Selling down

NatWest shares rise on Treasury sale extension


RBS was bailed out before the board downgraded the brand (pic: Terry Murden)

Shares in NatWest Group rose after the UK government said it will continue selling down its stake in the bank for a further year.

Extending the trading plan supports the government’s intention to return NatWest Group to full private ownership by 2025-26, after acquiring the shareholding as a result of the global financial crisis in 2008.

The trading plan unveiled last July will now terminate no later than 11 August 2023, managed by US investment bank Morgan Stanley. The number of shares sold on any one day will be determined by the share price and market conditions.

The Treasury said that extending the trading plan does not preclude it from using other options to execute future transactions that achieve value for money for taxpayers, including further directed buybacks and/or accelerated bookbuilds.

Since the plan was established, the UK Treasury has sold 703.5 million shares for £1.6 billion, it said, at an implied average sale price per share of about 227p that is well below the 502p the Treasury paid to bail out NatWest, then Royal Bank of Scotland Group, in 2008.

The Treasury has been offloading stock in tranches, all below the bailout price. It said there was never any commitment to claw back the full £45 billion spent on rescuing the bank. In March it returned to majority private ownership for the first time since the bailout. The government’s stake now stands at around 48.5%.

Natwest shares were up 3% at 228p. The stock is up 12% in the past 12 months.

Analysts at Jefferies have raised NatWest to a buy rating from hold, with a price target of 359p from 246p previously.

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