NatWest stock holds outlook after resilient third-quarter profit

NatWest Group reported resilient third-quarter results on Friday, October 30, with attributable profit of 1.5 billion GBP and a return on tangible equity of 21.6 percent. In its Q3 2026 results release, the UK lender said broad-based growth across its customer businesses supported the performance.

Operating profit before tax rose 1.9 percent year on year to 2.2 billion GBP in the quarter. Income excluding notable items reached 4.6 billion GBP, while the year-to-date cost-income ratio improved to 45.7 percent from 47.8 percent a year earlier. Chief Executive Paul Thwaite said lending, deposits and assets under management increased across the group's three customer franchises.

Income growth offsets credit pressure

Customer assets and liabilities increased by 15.7 billion GBP, or 1.6 percent, during the quarter to 1,002.6 billion GBP. Gross customer loans reached 417.8 billion GBP, up 6.4 percent from the end of 2025, while customer deposits rose 5.8 billion GBP during the quarter to 453.4 billion GBP.

Credit costs moved higher. NatWest recorded a 277 million GBP impairment charge, compared with 153 million GBP in the third quarter of 2025. The quarterly loan impairment rate was 24 basis points, while the nine-month rate stood at 21 basis points. The bank nevertheless maintained its full-year expectation for an impairment charge below 25 basis points of gross customer loans.

Capital remained a key support for the investment case. The common equity tier one ratio increased by 30 basis points during the quarter to 13.5 percent, and pre-distribution capital generation was 71 basis points. NatWest said risk-weighted-asset management actions generated 1.8 billion GBP of benefits.

Guidance remains unchanged

Management reaffirmed its 2026 targets, including income of around 17.9 billion GBP excluding notable items, operating costs of around 8.5 billion GBP, return on tangible equity above 19 percent and capital generation above 240 basis points before distributions and the impact of the Evelyn Partners acquisition. The bank now expects risk-weighted assets of around 210 billion GBP on January 1, 2027, including the impact of Basel 3.1.

At 10:06 CET on Monday, November 2, NatWest stock traded at 6.93 euros on Lang & Schwarz.

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Further developments will depend on the bank's delivery against its income, capital and impairment targets. Read more news and analyses on NatWest stock.