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UK government no longer majority owner of NatWest as it sells £1.2bn worth of shares

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·Finance Reporter, Yahoo Finance UK
·2-min read
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UK government no longer majority owner of NatWest as it sells £1.2bn worth of shares
The government is no longer a majority shareholder in NatWest after it sold £1.2bn worth of shares in the banking group. Photo: Vuk Valcic/SOPA Images/LightRocket via Getty

NatWest (NWG.L) has agreed to buy back shares worth £1.2bn ($1.57bn) from the UK government, returning the lender to majority private control for the first time since it was bailed out by taxpayers over a decade ago.

The Treasury said it has sold £1.2bn worth of shares in NatWest Group, taking its stake to less than 50%.

The government has owned the majority of NatWest, which used to be called Royal Bank of Scotland, since it was rescued at the height of the financial crisis. The Treasury’s ownership of the bank peaked at 84% in 2009.

Read more: NatWest pays £298m in bonuses as it closes 32 branches

NatWest Group has bought 550 million shares, or 4.91% of its share capital, from the UK government, resulting in the government's voting rights falling to 48.1%, the bank said in a statement.

Treasury said it authorised the sale of its shares at Friday's closing price of 220.5 pence per share.

NatWest’s shares have risen almost 15% over the past year.

Natwest's share price jumped 1.77% on the back of the announcement. Chart: Yahoo Finance UK
Natwest's share price jumped 1.77% on the back of the announcement. Chart: Yahoo Finance UK

Economic secretary to the Treasury John Glen said: “This sale means that the government is no longer the majority owner of NatWest Group and is therefore an important landmark in our plan to return the bank to the private sector.

“We will continue to prioritise delivering value for money for the taxpayer as we take forward this plan.”

The UK spent £45bn bailing out the lender, once one of the world's largest, in 2008.

The initial investment, which saw the government owning 57% of the bank, was extended more than once before peaking at 84% in 2009.

Read more: Lloyds to close 60 UK branches in online banking push

The Treasury has been selling off its stake since 2015, and the latest sale takes its ownership from 50.6% to 48.1%.

NatWest boss Alison Rose called the share buyback an "important milestone".

"Reducing government ownership below 50% is an important milestone for NatWest Group and a further demonstration of the progress we are making as we continue to deliver for our customers and shareholders," she said.

NatWest Group's main baking brands are NatWest, Royal Bank of Scotland (RBS) and Coutts. It was renamed as NatWest Group in 2020 after more than 40 years under the RBS Group brand.

Watch: How does inflation affect interest rates?

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