The Strategist

UK to reduce its stake in NatWest Bank


07/23/2021 - 03:34



The UK government is set to sell another stake in its NatWest Group (formerly The Royal Bank of Scotland Group).



Howard Lake
Howard Lake
The cabinet unveiled a plan under which the sale of shares is due to start in August and will last 12 months until August 2022. It has not been disclosed how much stake in NatWest will be sold, there is only an upper limit - no more than 15% of the bank's listed shares will be sold. The statement also says that the shares will only be sold if the price is favourable to taxpayers.

During the global financial crisis, the British government had to bail out RBS, which was then on the brink of bankruptcy, with £45bn in exchange for 80% of its shares. In 2015, the UK launched a massive programme to sell assets in corporations that had previously been partially or fully nationalised. The first stake in RBS was sold then, with the government later reducing its stake in the bank several more times.

The government now owns 54.7 per cent of NatWest. According to the Financial Times, the current round of sales will result in the private equity stake in the bank exceeding that held by the government for the first time since the financial crisis. NatWest shares have risen slightly recently, but they remain 60% below the average price the government paid for them.

source: ft.com