NatWest Poised for Landmark £2.5bn Wealth Management Takeover
In a significant move for the UK banking sector, NatWest Group is on the verge of securing its most substantial corporate acquisition in nearly two decades. The high street lender is in advanced talks to purchase Evelyn Partners, a prominent wealth management group, in a deal valued at over £2.5 billion. This transaction, learned by Sky News, represents a strategic expansion for NatWest as it seeks to bolster its presence in the lucrative wealth management industry.
Strategic Acquisition Amid Competitive Bidding
NatWest, which returned to full private ownership last year, has reportedly outmanoeuvred rival bidder Barclays in recent days. Following a new round of offers submitted last week, NatWest emerged as the frontrunner, with City sources indicating an expected payment range of £2.5bn to £3bn for Evelyn Partners. An official announcement confirming the deal is anticipated in the early part of next week, coinciding with NatWest's strong full-year results report.
The acquisition aligns with the strategic priorities outlined by Paul Thwaite, NatWest's chief executive, who has spearheaded a simplification drive since taking the helm in 2023. Analysts view this move as a logical step for NatWest's Coutts arm and its affluent customer segment, enhancing the bank's capabilities in wealth management services.
Evelyn Partners: A Key Player in Wealth Management
Evelyn Partners, previously known as Tilney Smith & Williamson, is a significant entity in the UK wealth management landscape. As of last August, the firm managed close to £65 billion in assets, offering a broad range of services to thousands of customers. Owned by private equity firms Permira and Warburg Pincus, Evelyn was formed through the merger of Tilney and Smith & Williamson in 2020, with its professional services arm sold to Apax Partners last year.
The auction of Evelyn Partners, handled by bankers at Evercore, reflects a broader trend of corporate activity in the wealth management sector. Driven by demographics and initiatives to encourage longer-term saving and investment, this industry has experienced robust growth in recent years, a trajectory expected to continue.
Financial Context and Industry Implications
While the deal is sizeable, a price under £3bn is considered modest relative to NatWest's market capitalisation of nearly £52bn. The bank's shares have surged by approximately 50% over the past year, underscoring investor confidence. This acquisition marks NatWest's biggest corporate takeover since its taxpayer bailout in 2008, signalling a return to aggressive growth strategies.
Notably, the deal could facilitate a return to NatWest for Paul Geddes, Evelyn's chief executive, if he remains involved post-acquisition. Geddes previously worked at the then Royal Bank of Scotland, overseeing its insurance arm, which included brands like Direct Line and Churchill, before its spinoff.
Other potential bidders, such as Royal Bank of Canada, were linked to the auction, though it remains unclear if they formally submitted offers. Barclays, while initially keen, reportedly withdrew after recognising the price NatWest was willing to pay. Both NatWest and Barclays have declined to comment on the ongoing negotiations.
This acquisition underscores the dynamic nature of the UK financial services industry, as major banks seek to capitalise on growth opportunities in wealth management, positioning themselves for future success in an evolving market.
