NatWest : Pre H1 2024 Consensus

Q2 2024 Consensus Financial Estimates

NatWest Group Investor Relations

17 July 2024

NatWest Group - Q2 2024 Consensus Financial Estimates (Average)

Models as at 17 July 2024

		Quarter			Full year
		Q1'24	Q2'24E		2023	2024E	2025E	2026E
Analysts included in consensus		14			17	17	17
NatWest Group
Group income statement, £m
Net interest income		2,651	2,614		11,049	10,613	11,185	11,879
Non-interest income		824	792		3,703	3,192	3,270	3,366
Total income		3,475	3,407		14,752	13,805	14,454	15,245
Other operating expenses		(2,028)	(1,916)		(7,641)	(7,770)	(7,911)	(8,085)
Litigaton and conduct		(24)	(67)		(355)	(235)	(238)	(228)
Operating expenses		(2,052)	(1,983)		(7,996)	(8,005)	(8,148)	(8,313)
Operating profit before impairment losses		1,423	1,424		6,756	5,800	6,306	6,932
Impairment losses		(93)	(161)		(578)	(637)	(933)	(1,032)
Operating profit/(loss) before tax		1,330	1,262		6,178	5,163	5,373	5,900
Tax (charge)/credit		(339)	(357)		(1,434)	(1,418)	(1,483)	(1,630)
Profit/(loss) for the period for continuing operations		991	905		4,744	3,745	3,890	4,270
Profit/(loss) from discontinued operations, net of tax		(4)	(1)		(112)	(10)	(0)	(0)
Profit/(loss) for the period		987	904		4,632	3,735	3,890	4,270
Attributable to:
Ordinary shareholders		918	843		4,394	3,480	3,633	4,012
Other owners		60	62		242	250	255	256
Non-controlling interests		9	(0)		(4)	5	2	2
Notable items
Notable items in income		61	2		413	59	1	1
Net interest income notable items		0	0		(32)	0	0	0
Non-interest income notable items		61	2		445	59	1	1
Memo: Net interest income excluding notable items		2,651	2,614		11,081	10,613	11,185	11,879
Memo: Non-interest income excluding notable items		763	791		3,258	3,133	3,268	3,365
Memo: Total income excluding all notable items		3,414	3,405		14,339	13,746	14,453	15,244
Notable items in expenses		0	0		0	0	0	0
Memo: Ulster direct costs		(25)	(23)		(275)	(80)	(38)	0

Analysts included in consensus

Group balance sheet and capital, £bn

Net loans to customers (amortised cost)

Group average interest-earning assets (AIEAs)

Total assets

Customer deposits

Customer deposits across the 3 business segments*

Risk-weighted assets

Tangible equity

Average tangible equity (denominator for RoTE)

Number of ordinary shares in issue (m) - period end

Number of ordinary shares in issue (m) - average

Key metrics and ratios

Group net interest margin

Cost:income ratio

Loan impairment rate

Return on tangible equity

Earnings/(loss) per ordinary share (p)

Ordinary DPS (p)

On-market buybacks (£m)

Directed buy-backs (£m)

Total buy-backs (£m)

Tangible net asset value (TNAV) per ordinary share (p)

Common Equity Tier 1 (CET1) ratio - transitional basis

Interest rate expectations

UK base rate (end of period)

UK base rate (average for the period)

