Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Entity Registrant Name | NatWest Group plc |
Entity Central Index Key | 0000844150 |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2021 |
Amendment Flag | false |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Condensed consolidated income s
Condensed consolidated income statement - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Condensed consolidated income statement | ||
Interest receivable | £ 4,782 | £ 5,190 |
Interest payable | (866) | (1,338) |
Net interest income | 3,916 | 3,852 |
Fees and commissions receivable | 1,312 | 1,430 |
Fees and commissions payable | (285) | (392) |
Income from trading activities | 231 | 802 |
Other operating income | 145 | 146 |
Total non-interest income | 1,403 | 1,986 |
Total income | 5,319 | 5,838 |
Staff costs | (1,902) | (1,955) |
Premises and equipment | (502) | (651) |
Other administrative expenses | (703) | (696) |
Depreciation and amortisation | (414) | (448) |
Operating expenses | (3,521) | (3,750) |
Profit before impairment releases/(losses) | 1,798 | 2,088 |
Impairment releases/(losses) | 707 | (2,858) |
Operating profit/(loss) before tax | 2,505 | (770) |
Tax (charge)/credit | (435) | 208 |
Profit/(loss) for the period | 2,070 | (562) |
Attributable to: | ||
Ordinary shareholders | 1,842 | (705) |
Preference shareholders | 9 | 16 |
Paid-in equity holders | 178 | 192 |
Non-controlling interests | 41 | (65) |
Profit/(loss) for the period | £ 2,070 | £ (562) |
Per ordinary share | ||
Earnings per ordinary share | £ 0.156 | £ (0.058) |
Earnings per ordinary share - fully diluted | £ 0.155 | £ (0.058) |
Condensed consolidated statemen
Condensed consolidated statement of comprehensive income - GBP (£) £ in Millions | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | ||
Condensed consolidated statement of comprehensive income | |||
Profit/(loss) for the period | £ 2,070 | £ (562) | |
Items that do not qualify for reclassification | |||
Remeasurement of retirement benefit schemes | [1] | (734) | 68 |
(Loss)/profit on fair value of credit in financial liabilities designated at FVTPL due to own credit risk | (25) | 83 | |
FVOCI financial assets | 8 | (120) | |
Tax | 182 | ||
Total - Items that do not qualify for reclassification | (569) | 31 | |
Items that do qualify for reclassification | |||
FVOCI financial assets | (145) | (111) | |
Cash flow hedges | (365) | 417 | |
Currency translation | (288) | 575 | |
Tax | 65 | (179) | |
Total - Items that do qualify for reclassification | (733) | 702 | |
Other comprehensive (loss)/income after tax | (1,302) | 733 | |
Total comprehensive income for the period | 768 | 171 | |
Attributable to: | |||
Ordinary shareholders | 535 | 14 | |
Preference shareholders | 9 | 16 | |
Paid-in equity holders | 178 | 192 | |
Non-controlling interests | 46 | (51) | |
Total comprehensive income for the period | £ 768 | £ 171 | |
[1] | Following the purchase of ordinary shares from UKGI in March 2021, NatWest Group contributed £ 500 million to its main pension scheme in line with the memorandum of understanding announced on 17 April 2018. After tax relief, this contribution reduced total equity by £365 million. There was also a pre tax loss of £176 million ( €205 million) in relation to the interim re-measurement of the Ulster Bank Pension Scheme (Republic of Ireland), as a result of significant movements in underlying actuarial assumptions (June 2020: net gain of £90 million ( €101 million)) . |
Consolidated statement of compr
Consolidated statement of comprehensive income (Parenthetical) € in Millions, £ in Millions | 1 Months Ended | 6 Months Ended | |||
Mar. 31, 2021GBP (£) | Jun. 30, 2021GBP (£) | Jun. 30, 2021EUR (€) | Jun. 30, 2020GBP (£) | Jun. 30, 2020EUR (€) | |
UBI DAC | |||||
Disclosure of transactions between related parties [line items] | |||||
Net (loss) gain as a result of significant movements in underlying actuarial assumptions | £ 176 | € 205 | £ (90) | € (101) | |
Main Scheme | |||||
Disclosure of transactions between related parties [line items] | |||||
Contribution under the MoU to strengthen funding of the Main section | £ 500 | ||||
Increase (decrease) in equity | £ (365) | ||||
UK Government Investments Ltd | UBI DAC | |||||
Disclosure of transactions between related parties [line items] | |||||
Net (loss) gain as a result of significant movements in underlying actuarial assumptions | £ (90) |
Condensed consolidated balance
Condensed consolidated balance sheet - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and balances at central banks | £ 151,511 | £ 124,489 |
Trading assets | 70,195 | 68,990 |
Derivatives | 109,556 | 166,523 |
Settlement balances | 7,793 | 2,297 |
Loans to banks - amortised cost | 8,176 | 6,955 |
Loans to customers - amortised cost | 362,711 | 360,544 |
Other financial assets | 51,469 | 55,148 |
Intangible assets | 6,694 | 6,655 |
Other assets | 7,753 | 7,890 |
Total assets | 775,858 | 799,491 |
Liabilities | ||
Bank deposits | 14,394 | 20,606 |
Customer deposits | 467,214 | 431,739 |
Settlement balances | 7,119 | 5,545 |
Trading liabilities | 75,847 | 72,256 |
Derivatives | 103,992 | 160,705 |
Other financial liabilities | 46,118 | 45,811 |
Subordinated liabilities | 8,696 | 9,962 |
Notes in circulation | 2,906 | 2,655 |
Other liabilities | 5,687 | 6,388 |
Total liabilities | 731,973 | 755,667 |
Equity | ||
Ordinary shareholders' interests | 37,445 | 38,367 |
Other owners' interests | 6,430 | 5,493 |
Owners' equity | 43,875 | 43,860 |
Non-controlling interests | 10 | (36) |
Total equity | 43,885 | 43,824 |
Total liabilities and equity | £ 775,858 | £ 799,491 |
Condensed consolidated statem_2
Condensed consolidated statement of changes in equity - GBP (£) £ in Millions | Called-up share capital | Paid-in equity | Share premium account | Merger reserve | FVOCI reserve | Cash flow hedging reserve | Foreign exchange reserve | Capital redemption reserve | Retained earnings | Own shares held | Shareholders' equity | Non-controlling interests | Ordinary shareholders | Preference shareholders | Total | |
Balance at Dec. 31, 2019 | £ 12,094 | £ 4,058 | £ 1,094 | £ 10,881 | £ 138 | £ 35 | £ 1,343 | £ 13,946 | £ (42) | £ 9 | ||||||
Ordinary shares issued | 31 | 16 | ||||||||||||||
Redemption/reclassification of paid-in equity (2) | [1] | (1,277) | (355) | |||||||||||||
Securities issued during the period (3) | [2] | 1,220 | ||||||||||||||
Profit/(loss) attributable to ordinary shareholders and other equity owners | (497) | |||||||||||||||
Equity preference dividends paid | (16) | |||||||||||||||
Paid-in equity dividends paid | (192) | |||||||||||||||
Realised losses in period on FVOCI equity shares | (1) | |||||||||||||||
Unrealised losses | (123) | |||||||||||||||
Realised gains | (107) | |||||||||||||||
Tax | 12 | |||||||||||||||
Amount recognized in equity | 445 | |||||||||||||||
Amount transferred from equity to earnings | (28) | |||||||||||||||
Tax | (111) | |||||||||||||||
Retranslation of net assets | 527 | |||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | (63) | |||||||||||||||
Tax | (95) | |||||||||||||||
Recycled to profit or loss on disposal of businesses (4) | [3] | 97 | ||||||||||||||
Remeasurement of the retirement benefit schemes-gross | [4] | 68 | ||||||||||||||
Remeasurement of the retirement benefit schemes, tax | [4] | 23 | ||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, gross | 83 | £ 83 | ||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, tax | (8) | |||||||||||||||
Shares issued under employee share schemes | (11) | 95 | ||||||||||||||
Share based payments | (100) | |||||||||||||||
Own shares acquired | [5] | (77) | ||||||||||||||
Currency translation adjustments and other movements | 14 | |||||||||||||||
Profit/(loss) attributable to non-controlling interests | (65) | |||||||||||||||
Balance at Jun. 30, 2020 | 12,125 | 4,001 | 1,110 | 10,881 | (80) | 341 | 1,809 | 12,940 | (24) | £ 43,103 | (42) | £ 38,608 | £ 494 | 43,061 | ||
Balance at Dec. 31, 2020 | 12,129 | 4,999 | 1,111 | 10,881 | 360 | 229 | 1,608 | 12,567 | (24) | (36) | 43,824 | |||||
Ordinary shares issued | 38 | 50 | ||||||||||||||
Securities issued during the period (3) | [2] | 937 | ||||||||||||||
Profit/(loss) attributable to ordinary shareholders and other equity owners | 2,029 | |||||||||||||||
Equity preference dividends paid | (9) | |||||||||||||||
Paid-in equity dividends paid | (178) | |||||||||||||||
Ordinary dividends paid | (347) | |||||||||||||||
Redemption of preference shares | £ 24 | (24) | ||||||||||||||
Realised losses in period on FVOCI equity shares | (1) | |||||||||||||||
Unrealised losses | (113) | |||||||||||||||
Realised gains | (23) | |||||||||||||||
Tax | 15 | |||||||||||||||
Amount recognized in equity | (323) | |||||||||||||||
Amount transferred from equity to earnings | (42) | |||||||||||||||
Tax | 59 | |||||||||||||||
Retranslation of net assets | (336) | |||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | 43 | |||||||||||||||
Tax | (11) | |||||||||||||||
Remeasurement of the retirement benefit schemes-gross | [4] | (734) | ||||||||||||||
Remeasurement of the retirement benefit schemes, tax | [4] | 182 | ||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, gross | (25) | (25) | ||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, tax | 2 | |||||||||||||||
Shares issued under employee share schemes | 17 | |||||||||||||||
Share based payments | (82) | |||||||||||||||
Own shares acquired | [5] | (748) | (384) | |||||||||||||
Currency translation adjustments and other movements | 5 | |||||||||||||||
Profit/(loss) attributable to non-controlling interests | 41 | |||||||||||||||
Share cancellation | [5] | (391) | 390 | |||||||||||||
Balance at Jun. 30, 2021 | £ 11,776 | £ 5,936 | £ 1,161 | £ 10,881 | £ 239 | £ (77) | £ 1,304 | £ 414 | £ 12,632 | £ (391) | £ 43,875 | £ 10 | £ 37,445 | £ 494 | £ 43,885 | |
[1] | In June 2020, paid-in equity reclassified to liabilities as the result of a call of US $2 billion AT1 notes. | |||||||||||||||
[2] | AT1 capital notes totalling US $750 million less fees were issued in June 2021 (£ 400 million less fees were issued in March 2021). In June 2020, AT1 capital notes totalling US $1.5 billion less fees were issued. | |||||||||||||||
[3] | In 2020, the completion of the Alawwal bank merger resulted in the derecognition of the associate investment in Alawwal bank and recognition of a new investment in SABB held at fair value through other comprehensive income (FVOCI). | |||||||||||||||
[4] | Following the a purchase of ordinary shares from UKGI in March 2021 which triggered NatWest Group contributed £500 million to its main pension scheme in line with the memorandum of understanding announced on 17 April 2018. After tax relief, this contribution reduced total equity by £365 million.There was also a pre tax loss of £176 million ( €205 million) in relation to the interim re-measurement of the Ulster Bank Pension Scheme (Republic of Ireland), as a result of significant movements in underlying actuarial assumptions (June 2020: net gain of £90 million ( €101 million)). In line with our policy, the present value of defined benefit obligations and the fair value of plan assets at the end of the interim reporting period, are assessed to identity significant market fluctuations and one-off events since the end of the prior financial yea r. | |||||||||||||||
[5] | In March 2021, there was an agreement with HM Treasury to buy 591 million ordinary shares in the Company from UK Government Investments Ltd (UKGI), at 190.5 p per share for the total consideration of £1.13 billion. NatWest Group cancelled 391 million of the purchased ordinary shares, amounting to £744 million excluding fees, and held the remaining 200 million in own shares held, amounting to £381 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve. |
Condensed consolidated statem_3
Condensed consolidated statement of changes in equity (Parenthetical) € in Millions, £ in Millions, shares in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | |
Mar. 31, 2021GBP (£)£ / sharesshares | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | |
AT1 capital notes called | $ | $ 2,000 | ||
Main Scheme | |||
Contribution under the MoU to strengthen funding of the Main section | £ 500 | ||
Increase (decrease) in equity | (365) | ||
AT1 capital notes | |||
Issue of AT1 capital notes | £ 400 | $ 750 | $ 1,500 |
UK Government Investments Ltd | |||
Ordinary shares acquired (in shares) | shares | 591 | ||
Ordinary shares purchase price per share | £ / shares | £ 1.905 | ||
Value of purchased ordinary shares | £ 1,130 | ||
NatWest Group | |||
Number of purchased ordinary shares cancelled | shares | 391 | ||
Share cancellation | £ 744 | ||
Treasury stock, own shares held | shares | 200 | ||
Value of ordinary shares purchased and held | £ 381 |
Condensed consolidated cash flo
Condensed consolidated cash flow statement - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Operating profit/(loss) before tax | £ 2,505 | £ (770) |
Adjustments for non-cash items | 2,635 | 1,271 |
Net cash flows from trading activities | 5,140 | 501 |
Changes in operating assets and liabilities | 25,745 | 14,281 |
Net cash flows from operating activities before tax | 30,885 | 14,782 |
Income taxes paid | (259) | (231) |
Net cash flows from operating activities | 30,626 | 14,551 |
Net cash flows from investing activities | (790) | 2,035 |
Net cash flows from financing activities | (359) | 2,748 |
Effects of exchange rate changes on cash and cash equivalents | (1,935) | 2,752 |
Net increase in cash and cash equivalents | 27,542 | 22,086 |
Cash and cash equivalents at beginning of period | 139,199 | 100,588 |
Cash and cash equivalents at end of period | £ 166,741 | £ 122,674 |
Basis of preparation
Basis of preparation | 6 Months Ended |
Jun. 30, 2021 | |
Basis of preparation | |
Basis of preparation | 1. Basis of preparation The condensed consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and UK adopted IAS 34 ‘Interim Financial Reporting’. They should be read in conjunction with NatWest Group plc’s 2020 Annual Report on Form 20-F which were prepared in accordance with International Financial Reporting Standards in conformity with the requirements of the Companies Act 2006 and with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. NatWest Group plc 2021 Annual Report on Form 20-F will be prepared in accordance with UK adopted with International Financial Reporting Standards. Going concern Having reviewed NatWest Group’s forecasts, projections, the potential impact of COVID-19, and other relevant evidence, the directors have a reasonable expectation that NatWest Group will continue in operational existence for a period of not less than twelve months. Accordingly, the results for the period ended 30 June 2021 have been prepared on a going concern basis. |
Accounting policies
Accounting policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting policies | |
Accounting policies | 2. Accounting policies NatWest Group’s principal accounting policies are as set out on pages 263 to 267 of the NatWest Group plc 2020 Annual Report on Form 20-F. Changes to accounting policies from 1 January 2021 had no material effect on NatWest Group plc’s accounts. Critical accounting policies and key sources of estimation uncertainty The judgements and assumptions that are considered to be the most important to the portrayal of NatWest Group’s financial condition are those relating to deferred tax, fair value of financial instruments, loan impairment provisions, goodwill and provisions for liabilities and charges. These critical accounting policies and judgements are referenced on page 267 of the NatWest Group plc 2020 Annual Report on Form 20-F. Estimation uncertainty has been affected by the COVID-19 pandemic. Management’s consideration of this source of uncertainty is outlined in the relevant sections of the NatWest Group plc 2020 Annual Report on Form 20-F, including the ECL estimate for the period in the Risk and capital management section contained in the NatWest Group plc 2020 Annual Report on Form 20-F. Information used for significant estimates The COVID-19 pandemic has continued to cause significant economic and social disruption. Key financial estimates are based on a range of anticipated future economic conditions described by internally developed scenarios. Measurement of goodwill, deferred tax and expected credit losses are highly sensitive to reasonably possible changes in those anticipated conditions. Other reasonably possible assumptions about the future include a prolonged financial effect of the COVID-19 pandemic on the economy of the UK and other countries. Changes in judgements and assumptions could result in a material adjustment to those estimates in the next reporting periods. Refer to the NatWest Group plc Risk factors section in the 2020 Annual Report on Form 20-F. |
Analysis of income, expenses an
Analysis of income, expenses and impairment losses | 6 Months Ended |
Jun. 30, 2021 | |
Analysis of income, expenses and impairment losses. | |
Analysis of income, expenses and impairment losses | 3. Analysis of income, expenses and impairment losses Half year ended 30 June 30 June 2021 2020 £m £m Loans to customers - amortised cost 4,433 4,698 Loans to banks - amortised cost 217 189 Other financial assets 132 303 Interest receivable 4,782 5,190 Deposits by banks 99 89 Customer deposits 319 432 Other financial liabilities 314 481 Subordinated liabilities 130 218 Internal funding of trading businesses 4 118 Interest payable 866 1,338 Net interest income 3,916 3,852 Net fees and commissions 1,027 1,038 Foreign exchange 183 344 Interest rate (6) 472 Credit 54 (68) Own credit adjustment — 53 Equity, commodities and other — 1 Income from trading activities 231 802 Loss on redemption of own debt (1) (138) — Operating lease and other rental income 108 119 Changes in fair value of financial assets or liabilities designated at fair value through profit or loss (2) (4) (21) Changes in fair value of other financial assets at fair value through profit or loss — (10) Hedge ineffectiveness 13 (10) Loss on disposal of amortised assets (6) (16) Profit on disposal of fair value through other comprehensive income assets 24 108 Profit on sale of property, plant and equipment 6 11 Share of profit of associated entities 129 12 Profit/(loss) on disposal of subsidiaries and associates 1 (99) Other income (3) 12 52 Other operating income 145 146 Total non-interest income 1,403 1,986 Total income 5,319 5,838 Salaries 1,192 1,290 Bonus awards 142 179 Temporary and contract costs 114 148 Social security costs 152 153 Pension costs 177 164 - defined benefit schemes 110 101 - defined contribution schemes 67 63 Other 125 21 Staff costs 1,902 1,955 Premises and equipment (4) 502 651 Depreciation and amortisation (5) 414 448 Other administrative expenses (6) 703 696 Administrative expenses 1,619 1,795 Operating expenses 3,521 3,750 Impairment releases/(losses) 707 (2,858) Impairments as a % of gross loans to customers 0.38 % 1.59 % Notes: (1) Representing day one loss on redemption of own debt related to the repurchase of legacy instruments. (2) Includes related derivatives. (3) Includes income from activities other than banking. (4) 30 June 2021 includes cost of £20 million including accelerated depreciation of £12 million (30 June 2020 - £102 million including £40 million accelerated depreciation) in relation to the planned reduction of the property portfolio (30 June 2021 – freehold £1 million; leasehold £19 million; 30 June 2020 - leasehold £102 million). (5) 30 June 2021 includes a £23 million charge relating to the reduction in property portfolio, leasehold £19 million and freehold £4 million (30 June 2020 - £43 million charge, leasehold £43 million). (6) Includes litigation and conduct costs. |
