Financial review
|
Contents
|
Page
|
|
Presentation of
information
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2
|
|
Description of
business
|
2
|
|
Performance
overview
|
3
|
|
Financial
statements
|
6
|
|
Notes to the
financial statements
|
11
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|
Statement of
directors' responsibilities
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21
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|
Forward-looking
statements
|
22
|
Presentation of
information
National Westminster Bank Plc
('NWB Plc') is a wholly owned subsidiary of NatWest Holdings
Limited ('NWH Ltd' or 'the intermediate holding company'). The term
'NWB Group' or 'we' refers to NWB Plc and its subsidiary and
associated undertakings. The term 'NWH Group' refers to NWH Ltd and
its subsidiary and associated undertakings. NatWest Group plc is
'the ultimate holding company'. The term 'NatWest Group' refers to
NatWest Group plc and its subsidiaries.
NWB Plc publishes its financial
statements in pounds sterling ('£' or 'sterling'). The
abbreviations '£m' and '£bn' represent millions and thousands of
millions of pounds sterling ('GBP'), respectively, and references
to 'pence' represent pence where amounts are denominated in
sterling. 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.
Description of business
National Westminster Bank Plc
('NWB Plc', which wholly owns Coutts & Company) is a principal
entity under NatWest Holdings Limited ('NWH Ltd'), together with
The Royal Bank of Scotland plc ('RBS plc'). In 2022 Ulster Bank
Ireland DAC ('UBIDAC') was also a principal entity under NWH Ltd.
The term 'NWB Group' refers to NWB Plc and its subsidiary and
associated undertakings.
Principal activities and operating segments
NWB Group serves customers across
the UK with a range of retail and commercial banking products and
services. A wide range of personal products are offered including
current accounts, credit cards, personal loans, mortgages and
wealth management services. NWB Plc is the main provider of shared
services for NatWest Group.
The reportable operating segments
are as follows:
Retail Banking - serves
personal customers in the UK and includes Ulster Bank customers in
Northern Ireland.
Private Banking -
serves UK-connected, high-net-worth individuals
and their business interests.
Commercial & Institutional - consists of customer businesses
reported under Business Banking, Commercial Mid-market and
Corporate & Institutions, supporting our customers across the
full non-personal customer lifecycle, both domestically and
internationally.
Central items & other - includes corporate functions such
as treasury, finance, risk management, compliance, legal,
communications and human resources. NWB Plc is the main service
provider of shared services and treasury activities for NatWest
Group. The services are mainly provided to NWH Group, however, in
certain instances where permitted, services are also provided to
the wider NatWest Group including the non ring-fenced
business..
Financial review
continued
Performance overview
Strong financial performance
NWB Group profit for the year was
£3,509 million compared with £3,689 million in 2022, driven by
additional operating expenses and net impairment losses, partially
offset by increased income.
Total income increased by £343
million to £12,086 million, primarily reflecting the beneficial
impact from base rate rises and lending growth, partially offset by
higher funding costs.
Operating expenses increased by
£505 million to £6,793 million, reflecting
higher staff costs as a result of
increased pay awards to support our colleagues with
cost of living challenges combined with an increase in restructuring
costs, an
increase in other administrative costs primarily driven by a new
profit share arrangement with a fellow NatWest Group
subsidiary, and an increase in
depreciation and amortisation costs.
Net impairment losses of £504
million principally reflects increased economic uncertainty.
Defaults remain stable and at low levels across the portfolio.
Total impairment provisions increased by £0.3 billion to £2.9
billion in the year. Expected credit loss (ECL) coverage ratio
increased from 0.84% to 0.88%.
Robust balance sheet with strong capital
levels
Total assets increased by £6.0
billion to £415.5 billion at 31 December 2023. This was primarily
driven by increases in other financial assets, as a result of bond
activity, and loans to customers, partially offset by a decrease in
cash and balances at central banks resulting from business segment
net funding outflows due to overall market liquidity
contraction.
Loans to customers increased by
£16.8 billion to £318.5 billion primarily driven by growth in
Retail Banking mortgage business, an increase in commercial lending
and Treasury reverse repo activity.
Customer deposits decreased by
£8.9 billion to £313.8 billion primarily reflecting higher outflows
and overall market liquidity contraction.
The Common Equity Tier 1 (CET1)
ratio increased 30 basis points over the period due to a £1.4
billion increase in CET1 capital, driven by attributable profit,
partially offset by interim and foreseeable dividends. This is
partially offset by a £9.3 billion increase in RWAs.
Total risk-weighted assets (RWAs)
increased by £9.3 billion mainly reflecting an increase in credit
risk RWAs of £7.8 billion, primarily driven by an increase in
internal ratings based (IRB) Temporary Model Adjustments as well as
increased exposures in Retail Banking and Commercial &
Institutional, and an increase following the annual operational
risk RWA recalculation.
