Interim Results 2020 - (Part 2 of 2)

Companies

NATWEST GROUP (NWG)

UK 100

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	Half year ended
	30 June 2020					30 June 2019					31 December 2019
			Period					Period					Period
	Incremental	Total	-end	Average	Total	Incremental	Total	-end	Average	Total	Incremental	Total	-end	Average	Total
	income	income	notional	notional	yield	income	income	notional	notional	yield	income	income	notional	notional	yield
	£m	£m	£bn	£bn	%	£m	£m	£bn	£bn	%	£m	£m	£bn	£bn	%
Equity structural
hedging	209	294	24	25	2.39	197	332	29	29	2.31	201	312	25	26	2.41
Product structural
hedging	146	503	114	112	0.90	82	558	111	111	1.01	102	536	111	111	0.97
Other structural
hedging	42	78	20	20	0.78	27	84	21	21	0.79	33	82	21	21	0.79
Total	397	875	158	157	1.12	306	974	161	161	1.21	336	930	157	158	1.18


	Half year ended
	30 June	30 June	31 December
	2020	2019	2019
	£m	£m	£m
UK Personal Banking	66	38	47
Commercial Banking	80	44	55
Total	146	82	102

●	The five-year sterling swap rate fell to 0.13% at the end of June 2020 from 0.81% at December 2019. The ten-year sterling swap rate also fell, to 0.25% from 0.93%. The yield of the structural hedge fell as new product hedges and maturing hedges across the portfolio were reinvested at lower market rates. At 1.12% the overall yield was still higher than market swap rates at 30 June 2020.
●	Incremental income in excess of three-month LIBOR continued to increase. This was primarily due to lower three-month LIBOR fixings, resulting in more income benefit from the hedge.

	Parallel shifts in yield curve
	+25 basis points	-25 basis points	+100 basis points	-100 basis points
30 June 2020	£m	£m	£m	£m
Euro	2	-	78	-
Sterling	321	(143)	1,018	(147)
US dollar	20	(19)	84	(17)
Other	2	-	11	-
Total	345	(162)	1,191	(164)

30 June 2019
Euro	23	5	88	9
Sterling	201	(142)	707	(706)
US dollar	15	(9)	51	(52)
Other	(2)	2	(9)	15
Total	237	(144)	837	(734)

31 December 2019
Euro	25	(2)	129	(3)
Sterling	172	(158)	716	(706)
US dollar	16	(11)	66	(52)
Other	(1)	1	(3)	5
Total	212	(170)	908	(756)


	+25 basis points parallel upward shift			-25 basis points parallel downward shift
	Year 1	Year 2 (1)	Year 3 (1)	Year 1	Year 2 (1)	Year 3 (1)
30 June 2020	£m	£m	£m	£m	£m	£m
Structural hedges	31	97	169	(17)	(59)	(114)
Managed margin (2)	323	348	348	(134)	(72)	(87)
Other	(8)			(11)
Total	346	445	517	(162)	(131)	(201)

31 December 2019
Structural hedges	31	97	168	(27)	(90)	(154)
Managed margin (2)	195	195	196	(158)	(127)	(128)
Other	(14)			15
Total	212	292	364	(170)	(217)	(282)

●	Average traded VaR increased in H1 2020 compared to both H1 and H2 2019. This reflected Covid-19-related market volatility entering the time series used in the VaR model.
●	Despite this volatility, traded VaR remained within appetite throughout H1 2020.
●	The peaks in total, interest rate and credit spread VaR were due to client bond syndication activity, including the recent 2061 UK Gilt issuance in which NatWest Markets acted as duration manager on behalf of the UK Debt Management Office.

●	During the second quarter there was significant focus on the potential operational risks arising from the change in working practices due to the pandemic, particularly the move to home-working in order to protect staff and support customers through the crisis. Management attention also focused heavily on operational resilience to ensure that planning, controls and operational activities remained robust and appropriate .
●	NatWest Group's control environment was continually monitored to ensure that the challenges posed by adapting to the impact of Covid-19 were safely addressed.
●	There was also continued oversight of NatWest Group's preparations for the end of the transition period, following the UK's exit from the EU, to ensure that processes and systems are appropriate to ensure continuity of service for customers.

