NatWest reported full-year results after announcing the \u00a32.7bn purchase of wealth manager Evelyn Partners earlier this week. Its shares fell to their lowest level since October 2025 and tested the 200-day SMA, after starting February above 700p.<\/p>\n
Net interest income rose 13.8% year on year to \u00a312.8bn, while total income increased 13.2% to \u00a316.64bn. Total profits climbed 21.3% to \u00a35.83bn, despite annual impairments rising 86.9% to \u00a3671m.<\/p>\n
Net interest margin increased by 21bps to 2.34%, despite a lower rate environment. For 2026, NatWest expects total income of \u00a317.2bn to \u00a317.6bn and ROTE above 17%.<\/p>\n
A final dividend of 23p per share took the total dividend for the year to 32.5p, up 51% on 2024. The share price fall has been linked to concerns about the Evelyn Partners deal and reduced share buybacks.<\/p>\n
We are seeing a clear disconnect between NatWest’s strong performance and its current share price, which has fallen to test its 200-day moving average. This kind of disagreement between solid fundamentals and negative market sentiment often creates opportunities in the derivatives market. The drop appears linked to short-term concerns over the Evelyn Partners acquisition reducing share buybacks.<\/p>\n
The bank’s guidance for 2026 is exceptionally strong, with a Return on Tangible Equity (ROTE) target exceeding 17%. For context, across 2023 and 2024, the average ROTE for major UK banks struggled to consistently stay above 12-14%, making this guidance a significant outlier. History shows markets sometimes punish stocks for large acquisitions in the short term, as we saw with initial uncertainty in other large financial mergers during the early 2020s.<\/p>\n
For traders who believe this price drop is an overreaction, selling out-of-the-money puts with strike prices near or below the October 2025 lows could be a sound strategy. This allows us to collect premium based on the belief that the strong earnings report and bullish forecast will provide a floor for the share price. The goal is for the options to expire worthless if the stock finds its footing and rebounds.<\/p>\n
The current situation has likely pushed up the implied volatility on NatWest options. Elevated volatility increases the premium received from selling options, making strategies like selling cash-secured puts or bull put spreads more attractive in the coming weeks. We are essentially being paid to wait for market sentiment to catch up with the company’s financial reality.<\/p>\n
More aggressive traders might consider buying call options, betting on a sharp reversal once the market looks past the buyback issue and focuses on the long-term value of the wealth management acquisition. A rebound from a key technical level like the 200-day SMA, especially after such positive news, can be swift. This strategy would profit from a quick recovery in the share price back towards the 700p level seen earlier this month.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" NatWest profits and income surged, but shares fell on Evelyn Partners deal worries and reduced buybacks.<\/p>\n","protected":false},"author":62,"featured_media":16990,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41871","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t