{ "documentInfo": { "documentType": "https://xbrl.org/2021/xbrl-json", "features": { "xbrl:canonicalValues": true }, "namespaces": { "ifrs-full": "https://xbrl.ifrs.org/taxonomy/2024-03-27/ifrs-full", "iso4217": "http://www.xbrl.org/2003/iso4217", "nwg": "http://www.natwestgroup.com/20251231", "scheme": "http://standards.iso.org/iso/17442", "xbrl": "https://xbrl.org/2021", "xbrli": "http://www.xbrl.org/2003/instance" }, "taxonomy": [ "http://www.natwestgroup.com/xbrl/2025/2138005O9XJIJN4JPN90-2025-12-31.xsd" ] }, "facts": { "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00210": { "value": "NatWest Group is a UK-focused banking organisation, serving over 20 million customers, with business operations reaching across retail, commercial and private banking markets. Details of the organisational structure and a business overview of NatWest Group are contained in the Business review. This includes details of the products and services provided by each of our operating areas and the markets where they operate. Details of the strategy for delivering the company\u2019s objectives can be found in the Strategic report.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00241": { "value": "Credit riskDe\ufb01nition (audited)
Credit risk is the risk that customers,
counterparties or issuers fail to meet a
contractual obligation to settle outstanding
amounts. For the purposes of the credit risk
section, Personal refers to lending to
individuals and Non-Personal refers to lending
to small and medium-sized enterprises,
corporates, banks and other \ufb01nancial
institutions.
Sources of risk (audited)
The principal sources of credit risk for
NatWest Group are lending, off-balance sheet
products, derivatives and securities \ufb01nancing,
and debt securities. NatWest Group is also
exposed to settlement risk through foreign
exchange, trade \ufb01nance and payments
activities.
Governance (audited)
Risk governance for credit risk is in line with
the approach outlined in the Risk
management framework section.
The Credit Risk function provides oversight
and challenge of frontline credit risk
management activities:
\u2022
Establishing credit risk policy, standards
and toolkits which set out the mandatory
limits and parameters required to ensure
that credit risk is managed within risk
appetite and which provide the minimum
standards for the identi\ufb01cation,
assessment, management, monitoring
and reporting of credit risk.
\u2022
Oversight of the \ufb01rst line of defence to
ensure that credit risk remains within the
appetite set by the Board and that it is
being managed adequately and
effectively.
\u2022
Assessing the adequacy of ECL provisions
including approving key IFRS 9 inputs
(such as signi\ufb01cant increase in credit risk
(SICR) thresholds) and any necessary in-
model and post model adjustments
through NatWest Group and business unit
provisions and model committees.
Risk appetite (audited)
Risk appetite for credit risk is in line with the
approach outlined in the Risk management
framework section.
Credit risk appetite is monitored through risk
appetite frameworks tailored to NatWest
Group\u2019s Personal and Non-Personal
segments.
Personal
The Personal credit risk appetite framework
sets limits that control the quality and
concentration of both existing and new
business for each relevant business segment.
Risk appetite measures consider the
segments\u2019 ability to grow sustainably and the
level of losses expected under stress. Credit
risk is further controlled through operational
limits speci\ufb01c to customer or product
characteristics.
Non-Personal
The Non-Personal credit risk appetite
framework has been designed to re\ufb02ect
factors that in\ufb02uence the ability to operate
within risk appetite. Tools such as stress
testing and economic capital are used to
measure credit risk volatility and develop links
between the framework and risk appetite
limits.
The framework is used to manage
concentrations of risk which may arise across
four lenses \u2013 single name, sector, country
and product and asset classes. The
framework is supported by a suite of
transactional acceptance standards that set
out the risk parameters within which
businesses should operate. Problem debt management
(audited)
\n
When stress or \ufb01nancial dif\ufb01culties are
\n
identi\ufb01ed, NatWest Group collaborates closely
\n
with customers to support them.
\n
Personal
\n
Pre-emptive triggers, based on both NatWest
\n
Group and credit reference agency data, are
\n
used to identify customers that may be at
\n
risk of \ufb01nancial dif\ufb01culty. NatWest Group
\n
proactively contacts these customers to offer
\n
support with the aim of preventing further
\n
deterioration of their \ufb01nancial position.
\n
Financial Health and Support
\n
When a customer exceeds an agreed limit or
\n
misses a regular monthly payment, the
\n
customer is contacted by NatWest Group and
\n
requested to remedy the position. If the
\n
situation is not resolved then, where
\n
appropriate, the Financial Health and Support
\n
team become involved and the customer is
\n
supported by skilled debt management staff
\n
who endeavour to provide customers with
\n
bespoke solutions.
\n
If appropriate, a notice of intention to default
\n
and/or a formal demand may be issued to the
\n
customer. The account may also be
\n
registered with credit reference agencies.
\n
Subsequently, the customer\u2019s debt may be
\n
referred to a third-party debt collection
\n
agency or solicitor, to agree an affordable
\n
repayment plan. The sale of unsecured debt
\n
may also be considered as an option.
\n
Non-Personal
\n
NatWest Group uses a range of early warning
\n
indicators to identify customers that may be
\n
exposed to emerging risks, including \ufb01nancial
\n
stress, allowing for increased monitoring
\n
where necessary. Early warning indicators
\n
may be internal, such as a customer\u2019s bank
\n
account activity, or external, such as the
\n
share price of a publicly listed customer.
\n
When these indicators suggest that a
\n
customer is experiencing potential or actual
\n
dif\ufb01culty, or if relationship managers or credit
\n
of\ufb01cers observe other signs of \ufb01nancial
\n
dif\ufb01culty, the customer may be classi\ufb01ed
\n
within the Wholesale Problem Debt
\n
Management framework.
\n
Wholesale Problem Debt Management
\n
framework
\n
This framework focuses on Non-Personal
\n
customers and is designed to provide early
\n
identi\ufb01cation of credit deterioration, support
\n
intelligent risk-taking, ensure fair and
\n
consistent customer outcomes and provide
\n
key insights into Non-Personal lending
\n
portfolios.
\n
There are two classi\ufb01cations in the
\n
framework that apply to non-defaulted
\n
customers that are in \ufb01nancial stress \u2013
\n
Heightened Monitoring and Risk of Credit
\n
Loss.
\n
For the purposes of provisioning, all
\n
exposures categorised as Heightened
\n
Monitoring or Risk of Credit Loss are
\n
categorised as Stage 2 and subject to a
\n
lifetime loss assessment.
\n
The framework also applies to those
\n
customers that have met NatWest Group\u2019s
\n
default criteria (AQ10 exposures). Defaulted
\n
exposures are categorised as Stage 3
\n
impaired for provisioning purposes.
\n
Heightened Monitoring customers are
\n
performing customers that have met certain
\n
characteristics, which have led to signi\ufb01cant
\n
credit deterioration. Characteristics include
\n
trading issues, covenant breaches, material
\n
probability of default (PD) downgrades and
\n
past due facilities.
\n
Heightened Monitoring customers require
\n
pre-emptive actions (outside the customer\u2019s
\n
normal trading patterns) to return or maintain
\n
their facilities within NatWest Group\u2019s current
\n
risk appetite.
\n
Risk of Credit Loss customers are performing
\n
customers that have met the criteria for
\n
Heightened Monitoring and also pose a risk of
\n
credit loss to NatWest Group in the next 12
\n
months should mitigating action not be taken
\n
or not be successful.
