Privatization Looms for NatWest as Shares Held by Taxpayers Dip Below 1%
NatWest is teetering on the edge of returning to complete private ownership as the taxpayer's stake in the banking colossus plummets below 1%. The Treasury has divested more shares, reducing their holding from 1.98% to a mere 0.9%. This marks a significant step towards NatWest's re-emergence as a privately-owned bank, nearly 17 years since it was saved during the 2008 financial catastrophe.
NatWest's chief executive, Paul Thwaite, has labeled this moment as symbolic for banking. Shares in the bank surged by 1% or 5.1p, reaching a 15-year high of 498.1p, despite remaining down 90% since 2007.
Once upon a time, NatWest (then known as the Royal Bank of Scotland) was drowning in a wave of £45.5 billion in taxpayer funds during the 2008 crisis, a lifeline engineered by then prime minister Gordon Brown and Chancellor Alistair Darling to prevent the bank from going under[1][2].
The Treasury's stake peaked at 84.4% in 2009. By the end of 2023, the holding was 40%, but the Treasury has been steadily ramping up efforts to offload its stake by selling shares to retail investors and into the public market.
NatWest themselves responded, stating, "We welcome the progress the Treasury continues to make, having reduced its shareholding from nearly 40% in December 2023."
Exactly when the entire taxpayer stake will be disposed of remains unclear.
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- AJ Bell
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- interactive investor
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NatWest'sdivestiture of stocks has led to a decrease in the Treasury's stake, currently at 0.9%, marking a significant move towards private ownership in the banking sector. As the re-emergence of NatWest as a privately-owned bank nears, potential investors may find opportunities in the stock market through platforms like AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, or Trading 212, offering a chance to be part of this financial transformation in business and investing. The full disposal of the taxpayer stake is yet to be determined.