Financial review
continued
Summary consolidated income
statement for the year ended 31 December 2023
|
|
|
|
|
|
|
|
|
|
|
Retail
|
Private
|
Commercial
&
|
Central
items
|
|
|
|
|
|
|
|
Banking
|
Banking
|
Institutional
|
&
other
|
|
2023
|
2022
|
Variance
|
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
%
|
|
Net interest income
|
4,595
|
709
|
2,955
|
(236)
|
|
8,023
|
7,532
|
491
|
7
|
|
Non-interest income
|
436
|
276
|
1,410
|
1,941
|
|
4,063
|
4,211
|
(148)
|
(4)
|
|
Total income
|
5,031
|
985
|
4,365
|
1,705
|
|
12,086
|
11,743
|
343
|
3
|
|
Operating expenses
|
(2,311)
|
(615)
|
(2,315)
|
(1,552)
|
|
(6,793)
|
(6,288)
|
(505)
|
8
|
|
Profit before impairment
losses/releases
|
2,720
|
370
|
2,050
|
153
|
|
5,293
|
5,455
|
(162)
|
(3)
|
|
Impairment
(losses)/releases
|
(410)
|
(13)
|
(82)
|
1
|
|
(504)
|
(341)
|
(163)
|
48
|
|
Operating profit before
tax
|
2,310
|
357
|
1,968
|
154
|
|
4,789
|
5,114
|
(325)
|
(6)
|
|
Tax charge
|
|
|
|
|
|
(1,280)
|
(1,425)
|
145
|
(10)
|
|
Profit for the year
|
|
|
|
|
|
3,509
|
3,689
|
(180)
|
(5)
|
|
Key metrics and ratios
|
|
|
|
|
|
2023
|
2022
|
|
Cost:income
ratio (1)
|
|
|
|
|
|
56.2%
|
53.5%
|
|
Loan impairment
rate (2)
|
|
|
|
|
|
15bps
|
11bps
|
|
CET1 ratio (3)
|
|
|
|
|
|
11.6%
|
11.3%
|
|
Leverage ratio (4)
|
|
|
|
|
|
4.5%
|
4.4%
|
|
Risk weighted assets
(RWAs)
|
|
|
|
|
|
£121.7bn
|
£112.4bn
|
|
Loan:deposit
ratio (5)
|
|
|
|
|
|
97%
|
90%
|
|
|
|
|
(1)
|
Cost:income ratio is total
operating expenses divided by total income.
|
|
(2)
|
Loan impairment rate is the loan
impairment charge divided by gross customer loans.
|
|
(3)
|
CET1 ratio is CET1 capital divided
by RWAs.
|
|
(4)
|
Leverage ratio is Tier 1 capital
divided by total exposure. This is in accordance with changes to
the UK's leverage ratio framework, refer to page 62 of the NatWest
Bank Plc 2023 Annual Report and Accounts for further
details.
|
|
(5)
|
Loan deposit ratio is total loans
divided by total deposits.
|
|
|
|
|
|
|
|
|
| |
NWB Group reported a profit of
£3,509 million compared with £3,689 million in 2022, driven by
increased operating expenses of £505 million and impairment losses
of £163 million, partially offset by an increase in total income of
£343 million.
Total income increased by
£343 million, or 3%, to £12,086 million, primarily reflecting
increases in net interest income.
Net interest income increased
by £491 million, or 7%, to £8,023 million, primarily reflecting
beneficial impact from base rate rises and lending growth partially
offset by higher funding costs.
Non-interest income decreased
by £148 million, or 4%, to £4,063 million, primarily driven by
other operating income, partially offset by an increase in net fees
and commissions.
Net fees and commissions increased by £43 million, or 3%, to £1,669 million, largely
within Commercial & Institutional, driven by increased lending
fees and card volumes coupled with higher payment services
income.
Other operating income reduced by £191 million, or 7%, to £2,394 million primarily
reflecting:
-
£309 million lower income from hedging
activities, including reduced gains on economic hedging
derivatives, due to interest rate rises, reflecting interest rate
volatility across all currencies. This is partially offset by a £3
million increase as a result of hedge ineffectiveness;
and
-
an £80 million prior year non-recurring profit
from insurance liabilities included within other income; partially
offset by
-
a £234 million gain on redemption of own
debt.
Operating expenses increased
by £505 million, or 8%, to £6,793 million reflecting:
-
an increase in staff costs of £213 million
primarily as a result of increased pay awards to support our
colleagues with cost of living
challenges combined with an increase in
restructuring costs;
-
an increase in other administrative costs of £138
million primarily driven by a new profit share arrangement with a
fellow NatWest Group subsidiary; and
-
an increase in depreciation and amortisation
costs of £109 million primarily as a result of intangible and fixed
asset additions and a property impairment in 2023.
Net impairment losses of £504
million principally reflects increased economic uncertainty.
Defaults remain stable and at low levels across the portfolio.
Total impairment provisions increased by £0.3 billion to £2.9
billion in the year. ECL coverage ratio increased from 0.84% to
0.88%.
Financial review
continued
Summary consolidated balance sheet
as at 31 December 2023
|
|
2023
|
2022
|
Variance
|
|
£m
|
£m
|
£m
|
%
|
|
Assets
|
|
|
|
|
|
Cash and balances at central
banks
|
48,259
|
73,065
|
(24,806)
|
(34)
|
|
Derivatives
|
3,184
|
4,407
|
(1,223)
|
(28)
|
|
Loans to banks - amortised
cost
|
3,355
|
3,197
|
158
|
5
|
|
Loans to customers - amortised
cost
|
318,466
|
301,684
|
16,782
|
6
|
|
Amounts due from holding companies
and fellow subsidiaries
|
2,311
|
4,903
|
(2,592)
|
(53)
|
|
Other financial assets
|
31,944
|
14,546
|
17,398
|
120
|
|
Other assets
|
7,949
|
7,667
|
282
|
4
|
|
Total assets
|
415,468
|
409,469
|
5,999
|
1
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Bank deposits
|
18,052
|
16,060
|
1,992
|
12
|
|
Customer deposits
|
313,752
|
322,614
|
(8,862)
|
(3)
|
|
Amounts due to holding companies
and fellow subsidiaries
|
47,252
|
38,771
|
8,481
|
22
|
|
Derivatives
|
1,718
|
2,088
|
(370)
|
(18)
|
|
Other financial
liabilities
|
9,011
|
5,384
|
3,627
|
67
|
|
Subordinated
liabilities
|
122
|
197
|
(75)
|
(38)
|
|
Notes in circulation
|
806
|
809
|
(3)
|
-
|
|
Other liabilities
|
3,325
|
3,470
|
(145)
|
(4)
|
|
Total liabilities
|
394,038
|
389,393
|
4,645
|
1
|
|
Total equity
|
21,430
|
20,076
|
1,354
|
7
|
|
Total liabilities and equity
|
415,468
|
409,469
|
5,999
|
1
|
Total assets increased by
£6.0 billion to £415.5 billion at 31 December 2023.