\n
The Wholesale Problem Debt Management
\n
framework does not apply to problem debt
\n
management for small and medium-sized
\n
enterprise retail customers. These customers
\n
are, where necessary, managed by specialist
\n
problem debt management teams, depending
\n
on the size of exposure or by the Financial
\n
Health and Support team where a loan has
\n
been impaired.
Customer Lending Support
Where customers meet speci\ufb01c referral
criteria, relationships are supported by the
Customer Lending Support team.
Customer Lending Support works with
corporate and commercial customers in
\ufb01nancial dif\ufb01culty to help them understand
their options and how their restructuring or
repayment strategies can be delivered.
Helping viable customers return to \ufb01nancial
health and restoring a normal banking
relationship is always the preferred outcome.
However, where this is not possible, NatWest
Group works with customers to achieve a
solvent outcome.
Forbearance (audited)
Forbearance occurs when a concession is
made on the contractual terms of a debt in
response to a customer\u2019s \ufb01nancial dif\ufb01culties.
The aim of forbearance is to help the
customer regain \ufb01nancial stability while
reducing risk. To ensure that forbearance is
appropriate for the customer, minimum
standards are applied when assessing,
recording, monitoring and reporting
forbearance.
Personal
Forbearance options include payment
concessions, loan rescheduling (such as
extending contractual maturity), switching to
interest-only payments, suspending interest
or capitalising arrears. This support can be
provided for both mortgages and unsecured
lending.
Non-Personal
Forbearance may involve covenant waivers,
amendments to margins, payment
concessions and loan rescheduling (including
extensions in contractual maturity),
capitalisation of arrears, and debt forgiveness
or debt-for-equity swaps.
Customer PD and facility loss given default
(LGD) are reassessed prior to \ufb01nalising any
forbearance arrangement. The ultimate
outcome of a forbearance strategy is highly
dependent on the co-operation of the
borrower and a viable business or repayment
outcome. If forbearance becomes unsuitable
or is unsuccessful, NatWest Group may
pursue repayment, enforcement of security
or insolvency proceedings, although these are
options of last resort.
IFRS 9 models
(audited)
IFRS 9 models provide PD, exposure at
default (EAD) and LGD for the purpose of
calculating ECL.
Model build
Risk ranking is normally the same as for
internal ratings based (IRB) models to
maintain consistency in risk measurement.
Economic drivers are incorporated, normally
by using stress models. Term structures are
used to assess the risk of loss beyond 12
months that will affect lifetime loss for
exposures which have signi\ufb01cantly
deteriorated (Stage 2) or defaulted (Stage 3).
Model application
Model application involves selecting forward-
looking economic scenarios and assigning
appropriate probability weights.
Model design principles
The modelling of ECL under IFRS 9 adopts
the standard approach of breaking down
credit loss estimation into its component
parts of PD, LGD and EAD. To comply with
IFRS 9, these model parameters are designed
with the following characteristics:
\u2022
Unbiased \u2013 provide a best estimate.
\u2022
Point-in-time \u2013 re\ufb02ecting current
economic conditions as opposed to
through-the-cycle.
\u2022
Economic forecasts \u2013 IFRS 9 PD estimates
and, where appropriate, EAD and LGD
estimates re\ufb02ecting economic forecasts.
\u2022
Lifetime measurement \u2013 parameters are
provided as multi-period term structures
up to behavioural lifetimes.
PD
Personal
Personal PD models follow a discrete multi-
horizon survival approach, predicting
quarterly PDs up to lifetime at account level.
A key driver is the score from related IRB PD
models, with economic forecasts incorporated
through the stress models.
Non-Personal
Non-Personal PD models use a point-in-
time/through-the-cycle framework to provide
point-in-time estimates that re\ufb02ect economic
conditions at the reporting date. A key driver
is the score from related IRB PD models, with
economic forecasts incorporated through the
stress models.
LGD
Personal
Economic forecasts are incorporated for the
secured portfolios, where changes in property
prices can be readily accommodated.
Analysis has shown limited sensitivity to
economic conditions on LGDs for the other
Personal portfolios.
Non-Personal
Economic forecasts are incorporated into
LGD estimates using the existing point-in-
time/through-the-cycle framework. However,
for some portfolios, including low-default,
sovereigns and banks, there is insuf\ufb01cient loss
data to substantiate estimates that vary with
economic conditions.
EAD
Personal
Revolving products employ existing IRB
models as a foundation, with appropriate
adjustments incorporating a term structure
based on time to default. Amortising products
use an amortisation schedule, where a
formula is used to calculate the expected
balance based on remaining terms and
interest rates.
Non-Personal
EAD values rely on product-speci\ufb01c credit
conversion factors (CCFs), closely mirroring
the product segmentation and approach of
the respective IRB model, but without
conservative or downturn assumptions. These
CCFs are estimated over multi-year time
horizons.
Economic drivers (audited)
Introduction
The portfolio segmentation and selection of
economic drivers for IFRS 9 follows the
approach used in stress testing. The stress
models for each portfolio segment (de\ufb01ned by
product or asset class and where relevant,
industry sector and region) are based on a
selected, small number of economic variables
that best explain the movements in portfolio
loss rates. The process to select economic
drivers uses empirical analysis and expert
judgement.
Economic drivers (audited)
\n
The most signi\ufb01cant economic drivers for
\n
material portfolios are shown in the table
\n
below:
\n\n \n
Portfolio
Economic drivers
Unemployment rate, sterling
Personal
swap rate, house price index,
mortgages
real wage
Personal
Unemployment rate, sterling
unsecured
swap rate, real wage
Stock price index, gross
Corporates
domestic product (GDP)
Commercial
Stock price index, commercial
real estate
property price index, GDP
\n
Economic scenarios
\n
At 31 December 2025, the range of
\n
anticipated future economic conditions was
\n
de\ufb01ned by a set of four internally developed
\n
scenarios and their respective probabilities. In
\n
addition to the base case, they comprised
\n
upside, downside and extreme downside
\n
scenarios.
\n
For 31 December 2025, the four scenarios
\n
were deemed appropriate in capturing the
\n
uncertainty in economic forecasts and the
\n
non-linearity in outcomes under different
\n
scenarios. These four scenarios were
\n
developed to provide suf\ufb01cient coverage to
\n
current risks faced by the economy and
\n
consider varying outcomes across the labour
\n
market, in\ufb02ation, interest rate, asset price
\n
and economic growth, around which there
\n
remains pronounced levels of uncertainty.
\n
Since 31 December 2024, the near-term
\n
economic growth outlook weakened, with
\n
growth in the second half of 2025 losing
\n
momentum. In\ufb02ation rose to nearly double
\n
the target level of 2% in 2025, with underlying
\n
price pressures remaining \ufb01rm. However,
\n
there are tentative signs of easing in\ufb02ationary
\n
pressures and in\ufb02ation is assumed to fall back
\n
close to the target by the end of 2026. The
\n
peak unemployment rate is higher than at 31
\n
December 2024. The unemployment rate is
\n
assumed to continue to rise in the near-term,
\n
albeit at a slower pace. The Bank of England
\n
is expected to continue cutting interest rates
\n
in a \u2018gradual and careful\u2019 manner with an
\n
assumed terminal rate in the base case of
\n
3.25%, marginally lower compared to 3.5%
\n
assumed at 31 December 2024. Housing
\n
market activities remained resilient in 2025,
\n
with prices expected to grow modestly.
