LONDON (12 December 2025) — NatWest Group Plc stock (LSE: NWG, NYSE: NWG) is ending the week with investors weighing a familiar trio of drivers for UK bank shares: capital returns (buybacks and dividends), strategic simplification (asset sales), and the interest-rate path heading into 2026.
NatWest shares were around 623p at the close on Friday, 12 December 2025, leaving the stock near recent highs and within striking distance of its 52-week peak. [1]
What’s different this week is not a single blockbuster earnings print — NatWest’s next major financial update is still a couple of months away — but a series of incremental signals that matter for bank investors: a deal to sell its majority stake in pensions fintech Cushon, continued share repurchases, and a macro backdrop increasingly dominated by expectations of a Bank of England rate cut next week. [2]
NatWest stock today: the quick read on price action
NatWest closed Friday around 623p, up modestly on the session. [3] FT market data put the stock within a 52-week range roughly spanning the high-300s to the mid-600s (in pence), underscoring how far UK bank sentiment has recovered versus the post-crisis decade. [4]
The key point for readers tracking NatWest Group Plc stock into year-end: the shares have re-rated as investors became more comfortable with (1) the bank’s capital strength, (2) a simpler UK-focused business model, and (3) the scale of potential shareholder distributions when profits stay resilient.
That re-rating is now being tested by a new question: what happens to UK bank earnings power if rate cuts arrive faster than previously expected?
The big company story this week: NatWest agrees Cushon sale to WTW
NatWest confirmed it has reached an agreement for WTW (Willis Towers Watson) to acquire NatWest’s ~85% stake in Cushon, a workplace savings and pensions fintech. The transaction is expected to complete in the first half of 2026, subject to regulatory approval. [5]
Why the Cushon deal matters for NatWest shareholders
For equity investors, the Cushon sale is important less for near-term earnings and more for what it says about strategy:
- Simplification and focus: NatWest has been explicit about streamlining and concentrating on core franchises. Exiting a fintech investment — while retaining a referral relationship — fits that playbook. [6]
- Capital discipline: Even without disclosed terms, selling a non-core stake can reduce complexity and free up management attention, while potentially improving capital flexibility.
- A “grown asset” being handed off: NatWest said Cushon increased customers from ~500,000 to ~730,000 and grew assets under management/administration from £1.7bn to nearly £4bn during NatWest’s ownership period. [7]
WTW framed the acquisition as a way to strengthen its position in UK defined-contribution master trusts, adding nearly £4bn in assets and ~730,000 members from Cushon, alongside its existing LifeSight platform. [8]
What the market heard: “focus on the core, keep distribution optionality”
The referral arrangement is a subtle but meaningful detail. NatWest can still offer workplace pension access to business clients without carrying ownership risk and operational overhead — essentially keeping distribution while reducing balance-sheet and execution complexity. [9]
Capital returns in focus: NatWest buybacks keep ticking
NatWest’s share buyback remains one of the stock’s central pillars. This week the bank disclosed another tranche of share repurchases under its ongoing programme (roughly 857k shares in a single disclosed day of activity), a reminder that NatWest continues to deploy capital to reduce share count. [10]
For investors, buybacks matter in two ways:
- Mechanical EPS support: Fewer shares outstanding can lift earnings per share even if profits are flat.
- A “signal” of confidence: Banks typically only sustain buybacks when they believe capital buffers are comfortably above requirements and credit quality is behaving.
NatWest has been pairing that buyback story with a dividend posture as well. Earlier in 2025, the bank announced a 9.5p interim dividend and a £750m share buyback alongside upgraded guidance. [11]
Balance sheet and capital strength: stress tests and an AT1 redemption
Two additional capital-related developments are feeding into NatWest’s equity narrative as 2025 winds down: (1) stress-test outcomes and (2) capital structure housekeeping.
1) Bank of England stress test: NatWest remained above hurdles
NatWest noted that in the Bank of England’s 2025 stress test scenario, the group’s low-point CET1 ratio would have been 11.1%, versus an actual 13.6% at December 2024; and the low-point Tier 1 leverage ratio would have been 4.7% versus 5.0% actual — remaining “significantly ahead” of the stress minimum requirement, such that no strategic management actions would be required. [12]
At a system level, the Bank of England said the UK’s largest lenders (including NatWest) cleared the stress tests without needing to raise capital. [13]
2) BoE shifts the tone on capital requirements
In a move investors quickly noticed, the BoE lowered its benchmark for tier-one capital requirements from 14% to 13%, with implementation expected in January 2027, as confidence in bank resilience increased. [14]
This does not automatically translate into immediate extra distributions, but it reinforces the broad direction of travel: UK banks are being treated as structurally stronger than in prior cycles, which supports the valuation case for well-capitalised names.
3) NatWest to redeem $1.5bn of AT1 capital notes
NatWest also disclosed it will redeem $1.5bn of 6.0% perpetual subordinated contingent convertible (AT1) capital notes on 29 December 2025, at par plus accrued interest, and then cancel them. [15]
According to the related filing, the bank expected the redemption to add about 5 basis points to CET1, largely due to FX movements since issuance (a modest but positive technical tailwind). [16]
The macro factor driving bank stocks now: where UK rates go next
For NatWest and other UK lenders, the next big external catalyst is the Bank of England meeting on 18 December.
