Q3 2024 Results

Q3 2024 performance

• Attributable profit of £1,172 million and a return on tangible equity (RoTE) of 18.3%.
• Total income excluding notable items⁽¹⁾ of £3,772 million was £182 million, or 5.1%, higher than Q2 2024 primarily reflecting lending and deposit growth and margin expansion. Net interest margin (NIM) of 2.18% was 8 basis points higher.
• Other operating expenses were £144 million lower than Q2 2024.
• Net impairment charge of £245 million or 25 basis points of gross customer loans. Levels of default remain at low levels across the portfolio.
• Net loans to customers excluding central items increased by £8.4 billion in the quarter, of which £2.3 billion was in relation to the Metro Bank mortgage portfolio acquisition, with strong growth across the three businesses, including a £1.4 billion increase in mortgage balances.
• Customer deposits excluding central items increased by £2.2 billion with growth across all three businesses driven by savings.
• The liquidity coverage ratio (LCR) of 148%, representing £52.7 billion headroom above 100% minimum requirement, decreased by 3 percentage points compared with Q2 2024.
• TNAV per share showed good growth in the quarter as the profit drove a 12 pence increase to 316 pence.
• Common Equity Tier 1 (CET1) ratio of 13.9% was 30 basis points higher than Q2 2024. Capital generation pre distributions was 57 basis points in the quarter and 197 basis points for the year to date. RWAs of £181.7 billion increased by £0.9 billion.

Q3 year to date performance

• Attributable profit of £3,271 million and a RoTE of 17.0%.
• Total income excluding notable items⁽¹⁾ of £10,776 million was £121 million, or 1.1%, lower than prior year. NIM was 2.11% for the year to date.
• Other operating expenses were £140 million higher than the same period of 2023, or £38 million (0.7%) higher excluding costs in relation to a retail share offering⁽²⁾ of £24 million and additional bank levies of £78 million.
• Net impairment charge of £293 million or 10 basis points of gross customer loans and levels of default remain stable for the year to date.
• Net loans to customers excluding central items increased by £8.1 billion reflecting £6.2 billion of growth in Commercial & Institutional and £2.3 billion in respect of the Metro Bank mortgage portfolio acquisition.
• Customer deposits excluding central items increased by £8.3 billion, including £4.0 billion of growth in Retail Banking, £2.0 billion in Private Banking and £2.3 billion in Commercial & Institutional.

(1) Refer to the Non-IFRS financial measures appendix for details of notable items.
(2) Costs incurred preparing for a retail share offering proposed by the previous UK Government, now not expected to proceed.

Outlook⁽¹⁾

We continue to assess the economic outlook and will monitor and react to market conditions and refine our internal forecasts as the economic position evolves. The following statements are based on our current expectations for interest rates and economic activity.

In 2024 we now expect:

• to achieve a return on tangible equity above 15%.
• income excluding notable items to be around £14.4 billion.
• Group operating costs, excluding litigation and conduct costs, to be broadly stable compared with 2023 excluding around £0.1 billion increase in bank levies and £24 million of costs in relation to a retail share offering.
• our loan impairment rate for 2024 to be below 15 basis points.

In 2026 we continue to expect:

• to achieve a return on tangible equity for the Group of greater than 13%.

Capital – we continue to:

• target a CET1 ratio in the range of 13-14%.
• expect RWAs to be around £200 billion at the end of 2025, including the impact of Basel 3.1 on a pro-forma basis. We expect the impact of Basel 3.1 to be an uplift of around £8 billion on 1 January 2026.
• expect to pay ordinary dividends of around 40% of attributable profit and maintain capacity to participate in directed buybacks from the UK Government, recognising that any exercise of this authority would be dependent upon HMT's intentions. We will also consider further on-market buybacks as appropriate.

(1) The guidance, targets, expectations, and trends discussed in this section represent NatWest Group plc management’s current expectations and are subject to change, including as a result of the factors described in the NatWest Group plc Risk Factors section in the 2023 Annual Report and Accounts and Form 20-F and the Summary Risk Factors in the NatWest Group plc Interim Results announcement. These statements constitute forward-looking statements. Refer to Forward-looking statements in this announcement.