NatWest Group | Europe 20% ROTE 2026-2028E

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M

Idea

July 31, 2026 03:46 PM GMT

Morgan Stanley Europe S.E., Madrid Branch+

NatWest Group | Europe

Alvaro Serrano

Equity Analyst

20% ROTE 2026-2028E

Morgan Stanley & Co. International plc+

Almario Sulaj

What’s Changed

Research Associate

NatWest Group (NWG.L)

From

To

Price Target

740p

750p

NatWest Group (NWG.L, NWG LN)

Post results we raise our EPS 1-2% for 2027/2028E, driven by

3% higher Non-Interest Income in C&I and Wealth. We factor in a

£500mn share buyback announcement by year-end, which

would put the bank at a 12.6% pro forma CET1, including Basel

3.1. We are Equal-weight the stock.

Banks | United Kingdom

Loan growth keeps our NII unchanged. NII was lighter than expected; however,

Fiscal Year Ending

with loan growth again strong and accelerating in C&I, it more than compensates for

EPS (p)**

Prior EPS (p)**

EPS (p)§

P/E

DPS (p)

Div yld (%)

P/tang BV

Tang BVPS (p)

Return on avg tang eqty

(%)

our more cautious assumptions on deposit growth and mix. We are assuming 100bp

mix deterioration per year, more than offset by loan growth and the hedge, which

leaves us with a 10.4% NII growth in 2026E and 7.5/4.4% in 2027/28E

Guidance now includes Evelyn. We increase the contribution from Evelyn to reflect

the £275mn 2H guidance provided by the company, and for 2027, we assume 10%

growth in the business as revenue synergies start to kick in, both of which drive 3%

upgrades to non-NII in 2027/28E. We are more cautious on the rest of the NonInterest income lines going forward, given the strong markets performance in recent

Stock Rating

Industry View

Price target

Shr price, close (Jul 30, 2026)

Up/downside to price target (%)

52-Week Range

Mkt cap, curr (mn)

Avg daily trading value (mn)

Equal-weight

Attractive

750p

684p

10

705-500p

£81,817

£141

12/25 12/26e 12/27e 12/28e

70.6

62.9

9.23

32.5

5.0

1.70

384

19.7

75.5

72.2

72.6

9.05

37.0

5.4

1.84

373

20.0

79.9

79.2

83.3

8.55

42.0

6.1

1.68

406

20.5

87.3

86.0

91.4

7.83

45.0

6.6

1.54

443

20.6

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

…