Morgan Stanley only bank to charge fees for NatWest privatisation process

Morgan Stanley has emerged as the only bank to levy charges for its involvement in the privatisation of NatWest Group, formerly the Royal Bank of Scotland, while other leading investment banks opted to work pro bono. The Wall Street institution was among seven banks recruited to assist with the sale of taxpayer shares, originally acquired during the 2008-09 financial crisis when the UK government bailed out the lender to the tune of £45.5 billion.

A freedom of information request by The Times revealed that while major financial advisers such as Barclays, Citigroup, Goldman Sachs, JP Morgan, Rothschild, and UBS declined to charge fees for the privatisation effort, Morgan Stanley, acting as the trading plan broker between 2021 and 2025, invoiced the government for £935,644.51.

The National Audit Office observed that competition among financial institutions for the prestigious mandate kept fees notably low, with many advisers viewing the engagement as an opportunity to gain deeper insights or improve their standing for future, potentially more lucrative, projects. UK Government Investments, responsible for managing the privatisation, returned NatWest to full private ownership by May, with the overall process resulting in a loss of £10.5 billion for UK taxpayers.

Despite that outcome, NatWest has delivered robust financial performance since shedding state ownership. Under chief executive Paul Thwaite, the bank’s pre-tax profits rose 30.4 per cent to £2.2 billion in the quarter ending September, supported by a 15.7 per cent increase in total income to £4.3 billion. NatWest’s standalone strategy continues to drive growth and reinforce its position on the high street.

The privatisation was conducted using a blend of accelerated buy backs for institutional investors and wider share sales to the market through a carefully managed trading plan, with NatWest itself purchasing a substantial portion of shares from the state. While government officials initially hesitated to disclose details of bank fees, transparency prevailed following a public interest case, allowing the revelation of Morgan Stanley’s unique charging position.

Chancellor Rachel Reeves hailed the privatisation as a momentous occasion in the country’s recent economic history. NatWest’s chairman Rick Haythornthwaite expressed profound gratitude to the government and taxpayers for their crucial support during a turbulent chapter for the banking sector.