RBS - Earnings call transcript Q3 2020

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Alison Rose

Good morning, and thank you for joining us today for our third quarter results announcement. I’ll start with the headlines and an update on our strategic priorities before handing over to Katie to take you through the results in more detail. We’ll then open it up for questions.

So starting with the headlines. Whilst the economic outlook remains uncertain as a result of the pandemic, our primary focus has been on supporting our customers and protecting the business whilst continuing to make good progress against our strategic priorities. have resilient we backdrop, this delivered performance. a Against reporting profit an before into third profit account of operating we’re impairments, quarter. the for and Taking tax an £XXX £XX million of attributable million were quarter million. third the in low to at the compared £XXX second Impairments

period look first million. nine Impairment operating reporting pre-impairment the we’re months £XXX at the to loss of of £X.X of stand charges profit a billion. billion, Turning at this £X.X year, for an attributable

track to strong, target remains and on cost we execution our strategic reduction meet are of Our XXXX million. £XXX

expenses operating lease for the Excluding year. were months £X.X period same down depreciation, billion for £X first nine from last billion, the

priorities Importantly, from on to navigate amongst ratio which liquidity operation our I continue helping strongest and coverage the times. flexibility talk operate peers this out businesses to into the gives XXX%. us with been strategic of capital about our take we underpin We capital priorities a we challenging set These of ratios thrive, strength, comfort with have February at want to an one putting European briefly purpose families X. XX.X% and this environment. I uncertain in and in people, to of Slide

the and now of billion on lending continued behalf in spending start has pandemic channels. our Our levels. second £XX up up card branches The and digital focus mortgage above card to with via caution Activity it quarter. I’ll and closely. our to up to and retail on customers in billion country, on spending normal of with £XXX of taking In from to pandemic and July, are to or in for increased book also both customers, holidays through number video has in thank need. mortgage quarter. who to continue face-to-face Initial pre-COVID-XX have open levels and I’d whether XX% of with been an the supporting have working about first is manage £XX.X since would, is however, and grew our through and new all starting small or increase, days the billion credit this mortgage repayment returned all support the billion retail debit early caution at XX% main trends branch book number of this talk our has has network each year and been home XX% grown in applications almost declined they that pandemic. months. XX% hard has and priorities decreasing order customers the have working like X helping of businesses, a with remained lending £X.X just in our that mortgage on now nine steadily customers down the offices, we have suggest the third monitor turn, my from I customers more banking, or across gross payments of the rather activity commercial ongoing ended, customers. Inevitably, than to holiday Slide our or arrears. colleagues acted X% these holidays the Debit

XX% down access credit kicked customers and schemes of X also Slide Revolving on see is about normalize. can utilization to peak banking markets. as facility from You that lending a government are levels XX%, commercial starting activity capital now in

in now and Commercial We’re £XX.X £X.X X% Banking. the the holidays second book billion, payment a represent They decline quarter. XX% down seeing in number the on with of around also value billion about of customers of from

September and average government support the an first of about from day tapered applications XX,XXX though support to schemes, day XXX through in continue has to We businesses on the XXX demand a our October. day billion £XX.X months, commercial billion for line lending approved first the £X.X with We the nine of a taking in total quarter, in to lending share during of customers. our

announced, migrations response diversification time million in monitor and our more we unsecured sectors lending of commercial, working and are these to closely, risk flexibility are these are sectors repayments, and We were Stage coverage we As you with books. we including the of is and our you been £XXX XX%. will there customers changes know, have retail, closely to In to retail, X% stage ratio comfortable several of and the with loans in remain support there understand recall allowing leisure significant X remain comfortable our with lending low. schemes transport their changes. just of and In

Our priority you’ll see customers manage we on evolving also pandemic, to customer has in but generate rightly order focused that been X to future on the during needs Slide meeting growth. on are helping

franchises continue sizable our capacity private We to have retail, grow in across to commercial banking. and

but accounts of example, stock added performance. is attractive For banking, share where have strong retail This XX% lending. mortgage to just share area we a have in overall resource of an our XX.X% current support we

access unsecured our CEO of Private leverage the relatively we a within to team, August We expertise across support better combining small limits that our with our Peter In and refocused of business bringing our our investment businesses We the our with expertise share and our now Markets, banking together for foreign our placed exchange Banking. we customers business, announced Payit. are wealth giving premier a asset payment carefully platform low platform, to under and commercial new and of lending NatWest private grow risk fully current in have with scope Tyl, the corporate And acquiring financing. continues cards of can Flavel, products By and business also in to appetite. and our fee-based strong us merchant the is needs Commercial to management investment Banking, saving group. innovation in support

our bank plenty Slide on and I’d X. across to the to move the scope within see next like extending of business. we priority our more capabilities our effectively to serve by So customers on now grow full

X,XXX our our accelerated access Our of a with for will us billion. able on a some year. X of XXXX new also X.X have with processing. serve but customers. leveraging and we BlackRock, almost reduction Digital track technology the to efficiently. to of active Use quarter, cost simplification Cora, for million our accelerating to £XXX has customer million management from users, million available of week with It services recently has taking both continue million. agreement region two delivers touched major from to We I’ve the is acceleration with one with January cost interactions customers across X.X business This our up and costs. them banking £XXX to active and investments chatbot, are million to support management on their total reason briefly our to continuing week makes in now users to wealth over video reduce to remain our digital network for have benefits who the it is £X partnerships million activities innovations, been added now target expect been strategic and by digital our achieve supported develop costs third We We we X.XX retail than now. And less announced others. investment our focus behavior and newly and entire mobile customers. in easier almost a we XXX interactions change in on during this

X, able to excel time, where at First, activities the about want is On we allocation, this maintain And can talk we key returns. to our the managers on greater on savings us Slide concentrate are asset can to allocation. discipline secondly, from on like benefiting we them. focus make of whilst, capital pass allow wealth to I others. same ensuring on put Agreements which we to expertise

refocus and are the of to continue worth on We to now ahead align plan markets our we it our better institutional RWA of target. corporate customers. net our reduction needs with And

of million reduction disposal the years. year-end achieve expect and was to target disciplined the to RWAs have level £XX this. with a Our £XX billion we execution, £XXX this of at XXXX, of of quarter, end over and exceeded our £XX and around initially associated end to at billion, the be, third two were the we of end medium-term billion the most target year, losses as around by the result

do currencies and by income, We on continuing have capital simplify able to to been the to markets. fixed focus this business order in

So on execute in a our third summary, our strategic resilient to represent results we quarter performance, continue priorities. and

Katie more you our over capital results. We of to partnerships hand time. our over allocation our are sustainable to our innovation and customers, drive With to franchises it effective to make powering efficient, organization simplifying to through the take allow and sharpening taking us returns I’ll and to advantage through business that, support strong

