NatWest Shares (LON: NWG) In Correction Territory as Government Holdings Go Below 5%

Natwest shares (LON: NWG) have fallen more than 10% from recent highs, officially putting the stock in correction territory. The move in itself can be considered healthy, particularly after a strong rally, which in the case of Natwest remains more than 70% up over the past year.

Downwards pressure on markets has accelerated in recent weeks as tariffs, and broader economic uncertainty continue to permeate through markets. Another continued seller of NatWest has been the UK Government, now officially no longer the largest shareholder of the company after completing a recent tranche.

The UK government reduced its holding to 4.82%, marking a significant shift in the ownership structure of the bank, with BlackRock Investment Management (UK) now becoming the largest investor with a 5.72% stake.

NatWest's strategy of returning to full private ownership is progressing steadily under the leadership of CEO Paul Thwaite. The company aims to achieve complete privatization by the year 2025. Market analysts predict that at the current pace of share sales, the government's complete exit from NatWest could occur as early as June.

In recent financial manoeuvres, NatWest has utilised excess capital for share buybacks, purchasing shares worth 1 billion pounds in November.

Since December 2023, the government's stake in NatWest has decreased rapidly from approximately 38% to less than 10% by the end of December 2024. This trend is reflective of the UK government's ongoing efforts to reduce its ownership in the bank, following its intervention during the financial crisis of 2008-2009.

Overall, the transition in NatWest's ownership highlights a significant shift in the bank's shareholder structure. The reduction of government ownership aligns with NatWest's strategic goal of regaining a fully privatized status in the near future.