NatWest reports £1.5 billion profit and 21.6% return in third quarter
Key Facts
NatWest reported on 30 October an attributable profit of £1.5 billion in the third quarter of 2026 and a return on tangible equity of 21.6%, with capital generation before distributions of 71 basis points and underlying earnings per share of 19.3 pence. The quarter-on-quarter comparison was more mixed: profit attributable to ordinary shareholders fell 4.4% to £1,532 million, from £1,603 million in the second quarter. It was also down 4.1% from the third quarter of 2025, when it stood at £1,598 million. Operating profit before tax was £2,225 million, down 2.6% from the previous quarter but up 1.9% year on year. The figures reflect income growth alongside higher credit impairment costs during the period.
Net interest income was £3,559 million, up 1.8% from the second quarter and 8.9% from the same period last year, when it was £3,268 million. Total income rose to £4,640 million, up 3.0% quarter on quarter and 7.1% year on year. Before the results announcement, the average of analyst estimates published by NatWest, based on models through 20 October, was £3,608 million for net interest income and £4,641 million for total income. Consensus put return on tangible equity at 21.2% and earnings per share at 19.2 pence. The actual return was therefore above the average estimates, while net interest income and total income were close to their forecast levels.
By contrast, impairment losses were £277 million in the third quarter, up 97.9% from £140 million in the second quarter and 81.0% from £153 million in the third quarter of 2025. Year-to-date impairment losses totalled £700 million. NatWest attributed the annual increase to a small number of individual exposures in the corporate and institutional business and central items. These factors included an increased provision for one borrower placed into administration during the third quarter. Against this backdrop, the quarterly increase in net interest income did not translate fully into comparable growth in operating profit before tax, which fell from the previous quarter.
Customer assets and liabilities stood at £1,002.6 billion on 30 September, up £15.7 billion, or 1.6%, during the quarter. The total was up £42.3 billion, or 4.4%, year to date, including the impact of Evelyn Partners. Chief Executive Paul Thwaite said the bank had grown lending, deposits and assets under management across its three customer-facing franchises. In private banking and wealth management, the group recorded net inflows of £1.0 billion in assets under management during the quarter. These inflows equated to 3.4% of opening assets under management balances on an annualised basis.
The corporate and institutional business added £6.7 billion to customer loans and £3.0 billion to deposits during the quarter, with the increase concentrated mainly in corporate and institutional and commercial mid-market. NatWest completed its acquisition of Evelyn Partners on 30 June 2026, at a reported enterprise value of £2.7 billion. In its first-half report, the group recorded total consideration for the deal of £2.2 billion after adjustments for cash, debt and working capital. NatWest said the integration was progressing during the third quarter, while the wealth management and private banking businesses recorded the net inflows noted above. Year-to-date return on tangible equity was 20.2%, and the bank said income diversification, cost discipline and capital generation had supported this performance.
The cost-to-income ratio, excluding litigation and conduct costs, was 45.1% in the third quarter, compared with 45.5% in the second quarter and 45.8% in the third quarter of 2025. The loan-to-deposit ratio, excluding repurchase and reverse repurchase agreements, was unchanged at 90% on 30 September from 30 June, compared with 88% at the end of 2025. The average liquidity coverage ratio was 140% during the reporting period. NatWest reaffirmed the guidance it gave with its first-half results. It added that it expects risk-weighted assets to be about £210 billion on 1 January 2027, including the impact of Basel 3.1 rules, which it expects to add about £10 billion to risk-weighted assets.
Upcoming investor events include a private banking and wealth management event on 25 November 2026, followed by the 2026 annual results announcement on 12 February 2027. The event follows the recording of £1.0 billion in net inflows to assets under management during the quarter, as the group continues to integrate Evelyn Partners. Before the results announcement, New York-listed NWG shares closed at $16.87 on 27 October and then at $17.23 on 28 October. They closed at $17 on 29 October. These prices precede the results announcement on 30 October and therefore do not represent the market's response to the published results.