NatWest Group (NWG) JPMorgan UK Leaders Conference summary

Economic and market environment

• Economic outlook described as one of cautious optimism, with stable base rates and low unemployment despite some volatility in inflation and fiscal policy.

• Retail depositors maintain high savings rates, and consumer confidence remains resilient, supporting strong mortgage and lending activity.

• Corporate clients are adapting to regulatory and budget changes while continuing to invest and grow, reflected in positive business indices.

• Inflation remains slightly above expectations but is trending downward, contributing to overall economic stability.

• The bank continues to review its economic outlook, expecting stability into year-end.

Financial performance and guidance

• Upgraded income guidance to around £16.3 billion for the year, with ROTCE above 18%.

• Broad-based growth across assets, deposits, and AUM, with strong non-interest income, especially from FX and capital markets.

• Structural hedge reinvestment rates have exceeded expectations, supporting NII.

• Guidance for future years will be updated in February, with ongoing focus on cost management and regulatory headwinds.

• Greater than 15% ROTCE remains the target for the outer years.

Net interest income (NII) and balance sheet growth

• Structural hedge expected to add about £1 billion incremental NII next year.

• Lending has grown at over 4% compound annually for seven years, with AUM up 15% this year.

• Rate cuts are expected to reduce income by about £300 million next year.

• Growth, hedge performance, and non-interest income are key drivers for future NII.