Katie Murray

£X.X second everyone. X% down statement. start morning, reported group good net third for billion We I quarter, up the this, quarter. income Within and total was you, Thank with the from the Alison, income on in of million announced. interest today income management will X.X% which a billion. already XX% the £XXX carried was liability items, of decrease £XXX of income at have September, £X.X reflects to number Non-interest This a million. including down loss exercise out notable we

by XX significantly than million on the below and reported to I’ll Taking of all X% Slide for costs gross net shareholders mainly in million, profit by overall quarter, Excluding quarter market tax reduced the NatWest at was was higher of customer driven Markets. income X% ordinary We income together, £X.X the notable to of items, million normalization second in attributable the interest interest referred million, of the all represents to down £XXX basis a £XX down this operating second second profit the on result quarter of the second. on which are third profit we items £XXX we loans. move quarter the I impairment operating of Group’s as the income for £XXX an to before earlier. charge The third And net billion. notable £XX operating reporting before of impairments was now XX. XX% quarter million. points from conditions

left, net result on day third or the quarter of X%. can If look million in at the and extra the one higher volumes quarter and interest grew income bank the see right, is the you you £XX for the second the This columns on quarter. that

due second, fall; basis lower basis the is net lending of third the which basis This margin. points three points. and line in result is for the basis points XXX a in of points, competition the change pricing curve increased mix majority decreased structural quarter factors: accounted basis to and third, First, net guidance; accounted interest the central Turning two in to with the to liquidity three one of added bank for margin. interest This point to yield two hedge,

around interest XX% and and we show for look XX, the to Slide On commercial group loan now on for retail interest of Moving together customer banking, which at rates margin. of drivers net account net income. deposit

We higher portfolio includes balance wholesale yield also show interest-earning gross lower-yielding cost overall assets, and and of sheet. group cost of funding. Notably, the the banking the rest liquidity which the the

lending side, of On the fall, yields across asset lower have the pass-through or interest rates. the continued group reflecting to

by of declined However, basis to the point third reduction the XX XX during in has versus yield basis quarter. a basis points pace decline QX. Gross slowed points XXX

reduced to a quarter third On points. side, the costs the basis liability further by or eight XX deposit basis points in

We have not going and to the did repriced now further our of benefit much from expect most deposits this I floor, forward.

are four main fourth consider. factors the to quarter, there to Looking

yield curve pressure structural a hedge. our lower ongoing from First, through

of points unchanged. is guidance basis around per two quarter Our

therefore, in you NIM. liquidity, which, and assets change average know, interesting as a Second, affects earning

the in points. margins in of front Third, interest XXX the on basis mix points, to book. points, basis Application back to close averaged and margin XXX Mortgage pricing. net with QX improved XXX book line bank margins basis

bank quarter. mortgage NIM a in lending the As dilutive fourth will to be result, less

that is margins be expectation as may tapers, applications' our However, current not demand high sustainable.

mix behavior higher-margin and balances. pricing. will commercial on customer Naturally, unsecured and impact Finally,

billion quarter, Moving at by or demand third the volumes. banking by grew which driven X.X%, £X.X easing Gross increased on mortgages, now by after increased reflecting to £X.X of loans lockdown. billion look the in

the first reflecting still has in balances lending. Our XXXX, to in the flow balances as total temporary absence share which the additional in QX, XX% XX% customer credit some growth averaged segment. demand down further from Secured nine accounted quarter. of in XX% Nevertheless, share, personnel slowed has improved XX% stock loan-to-value book. third saw months it from can XX% of XX.X%. was billion small second our our above up for our make for we see, quarter, But well card In the the bank. £X.X from Unsecured this in commercial XX%, to banking, loans third the schemes declined aggregates government for you but across quarter of

now second million which a our with loan However, as build broadly effect the countered repayment of levels. third. this Average £XX RCFs, banking the line the in further the grew averaging at and result interest-earning by quarter, in the sit by of in assets around was strong in quarter XX% utilization, growth liquidity of pre-COVID

look Slide Moving now XX. income at on to non-interest on

Third income, highlight. period on quarter down same different notable the There lower than and to trends are non-interest XX% this quarter XX% excluding items, last was two year. the year second

and The mainly reflects £XXX guidance We regulatory rising commissions. last changes income retail group on in our First, fees XXXX, year million reduction maintain over from XXXX. to £XXX impact for million for banking.

activity customer result a of as have subdued addition, levels been In COVID-XX.

see receivables can commission in this our breakdown. You fee and

payment due spending noticeable services fees to reduction lower a seen credit year-on-year have in levels. We card and debit and

well have fees. in as as increased, relative the quarter in to segments this However, lending levels customer activity these growth resulting second year,

income. The we return in XXXX saw has customer had NatWest second highlight volatility trading normalized first months is although to Markets quarter. a activity levels a the trend strong third of to and more nine

income. expect changing government outlook Looking our commissions more and medium on to £XX we to ongoing restrict billion down given trading for weigh The target refocus COVID-XX. ahead, and measures RWAs of fees reduction the uncertain, to in is NatWest the Markets

grow However, we as economy these to would expect recovers. the

to Strategic In on to achieve on to savings total expect look quarter. incur £X.X depreciation, around we target year. fourth million billion lease second for the now This cost full than is million a £XXX £XX year. million the reduction It Slide And includes costs bank XX. nine costs we third cost will the £XXX across £XXX lower operating last Other at group. third and our of brings which than the million were are QX track that which inflation. months. expenses, £XXX Moving the were quarter, That’s million. for UK in of be reminding the net you lower for these £XXX we worth on first million quarter of are redundancy £XX the the excluding million, costs levy, to

been impairment July, year Moving number quarter, on the range. provisions of lower for very migrations. £XXX by charge full first is charge of gross were customer limited the at This X XXXX were reported our broadly stage which lower Stage of Slide and to points made QX We no additional on or have XX or a Stage defaults has in now customer the an of billion to the be in the now expect as look half £X.X impairments there million offset £X.X We end basis the Stage X for to changes XX. to partially economic presented loans. impairment at reflecting and substantially loss billion we of than Expected X. utilization stable provisions, credit assumptions

cash a support remain where from corporate’s loan from loan is book the healthy XX% balances. There past So X, QX. ongoing on is X.X%, let and the past was payments. our X.X% book of XX. change our on X.X% due, in show me Stage government you in reflecting book, quarter, and is Slide X how measures performing little And due, is Stage at down X, up-to-date at X customers X.X% Stage QX. not down of Stage

XX%. ratio stable ECL with is Stage Our at X of coverage coverage X.X%,

were monitor sectors remain closely. coverage of of These similar X% loans at billion and sectors, Alison In XX%. proportion comfortable level, X million, QX, we loans. As around £XX.X at which represents £XXX stable in have group to Stage at mentioned, to we loans broadly the we in wholesale these that small trend with a amounted gross gross

assets SME them £X.X £X.X Credit at targets. of by credit, and billion, market billion RWAs cyclicality with This from decreased QX, NatWest to billion £X.X poor largest benefit now £X.X a on Slide and by factors decreased Markets, decrease look counterparty and billion. assets bringing infrastructure £XX an capital and XX. across risk. which ahead in risk-weighted was reductions risk-weighted of our year The from Risk-weighted reduced assets Turning includes the billion, billion. impact business to full is £X.X we where reduction down in

forward, billion We SME the which relief, Tier X expect X. ratio of and than Looking added billion our points; and added be basis This infrastructure IFRS This added factors, due the a points we and is £XXX NatWest end to XX.X% due on X low which IFRS a X £XXX range of level lower at Markets transitional basis RWAs transitional with relatively basis basis of RWAs, is below points. XX ended under to XXXX. basis which to points; the XXX quarter procyclical higher acceleration to equity guided QX XX previously of in now a common inflation.

We fourth intangibles points to benefit expect quarter. the XX software basis the in be around

Moving the to our balance on strength sheet. of demonstrates which final my slide,

CETX XX% Our than range basis amounts. double target points, our now is our XXX XXX ratio to above to XX% maximum and distributable more

ratio Our of requirements. XXX X.X% of the Bank above basis UK minimum leverage England points is

asset with also high-quality funding We pool a and liquidity stable, base. maintained have levels liquid strong a diverse

coverage ratio £X as XXX% a liquidity TFS. above Headroom quarter billion. requirement the Our of further we to decreased repaid is our £XX billion minimum in

So and higher resilient to both the a interest cost performance third delivered quarter, RWA operating reductions. continued and with progress have conclude, income net on in we

hand summarized limited back to guidance, our As we’ve with appendix. change is Alison. in And to this that, made the I’ll

Alison Rose

Thank you, Katie.

