UK to explore options for NatWest retail share offer

Britain’s finance minister Jeremy Hunt said he would explore options for a NatWest share offer to the public in the next 12 months, to allow the government to reduce its stake in the bank.

The government has been slowly reducing its stake in NatWest since bailing out the lender during the 2008-9 global financial crisis, but retains around 39%. The bank was returned to majority private control last year after a string of stock sales, mainly to institutional investors.

“I will explore options for a NatWest retail share offer in the next 12 months subject to supportive market conditions and achieving value for money,” Hunt said on Wednesday.

The plan forms part of a wider push to reinvigorate interest in UK stocks, the minister said, adding it “was time to get Sid investing again”.

“Tell Sid” adverts encouraged millions of ordinary Britons to buy into the privatisations of state-owned companies in the 1980s.

Alasdair Haynes, CEO of share trading platform Aquis Exchange, said the move was “a positive first step” to attract new retail investors to UK markets, but urged the government to also educate individuals about investments, risks and rewards.

NatWest said decisions around share sales were a matter for the government, but welcomed its commitment to returning the bank to private hands.

NatWest shares dipped on Hunt’s comments and were last down 1.1% at 204.7 pence, compared with a 0.2% fall in the FTSE 100 index.

The government is all-but-certain to make a hefty loss on the 45 billion pound ($56.07 billion) rescue, with NatWest shares languishing far below the level at which it was bailed out at 502 pence per share.

The share sale plan comes at a difficult time for NatWest, which has endured a tumultuous year after a damaging row with former Brexit party leader Nigel Farage over the closure of his bank accounts.

The episode sparked a political backlash and ultimately led to the departure of the bank’s CEO Alison Rose. The stock is the worst performing FTSE 100 British bank stock this year, down more than a fifth, according to Eikon data.

Britain’s last major attempt to lure retail investors into stock investment came with the 2013 listing of Royal Mail, a bumper multi-billion pound IPO that was more than 20 times oversubscribed and saw shares jump almost 40% at market debut.

That investment turned sour for many and shares in the renamed holding company International Distributions Service are now worth 25% less than its 330 pence offer price.

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Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.