NatWest Group Plc: Q1 2026 Interim Management Statement Summary
Business Context and Reporting Period
This Form 6-K filing summarizes the Q1 2026 Interim Management Statement for NatWest Group Plc, covering the three months ended 31 March 2026. The report details financial performance, capital adequacy, liquidity, and credit risk management. Management highlights strong delivery against strategic priorities, including the use of AI at scale, growth in customer assets and liabilities (CAL), and progress in climate and transition finance.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Variance |
|---|---|---|---|
| Total Income (excl. notable items) | £4.223 billion | £3.952 billion | +6.9% |
| Operating Profit (before tax) | £2.033 billion | £1.812 billion | +12.2% |
| Profit for the Period | £1.507 billion | £1.341 billion | +12.4% |
| Profit Attributable to Ordinary Shareholders | £1.432 billion | £1.252 billion | +14.4% |
| Earnings Per Share (Basic) | 17.9 pence | 15.5 pence | +15.5% |
| Return on Tangible Equity (RoTE) | 18.2% | 18.5% | -0.3% |
| Cost:Income Ratio (excl. litigation/conduct) | 46.5% | 48.6% | -2.1 ppts |
| Net Interest Margin (NIM) | 2.47% | 2.27% | +20 bps |
| Loan Impairment Rate | 26 bps | 19 bps | +7 bps |
| Common Equity Tier 1 (CET1) Ratio | 14.3% | 13.8% | +50 bps |
| Liquidity Coverage Ratio (LCR) (Average) | 144% | 151% | -7% |
| Tangible Net Asset Value (TNAV) per Share | 400 pence | 347 pence | +53 pence |
Material Changes vs. Prior Period
- Profit Growth: Attributable profit rose 14.4% year-over-year, driven by deposit margin expansion, lending balance growth, and improved cost efficiency.
- Balance Sheet Expansion: Net loans to customers (excl. central items) increased by £7.2 billion, and customer deposits (excl. central items) grew by £3.1 billion. CAL increased by 0.9% quarter-on-quarter.
- Impairment Charges: Impairment losses increased to £283 million (up from £136 million in Q1 2025), primarily due to updates in multiple economic scenarios (MES) reflecting geopolitical risks and weaker equity markets, alongside increased Stage 3 flows in credit cards.
- Cost Efficiency: The cost:income ratio improved by 2.1 percentage points to 46.5%, aided by restructuring savings and productivity gains from AI deployment.
- Assets Under Management: AUMA decreased by £1.8 billion due to negative market movements, though net inflows remained strong at £0.9 billion.
Guidance, Outlook, and Risks
- Guidance Update: Management has strengthened guidance for total income excluding notable items, now expecting it to be at the top end of the previously guided range of £17.2 - £17.6 billion for the full year. All other full-year 2025 targets are reaffirmed.
- Economic Outlook: The base case economic outlook has been adjusted to reflect rising energy prices and geopolitical tensions (Middle East conflict). Inflation is expected to peak above 3.5%, with economic growth slowing to 0.4% and unemployment peaking at 5.7%.
- Capital Generation: The bank generated 65 basis points of capital pre-distributions in the quarter, supported by profit and RWA management actions (£2.2 billion benefit).
- Risks and Contingencies:
- Legal/Regulatory: Ongoing US antitrust litigation regarding interest rate swaps; a motion for summary judgment was filed in March 2026. A monitorship regarding historical spoofing conduct was paused in May 2025 but obligations extend to December 2026.
- Acquisition: Guidance excludes the expected impact of the forthcoming Evelyn Partners acquisition.
- Climate Risk: The extreme downside economic scenario has been updated to incorporate physical and transition climate risks.
Investor Verification Checklist
- Impairment Sensitivity: Verify the impact of the updated multiple economic scenarios (MES) on future provisioning, particularly the £140 million charge in Q1 and the increased weighting of the extreme downside scenario.
- Cost Trajectory: Confirm the sustainability of the 46.5% cost:income ratio given increased investment in AI and transformational activities.
- Deposit Stability: Monitor the loan:deposit ratio (89%) and the impact of seasonal tax outflows on deposit balances in Retail and Private Banking.
- Legal Exposure: Track the status of the US swaps antitrust litigation and the outcome of the summary judgment motion filed in March 2026.
- Capital Deployment: Assess the execution of the share buyback programme (10.7 million shares repurchased post-quarter) and the timing of the Evelyn Partners acquisition.