Natwest saw a significant jump in pre-tax profit, climbing 20% to £4.3bn in the first half of 2026, compared to £3.6bn the year before. Analysts had predicted around £4bn, but the bank outperformed these expectations. A big part of this success came from a 13% increase in net interest income, which reached £6.9bn. The bank also saw total income rise by 11% to £8.7bn in the same period. With interest rates expected to stay high for longer, Natwest used this as a reason to boost its income forecast. Its net interest margin — a key way to measure how profitable the bank's lending is — widened by 20 basis points to 2.48%, which reflects better spreads and more activity in its lending operations.
Natwest credited part of its strong performance to its acquisition of Evelyn Partners, which it acquired for £2.7bn in February. The integration of this company is expected to give the bank a £275m boost in income for 2026. With Evelyn's £69bn in assets now under its control, Natwest's total assets under management have climbed to £127bn, making it the biggest bank-owned wealth manager in the UK. Even with costs rising slightly by 2.6% to £4.1bn, the bank managed to bring down its cost-to-income ratio to 46% from 48.8%, showing that its income growth has outpaced its expenses.
To reward shareholders, Natwest increased its interim dividend by 26% to 12p, which amounts to a total payout of £955m. The bank also announced it plans to consider a share buyback as part of its full-year 2026 results, a move it brought forward by six months. However, the bank’s share price dropped in the following trading session after details emerged showing it had paid a 9.7x multiple for Evelyn Partners based on its £179m in recent earnings. This raised concerns among investors about the deal's valuation.
The success of Natwest fits into a larger trend of strong performance from UK banks. For example, Lloyds Banking Group — which owns Bank of Scotland and Halifax — reported a pre-tax profit of £4.3bn in the first half of 2026, surpassing its own target of £4.1bn and growing 23% from £3.5bn in the same period last year. Barclays, another major player, also saw a 30% increase in profit to £3.3bn during the second quarter. The bank increased its bonus pool for the first six months to £1.3bn, up from £1bn the previous year. These strong earnings have led the Trades Union Congress (TUC) and some left-wing MPs to push for new tax proposals targeting the sector. Barclays CEO C S Venkatakrishnan warned against such a move, arguing that for every £1 the bank keeps in capital, it lends out around £8 to £10, which supports growth among households and businesses.