The Treasury’s stake in NatWest is likely to fall below 20% next week, another milestone in the bank’s return to full private ownership, Sky News learns.
The sale of the government’s stake in NatWest Group will hit a new milestone in the coming days when it falls below the threshold at which the Treasury is considered a related party under stock exchange rules.
Sky News can reveal that the taxpayer’s stake in the high street lender is likely to be cut below 20% sometime next week – and possibly on General Election Day.
Under proposed changes to UK listing rules due to be adopted later this year, the related party classification is to be increased from a 10% stake to 20%.
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Falling below that level would trigger the related party clause exactly a year later and mark another key milestone for NatWest on its journey back to full private ownership.
Once the Treasury is no longer categorized as a related party under the listing rules, it will reduce the bank’s administrative burden, Whitehall insiders say.
The government’s stake in NatWest, once more than 80%, has been steadily reduced in recent months through a business plan that has seen the Treasury’s stake dripped into the market.
Separately, NatWest is using excess capital to buy back shares from the government, further reducing its stake.
A spokesman for the bank declined to comment on the prospect of the government’s interest falling below 20%, but said: “We are pleased with the recent pace of reductions in HM Treasury’s stake in the bank.
“The return of NatWest Group to private ownership is a shared ambition and we believe it is in the best interests of both the bank and all our shareholders.”
The government’s continued downgrading of its interest in NatWest comes weeks after the timing of the election scuppered plans for a multibillion-dollar retail offering of its stake.
Under the plans, ordinary investors should receive “bonus” shares in the bank if they hold the shares they received as part of the offer.
Labor has yet to formally state whether it will continue with the plan if it forms the next government.
The combined retail and institutional placement would put ministers within striking distance of NatWest returning to full private ownership 16 years after it was rescued from the brink of collapse with £45.5bn of public money.
Led by Paul Thwaite, whose transition from interim to permanent boss of NatWest was confirmed earlier this year, it struck a deal to acquire a majority of Sainsbury’s Bank and sounded upbeat about its prospects.
NatWest also has a new chairman, Rick Haythornthwaite, who replaced Sir Howard Davies at the annual meeting earlier this year.
But he still faces a possible legal challenge from Nigel Farage, the leader of the Reform Party, who was “freed” in controversial circumstances last year.
The ensuing row cost Ms Alison Rose, Mr Thwaite’s predecessor, her job.
NatWest, which changed its name from the Royal Bank of Scotland Group in an attempt to distance itself from its bigoted expansion, was saved from total collapse by an emergency bailout that its then boss Fred Goodwin likened to “car shooting”.
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In March, the Treasury ceased to be a controlling shareholder in NatWest as it fell below the key 30% threshold.
The government previously said it was committed to exiting the stake by 2025.
Shadow chancellor Rachel Reeves said Labor remained committed to a plan to sell the government’s stake in the bank if it provided value for money.