Lens On 3 FTSE 100 Banking Stocks as UK Sells Stake in Natwest for £1.1 Bn

Source: Freedomz, Shutterstock

Summary

• The government sold its stake worth £1.1 billion in NatWest Group.
• The sale brought the government’s stake in the group down to 59.8% from 61.7%.

The UK government today sold its stake worth £1.1 billion in the NatWest Group (LON:NWG), bringing down its holding after three years. The government sold its 590.7 million shares on Thursday’s trading closing price of 190.5 pence.

The Treasury said that it was necessary to return organisations brought under public control following the financial meltdown of 2007-08 into private ownership. Post the sale, the government’s stake in the group was down to 59.8 per cent from 61.7 per cent.

Also read: 3 FTSE Listed Banking Stocks to Consider For 2021

The bank, which was earlier known as the Royal Bank of Scotland, was bailed out by the government through a £45.5 billion-deal; otherwise it would have gone bust during the global financial crisis.

The stake sale happened on the same day that official data revealed that government borrowing in February – at £19.1 billion - was the highest since record keeping. At the end of February, the government’s national debt stood at £2.13 trillion at 97.5 per cent of UK’s GDP.

Here is a look at three FTSE 100 banking stocks that have the largest market capitalisation:

Also read: 3 FTSE Listed Banking Stocks to Consider For 2021

HSBC Holdings Plc (LON: HSBA)

The British multinational investment bank’s adjusted revenue for FY20 dropped to $50,366 million from $54,944 million a year ago. Its revenue fell 10 per cent due to the impact of lower interest rates. Its profit after tax fell 30 per cent to $6,099 million in FY20 from $8,708 million a year ago.

Group CEO Noel Quinn said that the company aims to establish itself as a global bank with a digital-first mindset.

Also read: What led HSBC to resume dividend pay-outs despite a drop in profits

With a market capitalisation of £89,938.33 million, the shares of the company were trading at GBX 433.40, down 1.85 per cent on 19 March at 11:05 GMT+1. The FTSE 100 index was down by 0.90 per cent at 6,720.14.

Barclays Plc (LON: BARC)

The British investment bank’s total income for FY20 increased 1 per cent to £21,766 million from £21,632 million a year ago. Its net profit after tax fell 27 per cent to £2,461 million in FY20 from £3,354 million a year ago.

Group CEO James E Staley said that the company decided to resume capital distributions and announced a 5 pence per share total payout. This would include a 1 pence full-year dividend for 2020 as well as a share buyback plan up to £700 million.

Also read: 3 FTSE Listed Banking Stocks to Consider For 2021

The shares of the company, with a market capitalisation of £31,912.20 million, were trading at GBX 180.68, down by 1.64 per cent on 19 March at 11:28 GMT+1. FTSE 100 was down by 0.90 per cent at 6,720.14.

Lloyds Banking Group Plc (LON: LLOY)

This British financial institution’s net income for FY20 fell 16 per cent to £14,404 million from £17,142 million a year ago. Its statutory profit after tax fell 54 per cent £1,387 million from £17,142 million. Operating costs in FY20 reduced 4 per cent to £7,585 million from £7,875 million a year ago.

Also read: Lloyds bank resumes dividend payments despite a large plunge in profits 

Group CEO António Horta-Osório said that in 2021, as per the guidance, the company’s operating costs are expected to fall further below £7.5 billion.

The shares of the company, with a market capitalisation of £29,480.97 million, were trading at GBX 40.94, down by 1.61 per cent on 19 March at 12:02 GMT+1. At the same time, FTSE 100 was down by 0.84 per cent at 6,722.92.