NatWest Group (GB:NWG) repurchased shares worth £1 billion as the UK government continues to reduce its stake in the British bank. The share disposal was executed as an off-market purchase by NatWest from His Majesty’s Treasury (HM Treasury), the UK government’s economic and finance ministry. The bank purchased 262.6 million shares at 380.8p per share, which was NWG stock’s closing price on November 8, 2024.
Following the news, NatWest shares gained 1.71% as of writing.
NatWest Moves Toward Full Privatization
According to NatWest, this transaction marks a significant step toward its full privatization. The UK government first invested in the bank during its bailout in the 2008 financial crisis. Since then, NatWest has been on a long journey back to private ownership.
This marks the second directed buyback in the past 12 months. Following this buyback, the total value of shares that NatWest has repurchased from the government stands at £2.2 billion, or nearly 8% of its capital. The government’s ownership of the bank has decreased from approximately 58% at the end of December 2008 to around 11.4% following today’s deal.
NatWest Upgrades Guidance on Q3 Momentum
Last month, NatWest reported its Q3 results, with a 35.3% year-over-year rise in profit attributable to shareholders to £1.17 billion. Meanwhile, net interest margin (NIM) improved 8 basis points from the previous quarter, reaching 2.18%.
Driven by strong numbers, NatWest upgraded its outlook for 2024. The bank now expects a return on tangible equity (RoTE) exceeding 15%, up from its previous forecast of 14%. Moreover, the bank raised its income projection to £14.4 billion for the year, compared to its prior estimate of £14 billion.
Is NatWest a Good Stock to Buy?
According to TipRanks, NWG stock has a Strong Buy rating based on a total of 11 recommendations, including nine Buys. The NatWest share price forecast is 422.25p, which is 9.08% above the current level.
Year-to-date, NWG stock has gained a solid 76% in trading.
