REG - NatWest Group plc - NatWest Group plc Interim Results 2025 - Part 2
25/07/2025 07:00
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RNS Number : 5192S NatWest Group plc 25 July 2025
Condensed consolidated income statement
for the period ended 30 June 2025 (unaudited)
Half year ended
30 June 30 June
2025 2024
£m £m
Interest receivable 12,673 12,290
Interest payable (6,553) (6,882)
Net interest income 6,120 5,408
Fees and commissions receivable 1,608 1,567
Fees and commissions payable (368) (348)
Trading income 575 350
Other operating income 50 157
Non-interest income 1,865 1,726
Total income 7,985 7,134
Staff costs (2,129) (2,147)
Premises and equipment (587) (579)
Other administrative expenses (745) (823)
Depreciation and amortisation (557) (508)
Operating expenses (4,018) (4,057)
Profit before impairment losses 3,967 3,077
Impairment losses (382) (48)
Operating profit before tax 3,585 3,029
Tax charge (910) (801)
Profit from continuing operations 2,675 2,228
Profit from discontinued operations, net of tax - 11
Profit for the period 2,675 2,239
Attributable to:
Ordinary shareholders 2,488 2,099
Paid-in equity holders 186 129
Non-controlling interests 1 11
2,675 2,239
Earnings per ordinary share - continuing operations 30.9p 24.1p
Earnings per ordinary share - discontinued operations - 0.1p
Total earnings per share attributable to ordinary shareholders - basic 30.9p 24.2p
Earnings per ordinary share - fully diluted continuing operations 30.5p 23.9p
Earnings per ordinary share - fully diluted discontinued operations - 0.1p
Total earnings per share attributable to ordinary shareholders - fully diluted 30.5p 24.0p
Condensed consolidated statement of comprehensive income
for the period ended 30 June 2025 (unaudited)
Half year ended
30 June 30 June
2025 2024
£m £m
Profit for the period 2,675 2,239
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of retirement benefit schemes 9 (60)
Changes in fair value of financial liabilities designated at fair value (1) (26)
through profit or loss (FVTPL) due to changes in credit risk
Fair value through other comprehensive income (FVOCI) financial assets 49 (33)
Tax (2) 44
55 (75)
Items that will be reclassified subsequently to profit or loss when specific
conditions are met:
FVOCI financial assets 63 41
Cash flow hedges (1) 658 121
Currency translation (95) (42)
Tax (192) (57)
434 63
Other comprehensive income/(losses) after tax 489 (12)
Total comprehensive income for the period 3,164 2,227
Attributable to:
Ordinary shareholders 2,977 2,087
Paid-in equity holders 186 129
Non-controlling interests 1 11
3,164 2,227
(1) Refer to footnote 2 of the condensed consolidated statement of
changes in equity.
Condensed consolidated balance sheet
as at 30 June 2025 (unaudited)
30 June 31 December
2025 2024
£m £m
Assets
Cash and balances at central banks 90,706 92,994
Trading assets 56,706 48,917
Derivatives 73,010 78,406
Settlement balances 8,214 2,085
Loans to banks - amortised cost 7,378 6,030
Loans to customers - amortised cost 407,135 400,326
Other financial assets 71,792 63,243
Intangible assets 7,513 7,588
Other assets 8,324 8,396
Total assets 730,778 707,985
Liabilities
Bank deposits 38,148 31,452
Customer deposits 436,756 433,490
Settlement balances 9,546 1,729
Trading liabilities 58,845 54,714
Derivatives 65,983 72,082
Other financial liabilities 65,940 61,087
Subordinated liabilities 6,006 6,136
Notes in circulation 3,287 3,316
Other liabilities 4,291 4,601
Total liabilities 688,802 668,607
Equity
Ordinary shareholders' interests 35,929 34,070
Other owners' interests 6,029 5,280
Owners' equity 41,958 39,350
Non-controlling interests 18 28
Total equity 41,976 39,378
Total liabilities and equity 730,778 707,985
Condensed consolidated statement of changes in equity
for the period ended 30 June 2025 (unaudited)
Share Other Other reserves Total Non
capital and Paid-in statutory Retained Fair Cash flow Foreign owners' controlling Total
share premium equity reserves (1) earnings value hedging (2,3) exchange Merger equity interests equity
£m £m £m £m £m £m £m £m £m £m £m
At 1 January 2025 10,133 5,280 2,350 11,426 (103) (1,443) 826 10,881 39,350 28 39,378
Profit attributable to ordinary shareholders
and other equity owners
- continuing operations 2,674 2,674 1 2,675
- discontinued operations - - - -
Other comprehensive income
Realised losses in period on FVOCI equity shares (2) 2 - -
Remeasurement of retirement benefit schemes 9 9 9
Changes in fair value of credit in financial liabilities
designated at FVTPL due to own credit risk (1) (1) (1)
Unrealised gains 116 116 116
Amounts recognised in equity 102 102 102
Retranslation of net assets (55) (55) (55)
Losses on hedges of net assets (40) (40) (40)
Amount transferred from equity to earnings (3) (4) 556 - 552 552
Tax (2) (19) (186) 13 (194) (194)
Total comprehensive income/(losses) 2,678 95 472 (82) - 3,163 1 3,164
Transactions with owners
Ordinary share dividends paid (1,250) (1,250) - (1,250)
Paid in equity dividends (186) (186) (186)
Securities issued (4) 749 749 749
Purchase of non-controlling interest (10) (10) (11) (21)
Shares repurchased during the period - - - - -
Employee share schemes 32 32 32
Shares vested under employee share schemes 121 121 121
Share-based remuneration (11) (11) (11)
At 30 June 2025 10,133 6,029 2,471 12,679 (8) (971) 744 10,881 41,958 18 41,976
For the notes to this table, refer to the following page.
Condensed consolidated statement of changes in equity for the period ended 30
June 2025 (unaudited) continued
Share Other Other reserves Total Non
capital and Paid-in statutory Retained Fair Cash flow Foreign owners' controlling Total
share premium equity reserves (1) earnings value hedging (2,3) exchange Merger equity interests equity
£m £m £m £m £m £m £m £m £m £m £m
At 1 January 2024 10,844 3,890 2,004 10,645 (49) (1,899) 841 10,881 37,157 31 37,188
Profit attributable to ordinary shareholders
and other equity owners
- continuing operations 2,217 2,217 11 2,228
- discontinued operations 11 11 - 11
Other comprehensive income
Realised gains in period on FVOCI equity shares 2 (2) - -
Remeasurement of retirement benefit schemes (60) (60) (60)
Changes in fair value of credit in financial liabilities
designated at FVTPL due to own credit risk (26) (26) (26)
Unrealised gains 1 1 1
Amounts recognised in equity (559) (559) (559)
Retranslation of net assets (118) (118) (118)
Gains on hedges of net assets 79 79 79
Amount transferred from equity to earnings (3) 7 680 (3) 684 684
Tax 32 - (34) (11) (13) (13)
Total comprehensive income/(losses) 2,176 6 87 (53) - 2,216 11 2,227
Transactions with owners
Ordinary share dividends paid (1,008) (1,008) - (1,008)
Paid in equity dividends (129) (129) (129)
Securities issued (4) 800 800 800
Purchase of non-controlling interest - - -
Shares repurchased during the period (5,6) (411) 411 (1,118) (1,118) (1,118)
Employee share schemes (8) (8) (8)
Shares vested under employee share schemes 128 128 128
Share-based remuneration 23 23 23
Own shares acquired (540) (540) (540)
At 30 June 2024 10,433 4,690 2,003 10,581 (43) (1,812) 788 10,881 37,521 42 37,563
(1) Other statutory reserves consist of Capital redemption reserves of £3,218
million (2024 - £2,918 million) and Own shares held reserves of £747 million
(2024 - £915 million).
(2) The change in the cash flow hedging reserve is driven by realised accrued
interest transferred to the income statement and a decrease in swap rates in
the longer tenors in the year, where the portfolio of swaps are net receive
fixed from an interest rate risk perspective.
(3) The amount transferred from equity to the income statement is mostly recorded
within net interest income mainly within loans to banks and customers -
amortised cost, balances at central banks, bank deposits and customer
deposits.
(4) The issuance above is after netting of issuance fees of £1.6 million, and the
associated tax credit of £0.4 million.
(5) As part of the Share Buyback Programmes NatWest Group plc repurchased and
cancelled 161.9 million shares in 2024. The total consideration of these
shares excluding fees was £410.8 million. Included in the retained earnings
reserve movement is 2.3 million shares which were repurchased and cancelled in
December 2023, settled in January 2024 for a total consideration of £4.9
million. The nominal value of the share cancellations was transferred to the
capital redemption reserve. There were no Buyback programmes in 2025.
(6) In June 2024, there was an agreement to buy 392.4 million ordinary shares of
the Company from His Majesty's Treasury (HM Treasury) at 316.2 pence per share
for total consideration of £1.2 billion. NatWest Group cancelled 222.4
million of the purchased ordinary shares, amounting to £706.9 million
excluding fees and held the remaining 170.0 million shares as Own Shares Held,
amounting to £540.2 million excluding fees. The nominal value of the share
cancellation was transferred to the capital redemption reserve. There were no
repurchases in 2025.
Condensed consolidated cash flow statement
for the period ended 30 June 2025 (unaudited)
Half year ended
30 June 30 June
2025 2024
£m £m
Cash flows from operating activities
Operating profit before tax from continuing operations 3,585 3,029
Operating profit before tax from discontinued operations - 11
Adjustments for non-cash and other items 350 2,284
Net cash flows from trading activities 3,935 5,324
Changes in operating assets and liabilities 2,088 9,625
Net cash flows from operating activities before tax 6,023 14,949
Income taxes paid (906) (877)
Net cash flows from operating activities 5,117 14,072
Net cash flows from investing activities (7,896) (1,524)
Net cash flows from financing activities 418 (2,350)
Effects of exchange rate changes on cash and cash equivalents 391 (778)
Net (decrease)/increase in cash and cash equivalents (1,970) 9,420
Cash and cash equivalents at beginning of period 104,845 118,824
Cash and cash equivalents at end of period 102,875 128,244
Notes
1. Presentation of condensed consolidated financial statements
The condensed consolidated financial statements should be read in conjunction
with NatWest Group 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 and in accordance with IAS 34 Interim Financial Reporting,
as adopted by the UK and as issued by the International Accounting Standards
Board (IASB), and the Disclosure Guidance and Transparency Rules sourcebook of
the UK's Financial Conduct Authority.
2. Net interest income
Half year ended
30 June 30 June
2025 2024
Continuing operations £m £m
Balances at central banks and loans to banks - amortised cost 1,769 2,070
Loans to customers - amortised cost 9,412 8,924
Other financial assets 1,492 1,296
Interest receivable 12,673 12,290
Bank deposits 854 695
Customer deposits 3,918 4,151
Other financial liabilities 1,579 1,799
Subordinated liabilities 202 237
Interest payable 6,553 6,882
Net interest income 6,120 5,408
Notes continued
3. Non-interest income
Half year ended
30 June 30 June
2025 2024
Continuing operations £m £m
Net fees and commissions (1) 1,240 1,219
Foreign exchange 232 140
Interest rate (2) 281 298
Credit 57 (82)
Changes in fair value of own debt and derivative liabilities attributable to 3 (7)
own credit risk - debt securities in issue
Equities, commodities and other 2 1
Income from trading activities 575 350
Rental income on operating lease assets and investment property 108 116
Changes in fair value of financial assets and liabilities designated at (85) (43)
FVTPL (3)
Changes in fair value of other financial assets and liabilities designated at 22 58
FVTPL
Hedge ineffectiveness (13) 12
Share of profit of associated entities 14 9
Other income 4 5
Other operating income 50 157
Non-interest income 1,865 1,726
(1) Refer to Note 5 for further analysis.
