Reaction: RBS owner NatWest clinches £2.7bn deal to buy wealth manager Evelyn Partners
“It gives the bank the ability to target a bigger pool of more affluent customers” – Susannah Streeter, Wealth Club
Royal Bank of Scotland owner NatWest Group has agreed to buy wealth management firm Evelyn Partners for £2.7 billion, marking the banking giant’s first major acquisition since returning to private ownership and its largest deal in recent years.
The announcement follows reports that NatWest had seen off competition from rival Barclays for the takeover move.
Acquiring Evelyn, one of the UK’s biggest wealth managers with Scottish operations in Aberdeen and Edinburgh, brings together its £69bn in assets under management with NatWest’s £59bn. The London-headquartered wealth firm, which rebranded from Tilney Smith & Williamson in 2022, offers financial planning and investment management and operates consumer platform BestInvest.
The bumper deal is expected to boost NatWest’s fee income by about a fifth and increase the size of its private banking and wealth management business.
NatWest’s chief executive Paul Thwaite said: “Bringing together these two leading businesses creates a unique opportunity to provide financial planning, savings and investment services to more families and people across the UK. We look forward to welcoming our new clients and working with our colleagues at Evelyn Partners to transform the services our 20 million customers across the group can expect from us.
“At a time when the benefits of saving and investing are increasingly part of the national conversation, we can help customers to make more of their money through a broader range of services, as well as helping to drive growth and investment across the economy.”
He added: “This transaction creates the UK’s leading private banking and wealth management business, delivering the scale and capabilities needed to succeed in a market with significant growth potential. It accelerates delivery of NatWest Group’s strategy and positions us to realise our longer-term ambitions.”
Paul Geddes, chief executive of Evelyn Partners, said: “Evelyn Partners is a leading UK wealth manager with more than 180 years of heritage. We are proud to have grown to £69bn of assets under management, under the stewardship of Permira, investors in the business since 2014, and Warburg Pincus, a minority investor since 2020.
“We are delighted to join NatWest Group, which marks an exciting new chapter for Evelyn Partners. We both have a long-standing history as highly regarded wealth managers with a client-centric culture.
“Together, we have the scale, resources, and shared vision to provide unparalleled service to our clients. We look forward to working together to build on our success and drive future growth.”
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NatWest is funding the deal from existing resources. It also announced a share buyback of £750 million, continuing its “strong track record of capital return to shareholders”.
Reports over the weekend suggested that Barclays had also been in the running to buy Evelyn, but had backed away from any bid after NatWest stepped forward.
Susannah Streeter, chief investment strategist at Wealth Club, noted: “NatWest has scooped up wealth manager Evelyn Partners, as part of its strategy to diversify its operations and bolster its wealth management business.
“Shares had come under pressure last week, after Bank of England policymakers showed more willingness than expected to cut rates this year with a lower base rate set to eat into net interest income. Although structural hedges have limited the effect of the falling base rate, with older low-yield interest rate swaps maturing, replaced with current rates, this tailwind will fade.
“Finding new revenue streams to bolster revenues is part of the longer-term vision, and with NatWest bringing Evelyn Partners into its stable alongside Coutts, it gives the bank the ability to target a bigger pool of more affluent customers.’’
Gary Greenwood, research analyst at Shore Capital, added: “While expanding in wealth management is strategically logical, we remain cautious on the deal economics, which rely heavily on synergy delivery to justify the price. Moreover, the willingness to pursue an acquisition on these terms over buying back shares reflects management’s view of its own valuation.”
The deal marks a major acquisition for NatWest, which rebranded from RBS Group, after it returned fully to private ownership less than a year ago. The UK government sold its remaining shares in the banking group in May and confirmed a £10.5bn loss since it was rescued by UK taxpayers during the 2008 financial crisis.
Thwaite said at the time that it was a “significant moment” for the bank that would allow it to “look to the future with confidence, without forgetting the lessons of the past”.
NatWest is due to publish its financial results for 2025 on Friday. It is expected to report higher earnings, with forecasts showing an operating pre-tax profit of about £7.5bn for the year, up from £6.2bn in 2024.
The bank has also reported growing mortgage balances during the year, and gained new customers after buying Metro Bank’s mortgage book and acquiring Sainsbury’s Bank.
Richard Hunter, head of markets for Interactive Investor, part of Aberdeen Group, said: “As far as investors are concerned, NatWest is in a sweet spot. The government shackles have gone, the group has prodigious amounts of cash and acquisitions to boost growth further seem likely.”
He added: “Indeed, it remains to be seen whether this new-found freedom will enable a more aggressive acquisition policy.”
Michael Hewson, an analyst for MCH Market Insights, pointed out that the shares have risen to their highest levels since 2008 in recent months.
He added: “All in all, the UK banking sector appears to be in the best shape it has been since the financial crisis, with the only risk now is that it may well draw the attention of politicians who think the sector is perhaps making too much money.”
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