Natwest Group Plc · LSE:NWG

Natwest — Q3 2017 Earnings Presentation

15 slides from Natwest's earnings presentation, Oct 27, 2017

  1. Slide 1: Q3 2017 Results

    Q3 2017 Results 27th October 2017

  2. Slide 2: Key messages

    Key messages Q3 attributable profit of £392m; Adjusted ROTE 8.2% Cost, capital and lending targets on track for fourth consecutive year Targeting a bottom line profit in 2018 subject to providing substantially for DoJ investigation into historic RMBS related activities in 2017 Continue to support th

  3. Slide 3: Q3 2017 update on progress

    Q3 2017 update on progress Core Bank Progress  Core adjusted income growth of 5.6% over Q3 2016 (PBB and CPB income + Grow income 3.1% ex one-off gains)  On track to meet 2017 3% lending growth target supported by mortgages  £214m additional costs out in Q3 2017, 9M YTD cost savings vs 2016 are C

  4. Slide 4: Core income growth Q3 2017 vs. Q3 2016

    Core income growth Q3 2017 vs. Q3 2016 Adjusted income (£m) 9M 17 annualised balance sheet growth Underlying movement (1.4%) 2017 target PBB/ CPB 3.0% +5.6% +15% +8% (24%) 3,290 9M 2017 PBB/CPB 3.4% 3,115 £216m £84m £125m UK PBB Mortgages(1) 8.8% UK PBB 10.4% Business Banking(1) UK PBB (1.3)% Unsecu

  5. Slide 5: NIM progression

    NIM progression Net interest margin (‘NIM’), bps Increased liquidity Competitive pressure One-Offs (1) 213 (4) (3) +6 212 Average Q2’17 Q3’17 interest earning 422 431 assets (£bn)  Q3 NIM reduced by 7 basis points with 4 basis points driven by a build up in liquidity and the remainder due to contin

  6. Slide 6: Adjusted operating cost progress to 2017 target

    Adjusted operating cost progress to 2017 target Adjusted Operating Costs(1) (£bn) Cumulative Restructuring Spend (£m) 9M 17 W&G Restructuring ex W&G 8.4 cost reduction 1,034 75 790 58 577 12 ~0.7 959 732 565 7.7 Q1 17 Q2 17 Q3 17 Source of adjusted cost reductions to date 6% 2016 Target 2017: £750m

  7. Slide 7: Progress made on £20bn gross RWA reduction across PBB, CPB and NWM

    Progress made on £20bn gross RWA reduction across PBB, CPB and NWM 9M 2017 change in RWA (£bn) Group RWAs FY 2016 £228.2bn  Group RWAs down by £17.6bn in 9M; Q3 reduction of £4.8bn Core gross RWA reduction (£10.2bn)  Core bank gross RWAs reduced by o/w PBB (£0.5bn) £10.2bn in Q3; On track to achie

  8. Slide 8: Q3 2017 results by business

    Q3 2017 results by business W&G and Capital Resolution will be transferred into Core from 01/10/17 Total Core Franchises Total Other RBS Central Ulster Bank Commercial Private RBS NatWest Total Core Capital (£bn) UK PBB W&G(1) items & Total Other RoI Banking Banking International Markets Franchises

  9. Slide 9: Appendix

    3< RBS Appendix

  10. Slide 10: Notable items

    Notable items (£m) Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Total Income 3,157 3,707 3,212 3,216 3,310 3,000 3,064 Own Credit Adjustments (5) (44) (29) (114) (156) 194 256 Gain/(Loss) on redemption of own debt - (9) 2 1 3 (130) - Strategic disposals - 156 - - (31) 201 (6) o/w Visa Gai

  11. Slide 11: Litigation and conduct

    Litigation and conduct End of 9M 2017 provisions (£m) Comments ~ $3.7bn (2)  RBS continues to cooperate with the DoJ in its civil and criminal investigations of RMBS 2,832 matters, and with investigations by several state attorneys general US RMBS  The duration and outcome of these investigations

  12. Slide 12: Tangible Net Asset Value (TNAV) movements

    Tangible Net Asset Value (TNAV) movements Diluted Shares in issue TNAV per Shares in issue £m £m TNAV per (m) share (m) share Q2 2017 TNAV 35,682 11,876 300 35,682 11,956 298 Profit for the period post tax(1) 610 5p 610 5p Less: profit to NCI / other owners (214) (2p) (214) (2p) Other comprehensive

  13. Slide 13: Continued reduction of Capital Resolution RWAs

    Continued reduction of Capital Resolution RWAs RWAs (£bn) Q3 2017 split of RWAs Portfolio + GTS(1) Alawwal Bank 8% 9% 7% 6% Shipping (32%) 35 Markets £23.1bn Alawwal Bank 31 30% 8 41% Other 26 8 Operational Risk 23 7 Total 7 ~15-20 Disposal spend vs. target 27 Disposal losses incurred 23 20% 19 to d

  14. Slide 14: NPS

    NPS Net Promoter Scores across our core businesses 30 Personal Banking(1) Business Banking(2) Commercial Banking(3) 21 21 22 21 20 20 15 13 13 12 11 10 4 (2) (2) (3) 0 (4) (8) (4) (10) (10) (13) (13) (5) (7) Royal Bank of Scotland (Scotland) NatWest (England & Wales) (21) (12) (20) (20) (14) RBSG (G

  15. Slide 15: Forward Looking Statements

    Forward Looking Statements Cautionary statement regarding 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

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