Natwest hikes dividend after profit hits post-financial crisis high
Natwest laid out plans to splash the cash to shareholders in its full-year earnings report on Friday as the bank’s profit reached its highest since the 2008 financial crisis.
The FTSE 100 banking giant – which returned to private ownership in the last year – recorded pre-tax profit of £7.7bn in 2025 financial year, up from £6.2bn. The all-time record remains the £10.3bn the bank notched in 2007.
The lender’s return on tangible equity, a crucial metric for profitability, rose to 19.2 per cent from 17.5 per cent.
Investors have been placed in line for a hefty payout with Natwest proposing a final dividend of 23p, bringing 2025’s total to 32.5p per share – a whopping 51 per cent increase compared to 2024.
Richard Hunter, head of markets at interactive investor, said: “This is a sparkling set of numbers by any standards, as NatWest continues the relentless recovery from its historic woes.
“As far as investors are concerned, NatWest is in a sweet spot. The government shackles have gone, the group has prodigious amounts of cash and acquisitions to boost growth further are playing out.”
On Monday, Natwest also kicked off a £750m share buyback after the bank announced its £2.7bn takeover of wealth manager Evelyn Partners.
Markets had a jittery reaction to the takeover with the bank’s stock falling some eight per cent as it came alongside news buybacks would be halted to until the first half of 2027.
Still, Natwest defended the decision with finance boss Katie Murray insisting “this is not a situation where we’ve overpaid”.
Natwest leans into AI
Natwest continued the push on its cost-cutting regime in the last year and accelerated ambitions through AI implementation.
Last year, the bank sealed a landmark agreement with ChatGPT-maker OpenAI with the aim to focus on “bank-wide simplification”.
The bank said it was saving 90,000 hours per year through automated complaint responses and had reduced call time in its private banking arm by 70 per cent.
Operating expenses edged up a touch to £8.3bn from a previous £8.1bn but the bank’s cost-to-income ratio – a measure of its profitability in comparison to costs – improved to 48.6 per cent from 53.4 per cent.
“It is clear our strategy is working, and we are delivering consistently. We are raising our ambition and sharpening our strategic focus, with stretching new targets in place,” said chief executive Paul Thwaite.
“We must now make the most of the investment we’ve made to become even more productive, build deeper customer relationships and ensure we are the bank of choice in the areas we want to grow.”