Operating profit before tax reached £3.6bn, up from £3.0bn in the same period last year. This performance was driven by a rise in total income to £8.0bn and a reduction in operating costs, leading to an improved cost-to-income ratio of 48.8%, down from 55.5% a year ago. The bank’s return on tangible equity (ROTE) also strengthened to 18.1%.

The banking group saw its shares rise on Friday after upgrading its full-year profit forecasts and announcing significant returns for shareholders. The bank, which returned to full private ownership in May, revealed a £750 million share buyback and an increased interim dividend of 9.5p per share.

A key driver of the group’s growth was a significant increase in customer numbers, which now exceed 20 million. The bank added over one million new customers in the first half, boosted by the acquisition of Sainsbury’s Bank’s retail banking assets. This expansion was reflected in robust growth across its operations, with net lending up by £11.9bn, deposits increasing by £4.5bn, and assets under management and administration growing by £2.9bn.

Paul Thwaite, NatWest Group’s chief executive, said: “NatWest Group’s strong performance in the first half of the year reflects our consistent support for our customers and, in turn, delivery for our shareholders.”

He highlighted the bank’s ambition for “further disciplined growth,” complemented by a focus on “bank-wide simplification” and enhanced technology, including AI partnerships with OpenAI and AWS.

Reflecting this confidence, NatWest has upgraded its 2025 guidance. It now expects total income to be greater than £16.0bn, up from a previous forecast in the range of £15.2-£15.7bn, and projects a ROTE of above 16.5%, an increase from the upper end of its prior 15−16% range.

Analysts reacted positively to the news. Zoe Gillespie, a wealth manager at RBC Brewin Dolphin, noted that NatWest has “posted another strong set of results, beating forecasts again as the bank’s turnaround really takes hold.” She added that its strategy of simplification and technology integration, combined with sensible acquisitions, “is driving income growth and greater profitability”.

She explained: “The addition of Sainsbury’s Bank, in particular, provides a real platform for further growth in UK retail banking.

“Now fully in private ownership, NatWest has a freer hand to make its next big strategic move and, in the interim, shareholders are being well rewarded for their patience with a sizeable dividend increase and share buyback programme.”

Echoing this sentiment, Nick Sherrard, managing director of Label Sessions, stated that the results show the bank has “done a lot to break links with the past”. While acknowledging the challenge of executing its new strategy, he praised its “big bets on AI” and innovative moves in embedded finance.

He concluded: “There seems to be a real vision for the future, but executing on that strategy will not be easy.”