Treasury banks £1.1 billion in latest NatWest share sale
19 March 2021, 08:14
The Government sold 591m shares at 190.5p each, reducing its stake from 61.7% to 59.8% as part of plans to sell off its holdings by 2025.
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.
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.
