Natwest Group Plc · LSE:NWG

Natwest — Q1 2018 Earnings Presentation

15 slides from Natwest's earnings presentation, Apr 27, 2018

  1. Slide 1: Q1 2018 Results

    Q1 2018 Results 27th April 2018

  2. Slide 2: Key messages

    Key messages Q1 2018 pre tax profits £1.2bn, up 70% vs. Q1 2017. Attributable profit of £792m vs. £259m at Q1 2017. ROTE 9.3% Income up, costs down, capital position stronger Total costs down 18% vs. Q1 2017 and C:I ratio down to 61% from 76% Underlying costs down 2% vs. Q1 2017 and vs. Q4 2017 down

  3. Slide 3: Q1 2018 update on progress

    Q1 2018 update on progress 4 priorities Q1 2018 progress  Income up 2.8% vs. Q1 2017 and up 8.0% vs. Q4 2017 Grow income  NIM stable vs. Q4 2017 at 204bps  £0.4bn or 18% operating expenses reduction vs. Q1 2017; Cut costs underlying costs down 2%  RWAs down £2.5bn (ex. Commercial model uplifts)

  4. Slide 4: Costs Q1 2018

    Costs Q1 2018 Operating costs(1) (£m) Cumulative strategic costs (£m) Strategic costs Bank Levy W&G Strategic Cost Target Conduct & Litigation Other Expenses Strategic costs ex. W&G (18%) 3,406 531 2017 1,565 2018 2019 2,453 221 2,399 2,143 764 213 244 577 2,011 342 215 1,034 54 125 209 19 75 790 (2

  5. Slide 5: Q1 2018 JAWS +5%

    Q1 2018 JAWS +5% Q1 2018 JAWS £m Income Costs(1) Q1 18 JAWS +5% 3,302 +2.8% 3,212 1,822 (2.1%) 1,783 Q1 2017 Q1 2018 5 (1) Costs are other costs, not including strategic costs or conduct and litigation costs.

  6. Slide 6: RWA reduction and capital generation

    RWA reduction and capital generation RWAs (£bn) FY 2018 guidance By the end of 2018 Bank RWAs expected to be lower by £5bn - £10bn (vs. FY 2017) 200.9 202.7 4.3 (1.2) (1.3) 191-196 +£2.6bn Market risk (£3.9bn) Underlying reductions FY 2017 Commercial FX Reduction Q1 2018 FY 2018 model uplifts CET1 1

  7. Slide 7: Pensions – Memorandum of Understanding with Main Scheme of Group Pension Fund reached

    Pensions – Memorandum of Understanding with Main Scheme of Group Pension Fund reached (Pre-tax contributions, £bn) 4.2 Annual cap on distribution- linked payments up to £500m before tax, until aggregate contributions of up to £1.5bn have been made 2.0 FY 2016 Q2 2018(1) 2020 2021 2022 and beyond  P

  8. Slide 8: Appendix

    3< RBS Appendix

  9. Slide 9: Net interest margin (NIM) progression – Q1 2018

    Net interest margin (NIM) progression – Q1 2018 Net interest margin (bps) 204 +2 206 (1) (1) 204 Q4 2017 Non-repeat of Q4 2017 Competitive IFRS9 Q1 2018 Q4 one-offs Underlying pressure accounting Average impact interest 431 427 earning (1%) assets (£bn)  Q1 2018 NIM 2.04% – flat vs. Q4 2017 and 2 b

  10. Slide 10: Notable items income and expenses

    Notable items income and expenses (£m) Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Total Income 3,302 3,057 3,157 3,707 3,212 IFRS volatility in Central items (128) (173) 21 172 (18) Property - - - - (105) UK PBB Product Sale 26 9 168 - 8 FX (loss)/gain in Central items (15) (8) (67) (56) (52) Commercia

  11. Slide 11: Q1 2018 results by business

    Q1 2018 results by business Central Ulster Bank Commercial Private RBS NatWest Total (£bn) UK PBB items & RoI Banking Banking International Markets(1) RBS other(2) Income 1.6 0.1 0.9 0.2 0.1 0.4 (0.1) 3.3 Operating expenses (0.8) (0.1) (0.4) (0.1) (0.1) (0.3) (0.1) (2.0) Impairment (losses) / releas

  12. Slide 12: Litigation and conduct

    Litigation and conduct End of Q1 2018 provisions (£m) Comments $4.3bn(1)  Reached settlement with the New York 3,033 Attorney General on its RMBS investigation US RMBS  DOJ: Substantial additional charges and costs may be recognised in the coming quarters  £152m of provisions utilised in the 901

  13. Slide 13: Diluted Tangible Net Asset Value (TNAV) movements

    Diluted Tangible Net Asset Value (TNAV) movements Diluted Diluted Amount Shares in TNAV per Amount Shares in TNAV per (£m) issue (m) share (p) (£m) issue (m) share (p) Q4 2017 TNAV 35,164 11,965 294p 35,164 12,031 292p IFRS day 1 adj (71) (1p) (71) (1p) Profit for the period post tax(1) 884 7p 884 7

  14. Slide 14: Net Promoter Scores across our businesses

    Net Promoter Scores across our businesses Personal Banking(1) Business Banking(2) Commercial Banking(3) NatWest remains stable with continued Continued impact from operating model Remains ahead of main competitors fluctuation for Royal Bank of Scotland changes 30 21 20 21 22 21 21 18 18 20 15 15 13

  15. Slide 15: Disclaimers

    Disclaimers The targets, expectations and trends discussed in this presentation represent management’s current expectations and are subject to change, including as a result of the factors described in the “Risk Factors” on pages 372 to 402 of the Annual Report and Accounts 2017. Cautionary statement

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