REG - Natwest Markets PLC NatWest Markets N.V. - NatWest Markets Plc Q1 Results 2025
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RNS Number : 1511H Natwest Markets PLC 02 May 2025
NatWest Markets Group
Q1 2025
Interim Management Statement
ci.natwest.com
NatWest Markets Group (NWM Group)
Results for Q1 2025
The first quarter of the year saw a dynamic operating environment, with
seasonally strong client activity against a backdrop of heightened uncertainty
in both UK and international markets. We captured opportunities presented by
this environment, leveraged our deep customer relationships, and capitalised
on our key specialist strengths through a connected Commercial &
Institutional segment to support our customers. As a result, we produced a
strong set of results for NWM Group, all underpinned by a disciplined approach
to balance sheet management.
Financial review
NWM Group maintained its robust capital and liquidity position in Q1 2025 and
reported a profit of £59 million, compared with a loss of £40 million in Q4
2024 and a profit of £82 million in Q1 2024. Total income increased to £394
million in Q1 2025 compared with the previous quarter, mainly reflecting
stronger performances across the primary business lines. Operating expenses
decreased in the quarter to £323 million compared with Q4 2024 due to lower
litigation and conduct costs, and other operating expenses, largely driven by
the non-repeat of one-off items in the prior period offset by higher staff
costs.
Financial performance
- Total income of £394 million in Q1 2025 was up by £91 million compared with
£303 million in Q4 2024, mainly due to a stronger performance across primary
business lines and the impact of FX reserves recycling in the prior period,
partially offset by a reduction in the amount recognised under the profit
share arrangement with fellow NatWest Group subsidiaries. Total income was up
by £67 million compared with £327 million in Q1 2024, mainly driven by a
stronger performance in Currencies and Capital Markets, partially offset by a
reduction in the amount recognised under the profit share arrangement with
fellow NatWest Group subsidiaries.
- Operating expenses of £323 million in Q1 2025 were down by £39 million
compared with £362 million in Q4 2024 and up by £68 million compared with
£255 million in Q1 2024. Litigation and conduct costs of £32 million were
down by £9 million compared with £41 million in Q4 2024 and up by £33
million compared with £1 million credit in Q1 2024, reflecting ongoing
progress in closing legacy matters including any associated remediation
activity. Other operating expenses of £291 million were down by £30 million
compared with £321 million in Q4 2024, largely due to the annual bank levy
recognised in the prior period, partially offset by increased staff costs, and
up by £35 million compared with £256 million in Q1 2024, largely driven by
the impact of a credit recognised in relation to property charges in the
comparative period and higher staff costs.
- NWM Group's total assets and liabilities decreased by £2.8 billion and £3.0
billion respectively as at 31 March 2025, compared with 31 December 2024.
Decreases in derivative fair values reflecting FX volatility across major
currencies and variations in interest rates across different currencies and
tenors were largely offset by increases in funded assets including settlement
balances and trading assets.
Capital and leverage
- Total NWM Plc RWAs were £21.7 billion at 31 March 2025, compared with £20.8
billion at 31 December 2024. The increase in the quarter was primarily driven
by higher market risk and an increase from the annual update to operational
risk RWAs.
- NWM Plc's Common Equity Tier 1 (CET1) ratio decreased to 17.2% at 31 March
2025 compared with 18.2% at 31 December 2024, mainly due to the increase in
RWAs.
- Total MREL for NWM Plc at 31 March 2025 was £10.1 billion, or 46.7% of RWAs,
compared with £10.0 billion or 48.2% of RWAs at 31 December 2024. The
increase in total MREL in the quarter was largely due to the issuance of a
£250 million Additional Tier 1 (AT1) instrument to NatWest Group plc.
- NWM Plc's leverage ratio at 31 March 2025 was 5.4%, down slightly compared
with 5.5% at 31 December 2024, reflecting an increase in leverage exposure
driven by increases in trading assets and other financial assets, partially
offset by higher Tier 1 capital, mainly due to the £250 million AT1
instrument issued in the quarter.
Liquidity and funding
- NWM Plc's liquidity portfolio decreased by £1.6 billion to £19.4 billion at
31 March 2025 (31 December 2024 - £21.0 billion), mainly driven by continued
growth in the banking book. The liquidity coverage ratio (LCR) decreased to
167% (31 December 2024 - 195%), driven by the decrease in liquidity portfolio
and higher net outflows.
- NWM Plc issued public benchmark transactions amounting to £2.8 billion in Q1
2025. Transactions comprised €1.0 billion of notes under our Euro Medium
Term Note programme and $2.5 billion of notes under our US Medium Term Note
programme. NWM Plc also raised funding in other formats throughout the quarter
including, but not limited to, structured note issuance.
