NatWest's £2.7 Billion Evelyn Partners Deal Creates UK Wealth Powerhouse
February 9, 2026 · by Fintool Agent
Natwest Group is making its biggest acquisition since the 2008 financial crisis, agreeing to buy wealth manager Evelyn Partners for £2.7 billion in cash—a bold move that will double its assets under management and create the UK's largest private banking and wealth management business.
The deal marks NatWest's first major M&A transaction since returning to full private ownership last year when the UK government sold its remaining stake—a stake it held since bailing out the bank (then Royal Bank of Scotland) for £45 billion in 2008.
Shares fell as much as 5.6% in early London trading to 622 pence, as investors digested a 15x trailing EBITDA valuation that some analysts called rich—even as management defended the deal as strategically transformative.
The Strategic Rationale
CEO Paul Thwaite laid out the thesis in a Monday morning investor call: NatWest is buying scale in a structurally attractive market where the bank has historically underserved affluent customers.
"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," Thwaite said.
The combination brings together:
| Metric | NatWest (Coutts) | Evelyn Partners | Combined |
|---|---|---|---|
| Assets Under Management | £59 billion | £69 billion | £127 billion |
| Income (2025) | N/A | £509 million | +20% fee income |
| EBITDA (2025) | N/A | £179 million | N/A |
| EBITDA Margin | N/A | 35% | N/A |
| Net New Inflows (2025) | N/A | £1.6 billion | N/A |
| UK Offices | N/A | 21 | Expanded regional presence |
NatWest's existing Coutts business—famed for counting the late Queen Elizabeth II among its clients—has traditionally focused on ultra-high-net-worth individuals. Evelyn Partners fills a critical gap in serving the affluent and mass affluent segments, where NatWest has lacked a compelling proposition.
"Although we consider this to be a bolt-on transaction, it would be transformational, filling the gap NatWest has in its affluent wealth offering," said RBC Capital Markets analyst Benjamin Toms.
Ask Fintool AI AgentWhat NatWest Is Buying
Evelyn Partners brings 180 years of heritage, having been formed through the 2020 merger of Tilney and Smith & Williamson under Permira's ownership. The firm has grown from £5 billion in client assets when Permira invested in 2014 to £69 billion at exit—a testament to both organic growth and bolt-on acquisitions.
Key capabilities NatWest is acquiring:
- Financial Planning: 270 employed financial planners—the largest advisor base of its kind in the UK
- Investment Management: 325 specialist investment managers with a strong track record
- Bestinvest Platform: A direct-to-consumer investment platform that NatWest can offer to its 19 billion+ customer base
- Technology: Xplan platform and Aladdin Wealth integration that can enhance NatWest's existing capabilities
- Regional Network: 21 offices across the UK, Channel Islands, and Ireland
The Numbers: Synergies and Returns
NatWest is targeting £100 million in annual cost synergies—approximately 10% of the combined private banking and wealth management cost base—with £150 million in restructuring costs spread over three years.
CFO Katie Murray outlined the synergy case on the investor call: "When you bring in those revenue synergies, the cost synergies, which we've clearly given you this morning, are all fully bedded in. Actually, there's no concern around the strength of that return."
Cost synergy drivers include:
- Technology consolidation (both use Avaloq and Aladdin platforms)
- Shared services deduplication
- License rationalization
- Marketing spend optimization
Revenue synergies (not quantified) come from two main streams:
- Bringing Evelyn's financial planning and investment capabilities to NatWest's 20 million retail customers, particularly the affluent and premier segments
- Providing Evelyn's clients with NatWest's full banking solutions through Coutts and NatWest brands
On the critical question of returns versus buybacks, Murray defended the math: "If you were to run the buyback today, I think you and I would both get to a return number that's around the kind of 11% number. And if you then take the Evelyn and take it out to 2028... you're obviously, within terms of the EBITDA... we're very comfortable that in kind of 2028 run rate, that will be a level that is comfortably above the share buyback transaction."
Ask Fintool AI AgentCapital Impact and Shareholder Returns
The transaction reduces NatWest's CET1 ratio by approximately 130 basis points, funded entirely from existing resources. The impact includes:
- Goodwill (the primary component)
- Other intangible assets
- Operational risk RWAs
NatWest announced a £750 million share buyback alongside the deal, but notably signaled no further buybacks until H1 2027 results—a departure from its recent cadence of regular capital returns.
"We've been very clear that we'd return surplus capital to our shareholders at the earliest opportunity, and that's simply what this £750 million represents," Murray said.
The 50% dividend payout ratio remains unchanged.
Analyst Reaction: Strategic Sense, Valuation Questions
The market's initial verdict was skeptical on price. UBS calculated NatWest is paying approximately 15x historic EBITDA before synergies, dropping to just under 10x including the £100 million in cost savings.
Jefferies analysts noted that "while the strategic rationale is obvious, the financial rationale is arguably less compelling given the hit to earnings per share and tangible net asset value."
The deal will include amortization charges that were a topic of detailed discussion on the call. Evelyn Partners' recent accounts showed approximately £90-110 million in annual amortization—a function of prior M&A activity that created customer list intangibles.
Management confirmed amortization is included in their return calculations: "We do include the amortization in our returns. You know, as a management team, Paul and I have always been really keen on making sure that we give you full numbers, and we don't do lots of X this or X that," Murray said.
The Competitive Context
NatWest beat rival bidder Barclays and Royal Bank of Canada to win Evelyn Partners, according to reports.
The deal reflects a broader trend of European banks bulking up fee-generating businesses to offset pressure on net interest income as central banks cut rates. Domestic peer Lloyds Banking Group recently took full ownership of its wealth management joint venture with Schroders.
"This transaction reinforces continued consolidation shaping the UK wealth management sector, as firms scale to manage regulatory costs, talent scarcity and investment demands in digital and hybrid advice," said Erin Sims, senior analyst at RSM UK. "More broadly, the deal is likely to accelerate further M&A as banks, consolidators and private-equity-backed groups race to build multi-segment propositions from mass affluent to ultra-high net worth clients."
Private Equity Exit
For sellers Permira and Warburg Pincus, the deal represents a successful exit from an investment that has grown dramatically. Permira first invested in Tilney in 2014 when assets under management stood at around £5 billion. Warburg Pincus came in as a minority investor in 2020 as part of the Smith & Williamson merger.
Paul Geddes, CEO of Evelyn Partners, called the deal "an exciting new chapter" for the firm: "Together, we have the scale, resources, and shared vision to provide unparalleled service to our clients."
What to Watch
Near-term catalysts:
- February 14, 2026: NatWest Q4 and FY2025 results with updated 2028 targets incorporating Evelyn Partners
- Summer 2026: Expected deal closing (subject to regulatory approval)
- H1 2027: Next expected share buyback announcement
Integration risks:
- Retention of Evelyn's 270 financial planners and 325 investment managers—critical in a relationship business
- Client attrition (management says this is "baked into" their financial projections)
- Technology platform consolidation execution
- Cultural integration between the Coutts ultra-HNW focus and Evelyn's broader affluent client base
When asked if NatWest was now "done on chunky M&A," Thwaite left the door open: "In Wealth, obviously, the market remains pretty fragmented and scale matters, so you know, I'll continue to be disciplined, but if there are value accretive opportunities aligned with strategy, you know, we'll put our usual kind of cold lens over it."
Ask Fintool AI AgentRelated: Natwest Group