NatWest has embarked on a significant step towards full privatisation by repurchasing £1bn in shares from the UK Treasury.
- This strategic buyback is the second occurrence in 2024, demonstrating commitment to reducing government ownership.
- NatWest’s recent acquisition involves 263 million shares priced at 380.8p each, marking an ‘important milestone’, according to CEO Paul Thwaite.
- The government has progressively decreased its stake from an 84% high after the 2008 financial crisis, utilising share sales and buybacks.
- Concerns over taxpayer costs led to the cancellation of a public share sale initially proposed by a former government.
The recent share buyback by NatWest from the Treasury marks a deliberate effort to further advance the bank’s journey towards complete privatisation. By acquiring £1bn worth of shares, NatWest has managed to significantly reduce the government’s stake, which now stands at 11.4%.
In 2024, NatWest has actively repurchased shares totalling £2.2 billion, continuing a broader trend of diminishing government presence in the bank. This move is seen as pivotal in the context of reducing public ownership, a process that began after the substantial taxpayer-funded bailout during the 2008 financial crisis.
CEO Paul Thwaite highlighted the acquisition of 263 million shares at 380.8p each as a critical step for the bank, describing it as an ‘important milestone’. This transaction not only underscores the bank’s commitment to privatisation but also realigns its strategic goals to operate with greater independence from government influence.
Historically, the government held as much as an 84% stake in NatWest, formerly known as the Royal Bank of Scotland. Over the years, this ownership has been progressively reduced through strategic sales and share buybacks targeted at institutional investors.
In June, the Labour government decided to abandon a plan for a public share sale of NatWest due to the potential financial impact, estimated to possibly cost taxpayers up to £450 million. This plan was originally set by the preceding Conservative administration, indicating a shift in policy approach but maintaining the ultimate objective of privatising the bank.
NatWest’s continued efforts to buy back shares mark a significant move towards achieving full privatisation and reducing governmental ownership.
