Retail investors may receive a bonus share of NatWest if hold the stock for more than a year. This is part of plans by ministers to privatise some government shares of the bank in a Tell Sid style.
The plan is to sell NatWest shares in a mass market, something that Jeremy Hunt, chancellor of the UK, said would “create a whole new generation of retail investor”.
The Treasury holds a stake of approximately 28 percent in NatWest Group, valued at around £7 billion. According to reports, the retail offer would be launched in conjunction with an institutional placement, which could lead to the Treasury’s share falling as low at 10%.
Sky News reports that ministers are looking into plans to award a bonus share for each ten shares purchased by retail investors, and held by them for a minimum of a year. However, this plan could be changed by officials. Royal Mail also offered loyalty shares.
Officials also consider a minimum investment amount of £250 and a maximum of £10,000. In the past government retail share offers included a small discount from the current share price in order to encourage people buy the stock. This offer could launch as soon as this month.
The taxpayer was NatWest’s largest shareholder after the government saved the lender (then known as Royal Bank of Scotland) for £45.5billion during the financial crises of 2007-2009. The government stake, which was once up to 84 percent, has been reduced due to deals to sell large shares to institutional investors and buybacks. All sales were lower than the 502p per shares that the government paid in the crisis.
Last year, the FTSE 100 Bank became embroiled in a scandal over the decision of Coutts Private Banking to drop Nigel Farage as a client. Farage was the former leader Ukip. Dame Alison Rose, the former chief executive officer of NatWest Bank, was forced to step down after it emerged that she had given inaccurate information to the BBC about Farage’s finances.
Nigel Farage has warned people to not “invest their money in NatWest shares”.
Farage stated last month that “the debanking controversy is far from being over”, and “no British citizen should invest their money in NatWest Group while they continue hiding the facts, information, or the truth about me”.
Paul Thwaite has been appointed CEO this year. Paul Thwaite has been with the company for over 27 years. He previously led its institutional and commercial units. Thwaite said previously that returning NatWest into private ownership was “a shared ambition” with government, and “in the best interest of all our shareholders and the bank”.
The slogan “Tell Sid”, used in the 1986 British Gas IPO, captured the attention of new investors. The government is trying to create a similar buzz and encourage more public investment in London listed shares.
NatWest’s operating profit before tax was £6.2 billion in the last year. This is a five-fold increase compared to the previous year. It also represents its highest return since it received state bailout.
Treasury stated: “The Government will decide in due time whether to launch a retail offering for NatWest shares. There have been no final decisions made.
NatWest stated: “Any decision on timing or mechanics for a possible retail offer is a matter of the government.”