HomeBusinessNatWest ends 14 years of state control: Taxpayer stake drops below 50%

NatWest ends 14 years of state control: Taxpayer stake drops below 50%

NatWest ends 14 years of state control as Treasury’s stake in lender drops below 50%… but taxpayers are left sitting on an £18bn loss

Taxpayers no longer own the majority of NatWest for the first time since the bank was rescued with a near-£50billion bailout in the depths of the financial crisis.

In a highly symbolic move, the Treasury’s stake fell below 50 per cent after it sold £1.2billion of shares back to the lender.

The transaction came 14 years after ministers stepped in to rescue NatWest – then known as Royal Bank of Scotland. In all, £45.5billion was pumped into the bank as the Government took an 84 per cent holding.

End of an era: In a highly symbolic move, the Treasury’s stake in Natwest fell below 50% after it sold £1.2bn of shares back to the lender

Boss Alison Rose said the latest share sale was an ‘important milestone’ for the company. But taxpayers have been left sitting on a loss of around £18billion.

The Government’s 48 per cent stake is worth £12billion and it has recouped £15.5billion in dividends and share sales – adding up to just £27.5billion of the initial £45.5billion package.

The Treasury and NatWest have said it is inevitable not all of the money the Government spent would be recouped because it is a smaller bank than before the crisis and it was a rescue deal rather than an investment.

Ministers plan to sell the remaining stake in tranches between now and 2025-26.

RBS was effectively bust when it was rescued during the financial crisis following the disastrous takeover of toxic Dutch rival ABN Amro, which briefly made it the world’s largest bank.

The company had rapidly expanded under the reign of then-boss Fred ‘the Shred’ Goodwin, who was dubbed the ‘world’s worst banker’ and was stripped of his knighthood for his role in the crisis.

If RBS had collapsed, it would likely have taken the British economy down with it.

John Glen, Economic Secretary to the Treasury, said: ‘This sale means that the Government is no longer the majority owner of NatWest Group and is therefore an important landmark in our plan to return the bank to the private sector.

‘We will continue to prioritise delivering value for money for the taxpayer as we take forward this plan.’

Rose said: ‘Reducing government ownership below 50 per cent is an important milestone for NatWest Group and a further demonstration of the progress we are making as we continue to deliver for our customers and shareholders.’

She added that buying the shares would be a ‘good use’ of money. Analysts said the latest cash could not come at a better time for the Treasury.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ‘It’s been a long road back from emergency purchase of the beleaguered Royal Bank of Scotland.

‘This is the fifth sale, returning £1.2billion to Treasury coffers, at a time when the Government sorely needs the cash with the costs of borrowing mounting.’

Rose, 53, took over in 2019 and soon launched a restructuring and rebrand that changed the name from RBS to NatWest. The company owns both banks as well as Coutts, a private banking and wealth management division that traces its history back to 1692.

Rose told the Mail last month that she is determined to repay the taxpayer in full for the support given during the financial crisis.

She said: ‘That’s my plan. My job is to build a bank that is valuable to the economy, my customers and my colleagues.’

Last month NatWest said it would start paying cash bonuses to its top bosses for the first time since the Goodwin era as it prepares to return to private control.

It made the announcement alongside results that showed it made profits of £4billion last year.

NatWest fell 0.3 per cent to 219.8p.


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