JP Morgan stays overweight on European banks, names NatWest a top pick

Finance Banks Written by: Ian Lyall 12:00 Tue 08 Sep 2026 --> Edited by: Jamie Ashcroft Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Ian Lyall Ian Lyall, a seasoned journalist and editor, brings over three decades of experience to his role as Managing Editor at Proactive. Overseeing Proactive's editorial and broadcast operations across six offices on three continents, Ian is responsible for quality control, editorial policy, and content production. He directs the creation of 50,000 pieces of real-time news, feature articles, and filmed interviews annually. Prior to Proactive, Ian helped lead the business output at the Daily... Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. NatWest Group PLC ( LSE:NWG ) View Price & Profile JP Morgan stays overweight on European banks, names NatWest a top pick Published: 12:00 08 Sep 2026 BST JP Morgan has reiterated its 'overweight' rating on European banks, arguing the sector remains in what it calls a "perfect environment" for growth despite early signs of the interest rate cycle turning. Analyst Kian Abouhossein said the sector benefits from a "sweet spot" of European Central Bank rates between 2% and 3%, alongside lending momentum supported partly by artificial intelligence capital expenditure. He also pointed to strong capital markets performance amid upward-trending equity markets, continued cost discipline, and no signs of material asset quality deterioration given low unemployment. JP Morgan said this combination of factors should drive average pre-provision profit growth of 8.8% a year between 2025 and 2028. The bank said management teams across the sector had so far remained rational around mergers and acquisitions, supporting an attractive shareholder payout of around 75% of total profits. This is expected to produce a total payout yield of 7.7% by 2028. JP Morgan's new European banks top picks portfolio includes Deutsche Bank, UBS, ING, NatWest Group PLC (LSE:NWG) , Standard Chartered and Erste Group. The bank's outlook comes as European lenders continue to benefit from strong lending volumes and a favourable interest rate environment, with several major banks having raised their lending income guidance for 2026. Continue reading