viewNatWest Group PLC

NatWest could accelerate buybacks following govt stake sale, says UBS

Analysts said the decision of the government to sell down its sizeable stake in the banking giant “raises the prospect of a confirmed buyback” in the company’s second-quarter results

NatWest Group - NatWest could accelerate buybacks following government stake sale, says UBS

NatWest Group (LSE:NWG) PLC (LON:NWG) could accelerate share buybacks following the sale of a 5% stake in the group held by the UK government, according to analysts at UBS.

In a note published on Thursday, the investment bank, which rates NatWest at ‘neutral’ with a 214p target price, said the decision of the government to sell up to 15% of shares in the group over the coming 12 months “raises the prospect of a confirmed buyback” in the company’s second-quarter results, highlighting that NatWest can buy 4.99% of itself from the state each year.

READ: UK govt to sell down NatWest stake

“While there are headwinds from restructuring and regulatory change, NWG is clearly significantly overcapitalised and capital generative. Its challenge has been that, if a buyback were started now, the govt stake would rise in percentage terms, freefloat would fall and traded liquidity suffer. With the government selling in the market there is good sense, we think, in announcing a matching repurchase program at 2Q results”, analysts said.

UBS also said that while an earlier buyback from NatWest will “bring forward” their forecast share count decline by six months, they still think such a move “should be positively received”.

After bailing out NatWest Group at the height of the credit crunch of 2008, Her Majesty's Treasury's (HMT) currently owns around 6.3bn ordinary shares in the company, which represents a 54.7% stake.

However, a trading plan entered into with Morgan Stanley (NYSE:MS) will see share sales begin from 12 August, following the expiry of the lock-up period agreed at the last disposal in May.

UK Government Investments Limited (UKGI) said it has instructed the investment bank that the intention is for “up to, but no more than, 15% of the aggregate total trading volume in the company will be sold” in this plan.

In mid-morning trading on Friday, NatWest shares were up 2.2% at 198.5p.

Quick facts: NatWest Group PLC


Price: 213 GBX

Market Cap: £24.43 billion

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...


Hochschild Mining reveals 'profitable' PEA on its heavy rare earths project...

Hochschild Mining Head of Investor Relations Charles Gordon joined Proactive New York to discuss the Peru-based gold and silver miner's recent developments within its heavy rare earths project, recently renamed Aclara. Gordon says the group recently revealed a preliminary economic assessment...

14 hours, 33 minutes ago

2 min read