TLDR
- NatWest reported a 24% rise in annual operating profit before tax to £7.71bn, beating estimates.
- Annual profit attributable to shareholders climbed 21% to £5.48bn.
- Net interest income rose nearly 14% to £12.82bn for the year.
- The bank proposed a 51% higher annual dividend of 32.5p per share.
- NatWest agreed to acquire Evelyn Partners for £2.7bn and launch a £750m share buyback.
NatWest Group plc (NWG) shares were trading at $15.94, down $0.39 or 2.42% in afternoon trading, even as the bank delivered a strong set of annual results that topped market expectations. Despite the intraday dip and a 9.41% year-to-date decline, the stock remains up 48.04% over the past year, significantly outperforming the FTSE 100’s 19.19% gain over the same period.
Strong Annual And Quarterly Performance
NatWest posted a 24% jump in operating profit before tax for the year, reaching £7.71bn. This surpassed consensus estimates of £7.49bn. In the fourth quarter alone, operating profit before tax came in at £1.94bn, ahead of expectations of £1.72bn.
Quarterly profit totaled £1.48bn, beating forecasts of £1.24bn. For the full year, profit rose 21% year-on-year to £5.83bn, exceeding estimates of £5.59bn.
Profit attributable to shareholders increased 21% to £5.48bn. Earnings per share climbed 27% to 68p, while return on tangible equity (RoTE) reached an impressive 19.2%. These figures highlight the bank’s continued operational strength and efficiency improvements.
Net Interest Income Drives Growth
Net interest income (NII), a key profitability metric for banks, rose nearly 14% for the year to £12.82bn, beating forecasts of £12.72bn. In the fourth quarter, NII stood at £3.44bn, ahead of the expected £3.33bn.
The strong NII performance contributed to total income of £4.32bn in the fourth quarter and £16.64bn for the year, both above expectations of £4.21bn and £16.53bn respectively. This income growth underpinned the surge in profits and reinforced the effectiveness of NatWest’s core lending and deposit strategy.
Chief Executive Paul Thwaite said the results demonstrate that the bank’s strategy is delivering consistent outcomes. He noted that the group is raising its ambition and sharpening its strategic focus with new targets in place.
2026 Guidance And Dividend Boost
Looking ahead, NatWest expects total income for 2026 to range between £17.2bn and £17.6bn. The bank also aims to deliver a RoTE of greater than 17% in 2026, signaling confidence in sustained profitability.
The board proposed a final dividend of 23p per share, bringing the total annual payout to 32.5p. This marks a 51% increase compared to 2024 levels. The higher dividend underscores the bank’s strong capital position and commitment to returning value to shareholders.
Strategic Acquisition And Share Buyback
At the start of the week, NatWest announced an agreement to acquire wealth manager Evelyn Partners for £2.7bn. The transaction represents the bank’s first major acquisition since the UK government sold its remaining stake last year.
Alongside the acquisition, NatWest revealed plans for a £750m share buyback program. The move signals management’s confidence in the bank’s financial strength and future prospects while enhancing shareholder returns.
Long-Term Share Performance
Although shares edged 0.5% lower in early Friday trading following the results, long-term performance remains robust. Over three years, NatWest has delivered a total return of 161.24%, far surpassing the FTSE 100’s 31.44%. Over five years, the stock has surged 343.34%, reflecting a remarkable turnaround from its historic challenges.
Richard Hunter, head of markets at Interactive Investor, described the results as a “sparkling set of numbers,” highlighting the bank’s continued recovery and disciplined execution.
With solid earnings growth, rising dividends, strategic expansion, and a clear 2026 outlook, NatWest appears well positioned to maintain momentum in the competitive UK banking sector.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
