Latest news with #NatWest
The Independent
12 hours ago
- Business
- The Independent
NatWest: Key dates in the bank's history from rescue to privatisation
NatWest has returned to private ownership after the Government sold its remaining shares in the bank. The banking group – which was previously called RBS – was rescued during the 2008 financial crisis with payments worth £45.5 billion, which led to it become part-owned by taxpayers. The Treasury has been rapidly selling down its shareholding over the past 18 months, whittling it down to zero and meaning the bank is once again in private hands. Here's a timeline with key dates from the bailout of NatWest through to its return to privatisation on Friday. 2000: RBS Group bought NatWest for £21 billion which, at the time, was the largest in British banking history. The combined group operated a number of separate banking brands, including the Royal Bank of Scotland, NatWest and Ulster Bank. 2007: RBS was part of a consortium that acquired the Dutch bank ABN AMRO. This decision, which propelled the group into investment banking and sapped its capital levels, proved to be destructive for RBS. The takeover was ultimately found to have taken place with 'inadequate due diligence' and was one of the key reasons why it was on the brink of collapse the following year. 2008: The Government makes a capital payment worth £20 billion to RBS. Then-prime minister Gordon Brown and chancellor Alistair Darling engineered the rescue after being warned the bank was facing imminent collapse and could run out of cash in a matter of hours. It was the fallout of the financial crash, combined with its structural weaknesses, which triggered a major bank run and pushed it to the brink of failure. Chief executive Fred Goodwin, who was in charge of the bank for nine years, stepped down the same month and was replaced by Stephen Hester. He had been nicknamed 'Fred the Shred' for his aggressive management style that oversaw thousands of job cuts at NatWest after it was taken over by the RBS at the turn of the century. He was later stripped of his knighthood. 2009: February: RBS unveiled its largest annual loss in the bank's history – an operating pre-tax loss of £40.7 billion. April: The Government's stake in NatWest increased to 70.3%. December: The Government injected another £25.5 billion into RBS, taking its shareholding to 84.4%, where it peaked. 2013: Ross McEwan stepped in as chief executive after a five-year tenure for Mr Hester. 2015: The first sale of Government-owned shares took place. 2018: RBS announced its first bottom-line profit in a decade, of £752 million. A second sale of shares of £2.5 billion took place. 2019: Dame Alison Rose took over as chief executive of the group – the first woman to lead a major UK high street bank. 2020: Under Dame Alison's leadership, RBS changed its name to NatWest Group, saying it was the right time to align the group name with the brand under which it does the majority of its business. NatWest represented about 80% of its customer base at the time. 2023: Dame Alison was forced to step down as the NatWest's chief executive in the wake of the debanking scandal, when she admitted being the source of an inaccurate story about politician Nigel Farage's finances in relation to his account with the group's subsidiary Coutts. She was replaced by Paul Thwaite, the bank's former chief executive of commercial and institutional business. 2024: March: The Government's stake in NatWest dropped below 30%, meaning it was no longer classed as being a controlling shareholder. July: The Treasury began accelerating the sale process and its shareholding dropped below 20%. December: The Treasury's shareholding fell below 10%. May: The Government sells its remaining shares in NatWest, returning it to private ownership for the first time since 2008. The Treasury confirmed that the sale came at a £10.5 billion loss to the UK taxpayer. But Chancellor Rachel Reeves said the bailout was 'the right decision then to secure the economy'.
a day ago
- Business
British government is out of the banking business with sales of remaining shares in NatWest
LONDON -- The British government sold its remaining shares in NatWest bank, which it bailed out during the 2008 financial crisis, at a taxpayer cost of 10.5 billion pounds ($14.1 billion), the Treasury said Friday. Royal Bank of Scotland — as it was known then — was on the edge of collapse following years of rapid expansion that saw it become one of the world's biggest banks with over 40 million customers and operations in more than 50 countries. 'Nearly two decades ago, the then-government stepped in to protect millions of savers and businesses from the consequences of the collapse," Chancellor Rachel Reeves said in a statement. 'That was the right decision then to secure the economy and NatWest's return to private ownership turns the page on a significant chapter in this country's history.' As part of a series of bailouts, the Labour government at the time took a majority stake in the bank as it poured in 45.5 billion pounds to keep it afloat. The government recovered 35 billion through sales of shares, dividends and fees, the treasury said. With the sales of the remaining shares, the government said it was no longer in the banking business it had taken on during the crisis. NatWest thanked taxpayers for its rescue.
