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# NatWest shares fall 8.4% on its interest income outlook after £2.23 billion quarterly profit
- URL: https://www.theglobalbanker.com/natwest-shares-fall-8-4-on-its-interest-income-outlook-after-2-23-billion-quarterly-profit/
- Published: 2026-10-30T17:10:16.000Z
- Updated: 2026-10-30T18:59:20.000Z
- Description: NatWest Group made £2.23 billion of operating profit before tax in the third quarter and a 21.6% return on tangible equity, but a weaker-than-expected outlook for interest income sent its shares down 8.4% on Friday.
- Author: TGB Editorial Team
- Tags: Banking News, Europe, #newsroom

[NatWest Group](https://www.theglobalbanker.com/rankings/) reported operating profit before tax of £2.23 billion for the third quarter on Friday, up from £2.18 billion a year earlier, with a return on tangible equity of 21.6%. Its shares fell 8.4% on Friday after management gave a weaker-than-expected outlook for interest income, Reuters reported.

Executives told analysts they expect the net interest margin to remain "broadly stable" at 2.5% into 2027, according to Reuters, against consensus expectations for higher growth. Like HSBC and Lloyds, NatWest reaffirmed rather than upgraded its full-year targets. Jefferies analyst Jonathan Pierce said the quarter showed UK banks "tearing off the band-aid" by lowering expectations for interest income growth.

## INCOME RISES, BUT SO DO IMPAIRMENTS

Total income rose 7% from a year earlier to £4.64 billion and net interest income rose 9% to £3.56 billion, according to Proactive Investors. The net interest margin improved to 2.50% from 2.37% a year earlier.

Impairment losses rose to £277 million from £153 million, and the loan impairment rate for the year to date was 21 basis points. The cost-to-income ratio improved to 45.7% in the year to date, 2.1 percentage points lower than a year earlier, helped by about £420 million of gross cost savings as the bank cuts jobs and invests in AI, Reuters reported.

Attributable profit was £1.53 billion, 4.4% lower than a year earlier, according to WealthBriefing. Earnings per share were 19.3 pence. Chief executive Paul Thwaite said the bank had delivered broad-based growth across its three customer businesses, with lending, deposits and assets under management all increasing.

## A CROWDED HOME MARKET

NatWest is one of six groups that lead domestic retail and commercial banking in the [United Kingdom](https://www.theglobalbanker.com/market-united-kingdom/), alongside Lloyds Banking Group, Barclays, HSBC UK, Santander UK and Nationwide, according to TGB's market profile. The balance sheet of UK-resident banks and building societies was £10.7 trillion in July 2026, about 3.6 times GDP.

## LENDING, WEALTH AND CAPITAL

Customer loans excluding central items rose by £8.1 billion in the quarter to £414.3 billion, and customer deposits by £5.8 billion to £453.4 billion. The private banking and wealth arm, which includes Coutts and Evelyn Partners, made £156 million of operating profit, up from £108 million a year earlier, with £1 billion of net inflows and £118 billion of assets under management at the end of September.

The Common Equity Tier 1 ratio rose 30 basis points in the quarter to 13.5%. NatWest now expects risk-weighted assets of around £210 billion at the start of 2027, including the impact of Basel 3.1, and assumes that the Bank of England base rate will rise by 25 basis points to 4% in the fourth quarter.

## THE TGB VIEW

NatWest Group ranks 16th in TGB's table of Europe's largest banks by total assets, with US$961.1bn, behind Barclays in 5th and Lloyds Banking Group in 11th, yet its 2025 return on equity of 13.7% was the highest of the three, against 9.8% at Lloyds and 9.2% at Barclays. On the latest quarter, NatWest's 21.6% return on tangible equity compares with 11.7% at Barclays, although Barclays has the higher CET1 ratio, at 14.2% against NatWest's 13.5%. The next marker NatWest has set is the start of 2027, when it expects risk-weighted assets of around £210 billion including Basel 3.1.

*Related: [UK's NatWest Group posts H1 2026 attributable profit of £3.0 billion; RoTE of 19.7%](https://www.theglobalbanker.com/natwest-group-h1-2026-attributable-profit-3-billion-rote-19-7-percent/)*