What is the revenue and EPS growth rate for Natwest Group year over year?

Did Natwest Group beat or miss consensus estimates last quarter?

What guidance did Natwest Group's management provide for the next earnings period?

What is Natwest Group's gross profit margin?

What is the market's earnings forecast for Natwest Group next quarter?

What does Natwest Group do and what are its main business segments?

What is Natwest Group's latest dividend and current dividend yield?

What factors drove the changes in Natwest Group's revenue and profit?

- **Revenue Growth**: Lending up 4.4% to GBP 388 billion, driven by mortgage (GBP 5 billion), unsecured (GBP 2.9 billion), and commercial (GBP 7.9 billion) segments.
- **Financial Strength**: Q3 income up 3.9%, CET1 ratio at 14.2%, and 202 bps capital generation year-to-date.
- **Strategic Focus**: AI investment, platform simplification (24 Retail platforms decommissioned), and 70,000 new customers.
- **Updated Guidance**: Full-year income to GBP 16.3 billion, RoTE >18%, and one rate cut expected to 3.75%.

**【CEO Summary Section】**
- Delivered strong Q3 performance with broad-based lending growth of 4.4% year-to-date to GBP 388 billion, driven by mortgage, unsecured, and commercial lending.
- Emphasized disciplined growth strategy, including 70,000 new customers and GBP 5 billion in mortgage lending for first-time buyers.
- Updated full-year guidance: Income to GBP 16.3 billion, return on tangible equity >18%, and cost/income ratio target of 47.8%.
- Highlighted AI investment and simplification initiatives, including 24 platform decommissions in Retail.

**【CFO Financial Commentary】**
- Q3 income grew 3.9% to GBP 4.2 billion, with net interest income up 3% and noninterest income stable despite notable items.
- Operating expenses down 2.1% to GBP 2 billion, driven by lower litigation costs and cost control.
- CET1 ratio improved to 14.2%, generating 101 basis points of capital in Q3 and 202 bps year-to-date.
- Full-year outlook: Income guidance raised to GBP 16.3 billion, with one expected rate cut to 3.75% by year-end.
- Structural hedge contributed 20 basis points to NIM, with no plans to extend duration beyond current 2.5-year average.

**【Q&A Highlights】**
- **Deposit Strategy**: Fixed-term outflows due to large maturities, but 80-85% retention rates; focus on balancing value and volume with 88% LDR.
- **Noninterest Income Momentum**: Strong performance in cards, currencies, and asset management; 14.5% AUM growth to GBP 56 billion.
- **Cost Management**: 5% cost/income ratio improvement year-to-date; confident in maintaining 47.8% target despite inflation.
- **Capital Allocation**: GBP 750 million buyback (50% completed); CET1 target range of 13-14% with flexibility for M&A or growth.
- **2026 Outlook**: Income growth driven by lending, fee income, and hedge; cautious on noninterest income normalization.
- **Long-Term Targets**: 2028 guidance to be shared in February, focusing on operating leverage and capital efficiency.

NatWest Group plc (NWG) Q3 2025 Earnings Call Transcript

- **Revenue Surge**: H1 2025 revenue up 13.7% to £8 billion, driven by lending growth and the Sainsbury's acquisition.
- **Dividend & Buyback**: 58% higher interim dividend and £750 million buyback, reflecting strong capital generation.
- **Climate Ambition**: £200 billion climate finance target by 2030, up from £110 billion.
- **Efficiency Boost**: Cost-to-income ratio reduced to 49%, with £1 billion+ hedge tailwind in 2026.
- **Customer Expansion**: 1 million new customers via Sainsbury's, boosting credit card and lending portfolios.
- **Capital Strength**: CET1 ratio stable at 13.6%, with 101 basis points of capital generation in H1.

