NatWest Group, the bank formerly known as RBS, has finally returned to a majority private ownership 14 years after its £46 billion bailout by UK taxpayers during the global financial crisis.
The UK government’s stake in the former Royal Bank of Scotland will fall to 48.06% % after NatWest agreed to buy £1.2 billion of its shares — almost 5% — back from the UK state.
NatWest will pay 220.5p each for the shares — while the bailout price was 502p per share.
“NatWest Group plc has agreed with HM Treasury to make an off-market purchase of 549,851,147 ordinary shares in the company … at a price of 220.5 pence per ordinary share …” said NatWest.
“NWG intends to cancel all of the purchased ordinary shares …
“Following settlement of the above transaction … HM Treasury will hold approximately 48.06 per cent. of the company’s voting rights …
“The off-market purchase of ordinary shares has triggered NWG to pay £427 million to its main pension scheme in line with the memorandum of understanding announced on 17 April 2018 …”
NatWest CEO Alison Rose said: “We believe this transaction to be a good use of capital for the bank and our shareholders.
“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.
“We are proud of the role we play in supporting our 19 million customers throughout the UK, including one in four businesses.
“By delivering on our strategic priorities, and by forging closer and deeper relationships with our customers at every stage of their lives, we will help them to grow and to thrive.
“Because if they thrive, and if the UK economy thrives, so will we.”
The UK’s 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.”
Walid Koudmani, chief market analyst at financial brokerage XTB, said: “Today’s news of Natwest returning to majority private ownership may provide some encouragement for the state of the company which required a bailout during the 2008 financial crisis.
“While the company managed to buy the shares at around half the price of what the government paid, it plans to continue its purchase of shares in the coming years and may ultimately indicate the long awaited recovery from the collapse.
“Investors may find this news quite positive and we could be seeing a renewed interest for the bank after it was seen as a significant risk for some time.”