NatWest results: Asset growth is important, but it’s no longer enough on its own
Hugh Fairclough, Partner and Head of Financial Services at RSM UK, comments on this week’s wealth management results:
“NatWest's latest results highlight why wealth management is becoming an increasingly important strategic priority across financial services. The group's Private Banking & Wealth Management business delivered £2bn of net inflows in the first half of 2026, an 18% increase in operating profit and a return on equity of 23.8%, underlining the attractiveness of the sector as a source of growth and recurring fee income.
“The completion of the Evelyn Partners acquisition at the end of June is perhaps even more significant. While its impact is largely absent from the first half results, the transaction signals NatWest's intention to accelerate its wealth ambitions through acquisition, significantly expanding its advice and wealth capabilities and reinforcing its belief that wealth management will play an increasingly important role in future growth.
“This week's results also demonstrate that strong growth and profitability remain achievable across the sector. Schroders reported record assets under management of £867.8bn, £69.3bn of gross inflows and a 46% increase year on year in adjusted operating profit to £459.8m, showing that asset and flow growth can still translate into stronger earnings when supported by operational discipline and a clear strategic focus.
"However, not all firms are seeing the same outcomes. At St. James's Place, funds under management increased almost 10% to £240.8bn, yet net inflows fell 29% and adjusted profit before tax declined 9%. Meanwhile, Barclays' Private Bank & Wealth Management business reported growth in assets, net new money and income, but profits fell as costs increased faster than revenues.
"Taken together, the results highlight a broader shift taking place across the sector. For much of the past decade, success was largely defined by gathering assets and achieving scale. Today, scale remains important, but the relationship between asset growth and profitability appears increasingly complex.
"What makes the latest reporting season particularly interesting is that firms are arriving at very different outcomes, despite operating in the same market. NatWest is signalling that acquisition-led expansion and deeper advice capabilities are central to its growth ambitions. Schroders is demonstrating that strong earnings growth can still be achieved through operational discipline and execution. Elsewhere, results suggest that growing assets and client balances alone does not automatically translate into stronger profits.
"The industry is becoming increasingly aligned on where value lies; deeper client relationships, advice, diversification and recurring fee-based revenues. What remains far less certain is how best to capture that value.
“Some firms are pursuing scale through acquisition, others through transformation and operational efficiency, but there is still no single blueprint for success. The winners will not necessarily be those with the most assets, but those that can most consistently convert scale, advice and client engagement into sustainable earnings growth. That is the profitability puzzle facing the sector and it is clear from this week’s results that all firms are racing to get there first.”