UK government reduces stake in NatWest

UK government reduces stake in NatWest Source: NatWest

The government in the UK has reached an agreement with the NatWest as it reduces its stake in the bank to below 50 percent for the first time since it was bailed out in 2008.

According to the bank, the company has reached an agreement with the UK Treasury to acquire 549 million shares, roughly five percent of the bank’s capital, for a price of 220.5 pence (268.50 cents).

The sale will raise 1,212.4 million pounds (1,454 million euros) for the government, coming at a time when the country’s borrowing costs at an all-time high.

The sale will see the government’s voting rights reduced to around 48 percent effectively leaving the company’s board in control.

Importantly for the government and for the former Chancellor of the Exchequer Gordon Brown, the sale represents a sizeable profit on the original bail out of 45,000 million pounds sterling (53,965 million euros).

NatWest along with a number of other banks was bailed by the government following the banking crises caused by the collapse of the mortgage market in the US. Many UK banks had bought loans from US mortgage houses only for these to be classified as junk with homeowners have little possibility of repaying them,

The share price has since the announcement that UK government reduces its stake in NatWest, risen by around 1.5 percent.


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Written by

Peter McLaren-Kennedy

Originally from South Africa, Peter is based on the Costa Blanca and is a web reporter for the Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]

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