Government brings ownership of NatWest to 22.5%
Life comes at you fast if you are the person responsible for maintaining the shareholder register at NatWest.
Until last week, it was hoped that the bank would be at the centre of Jeremy Hunt‘s plans to get millions more Britons investing in the stock market.
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The chancellor first said last year that he hoped a new generation of retail investors could “engage with public markets” by buying some or all of the government’s remaining shareholding in NatWest.
With a nod to Margaret Thatcher’s successful privatisations in the late 1980s – which saw more than 10 million Britons become shareholders for the first time via stakes in businesses like British Telecom, British Airways and Rolls-Royce – the chancellor conjured up the spirit of the “If you see Sid, tell him” advertising campaign that, in autumn 1986, convinced more than 1.5 million Britons to buy shares of British Gas.
He told MPs in November: “It’s time to get Sid investing again.”
Those plans have now been scuppered by the unexpectedly early general election and the retail offer was formally shelved last weekend.
Determined to return to private ownership
Today, though, brought evidence that the government remains determined to return NatWest to private ownership.
It announced it has sold £1.24bn worth of shares in the lender back to NatWest itself – taking its stake down from nearly 26% to 22.5% in the process.
That stake, at its peak, had stood at nearly 84% after Gordon Brown‘s government was forced to rescue the lender – then called Royal Bank of Scotland – in 2008 at the height of the global financial crisis.
The government took its stake below 30% – which is deemed to be a controlling shareholding – with a sale to institutional investors in March this year.
The latest sale, carried out off-market, was at a price of 316p-a-share – a smidgen below NatWest’s closing price of 316.2p on Thursday night. It is the fourth such buy-back by NatWest of its shares from the government since 2021.
‘Important milestone’
Paul Thwaite, NatWest’s chief executive, said: “This transaction represents another important milestone for NatWest Group, building on recent momentum in the reduction of HM Treasury’s stake in the bank.
“We believe it is a positive use of capital for the bank and for our shareholders and represents further progress against the ambition to return NatWest Group to full private ownership.
“Our focus remains on delivering for our customers which will, in turn, deliver for our shareholders and the UK economy.”
There are a few observations to make here.
The first is that, attractive as it would have been to get a new generation of retail shareholders investing in the UK stock market, selling down the government’s stake in NatWest in this way delivers better value for money for taxpayers.
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That is because the government would have been forced to sell its NatWest shares at a significant discount to the prevailing market price to encourage retail investors to pony up.
It would also probably have had to have offered other incentives, such as bonus shares for those shareholders retaining their stake for a year, to avoid those investors from ‘stagging’ the issue, in other words, buying the shares at a discount and then selling them immediately to lock in a modest profit.
Likely a shareholder for years but more sales in the coming weeks
The second observation is that the government – whoever wins the general election – is likely to remain a shareholder in NatWest for some time to come.
While a retail share offer might not necessarily have represented good value to taxpayers, it would certainly have accelerated the bank’s full return to private ownership. Mr Hunt has pledged to return NatWest to full private ownership by the end of 2026.
And a third is that this latest move does not preclude further share sales in coming weeks.
The Treasury has been using three ways to reduce its stake.
One is via direct sales to NatWest itself. This is unlikely to happen again for a while because it needs to be approved by NatWest shareholders – and the most recent authorisation has just been fulfilled by the latest purchase.
The second is via sales of large portions of the government stake to shareholders – which requires a sign-off by ministers and is therefore unlikely during the election campaign.
The third is via the Treasury’s existing sales plan, under which small quantities of stock shares are released into the market, which is probably the way forward for now.
The government’s exit via this latter route will undoubtedly be aided by the rally in NatWest shares which, since the start of the year, are up by just over 43%. The lender recently published its best annual results since the rescue of the old RBS.
What does Labour make of it?
What is not yet clear is the attitude that a future Labour government might take on the stake in NatWest.
It was always suspected when Jeremy Corbyn was Labour leader that, should he become prime minister, he would have retained the shareholding.
Sir Keir Starmer, by contrast, is assumed to be sympathetic to selling down the stake just as the current government is.
As Gary Greenwood, banking analyst at the investment bank Shore Capital, told clients earlier this week: “Should the Labour Party come to power, as widely anticipated, then such plans [for a retail share offer] are likely to be revisited and possibly amended.
“That said, whoever wins the election will still be looking to reduce and ultimately exit the Government’s stake in NatWest, in our view, so the sell down is still likely to continue in one form or another.”
Mr Thwaite and his colleagues would doubtless like to see NatWest returned to private ownership as quickly as possible so they can get on with running the bank and restoring its fortunes.
It would be helpful for all concerned were Mr Hunt’s shadow, Rachel Reeves, to make it clear where Labour stands on the timing of this.
Business
Energy bills to rise again from January but spring falls to come, research firm Cornwall Insight forecasts
Energy bills are to rise again next year, according to a respected forecaster.
