London, June 25, 2026, 13:07 (BST)
- Stock is up 1.7% at 658.20p after Berenberg gave it an 860p target in new coverage.
- Target guides to around £16.1 billion more equity value based on the present share count.
- NatWest’s stated first-year loss from a 25-basis-point drop in rates is covered 7.6 times by expected 2026 hedge-income growth.
NatWest Group Plc (LON:NWG) jumped 1.7% to 658.20 pence by 1250 BST on Thursday, trading close to the session high. This comes after Berenberg began covering the stock with a “buy” rating and set an 860p target. NatWest is still down 6.7% from its 52-week high of 705.40p. Google
At 7.97 billion shares, the target values NatWest at around £68.5 billion. That’s £16.1 billion more than its market value at midday, which stood at £52.45 billion. The target is nearly 22% higher than the current 52-week high.
FTSE 100 rises 0.3%, financial and retail shares push London higher The FTSE 100 added 0.3% by 0901 GMT, hitting a one-week high, with the FTSE 250 up 0.7%. Gains in financial and retail stocks supported both indexes.
Berenberg’s Michael Christodoulou puts NatWest as his “top pick among the UK banks” and says the market “remains underappreciated” of its profitability. Christodoulou thinks NatWest delivers around a 20% return on tangible equity, with the shares trading about 25% cheaper than the European banking sector. Investing.com South Africa
NatWest’s latest numbers break down how its earnings get a lift. The £198 billion structural hedge brought in £4.668 billion of income in 2025. The group is looking for about £1.5 billion more hedge income in 2026 and another £1 billion in 2027. If the yield curve drops 25 basis points with the balance sheet unchanged, that knocks £198 million off first-year income—£41 million from the hedge and £157 million from managed margin. The 2026 hedge boost planned comes in at around 7.6 times that static rate hit, but the bank said the measures aren’t directly comparable.
Bank of America Corp (NYSE:BAC) Global Research cut its call for two Bank of England rate hikes in 2026, instead seeing Bank Rate stuck at 3.75%. LSEG data showed traders still pricing in at least one 25-basis-point hike before year-end.
NatWest posted first-quarter income excluding notable items of £4.2 billion and operating profit at £2.0 billion, giving a return on tangible equity of 18.2%. CEO Paul Thwaite said both figures “have increased compared to Q1 2025.” The bank is forecasting 2026 income at the top end of its £17.2 billion to £17.6 billion outlook. Net loans grew by £7.2 billion in the quarter and deposits were up £3.1 billion. NatWest Group Investors
NatWest’s outlook does not factor in its planned £2.7 billion acquisition of Evelyn Partners. The deal, NatWest’s biggest since 2008, would bring in more fee revenue beyond lending. The bank already reported a 20% bump in assets under management and administration for 2025.
High Court ruling cuts one conduct risk for lenders
A High Court judgment on Wednesday tightened conduct risk for banks. Judges said the Financial Ombudsman Service was wrong to take overdraft and credit card complaints outside the six-year limit. NatWest was part of the group that challenged the FOS. The decision doesn’t touch the Financial Conduct Authority’s £9 billion motor-finance redress plan.
Berenberg expects NatWest to return 75% to 80% of its profit in 2026 and 2027. This is split between cash dividends of around 50% and buybacks at 25% to 30%, once NatWest brings back repurchases after this year’s pause. The broker puts the average annual total yield at 8%.
