British stocks opened modestly higher Monday, with the FTSE 100 rising 0.3% as investors assessed NatWest Group's strong earnings. The pound weakened to $1.3616. European markets traded mixed, with Germany's DAX flat and France's CAC 40 down 0.3%. Trading attention centered on the UK lender's results and broader geopolitical developments.

NatWest reported a pretax operating profit of £7.7 billion for 2025, a 24% annual increase that exceeded the £7.5 billion consensus forecast. The bank simultaneously raised its key profitability target, aiming for a return on tangible equity exceeding 18% by 2028, up from a previous goal of over 15% by 2027. CEO Paul Thwaite cited a sharpened strategic focus.

Separately, Prime Minister Keir Starmer will propose a joint Western defense-procurement plan at the Munich Security Conference to lower rearmament costs. This follows a UK-led coordination meeting where allies committed up to $35 billion in new military aid for Ukraine to bolster air defenses after Russian strikes. Defense Secretary John Healey stressed the need for collective action.

NatWest's outperformance provides a positive cue for the UK banking sector, while the defense and aid announcements underscore sustained fiscal commitments. The dual themes of corporate profitability and strategic spending dominate the domestic agenda, influencing both equity valuations and currency sentiment in the near term.