NatWest boosts outlook and kicks off new share buyback
Shares are slightly up at NatWest after the group upgraded its full-year guidance and announced a 9.5p interim dividend and a £750m share buyback following “a strong H1 2025 performance”.
For the first half of 2025, NatWest Group disclosed to its shareholders that its attributable profit had reached £2.5bn.
It recorded a 28 per cent year-on-year increase in earnings per share to 30.9p, while the group achieved a strong return on tangible equity of 18.1 per cent.
The group returned to full private ownership in May after the government sold its remaining 0.26 percent stake in the group.
During the first half, the group’s customer deposits (excluding central items) grew by £4.5bn, with £2.4bn attributed to the acquisition of Sainsbury’s Bank. NatWest took over Sainsbury’s Bank’s retail banking operations, which were set to be completed in this half-year.
The group told shareholders it continues “to actively manage our balance sheet and risk”, which saw it delivering £2.9bn of risk-weighted assets (RWA) management actions as the group created capacity for growth.
Its common equity tier one ratio of 13.6 per cent was in line with the fourth quarter of 2024, while tangible net asset value per share in increased by 22p to 351p.
On its outlook, the banking group strengthened its guidance, now expecting its return on tangible equity to be greater than 16.5 per cent and its income (excluding notable items) to exceed £16bn over 2025.
Chief Executive Paul Thwaite said the “Group’s strong performance in the first half of the year reflects our consistent support for our customers and, in turn, delivery for our shareholders.”
“Having returned to full private ownership in Q2 2025, NatWest Group is well placed to step up and play its part in supporting economic growth across the UK and, in doing so, to create sustainable value for all our stakeholders,” he added.
The bank is currently trading at 510.80 on Friday morning, nearly a 2 per cent increase in value.
Zoe Gillespie, wealth manager at RBC Brewin Dolphin, said: “NatWest has posted another strong set of results, beating forecasts again as the bank’s turnaround really takes hold.”
However, AJ Bell investment director Russ Mould, noted “The market will be wary of NatWest becoming too aggressive on this front given its history and the danger of unpicking progress in returning the bank into a profitable and cash generative operation.”
“The strong returns could come under scrutiny; with speculation the government is considering a raid on the banking sector to bolster strained public finances,” he added.