The UK government has sold £1.26bn of NatWest shares back to the bank, which it bailed out in a near £46bn deal in 2008.
The sale will reduce the taxpayer’s stake in the high street bank, formerly known as the Royal Bank of Scotland Group, from 41.4% to 38.6%.
Over the past decade, shares in NatWest Group, which has a market value of about £25bn, have tended to trade at barely half the average price of the bailout.
NatWest has agreed to buy about 469m shares from HM Treasury at a price of 268.4p a share – the price at which they closed on Friday night.
“This transaction reduces government ownership below 40% and demonstrates positive progress on the bank’s strategic priorities and the path to privatisation,” said the NatWest group chief executive, Alison Rose.
Last month, the government extended its plan to sell off its stake in NatWest by another two years, after weeks of banking turmoil that hit the lender’s shares and temporarily fuelled fears over a fresh financial crisis.
UK Government Investments (UKGI), which manages the shares on behalf of the Treasury, said the scheme to strategically sell portions of the British taxpayer’s shareholding would now run until August 2025.
The original one-year trading plan, launched in mid-2021, was meant to offload up to 15% of the shares by drip-feeding them back into the private market, before being extended to mid-August this year.
“UKGI and HM Treasury will keep other disposal options under active consideration, including by way of accelerated bookbuilds, when market conditions permit,” the government said on Monday.
The timeframe is twice as long as it took for the government to offload its holding in Lloyds Banking Group, which bought HBOS in a government-orchestrated rescue plan at the height of the financial crisis and was handed a £20.3bn bailout.
Lloyds bought back the last of its shares from the government in 2017.