Whilst Before supporting same remains with protecting the be up outlook let customers it a uncertain, economic up we at to for our open conclusion. brief business. on questions, as continues time wrap the me focus our the

and ratio reduction ratio target. target of a priorities. to a our plan capital options flexibility with XX% I consider to strong long business we This ahead Most the medium above particular, questions. very value. well of refocusing XX% compelling capital-generative CETX create as our it want were have uncertain and where shareholder to payments this outlook as to XX.X%, now Markets an term. much, up importantly, gives NatWest us happy that to strength to on over we we’re RWA progress good strategic possible making In soon are highlight of the resume navigate We to of open the is our dividend you Thank to on

Operator

Rohith the ahead. Bank question Please of from Your Chandra-Rajan of first Instructions] America. go line [Operator comes from

open. line Your is

Rohith Chandra-Rajan

I Thank had please. couple morning. you, of good questions, a

this and I parts on the So little different from seeing in competition margin and the you’re quarter impacts on revenues. about QX. moving and talked are broadly for margin net please? first how more then the just interest was just wondering you And a QX, the income, the mix evolving second was where

I think for that, consensus How XXXX. on expectations, just if to for billion this has please? total under does compare year willing billion £XX.X revenues to that of £XX.X comment and your you’re

Alison Rose

Great. much. pick ask can to you Katie, Thanks those up? I very

Katie Murray

sure. Alison. Yes, very much, Thanks

we at if starting guidance. So revenue, current so look XXXX the and – with

reduction million Just high including to that remind £XXX of includes you regulatory events, credit. for all, the the cost

£XXX When three NIM, it you the in losses look what line the buckets. at the terms I’d expect at to we We of disposal is full for Markets income year NatWest in remind look in million XXXX. to be

what impact So there’s dependent your liquidity, upon will as be as well. let movements be. activity remain that you the might in decide and that very you QX think to I’ll the and of will sensitive customer liquidity,

relatively in say, volume also the course, moment, two I look the part QX We’d broadly And curve, to to deadline mix. of mix, from in decrease in end when of that that surge a lower we big taxes. we see the that expect be which off. Of have the would reduction from driven probably hedge as at mortgages, surge at property the the seen to basis and neutral. the which expect is volumes, start nears, temporary from strong points of as certainly yield that, fall the at of some I be terms part in QX, would in by really And

So to remember. I important think that’s

elevated for it was well. completed, we We of XXX September, XXX the in basis quarter getting are end terms of We what points up points margins. currently were but the basis by at application as

is benefit of of obviously a well. So of our you, sitting the just bit NIM that. little reminding see below a But the we’ll XXX XXX as

some date commercial our terms we’ve schemes mentioned the in In still now have the cutoff volumes, of well. do government normalized, to nears expect RCFs which But us already. growth see as we as

the happening kind macro very terms of all in and quickly In which particularly consensus, events the of terms XXXX I at are and think of the lockdown well we’re of global look, lockdowns, very scenario. aware moment, those

even I’d probably impact of it’s say just as will harder So these we’ve XXXX. worth the lockdowns the economy do of the factors, you as now a on in reminding estimate what such said. UK But new it’s result, things that already to

on in the income and as into Markets in how we of impacts expect I’ll full we million credit to the factors NatWest think NatWest review you RWAs. a leave quarter of those high as the certainly, the roll reduce first the XXXX, and impact disposal cost further about And Markets £XXX regulations, income. million For impact quarter £XXX associated will And of the just reduction might NIM through fourth well. losses

Rohith Chandra-Rajan

you. Thank

Operator

Thank you.

question from ahead. Numis. from line next go of comes Jonathan Pierce Your Please the

Your open. line is

Jonathan Pierce

correctly? I I’m the last is hitting good year answers taking after that number morning. two confident maybe than billion few billion, just but there. of I you’ve appreciate the away over on income out am Yes, that may did £XX.X about I slightly reading uncertainty question income. make the But is £XX.X what that revenue from less sounded Is considerable one it language months. maybe last I on now – there question, comments next have Actually, you’re

Katie Murray

the have So about as it’s Not mean, is, Jonathan, mean, none coming I question. clarity not a thing – we’re – next. I – of I basically answered is look, think the what’s great – us

RWAs. the think back that’s roll and those £XXX the income the NatWest losses we reduce to as best very to we I really disposal know, what around it’s Markets and So million, much

Jonathan Pierce

think it’d year? bit to in the latest whether UKGI statutory of also distributions bigger a mix this. particular, But So around Okay. hear participation? allowed be things. – despite whether All to and, I declare thoughts loss right. we On on good a for distributions your the prepared capital ordinary I you’d closer then, really potential being what get distribution, be dividend again, to to some firstly, within this two on mean, thoughts questions in the just hope And be you’d do an be prepared to of you’d mix absence whether the probably the buyback of as

Alison Rose

Thanks, Jonathan. saying XX.X%. start Well, And me start it I’m let as we paying my capital dividends by at as happy the – clear to is possible. strong do that is to it ratios have very soon I’ve been clear that intent

early too a and then it’s remains and predictions nature in think core part will something to returning England their Bank of the the make them. that I possible. about the look as and QX, to I guidance we update to which as capital want of to resume shape evaluate and shareholders, strategy would of Clearly, soon

time. of a We would different of options we’ll we how at would the but that, at evaluate have, said we past, do the look in number that that

Jonathan Pierce

thank Okay, you.

Operator

Thank you.

from line Please of comes question go Goldman Sachs. next Martin Your the ahead. Leitgeb from

line open. is Your

Martin Leitgeb

Yes, good side. from morning my

Just please. two questions,

rates? to come, what rates? various negative are your undertaking much comment And secondly, on questions negative offset how for a at prepared level mentioned the broad were The that just whether of review could recent is I strategic was that. obviously, light you’re NatWest on ready on levers Could market to the have think, in given potential Ulster one would at think shed is zero ready? bit on the the you the further first remarks you’re and earlier if months you impact think the of stage. the just regulators' adverse for is over the pretty Bank. wondering I deposit on negative negative rates, Group the rates And you there given, banks if if whether on for I you And comments this NatWest side,

in just you stated this Is the to current this of level? the – is you. time, profitability the holding I upstream larger that the strategy group at at you’re some think given you the in in time to are right Thank how is moment at comparatively strategy Ireland capital there banks in accruals that business. grow to order present? any report, excess at Ulster in at available that of And lower need have

Alison Rose

the question. then don’t Well, negative Great. and rates. Thanks you for why can Katie start Ulster I talk through with

So unchanged. our be evaluating impact of customer at the and dividends restrictions to changes continuing And Ulster a in sure At colleagues we as moment. sit strategy the you consideration in during of here good We economy, current challenges the In is Jane team them reviewing the you’ve and light shareholders. to that these undertaken the expect, on But have and this doing in of on and time, COVID appropriately are any our clearly and that the this grow we terms we’re event support full that. the of and would and supporting that reduce safely is making responsibly today, strategy seen customers job costs. for with I of impact would priority our as business any period. am being on place made our strategy,

are to want been to So question? pick but out carrying the made, but do up that you decisions are have we Katie, our evaluating no negative we rates positions, review.