●	The impact of the pandemic on the NatWest Group's conduct risk and regulatory compliance risk profiles remained an important area of focus. This included oversight of the NatWest Group's diverse initiatives to support its customers throughout the crisis. While the NatWest Group acted to ensure customer needs were met at pace, the associated conduct and compliance risks were carefully assessed and monitored throughout.
●	In addition, there was a sustained emphasis on oversight of the NatWest Group's pricing, payment and forbearance treatment strategies to support customers in recent months, as well as prioritising the delivery of mandatory and regulatory change programmes.
●	The transition from LIBOR to risk-free rates by the end of 2021 and continued demonstration of compliance with ring-fencing rules will remain a key focus.

	Net	Net fees	Other			Impairment
	interest	and	non-interest	Total	Operating	(losses)/	Operating
	income	commissions	income	income	expenses	releases	profit/(loss)
Half year ended 30 June 2020	£m	£m	£m	£m	£m	£m	£m
UK Personal Banking	1,982	204	(1)	2,185	(1,075)	(657)	453
Ulster Bank RoI	194	44	11	249	(245)	(243)	(239)
Commercial Banking	1,370	552	81	2,003	(1,221)	(1,790)	(1,008)
Private Banking	251	130	11	392	(252)	(56)	84
RBS International	201	43	15	259	(126)	(46)	87
NatWest Markets	(34)	76	774	816	(707)	(40)	69
Central items & other	(112)	(11)	57	(66)	(124)	(26)	(216)
Total	3,852	1,038	948	5,838	(3,750)	(2,858)	(770)

Half year ended 30 June 2019
UK Personal Banking	2,084	366	(3)	2,447	(1,229)	(181)	1,037
Ulster Bank RoI	200	51	32	283	(281)	21	23
Commercial Banking	1,424	661	80	2,165	(1,262)	(202)	701
Private Banking	261	111	12	384	(232)	3	155
RBS International	242	53	15	310	(119)	3	194
NatWest Markets	(122)	48	1,016	942	(678)	36	300
Central items & other	(85)	(15)	686	586	(299)	(3)	284
Total	4,004	1,275	1,838	7,117	(4,100)	(323)	2,694

	UK						Central
	Personal	Ulster	Commercial	Private	RBS	NatWest	items
	Banking	Bank RoI	Banking	Banking	International	Markets	& other	Total
Half year ended 30 June 2020	£m	£m	£m	£m	£m	£m	£m	£m
Fees and commissions receivable
- Payment services	129	28	256	14	9	9	-	445
- Lending (credit facilities)	37	6	199	2	14	44	-	302
- Credit and debit card fees	144	10	60	4	1	-	-	219
- Investment management, trustee
and fiduciary services	1	1	-	113	17	-	-	132
- Underwriting fees	-	-	-	-	-	124	-	124
- Other	34	3	90	18	3	100	(40)	208
Total	345	48	605	151	44	277	(40)	1,430

Fees and commissions payable	(141)	(4)	(53)	(21)	(1)	(201)	29	(392)
Net fees and commissions	204	44	552	130	43	76	(11)	1,038

Half year ended 30 June 2019
Fees and commissions receivable
- Payment services	154	21	323	17	12	15	-	542
- Lending (credit facilities)	266	18	204	1	18	35	-	542
- Credit and debit card fees	189	10	84	6	1	-	-	290
- Investment management, trustee
and fiduciary services	22	2	3	91	20	-	-	138
- Underwriting fees	-	-	-	-	-	100	-	100
- Other	36	6	82	12	3	88	(77)	150
Total	667	57	696	127	54	238	(77)	1,762

Fees and commissions payable	(301)	(6)	(35)	(16)	(1)	(190)	62	(487)
Net fees and commissions	366	51	661	111	53	48	(15)	1,275

