NatWest Markets Plc Q1 Results 2025

Natwest Markets PLC

02 May 2025

 

   NatWest Markets Group

   Q1 2025

   Interim Management Statement

                                                                                                                                    ci.natwest.com

NatWest Markets Group (NWM Group)

Results for Q1 2025

The first quarter of the year saw a dynamic operating environment, with seasonally strong client activity against a backdrop of heightened uncertainty in both UK and international markets. We captured opportunities presented by this environment, leveraged our deep customer relationships, and capitalised on our key specialist strengths through a connected Commercial & Institutional segment to support our customers. As a result, we produced a strong set of results for NWM Group, all underpinned by a disciplined approach to balance sheet management.

Financial review

NWM Group maintained its robust capital and liquidity position in Q1 2025 and reported a profit of £59 million, compared with a loss of £40 million in Q4 2024 and a profit of £82 million in Q1 2024. Total income increased to £394 million in Q1 2025 compared with the previous quarter, mainly reflecting stronger performances across the primary business lines. Operating expenses decreased in the quarter to £323 million compared with Q4 2024 due to lower litigation and conduct costs, and other operating expenses, largely driven by the non-repeat of one-off items in the prior period offset by higher staff costs.

Financial performance

-	Total income of £394 million in Q1 2025 was up by £91 million compared with £303 million in Q4 2024, mainly due to a stronger performance across primary business lines and the impact of FX reserves recycling in the prior period, partially offset by a reduction in the amount recognised under the profit share arrangement with fellow NatWest Group subsidiaries. Total income was up by £67 million compared with £327 million in Q1 2024, mainly driven by a stronger performance in Currencies and Capital Markets, partially offset by a reduction in the amount recognised under the profit share arrangement with fellow NatWest Group subsidiaries.
-	Operating expenses of £323 million in Q1 2025 were down by £39 million compared with £362 million in Q4 2024 and up by £68 million compared with £255 million in Q1 2024. Litigation and conduct costs of £32 million were down by £9 million compared with £41 million in Q4 2024 and up by £33 million compared with £1 million credit in Q1 2024, reflecting ongoing progress in closing legacy matters including any associated remediation activity. Other operating expenses of £291 million were down by £30 million compared with £321 million in Q4 2024, largely due to the annual bank levy recognised in the prior period, partially offset by increased staff costs, and up by £35 million compared with £256 million in Q1 2024, largely driven by the impact of a credit recognised in relation to property charges in the comparative period and higher staff costs.
-	NWM Group's total assets and liabilities decreased by £2.8 billion and £3.0 billion respectively as at 31 March 2025, compared with 31 December 2024. Decreases in derivative fair values reflecting FX volatility across major currencies and variations in interest rates across different currencies and tenors were largely offset by increases in funded assets including settlement balances and trading assets.

Capital and leverage

-	Total NWM Plc RWAs were £21.7 billion at 31 March 2025, compared with £20.8 billion at 31 December 2024. The increase in the quarter was primarily driven by higher market risk and an increase from the annual update to operational risk RWAs.
-	NWM Plc's Common Equity Tier 1 (CET1) ratio decreased to 17.2% at 31 March 2025 compared with 18.2% at 31 December 2024, mainly due to the increase in RWAs.
-	Total MREL for NWM Plc at 31 March 2025 was £10.1 billion, or 46.7% of RWAs, compared with £10.0 billion or 48.2% of RWAs at 31 December 2024. The increase in total MREL in the quarter was largely due to the issuance of a £250 million Additional Tier 1 (AT1) instrument to NatWest Group plc.
-	NWM Plc's leverage ratio at 31 March 2025 was 5.4%, down slightly compared with 5.5% at 31 December 2024, reflecting an increase in leverage exposure driven by increases in trading assets and other financial assets, partially offset by higher Tier 1 capital, mainly due to the £250 million AT1 instrument issued in the quarter.

Liquidity and funding

-	NWM Plc's liquidity portfolio decreased by £1.6 billion to £19.4 billion at 31 March 2025 (31 December 2024 - £21.0 billion), mainly driven by continued growth in the banking book. The liquidity coverage ratio (LCR) decreased to 167% (31 December 2024 - 195%), driven by the decrease in liquidity portfolio and higher net outflows.
-	NWM Plc issued public benchmark transactions amounting to £2.8 billion in Q1 2025. Transactions comprised €1.0 billion of notes under our Euro Medium Term Note programme and $2.5 billion of notes under our US Medium Term Note programme. NWM Plc also raised funding in other formats throughout the quarter including, but not limited to, structured note issuance.

