Treasury banks £1.1 billion in latest NatWest share sale

Simon Neville, PA City Editor
·2-min read

The Government has announced its latest sell-off of part of its stake in NatWest, formerly RBS, banking £1.1 billion for the taxpayer.

Ministers signed off the sale on Thursday for 190.5p a share, as part of a commitment to return the bank to the private sector by 2025.

The deal sees NatWest buy back 591 million shares from the Government, leaving the taxpayer with a stake of 59.8% compared with 61.7% previously. The Government’s current stake is worth £13 billion on current share prices.

Rishi Sunak
Chancellor Rishi Sunak signed off on the deal (Tolga Akmen/PA)

The share sale also triggers NatWest to contribute £500 million to its main pension scheme.

The Government initially bought an 82% stake in RBS, as it was then known, in 2008, for 440p a share, to avoid the bank from complete collapse during the height of 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 Government sold shares in RBS twice since 2008, with the last in 2018 by reducing its stake by 7.7% at 271p a share.

A previous 5.4% stake in the bank was sold in 2015 at 330p a share.