NatWest Group repurchased £1 billion of its own shares from the UK government. This comes as the Treasury rapidly reduces its stake in the lender. The £1 billion buyback saw NatWest acquire 262.6 million shares from the UK government, reducing the Treasury’s voting rights from 14.2% to 11.4%, Bloomberg reported.
Shares from UK Government
This off-market transaction marked NatWest's second buyback within a twelve-month period. Recent changes in UK listing rules reportedly made this possible.
Earlier this year, regulators eased restrictions, allowing companies like NatWest to increase their limit on directed buybacks to 15%, up from the previous 5% cap. The move gave NatWest the flexibility to expedite the repurchase of shares, using its capital to reduce the government’s presence in its ownership.
Over the past year, the UK government has reportedly cut its ownership in NatWest, which stood at about 38% at the end of last year. The reduction is driven by directed buybacks and open market sales. While the previous government under Rishi Sunak had floated plans to sell NatWest shares directly to retail investors, the new Labour administration has shifted focus.
Current UK Chancellor of the Exchequer, Rachel Reeves, is reportedly exploring options to sell the remaining stake primarily to institutional shareholders. With the UK government now holding just 11.4% of voting rights, the lender is closer than ever to full privatization, a goal that could be achieved well before the 2026 target previously suggested.
Boosting International Payments
In April, StoneX Financial Ltd, a subsidiary of StoneX Group, collaborated with NatWest Group. The partnership aims to enhance NatWest's international payments capacity by offering clients better cross-border FX services.
According to Finance Magnates, under this agreement, StoneX Payments, the company's payments division, will provide NatWest with third-party delivery and international FX payment services.
The partnership enables NatWest's corporate clients to transfer funds to various regions. It also reportedly facilitates cross-border payments and extends the bank's payment reach across an additional ten currencies.
Additionally, FXSpotStream onboarded NatWest as its liquidity provider last year. In a statement, FXSpotStream mentioned that it aims to broaden its liquidity offerings further and enhance its proposition to clients. This development followed FXSpotStream's introduction of new pricing plans.
