NWG - Earnings call transcript Q1 2021

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Operator

Welcome, everyone. Today's presentation will be hosted by Chairman, Howard Davis; CEO, Alison Rose; and CFO, Katie Murray. After the presentation, we will open up for questions.

Alison Rose

Good morning and thank you for joining us today.

As usual, I'll start with an update on our strategic priorities before handing over to Katie to take us through the first half results. questions. your take then We'll

So starting the headlines. with

£XXX are a loss operating last in of This second release underlying And net of in an result credit the profits to compared year. of impairment an a light billion, of £X.X includes as the more was of improvement billion. half a of We first reporting million £X.X in this updated a we £X.X favorable made release Most when profit our outlook. results of attributable in metrics. in economic this quarter, economic assumptions billion

make progress about We here X% continue be next linear. by to growth continue of and costs targets. to We driven two the years. on will not target lending. mortgage year-on-year, good progress reduced Net X.X% lending our we grew rate in basis per And by our reduction annualized over a an annum X.X% against naturally,

from of XXXX of a the increase last million, the addition announcing to an earlier week for year. three £X.X billion. capital of government, about shareholding £XXX government from this of this intends £X.X annual part announcement to from business, announce distributions to onwards. share months today, billion ratio interim generative the our directed brings billion. know, is the £XXX over also also that distribution £X capital in will seen to has XX minimum us have million years strength over to X% an buyback to sell and of of CETX And August We're capital almost initial This you the share you the Xp their total on-market buyback As to a enabled we're XX.X%. the dividend and next up reporting This

the with commitment heart and purpose people, headlines to our on business families and ongoing of Slide priorities strategic on thrive the to our remains X. of are placing at importance. move now the paramount our businesses background to I'll Against an those So pandemic, helping of

priorities, our on growth, on execute years. returns in to the accelerate and for invest order our and over continue targets transformation three We next our strategic to drive deliver shareholder digital

putting X, So our I'll let practice. three financial we're focus how with tell on barriers to building Side into areas, start purpose capability, change. on leading you removing me enterprise, climate and

include to ups, on During sized of and report found, businesses representative drivers half, boosting after published scale to This largest growth research back a what entrepreneurship, build contribute more the medium and participation. female first economic we the need supporting the pandemic small achieving recovery. economic future and workforce

to to up have thirds of and launched SMEs We and committed this priorities of scale program £X London. we our grow, with billion support these outside enterprise two reflect allocated to

year, more our entrepreneurs already Our XX,XXX enterprise including current XXX are program on program, has individuals this of accelerator which XX% supported than female.

to financial their the strengthen help customers as with We financial starting for economic resilience also continue help first and programs, health such checks, in save time. education to measures free

the by have lives recovery investors. for whose to supporting Career pandemic. helping XX XX launched olds. June, recognized badly by In climate to service well been we of SMEs a we're entrepreneurs, year at young the is also on addition and In prospects employability to aimed disrupted And improving people the act now change, Sense, need

customer's transition to Our economy. focus low financing on remains a and carbon our supporting

the associated electric a also of helped our plans aimed means carbon £X.X vehicles. customers we transition Sustainable billion experts billion target. to have NatWest at tracking which that helping emissions collaboration can a exceeded businesses scheme new and reduce to We've raise business on Banking announced Energy During Financing, customers their have helps UK Octopus app. in customers Microsoft, with with so via our spending partnered £XX the measure create working we're And now year, we emissions. we And carbon that Funding with their with

X, Turning about our net billion working government starts businesses, I'd talk during schemes. lending and grew now the commercial retail to half, economy by like recover. how customers to Slide excluding to we're Across as with the £X.X our first lending

in And Pay year. was for some or lending corporates. government schemes, first the anniversary full. this of ahead And to With the X% of months, XX% large balances that Back credit restrictions at past growth £X.X levels. of schemes, we gradual loans grew April, repayments You credit billion CBILS which billion second Gross XXXX, due repaying Commercial government and in now a government start of looking lending And over both billion. enables support. approved are lending of customers businesses have was or schedule. £X.X repayments, in more on holiday. around our trend compared a which given introduced Retail three marketplace. of demand quarter. started, take declined sized utilization seeing Since in been the liquidity card businesses, Revolving extension the In repayment will XX% now has detail The new in COVID-XX And cover and to Grow reverse returned repaid to £XX in competitive XX% businesses to to whilst Bounce all mortgage was of slightly, to the As significant spending has new started of a Back from April facility net businesses, small muted, for the XX%, of credit lifting with of high to last around medium Katie with card debit pre- peak an Banking, is lending Bounce request some We're the Banking XX% been and when Loans to later. these in margins levels reduction have in lending Loans balance in

our payment holiday asked a this of Loan through X% customers Just Back have Bounce for scheme.

a serving or them delivering for saving key at throughout borrowing whether by retirement. customers supporting their to growth to we our focused pandemic, addition also lives, In through the stages house buy on it's

minutes on we our XX.X% process done growing to will of mortgages much X and told growth, XX% it while anywhere the see businesses stock Banking this at investment more you at as I mortgages. this we manually. online current needs that costs. share can of Banking, that of accounts now saving transforming to that our gradually our Retail across how effectively up renewing share is improved in XX support three to the we drive as and of weeks make are little was to reduce the when can compared Private efficiency, take In example compared group. are time together Slide about the brought asset This is of right remains use improve stable wealth You customers XX.X% better expertise our in so management February and have year, last And full we management for journeys to customer good year. XX%, a

Assets our billion. transformation. These half under grew team by digital give £X.X new of Digital by or range about investment X% level funds during billion inflows, the over billion platforms was administration of half double to last our this the £X.X first which in year, managed more which testament of than net Banking. to customers ongoing access management is and a increase XX% £XX.X were online digital Private in to platforms. inflows the via the first were

NatWest and on Turning to Markets Banking Slide Commercial X.

supporter year UK revolving in of a be Score. has continue the to are decreased the businesses We to and down. the and Lending leading customers facilities as Promoter paid Commercial credit largest continue with Banking Net since end deleverage

recovers we have earlier, in of providing the said services the half for economy commitment commercial supporting made by sized of I led As medium small almost We're more to our a private workforce. customers and UK over they turnover since drive and products. businesses innovation sector employ and investing technology as significant also XX%

stop customers. during Our HR lifeline such simpler, via invoices corporate additions and using merchant a transformation started is offered Payit capital as its and enables markets. and risk NatWest year. transactions have well million as worth such has against half over as in on Payit the institutional We're carried Markets, shop also Tyl and to online business rate it foreign have borrow customers valuable to Rapid Both into these less And one which last In billion since in platform intensive since of £X is these Path of management, pandemic. service progressing which extending unpaid a payment out transactions Tyl processed are customers launch. and focus a Cash, we a offerings exchange businesses August we areas it compliance. online the acquiring for for and capital reshape interest

our income Similar experienced We currencies levels our to performing to the as first half lower in million income £Xbillion year the capital activity growing fixed whilst line to between NatWest market compared growth. with And businesses capital almost on performance of focused markets is in remain term. reflects is complete, we broadly now others, restructuring expectations. volatility. are Our with Markets and the £XXX lower and last business medium comfortable over

established continue in to leading dedicated Capital and We position leverage have a team recently ESG and Climate our sustainable Markets financing.

