Government sells tranche of shares in NatWest Group for £1.1 billion

The Government has sold another tranche of shares in taxpayer-backed bank NatWest Group for £1.1 billion, taking its stake down from 59.8% to 54.8%.

Library image of a branch of NatWest

The Treasury said it sold 580 million shares in NatWest at 190p each.

NatWest has been majority owned by the taxpayer since it was bailed out for £45.5 billion at the height of the financial crisis more than a decade ago.

Sign up to our Business newsletter

Sign up to our Business newsletter

But the latest stake sale 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.

It comes less than two months after the previous stake sale, which saw NatWest buy back 591 million shares in March for 190.5p each, reducing its shareholding from 61.7% to 59.8%.

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

According to the latest estimates from the Office for Budget Responsibility, (OBR) 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 recently unveiled a surge in first quarter 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.

A year earlier, it put by £802 million for loan losses and took a mammoth hit of £3.2 billion for these provisions over 2020 as a whole.