NatWest Group has hiked its dividend after delivering a very respectable financial performance for 2025, with attributable profit climbing to £5.5 billion and earnings per share jumping 27% to 68.0 pence.
The bank’s return on tangible equity hit 19.2%, whilst total income, excluding notable items, rose by £1.8 billion to £16.4 billion. Profit before tax rose to £7.7 billion.
The strong results were driven by deposit margin expansion, increased customer lending, and robust growth in assets under management and administration, which climbed 19.6% to £58.5 billion.
Results follow a bad week for NatWest shares, which sank after announcing the £2.7 billion acquisition of Evelyn Partners at the beginning of the week. Some analysts suggest NatWest has overpaid.
NatWest shares were little changed on Friday, down around 0.5% at the time of writing.
“NatWest delivered a reassuring set of results after a tough week for the shares,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Results beat expectations across the board, with profits coming in 10% ahead. The standout was lending income, while tighter cost control and lower bad-loan charges gave profits an extra lift. The balance sheet also looks healthier, with capital ticking up (though there was a benefit from the smaller-than-hoped buyback announced earlier in the week).”
The bank said it added approximately one million new customers during the year, both organically and through the Sainsbury’s Bank transaction, helping net loans to customers grow by £20.7 billion, whilst customer deposits increased by £10.4 billion.
Retail banking savings were a particular area of strength.
NatWest’s efficiency drive delivered results, with the cost-to-income ratio improving 4.8 percentage points to 48.6%. The bank maintained a strong capital position with a Common Equity Tier 1 ratio of 14.0%, up around 40 basis points year-on-year.
The board has proposed a final dividend of 23.0 pence per share, bringing the total for 2025 to 32.5 pence. This is a whopping 51% increase on 2024.
The outlook wasn’t bad either. NatWest expects 2026 total income between £17.2 billion and £17.6 billion, with return on tangible equity exceeding 17%.