NatWest Group Plc: H1 2026 Interim Results Summary
Business Context and Reporting Period
This Form 6-K filing reports the unaudited interim results for NatWest Group Plc for the half-year ended 30 June 2026. The period was marked by the completion of the acquisition of Evelyn Partners on 30 June 2026, a UK-based wealth management firm, for a total consideration of £2.2 billion. The Group reported strong financial performance, driven by growth across all three customer businesses (Retail Banking, Private Banking & Wealth Management, and Commercial & Institutional) and improved efficiency.
Key Financial Metrics
| Metric | H1 2026 | H1 2025 | Variance |
|---|---|---|---|
| Total Income | £8,862m | £7,985m | +11.0% |
| Operating Profit | £4,318m | £3,585m | +20.4% |
| Profit for the Period | £3,180m | £2,675m | +18.9% |
| Profit Attributable to Ordinary Shareholders | £3,035m | £2,488m | +22.0% |
| Earnings Per Share (Basic) | 38.1p | 30.9p | +23.3% |
| Return on Tangible Equity (RoTE) | 19.7% | 18.1% | +1.6pp |
| Cost:Income Ratio (excl. litigation/conduct) | 46.0% | 48.8% | -2.8pp |
| Loan Impairment Rate | 19bps | 19bps | 0bps |
| Common Equity Tier 1 (CET1) Ratio | 13.2% | 14.0% | -80bps |
| Customer Assets & Liabilities (CAL) | £986.9bn | £870.0bn | +13.4% |
Material Changes vs. Prior Period
- Acquisition Impact: The acquisition of Evelyn Partners contributed £71.7 billion to Customer Assets and Liabilities (CAL) and significantly increased Assets Under Management and Administration (AUMA) to £130.6 billion. The CET1 ratio decreased by approximately 140 basis points due to the acquisition's day-one impact.
- Income Growth: Total income rose 11.0% year-on-year, driven by lending balance growth, deposit margin expansion, and higher non-interest income. Net interest margin (NIM) improved to 2.48% (up 20bps).
- Cost Efficiency: The cost:income ratio improved by 3.8 percentage points to 46.5% (46.0% excluding litigation and conduct costs), reflecting structural simplification and technology investments.
- Impairment: Impairment losses increased to £423m (from £382m) due to higher Stage 3 charges in the unsecured portfolio and increased post-model adjustments for economic uncertainty related to the Middle East conflict.
- Capital Generation: Capital generation pre-distributions was 137 basis points, excluding the impact of the Evelyn Partners acquisition.
Guidance, Outlook, and Risks
2026 Full Year Guidance (Updated):
- Total Income (excl. notable items): Around £17.9 billion.
- Operating Expenses (excl. litigation/conduct): Around £8.5 billion.
- Loan Impairment Rate: Below 25 basis points.
- RoTE: Greater than 19%.
- Capital Generation: Greater than 240 basis points pre-distributions (excluding Evelyn Partners impact).
2028 Strategic Targets:
- CAL Growth: Compound annual growth rate greater than 4%.
- Cost:Income Ratio: Below 45% (excl. litigation/conduct).
- RoTE: Greater than 18%.
Capital and Dividends: The Group announced an interim dividend of 12.0p per share (£955 million). Share buybacks are expected to be considered from the full year 2026 results, six months earlier than previously planned. The CET1 ratio target remains around 13.0%.
Key Risks:
- Economic Uncertainty: Risks related to inflation, interest rates, and geopolitical developments (specifically the Middle East conflict) impacting economic forecasts and credit quality.
- Regulatory and Legal: Ongoing litigation regarding LIBOR, FX, and swaps, as well as regulatory investigations into investment advice and tracker mortgages.
- Climate and Sustainability: Execution risks related to climate transition targets and data limitations.
Investor Verification Checklist
- Evelyn Partners Integration: Verify the integration progress and the realization of revenue synergies from the £2.2 billion acquisition.
- Cost:Income Ratio Sustainability: Assess whether the 46.0% ratio (excl. litigation) is sustainable given ongoing technology investments and inflationary pressures on staff costs.
- Credit Quality Trends: Monitor the loan impairment rate and Stage 3 flows, particularly in the unsecured personal portfolio and commercial real estate sectors, amidst economic uncertainty.
- Capital Management: Confirm the impact of the Basel 3.1 implementation (expected to increase RWAs by ~£10 billion in 2027) on future capital generation and dividend capacity.
- Legal Provisions: Review the adequacy of provisions for ongoing litigation (LIBOR, FX, Swaps) and regulatory redress schemes.