ESG highlights

Climate and sustainable funding and financing have continued to perform well and, as at the end of Q1 2025, we had delivered £52.7 billion towards the NatWest Group climate and sustainable funding and financing target⁽¹⁾ of £100 billion between 1 July 2021 and the end of 2025.

(1)        NatWest Group uses its climate and sustainable funding and financing inclusion criteria (CSFFI criteria) to determine the assets, activities and companies that are eligible to be included within its climate and sustainable funding and financing target. This includes provision of committed (on and off-balance sheet) funding and financing, including provision of services for underwriting issuances and private placements.

Outlook⁽¹⁾

We retain the Outlook guidance provided in the NatWest Markets Plc 2024 Annual Report and Accounts.

(1)        The guidance, targets, expectations and trends discussed in this section represent management's current expectations and are subject to change, including as a result of the factors described in the 'Risk Factors' section in the NatWest Markets Plc 2024 Annual Report and Accounts. These statements constitute forward-looking statements. Refer to 'Forward-looking statements' in this announcement.

Financial review

The table below presents an analysis of key lines of NWM Group's income statement. Commentary refers to the table below as well as the consolidated income statement shown on page 6.

	Quarter ended
	31 March	31 December	31 March
	2025	2024	2024
Income statement	£m	£m	£m
Net interest income	124	85	121
Non-interest income	270	218	206
Total income	394	303	327
Litigation and conduct costs	(32)	(41)	1
Other operating expenses	(291)	(321)	(256)
Operating expenses	(323)	(362)	(255)
Operating profit/(loss) before impairment losses/releases	71	(59)	72
Impairment (losses)/releases	(1)	-	8
Operating profit/(loss) before tax	70	(59)	80
Tax (charge)/credit	(11)	19	2
Profit/(loss) for the period	59	(40)	82
Income (1)
Fixed Income	64	20	63
Currencies	158	146	112
Capital Markets	181	164	165
Capital Management Unit & other (2)	13	(11)	-
Income including shared revenue before OCA	416	319	340
Transfer pricing arrangements with fellow NatWest Group subsidiaries (3)	(28)	(12)	(8)
Income excluding OCA	388	307	332
Own credit adjustments (OCA)	6	(4)	(5)
Total income	394	303	327

(1)      Product performance includes gross income earned on a NatWest Group-wide basis, including amounts contributed to other NatWest Group subsidiaries. Income including shared revenue before OCA includes revenue share from other NatWest Group subsidiaries but before revenue share is paid to or contributed to those subsidiaries.

(2)      Capital Management Unit was set up in Q3 2020 to manage capital usage and optimisation across all parts of NatWest Markets, with the income materially relating to legacy positions. In Q4 2024, Other mainly related to FX reserves recycling.

(3)      Transfer pricing arrangements with fellow NatWest Group subsidiaries includes shared revenue paid to or contributed to those subsidiaries and a profit share arrangement with fellow NatWest Group subsidiaries. The profit share arrangement rewards NWM Group on an arm's length basis for its contribution to the performance of the NatWest Group Commercial & Institutional business segment. The profit share is not allocated to individual NatWest Markets product areas.

Q1 2025 performance

-	Net interest income largely represents interest income from lending activity and capital hedges, offset by interest expense from the funding costs of the business. The increase of £39 million compared with Q4 2024 primarily reflects higher interest expense from funding of the trading business in the prior period.
-	Non-interest income increased by £52 million compared with Q4 2024, mainly due to a stronger performance across primary business lines as we successfully navigated volatile market conditions in Fixed Income and Currencies, in addition to the impact of FX reserves recycling relating to legacy overseas operations closure activity in the prior period. This was partially offset by a decrease of £12 million in the amount recognised under the profit share arrangement with fellow NatWest Group subsidiaries, where £34 million was recognised in the current quarter. Non-interest income increased by £64 million compared with Q1 2024, largely driven by higher revenues in Currencies reflecting increased levels of FX volatility, and Capital Markets, partially offset by a decrease of £11 million in the amount recognised under the profit share arrangement with fellow NatWest Group subsidiaries.
-	Operating expenses in Q1 2025 decreased by £39 million compared with Q4 2024 and increased by £68 million compared with Q1 2024. Litigation and conduct costs in Q1 2025 reflected ongoing progress in closing legacy matters, including any associated remediation activity, and were down by £9 million compared with Q4 2024 and up by £33 million compared with Q1 2024. Other operating expenses in Q1 2025 decreased by £30 million compared with Q4 2024, largely due to the annual bank levy and other administrative expenses recognised in the prior period, partially offset by higher staff costs. Other operating expenses increased by £35 million compared with Q1 2024, largely driven by the impact of a credit in relation to property charges recognised in the comparative period, and higher staff costs.