(2) Includes fair value changes on derivatives not designated in a
hedge accounting relationship, and gains and losses from structural hedges.
(3) Includes related derivatives.
Notes continued
4. Operating expenses
Half year ended
30 June 30 June
2025 2024
Continuing operations £m £m
Salaries 1,237 1,254
Bonus awards 271 223
Temporary and contract costs 79 80
Social security costs 207 187
Pension costs 173 169
- defined benefit schemes 52 59
- defined contribution schemes 121 110
Other 162 234
Staff costs 2,129 2,147
Premises and equipment 587 579
Depreciation and amortisation (1) 557 508
Other administrative expenses 745 823
Administrative expenses 1,889 1,910
Operating expenses 4,018 4,057
(1) Includes depreciation on right of use assets of £47 million
(30 June 2024 - £53 million).
Notes continued
5. Segmental analysis
The business is organised into the following reportable segments: Retail
Banking, Private Banking & Wealth Management, Commercial &
Institutional and Central items & other.
Effective from Q2 2025, the reportable segment Private Banking was renamed
Private Banking & Wealth Management.
Analysis of operating profit/(loss) before tax
The following tables provide a segmental analysis of operating profit/(loss)
before tax by the main income statement captions.
Private Banking &
Retail Wealth Commercial & Central items &
Banking Management Institutional other Total
Half year ended 30 June 2025 £m £m £m £m £m
Continuing operations
Net interest income 2,922 363 2,955 (120) 6,120
Net fees and commissions 213 159 865 3 1,240
Other non-interest income (1) 17 469 140 625
Total income 3,134 539 4,289 23 7,985
Depreciation and amortisation - - (71) (486) (557)
Other operating expenses (1,423) (359) (2,080) 401 (3,461)
Impairment losses (226) (1) (154) (1) (382)
Operating profit/(loss) 1,485 179 1,984 (63) 3,585
Half year ended 30 June 2024
Continuing operations
Net interest income 2,475 285 2,543 105 5,408
Net fees and commissions 211 142 866 - 1,219
Other non-interest income 4 17 391 95 507
Total income 2,690 444 3,800 200 7,134
Depreciation and amortisation (1) - (76) (431) (508)
Other operating expenses (1,469) (356) (2,074) 350 (3,549)
Impairment (losses)/releases (122) 11 57 6 (48)
Operating profit 1,098 99 1,707 125 3,029
Notes continued
5. Segmental analysis continued
Total revenue (1)
Private Banking &
Retail Wealth Commercial & Central items &
Banking Management Institutional other Total
Half year ended 30 June 2025 £m £m £m £m £m
Continuing operations
External 4,916 617 6,729 2,644 14,906
Inter-segmental 6 774 (794) 14 -
Total 4,922 1,391 5,935 2,658 14,906
Half year ended 30 June 2024
Continuing operations
External 4,331 614 7,072 2,347 14,364
Inter-segmental 7 715 (936) 214 -
Total 4,338 1,329 6,136 2,561 14,364
(1) Total revenue comprises interest receivable, fees and
commissions receivable, income from trading activities and other operating
income.
Total assets and liabilities
Private Banking &
Retail Wealth Commercial & Central items &
Banking Management Institutional other Total
30 June 2025 £m £m £m £m £m
Assets 238,616 29,077 414,911 48,174 730,778
Liabilities 200,513 41,604 381,220 65,465 688,802
31 December 2024
Assets 232,835 28,593 398,750 47,807 707,985
Liabilities 198,795 42,603 367,342 59,867 668,607
Notes continued
5. Segmental analysis continued
Analysis of net fees and commissions
Private Banking
Retail & Wealth Commercial Central items
Banking Management & Institutional & other Total
Half year ended 30 June 2025 £m £m £m £m £m
Continuing operations
Fees and commissions receivable
- Payment services 176 20 355 - 551
- Credit and debit card fees 203 10 133 - 346
- Lending and financing 8 4 370 - 382
- Brokerage 19 5 28 - 52
- Investment management, trustee and fiduciary services 1 126 25 10 162
- Underwriting fees - - 88 - 88
- Other 5 2 28 (8) 27
Total 412 167 1,027 2 1,608
Fees and commissions payable (199) (8) (162) 1 (368)
Net fees and commissions 213 159 865 3 1,240
Half year ended 30 June 2024
Continuing operations
Fees and commissions receivable
- Payment services 165 20 335 - 520
- Credit and debit card fees 196 6 130 2 334
- Lending and financing 9 3 372 - 384
- Brokerage 17 4 21 - 42
- Investment management, trustee and fiduciary services 1 113 24 9 147
- Underwriting fees - - 93 - 93
- Other 4 6 52 (15) 47
Total 392 152 1,027 (4) 1,567
Fees and commissions payable (181) (10) (161) 4 (348)
Net fees and commissions 211 142 866 - 1,219
Notes continued
6. Tax
The actual tax charge differs from the expected tax charge computed by
applying the standard UK corporation tax rate of 25% (2024 - 25%), as analysed
below:
Half year ended
30 June 30 June
2025 2024
Continuing operations £m £m
Profit before tax 3,585 3,029
Expected tax charge (896) (757)
Losses and temporary differences in period where no deferred tax assets (4) (10)
recognised
Foreign profits taxed at other rates 21 17
Items not allowed for tax:
- losses on disposals and write-downs 5 (9)
- UK bank levy (17) (16)
- regulatory and legal actions (16) (3)
- other disallowable items (14) (17)
Non-taxable items:
- RPI-related uplift on index-linked gilts 9 18
- other non-taxable items 15 4
Taxable foreign exchange movements (3) 2
Unrecognised losses bought forward and utilised 18 12
Net increase in the carrying value of deferred tax assets in respect of UK 26 -
losses
Banking surcharge (95) (81)
Pillar 2 top-up tax - (11)
Tax on paid-in equity dividends 40 33
Adjustments in respect of prior years 1 17
Actual tax charge (910) (801)
At 30 June 2025, NatWest Group has recognised a deferred tax asset of £1,521
million (31 December 2024 - £1,876 million) and a deferred tax liability of
£92 million (31 December 2024 - £99 million). These amounts include deferred
tax assets recognised in respect of trading losses of £953 million (31
December 2024 - £1,106 million). NatWest Group has considered the carrying
value of these assets as at 30 June 2025 and concluded that they are
recoverable.
Notes continued
7. Financial instruments - classification
The following tables analyse financial assets and liabilities in accordance
with the categories of financial instruments in IFRS 9.
Amortised Other
cost
assets
MFVTPL DFV FVOCI Total
Assets £m £m £m £m £m £m
Cash and balances at central banks 90,706 90,706
Trading assets 56,706 56,706
Derivatives (1) 73,010 73,010
Settlement balances 8,214 8,214
Loans to banks - amortised cost (2) 7,378 7,378
Loans to customers - amortised cost (3) 407,135 407,135
Other financial assets 651 5 43,132 28,004 71,792
Intangible assets 7,513 7,513
Other assets 8,324 8,324
30 June 2025 130,367 5 43,132 541,437 15,837 730,778
Cash and balances at central banks 92,994 92,994
Trading assets 48,917 48,917
Derivatives (1) 78,406 78,406
Settlement balances 2,085 2,085
Loans to banks - amortised cost (2) 6,030 6,030
Loans to customers - amortised cost (3) 400,326 400,326
Other financial assets 798 5 37,843 24,597 63,243
Intangible assets 7,588 7,588
Other assets 8,396 8,396
31 December 2024 128,121 5 37,843 526,032 15,984 707,985
For the notes to this table refer to the following page.
Notes continued
7. Financial instruments - classification continued
Held-for-trading Amortised Other
cost
liabilities
DFV Total
Liabilities £m £m £m £m £m
Bank deposits (4) 38,148 38,148
Customer deposits 436,756 436,756
Settlement balances 9,546 9,546
Trading liabilities 58,845 58,845
Derivatives (1) 65,983 65,983
Other financial liabilities (5) 3,927 62,013 65,940
Subordinated liabilities 234 5,772 6,006
Notes in circulation 3,287 3,287
Other liabilities (6) 626 3,665 4,291
30 June 2025 124,828 4,161 556,148 3,665 688,802
Bank deposits (4) 31,452 31,452
Customer deposits 433,490 433,490
Settlement balances 1,729 1,729
Trading liabilities 54,714 54,714
Derivatives (1) 72,082 72,082
Other financial liabilities (5) 3,548 57,539 61,087
Subordinated liabilities 234 5,902 6,136
Notes in circulation 3,316 3,316
Other liabilities (6) 684 3,917 4,601
31 December 2024 126,796 3,782 534,112 3,917 668,607
(1) Includes net hedging derivative assets of £317 million (31
December 2024 - £118 million) and net hedging derivative liabilities of £460
million (31 December 2024 - £464 million).
(2) Includes items in the course of collection from other banks of
£787 million (31 December 2024 - £59 million).
(3) Includes finance lease receivables of £9,056 million (31 December
2024 - £8,998 million).
(4) Includes items in the course of transmission to other banks of
£404 million (31 December 2024 - £136 million).
(5) The carrying amount of other customer accounts designated at fair
value through profit or loss is the same as the principal amount for both
periods. No amounts have been recognised in the profit or loss for changes in
credit risk associated with these liabilities as the changes are immaterial
both during the period and cumulatively.
(6) Includes lease liabilities of £563 million (31 December 2024 -
£630 million), held at amortised cost.
Notes continued
8. Financial instruments - valuation
Disclosures relating to the control environment, valuation techniques and
related aspects pertaining to financial instruments measured at fair value are
included in the NatWest Group plc 2024 Annual Report and Accounts. Valuation,
sensitivity methodologies and inputs at 30 June 2025 are consistent with those
described in Note 10 to the financial statements in the NatWest Group plc 2024
Annual Report and Accounts.
Fair value hierarchy
The table below shows the assets and liabilities held by NatWest Group split
by fair value hierarchy level. Level 1 are considered the most liquid
instruments, and level 3 the most illiquid, valued using expert judgment and
hence carry the most significant price uncertainty.
30 June 2025 31 December 2024
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Assets
Trading assets
Loans - 34,936 243 35,179 - 34,761 278 35,039
Securities 16,289 5,238 - 21,527 8,772 5,106 - 13,878
Derivatives
Interest rate - 34,582 446 35,028 - 37,026 473 37,499
Foreign exchange - 37,749 149 37,898 - 40,687 110 40,797
Other - 42 42 84 - 63 47 110
Other financial assets
Loans - 38 527 565 - 288 565 853
Securities 25,936 17,111 176 43,223 23,943 13,641 209 37,793
Total financial assets held at fair value 42,225 129,696 1,583 173,504 32,715 131,572 1,682 165,969
As a % of total fair value assets 24% 75% 1% 20% 79% 1%
Liabilities
Trading liabilities
Deposits - 46,379 - 46,379 - 43,966 - 43,966
Debt securities in issue - 251 - 251 - 257 - 257
Short positions 9,749 2,465 1 12,215 8,766 1,724 1 10,491
Derivatives
Interest rate - 28,114 203 28,317 - 31,253 279 31,532
Foreign exchange - 37,420 76 37,496 - 40,240 66 40,306
Other - 107 63 170 - 124 120 244
Other financial liabilities
Debt securities in issue - 1,942 3 1,945 - 1,733 3 1,736
Other deposits - 1,930 52 1,982 - 1,787 25 1,812
Subordinated liabilities - 234 - 234 - 234 - 234
Total financial liabilities held at fair value 9,749 118,842 398 128,989 8,766 121,318 494 130,578
As a % of total fair value liabilities 8% 92% 0% 7% 93% 0%
(1) Level 1 - Instruments valued using unadjusted quoted prices in active and
liquid markets, for identical financial instruments. Examples include
government bonds, listed equity shares and certain exchange-traded
derivatives.
