- Shareholder Distributions: £4.1 billion allocated to shareholders (buybacks: £1.5B, dividends: £2.6B) in 2025.
- Profitability Growth: Operating profit reached £7.7 billion, with earnings per share rising 27% to 68p.
- Customer Asset Expansion: Customer assets and liabilities grew 4% to £421 billion in Retail Banking and 10% to £119 billion in Private Banking.
- Capital Efficiency: Cost-income ratio improved to 48.6%, gross cost savings of £600 million achieved, and CET1 ratio at 14%.
- Wealth Management Growth: Evelyn Partners acquisition added £69 billion AUMA, boosting fee income by 20%, with AUM/AUMA growth of 20% to £58.5 billion.
Strategic Priorities and Progress
The bank made significant progress on its strategic priorities in 2025, including disciplined growth, bank-wide simplification, and managing capital and risk. NatWest added 1 million new customers during the year, with customer assets and liabilities growing 4% to £421 billion in Retail Banking and 10% to £119 billion in Private Banking and Wealth Management. The bank achieved gross cost savings of around £600 million, reducing its cost-income ratio to 48.6%. The bank's capital generation was strong, with 252 basis points of capital generated during the year, resulting in a CET1 ratio of 14%.
2026 Guidance and Future Outlook
For 2026, NatWest expects income, excluding notable items, to be within a range of £17.2 billion to £17.7 billion, representing 5-7% top-line growth. The bank anticipates a loan impairment rate below 25 basis points and other operating expenses of around £8.2 billion. The acquisition of Evelyn Partners is expected to bring significant benefits, including a 20% increase in fee income on Day 1 and a higher return on invested capital. The bank targets a return on tangible equity greater than 17% in 2026 and greater than 18% in 2028.
Valuation and Dividend Yield
Considering the bank's current valuation metrics, the Price-to-Tangible Book Value (P/TBV) ratio is approximately 1.16, indicating a reasonable valuation. The Dividend Yield is 4.07%, providing an attractive return for income-seeking investors. With the bank's strong capital generation and commitment to returning surplus capital to shareholders, the dividend yield is likely to remain an important component of the total return.
Growth Strategy and AI-Driven Initiatives
NatWest's growth strategy focuses on scaling its customer base, with a strong emphasis on digital transformation and AI-driven initiatives. The bank has established an AI research office to improve customer experience and efficiency, with plans to launch voice-to-voice conversations and more agentic fraud support. The acquisition of Evelyn Partners is expected to drive growth in the wealth management business, with opportunities to cross-sell banking products and services to Evelyn's clients.