Natwest Group Plc · LSE:NWG
Natwest — The Royal Bank of Scotland Group — UBS Global Financial Services Conference 2008
37 slides from Natwest's conference presentation, May 12, 2008
Slide 1: Delivering While De-Levering
Make it happen Delivering While De-Levering Sir Fred Goodwin, Group Chief Executive 12 May 2008
Slide 2: Important Information
Important Information This document does not constitute an offer to sell, or a solicitation of an offer to subscribe for, securities of RBS or any of its affiliates in any jurisdiction or an inducement to enter into investment activity. This document is not a prospectus and investors should not subs
Slide 3: De-Levering
Make it happen De-Levering 12 May 2008
Slide 4: Capital Ratios 2000-07
Capital Ratios 2000-07 % 14 12 10 12.5 11.8 11.7 • Dividend • Acquisition • Dividend • Acquisition 11.2 11.4 growth of Charter growth of ABN 8 15% pa One 25% pa AMRO 6 7.4 7.4 7.3 • AVS • £2.6bn 7.0 • £1bn 6.4 paid out equity buy-back 4 £2.7bn placing in 2006 5.0 4.4 5.0 4.5 2 3.9 0 1H00 FY03 FY04 1
Slide 5: Capital Ratios 2000-07
Capital Ratios 2000-07 20.1 (UK GAAP) 19.9 18.5 (IFRS) ity ity % 14.9 n on E q u Return on Equ 14 Retur 12 10 12.5 11.8 11.7 11.2 11.4 8 6 7.4 7.4 7.3 7.0 6.4 4 5.0 4.4 5.0 4.5 2 3.9 0 1H00 FY03 FY04 1H07 FY07 Core Tier 1 Tier 1 Total Capital 2H07 capital ratios on fully consolidated basis Slide 5
Slide 6: Changed Background
Changed Background The world has changed … • Further deterioration in credit markets • Examples of extreme counterparty liquidity stress • Reduced forecasts for economic growth • Pro-cyclicality of Basel II … so must our target capital ratios • Tier 1 capital between 7.5% and 8.5% • Core Tier 1 capi
Slide 7: Accelerated Capital Rebuild
Accelerated Capital Rebuild Actions £bn Net proceeds of rights issue 12.0 Capital effect of estimated write-downs (4.3) Estimated capital generated by disposals 4.0 Net new capital 11.7 • Estimated write-downs in 2008 £5.9 billion before tax – Estimates based on prudent assumptions • Possible whole
Slide 8: Delivering
Make it happen Delivering 12 May 2008
Slide 9: Contribution by Division
Contribution by Division Pro Forma Underlying £m 2006 2007 Change % Regional Markets – UK Retail & Commercial Banking 5,722 6,250 +9% – US Retail & Commercial Banking 1,821 1,557 -14% – EME Retail & Commercial Banking 662 760 +15% – Asia Retail & Commercial Banking 119 209 +76% Global Markets – Glob
Slide 10: Regional Markets
Make it happen Regional Markets 12 May 2008
Slide 11: UK Retail & Commercial Banking Trading Update
UK Retail & Commercial Banking Trading Update • Strong growth in retail and commercial deposits • Excellent progress in UK Wealth Management • Continued caution on personal unsecured lending • Taking advantage of opportunities in UK mortgages to write good quality business at attractive margins • Re
Slide 12: UK Retail & Commercial Banking: Underlying Income by Product
UK Retail & Commercial Banking Underlying Income by Product Outlook Personal advances excl mortgages 9 Mortgages 99 Personal deposits 99 Bancassurance 99 Business advances 9 Business deposits 99 Other retail 9 Wealth management 99 Commercial + corporate lending 99 Asset finance 9 Invoice finance 9 C
Slide 13: US Retail & Commercial Banking Trading Update
US Retail & Commercial Banking Trading Update • Deposits stable, but pricing competitive • Continue to diversify business – Good growth in commercial banking, cards and investment product sales • Cautious approach to consumer lending • Positive income growth, good cost discipline • Credit quality sa
Slide 14: US Retail & Commercial Banking: Underlying Income by Product
US Retail & Commercial Banking Underlying Income by Product Outlook Personal lending 8 Credit and debit cards 9 Mortgages and home equity 8 Retail deposits 9 Investment products 9 Commercial lending 99 2006 Commercial deposits 2007 9 0 500 1,000 1,500 2,000 2,500 $m Slide 14
Slide 15: Europe and Middle East Retail & Commercial Banking
Europe and Middle East Retail & Commercial Banking 2007 Branches Customers Income 000s Growth Ireland 339 1,773 16% UAE 8 250 24% Romania 22 74 124% Russia 5 24 n/a Kazakhstan 4 55 57% Income growth for 2007 shown in €, customer numbers at 31 December 2007 Excludes European Consumer Finance Ireland
Slide 16: Europe and Middle East Trading Update
Europe and Middle East Retail & Commercial Banking Trading Update • Good growth in profit • Income growth in Ulster Bank moderating in line with slower economic growth in Ireland • Stable credit quality • Good progress in UAE – Record sales of credit cards and personal loans – Continued strong growt
Slide 17: Europe and Middle East: Underlying Income by Product
Europe and Middle East Retail & Commercial Banking Underlying Income by Product Outlook Personal advances excl mortgages 99 Mortgages 99 Personal deposits 9 Business advances 999 Business deposits 99 Capital Markets and other income 99 Eastern Europe + Middle East 2006 2007 99 0 100 200 300 400 500
Slide 18: Asia Retail & Commercial Banking
