Natwest Group Plc · LSE:NWG
Natwest — The Royal Bank of Scotland Group — Debt Investor Presentation (July 2015)
24 slides from Natwest's debt investor presentation, Jul 30, 2015
Slide 1: H1 2015 Results Fixed Income Investor Update
H1 2015 Results Fixed Income Investor Update Ewen Stevenson, Chief Financial Officer John Cummins, Treasurer 30 July 2015
Slide 2: Ewen Stevenson, Chief Financial Officer
Ewen Stevenson Chief Financial Officer
Slide 3: Today's presentation: three areas of management focus
Today’s Click to presentation edit Master title style 1. Building a strong Go-Forward Bank 2. Accelerating the run-down of the Exit Bank 3. Addressing outstanding conduct / litigation and further Three areas of strengthening capital / balance sheet resilience management focus H1 / Q2 results demonst
Slide 4: Our Go-Forward Bank: building on our franchise strengths
Our Go-Forward Bank Click to edit Master title style Building on our franchise strengths Franchise Position H1 2015 Illustrative Go-Forward Bank UK £bn (1) Personal Banking #2 RWAs 184 (2) Private Banking #1 Revenues 6.0 (3) (7) Business Banking #1 Adj. costs 3.4 (4) (7) Commercial #1 Adj. RoE 14% (
Slide 5: Good progress against 2015 goals
Good progress against 2015 goals Priorities 2015 Goals H1 Progress RWAs reduced to below £300bn £326bn RCR exit substantially complete Funded assets down 78% since Strength & sustainability initial pool of assets identified(1) Citizens exit Further sell-down priced in late July 2015(2)
Slide 6: Illustrative Go-Forward Bank and Exit Bank profile
Illustrative Go-Forward Bank and Exit Bank profile Illustrative Go-Forward Bank Total Exit Illustrative group overview (pro-forma Exit Bank 2014) (Q2 2015) RBS profile (Q2 2015) CIB Other Total CIB Int’l Go- Capital Other Total Exit (£bn) PBB(1) CPB(2) Go- Go- Citizens RCR W&G(5) Private Investments
Slide 7: Exit Bank: targeting material reduction by Q4 2016
Exit Bank Targeting material reduction by Q4 2016 2015 2016 Further sell-down priced in late Citizens July 2015(1) - Targeting full exit by year end CIB Capital ≥£25bn target RWA reduction Further material RWA reduction Resolution for CIB(2) Wind-down to ≤ 15% of initial Stub merged into
Slide 8: Other issues we need to address
Other issues we need to address Regulatory / accounting Conduct and litigation(1) Capital resilience developments Strengthening capital and Readying the bank for future Dealing with legacy issues reducing balance sheet stress developments volatility Including: Intent to launch inaugural Preparin
Slide 9: US RMBS litigation, Governmental and regulatory investigations
US RMBS litigation, Governmental and regulatory investigations Comments More than 25 lawsuits outstanding involving the issuance of approximately $45bn (original principal balance) of mortgage-backed securities FHFA (Connecticut) - $32bn Civil Litigation NCUA Cases - $3.6bn FHLB Cases - $1.7
Slide 10: Other issues we need to address
Other issues we need to address Regulatory / accounting Conduct and litigation(1) Capital resilience developments Strengthening capital and Readying the bank for future Dealing with legacy issues reducing balance sheet stress developments volatility Including: Intent to launch inaugural Preparin
Slide 11: Improved capital resilience
Improved capital resilience CET1 Capital Ratio: 13% Target Non Performing Loans Pro-forma for full Citizens exit and de-consolidation Risk Elements In Lending (£bn) (40.8% ownership as at 30th June) 15.3% 3.0%(1) 39.4 +670bps -53% 8.6% RCR 24.1 +370bps 18.7 12.3% RCR 7.4 Ex RCR Ex RCR 15.3 11.3 Q4 2