Segmental analysis
Segmental analysis | 6 Months Ended |
Jun. 30, 2021 | |
Segmental analysis | |
Segmental analysis | 4. Segmental analysis The business is organised into the following reportable segments: Personal Banking, Private Banking, Commercial Banking, RBS International (RBSI), NatWest Markets, Ulster Bank RoI and Central items & other. Analysis of operating profit/(loss) before tax The following tables provide a segmental analysis of operating profit/(loss) before tax by the main income statement captions. International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items & Banking Banking Banking International Markets RoI other (1) Total Half year ended 30 June 2021 £m £m £m £m £m £m £m £m Net interest income 1,976 232 1,308 182 (3) 187 34 3,916 Net fees and commissions 173 124 560 59 83 38 (10) 1,027 Other non-interest income 1 12 55 15 215 18 60 376 Total income 2,150 368 1,923 256 295 243 84 5,319 Operating expenses (1,187) (249) (1,152) (112) (560) (261) — (3,521) Impairment releases/(losses) 57 27 568 29 16 11 (1) 707 Operating profit/(loss) 1,020 146 1,339 173 (249) (7) 83 2,505 Half year ended 30 June 2020 Net interest income 1,982 251 1,370 201 (34) 194 (112) 3,852 Net fees and commissions 204 130 552 43 76 44 (11) 1,038 Other non-interest income (1) 11 81 15 774 11 57 948 Total income 2,185 392 2,003 259 816 249 (66) 5,838 Operating expenses (1,075) (252) (1,221) (126) (707) (245) (124) (3,750) Impairment losses (657) (56) (1,790) (46) (40) (243) (26) (2,858) Operating profit/(loss) 453 84 (1,008) 87 69 (239) (216) (770) Note: (1) 30 June 2021 predominantly relates to interest receivable in Treasury and 30 June 2020 predominantly related to interest receivable in Treasury and strategic disposals in Functions. Total revenue (1) International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items & Banking Banking Banking International Markets RoI Other Total Half year ended 30 June 2021 £m £m £m £m £m £m £m £m External 2,667 358 1,861 278 523 275 508 6,470 Inter-segmental 14 60 43 3 17 — (137) — Total 2,681 418 1,904 281 540 275 371 6,470 Half year ended 30 June 2020 External 2,764 358 2,009 269 1,328 277 563 7,568 Inter-segmental 24 99 47 3 4 — (177) — Total 2,788 457 2,056 272 1,332 277 386 7,568 Note: (1) Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income. Notes 4. Segmental analysis continued Analysis of net fees and commissions International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items Banking Banking Banking International Markets RoI & other Total Half year ended 30 June 2021 £m £m £m £m £m £m £m £m Fees and commissions receivable - Payment services 145 16 255 6 10 28 — 460 - Credit and debit card fees 149 4 69 1 — 8 — 231 - Lending and financing 6 4 242 28 34 7 — 321 - Investment management, trustee and fiduciary services 1 113 — 22 — 1 — 137 - Underwriting fees — — — — 77 — — 77 - Other 32 19 63 3 25 — (56) 86 Total 333 156 629 60 146 44 (56) 1,312 Fees and commissions payable (160) (32) (69) (1) (63) (6) 46 (285) Net fees and commissions 173 124 560 59 83 38 (10) 1,027 Half year ended 30 June 2020 Fees and commissions receivable - Payment services 129 14 256 9 9 28 — 445 - Credit and debit card fees 144 4 60 1 — 10 — 219 - Lending and financing 37 2 241 15 46 7 — 348 - Investment management, trustee and fiduciary services 1 113 — 17 — 1 — 132 - Underwriting fees — — — — 124 — — 124 - Other 34 18 48 2 98 2 (40) 162 Total 345 151 605 44 277 48 (40) 1,430 Fees and commissions payable (141) (21) (53) (1) (201) (4) 29 (392) Net fees and commissions 204 130 552 43 76 44 (11) 1,038 Total assets and liabilities International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items & Banking Banking Banking International Markets RoI other Total 30 June 2021 £m £m £m £m £m £m £m £m Assets 204,167 27,686 185,757 36,953 219,447 25,422 76,426 775,858 Liabilities 187,851 34,808 183,837 34,843 206,160 21,872 62,602 731,973 31 December 2020 Assets 197,618 26,206 187,413 33,984 270,147 26,620 57,503 799,491 Liabilities 178,617 32,457 174,251 31,989 254,098 22,993 61,262 755,667 |
Tax
Tax | 6 Months Ended |
Jun. 30, 2021 | |
Tax | |
Tax | 5. Tax The actual tax charge differs from the expected tax charge computed by applying the standard UK corporation tax rate of 19% (2020 - 19%), as analysed below: Half year ended 30 June 30 June 2021 2020 £m £m Profit/(loss) before tax 2,505 (770) Expected tax (charge)/credit (476) 146 Losses and temporary differences in period where no deferred tax assets recognised (6) (38) Foreign profits taxed at other rates 4 (24) Items not allowed for tax: - losses on disposals and write-downs (3) (14) - UK bank levy (11) (15) - regulatory and legal actions 3 20 - other disallowable items (10) (23) Non-taxable items 25 68 Taxable foreign exchange movements — (2) Losses bought forward and utilised 6 23 Decrease in the carrying value of deferred tax assets in respect of: - UK losses (5) (56) - Ireland losses (35) (20) Banking surcharge (173) 52 Tax on paid-in equity 32 38 UK tax rate change impact 206 75 Adjustments in respect of prior periods 8 (22) Actual tax (charge)/credit (435) 208 At 30 June 2021, NatWest Group has recognised a deferred tax asset of £1,150 million (31 December 2020 - £901 million) and a deferred tax liability of £303 million (31 December 2020 - £291 million). These include amounts recognised in respect of UK trading losses of £972 million (31 December 2020 - £862 million). Under UK tax legislation, these UK losses can be carried forward indefinitely. NatWest Group has considered the carrying value of this asset as at 30 June 2021 and concluded that it is recoverable based on future profit projections. It was announced in the UK Government’s Budget on 3 March 2021 that the main UK corporation tax rate will increase from 19% to 25% from 1 April 2023. This legislative change was enacted on 10 June 2021. NatWest Group’s closing deferred tax assets and liabilities have therefore been recalculated taking into account this change of rate and the applicable period the deferred tax assets and liabilities are expected to crystallise. As a result, the net deferred tax asset position in NatWest Group has increased by £176 million, with a £206 million credit included in the income statement (refer to reconciling item above), and a £30 million charge included in other comprehensive income. There is an ongoing HM Treasury review of the bank surcharge rate to ensure that the combined rate of corporation tax applicable to banking entities remains competitive. |
Trading assets and liabilities
Trading assets and liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Trading assets and liabilities | |
Trading assets and liabilities | 6. Trading assets and liabilities Trading assets and liabilities comprise assets and liabilities held at fair value in trading portfolios. 30 June 31 December 2021 2020 Assets £m £m Loans Reverse repos 24,718 19,404 Collateral given 12,955 18,760 Other loans 1,154 1,611 Total loans 38,827 39,775 Securities Central and local government - UK 5,121 4,184 - US 4,088 5,149 - other 18,347 16,436 Financial institutions and corporate 3,812 3,446 Total securities 31,368 29,215 Total 70,195 68,990 Liabilities Deposits Repos 23,720 19,036 Collateral received 17,165 23,229 Other deposits 1,646 1,804 Total deposits 42,531 44,069 Debt securities in issue 1,205 1,408 Short positions 32,111 26,779 Total 75,847 72,256 |
Financial instruments_ classifi
Financial instruments: classification | 6 Months Ended |
Jun. 30, 2021 | |
Financial instruments: classification | |
Financial instruments: classification | Notes 7. Financial instruments Financial instruments: classification The following tables analyse financial assets and liabilities in accordance with the categories of financial instruments on an IFRS 9 basis. Assets and liabilities outside the scope of IFRS 9 are shown within other assets and other liabilities. Amortised Other MFVTPL FVOCI cost assets Total Assets £m £m £m £m £m Cash and balances at central banks 151,511 151,511 Trading assets 70,195 70,195 Derivatives (1) 109,556 109,556 Settlement balances 7,793 7,793 Loans to banks - amortised cost (2) 8,176 8,176 Loans to customers - amortised cost (3) 362,711 362,711 Other financial assets 340 42,085 9,044 51,469 Intangible assets 6,694 6,694 Other assets 7,753 7,753 30 June 2021 180,091 42,085 539,235 14,447 775,858 Cash and balances at central banks 124,489 124,489 Trading assets 68,990 68,990 Derivatives (1) 166,523 166,523 Settlement balances 2,297 2,297 Loans to banks - amortised cost (2) 6,955 6,955 Loans to customers - amortised cost (3) 360,544 360,544 Other financial assets 440 44,902 9,806 55,148 Intangible assets 6,655 6,655 Other assets 7,890 7,890 31 December 2020 235,953 44,902 504,091 14,545 799,491 Held-for- Amortised Other trading DFV cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (4) 14,394 14,394 Customer deposits 467,214 467,214 Settlement balances 7,119 7,119 Trading liabilities 75,847 75,847 Derivatives (1) 103,992 103,992 Other financial liabilities 1,961 44,157 46,118 Subordinated liabilities 744 7,952 8,696 Notes in circulation 2,906 2,906 Other liabilities (5) 1,818 3,869 5,687 30 June 2021 179,839 2,705 545,560 3,869 731,973 Bank deposits (4) 20,606 20,606 Customer deposits 431,739 431,739 Settlement balances 5,545 5,545 Trading liabilities 72,256 72,256 Derivatives (1) 160,705 160,705 Other financial liabilities 2,403 43,408 45,811 Subordinated liabilities 793 9,169 9,962 Notes in circulation 2,655 2,655 Other liabilities (5) 1,882 4,506 6,388 31 December 2020 232,961 3,196 515,004 4,506 755,667 Notes: (1) Includes net hedging derivatives assets of £42 million (31 December 2020 - £93 million) and net hedging derivatives liabilities of £136 million (31 December 2020 - £130 million). (2) Includes items in the course of collection from other banks of £275 million (31 December 2020 - £148 million). (3) Includes finance lease receivables of £ 8,765 million (31 December 2020 - £ 9,061 million). (4) Includes items in the course of transmission to other banks of £92 million (31 December 2020 - £12 million). (5) Includes lease liabilities of £1,652 million (31 December 2020 - £1,698 million). Notes 7. Financial instruments continued NatWest Group's financial assets and liabilities include: 30 June 31 December 2021 2020 £m £m Reverse repos Trading assets 24,718 19,404 Loans to banks - amortised cost 382 153 Loans to customers - amortised cost 22,706 25,011 Repos Bank deposits 4,261 6,470 Customer deposits 16,751 5,167 Trading liabilities 23,720 19,036 Interest rate benchmark reform NatWest Group continues to implement its entity-wide IBOR reform programme with the aim of being ready for the various transition events which are expected to occur prior to the cessation of the vast majority of the IBOR benchmark rates at the end of 2021 and of the USD IBOR in 2023. NatWest Group continues to develop new products across its different segments that reference the new alternative risk-free rates and continues to work with customers to assess their readiness and ability to adopt new products, transition existing products or take the necessary steps to ensure that products can transition at IBOR cessation. A comprehensive review of the effect of IBOR reform on funding, liquidity and risk management has also been conducted and NatWest Group will continue to adapt its key systems, methodologies and processes to meet the requirements of the new risk-free rates. This is expected to be fully implemented over the course of 2021 and by June 2023 for USD IBOR. NatWest Group expects that the vast majority of non-derivative instruments will transition in H2 2021 or the first reset date of the interest rate after cessation via renegotiation with clients or fallback provisions. Derivatives that are subject to clearing are expected to transition in line with the relevant clearing house transition approaches while other derivatives are expected to transition using the ISDA fallback protocol. NatWest Group also remains engaged with regulators, standard setters and other market participants on key matters related to the IBOR reform. It is expected that the programme will meet all timelines set by the regulators. Notes 7. Financial instruments continued Financial instruments - valuation hierarchy Disclosures relating to the control environment, valuation techniques and related aspects pertaining to financial instruments measured at fair value are included in the NatWest Group plc 2020 Annual Report on Form 20-F. Valuation, sensitivity methodologies and inputs at 30 June 2021 are consistent with those described in Note 12 to the NatWest Group plc 2020 Annual Report on Form 20-F. The tables below show financial instruments carried at fair value on the balance sheet by valuation hierarchy - level 1, level 2 and level 3 and valuation sensitivities for level 3 balances. 30 June 2021 31 December 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total £m £m £m £m £m £m £m £m Assets Trading assets Loans — 38,664 163 38,827 — 39,550 225 39,775 Securities 22,048 9,205 115 31,368 21,535 7,599 81 29,215 Derivatives — 108,622 934 109,556 — 165,441 1,082 166,523 Other financial assets Loans — 394 588 982 — 185 168 353 Securities 32,422 8,827 194 41,443 35,972 8,850 167 44,989 Total financial assets held at fair value 54,470 165,712 1,994 222,176 57,507 221,625 1,723 280,855 Liabilities Trading liabilities Deposits — 42,528 3 42,531 — 44,062 7 44,069 Debt securities in issue — 1,205 — 1,205 — 1,408 — 1,408 Short positions 23,659 8,451 1 32,111 19,045 7,734 — 26,779 Derivatives — 103,311 681 103,992 — 159,818 887 160,705 Other financial liabilities Debt securities in issue — 1,243 — 1,243 — 1,607 — 1,607 Other deposits — 718 — 718 — 796 — 796 Subordinated liabilities — 744 — 744 — 793 — 793 Total financial liabilities held at fair value 23,659 158,200 685 182,544 19,045 216,218 894 236,157 Notes: (1) Level 1 - Instruments valued using unadjusted quoted prices in active and liquid markets, for identical financial instruments. Examples include government bonds, listed equity shares and certain exchange-traded derivatives. Level 2 - Instruments valued using valuation techniques that have observable inputs. Examples include most government agency securities, investment-grade corporate bonds, certain mortgage products, including CLOs, most bank loans, repos and reverse repos, less liquid listed equities, state and municipal obligations, most notes issued, and certain money market securities and loan commitments and most OTC derivatives. Level 3 - Instruments valued using a valuation technique where at least one input which could have a significant effect on the instrument's valuation, is not based on observable market data. Examples include cash instruments which trade infrequently, certain syndicated and commercial mortgage loans, certain emerging markets and derivatives with unobservable model inputs. (2) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. There were no significant transfers between level 1 and level 2. (3) For an analysis of debt securities held at mandatorily fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Risk and capital management – Credit risk. (4) The determination of an instrument’s level cannot be made at a global product level as a single product type can be in more than one level. For example, a single name corporate credit default swap could be in level 2 or level 3 depending on whether the reference counterparty’s obligations are liquid or illiquid. Notes 7. Financial instruments continued Financial instruments: sensitivity analysis 30 June 2021 31 December 2020 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 163 10 — 225 10 — Securities 115 10 — 81 — — Derivatives 934 60 (70) 1,082 80 (80) Other financial assets Loans 588 30 (50) 168 20 (10) Securities 194 30 (20) 167 30 (20) Total financial assets held at fair value 1,994 140 (140) 1,723 140 (110) Liabilities Trading liabilities Deposits 3 — — 7 — — Short Positions 1 — — — — — Derivatives 681 40 (40) 887 50 (40) Total financial liabilities held at fair value 685 40 (40) 894 50 (40) Reasonably plausible alternative assumptions of unobservable inputs are determined based on a specified target level of certainty of 90%. The assessments recognise different favourable and unfavourable valuation movements where appropriate. Each unobservable input within a product is considered separately and sensitivity is reported on an additive basis. Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information taking into account consistency between different sources, variation over time, perceived tradability or otherwise of available quotes; consensus service dispersion ranges; volume of trading activity and market bias (e.g. one-way inventory); day 1 profit or loss arising on new trades; number and nature of market participants; market conditions; modelling consistency in the market; size and nature of risk; length of holding of position; and market intelligence. Movement in level 3 portfolios The following table shows the movement in level 3 assets and liabilities. Half year ended 30 June 2021 Half year ended 30 June 2020 Other Other Trading financial Total Total Trading financial Total Total assets assets assets liabilities assets (1) assets (2) assets liabilities £m £m £m £m £m £m £m £m At 1 January 1,388 335 1,723 894 2,233 321 2,554 1,317 Amount recorded in the income statement (3) (125) 3 (122) (98) 313 (1) 312 97 Amount recorded in the statement of comprehensive income — 17 17 — — 62 62 — Level 3 transfers in 42 428 470 15 133 207 340 6 Level 3 transfers out (68) — (68) (116) (101) — (101) (337) Purchases 168 10 178 114 366 10 376 100 Settlements (36) (4) (40) (15) (113) — (113) (14) Sales (156) (4) (160) (107) (933) (1) (934) (164) Foreign exchange and other adjustments (1) (3) (4) (2) 5 8 13 3 At 30 June 1,212 782 1,994 685 1,903 606 2,509 1,008 Amounts recorded in the income statement in respect of balances held at year end - unrealised (125) 3 (122) (98) 313 (1) 312 97 Notes: (1) Trading assets comprise assets held at fair value in trading portfolios. (2) Other financial assets comprise fair value through other comprehensive income, designated at fair value through profit or loss and other fair value through profit or loss.Movement in the period primarily reflects increase in loan positions classified as HTC&S under IFRS 9 and fair valued through other comprehensive income. (3) £27 million net losses on trading assets and liabilities (30 June 2020 - £215 million net gains) were recorded in income from trading activities. Net gains on other instruments of £3 million (30 June 2020 - nil gains) were recorded in other operating income and interest income as appropriate. Notes 7. Financial instruments continued Valuation reserves When valuing financial instruments in the trading book, adjustments are made to mid-market valuations to cover bid-offer spread, funding and credit risk. These adjustments are presented in the table below: 30 June 31 December 2021 2020 £m £m Funding - FVA 79 140 Credit - CVA 385 390 Bid - Offer 108 148 Product and deal specific 163 172 735 850 ● Valuation reserves comprising of credit valuation adjustments (CVA), funding valuation adjustment (FVA), bid-offer and product and deal specific reserves, decreased to £735 million at 30 June 2021 (31 December 2020 – £850 million). ● There was a reallocation of FVA to CVA during the period following an update to the risk management of certain exposures. ● The net decrease across CVA, FVA and bid-offer reserves was driven by reduced exposures, due to increases in interest rates and trade exit activity, and reduced risk. Notes 7. Financial instruments continued Financial instruments: fair value of financial instruments measured at amortised cost The following table shows the carrying value and fair value of financial instruments carried at amortised cost on the balance sheet. Items where fair value approximates Carrying Fair value hierarchy level carrying value value Fair value Level 1 Level 2 Level 3 30 June 2021 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 151.5 Settlement balances 7.8 Loans to banks 0.3 7.9 7.9 5.0 2.9 Loans to customers 362.7 359.8 25.3 334.5 Other financial assets Securities 9.0 9.1 5.4 0.9 2.8 Financial liabilities Bank deposits 5.9 8.5 8.5 3.7 4.8 Customer deposits 388.1 79.1 79.1 20.7 58.4 Settlement balances 7.1 Other financial liabilities Debt securities in issue 44.2 45.3 — 34.9 10.4 Subordinated liabilities 8.0 8.5 — 8.4 0.1 Notes in circulation 2.9 31 December 2020 Financial assets Cash and balances at central banks 124.5 Settlement balances 2.3 Loans to banks 0.1 6.9 6.9 — 3.8 3.1 Loans to customers 360.5 359.2 — 25.2 334.0 Other financial assets Securities 9.8 10.1 5.9 1.2 3.0 Financial liabilities Bank deposits 4.4 16.2 16.2 — 11.3 4.9 Customer deposits 371.7 60.0 60.1 — 10.1 50.0 Settlement balances 5.5 Other financial liabilities Debt securities in issue 43.4 44.6 — 34.7 9.9 Subordinated liabilities 9.2 9.8 — 9.7 0.1 Notes in circulation 2.7 The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Quoted market values are used where available; otherwise, fair values have been estimated based on discounted expected future cash flows and other valuation techniques. These techniques involve uncertainties and require assumptions and judgments covering prepayments, credit risk and discount rates. Furthermore, there is a wide range of potential valuation techniques. Changes in these assumptions would affect estimated fair values. The fair values reported would not necessarily be realised in an immediate sale or settlement. |
