Key facts
- Natwest's pre-tax profit for the first half of 2026 rose 20% to £4.3bn.
- Total income increased 11% to £8.7bn, with net interest income up nearly 13%.
- The bank raised its 2026 income target to £17.9bn.
- Natwest's net interest margin widened by 20 basis points to 2.48%.
- The interim dividend was increased by 26% to 12p per share.
Natwest has upgraded its income targets for the second consecutive quarter, announcing a 20% increase in pre-tax profit to £4.3bn for the first half of 2026, surpassing expectations. The bank's total income grew 11% to £8.7bn, primarily driven by an almost 13% rise in net interest income to £6.9bn. This performance has led Natwest to forecast a total income of £17.9bn for 2026, up from its previous guidance. The bank's net interest margin widened to 2.48%, benefiting from higher deposits. Despite a 2.6% increase in costs to £4.1bn, Natwest improved its cost-to-income ratio to 46%. Shareholders are set to receive a 26% higher interim dividend of 12p per share, amounting to a £955m payout. The acquisition of Evelyn Partners for £2.7bn in February is expected to contribute a £275m tailwind to income and shift £69bn in assets under management to Natwest, boosting its total assets to approximately £127bn. Wealth income also saw a significant rise, increasing over 10% to £595m.
This strong performance from Natwest follows a trend of robust earnings among UK banks. Lloyds Banking Group reported a £4.3bn pre-tax profit in the first half, exceeding its internal target, while Barclays announced a 30% profit increase in the second quarter. These results have prompted calls from the Trades Union Congress and some Members of Parliament for a new tax on the banking sector. However, Barclays CEO CS Venkatakrishnan cautioned against such a move, emphasizing the sector's role in lending to businesses and households.