**【Management Opening Remarks】**
- NatWest Group has transitioned to private ownership, marking a new chapter post-government stake sale. This shift has enabled strategic investments and growth initiatives.
- **Financial Highlights**: H1 2025 revenue grew 13.7% to £8 billion, operating profit rose 15% to £3.6 billion, and EPS increased 28% to 31p. A £750 million share buyback was announced, alongside a 58% higher interim dividend.
- **Customer Growth**: Acquired 100,000+ new customers organically and 1 million via the Sainsbury's transaction, expanding lending and deposits.
- **Strategic Priorities**: 
  - **Climate Finance**: Targeting £200 billion in climate and transition finance by 2030, up from £110 billion.
  - **Simplification**: Digitized 30 customer journeys, reduced risk-weighted assets (RWAs) by £2.9 billion, and streamlined operations.
  - **AI Integration**: Collaborated with AWS and Accenture to enhance data capabilities and customer engagement.

**【CFO Financial Commentary】**
- **Income Growth**: Total income (excluding notable items) reached £16 billion, driven by net interest income (+1.6%) and noninterest income (+2%).
- **Lending & Deposits**: Customer lending grew 3.2% to £384 billion, deposits rose 1% to £436 billion, and assets under management increased 5.9%.
- **Hedge Impact**: The structural hedge contributed £1 billion in 2025, with expectations of a £1 billion+ increase in 2026.
- **Cost Efficiency**: Operating expenses fell 1.4% to £3.9 billion, reducing the cost-to-income ratio to 49% from 56%.
- **Capital Management**: Generated 101 basis points of capital, maintaining a CET1 ratio of 13.6%.

**【Q&A Highlights】**
- **Deposit Strategy**: Stable market share despite competitive ISA season; disciplined pricing maintained deposit mix stability.
- **Cost Management**: £8.1 billion in operating expenses for 2025, including £100 million in one-time integration costs, supported by wage inflation and efficiency gains.
- **Lending Outlook**: Confident in broad-based growth across retail and commercial segments, driven by project finance and sustainable lending.
- **Capital Allocation**: Focus on buybacks and dividends, with no immediate M&A plans, maintaining a 13%-14% CET1 target range.
- **Hedge Stability**: 90% of 2025 hedge notional locked in, ensuring predictable income contributions.


NatWest Group plc (NWG) Q2 2025 Earnings Call Transcript

- **Q1 Strong Performance**: Income up 15.8% YoY, ROTE of 18.5%, and EPS growth of 48%.
- **Strategic Deals Pay Off**: Sainsbury's transaction to add GBP 100 million in annual income.
- **Margin Expansion**: NIM up 8 bps, driven by deposit margin and structural hedge.
- **Updated Guidance**: 2025 income at upper end of GBP 15.2-15.7 billion, ROTE at 15%-16%.
- **Regulatory Focus**: CEO advocates for ring-fencing review to reduce costs and improve customer access.

**【CEO Summary Section】**
NatWest Group reported a strong Q1 2025 performance, with income up 15.8% YoY to GBP 4 billion, driven by disciplined growth and strategic initiatives. Key highlights include:
- Completion of the Sainsbury's Bank transaction, adding 1 million customers and GBP 2.5 billion in lending.
- Launch of a new mortgage product enabling first-time buyers to combine incomes.
- Updated 2025 guidance: income at the upper end of GBP 15.2-15.7 billion range, and return on tangible equity (ROTE) at the upper end of 15%-16%.
- Return on tangible equity of 18.5%, with EPS up 48% to 15.5p.

**【CFO Financial Commentary】**
- **Income Growth**: 15.8% YoY, with net interest margin (NIM) up 8 bps to 227 bps, driven by deposit margin expansion and structural hedge benefits.
- **Lending**: Gross loans up GBP 3.5 billion to GBP 375 billion, with mortgage balances growing 2.1% and unsecured credit up 16.9 billion.
- **Deposits**: Customer deposits up 0.5% to GBP 433 billion, with retail banking and C&I both contributing growth.
- **Capital Management**: CET1 ratio of 13.8%, with capital generation of 49 bps before distributions. RWAs increased by GBP 3.8 billion to GBP 187 billion.
- **Sainsbury's Impact**: Expected to add GBP 100 million in annual income, with one-time integration costs of GBP 100 million.

