Natwest bonus scheme planned for Tell Sid shareholders

Natwest shareholders will be awarded bonus shares if they hold onto its stock for more than a year, plans for the sale of the government’s stake in the bank have indicated.

Chancellor Jeremy Hunt announced in his Autumn Statement last November that the government would explore a ‘Tell Sid ‘-style plan to offer its 28 per cent stake in the Big Four lender to the general public in the next 12 months.

Now, the government is considering sweetening the deal for retail investors by offering them one bonus share for every 10 bought from the government and held for at least a year, similar to the Royal Mail’s sale a decade ago.

Other proposals include a minimum investment of £250, as well as a ceiling of £10,000, according to reports from Sky News, which would match an abandoned 2015 Treasury plan for a retail offering of the government’s stake in Lloyds Banking Group.

A small discount for retail investors to the bank’s current share price could also be applied, but the final details such as the bonus share ratio and exact investment thresholds could still be changed, sources added.

While there is no exact date for the sales of the shares, which are worth about £7bn, the government has said it planned to start selling its shares as soon as this month.

Further buybacks by the bank and stock sales by the government, especially in March, have reduced the taxpayer’s stake to around 28 per cent, the lowest since the wake of the financial crisis.

Last week, Steven Levin, the boss of London-listed money manager Quilter, slammed the plans, saying the sale was too “isolated” to make a difference in revitalising the London market and could be “dangerous” if retail investors got too overexposed to a single stock.

“If you’re going to go and say, ‘we’re gonna sell Natwest and everyone buy it’, well actually, that in itself is dangerous, because there’s no diversification there,” Levin said. 

City A.M. has reached out to Natwest for comment.