NatWest Group Announces Acquisition of Evelyn Partners and £750m Buyback

NatWest Group (NWG) has announced a definitive agreement to acquire Evelyn Partners for £2.7 billion and a new £750 million share buyback program.

The acquisition is poised to transform NatWest Group's private banking and wealth management (PBWM) division, creating the UK's leading business in this space.

The acquisition of Evelyn Partners will significantly diversify NatWest Group's income streams, increasing fee income by approximately 20% before revenue synergies are realized. This move also bolsters the group's presence in a high-growth, capital-light segment, with PBWM expected to constitute around 20% of group customer assets and liabilities.

The purchase price values Evelyn Partners at 9.7 times its 2025 EBITDA of £179 million, inclusive of anticipated cost synergies. Evelyn Partners manages £69 billion in Assets Under Management and Administration (AUMA) and offers integrated wealth management services, including financial planning and a direct-to-consumer platform.

This transaction will combine Evelyn Partners' £69 billion AUMA with NatWest Group's existing £59 billion, resulting in a total AUMA of £127 billion and total Customer Assets and Liabilities of £188 billion.

NatWest Group anticipates annual run-rate cost synergies of approximately £100 million, representing about 10% of the combined PBWM cost base, with costs to achieve these synergies estimated at £150 million. The group also expects to generate substantial revenue synergies by integrating Evelyn Partners' financial planning and investment management solutions with NatWest Group's broader banking and wealth management offerings for its 20 million customers.

The transaction is projected to be accretive to NatWest Group's growth and Return on Tangible Equity (RoTE) in the first year of ownership. Furthermore, the returns are expected to surpass those generated through a share buyback.

The acquisition will be funded from existing resources and is projected to reduce NatWest Group's CET1 ratio by approximately 130 basis points. Post-acquisition and the announced £750 million share buyback, NatWest Group anticipates announcing its next share buyback alongside its H1 2027 results. The ordinary dividend payout ratio will remain at around 50% of attributable profits.

Driver Breakdown:

• Scale and Capabilities: The merger creates a market leader with the scale and resources to capitalize on significant growth opportunities in the UK wealth management sector.
• Synergies: The combination of Evelyn Partners and NatWest Group's PBWM business is expected to generate substantial cost and revenue synergies, enhancing shareholder value.
• Diversification: The acquisition diversifies NatWest Group's income streams and increases its exposure to a high-growth, capital-light segment.

AskTraders Takeaway:

The market is likely to view the acquisition positively, given the strategic rationale and potential for earnings accretion. However, regulatory approvals and integration risks could introduce some volatility in the short term.

CEO Paul Thwaite stated, “Bringing together these two leading businesses creates a unique opportunity to provide financial planning, savings and investment services to more families and people across the UK,” reinforcing the company’s strategic focus on wealth management and customer service.

Completion of the transaction is subject to customary regulatory approvals and is anticipated to occur in the summer of 2026. Ardea Partners International LLP and BofA Securities acted as joint lead financial advisors to NatWest. UBS also acted as a financial advisor to NatWest.