NatWest raises return outlook as H1 profitability and capital strengthen

Transcript intelligence

What changed

Compared with the prior analysis, Evelyn Partners is now completed rather than pending, adding GBP 71.7 billion to assets under management. The current analysis also reports stronger H1 profitability, 13.4% customer-asset growth, upgraded 2026 return guidance above 19%, and a return to the covered-bond market with a GBP 1 billion issuance.

Guidance delta

Current analysis says 2026 return guidance was upgraded to above 19%, alongside a planned dividend payout ratio of around 50% and continued share buybacks. The prior analysis had focused on full-year income guidance at the top of its stated range.

Key takeaways

• H1 return on tangible equity reached 21%, while cost-to-income improved to 45.5%.
• Customer assets and liabilities grew 13.4% year on year, supported by loan and deposit growth.
• The Evelyn Partners acquisition added GBP 71.7 billion to assets under management.
• Capital generation exceeded 240 basis points before distributions, and the CET1 ratio stood at 13.2%.
• Management highlighted a GBP 1 billion return to the covered-bond market and plans for further issuance.

Management priorities

• Deliver sustainable growth targets for 2028, including customer assets and liabilities growth above 4% and a cost-to-income ratio below 45%.
• Continue expanding wealth management following completion of the Evelyn Partners acquisition.
• Maintain diversified funding through covered bonds, AT1, Tier 2 and MREL issuance as needed.
• Continue share buybacks and maintain a dividend payout ratio of around 50%.
• Pursue selective acquisitions that add scale or capability.