Jeremy Hunt plans sale of NatWest stake to retail investors

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UK chancellor Jeremy Hunt said on Wednesday he would explore options to sell part of the state’s holding in NatWest to retail investors.

The Treasury still owns 39 per cent of the UK high street bank as the result of a £45.5bn bailout of the lender during the financial crisis in 2008, when it was known as Royal Bank of Scotland. The government has steadily reduced its stake from a peak of 84 per cent but is unlikely to ever recover the full value.

“It’s time to get Sid investing again,” Hunt said as he delivered the Autumn Statement, referring to an advertising campaign used to promote a privatisation drive by Margaret Thatcher’s government in the 1980s. The ubiquitous “Tell Sid” adverts encouraged the general public to buy discounted shares in the £5.6bn flotation of British Gas in 1986.

Hunt said any future sale of NatWest shares to retail investors was “subject to market conditions and achieving value for money”.

In a statement, the Treasury said it planned to sell down the remaining state holding by early 2026 “utilising a range of disposal methods” and planned to explore the option of a retail investor element in the next 12 months.

NatWest shares are down 25 per cent so far this year on the back of disappointing earnings and the departure of chief executive Dame Alison Rose. She was forced out after being targeted by Nigel Farage over the closure of his account at Coutts, the prestigious wealth manager owned by NatWest.

The former UK Independence and Brexit party leader revealed in July that he had been “debanked” in part because Coutts’ reputation risk committee decided that his political views did not align with its values.

NatWest shares dropped about 1 per cent to 205p after Hunt’s speech. The stock trades at a steep 50 per cent discount to the book value of the bank’s assets.

Paul Thwaite, NatWest interim chief executive welcomed the announcement: “It’s quite simple. I’m very focused on getting the bank back into private hands so anything, any policy support that shares that ambition I’m encouraging of, I think that’s a good thing”.

Since its 2008 rescue, NatWest has closed most of the international and investment banking operations that led to its bailout and is now primarily a high-street retail and business lender. It rebranded from RBS in 2020 to break with the toxic legacy.

This is not the first time a Conservative government has floated the idea of selling a bailed-out bank’s stock to the public. In 2015, then-chancellor George Osborne said in an election manifesto that the remaining 9 per cent stake in Lloyds Banking Group would be sold to the public, only to withdraw the offer a year later.

In other measures designed to boost London’s capital markets, the Treasury said it would launch a consultation next year to create a new UK framework for creating so-called “captive insurers”, entities established by companies to self-insure some of their risks.

The insurance industry has pushed for such a move to help London’s insurance market catch up with rival hubs such as Bermuda and the US.

“This is really important that the UK gets on with this at speed,” said Caroline Wagstaff, chief executive of trade body London Market Group, citing recent moves by France to foster a captive market.

Global captive insurer premiums are expected to reach $161bn by 2030, she added.

Additional reporting by Ian Smith