Level 2 - Instruments valued using valuation techniques that have observable
inputs. Observable inputs are those that are readily available with limited
adjustments required. Examples include most government agency securities,
investment-grade corporate bonds, certain mortgage products - including CLOs,
most bank loans, repos and reverse repos, state and municipal obligations,
most notes issued, certain money market securities, loan commitments and most
OTC derivatives.
Level 3 - Instruments valued using a valuation technique where at least one
input which could have a significant effect on the instrument's valuation, is
not based on observable market data. Examples include non-derivative
instruments which trade infrequently, certain syndicated and commercial
mortgage loans, private equity, and derivatives with unobservable model
inputs.
(2) Transfers between levels are deemed to have occurred at the beginning of the
quarter in which the instrument was transferred.
(3) For an analysis of debt securities held at mandatory fair value through profit
or loss by issuer as well as ratings and derivatives, by type and contract,
refer to Risk and capital management - Credit risk.
Notes continued
8. Financial instruments - valuation continued
Valuation adjustments
When valuing financial instruments in the trading book, adjustments are made
to mid-market valuations to cover bid-offer spread, funding and credit risk.
These adjustments are presented in the table below. For further information
refer to the descriptions of valuation adjustments within 'Financial
instruments - valuation' on page 336 of the NatWest Group plc 2024 Annual
Report and Accounts.
30 June 31 December
2025 2024
£m £m
Funding - FVA 125 123
Credit - CVA 188 190
Bid - Offer 77 76
Product and deal specific 139 157
Total 529 546
- Valuation reserves comprising credit valuation adjustments (CVA),
funding valuation adjustment (FVA), bid-offer and product and deal specific
reserves, decreased to £529 million at 30 June 2025 (31 December 2024 - £546
million).
- The decrease in product and deal specific was driven by the
amortisation of deferred trade inception profits partially offset by new
trading activity.
Notes continued
8. Financial instruments - valuation continued
Level 3 sensitivities
The table below shows the favourable and unfavourable range of fair value of
the level 3 assets and liabilities.
30 June 2025 31 December 2024
Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable
£m £m £m £m £m £m
Assets
Trading assets
Loans 243 - - 278 - -
Securities - - - - - -
Derivatives
Interest rate 446 20 (20) 473 20 (20)
Foreign exchange 149 10 (10) 110 - -
Other 42 - - 47 - -
Other financial assets
Loans 527 10 (10) 565 - (10)
Securities 176 20 (20) 209 20 (30)
Total financial assets held at fair value 1,583 60 (60) 1,682 40 (60)
Liabilities
Trading liabilities
Deposits - - - - - -
Short positions 1 - - 1 - -
Derivatives
Interest rate 203 10 (10) 279 10 (10)
Foreign exchange 76 - - 66 - -
Other 63 - - 120 10 (10)
Other financial liabilities
Debt securities in issue 3 - - 3 - -
Other deposits 52 10 (20) 25 10 (20)
Total financial liabilities held at fair value 398 20 (30) 494 30 (40)
Alternative assumptions
Reasonably plausible alternative assumptions of unobservable inputs are
determined based on a specified target level of certainty of 90%. Alternative
assumptions are determined with reference to all available evidence including
consideration of the following: quality of independent pricing information
considering consistency between different sources, variation over time,
perceived tradability or otherwise of available quotes; consensus service
dispersion ranges; volume of trading activity and market bias (e.g. one-way
inventory); day 1 profit or loss arising on new trades; number and nature of
market participants; market conditions; modelling consistency in the market;
size and nature of risk; length of holding of position; and market
intelligence.
Notes continued
8. Financial instruments - valuation continued
Movement in level 3 assets and liabilities
The following table shows the movement in level 3 assets and liabilities.
Other Other Other Other
Derivatives trading financial Total Derivatives trading financial Total
assets assets (2) assets (3) assets liabilities liabilities (2) liabilities liabilities
£m £m £m £m £m £m £m £m
At 1 January 2025 630 278 774 1,682 465 1 28 494
Amounts recorded in the income statement (1) (65) 2 (1) (64) (94) - 1 (93)
Amount recorded in the statement of comprehensive income - - 11 11 - - - -
Level 3 transfers in 40 - - 40 7 - 25 32
Level 3 transfers out (6) - (16) (22) (11) - - (11)
Purchases/originations 70 89 59 218 47 - - 47
Settlements/other decreases (2) (31) - (33) (34) - - (34)
Sales (31) (97) (125) (253) (40) - - (40)
Foreign exchange and other adjustments 1 2 1 4 2 - 1 3
At 30 June 2025 637 243 703 1,583 342 1 55 398
Amounts recorded in the income statement in respect of balances held
at period end - unrealised 57 1 (3) 55 (10) - - (10)
At 1 January 2024 823 223 915 1,961 685 3 3 691
Amounts recorded in the income statement (1) (70) 2 5 (63) (28) - - (28)
Amount recorded in the statement of comprehensive income - - (13) (13) - - - -
Level 3 transfers in 7 - - 7 1 - 23 24
Level 3 transfers out (2) (14) (258) (274) (2) (1) - (3)
Purchases/originations 82 25 23 130 67 1 - 68
Settlements/other decreases (38) (7) - (45) (29) - - (29)
Sales (40) - (2) (42) (34) (1) - (35)
Foreign exchange and other adjustments - 1 (6) (5) (2) - - (2)
At 30 June 2024 762 230 664 1,656 658 2 26 686
Amounts recorded in the income statement in respect of balances held
at period end - unrealised 116 - 4 120 123 - - 123
(1) There were £31 million net gains on trading assets and
liabilities (30 June 2024 - £40 million net losses) recorded in income from
trading activities. Net losses on other instruments of £2 million (30 June
2024 - £5 million net losses) were recorded in other operating income and
interest income as appropriate.
(2) Other trading assets and other trading liabilities comprise
assets and liabilities held at fair value in trading portfolios.
(3) Other financial assets comprise fair value through other
comprehensive income, designated as at fair value through profit or loss and
other fair value through profit or loss.
Notes continued
8. Financial instruments - valuation continued
Fair value of financial instruments measured at amortised cost on the balance
sheet
The following table shows the carrying value and fair value of financial
instruments carried at amortised cost on the balance sheet.
Items where
fair value
Carrying Fair value hierarchy level approximates
value Fair value Level 1 Level 2 Level 3 carrying value
30 June 2025 £bn £bn £bn £bn £bn £bn
Financial assets
Cash and balances at central banks 90.7 90.7 - - - 90.7
Settlement balances 8.2 8.2 - - - 8.2
Loans to banks 7.4 7.3 - 2.8 0.5 4.0
Loans to customers 407.1 402.0 - 30.6 371.4 -
Other financial assets - securities 28.0 28.0 9.7 11.7 6.6 -
31 December 2024
Financial assets
Cash and balances at central banks 93.0 93.0 - - - 93.0
Settlement balances 2.1 2.1 - - - 2.1
Loans to banks 6.0 5.9 - 1.8 0.5 3.6
Loans to customers 400.3 396.6 - 34.9 361.7 -
Other financial assets - securities 24.6 24.6 4.3 12.4 7.9 -
30 June 2025
Financial liabilities
Bank deposits 38.1 38.0 - 29.7 3.7 4.6
Customer deposits 436.8 436.7 - 24.2 46.4 366.1
Settlement balances 9.5 9.5 - - - 9.5
Other financial liabilities
- debt securities in issue 62.0 62.7 - 54.0 8.7 -
Subordinated liabilities 5.8 5.9 - 5.9 - -
Notes in circulation 3.3 3.3 - - - 3.3
31 December 2024
Financial liabilities
Bank deposits 31.5 31.2 - 23.9 3.0 4.3
Customer deposits 433.5 433.3 - 24.3 46.0 363.0
Settlement balances 1.7 1.7 - - - 1.7
Other financial liabilities
- debt securities in issue 57.5 57.6 - 48.9 8.7 -
Subordinated liabilities 5.9 6.0 - 6.0 - -
Notes in circulation 3.3 3.3 - - - 3.3
The assumptions and methodologies underlying the calculation of fair values of
financial instruments at the balance sheet date are as follows:
Short-term financial instruments
For certain short-term financial instruments: cash and balances at central
banks, items in the course of collection from other banks, settlement
balances, items in the course of transmission to other banks, customer demand
deposits and notes in circulation, carrying value is deemed a reasonable
approximation of fair value.
Loans to banks and customers
In estimating the fair value of net loans to customers and banks measured at
amortised cost, NatWest Group's loans are segregated into appropriate
portfolios reflecting the characteristics of the constituent loans. Two
principal methods are used to estimate fair value: contractual cash flows and
expected cash flows.
Debt securities and subordinated liabilities
Most debt securities are valued using quoted prices in active markets or from
quoted prices of similar financial instruments in active markets. For the
remaining population, fair values are determined using market standard
valuation techniques, such as discounted cash flows.
Bank and customer deposits
Fair value of deposits is estimated using discounted cash flow valuation
techniques.
Notes continued
9. Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair
value in trading portfolios.
30 June 31 December
2025 2024
Assets £m £m
Loans
Reverse repos 28,165 27,127
Collateral given 6,335 7,367
Other loans 679 545
Total loans 35,179 35,039
Securities
Central and local government
- UK 3,961 2,077
- US 6,832 3,734
- Other 6,706 3,506
Financial institutions and Corporate 4,028 4,561
Total securities 21,527 13,878
Total 56,706 48,917
Liabilities
Deposits
Repos 33,911 30,562
Collateral received 11,597 12,509
Other deposits 871 895
Total deposits 46,379 43,966
Debt securities in issue 251 257
Short positions
Central and local government
- UK 2,346 2,680
- US 1,946 1,677
- Other 6,825 4,755
Financial institutions and Corporate 1,098 1,379
Total short positions 12,215 10,491
Total 58,845 54,714
Notes continued
10. Loan impairment provisions
Loan exposure and impairment metrics
The table below summarises loans and related credit impairment measures on an
IFRS 9 basis.
30 June 31 December
2025 2024
£m £m
Loans - amortised cost and FVOCI (1,2)
Stage 1 371,875 363,821
Stage 2 40,193 40,474
Stage 3 5,823 5,930
Of which: individual 1,522 1,285
Of which: collective 4,301 4,645
417,891 410,225
ECL provisions (3)
Stage 1 648 598
Stage 2 741 787
Stage 3 2,261 2,040
Of which: individual 611 451
Of which: collective 1,650 1,589
3,650 3,425
ECL provisions coverage (4)
Stage 1 (%) 0.17 0.16
Stage 2 (%) 1.84 1.94
Stage 3 (%) 38.83 34.40
0.87 0.83
Half year ended
30 June 30 June
2025 2024
£m £m
Impairment losses
ECL charge/(release) (5) 382 48
Stage 1 (67) (364)
Stage 2 165 190
Stage 3 284 222
Of which: individual 194 80
Of which: collective 90 142
Amounts written off 192 369
Of which: individual 61 64
Of which: collective 131 305
(1) The table shows gross loans only and excludes amounts that
were outside the scope of the ECL framework. Other financial assets within the
scope of the IFRS 9 ECL framework were cash and balances at central banks
totalling £89.5 billion (31 December 2024 - £91.8 billion) and debt
securities of £70.8 billion (31 December 2024 - £62.4 billion).
(2) Fair value through other comprehensive income (FVOCI).