Financial review continued

Balance sheet profile as at 31 March 2025

NWM Group's balance sheet profile is summarised below. Commentary refers to the table below as well as the consolidated balance sheet on page 7.

Assets					Liabilities
		31 March	31 December		31 March	31 December
		2025	2024		2025	2024
		£bn	£bn		£bn	£bn
Cash and balances at central banks		16.7	16.2
Securities		20.3	13.9		12.0	10.5		Short positions
Reverse repos (1)		26.1	27.1		32.7	30.6		Repos (2)
Derivative cash collateral posted (3)		6.3	7.3		11.6	12.3		Derivative cash collateral received (4)
Other trading assets		0.5	0.6		1.1	1.1		Other trading liabilities
Total trading assets		53.2	48.9		57.4	54.5		Total trading liabilities
Loans - amortised cost		20.8	19.1		10.4	9.4		Deposits - amortised cost
Settlement balances		9.0	2.0		9.1	1.7		Settlement balances
Amounts due from holding								Amounts due to holding company
company and fellow subsidiaries		0.5	0.3		6.6	6.8		and fellow subsidiaries
Other financial assets		17.0	17.9		32.9	31.3		Other financial liabilities
Other assets		0.7	0.7		0.5	0.5		Other liabilities
Funded assets		117.9	105.1		116.9	104.2		Liabilities excluding derivatives
Derivative assets		62.5	78.1		56.3	72.0		Derivative liabilities
Total assets		180.4	183.2		173.2	176.2		Total liabilities
								of which:
					33.9	32.5		Wholesale funding (5)
					15.4	16.8		Short-term wholesale funding (5)
(1)	Comprises bank reverse repos of £7.0 billion (31 December 2024 - £5.9 billion) and customer reverse repos of £19.1 billion (31 December 2024 - £21.2 billion).
(2)	Comprises bank repos of £8.6 billion (31 December 2024 - £7.2 billion) and customer repos of £24.1 billion (31 December 2024 - £23.4 billion).
(3)	Comprises derivative cash collateral given relating to banks of £3.1 billion (31 December 2024 - £3.6 billion) and customers of £3.2 billion (31 December 2024 - £3.7 billion).
(4)	Comprises derivative cash collateral received relating to banks of £4.9 billion (31 December 2024 - £5.3 billion) and customers of £6.7 billion (31 December 2024 - £7.0 billion).
(5)	Predominantly comprises bank deposits (excluding repos), debt securities in issue and third party subordinated liabilities, of which short-term wholesale funding is the amount with contractual maturity of one year or less.

-	Total assets and liabilities decreased by £2.8 billion and £3.0 billion respectively as at 31 March 2025. Decreases in derivative fair values reflecting FX volatility across major currencies and variations in interest rates across different currencies and tenors were largely offset by increases in funded assets including settlement balances and trading assets.
-	Trading assets were up by £4.3 billion, driven by an increase in securities from client-led activity, partially offset by decreases in derivative cash collateral posted and reverse repos. Trading liabilities increased by £2.9 billion, driven by increases in repos and short positions, partially offset by a decrease in derivative cash collateral received.
-	Loans - amortised cost increased by £1.7 billion, driven by higher loans to customers reflecting growth in Capital Markets.
-	Deposits - amortised cost were up by £1.0 billion, largely driven by an increase in customer deposits in NWM N.V. in response to planned business activity.
-	Derivative assets and derivative liabilities were down by £15.6 billion and £15.7 billion respectively at 31 March 2025. The decreases in fair values largely reflected FX volatility across major currencies including the weakening of USD in the quarter, following contrasting trends in Q4 2024, and variations in interest rates across different currencies and tenors.
-	Settlement balance assets and liabilities were up by £7.0 billion and £7.4 billion respectively, largely due to increased trading compared with the seasonally lower levels of customer activity leading up to 31 December 2024.
-	Other financial liabilities increased by £1.6 billion, driven by new issuance in the period, partially offset by maturities. The balance as at 31 March 2025 includes £23.4 billion of medium-term notes issued.

Non-IFRS measures

This document contains a number of non-IFRS measures. For details of the basis of preparation and reconciliations, where applicable, refer to the non-IFRS measures section on page 11.

