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Bloomberg
The UK government sold part of its stake in NatWest Group Plc for 1.13 billion pounds ($1.6 billion), reducing its holding for the first time in almost three years.
The Treasury sold 590.7 million shares to the bank at the closing price of 190.50 pence, according to a statement. Its holding will be reduced to 6.9 billion shares, representing 59.8% of NatWest’s share capital.
The transaction allowed the lender “to use some of our excess capital to buy back government shares,†NatWest Chief Executive Officer Alison Rose said in a statement. “We believe this is a good use of capital for the bank and our shareholders.â€
The sale still leaves the UK state as the lender’s largest shareholder, more than a decade after it rescued what was then Royal Bank of Scotland in a 45.5 billion-pound bailout. The Conservative government has repeatedly pledged to cut the holding, but the process of selling the stock has been stalled as Brexit dominated the British political scene and the lender’s market value languished at about half the amount of the bailout.
NatWest had also declared itself ready to move back into private hands: in 2019, it gained investor approval to carry out special share purchases in future to buy back as much as 5% of the government stake per year. The lender is one of the best-capitalized banks in Europe, and resumed dividends along with new growth targets in February.
The buyback is “is a clear positive signal,†said Joseph Dickerson, analyst at Jefferies International Ltd.
The sale “represents an important step in the government’s plan to return institutions brought into public ownership as a result of the 2007-2008 financial crisis to private ownership,†the U.K. Treasury said in a statement. The deal comes less than a month after the government offloaded the final assets from its separate rescue of Northern Rock and Bradford & Bingley.