Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information [Line Items] | |
Entity Registrant Name | NatWest Group plc |
Entity Central Index Key | 0000844150 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2023 |
Amendment Flag | false |
Document Fiscal Period Focus | FY |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Incorporation, State or Country Code | X0 |
Entity File Number | 001-10306 |
Entity Address, Address Line One | Gogarburn |
Entity Address, Address Line Two | PO Box 1000 |
Entity Address, City or Town | Edinburgh |
Entity Address, Country | GB |
Entity Address, Postal Zip Code | EH12 1HQ |
Entity Interactive Data Current | Yes |
Entity Well-known Seasoned Issuer | No |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | International Financial Reporting Standards |
Entity Shell Company | false |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
ICFR Auditor Attestation Flag | true |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 1438 |
Auditor Location | London, United Kingdom |
Document Financial Statement Error Correction [Flag] | false |
Chief Governance Officer and Company Secretary | |
Document Information [Line Items] | |
Entity Address, Address Line One | Gogarburn |
Entity Address, Address Line Two | PO Box 1000 |
Entity Address, City or Town | Edinburgh |
Entity Address, Country | GB |
Entity Address, Postal Zip Code | EH12 1HQ |
Contact Personnel Name | Jan Cargill |
City Area Code | +44 (0) |
Local Phone Number | 370 702 0135 |
American Depositary Shares, each representing 2 ordinary shares, nominal value £1 per share | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares, each representing 2 ordinary shares, nominal value £1.0769 per share |
Trading Symbol | NWG |
Security Exchange Name | NYSE |
Ordinary shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Ordinary shares, nominal value £1.0769 per share* |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 8,991,736,976 |
No Trading Symbol Flag | true |
4.269% Fixed Rate / Floating Rate Senior Notes due 2025 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.269% Fixed Rate / Floating Rate Senior Notes due 2025 |
Trading Symbol | NWG25 |
Security Exchange Name | NYSE |
1.642% Senior Callable Fixed-to-Fixed Reset Rate Notes due 2027 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.642% Senior Callable Fixed-to-fixed Reset Rate Notes due 2027 |
Trading Symbol | NWG27 |
Security Exchange Name | NYSE |
5.516% Senior Callable Fixed-to-fixed Reset Rate Notes due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.516% Senior Callable Fixed-to-fixed Reset Rate Notes due 2028 |
Trading Symbol | NWG/28A |
Security Exchange Name | NYSE |
7.472% Callable Fixed-to-fixed Reset Rate Senior Notes due 2026 | |
Document Information [Line Items] | |
Title of 12(b) Security | 7.472% Callable Fixed-to-fixed Reset Rate Senior Notes due 2026 |
Trading Symbol | NWG26A |
Security Exchange Name | NYSE |
5.808% Senior Callable Fixed-to-fixed Reset Rate Notes due 2029 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.808% Senior Callable Fixed-to-fixed Reset Rate Notes due 2029 |
Trading Symbol | NWG29B |
Security Exchange Name | NYSE |
6.016% Senior Callable Fixed-to-fixed Reset Rate Notes due 2034 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.016% Senior Callable Fixed-to-fixed Reset Rate Notes due 2034 |
Trading Symbol | NWG34 |
Security Exchange Name | NYSE |
5.847% Senior Callable Fixed-to-fixed Reset Rate Notes due 2027 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.847% Senior Callable Fixed-to-fixed Reset Rate Notes due 2027 |
Trading Symbol | NWG27A |
Security Exchange Name | NYSE |
3.073% Callable Fixed-to-fixed Reset Rate Senior Notes due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.073% Callable Fixed-to-fixed Reset Rate Senior Notes due 2028 |
Trading Symbol | NWG28 |
Security Exchange Name | NYSE |
4.892% Fixed Rate / Floating Rate Senior Notes due 2029 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.892% Fixed Rate / Floating Rate Senior Notes due 2029 |
Trading Symbol | NWG29 |
Security Exchange Name | NYSE |
5.076% Fixed Rate / Floating Rate Senior Notes due 2030 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.076% Fixed Rate / Floating Rate Senior Notes due 2030 |
Trading Symbol | NWG30 |
Security Exchange Name | NYSE |
4.445% Fixed Rate / Floating Rate Senior Notes due 2030 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.445% Fixed Rate / Floating Rate Senior Notes due 2030 |
Trading Symbol | NWG30A |
Security Exchange Name | NYSE |
5.125% Subordinated Tier 2 Notes due 2024 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.125% Subordinated Tier 2 Notes due 2024 |
Trading Symbol | NWG24 |
Security Exchange Name | NYSE |
3.754% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2029 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.754% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2029 |
Trading Symbol | NWG29A |
Security Exchange Name | NYSE |
3.032% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2035 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.032% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2035 |
Trading Symbol | NWG35 |
Security Exchange Name | NYSE |
11% Cumulative Preference Shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 240,686 |
5 1/2% Cumulative Preference Shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 242,454 |
Consolidated income statement
Consolidated income statement - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Consolidated income statement | |||||
Interest receivable | £ 21,026 | £ 12,637 | £ 9,234 | [1],[2] | |
Interest payable | (9,977) | (2,795) | (1,699) | [1],[2] | |
Net interest income | 11,049 | 9,842 | 7,535 | [1],[2] | |
Fees and commissions receivable | 2,983 | 2,915 | 2,694 | [1] | |
Fees and commissions payable | (653) | (623) | (574) | [1] | |
Trading income | 794 | 1,133 | 323 | [1],[3] | |
Other operating income | 579 | (111) | 451 | [1],[3] | |
Non-interest income | 3,703 | 3,314 | 2,894 | [1],[3] | |
Total income | 14,752 | 13,156 | 10,429 | [1] | |
Staff costs | (3,901) | (3,716) | (3,676) | [1] | |
Premises and equipment | (1,153) | (1,112) | (1,133) | [1] | |
Other administrative expenses | (2,008) | (2,026) | (2,026) | [1] | |
Depreciation and amortisation | (934) | (833) | (923) | [1] | |
Operating expenses | (7,996) | (7,687) | (7,758) | [1] | |
Profit before impairment losses/releases | 6,756 | 5,469 | 2,671 | [1] | |
Impairment (losses)/releases | (578) | (337) | 1,173 | [1] | |
Operating profit before tax | [4] | 6,178 | 5,132 | 3,844 | [1] |
Tax charge | (1,434) | (1,275) | (996) | [1] | |
Profit from continuing operations | 4,744 | 3,857 | 2,848 | [1] | |
(Loss)/profit from discontinued operations, net of tax | [5] | (112) | (262) | 464 | [1] |
Profit for the year | 4,632 | 3,595 | 3,312 | [1] | |
Attributable to: | |||||
Ordinary shareholders | 4,394 | 3,340 | 2,950 | [1] | |
Preference shareholders | [1] | 19 | |||
Paid-in equity holders | 242 | 249 | 299 | [1] | |
Non-controlling interests | (4) | 6 | 44 | [1] | |
Profit for the year | £ 4,632 | £ 3,595 | £ 3,312 | [1] | |
Per ordinary share | |||||
Earnings per ordinary share - continuing operations | £ 0.49170 | £ 0.365 | £ 0.230 | [1] | |
Earnings per ordinary share - discontinued operations | (0.01222) | (0.027) | 0.043 | [1] | |
Total earnings per share attributable to ordinary shareholders - basic | [6] | 0.47948 | 0.338 | 0.273 | [1] |
Earnings per ordinary share - fully diluted continuing operations | 0.489 | 0.362 | 0.229 | [1] | |
Earnings per ordinary share - fully diluted discontinued operations | (0.012) | (0.026) | 0.043 | [1] | |
Total earnings per share attributable to ordinary shareholders - fully diluted | £ 0.477 | £ 0.336 | £ 0.272 | [1] | |
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements . Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated financial statements. The results of discontinued operations, comprising the post-tax profit, is shown as a single amount on the face of the income statement. An analysis of this amount is presented in Note 8 to the consolidated financial statements In 2023, the unrounded Total earnings per share attributable to ordinary shareholders – basic is 47.948 p. The unrounded Earnings per ordinary share – continuing operations was 49.170 p. The unrounded Earnings per ordinary share – discontinued operations was ( 1.222 p) . |
Consolidated income statement (
Consolidated income statement (Parenthetical) | 12 Months Ended | |||||
Aug. 30, 2022 | Dec. 31, 2023 £ / shares | Dec. 31, 2022 £ / shares | Dec. 31, 2021 £ / shares | [2] | ||
Consolidated income statement | ||||||
Share consolidation ratio | 0.9286 | |||||
Earnings per ordinary share | [1] | £ 0.47948 | £ 0.338 | £ 0.273 | ||
Earnings per ordinary share - continuing operations | 0.49170 | 0.365 | 0.230 | |||
Earnings per ordinary share - discontinued operations | £ (0.01222) | £ (0.027) | £ 0.043 | |||
[1] In 2023, the unrounded Total earnings per share attributable to ordinary shareholders – basic is 47.948 p. The unrounded Earnings per ordinary share – continuing operations was 49.170 p. The unrounded Earnings per ordinary share – discontinued operations was ( 1.222 p) . Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Consolidated statement of compr
Consolidated statement of comprehensive income - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Consolidated statement of comprehensive income | |||||
Profit for the year | £ 4,632 | £ 3,595 | £ 3,312 | [1] | |
Items that do not qualify for reclassification | |||||
Remeasurement of retirement benefit schemes | (280) | (840) | (669) | ||
Changes in fair value of credit in financial liabilities designated at FVTPL | (39) | 50 | (29) | ||
FVOCI financial assets | 17 | 59 | 13 | ||
Tax | 79 | 187 | 164 | ||
Total - Items that do not qualify for reclassification | (223) | (544) | (521) | ||
Items that do qualify for reclassification | |||||
FVOCI financial assets | 49 | (457) | (100) | ||
Cash flow hedges | [2] | 1,208 | (3,277) | (848) | |
Currency translation | (619) | 241 | (382) | ||
Tax | (361) | 1,067 | 213 | ||
Total - Items that do qualify for reclassification | 277 | (2,426) | (1,117) | ||
Other comprehensive income/(losses) after tax | 54 | (2,970) | (1,638) | ||
Total comprehensive income for the year | 4,686 | 625 | 1,674 | ||
Attributable to: | |||||
Ordinary shareholders | 4,448 | 370 | 1,308 | ||
Preference shareholders | 19 | ||||
Paid-in equity holders | 242 | 249 | 299 | ||
Non-controlling interests | (4) | 6 | 48 | ||
Total comprehensive income for the year | £ 4,686 | £ 625 | £ 1,674 | ||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Refer to footnotes 6 and 7 of the Consolidated statement of changes in equity |
Consolidated balance sheet
Consolidated balance sheet - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and balances at central banks | £ 104,262 | £ 144,832 |
Trading assets | 45,551 | 45,577 |
Derivatives | 78,904 | 99,545 |
Settlement balances | 7,231 | 2,572 |
Loans to banks - amortised cost | 6,914 | 7,139 |
Loans to customers - amortised cost | 381,433 | 366,340 |
Securities subject to repurchase agreements | 8,764 | 2,901 |
Other financial assets excluding securities subject to repurchase agreements | 42,338 | 27,994 |
Other financial assets | 51,102 | 30,895 |
Intangible assets | 7,614 | 7,116 |
Other assets | 8,760 | 9,176 |
Assets of disposal groups | 902 | 6,861 |
Total assets | 692,673 | 720,053 |
Liabilities | ||
Bank deposits | 22,190 | 20,441 |
Customer deposits | 431,377 | 450,318 |
Settlement balances | 6,645 | 2,012 |
Trading liabilities | 53,636 | 52,808 |
Derivatives | 72,395 | 94,047 |
Other financial liabilities | 55,089 | 49,107 |
Subordinated liabilities | 5,714 | 6,260 |
Notes in circulation | 3,237 | 3,218 |
Other liabilities | 5,202 | 5,346 |
Total liabilities | 655,485 | 683,557 |
Equity | ||
Ordinary shareholders' interests | 33,267 | 32,598 |
Other owners' interests | 3,890 | 3,890 |
Owners' equity | 37,157 | 36,488 |
Non-controlling interests | 31 | 8 |
Total equity | 37,188 | 36,496 |
Total liabilities and equity | £ 692,673 | £ 720,053 |
Consolidated statement of chang
Consolidated statement of changes in equity - GBP (£) £ in Millions | Total owners' equity | Share capital and share premium | Paid-in equity | Other statutory | [1] | Retained earnings | Fair value | Cash flow hedging | [2],[3] | Foreign exchange | Merger | Non-controlling interests | Total | ||
Equity at beginning of period at Dec. 31, 2020 | £ 43,860 | £ 13,240 | £ 4,999 | £ (24) | £ 12,567 | £ 360 | £ 229 | £ 1,608 | £ 10,881 | £ (36) | £ 43,824 | ||||
Profit attributable to ordinary shareholders and other equity owners | |||||||||||||||
Profit from continuing operations | 2,804 | 2,804 | 44 | 2,848 | [4] | ||||||||||
Profit (loss) from discontinued operations | 464 | 464 | 464 | [4],[5] | |||||||||||
Other comprehensive income | |||||||||||||||
Realised gains/(losses) in period on FVOCI equity shares | 3 | (3) | |||||||||||||
Remeasurement of retirement benefit schemes | (669) | (669) | (669) | ||||||||||||
Changes in fair value of credit in financial liabilities designated at FVTPL | (29) | (29) | (29) | ||||||||||||
Unrealised losses | 32 | 32 | 32 | ||||||||||||
Amounts recognised in equity | (687) | (687) | (687) | ||||||||||||
Retranslation of net assets | (484) | (484) | 4 | (480) | |||||||||||
Gains/(losses) on hedges of net assets | 88 | 88 | 88 | ||||||||||||
Amount transferred from equity to earnings | [6] | 270 | 119 | 161 | (10) | 270 | |||||||||
Tax | 377 | 171 | (1) | 224 | (17) | 377 | |||||||||
Total comprehensive income for the year | 1,626 | 2,744 | (91) | (624) | (403) | 48 | 1,674 | ||||||||
Transactions with owners | |||||||||||||||
Ordinary share dividends paid | (693) | (693) | (5) | (698) | |||||||||||
Equity preference dividends paid | (19) | (19) | (19) | ||||||||||||
Paid-in equity dividends paid | (299) | (299) | (299) | ||||||||||||
Shares repurchased during the period | [7],[8] | (1,423) | (698) | 698 | (1,423) | (1,423) | |||||||||
Redemption of preference shares | 24 | (24) | |||||||||||||
Shares and securities issued during the period | [9] | 1,024 | 87 | 937 | 1,024 | ||||||||||
Reclassification of paid-in equity | [10] | (1,896) | (2,046) | 150 | (1,896) | ||||||||||
Employee share scheme | 8 | 8 | 8 | ||||||||||||
Shares vested under employee share schemes | 36 | 36 | 36 | ||||||||||||
Share based payments | (45) | (45) | (45) | ||||||||||||
Own shares acquired | [7] | (383) | (383) | (383) | |||||||||||
Equity at end of period at Dec. 31, 2021 | [11] | 41,796 | 12,629 | 3,890 | 351 | 12,966 | 269 | (395) | 1,205 | 10,881 | 7 | 41,803 | |||
Profit attributable to ordinary shareholders and other equity owners | |||||||||||||||
Profit from continuing operations | 3,851 | 3,851 | 6 | 3,857 | |||||||||||
Profit (loss) from discontinued operations | (262) | (262) | (262) | [5] | |||||||||||
Other comprehensive income | |||||||||||||||
Realised gains/(losses) in period on FVOCI equity shares | 113 | (113) | |||||||||||||
Remeasurement of retirement benefit schemes | (840) | (840) | (840) | ||||||||||||
Changes in fair value of credit in financial liabilities designated at FVTPL | 50 | 50 | 50 | ||||||||||||
Unrealised losses | (570) | (570) | (570) | ||||||||||||
Amounts recognised in equity | (2,973) | (2,973) | (2,973) | ||||||||||||
Retranslation of net assets | 512 | 512 | 512 | ||||||||||||
Gains/(losses) on hedges of net assets | (266) | (266) | (266) | ||||||||||||
Amount transferred from equity to earnings | [6] | 137 | (172) | 304 | 5 | 137 | |||||||||
Tax | 1,254 | 181 | 140 | 901 | 32 | 1,254 | |||||||||
Total comprehensive income for the year | 619 | 3,093 | (371) | (2,376) | 273 | 6 | 625 | ||||||||
Transactions with owners | |||||||||||||||
Ordinary share dividends paid | (1,205) | (1,205) | (5) | (1,210) | |||||||||||
Special dividends paid | (1,746) | (1,746) | (1,746) | ||||||||||||
Paid-in equity dividends paid | (249) | (249) | (249) | ||||||||||||
Shares repurchased during the period | [7],[8] | (2,054) | (929) | 929 | (2,054) | (2,054) | |||||||||
Redemption of preference shares | [12] | (750) | (750) | (750) | |||||||||||
Tax on redemption of paid-in equity | (36) | (36) | (36) | ||||||||||||
Employee share scheme | 6 | 6 | 6 | ||||||||||||
Shares vested under employee share schemes | 113 | 113 | 113 | ||||||||||||
Share based payments | (6) | (6) | (6) | ||||||||||||
Equity at end of period at Dec. 31, 2022 | 36,488 | 11,700 | 3,890 | 1,393 | 10,019 | (102) | (2,771) | 1,478 | 10,881 | 8 | 36,496 | ||||
Profit attributable to ordinary shareholders and other equity owners | |||||||||||||||
Profit from continuing operations | 4,748 | 4,748 | (4) | 4,744 | |||||||||||
Profit (loss) from discontinued operations | (112) | (112) | (112) | [5] | |||||||||||
Other comprehensive income | |||||||||||||||
Realised gains/(losses) in period on FVOCI equity shares | 1 | (1) | |||||||||||||
Remeasurement of retirement benefit schemes | (280) | (280) | (280) | ||||||||||||
Changes in fair value of credit in financial liabilities designated at FVTPL | (39) | (39) | (39) | ||||||||||||
Unrealised losses | 22 | 22 | 22 | ||||||||||||
Amounts recognised in equity | 187 | 187 | 187 | ||||||||||||
Retranslation of net assets | (239) | (239) | (239) | ||||||||||||
Gains/(losses) on hedges of net assets | 107 | 107 | 107 | ||||||||||||
Amount transferred from equity to earnings | [6] | (578) | (44) | (1,021) | 487 | (578) | |||||||||
Tax | (282) | 84 | (12) | (336) | (18) | (282) | |||||||||
Total comprehensive income for the year | 4,690 | 4,402 | 53 | 872 | (637) | (4) | 4,686 | ||||||||
Transactions with owners | |||||||||||||||
Ordinary share dividends paid | (1,456) | (1,456) | (5) | (1,461) | |||||||||||
Paid-in equity dividends paid | (242) | (242) | (242) | ||||||||||||
Shares repurchased during the period | [7],[8] | (2,057) | (856) | 856 | (2,057) | (2,057) | |||||||||
Employee share scheme | 14 | 14 | 14 | ||||||||||||
Shares vested under employee share schemes | 114 | 114 | 114 | ||||||||||||
Share based payments | (35) | (35) | (35) | ||||||||||||
Own shares acquired | [7] | (359) | (359) | (359) | |||||||||||
Acquisition of subsidiary | 32 | 32 | |||||||||||||
Equity at end of period at Dec. 31, 2023 | £ 37,157 | £ 10,844 | £ 3,890 | £ 2,004 | £ 10,645 | £ (49) | £ (1,899) | £ 841 | £ 10,881 | £ 31 | £ 37,188 | ||||
[1] Other statutory reserves consist of Capital redemption reserves of £2,507 million (2022 - £1,651 million, 2021 - £722 million) and Own shares held reserves of £503 million (2022 - £258 million, 2021 - £371 million) As referred in Note 14, the amount transferred from equity to the income statement is mostly recorded within net interest income mainly in loans to customers, balances at central banks and customer deposits as per Note 1 . The change in the cash flow hedging reserve is driven by realised accrued interest transferred into the income statement and a decrease in swap rates compared to previous periods where they rose. The portfolio of hedging instruments is predominantly receive fixed swaps. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. The results of discontinued operations, comprising the post-tax profit, is shown as a single amount on the face of the income statement. An analysis of this amount is presented in Note 8 to the consolidated financial statements Includes £ 460 million foreign exchange recycled to profit or loss upon completion of a capital repayment by UBIDAC. In May 2023, there was an agreement to buy 469.2 million (March 2022 – 549.9 million, March 2021 - 591.0 million) ordinary shares of the Company from UK Government Investments Ltd (UKGI) at 268.4 pence per share (March 2022 - 220.5 pence per share, March 2021 - 190.5 pence per share) for the total consideration of £1.3 billion (2022 - £1.2 billion, 2021 - £1.1 billion). NatWest Group cancelled 336.2 million of the purchased ordinary shares, amounting to £906.9 million excluding fees and held the remaining 133.0 million shares as Own Shares Held, amounting to £358.8 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve. NatWest Group plc repurchased and cancelled 460.3 million (2022 – 379.3 million, 2021 - 310.8 million) shares, of which 2.3 million were settled in January 2024. The total consideration of these shares excluding fees was £ 1,151.7 million (2022 - £829.3 million, 2021 £676.2 million), of which £4.9 million were settled in January 2024, as part of the On Market Share Buyback Programmes. The nominal value of the share cancellations has been transferred to the capital redemption reserve. There was an issue of shares in 2021. This is split between Ordinary share capital of £37 million and Share premium of £50 million. In July 2021, paid-in equity was reclassified to liabilities as the result of a call in August 2021 of US $2.65 billion AT1 capital notes. In 2021, the Total equity balance of £ 41,803 million includes £494 million attributable to Preference shareholders. Following an announcement of a Regulatory Call in February 2022, the Series U preference shares were reclassified to liabilities. A £254 million loss was recognised in retained earnings as a result of foreign exchange unlocking. |
Consolidated statement of cha_2
Consolidated statement of changes in equity (Parenthetical) - GBP (£) £ in Millions, shares in Millions | 1 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2024 | May 31, 2023 | Mar. 31, 2022 | Feb. 28, 2022 | Mar. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | |||
Own shares acquired/Shares repurchased | [1],[2] | £ 2,057 | £ 2,054 | £ 1,423 | |||||||
Consideration for shares repurchased | 2,416 | 2,054 | 1,806 | ||||||||
Net (loss) gain as a result of significant movements in underlying actuarial assumptions | (776) | ||||||||||
Loss recognised on reclassification between equity and liabilities | £ 254 | ||||||||||
Notional amount of paid in equity notes reclassified to liabilities | £ 2,650 | ||||||||||
Issue of equity | [3] | 1,024 | |||||||||
Equity | 37,188 | 36,496 | 41,803 | [4] | |||||||
Equity attributable to preference shareholders | 494 | ||||||||||
Main Pension Scheme | |||||||||||
Net (loss) gain as a result of significant movements in underlying actuarial assumptions | (585) | ||||||||||
Paid-in equity | |||||||||||
Issue of equity | [3] | 937 | |||||||||
Equity | 3,890 | 3,890 | 3,890 | [4] | |||||||
Retained earnings | |||||||||||
Own shares acquired/Shares repurchased | [1],[2] | 2,057 | 2,054 | 1,423 | |||||||
Equity | 10,645 | 10,019 | 12,966 | [4] | |||||||
Ordinary share capital | |||||||||||
Issue of equity | 37 | ||||||||||
Share premium | |||||||||||
Issue of equity | 50 | ||||||||||
Other statutory | |||||||||||
Own shares acquired/Shares repurchased | [1],[2],[5] | (856) | (929) | (698) | |||||||
Capital redemption reserve | 2,507 | 1,651 | 722 | ||||||||
Value of own shares held | 503 | 258 | 371 | ||||||||
Equity | [5] | £ 2,004 | 1,393 | 351 | [4] | ||||||
UK Government Investments Ltd (UKGI) | |||||||||||
Purchase price per share | £ 2.684 | £ 2.205 | £ 1.905 | ||||||||
Consideration for shares repurchased | £ 1,300 | £ 1,200 | £ 1,100 | ||||||||
Number of treasury stock, shares cancelled | 336.2 | ||||||||||
Value of treasury shares cancelled | £ 906.9 | ||||||||||
Number of shares repurchased | 469.2 | 549.9 | 591 | ||||||||
Own shares held | 133 | ||||||||||
Value of own shares held | £ 358.8 | ||||||||||
On Market Share Buyback Programme | |||||||||||
Consideration for shares repurchased | £ 1,151.7 | £ 829.3 | £ 676.2 | ||||||||
Number of shares repurchased and cancelled | 460.3 | 379.3 | 310.8 | ||||||||
On Market Share Buyback Programme | Settlement and cancellation of own shares | |||||||||||
Consideration for shares repurchased | £ 4.9 | ||||||||||
Number of shares repurchased and cancelled | 2.3 | ||||||||||
[1] In May 2023, there was an agreement to buy 469.2 million (March 2022 – 549.9 million, March 2021 - 591.0 million) ordinary shares of the Company from UK Government Investments Ltd (UKGI) at 268.4 pence per share (March 2022 - 220.5 pence per share, March 2021 - 190.5 pence per share) for the total consideration of £1.3 billion (2022 - £1.2 billion, 2021 - £1.1 billion). NatWest Group cancelled 336.2 million of the purchased ordinary shares, amounting to £906.9 million excluding fees and held the remaining 133.0 million shares as Own Shares Held, amounting to £358.8 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve. NatWest Group plc repurchased and cancelled 460.3 million (2022 – 379.3 million, 2021 - 310.8 million) shares, of which 2.3 million were settled in January 2024. The total consideration of these shares excluding fees was £ 1,151.7 million (2022 - £829.3 million, 2021 £676.2 million), of which £4.9 million were settled in January 2024, as part of the On Market Share Buyback Programmes. The nominal value of the share cancellations has been transferred to the capital redemption reserve. There was an issue of shares in 2021. This is split between Ordinary share capital of £37 million and Share premium of £50 million. In 2021, the Total equity balance of £ 41,803 million includes £494 million attributable to Preference shareholders. Other statutory reserves consist of Capital redemption reserves of £2,507 million (2022 - £1,651 million, 2021 - £722 million) and Own shares held reserves of £503 million (2022 - £258 million, 2021 - £371 million) |
Consolidated cash flow statemen
Consolidated cash flow statement - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Cash flows from operating activities | |||||
Operating profit before tax from continuing operations | [1] | £ 6,178 | £ 5,132 | £ 3,844 | [2] |
Operating (loss)/profit before tax from discontinued operations | [1] | (112) | (262) | 467 | |
Adjustments for: | |||||
Non-cash and other items | 3,208 | 1,203 | 3,623 | ||
Change in operating assets and liabilities | (25,679) | (48,447) | 46,606 | ||
Income taxes paid | (1,033) | (1,223) | (856) | ||
Net cash flows from operating activities | [3],[4] | (17,438) | (43,597) | 53,684 | |
Cash flows from investing activities | |||||
Sale and maturity of other financial assets | 25,195 | 36,975 | 16,859 | ||
Purchase of other financial assets | (44,906) | (23,510) | (10,150) | ||
Income received on other financial assets | 1,099 | 659 | 581 | ||
Net movement in business interests and intangible assets | 4,601 | 5,420 | (3,489) | ||
Sale of property, plant and equipment | 128 | 154 | 165 | ||
Purchase of property, plant and equipment | (811) | (639) | (901) | ||
Net cash flows from investing activities | (14,694) | 19,059 | 3,065 | ||
Cash flows from financing activities | |||||
Issue of paid-in equity | 937 | ||||
Issue of subordinated liabilities | 611 | 648 | 1,634 | ||
Redemption of subordinated liabilities | (1,250) | (3,693) | (4,765) | ||
Interest paid on subordinated liabilities | (439) | (374) | (321) | ||
Issue of MRELs | 3,973 | 3,721 | 3,383 | ||
Maturity and redemption MRELs | (4,236) | (4,992) | |||
Interest paid on MRELs | (844) | (703) | (647) | ||
Shares repurchased | (2,416) | (2,054) | (1,806) | ||
Dividends paid | (1,703) | (3,205) | (1,016) | ||
Net cash flows from financing activities | (6,304) | (10,652) | (2,601) | ||
Effects of exchange rate changes on cash and cash equivalents | (1,189) | 2,933 | (2,641) | ||
Net (decrease)/increase in cash and cash equivalents | (39,625) | (32,257) | 51,507 | ||
Cash and cash equivalents at 1 January | 158,449 | 190,706 | 139,199 | ||
Cash and cash equivalents at 31 December | £ 118,824 | £ 158,449 | £ 190,706 | ||
[1] Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Includes interest received of £ 20,345 million (2022 - £12,638 million, 2021 - £9,696 million) and interest paid of £ 8,871 million (2022 - £2,357 million, 2021 - £1,668 million). The total cash outflow for leases is £ 122 million (2022 - £170 million; 2021 - £195 million), including payment of principal amount of £ 102 million (2022 - £145 million, 2021 - £164 million) which are included in the operating activities. |
Consolidated cash flow statem_2
Consolidated cash flow statement (Parenthetical) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated cash flow statement | |||
Interest received | £ 20,345 | £ 12,638 | £ 9,696 |
Interest paid | 8,871 | 2,357 | 1,668 |
Cash outflow for leases | 122 | 170 | 195 |
Payments of principal amount, lease liabilities | £ 102 | £ 145 | £ 164 |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting policies | |
Accounting policies | This section includes the basis of preparation, critical and material accounting policies used to prepare the financial statements. Our accounting policies are the specific principles, bases, conventions, rules, and practices we apply in preparing and presenting the financial statements. Further information is provided where judgement and estimation is applied to critical accounting policies and key sources of estimation uncertainty. Future accounting developments details new, or amendments to existing, accounting standards, when they are effective from and where we are assessing their impact on future financial statements. 1. Presentation of financial statements NatWest Group plc is incorporated in the UK and registered in Scotland. The financial statements are presented in the functional currency, pounds sterling. The audited financial statements include audited sections of the Risk and capital management section. The directors have prepared the financial statements on a going concern basis after assessing the principal risks, forecasts, projections and other relevant evidence over the twelve months from the date the financial statements are approved (refer to the Report of the directors) and in accordance with UK adopted International Accounting Standards (IAS), and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The critical and material accounting policies and related judgements are set out below. The financial statements are presented on a historical cost basis except for certain financial instruments which are stated at fair value. The effect of the amendments to IFRS effective from 1 January 2023 on our financial statements was immaterial. We have applied the exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12 Income taxes in respect of Pillar Two income taxes. Accordingly, we have not recognised or disclosed information about deferred tax assets and liabilities related to Pillar Two income taxes. Our consolidated financial statements incorporate the results of NatWest Group plc and the entities it controls. Control arises when we have the power to direct the activities of an entity so as to affect the return from the entity. Control is assessed by reference to our ability to enforce our will on the other entity, typically through voting rights. The consolidated financial statements are prepared under consistent accounting policies. A subsidiary is included in the consolidated financial statements at fair value on acquisition from the date it is controlled by us until the date we cease to control it through a sale or a significant change in circumstances. Changes in our interest in a subsidiary that do not result in us ceasing to control that subsidiary are accounted for as equity transactions. We apply accounting for associates and joint arrangements to entities where we have significant influence, but not control, over the operating and financial policies. We assess significant influence by reference to a presumption of voting rights of more than 20%, but less than 50%, supplemented by a qualitative assessment of substantive rights which include representation at the Board of Directors, significant exchange of managerial personnel or technology amongst others. Investments in associates and joint ventures are recorded upon initial recognition at cost, increased or decreased each period by the share of the subsequent levels of profit or loss, and other changes in equity are considered in line with their nature. The judgements and assumptions involved in our accounting policies that are considered by the Board to be the most important to the portrayal of its financial condition are noted below. The use of estimates, assumptions or models that differ from those adopted by us would affect our reported results. How Climate risk affects our accounting judgements and estimates Business planning Key financial estimates are based on management's latest five-year revenue and cost forecasts. The outputs from this forecast affect forward-looking accounting estimates. Measurement of deferred tax and expected credit losses are highly sensitive to reasonably possible changes in those anticipated conditions. In 2023, our scenario planning was enhanced by the further integration of NatWest Group’s climate transition plan, including the assessment of climate-related risks and opportunities. - Our Climate transition plan includes an assessment of: - changes in products, services and business operations to support customer transition towards net zero; - financial impacts of supporting customer transition, including investment required. The linkage between our financial plan and our Climate transition plan will continue to be developed and refreshed annually as part of the financial planning cycle; - the climate impact of policies, using the UK Climate Change Committee (UK CCC) Balanced Net Zero (BNZ) pathway scenario, aligned with the UK’s Sixth Carbon Budget. In addition, we have used the credibility ratings for sectoral policies provided by the UK CCC 2023 Progress Report, published in June, to the Parliament to develop a BNZ adjusted pathway to reflect estimated time delays of these policies. - There remains considerable uncertainty regarding this policy response, including the effect of wider geo-political uncertainty on governmental ambitions regarding climate transition and the effect of decarbonisation on wider economic growth, technology development and customer behaviours. Information used in other accounting estimates We make use of reasonable and supportable information to make accounting judgements and estimates. This includes information about the observable effects of the physical and transition risks of climate change on the current creditworthiness of borrowers, asset values and market indicators. It also includes the effect on our competitiveness and profitability. Many of the effects arising from climate change will be longer term in nature, with an inherent level of uncertainty, and have limited effect on accounting judgements and estimates for the current period. Some physical and transition risks can manifest in the shorter term. The following items represent the most significant effects: - The classification of financial instruments linked to climate, or other sustainability indicators: consideration is given to whether the effect of climate related terms prevent the instrument cashflows being solely payments of principal and interest. - The use of market indicators as inputs to fair value is assumed to include current information and knowledge regarding the effect of climate risk. Effect of climate change in the estimation of expected credit loss We are monitoring the effect of the physical and transition consequences of climate change on our experience of loan loss. We use available information regarding the effect of climate transition policy largely driven by carbon prices as an adjustment to macroeconomic factors that are used as inputs to the models that generate PD and LGD outcomes, which are key inputs to the ECL calculation. The determination of whether specific loss drivers and climate events generate specific losses is ongoing and is necessary to determine how sensitive changes in ECL could be to climate inputs. Future cashflows are discounted, so long dated cashflows are less likely to affect current expectations on credit loss. Our assessment of sector specific risks, and whether additional adjustments are required, include expectations of the ability of those sectors to meet their financing needs in the market. Changes in credit stewardship and credit risk appetite that stem from climate considerations, such as oil and gas, will directly affect our positions. 2. Critical accounting policies The judgements and assumptions involved in our accounting policies that are considered by the Board to be the most important to the portrayal of our financial condition are noted below. The use of estimates, assumptions or models that differ from those adopted by us would affect our reported results. Management’s consideration of uncertainty is outlined in the relevant sections, including the ECL estimate in the Risk and capital management section. Information used for significant estimate Policy Judgement Estimate Further information Deferred tax Determination of whether sufficient sustainable taxable profits will be generated in future years to recover the deferred tax asset. Our estimates are based on the five year revenue and cost forecasts (which include inherent uncertainties). Note 7 Fair value – financial instruments Classification of a fair value instrument as level 3, where the valuation is driven by unobservable inputs. Estimation of the fair value, where it is reasonably possible to have alternative assumptions in determining the FV. Note 11 Loan impairment provisions Definition of default against which to apply PD, LGD and EAD models. Selection of multiple economic scenarios.Criteria for a significant increase in credit risk. Identification of risks not captured by the models. ECL estimates contain a number of measurement uncertainties (such as the weighting of multiple economic scenarios) and disclosures include sensitivities to show impact on other reasonably possible scenarios. Note 15 Provisions for liabilities and charges Determination of whether a present obligation exists in respect of customer redress, litigation and other regulatory, property and other provisions. Legal proceedings often require a high degree of judgement and these are likely to change as the matter progresses. Provisions remain sensitive to the assumptions used in the estimate. We consider a wide range of possible outcomes. It is often not practical to meaningfully quantify ranges of possible outcomes, given the uncertainties involved. Note 21 Changes in judgements and assumptions could result in a material adjustment to those estimates in future reporting periods. 2.1. Deferred tax Deferred tax is the estimated tax expected to be payable or recoverable in respect of temporary differences between the carrying amount of an asset or liability for accounting purposes and the carrying amount for tax purposes in the future. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent their recovery is probable. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax asset recoverability is based on the level of supporting offsetable deferred tax liabilities we have and of our future taxable profits. These future taxable profits are based on our five-year revenue and cost forecasts and the expectation of long term economic growth beyond this period. The five-year forecast takes account of management’s current expectations on competitiveness and profitability. The long term growth rate reflects external indicators which will include market expectations on climate risk. We do not consider any additional adjustments to this indicator. 2.2. Fair value – financial instruments We measure financial instruments at fair value when they are classified as mandatory fair value through profit or loss; held-for-trading; designated fair value through profit or loss and fair value through other comprehensive income and they are recognised in the financial statements at fair value. All derivatives are measured at fair value. We manage some portfolios of financial assets and financial liabilities based on our net exposure to either market or credit risk. In these cases, the fair value is derived from the net risk exposure of that portfolio with portfolio level adjustments applied to incorporate bid-offer spreads, counterparty credit risk, and funding costs (refer to ‘Valuation Adjustments’). Where the market for a financial instrument is not active, fair value is established using a valuation technique. These valuation techniques involve a degree of estimation, the extent of which depends on the instrument’s complexity and the availability of market-based data. The complexity and uncertainty in the financial instrument’s fair value is categorised using the fair value hierarchy. The use of market indicators as inputs to fair value is assumed to include current information and knowledge regarding the effect of climate risk. 2.3. Loan impairment provisions: expected credit losses (ECL) At each balance sheet date each financial asset or portfolio of financial assets measured at amortised cost or at fair value through other comprehensive income, issued financial guarantee and loan commitment (other than those classified as held for trading) is assessed for impairment. Any change in impairment is reported in the income statement. Loss allowances are forward-looking, based on 12-month ECL where there has not been a significant increase in credit risk rating, otherwise allowances are based on lifetime expected losses. ECL are a probability-weighted estimate of credit losses. The probability is determined by the risk of default which is applied to the cash flow estimates. In the absence of a change in credit rating, allowances are recognised when there is a reduction in the net present value of expected cash flows. Following a significant increase in credit risk, ECL are adjusted from 12 months to lifetime. This will lead to a higher impairment charge. The measurement of expected credit loss considers the ability of borrowers to make payments as they fall due. Future cashflows are discounted, so long-dated cashflows are less likely to affect current expectations on credit loss. Our assessment of sector specific risks, and whether additional adjustments are required, include expectations of the ability of those sectors to meet their financing needs in the market. Changes in credit risk appetite and how we manage credit positions that stem from climate considerations, such as oil and gas, will directly affect our positions. Judgement is exercised as follows: - Models – in certain low default portfolios, Basel parameter estimates are also applied for IFRS 9. - Non-modelled portfolios – use a standardised capital requirement under Basel II. Under IFRS 9, they have bespoke treatments for the identification of significant increase in credit risk. Benchmark PDs, EADs and LGDs are reviewed annually for appropriateness. The ECL calculation is based on expected future cash flows, which is typically applied at a portfolio level. - Multiple economic scenarios (MES) – the central, or base, scenario is most critical to the ECL calculation, independent of the method used to generate a range of alternative outcomes and their probabilities. - Significant increase in credit risk - IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased significantly since initial recognition. Part of this assessment requires a comparison to be made between the current lifetime PD (i.e. the current probability of default over the remaining lifetime) with the equivalent lifetime PD as determined at the date of initial recognition. On restructuring where a financial asset is not derecognised, the revised cash flows are used in re-estimating the credit loss. Where restructuring causes derecognition of the original financial asset, the fair value of the replacement asset is used as the closing cash flow of the original asset. Where in the course of the orderly realisation of a loan, it is exchanged for equity shares or property, the exchange is accounted for as the sale of the loan and the acquisition of equity securities or investment property. Where our acquired interest is in equity shares, relevant policies for control, associates and joint ventures apply. Impaired financial assets are written off and therefore derecognised from the balance sheet when we conclude that there is no longer any realistic prospect of recovery of part, or all, of the loan. For financial assets that are individually assessed for impairment, the timing of the write-off is determined on a case-by-case basis. Such financial assets are reviewed regularly and write-off will be prompted by bankruptcy, insolvency, re-negotiation, and similar events The typical time frames from initial impairment to write-off for our collectively assessed portfolios are: - Retail mortgages: write-off usually occurs within five years , or earlier, when an account is closed, but can be longer where the customer engages constructively; - Credit cards: the irrecoverable amount is typically written off after twelve arrears cycles or at four years post default any remaining amounts outstanding are written off; - Overdrafts and other unsecured loans: write-off occurs within six years ; - Commercial loans: write-offs are determined in the light of individual circumstances; and Business loans are generally written off within five years . 2.4. Provisions We recognise a provision for a present obligation resulting from a past event when it is more likely than not that we will be required to pay to settle the obligation and the amount of the obligation can be estimated reliably. Provision is made for restructuring costs, including the costs of redundancy, when we have a constructive obligation. An obligation exists when we have a detailed formal plan for the restructuring and have raised a valid expectation in those affected either by starting to implement the plan or by announcing its main features. We recognise any onerous cost of the present obligation under a contract as a provision. An onerous cost is the unavoidable cost of meeting our contractual obligations that exceed the expected economic benefits. When we intend to vacate a leasehold property or right of use asset, the asset would be tested for impairment and a provision may be recognised for the ancillary contractual occupancy costs. 3. Material accounting policies 3.1. Revenue recognition Interest receivable and payable are recognised in the income statement using the effective interest rate method for: all financial instruments measured at amortised cost; debt instruments measured as fair value through other comprehensive income; and the effective part of any related accounting hedging instruments. Finance lease income is recognised at a constant periodic rate of return before tax on the net investment on the lease. Other interest relating to financial instruments measured at fair value is recognised as part of the movement in fair value and is reported in income from trading activities or other operating income as relevant. Fees in respect of services are recognised as the right to consideration accrues through the performance of each distinct service obligation to the customer. The arrangements are generally contractual and the cost of providing the service is incurred as the service is rendered. The price is usually fixed and always determinable. 3.2. Discontinued operations, Held for sale and Disposal group The results of discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit/(loss) from discontinued operations, net of tax in the income statement. Comparatives are represented for the income statement, cash flow statement, statement of changes in equity and related notes. An asset or disposal group (assets and liabilities) is classified as held for sale if we will recover its carrying amount principally through a sale transaction rather than through continuing use. These are measured at the lower of its carrying amount or fair value less cost to sell unless the existing measurement provisions of IFRS apply. These are presented as single amounts; comparatives are not represented. 3.3. Staff costs Employee costs, such as salaries, paid absences, and other benefits are recognised over the period in which the employees provide the related services to us. Employees may receive variable compensation in cash, in deferred cash or debt instruments of NatWest Group or in ordinary shares of NatWest Group plc subject to deferral, clawback and forfeiture criteria. We operate a number of share-based compensation schemes under which we grant awards of NatWest Group plc shares and share options to our employees. Such awards are subject to vesting conditions. Variable compensation that is settled in cash or debt instruments is charged to the income statement on a straight-line basis over the period during which services are provided, taking account of forfeiture and clawback criteria. The value of employee services received in exchange for NatWest Group plc shares and share options is recognised as an expense over the vesting period, subject to deferral, clawback, cancelation and forfeiture criteria with a corresponding increase in equity. The fair value of shares granted is the market price adjusted for the expected effect of dividends as employees are not entitled to dividends until shares are vested. The fair value of options granted is determined using option pricing models to estimate the numbers of shares likely to vest. These consider the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option and other relevant factors such as the dividend yield. Defined contribution pension scheme A scheme where we pay fixed contributions and there is no legal or constructive obligation to pay further contributions or benefits. Contributions are recognised in the income statement as employee service costs accrue. Defined benefit pension scheme A scheme that defines the benefit an employee will receive on retirement and is dependent on one or more factors such as age, salary, and years of service. The net of the recognisable scheme assets and obligations is reported on the balance sheet in other assets or other liabilities. The defined benefit obligation is measured on an actuarial basis. The charge to the income statement for pension costs (mainly the service cost and the net interest on the net defined benefit asset or liability) is recognised in operating expenses. Actuarial gains and losses (i.e. gains and/or losses on re-measuring the net defined benefit asset or liability due to changes in actuarial measurement assumptions) are recognised in other comprehensive income in full in the period in which they arise, and not subject to recycling to the income statement. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised on the balance sheet if the criteria of the asset ceiling test are met. This requires the net defined benefit surplus to be limited to the present value of any economic benefits available to us in the form of refunds from the plan or reduced contributions to it. We will recognise a liability where a minimum funding requirement exists for any of our defined benefit pension schemes. This reflects agreed minimum funding and the availability of a net surplus as determined as described above. When estimating the liability for minimum funding requirements we only include contributions that are substantively or contractually agreed and do not include contingent and discretionary features, including dividend-linked contributions or contributions subject to contingent events requiring future verification. We will recognise a net defined benefit asset when the net defined benefit surplus can generate a benefit in the form of a refund or reduction in future contributions to the plan. The net benefit pension asset is recognised at the present value of the benefits that will be available to us excluding interest and the effect of the asset ceiling (if any, excluding interest). Changes in the present value of the net benefit pension asset are recognised immediately in other comprehensive income. In instances where Trustees have the ability to declare augmented benefits to participants, we do not recognise a defined benefit pension asset and write-off the surplus immediately in other comprehensive income. 3.4. Intangible assets and goodwill Intangible assets are identifiable non-monetary assets without physical substance acquired or developed by us, and are stated at cost less accumulated amortisation and impairment losses. Amortisation is a method to spread the cost of such assets over time in the income statement. This is charged to the income statement over the assets' estimated useful economic lives using methods that best reflect the pattern of economic benefits. The estimated useful economic lives are: Computer software 3 to 10 years Other acquired intangibles 3 to 5 years Direct costs relating to the development of internal-use computer software are reported on the balance sheet after technical feasibility and economic viability have been established. These direct costs include payroll, the costs of materials and services, and directly attributable overheads. Capitalisation of costs ceases when the software can operate as intended. During and after development, accumulated costs are reviewed for impairment against the benefits that the software is expected to generate. Costs incurred prior to the establishment of technical feasibility and economic viability are expensed to the income statement as incurred, as are all training costs and general overheads. The costs of licences to use computer software that are expected to generate economic benefits beyond three years are also reported on the balance sheet. Goodwill on the acquisition of a subsidiary is the excess of the fair value of the consideration paid, the fair value of any existing interest in the subsidiary and the amount of any non-controlling interest measured either at fair value or at its share of the subsidiary’s net assets over the net fair value of the subsidiary’s identifiable assets, liabilities, and contingent liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. The gain or loss on the disposal of a subsidiary includes the carrying value of any related goodwill when such transactions occur. 3.5. Impairment of non-financial assets Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. At each balance sheet date, we assess whether there is any indication that other intangible assets or property, plant and equipment are impaired. If any such indication exists, we estimate the recoverable amount of the asset and compare it to its balance sheet value to calculate if an impairment loss should be recognised in the income statement. A reversal of an impairment loss on other intangible assets or property, plant and equipment is recognised in the income statement provided the increased carrying value is not greater than it would have been had no impairment loss been recognised. The recoverable amount of an asset that does not generate cash flows that are independent from those of other assets or groups of assets, is determined as part of the cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to our cash-generating units or groups of cash-generating units expected to benefit from the combination. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less cost to sell or its value in use. Value in use is the present value of future cash flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been considered in estimating future cash flows. The assessment of asset impairment is based upon value in use. This represents the value of future cashflows and uses our five-year revenue and cost forecasts and the expectation of long term economic growth beyond this period. The five-year forecast takes account of management’s current expectations on competitiveness and profitability, including near term effects of climate transition risk. The long term growth rate reflects external indicators which will include market expectations on climate risk. We do not consider any additional adjustments to this indicator. 3.6. Foreign currencies Foreign exchange differences arising on the settlement of foreign currency transactions and from the translation of monetary assets and liabilities are reported in income from trading activities except for differences arising on cash flow hedges and hedges of net investments in foreign operations. Non-monetary items denominated in foreign currencies that are stated at fair value are translated into the functional currency at the foreign exchange rates ruling at the dates the values are determined. Translation differences are recognised in the income statement except for differences arising on non-monetary financial assets classified as fair value through other comprehensive income. Income and expenses of foreign subsidiaries and branches are translated into sterling at average exchange rates unless these do not approximate the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on the translation of a foreign operation are recognised in other comprehensive income. The amount accumulated in equity is reclassified from equity to the income statement on disposal of a foreign operation. 3.7. Tax Tax encompassing current tax and deferred tax is recognised in the income statement except when taxable items are recognised in other comprehensive income or equity. Tax consequences arising from servicing financial instruments classified as equity are recognised in the income statement. Accounting for taxes is judgemental and carries a degree of uncertainty because tax law is subject to interpretation, which might be questioned by the relevant tax authority. We recognise the most likely current and deferred tax liability or asset, assessed for uncertainty using consistent judgements and estimates. Current and deferred tax assets are only recognised where their recovery is deemed probable, and current and deferred tax liabilities are recognised at the amount that represents the best estimate of the probable outcome having regard to their acceptance by the tax authorities. 3.8. Financial instruments Financial instruments are measured at fair value on initial recognition on the balance sheet. Monetary financial assets are classified into one of the following subsequent measurement categories (subject to business model assessment and review of contractual cash flow for the purposes of sole payments of principal and interest where applicable): - amortised cost measured at cost using the effective interest rate method, less any impairment allowance; - fair value through other comprehensive income (FVOCI) measured at fair value, using the effective interest rate method and changes in fair value through other comprehensive income; - mandatory fair value through profit or loss (MFVTPL) measured at fair value and changes in fair value reported in the income statement; or - designated at fair value through profit or loss (DFV) measured at fair value and changes in fair value reported in the income statement. Classification by business model reflects how we manage our financial assets to generate cash flows. A business model assessment helps to ascertain the measurement approach depending on whether cash flows result from holding financial assets to collect the contractual cash flows, from selling those financial assets, or both. Business model assessment of assets is made at portfolio level, being the level at which they are managed to achieve a predefined business objective. This is expected to result in the most consistent classification of assets because it aligns with the stated objectives for the portfolio, its risk management, manager’s remuneration and the ability to monitor sales of assets from a portfolio. When a significant change to our business is communicated to external parties, we reassess our business model for managing those financial assets. We reclassify financial assets if we have |
Net interest income
Net interest income | 12 Months Ended |
Dec. 31, 2023 | |
Net interest income | |
Net interest income | 1 Net interest income Net interest income is the difference between the interest NatWest Group earns from its interest-bearing assets, such as loans, balances with central banks and other financial assets, and the interest paid on its interest-bearing liabilities, such as deposits and subordinated liabilities. Interest receivable on financial instruments classified as amortised cost, debt instruments classified as FVOCI and the interest element of the effective portion of any designated hedging relationships are measured using the effective interest rate, which allocates the interest receivable or interest payable over the expected life of the financial instrument at the rate that exactly discounts all estimated future cash flows to equal the financial instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the financial instrument’s yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows. Negative interest on financial assets is presented in interest payable and negative interest on financial liabilities is presented in interest receivable. Included in interest receivable is finance lease income of £484 million (2022 - £314 million; 2021 - £298 million) which is recognised at a constant periodic rate of return before tax on the net investment. For accounting policy information refer to Accounting policy 3.1. 2023 2022 2021 (1) Continuing operations £m £m £m Balances at central banks and loans to banks - amortised cost 3,737 1,987 445 Loans to customers - amortised cost 15,553 10,085 8,536 Other financial assets 1,736 565 253 Interest receivable 21,026 12,637 9,234 Balances with banks 1,039 379 204 Customer deposits 5,276 785 556 Other financial liabilities 2,977 1,196 670 Subordinated liabilities 464 370 267 Internal funding of trading businesses 221 65 2 Interest payable 9,977 2,795 1,699 Net interest income 11,049 9,842 7,535 (1) Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements . |
Non-interest income
Non-interest income | 12 Months Ended |
Dec. 31, 2023 | |
Non-interest income | |
Non-interest income | 2 Non-interest income There are three main categories of non-interest income: net fees and commissions, trading income, and other operating income. Net fees and commissions is the difference between fees received from customers for services provided by NatWest Group, such as credit card annual fees, underwriting fees, payment services, brokerage fees, trade finance, investment management fees, trustee and fiduciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer incentives, loan administration, foreign currency transaction charges, and brokerage fees. Trading income is earned from short-term financial assets and financial liabilities to either make a spread between purchase and sale price or held to take advantage of movements in prices and yields. Other operating income includes revenue from other operating activities which are not related to the principal activities of the company, such as: share of profit or loss from associates; operating lease income; the profit or loss on the sale of a subsidiary; or property, plant and equipment; profit or loss on own debt; and changes in the fair value of financial assets and liabilities designated at fair value through profit or loss. For accounting policy information refer to Accounting policies 3.1 and 3.6. 2023 2022 2021 (1) Continuing operations £m £m £m Net fees and commissions (2) 2,330 2,292 2,120 Trading income Foreign exchange 270 305 364 Interest rate (3) 595 752 (130) Credit (72) 17 83 Changes in fair value of own debt and derivative liabilities attributable to own credit risk - debt securities in issue (2) 42 6 Equities, commodities and other 3 17 — 794 1,133 323 Other operating income Gain/(loss) on redemption of own debt 3 (161) (145) Rental income on operating lease assets and investment property 234 230 225 Changes in fair value of financial assets and liabilities designated at fair value through profit or loss (4) (150) 17 (8) Changes in fair value of other financial assets at fair value through profit or loss (5) 50 (45) 5 Hedge ineffectiveness 52 (20) 25 Loss on disposal of amortised cost assets and liabilities (5) (15) (15) (Loss)/profit on disposal of fair value through other comprehensive income assets (43) (168) 117 Loss on sale of property, plant and equipment (21) (5) (30) Share of (losses)/profits of associated entities (9) (30) 216 Profit on disposal of subsidiaries and associates — — 48 Foreign exchange recycling gains/(losses) 484 5 (10) Other income (6) (16) 81 23 579 (111) 451 3,703 3,314 2,894 (1) Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. (2) Refer to Note 4 for further analysis . (3) Includes fair value changes on derivatives which have not been designated in a hedge accounting relationship and gains and losses from the management of the NatWest Group’s funding requirements involving the use of derivatives including foreign exchange. These are aimed at managing the interest rate and foreign exchange risk that NatWest Group is exposed to. (4) Includes related derivatives. (5) Includes instruments that have failed solely payments of principal and interest testing under IFRS 9. (6) 2022 includes £92 million profit from insurance liabilities. |
Operating expenses
Operating expenses | 12 Months Ended |
Dec. 31, 2023 | |
Operating expenses | |
Operating expenses | 3 Operating expenses Operating expenses are expenses NatWest Group incurs in the running of its business such as all staff costs (for example salaries, bonus awards, pension costs and social security costs), premises and equipment costs that arise from the occupation of premises and the use of equipment, depreciation and amortisation and other administrative expenses. For accounting policy information refer to Accounting policies 3.3, 3.4 and 3.5. 2023 2022 2021 Continuing operations £m £m £m Salaries 2,483 2,250 2,295 Bonus awards 353 334 267 Temporary and contract costs 199 234 240 Social security costs 352 328 300 Pension costs 313 363 354 - defined benefit schemes (Note 5) 122 205 215 - defined contribution schemes 191 158 139 Other 201 207 220 Staff costs 3,901 3,716 3,676 Premises and equipment 1,153 1,112 1,133 UK bank levy 109 101 99 Depreciation and amortisation (1,2) 934 833 923 Other administrative expenses (3) 1,899 1,925 1,927 Administrative expenses 4,095 3,971 4,082 7,996 7,687 7,758 (1) (2) (3) 3 Operating expenses continued The average number of persons employed, rounded to the nearest hundred, during the year, excluding temporary staff,was 61,500 (2022 - 60,000; 2021- 59,200). The average number of temporary employees during 2023 was 2,100 (2022 - 2,500; 2021 - 2,500). The number of persons employed at 31 December, excluding temporary staff, by reportable segment, was as follows: Continuing operations 2023 2022 (1) 2021 (1) Retail Banking 14,300 15,100 16,000 Private Banking 2,400 2,300 2,000 Commercial & Institutional 12,400 12,200 11,700 Central items & other (2) 32,500 31,400 28,100 Total 61,600 61,000 57,800 UK 41,500 41,200 40,600 USA 300 300 300 India 16,900 15,700 13,500 Poland 1,500 1,500 1,400 Republic of Ireland 400 1,400 1,200 Rest of the World 1,000 900 800 Total 61,600 61,000 57,800 (1) Comparatives have been re-presented to reflect the movement of headcount across segments due to segment reorganisation. (2) Central items & other includes Ulster Bank RoI. The total number of persons employed in Ulster Bank RoI of 500 (2022 – 2,200 ; 2021 – 2,400 ) includes nil people employed in discontinued operations at 31 December 2023 (2022 – 400 ; 2021 – 700 ). 3 Operating expenses continued Share-based payments Award plan Eligible employees Nature of award Vesting conditions (1) Settlement Sharesave UK, Channel Islands, Gibraltar, Isle of Man, Poland and India. Option to buy shares under employee savings plan Continuing employment or leavers in certain circumstances 2024 to 2028 Deferred performance awards All Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances 2024 to 2031 Long-term incentives (2,3) Senior employees Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances and/or satisfaction of the pre-vesting assessment and underpins 2024 to 2030 (1) All awards have vesting conditions which may not be met. (2) Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment. All awards are granted under the Employee Share Plan. (3) The existing Long-term incentive scheme has been closed for new awards and members as at 31 December 2022. The scheme has been replaced by a new Restricted share plan scheme with similar granting and vesting conditions. Sharesave 2023 2022 2021 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January 1.63 99 1.61 95 1.64 96 Granted 1.42 43 1.86 25 1.80 24 Exercised 1.44 (23) 1.88 (15) 1.76 (10) Cancelled 1.72 (5) 1.60 (6) 2.02 (15) At 31 December 1.59 114 1.63 99 1.61 95 The fair value of Sharesave options granted in 2023 was determined using a pricing model that included: expected volatility of share price determined at the grant date based on historical share price volatility over a period of up to five years; expected option lives that equal the vesting period; estimated dividend yield on equity shares; and risk-free interest rates determined from UK gilts with terms matching the expected lives of the options. The exercise price of options and the fair value on granting awards of fully paid shares is the average market price over the five three Options are exercisable within six months of vesting; 19.0 million options were exercisable at 31 December 2023 (2022 – 5.1 million; 2021 – 6.0 million). The weighted average share price at the date of exercise of options was £2.20 (2022 - £2.59; 2021 - £2.19). At 31 December 2023, exercise prices ranged from £1.12 to £1.89 (2022 - £1.12 to £2.27; 2021 - £1.12 to £2.27) and the remaining average contractual life was 2.25 years (2022 – 2 years; 2021 – 2.1 years). The fair value of options granted in 2023 was £27.3 million (2022 - £22.1 million; 2021 - £17 million). Deferred performance awards 2023 2022 2021 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 93 46 132 65 169 77 Granted 52 20 46 20 61 32 Forfeited (2) (1) (4) (2) (10) (5) Vested (67) (30) (81) (37) (88) (39) At 31 December 76 35 93 46 132 65 3 Operating expenses continued The awards granted in 2023 vest in equal tranches on the anniversary of the award, predominantly over three years. Long-term incentives 2023 2022 2021 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 49 23 44 21 50 24 Granted 11 5 16 7 6 3 Vested/exercised (10) (4) (10) (4) (12) (6) Lapsed (1) (1) (1) (1) — — At 31 December 49 23 49 23 44 21 The market value of awards vested/exercised in 2023 was £9.5 million (2022 - £11.7 million; 2021 - £13 million). Bonus awards 2023 2022 Change £m £m % Non-deferred cash awards (1) 43 40 8 % Deferred cash awards 262 270 (3) % Deferred share awards 51 60 (15) % Total deferred bonus awards 313 330 (5) % Total bonus awards (2) 356 370 (4) % Bonus awards as a % of operating profit before tax (3) 5 % 7 % Proportion of bonus awards that are deferred 88 % 89 % - deferred cash awards 84 % 82 % - deferred share awards 16 % 18 % (1) Non-deferred cash awards are limited to £2,000 for all employees. (2) Excludes other performance-related compensation. (3) Operating profit before tax and income statement charge for bonus awards. Reconciliation of bonus awards to income statement charge 2023 2022 2021 £m £m £m Bonus awarded 356 370 301 Less: deferral of charge for amounts awarded for current year (114) (127) (99) Income statement charge for amounts awarded in current year 242 243 202 Add: current year charge for amounts deferred from prior years 115 94 80 Less: forfeiture of amounts deferred from prior years (4) (3) (15) Income statement charge for amounts deferred from prior years 111 91 65 Income statement charge for bonus awards 353 334 267 3 Operating expenses continued Year in which income statement charge is expected to be taken for deferred bonus awards Actual Expected 2025 2021 2022 2023 2024 and beyond £m £m £m £m £m Bonus awards deferred from 2021 and earlier 80 94 16 7 5 Bonus awards deferred from 2022 — — 99 9 9 Less: forfeiture of amounts deferred from prior years (15) (3) (4) — — Bonus awards for 2023 deferred — — — 98 16 65 91 111 114 30 |
Segmental analysis
Segmental analysis | 12 Months Ended |
Dec. 31, 2023 | |
Segmental analysis | |
