NatWest Group Plc has agreed to buy back £1.26 billion ($1.6 billion) of its shares from the UK government as the Treasury continues to sell down its stake after a bailout during the financial crisis over a decade ago.
(Bloomberg) — NatWest Group Plc has agreed to buy back £1.26 billion ($1.6 billion) of its shares from the UK government as the Treasury continues to sell down its stake after a bailout during the financial crisis over a decade ago.
The off-market purchase of 469.2 million shares will be made at Friday’s closing price of 268.4 pence, according to a statement Monday. The deal will see the Treasury’s voting rights in the lender drop to about 38.6% from about 41.4% previously.
NatWest’s shares were trading up 0.6% as of 8:16 a.m. in London.
The government will “keep other disposal options under active consideration, including by way of accelerated bookbuilds, when market conditions permit,” it said.
In April, the government announced the extension of a plan to sell more of its stake in NatWest, which was around 84% at its peak. The latest disposal means the UK has sold more than half its shareholding.
“This transaction reduces government ownership below 40% and demonstrates positive progress on the bank’s strategic priorities and the path to privatisation,” Chief Executive Officer Alison Rose said in a statement.
The UK remains NatWest’s biggest shareholder about 15 years after it rescued what was then Royal Bank of Scotland in a £45.5 billion bailout.
At its first-quarter results last month, NatWest’s guidance stoked worries that the boost to margins from higher interest rates was starting to fade. The bank is also due to start the search for a new chair as Howard Davies, 72, prepares to step down by mid-2024.
Read More: NatWest Chair Davies Says Bank Will Start Search for Successor
Goldman Sachs International is acting as privatization adviser to the government, while the trading plan is being managed by Morgan Stanley & Co. International Plc.
(Updates with share price move, adds details in penultimate paragraph)
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