The Treasure announced plans to sell another tranche of NatWest shares over the next 12 months, as part of ongoing efforts to make the bank taxpayer-owned private.
The government, which still ownsurs a 54.7% stake in NatWest, said it is deploying a "pre-arranged trading plan " in what could mark its third sale shares this year .
The trading plan, also known as "drip" selling, means that the Treasury could end up selling up to 15% of the average amount of NatWest shares usually traded over 12 months. This could earn the government a maximum of £ 1.2bn based on the current share price, which would be on top of any additional wholesale share sales the government chooses to initiate. over the next year. s23rjr "> However, the Treasury stressed that it would only sell shares at a price that represents good value for the taxpayer. The government is expected to suffer a loss on any sale, having paid 502p per share in thepart of the bank's bailout in 2008.
NatWest shares fell 2.3% to 195p in afternoon trading .
The sale comes as the government struggles to meet a self-imposed deadline to sell its remaining stake in £ 12.6 billion in NatWest by 2025-2026. It also comes as the Chancellor searches for ways to tackle an increase in public borrowing caused by the pandemic, which has resulted in a record increased interest payments on debt , which reached £ 8.7 billion last month.
The government bailed out NatWest Group - aformerly known as the Royal Bank of Scotland - at the height of the 2008 financial crisis, injecting £ 45bn to keep the bank afloat to prevent an even worse collapse of the banking system. The government subsequently took an 84% stake in the bank, which was slowly reduced through four sales of shares.
The Treasury s ' is launched in a similar drip sale, also led by Morgan Stanley, to help reduce the government's stake in Lloyds Bank group before it won't revert to private ownership in 2017.
Ian Gordon, banking analyst at Investec, said he previously expected the government sells its stake in NatWest by 2025. "It is now possible that they are looking to go even faster than that. "