NatWest Group plc

NatWest reported H1 2026 return on tangible equity of 19.7%, with Q2 ROTE at 21%. In Q2, income excluding notable items increased 5.4% to GBP 4.4 billion, operating costs rose 1.8% to GBP 2.1 billion, the impairment charge was GBP 140 million, and operating profit increased 12.4% to GBP 2.3 billion; profit attributable to ordinary shareholders was GBP 1.6 billion. For the half year, income excluding notable items increased 8.9%, cost growth was 4.5%, and the cost-to-income ratio improved to 46%, down 2.8 percentage points. CET1 was 13.2% after the Evelyn Partners acquisition, and capital generation before distributions was 137 basis points in the quarter and 197 basis points for the first half. Guidance was raised to full-year income excluding notable items of around GBP 17.9 billion, other operating expenses of around GBP 8.5 billion, capital generation before distributions and the impact of Evelyn Partners of greater than 240 basis points, and ROTE of more than 19%. The impairment rate guidance for 2026 remained below 25 basis points, and the next buyback is expected to be announced with full-year results in February.

Katie Murray emphasized that NatWest is building a larger, more efficient bank with momentum across all three businesses and confidence in its ability to compound returns through the cycle. She highlighted disciplined growth, simplification, and active capital and risk management as the core of the 2028 plan, and said the quarter showed strong customer growth, efficiency, and returns. Her tone was confident and upbeat, while still framing the strategy as deliberate and sustainable rather than aggressive.

Katie Murray said the quarter delivered 5.4% income growth to GBP 4.4 billion, 1.8% cost growth to GBP 2.1 billion, and a 1 percentage point improvement in the cost-income ratio to 45.5%. She cited a GBP 140 million impairment charge, equivalent to 13 basis points of loans, and a CET1 ratio of 13.2% after Evelyn Partners, alongside 137 basis points of capital generation in Q2 and 197 basis points for H1. Donal Quaid added that total capital was 18.9%, the leverage ratio was 4.7%, total MREL was 30.6%, average LCR was 140%, primary liquidity was GBP 152 billion, and wholesale funding outstanding was GBP 93 billion. He also said 2026 capital generation before distributions and Evelyn impact is now expected to be more than 240 basis points, with a dividend payout ratio around 50% and surplus capital returned via buybacks.

Questions focused on the July FSR proposals, covered bonds, future AT1 and Tier 2 issuance, prefunding, currency mix, and data center exposure. Donal Quaid said the bank welcomed the direction of travel on leverage and buffer usability, but said there has been no change to capital requirements and that a 40 basis point leverage requirement reduction would not create day-one benefit because risk weights are the binding constraint. On funding, he said NatWest expects to remain active in H2 on MREL, sees the AT1 and Tier 2 stack as mostly refinancing-driven over time, expects to be done with Tier 2 for this year, and sees dollars continuing to play a big role; on data centers, Katie Murray said the bank does not separately classify them and suggested investors look at Pillar 3 disclosure for subcategory detail.