NatWest Group (LON: NWG) Stock Near Record Highs After BoE Stress Test – Latest News, Forecasts and 2026 Outlook (5 December 2025)

NatWest Group plc (LON: NWG; NYSE: NWG) has quietly turned into one of the strongest-performing large European banks of 2025. As of 4 December, the NatWest share price on the London Stock Exchange closed at 625.8p, up about 52% over the past year and sitting less than 3% below its new 52‑week high of 641.4p set on 3 December. ^[1]

In New York, the ADRs finished at $16.68 on 4 December, near their own 52‑week high of $16.94 and up roughly 57% year‑on‑year. ^[2]

That rally is being powered by three big storylines:

Full exit from UK government ownership in May 2025
Record profitability and upgraded guidance after strong Q3 2025 results ^[3]
A clean bill of health in the Bank of England’s 2025 stress tests, followed by a regulatory easing of capital requirements for UK banks ^[4]

At the same time, a fresh Goldman Sachs downgrade to “Neutral” highlights that much of the good news may now be in the price. ^[5]

Below is an in‑depth look at the latest NatWest news, fundamentals, analyst forecasts and key risks as of 5 December 2025.

NatWest share price today: near the top of its 52‑week range

According to the Financial Times summary page, NatWest Group trades at: ^[6]

Price: 625.8p (LSE, as of 4 December 2025, 14:10 GMT)
52‑week range: 369.0p (10 Jan) – 641.4p (3 Dec)
1‑year share price change: +51.7%
Market capitalisation: ~£49.8bn
P/E (trailing 12 months): 9.68x
Dividend per share (2025 expected): 25p
Dividend yield (trailing): ~4.0%

On the NYSE, Investing.com data show NWG closing at $16.68 on 4 December, with a 52‑week range of $9.16–$16.94 and a one‑year total price gain of about 56.9%. ^[7]

In other words, NatWest is:

Trading near multi‑year highs
Re‑rated from the deep‑value levels investors had become used to while the UK government was still a major shareholder
Still on a single‑digit to low‑double‑digit earnings multiple with a high single‑digit “total yield” once buybacks are included ^[8]

From bailout to full privatisation: the 2025 turning point

On 30 May 2025, HM Treasury confirmed it had sold its remaining stake in NatWest Group, ending nearly 17 years of public ownership that began with the £45.5bn bailout of the then‑RBS during the 2008 financial crisis. ^[9]

A few weeks later, NatWest marked its new life as a fully private bank with a £1.5bn capital return to shareholders, comprising: ^[10]

An interim dividend of 9.5p per share (worth about £768m)
A £750m share buyback programme

The Guardian and Reuters both noted that this “freedom dividend” followed stronger‑than‑expected H1 profits and helped push the share price to levels not seen since before the global financial crisis. ^[11]

The government exit removed a long‑standing share overhang and political stigma, and it is clearly one of the catalysts behind the re‑rating of the stock in 2025.

Earnings momentum: Q3 2025 beat and upgraded guidance

Strong Q3 2025 numbers

NatWest’s Q3 2025 results, released on 24 October, showed another step‑up in profitability. Management highlighted: ^[12]

Total income (ex‑notable items): £4.2bn in Q3, up £0.2bn quarter‑on‑quarter
Attributable profit: £1.6bn in the quarter
Return on tangible equity (RoTE): 22.3% in Q3
Loan growth: Net customer loans (excluding central items) up by £4.4bn in the quarter
Liquidity: Average Liquidity Coverage Ratio of 148%
CET1 capital ratio: 14.2% at 30 September 2025

The statutory results RNS shows total group income of £4.33bn in Q3 2025, up 8.2% on Q2 and 15.7% year‑on‑year, with both net interest income and non‑interest income growing double‑digits versus 2024. ^[13]

Reuters summarised the quarter as a 30% rise in pre‑tax operating profit to £2.2bn, ahead of analyst expectations, and stressed that NatWest largely sidestepped the UK motor‑finance mis‑selling charges that have hit some peers. ^[14]

Guidance pushed to the top of the sector

On the back of this performance, NatWest raised its 2025 return target:

In July (H1 results) it upgraded 2025 RoTE guidance to “greater than 16.5%”, with income (ex‑notable items) expected to be above £16bn. ^[15]
In October (Q3 slides) it strengthened this further, guiding for RoTE of “greater than 18%” in 2025, income around £16.3bn, and a loan impairment rate below 20 basis points. ^[16]

