Is Natwest set for a deal spree after privatisation?
As Natwest finally breaks from the shackles of government ownership, the banking juggernaut may be gearing up for an acquisition spree.
The FTSE 100 giant is speculated to return to privatisation in a matter of days after the government accelerated its sell off over the last year.
Shares in the firm rose one per cent to 527.20p as markets opened on Tuesday, as investors braced for the landmark announcement.
The bank has purchased over £5bn worth of shares from the government as part of its directed buyback program in the last four years.
As the bank returns to private ownership, the free capital may be setting it up for a shopping spree.
Natwest lodged an £11bn bid for Santander UK’s retail arm earlier this year, according to reports from the Financial Times.
Talks between the two lenders are no longer active, but should the takeover have gone ahead it would have birthed the biggest banking deal since the financial crisis.
Whilst unsuccessful, the proposal could offer insight into Natwest’s future post-privatisiation.
The bank kicked off its buying binge last year after snapping up the majority of Sainsbury’s banking assets. The grocer spent months trying to ditch the division before agreeing to pay Natwest £12m to take its portfolio consisting of unsecured loans, credit card balances and deposits.
In July 2024, the firm purchased Metro Bank’s £2.5bn residential mortgages portfolio.
Chief executive Paul Thwaite described the transaction as a “a further opportunity to accelerate the growth of our retail mortgage book within our existing risk appetite”, and expects the deal to deliver “attractive returns”.
This would turn the tide on Natwest’s dealmaking past, where the firm offloaded payment tech company Worldpay.
Natwest, then RBS, sold over 80 per cent of the business to private equity firms Advent International and Bain Capital for £2bn billion in 2010. In 2013, it sold its remaining 20 per cent stake to Advent and Bain.
Worldpay was valued at $24.25bn in April 2025 after an acquisition from Global Payments.
Natwest bolstered takings in first-quarter
The Treasury has maintained its holding in Natwest since its £46bn rescue plan after the 2008 financial crisis.
As the lender, then under the Royal Bank of Scotland moniker, fought for its survival the government stepped in and acquired an 80 per cent stake.
Natwest enjoyed a bumper first-quarter in 2025 after a rush to beat the stamp duty deadline led to a £3.4bn increase in net loans to £371.9bn.
The firm’s net interest margin – a key metric for a bank’s profitability from lending – expanded eight basis points from the end of 2024 to 2.27 per cent.
The bank pocketed £1.8bn in pre-tax profit, surpassing the £1.6bn pencilled in by analysts.
John Moore, senior investment manager at RBC Brewin Dolphin, hailed the business’ “strong balance sheet and solid foundation”.
“With some of its peers potentially retreating from the UK, that may open up opportunities for acquisition or other forms of expansion, which would provide further scale while sticking to the three pillars of the bank’s strategy,” Moore said.