climate total first As financing, delivered billion. bringing I amount funding the mentioned £X.X and billion during to half, the of earlier, issued we £XX.X

exceeded accelerated we £XX billion and both our So have target.

want now our global in Social underwriting managing to largest turn making bookrunner transformation. us ongoing increased Bond also the Green, our X.X%, to We Sustainability and share I digital fourth in Europe. to

people to includes in human investment day to £X are digital digital how X growth has able use digitization to key have and Cora with average a the of lives to branch with cost accounted mortgage our retail journeys. of in reduced interactions Use without enabling they next XX,XXX adoption efficiently without from And And almost of a these during of now want, to travel. more personalized completed billion the support service means Banking deliver of applications customer customers and years accelerate an XX% convenient. Slide transactions intervention. over at any income half, now us This place we needing for our both you interact means initiatives. customer told chatbot third their our of on continued see well XX% mentioned can digital XX% Video by first and established interactions access year-on-year. February You time customers to any of whilst I this three almost us. is are our investing the services programs. making earlier. this that easier technology reduction only is I week

costs. retail are to XX. turn on addition, our reducing management in commercial working credit order in In and whilst ease businesses Slide now I'll on we speed applications delivery of and capital to increase

to Bank relation strategic a of know, Ulster colleagues to Ulster good Allied progress made We've have supporting transfer Markets. along Bank, commercial binding billion both you NatWest now £X.X made As agreement these loans with choices with and we Irish signed on have in Bank loans. and performing

also We Bank retail understanding memorandum year. will If the the withdrawal to book. as announced our £X.X LIBOR. transactions expect end the of last TSB we for completed, RWA to But accretive end loans, of our as and as billion talk billion a track of with now of majority on Ulster stand remain and a the account And the SME more updated achieve basis XX% model to Permanent about the performing non-binding to well multi-year of branches. NatWest we later. reduction about this by process. will In two of week employees the Markets, transfer these on associated sale of this of about £XX Katie billion capital £XX.X for loan targeted at pro be we forma RWAs due over the impact the

£X.X Tier our consumption Commercial We're reduce we're Banking, managing our contributed actively interest expect, and X to X Tier capital reduction managing and to stack portfolio payments. during in and manage you'd of non-equity And or in first repurchased optimize called capital half. As RWAs an and capital, risk. to £XXX this our reduce the securities million also also billion

as to ratio our Turning business scope gives to XX% to Slide XX, target as us shareholders excess is XX% invest capital above return in to well to the ratio, of growth. well for our which strong capital

target capital, In to Xp, of any maximum given interim ratio Katie announced and of will have We're ordinary payout breakdown As our directed this a XXXX. from of XXXX March Today, at we an of billion. minimum £XXX distribution million revised in X% committed £X share announcing ratio reach we distributions our almost buyback more an and of we billion of for by distributions least minimum to £X.X plan you take £XXX to how £XXX 'XX. our buyback a in dividends on-market announcing in initial billion. £X.X annual brings also total year. detailed up a of share million XXXX, a we you CETX million. for possible dividend amount are and to of February, to know the And XX% through 'XX

that, take with over you to our Katie so through hand financial And I'll to performance.

Katie Murray

a I million you, good the basis comparator. the at of in represents driven profits XX start return for ongoing shareholders together, operating now reflects or tax statement This the legacy loans, taking for change to we for quarter to £XXX points the before The before to everyone. interest a of of impairments morning, the second first interest as charge. billion update equity ordinary profit credit million. the billion, and of related quarter. £X.X was to tax This million net income by means to points interest certain release million Slide release rates non-interest million XX% will billion. and in and billion was basis Thank compares million, the and reduction in an than improvements tangible underlying income tax customer leases £X.X an the this, on move and Within to XX. all with £XX X% quarter. first economic higher Attributable reported stable Alison, operating Group conduct billion, corporation cost impairment £XX Income quarter to Total £X income adjustment offset was of in second X.X% the our Taking X% equivalent £XXX I'll a reporting gross this Bank first Operating Expenses XX an metrics. first. was release. assumptions net quarter, on This XX.X%. income second on income profit to of up up with on £XXX net £X.X the was £XXX net on fell to down £X.X one-off includes quarter. of we're

Excluding net lower by income this, strong offset to £XX commercial mortgage balances. is interest continued partly banking higher million growth, due

accounted was decrease to Turning basis yield reduced to points. structural margin, basis in reduction. to And levels bank lower Higher the unsecured basis three curve net for The point margins there one-off partially points. commercial one offset balances. impact were which as point mix stronger These a XXX hedge. mortgage basis points liquidity one resulted negative adjustments, offset by for lower were point the interest a tax due of and this four three and basis pricing reductions added basis by

the offset accounted and points, changes. the We margin just our X/X partially for reflecting and lower show buffer, average billion tax pricing £XXX QX. by asset also bank XXX banking one-off one in interest basis point earning I quarter increased assets which This yield mentioned, for adjusted basis in interest net by adjustments or the curve liquid the of to mix

margin interest net of Slide drivers the to on XX. Turning

XXX, lower pressure yielding basis to reflecting ongoing assets. fell points adjustment. due to Commercial excluding Retail On balances, were Banking saw on stable, yields yield side, unsecured Banking growth broadly three strong liquid the for one-off asset group yields the lease the loan Lending lower gross while by in

net or three group to liability to interest funding costs in are retail at points. broadly points, consider the a the further six with side, relation for were to small basis in On half. line main costs There QX reduction with XX second deposit in factors basis deposit margin

you earning which therefore assets liquidity, a NIM. First, interest bank change and as in know, affects

the Second, yield curve.

impact the a QX anticipated first in which neutral the was from to account expect the size XXXX, hedge we of £XXX be current to Taking of of half. yield in curve compared £XXX compared million around broadly expect to hedge hedge, the QX and in continue We and QX. income the million reduction to into

points increased from basis shape third and book. will and second reflecting points application around affected Mix four to towards quarter, points, to on The This Average broadly to below for unsecured quarter the corporate depend the higher basis margins factor back And improved which is mortgage the basis margin, to is basis is book they points. the the economic on of the of XXX mix were reduce XXX quarter with pricing. competition. lending, in decreased the XXX. second In which book XXX points back the margins front basis recovery. in by end XXX continue demand the also ultimately line