Cash and balances at central banks decreased by £24.8 billion to £48.3 billion,
reflecting:
-
£19.5 billion decrease due to net bond purchases,
disposal and maturity combined with net repo and collateral
activity;
-
£10.7 billion decrease due to business segment
net funding outflows; partially offset by
-
£4.0 billion increase due to the funding of a
subsidiary undertaking being transferred from NWB Plc to RBS plc;
and
-
£1.6 billion increase in debt capital market
activity.
Loans to banks - amortised cost increased by £0.2 billion to £3.4 billion, as a result of an
increase in non-sterling lending and treasury activities offset by
a reduction in sterling activities.
Loans to customers increased
by £16.8 billion to £318.5 billion, reflecting:
-
£7.2 billion growth in mortgage
business;
-
£6.7 billion increase as a result of treasury
reverse repo activity;
-
£1.8 billion net increase in commercial lending,
primarily due to an increase in term loan facilities, partly offset
by UK Government scheme repayments; and
-
£0.4 billion increase in credit card balances due
to business initiatives.
Amounts due from holding companies and fellow
subsidiaries decreased by £2.6
billion to £2.3 billion primarily due to reduced balances with
fellow subsidiaries of NWH Group.
Other financial assets increased by £17.4 billion to £31.9 billion, primarily
reflecting £36.8 billion of bond purchases, partially offset by
bond disposals of £12.3 billion and maturities of £8.5
billion.
Bank deposits increased by
£2.0 billion to £18.1 billion, driven primarily by an increase in
repo balances.
Customer deposits decreased
by £8.9 billion to £313.8 billion, driven primarily by higher
outflows from business current account balances, overall market
liquidity contraction and a reduction in savings, demand and
non-interest bearing deposits, as a result of a change in customer
behaviour, partly offset by an increase in repo
balances.
Amounts due to holding companies and fellow
subsidiaries increased by £8.5
billion to £47.3 billion, primarily due to increased balances with
RBS plc, NWH Ltd and other fellow subsidiaries of NatWest Group,
partially offset by a net reduction in balances with NatWest Group
plc.
Derivative liabilities decreased by £0.4 billion to £1.7 billion, driven by an
adverse movement within the liquidity portfolio due to float rate
decreases and foreign exchange swap movements.
Other financial liabilities increased by £3.6 billion to £9.0 billion, driven by short
term issuances as a result of the current market environment and
increasing rates during the year.
Total equity increased by
£1.4 billion to £21.4 billion. The increase reflects attributable
profit for 2023 of £3.4 billion, partially offset by dividends paid
to NWH Ltd and an increase in the cash flow hedging reserves due to
interest rate rises
Notes to the financial statements
continued
3 Segmental analysis
Reportable operating segments
NWB Plc is organised into the
following reportable segments: Retail Banking, Private Banking,
Commercial & Institutional and Central items &
other.
Retail Banking serves
personal customers in the UK and includes Ulster Bank customers in
Northern Ireland.
Private Banking serves
UK-connected high-net-worth individuals and their business
interests.
Commercial & Institutional consists of customer businesses reported under Business
Banking, Commercial Mid-market and Corporate & Institutions,
supporting our customers across the full non-personal customer
lifecycle, both domestically and internationally.
Central items & other includes corporate functions such as
treasury, finance, risk management, compliance, legal,
communications and human resources. NWB Plc is the main service
provider of shared services and treasury activities for NatWest
Group. The services are mainly provided to NWH Group, however, in
certain instances where permitted, services are also provided to
the wider NatWest Group including the non ring-fenced
business.
|
|
|
|
|
Retail
|
Private
|
Commercial
&
|
Central
items
|
|
|
|
|
|
|
Banking
|
Banking
|
Institutional
|
&
other
|
Total
|
|
2023
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Net interest income
|
|
|
|
4,595
|
709
|
2,955
|
(236)
|
8,023
|
|
Net fees and
commissions
|
|
|
|
327
|
245
|
1,096
|
1
|
1,669
|
|
Other operating income
|
|
|
|
109
|
31
|
314
|
1,940
|
2,394
|
|
Total income
|
|
|
|
5,031
|
985
|
4,365
|
1,705
|
12,086
|
|
Depreciation and
amortisation
|
|
|
|
-
|
-
|
(124)
|
(753)
|
(877)
|
|
Other operating
expenses
|
|
|
|
(2,311)
|
(615)
|
(2,191)
|
(799)
|
(5,916)
|
|
Impairment
(losses)/releases
|
|
|
|
(410)
|
(13)
|
(82)
|
1
|
(504)
|
|
Operating profit
|
|
|
|
2,310
|
357
|
1,968
|
154
|
4,789
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
4,494
|
754
|
2,740
|
(456)
|
7,532
|
|
Net fees and
commissions
|
|
|
|
334
|
243
|
1,038
|
11
|
1,626
|
|
Other operating income
|
|
|
|
65
|
28
|
248
|
2,244
|
2,585
|
|
Total income
|
|
|
|
4,893
|
1,025
|
4,026
|
1,799
|
11,743
|
|
Depreciation and
amortisation
|
|
|
|
-
|
-
|
(135)
|
(633)
|
(768)
|
|
Other operating
expenses
|
|
|
|
(2,115)
|
(596)
|
(1,804)
|
(1,005)
|
(5,520)
|
|
Impairment
(losses)/releases
|
|
|
|
(218)
|
2
|
(126)
|
1
|
(341)
|
|
Operating profit
|
|
|
|
2,560
|
431
|
1,961
|
162
|
5,114
|
|
|
|
Total revenue (1)
|
|
|
Retail
|
Private
|
Commercial
&
|
Central
items
|
|
|
|
Banking
|
Banking
|
Institutional
|
&
other
|
Total
|
|
2023
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
External
|
6,565
|
1,156
|
6,440
|
5,174
|
19,335
|
|
Inter-segment (2)
|
(187)
|
998
|
(1,558)
|
747
|
-
|
|
Total
|
6,378
|
2,154
|
4,882
|
5,921
|
19,335
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
External
|
5,039
|
856
|
4,072
|
3,896
|
13,863
|
|
Inter-segment (2)
|
29
|
416
|
(294)
|
(151)
|
-
|
|
Total
|
5,068
|
1,272
|
3,778
|
3,745
|
13,863
|
Notes to the financial statements
continued
3
Segmental analysis continued
|
Total income
|
|
|
Retail
|
Private
|
Commercial
&
|
Central
items
|
|
|
|
Banking
|
Banking
|
Institutional
|
&
other
|
Total
|
|
2023
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
External
|
4,172
|
324
|
4,652
|
2,938
|
12,086
|
|
Inter-segment (2)
|
859
|
661
|
(287)
|
(1,233)
|
-
|
|
Total
|
5,031
|
985
|
4,365
|
1,705
|
12,086
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
External
|
4,439
|
719
|
3,625
|
2,960
|
11,743
|
|
Inter-segment (2)
|
454
|
306
|
401
|
(1,161)
|
-
|
|
Total
|
4,893
|
1,025
|
4,026
|
1,799
|
11,743
|
(1) Total revenue comprises interest receivable, fees and
commissions receivable and other operating income.
