UK-based bank NatWest's shares surge by 5% following a significant increase in its profits
In the third quarter of 2024, NatWest Group demonstrated improved performance compared to the same period in 2023. This positive trend was reflected in higher total income, increased earnings per share, and an improved return on equity.
The bank's operating pre-tax profit for Q3 2024 was £1.7 billion, surpassing analysts' forecasts of £1.5 billion. This strong financial performance contributed to a notable increase in its share price and a reduction in government ownership.
According to the latest financial reports, NatWest's total income for Q2 2025 was 11.9% higher than in the same quarter of 2024. The net interest margin improved, and the return on tangible equity rose by 1.7 percentage points. These trends suggest a continuing positive trajectory from Q3 2024 into 2025.
The earnings per share increased by 28% year-on-year to 30.9p for H1 2025, reflecting substantial profitability growth. This strong financial performance helped NatWest's share price rise by about 1.7% on July 25, 2025, continuing a 50% increase over the prior year. Shareholders responded positively to the bank’s improved income, margin, and earnings guidance.
Importantly, the government’s ownership stake in NatWest Group was fully divested by May 2025. The move to full private ownership followed sustained profitability and robust capital management by the bank. The group also launched a £750 million share buyback program starting in the second half of 2025, alongside increasing the interim dividend by 58%.
NatWest Group provides support to 19 million customers across the UK. Customer activity increased and defaults remained low during this period. Shares in NatWest rose to their highest levels since 2015 due to these results.
The Labour chancellor, Rachel Reeves, stated that a retail share sale of NatWest will not happen. The government's decision not to sell its remaining stake in NatWest was made due to concerns about value for money and potential damage to taxpayers. The CEO of NatWest, Paul Thwaite, stated that the bank is well-placed to succeed for its customers and shareholders in the future.
Sarah Coles, head of personal finance at Hargreaves Lansdown, expressed disappointment that retail investors will be frozen out as NatWest shares are sold off. A retail share sale of NatWest would mean offering discounts worth hundreds of millions of pounds, which would be damaging for taxpayers.
Despite the government's decision, the improved financial performance and positive outlook for NatWest Group bode well for its future success.
Investors may find the improving financial situation of NatWest Group attractive, considering factors such as the bank's increased earnings per share and return on equity, as well as its reduced government ownership. This positively trending finance institution, with a strong net interest margin and a notable increase in total income, might offer opportunities for personal finance investments. Moreover, the bank's launch of a share buyback program and increased interim dividend indicates confidence in its future business growth.
