Government offloads another £1bn worth of shares in NatWest, bringing full privatization of the bank a step nearer
In a recent development, NatWest, one of the UK's largest banks, has been actively engaged in a share buyback program, marking a significant step in its post-privatisation strategy. The buyback program, valued at £750 million, was announced for the second half of 2025 [1][4][5].
On August 14, 2025, NatWest purchased nearly 1.93 million ordinary shares from Merrill Lynch International at an average price of 552.55 pence per share, furthering its existing buyback plan [1]. This move is part of a broader capital return strategy following the full privatization of the bank earlier in the year.
The UK government completed the sale of its remaining NatWest shares by August 13, 2025, effectively returning NatWest to private ownership for the first time since the bailout more than 17 years ago [3]. The bank's share price has almost doubled over the past 12 months, reflecting the market's confidence in its operations.
The decision to abandon a public share sale for NatWest was made in July 2024, due to it not representing value for money [6]. Labour chancellor Rachel Reeves stated that a retail share sale of NatWest would have required offering discounts worth hundreds of millions of pounds, which would be damaging for taxpayers [7].
Despite the absence of a retail share sale currently underway or announced, the focus remains on share repurchases and the government's exit from ownership. This approach enables NatWest to optimise shareholder returns through buybacks and dividends. The bank's dividend was increased by 58% in line with this strategy [4][5].
It's worth noting that the bank's operating pre-tax profit between July and September stood at £1.7 billion, nearly a third higher than the £1.3 billion generated during the same period last year [2]. The increase was partly driven by an increase in lending and the amount of money customers deposited with the bank.
Sarah Coles, head of personal finance at Hargreaves Lansdown, expressed disappointment that retail investors would be excluded from the sale of NatWest shares, given that retail investors hold a greater proportion of their assets in the UK compared to pension funds [8].
Despite the current situation, the privatisation of NatWest continues to edge closer, with analysts forecasting profits of £1.5 billion for the bank [9]. The bank's strong performance and strategic moves suggest a promising future for the institution.
References:
- BBC News
- The Guardian
- City A.M.
- The Telegraph
- Financial Times
- The Independent
- The Times
- Money Observer
- Sky News
Here are two sentences that contain the given words and follow from the text:
- "As a part of its strengthening post-privatisation strategy, NatWest is optimising shareholder returns through buybacks and dividends, making it an appealing opportunity for investors interested in personal finance and business."
- "With the increased dividend, NatWest's new share buyback program, valued at £750 million, positions the bank as an attractive prospect for those actively engaged in investing and finance."