Costs from January to March are projected to rise another 1% to £1,736 a year for the average user, according to research firm Cornwall Insight.
The energy price cap, which sets a limit on how much companies can charge per unit of electricity, is also expected to rise, costing typical households an extra £19 a year.
It’s a further increase after energy costs rose 10% from October.
After the latest hike, there were hopes of a fall in the new year, but volatile wholesale gas and electricity markets are still above historic average costs.
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Prices have gone up due to supply concerns arising from Russia‘s war in Ukraine, and maintenance of Norwegian gas infrastructure.
But spring is expected to herald a reduction as is October 2025, Cornwall Insight said.
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‘Energy prices make me depressed’, pensioner Roy Roots said in August
Every three months energy regulator Ofgem revises the cap based on wholesale costs.
The official January price cap announcement will be made on Friday.
It comes as millions of pensioners lost their automatic winter fuel allowance payment after the government means-tested the benefit.
Meanwhile, Cornwall Insight’s principal consultant Dr Craig Lowrey warned “millions” of households won’t heat their homes to “recommended temperatures, risking serious health consequences” with bills on the rise.
“With it being widely accepted that high prices are here to stay, we need to see action,” he said, suggesting options like cheaper rates for low-income homes, benefit restructuring, or other targeted support for the vulnerable “must be seriously considered”.
The energy price cap system is being reviewed by Ofgem with possible changes to the standing charge coming over the next year.
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The long-lasting solution to high energy bills is the transition to UK-produced renewable power, the firm said.
“While there will be upfront costs, this shift is essential to building a sustainable and secure energy system for the future.”
The owners of Scotland’s only oil refinery have rejected a US-led approach about a possible bid for it months before its scheduled closure.
Sky News has learnt that a consortium said to be led by Robert McKee, an American energy industry veteran, wrote to Petroineos, the owner of the Grangemouth site, to express an interest in buying it.
The approach, which is understood to have been made earlier this month, was rejected by Petroineos, which is 50%-owned by the petrochemicals empire founded by the Manchester United FC shareholder Sir Jim Ratcliffe.
The consortium is understood to comprise The Canal Group, which is reportedly developing a green energy refinery in Texas, and Trading Stack, a Middle East-based commodities trader.
Mr McKee spent nearly four decades with ConocoPhillips, one of the biggest energy companies in the US.
Sources close to the situation said that Petroineos had rebuffed the offer in order to concentrate on a publicly announced plan to transform the century-old plant into a finished fuels import terminal.
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They added that the nature of the consortium’s approach had raised questions about its access to financing and expertise in operating an asset of this kind.
The Grangemouth refinery, which employs about 450 people, loses about £200m annually.
Its other shareholder is the state-backed Chinese energy giant PetroChina.
The site is due to close next year.
A person close to the consortium insisted that its financing was robust and said it would assess the feasibility of building a new refinery elsewhere in the area.
They added that the consortium had had “positive interactions” with trade union officials, and believed that there was scope to rapidly make Grangemouth’s refinery operations profitable.
On Monday, a spokesman for Petroineos said: “Since the Petroineos joint venture was formed 13 years ago, our shareholders have invested nearly £1bn in the refinery, only to absorb losses of £600m.
“Last week, the refinery lost £385,000 on average each day and we expect to lose more than £150m in total during the course of this year.
“We have not received any credible or viable bids for the refinery.”
A spokesman for the consortium declined to comment.
Cineworld’s hedge fund backers are drawing up plans to return the cinema operator to the public markets amid continuing uncertainty about the future of dozens of its British sites.
Sky News has learnt that the company’s owners are at the early stages of considering a New York listing for the business, with the first half of 2026 considered a likely window for it to take place.
City insiders said that a flotation was likely to encompass Cineworld’s operations outside the UK, with the group’s board expected to consider a sale of the British operations at some point.
They cautioned, however, that no decisions had been reached and would not be for some time.
The fate of Cineworld’s business in the UK has been mired in uncertainty for months, with the company initially exploring a sale of it before turning to a restructuring plan which compromises many of its landlords and other creditors.
It has announced the permanent closure of six sites, but it emerged last month that nearly 20 more were at risk of being shut amid ongoing talks with property owners.
The restructuring plan is due to complete later this month, which some landlords have opposed over the fairness of its terms.
Documents circulated as part of the restructuring plan process highlighted the fact that the company did not have sufficient funding to meet a quarterly rent bill on June 24 of £15.9m.
“Absent this funding, the UK Group would have been insolvent on a cashflow basis,” they said.
Other cinema operators, such as Odeon, are now poised to step in to take over small numbers of Cineworld’s other sites.
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The company trades from more than 100 locations in Britain, including at the Picturehouse chain, and employs thousands of people.
Cineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.
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Its multibillion-dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.
It delisted from the London Stock Exchange in August 2023, having seen its share price collapse.
In addition to the UK, Cineworld also operates in central and Eastern Europe, Israel and the US.
Cineworld has been contacted for comment.
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