	30 June 2020		31 December 2019
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
UK Personal Banking	187,056	164,121	182,305	153,999
Ulster Bank RoI	27,631	23,607	25,385	21,012
Commercial Banking	186,013	166,074	165,399	140,863
Private Banking	23,940	29,955	23,304	28,610
RBS International	31,537	29,642	31,738	30,330
NatWest Markets	303,826	286,229	263,885	246,907
Central items & other	46,884	64,198	31,023	57,762
Total	806,887	763,826	723,039	679,483

			Amortised	Other
	MFVTPL (1)	FVOCI (2)	cost	assets	Total
Assets	£m	£m	£m	£m	£m
Cash and balances at central banks			100,281		100,281
Trading assets	72,402				72,402
Derivatives (3)	183,419				183,419
Settlement balances			7,806		7,806
Loans to banks - amortised cost (4)			12,972		12,972
Loans to customers - amortised cost (5)			352,341		352,341
Other financial assets	656	50,445	11,626		62,727
Intangible assets				6,602	6,602
Other assets				8,337	8,337
30 June 2020	256,477	50,445	485,026	14,939	806,887

Cash and balances at central banks			77,858		77,858
Trading assets	76,745				76,745
Derivatives (3)	150,029				150,029
Settlement balances			4,387		4,387
Loans to banks - amortised cost (4)			10,689		10,689
Loans to customers - amortised cost (5)			326,947		326,947
Other financial assets	715	49,283	11,454		61,452
Intangible assets				6,622	6,622
Other assets				8,310	8,310
31 December 2019	227,489	49,283	431,335	14,932	723,039

	Held-for-		Amortised	Other
	trading	DFV (6)	cost	liabilities	Total
Liabilities	£m	£m	£m	£m	£m
Bank deposits (7)			21,119		21,119
Customer deposits			408,268		408,268
Settlement balances			6,895		6,895
Trading liabilities	75,540				75,540
Derivatives (8)	179,859				179,859
Other financial liabilities		2,119	47,562		49,681
Subordinated liabilities		734	12,824		13,558
Other liabilities (9)			4,146	4,760	8,906
30 June 2020	255,399	2,853	500,814	4,760	763,826

Bank deposits (7)			20,493		20,493
Customer deposits			369,247		369,247
Settlement balances			4,069		4,069
Trading liabilities	73,949				73,949
Derivatives (8)	146,879				146,879
Other financial liabilities		2,258	42,962		45,220
Subordinated liabilities		724	9,255		9,979
Other liabilities (9)			4,029	5,618	9,647
31 December 2019	220,828	2,982	450,055	5,618	679,483

(1)	Mandatory fair value through profit or loss.
(2)	Fair value through other comprehensive income.
(3)	Includes net hedging derivatives of £298 million (31 December 2019 - £202 million).
(4)	Includes items in the course of collection from other banks of £57 million (31 December 2019 - £50 million).
(5)	Includes finance lease receivables.
(6)	Designated as at fair value through profit or loss.
(7)	Includes items in the course of transmission to other banks of nil (31 December 2019 - £2 million).
(8)	Includes net hedging derivatives of £44 million (31 December 2019 - £22 million).
(9)	Includes lease liabilities of £1,781 million (31 December 2019 - £1,823 million).

	30 June 2020			31 December 2019
	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
	£m	£m	£m	£m	£m	£m
Assets
Trading assets
Loans	-	46,646	422	-	46,172	449
Securities	17,983	7,185	166	20,865	8,704	555
Derivatives	-	182,104	1,315	-	148,800	1,229
Other financial assets
Loans	-	269	278	-	307	58
Securities	41,030	9,196	328	41,044	8,326	263
Total financial assets held at fair value	59,013	245,400	2,509	61,909	212,309	2,554

