Berenberg Expects 'Muted' Net Interest Margin Growth for NatWest Group; Estimates Down

01:41 AM EST, 11/03/2026 (MT Newswires) -- Berenberg expects NatWest Group's (NWG.L) net interest margin trajectory to be subdued following the London-listed lender's third-quarter results. "NatWest's new guidance points to a broadly stable net interest margin (NIM) for Q426 but also for FY27, following a 1bp increase to 250bp during Q326. This guidance appears to reflect the continued desire by the bank to increase business volumes, including for mortgages and deposits, coupled with lower margins. As such, while net interest income (NII) will continue to grow sequentially, NIM expansion will be muted. Our outer year EPS estimates fall by 5-7% to reflect NatWest's NIM outlook and the increased surcharge tax rate. We view the c9% decline in the bank's share price following its Q326 results (on 30 October 2026) as overdone," analysts said Monday, adding they still view the company's valuation as "cheap" on an absolute basis. The research firm noted that NatWest management's expectation of "broadly stable" net interest margins through full-year 2027 is below consensus forecasts. As a result, Berenberg models a "more modest" 1 basis point to 2 basis points annual margin improvement over the next two years. Meanwhile, analysts maintained their view that the bank's distributions are "attractive," projecting a 500 million-pound-sterling share buyback announcement alongside the 2026 earnings report. Against this backdrop, Berenberg lowered the buy-rated stock's price target to 8.50 pounds from 8.80 pounds, while cutting its 2026 EPS forecast by 2% and its 2027 and 2028 EPS assumptions by 4% each.