second time in two months, taking advantage of a recent rebound in the bank’s share price to bring it closer to a full return to private ownership.

UK Government Investments, which manages the government’s shareholding, said on Monday after markets closed it would sell around 5% of NatWest shares, valued at around £ 1.1bn based on price Monday’s closing, thanks to an acceleration in book building.

This will bring the government’s stake in NatWest, formerly known as the Royal Bank of Scotland, to around 54.8%, raising the prospect that the bank could revert to majority private ownership within the year, 13 years after its bailout in the financial crisis. under state control.

Monday’s placement follows the sale of a similar volume of shares in March, which were repurchased by NatWest.

Shares of NatWest, along with most of its banking peers, have climbed rapidly in recent months amid optimism about the economic recovery in the UK. The stock has risen 24% so far in 2021 to reach 197p, although it has yet to fully recoup losses suffered at the start of the pandemic. Shares fell 1.5% on Monday after the government’s planned sale announcement, which was first reported by Sky News.

Details of the sale price and size are expected to be announced on Tuesday morning, but the deal will likely crystallize another substantial loss for taxpayers, who paid an average price of 502 pence per share to bail out the bank.

NatWest and the government have previously said that it would be impossible to recover the money injected into the bank in 2008, as its size has shrunk considerably since then. RBS, as it was called then, briefly became the world’s largest bank in terms of assets after the untimely takeover of ABN Amro, but nearly collapsed after being caught in the subprime mortgage crisis in the USA.

The Treasury said in its March budget that it intended to divest the remainder of its stake by the end of fiscal year 2025-2026.

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