LONDON, June 18, 2026, 13:13 BST
- NatWest was at 635.8 pence, off 0.34%, as of 13:10 BST. Barclays slipped 0.24%, Lloyds retreated 0.33%.
- Bank of England kept Bank Rate steady at 3.75% as inflation stays at 2.8%. The next rate call is set for July 30.
- NatWest’s outlook for 2026 is based on rates staying at 3.75% through the year. Net interest margin for the first quarter landed at 2.47%. The bank sees annual income coming in at the high end of its £17.2 billion to £17.6 billion forecast.
NatWest Group shares slipped in midday London trade on Thursday. The Bank of England held rates steady, leaving the bank’s earnings assumptions where they were, but there was no new driver for the shares. The FTSE 100 also lost ground as investors looked at the rate path and global market strain.
Why it matters: NatWest has stronger links to the British economy than most international banks. Higher rates have been helping lending margins for a while, but the bank’s managers were ready for this. They had already used a 3.75% rate for their forecasts for the year.
The Monetary Policy Committee kept rates steady at 3.75% with a 7-2 vote. Megan Greene joined Chief Economist Huw Pill in voting for a hike to 4%. George Brown, senior economist at Schroders, said the central bank is “playing for time rather than going on the attack”. He said the “bar for hikes remains high”. The BoE sees inflation above 3.25% late this year. Reuters
Mixed action in UK markets. The two-year gilt yield moved up six basis points to 4.21%. The FTSE 100 dropped 1.1%. Sterling hit a two-month low on the dollar.
NatWest traded much like Barclays and Lloyds, as investors seemed to move the whole UK banking sector together instead of singling out NatWest for something new. Shares barely shifted, with much of the longer period of higher rates already in the price for banks.
NatWest has priced $1.25 billion in senior bonds with a coupon of 4.983%, set to mature in 2032. The deal was slated to close Thursday, and NatWest said the funds will go to its general banking business.
NatWest’s Commercial & Institutional boss Robert Begbie sold 150,000 shares on Wednesday at £6.3281, pulling in about £949,000, according to a regulatory filing. The filing didn’t give a reason for the move.
Paul Thwaite, NatWest’s chief executive, said artificial intelligence will shift the makeup of the bank’s workforce. Right now, more than a quarter of NatWest staff are software engineers. Asked if overall headcount would fall in ten years, Thwaite said: “The honest answer is I don’t know,” but he said some existing jobs would move to AI. The Times
NatWest heads into this stretch with higher profits. The bank posted a 24% jump in 2025 pretax profit to £7.7 billion, put an over-18% target for return on tangible equity for 2028, and said it’s launching a £750 million first-half buyback. NatWest is buying Evelyn Partners for £2.7 billion to build out wealth management and lean less on interest income.
The outlook runs two ways. Higher inflation and more rate hikes might bump up margins but would also hit mortgage demand, pressure borrowers, and lead to more sour loans. If disinflation picks up, credit strains drop but early rate cuts could hurt lending income. NatWest has already booked a £283 million impairment for the first quarter and dropped its 2026 UK growth forecast to 0.4%. “We are confident we will achieve our guidance,” Thwaite said, though he added that the market is still uncertain. Reuters