\n
High-level narrative \u2013 potential developments, vulnerabilities and risks
\n\n \n
Outperformance sustained
\u2013 above trend growth as
consumer sentiment recovers
Upside
Steady growth
\u2013 staying close to trend pace
Base case
Growth
Stalling
\u2013 cautious consumer and policy uncertainty
weighs on activity
Downside
Extreme stress
\u2013 extreme fall in GDP, with policy
support to facilitate sharp recovery
Extreme downside
Sticky
\u2013 strong growth and/or wage policies keep
services in\ufb02ation above target in medium term
Upside
Battle won
\u2013 beyond near-term volatility, services
in\ufb02ation continues to ease, 2% target is met on a
In\ufb02ation
sustained basis
Base case
Slow
\u2013 above target in\ufb02ation in 2026 but swiftly falls to
lower levels
Downside
Close to de\ufb02ation
\u2013 in\ufb02ationary pressures diminish
amidst pronounced weakness in demand
Extreme downside
Recovery
\u2013 job growth rebounds strongly, reversing
much of the recent rise in unemployment rate
Upside
Cooling continues
\u2013 gradual loosening continues into
Labour
2026, before improving
Base case
market
Job shedding
\u2013 redundancies, reduced hours, building
slack
Downside
Depression
\u2013 unemployment hits levels close to previous
peaks amid severe stress
Extreme downside
Limited cuts
\u2013 higher growth and in\ufb02ation keep the
Monetary Policy Committee cautious
Upside
Steady
\u2013 rate cutting cycle largely done, two further
Rates
rate cuts
Base case
short-term
Supportive
\u2013 sharp declines to support recovery
Downside
Sharp drop
\u2013 drastic easing in policy to support a sharp
deterioration in the economy
Extreme downside
Above consensus
\u2013 4%
Upside
Rates
Middle
\u2013 3.25%
Base case
long-term
Low
\u2013 2.5% and below
Downside/Extreme downside
Economic drivers
(audited)
\n
Main macroeconomic variables
\n
The main macroeconomic variables for each of the four scenarios used for ECL modelling are set out in the table below.
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Upside
Base case
Downside
downside
average
Upside
Base case
Downside
downside
average
Five-year summary
%
%
%
%
%
%
%
%
%
%
GDP
2.1
1.4
0.5
0.1
1.2
2.0
1.3
0.5
(0.2)
1.1
Unemployment rate
4.3
5.1
5.6
7.0
5.3
3.6
4.3
5.0
6.7
4.6
House price index
5.7
3.3
0.6
(3.8)
2.6
5.8
3.5
0.8
(4.3)
2.7
Commercial real estate price
6.1
2.2
(0.3)
(5.0)
1.9
5.4
1.2
(1.0)
(5.7)
1.1
Consumer price index
2.6
2.4
2.4
1.8
2.3
2.4
2.2
3.5
1.6
2.4
Bank of England base rate
4.0
3.5
2.6
1.4
3.2
4.4
4.0
3.0
1.6
3.6
Stock price index
6.2
4.8
2.8
1.1
4.3
6.3
5.0
3.4
1.1
4.5
World GDP
3.7
3.1
2.5
2.2
3.0
3.8
3.2
2.5
1.6
3.0
Probability weight
22.4
45.0
19.5
13.1
23.2
45.0
19.1
12.7
\n
(1)
The \ufb01ve-year summary runs from 2025-2029 for 31 December 2025
\n
and from 2024-2028 for 31 December 2024.
\n
(2)
The table shows compound annual growth rate (CAGR) for GDP,
\n
average levels for the unemployment rate and Bank of England base
\n
rate and Q4 to Q4 CAGR for other parameters.
\n
(3)
An implicit carbon price is an additional cost related to greenhouse gas
\n
emissions as a result of climate transition policy.
\n
Climate transition
\n
Since 2023, NatWest Group has assessed the
\n
implicit contribution to its base case
\n
macroeconomic scenario from changes in UK
\n
transition policy, expressed as an additional
\n
implicit sectoral carbon price
\n
(3)
\n
. Climate
\n
transition policy contribution to the total ECL
\n
was immaterial at the end of 2025.
\n
In 2025, NatWest Group individually assessed
\n
50 active and potential UK transition policies
\n
that had a signi\ufb01cant impact on the cost of
\n
emissions \u2013 for example, the Emissions
\n
Trading Scheme and Renewables Obligation \u2013
\n
and converted them into equivalent implicit
\n
sectoral carbon prices. The prices were
\n
calculated as the cost per tonne of emissions
\n
abated by each policy. Using an internally
\n
developed model, NatWest Group estimated
\n
the impact of sector carbon prices on key
\n
macroeconomic variables such as GDP and
\n
unemployment. Using this analysis, NatWest
\n
Group created two scenarios, the baseline,
\n
which incorporates climate transition related
\n
impacts, and an alternative scenario, which
\n
excludes them.
\n
Comparing ECL under these two scenarios
\n
allowed NatWest Group to estimate an
\n
aggregate macroeconomic impact of the
\n
analysed transition policies and their
\n
contribution to ECL.
\n
The current approach does not include
\n
physical risks and transition risks, beyond the
\n
assessed transition policies. NatWest Group
\n
will continue to enhance and develop the
\n
approach as reliable data and methodology
\n
become available.
\n
Probability weightings of scenarios
\n
NatWest Group applies a quantitative
\n
approach for IFRS 9 multiple economic
\n
scenarios by selecting speci\ufb01c discrete
\n
scenarios that represent the range of risks in
\n
the economic outlook and assigning
\n
appropriate probability weights.
\n
The approach involves comparing GDP paths
\n
for NatWest Group\u2019s scenarios against a set
\n
of 1,000 model simulations to determine the
\n
percentile in the distribution that aligns most
\n
closely with each scenario.
\n
The probability weight for the base case is
\n
determined \ufb01rst using judgement, while
\n
probability weights for the alternative
\n
scenarios are then assigned based on these
\n
percentiles scores.
\n
The weights were broadly comparable to
\n
those used at 31 December 2024 but with
\n
slightly more downside skew. The assigned
\n
probability weights were judged to be aligned
\n
with the subjective assessment of balance of
\n
the risks in the economy. Given the balance
\n
of risks that the economies in which NatWest
\n
Group operates are exposed to, NatWest
\n
Group judges it appropriate that downside-
\n
biased scenarios have higher combined
\n
probability weights than the upside-biased
\n
scenario.
\n
It presents good coverage to the range of
\n
outcomes assumed in the scenarios, including
\n
the potential for a robust recovery on the
\n
upside and exceptionally challenging
\n
outcomes on the downside. A 22.4%
\n
weighting was applied to the upside scenario,
\n
a 45.0% weighting applied to the base case
\n
scenario, a 19.5% weighting applied to the
\n
downside scenario and a 13.1% weighting
\n
applied to the extreme downside scenario.
