Will Rachel Reeves press on with plan to Tell Sid?

Dame Alison Rose, the Liverpudlian banker’s immediate predecessor who succeeded Mr McEwan, had a significant in-tray to deal with too, not least in the form of the pandemic, before she eventually fell on her sword last year owing to a scandal involving Nigel Farage’s accounts with the bank. Dame Alison admitted to being the source of stories which appeared in the media about the politician's relationship with Coutts, NatWest's private banking business.

Mr Thwaite, who was appointed chief executive on a permanent basis in February, has had a relatively benign start to his stint at the top, and appears to have steadied the ship following the tumult of Dame Alison’s departure.

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In April, he presented the bank's results for the first quarter which exceeded City forecasts, and over recent months has seen the UK Government’s stake in the bank, a legacy of its publicly backed bail-out, continue to decrease. Earlier this month, it emerged that the UK Government’s shareholding had dipped below 20% for the first time since 2008, as the public’s stake continued to be whittled down as a result of the bank buying back shares from the Treasury and the Government’s own trading plan.

That development was seen as a further symbolic milestone passed by the bank in its long-running journey back to full private ownership. However, that goal may yet be delayed further still.

Prior to the Tories’ historic defeat in the July General Election, the Conservative Government announced plans to hold a retail offer of some of the remaining shares the Treasury held in the bank.

Former Chancellor of the Exchequer Jeremy Hunt cited the famous Tell Sid advertising campaign, pictured above, which encouraged the public to buy shares in British Gas during the Tory privatisation spree of the 1980s when he announced the NatWest plan at the Budget in March. The move was welcomed by stockbrokers as a means of encouraging people to get into the way of investing.

(Image: Newsquest)

NatWest chief executive Paul Thwaite with finance boss Katie Murray

The Conservative Government had signalled the share sale could take place later this summer. However, after Labour swept to power following its landslide win on July 4, there appears to be less certainty that the plan will proceed.

The new Government has no shortage of competing priorities, from a creaking NHS to overcrowded prisons, as it looks to undo 14 years of Tory chaos and position the UK economy for growth, and it is surely likely that selling the NatWest shares is well down its list of objectives. There is perhaps also an argument that a share offer looks very much more like a Tory thing to do than a Labour policy, which may dissuade new Chancellor Rachel Reeves from seeing through a policy announced by Mr Hunt.

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At any rate, the UK public’s shareholding in the bank will continue to fall as long as the Treasury keeps selling parcels of shares, as Dan Coatsworth, investment analyst at AJ Bell, observed earlier this month.

In his view, it “looks increasingly unlikely” that the Labour Government will progress plans for a public sale, albeit he would regard this course of action as a “missed opportunity”.

“Even since the general election was called on 22 May, the Treasury has been quietly offloading parcels of NatWest shares in either off or on-market transactions,” Mr Coatsworth said.

“Since postponing the public share offering, the Treasury’s stake in NatWest has gone from 26.95% to 19.97% via five rounds of sales, implying there is enough demand from institutional investors to mop up its stock.

“Maintaining that pace of sales would suggest the Treasury may not need to resort to a public share offering, but ditching the plan completely would be a missed opportunity. Holding a big campaign to clear the remainder of its holding could be a major catalyst to get people investing for the first time.”

However, John Moore, senior investment manager at RBC Brewin Dolphin, is more convinced that a retail offer will go ahead, although he suggested it may proceed in a different format. “It seems likely that the new Labour Government will go ahead with the proposed retail share offer for NatWest, but whether it takes exactly the same form as the previous incumbents had in mind remains to be seen,” Mr Moore told The Herald.

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“The potential sale of such a large tranche of shares has hung over the bank for a long time – still, the scrapping of the share offer would be unlikely to have a huge long-term impact on its share price. It seems inevitable, one way or the other, that NatWest will fully return to private hands. A delay to that process may impact the bank’s strategy to a degree, but only in terms of pushing its plans out rather than forcing a re-think altogether.”

Mr Thwaite has previously said that returning the bank to full private hands was a “shared ambition”, declaring that this would be “in the best interests of both the bank and all our shareholders”, while chairman Rick Haythornthwaite observed that it would bring an end to a “sorry tale” for the country and the lender.

It may well be that it takes longer than to realise that ambition than originally envisaged, but it seems clear that NatWest will get to that position sooner rather than later.

In the meantime, the focus will turn on Friday to the bank’s results for the second quarter. City analysts expect NatWest to report an operating pre-tax profit of £2.6 billion for the six months to June, more than £1bn lower than the £3.6bn recorded this time last year.

The fall in profits is anticipated as the benefit the major banks have been realising from the steady rise in interest rates between December 2021 and August 2023 in an attempt to combat surging inflation has passed its peak.