UK government sells more NatWest shares

NatWest is now 38.6% state-owned, down from 41.4%, after the UK government sold £1.26bn of shares in the bank.

This was the sixth block sale of NatWest shares since the government bailed out the bank (formerly the Royal Bank of Scotland) during the global financial crisis in 2008.

At its peak NatWest was 84% owned by taxpayers. The government ended its majority ownership in March last year by reducing its holding below 50%.

The intention is to fully exit the shareholding by 2025-2026, subject to market conditions and achieving value for money on the sales.

“This transaction reduces government ownership below 40% and demonstrates positive progress on the bank’s strategic priorities and the path to privatisation,” said NatWest chief executive Alison Rose.

NatWest has a total market capitalisation of about £25bn.

NatWest returns to majority private control

The UK government is no longer the majority shareholder in NatWest after selling £1.2bn worth of shares in the banking group.

It’s the first time since the financial crisis that NatWest — formerly Royal Bank of Scotland (RBS) — has been under majority private ownership.

The group was bailed out by taxpayers at the height of the 2008 financial crisis with a £45bn rescue deal.

After this latest sale of a chunk of its shares, the government’s ownership in NatWest is down from 50.6% to 48.1%. The shares were bought back by NatWest.

The government’s remaining stake in NatWest is worth around £11bn.

NatWest chief executive Alison Rose said the share buyback was an “important milestone”, while John Glen, economic secretary to the Treasury, described it as a landmark moment.

The government had also owned a stake in Lloyds Banking Group since October 2008 but sold its last remaining shares in 2017.

NatWest faces criminal case over money laundering rules

The Financial Conduct Authority (FCA) has launched criminal proceedings against NatWest, alleging that the bank failed to comply with money laundering regulations.

The allegations date back to between 2011 and 2016.

In order to help prevent money laundering, financial services firms in the UK are required to conduct risk sensitive due diligence and ongoing monitoring of their relationships with customers. These regulations apply to a number of different businesses, including banks and building societies, accountants, estate agents and solicitors.

The case concerns the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest. The City watchdog alleges that increasingly large cash deposits were made into the customer’s accounts. Around £365m was allegedly paid into the customer’s accounts, of which around £264m was in cash.

The FCA alleges that NatWest’s systems and controls failed to adequately monitor and scrutinise this activity.

This is the first criminal prosecution under the Money Laundering Regulations 2007 by the FCA and the first time a bank has faced any prosecution under the rules.

No individuals are being charged as part of the proceedings.

NatWest is scheduled to appear at Westminster Magistrates’ Court on 14 April 2021.