(2) Revenue and income from transactions between segments of the
group are now reported as inter-segment in both the current and
comparative information.
Analysis of net fees and commissions
|
|
Retail
|
Private
|
Commercial
&
|
Central
items
|
|
|
|
Banking
|
Banking
|
Institutional
|
&
other
|
Total
|
|
2023
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Fees and commissions receivable
|
|
|
|
|
|
|
-
Payment services
|
263
|
32
|
518
|
-
|
813
|
|
-
Credit and debit card fees
|
323
|
13
|
197
|
-
|
533
|
|
-
Lending and financing
|
12
|
5
|
489
|
-
|
506
|
|
-
Brokerage
|
27
|
6
|
-
|
-
|
33
|
|
-
Investment management, trustee and fiduciary services
|
2
|
205
|
-
|
-
|
207
|
|
-
Underwriting fees
|
-
|
-
|
1
|
-
|
1
|
|
-
Other
|
4
|
5
|
60
|
15
|
84
|
|
Total
|
631
|
266
|
1,265
|
15
|
2,177
|
|
Fees and commissions payable
|
(304)
|
(21)
|
(169)
|
(14)
|
(508)
|
|
Net fees and commissions
|
327
|
245
|
1,096
|
1
|
1,669
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
Fees and commissions receivable
|
|
|
|
|
|
|
-
Payment services
|
254
|
25
|
489
|
-
|
768
|
|
-
Credit and debit card fees
|
323
|
14
|
170
|
-
|
507
|
|
-
Lending and financing
|
15
|
8
|
446
|
-
|
469
|
|
-
Brokerage
|
34
|
6
|
-
|
-
|
40
|
|
-
Investment management, trustee and fiduciary services
|
4
|
213
|
-
|
-
|
217
|
|
-
Underwriting fees
|
-
|
-
|
3
|
-
|
3
|
|
-
Other
|
-
|
3
|
113
|
(1)
|
115
|
|
Total
|
630
|
269
|
1,221
|
(1)
|
2,119
|
|
Fees and commissions payable
|
(296)
|
(26)
|
(183)
|
12
|
(493)
|
|
Net fees and commissions
|
334
|
243
|
1,038
|
11
|
1,626
|
|
|
Retail
|
Private
|
Commercial
&
|
Central
items
|
|
|
|
Banking
|
Banking
|
Institutional
|
&
other
|
Total
|
|
2023
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Assets
|
194,488
|
19,284
|
89,783
|
111,913
|
415,468
|
|
Liabilities
|
154,083
|
37,816
|
123,084
|
79,055
|
394,038
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
Assets
|
184,140
|
19,734
|
86,406
|
119,189
|
409,469
|
|
Liabilities
|
153,304
|
41,489
|
127,301
|
67,299
|
389,393
|
Notes to the financial statements
continued
4 Tax
|
|
2023
|
|
2022
|
|
|
£m
|
|
£m
|
|
Current tax
|
|
|
|
|
Charge for the year
|
(1,108)
|
|
(1,187)
|
|
(Under)/over provision in respect
of prior years
|
(63)
|
|
63
|
|
|
(1,171)
|
|
(1,124)
|
|
Deferred tax
|
|
|
|
|
Charge for the
year
|
(220)
|
|
(151)
|
|
UK tax rate change
impact
|
-
|
|
(82)
|
|
Increase/(decrease) in the
carrying value of deferred tax assets in respect of UK
losses
|
137
|
|
(6)
|
|
Under provision in respect of
prior years
|
(26)
|
|
(62)
|
|
Tax charge for the year
|
(1,280)
|
|
(1,425)
|
Current tax for the year ended 31
December 2023 is based on blended rates of 23.5% for the standard
rate of UK corporation tax and 4.25% for the UK banking
surcharge.
The actual tax charge differs from
the expected tax charge, computed by applying the standard rate of
UK corporation tax of 23.5% (2022 - 19%), as follows:
|
|
2023
|
|
2022
|
|
|
£m
|
|
£m
|
|
Expected tax charge
|
(1,125)
|
|
(972)
|
|
Losses and temporary differences
in period where no deferred tax asset recognised
|
(1)
|
|
-
|
|
Foreign profits taxed at other
rates
|
(8)
|
|
(8)
|
|
Items not allowed for
tax:
|
|
|
|
|
- losses on
disposals and write-downs
|
-
|
|
(8)
|
|
- UK bank
levy
|
(19)
|
|
(12)
|
|
- regulatory and
legal actions
|
-
|
|
6
|
|
- other
disallowable items
|
(32)
|
|
(13)
|
|
Non-taxable items
|
15
|
|
18
|
|
Taxable foreign exchange
movements
|
(1)
|
|
2
|
|
Increase/(decrease) in the
carrying value of deferred tax assets in respect of:
|
|
|
|
|
- UK
losses (2)
|
137
|
|
(6)
|
|
Banking surcharge
|
(190)
|
|
(373)
|
|
Tax on paid in equity
dividends
|
33
|
|
22
|
|
UK tax rate change
impact
|
-
|
|
(82)
|
|
Adjustments in respect of prior
years (1)
(2)
|
(89)
|
|
1
|
|
Actual tax charge
|
(1,280)
|
|
(1,425)
|
(1)
Prior year tax adjustments incorporate
refinements to tax computations made on submission and agreement
with the tax authorities and adjustments to provisions in respect
of uncertain tax positions.
