NatWest Upgrades 2026 Outlook as Wealth Acquisition Fuels Growth
The UK lender posted a 19.7% return on tangible equity in H1 and brought forward share buyback consideration by six months following strong operating momentum.
Strong Returns Drive Upgraded Guidance
NatWest Group plc raised its full-year return on tangible equity guidance to "more than 19%" and brought forward share buyback consideration by six months to year-end 2026 results, CEO Paul Thwaite announced during the bank's H1 2026 earnings call on July 31.
The UK lender delivered a return on tangible equity of 19.7% in the first half, which Thwaite described as "industry-leading" (earnings call, 2026-07-31). Earnings per share grew 23% to 38 pence, while the interim dividend increased 26% to 12 pence per share.
"Our strong capital generation has allowed us to invest in growth and acquire Evelyn Partners while still having surplus capital," Thwaite said (earnings call, 2026-07-31).
Evelyn Partners Transforms Wealth Business
The completed acquisition of Evelyn Partners marked a significant expansion of NatWest's wealth management capabilities, boosting assets under management and administration by more than 150% to £131 billion. The deal gives NatWest "the largest employed network of financial advisers across the U.K. and a highly regarded direct-to-consumer investment platform," according to Thwaite (earnings call, 2026-07-31).
One month into the integration, Evelyn Partners is "performing in line with expectations," with business referrals already flowing in both directions under a unified leadership team, Thwaite reported (earnings call, 2026-07-31).
Customer assets and liabilities grew 13.4% including Evelyn Partners, or 5.2% excluding the acquisition—well above the bank's target of more than 4% annual growth.
Operating Leverage Drives Efficiency
NatWest continued to improve its efficiency metrics, with income growth of 8.9% significantly outpacing cost growth of 4.5%. The cost-to-income ratio fell 2.8 percentage points to 46%, approaching the bank's 2028 target of below 45%.
CFO Katie Murray reported that second-quarter income excluding notable items increased 5.4% to £4.4 billion, while operating costs grew just 1.8% to £2.1 billion. Net interest margin expanded 2 basis points to 249 basis points, supported by deposit margin expansion (earnings call, 2026-07-31).
Noninterest income surged 15% or £124 million, driven by "strong customer activity in commercial and institutional, together with higher insurance fee income," Murray said (earnings call, 2026-07-31).
For the full year, the bank now expects income excluding notable items of around £17.9 billion, with Evelyn Partners contributing approximately £275 million in the second half.
Strategic Growth Initiatives
All three of NatWest's business divisions—Retail Banking, Private Banking and Wealth Management, and Commercial and Institutional—delivered returns of 20% or more. The bank is targeting growth in youth, family, and affluent customer segments, with its Rooster Money app customer base growing 18 times since 2021 (earnings call, 2026-07-31).
In climate and transition finance, NatWest delivered £23 billion in the first half, progressing toward its £200 billion 2030 target.
The bank maintained a CET1 ratio of 13.2% after the Evelyn Partners acquisition and generated 137 basis points of capital. MarginX data shows Norges Bank recently increased its position by 1,171,813 shares, while directors Gillian Whitehead and Roisin Donnelly made small purchases of 94 and 466 shares respectively.
NatWest is scheduled to report Q3 2026 results on October 30, 2026, according to MarginX data.
This article was generated by MarginX from the earnings call on 2026-07-31. It is not investment advice.