Asia Retail & Commercial Banking 2007 Branches Customers Income 000s Growth China 13 38 131% Taiwan 17 1,116 20% Hong Kong 5 138 70% India 28 1,396 57% Pakistan 81 226 21% Singapore 5 245 70% Indonesia 20 364 26% Income growth for 2007 shown in $, customer numbers at 31 December 2007 Slide 18
Slide 19: Asia Retail & Commercial Banking Trading Update
Asia Retail & Commercial Banking Trading Update • Strong growth in income and operating profit • RBS Coutts making excellent progress with strong growth in deposits and assets under management • Affluent banking business showing strong momentum, with a doubling of client funds in China within the la
Slide 20: RBS Asia
RBS Asia Pro Forma Underlying Contribution £m 2006 2007 Change % Asia Retail & Commercial Banking 119 209 +76% Global Markets 436 604 +39% Total RBS Asia underlying contribution 555 813 +46% Excludes cost re-charges Slide 20
Slide 21: Global Markets
Make it happen Global Markets 12 May 2008
Slide 22: Global Banking & Markets Transformed Business
Global Banking & Markets Transformed Business 2006 2007/2008 Customers #1 UK, #10 Europe, #1 UK, #1 Europe, #15 US #5 US, #5 Asia Countries 22 52 Products Debt financing, Top tier positions across investor products, risk debt financing, investor management products, risk management. New capabilities
Slide 23: Global Banking & Markets Enhanced Global Franchises
Global Banking & Markets Enhanced Global Franchises Customers Customers Customers Customers UK Europe United States Asia (ex Japan) 1. RBS 1. RBS 1. Bank of America 1. HSBC 2. Barclays 2. BNP Paribas 2. JPMorgan Chase 2. Citi 3. HSBC 3. Deutsche Bank 3. Citi 3. Standard Chartered 4. Lloyds TSB 4. Ci
Slide 24: Global Banking & Markets More Diversified
Global Banking & Markets More Diversified Income by Geography Income by Product Asia-Pacific 12% Portfolio and Credit Markets Asset Management 25% 34% Americas 16% UK 46% Equities 11% Europe + ME 26% Rates, Currencies and Commodities 30% 2007 income on underlying basis Slide 24
Slide 25: Global Banking & Markets Trading Update
Global Banking & Markets Trading Update • Credit markets impacted by market conditions – write-downs, lower volumes • Good performances in rates and currencies • Good progress on realising potential of combination with ABN AMRO – significant number of joint transactions • Formed commodities JV with
Slide 26: Global Banking & Markets: Underlying Income by Product
Global Banking & Markets Underlying Income by Product Outlook Rates 99 Currencies 99 Equities 9 Credit Markets – ABS/CDOs 8 Equity Finance 8 Asset & Portfolio Management 9 2006 Commodities 2007 99 0 500 1,000 1,500 2,000 2,500 3,000 3,500 £m Slide 26
Slide 27: Global Transaction Services Trading Update
Global Transaction Services Trading Update • Successful leverage of combined product strengths and customer franchises to win significant new business – International network and infrastructure – Extending and deepening existing relationships – Few global competitors • Continued expansion of interna
Slide 28: Global Transaction Services: Underlying Income by Product
Global Transaction Services Underlying Income by Product Outlook Domestic Cash 9 International Cash 99 Global trade 99 Merchant Acquiring 99 Commercial Cards 2006 2007 99 0 200 400 600 800 1,000 £m Slide 28
Slide 29: Group Manufacturing
Make it happen Group Manufacturing 12 May 2008
Slide 30: Group Manufacturing
Group Manufacturing Efficient Manufacturing Model Extended Manufacturing Model 300 Degree of Globalisation 2006 2008 250 IT 9 999 200 Group Income Property 99 999 Purchasing 999 999 150 Operations 9 999 100 Manufacturing Costs • One model for Group, across all 50 businesses • Greater scale, leading
Slide 31: Transaction Benefits
Make it happen Transaction Benefits 12 May 2008
Slide 32: Substantial Transaction Benefits
Substantial Transaction Benefits ABN AMRO Businesses Offer Doc Now €m July 2007 Total cost savings 1,319 1,596 Total net revenue benefits 395 688 Total transaction benefits 1,714 2,284 • 2010 transaction benefits represent 16% of 2007 operating profit Slide 32
Slide 33: Achievable Transaction Benefits
Achievable Transaction Benefits ABN AMRO Businesses Underlying U’lying Results 07 €m Results + Full Transaction 2007 Benefits Total income 6,886 8,346 Expenses 5,906 5,120 Impairment losses 338 397 Operating profit 642 2,829 Cost:income ratio 86% 61% Underlying results for ABN AMRO businesses acquir
Slide 34: Conclusion
Make it happen Conclusion 12 May 2008
Slide 35: Well Positioned for Growth
Well Positioned for Growth • Present in 9 of top 10 economies contributing to global GDP growth • Present in economies accounting for 91% of global GDP growth Top 10 Contributors to Global Growth 2007 More More More % Contribution to Total GDP Growth Employees Customers Products China 9 9 9 United S
Slide 36: Well Positioned for Growth
Well Positioned for Growth ‘Enhanced’ • Diversification • Customer franchise • Products • Distribution channels • Risk premium Slide 36
Slide 37: Delivering While De-Levering
Make it happen Delivering While De-Levering Sir Fred Goodwin, Group Chief Executive 12 May 2008
The Royal Bank of Scotland Group — UBS Global Financial Services Conference 2008 on 6ix