Provisions for liabilities and
Provisions for liabilities and charges | 6 Months Ended |
Jun. 30, 2021 | |
Provision for liabilities and charges | |
Provisions for liabilities and charges | 8. Provisions for liabilities and charges Litigation and Financial Customer other commitments redress regulatory Property and guarantees Other Total £m £m £m £m £m £m At 1 January 749 365 270 179 289 1,852 Expected credit losses impairment charge — — — 6 — 6 Currency translation and other movements (3) (5) — (1) (2) (11) Charge to income statement 17 8 13 — 60 98 Release to income statement (4) (10) (8) — (9) (31) Provisions utilised (222) (11) (10) — (55) (298) At 31 March 537 347 265 184 283 1,616 Expected credit losses impairment release — — — (18) — (18) Currency translation and other movements — — 1 — (8) (7) Charge to income statement 32 1 22 — 42 97 Release to income statement (7) (68) (20) — (10) (105) Provisions utilised (87) (20) (8) — (62) (177) At 30 June 475 260 260 166 245 1,406 Notes: (1) Includes payment protection insurance provision which reflects the estimated cost of PPI redress attributable to claims prior to the Financial Conduct Authority (FCA) complaint deadline of 29 August 2019. All pre-deadline complaints have been processed which removes complaint volume estimation uncertainty from the provision estimate. NatWest Group continues to conclude remaining bank-identified closure work and conclude cases with the Financial Ombudsmen Service. (2) Other materially comprises provisions relating to restructuring costs. Provisions are liabilities of uncertain timing or amount and are recognised when there is a present obligation as a result of a past event, the outflow of economic benefit is probable and the outflow can be estimated reliably. Any difference between the final outcome and the amounts provided will affect the reported results in the period when the matter is resolved. |
Dividends
Dividends | 6 Months Ended |
Jun. 30, 2021 | |
Dividends | |
Dividends | 9. Dividends The 2020 final dividend was approved by shareholders at the Annual General Meeting on 28 April 2021 and the payment made on 4 May 2021 to shareholders on the register at the close of business on 26 March 2021. NatWest Group plc announces an interim dividend for 2021 of £347 million, or 3p per ordinary share. The interim dividend will be paid on 17 September 2021 to shareholders on the register at close of business on 13 August 2021. The ex-dividend date will be 12 August 2021. |
Loan impairment provisions
Loan impairment provisions | 6 Months Ended |
Jun. 30, 2021 | |
Loan impairment provisions | |
Loan impairment provisions | 10. Loan impairment provisions Loan exposure and impairment metrics The table below summarises loans and related credit impairment measures on an IFRS 9 basis. 30 June 31 December 2021 2020 £m £m Loans - amortised cost and FVOCI Stage 1 316,701 287,124 Stage 2 53,188 78,917 Stage 3 5,703 6,358 Of which: individual 1,851 2,292 Of which: collective 3,852 4,066 375,592 372,399 ECL provisions (1) Stage 1 433 519 Stage 2 2,300 3,081 Stage 3 2,192 2,586 Of which: individual 560 831 Of which: collective 1,632 1,755 4,925 6,186 ECL provisions coverage (2, 3) Stage 1 (%) 0.14 0.18 Stage 2 (%) 4.32 3.90 Stage 3 (%) 38.44 40.67 1.31 1.66 Half year ended 30 June 30 June 2021 2020 £m £m Impairment losses ECL (release)/charge (4) (707) 2,858 Stage 1 (701) 308 Stage 2 (100) 2,150 Stage 3 94 400 Of which: individual (25) 131 Of which: collective 119 269 ECL loss rate - annualised (basis points) (3) (38) 154 Amounts written off 517 408 Of which: individual 256 41 Of which: collective 261 367 Notes: (1) Includes £6 million (31 December 2020 - £6 million) related to assets classified as FVOCI. (2) ECL provisions coverage is calculated as ECL provisions divided by loans. (3) ECL provisions coverage and ECL loss rates are calculated on third party loans and related ECL provisions and charge respectively. ECL loss rate is calculated as annualised third party ECL charge divided by loans. The half year ECL charge is annualised by multiplying by two. (4) Includes a £4 million charge (30 June 2020 – £5 million charge) related to other financial assets, of which nil (30 June 2020 – £4 million) related to assets classified as FVOCI; and £2 million (30 June 2020 - £8 million) related to contingent liabilities. (5) The table shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to page 33 for Financial instruments within the scope of the IFRS 9 ECL framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £150.5 billion (31 December 2020 – £122.7 billion) and debt securities of £49.8 billion (31 December 2020 – £53.8 billion). |
Contingent liabilities and comm
Contingent liabilities and commitments | 6 Months Ended |
Jun. 30, 2021 | |
Contingent liabilities and commitments | |
Contingent liabilities and commitments | Notes 11. Contingent liabilities and commitments The amounts shown in the table below are intended only to provide an indication of the volume of business outstanding at 30 June 2021. Although NatWest Group is exposed to credit risk in the event of a customer’s failure to meet its obligations, the amounts shown do not, and are not intended to, provide any indication of NatWest Group’s expectation of future losses. 30 June 31 December 2021 2020 £m £m Guarantees 2,005 2,244 Other contingent liabilities 2,117 2,321 Standby facilities, credit lines and other commitments 119,387 124,167 Contingent liabilities and commitments 123,509 128,732 Contingent liabilities arise in the normal course of NatWest Group's business; credit exposure is subject to the bank’s normal controls. |
Litigation and regulatory matte
Litigation and regulatory matters | 6 Months Ended |
Jun. 30, 2021 | |
Litigation and regulatory matters | |
Litigation and regulatory matters | 12.Litigation and regulatory matters NatWest Group plc and certain members of NatWest Group are party to legal proceedings and involved in regulatory matters, including as the subject of investigations and other regulatory and governmental action (‘Matters’) in the United Kingdom (UK), the United States (US), the European Union (EU) and other jurisdictions. NatWest Group recognises a provision for a liability in relation to these Matters when it is probable that an outflow of economic benefits will be required to settle an obligation resulting from past events, and a reliable estimate can be made of the amount of the obligation. In many of these Matters, it is not possible to determine whether any loss is probable, or to estimate reliably the amount of any loss, either as a direct consequence of the relevant proceedings and regulatory matters or as a result of adverse impacts or restrictions on NatWest Group’s reputation, businesses and operations. Numerous legal and factual issues may need to be resolved, including through potentially lengthy discovery and document production exercises and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the proceedings in question, before a liability can reasonably be estimated for any claim. NatWest Group cannot predict if, how, or when such claims will be resolved or what the eventual settlement, damages, fine, penalty or other relief, if any, may be, particularly for claims that are at an early stage in their development or where claimants seek substantial or indeterminate damages. There are situations where NatWest Group may pursue an approach that in some instances leads to a settlement agreement. This may occur in order to avoid the expense, management distraction or reputational implications of continuing to contest liability, or in order to take account of the risks inherent in defending claims or regulatory matters, even for those Matters for which NatWest Group believes it has credible defences and should prevail on the merits. The uncertainties inherent in all such Matters affect the amount and timing of any potential outflows for both Matters with respect to which provisions have been established and other contingent liabilities. The future outflow of resources in respect of any Matter may ultimately prove to be substantially greater than or less than the aggregate provision that NatWest Group has recognised. Where (and as far as) liability cannot be reasonably estimated, no provision has been recognised. NatWest Group expects that in future periods, additional provisions, settlement amounts and customer redress payments will be necessary, in amounts that are expected to be substantial in some instances. For a discussion of certain risks associated with NatWest Group’s litigation and regulatory matters (including investigations and customer redress programmes), see the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on page 363 of NatWest Group plc’s 2020 Annual Report on Form 20-F. Litigation Residential mortgage-backed securities (RMBS) litigation in the US NatWest Group companies continue to defend RMBS-related claims in the US in which plaintiffs allege that certain disclosures made in connection with the relevant offerings of RMBS contained materially false or misleading statements and/or omissions regarding the underwriting standards pursuant to which the mortgage loans underlying the RMBS were issued. The remaining RMBS lawsuits against NatWest Group companies consist of cases filed by the Federal Deposit Insurance Corporation and the State of New Mexico that together involve the issuance of less than US$400 million of RMBS issued primarily from 2005 to 2007. In addition, NWMSI previously agreed to settle a purported RMBS class action entitled New Jersey Carpenters Health Fund v. Novastar Mortgage Inc. et al. for US$55.3 million. This was paid into escrow pending court approval of the settlement, which was granted in March 2019, but which is now the subject of an appeal by a class member who does not want to participate in the settlement. London Interbank Offered Rate (LIBOR) and other rates litigation NWM Plc and certain other members of NatWest Group, including NatWest Group plc, are defendants in a number of class actions and individual claims pending in the United States District Court for the Southern District of New York (SDNY) with respect to the setting of LIBOR and certain other benchmark interest rates. The complaints allege that certain members of NatWest Group and other panel banks violated various federal laws, including the US commodities and antitrust laws, and state statutory and common law, as well as contracts, by manipulating LIBOR and prices of LIBOR-based derivatives in various markets through various means. Several class actions relating to USD LIBOR, as well as more than two dozen non-class actions concerning USD LIBOR, are part of a co-ordinated proceeding in the SDNY. In December 2016, the SDNY held that it lacks personal jurisdiction over NWM Plc with respect to certain claims. As a result of that and other decisions, all NatWest Group companies have been dismissed from each of the USD LIBOR-related class actions (including class actions on behalf of over-the-counter plaintiffs, exchange-based purchaser plaintiffs, bondholder plaintiffs, and lender plaintiffs), but seven non-class cases in the co-ordinated proceeding remain pending against NatWest Group defendants. The dismissal of NatWest Group companies for lack of personal jurisdiction is the subject of a pending appeal to the United States Court of Appeals for the Second Circuit. In March 2020, NatWest Group companies finalised a settlement resolving the class action on behalf of bondholder plaintiffs (those who held bonds issued by non-defendants on which interest was paid from 2007 to 2010 at a rate expressly tied to USD LIBOR). The amount of the settlement (which was covered by an existing provision) has been paid into escrow pending court approval of the settlement. Notes 12. Litigation and regulatory matters continued Among the non-class claims dismissed by the SDNY in December 2016 were claims that the Federal Deposit Insurance Corporation (FDIC) had asserted on behalf of certain failed US banks. In July 2017, the FDIC, on behalf of 39 failed US banks, commenced substantially similar claims against NatWest Group companies and others in the High Court of Justice of England and Wales. The action alleges that the defendants breached English and European competition law, as well as asserting common law claims of fraud under US law. In addition, there are two class actions relating to JPY LIBOR and Euroyen TIBOR. The first class action, which relates to Euroyen TIBOR futures contracts, was dismissed by the SDNY in September 2020 on legal grounds, and the plaintiffs have commenced an appeal to the United States Court of Appeals for the Second Circuit. The second class action, which relates to other derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR, is the subject of a motion to dismiss that remains pending in the SDNY. In addition to the above, five other class action complaints were filed against NatWest Group companies in the SDNY, each relating to a different reference rate. The SDNY dismissed all claims against NWM Plc in the case relating to Euribor for lack of personal jurisdiction in February 2017. The SDNY also dismissed, for various reasons, the case relating to Pound Sterling LIBOR in August 2019, the case relating to Swiss Franc LIBOR in September 2019, and the case relating to the Singapore Interbank Offered Rate and Singapore Swap Offer Rate (‘SIBOR / SOR’) in July 2019. Plaintiffs appealed each of these four dismissals to the United States Court of Appeals for the Second Circuit. The appeals in the Euribor, Pound Sterling LIBOR and Swiss Franc LIBOR cases remain pending, but in June 2021, NWM Plc and the plaintiffs in the Swiss Franc LIBOR class action finalised a settlement resolving that case. The amount of the settlement (which was covered by an existing provision) has been paid into escrow pending court approval of the settlement. The appeal in the SIBOR / SOR case was decided on 17 March 2021, when the United States Court of Appeals for the Second Circuit reversed the SDNY’s prior dismissal, such that the case will now return to the SDNY. In the fifth class action, which relates to the Australian Bank Bill Swap Reference Rate, the SDNY in February 2020 declined to dismiss the amended complaint as against NWM Plc and certain other defendants, but dismissed it as to other members of NatWest Group (including NatWest Group plc). The claims against non-dismissed defendants (including NWM Plc) are now proceeding in discovery. NWM Plc was also named as a defendant in a motion to certify a class action relating to LIBOR in the Tel Aviv District Court in Israel. NWM Plc filed a motion for cancellation of service, which was granted in July 2020. The claimants appealed that decision and in November 2020 the appeal was refused and the claim dismissed by the Appellate Court. The claim could in future be recommenced depending on the outcome of a separate case under appeal to Israel’s Supreme Court. In January 2019, a class action antitrust complaint was filed in the SDNY alleging that the defendants (USD ICE LIBOR panel banks and affiliates) have conspired to suppress USD ICE LIBOR from 2014 to the present by submitting incorrect information to ICE about their borrowing costs. The NatWest Group defendants are NatWest Group plc, NWM Plc, NWMSI and NWB Plc. The defendants made a motion to dismiss this case, which was granted by the court in March 2020. Plaintiffs’ appeal of the dismissal is pending in the United States Court of Appeals for the Second Circuit. In August 2020, a complaint was filed in the United States District Court for the Northern District of California by several United States consumer borrowers against the USD ICE LIBOR panel banks and their affiliates, alleging that the normal process of setting USD ICE LIBOR amounts to illegal price-fixing, and also that banks in the United States have illegally agreed to use LIBOR as a component of price in variable consumer loans. The NatWest Group defendants are NatWest Group plc, NWM Plc, NWMSI and NWB Plc. The plaintiffs seek damages and to prevent the enforcement of LIBOR-based instruments through injunction. Defendants intend to seek dismissal. Notes 12. Litigation and regulatory matters continued FX litigation NWM Plc, NWMSI and / or NatWest Group plc are defendants in several cases relating to NWM Plc’s foreign exchange (FX) business. In 2015, NWM Plc paid US$255 million to settle the consolidated antitrust class action filed in the SDNY on behalf of persons who entered into over-the-counter FX transactions with defendants or who traded FX