Daily Mail
a day ago
- Business
- Daily Mail
Government sells final stake in NatWest 17 years after bailout
The Government last night sold its final stake in NatWest 17 years after rescuing the bank in a £45.5billion bailout. The lender, then known as RBS, teetered on the brink of collapse until Gordon Brown's Labour government stepped in to save it in 2008. Last night's sale of a £200m chunk of the lender by the Treasury marked the end of troubling chapter which started during the financial crisis. The RBS rescue was the biggest in a series of interventions by the Government which also saw it take a large stake in Lloyds Banking Group – with the last chunk of that lender sold in 2017. Chancellor Rachel Reeves last night said the 2008 bailout 'protected the economy' as it stopped the bank's collapse during the financial crisis. 'That was the right decision,' Reeves said. 'NatWest's return to private ownership turns the page on a significant chapter in this country's history.' NatWest chairman Rick Haythornthwaite said: 'We remain deeply grateful to the Government – and to UK taxpayers – for their intervention and support. This intervention stabilised our banking system and, by extension, our economy – protecting millions of savers, homeowners and businesses.' The bailout followed a period of expansion by then boss Fred 'The Shred' Goodwin (pictured right), including the ill-advised purchase of Dutch lender ABN Amro in 2007, briefly making RBS the biggest bank in the world. The decision by then-Chancellor Alistair Darling to take control of RBS was later described by Goodwin as a 'drive-by shooting'. But the banker was removed as a condition of the rescue and, in 2012, stripped of his knighthood – awarded only eight years earlier. He still rakes in nearly £600,000 a year in pension payments. Scandals continued to plague the bank, including claims it that deliberately drove struggling business customers to the wall in order to seize its assets and shore up RBS's balance sheet. It later admitted it had made mistakes. Boss Alison Rose was forced to quit in 2023 after a de-banking row involving Reform UK leader Nigel Farage. She was succeeded by Paul Thwaite (pictured left). RBS renamed itself NatWest group in 2020 as it sought to distance itself from its association with the financial crisis. Last summer, the Government still owned 20 per cent of the bank – but the amount has gradually dwindled since as shares were drip-fed on to the market. Taxpayer dealt loss of £30bn Taxpayers have taken a hit of more than £30billion on the bailout of NatWest. The Treasury said that it clawed back £35billion in share sales, dividends and fees from its £45.5billion outlay. That left it with a headline loss of £10.5billion. However, figures from the Office for Budget Responsibility show the Government has also taken a £20billion hit from financing costs, leaving the taxpayer more than £30billion in the red overall. At the time of the government bailout in October 2008, ministers believed there was a real risk the bank could collapse with devastating consequences. A Treasury spokesman last night said: 'Allowing the bank to fail would have devastated people's savings, mortgages and livelihoods – and shattered confidence in the UK's financial system.'
Daily Mail
a day ago
- Business
- Daily Mail
ALEX BRUMMER: Fred Goodwin's ghost still stalks financial corridors
The final escape of NatWest, the rebranded Royal Bank of Scotland, from government hands is a signal moment. Some 17 fractious years have passed since the Great Financial Crisis when NatWest ATMs came within minutes of drying up, and Gordon Brown's government took effective control with a £45.5billion bailout. All told, UK plc expended almost a trillion pounds in the shape of support measures directly and through the Bank of England to keep the City from imploding. So much time has passed that memory of Fred Goodwin, the architect of RBS's self-destruction, has faded. But not for investors in RBS/NatWest stock. I was among the foolhardy shareholders, along with big battalions such as the old Prudential, who were persuaded by Goodwin to support a £12billion rescue rights issue in the spring of 2008. We believed that Fred was smart enough to pull the bank back from the brink. Goodwin, in a frenzy of macho competitiveness, had outbid Barclays to take control of ABN Amro, a Dutch bank weighed down with sub-prime mortgage securities. What we didn't know was that Goodwin was a chief executive with a megalomania complex. Dissatisfied with two tower blocks on Bishopsgate in the City and a historical HQ on St Andrews Square in Edinburgh, he built himself a glass palace at Gogarburn downwind from a pig farm. Among the quirks was a designer fish kitchen in reach of his office and filing cabinets with rounded tops to prevent papers piling up. Nurturing NatWest back to health has proved a titanic exercise. Valuable subsidiaries such as Worldpay, Direct Line and Citizens in North America were jettisoned and the balance sheet shrunk. Scandal erupted