Financial Services

UK government sells €1.5 billion of Ulster Bank parent’s shares back to bank

Sale will reduce the taxpayer’s stake in the high street bank, which owns Ulster Bank in Ireland, from 41.4% to 38.6%

The UK Government has sold £1.26 billion of its stake in Natwest back to the banking firm. Photograph: Matt Crossick/PA Wire

Mon May 22 2023 - 09:23

The UK government has sold £1.26 billion (€1.5 billion) of NatWest shares back to the bank, which it bailed out in a near £46 billion deal in 2008.

The sale will reduce the taxpayer’s stake in the high street bank, which owns Ulster Bank in Ireland, from 41.4 per cent to 38.6 per cent.

Over the past decade, shares in NatWest Group, which has a market value of about £25 billion, have tended to trade at barely half the average price of the bailout.

NatWest has agreed to buy about 469 million shares from HM Treasury at a price of 268.4p a share – the price at which they closed on Friday night.

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“This transaction reduces government ownership below 40 per cent and demonstrates positive progress on the bank’s strategic priorities and the path to privatisation,” said the NatWest group chief executive, Alison Rose.

Last month, the government extended its plan to sell off its stake in NatWest by another two years, after weeks of banking turmoil that hit the lender’s shares and temporarily fuelled fears over a fresh financial crisis.

UK Government Investments (UKGI), which manages the shares on behalf of the Treasury, said the scheme to strategically sell portions of the British taxpayer’s shareholding would now run until August 2025.

The original one-year trading plan, launched in mid-2021, was meant to offload up to 15 per cent of the shares by drip-feeding them back into the private market, before being extended to mid-August this year.

“UKGI and HM Treasury will keep other disposal options under active consideration, including by way of accelerated bookbuilds, when market conditions permit,” the government said on Monday.

The timeframe is twice as long as it took for the government to offload its holding in Lloyds Banking Group, which bought HBOS in a government-orchestrated rescue plan at the height of the financial crisis and was handed a £20.3 billion bailout.

Lloyds bought back the last of its shares from the government in 2017. – Guardian

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