NatWest Group Plc - Q1 2026 Financial Summary
Business Context and Reporting Period
This Form 6-K filing reports the unaudited results for NatWest Group Plc for the quarter ended 31 March 2026. The report covers the Group's performance across Retail Banking, Private Banking & Wealth Management, and Commercial & Institutional segments. The filing incorporates forward-looking statements regarding strategic priorities, capital targets, and climate-related ambitions, subject to significant economic and operational risks.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Q4 2025 |
|---|---|---|---|
| Total Income | £4.36 billion | £3.98 billion | £4.32 billion |
| Operating Profit | £2.03 billion | £1.81 billion | £1.94 billion |
| Profit for the Period | £1.51 billion | £1.34 billion | £1.48 billion |
| Profit Attributable to Ordinary Shareholders | £1.43 billion | £1.25 billion | £1.39 billion |
| Earnings Per Share (Basic) | 17.9 pence | 15.5 pence | 17.4 pence |
| Return on Equity (RoE) | 13.3% | 12.4% | 13.0% |
| Return on Tangible Equity (RoTE) | 18.2% | 18.5% | 18.3% |
| Cost:Income Ratio (excl. litigation) | 46.5% | 48.6% | 51.1% |
| Common Equity Tier 1 (CET1) Ratio | 14.3% | 13.8% | 14.0% |
| Liquidity Coverage Ratio (LCR) | 144% | 151% | 147% |
| Loan Impairment Rate | 26 bps | 19 bps | 13 bps |
Material Changes vs. Prior Periods
- Profit Growth: Profit attributable to ordinary shareholders increased by 14.4% compared to Q4 2025 and 14.4% compared to Q1 2025. Earnings per share rose 15.5% year-over-year.
- Income Composition: Total income excluding notable items was £4.22 billion, down 1.1% from Q4 2025 due to two fewer days in the quarter and seasonal tax outflows, but up 6.9% from Q1 2025 driven by deposit margin expansion and lending growth.
- Impairment Charges: Net impairment losses increased to £283 million (up from £136 million in Q4 2025), primarily due to updates in multiple economic scenarios (MES) reflecting geopolitical risks and increased Stage 3 flows in the credit card portfolio.
- Balance Sheet: Net loans to customers grew by £12.7 billion to £431.6 billion. Customer deposits increased by £2.5 billion to £445.5 billion. Assets under management and administration (AUMA) decreased by £1.8 billion due to negative market movements.
- Capital Generation: The Group generated 65 basis points of capital pre-distributions, supported by profit and a reduction in expected losses, partially offset by an increase in Risk-Weighted Assets (RWAs) to £196.0 billion.
Guidance, Outlook, and Risks
- Updated Guidance: Management has strengthened its outlook, now expecting income excluding notable items to be at the top end of the previously guided range of £17.2 - £17.6 billion for the full year. All other 2025 full-year targets are reaffirmed.
- Strategic Progress: The Group reported strong momentum in AI adoption, with 20% of chat volumes handled by generative AI. Customer assets and liabilities (CAL) grew 5.2% year-over-year, building toward a 2028 annual growth target of over 4%.
- Risks and Contingencies:
- Economic Uncertainty: The base case economic outlook has been weakened due to rising energy prices from the Middle East conflict, with inflation expected to peak above 3.5% and unemployment peaking at 5.7%.
- 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, with obligations extended to December 2026.
- 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 ECL provisions, particularly the £140 million charge in Q1 2026.
- Cost Efficiency: Monitor the sustainability of the improved cost:income ratio (46.5%) amidst ongoing transformational investments and inflationary pressures.
- Capital Headroom: Confirm the CET1 ratio of 14.3% provides sufficient buffer against the Minimum Capital Requirements (10.3%) and MDA threshold (10.3%) given the increased RWAs.
- Legal Exposure: Track the status of the US swaps antitrust litigation and the Oracle securities litigation filed in early 2026.
- Deposit Stability: Assess the impact of seasonal tax outflows on deposit balances and the reliance on wholesale funding (Total wholesale funding increased to £92 billion).