Natwest Shares (NWG.L) Owned By UK Treasury Now Below 27%

The UK government has further reduced its shareholdings in NatWest Group PLC (LON: NWG), bringing it below 27%, as part of a broader plan to return the bank to full private ownership by 2025 or 2026. This move is in line with the government's objective to divest its banking shares acquired during the financial crisis of 2008, when it bailed out The Royal Bank of Scotland, now NatWest.

UK Government Investments Ltd, which manages the government's stake in NatWest, now holds approximately 34.9 billion shares, or 26.95% of the bank's total shares. The government's ownership of the bank has been steadily decreasing since its peak, highlighting a significant shift away from the aftermath of the financial crisis when it owned 58% of what is now known as NatWest.

The Treasury's current strategy includes a plan to slash its holdings to below 10% by the end of this year. A significant step in this strategy is the potential offering of NatWest shares to the public in 2024, which would mark one of the final stages of the privatization plan. Interestingly, the market seems to be responding favourably to the government's systematic sell-off and the bank's financial performance, with NatWest's share price having now increased by more than 62% in the past 6 months.

Chancellor Jeremy Hunt recently announced in the budget plans to divest all state-owned shares in NatWest by 2026, emphasizing the possibility of a retail offer within the next 12 months. This aligns with the broader goals of reducing public ownership in financial institutions and evidence of a returning sense of normality following the extraordinary measures taken during the last great financial recession.

The sale of the government's shares in NatWest represents a significant step in the re-privatization of one of the UK's largest financial institutions. This move is not just about financial transactions but also symbolic of the recovery and stabilization of the banking sector since the time of the crisis. The full privatization of NatWest by 2026 will mark the end of a remarkable chapter in the history of British banking and government intervention.

As the Treasury moves forward with its objectives, the public offering slated for 2024 will play an instrumental role in diminishing government involvement, providing an opportunity for investors and the public to participate in the bank's future growth. The privatization of NatWest stands as a significant milestone on the path to restoring normalcy in the UK's financial landscape after over a decade of recovery and restructuring efforts.