Liabilities
Trading liabilities
Deposits	-	52,969	29	-	50,944	56
Debt securities in issue	-	2,069	15	-	1,703	59
Short positions	15,365	5,093	-	15,565	5,622	-
Derivatives	-	178,895	964	-	145,818	1,061
Other financial liabilities
Debt securities in issue	-	1,769	-	-	2,117	141
Other deposits	-	350	-	-	-	-
Subordinated liabilities	-	734	-	-	724	-
Total financial liabilities held at fair value	15,365	241,879	1,008	15,565	206,928	1,317

	Half year ended
	30 June	30 June
	2020	2019
	£m	£m
Interest receivable	5,190	5,553
Interest payable	(1,338)	(1,549)

Net interest income (1)	3,852	4,004

Fees and commissions receivable	1,430	1,762
Fees and commissions payable	(392)	(487)
Income from trading activities	802	599
Other operating income	146	1,239

Non-interest income	1,986	3,113

Total income	5,838	7,117

Staff costs	(1,955)	(2,028)
Premises and equipment	(651)	(558)
Other administrative expenses	(696)	(863)
Depreciation and amortisation	(441)	(621)
Impairment of other intangible assets	(7)	(30)

Operating expenses	(3,750)	(4,100)

Profit before impairment losses	2,088	3,017
Impairment losses	(2,858)	(323)

Operating (loss)/profit before tax	(770)	2,694
Tax credit/(charge)	208	(194)

(Loss)/profit for the period	(562)	2,500

Attributable to:
Ordinary shareholders	(705)	2,038
Preference shareholders	16	20
Paid-in equity holders	192	182
Non-controlling interests	(65)	260
	(562)	2,500

	Half year ended
	30 June	30 June
	2020	2019
	£m	£m
(Loss)/profit for the period	(562)	2,500

Items that do not qualify for reclassification
Remeasurement of retirement benefit schemes	68	(68)
Profit/(loss) on fair value of credit in financial liabilities
designated at FVTPL due to own credit risk	83	(96)
FVOCI financial assets	(120)	38
Tax	-	26
	31	(100)
Items that do qualify for reclassification
FVOCI financial assets	(111)	(12)
Cash flow hedges	417	402
Currency translation	575	(241)
Tax	(179)	(122)
	702	27

Other comprehensive income/(loss) after tax	733	(73)

Total comprehensive income for the period	171	2,427

Attributable to:
Ordinary shareholders	14	1,950
Preference shareholders	16	20
Paid-in equity holders	192	182
Non-controlling interests	(51)	275
	171	2,427

	Half year ended
	30 June	30 June
	2020	2019
	£m	£m
Called-up share capital - at beginning of period	12,094	12,049
Ordinary shares issued	31	42
At end of period	12,125	12,091

Paid-in equity - at beginning of period	4,058	4,058
Redeemed/reclassified (1)	(1,277)	-
Securities issued during the period (2)	1,220	-
At end of period	4,001	4,058

Share premium account - at beginning of period	1,094	1,027
Ordinary shares issued	16	62
At end of period	1,110	1,089

Merger reserve - at beginning and end of period	10,881	10,881

FVOCI reserve - at beginning of period	138	343
Unrealised (losses)/gains	(123)	45
Realised gains	(107)	(133)
Tax	12	10
At end of period	(80)	265

Cash flow hedging reserve - at beginning of period	35	(191)
Amount recognised in equity	445	524
Amount transferred from equity to earnings	(28)	(122)
Tax	(111)	(94)
At end of period	341	117

Foreign exchange reserve - at beginning of period	1,343	3,278
Retranslation of net assets	527	30
Foreign currency losses on hedges of net assets	(63)	1
Tax	(95)	8
Recycled to profit or loss on disposal of businesses (3)	97	(335)
At end of period	1,809	2,982

Retained earnings - at beginning of period	13,946	14,312
Implementation of IFRS 16 on 1 January 2019	-	(187)

	Half year ended
	30 June	30 June
	2020	2019
	£m	£m
Own shares held - at beginning of period	(42)	(21)
Shares issued under employee share schemes	95	(58)
Own shares acquired	(77)	33
At end of period	(24)	(46)
Owners' equity at end of period	43,103	46,221