Capital, liquidity and funding risk

Introduction

NWM Group takes a comprehensive approach to the management of capital, liquidity and funding, underpinned by frameworks, risk appetite and policies, to manage and mitigate capital, liquidity and funding risks. The framework ensures the tools and capability are in place to facilitate the management and mitigation of risk ensuring that NWM Group operates within its regulatory requirements and risk appetite.

Capital, RWAs and leverage

Capital resources, RWAs and leverage for NWM Plc are set out below and have been calculated in line with the PRA rulebook, subject to the requirements set out in the UK CRR. Regulatory capital is monitored and reported at legal entity level for large subsidiaries of NatWest Group.

	31 March	31 December
	2025	2024
Capital adequacy ratios (1,2)	%	%
CET1	17.2	18.2
Tier 1	24.3	24.3
Total	27.5	27.8
Total MREL	46.7	48.2
Capital (1,2)	£m	£m
CET1	3,743	3,779
Tier 1	5,280	5,067
Total	5,963	5,779
Total MREL (3)	10,130	10,038
Risk-weighted assets
Credit risk	9,066	8,908
Counterparty credit risk	5,722	5,797
Market risk	5,570	5,105
Operational risk	1,347	1,002
Total RWAs	21,705	20,812

(1)	NWM Plc's total capital ratio requirement is 11.4%, comprising the minimum capital requirement of 8%, supplemented with the capital conservation buffer of 2.5% and the institution specific countercyclical buffer (CCyB) of 0.9%. The minimum CET1 ratio is 8%, including the minimum capital requirement of 4.5%. The CCyB is based on the weighted average of NWM Plc's geographical exposures.
(2)	NWM Plc is subject to Pillar 2A requirements for CET1, AT1 and Tier 2. Refer to the NWM Plc Pillar 3 report for further details on these additional capital requirements.
(3)	Includes senior debt instruments issued to NatWest Group plc with a nominal value of £4.2 billion (31 December 2024 - £4.3 billion).
(4)	The IFRS 9 transitional capital rules in respect to ECL provisions no longer apply as of 1 January 2025.

Leverage

The leverage ratio has been calculated in accordance with the Leverage Ratio (CRR) part of the PRA rulebook.

	31 March	31 December
	2025	2024
Tier 1 capital (£m)	5,280	5,067
Leverage exposure (£m) (1)	97,377	92,859
Leverage ratio (%)	5.4	5.5

(1)      Leverage exposure is broadly aligned to the accounting value of on and off-balance sheet exposures albeit subject to specific adjustments for derivatives, securities financing positions and off-balance sheet exposures.

Liquidity and funding

	31 March	31 December
	2025	2024
LCR spot (%) (1)	167	195
LCR average (%) (1)	189	192
Liquidity portfolio (£bn) (1)	19.4	21.0
Total wholesale funding (£bn) (2)	33.9	32.5
Total funding including repos (£bn)	95.2	91.4

(1)      LCR and Liquidity portfolio measures presented are for NWM Plc.

(2)      Predominantly comprises bank deposits (excluding repos), debt securities in issue and third-party subordinated liabilities.

Condensed consolidated income statement

for the period ended 31 March 2025 (unaudited)

	Quarter ended
	31 March	31 December	31 March
	2025	2024	2024
	£m	£m	£m
Interest receivable	659	665	675
Interest payable	(535)	(580)	(554)
Net interest income	124	85	121
Fees and commissions receivable	127	102	122
Fees and commissions payable	(56)	(47)	(52)
Income from trading activities	192	157	106
Other operating income	7	6	30
Non-interest income	270	218	206
Total income	394	303	327
Staff costs	(136)	(99)	(124)
Premises and equipment	(21)	(20)	(17)
Other administrative expenses	(163)	(240)	(112)
Depreciation and amortisation	(3)	(3)	(2)
Operating expenses	(323)	(362)	(255)
Profit/(loss) before impairment losses/releases	71	(59)	72
Impairment (losses)/releases	(1)	-	8
Operating profit/(loss) before tax	70	(59)	80
Tax (charge)/credit	(11)	19	2
Profit/(loss) for the period	59	(40)	82
Attributable to:
Ordinary shareholders	30	(63)	55
Paid-in-equity holders	29	22	17
Non-controlling interests	-	1	10
	59	(40)	82

Condensed consolidated statement of comprehensive income

for the period ended 31 March 2025 (unaudited)

