Government No Longer Holds Largest Share in NatWest as BlackRock Takes Lead

In a significant shift in British banking ownership, the UK government has relinquished its position as the primary shareholder in NatWest, marking a pivotal moment in the bank’s post-financial crisis journey. The Treasury’s stake has dropped to 5.93 per cent, falling behind BlackRock’s 6.4 per cent holding for the first time since the £45.5 billion bailout.

The remarkable transformation from state control began when the government acquired nearly 85 per cent of the then Royal Bank of Scotland during the 2008 financial crisis, purchasing shares at approximately 500p each. The systematic reduction of the government’s position has been executed through a trading programme initiated in 2021, with shares now trading at 478¾p.

NatWest’s chief executive, Paul Thwaite, maintains an optimistic outlook, projecting full private ownership by the close of 2025. The bank’s recent financial performance supports this trajectory, with pre-tax profits reaching £6.2 billion, surpassing market expectations despite challenging economic conditions.

The Labour government’s decision to abandon the Conservative’s retail investor share sale scheme, deemed an inefficient use of public funds, has not impeded the privatisation process. The government’s stake has dramatically decreased from 38 per cent to under 10 per cent in the past year alone.

The banking sector’s landscape continues to evolve, with NatWest demonstrating its strategic prowess through recent acquisitions, including substantial portions of Sainsbury’s banking operations and Metro Bank’s mortgage portfolio. These moves signal a renewed confidence in growth through acquisition, marking a significant departure from the post-crisis caution that dominated the sector.

The transformation of NatWest represents a remarkable recovery story, considering its near-collapse during the financial crisis under its previous RBS identity. The bank’s journey from state rescue to private control serves as a testament to the effectiveness of strategic restructuring and patient divestment in the banking sector.