finance news

British Govt to sell £1.1B in NatWest shares to reduce taxpayer stake

British Govt to sell £1.1B in NatWest shares to reduce taxpayer stake
British Govt to sell £1.1B in NatWest shares to reduce taxpayer stake

The British government has reportedly launched the sale of a £1.1 billion holding in NatWest bank. The move is intended at cutting the stake of the British taxpayer, which was bailed out over a decade ago during the financial crisis of 2008.

As per the UKGI (UK Government Investments), in the second selldown in 2021, it would proceed with the sale of 580 million shares that represent almost 5% of NatWest’s stock. The UKGI is responsible for the management of shares on behalf of the Treasury.

According to reliable sources, the government had bailed out NatWest, previously called the Royal Bank of Scotland, at the peak of the financial crisis in 2008. Then, it had injected a sum of £45 billion for keeping the bank afloat for preventing the hold of an even adverse meltdown in the banking system.

It is to be noted that taxpayers are not anticipated to recover all of the money that was pumped into the bank. The price of the shares is still less than half of the value that was paid by the government more than a decade ago.

Additional highlights by UKGI state that the stake of the government in NatWest would be decreased to nearly 54.8% following the completion of the disposal. The COVID-19 pandemic has pushed the borrowing of the government to record levels, after the exchequer registered a record peacetime budget deficit of £303 in the financial year ending in March.

For the record, NatWest altered its name from RBS in 2020. The banking group still has the Royal Bank brand for its operations in Scotland, alongside Ulster Bank in Northern Ireland and NatWest in England. The bank recently recorded an escalation to £946 million in pre-tax profits for the first quarter, in comparison to a sum of £519 million, which was registered a year earlier.

Source credit: https://www.theguardian.com/business/2021/may/10/treasury-to-sell-11bn-in-natwest-shares-cutting-taxpayer-stake

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