Finally, I'd like which to quarter. not remind you will of the repeat one-off next

reflects volumes £X.X to the billion. to on Moving X.X% retail our schemes. X% quarter. or in was or now mortgage to UK declined duty of in quarter growth billion at in £X.X at Gross excluding strong the new Slide and and in increased banking Gross UK loans changes government XX. £XXX UK, the June. the QX. £X.X balances in commercial £X.X includes This in UK unsecured £X stamp of continued from billion, up of RBSI billion businesses growth look billion on ahead demand end billion lending

in In we However, which £XXX revolving credit customers repay balances to loans income NatWest by was Within by £XXX credit gross in significant X% from of in million. and income on of million, restrictions in commercial increased £XX our Fees was in retail I'd assets to funded a driven lending fell billion. first net weaker repaid £XXX reflects billion see down a to of by the £XXX larger quarter trading alongside further or by government total for Banking, Commercial experienced pleased billion million other billion in liquidity now to items as accounted volatility year. Retail was earning £XX This Slide the the Average reshaping to Banking, Markets, XX. the the to million. million. XX% items non-interest or £X.X Non-interest It decreased were COVID quarter. decrease X% growth £XX This facilities started market and notable excluding on by billion business made card activities fixed of and customer schemes, number impacted million. the £XXX as non-recurring They interest this, higher like banking driven X% and grew £X.X income eased. on pounds to performance to by also by deposit repayments card a income which and includes £XXX in million. turn inflows. commissions buffer businesses fees together which £X.X last

increase as our term provider early from second the cards in a QX to the into will driver remains retail see is balance ongoing group's MasterCard. unsecured reduce to important growth migrate existing uncertain, And given restrictions business the half expect short fees start debit This and during and across from both payable to Europe. We XXXX. Visa the of we Travel to COVID-XX due outlook an and retail impact fees.

this So do year, term. not we range confident to to £XXX on to my in while income, off we expect Market's round medium remain this the over £Xbillion of NatWest comments the income be of

lending the across retail together targeting to at is and with bear impact X.X% on consumer year mind look £XXX on to year. dependent Slide or this to operating commercial ahead are of move were corporate will of last growth base finally, expenses, We in and the to activity. costs And of million lower fees need do you depreciation, this and our the And hedge. now commissions, Ulster That's quarter I our businesses. cost on structural billion This date our and savings guidance. for excluding second lease direct XX. takes Other the X% second than quarter. £X.X

reductions earlier, be as cost not However, Alison linear. these said will

you should rate. second spend half moderate, impacts expect so not investment COVID in higher run We this extrapolate as the

savings Strategic X% expect the and to year. £XXX year. around to were full be QX expect for full of the to million costs continue in these we million continue to around We deliver £XXX for

XX. on impairments to now Turning Slide

driven We to in economic of QX points a a the impairment quarter our The million of and our loans, of performing defaults. an the or gross assumptions, continued £XXX half. are £XXX low level release customer million first by metrics bringing release update reporting release second to net underlying book XX basis risk was overall improved for

more a reflect outlook. economic assumptions favorable updated Our

in Our X.X%, base for unemployment and UK GDP now peak UK from X.X% from X.X% XXXX, assumes up growth X%. case at previously, down to of

are still see our downside have government four of receive. You and we scenarios will And scenarios. remains for support that also the two waiting our our reduced we uncertain. Nevertheless, significant mindful of outlook adjusted the the the probability customers weighting

we net release half, the There the £XXX expect key for net affecting full of a in the year. are variables full the Given first release million outcome. three now year

outlook economic weighted our the we versus performance scenarios. economic in use First,

As be each update you economic get these year end the the know, critical. outlook towards of half the so consensus as will we we

Secondly, performance. credit

And on we a conditions no credit level and which to. see support roll defaults carefully post monitor While model COVID trees we adjustments tall the to off. continues low moment, I'll of at as our will come third,

Turning now loss Slide credit to expected on XX.

particular issues accounting broadly feels are for XXX coverage not points this is see with QX, column the But £X.X highlight on an are how larger from and by proportion at to quarter at £XXX column comfortable it to £XXX the quarter can ECL left provision to reduced not of basis coverage second reduction have the that points. our basis economic of release both has in our was adjustments for right, X.XX% Comparing the and coverage moving in uncertainty our with coverage. you boot billion we QX X.XX% the ECL performing book, our £X.X time, reduced which the was of together QX. of like We all risk levels, for see is with on from ECL million. for in release to remaining million. our is uncertainty in going XXXX model XX cost improvement bridge comfortable the now line ECL this million a The then with This walk by do £XX the QX down end in first the level driven overall in and billion, Our a we'd metrics we mainly reasonable. any which through I'm parts. And scenarios economic PMA of economic in performing. of the accounted

the be ending economy react as could model customers unwind As later we potentially conditions trend favorably, economic But the to look and there support. XXXX. our some be adjustments, the year and major upside factor continue credit government this as how and of post will long into to to the

the Slide Turning on Ulster XX. progress on Bank, at now to look

loans. a earlier, announced billion said of now We we SME Alison TSB, do and the in phases and year. the to TSB place hope of not terms have expect with take binding of with and retail XXXX. complete €X.X the for to Permanent memorandum €X.X the the this AIB for commercial agreement As AIB through sale of to end sale year, And deal a non-binding we the have is expected of transfer or loans understanding billion Permanent before reach for

However, XX more to guidance associated results. sheet we with the on balance exit completion in to provide and some back be our the is costs full likely will at year

As the group. look to payments start complete, will dividend we back to transactions

We with million a Tier risk XX the XX. reflects XX point disposal further the Equity was of and to the on attributable benefit updated XX.X% of This by dividend basis linked buyback due million the capital pre-tax, assets RWAs quarter. transitional X, on to ended transitional the changes in ratio Slide basis IFRS and at look basis which basis a offset £XXX This losses. basis from first line to together contribution a nine accrual, a relief, reduction lower the of expected profit potential in £XXX the point points ratio X from and quarter weighted net points. X reduction the now Turning a reduce deferred with IFRS increase Common valuation following adjustment by lower XX pension ratio and fully on tax

XX in release expected the credit points Our to previously which reflects by have loss, points. our would XX quarter and IFRS the back capital X This X basis transitional been X Stage relief Stage to position. added basis reduced of

procyclicality. Within a billion and the release billion. billion received our by in significant July, model million update £XXX a quarter pro give a quarter at which £X.X LIBOR this, sterling of the forma of impact this ratio. £X.X impairment to following £X.X in reduction an retail RWAs the of £XXX RWAs for from in lower £XXX reflecting balances, of As million had A credit driven in commercial billion. benefit decreased billion CETX announcement elevation on negligible and reverses risk increased of £XXX was a result, Market was the by temporary unsecured uplift risk March. to end

IFRS QX. Starting expect RWA points. based as basis measures regulation, This to Basel related XXX transitional X know now with capital XXXX unwind on on based of COVID to around consider on out we this to relief such to want factors the indicative drivers impacts to our at III. as XX% Slide consume what Moving today, as to the on XX%. we the are all includes of transition CETX These of well as inflation I including target position set XX. we our

before our mortgage Based around risk increase expect weights to our we said £XX on current billion. to book mortgage that to overall economic changes XX% and we Taking on factors effective density, XXXX of have We now of X. on range PRA or increase size risk expect we at to RWAs these the around RWAs by and billion XXXX. expect the £XXX to below outlook, all £XXX improved account January at be including into end regulatory the X, impacts billion January

