NatWest reports profit jump and lifts targets amid wealth push

By Lawrence White

LONDON, Feb 13 (Reuters) - NatWest NWG.L reported a 24% jump in annual profit on Friday, just ahead of forecasts, and set more ambitious performance targets as it steps up investment in Britain's costly but potentially lucrative wealth management market.

The British bank posted 2025 pretax profit of 7.7 billion pounds ($10.5 billion), up from 6.2 billion pounds a year earlier and compared with the 7.5 billion pounds average analyst forecast compiled by the bank.

NatWest said it now expects to deliver a return on tangible equity of more than 18% in 2028, up from previous guidance of over 15% in 2027.

Analysts said the results underlined NatWest's shift to a simpler, more profitable domestic lender after shedding the globe-spanning ambitions of its RBS era, which ended in a government bailout during the 2008 financial crisis.

"We are raising our ambition and sharpening our strategic focus, with stretching new targets in place," CEO Paul Thwaite said.

NatWest shares slipped 0.5%, having already climbed 37% in the last year. Investors had largely priced in the upgraded profitability target, after Reuters reported British banks were preparing to raise the metric and after rivals Barclays BARC.L and Lloyds LLOY.L announced their own upgrades.

UK bank stocks have rallied over the past two years on a stable if slow-growing economy, customers proving resilient with low loan defaults, and a more supportive political and regulatory climate under a Labour government focused on growth.

Those gains have boosted executive pay, with Thwaite's total compensation rising to 6.6 million pounds in 2025 from 4.9 million pounds the year before.

NATWEST SHOWS WEALTH AMBITIONS WITH EVELYN DEAL

The results come days after NatWest agreed to buy Evelyn Partners, one of Britain's largest wealth managers, for 2.7 billion pounds - the bank’s biggest deal since its 2008 bailout.

NatWest also announced a 750-million-pound share buyback for the first half of 2026, continuing to return excess capital to shareholders while investing in acquisitions and technology.

British lenders have increasingly pushed into wealth management as income from lending falls in line with central bank rate cuts, targeting a crowded market previously led by independent players such as St James's Place SJP.L.

NatWest said its assets under management and administration grew 20% to 58.5 billion pounds in the year, even before the Evelyn deal.

($1 = 0.7354 pounds)