NatWest Group Plc: 2025 Full Year Results Summary
Business Context and Reporting Period
This Form 6-K filing reports the full-year financial results for NatWest Group Plc for the period ended 31 December 2025, announced on 13 February 2026. The reporting period marks the bank's return to full private ownership following the UK Government's exit in May 2025. The results reflect broad-based growth across Retail Banking, Private Banking & Wealth Management, and Commercial & Institutional segments, supported by the integration of Sainsbury's Bank customers and the Metro Bank mortgage portfolio.
Key Financial Metrics
| Metric | 2025 | 2024 | Variance |
|---|---|---|---|
| Total Income (excl. notable items) | £16.4 billion | £14.6 billion | +12.0% |
| Operating Profit Before Tax | £7.7 billion | £6.2 billion | +24.4% |
| Profit Attributable to Ordinary Shareholders | £5.5 billion | £4.5 billion | +21.2% |
| Earnings Per Share (Basic) | 68.0 pence | 53.5 pence | +27.1% |
| Return on Tangible Equity (RoTE) | 19.2% | 17.5% | +1.7% |
| Cost:Income Ratio (excl. litigation) | 48.6% | 53.4% | -4.8% |
| Net Interest Margin | 2.34% | 2.13% | +21 bps |
| Loan Impairment Rate | 16 bps | 9 bps | +7 bps |
| Common Equity Tier 1 (CET1) Ratio | 14.0% | 13.6% | +40 bps |
| Liquidity Coverage Ratio (LCR) | 147% | 151% | -4% |
| Assets Under Management (AUMA) | £58.5 billion | £48.9 billion | +19.6% |
Material Changes vs. Prior Period
- Revenue Growth: Total income excluding notable items rose by £1.8 billion, driven by deposit margin expansion, higher customer balances, strong hedge income, and increased FX trading revenue.
- Balance Sheet Expansion: Net loans to customers (excl. central items) grew by £20.7 billion, while customer deposits (excl. central items) increased by £10.4 billion. The loan-to-deposit ratio improved to 88%.
- Cost Efficiency: The cost:income ratio improved significantly to 48.6% due to simplification initiatives, digitization, and a reduction in full-time equivalents (FTEs) of approximately 0.5k, despite inflationary pressures on staff costs.
- Impairment Charges: Net impairment losses increased to £671 million (from £359 million in 2024), primarily due to charges associated with the Sainsbury's Bank acquisition and higher Stage 3 charges, though the loan impairment rate remained low at 16 bps.
- Capital Generation: Capital generation pre-distributions was 252 basis points, with the CET1 ratio rising to 14.0% despite an increase in Risk-Weighted Assets (RWAs) to £193.3 billion.
Guidance, Outlook, and Risks
2026 Guidance
- Total Income (excl. notable items): £17.2 - £17.6 billion.
- Operating Expenses (excl. litigation): Around £8.2 billion.
- Loan Impairment Rate: Below 25 basis points.
- RoTE: Greater than 17%.
- Capital Generation: Around 200 basis points pre-distributions.
2028 Strategic Targets
- Customer Assets & Liabilities (CAL) Growth: Compound annual growth rate (CAGR) greater than 4%.
- Cost:Income Ratio: Below 45%.
- RoTE: Greater than 18%.
- CET1 Target: Around 13.0%.
Management Commentary & Risks
Management highlighted the successful integration of Sainsbury's Bank and the Metro Bank mortgage portfolio, adding approximately one million new customers. The bank is accelerating AI and data transformation with partnerships including OpenAI and AWS. A significant post-balance sheet event is the agreement to acquire Evelyn Partners for an enterprise value of £2.7 billion, expected to complete in summer 2026.
Risks and Contingencies: The filing details ongoing litigation regarding LIBOR, FX, and swaps, though recent court rulings have been favorable (e.g., dismissal of odd lot corporate bond trading claims). Regulatory reviews include an investment advice review expected to conclude in H1 2026. The bank notes that Basel 3.1 implementation in 2027 is expected to increase RWAs by approximately £10 billion.
Investor Verification Checklist
- Evelyn Partners Acquisition: Verify the regulatory approval timeline and integration costs for the £2.7 billion acquisition announced in February 2026.
- Impairment Quality: Review the composition of the £671 million impairment charge, specifically the portion attributable to the Sainsbury's Bank acquisition versus organic portfolio deterioration.
- Cost:Income Trajectory: Assess the feasibility of reducing the cost:income ratio to below 45% by 2028 given inflationary pressures on staff costs and continued technology investment.
- Dividend Sustainability: Confirm the proposed final dividend of 23.0 pence per share (total 32.5 pence) and the commencement of the £750 million share buyback program in H1 2026.
- Basel 3.1 Impact: Evaluate the projected £10 billion increase in RWAs in 2027 and its potential impact on the CET1 ratio and capital generation capacity.