instruments on exchanges. In 2018, some members of the settlement class who opted out of that class action settlement filed their own non-class complaint in the SDNY asserting antitrust claims against NWM Plc, NWMSI and other banks. Those opt-out claims are proceeding in discovery. In April 2019, some of the same claimants in the opt-out case described above, as well as others, served proceedings (which are ongoing) in the High Court of Justice of England and Wales, asserting competition claims against NWM Plc and several other banks. An FX-related class action, on behalf of ‘consumers and end-user businesses’, is proceeding in the SDNY against NWM Plc and others. Plaintiffs have filed a motion for class certification, which defendants are opposing. In May 2019, a cartel class action was filed in the Federal Court of Australia against NWM Plc and four other banks on behalf of persons who bought or sold currency through FX spots or forwards between 1 January 2008 and 15 October 2013 with a total transaction value exceeding AUD $0.5 million. The claimant has alleged that the banks, including NWM Plc, contravened Australian competition law by sharing information, coordinating conduct, widening spreads and manipulating FX rates for certain currency pairs during this period. NatWest Group plc has been named in the action as an ‘other cartel participant’, but is not a respondent. The claim was served in June 2019. The claimant sought permission to amend its claim to strengthen its claim of alleged breaches of competition law, but this was refused by the court in the form sought by the claimant. The claimant is now seeking a further opportunity to amend its claim, which is being opposed by NWM Plc and the other respondents. In July and December 2019, two separate applications seeking opt-out collective proceedings orders were filed in the UK Competition Appeal Tribunal against NatWest Group plc, NWM Plc and other banks. Both applications have been brought on behalf of persons who, between 18 December 2007 and 31 January 2013, entered into a relevant FX spot or outright forward transaction in the EEA with a relevant financial institution or on an electronic communications network. A hearing to determine class certification and which of the applications should be permitted to represent the class took place in July 2021 and judgment is awaited. In November 2020, proceedings were issued in the High Court of Justice of England and Wales against NWM Plc by a claimant who seeks an account of profits and/or damages in respect of alleged historical FX trading misconduct. The claimant has also issued similar proceedings against a number of other banks. The claim against NWM Plc makes allegations of breaches of contract, fiduciary duties, duties of confidence and other matters. The claim was served on NWM Plc in March 2021. Two motions to certify FX-related class actions were filed in the Tel Aviv District Court in Israel in September and October 2018, and were subsequently consolidated into one motion. The consolidated motion, which names The Royal Bank of Scotland plc (now NWM Plc) as the defendant, was served on NWM Plc in May 2020. NWM Plc has filed a motion for cancellation of service outside the jurisdiction, which remains pending. Certain other foreign exchange transaction related claims have been or may be threatened. NatWest Group cannot predict whether all or any of these claims will be pursued. Government securities antitrust litigation NWMSI and certain other US broker-dealers are defendants in a consolidated antitrust class action pending in the SDNY on behalf of persons who transacted in US Treasury securities or derivatives based on such instruments, including futures and options. The plaintiffs allege that defendants rigged the US Treasury securities auction bidding process to deflate prices at which they bought such securities and colluded to increase the prices at which they sold such securities to plaintiffs. The complaint was dismissed in March 2021. Plaintiffs have filed an amended complaint, which defendants will again seek to have dismissed. Notes 12. Litigation and regulatory matters continued Class action antitrust claims commenced in March 2019 are pending in the SDNY against NWM Plc, NWMSI and other banks in respect of Euro-denominated bonds issued by European central banks (EGBs). The complaint alleges a conspiracy among dealers of EGBs to widen the bid-ask spreads they quoted to customers, thereby increasing the prices customers paid for the EGBs or decreasing the prices at which customers sold the bonds. The class consists of those who purchased or sold EGBs in the US between 2007 and 2012. The defendants filed a motion to dismiss this matter, which was granted by the court in respect of NWM Plc and NWMSI in July 2020. Plaintiffs have filed an amended complaint which defendants are seeking to have dismissed. Swaps antitrust litigation NWM Plc and other members of NatWest Group , including NatWest Group plc, as well as a number of other interest rate swap dealers, are defendants in several cases pending in the SDNY alleging violations of the US antitrust laws in the market for interest rate swaps. There is a consolidated class action complaint on behalf of persons who entered into interest rate swaps with the defendants, as well as non-class action claims by three swap execution facilities (TeraExchange, Javelin, and trueEx). The plaintiffs allege that the swap execution facilities would have successfully established exchange-like trading of interest rate swaps if the defendants had not unlawfully conspired to prevent that from happening through boycotts and other means. Discovery in these cases is complete, and the plaintiffs' motion for class certification remains pending. In addition, in June 2017, TeraExchange filed a complaint against NatWest Group companies, including NatWest Group plc, as well as a number of other credit default swap dealers, in the SDNY. TeraExchange alleges it would have established exchange-like trading of credit default swaps if the defendant dealers had not engaged in an unlawful antitrust conspiracy. In October 2018, the court dismissed all claims against NatWest Group companies. On 30 June 2021, a class action antitrust complaint was filed against a number of credit default swap dealers in New Mexico federal court on behalf of persons who, from 2005 onwards, settled credit default swaps in the United States by reference to the ISDA credit default swap auction protocol. The complaint alleges that the defendants conspired to manipulate that benchmark through various means in violation of the antitrust laws and the Commodity Exchange Act. The defendants include several NatWest Group companies, including NatWest Group plc. Odd lot corporate bond trading antitrust litigation NWMSI is the subject of a class action antitrust complaint filed in the SDNY against NWMSI and several other securities dealers. The complaint alleges that, from August 2006 to the present, the defendants conspired artificially to widen spreads for odd lots of corporate bonds bought or sold in the United States secondary market and to boycott electronic trading platforms that would have allegedly promoted pricing competition in the market for such bonds. Defendants filed a motion to dismiss the operative complaint in this matter in December 2020. Madoff NWM N.V. is a defendant in two actions filed by Irving Picard, as trustee for the bankruptcy estates of Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, in bankruptcy court in New York. In both cases, the trustee alleges that certain transfers received by NWM N.V. amounted to fraudulent conveyances that should be clawed back for the benefit of the Madoff estate. In the primary action, filed in December 2010, the trustee is seeking to clawback a total of US$276.3 million in redemptions that NWM N.V. allegedly received from certain Madoff feeder funds and certain swap counterparties. In March 2020, the bankruptcy court denied the trustee’s request for leave to amend its complaint to include additional allegations against NWM N.V., holding that, even with the proposed amendments, the complaint would fail as a matter of law to state a valid claim against NWM N.V. The trustee has commenced an appeal of the bankruptcy court’s decision, which has been stayed pending the result of appeals in different proceedings, against different defendants, that involve similar issues. In the second action, filed in October 2011, the trustee seeks to recover an additional US$21.8 million. This action has been stayed pending the result of the appeal in the primary action. Interest rate hedging products and similar litigation NatWest Group continues to deal with a small number of active litigation claims in the UK relating to the alleged mis-selling of interest rate hedging products. Separately, NWM Plc is defending claims filed in France by two French local authorities relating to structured interest rate swaps. The plaintiffs allege, among other things, that the swaps are void for being illegal transactions, that they were mis-sold, and that information / advisory duties were breached. One of the claims has been appealed to the Supreme Court and judgment is awaited. The other has been remitted from the Supreme Court to the Court of Appeal for reconsideration of one aspect. NWM N.V. was a defendant in the latter case but has been dismissed from the proceedings. EUA trading litigation HMRC issued a tax assessment in 2012 against NatWest Group plc for approximately £86 million regarding a value-added-tax (VAT) matter in relation to the trading of European Union Allowances (EUAs) by the subsidiary of a joint venture partnership in 2009. NatWest Group plc lodged an appeal challenging the assessment before the First-tier Tribunal (Tax), a specialist tax tribunal, (the ‘Tax Dispute’). The matter was resolved in July 2021. Notes 12. Litigation and regulatory matters continued Separately, NWM Plc was a named defendant in civil proceedings before the High Court of Justice of England and Wales brought in 2015 by ten companies (all in liquidation) (the 'Liquidated Companies') and their respective liquidators (together, 'the Claimants'). The Liquidated Companies previously traded in EUAs in 2009 and were alleged to be defaulting traders within (or otherwise connected to) the EUA supply chains forming the subject of the Tax Dispute. The Claimants claimed approximately £71.4 million plus interest and costs and alleged that NWM Plc dishonestly assisted the directors of the Liquidated Companies in the breach of their statutory duties and/or knowingly participated in the carrying on of the business of the Liquidated Companies with intent to defraud creditors. The trial in that matter concluded in July 2018 and judgment was issued in March 2020. The court held that NWM Plc and Mercuria Energy Europe Trading Limited ('Mercuria') were liable for dishonestly assisting and knowingly being a party to fraudulent trading during a seven business day period in 2009. In October 2020, the High Court quantified damages against NWM Plc at £45 million plus interest and costs, and permitted it to appeal to the Court of Appeal. On 10 May 2021 the Court of Appeal set aside the High Court’s judgment and ordered that a retrial take place before a different High Court judge. The claimants have sought permission from the Supreme Court to appeal. The Court of Appeal also dismissed an appeal by Mercuria against the finding by the High Court that NWM Plc and Mercuria were both vicariously liable. Mercuria has sought permission from the Supreme Court to appeal that decision. Offshoring VAT assessments HMRC issued protective tax assessments in 2018 against NatWest Group plc totalling £143 million relating to unpaid VAT in respect of the UK branches of two NatWest Group companies registered in India. NatWest Group formally requested reconsideration by HMRC of their assessments, and this process was completed in November 2020. HMRC upheld their original decision and, as a result, NatWest Group plc lodged an appeal with the Tax Tribunal and an application for judicial review with the High Court of Justice of England and Wales, both in December 2020. In order to lodge the appeal with the Tax Tribunal, NatWest Group plc was required to pay the £143 million to HMRC, and payment was made in December 2020. The appeal and the application for judicial review have both been stayed pending resolution of a separate case involving another bank. US Anti-Terrorism Act litigation NWB Plc is a defendant in lawsuits filed in the United States District Court for the Eastern District of New York by a number of US nationals (or their estates, survivors, or heirs) who were victims of terrorist attacks in Israel. The plaintiffs allege that NWB Plc is liable for damages arising from those attacks pursuant to the US Anti-Terrorism Act because NWB Plc previously maintained bank accounts and transferred funds for the Palestine Relief & Development Fund, an organisation which plaintiffs allege solicited funds for Hamas, the alleged perpetrator of the attacks. In October 2017, the trial court dismissed claims against NWB Plc with respect to two of the 18 terrorist attacks at issue. In March 2018, the trial court granted a request by NWB Plc for leave to file a renewed summary judgment motion in respect of the remaining claims, and in March 2019, the court granted summary judgment in favour of NWB Plc. In April 2021, the United States Court of Appeals for the Second Circuit affirmed the trial court’s judgment in favour of NWB Plc, subject to the right of the plaintiffs to seek discretionary review by the United States Supreme Court. NWM N.V. and certain other financial institutions are defendants in several actions pending in the United States District Courts for the Eastern and Southern Districts of New York, filed by a number of US nationals (or their estates, survivors, or heirs), most of whom are or were US military personnel, who were killed or injured in attacks in Iraq between 2003 and 2011. NWM Plc is also a defendant in some of these cases. Notes 12. Litigation and regulatory matters continued The attacks at issue in the cases were allegedly perpetrated by Hezbollah and certain Iraqi terror cells allegedly funded by the Islamic Republic of Iran. According to the plaintiffs’ allegations, the defendants are liable for damages arising from the attacks because they allegedly conspired with Iran and certain Iranian banks to assist Iran in transferring money to Hezbollah and the Iraqi terror cells, in violation of the US Anti-Terrorism Act, by agreeing to engage in ‘stripping’ of transactions initiated by the Iranian banks so that the Iranian nexus to the transactions would not be detected. The first of these actions was filed in the United States District Court for the Eastern District of New York in November 2014. In September 2019, the district court dismissed the case, finding that the claims were deficient for several reasons, including lack of sufficient allegations as to the alleged conspiracy and causation. The plaintiffs are appealing the decision to the United States Court of Appeals for the Second Circuit. Another action, filed in the SDNY in 2017, was dismissed in March 2019 on similar grounds, but remains subject to appeal to the United States Court of Appeals for the Second Circuit. Other follow-on actions that are substantially similar to the two that have now been dismissed are pending in the same courts. Securities underwriting litigation NWMSI is an underwriter defendant in several securities class actions in the US in which plaintiffs generally allege that an issuer of public debt or equity securities, as well as the underwriters of the securities (including NWMSI), are liable to purchasers for misrepresentations and omissions made in connection with the offering of such securities. 1MDB litigation Recent media reports suggest that a claim for a material sum has recently been issued in Malaysia by 1MDB against Coutts & Co Ltd for alleged losses in connection with the 1MDB fund. Coutts & Co Ltd is a company registered in Switzerland and is in wind-down following the announced sale of its business assets in 2015. Regulatory matters (including investigations and customer redress programmes) NatWest Group’s businesses and financial condition can be affected by the actions of various governmental and regulatory authorities in the UK, the US, the EU and elsewhere. NatWest Group has engaged, and will continue to engage, in discussions with relevant governmental and regulatory authorities, including in the UK, the US, the EU and elsewhere, on an ongoing and regular basis, and in response to informal and formal inquiries or investigations, regarding operational, systems and control evaluations and issues including those related to compliance with applicable laws and regulations, including consumer protection, investment advice, business conduct, competition/anti-trust, VAT recovery, anti-bribery, anti-money laundering and sanctions regimes. The NatWest Markets business in particular has been providing, and continues to provide, information regarding a variety of matters, including, for example, offering of securities, the setting of benchmark rates and related derivatives trading, conduct in the foreign exchange market, product mis-selling and various issues relating to the issuance, underwriting, and sales and trading of fixed-income securities, including structured products and government securities, some of which have resulted, and others of which may result, in investigations or proceedings. Notes 12. Litigation and regulatory matters continued Any matters discussed or identified during such discussions and inquiries may result in, among other things, further inquiry or investigation, other action being taken by governmental and regulatory authorities, increased costs being incurred by NatWest Group, remediation of systems and controls, public or private censure, restriction of NatWest Group’s business activities and/or fines. Any of the events or circumstances mentioned in this paragraph or below could have a material adverse effect on NatWest Group, its business, authorisations and licences, reputation, results of operations or the price of securities issued by it, or lead to material additional provisions being taken. NatWest Group is co-operating fully with the matters described below. Investigations US investigations relating to fixed-income securities In October 2017, NWMSI entered into a non-prosecution agreement (NPA) with the United States Attorney for the District of Connecticut (USAO) in connection with alleged misrepresentations to counterparties relating to secondary trading in various forms of asset-backed securities. In the NPA, the USAO agreed not to file criminal charges relating to certain conduct and information described in the NPA, conditioned on NWMSI and affiliated companies complying with the NPA’s reporting and conduct requirements during its term, including by not engaging in conduct during the NPA that the USAO determines was a felony under federal or state law or a violation of the anti-fraud provisions of the United States securities law. Notes 12. Litigation and regulatory matters continued The NatWest Markets business is currently responding to a separate criminal investigation by the USAO and the US Department of Justice (DoJ) concerning unrelated trading by certain NatWest Markets former traders involving alleged spoofing. The NPA (referred to above) has been extended as the criminal investigation has progressed and related discussions with the USAO and the DoJ, including relating to the impact of such alleged conduct on the status of the NPA and the potential consequences thereof, have been ongoing. The duration and outcome of these matters remain uncertain, including in respect of whether settlement may be reached. Material adverse collateral consequences, in addition to further substantial costs and the recognition of further provisions, may occur depending on the outcome of the investigations, as further described in the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on page 363 of NatWest Group plc’s 2020 Annual Report on Form 20-F. Foreign exchange related investigations In recent years, NWM Plc paid significant penalties to resolve investigations into its FX business by the FCA, the Commodity Futures Trading Commission, the DoJ, the Board of Governors of the Federal Reserve System, the European Commission (EC) and others. NWM Plc continues to co-operate with ongoing investigations from competition authorities on similar issues relating to past FX trading. The exact timing and amount of future financial penalties, related risks and collateral consequences remain uncertain and may be material. EGB investigation On 20 May 2021, the EC announced that it had adopted a decision in relation to an investigation into potential competition law violations in the primary and secondary market trading of EGBs between 2007 and 2011 which involved the NatWest Markets business and six other banks. NatWest Group revealed the conduct to the EC and co-operated throughout the EC’s investigation. NatWest Group was granted immunity by the EC and was not fined. FCA investigation into NatWest Group’s compliance with the Money Laundering Regulations 2007 In July 2017, the FCA notified NatWest Group that it was undertaking an investigation into NatWest Group’s compliance with the UK Money Laundering Regulations |