Katie Murray

No, Yes. sure, absolutely.

in So negative where inverted lucky slightly an rates, business. obviously, we comments terms are deal to our and our rates of as of Ulster negative negative sort we’ve that says experience, in rate with in she RBSI ready organization got

on see look if of business. come XX now, kind the it’s in with. to terms the European right down you’re So the to the cost in We’ll basis familiar but you’re of start side, further negative And that see that move a like the but something of not you rates, about levers levers, taking – of retail a lot year, on deposit to you actions bit absolutely we’re of funding of some the I’d world on next just there. it’s at little – that more counterparts points there’s within our

looking that becomes making really of core. it question the a you’re sure absolutely after So

I’ll as seen once get we’ve however, a in you fall And kind give will you negative kind Martin, would, of so we consensus that XXXX, rates. the number rates so that today, do, we get about year obviously year still the benefits impact else basis come that in ask, impact point sure bit by behaviour. – a that. down by three. fall the what also impact evolve by happens I in talked about what It’ll will from of you it think bit further, basis some a helpful. sits £XXX look increased help the point just into of consumer the of us. million somebody What but very When on million that market depending saw would at would year curve curve XX didn’t you that was obviously three, would XX I’m margins that mortgage the when December if And you three, see negative the £XXX on they’re the on is, to

in downside. I see fall you as sort I bit of a our is negative of, base have consensus. remind to The that’s economic base still think don’t you case. that, thing We one though, a feel. little our that the gives of something a We rate would

Martin Leitgeb

Thank you very much.

Operator

Thank you.

the of line ahead. question from from go Your Coombs Andrew Please Citi. comes next

line open. Your is

Andrew Coombs

morning. good Yes,

could just to your NatWest I First, disposal Markets if revisit ask you losses. on guidance

You’ve obviously down than coming faster about RWAs expected. the talked

That year. for million the reiterated full £XXX £XXX implies still You for year. the next million

the focus. potentially it’s sorry, to. comments coming the this I for of back lower of pricing, a I mortgage might or obviously then and be than to key but mean what could that just And supply function appreciate also your beyond pricing the for wondering So beyond secondly, stamp previously if on supply. March, point is think you about duty end demand just – that guided a

come if market current talk perhaps, given the So just number products, you’re think and particularly bit lenders pulled back the you seeing products of on some could uncertainty higher the about what those you of some given Thanks. have whether a will back? of LTV in there the

Alison Rose

can Thanks you Katie through don’t pick up Markets talk very I why and much. the Well, look, mortgage. NatWest

on and point XXXX. schedule are in end RWA of the Markets plan, RWAs this we the making of to billion, next and clearly of how said end billion business. refocus we the reduce careful always around in on by I’ve around that the we progress We’re will year. terms our what by RWAs the are executing at £XX Look, is reduction £XX of of billion and that intention NatWest be good be terms ahead we is £XX the

that We will appropriate, £XXX we’re carefully. we on will is more we through. guidance the looking think go year you as but We at the counterparty that £XXX next million evaluate we’ve the sensibly do million, next Clearly, year. risk there’s that and given

and comfortable I’m ensure but assets obviously careful appropriate So we reduce. on the that get we are sensible to any guidance, we with being that returns

to Katie, the the remains So that want guidance I you do same. think pick mortgage? up

Katie Murray

Yes, sure. Absolutely.

back that as decision of in of were offering that took result mortgages, normally not And of came I our the of you by of can through much be it if would the you during and the XX% XX% that’s levels A July completion. lower back we see product. look end expect August We little to that August. at to coming to application XX% terms see, as were sort So of terms a Andrew, us sort up we of August. in end very than bit at but the into

of there. So I out certainly is there demand think a lot

supply think meet post can of it taxes. the There the through of peak the coming still transaction some a kind to there is also is is lot – kind the that of lockdown and you see demand. of I

of look of the we So terms it, can strongest see benefiting when sort points in we pricing. basis from we’re at that

level of equally, up that price prices we see we to again QX that see competition of basis to application and sustainable XXX into you’ll as quarter, were – numbers, slight is was start already October bit to probably strengthening about the peers basis September of that of points, the that. week off see. volume greater And look very interesting, kind to for What up – the front their so We’ve seen that was relatively strengthening do of point, will to of QX. happen by is us. back points, kind think basis see it’s we which you’ll fall a can book tiny book I therefore, a so which end the taking for the points, think helpful it XXX actually of pleasing because down the happening demand some XXX But the I our in one this for And margin through move so we getting that, and and So of is think at some way. market. with

So I think that’s….

Andrew Coombs

say the points is to QX. you you into mean basis the level Do or you had October? XXX clear, just And that that XXX be when in sustainable

Katie Murray

this, quarter about I sorry, kind applications you you of approved work, know with is in that the you’re of think the following one familiar think what what into I comes but kind if and you’re quarter. way

a If to of completion you two- has kind of – think that cycle. two-month a kind average three-month

What – but the about October, a in little the we that’s gone by that’s into bit, benefit to October is so coming end, So we’re you’ll in were XXX XXX. QX. see QX seeing in up

think fall because dynamic that see pricing I will I little Some piece, you’ll of on, after of to move coming you’ll coming going the and helpful. that’s as at to down a that, into the think bit QX. a for of I so market and quarter, some this short-term do very therefore, on start But will start completion them tail bit then demand And those little it see will through, think complete end well. more in

complete say end kind So as flat, broadly, for kind but of of quarter the of is – well. tail at those the ones better which QX, why some will we of

Andrew Coombs

QX QX down flat, potentially QX end? up, So the

Katie Murray

because obviously, own I’ll of in dynamics on right think as QX terms draw we’re well and on market that heading leave be other there’s that to will direction. the more you But I in your going stage conclusions QX activity. all customer

Andrew Coombs

Thank you much. very

Operator

Thank you.

Please comes question Ed of go the from line next KBW. Firth ahead. Your from

is open. Your line

Ed Firth

Good mean, this it I could what, sort I procyclicality, much context. turn you on about that me is you get so €XXX – to particular, guess, group and focused it the question. at, end it’ll that about in to I my next not just by gone it’s really give risk-weighted the the morning, have the XXXX, longer to year, come. you risk-weighted the off business the again. need billion seems asset what at run XXXX, you XXXX, looking And like term, of less today. do ask envisage, level Because assets? look of But you billion for think I £XXX mean, And just everybody. I you Can year, to particularly, you’re NatWest Markets. if but

from So mean, going growth that’s is where billion. short-term I €XXX see I a to like on thing. the come that can’t really

is So analysis? feeling? of fair Fair a that sort

Katie Murray

absolutely couple as to are lose of billion £XX.X NatWest as of in you you’re that will in right. of billion. always guided come floors, We’ve January £XX There’s number towards it, Markets, pull XX kind mortgage We’ll you Ed. – us, So There’s you terms coming look which things at the which XXXX. obviously, from down. inflation, XXst a at that

that will bigger. in a probably still bit that. little Procyclicality books, than a pull little Our bit bit a earlier little of

very at more – we’ll a – of will the year-end. will shape move about So talk in of it’ll it it that number And but that the slightly. be order,

in. coming BAU got obviously You’ve

guided think comes, we opinions to to X% that X%. the when you and XX%, how certainly. lots there’s of guided of I it I all as and it much lower know but We’ve that it’s comes to to – We’ve

come that of I procyclicality kind come So – would by and just the like will I’m disappear end think piece XXXX, bit the that to would be I’d through. and a be think sure quick. you’d I see that up that not But case. of

me. years So I will a not to saying it’s look kind of this of What is to billion I expect that I so I that’s of the think expect guidance our to think €XXX that after than don’t we – be at don’t of end out at we do the be that. I’m procyclicality we but that, bit be longer But But think that – there. you’ll timing. I the see XXXX, we it continuing year to we when into – we’d forgive say, €XXX below And had lower would that, and that. think billion

so so through. XXXX, for do pre-mortgage we we expect, pre-BAU, that see So will and inflation in coming XXXX, us

of to definitely But not And XXXX. than hope so of talk to on we’ll is February it’s range kind anything about as what helps. again, pushed I be in else. for And is than that rather might the you range timing end rather there. that out procyclicality where more view actually our delay the

