NatWest Group (NWG) Investor Update summary

Strategic priorities and financial performance

• Strategic priorities for 2025-2027 include disciplined growth, simplification, digitalisation, and active capital management, targeting a 15%-16% return on tangible equity for 2025 and above 15% for 2027.

• Commercial & Institutional is the largest segment, serving 1.5 million customers and delivering 54% of group income and 58% of operating profit in 2024, with income rising to £7.96bn and ROE at 17.2%.

• Major restructuring is complete, leveraging strong market positions across retail, private, and commercial banking, and maintaining leading or top-three positions in key segments.

• Active capital management included a £5.7bn reduction in risk-weighted assets in 2024, with four significant risk transfers totaling £3bn.

• Dividend payout ratio raised to 50%, with ongoing efforts to improve cost efficiency through digitalization and simplification.

Growth opportunities and business focus

• Leading market share in UK business startups, social housing finance, and mid-market banking, with plans to expand in trade finance, infrastructure, and the innovation economy.

• Commercial mid-market segment is a major growth area, serving over one in four UK mid-market businesses and targeting sectors like life sciences, medtech, and energy transition.

• Corporate & Institutional Banking focuses on structured finance, capital markets, and sustainable financing, with a strong international footprint.

• Business banking is digital-led, with 95% of accounts opened online and a stable deposit base of £25bn; further digitalization and automation are planned.

• Innovation in lending includes being the first UK bank to issue loans using intellectual property as collateral, supporting high-growth scale-ups.

Technology and operational transformation

• Significant investment in digital platforms, notably Bankline, with £100m invested to enhance customer and colleague experience and a 60% increase in digital self-service requests.

• AI and cloud adoption are accelerating, with AI used for summarizing calls, automating reviews, and generating 26% of Java code.

• 83% of CNI customers are digital-first, and digital transformation is expected to drive further operating leverage and cost efficiencies.

• Ongoing simplification includes reducing the technology estate by 25% and automating manual processes to improve efficiency and agility.

• Enhanced fraud, financial crime, and cyber protection measures are integral to technology investments.