NatWest Group has agreed to make an off-market purchase of its shares worth £1.24bn from the UK government’s economic and finance ministry HM Treasury.

Under the off-market purchase, the British banking and insurance holding company will buy back over 392.4 million ordinary shares with a nominal value of £1.076 each from the government at a price of 316.2p per share.

The ordinary shares to be purchased represent 4.5% of NatWest Group’s issued ordinary share capital, excluding treasury shares. The off-market purchase is expected to be completed on 4 June 2024.

Upon the completion of the off-market purchase, the British government’s stake in the banking and insurance holding company will decrease to around 22.5%.

Besides, NatWest Group will own over 301.8 million of its ordinary shares as treasury shares following the closing of the transaction. It will also have more than 8.3 billion ordinary shares in issue and 483,140 cumulative preference shares of £1.

Natwest Group CEO Paul Thwaite said: “This transaction represents another important milestone for NatWest Group, building on recent momentum in the reduction of HM Treasury’s stake in the bank.

“We believe it is a positive use of capital for the bank and for our shareholders and represents further progress against the ambition to return NatWest Group to full private ownership. Our focus remains on delivering for our customers which will, in turn, deliver for our shareholders and the UK economy.”

Natwest Group plans to cancel over 222.4 million of the purchased ordinary shares while keeping the remaining 170 million ordinary shares in treasury.

Last year in November,  NatWest joined forces with US-based technology company IBM to enhance customer experience using generative AI.