That makes NatWest’s targeted RoTE one of the highest among major UK and European banks, something Reuters also emphasised in its coverage. ^[17]

Management has also signalled that new targets for 2028 and formal 2026 guidance will be introduced with the full‑year 2025 results on 13 February 2026, keeping the market’s focus firmly on medium‑term returns and capital distribution. ^[18]

Capital strength and the 2025 Bank of England stress test

On 2 December 2025, the Bank of England published the results of its 2025 stress test of major UK lenders. NatWest’s own RNS stated that under the severe downside scenario, its: ^[19]

Low‑point CET1 ratio would fall to 11.1% (vs. an actual 13.6% at end‑2024)
Low‑point Tier 1 leverage ratio would be 4.7% (vs. 5.0% actual)

Both remained comfortably above the BoE’s stress minimum requirements, meaning NatWest would not need to take strategic actions such as cutting lending or cancelling distributions even in the adverse scenario. ^[20]

BoE eases capital rules for UK banks

The stress‑test outcome fed directly into the BoE’s first major loosening of UK bank capital rules since 2008. On 2 December, the Financial Times reported that the BoE’s Financial Policy Committee cut its benchmark Tier 1 capital requirement for large UK banks from 14% to 13%, after concluding that even in the stress scenario, banks would still hold around £60bn of capital above minimums. ^[21]

The message from regulators:

UK banks (including NatWest) are robustly capitalised
They are being nudged to “use their capital resources” to support lending and, by implication, shareholder distributions ^[22]

For NatWest, already running a CET1 ratio of 14.2% with a management target range of 13–14%, this gives extra flexibility to balance growth, buybacks and dividends over the next few years. ^[23]

Rate cuts on the horizon: what the macro backdrop looks like

The Bank of England base rate currently stands at 4.0%, after a series of cuts from 5.25% since 2023. ^[24]

A Reuters poll of economists in November 2025 found that nearly 80% of respondents expect: ^[25]

A 25bp cut to 3.75% at the BoE’s meeting on 18 December 2025
Another cut to 3.5% in Q1 2026

For NatWest, this mix is nuanced:

Lower rates can pressure net interest margins on deposits over time
But they may support credit demand and reduce default risk as mortgage and loan costs ease

So far, NatWest has managed to grow net interest income and loan books even as rates have come off their peak, with Q3 results showing double‑digit income growth versus 2024. ^[26]

Strategy and deal flow: from fintech Bourn to a potential Cushon sale

Strategic investment in Bourn

In late November and early December 2025, NatWest announced that it is taking a minority stake in Bourn, a London‑based fintech that offers a data‑driven alternative to the traditional SME overdraft. Multiple reports (Sky News, Finextra, UKTech News and others) say Bourn raised £3.5m in a funding round that included NatWest as a strategic investor. ^[27]

Bourn’s Flexible Trade Account aims to give small and medium‑sized enterprises real‑time access to secured working capital embedded directly into their banking or finance platforms — a natural fit with NatWest’s push into embedded finance for business customers. ^[28]

This dovetails with NatWest’s Q3 commentary about using technology and partnerships to widen its proposition for business and private‑banking clients, as well as its broader ambition in “banking‑as‑a‑service” through NatWest Boxed. ^[29]

Exclusive talks to sell Cushon stake

On 28 November, Reuters reported that NatWest is in exclusive talks to sell its 85% stake in workplace pension provider Cushon to Willis Towers Watson, potentially valuing Cushon at over £150m. ^[30]

NatWest only acquired its majority stake in Cushon in 2023, but under CEO Paul Thwaite the bank has repeatedly signalled a focus on simplifying the group and divesting non‑core assets, while channelling capital into core retail, business banking and targeted fintech partnerships like Bourn. ^[31]

Taken together, the Bourn investment and potential Cushon exit reinforce a consistent theme: NatWest is tilting its portfolio towards scalable, capital‑light fee and technology businesses while streamlining legacy holdings.

Dividends, buybacks and the “total yield”

NatWest has become one of the more generous income names in the FTSE 100:

H1 2025 saw total distributions of around £1.5bn, combining the 9.5p interim dividend and a £750m share buyback. ^[32]
The group’s own slides reaffirm a target ordinary dividend payout ratio of around 50% of attributable profit, with surplus capital returned via buybacks. ^[33]
FT data show an annualised 2025 dividend of 25p per share, implying a dividend yield of about 4.0% at the current 625.8p share price. ^[34]

On top of this cash yield, the ongoing buyback adds a buyback yield of roughly 3–4% depending on the final size of 2025–26 programmes, taking the total shareholder yield close to the high single digits. ^[35]

That capital‑return profile is one of the main reasons many analysts still see NatWest as attractive despite the sharp share‑price recovery.

