Goldman Sachs Sees New Drivers for European Banks, Adjusts NatWest (NWG) Stance

NatWest Group plc (NYSE:NWG) is included among the 15 Global Dividend Stocks to Diversify Your Portfolio.

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On December 4, Goldman Sachs downgraded NatWest Group plc (NYSE:NWG) to Neutral from Buy. It lifted the terms people to 685 GBp from 665 GBp. The alteration came arsenic portion of the firm’s 2026 outlook for European banks. Goldman said it remains constructive connected the sector. Investor attraction is moving distant from rates and credit. Growth and ratio are present taking halfway stage. Capital deployment inactive matters astir for creating shareholder value.

NatWest Group plc (NYSE:NWG)’s shares archer their ain story. The banal is up much than 77% since the commencement of 2025. The bank’s October 24 Q3 2025 results explicate why. The company’s nett earlier taxation jumped 30.4% twelvemonth implicit twelvemonth to £2.18 billion, and full income roseate 15.7% to £4.33 billion. These are beardown numbers by immoderate measure.

There is simply a wide risk. Falling UK involvement rates could unit earnings; however, NatWest has been preparing for this for immoderate time. Management shifted absorption toward fee-based businesses alternatively than relying lone connected involvement income. That determination is starting to amusement results. In Q3 2025, non-interest income climbed 25.9% to £0.91 billion. Net involvement income grew 12.7% to £3.09 billion, a slower but inactive coagulated pace. Net involvement income reflects the spread betwixt what banks gain connected loans and what they wage connected deposits.

NatWest Group plc (NYSE:NWG) has besides leaned into structural hedges. These tools are analyzable but effective. They assistance support lending margins erstwhile cardinal banks chopped rates. Many banks usage akin hedges, but NatWest appears to person gone further. Its presumption extends into 2027, longer than astir peers. That gives it much clip to payment from today’s complaint environment. If this plays retired arsenic planned, the slope could present industry-leading margins. Returns connected tangible equity whitethorn proceed to improve.

NatWest Group plc (NYSE:NWG) serves much than 20 cardinal customers. Its operations span retail, commercial, and backstage banking crossed the UK.

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