Treasury reportedly planning significant sale of NatWest stake

13th May 2024 14:09

(Sharecast News) - The Treasury is finalising plans for a significant sale of its remaining stake in NatWest Group, it was reported on Monday, in a bid to expedite the bank's privatisation and stimulate retail investment in the UK.

According to City AM, alongside an institutional placing of shares, the Treasury was intending to reduce its stake below 10% by the end of the year in a step towards fully privatising the group by the 2025-2026 financial year.

Chancellor Jeremy Hunt previously signalled the government's intention to offer part of its remaining stake to retail investors, aligning with broader efforts to bolster capital markets activity in London.

While the sale was slated for the summer, City AM said the timing could hinge on the upcoming general election.

With a current stake of nearly 27%, valued at around £7.5bn, the government is NatWest's largest shareholder.

The bank was rescued during the 2008 financial crisis with an 84% stake.

City AM said the expected sale, potentially raising around £2bn, could involve a broad marketing campaign.

Key advisers include M&C Saatchi, Freshfields Bruckhaus Deringer, Barclays, and Goldman Sachs, with Hargreaves Lansdown and AJ Bell expected to assist in share marketing.

To attract investors, shares could be priced at a discount, with potential incentives such as bonus shares for long-term holding.

The proposal included a minimum investment of £250 and a ceiling of £10,000 per investor, mirroring a previous plan for Lloyds Banking Group.

NatWest's shift below the 30% ownership threshold in March was positively received by investors wary of state intervention.

The bank had seen an improved performance in 2024, topping the FTSE 100 with a 45% increase in shares.

At 1526 BST, shares in NatWest Group were up 0.06% at 319.5p.

Reporting by Josh White for Sharecast.com.