NatWest posts £2.225 billion operating profit before tax in third quarter
Key Facts
NatWest Group reported operating profit before tax of £2,225 million in the third quarter of 2026, up 1.9% from £2,183 million in the same period last year. The result was in line with the average analyst forecast, according to Reuters, which described profit as £2.2 billion. Total income rose 7.1% year on year to £4,640 million, while net interest income increased 8.9% to £3,559 million. The figures reflect revenue growth alongside higher operating expenses and credit impairment charges. The bank reaffirmed its previous guidance for the year rather than raising it, Reuters reported.
Net interest income rose despite a one-basis-point decline in the margin from the previous quarter, with the net interest margin at 2.50%, compared with 2.49% in the second quarter and 2.37% a year earlier. Year on year, the reading was 13 basis points higher than in the third quarter of 2025, according to the bank’s data. But higher returns from lending did not prevent impairment losses from rising to £277 million, from £153 million a year earlier, an increase of 81.0%. NatWest said net impairment charges rose £137 million from the previous quarter to the equivalent of 24 basis points of gross customer loans. It attributed the increase mainly to the non-recurrence of impairment releases in the second quarter and higher Stage 3 charges, while the provision for expected credit losses remained at £3.6 billion.
Other operating expenses were £2,091 million, up £107 million, or 5.4%, from the third quarter of 2025. NatWest said the increase reflected the acquisition of Evelyn Partners, alongside investment, restructuring and 2026 pay rises. Quarter on quarter, expenses rose £42 million, or 2.0%, with £128 million of Evelyn Partners costs recorded during the quarter. The bank completed its acquisition of the wealth manager on June 30, 2026, at a disclosed enterprise value of £2.7 billion. NatWest pointed to an offsetting effect from simplification savings and the timing of some charges. Its wealth management business also recorded net inflows into assets under management of £1.0 billion during the quarter, equivalent to 3.4% of opening assets on an annualised basis.
Total customer assets and liabilities were £1,002.6 billion on September 30, up £15.7 billion, or 1.6%, during the quarter, including the impact of the acquisition. On capital, the CET1 ratio rose 30 basis points during the quarter to 13.5%. Return on tangible equity was 21.6% for the period. The indicators show growth in the customer asset and liability base and a higher core capital ratio, alongside the bank’s continued integration of the wealth management business. The bank maintained its annual targets, according to Reuters, while the path of net interest income remained a key focus of its guidance.
NatWest shares fell 8.4% on Friday, October 30, and were on track for their biggest daily decline since March 19, according to Reuters via Euronext. The report linked the share move to weaker-than-expected net interest income guidance. Executives told analysts they expected the net interest margin to remain broadly stable at around 2.5% through 2027, while consensus forecasts had pointed to higher growth. The CET1 ratio remained at 13.5% after rising during the quarter, while impairment losses increased from a year earlier. This puts the development of provisions and margin expectations among the key figures markets are tracking in the bank’s results.
NatWest maintained its assumption that the Bank of England’s Bank Rate would rise by 25 basis points to 4% in the fourth quarter of 2026; this is the bank’s assumption for the rate path, not a forecast attributed to the market. The Bank of England’s next meeting is on November 5, when it will publish its monetary policy summary, minutes and Monetary Policy Report; the stated Bank Rate is 3.75%. The central bank kept the rate at 3.75% at its September meeting in a 6-3 vote, with three members backing a 0.25 percentage-point increase to 4%. The Bank of England said consumer price inflation rose to 3.1% in August and expected it to continue rising over the following quarters. NatWest is scheduled to report its 2026 annual results on February 12, 2027.