NatWest Group (NWG) 29th Annual Financials CEO Conference summary

Macroeconomic and operating environment

• UK economic data over the past 8-10 months, including GDP and house prices, has outperformed expectations, supporting positive customer sentiment and activity on both sides of the balance sheet.

• Political clarity and a decisive election have reduced uncertainty, aiding customer support through high inflation and interest rates.

• Strategic priorities remain disciplined growth, simplification, and tight risk/capital management, which have driven positive momentum.

• Small acquisitions and strong risk management have contributed to a solid foundation for future growth.

Financial performance and outlook

• Upgraded 2024 RoTE target to over 14%, with 2026 target at over 13%, reflecting confidence in the business model and recent performance.

• First half RoTE reached 16.4%, driven by delayed rate reductions, deposit growth, and low cost of risk.

• Mortgage and loan demand show green shoots, with expectations of 200bps rate reductions by end-2026 factored into forecasts.

• NIM has improved for two consecutive quarters across all customer businesses, supported by deposit margins and a strong structural hedge.

Lending, growth, and market share

• Mortgage volumes and margins have strengthened, with robust performance in both new and existing books.

• Consumer credit is growing from a low base, with market share expected to reach 10.5% after the Sainsbury’s Bank acquisition.

• Commercial lending shows green shoots, especially in mid-market segments, though large corporates are more active in capital markets.

• Growth will remain disciplined, with no change in risk appetite.