(2)
Includes a net £69 million benefit from UK group
relief and loss relief claims at higher tax rates (refer to the
Deferred Tax section of the NatWest Bank Plc 2023 Annual Report and
Accounts for details of the recent changes in UK tax
rates).
On 11 July 2023 the government of
the UK, where the parent company is incorporated, enacted the
Pillar 2 income taxes legislation effective for the Group's
financial year beginning 1 January 2024. Under the legislation,
NatWest Group plc will be required to pay, in the UK, top-up tax on
profits of its subsidiaries that are taxed at a Pillar 2 effective
tax rate of less than 15%. This legislation is expected to have no
material impact for NWB Group.
Judgement: Tax contingencies
NWB Group's corporate income tax
charge and its provisions for corporate income taxes necessarily
involve a significant degree of estimation and judgement. The tax
treatment of some transactions is uncertain and tax computations
are yet to be agreed with the relevant tax authorities. NWB Group
recognises anticipated tax liabilities based on all available
evidence and, where appropriate, in the light of external advice.
Any difference between the final outcome and the amounts provided
will affect current and deferred income tax assets and charges in
the period when the matter is resolved.
For accounting policy information
refer to Accounting policy 2.1 in the NatWest Bank Plc 2023 Annual
Report and Accounts.
Notes to the financial statements
continued
5 Loan impairment
provisions
Loan exposure and impairment metrics
The table below summarises loans
and related credit impairment measures within the scope of ECL
framework.
|
|
NWB Group
|
|
NWB Plc
|
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
£m
|
£m
|
|
£m
|
£m
|
|
Loans - amortised cost
|
|
|
|
|
|
|
Stage 1
|
288,772
|
266,722
|
|
258,188
|
236,809
|
|
Stage 2
|
31,727
|
37,216
|
|
28,008
|
32,765
|
|
Stage 3
|
4,405
|
3,783
|
|
4,003
|
3,383
|
|
Inter-group (1)
|
1,809
|
4,220
|
|
32,200
|
30,633
|
|
Total
|
326,713
|
311,941
|
|
322,400
|
303,590
|
|
ECL provisions (2)
|
|
|
|
|
|
|
Stage 1
|
566
|
506
|
|
521
|
459
|
|
Stage 2
|
794
|
813
|
|
746
|
765
|
|
Stage 3
|
1,512
|
1,262
|
|
1,416
|
1,170
|
|
Inter-group
|
1
|
4
|
|
41
|
48
|
|
|
2,873
|
2,585
|
|
2,724
|
2,442
|
|
ECL provision
coverage (3)
|
|
|
|
|
|
|
Stage 1 (%)
|
0.2
|
0.19
|
|
0.2
|
0.19
|
|
Stage 2 (%)
|
2.5
|
2.18
|
|
2.7
|
2.33
|
|
Stage 3 (%)
|
34.3
|
33.36
|
|
35.4
|
34.58
|
|
Inter-group (%)
|
0.1
|
0.09
|
|
0.1
|
0.16
|
|
|
0.88
|
0.84
|
|
0.92
|
0.88
|
|
Impairment (releases)/losses
|
|
|
|
|
|
|
ECL
(release)/charge (4)
|
|
|
|
|
|
|
Stage 1
|
(319)
|
(243)
|
|
(302)
|
(256)
|
|
Stage 2
|
529
|
348
|
|
516
|
373
|
|
Stage 3
|
297
|
233
|
|
276
|
234
|
|
Third party
|
507
|
338
|
|
490
|
351
|
|
Inter-group
|
(3)
|
3
|
|
(7)
|
40
|
|
|
504
|
341
|
|
483
|
391
|
|
|
|
|
|
|
|
|
Amounts
written-off
|
235
|
321
|
|
218
|
272
|
|
(1)
|
NWB Group's intercompany assets
are classified in Stage 1.
|
|
(2)
|
Includes £8 million (2022 - £2
million) related to assets classified as FVOCI.
|
|
(3)
|
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 coverage
ratio.
|
|
(4)
|
Includes a £10 million charge
(2022 - nil) related to other financial assets, of which a £6
million charge (2022 - £1 million release) related to assets
classified as FVOCI, and includes a £2 million release (2022 - nil)
related to contingent liabilities.
|
|
(5)
|
The table shows gross loans only
and excludes amounts that are outside the scope of the ECL
framework. Refer to Financial instruments within the scope of the
IFRS 9 ECL framework in the NatWest Bank Plc 2023 Annual Report and
Accounts for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash
and balances at central banks totaling £47.8 billion (2022 - £72.5
billion) and debt securities of £31.5 billion (2022 - £14.1
billion).
|
Credit risk enhancement and mitigation
For information on credit risk
enhancement and mitigation held as security, refer to Risk and
capital management - credit risk enhancement and mitigation section
of the NatWest Bank Plc 2023 Annual Report and Accounts.
Critical accounting policy: Loan impairment
provisions
Accounting policy Note 2.3 in the
NatWest Bank Plc 2023 Annual Report and Accounts sets out how the
expected loss approach is applied. At 31 December 2023, customer
loan impairment provisions amounted to £2,873 million (2022 -
£2,585 million). A loan is impaired when there is objective
evidence that the cash flows will not occur in the manner expected
when the loan was advanced. Such evidence includes changes in the
credit rating of a borrower, the failure to make payments in
accordance with the loan agreement, significant reduction in the
value of any security, breach of limits or covenants, and
observable data about relevant macroeconomic measures.
