Plans for a multibillion pound mass market sale of the government’s stake in NatWest Group have been halted due to the timing of a summer general election, sources have revealed.
The Treasury had been preparing for months to offer shares in the taxpayer-backed bank at a discounted price, alongside an institutional stock placement. This would have resulted in the government’s stake being reduced to as low as 10%.
However, with Prime Minister Boris Johnson addressing the nation from Downing Street and news of the general election breaking, sources confirmed that the NatWest retail offer is now “in the deep freeze”.
The idea of a mass-market share sale was first announced by Chancellor Jeremy Hunt in last year’s autumn statement, with the aim of creating a new generation of retail investors. But buybacks by the bank and stock sales by the government have reduced the taxpayer’s stake to approximately 28%, currently valued at £7 billion.
While Labour has not ruled out support for a retail offer in recent months, the delay caused by the election is expected to push back the government’s full privatization of NatWest. This comes 16 years after the bank was saved from collapse with a £45.5 billion public bailout.
Despite recent turbulence surrounding a debanking row involving former UKIP leader Nigel Farage, shares in NatWest have risen by over 20% in the last year. Farage has threatened to take legal action against the bank and has stated that his fight with them is “far from over”.
The government’s stake in NatWest has steadily decreased from 85% over the past eight years. The bank, previously known as Royal Bank of Scotland Group, underwent a name change in an attempt to distance itself from its ambitious overexpansion.
NatWest declined to comment on the situation.
