NatWest has said it “welcomes” the government’s commitment to returning it to full private ownership after the chancellor announced she was scrapping a retail share sale in the high street bank.
Rachel Reeves said the plans, announced by the previous Conservative administration, were a “bad use of taxpayer money” and suggested the bank’s remaining state-owned stock would now be sold off to large, institutional investors instead.
Officials had been gearing up for a mass-market sale this summer, with shares offered to ordinary investors at a discount to the bank’s prevailing share price, along with “bonus” share offers, to encourage take-up.
However, the rollout – which was due to be backed by an advertising campaign similar to the “Tell Sid” push that accompanied the sale of shares in British Gas following its denationalisation in the 1980s – was put on hold by Rishi Sunak’s decision to call a sudden general election.
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The bank – formerly known as Royal Bank of Scotland – was at one stage 84% owned by the taxpayer after it was bailed out with a total of £46bn of public money in 2008 and 2009 during the financial crisis.
The Treasury has since been selling down its stake in the lender, with the state’s stake dropping to below 20% in recent weeks.
However, it was estimated the retail share sale could end up costing taxpayers up to £450m.
The chancellor said the government still intended to “fully exit” its shareholding in Natwest by 2025-26.
Speaking on Monday, she told the Commons: “But having considered advice, I have concluded that a retail share sale offer would involve significant discounts that could cost taxpayers hundreds of millions of pounds.
“It would therefore not represent value for money.
“It will not go ahead. It’s a bad use of taxpayer money and we will not do it.”
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A NatWest Group spokesman said: “We welcome the chancellor’s commitment to returning NatWest Group to full private ownership.
“This is a shared ambition that we believe is in the best interests of both the bank and all our shareholders.”
Last week, the bank revealed it had spent £24m on the scrapped plans, including advertising.
However, it is understood that some of that amount is expected to be re-used for general advertising uses, although the bill also covers legal fees and expenses.