NatWest Group, formerly known as Royal Bank of Scotland, has expressed its support for the government’s plans to return the bank to full private ownership. This comes after Chancellor Rachel Reeves announced she would be scrapping a retail share sale in the high street bank.
The previous Conservative administration had announced plans for a mass-market sale this summer, with shares offered to ordinary investors at a discount to the bank’s prevailing share price. This would have been accompanied by a marketing campaign similar to the “Tell Sid” push used during the privatization of British Gas in the 1980s. However, the plans were put on hold when Chancellor Rishi Sunak called for a sudden general election.
The decision to scrap the retail share sale was made due to concerns about the potential cost to taxpayers. The bank was bailed out with a total of £46bn of public money in 2008 and 2009 during the financial crisis, leaving the Treasury with an 84% stake in the bank. However, the state’s stake has since dropped to below 20% and the government still intends to fully exit its shareholding in NatWest by 2025-26.
Speaking in the House of Commons, Chancellor Reeves stated that the retail share sale offer would involve significant discounts that could cost taxpayers hundreds of millions of pounds. She deemed it a “bad use of taxpayer money” and announced that it would not go ahead.
A spokesperson for NatWest Group expressed their support for the government’s decision, stating that it is in the best interests of both the bank and all shareholders. The bank has already incurred costs of £24m for the scrapped plans, including advertising. Some of this amount is expected to be used for general advertising purposes, while the remainder covers legal fees and expenses.
In other business news, Evri is set to hire 9,000 new staff, half of UK TV and film staff are currently out of work, and talks are ongoing for a potential £3.6bn deal for Royal Mail.
