NatWest buys back 1 billion pounds of its shares, accelerating full privatisation

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LONDON (Reuters) -NatWest has bought back 1 billion pounds ($1.29 billion) worth of its own shares from Britain’s government, the bank said on Monday, as it continues its exit from state ownership following its bailout in the 2008 financial crisis.

UKGI, which manages the government’s stake in the bank, said as a result of the transaction the government’s ownership would fall from around 14% of the company to around 11%.

The deal is the latest step in NatWest’s nearly two-decade return towards private ownership after its state rescue during the 2008 crisis, in contrast with the U.S. which had sold its major investments in rescued banks by 2011.

“This transaction represents another important milestone on the path to full privatisation,” CEO Paul Thwaite said in the bank’s statement.

“We believe it is a positive use of capital for the bank and for our shareholders,” he said.

The transaction is the second such directed buyback in the last 12 months, and brings the total of its own shares NatWest has bought from the government this year to 2.2 billion, representing nearly 8% of its capital.

The state’s ownership of the bank has fallen from around 38% at the end of December 2023 to 11% as of Monday’s deal.

($1 = 0.7739 pounds)

(Reporting By Lawrence White; Editing by Jan Harvey)