XXXX, and withdrawal of course, of through to capital and Ireland. Of NatWest the Republic generate through both to our Markets, from earnings through expect we reshaping

consume the in 'XX a date would via and to points billion the to further also buyback would has in to opportunity also completed to buybacks. XXX capital. and we XXXX And have of is of uncertain. this around through of are our timing to £X ratio. and do have per remains in we points announced distributions. one growth distribute which The and we of which the flexibility we with been minimum will fully annum we positive, March, finally, capital XX.X% consume further And intend buybacks quantum do would line dividends, on-market around this We XXXX. key through direct Where procyclicality These in today included consume through XXX loan basis capital basis priority and

appendix. find drivers more of details You will our in these

Turning to our my final of Slide sheet. which shows balance strength the

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

our is minimum call dollar half. leverage of successful Bank the issuances ratio ATX a X were this sterling also requirements. basis We most and of of England mentioned one that follows points Tier to in billion XXX £X.X X.X% Tier position first of Alison UK following repurchase the month securities above during Our the This expensive earlier. Xand of ATXs

favorable FX, and lower an eight significantly in result payments Given will this increase CETX going point basis generate coupon forward. in QX

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

liquidity coverage in due minimum deposit XXX% is £XX our requirement quarter to inflows above now headroom billion. the to increased and Our

to conclude, lending good performance on strong have we deliver I'll And a continued optimization. and growth Alison. reduction capital So with and back ongoing the with to both progress operating quarter cost to in that, second hand

Alison Rose

Katie. you, Thank

schemes the maintain So outlook, release a assumptions million favorable conservative economy includes an delivered £X.X profit light of of economic that we our impairment in which we and do recovers. as billion, we in operating as have more government an support £XXX wind summary, down of approach revised a

in continue our We to of our transformation. to execute invest customers strategy and support to acceleration the digital

our making the good We're Markets XX% and return continue year. NatWest largely headway ratio XX% made work three progress towards XX% we're of from tangible and CETX to complete Ireland, phased good withdrawal the on Republic pleased expect equity of by of to of to have also on to We refocusing to this and a £XXX total in X% XXXX. on billion to XXXX, finally, our today as you And year now up it Session dividend increasing £X.X of a Xp, distributions 'XX buyback much. £X distribution our to Thank as well brings an to initial this annual million. for questions. year and of XXXX for open up and table billion. In about And we're Question-and-Answer have that very we'll announced an 'XX, interim report share targets,

Operator

at Please Thank Coombs line go our we'll first from Citi. open. you. take Andrew is And ahead, [Operator Instructions] now your question

Andrew Coombs

increase expected it the on if on exit quarter liquid and strip lease to the - liquid in margin lower one-off assets. this is one-off look interest one than impact obviously, change, the trajectory, and [Audio the somewhat benefits you consensus you largely assets Gap] particular, gain pricing that's and from like does out the the in due on

could the be that for you the the So buffer impact into liquid question. just beyond? might perhaps That'd the interest What asset from from the half and first is the be outlook margin here? what explain you second think on

understand one The to the around capital return. just is dynamics the second trying

we've You've stake, But can't that, your the that talked concern sure means that be about the I'm ordinary announced when been government buyback. necessarily for an welcomed. it'll has given past what in participate. they

or So order the level alongside should government existing at it assume potentially are if buyback, stake another comes an maintain that doing in placing we ordinary you lower? to even their

Alison Rose

you. Katie, thank Right, can I?

Katie Murray

look at in. Yeah, But if of liquid sure. your don't there's of Morning, whenever Thanks, morning. don't going NIM to increase Andrew. all forward, of missed back always we things. kind I And If the very questions. we the assets, jump I three think good the catch of in beginning it, hesitate

like would in say earning What quarter growth that year this our of interesting down the average bit. get the was previous the liquidity, there's we NIM. is back £XX the that in things would as we normal. quarter, a change Bank affects we assets - billion. billion know deposits in slowing and it's that's What this feels from saw to It's little the £XX Now, therefore

as to we'll go about next we quarter. So this behave you into I might think think that leave how

can ex of think quite the It that You the stable what helpful benefit, as slide. NIM there. impact stable. which in see just number. the you assets, more you is I the today it's does kind and actually that shown that just But And one-off on the say, is it's see bottom of from can it more we've that also liquid a it's - of much you it's NIM shows

that dynamics in-market In capital in-market buyback, they that around the return, terms last have an down. government week you sell also of doing announced the seen £XXX the were so will million

little well in other that piece. stock bit as up we'll terms we of up as pick of scooping naturally, So end a stocks their that up

don't so see on insignificant. that that of think what you not [indiscernible] the the very it's it's impact of, obviously Andrew. we will a our you, share, it's in in we will anything to to - we difficult cancel count, but there. that what as our ROE is therefore beneficial do will share buy Thank terms not stock it's and And treasury I that be government So also

Operator

is Thank Credit open. of line Suisse. Please you. your now Keenan And from your from next the go question comes line Omar ahead,

Omar Keenan

I've on piece, Markets. much and you taking Good on mortgages NatWest got two morning. questions. one for one my Thank very

color so the four without increasing Mortgage on And pulling wondering keeping continue to the firstly just quarter [indiscernible] in I further? exercise. price if to NatWest you to application at my half, versus more whether million was just adjusted first you give margin about XXX. you revenues can related little - I are was in presently mortgages. £XX a the increasing on term of the I them. to the retention that share time I've on last could up market So guidance And revenue second lever wondering the But look margins you bit retention basis that, high take think you was - million Markets, to can disclosed question £XXX billion. it whether is points where you are medium FICC to on noted £X that as

say number when the normalized can £XXX FICC that what whether that think other by hoping that I'm means million FICC the the the help you just fact just us impacted rate, about has annualizing So or Thank whether might that wondering the just business the normalized be. reshaping run you losses you. is one-off been and to that

Alison Rose

NatWest talk Markets the business. come Thank you. about Well, and back why Katie look, to will I mortgage don't

NatWest it with to now reshaping year reshaping significant of progress. this by simpler the we the team we're businesses So and be make business And relation a and on the comfortable in is to will obviously, capital reshaping very making that the progress and done think, end aligned. are The are largely Markets, I it. in positioning And more very for and growth.

billion levels year. and particularly has obviously, £XX exceptional it's we reshaping. business also rates of across of this But generated a the RWAs business, given business activity weaker the taken We've fixed of expected. been that what out on clearly seen around that you've as is been last and the income Specifically markets quarter

So I guidance a it's But year. I from lower our £X.XX remains overall, last combination on think of the the the reshaping and comfortable. billion think volatility

at think Katie? to. I what that that - would it's just you point that I I would So

Katie Murray

Mortgages, yeah, absolutely.

