Continuing our work to dispose of the government’s shareholding
As set out at Budget 2021, the government intends to fully dispose of the NWG (formerly Royal Bank of Scotland Group plc) shareholding by 2025-26, subject to market conditions and any sale achieving value for money.
On 22 July 2021, UKGI announced a Trading Plan running until August 2022. On 22 June 2022 UKGI announced it would extend the Trading Plan for a further 12 months. The Trading Plan will now terminate no later than 11 August 2023 (unless further extended).
A Trading Plan, otherwise known as a “dribble out”, involves selling shares in the market through an appointed broker in an orderly way at market prices over the duration of the plan. Shares will only be sold at a price that represents value for money for taxpayers. There is a cap on the total number of shares that could be sold of 15% of the total number of NWG shares being traded in the market over the 12-month duration of the plan. This is in line with best market practice and to ensure the Trading Plan does not put undue pressure on NWG’s share price.
The decision to launch the Trading Plan does not preclude the government from using other options to execute future transactions that achieve value for money for taxpayers, including during the term of the Trading Plan. Following the positive market reaction to two standalone transactions and the Trading Plan, in March 2022 UKGI, on behalf of HM Treasury, led a further DBB transaction of NWG shares directly to the company. The sale raised c.£1.2bn for the taxpayer. As NWG has excess capital that it plans to return to its shareholders, the DBB saw the government receive 100% of excess capital returned (rather than receiving a proportion equivalent to government’s shareholding via dividends), whilst also giving government the opportunity to reduce its stake in the bank.
For the first time since the financial crisis, NWG is no longer under majority public ownership, with the DBB reducing the government’s shareholding to c.48.1%.