Norway's colossal $1.6 trillion sovereign wealth fund, recognized as one of the globe's most significant investment entities, has declared its support for NatWest's proposal to enhance its stock buyback capacity from the British government, marking a step forward in the bank's privatization journey.
In anticipation of its upcoming annual meeting on April 23, NatWest has appealed to its shareholders to endorse a resolution that would permit the bank to repurchase as much as 15% of its shares from the government over a year, an increase from the prior limit of 5% annually.
Following a rescue operation during the 2007-2009 financial turmoil, the British government's stake in NatWest has recently dipped below 30%, thus relinquishing its position as a majority shareholder. The government is on a path to gradually offload its shares in NatWest, with plans that include a public stock offering as soon as June, aiming for a complete exit by the year 2026. At one point, the government's ownership in the bank soared to 84%.
NatWest's shares saw a rise of 1.7% in early trading hours.
The Norges Bank Investment Management (NBIM), steward of the Norwegian fund and a major investor in NatWest with a 3.23% holding, valued at $794.3 million at the end of 2023, has backed the buyback proposal without citing specific reasons. The fund has expressed its general approach of supporting the governance and management of its investment companies, provided their actions align with its responsible investment criteria.
