NatWest Group has struck a deal to acquire Evelyn Partners, one of the UK’s largest wealth managers, for £2.7 billion ($3.68 billion), including debt, marking a
significant expansion of the bank’s wealth management ambitions.
The British lender said on Monday that the acquisition will strengthen its position in fee-based financial services, as banks look to reduce their reliance on interest income amid expectations of falling central bank rates. Rivals such as HSBC and Lloyds have already moved aggressively in the same direction.
Once combined, the enlarged business will oversee £127 billion in assets under management and administration, making it the largest private banking and wealth management operation in Britain.
NatWest expects the deal to deliver around £100 million in annual cost savings. Alongside the announcement, the bank also unveiled a £750 million share buyback programme, underlining confidence in its capital position.
“This transaction is transformational for NatWest,” the lender said, adding that it will significantly enhance its savings and investment offerings for its 20 million customers across the UK.
A competitive sale process
Evelyn Partners was put up for sale last year by its private equity owners, Permira and Warburg Pincus. The process attracted interest from several major financial institutions, including Barclays, Lloyds and Canada’s Royal Bank of Canada, according to earlier Reuters reporting.
Analysts were surprised NatWest emerged as the winning bidder.
“We are somewhat surprised that NatWest has come out on top, given how tightly the CEO typically manages capital,” said Benjamin Toms, an analyst at RBC Capital Markets. “While this is technically a bolt-on acquisition, it fills a clear gap in NatWest’s affluent wealth offering and could prove transformational.”
Permira has owned the firm—previously known as Tilney Smith & Williamson—since 2014, backing its expansion into a wealth manager now overseeing £63 billion in client assets.
Capital impact
NatWest said the acquisition will be funded from existing resources and is expected to reduce its core equity tier 1 capital ratio by around 130 basis points. The bank stressed that it remains well capitalised following the transaction.
The deal signals a strategic shift for NatWest as it seeks to build a more resilient business model focused on long-term, fee-driven income rather than traditional lending alone. Photo by Brianboru100, Wikimedia commons.