	Quarter ended
	31 March	31 December	31 March
	2025	2024	2024
	£m	£m	£m
Profit/(loss) for the period	59	(40)	82
Items that do not qualify for reclassification
Remeasurement of retirement benefit schemes	(3)	(9)	(1)
Changes in fair value of credit in financial liabilities designated at fair value through
profit or loss (FVTPL)	4	(8)	(23)
Fair value through other comprehensive income (FVOCI) financial assets	2	1	2
Tax	5	7	18
	8	(9)	(4)
Items that do qualify for reclassification
FVOCI financial assets	3	1	8
Cash flow hedges	27	(54)	(58)
Currency translation	(25)	113	(29)
Tax	(12)	16	17
	(7)	76	(62)
Other comprehensive income/(loss) after tax	1	67	(66)
Total comprehensive income for the period	60	27	16
Attributable to:
Ordinary shareholders	31	5	(11)
Paid-in equity holders	29	22	17
Non-controlling interests	-	-	10
	60	27	16

Condensed consolidated balance sheet

as at 31 March 2025 (unaudited)

		31 March	31 December
		2025	2024
		£m	£m
Assets
Cash and balances at central banks		16,747	16,229
Trading assets		53,246	48,883
Derivatives		62,505	78,105
Settlement balances		9,030	2,043
Loans to banks - amortised cost		1,072	1,171
Loans to customers - amortised cost		19,698	17,921
Amounts due from holding company and fellow subsidiaries		486	343
Other financial assets		17,021	17,850
Other assets		610	621
Total assets		180,415	183,166
Liabilities
Bank deposits		4,496	4,565
Customer deposits		5,940	4,840
Amounts due to holding company and fellow subsidiaries		6,596	6,771
Settlement balances		9,083	1,729
Trading liabilities		57,375	54,512
Derivatives		56,284	72,036
Other financial liabilities		32,876	31,263
Other liabilities		550	521
Total liabilities		173,200	176,237
Owners' equity		7,215	6,929
Non-controlling interests		-	-
Total equity		7,215	6,929
Total liabilities and equity		180,415	183,166

Condensed consolidated statement of changes in equity

for the period ended 31 March 2025 (unaudited)

	Share
	capital and				Total	Non
	share	Paid-in	Retained	Other	owners'	controlling	Total
	premium	equity	earnings	reserves*	equity	interests	equity
	£m	£m	£m	£m	£m	£m	£m
At 1 January 2025	2,346	1,496	3,163	(76)	6,929	-	6,929
Profit attributable to ordinary
shareholders and paid-in equity holders			59		59	-	59
Other comprehensive income
- Changes in fair value of financial liabilities
designated at FVTPL due to changes in credit risk			4		4		4
- Unrealised gains: FVOCI				5	5		5
- Remeasurement of retirement benefit schemes			(3)		(3)		(3)
- Amounts recognised in equity: cash flow hedges				(36)	(36)		(36)
- Foreign exchange reserve movement				(25)	(25)		(25)
- Amounts transferred from equity to earnings				63	63		63
- Tax			2	(9)	(7)		(7)
Securities issued in the period		250			250		250
Paid-in equity dividends paid			(29)		(29)		(29)
Share-based payments			5		5		5
Merger reserve amortisation			(1)	1	-		-
At 31 March 2025	2,346	1,746	3,200	(77)	7,215	-	7,215
							31 March
							2025
Attributable to:							£m
Ordinary shareholders							5,469
Paid-in equity holders							1,746
Non-controlling interests							-
							7,215
*Other reserves consist of:
Merger reserve							(10)
FVOCI reserve							31
Cash flow hedging reserve							(160)
Foreign exchange reserve							62
							(77)

Notes 

1. Presentation of condensed consolidated financial statements

The condensed consolidated financial statements should be read in conjunction with NatWest Markets Plc's 2024 Annual Report and Accounts. The accounting policies are the same as those applied in the consolidated financial statements.

The directors have prepared the condensed consolidated financial statements on a going concern basis after assessing the principal risks, forecasts, projections and other relevant evidence over the twelve months from the date they are approved.

2. Trading assets and liabilities

Trading assets and liabilities comprise assets and liabilities held at fair value in trading portfolios.