when the bank's Global Restructuring Group (GRG) forced otherwise healthy client companies to the wall. Why did RBS/NatWest stay in government control for so long? In the US, bailed-out banks and the insurer AIG were returned to the public markets swiftly with the federal government taking contemporary losses. Rapid recovery of lending by US financial groups followed, and a speedy return to trend growth as credit and investment returned to normal. The failure of successive British governments to return the banks to the market and over-regulation has left an indelible mark on the UK, where growth has subsided to half the trend rate before the crisis. Banks and insurers were force-fed into holding excess capital and government stock. Credit and loans, the lifeblood of investment and output, were stymied. Excessive caution, designed to prevent a repeat of 2008-09, has proved destructive to expansion for Britain's advanced tech, pharma, creative and defence sectors. Politics explains why the Government held on to the NatWest stake for so long. No politicians, Labour or Tory, wanted blame for losing taxpayer cash. But the Government stake, even as it shrank, affected behaviour. Pay and bonuses were constrained, which meant that NatWest found it difficult to recruit the most talented financiers. Government felt obliged to intervene in what should have been boardroom issues. This was most notable when Alison Rose was defenestrated as chief executive in 2023, after leaking some disobliging comments about Nigel Farage being de-banked at private offshoot Coutts. As NatWest fully returns to public markets, it is worth reflecting that £10billion of taxpayers' money has mysteriously disappeared. That is cash that Chancellor Rachel Reeves desperately needs.
Times
a day ago
- Business
- Times
NatWest exits public ownership with taxpayers £10bn short
The government has finally returned NatWest to full private ownership in a move that crystallises a £10.5 billion loss for taxpayers almost 17 years after the state rescued the bank from collapse. In a landmark moment for Britain's banking industry that draws a line under the 2008 bailouts and nationalisations, the Treasury announced on Friday evening that it had sold its remaining shares in the lender, completing a sell-down process that has taken a decade to complete. Rachel Reeves, the chancellor, said the exit 'turns the page on a significant chapter in this country's history'. It also leaves taxpayers nursing a large loss. In October 2008 and December 2009 the state injected a total of £45.5 billion into NatWest, which was then called Royal Bank of Scotland, to avoid a chaotic failure that it was feared could have brought down the UK's financial system. The rescue involved the state paying an average of 502p a share to take a stake of about 84 per cent in the lender and also entailed the exit of its boss, Fred Goodwin, whose unchecked expansion of the group briefly made it the biggest bank in the world but left it dangerously exposed when the financial crisis hit. For most of the time since then, the stock has languished well below the government's break-even price. This has meant almost all of the taxpayers' stake has been sold at a loss, starting in 2015, when George Osborne, who was then chancellor, authorised the first sale of NatWest stock by the government to institutional investors at a price of 330p a share. • Breaking free from NatWest bailout: the inside story While the shares finally climbed back above the closely-watched 502p level earlier this month, this was too late to significantly benefit taxpayers because by that point the government had reduced its stake down to less than 0.9 per cent. In total, share sales by the government have raised about £24.8 billion, including about £13.2 billion through a trading plan that has been putting shares into the stock market since 2021. Dividends as well as fees and other payments by the lender have returned an additional £10.2 billion to the state, taking the total handed back to about £35 billion and leaving taxpayers £10.5 billion out of pocket. The true loss will be even bigger if the state's financing costs for the NatWest rescue, which are unknown, are included. However, the government's departure from NatWest's shareholder register will nevertheless be celebrated in Westminster because it closes the book on the crisis-era bailouts. Lloyds Banking Group, which was rescued for £20.3 billion, was reprivatised in 2017 and the assets of Northern Rock and Bradford & Bingley, which were both nationalised, have also been sold off. At the time Lloyds returned to full private ownership it said taxpayers made back about £900 million more than they put in, but the National Audit Office later estimated the state got back between £3.2 billion and £5.9 billion less than it paid for shares in the lender if financing costs were included. Rick Haythornthwaite, NatWest's chairman, said: 'We remain deeply grateful to the government — and to UK taxpayers — for their intervention and support.'
