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The UK government is no longer a controlling shareholder in NatWest Group after its stake in the high street lender fell below 30 per cent, the bank said on Monday morning.
The latest milestone in the government’s divestment from the lender — which it was forced to bail out during the global financial crisis — comes ahead of a much hyped and controversial share sale to retail investors over the summer.
The government’s stake in NatWest has come down from more than 45 per cent in late 2022 to 29.8 per cent now through daily sales and a £1.3bn buyback in May last year. At the start of 2024 the government owned just under 38 per cent of the bank.
Falling below 30 per cent means the government is no longer defined under the UK’s listing rules as a controlling shareholder, a class of investor that has certain privileges. This means the bank will be freed from certain requirements, such as holding two votes on appointing directors.
“With the government shareholding now below 30 per cent, we have been pleased with the recent momentum to achieving this shared ambition, which we believe is in the best interests of the bank and our shareholders,” the bank said in a statement.
Last week, NatWest wrote to shareholders asking for support to increase the amount of stock the bank could buy back from the government in a year, from just under 5 per cent to 15 per cent.
During his spring budget this month, chancellor Jeremy Hunt reaffirmed the Treasury’s plan to return NatWest to private ownership by 2026, which includes a public share sale this summer as part of a drive to create a “new generation of retail investors”.
The Treasury has reduced its stake from a peak of 84 per cent by selling blocks of shares to institutional investors, but the summer plans would be the first time it would offer NatWest stock to individuals, most likely at a discount to its market value.
But the share sale has been accused by critics of being politically motivated and costly, and going against years of advice from Treasury officials.
The British government has owned the majority of NatWest, which used to be called Royal Bank of Scotland, since it was rescued at the height of the financial crisis with a £46bn bailout.
The Treasury said on Monday that it continued to keep “all possible disposal methods under active consideration for future sales, including accelerated bookbuilds and directed buybacks”, as well as the retail share offer.
The government has said that any share sale will be conditional upon market conditions and achieving value for money for taxpayers.
Last month, NatWest announced that Paul Thwaite would be the bank’s permanent chief executive, having held the role on a temporary basis after his predecessor, Dame Alison Rose, resigned last summer over a “debanking” scandal involving Nigel Farage.
