Government sells £1.24bn in NatWest shares despite fears for Tell Sid sell-off

  • UK Government sells 392m shares for 316.2p each, raising £1.24bn  

The government has sold another chunk of the UK’s NatWest shares, as the bank continues its long return to full private ownership.

NatWest told shareholders on Friday that the Government had sold more than 392million shares in an off-market transaction at 316.2p a piece, reflecting a tiny premium of around 0.5 per cent to their closing price of 314.75p on Thursday.

The latest sale raised more than £1.24billion and reduces the taxpayer’s stake in the lender from 26 per cent to approximately 22.5 per cent.

Rishi Sunak’s Government hopes to sell the UK’s remaining NatWest stake by the end of 2026

The sale comes amid concerns that plans revealed in the Spring Budget to sell the Government’s entire remaining stake to retail investors later this summer were off, with a NatWest share sale derailed by a looming UK General Election.

Taxpayers still hold a large stake in NatWest after the Government was forced to bail out the lender during the 2008 financial crisis. 

At its peak, the Government owned 84 per cent of the bank but current plans would see its holding entirely sold down by the end of 2026.

Chancellor Jeremy Hunt had lined up M&C Saatchi to launch a 1980s-style ‘Tell Sid’ advertising campaign to boost investment in London’s stock market.

But it will now be for the next Government to decide whether to revive the sale and the poll-leading Labour party has yet to commit to following through with the plans should it win on 4 July.

NatWest intends to cancel around 222million of the shares it has purchased from the Government and to hold the remaining 170million in treasury.

The bank said holding these shares in treasury gives it the ability to ‘quickly and cost effectively’ cancel or re-issue them at a later date, and ‘may provide the company with additional flexibility in the management of its capital base’.

NatWest chief executive Paul Thwaite added: ‘This transaction represents another important milestone for NatWest Group, building on recent momentum in the reduction of HM Treasury’s stake in the bank.

‘We believe it is a positive use of capital for the bank and for our shareholders and represents further progress against the ambition to return NatWest Group to full private ownership. 

‘Our focus remains on delivering for our customers which will, in turn, deliver for our shareholders and the UK economy.’

NatWest shares opened up  0.41 per cent at 317.5p on Friday morning. They have added more than 40 per cent since the start of the year.