Related party transactions
Related party transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related party transactions | |
Related party transactions | 13. Related party transactions UK Government The UK Government and bodies controlled or jointly controlled by the UK Government and bodies over which it has significant influence are related parties of NatWest Group. NatWest Group’s other transactions with the UK Government include the payment of taxes, principally UK corporation tax and value added tax; national insurance contributions; local authority rates; and regulatory fees and levies (including the bank levy and FSCS levies). Bank of England facilities In the ordinary course of business, NatWest Group may from time to time access market-wide facilities provided by the Bank of England. Other related parties (a) (b) Full details of NatWest Group’s related party transactions for the year ended 31 December 2020 are included in NatWest Group plc’s 2020 Annual Report on Form 20-F. |
UBIDAC significant transactions
UBIDAC significant transactions | 6 Months Ended |
Jun. 30, 2021 | |
UBIDAC significant transactions | |
UBIDAC significant transactions | 14. UBIDAC significant transactions On 28 June 2021, UBIDAC and NWH entered into a binding agreement with Allied Irish Banks p.l.c. (AIB) for the sale of c.€ 4.2 billion gross performing commercial lending and associated undrawn exposures of c.€ 2.8 billion. Approximately 280 colleagues will transfer from UBIDAC to AIB with the final number of roles confirmed as the deal completes. RWAs in relation to these total balances are estimated at c.€ 4 billion. This transaction is subject to regulatory approvals. On completion, it is estimated that a small gain on disposal will be recognised, based on the net carrying value of the lending as at 31 December 2020. The exact impacts of disposal will depend on movements in the book between now and transfer, the timing of which remains uncertain. On 23 July 2021, NatWest Group and UBIDAC have entered into a non-binding Memorandum of Understanding (MOU) with Permanent TSB Group Holdings p.l.c. (PTSB) for the proposed sale of a perimeter comprising performing non-tracker mortgages, performing micro-SME loans, UBIDAC's asset finance business and 25 of its branch locations. The TUPE principle will apply to staff wholly or mainly assigned to the agreed in-scope perimeter. The proposed perimeter included approximately € 7.6 billion of gross performing loans as at 31 March 2021, the majority relating to non-tracker mortgages. As part of the consideration for the proposed transaction, it is proposed that NatWest Group would receive a minority non-consolidating equity stake in PTSB. The proposed sale may not be concluded on the terms contemplated in the MoU, or at all. No estimate of any financial effect of the potential transaction can be made at the date of approval of these accounts. |
Post balance sheet events
Post balance sheet events | 6 Months Ended |
Jun. 30, 2021 | |
Post balance sheet events | |
Post balance sheet events | 15. Post balance sheet events NatWest Group has announced plans to commence an ordinary share buy-back programme of up to £750 million in the second half of the year. Other than as disclosed in this document, there have been no significant events between 30 June 2021 and the date of approval of this announcement which would require a change to, or additional disclosure, in the announcement. |
Date of approval
Date of approval | 6 Months Ended |
Jun. 30, 2021 | |
Date of approval | |
Date of approval | 16. Date of approval This announcement was approved by the Board of Directors on 29 July 2021. |
Accounting policies (Policies)
Accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting policies | |
Critical accounting policies and key sources of estimation uncertainty | Critical accounting policies and key sources of estimation uncertainty The judgements and assumptions that are considered to be the most important to the portrayal of NatWest Group’s financial condition are those relating to deferred tax, fair value of financial instruments, loan impairment provisions, goodwill and provisions for liabilities and charges. These critical accounting policies and judgements are referenced on page 267 of the NatWest Group plc 2020 Annual Report on Form 20-F. Estimation uncertainty has been affected by the COVID-19 pandemic. Management’s consideration of this source of uncertainty is outlined in the relevant sections of the NatWest Group plc 2020 Annual Report on Form 20-F, including the ECL estimate for the period in the Risk and capital management section contained in the NatWest Group plc 2020 Annual Report on Form 20-F. |
Information used for significant estimates | Information used for significant estimates The COVID-19 pandemic has continued to cause significant economic and social disruption. Key financial estimates are based on a range of anticipated future economic conditions described by internally developed scenarios. Measurement of goodwill, deferred tax and expected credit losses are highly sensitive to reasonably possible changes in those anticipated conditions. Other reasonably possible assumptions about the future include a prolonged financial effect of the COVID-19 pandemic on the economy of the UK and other countries. Changes in judgements and assumptions could result in a material adjustment to those estimates in the next reporting periods. Refer to the NatWest Group plc Risk factors section in the 2020 Annual Report on Form 20-F. |
Analysis of income, expenses _2
Analysis of income, expenses and impairment losses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Analysis of income, expenses and impairment losses. | |
Summary of analysis of income, expenses and impairment losses | Half year ended 30 June 30 June 2021 2020 £m £m Loans to customers - amortised cost 4,433 4,698 Loans to banks - amortised cost 217 189 Other financial assets 132 303 Interest receivable 4,782 5,190 Deposits by banks 99 89 Customer deposits 319 432 Other financial liabilities 314 481 Subordinated liabilities 130 218 Internal funding of trading businesses 4 118 Interest payable 866 1,338 Net interest income 3,916 3,852 Net fees and commissions 1,027 1,038 Foreign exchange 183 344 Interest rate (6) 472 Credit 54 (68) Own credit adjustment — 53 Equity, commodities and other — 1 Income from trading activities 231 802 Loss on redemption of own debt (1) (138) — Operating lease and other rental income 108 119 Changes in fair value of financial assets or liabilities designated at fair value through profit or loss (2) (4) (21) Changes in fair value of other financial assets at fair value through profit or loss — (10) Hedge ineffectiveness 13 (10) Loss on disposal of amortised assets (6) (16) Profit on disposal of fair value through other comprehensive income assets 24 108 Profit on sale of property, plant and equipment 6 11 Share of profit of associated entities 129 12 Profit/(loss) on disposal of subsidiaries and associates 1 (99) Other income (3) 12 52 Other operating income 145 146 Total non-interest income 1,403 1,986 Total income 5,319 5,838 Salaries 1,192 1,290 Bonus awards 142 179 Temporary and contract costs 114 148 Social security costs 152 153 Pension costs 177 164 - defined benefit schemes 110 101 - defined contribution schemes 67 63 Other 125 21 Staff costs 1,902 1,955 Premises and equipment (4) 502 651 Depreciation and amortisation (5) 414 448 Other administrative expenses (6) 703 696 Administrative expenses 1,619 1,795 Operating expenses 3,521 3,750 Impairment releases/(losses) 707 (2,858) Impairments as a % of gross loans to customers 0.38 % 1.59 % Notes: (1) Representing day one loss on redemption of own debt related to the repurchase of legacy instruments. (2) Includes related derivatives. (3) Includes income from activities other than banking. (4) 30 June 2021 includes cost of £20 million including accelerated depreciation of £12 million (30 June 2020 - £102 million including £40 million accelerated depreciation) in relation to the planned reduction of the property portfolio (30 June 2021 – freehold £1 million; leasehold £19 million; 30 June 2020 - leasehold £102 million). (5) 30 June 2021 includes a £23 million charge relating to the reduction in property portfolio, leasehold £19 million and freehold £4 million (30 June 2020 - £43 million charge, leasehold £43 million). (6) Includes litigation and conduct costs. |
Segmental analysis (Tables)
Segmental analysis (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segmental analysis | |
Schedule of operating segments | Analysis of operating profit/(loss) before tax The following tables provide a segmental analysis of operating profit/(loss) before tax by the main income statement captions. International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items & Banking Banking Banking International Markets RoI other (1) Total Half year ended 30 June 2021 £m £m £m £m £m £m £m £m Net interest income 1,976 232 1,308 182 (3) 187 34 3,916 Net fees and commissions 173 124 560 59 83 38 (10) 1,027 Other non-interest income 1 12 55 15 215 18 60 376 Total income 2,150 368 1,923 256 295 243 84 5,319 Operating expenses (1,187) (249) (1,152) (112) (560) (261) — (3,521) Impairment releases/(losses) 57 27 568 29 16 11 (1) 707 Operating profit/(loss) 1,020 146 1,339 173 (249) (7) 83 2,505 Half year ended 30 June 2020 Net interest income 1,982 251 1,370 201 (34) 194 (112) 3,852 Net fees and commissions 204 130 552 43 76 44 (11) 1,038 Other non-interest income (1) 11 81 15 774 11 57 948 Total income 2,185 392 2,003 259 816 249 (66) 5,838 Operating expenses (1,075) (252) (1,221) (126) (707) (245) (124) (3,750) Impairment losses (657) (56) (1,790) (46) (40) (243) (26) (2,858) Operating profit/(loss) 453 84 (1,008) 87 69 (239) (216) (770) Note: (1) 30 June 2021 predominantly relates to interest receivable in Treasury and 30 June 2020 predominantly related to interest receivable in Treasury and strategic disposals in Functions. Total revenue (1) International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items & Banking Banking Banking International Markets RoI Other Total Half year ended 30 June 2021 £m £m £m £m £m £m £m £m External 2,667 358 1,861 278 523 275 508 6,470 Inter-segmental 14 60 43 3 17 — (137) — Total 2,681 418 1,904 281 540 275 371 6,470 Half year ended 30 June 2020 External 2,764 358 2,009 269 1,328 277 563 7,568 Inter-segmental 24 99 47 3 4 — (177) — Total 2,788 457 2,056 272 1,332 277 386 7,568 Note: (1) Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income. Notes 4. Segmental analysis continued Analysis of net fees and commissions International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items Banking Banking Banking International Markets RoI & other Total Half year ended 30 June 2021 £m £m £m £m £m £m £m £m Fees and commissions receivable - Payment services 145 16 255 6 10 28 — 460 - Credit and debit card fees 149 4 69 1 — 8 — 231 - Lending and financing 6 4 242 28 34 7 — 321 - Investment management, trustee and fiduciary services 1 113 — 22 — 1 — 137 - Underwriting fees — — — — 77 — — 77 - Other 32 19 63 3 25 — (56) 86 Total 333 156 629 60 146 44 (56) 1,312 Fees and commissions payable (160) (32) (69) (1) (63) (6) 46 (285) Net fees and commissions 173 124 560 59 83 38 (10) 1,027 Half year ended 30 June 2020 Fees and commissions receivable - Payment services 129 14 256 9 9 28 — 445 - Credit and debit card fees 144 4 60 1 — 10 — 219 - Lending and financing 37 2 241 15 46 7 — 348 - Investment management, trustee and fiduciary services 1 113 — 17 — 1 — 132 - Underwriting fees — — — — 124 — — 124 - Other 34 18 48 2 98 2 (40) 162 Total 345 151 605 44 277 48 (40) 1,430 Fees and commissions payable (141) (21) (53) (1) (201) (4) 29 (392) Net fees and commissions 204 130 552 43 76 44 (11) 1,038 Total assets and liabilities International Banking & Markets Ulster Central Retail Private Commercial RBS NatWest Bank items & Banking Banking Banking International Markets RoI other Total 30 June 2021 £m £m £m £m £m £m £m £m Assets 204,167 27,686 185,757 36,953 219,447 25,422 76,426 775,858 Liabilities 187,851 34,808 183,837 34,843 206,160 21,872 62,602 731,973 31 December 2020 Assets 197,618 26,206 187,413 33,984 270,147 26,620 57,503 799,491 Liabilities 178,617 32,457 174,251 31,989 254,098 22,993 61,262 755,667 |
Tax (Tables)
Tax (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tax | |
Schedule of reconciliation of actual tax charge from the expected tax charge | Half year ended 30 June 30 June 2021 2020 £m £m Profit/(loss) before tax 2,505 (770) Expected tax (charge)/credit (476) 146 Losses and temporary differences in period where no deferred tax assets recognised (6) (38) Foreign profits taxed at other rates 4 (24) Items not allowed for tax: - losses on disposals and write-downs (3) (14) - UK bank levy (11) (15) - regulatory and legal actions 3 20 - other disallowable items (10) (23) Non-taxable items 25 68 Taxable foreign exchange movements — (2) Losses bought forward and utilised 6 23 Decrease in the carrying value of deferred tax assets in respect of: - UK losses (5) (56) - Ireland losses (35) (20) Banking surcharge (173) 52 Tax on paid-in equity 32 38 UK tax rate change impact 206 75 Adjustments in respect of prior periods 8 (22) Actual tax (charge)/credit (435) 208 |
Trading assets and liabilities
Trading assets and liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Trading assets and liabilities | |
Schedule of trading assets and liabilities | 30 June 31 December 2021 2020 Assets £m £m Loans Reverse repos 24,718 19,404 Collateral given 12,955 18,760 Other loans 1,154 1,611 Total loans 38,827 39,775 Securities Central and local government - UK 5,121 4,184 - US 4,088 5,149 - other 18,347 16,436 Financial institutions and corporate 3,812 3,446 Total securities 31,368 29,215 Total 70,195 68,990 Liabilities Deposits Repos 23,720 19,036 Collateral received 17,165 23,229 Other deposits 1,646 1,804 Total deposits 42,531 44,069 Debt securities in issue 1,205 1,408 Short positions 32,111 26,779 Total 75,847 72,256 |
Financial instruments_ classi_2
Financial instruments: classification (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Financial instruments: classification | |
Schedule of classification for financial assets and liabilities | Amortised Other MFVTPL FVOCI cost assets Total Assets £m £m £m £m £m Cash and balances at central banks 151,511 151,511 Trading assets 70,195 70,195 Derivatives (1) 109,556 109,556 Settlement balances 7,793 7,793 Loans to banks - amortised cost (2) 8,176 8,176 Loans to customers - amortised cost (3) 362,711 362,711 Other financial assets 340 42,085 9,044 51,469 Intangible assets 6,694 6,694 Other assets 7,753 7,753 30 June 2021 180,091 42,085 539,235 14,447 775,858 Cash and balances at central banks 124,489 124,489 Trading assets 68,990 68,990 Derivatives (1) 166,523 166,523 Settlement balances 2,297 2,297 Loans to banks - amortised cost (2) 6,955 6,955 Loans to customers - amortised cost (3) 360,544 360,544 Other financial assets 440 44,902 9,806 55,148 Intangible assets 6,655 6,655 Other assets 7,890 7,890 31 December 2020 235,953 44,902 504,091 14,545 799,491 Held-for- Amortised Other trading DFV cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (4) 14,394 14,394 Customer deposits 467,214 467,214 Settlement balances 7,119 7,119 Trading liabilities 75,847 75,847 Derivatives (1) 103,992 103,992 Other financial liabilities 1,961 44,157 46,118 Subordinated liabilities 744 7,952 8,696 Notes in circulation 2,906 2,906 Other liabilities (5) 1,818 3,869 5,687 30 June 2021 179,839 2,705 545,560 3,869 731,973 Bank deposits (4) 20,606 20,606 Customer deposits 431,739 431,739 Settlement balances 5,545 5,545 Trading liabilities 72,256 72,256 Derivatives (1) 160,705 160,705 Other financial liabilities 2,403 43,408 45,811 Subordinated liabilities 793 9,169 9,962 Notes in circulation 2,655 2,655 Other liabilities (5) 1,882 4,506 6,388 31 December 2020 232,961 3,196 515,004 4,506 755,667 Notes: (1) Includes net hedging derivatives assets of £42 million (31 December 2020 - £93 million) and net hedging derivatives liabilities of £136 million (31 December 2020 - £130 million). (2) Includes items in the course of collection from other banks of £275 million (31 December 2020 - £148 million). (3) Includes finance lease receivables of £ 8,765 million (31 December 2020 - £ 9,061 million). (4) Includes items in the course of transmission to other banks of £92 million (31 December 2020 - £12 million). (5) Includes lease liabilities of £1,652 million (31 December 2020 - £1,698 million). Notes 7. Financial instruments continued |
Schedule of financial assets and liabilities | 30 June 31 December 2021 2020 £m £m Reverse repos Trading assets 24,718 19,404 Loans to banks - amortised cost 382 153 Loans to customers - amortised cost 22,706 25,011 Repos Bank deposits 4,261 6,470 Customer deposits 16,751 5,167 Trading liabilities 23,720 19,036 |
