NatWest Dividend Yield Forecast Points to 6.9% by 2028 After Bumper Results

The NatWest dividend yield trajectory is increasingly hard for income investors to overlook: a current forward yield of 4.8% is forecast to reach 6.9% by 2028, underpinned by a set of full-year 2025 results that left little to quibble with. For UK investors hunting durable income in a market still unsettled by tariff noise and domestic political uncertainty, NWG is making a case for itself that gets stronger with each quarterly filing.

What the 2025 numbers actually say

Profit before tax rose 24% year on year to £7.71 billion for the full year, while total income (including notable items) grew 13% to £16.64 billion. Attributable profit came in at £5.48 billion, up from £4.52 billion the year before. Earnings per share grew 27% to 68.0 pence.

Return on tangible equity (RoTE) climbed to 19.2% from 17.5%, and the net interest margin reached 234 basis points for the full year, up 21 basis points on 2024. Of that improvement, deposit margins contributed 15 basis points, with lending margins and funding adding the rest. Net loans to customers (excluding central items) grew by £20.7 billion across the year, driven by the retail mortgage book and commercial and institutional balances.

The dividend picture is where the income argument sharpens. The total dividend for 2025 was £0.325 per share, a 51% increase on the prior year, according to Yahoo Finance’s earnings summary. Forecasts have NatWest’s earnings growing at a yearly average of 4.7% through to end-2028, which underpins the progression toward that 6.9% yield.

Total shareholder return for 2025, factoring in the share-price gain of 62.1%, came to 71.0% for the full year. Tangible net asset value per share grew 16.7%. Those are numbers that belong in the context of a bank that was still part-owned by the government not so long ago.

NatWest dividend yield versus the sector: where the valuation stands

The bank trades at a lower valuation than Lloyds Banking Group on most conventional metrics, yet its recent profit growth has been stronger. It also carries considerably less exposure to the car finance mis-selling scandal that has clouded Lloyds’ earnings outlook. For income investors who have been overweight Lloyds, that comparison is worth sitting with.

Beyond the traditional retail and commercial book, NatWest announced the acquisition of wealth manager Evelyn Partners during the year. The deal is intended to strengthen the group’s private banking and wealth management operations, broadening the revenue mix at a point when net interest income is already running ahead of expectations. Net interest income for 2025 rose 13.8% to £12.83 billion.

Management’s guidance for FY 2026 total income sits in the range of £17.2 billion to £17.6 billion. If the bank delivers toward the upper end of that range, earnings forecasts for 2026 and beyond gain further credibility, and with them the dividend trajectory.

That said, the risk case is straightforward. Bank stocks are sensitive to the domestic economic cycle in a way that a utility or a tobacco company simply is not. If the UK economy softens materially, credit impairments will rise, earnings will compress, and dividend growth could slow. Political uncertainty feeding into consumer and business confidence is a real variable, not a theoretical one. The RoTE of 19.2% for the full year is attractive, but Q4 2025 came in at 18.3%, a reminder that quarterly runs are not always linear.

Defensive names such as National Grid, British American Tobacco, and Legal & General remain less exposed to those cyclical pressures, and in a deteriorating macro environment they would likely prove more resilient. Lower oil prices, meanwhile, weigh on energy-sector dividends while feeding through to reduced input costs for manufacturers and transport companies, a factor that modestly improves the consumer backdrop that underpins NatWest’s retail book.

NatWest’s American Depositary Shares are listed on the New York Stock Exchange under the ticker NWG, each representing two ordinary shares, which gives the stock a degree of international institutional ownership that can help stabilise the register through periods of domestic turbulence.

The next quarterly update is the decisive near-term test. If loan growth holds, impairments stay contained, and the net interest margin does not compress meaningfully as rate expectations shift, the bull case for owning NWG into 2026 strengthens materially. If impairments tick up or management revises the income guidance range lower, the thesis needs revisiting. That update is the moment to watch.