NatWest reported a 29 percent jump in second-quarter profits to £2.3 billion, beating analyst expectations, as its chief executive warned that taxing banks would harm lending and economic growth.
CEO Paul Thwaite pushed back against calls for a windfall tax on the sector. "If you want strong economies, you need strong banks," he said, adding that "it's really important to have consistency of policies so businesses can plan."
The results follow bumper earnings reports from Lloyds Banking Group and Barclays earlier this week, intensifying pressure from the Trades Union Congress and Labour's left wing on the government to impose a new levy on the sector. Barclays CEO CS Venkatakrishnan also opposed the idea, arguing that for every £1 of capital, the bank lends £8 to £10 to businesses and households.
Shares in NatWest rose 4 percent after the results were published, as the lender raised its full-year forecast and said it would consider bringing forward share buybacks.
First-half performance
For the first six months of 2026, NatWest reported pre-tax profit of £4.3 billion, up 20 percent from £3.6 billion a year earlier, surpassing analyst estimates of £4 billion. Total income for the period rose 11 percent to £8.7 billion.
Net interest income, the difference between what the bank charges borrowers and pays savers, climbed 12.6 percent to £6.9 billion.
NatWest lifted its full-year total income forecast to £17.9 billion, up from a previous range of £17.2 billion to £17.6 billion, and said it expects a £275 million contribution from integrating wealth manager Evelyn Partners. The bank also raised its dividend by 26 percent to 12p per share, with a £955 million payout earmarked for shareholders.
Wealth push
NatWest completed the £2.2 billion acquisition of Evelyn Partners in June, its largest deal since 2008, as part of a strategic move to expand its wealth management operations beyond its private banking arm Coutts. The transaction required the bank to pay off £674 million of Evelyn Partners' debt and £11 million in management team loans, and generated £28 million in acquisition costs.
The private banking and wealth management division recorded net inflows of £2 billion in the first half, with wealth income rising more than 10 percent to £595 million. Across its three divisions, operating profit rose 16 percent to £1.73 billion in retail banking, 18 percent to £212 million in private banking and wealth, and 15 percent to £2.28 billion in commercial and institutional banking.
Sector profits draw scrutiny
Lloyds reported second-quarter profit of £2.3 billion, above analyst forecasts of £2.1 billion. Barclays posted a 30 percent increase in quarterly profit to £3.3 billion and set aside £1.3 billion for its bonus pool in the first half, up from £1 billion a year earlier.
Richard Hunter, head of markets at Interactive Investor, noted that NatWest's share price had risen 29 percent over the past year against a 19 percent gain for the wider FTSE 100, and by 110 percent over two years, and said the market consensus of NatWest as a "strong buy" would "no doubt stay in place."
Chris Beauchamp, chief market analyst at IG, said the results were part of what "looks like a fully-rejuvenated banking sector, with further room for share price growth even after the big gains of the last two years."