Ed Firth

you’re And clarify, so review very the to not strategic you that we’ve So but around thinking where a I broadly just with up, XXXX, for but today? got know – what market’s helpful, uncomfortable just speaking. on coming hugely know where based

Katie Murray

behavior, uncomfortable get I speaking, I more in I’m depends it. think we talk when Look, February. with mean, it hugely broadly all customer together timing not I mean, on and but about we’ll it And

Operator

of Please from ahead. go line Exane comes the question BNP next Guy Stebbings, Paribas. Your

Your now open. line is

Guy Stebbings

The first on assets. was average just interest-earning question

on QX year. volumes QX level, average talking healthy that for above some into billion it and quarter, was think £XXX next mortgage or I you’re even the quarter ended into way but presumably the to

you’ll check, So XXXX billion, that I’m it’s below £XXX I line. something with to that north somewhere And So secondly check want just then is probably consensus not on… reasonable I entering just of to want be level? on anything to conscious missing assume that

Katie Murray

Okay.

Guy Stebbings

Okay, step I tend to to And obviously, we staggering out back business. negative look of that? it we some as does out that secondly, really negatives very there out advocate, in devil’s connotations mean, business, taken your at amount that. presume if guess, quite having that’s I the like any But come like the be play the total must just on analysts, recent especially performance in pressure years, a that see environment, QX. in savings alongside the in costs, things I the it’s cost? and have good I if a route, terms that Or of come just staffing not particular current of

Alison Rose

is for continuing cost the doing what And good up Katie talk progress million months. we first pick I question costs. business, – I the first don’t about and been costs, pick Look, have the Why with pleased and in Okay. £XXX the lower one. can we’re nine bad costs the up on

was will business So of is what of of basis. just our change and the our at usual are the shaping and as colleagues, talking and – we around behavior, colleagues. experience That completed to the we’ve doing staff, if use a second then question, regular continue of your for very which we sort business technology. the on been the impact customer that new Actually, we’ve customers survey with on invest in look part them much you annual

Our In above global most of engagements. we’re terms staff are staff financial been. cases, scores the norm the engagement in they’ve ever highest

learning in behavior. our that We’re same customers are technology new huge colleagues' the amount experience way in and about also new our investing

investing also our We’re in colleagues.

people’s NatWest We have something can that well. re-skilling, investing that we as call evolve Academy that roles earlier the their launched is in I training, year, so they development which this

So the is is I largely cost that through the coming experience. out improving think journeys, customer through

as automation, digital as there’s tools, actually, get to our as processes better, our value-add aspects well more of on time gets well. allowing more much better As benefit from them colleagues' customers more using the because experience spend our

go up perspective. seen engagement Katie? from actually, that So we’ve

Katie Murray

mean, leave on I the that really a of I’ll deposit you think of into to the Also, of think be and liquidity will amount on the it the quarter And Guy, depends the With it little over through the kind buffer. develops I what of on the flows go quarter. depend in might about bit interest-earning that how liquidity to lending assets. well. it Look, market that happens systemic as kind next up activity next

Guy Stebbings

Okay.

I QX. mean I just are assets? deposit sort banks quickly on on side the interest-earning healthy of to Can expectations on the back Okay. talking into very come most flows

expectations. side XXXX into bit feel like into doesn’t enormously. should further you’re in reverse out feels it versus shape still harder to it it’s a like but of good call Obviously, it next So year a that

Katie Murray

what going we’re that would have expect. to would starts think, XXX% than liquidity, in this flow And billion mean, level got what which shape stronger that good in think in think I you’ll system – was you the a as think customer actually QE – about, very system, We that’s I the than that around quarter. reverse. I coverage, to flows. I we £XX.X well, to feel seen probably of individual I of say they’re is flows and certainly start was until Actually, we’ve QE to see

– – other we’re would I of not So aligning my view it’s banks. those not be to

Operator

question ahead. from comes Chris line go from next of Your the Cant Autonomous. Please

now Your line open. is

Chris Cant

could of XXXX softened I your on Two, your question sort where there. on please. And just come terms Jonathan’s like of back consensus If commentary of consensus feel in you’ve also revenues. comfort I is level with

side, losses of Market understand So I £XXX disposal NatWest million next given losses disposal that park year. consensus to bit has in that’s one if a choppy, I for

And shy XQ if out at notable the million billion. guessing So of all that, and get £XXX of I clean of market’s drag XQ ex just losses. print, sort full the £XX.X the don’t £XX expecting billion change have If it, I’m we think quite the call I ex about of your guidance, BAU disposal the I items annualize of run you rate. your look in suppose, I income, regulatory

a of of we all million debates your €XXX by drag disconnect It down the full So to that which million, how £XXX XXXX, off hedge off knocking to get million would play €XX.X a volumes I you there’s good against and bit into probably like that should be around to stuff. feel structural get take does impact there. £XXX little sub before billion

have to support comment? risk, the front right I book maybe spreads floor business the to being year. XX% into XX%. talked risk meaningful of now mortgage mean in broadly XX the you previously allocations, think ROEs guess, factoring about mortgage changes. which more cost volume unless even you’ve mid-teens like return, on the you to again next mortgages, to long-term going I very feels pending like on a unchanged, would very improvement What on to big it And risk the could tax, is view the a there that suggest invite you downside, XXX bps writing a the something do weight I you’re are? cost So

that, would that on could if So you appreciated. comment be

how pricing be. Just to sustainable may environment understand trying this

Katie Murray

to I that say, XXXX the kind question. Chris, that have the given thanks you it of out, blocks to think detailed me confirms of work what you would building income. of we sort for And I that need

coming mean, rate the million there, I disposal that £XXX million say probably £XXX the in what’s terms of NatWest that I So most is losses. run in, in of million would QX £XXX

some about is well. doing what the NatWest important think income think reduction Markets' to I it’s as RWA

a So just at look sure have make that that. you

for factors very XXXX NIM the think talked are I about there. much we’ve in that

low kind customer bit you maybe all kind go in in in of customer build behavior own kind happening in So feels about right blocks XXX of you that, been mortgage your you’ve that I more suggest it basis there bit kind the relation your have building in definitely support, on have for No, happens. would new of a little terms we’re I and ballpark. that the if that, talked business. we to we teens. conclusions in, to the that think of but through was kind – points. that of of We government behavior to to I have mean, a make kind on And earning terms what’s of of learning of got And Yes. what that number kind little you’ll just mortgages. XX Then remember the

the be in But very that helped rate really the this mortgages they returning still risk range, in quality and we’re significant earning bit blended good to just can the we’re risk XX%, products make a that August, in the gone in of your in very I the there. we’re have there. increase growing adjusting are cautiously of about as to managing terms math do that, terms at we that on of opening returns, little the in think to of terms just ROE would but sure a terms I do in seeing we ending so bit up ROEs can little the we need bottom of of and the appropriately. in that close XXX think QX You – our end on the by from

Operator

Please next comes Noble ahead. from go Robert of Bank. question line Deutsche the Your from

open. now is line Your

Robert Noble

in proportion mind market? I go changed into just of your get in what’s And – guaranteed? wanted declining now when duration secondly, when what of into pull of the we’re the July to XX% to And they rid change ask. the Is flipped out that all sort get of book not what is there and pull decision and should and we assuming non-guaranteed these some prices there, went then back extended? get expect it year-end, you then the And that the to it? between finally back was Or commercial get the guarantees, of loans the What is the the of out that’s in? the to And stuff market? to debt purely LTV the start August guaranteed?

