NatWest's boss voiced opposition to a tax raid on banks as it revealed second-quarter profits had rocketed 29 per cent to £2.3billion.

The better-than-expected results will further fuel calls for a windfall tax on banks, as they see profits buoyed by higher interest rates and improved trading.

Yesterday Lloyds Banking Group also revealed bumper profits, as did Barclays earlier this week, but NatWest CEO Paul Thwaite warned tax rises would hold back lending and hamper the economy.

He said: ‘I’ve said this before but if you want strong economies, you need strong banks,’ adding ‘it’s really important to have consistency of policies so businesses can plan.’

NatWest shares jumped 4 per cent this morning as it raised full-year forecasts and said it would consider bringing forward share buybacks.

NatWest's profits were lifted by the group's wealth and retail arms and it raised its dividend by 26 per cent to 12p, with a £955million payout lined up for shareholders.

NatWest's total income for the first half of its financial year jumped 11 per cent to £8.7billion. It reported a 20 per cent increase in pre-tax profit for the first six months of 2026 to £4.3billion, up from £3.6billion the previous year and surpassing analyst estimates of £4billion.

This was driven by a 12.6 per cent increase to £6.9billion in net interest income, the difference between what the bank charges borrowers and what they pay savers.

Thwaite highlighted the bank’s ‘very strong performance’ and said: 'we’re delivering the highest returns in the sector.'

The bank boss called on Andy Burnham's government to set a clear course for business. Thwaite said: ‘It’s important to see continuity in the direction of travel in policy and regulation. We need to build confidence if the country is to grow – all stakeholders need to step up and the bank is ready to play its part.’

NatWest has benefited from interest rate expectations staying higher for longer, prompting another income forecast upgrade today.

The lender pencilled in total income of £17.9billion for 2026, up from the £17.2billion to £17.6billion range at the start of the year. This figure is expected to include a £275million tailwind from the integration of wealth manager Evelyn Partners.

Thwaite said: 'We are confident in the scale and capabilities we’re building and the opportunities ahead. 

'Through our long-standing relationships, deep regional presence, and responsible adoption of AI, we are well placed to accelerate our progress by doing even more to meet our customers’ needs, as well as helping to generate growth in every nation and region of the UK.'

NatWest booked costs of £28million tied to its acquisition of Evelyn Partners, the wealth management firm, for £2.2billion in June. 

The deal also saw NatWest pay off Evelyn Partners’ debt of £674million and settle management team loans, worth £11million.

The Evelyn Partners acquisition was NatWest’s largest deal since 2008, and it represented a strategic shift from Thwaite to expand its wealth management arm beyond private banking arm Coutts. 

The private banking and wealth management division received net inflows of £2billion in the first half, NatWest said. Wealth income increased more than 10 per cent in the first half to £595million.

Within the firm's three business units, operating profit rose by 16 per cent to £1.73billion in retail banking, by 18 per cent to £212million in private banking and wealth management and by 15 per cent to £2.28billion in commercial and institutional. 

Yesterday, Lloyds Banking Group said its second-quarter profit reached £2.3billion, above forecasts of £2.1billion. 

Barclays also revealed a 30 per cent increase in profit to £3.3billion in the second quarter of the year as it put £1.3billion towards its bonus pool for the first six months, up from £1billion the previous year. 

The Trades Union Congress and Labour's Left-wing have called on Andy Burnham and new chancellor John Healey to impose a new tax on the banking sector.

Barclays boss’ CS Venkatakrishnan warned against the move, stating for every £1 of its capital around £8 to £10 is lent to business and households supporting growth.

Chris Beauchamp, chief market analyst at IG, said: 'Hot on the heels of Lloyds, NatWest becomes the latest bank to issue an update statement, and once more the push into wealth management is a key plank of its growth strategy. 

'More and more this looks like a fully-rejuvenated banking sector, with further room for share price growth even after the big gains of the last two years.'

NatWest has performed well for investors in recent years, thanks to improving performance and the removal of the overhang of the taxpayer stake, which was finally shifted in May 2025.

Richard Hunter, head of markets at Interactive Investor, said: 'Overall, with high performance comes high expectations, and NatWest has delivered today. 

'The warm reaction to the numbers reflects some relief and adds to a share price which has risen by 29 per cent over the last year, as compared to a gain of 19 per cent for the wider FTSE 100, and by 110 per cent over the last two years.

'For slightly different reasons the group finds itself at the top of the tree alongside Barclays, and the market consensus of NatWest as a strong buy will no doubt stay in place.'