Economic drivers
(audited)
\n
2,600
\n
2,700
\n
2,800
\n
2,900
\n
3,000
\n
3,100
\n
3,200
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK gross domestic product (\u00a3bn)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
7
\n
8
\n
9
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK unemployment rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
Bank of England base rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
100
\n
120
\n
140
\n
160
\n
180
\n
200
\n
220
\n
240
\n
260
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK house prices (index)
\n
Upside
Base case
\n
Downside
Extreme downside
Economic drivers
(audited)
\n
Annual \ufb01gures
\n \n \n
GDP - annual growth
Consumer price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
1.4
1.4
1.4
1.4
1.4
2025
3.6
3.6
3.6
3.6
3.6
2026
1.9
1.0
0.3
(3.7)
0.5
2026
2.7
2.3
2.7
0.6
2.3
2027
3.2
1.5
(0.6)
(0.2)
1.3
2027
2.4
2.0
1.8
1.1
1.9
2028
2.3
1.4
0.2
1.4
1.4
2028
2.1
2.0
1.7
1.8
1.9
2029
1.6
1.4
1.4
1.4
1.5
2029
2.0
2.0
2.0
2.0
2.0
2030
1.6
1.4
1.7
1.4
1.5
2030
2.0
2.0
2.0
2.0
2.0
\n\n \n
Unemployment rate - annual average
Bank of England base rate - annual average
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
4.8
4.8
4.8
4.8
4.8
2025
4.24
4.24
4.24
4.24
4.24
2026
4.7
5.4
5.5
6.1
5.3
2026
4.00
3.52
2.94
1.14
3.20
2027
4.1
5.2
6.1
8.1
5.5
2027
4.00
3.25
2.00
0.17
2.77
2028
4.1
5.1
6.0
8.3
5.4
2028
4.00
3.25
2.00
0.39
2.80
2029
4.0
4.9
5.7
7.6
5.2
2029
4.00
3.25
2.00
1.02
2.88
2030
4.0
4.8
5.5
6.9
5.1
2030
4.00
3.25
2.15
1.82
3.02
\n\n \n
House price index - four quarter change
Stock price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
3.0
3.0
3.0
3.0
3.0
2025
11.1
11.1
11.1
11.1
11.1
2026
7.8
3.4
(1.2)
(13.1)
1.3
2026
8.1
3.3
(16.0)
(52.9)
(6.7)
2027
7.2
3.4
(2.8)
(14.1)
1.2
2027
5.1
3.3
7.2
33.9
6.5
2028
5.1
3.4
0.1
(0.2)
2.9
2028
3.5
3.3
7.2
25.3
5.9
2029
5.4
3.4
4.4
7.2
4.5
2029
3.5
3.3
7.2
20.2
5.7
2030
5.6
3.4
4.2
6.6
4.4
2030
3.0
3.3
7.2
16.8
5.5
\n\n \n
Commercial real estate price - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
2.6
2.6
2.6
2.6
2.6
2026
14.1
2.9
(6.8)
(24.1)
-
2027
4.4
2.6
(2.5)
(13.0)
0.6
2028
5.5
1.5
2.8
7.0
3.3
2029
4.2
1.6
2.6
6.8
2.9
2030
2.7
1.6
2.5
6.5
2.5
Economic drivers
(audited)
\n
Worst points
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Downside
downside
average
Downside
downside
average
%
Quarter
%
Quarter
%
%
Quarter
%
Quarter
%
GDP
-
Q4 2027
(3.8)
Q4 2026
-
-
Q1 2024
(4.1)
Q4 2025
-
Unemployment rate - peak
6.2
Q4 2027
8.5
Q4 2027
5.6
5.6
Q4 2026
8.5
Q1 2027
4.9
House price index
(2.4)
Q2 2028
(25.9)
Q2 2028
-
(1.9)
Q2 2027
(25.6)
Q3 2027
-
Commercial real estate price
(7.3)
Q2 2027
(33.3)
Q3 2027
-
(10.5)
Q2 2026
(35.0)
Q3 2026
(1.8)
Consumer price index
- highest four quarter change
3.8
Q3 2025
3.8
Q3 2025
3.8
6.1
Q1 2026
3.5
Q1 2024
3.5
Bank of England base rate - extreme level
2.0
Q1 2025
0.1
Q1 2025
2.8
2.0
Q1 2024
0.1
Q1 2024
2.9
Stock price index
(6.7)
Q4 2026
(47.7)
Q4 2026
-
(0.2)
Q4 2025
(27.4)
Q4 2025
-
\n
(1)
The figures show falls relative to the starting period for GDP, house price index,
\n
commercial real estate price and stock price index. For unemployment rate, it
\n
shows highest value through the scenario horizon. For consumer price index, it
\n
shows highest annual percentage change. For Bank of England base rate, it
\n
shows highest or lowest value through the horizon. The calculations are
\n
performed over five years, with a starting point of Q4 2024 for 31 December
\n
2025 scenarios and Q4 2023 for 31 December 2024 scenarios.
Impairment, provisioning and write-
offs (audited)
In the overall assessment of credit risk,
impairment provisioning and write-offs are
used as key indicators of credit quality.
SICR
Defaulted exposures are classi\ufb01ed in Stage 3
and subject to lifetime ECL measurement.
Remaining exposures are assessed for SICR
since initial recognition. Where exposures are
identi\ufb01ed with SICR, they are classi\ufb01ed in
Stage 2 and assessed using a lifetime ECL
measurement. Exposures not considered
deteriorated are assessed with a 12-month
ECL. NatWest Group applies a framework to
identify deterioration, primarily based on
changes in lifetime PD, supported by
additional qualitative high-risk backstops.
\u2022
IFRS 9 lifetime PD assessment (the
primary driver) \u2013 relies on measuring the
relative deterioration in forward-looking
lifetime PD and is assessed monthly. SICR
is determined by comparing the residual
lifetime PD at the balance sheet date with
the lifetime PD at the date of initial
recognition (DOIR). If the current lifetime
PD exceeds the origination PD by more
than a de\ufb01ned threshold, SICR is assumed
to have occurred and the exposure moved
into Stage 2 for a lifetime ECL
assessment. For Non-Personal, a doubling
of PD would indicate a SICR, subject to a
minimum PD uplift of 0.1%. For Personal
portfolios and small and medium-sized
enterprise retail, the criteria vary by risk
band, as detailed in the following table:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Personal
PD bandings (based
\u00a0
risk
on
residual lifetime PD
PD deterioration
bands
calculated at DOIR)
threshold criteria
A
<0.762%
PD@DOIR + 1%
B
<4.306%
PD@DOIR + 3%
C
>=4.306%
1.7 x PD@DOIR
\n
\u2022
Qualitative high-risk backstop assessment
\u2013 supplements the PD assessment to
evaluate whether signi\ufb01cant deterioration
in lifetime risk of default occurred. This
included the mandatory 30+ days past
due backstop, as prescribed by IFRS 9
guidance, as well as other elements such
as forbearance support, Non-Personal
exposures managed within the Wholesale
Problem Debt Management framework,
and adverse credit bureau results for
Personal customers.
\u2022
Persistence (Personal and small and
medium-sized enterprise retail customers
only) \u2013 the persistence rule ensures that
accounts which have met the criteria for
PD driven deterioration are still considered
to be signi\ufb01cantly deteriorated for three
months thereafter. This additional rule
enhances the timeliness of capture into
Stage 2. The persistence rule is applied to
PD driven deterioration only.
Lifetime
The de\ufb01nitions of initial recognition and asset
lifetime are important considerations when
determining the amount of lifetime losses to
be applied.
\u2022
Initial recognition refers to the date that a
transaction (or account) is \ufb01rst recognised
on the balance sheet, with the PD at that
point serving as the basis for subsequent
determination of SICR, as detailed above.
