Natwest Group Plc · LSE:NWG

Natwest — The Royal Bank of Scotland Group — Barclays Global Financial Services Conference 2016

15 slides from Natwest's conference presentation, Sep 12, 2016

  1. Slide 1: Delivering a leading bank for customers and investors

    Delivering a leading bank for customers and investors Ewen Stevenson, Chief Financial Officer Barclays Global Financial Services Conference, New York 12th September 2016

  2. Slide 2: Investment case

    Investment case Strong customer-centric core(1) bank, well progressed on legacy restructuring  Strong UK / Irish customer franchises capable of collectively generating risk adjusted returns above the cost of equity Core  Building value through a focus on improved customer service and product offer

  3. Slide 3: Core – customer franchise strength

    Core – customer franchise strength Q2 2016 core key metrics (£bn) RWAs 190 Royal Bank of Scotland Deposits 310 #1 Business (1) Loans 286 Joint #1 Commercial (2) (3) #2 Personal Ulster NatWest (2) #1 Personal (4) Joint #1 Commercial #1 Business (5) #2 Business (1) #3 Commercial(6) #3 Personal (3) Uls

  4. Slide 4: Core – strong franchises with clear strategies

    Core – strong franchises with clear strategies Invest to UK PBB Commercial Banking RBS International Grow RWAs: 20% RWAs: 41% RWAs: 5% (66% of total Adj. cost:income: 58% Adj. cost:income: 59% Adj. cost:income: 35% core RWAs) Adj. ROE: 24% Adj. ROE: 7% Adj. ROE: 16%  Clear customer segment  Accele

  5. Slide 5: Core – stable operating profit with attractive returns

    Core – stable operating profit with attractive returns Adjusted Return on 11% 11% 11% Equity 4.1 Adjusted operating profit (£bn) 1.0 1.0 FY 2015 Q1 2016 Q2 2016 5

  6. Slide 6: Core – NIM decline offset by non-core run-off and growing IEAs

    Core – NIM decline offset by non-core run-off and growing IEAs NIM Interest Earning Assets Core Bank(1) (£bn) (2bps) (5%) 2.32% 2.30% 417 +8bps 396 101 61 2.13% 2.21% Core +6% 316 335 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2 2015 Q2 2016 6 (1) Bank refers to RBS Group as a whole

  7. Slide 7: Core – volume growth achieved across our franchises

    Core – volume growth(1) achieved across our franchises UK PBB Commercial Banking (£bn) +5% (£bn) +9% 126.0 99.2 119.8 91.3 FY 2015 H1 2016 FY 2015 H1 2016 Private Banking RBS International (£bn) +5% (£bn) +16% 11.8 8.5 11.2 7.3 FY 2015 H1 2016 FY 2015 H1 2016 7 (1) Volume growth based on net loans a

  8. Slide 8: Balance sheet – well positioned to support continued growth

    Balance sheet – well positioned to support continued growth Loan : deposit ratio Liquidity coverage ratio Net stable funding ratio 136% 121% 119% 89% 92% 116% FY 2015 H1 2016 FY 2015 H1 2016 FY 2015 H1 2016 8

  9. Slide 9: Operating costs – lowered by >£2.5bn over the last 2.5 years

    Operating costs – lowered by >£2.5bn over the last 2.5 years Reduction in Adjusted Operating Costs from 2013 - H1 2016 (£bn) On target to reduce adjusted operating costs Other reduction 11.9 by £800m in 2016; £404m achieved in H1 (0.4)(1) 2016 (1.1) 10.4 (1.0)(2) 9.4 (0.8)(3) Organic reduction 0.4 8

  10. Slide 10: Legacy – significant reduction of businesses & portfolios

    Legacy – significant reduction of businesses & portfolios Legacy business & portfolios (RWAs) (£bn) (69%) Citizens 176 W&G IPB 68 Capital Resolution Residual 10 2 central items and other 65 4 55 10 (15%) 95 1 10 10 48 42 ~30-35 0 2 3 FY 2014 Q1 2016 Q2 2016 FY 2016 revised Target(1) 10 (1) Capital R

  11. Slide 11: Legacy – Risk Elements in Lending substantially reduced

    Legacy – Risk Elements in Lending substantially reduced Total REILs Ex Capital Resolution REILs by portfolio As at end Q2 2016 As at end Q2 2016 (£bn) (£bn) (% of Gross L&As) (% of Gross L&As within the business key portfolio) 9.4 2.3 UK PBB 1.8% (70%) Ulster 39.4 (9.4%) Commercial Private Banking C

  12. Slide 12: Legacy – key conduct and litigation issues progressively getting resolved or provided for

    Legacy – key conduct and litigation issues progressively getting resolved or provided for Comments US RMBS  $5.6bn existing provision for various litigation claims; may require additional litigation and provisions in future periods, that in aggregate could be material regulatory  This provision do

  13. Slide 13: Investment case

    Investment case Strong customer-centric core bank, well progressed on legacy restructuring  Strong UK / Irish customer franchises capable of collectively generating risk adjusted returns above the cost of equity Core  Building value through a focus on improved customer service and product offering

  14. Slide 14: Q&A

    Q&A

  15. Slide 15: Forward Looking Statements

    Forward Looking Statements Certain sections in this presentation contain ‘forward-looking statements’ as that term is defined in the United States Private Securities Litigation Reform Act of 1995, such as statements that include the words ‘expect’, ‘estimate’, ‘project’, ‘anticipate’, ‘believe’, ‘sh

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