NatWest Shares Rise After Strong Customer Activity Boosts Results

By Elena Vardon

NatWest Group shares jumped to their highest level since 2008 after the bank raised its guidance for the second time this year and strong customer activity helped third-quarter results beat market views.

The stock rose as much as 6.9% in early exchanges, their highest intraday level in nearly 17 years, before losing some steam.

The U.K. lender on Friday reported quarterly operating pretax profit that rose 30% to 2.18 billion pounds ($2.91 billion), beating the 1.83 billion-pound expectation in a company-compiled consensus.

The domestic bank reported 4.33 billion pounds in total income for the period, ahead of the forecast 4.10 billion-pound result. This was 16% higher than a year prior, buoyed by growth in both net interest income--the difference between what banks earn on loans and pays out on customer deposits--and in revenue from managing client assets as well as its payments and cards operations.

"There's positive momentum across all three of our businesses," Chief Executive Paul Thwaite said, pointing to continued lending growth and stable deposits.

Like its peers, NatWest has structural hedges in place to mitigate the impact of interest-rate moves by the Bank of England, allowing it to spread out tailwinds from higher rates even in a falling rate environment.

"The net interest income momentum will be the key focus of these numbers, once again, topping off a results season that has seen NII beats at all three banks," Jefferies said in a note to clients, referring to earnings results from Lloyds Banking Group and Barclays earlier this week.

On the back of its latest figures, NatWest, which is known for issuing conservative financial targets, said it now expects this year's total income excluding notable items to come in at around 16.3 billion pounds. This compares with its previous guidance of greater than 16.0 billion pounds, and current analysts' expectations of 16.22 billion pounds.

The London-listed group also raised its annual forecast for return on tangible equity--a key measure of profitability--to more than 18.0%, after reporting a better-than-expected 22.3% for the third quarter. Previous guidance was for a return greater than 16.5%, while consensus pencils in 17.3% for the year.

"We remain cautiously optimistic on the outlook, and this is reflected in the activity we are seeing from our customers," finance chief Katie Murray said in a call with reporters.

The main-street bank returned to private ownership earlier this year, 17 years after the government bailed out Royal Bank of Scotland, as it was formerly known before its 2020 rebranding, during the 2008-09 financial crisis.

NatWest is due to set out its guidance for 2026 and share new targets to 2028 at its full-year results on Feb. 13.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

October 24, 2025 05:12 ET (09:12 GMT)