By Scott Wright
A LANDMARK moment was reached by NatWest Group, owner of Royal Bank of Scotland, on its long journey back to recovery yesterday when UK taxpayers’ stake was cut to below 50 per cent – for the first time since before the financial crisis.
The Edinburgh-headquartered bank announced that it had acquired 549,851,147 ordinary shares from the Treasury for £1.2 billion via a directed buyback. With those shares accounting for 4.91 per cent of the issued share capital in the bank, the off-market purchase reduced the stake held by the UK Government to 48.06% of the company’s voting rights.
NatWest, which changed its corporate name from Royal Bank of Scotland in July 2020, had been majority owned by UK taxpayers since its £45.5bn bail-out during the financial crisis of 2008 and 2009. The Treasury’s shareholding was originally as high 84% in December 2009, before gradually being whittled down in recent years.
In the years after its rescue the bank incurred a string of hefty losses and was dogged by a series of conduct issues as senior leaders strived to repair its reputation, reduce the scale of its operations, and ultimately restore the lender to private hands.
In 2008, when the bank posted an attributable loss of £24.3 billion, it had 199,800 employees in 53 countries, and £2.2 trillion of assets on its balance sheet. By 2021, when the lender made an attributable profit of £3bn, its operational footprint was considerable smaller, with 56,200 staff on its payroll in 18 countries, and £782bn of assets.
The bank, which has been led by Alison Rose since November 2019, tends to attract considerably less controversy now than it did in the decade that followed its bailout, though in December it was fined £264.8m following convictions for three offences of failing to comply with money laundering regulations.
The bank has continued to reduce its branch network, and in February announced plans to remove a further 32 from its network. The cuts would leave the bank with 814 branches in the UK.
Ms Rose said yesterday: “We believe this transaction to be a good use of capital for the bank and our shareholders. Reducing government ownership below 50% 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.
“We are proud of the role we play in supporting our 19 million customers throughout the UK, including one in four businesses. By delivering on our strategic priorities, and by forging closer and deeper relationships with our customers at every stage of their lives, we will help them to grow and to thrive.”
Shares in the bank closed unmoved at 220.5p last night.
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