The Government’s latest share sale plan takes it a step closer to ending its status as majority owner of the bailed-out bank.
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.
I fjor, 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.
I fjor, NatWest took a mammoth hit of £3.2 billion for these provisions over 2020 as a whole.