Natwest’s wealth income boosted by Evelyn Partners takeover

Natwest's profit rose in the third quarter following gains from its recently completed acquisition of Evelyn Partners. The FTSE 100 bank reported a pre-tax profit of £2.2bn, slightly above expectations, and a total income of £4.6bn, up 7.1%. This increase was driven by the performance of its Private Banking & Wealth Management division, which saw a significant boost after the Evelyn Partners takeover, which was finalized in June.

The wealth division's income surged 47% compared to the previous quarter, with non-interest income more than doubling to £233m and assets under management income rising to £225m. Group non-interest income exceeded expectations at £1.1bn, helping to offset a weaker performance in net interest income, which fell short by £49m. The bank also recorded a £35m charge due to a routine review of customer repayment behavior, which impacted net interest income.

Despite this, the bank's net interest margin increased to 2.5%, following a 13 basis point annual gain in the second quarter. Natwest had previously forecast a hike in interest rates to 4% in the upcoming Bank of England meeting, in response to the elevated rate environment caused by the US-Iran conflict. The bank also noted that it is likely to be one of the most exposed UK banks to the upcoming changes in corporation tax surcharge, which the Chancellor has doubled to 6% for 15 months, with an estimated £1.5bn increase in revenue.