Jeremy Hunt, the chancellor of the exchequer, said that the Government of the United Kingdom will explore the possibility of selling its stake in NatWest Group and has intentions to offer the shares to the public if the appropriate decision is made.
Currently, the British government owns 38.6% of the securities of the specified financial institution, which is one of the largest organizations in the structure of the banking sector of the UK.
The chancellor of the exchequer said during a speech in parliament that he would explore options for offering retail shares in the next 12 months. According to him, the final decision on this issue will be made taking into account market conditions and the price-quality ratio factor. This means that anyone can become the owner of the shares. Previous sales of securities have been limited to financial institutions.
On Wednesday, November 22, NatWest’s share price decreased by 1.4%. Currently, the market value of the financial institution is 18 billion pounds. Since the beginning of this year, this indicator has decreased by a quarter.
The British government acquired 84% of NatWest’s securities during the 2008 financial crisis, pumping 45.5 billion pounds into a lender known at that time as Royal Bank of Scotland. Over time the so-called state share in the ownership structure of NatWest was reduced due to the sale of six blocks of shares.
Susannah Streeter, head of finance and markets at Hargreaves Lansdown, an analytical company, says that allowing retail investors to purchase shares of the lender is a welcome step.
The British government intends to privatize NatWest by 2025-26 fully. In this case, it took longer than the reduction of the authorities’ stake in Lloyds Banking Group, which received financial assistance for 20.3 billion pounds after it acquired Halifax Bank of Scotland (HBOS). This lender bought the last of its shares from the government in 2017.
In the case of Lloyds, it was decided to abandon the plan of retail placement of shares to the public. The government decided to sell its secures at a cheaper than the average price of 73.6 pence.
Over the past decade, NatWest shares have traded almost twice as low as the average amount of financial assistance. For this reason, the process of selling the government’s share was slowed down, as attempts were made to minimize the losses of taxpayers.
As we have reported earlier, Ex-NatWest Boss Loses Out on £7.6 Million.