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1. Company Snapshot

1.a. Company Description

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally.It operates through Retail Banking, Commercial Banking, Private Banking, RBS International, and NatWest Markets segments.The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services.


The Commercial Banking segment offers banking and financing solutions to start-up, SME, commercial, corporate, and institutional customers.The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests.The RBS International segment offers banking various products and services to institutional customers.


It also operates in wholesale branches and fund depositary service businesses.The NatWest Markets segment provides services to corporate and institutional customers for the management of financial risks for achieving short-term and long-term sustainable financial goals.NatWest Group plc operates approximately 800 branches and 16,000 physical points of presence.


The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020.NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.

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1.b. Last Insights on NWG

NatWest Group's recent performance was driven by robust financial results, with a 12.5% income increase and strategic growth across lending sectors. The company's Q3 earnings report showed net income of $2.15 billion, with revenue of $10.18 billion. Analysts have raised their consensus price target to £6.05, reflecting growing optimism. Strong customer activity boosted results, leading to a guidance increase for the second time this year. A potential share buyback may be on the horizon, hinting at bigger rewards for shareholders. (Source: Bloomberg)

1.c. Company Highlights

2. NatWest Group's Q3 2025 Earnings: A Strong Performance

NatWest Group reported a robust Q3 2025 performance, with income growing 12.5% to GBP 12.1 billion and operating profit of GBP 5.8 billion. The bank's earnings per share (EPS) came in at 0.1563, beating analyst estimates of 0.1372. Net interest income grew 3% to GBP 3.3 billion, driven by disciplined growth and effective balance sheet management. The bank's net interest margin (NIM) was not explicitly stated, but the strong income growth suggests a stable NIM.

Publication Date: Oct -25

📋 Highlights
  • Income & Profit Growth:: Q3 2025 income rose 12.5% to GBP 12.1B, with operating profit at GBP 5.8B, driven by disciplined growth strategies.
  • Customer & Lending Momentum:: Attracted 70,000 new customers; mortgage lending surged GBP 5B, unsecured lending up 17.3% (GBP 2.9B) in Q3.
  • CET1 Ratio & Capital Return:: CET1 ratio reached 14.2% (up 60bps QoQ); GBP 750M share buyback on track for full-year completion.
  • Cost Efficiency:: Cost-income ratio improved to over 9%; full-year guidance for return on tangible equity above 18% maintained.
  • Capital & Risk Management:: Deferred tax asset utilization expected to drop to GBP 100–150M/year post-2025, with GBP 800M used in Q4 2025.

Business Performance

The bank attracted 70,000 new customers in the quarter and saw mortgage lending grow by more than GBP 5 billion. Lending grew 4.4% to GBP 388 billion, with unsecured lending up 17.3%. The commercial and institutional business delivered lending growth of GBP 7.9 billion or 5.5% across large corporate and institutional, and commercial mid-market businesses. Deposits were broadly stable at GBP 435 billion.

Capital Management

The bank generated 202 basis points of capital in the first 9 months, with a CET1 ratio of 14.2%. The bank expects to complete a GBP 750 million share buyback by the full year results. According to Katie Murray, the bank is managing for a CET1 ratio of 13% to 14% in the fourth quarter. The bank's strong capital position and commitment to returning capital to shareholders are positives.

Valuation

NatWest Group's Price-to-Tangible Book Value (P/TBV) ratio is approximately 1.1, indicating a relatively reasonable valuation. The bank's Dividend Yield is 4.37%, which is attractive for income investors. With analysts estimating revenue growth of 6.5% next year, the stock appears to be undervalued. As CEO Paul Thwaite stated, "We're pleased with the Q3 performance and the continuing momentum in our businesses." The bank's strong financial performance, combined with its attractive valuation, makes it an interesting investment opportunity.

Outlook

NatWest expects full-year total income, excluding notable items, to be around GBP 16.3 billion and return on tangible equity to be greater than 18%. The bank's guidance suggests continued momentum in its businesses, driven by its simplification agenda and capital management. With a strong track record of growth and a commitment to returning capital to shareholders, NatWest Group appears well-positioned for future success.

