Taxpayer stake in NatWest falls as retail share sale is delayed

NatWest has purchased £1.24 billion of shares back from the Treasury as the general election has stalled plans for a retail offering. Here is how you can still buy NatWest shares

Natwest bank branch
(Image credit: Getty Images)

The taxpayer stake in NatWest has been reduced after the Treasury sold £1.24 billion of its shares back to the bank.

The sell-off of 392.4 million shares brings the taxpayer stake in NatWest down from 25.98% to 22.5%.

"This transaction represents another important milestone for NatWest Group, building on recent momentum in the reduction of HM Treasury's stake in the bank,” says Paul Thwaite, chief executive of NatWest Group.

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“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." 

It comes as a planned Tell Sid-style public offering of NatWest shares has been delayed due to the general election.

Research by abrdn suggests that if, or when, the NatWest share sale happens, there will be plenty of interest.

A survey of 3,000 adults adults by the asset manager found 23% were likely to buy the shares if the mooted NatWest share sale goes ahead – and that’s without a national advertising campaign.

That would be the equivalent of 12m people nationally.

But you don't have to wait for a public offer and can buy NatWest shares now if you want to.

How much of NatWest does the taxpayer own?

The Treasury, or the taxpayer, took a stake in NatWest-owner Royal Bank of Scotland at the height of the 2008 financial crises to prevent the lender from collapsing.

Its stake hit a high of 85% in 2009 but has gradually been reduced through share buybacks and institutional sales.

The taxpayer stake fell to around 38.6% last year before dropping to 25.98% more recently and 22.5% this week.

Chancellor Jeremy Hunt had signalled that NatWest could return to full public ownership this summer with a retail offering, but that has now been delayed by the general election.

Can I buy NatWest shares?

There is nothing stopping NatWest shares being sold without another public offering.

Retail investors can already purchase NatWest shares through a broker or investment platform.

It is a strong UK banking stock, with shares are up by around 44% so far this year and it pays a decent dividend yield of 5.35%.

It is less clear if and when a retail offering of the remaining taxpayer stake will happen though as it will depend on the general election result and the priorities of the new government.

For now, the Treasury has confirmed that no share offering of the taxpayer stake will take place during the election period.

Marc Shoffman
Contributing editor

Marc Shoffman is an award-winning freelance journalist specialising in business, personal finance and property. His work has appeared in print and online publications ranging from FT Business to The Times, Mail on Sunday and The i newspaper. He also co-presents the In For A Penny financial planning podcast.