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Our investment case

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Our investment case

Why invest in NatWest Group

2023 Annual Report and Accounts
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Our investment case

Our focus is on creating sustainable long-term value

Our RoTE target is >13% in 2026

  • Retail Banking
  • Private Banking
  • Commercial & Institutional

Leading positions in an attractive UK market serving 19 million customers

Attractive returns to shareholders
  • We expect a return on tangible equity of greater than 13% in 2026
  • Target an ordinary dividend payout ratio of ~40% with capacity for share buybacks
  • Underpinned by a robust balance sheet Target a CET1 ratio in the range of 13-14%

The targets and expectations on this page constitute forward-looking statements. Refer to the NatWest Group plc 2023 Annual Report and Accounts for further information.​

Shareholder value

We have a strong track record of returning surplus capital to shareholders and remain committed to a ~40% payout ratio with capacity for buybacks whilst operating within our 13-14% CET1 ratio target range.

Shareholder returns for the three years 2021-2023
£12.5bn
total distributions to shareholders(1) including
£5.8bn
ordinary and special dividends(2)
£6.7bn
share buybacks
49.7%(4)
Total shareholder return
28%
reduction in share count(7)
UK Government's shareholding reduced to
37.97%
at the end of December 2023
£1.8bn
returned to the UK Government in 2023(5)

(1) Paid and proposed.
(2) Does not cast due to rounding.
(3) In response to a formal request from the Prudential Regulation Authority, during the COVID-19 pandemic, the Board cancelled the final ordinary and special dividend payments in relation to the 2019 financial year. In 2020, NatWest Group plc decided not to undertake interim dividend payments or share buybacks.

2023 Financial highlights

Strong financial performance

Income

£14752m
(2022: £13,156m)

Profit before tax

£6178m
(2022: £5,132m)

Operating expenses

£7996m
(2022: £7,687m)

Profit attributable to shareholders

£4394m
(2022: £3,340m)

Strong capital generation

Common Equity Tier 1
(CET1) ratio(1)

13.4%
(2022: 14.2%)

Risk-weighted assets
(RWAs)(1)

£183.0bn
(2022: £176.1bn)

Total capital returned to shareholders(2)

£3.6bn
(2022: £5.1bn)

Return on tangible equity
(RoTE)

17.8%
(2022: 12.3%)

(1) On 1 January 2022 the pro forma CET1 ratio was 15.9% and RWAs were £176.3 billion following regulatory changes.
(2) Distributions paid and proposed. We paid a special dividend of £1.7 billion in 2022 as we returned surplus capital to shareholders. For full details of our distributions over the last five years refer to page 11 of the 2023 Annual Report and Accounts.

Visit results centre

Serving our customers every day

Our strategy is to grow our business by anticipating and meeting our customers’ needs, using data and technology to ensure we are simple to deal with, alongside a disciplined approach to cost, investment and capital allocation. Together these actions aim to deliver sustainable long-term value for our shareholders.

Supporting customers at every stage of their lives
Simple to deal with
Sharpened capital allocation
Powered by people, technology, innovation and partnerships

2024 priorities to deliver returns

Disciplined
growth

Building stable income streams

Bank-wide simplification

Improving productivity and efficiency

Active balance sheet and risk management

Driving capital generation and distribution capacity

Strengthened 2024 Guidance(1)

Total income excluding notable items

~£14.0bn

Other operating expenses(2)

Broadly stable vs 2023(3)

Loan impairment rate

Below 15bps

RoTE

>14%

(1) The guidance, targets, expectations and trends discussed in this presentation represent NatWest Group management’s current expectations and are subject to change, including as a result of the factors described in the “Risk Factors” in NWG’s 2023 Annual Report and Accounts and Form 20-F, the “Risk Factors” in NWM 2023 Annual Report, and the Summary Risk Factors in the NWG H1 2024 IMS and the NWM Plc H1 2024 IMS. For guidance relating to Capital, please refer to the H1 2024 IMS. These statements constitute forward-looking statements.

(2) Excluding litigation and conduct costs.

(3) Broadly stable vs 2023 ex +£0.1bn levies and ~£24m Retail Offer costs.

Strong businesses with capacity for growth ​


Our businesses: Leading positions with capacity for growth


(1) Current account stock. Full year 2023 share based on November 2023 CACI data.
(2) Stock share of Retail Banking and Private Banking mortgages, calculated as a percentage of Monthly amounts outstanding of total sterling net secured lending to individuals (in sterling millions) not seasonally adjusted as per December 2023 BoE data.
(3) Based on Unsecured lending including Cards, Loans, Overdrafts and central items calculated as a percentage of Monthly amounts outstanding of total (excluding the Student Loans Company) sterling net unsecured lending to individuals not seasonally adjusted based on Dec’23 BoE data. 		(4) Based on customer deposits (£bn) for Commercial & Institutional excluding NatWest Markets and RBSI, calculated as a percentage of M4 liabilities for Private Non-financial Businesses (PNFC’s) as per December 2023 Bank of England data.
(5) Based on gross loans and advances to customers at amortised cost for Commercial & Institutional excluding NWM and RBSI, calculated as a percentage of monthly amounts outstanding of sterling and all foreign currency loans to SMEs and large businesses as per December 2023 Bank of England data.
(6) Based on the % of 647 businesses, less than two years old, that name a NatWest Group brand as their main bank (19%). Source: MarketVue Business Banking from Savanta, YE Q4 2023. Data weighted by region and turnover to be representative of businesses in Great Britain.

Useful links

This webpage contains guidance, targets, expectations and trends that represent NatWest Group management’s current expectations, which constitute forward looking statements, and are subject to the risks inherent in statements about the future and to change, including as a result of the factors discussed in NatWest Group plc's 2023 Annual Report on Form 20-F (including in the section “Risk Factors” included therein) and its other public filings. The actual outcomes may differ materially from those expressed or implied by such forward-looking statements. Accordingly, prospective investors are cautioned not to place undue reliance on such statements, which speak only as of the date made. NatWest Group is under no obligation to update such statements except to the extent legally required.

NatWest Group prepares its financial statements in accordance with generally accepted accounting principles (GAAP). This webpage 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. Any Non-IFRS measures and/or APMs included in this webpage, 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. See page 138 of NatWest Group plc's 2023 Annual Report on Form 20-F.

The information, statements and opinions contained in this webpage 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.