ESG highlights
Climate and sustainable funding and financing have continued to perform well
and, as at the end of Q1 2025, we had delivered £52.7 billion towards the
NatWest Group climate and sustainable funding and financing target((1)) of
£100 billion between 1 July 2021 and the end of 2025.
(1) NatWest Group uses its climate and sustainable funding and
financing inclusion criteria (CSFFI criteria) to determine the assets,
activities and companies that are eligible to be included within its climate
and sustainable funding and financing target. This includes provision of
committed (on and off-balance sheet) funding and financing, including
provision of services for underwriting issuances and private placements.
Outlook((1))
We retain the Outlook guidance provided in the NatWest Markets Plc 2024 Annual
Report and Accounts.
(1) The guidance, targets, expectations and trends discussed in
this section represent management's current expectations and are subject to
change, including as a result of the factors described in the 'Risk Factors'
section in the NatWest Markets Plc 2024 Annual Report and Accounts. These
statements constitute forward-looking statements. Refer to 'Forward-looking
statements' in this announcement.
Financial review
The table below presents an analysis of key lines of NWM Group's income
statement. Commentary refers to the table below as well as the consolidated
income statement shown on page 6.
Quarter ended
31 March 31 December 31 March
2025 2024 2024
Income statement £m £m £m
Net interest income 124 85 121
Non-interest income 270 218 206
Total income 394 303 327
Litigation and conduct costs (32) (41) 1
Other operating expenses (291) (321) (256)
Operating expenses (323) (362) (255)
Operating profit/(loss) before impairment losses/releases 71 (59) 72
Impairment (losses)/releases (1) - 8
Operating profit/(loss) before tax 70 (59) 80
Tax (charge)/credit (11) 19 2
Profit/(loss) for the period 59 (40) 82
Income (1)
Fixed Income 64 20 63
Currencies 158 146 112
Capital Markets 181 164 165
Capital Management Unit & other (2) 13 (11) -
Income including shared revenue before OCA 416 319 340
Transfer pricing arrangements with fellow NatWest Group subsidiaries (3) (28) (12) (8)
Income excluding OCA 388 307 332
Own credit adjustments (OCA) 6 (4) (5)
Total income 394 303 327
(1) Product performance includes gross income earned on a NatWest
Group-wide basis, including amounts contributed to other NatWest Group
subsidiaries. Income including shared revenue before OCA includes revenue
share from other NatWest Group subsidiaries but before revenue share is paid
to or contributed to those subsidiaries.
(2) Capital Management Unit was set up in Q3 2020 to manage capital
usage and optimisation across all parts of NatWest Markets, with the income
materially relating to legacy positions. In Q4 2024, Other mainly related to
FX reserves recycling.
(3) Transfer pricing arrangements with fellow NatWest Group
subsidiaries includes shared revenue paid to or contributed to those
subsidiaries and a profit share arrangement with fellow NatWest Group
subsidiaries. The profit share arrangement rewards NWM Group on an arm's
length basis for its contribution to the performance of the NatWest Group
Commercial & Institutional business segment. The profit share is not
allocated to individual NatWest Markets product areas.
Q1 2025 performance
- Net interest income largely represents interest income from lending activity
and capital hedges, offset by interest expense from the funding costs of the
business. The increase of £39 million compared with Q4 2024 primarily
reflects higher interest expense from funding of the trading business in the
prior period.
- Non-interest income increased by £52 million compared with Q4 2024, mainly
due to a stronger performance across primary business lines as we successfully
navigated volatile market conditions in Fixed Income and Currencies, in
addition to the impact of FX reserves recycling relating to legacy overseas
operations closure activity in the prior period. This was partially offset by
a decrease of £12 million in the amount recognised under the profit share
arrangement with fellow NatWest Group subsidiaries, where £34 million was
recognised in the current quarter. Non-interest income increased by £64
million compared with Q1 2024, largely driven by higher revenues in Currencies
reflecting increased levels of FX volatility, and Capital Markets, partially
offset by a decrease of £11 million in the amount recognised under the profit
share arrangement with fellow NatWest Group subsidiaries.
- Operating expenses in Q1 2025 decreased by £39 million compared with Q4 2024
and increased by £68 million compared with Q1 2024. Litigation and conduct
costs in Q1 2025 reflected ongoing progress in closing legacy matters,
including any associated remediation activity, and were down by £9 million
compared with Q4 2024 and up by £33 million compared with Q1 2024. Other
operating expenses in Q1 2025 decreased by £30 million compared with Q4 2024,
largely due to the annual bank levy and other administrative expenses
recognised in the prior period, partially offset by higher staff costs. Other
operating expenses increased by £35 million compared with Q1 2024, largely
driven by the impact of a credit in relation to property charges recognised in
the comparative period, and higher staff costs.