Alison Rose

quarter, year this billion terms the guarantee increase the – out government that you. guarantee We’ve have had of this billion lending Thank on in Well, £X.X we of is scheme, sorry. £XX scheme.

on So are there at Back announced of Loans how CBILS guaranteed, schemes those Bounce terms are moment customers loans are that the changes XXX% interact And obviously, and can XX% those some been in the have forward. guaranteed. going to the

loans. obviously Obviously, think of side. nature pay those customers that the the sits XXX% I our against customers Those for the schemes. that’s So are the loans are liable those that guarantee

to standards appetite we were of at to business was We our XX%, supporting felt We we terms decisions risk very really was outcome and a uncertainty how around the was appropriate the comfortable to pandemic, outlook, the areas, market. going also we certain make were the protecting we in of we clear that. as but time both into mortgage the customers, taking risk strong that our in well. decision and the crisis a process. and made approach We doing back in terms felt clearly, tighten that the maintaining more took sure were but around our question, very at the On decision appetite there that balanced felt risk it of

very you , the of that based. risk always sense decision-making which So is gives been a

Robert Noble

enough. Good

Alison Rose

Thank you.

Operator

a We the take question will webcast. from now

Raul Sinha

of next from Raul Your Sinha parts question There’s this comes to first JPMorgan. question.

on the like the part NII, which here. versus in moving for fully from QX looks driven could versus discuss volume the should is two, this it’s Could down acceleration you X% market? quarter first by And pricing banking trends parts Or asks, we in question X deposits. Does income retail The income you here? from capture the UK X. and quarter lower improved QX? X% improved discuss further in mortgages expect It

Alison Rose

So retail look, the lower curve on QX main the NII impact yield is in on deposits.

slightly pressure. forward, of customer fall no lower a Looking full repeat a help from on bit a quarter little a overdrafts QX, but rates and funding of deposits big in

Katie Murray

just that would second improved in capture UK say, that answer part the an doesn’t fully of I pricing. And question mortgages the Alison, terms to improving X%, no, of the

three you approve months it’s the if think So to books. a you it, it comes mortgage, to on before about as two

QX the approved on therefore, things be – coming have of of will been been So a what would lot QX. beginning in beginning sorry, you that – of at I’m QX have

basically coming had XXX So on. we points basis

basis the end at XXX up points. volumes there application of quarter Our the are at

depend then should there. coming land completions So just of from actually see we QX. that will through where on you And Rohith. into it more Thanks,

Operator

line Please from question Goodbody. comes go next from of Your Cronin ahead. John the

Your line now is open.

John Cronin

And look, back to mortgage on and price Chris' sustainability. question coming

on bit how think potential early bit talked supply. guess, context about a to they your touched own the wider strength. I the and I’m just in share interested you the in impact reduction perspective whether just back You’ve pre-COVID think products' that a capital about of sectoral share not XXXX you of could more royalties pretty your spreads were own stock liquidity in where term. from quickly, ambitions And and over a ambitions demand up flow or medium currently, or given end supply

you the So the deliver that on review? guess, Thank capital would terms in look, that base decision-making in you. degree Bank see don’t any need And in was, drawn go And the one. rightsizing context numbers then just a a I be on to What the to in particular have the the another big secondly, Ulster you be strategic that of retention of of I’ll comments helpful. is return process? how factor there, on support event, to I want mean, do

Alison Rose

pick hard apply our Clearly, very you question. On to much overall, as discipline of CETX strategy get capital for been as we’ve pick Katie to is focused I’ll up Well, I look, I sure ratio where my supporting strong up On that Ulster, make Ulster, around question. mortgage ratio as capital the And of terms with get the know, in currently mean, balance very XX.X%. working Ulster business. our in we’re Katie mortgage right the is well returns mean, our shareholders in ensuring customers. we’re that to driving we allocating CETX

full on and appropriately would considering that With any of consideration customers very you most our in expect, now, make, uncertainty, as responsibly. all do economic the important and a the supporting we’re our clearly. And am and COVID reviewing Ireland. with the of I thing I’m evaluating business, our the These outlook times, is very going we’re that and challenging I impacts of focusing Right of strategy on also stakeholders. changes the are

a gives at probably that decisions been that No business. sense looking we’re of how have So you made.

obviously review, a all out we’ll in consult and stakeholders course. carrying We’re with due

Katie Murray

Sure. Thanks, Alison.

So sustainability, we quarters the feels next that as just we the it it be for at couple the look mortgages feels prices, of demand. look kind mortgages sustainable as sustainability, of will the given said, and and these at as

grow We’re to continuing the book.

application by already. the volume that’s of talked the of which – kind down cooled we to XX% that’s over and come our we’ve about out LTV year, that We’re XX%, saw at decision

the quarter. the by XX% at We’re of end

see growth. still we’ll that comfortable So

the lot XX basis XX.X% XX.X%. Our stock of a the the given number, year grown like a but that’s That from in market. has doesn’t to points of big share size mortgages feel

that bank that is points terms was the growth. we basis base what still spreads didn’t of So is of in expect to they of actually, in terms pass XX% going they kind through. John, where growth. that pre-COVID, you and that, back to we’ve happened thing seen good And rates. at volumes XX were We’d rates that application were good see The fell continue obviously, down

to I us spreads, given just elsewhere. it down would those that is, base would would think where rate we that we pricing levels highly back challenges of the into be take unlikely go given that have the

front-to-back it So down back more if we to being that a went feels kind equal, of kind feel that of then appropriate.

dynamics points. go XXX a guide there’s not dynamics, So hard will customer to market levels. but to there, much it happen that’s so you going that kind of basis take prediction But I doesn’t feel be certainly would because pre-COVID as we’ll to between back that probably that

Operator

go ahead. line Your next Dickerson Jefferies. Joseph question Please from comes of the from

open. now is line Your

Joseph Dickerson

more. return it. We you in But is ways. one make the to know a you’re crystal forward strategic capital, and questions. you’ve look this the want some I all is think thing Just longer-range excess then huge ball us guess, has of I – but different done got which XXXX differently don’t and I need all questions, and of generating adapt couple more, consensus, amount on

But context, things something thought generally future? M&A have I’m into talking the for capital. not your you So do speaking, a in transformational. like lot figure how of that process

the of amount do a a of expertise the up. and various lot following take could you’ve cost have things, you operational done restructurings You fair and interesting

there useful. be So any would thoughts

signals to said in related addition there shift the your demand, of of one of the a in nascent duty in were you’re seeing quite signals. those mortgage competitors terms to structural stamp structural It yesterday, seeing Secondly what shift sounds mortgage of in changes. nascent not like signals a demand you’re

