NatWest has its main office in Edinburgh. As stated in a public announcement on Monday, the financial institution will procure Evelyn for £2.7 billion ($3.7 billion), which encompasses debt. The agreement is anticipated to represent the most substantial private equity-supported wealth management investment divestment in British history. For over a decade, Evelyn was under the ownership of the private equity entity Permira, before Warburg Pincus joined as a minority stakeholder in 2020.
Concurrent with this, NatWest revealed a stock repurchase initiative of £750 million, while also indicating that the succeeding buyback scheme is postponed until the close of the following year. The bank’s stock experienced a decline of 5.6% during initial trading hours in London: Analysts at Jefferies emphasized that the arrangement is projected to unfavorably influence both earnings per share and tangible net asset worth, in addition to diminishing buyback quantities in the near future.
Furthermore, the acquisition positions NatWest as a prominent contender within the UK wealth management sector and aligns with CEO Paul Thwait’s outlined approach of simplifying the bank’s structure and fostering growth in prioritized segments – predominantly private banking and engaging with affluent clientele. The augmented proportion of fee income is also set to enable the enterprise to achieve diversification amidst a context of decreasing interest rates.
“We are establishing the foremost private banking and wealth management operation in the UK,” commented Tveit.
According to Bloomberg, NatWest prevailed over Barclays Plc in a competitive pursuit for Evelyn. It marks NatWest’s premier significant transaction since the UK governing body divested its remaining ownership stake in the bank in 2025, subsequent to the £46 billion bailout of Royal Bank of Scotland in 2008.
Formerly recognized as Tilney Smith & Williamson, Evelyn oversees client assets approximating £69 billion. Upon finalization of the transaction, the consolidated entity will possess combined assets under management and administration totaling £127 billion, alongside aggregate client assets and liabilities amounting to £188 billion.
The funding for the arrangement will stem from NatWest’s internal capital reserves and is anticipated to diminish the CET1 ratio by roughly 130 basis points. The bank anticipates that the acquisition will contribute to both growth and return on capital during the initial year of ownership, while also yielding a superior return compared to a share buyback.
Evelyn reported EBITDA of £179m in 2025, which reflects the company’s valuation of 9.7x EV/EBITDA, considering the projected synergies. The anticipated impact from cost reductions is roughly £100m per year, representing approximately 10% of the combined cost base pertaining to the private banking and wealth management ventures.
Ardea Partners and BofA Securities, together with UBS, functioned as financial consultants to NatWest. Evercore and Goldman Sachs fulfilled the role of sell-side advisors.
Source: Bloomberg