NatWest retail sell-off to take place in the summer as government unwinds taxpayer bailout

The Chancellor confirmed today that the Government will begin selling its stake in NatWest to regular investors in the summer.

The retail share offering is part of the Government’s plan to completely divest its stake in NatWest by 2026, and was confirmed by Chancellor Jeremy Hunt in his Budget today.

NatWest was rescued by the Government in 2008, which then became a majority shareholder and has since been unwinding its stake in the banking giant.

The Government’s current business plan has reduced its share to less than 33 per cent as of February 23, 2024.

In total, the Government has raised more than £14.5bn in proceeds from sales of NatWest shares to date.

In his autumn statement last November, the Chancellor announced the retail share sale and said it would be “subject to favorable market conditions” and “good value for money”.

The sale of shares is also a measure to revive the public’s interest in investing. Mr Hunt told the Commons in the Autumn Statement last November: “It’s time for Sid to invest again.”

The Chancellor was referring to the famous British Gas share sale announcements from the years of privatization under former Prime Minister Margaret Thatcher.

In 2008, the Government became the majority shareholder in NatWest when it pumped a total of £45.5bn (around £5 a share) into the stricken lender, then Royal Bank of Scotland, during the height of the financial crisis.

The Government ended up taking an 84 per cent stake in NatWest after the hefty taxpayer bailout.

In March 2022, the Treasury sold NatWest shares back to the company and its stake fell below the 50 per cent threshold for the first time since 2008.

Experts say confirmation that NatWest’s retail share offering could begin during the summer is “nebulous”.

AJ Bell managing director Charlie Musson said: “To start generating interest among retail investors, the government needs to set a clear timeline for the sales process, including when they intend to set the sale price, because any discount on the supply will probably be the key.” factor that drives public interest.

‘There is a fine line to walk here, as the Government needs to balance getting a good deal for the taxpayer while offering an attractive opportunity for investors without suppressing the value of shares already outstanding.

‘NatWest, formerly RBS Group, is home to several iconic banking brands. Combined with the promise of a ‘Tell Sid’-style promotional campaign, the share offer puts investing in the spotlight, and is expected to provide a tonic that prompts more people to think about investing in shares and funds if they still they have not done it.’

June is rumored to be a likely summer date, following the bank’s first-quarter results in April and ahead of its half-year results in July.

A government spokesman said the share sale was “subject to market conditions and achieving good value for money” and that further details would be revealed “at the appropriate time”.