Richard Hunter, Head of Markets at interactive investor, argues NatWest's first-quarter performance demonstrates a clear recovery from its historic woes while the market's muted response reflects disappointment with the outlook rather than with delivery.
Hunter notes that NatWest, the UK-focused banking and financial services group, is converting strong cash generation into generous shareholder returns and an acquisitive push, including Metro Bank’s mortgage book, Sainsbury’s Bank and the £2.7bn Evelyn Partners deal, while management has nudged up total-income guidance but left other targets unchanged and excluded Evelyn Partners from 2026 guidance.
He points to the operational detail underpinning the view: Q1 total income of £4.36bn and operating profit of £2bn, net interest income of £3.39bn, lending up £7.2bn and deposits up £3.1bn, division operating profits (Retail £781m, Private Banking & Wealth Management £94m, Commercial & Institutional £1.03bn), a CET1 ratio of 14.3%, cost:income ex‑litigation of 46.5% and £2.2bn of RWA management benefits, offset by a £1.8bn fall in AUM despite £0.9bn of net inflows.
Hunter says the near-term test is whether management can convert the upgraded income guidance, now at the top end of the £17.2bn–£17.6bn range, into sustained earnings momentum while integrating Evelyn Partners and maintaining cost and capital progress.
