Natwest buys back more shares from HM Treasury
Natwest has bought back another chunk of shares from its largest shareholder, HM Treasury.
This morning, the company announced that it had purchased 392m shares from the government, representing 4.5 per cent of its share capital.
The lender paid 316.2p per share for the stake, spending a total of £1.24bn to acquire the shares from the government.
In addition to this announcement, this morning, it was revealed that the government had also reduced its stake further under its regular trading plan.
Following the deals, the government’s stake in the lender has fallen to 22.5 per cent.
Paul Thwaite, Natwest chief executive said: “This transaction represents another important milestone for Natwest group, building on recent momentum in the reduction of HM Treasury’s stake in the bank.
“We believe it is a positive use of capital for the bank and for our shareholders and represents further progress against the ambition to return Natwest group to full private ownership. Our focus remains on delivering for our customers which will, in turn, deliver for our shareholders and the UK economy,” Thwaite added.
Since the beginning of the year, there’s been a noticeable step up in the government’s efforts to exit its position in the lender.
It has been drip-feeding shares into the market via its regular trading plan, taking its stake down from 37.98 per cent at the end of 2023 down to 26.95 per cent as of 13 May, before today’s twin announcements.
The government had planned to exit its stake by 2025 – 2026 and make a retail offer to divest the rest of its holdings.
However, Rishi Sunak’s plans to call a snap election have thrown these plans into disarray.
The Treasury has been allowed to continue the buyback and regular share sales as these were previously announced policies.
Natwest shares have added more than 40 per cent so far this year, and the group reported an operating profit of £1.3bn in the first quarter with a return on tangible capital of 14.2 per cent.
Last year, the company reported an operating profit of £6.2bn, up 20 per cent year-on-year and it paid £3.6bn to shareholders via dividends and share buybacks.