If helpful, comment that, you be on that could too. would just

Alison Rose

the capital. uncertain in the is terms gives that priority comfortable to generate very I’m I’ve that business clearly, the flexibility, capital have I to soon of resume think capital, navigate Well, said. the both my outlook, as strong possible. the continues dividend in we And business But and us as to that with also, as payments

that options value. will other compelling consider We shareholder offer

our You’ve such business is which accounting has an made offers seen been in very the commercial and free acquisition past, Free for customers, we’ve as – successful. to Agent, services example, which and

such as as looking acquiring our increasingly made. recently fintech with into we’ve Esme partnerships, we changes with Israeli with at with agreement innovative to done partnership BlackRock announced also and in We’re Tyl, was merchant reentry and companies. partners which support And an the was things innovation

value options So add we we all shareholder at at look point. think will that will this

we’ve navigate is as to paying And CETX uncertain target indication intent having given time. to you to to soon return think XX% of possible. the I flexibility my clear as over but environment, XX% our of the an dividends

grow point space. to Katie we quite we and have attractive that area a for very On continues mortgages, this of has will on So us, to capacity consider and detail, in in this be that. your covered lot a

flow, the share that, one to think mortgage We think our in last stamp and you’re share acted remain has averaged attractive a the grow. market our in As for nine and aware, months. demand. relation But that to stimulus stock that as we to change definitely duty we has continues XX% will

Katie Murray

of I the and I And continue work old going nascent think is a are things at think kind can that’s to think, fair, they applications Alison. actually stimulus. really to they to where the more well, there’s data. that add result I anything moment, increase mortgage the to the don’t about challenge through of really as think

really nothing add. So to

Operator

Jason of comes the UBS. line question next Napier, from Your

Your line is open.

Jason Napier

obviously that’ll a feed what vaccines of from bit well. one. have and intelligence clearly, were you’ve the the quarter. really Board that only losses. present. and the as quality uncertainty, at little to fare Consensus a that at the what talk sort nearly to when you and is business balances actually down outlook I going just around running about in in for third a And that’s two might standpoint. Stage the really Stage considering stunningly, all appreciate and an and sort could credit and huge you’re the printed when pound forward, understand the it’s performance questions area think thinks whether stress amount it that And buyback loan of I of the vast next industry you’re have Brexit about only terms you uncertainties XXtimes about of that testing must year three I sort around shown and in be but of material have not there dividend you, wonder one through how but We

about So on on provide view. of a what how the range XX-month you XX-to you wonder potential outcomes could think I color Thanks.

Katie Murray

then, kind as think, of little coverage. always the Jason, XX months bank But I’ll bit to give of a more activity X get which real kind of kind because we it, of on February, kind benefiting well. it kind a cycle look you talked as we have more give together at points be through sort a of we will about XX of when you, views Alison of will basis of or and color. I of in data X from this And I as

at need to your that, where in own is that. of with that It’s take are you’re cycle, quite we will mean, way work how standard valid to familiar do think in that We through forward-looking. of be meant to terms we procyclicality I but you still come. terms of guidance the as well. kind our Now work views we trying that incredibly think in

three lot done to So in. actual And think kind in can government see has the for a theory, that delay the I of a default the Stage we’ve coming it And move you two of what of through. to to so migration piece. we’re really that waiting Stage that built is lot protection is sort

far, But really us impact asked holidays. a people comments at is lot that, – see didn’t in quite of are the do of England terms the of government of happening, One seen stress or payment can level done. territory. so I we quite we what Bank coming comfort get and we’ve of how is the think notable I of scale I uncharted all And Those exercises, in desktop have where some deposits envisage we the if see that’s compare gives the to off is schemes all think that we what look the the important Bank of in testing the things activities. we’re that there we really some can the of that about and England

of While moves of in amount we billion significant see small monitoring, than heightened procyclicality a or drive we £X.X in anything, to other enough our saw do sort of kind it’s not QX.

actually and there data So happening are numbers. what’s ground migrating. on in there’s – lot risks to the of It’s the not a

all cycle, kind basis we of of the of points be as I’m So would a on going cycle pull about I for to think on to the we’re might I can waiting not through to privately we And views where you XX own be. think drawn kind kind XX But that. the and my debate that. probably

think XXXX Jason. to good it’s in work and Thanks, guidance like. for might I look XXXX what through terms you

Jason Napier

a Because deteriorating it’s keeps and that long to down over of stronger. across the keep as sort of just have growing, away. customers at in is your you about high Liquidity stats banking how health balance I, period sector water? ebbing time you that liquidity? intelligence risk a just really can level, keeps commercial Is sense their within getting tread Can it the around sheets the the drawing that have, follow-up of given all point, you they’re on

all sense wonder getting basis, you’ll the whether at you whether par underlying given conversations customers. of sort just share with or can be I are as So whether any are customers on things having to those an weaker the

Alison Rose

we our look, And Yes. of spent lot a talking time to customers.

through strong that’s place, they’re a and businesses particularly it providing pivoting put this buffer And the look customers period. of to level is in As their Katie navigate support at been really said, business when you own for model. also

payment a where my constraints, I my credit of that we to of So took measures normalizing, clear and initial lot that shift some utilization at XX%. and up particularly down certain of That’s they at It element are people now is That’s holidays, where down XX%. team – an talking people time in the interesting few covered the were facility country. in on presentation and spend a peaked customers levels. think, I revolving myself the doing pre-COVID

are well capitalized. So think I businesses

balance a customers, stressful is and But very our and I SME to deposits difficult. on we environment. lot when that And have a talk uncertain is it of very We commercial very uncertainty sheet. would say

research you, months. with the to six of have reported business and we’ve their of this XX% impact smaller for COVID the of Some a just will more share conversations some during demand of businesses think in SME that And than had, drop XX% period.

will reality So I is And a – place. definitely all and circumstances, been them. lot support on companies measures being in think put There’s in the uncertain economic these survive. of outlook not weighing is

around Loan indication the the their loans in Back notion you now, you’ll of Bounce what lot I at this. moment, of of are through coming million think repaying sort something start will I see over of get navigate I are. But my degree and what they of due underlying but try made and would on months, the May, think comments would ongoing right I customers that then a some to issues for seeing sound resilience, is echo we’re a uncertainty I X businesses as caution

Operator

from Your next line of Rakkar question the Aman from comes Barclays.

is open. Your line

Aman Rakkar

actually. questions, two Just

on net Firstly, interest income.

have it quarter for by expectations I that by were – rate you looks of really that a stuck of you central. the probably have this was been do driven Or division in full should for the the on for kind of understand QX, they year. you guidance help clearly and call elevated me from liquidity costs. there was one-off The is strong And just we out? Can in to volatile position? that something but – comments, kind your this kind outperformance driven just the central with in second was is excess like earlier while run Katie, probably liquidity. So versus looks

is levy So you’re guiding I know year-on-year. a higher that costs in touch to think the going million QX. be But basically still I €XXX step-up for Q-on-Q bank in

in help you QX? low just and base why cost perhaps it into can back QX us coming So was what in so was exactly understand the

Alison Rose

So let the me up cost question. pick

standing they government you’ll we be So more in recall we support scheme, Loan schemes, and spending – at terms the I things like largely half Back of that COVID. to and our year, as pivoted to the back-ended customers. to And costs, up Bounce make would could money would as necessarily, sure responded respond said, I we our for were be we example, the business re-phasing the obviously,

you’ve costs the in plans £XXX I our for think not of million of our have first lower in what nine the delivery, strong changed. is cost And performance terms seen QX XXXX. months

COVID we them So this in on naturally had to on track but cost £XXX deal committed remain execute the we million that the year. to to with to are situation, I cost-out I plans. re-phase continuing for February our

you want guidance, performance that think I’m and I up? So QX. you’ve seen pick Katie, comfortable in with do a stronger to