Schedule of financial assets and liabilities at fair value by valuation hierarchy | 30 June 2021 31 December 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total £m £m £m £m £m £m £m £m Assets Trading assets Loans — 38,664 163 38,827 — 39,550 225 39,775 Securities 22,048 9,205 115 31,368 21,535 7,599 81 29,215 Derivatives — 108,622 934 109,556 — 165,441 1,082 166,523 Other financial assets Loans — 394 588 982 — 185 168 353 Securities 32,422 8,827 194 41,443 35,972 8,850 167 44,989 Total financial assets held at fair value 54,470 165,712 1,994 222,176 57,507 221,625 1,723 280,855 Liabilities Trading liabilities Deposits — 42,528 3 42,531 — 44,062 7 44,069 Debt securities in issue — 1,205 — 1,205 — 1,408 — 1,408 Short positions 23,659 8,451 1 32,111 19,045 7,734 — 26,779 Derivatives — 103,311 681 103,992 — 159,818 887 160,705 Other financial liabilities Debt securities in issue — 1,243 — 1,243 — 1,607 — 1,607 Other deposits — 718 — 718 — 796 — 796 Subordinated liabilities — 744 — 744 — 793 — 793 Total financial liabilities held at fair value 23,659 158,200 685 182,544 19,045 216,218 894 236,157 Notes: (1) Level 1 - Instruments valued using unadjusted quoted prices in active and liquid markets, for identical financial instruments. Examples include government bonds, listed equity shares and certain exchange-traded derivatives. Level 2 - Instruments valued using valuation techniques that have observable inputs. Examples include most government agency securities, investment-grade corporate bonds, certain mortgage products, including CLOs, most bank loans, repos and reverse repos, less liquid listed equities, state and municipal obligations, most notes issued, and certain money market securities and loan commitments and most OTC derivatives. Level 3 - Instruments valued using a valuation technique where at least one input which could have a significant effect on the instrument's valuation, is not based on observable market data. Examples include cash instruments which trade infrequently, certain syndicated and commercial mortgage loans, certain emerging markets and derivatives with unobservable model inputs. (2) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. There were no significant transfers between level 1 and level 2. (3) For an analysis of debt securities held at mandatorily fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Risk and capital management – Credit risk. (4) The determination of an instrument’s level cannot be made at a global product level as a single product type can be in more than one level. For example, a single name corporate credit default swap could be in level 2 or level 3 depending on whether the reference counterparty’s obligations are liquid or illiquid. |
Schedule of financial instruments carried at fair value on the balance sheet by valuation sensitivities for level 3 balances | 30 June 2021 31 December 2020 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 163 10 — 225 10 — Securities 115 10 — 81 — — Derivatives 934 60 (70) 1,082 80 (80) Other financial assets Loans 588 30 (50) 168 20 (10) Securities 194 30 (20) 167 30 (20) Total financial assets held at fair value 1,994 140 (140) 1,723 140 (110) Liabilities Trading liabilities Deposits 3 — — 7 — — Short Positions 1 — — — — — Derivatives 681 40 (40) 887 50 (40) Total financial liabilities held at fair value 685 40 (40) 894 50 (40) |
Schedule of movement in level 3 assets and liabilities | Half year ended 30 June 2021 Half year ended 30 June 2020 Other Other Trading financial Total Total Trading financial Total Total assets assets assets liabilities assets (1) assets (2) assets liabilities £m £m £m £m £m £m £m £m At 1 January 1,388 335 1,723 894 2,233 321 2,554 1,317 Amount recorded in the income statement (3) (125) 3 (122) (98) 313 (1) 312 97 Amount recorded in the statement of comprehensive income — 17 17 — — 62 62 — Level 3 transfers in 42 428 470 15 133 207 340 6 Level 3 transfers out (68) — (68) (116) (101) — (101) (337) Purchases 168 10 178 114 366 10 376 100 Settlements (36) (4) (40) (15) (113) — (113) (14) Sales (156) (4) (160) (107) (933) (1) (934) (164) Foreign exchange and other adjustments (1) (3) (4) (2) 5 8 13 3 At 30 June 1,212 782 1,994 685 1,903 606 2,509 1,008 Amounts recorded in the income statement in respect of balances held at year end - unrealised (125) 3 (122) (98) 313 (1) 312 97 Notes: (1) Trading assets comprise assets held at fair value in trading portfolios. (2) Other financial assets comprise fair value through other comprehensive income, designated at fair value through profit or loss and other fair value through profit or loss.Movement in the period primarily reflects increase in loan positions classified as HTC&S under IFRS 9 and fair valued through other comprehensive income. (3) £27 million net losses on trading assets and liabilities (30 June 2020 - £215 million net gains) were recorded in income from trading activities. Net gains on other instruments of £3 million (30 June 2020 - nil gains) were recorded in other operating income and interest income as appropriate. Notes 7. Financial instruments continued Valuation reserves |
Schedule of financial instruments valuation adjustments | 30 June 31 December 2021 2020 £m £m Funding - FVA 79 140 Credit - CVA 385 390 Bid - Offer 108 148 Product and deal specific 163 172 735 850 ● Valuation reserves comprising of credit valuation adjustments (CVA), funding valuation adjustment (FVA), bid-offer and product and deal specific reserves, decreased to £735 million at 30 June 2021 (31 December 2020 – £850 million). ● There was a reallocation of FVA to CVA during the period following an update to the risk management of certain exposures. ● The net decrease across CVA, FVA and bid-offer reserves was driven by reduced exposures, due to increases in interest rates and trade exit activity, and reduced risk. |
Schedule of carrying value and fair value of financial instruments carried at amortised cost on the balance sheet | Items where fair value approximates Carrying Fair value hierarchy level carrying value value Fair value Level 1 Level 2 Level 3 30 June 2021 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 151.5 Settlement balances 7.8 Loans to banks 0.3 7.9 7.9 5.0 2.9 Loans to customers 362.7 359.8 25.3 334.5 Other financial assets Securities 9.0 9.1 5.4 0.9 2.8 Financial liabilities Bank deposits 5.9 8.5 8.5 3.7 4.8 Customer deposits 388.1 79.1 79.1 20.7 58.4 Settlement balances 7.1 Other financial liabilities Debt securities in issue 44.2 45.3 — 34.9 10.4 Subordinated liabilities 8.0 8.5 — 8.4 0.1 Notes in circulation 2.9 31 December 2020 Financial assets Cash and balances at central banks 124.5 Settlement balances 2.3 Loans to banks 0.1 6.9 6.9 — 3.8 3.1 Loans to customers 360.5 359.2 — 25.2 334.0 Other financial assets Securities 9.8 10.1 5.9 1.2 3.0 Financial liabilities Bank deposits 4.4 16.2 16.2 — 11.3 4.9 Customer deposits 371.7 60.0 60.1 — 10.1 50.0 Settlement balances 5.5 Other financial liabilities Debt securities in issue 43.4 44.6 — 34.7 9.9 Subordinated liabilities 9.2 9.8 — 9.7 0.1 Notes in circulation 2.7 |
Provisions for liabilities an_2
Provisions for liabilities and charges (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Provision for liabilities and charges | |
Schedule for provisions for liabilities and charges | Litigation and Financial Customer other commitments redress regulatory Property and guarantees Other Total £m £m £m £m £m £m At 1 January 749 365 270 179 289 1,852 Expected credit losses impairment charge — — — 6 — 6 Currency translation and other movements (3) (5) — (1) (2) (11) Charge to income statement 17 8 13 — 60 98 Release to income statement (4) (10) (8) — (9) (31) Provisions utilised (222) (11) (10) — (55) (298) At 31 March 537 347 265 184 283 1,616 Expected credit losses impairment release — — — (18) — (18) Currency translation and other movements — — 1 — (8) (7) Charge to income statement 32 1 22 — 42 97 Release to income statement (7) (68) (20) — (10) (105) Provisions utilised (87) (20) (8) — (62) (177) At 30 June 475 260 260 166 245 1,406 Notes: (1) Includes payment protection insurance provision which reflects the estimated cost of PPI redress attributable to claims prior to the Financial Conduct Authority (FCA) complaint deadline of 29 August 2019. All pre-deadline complaints have been processed which removes complaint volume estimation uncertainty from the provision estimate. NatWest Group continues to conclude remaining bank-identified closure work and conclude cases with the Financial Ombudsmen Service. |
Loan impairment provisions (Tab
Loan impairment provisions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Loan impairment provisions | |
Schedule of loan exposure and impairment metrics | 30 June 31 December 2021 2020 £m £m Loans - amortised cost and FVOCI Stage 1 316,701 287,124 Stage 2 53,188 78,917 Stage 3 5,703 6,358 Of which: individual 1,851 2,292 Of which: collective 3,852 4,066 375,592 372,399 ECL provisions (1) Stage 1 433 519 Stage 2 2,300 3,081 Stage 3 2,192 2,586 Of which: individual 560 831 Of which: collective 1,632 1,755 4,925 6,186 ECL provisions coverage (2, 3) Stage 1 (%) 0.14 0.18 Stage 2 (%) 4.32 3.90 Stage 3 (%) 38.44 40.67 1.31 1.66 Half year ended 30 June 30 June 2021 2020 £m £m Impairment losses ECL (release)/charge (4) (707) 2,858 Stage 1 (701) 308 Stage 2 (100) 2,150 Stage 3 94 400 Of which: individual (25) 131 Of which: collective 119 269 ECL loss rate - annualised (basis points) (3) (38) 154 Amounts written off 517 408 Of which: individual 256 41 Of which: collective 261 367 Notes: (1) Includes £6 million (31 December 2020 - £6 million) related to assets classified as FVOCI. (2) ECL provisions coverage is calculated as ECL provisions divided by loans. (3) ECL provisions coverage and ECL loss rates are calculated on third party loans and related ECL provisions and charge respectively. ECL loss rate is calculated as annualised third party ECL charge divided by loans. The half year ECL charge is annualised by multiplying by two. (4) Includes a £4 million charge (30 June 2020 – £5 million charge) related to other financial assets, of which nil (30 June 2020 – £4 million) related to assets classified as FVOCI; and £2 million (30 June 2020 - £8 million) related to contingent liabilities. (5) The table shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to page 33 for Financial instruments within the scope of the IFRS 9 ECL framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £150.5 billion (31 December 2020 – £122.7 billion) and debt securities of £49.8 billion (31 December 2020 – £53.8 billion). |
Contingent liabilities and co_2
Contingent liabilities and commitments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Contingent liabilities and commitments | |
Schedule of contingent liabilities and commitments | 30 June 31 December 2021 2020 £m £m Guarantees 2,005 2,244 Other contingent liabilities 2,117 2,321 Standby facilities, credit lines and other commitments 119,387 124,167 Contingent liabilities and commitments 123,509 128,732 |
Analysis of income, expenses _3
Analysis of income, expenses and impairment losses (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Analysis of income, expenses and impairment losses | ||
Loans to customers - amortised cost | £ 4,433 | £ 4,698 |
Loans to banks - amortised cost | 217 | 189 |
Other financial assets | 132 | 303 |
Interest receivable | 4,782 | 5,190 |
Deposists by banks | 99 | 89 |
Customer deposits | 319 | 432 |
Other financial liabilities | 314 | 481 |
Subordinated liabilities | 130 | 218 |
Internal funding of trading businesses | 4 | 118 |
Interest payable | 866 | 1,338 |
Net interest income | 3,916 | 3,852 |
Net fees and commissions | 1,027 | 1,038 |
Income from trading activities | ||
Foreign exchange | 183 | 344 |
Interest rate | (6) | 472 |
Credit | 54 | (68) |
Own credit adjustments | 53 | |
Equity, commodities and other | 1 | |
Income from trading activities | 231 | 802 |
Loss on redemption of own debt | (138) | |
Operating lease and other rental income | 108 | 119 |
Changes in fair value of financial assets or liabilities designated at fair value through profit or loss | (4) | (21) |
Changes in fair value of other financial assets fair value through profit or loss | (10) | |
Hedge ineffectiveness | 13 | (10) |
Loss on disposal of amortised assets | (6) | (16) |
Profit on disposal of fair value through other comprehensive income assets | 24 | 108 |
Profit on sale of property, plant and equipment | 6 | 11 |
Share of profit of associated entities | 129 | 12 |
Profit/(loss) on disposal of subsidiaries and associates | 1 | (99) |
Other income | 12 | 52 |
Other operating income | 145 | 146 |
Total non-interest income | 1,403 | 1,986 |
Total income | 5,319 | 5,838 |
Operating expenses | ||
Salaries | 1,192 | 1,290 |
Bonus awards | 142 | 179 |
Temporary and contract costs | 114 | 148 |
Social security costs | 152 | 153 |
Pension costs | 177 | 164 |
- defined benefit schemes | 110 | 101 |
- defined contribution schemes | 67 | 63 |
Other | 125 | 21 |
Staff costs | 1,902 | 1,955 |
Premises and equipment | 502 | 651 |
Depreciation and amortisation | 414 | 448 |
Other administrative expenses | 703 | 696 |
Administrative expenses | 1,619 | 1,795 |
Operating expenses | 3,521 | 3,750 |
Impairment releases/(losses) | £ 707 | £ (2,858) |
Impairments as a % of gross loans to customers | 0.38% | 1.59% |
Cost related to reduction in property portfolio included in premises and equipment | £ 20 | £ 102 |
Accelerated depreciation | 12 | 40 |
Charge relating to reduction in property portfolio, included in depreciation and amortization | 23 | 43 |
Freehold | ||
Operating expenses | ||
Cost related to reduction in property portfolio included in premises and equipment | 1 | |
Charge relating to reduction in property portfolio, included in depreciation and amortization | 4 | |
Leasehold | ||
Operating expenses | ||
Cost related to reduction in property portfolio included in premises and equipment | 19 | 102 |
Charge relating to reduction in property portfolio, included in depreciation and amortization | £ 19 | £ 43 |
Segmental analysis - Operating
Segmental analysis - Operating profit/(loss) before tax (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Segmental analysis | ||
Net interest income | £ 3,916 | £ 3,852 |
Net fees and commissions | 1,027 | 1,038 |
Other non-interest income | 376 | 948 |
Total income | 5,319 | 5,838 |
Operating expenses | (3,521) | (3,750) |
Impairment releases/(losses) | 707 | (2,858) |
Operating profit/(loss) before tax | 2,505 | (770) |
Retail Banking | ||
Segmental analysis | ||
Net interest income | 1,976 | 1,982 |
Net fees and commissions | 173 | 204 |
Other non-interest income | 1 | (1) |
Total income | 2,150 | 2,185 |
Operating expenses | (1,187) | (1,075) |
Impairment releases/(losses) | 57 | (657) |
Operating profit/(loss) before tax | 1,020 | 453 |
Ulster Bank RoI | ||
Segmental analysis | ||
Net interest income | 187 | 194 |
Net fees and commissions | 38 | 44 |
Other non-interest income | 18 | 11 |
Total income | 243 | 249 |
Operating expenses | (261) | (245) |
Impairment releases/(losses) | 11 | (243) |
Operating profit/(loss) before tax | (7) | (239) |
Private Banking | ||
Segmental analysis | ||
Net interest income | 232 | 251 |
Net fees and commissions | 124 | 130 |
Other non-interest income | 12 | 11 |
Total income | 368 | 392 |
Operating expenses | (249) | (252) |
Impairment releases/(losses) | 27 | (56) |
Operating profit/(loss) before tax | 146 | 84 |
Commercial Banking | ||
Segmental analysis | ||
Net interest income | 1,308 | 1,370 |
Net fees and commissions | 560 | 552 |
Other non-interest income | 55 | 81 |
Total income | 1,923 | 2,003 |
Operating expenses | (1,152) | (1,221) |
Impairment releases/(losses) | 568 | (1,790) |
Operating profit/(loss) before tax | 1,339 | (1,008) |
RBS International | ||
Segmental analysis | ||
Net interest income | 182 | 201 |
Net fees and commissions | 59 | 43 |
Other non-interest income | 15 | 15 |
Total income | 256 | 259 |
Operating expenses | (112) | (126) |
Impairment releases/(losses) | 29 | (46) |
Operating profit/(loss) before tax | 173 | 87 |
NatWest Markets | ||
Segmental analysis | ||
Net interest income | (3) | (34) |
Net fees and commissions | 83 | 76 |
Other non-interest income | 215 | 774 |
Total income | 295 | 816 |
Operating expenses | (560) | (707) |
Impairment releases/(losses) | 16 | (40) |
Operating profit/(loss) before tax | (249) | 69 |
Central items and other | ||
Segmental analysis | ||
Net interest income | 34 | (112) |
Net fees and commissions | (10) | (11) |
Other non-interest income | 60 | 57 |
Total income | 84 | (66) |
Operating expenses | (124) | |
Impairment releases/(losses) | (1) | (26) |
Operating profit/(loss) before tax | £ 83 | £ (216) |
Segmental analysis - Total reve
Segmental analysis - Total revenue (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Segmental analysis | ||
Revenue | £ 6,470 | £ 7,568 |
Retail Banking | ||
Segmental analysis | ||
Revenue | 2,681 | 2,788 |
Ulster Bank RoI | ||
Segmental analysis | ||
Revenue | 275 | 277 |
Commercial Banking | ||
Segmental analysis | ||
Revenue | 1,904 | 2,056 |
Private Banking | ||
Segmental analysis | ||
Revenue | 418 | 457 |
RBS International | ||
Segmental analysis | ||
Revenue | 281 | 272 |
NatWest Markets | ||
Segmental analysis | ||
Revenue | 540 | 1,332 |
Central items and other | ||
Segmental analysis | ||
Revenue | 371 | 386 |
Operating segment | ||
Segmental analysis | ||
Revenue | 6,470 | 7,568 |
Operating segment | Retail Banking | ||
Segmental analysis | ||
Revenue | 2,667 | 2,764 |
Operating segment | Ulster Bank RoI | ||
Segmental analysis | ||
Revenue | 275 | 277 |
Operating segment | Commercial Banking | ||
Segmental analysis | ||
Revenue | 1,861 | 2,009 |
Operating segment | Private Banking | ||
Segmental analysis | ||
Revenue | 358 | 358 |
Operating segment | RBS International | ||
Segmental analysis | ||
Revenue | 278 | 269 |
Operating segment | NatWest Markets | ||
Segmental analysis | ||
Revenue | 523 | 1,328 |
Operating segment | Central items and other | ||
Segmental analysis | ||
Revenue | 508 | 563 |
Inter segment | Retail Banking | ||
Segmental analysis | ||
Revenue | 14 | 24 |
Inter segment | Commercial Banking | ||
Segmental analysis | ||
Revenue | 43 | 47 |
Inter segment | Private Banking | ||
Segmental analysis | ||
Revenue | 60 | 99 |
Inter segment | RBS International | ||
Segmental analysis | ||
Revenue | 3 | 3 |
Inter segment | NatWest Markets | ||
Segmental analysis | ||
Revenue | 17 | 4 |
Inter segment | Central items and other | ||
Segmental analysis | ||
Revenue | £ (137) | £ (177) |
Segmental analysis - Net fees a
Segmental analysis - Net fees and commissions (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Fees and commissions receivable | ||
Payment services | £ 460 | £ 445 |
Credit and debit card fees | 231 | 219 |
Lending and financing | 321 | 348 |
Investment management, trustee and fiduciary services | 137 | 132 |
Underwriting fees | 77 | 124 |
Other | 86 | 162 |
Total | 1,312 | 1,430 |
Fees and commissions payable | (285) | (392) |
Net fees and commissions | 1,027 | 1,038 |
Retail Banking | ||
Fees and commissions receivable | ||
Payment services | 145 | 129 |
Credit and debit card fees | 149 | 144 |
Lending and financing | 6 | 37 |
Investment management, trustee and fiduciary services | 1 | 1 |
Other | 32 | 34 |
Total | 333 | 345 |
Fees and commissions payable | (160) | (141) |
Net fees and commissions | 173 | 204 |
Ulster Bank RoI | ||
Fees and commissions receivable | ||
Payment services | 28 | 28 |
