NatWest 2025 Results: Big profits, bigger payouts, and momentum into 2026
NatWest Group has delivered a standout 2025, combining double-digit income growth with tighter costs and a chunky dividend uplift. The bank’s Return on Tangible Equity (RoTE) hit 19.2% – a key profitability metric that measures profit on shareholders’ tangible equity – while total dividends jumped 51% year-on-year.
Management has also laid out confident guidance for 2026 and beyond, backed by balance sheet strength, rising net interest margin, and expanding customer assets. Here’s what matters for investors.
Key numbers at a glance
| Metric | 2025 |
|---|---|
| Total income (excl. notable items) | £16.4 billion |
| Total income (reported) | £16.641 billion |
| Attributable profit | £5,479 million |
| RoTE | 19.2% |
| Basic EPS | 68.0 pence |
| Total dividend for the year | 32.5 pence (final 23.0 pence) |
| Planned buyback (H1 2026) | £750 million |
| Net interest margin (NIM) | 2.34% (Q4: 2.45%) |
| Loan impairment charge / rate | £671 million / 16 bps |
| CET1 capital ratio | 14.0% (target ~13.0%) |
| Liquidity Coverage Ratio (LCR) | 147% |
| Customer deposits | £443.0 billion |
| Loans to customers (amortised cost) | £418.9 billion |
| Assets under management & administration (AUMA) | £58.5 billion |
| TNAV per share | 384 pence |
Income strength, margin tailwinds and cost control
Total income excluding notable items rose to £16.4 billion, up £1.8 billion year-on-year, driven by deposit margin expansion (helped by strong structural hedge income), lending growth and higher FX trading revenue. Net interest margin improved to 2.34%, with Q4 stepping up to 2.45%.
Management expects total structural hedge income to increase by around £1.5 billion in 2026 and by a further £1 billion in 2027. That is a material tailwind for NIM and earnings, if delivered.
On costs, the bank kept a “stable cost base” while simplifying and digitising. Other operating expenses rose 3.1% to £8,095 million, but the cost:income ratio (excluding litigation and conduct) improved to 48.6% from 53.4%. That’s solid operational gearing.
Balance sheet momentum and disciplined risk
NatWest added around one million customers in 2025 and grew both loans and deposits across its businesses. Net loans to customers excluding central items increased by £20.7 billion, including £5.1 billion of Retail mortgages and £12.3 billion in Commercial & Institutional. Customer deposits excluding central items rose by £10.4 billion to £441.7 billion.
Credit costs rose, but from a low base. The loan impairment charge was £671 million (16 bps), up from £359 million last year, reflecting charges linked to the Sainsbury’s Bank acquisition and higher unsecured lending growth. The Expected Credit Loss (ECL) coverage ratio was stable at 0.83%, and post-model adjustments reduced versus 2024, with Retail cost-of-living overlays still in place.
Liquidity and capital remain robust: the average LCR was 147% and the CET1 ratio rose to 14.0%. Tangible net asset value per share increased to 384 pence.
Segment highlights: where growth showed up
Retail Banking: higher margins, more mortgages
- Total income £6,495 million, up 15.0%.
- Operating profit £3,121 million; return on equity 24.7%.
- NIM 2.63%; deposits up to £202.6 billion; loans £216.1 billion.
- Impairments £437 million, reflecting Sainsbury’s portfolios and growth in unsecured lending.
Retail delivered healthy margin expansion and deposit growth, with c.30% of gross mortgage lending supporting first-time buyers. The acquisition of Sainsbury’s Bank balances added scale in cards and personal advances, and new propositions like the Family-Backed Mortgage are resonating.
Private Banking & Wealth Management: fee engines spinning up
- Total income £1,131 million, up 16.7%.
- Operating profit £394 million; return on equity 21.7%.
- AUMA £58.5 billion, up £9.6 billion, with strong net flows and positive markets.
Higher AUMA and deposit margins lifted income. With the announced acquisition of Evelyn Partners (enterprise value £2.7 billion; approximately £69 billion AUMA) expected to complete in summer 2026, NatWest is positioning for a step-change in wealth – note this transaction is excluded from 2026 guidance.
Commercial & Institutional: broader growth, resilient returns
- Total income £8,809 million, up 10.7%.
- Operating profit £4,064 million; return on equity 19.1%.
- Loans £154.2 billion, up 8.7%; deposits £196.4 billion.
Income growth came from deposit margin expansion, stronger FX revenues and lending. Impairments increased to £225 million due to lower model releases, while Stage 3 charges remained broadly stable. Relationship-led growth in housing, asset finance, infrastructure and project finance stood out in Q4.
Capital returns and guidance: bigger cheques, clear targets
The board proposes a final dividend of 23.0 pence per share, taking the total dividend to 32.5 pence for 2025, up 51% on last year. NatWest also intends to start a £750 million buyback in H1 2026, with total distributions deducted from capital in the year at £4.1 billion.
Looking ahead to 2026 (excluding Evelyn Partners):
- Total income excluding notable items £17.2-17.6 billion.
- Operating expenses (excl. litigation and conduct) around £8.2 billion.
- Loan impairment rate below 25 bps.
- RoTE greater than 17%.
- Capital generation pre-distributions around 200 bps.
For 2028, management targets CAL growth above 4% CAGR from end-2025, a sub-45% cost:income ratio (excl. litigation and conduct), RoTE greater than 18% and capital generation pre-distributions above 200 bps. The CET1 target is now “around 13.0%”, with Basel 3.1 expected to add around £10 billion to RWAs on 1 January 2027.
Strategy and simplification: why it matters
NatWest is clearly leaning into its advantage: a large, low-cost deposit base enhanced by structural hedging. Simplification and AI-driven efficiency are showing up in the cost:income ratio and service metrics. The bank also completed major integrations (around one million Sainsbury’s Bank customers and a £2.3 billion Metro Bank mortgage portfolio), strengthening franchise breadth.
The pivot to wealth is sensible: AUMA growth diversifies income away from pure rate sensitivity, and the Evelyn Partners deal should deepen advice, planning and investment capabilities across the customer base.
Risks and watchpoints
- Impairments rose to £671 million and could normalise higher if the macro turns. The bank guides to a sub-25 bps loss rate for 2026.
- Basel 3.1 adds around £10 billion to RWAs in 2027, and the CET1 target is reduced to around 13%. Capital generation is strong, but distributions must balance growth, regulation and buybacks.
- Operating expenses edged up 3.1%; continued efficiency will be key to hitting the sub-45% cost:income ambition by 2028.
My take: a high-return, cash-generative story getting sharper
This is an impressively broad-based set of results: higher margins, bigger balance sheet, strong fee momentum in wealth, and disciplined costs. A RoTE of 19.2% with a 147% LCR and 14.0% CET1 gives room for attractive payouts – and the 32.5 pence total dividend, plus the planned £750 million buyback, underlines that.
There are the usual macro and regulatory moving parts, and impairments have normalised upwards, but guidance remains confident. Add the structural hedge tailwind and the wealth build-out, and NatWest looks well set to keep compounding earnings while returning substantial capital.
