Introduction
NatWest just dropped £2.7bn on wealth manager Evelyn Partners and investors aren’t thrilled. Shares tumbled over 7% on Monday despite the bank announcing a £750m buyback alongside the deal. Why the cold shoulder? Shareholders reckon the cash-flow proposition hasn’t really changed, and future buybacks look thinner on the ground. Here’s why NatWest’s big wealth play is causing more nerves than excitement in the City.
NatWest Beats Barclays to Evelyn Partners Deal
NatWest sealed the £2.7bn acquisition of Evelyn Partners from private equity firms Permira and Warburg Pincus, beating rival Barclays in what had shaped up to be a bidding war. The deal bolsters NatWest’s existing Coutts private banking division and creates what the bank calls “the UK’s leading private banking and wealth management business.”
Evelyn Partners brings £69bn in assets under management to the table. Combined with NatWest’s £59bn, the merged entity will manage over £127bn in total assets. The firm generated £179m in earnings last year—not bad for a business that runs on recurring fees rather than interest rate roulette.
Why Wealth Management Matters Now
Banks are piling into wealth management for good reason. It’s a capital-light, fee-driven business model that doesn’t swing wildly with interest rates like traditional lending does. Translation? More stable, predictable income.
NatWest expects the Evelyn Partners deal to boost fee income by nearly 20% and diversify revenue streams. Chief executive Paul Thwaite says it “accelerates delivery of NatWest Group’s strategy” and positions the bank to hit longer-term ambitions in a high-growth market.
Investors Aren’t Buying It—Yet
Despite the strategic rationale, NatWest shares sank 7% to 611.20p on Monday. The market’s scepticism centres on shareholder returns. Yes, there’s a £750m buyback kicking off now, but the next programme won’t arrive until 2027’s half-year results.
Jefferies analysts summed it up: “NatWest shareholders are left with broadly the same cash-flow proposition as before.” Near-term buybacks will shrink, though dividends per share should only drop around 2% long-term. Still, that’s not the news investors wanted to hear.
The Broader Wealth Management Land Grab
NatWest isn’t alone in chasing wealthy clients. UK banking giants have launched an all-out wealth management arms race:
Lloyds Banking Group
Lloyds bought out Schroders’ 49.9% stake in their joint venture Schroders Personal Wealth (SPW), taking full control. The move hit a speed bump when Jo Harris, chief executive of the mass affluent division, departed days after launching the new service.
HSBC’s Ambitious Push
HSBC chief Georges Elhedery wants to double assets under management to £100bn within five years, targeting a top-five spot among UK wealth managers. The bank—which became the City’s most valuable firm last month—recently splashed $5bn on a luxury wealth centre in central London aimed at the mass-affluent market.
Why Everyone’s Doing It
Wealth management offers banks a smoother ride. Recurring fees beat the volatility of interest-sensitive lending. With rates unpredictable and margins under pressure, banks want revenue streams that don’t depend on what the Bank of England does next Thursday.
What Happens Next for NatWest
The Evelyn Partners acquisition positions NatWest as a serious player in UK private banking. With £127bn in managed assets and a nearly 20% bump in fee income, the numbers look solid on paper.
But the market wants proof. Investors are watching three things: integration execution, actual fee income growth, and—most importantly—when those buyback programmes restart. Until 2027’s results, expect NatWest to keep proving this deal was worth the £2.7bn price tag.
Conclusion
NatWest’s £2.7bn Evelyn Partners deal creates the UK’s largest private banking and wealth business, but shareholders aren’t popping champagne yet. Delayed buybacks and a similar cash-flow outlook dampened Monday’s announcement. Still, the strategic logic is clear: wealth management is the future, and NatWest just bought itself a front-row seat. Whether investors warm to the deal depends on execution and patience.
FAQ
Q1: Why did NatWest shares fall after the Evelyn Partners acquisition?
A: Investors reacted negatively because the deal doesn’t significantly improve near-term cash flow for shareholders. The next major buyback programme won’t happen until 2027, which disappointed market expectations despite the £750m immediate buyback.
Q2: How much will NatWest manage in total assets after buying Evelyn Partners?
A: The combined entity will manage over £127bn in assets. Evelyn Partners brings £69bn in assets under management, which will merge with NatWest’s existing £59bn from its Coutts division.
Q3: Why are UK banks investing heavily in wealth management?
A: Wealth management offers stable, fee-based income that doesn’t fluctuate with interest rates like traditional lending. It’s a capital-light business model that provides predictable revenue streams, making it attractive during periods of rate volatility.
Q4: Who else is competing with NatWest in UK wealth management?
A: Lloyds recently took full control of Schroders Personal Wealth, whilst HSBC plans to double its assets under management to £100bn within five years. Barclays was also reportedly competing for Evelyn Partners before NatWest won the bid.
Q5: When will NatWest announce its next share buyback programme?
A: NatWest stated it expects to announce the next buyback programme at its 2027 half-year results. The bank is launching a £750m buyback immediately following the Evelyn Partners acquisition announcement.
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Effective Date: 15th July 2025
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