Credit and debit card fees | 8 | 10 |
Lending and financing | 7 | 7 |
Investment management, trustee and fiduciary services | 1 | 1 |
Other | 2 | |
Total | 44 | 48 |
Fees and commissions payable | (6) | (4) |
Net fees and commissions | 38 | 44 |
Commercial Banking | ||
Fees and commissions receivable | ||
Payment services | 255 | 256 |
Credit and debit card fees | 69 | 60 |
Lending and financing | 242 | 241 |
Other | 63 | 48 |
Total | 629 | 605 |
Fees and commissions payable | (69) | (53) |
Net fees and commissions | 560 | 552 |
Private Banking | ||
Fees and commissions receivable | ||
Payment services | 16 | 14 |
Credit and debit card fees | 4 | 4 |
Lending and financing | 4 | 2 |
Investment management, trustee and fiduciary services | 113 | 113 |
Other | 19 | 18 |
Total | 156 | 151 |
Fees and commissions payable | (32) | (21) |
Net fees and commissions | 124 | 130 |
RBS International | ||
Fees and commissions receivable | ||
Payment services | 6 | 9 |
Credit and debit card fees | 1 | 1 |
Lending and financing | 28 | 15 |
Investment management, trustee and fiduciary services | 22 | 17 |
Other | 3 | 2 |
Total | 60 | 44 |
Fees and commissions payable | (1) | (1) |
Net fees and commissions | 59 | 43 |
NatWest Markets | ||
Fees and commissions receivable | ||
Payment services | 10 | 9 |
Lending and financing | 34 | 46 |
Underwriting fees | 77 | 124 |
Other | 25 | 98 |
Total | 146 | 277 |
Fees and commissions payable | (63) | (201) |
Net fees and commissions | 83 | 76 |
Central items and other | ||
Fees and commissions receivable | ||
Other | (56) | (40) |
Total | (56) | (40) |
Fees and commissions payable | 46 | 29 |
Net fees and commissions | £ (10) | £ (11) |
Segmental analysis - Assets and
Segmental analysis - Assets and liabilities (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Segmental analysis | ||
Assets | £ 775,858 | £ 799,491 |
Liabilities | 731,973 | 755,667 |
Retail Banking | ||
Segmental analysis | ||
Assets | 204,167 | 197,618 |
Liabilities | 187,851 | 178,617 |
Ulster Bank RoI | ||
Segmental analysis | ||
Assets | 25,422 | 26,620 |
Liabilities | 21,872 | 22,993 |
Commercial Banking | ||
Segmental analysis | ||
Assets | 185,757 | 187,413 |
Liabilities | 183,837 | 174,251 |
Private Banking | ||
Segmental analysis | ||
Assets | 27,686 | 26,206 |
Liabilities | 34,808 | 32,457 |
RBS International | ||
Segmental analysis | ||
Assets | 36,953 | 33,984 |
Liabilities | 34,843 | 31,989 |
NatWest Markets | ||
Segmental analysis | ||
Assets | 219,447 | 270,147 |
Liabilities | 206,160 | 254,098 |
Central items and other | ||
Segmental analysis | ||
Assets | 76,426 | 57,503 |
Liabilities | £ 62,602 | £ 61,262 |
Tax - Reconciliation (Details)
Tax - Reconciliation (Details) - GBP (£) £ in Millions | Apr. 01, 2023 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Tax reconciliation | ||||
UK corporation tax | 19.00% | 19.00% | ||
Profit/(loss) before tax | £ 2,505 | £ (770) | ||
Expected tax (charge)/credit | (476) | 146 | ||
Losses and temporary differences in period where no deferred tax assets recognised | (6) | (38) | ||
Foreign profits taxed at other rates | 4 | (24) | ||
losses on disposals and write-downs | (3) | (14) | ||
UK bank levy | (11) | (15) | ||
regulatory and legal actions | 3 | 20 | ||
other disallowable items | (10) | (23) | ||
Non-taxable items | 25 | 68 | ||
Taxable foreign exchange movements | (2) | |||
Losses brought forward and utilised | 6 | 23 | ||
Banking surcharge | (173) | 52 | ||
Tax on paid-in equity | 32 | 38 | ||
UK tax rate change impact | 206 | 75 | ||
Adjustments in respect of prior periods | 8 | (22) | ||
Actual tax (charge)/credit | (435) | 208 | ||
Deferred tax asset | 1,150 | £ 901 | ||
Deferred tax liability | £ 303 | 291 | ||
UK | ||||
Tax reconciliation | ||||
UK corporation tax | 19.00% | |||
Reduction in the carrying value of deferred tax assets | £ (5) | (56) | ||
UK tax rate change impact | 206 | |||
Trading losses carried forward | 972 | £ 862 | ||
Increase in deferred tax asset | 176 | |||
Deferred tax asset included in other comprehensive income | 30 | |||
UK | Forecast | ||||
Tax reconciliation | ||||
UK corporation tax | 25.00% | |||
Ireland | ||||
Tax reconciliation | ||||
Reduction in the carrying value of deferred tax assets | £ (35) | £ (20) |
Trading assets and liabilitie_2
Trading assets and liabilities (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Loans | ||
Reverse repos | £ 24,718 | £ 19,404 |
Collateral given | 12,955 | 18,760 |
Other loans | 1,154 | 1,611 |
Total loans | 38,827 | 39,775 |
Securities | ||
Financial institutions and corporate | 3,812 | 3,446 |
Total securities | 31,368 | 29,215 |
Total | 70,195 | 68,990 |
Deposits | ||
Repos | 23,720 | 19,036 |
Collateral received | 17,165 | 23,229 |
Other deposits | 1,646 | 1,804 |
Total deposits | 42,531 | 44,069 |
Debt securities in issue | 1,205 | 1,408 |
Short positions | 32,111 | 26,779 |
Total | 75,847 | 72,256 |
UK | ||
Securities | ||
Central and local government securities | 5,121 | 4,184 |
USA | ||
Securities | ||
Central and local government securities | 4,088 | 5,149 |
Other | ||
Securities | ||
Central and local government securities | £ 18,347 | £ 16,436 |
Financial instruments_ classi_3
Financial instruments: classification - Assets (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Financial instruments | ||
Assets | £ 775,858 | £ 799,491 |
Financial Assets | 775,858 | 799,491 |
Cash and balances at central banks | ||
Financial instruments | ||
Financial Assets | 151,511 | 124,489 |
Trading assets | ||
Financial instruments | ||
Financial Assets | 70,195 | 68,990 |
Derivatives | ||
Financial instruments | ||
Net hedging derivative assets | 42 | 93 |
Financial Assets | 109,556 | 166,523 |
Settlement balances | ||
Financial instruments | ||
Financial Assets | 7,793 | 2,297 |
Loans to banks - amortised cost | ||
Financial instruments | ||
Items in course of collection from other banks | 275 | 148 |
Financial Assets | 8,176 | 6,955 |
Loans to customers - amortised cost | ||
Financial instruments | ||
Financial Assets | 362,711 | 360,544 |
Other financial assets | ||
Financial instruments | ||
Financial Assets | 51,469 | 55,148 |
Intangible assets | ||
Financial instruments | ||
Financial Assets | 6,694 | 6,655 |
Other assets | ||
Financial instruments | ||
Financial Assets | 7,753 | 7,890 |
MFVPL | ||
Financial instruments | ||
Financial Assets | 180,091 | 235,953 |
MFVPL | Trading assets | ||
Financial instruments | ||
Financial Assets | 70,195 | 68,990 |
MFVPL | Derivatives | ||
Financial instruments | ||
Financial Assets | 109,556 | 166,523 |
MFVPL | Other financial assets | ||
Financial instruments | ||
Financial Assets | 340 | 440 |
FVOCI | ||
Financial instruments | ||
Financial Assets | 42,085 | 44,902 |
FVOCI | Other financial assets | ||
Financial instruments | ||
Financial Assets | 42,085 | 44,902 |
Amortised cost | ||
Financial instruments | ||
Financial Assets | 539,235 | 504,091 |
Amortised cost | Cash and balances at central banks | ||
Financial instruments | ||
Financial Assets | 151,511 | 124,489 |
Amortised cost | Settlement balances | ||
Financial instruments | ||
Financial Assets | 7,793 | 2,297 |
Amortised cost | Loans to banks - amortised cost | ||
Financial instruments | ||
Financial Assets | 8,176 | 6,955 |
Amortised cost | Loans to customers - amortised cost | ||
Financial instruments | ||
Financial Assets | 362,711 | 360,544 |
Amortised cost | Other financial assets | ||
Financial instruments | ||
Financial Assets | 9,044 | 9,806 |
Other assets | ||
Financial instruments | ||
Financial Assets | 14,447 | 14,545 |
Other assets | Intangible assets | ||
Financial instruments | ||
Financial Assets | 6,694 | 6,655 |
Other assets | Other assets | ||
Financial instruments | ||
Financial Assets | £ 7,753 | £ 7,890 |
Financial instruments_ classi_4
Financial instruments: classification - Liabilities (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Financial instruments | ||
Liabilities | £ 731,973 | £ 755,667 |
Financial Liabilities | 731,973 | 755,667 |
Finance lease receivable | 8,765 | 9,061 |
Lease liabilities | ||
Financial instruments | ||
Financial Liabilities | 1,652 | 1,698 |
Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 14,394 | 20,606 |
Items in course of transmission to other banks | 92 | 12 |
Customer deposits | ||
Financial instruments | ||
Financial Liabilities | 467,214 | 431,739 |
Settlement balances | ||
Financial instruments | ||
Financial Liabilities | 7,119 | 5,545 |
Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 75,847 | 72,256 |
Derivatives | ||
Financial instruments | ||
Financial Liabilities | 103,992 | 160,705 |
Net hedging derivative liabilities | 136 | 130 |
Other financial liabilities | ||
Financial instruments | ||
Financial Liabilities | 46,118 | 45,811 |
Subordinated liabilities | ||
Financial instruments | ||
Financial Liabilities | 8,696 | 9,962 |
Notes in circulation | ||
Financial instruments | ||
Financial Liabilities | 2,906 | 2,655 |
Other liabilities | ||
Financial instruments | ||
Financial Liabilities | 5,687 | 6,388 |
Items where fair values approximates carrying value | Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 5,900 | 4,400 |
Items where fair values approximates carrying value | Customer deposits | ||
Financial instruments | ||
Financial Liabilities | 388,100 | 371,700 |
Items where fair values approximates carrying value | Settlement balances | ||
Financial instruments | ||
Financial Liabilities | 7,100 | 5,500 |
Items where fair values approximates carrying value | Notes in circulation | ||
Financial instruments | ||
Financial Liabilities | 2,900 | 2,700 |
Held-for-trading | Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 75,847 | 72,256 |
Held-for-trading | Derivatives | ||
Financial instruments | ||
Financial Liabilities | 103,992 | 160,705 |
Held-for-trading | Financial Assets and Liabilities, Category | ||
Financial instruments | ||
Financial Liabilities | 179,839 | 232,961 |
DFV | Other financial liabilities | ||
Financial instruments | ||
Financial Liabilities | 1,961 | 2,403 |
DFV | Subordinated liabilities | ||
Financial instruments | ||
Financial Liabilities | 744 | 793 |
DFV | Financial Assets and Liabilities, Category | ||
Financial instruments | ||
Financial Liabilities | 2,705 | 3,196 |
Amortised cost | Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 14,394 | 20,606 |
Amortised cost | Customer deposits | ||
Financial instruments | ||
Financial Liabilities | 467,214 | 431,739 |
Amortised cost | Settlement balances | ||
Financial instruments | ||
Financial Liabilities | 7,119 | 5,545 |
Amortised cost | Other financial liabilities | ||
Financial instruments | ||
Financial Liabilities | 44,157 | 43,408 |
Amortised cost | Subordinated liabilities | ||
Financial instruments | ||
Financial Liabilities | 7,952 | 9,169 |
Amortised cost | Notes in circulation | ||
Financial instruments | ||
Financial Liabilities | 2,906 | 2,655 |
Amortised cost | Other liabilities | ||
Financial instruments | ||
Financial Liabilities | 1,818 | 1,882 |
Amortised cost | Financial Assets and Liabilities, Category | ||
Financial instruments | ||
Financial Liabilities | 545,560 | 515,004 |
Other liabilities | Other liabilities | ||
Financial instruments | ||
Financial Liabilities | 3,869 | 4,506 |
Other liabilities | Financial Assets and Liabilities, Category | ||
Financial instruments | ||
Financial Liabilities | £ 3,869 | £ 4,506 |
Financial instruments_ classi_5
Financial instruments: classification - Gains and losses (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Financial instruments | ||
Financial Assets | £ 775,858 | £ 799,491 |
Financial Liabilities | 731,973 | 755,667 |
Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 4,261 | 6,470 |
Customer deposits | ||
Financial instruments | ||
Financial Liabilities | 16,751 | 5,167 |
Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 23,720 | 19,036 |
Trading assets | ||
Financial instruments | ||
Financial Assets | 24,718 | 19,404 |
Loans to banks - amortised cost | ||
Financial instruments | ||
Financial Assets | 382 | 153 |
Loans to customers - amortised cost | ||
Financial instruments | ||
Financial Assets | £ 22,706 | £ 25,011 |
Financial instruments_ classi_6
Financial instruments: classification - Hierarchy of assets (Details) - Recurring - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair value of assets | ||||
Assets | £ 222,176 | £ 280,855 | ||
Loans | ||||
Fair value of assets | ||||
Assets | 38,827 | 39,775 | ||
Securities | ||||
Fair value of assets | ||||
Assets | 31,368 | 29,215 | ||
Derivatives | ||||
Fair value of assets | ||||
Assets | 109,556 | 166,523 | ||
Other loans | ||||
Fair value of assets | ||||
Assets | 982 | 353 | ||
Securities | ||||
Fair value of assets | ||||
Assets | 41,443 | 44,989 | ||
Level 1 | ||||
Fair value of assets | ||||
Assets | 54,470 | 57,507 | ||
Level 1 | Securities | ||||
Fair value of assets | ||||
Assets | 22,048 | 21,535 | ||
Level 1 | Securities | ||||
Fair value of assets | ||||
Assets | 32,422 | 35,972 | ||
Level 2 | ||||
Fair value of assets | ||||
Assets | 165,712 | 221,625 | ||
Level 2 | Loans | ||||
Fair value of assets | ||||
Assets | 38,664 | 39,550 | ||
Level 2 | Securities | ||||
Fair value of assets | ||||
Assets | 9,205 | 7,599 | ||
Level 2 | Derivatives | ||||
Fair value of assets | ||||
Assets | 108,622 | 165,441 | ||
Level 2 | Other loans | ||||
Fair value of assets | ||||
Assets | 394 | 185 | ||
Level 2 | Securities | ||||
Fair value of assets | ||||
Assets | 8,827 | 8,850 | ||
Level 3 | ||||
Fair value of assets | ||||
Assets | 1,994 | 1,723 | £ 2,509 | £ 2,554 |
Level 3 | Loans | ||||
Fair value of assets | ||||
Assets | 163 | 225 | ||
Level 3 | Securities | ||||
Fair value of assets | ||||
Assets | 115 | 81 | ||
Level 3 | Derivatives | ||||
Fair value of assets | ||||
Assets | 934 | 1,082 | ||
Level 3 | Other loans | ||||
Fair value of assets | ||||
Assets | 588 | 168 | ||
Level 3 | Securities | ||||
Fair value of assets | ||||
Assets | £ 194 | £ 167 |
Financial instruments_ classi_7
Financial instruments: classification - Hierarchy of liabilities (Details) - Recurring - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair value of liabilities | ||||
Liabilities | £ 182,544 | £ 236,157 | ||
Deposits | ||||
Fair value of liabilities | ||||
Liabilities | 42,531 | 44,069 | ||
Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1,205 | 1,408 | ||
Short positions | ||||
Fair value of liabilities | ||||
Liabilities | 32,111 | 26,779 | ||
Derivatives | ||||
Fair value of liabilities | ||||
Liabilities | 103,992 | 160,705 | ||
Other financial liabilities - Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1,243 | 1,607 | ||
Other deposits | ||||
Fair value of liabilities | ||||
Liabilities | 718 | 796 | ||
Subordinated liabilities | ||||
Fair value of liabilities | ||||
Liabilities | 744 | 793 | ||
Level 1 | ||||
Fair value of liabilities | ||||
Liabilities | 23,659 | 19,045 | ||
Level 1 | Short positions | ||||
Fair value of liabilities | ||||
Liabilities | 23,659 | 19,045 | ||
Level 2 | ||||
Fair value of liabilities | ||||
Liabilities | 158,200 | 216,218 | ||
Level 2 | Deposits | ||||
Fair value of liabilities | ||||
Liabilities | 42,528 | 44,062 | ||
Level 2 | Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1,205 | 1,408 | ||
Level 2 | Short positions | ||||
Fair value of liabilities | ||||
Liabilities | 8,451 | 7,734 | ||
Level 2 | Derivatives | ||||
Fair value of liabilities | ||||
Liabilities | 103,311 | 159,818 | ||
Level 2 | Other financial liabilities - Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1,243 | 1,607 | ||
Level 2 | Other deposits | ||||
Fair value of liabilities | ||||
Liabilities | 718 | 796 | ||
Level 2 | Subordinated liabilities | ||||
Fair value of liabilities | ||||
Liabilities | 744 | 793 | ||
Level 3 | ||||
Fair value of liabilities | ||||
Liabilities | 685 | 894 | £ 1,008 | £ 1,317 |
Level 3 | Deposits | ||||
Fair value of liabilities | ||||
Liabilities | 3 | 7 | ||
Level 3 | Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1 | |||
Level 3 | Short positions | ||||
Fair value of liabilities | ||||
Liabilities | 1 | |||
Level 3 | Derivatives | ||||
Fair value of liabilities | ||||
Liabilities | £ 681 | £ 887 |
Financial instruments_ classi_8
Financial instruments: classification - Level 3 Sensitivities of Assets (Details) - Recurring - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Fair value of assets | ||||
Assets | £ 222,176 | £ 280,855 | ||
Sensitivity favourable | 140 | 140 | ||
Sensitivity unfavourable | (140) | (110) | ||
Loans | ||||
Fair value of assets | ||||
Assets | 38,827 | 39,775 | ||
Sensitivity favourable | 10 | 10 | ||
Securities | ||||
Fair value of assets | ||||
Assets | 31,368 | 29,215 | ||
Sensitivity favourable | 10 | |||
Derivatives | ||||
Fair value of assets | ||||
Assets | 109,556 | 166,523 | ||
Sensitivity favourable | 60 | 80 | ||
Sensitivity unfavourable | (70) | (80) | ||
Other loans | ||||
Fair value of assets | ||||
Assets | 982 | 353 | ||
Sensitivity favourable | 30 | 20 | ||
Sensitivity unfavourable | (50) | (10) | ||
Securities | ||||
Fair value of assets | ||||
Assets | 41,443 | 44,989 | ||
Sensitivity favourable | 30 | 30 | ||
Sensitivity unfavourable | (20) | (20) | ||
Level 3 | ||||
Fair value of assets | ||||
Assets | 1,994 | 1,723 | £ 2,509 | £ 2,554 |
Level 3 | Loans | ||||
Fair value of assets | ||||
Assets | 163 | 225 | ||
Level 3 | Securities | ||||
Fair value of assets | ||||
Assets | 115 | 81 | ||
Level 3 | Derivatives | ||||
Fair value of assets | ||||
Assets | 934 | 1,082 | ||
Level 3 | Other loans | ||||
Fair value of assets | ||||
Assets | 588 | 168 | ||
Level 3 | Securities | ||||
Fair value of assets | ||||
Assets | £ 194 | £ 167 |
Financial instruments_ classi_9
Financial instruments: classification - Level 3 Sensitivities of Liabilities (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Fair value of liabilities | ||||
Specified target level of certainty for assumptions of unobservable inputs | 90.00% | |||
Recurring | ||||
Fair value of liabilities | ||||
Liabilities | £ 182,544 | £ 236,157 | ||
Sensitivity favourable | 40 | 50 | ||
Sensitivity unfavourable | (40) | (40) | ||
Recurring | Deposits | ||||
Fair value of liabilities | ||||
Liabilities | 42,531 | 44,069 | ||
Recurring | Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1,205 | 1,408 | ||
Recurring | Derivatives | ||||
Fair value of liabilities | ||||
Liabilities | 103,992 | 160,705 | ||
Sensitivity favourable | 40 | 50 | ||
Sensitivity unfavourable | (40) | (40) | ||
Recurring | Other financial liabilities - Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1,243 | 1,607 | ||
Recurring | Level 3 | ||||
Fair value of liabilities | ||||
Liabilities | 685 | 894 | £ 1,008 | £ 1,317 |
Recurring | Level 3 | Deposits | ||||
Fair value of liabilities | ||||
Liabilities | 3 | 7 | ||
Recurring | Level 3 | Debt securities in issue | ||||
Fair value of liabilities | ||||
Liabilities | 1 | |||
Recurring | Level 3 | Derivatives | ||||
Fair value of liabilities | ||||
Liabilities | £ 681 | £ 887 |
Financial instruments_ class_10
Financial instruments: classification - Movement in Level 3 portfolios - Assets (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Held-for-trading | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement | £ 27 | £ 215 |
