NatWest’s Profits Are Soaring – Here’s Why Investors Are Paying Attention!
NatWest Group is making headlines for all the right reasons. The UK banking giant has seen huge stock gains, strong financial growth, and a surge in institutional investor confidence. With the UK government reducing its stake, major players like BlackRock are stepping in, signaling a new era for the bank.
UK Government Steps Back – Institutions Step In
In a major shift, the UK government’s stake in NatWest has dropped to just 5.93%, marking the first time taxpayers are no longer the largest shareholders since the bank’s 2008 bailout. Taking its place, BlackRock has become the biggest stakeholder with a 6.4% share, reinforcing confidence in NatWest’s long-term potential.
This move highlights growing institutional trust in the bank’s financial health and future prospects.
NatWest’s Profits Keep Climbing
NatWest is proving to be a profit machine. In 2024, the bank posted a pre-tax profit of £6.2 billion, edging out the previous year’s £6.1 billion.
The bank’s return on tangible equity (ROTE), a key profitability metric, reached 17.5%, exceeding its own upgraded targets. This impressive performance shows NatWest is managing costs efficiently while continuing to grow.
Stock Performance: A 109% Surge
NatWest’s stock is on fire. Over the past 12 months, shares have soared by 109%, outperforming many of its industry peers.
With strong profits and institutional backing, investor confidence is at an all-time high. However, some analysts warn that future interest rate changes could impact earnings.
Big Plans Under CEO Paul Thwaite
NatWest is not resting on its success. Under CEO Paul Thwaite, the bank is exploring strategic acquisitions to expand its wealth management services. This move is part of a broader push to strengthen its market position and increase revenue streams.
Looking ahead, NatWest has set ambitious targets:
- A return on tangible equity of 15%-16% by 2025
- Over 15% ROTE by 2027
These goals reinforce the bank’s commitment to delivering strong shareholder value while positioning itself for long-term success.
Final Thoughts: Is NatWest Still a Buy?
With soaring profits, increasing institutional interest, and a stock price that’s doubled in a year, NatWest is clearly on a winning streak.
The reduction of government ownership has given the bank more freedom to operate like a traditional private company, which could lead to even greater expansion and profitability.
For investors looking for a strong banking stock with solid growth potential, NatWest is definitely worth watching. The only question now is: Can it keep up this momentum?