The impairment loss is the
difference between the carrying value of the loan and the present
value of estimated future cash flows at the loan's original
effective interest rate. The measurement of credit impairment under
the IFRS expected loss model depends on management's assessment of
any potential deterioration in the creditworthiness of the
borrower, its modelling of expected performance and the application
of economic forecasts. All three elements require judgements that
are potentially significant to the estimate of impairment losses.
For further information and sensitivity analysis, refer to Risk and
capital management - measurement uncertainty and ECL sensitivity
analysis section of the NatWest Bank Plc 2023 Annual Report and
Accounts.
IFRS 9 ECL model design principles
Refer to Credit risk - IFRS 9 ECL
model design principles section of the NatWest Bank Plc 2023 Annual
Report and Accounts for further details.
Approach for multiple economic scenarios
(MES)
The base scenario plays a greater
part in the calculation of ECL than the approach to MES.
Refer to Credit risk - economic loss drivers -
probability weightings of scenarios section of the NatWest Bank Plc
2023 Annual Report and Accounts for further details.
Notes to the financial statements
continued
6 Provisions for liabilities and
charges
|
|
NWB Group
|
|
Provisions for liabilities and charges
|
|
|
Financial commitments and
guarantees
|
|
Total
|
|
Redress and other
litigation
|
|
|
|
Property
|
Other (1)
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
At 1 January 2023
|
292
|
105
|
59
|
94
|
550
|
|
Expected credit losses impairment
release
|
-
|
-
|
(3)
|
-
|
(3)
|
|
Currency translation and other
movements
|
(4)
|
-
|
-
|
(4)
|
(8)
|
|
Charge to income
statement
|
102
|
29
|
-
|
84
|
215
|
|
Release to income
statement
|
(17)
|
(47)
|
-
|
(24)
|
(88)
|
|
Provisions utilised
|
(126)
|
(23)
|
-
|
(61)
|
(210)
|
|
At 31 December 2023
|
247
|
64
|
56
|
89
|
456
|
|
|
NWB Plc
|
|
Provisions for liabilities and charges
|
|
|
Financial commitments and
guarantees
|
|
Total
|
|
Redress and other
litigation
|
|
|
|
Property
|
Other (1)
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
At 1 January 2023
|
286
|
103
|
57
|
73
|
519
|
|
Expected credit losses impairment
release
|
-
|
-
|
(3)
|
-
|
(3)
|
|
Currency translation and other
movements
|
(3)
|
-
|
-
|
(2)
|
(5)
|
|
Charge to income
statement
|
98
|
28
|
-
|
75
|
201
|
|
Release to income
statement
|
(16)
|
(46)
|
-
|
(21)
|
(83)
|
|
Provisions utilised
|
(124)
|
(22)
|
-
|
(59)
|
(205)
|
|
At 31 December 2023
|
241
|
63
|
54
|
66
|
424
|
(1)
Other materially comprises provisions relating to
restructuring costs.
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.
For accounting policy information
refer to Accounting policy Note 2.4 in the NatWest Bank Plc 2023
Annual Report and Accounts.
Critical accounting policy: Provisions for
liabilities
The key judgement is involved in
determining whether a present obligation exists. There is often a
high degree of uncertainty and judgement is based on the specific
facts and circumstances relating to individual events in
determining whether there is a present obligation. Judgement is
also involved in estimation of the probability, timing and amount
of any outflows. Where NWB Group can look to another party such as
an insurer to pay some or all of the expenditure required to settle
a provision, any reimbursement is recognised when, and only when,
it is virtually certain that it will be received.
Estimates - 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.
-
Customer redress: Provisions reflect the
estimated cost of redress attributable to claims where it is
determined that a present obligation exists.
-
Litigation and other regulatory: NWB Group is
engaged in various legal proceedings, both in the UK and in
overseas jurisdictions, including the US. For further information
in relation to legal proceedings and discussion of the associated
uncertainties, refer to Note 7.
-
Property: This includes provision for contractual
costs associated with vacant properties.
-
Other provisions: These materially comprise
provisions for onerous contracts and restructuring costs. Onerous
contract provisions comprise an estimate of the costs involved in
fulfilling the terms and conditions of contracts net of any
expected benefits to be received. This includes provision for
contractual costs associated with vacant properties. Redundancy and
restructuring provisions comprise the estimated cost of
restructuring, including redundancy costs where an obligation
exists.
Background information on all
material provisions is given in Note 7.
Notes to the financial statements
continued
7 Memorandum items
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 31 December 2023. Although NWB Group is
exposed to credit risk in the event of non-performance of the
obligations undertaken by customers, the amounts shown do not, and
are not intended to, provide any indication of NWB Group's
expectation of future losses.
|
|
NWB Group
|
|
NWB Plc
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
£m
|
£m
|
|
£m
|
£m
|
|
Contingent liabilities and commitments
|
|
|
|
|
|
|
Guarantees
|
1,376
|
1,728
|
|
1,320
|
1,664
|
|
Other contingent
liabilities
|
1,003
|
1,197
|
|
994
|
1,190
|
|
Standby facilities, credit lines
and other commitments
|
77,149
|
87,221
|
|
73,343
|
83,321
|
|
Total
|
79,528
|
90,146
|
|
75,657
|
86,175
|
Trustee and other fiduciary
activities
In its capacity as trustee or
other fiduciary role, NWB Group may hold or place assets on behalf
of individuals, trusts, companies, pension schemes and others. The
assets and their income are not included in NWB Group's financial
statements. NWB Group earned fee income of £205 million (2022 -
£215 million) from these activities.