Non-controlling interests - at beginning of period	9	754
Currency translation adjustments and other movements	14	15
(Loss)/profit attributable to non-controlling interests	(65)	260
Equity raised (5)	-	45
Equity withdrawn and disposals (6)	-	(1,058)
At end of period	(42)	16

Total equity at end of period	43,061	46,237

Attributable to:
Ordinary shareholders	38,608	41,667
Preference shareholders	494	496
Paid-in equity holders	4,001	4,058
Non-controlling interests	(42)	16
	43,061	46,237

(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. Examples include most government agency securities, investment-grade corporate bonds, certain mortgage products, including CLOs, most bank loans, repos and reverse repos, less liquid listed equities, state and municipal obligations, most notes issued, and certain money market securities and 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 cash instruments which trade infrequently, certain syndicated and commercial mortgage loans, certain emerging markets 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. There were no significant transfers between level 1 and level 2.
(3)	For an analysis of debt securities held at mandatorily fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Capital and Risk management - Credit risk.
(4)	The determination of an instrument's level cannot be made at a global product level as a single product type can be in more than one level. For example, a single name corporate credit default swap could be in level 2 or level 3 depending on whether the reference counterparty's obligations are liquid or illiquid.

(1)	Trading assets comprise assets held at fair value in trading portfolios.
(2)	Other financial assets comprise fair value through other comprehensive income, designated at fair value through profit or loss and other fair value through profit or loss.
(3)	£215 million net gains on trading assets and liabilities (30 June 2019 - £383 million losses) were recorded in income from trading activities. Net gains on other instruments of nil (30 June 2019 - £14 million gains) were recorded in other operating income and interest income as appropriate.

●	Valuation reserves, comprised of credit valuation adjustments (CVA), funding valuation adjustment (FVA), bid-offer and product and deal specific reserves decreased to £951 million at 30 June 2020 (31 December 2019 - £1,033 million) with an increase in CVA reserves more than offset by reductions in other reserves.
●	CVA reserves increased to £445 million at 30 June 2020 (31 December 2019 - £386 million) due to credit spreads widening and increases in positive exposures, driven by interest rate and FX market moves, partially offset by trade novation activity.
●	FVA reserves reduced to £188 million at 30 June 2020 (31 December 2019 - £244 million) as the impact of funding spreads widening and the increases in positive exposures were more than offset by increases in negative exposures, credit spreads widening, trade novation activity and a reduction in the types of initial margin posting requirements assessed as part of FVA. The reduction in product and deal specific reserves to £170 million at 30 June 2020 (31 December 2019 - £238 million) was due to certain negative exposures increasing (driven by interest rate and FX market moves), credit spreads widening and trade novation activity.

Items where
fair value
	approximates	Carrying		Fair value hierarchy level
	carrying value	value	Fair value	Level 1	Level 2	Level 3
30 June 2020	£bn	£bn	£bn	£bn	£bn	£bn
Financial assets
Cash and balances at central banks	100.3
Settlement balances	7.8
Loans to banks	0.1	12.9	12.9	-	7.6	5.3
Loans to customers		352.3	351.0	-	17.9	333.1
Other financial assets
Securities		11.6	11.8	6.2	2.5	3.1
Financial liabilities
Bank deposits	4.6	16.5	16.5	-	10.2	6.3
Customer deposits	349.3	59.0	59.0	-	7.0	52.0
Settlement balances	6.9
Other financial liabilities
Debt securities in issue		47.6	48.0	-	41.8	6.2
Subordinated liabilities		12.8	13.4	-	13.3	0.1
Other liabilities - notes in circulation	2.1