3. NewsRoom

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BOE Stress Test 2025: Have BCS, HSBC & Others Proved Resilience?

Dec -03

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Barclays Shares Surge 68.4% YTD: How to Play the Stock Now

Nov -28

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UK mid-caps outperform in calm post-Budget trade

Nov -27

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Why Analysts See NatWest’s Story Shifting With Upgraded Price Targets and Cautious Optimism

Nov -25

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U.K. Bank Stock, China Hotelier Top This Global Leaders List

Nov -18

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NatWest Group Digital Transformation Strategy Analysis Report 2025: Accelerators, Incubators, and Other Innovation Programs

Nov -14

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NatWest (NWG) Shares Highly Optimistic Post-Q3 2025 Consensus Estimates

Nov -14

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Non-U.S. Bank Stocks Set A Blistering Industry Pace. Here's The Outlook.

Nov -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.80%)

6. Segments

Commercial & Institutional

Expected Growth: 4.5%

NatWest Group’s Commercial & Institutional business is expected to grow driven by increasing adoption of digital banking services, growing demand for payment and cash management solutions, and expanding presence in key markets.

Retail Banking

Expected Growth: 5.4%

NatWest's strong brand presence, diversified product offerings, and increasing adoption of digital channels drive growth in the retail banking segment.

Private Banking

Expected Growth: 3.5%

NatWest Group’s personalized banking services drive growth, with increasing demand for digital banking solutions and strategic partnerships fueling expansion.

Central Items & Other

Expected Growth: 7.4%

NatWest Group plc's central items and other financial data indicate a strong performance, driven by a diversified business mix, stable net interest margin, and efficient cost management.

7. Detailed Products

Personal Banking

Personal banking services for individual customers, including current accounts, savings accounts, credit cards, loans, and mortgages.

Business Banking

Business banking services for small to medium-sized enterprises, including business current accounts, loans, and credit cards.

Commercial Banking

Commercial banking services for large corporations, including cash management, trade finance, and risk management solutions.

Markets and International Banking

Markets and international banking services, including foreign exchange, commodities, and debt capital markets.

Private Banking

Private banking services for high net worth individuals, including investment management, wealth planning, and lending.

RBS International

International banking services for offshore customers, including deposit accounts, lending, and investment products.

8. NatWest Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

NatWest Group plc operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand presence and wide range of financial services mitigate the threat of substitutes.

Bargaining Power Of Customers

NatWest Group plc's customers have significant bargaining power due to the availability of alternative financial institutions and online banking services. This forces the company to maintain competitive pricing and high-quality services.

Bargaining Power Of Suppliers

NatWest Group plc has a strong bargaining position with its suppliers, given its large scale of operations and significant market share. This enables the company to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the significant barriers to entry in the banking industry, including regulatory hurdles, high capital requirements, and the need for a large customer base.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. NatWest Group plc faces intense rivalry from other major banks, which drives innovation and competitive pricing.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 79.20%
Debt Cost 3.95%
Equity Weight 20.80%
Equity Cost 10.49%
WACC 5.31%
Leverage 380.82%

11. Quality Control: NatWest Group plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HSBC

A-Score: 8.0/10

Value: 7.7

Growth: 7.3

Quality: 6.3

Yield: 8.8

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
BBVA

A-Score: 7.8/10

Value: 7.1

Growth: 9.2

Quality: 7.0

Yield: 8.1

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
NatWest

A-Score: 7.3/10

Value: 8.0

Growth: 5.6

Quality: 6.8

Yield: 8.1

Momentum: 9.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
ING

A-Score: 7.2/10

Value: 6.4

Growth: 5.7

Quality: 5.0

Yield: 9.4

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Barclays

A-Score: 7.1/10

Value: 9.0

Growth: 7.2

Quality: 5.8

Yield: 5.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
UBS

A-Score: 5.2/10

Value: 4.2

Growth: 4.0

Quality: 3.9

Yield: 5.6

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.3$

Current Price

6.3$

Potential

-0.00%

Expected Cash-Flows