\u2022
For asset lifetime, the approach is aligned
with IFRS 9 requirements:
o
Term lending \u2013 the contractual
maturity date is used and adjusted
for behavioural trends where
applicable, such as expected
prepayment and amortisation.
o
Revolving facilities \u2013 for Personal
portfolios (excluding credit cards),
asset duration is determined by
behavioural life, which was typically
greater than contractual life. For the
Non-Personal portfolios, asset
duration is based on annual
customer review schedules.
Governance
The IFRS 9 PD, EAD and LGD models are
subject to NatWest Group\u2019s model risk policy,
which stipulates periodic model monitoring
and, re-validation and de\ufb01nes approval
procedures and authorities according to
model materiality. Post model adjustments are
applied where management deemed them
necessary to ensure an adequate level of
overall ECL provision. All post model
adjustments undergo review, challenge and
approval by the relevant model or provisioning
committees.
Post model adjustments will remain a key
focus area of NatWest Group\u2019s ongoing ECL
adequacy assessment process. A
comprehensive framework has been
established that incorporates analysis of
diverse economic data, external benchmarks
and portfolio performance trends with a
particular focus on segments (across both
Personal and Non-Personal portfolios) that
may be more susceptible to speci\ufb01c risk
factors.
Measurement uncertainty and ECL
sensitivity analysis (audited)
The recognition and measurement of ECL is
complex and requires signi\ufb01cant judgement
and estimation, especially during times of
economic volatility and uncertainty. This
includes the formulation and incorporation of
multiple forward-looking economic conditions
into ECL to meet the measurement objectives
of IFRS 9. The ECL provision is sensitive to the
model inputs and economic assumptions used
in the estimation.
Simulations were conducted to assess the
impact of various economic scenarios,
including base case, upside, downside and
extreme downside scenarios. The potential
ECL impacts re\ufb02ected the simulated impact as
at 31 December 2025. In the simulations,
NatWest Group assumed that the economic
macro variables associated with each
scenario would replace the existing base case
economic assumptions, giving them a 100%
probability weighting and therefore serving as
a single economic scenario. These scenarios
were applied to all modelled portfolios in the
table, with the simulation affecting both PDs
and LGDs. Post model adjustments included in
the ECL estimates were adjusted in line with
the modelled ECL movements. However,
adjustments that were judgemental in nature,
such as those for deferred model calibrations
and economic uncertainty, were not
automatically recalculated. Instead, they will
be re-evaluated by management through ECL
governance for any new economic scenario
outlook.
As expected, the scenarios created varying
impacts on ECL by portfolio, and these
impacts were deemed reasonable. The
simulations assumed that existing modelled
relationships between key economic variables
and drivers would hold. However, in practice,
other factors such as potential changes in
customer behaviour and policy changes could
also impact the wider availability of credit.
The focus of the simulations was on ECL
provisioning requirements for performing
exposures in Stage 1 and Stage 2. The
simulations were run on a stand-alone basis
and were independent of each other. Scenario
impacts on SICR were considered when
evaluating the ECL movements of Stage 1
and Stage 2. In all scenarios, the total
exposure remained the same, but exposure
by stage varied.
Stage 3 provisions are not subject to the same
level of measurement uncertainty, as default is
an observed event as at the balance sheet
date and defaulted LGD is typically more
impacted by borrower speci\ufb01c factors rather
than economics. Therefore, Stage 3 provisions
were not considered in this analysis. NatWest
Group\u2019s core criterion for identifying a SICR is
based on PD deterioration. Under the
simulations, changes in PDs resulted in
exposures moving between Stage 1 and
Stage 2, contributing to the ECL impact.
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 modelled loans (\u00a3m)
Retail Banking - mortgages
181,869
182,357
183,665
181,119
176,988
Retail Banking - unsecured
12,761
12,858
13,232
12,601
11,683
Non-Personal - property
31,809
31,924
31,995
31,764
23,027
Non-Personal - non-property
141,924
142,660
142,972
141,841
118,828
368,363
369,799
371,864
367,325
330,526
Stage 1 modelled ECL (\u00a3m)
Retail Banking - mortgages
42
42
41
42
43
Retail Banking - unsecured
293
300
288
291
278
Non-Personal - property
66
46
38
71
148
Non-Personal - non-property
189
156
144
202
353
590
544
511
606
822
Stage 1 coverage (%)
Retail Banking - mortgages
0.02%
0.02%
0.02%
0.02%
0.02%
Retail Banking - unsecured
2.30%
2.33%
2.18%
2.31%
2.38%
Non-Personal - property
0.21%
0.14%
0.12%
0.22%
0.64%
Non-Personal - non-property
0.13%
0.11%
0.10%
0.14%
0.30%
0.16%
0.15%
0.14%
0.16%
0.25%
Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
15,821
15,333
14,025
16,571
20,702
Retail Banking - unsecured
3,621
3,524
3,150
3,781
4,699
Non-Personal - property
3,072
2,957
2,886
3,117
11,854
Non-Personal - non-property
15,721
14,985
14,673
15,804
38,817
38,235
36,799
34,734
39,273
76,072
Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
36
33
29
38
55
Retail Banking - unsecured
388
378
326
408
516
Non-Personal - property
55
47
42
59
351
Non-Personal - non-property
305
263
242
317
880
784
721
639
822
1,802
Stage 2 coverage (%)
Retail Banking - mortgages
0.23%
0.22%
0.21%
0.23%
0.27%
Retail Banking - unsecured
10.72%
10.73%
10.35%
10.79%
10.98%
Non-Personal - property
1.79%
1.59%
1.46%
1.89%
2.96%
Non-Personal - non-property
1.94%
1.76%
1.65%
2.01%
2.27%
2.05%
1.96%
1.84%
2.09%
2.37%
\n
For the notes to this table refer to the following page.
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 and Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
197,690
197,690
197,690
197,690
197,690
Retail Banking - unsecured
16,382
16,382
16,382
16,382
16,382
Non-Personal - property
34,881
34,881
34,881
34,881
34,881
Non-Personal - non-property
157,645
157,645
157,645
157,645
157,645
406,598
406,598
406,598
406,598
406,598
Stage 1 and Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
78
75
70
80
98
Retail Banking - unsecured
681
678
614
699
794
Non-Personal - property
121
93
80
130
499
Non-Personal - non-property
494
419
386
519
1,233
1,374
1,265
1,150
1,428
2,624
Stage 1 and Stage 2 coverage (%)
Retail Banking - mortgages
0.04%
0.04%
0.04%
0.04%
0.05%
Retail Banking - unsecured
4.16%
4.14%
3.75%
4.27%
4.85%
Non-Personal - property
0.35%
0.27%
0.23%
0.37%
1.43%
Non-Personal - non-property
0.31%
0.27%
0.24%
0.33%
0.78%
0.34%
0.31%
0.28%
0.35%
0.65%
Reconciliation to Stage 1 and Stage 2
ECL (\u00a3m)
ECL on modelled exposures
1,374
1,265
1,150
1,428
2,624
ECL on non-modelled exposures
36
36
36
36
36
Total Stage 1 and Stage 2 ECL (\u00a3m)
1,410
1,301
1,186
1,464
2,660
Variance to actual total Stage 1 and
Stage 2 ECL (\u00a3m)
-
(109)
(224)
54
1,250
Reconciliation to Stage 1 and Stage 2
flow exposures (\u00a3m)
Modelled loans
406,598
406,598
406,598
406,598
406,598
Non-modelled loans
19,264
19,264
19,264
19,264
19,264
Other asset classes
160,130
160,130
160,130
160,130
160,130
\n
(1)
Reflects ECL for all modelled exposure in scope for IFRS 9. The analysis
\n
excludes non-modelled portfolios and exposure relating to bonds and cash.
