2025 will be a landmark year for NatWest – formerly Royal Bank of Scotland – as the UK Government finally exits its rescue stake in the major clearing bank. This will herald the end of an unhappy chapter for Scotland’s banking story.
The fall-out from the global financial crisis and the folly of RBS’s untrammelled expansion before 2008 cast a long shadow over the two great national institutions based in Edinburgh. NatWest, still with a substantial commercial presence in Scotland, now has more than £427bn in customer deposits with lending of £364bn.
The UK Government, with Chancellor Alistair Darling then in the hot seat, agreed a £45.5bn rescue during the crisis to prevent RBS’s collapse in 2009. Lloyds Banking Group, which subsumed Halifax Bank of Scotland after direct intervention from the Prime Minister, Gordon Brown, was rescued with £20.3bn for a 43 per cent stake in the bank.
Since 2015, the UK Government’s stake in NatWest has been progressively whittled away. In November, the Treasury exited from bank shares worth £1bn, which cut its holding to 11.4 per cent from 14.2 per cent. NatWest is expected to return to full private ownership in the first half of 2025, although discussion about a future windfall for taxpayers has been shelved by the Labour Government.
Paul Thwaite, NatWest’s chief executive, said the transaction represents a milestone in the bank’s path to full privatisation.