Slide 12: Other issues we need to address
Other issues we need to address Regulatory / accounting Conduct and litigation(1) Capital resilience developments Strengthening capital and Readying the bank for future Dealing with legacy issues reducing balance sheet stress developments volatility Including: Intent to launch inaugural Preparin
Slide 13: John Cummins, Treasurer
John Cummins Treasurer
Slide 14: Funding & liquidity
Funding & liquidity FY 2014 H1 2015 Loan : deposit ratio(1,2) 95% 92% Short-term wholesale funding(1,3) £28bn £25bn Liquidity portfolio £151bn £161bn Liquidity coverage ratio(4) 112% 117% Net stable funding ratio(5) 112% 115% Stressed outflow coverage(6) 186% 215% (1) Includes disposal groups, as pe
Slide 15: Estimated future TLAC requirements
Estimated future TLAC requirements (1) Example of potential total loss absorbing capacity (“TLAC”) requirement for RBS (Assumes Minimum Requirements for Own Funds and Eligible Liabilities (“MREL”) complementary to current TLAC proposals) CET1 Discretionary Buffer Estimated total CET1 G-SIB 1.5% capi
Slide 16: Current assessment of appropriate buffers
Current assessment of appropriate buffers Target CET1 ratio versus maximum distributable amount (“MDA”) trigger, % 13.0 12.3 Illustrative 2.6 headroom to H1 2015 10.4 trigger (1) illustrative headroom to 5.3 1.5 trigger (1) 7.4 2.5 0.4 0.6 (3) (4) 1.9 1.9 10.4 (2) 7.0 G-SIB 4.5 Capital Conservation
Slide 17: Proposed future ICB structure
Proposed future ICB structure (1) RBS Group plc RBS International CIB Ring-Fenced Bank NRFB(2) NRFB(2) Scotland Rest of UK Ireland Royal Bank of NatWest Ulster Bank RoI RBS International RBS plc legal entity(3) Scotland (Scottish Coutts Isle of Man Bank customers) Lombard Adam & Co
Slide 18: Some key regulatory issues
Some key regulatory issues 2015 2016 2017-19 Current January 2016 May 2016 2017 Basel (BCBS) September 2015 Implementation of FPC publish EBA and FPC reviews consultation on Bank of England new Pillar 2 methodology on into leverage ratio interest rate risk in the consultation on MREL framework syste
Slide 19: Today's presentation
Today’s presentation 1. Building a strong Go-Forward Bank 2. Accelerating the run-down of the Exit Bank 3. Addressing outstanding conduct / litigation and further Three areas of strengthening capital / balance sheet resilience management focus H1 / Q2 results demonstrate solid further progress acros
Slide 20: Q&A
Q&A
Slide 21: Appendix
Appendix
Slide 22: RBS Q2 2015 results – P&L
RBS Q2 2015 results – P&L vs. Q1 Q2 2015 vs. Q1 2015 P&L (£m) Q2 2015 2015 (%) Income up 1% Q/Q, benefiting from IFRS volatility Income 4,369 +1% offset by the reduced scale of CIB Operating expenses(1) (2,697) (3%) NIM 2.23%, down 3bps Q/Q reflecting competitive Restructuring costs (1,050) +132
Slide 23: RBS Q2 2015 results – Balance Sheet
RBS Q2 2015 results – Balance Sheet vs. FY14 Q2 2015 vs. FY 2014 (£bn) Q2 2015 FY14 (%) TNAV per share (p) 380p 387p (7p) TNAV of 380p – down 7p from FY 2014 Tangible equity (£bn) 43.9 44.4 (1.0%) RWAs down a further £29.5bn (8%) to Customer balances £326.4bn. On track to be less than £300bn Fun
Slide 24: Forward Looking Statements
Forward Looking Statements Certain sections in this document 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’, ‘should
The Royal Bank of Scotland Group — Debt Investor Presentation (July 2015) on 6ix