Financial review continued
Balance sheet profile as at 31 March 2025
NWM Group's balance sheet profile is summarised below. Commentary refers to
the table below as well as the consolidated balance sheet on page 7.
Assets Liabilities
31 March 31 December 31 March 31 December
2025 2024 2025 2024
£bn £bn £bn £bn
Cash and balances at central banks 16.7 16.2
Securities 20.3 13.9 12.0 10.5 Short positions
Reverse repos (1) 26.1 27.1 32.7 30.6 Repos (2)
Derivative cash collateral posted (3) 6.3 7.3 11.6 12.3 Derivative cash collateral received (4)
Other trading assets 0.5 0.6 1.1 1.1 Other trading liabilities
Total trading assets 53.2 48.9 57.4 54.5 Total trading liabilities
Loans - amortised cost 20.8 19.1 10.4 9.4 Deposits - amortised cost
Settlement balances 9.0 2.0 9.1 1.7 Settlement balances
Amounts due from holding Amounts due to holding company
company and fellow subsidiaries 0.5 0.3 6.6 6.8 and fellow subsidiaries
Other financial assets 17.0 17.9 32.9 31.3 Other financial liabilities
Other assets 0.7 0.7 0.5 0.5 Other liabilities
Funded assets 117.9 105.1 116.9 104.2 Liabilities excluding derivatives
Derivative assets 62.5 78.1 56.3 72.0 Derivative liabilities
Total assets 180.4 183.2 173.2 176.2 Total liabilities
of which:
33.9 32.5 Wholesale funding (5)
15.4 16.8 Short-term wholesale funding (5)
(1) Comprises bank reverse repos of £7.0 billion (31 December 2024 - £5.9
billion) and customer reverse repos of £19.1 billion (31 December 2024 -
£21.2 billion).
(2) Comprises bank repos of £8.6 billion (31 December 2024 - £7.2 billion) and
customer repos of £24.1 billion (31 December 2024 - £23.4 billion).
(3) Comprises derivative cash collateral given relating to banks of £3.1 billion
(31 December 2024 - £3.6 billion) and customers of £3.2 billion (31 December
2024 - £3.7 billion).
(4) Comprises derivative cash collateral received relating to banks of £4.9
billion (31 December 2024 - £5.3 billion) and customers of £6.7 billion (31
December 2024 - £7.0 billion).
(5) Predominantly comprises bank deposits (excluding repos), debt securities in
issue and third party subordinated liabilities, of which short-term wholesale
funding is the amount with contractual maturity of one year or less.
- Total assets and liabilities decreased by £2.8 billion and £3.0 billion
respectively as at 31 March 2025. Decreases in derivative fair values
reflecting FX volatility across major currencies and variations in interest
rates across different currencies and tenors were largely offset by increases
in funded assets including settlement balances and trading assets.
- Trading assets were up by £4.3 billion, driven by an increase in securities
from client-led activity, partially offset by decreases in derivative cash
collateral posted and reverse repos. Trading liabilities increased by £2.9
billion, driven by increases in repos and short positions, partially offset by
a decrease in derivative cash collateral received.
- Loans - amortised cost increased by £1.7 billion, driven by higher loans to
customers reflecting growth in Capital Markets.
- Deposits - amortised cost were up by £1.0 billion, largely driven by an
increase in customer deposits in NWM N.V. in response to planned business
activity.
- Derivative assets and derivative liabilities were down by £15.6 billion and
£15.7 billion respectively at 31 March 2025. The decreases in fair values
largely reflected FX volatility across major currencies including the
weakening of USD in the quarter, following contrasting trends in Q4 2024, and
variations in interest rates across different currencies and tenors.
- Settlement balance assets and liabilities were up by £7.0 billion and £7.4
billion respectively, largely due to increased trading compared with the
seasonally lower levels of customer activity leading up to 31 December 2024.
- Other financial liabilities increased by £1.6 billion, driven by new issuance
in the period, partially offset by maturities. The balance as at 31 March 2025
includes £23.4 billion of medium-term notes issued.
Non-IFRS measures
This document contains a number of non-IFRS measures. For details of the basis
of preparation and reconciliations, where applicable, refer to the non-IFRS
measures section on page 11.