\n
(2)
All simulations are run on a stand-alone basis and are independent of each
\n
other, with the potential ECL impact reflecting the simulated impact as at 31
\n
December 2025. The simulations change the composition of Stage 1 and
\n
Stage 2 exposure but total exposure was unchanged under each scenario as
\n
the loan population was static.
\n
(3)
Refer to the Economic drivers section for details of economic scenarios.
\n
(4)
Refer to the NatWest Group 2024 Annual Report and Accounts for 2024
\n
comparatives.
\n
\u2022
If the economics were as negative as observed in the extreme downside (i.e. 100% probability weighting), total Stage 1 and Stage 2 ECL was simulated to increase by \u00a31.3 billion (approximately
\n
90%). In this scenario, Stage 2 exposure increased signi\ufb01cantly and was the key driver of the simulated ECL rise. The movement in Stage 2 balances in the other simulations was less signi\ufb01cant.
\n
\u2022
In the Non-Personal portfolio, there was a signi\ufb01cant increase in ECL under the extreme downside scenario on non-property portfolios, driven by a signi\ufb01cant deterioration in the stock index.
\n
\u2022
Given the continued economic uncertainty, NatWest Group utilised a framework of quantitative and qualitative measures to support the levels of ECL coverage. This included economic data, credit
\n
performance insights and problem debt trends. This was particularly important for consideration of post model adjustments.
ECL post model adjustments (audited)
The table below shows ECL post model adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0
Private Banking
\u00a0 \u00a0
\u00a0
Retail Banking
& Wealth
Commercial
\u00a0
\u00a0
Mortgages
Other
Management
& Institutional
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Deferred model calibrations
-
-
1
14
15
Economic uncertainty
44
42
11
149
246
Other adjustments
-
19
-
16
35
Total
44
61
12
179
296
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
33
38
4
73
148
- Stage 2
11
20
8
106
145
- Stage 3
-
3
-
-
3
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Deferred model calibrations
-
-
1
18
19
Economic uncertainty
90
22
8
179
299
Other adjustments
-
-
-
18
18
Total
90
22
9
215
336
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
58
9
5
94
166
- Stage 2
26
13
4
119
162
- Stage 3
6
-
-
2
8
\n
Post model adjustments reduced since 31 December 2024, re\ufb02ecting the removal of COVID-19 post model adjustments combined with updates to parameters.
\u2022
Retail Banking
\u2013 As
at
31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a386 million (2024 \u2013 \u00a3112 million).
This reduction was driven by a revision to the
cost of
living
post model adjustment, standing at \u00a386 million (2024 \u2013 \u00a3105 million), and was the sole remaining
economic uncertainty
post model adjustment.
This change was based on a review
of back-
testing. Despite ongoing economic and geopolitical uncertainty, the Retail Banking portfolios
demonstrated
resilience, supported by a robust risk appetite. The
cost of living
post model adjustment
continued to address the risk in segments of the Retail Banking portfolio that were more susceptible to affordability challenges. It focused on key affordability factors, including over-indebted
borrowers, poor credit card affordability status and lower income customers in fuel poverty.
\u2022
A \u00a319 million post model adjustment was recognised as a judgemental measure while additional loss data is accumulated on the recently migrated Sainsbury\u2019s Bank lending portfolio.
\u2022
Commercial & Institutional
\u2013 As at 31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a3149 million (2024 \u2013 \u00a3179 million). The reduction was driven by the
retirement of COVID-19 post model adjustments which were associated with government scheme lending (2024 \u2013 \u00a329 million). The continued economic uncertainty post model adjustments
re\ufb02ected downgrades to risk pro\ufb01le that were applied to the sectors that were considered most at risk from the current economic and geopolitical headwinds.
\u2022
The remaining \u00a330 million (2024 \u2013 \u00a336 million) of post model adjustments were for deferred model calibrations relating to re\ufb01nance risk and to mitigate the effect of operational timing delays in the
identi\ufb01cation and \ufb02agging of a signi\ufb01cant increase in credit risk.
Credit risk - Banking activities
Introduction
This section details the credit risk pro\ufb01le of NatWest Group\u2019s banking activities. Refer to Accounting policy 2.3 and Note 14 to the consolidated \ufb01nancial statements for policies and critical judgements
relating to impairment loss determination.
Financial instruments within the scope of the IFRS 9 ECL framework (audited)
Refer to Note 9 to the consolidated \ufb01nancial statements for balance sheet analysis of \ufb01nancial assets that are classi\ufb01ed as amortised cost or fair value through other comprehensive income (FVOCI),
the starting point for IFRS 9 ECL framework assessment.
\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
31 December 2025
31 December 2024
\u00a0
Gross
ECL
Net
Gross
ECL
Net
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Balance sheet total gross amortised cost and FVOCI
593.9
\u00a0 \u00a0
567.2
\u00a0 \u00a0
In scope of IFRS 9 ECL framework
592.4
\u00a0 \u00a0
564.4
\u00a0 \u00a0
% in scope
100%
\u00a0 \u00a0
100%
\u00a0 \u00a0
Loans to customers - in scope - amortised cost
422.9
3.6
419.3
404.2
3.4
400.8
Loans to customers - in scope - FVOCI
0.2
-
0.2
-
-
-
Loans to banks - in scope - amortised cost
6.8
-
6.8
6.0
-
6.0
Total loans - in scope
429.9
3.6
426.3
410.2
3.4
406.8
Stage 1
386.6
0.6
386.0
363.8
0.6
363.2
Stage 2
38.6
0.8
37.8
40.5
0.8
39.7
Stage 3
4.7
2.2
2.5
5.9
2.0
3.9
Other financial assets - in scope - amortised cost
120.7
-
120.7
116.4
-
116.4
Other financial assets - in scope - FVOCI
41.8
-
41.8
37.8
-
37.8
Total other financial assets - in scope
162.5
-
162.5
154.2
-
154.2
Stage 1
161.5
-
161.5
153.4
-
153.4
Stage 2
1.0
-
1.0
0.8
-
0.8
Out of scope of IFRS 9 ECL framework
1.5
na
1.5
2.8
na
2.8
Loans to customers - out of scope - amortised cost
(0.6)
na
(0.6)
(0.5)
na
(0.5)
Loans to banks - out of scope - amortised cost
0.2
na
0.2
0.1
na
0.1
Other financial assets - out of scope - amortised cost
1.7
na
1.7
3.2
na
3.2
Other financial assets - out of scope - FVOCI
0.2
na
0.2
-
na
-
na = not applicable
The assets outside the scope of IFRS 9 ECL framework were as follows:
\u2022
Settlement balances, items in the course of collection, cash balances and other non-credit risk assets of \u00a31.8 billion (2024 \u2013 \u00a33.3 billion). These were assessed as having no ECL unless there was
evidence that they were defaulted.
\u2022
Equity shares of \u00a30.1 billion (2024 \u2013 \u00a30.2 billion) as not within the IFRS 9 ECL framework by de\ufb01nition.
\u2022
Fair value adjustments on loans hedged by interest rate swaps, where the underlying loan was within the IFRS 9 ECL scope of \u00a3(0.3) billion (2024 \u2013 \u00a3(0.5) billion).