Segmental analysis | 4 Segmental analysis NatWest Group analyses its performance between the different operating segments of the Group as required by IFRS 8, Operating segments. The presentation is consistent with internal financial reporting and how senior management assesses the performance of each operating segment Reportable operating segments: The business is organised into the following reportable segments: Retail Banking, Private Banking, Commercial & Institutional, and Central items & other. Retail Banking Private Banking Commercial & Institutional Central items & other 4 Segmental analysis continued Allocation of central balance sheet items NatWest Group allocates all central costs relating to central functions to the business using appropriate drivers; these are reported as indirect costs in the segmental income statements. Assets and risk-weighted assets held centrally, mainly relating to NatWest Group Treasury, are allocated to the business using appropriate drivers. Central Retail Private Commercial & items Banking Banking Institutional & other Total 2023 £m £m £m £m £m Continuing operations Net interest income 5,496 710 5,044 (201) 11,049 Net fees and commissions 427 249 1,654 — 2,330 Other non-interest income 8 31 723 611 1,373 Total income 5,931 990 7,421 410 14,752 Depreciation and amortisation (1) (1) (154) (778) (934) Other operating expenses (2,827) (684) (3,937) 386 (7,062) Impairment losses (465) (14) (94) (5) (578) Operating profit 2,638 291 3,236 13 6,178 2022 Continuing operations Net interest income 5,224 777 4,171 (330) 9,842 Net fees and commissions 422 250 1,580 40 2,292 Other non-interest income — 29 662 331 1,022 Total income 5,646 1,056 6,413 41 13,156 Depreciation and amortisation — — (161) (672) (833) Other operating expenses (2,593) (622) (3,583) (56) (6,854) Impairment (losses)/releases (229) 2 (122) 12 (337) Operating profit/(loss) 2,824 436 2,547 (675) 5,132 2021 Continuing operations Net interest income 4,074 480 2,974 7 7,535 Net fees and commissions 377 258 1,440 45 2,120 Other non-interest income (6) 78 424 278 774 Total income 4,445 816 4,838 330 10,429 Depreciation and amortisation (85) - (173) (665) (923) Other operating expenses (2,428) (520) (3,584) (303) (6,835) Impairment releases/(losses) 36 54 1,160 (77) 1,173 Operating profit/(loss) 1,968 350 2,241 (715) 3,844 4 Segmental analysis continued Total revenue (1) Central Retail Private Commercial & items & Banking Banking Institutional other Total 2023 £m £m £m £m £m Continuing operations External 7,366 1,157 12,519 4,340 25,382 Inter-segmental (4) 5 1,000 (1,602) 597 — Total 7,371 2,157 10,917 4,937 25,382 2022 Continuing operations External 5,773 874 7,258 2,669 16,574 Inter-segmental (4) — 389 (395) 6 — Total 5,773 1,263 6,863 2,675 16,574 2021 Continuing operations External 5,415 792 5,189 1,306 12,702 Inter-segmental (4) 18 127 102 (247) — Total 5,433 919 5,291 1,059 12,702 Total income Central Retail Private Commercial & items & Banking Banking Institutional other Total 2023 £m £m £m £m £m Continuing operations External 4,170 327 7,730 2,525 14,752 Inter-segmental (4) 1,761 663 (309) (2,115) — Total 5,931 990 7,421 410 14,752 2022 Continuing operations External 4,956 778 5,920 1,502 13,156 Inter-segmental (4) 690 278 493 (1,461) — Total 5,646 1,056 6,413 41 13,156 2021 Continuing operations External 4,933 801 4,634 61 10,429 Inter-segmental (4) (488) 15 204 269 — Total 4,445 816 4,838 330 10,429 For the notes to this table refer to page 64. 4 Segmental analysis continued Analysis of net fees and commissions Central Retail Private Commercial & items Banking Banking Institutional & other Total 2023 £m £m £m £m £m Continuing operations Fees and commissions receivable - Payment services 324 32 671 3 1,030 - Credit and debit card fees 400 13 260 3 676 - Lending and financing 14 5 709 1 729 - Brokerage 35 6 42 — 83 - Investment management, trustee and fiduciary services (2) 2 209 45 10 266 - Underwriting fees — — 123 — 123 - Other 4 5 73 (6) 76 Total 779 270 1,923 11 2,983 Fees and commissions payable (352) (21) (269) (11) (653) Net fees and commissions 427 249 1,654 — 2,330 2022 Continuing operations Fees and commissions receivable - Payment services 314 25 642 43 1,024 - Credit and debit card fees 401 15 227 18 661 - Lending and financing 17 8 673 3 701 - Brokerage 43 6 44 — 93 - Investment management, trustee and fiduciary services (2) 4 219 46 — 269 - Underwriting fees — — 120 — 120 - Other — 3 88 (44) 47 Total 779 276 1,840 20 2,915 Fees and commissions payable (357) (26) (260) 20 (623) Net fees and commissions 422 250 1,580 40 2,292 2021 Fees and commissions receivable - Payment services 306 35 577 49 967 - Credit and debit card fees 344 10 149 19 522 - Lending and financing 13 10 643 4 670 - Brokerage 48 6 42 — 96 - Investment management, trustee and fiduciary services (2) 3 230 45 2 280 - Underwriting fees — — 127 — 127 - Other — 35 109 (112) 32 Total 714 326 1,692 (38) 2,694 Fees and commissions payable (337) (68) (252) 83 (574) Net fees and commissions 377 258 1,440 45 2,120 For the notes to this table refer to page 64. 4 Segmental analysis continued 2023 2022 2021 Assets Liabilities Assets Liabilities Assets Liabilities £m £m £m £m £m £m Retail Banking 228,684 191,936 226,375 192,282 209,973 192,715 Private Banking 26,894 37,806 29,867 41,491 29,854 39,388 Commercial & Institutional 384,958 359,766 404,817 383,768 425,718 411,757 Central items & other 52,137 65,977 58,994 66,016 116,447 96,329 Total 692,673 655,485 720,053 683,557 781,992 740,189 Segmental analysis of goodwill The total carrying value of goodwill at 31 December 2023 was £5,680 million (2022 - £5,522 million) comprising: Retail Banking £2,607 million (2022 - £2,607 million); Commercial & Institutional £2,905 million (2022 - £2,906 million); Private Banking £9 million (2022 - £9 million) and Central items & other £159 million (2022 - nil). 4 Segmental analysis continued Geographical segments The geographical analysis in the tables below has been compiled on the basis of location of office where the transactions are recorded. UK USA Europe RoW Total 2023 £m £m £m £m £m Continuing operations Total revenue 24,096 167 1,016 103 25,382 Interest receivable 20,192 39 774 21 21,026 Interest payable (9,500) (1) (472) (4) (9,977) Net fees and commissions 2,052 49 172 57 2,330 Trading income 704 66 1 23 794 Other operating income 556 (10) 30 3 579 Total income (3) 14,004 143 505 100 14,752 Operating profit/(loss) before tax 6,196 45 (149) 86 6,178 Total assets 610,831 23,725 56,001 2,116 692,673 Total liabilities 594,250 22,106 37,506 1,623 655,485 Contingent liabilities and commitments 112,199 — 7,411 21 119,631 2022 Continuing operations Total revenue 15,795 117 558 104 16,574 Interest receivable 12,242 37 344 14 12,637 Interest payable (2,567) (2) (221) (5) (2,795) Net fees and commissions 1,983 44 207 58 2,292 Trading income 1,208 1 (104) 28 1,133 Other operating income (140) 14 12 3 (111) Total income (3) 12,726 94 238 98 13,156 Operating profit/(loss) before tax 5,716 (46) (620) 82 5,132 Total assets 589,758 25,979 101,164 3,152 720,053 Total liabilities 579,476 27,039 75,092 1,950 683,557 Contingent liabilities and commitments 117,915 — 8,649 17 126,581 2021 Continuing operations Total revenue 12,100 87 482 33 12,702 Interest receivable 8,949 20 257 8 9,234 Interest payable (1,483) (2) (211) (3) (1,699) Net fees and commissions 1,820 27 231 42 2,120 Trading income 247 53 (1) 24 323 Other operating income 387 2 62 — 451 Total income (3) 9,920 100 338 71 10,429 Operating (loss)/profit before tax 4,143 48 (387) 40 3,844 Total assets 693,221 21,776 64,415 2,580 781,992 Total liabilities 676,684 23,286 38,835 1,384 740,189 Contingent liabilities and commitments 117,225 1 8,114 27 125,367 (1) Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income. (2) Comparisons with prior periods are affected by the transfer of the Private Client Advice business to Private Banking from 1 January 2021. (3) Total income excludes internal service fee income which has been calculated on a cost plus mark-up basis. (4) Revenue and income from transactions between segments of the group are now reported as inter-segment in both the current and comparative information. |
Pensions
Pensions | 12 Months Ended |
Dec. 31, 2023 | |
Pensions | |
Pensions | 5 Pensions NatWest Group operates two types of pension scheme: defined benefit and defined contribution. The defined contribution schemes invest contributions in a choice of funds and the accumulated contributions and investment returns are used by the employee to provide benefits on retirement. There is no legal or constructive obligation for NatWest Group to pay any further contributions or benefits. The defined benefit schemes provide pensions in retirement based on employees’ pensionable salary and service. NatWest Group’s balance sheet includes any defined benefit pension scheme surplus or deficit as a retirement benefit asset or liability reported in other assets and other liabilities. The surplus or deficit is the difference between the liabilities to be paid from the defined benefit scheme and the assets held by the scheme to meet these liabilities. The liabilities are calculated by external actuaries using a number of financial and demographic assumptions. For some NatWest Group defined benefit schemes where there is a net defined benefit surplus in excess of the present value of any economic benefits that can be obtained from that surplus, the application of accounting standards means we do not recognise that surplus on the balance sheet. For accounting policy information refer to Accounting policy 3.3. Defined contribution schemes NatWest Group sponsors several defined contribution schemes in different territories, which new employees are entitled to join. NatWest Group pays specific contributions into individual investment funds on employees’ behalf. Once those contributions are paid, there is no further liability on the NatWest Group balance sheet relating to the defined contribution schemes. Defined benefit schemes NatWest Group sponsors a number of pension schemes in the UK and overseas, including the Main section of the NatWest Group Pension Fund (the Main section) which operates under UK trust law and is managed and administered on behalf of its members in accordance with the terms of the trust deed, the scheme rules and UK legislation. Pension fund trustees are appointed to operate each fund and ensure benefits are paid in accordance with the scheme rules and national law. The trustees are the legal owner of a scheme’s assets, and have a duty to act in the best interests of all scheme members. The schemes generally provide a pension of one The Main section corporate trustee is NatWest Pension Trustee Limited (the Trustee), a wholly owned subsidiary of NWB Plc, Principal Employer of the Main section. The Board of the Trustee includes member trustee directors selected from eligible active staff, deferred and pensioner members who apply and trustee directors appointed by NatWest Group. Under UK legislation, a defined benefit pension scheme is required to meet the statutory funding objective of having sufficient and appropriate assets to cover its liabilities (the pensions that have been promised to members). Similar governance principles apply to NatWest Group’s other defined benefit pension schemes. Investment strategy The assets of the Main section, which is typical of other group schemes (aside from AA section), represent 91% of all plan assets at 31 December 2023 (2022 - 91%) and are invested as shown below. The Main section employs physical, derivative and non-derivative instruments to achieve a desired asset class exposure and to reduce the section’s interest rate, inflation, and currency risk. This means that the net funding position is considerably less sensitive to changes in market conditions than the value of the assets or liabilities in isolation. In particular, movements in interest rate and inflation are substantially hedged by the Trustee. 5 Pensions continued During 2023, the Trustee completed a buy-in transaction for the AA section of the Group Pension Fund, passing all material longevity and investment risk for the section to an insurer. At 31 December 2023, the assets of this section comprised mainly of the buy-in asset (a bulk annuity policy valued at £546 million under IAS 19, covering 99% of the defined benefit obligation attributable to this section), together with residual assets of c. £145 million. In exchange for an upfront premium paid to the insurer, the buy-in asset provides a stream of cashflows to the Trustee replicating payments due to members. The premium was determined by the insurer using its pricing basis. Under IAS 19, the value placed on this asset mirrors the valuation of the defined benefit obligations covered, incorporating an assessment of credit risk. Since the insurer’s pricing basis is more conservative than the best-estimate valuation under IAS 19, an asset loss arises at the outset, which is recognised through OCI along with the impact of other movements in asset values over the year. In future, the buy-in asset value will move in line with movements in the defined benefit obligations covered, meaning that the scheme is protected against longevity and market risk. Major classes of plan assets as a percentage of total plan assets of the Main section 2023 2022 Quoted Unquoted Total Quoted Unquoted Total % % % % % % Equities 0.1 6.7 6.8 0.1 7.7 7.8 Index linked bonds 36.7 — 36.7 37.7 — 37.7 Government bonds 13.3 — 13.3 18.4 — 18.4 Corporate and other bonds 19.2 6.4 25.6 15.3 6.7 22.0 Real estate — 4.5 4.5 — 6.0 6.0 Derivatives — 2.7 2.7 — 8.2 8.2 Cash and other assets — 10.4 10.4 — (0.1) (0.1) 69.3 30.7 100.0 71.5 28.5 100.0 The Main section’s holdings of derivative instruments are summarised in the table below: 2023 2022 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps 29 1,929 940 21 1,873 990 Interest rate swaps 52 3,121 3,394 103 14,317 12,546 Currency forwards 13 235 34 12 310 113 Equity and bond call options — — — — — — Equity and bond put options — — 4 — 2 70 Other 1 8 20 1 14 19 Swaps have been executed at prevailing market rates and within standard market bid/offer spreads with a number of counterparties, including NWB Plc. At 31 December 2023, the gross notional value of the swaps was £81 billion (2022 - £124 billion) and had a net positive fair value of £714 million (2022 - £2,642 million) against which the counterparties had posted approximately 128% collateral. 5 Pensions continued The schemes do not invest directly in NatWest Group but may have exposure to NatWest Group through indirect holdings. The trustees of the respective UK schemes are responsible for ensuring that indirect investments in NatWest Group do not exceed the regulatory limit of 5% of plan assets. Main section All schemes Present value Asset Net Asset Fair of defined ceiling/ pension Fair Present value ceiling/ Net value of benefit minimum assets/ value of of defined minimum pension plan assets obligation (1) funding liability plan assets benefit (2) funding assets (2) Changes in value of net pension assets/(liability) £m £m £m £m £m £m £m £m At 1 January 2022 52,021 (42,020) (10,001) — 57,787 (46,808) (10,491) 488 Currency translation and other adjustments — — — — 78 (65) (11) 2 Income statement - operating expenses 932 (892) (180) (140) 1,041 (1,055) (191) (205) Other comprehensive income (18,180) 16,714 898 (568) (20,326) 18,570 916 (840) Contributions by employer 708 — — 708 775 — — 775 Contributions by plan participants and other scheme members 7 (7) — — 13 (13) — — Assets/liabilities extinguished upon settlement — — — — (113) 113 — — Benefits paid (1,472) 1,472 — — (1,657) 1,657 — — At 1 January 2023 34,016 (24,733) (9,283) — 37,598 (27,601) (9,777) 220 Currency translation and other adjustments — — — — (21) 21 4 4 Income statement - operating expenses Net interest expense 1,677 (1,208) (464) 5 1,841 (1,341) (485) 15 Current service cost — (76) — (76) — (105) — (105) Past service cost — (2) — (2) — (8) — (8) Loss on curtailments and settlements — — — — — (24) — (24) 1,677 (1,286) (464) (73) 1,841 (1,478) (485) (122) Other comprehensive income Return on plan assets excluding recognised interest income (1,042) — — (1,042) (1,182) — — (1,182) Experience gains and losses — (1,531) — (1,531) — (1,599) — (1,599) Effect of changes in actuarial financial assumptions — (585) — (585) — (776) — (776) Effect of changes in actuarial demographic assumptions — 379 — 379 — 436 — 436 Asset ceiling adjustments — — 2,643 2,643 — — 2,841 2,841 (1,042) (1,737) 2,643 (136) (1,182) (1,939) 2,841 (280) Contributions by employer (3) 209 — — 209 278 2 — 280 Contributions by plan participants and other scheme members 7 (7) — — 12 (12) — — Assets/liabilities extinguished upon settlement — — — — (50) 50 — — Benefits paid (1,229) 1,229 — — (1,365) 1,365 — — At 31 December 2023 (4) 33,638 (26,534) (7,104) — 37,111 (29,592) (7,417) 102 (1) Defined benefit obligations are subject to annual valuation by independent actuaries. (2) NatWest Group recognises the net pension scheme surplus or deficit as a net asset or liability. In doing so, the funded status is adjusted to reflect any schemes with a surplus that NatWest Group may not be able to access, as well as any minimum funding requirement to pay in additional contributions. This is most relevant to the Main section, where the surplus is not recognised as the trustees may have control over the use of the surplus. Other NatWest Group schemes that this applies to include the Ulster Bank Pension Scheme (NI) and the NatWest Markets section. (3) NatWest Group expects to make contributions to the Main section of £207 million in 2024. (4) On 16 June 2023 the High Court issued a ruling in respect of Virgin Media v NTL Pension Trustees II Limited (and others), which has the potential to affect the defined benefit obligation (DBO) values. Reasonable due diligence has concluded that DBO values above require no adjustment for the impact of this case. 5 Pensions continued All schemes 2023 2022 Amounts recognised on the balance sheet £m £m Fund asset at fair value 37,111 37,598 Present value of fund liabilities (29,592) (27,601) Funded status 7,519 9,997 Assets ceiling/minimum funding (7,417) (9,777) 102 220 2023 2022 Net pension asset/(liability) comprises £m £m Net assets of schemes in surplus (refer to Note 18) 201 318 Net liabilities of schemes in deficit (refer to Note 21) (99) (98) 102 220 Funding and contributions by NatWest Group In the UK, the trustees of defined benefit pension schemes are required to perform funding valuations every three years. The trustees and the sponsor, with the support of the Scheme Actuary, agree the assumptions used to value the liabilities and to determine future contribution requirements. The funding assumptions incorporate a margin for prudence over and above the expected cost of providing the benefits promised to members, taking into account the sponsor’s covenant and the investment strategy of the scheme. Similar arrangements apply in the other territories where NatWest Group sponsors defined benefit pension schemes. A full triennial funding valuation of the Main section, effective 31 December 2020, was completed during financial year 2021. This triennial funding valuation determined the funding level to be 104%, pension liabilities to be £49 billion and the surplus to be £2 billion, all assessed on the agreed funding basis. The average cost of the future service of current members is 49% of salary before contributions from those members. In addition, the sponsor has agreed to meet administrative expenses. Following the ring-fencing agreement with the Trustee reached in 2018, additional contributions of up to £500 million p.a. were payable to the Main section should the Group make distributions to shareholders of an equal amount. These contributions were capped at £1.5 billion in total, of which £1.0 billion was paid over 2021 and 2022. During 2023, NatWest Bank entered a new contractual agreement with the Trustee, such that assets to the value of the remaining contributions falling due under the previous agreement would instead be paid to a Reservoir Trust. These assets have been restricted and are reserved to ensure they are available should they be needed by the Trustee in the future, according to agreed criteria. They are included in the encumbered balance sheet in the Risk section of this report. The assets under this arrangement will be available to the Group in future, to the extent that they are not needed under the defined trigger events. The key assumptions used to determine the funding liabilities were the discount rate, which is determined based on fixed interest swap and gilt yields plus 0.64% per annum, and mortality assumptions, which result in life expectancies of 27.7 / 29.4 years for males/females who are currently age 60 and 28.9 / 30.7 years from age 60 for males/females who are currently aged 40. Accounting Assumptions Placing a value on NatWest Group’s defined benefit pension schemes’ liabilities requires NatWest Group’s management to make a number of assumptions, with the support of independent actuaries. The ultimate cost of the defined benefit obligations depends upon actual future events and the assumptions made are unlikely to be exactly borne out in practice, meaning the final cost may be higher or lower than expected. 5 Pensions continued The most significant assumptions used for the Main section are shown below: Principal IAS 19 actuarial assumptions (1) 2023 2022 % % Discount rate 4.8 5.0 Inflation assumption (RPI) 3.1 3.2 Rate of increase in salaries 1.8 1.8 Rate of increase in deferred pensions 3.2 3.2 Rate of increase in pensions in payment 2.4 2.5 Lump sum conversion rate at retirement 18 18 Longevity at age 60: years years Current pensioners Males 26.8 27.3 Females 28.6 29.1 Future pensioners, currently aged 40 Males 27.7 28.3 Females 29.5 30.1 (1) The above financial assumptions are long-term assumptions set with reference to the period over which the obligations are expected to be settled. Discount rate The IAS 19 valuation uses a single discount rate set by reference to the yield on a basket of ‘high quality’ sterling corporate bonds. Significant judgement is required when setting the criteria for bonds to be included in the basket of bonds that is used to determine the discount rate used in the IAS 19 valuations. The criteria include issue size, quality of pricing and the exclusion of outliers. Judgement is also required in determining the shape of the yield curve at long durations; a constant credit spread relative to gilts is assumed. Sensitivity to the main assumptions is presented below. 5 Pensions continued The weighted average duration of the Main section's defined benefit obligation at 31 December 2023 is 14.0 years (2022 – 15.3 years). The chart below shows the projected benefit payment pattern for the Main section in nominal terms. These cashflows are based on the most recent formal actuarial valuation, effective 31 December 2020. 5 Pensions continued The table below shows how the net pension asset of the Main section would change if the key assumptions used were changed independently. In practice the variables have a degree of correlation and do not move completely in isolation. (Decrease)/ (Decrease)/ Increase in increase in increase in net pension value of value of (obligations)/ assets liabilities assets 2023 £m £m £m 0.5% increase in interest rates/discount rate (2,292) (1,746) (546) 0.25% increase in inflation 811 578 233 0.5% increase in credit spreads (12) (1,746) 1,734 Longevity increase of one year — 902 (902) 0.25% additional rate of increase in pensions in payment — 706 (706) Increase in equity values of 10% (1) 229 — 229 2022 0.5% increase in interest rates/discount rate (2,689) (1,766) (923) 0.25% increase in inflation 963 632 331 0.5% increase in credit spreads (6) (1,766) 1,760 Longevity increase of one year — 767 (767) 0.25% additional rate of increase in pensions in payment — 679 (679) Increase in equity values of 10% (1) 267 — 267 (1) Includes both quoted and private equity. The table below shows the combined change in defined benefit obligation from larger movements in these assumptions, assuming no changes in other assumptions. Change in life expectancies -2 years -1 year No change + 1 year + 2 years 2023 £bn £bn £bn £bn £bn Change in credit spreads +50 bps (3.5) (2.6) (1.7) (0.9) (0.1) No change (1.9) (0.9) — 0.9 1.8 -50 bps — 1.0 2.0 2.9 3.9 2022 Change in credit spreads +50 bps (3.7) (2.8) (1.8) (0.8) 0.2 No change (2.1) (1.1) — 1.1 2.1 -50 bps (0.3) 0.9 2.0 3.2 4.3 5 Pensions continued The defined benefit obligation of the Main section is attributable to the different classes of scheme members in the following proportions: 2023 2022 Membership category % % Active members 7.5 8.4 Deferred members 41.9 41.0 Pensioners and dependants 50.6 50.6 100.0 100.0 The experience history of NatWest Group schemes is shown below: Main section All schemes 2023 2022 2021 2020 2019 2023 2022 2021 2020 2019 History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets 33,638 34,016 52,021 51,323 46,555 37,111 37,598 57,787 57,249 51,925 Present value of plan obligations (26,534) (24,733) (42,020) (43,870) (39,669) (29,592) (27,601) (46,808) (48,864) (44,115) Net surplus 7,104 9,283 10,001 7,453 6,886 7,519 9,997 10,979 8,385 7,810 Experience (losses)/gains on plan liabilities (1,531) (2,053) 241 427 275 (1,599) (2,137) 237 455 279 Experience (losses)/gains on plan assets (1,042) (18,180) 841 5,486 3,021 (1,182) (20,326) 872 6,027 3,556 Actual return on plan assets 634 (17,248) 1,554 6,422 4,266 659 (19,285) 1,667 7,064 4,930 Actual return on plan assets 1.9 % (33.2) % 3.0 % 13.8 % 9.7 % 1.8 % (33.4) % 2.9 % 13.6 % 10.1 % |
Auditor's remuneration
Auditor's remuneration | 12 Months Ended |
Dec. 31, 2023 | |
Auditor's remuneration | |
Auditor's remuneration | 6 Auditor’s remuneration Amounts payable to NatWest Group's auditors for statutory audit and other services are set out below. All audit-related and other services are approved by the Group Audit Committee and are subject to strict controls to ensure the external auditor’s independence is unaffected by the provision of other services. The Group Audit Committee recognises that for certain assignments, the auditors are best placed to perform the work economically; for other work, NatWest Group selects the supplier best placed to meet its requirements. NatWest Group’s auditors are permitted to tender for such work in competition with other firms where the work is permissible under audit independence rules. 2023 2022 2021 £m £m £m Fees payable for : - the audit of NatWest Group’s annual accounts (1) 4.9 4.7 4.4 - the audit of NatWest Group plc’s subsidiaries (1) 32.3 31.9 29.6 - audit-related assurance services (1,2) 4.5 3.9 5.3 Total audit and audit-related assurance services fees 41.7 40.5 39.3 Other assurance services 0.7 1.2 0.4 Corporate finance services (3) 0.7 0.5 0.5 Total other services 1.4 1.7 0.9 (1) The 2023 audit fee was approved by the Group Audit Committee. At 31 December 2023, £16 million has been billed and paid in respect of the 2023 NatWest Group audit fees. (2) Comprises fees of £1.4 million (2022 - £1.1 million) for reviews of interim financial information, £ 2.8 million (2022 - £2.3 million) for reports to NatWest Group’s regulators in the UK and overseas, and £0.3 million (2022 - £0.4 million) for non-statutory audit opinions. (3) Comprises fees of £0.7 million (2022 - £0.5 million) for work performed by the auditors as reporting accountants on debt and equity issuances undertaken by NatWest Group . |
Tax
Tax | 12 Months Ended |
Dec. 31, 2023 | |
Tax | |
Tax | 7 Tax NatWest Group’s corporate income tax charge for the period is set out below, together with a reconciliation to the expected tax charge calculated using the UK standard corporation tax rate and details of the NatWest Group’s deferred tax balances. For accounting policy information refer to Accounting policies 2.1 and 3.7. Analysis of the tax charge for the year The tax charge comprises current and deferred tax in respect of profits and losses recognised or originating in the income statement. Tax on items originating outside the income statement is charged to other comprehensive income or direct to equity (as appropriate) and is therefore not reflected in the table below. Current tax is tax payable or recoverable in respect of the taxable profit or loss for the year and any adjustments to tax payable in prior years. Deferred tax is explained on page 75 . 2023 2022 2021 Continuing operations £m £m £m Current tax Charge for the year (1,373) (1,611) (1,036) (Under)/over provision in respect of prior years (123) 100 31 (1,496) (1,511) (1,005) Deferred tax (Charge)/credit for the year (281) 47 (185) UK tax rate change impact — (10) 165 Net increase in the carrying value of deferred tax assets in respect of UK, RoI and Netherlands losses 385 267 12 (Under)/over provision in respect of prior years (42) (68) 17 Tax charge for the year (1,434) (1,275) (996) 7 Tax continued Factors affecting the tax charge for the year Taxable profits differ from profits reported in the income statement as certain amounts of income and expense may not be taxable or deductible. In addition, taxable profits may reflect items that have been included outside the income statement (for instance, in other comprehensive income) or adjustments that are made for tax purposes only. Current tax for the year ended 31 December 2023 is based on blended rates of 23.5% for the standard rate of UK corporation tax and 4.25% for the UK banking surcharge. The expected tax charge for the year is calculated by applying the standard UK corporation tax rate of 23.5% (2022 and 2021 – 19%) to the Operating profit or loss before tax in the income statement. The actual tax charge differs from the expected tax charge as follows: 2023 2022 2021 Continuing operations £m £m £m Expected tax charge (1,452) (975) (766) Losses and temporary differences in year where no deferred tax asset recognised (56) (118) (51) Foreign profits taxed at other rates 10 (62) (11) Non deductible goodwill impairment — — (16) Items not allowed for tax: - losses on disposals and write-downs (63) (10) (55) - UK bank levy (27) (20) (18) - regulatory and legal actions (1) (7) (74) - other disallowable items (57) (51) (28) Non-taxable items: - Foreign exchange recycling on UBIDAC capital reduction 114 — — - RPI-related uplift on index linked gilts 6 67 — - other non-taxable items 20 29 73 Taxable foreign exchange movements 9 (19) 8 Unrecognised losses brought forward and utilised 27 6 10 Net increase/(decrease) in the carrying value of deferred tax assets in respect of: - UK losses (2) 371 272 (9) - RoI losses (1) (5) (27) - Netherlands losses 15 — 48 Banking surcharge (236) (447) (341) Tax on paid-in equity dividends 52 43 48 UK tax rate change impact — (10) 165 Adjustments in respect of prior years (1, 2) (165) 32 48 Actual tax charge (1,434) (1,275) (996) (1) (2) On 11 July 2023, the UK government enacted the Pillar 2 income taxes legislation effective for the financial year beginning 1 January 2024. Under the legislation, NatWest Group plc will be required to pay, in the UK, top-up tax on profits of its subsidiaries and permanent establishments that are taxed at a Pillar 2 effective tax rate of less than 15%. The assessment of the potential exposure to Pillar 2 income taxes is based on the most recent tax filings, country-by-country reporting, and financial statements for the constituent entities in the NatWest Group. The main jurisdictions in which exposure to this top-up tax may exist include Jersey, Guernsey, Isle of Man and Gibraltar. This legislation is expected to have no material impact for NatWest Group plc. In future periods, part of this top-up tax may be payable instead in the relevant jurisdiction, if that jurisdiction implements a Qualifying Domestic Minimum Top Up Tax (QDMTT). This is expected in most jurisdictions in which we operate. 7 Tax continued Judgement: tax contingencies NatWest Group’s corporate income tax charge and its provisions for corporate income taxes necessarily involve a degree of estimation and judgement. The tax treatment of some transactions is uncertain and tax computations are yet to be agreed with the relevant tax authorities. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Any difference between the final outcome and the amounts provided will affect current and deferred income tax charges in the period when the matter is resolved. Deferred tax Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences where the carrying amount of an asset or liability differs for accounting and tax purposes. Deferred tax liabilities reflect the expected amount of tax payable in the future on these temporary differences. Deferred tax assets reflect the expected amount of tax recoverable in the future on these differences. The net deferred tax asset recognised by the NatWest Group is shown below, together with details of the accounting judgements and tax rates that have been used to calculate the deferred tax. Details are also provided of any deferred tax assets or liabilities that have not been recognised on the balance sheet. Analysis of deferred tax 2023 2022 £m £m Deferred tax asset (1,894) (2,178) Deferred tax liability 141 227 Net deferred tax asset (1,753) (1,951) Accelerated Tax losses capital Expense Financial carried Pension allowances provisions instruments (1) forward Other Total £m £m £m £m £m £m £m At 1 January 2022 24 (42) (97) 248 (899) (70) (836) Charge/(credit) to income statement: - continuing operations 1 (43) 14 (171) (51) 14 (236) - discontinued operations — — — — — — — (Credit)/charge to other comprehensive income (2) — 1 (913) — (2) (916) Currency translation and other adjustments — 10 — 31 (2) (2) 37 At 1 January 2023 23 (75) (82) (805) (952) (60) (1,951) Charge/(credit) to income statement: - continuing operations 1 (1) 21 16 (67) (32) (62) - discontinued operations — — — — — — — (Credit)/charge to other comprehensive income (8) — — 249 — 17 258 Currency translation and other adjustments — — — 2 — — 2 At 31 December 2023 16 (76) (61) (538) (1,019) (75) (1,753) (1) The in-year movement predominantly relates to cash flow hedges. 7 Tax continued Deferred tax assets in respect of carried forward tax losses are recognised if the losses can be used to offset probable future taxable profits after taking into account the expected reversal of other temporary differences. Recognised deferred tax assets in respect of tax losses are analysed further below. 2023 2022 £m £m UK tax losses carried forward - NWM Plc — 3 - NWB Plc 362 445 - RBS plc 597 452 Total 959 900 Overseas tax losses carried forward - UBIDAC 5 6 - NWM N.V. 55 46 1,019 952 Critical accounting policy: Deferred tax NatWest Group has recognised a deferred tax asset of £1,894 million (2022 - £2,178 million) and a deferred tax liability of £141 million (2022 - £227 million). These include amounts recognised in respect of UK and overseas tax losses of £1,019 million (2022 - £952 million). The main UK corporation tax increased from 19% to 25%, and the UK banking surcharge decreased from 8% to 3%, from 1 April 2023. NatWest Group’s closing deferred tax assets and liabilities are therefore recognised based on these rates. Judgement – Estimates – UK tax losses Under UK tax rules, tax losses can be carried forward indefinitely. As the recognised tax losses in NatWest Group arose prior to 1 April 2015, credit in future periods is given against 25% of profits at the main rate of UK corporation tax, excluding the Banking Surcharge rate introduced by The Finance (No. 2) Act 2015. NWM Plc - NWB Plc – RBS plc – Overseas tax losses UBIDAC – 7 Tax continued NatWest Markets N.V. (NWM N.V.) - Unrecognised deferred tax Deferred tax assets of £5,168 million (2022 - £5,534 million; 2021 - £5,437 million) have not been recognised in respect of tax losses and other deductible temporary differences carried forward of £24,438 million (2022 - £25,742 million; 2021 - £24,699 million) in jurisdictions where doubt exists over the availability of future taxable profits. Of these losses and other deductible temporary differences, £34 million expire within five years and £4,488 million thereafter. The balance of tax losses and other deductible temporary differences carried forward has no expiry date. Deferred tax liabilities of £256 million (2022 - £257 million; 2021 - £302 million) on aggregate underlying temporary differences of £1,005 million (2022 - £1,010 million; 2021 - £1,032 million) have not been recognised in respect of retained earnings of overseas subsidiaries and held-over gains on the incorporation of certain overseas branches. Retained earnings of overseas subsidiaries are expected to be reinvested indefinitely or remitted to the UK free from further taxation. No taxation is expected to arise in the foreseeable future in respect of held-over gains on which deferred tax is not recognised. Changes to UK tax legislation largely exempts from UK tax overseas dividends received on or after 1 July 2009. |
Discontinued operations and ass
Discontinued operations and assets and liabilities of disposal groups | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued operations and assets and liabilities of disposal groups | |
Discontinued operations and assets and liabilities of disposal groups | 8 Discontinued operations and assets and liabilities of disposal groups Discontinued operations are reported separately on the income statement to allow users to distinguish the profits and cash flows from continuing operations from those activities that are subject to disposal. Assets and liabilities which we intend to dispose of in a single transaction are also presented separately on the balance sheet. For accounting policy information refer to Accounting policy 3.2. This note sets out the profit/(loss) from the discontinued operations, the assets and liabilities of the disposal group and the operating cash flows attributable to the discontinued operations. Four legally binding agreements for the sale of the UBIDAC business have been announced as part of the phased withdrawal from the Republic of Ireland. Material developments since the beginning of 2023 are set out below. Agreement with Allied Irish Banks p.l.c. (AIB) for the transfer of performing commercial loans . UBIDAC completed the sale of commercial loans to AIB, with a cumulative €3.1 billion of gross performing loans being fully migrated. The transfer of the final cohort of colleagues to AIB who were wholly or mainly assigned to supporting this part of the business under Transfer of Undertakings, Protection of Employment (TUPE) arrangements has also completed. Agreement with Permanent TSB Group Holdings p.l.c. (PTSB). Agreement for the sale of performing non-tracker mortgages, the performing loans in the micro-SME business, the UBIDAC Asset Finance business, including its Lombard digital platform, and 25 Ulster Bank branch locations in the Republic of Ireland. The remaining performing non-tracker mortgages, all micro-SME loans and the Lombard Asset Finance business migrated to PTSB during the year, totalling c. €6.3 billion of gross loan balances. All remaining colleagues eligible under TUPE regulations also migrated to PTSB, as well as 25 former Ulster Bank branches. Agreement with AIB for the sale of performing tracker and linked mortgages. UBIDAC completed the migration of €4.0 billion of performing tracker and linked mortgages to AIB. The remaining migrations are expected to complete in 2024. Agreement with Elmscott Property Finance DAC / AB CarVal (CarVal) The business activities relating to these sales that meet the requirements of IFRS 5 are presented as a discontinued operation and as a disposal group. Ulster Bank RoI continuing operations are reported within Central items & other. (a) (Loss)/profit from discontinued operations, net of tax 2023 2022 2021 £m £m £m Interest receivable 22 177 339 Net interest income 22 177 339 Non-interest income (1) (16) (472) 13 Total income 6 (295) 352 Operating expenses (124) (38) (47) (Loss)/profit before impairment releases (118) (333) 305 Impairment releases 6 71 162 Operating (loss)/profit before tax (112) (262) 467 Tax charge — — (3) (Loss)/profit from discontinued operations, net of tax (112) (262) 464 (1) Excludes gain of £ 20 million (€ 24 million) recognised by NatWest Group as a result of acquisition of PTSB shares in relation to disposal of UBIDAC assets to PTSB in 2022. 8 Discontinued operations and assets and liabilities of disposal groups continued (b) Assets and liabilities of disposal groups 2023 2022 £m £m Assets of disposal groups Loans to customers - amortised cost 32 1,458 Other financial assets - loans to customers 841 5,397 Other assets 29 6 902 6,861 Liabilities of disposal groups Other liabilities 3 15 3 15 Net assets of disposal groups 899 6,846 (c) Operating cash flows attributable to discontinued operations 2023 2022 2021 £m £m £m Net cash flows from operating activities 362 1,090 2,212 Net cash flows from investing activities 5,473 6,164 — Net increase in cash and cash equivalents 5,835 7,254 2,212 |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per share | |
Earnings per share | 9 Earnings per share Earnings per share measures how much profit NatWest Group makes for each share in issue during the year. Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding. Diluted earnings per ordinary share is calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding plus the weighted average number of ordinary shares that would be issued on conversion of dilutive share options and convertible securities. The assessment of whether the effect of share options and convertible securities is dilutive or not, is based on the earnings from continuing operations. 2023 2022 2021 £m £m £m Earnings Profit from continuing operations attributable to ordinary shareholders 4,506 3,602 2,486 (Loss)/profit from discontinued operations attributable to ordinary shareholders (112) (262) 464 Profit attributable to ordinary shareholders 4,394 3,340 2,950 Weighted average number of shares (millions) Weighted average number of ordinary shares outstanding during the year 9,164 9,872 10,792 Effect of dilutive share options and convertible securities (1) 55 57 45 Diluted weighted average number of ordinary shares outstanding during the year 9,219 9,929 10,837 Earnings per ordinary share - continuing operations 49.2p 36.5p 23.0p Earnings per ordinary share - discontinued operations (1.2p) (2.7p) 4.3p Total earnings per share attributable to ordinary shareholders - basic (2) 47.9p 33.8p 27.3p Earnings per ordinary share - fully diluted continuing operations 48.9p 36.2p 22.9p Earnings per ordinary share - fully diluted discontinued operations (1.2p) (2.6p) 4.3p Total earnings per share attributable to ordinary shareholders - fully diluted 47.7p 33.6p 27.2p (1) At the General Meeting and Class Meeting on 25 August 2022, the shareholders approved the proposed special dividend and share consolidation. On 30 August 2022 the issued ordinary share capital was consolidated in the ratio of 14 existing shares for 13 new shares. The average number of shares and earnings per share have been adjusted retrospectively. (2) In 2023, the unrounded Total earnings per share attributable to ordinary shareholders – basic is 47.948 p. The unrounded Earnings per ordinary share – continuing operations was 49.170 p. The unrounded Earnings per ordinary share – discontinued operations was ( 1.222 p). |
Financial instruments - classif
Financial instruments - classification | 12 Months Ended |
Dec. 31, 2023 | |
Financial instruments - classification | |
Financial instruments - classification | 10 Financial instruments – classification Financial instruments are contracts that give rise to a financial asset of one entity and a corresponding financial liability or equity instrument of a counterparty entity, such as cash, derivatives, loans, deposits and settlement balances. This note presents financial instruments classified in accordance with IFRS 9 – Financial Instruments. Judgement: classification of financial assets Classification of financial assets between amortised cost and fair value through other comprehensive income requires a degree of judgement in respect of business models and contractual cashflows. - The business model criteria is assessed at a portfolio level to determine whether assets are classified as held to collect or held to collect and sell. Information that is considered in determining the applicable business model includes: the portfolio’s policies and objectives; how the performance and risks of the portfolio are managed, evaluated and reported to management; and the frequency, volume and timing of sales in prior periods, sales expectation for future periods, and the reasons for sales. - The contractual cash flow characteristics of financial assets are assessed with reference to whether the cash flows represent solely payments of principal and interest (SPPI). A level of judgement is made in assessing terms that could change the contractual cash flows so that it would not meet the condition for SPPI, including contingent and leverage features, non-recourse arrangements and features that could modify the time value of money. For accounting policy information refer to Accounting policies 3.8, 3.9 and 3.11. 10 Financial instruments – classification continued The following tables analyse financial assets and liabilities in accordance with the categories of financial instruments in IFRS 9. Amortised Other MFVTPL DFV FVOCI cost assets Total Assets £m £m £m £m £m £m Cash and balances at central banks — — — 104,262 — 104,262 Trading assets 45,551 — — — — 45,551 Derivatives (1) 78,904 — — — — 78,904 Settlement balances — — — 7,231 — 7,231 Loans to bank - amortised cost (2) — — — 6,914 — 6,914 Loans to customers - amortised cost (3) — — — 381,433 — 381,433 Other financial assets 703 5 28,699 21,695 — 51,102 Intangible assets — — — — 7,614 7,614 Other assets — — — — 8,760 8,760 Assets of disposal groups (4) — — — — 902 902 31 December 2023 125,158 5 28,699 521,535 17,276 692,673 Cash and balances at central banks — — — 144,832 — 144,832 Trading assets 45,577 — — — — 45,577 Derivatives (1) 99,545 — — — — 99,545 Settlement balances — — — 2,572 — 2,572 Loans to bank - amortised cost (2) — — — 7,139 — 7,139 Loans to customers - amortised cost (3) — — — 366,340 — 366,340 Other financial assets 787 — 16,973 13,135 — 30,895 Intangible assets — — — — 7,116 7,116 Other assets — — — — 9,176 9,176 Assets of disposal groups (4) — — — — 6,861 6,861 31 December 2022 145,909 — 16,973 534,018 23,153 720,053 10 Financial instruments – classification continued Held-for- Amortised Other trading DFV cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (5) — — 22,190 — 22,190 Customer deposits — — 431,377 — 431,377 Settlement balances — — 6,645 — 6,645 Trading liabilities 53,636 — — — 53,636 Derivatives (1) 72,395 — — — 72,395 Other financial liabilities (6) — 2,888 52,201 — 55,089 Subordinated liabilities — 237 5,477 — 5,714 Notes in circulation — — 3,237 — 3,237 Other liabilities (7) — — 748 4,454 5,202 31 December 2023 126,031 3,125 521,875 4,454 655,485 Bank deposits (5) — — 20,441 — 20,441 Customer deposits — — 450,318 — 450,318 Settlement balances — — 2,012 — 2,012 Trading liabilities 52,808 — — — 52,808 Derivatives (1) 94,047 — — — 94,047 Other financial liabilities (6) — 2,377 46,730 — 49,107 Subordinated liabilities — 345 5,915 — 6,260 Notes in circulation — — 3,218 — 3,218 Other liabilities (7) — — 1,205 4,141 5,346 31 December 2022 146,855 2,722 529,839 4,141 683,557 (1) Includes net hedging derivatives assets of £ 114 million (2022 - £ 143 million) and net hedging derivatives liabilities of £ 270 million (2022 - £ 132 million). (2) Includes items in the course of collection from other banks of £ 255 million (2022 - £ 229 million). (3) Includes finance lease receivables of £ 8,731 million (2022 - £ 8,402 million). (4) Includes assets of disposal groups held at FVTPL of £ 841 million (2022 - £ 5,397 million). The portfolio is classified as level 3 in the fair value hierarchy. (5) Includes items in the course of transmission to other banks of £ 92 million (2022 - £ 242 million). (6) The carrying amount of customer deposits designated at fair value through profit or loss is the same as the principal amount for both periods. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. (7) Includes lease liabilities of £ 670 million (2022 - £ 1,118 million), held at amortised cost. Reclassification of mortgages from amortised cost to fair value through profit or loss In June 2022 UBIDAC announced the cessation of new mortgage business to its customers. On 1 July 2022 UBIDAC mortgages in both its continuing and discontinued businesses were reclassified from amortised cost to fair value through profit or loss, reflecting the change in business model. We fair value these assets using a discounted cash flow method. Key inputs include assumptions about cash flows from legally binding sales agreements for those mortgage assets that form part of the assets of disposal groups. For details on material developments in assets and liabilities of disposals groups during the year, refer to Note 8. The effect of the reclassification as at 1 July 2022 is shown below. Amortised cost MFVTPL Change in value £m £m £m Amounts reclassified on balance sheet Loans to customers (1) 587 606 19 Assets of disposal groups (2) 10,676 10,383 (293) 11,263 10,989 (274) (1) (2) 10 Financial instruments – classification continued We originate loans that include features that change the contractual cash flows based on the borrower meeting certain contractually specified environmental, social and governance (ESG) targets. These are known as ESG-linked (or sustainability-linked) loans. As part of the terms of these loans, the contractual interest rate is reduced or increased if the borrower meets (or fails to meet) specific targets linked to the activity of the borrower, for example reducing carbon emissions, increasing the level of diversity at Board level, or achieving a sustainable supply chain. ESG features are first assessed to ascertain whether the adjustment to the contractual cash flows results in a de minimis exposure to risks or volatility in those contractual cash flows. If this is the case the classification of the loan is not affected. If the effect of the ESG feature is assessed as being more than de minimis, we apply judgement to ensure that the ESG features do not generate compensation for risks that are not in line with a basic lending arrangement. This includes, amongst other aspects, a review of the consistency of the ESG targets with the asset or activity of the borrower, and consideration of the targets within our risk appetite. Some of these loans are an integral part of our climate and sustainable funding and financing target disclosed on page 16 (exhibit 15.2). The table below analyses financial assets forming a component of ESG-linked loans and other products with contractual terms that could change the timing or amount of cash flows. 2023 2022 Positive impact on Negative impact on Reduction in Carrying value product margin product margin cash flows Carrying value £bn bps bps £m £bn Sustainability-linked loans 6.5 3.2 3.9 2.5 5.0 Other products 16.1 — — — 8.9 Lending subject to performance triggers 22.6 2.5 13.9 Additional information on finance lease receivables The following table shows the reconciliation of undiscounted finance lease receivables to net investment in finance leases which are presented under Loans to customers-amortised cost on the balance sheet. 2023 2022 £m £m Amount receivable under finance leases Within 1 year 3,340 3,235 1 to 2 years 2,358 2,254 2 to 3 years 1,625 1,388 3 to 4 years 900 833 4 to 5 years 388 411 After 5 years 1,079 1,130 Total lease payments 9,690 9,251 Unguaranteed residual values 169 171 Future drawdowns (12) (13) Unearned income (1,025) (889) Present value of lease payments 8,822 8,520 Impairments (91) (118) Net investment in finance leases 8,731 8,402 10 Financial instruments – classification continued Financial instruments – financial assets and liabilities that can be offset The tables below present information on financial assets and financial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with financial collateral received or given. Instruments which can be offset Potential for offset not recognised by IFRS Effect of Net amount master after netting Instruments netting agreements and outside IFRS Balance and similar Cash Securities effect of netting Balance Gross offset sheet agreements collateral collateral related collateral agreements sheet total 2023 £m £m £m £m £m £m £m £m £m Derivative assets 99,023 (20,597) 78,426 (60,355) (12,284) (3,408) 2,379 478 78,904 Derivative liabilities 95,734 (23,869) 71,865 (60,355) (6,788) (1,663) 3,059 530 72,395 Net position (1) 3,289 3,272 6,561 — (5,496) (1,745) (680) (52) 6,509 Trading reverse repos 39,573 (16,257) 23,316 (664) — (22,461) 191 378 23,694 Trading repos 42,442 (16,257) 26,185 (664) — (25,520) 1 717 26,902 Net position (2,869) — (2,869) — — 3,059 190 (339) (3,208) Non trading reverse repos 37,477 (9,646) 27,831 (5) — (27,826) — 80 27,911 Non trading repos 23,605 (9,646) 13,959 (5) — (13,954) — 3 13,962 Net position 13,872 — 13,872 — — (13,872) — 77 13,949 2022 Derivative assets 117,606 (18,730) 98,876 (77,365) (14,079) (4,571) 2,861 669 99,545 Derivative liabilities 115,177 (22,111) 93,066 (77,365) (9,761) (1,185) 4,755 981 94,047 Net position (1) 2,429 3,381 5,810 — (4,318) (3,386) (1,894) (312) 5,498 Trading reverse repos 35,612 (14,510) 21,102 (2,445) — (18,458) 199 435 21,537 Trading repos 33,767 (14,510) 19,257 (2,445) — (16,812) — 4,483 23,740 Net position 1,845 — 1,845 — — (1,646) 199 (4,048) (2,203) Non trading reverse repos 25,630 (5,702) 19,928 — — (19,928) — 98 20,026 Non trading repos 16,977 (5,702) 11,275 — — (11,275) — — 11,275 Net position 8,653 — 8,653 — — (8,653) — 98 8,751 (1) Net IFRS offset balance of £ 3,272 million (2022 - £ 3,381 million)relates to variation margin netting reflected on other balance sheet lines . |
Financial instruments - valuati
Financial instruments - valuation | 12 Months Ended |
Dec. 31, 2023 | |
Financial instruments - classification | |
Financial instruments - valuation | 11 Financial instruments – valuation Financial instruments recognised at fair value are revalued using techniques that can include observable inputs (pricing information that is readily available in the market, for example UK Government securities), and unobservable inputs (pricing information that is not readily available, for example unlisted securities). Gains and losses are recognised in the income statement and statement of comprehensive income as appropriate. This note presents information on the valuation of financial instruments. The table below provides an overview of the various sections contained within the note. Critical accounting policy: Fair value - financial instruments Financial instruments classified as mandatory fair value through profit or loss; held-for-trading; designated fair value through profit or loss; and fair value through other comprehensive income are recognised in the financial statements at fair value. All derivatives are measured at fair value. 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. A fair value measurement considers the characteristics of the asset or liability and the assumptions that a market participant would consider when pricing the asset or liability. NatWest Group manages some portfolios of financial assets and financial liabilities based on its net exposure to either market or credit risk. In these cases, the fair value is derived from the net risk exposure of that portfolio with portfolio level adjustments applied to incorporate bid-offer spreads, counterparty credit risk, and funding costs (refer to ’Valuation Adjustments’). Where the market for a financial instrument is not active, fair value is established using a valuation technique. These valuation techniques involve a degree of estimation, the extent of which depends on the instrument’s complexity and the availability of market-based data. The complexity and uncertainty in the financial instrument’s fair value is categorised using the fair value hierarchy. For accounting policy information refer to Accounting policies 2.2, 3.8 and 3.11. 11 Financial instruments - valuation continued Valuation Page Financial instruments Critical accounting policy: Fair value 85 Valuation Fair value hierarchy (D) 87 Valuation techniques (D) 87 Inputs to valuation models (D) 87 Valuation control (D) 88 Key areas of judgement (D) 89 Assets and liabilities split by fair value hierarchy level (T) 90 Valuation adjustments Fair value adjustments made (T) 91 Funding valuation adjustments (FVA) (D) 91 Credit valuation adjustments (CVA) (D) 91 Bid-offer (D) 91 Product and deal specific (D) 92 Own credit (D) 92 Level 3 additional information Level 3 ranges of unobservable inputs (D) 93 Level 3 instruments, valuation techniques and inputs (T) 93 Level 3 sensitivities (D) 94 Alternative assumptions (D) 94 Other considerations (D) 94 High and low range of fair value of level 3 assets and liabilities (T) 94 Movement in level 3 assets and liabilities over the reporting period (D) 95 Movement in level 3 assets and liabilities (T) 95 Fair value of financial instruments measured at amortised cost Fair value of financial instruments measured at amortised cost on the balance sheet 96 (D) = Descriptive; (T) = Table 11 Financial instruments - valuation continued Fair value hierarchy Financial instruments carried at fair value have been classified under the fair value hierarchy. The classification ranges from level 1 to level 3, with more expert judgement and price uncertainty for those classified at level 3. 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 the level of market activity for the referenced entity. 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. Observable inputs are those that are readily available with limited adjustments required. Examples include most government agency securities, investment-grade corporate bonds, certain mortgage products - including collateralised loan obligations (CLOs), most bank loans, repos and reverse repos, state and municipal obligations, most notes issued, certain money market securities, loan commitments and most over the counter (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 non-derivative instrument’s which trade infrequently, certain syndicated and commercial mortgage loans, private equity, and derivatives with unobservable model inputs. Valuation techniques NatWest Group derives the fair value of its instruments differently depending on whether the instrument is a non-modelled or a modelled product. Non-modelled products are valued directly from a price input, typically on a position-by-position basis. Examples include equities and most debt securities. Non-modelled products can fall into any fair value levelling hierarchy depending on the observable market activity, liquidity, and assessment of valuation uncertainty of the instruments. The assessment of fair value and the classification of the instrument to a fair value level is subject to the valuation controls discussed in the Valuation control section. Modelled products valued using a pricing model range in complexity from comparatively vanilla products such as interest rate swaps and options (e.g., interest rate caps and floors) through to more complex derivatives (e.g., balance guarantee swaps). For modelled products the fair value is derived using the model and the appropriate model inputs or parameters, as opposed to a cash price equivalent. Model inputs are taken either directly or indirectly from available data, where some inputs are also modelled. Fair value classification of modelled instruments is either level 2 or level 3, depending on the product/model combination, the observability and quality of input parameters and other factors. All these must be assessed to classify a position. The modelled product is assigned to the lowest fair value hierarchy level of any significant input used in that valuation. Most derivative instruments, for example vanilla interest rate swaps, foreign exchange swaps and liquid single name credit derivatives, are classified as level 2. This is because they are vanilla products valued using standard market models and with observable inputs. Level 2 products range from vanilla to more complex products, where more complex products remain classified as level 2 due to the low materiality of any unobservable inputs. Inputs to valuation models When using valuation techniques, the fair value can be significantly affected by the choice of valuation model and underlying assumptions. Factors considered include the cashflow amounts and timing of those cash flows, and application of appropriate discount rates, incorporating both funding and credit risk. Values between and beyond available data points are obtained by interpolation and extrapolation. The principal inputs to these valuation techniques are as follows: Bond prices 11 Financial instruments valuation continued Credit spreads/margins Interest rates Foreign currency exchange rates Equity and equity index prices Price volatilities and correlations Prepayment rates Recovery rates/loss given default Valuation control NatWest Group's control environment for the determination of the fair value of financial instruments includes formalised procedures for the review and validation of fair values. The review of market prices and inputs is performed by an independent price verification (IPV) team IPV is a key element of the control environment. Valuations are first performed by the business which entered into the transaction. These valuations are then reviewed by the IPV team, independent of those trading the financial instruments, in light of available pricing evidence. Independent pricing data is collated from a range of sources. Each source is reviewed for quality and the independent data applied in the IPV processes using a formalised input quality hierarchy. Consensus services are one source of independent data and encompass interest rate, currency, credit, and bond markets, providing comprehensive coverage of vanilla products and a wide selection of exotic products. Where measurement differences are identified through the IPV process these are grouped by the quality hierarchy of the independent data. If the size of the difference exceeds defined thresholds, an adjustment is made to bring the valuation to within the independently calculated fair value range. IPV takes place at least monthly, for all fair value financial instruments. The IPV control includes formalised reporting and escalation of any valuation differences in breach of established thresholds. The quality and completeness of the information gathered in the IPV process gives an indication as to the liquidity and valuation uncertainty of an instrument and forms part of the information considered when determining fair value hierarchy classifications. Initial fair value level classification of a financial instrument is carried out by the IPV team. These initial classifications are subject to senior management review. Particular attention is paid to instruments transferring from one level to another, new instrument classes or products, instruments where the transaction price is significantly different from the fair value and instruments where valuation uncertainty is high. Valuation Committees are made up of valuation specialists and senior business representatives from various functions and oversees pricing, reserving and valuations issues. These committees meet monthly to review and ratify any methodology changes. The Executive Valuation Committee meets quarterly to address key material and subjective valuation issues, to review items escalated by Valuation Committees and to discuss other relevant industry matters. 11 Financial instruments valuation continued The Group model risk policy sets the policy for model documentation, testing and review. Governance of the model risk policy is carried out by the Group model risk oversight committee, which comprises model risk owners and independent model experts. All models are required to be independently validated in accordance with the Model Risk Policy. Key areas of judgement Over the years the business has simplified, with most products classified as level 1 or 2 of the fair value hierarchy. However, the diverse range of products historically traded by NatWest Group means some products remain classified as level 3. Level 3 indicates a significant level of pricing uncertainty, where expert judgement is used. As such, extra disclosures are required in respect of level 3 instruments. In general, the degree of expert judgement used and hence valuation uncertainty depends on the degree of liquidity of an instrument or input. Where markets are liquid, little judgement is required. However, when the information regarding the liquidity in a particular market is not clear, a judgement may need to be made. For example, for an equity traded on an exchange, daily volumes of trading can be seen, but for an OTC derivative, assessing the liquidity of the market with no central exchange is more challenging. A key related matter is where a market moves from liquid to illiquid or vice versa. Where this movement is considered temporary, the fair value level is not changed. For example, if there is little market trading in a product on a reporting date but at the previous reporting date and during the intervening period the market has been liquid. In this case, the instrument will continue to be classified at the same level in the hierarchy. This is to provide consistency so that transfers between levels are driven by genuine changes in market liquidity and do not reflect short term or seasonal effects. Material movements between levels are reviewed quarterly by the business and IPV. The breadth and depth of the IPV data allows for a rules-based quality assessment to be made of market activity, liquidity, and pricing uncertainty, which assists with the process of allocation to an appropriate level. Where suitable independent pricing information is not readily available, the quality assessment will result in the instrument being assessed as level 3. 11 Financial instruments - valuation continued The table below shows the assets and liabilities held by NatWest Group split by fair value hierarchy level. Level 1 are considered the most liquid instruments, and level 3 the most illiquid, valued using expert judgement and so carry the most significant price uncertainty. 2023 2022 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 — 33,388 209 33,597 — 35,260 395 35,655 Securities 8,447 3,493 14 11,954 7,463 2,458 1 9,922 Derivatives Interest rate 1 43,912 650 44,563 5 52,764 711 53,480 Foreign exchange — 34,096 65 34,161 — 45,715 114 45,829 Other — 72 108 180 — 54 182 236 Other financial assets Loans — 108 657 765 — 172 727 899 Securities 17,848 10,536 258 28,642 10,380 6,278 203 16,861 Total financial assets held at fair value 26,296 125,605 1,961 153,862 17,848 142,701 2,333 162,882 As a % of total fair value assets 17 % 82 % 1 % — 11 % 88 % 1 % — Liabilities Trading liabilities Deposits — 43,126 1 43,127 — 42,486 1 42,487 Debt securities in issue — 706 — 706 — 797 — 797 Short positions 7,936 1,865 2 9,803 7,462 2,062 — 9,524 Derivatives Interest rate — 38,044 439 38,483 2 47,855 678 48,535 Foreign exchange — 33,528 58 33,586 — 45,139 98 45,237 Other — 138 188 326 — 76 199 275 Other financial liabilities Debt securities in issue — 1,605 3 1,608 — 1,327 — 1,327 Other deposits — 1,280 — 1,280 — 1,050 — 1,050 Subordinated liabilities — 237 — 237 — 345 — 345 Total financial liabilities held at fair value 7,936 120,529 691 129,156 7,464 141,137 976 149,577 As a % of total fair value liabilities 6 % 93 % 1 % — 5 % 94 % 1 % — (1) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. (2) For an analysis of debt securities held at mandatory 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. 11 Financial instruments - valuation continued Valuation adjustments 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: 2023 2022 Adjustment £m £m Funding valuation adjustments 132 173 Credit valuation adjustments 236 300 Bid–offer 86 130 Product and deal specific 103 141 Total 557 744 Funding valuation adjustments decreased during the year, primarily driven by changes in GBP interest rates and funding spreads tightening. The decrease in credit value adjustments was driven by credit spreads tightening and a reduction in exposures, primarily due to portfolio ageing, partially offset by new trade activity. Interest rates tightening, trade restructuring and trade specific valuation adjustments were the drivers of the decrease in product and deal specific. The decrease in bid-offer was driven by risk reduction. Funding valuation adjustments (FVA) FVA represents an estimate of the adjustment that a market participant would make to incorporate funding costs and benefits that arise in relation to derivative exposures. FVA is calculated as a portfolio level adjustment and can result in either a funding charge (positive) or funding benefit (negative). Funding levels are applied to estimated potential future exposures. For uncollateralised derivatives, the exposure reflects the future valuation of the derivative. For collateralised derivatives, the exposure reflects the difference between the future valuation of the derivative and the level of collateral posted. Credit valuation adjustments (CVA) CVA represents an estimate of the adjustment to fair value that is made to incorporate the counterparty credit risk inherent in derivative exposures. CVA is calculated on a portfolio basis reflecting an estimate of the amount a third party would charge to assume the credit risk. Collateral held under a credit support agreement is factored into the CVA calculation. In such cases where NatWest Group holds collateral against counterparty exposures, CVA is held to the extent that residual risk remains. FVA and CVA are actively managed by a credit and market risk hedging process, and therefore movements in CVA and FVA are partially offset by trading revenue on the hedges. Bid-offer Fair value positions are required to be marked to exit levels, represented by bid (long positions) or offer (short positions) levels. Non-derivative positions are typically marked directly to bid or offer prices. However derivative exposures are adjusted to exit levels by taking bid-offer reserves calculated on a portfolio basis. The reserving approach is based on current market bid-offer spreads and standard market bucketing of risk. Bid-offer spreads vary by maturity and risk type to reflect different spreads in the market. For positions where there is no observable quote, the bid-offer spreads are widened in comparison to proxies to reflect reduced liquidity or observability. Netting is applied on a portfolio basis to reflect the value at which NatWest Group believes it could exit the net risk of the portfolio, rather than the sum of exit costs for each of the portfolio’s individual trades. This is applied where the asset and liability positions are managed as a portfolio for risk and reporting purposes. 11 Financial instruments – valuation continued Product and deal specific On initial recognition of financial assets and liabilities valued using valuation techniques which have a significant dependence on information other than observable market data, any difference between the transaction price and that derived from the valuation technique is deferred. Such amounts are recognised in the income statement over the life of the transaction, when market data becomes observable, or when the transaction matures or is closed out as appropriate. On 31 December 2023, net gains of £78 million (2022 - £74 million) were carried forward. During the year, net gains of £119 million (2022 - £97 million) were deferred and £115 million (2022 - £94 million) were recognised in the income statement. Where system-generated valuations do not accurately reflect market prices, manual valuation adjustments are applied either at a position or portfolio level. Manual adjustments are subject to the scrutiny of independent control teams and are subject to monthly review by senior management. Own credit NatWest Group considers the effect of its own credit standing when valuing financial liabilities recorded at fair value. Own credit spread adjustments are made when valuing issued debt held at fair value, including issued structured notes. An own credit adjustment is applied to positions where it is believed that counterparties would consider NatWest Group's creditworthiness when pricing trades. 11 Financial instruments – valuation continued Level 3 additional information For illiquid assets and liabilities, classified as level 3, additional information is provided on the valuation techniques used and price sensitivity of the products to those inputs. This is to enable the reader to gauge the level of uncertainty that arises from positions with significant unobservable inputs or modelling parameters. Level 3 ranges of unobservable inputs The table below provides additional information on level 3 instruments and inputs. This shows the valuation technique used for the fair value calculation, the unobservable input and input range. 2023 2022 Financial instrument Valuation technique Unobservable inputs Units Low High Low High Trading assets and Other financial assets Loans Price-based Price % — 123 — 113 Discount cash flow Credit spreads bps 49 119 56 114 Discount cash flow Discount margin bps 174 228 174 222 Debt securities Price-based Price % — 119 — 255 Equity Shares Price-based Price GBP — 32,142 — 34,027 Price-based Price % — 30 — 30 Discount cash flow Discount margin % 7 9 6 8 Net asset valuation Fund NAV % 80 120 80 120 Derivative assets and liabilities Credit derivatives Credit derivative pricing Credit spreads bps 13 600 7 530 Option pricing Correlation % (15) 95 (15) 95 Volatility % 30 80 30 80 Upfront points % — 99 — 99 Recovery rate % — 60 — 60 Interest rate & FX Option pricing Correlation % (50) 99 (50) 100 derivatives Volatility % 30 111 30 127 Constant Prepayment Rate % 2 22 2 21 Mean Reversion % — 20 — 92 Inflation volatility % 2 2 1 2 Inflation rate % 2 3 2 3 (1) Valuation for private equity investments may be estimated by looking at past prices of similar stocks and from valuation statements where valuations are usually derived from earnings measures such as EBITDA or net asset value (NAV). Similarly, for equity or bond fund investments, prices may be estimated from valuation or credit statements using NAV or similar measures. (2) NatWest Group does not have any material liabilities measured at fair value that are issued with an inseparable third-party credit enhancement. 11 Financial instruments – valuation continued Level 3 sensitivities The level 3 sensitivities presented below are calculated at a trade or low-level portfolio basis rather than an overall portfolio basis. As individual sensitivities are aggregated with no reflection of the correlated nature between instruments, the overall portfolio sensitivity may not be accurately reflected. For example, some portfolios may be negatively correlated to others, where a downwards movement in one asset would produce an upwards movement in another. However, due to the additive presentation of the above figures this correlation impact cannot be displayed. As such, the actual potential downside sensitivity of the total portfolio may be less than the non-correlated sum of the additive figures as shown in the below table. Alternative assumptions Reasonably plausible alternative assumptions of unobservable inputs are determined based on a specified target level of certainty of 90%. Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information considering 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. Other considerations Whilst certain inputs used to calculate CVA, FVA and own credit adjustments are not based on observable market data, the uncertainty of these inputs is not considered to have a significant effect on the net valuation of the related derivative portfolios and issued debt. As such, the fair value levelling of the derivative portfolios and issued debt is not determined by CVA, FVA or own credit inputs. In addition, any fair value sensitivity driven by these inputs is not included in the level 3 sensitivities presented. The table below shows the high and low range of fair value of the level 3 assets and liabilities. This range incorporates the range of fair value inputs as described in the previous table. 2023 2022 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 209 — — 395 10 (10) Securities 14 — — 1 — — Derivatives Interest rate 650 20 (20) 711 30 (30) Foreign exchange 65 — — 114 10 (10) Other 108 10 (10) 182 10 (10) Other financial assets Loans 657 — (40) 727 — (10) Securities 258 20 (50) 203 20 (30) Total financial assets held at fair value 1,961 50 (120) 2,333 80 (100) Liabilities Trading liabilities Deposits 1 — — 1 — — Short positions 2 — — — — — Derivatives Interest rate 439 10 (10) 678 30 (30) Foreign exchange 58 — — 98 — — Other 188 10 (10) 199 — — Other financial liabilities - debt securities in issue 3 — — — — — Total financial liabilities held at fair value 691 20 (20) 976 30 (30) 11 Financial instruments – valuation continued Movement in level 3 assets and liabilities The following table shows the movement in level 3 assets and liabilities in the year. Other Other Other Other Derivatives trading financial Total Derivatives trading financial Total assets assets (2) assets (3) assets liabilities liabilities (2) liabilities liabilities 2023 £m £m £m £m £m £m £m £m At 1 January 1,007 396 930 2,333 975 1 — 976 Amounts recorded in the income statement (1) (156) (88) 1 (243) (313) — — (313) Amount recorded in the statement of comprehensive income — — 32 32 — — — — Level 3 transfers in 6 15 16 37 7 2 — 9 Level 3 transfers out (5) (32) (190) (227) (9) (2) — (11) Purchases/originations 180 8 275 463 195 2 3 200 Settlements/other decreases (70) (8) (86) (164) (51) — — (51) Sales (137) (65) (52) (254) (116) — — (116) Foreign exchange and other adjustments (2) (3) (11) (16) (3) — — (3) At 31 December 823 223 915 1,961 685 3 3 691 Amounts recorded in the income statement in respect of balances held at period end - unrealised 67 (39) 1 29 (121) — — (121) 2022 At 1 January 918 740 394 2,052 606 3 — 609 Amounts recorded in the income statement (1) 126 31 (14) 143 382 (1) — 381 Amount recorded in the statement of comprehensive income — — (20) (20) — — — — Level 3 transfers in 193 1 532 726 78 3 — 81 Level 3 transfers out (122) (147) (68) (337) (61) (3) — (64) Purchases/originations 355 274 185 814 382 — — 382 Settlements/other decreases (40) (75) — (115) (41) — — (41) Sales (423) (434) (101) (958) (376) (2) — (378) Foreign exchange and other adjustments — 6 22 28 5 1 — 6 At 31 December 1,007 396 930 2,333 975 1 — 976 Amounts recorded in the income statement in respect of balances held at period end - unrealised 126 31 (16) 141 382 (1) — 381 (1) There were £69 million net gains on trading assets and liabilities (2022 - £224 million net losses) recorded in income from trading activities. Net gains on other instruments of £1 million (2022 - £14 million net losses) were recorded in other operating income and interest income as appropriate. (2) Other trading assets and other trading liabilities comprise assets and liabilities held at fair value in trading portfolios. (3) Other financial assets comprise fair value through other comprehensive income, designated as at fair value through profit or loss and other fair value through profit or loss. 11 Financial instruments – valuation continued Fair value of financial instruments measured at amortised cost on the balance sheet The following table shows the carrying value and fair value of financial instruments measured at amortised cost on the balance sheet. Items where fair value Carrying Fair Fair value hierarchy level approximates value value Level 1 Level 2 Level 3 carrying value 2023 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 104.3 104.3 — — — 104.3 Settlement balances 7.2 7.2 — — — 7.2 Loans to banks 6.9 7.0 — 2.2 0.6 4.2 Loans to customers 381.4 373.2 — 27.5 345.7 — Other financial assets - securities 21.7 21.6 4.0 6.6 11.0 — 2022 Financial assets Cash and balances at central banks 144.8 144.8 — — — 144.8 Settlement balances 2.6 2.6 — — — 2.6 Loans to banks 7.1 7.1 — 4.2 2.8 0.1 Loans to customers 366.3 354.5 — 20.3 334.2 — Other financial assets - securities 13.1 12.8 3.6 3.2 6.0 — 2023 Financial liabilities Bank deposits 22.2 22.3 — 15.4 2.7 4.2 Customer deposits 431.4 431.0 — 30.7 48.8 351.5 Settlement balances 6.6 6.6 — — — 6.6 Other financial liabilities - debt securities in issue 52.2 52.2 — 41.7 10.5 — Subordinated liabilities 5.5 5.4 — 5.4 — — Notes in circulation 3.2 3.2 — — — 3.2 2022 Financial liabilities Bank deposits 20.4 20.0 — 13.1 2.2 4.7 Customer deposits 450.3 450.3 — 12.7 30.6 407.0 Settlement balances 2.0 2.0 — — — 2.0 Other financial liabilities - debt securities in issue 46.7 46.1 — 40.7 5.4 — Subordinated liabilities 5.9 5.6 — 5.5 0.1 — Notes in circulation 3.2 3.2 — — — 3.2 The assumptions and methodologies underlying the calculation of fair values of financial instruments at the balance sheet date are as follows: Short-term financial instruments For certain short-term financial instruments, including but not limited to, cash and balances at central banks, settlement balances, loans with short-term maturities, notes in circulation and customer demand deposits, carrying value is deemed a reasonable approximation of fair value. 11 Financial instruments – valuation continued Loans to banks and customers In estimating the fair value of net loans to customers and banks measured at amortised cost, NatWest Group's loans are segregated into appropriate portfolios reflecting the characteristics of the constituent loans. Two principal methods are used to estimate fair value: (a) Contractual cashflows that are discounted using a market discount rate that incorporates the current spread for the borrower or where this is not observable, the spread for borrowers of a similar credit standing. (b) Expected cash flows (unadjusted for credit losses) are discounted at the current offer rate for the same or similar products. The current methodology caps all loan values at par rather than modelling clients' option to repay loans early. This approach is adopted for lending portfolios in Retail Banking, Ulster Bank RoI, Commercial & Institutional (SME loans) and Private Banking in order to reflect the homogeneous nature of these portfolios. Debt securities and subordinated liabilities Most debt securities are valued using quoted prices in active markets or from quoted prices of similar financial instruments. The remaining population is valued using discounted cashflows at current offer rates. Bank and customer deposits Fair values of deposits are estimated using discounted |
