Q3 2020 Results 30 th October 2020
Alison ison Rose se Chief Executive Officer 2
Q3 2020 results highlights Q3’20 Operating performance Impai airments nts CET1 1 ratio tio Resilient operating £3.1 billion £0.6 billion 18.2% performance Impairment charges as at 9M’20 CET1 Ratio up 100 bps vs Q2’20 Operating profit before impairment in Q3’20 Operating profit before £2.6b 6bn 100b 0bps impairments of £2.7bn for 3.1 18.2 17.2 0.3 9M’20, down £0.5bn £0.4 billion 2.1 0.5 compared to 9M’19 Operating profit before tax in Q3’20 0.8 9M’20 Q2’20 Q3’20 9M’19 Q3’20 impairment charge of Q1’20 Q2’20 Q3’20 £254m down significantly from Q2’20 charge of £2.1bn Q3’20 & 9M’20 Other er expe penses ses Liqui quidi dity Coverag erage ratio tio Attrib tribut utab able prof ofit t / ( (loss) oss) Robust capital position with 157% £4.8 billion £61 million on strong liquidity levels Liquidity Coverage Ratio Q3’20 Other expenses excluding operating Attributable profit in Q3’20, despite loss lease depreciation down £193m vs on redemption of own debt 9M’19 (£0.6 billion) n) 157% 166% (£193 93m) m) 5.0 Attributable loss in 9M’20, driven by Q2’20 Q3’20 4.8 impairment charge of £3.1bn in the period 9M’20 9M’19 3
Purpose-led, long term decision making We champion Strateg egic ic priorit rities ies potential, helping people, families and businesses to thrive Powered red by Building an open and Simpl ple e innov ovatio ation and to deal al inclusive bank where partne rtnersh rships with th everyone can thrive Supp pporti rting g Sharpen rpened ed custo tomers rs at custo tomer r and every ry stage age of capital al allocatio ocation focus us Ambitious targets on their r lives es Enterprise, Learning and Climate 4
Supporting customers at every stage of their lives Retail il Banking Activit ity Supporting the financial health of our Mortgage gross new lending and Credit card spend up 43% on Q2’20 ▪ ▪ Retail customers applications 10% and 91% higher than Q2’20, respectively 85% of mortgage payment holidays, by number, have matured with almost all Debit card spend up 30% on Q2’20 Unsecured balances stable on Q2’20 ▪ ▪ customers having returned to paying as normal. Retail il Banking Paymen ent Holidays ays Mortgage Payment Holidays, £bn Share of book Peak 33.6 c.22% Q2’20 21.3 c.14% 6.2 Q3’20 c.4% 5
Supporting customers at every stage of their lives Commercial ercial Bankin ing Activity ity Supporting the Approved value, £bn NWG Share Drawn financial health of our of approvals 2 balance Q2’20 Q3’20 Commercial customers BBLS 7.9 6.1 1.8 c.20% £7.5bn Total approved Commercial Banking lending under CBILS 0.5 3.7 3.2 government schemes is c.25% £3.1bn £12.8bn, NatWest Group’s 0.5 share of the total is c.22% 2 . CLBILS 1.2 0.7 c.27% £0.6bn Commercial ercial Bankin ing Paymen ent Holidays ys Sectors ors in f focus us for management ment 3 Total Loans 4 , £bn Share Total Loans and advances, £bn Stage 3 of book Coverage c.11% Q2’20 12.9 Q2’20 1.0 26.0 27.0 55% 1. Payment holidays which commenced after the 22nd March and where the moratorium is for 12 months or less; Q2’20 restated lower by c.£1bn to £12.9bn. 2. Of approved schemes, according to Data per HM c.8% Q3’20 9.5 52% Treasury available at 20th September 2020 Q3’20 0.9 27.9 28.8 3. Loans – amortised costs and FVOCI. Management is focused on key sectors affected by COVID-19. Includes: Airlines and aerospace, Land transport and logistics, Leisure, Oil and Gas and Retail sectors - previously included Shipping. Subset of Corporate Stage 3 Loans, see pg 25 of the NatWest Group plc's Q3 IMS 6 4. Total loans to customers (amortised cost)
