UK government cuts its ownership stake in NatWest Group to 59.8%

NatWest Group plc (LON: NWG) said on Friday that the UK government cut its stake in the company to 59.8% from 61.7%. The insurance holding company said it will buyback £1.1 billion worth of shares from the government at a per-share price of 190.5 pence that matches the price at which the stock closed the regular session on Thursday.

NatWest shares were reported about 0.75% up in premarket trading on Friday and gained another 1.0% on market open. The stock, however, lost half of its intraday gain in the next few hours to trade at a per-share price of 192 pence. In comparison, NatWest Group plc had started the year 2021 at a much lower 159 pence per share.

NatWest to buyback 590.7 million shares from the government

NatWest said that the government offloaded a total of 590.7 million shares; 390.7 million of these, it added, will be cancelled. The remaining, as per NatWest Group, will be held in its treasury. The Edinburgh-based company also highlighted that the off-market purchase will be settled on 23^rd March.

Chief Executive Alison Rose commented on the news on Friday and said:

“We believe this is a good use of capital for the bank and our shareholders. We retain a strong capital position, well above our target range, which ensures that we remain well-placed to navigate the uncertain environment and continue to support our customers.”

In separate news from the United Kingdom, the UK’s Competition and Markets Authority (CMA) ordered British housebuilders Countryside Properties and Taylor Wimpey to drop unfair ground rent terms on Friday.

The UK government once had an 84.4% ownership stake in NatWest

In an earlier announcement on 3^rd March, the UK government had expressed plans of pulling out of NatWest via selling its entire majority stake. It had injected capital in the bank holding company at the peak of the economic crisis that shook the global financial markets in 2008. The UK government once had an 84.4% ownership stake in NatWest Group plc.

In December 2020, NatWest said it will buy Metro Bank’s mortgage portfolio for £3.13 billion. NatWest Group plc performed fairly downbeat in the stock market last year with an annual decline of close to 30% as the COVID-19 crisis wreaked havoc on the global financial markets.

At the time of writing, the British banking and insurance holding company has a market cap of £23.35 billion.