Financial instruments - maturit
Financial instruments - maturity analysis | 12 Months Ended |
Dec. 31, 2023 | |
Financial instruments - classification | |
Financial instruments - maturity analysis | 12 Financial instruments - maturity analysis This note shows the maturity profile of NatWest Group’s financial assets and liabilities by contractual date of maturity and contractual cash flows. Remaining maturity The following table shows the residual maturity of financial instruments, based on contractual date of maturity. 2023 2022 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 104,262 — 104,262 144,832 — 144,832 Trading assets 36,723 8,828 45,551 35,944 9,633 45,577 Derivatives 29,839 49,065 78,904 38,107 61,438 99,545 Settlement balances 7,231 — 7,231 2,572 — 2,572 Loans to banks - amortised cost 6,650 264 6,914 6,872 267 7,139 Loans to customers - amortised cost 87,663 293,770 381,433 84,289 282,051 366,340 Other financial assets 10,192 40,910 51,102 6,128 24,767 30,895 Liabilities Bank deposits 8,954 13,236 22,190 7,799 12,642 20,441 Customer deposits 424,893 6,484 431,377 448,821 1,497 450,318 Settlement balances 6,645 — 6,645 2,012 — 2,012 Trading liabilities 45,349 8,287 53,636 42,760 10,048 52,808 Derivatives 30,721 41,674 72,395 39,331 54,716 94,047 Other financial liabilities 20,310 34,779 55,089 13,796 35,311 49,107 Subordinated liabilities 1,047 4,667 5,714 973 5,287 6,260 Notes in circulation 3,237 — 3,237 3,218 — 3,218 Lease liabilities 102 568 670 137 981 1,118 Assets and liabilities by contractual cash flows up to 20 years The tables on the following page show the contractual undiscounted cash flows receivable and payable, up to a period of 20 years, including future receipts and payments of interest of financial assets and liabilities by contractual maturity. The balances in the following tables do not agree directly with the consolidated balance sheet, as the tables include all cash flows relating to principal and future coupon payments, presented on an undiscounted basis. The tables have been prepared on the following basis: Financial assets have been reflected in the time band of the latest date on which they could be repaid, unless earlier repayment can be demanded by NatWest Group. Financial liabilities are included at the earliest date on which the counterparty can require repayment, regardless of whether or not such early repayment results in a penalty. If the repayment of a financial instrument is triggered by, or is subject to, specific criteria such as market price hurdles being reached, the asset is included in the time band that contains the latest date on which it can be repaid, regardless of early repayment. The liability is included in the time band that contains the earliest possible date on which the conditions could be fulfilled, without considering the probability of the conditions being met. For example, if a structured note is automatically prepaid when an equity index exceeds a certain level, the cash outflow will be included in the less than three months period, whatever the level of the index at the year end. The settlement date of debt securities in issue, issued by certain securitisation vehicles consolidated by NatWest Group, depends on when cash flows are received from the securitised assets. Where these assets are prepayable, the timing of the cash outflow relating to securities assumes that each asset will be prepaid at the earliest possible date. As the repayments of assets and liabilities are linked, the repayment of assets in securitisations is shown on the earliest date that the asset can be prepaid, as this is the basis used for liabilities. The principal amounts of financial assets and liabilities that are repayable after 20 years or where the counterparty has no right to repayment of the principal are excluded from the table, as are interest payments after 20 years. 12 Financial instruments - maturity analysis continued The maturity of guarantees and commitments is based on the earliest possible date they would be drawn in order to evaluate NatWest Group's liquidity position. MFVTPL assets of £125.1 billion (2022 - £145.8 billion) and HFT liabilities of £125.8 billion (2022 - £146.7 billion) have been excluded from the following tables. 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2023 £m £m £m £m £m £m Assets by contractual maturity up to 20 years Cash and balances at central banks 104,262 — — — — — Derivatives held for hedging 31 29 128 104 49 49 Settlement balances 7,231 — — — — — Loans to banks - amortised cost 5,234 1,437 23 302 — — Loans to customers - amortised cost 52,175 46,894 81,445 61,465 96,577 114,806 Other financial assets (1) 4,897 6,756 12,304 11,183 10,019 8,063 Finance lease 61 242 735 401 656 359 173,891 55,358 94,635 73,455 107,301 123,277 Liabilities by contractual maturity up to 20 years Bank deposits 8,334 1,279 6,069 8,307 — — Customer deposits 393,363 31,900 6,464 11 14 19 Settlement balances 6,645 — — — — — Derivatives held for hedging 71 175 366 192 92 8 Other financial liabilities 9,094 12,319 18,843 13,818 4,769 346 Subordinated liabilities 72 1,167 2,301 1,512 1,406 342 Other liabilities - Notes in circulation 3,237 — — — — — Lease liabilities 30 79 172 111 175 132 420,846 46,919 34,215 23,951 6,456 847 Guarantees and commitments - notional amount Guarantees (2) 2,820 — — — — — Commitments (3) 112,807 — — — — — 115,627 — — — — — For the notes to this table refer to the following page. 12 Financial instruments - maturity analysis continued 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2022 £m £m £m £m £m £m Assets by contractual maturity up to 20 years Cash and balances at central banks 144,832 — — — — — Derivatives held for hedging 130 345 28 41 (44) 43 Settlement balances 2,572 — — — — — Loans to banks - amortised cost 5,254 1,621 17 288 — — Loans to customers - amortised cost 50,923 43,417 76,278 55,128 85,038 100,085 Other financial assets (1) 2,771 4,507 8,391 7,835 5,706 2,524 Finance lease 96 267 857 482 549 296 206,578 50,157 85,571 63,774 91,249 102,948 Liabilities by contractual maturity up to 20 years Bank deposits 6,690 1,445 5,662 8,503 89 — Customer deposits 437,830 11,389 1,252 2 14 20 Settlement balances 2,012 — — — — — Derivatives held for hedging 280 (371) 586 306 116 85 Other financial liabilities 6,720 6,640 18,833 13,906 7,361 294 Subordinated liabilities 96 1,073 2,690 1,897 1,541 328 Other liabilities- Notes in circulation 3,218 — — — — — Lease liabilities 41 113 260 203 318 254 456,887 20,289 29,283 24,817 9,439 981 Guarantees and commitments - notional amount Guarantees (2) 3,150 — — — — — Commitments (3) 118,779 — — — — — 121,929 — — — — — (1) Other financial assets exclude equity shares. (2) NatWest Group is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations. NatWest Group expects most guarantees it provides to expire unused. (3) NatWest Group has given commitments to provide funds to customers under undrawn formal facilities, credit lines and other commitments to lend subject to certain conditions being met by the counterparty. NatWest Group does not expect all facilities to be drawn, and some may lapse before drawdown. |
Trading assets and liabilities
Trading assets and liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Trading assets and liabilities | |
Trading assets and liabilities | 13 Trading assets and liabilities Trading assets and liabilities comprise assets and liabilities held at fair value and classified as held-for-trading. Financial instruments are classified as held-for-trading if they are held for the purpose of selling or repurchasing them in the short term, to make a spread between purchase and sale price or held to take advantage of movements in prices and yields. For accounting policy information refer to Accounting policy 3.8. 2023 2022 Assets £m £m Loans Reverse repos 23,694 21,537 Collateral given 9,141 13,005 Other loans 762 1,113 Total loans 33,597 35,655 Securities Central and local government - UK 2,729 2,205 - US 2,600 2,345 - Other 3,062 2,799 Financial institutions and corporate 3,563 2,573 Total securities 11,954 9,922 Total 45,551 45,577 Liabilities Deposits Repos 26,902 23,740 Collateral received 15,075 17,680 Other deposits 1,150 1,067 Total deposits 43,127 42,487 Debt securities in issue 706 797 Short positions Central and local government - UK 1,893 2,313 - US 2,071 1,293 - Other 4,049 3,936 Financial institutions and Corporate 1,790 1,982 Total short positions 9,803 9,524 Total 53,636 52,808 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Derivatives | 14 Derivatives Derivative is a term covering a wide range of financial instruments that derive their fair value from an underlying rate or price, for example interest rates or exchange rates (the underlying). NatWest Group uses derivatives as a part of its trading activities, to manage its own risks such as interest rate, foreign exchange, or credit risk and in certain customer transactions. This note shows contracted volumes of derivatives, how they are used for hedging purposes and more specifically the effects of the application of hedge accounting. For accounting policy information refer to Accounting policies 3.8 and 3.11. Notional Asset Liability Traded on Traded on Traded on recognised Traded over recognised Traded over recognised Traded over exchanges the counter Total exchanges the counter Total exchanges the counter Total 2023 £bn £bn £bn £m £m £m £m £m £m Interest rate 819 9,449 10,268 48 44,515 44,563 34 38,449 38,483 - Swaps — 6,533 6,533 — 33,807 33,807 — 27,424 27,424 - Options 510 1,674 2,184 48 10,708 10,756 34 11,025 11,059 - Forwards and futures 309 1,242 1,551 — — — — — — Exchange rate 1 3,119 3,120 — 34,161 34,161 — 33,586 33,586 - Swaps — 449 449 — 8,173 8,173 — 7,370 7,370 - Options 1 674 675 — 4,181 4,181 — 4,197 4,197 - Spot, forwards and futures — 1,996 1,996 — 21,807 21,807 — 22,019 22,019 Credit — 15 15 — 180 180 — 326 326 Equity and commodity — — — — — — — — — Total 820 12,583 13,403 48 78,856 78,904 34 72,361 72,395 2022 Interest rate 707 10,035 10,742 113 53,367 53,480 33 48,502 48,535 - Swaps — 7,201 7,201 — 39,039 39,039 — 32,992 32,992 - Options 296 1,418 1,714 113 14,328 14,441 33 15,510 15,543 - Forwards and futures 411 1,416 1,827 — — — — — — Exchange rate 2 3,166 3,168 — 45,829 45,829 — 45,237 45,237 - Swaps — 438 438 — 11,840 11,840 — 10,430 10,430 - Options 2 835 837 — 6,375 6,375 — 6,647 6,647 - Spot, forwards and futures — 1,893 1,893 — 27,614 27,614 — 28,160 28,160 Credit — 15 15 — 236 236 — 275 275 Equity and commodity — — — — — — — — — Total 709 13,216 13,925 113 99,432 99,545 33 94,014 94,047 Included in the table above is the notional amount of £7,280 billion (2022 - £8,065 billion) of interest rate derivatives that are traded over the counter and settled through central clearing counterparties. NatWest Group has no other type of derivatives that are settled through central counterparties. Hedge accounting using derivatives NatWest Group applies hedge accounting to reduce the accounting mismatch caused in the income statement by using derivatives to hedge the following risks: interest rate, foreign exchange and the foreign exchange risk associated with net investment in foreign operations. 14 Derivatives continued NatWest Group’s interest rate hedging relates to the management of NatWest Group’s non-trading structural interest rate risk, caused by the mismatch between fixed interest rates and floating interest rates on its financial instruments. NatWest Group manages this risk within approved limits. Residual risk positions are hedged with derivatives, principally interest rate swaps. Cash flow hedges of interest rate risk relate to exposures to the variability in future interest payments and receipts due to the movement of interest rates on forecast transactions and on financial assets and financial liabilities. This variability in cash flows is hedged by interest rate swaps, which convert variable cash flows into fixed. For these cash flow hedge relationships, the hedged items are actual and forecast variable interest rate cash flows arising from financial assets and financial liabilities with interest rates linked to the relevant interest rates, most notably SOFR, EURIBOR, the European Central Bank deposit rate, SONIA and the Bank of England Official Bank Rate. The variability in cash flows due to movements in the relevant interest rate is hedged; this risk component is identified using the risk management systems of NatWest Group and encompasses the majority of cash flow variability risk. Suitable larger fixed rate financial instruments are subject to fair value hedging in line with documented risk management strategies. Fair value hedges of interest rate risk involve interest rate swaps transforming the fixed interest rate risk in financial assets and financial liabilities to floating. The hedged risk is the risk of changes in the hedged item’s fair value attributable to changes in the interest rate risk component of the hedged item. The significant interest rates identified as risk components are SOFR, EURIBOR, ESTR and SONIA. These risk components are identified using the risk management systems of NatWest Group and encompass the majority of the hedged item’s fair value risk. NatWest Group hedges the exchange rate risk of its net investment in foreign currency denominated operations with currency borrowings and forward foreign exchange contracts. NatWest Group reviews the value of the investments’ net assets, executing hedges where appropriate to reduce the sensitivity of capital ratios to foreign exchange rate movement. Hedge accounting relationships will be designated where required. Exchange rate risk also arises in NatWest Group where payments are denominated in currencies other than the functional currency. Residual risk positions are hedged with foreign exchange derivatives, fixing the exchange rate the payments will be settled in. The derivatives are documented as cash flow hedges. For all cash flow hedging, fair value hedge relationships and net investment hedging, NatWest Group determines that there is an economic relationship between the hedged item and hedging instrument via assessing the initial and ongoing effectiveness by comparing movements in the fair value of the expected highly probable forecast interest cash flows/fair value of the hedged item attributable to the hedged risk with movements in the fair value of the expected changes in cash flows from the hedging instrument. The method used for comparing movements is either regression testing, or the dollar offset method. The method for testing effectiveness and the period over which the test is performed depends on the applicable risk management strategy and is applied consistently to each risk management strategy. Hedge effectiveness is assessed on a cumulative basis and the determination of effectiveness is in line with the requirements of IAS 39. NatWest Group uses either the actual ratio between the hedged item and hedging instrument(s) or one that minimises hedge ineffectiveness to establish the hedge ratio for hedge accounting. Hedge ineffectiveness is measured in line with the requirements of IAS 39 and recognised in the income statement as it arises. Derivatives in hedge accounting relationships Included in the table below are derivatives held for hedging purposes as follows. 2023 2022 Changes in fair Changes in fair value used for value used for Notional Assets Liabilities hedge ineffectiveness (1) Notional Assets Liabilities hedge ineffectiveness (1) £bn £m £m £m £bn £m £m £m Fair value hedging Interest rate contracts (2) 67.6 1,139 2,607 406 58.7 1,554 3,009 482 Cash flow hedging Interest rate contracts 140.0 1,924 4,970 1,211 167.6 2,681 6,207 (3,342) Exchange rate contracts 16.9 112 254 (12) 6.3 142 112 (3) Net investment hedging Exchange rate contracts 0.3 2 7 (3) 0.5 1 9 4 224.8 3,177 7,838 1,602 233.1 4,378 9,337 (2,859) IFRS netting and clearing house settlements (3,063) (7,568) (4,235) (9,205) 114 270 143 132 (1) The change in fair value used for hedge ineffectiveness includes instruments that were derecognised in the year. (2) The hedged risk includes inflation risk. 14 Derivatives continued Hedge ineffectiveness Hedge ineffectiveness recognised in other operating income comprises. 2023 2022 2021 £m £m £m Fair value hedging Loss on hedged items attributable to the hedged risk (364) (442) (846) Gain on the hedging instruments 406 482 897 Fair value hedging ineffectiveness 42 40 51 Cash flow hedging Interest rate risk 10 (60) (26) Cash flow hedging ineffectiveness 10 (60) (26) Total 52 (20) 25 The main sources of ineffectiveness for interest rate risk hedge accounting relationships are: - The effect of the counterparty credit risk on the fair value of the interest rate swap which is not reflected in the fair value of the hedged item attributable to the change in interest rate (fair value hedge). - Differences in the repricing basis between the hedging instrument and hedged cash flows (cash flow hedge); and - Upfront present values on the hedging derivatives where hedge accounting relationships have been designated after the trade date (cash flow hedge and fair value hedge). 14 Derivatives continued Maturity of notional hedging contracts The following table shows the period in which the notional of hedging contract ends. 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years Over 10 years Total 2023 £bn £bn £bn £bn £bn £bn £bn Fair value hedging Interest rate risk (1) Hedging assets 0.1 1.7 7.1 9.0 5.9 4.7 28.5 Hedging liabilities 2.7 3.3 13.4 11.3 7.7 0.7 39.1 2022 Fair value hedging Interest rate risk (1) Hedging assets 0.5 1.9 4.7 4.9 4.2 3.6 19.8 Hedging liabilities 1.0 2.9 14.6 10.3 9.6 0.5 38.9 2023 Cash flow hedging Interest rate risk Hedging assets 3.9 14.5 33.9 22.8 10.1 — 85.2 Hedging liabilities 0.8 3.9 39.1 10.1 0.3 0.6 54.8 Exchange rate risk Hedging assets 0.3 0.7 1.6 — — — 2.6 Hedging liabilities 8.4 0.8 2.4 2.5 0.2 — 14.3 2022 Cash flow hedging Interest rate risk Hedging assets 6.6 9.4 46.5 21.9 10.1 — 94.5 Hedging liabilities 17.3 26.8 15.7 5.1 7.5 0.7 73.1 Exchange rate risk Hedging assets 0.1 — — — — — 0.1 Hedging liabilities — 1.1 2.8 2.1 0.2 — 6.2 (1) The hedged risk includes inflation risk. 14 Derivatives continued Average fixed interest rates The following table shows average fixed rate for cash flow hedges, interest rate risk. 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years Over 10 years Total 2023 % % % % % % % Average fixed interest rate Hedging assets 1.16 2.46 1.19 3.30 1.77 3.12 2.04 Hedging liabilities 0.93 2.54 4.36 2.28 2.36 4.50 3.79 2022 Average fixed interest rate Hedging assets 1.36 1.98 1.71 2.04 1.02 3.12 1.72 Hedging liabilities 1.27 0.95 2.75 1.03 2.68 4.55 1.63 Average foreign exchange rates For cash flow hedging of exchange rate risk, the average foreign exchange rates applicable across the relationships were as below for the main currencies hedged. 2023 2022 INR/GBP 105.03 100.54 USD/GBP 1.28 1.29 CHF/GBP 1.08 1.15 JPY/GBP 170.54 132.89 JPY/USD 129.75 128.29 NOK/USD 9.21 9.21 14 Derivatives continued Analysis of hedged items and related hedging instruments The table below analyses assets and liabilities subject to hedging derivatives. Changes in fair Carrying value Impact on value used as of hedged hedged items a basis to assets and included in determine liabilities carrying value ineffectiveness (1) 2023 £m £m £m Fair value hedging - interest rate (2) Loans to banks and customers - amortised cost 5,663 (316) 167 Other financial assets - securities 22,896 174 636 Total 28,559 (142) 803 Bank and customer deposits 745 (3) (6) Other financial liabilities - debt securities in issue 36,305 (1,151) (1,023) Subordinated liabilities 5,346 (320) (138) Total 42,396 (1,474) (1,167) 2022 Fair value hedging - interest rate (2) Loans to banks and customers - amortised cost 5,764 (526) (1,236) Other financial assets - securities 12,897 (922) (2,525) Total (3) 18,661 (1,448) (3,761) Bank and customer deposits 565 (3) 3 Other financial liabilities - debt securities in issue 35,856 (2,222) 2,790 Subordinated liabilities 5,504 (547) 526 Total 41,925 (2,772) 3,319 For the notes to this table refer to the following page. 14 Derivatives continued Changes in fair value Carrying value of used as a basis to hedged assets and liabilities determine ineffectiveness (1) 2023 £m £m Cash flow hedging - interest rate Loans to banks and customers - amortised cost (4) 84,583 (2,796) Other financial assets - securities 623 (22) Total 85,206 (2,818) Bank and customer deposits 54,675 1,610 Other financial liabilities - debt securities in issue 156 7 Total 54,831 1,617 Cash flow hedging - exchange rate Loans to banks and customers - amortised cost (4) 583 — Other financial assets - securities 1,839 — Total 2,422 — Other financial liabilities - debt securities in issue 11,460 9 Subordinated liabilities — — Other 201 3 Total 11,661 12 2022 Cash flow hedging - interest rate Loans to banks and customers - amortised cost (4) 93,212 5,263 Other financial assets - securities 1,176 73 Total 94,388 5,336 Bank and customer deposits 72,610 (2,008) Other financial liabilities - debt securities in issue 571 (46) Total 73,181 (2,054) Cash flow hedging - exchange rate Loans to banks and customer - amortised cost (4) — — Other financial assets - securities — — Total — — Other financial liabilities - debt securities in issue 4,141 (2) Subordinated liabilities — — Other 204 5 Total 4,345 3 (1) The change in fair value used for hedge ineffectiveness includes instruments that were derecognised in the year. (2) The hedged risk includes inflation risk. (3) Carrying values include £ 57 million (2022 - £ 61 million) adjustment for discontinued fair value hedges. (4) Includes cash and balances at central banks. 14 Derivatives continued Analysis of cash flow and foreign exchange hedge reserve The following table shows an analysis of the pre-tax cash flow hedge reserve and foreign exchange hedge reserve. 2023 2022 Foreign Foreign Cash flow exchange Cash flow exchange hedge reserve hedge reserve hedge reserve hedge reserve £m £m £m £m Continuing Interest rate risk (2,330) — (3,576) — Foreign exchange risk 1 (18) 16 (85) De-designated Interest rate risk (304) — (297) — Foreign exchange risk 4 (771) 20 (880) Total (2,629) (789) (3,837) (965) 2023 2022 Foreign Foreign Cash flow exchange hedge Cash flow exchange hedge hedge reserve reserve hedge reserve reserve £m £m £m £m Amount recognised in equity Interest rate risk 137 — (2,997) (64) Foreign exchange risk 50 107 24 (202) Total 187 107 (2,973) (266) Amount transferred from equity to earnings Interest rate risk to net interest income 1,112 — (252) — Interest rate risk to non interest income (1) (10) — (21) — Interest rate risk to operating expenses — — (14) — Foreign exchange risk to net interest income (74) — (29) — Foreign exchange risk to non interest income (9) 69 15 7 Foreign exchange risk to operating expenses 2 — (3) — Total 1,021 69 (304) 7 (1) There was £10 million (2022 - £21 million) reclassified with the cash flow reserve to earnings due to forecasted cash flows that are no longer expected to occur. |
Loan impairment provisions
Loan impairment provisions | 12 Months Ended |
Dec. 31, 2023 | |
Loan impairment provisions | |
Loan impairment provisions | 15 Loan impairment provisions There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, known as expected credit losses (ECL). The calculation of ECL considers historic, current and forward-looking information to determine the amount we do not expect to recover. ECL is recognised on current and potential exposures, and contingent liabilities. For accounting policy information refer to Accounting policy 2.3. Further disclosures on credit risk and information on ECL methodology are shown from page 171 (exhibit 15.2). Loan exposure and impairment metrics The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit losses framework. 2023 2022 £m £m Loans - amortised cost and FVOCI Stage 1 348,586 325,224 Stage 2 37,891 46,833 Stage 3 5,563 5,096 Of which: individual 1,031 1,121 Of which: collective 4,532 3,975 392,040 377,153 ECL provisions (1) - Stage 1 709 632 - Stage 2 976 1,043 - Stage 3 1,960 1,759 Of which: individual 332 287 Of which: collective 1,628 1,472 3,645 3,434 ECL provision coverage (2) - Stage 1 (%) 0.20 0.19 - Stage 2 (%) 2.58 2.23 - Stage 3 (%) 35.23 34.52 0.93 0.91 Continuing operations Impairment (releases)/losses ECL (release)/charge (3,4) 578 337 Stage 1 (397) (290) Stage 2 645 393 Stage 3 330 234 Of which: individual 89 54 Of which: collective 241 180 Amounts written off 319 482 Of which: individual 42 168 Of which: collective 277 314 (1) Includes loans to customers and banks. (2) Includes £ 9 million (2022 - £3 million) related to assets classified as FVOCI and £ 0.1 billion (2022 - £0.1 billion) related to off-balance sheet exposures. (3) ECL provisions coverage is calculated as ECL provisions divided by loans – amortised cost and FVOCI. It is calculated on loans and total ECL provisions, including ECL for other (non-loan) assets and unutilised exposure. Some segments with a high proportion of debt securities or unutilised exposure may result in a not meaningful coverage ratio. (4) Includes a £ 16 million release (2022 - £3 million charge) related to other financial assets, of which £6 million charge (2022 - nil ) related to assets classified as FVOCI; and £ 9 million release (2022 - £5 million release) 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 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 £103.1 billion (2022 – £143.3 billion) and debt securities of £50.1 billion (2022 – £29.9 billion). 15 Loan impairment provisions continued Credit risk enhancement and mitigation For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management – Credit risk enhancement and mitigation section. Critical accounting policy: Loan impairment provisions Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2023, customer loan impairment provisions amounted to £3,645 million (2022 - £3,434 million). A loan is impaired when there is objective evidence that the cash flows will not occur in the manner expected when the loan was advanced. Such evidence includes, changes in the credit rating of a borrower, the failure to make payments in accordance with the loan agreement, significant reduction in the value of any security, breach of limits or covenants, and observable data about relevant macroeconomic measures. The impairment loss is the difference between the carrying value of the loan and the present value of estimated future cash flows at the loan's original effective interest rate. The measurement of credit impairment under the IFRS expected loss model depends on management's assessment of any potential deterioration in the creditworthiness of the borrower, its modelling of expected performance and the application of economic forecasts. All three elements require judgements that are potentially significant to the estimate of impairment losses. For further information and sensitivity analysis, refer to Risk and capital management - Measurement uncertainty and ECL sensitivity analysis section. IFRS 9 ECL model design principles Refer to Credit risk – IFRS 9 ECL model design principles section for further details. Approach for multiple economic scenarios (MES) The base scenario plays a greater part in the calculation of ECL than the approach to MES. Refer to Credit risk - Economic loss drivers - Probability weightings of scenarios section for further details. |
Other financial assets
Other financial assets | 12 Months Ended |
Dec. 31, 2023 | |
Other financial assets | |
Other financial assets | 16 Other financial assets Other financial assets consist of debt securities, equity shares and loans that are not held for trading. Balances consist of local and central government securities, a component part of NatWest Group’s liquidity portfolio. For accounting policy information refer to Accounting policy 3.8. Debt securities Central and local government Other Equity UK US Other debt Total shares Loans Total 2023 £m £m £m £m £m £m £m £m Mandatory fair value through profit or loss — — — 1 1 2 700 703 Designated at fair value — — 3 2 5 — — 5 Fair value through other comprehensive income (1) 6,441 5,517 5,738 10,627 28,323 311 65 28,699 Amortised cost 2,889 647 35 18,124 21,695 — — 21,695 Total 9,330 6,164 5,776 28,754 50,024 313 765 51,102 2022 Mandatory fair value through profit or loss — — — 2 2 3 782 787 Designated at fair value — — — — — — — — Fair value through other comprehensive income (1) 802 7,175 1,757 6,765 16,499 357 117 16,973 Amortised cost 2,562 937 54 9,582 13,135 — — 13,135 Total 3,364 8,112 1,811 16,349 29,636 360 899 30,895 (1) Upon initial recognition, NatWest Group occasionally irrevocably designates some of its equity investments as equity instruments at FVOCI when they meet the definition of equity under IAS 32 Financial instruments: presentation, are not held for trading or they are held for strategic purposes. Such classification is determined on an instrument-by-instrument basis. Gains and losses on these equity instruments are not recycled to the income statement and dividends are recognised in profit or loss except when they represent a recovery of part of the cost of the instrument, in which case such gains are recorded in OCI. Equity instruments at FVOCI are not subject to an impairment assessment. There were no significant acquisitions of equity shares in the year. In 2022, NatWest Group acquired £146 million of equity shares in Permanent TSB p.l.c as part consideration on the sale of certain assets and £26 million of equity shares in Vodeno Limited. NatWest Group disposed of equity shares in Permanent TSB p.l.c of £47 million and UBS Equity Funds of £35 million in the year. In 2022, NatWest Group disposed of equity shares in Visa Inc. of £99 million and UBS Equity Funds of £69 million. There were no significant dividends on equity shares held at FVOCI in either year. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets | |
Intangible assets | 17 Intangible assets Intangible assets, such as internally generated software and goodwill generated on business combinations, are not physical in nature. This note presents the cost of the assets, which is the amount NatWest Group initially paid or incurred, additions and disposals during the year, and any amortisation or impairment. Amortisation is a charge that reflects the usage of the asset and impairment is a reduction in value arising from specific events identified during the year. For accounting policy information refer to Accounting policies 3.4 and 3.5. 2023 2022 Goodwill Other (1) Total Goodwill Other (1) Total Cost £m £m £m £m £m £m At 1 January 9,931 3,763 13,694 9,939 3,050 12,989 Currency translation and other adjustments — — — (8) (3) (11) Acquisitions of companies and businesses 159 37 196 — — — Additions — 762 762 — 743 743 Disposals and write-off of fully amortised assets — (115) (115) — (27) (27) At 31 December 10,090 4,447 14,537 9,931 3,763 13,694 Accumulated amortisation and impairment At 1 January 4,409 2,169 6,578 4,417 1,849 6,266 Currency translation and other adjustments — — — (8) (4) (12) Disposals and write-off of fully amortised assets — (116) (116) — (17) (17) Impairment of intangible assets 1 22 23 — — — Amortisation charge for the year — 438 438 — 341 341 At 31 December 4,410 2,513 6,923 4,409 2,169 6,578 Net book value at 31 December 5,680 1,934 7,614 5,522 1,594 7,116 (1) Principally consists of internally generated software. Intangible assets and goodwill are reviewed for indicators of impairment. NatWest Group’s goodwill acquired in business combinations is reviewed for impairment annually at 31 December by cash-generating unit (CGU): 2023 - Retail Banking £2,607 million (2022 - £2,607 million), Ring-Fenced Bank Commercial & Institutional £2,605 million (2022 - £2,606 million), Private Banking £9 million (2022 - £9 million), RBS International £300 million (2022 - £300 million), and Cushon £159 million (2022 - nil). Our CGUs represent the smallest group of assets to which we have allocated goodwill and reflect the lowest level at which we monitor goodwill post acquisition. For Cushon and RBS International this is at an entity level which represents the lowest level applicable to the business combination and their cash flows are independent of other CGUs. Analysis by reportable segment is in Note 4 Segmental analysis. Impairment testing involves the comparison of the carrying value of each CGU with its recoverable amount. The carrying values of the segments reflect the equity allocations made by management, which are consistent with NatWest Group’s capital targets. Recoverable amount is the higher of fair value less costs of disposal and value in use. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants. Value in use is the present value of expected future cash flows from the CGU. The recoverable amounts for all CGUs at 31 December 2023 were based on value in use, using management's latest five-year revenue and cost forecasts. These are discounted cash flow projections over five years. The forecast is then extrapolated in perpetuity using a long-term growth rate to compute a terminal value, which comprises the majority of the value in use. The long-term growth rates have been based on expected growth of the CGUs (2022 and 2023 - 1.4%). The 2023 pre-tax risk discount rates are based on those observed to be applied to businesses regarded as peers of the CGUs: Retail Banking – 16% (2022 - 15.3%), Ring-Fenced Bank Commercial & Institutional – 16% (2022 - 15.3 %), Private Banking – |
Other assets
Other assets | 12 Months Ended |
Dec. 31, 2023 | |
Other assets | |
Other assets | 18 Other assets Other assets are not financial assets and reflect a grouping of assets that are not large enough to present separately on the balance sheet. 2023 2022 £m £m Interests in associates (1) 668 688 Property, plant and equipment (2) 4,227 4,240 Pension schemes in net surplus (Note 5) 201 318 Prepayments 350 340 Accrued income 292 327 Tax recoverable 49 279 Deferred tax (Note 7) 1,894 2,178 Acceptances 575 237 Other 504 569 Other assets 8,760 9,176 (1) Includes interest in Business Growth Fund £ 658 million (2022 - £677 million). (2) The estimated useful lives of NatWest Group's property, plant and equipment are: freehold buildings and long leasehold 50 years , short leaseholds for unexpired period of lease, property adaptation costs 10 to 15 years , computer equipment up to 5 years and other equipment 4 to 15 years . |
Other financial liabilities
Other financial liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Other financial liabilities | |
Other financial liabilities | 19 Other financial liabilities Other financial liabilities consist of customer deposits designated at fair value and debt securities in issue. For accounting policy information refer to Accounting policies 3.8 and 3.10. 2023 2022 £m £m Customer deposits - designated as at fair value through profit or loss 1,280 1,050 Debt securities in issue - MRELs 21,660 22,265 - Other medium term notes 17,843 16,419 - Commercial paper and certificates of deposit 11,321 5,672 - Covered bonds 2,122 2,842 - Securitisation 863 859 Total 55,089 49,107 |
Subordinated liabilities
Subordinated liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Subordinated liabilities | |
Subordinated liabilities | 20 Subordinated liabilities Subordinated liabilities are debt securities that, in the event of winding up or bankruptcy, rank below other liabilities for interest payments and repayment. For accounting policy information refer to Accounting policies 3.8 and 3.10. 2023 2022 £m £m Dated loan capital 5,573 5,968 Undated loan capital 22 173 Preference shares 119 119 5,714 6,260 Certain preference shares issued by the company are classified as liabilities; these securities remain subject to the capital maintenance rules of the Companies Act 2006. First call Maturity Capital 2023 2022 Dated loan capital date date treatment £m £m NatWest Group plc $2,250 million 5.125% notes — May-24 Tier 2 418 706 $2,000 million 6.000% notes — Dec-23 Tier 2 — 536 £1,000 million 3.622% notes May-25 Aug-30 Tier 2 985 964 £1,000 million 2.105% notes Aug-26 Nov-31 Tier 2 1,000 1,001 $1,000 million 6.100% notes — Jun-23 Tier 2 — 126 $850 million 3.032% notes Aug-30 Nov-35 Tier 2 541 555 €750 million 1.043% notes Jun-27 Sep-32 Tier 2 652 665 $750 million 3.754% notes Nov-24 Nov-29 Tier 2 592 626 €700 million 5.763% notes Nov-28 Feb-34 Tier 2 636 £650 million 7.416% notes Mar-28 Jun-33 Tier 2 657 641 5,481 5,820 Other subsidiaries €170 million Floating rate notes — Feb-41 Not applicable 237 223 $150 million 7.125% notes — Oct-93 Not applicable 17 18 €145.6 million Floating rate notes — Apr-23 Tier 2 — 122 $136 million 7.750% notes — May-23 Not applicable — 83 5,735 6,266 Fair value hedging (162) (298) 5,573 5,968 Undated loan capital Other subsidiaries £35 million 11.500% notes Dec-22 — Not applicable — 72 £31 million 7.380% notes — — Not applicable 1 2 €31 million 11.375% notes — — Tier 2 — 48 £16 million 5.630% notes Sep-26 — Not applicable 18 18 £11 million 11.750% notes — — Tier 2 — 25 £4.9 million 2.500% fixed notes — — Not applicable 3 6 £1.1 million SONIA + 2.827% notes — — Tier 2 — 2 22 173 Preference shares Other subsidiaries £140 million Non-cumulative preference shares of £1 — — Not applicable 119 119 119 119 Total 5,714 6,260 (1) Notes redeemed before call date as tax and regulatory benefits discontinued. . |
Other liabilities
Other liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Other liabilities. | |
Other liabilities | 21 Other liabilities Other liabilities are amounts due to third parties that are not financial liabilities including lease liabilities, amounts due for goods and services that have been received but not invoiced, tax due to HMRC, and retirement benefit liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost to settle them are included in other liabilities as provisions for liabilities and charges. 2023 2022 Other liabilities £m £m Lease liabilities 670 1,118 Provisions for liabilities and charges 990 1,138 Retirement benefit liabilities (Note 5) 99 98 Accruals 1,411 1,407 Deferred income 402 355 Current tax 332 55 Deferred tax (Note 7) 141 227 Acceptances 575 237 Other liabilities (1) 582 711 Total 5,202 5,346 (1) Other liabilities include liabilities of disposal groups of £ 3 million (2022 - £ 15 million). Refer to Note 8 for further information. Litigation Customer and other Commitments redress regulatory Property and guarantees Other (1) Total Provisions for liabilities and charges £m £m £m £m £m £m At 1 January 2023 431 240 154 87 226 1,138 Expected credit loss impairment release — — — (9) — (9) Currency translation and other movements (5) (9) — — (6) (20) Charge to income statement 276 21 41 — 136 474 Release to income statement (36) (33) (64) — (28) (161) Provisions utilised (180) (63) (32) — (157) (432) At 31 December 2023 486 156 99 78 171 990 (1) 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. For accounting policy information refer to Accounting policy 2.4. Critical accounting policy: Provisions for liabilities The key judgement is involved in determining whether a present obligation exists. There is often a high degree of uncertainty and judgement is based on the specific facts and circumstances relating to individual events in determining whether there is a present obligation. Judgement is also involved in estimation of the probability, timing and amount of any outflows. Where NatWest Group can look to another party such as an insurer to pay some or all of the expenditure required to settle a provision, any reimbursement is recognised when, and only when, it is virtually certain that it will be received. Estimates 21 Other liabilities Continued Any difference between the final outcome and the amounts provided will affect the reported results in the period when the matter is resolved. - Customer redress: Provisions reflect the estimated cost of redress attributable to claims where it is determined that a present obligation exists. - Litigation and other regulatory: NatWest Group is engaged in various legal proceedings, both in the UK and in overseas jurisdictions, including the US. For further information in relation to legal proceedings and discussion of the associated uncertainties, refer to Note 26. - Property: This includes provision for contractual costs associated with vacant properties. - Other provisions: These materially comprise provisions for onerous contracts and restructuring costs. Onerous contract provisions comprise an estimate of the costs involved in fulfilling the terms and conditions of contracts net of any expected benefits to be received. This includes provision for contractual costs associated with vacant properties. Redundancy and restructuring provisions comprise the estimated cost of restructuring, including redundancy costs where an obligation exists. Background information for all material provisions is given in Note 26. |
Share capital and other equity
Share capital and other equity | 12 Months Ended |
Dec. 31, 2023 | |
Share capital and other equity | |
Share capital and other equity | 22 Share capital and other equity Share capital consists of ordinary shares and preference shares and is measured as the number of shares allotted and fully paid, multiplied by the nominal value of a share. Other equity includes paid-in equity, merger reserve, capital redemption reserve and own shares held. For accounting policy information refer to Accounting policy 3.10. Number of shares 2023 2022 2023 2022 Allotted, called up and fully paid £m £m 000s 000s Ordinary shares of £1.0769 (1) 9,683 10,539 8,991,737 9,786,024 Cumulative preference shares of £1 0.5 0.5 483.0 483.0 (1) The nominal value of ordinary shares without rounding is £1.076923076923077 per share. Number of Movement in allotted, called up and fully paid ordinary shares £m shares 000s At 1 January 2022 11,468 11,467,982 Share cancellation (929) (929,188) Share consolidation — (752,770) At 31 December 2022 10,539 9,786,024 Share cancellation (856) (794,287) At 31 December 2023 9,683 8,991,737 Ordinary shares There is no authorised share capital under the company’s constitution. At 31 December 2023, the directors had authority granted at the 2023 Annual General Meeting (AGM) to issue up to £520,573,270 nominal of ordinary shares other than by pre-emption to existing shareholders. 22 Share capital and other equity continued On-market purchases At the AGM in 2022, shareholders authorised the company to make market purchases of up to 1,122,905,024 ordinary shares. The authority was amended at the General Meeting held on 25 August 2022 to preserve the position as if the August 2022 share consolidation had not taken place. The directors used the authority obtained at the 2022 AGM (2022 Authority) to carry out a share buyback programme (Programme) of up to £800 million, as announced to the market on 17 February 2023. The Programme's purpose is to reduce the ordinary share capital of NatWest Group. The maximum number of ordinary shares that could be purchased under the Programme was 966,284,391. This number reflects the impact on the 2022 Authority of the reduction in issued share capital following the off-market buyback announced on 28 March 2022. The Programme commenced on 20 February 2023 and completed on 16 June 2023. The company purchased 301,380,053 ordinary shares (nominal value £324,563,134) at an average price of 265.4456 pence per ordinary share, for the total consideration of £799,999,997.76. All of the purchased ordinary shares were cancelled, representing 3.16% of the company's issued ordinary share capital. At the AGM in 2023, shareholders renewed the authority for the company to make market purchases of up to 966,778,930 ordinary shares. The directors used the authority obtained at the 2023 AGM (2023 Authority) to carry out a Programme of up to £500 million, as announced to the market on 28 July 2023. The maximum number of ordinary shared that can be purchased under the Programme is 919,858,922. This number reflects the impact on the 2023 Authority of the reduction in issued share capital following the off-market buyback announced on 22 May 2023. The Programme commenced on 31 July 2023 and will end no later than 14 March 2024. As at 31 December 2023 158,956,435 ordinary shares (nominal value £171,183,853) had been purchased by the company at an average price of 217.6375 pence per ordinary share for the total consideration of £345,948,738. All of the purchased ordinary shares were cancelled, representing 1.75% of the company's issued ordinary share capital. Shareholders will be asked to renew the authority for the company to make market purchases of ordinary shares at the AGM in 2024. Off-market purchases At a General Meeting held on 6 February 2019, shareholders approved a special resolution authorising the company to make off-market purchases of up to 4.99% of its issued ordinary share capital in any 12-month period from HMT (or its nominee). Full details are set out in the Circular and Notice of General Meeting available at natwestgroup.com. Amendments to the Directed Buyback Contract were approved by the shareholders at a General Meeting on 25 August 2022. The authority for the company to make off-market purchases of its ordinary shares from HMT (or its nominee) under the terms of the Directed Buyback Contract was renewed at the AGM in 2023. The company used the authority obtained at the 2023 AGM to make an off-market purchase of 469,200,081 ordinary shares (nominal value £505,292,395) in the company from HMT on 22 May 2023, at a price of 268.4 pence per ordinary share for the total consideration of £1,259,333,017, representing 4.95% of the company’s issued ordinary share capital. The company cancelled 336,200,081 of the purchased ordinary shares and transferred the remaining 133,000,000 ordinary shares to own shares held. Shareholders will be asked to renew the authority for the company to make off-market purchases of its ordinary shares from HMT (or its nominee) at the AGM in 2024. Dividends In 2023 NatWest Group paid an interim dividend of £491 million, or 5.5 pence per ordinary share (2022 – £364 million, or 3.5 pence per ordinary share). The company has announced that the directors have recommended a final dividend of £1.0 billion, or 11.5 pence per ordinary share (2022 – £1.0 billion, or 10.0 pence per ordinary share). The final dividend recommended by directors is subject to shareholders’ approval at the AGM on 23 April 2024. If approved, payment will be made on 29 April 2024 to shareholders on the register at the close of business on 15 March 2024. The ex-dividend date will be 14 March 2024. Cumulative preference shares At the AGM in 2023, shareholders renewed the authority for the company to make an off-market purchase of its preference shares. Shareholders will be asked to renew the authority at the AGM in 2024. 22 Share capital and other equity continued Other equity 2023 2022 2021 £m £m £m Additional Tier 1 notes US$1.15 billion 8.000% notes callable August 2025 (1) 735 735 735 US$1.50 billion 6.000% notes callable December 2025 - June 2026 (2) 1,220 1,220 1,220 GBP£1.00 billion 5.125% notes callable May - November 2027 (3) 998 998 998 GBP£0.40 billion – March 2028 callable (4) 399 399 399 US$0.75 billion – June 2031 callable (5) 538 538 538 3,890 3,890 3,890 (1) Issued in August 2015. In the event of conversion, converted into ordinary shares at a price of $3.314 per share. (2) Issued in June 2020. In the event of conversion, converted into ordinary shares at a price of $2.191 (translated at applicable exchange rate) per share. (3) Issued in November 2020. In the event of conversion, converted into ordinary shares at a price of £ 1.764 per share. (4) Issued in March 2021. In the event of conversion, converted into ordinary shares at a price of £ 1.764 per share. (5) Issued in June 2021. In the event of conversion, converted into ordinary shares at a price of $2.462 (translated at applicable exchange rate) per share. Paid-in equity - Additional Tier 1 instruments issued by NatWest Group plc having the legal form of debt are classified as equity under IFRS. The coupons on these instruments are non-cumulative and payable at the company’s discretion. In the event NatWest Group’s CET1 ratio falls below 7% any outstanding instruments will be converted into ordinary shares at a fixed price. Capital recognised for regulatory purposes cannot be redeemed without Prudential Regulation Authority consent. This includes ordinary shares, preference shares and additional Tier 1 instruments. Merger reserve - Capital redemption reserve - Own shares held - As part of the shares bought back from HMT in March 2021 and May 2023, the company transferred 200 million ordinary shares and 133 million ordinary shares, respectively, to own shares held. The company has used a total of 146 million treasury shares to satisfy the exercise of options and the vesting of share awards under the employee share plans. The balance of ordinary shares held in treasury as at 31 December 2023 was 187 million. NatWest Group plc optimises capital efficiency by maintaining reserves in subsidiaries, including regulated entities. Certain preference shares and subordinated debt are also included within regulatory capital. The remittance of reserves to the company or the redemption of shares or subordinated capital by regulated entities may be subject to maintaining the capital resources required by the relevant regulator. UK law prescribes that only the reserves of the company are taken into account for the purpose of making distributions and in determining permissible applications of the share premium account. |
Structured entities
Structured entities | 12 Months Ended |
Dec. 31, 2023 | |
Structured entities | |
Structured entities | 23 Structured entities A structured entity (SE) is an entity that has been designed such that voting or similar rights are not the dominant factor in deciding who controls the entity, for example when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. SEs are usually established for a specific, limited purpose. They do not carry out a business or trade and typically have no employees. Securitisations In a securitisation, assets, or interests in a pool of assets, are transferred, or the credit risk is transferred via a derivative or financial guarantee to a SE which then issues liabilities to third party investors. NatWest Group’s involvement in client securitisations takes a number of forms. It may provide secured finance to, or purchase asset-backed notes from, client sponsored SEs secured on assets transferred by the client entity; purchase asset backed securities issued by client sponsored SEs in the primary or secondary markets; or provide liquidity facilities to client sponsored SEs. In addition, NatWest Group arranges or acts as lead manager or placement agent in client primary markets securitisations. NatWest Group provides portfolio structured derivative hedging solutions to clients. NatWest Group undertakes own-asset securitisations to transfer the credit risk on portfolios of financial assets. Other credit risk transfer securitisations NatWest Group transfers credit risk on originated loans and mortgages without the transfer of assets to a SE. As part of this, NatWest Group enters into credit derivative and financial guarantee contracts with consolidated SEs. At 31 December 2023, debt securities in issue by such SEs (and held by third parties) were £863 million (2022 – £859 million). The associated loans and mortgages at 31 December 2023 were £2,687 million (2022 - £4,361 million). At 31 December, ECL in relation to non-defaulted assets was reduced by £11 million (2022 - £20 million) as a result of financial guarantee contracts with consolidated SEs. Covered debt programme Group companies have assigned loans to customers and debt investments to bankruptcy remote limited liability partnerships to provide security for issues of debt securities. NatWest Group retains all of the risks and rewards of these assets and continues to recognise them. The partnerships are consolidated by NatWest Group and the related covered bonds included within other financial liabilities. At 31 December 2023, £11,067 million (2022 - £8,156 million) of loans to customers provided security for debt securities in issue and other borrowing of £3,619 million (2022 - £4,132 million). Lending of own issued securities NatWest Group has issued, retained, and lent debt securities under securities lending arrangements. Under standard terms in the UK and US markets, the recipient has an unrestricted right to sell or repledge collateral, subject to returning equivalent securities on maturity of the transaction. NatWest Group retains all of the risks and rewards of own issued liabilities lent under such arrangements and does not recognise them. At 31 December 2023, £2,312 million (2022 - £2,419 million) of secured own issued liabilities have been retained and lent under securities lending arrangements. At 31 December 2023, £ 2,414 million (2022 - £2,244 million) of loans and other debt instruments provided security for secured own issued liabilities that have been retained and lent under securities lending arrangements. 23 Structured entities continued Unconsolidated structured entities The term 'unconsolidated structured entities' refers to structured entities not controlled by NatWest Group, and which are established either by NatWest Group or a third party. An interest in a structured entity is any form of contractual or non-contractual involvement which creates variability in returns for NatWest Group arising from the performance of the entity. Such interests include holdings of debt or equity securities, derivatives that transfer financial risks from the entity to NatWest Group, provision of lending and loan commitments, financial guarantees and investment management agreements. NatWest Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer transactions, to provide risk management services and for specific investment opportunities. Structured entities may take the form of funds, trusts, partnerships, securitisation vehicles, and private investment companies. NatWest Group considers itself to be the sponsor of a structured entity where it is primarily involved in the set up and design of the entity and where NatWest Group transfers assets to the entity, markets products associated with the entity in its own name, and/or provides guarantees in relation to the performance of the entity. The nature and extent of NatWest Group's interests in structured entities is summarised in the following table. 2023 2022 Asset-backed Investment Asset-backed Investment securitisation funds and securitisation funds and vehicles other Total vehicles other Total £m £m £m £m £m £m Assets Trading assets 303 311 614 616 137 753 Derivatives 134 — 134 343 — 343 Loans to customers 2,701 999 3,700 2,431 648 3,079 Other financial assets 13,096 1,062 14,158 6,334 849 7,183 Total 16,234 2,372 18,606 9,724 1,634 11,358 Liabilities Derivatives 213 17 230 388 22 410 Total 213 17 230 388 22 410 Off balance sheet Liquidity facilities/loan commitments 1,873 396 2,269 1,723 320 2,043 Guarantees — 127 127 — 107 107 Total 1,873 523 2,396 1,723 427 2,150 Maximum exposure 17,894 2,878 20,772 11,059 2,039 13,098 |
Asset transfers
Asset transfers | 12 Months Ended |
Dec. 31, 2023 | |
Asset transfers | |
Asset transfers | 24 Asset transfers This note provides an overview of assets that have been transferred but where the NatWest Group retains substantially all the risks and rewards of the transferred assets and therefore continues to recognize them on balance sheet. Transfers that do not qualify for derecognition NatWest Group enters into securities repurchase, lending and total return transactions in accordance with normal market practice which includes the provision of additional collateral if necessary. Under standard terms in the UK and US markets, the recipient has an unrestricted right to sell or repledge collateral, subject to returning equivalent securities on settlement of the transaction. Securities sold under repurchase transactions and transactions with the substance of securities repurchase agreements are not derecognised if NatWest Group retains substantially all the risks and rewards of ownership. The fair value (and carrying value) of securities transferred under such transactions included on the balance sheet, are set out below. All of these securities could be sold or repledged by the holder. 2023 2022 The following assets have failed derecognition (1) £m £m Trading assets 7,907 6,668 Loans to bank - amortised cost 10 16 Loans to customers - amortised cost 281 398 Other financial assets 8,764 2,901 Total 16,962 9,983 (1) Associated liabilities were £16,522 million (2022 - £9,501 million). Assets pledged as collateral NatWest Group pledges collateral with its counterparties in respect of derivative liabilities, bank and stock borrowings and other transactions. 2023 2022 Assets pledged against liabilities £m £m Trading assets 10,976 15,062 Loans to banks - amortised cost 63 66 Loans to customers - amortised cost 21,611 17,493 Other financial assets (1) 6,506 3,351 Total 39,156 35,972 (1) Includes assets pledged for pension derivatives and £ 482 million of debt securities under the continuing control of NWB Plc. This follows the agreement between NWB Plc and the Group Pension Fund to establish a bankruptcy remote reservoir trust to hold these assets. Refer to Note 5 for additional information. As part of the covered debt programme £11,067 million of loans to customers and other debt instruments (2022 – £8,156 million) have been transferred to bankruptcy remote limited liability partnerships within the NatWest Group to provide collateral for issues of debt securities and other borrowing by the NatWest Group of £3,619 million (2022 – £4,132 million). Refer to Note 23. |
Capital resources
Capital resources | 12 Months Ended |
Dec. 31, 2023 | |
Capital resources | |
Capital resources | 25 Capital resources NatWest Group’s regulatory capital is assessed against minimum requirements that are set out under the UK Capital Requirements Regulation to determine the strength of its capital base. This note shows a reconciliation of shareholders’ equity to regulatory capital. 2023 2022 £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity 37,157 36,488 Other equity instruments (3,890) (3,890) 33,267 32,598 Regulatory adjustments and deductions Own credit (10) (58) Defined benefit pension fund adjustment (143) (227) Cash flow hedging reserve 1,899 2,771 Deferred tax assets (979) (912) Prudential valuation adjustments (279) (275) Goodwill and other intangible assets (7,614) (7,116) Foreseeable ordinary dividends (1,013) (967) Adjustment for trust assets (1) (365) (365) Foreseeable charges (525) (800) Adjustment under IFRS 9 transitional arrangements 202 361 Insufficient coverage for non-performing exposures — (18) (8,827) (7,606) CET1 capital 24,440 24,992 Additional Tier 1 (AT1) capital Qualifying instruments and related share premium 3,875 3,875 AT1 capital 3,875 3,875 Tier 1 capital 28,315 28,867 Qualifying Tier 2 capital Qualifying instruments and related share premium 5,189 4,953 Qualifying instruments issued by subsidiaries and held by third parties — 82 Other regulatory adjustments 128 18 Tier 2 capital 5,317 5,053 Total regulatory capital 33,632 33,920 (1) It is NatWest Group policy to maintain a strong capital base, to expand it as appropriate and to utilise it efficiently throughout its activities to optimise the return to shareholders while maintaining a prudent relationship between the capital base and the underlying risks of the business. In carrying out this policy, NatWest Group has regard to the supervisory requirements of the PRA. The PRA uses capital ratios as a measure of capital adequacy in the UK banking sector, comparing a bank’s capital resources with its risk-weighted assets (the assets and off-balance sheet exposures are weighted to reflect the inherent credit and other risks); by international agreement, the Pillar 1 capital ratios should be not less than 8% with a Common Equity Tier 1 component of not less than 4.5%. NatWest Group has complied with the PRA’s capital requirements throughout the year. A number of subsidiaries and sub-groups within NatWest Group, principally banking entities, are subject to various individual regulatory capital requirements in the UK and overseas. Furthermore, the payment of dividends by subsidiaries and the ability of members of NatWest Group to lend money to other members of NatWest Group may be subject to restrictions such as local regulatory or legal requirements, the availability of reserves and financial and operating performance. |
Memorandum items
Memorandum items | 12 Months Ended |
Dec. 31, 2023 | |
Memorandum items | |
