The NatWest boss has admitted he can barely remember the ‘Tell Sid’ share offerings of the 1980s, even as the state-backed bank prepares for one of its own.
Paul Thwaite said the lender was “taking the necessary steps” to be ready as the Treasury prepares to sell some of its stake to ordinary retail investors this summer.
The comments came as NatWest’s share price rose 6.1 per cent to 307.4p, its highest level in more than a year, thanks to well-received first quarter results.
Shares have risen 70 percent in the past six months.
The Government, which effectively nationalized the bank in a £46bn bailout in 2008, is looking to sell some of its stake in an echo of the great privatizations of the Thatcher era – best remembered for the ‘Tell Sid’ for British Gas. Share.
Approval: The Government, which effectively nationalized the bank in a £46bn bailout in 2008, is looking to sell some of its stake.
Thwaite, 52, said: “I vaguely remember Tell Sid.” I must admit that I was quite young when that happened. But the most serious and most important thing is that the retail share offering, if it occurs, is an opportunity because it reduces participation even further.’
At its peak, the Government owned 84 per cent of Natwest (then known as Royal Bank of Scotland), but a gradual sale of shares saw that figure fall below 28 per cent. Chairman Rick Haythornthwaite this week described the era of state support as a “sorry story”. But performance has been improving and last year’s annual profits were the highest since 2007.
Yesterday, the bank reported first-quarter operating profits of £1.3 billion, down 27 per cent on the same period last year but slightly above analysts’ expectations.
Profits were squeezed as customers moved their deposits into higher-paying savings accounts, as well as fierce competition for mortgage customers.
New home lending almost halved, from £9.9bn to £5.2bn, and Thwaite said there had been a “conscious decision not to compete in all segments” amid shrinking profit margins in a small market. More recently, however, mortgage applications had increased by 25 percent.
Matt Britzman, of broker Hargreaves Lansdown, said NatWest was “the best of the bunch” among UK banks that reported first-quarter results this week.