A Reuters poll published this week pointed to an expected 25 bp cut to 3.75% on 18 December, with economists also anticipating another cut in Q1 2026 and a potential trough around 3.25% by Q3 2026. [17]
At the same time, UK economic data released Friday showed the economy unexpectedly contracted by 0.1% in October, reinforcing the market narrative that monetary policy may need to ease to support growth. [18]
Why rate cuts can be both good and bad for NatWest
Bank investors often treat “lower rates” as a simple negative (pressure on net interest margins). The reality is more nuanced:
- Headwind: Falling rates can compress margins on certain lending books, and reduce interest income on deposits and liquid assets.
- Tailwind: Easier policy can support mortgage demand, lower refinancing stress, and help keep credit losses contained if the economy stabilises.
Mortgage competition is already intense. Industry coverage this month highlighted fresh mortgage pricing moves by lenders including NatWest, signalling a “price war” dynamic that can shift volumes but also squeeze profitability if it becomes too aggressive. [19]
What analysts are saying about NatWest stock: forecasts, targets and the debate
Analyst views on NatWest have been active into December, reflecting how quickly the share price has risen.
A notable recent call: Goldman Sachs moves to Neutral
One market-moving broker action in early December: Investing.com reported that Goldman Sachs downgraded NatWest to Neutral (from Buy), arguing valuation had become fairer, while still expressing a constructive view of profitability and capital generation (including an expectation of strong returns on tangible equity into 2026). [20]
Other banks have gone the other way
MarketBeat coverage this month pointed to upgrades from some brokers (including mention of a Citigroup upgrade), with consensus targets clustering in the mid-600s pence — although figures vary by data provider and covered analyst set. [21]
A longer-term perspective from credit analysts
An S&P Global Ratings update dated 9 December said it was not a rating action, but reiterated investment-grade ratings and framed NatWest’s “deep U.K. franchise,” strong earnings and disciplined balance sheet as supportive factors — while also highlighting the obvious structural risk: geographic concentration in the UK. [22]
S&P also noted NatWest’s business mix across retail, commercial and private banking, and discussed profitability metrics (including a reported RoTE in 2025 that benefited from non-recurring items) while pointing to management expectations of RoTE above 18% for the full year 2025. [23]
The fundamental backdrop: NatWest’s own guidance remains upbeat
NatWest’s last major earnings update (Q3) materially shaped today’s valuation debate. In October, Reuters reported NatWest’s Q3 profit rose strongly and the bank upgraded guidance, lifting optimism that it could deliver one of the higher returns among major UK lenders. [24]
NatWest has stated it expects income excluding notable items around £16.3bn for 2025 and a return on tangible equity greater than 18% (based on its then-current assumptions). [25]
And importantly for forward-looking investors: NatWest says it will introduce guidance for 2026 and new targets for 2028 with its Full Year 2025 results on 13 February 2026 — making that report the next major “reset moment” for the stock. [26]
Bull case vs. bear case for NatWest shares heading into 2026
The bull case
NatWest bulls tend to focus on three pillars:
- Capital returns are real and ongoing (buybacks plus dividends), supported by strong capital buffers. [27]
- Strategy simplification (e.g., Cushon sale) reduces complexity and can sharpen focus on higher-return core franchises. [28]
- Resilience signals — stress tests and rating commentary reinforce the view that NatWest can remain profitable through a “severe but plausible” downturn scenario. [29]
The bear case
The biggest counterpoints are also straightforward:
- Rate cuts may pressure margins faster than volume growth can compensate, especially if mortgage competition intensifies. [30]
- UK macro softness is a direct risk because NatWest is heavily UK-exposed; weaker growth can slow loan growth and increase impairments. [31]
- Valuation and expectations risk: after a strong run, the stock can be vulnerable to even “small” disappointments in guidance, costs, or credit trends — a key reason some brokers have turned more cautious. [32]
What to watch next for NatWest stock
If you’re tracking NatWest Group Plc stock into early 2026, these are the dates and catalysts most likely to matter:
- 18 December 2025: Bank of England rate decision (markets leaning toward a cut). [33]
- First half of 2026: expected completion window for the Cushon transaction (subject to regulatory approval). [34]
- 13 February 2026: NatWest Full Year 2025 results, with 2026 guidance and new 2028 targets expected — likely the next major re-pricing event for NWG shares. [35]
Bottom line
As of 12 December 2025, NatWest is trading a classic late-cycle bank-investor setup: strong recent profitability and capital return momentum set against an approaching rate-cut regime and a UK economy showing patchy growth.
The market is likely to keep treating NatWest as a “show me” story — rewarding consistent execution (cost control, credit quality, capital returns) while quickly penalising any hints that the earnings engine is more rate-dependent than hoped.
References
1. www.hl.co.uk, 2. www.natwestgroup.com, 3. www.hl.co.uk, 4. markets.ft.com, 5. www.natwestgroup.com, 6. www.natwestgroup.com, 7. www.natwestgroup.com, 8. www.wtwco.com, 9. www.natwestgroup.com, 10. www.investegate.co.uk, 11. www.natwestgroup.com, 12. www.londonstockexchange.com, 13. www.reuters.com, 14. www.ft.com, 15. www.londonstockexchange.com, 16. www.stocktitan.net, 17. www.reuters.com, 18. www.theguardian.com, 19. www.mortgagesolutions.co.uk, 20. www.investing.com, 21. www.marketbeat.com, 22. investors.natwestgroup.com, 23. investors.natwestgroup.com, 24. www.reuters.com, 25. investors.natwestgroup.com, 26. investors.natwestgroup.com, 27. www.natwestgroup.com, 28. www.natwestgroup.com, 29. www.reuters.com, 30. www.reuters.com, 31. www.theguardian.com, 32. www.investing.com, 33. www.reuters.com, 34. www.natwestgroup.com, 35. investors.natwestgroup.com