Memorandum items | 26 Memorandum items Contingent liabilities and commitments NatWest Group provides its customers with a variety of services to support their businesses, such as guarantees. These are reported as commitments. Contingent liabilities are possible obligations dependent on a future event or present obligations which are either not probable or cannot be measured reliably. For accounting policy information refer to Accounting policy 2.4. The amounts shown in the table below are intended only to provide an indication of the volume of business outstanding at 31 December 2023. 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. 2023 2022 £m £m Contingent liabilities and commitments Guarantees 2,810 3,150 Other contingent liabilities 1,380 1,855 Standby facilities, credit lines and other commitments 115,441 121,576 Total 119,631 126,581 Banking commitments and contingent obligations, which have been entered into on behalf of customers and for which there are corresponding obligations from customers, are not included in assets and liabilities. NatWest Group’s maximum exposure to credit loss, in the event of its obligation crystallising and all counterclaims, collateral or security proving valueless, is represented by the contractual nominal amount of these instruments included in the table above. These commitments and contingent obligations are subject to NatWest Group’s normal credit approval processes. Guarantees Other contingent liabilities Standby facilities and credit lines Other commitments Contractual obligations for future expenditure not provided for in the accounts The following table shows contractual obligations for future expenditure not provided for in the accounts at the year end. 2023 2022 £m £m Capital expenditure on property, plant and equipment 38 8 Contracts to purchase goods or services (1) 1,121 677 1,159 685 (1) Of which due within 1 year: £379 million (2022 - £321 million). 26 Memorandum items continued Trustee and other fiduciary activities In its capacity as trustee or other fiduciary role, NatWest Group may hold or place assets on behalf of individuals, trusts, companies, pension schemes and others. The assets and their income are not included in NatWest Group’s financial statements. NatWest Group earned fee income of £264 million (2022 - £266 million; 2021 - £280 million) from these activities. The Financial Services Compensation Scheme The Financial Services Compensation Scheme (FSCS), the UK’s statutory fund of last resort for customers of authorised financial services firms, pays compensation if a firm is unable to meet its obligations. The FSCS funds compensation for customers by raising management expenses levies and compensation levies on the industry. In relation to protected deposits, each deposit-taking institution contributes towards these levies in proportion to their share of total protected deposits on 31 December of the year preceding the scheme year (which runs from 1 April to 31 March), subject to annual maxima set by the Prudential Regulation Authority. In addition, the FSCS has the power to raise levies on a firm that has ceased to participate in the scheme and is in the process of ceasing to be authorised for the costs that it would have been liable to pay had the FSCS made a levy in the financial year it ceased to be a participant in the scheme. Litigation and regulatory matters NatWest Group plc and certain members of NatWest Group are party to various legal proceedings and are involved in, or subject to, various 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 the 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 the probability of a liability, if any, arising can reasonably be estimated in respect of any Matter. 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 Matters 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 or contesting Matters, even for those for which NatWest Group believes it has credible defences and should prevail on the merits. The uncertainties inherent in all Matters affect the amount and timing of any potential economic outflows for both Matters with respect to which provisions have been established and other contingent liabilities in respect of any such Matter. It is not practicable to provide an aggregate estimate of potential liability for our Matters as a class of contingent liabilities. The future economic outflow in respect of any Matter may ultimately prove to be substantially greater than, or less than, the aggregate provision, if any, that NatWest Group has recognised in respect of such Matter. Where a reliable estimate of the economic outflow cannot be reasonably made, no provision has been recognised. NatWest Group expects that in future periods, additional provisions and economic outflows relating to Matters that may or may not be currently known by NatWest Group will be necessary, in amounts that are expected to be substantial in some instances. Refer to Note 21 for information on material provisions. Matters which are, or could be, material, either individually or in aggregate, having regard to NatWest Group, considered as a whole, in which NatWest Group is currently involved are set out below. We have provided information on the procedural history of certain Matters, where we believe appropriate, to aid the understanding of the Matter. For a discussion of certain risks associated with NatWest Group’s litigation and regulatory matters (including the Matters), refer to the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on pages 160 to 184. 26 Litigation and regulatory matters continued Litigation 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 complainants 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 purported class actions relating to USD LIBOR, as well as more than two The non-class claims filed in the SDNY include claims that the FDIC is asserting on behalf of certain failed US banks. In July 2017, the FDIC, on behalf of 39 of those 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 collusion with regard to the setting of USD LIBOR and that the defendants breached UK and European competition law, as well as asserting common law claims of fraud under US law. The defendant banks consented to a request by the FDIC for discontinuance of the claim in respect of 20 failed US banks, leaving 19 failed US banks as claimants. The trial is currently anticipated to commence in Q1 2026. In addition to the USD LIBOR cases described above, there is a class action relating to derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR, which was dismissed by the SDNY in relation to NWM Plc and other NatWest Group companies in September 2021. That dismissal may be the subject of a future appeal. The SDNY’s dismissal of another class action, which related to Euroyen TIBOR futures contracts, was affirmed by the United States Court of Appeals for the Second Circuit (US Court of Appeals) in October 2022. The plaintiffs filed a petition with the United States Supreme Court seeking review of the dismissal, but that petition was denied in October 2023. Two other IBOR-related class actions involving NWM Plc, concerning alleged manipulation of Euribor and Pound Sterling LIBOR, were previously dismissed by the SDNY for various reasons. The plaintiffs’ appeals in those two cases remain pending. Litigation and regulatory matters continued NWM Plc’s previously disclosed settlement of a class action relating to Swiss Franc LIBOR has received final court approval. The settlement amount has been paid by NWM Plc and was covered in full by an existing provision. In August 2020, a complaint was filed in the United States District Court for the Northern District of California by several United States retail borrowers against the USD ICE LIBOR panel banks and their affiliates (including NatWest Group plc, NWM Plc, NWMSI and NWB Plc), alleging (i) that the very process of setting USD ICE LIBOR amounts to illegal price-fixing; and (ii) that banks in the United States have illegally agreed to use LIBOR as a component of price in variable retail loans. In September 2022, the district court dismissed the complaint. The plaintiffs filed an amended complaint but in October 2023, the district court dismissed that complaint as well, and indicated that further amendment would not be permitted. The plaintiffs have commenced an appeal to the United States Court of Appeals for the Ninth Circuit which is currently pending. NWM Plc is 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 outside the jurisdiction, 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 an appeal to Israel’s Supreme Court in respect of the dismissal of the substantive case against banks that had a presence in Israel. 26 Memorandum items continued Foreign exchange litigation NWM Plc, NWMSI and/or NatWest Group plc are defendants in several cases relating to NWM Plc's foreign exchange (FX) business. An FX-related class action, on behalf of ‘consumers and end-user businesses’, was proceeding in the SDNY against NWM Plc and others. In March 2023, the court granted summary judgment in favour of the defendants, dismissing the plaintiffs’ claims. The plaintiffs have commenced an appeal of that decision as well as a prior decision denying class certification in the case. 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 and NWMSI have been named in the action as 'other cartel participants', but are not respondents. The claim was served in June 2019 and NWM Plc filed its defence in March 2022. In July and December 2019, two separate applications seeking opt-out collective proceedings orders were filed in the UK Competition Appeal Tribunal (CAT) against NatWest Group plc, NWM Plc and other banks. Both applications were 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. In March 2022, the CAT declined to certify as collective proceedings either of the applications, which was appealed by the applicants, and the subject of an application for judicial review. In its amended judgment in November 2023, the Court of Appeal allowed the appeal and decided that the claims should proceed on an opt-out basis. Separately, the court determined which of the two competing applicants can proceed as class representative, and dismissed the application for judicial review of the CAT’s decision. The case has been remitted to the CAT for further case management and the banks have sought permission to appeal directly to the UK Supreme Court. 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 to certify, which names The Royal Bank of Scotland plc (now NWM Plc) and several other banks as defendants, was served on NWM Plc in May 2020. The applicants have sought the court’s permission to amend their motions to certify the class actions. NWM Plc has filed a motion challenging the permission granted by the court for the applicants to serve the consolidated motion outside the Israeli jurisdiction. That NWM Plc motion remains pending. In December 2021, a summons was served in the Netherlands against NatWest Group plc, NWM Plc and NWM N.V. by Stichting FX Claims on behalf of a number of parties, seeking declarations from the court concerning liability for anti-competitive FX market conduct described in decisions of the European Commission (EC) of 16 May 2019, along with unspecified damages. The claimant amended its claim to also refer to a 2 December 2021 decision by the EC, which described anti-competitive FX market conduct. NatWest Group plc, NWM Plc and other defendants contested the jurisdiction of the Dutch court. In March 2023, the district court in Amsterdam accepted that it has jurisdiction to hear claims against NWM N.V. but refused jurisdiction to hear any claims against the other defendant banks (including NatWest Group plc and NWM Plc) brought on behalf of the parties represented by the claimant that are domiciled outside of the Netherlands. The claimant is appealing that decision and the defendant banks have brought cross-appeals which seek a ruling that the Dutch court has no jurisdiction to hear any claims against the defendant banks domiciled outside of the Netherlands, including claims brought on behalf of the parties represented by the claimant that are domiciled in the Netherlands. In September 2023, second summonses were served by Stichting FX Claims on NWM N.V., NatWest Group plc and NWM Plc, for claims on behalf of a new group of parties that have now been brought before the district court in Amsterdam. The summonses seek declarations from the Dutch court concerning liability for anti-competitive FX market conduct described in the above referenced decisions of the EC of 16 May 2019 and 2 December 2021, along with unspecified damages. 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 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 the 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 the plaintiffs. In March 2022, the SDNY dismissed the complaint, without leave to re-plead. In February 2024, the US Court of Appeals affirmed the SDNY’s decision dismissing the complaint. 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 various European central banks (European government bonds or 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 EGBs. The class consists of those who purchased or sold EGBs in the US between 2007 and 2012. Previously, in March 2022, the SDNY dismissed the claims against NWM Plc and NWMSI on the ground that the complaint’s conspiracy allegations were insufficient. However, in September 2023, the SDNY ruled that new allegations which plaintiffs have included in an amended complaint are sufficient to bring those NatWest entities back into the case as defendants. 26 Memorandum items continued 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. In December 2023, the SDNY denied the plaintiffs’ motion for class certification. The plaintiffs have filed a petition requesting that the US Court of Appeals review the denial of class certification. In 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 filed a motion to dismiss the complaint and, in June 2023, such motion was denied as regards NWMSI and other financial institutions, but granted as regards to NWM Plc on the ground that the court lacks jurisdiction over that entity. As a result, the case entered the discovery phase as against the non-dismissed defendants. In January 2024, the SDNY issued an order barring the plaintiffs in the New Mexico case from pursuing claims based on conduct occurring before 30 June 2014 on the ground that such claims were extinguished by a 2015 settlement agreement that resolved a prior class action relating to credit default swaps. Odd lot corporate bond trading antitrust litigation In October 2021, the SDNY granted the defendants’ motion to dismiss the class action antitrust complaint alleging that from August 2006 onwards various securities dealers, including NWMSI, 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. The plaintiffs have filed an appeal. Spoofing litigation In December 2021, three substantially similar class actions complaints were filed in federal court in the United States against NWM Plc and NWMSI alleging Commodity Exchange Act and common law unjust enrichment claims arising from manipulative trading known as spoofing. The complaints refer to NWM Plc’s December 2021 spoofing-related guilty plea (described below under “US investigations relating to fixed-income securities”) and purport to assert claims on behalf of those who transacted in US Treasury securities and futures and options on US Treasury securities between 2008 and 2018. In July 2022, defendants filed a motion to dismiss these claims, which have been consolidated into one matter in the United States District Court for the Northern District of Illinois. Madoff NWM N.V. was named as a defendant in two actions filed by the trustee for the bankrupt estates of Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, in bankruptcy court in New York, which together seek to clawback more than US$298 million that NWM N.V. allegedly received from certain Madoff feeder funds and certain swap counterparties. The claims were previously dismissed, but as a result of an August 2021 decision by the US Court of Appeals, they will now proceed in the bankruptcy court, where they have been consolidated into one action, subject to NWM N.V.’s legal and factual defences. In May 2022, NWM N.V. filed a motion to dismiss the amended complaint in the consolidated action and such motion was denied in March 2023. As a result, the case has now entered the discovery phase. EUA trading litigation 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 European Union Allowances (EUAs) in 2009 and were alleged to be VAT defaulting traders within (or otherwise connected to) EUA supply chains of which NWM Plc was a party. 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 In October 2020, the High Court quantified total damages against NWM Plc and Mercuria at £45 million plus interest and costs, and permitted the defendants to appeal to the Court of Appeal. In 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. In January 2024, NWM Plc entered into an agreement to resolve the claim against it. The settlement amount paid by NWM Plc was covered in full by an existing provision. 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 £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 separate cases involving other banks. 26 Memorandum items continued US Anti-Terrorism Act litigation NWM N.V. and certain other financial institutions are defendants in several actions 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. According to the plaintiffs’ allegations, the defendants are liable for damages arising from the attacks because they allegedly conspired with and/or aided and abetted Iran and certain Iranian banks to assist Iran in transferring money to Hezbollah and the Iraqi terror cells that committed the attacks, 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 , alleging conspiracy claims but not aiding and abetting claims, 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. In January 2023, the US Court of Appeals affirmed the district court’s dismissal of this case. The plaintiffs filed a petition with the United States Supreme Court seeking review of the dismissal of their claims and that petition was denied in October 2023. It is anticipated that the plaintiffs will file a motion to re-open the case to assert aiding and abetting claims that they previously did not assert. Another action, filed in the SDNY in 2017, which asserted both conspiracy and aiding and abetting claims, was dismissed by the SDNY in March 2019 on similar grounds as the first case, but remains subject to appeal to the US Court of Appeals. Other follow-on actions that are substantially similar to those described above are pending in the same courts. 1MDB litigation A Malaysian court claim was served in Switzerland in November 2022 by 1MDB, a Sovereign Wealth Fund, in which Coutts & Co Ltd was named, along with six others, as a defendant in respect of losses allegedly incurred by 1MDB. It is claimed that Coutts & Co Ltd is liable as a constructive trustee for having dishonestly assisted the directors of 1MDB in the breach of their fiduciary duties by failing (amongst other alleged claims) to undertake due diligence in relation to a customer of Coutts & Co Ltd, through which funds totalling c.US$1 billion were received and paid out between 2009 and 2011. The claimant seeks the return of that amount plus interest. Coutts & Co Ltd filed an application in January 2023 challenging the validity of service and the Malaysian court’s jurisdiction to hear the claim. Before that application was heard, in April 2023, the claimant filed a notice of discontinuance of its claim against certain defendants including Coutts & Co Ltd. The claimant subsequently indicated that it intended to issue further replacement proceedings. Coutts & Co Ltd challenged the claimant’s ability to take that step. In August 2023, the court disallowed the discontinuation of the claim by the claimant (a decision that the claimant has appealed) and directed that the application by Coutts & Co Ltd challenging the validity of the proceedings should proceed to a hearing , which took place in February 2024. Judgment is awaited. Coutts & Co Ltd (a subsidiary of RBS Netherlands Holdings B.V., which in turn is a subsidiary of NWM Plc) 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. NatWest Group expects government and regulatory intervention in financial services to be high for the foreseeable future, including increased scrutiny from competition and other regulators in the retail and SME business sectors. 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. 26 Memorandum items continued US investigations relating to fixed-income securities In December 2021, NWM Plc pled guilty in the United States District Court for the District of Connecticut to one count of wire fraud and one count of securities fraud in connection with historical spoofing conduct by former employees in US Treasuries markets between January 2008 and May 2014 and, separately, during approximately three months in 2018. The 2018 trading occurred during the term of a non-prosecution agreement (NPA) between NWMSI and the United States Attorney’s Office for the District of Connecticut (USAO CT), under which non-prosecution was conditioned on NWMSI and affiliated companies not engaging in criminal conduct during the term of the NPA. The relevant trading in 2018 was conducted by two NWM traders in Singapore and breached that NPA. The plea agreement reached with the US Department of Justice and the USAO CT resolved both the spoofing conduct and the breach of the NPA. As required by the resolution and sentence imposed by the court, NWM Plc is subject to a probationary period until the conclusion of the independent monitorship, which is also required under the plea agreement. In addition, NWM Plc has committed to compliance programme reviews and improvements and agreed to reporting and co-operation obligations. Other material adverse collateral consequences may occur as a result of this matter, as further described in the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on pages 160 to 184. RBSI inspection report and referral to enforcement Following an inspection by the Isle of Man Financial Services Authority (IOMFSA) in 2021 into The Royal Bank of Scotland International Limited’s (RBSI’s) compliance with the Financial Services Rule Book 2016, the Anti-Money Laundering and Countering the Financing of Terrorism Code 2015 (the “2015 Code”) and the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019, RBSI and the IOMFSA entered into a settlement agreement in February 2024 with an agreed public statement that RBSI had contravened paragraph 7 of the 2015 Code. RBSI did not complete its updated Customer Risk Assessment process following the introduction of the 2015 Code until 2018, resulting in 2,239 non-personal customers (on-boarded to its Isle of Man branches between 2015 and 2018, and not rated as high risk) being on-boarded using Customer Risk Assessments in line with earlier legislation. This constituted less than 3% of the total customer population of the Isle of Man branches. RBSI was fined £1.0 million (after a discount for co-operation), which was covered in full by an existing provision. RBSI reliance regim |
Non-cash and other items
Non-cash and other items | 12 Months Ended |
Dec. 31, 2023 | |
Non-cash and other items | |
Non-cash and other items | 27 Non-cash and other items This note shows non-cash items adjusted for in the cash flow statement and movement in operating assets and liabilities. 2023 2022 2021 £m £m £m Impairment losses/(releases) 572 266 (1,335) Depreciation and amortisation 934 833 923 Change in fair value taken to profit or loss of other financial assets (584) 1,267 1,771 Change in fair value taken to profit or loss on other financial liabilities and subordinated liabilities 831 (2,400) (1,083) Foreign exchange recycling (gains)/losses (484) (5) 10 Elimination of foreign exchange differences 312 10 2,446 Income receivable on other financial assets (1,415) (585) (378) Loss/(profit) on sale of other financial assets 44 172 (118) Profit on sale of subsidiaries and associates — — (48) Share of loss/(profit) of associates 9 30 (216) Loss on sale of other assets and net assets and liabilities 125 154 23 Interest payable on MRELs and subordinated liabilities 1,352 1,103 964 (Gain)/loss on redemption of own debt (3) 161 145 Charges and releases on provisions 313 248 478 Change in fair value of cash flow hedges 1,021 (304) (161) Other non-cash items 59 48 (13) Defined benefit pension schemes 122 205 215 Non-cash and other items 3,208 1,203 3,623 Change in operating assets and liabilities Change in trading assets 327 14,991 7,751 Change in derivative assets 20,826 3,621 59,697 Change in settlement balance assets (4,659) (431) 156 Change in loans to banks 752 (202) (252) Change in loans to customers (15,626) (7,628) 2,721 Change in other financial assets 132 (328) (128) Change in other assets (213) (255) (57) Change in assets of disposal groups 412 (4,117) (9,015) Change in bank deposits 1,749 (5,838) 5,673 Change in customer deposits (18,964) (29,492) 48,071 Change in settlement balance liabilities 4,633 (56) (350) Change in trading liabilities 828 (11,790) (7,658) Change in derivative liabilities (21,652) (6,788) (59,870) Change in other financial liabilities 6,564 989 938 Change in notes in circulation 19 171 392 Change in other liabilities (807) (1,294) (1,463) Change in operating assets and liabilities (25,679) (48,447) 46,606 |
Analysis of the net investment
Analysis of the net investment in business interests and intangible assets | 12 Months Ended |
Dec. 31, 2023 | |
Analysis of the net investment in business interests and intangible assets | |
Analysis of the net investment in business interests and intangible assets | 28 Analysis of the net investment in business interests and intangible assets This note shows cash flows relating to obtaining or losing control of associates or subsidiaries and net assets and liabilities purchased and sold. These cash flows are presented as investing activities on the cash flow statement. 2023 2022 2021 £m £m £m Fair value given for business acquired (139) — — Acquisition of interest in associates — (1) — Additional investment in associates (5) — (51) Net assets and liabilities purchased — — (3,128) Net outflow of cash in respect of acquisitions (144) (1) (3,179) Disposal of net assets and liabilities 5,560 6,270 114 (Loss)/profit on disposal of net assets and liabilities (87) (106) 55 Net inflow of cash in respect of disposals 5,473 6,164 169 Dividends received from associate 16 — — Net cash expenditure on intangible assets (744) (743) (479) Net inflow/(outflow) of cash 4,601 5,420 (3,489) |
Analysis of changes in financin
Analysis of changes in financing during the year | 12 Months Ended |
Dec. 31, 2023 | |
Analysis of changes in financing during the year | |
Analysis of changes in financing during the year | 29 Analysis of changes in financing during the year This note shows cash flows and non-cash movements relating to the financing activities of the Group. These activities reflect movements in share capital, share premium, paid-in equity, subordinated liabilities and MRELs. Share capital, share premium, and paid-in equity Subordinated liabilities MRELs 2023 2022 2021 2023 2022 2021 2023 2022 2021 £m £m £m £m £m £m £m £m £m At 1 January 15,590 16,519 18,239 6,260 8,429 9,962 22,265 23,423 20,873 Issue of paid-in equity — — 937 — — — — — — Issue of subordinated liabilities — — — 611 648 1,634 — — — Issue of MRELs — — — — — 3,973 3,721 3,383 Redemption of subordinated liabilities — — — (1,250) (3,693) (4,765) — — — Interest paid on subordinated liabilities — — — (439) (374) (321) — — — Maturity and redemption of MRELs — — — — — — (4,236) (4,992) — Interest paid on MRELs — — — — — — (844) (703) (647) Net cash flows from financing activities — — 937 (1,078) (3,419) (3,452) (1,107) (1,974) 2,736 Ordinary shares issued — — 87 — — — — — — Shares repurchased (856) (929) (698) — — — — — — Effects of foreign exchange — — — (166) 597 (18) (987) 1,889 (190) Changes in fair value of subordinated liabilities and MRELs — — — 230 (594) (434) 601 (1,806) (649) Preference shares reclassified to subordinated liabilities — — — — 750 — — — — Paid-in equity reclassified to subordinated liabilities — — (2,046) — — 1,915 — — — (Gain)/loss on redemption of own debt — — — (3) 161 145 — — — Interest payable on subordinated liabilities and MRELs — — — 464 370 311 888 733 653 Other — — — 7 (34) — — — — At 31 December 14,734 15,590 16,519 5,714 6,260 8,429 21,660 22,265 23,423 |
Analysis of cash and cash equiv
Analysis of cash and cash equivalents | 12 Months Ended |
Dec. 31, 2023 | |
Analysis of cash and cash equivalents | |
Analysis of cash and cash equivalents | 30 Analysis of cash and cash equivalents Non-cash and other add back items and movements in operating assets and liabilities are adjusted for in the cash flow statement. Loans to banks and treasury bills with an original maturity of less than three months that are readily convertible to known amounts of cash and subject to insignificant risk of change in value. 2023 2022 2021 £m £m £m Cash and balances at central banks 104,262 144,832 177,757 Trading assets 8,851 8,551 7,137 Other financial assets 139 19 16 Loans to banks (1) 5,572 5,047 5,796 Cash and cash equivalents 118,824 158,449 190,706 (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £ 4,434 million (2022 - £ 4,895 million; 2021 - £ 4,293 million). Certain members of NatWest Group are required by law or regulation to maintain balances with the central banks in the jurisdictions in which they operate. NatWest Markets N.V. had mandatory reserve deposits with De Nederlandsche Bank N.V. of €132 million (2022 - €64 million, 2021 - €60 million). The Royal Bank of Scotland International Limited had balances with Central Bank of Luxembourg of £135 million (2022 - £108 million, 2021 - £123 million). |
Directors' and key management r
Directors' and key management remuneration | 12 Months Ended |
Dec. 31, 2023 | |
Directors' and key management remuneration | |
Directors' and key management remuneration | 31 Directors' and key management remuneration Directors and key management are remunerated for services rendered in the period. The executive directors may participate in the company's long-term incentive plans, executive share option and sharesave schemes and details of their interests in the company's shares arising from their participation are given in the directors' remuneration report. Details of the remuneration received by each director are also given in the directors' remuneration report. Key management comprises members of the NatWest Group plc and NWH Ltd Boards, members of the NatWest Group plc and NWH Ltd Executive Committees, and the Chief Executives of NatWest Markets Plc and RBS International (Holdings) Limited. This is on the basis that these individuals have been identified as Persons Discharging Managerial Responsibilities of NatWest Group plc under the new governance structure. 2023 2022 Directors' remuneration £000 £000 Non-executive directors emoluments 1,574 1,685 Chairman and executive directors emoluments 6,408 5,804 7,982 7,489 Amounts receivable under long-term incentive plans and share option plans 2,708 542 Total 10,690 8,031 Compensation of key management The aggregate remuneration of directors and other members of key management during the year was as follows: 2023 2022 £000 £000 Short-term benefits 21,098 22,175 Post-employment benefits 741 732 Share-based payments 7,264 2,547 29,103 25,454 Short term benefits include benefits expected to be settled wholly within twelve months of balance sheet date. Post-employment benefits include defined benefit contributions for active members and pension funding to support contributions to the defined contribution schemes. Share-based payments include awards vested under rewards schemes. |
Transactions with directors and
Transactions with directors and key management | 12 Months Ended |
Dec. 31, 2023 | |
Transactions with directors and key management | |
Transactions with directors and key management | 32 Transactions with directors and key management This note presents information relating to any transactions with directors and key management. Key management comprises directors of the company and Persons Discharging Managerial Responsibilities (PDMRs) of NatWest Group plc. For the purposes of IAS 24 Related party disclosures, key management comprises directors of the company and PDMRs of NatWest Group plc. Key management have banking relationships with NatWest Group entities which are entered into in the normal course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with other persons of a similar standing or, where applicable, with other employees. These transactions did not involve more than the normal risk of repayment or present other unfavourable features. Amounts in the table below are attributed to each person at their highest level of NatWest Group key management, and relate to those who were key management at any time during the financial period. At 31 December 2023 2022 £000 £000 Loans to customers - amortised cost 11,406 12,137 Customer deposits 55,254 47,866 At 31 December 2023, amounts outstanding in relation to transactions, arrangements and agreements entered into by authorised institutions in NatWest Group, as defined in UK legislation, were £8,397,763 in respect of loans to 9 persons who were directors of the company at any time during the financial period. |
Related parties
Related parties | 12 Months Ended |
Dec. 31, 2023 | |
Related parties | |
Related parties | 33 Related parties A related party is a person or entity that is related to the entity that is preparing its financial statements. This includes subsidiaries, associates, joint ventures, post-employment benefits plans, Key management personnel and their close family members and entities controlled by them. Transactions between an entity and any related party are disclosed in the financial statements in accordance with both accounting standards and relevant listing rules to ensure readers are aware of how financial statements may be affected by these transactions. UK Government UK Government through HM Treasury is the controlling shareholder of NatWest Group plc as per UK listing rules. The UK Government's shareholding is managed by UK Government Investments Limited, a company wholly owned by the UK Government. At 31 December 2023 HM Treasury's holding in the company's ordinary shares was 37.97%. As a result the UK Government and UK Government-controlled bodies are related parties of the Group. NatWest Group enters into transactions with many of these bodies. Transactions include the payment of: taxes – principally UK corporation tax (Note 7) and value added tax; national insurance contributions; local authority rates; and regulatory fees and levies (including the bank levy Note 3) and FSCS levy (Note 26) - together with banking transactions such as loans and deposits undertaken in the normal course of banker-customer relationships. Bank of England facilities NatWest Group may participate in a number of schemes operated by the Bank of England in the normal course of business. Members of NatWest Group that are UK authorised institutions are required to maintain non-interest bearing (cash ratio) deposits with the Bank of England amounting to 0.382% of their average eligible liabilities in excess of £600 million. They also have access to Bank of England reserve accounts: sterling current accounts that earn interest at the Bank of England Base rate. NatWest Group provides guarantees for certain subsidiaries, liabilities to the Bank of England. Other Related Parties In accordance with IAS 24, transactions or balances between NatWest Group entities that have been eliminated on consolidation are not reported. The primary financial statements of the parent company include transactions and balances with its subsidiaries which have been further disclosed in the relevant notes. 33 Related parties continued Associates, joint ventures (JVs) and equity investments In their roles as providers of finance, NatWest Group companies provide development and other types of capital support to businesses. These investments are made in the normal course of business. To further strategic partnerships, NatWest Group may seek to invest in third parties or allow third parties to hold a minority interest in a subsidiary of NatWest Group. We disclose as related parties for associates and joint ventures and where equity interest are over 10%. Ongoing business transactions with these entities are on normal commercial terms. Amounts included in the NatWest Group financial statements, in aggregate, by category of related party are as follows: Associates and Equity Joint Ventures Shares (1) Total 31 December 2023 £m £m £m Investments 668 145 813 Loans to customers- amortised cost — 13 13 Customer deposits 2 10 12 Settlement balances — — — Other comprehensive income — (8) (8) Other operating income (11) — (11) 31 December 2022 Investments 688 149 837 Loans to customers- amortised cost — — — Customer deposits 1 4 5 Settlement balances — 34 34 Other comprehensive income — 11 11 Other operating income (30) — (30) (1) Post employment benefits NatWest Group recharges NatWest Group Pension Fund with the cost of pension management services incurred by it. NatWest Group Pension Fund holds bank accounts held with the NatWest Group plc. At 31 December 2023 these balances amounted to £36.2 million (2022 - £61.7 million). NatWest Group Pension fund also holds certain interest rate swaps, inflation swaps, credit derivatives, cross currency swaps and forward exchange rate agreements where subsidiaries of NatWest Group act as counterparties. These transactions are on commercial terms and carried out on an arms-length basis. During February 2023, NatWest Group has entered into an agreement to establish a new legal structure to hold assets, consolidated on NatWest Group’s balance sheet, to meet potential future contributions required by the Main section of the Group’ Pension Fund. This transaction required transfer of £471 million to the Reservoir Trust after the final dividend for 2022 approved by shareholders. This transaction does not create a pension liability with the Main section of the Group Pension Fund. Refer to details in Note 5 and in Material contracts information on page 189. |
Post balance sheet events
Post balance sheet events | 12 Months Ended |
Dec. 31, 2023 | |
Post balance sheet events. | |
Post balance sheet events | 34 Post balance sheet events A post balance sheet event is an event that takes place between the reporting date and the date of approval of the financial statements. Significant events are included in the financial statements either to provide new information about conditions that existed at 31 December 2023 (reporting date), including estimates used to prepare the financial statements (known as an adjusting event) or to provide new information about conditions that did not exist at 31 December 2023 (non-adjusting events). This note provides information relating to material non-adjusting events. As part of the ongoing on-market share buyback programmes, NatWest Group plc has repurchased and cancelled a further 64.6 million shares since December 2023 for a total consideration (excluding fees) of £138.5 million. Other than as disclosed in the accounts, there have been no other significant events subsequent to 31 December 2023 which would require a change or additional disclosure. |
Accounting policies (Policies)
Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting policies | |
Presentation of financial statements | 1. Presentation of financial statements NatWest Group plc is incorporated in the UK and registered in Scotland. The financial statements are presented in the functional currency, pounds sterling. The audited financial statements include audited sections of the Risk and capital management section. The directors have prepared the financial statements on a going concern basis after assessing the principal risks, forecasts, projections and other relevant evidence over the twelve months from the date the financial statements are approved (refer to the Report of the directors) and in accordance with UK adopted International Accounting Standards (IAS), and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The critical and material accounting policies and related judgements are set out below. The financial statements are presented on a historical cost basis except for certain financial instruments which are stated at fair value. The effect of the amendments to IFRS effective from 1 January 2023 on our financial statements was immaterial. We have applied the exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12 Income taxes in respect of Pillar Two income taxes. Accordingly, we have not recognised or disclosed information about deferred tax assets and liabilities related to Pillar Two income taxes. Our consolidated financial statements incorporate the results of NatWest Group plc and the entities it controls. Control arises when we have the power to direct the activities of an entity so as to affect the return from the entity. Control is assessed by reference to our ability to enforce our will on the other entity, typically through voting rights. The consolidated financial statements are prepared under consistent accounting policies. A subsidiary is included in the consolidated financial statements at fair value on acquisition from the date it is controlled by us until the date we cease to control it through a sale or a significant change in circumstances. Changes in our interest in a subsidiary that do not result in us ceasing to control that subsidiary are accounted for as equity transactions. We apply accounting for associates and joint arrangements to entities where we have significant influence, but not control, over the operating and financial policies. We assess significant influence by reference to a presumption of voting rights of more than 20%, but less than 50%, supplemented by a qualitative assessment of substantive rights which include representation at the Board of Directors, significant exchange of managerial personnel or technology amongst others. Investments in associates and joint ventures are recorded upon initial recognition at cost, increased or decreased each period by the share of the subsequent levels of profit or loss, and other changes in equity are considered in line with their nature. The judgements and assumptions involved in our accounting policies that are considered by the Board to be the most important to the portrayal of its financial condition are noted below. The use of estimates, assumptions or models that differ from those adopted by us would affect our reported results. How Climate risk affects our accounting judgements and estimates Business planning Key financial estimates are based on management's latest five-year revenue and cost forecasts. The outputs from this forecast affect forward-looking accounting estimates. Measurement of deferred tax and expected credit losses are highly sensitive to reasonably possible changes in those anticipated conditions. In 2023, our scenario planning was enhanced by the further integration of NatWest Group’s climate transition plan, including the assessment of climate-related risks and opportunities. - Our Climate transition plan includes an assessment of: - changes in products, services and business operations to support customer transition towards net zero; - financial impacts of supporting customer transition, including investment required. The linkage between our financial plan and our Climate transition plan will continue to be developed and refreshed annually as part of the financial planning cycle; - the climate impact of policies, using the UK Climate Change Committee (UK CCC) Balanced Net Zero (BNZ) pathway scenario, aligned with the UK’s Sixth Carbon Budget. In addition, we have used the credibility ratings for sectoral policies provided by the UK CCC 2023 Progress Report, published in June, to the Parliament to develop a BNZ adjusted pathway to reflect estimated time delays of these policies. - There remains considerable uncertainty regarding this policy response, including the effect of wider geo-political uncertainty on governmental ambitions regarding climate transition and the effect of decarbonisation on wider economic growth, technology development and customer behaviours. Information used in other accounting estimates We make use of reasonable and supportable information to make accounting judgements and estimates. This includes information about the observable effects of the physical and transition risks of climate change on the current creditworthiness of borrowers, asset values and market indicators. It also includes the effect on our competitiveness and profitability. Many of the effects arising from climate change will be longer term in nature, with an inherent level of uncertainty, and have limited effect on accounting judgements and estimates for the current period. Some physical and transition risks can manifest in the shorter term. The following items represent the most significant effects: - The classification of financial instruments linked to climate, or other sustainability indicators: consideration is given to whether the effect of climate related terms prevent the instrument cashflows being solely payments of principal and interest. - The use of market indicators as inputs to fair value is assumed to include current information and knowledge regarding the effect of climate risk. Effect of climate change in the estimation of expected credit loss We are monitoring the effect of the physical and transition consequences of climate change on our experience of loan loss. We use available information regarding the effect of climate transition policy largely driven by carbon prices as an adjustment to macroeconomic factors that are used as inputs to the models that generate PD and LGD outcomes, which are key inputs to the ECL calculation. The determination of whether specific loss drivers and climate events generate specific losses is ongoing and is necessary to determine how sensitive changes in ECL could be to climate inputs. Future cashflows are discounted, so long dated cashflows are less likely to affect current expectations on credit loss. Our assessment of sector specific risks, and whether additional adjustments are required, include expectations of the ability of those sectors to meet their financing needs in the market. Changes in credit stewardship and credit risk appetite that stem from climate considerations, such as oil and gas, will directly affect our positions. |
Critical accounting polices | 2. Critical accounting policies The judgements and assumptions involved in our accounting policies that are considered by the Board to be the most important to the portrayal of our financial condition are noted below. The use of estimates, assumptions or models that differ from those adopted by us would affect our reported results. Management’s consideration of uncertainty is outlined in the relevant sections, including the ECL estimate in the Risk and capital management section. Information used for significant estimate Policy Judgement Estimate Further information Deferred tax Determination of whether sufficient sustainable taxable profits will be generated in future years to recover the deferred tax asset. Our estimates are based on the five year revenue and cost forecasts (which include inherent uncertainties). Note 7 Fair value – financial instruments Classification of a fair value instrument as level 3, where the valuation is driven by unobservable inputs. Estimation of the fair value, where it is reasonably possible to have alternative assumptions in determining the FV. Note 11 Loan impairment provisions Definition of default against which to apply PD, LGD and EAD models. Selection of multiple economic scenarios.Criteria for a significant increase in credit risk. Identification of risks not captured by the models. ECL estimates contain a number of measurement uncertainties (such as the weighting of multiple economic scenarios) and disclosures include sensitivities to show impact on other reasonably possible scenarios. Note 15 Provisions for liabilities and charges Determination of whether a present obligation exists in respect of customer redress, litigation and other regulatory, property and other provisions. Legal proceedings often require a high degree of judgement and these are likely to change as the matter progresses. Provisions remain sensitive to the assumptions used in the estimate. We consider a wide range of possible outcomes. It is often not practical to meaningfully quantify ranges of possible outcomes, given the uncertainties involved. Note 21 Changes in judgements and assumptions could result in a material adjustment to those estimates in future reporting periods. |
Deferred tax | 2.1. Deferred tax Deferred tax is the estimated tax expected to be payable or recoverable in respect of temporary differences between the carrying amount of an asset or liability for accounting purposes and the carrying amount for tax purposes in the future. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent their recovery is probable. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax asset recoverability is based on the level of supporting offsetable deferred tax liabilities we have and of our future taxable profits. These future taxable profits are based on our five-year revenue and cost forecasts and the expectation of long term economic growth beyond this period. The five-year forecast takes account of management’s current expectations on competitiveness and profitability. The long term growth rate reflects external indicators which will include market expectations on climate risk. We do not consider any additional adjustments to this indicator. |
Fair value - financial instruments | 2.2. Fair value – financial instruments We measure financial instruments at fair value when they are classified as mandatory fair value through profit or loss; held-for-trading; designated fair value through profit or loss and fair value through other comprehensive income and they are recognised in the financial statements at fair value. All derivatives are measured at fair value. We manage some portfolios of financial assets and financial liabilities based on our net exposure to either market or credit risk. In these cases, the fair value is derived from the net risk exposure of that portfolio with portfolio level adjustments applied to incorporate bid-offer spreads, counterparty credit risk, and funding costs (refer to ‘Valuation Adjustments’). Where the market for a financial instrument is not active, fair value is established using a valuation technique. These valuation techniques involve a degree of estimation, the extent of which depends on the instrument’s complexity and the availability of market-based data. The complexity and uncertainty in the financial instrument’s fair value is categorised using the fair value hierarchy. The use of market indicators as inputs to fair value is assumed to include current information and knowledge regarding the effect of climate risk. |
Loan impairment provisions: expected credit losses (ECL) | 2.3. Loan impairment provisions: expected credit losses (ECL) At each balance sheet date each financial asset or portfolio of financial assets measured at amortised cost or at fair value through other comprehensive income, issued financial guarantee and loan commitment (other than those classified as held for trading) is assessed for impairment. Any change in impairment is reported in the income statement. Loss allowances are forward-looking, based on 12-month ECL where there has not been a significant increase in credit risk rating, otherwise allowances are based on lifetime expected losses. ECL are a probability-weighted estimate of credit losses. The probability is determined by the risk of default which is applied to the cash flow estimates. In the absence of a change in credit rating, allowances are recognised when there is a reduction in the net present value of expected cash flows. Following a significant increase in credit risk, ECL are adjusted from 12 months to lifetime. This will lead to a higher impairment charge. The measurement of expected credit loss considers the ability of borrowers to make payments as they fall due. Future cashflows are discounted, so long-dated cashflows are less likely to affect current expectations on credit loss. Our assessment of sector specific risks, and whether additional adjustments are required, include expectations of the ability of those sectors to meet their financing needs in the market. Changes in credit risk appetite and how we manage credit positions that stem from climate considerations, such as oil and gas, will directly affect our positions. Judgement is exercised as follows: - Models – in certain low default portfolios, Basel parameter estimates are also applied for IFRS 9. - Non-modelled portfolios – use a standardised capital requirement under Basel II. Under IFRS 9, they have bespoke treatments for the identification of significant increase in credit risk. Benchmark PDs, EADs and LGDs are reviewed annually for appropriateness. The ECL calculation is based on expected future cash flows, which is typically applied at a portfolio level. - Multiple economic scenarios (MES) – the central, or base, scenario is most critical to the ECL calculation, independent of the method used to generate a range of alternative outcomes and their probabilities. - Significant increase in credit risk - IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased significantly since initial recognition. Part of this assessment requires a comparison to be made between the current lifetime PD (i.e. the current probability of default over the remaining lifetime) with the equivalent lifetime PD as determined at the date of initial recognition. On restructuring where a financial asset is not derecognised, the revised cash flows are used in re-estimating the credit loss. Where restructuring causes derecognition of the original financial asset, the fair value of the replacement asset is used as the closing cash flow of the original asset. Where in the course of the orderly realisation of a loan, it is exchanged for equity shares or property, the exchange is accounted for as the sale of the loan and the acquisition of equity securities or investment property. Where our acquired interest is in equity shares, relevant policies for control, associates and joint ventures apply. Impaired financial assets are written off and therefore derecognised from the balance sheet when we conclude that there is no longer any realistic prospect of recovery of part, or all, of the loan. For financial assets that are individually assessed for impairment, the timing of the write-off is determined on a case-by-case basis. Such financial assets are reviewed regularly and write-off will be prompted by bankruptcy, insolvency, re-negotiation, and similar events The typical time frames from initial impairment to write-off for our collectively assessed portfolios are: - Retail mortgages: write-off usually occurs within five years , or earlier, when an account is closed, but can be longer where the customer engages constructively; - Credit cards: the irrecoverable amount is typically written off after twelve arrears cycles or at four years post default any remaining amounts outstanding are written off; - Overdrafts and other unsecured loans: write-off occurs within six years ; - Commercial loans: write-offs are determined in the light of individual circumstances; and Business loans are generally written off within five years . |
Provisions | 2.4. Provisions We recognise a provision for a present obligation resulting from a past event when it is more likely than not that we will be required to pay to settle the obligation and the amount of the obligation can be estimated reliably. Provision is made for restructuring costs, including the costs of redundancy, when we have a constructive obligation. An obligation exists when we have a detailed formal plan for the restructuring and have raised a valid expectation in those affected either by starting to implement the plan or by announcing its main features. We recognise any onerous cost of the present obligation under a contract as a provision. An onerous cost is the unavoidable cost of meeting our contractual obligations that exceed the expected economic benefits. When we intend to vacate a leasehold property or right of use asset, the asset would be tested for impairment and a provision may be recognised for the ancillary contractual occupancy costs. |
Revenue recognition | 3.1. Revenue recognition Interest receivable and payable are recognised in the income statement using the effective interest rate method for: all financial instruments measured at amortised cost; debt instruments measured as fair value through other comprehensive income; and the effective part of any related accounting hedging instruments. Finance lease income is recognised at a constant periodic rate of return before tax on the net investment on the lease. Other interest relating to financial instruments measured at fair value is recognised as part of the movement in fair value and is reported in income from trading activities or other operating income as relevant. Fees in respect of services are recognised as the right to consideration accrues through the performance of each distinct service obligation to the customer. The arrangements are generally contractual and the cost of providing the service is incurred as the service is rendered. The price is usually fixed and always determinable. |
Discontinued operations, Held for sale and Disposal group | 3.2. Discontinued operations, Held for sale and Disposal group The results of discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit/(loss) from discontinued operations, net of tax in the income statement. Comparatives are represented for the income statement, cash flow statement, statement of changes in equity and related notes. An asset or disposal group (assets and liabilities) is classified as held for sale if we will recover its carrying amount principally through a sale transaction rather than through continuing use. These are measured at the lower of its carrying amount or fair value less cost to sell unless the existing measurement provisions of IFRS apply. These are presented as single amounts; comparatives are not represented. |
Staff costs | 3.3. Staff costs Employee costs, such as salaries, paid absences, and other benefits are recognised over the period in which the employees provide the related services to us. Employees may receive variable compensation in cash, in deferred cash or debt instruments of NatWest Group or in ordinary shares of NatWest Group plc subject to deferral, clawback and forfeiture criteria. We operate a number of share-based compensation schemes under which we grant awards of NatWest Group plc shares and share options to our employees. Such awards are subject to vesting conditions. Variable compensation that is settled in cash or debt instruments is charged to the income statement on a straight-line basis over the period during which services are provided, taking account of forfeiture and clawback criteria. The value of employee services received in exchange for NatWest Group plc shares and share options is recognised as an expense over the vesting period, subject to deferral, clawback, cancelation and forfeiture criteria with a corresponding increase in equity. The fair value of shares granted is the market price adjusted for the expected effect of dividends as employees are not entitled to dividends until shares are vested. The fair value of options granted is determined using option pricing models to estimate the numbers of shares likely to vest. These consider the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option and other relevant factors such as the dividend yield. Defined contribution pension scheme A scheme where we pay fixed contributions and there is no legal or constructive obligation to pay further contributions or benefits. Contributions are recognised in the income statement as employee service costs accrue. Defined benefit pension scheme A scheme that defines the benefit an employee will receive on retirement and is dependent on one or more factors such as age, salary, and years of service. The net of the recognisable scheme assets and obligations is reported on the balance sheet in other assets or other liabilities. The defined benefit obligation is measured on an actuarial basis. The charge to the income statement for pension costs (mainly the service cost and the net interest on the net defined benefit asset or liability) is recognised in operating expenses. Actuarial gains and losses (i.e. gains and/or losses on re-measuring the net defined benefit asset or liability due to changes in actuarial measurement assumptions) are recognised in other comprehensive income in full in the period in which they arise, and not subject to recycling to the income statement. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised on the balance sheet if the criteria of the asset ceiling test are met. This requires the net defined benefit surplus to be limited to the present value of any economic benefits available to us in the form of refunds from the plan or reduced contributions to it. We will recognise a liability where a minimum funding requirement exists for any of our defined benefit pension schemes. This reflects agreed minimum funding and the availability of a net surplus as determined as described above. When estimating the liability for minimum funding requirements we only include contributions that are substantively or contractually agreed and do not include contingent and discretionary features, including dividend-linked contributions or contributions subject to contingent events requiring future verification. We will recognise a net defined benefit asset when the net defined benefit surplus can generate a benefit in the form of a refund or reduction in future contributions to the plan. The net benefit pension asset is recognised at the present value of the benefits that will be available to us excluding interest and the effect of the asset ceiling (if any, excluding interest). Changes in the present value of the net benefit pension asset are recognised immediately in other comprehensive income. In instances where Trustees have the ability to declare augmented benefits to participants, we do not recognise a defined benefit pension asset and write-off the surplus immediately in other comprehensive income. |
Intangible assets and goodwill | 3.4. Intangible assets and goodwill Intangible assets are identifiable non-monetary assets without physical substance acquired or developed by us, and are stated at cost less accumulated amortisation and impairment losses. Amortisation is a method to spread the cost of such assets over time in the income statement. This is charged to the income statement over the assets' estimated useful economic lives using methods that best reflect the pattern of economic benefits. The estimated useful economic lives are: Computer software 3 to 10 years Other acquired intangibles 3 to 5 years Direct costs relating to the development of internal-use computer software are reported on the balance sheet after technical feasibility and economic viability have been established. These direct costs include payroll, the costs of materials and services, and directly attributable overheads. Capitalisation of costs ceases when the software can operate as intended. During and after development, accumulated costs are reviewed for impairment against the benefits that the software is expected to generate. Costs incurred prior to the establishment of technical feasibility and economic viability are expensed to the income statement as incurred, as are all training costs and general overheads. The costs of licences to use computer software that are expected to generate economic benefits beyond three years are also reported on the balance sheet. Goodwill on the acquisition of a subsidiary is the excess of the fair value of the consideration paid, the fair value of any existing interest in the subsidiary and the amount of any non-controlling interest measured either at fair value or at its share of the subsidiary’s net assets over the net fair value of the subsidiary’s identifiable assets, liabilities, and contingent liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. The gain or loss on the disposal of a subsidiary includes the carrying value of any related goodwill when such transactions occur. |
Impairment of non-financial assets | 3.5. Impairment of non-financial assets Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. At each balance sheet date, we assess whether there is any indication that other intangible assets or property, plant and equipment are impaired. If any such indication exists, we estimate the recoverable amount of the asset and compare it to its balance sheet value to calculate if an impairment loss should be recognised in the income statement. A reversal of an impairment loss on other intangible assets or property, plant and equipment is recognised in the income statement provided the increased carrying value is not greater than it would have been had no impairment loss been recognised. The recoverable amount of an asset that does not generate cash flows that are independent from those of other assets or groups of assets, is determined as part of the cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to our cash-generating units or groups of cash-generating units expected to benefit from the combination. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less cost to sell or its value in use. Value in use is the present value of future cash flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been considered in estimating future cash flows. The assessment of asset impairment is based upon value in use. This represents the value of future cashflows and uses our five-year revenue and cost forecasts and the expectation of long term economic growth beyond this period. The five-year forecast takes account of management’s current expectations on competitiveness and profitability, including near term effects of climate transition risk. The long term growth rate reflects external indicators which will include market expectations on climate risk. We do not consider any additional adjustments to this indicator. |
Foreign currencies | 3.6. Foreign currencies Foreign exchange differences arising on the settlement of foreign currency transactions and from the translation of monetary assets and liabilities are reported in income from trading activities except for differences arising on cash flow hedges and hedges of net investments in foreign operations. Non-monetary items denominated in foreign currencies that are stated at fair value are translated into the functional currency at the foreign exchange rates ruling at the dates the values are determined. Translation differences are recognised in the income statement except for differences arising on non-monetary financial assets classified as fair value through other comprehensive income. Income and expenses of foreign subsidiaries and branches are translated into sterling at average exchange rates unless these do not approximate the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on the translation of a foreign operation are recognised in other comprehensive income. The amount accumulated in equity is reclassified from equity to the income statement on disposal of a foreign operation. |
Tax | 3.7. Tax Tax encompassing current tax and deferred tax is recognised in the income statement except when taxable items are recognised in other comprehensive income or equity. Tax consequences arising from servicing financial instruments classified as equity are recognised in the income statement. Accounting for taxes is judgemental and carries a degree of uncertainty because tax law is subject to interpretation, which might be questioned by the relevant tax authority. We recognise the most likely current and deferred tax liability or asset, assessed for uncertainty using consistent judgements and estimates. Current and deferred tax assets are only recognised where their recovery is deemed probable, and current and deferred tax liabilities are recognised at the amount that represents the best estimate of the probable outcome having regard to their acceptance by the tax authorities. |
Financial instruments | 3.8. Financial instruments Financial instruments are measured at fair value on initial recognition on the balance sheet. Monetary financial assets are classified into one of the following subsequent measurement categories (subject to business model assessment and review of contractual cash flow for the purposes of sole payments of principal and interest where applicable): - amortised cost measured at cost using the effective interest rate method, less any impairment allowance; - fair value through other comprehensive income (FVOCI) measured at fair value, using the effective interest rate method and changes in fair value through other comprehensive income; - mandatory fair value through profit or loss (MFVTPL) measured at fair value and changes in fair value reported in the income statement; or - designated at fair value through profit or loss (DFV) measured at fair value and changes in fair value reported in the income statement. Classification by business model reflects how we manage our financial assets to generate cash flows. A business model assessment helps to ascertain the measurement approach depending on whether cash flows result from holding financial assets to collect the contractual cash flows, from selling those financial assets, or both. Business model assessment of assets is made at portfolio level, being the level at which they are managed to achieve a predefined business objective. This is expected to result in the most consistent classification of assets because it aligns with the stated objectives for the portfolio, its risk management, manager’s remuneration and the ability to monitor sales of assets from a portfolio. When a significant change to our business is communicated to external parties, we reassess our business model for managing those financial assets. We reclassify financial assets if we have a significant change to the business model. A reclassification is applied prospectively from the reclassification date. The contractual terms of a financial asset; any leverage features; prepayment and extension terms; and discounts or penalties to interest rates that are part of meeting environmental, social and governance targets as well as other contingent and leverage features, non-recourse arrangements and features that could modify the timing and/or amount of the contractual cash flows that might reset the effective rate of interest; are considered in determining whether cash flows are solely payments of principal and interest. Certain financial assets may be designated at fair value through profit or loss (DFV) upon initial recognition if such designation eliminates, or significantly reduces, accounting mismatch. Equity shares are measured at fair value through profit or loss unless specifically elected as at fair value through other comprehensive income (FVOCI). Upon disposal, the cumulative gains or losses in fair value through other comprehensive income reserve are recycled to the income statement for monetary assets and for non-monetary assets (equity shares) the cumulative gains or losses are transferred directly to retained earnings. Regular way purchases and sales of financial assets classified as amortised cost are recognised on the settlement date; all other regular way transactions in financial assets are recognised on the trade date. Financial liabilities are classified into one of following measurement categories: - amortised cost measured at cost using the effective interest rate method; - held for trading measured at fair value and changes in fair value reported in income statement; or - designated at fair value through profit or loss measured at fair value and changes in fair value reported in the income statement except changes in fair value attributable to the credit risk component recognised in other comprehensive income when no accounting mismatch occurs. |
Netting | 3.9. Netting Financial assets and financial liabilities are offset, and the net amount presented on the balance sheet when, and only when, we currently have a legally enforceable right to set off the recognised amounts and we intend either to settle on a net basis or to realise the asset and settle the liability simultaneously. We are party to a number of arrangements, including master netting agreements, that give us the right to offset financial assets and financial liabilities, but where we do not intend to settle the amounts net or simultaneously, the assets and liabilities concerned are presented separately on the balance sheet. |