Includes loans to customers and banks.
(3) Includes £4 million (31 December 2024 - £4 million) related
to assets classified as FVOCI and £0.1 billion (31 December 2024 - £0.1
billion) related to off-balance sheet exposures.
(4) ECL provisions coverage is calculated as ECL provisions
divided by loans - amortised cost and FVOCI. It is calculated on loans and
total ECL provisions, including ECL for other (non-loan) assets and unutilised
exposure. Some segments with a high proportion of debt securities or
unutilised exposure may result in a not meaningful (nm) coverage ratio.
(5) Includes a £1 million release (June 2024 - £6 million
release) related to other financial assets, with no release (June 2024 - £5
million release) related to assets classified as FVOCI and includes a £10
million charge (June 2024 - £4 million release) related to contingent
liabilities.
Notes continued
11. Provisions for liabilities and charges
Financial
Customer Litigation and commitments
redress other regulatory Property and guarantees Other (1) Total
£m £m £m £m £m £m
At 1 January 2025 420 128 90 55 171 864
Expected credit losses impairment charge - - - 9 - 9
Currency translation and other movements 1 (9) - - - (8)
Charge to income statement 12 38 13 - 116 179
Release to income statement (12) - (11) - (13) (36)
Provisions utilised (78) (37) (10) - (58) (183)
At 30 June 2025 343 120 82 64 216 825
(1) Other materially comprises of provisions relating to restructuring
costs and Bank of England levy. The charge for the year includes restructuring
costs of £62 million and Bank of England levy of £53 million.
Provisions are liabilities of uncertain timing or amount and are recognised
when there is a present obligation as a result of a past event, the outflow of
economic benefit is probable and the outflow can be estimated reliably. Any
difference between the final outcome and the amounts provided will affect the
reported results in the period when the matter is resolved.
12. Dividends
The 2024 final dividend was approved by shareholders at the Annual General
Meeting on 23 April 2025 and the payment made on 29 April 2025 to shareholders
on the register at the close of business on 15 March 2025.
NatWest Group plc announces an interim dividend for 2025 of £768 million or
9.5 pence per ordinary share. The interim dividend will be paid on 12
September 2025 to shareholders on the register at close of business on 8
August 2025. The ex-dividend date will be 7 August 2025.
13. Contingent liabilities and commitments
The amounts shown in the table below are intended only to provide an
indication of the volume of business outstanding at 30 June 2025. Although
NatWest Group is exposed to credit risk in the event of a customer's failure
to meet its obligations, the amounts shown do not, and are not intended to,
provide any indication of NatWest Group's expectation of future losses.
30 June 31 December
2025 2024
£m £m
Contingent liabilities and commitments
Guarantees 2,801 3,060
Other contingent liabilities 1,362 1,496
Standby facilities, credit lines and other commitments 142,157 135,405
Total 146,320 139,961
Commitments and contingent obligations are subject to NatWest Group's normal
credit approval processes.
Notes continued
14. Litigation and regulatory matters
NatWest Group plc and certain members of NatWest Group are party to various
legal proceedings and are involved in, or subject to, various regulatory
matters, including as the subject of investigations and other regulatory and
governmental action (Matters) in the United Kingdom (UK), the United States
(US), the European Union (EU) and other jurisdictions.
NatWest Group recognises a provision for a liability in relation to these
Matters when it is probable that an outflow of economic benefits will be
required to settle an obligation resulting from past events, and a reliable
estimate can be made of the amount of the obligation.
In many of the Matters, it is not possible to determine whether any loss is
probable, or to estimate reliably the amount of any loss, either as a direct
consequence of the relevant proceedings and regulatory matters or as a result
of adverse impacts or restrictions on NatWest Group's reputation, businesses
and operations. Numerous legal and factual issues may need to be resolved,
including through potentially lengthy discovery and document production
exercises and determination of important factual matters, and by addressing
novel or unsettled legal questions relevant to the proceedings in question,
before the probability of a liability, if any, arising can reasonably be
estimated in respect of any Matter. NatWest Group cannot predict if, how, or
when such claims will be resolved or what the eventual settlement, damages,
fine, penalty or other relief, if any, may be, particularly for Matters that
are at an early stage in their development or where claimants seek substantial
or indeterminate damages.
There are situations where NatWest Group may pursue an approach that in some
instances leads to a settlement agreement. This may occur in order to avoid
the expense, management distraction or reputational implications of continuing
to contest liability, or in order to take account of the risks inherent in
defending or contesting Matters, even for those for which NatWest Group
believes it has credible defences and should prevail on the merits. The
uncertainties inherent in all Matters affect the amount and timing of any
potential economic outflows both for Matters with respect to which provisions
have been established and other contingent liabilities in respect of any such
Matter.
It is not practicable to provide an aggregate estimate of potential liability
for our Matters as a class of contingent liabilities.
The future economic outflow in respect of any Matter may ultimately prove to
be substantially greater than, or less than, the aggregate provision, if any,
that NatWest Group has recognised in respect of such Matter. Where a reliable
estimate of the economic outflow cannot be reasonably made, no provision has
been recognised. NatWest Group expects that in future periods, additional
provisions and economic outflows relating to Matters that may or may not be
currently known by NatWest
Group will be necessary, in amounts that are expected to be substantial in
some instances. Refer to Note 13 for information on material provisions.
Matters which are, or could be, material, either individually or in aggregate,
having regard to NatWest Group, considered as a whole, in which NatWest Group
is currently involved are set out below. We have provided information on the
procedural history of certain Matters, where we believe appropriate, to aid
the understanding of the Matter.
For a discussion of certain risks associated with NatWest Group's litigation
and regulatory matters (including the Matters), refer to the Risk Factor
relating to legal, regulatory and governmental actions and investigations set
out on pages 422 to 423 of the NatWest Group plc Annual Report and Accounts
2024.
Litigation
London Interbank Offered Rate (LIBOR) and other rates litigation
NatWest Group plc and certain other members of NatWest Group, including NWM
Plc, are defendants in a number of claims pending in the United States
District Court for the Southern District of New York (SDNY) with respect to
the setting of USD LIBOR. The complainants allege that certain members of
NatWest Group and other panel banks violated various federal laws, including
the US commodities and antitrust laws, and state statutory and common law, as
well as contracts, by manipulating LIBOR and prices of LIBOR-based derivatives
in various markets through various means.
The co-ordinated proceeding in the SDNY relating to USD LIBOR now includes one
remaining class action, which is on behalf of persons who purchased
LIBOR-linked instruments from defendants and bonds issued by defendants, as
well as several non-class actions. The defendants in the co-ordinated
proceeding have filed a summary judgment motion on the issue of liability, and
briefing on that motion concluded in January 2025. The court is currently
considering the motion.
The non-class claims filed in the SDNY include claims that the Federal Deposit
Insurance Corporation (FDIC) is asserting on behalf of certain failed US
banks. In July 2017, the FDIC, on behalf of 39 of those failed US banks,
commenced substantially similar claims against NatWest Group companies and
others in the High Court of Justice of England and Wales. The action alleges
collusion with regard to the setting of USD LIBOR and that the defendants
breached UK and European competition law, as well as asserting common law
claims of fraud under US law. The defendant banks consented to a request by
the FDIC for discontinuance of the claim in respect of 20 failed US banks,
leaving 19 failed US banks as claimants.
In June 2025, NatWest Group companies reached an agreement to settle the
FDIC's claims, both those pending in the SDNY and those pending in the High
Court of Justice in England and Wales. The settlement amount has been paid and
was covered in full by an existing provision.
Notes continued
14. Litigation and regulatory matters continued
In addition to the USD LIBOR cases described above, there is a class action
relating to derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR, which
was dismissed by the SDNY in relation to NWM Plc and other NatWest Group
companies in September 2021. That dismissal is now the subject of an appeal to
the United States Court of Appeals for the Second Circuit (US Court of
Appeals).
Two other IBOR-related class actions involving NWM Plc, concerning alleged
manipulation of Euribor and Pound Sterling LIBOR, were previously dismissed by
the SDNY for various reasons. The plaintiffs' appeals in those two cases
remain pending.
In August 2020, a complaint was filed in the United States District Court for
the Northern District of California by several United States retail borrowers
against the USD ICE LIBOR panel banks and their affiliates (including NatWest
Group plc, NWM Plc, NWMSI and NWB Plc), alleging (i) that the very process of
setting USD ICE LIBOR amounts to illegal price-fixing; and (ii) that banks in
the United States have illegally agreed to use LIBOR as a component of price
in variable retail loans. In September 2022, the district court dismissed the
complaint. In December 2024, the United States Court of Appeals for the Ninth
Circuit affirmed the district court's decision. In June 2025, the United
States Supreme Court denied the claimants' petition for review.
NWM Plc is also named as a defendant in a motion to certify a class action
relating to LIBOR in the Tel Aviv District Court in Israel. NWM Plc filed a
motion for cancellation of service outside the jurisdiction, which was granted
in July 2020. The claimants appealed that decision and in November 2020 the
appeal was refused and the claim dismissed by the Appellate Court. In January
2025, Israel's Supreme Court dismissed the appeals in respect of the dismissal
of the substantive case against banks that had a presence in Israel.
Subject to any limitation argument, the Supreme Court noted that further legal
clarification of the matter could be sought, so there is potential for future
LIBOR claims in Israel.
Foreign exchange litigation
NatWest Group plc, NWM Plc and/or NWMSI are defendants in several cases
relating to NWM Plc's foreign exchange (FX) business.
In May 2019, a cartel class action was filed in the Federal Court of Australia
against NWM Plc and four other banks on behalf of persons who bought or sold
currency through FX spots or forwards between 1 January 2008 and 15 October
2013 with a total transaction value exceeding AUD 0.5 million. The claimant
has alleged that the banks, including NWM Plc, contravened Australian
competition law by sharing information, coordinating conduct, widening spreads
and manipulating FX rates for certain currency pairs during this period.
NatWest Group plc and NWMSI have been named in the action as 'other cartel
participants', but are not respondents.
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.
In July and December 2019, two separate applications seeking opt-out
collective proceedings orders were filed in the UK Competition Appeal Tribunal
(CAT) against NatWest Group plc, NWM Plc and other banks. Both applications
were brought on behalf of persons who, between 18 December 2007 and 31 January
2013, entered into a relevant FX spot or outright forward transaction in the
European Economic Area with a relevant financial institution or on an
electronic communications network. In March 2022, the CAT declined to certify
as collective proceedings either of the applications, which was appealed by
the applicants and was the subject of an application for judicial review.
In its amended judgment in November 2023, the Court of Appeal allowed the
appeal and decided that the claims should proceed on an opt-out basis.
Separately, the court determined which of the two competing applicants can
proceed as class representative, and dismissed the application for judicial
review of the CAT's decision. The other applicant has discontinued its claim
and withdrawn from the proceedings. The banks sought permission to appeal the
Court of Appeal decision directly to the UK Supreme Court, which was granted
in April 2024.
The appeal was heard in April 2025 and judgment is awaited.
Two motions to certify FX-related class actions were filed in the Tel Aviv
District Court in Israel in September and October 2018, and were subsequently
consolidated into one motion. The consolidated motion to certify, which names
The Royal Bank of Scotland plc (now NWM Plc) and several other banks as
defendants, was served on NWM Plc in May 2020.
The applicants sought the court's permission to amend their motions to certify
the class actions. NWM Plc filed a motion challenging the permission granted
by the court for the applicants to serve the consolidated motion outside the
Israeli jurisdiction. That NWM Plc motion remains pending. In February 2024,
NWM Plc executed an agreement to settle the claim, subject to court approval.
The settlement amount is covered in full by an existing provision.
