Chancellor Jeremy Hunt's decision to sell the government's stake in NatWest could result in a £28 billion loss for taxpayers, based on the current share price of approximately 206p. This figure emerged following last week's Autumn Statement, according to analysis by Hargreaves Lansdown. The UK government's involvement with the bank began with the nearly £46 billion RBS (LON:NWG) bailout during the financial crisis, leading to the current 38.69% holding.
The potential loss reflects a significant decrease in share value this year, exacerbated by the departure of Dame Alison Rose and the controversies surrounding the bank's debanking practices. Despite these setbacks, there is still optimism for the banking sector's earnings, buoyed by favorable structural trends and the expectation of a milder recession than initially anticipated.
Since dividends resumed in 2018, NatWest has returned £4.4 billion to the government, a modest sum compared to the original bailout amount. The Treasury is considering a retail investor offer within the next twelve months and aims to achieve full divestment by the end of the fiscal year 2025-26. This plan is contingent on market conditions and the government's commitment to fiscal prudence.
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