Capital, liquidity and funding risk
Introduction
NWM Group takes a comprehensive approach to the management of capital,
liquidity and funding, underpinned by frameworks, risk appetite and policies,
to manage and mitigate capital, liquidity and funding risks. The framework
ensures the tools and capability are in place to facilitate the management and
mitigation of risk ensuring that NWM Group operates within its regulatory
requirements and risk appetite.
Capital, RWAs and leverage
Capital resources, RWAs and leverage for NWM Plc are set out below and have
been calculated in line with the PRA rulebook, subject to the requirements set
out in the UK CRR. Regulatory capital is monitored and reported at legal
entity level for large subsidiaries of NatWest Group.
31 March 31 December
2025 2024
Capital adequacy ratios (1,2) % %
CET1 17.2 18.2
Tier 1 24.3 24.3
Total 27.5 27.8
Total MREL 46.7 48.2
Capital (1,2) £m £m
CET1 3,743 3,779
Tier 1 5,280 5,067
Total 5,963 5,779
Total MREL (3) 10,130 10,038
Risk-weighted assets
Credit risk 9,066 8,908
Counterparty credit risk 5,722 5,797
Market risk 5,570 5,105
Operational risk 1,347 1,002
Total RWAs 21,705 20,812
(1) NWM Plc's total capital ratio requirement is 11.4%, comprising the minimum
capital requirement of 8%, supplemented with the capital conservation buffer
of 2.5% and the institution specific countercyclical buffer (CCyB) of 0.9%.
The minimum CET1 ratio is 8%, including the minimum capital requirement of
4.5%. The CCyB is based on the weighted average of NWM Plc's geographical
exposures.
(2) NWM Plc is subject to Pillar 2A requirements for CET1, AT1 and Tier 2. Refer
to the NWM Plc Pillar 3 report for further details on these additional capital
requirements.
(3) Includes senior debt instruments issued to NatWest Group plc with a nominal
value of £4.2 billion (31 December 2024 - £4.3 billion).
(4) The IFRS 9 transitional capital rules in respect to ECL provisions no longer
apply as of 1 January 2025.
Leverage
The leverage ratio has been calculated in accordance with the Leverage Ratio
(CRR) part of the PRA rulebook.
31 March 31 December
2025 2024
Tier 1 capital (£m) 5,280 5,067
Leverage exposure (£m) (1) 97,377 92,859
Leverage ratio (%) 5.4 5.5
(1) Leverage exposure is broadly aligned to the accounting value of
on and off-balance sheet exposures albeit subject to specific adjustments for
derivatives, securities financing positions and off-balance sheet exposures.
Liquidity and funding
31 March 31 December
2025 2024
LCR spot (%) (1) 167 195
LCR average (%) (1) 189 192
Liquidity portfolio (£bn) (1) 19.4 21.0
Total wholesale funding (£bn) (2) 33.9 32.5
Total funding including repos (£bn) 95.2 91.4
(1) LCR and Liquidity portfolio measures presented are for NWM Plc.
(2) Predominantly comprises bank deposits (excluding repos), debt
securities in issue and third-party subordinated liabilities.
Condensed consolidated income statement
for the period ended 31 March 2025 (unaudited)
Quarter ended
31 March 31 December 31 March
2025 2024 2024
£m £m £m
Interest receivable 659 665 675
Interest payable (535) (580) (554)
Net interest income 124 85 121
Fees and commissions receivable 127 102 122
Fees and commissions payable (56) (47) (52)
Income from trading activities 192 157 106
Other operating income 7 6 30
Non-interest income 270 218 206
Total income 394 303 327
Staff costs (136) (99) (124)
Premises and equipment (21) (20) (17)
Other administrative expenses (163) (240) (112)
Depreciation and amortisation (3) (3) (2)
Operating expenses (323) (362) (255)
Profit/(loss) before impairment losses/releases 71 (59) 72
Impairment (losses)/releases (1) - 8
Operating profit/(loss) before tax 70 (59) 80
Tax (charge)/credit (11) 19 2
Profit/(loss) for the period 59 (40) 82
Attributable to:
Ordinary shareholders 30 (63) 55
Paid-in-equity holders 29 22 17
Non-controlling interests - 1 10
59 (40) 82
Condensed consolidated statement of comprehensive income
for the period ended 31 March 2025 (unaudited)
Quarter ended
31 March 31 December 31 March
2025 2024 2024
£m £m £m
Profit/(loss) for the period 59 (40) 82
Items that do not qualify for reclassification
Remeasurement of retirement benefit schemes (3) (9) (1)
Changes in fair value of credit in financial liabilities designated at fair
value through
profit or loss (FVTPL) 4 (8) (23)
Fair value through other comprehensive income (FVOCI) financial assets 2 1 2
Tax 5 7 18
8 (9) (4)
Items that do qualify for reclassification
FVOCI financial assets 3 1 8
Cash flow hedges 27 (54) (58)
Currency translation (25) 113 (29)
Tax (12) 16 17
(7) 76 (62)
Other comprehensive income/(loss) after tax 1 67 (66)
