'STEP TOWARDS FREEDOM' The government said this month it was targeting returning the bank to full private ownership in 2026, a year later than previously planned. Britain's finance ministry said the deal "represents an important step" in the government's plan to return bailed out banks to private hands. NatWest has remained majority state-owned even as other lenders rescued in the financial crisis have been privatised, with the last chunk of failed lenders Northern Rock and Bradford & Bingley sold off last month. Rival Lloyds was fully privatised in 2017. NatWest had been storing up capital to buy back government stock and speed up the sale process, with central bank restrictions on paying out dividends giving it more headroom. NatWest's core capital ratio will reduce from 18.5% to 17.7% following the deal and a 500-million-pound contribution to its main pension scheme.