NatWest has stated that it “welcomes” the government’s commitment to returning the high street bank to sole private control following the chancellor’s announcement that she would not be conducting a retail share sale in it.
According to Rachel Reeves, the plans that the previous Conservative administration unveiled were a “bad use of taxpayer money.” She also suggested that the remaining state-owned stock in the bank might now be sold off to major institutional investors instead.
A mass-market sale was going to take place this summer, and officials were getting ready for it. Shares were going to be given to regular investors at a price that was lower than the current share price of the bank. Additionally, “bonus” share offers were going to be made in order to stimulate buy-in.
Nevertheless, the rollout, which was supposed to be supported by an advertising campaign comparable to the “Tell Sid” effort that accompanied the sale of shares in British Gas following its denationalization in the 1980s, was put on hold as a result of Rishi Sunak’s decision to call an unexpected general election.
After being bailed out with a total of £46 billion of public money in 2008 and 2009 during the financial crisis, the bank, which was once known as Royal Bank of Scotland, was at one point owned by the taxpayers to the extent of 84%.
Since that time, the Treasury has been selling down its holding in the institution, and in recent weeks, the state’s ownership has dropped to below 20%.
On the other hand, it was anticipated that the retail share sale may wind up costing taxpayers as much as 450 million pounds.
According to the chancellor, the government’s intention to “fully exit” its investment in Natwest by the year 2025-26 remained unchanged.
She made the following statement to the House of Commons on Monday: “However, after taking into consideration the advice that I have received, I have come to the conclusion that a retail share sale offer would involve significant discounts that could cost taxpayers hundreds of millions of pounds.”
As a result, it would not be a good value for the financial investment.
This will not be carried out. We will not do it since it is a waste of money that belongs to the taxpayers.
A representative for the NatWest Group made the following statement: “We welcome the chancellor’s commitment to returning total private ownership to the NatWest Group.”
“This is a shared ambition that we believe is in the best interests of both the bank and all our shareholders.”
The bank disclosed the amount of money it had spent on the abandoned initiatives, which included advertising, the previous week.
It is understood, however, that a portion of that sum is anticipated to be re-used for general advertising purposes, despite the fact that the bill also covers expenses and fees related to legal representation.