NatWest Group (NWG) Q3 2024 earnings summary

Executive summary

• Delivered strong financial performance in Q3 2024, with 9M'24 RoTE at 17.0% and attributable profit of £3.3bn, supported by disciplined growth in lending, deposits, and AUMA.

• Customer loans rose to £367bn (+£8.1bn vs Dec'23), customer deposits reached £427bn (+£8.3bn), and AUMA increased to £46.5bn (+£5.7bn).

• Acquisition of a £2.3bn prime residential mortgage portfolio from Metro Bank completed, contributing to lending growth.

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

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

Financial highlights

• Total income for Q3 2024 (excluding notable items) was £3,772m, up 5.1% sequentially and 7.3% year-over-year; nine-month income was £10.8bn.

• Operating profit before impairments was £1,919m in Q3 2024; attributable profit for Q3 was £1,172m, and for nine months was £3,271m.

• Return on tangible equity (RoTE) was 17% for the nine months, 18.3% in Q3.

• Net interest margin increased to 2.18% in Q3 2024, up 8bps sequentially.

• CET1 ratio at 13.9% in Q3 2024, with 197bps capital generation in 9M'24.

Outlook and guidance

• 2024 total income (excluding notable items) expected around £14.4bn, assuming UK Base Rate at 4.75% by year-end.

• Upgraded 2024 RoTE guidance to greater than 15%.

• Loan impairment rate for 2024 expected below 15bps.

• CET1 ratio target range remains 13%-14%, with RWAs expected around £200bn at end-2025.

• 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.