Analyst ratings and price targets: “Moderate Buy” with modest upside

MarketBeat’s aggregation of City and Wall Street coverage (for the LON: NWG line) shows that, as of 5 December 2025: ^[36]

Consensus rating: Moderate Buy
Number of analysts: 6
- 4 × Buy
- 2 × Hold
Average 12‑month price target:666.67p
Target range: 550p (low) – 765p (high)
Implied upside from 625.8p: about 6.5%

Recent notable moves include: ^[37]

Citigroup boosting its target from 690p to 765p with a Buy rating (2 December 2025)
JPMorgan reiterating Overweight with a 730p target (2 December 2025)
Goldman Sachs downgrading NatWest from Buy to Neutral on 4 December, with a GBP 6.65 (665p) target, citing a strong year‑to‑date rally, P/E re‑rating and limited further upside at current levels

Goldman notes that NatWest has re‑rated from around 7x to 9x forward earnings, with consensus 2026 net profit estimates up 30% since October 2024 and their own forecasts up 17%. It still expects NatWest to generate a 2026 RoTE of about 18%, around 3 percentage points above the European banking average — but argues the stock is now “broadly fairly valued.” ^[38]

Earnings and growth forecasts for 2025–2026

US‑focused data provider StockAnalysis, using consensus figures for the NYSE‑listed ADR, shows expectations for NatWest’s financial trajectory: ^[39]

Revenue 2024: $14.34bn
Revenue 2025 (this year): $16.79bn (≈+17%)
Revenue 2026: $17.87bn (≈+6.5%)
EPS 2024: $0.53
EPS 2025: $0.64 (≈+21%)
EPS 2026: $0.72 (≈+12%)

These forecasts align well with NatWest’s own guidance of income excluding notable items around £16.3bn in 2025 and RoTE above 18%, and with its medium‑term ambition of RoTE above 15% by 2027. ^[40]

If those numbers are delivered, current valuations of roughly 9.5–10x trailing earnings and around 4% dividend yield do not look demanding, but they are also no longer the deep‑value multiples investors saw when the government stake was still overhanging the share register. ^[41]

Key risks: what could go wrong from here?

Even with strong momentum, there are several risks investors in NatWest stock need to keep in mind:

Interest‑rate and margin risk
- Faster‑than‑expected BoE cuts towards 3.5% in early 2026 could compress deposit margins more quickly than loan yields reset, pressuring net interest income. ^[42]
Regulatory and political risk
- The UK has a history of imposing additional bank levies and surcharges. Reuters has already flagged concerns in the sector about potential future tax changes aimed at plugging budget gaps. ^[43]
UK macro and credit quality
- NatWest is heavily exposed to UK households and SMEs; a deeper‑than‑expected downturn in growth, housing or employment could push impairments above the bank’s guidance of <20bp. ^[44]
Competition and technology
- UK banking remains fiercely competitive, with challenger banks and fintechs attacking high‑margin niches. NatWest is responding via partnerships (Bourn) and its own NatWest Boxed platform, but execution risk remains. ^[45]
Valuation risk after a big rerating
- With the share price up more than 50% over 12 months and now near record highs, sentiment is vulnerable to any disappointment on earnings, capital returns or the macro‑rate path — exactly the concern behind Goldman Sachs’ move to Neutral. ^[46]

Bottom line: NatWest on 5 December 2025

As of 5 December 2025, NatWest Group looks like:

A fully privatised UK retail and commercial bank generating top‑tier returns and significant capital returns
Trading near its 52‑week high and on a mid‑single‑digit implied upside to consensus price targets
Benefiting from a friendlier regulatory backdrop after the BoE stress tests and capital‑rule easing
Still offering a roughly 4% cash dividend yield plus meaningful buyback support

The flip side is that NatWest is no longer obviously cheap. The valuation re‑rating, the Goldman downgrade, and the prospect of rate cuts all suggest that the easy part of the trade may be behind it. Future returns are likely to depend on whether management can sustain >18% RoTE, keep credit costs low as rates fall, and continue to grow fee and fintech‑driven revenues. ^[47]

For investors and traders tracking NatWest Group stock today, the story is no longer about survival or political overhang — it’s about how long a high‑return, high‑distribution UK bank can stay on that pedestal in a world where both rates and growth are shifting under its feet.