‘Milestone’ for NatWest as UK government no longer leading shareholder

The British government is no longer the controlling shareholder in NatWest – the bank it bailed out at the height of the global financial crisis – and has reduced its stake in the lender to below 30pc, the UK’s finance ministry said yesterday.

Around a third of the total cost of bailing out the former Royal Bank of Scotland (RBS), now NatWest, was linked to losses at its Ulster Bank unit in Ireland.

“This is a significant milestone demonstrating we’re making excellent progress on fully returning NatWest to private ownership,” UK economic secretary Bim Afolami said in a statement.

The UK government’s ownership of the former RBS dipped below 30pc after the sale of further stock to institutional investors under the government’s trading plan. The state’s holding in the bank was once as high as 84pc.

The Ulster Bank business in Ireland was broken up over the last two years, with large elements sold to AIB and PTSB, and NatWest acquiring a stake in Ireland’s PTSB as a result.

Meanwhile, the UK government has taken steps to try to accelerate the return of NatWest to private hands by a target of 2026, and is planning the sale of a chunk of its stock to the public as early as June.

The reduction to a below 30pc shareholding means the government is technically no longer classed as a controlling shareholder under UK listing rules, which eases some restrictions on appointments of directors.

A NatWest spokesperson said the bank was pleased with the recent momentum the government had shown in returning the bank to private ownership.

NatWest last week wrote to its shareholders seeking approval to buy back up to 15pc of its stock from the government, up from a previous cap of 5pc, as part of efforts to speed up privatisation.

Meanwhile, in Ireland the Ulster Bank business is close to being shut down.

In 2022, Ulster Bank sold the majority of its commercial loan book to AIB and transferred a relatively small number of employees to the bank, and subsequently sold its tracker mortgages to the same bank.

Ulster Bank then sold its performing non-tracker mortgages to PTSB along with 25 branches, a performing micro-SME loan book, asset finance business and associated staff.

The most recent accounts for 2023 show Ulster’s total assets were reduced from €14bn at the end of 2022 to €2.2bn by December 31, 2023. During the financial year the business paid €1.1bn to NatWest in dividends.

The terms of the sale of Ulster Bank assets to PTSB have also left NatWest with a residual shareholding in the now third-biggest Irish bank, originally of close to 17pc but that was cut last year to 11.7pc after a partial sale.

It still leaves NatWest as the single biggest shareholder after the Irish Government, with both heavily tipped to make further reductions.