# Britain chips away at NatWest stake with $1.6 billion share sale
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-05-22
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: NatWest edges closer towards private ownership with $1.6
Meta Description: NatWest buys back £1.3 billion worth of shares from government, moving closer to full private ownership. Government stake in bank drops to 38.69%.
URL: https://financedigest.com/britain-chips-away-at-natwest-stake-with-1-6-billion-share-salehtml

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LONDON (Reuters) -British state-backed [bank](https://www.financedigest.com/britains-co-op-bank-confirms-tsb-approach.html) NatWest has agreed to buy 1.3 billion pounds ($1.6 billion) worth of its [shares](https://www.financedigest.com/arms-shares-rise-as-wall-street-eyes-ipo-lock-up-expiration.html) back from the [government,](https://www.financedigest.com/german-government-plans-supplementary-budget-for-2024-bild-says.html) as it edges closer towards private ownership 15 years after it was bailed out in the global financial crisis.

The deal will reduce the government’s stake in the former Royal [Bank](https://www.financedigest.com/britains-co-op-bank-confirms-tsb-approach.html) of Scotland to 38.69% from around 41.4%.

The [bank returned](https://www.financedigest.com/swiss-bank-ubp-returns-to-chinese-markets.html "Swiss bank UBP returns to Chinese markets") to majority private ownership in March 2022 after a similar block sale, as the [government](https://www.financedigest.com/german-government-plans-supplementary-budget-for-2024-bild-says.html) targets fully returning NatWest to private ownership by 2026.

NatWest [shares gained](https://www.financedigest.com/tesla-q2-deliveries-meet-analysts-estimates-despite-chip-shortage-shares-gain.html "Tesla Q2 deliveries meet analysts’ estimates despite chip shortage, shares gain") 0.9% in early trading.

Today’s [sale is another major milestone in returning NatWest to full private](https://www.financedigest.com/gucci-banks-on-private-salons-for-the-ultra-rich-to-revive-sales.html "Gucci banks on private ‘salons’ for the ultra-rich to revive sales") ownership as promised,” Andrew Griffith, economic secretary to the Treasury, said in a statement.

NatWest said it had agreed to buy the [shares](https://www.financedigest.com/arms-shares-rise-as-wall-street-eyes-ipo-lock-up-expiration.html) at 268.4 pence per share, representing a further loss for taxpayers. The lender was bailed out for 45 [billion pounds in 2008 at a price](https://www.financedigest.com/edf-delays-uk-nuclear-project-to-2027-ups-price-by-3-billion-pounds.html "EDF delays UK nuclear project to 2027, ups price by 3 billion pounds") of 502 pence per share.

[Banking shares](https://www.financedigest.com/banks-oil-majors-lift-british-shares-higher.html "Banks, oil majors lift British shares higher") have struggled this year through a period of waider industry turmoil sparked by the failure of several U.S. regional lenders and the emergency [takeover of Credit Suisse](https://www.financedigest.com/ubs-makes-changes-to-buyback-programme-following-credit-suisse-takeover.html "UBS makes changes to buyback programme following Credit Suisse takeover"), but have recovered some ground in recent weeks. NatWest [shares are up around 15% on this time last year](https://www.financedigest.com/flutters-full-year-earnings-turnaround-forecast-sends-shares-higher.html "Flutter’s full-year earnings turnaround forecast sends shares higher").

The government clearly decided that now is a good moment to sell,” said Victoria Scholar, head of [investment at interactive investor](https://www.financedigest.com/camradata-publishes-responsible-investing-roundtable-the-metric-for-success-a-new-white-paper-for-investors-and-asset-managers.html "CAMRADATA publishes ‘Responsible Investing Roundtable – ‘The metric for success?’ – a new white paper for investors and asset managers").

Britain’s [finance ministry in April extended a trading](https://www.financedigest.com/machine-learning-critical-for-better-sme-credit-scoring-in-trade-finance.html "Machine learning critical for better SME credit scoring in trade finance") plan enabling a series of smaller sales to investors by two years, as it sought to make progress on the privatisation despite the period of volatility.

This is the government’s sixth [block sale](https://www.financedigest.com/hermes-asks-court-to-block-metabirkin-nft-sales-after-jury-win.html "Hermes asks court to block ‘MetaBirkin’ NFT sales after jury win") of NatWest stock to date. Britain owned 84% of NatWest at the peak of its ownership in 2008.

The [government](https://www.financedigest.com/german-government-plans-supplementary-budget-for-2024-bild-says.html) has long argued the rescue was needed and it is not viable to make a profit.

[Banking analysts at Shore Capital said the transaction](https://www.financedigest.com/banks-learn-how-to-profit-from-the-transaction-banking-gold-rush-at-annual-igtb-oxford-school.html "Banks learn how to profit from the transaction banking gold rush at annual iGTB Oxford School"), which reduces NatWest’s core capital ratio to around 14.4%, had been expected and its forecasts were unchanged.

This transaction reduces government [ownership](https://www.financedigest.com/to-be-a-young-person-and-own-your-own-home-should-be-a-dream-that-everyone-has-the-right-to-fulfil.html) below 40% and demonstrates [positive progress on the bank’s](https://www.financedigest.com/squirro-research-reveals-banks-believe-artificial-intelligence-can-have-a-significant-and-positive-impact-on-their-business.html "Squirro research reveals banks believe artificial intelligence can have a significant and positive impact on their business") strategic priorities and the path to privatisation,” [NatWest](https://www.financedigest.com/natwest-appoints-former-nationwide-cfo-to-its-uk-bank-board.html) CEO Alison Rose said in a statement.

($1 = 0.7923 pounds)

(Reporting by Iain Withers and Amy-Jo Crowley, additional reporting by Sarah Young; editing by Kate Holton, Jason Neely and Sharon Singleton)


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