Taxpayer stake cut in Natwest share sell-off

THE taxpayer’s stake in Natwest has fallen below 60pc for the first time since the bank was bailed out in the financial crisis.

Ministers signed off the sale of £1.1bn of shares as part of a commitment to return the lender to the private sector by 2025. The deal saw Natwest – which until recently was called Royal Bank of Scotland – buy back 591m shares from the Government. The move cut the taxpayer’s stake from 61.7pc to 59.8pc while at the same time triggering a £500m contribution to the Natwest pension scheme.

The Government initially took an 82pc stake in RBS in a £46bn bailout in 2008 to save it from collapse during the depths of the financial crisis.

Alison Rose, Natwest’s chief executive, said the buyback was ‘a good use of capital for the bank and our shareholders’.

The latest sale of the Treasury’s stake comes at the end of a week that saw Natwest dragged into a massive money laundering scandal. City regulators at the Financial Conduct Authority launched criminal proceedings against the High Street bank and accused it of failing to scrutinise a string of suspicious payments by a business customer.

The FCA said the customer – Bradford-based jewellery wholesaler Fowler Oldfield – paid £365m into its Natwest account. Around £264m of that was deposited in cash.

The FCA said the bank ‘failed to adequately monitor and scrutinise this activity’.

This caused another headache for Rose (pictured), who took over in 2019 and is trying to restructure the bank and rebuild its reputation.

She recently ditched the bank’s RBS name and rebranded as Natwest in a bid to draw a line under past scandals. The sale of the taxpayer stake is seen as crucial to restoring the bank to health. Russ Mould, investment director at AJ Bell, said: ‘It’s easy to forget that the Government still owns a big stake in Natwest, given it has been 13 years since the bank was first bailed out. Even though a big chunk of shares is now heading back to Natwest, it could still be a long time before the bank is able to become a fully privatised business again.’ Taxpayers’ current stake in is worth around £13bn. The Office for Budget Responsibility estimates that of the £46bn spent to prop up the bank, almost £39bn will be lost. Natwest and the Treasury have said previously it was inevitable that not all of the cash would be recouped because it is a smaller bank than it was before the financial crash and it was a rescue deal rather than an investment.