NatWest Raises Guidance, Brings Forward Buyback Announcement Plans — 2nd Update

By Dominic Chopping

NatWest raised full-year guidance and brought forward the date it expects to make an announcement on a new share buyback program as it reported higher earnings and completed the acquisition of wealth manager Evelyn Partners.

The U.K. lender reported a 29% rise in pretax profit to 2.29 billion pounds ($3.08 billion) for the second quarter, above a company-compiled consensus of 2.04 billion pounds.

Net interest income--what the company earns on loans minus what it pays on deposits--improved from a year earlier, landing in line with expectations of 3.51 billion pounds, while total income rose 12% to 4.5 billion pounds, outpacing a slight increase in costs.

Chief Executive Paul Thwaite said that deposits, lending and assets under management all continued to grow over the past six months, adding that the bank is well placed to accelerate progress.

"The consistency of our performance, coupled with the completion of our Evelyn Partners acquisition, has given us the confidence to strengthen our guidance for 2026," he said.

The bank now expects total income excluding notable items for the year at around 17.9 billion pounds, including around 275 million pounds from the Evelyn Partners deal. It had previously guided to total income at the upper end of a 17.2 billion to 17.6 billion-pound range.

Full-year operating expenses are now seen at around 8.5 billion pounds, from earlier guidance of around 8.2 billion pounds, while the return on tangible equity is expected at more than 19% from more than 17% previously. It reported a return on tangible equity of 21.0% in the second quarter.

Capital generation pre-distributions is now seen at greater than 240 basis points, excluding the Evelyn buy, having previously guided to around 200 basis points.

The bank generated around 250 million pounds in cost reductions during the first six months of the year as it continues with an efficiency drive that includes structural simplification plans and investments in technology to improve productivity, which includes expanded artificial intelligence adoption.

It announced an interim dividend of 12 pence a share, up from 9.5 pence at the same stage last year, and said that it would consider new share buybacks six months earlier than previously planned. A buyback announcement is now expected alongside its full-year 2026 results, the bank said, having previously expected to make an announcement with its first-half 2027 report.

NatWest, which returned to full private ownership last year after the U.K. government sold off the last of its crisis-era bailout stake, maintained its broader 2028 financial targets.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

July 31, 2026 08:41 ET (12:41 GMT)