**【Q&A Highlights】**
- **Noninterest Income Sustainability**: CFO noted Q1 strength not representative of a run rate, with 80% of structural hedge tailwind locked in for 2025.
- **Lending Margins**: NIM up 2 bps in Q1, driven by unsecured and corporate lending growth; expect ongoing margin management amid rate cuts.
- **Asset Quality**: Impairment charge of GBP 189 million (19 bps of loans), with PMA of GBP 300 million for macroeconomic risks.
- **Regulatory Considerations**: CEO called for review of ring-fencing rules, citing cost and complexity impacts on customer service.
- **Capital Allocation**: Focus on high-return opportunities in mortgages, unsecured credit, and CIB; no change to 13%-14% CET1 target range.


NatWest Group plc (NWG) Q1 2025 Earnings Call Transcript

NatWest Group PLC (NWG) Q2 2024 Earnings Call Transcript

- **Strong Q1 Performance**: £3.4 billion income, 14.2% RoTE, and £1.3 billion operating profit highlight robust financial health.
- **Lending and Deposit Growth**: Customer lending up £1.4 billion, deposits £420 billion, with assets under management growing £2.3 billion.
- **Cost Efficiency**: Operating expenses down 4.7%, NIM stable at 205 basis points despite mortgage margin challenges.
- **Capital Management**: £300 million buyback underway, CET1 at 13.5%, targeting 13%-14% range.
- **Strategic Confidence**: Reaffirmed 2026 RoTE >13% target, despite macroeconomic uncertainties.

**【Management Opening Remarks】**
- **Revenue Growth and Strategic Focus**: CEO highlighted a sixth consecutive year of customer lending growth to £361 billion, driven by improving mortgage demand and corporate lending. Deposit balances reached £420 billion, with assets under management growing by £2.3 billion. Operating profit was £1.3 billion, resulting in a return on tangible equity of 14.2%.
- **Capital Deployment**: Completed a £500 million buyback and initiated a £300 million program, with CET1 ratio at 13.5%. The government reduced its shareholding to below 29%, aligning with plans to exit by 2026.

**【CFO Financial Commentary】**
- **Financial Performance**: Income of £3.4 billion (down 0.8% QoQ) with operating expenses down 4.7% to £2.1 billion. Impairment charge was £93 million, stable across businesses. Group NIM was 205 basis points, stable despite mortgage margin headwinds.
- **Lending and Deposits**: Gross loans increased £1.4 billion, with Commercial & Institutional up £3.9 billion. Deposits grew £0.9 billion, outperforming expectations, with migration to interest-bearing accounts slowing.
- **Cost Management**: Costs of £2 billion included £87 million in bank levies, with total levies expected £200 million for the year. CET1 ratio rose to 13.5%, targeting 13%-14% range.

**【Q&A Highlights】**
- **Rate Sensitivity and NIM**: CFO emphasized NIM stability across businesses, with sensitivity to rate cuts. Q1 NIM of 205 basis points included a 4 basis point funding benefit, which may not repeat. Mortgage spreads near 70 basis points, nearing back book levels.
- **Mortgage Market Dynamics**: Flow share stable at 10.5%, with application volumes up. Mortgage margin headwinds abating as new business nears 70 basis points.
- **Capital and Dividends**: On-market buybacks continue, with CET1 management to 13%-14%. Dividend payout ratio maintained at ~40%, despite IFRS 9 volatility.
- **Credit Quality**: PMA for economic uncertainty reduced £18 million, with impairments expected below 20 basis points for the year.

NWG

NWG fundamentals

Earnings Call

You can ask Aime