I'll Omar, we've numbers, so we're make all sure of got terms and in So mortgages, just the aligned. all

the line When kind XXX of basis completion quarter So XXX the for at basis look of quarter, second with shape points. the points XXX down to was average points. basis the came in book, broadly back to the application I

from we really slow I would And we anything you to I think the lead the a in near sustainable Omar. the this our pleased basis quarter. see what's on the on was stock and as management. to as competition we it above remind at so important XXX move is what this mortgage step the focused today, sure points, going that on very balance growth grow you Alison. And term. pressure. I very on the market. price seek reflecting in risk goal sitting as We for is that market look particularly well say that value, growth aim end competition discipline each up will see strong in up it Thanks, towards actually kind depend very pressure, maintain recent year, though, that. see pleased we forward to to was think share of Thank much indicate creating NIM. today XX% goal I XX.X% with as to in and year, don't make the of quarter, to and increased don't retention happening to rest We're to that would for we our know XX%, I'm where the about you, on that's of mortgage margins have

Omar Keenan

you. Thank

Operator

line comes And your your now is at open. Cant question line you. Autonomous. Thank from the next Please go of ahead, Chris

Chris Cant

Thank little talk both. morning, if my that's just around taking a more want questions. to clarification. ask you point of just for Good I okay, mortgages,

XXX basis back margin is the said book points. you So

your I think inclusive of SVR that's book.

tracker you're what you've got book loans that SVR and going out could you to with lot helpful the do is sort there? we ourselves? margin? of apples-to-apples then numbers so be the either my just on can on and would us book spread to application understanding. business, So able understand there. be dynamic rounds of give that That Or it's give size can And with just sort Ulster, So back you to think do we of of compare of the us the ex-SVR less that the a it the

you what over to Sell some period you're time? to do that to So running about with you. securitization think of credit of expecting off item do with very What it wondering kind a a protracted being to that? non-core need fund? like book? Thank do a as do expect we Just that

Alison Rose

And Chris. about me me talk - Ulster. Thanks, let let well,

we've XX% around book. that's that the announced, the with of two transactions so as AIB the And and say, rightly the you PTSB,

a remains In plan withdrawal to our phased terms markets. assets, of from be the the other

book, the attractive. our sort is tracker did think earlier of across of number book that number of interested of mention in a parties in year that the were a I had I assets we which

So continue see two looking with in will our the you explore that to through agreement we accelerate the understanding with that. options and TSB, transactions, all transactions of can the like binding to book. Permanent relation AIB to Clearly with we're withdrawal memorandum

we'll be you ratio accretive develop will period. do phased we we continue I've obviously, a as to our will years. to we withdrawal updated plan, of before, all number assume confirmed So as I we to this expect And comfortable, capital over the I'm consider be would keep And options but over a but able that.

the long up a huge period. a question. to Katie, you want pick won't be first for ramp running You do

Katie Murray

doesn't thanks. is sure, the at that. good Chris, than the kind we it XX% X.XX%. the when of you. timing of bit a in roll-offs moves around it's today rate The Good of no, SVR Yeah, little look And book. and terms the morning, - SVR from rate, of to It less hear

move terms Chris. Thanks, math, hopefully how the of out lot. a total over that to work that don't back you group. So mind, so But - you XX% it your leave blended the it's if helps. will group, I than the Less Thanks. of that doesn't in

Chris Cant

you. helps. That Thank

Operator

And is open. your your ahead, from line America. you. now Please next Rohith Bank the comes Chandra-Rajan, Thank question line go of of

Rohith Chandra-Rajan

you've optimization Hi, redemption. ATX was quick coupons a good taken, I I the stack forward, earnings us help please? morning. just both points that guess the going one, the you I from if wondering capital impact the ATX indicated actions of and could Thanks. basis CETX income about please, think on actually interest QX also the benefit net used X have in you've

Alison Rose

Yes. Katie?

Katie Murray

yeah, absolutely. so Thanks,

of time £XXX it And I of have look that the ATX saving, a show in you. about really sort it's non-equity of if get that at million sitting a further it's number, press It's page. the a just at bit So we'll which at Thank coupon. be million. as have to Thanks remembering Rohit. to we look that terms holding through as of well. about going of then benefit the this the XXXX, In down £XXX also little coming

Rohith Chandra-Rajan

you. Thank

Operator

go of at now Paribas. Please your line Stebbings line is BNP Guy open. ahead, Your comes question next from the

Guy Stebbings

good everyone. taking Thanks morning, questions. for Hi,

one then The volumes on is back second one NatWest Markets. and on first

and extent timing payments again government the term guidance, given sort guaranteed performance, you're on wondering any you recent And if the quarter very that shape given the of future? in that? what with should the term together, or moderate it's of grow commercial in will came color we there then interest Any when So medium be or direction, trends size terms in point of the of what I perhaps on on But that on due seeing how and net on the demand the and in side, particularly I appreciate quarters And to book Thank be QX given of just Assets again flat specifically impacted that might you've see Markets what the terms in latest Risk volumes, Weighted helpful. whether and should view corporate the Markets, that right NatWest side. your then future costs? from wondered, around you the at just staying view on NatWest the the expect headwind in schemes reduction is be book, just whether from revenue elevated at long in do timing all the much color, you. the other

Alison Rose

you. Thank

NatWest we're So a no our hasn't year reshaping and strategy, We're we're and Markets, with changed are. a on it into we view. half the executing the comfortable where

and you we're plan to that So up pick given just and the and terms lending, guidance comfortable in with that same And the remains on of point, I on revenue we've the mean. outlook. commercial

supply We that I extraordinary the capacity of lend subdued. as liquidity you and remains market but from government think what been to you're within than rather amounts certainly the demand which, lack there seeing is willing really at the demand in have a moment, demand, in say, reflects place put that's a and schemes. of support

that positive and So of more of when and economic First, as me resultant I and are going up. as going on about the growth? out increase what you recovery the view a our heard be degree are things it's lockdown in economic come influence about, speed the that move to to the forward, think recovery. capital talk And requirements businesses working scale we

support think business wider very sort take In economy last institutional way on Bounce lender that. thirdly, growth end, to at current is customers give And SME and geared end, customer from be influence doing in large some Markets detail that more And the the is recovery. to sort second If government our and growth Back mid of Lending. various being government Grow customer sort moment, small by a the of business business, to corporate. Pay space to you and infrastructure how new the the give If you banking You rate banking to look the know, as The with largest being Loan supporting market, a corporate different large we the and right the sense the ESG, lending, to at of relation our the And schemes. concentrated business call I lot the sort of at segmentation, - is driven going that large books support to paying features the relation we're As business Green up the effectively clients. I the doubled schemes. the largely behavior of end business I base, we seeing business you down up largely of then new micro be in we of March we're in of going the in NatWest year. that can use try the and has our segments, that certainly towards the more I And what since

as So than amortization I new think limited offsets small be end in more there'll business. growth that

that gives you color hopefully of that Thank sort you. bit of perspective. So from seeing of what a we're

Guy Stebbings

and Okay thanks.