Simple to deal with Retail Banking Private Banking Attractive industry % of new customers to Private Banking referred from NatWest Group share of personal products positions with capability the wider group 8 to grow c.16% c.21% c.18% c.17% c.10.6% c.6% Over 19 million customers PCA 3 Mortgage Unsecured 4 2018 2019 2020 93% of loans in the UK and Mortgage stock share has increased by c.1% Investment centre of excellence for the ▪ ▪ since 2018 Group – new digital investment platform Republic of Ireland 1 Cautious risk approach to growing serving retail customers ▪ unsecured book Targeting 90% of capital allocated to Retail & Commercial business 2 Commercial Banking NatWest Markets NatWest Group share of commercial products Product share 7 1. As at H1’20 2. Retail & Commercial business refers to Group excluding NatWest Markets. 90% target capital allocation based on £20bn NatWest Markets RWA, majority of which are expected to be achieved by 30% 30% YE21. 16% c.22% 3. Personal Current Account (PCA) share based on CACI 9% 6% as at July 2020. 4. Based off August 2020 Bank of England data BCA 5 Business Loan 5 Government GBP Swaps GBPUSD FX Spot UK DCM 5. Commercial banking statistic is for businesses with Scheme turnover greater than £2m, Savanta MVBB Survey GB Lending 6 Q3 2020. Building new revenue streams in Fixed Income, ▪ Creating new revenue streams via our ▪ 6. Of approved schemes, according to Data per HM Currencies and Capital Markets within NatWest Treasury available at 20 th September 2020 merchant acquiring platform Tyl and payment 7. NWM Plc’s share of total GBP Swaps based on volume Group and a deepening coverage of Commercial platform Payit of risk traded (executed delta), YTD 2020 on customers Tradeweb platform; NWM Plc’s share of total GBPUSD Serving new customers through the ▪ FX Spot based on volume traded Q3 2020 on Lead managed £32.2bn of ESG related capital ▪ Entrepreneur Accelerator programme Bloomberg; UK DCM issuance based on deal volumes markets financing year to date YTD 2020 from Dealogic. 7 8. Current estimate based on January to September referral data
Powered by innovation and partnerships Continue to make Customer mers s increas asing ngly ly engage e with us via digita tal l channels els good progress on simplifying the Digit ital l enga gage gement ment Artif ificia icial l Intell llige igence nce Use of digita ital l tools business and taking c.9k 6 million 9.3 million cost out while Active digital users at Q3’20 u p Interactions with Cora – our AI Weekly video banking investing in new 0.3m compared to Q3’19 levels. Chat bot - across both Personal conversations now taking place 1, and Business customers in 9M’20 compared to less than 100 in technology in order to compared to 3.9m in same period Jan’20. drive efficiency in 9M’19 Powere red d by innova vatio tion n and partner ershi ships s We remain on track to achieve our cost reduction target of £250m for 2020 Payit it BlackRock ock BNP Paribas as Support Private Banking with Execution and clearing of Open Banking solution for investment management listed derivatives. e-commerce payments We continue to expect processing activity, enabling Settlement within 2 hours rs strategic costs to be in the savings to be passed onto our region of £0.8-1bn. clients. 1. Weekly conversation volumes as at week 8 commencing 12 th October 2020
Sharpened customer and capital allocation focus Accelerating refocus of NatWes West t Market ket RWA WAs, £bn NatWest Markets £7.9bn 9bn reduction in Further progress made to RWA achieved in 9 months reshape the business, expected to be capital ratio 38.9 37.9 accretive over the transition 35.1 plan period, focussing on 9.9 9.6 30.0 c.30 what matters most for our 9.1 customers 8.4 Target of £20bn RWAs in the 12.7 12.8 11.2 medium term, with the 9.0 intention to achieve the majority of this reduction by the end of 2021, while 12.2 13.5 12.0 managing the associated 9.8 income disposal losses to 3.3 around £0.6bn over the two 2.8 2.8 2.8 years. Q4’19 Q1’20 Q2’20 Q3’20 2020 target NatWest Markets Plc. 1 CET1 Operational Risk Market Risk 22.3%, LCR 302% Counterparty Credit Risk Credit Risk 1. Figures for the NatWest Markets legal entity. 9
Purpose-led, long term decision making Delivery of our four strategic priorities will Supportin porting g custome omers rs at every ry stage ge of their ir live ves drive sustainable returns over the long term Simpl mple e to deal l with th Powere owered d by innova novation on and d part rtnersh nership ips s Shar arpe pened ned custome omer r and d capital ital all llocation ocation focus Driving iving Sustainable ainable Returns urns 10
Katie ie Murra ray Chief Financial Officer 11
Recommend
More recommend
