Anticipated shift to exclusive private ownership of NatWest predicted for subsequent year as confirmed by the company's executive head.
NatWest Completes Full Privatization, Announces Share Buyback Program
In a significant move for the British banking sector, NatWest has completed its full privatization, marking the end of government ownership of the bank. This development was announced in May 2025, following a successful share sale that saw the UK government's stake drop below 11%.
The decision not to proceed with a retail share sale was made in July 2024, as it was deemed a bad use of taxpayer money. The Labour chancellor announced the abandonment of the retail share sale as part of a statement on public finances.
NatWest's CEO, Paul Thwaite, has expressed his expectation that the bank will return to full private ownership next year. This expectation is supported by the bank's strong financial performance, with its share price having almost doubled over the past 12 months.
The bank's financial strength is evident in its strong performance in the first half of 2025, which has supported its post-privatization capital return strategy. As a result, NatWest has announced a significant strategic move to enhance shareholder value through a £750 million share buyback program, set to commence in the second half of 2025.
This buyback, accompanied by a 58% increase in the interim dividend, reflects NatWest's focus on capital discipline and returning value to shareholders. The bank aims to return 50% of its attributable profits to shareholders through dividends and buybacks combined.
Insider trading has been minimal since privatization, and short interest in the stock is low, indicating market confidence post-privatization. Retail investors hold a greater proportion of their assets in the UK compared to pension funds, and the decision to freeze out retail investors in the privatization process has been met with disappointment by some, such as Sarah Coles, head of personal finance at Hargreaves Lansdown.
In summary, NatWest is now fully privatized and in a strong financial position. Its current phase involves executing a substantial share buyback and growing dividends during the second half of 2025 to strengthen shareholder returns and signal a disciplined capital management approach in its new fully private ownership era.
- Within the new era of full private ownership, NatWest plans to incremente shareholder value by initiating a £750 million share buyback program, signifying a strong focus on personal finance and investing in its own business.
- Due to the bank's robust financial performance and commitment to capital discipline, it aims to return 50% of its attributable profits to shareholders, primarily through investing in its business by way of reinvesting a portion in buying back shares, thus demonstrating its focus on personal finance and business.
