A prominent US investor has begun investing heavily in NatWest shares following a significant reduction in the government's ownership stake, easing concerns about state intervention in the rescued banking group.
Los Angeles-based Capital Group, among the world's oldest and largest investment firms, boasting over £2.5 trillion under management, has acquired over £110 million worth of NatWest shares. This move comes shortly after the government reduced its stake, propelling Capital Group into the bank's top 30 shareholder list.
Capital had reportedly been contemplating acquiring a stake for several months, particularly after observing strong profits and holding discussions with the newly appointed chief executive, Paul Thwaite, in February.
NatWest posted its largest annual profit since the onset of the financial crisis in 2007 last year, buoyed by high interest rates. Nevertheless, according to a source in the City, investors such as Capital had been deterred by the government's 30% stake, which retained its status as a controlling shareholder.
The government's ownership stake is a legacy of its £46 billion bailout of NatWest, previously known as the Royal Bank of Scotland Group, during the 2008 financial crisis, which saw the state acquiring an 83% stake in the lender.
In late March, the government's ownership fell below 30% for the first time, paving the way for a new round of investment from the US firm.
