The 2023 autumn statement unveiled government plans to sell its 38.6% ownership of NatWest by 2025/26.
Chancellor Jeremy Hunt said it intends to use a range of disposal methods, including a potential share sale to retail investors. And this could happen within the next 12 months.
The shares have been left out of previous sales reserved for institutional investors and excluded when the government sold its stake in Lloyds – despite similar promises. So giving retail investors the chance to participate in the sale of NatWest is a welcome move.
All investments and any income they produce will rise and fall in value, so you could get back less than you invest. This article isn’t personal advice. If you’re not sure if an investment's right for you, please ask for advice.
How is NatWest doing?
It’s been a difficult year for NatWest. The share price is down nearly a quarter since January, there’s been a change at the top after the resignation of Alison Rose, and a sharp fall in October after disappointing third-quarter figures.
Further sales would spell an end to the government’s intervention of rescuing the bank during the 2008 financial crisis. However, the government will be mindful of market conditions and getting value for money for taxpayers, although that could prove subjective.
Between 2008 and 2009, it cost the government £45.5bn to bail out the then Royal Bank of Scotland. Previous reports suggest this was at an average 502p per share, much higher than the current price of 207p.
Read our latest NatWest share research
How could the NatWest retail share offer work?
The government hasn’t yet shared details of how a share sale would work. But it’s worth looking at a similar scheme which was planned, and later dropped, for Lloyds Bank.
Speculation at the time was that people would’ve had the option to apply for between £250 and £10,000 worth of shares. A discount of at least five percent to the market price would’ve then applied. If held for a year or more, then a bonus of one extra share for every 10 would be awarded, capped at £200 worth of bonus shares per applicant.
What all this would’ve meant for existing shareholders was never specified. There’s a chance retail investors could have been able to sell their existing shares, then reinvest to get the bonus or discount. So, the government would’ve had to consider whether the share sale should run alongside another form of rights issue, with a discount to reward holders.
Something similar could be considered for the NatWest sale, but there’s no guarantee.
Investing in share offers and individual companies isn’t right for everyone because if that company fails, you could lose your whole investment. If you cannot afford this, investing in a single company might not be right for you. You should make sure you understand the companies you’re investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio.
Sign up for NatWest share offer alerts
Retail share offers tend to happen very quickly, with little notice. Sign up for our alerts to stay up to date with the latest news, including:
- If the UK government confirms plans to sells NatWest to retail investors
- If you can take part in the retail share offer
You’ll also get helpful tips and information on what to think about when investing in shares, plus news on selected interesting initial public offerings (IPOs).
Our NatWest alerts are for people who understand the risks of investing in shares and are not personal advice. You should only consider investing if you’re free from significant debt (other than a mortgage) and have sufficient savings in an easily accessible account to cover emergencies.
Register for alerts now
Alerts for potential NatWest retail share offer - register for updates
Please correct the following errors before you continue:
Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.
What did you think of this article?
Article image credit: Getty images/Andrew Aitchison