Operator

Pierce Your Numis. next go Jonathan ahead, question at comes from line of the now Please is your line open.

Jonathan Pierce

least deposits level. deposit bigger, would probably will here because got the money questions from billion keeps expect given opportunity half £XX vaguely one second build-in at I've and The the at both. they're the morning of Central questions in Bank deposits at increase aggregate the of in are, year, getting £XX the of rescaling the cash Good a the the at and in billion well creation England, again base in second couple two as the My quarter. Bank related. grow quarter hedge

And take those second and what into three us year a own expectations year year looks you're growing, see. And your time. because it is of current huge Because is again already on help three. tell on benefits actions base Can for over very future in I million. is, potential the because question can context hedge to £XXX of understanding, the basis curves that and rate? telling for your falling Is that two particularly thinking on mean, the for years expectations now year presumably I managed now, base out two is what interest the much. managed in just, why some clear year it one benchmarking my done? I get So and against margin effect on deposit pointing mean, increasing margin then you've three? of builds sensitivity. now, what's your base as two, if period guess you on are full are to rate? what are restating margin The numbers us rate benefit benefit it will to, year own above you're that your over Thanks managed rates, forward happened base I

Katie Murray

Yeah, sure. Thanks, thanks, Jonathan.

And so myself jump I'll in just Alison. apparently It's here.

further remain look increase of month I if We'd all that the the £XX the months, So XX of first reflecting expect next deposit higher average moiety, through hedging balances rolling feeding billion deposits flat XX in into over at balance. deposits the today.

around If I at come probably further timing rate QX there's think, on be couple interplay I the and that. second a that to We Jonathan, interest increases of assumption see would that your obviously, in and piece I there a the perspective that from little the between agree And get What we'll some fell so things through. on as through going we sensitivity, have, which will on to too look what's come increases on and with just do bit I there. increase. drawn going rate and that but will now. won't that XX pass you'll with noted would the of a the XX, more probably

not points base September. in decisions to necessarily the we'd go basis to rates talk XX about. compared lifetime expect the zero we we've that's and So over that made, Currently, with

that. over three that the increase an impact So in years will have

one, quite the start And heightened with are, through. two and first with in see year particularly year where given rates compared you in those coming is as those but move of you sensitivity rates lower as that forward So sensitivity obviously, three that we through, those some it to year. year coming

that So helps. hopefully, hopefully,

Jonathan Pierce

months off bit, get to assume you two few versus the to because impact took So and increasing year rate margin that. simply a benefit a basis sorry, full rise of in just the see XX saw it before a I one. managed from of to year point clarify the

Katie Murray

Yeah.

Jonathan Pierce

already. it's case, right? down that to and has is because relative going that going which is now Is this base up a your base rate Whereas

Katie Murray

Yeah. would Yeah, fair, so be fair. be that that would

Jonathan Pierce

to what sort once clean circa XX million year rise we're was all basis point kicked be growing at there in? a is, fully presumably Really, would the today, one actions of of £XXX rate the looking £XXX impact but if have million

Katie Murray

see so the don't think actions And in be additive. the £XXX Yeah, particularly you year. first would then would come first I through that

other got would in years. you'd go terms of see what managed in I we've So coming the with the through lines, what margin as those in

Jonathan Pierce

Okay, great. Thanks very much.

Katie Murray

Jonathan. Thanks,

Operator

you. your question And go comes the at please from of Bank, Rob Thank line next ahead. Noble Deutsche

Your line is now open.

RobNoble

Good And how well? would again, Ulster, Ulster you and stake from just PTSB. on it group it days But early how traction, where bit you morning, level from expected a on going base can all. would it more And know to seeing level, sort the Would in you theoretically do are I I treated ask work? a has hold its you. Thank it revenue perspective PTSB with and Tyl be the at then forward? capital and now to, of what go secondly, that and got profit as

Alison Rose

you. Thank

is our does pleased offering it of what the need. as really want as forecast will we to scale, it increase but we'll revenue commercial is, with going you specifically the with going forward. of it not yeah, of number And And you this that deepen And see go can product give and updates more So, on you the customers. to relationship commercial give we're customers on continues that do you the think on a We product through. progress. I'm our Tyl, sort all to transactions

RobNoble

Ulster [cross talk].

Alison Rose

You question. just Ulster the take up

Katie Murray

good a we Okay, the fencing. technicalities here, into thanks, little ourselves question Rob. And it's get of ring a bit

So holding. it's an equity basically

of ring things. that outside And a we edge which entity sits have a fence. on obviously it hold so the the we you is therefore, of And lot hold those holding that our

fence, the things give there of you it be outside that. wouldn't but - it's in we'll more and like ring sits in so anything sit Ulster it terms does holdings And that of when like guidance capital or it sitting

RobNoble

Right. Thanks very much.

Katie Murray

Rob. much, very Thanks

Operator

the Please you. And at line your from next ahead, line Apologies, Goodbody. now your open. line John go open, Thank now Cronin your comes John. is of is question

John Cronin

one thanks is share. Hi, the taking on both. for ambition margins and your back grow getting first to And this questions. And mortgage my to

customer share. at week talking How from to credit question moves some more steady increasing there quantitative cards, be customer down of peers. for royalty increasing Or seem any to Are mentioned, and were your at balances some to respect saving their that basis at particular non-payers perspective? beyond? owing that a on look, from I kind likely on where competing trajectory this full your go per know, guidance everything product And just below? is kind hold of of is weigh lot those breakdown on is times but materiality onward per among on we just looking of a QX and of some rate of a you - its of down of give on levels is looking far and impacts me know something pre-pandemic of the with are Then payers down? at potential on this hybrid the by I've terms the guidance might application paying the time, spend end I with to the proportion models sort on who you RWAs, and could secondly, before tried and in a through what as this XXX of your terms - fresh in there and where in finally, terms with going size on just experience So the they decide then in stop to basis, an that. where And savings small to margin the that's model to base, you be of understand and inflection XXXX III points the it And on the a and that and Basel growth and actually, point, to question beyond still you're short pandemic? say, [indiscernible] of the point

Alison Rose

And I'm to all Katie, give going to those you. you. thank Right,

Katie Murray

you And fine. through them that's John, rattled No, quickly.