Capital instruments | 3.10. Capital instruments We classify a financial instrument that we issue as a liability if it is a contractual obligation to deliver cash or another financial asset, or to exchange financial assets or financial liabilities on potentially unfavourable terms and as equity if we evidence a residual interest in our assets after the deduction of liabilities. Incremental costs and related tax that are directly attributable to an equity transaction are deducted from equity. The consideration for any ordinary shares of NatWest Group plc purchased by us (known as treasury shares or own shares held) is deducted from retained earnings. On the cancellation of treasury shares their nominal value is removed from retained earnings and a consequential amount recognised in capital redemption in compliance with the Companies Act 2006. On the sale or re-issue of treasury shares the consideration received and related tax are credited to equity, net of any directly attributable incremental costs. |
Derivatives and hedging | 3.11. Derivatives and hedging Derivatives are reported on the balance sheet at fair value. We use derivatives as part of our trading activities, to manage our own risk such as interest rate, foreign exchange, or credit risk or in certain customer transactions. Not all derivatives used to manage risk are in hedge accounting relationships (an IFRS method to reduce accounting mismatch from changes in the fair value of the derivatives reported in the income statement). Gains and losses arising from changes in the fair value of derivatives that are not in hedge relationships are recognised in Income from trading activities unless those derivatives are managed together with financial instruments designated at fair value; these gains and losses are included in Other operating income. Hedge accounting Hedge accounting relationships are designated and documented at inception in line with the requirements of IAS 39 Financial instruments – Recognition and Measurement. The documentation identifies the hedged item, the hedging instrument and details of the risk that is being hedged and the way in which effectiveness will be assessed at inception and during the period of the hedge. When designating a hedging relationship, we consider: the economic relationship between the hedged item (including the risk being hedged) and the hedging instrument; the nature of the risk; the risk management objective and strategy for undertaking the hedge; and the appropriateness of the method that will be used to assess hedge effectiveness. Designated hedging relationships must be expected to be highly effective both on a prospective and retrospective basis. This is assessed using regression techniques which model the degree of offsetting between the changes in fair value or cash flows attributable to the hedged risk and the changes in fair value of the designated hedging derivatives. Ineffectiveness is measured based on actual levels of offsetting and recognised in the income statement. We enter into three types of hedge accounting relationships. Fair value hedge Cash flow hedge Hedge of net investment in a foreign operation Discontinuation of hedge accounting Hedge accounting is discontinued if the hedge no longer meets the criteria for hedge accounting i.e. the hedge is not highly effective in offsetting changes in fair value or cash flows attributable to the hedged risk, consistent with the documented risk management strategy; the hedging instrument expires or is sold, terminated or exercised; or if hedge designation is revoked. For fair value hedging any cumulative adjustment is amortised to the income statement over the life of the hedged item. Where the hedged item is no longer on the balance sheet the adjustment to the hedged item is reported in the income statement. For cash flow hedging the cumulative unrealised gain or loss is reclassified from equity to the income statement when the hedged cash flows occur or, if the forecast transaction results in the recognition of a financial asset or financial liability, when the hedged forecast cash flows affect the income statement. Where a forecast transaction is no longer expected to occur, the cumulative unrealised gain or loss is reclassified from equity to the income statement immediately. For net investment hedging on disposal or partial disposal of a foreign operation, the amount accumulated in equity is reclassified from equity to the income statement. |
Future accounting developments | 4. Future accounting developments International Financial Reporting Standards Effective 1 January 2024 – Classification of Liabilities as Current or Non-current (Amendments to IAS 1); – Non-current Liabilities with Covenants (Amendments to IAS 1) – Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) – Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) Effective 1 January 2025 – Lack of Exchangeability (Amendments to IAS 21) We are assessing the effect of adopting these amendments on our financial statements but do not expect the effect to be material. |
Accounting policies (Tables)
Accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting policies | |
Schedule of information used for significant estimates | Policy Judgement Estimate Further information Deferred tax Determination of whether sufficient sustainable taxable profits will be generated in future years to recover the deferred tax asset. Our estimates are based on the five year revenue and cost forecasts (which include inherent uncertainties). Note 7 Fair value – financial instruments Classification of a fair value instrument as level 3, where the valuation is driven by unobservable inputs. Estimation of the fair value, where it is reasonably possible to have alternative assumptions in determining the FV. Note 11 Loan impairment provisions Definition of default against which to apply PD, LGD and EAD models. Selection of multiple economic scenarios.Criteria for a significant increase in credit risk. Identification of risks not captured by the models. ECL estimates contain a number of measurement uncertainties (such as the weighting of multiple economic scenarios) and disclosures include sensitivities to show impact on other reasonably possible scenarios. Note 15 Provisions for liabilities and charges Determination of whether a present obligation exists in respect of customer redress, litigation and other regulatory, property and other provisions. Legal proceedings often require a high degree of judgement and these are likely to change as the matter progresses. Provisions remain sensitive to the assumptions used in the estimate. We consider a wide range of possible outcomes. It is often not practical to meaningfully quantify ranges of possible outcomes, given the uncertainties involved. Note 21 |
Schedule of estimated useful economic lives | Computer software 3 to 10 years Other acquired intangibles 3 to 5 years |
Net interest income (Tables)
Net interest income (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Net interest income | |
Schedule of net interest income | 2023 2022 2021 (1) Continuing operations £m £m £m Balances at central banks and loans to banks - amortised cost 3,737 1,987 445 Loans to customers - amortised cost 15,553 10,085 8,536 Other financial assets 1,736 565 253 Interest receivable 21,026 12,637 9,234 Balances with banks 1,039 379 204 Customer deposits 5,276 785 556 Other financial liabilities 2,977 1,196 670 Subordinated liabilities 464 370 267 Internal funding of trading businesses 221 65 2 Interest payable 9,977 2,795 1,699 Net interest income 11,049 9,842 7,535 |
Non-interest income (Tables)
Non-interest income (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Non-interest income | |
Schedule of non-interest income | 2023 2022 2021 (1) Continuing operations £m £m £m Net fees and commissions (2) 2,330 2,292 2,120 Trading income Foreign exchange 270 305 364 Interest rate (3) 595 752 (130) Credit (72) 17 83 Changes in fair value of own debt and derivative liabilities attributable to own credit risk - debt securities in issue (2) 42 6 Equities, commodities and other 3 17 — 794 1,133 323 Other operating income Gain/(loss) on redemption of own debt 3 (161) (145) Rental income on operating lease assets and investment property 234 230 225 Changes in fair value of financial assets and liabilities designated at fair value through profit or loss (4) (150) 17 (8) Changes in fair value of other financial assets at fair value through profit or loss (5) 50 (45) 5 Hedge ineffectiveness 52 (20) 25 Loss on disposal of amortised cost assets and liabilities (5) (15) (15) (Loss)/profit on disposal of fair value through other comprehensive income assets (43) (168) 117 Loss on sale of property, plant and equipment (21) (5) (30) Share of (losses)/profits of associated entities (9) (30) 216 Profit on disposal of subsidiaries and associates — — 48 Foreign exchange recycling gains/(losses) 484 5 (10) Other income (6) (16) 81 23 579 (111) 451 3,703 3,314 2,894 (1) Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. (2) Refer to Note 4 for further analysis . (3) Includes fair value changes on derivatives which have not been designated in a hedge accounting relationship and gains and losses from the management of the NatWest Group’s funding requirements involving the use of derivatives including foreign exchange. These are aimed at managing the interest rate and foreign exchange risk that NatWest Group is exposed to. (4) Includes related derivatives. (5) Includes instruments that have failed solely payments of principal and interest testing under IFRS 9. (6) 2022 includes £92 million profit from insurance liabilities. |
Operating expenses (Tables)
Operating expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Operating expenses | |
Schedule of operating expenses | 2023 2022 2021 Continuing operations £m £m £m Salaries 2,483 2,250 2,295 Bonus awards 353 334 267 Temporary and contract costs 199 234 240 Social security costs 352 328 300 Pension costs 313 363 354 - defined benefit schemes (Note 5) 122 205 215 - defined contribution schemes 191 158 139 Other 201 207 220 Staff costs 3,901 3,716 3,676 Premises and equipment 1,153 1,112 1,133 UK bank levy 109 101 99 Depreciation and amortisation (1,2) 934 833 923 Other administrative expenses (3) 1,899 1,925 1,927 Administrative expenses 4,095 3,971 4,082 7,996 7,687 7,758 (1) (2) (3) |
Schedule of employees in continuing operations | Continuing operations 2023 2022 (1) 2021 (1) Retail Banking 14,300 15,100 16,000 Private Banking 2,400 2,300 2,000 Commercial & Institutional 12,400 12,200 11,700 Central items & other (2) 32,500 31,400 28,100 Total 61,600 61,000 57,800 UK 41,500 41,200 40,600 USA 300 300 300 India 16,900 15,700 13,500 Poland 1,500 1,500 1,400 Republic of Ireland 400 1,400 1,200 Rest of the World 1,000 900 800 Total 61,600 61,000 57,800 (1) Comparatives have been re-presented to reflect the movement of headcount across segments due to segment reorganisation. (2) Central items & other includes Ulster Bank RoI. The total number of persons employed in Ulster Bank RoI of 500 (2022 – 2,200 ; 2021 – 2,400 ) includes nil people employed in discontinued operations at 31 December 2023 (2022 – 400 ; 2021 – 700 ). |
Schedule of share-based compensation | Award plan Eligible employees Nature of award Vesting conditions (1) Settlement Sharesave UK, Channel Islands, Gibraltar, Isle of Man, Poland and India. Option to buy shares under employee savings plan Continuing employment or leavers in certain circumstances 2024 to 2028 Deferred performance awards All Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances 2024 to 2031 Long-term incentives (2,3) Senior employees Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances and/or satisfaction of the pre-vesting assessment and underpins 2024 to 2030 (1) All awards have vesting conditions which may not be met. (2) Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment. All awards are granted under the Employee Share Plan. (3) The existing Long-term incentive scheme has been closed for new awards and members as at 31 December 2022. The scheme has been replaced by a new Restricted share plan scheme with similar granting and vesting conditions. |
Schedule of bonus awards | Bonus awards 2023 2022 Change £m £m % Non-deferred cash awards (1) 43 40 8 % Deferred cash awards 262 270 (3) % Deferred share awards 51 60 (15) % Total deferred bonus awards 313 330 (5) % Total bonus awards (2) 356 370 (4) % Bonus awards as a % of operating profit before tax (3) 5 % 7 % Proportion of bonus awards that are deferred 88 % 89 % - deferred cash awards 84 % 82 % - deferred share awards 16 % 18 % (1) Non-deferred cash awards are limited to £2,000 for all employees. (2) Excludes other performance-related compensation. (3) Operating profit before tax and income statement charge for bonus awards. Reconciliation of bonus awards to income statement charge 2023 2022 2021 £m £m £m Bonus awarded 356 370 301 Less: deferral of charge for amounts awarded for current year (114) (127) (99) Income statement charge for amounts awarded in current year 242 243 202 Add: current year charge for amounts deferred from prior years 115 94 80 Less: forfeiture of amounts deferred from prior years (4) (3) (15) Income statement charge for amounts deferred from prior years 111 91 65 Income statement charge for bonus awards 353 334 267 3 Operating expenses continued Year in which income statement charge is expected to be taken for deferred bonus awards Actual Expected 2025 2021 2022 2023 2024 and beyond £m £m £m £m £m Bonus awards deferred from 2021 and earlier 80 94 16 7 5 Bonus awards deferred from 2022 — — 99 9 9 Less: forfeiture of amounts deferred from prior years (15) (3) (4) — — Bonus awards for 2023 deferred — — — 98 16 65 91 111 114 30 |
Sharesave | |
Operating expenses | |
Schedule of share-based compensation | Sharesave 2023 2022 2021 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January 1.63 99 1.61 95 1.64 96 Granted 1.42 43 1.86 25 1.80 24 Exercised 1.44 (23) 1.88 (15) 1.76 (10) Cancelled 1.72 (5) 1.60 (6) 2.02 (15) At 31 December 1.59 114 1.63 99 1.61 95 |
Deferred performance awards | |
Operating expenses | |
Schedule of share-based compensation | Deferred performance awards 2023 2022 2021 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 93 46 132 65 169 77 Granted 52 20 46 20 61 32 Forfeited (2) (1) (4) (2) (10) (5) Vested (67) (30) (81) (37) (88) (39) At 31 December 76 35 93 46 132 65 |
Long-term incentives | |
Operating expenses | |
Schedule of share-based compensation | Long-term incentives 2023 2022 2021 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 49 23 44 21 50 24 Granted 11 5 16 7 6 3 Vested/exercised (10) (4) (10) (4) (12) (6) Lapsed (1) (1) (1) (1) — — At 31 December 49 23 49 23 44 21 |
Segmental analysis (Tables)
Segmental analysis (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segmental analysis | |
Schedule of operating segments | Central Retail Private Commercial & items Banking Banking Institutional & other Total 2023 £m £m £m £m £m Continuing operations Net interest income 5,496 710 5,044 (201) 11,049 Net fees and commissions 427 249 1,654 — 2,330 Other non-interest income 8 31 723 611 1,373 Total income 5,931 990 7,421 410 14,752 Depreciation and amortisation (1) (1) (154) (778) (934) Other operating expenses (2,827) (684) (3,937) 386 (7,062) Impairment losses (465) (14) (94) (5) (578) Operating profit 2,638 291 3,236 13 6,178 2022 Continuing operations Net interest income 5,224 777 4,171 (330) 9,842 Net fees and commissions 422 250 1,580 40 2,292 Other non-interest income — 29 662 331 1,022 Total income 5,646 1,056 6,413 41 13,156 Depreciation and amortisation — — (161) (672) (833) Other operating expenses (2,593) (622) (3,583) (56) (6,854) Impairment (losses)/releases (229) 2 (122) 12 (337) Operating profit/(loss) 2,824 436 2,547 (675) 5,132 2021 Continuing operations Net interest income 4,074 480 2,974 7 7,535 Net fees and commissions 377 258 1,440 45 2,120 Other non-interest income (6) 78 424 278 774 Total income 4,445 816 4,838 330 10,429 Depreciation and amortisation (85) - (173) (665) (923) Other operating expenses (2,428) (520) (3,584) (303) (6,835) Impairment releases/(losses) 36 54 1,160 (77) 1,173 Operating profit/(loss) 1,968 350 2,241 (715) 3,844 4 Segmental analysis continued Total revenue (1) Central Retail Private Commercial & items & Banking Banking Institutional other Total 2023 £m £m £m £m £m Continuing operations External 7,366 1,157 12,519 4,340 25,382 Inter-segmental (4) 5 1,000 (1,602) 597 — Total 7,371 2,157 10,917 4,937 25,382 2022 Continuing operations External 5,773 874 7,258 2,669 16,574 Inter-segmental (4) — 389 (395) 6 — Total 5,773 1,263 6,863 2,675 16,574 2021 Continuing operations External 5,415 792 5,189 1,306 12,702 Inter-segmental (4) 18 127 102 (247) — Total 5,433 919 5,291 1,059 12,702 Total income Central Retail Private Commercial & items & Banking Banking Institutional other Total 2023 £m £m £m £m £m Continuing operations External 4,170 327 7,730 2,525 14,752 Inter-segmental (4) 1,761 663 (309) (2,115) — Total 5,931 990 7,421 410 14,752 2022 Continuing operations External 4,956 778 5,920 1,502 13,156 Inter-segmental (4) 690 278 493 (1,461) — Total 5,646 1,056 6,413 41 13,156 2021 Continuing operations External 4,933 801 4,634 61 10,429 Inter-segmental (4) (488) 15 204 269 — Total 4,445 816 4,838 330 10,429 For the notes to this table refer to page 64. Central Retail Private Commercial & items Banking Banking Institutional & other Total 2023 £m £m £m £m £m Continuing operations Fees and commissions receivable - Payment services 324 32 671 3 1,030 - Credit and debit card fees 400 13 260 3 676 - Lending and financing 14 5 709 1 729 - Brokerage 35 6 42 — 83 - Investment management, trustee and fiduciary services (2) 2 209 45 10 266 - Underwriting fees — — 123 — 123 - Other 4 5 73 (6) 76 Total 779 270 1,923 11 2,983 Fees and commissions payable (352) (21) (269) (11) (653) Net fees and commissions 427 249 1,654 — 2,330 2022 Continuing operations Fees and commissions receivable - Payment services 314 25 642 43 1,024 - Credit and debit card fees 401 15 227 18 661 - Lending and financing 17 8 673 3 701 - Brokerage 43 6 44 — 93 - Investment management, trustee and fiduciary services (2) 4 219 46 — 269 - Underwriting fees — — 120 — 120 - Other — 3 88 (44) 47 Total 779 276 1,840 20 2,915 Fees and commissions payable (357) (26) (260) 20 (623) Net fees and commissions 422 250 1,580 40 2,292 2021 Fees and commissions receivable - Payment services 306 35 577 49 967 - Credit and debit card fees 344 10 149 19 522 - Lending and financing 13 10 643 4 670 - Brokerage 48 6 42 — 96 - Investment management, trustee and fiduciary services (2) 3 230 45 2 280 - Underwriting fees — — 127 — 127 - Other — 35 109 (112) 32 Total 714 326 1,692 (38) 2,694 Fees and commissions payable (337) (68) (252) 83 (574) Net fees and commissions 377 258 1,440 45 2,120 For the notes to this table refer to page 64. 4 Segmental analysis continued 2023 2022 2021 Assets Liabilities Assets Liabilities Assets Liabilities £m £m £m £m £m £m Retail Banking 228,684 191,936 226,375 192,282 209,973 192,715 Private Banking 26,894 37,806 29,867 41,491 29,854 39,388 Commercial & Institutional 384,958 359,766 404,817 383,768 425,718 411,757 Central items & other 52,137 65,977 58,994 66,016 116,447 96,329 Total 692,673 655,485 720,053 683,557 781,992 740,189 |
Schedule of geographical segments | UK USA Europe RoW Total 2023 £m £m £m £m £m Continuing operations Total revenue 24,096 167 1,016 103 25,382 Interest receivable 20,192 39 774 21 21,026 Interest payable (9,500) (1) (472) (4) (9,977) Net fees and commissions 2,052 49 172 57 2,330 Trading income 704 66 1 23 794 Other operating income 556 (10) 30 3 579 Total income (3) 14,004 143 505 100 14,752 Operating profit/(loss) before tax 6,196 45 (149) 86 6,178 Total assets 610,831 23,725 56,001 2,116 692,673 Total liabilities 594,250 22,106 37,506 1,623 655,485 Contingent liabilities and commitments 112,199 — 7,411 21 119,631 2022 Continuing operations Total revenue 15,795 117 558 104 16,574 Interest receivable 12,242 37 344 14 12,637 Interest payable (2,567) (2) (221) (5) (2,795) Net fees and commissions 1,983 44 207 58 2,292 Trading income 1,208 1 (104) 28 1,133 Other operating income (140) 14 12 3 (111) Total income (3) 12,726 94 238 98 13,156 Operating profit/(loss) before tax 5,716 (46) (620) 82 5,132 Total assets 589,758 25,979 101,164 3,152 720,053 Total liabilities 579,476 27,039 75,092 1,950 683,557 Contingent liabilities and commitments 117,915 — 8,649 17 126,581 2021 Continuing operations Total revenue 12,100 87 482 33 12,702 Interest receivable 8,949 20 257 8 9,234 Interest payable (1,483) (2) (211) (3) (1,699) Net fees and commissions 1,820 27 231 42 2,120 Trading income 247 53 (1) 24 323 Other operating income 387 2 62 — 451 Total income (3) 9,920 100 338 71 10,429 Operating (loss)/profit before tax 4,143 48 (387) 40 3,844 Total assets 693,221 21,776 64,415 2,580 781,992 Total liabilities 676,684 23,286 38,835 1,384 740,189 Contingent liabilities and commitments 117,225 1 8,114 27 125,367 (1) Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income. (2) Comparisons with prior periods are affected by the transfer of the Private Client Advice business to Private Banking from 1 January 2021. (3) Total income excludes internal service fee income which has been calculated on a cost plus mark-up basis. (4) Revenue and income from transactions between segments of the group are now reported as inter-segment in both the current and comparative information. |
Pensions (Tables)
Pensions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Pensions | |
Schedule of major classes of plan assets as a percentage of total plan assets | 2023 2022 Quoted Unquoted Total Quoted Unquoted Total % % % % % % Equities 0.1 6.7 6.8 0.1 7.7 7.8 Index linked bonds 36.7 — 36.7 37.7 — 37.7 Government bonds 13.3 — 13.3 18.4 — 18.4 Corporate and other bonds 19.2 6.4 25.6 15.3 6.7 22.0 Real estate — 4.5 4.5 — 6.0 6.0 Derivatives — 2.7 2.7 — 8.2 8.2 Cash and other assets — 10.4 10.4 — (0.1) (0.1) 69.3 30.7 100.0 71.5 28.5 100.0 |
Summary of derivative instruments | 2023 2022 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps 29 1,929 940 21 1,873 990 Interest rate swaps 52 3,121 3,394 103 14,317 12,546 Currency forwards 13 235 34 12 310 113 Equity and bond call options — — — — — — Equity and bond put options — — 4 — 2 70 Other 1 8 20 1 14 19 |
Schedule of changes in value of net pension liability | Main section All schemes Present value Asset Net Asset Fair of defined ceiling/ pension Fair Present value ceiling/ Net value of benefit minimum assets/ value of of defined minimum pension plan assets obligation (1) funding liability plan assets benefit (2) funding assets (2) Changes in value of net pension assets/(liability) £m £m £m £m £m £m £m £m At 1 January 2022 52,021 (42,020) (10,001) — 57,787 (46,808) (10,491) 488 Currency translation and other adjustments — — — — 78 (65) (11) 2 Income statement - operating expenses 932 (892) (180) (140) 1,041 (1,055) (191) (205) Other comprehensive income (18,180) 16,714 898 (568) (20,326) 18,570 916 (840) Contributions by employer 708 — — 708 775 — — 775 Contributions by plan participants and other scheme members 7 (7) — — 13 (13) — — Assets/liabilities extinguished upon settlement — — — — (113) 113 — — Benefits paid (1,472) 1,472 — — (1,657) 1,657 — — At 1 January 2023 34,016 (24,733) (9,283) — 37,598 (27,601) (9,777) 220 Currency translation and other adjustments — — — — (21) 21 4 4 Income statement - operating expenses Net interest expense 1,677 (1,208) (464) 5 1,841 (1,341) (485) 15 Current service cost — (76) — (76) — (105) — (105) Past service cost — (2) — (2) — (8) — (8) Loss on curtailments and settlements — — — — — (24) — (24) 1,677 (1,286) (464) (73) 1,841 (1,478) (485) (122) Other comprehensive income Return on plan assets excluding recognised interest income (1,042) — — (1,042) (1,182) — — (1,182) Experience gains and losses — (1,531) — (1,531) — (1,599) — (1,599) Effect of changes in actuarial financial assumptions — (585) — (585) — (776) — (776) Effect of changes in actuarial demographic assumptions — 379 — 379 — 436 — 436 Asset ceiling adjustments — — 2,643 2,643 — — 2,841 2,841 (1,042) (1,737) 2,643 (136) (1,182) (1,939) 2,841 (280) Contributions by employer (3) 209 — — 209 278 2 — 280 Contributions by plan participants and other scheme members 7 (7) — — 12 (12) — — Assets/liabilities extinguished upon settlement — — — — (50) 50 — — Benefits paid (1,229) 1,229 — — (1,365) 1,365 — — At 31 December 2023 (4) 33,638 (26,534) (7,104) — 37,111 (29,592) (7,417) 102 (1) Defined benefit obligations are subject to annual valuation by independent actuaries. (2) NatWest Group recognises the net pension scheme surplus or deficit as a net asset or liability. In doing so, the funded status is adjusted to reflect any schemes with a surplus that NatWest Group may not be able to access, as well as any minimum funding requirement to pay in additional contributions. This is most relevant to the Main section, where the surplus is not recognised as the trustees may have control over the use of the surplus. Other NatWest Group schemes that this applies to include the Ulster Bank Pension Scheme (NI) and the NatWest Markets section. (3) NatWest Group expects to make contributions to the Main section of £207 million in 2024. (4) On 16 June 2023 the High Court issued a ruling in respect of Virgin Media v NTL Pension Trustees II Limited (and others), which has the potential to affect the defined benefit obligation (DBO) values. Reasonable due diligence has concluded that DBO values above require no adjustment for the impact of this case. All schemes 2023 2022 Amounts recognised on the balance sheet £m £m Fund asset at fair value 37,111 37,598 Present value of fund liabilities (29,592) (27,601) Funded status 7,519 9,997 Assets ceiling/minimum funding (7,417) (9,777) 102 220 2023 2022 Net pension asset/(liability) comprises £m £m Net assets of schemes in surplus (refer to Note 18) 201 318 Net liabilities of schemes in deficit (refer to Note 21) (99) (98) 102 220 |
Schedule of principal actuarial assumptions | Principal IAS 19 actuarial assumptions (1) 2023 2022 % % Discount rate 4.8 5.0 Inflation assumption (RPI) 3.1 3.2 Rate of increase in salaries 1.8 1.8 Rate of increase in deferred pensions 3.2 3.2 Rate of increase in pensions in payment 2.4 2.5 Lump sum conversion rate at retirement 18 18 Longevity at age 60: years years Current pensioners Males 26.8 27.3 Females 28.6 29.1 Future pensioners, currently aged 40 Males 27.7 28.3 Females 29.5 30.1 (1) The above financial assumptions are long-term assumptions set with reference to the period over which the obligations are expected to be settled. |
Schedule of sensitivities of the present value of defined benefit obligations | (Decrease)/ (Decrease)/ Increase in increase in increase in net pension value of value of (obligations)/ assets liabilities assets 2023 £m £m £m 0.5% increase in interest rates/discount rate (2,292) (1,746) (546) 0.25% increase in inflation 811 578 233 0.5% increase in credit spreads (12) (1,746) 1,734 Longevity increase of one year — 902 (902) 0.25% additional rate of increase in pensions in payment — 706 (706) Increase in equity values of 10% (1) 229 — 229 2022 0.5% increase in interest rates/discount rate (2,689) (1,766) (923) 0.25% increase in inflation 963 632 331 0.5% increase in credit spreads (6) (1,766) 1,760 Longevity increase of one year — 767 (767) 0.25% additional rate of increase in pensions in payment — 679 (679) Increase in equity values of 10% (1) 267 — 267 (1) Includes both quoted and private equity. The table below shows the combined change in defined benefit obligation from larger movements in these assumptions, assuming no changes in other assumptions. Change in life expectancies -2 years -1 year No change + 1 year + 2 years 2023 £bn £bn £bn £bn £bn Change in credit spreads +50 bps (3.5) (2.6) (1.7) (0.9) (0.1) No change (1.9) (0.9) — 0.9 1.8 -50 bps — 1.0 2.0 2.9 3.9 2022 Change in credit spreads +50 bps (3.7) (2.8) (1.8) (0.8) 0.2 No change (2.1) (1.1) — 1.1 2.1 -50 bps (0.3) 0.9 2.0 3.2 4.3 |
Schedule of different classes of scheme members proportions | 2023 2022 Membership category % % Active members 7.5 8.4 Deferred members 41.9 41.0 Pensioners and dependants 50.6 50.6 100.0 100.0 |
Schedule of history of defined benefit schemes | Main section All schemes 2023 2022 2021 2020 2019 2023 2022 2021 2020 2019 History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets 33,638 34,016 52,021 51,323 46,555 37,111 37,598 57,787 57,249 51,925 Present value of plan obligations (26,534) (24,733) (42,020) (43,870) (39,669) (29,592) (27,601) (46,808) (48,864) (44,115) Net surplus 7,104 9,283 10,001 7,453 6,886 7,519 9,997 10,979 8,385 7,810 Experience (losses)/gains on plan liabilities (1,531) (2,053) 241 427 275 (1,599) (2,137) 237 455 279 Experience (losses)/gains on plan assets (1,042) (18,180) 841 5,486 3,021 (1,182) (20,326) 872 6,027 3,556 Actual return on plan assets 634 (17,248) 1,554 6,422 4,266 659 (19,285) 1,667 7,064 4,930 Actual return on plan assets 1.9 % (33.2) % 3.0 % 13.8 % 9.7 % 1.8 % (33.4) % 2.9 % 13.6 % 10.1 % |
Auditor's remuneration (Tables)
Auditor's remuneration (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Auditor's remuneration | |
Schedule of auditor's remuneration | 2023 2022 2021 £m £m £m Fees payable for : - the audit of NatWest Group’s annual accounts (1) 4.9 4.7 4.4 - the audit of NatWest Group plc’s subsidiaries (1) 32.3 31.9 29.6 - audit-related assurance services (1,2) 4.5 3.9 5.3 Total audit and audit-related assurance services fees 41.7 40.5 39.3 Other assurance services 0.7 1.2 0.4 Corporate finance services (3) 0.7 0.5 0.5 Total other services 1.4 1.7 0.9 (1) The 2023 audit fee was approved by the Group Audit Committee. At 31 December 2023, £16 million has been billed and paid in respect of the 2023 NatWest Group audit fees. (2) Comprises fees of £1.4 million (2022 - £1.1 million) for reviews of interim financial information, £ 2.8 million (2022 - £2.3 million) for reports to NatWest Group’s regulators in the UK and overseas, and £0.3 million (2022 - £0.4 million) for non-statutory audit opinions. (3) Comprises fees of £0.7 million (2022 - £0.5 million) for work performed by the auditors as reporting accountants on debt and equity issuances undertaken by NatWest Group . |
Tax (Tables)
Tax (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Tax | |
Schedule of current and deferred tax expense | 2023 2022 2021 Continuing operations £m £m £m Current tax Charge for the year (1,373) (1,611) (1,036) (Under)/over provision in respect of prior years (123) 100 31 (1,496) (1,511) (1,005) Deferred tax (Charge)/credit for the year (281) 47 (185) UK tax rate change impact — (10) 165 Net increase in the carrying value of deferred tax assets in respect of UK, RoI and Netherlands losses 385 267 12 (Under)/over provision in respect of prior years (42) (68) 17 Tax charge for the year (1,434) (1,275) (996) |
Schedule of reconciliation of actual tax charge from the expected tax charge | 2023 2022 2021 Continuing operations £m £m £m Expected tax charge (1,452) (975) (766) Losses and temporary differences in year where no deferred tax asset recognised (56) (118) (51) Foreign profits taxed at other rates 10 (62) (11) Non deductible goodwill impairment — — (16) Items not allowed for tax: - losses on disposals and write-downs (63) (10) (55) - UK bank levy (27) (20) (18) - regulatory and legal actions (1) (7) (74) - other disallowable items (57) (51) (28) Non-taxable items: - Foreign exchange recycling on UBIDAC capital reduction 114 — — - RPI-related uplift on index linked gilts 6 67 — - other non-taxable items 20 29 73 Taxable foreign exchange movements 9 (19) 8 Unrecognised losses brought forward and utilised 27 6 10 Net increase/(decrease) in the carrying value of deferred tax assets in respect of: - UK losses (2) 371 272 (9) - RoI losses (1) (5) (27) - Netherlands losses 15 — 48 Banking surcharge (236) (447) (341) Tax on paid-in equity dividends 52 43 48 UK tax rate change impact — (10) 165 Adjustments in respect of prior years (1, 2) (165) 32 48 Actual tax charge (1,434) (1,275) (996) (1) (2) |
Schedule of deferred tax asset and liability | 2023 2022 £m £m Deferred tax asset (1,894) (2,178) Deferred tax liability 141 227 Net deferred tax asset (1,753) (1,951) |
Schedule of net deferred tax asset | Accelerated Tax losses capital Expense Financial carried Pension allowances provisions instruments (1) forward Other Total £m £m £m £m £m £m £m At 1 January 2022 24 (42) (97) 248 (899) (70) (836) Charge/(credit) to income statement: - continuing operations 1 (43) 14 (171) (51) 14 (236) - discontinued operations — — — — — — — (Credit)/charge to other comprehensive income (2) — 1 (913) — (2) (916) Currency translation and other adjustments — 10 — 31 (2) (2) 37 At 1 January 2023 23 (75) (82) (805) (952) (60) (1,951) Charge/(credit) to income statement: - continuing operations 1 (1) 21 16 (67) (32) (62) - discontinued operations — — — — — — — (Credit)/charge to other comprehensive income (8) — — 249 — 17 258 Currency translation and other adjustments — — — 2 — — 2 At 31 December 2023 16 (76) (61) (538) (1,019) (75) (1,753) (1) The in-year movement predominantly relates to cash flow hedges. |
Schedule of recognised deferred tax assets in respect of tax losses | 2023 2022 £m £m UK tax losses carried forward - NWM Plc — 3 - NWB Plc 362 445 - RBS plc 597 452 Total 959 900 Overseas tax losses carried forward - UBIDAC 5 6 - NWM N.V. 55 46 1,019 952 |
Discontinued operations and a_2
Discontinued operations and assets and liabilities of disposal groups (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued operations and assets and liabilities of disposal groups | |
Schedule of profit/(loss) net of tax and operating cash flows attributable to discontinued operations | 2023 2022 2021 £m £m £m Interest receivable 22 177 339 Net interest income 22 177 339 Non-interest income (1) (16) (472) 13 Total income 6 (295) 352 Operating expenses (124) (38) (47) (Loss)/profit before impairment releases (118) (333) 305 Impairment releases 6 71 162 Operating (loss)/profit before tax (112) (262) 467 Tax charge — — (3) (Loss)/profit from discontinued operations, net of tax (112) (262) 464 (1) Excludes gain of £ 20 million (€ 24 million) recognised by NatWest Group as a result of acquisition of PTSB shares in relation to disposal of UBIDAC assets to PTSB in 2022. 2023 2022 2021 £m £m £m Net cash flows from operating activities 362 1,090 2,212 Net cash flows from investing activities 5,473 6,164 — Net increase in cash and cash equivalents 5,835 7,254 2,212 |
Schedule of assets and liabilities of disposal groups | 2023 2022 £m £m Assets of disposal groups Loans to customers - amortised cost 32 1,458 Other financial assets - loans to customers 841 5,397 Other assets 29 6 902 6,861 Liabilities of disposal groups Other liabilities 3 15 3 15 Net assets of disposal groups 899 6,846 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per share | |
Schedule of earnings per share | 2023 2022 2021 £m £m £m Earnings Profit from continuing operations attributable to ordinary shareholders 4,506 3,602 2,486 (Loss)/profit from discontinued operations attributable to ordinary shareholders (112) (262) 464 Profit attributable to ordinary shareholders 4,394 3,340 2,950 Weighted average number of shares (millions) Weighted average number of ordinary shares outstanding during the year 9,164 9,872 10,792 Effect of dilutive share options and convertible securities (1) 55 57 45 Diluted weighted average number of ordinary shares outstanding during the year 9,219 9,929 10,837 Earnings per ordinary share - continuing operations 49.2p 36.5p 23.0p Earnings per ordinary share - discontinued operations (1.2p) (2.7p) 4.3p Total earnings per share attributable to ordinary shareholders - basic (2) 47.9p 33.8p 27.3p Earnings per ordinary share - fully diluted continuing operations 48.9p 36.2p 22.9p Earnings per ordinary share - fully diluted discontinued operations (1.2p) (2.6p) 4.3p Total earnings per share attributable to ordinary shareholders - fully diluted 47.7p 33.6p 27.2p (1) At the General Meeting and Class Meeting on 25 August 2022, the shareholders approved the proposed special dividend and share consolidation. On 30 August 2022 the issued ordinary share capital was consolidated in the ratio of 14 existing shares for 13 new shares. The average number of shares and earnings per share have been adjusted retrospectively. (2) In 2023, the unrounded Total earnings per share attributable to ordinary shareholders – basic is 47.948 p. The unrounded Earnings per ordinary share – continuing operations was 49.170 p. The unrounded Earnings per ordinary share – discontinued operations was ( 1.222 p). |
Financial instruments - class_2
Financial instruments - classification (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Financial instruments - classification | |
Schedule of classification for financial assets and liabilities | Amortised Other MFVTPL DFV FVOCI cost assets Total Assets £m £m £m £m £m £m Cash and balances at central banks — — — 104,262 — 104,262 Trading assets 45,551 — — — — 45,551 Derivatives (1) 78,904 — — — — 78,904 Settlement balances — — — 7,231 — 7,231 Loans to bank - amortised cost (2) — — — 6,914 — 6,914 Loans to customers - amortised cost (3) — — — 381,433 — 381,433 Other financial assets 703 5 28,699 21,695 — 51,102 Intangible assets — — — — 7,614 7,614 Other assets — — — — 8,760 8,760 Assets of disposal groups (4) — — — — 902 902 31 December 2023 125,158 5 28,699 521,535 17,276 692,673 Cash and balances at central banks — — — 144,832 — 144,832 Trading assets 45,577 — — — — 45,577 Derivatives (1) 99,545 — — — — 99,545 Settlement balances — — — 2,572 — 2,572 Loans to bank - amortised cost (2) — — — 7,139 — 7,139 Loans to customers - amortised cost (3) — — — 366,340 — 366,340 Other financial assets 787 — 16,973 13,135 — 30,895 Intangible assets — — — — 7,116 7,116 Other assets — — — — 9,176 9,176 Assets of disposal groups (4) — — — — 6,861 6,861 31 December 2022 145,909 — 16,973 534,018 23,153 720,053 10 Financial instruments – classification continued Held-for- Amortised Other trading DFV cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (5) — — 22,190 — 22,190 Customer deposits — — 431,377 — 431,377 Settlement balances — — 6,645 — 6,645 Trading liabilities 53,636 — — — 53,636 Derivatives (1) 72,395 — — — 72,395 Other financial liabilities (6) — 2,888 52,201 — 55,089 Subordinated liabilities — 237 5,477 — 5,714 Notes in circulation — — 3,237 — 3,237 Other liabilities (7) — — 748 4,454 5,202 31 December 2023 126,031 3,125 521,875 4,454 655,485 Bank deposits (5) — — 20,441 — 20,441 Customer deposits — — 450,318 — 450,318 Settlement balances — — 2,012 — 2,012 Trading liabilities 52,808 — — — 52,808 Derivatives (1) 94,047 — — — 94,047 Other financial liabilities (6) — 2,377 46,730 — 49,107 Subordinated liabilities — 345 5,915 — 6,260 Notes in circulation — — 3,218 — 3,218 Other liabilities (7) — — 1,205 4,141 5,346 31 December 2022 146,855 2,722 529,839 4,141 683,557 (1) Includes net hedging derivatives assets of £ 114 million (2022 - £ 143 million) and net hedging derivatives liabilities of £ 270 million (2022 - £ 132 million). (2) Includes items in the course of collection from other banks of £ 255 million (2022 - £ 229 million). (3) Includes finance lease receivables of £ 8,731 million (2022 - £ 8,402 million). (4) Includes assets of disposal groups held at FVTPL of £ 841 million (2022 - £ 5,397 million). The portfolio is classified as level 3 in the fair value hierarchy. (5) Includes items in the course of transmission to other banks of £ 92 million (2022 - £ 242 million). (6) The carrying amount of customer deposits designated at fair value through profit or loss is the same as the principal amount for both periods. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. (7) Includes lease liabilities of £ 670 million (2022 - £ 1,118 million), held at amortised cost. |
Schedule of effect of reclassification of mortgages from amortised cost to fair value through profit or loss | Amortised cost MFVTPL Change in value £m £m £m Amounts reclassified on balance sheet Loans to customers (1) 587 606 19 Assets of disposal groups (2) 10,676 10,383 (293) 11,263 10,989 (274) (1) (2) |
Schedule of reconciliation of financial assets | The table below analyses financial assets forming a component of ESG-linked loans and other products with contractual terms that could change the timing or amount of cash flows. 2023 2022 Positive impact on Negative impact on Reduction in Carrying value product margin product margin cash flows Carrying value £bn bps bps £m £bn Sustainability-linked loans 6.5 3.2 3.9 2.5 5.0 Other products 16.1 — — — 8.9 Lending subject to performance triggers 22.6 2.5 13.9 |
Schedule of amount receivable under finance leases | 2023 2022 £m £m Amount receivable under finance leases Within 1 year 3,340 3,235 1 to 2 years 2,358 2,254 2 to 3 years 1,625 1,388 3 to 4 years 900 833 4 to 5 years 388 411 After 5 years 1,079 1,130 Total lease payments 9,690 9,251 Unguaranteed residual values 169 171 Future drawdowns (12) (13) Unearned income (1,025) (889) Present value of lease payments 8,822 8,520 Impairments (91) (118) Net investment in finance leases 8,731 8,402 |
Schedule of financial assets and liabilities that are offset on the balance sheet | Instruments which can be offset Potential for offset not recognised by IFRS Effect of Net amount master after netting Instruments netting agreements and outside IFRS Balance and similar Cash Securities effect of netting Balance Gross offset sheet agreements collateral collateral related collateral agreements sheet total 2023 £m £m £m £m £m £m £m £m £m Derivative assets 99,023 (20,597) 78,426 (60,355) (12,284) (3,408) 2,379 478 78,904 Derivative liabilities 95,734 (23,869) 71,865 (60,355) (6,788) (1,663) 3,059 530 72,395 Net position (1) 3,289 3,272 6,561 — (5,496) (1,745) (680) (52) 6,509 Trading reverse repos 39,573 (16,257) 23,316 (664) — (22,461) 191 378 23,694 Trading repos 42,442 (16,257) 26,185 (664) — (25,520) 1 717 26,902 Net position (2,869) — (2,869) — — 3,059 190 (339) (3,208) Non trading reverse repos 37,477 (9,646) 27,831 (5) — (27,826) — 80 27,911 Non trading repos 23,605 (9,646) 13,959 (5) — (13,954) — 3 13,962 Net position 13,872 — 13,872 — — (13,872) — 77 13,949 2022 Derivative assets 117,606 (18,730) 98,876 (77,365) (14,079) (4,571) 2,861 669 99,545 Derivative liabilities 115,177 (22,111) 93,066 (77,365) (9,761) (1,185) 4,755 981 94,047 Net position (1) 2,429 3,381 5,810 — (4,318) (3,386) (1,894) (312) 5,498 Trading reverse repos 35,612 (14,510) 21,102 (2,445) — (18,458) 199 435 21,537 Trading repos 33,767 (14,510) 19,257 (2,445) — (16,812) — 4,483 23,740 Net position 1,845 — 1,845 — — (1,646) 199 (4,048) (2,203) Non trading reverse repos 25,630 (5,702) 19,928 — — (19,928) — 98 20,026 Non trading repos 16,977 (5,702) 11,275 — — (11,275) — — 11,275 Net position 8,653 — 8,653 — — (8,653) — 98 8,751 (1) Net IFRS offset balance of £ 3,272 million (2022 - £ 3,381 million)relates to variation margin netting reflected on other balance sheet lines . |
Financial instruments - valua_2
Financial instruments - valuation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Financial instruments - classification | |
Schedule of financial assets and liabilities at fair value by valuation hierarchy | 2023 2022 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 — 33,388 209 33,597 — 35,260 395 35,655 Securities 8,447 3,493 14 11,954 7,463 2,458 1 9,922 Derivatives Interest rate 1 43,912 650 44,563 5 52,764 711 53,480 Foreign exchange — 34,096 65 34,161 — 45,715 114 45,829 Other — 72 108 180 — 54 182 236 Other financial assets Loans — 108 657 765 — 172 727 899 Securities 17,848 10,536 258 28,642 10,380 6,278 203 16,861 Total financial assets held at fair value 26,296 125,605 1,961 153,862 17,848 142,701 2,333 162,882 As a % of total fair value assets 17 % 82 % 1 % — 11 % 88 % 1 % — Liabilities Trading liabilities Deposits — 43,126 1 43,127 — 42,486 1 42,487 Debt securities in issue — 706 — 706 — 797 — 797 Short positions 7,936 1,865 2 9,803 7,462 2,062 — 9,524 Derivatives Interest rate — 38,044 439 38,483 2 47,855 678 48,535 Foreign exchange — 33,528 58 33,586 — 45,139 98 45,237 Other — 138 188 326 — 76 199 275 Other financial liabilities Debt securities in issue — 1,605 3 1,608 — 1,327 — 1,327 Other deposits — 1,280 — 1,280 — 1,050 — 1,050 Subordinated liabilities — 237 — 237 — 345 — 345 Total financial liabilities held at fair value 7,936 120,529 691 129,156 7,464 141,137 976 149,577 As a % of total fair value liabilities 6 % 93 % 1 % — 5 % 94 % 1 % — (1) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. (2) For an analysis of debt securities held at mandatory 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. |
Schedule of financial instruments valuation adjustments | 2023 2022 Adjustment £m £m Funding valuation adjustments 132 173 Credit valuation adjustments 236 300 Bid–offer 86 130 Product and deal specific 103 141 Total 557 744 |
Schedule of valuation techniques for unobservable inputs of level 3 financial instruments | 2023 2022 Financial instrument Valuation technique Unobservable inputs Units Low High Low High Trading assets and Other financial assets Loans Price-based Price % — 123 — 113 Discount cash flow Credit spreads bps 49 119 56 114 Discount cash flow Discount margin bps 174 228 174 222 Debt securities Price-based Price % — 119 — 255 Equity Shares Price-based Price GBP — 32,142 — 34,027 Price-based Price % — 30 — 30 Discount cash flow Discount margin % 7 9 6 8 Net asset valuation Fund NAV % 80 120 80 120 Derivative assets and liabilities Credit derivatives Credit derivative pricing Credit spreads bps 13 600 7 530 Option pricing Correlation % (15) 95 (15) 95 Volatility % 30 80 30 80 Upfront points % — 99 — 99 Recovery rate % — 60 — 60 Interest rate & FX Option pricing Correlation % (50) 99 (50) 100 derivatives Volatility % 30 111 30 127 Constant Prepayment Rate % 2 22 2 21 Mean Reversion % — 20 — 92 Inflation volatility % 2 2 1 2 Inflation rate % 2 3 2 3 (1) Valuation for private equity investments may be estimated by looking at past prices of similar stocks and from valuation statements where valuations are usually derived from earnings measures such as EBITDA or net asset value (NAV). Similarly, for equity or bond fund investments, prices may be estimated from valuation or credit statements using NAV or similar measures. (2) NatWest Group does not have any material liabilities measured at fair value that are issued with an inseparable third-party credit enhancement. |
Schedule of financial instruments carried at fair value on the balance sheet by valuation sensitivities for level 3 balances | 2023 2022 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 209 — — 395 10 (10) Securities 14 — — 1 — — Derivatives Interest rate 650 20 (20) 711 30 (30) Foreign exchange 65 — — 114 10 (10) Other 108 10 (10) 182 10 (10) Other financial assets Loans 657 — (40) 727 — (10) Securities 258 20 (50) 203 20 (30) Total financial assets held at fair value 1,961 50 (120) 2,333 80 (100) Liabilities Trading liabilities Deposits 1 — — 1 — — Short positions 2 — — — — — Derivatives Interest rate 439 10 (10) 678 30 (30) Foreign exchange 58 — — 98 — — Other 188 10 (10) 199 — — Other financial liabilities - debt securities in issue 3 — — — — — Total financial liabilities held at fair value 691 20 (20) 976 30 (30) |
Schedule of movement in level 3 assets and liabilities | Other Other Other Other Derivatives trading financial Total Derivatives trading financial Total assets assets (2) assets (3) assets liabilities liabilities (2) liabilities liabilities 2023 £m £m £m £m £m £m £m £m At 1 January 1,007 396 930 2,333 975 1 — 976 Amounts recorded in the income statement (1) (156) (88) 1 (243) (313) — — (313) Amount recorded in the statement of comprehensive income — — 32 32 — — — — Level 3 transfers in 6 15 16 37 7 2 — 9 Level 3 transfers out (5) (32) (190) (227) (9) (2) — (11) Purchases/originations 180 8 275 463 195 2 3 200 Settlements/other decreases (70) (8) (86) (164) (51) — — (51) Sales (137) (65) (52) (254) (116) — — (116) Foreign exchange and other adjustments (2) (3) (11) (16) (3) — — (3) At 31 December 823 223 915 1,961 685 3 3 691 Amounts recorded in the income statement in respect of balances held at period end - unrealised 67 (39) 1 29 (121) — — (121) 2022 At 1 January 918 740 394 2,052 606 3 — 609 Amounts recorded in the income statement (1) 126 31 (14) 143 382 (1) — 381 Amount recorded in the statement of comprehensive income — — (20) (20) — — — — Level 3 transfers in 193 1 532 726 78 3 — 81 Level 3 transfers out (122) (147) (68) (337) (61) (3) — (64) Purchases/originations 355 274 185 814 382 — — 382 Settlements/other decreases (40) (75) — (115) (41) — — (41) Sales (423) (434) (101) (958) (376) (2) — (378) Foreign exchange and other adjustments — 6 22 28 5 1 — 6 At 31 December 1,007 396 930 2,333 975 1 — 976 Amounts recorded in the income statement in respect of balances held at period end - unrealised 126 31 (16) 141 382 (1) — 381 (1) There were £69 million net gains on trading assets and liabilities (2022 - £224 million net losses) recorded in income from trading activities. Net gains on other instruments of £1 million (2022 - £14 million net losses) were recorded in other operating income and interest income as appropriate. (2) Other trading assets and other trading liabilities comprise assets and liabilities held at fair value in trading portfolios. (3) Other financial assets comprise fair value through other comprehensive income, designated as at fair value through profit or loss and other fair value through profit or loss. |
Schedule of carrying value and fair value of financial instruments carried at amortised cost on the balance sheet | Items where fair value Carrying Fair Fair value hierarchy level approximates value value Level 1 Level 2 Level 3 carrying value 2023 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 104.3 104.3 — — — 104.3 Settlement balances 7.2 7.2 — — — 7.2 Loans to banks 6.9 7.0 — 2.2 0.6 4.2 Loans to customers 381.4 373.2 — 27.5 345.7 — Other financial assets - securities 21.7 21.6 4.0 6.6 11.0 — 2022 Financial assets Cash and balances at central banks 144.8 144.8 — — — 144.8 Settlement balances 2.6 2.6 — — — 2.6 Loans to banks 7.1 7.1 — 4.2 2.8 0.1 Loans to customers 366.3 354.5 — 20.3 334.2 — Other financial assets - securities 13.1 12.8 3.6 3.2 6.0 — 2023 Financial liabilities Bank deposits 22.2 22.3 — 15.4 2.7 4.2 Customer deposits 431.4 431.0 — 30.7 48.8 351.5 Settlement balances 6.6 6.6 — — — 6.6 Other financial liabilities - debt securities in issue 52.2 52.2 — 41.7 10.5 — Subordinated liabilities 5.5 5.4 — 5.4 — — Notes in circulation 3.2 3.2 — — — 3.2 2022 Financial liabilities Bank deposits 20.4 20.0 — 13.1 2.2 4.7 Customer deposits 450.3 450.3 — 12.7 30.6 407.0 Settlement balances 2.0 2.0 — — — 2.0 Other financial liabilities - debt securities in issue 46.7 46.1 — 40.7 5.4 — Subordinated liabilities 5.9 5.6 — 5.5 0.1 — Notes in circulation 3.2 3.2 — — — 3.2 |
Financial Instruments - matur_2
Financial Instruments - maturity analysis (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Financial instruments - classification | |
Schedule of residual maturity of financial instruments | 2023 2022 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 104,262 — 104,262 144,832 — 144,832 Trading assets 36,723 8,828 45,551 35,944 9,633 45,577 Derivatives 29,839 49,065 78,904 38,107 61,438 99,545 Settlement balances 7,231 — 7,231 2,572 — 2,572 Loans to banks - amortised cost 6,650 264 6,914 6,872 267 7,139 Loans to customers - amortised cost 87,663 293,770 381,433 84,289 282,051 366,340 Other financial assets 10,192 40,910 51,102 6,128 24,767 30,895 Liabilities Bank deposits 8,954 13,236 22,190 7,799 12,642 20,441 Customer deposits 424,893 6,484 431,377 448,821 1,497 450,318 Settlement balances 6,645 — 6,645 2,012 — 2,012 Trading liabilities 45,349 8,287 53,636 42,760 10,048 52,808 Derivatives 30,721 41,674 72,395 39,331 54,716 94,047 Other financial liabilities 20,310 34,779 55,089 13,796 35,311 49,107 Subordinated liabilities 1,047 4,667 5,714 973 5,287 6,260 Notes in circulation 3,237 — 3,237 3,218 — 3,218 Lease liabilities 102 568 670 137 981 1,118 |
Schedule of undiscounted cash flows payable by contractual maturity | 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2023 £m £m £m £m £m £m Assets by contractual maturity up to 20 years Cash and balances at central banks 104,262 — — — — — Derivatives held for hedging 31 29 128 104 49 49 Settlement balances 7,231 — — — — — Loans to banks - amortised cost 5,234 1,437 23 302 — — Loans to customers - amortised cost 52,175 46,894 81,445 61,465 96,577 114,806 Other financial assets (1) 4,897 6,756 12,304 11,183 10,019 8,063 Finance lease 61 242 735 401 656 359 173,891 55,358 94,635 73,455 107,301 123,277 Liabilities by contractual maturity up to 20 years Bank deposits 8,334 1,279 6,069 8,307 — — Customer deposits 393,363 31,900 6,464 11 14 19 Settlement balances 6,645 — — — — — Derivatives held for hedging 71 175 366 192 92 8 Other financial liabilities 9,094 12,319 18,843 13,818 4,769 346 Subordinated liabilities 72 1,167 2,301 1,512 1,406 342 Other liabilities - Notes in circulation 3,237 — — — — — Lease liabilities 30 79 172 111 175 132 420,846 46,919 34,215 23,951 6,456 847 Guarantees and commitments - notional amount Guarantees (2) 2,820 — — — — — Commitments (3) 112,807 — — — — — 115,627 — — — — — 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2022 £m £m £m £m £m £m Assets by contractual maturity up to 20 years Cash and balances at central banks 144,832 — — — — — Derivatives held for hedging 130 345 28 41 (44) 43 Settlement balances 2,572 — — — — — Loans to banks - amortised cost 5,254 1,621 17 288 — — Loans to customers - amortised cost 50,923 43,417 76,278 55,128 85,038 100,085 Other financial assets (1) 2,771 4,507 8,391 7,835 5,706 2,524 Finance lease 96 267 857 482 549 296 206,578 50,157 85,571 63,774 91,249 102,948 Liabilities by contractual maturity up to 20 years Bank deposits 6,690 1,445 5,662 8,503 89 — Customer deposits 437,830 11,389 1,252 2 14 20 Settlement balances 2,012 — — — — — Derivatives held for hedging 280 (371) 586 306 116 85 Other financial liabilities 6,720 6,640 18,833 13,906 7,361 294 Subordinated liabilities 96 1,073 2,690 1,897 1,541 328 Other liabilities- Notes in circulation 3,218 — — — — — Lease liabilities 41 113 260 203 318 254 456,887 20,289 29,283 24,817 9,439 981 Guarantees and commitments - notional amount Guarantees (2) 3,150 — — — — — Commitments (3) 118,779 — — — — — 121,929 — — — — — (1) Other financial assets exclude equity shares. (2) NatWest Group is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations. NatWest Group expects most guarantees it provides to expire unused. (3) NatWest Group has given commitments to provide funds to customers under undrawn formal facilities, credit lines and other commitments to lend subject to certain conditions being met by the counterparty. NatWest Group does not expect all facilities to be drawn, and some may lapse before drawdown. |
Trading assets and liabilities
Trading assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Trading assets and liabilities | |
Schedule of trading assets and liabilities | 2023 2022 Assets £m £m Loans Reverse repos 23,694 21,537 Collateral given 9,141 13,005 Other loans 762 1,113 Total loans 33,597 35,655 Securities Central and local government - UK 2,729 2,205 - US 2,600 2,345 - Other 3,062 2,799 Financial institutions and corporate 3,563 2,573 Total securities 11,954 9,922 Total 45,551 45,577 Liabilities Deposits Repos 26,902 23,740 Collateral received 15,075 17,680 Other deposits 1,150 1,067 Total deposits 43,127 42,487 Debt securities in issue 706 797 Short positions Central and local government - UK 1,893 2,313 - US 2,071 1,293 - Other 4,049 3,936 Financial institutions and Corporate 1,790 1,982 Total short positions 9,803 9,524 Total 53,636 52,808 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Schedule of derivatives | Notional Asset Liability Traded on Traded on Traded on recognised Traded over recognised Traded over recognised Traded over exchanges the counter Total exchanges the counter Total exchanges the counter Total 2023 £bn £bn £bn £m £m £m £m £m £m Interest rate 819 9,449 10,268 48 44,515 44,563 34 38,449 38,483 - Swaps — 6,533 6,533 — 33,807 33,807 — 27,424 27,424 - Options 510 1,674 2,184 48 10,708 10,756 34 11,025 11,059 - Forwards and futures 309 1,242 1,551 — — — — — — Exchange rate 1 3,119 3,120 — 34,161 34,161 — 33,586 33,586 - Swaps — 449 449 — 8,173 8,173 — 7,370 7,370 - Options 1 674 675 — 4,181 4,181 — 4,197 4,197 - Spot, forwards and futures — 1,996 1,996 — 21,807 21,807 — 22,019 22,019 Credit — 15 15 — 180 180 — 326 326 Equity and commodity — — — — — — — — — Total 820 12,583 13,403 48 78,856 78,904 34 72,361 72,395 2022 Interest rate 707 10,035 10,742 113 53,367 53,480 33 48,502 48,535 - Swaps — 7,201 7,201 — 39,039 39,039 — 32,992 32,992 - Options 296 1,418 1,714 113 14,328 14,441 33 15,510 15,543 - Forwards and futures 411 1,416 1,827 — — — — — — Exchange rate 2 3,166 3,168 — 45,829 45,829 — 45,237 45,237 - Swaps — 438 438 — 11,840 11,840 — 10,430 10,430 - Options 2 835 837 — 6,375 6,375 — 6,647 6,647 - Spot, forwards and futures — 1,893 1,893 — 27,614 27,614 — 28,160 28,160 Credit — 15 15 — 236 236 — 275 275 Equity and commodity — — — — — — — — — Total 709 13,216 13,925 113 99,432 99,545 33 94,014 94,047 |
Schedule of derivatives in hedge accounting relationships | 2023 2022 Changes in fair Changes in fair value used for value used for Notional Assets Liabilities hedge ineffectiveness (1) Notional Assets Liabilities hedge ineffectiveness (1) £bn £m £m £m £bn £m £m £m Fair value hedging Interest rate contracts (2) 67.6 1,139 2,607 406 58.7 1,554 3,009 482 Cash flow hedging Interest rate contracts 140.0 1,924 4,970 1,211 167.6 2,681 6,207 (3,342) Exchange rate contracts 16.9 112 254 (12) 6.3 142 112 (3) Net investment hedging Exchange rate contracts 0.3 2 7 (3) 0.5 1 9 4 224.8 3,177 7,838 1,602 233.1 4,378 9,337 (2,859) IFRS netting and clearing house settlements (3,063) (7,568) (4,235) (9,205) 114 270 143 132 (1) The change in fair value used for hedge ineffectiveness includes instruments that were derecognised in the year. (2) The hedged risk includes inflation risk. |
Schedule of hedge ineffectiveness recognized in other operating income | 2023 2022 2021 £m £m £m Fair value hedging Loss on hedged items attributable to the hedged risk (364) (442) (846) Gain on the hedging instruments 406 482 897 Fair value hedging ineffectiveness 42 40 51 Cash flow hedging Interest rate risk 10 (60) (26) Cash flow hedging ineffectiveness 10 (60) (26) Total 52 (20) 25 |
Schedule of period in which the hedging contracts ends | 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years Over 10 years Total 2023 £bn £bn £bn £bn £bn £bn £bn Fair value hedging Interest rate risk (1) Hedging assets 0.1 1.7 7.1 9.0 5.9 4.7 28.5 Hedging liabilities 2.7 3.3 13.4 11.3 7.7 0.7 39.1 2022 Fair value hedging Interest rate risk (1) Hedging assets 0.5 1.9 4.7 4.9 4.2 3.6 19.8 Hedging liabilities 1.0 2.9 14.6 10.3 9.6 0.5 38.9 2023 Cash flow hedging Interest rate risk Hedging assets 3.9 14.5 33.9 22.8 10.1 — 85.2 Hedging liabilities 0.8 3.9 39.1 10.1 0.3 0.6 54.8 Exchange rate risk Hedging assets 0.3 0.7 1.6 — — — 2.6 Hedging liabilities 8.4 0.8 2.4 2.5 0.2 — 14.3 2022 Cash flow hedging Interest rate risk Hedging assets 6.6 9.4 46.5 21.9 10.1 — 94.5 Hedging liabilities 17.3 26.8 15.7 5.1 7.5 0.7 73.1 Exchange rate risk Hedging assets 0.1 — — — — — 0.1 Hedging liabilities — 1.1 2.8 2.1 0.2 — 6.2 (1) The hedged risk includes inflation risk. |
Schedule of average fixed rates for cash flow hedges | 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years Over 10 years Total 2023 % % % % % % % Average fixed interest rate Hedging assets 1.16 2.46 1.19 3.30 1.77 3.12 2.04 Hedging liabilities 0.93 2.54 4.36 2.28 2.36 4.50 3.79 2022 Average fixed interest rate Hedging assets 1.36 1.98 1.71 2.04 1.02 3.12 1.72 Hedging liabilities 1.27 0.95 2.75 1.03 2.68 4.55 1.63 |
Schedule of average foreign exchange rates applicable across hedging relationships | 2023 2022 INR/GBP 105.03 100.54 USD/GBP 1.28 1.29 CHF/GBP 1.08 1.15 JPY/GBP 170.54 132.89 JPY/USD 129.75 128.29 NOK/USD 9.21 9.21 |
Schedule of hedged items and related hedging instruments | Changes in fair Carrying value Impact on value used as of hedged hedged items a basis to assets and included in determine liabilities carrying value ineffectiveness (1) 2023 £m £m £m Fair value hedging - interest rate (2) Loans to banks and customers - amortised cost 5,663 (316) 167 Other financial assets - securities 22,896 174 636 Total 28,559 (142) 803 Bank and customer deposits 745 (3) (6) Other financial liabilities - debt securities in issue 36,305 (1,151) (1,023) Subordinated liabilities 5,346 (320) (138) Total 42,396 (1,474) (1,167) 2022 Fair value hedging - interest rate (2) Loans to banks and customers - amortised cost 5,764 (526) (1,236) Other financial assets - securities 12,897 (922) (2,525) Total (3) 18,661 (1,448) (3,761) Bank and customer deposits 565 (3) 3 Other financial liabilities - debt securities in issue 35,856 (2,222) 2,790 Subordinated liabilities 5,504 (547) 526 Total 41,925 (2,772) 3,319 Changes in fair value Carrying value of used as a basis to hedged assets and liabilities determine ineffectiveness (1) 2023 £m £m Cash flow hedging - interest rate Loans to banks and customers - amortised cost (4) 84,583 (2,796) Other financial assets - securities 623 (22) Total 85,206 (2,818) Bank and customer deposits 54,675 1,610 Other financial liabilities - debt securities in issue 156 7 Total 54,831 1,617 Cash flow hedging - exchange rate Loans to banks and customers - amortised cost (4) 583 — Other financial assets - securities 1,839 — Total 2,422 — Other financial liabilities - debt securities in issue 11,460 9 Subordinated liabilities — — Other 201 3 Total 11,661 12 2022 Cash flow hedging - interest rate Loans to banks and customers - amortised cost (4) 93,212 5,263 Other financial assets - securities 1,176 73 Total 94,388 5,336 Bank and customer deposits 72,610 (2,008) Other financial liabilities - debt securities in issue 571 (46) Total 73,181 (2,054) Cash flow hedging - exchange rate Loans to banks and customer - amortised cost (4) — — Other financial assets - securities — — Total — — Other financial liabilities - debt securities in issue 4,141 (2) Subordinated liabilities — — Other 204 5 Total 4,345 3 (1) The change in fair value used for hedge ineffectiveness includes instruments that were derecognised in the year. (2) The hedged risk includes inflation risk. (3) Carrying values include £ 57 million (2022 - £ 61 million) adjustment for discontinued fair value hedges. (4) Includes cash and balances at central banks. |
Schedule of analysis of cash flow hedge reserve and foreign exchange hedge reserve | 2023 2022 Foreign Foreign Cash flow exchange Cash flow exchange hedge reserve hedge reserve hedge reserve hedge reserve £m £m £m £m Continuing Interest rate risk (2,330) — (3,576) — Foreign exchange risk 1 (18) 16 (85) De-designated Interest rate risk (304) — (297) — Foreign exchange risk 4 (771) 20 (880) Total (2,629) (789) (3,837) (965) 2023 2022 Foreign Foreign Cash flow exchange hedge Cash flow exchange hedge hedge reserve reserve hedge reserve reserve £m £m £m £m Amount recognised in equity Interest rate risk 137 — (2,997) (64) Foreign exchange risk 50 107 24 (202) Total 187 107 (2,973) (266) Amount transferred from equity to earnings Interest rate risk to net interest income 1,112 — (252) — Interest rate risk to non interest income (1) (10) — (21) — Interest rate risk to operating expenses — — (14) — Foreign exchange risk to net interest income (74) — (29) — Foreign exchange risk to non interest income (9) 69 15 7 Foreign exchange risk to operating expenses 2 — (3) — Total 1,021 69 (304) 7 (1) There was £10 million (2022 - £21 million) reclassified with the cash flow reserve to earnings due to forecasted cash flows that are no longer expected to occur. |
Loan impairment provisions (Tab
Loan impairment provisions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loan impairment provisions | |
Schedule of loan exposure and impairment metrics | 2023 2022 £m £m Loans - amortised cost and FVOCI Stage 1 348,586 325,224 Stage 2 37,891 46,833 Stage 3 5,563 5,096 Of which: individual 1,031 1,121 Of which: collective 4,532 3,975 392,040 377,153 ECL provisions (1) - Stage 1 709 632 - Stage 2 976 1,043 - Stage 3 1,960 1,759 Of which: individual 332 287 Of which: collective 1,628 1,472 3,645 3,434 ECL provision coverage (2) - Stage 1 (%) 0.20 0.19 - Stage 2 (%) 2.58 2.23 - Stage 3 (%) 35.23 34.52 0.93 0.91 Continuing operations Impairment (releases)/losses ECL (release)/charge (3,4) 578 337 Stage 1 (397) (290) Stage 2 645 393 Stage 3 330 234 Of which: individual 89 54 Of which: collective 241 180 Amounts written off 319 482 Of which: individual 42 168 Of which: collective 277 314 (1) Includes loans to customers and banks. (2) Includes £ 9 million (2022 - £3 million) related to assets classified as FVOCI and £ 0.1 billion (2022 - £0.1 billion) related to off-balance sheet exposures. (3) ECL provisions coverage is calculated as ECL provisions divided by loans – amortised cost and FVOCI. It is calculated on loans and total ECL provisions, including ECL for other (non-loan) assets and unutilised exposure. Some segments with a high proportion of debt securities or unutilised exposure may result in a not meaningful coverage ratio. (4) Includes a £ 16 million release (2022 - £3 million charge) related to other financial assets, of which £6 million charge (2022 - nil ) related to assets classified as FVOCI; and £ 9 million release (2022 - £5 million release) 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 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 £103.1 billion (2022 – £143.3 billion) and debt securities of £50.1 billion (2022 – £29.9 billion). |
Other financial assets (Tables)
Other financial assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other financial assets | |
Schedule of other financial assets | Debt securities Central and local government Other Equity UK US Other debt Total shares Loans Total 2023 £m £m £m £m £m £m £m £m Mandatory fair value through profit or loss — — — 1 1 2 700 703 Designated at fair value — — 3 2 5 — — 5 Fair value through other comprehensive income (1) 6,441 5,517 5,738 10,627 28,323 311 65 28,699 Amortised cost 2,889 647 35 18,124 21,695 — — 21,695 Total 9,330 6,164 5,776 28,754 50,024 313 765 51,102 2022 Mandatory fair value through profit or loss — — — 2 2 3 782 787 Designated at fair value — — — — — — — — Fair value through other comprehensive income (1) 802 7,175 1,757 6,765 16,499 357 117 16,973 Amortised cost 2,562 937 54 9,582 13,135 — — 13,135 Total 3,364 8,112 1,811 16,349 29,636 360 899 30,895 (1) Upon initial recognition, NatWest Group occasionally irrevocably designates some of its equity investments as equity instruments at FVOCI when they meet the definition of equity under IAS 32 Financial instruments: presentation, are not held for trading or they are held for strategic purposes. Such classification is determined on an instrument-by-instrument basis. Gains and losses on these equity instruments are not recycled to the income statement and dividends are recognised in profit or loss except when they represent a recovery of part of the cost of the instrument, in which case such gains are recorded in OCI. Equity instruments at FVOCI are not subject to an impairment assessment. |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets | |
Schedule of Intangible assets | 2023 2022 Goodwill Other (1) Total Goodwill Other (1) Total Cost £m £m £m £m £m £m At 1 January 9,931 3,763 13,694 9,939 3,050 12,989 Currency translation and other adjustments — — — (8) (3) (11) Acquisitions of companies and businesses 159 37 196 — — — Additions — 762 762 — 743 743 Disposals and write-off of fully amortised assets — (115) (115) — (27) (27) At 31 December 10,090 4,447 14,537 9,931 3,763 13,694 Accumulated amortisation and impairment At 1 January 4,409 2,169 6,578 4,417 1,849 6,266 Currency translation and other adjustments — — — (8) (4) (12) Disposals and write-off of fully amortised assets — (116) (116) — (17) (17) Impairment of intangible assets 1 22 23 — — — Amortisation charge for the year — 438 438 — 341 341 At 31 December 4,410 2,513 6,923 4,409 2,169 6,578 Net book value at 31 December 5,680 1,934 7,614 5,522 1,594 7,116 (1) Principally consists of internally generated software. |
Other assets (Tables)
Other assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other assets | |
Schedule of other assets | 2023 2022 £m £m Interests in associates (1) 668 688 Property, plant and equipment (2) 4,227 4,240 Pension schemes in net surplus (Note 5) 201 318 Prepayments 350 340 Accrued income 292 327 Tax recoverable 49 279 Deferred tax (Note 7) 1,894 2,178 Acceptances 575 237 Other 504 569 Other assets 8,760 9,176 (1) Includes interest in Business Growth Fund £ 658 million (2022 - £677 million). (2) The estimated useful lives of NatWest Group's property, plant and equipment are: freehold buildings and long leasehold 50 years , short leaseholds for unexpired period of lease, property adaptation costs 10 to 15 years , computer equipment up to 5 years and other equipment 4 to 15 years . |
Other financial liabilities (Ta
Other financial liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other financial liabilities | |
Schedule of other financial liabilities | 2023 2022 £m £m Customer deposits - designated as at fair value through profit or loss 1,280 1,050 Debt securities in issue - MRELs 21,660 22,265 - Other medium term notes 17,843 16,419 - Commercial paper and certificates of deposit 11,321 5,672 - Covered bonds 2,122 2,842 - Securitisation 863 859 Total 55,089 49,107 |
Subordinated liabilities (Table
Subordinated liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Subordinated liabilities | |
Schedule of subordinated liabilities | 2023 2022 £m £m Dated loan capital 5,573 5,968 Undated loan capital 22 173 Preference shares 119 119 5,714 6,260 |
Schedule of issuances and redemptions | |
Other liabilities (Tables)
Other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other liabilities. | |
Schedule of other liabilities | 2023 2022 Other liabilities £m £m Lease liabilities 670 1,118 Provisions for liabilities and charges 990 1,138 Retirement benefit liabilities (Note 5) 99 98 Accruals 1,411 1,407 Deferred income 402 355 Current tax 332 55 Deferred tax (Note 7) 141 227 Acceptances 575 237 Other liabilities (1) 582 711 Total 5,202 5,346 (1) Other liabilities include liabilities of disposal groups of £ 3 million (2022 - £ 15 million). Refer to Note 8 for further information. |
Schedule of provisions for liabilities and charges | Litigation Customer and other Commitments redress regulatory Property and guarantees Other (1) Total Provisions for liabilities and charges £m £m £m £m £m £m At 1 January 2023 431 240 154 87 226 1,138 Expected credit loss impairment release — — — (9) — (9) Currency translation and other movements (5) (9) — — (6) (20) Charge to income statement 276 21 41 — 136 474 Release to income statement (36) (33) (64) — (28) (161) Provisions utilised (180) (63) (32) — (157) (432) At 31 December 2023 486 156 99 78 171 990 (1) Other materially comprises provisions relating to restructuring costs. |
Share capital and other equity
Share capital and other equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share capital and other equity | |
Schedule of allotted, called up and fully paid shares | Number of shares 2023 2022 2023 2022 Allotted, called up and fully paid £m £m 000s 000s Ordinary shares of £1.0769 (1) 9,683 10,539 8,991,737 9,786,024 Cumulative preference shares of £1 0.5 0.5 483.0 483.0 (1) The nominal value of ordinary shares without rounding is £1.076923076923077 per share. |
Schedule of movement in allotted, called up and fully paid ordinary shares | Number of Movement in allotted, called up and fully paid ordinary shares £m shares 000s At 1 January 2022 11,468 11,467,982 Share cancellation (929) (929,188) Share consolidation — (752,770) At 31 December 2022 10,539 9,786,024 Share cancellation (856) (794,287) At 31 December 2023 9,683 8,991,737 |