In December 2021, a summons was served in the Netherlands against NatWest
Group plc, NWM Plc and NWM N.V. by Stichting FX Claims on behalf of a number
of parties, seeking declarations from the court concerning liability for
anti-competitive FX
Notes continued
14. Litigation and regulatory matters continued
Foreign exchange litigation continued
market conduct described in decisions of the European Commission (EC) of 16
May 2019, along with unspecified damages. The claimant amended its claim to
also refer to a 2 December 2021 decision by the EC, which described
anti-competitive FX market conduct. NatWest Group plc, NWM Plc and other
defendants contested the jurisdiction of the Dutch court. In March 2023, the
district court in Amsterdam accepted that it has jurisdiction to hear claims
against NWM N.V. but refused jurisdiction to hear any claims against the other
defendant banks (including NatWest Group plc and NWM Plc) brought on behalf of
the parties represented by the claimant that are domiciled outside of the
Netherlands. The claimant is appealing that decision. The defendant banks have
brought cross-appeals which seek a ruling that the Dutch court has no
jurisdiction to hear any claims against the defendant banks domiciled outside
of the Netherlands, irrespective of whether the claim has been brought on
behalf of a party represented by the claimant that is domiciled within or
outside of the Netherlands. The Amsterdam Court of Appeal has stayed these
appeal proceedings until the Court of Justice of the European Union has
answered preliminary questions that have been referred to it in another
matter.
In September 2023, a second summons was served by Stichting FX Claims on
NatWest Group plc, NWM Plc and NWM N.V., on behalf of a new group of parties.
The claimant seeks declarations from the district court in Amsterdam
concerning liability for anti-competitive FX market conduct described in the
above referenced decisions of the EC of 16 May 2019 and 2 December 2021, along
with unspecified damages. NatWest Group plc, NWM Plc and other defendants are
contesting the Dutch court's jurisdiction. The district court has stayed the
proceedings pending judgment in the above-mentioned appeals.
In January 2025, a third summons was served by Stichting FX Claims on NatWest
Group plc, NWM Plc and NWM N.V., on behalf of another new group of parties.
The claimant seeks similar declarations from the district court in Amsterdam
to those being sought in the above-mentioned claims, along with unspecified
damages.
NatWest Group plc, NWM Plc and other defendants are contesting the Dutch
court's jurisdiction. The district court has stayed the proceedings pending
judgment in the above-mentioned appeals.
Certain other foreign exchange transaction related claims have been or may be
threatened. NatWest Group cannot predict whether all or any of these claims
will be pursued.
Swaps antitrust litigation
NWM Plc and other members of NatWest Group, including NatWest Group plc, as
well as a number of other interest rate swap dealers, are defendants in
several cases pending in the SDNY alleging violations of the US antitrust laws
in the market for interest rate swaps. Three swap execution facilities
(TeraExchange, Javelin, and trueEx) allege that they would have successfully
established exchange-like trading of interest rate swaps if the defendants had
not unlawfully conspired to prevent that from happening through boycotts and
other means. Discovery is complete though expert discovery is ongoing. In
March 2024, NatWest Group companies reached an agreement to settle a
consolidated class action complaint on behalf of persons who entered into
interest rate swaps with the defendants, which was predicated on similar
allegations. The settlement amount was previously paid into escrow pending
final court approval of the settlement and was covered in full by an existing
provision. On 17 July 2025, the SDNY granted final approval of the class
action settlement.
In June 2021, a class action antitrust complaint was filed against a number of
credit default swap dealers in New Mexico federal court on behalf of persons
who, from 2005 onwards, settled credit default swaps in the United States by
reference to the ISDA credit default swap auction protocol. The complaint
alleges that the defendants conspired to manipulate that benchmark through
various means in violation of the antitrust laws and the Commodity Exchange
Act. The defendants filed a motion to dismiss the complaint and, in June 2023,
such motion was denied as regards to NWMSI and other financial institutions,
but granted as regards to NWM Plc on the ground that the court lacks
jurisdiction over that entity.
In January 2024, the SDNY issued an order barring the plaintiffs in the New
Mexico case from pursuing claims based on conduct occurring before 30 June
2014 on the ground that such claims were extinguished by a 2015 settlement
agreement that resolved a prior class action relating to credit default swaps.
In May 2025, the SDNY's decision was affirmed by the US Court of Appeals.
The case in the New Mexico federal court (which was stayed pending the appeal
of the SDNY's decision) will now re-commence but as limited by the decision of
the US Court of Appeals.
Notes continued
14. Litigation and regulatory matters continued
Odd lot corporate bond trading antitrust litigation
In July 2024, the US Court of Appeals vacated the SDNY's October 2021
dismissal of the class action antitrust complaint alleging that, from August
2006 onwards, various securities dealers, including NWMSI, conspired
artificially to widen spreads for odd lots of corporate bonds bought or sold
in the United States secondary market and to boycott electronic trading
platforms that would have allegedly promoted pricing competition in the market
for such bonds. The appellate court held that the district judge who made the
decision should not have been presiding over the case because a member of the
judge's family had owned stock in one of the defendants while the motion was
pending. The defendants are now seeking dismissal by a different district
court judge.
Spoofing litigation
In December 2021, three substantially similar class actions complaints were
filed in federal court in the United States against NWM Plc and NWMSI alleging
Commodity Exchange Act and common law unjust enrichment claims arising from
manipulative trading known as spoofing. The complaints refer to NWM Plc's
December 2021 spoofing-related guilty plea (described below under "US
investigations relating to fixed-income securities") and purport to assert
claims on behalf of those who transacted in US Treasury securities and futures
and options on US Treasury securities between 2008 and 2018. In July 2022, the
defendants filed a motion to dismiss these claims, which have been
consolidated into one matter in the United States District Court for the
Northern District of Illinois.
Madoff
NWM N.V. was named as a defendant in two actions filed by the trustee for the
bankrupt estates of Bernard L. Madoff and Bernard L. Madoff Investment
Securities LLC, in bankruptcy court in New York, which together seek to
clawback more than US$300 million (plus pre-judgment interest) that NWM N.V.
allegedly received from certain Madoff feeder funds and certain swap
counterparties.
The claims were previously dismissed, but as a result of an August 2021
decision by the US Court of Appeals, they are now proceeding in the discovery
phase in the bankruptcy court, where they have been consolidated into one
action.
Offshoring VAT assessments
HMRC, as part of an industry-wide review, issued protective tax assessments in
2018 against NatWest Group plc totalling £143 million relating to unpaid VAT
in respect of the UK branches of two NatWest Group companies registered in
India for the period from 1 January 2014 until 31 December 2017 inclusive.
NatWest Group formally requested reconsideration by HMRC of their assessments,
and this process was completed in November 2020.
HMRC upheld their original decision and, as a result, NatWest Group plc lodged
an appeal with the Tax Tribunal and an application for judicial review with
the High Court of Justice of England and Wales, both in December 2020.
In order to lodge the appeal with the Tax Tribunal, NatWest Group plc was
required to pay amounts totalling £153 million (including statutory interest)
to HMRC in December 2020 and May 2022. The appeal and the application for
judicial review were previously stayed behind a separate case involving
another bank.
NatWest Group plc was informed in late 2024 that the other bank had settled
its case with HMRC by agreement. NatWest Group plc is currently considering
the appropriate next steps for the appeal and the application for judicial
review, in the expectation of progressing the appeal before the Tax Tribunal.
The amount of £153 million continues to be recognised as an asset that
NatWest Group plc expects to recover. Since 1 January 2018, NatWest Group plc
has paid VAT on intra-group supplies from the India-registered NatWest Group
companies.
US Anti-Terrorism Act litigation
NWM N.V. and certain other financial institutions are defendants in several
actions filed by a number of US nationals (or their estates, survivors, or
heirs), most of whom are, or were, US military personnel who were killed or
injured in attacks in Iraq between 2003 and 2011. NWM Plc is also a defendant
in some of these cases.
According to the plaintiffs' allegations, the defendants are liable for
damages arising from the attacks because they allegedly conspired with and/or
aided and abetted Iran and certain Iranian banks to assist Iran in
transferring money to Hezbollah and the Iraqi terror cells that committed the
attacks, in violation of the US Anti-Terrorism Act, by agreeing to engage in
'stripping' of transactions initiated by the Iranian banks so that the Iranian
nexus to the transactions would not be detected.
The first of these actions, alleging conspiracy claims but not aiding and
abetting claims, was filed in the United States District Court for the Eastern
District of New York in November 2014. In September 2019, the district court
dismissed the case, finding that the claims were deficient for several
reasons, including lack of sufficient allegations as to the alleged conspiracy
and causation. In January 2023, the US Court of Appeals affirmed the district
court's dismissal of this case. The plaintiffs have now filed a motion in the
district court to re-open the case to assert aiding and abetting claims that
they previously did not assert, which the defendants are opposing. Another
action, filed in the SDNY in 2017, which asserted both conspiracy and aiding
and abetting claims, was dismissed by the SDNY in March 2019 on similar
grounds as the first case, but remains subject to appeal to the US Court of
Appeals. Other follow-on actions that are substantially similar to those
described above are pending in the same courts.
Notes continued
14. Litigation and regulatory matters continued
1MDB litigation
A Malaysian court claim was served in Switzerland in November 2022 by 1MDB, a
sovereign wealth fund, in which Coutts & Co Ltd was named, along with six
others, as a defendant in respect of losses allegedly incurred by 1MDB. It is
claimed that Coutts & Co Ltd is liable as a constructive trustee for
having dishonestly assisted the directors of 1MDB in the breach of their
fiduciary duties by failing (amongst other alleged claims) to undertake due
diligence in relation to a customer of Coutts & Co Ltd, through which
funds totalling c.US$1 billion were received and paid out between 2009 and
2011. 1MDB seeks the return of that amount plus interest. Coutts & Co Ltd
filed an application in January 2023 challenging the validity of service and
the Malaysian court's jurisdiction to hear the claim, and a hearing took place
in February 2024. In March 2024, the court granted that application. 1MDB has
appealed that decision and a prior decision by the court not to allow them to
discontinue their claim. Both appeals are scheduled to be heard in November
2025.
Coutts & Co Ltd (a subsidiary of RBS Netherlands Holdings B.V., which in
turn is a subsidiary of NWM Plc) is a company registered in Switzerland and is
in wind-down following the announced sale of its business assets in 2015.
Regulatory matters (including investigations and customer redress programmes)
NatWest Group's businesses and financial condition can be affected by the
actions of various governmental and regulatory authorities in the UK, the US,
the EU and elsewhere. NatWest Group has engaged, and will continue to engage,
in discussions with relevant governmental and regulatory authorities,
including in the UK, the US, the EU and elsewhere, on an ongoing and regular
basis, and in response to informal and formal inquiries or investigations,
regarding operational, systems and control evaluations and issues including
those related to compliance with applicable laws and regulations, including
consumer protection, investment advice, business conduct,
competition/anti-trust, VAT recovery, anti-bribery, anti-money laundering and
sanctions regimes. NatWest Group expects government and regulatory
intervention in financial services to be high for the foreseeable future,
including increased scrutiny from competition and other regulators in the
retail and SME business sectors.
Any matters discussed or identified during such discussions and inquiries may
result in, among other things, further inquiry or investigation, other action
being taken by governmental and regulatory authorities, increased costs being
incurred by NatWest Group, remediation of systems and controls, public or
private censure, restriction of NatWest Group's business activities and/or
fines.
Any of the events or circumstances mentioned in this paragraph or below could
have a material adverse effect on NatWest Group, its business, authorisations
and licences, reputation, results of operations or the price of securities
issued by it, or lead to material additional provisions being taken.
NatWest Group is co-operating fully with the matters described below.
