Summary

• NatWest Group is the largest business and commercial bank in the UK, with a leading retail business.
• The group own multiple brans in banking including Royal Bank of Scotland, Ulster Bank, Lombard, RBS International and many more.
• NatWest Group lent a total of £207 billion in mortgages, personal loans and business loans to small and medium sized enterprises (SMEs).

Company Overview

NatWest Group (NYSE:NWG, LSE:NWG) is the largest business and commercial bank in the UK, with a leading retail business. The company serve 19 million customers across the UK.

Recent Developments

NatWest launches Digital Carbon Planner for UK businesses¹

30 Jun 2022; NatWest has launch its Carbon Planner, a free to use digital platform for UK businesses to manage their future fuel and operational costs, and reduce their carbon footprint.

The NatWest Carbon Planner, which will be available from 28 July 2022, is a tailored platform that provides personalised actions to enable customers inputs, enabling them to make decisions as part of their plan when looking to reduce their carbon emissions, while outlining the financial impact of doing so.

Financial Overview

Q1 2022 Results

Total income increased by 16.8% to £3,027 million compared with Q1 2021. Group income was 8.6% higher than Q1 2021 driven by volume growth, principally in its mortgage book, and favourable yield curve movements. NatWest has also seen increased fee income in Retail Banking, as consumer spending levels recover, and higher transactional banking fee income in Commercial & Institutional.²

Bank NIM of 2.46% was 15 basis points higher than Q4 2021 principally reflecting the beneficial impact of recent base rate rises. Mortgage completion margins of 66 basis points decreased from 107 basis points in Q4 2021, and were lower than the back book margin of 158 basis points. Mortgage application margins declined from 67 basis points in Q4 2021 to 44 basis points, reflecting a steep rise in swap rates not fully matched by the increases made to its new business pricing.

Other operating expenses in the Go-forward group were £78 million, or 4.6%, lower than Q1 2021 largely reflecting ongoing cost discipline and some one-off items in the prior period. The company remain on track to achieve its full year cost reduction target of around 3%, although savings will not be linear across the remaining quarters.

Q1 2022 attributable profit of £841 million, and earnings per share of 7.5 pence and a RoTE of 11.3%. Go-forward group net lending increased by £6.7 billion over the quarter including £2.6 billion of mortgage lending growth in Retail Banking and £2.4 billion of growth in Commercial & Institutional. Unsecured balances in Retail Banking continued to grow in the quarter, with increased demand for unsecured lending and increased consumer spending, partly offset by expected seasonal paydowns. Retail Banking gross new mortgage lending was £9.1 billion in the quarter, compared with £8.4 billion in Q4 2021 and £9.6 billion in Q1 2021.

Go-forward group customer deposits increased by £4.2 billion compared with Q4 2021 as a result of treasury repo activity and continued growth across the franchises.

The LCR reduced by 5 percentage points to 167%, representing £83.3 billion headroom above 100% minimum requirement primarily due to an increase in customer lending which outstripped growth in customer deposits, and share buyback. Total wholesale funding decreased by £1 billion in the quarter to £76 billion.

Brands

As a UK banking and financial services company NatWest Group wide range of products and services.³

• NatWest - NatWest serves customers in England and Wales providing personal, private and business banking.
• Royal Bank of Scotland - Royal Bank for Scotland established in Edinburgh in 1727. The bank serves 3.3m personal customers.
• Ulster Bank - Ulster Bank operates both in the Republic of Ireland and Northern Ireland providing personal, small business, private and commercial banking services.
• Coutts - Coutts has a world-renowned reputation for a personal approach to private banking and wealth management.
• Child & Co. - Child & Co. provides personal, private and business banking services to clients in the UK, including many of the UK’s biggest law and accountancy firms.
• Drummonds - Drummonds is one of Britain’s oldest private banks, providing personal, private and business banking services to clients in the UK for over 300 years.
• Holt’s Military Banking - The bank of the British Armed Forces, With a history of service stretching back to 1809.
• Isle of Man Bank - Located in Isle of Man  – providing personal banking products include bank accounts, savings accounts mortgages and more.
• Lombard - The UK’s largest provider of asset finance.
• RBS International - One of the world’s leading offshore banks
• NatWest Markets - Serving corporate and institutional clients.
• FreeAgent - Accounting software for small business owners and freelancers to manage their books and tax.

Geographical Presence

NatWest Group is a UK-centred bank with its headquarters in Edinburgh, Scotland. The group also present in international markets in Europe, Asia and the U.S.⁴

Business Segments

Retail Banking

Through the NatWest and Royal Bank of Scotland brands the company provide a wide range of banking products and related financial services including current accounts, mortgages, personal unsecured lending and personal deposits. We’re here for customers whenever and wherever they need it – from its mobile app and online banking, through to its contact centres and high street and mobile branches⁵

Private Banking

Private Banking includes servicing all client segments across Retail, Premier & Private Banking. The company provide private banking and wealth management services to UK-connected high-net-worth individuals and their business interests through the Coutts & Co brand.

NatWest Markets

The company through NatWest Markets serves corporate and institutional customers.

Commercial Banking

The company offer comprehensive banking and financing solutions to start-up, SME, commercial, corporate and institutional customers in the UK.

RBS International

As one of the largest full-service banks operating in the local and institutional banking sectors in the Channel Islands, Isle of Man and Gibraltar, the company serve international customers with a UK connection through its International Banking proposition. The company operate under six brands: RBS International; NatWest International; Isle of Man Bank; Coutts Crown Dependencies; NatWest Trustee and Depositary Services and RBS International Depositary Services. NatWest has wholesale branches and fund depositary services businesses in the UK and Luxembourg to further serve its institutional clients and investors.

Ulster Bank RoI

Since the end of July 2021 (apart from the UBIDAC asset finance business which remains fully open), commercial banking has been closed to new customers, remaining open for existing customers only. Since the end of October 2021, NatWest has stopped accepting applications from new personal customers, but continue to consider applications on a reduced number of products from existing personal customers, mainly mortgages. The company continue to support its existing customers pending further decisions on the phased withdrawal.

Company History

Each of company's brands has own history.⁶

References

1. ^ https://www.natwestgroup.com/news/2022/06/natwest-launches-digital-carbon-planner-for-uk-businesses.html
2. ^ https://investors.natwestgroup.com/~/media/Files/R/RBS-IR-V2/results-center/29042022/natwest-group-plc-results-q1-2022.pdf
3. ^ https://www.natwestgroup.com/who-we-are/our-brands.html
4. ^ https://www.natwestgroup.com/who-we-are/worldwide-locations.html
5. ^ https://investors.natwestgroup.com/~/media/Files/R/RBS-IR-V2/results-center/18022022/natwest-group-annual-report-accounts-2021.pdf
6. ^ https://www.natwestgroup.com/who-we-are/our-history.html