	31 March	31 December
	2025	2024
	£m	£m
Assets
Loans
Reverse repos	26,114	27,127
Collateral given	6,278	7,333
Other loans	537	545
Total loans	32,929	35,005
Securities
Central and local government
- UK	3,332	2,077
- US	6,145	3,734
- Other	5,884	3,506
Financial institutions and Corporate	4,956	4,561
Total securities	20,317	13,878
Total	53,246	48,883
Liabilities
Deposits
Repos	32,659	30,562
Collateral received	11,584	12,307
Other deposits	881	895
Total deposits	45,124	43,764
Debt securities in issue	259	257
Short positions	11,992	10,491
Total	57,375	54,512

3. Other financial liabilities

	31 March	31 December
	2025	2024
	£m	£m
Customer deposits - designated as at FVTPL	1,752	1,537
Debt securities in issue
- Medium term notes	23,403	21,852
- Commercial paper and certificates of deposit	7,454	7,605
Subordinated liabilities
- Designated as at FVTPL	231	234
- Amortised cost	36	35
Total	32,876	31,263

4. Amounts due to holding company and fellow subsidiaries

	31 March	31 December
	2025	2024
	£m	£m
Bank deposits - amortised cost	557	548
Customer deposits - amortised cost	46	43
Trading liabilities	571	613
Other financial liabilities - subordinated liabilities	1,111	1,115
MREL instruments issued to NatWest Group plc	4,234	4,358
Other liabilities	77	94
Total	6,596	6,771

Notes continued

5. Litigation

NatWest Markets Plc's 2024 Annual Report and Accounts, issued on 14 February 2025, included disclosures about NWM Group's litigation and regulatory matters in Note 25. Set out below are the material developments in those matters (all of which have been previously disclosed) since publication of the 2024 Annual Report and Accounts.

FX litigation

NWM Plc, NatWest Markets Securities Inc. and/or NatWest Group plc are defendants in several cases relating to NWM Plc's foreign exchange (FX) business. In May 2025, NWM Plc executed an agreement to settle the claim in the Federal Court of Australia, subject to court approval of that settlement. The settlement amount is covered in full by an existing provision.

6. Changes to the NWM Board of Directors

In March 2025, Tamsin Rowe was appointed interim Chair of NWM Plc following the announcement that Frank Dangeard was taking a period of leave for personal reasons.

In April 2025, it was announced that Frank Dangeard would step down as Chair of NWM Plc with effect from 23 April 2025.

In April 2025, Rupert Hume Kendall and Thierry Roland were appointed as Non-Executive Directors of NWM Plc.

7. Post balance sheet events

There have been no significant events between 31 March 2025 and the date of approval of this announcement that would require a change to or additional disclosure in the announcement.

Non-IFRS measures

NWM Group prepares its financial statements in accordance with IFRS as issued by the IASB which constitutes a body of generally accepted accounting principles (GAAP). This document contains a number of adjusted or alternative performance measures, also known as non-GAAP or non-IFRS performance measures. These measures are adjusted for certain items which management believe are not representative of the underlying performance of the business and which distort period-on-period comparison. These non-IFRS measures are not measures within the scope of IFRS and are not a substitute for IFRS measures. These measures include:

-    Management analysis of operating expenses shows litigation and conduct costs on a separate line. These amounts are included within staff costs and other administrative expenses in the statutory analysis. Other operating expenses excludes litigation and conduct costs which are more volatile and may distort comparisons with prior periods. 

-    Funded assets are defined as total assets less derivative assets. This measure allows review of balance sheet trends exclusive of the volatility associated with derivative fair values.

-    Management view of income by business including shared revenue and before own credit adjustments. This measure is used to show underlying income generation in NatWest Markets excluding the impact of own credit adjustments.

-    Revenue share refers to income generated by NatWest Markets products from customers that have their primary relationship with other NatWest Group subsidiaries, a proportion of which is shared between NatWest Markets and those subsidiaries.

-    Transfer Pricing arrangements with fellow NatWest Group subsidiaries includes revenue share and a profit share arrangement with fellow NatWest Group subsidiaries. The profit share arrangement rewards NWM Group on an arm's length basis for its contribution to the performance of the NatWest Group Commercial & Institutional business segment. The profit share is not allocated to individual NatWest Markets product areas.

-    Own credit adjustments are applied to positions where it is believed that the counterparties would consider NWM Group's creditworthiness when pricing trades. The fair value of certain issued debt securities, including structured notes, is adjusted to reflect the changes in own credit spreads and the resulting gain or loss recognised in income.

