Jeremy Hunt to announce UK government sale of NatWest shares
UK Chancellor Jeremy Hunt is set to announce the sale of a portion of the government's one-third stake in NatWest, valued at approximately £6.7bn.
This is a remnant from the 84% ownership acquired during the 2008 financial crisis, part of a £45.5bn bailout to stabilize the banking system.
The sale could generate between £3bn and £4bn, following Hunt's 2022 autumn statement exploring the idea of a public retail offering.
NatWest recently reported a 20% profit increase to £6.2bn for the year ending December 2023, its highest since 2007, partly due to rising interest rates. Paul Thwaite is set to become the new CEO of NatWest, succeeding Alison Rose.
The move anticipates high retail investor interest, with over £300bn in savings accounts that could be shifted towards stock investments. Interest rates are projected to drop this year, potentially making NatWest shares more appealing if offered at a discount.
The sale is part of broader capital market reforms aimed at maintaining the UK's appeal for company startups and listings. The government previously sold shares in Royal Mail in 2013 but dropped plans to sell its stake in Lloyds Banking Group to the public.
M&C Saatchi has been contracted to market the NatWest shares. Computershare will manage the offer's administration, with AJ Bell and Hargreaves Lansdown potentially marketing the shares.
A "Brit Isa" initiative might be introduced, incentivizing investment in UK-listed companies with a significant top-up to existing ISA allowances, but some firms are concerned about compliance costs.
One key concern for the share sale is ensuring a substantial market discount to attract buyers. While AJ Bell didn't comment, Hargreaves Lansdown anticipates strong customer interest, highlighting the importance of the offered discount. The Treasury has yet to respond.
The sale could generate between £3bn and £4bn, following Hunt's 2022 autumn statement exploring the idea of a public retail offering.
NatWest recently reported a 20% profit increase to £6.2bn for the year ending December 2023, its highest since 2007, partly due to rising interest rates. Paul Thwaite is set to become the new CEO of NatWest, succeeding Alison Rose.
The move anticipates high retail investor interest, with over £300bn in savings accounts that could be shifted towards stock investments. Interest rates are projected to drop this year, potentially making NatWest shares more appealing if offered at a discount.
The sale is part of broader capital market reforms aimed at maintaining the UK's appeal for company startups and listings. The government previously sold shares in Royal Mail in 2013 but dropped plans to sell its stake in Lloyds Banking Group to the public.
M&C Saatchi has been contracted to market the NatWest shares. Computershare will manage the offer's administration, with AJ Bell and Hargreaves Lansdown potentially marketing the shares.
A "Brit Isa" initiative might be introduced, incentivizing investment in UK-listed companies with a significant top-up to existing ISA allowances, but some firms are concerned about compliance costs.
One key concern for the share sale is ensuring a substantial market discount to attract buyers. While AJ Bell didn't comment, Hargreaves Lansdown anticipates strong customer interest, highlighting the importance of the offered discount. The Treasury has yet to respond.