Quarter

Q1'24 Q2'24E

14

378.0 380.1

521.1 521.5

697.5 697.9

1. 433.7

420.0 420.9

1. 186.9
2. 25.0

1. 25.5
   8,727 8,284
   8,755 8,489

2.05% 2.01%

58.4% 56.2%

0.10% 0.17%

14.2% 13.4%

10.5p 9.9p

• 5.3p
• 25
• 1,222
• 1,247
  302p 302p

13.5% 13.1%

5.25% 5.19%

5.25% 5.24%

Full year

2023 2024E 2025E 2026E

	17	17	17
381.4	385.0	394.7	404.3
520.6	522.8	533.0	543.9
692.7	700.5	712.5	723.3
431.4	436.2	443.4	450.1
419.1	422.9	429.3	438.2
183.0	190.4	200.1	205.3
25.7	26.5	27.9	29.6
24.7	26.0	27.2	28.8
8,792	8,263	7,910	7,581
9,164	8,475	8,076	7,736
2.12%	2.03%	2.10%	2.18%
51.8%	56.3%	54.7%	53.0%
0.15%	0.16%	0.24%	0.26%
17.8%	13.4%	13.4%	13.9%
47.9p	41.1p	45.0p	51.9p
17.0p	17.1p	17.9p	19.9p
800	129	296	502
1,259	1,233	913	833
2,059	1,362	1,208	1,335
292p	320p	353p	391p
13.4%	13.3%	13.1%	13.3%
5.25%	4.69%	3.81%	3.60%
4.69%	5.07%	4.21%	3.71%

*Customer deposits across the 3 businesses reflect Retail Banking, Private Banking and Commercial and Institutional deposits. Group customer deposits also include Ulster Bank RoI and Treasury.	2

NatWest Group - Q2 2024 Consensus Financial Estimates (High & Low)

Models as at 17 July 2024

		Quarter								Full year
		Q2'24E				2024E				2025E				2026E
Analysts included in consensus		14				17				17				17
NatWest Group	Low	Average	High		Low	Average	High		Low	Average	High		Low	Average	High
Group income statement, £m
Net interest income	2,473	2,614	2,674		10,432	10,613	10,800		10,619	11,185	11,557		11,012	11,879	12,402
Non-interest income	745	792	914		3,056	3,192	3,355		3,109	3,270	3,502		3,167	3,366	3,624
Total income	3,345	3,407	3,458		13,642	13,805	13,952		14,062	14,454	14,838		14,636	15,245	15,863
Other operating expenses	(2,000)	(1,916)	(1,858)		(7,844)	(7,770)	(7,730)		(8,079)	(7,911)	(7,714)		(8,321)	(8,085)	(7,689)
Litigaton and conduct	(101)	(67)	(40)		(302)	(235)	(100)		(315)	(238)	(100)		(300)	(228)	(50)
Operating expenses	(2,088)	(1,983)	(1,910)		(8,105)	(8,005)	(7,849)		(8,329)	(8,148)	(7,964)		(8,571)	(8,313)	(7,939)
Operating profit before impairment losses	1,330	1,424	1,549		5,596	5,800	6,060		6,020	6,306	6,699		6,451	6,932	7,480
Impairment losses	(201)	(161)	(72)		(728)	(637)	(532)		(1,113)	(933)	(654)		(1,177)	(1,032)	(737)
Operating profit/(loss) before tax	1,194	1,262	1,383		4,954	5,163	5,424		5,095	5,373	5,750		5,472	5,900	6,354
Tax (charge)/credit	(412)	(357)	(307)		(1,572)	(1,418)	(1,282)		(1,729)	(1,483)	(1,274)		(1,894)	(1,630)	(1,373)
Profit/(loss) for the period for continuing operations	846	905	1,010		3,517	3,745	3,918		3,646	3,890	4,292		3,984	4,270	4,663
Profit/(loss) from discontinued operations, net of tax	(15)	(1)	4		(75)	(10)	0		(4)	(0)	0		(4)	(0)	0
Profit/(loss) for the period	846	904	1,010		3,513	3,735	3,914		3,646	3,890	4,292		3,984	4,270	4,663
Attributable to:
Ordinary shareholders	787	843	945		3,266	3,480	3,647		3,358	3,633	4,010		3,718	4,012	4,381
Other owners	60	62	70		240	250	283		240	255	306		240	256	306
Non-controlling interests	(11)	(0)	5		(6)	5	22		(6)	2	12		(6)	2	12
Notable items
Notable items in income	0	2	20		0	59	121		0	1	25		0	1	15
Net interest income notable items	0	0	0		0	0	0		0	0	0		0	0	0
Non-interest income notable items	0	2	20		0	59	121		0	1	25		0	1	15
Memo: Net interest income excluding notable items	2,473	2,614	2,674		10,432	10,613	10,800		10,619	11,185	11,557		11,012	11,879	12,402
Memo: Non-interest income excluding notable items	741	791	914		2,995	3,133	3,294		3,109	3,268	3,502		3,167	3,365	3,624
Memo: Total income excluding all notable items	3,325	3,405	3,458		13,521	13,746	13,891		14,062	14,453	14,838		14,636	15,244	15,863
Notable items in expenses	0	0	0		0	0	0		0	0	0		0	0	0
Memo: Ulster direct costs	(25)	(23)	(17)		(100)	(80)	(25)		(100)	(38)	0		0	0	0

