Natwest share price slump casts doubt on privatisation plans
Taxpayers could be forced to pay significantly more for the bailout of Natwest following the bank’s latest share price slump.
Shares currently sit at £1.87, down from around £5 when the government acquired an 84 per cent stake in the bank during the financial crisis.
It has since lowered its stake to under 40 per cent after a series of sell-offs, recouping around £5bn, but it is still incurring a significant loss overall.
The Office for Budget Responsibility forecast earlier this year that taxpayers would lose £33bn from full privatisation while Natwest shares were still over £3.
However, the bank’s stock cratered in its biggest one-day drop since Brexit after Natwest reported weak third-quarter results at the end of October.
The government has insisted, however, that it will not sell its stake for an unfair price.
A Treasury spokesperson told CityAM that it still committed to fully privatising Natwest by 2026 but would “only do so if we are getting a fair deal for taxpayers”.
The bank’s poor results came after an internal review into the Nigel Farage debanking scandal, which found that former boss Dame Alison Rose made an “honest mistake” when she leaked confidential information about the former UKIP leader’s finances to the BBC – an action the UK’s data watchdog found was a clear infringement of his data protection rights.
Rose could still potentially receive an exit fee of as much as £10m.
News of the bailout cost comes as it was also revealed that former Royal Bank of Scotland boss Fred Goodwin is now receiving a pension of more than half a million pounds a year after the Natwest-owned bank nearly collapsed under his leadership.
After his resignation in 2009, Goodwin was entitled to a pension of £703,000 per year, which he voluntarily reduced to £342,500 following public backlash.
But this figure has since risen to around £545,000 a year after being hiked in line with inflation, according to analysis by wealth manager Quilter that was first reported by The Mail on Sunday.
Natwest declined to comment on Goodwin’s pension, while Goodwin could not be reached for comment.