Ordinary investors will receive “bonus” NatWest Group shares if they hold shares they purchase in the taxpayer-backed bank under a plan expected to be finalized by ministers later this month.
Sky News has learned key details about options being explored by the Treasury for a multibillion-pound retail offering of NatWest shares, including a likely £10,000 limit on applications from members of the public.
Jeremy Hunt, the chancellor, announced in last year’s autumn statement that he would explore a mass market share sale “to create a new generation of retail investors”.
Since then, further buybacks by the bank and share sales by the government have reduced the taxpayer’s shareholding to around 28% – worth around £7 billion at NatWest’s current valuation.
The retail offer will be launched together with an institutional placement of shares in the bank which, as a whole, could lead to the Treasury’s stake falling to just 10%, sources indicated this weekend.
If investor demand is greater than expected, the reduction could be even more substantial, they said.
That would put the government very close to returning NatWest to full private ownership, 16 years after the lender was rescued from the brink of collapse with £45.5 billion of public money.
This weekend, sources said options under active consideration by Treasury officials included a minimum investment of £250, to encourage broad participation in the retail offering.
A £10,000 cap was “likely”, they said, mirroring a 2015 Treasury plan – which was later abandoned – for a retail offering by the Treasury of Lloyds Banking Group shares.
The NatWest offer is also expected to award one bonus share for every ten purchased by retail investors and held for at least a year, the sources added, although they cautioned that final details such as the bonus share index and precise investment limits , could still be changed. by employees.
A modest discount will also be applied to the bank’s prevailing share price to encourage membership.
People close to the decision-making process said Hunt and Rishi Sunak, the prime minister, were being kept closely informed about the plans.
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Depending on market conditions, they said the offering launch announcement could come in late May or early June.
The green light will be subject to any political turmoil following this week’s local elections, they added.
NatWest shares have risen more than 20% in the last year despite the turmoil surrounding the demotion dispute involving former UKIP leader Nigel Farage.
Dame Alison Rose, the bank’s former boss, resigned last year after it emerged she had spoken to a BBC journalist about the closure of Farage’s accounts.
She has since been replaced by Paul Thwaite, whose transition from interim to permanent head of NatWest was confirmed earlier this year.
NatWest also has a new chairman, Rick Haythornthwaite, who replaced Sir Howard Davies at its annual meeting last month.
Farage, who has threatened to take legal action against the bank, recently declared that his fight with the lender is “far from over”.
“For a NatWest retail share sale to work – as outlined by Jeremy Hunt in the Budget – investors must have confidence in the bank,” he said.
“My dispute over disqualification with them is far from over.
“They acted in a politically prejudiced way against me and then deliberately tried to cover it up.
“Until they provide full information and apologize for their behavior, why should any retail customer trust them?”
The government’s shareholding in NatWest has been steadily reduced over the past eight years, from almost 85%.
Sky News revealed earlier this year that ministers had called in M&C Saatchi – the advertising agency founded by the brothers who helped bring Margaret Thatcher to power – to orchestrate a campaign to persuade millions of Britons to buy shares in NatWest.
NatWest, which changed its name from the Royal Bank of Scotland Group in an attempt to distance itself from its over-expansion and arrogance, was rescued from total collapse by an emergency bailout that Fred Goodwin, its then boss, likened to “a gunfight “.
A NatWest spokesperson said “decisions on the timing and mechanics of any offer are a matter for the Treasury”.
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