31 December 2019
Financial assets
Cash and balances at central banks	77.9
Settlement balances	4.4
Loans to banks		10.7	10.7	-	6.2	4.5
Loans to customers		326.9	324.0	-	11.0	313.0
Other financial assets
Securities		11.5	11.6	5.9	2.8	2.9
Financial liabilities
Bank deposits	4.1	16.4	16.5	-	12.2	4.3
Customer deposits	312.4	56.8	56.9	-	7.5	49.4
Settlement balances	4.1
Other financial liabilities
Debt securities in issue		43.0	43.7	-	38.5	5.2
Subordinated liabilities		9.3	10.0	-	9.9	0.1
Other liabilities - notes in circulation	2.2


Payment		Other
	protection	customer	Litigation and
	insurance (1)	redress	other regulatory	Other (2)	Total
	£m	£m	£m	£m	£m
At 1 January 2020	1,156	314	426	781	2,677
ECL impairment charge	-	-	-	46	46
Currency translation and other movements	-	3	21	-	24
Charge to income statement	-	13	98	17	128
Release to income statement	(100)	(8)	(17)	(29)	(154)
Provisions utilised	(197)	(47)	(35)	(100)	(379)
At 31 March 2020	859	275	493	715	2,342
ECL impairment charge	-	-	-	77	77
Currency translation and other movements	-	1	2	-	3
Charge to income statement	1	62	2	134	199
Release to income statement	(150)	(7)	(4)	(54)	(215)
Provisions utilised	(204)	(49)	(11)	(106)	(370)
At 30 June 2020	506	282	482	766	2,036

(1)	The balance at 30 June 2020 includes provisions held in relation to offers made in 2019 and earlier years of £134 million .
(2)	Materially comprises provisions relating to property closures and restructuring costs.

(1)	Includes £8 million (31 December 2019 - £4 million) related to assets classified as FVOCI.
(2)	ECL provisions coverage is calculated as ECL provisions divided by loans.
(3)	ECL provisions coverage and ECL loss rates are calculated on third party loans and related ECL provisions and charge respectively. ECL loss rate is calculated as annualised third party ECL charge divided by loans. The half year ECL charge is annualised by multiplying by two.
(4)	Includes a £5 million charge (30 June 2019 - £30 million charge) related to other financial assets, of which £4 million (30 June 2019 - nil) related to assets classified as FVOCI; and £8 million (30 June 2019 - £28 million) related to contingent liabilities.
(5)	The table above shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to page 90 for Financial instruments within the scope of the IFRS 9 ECL framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £99.2 billion and debt securities of £60.5 billion (31 December 2019 - £76.1 billion and £59.4 billion respectively).

	30 June 2020			31 December 2019
	Goodwill	Other (1)	Total	Goodwill	Other (1)	Total
Cost	£m	£m	£m	£m	£m	£m
At 1 January	9,980	2,293	12,273	18,164	2,024	20,188
Currency translation and other adjustments	2	-	2	(180)	2	(178)
Acquisition of subsidiaries	-	-	-	1	-	1
Additions	-	133	133	-	380	380
Disposals and write-off of fully amortised assets (2)	-	(23)	(23)	(8,005)	(113)	(8,118)
At 30 June	9,982	2,403	12,385	9,980	2,293	12,273

Accumulated amortisation and impairment
At 1 January	4,373	1,278	5,651	12,558	1,014	13,572
Currency translation and other adjustments	2	1	3	(180)	1	(179)
Disposals and write-off of fully amortised assets	-	(19)	(19)	(8,005)	(72)	(8,077)
Charge for the year	-	141	141	-	291	291
Impairment of other intangible assets	-	7	7	-	44	44
At 30 June	4,375	1,408	5,783	4,373	1,278	5,651

Net book value at 30 June	5,607	995	6,602	5,607	1,015	6,622



		Forecast				Assumptions		Recoverable
				Long-term	Capital			amount
		ECL loss		effective	requirements	Terminal	Pre-tax	exceeded
	Goodwill	rate	C:I ratio	tax rate	CET1 ratio	growth rate	discount rate	carrying value
30 June 2020	£bn	%	%	%	%	%	%	£bn
Commercial Banking	2.6	0.36	58.7	27.0	11.5	1.6	13.7	1.6