Total comprehensive income for the period 60 27 16
Attributable to:
Ordinary shareholders 31 5 (11)
Paid-in equity holders 29 22 17
Non-controlling interests - - 10
60 27 16
Condensed consolidated balance sheet
as at 31 March 2025 (unaudited)
31 March 31 December
2025 2024
£m £m
Assets
Cash and balances at central banks 16,747 16,229
Trading assets 53,246 48,883
Derivatives 62,505 78,105
Settlement balances 9,030 2,043
Loans to banks - amortised cost 1,072 1,171
Loans to customers - amortised cost 19,698 17,921
Amounts due from holding company and fellow subsidiaries 486 343
Other financial assets 17,021 17,850
Other assets 610 621
Total assets 180,415 183,166
Liabilities
Bank deposits 4,496 4,565
Customer deposits 5,940 4,840
Amounts due to holding company and fellow subsidiaries 6,596 6,771
Settlement balances 9,083 1,729
Trading liabilities 57,375 54,512
Derivatives 56,284 72,036
Other financial liabilities 32,876 31,263
Other liabilities 550 521
Total liabilities 173,200 176,237
Owners' equity 7,215 6,929
Non-controlling interests - -
Total equity 7,215 6,929
Total liabilities and equity 180,415 183,166
Condensed consolidated statement of changes in equity
for the period ended 31 March 2025 (unaudited)
Share
capital and Total Non
share Paid-in Retained Other owners' controlling Total
premium equity earnings reserves* equity interests equity
£m £m £m £m £m £m £m
At 1 January 2025 2,346 1,496 3,163 (76) 6,929 - 6,929
Profit attributable to ordinary
shareholders and paid-in equity holders 59 59 - 59
Other comprehensive income
- Changes in fair value of financial liabilities
designated at FVTPL due to changes in credit risk 4 4 4
- Unrealised gains: FVOCI 5 5 5
- Remeasurement of retirement benefit schemes (3) (3) (3)
- Amounts recognised in equity: cash flow hedges (36) (36) (36)
- Foreign exchange reserve movement (25) (25) (25)
- Amounts transferred from equity to earnings 63 63 63
- Tax 2 (9) (7) (7)
Securities issued in the period 250 250 250
Paid-in equity dividends paid (29) (29) (29)
Share-based payments 5 5 5
Merger reserve amortisation (1) 1 - -
At 31 March 2025 2,346 1,746 3,200 (77) 7,215 - 7,215
31 March
2025
Attributable to: £m
Ordinary shareholders 5,469
Paid-in equity holders 1,746
Non-controlling interests -
7,215
*Other reserves consist of:
Merger reserve (10)
FVOCI reserve 31
Cash flow hedging reserve (160)
Foreign exchange reserve 62
(77)
Notes
1. Presentation of condensed consolidated financial statements
The condensed consolidated financial statements should be read in conjunction
with NatWest Markets Plc's 2024 Annual Report and Accounts. The accounting
policies are the same as those applied in the consolidated financial
statements.
The directors have prepared the condensed consolidated financial statements on
a going concern basis after assessing the principal risks, forecasts,
projections and other relevant evidence over the twelve months from the date
they are approved.
2. Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair
value in trading portfolios.
31 March 31 December
2025 2024
£m £m
Assets
Loans
Reverse repos 26,114 27,127
Collateral given 6,278 7,333
Other loans 537 545
Total loans 32,929 35,005
Securities
Central and local government
- UK 3,332 2,077
- US 6,145 3,734
- Other 5,884 3,506
Financial institutions and Corporate 4,956 4,561
Total securities 20,317 13,878
Total 53,246 48,883
Liabilities
Deposits
Repos 32,659 30,562
Collateral received 11,584 12,307
Other deposits 881 895
Total deposits 45,124 43,764
Debt securities in issue 259 257
Short positions 11,992 10,491
Total 57,375 54,512
3. Other financial liabilities
31 March 31 December
2025 2024
£m £m
Customer deposits - designated as at FVTPL 1,752 1,537
Debt securities in issue
- Medium term notes 23,403 21,852
- Commercial paper and certificates of deposit 7,454 7,605
Subordinated liabilities
- Designated as at FVTPL 231 234
- Amortised cost 36 35
Total 32,876 31,263
4. Amounts due to holding company and fellow subsidiaries
31 March 31 December
2025 2024
£m £m
Bank deposits - amortised cost 557 548
Customer deposits - amortised cost 46 43
Trading liabilities 571 613
Other financial liabilities - subordinated liabilities 1,111 1,115
MREL instruments issued to NatWest Group plc 4,234 4,358
Other liabilities 77 94
Total 6,596 6,771
Notes continued
5. Litigation
NatWest Markets Plc's 2024 Annual Report and Accounts, issued on 14 February
2025, included disclosures about NWM Group's litigation and regulatory matters
in Note 25. Set out below are the material developments in those matters (all
of which have been previously disclosed) since publication of the 2024 Annual
Report and Accounts.
