NatWest 2025-26: 1M New Customers, Evelyn £69B AUMA, RoTE >17%
FY25 income £16.4B (+12%); op profit £7.7B (+24%); attributable profit £5.83B (+21%); EPS £2.70 (+27%). 1M new customers + lending +5.6% to £393B. AUM&A +20% to £58.5B. £600M cost savings; cost/income 45%. CET1 14%. Total distributions £4.1B FY25. FY26: income £17.2-17.6B; loan impairment <25bp; capital gen ~200bp; RoTE >17%. Evelyn Partners acquisition adds £69B AUMA + Day-1 fee income +20%.
Key takeaways
- RoTE >17% guide for FY26 — best-in-class UK banking. Cost/income ratio 45% (down 5pp); capital generation 252bp; CET1 14%. Operating leverage continues with £100M investment capacity unlocked.
- Evelyn Partners acquisition is the wealth pivot. £69B AUMA addition. Day-1 fee income +~20%. RoIC target above buyback yield by year 3. Transforms NWG from retail/commercial bank to bank+wealth platform.
- AUM&A +20% to £58.5B. Private Bank + Wealth Management cost/income improved 10pp to 64% — meaningful fee-income / capital-light expansion. 50K+ new clients.
- £393B lending portfolio compounding. Mortgage flow share to first-time-buyers from 10% → 12%; buy-to-let from 3% → 6%. Commercial lending +10% to £14B. Climate + transition finance £19B FY25 toward 2030 target.
- Total distributions £4.1B FY25. Buybacks £-2.56B + dividends £-2.38B vs FY24 distribution £-4.5B. Pace continued; CET1 14% provides additional capacity.
Business
NatWest Group is the UK's largest bank by domestic franchise — three reportable divisions:
- Retail Banking (~50% of operating profit). Mortgages + unsecured + savings + transactional. Customer base +5%. Cost/income 50% → 45% (-5pp). Mortgage first-time-buyer share 10% → 12%; BTL 3% → 6%. Sainsbury's Bank integration completed (added 1M accounts, £2.4B savings, £2.2B unsecured).
- Commercial & Institutional (~35%). Corporate + project finance + sustainable finance + FX. Lending +10% to £14B. £7.5B social housing target hit ahead of schedule; new £10B target. £19B climate + transition finance FY25 (toward 2030 target). FX expertise extended to 700 mid-market customers.
- Private Banking & Wealth Management (~15%). 50K+ new clients FY25. AUM&A +20% to £58.5B. Net new flows +41%. Cost/income 64% (-10pp YoY).
Strategic actions FY25:
- Evelyn Partners acquisition announced: +£69B AUMA, Day-1 fee +20%
- Sainsbury's Bank integration completed
- £600M gross cost savings (10x increase in pace)
- 200 business applications decommissioned
- Core banking platform rehosted
- OpenAI collaboration (Q1 disclosed)
- Government shareholding reduced to <2% (vs ~25% pre-2024)
FY25 financial performance
| Metric (FY) | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Total income (£B) | 16.15 | 24.76 | 28.57 | 29.48 |
| Net interest + non-interest income (£B) | 13.35 | 14.78 | 14.65 | 16.61 |
| Op profit (£B) | 5.13 | 6.18 | 6.20 | 7.71 |
| Attributable profit (£B) | 3.59 | 4.64 | 4.80 | 5.83 |
| Diluted EPS (£) | 1.36 | 1.96 | 2.12 | 2.70 |
| FCF (£B) | -44.24 | -18.99 | 0.69 | 5.79 |
| Total debt (£B) | 55.32 | 60.07 | 65.92 | 71.83 |
| Dividends (£B) | -3.21 | -1.70 | -1.80 | -2.38 |
| Buyback (£B) | -2.05 | -2.42 | -2.72 | -2.56 |
The earnings print is excellent: total income +12%, op profit +24%, EPS +27%. Cost/income 45% (vs 50% FY24). Capital generation 252bp + RoTE 17%.
Note: FCF for banks is largely a function of deposit + lending balance changes (not directly comparable to industrials). Income, op profit, and capital generation are the cleaner profitability signals.
Capital allocation
- Capex: Banks don't disclose meaningful capex; £-1.28B FY25 in financial statements relates to property/equipment.
- Dividends: £-2.38B FY25 (+32% YoY). Steady raise pattern.
- Buybacks: £-2.56B FY25 (vs £-2.72B FY24). Sustained pace.
- Total distributions: £4.1B FY25 = ~10% of market cap return.
- CET1 ratio: 14% (post-target).
- Government stake: Reduced to <2% — fully privatized for practical purposes.
FY26 outlook (per Q4 2025 call, 2026-02-14)
| FY26 framework | Detail |
|---|---|
| Income (excl notable items) | £17.2B to £17.6B |
| Loan impairment rate | < 25 basis points |
| Capital generation | ~200 basis points |
| RoTE | > 17% |
| Evelyn Partners contribution | +£69B AUMA, +20% fee income Day-1 |
Implied FY26 income +5-7% on top of FY25 +12%. RoTE >17% sustained = consistent best-in-class UK bank profitability. Evelyn integration is the structural wealth + fee-income lever for FY26-28.
Key risks
- Interest rate cycle. BoE has cut rates through FY25; further cuts expected. NIM compression risk if rate cuts faster than deposit re-pricing.
- Evelyn integration. Acquisition adds £69B AUMA but integration timing + RoIC vs buyback yield by year 3 is execution-dependent.
- Mortgage market dynamics. UK housing affordability + rate path drives mortgage flow share; first-time-buyer 12% target supports growth but cyclical.
- Regulatory capital. UK Prudential Regulation Authority reviews + ring-fencing changes can affect capital requirements.
- Macroeconomic UK environment. Lending growth + impairment dependent on UK GDP / employment / inflation trajectory.
- Tech transformation. £600M cost savings + 200 application decommissioning = execution-heavy; integration of OpenAI collaboration unclear quantification.
Bottom line
NWG FY25 is the year UK banking found its post-2008 footing: 1M new customers, lending +5.6%, deposits +2.4%, AUM&A +20%, cost/income to 45%, RoTE >17% guide, Evelyn Partners acquisition transforming the wealth platform. Total distributions £4.1B at ~10% of market cap. FY26 income guide £17.2-17.6B with RoTE >17% suggests structural compounding. Risks are rate cycle + integration + UK macro. Quality UK banking compounder with the wealth + fee-income optionality.
Citations
- NatWest Group plc FY25 Annual Report (filed February 2026, UK FCA + SEC EDGAR for ADR).
- NWG Q4 2025 results, 2026-02-14 — total income £16.4B (+12%); 1M new customers; cost/income 45%; CET1 14%; total distributions £4.1B; Evelyn Partners acquisition £69B AUMA + Day-1 fee +20%; FY26 guide (income £17.2-17.6B, impairment <25bp, RoTE >17%).
- NWG Q3 2025 results, 2025-10-24 — 9M income £12.1B (+12.5%); op profit £5.8B; lending +£14B+ across segments; capital gen 202bp; CET1 14.2%; FY guide raised RoTE >18%.
- NWG H1 2025 results, 2025-07-25 — 100K+ new customers organic; Sainsbury's adds 1M; £200B sustainable finance target by 2030 (vs prior £100B by 2025 hit); RoTE >16.5% guide raised.
- NWG Q1 2025 results, 2025-05-02 — government shareholding to <2%; OpenAI collaboration; income guide upper end £15.2-15.7B; RoTE 18.5% Q1.
- Internal financial_statements view (consolidated annual + cash flow + capital structure).