NatWest reprivatisation nears completion as government stake falls below one per cent

The government is on the cusp of fully reprivatising NatWest, with the taxpayers’ shareholding in the bank now reduced to less than 1 per cent. This latest step marks the near-conclusion of a process that began a decade ago following the bank’s £45.5 billion state bailout during the 2008-09 financial crisis.

The bailout, which left taxpayers holding more than 84 per cent of what was then the Royal Bank of Scotland Group, has been steadily unwound through a series of share disposals. The announcement, disclosed in a stock exchange filing, confirms the state now owns just 0.9 per cent of NatWest. The reduction in recent months has been driven by a trading plan introduced in 2021, which gradually sells small blocks of shares into the stock market.

It has been a lengthy and financially challenging process. Since the first share sales in 2015, initiated by then-Chancellor George Osborne, the government has consistently sold shares at prices below the average 502p per share that taxpayers paid to rescue the bank. This means taxpayers have borne losses on every disposal, although NatWest shares are now within close reach of this break-even level, closing at 498p on Thursday.

The reprivatisation represents a significant milestone in the aftermath of the 2008 financial crisis. With the government’s exit from NatWest, the taxpayer will no longer hold major shares in any institution that was bailed out during the crisis, as Lloyds Banking Group was fully reprivatised in 2017. Nationalised entities such as Northern Rock and Bradford & Bingley have also been wound down over the years.

NatWest has undergone radical restructuring since the bailout, including significant downsizing and strategic refocusing under the stewardship of four different chief executives. Current CEO Paul Thwaite has led the group onto a more ambitious growth trajectory, including acquiring most of Sainsbury’s banking operations and a £2.5 billion mortgage portfolio from Metro Bank in recent years. Earlier this year, the group attempted to make an acquisition of Santander’s UK high street operations, although the bid was rejected by the Spanish lender.

A NatWest spokesperson commented: “Returning the bank to full private ownership is an ambition we share with the government, and one that we believe is in the interests of all our shareholders. We welcome the progress that the Treasury continues to make.”

For Thwaite and his leadership team, the government’s exit clears the way for NatWest to pursue its strategies with greater autonomy, marking the start of a new chapter for the lender after years under state control.