31 December 2019
Commercial Banking	2.6	0.29	53.8	25.0	12.0	1.6	13.4	4.1

					Change to reduce
	Favourable change		Unfavourable change		headroom to nil
		Increase in VIU	Decrease in VIU
30 June 2020	%	£bn	%	£bn	%
ECL loss rates	(0.16)	0.7	0.10	(0.9)	0.17
Cost:income ratio	(1.0)	2.1	4.5	(1.5)	4.6
Forecast income	5.0	1.8	(5.0)	(1.8)	(4.3)
Effective tax rate	(1.0)	0.2	1.0	(0.2)	8.3
Capital requirements - CET 1 ratio	(1.0)	0.1	1.0	(0.1)	22.3
Terminal growth rate	1.0	0.7	(1.0)	(0.5)	(3.9)
Pre-tax discount rate	(1.0)	1.4	1.0	(1.1)	1.4

31 December 2019
ECL loss rates	(0.16)	1.6	0.10	(1.0)	0.41
Cost:income ratio	(1.0)	1.6	4.5	(0.7)	12.6
Forecast income	5.0	2.1	(5.0)	(2.1)	(9.8)
Effective tax rate	(1.0)	0.2	1.0	(0.2)	17.1
Capital requirements - CET 1 ratio	(1.0)	0.2	1.0	(0.2)	22.2
Terminal growth rate	1.0	0.8	(1.0)	(0.7)	(3.1)
Pre-tax discount rate	(1.0)	2.3	1.0	(1.8)	2.7

Howard Davies	Alison Rose-Slade	Katie Murray
Chairman	Group Chief Executive Officer	Group Chief Financial Officer

●	Statutory results on pages 78 to 106 comprising the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated balance sheet, condensed consolidated statement of changes in equity, condensed consolidated cash flow statement and the related notes 1 to 18.
●	The Capital and risk management section on pages 19 to 77 as indicated within the scope of the independent review.

	30 June 2020	31 March 2020	31 December 2019

Ordinary share price (pence)	121.6	112.9	240.3

Number of ordinary shares in issue (millions)	12,125	12,094	12,094

	Management presentation	Fixed income call	Web cast and dial in details
Date:	Friday 31 July 2020	Friday 31 July 2020	https://investors.natwestgroup.com/results-centre
Time:	9:00 am UK time	1:30 pm UK time	International - +44 (0) 20 3057 6566
Conference ID:	8081948	7584097	UK Free Call - 0800 279 6637 US Local Dial-In, New York - 1 646 517 5063

●	Interim Results 2020 and background slides.
●	A financial supplement containing income statement, balance sheet and segment performance information for the nine quarters ended 30 June 2020.
●	NatWest Group and NWH Group Pillar 3 supplement at 30 June 2020.

Measure	Basis of preparation	Additional analysis or reconciliation
NatWest Group return on tangible equity	Annualised profit for the period attributable to ordinary shareholders divided by average tangible equity. Average tangible equity is average total equity less average intangible assets and average other owners' equity.	Table 1
Segmental return on tangible equity	Annualised segmental operating profit adjusted for tax and for preference share dividends divided by average notional equity, allocated at an operating segment specific rate, of the period average segmental risk-weighted assets incorporating the effect of capital deductions (RWAe).	Table 1
Operating expenses analysis - management view	The management analysis of operating expenses shows strategic costs and litigation and conduct costs in separate lines. Depreciation and amortisation, impairment of other intangibles and other administrative expenses attributable to these costs are included in strategic costs and litigation and conduct costs lines for management analysis. These amounts are included in staff, premises and equipment and other administrative expenses in the statutory analysis.	Table 2
Cost:income ratio	Total operating expenses less operating lease depreciation divided by total income less operating lease depreciation.	Table 3
Commentary - adjusted periodically for specific items	NatWest Group and segmental business performance commentary have been adjusted for the impact of specific items such as transfers, strategic, litigation and conduct costs (detailed on pages 14 to 18).	Notable items - page 5 Transfers - page 10 Strategic, litigation and conduct costs - pages 14 to 18
Bank net interest margin (NIM)	Net interest income of the banking business less NatWest Markets (NWM) element as a percentage of interest-earning assets of the banking business less NWM element.	Table 4

