Natwest Group Plc · LSE:NWG
Natwest — The Royal Bank of Scotland Group — Goldman Sachs European Financials Conference 2016
17 slides from Natwest's conference presentation, Jun 9, 2016
Slide 1: Building a better bank for customers and shareholders
Building a better bank for customers and shareholders Ewen Stevenson, Chief Financial Officer Goldman Sachs European Financials Conference Paris, 9th June 2016
Slide 2: Investment case
Investment case Core bank delivering sustainable RoEs above CoE – target 12+% Leading customer franchises being re-invigorated by service-led strategy Significant volume growth now being achieved; growing market shares in key segments Legacy issues being progressively addressed Intention to return e
Slide 3: Our business today
Our business today Three distinctly different business needs Core Legacy 48% Q1 2016 RWAs 26% Q1 2016 RWAs 26% Q1 2016 RWAs Invest to grow Reposition for returns Dispose or close UK PBB Ulster Bank Capital Resolution Commercial Banking Private Banking UK Williams & Glyn RBS International CIB 3
Slide 4: Q1 2016 results
Q1 2016 results Total Core Franchises Other RBS Central Ulster Commercial Private RBS Total Core Capital Total (£bn) UK PBB CIB W&G items & Bank RoI Banking Banking International Franchises Resolution Other other(1) Adj. Income(2) 1.3 0.2 0.9 0.2 0.1 0.3 2.8* 0.1 0.2 (0.3) (0.0) 2.8 Adj. Operating e
Slide 5: Balance sheet supports asset growth
Balance sheet supports asset growth Net L&A and Deposits (Q1 2016) (£bn) 355 319 38 41 25 Q1 2016 Total 22 22 Bank LDR 90% 8 PBB + CPB PBB + CPB 120 (ex. RBSI) Q1 2016 PBB + 108 (ex. RBSI) £271bn £248bn Net Deposits CPB (ex. RBSI) L&As LDR 92% 140 151 Net L&A Deposits Other RBS International PBB
Slide 6: Net Promoter Scores – NatWest and Royal Bank of Scotland
Net Promoter Scores – NatWest and Royal Bank of Scotland Royal Bank of Scotland (Scotland) NatWest (England & Wales) RBSG (GB) Personal Banking(1) Business Banking(2) Commercial Banking(3) (10) (20) (30) Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2015 2016 2015 2016 2015 2016 (1) Personal Banking:
Slide 7: Supporting growth – Personal & Business Banking
Supporting growth – Personal & Business Banking UK Personal & Business Banking – Mortgages Gross mortgage lending to Applications (£bn) RBS Q1 2016 market share(1) customers (£bn) +13% +61% 108.0 10.3 11% 96.0 8% 6.4 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Stock share Flow share (1) Based on January and Feb
Slide 8: Mortgages – competing on service, not price
Mortgages – competing on service, not price RBS/ Natwest 60% LTV 2yr Fixed vs. Weighted Average Market Price (“WAMP”) 60% LTV 2 Year Fixed 2.20% 2.15% 2.10% 2.05% 2.00% 1.95% 1.90% 1.85% 1.80% 1.75% RBS/NatWest 2 YR Fixed, LTV 60% WAMP 8
Slide 9: Supporting growth – Commercial Banking
Supporting growth – Commercial Banking Net UK Commercial lending growth Net L&As to customers (£bn)(1) Q1 2016 vs. Q1 2015 growth vs. market 96.4 4.3%(3) 4.0 86.2 6.2 17.5 Commercial real estate 16.7 14.4 Asset and invoice finance 13.9 7.0 2.4% Private sector services 7.4 7.0 Banks & Financial Insti
Slide 10: Lowered costs by >£2bn over the last 2 years
Lowered costs by >£2bn over the last 2 years (£bn) Target to reduce operating costs by a further £800 million in 2016 11.9 Other reduction (0.4)(1) (10%) (1.1) 10.4 (1.0)(2) (9%) Organic 9.4 (0.8)(3) reduction 0.4 8.6 (9%) W&G 1.5 Capital Resolution 0.2 Int’l Private 1.5 CIB Banking Total Core Bank
Slide 11: Balance sheet – resilience
Balance sheet – resilience CET1 Ratio: 13% Target Leverage Ratio REILs (£bn) (as % of Total Gross L&As) 14.6% 5.3% 39.4 (9.4%) +600bps +190bps Cap 3.4% Res (70%) 8.6% 20.3 11.9 Ex (3.6%) Cap 2.2 Res 9.7 19.1 FY 2013 Q1 2016 FY 2013 Q1 2016 FY 2013 Q1 2016 11
Slide 12: Reduction of legacy businesses & portfolios
Reduction of legacy businesses & portfolios Legacy businesses & portfolios (RWAs) (£bn) (64%) 176 Citizens 68 Williams & Glyn 10 International 2 Private Banking 62 4 Capital 1 10 95 Resolution 48 30 (target(1)) FY 2014 Q1 2016 FY 2016 Target(1) (1) Capital Resolution expected to reduce RWAs to aroun
Slide 13: Williams & Glyn
Williams & Glyn Standing up over 600 systems; of which ~400 completed to date including the 15 core platforms Testing of these banking systems expected to commence in late Q3 2016 FY 2015 separation costs of £630m; Q1 2016 £156m(1) Standalone RoE in FY 2015 of 9.8%(2) Exit deadline by end Q4 2017, o
Slide 14: Litigation and conduct
Litigation and conduct End of Q1 2016 provisions (£m) Comments 4,205 US RMBS litigation and investigations May require additional provisions in future periods that in aggregate could be materially in excess of the provisions existing as of Q1 2016 These provisions do not include potential penalt
Slide 15: Investment case
Investment case Core bank delivering sustainable RoEs above CoE – target 12+% Leading customer franchises being re-invigorated by service-led strategy Significant volume growth now being achieved; growing market shares in key segments Legacy issues being progressively addressed Intention to return e
Slide 16: Q&A
Q&A
Slide 17: 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 — Goldman Sachs European Financials Conference 2016 on 6ix