NatWest Group Plc: Q3 2025 Performance Summary
Business Context and Reporting Period
This Form 6-K filing covers NatWest Group Plc's performance for the quarter ended 30 September 2025 and the nine months ended on the same date. The report highlights a strategic focus on growth, simplification, and digital transformation. Management notes strong customer activity, continued lending growth, and stable deposits across all three main business segments: Retail Banking, Private Banking & Wealth Management, and Commercial & Institutional.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Total Income (excl. notable items) | £4.2 billion | £3.8 billion | £12.1 billion | £10.8 billion |
| Profit Attributable to Ordinary Shareholders | £1.6 billion | £1.2 billion | £4.1 billion | £3.3 billion |
| Return on Tangible Equity (RoTE) | 22.3% | 18.3% | 19.5% | 17.0% |
| Cost:Income Ratio (excl. litigation/conduct) | 45.8% | 47.6% | 47.8% | 52.8% |
| Net Interest Margin (NIM) | 2.37% | 2.18% | 2.31% | 2.11% |
| Common Equity Tier 1 (CET1) Ratio | 14.2% | 13.6% | 14.2% | 13.6% |
| Liquidity Coverage Ratio (LCR) Average | 148% | 151% | 148% | 151% |
| Risk-Weighted Assets (RWAs) | £189.1 billion | £181.7 billion | £189.1 billion | £183.2 billion |
| Tangible Net Asset Value (TNAV) per Share | 362p | 329p | 362p | 329p |
Material Changes vs. Prior Period
- Income Growth: Total income excluding notable items rose 10.4% year-over-year in Q3 2025, driven by deposit margin expansion and lending growth. Net interest income increased 12.7% compared to Q3 2024.
- Profitability: Operating profit before tax increased 30.4% year-over-year to £2.2 billion. RoTE improved by 4.0 percentage points to 22.3%.
- Cost Efficiency: The year-to-date cost:income ratio improved by 5.0 percentage points to 47.8%, reflecting simplification efforts and a reduction in headcount (down ~600 FTE vs. Q3 2024).
- Balance Sheet: Net loans to customers (excl. central items) grew by £4.4 billion in the quarter. Customer deposits (excl. central items) decreased slightly by £1.1 billion.
- Impairments: Net impairment charges were £153 million in Q3 2025, a decrease of £40 million compared to Q2 2025, driven by lower Stage 3 charges in Commercial & Institutional.
Guidance, Outlook, and Risks
- Updated Guidance: Management has upgraded its 2025 full-year guidance. Total income excluding notable items is now expected to be around £16.3 billion, and RoTE is expected to exceed 18.0%.
- Future Targets: New guidance for 2026 and targets for 2028 will be announced with Full Year 2025 results on 13 February 2026.
- Capital Generation: Capital generation pre-distributions was 101 basis points in the quarter. The CET1 ratio stands at 14.2%, providing significant headroom above regulatory requirements.
- Risks and Contingencies:
- Litigation: Significant developments include a summary judgment dismissal of USD LIBOR claims in the US (subject to appeal), while a Euribor case was reinstated by the US Court of Appeals. An FX settlement in Australia was approved.
- Regulatory: A monitorship regarding fixed-income securities spoofing was paused in May 2025, with obligations extended to December 2026.
- Climate Finance: The bank provided £7.6 billion in climate and transition finance in Q3 2025, progressing toward a £200 billion target by 2030.
Key Facts for Investor Verification
- Verify the sustainability of the deposit margin expansion driving NIM growth, particularly as interest rate environments evolve.
- Monitor the litigation outcomes, specifically the appeal of the USD LIBOR summary judgment and the reinstated Euribor case, for potential future provisions.
- Assess the impact of the Sainsbury's Bank acquisition integration on future cost savings and lending growth.
- Review the post-model adjustments to Expected Credit Loss (ECL) provisions, which decreased to £265 million, to understand the bank's view on economic uncertainty.
- Confirm the execution of the share buyback programme, with £65.99 million of shares repurchased post-quarter end.