FX litigation
NWM Plc, NatWest Markets Securities Inc. and/or NatWest Group plc are
defendants in several cases relating to NWM Plc's foreign exchange (FX)
business. In May 2025, NWM Plc executed an agreement to settle the claim in
the Federal Court of Australia, subject to court approval of that settlement.
The settlement amount is covered in full by an existing provision.
6. Changes to the NWM Board of Directors
In March 2025, Tamsin Rowe was appointed interim Chair of NWM Plc following
the announcement that Frank Dangeard was taking a period of leave for personal
reasons.
In April 2025, it was announced that Frank Dangeard would step down as Chair
of NWM Plc with effect from 23 April 2025.
In April 2025, Rupert Hume Kendall and Thierry Roland were appointed as
Non-Executive Directors of NWM Plc.
7. Post balance sheet events
There have been no significant events between 31 March 2025 and the date of
approval of this announcement that would require a change to or additional
disclosure in the announcement.
Non-IFRS measures
NWM Group prepares its financial statements in accordance with IFRS as issued
by the IASB which constitutes a body of generally accepted accounting
principles (GAAP). This document contains a number of adjusted or alternative
performance measures, also known as non-GAAP or non-IFRS performance measures.
These measures are adjusted for certain items which management believe are not
representative of the underlying performance of the business and which distort
period-on-period comparison. These non-IFRS measures are not measures within
the scope of IFRS and are not a substitute for IFRS measures. These measures
include:
- Management analysis of operating expenses shows litigation and conduct
costs on a separate line. These amounts are included within staff costs and
other administrative expenses in the statutory analysis. Other operating
expenses excludes litigation and conduct costs which are more volatile and may
distort comparisons with prior periods.
- Funded assets are defined as total assets less derivative assets. This
measure allows review of balance sheet trends exclusive of the volatility
associated with derivative fair values.
- Management view of income by business including shared revenue and
before own credit adjustments. This measure is used to show underlying income
generation in NatWest Markets excluding the impact of own credit adjustments.
- Revenue share refers to income generated by NatWest Markets products
from customers that have their primary relationship with other NatWest Group
subsidiaries, a proportion of which is shared between NatWest Markets and
those subsidiaries.
- Transfer Pricing arrangements with fellow NatWest Group subsidiaries
includes revenue share and a profit share arrangement with fellow NatWest
Group subsidiaries. The profit share arrangement rewards NWM Group on an arm's
length basis for its contribution to the performance of the NatWest Group
Commercial & Institutional business segment. The profit share is not
allocated to individual NatWest Markets product areas.
- Own credit adjustments are applied to positions where it is believed
that the counterparties would consider NWM Group's creditworthiness when
pricing trades. The fair value of certain issued debt securities, including
structured notes, is adjusted to reflect the changes in own credit spreads and
the resulting gain or loss recognised in income.
Operating expenses - management view
Quarter ended
31 March 2025
Litigation Other Statutory
and conduct operating operating
costs expenses expenses
£m £m £m
Staff costs 8 128 136
Premises and equipment - 21 21
Other administrative expenses 24 139 163
Depreciation and amortisation - 3 3
Total 32 291 323
Quarter ended
31 December 2024
Litigation Other Statutory
and conduct operating operating
costs expenses expenses
£m £m £m
Staff costs 5 94 99
Premises and equipment - 20 20
Other administrative expenses 36 204 240
Depreciation and amortisation - 3 3
Total 41 321 362
Quarter ended
31 March 2024
Litigation Other Statutory
and conduct operating operating
costs expenses expenses
£m £m £m
Staff costs 6 118 124
Premises and equipment - 17 17
Other administrative expenses (7) 119 112
Depreciation and amortisation - 2 2
Total (1) 256 255
Additional information
Presentation of information
NatWest Markets Plc ('NWM Plc') is a wholly owned subsidiary of NatWest Group
plc or 'the ultimate holding company'. The term 'NWM Group' or 'we' refers to
NWM Plc and its subsidiary and associated undertakings. The term 'NatWest
Group' refers to NatWest Group plc and its subsidiary and associated
undertakings.
