Natwest Group Plc · LSE:NWG
Natwest — Royal Bank of Scotland Group — Barclays Global Financial Services Conference 2014
18 slides from Natwest's conference presentation, Sep 8, 2014
Slide 1: Progress towards building a truly customer-centric bank
Progress towards building a truly customer-centric bank Ewen Stevenson, Chief Financial Officer Barclays Global Financial Services Conference – New York 8th September 2014
Slide 2: Our investment case
Our investment case Market leading customer-centric businesses in attractive markets Attractive returns and distributions deliverable in the medium-term Lower risk, sustainable retail and commercial-based earnings Robust capital, leverage and liquidity positions High level of transparency; will trac
Slide 3: A UK-focused retail and commercial bank
A UK-focused retail and commercial bank Business mix shift towards the UK Clear emphasis on retail and commercial Illustrative split by total income Non-UK UK Illustrative split by RWAs Wholesale2 R&C ~20% ~20% ~15% ~40% ~60% ~50% ~80% ~80% ~85% ~40% ~60% ~50% 2008 H114 Steady state1 2008 H114 Stead
Slide 4: How we define our long-term success
How we define our long-term success FY13 H114 Service 1 1 #1 Net Promoter Score for each of our segments <25% <25% Customers Trust #1 trusted bank in the UK NatWest #4 NatWest #4 RBS #11 RBS #11 Great place to work People 2 Engagement Index ≥ Global Financial Services norm 78% 67% Attractive and con
Slide 5: Good early progress in delivering on our customer-centric ambition
Good early progress in delivering on our customer-centric ambition Stopped teaser rates – best rates offered to new and existing customers Personal account opening reduced from 5 days to 1 day for >90% of customers New individual customers now have access to online banking within 24 hours Continued
Slide 6: Ongoing delivery of our strategic commitments
Ongoing delivery of our strategic commitments Citizens – IPO RCR – running down, 28% TPA reduction achieved in H114 Other legacy securities / asset pools – managing down Wealth International – review completed Dividend Access Share – first payment effected Williams & Glyn – being prepared for 2016 I
Slide 7: An upturn in both the UK and Irish economies is now evident
An upturn in both the UK and Irish economies is now evident GDP growth firmly anchored Unemployment lower Forecast Forecast 110 16 14 Rebased to 100 105 12 100 10 % 8 95 6 4 90 2 85 0 2007 2009 2011 2013 2015 2007 2009 2011 2013 2015 UK Ireland UK Ireland Housing market activity and HPIs increasing
Slide 8: Well positioned to support increasing client activity and to benefit from a rising rate environment
Well positioned to support increasing client activity and to benefit from a rising rate environment 1 Excellent funding profile Continue to attract quality deposit flow, UK demand deposits up 10% Deposits Y/Y Substantial volume of non-interest bearing liabilities; demand 1 1 deposits £81bn , t
Slide 9: Early signs of UK loan growth
Early signs of UK loan growth Mortgages – strong net lending growth with SME – continued positive trend continued market share gains Q214 Y/Y growth in mortgage loans outstanding in PBB UK Applications (‘000s) Gross new lending (£bn) 4% 12% 38% 45.0 2.6 40.0 1.9 1% Q213 Q214 Q213 Q214 RBS Market H
Slide 10: Supportive credit environment, exposure risk remains
Supportive credit environment, exposure risk remains -20% 42.7 1 NPLs, £bn 37.4 34.1 UK: 8.0 Provisions, £bn RBS Capital RoW: 2.1 Coverage, % Resolution 71% 24.2 22.4 (RCR) Ireland: 20.7 10.3 Ulster 4.9 68% 48% 65% 66% Remainder 8.8 54% 2 Peak NPLs Q114 Q214 Good progress in reducing NPLs, down 20
Slide 11: Returns improving, but much more to be done
Returns improving, but much more to be done Personal & Business Commercial & Private Corporate & Institutional Banking Banking Banking 1 RoTE , % +13.7% +5.1% 17.0% Target: ~10% +4.8% 12.9% 7.8% +4.3% 7.0% 4.3% 2.7% 2.2% Target: 12+% Target: 15+% Target: 15+% (1.6%) H113 H114 H113 H114 H113 H114 H11
Slide 12: Good start in making our cost base fitter for purpose
Good start in making our cost base fitter for purpose Operating expenses including bank levy and excluding restructuring and conduct & litigation costs £bn 14.0 >£5bn cost (0.3) reduction ~(3.1) ~(2.2) ~8 Long-term cost:income ratio target: ~50% FY13 Non-repeat of Disposals Targeted Medium- 1 Q413 i
Slide 13: CET1 target ≥12%, well on track
CET1 target ≥12%, well on track CET1 build progressing Excellent progress in de-risking RWAs, £bn +150bps -9% ~30% reduction ≥12% 10.1% c.11% 429 target vs. FY13 392 8.6% 300 FY13 Q214 2015 2016 FY13 Q214 2016 target target target £1.4bn H114 attributable profit contributed 0.4% to capital build
Slide 14: Efficient capital reallocation will underpin returns
Efficient capital reallocation will underpin returns Proportion of RWAs committed to each business, % Corporate & 35% 49% 46% Institutional Banking Commercial & 30% Private Banking 25% 27% Personal & 27% 35% 26% Business Banking 1 FY13 H114 Steady state CIB RWAs down £19bn (13%) in H114; targeting
Slide 15: Litigation and conduct provisions
Litigation and conduct provisions Payment Protection Insurance Interest Rate Hedging Regulatory & Legal Outstanding provision, £m 2,499 (173) 28 2,354 878 (218) 100 760 708 (272) 150 586 Q114 Q214 Q214 Q214 Q114 Q214 Q214 Q214 Q114 Q214 Q214 Q214 total utilisation top-up total utilisation top-up tot
Slide 16: Summary
Summary Early progress encouraging Early progress in making our bank simpler, clearer and fairer for customers Macro upturn now evident – UK and Ireland showing growth Impairments lower, supportive credit environment Geared to a rising rate environment and well positioned for increased activity Cost
Slide 17: Q&A
Q&A
Slide 18: 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’, ‘believes’, ‘s
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