By Yadarisa Shabong and Lawrence White
LONDON (Reuters) -The British government has sold 1.24 billion pounds ($1.58 billion) worth of shares in NatWest Group back to the lender, it said on Friday, decreasing its stake to around 22.5% from nearly 26% as it looks to end its ownership of the bank.
The transaction also comes as Britain’s Treasury department confirmed it had shelved a mooted plan to sell shares to the general public, until after the July 4 general election.
“A retail offer will not happen during the election period,” a Treasury spokesperson told Reuters on Friday, confirming media reports last Sunday.
The deal is the latest step in NatWest’s nearly two-decade return towards private ownership after its state rescue during the 2008 financial crisis, in contrast with the U.S. which had sold its major investments in rescued banks by 2011.
The state’s plan, which involves selling shares in the market and runs until August 2025, had not been paused in connection with the off-market purchase, the government said on Friday. Finance Minister Jeremy Hunt has committed to return NatWest to full private ownership by the end of 2026.
The London-listed bank bought back 392 million shares from the government in an off-market purchase at 316 pence a share, as part of its existing contract with the state.
Shares in NatWest were up 0.35% at 317 pence by 1030 GMT on Friday. They have gained about 45% this year.
The government’s stake in the former Royal Bank of Scotland, which was bailed out in 2008 at the height of the global financial crisis, was once as high as 84%.
By March this year, it was no longer a controlling shareholder in the lender after its stake dipped below 30% after the sale of stock to institutional investors.
The settlement of the off-market purchase will occur on June 4, the government said in a statement.
Last month, NatWest reported first-quarter profit that fell by a less-than-expected 27%, having weathered a sector-wide squeeze on income.
($1 = 0.7860 pounds)
(Reporting by Yadarisa Shabong in Bengaluru and Lawrence White in London; editing by Savio D’Souza, Jason Neely and Sriraj Kalluvila)
