NatWest's Future Share Sale Plans Uncertain Amid Political Changes
- NatWest recently announced a loss of £24 million from a planned advertising campaign featuring Sir Trevor McDonald.
- The campaign's rollout was abruptly halted due to an early election.
- This cancellation has left the bank with significant costs and raises questions about its future marketing strategies.
The anticipated retail share sale of NatWest, initially announced by former Chancellor Jeremy Hunt during last year’s autumn statement, faces uncertainty following the cancellation of a public campaign. The "Tell Sid" initiative, reminiscent of the 1986 British Gas privatization, was set to launch this summer but was abruptly halted in May due to Prime Minister Rishi Sunak's call for an early general election. The incoming Labour government has yet to clarify its stance on the share sale, leaving NatWest to bear the financial implications. Chancellor Rachel Reeves is reportedly considering scrapping the retail share sale in favor of selling the remaining 19.9% stake to institutional investors, such as asset managers and pension funds. This shift could potentially reduce costs for both the government and the bank while allowing staff to focus on other priorities. NatWest's Chief Executive Paul Thwaite refrained from commenting on the government's plans but indicated that Reeves might provide updates during the upcoming autumn statement. In recent earnings results, NatWest reported a 4.1% decline in pre-tax profits to £1.7 billion for the three months ending June, although this figure surpassed analysts' expectations of £1.3 billion. The bank also adjusted its provisions for potential defaults, releasing £45 million instead of the anticipated £161 million, reflecting an improving UK economic outlook. Additionally, NatWest expanded its customer base by acquiring 10,000 new clients through the purchase of Metro Bank’s prime mortgage book, marking Thwaite's second acquisition this summer.