Operating expenses - management view

	Quarter ended
	31 March 2025
	Litigation	Other	Statutory
	and conduct	operating	operating
	costs	expenses	expenses
	£m	£m	£m
Staff costs	8	128	136
Premises and equipment	-	21	21
Other administrative expenses	24	139	163
Depreciation and amortisation	-	3	3
Total	32	291	323
	Quarter ended
	31 December 2024
	Litigation	Other	Statutory
	and conduct	operating	operating
	costs	expenses	expenses
	£m	£m	£m
Staff costs	5	94	99
Premises and equipment	-	20	20
Other administrative expenses	36	204	240
Depreciation and amortisation	-	3	3
Total	41	321	362
	Quarter ended
	31 March 2024
	Litigation	Other	Statutory
	and conduct	operating	operating
	costs	expenses	expenses
	£m	£m	£m
Staff costs	6	118	124
Premises and equipment	-	17	17
Other administrative expenses	(7)	119	112
Depreciation and amortisation	-	2	2
Total	(1)	256	255

Additional information

Presentation of information

NatWest Markets Plc ('NWM Plc') is a wholly owned subsidiary of NatWest Group plc or 'the ultimate holding company'. The term 'NWM Group' or 'we' refers to NWM Plc and its subsidiary and associated undertakings. The term 'NatWest Group' refers to NatWest Group plc and its subsidiary and associated undertakings.

NWM Plc publishes its financial statements in pounds sterling ('£' or 'sterling'). The abbreviations '£m' and '£bn' represent millions and thousands of millions of pounds sterling, respectively, and references to 'pence' or 'p' represent pence in the United Kingdom ('UK'). Reference to 'dollars' or '$' are to United States of America ('US') dollars. The abbreviations '$m' and '$bn' represent millions and thousands of millions of dollars, respectively. The abbreviation '€' represents the 'euro', and the abbreviations '€m' and '€bn' represent millions and thousands of millions of euros, respectively.

Statutory results

Financial information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 ("the Act"). The statutory accounts for the year ended 31 December 2024 have been filed with the Registrar of Companies. The report of the auditor on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Act.

Contact
Paul Pybus	Investor Relations	[phone]

Forward-looking statements

Cautionary statement regarding forward-looking statements

Certain sections in this document contain 'forward-looking statements' as that term is defined in the United States Private Securities Litigation Reform Act of 1995, such as statements with respect to NWM Group's financial condition, results of operations and business, including its strategic priorities, financial, investment and capital targets, and ESG targets, commitments and ambitions described herein. Statements that are not historical facts, including statements about NatWest Group's beliefs and expectations, are forward-looking statements. Words such as 'expect', 'estimate', 'project', 'anticipate', 'commit', 'believe', 'should', 'intend', 'will', 'plan', 'could', 'probability', 'risk', 'target', 'goal', 'objective', 'may', 'endeavour', 'outlook', 'optimistic', 'prospects' and similar expressions or variations on these expressions are intended to identify forward-looking statements. In particular, this document includes forward-looking targets and guidance relating to financial performance measures, such as income growth, operating expense, cost reductions, impairment loss rates, balance sheet reduction (including the reduction of RWAs), CET1 ratio (and key drivers of the CET1 ratio, including timing, impact and details), Pillar 2 and other regulatory buffer requirements and MREL and non-financial performance measures, such as climate and sustainability-related performance ambitions, targets and metrics, including in relation to initiatives to transition to a net zero economy, climate and sustainable funding and financing and financed emissions.

Limitations inherent to forward-looking statements

These statements are based on current plans, expectations, estimates, targets and projections, and are subject to significant inherent risks, uncertainties and other factors, both external and relating to NatWest Group's and NWM Group's strategy or operations, which may result in NWM Group being unable to achieve the current plans, expectations, estimates, targets, projections and other anticipated outcomes expressed or implied by such forward-looking statements. In addition, certain of these disclosures are dependent on choices relying on key model characteristics and assumptions and are subject to various limitations, including assumptions and estimates made by management. By their nature, certain of these disclosures are only estimates and, as a result, actual future results, gains or losses could differ materially from those that have been estimated. Accordingly, undue reliance should not be placed on these statements. The forward-looking statements contained in this document speak only as of the date we make them and we expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein, whether to reflect any change in our expectations with regard thereto, any change in events, conditions or circumstances on which any such statement is based, or otherwise, except to the extent legally required.