Level 3 | Other | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement | 3 | 0 |
Recurring | ||
Movement in level 3 assets | ||
At 1 January | 280,855 | |
At 30 June | 222,176 | |
Recurring | Level 3 | ||
Movement in level 3 assets | ||
At 1 January | 1,723 | 2,554 |
Amounts recorded in the income statement | (122) | 312 |
Amounts recorded in the statement of comprehensive income | 17 | 62 |
Level 3 transfers in | 470 | 340 |
Level 3 transfers out | (68) | (101) |
Purchases | 178 | 376 |
Settlements | (40) | (113) |
Sales | (160) | (934) |
Foreign exchange and other adjustments | (4) | 13 |
At 30 June | 1,994 | 2,509 |
Recurring | Level 3 | Trading assets | ||
Movement in level 3 assets | ||
At 1 January | 1,388 | 2,233 |
Amounts recorded in the income statement | (125) | 313 |
Level 3 transfers in | 42 | 133 |
Level 3 transfers out | (68) | (101) |
Purchases | 168 | 366 |
Settlements | (36) | (113) |
Sales | (156) | (933) |
Foreign exchange and other adjustments | (1) | 5 |
At 30 June | 1,212 | 1,903 |
Recurring | Level 3 | Other financial assets | ||
Movement in level 3 assets | ||
At 1 January | 335 | 321 |
Amounts recorded in the income statement | 3 | (1) |
Amounts recorded in the statement of comprehensive income | 17 | 62 |
Level 3 transfers in | 428 | 207 |
Purchases | 10 | 10 |
Settlements | (4) | |
Sales | (4) | (1) |
Foreign exchange and other adjustments | (3) | 8 |
At 30 June | £ 782 | £ 606 |
Financial instruments_ class_11
Financial instruments: classification - Movement in Level 3 portfolios - Liabilities (Details) - Recurring - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Movement in level 3 liabilities | ||
Liabilities at beginning of period | £ 236,157 | |
Liabilities at end of period | 182,544 | |
Level 3 | ||
Movement in level 3 liabilities | ||
Liabilities at beginning of period | 894 | £ 1,317 |
Amounts recorded in the income statement | (98) | 97 |
Level 3 transfers in | 15 | 6 |
Level 3 transfers out | (116) | (337) |
Purchases | 114 | 100 |
Settlements | (15) | (14) |
Sales | (107) | (164) |
Foreign exchange and other adjustments | (2) | 3 |
Liabilities at end of period | £ 685 | £ 1,008 |
Financial instruments_ class_12
Financial instruments: classification - Adjustments (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Financial instruments: classification | ||
Funding - FVA | £ 79 | £ 140 |
Credit - CVA | 385 | 390 |
Bid - Offer | 108 | 148 |
Product and deal specific | 163 | 172 |
Financial instruments valuation adjustments | £ 735 | £ 850 |
Financial instruments_ class_13
Financial instruments: classification - Assets at Amortised Cost (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair value of assets | ||
Other financial assets - securities | £ 775,858 | £ 799,491 |
Carrying value, Financial liabilities | 731,973 | 755,667 |
Cash and balances at central banks | ||
Fair value of assets | ||
Other financial assets - securities | 151,511 | 124,489 |
Items where fair values approximates carrying value | Cash and balances at central banks | ||
Fair value of assets | ||
Other financial assets - securities | 151,500 | 124,500 |
Items where fair values approximates carrying value | Settlement balances | ||
Fair value of assets | ||
Other financial assets - securities | 7,800 | 2,300 |
Items where fair values approximates carrying value | Loans to banks - amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 300 | 100 |
Carrying value | Loans to banks - amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 7,900 | 6,900 |
Carrying value | Loans to customers - amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 362,700 | 360,500 |
Carrying value | Securities | ||
Fair value of assets | ||
Other financial assets - securities | 9,000 | 9,800 |
Fair value | Loans to banks - amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 7,900 | 6,900 |
Fair value | Loans to banks - amortised cost | Level 2 | ||
Fair value of assets | ||
Other financial assets - securities | 5,000 | 3,800 |
Fair value | Loans to banks - amortised cost | Level 3 | ||
Fair value of assets | ||
Other financial assets - securities | 2,900 | 3,100 |
Fair value | Loans to customers - amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 359,800 | 359,200 |
Fair value | Loans to customers - amortised cost | Level 2 | ||
Fair value of assets | ||
Other financial assets - securities | 25,300 | 25,200 |
Fair value | Loans to customers - amortised cost | Level 3 | ||
Fair value of assets | ||
Other financial assets - securities | 334,500 | 334,000 |
Fair value | Securities | ||
Fair value of assets | ||
Other financial assets - securities | 9,100 | 10,100 |
Fair value | Securities | Level 1 | ||
Fair value of assets | ||
Other financial assets - securities | 5,400 | 5,900 |
Fair value | Securities | Level 2 | ||
Fair value of assets | ||
Other financial assets - securities | 900 | 1,200 |
Fair value | Securities | Level 3 | ||
Fair value of assets | ||
Other financial assets - securities | £ 2,800 | £ 3,000 |
Financial instruments_ class_14
Financial instruments: classification - Liabilities at Amortised Cost (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair value of liabilities | ||
Carrying value, Financial liabilities | £ 731,973 | £ 755,667 |
Bank deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 14,394 | 20,606 |
Customer deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 467,214 | 431,739 |
Settlement balances | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 7,119 | 5,545 |
Subordinated liabilities | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 8,696 | 9,962 |
Notes in circulation | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 2,906 | 2,655 |
Items where fair values approximates carrying value | Bank deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 5,900 | 4,400 |
Items where fair values approximates carrying value | Customer deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 388,100 | 371,700 |
Items where fair values approximates carrying value | Settlement balances | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 7,100 | 5,500 |
Items where fair values approximates carrying value | Notes in circulation | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 2,900 | 2,700 |
Carrying value | Bank deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 8,500 | 16,200 |
Carrying value | Customer deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 79,100 | 60,000 |
Carrying value | Debt securities in issue | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 44,200 | 43,400 |
Carrying value | Subordinated liabilities | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 8,000 | 9,200 |
Fair value | Bank deposits | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 8,500 | 16,200 |
Fair value | Bank deposits | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 3,700 | 11,300 |
Fair value | Bank deposits | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 4,800 | 4,900 |
Fair value | Customer deposits | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 79,100 | 60,100 |
Fair value | Customer deposits | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 20,700 | 10,100 |
Fair value | Customer deposits | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 58,400 | 50,000 |
Fair value | Debt securities in issue | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 45,300 | 44,600 |
Fair value | Debt securities in issue | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 34,900 | 34,700 |
Fair value | Debt securities in issue | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 10,400 | 9,900 |
Fair value | Subordinated liabilities | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 8,500 | 9,800 |
Fair value | Subordinated liabilities | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 8,400 | 9,700 |
Fair value | Subordinated liabilities | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | £ 100 | £ 100 |
Provisions for liabilities an_3
Provisions for liabilities and charges (Details) - GBP (£) £ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | |
Provisions for liabilities and charges | |||
Balance at beginning of the period | £ 1,616 | £ 1,852 | £ 1,852 |
Expected credit losses impairment charge | (18) | 6 | |
Currency translation and other movements | (7) | (11) | |
Charge to income statement | 97 | 98 | |
Release to income statement | (105) | (31) | |
Provisions utilised | (177) | (298) | |
Balance at end of the period | 1,406 | 1,616 | 1,406 |
Customer redress | |||
Provisions for liabilities and charges | |||
Balance at beginning of the period | 537 | 749 | 749 |
Currency translation and other movements | (3) | ||
Charge to income statement | 32 | 17 | |
Release to income statement | (7) | (4) | |
Provisions utilised | (87) | (222) | |
Balance at end of the period | 475 | 537 | 475 |
Property | |||
Provisions for liabilities and charges | |||
Balance at beginning of the period | 265 | 270 | 270 |
Currency translation and other movements | 1 | ||
Charge to income statement | 22 | 13 | |
Release to income statement | (20) | (8) | |
Provisions utilised | (8) | (10) | |
Balance at end of the period | 260 | 265 | 260 |
Financial commitments and guarantees | |||
Provisions for liabilities and charges | |||
Balance at beginning of the period | 184 | 179 | 179 |
Expected credit losses impairment charge | (18) | 6 | |
Currency translation and other movements | (1) | ||
Balance at end of the period | 166 | 184 | 166 |
Other | |||
Provisions for liabilities and charges | |||
Balance at beginning of the period | 283 | 289 | 289 |
Currency translation and other movements | (8) | (2) | |
Charge to income statement | 42 | 60 | |
Release to income statement | (10) | (9) | |
Provisions utilised | (62) | (55) | |
Balance at end of the period | 245 | 283 | 245 |
Litigation and other regulatory (incl. RMBS) | |||
Provisions for liabilities and charges | |||
Balance at beginning of the period | 347 | 365 | 365 |
Currency translation and other movements | (5) | ||
Charge to income statement | 1 | 8 | |
Release to income statement | (68) | (10) | |
Provisions utilised | (20) | (11) | |
Balance at end of the period | £ 260 | £ 347 | £ 260 |
Dividends (Details)
Dividends (Details) £ / shares in Units, £ in Millions | 6 Months Ended |
Jun. 30, 2021GBP (£)£ / shares | |
Dividends | |
Interim dividend announced | £ | £ 347 |
Interim dividend per share | £ / shares | £ 0.03 |
Loan impairment provisions (Det
Loan impairment provisions (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Loan impairment provisions | |||
Financial Assets | £ 775,858 | £ 799,491 | |
ECL provisions | £ 4,925 | £ 6,186 | |
Expected Credit Loss, Provision Coverage | 1.31% | 1.66% | |
ECL (release)/charge | £ (707) | £ 2,858 | |
ECL loss rate - annualised (basis points) | (0.38%) | 1.54% | |
Amounts written off | £ 517 | £ 408 | |
Contingent liabilities | |||
Loan impairment provisions | |||
ECL (release)/charge | 2 | 8 | |
Other financial assets | |||
Loan impairment provisions | |||
Financial Assets | 51,469 | £ 55,148 | |
ECL (release)/charge | 4 | 5 | |
FVOCI | |||
Loan impairment provisions | |||
Financial Assets | 42,085 | 44,902 | |
ECL provisions | 6 | 6 | |
FVOCI | Other financial assets | |||
Loan impairment provisions | |||
Financial Assets | 42,085 | 44,902 | |
ECL (release)/charge | 0 | 4 | |
Loans and advances | |||
Loan impairment provisions | |||
Financial Assets | 375,592 | 372,399 | |
Cash at central banks | |||
Loan impairment provisions | |||
Financial Assets | 150,500 | 122,700 | |
Secured | |||
Loan impairment provisions | |||
Financial Assets | 49,800 | 53,800 | |
Stage 1 | |||
Loan impairment provisions | |||
ECL provisions | £ 433 | £ 519 | |
Expected Credit Loss, Provision Coverage | 0.14% | 0.18% | |
ECL (release)/charge | £ (701) | 308 | |
Stage 1 | Loans and advances | |||
Loan impairment provisions | |||
Financial Assets | 316,701 | £ 287,124 | |
Stage 2 | |||
Loan impairment provisions | |||
ECL provisions | £ 2,300 | £ 3,081 | |
Expected Credit Loss, Provision Coverage | 4.32% | 3.90% | |
ECL (release)/charge | £ (100) | 2,150 | |
Stage 2 | Loans and advances | |||
Loan impairment provisions | |||
Financial Assets | 53,188 | £ 78,917 | |
Stage 3 | |||
Loan impairment provisions | |||
ECL provisions | £ 2,192 | £ 2,586 | |
Expected Credit Loss, Provision Coverage | 38.44% | 40.67% | |
ECL (release)/charge | £ 94 | 400 | |
Stage 3 | Loans and advances | |||
Loan impairment provisions | |||
Financial Assets | 5,703 | £ 6,358 | |
Of which: individual | |||
Loan impairment provisions | |||
ECL provisions | 560 | 831 | |
ECL (release)/charge | (25) | 131 | |
Amounts written off | 256 | 41 | |
Of which: individual | Loans and advances | |||
Loan impairment provisions | |||
Financial Assets | 1,851 | 2,292 | |
Of which: collective | |||
Loan impairment provisions | |||
ECL provisions | 1,632 | 1,755 | |
ECL (release)/charge | 119 | 269 | |
Amounts written off | 261 | £ 367 | |
Of which: collective | Loans and advances | |||
Loan impairment provisions | |||
Financial Assets | £ 3,852 | £ 4,066 |
Contingent liabilities and co_3
Contingent liabilities and commitments (Details) - GBP (£) £ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Contingent liabilities and commitments | ||
Standby facilities, credit lines and other commitments | £ 119,387 | £ 124,167 |
Contingent liabilities and commitments | 123,509 | 128,732 |
Guarantees | ||
Contingent liabilities and commitments | ||
Estimated net exposure | 2,005 | 2,244 |
Other contingent liabilities | ||
Contingent liabilities and commitments | ||
Estimated net exposure | £ 2,117 | £ 2,321 |
Litigation and regulatory mat_2
Litigation and regulatory matters (Details) € in Millions, $ in Millions, $ in Millions | May 20, 2021GBP (£) | Dec. 31, 2020GBP (£) | Oct. 31, 2020GBP (£) | May 31, 2020GBP (£) | May 31, 2019AUD ($)GBP (£) | Oct. 31, 2017item | Dec. 31, 2016action | Oct. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Oct. 31, 2018item | Jun. 30, 2021GBP (£)lawsuit | Mar. 31, 2021GBP (£) | Jun. 30, 2021GBP (£)lawsuititemaction | Jun. 30, 2021USD ($)actionlawsuititem | Jun. 30, 2021EUR (€)actionlawsuititem | Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£) | Dec. 31, 2015GBP (£)company | Dec. 31, 2015USD ($)company | Dec. 31, 2012GBP (£) | Jun. 30, 2021EUR (€)lawsuit | Mar. 23, 2021EUR (€) | Jul. 31, 2017item |
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Tax Assessments | £ 143,000,000 | ||||||||||||||||||||||
Payments for tax assessments | £ 143,000,000 | ||||||||||||||||||||||
Provisions utilised | £ 177,000,000 | £ 298,000,000 | |||||||||||||||||||||
Treatment of tracker mortgage customers | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Total aggregate provisions | 300,000,000 | £ 300,000,000 | € 350 | ||||||||||||||||||||
Provisions utilised | 282,000,000 | € 328 | |||||||||||||||||||||
Agreed fine payable | € | € 37.8 | ||||||||||||||||||||||
Internal review from treatment of tracker mortgage customers | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Total aggregate provisions | 130,000,000 | £ 130,000,000 | 151 | ||||||||||||||||||||
EC | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of other parties subject to lawsuit or legal investigation | 6 | ||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US, issued by Nomura Holding America Inc and subsidiaries | |||||||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||||||
Final settlement amount | $ | $ 400 | ||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Settlement amount paid | $ | $ 55.3 | ||||||||||||||||||||||
London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of non-class action | action | 24 | ||||||||||||||||||||||
Number of non-class actions pending | action | 7 | ||||||||||||||||||||||
Number of failed US banks | item | 39 | ||||||||||||||||||||||
JPY LIBOR and Euroyen TIBOR | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of class action lawsuits | 2 | ||||||||||||||||||||||
Different Reference Rates | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of class action lawsuits | 5 | ||||||||||||||||||||||
Number of class actions dismissed but appealed | 4 | ||||||||||||||||||||||
FX antitrust litigation | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Settlement amount paid | $ | $ 255 | ||||||||||||||||||||||
Federal Court of Australia FX antitrust litigation | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Maximum Total Transaction Value | $ | $ 0.5 | ||||||||||||||||||||||
Number of other parties subject to lawsuit or legal investigation | 4 | ||||||||||||||||||||||
UK Competition Appeal Tribunal | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of applications for opt-out collective proceedings | 2 | ||||||||||||||||||||||
Tel Aviv District Court FX antitrust litigations [Member] | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of class action lawsuits | 1 | ||||||||||||||||||||||
Numer of motions to certify FX-related class actions | item | 2 | ||||||||||||||||||||||
Swaps antitrust litigation | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of swap execution facilities | item | 3 | 3 | 3 | ||||||||||||||||||||
Madoff | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of class action lawsuits | action | 2 | 2 | 2 | ||||||||||||||||||||
Damages claimed | $ | $ 21.8 | $ 276.3 | |||||||||||||||||||||
SMEs | FCA | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Total aggregate provisions | 22,000,000 | £ 22,000,000 | |||||||||||||||||||||
Tax dispute | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Damages claimed | £ 71,400,000 | ||||||||||||||||||||||
Damages Awarded | £ 45,000,000 | ||||||||||||||||||||||
Value-added-tax | £ 86,000,000 | ||||||||||||||||||||||
Number of claimants | company | 10 | 10 | |||||||||||||||||||||
NatWest | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of terrorist attacks claims dismissed | item | 2 | ||||||||||||||||||||||
Number of terrorist attacks claimed | item | 18 | ||||||||||||||||||||||
NatWest | Internal review from treatment of tracker mortgage customers | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Total aggregate provisions | £ 140,000,000 | £ 140,000,000 | € 163 | ||||||||||||||||||||
NatWest | France local authorities | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||
Number of complaints filed | lawsuit | 2 | 2 | 2 | ||||||||||||||||||||
Number of claims appealed | lawsuit | 1 | 1 | 1 |
Related party transactions (Det
Related party transactions (Details) | 6 Months Ended |
Jun. 30, 2021 | |
Other related parties | |
Related party transactions | |
Percentage of ownership interest | 20.00% |
UBIDAC significant transactio_2
UBIDAC significant transactions (Details) € in Billions | Jun. 28, 2021EUR (€)item | Mar. 31, 2021EUR (€)item |
Allied Irish Banks, p.l.c | ||
Post balance sheet events | ||
Sale of financial assets | € 4.2 | |
Undrawn exposure | € 2.8 | |
Approximate number of employees to transfer | item | 280 | |
Estimated balance | € 4 | |
Permanent TSB Group Holdings p.l.c. | ||
Post balance sheet events | ||
Number of branch locations | item | 25 | |
Gross performing loans | € 7.6 |
Post balance sheet events (Deta
Post balance sheet events (Details) £ in Millions | 6 Months Ended |
Dec. 31, 2021GBP (£) | |
Potential ordinary share transactions | |
Post balance sheet events | |
Ordinary share buy-back programme | £ 750 |