I if the you. at So end, miss jump in back to I'll anything, and come

what that And I'd So in and kind guide stop. our did talked shared you we the they price moment are to would over of there, at what terms was, about what of at the recent mortgage they shared margins, spotlight kind retail. you at we most with what the mortgages of earning XX%.

a value on writing similar to where book calculated today. that's we're that's Now very

to about XXX it's basis points. XXX basis So points at

and stage, that at therefore, add-on. including So the importantly, mortgage so floor,

got competition, comfortable you'll fall to anywhere we're So actually, XX%. to level you've earning XX% you're over not good with below our ground that saying level. got at you've still going you've - we're you this get close before XX%, ROE Clearly, above the that some see that price about cover,

- a want on a that. So there number I really out number good

they've billion. card the In obviously, have small not our big so the increase quarter, billion, up we've balances £X.X gone what about we by a £X is from their And this are of terms credit proportion. billion, £X.X And levels. seen spending, in a had overall previous in just quarter that card credit

in completely from So the But in for that. people from growth them of to see terms on Basel helpful little think If showing obviously growing income of we've in that an a RWAs that the of which it's balance the that bit side uncertain. a also level. we to about down margin actually a exact little is what that and numbers, on on bit, is we're got our the from timing paying is in balances then starting difference - relatively things, the and to is X% it's specifically relatively

it's XX about see lot Slide less pack, of that. we in nine, we quite through our sorry, of XX say give over coming terms guidance. basis you'd points in I than a think of on on sort And you what

side, chance, the think changes. I see different So model John, around of poke you'll all the once of if in that impacts you get a from you builds

John Cronin

you to of above terms product how What I on first basis Can but can that come just that? just And thanks. in that? the of it's you one, far to kind more above points? is, basis back Anything XX XXX know, points add XXX growth

Katie Murray

- I'd stick with good of XX. the above spotlight try. disclosure it's gave. good John, probably it I'll just say just The we -

John Cronin

Okay, thanks.

Katie Murray

Have day. John. thanks, Okay, good a

Operator

question line comes line Morgan go the ahead, next Alvaro at Your Serrano from your open. is of Stanley. now Please

Alvaro Serrano

almost. that morning, the that's rolling said at end conscious you over versus the think taking - the rolling quick fixed but quarter, mentioned XXX business questions. points you've to it to I the above of rates for I that very rate is the business right realize the we've back one still basis is which my over? on death that I Am Good beaten A think thanks of mortgages, book one-off but of is it's way, maybe more we commercial medium given one. given reason the when over And sort the quarters, banking drag above. its one the something we of we shouldn't putting above, adjustment and - next is the then think still of should account? into see why sort growing about obviously another sort volumes take And for rolling of few term any and NII

offset that the And guidance question to next you of the beginning hike XXXX. what you given said have trying your years. for XX earlier at in have and XX%, to points all year for makes basis think beginning the strategy at your compare just Thanks, XX% that three the I'm returns year? wanted that, plan expectations you to the have X% they margin expectation, me to in I Jonathan's there's that it happen X% rate think the but just to of versus I to obviously, this remember to

Alison Rose

Katie?

Katie Murray

Thanks, and morning. Alvaro Yeah, sure, thanks.

replacing, in is to kind that at year, or the they're would it's it's basis often, little year we we the points five you'll if in up up of basis was two So going compare now the and terms I it see XXX XXX what back whether look coming saw more which book moving because pulled they're low I as clearly but of margins manner that they specifically to back total it's what rather points, actually bit replacing, mean, but of kind a than number, that through. book mortgages

managing good we're it's offset on in of that. volume think record managing I We've really terms around got the what do to to of a NII, that. track

that the the when at was that At was we price might through in actually terms that to we'll base going go point, think cuts. to down. see talk continue I points kind in XX XX%, remember, terms of it to of you back If basis income. to decrease So X% there I small of point, a

year. the in as of is rise rate much comes hike not consensus the until market be terms half it priced we're rates - then very that but moment, will our at base and the second So the for market of into of next through, helpful, end first consensus

bit seeing news, just we're line the the helpful. moment. positivity I the that's So in And in think in market positive a little with general at the

Alvaro Serrano

I can just on have the up quick So follow adjustments. management a

capital think £X.X they've create just gone I unwind in that sort the I we confirm you which it's some means Can still should think be first your believe included Sorry, that not but I to facto that's Thank up of could half. upside could return billion in included you. X de of the - not IFRS to distribution? expectations? have

Katie Murray

Yeah.

we terms to PMA of are that things that we commitments the for Those terms make that's, haven't be So could utilized of coming in impairments. part commitments and pay our PMA had through the assuming today. would in of any

way some you some unwind as on complicated on then capital to you come remember But good it's in the terms distributions I news X, it positivity dividend And so terms in we if to a then piece. based get could But generally of good see news bit remind do if on is so through our income, could additive that works states, attributable that you wasn't, upside. the well. see through. policy IFRS more of I'd think its that,

Alvaro Serrano

much. very you Thank

Katie Murray

Alvaro. Thanks,

Operator

line Thank is you. the Please next comes ahead, Goldman go now at question line Martin Leitgeb from Sachs. open. of And your your

Martin Leitgeb

my Yes, you good taking thank morning, and questions. Thank you. for

of holiday Retail it I on some similar the levels, stamp scope Banking just we so duty to been be UK. in on half prior strength I the basically mortgage of And volumes I compared ask growth and mortgages, to higher Do essentially in houses, see that, prior as volume structural for question credit up about significantly first forth. signs for outlook in front have follow within loading, bigger for the growth leveling mortgage the should And are market, like off. or volume being looking the Firstly, we'd would card. you on a a mean, now half? see levels, looking you lot the How second to this where year mean, trending think the do bigger at

think the And I launched could your cards percent wondering bit up a card was you just how about shed been? balance term? credit medium just think for I near follow a up you has was I the of growth just quick to your volume in you. on a once be at of zero first think how scope an first over XX%. certainly the comments wondering, do if I light, And remember recently. Or take you to one is really on year, time for just around the dividend? upstreaming of the I at you an earlier - when the first dividend. application the also Have made deals complete? I one turn any Thank of - ratio a had of expected quarter

Alison Rose

launch Katie, credit in growth terms been launched. just happy there's And very and the and want you that with pick to very I'll card we We're card up the do of the Thank of mortgages on strong you. touch that. credit new that. the

well above Our volumes significant seeing there. are we're our and plans, growth

with. mortgage So customers, that has which to really happy appealed very And Katie, our volumes? we're

Katie Murray

Yeah, sure, absolutely.

we're of about here. that So in as look the move kind inflation as forward. of the can from volumes. expecting Obviously, ongoing to terms came But at final them comfortable in moving pretty the mortgage stamp of end. an we pretty forward duty see if in assumptions And be kind We're to there's we confident as in robust well. also we're terms economic some still of June our been you price house spike also

we'd a is there. moderate it from peak, it grow still five kind of over They'll had but going still though we've the bit. grow to this So years, little to expect in 'XX

up still positive see do Ulster I'll end moving a dividend we So forward. the question? as that market Alison, pick

Alison Rose

Yeah.

Katie Murray

perfect. Yeah,

capital that if of on What we're would - look haven't we'd that point, wasn't made been we we it's done review. do when at made the terms capital so doing at were Martin. we withdrawal. and think issues they've stage so We strategic Thanks, have complete, didn't But the review see not applications something no, any in we to start any that granted, it we not past strategic were that. we particular applications we So make return. in deals And at the to that, chose we've as any appropriate expecting doing applications. was that as as

Martin Leitgeb

Very clear, you thank very much.

