NatWest Group Plc has delivered its best financial performance since before the 2008 crisis, reporting a surge in profits, a major boost to shareholder payouts, and a bold embrace of artificial intelligence to streamline operations. The British banking giant, which only recently shed its government ownership, is now making headlines for all the right reasons—though not without sparking some debate among investors and analysts about what comes next.
On February 13, 2026, NatWest announced a 30% jump in pretax income for the fourth quarter, reaching £1.94 billion ($2.6 billion), handily beating analyst expectations of £1.7 billion, according to figures compiled by Bloomberg. For the full year 2025, the bank’s pretax profit soared to £7.7 billion. As reported by City A.M., that’s up from £6.2 billion in 2024 and marks the highest annual profit since the financial crisis that forced the bank into a government bailout. While the 2007 record of £10.3 billion still stands, this year’s results signal a remarkable comeback.
It’s not just the headline numbers that are turning heads. The bank’s return on tangible equity—a key measure of profitability—rose to 19.2% from 17.5%. Richard Hunter, head of markets at interactive investor, was effusive in his praise, calling it “a sparkling set of numbers by any standards, as NatWest continues the relentless recovery from its historic woes.” He added, “As far as investors are concerned, NatWest is in a sweet spot. The government shackles have gone, the group has prodigious amounts of cash and acquisitions to boost growth further are playing out.”
Shareholders are reaping the rewards. NatWest has proposed a final dividend of 23p per share, bringing the total for 2025 to 32.5p—a hefty 51% increase over the previous year. That translates to a dividend yield of 5.5%, making the stock an attractive proposition for income-focused investors. The bank’s shares now trade on 8.6 times historic earnings, with earnings per share coming in at 68p, according to The Motley Fool.
The good news didn’t stop there. NatWest also announced a £750 million share buyback, launched after its £2.7 billion acquisition of Evelyn Partners, a wealth management firm. This deal will increase NatWest’s assets under management from £59 billion to £128 billion and is expected to boost fee income by around 20%. However, the buyback program will be suspended after the current tranche is completed, a move that disappointed some investors and sent the bank’s stock down about 0.5% in early trading. Some saw the suspension as a sign that directors believe the share price is becoming expensive, though the bank still boasts the lowest price-to-earnings ratio among the FTSE 100’s five banks.
Behind the scenes, NatWest is betting big on technology to drive future growth and efficiency. The bank has been accelerating its cost-cutting regime, leaning heavily into artificial intelligence. Last year, it signed a landmark agreement with OpenAI, the creators of ChatGPT, aiming for "bank-wide simplification." The results have been dramatic: NatWest says it is saving 90,000 hours per year through automated complaint responses and has slashed call times in its private banking division by 70%. While operating expenses edged up slightly to £8.3 billion from £8.1 billion, the cost-to-income ratio—a key measure of profitability relative to costs—improved to 48.6% from 53.4%.
Chief Executive Paul Thwaite is bullish about the strategy. “It is clear our strategy is working, and we are delivering consistently. We are raising our ambition and sharpening our strategic focus, with stretching new targets in place,” Thwaite said in a statement. “We must now make the most of the investment we’ve made to become even more productive, build deeper customer relationships and ensure we are the bank of choice in the areas we want to grow.”
Indeed, the numbers suggest a business that’s firing on all cylinders. Total income for 2025 rose 13% to £16.64 billion, with net interest income up 14% to £12.83 billion and non-interest income climbing 11% to £3.81 billion, according to Alliance News. In the fourth quarter alone, total income reached £4.32 billion, up from £3.83 billion a year earlier, and net interest income in Q4 rose to £3.44 billion from £2.97 billion. The bank’s common equity tier 1 ratio—a key measure of financial strength—stood at 14.0% at year-end, up from 13.6% a year earlier.
Looking ahead, NatWest is projecting total income (excluding notable items) between £17.2 billion and £17.6 billion for 2026, with operating expenses (excluding litigation and conduct costs) around £8.2 billion. The bank is targeting a return on tangible equity of greater than 17% for 2026, a step down from this year’s 19.2%, which has led to some cautious reactions from the market. As one analyst noted, “The forecasts are very optimistic but its margin may come under pressure if, as expected, interest rates continue to fall.”
Still, the bank’s acquisition of Evelyn Partners and the resulting increase in assets under management and fee income are seen as positive steps toward diversifying revenue streams. However, with 95% of its revenue in 2025 coming from the UK, NatWest remains heavily reliant on a domestic economy that some consider fragile. That dependence, coupled with the prospect of falling interest rates, has made some investors hesitant despite the bumper dividend and strong earnings.
For now, though, NatWest appears well-positioned, with robust capital buffers, a proven ability to grow profits, and a willingness to invest in technology that’s already paying off. The bank’s leadership is intent on building deeper customer relationships and ensuring NatWest is the bank of choice in growth areas. Whether it can maintain this momentum in the face of economic headwinds and shifting market expectations remains to be seen, but for the moment, shareholders have plenty to celebrate.
As the dust settles on a record-breaking year, NatWest’s journey from crisis-era bailout to profit powerhouse stands as a testament to the power of strategic reinvention—and a reminder that in banking, fortunes can change in a heartbeat.