NatWest Group, formerly Royal Bank of Scotland (RBS), is now completely privately owned and to date, £35bn has been returned to the Exchequer through share sales, dividends and fees.
The Government said while this represented a £10.5bn loss on the original support, “the alternative would have been a collapse with far greater economic costs and social consequences”.
It said allowing the bank to fail would have “devastated people’s savings, mortgages and livelihoods – and shattered confidence in the UK’s financial system”.
Shares were sold at market price when it represented value for money, and helped to fund the Plan for Change to invest in the NHS, education and defence.
Last year, a retail sale introduced by the previous Government was scrapped by the current Government, as it said this could have cost hundreds of millions of pounds due to selling shares at a discount to attract retail buyers.
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The state has now fully exited all banking sector interventions made during the financial crisis.
Rachel Reeves, Chancellor of the Exchequer, said: “Nearly two decades ago, the then Government stepped in to protect millions of savers and businesses from the consequences of the collapse of RBS. 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.
“We protected the economy in a time of crisis nearly 17 years ago; now, we are focused on securing Britain’s future in a new era of global change.”
Emma Reynolds, Economic Secretary to the Treasury, added: “Bringing NatWest fully back into private ownership marks a significant milestone for the UK banking sector following the financial crisis.
“Since coming into Government, we have halted the NatWest retail share sale, which could have cost taxpayers hundreds of millions. Instead, we put taxpayers first by only selling NatWest shares at market value – securing more money to invest in vital public services.”
NatWest’s gratitude to the Government
Rick Haythornthwaite, chair of NatWest Group, said: “As NatWest Group returns to full private ownership for the first time since 2008, we remain deeply grateful to the Government – and to UK taxpayers – for their intervention and support. At a time of global crisis, this intervention stabilised our banking system and, by extension, our economy; protecting millions of savers, homeowners and businesses.
“Banks in the UK have changed beyond recognition since 2008. So, too, the regulatory environment and culture across the city. Critically, the pace of technological advances has fundamentally altered how people live and work, including how they choose to access financial services and manage their money.
“We are at an inflexion point not just for our bank, but for the wider economy. Growth is once again at the top of the national agenda and the financial services sector has an important role to play, driving investment and job creation throughout the country – all in the service of our customers.”
Paul Thwaite, chief executive of NatWest Group, added: “This is a significant moment for NatWest Group, for all those who work here and for the UK more widely. As we turn the page on the financial crisis, we can look to the future with confidence, without forgetting the lessons of the past.
“I am proud to have been part of the team that has helped build a simpler, safer, more customer-focused bank. It is thanks to the incredible loyalty of our customers and colleagues, along with the support of our shareholders – including the UK taxpayer – that this change has been possible.
“Today, we have a strategy that is working, positive momentum in our business and a clear ambition to succeed with our customers.
“This is a sector that matters; strong economies need strong banks, and vice versa. At a time when there is a clear intent to deliver growth, NatWest is ready to step up to the challenge, shaping our future as a vital and trusted partner to our customers and to the UK itself.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: NatWest returns to private ownership after 17 years