Important factors that could affect the actual outcome of the forward-looking statements

We caution you that a large number of important factors could adversely affect our results or our ability to implement our strategy, cause us to fail to meet our targets, predictions, expectations and other anticipated outcomes or affect the accuracy of forward-looking statements described in this document. These factors include, but are not limited to, those set forth in the risk factors and the other uncertainties described in NatWest Markets Plc's 2024 Annual Report and Accounts and its other public filings. The principal risks and uncertainties that could adversely affect NWM Group's future results, its financial condition and/or prospects and cause them to be materially different from what is forecast or expected, include, but are not limited to: economic and political risk (including in respect of: economic and political risks and uncertainties in the UK and global markets, including as a result of inflation and interest rates, supply chain disruption, and geopolitical developments; changes in interest rates and foreign currency exchange rates; and HM Treasury's ownership of NatWest Group plc); business change and execution risk (including in respect of: NatWest Group's strategy and NatWest Group's creation of its Commercial & Institutional business segment (of which NWM Group forms part) and the transfer of NatWest Group's Western European corporate portfolio); financial resilience risk (including in respect of: NWM Group's ability to meet targets, generate returns or implement its strategy effectively; prudential regulatory requirements for capital and MREL; NWM Group's reliance on access to capital markets directly or indirectly through its parent (NatWest Group); capital, funding and liquidity risk; reductions in the credit ratings; the competitive environment; the requirements of regulatory stress tests; counterparty and borrower risk; model risk; sensitivity to accounting policies, judgments, estimates and assumptions (and the economic, climate, competitive and other forward looking information affecting those judgments, estimates and assumptions); changes in applicable accounting standards; the adequacy of NatWest Group's resolution plans; and the application of UK statutory stabilisation or resolution powers to NatWest Group); climate and sustainability risk (including in respect of: risks relating to climate change and sustainability-related risks; both the execution and reputational risk relating to NatWest Group's climate change-related strategy, ambitions, targets and transition plan; climate and sustainability-related data and model risk; increasing levels of climate, environmental, human rights and other sustainability-related laws, regulation and oversight; climate, environmental, human rights and other sustainability-related litigation, enforcement proceedings, investigations and conduct risk); operational and IT resilience risk (including in respect of: operational risks (including reliance on third party suppliers); cyberattacks; the accuracy and effective use of data; attracting, retaining and developing senior management and skilled personnel; complex IT systems; NWM Group's risk management framework; and NWM Group's reputational risk); and legal, regulatory and conduct risk (including in respect of: the impact of substantial regulation and oversight; the outcome of legal, regulatory and governmental actions and investigations as well as remedial undertakings; and changes in tax legislation or failure to generate future taxable profits).  

Forward-looking statements continued

Climate and sustainability-related disclosures

Climate and sustainability-related disclosures in this document are not measures within the scope of International Financial Reporting Standards ('IFRS'), use a greater number and level of judgments, assumptions and estimates, including with respect to the classification of climate and sustainable funding and financing activities, than our reporting of historical financial information in accordance with IFRS. These judgments, assumptions and estimates are highly likely to change materially over time, and, when coupled with the longer time frames used in these disclosures, make any assessment of materiality inherently uncertain. In addition, our climate risk analysis, our ambition to be net zero across our financed emissions, assets under management and operational value chain by 2050 and the implementation of our climate transition plan remain under development, and the data underlying our analysis and strategy remain subject to evolution over time. The process we have adopted to define, gather and report data on our performance on climate and sustainability-related measures is not subject to the formal processes adopted for financial reporting in accordance with IFRS and there are currently limited industry standards or globally recognised established practices for measuring and defining climate and sustainability-related metrics. As a result, we expect that certain climate and sustainability-related disclosures made in this document are likely to be amended, updated, recalculated or restated in the future. Refer to the cautionary statement in the section entitled 'Climate and sustainability-related and other forward-looking statements and metrics' of the NatWest Group 2024 Sustainability Report published by NatWest Group plc for the consolidated group, including NatWest Markets Plc.

Cautionary statement regarding Non-IFRS financial measures and APMs

NWM Group prepares its financial statements in accordance with UK-adopted International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). This document may contain financial measures and ratios not specifically defined under GAAP or IFRS ('Non-IFRS') and/or alternative performance measures ('APMs') as defined in European Securities and Markets Authority ('ESMA') guidelines. Non-IFRS measures and APMs are adjusted for notable and other defined items which management believes are not representative of the underlying performance of the business and which distort period-on-period comparison. Non-IFRS measures and APMs provide users of the financial statements with a consistent basis for comparing business performance between financial periods and information on elements of performance that are one-off in nature. Any Non-IFRS measures and/or APMs included in this document, are not measures within the scope of IFRS, are based on a number of assumptions that are subject to uncertainties and change, and are not a substitute for IFRS measures.

The information, statements and opinions contained in this document do not constitute a public offer under any applicable legislation or an offer to sell or a solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments.

Legal Entity Identifier: RR3QWICWWIPCS8A4S074

 

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