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NatWest Group - Q2 2024 Consensus Financial Estimates (High & Low)

Models as at 17 July 2024

		Quarter
		Q2'24E
Analysts included in consensus		14
Group balance sheet and capital, £bn	Low	Average	High
Net loans to customers (amortised cost)	377.0	380.1	387.1
Group average interest-earning assets (AIEAs)	515.0	521.5	527.9
Total assets	694.3	697.9	702.2
Customer deposits	422.7	433.7	447.3
Customer deposits across the 3 business segments*	410.2	420.9	434.5
Risk-weighted assets	185.7	186.9	189.4
Tangible equity	24.4	25.0	26.4
Average tangible equity (denominator for RoTE)	24.4	25.5	26.4
Number of ordinary shares in issue (m) - period end	8,238	8,284	8,372
Number of ordinary shares in issue (m) - average	8,241	8,489	8,685
Key metrics and ratios

2024E

17

Low Average High

378.8 385.0 389.3

517.8 522.8 525.8

689.8 700.5 711.2

1. 436.2 450.5

415.5 422.9 437.7

1. 190.4 193.9

1. 26.5 28.0

25.4 26.0 26.9

7,972 8,263 8,338

8,363 8,475 8,565

Full year

2025E

17

Low Average High

382.1 394.7 402.7

521.9 533.0 539.4

693.5 712.5 729.0

1. 443.4 457.5

419.6 429.3 444.7

1. 200.1 203.2

26.7	27.9	29.3
26.3	27.2	28.6
7,606	7,910	8,313
7,789	8,076	8,317

2026E

17

Low Average High

385.5 404.3 414.1

525.2 543.9 552.1

696.8 723.3 744.8

1. 450.1 466.2

417.8 438.2 461.1

1. 205.3 212.1

27.9 29.6 31.0

27.4 28.8 31.0

7,280 7,581 8,160

7,434 7,736 8,236

Group net interest margin	1.88%	2.01%	2.06%
Cost:income ratio	53.7%	56.2%	58.4%
Loan impairment rate	0.08%	0.17%	0.21%
Return on tangible equity	12.5%	13.4%	14.3%
Earnings/(loss) per ordinary share (p)	9.3p	9.9p	11.3p
Ordinary DPS (p)	4.3p	5.3p	5.8p
On-market buybacks (£m)	-	25	300
Directed buy-backs (£m)	1,000	1,222	1,335
Total buy-backs (£m)	1,000	1,247	1,400
Tangible net asset value (TNAV) per ordinary share (p)	281p	302p	317p
Common Equity Tier 1 (CET1) ratio - transitional basis	12.9%	13.1%	13.2%
Interest rate expectations

1.99%	2.03%	2.06%
55.5%	56.3%	57.0%
0.14%	0.16%	0.19%
12.6%	13.4%	13.9%
38.8p	41.1p	43.5p
16.0p	17.1p	17.7p
-	129	400
1,000	1,233	1,353
1,241	1,362	1,639
312p	320p	339p
13.0%	13.3%	13.5%

2.01%	2.10%	2.20%
53.1%	54.7%	55.9%
0.17%	0.24%	0.29%
12.6%	13.4%	14.9%
41.6p	45.0p	50.6p
16.0p	17.9p	19.4p
-	296	1,400

• 913 1,422
  500 1,208 1,600
  339p 353p 375p

12.9%	13.1%	13.4%

2.04% 2.18% 2.36%

51.5% 53.0% 55.4%

0.18% 0.26% 0.29%

12.5% 13.9% 15.3%

46.9p 51.9p 58.9p

16.5p 19.9p 22.4p

- 502 1,500

• 833 1,550
  500 1,335 1,950
  368p 391p 412p

13.0% 13.3% 13.8%

UK base rate (end of period)	5.00%	5.19%	5.25%
UK base rate (average for the period)	5.17%	5.24%	5.25%