The Financial Services Compensation
Scheme
The Financial Services
Compensation Scheme (FSCS), the UK's statutory fund of last resort
for customers of authorised financial services firms, pays
compensation if a firm is unable to meet its obligations. The FSCS
funds compensation for customers by raising management expenses
levies and compensation levies on the industry. In relation to
protected deposits, each deposit-taking institution contributes
towards these levies in proportion to their share of total
protected deposits on 31 December of the year preceding the scheme
year (which runs from 1 April to 31 March), subject to annual
maxima set by the Prudential Regulation Authority. In addition, the
FSCS has the power to raise levies on a firm that has ceased to
participate in the scheme and is in the process of ceasing to be
authorised for the costs that it would have been liable to pay had
the FSCS made a levy in the financial year it ceased to be a
participant in the scheme.
Litigation and regulatory matters
NWB Plc and its subsidiary and
associated undertakings ('NWB 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.
NWB 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 NWB 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. NWB 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 NWB
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 NWB 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 for
both 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
NWB 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. NWB Group expects that in
future periods, additional provisions and economic outflows
relating to Matters that may or may not be currently known by NWB
Group will be necessary, in amounts that are expected to be
substantial in some instances. Please refer
to Note 6 for information on material provisions.
Matters which are, or could be
material, either individually or in aggregate, having regard to NWB
Group, considered as a whole, in which NWB 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 NWB Group's litigation and regulatory matters
(including the Matters), see the Risk Factor relating to legal,
regulatory and governmental actions and investigations set out on
page 184 of the NatWest Bank Plc 2023 Annual Report and
Accounts.
Notes to the financial statements
continued
7
Memorandum items continued
Litigation
London Interbank Offered Rate (LIBOR) and other rates
litigation
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, NatWest Markets Plc, NatWest Markets Securities Inc. 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. The plaintiffs filed an amended
complaint but in October 2023, the
district court dismissed that complaint as well, and indicated that
further amendment would not be permitted. The plaintiffs have
commenced an appeal to the United States Court of Appeals for the
Ninth Circuit, which is currently pending.
Offshoring VAT assessments
HMRC 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. 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 £143 million to HMRC, and payment was made
in December 2020. The appeal and the application for judicial
review have both been stayed pending resolution of separate cases
involving other banks.
Regulatory matters
NWB Group's financial condition
can be affected by the actions of various governmental and
regulatory authorities in the UK, the US, the EU and elsewhere. NWB
Group and/or NatWest Group have 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.
NWB 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 NWB Group, remediation of systems and
controls, public or private censure, restriction of NWB 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 NWB 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.
NWB Group is co-operating fully
with the matters described below.
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.
Reviews into customer account closures
In July 2023, NatWest Group plc
commissioned an independent review by the law firm Travers Smith
LLP into issues that had arisen from treatment of a customer in
connection with an account closure decision that attracted
significant public attention and certain related interactions with
the media. NatWest Group plc has received reports in connection
with that review (and in October and December 2023 published
summaries of the key findings and recommendations).
In addition, NatWest Group plc is
conducting internal reviews with respect to certain governance
processes, policies, systems and controls of NatWest Group
entities, including with respect to customer account
closures.
The FCA is conducting supervisory
work into how the governance, systems and controls of NatWest Group
and Coutts & Company are working, to identify and address any
significant shortcomings.
Notes to the financial statements
continued
8 Related parties
UK Government
UK Government through HM Treasury
is the controlling shareholder of NatWest Group plc as per UK
Listing rules. The UK Government's shareholding is managed by UK
Government Investments Limited, a company wholly owned by the UK
Government. At 31 December 2023, HM
Treasury's holding in NatWest Group's ordinary shares was
37.97%. As a result the UK Government and
UK Government controlled bodies are related parties of the
Group.
NWB Group enters into transactions
with many of these bodies. Transactions include the payment of:
taxes, principally UK corporation tax (Note 4) and value added tax;
national insurance contributions; local authority rates; and
regulatory fees and levies; together with banking transactions such
as loans and levy sits undertaken in the normal course of
banker-customer relationships.
Bank of England facilities
NWB Group may participate in a
number of schemes operated by the Bank of England in the normal
course of business.
Members of NWB Group that are UK
authorised institutions are required to maintain non-interest
bearing (cash ratio) deposits with the Bank of England amounting to
0.382% of their average eligible liabilities in excess of £600
million. They also have access to Bank of England reserve accounts:
sterling current accounts that earn interest at the Bank of England
base rate.
NWB Plc guarantees certain
liabilities of NWH Group to the Bank of England.
Other related party
(a) In accordance with
IAS 24, transactions or balances between NWB Group entities that
have been eliminated on consolidation are not reported
(b) The primary
financial statements include transactions and balances with its
subsidiaries which have been further disclosed in the relevant
parent company notes.
Business and loan portfolio transfers
In 2023 no contingent liabilities
and commitments were transferred from NatWest Bank Plc to NWM N.V.
in relation to the Western European Corporate Portfolio (2022 -
£0.4 billion). The total contingent liabilities and commitments
transferred from NWM N.V. to NatWest Bank Plc in 2023 was nil (2022
- nil). As
part of a larger initiative to increase the diversity of the
banking book portfolio, £0.3 billion of contingent liabilities and
commitments and £0.1 billion of drawn balances were transferred
from NatWest Bank Plc to NWM N.V. in 2022.
Associates, joint ventures and equity
investments
In their roles as providers of
finance, NWB Group companies provide development and other types of
capital support to businesses. These investments are made in the
normal course of business. To further strategic partnerships, NWB
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 interest are over 10%. Ongoing business transactions
with these entities are on normal commercial terms.
At 31 December 2023 NWB Group held
investment in associates and joint Ventures amounting to £4 million
(2022- £2 million). For the year ended 31 December 2023 NWB Group's
share of losses of associates was £3 million (2022- £6 million). At
31 December 2023 there were balances within customer deposits of £2
million (2022 -nil) relating to associates and joint
ventures.