NWM Plc publishes its financial statements in pounds sterling ('£' or
'sterling'). The abbreviations '£m' and '£bn' represent millions and
thousands of millions of pounds sterling, respectively, and references to
'pence' or 'p' represent pence in the United Kingdom ('UK'). Reference to
'dollars' or '$' are to United States of America ('US') dollars. The
abbreviations '$m' and '$bn' represent millions and thousands of millions of
dollars, respectively. The abbreviation '€' represents the 'euro', and the
abbreviations '€m' and '€bn' represent millions and thousands of millions
of euros, respectively.
Statutory results
Financial information contained in this document does not constitute statutory
accounts within the meaning of section 434 of the Companies Act 2006 ("the
Act"). The statutory accounts for the year ended 31 December 2024 have been
filed with the Registrar of Companies. The report of the auditor on those
statutory accounts was unqualified, did not draw attention to any matters by
way of emphasis and did not contain a statement under section 498(2) or (3) of
the Act.
Contact
Paul Pybus Investor Relations +44 (0) 7769161183
Forward-looking statements
Cautionary statement regarding forward-looking statements
Certain sections in this document contain 'forward-looking statements' as that
term is defined in the United States Private Securities Litigation Reform Act
of 1995, such as statements with respect to NWM Group's financial condition,
results of operations and business, including its strategic priorities,
financial, investment and capital targets, and ESG targets, commitments and
ambitions described herein. Statements that are not historical facts,
including statements about NatWest Group's beliefs and expectations, are
forward-looking statements. Words such as 'expect', 'estimate', 'project',
'anticipate', 'commit', 'believe', 'should', 'intend', 'will', 'plan',
'could', 'probability', 'risk', 'target', 'goal', 'objective', 'may',
'endeavour', 'outlook', 'optimistic', 'prospects' and similar expressions or
variations on these expressions are intended to identify forward-looking
statements. In particular, this document includes forward-looking targets and
guidance relating to financial performance measures, such as income growth,
operating expense, cost reductions, impairment loss rates, balance sheet
reduction (including the reduction of RWAs), CET1 ratio (and key drivers of
the CET1 ratio, including timing, impact and details), Pillar 2 and other
regulatory buffer requirements and MREL and non-financial performance
measures, such as climate and sustainability-related performance ambitions,
targets and metrics, including in relation to initiatives to transition to a
net zero economy, climate and sustainable funding and financing and financed
emissions.
Limitations inherent to forward-looking statements
These statements are based on current plans, expectations, estimates, targets
and projections, and are subject to significant inherent risks, uncertainties
and other factors, both external and relating to NatWest Group's and NWM
Group's strategy or operations, which may result in NWM Group being unable to
achieve the current plans, expectations, estimates, targets, projections and
other anticipated outcomes expressed or implied by such forward-looking
statements. In addition, certain of these disclosures are dependent on choices
relying on key model characteristics and assumptions and are subject to
various limitations, including assumptions and estimates made by management.
By their nature, certain of these disclosures are only estimates and, as a
result, actual future results, gains or losses could differ materially from
those that have been estimated. Accordingly, undue reliance should not be
placed on these statements. The forward-looking statements contained in this
document speak only as of the date we make them and we expressly disclaim any
obligation or undertaking to update or revise any forward-looking statements
contained herein, whether to reflect any change in our expectations with
regard thereto, any change in events, conditions or circumstances on which any
such statement is based, or otherwise, except to the extent legally required.
Important factors that could affect the actual outcome of the forward-looking
statements
We caution you that a large number of important factors could adversely affect
our results or our ability to implement our strategy, cause us to fail to meet
our targets, predictions, expectations and other anticipated outcomes or
affect the accuracy of forward-looking statements described in this document.
