NatWest’s 2025 Earnings Top Expectations, Shares Climb on Strong Performance

NatWest Group (LON: NWG) shares are trading higher today after the bank released a stellar 2025 performance summary, exceeding market expectations across key metrics.

The report highlights robust growth across all customer businesses and significant improvements in profitability.

Operating profit before tax for the year reached £7.71 billion, surpassing consensus estimates of £7.49 billion. This positive momentum continued into the fourth quarter, with operating profit before tax coming in at £1.94 billion, also ahead of the forecasted £1.72 billion.

Net profit for the fourth quarter hit £1.48 billion, exceeding the anticipated £1.24 billion. Annually, profit saw a substantial 21% increase year-on-year, reaching £5.83 billion, which also topped estimates of £5.59 billion.

Net interest income (NII), a crucial indicator of a bank's profitability, also impressed. The fourth quarter NII stood at £3.44 billion, compared to expectations of £3.33 billion. For the entire year, NII rose by nearly 14% to £12.82 billion, beating forecasts of £12.72 billion.

The strong NII performance contributed to a total income of £4.32 billion for the fourth quarter and £16.64 billion for the year, exceeding expectations of £4.21 billion and £16.53 billion, respectively.

The bank's strong financial performance has allowed it to increase shareholder returns. Dividends per share increased by 51% compared to 2024, demonstrating the bank's commitment to returning value to investors. A final dividend of 23.0 pence per share is proposed, bringing the total for the year to 32.5 pence.

Growth Drivers for NatWest Group

• Customer Acquisition: Added around one million new customers, both organically and through the Sainsbury's Bank transaction.
• Balance Sheet Management: Actively managed its balance sheet and risk, delivering £10.9 billion benefits from RWA management actions.
• Efficiency Gains: Continued simplification efforts resulted in a cost:income ratio improvement of 4.8% to 48.6%.

CEO Paul Thwaite commented, “2025 was another strong year for NatWest Group, rooted in the support we provide to people, families and businesses in every nation and region of the UK… It is clear our strategy is working, and we are delivering consistently.”

Looking ahead, NatWest Group anticipates continued growth. For 2026, the bank expects total income excluding notable items to be in the range of £17.2-17.6 billion, with a return on tangible equity greater than 17%.