Government could sell NatWest shares to retail investors, chancellor says

(Sharecast News) - The UK chancellor has announced plans to sell off part of the government's stake in high street lender NatWest to retail investors in the coming year. In his Autumn Budget delivered to Parliament on Wednesday, Jeremy Hunt said the Treasury will "explore options" regarding a potential sale, though any divestment is "subject to market conditions and achieving value for money".

The government still holds a 38.6% stake in NatWest following a 2008 bailout during which taxpayers paid £45.5bn for an 84% holding in the lender - which at the time was known as Royal Bank of Scotland. Previous stake sales were reserved solely for institutional investors.

In the official Budget statement, the government said it was "committed to exiting its shareholding in NatWest".

"The government intends to fully exit by 2025-26 utilising a range of disposal methods, including accelerated bookbuilds and directed buybacks with NatWest and also via continuing sales through the ongoing trading plan," the statement said.

"As part of the plan to return NatWest to the private sector, the government will explore options to launch a share sale to retail investors in the next 12 months."

The stock, which was more or less flat at around 206p ahead of Hunt's comments, dropped to a low of 199.35p but recovered to 204.24p just before the close of play - down 1.4% on the day. The stock has fallen by around 25% since the start of 2023.

Commenting on Hunt's announcement, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said giving retail investors a chance at NatWest ownership was a "welcome move".

"Further sales would again bring NatWest closer to full public ownership and would bring to a close crisis actions taken during the Great Financial Crisis."

Streeter added: "At the current valuation the potential for returns, as some of present headwinds ease off, look attractive for both the business and existing and new shareholders.''