Natwest shares sink after bank unveils £2.7bn wealth deal
Natwest has beat its banking rivals to snap up wealth manager Evelyn Partners and laid out plans to kick off a new round of shareholder returns.
The FTSE 100 banking giant, which returned to privatisation last year, said it had sealed a £2.7bn deal to purchase the firm from its private equity owners Permira and Warburg Pincus.
But the news appeared to trouble investors on Monday, with the bank’s stock falling over seven per cent to 611.20p.
As part of its acquisition announcement, Natwest added it would kick off a fresh £750m buyback but added it expects to announce the next buyback programme at its 2027 half-year results.
“The reality is that Natwest shareholders are left with broadly the same cash-flow proposition as before,” Jefferies analysts said on news of the deal.
“Certainly, near-term buybacks will be reduced, but DPS (what investors get in their pockets) will be relatively unaffected, near-term, and reduced by just around two per cent long-term on our estimates.”
The move follows reports the bank was set for a bidding war alongside rival Barclays as both firms sought to beef up their wealth market share.
Natwest already has a strong presence through its Coutts division whilst Barclays has doubled down on its private bank division, where total income reached £697m in the first half of 2025.
But Natwest now expects the new acquisition to increase the group’s exposure to the high-growth and capital light segment whilst diversifying revenue streams through increasing fee income by near 20 per cent.
“This transaction creates the UK’s leading Private Banking and Wealth Management business, delivering the scale and capabilities needed to succeed in a market with significant growth potential,” said Natwest chief Paul Thwaite.
“It accelerates delivery of NatWest Group’s strategy and positions us to realise our longer-term ambitions.”
Evelyn Partners pocketed £179m in earnings last year and holds around £69bn of assets under management. Combined with Natwest’s £59bn, the group’s total managed assets will now top £127bn.
Natwest accelerates wealth push
Banking giants have ramped up plans for a wealth management push in the last year with the division offering lenders a less volatile and more capital-light source of income, due to its reliance on recurring fees rather than the interest rate fluctuations that affect traditional lending.
Lloyds acquired the remaining 49.9 per cent of Schroders Personal Wealth (SPW) from the asset manager, handing the bank sole control of the previous joint-venture.
Earlier this year, Lloyds’ wealth push faced a disruption after Jo Harris, the chief executive of the bank’s mass affluent division, departed within days of the launch of its new service.
At HSBC, Georges Elhedery has laid out ambitious plans to double the groups’ assets under management to £100bn within five years as it aims to become a top five player in the wealth manager scene.
The European banking giant – which took the crown as the City’s most valuable firm last month -has also splashed $5bn on a new luxury wealth centre in the heart of London to target the mass-affluent.