UK Government Cuts NatWest Stake Below 20% in Historic Move

The UK Government's stake in NatWest Group falls below 20% for the first time since the 2008 financial crisis, marking a significant milestone in the bank's journey.

The UK Government's stake in NatWest Group has decreased to below 20% for the first time since the bank was nationalized during the 2008 financial crisis. A recent stock exchange announcement confirmed that the Treasury's stake in the bank now stands at 19.97%, a slight decrease from the previous percentage. NatWest, formerly known as Royal Bank of Scotland, received significant bailouts during the financial crisis, leading to the government holding an 84% stake in the bank.

UK Government Cuts NatWest Stake Below 20 percent in Historic Move

Over the years, the Treasury has been gradually reducing its stake in NatWest Group, which also includes Coutts. In 2018, the government owned 62% of the group, which decreased to 37.98% by December. In March of this year, the government's stake fell below 30%, resulting in the loss of its status as a controlling shareholder in the bank. Earlier in the year, NatWest reached out to shareholders to seek support for increasing the amount of stock the bank could repurchase from the government in a year, from just under 5% to 15%.

The shares that have been sold so far were purchased by institutional investors. The Treasury had planned to conduct a public share sale this summer to attract a new generation of retail investors, but this was postponed due to the General Election. With the stake falling below 20%, the Treasury will no longer be considered a related party to the bank one year from now, according to the new listing rules.

The UK Government's decreasing stake in NatWest Group marks a significant milestone in the bank's journey since the financial crisis. The gradual sell-off of shares reflects a shift in ownership and governance, paving the way for potential changes in the bank's future direction.