NatWest (NWG.L) has reported a 24% jump in operating profit for the year, in annual results that beat expectations.

Operating profit before tax for the year came in at £7.71bn, topping expectations of £7.49bn, according to consensus estimates provided by the bank. For the fourth quarter, this figure was £1.94bn, also besting forecasts of £1.72bn.

Fourth-quarter profit came in at £1.48bn, compared to expectations for £1.24bn. For the year, profit was up 21% year-on-year at £5.83bn, also topping estimates of £5.59bn.

Net interest income (NII) – the difference between what the bank pays out to savers and receives from borrowers in interest – came in at £3.44bn in the fourth quarter, compared to expectations of £3.33bn. For the year, NII was up nearly 14% to £12.82bn, against forecasts of £12.72bn.

This contributed to a total income figure of £4.32bn for the fourth quarter and £16.64bn for the year, beating expectations of ££4.21bn and £16.53bn respectively.

This drove a 21% rise in profit attributable to shareholders to £5.48bn, with a 27% increase in earnings per share to 68p and a return on tangible equity (RoTE) of 19.2%.

Paul Thwaite, CEO of NatWest, said: “It is clear our strategy is working, and we are delivering consistently. We are raising our ambition and sharpening our strategic focus, with stretching new targets in place.

“We must now make the most of the investment we’ve made to become even more productive, build deeper customer relationships and ensure we are the bank of choice in the areas we want to grow.”

For 2026, NatWest said it expected total income to be in the range of £17.2bn to £17.6bn and to deliver RoTE of greater than 17%.

The bank proposed a final dividend of 23p per share, bringing its total for the year to 32.5p, which was 51% higher than in 2024.

At the start of the week, it was announced that NatWest had agreed to buy wealth manager Evelyn Partners for £2.7bn.

This will mark NatWest’s first major acquisition since the government sold its remaining stake in the bank last year.

In the acquisition announcement, NatWest also revealed that it would undertake a share buyback worth £750m.

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Despite the bank’s strong set of results, NatWest shares edged 0.5% lower in early trading on Friday, though the stock is up 35% over one year.

Richard Hunter, head of markets at Interactive Investor, said: “This is a sparkling set of numbers by any standards, as NatWest continues the relentless recovery from its historic woes.”

“As far as investors are concerned, NatWest is in a sweet spot,” he said. “The government shackles have gone, the group has prodigious amounts of cash and acquisitions to boost growth further are playing out.”

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Investors should be pleased with these results, but there’ll still be a lingering question mark around the price being paid for the Evelyn Partners deal that sent shares tumbling earlier in the week.”

“Buybacks are still on the cards, but at a reduced level for the time being,” he said. “The push for lucrative non-interest income shouldn’t come as a surprise, and while the price may feel lofty, the strategic rationale looks solid.”

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