UK markets closed
  • FTSE 100

    7,032.30
    -46.12 (-0.65%)
     
  • FTSE 250

    22,948.83
    -101.63 (-0.44%)
     
  • AIM

    1,251.11
    +3.84 (+0.31%)
     
  • GBP/EUR

    1.1713
    -0.0024 (-0.20%)
     
  • GBP/USD

    1.3908
    -0.0050 (-0.35%)
     
  • BTC-GBP

    30,020.32
    -179.43 (-0.59%)
     
  • CMC Crypto 200

    955.03
    +5.13 (+0.54%)
     
  • S&P 500

    4,395.26
    -23.89 (-0.54%)
     
  • DOW

    34,935.47
    -149.06 (-0.42%)
     
  • CRUDE OIL

    73.81
    +0.19 (+0.26%)
     
  • GOLD FUTURES

    1,812.50
    -18.70 (-1.02%)
     
  • NIKKEI 225

    27,283.59
    -498.83 (-1.80%)
     
  • HANG SENG

    25,961.03
    -354.29 (-1.35%)
     
  • DAX

    15,544.39
    -96.08 (-0.61%)
     
  • CAC 40

    6,612.76
    -21.01 (-0.32%)
     

Taxpayer stake in NatWest to be sold down further

·2-min read
The taxpayer stake in NatWest Group is set to be cut further (Matt Crossick/PA) (PA Wire)
The taxpayer stake in NatWest Group is set to be cut further (Matt Crossick/PA) (PA Wire)

The taxpayer stake in NatWest Group is set to be cut further after the Government announced plans to offload more shares in the part-nationalised banking giant.

UK Government Investments (UKGI), which manages the Government’s shareholding in NatWest, said it was aiming to sell shares over 12 months starting August 12 under a pre-arranged trading plan overseen by Morgan Stanley.

It plans to sell up to, but no more, than 15% of the total shares being traded on the market, which would further reduce the current 54.7% taxpayer holding in the bank.

UKGI and the Treasury said it would also keep “other disposal options open” alongside the 12-month trading plan.

It comes soon after the Government sold 580 million NatWest shares in May, raising £1.1 billion for the taxpayer.

NatWest – formerly Royal Bank of Scotland (RBS) – has been majority-owned by the taxpayer since it was bailed out for £45.8 billion in 2008 at the height of the financial crisis.

The latest share sale announcement takes the Government a step closer to ending its status as majority owner of the bank and its commitment to return NatWest to the private sector by 2025.

The Government initially bought an 82% stake in the then RBS for 440p a share in 2008 to save the bank from complete collapse during the financial crisis.

According to recent estimates from the Office for Budget Responsibility of the £45.8 billion spent to prop up the bank during the crisis, the taxpayer is expected to make a loss of £38.8 billion.

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, as a global sell-off saw stock markets around the globe collapse.

The Treasury also missed out on a dividend payment last year, due to regulators banning payouts by financial institutions during the height of the Covid-19 pandemic.

NatWest subsequently declared a dividend in 2021 of 3p a share, handing £225 million to the Government as the biggest shareholder.

The lender unveiled a surge in first quarter 2021 profits thanks to expectations for fewer loans to turn sour due to the pandemic.

It reported an 82% jump in pre-tax operating profits to £946 million for the first three months of 2021 after releasing £102 million of cash put aside for bad debts and will update on interim results next week.

Last year, NatWest took a mammoth hit of £3.2 billion for these provisions over 2020 as a whole.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting