Natwest returns to private ownership
Natwest has finally re-entered private ownership ending one of British banking’s longest-running sagas.
The government sold off its remaining 0.26 per cent stake in the group on Friday marking a full exit from the lender.
The Treasury’s share of the FTSE 100 lender dates back to the 2008 financial crisis.
Natwest, then under the Royal Bank of Scotland moniker, received a £46bn bailout from taxpayer funds as it fought for survival.
The government acquired an 80 per cent stake in Natwest as part of its rescue plan.
The firm was not the only lender bailed out by the government. Lloyds received a £20bn injection for a 43 per cent stake.
The Treasury pocketed around £4.9bn in dividend payments during its ownership with fees and other payments topping £5.6bn.
However, today the government confirmed a £10.5bn loss to taxpayers since the bank was rescued during the 2008 financial crisis.
Natwest follows Lloyds Banking Group, which departed from its status as a partially state-owned enterprise in 2017.
Natwest CEO Paul Thwaite said: “This is a significant moment for Natwest Group, for all those who work here and for the UK more widely. As we turn the page on the financial crisis, we can look to the future with confidence, without forgetting the lessons of the past.
“I am proud to have been part of the team that has helped build a simpler, safer, more customer-focussed bank. It is thanks to the incredible loyalty of our customers and colleagues, along with the support of our shareholders – including the UK taxpayer – that this change has been possible.
“Today we have a strategy that is working, positive momentum in our business and a clear ambition to succeed with our customers.
“This is a sector that matters; strong economies need strong banks, and vice versa. At a time when there is a clear intent to deliver growth, Natwest is ready to step up to the challenge, shaping our future as a vital and trusted partner to our customers and to the UK itself.”
Government sell-off accelerated in last year
Up until 2022, the taxpayer was still the majority shareholder in the company. The government sold a chunk of its shares in March 2022, taking its stake to 48.1 per cent.
But in the last year it has accelerated its sell-off to push Natwest back into private ownership.
On January 14 2025, the government reduced its stake to 8.9 per cent, following a sale of 86.4m shares.
And in early May, Natwest announced the government’s holding had fallen below one per cent, averaging a two per cent reduction per month.
Dan Coatsworth, investment analyst at AJ Bell, told Morning Wire: “We don’t know if it has been hands-on or stayed at arms’ length, but it’s fair to suggest that Natwest has followed the same path as other UK banks since the global financial crisis.”
During the bank’s annual general meeting, chairman Rick Haythornthwaite said the government had been “positive and patient through the investing years”.
Natwest stock notched a decade high of 478.80p in April, but the figure remains drastically dwarfed by pre-financial crisis highs of 5,236.28p.
Natwest eying deal spree?
The lender pocketed £4bn in income for the first-quarter of 2025 after a rush to beat stamp duty deadlines boosted takings.
The firm booked £1.8bn in pre-tax profit, surpassing the £1.6bn pencilled in by analysts.
As Brits flocked to beat the Chancellor’s March 31 deadline, net lending increased by £3.4bn to £371.9bn.
Analysts hailed the lender’s strategic positioning as operating expenses fell 8.5 per cent to £2bn.
John Moore, senior investment manager at RBC Brewin Dolphin, said: “With some of its peers potentially retreating from the UK, that may open up opportunities for acquisition or other forms of expansion, which would provide further scale while sticking to the three pillars of the bank’s strategy.”
Natwest lodged an £11bn bid for Santander UK’s retail arm earlier this year, according to reports from the Financial Times.
Talks between the two lenders are no longer active, but should the takeover have gone ahead it would have birthed the biggest banking deal since the financial crisis.
Whilst unsuccessful, the proposal could offer insight into Natwest’s future post-privatisiation.
The bank kicked off its shopping spree last year after snapping up the majority of Sainsbury’s banking assets and purchasing Metro Bank’s £2.5bn residential mortgages portfolio.
Natwest is set to deliver its half-year results on July 25 – and for the first time in 15 years – in private ownership.