Schedule of other equity instruments | 2023 2022 2021 £m £m £m Additional Tier 1 notes US$1.15 billion 8.000% notes callable August 2025 (1) 735 735 735 US$1.50 billion 6.000% notes callable December 2025 - June 2026 (2) 1,220 1,220 1,220 GBP£1.00 billion 5.125% notes callable May - November 2027 (3) 998 998 998 GBP£0.40 billion – March 2028 callable (4) 399 399 399 US$0.75 billion – June 2031 callable (5) 538 538 538 3,890 3,890 3,890 (1) Issued in August 2015. In the event of conversion, converted into ordinary shares at a price of $3.314 per share. (2) Issued in June 2020. In the event of conversion, converted into ordinary shares at a price of $2.191 (translated at applicable exchange rate) per share. (3) Issued in November 2020. In the event of conversion, converted into ordinary shares at a price of £ 1.764 per share. (4) Issued in March 2021. In the event of conversion, converted into ordinary shares at a price of £ 1.764 per share. (5) Issued in June 2021. In the event of conversion, converted into ordinary shares at a price of $2.462 (translated at applicable exchange rate) per share. |
Structured entities (Tables)
Structured entities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Structured entities | |
Schedule of interest in unconsolidated structured entities | 2023 2022 Asset-backed Investment Asset-backed Investment securitisation funds and securitisation funds and vehicles other Total vehicles other Total £m £m £m £m £m £m Assets Trading assets 303 311 614 616 137 753 Derivatives 134 — 134 343 — 343 Loans to customers 2,701 999 3,700 2,431 648 3,079 Other financial assets 13,096 1,062 14,158 6,334 849 7,183 Total 16,234 2,372 18,606 9,724 1,634 11,358 Liabilities Derivatives 213 17 230 388 22 410 Total 213 17 230 388 22 410 Off balance sheet Liquidity facilities/loan commitments 1,873 396 2,269 1,723 320 2,043 Guarantees — 127 127 — 107 107 Total 1,873 523 2,396 1,723 427 2,150 Maximum exposure 17,894 2,878 20,772 11,059 2,039 13,098 |
Asset transfers (Tables)
Asset transfers (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Asset transfers | |
Schedule of assets subject to securities repurchase agreements or security lending transactions | 2023 2022 The following assets have failed derecognition (1) £m £m Trading assets 7,907 6,668 Loans to bank - amortised cost 10 16 Loans to customers - amortised cost 281 398 Other financial assets 8,764 2,901 Total 16,962 9,983 (1) Associated liabilities were £16,522 million (2022 - £9,501 million). |
Schedule of assets pledged as collateral | 2023 2022 Assets pledged against liabilities £m £m Trading assets 10,976 15,062 Loans to banks - amortised cost 63 66 Loans to customers - amortised cost 21,611 17,493 Other financial assets (1) 6,506 3,351 Total 39,156 35,972 (1) Includes assets pledged for pension derivatives and £ 482 million of debt securities under the continuing control of NWB Plc. This follows the agreement between NWB Plc and the Group Pension Fund to establish a bankruptcy remote reservoir trust to hold these assets. Refer to Note 5 for additional information. |
Capital resources (Tables)
Capital resources (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Capital resources | |
Schedule of regulatory capital | 2023 2022 £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity 37,157 36,488 Other equity instruments (3,890) (3,890) 33,267 32,598 Regulatory adjustments and deductions Own credit (10) (58) Defined benefit pension fund adjustment (143) (227) Cash flow hedging reserve 1,899 2,771 Deferred tax assets (979) (912) Prudential valuation adjustments (279) (275) Goodwill and other intangible assets (7,614) (7,116) Foreseeable ordinary dividends (1,013) (967) Adjustment for trust assets (1) (365) (365) Foreseeable charges (525) (800) Adjustment under IFRS 9 transitional arrangements 202 361 Insufficient coverage for non-performing exposures — (18) (8,827) (7,606) CET1 capital 24,440 24,992 Additional Tier 1 (AT1) capital Qualifying instruments and related share premium 3,875 3,875 AT1 capital 3,875 3,875 Tier 1 capital 28,315 28,867 Qualifying Tier 2 capital Qualifying instruments and related share premium 5,189 4,953 Qualifying instruments issued by subsidiaries and held by third parties — 82 Other regulatory adjustments 128 18 Tier 2 capital 5,317 5,053 Total regulatory capital 33,632 33,920 (1) |
Memorandum items (Tables)
Memorandum items (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Memorandum items | |
Schedule of contingent liabilities and commitments | 2023 2022 £m £m Contingent liabilities and commitments Guarantees 2,810 3,150 Other contingent liabilities 1,380 1,855 Standby facilities, credit lines and other commitments 115,441 121,576 Total 119,631 126,581 |
Schedule of contractual obligations for future expenditure | 2023 2022 £m £m Capital expenditure on property, plant and equipment 38 8 Contracts to purchase goods or services (1) 1,121 677 1,159 685 (1) Of which due within 1 year: £379 million (2022 - £321 million). |
Non-cash and other items (Table
Non-cash and other items (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Non-cash and other items | |
Schedule of non-cash items and movement in operating assets and liabilities | 2023 2022 2021 £m £m £m Impairment losses/(releases) 572 266 (1,335) Depreciation and amortisation 934 833 923 Change in fair value taken to profit or loss of other financial assets (584) 1,267 1,771 Change in fair value taken to profit or loss on other financial liabilities and subordinated liabilities 831 (2,400) (1,083) Foreign exchange recycling (gains)/losses (484) (5) 10 Elimination of foreign exchange differences 312 10 2,446 Income receivable on other financial assets (1,415) (585) (378) Loss/(profit) on sale of other financial assets 44 172 (118) Profit on sale of subsidiaries and associates — — (48) Share of loss/(profit) of associates 9 30 (216) Loss on sale of other assets and net assets and liabilities 125 154 23 Interest payable on MRELs and subordinated liabilities 1,352 1,103 964 (Gain)/loss on redemption of own debt (3) 161 145 Charges and releases on provisions 313 248 478 Change in fair value of cash flow hedges 1,021 (304) (161) Other non-cash items 59 48 (13) Defined benefit pension schemes 122 205 215 Non-cash and other items 3,208 1,203 3,623 Change in operating assets and liabilities Change in trading assets 327 14,991 7,751 Change in derivative assets 20,826 3,621 59,697 Change in settlement balance assets (4,659) (431) 156 Change in loans to banks 752 (202) (252) Change in loans to customers (15,626) (7,628) 2,721 Change in other financial assets 132 (328) (128) Change in other assets (213) (255) (57) Change in assets of disposal groups 412 (4,117) (9,015) Change in bank deposits 1,749 (5,838) 5,673 Change in customer deposits (18,964) (29,492) 48,071 Change in settlement balance liabilities 4,633 (56) (350) Change in trading liabilities 828 (11,790) (7,658) Change in derivative liabilities (21,652) (6,788) (59,870) Change in other financial liabilities 6,564 989 938 Change in notes in circulation 19 171 392 Change in other liabilities (807) (1,294) (1,463) Change in operating assets and liabilities (25,679) (48,447) 46,606 |
Analysis of the net investmen_2
Analysis of the net investment in business interests and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Analysis of the net investment in business interests and intangible assets | |
Schedule of the analysis of the net investment in business interests and intangible assets | 2023 2022 2021 £m £m £m Fair value given for business acquired (139) — — Acquisition of interest in associates — (1) — Additional investment in associates (5) — (51) Net assets and liabilities purchased — — (3,128) Net outflow of cash in respect of acquisitions (144) (1) (3,179) Disposal of net assets and liabilities 5,560 6,270 114 (Loss)/profit on disposal of net assets and liabilities (87) (106) 55 Net inflow of cash in respect of disposals 5,473 6,164 169 Dividends received from associate 16 — — Net cash expenditure on intangible assets (744) (743) (479) Net inflow/(outflow) of cash 4,601 5,420 (3,489) |
Analysis of changes in financ_2
Analysis of changes in financing during the year (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Analysis of changes in financing during the year | |
Schedule of the analysis of changes in financing during the year | Share capital, share premium, and paid-in equity Subordinated liabilities MRELs 2023 2022 2021 2023 2022 2021 2023 2022 2021 £m £m £m £m £m £m £m £m £m At 1 January 15,590 16,519 18,239 6,260 8,429 9,962 22,265 23,423 20,873 Issue of paid-in equity — — 937 — — — — — — Issue of subordinated liabilities — — — 611 648 1,634 — — — Issue of MRELs — — — — — 3,973 3,721 3,383 Redemption of subordinated liabilities — — — (1,250) (3,693) (4,765) — — — Interest paid on subordinated liabilities — — — (439) (374) (321) — — — Maturity and redemption of MRELs — — — — — — (4,236) (4,992) — Interest paid on MRELs — — — — — — (844) (703) (647) Net cash flows from financing activities — — 937 (1,078) (3,419) (3,452) (1,107) (1,974) 2,736 Ordinary shares issued — — 87 — — — — — — Shares repurchased (856) (929) (698) — — — — — — Effects of foreign exchange — — — (166) 597 (18) (987) 1,889 (190) Changes in fair value of subordinated liabilities and MRELs — — — 230 (594) (434) 601 (1,806) (649) Preference shares reclassified to subordinated liabilities — — — — 750 — — — — Paid-in equity reclassified to subordinated liabilities — — (2,046) — — 1,915 — — — (Gain)/loss on redemption of own debt — — — (3) 161 145 — — — Interest payable on subordinated liabilities and MRELs — — — 464 370 311 888 733 653 Other — — — 7 (34) — — — — At 31 December 14,734 15,590 16,519 5,714 6,260 8,429 21,660 22,265 23,423 |
Analysis of cash and cash equ_2
Analysis of cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Analysis of cash and cash equivalents | |
Schedule of the analysis of cash and cash equivalents | 2023 2022 2021 £m £m £m Cash and balances at central banks 104,262 144,832 177,757 Trading assets 8,851 8,551 7,137 Other financial assets 139 19 16 Loans to banks (1) 5,572 5,047 5,796 Cash and cash equivalents 118,824 158,449 190,706 (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £ 4,434 million (2022 - £ 4,895 million; 2021 - £ 4,293 million). |
Directors' and key management_2
Directors' and key management remuneration (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Directors' and key management remuneration | |
Schedule of directors' remuneration | 2023 2022 Directors' remuneration £000 £000 Non-executive directors emoluments 1,574 1,685 Chairman and executive directors emoluments 6,408 5,804 7,982 7,489 Amounts receivable under long-term incentive plans and share option plans 2,708 542 Total 10,690 8,031 |
Schedule of compensation of key management | 2023 2022 £000 £000 Short-term benefits 21,098 22,175 Post-employment benefits 741 732 Share-based payments 7,264 2,547 29,103 25,454 |
Transactions with directors a_2
Transactions with directors and key management (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Transactions with directors and key management | |
Schedule of transactions with directors and key management | At 31 December 2023 2022 £000 £000 Loans to customers - amortised cost 11,406 12,137 Customer deposits 55,254 47,866 |
Related parties (Tables)
Related parties (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related parties | |
Schedule of transactions with associates, joint ventures and equity investees | Associates and Equity Joint Ventures Shares (1) Total 31 December 2023 £m £m £m Investments 668 145 813 Loans to customers- amortised cost — 13 13 Customer deposits 2 10 12 Settlement balances — — — Other comprehensive income — (8) (8) Other operating income (11) — (11) 31 December 2022 Investments 688 149 837 Loans to customers- amortised cost — — — Customer deposits 1 4 5 Settlement balances — 34 34 Other comprehensive income — 11 11 Other operating income (30) — (30) (1) |
Accounting policies (Details)
Accounting policies (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2023 GBP (£) item | |
Intangible assets and goodwill | |
Impairment loss | £ | £ 0 |
Credit cards | |
Loan impairment provisions | |
Write off period | 4 years |
Number of arrear cycles after which the financial asset is written off | item | 12 |
Minimum | Computer software | |
Intangible assets and goodwill | |
Estimated useful economic lives | 3 years |
Minimum | Other acquired intangibles | |
Intangible assets and goodwill | |
Estimated useful economic lives | 3 years |
Maximum | Retail mortgages | |
Loan impairment provisions | |
Write off period | 5 years |
Maximum | Overdrafts and other unsecured loans | |
Loan impairment provisions | |
Write off period | 6 years |
Maximum | Commercial loans | |
Loan impairment provisions | |
Write off period | 5 years |
Maximum | Computer software | |
Intangible assets and goodwill | |
Estimated useful economic lives | 10 years |
Maximum | Other acquired intangibles | |
Intangible assets and goodwill | |
Estimated useful economic lives | 5 years |
Net interest income (Details)
Net interest income (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Net interest income | ||||
Balances at central banks and loans to banks - amortised cost | £ 3,737 | £ 1,987 | £ 445 | [1] |
Loans to customers - amortised cost | 15,553 | 10,085 | 8,536 | [1] |
Other financial assets | 1,736 | 565 | 253 | [1] |
Interest receivable | 21,026 | 12,637 | 9,234 | [1],[2] |
Balances deposits | 1,039 | 379 | 204 | [1] |
Customer deposits | 5,276 | 785 | 556 | [1] |
Other financial liabilities | 2,977 | 1,196 | 670 | [1] |
Subordinated liabilities | 464 | 370 | 267 | [1] |
Internal funding of trading businesses | 221 | 65 | 2 | [1] |
Interest payable | 9,977 | 2,795 | 1,699 | [1],[2] |
Net interest income | 11,049 | 9,842 | 7,535 | [1],[2] |
Finance income on the net investment in leases | £ 484 | £ 314 | £ 298 | |
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements . Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Non-interest income (Details)
Non-interest income (Details) - GBP (£) £ in Millions | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Disclosure of detailed information about financial instruments [line items] | ||||||
Net fees and commissions | £ 2,330 | £ 2,292 | £ 2,120 | [1] | ||
Trading income | ||||||
Foreign exchange | 270 | 305 | 364 | [1] | ||
Interest rate | 595 | 752 | (130) | [1] | ||
Credit | (72) | 17 | 83 | [1] | ||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | ||||||
-debt securities in issue | (2) | 42 | 6 | [1] | ||
Equity, commodities and other | 3 | 17 | ||||
Income from trading activities | 794 | 1,133 | 323 | [1],[2] | ||
Gain/(loss) on redemption of own debt | 3 | (161) | (145) | [1] | ||
Rental income on operating lease assets and investment property | 234 | 230 | 225 | [1] | ||
Changes in fair value of financial assets and liabilities designated at fair value through profit or loss | (150) | 17 | (8) | [1] | ||
Changes in fair value of other financial assets at fair value through profit or loss | 50 | (45) | 5 | [1] | ||
Hedge ineffectiveness | 52 | (20) | 25 | [1] | ||
Loss on disposal of amortised cost assets and liabilities | (5) | (15) | (15) | [1] | ||
(Loss)/profit on disposal of fair value through other comprehensive income assets | (43) | (168) | 117 | [1] | ||
Loss on sale of property, plant and equipment | (21) | (5) | (30) | [1] | ||
Share of loss/(profit) of associates | (9) | (30) | 216 | [1] | ||
Profit on disposal of subsidiaries and associates | [1] | 48 | ||||
Foreign exchange recycling gains/(losses) | 484 | 5 | (10) | [1] | ||
Other income | (16) | 81 | 23 | [1] | ||
Other operating income | 579 | (111) | 451 | [1],[2] | ||
Non-interest income | £ 3,703 | 3,314 | £ 2,894 | [1],[2] | ||
Derivatives notional (£bn) | 13,925,000 | |||||
Profit from insurance liabilities | £ 92 | |||||
Foreign exchange reserve | UBIDAC | ||||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | ||||||
Recycled to profit or loss on disposal of businesses | £ (460) | |||||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Operating expenses (Details)
Operating expenses (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Operating expenses | ||||
Salaries | £ 2,483 | £ 2,250 | £ 2,295 | |
Bonus awards | 353 | 334 | 267 | |
Temporary and contract costs | 199 | 234 | 240 | |
Social security costs | 352 | 328 | 300 | |
Pension costs | 313 | 363 | 354 | |
- defined benefit schemes | 122 | 205 | 215 | |
- defined contribution schemes | 191 | 158 | 139 | |
Other | 201 | 207 | 220 | |
Staff costs | 3,901 | 3,716 | 3,676 | [1] |
Premises and equipment | 1,153 | 1,112 | 1,133 | [1] |
UK bank levy | 109 | 101 | 99 | |
Depreciation and amortisation | 934 | 833 | 923 | [1] |
Other administrative expenses | 1,899 | 1,925 | 1,927 | |
Administrative expenses | 4,095 | 3,971 | 4,082 | |
Operating expenses | 7,996 | 7,687 | 7,758 | [1] |
Impairment of goodwill | 85 | |||
Depreciation on right of use assets | £ 104 | £ 119 | £ 167 | |
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Operating expenses - Continuing
Operating expenses - Continuing operations (Details) - employee | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number and average number of employees | |||
Average number of employees | 61,500 | 60,000 | 59,200 |
Average number of temporary employees | 2,100 | 2,500 | 2,500 |
Number of employees | 61,600 | 61,000 | 57,800 |
UK | |||
Number and average number of employees | |||
Number of employees | 41,500 | 41,200 | 40,600 |
USA | |||
Number and average number of employees | |||
Number of employees | 300 | 300 | 300 |
India | |||
Number and average number of employees | |||
Number of employees | 16,900 | 15,700 | 13,500 |
Poland | |||
Number and average number of employees | |||
Number of employees | 1,500 | 1,500 | 1,400 |
Republic of Ireland | |||
Number and average number of employees | |||
Number of employees | 400 | 1,400 | 1,200 |
Rest of the World | |||
Number and average number of employees | |||
Number of employees | 1,000 | 900 | 800 |
Ulster Bank RoI | |||
Number and average number of employees | |||
Number of employees | 500 | 2,200 | 2,400 |
Operating segment | Retail Banking | |||
Number and average number of employees | |||
Number of employees | 14,300 | 15,100 | 16,000 |
Operating segment | Private Banking | |||
Number and average number of employees | |||
Number of employees | 2,400 | 2,300 | 2,000 |
Operating segment | Commercial & Institutional | |||
Number and average number of employees | |||
Number of employees | 12,400 | 12,200 | 11,700 |
Operating segment | Central items & other | |||
Number and average number of employees | |||
Number of employees | 32,500 | 31,400 | 28,100 |
Discontinued operations | Ulster Bank RoI | |||
Number and average number of employees | |||
Number of employees | 0 | 400 | 700 |
Operating expenses - Share-base
Operating expenses - Share-based payments (Details) £ / shares in Units, £ in Millions, Option in Millions, EquityInstruments in Millions | 12 Months Ended | ||
Dec. 31, 2023 GBP (£) EquityInstruments Option £ / shares | Dec. 31, 2022 GBP (£) EquityInstruments Option £ / shares | Dec. 31, 2021 GBP (£) EquityInstruments Option £ / shares | |
Shares awarded | |||
Share-based payments, market price measurement period preceding grant date | 5 days | ||
Maximum | |||
Shares awarded | |||
Share-based payments, volatility measurement period | 5 years | ||
Sharesave | |||
Average exercise price | |||
At 1 January | £ / shares | £ 1.63 | £ 1.61 | £ 1.64 |
Granted | £ / shares | 1.42 | 1.86 | 1.80 |
Exercised | £ / shares | 1.44 | 1.88 | 1.76 |
Cancelled | £ / shares | 1.72 | 1.60 | 2.02 |
At 31 December | £ / shares | £ 1.59 | £ 1.63 | £ 1.61 |
Shares under option | |||
At 1 January | Option | 99 | 95 | 96 |
Granted | Option | 43 | 25 | 24 |
Exercised | Option | (23) | (15) | (10) |
Cancelled | Option | (5) | (6) | (15) |
At 31 December | Option | 114 | 99 | 95 |
Options exercisable, vesting period | 6 months | ||
Options exercisable | Option | 19 | 5.1 | 6 |
Weighted average share price | £ / shares | £ 2.20 | £ 2.59 | £ 2.19 |
Weighted average remaining contractual life of outstanding share options | 2 years 3 months | 2 years | 2 years 1 month 6 days |
Fair value of of options granted during the period | £ 27.3 | £ 22.1 | £ 17 |
Shares awarded | |||
Share-based payments, market price measurement period preceding grant date | 3 days | ||
Sharesave | Minimum | |||
Shares under option | |||
Exercise price of outstanding share options | £ / shares | £ 1.12 | £ 1.12 | £ 1.12 |
Sharesave | Maximum | |||
Shares under option | |||
Exercise price of outstanding share options | £ / shares | £ 1.89 | £ 2.27 | £ 2.27 |
Deferred performance awards | |||
Shares under option | |||
Options exercisable, vesting period | 3 years | ||
Value at grant | |||
At 1 January | £ 93 | £ 132 | £ 169 |
Granted | 52 | 46 | 61 |
Forfeited | (2) | (4) | (10) |
Vested | (67) | (81) | (88) |
At 31 December | £ 76 | £ 93 | £ 132 |
Shares awarded | |||
At 1 January (in shares) | EquityInstruments | 46 | 65 | 77 |
Granted (in shares) | EquityInstruments | 20 | 20 | 32 |
Forfeited (in shares) | EquityInstruments | (1) | (2) | (5) |
Vested/exercised (in shares) | EquityInstruments | (30) | (37) | (39) |
At 31 December (in shares) | EquityInstruments | 35 | 46 | 65 |
Long-term incentives | |||
Value at grant | |||
At 1 January | £ 49 | £ 44 | £ 50 |
Granted | 11 | 16 | 6 |
Vested | (10) | (10) | (12) |
Lapsed | (1) | (1) | |
At 31 December | £ 49 | £ 49 | £ 44 |
Shares awarded | |||
At 1 January (in shares) | EquityInstruments | 23 | 21 | 24 |
Granted (in shares) | EquityInstruments | 5 | 7 | 3 |
Vested/exercised (in shares) | EquityInstruments | (4) | (4) | (6) |
Lapsed (in shares) | EquityInstruments | (1) | (1) | |
At 31 December (in shares) | EquityInstruments | 23 | 23 | 21 |
Market value of awards vested and exercised | £ 9.5 | £ 11.7 | £ 13 |
Operating expenses - Bonus awar
Operating expenses - Bonus awards (Details) - GBP (£) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses | |||
Total Bonus awards | £ 356,000,000 | £ 370,000,000 | £ 301,000,000 |
Bonus awards as a % of operating profit before tax | 5% | 7% | |
Proportion of bonus awards that are deferred | 88% | 89% | |
Bonus awards | |||
Operating expenses | |||
Total Bonus awards | £ 356,000,000 | £ 370,000,000 | |
Change % | (4.00%) | ||
Non-deferred cash awards | |||
Operating expenses | |||
Total Bonus awards | £ 43,000,000 | 40,000,000 | |
Change % | 8% | ||
Total deferred bonus awards | |||
Operating expenses | |||
Total Bonus awards | £ 313,000,000 | 330,000,000 | |
Change % | (5.00%) | ||
Deferred cash awards | |||
Operating expenses | |||
Total Bonus awards | £ 262,000,000 | £ 270,000,000 | |
Change % | (3.00%) | ||
Proportion of bonus awards that are deferred | 84% | 82% | |
Deferred share awards | |||
Operating expenses | |||
Total Bonus awards | £ 51,000,000 | £ 60,000,000 | |
Change % | (15.00%) | ||
Proportion of bonus awards that are deferred | 16% | 18% | |
Maximum | |||
Operating expenses | |||
Cash awards | £ 2,000 |
Operating expenses - Bonus aw_2
Operating expenses - Bonus awards reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses | |||
Bonus awarded | £ 356 | £ 370 | £ 301 |
Less: deferral of charge for amounts awarded for current year | (114) | (127) | (99) |
Income statement charge for amounts awarded in current year | 242 | 243 | 202 |
Add: current year charge for amounts deferred from prior years | 115 | 94 | 80 |
Less: forfeiture of amounts deferred from prior years | (4) | (3) | (15) |
Income statement charge for amounts deferred from prior years | 111 | 91 | 65 |
Income statement charge for bonus awards | £ 353 | £ 334 | £ 267 |
Operating expenses - Bonus aw_3
Operating expenses - Bonus awards - Actual and Expected (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses | |||||
Bonus awards deferred from 2021 and earlier | £ 16 | £ 94 | £ 80 | ||
Bonus awards deferred from 2022 | 99 | ||||
Less: forfeiture of amounts deferred from prior years | (4) | (3) | (15) | ||
Bonus awards for 2023 deferred | 0 | ||||
Income statement charge for amounts deferred from prior years | £ 111 | £ 91 | £ 65 | ||
Forecast | |||||
Operating expenses | |||||
Bonus awards deferred from 2021 and earlier | £ 5 | £ 7 | |||
Bonus awards deferred from 2022 | 9 | 9 | |||
Less: forfeiture of amounts deferred from prior years | 0 | 0 | |||
Bonus awards for 2023 deferred | 16 | 98 | |||
Income statement charge for amounts deferred from prior years | £ 30 | £ 114 |
Segmental analysis - Operating
Segmental analysis - Operating profit or (loss) before tax (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Segmental analysis | |||||
Net interest income | £ 11,049 | £ 9,842 | £ 7,535 | [1],[2] | |
Net fees and commissions | 2,330 | 2,292 | 2,120 | [3] | |
Total income | 14,752 | 13,156 | 10,429 | [1] | |
Depreciation and amortisation | (934) | (833) | (923) | [1] | |
Impairment (losses)/releases | (578) | (337) | 1,173 | [1] | |
Operating profit before tax | [4] | 6,178 | 5,132 | 3,844 | [1] |
Operating segment | |||||
Segmental analysis | |||||
Net interest income | 11,049 | 9,842 | 7,535 | ||
Net fees and commissions | 2,330 | 2,292 | 2,120 | ||
Other non-interest income | 1,373 | 1,022 | 774 | ||
Total income | 14,752 | 13,156 | 10,429 | ||
Depreciation and amortisation | (934) | (833) | (923) | ||
Other operating expenses | (7,062) | (6,854) | (6,835) | ||
Impairment (losses)/releases | (578) | (337) | 1,173 | ||
Operating profit before tax | 6,178 | 5,132 | 3,844 | ||
Retail Banking | |||||
Segmental analysis | |||||
Net fees and commissions | 427 | 422 | 377 | ||
Total income | 4,170 | 4,956 | 4,933 | ||
Retail Banking | Operating segment | |||||
Segmental analysis | |||||
Net interest income | 5,496 | 5,224 | 4,074 | ||
Net fees and commissions | 427 | 422 | 377 | ||
Other non-interest income | 8 | (6) | |||
Total income | 5,931 | 5,646 | 4,445 | ||
Depreciation and amortisation | (1) | (85) | |||
Other operating expenses | (2,827) | (2,593) | (2,428) | ||
Impairment (losses)/releases | (465) | (229) | 36 | ||
Operating profit before tax | 2,638 | 2,824 | 1,968 | ||
Private Banking | |||||
Segmental analysis | |||||
Net fees and commissions | 249 | 250 | 258 | ||
Total income | 327 | 778 | 801 | ||
Private Banking | Operating segment | |||||
Segmental analysis | |||||
Net interest income | 710 | 777 | 480 | ||
Net fees and commissions | 249 | 250 | 258 | ||
Other non-interest income | 31 | 29 | 78 | ||
Total income | 990 | 1,056 | 816 | ||
Depreciation and amortisation | (1) | ||||
Other operating expenses | (684) | (622) | (520) | ||
Impairment (losses)/releases | (14) | 2 | 54 | ||
Operating profit before tax | 291 | 436 | 350 | ||
Commercial & Institutional | |||||
Segmental analysis | |||||
Net fees and commissions | 1,654 | 1,580 | 1,440 | ||
Total income | 7,730 | 5,920 | 4,634 | ||
Commercial & Institutional | Operating segment | |||||
Segmental analysis | |||||
Net interest income | 5,044 | 4,171 | 2,974 | ||
Net fees and commissions | 1,654 | 1,580 | 1,440 | ||
Other non-interest income | 723 | 662 | 424 | ||
Total income | 7,421 | 6,413 | 4,838 | ||
Depreciation and amortisation | (154) | (161) | (173) | ||
Other operating expenses | (3,937) | (3,583) | (3,584) | ||
Impairment (losses)/releases | (94) | (122) | 1,160 | ||
Operating profit before tax | 3,236 | 2,547 | 2,241 | ||
Central Items and other | |||||
Segmental analysis | |||||
Net fees and commissions | 40 | 45 | |||
Total income | 2,525 | 1,502 | 61 | ||
Central Items and other | Operating segment | |||||
Segmental analysis | |||||
Net interest income | (201) | (330) | 7 | ||
Net fees and commissions | 40 | 45 | |||
Other non-interest income | 611 | 331 | 278 | ||
Total income | 410 | 41 | 330 | ||
Depreciation and amortisation | (778) | (672) | (665) | ||
Other operating expenses | 386 | (56) | (303) | ||
Impairment (losses)/releases | (5) | 12 | (77) | ||
Operating profit before tax | £ 13 | £ (675) | £ (715) | ||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements . Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated financial statements. |
Segmental analysis - Total reve
Segmental analysis - Total revenue (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segmental analysis | |||
Total revenue | £ 25,382 | £ 16,574 | £ 12,702 |
Retail Banking | |||
Segmental analysis | |||
Total revenue | 7,366 | 5,773 | 5,415 |
Private Banking | |||
Segmental analysis | |||
Total revenue | 1,157 | 874 | 792 |
Commercial & Institutional | |||
Segmental analysis | |||
Total revenue | 12,519 | 7,258 | 5,189 |
Central Items and other | |||
Segmental analysis | |||
Total revenue | 4,340 | 2,669 | 1,306 |
Inter-segmental | Retail Banking | |||
Segmental analysis | |||
Total revenue | (5) | (18) | |
Inter-segmental | Private Banking | |||
Segmental analysis | |||
Total revenue | (1,000) | (389) | (127) |
Inter-segmental | Commercial & Institutional | |||
Segmental analysis | |||
Total revenue | 1,602 | 395 | (102) |
Inter-segmental | Central Items and other | |||
Segmental analysis | |||
Total revenue | (597) | (6) | 247 |
Operating segment | |||
Segmental analysis | |||
Total revenue | 25,382 | 16,574 | 12,702 |
Operating segment | Retail Banking | |||
Segmental analysis | |||
Total revenue | 7,371 | 5,773 | 5,433 |
Operating segment | Private Banking | |||
Segmental analysis | |||
Total revenue | 2,157 | 1,263 | 919 |
Operating segment | Commercial & Institutional | |||
Segmental analysis | |||
Total revenue | 10,917 | 6,863 | 5,291 |
Operating segment | Central Items and other | |||
Segmental analysis | |||
Total revenue | £ 4,937 | £ 2,675 | £ 1,059 |
Segmental analysis - Total inco
Segmental analysis - Total income (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Segmental analysis | ||||
Total income | £ 14,752 | £ 13,156 | £ 10,429 | [1] |
Retail Banking | ||||
Segmental analysis | ||||
Total income | 4,170 | 4,956 | 4,933 | |
Private Banking | ||||
Segmental analysis | ||||
Total income | 327 | 778 | 801 | |
Commercial & Institutional | ||||
Segmental analysis | ||||
Total income | 7,730 | 5,920 | 4,634 | |
Central Items and other | ||||
Segmental analysis | ||||
Total income | 2,525 | 1,502 | 61 | |
Inter-segmental | Retail Banking | ||||
Segmental analysis | ||||
Total income | (1,761) | (690) | 488 | |
Inter-segmental | Private Banking | ||||
Segmental analysis | ||||
Total income | (663) | (278) | (15) | |
Inter-segmental | Commercial & Institutional | ||||
Segmental analysis | ||||
Total income | 309 | (493) | (204) | |
Inter-segmental | Central Items and other | ||||
Segmental analysis | ||||
Total income | 2,115 | 1,461 | (269) | |
Operating segment | ||||
Segmental analysis | ||||
Total income | 14,752 | 13,156 | 10,429 | |
Operating segment | Retail Banking | ||||
Segmental analysis | ||||
Total income | 5,931 | 5,646 | 4,445 | |
Operating segment | Private Banking | ||||
Segmental analysis | ||||
Total income | 990 | 1,056 | 816 | |
Operating segment | Commercial & Institutional | ||||
Segmental analysis | ||||
Total income | 7,421 | 6,413 | 4,838 | |
Operating segment | Central Items and other | ||||
Segmental analysis | ||||
Total income | £ 410 | £ 41 | £ 330 | |
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Segmental analysis - Net fees a
Segmental analysis - Net fees and commissions (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Fees and commissions receivable | ||||
Payment services | £ 1,030 | £ 1,024 | £ 967 | |
Credit and debit card fees | 676 | 661 | 522 | |
Lending and financing | 729 | 701 | 670 | |
Brokerage | 83 | 93 | 96 | |
Investment management, trustee and fiduciary services | 266 | 269 | 280 | |
Underwriting fees | 123 | 120 | 127 | |
Other | 76 | 47 | 32 | |
Total | 2,983 | 2,915 | 2,694 | [1] |
Fees and commissions payable | (653) | (623) | (574) | [1] |
Net fees and commissions | 2,330 | 2,292 | 2,120 | [2] |
Operating segment | ||||
Fees and commissions receivable | ||||
Net fees and commissions | 2,330 | 2,292 | 2,120 | |
Retail Banking | ||||
Fees and commissions receivable | ||||
Payment services | 324 | 314 | 306 | |
Credit and debit card fees | 400 | 401 | 344 | |
Lending and financing | 14 | 17 | 13 | |
Brokerage | 35 | 43 | 48 | |
Investment management, trustee and fiduciary services | 2 | 4 | 3 | |
Other | 4 | |||
Total | 779 | 779 | 714 | |
Fees and commissions payable | (352) | (357) | (337) | |
Net fees and commissions | 427 | 422 | 377 | |
Retail Banking | Operating segment | ||||
Fees and commissions receivable | ||||
Net fees and commissions | 427 | 422 | 377 | |
Private Banking | ||||
Fees and commissions receivable | ||||
Payment services | 32 | 25 | 35 | |
Credit and debit card fees | 13 | 15 | 10 | |
Lending and financing | 5 | 8 | 10 | |
Brokerage | 6 | 6 | 6 | |
Investment management, trustee and fiduciary services | 209 | 219 | 230 | |
Other | 5 | 3 | 35 | |
Total | 270 | 276 | 326 | |
Fees and commissions payable | (21) | (26) | (68) | |
Net fees and commissions | 249 | 250 | 258 | |
Private Banking | Operating segment | ||||
Fees and commissions receivable | ||||
Net fees and commissions | 249 | 250 | 258 | |
Commercial & Institutional | ||||
Fees and commissions receivable | ||||
Payment services | 671 | 642 | 577 | |
Credit and debit card fees | 260 | 227 | 149 | |
Lending and financing | 709 | 673 | 643 | |
Brokerage | 42 | 44 | 42 | |
Investment management, trustee and fiduciary services | 45 | 46 | 45 | |
Underwriting fees | 123 | 120 | 127 | |
Other | 73 | 88 | 109 | |
Total | 1,923 | 1,840 | 1,692 | |
Fees and commissions payable | (269) | (260) | (252) | |
Net fees and commissions | 1,654 | 1,580 | 1,440 | |
Commercial & Institutional | Operating segment | ||||
Fees and commissions receivable | ||||
Net fees and commissions | 1,654 | 1,580 | 1,440 | |
Central Items and other | ||||
Fees and commissions receivable | ||||
Payment services | 3 | 43 | 49 | |
Credit and debit card fees | 3 | 18 | 19 | |
Lending and financing | 1 | 3 | 4 | |
Investment management, trustee and fiduciary services | 10 | 2 | ||
Other | (6) | (44) | (112) | |
Total | 11 | 20 | (38) | |
Fees and commissions payable | £ (11) | 20 | 83 | |
Net fees and commissions | 40 | 45 | ||
Central Items and other | Operating segment | ||||
Fees and commissions receivable | ||||
Net fees and commissions | £ 40 | £ 45 | ||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Segmental analysis - Assets and
Segmental analysis - Assets and liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Segmental analysis | |||
Assets | £ 692,673 | £ 720,053 | £ 781,992 |
Liabilities | 655,485 | 683,557 | 740,189 |
Retail Banking | |||
Segmental analysis | |||
Assets | 228,684 | 226,375 | 209,973 |
Liabilities | 191,936 | 192,282 | 192,715 |
Private Banking | |||
Segmental analysis | |||
Assets | 26,894 | 29,867 | 29,854 |
Liabilities | 37,806 | 41,491 | 39,388 |
Commercial & Institutional | |||
Segmental analysis | |||
Assets | 384,958 | 404,817 | 425,718 |
Liabilities | 359,766 | 383,768 | 411,757 |
Central Items and other | |||
Segmental analysis | |||
Assets | 52,137 | 58,994 | 116,447 |
Liabilities | £ 65,977 | £ 66,016 | £ 96,329 |
Segmental analysis - Goodwill (
Segmental analysis - Goodwill (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Analysis of goodwill | ||
Carrying value of goodwill | £ 5,680 | £ 5,522 |
Retail Banking | ||
Analysis of goodwill | ||
Carrying value of goodwill | 2,607 | 2,607 |
Commercial & Institutional | ||
Analysis of goodwill | ||
Carrying value of goodwill | 2,905 | 2,906 |
Private Banking | ||
Analysis of goodwill | ||
Carrying value of goodwill | 9 | 9 |
Central Items and other | ||
Analysis of goodwill | ||
Carrying value of goodwill | £ 159 | £ 0 |
Segmental analysis - Geographic
Segmental analysis - Geographical segments (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Geographical segments | |||||
Total revenue | £ 25,382 | £ 16,574 | £ 12,702 | ||
Interest receivable | 21,026 | 12,637 | 9,234 | [1],[2] | |
Interest payable | (9,977) | (2,795) | (1,699) | [1],[2] | |
Net fees and commissions | 2,330 | 2,292 | 2,120 | [3] | |
Trading income | 794 | 1,133 | 323 | [1],[3] | |
Other operating income | 579 | (111) | 451 | ||
Total income | 14,752 | 13,156 | 10,429 | [1] | |
Operating (loss)/profit before tax | [4] | 6,178 | 5,132 | 3,844 | [1] |
Total assets | 692,673 | 720,053 | 781,992 | ||
Total liabilities | 655,485 | 683,557 | 740,189 | ||
Total | 119,631 | 126,581 | 125,367 | ||
UK | |||||
Geographical segments | |||||
Total revenue | 24,096 | 15,795 | 12,100 | ||
Interest receivable | 20,192 | 12,242 | 8,949 | ||
Interest payable | (9,500) | (2,567) | (1,483) | ||
Net fees and commissions | 2,052 | 1,983 | 1,820 | ||
Trading income | 704 | 1,208 | 247 | ||
Other operating income | 556 | (140) | 387 | ||
Total income | 14,004 | 12,726 | 9,920 | ||
Operating (loss)/profit before tax | 6,196 | 5,716 | 4,143 | ||
Total assets | 610,831 | 589,758 | 693,221 | ||
Total liabilities | 594,250 | 579,476 | 676,684 | ||
Total | 112,199 | 117,915 | 117,225 | ||
USA | |||||
Geographical segments | |||||
Total revenue | 167 | 117 | 87 | ||
Interest receivable | 39 | 37 | 20 | ||
Interest payable | (1) | (2) | (2) | ||
Net fees and commissions | 49 | 44 | 27 | ||
Trading income | 66 | 1 | 53 | ||
Other operating income | (10) | 14 | 2 | ||
Total income | 143 | 94 | 100 | ||
Operating (loss)/profit before tax | 45 | (46) | 48 | ||
Total assets | 23,725 | 25,979 | 21,776 | ||
Total liabilities | 22,106 | 27,039 | 23,286 | ||
Total | 1 | ||||
Europe | |||||
Geographical segments | |||||
Total revenue | 1,016 | 558 | 482 | ||
Interest receivable | 774 | 344 | 257 | ||
Interest payable | (472) | (221) | (211) | ||
Net fees and commissions | 172 | 207 | 231 | ||
Trading income | 1 | (104) | (1) | ||
Other operating income | 30 | 12 | 62 | ||
Total income | 505 | 238 | 338 | ||
Operating (loss)/profit before tax | (149) | (620) | (387) | ||
Total assets | 56,001 | 101,164 | 64,415 | ||
Total liabilities | 37,506 | 75,092 | 38,835 | ||
Total | 7,411 | 8,649 | 8,114 | ||
RoW | |||||
Geographical segments | |||||
Total revenue | 103 | 104 | 33 | ||
Interest receivable | 21 | 14 | 8 | ||
Interest payable | (4) | (5) | (3) | ||
Net fees and commissions | 57 | 58 | 42 | ||
Trading income | 23 | 28 | 24 | ||
Other operating income | 3 | 3 | |||
Total income | 100 | 98 | 71 | ||
Operating (loss)/profit before tax | 86 | 82 | 40 | ||
Total assets | 2,116 | 3,152 | 2,580 | ||
Total liabilities | 1,623 | 1,950 | 1,384 | ||
Total | £ 21 | £ 17 | £ 27 | ||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements . Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated financial statements. |
Pensions (Details)
Pensions (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Pensions | |
Portion of final pensionable salary, considered for pension | 1.67% |
Maximum number of years of service for pension | 40 years |
Maximum annual salary inflation | 2% |
Minimum | |
Pensions | |
Period during which defined benefit schemes have been closed to new entrants | 10 years |
Pensions - Investment strategy
Pensions - Investment strategy (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pensions | ||
Derivatives notional (£bn) | £ 13,925,000 | |
Fair value of assets | £ 78,904 | 99,545 |
Fair value of liabilities | 72,395 | 94,047 |
Interest rate swaps | ||
Pensions | ||
Derivatives notional (£bn) | 6,533,000 | 7,201,000 |
Fair value of assets | 33,807 | 39,039 |
Fair value of liabilities | £ 27,424 | £ 32,992 |
Main Pension Scheme | ||
Pensions | ||
Percentage of total plan assets | 91% | 91% |
Equities | 6.80% | 7.80% |
Index-linked bonds | 36.70% | 37.70% |
Government bonds | 13.30% | 18.40% |
Corporate and other bonds | 25.60% | 22% |
Real estate | 4.50% | 6% |
Derivatives | 2.70% | 8.20% |
Cash and other assets | 10.40% | (0.10%) |
Total | 100% | 100% |
Percentage of collateral | 128% | |
Maximum percentage of indirect investment by trustees | 5% | |
Main Pension Scheme | Quoted plan assets | ||
Pensions | ||
Equities | 0.10% | 0.10% |
Index-linked bonds | 36.70% | 37.70% |
Government bonds | 13.30% | 18.40% |
Corporate and other bonds | 19.20% | 15.30% |
Total | 69.30% | 71.50% |
Main Pension Scheme | Unquoted plan assets | ||
Pensions | ||
Equities | 6.70% | 7.70% |
Corporate and other bonds | 6.40% | 6.70% |
Real estate | 4.50% | 6% |
Derivatives | 2.70% | 8.20% |
Cash and other assets | 10.40% | (0.10%) |
Total | 30.70% | 28.50% |
Main Pension Scheme | Swap | ||
Pensions | ||
Derivatives notional (£bn) | £ 81,000 | £ 124,000 |
Derivatives, amount contributed to fair value of plan assets | 714 | 2,642 |
Main Pension Scheme | Inflation rate swaps | ||
Pensions | ||
Derivatives notional (£bn) | 29,000 | 21,000 |
Fair value of assets | 1,929 | 1,873 |
Fair value of liabilities | 940 | 990 |
Main Pension Scheme | Interest rate swaps | ||
Pensions | ||
Derivatives notional (£bn) | 52,000 | 103,000 |
Fair value of assets | 3,121 | 14,317 |
Fair value of liabilities | 3,394 | 12,546 |
Main Pension Scheme | Currency forwards | ||
Pensions | ||
Derivatives notional (£bn) | 13,000 | 12,000 |
Fair value of assets | 235 | 310 |
Fair value of liabilities | 34 | 113 |
Main Pension Scheme | Equity and bond put options | ||
Pensions | ||
Fair value of assets | 2 | |
Fair value of liabilities | 4 | 70 |
Main Pension Scheme | Other | ||
Pensions | ||
Derivatives notional (£bn) | 1,000 | 1,000 |
Fair value of assets | 8 | 14 |
Fair value of liabilities | 20 | £ 19 |
AA section of the group pension fund | ||
Pensions | ||
Bulk annuity policy, amount contributed to fair value of plan assets | £ 546 | |
Percentage of defined benefit obligation covered by value of bulk annuity policy | 99% | |
Residual assets, amount contributed to fair value of plan assets | £ 145 |
Pensions - Changes in value of
Pensions - Changes in value of net pension assets/(liability) (Details) - GBP (£) £ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2022 | |
Pensions | |||
Balance at beginning of year | £ (220) | £ (488) | |
Currency translation and other adjustments | (4) | (2) | |
Net interest expense | (15) | ||
Current service cost | (105) | ||
Past service cost | 8 | ||
Loss on curtailments and settlements | 24 | ||
Income statement - operating expenses | 122 | 205 | |
Return on plan assets excluding recognised interest income | 1,182 | ||
Experience gains and losses | (1,599) | ||
Effect of changes in actuarial financial assumptions | 776 | ||
Effect of changes in actuarial demographic assumptions | (436) | ||
Asset ceiling adjustments | (2,841) | ||
Statement of comprehensive income | (280) | (840) | |
Contributions by employer | 280 | 775 | |
Balance at end of year | (102) | (220) | £ (220) |
Main Pension Scheme | |||
Pensions | |||
Net interest expense | (5) | ||
Current service cost | (76) | ||
Past service cost | 2 | ||
Income statement - operating expenses | 73 | 140 | |
Return on plan assets excluding recognised interest income | 1,042 | ||
Experience gains and losses | (1,531) | ||
Effect of changes in actuarial financial assumptions | 585 | ||
Effect of changes in actuarial demographic assumptions | (379) | ||
Asset ceiling adjustments | (2,643) | ||
Statement of comprehensive income | (136) | (568) | |
Contributions by employer | 209 | 708 | |
Contributions expected to be paid to plan in 2024 | 207 | ||
Contributions resulting from ring-fencing arrangements | 1,000 | ||
Fair value of plan assets | |||
Pensions | |||
Balance at beginning of year | (37,598) | (57,787) | |
Currency translation and other adjustments | 21 | (78) | |
Net interest expense | (1,841) | ||
Income statement - operating expenses | (1,841) | (1,041) | |
Return on plan assets excluding recognised interest income | 1,182 | ||
Statement of comprehensive income | (1,182) | (20,326) | |
Contributions by employer | 278 | 775 | |
Contributions by plan participants and other scheme members | (12) | (13) | |
Assets/liabilities extinguished upon settlement | 50 | 113 | |
Benefits paid | 1,365 | 1,657 | |
Balance at end of year | (37,111) | (37,598) | (37,598) |
Fair value of plan assets | Main Pension Scheme | |||
Pensions | |||
Balance at beginning of year | (34,016) | (52,021) | |
Net interest expense | (1,677) | ||
Income statement - operating expenses | (1,677) | (932) | |
Return on plan assets excluding recognised interest income | 1,042 | ||
Statement of comprehensive income | (1,042) | (18,180) | |
Contributions by employer | 209 | 708 | |
Contributions by plan participants and other scheme members | (7) | (7) | |
Benefits paid | 1,229 | 1,472 | |
Balance at end of year | (33,638) | (34,016) | (34,016) |
Present value of defined benefit obligation | |||
Pensions | |||
Balance at beginning of year | 27,601 | 46,808 | |
Currency translation and other adjustments | (21) | 65 | |
Net interest expense | 1,341 | ||
Current service cost | (105) | ||
Past service cost | 8 | ||
Loss on curtailments and settlements | 24 | ||
Income statement - operating expenses | 1,478 | 1,055 | |
Experience gains and losses | (1,599) | ||
Effect of changes in actuarial financial assumptions | 776 | ||
Effect of changes in actuarial demographic assumptions | (436) | ||
Statement of comprehensive income | (1,939) | 18,570 | |
Contributions by employer | 2 | ||
Contributions by plan participants and other scheme members | 12 | 13 | |
Assets/liabilities extinguished upon settlement | (50) | (113) | |
Benefits paid | (1,365) | (1,657) | |
Balance at end of year | 29,592 | 27,601 | 27,601 |
Present value of defined benefit obligation | Main Pension Scheme | |||
Pensions | |||
Balance at beginning of year | 24,733 | 42,020 | |
Net interest expense | 1,208 | ||
Current service cost | (76) | ||
Past service cost | 2 | ||
Income statement - operating expenses | 1,286 | 892 | |
Experience gains and losses | (1,531) | ||
Effect of changes in actuarial financial assumptions | 585 | ||
Effect of changes in actuarial demographic assumptions | (379) | ||
Statement of comprehensive income | (1,737) | 16,714 | |
Contributions by plan participants and other scheme members | 7 | 7 | |
Benefits paid | (1,229) | (1,472) | |
Balance at end of year | 26,534 | 24,733 | 24,733 |
Asset ceiling/minimum funding | |||
Pensions | |||
Balance at beginning of year | 9,777 | 10,491 | |
Currency translation and other adjustments | (4) | 11 | |
Net interest expense | 485 | ||
Income statement - operating expenses | 485 | 191 | |
Asset ceiling adjustments | (2,841) | ||
Statement of comprehensive income | 2,841 | 916 | |
Balance at end of year | 7,417 | 9,777 | 9,777 |
Asset ceiling/minimum funding | Main Pension Scheme | |||
Pensions | |||
Balance at beginning of year | 9,283 | 10,001 | |
Net interest expense | 464 | ||
Income statement - operating expenses | 464 | 180 | |
Asset ceiling adjustments | (2,643) | ||
Statement of comprehensive income | 2,643 | 898 | |
Balance at end of year | £ 7,104 | £ 9,283 | £ 9,283 |
Pensions - Amounts in the Finan
Pensions - Amounts in the Financial statements (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Pensions | |||||
Fund assets at fair value | £ 37,111 | £ 37,598 | £ 57,787 | £ 57,249 | £ 51,925 |
Present value of fund liabilities | (29,592) | (27,601) | (46,808) | (48,864) | (44,115) |
Net surplus | 7,519 | 9,997 | 10,979 | £ 8,385 | £ 7,810 |
Net assets of schemes in surplus | 201 | 318 | |||
Net liabilities of schemes in deficit | (99) | (98) | |||
Retirement benefit liability | (102) | (220) | (488) | ||
Asset ceiling/minimum funding | |||||
Pensions | |||||
Retirement benefit liability | £ 7,417 | £ 9,777 | £ 10,491 |
Pensions - Funding and contribu
Pensions - Funding and contributions by the Group and most significant assumptions used for the Main Scheme (Details) - GBP (£) £ in Millions | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2018 | |
Pensions | ||||
Fixed interest swap and guilt yields plus percentage | 0.64% | |||
Life expectancy of male employees after retirement who are currently at age 60 | 27 years 8 months 12 days | |||
Life expectancy of female employees after retirement who are currently at age 60 | 29 years 4 months 24 days | |||
Life expectancy of male employees after retirement who are currently aged 40 | 28 years 10 months 24 days | |||
Life expectancy of female employees after retirement who are currently aged 40 | 30 years 8 months 12 days | |||
Main Pension Scheme | ||||
Pensions | ||||
Period of funding valuations (in years) | 3 years | |||
Funding level, as percent | 104% | |||
Pension liabilities | £ 49,000 | £ 49,000 | ||
Surplus as per actuarial assumptions | £ 2,000 | 2,000 | ||
Average cost (as a percent) | 49% | |||
Future contribution to funding if distribution to shareholders are made, capped amount | £ 1,500 | |||
Contributions Resulting From Ring Fencing Arrangements | £ 1,000 | |||
Discount rate | 4.80% | 5% | 5% | |
Inflation assumption (RPI) | 3.10% | 3.20% | 3.20% | |
Rate of increase in salaries | 1.80% | 1.80% | 1.80% | |
Rate of increase in deferred pensions | 3.20% | 3.20% | 3.20% | |
Rate of increase in pensions in payment | 2.40% | 2.50% | 2.50% | |
Proportion of pension converted to a cash lump sum at retirement | 18% | 18% | 18% | |
Longevity at age 60 for current pensioners (years), males | 26 years 9 months 18 days | 27 years 3 months 18 days | ||
Longevity at age 60 for current pensioners (years), females | 28 years 7 months 6 days | 29 years 1 month 6 days | ||
Longevity at age 60 for future pensioners currently aged 40 (years), males | 27 years 8 months 12 days | 28 years 3 months 18 days | ||
Longevity at age 60 for future pensioners currently aged 40 (years), females | 29 years 6 months | 30 years 1 month 6 days | ||
Main Pension Scheme | Maximum | Distributions to shareholders of an equal amount are made [Member] | ||||
Pensions | ||||
Future contribution to funding if distribution to shareholders are made | £ 500 |
Pensions - Sensitivities of the
Pensions - Sensitivities of the present value of defined benefit obligation (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pensions | ||
Weighted average duration of defined benefit obligation | 14 years | 15 years 3 months 18 days |
Main Pension Scheme | ||
Pensions | ||
Active members | 7.50% | 8.40% |
Deferred members | 41.90% | 41% |
Pensioners and dependants | 50.60% | 50.60% |
Total proportions to the different classes of scheme | 100% | 100% |
Discount rate | Main Pension Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.50% | 0.50% |
(Decrease)/ increase in value of assets | £ (2,292) | £ (2,689) |
(Decrease)/ increase in value of liabilities | 1,746 | 1,766 |
Increase in net pension (obligations)/assets | £ 546 | £ 923 |
Inflation | Main Pension Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of assets | £ 811 | £ 963 |
(Decrease)/ increase in value of liabilities | (578) | (632) |
Increase in net pension (obligations)/assets | £ (233) | £ (331) |
Credit spreads | Main Pension Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.50% | 0.50% |
Decrease in actuarial assumption (as a percent) | 0.50% | 0.50% |
(Decrease)/ increase in value of assets | £ (12) | £ (6) |
(Decrease)/ increase in value of liabilities | 1,746 | 1,766 |
Increase in net pension (obligations)/assets | £ (1,734) | £ (1,760) |
Percentage of larger reasonably possible increase in actuarial assumption | 0.50% | 0.50% |
Credit spreads | Actuarial assumption of longevity, decrease by 2 years | Main Pension Scheme | ||
Pensions | ||
Increase in net pension (obligations)/assets | £ 3,500 | £ 3,700 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | 1,900 | 2,100 |
Increase in net pension (obligations)/assets | 300 | |
Credit spreads | Actuarial assumption of longevity, decrease by 1 year | Main Pension Scheme | ||
Pensions | ||
Increase in net pension (obligations)/assets | 2,600 | 2,800 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | 900 | 1,100 |
Increase in net pension (obligations)/assets | (1,000) | (900) |
Credit spreads | Actuarial assumption of longevity, no change | Main Pension Scheme | ||
Pensions | ||
Increase in net pension (obligations)/assets | 1,700 | 1,800 |
Increase in net pension (obligations)/assets | (2,000) | (2,000) |
Credit spreads | Actuarial assumption of longevity, increase by 1 year | Main Pension Scheme | ||
Pensions | ||
Increase in net pension (obligations)/assets | 900 | 800 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | (900) | (1,100) |
Increase in net pension (obligations)/assets | (2,900) | (3,200) |
Credit spreads | Actuarial assumption of longevity, increase by 2 years | Main Pension Scheme | ||
Pensions | ||
Increase in net pension (obligations)/assets | 100 | (200) |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | (1,800) | (2,100) |
Increase in net pension (obligations)/assets | £ (3,900) | £ (4,300) |
Longevity increase | Main Pension Scheme | ||
Pensions | ||
Actuarial assumption of longevity increase | 1 year | 1 year |
(Decrease)/ increase in value of liabilities | £ (902) | £ (767) |
Increase in net pension (obligations)/assets | £ 902 | £ 767 |
Pension increase | Main Pension Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of liabilities | £ (706) | £ (679) |
Increase in net pension (obligations)/assets | £ 706 | £ 679 |
Equity values | Main Pension Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 10% | 10% |
(Decrease)/ increase in value of assets | £ 229 | £ 267 |
Increase in net pension (obligations)/assets | £ (229) | £ (267) |
Pensions - History of defined b
Pensions - History of defined benefit schemes (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Pensions | |||||
Fair value of plan assets | £ 37,111 | £ 37,598 | £ 57,787 | £ 57,249 | £ 51,925 |
Present value of plan obligations | (29,592) | (27,601) | (46,808) | (48,864) | (44,115) |
Net surplus | 7,519 | 9,997 | 10,979 | 8,385 | 7,810 |
Actual return on plan assets | £ 659 | £ (19,285) | £ 1,667 | £ 7,064 | £ 4,930 |
Actual return on plan assets - % | 1.80% | (33.40%) | 2.90% | 13.60% | 10.10% |
Plan liabilities | |||||
Pensions | |||||
Experience (losses)/gains | £ (1,599) | £ (2,137) | £ 237 | £ 455 | £ 279 |
Plan assets | |||||
Pensions | |||||
Experience (losses)/gains | (1,182) | (20,326) | 872 | 6,027 | 3,556 |
Main Pension Scheme | |||||
Pensions | |||||
Fair value of plan assets | 33,638 | 34,016 | 52,021 | 51,323 | 46,555 |
Present value of plan obligations | (26,534) | (24,733) | (42,020) | (43,870) | (39,669) |
Net surplus | 7,104 | 9,283 | 10,001 | 7,453 | 6,886 |
Actual return on plan assets | £ 634 | £ (17,248) | £ 1,554 | £ 6,422 | £ 4,266 |
Actual return on plan assets - % | 1.90% | (33.20%) | 3% | 13.80% | 9.70% |
Main Pension Scheme | Plan liabilities | |||||
Pensions | |||||
Experience (losses)/gains | £ (1,531) | £ (2,053) | £ 241 | £ 427 | £ 275 |
Main Pension Scheme | Plan assets | |||||
Pensions | |||||
Experience (losses)/gains | £ (1,042) | £ (18,180) | £ 841 | £ 5,486 | £ 3,021 |
Auditor's remuneration (Details
Auditor's remuneration (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Auditor's remuneration | |||
Fees payable for the audit of NatWest Group's annual accounts | £ 4.9 | £ 4.7 | £ 4.4 |
Fees payable for the audit of NatWest Group plc's subsidiaries | 32.3 | 31.9 | 29.6 |
Fees payable for audit-related assurance services | 4.5 | 3.9 | 5.3 |
Total audit and audit-related assurance services fees | 41.7 | 40.5 | 39.3 |
Other assurance services | 0.7 | 1.2 | 0.4 |
Corporate finance services | 0.7 | 0.5 | 0.5 |
Total other services | 1.4 | 1.7 | £ 0.9 |
Audit fees billed during the period | 16 | ||
Fees for review of interim financial information | 1.4 | 1.1 | |
Fees for reports to the regulatory | 2.8 | 2.3 | |
Fees for non-statutory audit opinions | 0.3 | 0.4 | |
Fees for the auditors as reporting accountants on debt and equity issuances | £ 0.7 | £ 0.5 |
Tax - Tax charge (Details)
Tax - Tax charge (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Apr. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Current tax | |||||
Charge for the year | £ (1,373) | £ (1,611) | £ (1,036) | ||
(Under)/over provision in respect of prior years | (123) | 100 | 31 | ||
Total current tax | (1,496) | (1,511) | (1,005) | ||
Deferred tax | |||||
(Charge)/credit or the year | (281) | 47 | (185) | ||
UK tax rate change impact | (10) | 165 | |||
Net increase in the carrying value of deferred tax assets in respect of UK, RoI and Netherlands losses | 385 | 267 | 12 | ||
(Under)/over provision in respect of prior years | (42) | (68) | 17 | ||
Tax charge for the year | £ (1,434) | £ (1,275) | £ (996) | [1] | |
UK corporation tax | 25% | 23.50% | 19% | 19% | |
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Tax - Reconciliation (Details)
Tax - Reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | |||||
Apr. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Tax | ||||||
UK corporation tax | 25% | 23.50% | 19% | 19% | ||
Profit before tax | [1] | £ 6,178 | £ 5,132 | £ 3,844 | [2] | |
Expected tax charge | (1,452) | (975) | (766) | |||
Losses and temporary differences in year where no deferred tax asset recognised | (56) | (118) | (51) | |||
Foreign profits taxed at other rates | 10 | (62) | (11) | |||
Non deductible goodwill impairment | (16) | |||||
losses on disposals and write-downs | (63) | (10) | (55) | |||
UK bank levy | (27) | (20) | (18) | |||
regulatory and legal actions | (1) | (7) | (74) | |||
other disallowable items | (57) | (51) | (28) | |||
Foreign exchange recycling on UBIDAC capital reduction | 114 | |||||
RPI-related uplift on index linked gilts | 6 | 67 | ||||
other non-taxable items | 20 | 29 | 73 | |||
Taxable foreign exchange movements | 9 | (19) | 8 | |||
Unrecognised losses brought forward and utilised | 27 | 6 | 10 | |||
Banking surcharge | (236) | (447) | (341) | |||
Tax on paid-in equity | 52 | 43 | 48 | |||
UK tax rate change impact | (10) | 165 | ||||
Adjustments in respect of prior years | (165) | 32 | 48 | |||
Tax charge for the year | (1,434) | (1,275) | (996) | [2] | ||
Deferred tax assets | 1,894 | 2,178 | ||||
Deferred tax liabilities | £ 141 | £ 227 | ||||
Banking Surcharge Rate | 3% | 4.25% | 8% | |||
Total losses carried forward | ||||||
Tax | ||||||
Deferred tax assets | £ 1,019 | £ 952 | ||||
UK | ||||||
Tax | ||||||
Profit before tax | 6,196 | 5,716 | 4,143 | |||
Net increase/(decrease) in the carrying value of deferred tax assets in respect of: | 371 | 272 | (9) | |||
Benefit from group relief and loss relief claims at higher tax rates | 69 | |||||
Republic of Ireland | ||||||
Tax | ||||||
Net increase/(decrease) in the carrying value of deferred tax assets in respect of: | (1) | £ (5) | (27) | |||
Netherlands | ||||||
Tax | ||||||
Net increase/(decrease) in the carrying value of deferred tax assets in respect of: | £ 15 | £ 48 | ||||
[1] Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Tax - Analysis of deferred tax
Tax - Analysis of deferred tax (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax | |||
Deferred tax asset | £ (1,894) | £ (2,178) | |
Deferred tax liability | 141 | 227 | |
Net deferred tax asset | £ (1,753) | £ (1,951) | £ (836) |
Tax - Deferred tax reconciliati
Tax - Deferred tax reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of net deferred tax asset | ||
At 1 January | £ (1,951) | £ (836) |
Charge/(credit) to income statement | (62) | (236) |
(Credit)/charge to other comprehensive income | 258 | (916) |
Currency translation and other adjustments | 2 | 37 |
At 31 December | (1,753) | (1,951) |
Pension | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 23 | 24 |
Charge/(credit) to income statement | 1 | 1 |
(Credit)/charge to other comprehensive income | (8) | (2) |
At 31 December | 16 | 23 |
Accelerated capital allowances | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (75) | (42) |
Charge/(credit) to income statement | (1) | (43) |
Currency translation and other adjustments | 10 | |
At 31 December | (76) | (75) |
Provisions | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (82) | (97) |
Charge/(credit) to income statement | 21 | 14 |
(Credit)/charge to other comprehensive income | 1 | |
At 31 December | (61) | (82) |
Fair value of financial instruments | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (805) | 248 |
Charge/(credit) to income statement | 16 | (171) |
(Credit)/charge to other comprehensive income | 249 | (913) |
Currency translation and other adjustments | 2 | 31 |
At 31 December | (538) | (805) |
Total losses carried forward | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (952) | (899) |
Charge/(credit) to income statement | (67) | (51) |
Currency translation and other adjustments | (2) | |
At 31 December | (1,019) | (952) |
Other | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (60) | (70) |
Charge/(credit) to income statement | (32) | 14 |
(Credit)/charge to other comprehensive income | 17 | (2) |
Currency translation and other adjustments | (2) | |
At 31 December | £ (75) | £ (60) |
Tax - Tax losses (Details)
Tax - Tax losses (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Unused tax losses | ||
Deferred tax asset | £ 1,894 | £ 2,178 |
Total losses carried forward | ||
Unused tax losses | ||
Deferred tax asset | 1,019 | 952 |
Total losses carried forward | UK | ||
Unused tax losses | ||
Deferred tax asset | 959 | 900 |
Total losses carried forward | UK | NatWest Markets Plc | ||
Unused tax losses | ||
Deferred tax asset | 3 | |
Total losses carried forward | UK | National Westminster Bank Plc | ||
Unused tax losses | ||
Deferred tax asset | 362 | 445 |
Total losses carried forward | UK | RBS plc | ||
Unused tax losses | ||
Deferred tax asset | 597 | 452 |
Total losses carried forward | Ireland | UBIDAC | ||
Unused tax losses | ||
Deferred tax asset | 5 | 6 |
Total losses carried forward | Ireland | NWM N.V. | ||
Unused tax losses | ||
Deferred tax asset | £ 55 | £ 46 |
Tax - Other (Details)
Tax - Other (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Apr. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax | ||||
Deferred tax asset | £ 1,894 | £ 2,178 | ||
Deferred tax liability | £ 141 | £ 227 | ||
Banking surcharge rate | 3% | 4.25% | 8% | |
UK corporation tax | 25% | 23.50% | 19% | 19% |
Charge/(credit) to income statement | £ (62) | £ (236) | ||
(Credit)/charge to other comprehensive income | 258 | (916) | ||
UK tax rate change impact | 10 | £ (165) | ||
Deferred tax assets that have not been recognised | 5,168 | 5,534 | 5,437 | |
Tax losses and other temporary differences for which no deferred tax asset has been recognised | 24,438 | 25,742 | 24,699 | |
Deferred tax liabilities not recognised | 256 | 257 | 302 | |
Expected future taxation from unrecognised deferred tax liabilities | 0 | |||
Temporary differences associated with investments in subsidiaries and branches | 1,005 | 1,010 | 1,032 | |
Underlying temporary differences in respect of retained earnings of overseas subsidiaries and held-over gains on the incorporation of certain overseas branches | 1,005 | 1,010 | £ 1,032 | |
within 5 years | ||||
Deferred tax | ||||
Tax losses and other temporary differences for which no deferred tax asset has been recognised | 34 | |||
After 5 years | ||||
Deferred tax | ||||
Tax losses and other temporary differences for which no deferred tax asset has been recognised | 4,488 | |||
Total losses carried forward | ||||
Deferred tax | ||||
Deferred tax asset | 1,019 | 952 | ||
Charge/(credit) to income statement | £ (67) | (51) | ||
Country of domicile | ||||
Deferred tax | ||||
Limit of offset of losses carried forward (as a percent) | 25% | |||
Country of domicile | Total losses carried forward | ||||
Deferred tax | ||||
Deferred tax asset | £ 959 | 900 | ||
NatWest Markets Plc | Total losses carried forward | ||||
Deferred tax | ||||
Deferred tax asset | 0 | 3 | ||
Tax losses and other temporary differences for which no deferred tax asset has been recognised | 5,558 | |||
National Westminster Bank Plc | Total losses carried forward | ||||
Deferred tax | ||||
Deferred tax asset | 362 | 445 | ||
Tax losses carried forward | 2,308 | |||
Tax losses for which deferred tax assets are recognised | 1,448 | |||
RBS plc | Total losses carried forward | ||||
Deferred tax | ||||
Deferred tax asset | 597 | 452 | ||
Tax losses carried forward | 3,297 | |||
Tax losses for which deferred tax assets are recognised | 2,388 | |||
UBIDAC | Total losses carried forward | ||||
Deferred tax | ||||
Deferred tax asset | 5 | 6 | ||
Tax losses for which deferred tax assets are recognised | 40 | |||
NWM N.V. | Total losses carried forward | ||||
Deferred tax | ||||
Deferred tax asset | 55 | £ 46 | ||
Tax losses carried forward | 2,496 | |||
Tax losses for which deferred tax assets are recognised | £ 213 |
Discontinued operations and a_3
Discontinued operations and assets and liabilities of disposal groups (Details) € in Millions, £ in Millions | 1 Months Ended | 12 Months Ended | ||||||
Jul. 01, 2022 GBP (£) | Nov. 30, 2023 EUR (€) | Dec. 31, 2023 GBP (£) item | Dec. 31, 2023 EUR (€) item | Dec. 31, 2022 GBP (£) | Dec. 31, 2021 GBP (£) | [1] | ||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Profit/(loss) from continuing operations | £ | £ 4,744 | £ 3,857 | £ 2,848 | |||||
Profit (loss) from discontinued operations | £ | [2] | £ (112) | £ (262) | £ 464 | ||||
Republic of Ireland | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Number of legally binding agreements for sale of business | item | 4 | 4 | ||||||
Mortgage loans | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Reclassification into financial assets at fair value through profit or loss | £ | £ 10,989 | |||||||
Reclassification of financial assets out of measured at amortised cost into measured at fair value through profit or loss | £ | £ 11,263 | |||||||
AIB | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Amount of gross performing loans fully migrated by year-end | € 3,100 | |||||||
Amount of performing tracker and linked mortgages migrated by year end | 4,000 | |||||||
Permanent TSB p.l.c. | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Amount of gross performing loans fully migrated by year-end | € 6,300 | |||||||
Number of branches transferred in sales agreement | item | 25 | 25 | ||||||
Permanent TSB p.l.c. | Binding agreement for sale of UBIDAC business to Permanent TSB | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Number of branches transferred in sales agreement | item | 25 | 25 | ||||||
Permanent TSB p.l.c. | UBIDAC | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Losses on disposal | £ 20 | € 24 | ||||||
Pepper Finance Corporation (Ireland) DAC | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Assets transferred under agreement | € 400 | |||||||
Pepper Finance Corporation (Ireland) DAC | Agreement for sale of assets with Elmscott Property Finance DAC and AB CarVal (CarVal) | ||||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||||
Total assets to be transferred under agreement | € 690 | |||||||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. The results of discontinued operations, comprising the post-tax profit, is shown as a single amount on the face of the income statement. An analysis of this amount is presented in Note 8 to the consolidated financial statements |
Discontinued operations and a_4
Discontinued operations and assets and liabilities of disposal groups - (Loss)/profit from discontinued operations, net of tax (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Disclosure of analysis of single amount of discontinued operations [line items] | |||||
Interest receivable | £ 21,026 | £ 12,637 | £ 9,234 | [1],[2] | |
Net interest income | 11,049 | 9,842 | 7,535 | [1],[2] | |
Non-interest income | 3,703 | 3,314 | 2,894 | [1],[3] | |
Total income | 14,752 | 13,156 | 10,429 | [1] | |
Operating expenses | (7,996) | (7,687) | (7,758) | [1] | |
Profit before impairment losses/releases | 6,756 | 5,469 | 2,671 | [1] | |
Impairment (losses)/releases | (578) | (337) | 1,173 | [1] | |
Operating (loss)/profit before tax | [4] | (6,178) | (5,132) | (3,844) | [1] |
Profit (loss) | 4,632 | 3,595 | 3,312 | [1] | |
Discontinued operations | |||||
Disclosure of analysis of single amount of discontinued operations [line items] | |||||
Interest receivable | 22 | 177 | 339 | ||
Net interest income | 22 | 177 | 339 | ||
Non-interest income | (16) | (472) | 13 | ||
Total income | 6 | (295) | 352 | ||
Operating expenses | (124) | (38) | (47) | ||
Profit before impairment losses/releases | (118) | (333) | 305 | ||
Impairment (losses)/releases | 6 | 71 | 162 | ||
Operating (loss)/profit before tax | 112 | 262 | (467) | ||
Tax charge | (3) | ||||
Profit (loss) | £ (112) | £ (262) | £ 464 | ||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements . Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated financial statements. |
Discontinued operations and a_5
Discontinued operations and assets and liabilities of disposal groups - Assets and liabilities of disposal groups (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Assets of disposal groups | ||
Loans to customers - amortised cost | £ 381,433 | £ 366,340 |
Other assets | 8,760 | 9,176 |
Assets of disposal groups | 902 | 6,861 |
Liabilities of disposal groups | ||
Other liabilities | 5,202 | 5,346 |
Liabilities of disposal groups | 3 | 15 |
Assets and liabilities of disposal groups | ||
Assets of disposal groups | ||
Loans to customers - amortised cost | 32 | 1,458 |
Other financial assets - loans to customers | 841 | 5,397 |
Other assets | 29 | 6 |
Assets of disposal groups | 902 | 6,861 |
Liabilities of disposal groups | ||
Other liabilities | 3 | 15 |
Liabilities of disposal groups | 3 | 15 |
Net assets of disposal groups | £ 899 | £ 6,846 |
Discontinued operations and a_6
Discontinued operations and assets and liabilities of disposal groups - Operating cash flows attributable to discontinued operations (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued operations and assets and liabilities of disposal groups | |||
Net cash flows from operating activities | £ 362 | £ 1,090 | £ 2,212 |
Net cash flows from investing activities | 5,473 | 6,164 | |
Net increase in cash and cash equivalents | £ 5,835 | £ 7,254 | £ 2,212 |
Earnings per share (Details)
Earnings per share (Details) £ / shares in Units, £ in Millions, shares in Millions | 12 Months Ended | |||||
Aug. 30, 2022 | Dec. 31, 2023 GBP (£) £ / shares shares | Dec. 31, 2022 GBP (£) £ / shares shares | Dec. 31, 2021 GBP (£) £ / shares shares | |||
Earnings per share | ||||||
Profit from continuing operations attributable to ordinary shareholders | £ | £ 4,506 | £ 3,602 | £ 2,486 | |||
(Loss)/profit from discontinued operations attributable to ordinary shareholders | £ | (112) | (262) | 464 | |||
Profit attributable to ordinary shareholders | £ | £ 4,394 | £ 3,340 | £ 2,950 | [1] | ||
Weighted average number of shares | ||||||
Weighted average number of ordinary shares outstanding during the year | shares | 9,164 | 9,872 | 10,792 | |||
Effect of dilutive share options and convertible securities | shares | 55 | 57 | 45 | |||
Diluted weighted average number of ordinary shares outstanding during the year | shares | 9,219 | 9,929 | 10,837 | |||
Earnings per ordinary share - continuing operations | £ 0.49170 | £ 0.365 | £ 0.230 | [1] | ||
Earnings per ordinary share - discontinued operations | (0.01222) | (0.027) | 0.043 | [1] | ||
Total earnings per share attributable to ordinary shareholders - basic | [2] | 0.47948 | 0.338 | 0.273 | [1] | |
Earnings per ordinary share - fully diluted continuing operations | 0.489 | 0.362 | 0.229 | [1] | ||
Earnings per ordinary share - fully diluted discontinued operations | (0.012) | (0.026) | 0.043 | [1] | ||
Total earnings per share attributable to ordinary shareholders - fully diluted | £ 0.477 | £ 0.336 | £ 0.272 | [1] | ||
Share consolidation ratio | 0.9286 | |||||
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. In 2023, the unrounded Total earnings per share attributable to ordinary shareholders – basic is 47.948 p. The unrounded Earnings per ordinary share – continuing operations was 49.170 p. The unrounded Earnings per ordinary share – discontinued operations was ( 1.222 p) . |
Financial instruments - class_3
Financial instruments - classification - Assets (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Financial instruments | |||
Assets | £ 692,673 | £ 720,053 | £ 781,992 |
Assets of disposal groups | 902 | 6,861 | |
Cash and balances at central banks | |||
Financial instruments | |||
Financial Assets | 104,262 | 144,832 | |
Assets | 104,262 | 144,832 | |
Trading assets | |||
Financial instruments | |||
Financial Assets | 45,551 | 45,577 | |
Assets | 45,551 | 45,577 | |
Derivatives | |||
Financial instruments | |||
Financial Assets | 78,904 | 99,545 | |
Assets | 78,904 | 99,545 | |
Net hedging derivative assets | 114 | 143 | |
Settlement balances | |||
Financial instruments | |||
Financial Assets | 7,231 | 2,572 | |
Assets | 7,231 | 2,572 | |
Loans to banks - amortised cost | |||
Financial instruments | |||
Assets | 6,914 | 7,139 | |
Items in course of collection from other banks | 255 | 229 | |
Loans to customers - amortised cost | |||
Financial instruments | |||
