Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
UK government plans to launch a mass sale of NatWest shares to the public have been thrown into doubt by an earlier than expected general election.
Rishi Sunak, the UK prime minister, on Wednesday called an election for July 4, kicking off a period of “heightened sensitivity”, during which the government and civil servants must exercise caution about making decisions that could affect the election campaign.
The move is likely to prevent the Treasury from launching a highly anticipated retail share sale of the government-backed bank, which was rescued by the last Labour government in a £46bn bailout at the height of the financial crisis.
Chancellor Jeremy Hunt had pledged to launch the mass campaign as early as this summer as part of a drive to create a “new generation of retail investors” ahead of an expected general election in the autumn.
Under the plans for a retail sale, the state’s shares in NatWest would have been offered at a discount, with a sale to institutional investors conducted alongside.
The government has reduced its stake from a peak of 84 per cent by selling shares to institutional investors. It ceased to be a controlling shareholder in March, and now holds about 27 per cent of NatWest’s shares.
Critics of the retail offer argued that it was a costly and politically motivated endeavour that had prompted the bank to rush a selection process for its chief executive, with a permanent chief widely seen as a necessary precursor to the sale.
Dame Alison Rose, its previous CEO, resigned last year amid a “debanking” scandal prompted by the lender’s elite private bank, Coutts, cutting ties with Nigel Farage, the former leader of the Brexit and UK Independence parties.
In February, the bank confirmed it was appointing interim boss Paul Thwaite on a permanent basis, after he stepped in to lead the bank in July. The search process only officially launched six weeks before his permanent appointment.
The government has since been preparing for the retail share sale, appointing M&C Saatchi to launch what was expected to be a national advertising campaign.
The idea for the sale was to emulate the famous “Tell Sid” advertising campaign of the 1980s when Margaret Thatcher offered discounted shares to the public during privatisations such as that of British Gas.
The move was also part of a wider government effort to boost the public appeal of UK equities alongside other projects including a British Isa.
NatWest and the Treasury declined to comment.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
