UK government could launch NatWest retail offer by mid-year

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The UK government could kick off a sale of NatWest shares to the public as early as the middle of this year, once a permanent chief executive has been installed at the bank.

Government insiders said Bim Afolami, the City minister, was eyeing a sale of part of the state’s holding in the UK high street bank to retail investors before the summer break, and that resolving the bank’s long-term leadership was a necessary precondition.

“We need a permanent CEO,” said one.

NatWest’s interim chief executive, Paul Thwaite — who took over from Dame Alison Rose when she stepped down last summer in the wake of the Nigel Farage “debanking” scandal — is set to lead the bank until at least July.

But the company’s incoming chair Richard Haythornthwaite has started the search for Rose’s permanent successor after joining the bank’s board earlier this month. Thwaite previously led NatWest’s commercial bank and is seen as a leading contender for the job who could be made permanent before the end of his initial one-year appointment.

In his Autumn Statement last November, chancellor Jeremy Hunt said he would “explore options for a NatWest retail share offer in the next 12 months subject to supportive market conditions and achieving value for money”.

At the time, the Treasury said it planned to sell down the remaining state holding by early 2026 “utilising a range of disposal methods” and Afolami confirmed to the Financial Times that a retail offer was still being “explored”. The mid-year timing of the potential share sale was first reported by The Times.

The Treasury declined to comment on the timing or the process for selling down its remaining 36 per cent stake in the bank, which resulted from the £45.5bn bailout of the lender during the 2008 financial crisis. The government has already cut its stake from a peak of 84 per cent.

Any pre-election NatWest retail offer is expected by government officials to include a discounted share offer. NatWest’s shares have fallen 27 per cent in the past year after a set of disappointing results and the departure of Rose.

NatWest declined to comment.

Afolami told the FT that he wanted to persuade younger people to invest in NatWest as part of a wider effort to broaden share ownership, embracing Margaret Thatcher’s vision of “popular capitalism”.

Thatcher offered discounted shares to the public during privatisations such as British Gas in the 1980s, accompanied by the famous “Tell Sid” advertising campaign.

Afolami said: “We need to do much more to incentivise young people to invest in the “traditional” stocks and shares, which is why our plans to explore a NatWest retail offer to the public over the next year are so important.

“I want to say to young people: don’t just do crypto, broaden your investments, consider owning shares such as NatWest, invest in Britain and the British stock market.”

The “get rich quick” allure of cryptocurrency means it has gained traction, especially among younger investors. 

Almost one in 10 UK adults — some 4.97mn people — owned cryptocurrency assets in 2022, according to research by the Financial Conduct Authority. That eclipses the 3.9mn people who subscribed to more conventional investments using stocks and shares Isas in the 2021-22 tax year, according to the latest HMRC statistics. 

Nick Train, one of the UK’s highest profile fund managers, recently told the FT he wished more young people would “take a flutter on the stock market” than take a punt on the outcome of a football match or dabble in crypto.