4.50%	4.69%	5.00%
4.97%	5.07%	5.23%

3.00%	3.81%	4.25%		3.00%	3.60%	4.00%
4.00%	4.21%	4.50%		3.50%	3.71%	4.15%

*Customer deposits across the 3 businesses reflect Retail Banking, Private Banking and Commercial and Institutional deposits. Group customer deposits also include Ulster Bank RoI and Treasury.	4

NatWest Group - Q2 2024 Consensus Financial Estimates (High & Low income excluding notable items)

Models as at 17 July 2024

		Quarter
		Q2'24E
Analysts included in consensus		14
Group*	Low	Average	High
Net interest income excluding notable items	2,473	2,614	2,674
Non-interest income excluding notable items	741	791	914
Total income excluding all notable items	3,325	3,405	3,458

2024E

17

Low Average High

10,432 10,613 10,800

2,995 3,133 3,294

13,521 13,746 13,891

	Full year
	2025E				2026E
	17				17
Low	Average	High		Low	Average	High
10,619	11,185	11,557		11,012	11,879	12,402
3,109	3,268	3,502		3,167	3,365	3,624
14,062	14,453	14,838		14,636	15,244	15,863

Analysts included in consensus		12
Retail Banking, Private Banking and Commercial & Institutional combined	Low	Average	High
Net interest income excluding notable items	2,567	2,613	2,672
Non-interest income excluding notable items	738	771	798
Total income excluding all notable items	3,305	3,384	3,458

15

Low Average High

10,412 10,573 10,702

3,028 3,126 3,267

13,439 13,699 13,937

	15				15
Low	Average	High		Low	Average	High
10,619	11,205	11,490		11,012	11,914	12,402
3,109	3,223	3,352		3,167	3,322	3,479
13,971	14,428	14,838		14,486	15,235	15,863

Analysts included in consensus		12
Central items & other	Low	Average	High
Net interest income excluding notable items	(156)	(1)	64
Non-interest income excluding notable items	(33)	20	138
Total income excluding all notable items	(18)	20	83

	15
Low	Average	High
(201)	51	234
(201)	9	150
(62)	60	271

	15				15
Low	Average	High		Low	Average	High
(177)	17	234		(159)	21	234
(140)	53	200		(140)	49	200
0	70	332		0	70	332

*The sum of 'Retail Banking, Private Banking and Commercial & Institutional combined' and 'Central items & other' does not equal 'Group' as not all analysts provide forecasts of business segments

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NatWest Group - Q2 2024 Consensus Financial Estimates

Models as at 17 July 2024

Disclaimer

The consensus information has been calculated using average estimates received from research analysts.

The opinions, estimates, forecasts and recommendations, and the consensus information derived there from, are those of the analysts alone and do not represent opinions, estimates or forecasts of NatWest or its management.

By presenting the consensus information, NatWest does not endorse or concur with any of such analysts' opinions, estimates, forecasts or recommendations. NatWest has not verified any of the information it has received and none of NatWest, its affiliates or their respective directors, officers and employees make any representation or warranty, express or implied, as to, or accept any responsibility for, the accuracy or completeness of the consensus information or otherwise endorse or concur with any of the consensus information.

NatWest does not assume any responsibility to update, revise or supplement any information. This consensus summary is being provided for informational purposes only and is not intended to, nor does it, constitute investment advice or any solicitation to buy, hold or sell securities or other financial instruments.

The NatWest Group Investor Relations Team

Claire Kane	Director of Investor Relations	[phone]	[e-mail]
Nick Gough	Head of Equity Investor Relations	[phone]	[e-mail]
Paul Pybus	Head of Debt Investor Relations	[phone]	[e-mail]
Oliver Sherman	Equity Investor Relations	[phone]	[e-mail]
Andrew MacLean	Equity Investor Relations	[phone]	[e-mail]
Farida Abbasova	Equity Investor Relations	[phone]	[e-mail]

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