NatWest Group is reportedly in advanced discussions to acquire wealth management firm Evelyn Partners in a deal valued between £2.5 billion and £2.7 billion, according to media sources including Sky News and Bloomberg. An official announcement could be made as early as Monday, though negotiations remain ongoing and could still fall apart. The bank has declined to comment on the speculation.
The potential acquisition represents a strategic pivot for NatWest, aiming to bolster its fee-based revenue streams, which are generally less volatile than traditional lending margins. Wealth management offers more predictable income, though integrating operations and maintaining cost discipline present significant challenges. This move would mark NatWest's largest takeover since its government bailout during the 2008 financial crisis.
Investor focus is split between the bank's capital allocation for growth initiatives like this acquisition and its ongoing commitment to shareholder returns via buybacks. On Friday, NatWest repurchased 797,428 of its own shares at a volume-weighted average price of 659.29 pence, as part of a £750 million buyback program scheduled to conclude by February 13, with a possible extension to March 13.
Evelyn Partners manages approximately £65 billion in assets. Sky News indicated that NatWest, which returned to full private ownership last year, recently outbid Barclays for the asset manager. The deal's finalization would significantly expand NatWest's footprint in the wealth management sector.
Market reaction will hinge on whether a firm agreement is reached. If weekend headlines fade without a deal, shares could retreat to levels driven by fundamentals. Should an acquisition be confirmed, investors will immediately scrutinize its impact on NatWest's capital reserves and the potential implications for future share repurchases.
The broader banking sector provided strength to the FTSE 100 index on Friday, which closed 0.6% higher. This strength countered losses in other sectors after the Bank of England suggested interest rate cuts might be possible if inflation continues to ease.
Looking ahead, NatWest is scheduled to release its Annual Results at 7 a.m. GMT on Friday, February 13. Management will host a presentation, with a separate session for fixed income investors. In its third-quarter disclosures, the bank stated it would provide 2026 guidance and unveil new 2028 targets alongside the full-year figures.
The proposed acquisition underscores a strategic shift for NatWest as it seeks to diversify its revenue base. The coming days will be critical in determining whether this major strategic move comes to fruition and how the market ultimately assesses its value and risks for shareholders.
