NatWest Group (NWG) Q2 2024 Fixed Income earnings summary

Executive summary

• H1 2024 attributable profit was £2.1bn, with operating profit before tax of £3bn and return on tangible equity (ROTE) of 16.4%.

• Income for H1 2024 was £7bn, with costs of £4bn; EPS was 24.2p.

• £1.7bn distributed to shareholders, including a £1.2bn directed buyback and a 6p interim dividend per share, up 9% year-over-year.

• Strategic priorities include disciplined growth, simplification, digital innovation, and dynamic capital/risk management, supported by organic and selective inorganic growth.

• Customer deposits rose by £6.1bn in H1 2024, with over 200,000 new customers attracted.

Financial highlights

• H1 2024 total income was £7,134m, with net interest margin at 2.10% in Q2 and 2.07% for H1; costs were £4bn.

• Return on tangible equity was 16.4% for H1 and 18.5% for Q2.

• Interim dividend of £0.06 per share and £1.2bn directed buyback completed.

• CET1 ratio at 13.6%, total capital ratio 19.5%, leverage ratio 5.2%, and MREL ratio 31.7%.

• Net impairment charge of £48m in H1 2024 (3bps of loans); ECL coverage ratio at 0.86%.

Outlook and guidance

• 2024 income (excluding notable items) expected around £14bn; operating costs broadly stable with 2023, excluding £100m bank levies and £24m retail offer costs.

• Loan impairment rate for 2024 expected below 15bps; ROTE guidance above 14% for 2024 and over 13% for 2026.

• CET1 ratio targeted in the 13-14% range, with capacity for further buybacks.

• Ordinary dividends expected at ~40% of attributable profit.