U.K Government Continues To Trim NatWest Stake

In a move to progress its plan to return the bank to private ownership, the U.K. government has reduced its stake in NatWest Group PLC (LON: NWG) to just below 16%. This strategic disposal is part of a broader government scheme to unwind its holding in the banking group, which it has maintained since the financial crisis of 2008.

The Treasury successfully sold 76.5 million ordinary shares, which resulted in its shareholding to shrink from 16.92% to 15.99%. This sale has left the government with 5.32 billion voting rights in the bank, reflecting 1.33 billion shares.

This move is aligned with the government's explicit objective to fully divest its interest in NatWest and return it to private ownership by the year 2026. It is a major stepping stone towards fulfilling the commitment of relieving the taxpayer from the ownership burdens assumed during the banking sector's bailout.

NatWest Group, known initially as Royal Bank of Scotland, came under government ownership as part of a 45.5 billion pound rescue package at the peak of the global financial upheaval. The government subsequently found itself owning up to 84% of the banking institution. The original acquisition of NatWest by the Royal Bank of Scotland took place in 2000, marking a significant expansion for the Scottish banking giant at the time.

Investors and market watchers have taken note of the strong performance of NatWest shares, which have spiked considerably, showcasing a nearly 58% increase since the beginning of the year. This bullish trend in the share price suggests a growing investor confidence in the bank’s financial health and future profitability.

The continued decrease in government shareholding reflects both the stabilisation of the banking sector since the dire days of the financial crisis and the government's confidence in NatWest Group’s ability to thrive independently. As the U.K. Treasury furthers its disinvestment from the bank, the shift signifies an important chapter in the post-crisis era of British banking. The full return of NatWest Group to the private sector will mark the end of an epoch that commenced with one of the largest financial interventions by the U.K. government in history