By all accounts, NatWest (LSE: NWG) is one of the dullest banks on the FTSE 100. And that might just be its greatest strength right now.
After 17 long years under the government’s thumb following the 2008 bailout, NatWest is finally free. The Treasury offloaded its last sliver of ownership at the end of May, quietly and without ceremony. Just one of Britain’s biggest privatisations complete, almost as if the nation had collectively decided to forget that RBS ever happened.
But make no mistake, this moment matters. And if you care about UK financial stocks, or just want to own a piece of a bank that’s finally behaving like one, you should probably start paying attention.
The End of the State Hangover
Government ownership was a constant overhang on the share price, keeping investors guessing, when would the next sell-off come, and how would it affect valuation? Now that overhang is gone. Markets have reacted positively, with shares up more than 30% in 2025, flirting with 530p before cooling slightly in June.
More importantly, NatWest is no longer a political football. There’s no minister waiting in the wings with a PR crisis plan if things go sideways. Instead, we have a fully private bank, finally being run like a private business.
Pulling the Plug on TSB
Take the recent news that NatWest won’t be bidding for TSB. You might have missed it, buried behind headlines about Santander circling and Barclays maybe making a move. But this was a big call.
In the past, NatWest might’ve jumped in out of habit, chasing market share, buying problems, pretending size equals strength. But under Paul Thwaite’s watch, the bank walked away. Too expensive. Not a good fit. Not worth it.
This is not the kind of disciplined capital allocation you associate with old RBS. It’s something better, strategic restraint.
It’s easy to acquire. It’s harder to grow organically. Thwaite is clearly choosing the latter, lending where margins are strong, investing in core infrastructure, and walking away when the numbers don’t stack up. That’s boring. That’s banking.
Earnings Don’t Lie
Let’s not forget the numbers are decent too. First quarter profits were up 36%, smashing analyst expectations. Mortgage lending is strong, deposit margins are healthy, and returns on tangible equity are pushing 18%, the kind of figures that get buy-side analysts whispering about upgrades.
And while other banks moan about cost pressures, NatWest has kept its head. Operating costs are under control, and the dividend is holding firm. Yield-hungry investors won’t find much better in the FTSE unless they’re willing to go digging in oil and tobacco.
No Flash, No Fuss, Just Solid Banking
Let’s be clear, Natwest isn’t a growth stock. It’s not Barclays, throwing cash at global investment banking bets. It’s not HSBC shifting constantly between Asia and London. NatWest is domestic. Conservative. Customer-led.
It’s also closing another 55 branches between now and February. Critics will scream about access, but the truth is most customers don’t care anymore. Eight out of ten already bank digitally, and the rest are slowly catching up.
This is a bank focused on trimming fat, modernising its operations, and resisting the temptation to chase headlines. It’s not glamorous, but for long-term investors? That’s exactly the point.
The Bottom Line
NatWest isn’t exciting. But it’s investable. It’s a bank that’s finally standing on its own two feet, making disciplined decisions, returning capital, and acting like it actually wants to deliver shareholder value.
It’s still priced at a discount to peers, still yielding north of 4%, and now has none of the political baggage that’s held it back for years. For investors tired of banks that behave like hedge funds, NatWest might finally be growing into the adult in the room.
And sometimes, the most boring stocks turn out to be the most dependable.