Assets | 381,433 | 366,340 | |
Other financial assets | |||
Financial instruments | |||
Financial Assets | 51,102 | 30,895 | |
Assets | 51,102 | 30,895 | |
Intangible assets other than goodwill | |||
Financial instruments | |||
Assets | 7,614 | 7,116 | |
Other assets | |||
Financial instruments | |||
Assets | 8,760 | 9,176 | |
Assets of Disposal Groups [Member] | |||
Financial instruments | |||
Assets | 902 | 6,861 | |
Other assets | |||
Financial instruments | |||
Assets | 17,276 | 23,153 | |
Other assets | Level 3 | |||
Financial instruments | |||
Assets of disposal groups | 841 | 5,397 | |
Other assets | Cash and balances at central banks | |||
Financial instruments | |||
Assets | 0 | ||
Other assets | Trading assets | |||
Financial instruments | |||
Assets | 0 | ||
Other assets | Derivatives | |||
Financial instruments | |||
Assets | 0 | ||
Other assets | Settlement balances | |||
Financial instruments | |||
Assets | 0 | ||
Other assets | Loans to banks - amortised cost | |||
Financial instruments | |||
Assets | 0 | ||
Other assets | Loans to customers - amortised cost | |||
Financial instruments | |||
Assets | 0 | ||
Other assets | Other financial assets | |||
Financial instruments | |||
Assets | 0 | ||
Other assets | Intangible assets other than goodwill | |||
Financial instruments | |||
Assets | 7,614 | 7,116 | |
Other assets | Other assets | |||
Financial instruments | |||
Assets | 8,760 | 9,176 | |
Other assets | Assets of Disposal Groups [Member] | |||
Financial instruments | |||
Assets | 902 | 6,861 | |
MVFTPL | |||
Financial instruments | |||
Financial Assets | 125,100 | 145,800 | |
Assets | 125,158 | 145,909 | |
MVFTPL | Cash and balances at central banks | |||
Financial instruments | |||
Assets | |||
MVFTPL | Trading assets | |||
Financial instruments | |||
Assets | 45,551 | 45,577 | |
MVFTPL | Derivatives | |||
Financial instruments | |||
Assets | 78,904 | 99,545 | |
MVFTPL | Settlement balances | |||
Financial instruments | |||
Assets | 0 | ||
MVFTPL | Loans to banks - amortised cost | |||
Financial instruments | |||
Assets | 0 | ||
MVFTPL | Loans to customers - amortised cost | |||
Financial instruments | |||
Assets | 0 | ||
MVFTPL | Other financial assets | |||
Financial instruments | |||
Assets | 703 | 787 | |
MVFTPL | Intangible assets other than goodwill | |||
Financial instruments | |||
Assets | 0 | ||
MVFTPL | Other assets | |||
Financial instruments | |||
Assets | 0 | ||
MVFTPL | Assets of Disposal Groups [Member] | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | |||
Financial instruments | |||
Assets | 28,699 | 16,973 | |
Financial assets at fair value through other comprehensive income, category [member] | Cash and balances at central banks | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Trading assets | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Derivatives | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Settlement balances | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Loans to banks - amortised cost | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Loans to customers - amortised cost | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Other financial assets | |||
Financial instruments | |||
Assets | 28,699 | 16,973 | |
Financial assets at fair value through other comprehensive income, category [member] | Intangible assets other than goodwill | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Other assets | |||
Financial instruments | |||
Assets | 0 | ||
Financial assets at fair value through other comprehensive income, category [member] | Assets of Disposal Groups [Member] | |||
Financial instruments | |||
Assets | 0 | ||
Amortised cost | |||
Financial instruments | |||
Assets | 521,535 | 534,018 | |
Amortised cost | Cash and balances at central banks | |||
Financial instruments | |||
Assets | 104,262 | 144,832 | |
Amortised cost | Trading assets | |||
Financial instruments | |||
Assets | 0 | ||
Amortised cost | Derivatives | |||
Financial instruments | |||
Assets | 0 | ||
Amortised cost | Settlement balances | |||
Financial instruments | |||
Assets | 7,231 | 2,572 | |
Amortised cost | Loans to banks - amortised cost | |||
Financial instruments | |||
Assets | 6,914 | 7,139 | |
Amortised cost | Loans to customers - amortised cost | |||
Financial instruments | |||
Assets | 381,433 | 366,340 | |
Amortised cost | Other financial assets | |||
Financial instruments | |||
Assets | 21,695 | £ 13,135 | |
Amortised cost | Intangible assets other than goodwill | |||
Financial instruments | |||
Assets | 0 | ||
Amortised cost | Other assets | |||
Financial instruments | |||
Assets | 0 | ||
Amortised cost | Assets of Disposal Groups [Member] | |||
Financial instruments | |||
Assets | 0 | ||
DFV | |||
Financial instruments | |||
Assets | 5 | ||
DFV | Other financial assets | |||
Financial instruments | |||
Assets | £ 5 |
Financial instruments - class_4
Financial instruments - classification - Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Financial instruments | |||
Liabilities | £ 655,485 | £ 683,557 | £ 740,189 |
Lease liabilities | 670 | 1,118 | |
Other comprehensive income, before tax, change in fair value of financial liability attributable to change in credit risk of liability | (39) | 50 | £ (29) |
Bank deposits | |||
Financial instruments | |||
Liabilities | 22,190 | 20,441 | |
Financial Liabilities | 22,190 | 20,441 | |
Items in course of transmission to other banks | 92 | 242 | |
Customer deposits | |||
Financial instruments | |||
Liabilities | 431,377 | 450,318 | |
Settlement balances | |||
Financial instruments | |||
Liabilities | 6,645 | 2,012 | |
Trading liabilities | |||
Financial instruments | |||
Liabilities | 53,636 | 52,808 | |
Financial Liabilities | 53,636 | 52,808 | |
Derivatives | |||
Financial instruments | |||
Liabilities | 72,395 | 94,047 | |
Financial Liabilities | 72,395 | 94,047 | |
Net hedging derivative liabilities | 270 | 132 | |
Other financial liabilities | |||
Financial instruments | |||
Liabilities | 55,089 | 49,107 | |
Financial Liabilities | 55,089 | 49,107 | |
Subordinated liabilities | |||
Financial instruments | |||
Liabilities | 6,260 | ||
Financial Liabilities | 5,714 | 6,260 | |
Notes in circulation | |||
Financial instruments | |||
Liabilities | 3,237 | 3,218 | |
Financial Liabilities | 3,237 | 3,218 | |
Other Financial liabilities | |||
Financial instruments | |||
Liabilities | 5,202 | 5,346 | |
Loans to customers - amortised cost | |||
Financial instruments | |||
Finance lease receivable | 8,731 | 8,402 | |
Other liabilities | |||
Financial instruments | |||
Liabilities | 4,454 | 4,141 | |
Other liabilities | Other Financial liabilities | |||
Financial instruments | |||
Liabilities | 4,454 | 4,141 | |
Held-for-trading | |||
Financial instruments | |||
Liabilities | 126,031 | 146,855 | |
Financial Liabilities | 125,800 | 146,700 | |
Held-for-trading | Trading liabilities | |||
Financial instruments | |||
Liabilities | 53,636 | 52,808 | |
Held-for-trading | Derivatives | |||
Financial instruments | |||
Liabilities | 72,395 | 94,047 | |
DFV | |||
Financial instruments | |||
Liabilities | 3,125 | 2,722 | |
DFV | Other financial liabilities | |||
Financial instruments | |||
Liabilities | 2,888 | 2,377 | |
Increase (decrease) in fair value of financial liability, attributable to changes in credit risk of liability | 0 | ||
DFV | Subordinated liabilities | |||
Financial instruments | |||
Liabilities | 237 | 345 | |
Amortised cost | |||
Financial instruments | |||
Liabilities | 521,875 | 529,839 | |
Lease liabilities | 670 | 1,118 | |
Amortised cost | Bank deposits | |||
Financial instruments | |||
Liabilities | 22,190 | 20,441 | |
Financial Liabilities | 22,200 | 20,400 | |
Amortised cost | Customer deposits | |||
Financial instruments | |||
Liabilities | 431,377 | 450,318 | |
Financial Liabilities | 431,400 | 450,300 | |
Amortised cost | Settlement balances | |||
Financial instruments | |||
Liabilities | 6,645 | 2,012 | |
Financial Liabilities | 6,600 | 2,000 | |
Amortised cost | Other financial liabilities | |||
Financial instruments | |||
Liabilities | 52,201 | 46,730 | |
Amortised cost | Subordinated liabilities | |||
Financial instruments | |||
Liabilities | 5,477 | 5,915 | |
Financial Liabilities | 5,500 | 5,900 | |
Amortised cost | Notes in circulation | |||
Financial instruments | |||
Liabilities | 3,237 | 3,218 | |
Financial Liabilities | 3,200 | 3,200 | |
Amortised cost | Other Financial liabilities | |||
Financial instruments | |||
Liabilities | £ 748 | £ 1,205 |
Financial instruments - class_5
Financial instruments - classification - Reclassification of mortgages from amortised cost to fair value through profit or loss (Details) - GBP (£) £ in Millions | Jul. 01, 2022 | Dec. 31, 2023 | Dec. 31, 2022 |
MVFTPL | |||
Reclassification of mortgages from amortised cost to fair value through profit or loss | |||
Financial assets | £ 125,100 | £ 145,800 | |
Loans to customers - amortised cost | |||
Reclassification of mortgages from amortised cost to fair value through profit or loss | |||
Amortised cost | £ 587 | ||
MFVTPL | 606 | ||
Change in value | 19 | ||
Assets of disposal groups | |||
Reclassification of mortgages from amortised cost to fair value through profit or loss | |||
Amortised cost | 10,676 | ||
MFVTPL | 10,383 | ||
Change in value | (293) | ||
Mortgage loans | |||
Reclassification of mortgages from amortised cost to fair value through profit or loss | |||
Amortised cost | 11,263 | ||
MFVTPL | 10,989 | ||
Change in value | £ (274) |
Financial instruments - class_6
Financial instruments - classification - financial assets forming a component of ESG-linked loans (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lending subject to performance triggers | ||
Financial instruments - classification | ||
Carrying value, Financial assets | £ 22,600 | £ 13,900 |
Reduction in cash flows | 2.5 | |
Sustainability-linked loans | ||
Financial instruments - classification | ||
Carrying value, Financial assets | £ 6,500 | 5,000 |
Positive impact on product margin | 0.032% | |
Negative impact on product margin | 0.039% | |
Reduction in cash flows | £ 2.5 | |
Other products | ||
Financial instruments - classification | ||
Carrying value, Financial assets | £ 16,100 | £ 8,900 |
Financial instruments - class_7
Financial instruments - classification - Amount receivable under finance leases (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Amount receivable under finance leases | ||
Total lease payments | £ 9,690 | £ 9,251 |
Unguaranteed residual values | (169) | (171) |
Future drawdowns | (12) | (13) |
Unearned income | (1,025) | (889) |
Present value of lease payments | 8,822 | 8,520 |
Impairments | (91) | (118) |
Net investment in finance lease | 8,731 | 8,402 |
Within 1 year | ||
Amount receivable under finance leases | ||
Total lease payments | 3,340 | 3,235 |
1 to 2 years | ||
Amount receivable under finance leases | ||
Total lease payments | 2,358 | 2,254 |
2 to 3 years | ||
Amount receivable under finance leases | ||
Total lease payments | 1,625 | 1,388 |
3 to 4 years | ||
Amount receivable under finance leases | ||
Total lease payments | 900 | 833 |
4 to 5 years | ||
Amount receivable under finance leases | ||
Total lease payments | 388 | 411 |
After 5 years | ||
Amount receivable under finance leases | ||
Total lease payments | £ 1,079 | £ 1,130 |
Financial Instruments - class_8
Financial Instruments - classification - IBOR reform (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Financial instruments by type of interest rate | ||
Derivatives notional (£bn) | £ 13,925,000 | |
Bank deposits | ||
Financial instruments by type of interest rate | ||
Financial Liabilities | £ 22,190 | 20,441 |
Other financial liabilities | ||
Financial instruments by type of interest rate | ||
Financial Liabilities | 55,089 | 49,107 |
Other financial assets | ||
Financial instruments by type of interest rate | ||
Financial Assets | 51,102 | 30,895 |
Derivatives [Member] | ||
Financial instruments by type of interest rate | ||
Derivatives notional (£bn) | 13,403,000 | |
Currency swaps | ||
Financial instruments by type of interest rate | ||
Derivatives notional (£bn) | £ 449,000 | £ 438,000 |
Financial Instruments - class_9
Financial Instruments - classification - Offsetable assets and liabilities (Details) - GBP (£) £ / shares in Units, £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Instruments which can be offset | ||
IFRS offset | £ 3,272 | £ 3,381 |
Potential for offset not recognised by IFRS | ||
Par value per share | £ 1.0769 | £ 1.0769 |
Derivatives [Member] | ||
Potential for offset not recognised by IFRS | ||
Instruments outside netting arrangements | £ 0 | |
Instruments which can be offset | ||
Gross | 3,289 | £ 2,429 |
IFRS offset | 3,272 | 3,381 |
Balance sheet | 6,561 | 5,810 |
Potential for offset not recognised by IFRS | ||
Cash collateral | (5,496) | (4,318) |
Securities collateral | (1,745) | (3,386) |
Net amount after the effect of netting arrangements and related collateral | (680) | (1,894) |
Instruments outside netting arrangements | (52) | (312) |
Financial assets (liabilities) | 6,509 | 5,498 |
Trading reverse repos/repos | ||
Instruments which can be offset | ||
Gross | (2,869) | 1,845 |
IFRS offset | 0 | |
Balance sheet | (2,869) | 1,845 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | 0 | |
Cash collateral | 0 | |
Securities collateral | 3,059 | (1,646) |
Net amount after the effect of netting arrangements and related collateral | 190 | 199 |
Instruments outside netting arrangements | (339) | (4,048) |
Financial assets (liabilities) | (3,208) | (2,203) |
Non trading reverse repos / repos | ||
Instruments which can be offset | ||
Gross | 13,872 | 8,653 |
IFRS offset | 0 | |
Balance sheet | 13,872 | 8,653 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | 0 | |
Cash collateral | 0 | |
Securities collateral | (13,872) | (8,653) |
Net amount after the effect of netting arrangements and related collateral | 0 | |
Instruments outside netting arrangements | 77 | 98 |
Financial assets (liabilities) | 13,949 | 8,751 |
Derivatives [Member] | ||
Instruments which can be offset | ||
Gross | 95,734 | 115,177 |
IFRS offset | (23,869) | (22,111) |
Balance sheet | 71,865 | 93,066 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (60,355) | (77,365) |
Cash collateral | (6,788) | (9,761) |
Other financial collateral | (1,663) | (1,185) |
Net amount after the effect of netting arrangements and related collateral | 3,059 | 4,755 |
Instruments outside netting arrangements | 530 | 981 |
Potential for offset not recognised by IFRS | ||
Financial liabilities | 72,395 | 94,047 |
Trading repos | ||
Instruments which can be offset | ||
Gross | 42,442 | 33,767 |
IFRS offset | (16,257) | (14,510) |
Balance sheet | 26,185 | 19,257 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (664) | (2,445) |
Cash collateral | 0 | |
Other financial collateral | (25,520) | (16,812) |
Net amount after the effect of netting arrangements and related collateral | 1 | |
Instruments outside netting arrangements | 717 | 4,483 |
Potential for offset not recognised by IFRS | ||
Financial liabilities | 26,902 | 23,740 |
Non trading repos | ||
Instruments which can be offset | ||
Gross | 23,605 | 16,977 |
IFRS offset | (9,646) | (5,702) |
Balance sheet | 13,959 | 11,275 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (5) | |
Cash collateral | 0 | |
Other financial collateral | (13,954) | (11,275) |
Net amount after the effect of netting arrangements and related collateral | 0 | |
Instruments outside netting arrangements | 3 | |
Potential for offset not recognised by IFRS | ||
Financial liabilities | 13,962 | 11,275 |
Trading liabilities | ||
Potential for offset not recognised by IFRS | ||
Financial liabilities | 53,636 | 52,808 |
Trading reverse repos | ||
Instruments which can be offset | ||
Gross | 39,573 | 35,612 |
IFRS offset | (16,257) | (14,510) |
Balance sheet | 23,316 | 21,102 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (664) | (2,445) |
Other financial collateral | (22,461) | (18,458) |
Net amount after the effect of netting arrangements and related collateral | 191 | 199 |
Instruments outside netting arrangements | 435 | |
Potential for offset not recognised by IFRS | ||
Cash collateral | 0 | |
Instruments outside netting arrangements | 378 | |
Potential for offset not recognised by IFRS | ||
Financial assets | 23,694 | 21,537 |
Derivatives [Member] | ||
Instruments which can be offset | ||
Gross | 99,023 | 117,606 |
IFRS offset | (20,597) | (18,730) |
Balance sheet | 78,426 | 98,876 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (60,355) | (77,365) |
Cash collateral | (12,284) | (14,079) |
Other financial collateral | (3,408) | (4,571) |
Net amount after the effect of netting arrangements and related collateral | 2,379 | 2,861 |
Instruments outside netting arrangements | 478 | 669 |
Potential for offset not recognised by IFRS | ||
Financial assets | 78,904 | 99,545 |
Trading assets | ||
Potential for offset not recognised by IFRS | ||
Financial assets | 45,551 | 45,577 |
Non trading reverse repos | ||
Instruments which can be offset | ||
Gross | 37,477 | 25,630 |
IFRS offset | (9,646) | (5,702) |
Balance sheet | 27,831 | 19,928 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (5) | |
Cash collateral | 0 | |
Other financial collateral | (27,826) | (19,928) |
Net amount after the effect of netting arrangements and related collateral | 0 | |
Instruments outside netting arrangements | 80 | 98 |
Potential for offset not recognised by IFRS | ||
Financial assets | £ 27,911 | £ 20,026 |
Financial instruments_ valuatio
Financial instruments: valuation - Hierarchy of assets (Details) - Recurring fair value measurement - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value of assets | |||
Assets | £ 153,862 | £ 162,882 | |
Trading loans | |||
Fair value of assets | |||
Assets | 33,597 | 35,655 | |
Trading securities | |||
Fair value of assets | |||
Assets | 11,954 | 9,922 | |
Interest rate | |||
Fair value of assets | |||
Assets | 44,563 | 53,480 | |
Foreign exchange | |||
Fair value of assets | |||
Assets | 34,161 | 45,829 | |
Other | |||
Fair value of assets | |||
Assets | 180 | 236 | |
Other loans | |||
Fair value of assets | |||
Assets | 765 | 899 | |
Other securities | |||
Fair value of assets | |||
Assets | 28,642 | 16,861 | |
Level 1 | |||
Fair value of assets | |||
Assets | £ 26,296 | £ 17,848 | |
As a % of total value assets | 17% | 11% | |
Level 1 | Trading securities | |||
Fair value of assets | |||
Assets | £ 8,447 | £ 7,463 | |
Level 1 | Interest rate | |||
Fair value of assets | |||
Assets | 1 | 5 | |
Level 1 | Other securities | |||
Fair value of assets | |||
Assets | 17,848 | 10,380 | |
Level 2 | |||
Fair value of assets | |||
Assets | £ 125,605 | £ 142,701 | |
As a % of total value assets | 82% | 88% | |
Level 2 | Trading loans | |||
Fair value of assets | |||
Assets | £ 33,388 | £ 35,260 | |
Level 2 | Trading securities | |||
Fair value of assets | |||
Assets | 3,493 | 2,458 | |
Level 2 | Interest rate | |||
Fair value of assets | |||
Assets | 43,912 | 52,764 | |
Level 2 | Foreign exchange | |||
Fair value of assets | |||
Assets | 34,096 | 45,715 | |
Level 2 | Other | |||
Fair value of assets | |||
Assets | 72 | 54 | |
Level 2 | Other loans | |||
Fair value of assets | |||
Assets | 108 | 172 | |
Level 2 | Other securities | |||
Fair value of assets | |||
Assets | 10,536 | 6,278 | |
Level 3 | |||
Fair value of assets | |||
Assets | £ 1,961 | £ 2,333 | £ 2,052 |
As a % of total value assets | 1% | 1% | |
Level 3 | Trading loans | |||
Fair value of assets | |||
Assets | £ 209 | £ 395 | |
Level 3 | Trading securities | |||
Fair value of assets | |||
Assets | 14 | 1 | |
Level 3 | Interest rate | |||
Fair value of assets | |||
Assets | 650 | 711 | |
Level 3 | Foreign exchange | |||
Fair value of assets | |||
Assets | 65 | 114 | |
Level 3 | Other | |||
Fair value of assets | |||
Assets | 108 | 182 | |
Level 3 | Other loans | |||
Fair value of assets | |||
Assets | 657 | 727 | |
Level 3 | Other securities | |||
Fair value of assets | |||
Assets | £ 258 | £ 203 |
Financial instruments_ valuat_2
Financial instruments: valuation - Hierarchy of liabilities (Details) - Recurring fair value measurement - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Fair value of liabilities | ||
Liabilities | £ 129,156 | £ 149,577 |
Trading deposits | ||
Fair value of liabilities | ||
Liabilities | 43,127 | 42,487 |
Debt securities in issue, trading | ||
Fair value of liabilities | ||
Liabilities | 706 | 797 |
Short positions, trading | ||
Fair value of liabilities | ||
Liabilities | 9,803 | 9,524 |
Interest rate | ||
Fair value of liabilities | ||
Liabilities | 38,483 | 48,535 |
Foreign exchange | ||
Fair value of liabilities | ||
Liabilities | 33,586 | 45,237 |
Other | ||
Fair value of liabilities | ||
Liabilities | 326 | 275 |
Other financial liabilities - Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 1,608 | 1,327 |
Other deposits | ||
Fair value of liabilities | ||
Liabilities | 1,280 | 1,050 |
Financial liabilities, subordinated | ||
Fair value of liabilities | ||
Liabilities | 237 | 345 |
Level 1 | ||
Fair value of liabilities | ||
Liabilities | £ 7,936 | £ 7,464 |
As a % of total value liabilities | 6% | 5% |
Level 1 | Short positions, trading | ||
Fair value of liabilities | ||
Liabilities | £ 7,936 | £ 7,462 |
Level 1 | Interest rate | ||
Fair value of liabilities | ||
Liabilities | 2 | |
Level 2 | ||
Fair value of liabilities | ||
Liabilities | £ 120,529 | £ 141,137 |
As a % of total value liabilities | 93% | 94% |
Level 2 | Trading deposits | ||
Fair value of liabilities | ||
Liabilities | £ 43,126 | £ 42,486 |
Level 2 | Debt securities in issue, trading | ||
Fair value of liabilities | ||
Liabilities | 706 | 797 |
Level 2 | Short positions, trading | ||
Fair value of liabilities | ||
Liabilities | 1,865 | 2,062 |
Level 2 | Interest rate | ||
Fair value of liabilities | ||
Liabilities | 38,044 | 47,855 |
Level 2 | Foreign exchange | ||
Fair value of liabilities | ||
Liabilities | 33,528 | 45,139 |
Level 2 | Other | ||
Fair value of liabilities | ||
Liabilities | 138 | 76 |
Level 2 | Other financial liabilities - Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 1,605 | 1,327 |
Level 2 | Other deposits | ||
Fair value of liabilities | ||
Liabilities | 1,280 | 1,050 |
Level 2 | Financial liabilities, subordinated | ||
Fair value of liabilities | ||
Liabilities | 237 | 345 |
Level 3 | ||
Fair value of liabilities | ||
Liabilities | £ 691 | £ 976 |
As a % of total value liabilities | 1% | 1% |
Level 3 | Trading deposits | ||
Fair value of liabilities | ||
Liabilities | £ 1 | £ 1 |
Level 3 | Short positions, trading | ||
Fair value of liabilities | ||
Liabilities | 2 | |
Level 3 | Interest rate | ||
Fair value of liabilities | ||
Liabilities | 439 | 678 |
Level 3 | Foreign exchange | ||
Fair value of liabilities | ||
Liabilities | 58 | 98 |
Level 3 | Other | ||
Fair value of liabilities | ||
Liabilities | 188 | £ 199 |
Level 3 | Other financial liabilities - Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | £ 3 |
Financial instruments_ valuat_3
Financial instruments: valuation - Adjustments (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Adjustments. | ||
Funding valuation adjustments | £ 132 | £ 173 |
Credit valuation adjustments | 236 | 300 |
Bid - offer | 86 | 130 |
Product and deal specific | 103 | 141 |
Total | 557 | 744 |
Financial liabilities at fair value through profit or loss | ||
Product and deal specific | ||
Net (gains) carried forward | 78 | 74 |
Net gains deferred | 119 | 97 |
Net gains recognized in the income statement | £ 115 | £ 94 |
Financial instruments_ valuat_4
Financial instruments: valuation - Valuation techniques (Details) - Level 3 | Dec. 31, 2023 | Dec. 31, 2023 GBP (£) | Dec. 31, 2022 | Dec. 31, 2022 GBP (£) |
Loans | Price | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 1.23 | 1.13 | ||
Loans | Discount margin | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.0174 | 0.0174 | ||
Loans | Discount margin | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.0228 | 0.0222 | ||
Loans | Credit spreads | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.0049 | 0.0056 | ||
Loans | Credit spreads | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.0119 | 0.0114 | ||
Debt securities [member] | Price | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 1.19 | 2.55 | ||
Equity shares | Price | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.30 | 32,142 | 0.30 | 34,027 |
Equity shares | Discount margin | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.07 | 0.06 | ||
Equity shares | Discount margin | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.09 | 0.08 | ||
Equity shares | Fund NAV | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.80 | 0.80 | ||
Equity shares | Fund NAV | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 1.20 | 1.20 | ||
Credit derivatives | Correlation | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | (0.15) | (0.15) | ||
Credit derivatives | Correlation | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.95 | 0.95 | ||
Credit derivatives | Credit spreads | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.0013 | 0.0007 | ||
Credit derivatives | Credit spreads | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.0600 | 0.0530 | ||
Credit derivatives | Volatility | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.30 | 0.30 | ||
Credit derivatives | Volatility | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.80 | 0.80 | ||
Credit derivatives | Upfront points | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.99 | 0.99 | ||
Credit derivatives | Recovery rate | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.60 | 0.60 | ||
Interest rate and FX derivatives | Correlation | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | (0.50) | (0.50) | ||
Interest rate and FX derivatives | Correlation | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.99 | 1 | ||
Interest rate and FX derivatives | Volatility | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.30 | 0.30 | ||
Interest rate and FX derivatives | Volatility | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 1.11 | 1.27 | ||
Interest rate and FX derivatives | Constant Prepayment Rate | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.02 | 0.02 | ||
Interest rate and FX derivatives | Constant Prepayment Rate | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.22 | 0.21 | ||
Interest rate and FX derivatives | Mean Reversal | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.20 | 0.92 | ||
Interest rate and FX derivatives | Inflation volatility | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.02 | 0.01 | ||
Interest rate and FX derivatives | Inflation volatility | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.02 | 0.02 | ||
Interest rate and FX derivatives | Inflation rate | Minimum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.02 | 0.02 | ||
Interest rate and FX derivatives | Inflation rate | Maximum | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Significant unobservable input, financial instruments | 0.03 | 0.03 |
Financial instruments_ valuat_5
Financial instruments: valuation - Level 3 Sensitivities of Assets (Details) - Recurring fair value measurement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value of assets | |||
Financial Assets, at fair value | £ 153,862 | £ 162,882 | |
Trading securities | |||
Fair value of assets | |||
Financial Assets, at fair value | 11,954 | 9,922 | |
Interest rate | |||
Fair value of assets | |||
Financial Assets, at fair value | 44,563 | 53,480 | |
Foreign exchange | |||
Fair value of assets | |||
Financial Assets, at fair value | 34,161 | 45,829 | |
Other | |||
Fair value of assets | |||
Financial Assets, at fair value | 180 | 236 | |
Other loans | |||
Fair value of assets | |||
Financial Assets, at fair value | 765 | 899 | |
Other securities | |||
Fair value of assets | |||
Financial Assets, at fair value | 28,642 | 16,861 | |
Level 3 | |||
Fair value of assets | |||
Financial Assets, at fair value | 1,961 | 2,333 | £ 2,052 |
Sensitivity favourable | 50 | 80 | |
Sensitivity unfavourable | (120) | (100) | |
Level 3 | Loans | |||
Fair value of assets | |||
Financial Assets, at fair value | 209 | 395 | |
Sensitivity favourable | 10 | ||
Sensitivity unfavourable | (10) | ||
Level 3 | Trading securities | |||
Fair value of assets | |||
Financial Assets, at fair value | 14 | 1 | |
Level 3 | Interest rate | |||
Fair value of assets | |||
Financial Assets, at fair value | 650 | 711 | |
Sensitivity favourable | 20 | 30 | |
Sensitivity unfavourable | (20) | (30) | |
Level 3 | Foreign exchange | |||
Fair value of assets | |||
Financial Assets, at fair value | 65 | 114 | |
Sensitivity favourable | 10 | ||
Sensitivity unfavourable | (10) | ||
Level 3 | Other | |||
Fair value of assets | |||
Financial Assets, at fair value | 108 | 182 | |
Sensitivity favourable | 10 | 10 | |
Sensitivity unfavourable | (10) | (10) | |
Level 3 | Other loans | |||
Fair value of assets | |||
Financial Assets, at fair value | 657 | 727 | |
Sensitivity unfavourable | (40) | (10) | |
Level 3 | Other securities | |||
Fair value of assets | |||
Financial Assets, at fair value | 258 | 203 | |
Sensitivity favourable | 20 | 20 | |
Sensitivity unfavourable | £ (50) | £ (30) |
Financial instruments_ valuat_6
Financial instruments: valuation - Level 3 Sensitivities of Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair value of liabilities | ||
Specified target level of certainty for assumptions of unobservable inputs | 90% | |
Recurring fair value measurement | ||
Fair value of liabilities | ||
Liabilities | £ 129,156 | £ 149,577 |
Recurring fair value measurement | Interest rate | ||
Fair value of liabilities | ||
Liabilities | 38,483 | 48,535 |
Recurring fair value measurement | Foreign exchange | ||
Fair value of liabilities | ||
Liabilities | 33,586 | 45,237 |
Recurring fair value measurement | Other | ||
Fair value of liabilities | ||
Liabilities | 326 | 275 |
Recurring fair value measurement | Level 3 | ||
Fair value of liabilities | ||
Liabilities | 691 | 976 |
Sensitivity favourable | 20 | 30 |
Sensitivity unfavourable | (20) | (30) |
Recurring fair value measurement | Level 3 | Deposits | ||
Fair value of liabilities | ||
Liabilities | 1 | 1 |
Recurring fair value measurement | Level 3 | Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 3 | |
Recurring fair value measurement | Level 3 | Short Positions. | ||
Fair value of liabilities | ||
Liabilities | 2 | |
Recurring fair value measurement | Level 3 | Interest rate | ||
Fair value of liabilities | ||
Liabilities | 439 | 678 |
Sensitivity favourable | 10 | 30 |
Sensitivity unfavourable | (10) | (30) |
Recurring fair value measurement | Level 3 | Foreign exchange | ||
Fair value of liabilities | ||
Liabilities | 58 | 98 |
Recurring fair value measurement | Level 3 | Other | ||
Fair value of liabilities | ||
Liabilities | 188 | £ 199 |
Sensitivity favourable | 10 | |
Sensitivity unfavourable | £ (10) |
Financial instruments_ valuat_7
Financial instruments: valuation - Movement in Level 3 portfolios - Assets (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Trading assets | ||
Movement in level 3 assets | ||
Financial assets | £ 45,551 | £ 45,577 |
Derivatives | ||
Movement in level 3 assets | ||
Financial assets | 78,904 | 99,545 |
Recurring fair value measurement | ||
Movement in level 3 assets | ||
Financial assets at beginning of period | 162,882 | |
Financial assets at end of period | 153,862 | 162,882 |
Recurring fair value measurement | Level 3 | ||
Movement in level 3 assets | ||
Financial assets at beginning of period | 2,333 | 2,052 |
Amounts recorded in the income statement | (243) | 143 |
Amount recorded in the statement of comprehensive income | 32 | (20) |
Level 3 transfers in | 37 | 726 |
Level 3 transfers out | (227) | (337) |
Purchases/Originations | 463 | 814 |
Settlements/Other decreases | (164) | (115) |
Sales | (254) | (958) |
Foreign exchange and other adjustments | (16) | 28 |
Financial assets at end of period | 1,961 | 2,333 |
Amounts recorded in the income statement in respect of balances held at period end - unrealised | 141 | |
Recurring fair value measurement | Level 3 | Derivatives | ||
Movement in level 3 assets | ||
Financial assets at beginning of period | 1,007 | 918 |
Amounts recorded in the income statement | (156) | 126 |
Amount recorded in the statement of comprehensive income | 0 | |
Level 3 transfers in | 6 | 193 |
Level 3 transfers out | (5) | (122) |
Purchases/Originations | 180 | 355 |
Settlements/Other decreases | (70) | (40) |
Sales | (137) | (423) |
Foreign exchange and other adjustments | (2) | |
Financial assets at end of period | 823 | 1,007 |
Amounts recorded in the income statement in respect of balances held at period end - unrealised | 67 | 126 |
Recurring fair value measurement | Level 3 | Other trading assets | ||
Movement in level 3 assets | ||
Financial assets at beginning of period | 396 | 740 |
Amounts recorded in the income statement | (88) | 31 |
Amount recorded in the statement of comprehensive income | 0 | |
Level 3 transfers in | 15 | 1 |
Level 3 transfers out | (32) | (147) |
Purchases/Originations | 8 | 274 |
Settlements/Other decreases | (8) | (75) |
Sales | (65) | (434) |
Foreign exchange and other adjustments | (3) | 6 |
Financial assets at end of period | 223 | 396 |
Amounts recorded in the income statement in respect of balances held at period end - unrealised | (39) | 31 |
Recurring fair value measurement | Level 3 | Other financial assets | ||
Movement in level 3 assets | ||
Financial assets at beginning of period | 930 | 394 |
Amounts recorded in the income statement | 1 | (14) |
Amount recorded in the statement of comprehensive income | 32 | (20) |
Level 3 transfers in | 16 | 532 |
Level 3 transfers out | (190) | (68) |
Purchases/Originations | 275 | 185 |
Settlements/Other decreases | (86) | |
Sales | (52) | (101) |
Foreign exchange and other adjustments | (11) | 22 |
Financial assets at end of period | 915 | 930 |
Amounts recorded in the income statement in respect of balances held at period end - unrealised | 1 | £ (16) |
Recurring fair value measurement | Level 3 | Financial liabilities, class [member] | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement in respect of balances held at period end - unrealised | £ 29 |
Financial instruments_ valuat_8
Financial instruments: valuation - Movement in Level 3 portfolios - Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivatives | ||
Fair value of liabilities | ||
Financial liabilities at beginning of period | £ 94,047 | |
Financial liabilities at end of period | 72,395 | £ 94,047 |
Financial liabilities (other) | ||
Fair value of liabilities | ||
Financial liabilities at beginning of period | 49,107 | |
Financial liabilities at end of period | 55,089 | 49,107 |
Level 3 | Other operating income and interest income | Other financial instruments | ||
Fair value of liabilities | ||
Gains Losses Recognised In Profit Or Loss Fair Value measurement Assets and Liabilities | 1 | (14) |
Level 3 | Income from trading activities | Trading assets and liabilities | ||
Fair value of liabilities | ||
Gains Losses Recognised In Profit Or Loss Fair Value measurement Assets and Liabilities | 69 | (224) |
Recurring fair value measurement | Level 3 | ||
Fair value of liabilities | ||
Financial liabilities at beginning of period | 976 | 609 |
Amounts recorded in the income statement | (313) | 381 |
Amount recorded in the statement of comprehensive income | 0 | |
Level 3 transfers in | 9 | 81 |
Level 3 transfers out | (11) | (64) |
Purchases/Originations | 200 | 382 |
Settlements/Other decreases | (51) | (41) |
Sales | (116) | (378) |
Foreign exchange and other adjustments | (3) | 6 |
Amounts recorded in the income statement in respect of balances held at period end - unrealised | (121) | 381 |
Financial liabilities at end of period | 691 | 976 |
Recurring fair value measurement | Level 3 | Derivatives | ||
Fair value of liabilities | ||
Financial liabilities at beginning of period | 975 | 606 |
Amounts recorded in the income statement | (313) | 382 |
Amount recorded in the statement of comprehensive income | 0 | |
Level 3 transfers in | 7 | 78 |
Level 3 transfers out | (9) | (61) |
Purchases/Originations | 195 | 382 |
Settlements/Other decreases | (51) | (41) |
Sales | (116) | (376) |
Foreign exchange and other adjustments | (3) | 5 |
Amounts recorded in the income statement in respect of balances held at period end - unrealised | (121) | 382 |
Financial liabilities at end of period | 685 | 975 |
Recurring fair value measurement | Level 3 | Other trading liabilities | ||
Fair value of liabilities | ||
Financial liabilities at beginning of period | 1 | 3 |
Amounts recorded in the income statement | (1) | |
Amount recorded in the statement of comprehensive income | 0 | |
Level 3 transfers in | 2 | 3 |
Level 3 transfers out | (2) | (3) |
Purchases/Originations | 2 | |
Sales | (2) | |
Foreign exchange and other adjustments | 1 | |
Amounts recorded in the income statement in respect of balances held at period end - unrealised | (1) | |
Financial liabilities at end of period | 3 | £ 1 |
Recurring fair value measurement | Level 3 | Financial liabilities (other) | ||
Fair value of liabilities | ||
Amount recorded in the statement of comprehensive income | 0 | |
Purchases/Originations | 3 | |
Financial liabilities at end of period | £ 3 |
Financial instruments_ valuat_9
Financial instruments: valuation - Assets at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Financial liabilities (other) | ||
Fair value of assets | ||
Carrying value, Financial liabilities | £ 55,089 | £ 49,107 |
Cash and balances at central banks | ||
Fair value of assets | ||
Financial Assets | 104,262 | 144,832 |
Cash and balances at central banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 104,300 | 144,800 |
Settlement balances | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 7,200 | 2,600 |
Loans to banks - amortised cost | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 6,914 | 7,139 |
Loans to customers - amortised cost | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 381,433 | 366,340 |
Other financial assets - securities | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 21,700 | 13,100 |
Items where fair value approximates carrying value | Cash and balances at central banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 104,300 | 144,800 |
Items where fair value approximates carrying value | Settlement balances | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 7,200 | 2,600 |
Items where fair value approximates carrying value | Loans to banks - amortised cost | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 4,200 | 100 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Cash and balances at central banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 104,300 | 144,800 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Settlement balances | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 7,200 | 2,600 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Loans to banks - amortised cost | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 7,000 | 7,100 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Loans to banks - amortised cost | Level 2 | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 2,200 | 4,200 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Loans to banks - amortised cost | Level 3 | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 600 | 2,800 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Loans to customers - amortised cost | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 373,200 | 354,500 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Loans to customers - amortised cost | Level 2 | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 27,500 | 20,300 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Loans to customers - amortised cost | Level 3 | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 345,700 | 334,200 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Other financial assets - securities | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 21,600 | 12,800 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Other financial assets - securities | Level 1 | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 4,000 | 3,600 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Other financial assets - securities | Level 2 | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | 6,600 | 3,200 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Other financial assets - securities | Level 3 | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets, at fair value | £ 11,000 | £ 6,000 |
Financial instruments_ valua_10
Financial instruments: valuation - Liabilities at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deposits by banks | ||
Fair value of liabilities | ||
Financial Liabilities | £ 22,190 | £ 20,441 |
Deposits by banks | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 22,200 | 20,400 |
Customer deposits | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 431,400 | 450,300 |
Settlement balances liabilities | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 6,600 | 2,000 |
Other financial liabilities - debt securities in issue | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 52,200 | 46,700 |
Financial liabilities (other) | ||
Fair value of liabilities | ||
Financial Liabilities | 55,089 | 49,107 |
Financial liabilities, subordinated | ||
Fair value of liabilities | ||
Financial Liabilities | 5,714 | 6,260 |
Financial liabilities, subordinated | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 5,500 | 5,900 |
Notes in circulation | ||
Fair value of liabilities | ||
Financial Liabilities | 3,237 | 3,218 |
Notes in circulation | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 3,200 | 3,200 |
Items where fair value approximates carrying value | Deposits by banks | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 4,200 | 4,700 |
Items where fair value approximates carrying value | Customer deposits | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 351,500 | 407,000 |
Items where fair value approximates carrying value | Settlement balances liabilities | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 6,600 | 2,000 |
Items where fair value approximates carrying value | Notes in circulation | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 3,200 | 3,200 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Deposits by banks | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 22,300 | 20,000 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Deposits by banks | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 15,400 | 13,100 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Deposits by banks | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 2,700 | 2,200 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Customer deposits | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 431,000 | 450,300 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Customer deposits | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 30,700 | 12,700 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Customer deposits | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 48,800 | 30,600 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Settlement balances liabilities | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 6,600 | 2,000 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Other financial liabilities - debt securities in issue | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 52,200 | 46,100 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Other financial liabilities - debt securities in issue | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 41,700 | 40,700 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Other financial liabilities - debt securities in issue | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 10,500 | 5,400 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Financial liabilities, subordinated | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 5,400 | 5,600 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Financial liabilities, subordinated | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 5,400 | 5,500 |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Financial liabilities, subordinated | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | 100 | |
Not measured at fair value in statement of financial position but for which fair value is disclosed | Notes in circulation | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial Liabilities | £ 3,200 | £ 3,200 |
Financial Instruments - matur_3
Financial Instruments - maturity analysis - Residual Maturity (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deposits by banks | ||
Financial instruments | ||
Financial Liabilities | £ 22,190 | £ 20,441 |
Deposits by banks | Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 22,200 | 20,400 |
Derivatives [Member] | ||
Financial instruments | ||
Financial Liabilities | 72,395 | 94,047 |
Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 431,377 | 450,318 |
Settlement balances and short positions | ||
Financial instruments | ||
Financial Liabilities | 6,645 | 2,012 |
Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 53,636 | 52,808 |
Financial liabilities (other) | ||
Financial instruments | ||
Financial Liabilities | 55,089 | 49,107 |
Financial liabilities, subordinated | ||
Financial instruments | ||
Financial Liabilities | 5,714 | 6,260 |
Financial liabilities, subordinated | Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 5,500 | 5,900 |
Notes in circulation | ||
Financial instruments | ||
Financial Liabilities | 3,237 | 3,218 |
Notes in circulation | Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 3,200 | 3,200 |
Lease liabilities. | ||
Financial instruments | ||
Financial Liabilities | 670 | 1,118 |
Less than 12 months | Deposits by banks | ||
Financial instruments | ||
Financial Liabilities | 8,954 | 7,799 |
Less than 12 months | Derivatives [Member] | ||
Financial instruments | ||
Financial Liabilities | 30,721 | 39,331 |
Less than 12 months | Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 424,893 | 448,821 |
Less than 12 months | Settlement balances and short positions | ||
Financial instruments | ||
Financial Liabilities | 6,645 | 2,012 |
Less than 12 months | Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 45,349 | 42,760 |
Less than 12 months | Financial liabilities (other) | ||
Financial instruments | ||
Financial Liabilities | 20,310 | 13,796 |
Less than 12 months | Financial liabilities, subordinated | ||
Financial instruments | ||
Financial Liabilities | 1,047 | 973 |
Less than 12 months | Notes in circulation | ||
Financial instruments | ||
Financial Liabilities | 3,237 | 3,218 |
Less than 12 months | Lease liabilities. | ||
Financial instruments | ||
Financial Liabilities | 102 | 137 |
More than 12 months | Deposits by banks | ||
Financial instruments | ||
Financial Liabilities | 13,236 | 12,642 |
More than 12 months | Derivatives [Member] | ||
Financial instruments | ||
Financial Liabilities | 41,674 | 54,716 |
More than 12 months | Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 6,484 | 1,497 |
More than 12 months | Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 8,287 | 10,048 |
More than 12 months | Financial liabilities (other) | ||
Financial instruments | ||
Financial Liabilities | 34,779 | 35,311 |
More than 12 months | Financial liabilities, subordinated | ||
Financial instruments | ||
Financial Liabilities | 4,667 | 5,287 |
More than 12 months | Lease liabilities. | ||
Financial instruments | ||
Financial Liabilities | 568 | 981 |
Cash and balances at central banks | ||
Financial instruments | ||
Financial Assets | 104,262 | 144,832 |
Cash and balances at central banks | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 104,300 | 144,800 |
Cash and balances at central banks | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 104,262 | 144,832 |
Trading assets | ||
Financial instruments | ||
Financial Assets | 45,551 | 45,577 |
Trading assets | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 36,723 | 35,944 |
Trading assets | More than 12 months | ||
Financial instruments | ||
Financial Assets | 8,828 | 9,633 |
Derivatives [Member] | ||
Financial instruments | ||
Financial Assets | 78,904 | 99,545 |
Derivatives [Member] | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 29,839 | 38,107 |
Derivatives [Member] | More than 12 months | ||
Financial instruments | ||
Financial Assets | 49,065 | 61,438 |
Settlement balances | ||
Financial instruments | ||
Financial Assets | 7,231 | 2,572 |
Settlement balances | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 7,231 | 2,572 |
Loans and advances to banks [Member] | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 6,914 | 7,139 |
Loans and advances to banks [Member] | Less than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 6,650 | 6,872 |
Loans and advances to banks [Member] | More than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 264 | 267 |
Loans and advances to customers [Member] | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 381,433 | 366,340 |
Loans and advances to customers [Member] | Less than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 87,663 | 84,289 |
Loans and advances to customers [Member] | More than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 293,770 | 282,051 |
Other financial assets | ||
Financial instruments | ||
Financial Assets | 51,102 | 30,895 |
Other financial assets | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 10,192 | 6,128 |
Other financial assets | More than 12 months | ||
Financial instruments | ||
Financial Assets | £ 40,910 | £ 24,767 |
Financial Instruments - matur_4
Financial Instruments - maturity analysis - Contractual Maturity (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 |
Financial instruments | |||
Contractual maturity period for undiscounted cash flows | 20 years | ||
Threshold period for principal amounts of financial liabilities to be excluded from contractual maturity for cash outflows | 20 years | ||
Threshold period for interest payments of financial liabilities to be excluded from contractual maturity for cash outflows | 20 years | ||
0-3 months | Financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | £ 173,891 | £ 206,578 | |
0-3 months | Cash and balances at central banks | |||
Financial instruments | |||
Undiscounted cash flows, assets | 104,262 | 144,832 | |
0-3 months | Derivative held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, assets | 31 | 130 | |
0-3 months | Settlement balances | |||
Financial instruments | |||
Undiscounted cash flows, assets | 7,231 | 2,572 | |
0-3 months | Other financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 4,897 | 2,771 | |
0-3 months | Finance lease | |||
Financial instruments | |||
Undiscounted cash flows, assets | 61 | 96 | |
0-3 months | Financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, liabilities | 420,846 | 456,887 | |
0-3 months | Bank deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 8,334 | 6,690 | |
0-3 months | Customer deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 393,363 | 437,830 | |
0-3 months | Settlement balances | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 6,645 | 2,012 | |
0-3 months | Derivatives held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, derivative financial liabilities | 71 | 280 | |
0-3 months | Other financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 9,094 | 6,720 | |
0-3 months | Subordinated liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 72 | 96 | |
0-3 months | Notes in circulation | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 3,237 | 3,218 | |
0-3 months | Lease liabilities. | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 30 | 41 | |
0-3 months | Guarantees and Commitments | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 115,627 | 121,929 | |
0-3 months | Guarantees | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 2,820 | 3,150 | |
0-3 months | Commitments | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 112,807 | 118,779 | |
3-12 months | Financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 55,358 | 50,157 | |
3-12 months | Derivative held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, assets | 29 | 345 | |
3-12 months | Other financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 6,756 | 4,507 | |
3-12 months | Finance lease | |||
Financial instruments | |||
Undiscounted cash flows, assets | 242 | 267 | |
3-12 months | Financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, liabilities | 46,919 | 20,289 | |
3-12 months | Bank deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 1,279 | 1,445 | |
3-12 months | Customer deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 31,900 | 11,389 | |
3-12 months | Derivatives held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, derivative financial liabilities | 175 | (371) | |
3-12 months | Other financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 12,319 | 6,640 | |
3-12 months | Subordinated liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 1,167 | 1,073 | |
3-12 months | Lease liabilities. | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 79 | 113 | |
1-3 years | Financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 94,635 | 85,571 | |
1-3 years | Derivative held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, assets | 128 | 28 | |
1-3 years | Other financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 12,304 | 8,391 | |
1-3 years | Finance lease | |||
Financial instruments | |||
Undiscounted cash flows, assets | 735 | 857 | |
1-3 years | Financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, liabilities | 34,215 | 29,283 | |
1-3 years | Bank deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 6,069 | 5,662 | |
1-3 years | Customer deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 6,464 | 1,252 | |
1-3 years | Derivatives held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, derivative financial liabilities | 366 | 586 | |
1-3 years | Other financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 18,843 | 18,833 | |
1-3 years | Subordinated liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 2,301 | 2,690 | |
1-3 years | Lease liabilities. | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 172 | 260 | |
3-5 years | Financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 73,455 | 63,774 | |
3-5 years | Derivative held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, assets | 104 | 41 | |
3-5 years | Other financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 11,183 | 7,835 | |
3-5 years | Finance lease | |||
Financial instruments | |||
Undiscounted cash flows, assets | 401 | 482 | |
3-5 years | Financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, liabilities | 23,951 | 24,817 | |
3-5 years | Bank deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 8,307 | 8,503 | |
3-5 years | Customer deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 11 | 2 | |
3-5 years | Derivatives held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, derivative financial liabilities | 192 | 306 | |
3-5 years | Other financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 13,818 | 13,906 | |
3-5 years | Subordinated liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 1,512 | 1,897 | |
3-5 years | Lease liabilities. | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 111 | 203 | |
5-10 years | Financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 107,301 | 91,249 | |
5-10 years | Derivative held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, assets | 49 | (44) | |
5-10 years | Other financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 10,019 | 5,706 | |
5-10 years | Finance lease | |||
Financial instruments | |||
Undiscounted cash flows, assets | 656 | 549 | |
5-10 years | Financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, liabilities | 6,456 | 9,439 | |
5-10 years | Bank deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 89 | ||
5-10 years | Customer deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 14 | 14 | |
5-10 years | Derivatives held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, derivative financial liabilities | 92 | 116 | |
5-10 years | Other financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 4,769 | 7,361 | |
5-10 years | Subordinated liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 1,406 | 1,541 | |
5-10 years | Lease liabilities. | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 175 | 318 | |
10-20 years | Financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 123,277 | 102,948 | |
10-20 years | Derivative held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, assets | 49 | 43 | |
10-20 years | Other financial assets | |||
Financial instruments | |||
Undiscounted cash flows, assets | 8,063 | 2,524 | |
10-20 years | Finance lease | |||
Financial instruments | |||
Undiscounted cash flows, assets | 359 | 296 | |
10-20 years | Financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, liabilities | 847 | 981 | |
10-20 years | Customer deposits | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 19 | 20 | |
10-20 years | Derivatives held for hedging | |||
Financial instruments | |||
Undiscounted cash flows, derivative financial liabilities | 8 | 85 | |
10-20 years | Other financial liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 346 | 294 | |
10-20 years | Subordinated liabilities | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 342 | 328 | |
10-20 years | Lease liabilities. | |||
Financial instruments | |||
Undiscounted cash flows, non-derivative financial liabilities | 132 | 254 | |
Held-for-trading | |||
Financial instruments | |||
Financial Liabilities | 125,800 | 146,700 | |
MVFTPL | |||
Financial instruments | |||
Financial Assets | 125,100 | 145,800 | |
Financial assets at amortised cost | 0-3 months | Loans to banks - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 5,234 | 5,254 | |
Financial assets at amortised cost | 0-3 months | Loans to customers - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 52,175 | 50,923 | |
Financial assets at amortised cost | 3-12 months | Loans to banks - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 1,437 | 1,621 | |
Financial assets at amortised cost | 3-12 months | Loans to customers - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 46,894 | 43,417 | |
Financial assets at amortised cost | 1-3 years | Loans to banks - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 23 | 17 | |
Financial assets at amortised cost | 1-3 years | Loans to customers - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 81,445 | 76,278 | |
Financial assets at amortised cost | 3-5 years | Loans to banks - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 302 | 288 | |
Financial assets at amortised cost | 3-5 years | Loans to customers - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 61,465 | 55,128 | |
Financial assets at amortised cost | 5-10 years | Loans to customers - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | 96,577 | 85,038 | |
Financial assets at amortised cost | 10-20 years | Loans to customers - amortised cost | |||
Financial instruments | |||
Undiscounted cash flows, assets | £ 114,806 | £ 100,085 |
Trading assets and liabilitie_2
Trading assets and liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Securities | ||
Financial institutions and Corporate | £ 28,754 | £ 16,349 |
Total debt securities | 50,024 | 29,636 |
Total | 45,551 | 45,577 |
Deposits | ||
Total | 53,636 | 52,808 |
Trading liabilities | ||
Deposits | ||
Repos | 26,902 | 23,740 |
Collateral received | 15,075 | 17,680 |
Other deposits | 1,150 | 1,067 |
Total deposits | 43,127 | 42,487 |
Debt securities in issue | 706 | 797 |
Short positions in financial institution and corporate securities | 1,790 | 1,982 |
Total short positions | 9,803 | 9,524 |
Total | 53,636 | 52,808 |
Short Positions | 9,803 | 9,524 |
Trading assets | ||
Loans | ||
Reverse repos | 23,694 | 21,537 |
Collateral given | 9,141 | 13,005 |
Other loans | 762 | 1,113 |
Total loans | 33,597 | 35,655 |
Securities | ||
Financial institutions and corporate | 3,563 | 2,573 |
Total debt securities | 11,954 | 9,922 |
Total | 45,551 | 45,577 |
UK | ||
Securities | ||
Central and local government securities | 9,330 | 3,364 |
UK | Trading liabilities | ||
Deposits | ||
Short positions in government securities | 1,893 | 2,313 |
UK | Trading assets | ||
Securities | ||
Central and local government securities | 2,729 | 2,205 |
USA | ||
Securities | ||
Central and local government securities | 6,164 | 8,112 |
USA | Trading liabilities | ||
Deposits | ||
Short positions in government securities | 2,071 | 1,293 |
USA | Trading assets | ||
Securities | ||
Central and local government securities | 2,600 | 2,345 |
Other | ||
Securities | ||
Central and local government securities | 5,776 | 1,811 |
Other | Trading liabilities | ||
Deposits | ||
Short positions in government securities | 4,049 | 3,936 |
Other | Trading assets | ||
Securities | ||
Central and local government securities | £ 3,062 | £ 2,799 |
Derivatives - Summary of deriva
Derivatives - Summary of derivatives (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | £ 13,925,000 | |
Derivative financial assets | £ 78,904 | 99,545 |
Derivative financial liabilities | 72,395 | 94,047 |
Derivatives traded on recognised exchange | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 709,000 | |
Derivative financial assets | 113 | |
Derivative financial liabilities | 33 | |
Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 13,216,000 | |
Derivative financial assets | 99,432 | |
Derivative financial liabilities | 94,014 | |
Derivatives | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 13,403,000 | |
Derivative financial assets | 78,904 | |
Derivative financial liabilities | 72,395 | |
Derivatives | Derivatives traded on recognised exchange | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 820,000 | |
Derivative financial assets | 48 | |
Derivative financial liabilities | 34 | |
Derivatives | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 12,583,000 | |
Derivative financial assets | 78,856 | |
Derivative financial liabilities | 72,361 | |
Interest rate derivatives | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 10,268,000 | 10,742,000 |
Derivative financial assets | 44,563 | 53,480 |
Derivative financial liabilities | 38,483 | 48,535 |
Interest rate derivatives | Derivatives traded on recognised exchange | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 819,000 | 707,000 |
Derivative financial assets | 48 | 113 |
Derivative financial liabilities | 34 | 33 |
Interest rate derivatives | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 9,449,000 | 10,035,000 |
Derivative financial assets | 44,515 | 53,367 |
Derivative financial liabilities | 38,449 | 48,502 |
Interest rate derivatives | Derivatives traded over the counter and settled through clearing counterparties | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 7,280,000 | 8,065,000 |
Interest rate swaps | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 6,533,000 | 7,201,000 |
Derivative financial assets | 33,807 | 39,039 |
Derivative financial liabilities | 27,424 | 32,992 |
Interest rate swaps | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 6,533,000 | 7,201,000 |
Derivative financial assets | 33,807 | 39,039 |
Derivative financial liabilities | 27,424 | 32,992 |
Interest rate options | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 2,184,000 | 1,714,000 |
Derivative financial assets | 10,756 | 14,441 |
Derivative financial liabilities | 11,059 | 15,543 |
Interest rate options | Derivatives traded on recognised exchange | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 510,000 | 296,000 |
Derivative financial assets | 48 | 113 |
Derivative financial liabilities | 34 | 33 |
Interest rate options | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 1,674,000 | 1,418,000 |
Derivative financial assets | 10,708 | 14,328 |
Derivative financial liabilities | 11,025 | 15,510 |
Interest rate forwards and futures | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 1,551,000 | 1,827,000 |
Interest rate forwards and futures | Derivatives traded on recognised exchange | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 309,000 | 411,000 |
Interest rate forwards and futures | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 1,242,000 | 1,416,000 |
Exchange rate derivatives | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 3,120,000 | 3,168,000 |
Derivative financial assets | 34,161 | 45,829 |
Derivative financial liabilities | 33,586 | 45,237 |
Exchange rate derivatives | Derivatives traded on recognised exchange | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 1,000 | 2,000 |
Exchange rate derivatives | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 3,119,000 | 3,166,000 |
Derivative financial assets | 34,161 | 45,829 |
Derivative financial liabilities | 33,586 | 45,237 |
Currency swaps | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 449,000 | 438,000 |
Derivative financial assets | 8,173 | 11,840 |
Derivative financial liabilities | 7,370 | 10,430 |
Currency swaps | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 449,000 | 438,000 |
Derivative financial assets | 8,173 | 11,840 |
Derivative financial liabilities | 7,370 | 10,430 |
Exchange rate option contracts | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 675,000 | 837,000 |
Derivative financial assets | 4,181 | 6,375 |
Derivative financial liabilities | 4,197 | 6,647 |
Exchange rate option contracts | Derivatives traded on recognised exchange | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 1,000 | 2,000 |
Exchange rate option contracts | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 674,000 | 835,000 |
Derivative financial assets | 4,181 | 6,375 |
Derivative financial liabilities | 4,197 | 6,647 |
Exchange rate spots, forwards and futures | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 1,996,000 | 1,893,000 |
Derivative financial assets | 21,807 | 27,614 |
Derivative financial liabilities | 22,019 | 28,160 |
Exchange rate spots, forwards and futures | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 1,996,000 | 1,893,000 |
Derivative financial assets | 21,807 | 27,614 |
Derivative financial liabilities | 22,019 | 28,160 |
Credit derivatives | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 15,000 | 15,000 |
Derivative financial assets | 180 | 236 |
Derivative financial liabilities | 326 | 275 |
Credit derivatives | Derivatives traded over the counter | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | 15,000 | 15,000 |
Derivative financial assets | 180 | 236 |
Derivative financial liabilities | £ 326 | £ 275 |
Derivatives - Derivatives in he
Derivatives - Derivatives in hedge accounting relationships (Details) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 GBP (£) | Dec. 31, 2022 GBP (£) | Dec. 31, 2021 GBP (£) | |
IFRS netting | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Hedging instrument, assets | £ (3,063) | £ (4,235) | |
Hedging instrument, liabilities | (7,568) | (9,205) | |
Derivatives after IFRS netting | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Hedging instrument, assets | 114 | 143 | |
Hedging instrument, liabilities | £ 270 | £ 132 | |
Derivatives | Derivatives before IFRS netting | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Notional amount | 224,800 | 233,100 | |
Hedging instrument, assets | £ 3,177 | £ 4,378 | |
Hedging instrument, liabilities | 7,838 | 9,337 | |
Changes in fair value used for hedge ineffectiveness | 1,602 | (2,859) | |
Fair value hedging | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Changes in fair value used for hedge ineffectiveness | £ 406 | £ 482 | £ 897 |
Fair value hedging | Interest rate derivatives | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Notional amount | 67,600 | 58,700 | |
Hedging instrument, assets | £ 1,139 | £ 1,554 | |
Hedging instrument, liabilities | 2,607 | 3,009 | |
Changes in fair value used for hedge ineffectiveness | £ 406 | £ 482 | |
Cash flow hedging | Interest rate derivatives | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Notional amount | 140,000 | 167,600 | |
Hedging instrument, assets | £ 1,924 | £ 2,681 | |
Hedging instrument, liabilities | 4,970 | 6,207 | |
Changes in fair value used for hedge ineffectiveness | £ 1,211 | £ (3,342) | |
Cash flow hedging | Exchange rate derivatives | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Notional amount | 16,900 | 6,300 | |
Hedging instrument, assets | £ 112 | £ 142 | |
Hedging instrument, liabilities | 254 | 112 | |
Changes in fair value used for hedge ineffectiveness | £ (12) | £ (3) | |
Net investment hedging | Exchange rate derivatives | |||
Disclosure of detailed information about hedging instruments [line items] | |||
Notional amount | 300 | 500 | |
Hedging instrument, assets | £ 2 | £ 1 | |
Hedging instrument, liabilities | 7 | 9 | |
Changes in fair value used for hedge ineffectiveness | £ (3) | £ 4 |
Derivatives - Hedge ineffective
Derivatives - Hedge ineffectiveness recognised (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Derivatives | ||||
Hedging ineffectiveness | £ 52 | £ (20) | £ 25 | [1] |
Fair value hedging | ||||
Derivatives | ||||
Loss on hedged items attributable to the hedged risk | (364) | (442) | (846) | |
Gain on the hedging instruments | 406 | 482 | 897 | |
Hedging ineffectiveness | 42 | 40 | 51 | |
Cash flow hedging | ||||
Derivatives | ||||
Hedging ineffectiveness | 10 | (60) | (26) | |
Cash flow hedging | Interest rate risk | ||||
Derivatives | ||||
Hedging ineffectiveness | £ 10 | £ (60) | £ (26) | |
[1] Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Derivatives - Impact of the acc
Derivatives - Impact of the accumulated amount of fair hedge adjustments (Details) £ in Millions | 12 Months Ended | ||||||||||||||
Dec. 31, 2023 GBP (£) | Dec. 31, 2023 GBP (£) ₨ / £ | Dec. 31, 2023 GBP (£) $ / £ | Dec. 31, 2023 GBP (£) SFr / £ | Dec. 31, 2023 GBP (£) ¥ / £ | Dec. 31, 2023 GBP (£) ¥ / $ | Dec. 31, 2023 GBP (£) kr / $ | Dec. 31, 2022 GBP (£) | Dec. 31, 2022 GBP (£) ₨ / £ | Dec. 31, 2022 GBP (£) $ / £ | Dec. 31, 2022 GBP (£) SFr / £ | Dec. 31, 2022 GBP (£) ¥ / £ | Dec. 31, 2022 GBP (£) ¥ / $ | Dec. 31, 2022 GBP (£) kr / $ | Dec. 31, 2021 GBP (£) | |
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 13,925,000 | £ 13,925,000 | £ 13,925,000 | £ 13,925,000 | £ 13,925,000 | £ 13,925,000 | £ 13,925,000 | ||||||||
Fair value hedging | |||||||||||||||
Derivatives | |||||||||||||||
Changes in fair value used for hedge ineffectiveness | £ (364) | (442) | £ (846) | ||||||||||||
Carrying value adjustment for discontinued fair value hedges | 57 | 61 | |||||||||||||
Fair value hedging | Interest rate risk | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 28,559 | £ 28,559 | £ 28,559 | £ 28,559 | £ 28,559 | £ 28,559 | £ 28,559 | 18,661 | 18,661 | 18,661 | 18,661 | 18,661 | 18,661 | 18,661 | |
Carrying value of hedged liabilities | 42,396 | 42,396 | 42,396 | 42,396 | 42,396 | 42,396 | 42,396 | 41,925 | 41,925 | 41,925 | 41,925 | 41,925 | 41,925 | 41,925 | |
Impact on hedged items included in carrying value, assets | (142) | (142) | (142) | (142) | (142) | (142) | (142) | (1,448) | (1,448) | (1,448) | (1,448) | (1,448) | (1,448) | (1,448) | |
Impact on hedged items included in carrying value, liabilities | (1,474) | (1,474) | (1,474) | (1,474) | (1,474) | (1,474) | (1,474) | ||||||||
Fair value hedging | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 28,500 | 28,500 | 28,500 | 28,500 | 28,500 | 28,500 | 28,500 | 19,800 | 19,800 | 19,800 | 19,800 | 19,800 | 19,800 | 19,800 | |
Changes in fair value used for hedge ineffectiveness | 803 | (3,761) | |||||||||||||
Fair value hedging | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 39,100 | 39,100 | 39,100 | 39,100 | 39,100 | 39,100 | 39,100 | 38,900 | 38,900 | 38,900 | 38,900 | 38,900 | 38,900 | 38,900 | |
Impact on hedged items included in carrying value, liabilities | (2,772) | (2,772) | (2,772) | (2,772) | (2,772) | (2,772) | (2,772) | ||||||||
Changes in fair value used for hedge ineffectiveness | (1,167) | 3,319 | |||||||||||||
Fair value hedging | Interest rate risk | Bank and customer deposits | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged liabilities | 745 | 745 | 745 | 745 | 745 | 745 | 745 | 565 | 565 | 565 | 565 | 565 | 565 | 565 | |
