UK government’s NatWest stake falls below 10%

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The UK government has cut its stake in NatWest to below 10 per cent, bringing the high-street bank closer to full private ownership.

The latest reduction, disclosed on Friday, is a sharp drop from the 38 per cent stake the state owned in the lender only a year ago.

The government has been a shareholder in the bank since its £46bn bailout at the height of the financial crisis, when it was known at RBS. It started selling its shares in 2015 and now owns 9.99 per cent.

“We are pleased with the sustained momentum in reducing HM Treasury’s stake in NatWest Group. Returning the bank to full private ownership is a shared ambition and one that is in the interest of all our stakeholders,” the bank said.

Speaking at the FT’s Global Banking Summit this month, NatWest chief executive Paul Thwaite said he expected the bank would be fully private in 2025. While the UK government had previously committed to returning the bank to private hands by 2025 or 2026, its exit was accelerated this year by the bank buying back £2.2bn of its own stock.

Thwaite, who took over as chief executive in July last year said returning to private ownership would be a “symbolic” moment that would allow the bank to deploy capital more strategically.

“It means we can talk about the future of the bank, the potential of the bank, rather than having to talk about its past,” he said at the time.

Thwaite has indicated that he will seek to expand the bank’s wealth management business, which includes private lender Coutts, initially through organic growth but without ruling out acquisitions in future.

Shares in NatWest have risen nearly 90 per cent since the start of the year while the bank upgraded its annual forecast in October thanks to improved margins and growth in its lending and deposit base.

It currently trades around a 1.3 multiple of its book value, compared with 0.75 per cent at the start of the year.

The bank on Friday also appointed Gill Whitehead, a former executive at Google and Ofcom, to its board as a non-executive director. Her appointment is the first by chair Rick Haythornthwaite since the former Mastercard boss succeeded Howard Davies in January.

Haythornthwaite has attracted scrutiny for his role advising PetroSaudi International, after its executives Tarek Obaid and Patrick Mahony were convicted of embezzling more than $1.8bn from Malaysia’s 1MDB wealth fund.