Contingent liabilities and commitments
Total
contingent liabilities (including \ufb01nancial guarantees) and commitments within IFRS 9 ECL scope of \u00a3147.2 billion (2024 \u2013 \u00a3140.0 billion) comprised Stage 1 \u00a3135.8 billion (2024 \u2013 \u00a3129.8 billion);
Stage 2 \u00a310.8 billion (2024 \u2013 \u00a39.4 billion); and Stage 3 \u00a30.6 billion (2024 \u2013 \u00a30.8 billion). The ECL relating to off-balance sheet exposures was \u00a30.1 billion (2024 \u2013 \u00a30.1 billion). The total ECL in the
remainder of the Credit risk section of \u00a33.6 billion (2024 \u2013 \u00a33.4 billion) included ECL for both on and off-balance sheet exposures.
Segment analysis \u2013 portfolio summary (audited)
\n
The table below shows gross loans and ECL, by segment and stage, within the scope of the IFRS 9 ECL framework.
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
196,325
17,552
138,769
34,005
386,651
196,325
14,140
2,355
84
3,412
136,414
33,921
Stage 2
19,113
1,115
18,289
65
38,582
19,113
337
32
18
778
18,257
47
Stage 3
2,231
348
2,102
2
4,683
2,231
260
44
2
88
2,058
-
Of which: individual
-
276
1,180
-
1,456
-
188
5
-
88
1,175
-
Of which: collective
2,231
72
922
2
3,227
2,231
72
39
2
-
883
-
Total
217,669
19,015
159,160
34,072
429,916
217,669
14,737
2,431
104
4,278
156,729
33,968
ECL provisions
(3)
Stage 1
335
13
256
10
614
335
3
1
3
10
255
7
Stage 2
424
13
357
2
796
424
1
-
1
12
357
1
Stage 3
1,075
50
1,048
2
2,175
1,075
24
11
2
26
1,037
-
Of which: individual
-
50
548
-
598
-
24
5
-
26
543
-
Of which: collective
1,075
-
500
2
1,577
1,075
-
6
2
-
494
-
Total
1,834
76
1,661
14
3,585
1,834
28
12
6
48
1,649
8
ECL provisions coverage
(4)
Stage 1 (%)
0.17
0.07
0.18
0.03
0.16
0.17
0.02
0.04
3.57
0.29
0.19
0.02
Stage 2 (%)
2.22
1.17
1.95
3.08
2.06
2.22
0.30
-
5.56
1.54
1.96
2.13
Stage 3 (%)
48.18
14.37
49.86
100.00
46.44
48.18
9.23
25.00
100.00
29.55
50.39
-
Total
0.84
0.40
1.04
0.04
0.83
0.84
0.19
0.49
5.77
1.12
1.05
0.02
Impairment (releases)/losses
ECL (release)/charge
(5)
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Stage 1
(67)
(9)
(124)
(4)
(204)
(67)
(1)
(1)
4
(8)
(123)
(8)
Stage 2
295
9
116
1
421
295
2
1
1
7
115
-
Stage 3
209
10
233
2
454
209
4
1
2
6
232
-
Of which: individual
-
10
178
-
188
-
4
-
-
6
178
-
Of which: collective
209
-
55
2
266
209
-
1
2
-
54
-
Total
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Amounts written-off
373
1
205
-
579
373
1
6
-
-
199
-
Of which: individual
-
1
136
-
137
-
1
-
-
-
136
-
Of which: collective
373
-
69
-
442
373
-
6
-
-
63
-
\n
For the notes to this table refer to the following page.
Segment analysis \u2013 portfolio summary (audited)
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
182,366
17,155
128,988
35,312
363,821
182,366
13,726
2,226
-
3,429
126,762
35,312
Stage 2
24,242
844
15,339
49
40,474
24,242
352
42
-
492
15,297
49
Stage 3
3,268
322
2,340
-
5,930
3,268
251
52
-
71
2,288
-
Of which: individual
-
233
1,052
-
1,285
-
162
5
-
71
1,047
-
Of which: collective
3,268
89
1,288
-
4,645
3,268
89
47
-
-
1,241
-
Total
209,876
18,321
146,667
35,361
410,225
209,876
14,329
2,320
-
3,992
144,347
35,361
ECL provisions
(3)
Stage 1
279
16
289
14
598
279
2
3
-
14
286
14
Stage 2
428
12
346
1
787
428
1
-
-
11
346
1
Stage 3
1,063
36
941
-
2,040
1,063
21
15
-
15
926
-
Of which: individual
-
36
415
-
451
-
21
7
-
15
408
-
Of which: collective
1,063
-
526
-
1,589
1,063
-
8
-
-
518
-
Total
1,770
64
1,576
15
3,425
1,770
24
18
-
40
1,558
15
ECL provisions coverage
(4)
Stage 1 (%)
0.15
0.09
0.22
0.04
0.16
0.15
0.01
0.13
-
0.41
0.23
0.04
Stage 2 (%)
1.77
1.42
2.26
2.04
1.94
1.77
0.28
-
-
2.24
2.26
2.04
Stage 3 (%)
32.53
11.18
40.21
-
34.40
32.53
8.37
28.85
-
21.13
40.47
-
Total
0.84
0.35
1.07
0.04
0.83
0.84
0.17
0.78
-
1.00
1.08
0.04
Impairment (releases)/losses
ECL (release)/charge
(5)
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Stage 1
(208)
(11)
(205)
(14)
(438)
(208)
(2)
(1)
-
(9)
(204)
(14)
Stage 2
278
(1)
79
4
360
278
2
1
-
(3)
78
4
Stage 3
212
1
224
-
437
212
1
1
-
-
223
-
Of which: individual
-
1
191
-
192
-
1
(1)
-
-
192
-
Of which: collective
212
-
33
-
245
212
-
2
-
-
31
-
Total
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Amounts written-off
430
1
223
-
654
430
1
2
-
-
221
-
Of which: individual
-
1
143
-
144
-
1
-
-
-
143
-
Of which: collective
430
-
80
-
510
430
-
2
-
-
78
-
\n
(1)
The table shows gross loans only and excludes amounts that were outside the scope of the ECL framework. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 \u2013 \u00a34 million) related to assets classified as FVOCI and \u00a30.1 billion (2024 \u2013 \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions, including ECL for other non-loan assets and unutilised exposure, divided by loans \u2013 amortised cost and FVOCI. Some segments with a high proportion of debt securities or unutilised exposure may result in a not meaningful (nm) coverage
\n
ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets classified as FVOCI and includes a \u00a33 million charge (2024 - \u00a35 million release) related to contingent liabilities.
Segmental loans and impairment metrics (audited)
\n
\u2022
Retail Banking
\u2013 Balance sheet growth during the year was mainly due to mortgages.