These factors include, but are not limited to, those set forth in the risk
factors and the other uncertainties described in NatWest Markets Plc's 2024
Annual Report and Accounts and its other public filings. The principal risks
and uncertainties that could adversely affect NWM Group's future results, its
financial condition and/or prospects and cause them to be materially different
from what is forecast or expected, include, but are not limited to: economic
and political risk (including in respect of: economic and political risks and
uncertainties in the UK and global markets, including as a result of inflation
and interest rates, supply chain disruption, and geopolitical developments;
changes in interest rates and foreign currency exchange rates; and HM
Treasury's ownership of NatWest Group plc); business change and execution risk
(including in respect of: NatWest Group's strategy and NatWest Group's
creation of its Commercial & Institutional business segment (of which NWM
Group forms part) and the transfer of NatWest Group's Western European
corporate portfolio); financial resilience risk (including in respect of: NWM
Group's ability to meet targets, generate returns or implement its strategy
effectively; prudential regulatory requirements for capital and MREL; NWM
Group's reliance on access to capital markets directly or indirectly through
its parent (NatWest Group); capital, funding and liquidity risk; reductions in
the credit ratings; the competitive environment; the requirements of
regulatory stress tests; counterparty and borrower risk; model risk;
sensitivity to accounting policies, judgments, estimates and assumptions (and
the economic, climate, competitive and other forward looking information
affecting those judgments, estimates and assumptions); changes in applicable
accounting standards; the adequacy of NatWest Group's resolution plans; and
the application of UK statutory stabilisation or resolution powers to NatWest
Group); climate and sustainability risk (including in respect of: risks
relating to climate change and sustainability-related risks; both the
execution and reputational risk relating to NatWest Group's climate
change-related strategy, ambitions, targets and transition plan; climate and
sustainability-related data and model risk; increasing levels of climate,
environmental, human rights and other sustainability-related laws, regulation
and oversight; climate, environmental, human rights and other
sustainability-related litigation, enforcement proceedings, investigations and
conduct risk); operational and IT resilience risk (including in respect of:
operational risks (including reliance on third party suppliers); cyberattacks;
the accuracy and effective use of data; attracting, retaining and developing
senior management and skilled personnel; complex IT systems; NWM Group's risk
management framework; and NWM Group's reputational risk); and legal,
regulatory and conduct risk (including in respect of: the impact of
substantial regulation and oversight; the outcome of legal, regulatory and
governmental actions and investigations as well as remedial undertakings; and
changes in tax legislation or failure to generate future taxable profits).
Forward-looking statements continued
Climate and sustainability-related disclosures
Climate and sustainability-related disclosures in this document are not
measures within the scope of International Financial Reporting Standards
('IFRS'), use a greater number and level of judgments, assumptions and
estimates, including with respect to the classification of climate and
sustainable funding and financing activities, than our reporting of historical
financial information in accordance with IFRS. These judgments, assumptions
and estimates are highly likely to change materially over time, and, when
coupled with the longer time frames used in these disclosures, make any
assessment of materiality inherently uncertain. In addition, our climate risk
analysis, our ambition to be net zero across our financed emissions, assets
under management and operational value chain by 2050 and the implementation of
our climate transition plan remain under development, and the data underlying
our analysis and strategy remain subject to evolution over time. The process
we have adopted to define, gather and report data on our performance on
climate and sustainability-related measures is not subject to the formal
processes adopted for financial reporting in accordance with IFRS and there
are currently limited industry standards or globally recognised established
practices for measuring and defining climate and sustainability-related
metrics. As a result, we expect that certain climate and
sustainability-related disclosures made in this document are likely to be
amended, updated, recalculated or restated in the future. Refer to the
cautionary statement in the section entitled 'Climate and
sustainability-related and other forward-looking statements and metrics' of
the NatWest Group 2024 Sustainability Report published by NatWest Group plc
for the consolidated group, including NatWest Markets Plc.
Cautionary statement regarding Non-IFRS financial measures and APMs
NWM Group prepares its financial statements in accordance with UK-adopted
International Accounting Standards (IAS) and International Financial Reporting
Standards (IFRS). This document may contain financial measures and ratios not
specifically defined under GAAP or IFRS ('Non-IFRS') and/or alternative
performance measures ('APMs') as defined in European Securities and Markets
Authority ('ESMA') guidelines. Non-IFRS measures and APMs are adjusted for
notable and other defined items which management believes are not
representative of the underlying performance of the business and which distort
period-on-period comparison. Non-IFRS measures and APMs provide users of the
financial statements with a consistent basis for comparing business
performance between financial periods and information on elements of
performance that are one-off in nature. Any Non-IFRS measures and/or APMs
included in this document, are not measures within the scope of IFRS, are
based on a number of assumptions that are subject to uncertainties and change,
and are not a substitute for IFRS measures.
The information, statements and opinions contained in this document do not
constitute a public offer under any applicable legislation or an offer to sell
or a solicitation of an offer to buy any securities or financial instruments
or any advice or recommendation with respect to such securities or other
financial instruments.
Legal Entity Identifier: RR3QWICWWIPCS8A4S074
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