NatWest Buys ￡1 Billion of Shares as UK Offloads Stake

Jenny Surane
2 min read

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(Bloomberg) -- NatWest Group Plc bought back ￡1 billion ($1.29 billion) of its shares from the UK government as the Treasury continues to sell down its stake in the lender.

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The off-market purchase of 262.6 million shares brought the Treasury’s voting rights in the lender to about 11.4% from about 14.2% previously, according to a statement.

The transaction is the first time that NatWest has done two directed buybacks in a twelve-month period. It comes after regulators simplified the country’s listing rules earlier this year and shareholders approved a plan that would allow it to increase the limit of directed share buybacks to 15%, up from about 5% previously.

“This transaction represents another important milestone on the path to full privatisation,” NatWest Chief Executive Officer Paul Thwaite said in a separate statement. “We believe it is a positive use of capital for the bank.”

Separately, NatWest is in the final stages of selling new debt in its home currency on Monday. The UK lender will raise ￡500 million in five-year notes at 90 basis points over UK gilts, according to a person familiar with the matter. Investors’ bids were over ￡1.7 billion at the last available update.

NatWest shares rose as much as 3.3% on Monday, making it one of the best performers in the FTSE 100 Index. The stock has climbed by about 79% so far this year.

The UK government has been rapidly selling down its stake in NatWest this year after ending 2023 with about 38% voting rights in the company. The wind down has come through both directed buybacks as well as a series of open market sales in recent months.

Under former Prime Minister Rishi Sunak, UK officials had been formulating plans to sell the shares the government holds in the bank to retail investors as it sought to offload the entire stake by 2026. The Labour Party, which won the election, has since abandoned those efforts.

UK Chancellor of the Exchequer Rachel Reeves has considered offloading a substantial portion of the government’s stake to institutional shareholders, Bloomberg News has reported previously.

--With assistance from Helene Durand.

(Updates with bond issuance in fifth paragraph, stock reaction in sixth.)

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