- The UK government is considering selling shares it holds in NatWest to retail investors for the first time
- This option will be explored over the next 12 months.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
“Giving retail investors a slice of ownership in NatWest is a welcome move given that they have been left out of previous sales, which have been reserved for institutional investors. This is a recurrent theme, retail investors are rarely offered the full suite of investing opportunities, so this would buck the trend. Further sales would again bring NatWest closer to full public ownership and would bring to a close crisis actions taken during the Great Financial Crisis. The government announced at the Spring Budget that it intended to fully exit the shareholding by 2025-2026, subject to market conditions and achieving value for money for taxpayers. But shares are down by almost a third since January, with a sharp fall prompted in October by some disappointing third quarter figures. Markets were expecting a dip in net interest margin as consumers moved from non/low interest-bearing accounts to higher rate longer-term products in search of better returns, but the pace of switching took markets by surprise. NatWest isn’t alone in facing this challenge. But as a more traditional bank, interest income is a big part of the pie. On a more positive note, provisions set aside for debt defaults were better than first thought and full-year guidance remains intact. At the current valuation the potential for returns, as some of present headwinds ease off, look attractive for both the business and existing and new shareholders.’’