	Half year ended and
	as at		Quarter ended and as at
	30 June	30 June	30 June	31 March	30 June
	2020	2019	2020	2020	2019
(Loss)/profit attributable to ordinary shareholders (£m)	(705)	2,038	(993)	288	1,331
Adjustment for Alawwal bank merger gain (£m)		(764)
Adjusted profit attributable to ordinary shareholders (£m)		1,274
Annualised (loss)/profit attributable to ordinary shareholders (£m)	(1,410)	4,076	(3,972)	1,152	5,324
Annualised adjusted profit attributable to ordinary shareholders (£m)		2,548

Average total equity (£m)	44,026	46,310	44,068	44,018	46,179
Adjustment for other owners equity and intangibles (£m)	(11,911)	(12,528)	(11,987)	(11,911)	(12,410)
Adjusted total tangible equity (£m)	32,115	33,782	32,081	32,107	33,769

Return on tangible equity (%)	(4.4%)	12.1%	(12.4%)	3.6%	15.8%
Return on tangible equity adjusting for impact for Alawwal bank merger (%)		7.5%

	UK Personal	Ulster	Commercial	Private	RBS	NatWest
Half year ended 30 June 2020	Banking	Bank RoI	Banking	Banking	International	Markets
Operating profit/(loss) (£m)	453	(239)	(1,008)	84	87	69
Preference share cost allocation (£m)	(44)	-	(76)	(11)	(10)	(34)
Adjustment for tax (£m)	(115)	-	304	(20)	(11)	(10)
Adjusted attributable profit/(loss) (£m)	294	(239)	(780)	53	66	25
Annualised adjusted attributable profit/(loss) (£m)	588	(478)	(1,560)	106	132	50
Average RWAe (£bn)	38.0	12.7	75.9	10.2	7.0	41.9
Equity factor	14.5%	15.5%	11.5%	12.5%	16.0%	15.0%
RWAe applying equity factor (£bn)	5.5	2.0	8.7	1.3	1.1	6.3
Return on equity (%)	10.7%	(24.2%)	(17.9%)	8.2%	11.8%	0.8%



Half year ended 30 June 2019
Operating profit (£m)	1,037	23	701	155	194	300
Adjustment for tax (£m)	(290)	-	(196)	(43)	(27)	(84)
Preference share cost allocation (£m)	(36)	-	(82)	(8)	-	(30)
Adjusted attributable profit (£m)	711	23	423	104	167	186
Annualised adjusted attributable profit (£m)	1,422	46	846	207	334	372
Adjustment for Alawwal bank merger gain (£m)	-	-	-	-	-	(299)
Annualised adjusted profit attributable
to ordinary shareholders (£m)	1,422	46	846	207	334	73
Average RWAe (£bn)	37.0	14.3	79.6	9.6	7.0	49.2
Equity factor	15.0%	15.0%	12.0%	13.0%	16.0%	15.0%
RWAe applying equity factor (£bn)	5.5	2.1	9.6	1.2	1.1	7.4
Return on equity (%)	25.6%	2.1%	8.8%	16.6%	29.7%	1.0%

	Half year ended		Quarter ended
	30 June	30 June	30 June	31 March	30 June
Operating expenses	2020	2019	2020	2020	2019
Staff costs	(1,955)	(2,028)	(963)	(992)	(1,017)
Premises and equipment	(651)	(558)	(393)	(258)	(293)
Other administrative expenses	(696)	(863)	(298)	(398)	(445)
Depreciation and amortisation	(441)	(621)	(248)	(193)	(377)
Impairment of other intangible assets	(7)	(30)	(7)	-	(30)
Total operating expenses	(3,750)	(4,100)	(1,909)	(1,841)	(2,162)