Spring Budget 2024: Hunt set to unveil Natwest government share sale aiming to raise up to £4bn

Chancellor Jeremy Hunt is set to unveil more details on the government’s plan to sell its shares in Natwest to retail investors at next week’s Spring Budget, alongside wider reforms to boost UK capital markets activity.

Hunt is expected to give more clarity on when the retail offer could begin and how much the government is looking to raise.

He said in November the Treasury would explore options to launch the offer within 12 months.

Holger Vieten, a director at UK Government Investments who is leading the sale plan, told MPs earlier this month that “the very earliest” the retail offer could begin “could be around summertime”, later defining this period as starting in June.

It is understood that the Treasury wants to start the sale before the summer break and was waiting for the bank to install a permanent chief executive, which it did with Paul Thwaite earlier this month.

The Guardian reported on Thursday the government was looking to raise between £3bn and £4bn from its sale. Shares are expected to be priced at a discount to make them more appealing.

After recent sales, the government currently holds a 32.88 per cent stake in Natwest. Based on the bank’s current market capitalisation of £20.6bn, the state’s holding is worth £6.8bn.

It acquired an 84 per cent stake at an average of around 500p per share to rescue Natwest during the financial crisis in 2008.

The Treasury plans to fully privatise the bank by 2026. Although it has repeatedly stressed that it will not sell its stake for an unfair price, taxpayers have lost out as Natwest’s shares have tumbled.

After a tumultuous year marked by a row with former Ukip leader Nigel Farage over the closure of his Coutts account, the stock received a boost this month after Natwest posted its biggest annual profit since 2007 on the back of higher interest rates.

Firms working with the Treasury on the retail offer include advertising agency M&C Saatchi, law firm Freshfields Bruckhaus Deringer, Barclays and Goldman Sachs.

Bloomberg News reported yesterday that the government had opened talks with brokers AJ Bell and Hargreaves Lansdown to help market the shares. Both firms declined to comment.

A Treasury spokesperson told City A.M.: “As the Chancellor set out at Autumn Statement, we are exploring options for a Natwest retail offer, subject to market conditions and achieving value for money.”

The last time the government launched a similar offer was with Royal Mail shares in 2013, luring some 700,000 retail investors.

It made plans to offer its shares in Lloyds Banking Group in 2015 but pulled out the following year before fully offloading its stake in 2017.