NatWest Group (NWG) Q3 2024 earnings summary

Executive summary

• Upgraded full-year guidance reflects strong progress on strategic priorities, with disciplined growth in lending, deposits, and AUMA, and active balance sheet/risk management.

• Customer loans grew by £8.1bn to £367bn, customer deposits increased by £8.3bn to £427bn, and AUMA rose by £5.7bn to £46.5bn.

• Attributable profit for the first nine months was £3.3bn, with Q3 profit at £1,172m and RoTE at 18.3%.

• Share count reduced by 8% in 9M'24, supporting 12% EPS growth year-over-year.

• Government shareholding reduced from 38% to under 16%, progressing toward full exit by 2025/26.

Financial highlights

• Q3 income (excluding notable items) was £3,772m, up 5.1% sequentially and 7.3% year-over-year; operating profit before tax was £1.7bn.

• Net interest margin increased to 2.18% in Q3, up 8bps from Q2, supported by margin expansion and treasury tailwinds.

• EPS was 38p, up 12% year-on-year; tangible net asset value per share rose to 316p.

• CET1 ratio at 13.9% in Q3'24, with 197bps capital generation in 9M'24.

• Loan:deposit ratio at 84%, liquidity coverage ratio at 148–152%, and UK leverage ratio at 5.0%.

Outlook and guidance

• 2024 total income (excluding notable items) expected around £14.4bn, with RoTE guidance upgraded to above 15%.

• Full-year loan impairment rate expected below 15bps; CET1 ratio targeted at 13–14%.

• RWAs expected around £200bn at end-2025, with an £8bn uplift from Basel 3.1 in 2026.

• Group operating costs (excluding litigation/conduct) to be broadly stable versus 2023, with a £0.1bn increase in bank levies and £24m in retail share offer costs.

• Ordinary dividend payout ratio around 40% of attributable profit, with capacity for buybacks.