Britain lowers NatWest stake with US$1.5b share sale

[LONDON] The British government has completed the sale of US$1.55 billion in shares of NatWest, lowering its stake to below 55 per cent in the lender it bailed out over a decade ago.

UK Government Investments (UKGI), the state-owned company that controls the shares, said the they were priced at 190 pence (S$3.55), 4 per cent below Monday's closing price of 197 pence.

NatWest has been majority state-owned following a £45 billion bailout in 2008 during the financial crisis. The sale crystallises a further hefty loss of around £1.8 billion for taxpayers, with shares well below the 502 pence bailout level.

The move edges the bank closer to private ownership, reducing the government's holding from 60 per cent previously.

The government's last sale of stock to outside investors was in 2018, although NatWest directly bought back £1.1 billion of shares last month to reduce the state's holding from 62 per cent.

NatWest shares fell around 4 per cent in early trading to around the latest sale price. They are also below the 2018 sale price of 271 pence a share.

The government said it continued to keep all options and timings under review for future sales.

NatWest's stock price has more than doubled since hitting a low of 90.5 pence in September, as optimism has built about prospects for Britain's economic recovery from the Covid-19 pandemic.

NatWest, formerly Royal Bank of Scotland, has long argued it is unrealistic to expect a profit on the bank's rescue, which was needed to stabilise Britain's financial system.

Two months ago, Britain's financial regulator said it had started a criminal action against NatWest over allegations it failed to detect suspicious activity by a customer depositing nearly £400 million over five years, mostly in cash.

REUTERS