NatWest Group (NWG) M&A announcement summary

Deal rationale and strategic fit

• Acquisition creates the UK's leading private banking and wealth management business, transforming savings and investment offerings for over 20 million customers and accelerating exposure to a high-growth, capital-light segment driven by demographic, regulatory, and technology trends.

• Combined assets under management and administration reach £127 billion, with total customer assets and liabilities at £188 billion, making wealth management a key growth engine and representing about 20% of group assets and liabilities.

• Evelyn Partners brings a strong regional network, loyal client base, and direct-to-consumer investment platform, enhancing financial planning and investment capabilities.

• Positions the group as a scaled, leading player in a fragmented and fast-growing UK wealth management market.

• Accelerates group strategy and strategic diversification by increasing fee income by around 20% pre-revenue synergies.

Financial terms and conditions

• Acquisition price is £2.7 billion in cash, with an implied EV/EBITDA multiple of 9.7x 2025 including run-rate cost synergies, funded from existing resources.

• Transaction is ROTE accretive, with returns expected to exceed those from a share buyback in year 1.

• CET1 ratio expected to reduce by approximately 130 basis points, but the group remains well capitalized.

• Share buyback of £750 million announced, with the next buyback expected at H1 2027 results and ongoing commitment to return surplus capital to shareholders.

• Ordinary dividend payout ratio remains at around 50% of attributable profits.

Synergies and expected cost savings

• Targeting approximately £100 million in annual cost synergies, about 10% of the combined cost base, mainly from technology and shared services consolidation.

• Cost to achieve synergies is estimated at £150 million, phased over three years.

• Revenue synergies expected from cross-selling financial planning and investment management solutions, leveraging technology, and expanding offerings to both client bases.

• High platform alignment enables significant technology and operational de-duplication.