US investigations relating to fixed-income securities
In December 2021, NWM Plc pled guilty in the United States District Court for
the District of Connecticut to one count of wire fraud and one count of
securities fraud in connection with historical spoofing conduct by former
employees in US Treasuries markets between January 2008 and May 2014 and,
separately, during approximately three months in 2018. The 2018 trading
occurred during the term of a non-prosecution agreement (NPA) between NWMSI
and the United States Attorney's Office for the District of Connecticut (USAO
CT), under which non-prosecution was conditioned on NWMSI and affiliated
companies not engaging in criminal conduct during the term of the NPA. The
relevant trading in 2018 was conducted by two NWM traders in Singapore and
breached that NPA. The plea agreement reached with the US Department of
Justice (DOJ) and the USAO CT resolved both the spoofing conduct and the
breach of the NPA.
The DOJ and USAO CT paused the monitorship in May 2025 and, following a
review, have determined that a monitorship was no longer necessary as a result
of NWM's notable progress in strengthening its compliance programme, certain
of NWM's remedial improvements, internal controls, and the status of
implementation of Monitor recommendations, and that reporting by NWM to the
DOJ and USAO CT on its continued compliance programme progress provided an
appropriate degree of oversight. This agreement is subject to documentation
and court approval. If approved, NWM's obligations under the plea agreement
and probation would be extended until December 2026. Should DOJ, USAO CT,
and NWM be unable to agree on the documentation or the court declines to
approve the amendment, the parties would need to agree on, and/or revert to
the court with an alternative plan, as applicable.
In the event that NWM Plc does not meet its obligations to the DOJ, this may
lead to adverse consequences such as increased costs, findings that NWM Plc
violated its probation term, and possible re-sentencing, amongst other
consequences. Other material adverse collateral consequences may occur as a
result of this matter, as further described in the Risk Factor relating to
legal, regulatory and governmental actions and investigations set out on pages
422 to 423 of the NatWest Group plc Annual Report and Accounts 2024.
Notes continued
14. Litigation and regulatory matters continued
RBSI Ltd reliance regime and referral to enforcement
In January 2023, the Jersey Financial Services Commission (JFSC) notified RBSI
Ltd that it had been referred to its Enforcement Division in relation to RBSI
Ltd's operation of the reliance regime. The reliance regime is specific to
certain Crown Dependencies and enables RBSI Ltd to rely on regulated third
parties for specific due diligence information. In July 2025, the JFSC
confirmed the investigation had concluded, having determined it reasonable to
take no further action.
Investment advice review
In October 2019, the FCA notified NatWest Group of its intention to appoint a
Skilled Person under section 166 of the Financial Services and Markets Act
2000 to conduct a review of whether NatWest Group's past business review of
investment advice provided during 2010 to 2015 was subject to appropriate
governance and accountability and led to appropriate customer outcomes. The
Skilled Person's review has concluded and, after discussion with the FCA,
NatWest Group is undertaking additional review / remediation work.
Review and investigation of treatment of tracker mortgage customers in Ulster
Bank Ireland DAC
In December 2015, correspondence was received from the Central Bank of Ireland
setting out an industry examination framework in respect of the sale of
tracker mortgages from approximately 2001 until the end of 2015.
Review and investigation of treatment of tracker mortgage customers in Ulster
Bank Ireland DAC continued
The redress and compensation process has now largely concluded, although a
small number of cases remain outstanding relating to uncontactable customers.
UBIDAC customers have lodged tracker mortgage complaints with the Financial
Services and Pensions Ombudsman (FSPO). UBIDAC challenged three FSPO
adjudications in the Irish High Court. In June 2023, the High Court found in
favour of the FSPO in all matters. UBIDAC appealed that decision to the Court
of Appeal. In September 2024, the Court of Appeal allowed UBIDAC's appeal and
set aside certain findings of the FSPO. The Court of Appeal directed one
aspect of the FSPO decisions to be remitted to the FSPO for its consideration
following an oral hearing.
Notification is awaited from FSPO whether it intends to hold oral hearings in
the two outstanding cases and/or whether a decision is expected in these
cases.
Other customer remediation in Ulster Bank Ireland DAC
UBIDAC identified other legacy issues leading to the establishment of
remediation requirements, and progress is ongoing to conclude activities.
Notes continued
15. Related party transactions
UK Government
In May 2025, the UK Government through His Majesty's Treasury (HMT) sold its
remaining shareholding in NatWest Group plc. Under UK listing rules the UK
Government and UK Government-controlled bodies remained related parties until
12 July 2025, 12 months after the UK Government shareholding in NatWest Group
plc fell below 20%.
NatWest Group enters into transactions with many of these bodies. Transactions
include the payment of: taxes - principally UK corporation tax and value added
tax; national insurance contributions; local authority rates; regulatory fees
and levies; together with banking transactions such as loans and deposits
undertaken in the normal course of banker-customer relationships.
Bank of England facilities
NatWest Group may participate in a number of schemes operated by the Bank of
England in the normal course of business.
Other related parties
(a) In their roles as providers of finance, NatWest Group companies provide
development and other types of capital support to businesses. These
investments are made in the normal course of business.
(b) To further strategic partnerships, NatWest Group may seek to invest in
third parties or allow third parties to hold a minority interest in a
subsidiary of NatWest Group. We disclose as related parties for associates and
joint ventures and where equity interests are over 10%. Ongoing business
transactions with these entities are on normal commercial terms.
(c) NatWest Group recharges the NatWest Group Pension Fund with the cost of
pension management services incurred by it.
(d) In accordance with IAS 24, transactions or balances between NatWest Group
entities that have been eliminated on consolidation are not reported.
Full details of NatWest Group's related party transactions for the year ended
31 December 2024 are included in NatWest Group plc's 2024 Annual Report and
Accounts.
16. Post balance sheet events
On 2 July 2025 NatWest Group plc gave notice to holders of
the $1,150,000,000 8.000% Perpetual Subordinated Contingent Convertible
Additional Tier 1 Capital Notes of the upcoming redemption of the Notes on 10
August 2025. The announcement and redemption of the Notes reduces CET1 by
c.5bps based on 30 June 2025 RWAs. This arises due to changes in FX rates
since the date of issuance of the Notes.
There have been no other significant events between 30 June 2025 and the date
of approval of this announcement which would require a change to, or
additional disclosure, in the announcement.
17. Date of approval
This announcement was approved by the Board of Directors on 24 July 2025.
Independent review report to NatWest Group plc
Conclusion
We have been engaged by NatWest Group plc (the 'Group') to review the
condensed consolidated financial statements in the interim results for the six
months ended 30 June 2025 which comprises of the condensed consolidated income
statement, the condensed consolidated statement of comprehensive income, the
condensed consolidated balance sheet, the condensed consolidated statement of
changes in equity, the condensed consolidated cash flow statement, related
Notes 1 to 17 and the Risk and capital management disclosures for those
identified as within the scope of our review (together the 'condensed
consolidated financial statements'). We have read the other information
contained in the interim results and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
condensed consolidated financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated financial statements in the interim
results for the six months ended 30 June 2025 are not prepared, in all
material respects, in accordance with International Accounting Standard 34
(IAS 34) Interim Financial Reporting, as adopted by the United Kingdom (UK)
and as issued by the International Accounting Standards Board (IASB), and the
Disclosure Guidance and Transparency Rules of the UK's Financial Conduct
Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in Note 1, the annual financial statements of the Group are
prepared in accordance with UK adopted International Accounting Standards, and
International Financial Reporting Standards as issued by the IASB. The
condensed consolidated financial statements included in the interim results
have been prepared in accordance with IAS 34 Interim Financial Reporting, as
adopted by the UK and as issued by the IASB, and the Disclosure Guidance and
Transparency Rules of the UK's Financial Conduct Authority.
Conclusions relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the interim results in accordance
with the Disclosure Guidance and Transparency Rules of the UK's Financial
Conduct Authority.
In preparing the interim results, the directors are responsible for assessing
the Group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the interim results, we are responsible for expressing to the
Group a conclusion on the condensed consolidated financial statements in the
interim results. Our conclusion, including our Conclusions Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of this report.
Use of our report
This report is made solely to the Group in accordance with guidance contained
in International Standard on Review Engagements 2410 (UK) "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Financial Reporting Council. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the Group,
for our work, for this report, or for the conclusions we have formed.
Ernst & Young LLP
London, United Kingdom
24 July 2025
NatWest Group plc Summary Risk Factors
Summary of Principal Risks and Uncertainties
Set out below is a summary of the principal risks and uncertainties for the
remaining six months of the financial year which could adversely affect
NatWest Group.
This summary should not be regarded as a complete and comprehensive statement
of all potential risks and uncertainties; a fuller description of these and
other risk factors is included on pages 408 to 426 of the NatWest Group plc
2024 Annual Report and Accounts and pages 283 to 304 of NatWest Group plc's
2024 Form 20-F. Any of the risks identified may have a material adverse effect
on NatWest Group's business, operations, financial condition or prospects.
Economic and political risk
- NatWest Group, its customers and its counterparties face continued
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 will continue to affect NatWest Group's
business and results.
- Fluctuations in currency exchange rates may adversely affect NatWest
Group's results and financial condition.
Business change and execution risk
- The implementation and execution of NatWest Group's strategy
carries execution and operational risks and it may not achieve its stated aims
and targeted outcomes.
- Acquisitions, divestments, or other transactions by NatWest Group
may not be successful.
- The transfer of NatWest Group's Western European corporate
portfolio involves certain risks.
Financial resilience risk
- NatWest Group may not achieve its ambitions or targets, meet its
guidance, or be in a position to continue to make discretionary capital
distributions (including dividends to shareholders).
- NatWest Group operates in markets that are highly competitive,
with competitive pressures and technology disruption.
- NatWest Group has significant exposure to counterparty and
borrower risk including credit losses, which may have an adverse effect on
NatWest Group.
- NatWest Group may not meet the prudential regulatory requirements
for liquidity and funding or may not be able to adequately access sources of
liquidity and funding, which could trigger the execution of certain management
actions or recovery options.
- NatWest Group may not meet the prudential regulatory requirements
for regulatory capital and MREL, or manage its capital effectively, which
could trigger the execution of certain management actions or recovery options.
- Any reduction in the credit rating and/or outlooks assigned to
NatWest Group plc, any of its subsidiaries or any of their respective debt
securities could adversely affect the availability of funding for NatWest
Group, reduce NatWest Group's liquidity and funding position and increase the
cost of funding.
- NatWest Group may be adversely affected if it fails to meet the
requirements of regulatory stress tests.
- NatWest Group could incur losses or be required to maintain higher
levels of capital as a result of limitations or failure of various models.
- NatWest Group's financial statements are sensitive to underlying
accounting policies, judgements, estimates and assumptions.
- Changes in accounting standards may materially impact NatWest
Group's financial results.
- The value or effectiveness of any credit protection that NatWest
Group has purchased depends on the value of the underlying assets and the
financial condition of the insurers and counterparties.
- NatWest Group is subject to regulatory oversight in respect of
resolution, and NatWest Group could be adversely affected should the BoE in
the future deem NatWest Group's preparations to be inadequate.
- NatWest Group may become subject to the application of UK
statutory stabilisation or resolution powers which may result in, for example,
the cancellation, transfer or dilution of ordinary shares, or the write-down
or conversion of certain other of NatWest Group's securities.
NatWest Group plc summary risk factors continued
Operational and IT resilience risk
- Operational risks (including reliance on third party suppliers and
outsourcing of certain activities) are inherent in NatWest Group's businesses.
- NatWest Group is subject to sophisticated and frequent
cyberattacks, and compliance with cybersecurity and data protection
regulations is becoming increasingly complex.
