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Bank transaction

NatWest RBS cuts state’s holding with shares buyback

RBS Gogarburn

NatWest Group is based at RBS headquarters in Edinburgh

NatWest (RBS) Group has cut the state’s holding to 59.77% from 62% after the bank agreed with the Treasury to make a £1.125 billion off-market buyback of ordinary shares in the bank.

It paid 190.5p per share for the stock representing 4.86% of the issued share capital. The purchase is expected to settle on 23 March.

NWG intends to cancel 390,730,325 of the shares and hold the remaining 200,000,000 in treasury.

Holding ordinary shares as treasury shares gives the company the ability to cancel such shares at a later date, or re-issue treasury shares quickly and cost effectively, and may provide the company with additional flexibility in the management of its capital base, including the allotment of ordinary Shares in relation to its employee share plans.

Following settlement of the transaction HM Treasury will hold 6,918,753,194 ordinary shares, representing 59.77 per cent. of the Company’s issued share capital excluding treasury shares.

Based on NWG’s position on 31 December 2020, NWG’s CET1 ratio will reduce by around 66 basis points and tangible equity per share will increase by around 4 pence.

The off market purchase will see NWG contribute £500 million to its main pension scheme in line with the memorandum of understanding announced on 17 April 2018. 

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