Katie Murray

levels the adjust ended £XX funding. and much million the falling center really Slide Yes. No, timing itself, It which with of continuing timing we piece. up on are central the It terms that transfer a its there, not it’s there as we that in our very greater mean, absolutely. see and I see That you’ll trend. is XX, go NII, the from benefit in of internal of question And of resolved the meant back in a we move it kind have to Aman. rates the center. a as usual and that’s forward – Look, will you

So Thanks, I particularly. distracted wouldn’t by Aman. get it,

Aman Rakkar

Okay, cool.

things understand the the what us might to able the help Are naturally follow-up of on cost that? base to quick base you a COVID-related next It months Are slip you’re that temporary one currently cost year to able us sense Just might the normalize. quantify there, then. cost nine if out date? costs you give just in what incurring

Katie Murray

additional we’ve a going not. So or I is I’m but I give for the mean, for of we because Aman, be costs reason I slightly could COVID. some unhelpful that got you number – to that, mean,

we year. staff That’s of completely things chairs budget. desktop that also costs setups to this would kind other stats all haven’t of country, significant we normally favorite and incurred delivered have in That’s gone done come travel terms there’s think up. our that back that. personal a – obviously, we’ve away relatively something sorts like But is the we’ve I XX,XXX one and of my across of

kind it’s important not too we would to what we What sorts actually, we’re our takeout all more guidance beginning giving round out now. what is just said of with think cost themselves in the the terms So And sort those of at of very of the where back-ended, the in much are. things I of year get had seeing for we’re distracted comfortable we’re that’s you the kind year. that’s and – be because

Operator

Your Redburn. next the question go from comes from Kunwar Please Fahed line of ahead.

now line open. Your is

Fahed Kunwar

affixed, Just one follow-up, actually, sorry. quick – really just being I’m

or strategic On building much as the and merchant at the question. incrementally the one retail mentioned million things income couple a review, you seems That’s just services left of £XXX questions. in how Then now mentioned you looking inorganically. of be kind forward to non-interest is block Alison, XXXX? services on going and Everything accounting XQ well. of side

scheme, about ask, you as there And the how were interest – actually And Loan does back, – income it would government talked income? M&A, incur paid – do May. and you do loss then the question think how to the people the you incurring one. If on of you money non-interest income? you Can How the big is a back focus government I that losses work? start is bounce-back does look so is you two if those cap and about Back back? anything sort net would – if look? purely being Or to That you as and transfer potential on you ask pay for guarantee loans well with as on on question – the work loan the like there in when don’t is at go And non-interest when the look and see the those? Bounce was

Alison Rose

Right. organically the Well, I take grow would me our potential of And in you terms inorganic business. first to question is, to have more say we let what actually, growth.

priority. And where particularly, business. think can are grow we first opportunities my I our remains that So there

can to and retail business You and that our we that stock our of our share grow, have in with share, capacity remains see mortgages attractive.

in have commercial retail, We very strong and private. franchises

know those share in we particular, us. for opportunity – that unsecured. So a remains low have may relationships very leveraging significant a you In

more area In fee-based attractive. are like I time, remains and Banking, Tyl the Commercial appropriate that think businesses. at things is an that Payit

to I to from businesses innovation strength the we’ve made. and asset and we grow together And allows premier and in wealth more I FX that unlock of which the areas business group, Flavel Peter to think, refocus and financing extending that and strength allows the of across our area and And our the business the of August I those under an of growth. have announced benefit think So the bringing us private, management is us Markets in that NatWest business.

business focus to of as return as within terms capital and exist in possible say on shareholders is that would the fees, opportunity business, safe our and to making is secure. I So soon existing sure we remain to and my as as those And our grow priority and grow we appropriate. then revenues our

So I I be where would would that think that. address

that in Loan I QX, been have the Back Bounce On to in to XXX% loan, the the terms start announced, under unable schemes, and we an scheme Bounce Loans, that the them collect pay and been from seeing – that go to changes period customers have way the to of extended are works, have with default, guarantee. government But have, benefits into earlier, are. a pay, as repaying customers just they we government then they they back the of talking at mentioned our to are that. the event there when repay. we’re And then scheme, which unable essentially, in claim the we where number of look billion customer to Back guarantee. to £X.X from In and work that that If go they obviously, on would to

the bank. the guarantee, for as So you is know,

Loans, Back it’s Bounce XXX%. the On

for On is the CBILS it XX%. loan,

So those work. Katie, sympathetic is we’re we supportive question? that want very make pick in a sure help to you way this how the through navigate first closely to schemes and Clearly, work our working that customers period. up to with them did

Katie Murray

Yes. Fahed. No, absolutely,

essence, have there various third come you in at the million if in basically, because look of So is, £XXX the activities kind quarter, through.

that an So you’ve extra come next into will further £XXX got year. million

of we’ve an good all into the of that of XXX terms through. rate a this dynamics year. if important be third the next I in then in terms run market just to And customer are that additional pretty what quarter consider third-party £XXX is activity, going you had being million think but year

Operator

from the Our today webcast. comes question final

Robin Down

comments question pricing. of on to ask mortgage comes Down three says, "Thank question. Robin this The I you can parts from additional There’s for the HSBC. detail? But some It

part, you basis back NatWest an Would but and is is new indication pushed spreads a a mortgage NatWest reasonable of in recent spread first, book give are to to final more closer stable transferring you October? for points, of of The give a how points. you up front reasonable has weeks. the for component. XXX And Could rolling in average gross book X.X basis The any mortgage internally industry us part, this over transfers? second relatively X a can to SBR book XXX estimate be onto applications talk that the indicates presumably, indication fixed-rate who years. pricing about customers XXX us of lending/internal Is Group? The estimate quickly

Katie Murray

take this. I’ll Robin,

The order book and in of your questions. just closed. back front So has gap book

So XXX points. basis that’s

and indication spreads. at – So front your mortgage what then terms about point. that being to said XXX October, we I’ve you your in In talked book around on that of

again, And complete little bit on remember application. that then So will an improvement later. a

question, XX%, X-year; quarter, this basically, to second fixed-rate mortgage of the about us closer of basis just new of just you of group years terms is say In XXX XX%, and internally loans a clear gets moved around your the numbers repricing book, want we be did points. But book. of the XXX those in your of of reasonable customers estimate the onto a so be where about to on the – a to terms every are kind three in last just the would bit. point, repricing I transferring I’m what who re-reading X-year; that that through estimate more

bit rate. a blended I’d low. feels So a work with That number

you’ll kind improve a blending Hope the the of that quarter, that of and bit for Robin. application helps, we at XXX as little to So we’re rates. kind get see

Operator

any comments. I hand to call closing to would Alison the for like now back

Alison Rose

you’ve very is very Well, resilient thank time and you much Hopefully, seen your underlying today performance. questions. for what an your

to working this ongoing a these the bank’s navigate hard, been very not demonstrate We’ve think but secure bank customer them our support significant in I in us crisis, uncertainty. the results and help the to of safe through just performance resilient face remains position. and

risk confident grow that made and comfortable the to have business. on book our we We’re also with in with investments diversification that have we the the capacity

We but protecting strategy driving that to strength. you remains we we’re sustainable continue much. And and customers to our importantly, Thank times. ensure capital deliver to the against returns, as the continue sector-leading promise very from these one benefit during right our and supporting business

NatWest (NWG) 31 Oct 202020 Q3 Earnings call transcript