NatWest Group(NWG) - 2024 Q4 - Annual Report

Financial Performance - NatWest Group reported an income of £14,703 million for 2024, slightly down from £14,752 million in 2023[21]. - Profit before tax for the year was £6,195 million, compared to £6,178 million in 2023[21]. - The return on tangible equity was 17.5%, slightly down from 17.8% in 2023[22]. - NatWest Group achieved a strong financial performance in 2024, with income excluding notable items of £14.6 billion and a return on tangible equity (RoTE) of 17.5%[77]. - Total income excluding notable items for 2024 was £14,648 million, reflecting a 2.2% increase compared to 2023, driven by deposit margin expansion and lending growth[116]. - Total income for Retail Banking decreased to £5,650 million in 2024 from £5,931 million in 2023, representing a decline of 4.7%[163]. Customer Growth and Engagement - The operating profit before tax increased to £6.2 billion, and the bank welcomed approximately 500,000 new customers[78]. - In 2024, NatWest Group added approximately 500,000 new customers in Retail Banking, around 10,000 in Commercial & Institutional, and saw a 26% increase in referrals in Private Banking[115]. - The number of active mobile app users reached 10.5 million, with an average of 33 logins per month, indicating strong user engagement[165]. - NatWest Group serves over 19 million customers across its retail, private, and commercial banking sectors[160]. Loans and Deposits - Loans to customers increased to £400.3 billion, up from £381.4 billion in 2023, reflecting a growth of 5.0%[21]. - Customer deposits rose to £433.5 billion, a marginal increase from £431.4 billion in 2023[21]. - The bank's lending to business customers grew by £10 billion, and it welcomed 91,000 new start-ups in 2024[80]. - Customer deposits increased to £194.8 billion in 2024, up from £188.0 billion in 2023, marking a growth of 8.8%[163]. Shareholder Returns - Total capital returned to shareholders reached £4.0 billion, an increase from £3.6 billion in 2023[22]. - The bank returned £4.0 billion to shareholders through dividends and buybacks, with dividends per share increasing by 26%[79]. - The ordinary dividend per share increased to 21.5 pence in 2024, reflecting a 26% rise from 2023[147]. - Total buybacks in 2024 amounted to £2.2 billion, representing a 9% increase compared to 2023[147]. - The bank plans to increase its ordinary dividend payout ratio from approximately 40% to 50% starting in 2025[79]. Capital and Ratios - The Common Equity Tier 1 (CET1) ratio improved to 13.6%, compared to 13.4% in 2023[24]. - The Common Equity Tier 1 (CET1) ratio improved to 13.6%, up 20 basis points from 2023, primarily due to attributable profit[116]. - The loan impairment rate was 9 basis points in 2024, significantly lower than the 19 basis points average from 2018 to 2023[115]. Technology and Innovation - NatWest Group invested over £1.1 billion in 2024 to enhance technology capabilities and better serve customers[93]. - The bank's strategy focuses on becoming more technology-enabled and simplifying operations to better serve customer needs[50]. - The implementation of Generative AI-enabled tools has allowed advisors to spend more time with clients[200]. Climate and Sustainable Funding - NatWest Group aims to provide £100 billion in climate and sustainable funding by the end of 2025, having already provided £93.4 billion[37]. - NatWest Group provided £31.5 billion in climate and sustainable funding in 2024, reaching a cumulative total of £93.4 billion towards its £100 billion target by the end of 2025[82]. - NatWest Group provided £93.4 billion in climate and sustainable funding and financing towards a £100 billion target set for the period from July 2021 to the end of 2025[115][126]. Market Position and Strategy - The UK Government's shareholding in NatWest Group decreased from approximately 38% in December 2023 to 9.99% in December 2024, with expectations for complete divestment by 2025[59][60]. - NatWest Group's strategy focuses on disciplined growth, simplification, and active balance sheet management to create shareholder value[76]. - NatWest Group's strategy focuses on disciplined growth, simplification, and active balance sheet management to deliver attractive returns to shareholders[143]. - The bank's new intellectual property-backed lending initiative aims to support high-growth businesses lacking traditional fixed assets[136]. Customer Satisfaction - The Net Promoter Score (NPS) for Retail Banking increased from 21 in Q4 2023 to 23 in Q4 2024, indicating improved customer satisfaction[122]. - NatWest Group's digital engagement remained high, with 79% of Retail Banking customers banking entirely digitally in 2024, up from 77% in 2023[115].