2023-05-22 12:32:07 ET
The U.K. government on Monday reduced its stake in NatWest Group ( NYSE: NWG ) to ~38.6% in its sixth sale of the bank's shares since the government acquired majority ownership of the bank after the 2008 financial crisis.
The U.K. Treasury, which had owned as much as 84% of the bank's shares, plans to fully divest its shareholding by 2025-2026. NatWest ( NWG ) paid 268.4 pence per ordinary share, or ~£1.26B (US$1.57B), for 469.2M shares through a directed buyback.
"Today’s sale is another major milestone in returning NatWest to full private ownership as promised," said Andrew Griffith, Economic Secretary to the Treasury, in a statement. "The government has now sold well over half of its shareholding."
Monday's transaction represents 4.95% of NatWest's ( NWG ) issued ordinary shares outstanding. The off-market purchase is expected to settle on May 24. NWG American depositary shares rose 0.9% in Monday afternoon trading in the U.S.
The buyback would have reduced NWG's CET1 ratio of 14.4% at March 31, 2023 by 71 basis points. Tangible net asset value per share at March 31 was 278 pence, pro forma TNAV per share including the payment of the 2022 final dividend of 10 pence would be 268 pence, and the proposed direct buyback transaction would be TNAV per share neutral.
NatWest ( NWG ) plans to cancel 336M of the shares and hold the remaining 133M in its treasury. Keeping some shares in its treasury gives the company the ability to cancel or re-issue the ordinary shares at a later date, which may provide it with flexilibility in managing its capital base.
In June 2022, the U.K. government extended its trading plan to sell part of its shareholding in NWG for another 12 months, saying it would only dispose of its shareholding when it "represents value fo the money to do so and market conditions allow."
More on NatWest:
- NatWest: Cheap Again After the Recent Sell-Off
- NatWest Group: U.K. Mortgage Crisis May Greatly Impair Equity
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U.K. government sells another chunk of NatWest Group shares for $1.57B