Britain is reportedly poised to abandon a landmark sale of shares in NatWest Group to the general public.

According to sources cited by Reuters, the decision came late on Wednesday, after prime minister Rishi Sunak called a general election for July.

NatWest's shares, which have risen more than 40 per cent this year to date, were trading 1.4 per cent lower on Thursday as investors awaited official confirmation that the proposed offer would be shelved until after the 4 July poll.

Chancellor Jeremy Hunt and UK Government Investments, the agency managing Britain's stake in NatWest, had planned the sale to kickstart efforts to promote wider retail ownership of UK stocks. However, the impending election – occurring sooner than anticipated – leaves the decision on offloading the taxpayer's remaining shares in NatWest to the next government, the sources told Reuters on Wednesday.

Analysts at Peel Hunt told the newswire that the sale could not proceed before an election, and that it was unclear whether the Labour Party, tipped to lead the next government, would continue with the initiative.

In March 2024, the UK government announced it was no longer a controlling shareholder in NatWest, having reduced its stake to below 30 per cent. Economic Secretary Bim Afolami confirmed the milestone, stating the government aimed to sell its remaining stock to the public as early as June, subject to market conditions.

Afolami said: "This is a significant milestone demonstrating we're making excellent progress on fully returning NatWest to private ownership." Reducing its stake below 30 per cent means the government is no longer classified as a controlling shareholder under UK listing rules, granting NatWest more freedom on director appointments.

NatWest, formerly RBS Group, was bailed out by the government during the 2008-09 financial crisis, with the then-Labour administration acquiring 84 per cent of the bank. NatWest welcomed the government's commitment to returning it to private ownership, stating, "We believe this is in the best interests of the bank and our shareholders."

---