Government may sell UK’s remaining stake in Natwest to public, says Jeremy Hunt

The UK government will explore options for selling off its remaining 38.6% stake in the high street lender NatWest Group to the public within a year, bringing it back to full private ownership, Jeremy Hunt has announced.

Delivering his autumn statement in parliament, the chancellor said he would “explore options” for a retail share offer in the next 12 months but said it would be “subject to supportive market conditions and achieving value for money”. This means shares can be bought by anyone, not just financial institutions.

In a reference to the privatisations of the 1980s, when shares in British Gas were advertised to retail investors with the slogan “If you see Sid … Tell him”, the chancellor declared: “It’s time to get Sid investing again.”

NatWest shares changed hands at 204.9p on Wednesday, down 1.2%, giving the company a market value of £18bn. They have lost a quarter of their value so far this year.

The government took an 84% stake in the high street lender during the2008 financial crisis, when it pumped £45.5bn into the bank, then known as Royal Bank of Scotland.

Since then, it has sold down its stake via six block sales. In May it sold shares worth £1.26bn, taking the state’s shareholding below 40% for the first time since the emergency bailout in 2008. This last sale reduced the government’s shareholding to 38.6% from 41.4%, as it agreed to sell 469m shares at a price of 268.4p each. That is nearly half the 500p that it paid for the shares in 2008.

The government had previously set itself a deadline to fully privatise the bank by 2026, roughly 18 years after taxpayers saved NatWest from collapse.

The timeframe is longer than it took for the government to offload its holding in Lloyds Banking Group, which was handed a £20.3bn bailout after it took over HBOS in a government-orchestrated rescue plan at the height of the financial crisis. Lloyds bought back the last of its shares from the government in 2017.

With Lloyds, the government abandoned a plan for a retail offering to the public in 2016 – a pledge made by George Osborne – and decided to sell its remaining stake on the stock market instead at prices below the 73.6p average price taxpayers paid for their stake.

The main reason for the delay is that the government is trying to avoid losing taxpayer money in the process of disposing of its NatWest stake. Over the past decade, shares in NatWest have traded at barely half the average price of the bailout.

It has also been selling NatWest shares under a trading plan, drip feeding shares back into the market.