UK government sets out plans to sell another chunk of RBS owner NatWest

The taxpayer’s stake in Royal Bank of Scotland parent NatWest Group is set to be trimmed further after the UK government outlined plans to offload more shares.

UK Government Investments (UKGI), which manages the Treasury’s shareholding in the banking giant, said it was aiming to sell shares over 12 months starting August 12 under a pre-arranged trading plan overseen by Morgan Stanley.

It plans to sell up to, but no more, than 15 per cent of the total shares being traded on the market, which would further reduce the current 54.7 per cent taxpayer holding in NatWest.

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In a statement to the stock market, UKGI and the Treasury said it would also keep “other disposal options open” alongside the 12-month trading plan.

NatWest-owned Royal Bank of Scotland has its headquarters and conference facilities at Gogarburn in Edinburgh. Picture: Ian Georgeson

The move comes after the government sold 580 million NatWest shares in May, raising some £1.1 billion for the taxpayer.

NatWest – formerly RBS Group – has been majority-owned by the taxpayer since it was bailed out for almost £46 billion in 2008 at the height of the financial crisis.

The latest share sale announcement takes the government a step closer to ending its status as majority owner of the bank and its commitment to return NatWest to the private sector by 2025.

The government initially acquired an 82 per cent stake in RBS for 440p a share to save the bank from complete collapse during the credit crunch.

According to recent estimates from the Office for Budget Responsibility, of the £45.8bn spent to prop up the bank during the crisis, the taxpayer is expected to make a loss of £38.8bn.

In April, NatWest Group reported a surge in profits after cutting reserves for debts that may turn sour due to the pandemic.

Earnings across the sector are bouncing back as banks begin to trim their reserves for loan losses thanks to a brighter outlook for the UK economy due to the vaccination programme and easing of lockdown restrictions.

NatWest reported pre-tax operating profits of £946 million for the first three months of 2021 against £519m a year earlier – an increase of 82 per cent.

Despite the improved profits, the bank did not change its outlook for the full year.

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