Financial Data and Key Metrics Changes - The company reported a strong performance in 2025, with total income growth of 12% to £16.4 billion, and operating profit of £7.7 billion, leading to an attributable profit of £5.5 billion [4][17][18] - Earnings per share increased by 27% to 68p, while dividends per share rose by 51% to 32.5p [5][6] - The cost-income ratio improved by 4.8 percentage points to 48.6%, with costs growing only 2% to £8 billion [4][29] Business Line Data and Key Metrics Changes - Retail banking customer assets and liabilities grew by 4% to £421 billion, with a customer base increase of over 5% [7][8] - In private banking and wealth management, assets under management increased by 20% to £58.5 billion, with net new flows growing by 41% [8][25] - Commercial and institutional lending grew by 10% or £14 billion, reflecting strong performance across various sectors [10][23] Market Data and Key Metrics Changes - Customer deposits increased by 2.4% to £442 billion, with retail banking deposits up by 4% [24] - The company reported a loan impairment rate of 16 basis points, indicating strong risk management [6][33] - The CET1 ratio stood at 14%, reflecting robust capital generation [5][34] Company Strategy and Development Direction - The company aims to achieve a return on tangible equity greater than 18% by 2028, focusing on disciplined growth and simplification [51][71] - The acquisition of Evolent Partners is expected to enhance the company's private banking and wealth management capabilities, increasing assets under management significantly [40][48] - The company plans to leverage technology and AI to improve customer experience and operational efficiency [60][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the UK economy, citing strong household savings and a commitment to social housing investment [50] - The company anticipates a moderate growth environment in 2026, with expectations for lower inflation and stable unemployment rates [31][30] - Future guidance includes income expectations of £17.2 billion to £17.6 billion for 2026, with a loan impairment rate below 25 basis points [20][46] Other Important Information - The company has reduced its share count from over 11 billion to just under 8 billion, enhancing shareholder value [6] - The company achieved gross cost savings of around £600 million, contributing to improved operational leverage [11][29] - The strategic focus includes expanding customer engagement and broadening product offerings across all business lines [60][62] Q&A Session Summary Question: On costs and future cost savings - The company highlighted a nearly 5% reduction in the cost-income ratio and discussed various levers for cost savings, including technology investments and operational simplifications [77][80] Question: On customer assets and liabilities target - Management expressed confidence in achieving growth across all business areas, including lending, deposits, and assets under management, while not providing specific growth splits [84]

Summary of NatWest Group's Acquisition of Evelyn Partners Conference Call Company and Industry - **Company**: NatWest Group (NYSE: NWG) - **Acquisition Target**: Evelyn Partners - **Industry**: Private Banking and Wealth Management Key Points and Arguments Acquisition Overview - NatWest Group announced the acquisition of Evelyn Partners for GBP 2.7 billion, aiming to create the U.K.'s leading private banking and wealth management firm [1] - The acquisition is expected to enhance NatWest's strategy by increasing exposure to a growing market supported by demographic, regulatory, and technology trends [1] Financial Performance of Evelyn Partners - Evelyn Partners reported income of GBP 509 million and EBITDA of GBP 179 million with a margin of 35% in 2025 [2] - The firm attracted net new inflows of GBP 1.6 billion, indicating strong growth prospects [2] - Evelyn Partners has GBP 69 billion in assets under management and administration, which, combined with NatWest's GBP 59 billion, totals GBP 127 billion [3] Strategic Rationale - The acquisition will boost NatWest's fee income by approximately 20% before synergies, making non-interest income a larger part of revenues [3] - Expected cost synergies of around GBP 100 million will be realized by eliminating duplication in shared services and technology applications [3] - The cost to achieve these synergies is estimated at GBP 150 million, phased over three years [3] Revenue Synergies - Revenue synergies will arise from offering Evelyn's financial planning and wealth management solutions to NatWest's customer base [4] - The integration will enhance the direct-to-consumer investment offering via Bestinvest and leverage Evelyn's technology for portfolio management [4] Financial Metrics and Projections - The acquisition is expected to be accretive to growth and return on tangible equity in the first year, with returns anticipated to exceed those from share buybacks [5] - The transaction will reduce NatWest's CET1 ratio by approximately 130 basis points, but the company remains well-capitalized [5] Share Buyback Announcement - NatWest announced a share buyback of GBP 750 million, reflecting confidence in the outlook and commitment to returning surplus capital to shareholders [6] - The dividend payout ratio remains unchanged at around 50% [6] Integration and Future Plans - The immediate focus will be on the successful integration of Evelyn Partners and delivering organic growth across NatWest's three businesses [71] - The market for wealth management remains fragmented, and NatWest will remain disciplined in pursuing further M&A opportunities aligned with its strategy [71] Client Base and Cultural Fit - Evelyn Partners has a high-value, loyal client base that aligns well with NatWest's existing premier and affluent segments [31] - The cultural fit between the two organizations has been a significant factor in the acquisition decision [4] Additional Considerations - Amortization costs related to the acquisition will be accounted for, but the management team emphasizes that these will not affect capital distribution capacity [66] - The expected tax rate for the acquired business is 24% [90] Other Important Content - The management team expressed confidence in their ability to deliver on the synergies and integration plans, highlighting a strong track record in previous transactions [55] - The acquisition is seen as a compelling use of capital, with a focus on enhancing capabilities in financial planning and investment management [42]