Post employment benefits
NatWest Group recharges NatWest
Group Pension Fund with the cost of pension management services
incurred by it.
Holding companies and fellow subsidiaries
Transactions NWB Group enters with
its holding companies and fellow subsidiaries also meet the
definition of related party transactions. The table below discloses
transactions between NWB Group and subsidiaries of NatWest
Group.
|
|
2023
|
|
2022
|
|
|
Holding
company
|
Fellow
subsidiaries
|
Total
|
|
Holding
company
|
Fellow
subsidiaries
|
Total
|
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
Interest receivable
|
-
|
133
|
133
|
|
1
|
40
|
41
|
|
Interest payable
|
(674)
|
(1,588)
|
(2,262)
|
|
(408)
|
(369)
|
(777)
|
|
Fees and commissions
receivable
|
-
|
62
|
62
|
|
-
|
97
|
97
|
|
Fees and commissions
payable
|
-
|
(71)
|
(71)
|
|
-
|
(70)
|
(70)
|
|
Other operating
income (1)
|
11
|
1,532
|
1,543
|
|
36
|
1,605
|
1,641
|
|
Other administration
expenses (2)
|
-
|
(156)
|
(156)
|
|
-
|
-
|
-
|
|
Impairment
(losses)/releases
|
3
|
-
|
3
|
|
(3)
|
-
|
(3)
|
|
|
(660)
|
(88)
|
(748)
|
|
(374)
|
1,303
|
929
|
(1)
Includes internal service recharges of £1,387
million (2022 - £1,616 million).
(2)
Other operating expense relates to a new profit
share arrangement with a fellow NatWest Group subsidiary that
commenced in 2023. The profit share arrangement was introduced
during the year to reward NWM Group on an arm's length basis for
its contribution to the performance of the NatWest Group Commercial
& Institutional business segment, 2023 being the first full
year with the Commercial & Institutional segment in
place.
Notes to the financial statements
continued
9 Date of approval
The annual results for the year
ended 31 December 2023 were approved by the board of directors on
15 February 2024.
10 Post balance sheet
events
There have been no other
significant events between 31 December 2023 and the date of
approval of these accounts which would require a change to or
additional disclosure in the accounts.
Statement of directors'
responsibilities
This statement should be read in
conjunction with the responsibilities of the auditor set out in
their report on pages 87 to 98 of the NatWest Bank Plc 2023 Annual
Report and Accounts.
The directors are responsible for
the preparation of the Annual Report and Accounts.
The directors are required to prepare Group
financial statements, and as permitted by the Companies Act 2006
have elected to prepare company financial statements, for each
financial year in accordance with UK adopted International
Accounting Standards. They are responsible
for preparing financial statements that present fairly the
financial position, financial performance and cash flows of NWB
Group and NWB Plc. In preparing those financial statements, the
directors are required to:
- select suitable accounting policies and then apply them
consistently;
- make judgements and estimates that are reasonable, relevant
and reliable; and
- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the company and Group
will continue in business.
The directors are responsible for
keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of NWB Group and to
enable them to ensure that the Annual Report and Accounts complies
with the Companies Act 2006. They are also responsible for
safeguarding the assets of NWB Plc and NWB Group and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Under applicable law and
regulations, the directors are also responsible for preparing a
Strategic report and Directors' report, that comply with that law
and those regulations. The directors are responsible for the
maintenance and integrity of the corporate and financial
information included on the company's website.
The directors confirm that to the
best of their knowledge:
- the financial statements, prepared in accordance with UK
adopted International Accounting Standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Bank and the undertakings included in the consolidation
taken as a whole; and
- the Strategic report and Directors' report (incorporating the
Financial review) includes a fair review of the development and
performance of the business and the position of the Bank and the
undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
By order of the Board
|
Howard Davies
|
John-Paul Thwaite
|
Katie Murray
|
|
Chairman
|
Chief Executive Officer
|
Chief Financial Officer
|
15 February 2024
Board of directors
|
Chairman
|
Executive directors
|
Non-executive directors
|
|
Howard Davies
|
John-Paul Thwaite
Katie Murray
|
Francesca Barnes
Ian Cormack
Roisin Donnelly
Patrick Flynn
Rick Haythornthwaite
Yasmin Jetha
Stuart Lewis
Mark Rennison
Mark Seligman
Lena Wilson
|
Forward-looking
statements
Cautionary statement regarding
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 that include, without limitation, the words 'expect',
'estimate', 'project', 'anticipate', 'commit', 'believe', 'should',
'intend', 'will', 'plan', 'could', 'probability', 'risk',
'Value-at-Risk (VaR)', 'target', 'goal', 'objective', 'may',
'endeavour', 'outlook', 'optimistic', 'prospects' and similar
expressions or variations on these expressions. These statements
concern or may affect future matters, such as NWB Group's future
economic results, business plans and strategies. In particular,
this document may include forward-looking statements relating to
NWB Group in respect of, but not limited to: its economic and
political risks, its regulatory capital position and related
requirements, its financial position, profitability and financial
performance (including financial, capital, cost savings and
operational targets), the implementation of NatWest Group's
strategy, its climate and sustainability related targets, its
access to adequate sources of liquidity and funding, increasing
competition from incumbents, challengers and new entrants and
disruptive technologies, its exposure to third party risks, its
ongoing compliance with the UK ring-fencing regime and ensuring
operational continuity in resolution, its impairment losses and
credit exposures under certain specified scenarios, substantial
regulation and oversight, ongoing legal, regulatory and
governmental actions and investigations, and NWB Group's exposure
to, operational risk, conduct risk, cyber, data and IT risk,
financial crime risk, key person risk and credit rating risk.
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, and general economic and political conditions and the
impact of climate-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 the NWB Group's actual
results are discussed in the NWB Plc's 2023 Annual Report and
Accounts (ARA). The forward-looking statements contained in this
document speak only as of the date of this document and NWB 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.
Legal Entity Identifier:
213800IBT39XQ9C4CP71