NatWest Group(NWG) - 2025 Q1 - Quarterly Report

Financial Performance - Attributable profit for Q1 2025 was £1,252 million, with earnings per share of 15.5 pence and a return on tangible equity (RoTE) of 18.5%[14] - Operating profit before tax for Q1 2025 was £1,812 million, representing a 21.4% increase compared to Q4 2024[19] - Total income for Q1 2025 was £3,980 million, an increase of 14.5% compared to £3,475 million in Q1 2024[131] - Profit for the period increased to £1,341 million in Q1 2025, up 1% from £1,328 million in Q4 2024 and significantly up from £987 million in Q1 2024[106] - Total comprehensive income for the period reached £1,492 million, compared to £1,267 million in Q4 2024 and £903 million in Q1 2024, reflecting a strong year-over-year growth[106] Income and Revenue Growth - Total income excluding notable items increased by £80 million, or 2.1%, compared to Q4 2024, reaching £3,952 million, and was £538 million higher than Q1 2024[14] - Total income increased by 4.1% to £3,980 million compared to Q4 2024 and was 14.5% higher than Q1 2024, driven by deposit margin expansion and strong customer activity in trading income[24] - Total income increased by £56 million, or 2.7%, compared to Q4 2024, driven by strong customer activity in markets trading income and customer lending growth[39] Customer Loans and Deposits - Net loans to customers excluding central items rose by £3.4 billion, or 0.9%, to £371.9 billion, driven primarily by growth in Retail Banking mortgages and Corporate & Institutions[14] - Customer deposits excluding central items increased by £2.1 billion, or 0.5%, in the quarter, despite seasonal tax payment impacts[14] - Customer deposits rose to £434,617 million as of 31 March 2025, slightly up from £433,490 million at the end of 2024[108] - Net loans to customers increased by £3.4 billion to £371.9 billion, primarily due to a £2.0 billion increase in Retail Banking mortgage balances[24] Capital and Ratios - Common Equity Tier 1 (CET1) ratio improved to 13.8%, up 20 basis points from December 2024[16] - The CET1 ratio increased by 20 basis points to 13.8%, supported by attributable profit, despite an increase in risk-weighted assets (RWAs) of £3.8 billion to £187.0 billion[28] - The leverage ratio increased by 20 basis points to 5.2%, due to a £1.5 billion increase in Tier 1 capital, offset by a £5.3 billion increase in leverage exposure[77] - The liquidity coverage ratio (LCR) remained strong at 150%, with £54.2 billion headroom above the 100% minimum requirement[20] Impairment and Credit Quality - The net impairment charge was £189 million, or 19 basis points of gross customer loans, with an ECL provision of £3.5 billion and an ECL coverage ratio increasing from 0.83% to 0.86%[24] - An impairment charge of £78 million in Q1 2025, up from £39 million in Q1 2024, reflecting higher Stage 3 charges from larger counterparties[44] - ECL provisions by stage showed £1,890 million for Stage 1, £787 million for Stage 2, and £2,143 million for Stage 3, indicating a significant focus on higher-risk segments[67] Strategic Initiatives - The company continues to target providing £100 billion in climate and sustainable funding and financing by the end of 2025[14] - NatWest Group aims to provide £100 billion in climate and sustainable funding and financing by the end of 2025, with a target of at least £10 billion in lending for residential properties with EPC ratings A and B[142] Operational Efficiency - The cost:income ratio (excluding litigation and conduct) improved to 48.6% in Q1 2025 from 58.4% in Q1 2024[133] - Other operating expenses were £119 million, or 10.5%, lower than Q4 2024, mainly due to the non-repeat of the Q4 2024 annual Bank Levy[40] Employee and Market Data - The number of employees (FTEs) was reported at 61,300[50] - The average total equity increased to £40,354 million in Q1 2025 from £37,490 million in Q1 2024, reflecting a growth of 5.0%[139] Market Position and Growth - Retail Banking achieved a return on equity of 24.5% and an operating profit of £750 million, benefiting from deposit margin expansion[26] - Commercial & Institutional generated total income of £2,142 million, with an operating profit of £1,020 million and a return on equity of 19.3%[36]