NatWest Q1 2026 results show a strong start with higher guidance
NatWest has opened 2026 in good shape. The headline numbers are solid, the balance sheet looks strong, and crucially management has nudged full-year income expectations higher.
The standout line is this: NatWest now expects income excluding notable items to land at the top end of its previously guided £17.2 billion to £17.6 billion range. For a big UK bank, raising guidance this early in the year matters. It tells investors that trading in the first quarter was good enough to give management more confidence, even with the economic backdrop still looking choppy.
NatWest Q1 2026 key numbers retail investors should know
| Metric | Q1 2026 | Why it matters |
|---|---|---|
| Total income excluding notable items | £4.2 billion | The cleaner view of underlying income |
| Operating profit before tax | £2.0 billion | Shows strong profitability |
| Profit attributable to ordinary shareholders | £1.4 billion | Up 15.5% versus Q1 2025 |
| Earnings per share | 17.9p | Up from 17.4p in Q4 2025 |
| Return on Tangible Equity | 18.2% | A very healthy level for a bank |
| CET1 ratio | 14.3% | Core capital strength remains robust |
| TNAV per share | 400p | Tangible net asset value per share increased by 16p |
| Loan:deposit ratio | 89% | Still conservative for funding |
Why the NatWest guidance upgrade matters more than the quarterly beat
Quarterly beats are nice. Guidance upgrades are better. NatWest is not just saying Q1 was good – it is saying the rest of 2026 now looks likely to be good enough to hit the top end of its income target range.
That is a positive signal because banks live and die by confidence in future income, not just what dropped into the tills over the last three months. The bank also reaffirmed the rest of the outlook given in February, which suggests no nasty surprise is lurking elsewhere in the model.
One important caveat: the 2026 guidance excludes the expected impact of the forthcoming Evelyn Partners acquisition. So investors should treat this as a clean read on the existing business.
NatWest lending growth, deposits and margin trends all point the right way
The engine room here is customer activity. Net loans to customers excluding central items rose by £7.2 billion in the quarter to £396.4 billion, while customer deposits excluding central items increased by £3.1 billion to £444.8 billion.
That matters because it shows NatWest is growing both sides of the banking relationship. Loans generate income, deposits provide funding, and together they usually tell you whether a bank is genuinely winning business or just flattering the numbers with accounting noise.
Retail Banking added £3.3 billion of mortgage balances. Commercial & Institutional added £3.8 billion of lending, with customer deposits in that division up £5.1 billion. That is a decent mix – households on one side, businesses on the other.
Net interest margin, or NIM – the spread between what a bank earns on lending and pays on funding – improved to 2.47% from 2.45% in Q4 2025. That is not explosive, but it is moving in the right direction.
NatWest cost savings and AI productivity gave profits an extra lift
One of the better parts of this update is cost discipline. NatWest said it generated over £100 million of additional cost savings in Q1, and its cost:income ratio excluding litigation and conduct improved to 46.5%.
For retail investors, the cost:income ratio is simply how much the bank spends to generate its revenue. Lower is better. A ratio in the mid-40s, while still investing in technology and restructuring, is a strong outcome.
Management is clearly leaning hard into simplification and AI. Banks often love to talk about AI, but the useful bit here is that NatWest is linking it to real-world outcomes like faster onboarding, better digital journeys and lower costs. That is the right kind of AI story – practical, not decorative.
NatWest capital strength remains a big comfort for shareholders
The Common Equity Tier 1 ratio, or CET1 – a key measure of a bank’s core capital buffer – rose to 14.3% from 14.0% at the end of 2025. That leaves NatWest with 4.0% headroom above its 10.3% MDA threshold, the level below which payout restrictions can kick in.
In plain English, NatWest still has plenty of capital breathing room. It also generated 65 basis points of capital pre-distributions in the quarter and delivered £2.2 billion of benefits from risk-weighted asset management actions.
There is also a shareholder return angle. Since 31 March 2026, NatWest has repurchased and cancelled a further 10.70 million shares for £63.53 million. That is not the main reason to own the stock, but it helps underpin per-share value over time.
The weak spot in NatWest Q1 2026 results: impairments jumped
This was not a perfect update. Impairment losses came in at £283 million, up sharply from £136 million in Q4 2025. The loan impairment rate rose to 26 basis points from 13 basis points.
That looks ugly at first glance, but the detail matters. NatWest said this included a c.£140 million multiple economic scenario update, reflecting a weaker growth outlook, higher energy prices following the Middle East conflict, and a higher weighting for the extreme downside scenario.
So this is not just customers suddenly falling apart. It is also the bank being more cautious in its provisioning. There was also higher unsecured Stage 3 pressure in Retail Banking, linked largely to seasoning from strategic credit card growth in recent years. That is worth watching, but it does not yet look like a full-blown credit quality problem.
Economic uncertainty is real, but NatWest looks prepared for it
NatWest’s base case now assumes 2026 economic growth of 0.4%, inflation peaking above 3.5% and unemployment peaking at 5.7%. That is not disastrous, but it is softer than before.
The bank’s expected credit loss provision rose to £3.7 billion, with post model adjustments of £262 million. Those are management overlays added where the models may not capture all the risk. Again, that points to prudence rather than complacency.
Stress testing shows the risk if things get much worse. Under a 100% extreme downside scenario, total Stage 1 and Stage 2 expected credit losses would be simulated to rise by £1.7 billion. That is exactly why capital strength matters so much here.
Which NatWest divisions performed best in Q1 2026?
- Retail Banking delivered operating profit of £781 million with return on equity of 24.6%.
- Private Banking & Wealth Management delivered operating profit of £94 million and return on equity of 21.1%, though AUMA fell to £56.7 billion because of negative market moves.
- Commercial & Institutional remained the biggest profit contributor with operating profit of £1.0 billion and return on equity of 18.3%.
That spread is encouraging. NatWest is not relying on one hot desk or one lucky division. The group is getting support from retail mortgages, business banking and corporate activity.
What NatWest shareholders should take away from this RNS
My read is straightforward: this is a good update. Income is holding up, costs are under control, lending is growing, capital is strengthening and guidance has been raised. That is a strong combination.
The main negative is the rise in impairments and the more cautious economic outlook. But NatWest appears to be leaning into that risk early rather than pretending it is not there. For a bank, that is exactly what you want to see.
If you own the shares, this RNS should be reassuring. If you are watching from the sidelines, the big question now is whether NatWest can keep this momentum going as the year unfolds. On the evidence from Q1, it has started 2026 with more than enough pace.
