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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 has been impacted by several factors. The company's planned acquisition of Evelyn Partners for £2.7 billion, aimed at creating the UK's leading private bank and wealth manager, has drawn attention. This deal, which more than doubles NatWest's assets under management and administration to £127 billion, represents a significant expansion. However, Goldman Sachs downgraded NatWest Group to Neutral from Buy, citing a revised stance on European banks. Additionally, the company's potential transfer of UK pension assets to insurers, amid improved funding levels, may also influence its short-term performance.

1.c. Company Highlights

2. NatWest Group's Strong 2025 Performance and Future Growth Prospects

NatWest Group reported a robust financial performance in 2025, with total income growing 12% to £16.4 billion and operating profit reaching £7.7 billion. The bank's attributable profit was £5.5 billion, with earnings per share (EPS) increasing 27% to 68p. The dividend per share was also significantly higher, growing 51% to 32.5p. The actual EPS for the year was 0.1717, beating analyst estimates of 0.1352. The bank's return on tangible equity (RoTE) was 19%, demonstrating its ability to generate strong returns for shareholders.

Publication Date: Feb -18

📋 Highlights
  • 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.

3. NewsRoom

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Has NatWest Group (LSE:NWG) Pullback Created A Valuation Opportunity For Investors?

Mar -07

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NatWest Names Adeel Hyder To Lead Business Banking And SME Focus

Mar -07

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BNP Paribas Upgrades NatWest Group plc (NWG) to Neutral From Underperform

Mar -02

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NWG vs. SMFG: Which Stock Is the Better Value Option?

Mar -02

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Assessing NatWest Group (LSE:NWG) Valuation After Mixed Recent Share Performance

Mar -02

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NatWest Group plc (NWG) Hires Ruari Phillips as Head of Venture & Growth Finance

Mar -01

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NatWest Group (NWG) Achieves Strong 2025 Performance and Record 19.2% Return on Tangible Equity

Feb -27

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Citi Raises its Price Target on NatWest Group plc (NWG) to 840 GBp and Maintains a Buy Rating

Feb -25

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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: 7.6/10

Value: 5.7

Growth: 7.3

Quality: 6.2

Yield: 8.8

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
BBVA

A-Score: 7.4/10

Value: 6.4

Growth: 9.2

Quality: 5.9

Yield: 7.5

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
ING

A-Score: 6.9/10

Value: 4.8

Growth: 5.7

Quality: 4.8

Yield: 9.4

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
NatWest

A-Score: 6.8/10

Value: 6.4

Growth: 5.6

Quality: 6.5

Yield: 7.5

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Barclays

A-Score: 6.6/10

Value: 7.2

Growth: 7.2

Quality: 5.6

Yield: 5.0

Momentum: 9.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
UBS

A-Score: 4.8/10

Value: 3.2

Growth: 4.0

Quality: 4.0

Yield: 5.0

Momentum: 6.0

Volatility: 6.7

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

5.65$

Current Price

5.65$

Potential

-0.00%

Expected Cash-Flows