Russ Mould, investment director at AJ Bell, said: “A slowing pace of rate cuts is ostensibly good news for UK banks and NatWest chalked up an impressive performance at a headline level in the first three months of 2026.
“However, there is a flipside as NatWest has been forced to increase its provisions for bad loans as the economic toll on borrowers from the Iran war and the inflationary pressures it has unleashed is likely to tell over the coming period.
“This, combined with net interest income which was just a smidge below expectations and a relatively conservative outlook, saw the share price take a pause for breath.
“That doesn’t take away from the strategic progress the company has made.
“Granted greater freedom by its return to full private ownership, the deals to acquire Sainsbury’s Bank and Metro Bank’s mortgage book seem to have gone to plan.
“The subsequent acquisition of wealth management outfit Evelyn Partners should help the company achieve its aim of increasing the amount of business it does which isn’t tied to the interest rate cycle – an ambition it shares with its peer Lloyds.
“There were no major disappointments in NatWest’s latest results but the exceptionally strong run for the shares in recent years means it is being held to a high standard.”
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