Barclays and NatWest Group have progressed to the second round of an auction for Evelyn Partners, the wealth management business that oversees close to £65 billion of client assets, Sky News has reported.

The broadcaster said the process values Evelyn at around £2.5 billion, underlining the strategic importance of wealth management to the UK’s major banking groups as they seek more stable, fee-based income streams.

Alongside Barclays and NatWest, Royal Bank of Canada is also understood to be considering a bid, while several private equity firms have submitted offers. Lloyds Banking Group is reported to have explored an acquisition, although it remains unclear whether it is still participating in the process.

For both Barclays and NatWest, a successful bid would strengthen areas where each already has an established footprint. NatWest’s private banking and wealth proposition is anchored by Coutts, while Barclays has been expanding its focus on higher net worth clients.

STRATEGICALLY COMPELLING

Sky News noted that Paul Thwaite, chief executive of NatWest, has previously signalled that the bank would consider acquisitions that are appropriately priced and strategically compelling following its return to full private ownership earlier this year.

Evelyn Partners was formed in 2020 through the merger of Tilney and Smith & Williamson and is owned by private equity firms Permira and Warburg Pincus. According to its most recent results, the firm reported assets under management of £64.6 billion at the end of June, reflecting continued growth across the wealth management sector.

As part of its restructuring, Evelyn sold its professional services arm to Apax Partners last year, sharpening its focus on wealth management and investment advice.

The auction of Evelyn is being overseen by advisers at Evercore. Barclays and NatWest declined to comment when approached by Sky News.