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NatWest completed a £2.7bn acquisition of Evelyn Partners, one of Britain’s largest wealth managers, marking the bank’s biggest deal since its 2008 taxpayer bailout. The banking group beat rival Barclays to secure the purchase, signaling an aggressive push into the wealth management sector.
Market Punishes Expensive Deal
Despite announcing the major acquisition, NatWest’s stock market value plummeted by £3.1bn on the day of the announcement. The timing proved particularly unfortunate, with political noise from Westminster creating a challenging backdrop for UK assets including government gilts and domestic banking stocks. The deal’s terms appear expensive rather than offering obvious value, according to market analysis.
Strategic Shift Toward Wealthy Clients
The Evelyn Partners acquisition represents NatWest’s strategic pivot toward wealth management and targeting mass affluent customers. The bank, which returned to full private ownership last year after its government bailout, already operates the private bank Coutts. The purchase of Evelyn Partners significantly expands its presence in the competitive wealth management space.
Long-Term Investment Strategy
Market observers characterize the deal as “one for the long term” rather than an immediately accretive acquisition. The wealth management sector has become increasingly fashionable among banks seeking to diversify revenue streams and capture higher-margin business from affluent clients. However, the expensive nature of the transaction suggests returns may be slow to materialize, explaining investor skepticism reflected in the sharp stock decline following the announcement.
Sources: The Guardian