Operator

at And HSBC. open. Please you. comes from Thank your Robin next line question ahead, line the of Down your is go now

Robin Down

the lending, kind is I in basically, going happens few Good the loan are commercial what us in to morning. I non-government to say come now. back with obviously It's of X%, wonder purposes, give give so could pop we Back indication as the margins. correct? of I if of And potentially guess kind can over next just us the of can margin quarters? on just half. the and guess an the you CBILS modeling rolls all next the guarantee of quarters. fall raising to closed models stop, that, wonder you second over Loans, kind side, government I'm the off I given you've as a that so can products lending kind probably of And if margin book? that of of we I But the have our rates. into for indication some guesstimate back guarantee that you the Is the Bounce just guessing, kind

Katie Murray

new mean, as And the years. You the Loans, you X.X%. is terms of Bounce Pay their I so remember, term is to Yeah, extend As in yield customers XX six Grow the Back The option to allows term.

bounced So that's back. on

is rather the benefits because give the more XX% by on guarantee difficult to CBILS, the obviously you from it's that that, XXX% On specifically guarantee. detail but set customer, than

Robin Down

because can't, starting for division, we obviously that it's a the average but would margin be of point? Okay, close that to reasonable kind

Katie Murray

of sense you and deck, Robin. But give sort margins the pricing of sort look look if Thanks, you that'll at of where a it. a we're if XX maybe the - on you Slide of

Operator

line Please of at Rakkar Aman Barclays. go next now question comes ahead, is open. your the Your from line

Alison Rose

Hi, Aman.

Aman Rakkar

Katie. morning good Alison, morning Good

Alison Rose

Good morning.

Katie Murray

Good morning.

Aman Rakkar

most guess I morning. question I two, my Good has may. been had I asked. if of

year might guess performance NatWest given quarter from just for another income, and if ask your Katie, print I expectations Markets. on I one soft another full Just

market for so be that are the billion talked printed think the RWA that that in temporary under £XX.X XXXX. a touch coming off. then you previously I about And obviously ex-notable is RWAs, are of note that And expectations items just your secondly, to are what NatWest interested now. you kind on

I at how just that I you're £XXX I interested there. that the from there's from £XXX off know in be and will books to growth, the could like of actually So billion didn't starting coming guess you would £XX a there sticking you if bit regulatory £XXX with lower headwinds, billion too I'm growth, the you're that the of the get of RWA got be more billion billion be in other you've But it organic at kind given end. sound should good. kind HX. mortgages, much - kind know quantify commercial

that piece to trying RWA bit I'm upside out positive guess whether I there's guidance? of maybe So that, a to

Alison Rose

Katie, do through through Katie, - the got to? want you if that? you can We've we Right, you want to go walk RWAs,

Katie Murray

absolutely. Yeah, sure,

income question take terms me year let of in So first guidance. your the full

lower be expect do we the excluding than notable an So in to income XXXX. items 'XX

due NatWest so half, strong look at the £X.X in a And it's ongoing reshaping say the hard half strong would one to lower the year, exceptionally it's things be of Markets the XXXX. half. you Two in £X.X first first If secondly, reduction, was and billion, down from billion to obviously then that income last it first the is driving back business.

- impact range Markets, about NatWest growth we for XX kind and look in volume might in year, of XXXX to leave structural is million no half have lower think XXXX. which the the retail our commercial for billion £XXX If the the half the what by we to like. look was and the second businesses. offset expect £XXX second income versus of I'll The the you I of to second was hedge, strong be said longer HX

are say would growth fee our that growth and commissions, ex-retail fees and We in targeting And non-recurring activity. quarter together with dependent consumer that, I remember corporate upon you mentioned small this our lending was Banking and is all as there I very Retail well. a

the half. RWAs come wouldn't hedge, year. QX first in year-on-year there's of think the to for know, if half But second million in the hedge just and of You in the majority I move versus the on the now. I that the £XX half, to I second million, decline expect the NIM QX through hedge be is another QX, your the the driver £XXX from a of of to the If probably

the to the of lending what obviously above rate, there's at So growth, think couple first is there, X January market we mix think And grow just expect we to a range - the or bottom is we we the lending RWAs. expect a said number I XXXX. of excluding the below should on end government to to the that going be on of about building be impact clear on of blocks, schemes, guided

been positive. procyclicality, thirdly, the me year. little you've or of which number the is to through think a timing, has this Secondly expect it clearly come still through. And And probably we and go incredibly bit numbers, even of uncertain. fact but where regulation But to in to got which still date low, extent and course, I the just a comes let is

said our XX to that the expect changes the billion, around that So points counterparty standard we by on positive the £XX also we've book model increase I seen, basis some procyclicality CETX. XX% X credit look first weights as mortgage increase we January of mortgage basis points. will for and of January, the equivalent introduced changes other approach PRA expecting including XXX expect We're date at risk around around the to would to absorb risk things about XXXX. RWAs like on before, date to we If to the our growth to

or improved reduction, billion those NatWest Thanks to of And terms £XXX the RWA together, billion. remaining below of of all get Aman. where I Markets £XXX look some of that's so including a outlook, at we if economic - taking to this the range in

Aman Rakkar

you Thank so much.

Katie Murray

Welcome.

Operator

the And from ahead, from question Fahed your Redburn. the open. line line Kunwar go last comes Please now of is

Fahed Kunwar

the slide, also thank on providing one you taking Hi, both. It Slide question, was just that. excellent XX, for Thanks question. for

The less Just gross think about on the number neutral than bps. I XX it is probably and to Basel thought sense effect III III I the the XXXX. Could bit a Basel more a amendments have of on talked would timing from that? on than obviously of be. Basel higher Lloyds

that Just think have target range from the 'XX. before to hold III Thank you XX% of a does Basel capital bps you impact compensate mean the XX% more that onwards? to to or for would And gross XX of 'XX sense you of XXXX that how look to kind bp from plan kind XX you. from about hit than

Katie Murray

Thanks Thanks. Fahed.

XX%, we'll do to a it's kind in. but cover it things hold hold at that to in XX% make continues the on but So it. points, back It moment, date we could see looking Fahed. all timing 'XX the that obviously way it XX work. the sure come in but to small back. And eventually the of certainly it a we that to make relatively Thanks, to in timing working forward than looking does to think space, how these I are to of evolve that is we through, less uncertain would that of terms wouldn't I to look basis impact, anything But designed think comes not be so as built

Fahed Kunwar

Okay, thank you.

Operator

the And to call for Alison no at now back to questions like more this closing I'd time. then comments. hand any

Alison Rose

well with much Thank on look you for on targets, accelerate executing for and performance joining is Thank year, digital progress you very Well, our the investments the your a very our which for for much. clearly continuing much again. resilient good for thank strategy transformation. strong And track to half and and you catching you and questions. so our call up and

Operator

that gentlemen, you today's call. for Thank and will conclude participation. Ladies your

disconnect. now may You

NatWest (NWG) 31 Jul 212021 Q1 Earnings call transcript