- NatWest Group's operations and strategy are highly dependent on
the accuracy and effective use of data.
- NatWest Group's operations are highly dependent on its complex IT
systems and any IT failure could adversely affect NatWest Group.
- NatWest Group relies on attracting, retaining and developing
diverse senior management and skilled personnel, and is required to maintain
good employee relations.
- A failure in NatWest Group's risk management framework could
adversely affect NatWest Group, including its ability to achieve its strategic
objectives.
- NatWest Group's operations are subject to inherent reputational
risk.
Legal and regulatory risk
- NatWest Group's businesses are subject to substantial regulation
and oversight, which are constantly evolving and may adversely affect NatWest
Group.
- NatWest Group is exposed to the risks of various litigation
matters, regulatory and governmental actions and investigations as well as
remedial undertakings, the outcomes of which are inherently difficult to
predict, and which could have an adverse effect on NatWest Group.
- Changes in tax legislation (or application thereof) or failure to
generate future taxable profits may impact the recoverability of certain
deferred tax assets recognised by NatWest Group.
Climate and sustainability-related risks
- NatWest Group and its Value Chain face climate and
sustainability-related risks that may adversely affect NatWest Group.
- NatWest Group's strategy relating to climate change, ambitions,
targets and transition plan entail significant execution and/or reputational
risks and are unlikely to be achieved without significant and timely
government policy, technology and customer behavioural changes.
- There are significant limitations related to accessing accurate,
reliable, verifiable, auditable, consistent and comparable climate and other
sustainability-related data that contribute to substantial uncertainties in
accurately modelling and reporting on climate and sustainability information,
as well as making appropriate important internal decisions.
- NatWest Group is becoming subject to more extensive, and
sophisticated climate and other sustainability-related laws, regulation and
oversight and there is an increasing risk of regulatory enforcement,
investigation and litigation.
Statement of directors' responsibilities
We, the directors listed below, confirm that to the best of our knowledge:
- the condensed financial statements have been prepared in accordance
with IAS 34 'Interim Financial Reporting', as adopted by the UK and as issued
by the International Accounting Standards Board (IASB);
- the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events during the
first six months and description of principal risks and uncertainties for the
remaining six months of the year); and
- the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the Board
Richard Haythornthwaite John-Paul Thwaite Katie Murray
Chair Group Chief Executive Officer Group Chief Financial Officer
24 July 2025
Board of directors
Chair Executive directors Non-executive directors
Richard Haythornthwaite John-Paul Thwaite Roisin Donnelly
Katie Murray Patrick Flynn
Geeta Gopalan
Yasmin Jetha
Stuart Lewis
Gillian Whitehead
Lena Wilson
Presentation of information
'Parent company' refers to NatWest Group plc and 'NatWest Group', 'Group' or
'we' refers to NatWest Group plc and its subsidiaries. The term 'NWH Group'
refers to NatWest Holdings Limited ('NWH Limited') and its subsidiary and
associated undertakings. The term 'NWM Group' refers to NatWest Markets Plc
('NWM Plc') and its subsidiary and associated undertakings. The term NWM N.V.
Group refers to NatWest Markets N.V. and its subsidiary and associated
undertakings. The term 'NWMSI' refers to NatWest Markets Securities, Inc. The
term 'RBS plc' refers to The Royal Bank of Scotland plc. The term 'NWB Plc'
refers to National Westminster Bank Plc. The term RBSI Ltd refers to The Royal
Bank of Scotland International Limited. Effective from Q2 2025, the reportable
segment Private Banking was renamed Private Banking & Wealth Management.
This does not change the financial results of Private Banking & Wealth
Management or the consolidated financial results of NatWest Group.
NatWest Group 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 where the amounts are denominated in pounds
sterling ('GBP'). 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 accounts
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.
Forward-looking statements
This document may include forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1995, such as
statements with respect to NatWest Group's financial condition, results of
operations and business, including its strategic priorities, financial,
investment and capital targets, and climate and sustainability related
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', 'target', 'goal', 'objective', 'may', 'outlook',
'prospects' and similar expressions or variations on these expressions are
intended to identify forward-looking statements. In particular, this document
may include forward-looking statements relating, but not limited to: NatWest
Group's outlook, guidance and targets (including in relation to RoTE, total
income, other operating expenses, loan impairment rate, CET1 ratio, RWA
levels, payment of dividends and participation in directed buybacks), its
financial position, profitability and financial performance, the
implementation of its strategy, its access to adequate sources of liquidity
and funding, its regulatory capital position and related requirements, its
impairment losses and credit exposures under certain specified scenarios,
substantial regulation and oversight, ongoing legal, regulatory and
governmental actions and investigations. Forward-looking statements are
subject to a number of risks and uncertainties that might cause actual results
and performance to differ materially from any expected future results or
performance expressed or implied by the forward-looking statements. Factors
that could cause or contribute to differences in current expectations include,
but are not limited to, future growth initiatives (including acquisitions,
joint ventures and strategic partnerships), the outcome of legal, regulatory
and governmental actions and investigations, the level and extent of future
impairments and write-downs, legislative, political, fiscal and regulatory
developments, accounting standards, competitive conditions, technological
developments, interest and exchange rate fluctuations, general economic and
political conditions and uncertainties, exposure to third party risk,
operational risk, conduct risk, cyber, data and IT risk, financial crime risk,
key person risk and credit rating risk and the impact of climate and
sustainability related risks and the transitioning to a net zero economy.
These and other factors, risks and uncertainties that may impact any
forward-looking statement or NatWest Group plc's actual results are discussed
in NatWest Group plc's 2024 Annual Report and Accounts on Form 20-F, NatWest
Group's Interim Management Statement for Q1 and H1 2025 on Form 6-K, and its
other public filings. The forward-looking statements contained in this
document speak only as of the date of this document and NatWest Group plc does
not assume or undertake any obligation or responsibility to update any of the
forward-looking statements contained in this document, whether as a result of
new information, future events or otherwise, except to the extent legally
required.
Additional information
Share information
30 June 31 March 31 December
2025 2025 2024
Ordinary share price 511 451 402
(pence)
Number of ordinary shares in issue (millions) 8,331 8,331 8,331
Financial calendar
2025 third quarter interim management statement 24 October 2025
Contacts
Analyst enquiries: Claire Kane, Investor
Relations +44 (0) 20 7672 1758
Media enquiries: NatWest Group Press
Office +44 (0) 7557
316 540
Management presentation Fixed income call
Date: 25 July 2025 25 July 2025
Time: 9:00am 1:00pm
Zoom ID: 958 3629 4493 920 6772 7672
Available on natwestgroup.com/results (http://www.rbs.com/results)
- Interim Results 2025 and presentation slides.
- A financial supplement containing income statement, balance sheet
and segment performance information for the five quarters ended 30 June 2025.
- NatWest Group Pillar 3 at 30 June 2025.
Non-IFRS financial measures
NatWest Group prepares its financial statements in accordance with UK-adopted
International Accounting Standards (IAS) and International Financial Reporting
Standards (IFRS). This document contains a number of non-IFRS measures, or
alternative performance measures, defined under the European Securities and
Markets Authority (ESMA) guidance, or non-GAAP financial measures in
accordance with the Securities and Exchange Commission (SEC) regulations.
These measures 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.
The non-IFRS measures 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. The
non-IFRS measures also include a calculation of metrics that are used
throughout the banking industry.
These non-IFRS measures are not a substitute for IFRS measures and a
reconciliation to the closest IFRS measure is presented where appropriate.
Measure Description
Cost:income ratio (excl. litigation and conduct) The cost:income ratio (excl. litigation and conduct) is calculated as other
operating expenses (operating expenses less litigation and conduct costs)
Refer to table 2. Cost:income ratio (excl. litigation and conduct) on page divided by total income. Litigation and conduct costs are excluded as they are
110. one-off in nature, difficult to forecast for Outlook purposes and distort
period-on-period comparisons.
Customer deposits excluding central items Customer deposits excluding central items is calculated as total NatWest Group
customer deposits excluding Central items & other customer deposits.
Refer to Segment performance on pages 11-15 for components of calculation. Central items & other includes Treasury repo activity and Ulster Bank RoI.
The exclusion of Central items & other removes the volatility relating
to Treasury repo activity and the reduction of deposits as part of our
withdrawal from the Republic of Ireland.
These items may distort period-on-period comparisons and their removal gives
the user of the financial statements a better understanding of the movements
in customer deposits.
Funded assets Funded assets is calculated as total assets less derivative assets. This
measure allows review of balance sheet trends exclusive of the volatility
Refer to Condensed consolidated balance sheet on page 74 for components of associated with derivative fair values.
calculation.
Loan:deposit ratio (excl. repos and reverse repos) Loan:deposit ratio (excl. repos and reverse repos) is calculated as net
customer loans held at amortised cost excluding reverse repos divided by total
Refer to table 5. Loan:deposit ratio (excl. repos and reverse repos) on page customer deposits excluding repos. This metric is used to assess liquidity.
111.
The removal of repos and reverse repos reduces volatility and presents the
ratio on a basis that is comparable to UK peers. The nearest ratio using IFRS
measures is: loan:deposit ratio - this is calculated as net loans to customers
held at amortised cost divided by customer deposits.
NatWest Group Return on Tangible Equity NatWest Group Return on Tangible Equity comprises annualised profit or loss
for the period attributable to ordinary shareholders divided by average
Refer to table 7. NatWest Group Return on Tangible Equity on page 112. tangible equity. Average tangible equity is average total equity excluding
average non-controlling interests, average other owners' equity and average
intangible assets. This measure shows the return NatWest Group generates on
tangible equity deployed. It is used to determine relative performance of
banks and used widely across the sector, although different banks may
calculate the rate differently. The nearest ratio using IFRS measures is:
return on equity - this comprises profit attributable to ordinary shareholders
divided by average total equity.
Non-IFRS financial measures continued
Measure Description
Net interest margin and average interest earning assets Net interest margin is net interest income, as a percentage of average
interest earning assets (IEA).
Refer to Segment performance on pages 11-15 for components of calculation.
Average IEA are daily average IEA of the banking business of NatWest Group and
primarily consists of cash and balances at central banks, loans to banks,
loans to customers and other financial assets. It excludes trading balances
and assets in treasury repurchase agreements that have not been derecognised.
Average IEA shows the average asset base generating interest over the period.
Net loans to customers excluding central items Net loans to customers excluding central items is calculated as total NatWest
Group net loans to customers excluding Central items & other net loans to
Refer to Segment performance on pages 11-15 for components of calculation. customers. Central items & other includes Treasury reverse repo activity
and Ulster Bank RoI. The exclusion of Central items & other removes the
volatility relating to Treasury reverse repo activity and the reduction of
loans to customers as part of our withdrawal from the Republic of Ireland.
This allows for better period-on-period comparisons and gives the user of the
financial statements a better understanding of the movements in net loans to
customers.
Operating expenses excluding litigation and conduct The management analysis of operating expenses shows litigation and conduct
costs separately. These amounts are included within staff costs and other
Refer to table 4. Operating expenses excluding litigation and conduct on page administrative expenses in the statutory analysis. Other operating expenses
111. excludes litigation and conduct costs, which are more volatile and may distort
period-on-period comparisons.
Segmental return on equity Segment return on equity comprises segmental operating profit or loss,
adjusted for paid-in equity and tax, divided by average notional equity.
Refer to table 8. Segmental return on equity on page 112. Average RWAe is defined as average segmental RWAs incorporating the effect of
capital deductions. This is multiplied by an allocated equity factor for each
segment to calculate the average notional equity. This measure shows the
return generated by operating segments on equity deployed.
