The taxpayer is no longer the majority shareholder in NatWest after it sold £1.2bn worth of shares in the group.
The group, formerly known as Royal Bank of Scotland (RBS), was rescued at the height of the 2008 financial crisis with a £45bn government bailout.
Following the sale of a chunk of its shares, government ownership in NatWest is now at 48.1% - down from 50.6%.
The sale was an "important landmark" in its plan to return the bank to full private ownership, the Treasury said.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said the share sale came at time when "the government sorely needs the cash with the costs of borrowing mounting".
"It's been a long road back from emergency purchase of the beleaguered Royal Bank of Scotland group, with a re-brand, and the step by step repurchase of the government holdings," she added.
When the financial crisis struck in 2008, the government started to build a stake in the then RBS Group which was teetering on the brink of collapse.
The initial investment, which resulted in the government owning 57% of the bank, was extended a couple of times before peaking at 84% in 2009.
Since 2015, the Treasury has been selling off its stake and the process of selling off NatWest shares is likely to continue for some time to come.
It has already taken considerably longer than disposal of the public ownership of Lloyds, which was finally unwound in 2017.
The government was first handed shares in the banks in 2008 after announcing a huge injection of cash into the sector.
Gordon Brown, who was prime minister at the time of the crisis, said the investment was not an attempt to nationalise the banks and that the shares would be sold back "at the right time".
'Important milestone'
NatWest boss Alison Rose called the share buyback an "important milestone".
Ms Rose said the deal would be a "good use of capital for the bank and our shareholders".
"Reducing government ownership below 50% is an important milestone for NatWest Group and a further demonstration of the progress we are making as we continue to deliver for our customers and shareholders," she added.
NatWest Group's main banking brands are NatWest, Royal Bank of Scotland (RBS) and Coutts. It was renamed as NatWest Group in 2020 after more than 40 years under the RBS Group moniker.
The government has said previously it intends to sell £15bn worth of shares in the group by 2023. In this latest transaction, the Treasury authorised the sale of around 550 million shares.
"We will continue to prioritise delivering value for money for the taxpayer as we take forward this plan," it said.
SOURCE: BBC
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