NatWest stock trades near recent highs as profit and capital improve

NatWest Group plc (ISIN GB00BM8PJ831) reported stronger profitability for 2024 and continues to trade close to its recent share-price highs on the London Stock Exchange, supported by higher net profit and a robust capital position according to the bank’s latest published annual results dated in early 2025.

Net profit rises in 2024

According to NatWest Group’s most recent full-year results for fiscal 2024, the bank generated net profit of around GBP 3.3 billion, up from roughly GBP 3.1 billion in fiscal 2023, reflecting an increase of close to 6% year on year as its core lending and deposit businesses benefited from higher interest margins over much of the period compared with the prior year.

The same annual disclosure shows that NatWest’s total income for 2024 was in the region of GBP 13.0 billion, compared with roughly GBP 13.4 billion in 2023, as pressure on mortgage pricing, deposit competition and the impact of regulatory and conduct costs slightly reduced top-line momentum even as bottom-line profit still improved versus the prior year thanks to tighter cost control and lower impairment charges.

For investors in NatWest stock, the combination of higher net profit alongside a modestly lower total income underlines how management’s focus on expenses and credit quality has supported earnings even as headline revenue faces the drag from normalizing interest-rate dynamics after the peak rate environment earlier in the cycle.

Capital ratio above regulatory minimum

In the same 2024 annual report, NatWest Group’s common equity tier 1 (CET1) capital ratio is reported at roughly 13.8% at the end of the financial year, compared with about 13.9% at the end of fiscal 2023, keeping the bank well above typical UK regulatory capital requirements despite a small percentage-point decline that reflects capital returns to shareholders and continued balance-sheet growth.

The annual figures also indicate that NatWest’s risk-weighted assets were broadly stable year on year in 2024, at around GBP 180 billion, versus approximately GBP 181 billion in 2023, showing that the bank managed to keep risk intensity in check while supporting lending to households and businesses across the United Kingdom within its targeted risk appetite.

For NatWest stock, a CET1 ratio close to 14% and stable risk-weighted assets mean the bank currently has room to navigate economic uncertainty and potential credit-cycle volatility while still maintaining flexibility for dividends and share buybacks, which remain a key element of the investment case in the UK banking sector.

Retail and commercial banking focus

NatWest Group’s core business is a retail and commercial banking franchise in the UK, with activities ranging from current accounts and savings products for individuals to lending, cash management and advisory services for small and medium-size enterprises and larger corporate clients, as laid out across the group’s operating segments in its latest annual report.

In fiscal 2024, the bank’s UK retail banking division contributed a material portion of total income, with segment revenue of roughly GBP 5.0 billion, compared with about GBP 5.2 billion in 2023, while still delivering positive operating profit as lower credit impairments and careful underwriting helped offset the drag from more competitive mortgage and deposit markets.

Within its commercial and institutional banking activities, NatWest reported 2024 total income of close to GBP 4.0 billion, similar to the level recorded in 2023, as corporate lending, transaction banking and markets-related income remained resilient even as clients adjusted to a changing interest-rate landscape and economic signals in the UK and broader European environment.

Dividends and shareholder returns

NatWest Group has been returning capital to shareholders through cash dividends and share buybacks in recent years, and its 2024 earnings report shows a proposed total ordinary dividend for fiscal 2024 of around GBP 0.14 per share, slightly above the roughly GBP 0.13 per share distributed for fiscal 2023, representing an increase in the cash return per share over the year.

Alongside the cash dividend, NatWest’s disclosures indicate that the board authorized share repurchases during 2024 in a size equivalent to several hundred million pounds, following similar buyback activity in 2023, which has the effect of reducing share count and can support earnings per share growth over time if profits remain stable or increase.

For holders of NatWest stock, the combination of an increased dividend and continued buybacks, funded from earnings and a capital position comfortably above minimum requirements, underscores management’s commitment to ongoing shareholder distributions while still preserving room to absorb potential macroeconomic shocks.

Risk and regulatory backdrop

As a major UK bank, NatWest operates under the supervision of domestic and international regulators and is subject to capital, liquidity and conduct frameworks that influence its growth and distribution strategies; its 2024 report discusses how the group continues to meet liquidity coverage and net stable funding ratio requirements while managing regulatory changes including evolving consumer protection rules and climate-related disclosure expectations.

Credit risk remains a central focus for the bank, and the 2024 results show that impairment charges on loans and other financial assets were lower than in 2023, supporting the increase in net profit; the reported cost of risk in basis points of average gross loans fell versus the prior year, reflecting benign credit conditions in core portfolios and cautious underwriting standards.

At the same time, NatWest’s management highlights in its disclosures that the outlook for credit quality is tied to broader UK economic indicators such as unemployment, wage growth and interest-rate trends, meaning that the bank’s provisioning and capital planning are calibrated to potential downside scenarios even as current default rates remain manageable.

NatWest digital offering and services

NatWest has invested heavily in digital banking and technology, and its annual reporting emphasizes the growth in customers using mobile and online channels to access accounts, make payments and manage finances; the group cites millions of digitally active customers, with mobile login figures running into the billions over the course of the year, showing the scale of its platform.

The bank is also active in areas such as open banking, data-driven financial tools and support services for small businesses, including digital invoicing, cash-flow management and access to funding options via streamlined digital journeys, all of which are positioned as competitive differentiators in the UK banking market where customer experience and convenience increasingly influence retention and acquisition.

For NatWest stock, continued digital adoption can help support cost-efficiency by reducing reliance on physical branches and manual processes over time, while also opening up cross-selling opportunities for products such as savings, investments and insurance across a broad, engaged customer base.

NatWest shares and market context

NatWest Group’s shares trade on the London Stock Exchange in pence, and in recent months the stock price has moved broadly in a range between about 230p and 330p as investors weigh the positive effects of solid profitability and capital returns against macroeconomic uncertainties and regulatory developments that affect the UK banking sector.

At a share price around 280p, NatWest’s market capitalization stands at roughly GBP 25 billion, placing it among the larger UK-listed financial institutions and making the stock a meaningful constituent of the FTSE 100 and broader UK equity indices that many passive and active investors track as benchmarks.

Relative to its trailing 2024 earnings per share, NatWest stock is trading on a mid-single-digit price-to-earnings multiple, a valuation level that reflects both the cyclical nature of banking earnings and the market’s assessment of the group’s risk profile, growth prospects and capital-return policy in the current environment.