London, June 19, 2026, 11:14 BST
- NatWest traded at 635.4 pence, down 0.9%, at 11:13 BST, while the FTSE 100 was almost flat.
- The Bank of England voted 7–2 to keep Bank Rate at 3.75%; two policymakers favoured an increase to 4%.
- NatWest’s next scheduled financial update is its half-year results on July 31.
NatWest Group shares fell about 0.9% to 635 pence in Friday morning trade, underperforming the wider market as investors reassessed the path for UK interest rates. Delayed quote data showed a bid-offer spread of 635.2 pence to 635.4 pence.
That matters more for NatWest than for many FTSE 100 companies. The group is focused heavily on UK retail and commercial banking, leaving its earnings sensitive to the domestic economy and net interest margin — the gap between what a bank earns on loans and pays depositors.
J.P. Morgan on Thursday moved its forecast for the next Bank of England rate increase to November from July. It still expects a 25-basis-point move, equal to a quarter of a percentage point, but said policymakers would need firmer growth and labour-market data as inflation rises.
Other economists see no increase this year. Sanjay Raja, Deutsche Bank’s chief UK economist, called the latest run of economic data and easing geopolitical pressure “a rare gift” of time for the central bank. For NatWest, that would remove the prospect of a quick earnings lift from higher rates and put more weight on loan growth and cost control. The Wall Street Journal
The decline was not isolated. At around 11:00 BST, domestic rival Lloyds was down about 1.7%, while Barclays had lost roughly 0.5%. NatWest sat between the two, a pattern that points to a sector-wide rates trade rather than a new concern about its balance sheet.
Separately, Chief Executive Paul Thwaite said artificial intelligence would “absolutely” take over some banking jobs. More than a quarter of NatWest’s workforce is now made up of software engineers, he told The Times CEO Summit, although he gave no target for headcount reductions or near-term savings. The Times
The bank entered this period with solid operating numbers. First-quarter attributable profit reached £1.4 billion and earnings per share rose 15.5% to 17.9 pence. Return on tangible equity — profit measured against shareholder equity excluding intangible assets — was 18.2%.
Analyst expectations remain broadly positive. The median 12-month price target among 15 analysts is 730 pence, with estimates ranging from 600 pence to 840 pence. That wide spread is telling: investors agree NatWest is profitable, but not on how long its rate and credit tailwinds will last.
But the rate story cuts both ways. Higher borrowing costs can support lending spreads, yet they can also weaken credit demand and push more borrowers into difficulty. NatWest booked a £283 million impairment charge in the first quarter, equivalent to 26 basis points of loans, after updating its economic assumptions; softer UK activity combined with stubborn funding costs would put both margins and credit quality under pressure.
For now, the market’s verdict looks cautious rather than alarmed. Until the half-year update, NatWest is likely to continue trading as a close proxy for UK rate expectations, with gilt yields and deposit pricing carrying nearly as much weight as company announcements.
