UK government no longer a controlling shareholder in Natwest after taking stake below 30 per cent
The UK government has stopped being a controlling shareholder in Natwest after reducing its stake to below 30 per cent.
The Big Four bank revealed in a stock market filing on Monday that the Treasury’s stake had fallen to 29.82 per cent on 22 March through its daily trading plan.
The drop below 30 per cent means the Treasury is no longer classed as a “controlling shareholder” in the bank, which placed additional legal and regulatory requirements on the government. For example, the bank will no longer need two votes on appointments of its directors.
The government took an 84 per cent stake in Natwest, then known as Royal Bank of Scotland, for an average price of 502p per share to rescue it during the financial crisis in 2008.
Taxpayers paid £45.5bn for the bailout but have lost out as Natwest’s share price has halved since then. The Treasury has recouped around £14.5bn from its share sales so far, including £5.8bn from its trading plan, which began in August 2021.
The government’s stake has fallen around eight per cent so far this year, and it plans to fully privatise the bank by 2026.
The Treasury is planning to offer part of its remaining stake in Natwest to retail investors as early as June as part of wider efforts to boost UK capital markets activity.
Natwest is also able to make deals with the Treasury to buy back its shares. The bank has done this three times since 2021 and is next eligible to make a deal in May.
In a letter to shareholders last week, the bank said it was looking for their support to increase how much it could buy back from the Treasury every 12 months from 4.99 per cent to up to 15 per cent.
The proposal is in preparation for new listing rules from the Financial Conduct Authority that are planned to boost interest in London’s stock market.
A Natwest spokesperson said on Monday: “We welcome the government’s continued commitment to returning Natwest Group to private ownership.
“With the government shareholding now below 30 per cent, we have been pleased with the recent momentum to achieving this shared ambition, which we believe is in the best interests of the bank and our shareholders.”
City minister Bim Afolami commented: “This is a significant milestone demonstrating we’re making excellent progress on fully returning Natwest to private ownership.
“In addition to our successful trading plan, we are now looking ahead to a retail offering of Natwest shares which could come as soon as this summer, subject to market conditions and value for money.”