Impact on hedged items included in carrying value, liabilities | (3) | (3) | (3) | (3) | (3) | (3) | (3) | (3) | (3) | (3) | (3) | (3) | (3) | (3) | |
Changes in fair value used for hedge ineffectiveness | (6) | 3 | |||||||||||||
Fair value hedging | Interest rate risk | Financial liabilities (other) | Debt securities in issue | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged liabilities | 36,305 | 36,305 | 36,305 | 36,305 | 36,305 | 36,305 | 36,305 | 35,856 | 35,856 | 35,856 | 35,856 | 35,856 | 35,856 | 35,856 | |
Impact on hedged items included in carrying value, liabilities | (1,151) | (1,151) | (1,151) | (1,151) | (1,151) | (1,151) | (1,151) | (2,222) | (2,222) | (2,222) | (2,222) | (2,222) | (2,222) | (2,222) | |
Changes in fair value used for hedge ineffectiveness | (1,023) | 2,790 | |||||||||||||
Fair value hedging | Interest rate risk | Financial liabilities, subordinated | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged liabilities | 5,346 | 5,346 | 5,346 | 5,346 | 5,346 | 5,346 | 5,346 | 5,504 | 5,504 | 5,504 | 5,504 | 5,504 | 5,504 | 5,504 | |
Impact on hedged items included in carrying value, liabilities | (320) | (320) | (320) | (320) | (320) | (320) | (320) | (547) | (547) | (547) | (547) | (547) | (547) | (547) | |
Changes in fair value used for hedge ineffectiveness | (138) | 526 | |||||||||||||
Fair value hedging | Interest rate risk | Loans to banks and customers | Amortised cost | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 5,663 | 5,663 | 5,663 | 5,663 | 5,663 | 5,663 | 5,663 | 5,764 | 5,764 | 5,764 | 5,764 | 5,764 | 5,764 | 5,764 | |
Impact on hedged items included in carrying value, assets | (316) | (316) | (316) | (316) | (316) | (316) | (316) | (526) | (526) | (526) | (526) | (526) | (526) | (526) | |
Changes in fair value used for hedge ineffectiveness | 167 | (1,236) | |||||||||||||
Fair value hedging | Interest rate risk | Other financial assets - Securities | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 22,896 | 22,896 | 22,896 | 22,896 | 22,896 | 22,896 | 22,896 | 12,897 | 12,897 | 12,897 | 12,897 | 12,897 | 12,897 | 12,897 | |
Impact on hedged items included in carrying value, assets | 174 | 174 | 174 | 174 | 174 | 174 | 174 | (922) | (922) | (922) | (922) | (922) | (922) | (922) | |
Changes in fair value used for hedge ineffectiveness | 636 | (2,525) | |||||||||||||
Fair value hedging | 0-3 months | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 500 | 500 | 500 | 500 | 500 | 500 | 500 | |
Fair value hedging | 0-3 months | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 2,700 | 2,700 | 2,700 | 2,700 | 2,700 | 2,700 | 2,700 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | |
Fair value hedging | 3-12 months | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 1,700 | 1,700 | 1,700 | 1,700 | 1,700 | 1,700 | 1,700 | 1,900 | 1,900 | 1,900 | 1,900 | 1,900 | 1,900 | 1,900 | |
Fair value hedging | 3-12 months | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 3,300 | 3,300 | 3,300 | 3,300 | 3,300 | 3,300 | 3,300 | 2,900 | 2,900 | 2,900 | 2,900 | 2,900 | 2,900 | 2,900 | |
Fair value hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 7,100 | 7,100 | 7,100 | 7,100 | 7,100 | 7,100 | 7,100 | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | |
Fair value hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 13,400 | 13,400 | 13,400 | 13,400 | 13,400 | 13,400 | 13,400 | 14,600 | 14,600 | 14,600 | 14,600 | 14,600 | 14,600 | 14,600 | |
Fair value hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 9,000 | 9,000 | 9,000 | 9,000 | 9,000 | 9,000 | 9,000 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | |
Fair value hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 11,300 | 11,300 | 11,300 | 11,300 | 11,300 | 11,300 | 11,300 | 10,300 | 10,300 | 10,300 | 10,300 | 10,300 | 10,300 | 10,300 | |
Fair value hedging | 5-10 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 5,900 | 5,900 | 5,900 | 5,900 | 5,900 | 5,900 | 5,900 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | |
Fair value hedging | 5-10 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 7,700 | 7,700 | 7,700 | 7,700 | 7,700 | 7,700 | 7,700 | 9,600 | 9,600 | 9,600 | 9,600 | 9,600 | 9,600 | 9,600 | |
Fair value hedging | Over 10 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | 3,600 | 3,600 | 3,600 | 3,600 | 3,600 | 3,600 | 3,600 | |
Fair value hedging | Over 10 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 700 | 700 | 700 | 700 | 700 | 700 | 700 | 500 | 500 | 500 | 500 | 500 | 500 | 500 | |
Cash flow hedging | Interest rate risk | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 85,206 | 85,206 | 85,206 | 85,206 | 85,206 | 85,206 | 85,206 | 94,388 | 94,388 | 94,388 | 94,388 | 94,388 | 94,388 | 94,388 | |
Carrying value of hedged liabilities | 54,831 | 54,831 | 54,831 | 54,831 | 54,831 | 54,831 | 54,831 | 73,181 | 73,181 | 73,181 | 73,181 | 73,181 | 73,181 | 73,181 | |
Cash flow hedging | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 85,200 | £ 85,200 | £ 85,200 | £ 85,200 | £ 85,200 | £ 85,200 | £ 85,200 | £ 94,500 | £ 94,500 | £ 94,500 | £ 94,500 | £ 94,500 | £ 94,500 | £ 94,500 | |
Average fixed interest rate | 2.04% | 2.04% | 2.04% | 2.04% | 2.04% | 2.04% | 2.04% | 1.72% | 1.72% | 1.72% | 1.72% | 1.72% | 1.72% | 1.72% | |
Changes in fair value used for hedge ineffectiveness | £ (2,818) | £ 5,336 | |||||||||||||
Cash flow hedging | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 54,800 | £ 54,800 | £ 54,800 | £ 54,800 | £ 54,800 | £ 54,800 | £ 54,800 | £ 73,100 | £ 73,100 | £ 73,100 | £ 73,100 | £ 73,100 | £ 73,100 | £ 73,100 | |
Average fixed interest rate | 3.79% | 3.79% | 3.79% | 3.79% | 3.79% | 3.79% | 3.79% | 1.63% | 1.63% | 1.63% | 1.63% | 1.63% | 1.63% | 1.63% | |
Changes in fair value used for hedge ineffectiveness | £ 1,617 | £ (2,054) | |||||||||||||
Cash flow hedging | Interest rate risk | Bank and customer deposits | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged liabilities | 54,675 | £ 54,675 | £ 54,675 | £ 54,675 | £ 54,675 | £ 54,675 | £ 54,675 | 72,610 | £ 72,610 | £ 72,610 | £ 72,610 | £ 72,610 | £ 72,610 | £ 72,610 | |
Changes in fair value used for hedge ineffectiveness | 1,610 | (2,008) | |||||||||||||
Cash flow hedging | Interest rate risk | Financial liabilities (other) | Debt securities in issue | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged liabilities | 156 | 156 | 156 | 156 | 156 | 156 | 156 | 571 | 571 | 571 | 571 | 571 | 571 | 571 | |
Changes in fair value used for hedge ineffectiveness | 7 | (46) | |||||||||||||
Cash flow hedging | Interest rate risk | Loans to banks and customers | Amortised cost | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 84,583 | 84,583 | 84,583 | 84,583 | 84,583 | 84,583 | 84,583 | 93,212 | 93,212 | 93,212 | 93,212 | 93,212 | 93,212 | 93,212 | |
Changes in fair value used for hedge ineffectiveness | (2,796) | 5,263 | |||||||||||||
Cash flow hedging | Interest rate risk | Other financial assets - Securities | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 623 | £ 623 | £ 623 | £ 623 | £ 623 | £ 623 | £ 623 | 1,176 | £ 1,176 | £ 1,176 | £ 1,176 | £ 1,176 | £ 1,176 | £ 1,176 | |
Changes in fair value used for hedge ineffectiveness | (22) | 73 | |||||||||||||
Cash flow hedging | Exchange rate risk | |||||||||||||||
Derivatives | |||||||||||||||
Average foreign exchange rate | 105.03 | 1.28 | 1.08 | 170.54 | 129.75 | 9.21 | 100.54 | 1.29 | 1.15 | 132.89 | 128.29 | 9.21 | |||
Carrying value of hedged assets | 2,422 | £ 2,422 | £ 2,422 | £ 2,422 | £ 2,422 | £ 2,422 | £ 2,422 | ||||||||
Carrying value of hedged liabilities | 11,661 | 11,661 | 11,661 | 11,661 | 11,661 | 11,661 | 11,661 | 4,345 | £ 4,345 | £ 4,345 | £ 4,345 | £ 4,345 | £ 4,345 | £ 4,345 | |
Cash flow hedging | Exchange rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 2,600 | 2,600 | 2,600 | 2,600 | 2,600 | 2,600 | 2,600 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | |
Cash flow hedging | Exchange rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 14,300 | 14,300 | 14,300 | 14,300 | 14,300 | 14,300 | 14,300 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | |
Changes in fair value used for hedge ineffectiveness | 12 | 3 | |||||||||||||
Cash flow hedging | Exchange rate risk | Financial liabilities (other) | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged liabilities | 201 | 201 | 201 | 201 | 201 | 201 | 201 | 204 | 204 | 204 | 204 | 204 | 204 | 204 | |
Changes in fair value used for hedge ineffectiveness | 3 | 5 | |||||||||||||
Cash flow hedging | Exchange rate risk | Financial liabilities (other) | Debt securities in issue | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged liabilities | 11,460 | 11,460 | 11,460 | 11,460 | 11,460 | 11,460 | 11,460 | 4,141 | 4,141 | 4,141 | 4,141 | 4,141 | 4,141 | 4,141 | |
Changes in fair value used for hedge ineffectiveness | 9 | (2) | |||||||||||||
Cash flow hedging | Exchange rate risk | Loans to banks and customers | Amortised cost | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 583 | 583 | 583 | 583 | 583 | 583 | 583 | ||||||||
Cash flow hedging | Exchange rate risk | Other financial assets - Securities | |||||||||||||||
Derivatives | |||||||||||||||
Carrying value of hedged assets | 1,839 | 1,839 | 1,839 | 1,839 | 1,839 | 1,839 | 1,839 | ||||||||
Cash flow hedging | 0-3 months | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 6,600 | £ 6,600 | £ 6,600 | £ 6,600 | £ 6,600 | £ 6,600 | £ 6,600 | |
Average fixed interest rate | 1.16% | 1.16% | 1.16% | 1.16% | 1.16% | 1.16% | 1.16% | 1.36% | 1.36% | 1.36% | 1.36% | 1.36% | 1.36% | 1.36% | |
Cash flow hedging | 0-3 months | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 800 | £ 800 | £ 800 | £ 800 | £ 800 | £ 800 | £ 800 | £ 17,300 | £ 17,300 | £ 17,300 | £ 17,300 | £ 17,300 | £ 17,300 | £ 17,300 | |
Average fixed interest rate | 0.93% | 0.93% | 0.93% | 0.93% | 0.93% | 0.93% | 0.93% | 1.27% | 1.27% | 1.27% | 1.27% | 1.27% | 1.27% | 1.27% | |
Cash flow hedging | 0-3 months | Exchange rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | |
Cash flow hedging | 0-3 months | Exchange rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | ||||||||
Cash flow hedging | 3-12 months | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 14,500 | £ 14,500 | £ 14,500 | £ 14,500 | £ 14,500 | £ 14,500 | £ 14,500 | £ 9,400 | £ 9,400 | £ 9,400 | £ 9,400 | £ 9,400 | £ 9,400 | £ 9,400 | |
Average fixed interest rate | 2.46% | 2.46% | 2.46% | 2.46% | 2.46% | 2.46% | 2.46% | 1.98% | 1.98% | 1.98% | 1.98% | 1.98% | 1.98% | 1.98% | |
Cash flow hedging | 3-12 months | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 3,900 | £ 26,800 | £ 26,800 | £ 26,800 | £ 26,800 | £ 26,800 | £ 26,800 | £ 26,800 | |
Average fixed interest rate | 2.54% | 2.54% | 2.54% | 2.54% | 2.54% | 2.54% | 2.54% | 0.95% | 0.95% | 0.95% | 0.95% | 0.95% | 0.95% | 0.95% | |
Cash flow hedging | 3-12 months | Exchange rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | ||||||||
Cash flow hedging | 3-12 months | Exchange rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 800 | 800 | 800 | 800 | 800 | 800 | 800 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | |
Cash flow hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 33,900 | £ 33,900 | £ 33,900 | £ 33,900 | £ 33,900 | £ 33,900 | £ 33,900 | £ 46,500 | £ 46,500 | £ 46,500 | £ 46,500 | £ 46,500 | £ 46,500 | £ 46,500 | |
Average fixed interest rate | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.71% | 1.71% | 1.71% | 1.71% | 1.71% | 1.71% | 1.71% | |
Cash flow hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 39,100 | £ 39,100 | £ 39,100 | £ 39,100 | £ 39,100 | £ 39,100 | £ 39,100 | £ 15,700 | £ 15,700 | £ 15,700 | £ 15,700 | £ 15,700 | £ 15,700 | £ 15,700 | |
Average fixed interest rate | 4.36% | 4.36% | 4.36% | 4.36% | 4.36% | 4.36% | 4.36% | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% | |
Cash flow hedging | More than 1 year but less than 3 years | Exchange rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | ||||||||
Cash flow hedging | More than 1 year but less than 3 years | Exchange rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | 2,400 | 2,400 | 2,400 | 2,400 | 2,400 | 2,400 | 2,400 | £ 2,800 | £ 2,800 | £ 2,800 | £ 2,800 | £ 2,800 | £ 2,800 | £ 2,800 | |
Cash flow hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 22,800 | £ 22,800 | £ 22,800 | £ 22,800 | £ 22,800 | £ 22,800 | £ 22,800 | £ 21,900 | £ 21,900 | £ 21,900 | £ 21,900 | £ 21,900 | £ 21,900 | £ 21,900 | |
Average fixed interest rate | 3.30% | 3.30% | 3.30% | 3.30% | 3.30% | 3.30% | 3.30% | 2.04% | 2.04% | 2.04% | 2.04% | 2.04% | 2.04% | 2.04% | |
Cash flow hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 5,100 | £ 5,100 | £ 5,100 | £ 5,100 | £ 5,100 | £ 5,100 | £ 5,100 | |
Average fixed interest rate | 2.28% | 2.28% | 2.28% | 2.28% | 2.28% | 2.28% | 2.28% | 1.03% | 1.03% | 1.03% | 1.03% | 1.03% | 1.03% | 1.03% | |
Cash flow hedging | More than 3 years but less than 5 years | Exchange rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,100 | £ 2,100 | £ 2,100 | £ 2,100 | £ 2,100 | £ 2,100 | £ 2,100 | |
Cash flow hedging | 5-10 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | £ 10,100 | |
Average fixed interest rate | 1.77% | 1.77% | 1.77% | 1.77% | 1.77% | 1.77% | 1.77% | 1.02% | 1.02% | 1.02% | 1.02% | 1.02% | 1.02% | 1.02% | |
Cash flow hedging | 5-10 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 7,500 | £ 7,500 | £ 7,500 | £ 7,500 | £ 7,500 | £ 7,500 | £ 7,500 | |
Average fixed interest rate | 2.36% | 2.36% | 2.36% | 2.36% | 2.36% | 2.36% | 2.36% | 2.68% | 2.68% | 2.68% | 2.68% | 2.68% | 2.68% | 2.68% | |
Cash flow hedging | 5-10 years | Exchange rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | |
Cash flow hedging | Over 10 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Derivatives notional (£bn) | £ 600 | £ 600 | £ 600 | £ 600 | £ 600 | £ 600 | £ 600 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | |
Cash flow hedging | 10-20 years | Interest rate risk | Hedging assets | |||||||||||||||
Derivatives | |||||||||||||||
Average fixed interest rate | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | |
Cash flow hedging | 10-20 years | Interest rate risk | Hedging liabilities | |||||||||||||||
Derivatives | |||||||||||||||
Average fixed interest rate | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% |
Derivatives - Analysis of cash
Derivatives - Analysis of cash flow reserve and foreign exchange reserve (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives | |||
Pre-tax cash flow hedge reserve | £ (2,629) | £ (3,837) | |
Pre-tax foreign exchange hedge reserve | (789) | (965) | |
Amount recognised in equity, cash flow hedges | 187 | (2,973) | £ (687) |
Amount recognised in equity, foreign exchange hedge reserve | 107 | (266) | £ 88 |
Amount transferred from equity to earnings, cash flow hedge reserve | 1,021 | (304) | |
Amount transferred from equity to earnings, foreign exchange hedge reserve | 69 | 7 | |
Interest rate risk | |||
Derivatives | |||
Continuing cash flow hedge reserve | (2,330) | (3,576) | |
De-designated cash flow hedge reserve | (304) | (297) | |
Amount recognised in equity, cash flow hedges | 137 | (2,997) | |
Amount recognised in equity, foreign exchange hedge reserve | (64) | ||
Amount transferred from equity to earnings, cash flow hedge reserve | (10) | (21) | |
Interest rate risk | Net interest income | |||
Derivatives | |||
Amount transferred from equity to earnings, cash flow hedge reserve | 1,112 | (252) | |
Interest rate risk | Non interest income | |||
Derivatives | |||
Amount transferred from equity to earnings, cash flow hedge reserve | (10) | (21) | |
Interest rate risk | Operating expenses | |||
Derivatives | |||
Amount transferred from equity to earnings, cash flow hedge reserve | (14) | ||
Exchange rate risk | |||
Derivatives | |||
Continuing cash flow hedge reserve | 1 | 16 | |
Continuing foreign exchange hedge reserve | (18) | (85) | |
De-designated cash flow hedge reserve | 4 | 20 | |
De-designated foreign exchange hedge reserve | (771) | (880) | |
Amount recognised in equity, cash flow hedges | 50 | 24 | |
Amount recognised in equity, foreign exchange hedge reserve | 107 | (202) | |
Exchange rate risk | Net interest income | |||
Derivatives | |||
Amount transferred from equity to earnings, cash flow hedge reserve | (74) | (29) | |
Exchange rate risk | Non interest income | |||
Derivatives | |||
Amount transferred from equity to earnings, cash flow hedge reserve | (9) | 15 | |
Amount transferred from equity to earnings, foreign exchange hedge reserve | 69 | 7 | |
Exchange rate risk | Operating expenses | |||
Derivatives | |||
Amount transferred from equity to earnings, cash flow hedge reserve | £ 2 | £ (3) |
Loan impairment provisions (Det
Loan impairment provisions (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Contingent Liability | ||
Loan impairment provisions | ||
ECL (release)/charge | £ (9) | £ (5) |
Other financial assets | ||
Loan impairment provisions | ||
Financial Assets | 51,102 | 30,895 |
ECL (release)/charge | (16) | 3 |
Off-Balance Sheet Exposures | Impairment | ||
Loan impairment provisions | ||
Financial Assets | (100) | (100) |
FVOCI | Impairment | ||
Loan impairment provisions | ||
Financial Assets | (9) | (3) |
FVOCI | Other financial assets | ||
Loan impairment provisions | ||
ECL (release)/charge | £ 6 | £ 0 |
Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | ||
Loan impairment provisions | ||
ECL provision coverage (in percentage) | 0.93% | 0.91% |
ECL (release)/charge | £ 578 | £ 337 |
Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Gross carrying amount | ||
Loan impairment provisions | ||
Financial Assets | 392,040 | 377,153 |
Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Impairment | ||
Loan impairment provisions | ||
Financial Assets | (3,645) | (3,434) |
Cash at central banks | Other financial assets | ||
Loan impairment provisions | ||
Financial Assets | 103,100 | 143,300 |
Debt securities | Other financial assets | ||
Loan impairment provisions | ||
Financial Assets | 50,100 | 29,900 |
Consumer loans | Impairment | ||
Loan impairment provisions | ||
Financial Assets | £ (3,645) | £ (3,434) |
12-month expected credit losses | Not credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | ||
Loan impairment provisions | ||
ECL provision coverage (in percentage) | 0.20% | 0.19% |
ECL (release)/charge | £ (397) | £ (290) |
12-month expected credit losses | Not credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Gross carrying amount | ||
Loan impairment provisions | ||
Financial Assets | 348,586 | 325,224 |
12-month expected credit losses | Not credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Impairment | ||
Loan impairment provisions | ||
Financial Assets | £ (709) | £ (632) |
Lifetime expected credit losses | Not credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | ||
Loan impairment provisions | ||
ECL provision coverage (in percentage) | 2.58% | 2.23% |
ECL (release)/charge | £ 645 | £ 393 |
Lifetime expected credit losses | Not credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Individually assessed | ||
Loan impairment provisions | ||
Amounts written off | 42 | 168 |
Lifetime expected credit losses | Not credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Gross carrying amount | ||
Loan impairment provisions | ||
Financial Assets | 37,891 | 46,833 |
Lifetime expected credit losses | Not credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Impairment | ||
Loan impairment provisions | ||
Financial Assets | £ (976) | £ (1,043) |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | ||
Loan impairment provisions | ||
ECL provision coverage (in percentage) | 35.23% | 34.52% |
ECL (release)/charge | £ 330 | £ 234 |
Amounts written off | 319 | 482 |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Individually assessed | ||
Loan impairment provisions | ||
ECL (release)/charge | 89 | 54 |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Collectively assessed | ||
Loan impairment provisions | ||
ECL (release)/charge | 241 | 180 |
Amounts written off | 277 | 314 |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Gross carrying amount | ||
Loan impairment provisions | ||
Financial Assets | 5,563 | 5,096 |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Gross carrying amount | Individually assessed | ||
Loan impairment provisions | ||
Financial Assets | 1,031 | 1,121 |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Gross carrying amount | Collectively assessed | ||
Loan impairment provisions | ||
Financial Assets | 4,532 | 3,975 |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Impairment | ||
Loan impairment provisions | ||
Financial Assets | (1,960) | (1,759) |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Impairment | Individually assessed | ||
Loan impairment provisions | ||
Financial Assets | (332) | (287) |
Lifetime expected credit losses | Credit impaired | Loans and advances | Financial assets at amortised cost and fair value through other comprehensive income | Impairment | Collectively assessed | ||
Loan impairment provisions | ||
Financial Assets | £ (1,628) | £ (1,472) |
Other financial assets (Details
Other financial assets (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Other debt securities | £ 28,754 | £ 16,349 |
Total debt securities | 50,024 | 29,636 |
Equity shares | 313 | 360 |
Loans classified as other financial assets | 765 | 899 |
Other financial assets | 51,102 | 30,895 |
Amount of shares acquired | 0 | |
UK | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 9,330 | 3,364 |
USA | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 6,164 | 8,112 |
Countries other than the US and the UK | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 5,776 | 1,811 |
Permanent TSB p.l.c. | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Amount of shares acquired | 146 | |
Disposal of shares | 47 | |
Vodeno Limited | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Amount of shares acquired | 26 | |
VISA | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Disposal of shares | 99 | |
UBS Equity Funds | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Disposal of shares | 35 | 69 |
Mandatory fair value through profit or loss | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Other debt securities | 1 | 2 |
Total debt securities | 1 | 2 |
Equity shares | 2 | 3 |
Loans classified as other financial assets | 700 | 782 |
Other financial assets | 703 | 787 |
Designated at fair value | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Other debt securities | 2 | |
Total debt securities | 5 | |
Other financial assets | 5 | |
Designated at fair value | Countries other than the US and the UK | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 3 | |
Fair value through other comprehensive income | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Other debt securities | 10,627 | 6,765 |
Total debt securities | 28,323 | 16,499 |
Equity shares | 311 | 357 |
Loans classified as other financial assets | 65 | 117 |
Other financial assets | 28,699 | 16,973 |
Fair value through other comprehensive income | UK | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 6,441 | 802 |
Fair value through other comprehensive income | USA | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 5,517 | 7,175 |
Fair value through other comprehensive income | Countries other than the US and the UK | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 5,738 | 1,757 |
Amortised cost | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Other debt securities | 18,124 | 9,582 |
Total debt securities | 21,695 | 13,135 |
Other financial assets | 21,695 | 13,135 |
Amortised cost | UK | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 2,889 | 2,562 |
Amortised cost | USA | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | 647 | 937 |
Amortised cost | Countries other than the US and the UK | ||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||
Central and local government debt securities | £ 35 | £ 54 |
Intangible assets (Details)
Intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible assets | |||
At beginning of period | £ 7,116 | ||
At end of period | 7,614 | £ 7,116 | |
Intangible assets | 7,614 | 7,116 | |
Impairment of intangible assets | 23 | 0 | |
Goodwill | £ 5,680 | £ 5,522 | |
Impairment of goodwill | £ 85 | ||
Expected growth rate | 1.40% | 1.40% | |
Retail Banking | |||
Intangible assets | |||
Goodwill | £ 2,607 | £ 2,607 | |
Pre-tax discount rate | 16% | 15.30% | |
Private Banking | |||
Intangible assets | |||
Goodwill | £ 9 | £ 9 | |
Pre-tax discount rate | 16% | 15.30% | |
RBS International | |||
Intangible assets | |||
Goodwill | £ 300 | £ 300 | |
Pre-tax discount rate | 14.60% | 14% | |
Cushon | |||
Intangible assets | |||
Goodwill | £ 159 | £ 0 | |
Pre-tax discount rate | 15.30% | 0% | |
Ring-Fenced Bank Commercial & Institutional | |||
Intangible assets | |||
Goodwill | £ 2,605 | £ 2,606 | |
Pre-tax discount rate | 16% | 15.30% | |
Retail Banking | |||
Intangible assets | |||
Goodwill | £ 2,607 | £ 2,607 | |
Private Banking | |||
Intangible assets | |||
Goodwill | 9 | 9 | |
Cost | |||
Intangible assets | |||
At beginning of period | 13,694 | 12,989 | |
Currency translation and other adjustments | (11) | ||
Acquisitions of companies and businesses | 196 | ||
Additions | 762 | 743 | |
Disposals and write-off of fully amortised assets | (115) | (27) | |
At end of period | 14,537 | 13,694 | 12,989 |
Intangible assets | 14,537 | 13,694 | 12,989 |
Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At beginning of period | (6,578) | (6,266) | |
Currency translation and other adjustments | 12 | ||
Disposals and write-off of fully amortised assets | 116 | 17 | |
Impairment of intangible assets | 23 | ||
Amortisation charge for the year | 438 | 341 | |
At end of period | (6,923) | (6,578) | (6,266) |
Intangible assets | (6,923) | (6,578) | (6,266) |
Goodwill | |||
Intangible assets | |||
At beginning of period | 5,522 | ||
At end of period | 5,680 | 5,522 | |
Intangible assets | 5,680 | 5,522 | |
Goodwill | Cost | |||
Intangible assets | |||
At beginning of period | 9,931 | 9,939 | |
Currency translation and other adjustments | (8) | ||
Acquisitions of companies and businesses | 159 | ||
At end of period | 10,090 | 9,931 | 9,939 |
Intangible assets | 10,090 | 9,931 | 9,939 |
Goodwill | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At beginning of period | (4,409) | (4,417) | |
Currency translation and other adjustments | 8 | ||
Impairment of intangible assets | 1 | ||
At end of period | (4,410) | (4,409) | (4,417) |
Intangible assets | (4,410) | (4,409) | (4,417) |
Intangible assets other than goodwill | |||
Intangible assets | |||
At beginning of period | 1,594 | ||
At end of period | 1,934 | 1,594 | |
Intangible assets | 1,934 | 1,594 | |
Intangible assets other than goodwill | Cost | |||
Intangible assets | |||
At beginning of period | 3,763 | 3,050 | |
Currency translation and other adjustments | (3) | ||
Acquisitions of companies and businesses | 37 | ||
Additions | 762 | 743 | |
Disposals and write-off of fully amortised assets | (115) | (27) | |
At end of period | 4,447 | 3,763 | 3,050 |
Intangible assets | 4,447 | 3,763 | 3,050 |
Intangible assets other than goodwill | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At beginning of period | (2,169) | (1,849) | |
Currency translation and other adjustments | 4 | ||
Disposals and write-off of fully amortised assets | 116 | 17 | |
Impairment of intangible assets | 22 | ||
Amortisation charge for the year | 438 | 341 | |
At end of period | (2,513) | (2,169) | (1,849) |
Intangible assets | £ (2,513) | £ (2,169) | £ (1,849) |
Other assets (Details)
Other assets (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Other assets | ||
Interests in associates | £ 668 | £ 688 |
Property, plant and equipment | 4,227 | 4,240 |
Pension schemes in net surplus | 201 | 318 |
Prepayments | 350 | 340 |
Accrued income | 292 | 327 |
Tax recoverable | 49 | 279 |
Deferred tax | 1,894 | 2,178 |
Acceptances | 575 | 237 |
Other | 504 | 569 |
Other assets | £ 8,760 | 9,176 |
Freehold buildings and long leaseholds | ||
Other assets | ||
Useful life measured as period of time, property, plant and equipment | 50 years | |
Short leaseholds for unexpired period of lease and property adaption costs | Maximum | ||
Other assets | ||
Useful life measured as period of time, property, plant and equipment | 15 years | |
Short leaseholds for unexpired period of lease and property adaption costs | Minimum | ||
Other assets | ||
Useful life measured as period of time, property, plant and equipment | 10 years | |
Computers equipment | Maximum | ||
Other assets | ||
Useful life measured as period of time, property, plant and equipment | 5 years | |
Other equipment | Maximum | ||
Other assets | ||
Useful life measured as period of time, property, plant and equipment | 15 years | |
Other equipment | Minimum | ||
Other assets | ||
Useful life measured as period of time, property, plant and equipment | 4 years | |
Business Growth Fund | ||
Other assets | ||
Interests in associates | £ 658 | £ 677 |
Other financial liabilities (De
Other financial liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Provisions for liabilities and charges | ||
Total | £ 55,089 | £ 49,107 |
MRELs | ||
Provisions for liabilities and charges | ||
Total | 21,660 | 22,265 |
Other medium term notes | ||
Provisions for liabilities and charges | ||
Total | 17,843 | 16,419 |
Commercial paper and certificates of deposit | ||
Provisions for liabilities and charges | ||
Total | 11,321 | 5,672 |
Covered bonds | ||
Provisions for liabilities and charges | ||
Total | 2,122 | 2,842 |
Securitisation | ||
Provisions for liabilities and charges | ||
Total | 863 | 859 |
Financial liabilities at fair value through profit or loss | Customer accounts | ||
Provisions for liabilities and charges | ||
Total | £ 1,280 | £ 1,050 |
Subordinated liabilities (Detai
Subordinated liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Subordinated liabilities | ||
Dated loan capital | £ 5,573 | £ 5,968 |
Undated loan capital | 22 | 173 |
Preference shares | 119 | 119 |
Total subordinated liabilities | £ 5,714 | £ 6,260 |
Subordinated liabilities - Rede
Subordinated liabilities - Redemption (Details) £ / shares in Units, € in Millions, £ in Millions, $ in Millions | Dec. 31, 2023 GBP (£) £ / shares | Dec. 31, 2023 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2022 GBP (£) £ / shares |
Subordinated liabilities | ||||
Notional amount | £ 13,925,000 | |||
Dated subordinated liabilities before value adjustment due to hedge accounting | £ 5,735 | 6,266 | ||
Dated loan capital | 5,573 | 5,968 | ||
Undated loan capital | 22 | 173 | ||
Preference shares | 119 | 119 | ||
Impact on carrying value due to fair value hedging | (162) | (298) | ||
Subordinated liabilities | £ 5,714 | £ 6,260 | ||
Par value per share | £ / shares | £ 1.0769 | £ 1.0769 | ||
NatWest Group plc | ||||
Subordinated liabilities | ||||
Dated loan capital | £ 5,481 | £ 5,820 | ||
Natwest Group plc, $2,250 million 5.13% notes Maturity dated May-2024 | ||||
Subordinated liabilities | ||||
Notional amount | $ | $ 2,250 | |||
Interest rate | 5.125% | 5.125% | 5.125% | |
Dated loan capital | £ 418 | 706 | ||
Natwest Group plc, $2,000 million 6.00% notes Maturity dated Dec-2023 | ||||
Subordinated liabilities | ||||
Notional amount | $ | $ 2,000 | |||
Interest rate | 6% | 6% | 6% | |
Dated loan capital | 536 | |||
Natwest Group plc, £1,000 million 3.622% notes Maturity dated Aug 2030 | ||||
Subordinated liabilities | ||||
Notional amount | £ 1,000 | |||
Interest rate | 3.622% | 3.622% | 3.622% | |
Dated loan capital | £ 985 | 964 | ||
Natwest Group plc, £1,000 million 2.105% notes Maturity dated Nov-2031 | ||||
Subordinated liabilities | ||||
Notional amount | £ 1,000 | |||
Interest rate | 2.105% | 2.105% | 2.105% | |
Dated loan capital | £ 1,000 | 1,001 | ||
Natwest Group plc, $1,000 million 6.10% notes Maturity dated Jun-2023 | ||||
Subordinated liabilities | ||||
Notional amount | $ | $ 1,000 | |||
Interest rate | 6.10% | 6.10% | 6.10% | |
Dated loan capital | 126 | |||
Natwest Group plc, $850 million 3.032% notes Maturity dated Nov-2035 | ||||
Subordinated liabilities | ||||
Notional amount | $ | $ 850 | |||
Interest rate | 3.032% | 3.032% | 3.032% | |
Dated loan capital | £ 541 | 555 | ||
Natwest Group plc, €750 million 1.043% notes Maturity dated Sep-2032 | ||||
Subordinated liabilities | ||||
Notional amount | € | € 750 | |||
Interest rate | 1.043% | 1.043% | 1.043% | |
Dated loan capital | £ 652 | 665 | ||
Natwest Group plc, $750 million 3.754% notes Maturity dated Nov-2029 | ||||
Subordinated liabilities | ||||
Notional amount | $ | $ 750 | |||
Interest rate | 3.754% | 3.754% | 3.754% | |
Dated loan capital | £ 592 | 626 | ||
Natwest Group plc, €700 million 5.763% notes Maturity dated Feb-2034 | ||||
Subordinated liabilities | ||||
Notional amount | € | € 700 | |||
Interest rate | 5.763% | 5.763% | 5.763% | |
Dated loan capital | £ 636 | |||
Natwest Group plc, £650 million 7.416% notes Maturity dated Jun-2033 | ||||
Subordinated liabilities | ||||
Notional amount | £ 650 | |||
Interest rate | 7.416% | 7.416% | 7.416% | |
Dated loan capital | £ 657 | 641 | ||
Other subsidiaries, €170 million Floating rate notes Maturity dated Feb-2041 | ||||
Subordinated liabilities | ||||
Notional amount | € | € 170 | |||
Dated loan capital | £ 237 | 223 | ||
Other subsidiaries, $150 million 7.125% notes Maturity dated Oct-93 | ||||
Subordinated liabilities | ||||
Notional amount | $ | $ 150 | |||
Interest rate | 7.125% | 7.125% | 7.125% | |
Dated loan capital | £ 17 | 18 | ||
Other subsidiaries, €145.6 Million Floating rate notes Maturity dated Apr-2023 | ||||
Subordinated liabilities | ||||
Notional amount | € | € 145.6 | |||
Dated loan capital | 122 | |||
Other subsidiaries, $136 million 7.75% notes Maturity dated May-2023 | ||||
Subordinated liabilities | ||||
Notional amount | $ | $ 136 | |||
Interest rate | 7.75% | 7.75% | 7.75% | |
Dated loan capital | 83 | |||
Other subsidiaries, £35 million 11.5% notes | ||||
Subordinated liabilities | ||||
Notional amount | £ 35 | |||
Interest rate | 11.50% | 11.50% | 11.50% | |
Undated loan capital | 72 | |||
Other Subsidiaries £31 Million 7.38% Notes | ||||
Subordinated liabilities | ||||
Notional amount | £ 31 | |||
Interest rate | 7.38% | 7.38% | 7.38% | |
Undated loan capital | £ 1 | 2 | ||
Other subsidiaries, €31 million 11.375% notes | ||||
Subordinated liabilities | ||||
Notional amount | € | € 31 | |||
Interest rate | 11.375% | 11.375% | 11.375% | |
Undated loan capital | 48 | |||
Other Subsidiaries £16 Million 5.63% Notes | ||||
Subordinated liabilities | ||||
Notional amount | £ 16 | |||
Interest rate | 5.63% | 5.63% | 5.63% | |
Undated loan capital | £ 18 | 18 | ||
Other subsidiaries, £11 million 11.75% notes | ||||
Subordinated liabilities | ||||
Notional amount | £ 11 | |||
Interest rate | 11.75% | 11.75% | 11.75% | |
Undated loan capital | 25 | |||
Other subsidiaries £4.9 Million 2.5% fixed notes | ||||
Subordinated liabilities | ||||
Notional amount | £ 4.9 | |||
Interest rate | 2.50% | 2.50% | 2.50% | |
Undated loan capital | £ 3 | 6 | ||
Other subsidiaries, £1.1 million SONIA + 2.8266% notes | ||||
Subordinated liabilities | ||||
Notional amount | £ 1.1 | |||
Undated loan capital | 2 | |||
Other subsidiaries, £1.1 million SONIA + 2.8266% notes | SONIA | ||||
Subordinated liabilities | ||||
Borrowings, adjustment to interest rate basis | 2.827% | 2.827% | 2.827% | |
Other subsidiaries, £140 million Non-cumulative preference shares of £1 | ||||
Subordinated liabilities | ||||
Notional amount | £ 140 | |||
Preference shares | £ 119 | £ 119 | ||
Par value per share | £ / shares | £ 1 |
Other liabilities (Details)
Other liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Other liabilities. | ||
Lease liabilities | £ 670 | £ 1,118 |
Provisions for liabilities and charges | 990 | 1,138 |
Retirement benefit liabilities | 99 | 98 |
Accruals | 1,411 | 1,407 |
Deferred income | 402 | 355 |
Current tax | 332 | 55 |
Deferred tax | 141 | 227 |
Acceptances | 575 | 237 |
Other liabilities | 582 | 711 |
Total other liabilities | 5,202 | 5,346 |
Liabilities of disposal groups | £ 3 | £ 15 |
Other liabilities - Provision f
Other liabilities - Provision for liabilities and charges (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2023 GBP (£) | |
Provisions for liabilities and charges | |
Balance at beginning of the period | £ 1,138 |
Expected credit losses impairment release | (9) |
Currency translation and other movements | (20) |
Charge to income statement | 474 |
Release to income statement | (161) |
Provisions utilised | (432) |
Balance at end of the period | 990 |
Customer redress | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 431 |
Currency translation and other movements | (5) |
Charge to income statement | 276 |
Release to income statement | (36) |
Provisions utilised | (180) |
Balance at end of the period | 486 |
Litigation and other regulatory | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 240 |
Currency translation and other movements | (9) |
Charge to income statement | 21 |
Release to income statement | (33) |
Provisions utilised | (63) |
Balance at end of the period | 156 |
Property | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 154 |
Charge to income statement | 41 |
Release to income statement | (64) |
Provisions utilised | (32) |
Balance at end of the period | 99 |
Commitments and guarantees | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 87 |
Expected credit losses impairment release | (9) |
Balance at end of the period | 78 |
Other | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 226 |
Currency translation and other movements | (6) |
Charge to income statement | 136 |
Release to income statement | (28) |
Provisions utilised | (157) |
Balance at end of the period | £ 171 |
Share capital and other equit_2
Share capital and other equity (Details) - GBP (£) £ / shares in Units, shares in Thousands, £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Date of approval | ||
Par value per share | £ 1.0769 | £ 1.0769 |
Ordinary shares | ||
Date of approval | ||
Allotted, called up and fully paid | £ 9,683 | £ 10,539 |
Number of shares | 8,991,737 | 9,786,024 |
Par value per share | £ 1.076923076923077 | |
Cumulative preference shares of 1 | ||
Date of approval | ||
Allotted, called up and fully paid | £ 0.5 | £ 0.5 |
Number of shares | 483 | 483 |
Par value per share | £ 1 | £ 1 |
Share capital and other equit_3
Share capital and other equity - Movement in shares (Details) - GBP (£) shares in Thousands, £ in Millions | 12 Months Ended | |||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||||
Value of shares | ||||||
Equity at beginning of period | £ 36,496 | £ 41,803 | [1] | £ 43,824 | ||
Ordinary shares issued | [2] | 1,024 | ||||
Equity at end of period | 37,188 | 36,496 | 41,803 | [1] | ||
Ordinary shares | ||||||
Value of shares | ||||||
Equity at beginning of period | 10,539 | 11,468 | ||||
Shares cancellation | (856) | (929) | ||||
Equity at end of period | £ 9,683 | £ 10,539 | £ 11,468 | |||
Number of shares | ||||||
At 1 January | 9,786,024 | 11,467,982 | ||||
Shares cancellation | (794,287) | (929,188) | ||||
Share consolidation | (752,770) | |||||
At 31 December | 8,991,737 | 9,786,024 | 11,467,982 | |||
[1] In 2021, the Total equity balance of £ 41,803 million includes £494 million attributable to Preference shareholders. There was an issue of shares in 2021. This is split between Ordinary share capital of £37 million and Share premium of £50 million. |
Share capital and other equit_4
Share capital and other equity - Ordinary shares (Details) - GBP (£) | 5 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Jun. 16, 2023 | May 22, 2023 | Feb. 06, 2019 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 28, 2023 | Mar. 28, 2023 | Feb. 17, 2023 | Aug. 25, 2022 | |
Date of approval | |||||||||||
Par value | £ 1.0769 | £ 1.0769 | £ 1.0769 | £ 1.0769 | |||||||
Own shares held | Share awards and options | |||||||||||
Date of approval | |||||||||||
Par value | £ 1.0769 | ||||||||||
Shares held in treasury | 12,000,000 | 12,000,000 | 12,000,000 | 13,000,000 | |||||||
On Market Share Buyback Programme | |||||||||||
Date of approval | |||||||||||
Maximum number of ordinary shares purchased under Programme | 1,122,905,024 | ||||||||||
2022 Authority | |||||||||||
Date of approval | |||||||||||
Number of own shares purchased | 301,380,053 | ||||||||||
Nominal value of own shares purchased | £ 324,563,134 | ||||||||||
Purchase price per share | £ 2.654456 | ||||||||||
Consideration paid for repurchase of own shares | £ 799,999,997.76 | ||||||||||
Percentage of issued shares repurchased | 3.16% | ||||||||||
Maximum number of ordinary shares purchased under Programme | 966,778,930 | 966,284,391 | |||||||||
Maximum amount for share buy back programme | £ 800,000,000 | ||||||||||
2023 Authority | |||||||||||
Date of approval | |||||||||||
Number of own shares purchased | 158,956,435 | ||||||||||
Nominal value of own shares purchased | £ 171,183,853 | ||||||||||
Purchase price per share | £ 2.176375 | ||||||||||
Consideration paid for repurchase of own shares | £ 345,948,738 | ||||||||||
Percentage of issued shares repurchased | 1.75% | ||||||||||
Maximum number of ordinary shares purchased under Programme | 919,858,922 | ||||||||||
Maximum amount for share buy back programme | £ 500,000,000 | ||||||||||
Off Market Share Buyback Programmes | |||||||||||
Date of approval | |||||||||||
Number of own shares purchased | 469,200,081 | ||||||||||
Nominal value of own shares purchased | £ 505,292,395 | ||||||||||
Purchase price per share | £ 2.684 | ||||||||||
Number of treasury stock, shares cancelled | 336,200,081 | ||||||||||
Consideration paid for repurchase of own shares | £ 1,259,333,017 | ||||||||||
Percentage of issued shares repurchased | 4.95% | ||||||||||
Shares held in treasury | 133,000,000 | ||||||||||
Ordinary shares | |||||||||||
Date of approval | |||||||||||
Par value | £ 1.076923076923077 | £ 1.076923076923077 | £ 1.076923076923077 | ||||||||
Authorized share capital | £ 0 | £ 0 | £ 0 | ||||||||
Authorized share capital granted | £ 520,573,270 | £ 520,573,270 | £ 520,573,270 | ||||||||
Shares held in treasury | 187,000,000 | 187,000,000 | 187,000,000 | ||||||||
Interim dividend paid | £ 491,000,000 | £ 364,000,000 | |||||||||
Interim dividend per share | £ 0.055 | £ 0.035 | |||||||||
Final dividend recommended | £ 1,000,000,000 | £ 1,000,000,000 | £ 1,000,000,000 | £ 1,000,000,000 | |||||||
Final dividend recommended, per share | £ 0.115 | £ 0.115 | £ 0.115 | £ 0.100 | |||||||
Ordinary shares | Off Market Share Buyback Programmes | |||||||||||
Date of approval | |||||||||||
Percentage of outstanding ordinary share capital that company is authorized to repurchase in any 12-month period through off-market transactions | 4.99% |
Share capital and other equit_5
Share capital and other equity - Non-cumulative preference shares (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share capital and other equity | |||||
Value of shares | £ 37,188 | £ 36,496 | £ 41,803 | [1] | £ 43,824 |
[1] In 2021, the Total equity balance of £ 41,803 million includes £494 million attributable to Preference shareholders. |
Share capital and other equit_6
Share capital and other equity - Paid-in equity (Details) £ / shares in Units, $ / shares in Units, £ in Millions, $ in Millions | Dec. 31, 2023 GBP (£) £ / shares | Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 GBP (£) £ / shares | Dec. 31, 2021 GBP (£) | Dec. 31, 2020 GBP (£) | |
Borrowings | ||||||
Equity | £ 37,188 | £ 36,496 | £ 41,803 | [1] | £ 43,824 | |
Notional amount | £ 13,925,000 | |||||
Par value | £ / shares | £ 1.0769 | £ 1.0769 | ||||
Paid-in equity | ||||||
Borrowings | ||||||
Equity | £ 3,890 | £ 3,890 | 3,890 | [1] | £ 4,999 | |
Paid-in equity | Additional tier 1 note callable August, 2025, USD | ||||||
Borrowings | ||||||
Equity | £ 735 | 735 | 735 | |||
Notional amount | $ | $ 1,150 | |||||
Interest rate | 8% | 8% | ||||
Conversion rate | $ / shares | $ 3.314 | |||||
Paid-in equity | Additional tier 1 note callable December 2025 - June, 2026, USD | ||||||
Borrowings | ||||||
Equity | £ 1,220 | 1,220 | 1,220 | |||
Notional amount | $ | $ 1,500 | |||||
Interest rate | 6% | 6% | ||||
Conversion rate | $ / shares | $ 2.191 | |||||
Paid-in equity | Additional tier1 note callable May - November 2027, GBP | ||||||
Borrowings | ||||||
Equity | £ 998 | 998 | 998 | |||
Notional amount | £ 1,000 | |||||
Interest rate | 5.125% | 5.125% | ||||
Conversion rate | £ / shares | £ 1.764 | |||||
Paid-in equity | Additional tier 1 notes, callable March 2028, GBP | ||||||
Borrowings | ||||||
Equity | £ 399 | 399 | 399 | |||
Notional amount | £ 400 | |||||
Conversion rate | £ / shares | £ 1.764 | |||||
Paid-in equity | Additional tier 1 notes, callable June 2031, USD | ||||||
Borrowings | ||||||
Equity | £ 538 | £ 538 | £ 538 | |||
Notional amount | $ | $ 750 | |||||
Conversion rate | $ / shares | $ 2.462 | |||||
Paid-in equity | Minimum | Instruments are converted to into ordinary shares at fixed price | ||||||
Borrowings | ||||||
CET1 ratio (as a percent) | 7% | 7% | ||||
[1] In 2021, the Total equity balance of £ 41,803 million includes £494 million attributable to Preference shareholders. |
Share capital and other equit_7
Share capital and other equity - Reserves (Details) £ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended | 34 Months Ended | ||||||
Aug. 30, 2022 | May 31, 2023 shares | Mar. 31, 2021 shares | Dec. 31, 2023 GBP (£) £ / shares shares | Dec. 31, 2022 GBP (£) £ / shares shares | Dec. 31, 2021 GBP (£) £ / shares | Dec. 31, 2023 £ / shares shares | |||
Shares repurchased during the period | £ | [1],[2] | £ 2,057,000,000 | £ 2,054,000,000 | £ 1,423,000,000 | |||||
Par value | £ / shares | £ 1.0769 | £ 1.0769 | £ 1.0769 | ||||||
Ordinary share from discontinued operations basic | £ / shares | (0.01222) | (0.027) | £ 0.043 | [3] | |||||
Ordinary share from discontinued operations dilutive | £ / shares | £ (0.012) | £ (0.026) | £ 0.043 | [3] | |||||
Share consolidation ratio | 0.9286 | ||||||||
Ordinary shares | |||||||||
Own shares held | shares | 187 | 187 | |||||||
Par value | £ / shares | £ 1.076923076923077 | £ 1.076923076923077 | |||||||
Number of shares transferred to treasury | shares | 133 | 200 | |||||||
Number of shares used to satisfy the exercise of options and vesting of awards | shares | 146 | ||||||||
Share awards and options | Ordinary shares | |||||||||
Shares repurchased during the period | £ | £ 0 | ||||||||
Share awards and options | Own shares held | |||||||||
Own shares held | shares | 12 | 13 | 12 | ||||||
Par value | £ / shares | £ 1.0769 | ||||||||
Delivery of own shares held | shares | 1 | ||||||||
[1] In May 2023, there was an agreement to buy 469.2 million (March 2022 – 549.9 million, March 2021 - 591.0 million) ordinary shares of the Company from UK Government Investments Ltd (UKGI) at 268.4 pence per share (March 2022 - 220.5 pence per share, March 2021 - 190.5 pence per share) for the total consideration of £1.3 billion (2022 - £1.2 billion, 2021 - £1.1 billion). NatWest Group cancelled 336.2 million of the purchased ordinary shares, amounting to £906.9 million excluding fees and held the remaining 133.0 million shares as Own Shares Held, amounting to £358.8 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve. NatWest Group plc repurchased and cancelled 460.3 million (2022 – 379.3 million, 2021 - 310.8 million) shares, of which 2.3 million were settled in January 2024. The total consideration of these shares excluding fees was £ 1,151.7 million (2022 - £829.3 million, 2021 £676.2 million), of which £4.9 million were settled in January 2024, as part of the On Market Share Buyback Programmes. The nominal value of the share cancellations has been transferred to the capital redemption reserve. Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Structured entities - Own asset
Structured entities - Own asset securitisations (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Structured entities | ||
Loans and advances to customers | £ 381,433 | £ 366,340 |
Assets pledged against liabilities | 39,156 | 35,972 |
Structured entities relating to other credit risk transfer securitisation | ||
Structured entities | ||
Loans and advances to customers | 2,687 | 4,361 |
Reduction in expected credit losses from financial guarantee contracts with consolidated structured entities | 11 | 20 |
Structured entities relating to other credit risk transfer securitisation | Third parties | ||
Structured entities | ||
Debt securities in issue | 863 | 859 |
Structured entities relating to covered debt programme | ||
Structured entities | ||
Other borrowings | 3,619 | 4,132 |
Structured entities relating to covered debt programme | Loans to customers | ||
Structured entities | ||
Assets pledged against liabilities | 11,067 | 8,156 |
Structured entities relating to lending of own issued securities | Debt securities | Lending of own issued securities | ||
Structured entities | ||
Assets pledged against liabilities | 2,414 | 2,244 |
Structured entities relating to lending of own issued securities | Secured | Lending of own issued securities | ||
Structured entities | ||
Debt securities in issue | £ 2,312 | £ 2,419 |
Structured entities - Unconsoli
Structured entities - Unconsolidated structured entities (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Unconsolidated structured entities | ||
Structured entities | ||
Assets recognised related to structured entities | £ 18,606 | £ 11,358 |
Liabilities recognised related to structured entities | 230 | 410 |
Liquidity facilities/loan commitments | 2,269 | 2,043 |
Guarantees | 127 | 107 |
Total | 2,396 | 2,150 |
Maximum exposure | 20,772 | 13,098 |
Unconsolidated structured entities | Trading assets | ||
Structured entities | ||
Assets recognised related to structured entities | 614 | 753 |
Unconsolidated structured entities | Derivative assets | ||
Structured entities | ||
Assets recognised related to structured entities | 134 | 343 |
Unconsolidated structured entities | Derivative liabilities | ||
Structured entities | ||
Liabilities recognised related to structured entities | 230 | 410 |
Unconsolidated structured entities | Loans to customers | ||
Structured entities | ||
Assets recognised related to structured entities | 3,700 | 3,079 |
Unconsolidated structured entities | Other financial assets | ||
Structured entities | ||
Assets recognised related to structured entities | 14,158 | 7,183 |
Asset backed securitisation vehicles | ||
Structured entities | ||
Assets recognised related to structured entities | 16,234 | 9,724 |
Liabilities recognised related to structured entities | 213 | 388 |
Liquidity facilities/loan commitments | 1,873 | 1,723 |
Total | 1,873 | 1,723 |
Maximum exposure | 17,894 | 11,059 |
Asset backed securitisation vehicles | Trading assets | ||
Structured entities | ||
Assets recognised related to structured entities | 303 | 616 |
Asset backed securitisation vehicles | Derivative assets | ||
Structured entities | ||
Assets recognised related to structured entities | 134 | 343 |
Asset backed securitisation vehicles | Derivative liabilities | ||
Structured entities | ||
Liabilities recognised related to structured entities | 213 | 388 |
Asset backed securitisation vehicles | Loans to customers | ||
Structured entities | ||
Assets recognised related to structured entities | 2,701 | 2,431 |
Asset backed securitisation vehicles | Other financial assets | ||
Structured entities | ||
Assets recognised related to structured entities | 13,096 | 6,334 |
Investment funds and other | ||
Structured entities | ||
Assets recognised related to structured entities | 2,372 | 1,634 |
Liabilities recognised related to structured entities | 17 | 22 |
Liquidity facilities/loan commitments | 396 | 320 |
Guarantees | 127 | 107 |
Total | 523 | 427 |
Maximum exposure | 2,878 | 2,039 |
Investment funds and other | Trading assets | ||
Structured entities | ||
Assets recognised related to structured entities | 311 | 137 |
Investment funds and other | Derivative liabilities | ||
Structured entities | ||
Liabilities recognised related to structured entities | 17 | 22 |
Investment funds and other | Loans to customers | ||
Structured entities | ||
Assets recognised related to structured entities | 999 | 648 |
Investment funds and other | Other financial assets | ||
Structured entities | ||
Assets recognised related to structured entities | £ 1,062 | £ 849 |
Asset transfers (Details)
Asset transfers (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | £ 16,962 | £ 9,983 |
Fair value of associated liabilities | 16,522 | 9,501 |
Trading assets | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | 7,907 | 6,668 |
Loans to customers - amortised cost | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | 281 | 398 |
Other financial assets | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | 8,764 | 2,901 |
Loans to banks - amortised cost | Loans to banks - amortised cost | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | £ 10 | £ 16 |
Asset transfers - Assets pledge
Asset transfers - Assets pledged as collateral (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Asset transfers | ||
Assets pledged against liabilities | £ 39,156 | £ 35,972 |
Debt securities classified as other assets pledged against liabilities | 482 | 482 |
Loans to customers and debt instruments transferred to provide collateral for issue of debt | 11,067 | 8,156 |
Debt securities and other borrowings issued for which collateral is provided by transferred assets | 3,619 | 4,132 |
Trading assets | ||
Asset transfers | ||
Assets pledged against liabilities | 10,976 | 15,062 |
Loans to banks - amortised cost | ||
Asset transfers | ||
Assets pledged against liabilities | 63 | 66 |
Loans to customers - amortised cost | ||
Asset transfers | ||
Assets pledged against liabilities | 21,611 | 17,493 |
Other financial assets | ||
Asset transfers | ||
Assets pledged against liabilities | £ 6,506 | £ 3,351 |
Capital resources (Details)
Capital resources (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Shareholders' equity (excluding non-controlling interests) | ||
Shareholders' equity | £ 37,157 | £ 36,488 |
Capital resources under the Prudential Regulation Authority requirements | ||
Shareholders' equity (excluding non-controlling interests) | ||
Shareholders' equity | 37,157 | 36,488 |
Other equity instruments | (3,890) | (3,890) |
Shareholders' equity (excluding non-controlling interests) | 33,267 | 32,598 |
Regulatory adjustments and deductions | ||
Own credit | (10) | (58) |
Defined benefit pension fund adjustment | (143) | (227) |
Cash flow hedging reserve | 1,899 | 2,771 |
Deferred tax assets | (979) | (912) |
Prudential valuation adjustments | (279) | (275) |
Goodwill and other intangible assets | (7,614) | (7,116) |
Foreseeable ordinary dividends | (1,013) | (967) |
Adjustment for trust assets | (365) | (365) |
Foreseeable charges | (525) | (800) |
Adjustment under IFRS 9 transitional arrangements | 202 | 361 |
Insufficient coverage for non-performing exposures | 0 | (18) |
Total regulatory adjustments and deductions | (8,827) | (7,606) |
CET1 capital | 24,440 | 24,992 |
Additional Tier 1 (AT1) capital | ||
Qualifying instruments and related share premium | 3,875 | 3,875 |
AT1 capital | 3,875 | 3,875 |
Tier 1 capital | 28,315 | 28,867 |
Qualifying Tier 2 capital | ||
Qualifying instruments and related share premium | 5,189 | 4,953 |
Qualifying instruments issued by subsidiaries and held by third parties | 0 | 82 |
Other regulatory adjustments | 128 | 18 |
Tier 2 capital | 5,317 | 5,053 |
Total regulatory capital | £ 33,632 | £ 33,920 |
Minimum pillar 1 capital ratio | 8% | |
Minimum tier 1 component ratio | 4.50% |
Memorandum items - Contingent l
Memorandum items - Contingent liabilities and commitments (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | £ 115,441 | £ 121,576 | |
Total | 119,631 | 126,581 | £ 125,367 |
Guarantees | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 2,810 | 3,150 | |
Other contingent liabilities | |||
Contingent liabilities and commitments | |||
Estimated net exposure | £ 1,380 | £ 1,855 |
Memorandum items - Contractual
Memorandum items - Contractual obligations of future (Details) - GBP (£) £ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Contractual obligations for future expenditure | ||
Capital expenditure on property, plant and equipment | £ 38 | £ 8 |
Contracts to purchase goods or services | 1,121 | 677 |
Total capital commitments | 1,159 | 685 |
Within 1 year | ||
Contractual obligations for future expenditure | ||
Contracts to purchase goods or services | £ 379 | £ 321 |
Memorandum items - Additional I
Memorandum items - Additional Information (Details) $ in Millions, $ in Millions | 1 Months Ended | 2 Months Ended | 6 Months Ended | 12 Months Ended | 36 Months Ended | 69 Months Ended | |||||||||||||
Jun. 30, 2023 | Nov. 30, 2022 entity | Dec. 31, 2021 item action | Dec. 31, 2020 GBP (£) | Oct. 31, 2020 GBP (£) | May 31, 2019 item | Jul. 31, 2017 | Jan. 31, 2017 item | Oct. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2023 GBP (£) item action | Dec. 31, 2023 USD ($) item action | Dec. 31, 2022 GBP (£) | Dec. 31, 2021 GBP (£) | Dec. 31, 2018 GBP (£) | Dec. 31, 2015 company | Dec. 31, 2009 | Dec. 31, 2011 USD ($) | Oct. 15, 2013 AUD ($) | |
Litigation, investigations and reviews | |||||||||||||||||||
Fee income from trustee or other fiduciary activities which is not included in entity's financial statements | £ | £ 264,000,000 | £ 266,000,000 | £ 280,000,000 | ||||||||||||||||
provisions utilised | £ | £ 432,000,000 | ||||||||||||||||||
Royal Bank of Scotland International Limited | Isle of Man | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of non-personal customers | item | 2,239 | 2,239 | |||||||||||||||||
Amount of fine payable | £ | £ 1,000,000 | ||||||||||||||||||
Maximum | Royal Bank of Scotland International Limited | Isle of Man | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Percentage of total customer population | 3% | 3% | |||||||||||||||||
Litigation and other regulatory | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
provisions utilised | £ | £ 63,000,000 | ||||||||||||||||||
London Interbank Offered Rate (LIBOR) litigation | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of non-class action | action | 24 | ||||||||||||||||||
US investigations relating to fixed-income securities | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Period during which entity is suspected of fraudulent trading | 3 months | ||||||||||||||||||
Number of wire fraud | item | 1 | ||||||||||||||||||
Number of securities frauds | item | 1 | ||||||||||||||||||
FDIC | London Interbank Offered Rate (LIBOR) litigation | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of failed US banks | 39 | ||||||||||||||||||
Number of banks for which claims have been dropped | item | 20 | ||||||||||||||||||
Number of remaining claimant banks | item | 19 | ||||||||||||||||||
Other IBOR cases | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of class action lawsuits | item | 2 | ||||||||||||||||||
Number of class actions dismissed but appealed | £ | 2 | ||||||||||||||||||
Federal Court of Australia FX antitrust litigation | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of other parties subject to lawsuit or legal investigation | item | 4 | ||||||||||||||||||
Federal Court of Australia FX antitrust litigation | Minimum | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Transaction value of investigated trades | $ | $ 0.5 | ||||||||||||||||||
UK Competition Appeal Tribunal, FX litigation | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of applications for opt-out collective proceedings | 2 | ||||||||||||||||||
Tel Aviv District Court FX antitrust litigations | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of motions to certify FX-related class actions | 2 | ||||||||||||||||||
Swaps antitrust litigation | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of swap execution facilities | item | 3 | 3 | |||||||||||||||||
Spoofing litigation | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of class action lawsuits | action | 3 | ||||||||||||||||||
Madoff | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of class action lawsuits | action | 2 | 2 | |||||||||||||||||
Damages claimed | $ | $ 298 | ||||||||||||||||||
EUA trading litigation | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of claimants | company | 10 | ||||||||||||||||||
Period during which entity is suspected of fraudulent trading | 7 days | ||||||||||||||||||
Damages quantified | £ | £ 45,000,000 | ||||||||||||||||||
1MDB litigation | Coutts & Co Ltd | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of other parties subject to lawsuit or legal investigation | entity | 6 | ||||||||||||||||||
Contested amount received and paid out | $ | $ 1,000 | ||||||||||||||||||
Review and investigation of treatment of tracker mortgage customers in Ulster Bank Ireland DAC | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Number of FSPO adjudications challenged in court | 3 | ||||||||||||||||||
Offshoring VAT assessments | |||||||||||||||||||
Litigation, investigations and reviews | |||||||||||||||||||
Claimed unpaid VAT after tax assessment | £ | £ 143,000,000 | ||||||||||||||||||
Number of branches subject to tax assessment | 2 | ||||||||||||||||||
Payments for tax assessments | £ | £ 143,000,000 |
Non-cash and other items (Detai
Non-cash and other items (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Non-cash and other items | |||
Impairment losses/(releases) | £ 572 | £ 266 | £ (1,335) |
Depreciation and amortisation | 934 | 833 | 923 |
Change in fair value taken to profit or loss of other financial assets | (584) | 1,267 | 1,771 |
Change in fair value taken to profit or loss on other financial liabilities and subordinated liabilities | 831 | (2,400) | (1,083) |
Foreign exchange recycling (gains)/losses | (484) | (5) | 10 |
Elimination of foreign exchange differences | 312 | 10 | 2,446 |
Income receivable on other financial assets | (1,415) | (585) | (378) |
Loss/(profit) on sale of other financial assets | 44 | 172 | (118) |
Profit on sale of subsidiaries and associates | (48) | ||
Share of loss/(profit) of associates | 9 | 30 | (216) |
Loss on sale of other assets and net assets/liabilities | 125 | 154 | 23 |
Interest payable on MRELs and subordinated liabilities | 1,352 | 1,103 | 964 |
(Gain)/loss on redemption of own debt | (3) | 161 | 145 |
Charges and releases on provisions | 313 | 248 | 478 |
Change in fair value of cash flow hedges | 1,021 | (304) | (161) |
Other non-cash items | 59 | 48 | (13) |
Defined benefit pension schemes | 122 | 205 | 215 |
Non-cash and other items | 3,208 | 1,203 | 3,623 |
Change in operating assets and liabilities | |||
Change in trading assets | 327 | 14,991 | 7,751 |
Change in derivative assets | 20,826 | 3,621 | 59,697 |
Change in settlement balance assets | (4,659) | (431) | 156 |
Change in loans to banks | 752 | (202) | (252) |
Change in loans to customers | (15,626) | (7,628) | 2,721 |
Change in other financial assets | 132 | (328) | (128) |
Change in other assets | (213) | (255) | (57) |
Change in assets of disposal groups | 412 | (4,117) | (9,015) |
Change in bank deposits | 1,749 | (5,838) | 5,673 |
Change in customer deposits | (18,964) | (29,492) | 48,071 |
Change in settlement balance liabilities | 4,633 | (56) | (350) |
Change in trading liabilities | 828 | (11,790) | (7,658) |
Change in derivative liabilities | (21,652) | (6,788) | (59,870) |
Change in other financial liabilities | 6,564 | 989 | 938 |
Change in notes in circulation | 19 | 171 | 392 |
Change in other liabilities | (807) | (1,294) | (1,463) |
Change in operating assets and liabilities | £ (25,679) | £ (48,447) | £ 46,606 |
Analysis of the net investmen_3
Analysis of the net investment in business interests and intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Analysis of the net investment in business interests and intangible assets | |||
Fair value given for businesses acquired | £ (139) | ||
Acquisition of interest in associates | £ (1) | ||
Additional investment in associates | (5) | £ (51) | |
Net assets and liabilities purchased | (3,128) | ||
Net outflow of cash in respect of acquisitions | 144 | 1 | 3,179 |
Disposal of net assets and liabilities | 5,560 | 6,270 | 114 |
(Loss)/profit on disposal of net assets and liabilities | (87) | (106) | 55 |
Net inflow of cash in respect of disposals | 5,473 | 6,164 | 169 |
Dividends received from associate | 16 | ||
Net cash expenditure on intangible assets | (744) | (743) | (479) |
Net inflow/(outflow) of cash | £ 4,601 | £ 5,420 | £ (3,489) |
Analysis of changes in financ_3
Analysis of changes in financing during the year - Share capital, share premium and paid-in equity (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Equity at beginning of period | £ 36,496 | £ 41,803 | [1] | £ 43,824 | |
Equity at end of period | 37,188 | 36,496 | 41,803 | [1] | |
Share capital, share premium and paid-in equity | |||||
Equity at beginning of period | 15,590 | 16,519 | 18,239 | ||
Issue of paid-in equity | 937 | ||||
Net cash flows from financing activities | 937 | ||||
Ordinary shares issued | 87 | ||||
Share repurchased | (856) | (929) | (698) | ||
Paid in equity reclassified to subordinated liabilities | (2,046) | ||||
Equity at end of period | £ 14,734 | £ 15,590 | £ 16,519 | ||
[1] In 2021, the Total equity balance of £ 41,803 million includes £494 million attributable to Preference shareholders. |
Analysis of changes in financ_4
Analysis of changes in financing during the year - Subordinated liabilities and MRELs (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subordinated Liabilities | |||
Analysis of changes in financing during the year | |||
At 1 January | £ 6,260 | £ 8,429 | £ 9,962 |
Issue of subordinated liabilities | 611 | 648 | 1,634 |
Redemption of subordinated liabilities | (1,250) | (3,693) | (4,765) |
Interest paid on subordinated liabilities | (439) | (374) | (321) |
Net cash flows from financing activities | (1,078) | (3,419) | (3,452) |
Effects of foreign exchange | (166) | 597 | (18) |
Changes in fair value of subordinated liabilities and MRELs | 230 | (594) | (434) |
Preference shares reclassified to subordinated liabilities | 750 | ||
Paid in equity reclassified to subordinated liabilities | 1,915 | ||
(Gain)/loss on redemption of own debt | (3) | 161 | 145 |
Interest payable on subordinated liabilities and MRELs | 464 | 370 | 311 |
Other | 7 | (34) | |
At 31 December | 5,714 | 6,260 | 8,429 |
MRELs | |||
Analysis of changes in financing during the year | |||
At 1 January | 22,265 | 23,423 | 20,873 |
Issue of MRELs | 3,973 | 3,721 | 3,383 |
Maturity and redemption of MRELs | (4,236) | (4,992) | |
Interest paid on MRELs | (844) | (703) | (647) |
Net cash flows from financing activities | (1,107) | (1,974) | 2,736 |
Effects of foreign exchange | (987) | 1,889 | (190) |
Changes in fair value of subordinated liabilities and MRELs | 601 | (1,806) | (649) |
Interest payable on subordinated liabilities and MRELs | 888 | 733 | 653 |
At 31 December | £ 21,660 | £ 22,265 | 23,423 |
Share capital, share premium and paid-in equity | |||
Analysis of changes in financing during the year | |||
Increase through issue of paid in equity | 937 | ||
Net cash flows from financing activities | 937 | ||
Paid in equity reclassified to subordinated liabilities | £ (2,046) |
Analysis of cash and cash equ_3
Analysis of cash and cash equivalents (Details) € in Millions, £ in Millions | Dec. 31, 2023 GBP (£) | Dec. 31, 2023 EUR (€) | Dec. 31, 2022 GBP (£) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 GBP (£) | Dec. 31, 2021 EUR (€) | Dec. 31, 2020 GBP (£) |
Analysis of cash and cash equivalents | |||||||
Cash and bank balances at central banks | £ 104,262 | £ 144,832 | £ 177,757 | ||||
Trading assets | 8,851 | 8,551 | 7,137 | ||||
Other financial assets | 139 | 19 | 16 | ||||
Loans to banks | 5,572 | 5,047 | 5,796 | ||||
Total cash and cash equivalents | 118,824 | 158,449 | 190,706 | £ 139,199 | |||
Cash collateral posted with bank counterparties | 4,434 | 4,895 | 4,293 | ||||
NWM N.V. | |||||||
Analysis of cash and cash equivalents | |||||||
Mandatory reserve deposits at central banks | € | € 132 | € 64 | € 60 | ||||
Royal Bank of Scotland International Limited | |||||||
Analysis of cash and cash equivalents | |||||||
Mandatory reserve deposits at central banks | £ 135 | £ 108 | £ 123 |
Directors' and key management_3
Directors' and key management remuneration - Directors (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Directors' and key management remuneration | ||
Non-executive directors emoluments | £ 1,574 | £ 1,685 |
Chairman and executive directors emoluments | 6,408 | 5,804 |
Short-term compensation expense, directors | 7,982 | 7,489 |
Amounts receivable under long-term incentive plans and share option plans | 2,708 | 542 |
Total | £ 10,690 | £ 8,031 |
Directors' and key management_4
Directors' and key management remuneration - Key management (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Directors' and key management remuneration | ||
Short-term benefits | £ 21,098 | £ 22,175 |
Post-employment benefits | 741 | 732 |
Share-based payments | 7,264 | 2,547 |
Total remuneration | £ 29,103 | £ 25,454 |
Transactions with directors a_3
Transactions with directors and key management (Details) | Dec. 31, 2023 GBP (£) director | Dec. 31, 2022 GBP (£) |
Transactions with directors and key management | ||
Loans to customers - amortised cost | £ 381,433,000,000 | £ 366,340,000,000 |
Customer deposits | 431,377,000,000 | 450,318,000,000 |
key management personnel | ||
Transactions with directors and key management | ||
Loans to customers - amortised cost | 11,406,000 | 12,137,000 |
Customer deposits | 55,254,000 | £ 47,866,000 |
Directors | ||
Transactions with directors and key management | ||
Loans to directors | £ 8,397,763 | |
Number of directors with outstanding loans | director | 9 |
Related party transactions (Det
Related party transactions (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related party transactions | ||
Cash ratio deposits | 0.382% | |
Threshold eligible liabilities | £ 600 | |
Main Pension Scheme | ||
Related party transactions | ||
Transfer of amount to reservoir trust to meet potential future contributions | 471 | |
Bank deposits held within entity | £ 36.2 | £ 61.7 |
HM Treasury | ||
Related party transactions | ||
Proportion of ordinary shares in reporting entity held | 37.97% |
Related party transactions - Im
Related party transactions - Impact to income statement (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disclosure of transactions between related parties | ||
Loans to customers - amortised cost | £ 381,433 | £ 366,340 |
Customer deposits | £ 431,377 | 450,318 |
Related party, minimum ownership interest held | 10% | |
Associates, Joint Ventures and Equity Shares | ||
Disclosure of transactions between related parties | ||
Investments accounted for using equity method and other equity investments | £ 813 | 837 |
Loans to customers - amortised cost | 13 | |
Customer deposits | 12 | 5 |
Settlement balances | 34 | |
Other comprehensive income | (8) | 11 |
Other operating income | (11) | (30) |
Associates and Joint Ventures | ||
Disclosure of transactions between related parties | ||
Investments accounted for using equity method | 668 | 688 |
Customer deposits | 2 | 1 |
Other operating income | (11) | (30) |
Equity Shares | ||
Disclosure of transactions between related parties | ||
Investments other than investments accounted for using equity method | 145 | 149 |
Loans to customers - amortised cost | 13 | |
Customer deposits | 10 | 4 |
Settlement balances | 34 | |
Other comprehensive income | £ (8) | £ 11 |
Related party, minimum ownership interest held | 10% |
Post balance sheet events (Deta
Post balance sheet events (Details) - GBP (£) £ in Millions, shares in Millions | 2 Months Ended | 12 Months Ended | ||
Feb. 15, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of non-adjusting events after reporting period [line items] | ||||
Consideration for shares repurchased | £ 2,416 | £ 2,054 | £ 1,806 | |
Share repurchases | ||||
Disclosure of non-adjusting events after reporting period [line items] | ||||
Number of shares repurchased and cancelled | 64.6 | |||
Consideration for shares repurchased | £ 138.5 |