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Shares in NatWest Group PLC rose on Wednesday after the UK government said it will continue to sell down its stake in the bank for another year.
The trading plan unveiled last July will be extended for a further 12-month term and will now terminate no later than August 11, 2023. It will continue to be managed by US investment bank Morgan Stanley, and its provisions are unchanged. The number of shares sold on any one day still will be determined by market conditions.
Since the plan was established, the UK Treasury has sold 703.5 million shares for £1.6 billion, it said.
This implies an average sale price per share of around 227p, well below the 502p paid to bail out NatWest, then Royal Bank of Scotland Group, in 2008.
Natwest shares were up 3.3% on Wednesday morning at 228.60p. The stock is up 12% in the past 12 months.
Analysts at Jefferies on Wednesday raised NatWest to a buy rating from hold, with a price target of 359 pence from previously 246p.
The UK Treasury currently owns 5.09 billion shares, representing a 48.5% stake. When it set out the trading plan last July, the UK state had a 54.7% stake.
‘UK Government Investments Ltd and HM Treasury will keep other disposal options open, including by way of directed buybacks and/or accelerated bookbuilds. The decision to extend the trading plan does not preclude HM Treasury from executing such other disposals that achieve value for money for taxpayers, including during the term of the trading plan,’ the government added.
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