Government to sell part of its NatWest stake

The UK Treasury has revealed plans to cut its majority stake in NatWest, raising the possibility of share buybacks from the bank. The Government has appointed Morgan Stanley to cut its 54.7% stake in NatWest to 40% over the next 12 months. According to recent estimates from the Office for Budget Responsibility, the taxpayer is expected to make a loss of £38.8bn on its original stake.

The trading plan will run for 12 months, with sales commencing on 12th August 2021 at the earliest and terminating no later than 11th August 2022.

The implementation of a trading plan represents continued progress towards the government’s plan to return this shareholding, acquired as a result of the 2007-2008 financial crisis, to private ownership.

A trading plan involves selling shares in the market through an appointed broker in an orderly way at market prices over the duration of the plan. Shares will only be sold at a price that represents value for money for taxpayers. There is cap on the total number of shares that could be sold of 15% of the total number of NatWest Group shares being traded in the market over the 12 month duration of the plan. The final number of shares sold will depend on, amongst other factors, the share price and market conditions throughout its duration.

The trading plan has been authorised by the Chancellor on the basis of advice from UK Government Investments (UKGI). UKGI and HM Treasury will keep other sale options open, including further directed buybacks and/or accelerated bookbuilds. The decision to launch the trading plan does not preclude the government from using other options to execute future transactions that achieve value for money for taxpayers, including during the term of the trading plan.