Tangible net asset value (TNAV) per ordinary share TNAV per ordinary share is calculated as tangible equity divided by the number
of ordinary shares in issue. This is a measure used by external analysts in
Refer to table 3. Tangible net asset value (TNAV) per ordinary share on page valuing the bank and allows for comparison with other per ordinary share
110. metrics including the share price. The nearest ratio using IFRS measures is:
net asset value (NAV) per ordinary share - this comprises ordinary
shareholders' interests divided by the number of ordinary shares in issue.
Total combined assets and liabilities (CAL) - Private Banking & Wealth CAL refers to customer deposits, net loans to customers (amortised cost) and
Management AUMA. To avoid double counting, investment cash is deducted as it is reported
within customer deposits and AUMA.
Refer to table 6. Total combined assets and liabilities (CAL) - Private
Banking & Wealth Management on page 111. The components of CAL are key drivers of income and provide a measure of
growth and strength of the business on a comparable basis.
Total income excluding notable items Total income excluding notable items is calculated as total income less
notable items. The exclusion of notable items aims to remove the impact of
Refer to table 1. Total income excluding notable items on page 110. one-offs and other items which may distort period-on-period comparisons.
Non-IFRS financial measures continued
1. Total income excluding notable items
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2025 2024 2025 2025 2024
£m £m £m £m £m
Continuing operations
Total income 7,985 7,134 4,005 3,980 3,659
Less notable items:
Commercial & Institutional
Own credit adjustments (OCA) 3 (7) (3) 6 (2)
Central items & other
Share of associate profits/(losses) for Business Growth Fund 14 11 (1) 15 4
Interest and FX management derivatives not in hedge accounting 6 126 (1) 7 67
relationships
23 130 (5) 28 69
Total income excluding notable items 7,962 7,004 4,010 3,952 3,590
2. Cost:income ratio (excl. litigation and conduct)
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2025 2024 2025 2025 2024
£m £m £m £m £m
Continuing operations
Operating expenses 4,018 4,057 2,039 1,979 2,005
Less litigation and conduct costs (118) (101) (74) (44) (77)
Other operating expenses 3,900 3,956 1,965 1,935 1,928
Total income 7,985 7,134 4,005 3,980 3,659
Cost:income ratio 50.3% 56.9% 50.9% 49.7% 54.8%
Cost:income ratio (excl. litigation and conduct) 48.8% 55.5% 49.1% 48.6% 52.7%
3. Tangible net asset value (TNAV) per ordinary share
As at
30 June 31 March 31 December
2025 2025 2024
Ordinary shareholders' interests (£m) 35,929 35,562 34,070
Less intangible assets (£m) (7,513) (7,537) (7,588)
Tangible equity (£m) 28,416 28,025 26,482
Ordinary shares in issue (millions) (1) 8,088 8,067 8,043
NAV per ordinary share (pence) 444p 441p 424p
TNAV per ordinary share (pence) 351p 347p 329p
(1) The number of ordinary shares in issue excludes own shares
held.
Non-IFRS financial measures continued
4. Operating expenses excluding litigation and conduct
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2025 2024 2025 2025 2024
£m £m £m £m £m
Other operating expenses
Staff expenses 2,099 2,112 1,044 1,055 1,064
Premises and equipment 587 579 293 294 286
Other administrative expenses 657 757 337 320 343
Depreciation and amortisation 557 508 291 266 235
Total other operating expenses 3,900 3,956 1,965 1,935 1,928
Litigation and conduct costs
Staff expenses 30 35 16 14 21
Other administrative expenses 88 66 58 30 56
Total litigation and conduct costs 118 101 74 44 77
Total operating expenses 4,018 4,057 2,039 1,979 2,005
Total operating expenses excluding litigation and conduct 3,900 3,956 1,965 1,935 1,928
5. Loan:deposit ratio (excl. repos and reverse repos)
As at
30 June 31 March 31 December
2025 2025 2024
£m £m £m
Loans to customers - amortised cost 407,135 398,806 400,326
Less reverse repos (30,400) (30,258) (34,846)
Loans to customers - amortised cost (excl. reverse repos) 376,735 368,548 365,480
Customer deposits 436,756 434,617 433,490
Less repos (988) (1,070) (1,363)
Customer deposits (excl. repos) 435,768 433,547 432,127
Loan:deposit ratio (%) 93% 92% 92%
Loan:deposit ratio (excl. repos and reverse repos) (%) 86% 85% 85%
6. Total combined assets and liabilities (CAL) - Private Banking & Wealth Management
As at
30 June 31 March 31 December
2025 2025 2024
£bn £bn £bn
Net loans to customers (amortised cost) 18.6 18.4 18.2
Customer deposits 41.3 41.2 42.4
Assets under management and administration (AUMA) 51.8 48.5 48.9
Less investment cash included in both customer deposits and AUMA (1.3) (1.2) (1.1)
Total combined assets and liabilities (CAL) 110.4 106.9 108.4
Non-IFRS financial measures continued
7. NatWest Group Return on Tangible Equity
Half year ended and as at Quarter ended and as at
30 June 30 June 30 June 31 March 30 June
2025 2024 2025 2025 2024
£m £m £m £m £m
Profit attributable to ordinary shareholders 2,488 2,099 1,236 1,252 1,181
Annualised profit attributable to ordinary shareholders 4,976 4,198 4,944 5,008 4,724
Average total equity 40,817 37,535 41,474 40,354 37,659
Adjustment for average other owners' equity and intangible assets (13,336) (11,909) (13,529) (13,228) (12,080)
Adjusted total tangible equity 27,481 25,626 27,945 27,126 25,579
Return on equity 12.2% 11.2% 11.9% 12.4% 12.5%
Return on Tangible Equity 18.1% 16.4% 17.7% 18.5% 18.5%
8. Segmental return on equity
Half year ended 30 June 2025 Half year ended 30 June 2024
Private Banking Private Banking
Retail & Wealth Commercial Retail & Wealth Commercial
Banking Management & Institutional Banking Management & Institutional
Operating profit (£m) 1,485 179 1,984 1,098 99 1,707
Paid-in equity cost allocation (£m) (49) (8) (129) (34) (8) (83)
Adjustment for tax (£m) (402) (48) (464) (298) (25) (406)
Adjusted attributable profit (£m) 1,034 123 1,391 766 66 1,218
Annualised adjusted attributable profit (£m) 2,068 246 2,783 1,532 131 2,436
Average RWAe (£bn) 67.9 11.2 107.5 62.2 11.1 109.0
Equity factor 12.8% 11.1% 13.9% 13.4% 11.2% 13.8%
Average notional equity (£bn) 8.7 1.2 14.9 8.3 1.2 15.0
Return on equity (%) 23.8% 19.8% 18.6% 18.4% 10.5% 16.2%
Quarter ended 30 June 2025 Quarter ended 31 March 2025 Quarter ended 30 June 2024
Private Banking Private Banking Private Banking
Retail & Wealth Commercial Retail & Wealth Commercial Retail & Wealth Commercial
Banking Management & Institutional Banking Management & Institutional Banking Management & Institutional
Operating profit (£m) 735 102 964 750 77 1,020 609 66 938
Paid-in equity cost allocation (£m) (26) (4) (66) (23) (4) (63) (18) (4) (43)
Adjustment for tax (£m) (199) (27) (225) (204) (20) (239) (165) (17) (224)
Adjusted attributable profit (£m) 510 71 673 523 53 718 426 45 671
Annualised adjusted attributable profit (£m) 2,042 282 2,694 2,092 212 2,872 1,702 179 2,685
Average RWAe (£bn) 68.9 11.3 108.3 66.9 11.1 106.8 62.7 11.1 109.0
Equity factor 12.8% 11.1% 13.9% 12.8% 11.1% 13.9% 13.4% 11.2% 13.8%
Average notional equity (£bn) 8.8 1.3 15.1 8.6 1.2 14.8 8.4 1.2 15.0
Return on equity (%) 23.2% 22.5% 17.9% 24.5% 17.1% 19.3% 20.3% 14.4% 17.8%
Performance measures not defined under IFRS
The table below summarises other performance measures used by NatWest Group,
not defined under IFRS, and therefore a reconciliation to the nearest IFRS
measure is not applicable.
Measure Description
AUMA AUMA comprises both assets under management (AUM) and assets under
administration (AUA) serviced through the Private Banking & Wealth
Management segment. AUM comprise assets where the investment management is
undertaken by Private Banking & Wealth Management on behalf of Private
Banking & Wealth Management, Retail Banking and Commercial &
Institutional customers. AUA comprise i) third party assets held on an
execution-only basis in custody by Private Banking & Wealth Management,
Retail Banking and Commercial & Institutional for their customers, for
which the execution services are supported by Private Banking & Wealth
Management ii) AUA of Cushon, acquired on 1 June 2023, which are supported by
Private Banking & Wealth Management and held and managed by third parties.
This measure is tracked and reported as the amount of funds that we manage or
administer, and directly impacts the level of investment income that we
receive.
AUMA income AUMA income includes investment income which reflects an ongoing fee as
percentage of assets and transactional income related to investment services
comprised of one-off fees for advice services, trading and exchange services,
protection and alternative investing services. AUMA is a core driver of
non-interest income, especially with respect to ongoing investment income and
this measure provides a means of reporting the income earned on AUMA.
AUMA net flows AUMA net flows represents assets under management (AUM net flows) and assets
under administration (AUA net flows). AUMA net flows is reported and tracked
to monitor the business performance of new business inflows and management of
existing client withdrawals across Private Banking & Wealth Management,
Retail Banking and Commercial & Institutional.
Capital generation pre-distributions Capital generation pre-distributions refers to the change in the CET1 ratio in
the period, before distributions to ordinary shareholders. It reflects the
capital generated through business activities and all other movements,
including attributable profit for the period, impacts from acquisitions and
disposals, and risk-weighted asset (RWA) changes, prior to the deduction of
ordinary shareholder distributions such as ordinary dividends and share
buybacks. It is used to show the capital generated in the period that is
available for deployment in the business and distribution to shareholders.
Climate and sustainable funding and financing The climate and sustainable funding and financing metric is used by NatWest Group to measure the level of support it provides customers, through lending products and underwriting activities, to help in their transition towards a net zero, climate resilient
and sustainable economy. During Q1 2025 we exceeded our target to provide £100 billion between 1 July 2021 and the end of 2025. To reflect our progress we have announced a new target to provide £200 billion in climate and transition finance between 1 July
2025 and the end of 2030. As part of this we will continue to monitor progress against our aim to provide £10 billion in lending for EPC A and B residential properties between 1 January 2023 and the end of 2025. The climate and sustainable funding and
financing framework which underpinned our previous £100 billion target has been retired and replaced with our climate and transition finance framework, available on natwestgroup.com.
Loan impairment rate Loan impairment rate is the annualised loan impairment charge divided by gross customer loans. This measure is used to assess the credit quality of the loan book.
Third party rates Third party customer asset rate is calculated as annualised interest receivable on third-party loans to customers as a percentage of third-party loans to customers. This excludes assets of disposal groups, intragroup items, loans to banks and liquid asset
portfolios. Third party customer funding rate reflects interest payable or receivable on third-party customer deposits, including interest bearing and non- interest bearing customer deposits. Intragroup items, bank deposits, debt securities in issue and
subordinated liabilities are excluded for customer funding rate calculation.
Wholesale funding Wholesale funding comprises deposits by banks (excluding repos), debt securities in issue and subordinated liabilities. Funding risk is the risk of not maintaining a diversified, stable and cost-effective funding base. The disclosure of wholesale funding
highlights the extent of our diversification and how we mitigate funding risk.
Legal Entity Identifier: 2138005O9XJIJN4JPN90
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