Treasury to sell off further NatWest shares worth up to £1.2bn

The Treasury has announced plans to sell off another tranche of NatWest shares over the next 12 months, as part of ongoing efforts to return the taxpayer-owned bank to private ownership.

The government, which still holds a 54.7% stake in NatWest, said it was rolling out a “prearranged trading plan” in what could mark its third sale of shares this year.

The trading plan, otherwise known as a “drip” sale, means the Treasury could end up selling up to 15% of the average amount of NatWest shares usually traded over 12 months. That could net the government a maximum £1.2bn based on the current share price, which would be on top of any additional bulk share sales the government chooses to launch over the next year.

However, the Treasury stressed it would only sell shares at a price that represented value for money for taxpayers. The government is expected to take a loss on any sale, having paid 502p a share as part of the bank’s bailout in 2008.

NatWest shares were down 2.3% at 195p in afternoon trading.

The sale comes as the government races to meet a self-imposed deadline to sell off its remaining £12.6bn stake in NatWest by 2025-26. It also comes as the chancellor seeks ways to combat a surge in public borrowing caused by the pandemic, which has resulted in a record rise in debt interest payments, which reached £8.7bn last month.

The government bailed out NatWest Group – formerly known as Royal Bank of Scotland– at the height of the 2008 financial crisis, injecting £45bn to keep the bank afloat to prevent an even worse meltdown in the banking system. The government subsequently took a 84% stake in the bank, which has slowly been reduced via four share sales.

The Treasury embarked on a similar drip sale, also led by Morgan Stanley, to help reduce the government’s stake in Lloyds Banking Group before it was returned to private ownership in 2017.

Ian Gordon, a banking analyst at Investec, said he had previously expected the government to dispose of its stake in NatWest by 2025. “It is now possible that they may look to move even faster than that.”