\n
Within the Unsecured portfolios, alongside organic growth in the credit cards and personal
\n
loans portfolios, the acquisition of the Sainsbury\u2019s Bank portfolios further contributed to the
\n
balance sheet growth. Asset quality was maintained during the year, re\ufb02ecting ongoing
\n
customer resilience and robust risk appetite. Alongside steady portfolio performance, good
\n
book and total ECL coverage for Retail Banking remained broadly consistent with 31
\n
December 2024. Underlying ECL coverage increased due to growth in unsecured lending,
\n
including the acquisition of the Sainsbury\u2019s Bank portfolio earlier in 2025, but this was offset
\n
by balance sheet management actions, including a mortgage securitisation transaction and
\n
unsecured debt sales. The proportion of Stage 3 loans declined over the year, mainly as a
\n
result of the balance sheet management actions described above, notably the mortgage
\n
securitisation, which reduced Stage 3 loans by \u00a30.8 billion. Furthermore, there was an
\n
enhancement to the mortgage de\ufb01nition of default systems and process, resulting in
\n
approximately \u00a30.4 billion of loans migrating from Stage 3 back to the good book. While
\n
default performance was broadly stable overall, unsecured \ufb02ows into Stage 3 increased
\n
year-on-year, driven by strategic growth and seasoning of credit card balances since 2022.
\n
\u2022
Commercial & Institutional
\u2013 Balance sheet growth in the year was primarily in corporates
\n
and institutions and was re\ufb02ected in Stage 1. Despite the increase in performing book
\n
exposures, performing book provisions decreased, driven by reductions in post model
\n
adjustments for economic uncertainty. Total provision balance growth primarily re\ufb02ected
\n
the impact of a small number of individual charges in Stage 3. Despite the increase in
\n
Stage 3 ECL, loan balances \ufb02owing into Stage 3 were lower than the prior year. The
\n
combination of increased Stage 3 charges combined with lower in\ufb02ows into Stage 3 drove
\n
the increase in Stage 3 ECL provisions coverage. Total book coverage remained broadly
\n
similar year-on-year, as the increase in Stage 3 ECL provisions coverage was more than
\n
offset by reductions in performing book coverage. The full year 2025 total charge was
\n
higher compared to 2024, primarily as the good book release in 2025 was notably lower
\n
than the release in 2024. The lower release in 2025 re\ufb02ected lower reductions in post
\n
model adjustments compared to 2024.
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows \ufb01nancial assets and off-balance sheet exposures gross of ECL and related ECL provisions, impairment and past due by sector, asset quality and geographical region.
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- UK
215,220
8,311
11,401
234,932
101,441
45,700
1,477
148,618
383,550
- Other Europe
9
-
-
9
7,010
14,059
351
21,420
21,429
- RoW
-
-
-
-
9,778
14,697
462
24,937
24,937
Loans by stage
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Stage 1
197,939
5,988
8,977
212,904
97,779
73,959
2,009
173,747
386,651
- Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Stage 3
1,339
242
956
2,537
1,990
141
15
2,146
4,683
- Of which: individual
167
1
25
193
1,112
136
15
1,263
1,456
- Of which: collective
1,172
241
931
2,344
878
5
-
883
3,227
Loans - past due analysis
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Not past due
212,492
7,993
10,388
230,873
114,895
74,257
2,275
191,427
422,300
- Past due 1-30 days
1,510
71
92
1,673
2,261
137
-
2,398
4,071
- Past due 31-90 days
469
86
130
685
274
8
-
282
967
- Past due 91-180 days
275
62
104
441
110
6
-
116
557
- Past due >180 days
483
99
687
1,269
689
48
15
752
2,021
Loans - Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Not past due
14,521
1,979
1,335
17,835
17,605
343
266
18,214
36,049
- Past due 1-30 days
1,138
41
48
1,227
610
5
-
615
1,842
- Past due 31-90 days
292
61
85
438
245
8
-
253
691
Weighted average life
(2)
- ECL measurement (years)
9
4
6
5
7
4
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.46
3.68
5.05
0.77
1.18
0.14
5.40
0.83
0.80
- Basel (%)
0.62
3.91
3.52
0.85
1.04
0.15
5.40
0.75
0.80
ECL provisions by geography
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- UK
270
520
1,088
1,878
1,367
103
5
1,475
3,353
- Other Europe
2
-
-
2
104
10
1
115
117
- RoW
-
-
-
-
61
42
12
115
115
\n
For the notes to this table refer to page 207.
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages
(1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- Stage 1
45
125
172
342
228
37
7
272
614
- Stage 2
36
205
185
426
360
5
5
370
796
- Stage 3
191
190
731
1,112
944
113
6
1,063
2,175
- Of which: individual
16
1
12
29
453
110
6
569
598
- Of which: collective
175
189
719
1,083
491
3
-
494
1,577
ECL provisions coverage (%)
0.13
6.26
9.54
0.80
1.30
0.21
0.79
0.87
0.83
- Stage 1 (%)
0.02
2.09
1.92
0.16
0.23
0.05
0.35
0.16
0.16
- Stage 2 (%)
0.23
9.85
12.60
2.18
1.95
1.40
1.88
1.94
2.06
- Stage 3 (%)
14.26
78.51
76.46
43.83
47.44
80.14
40.00
49.53
46.44
ECL (release)/charge
(142)
263
329
450
168
56
(3)
221
671
- UK
(144)
263
329
448
148
60
(6)
202
650
- Other Europe
2
-
-
2
18
1
-
19
21
- RoW
-
-
-
-
2
(5)
3
-
-
Amounts written-off
92
118
170
380
199
-
-
199
579
Loans by residual maturity
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- \u22641 year
2,764
1,856
2,736
7,356
33,768
52,130
1,765
87,663
95,019
- >1 and \u22645 year
8,332
6,452
6,898
21,682
51,723
18,262
77
70,062
91,744
- > 5 and \u2264 15 year
42,759
3
1,772
44,534
24,136
4,016
290
28,442
72,976
- > 15 year
161,374
-
(5)
161,369
8,602
48
158
8,808
170,177
Other financial assets by asset quality
(3)
-
-
-
-
4,513
28,490
129,532
162,535
162,535
- AQ1-AQ4
-
-
-
-
4,506
28,301
129,532
162,339
162,339
- AQ5-AQ8
-
-
-
-
7
189
-
196
196
Off-balance sheet
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- Loan commitments
14,799
22,696
7,514
45,009
75,723
21,555
501
97,779
142,788
- Contingent liabilities
-
-
36
36
2,881
1,476
-
4,357
4,393
Off-balance sheet by asset quality
(3)
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- AQ1-AQ4
13,926
415
6,140
20,481
50,709
21,030
114
71,853
92,334
- AQ5-AQ8
859
22,205
1,283
24,347
27,525
1,924
12
29,461
53,808
- AQ9
4
11
12
27
61
-
375
436
463
- AQ10
10
65
115
190
309
77
-
386
576
\n
For the notes to this table refer to page 207.
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- UK
209,846
6,930
9,749
226,525
97,409
43,412
562
141,383
367,908
- Other Europe
-
-
-
-
6,311
14,747
766
21,824
21,824
- RoW
-
-
-
-
8,014
12,162
317
20,493
20,493
Loans by stage
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Stage 1
186,250
4,801
7,267
198,318
94,991
69,021
1,491
165,503
363,821
- Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Stage 3
2,535
176
860
3,571
2,279
59
21
2,359
5,930
- Of which: individual
141
-
26
167
1,046
51
21
1,118
1,285
- Of which: collective
2,394
176
834
3,404
1,233
8
-
1,241
4,645
Loans - past due analysis
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Not past due
206,739
6,721
8,865
222,325
107,855
70,055
1,627
179,537
401,862
- Past due 1-30 days
1,404
50
70
1,524
2,530
211
-
2,741
4,265
- Past due 31-90 days
580
51
99
730
398
2
18
418
1,148
- Past due 91-180 days
408
41
96
545
139
49
-
188
733
- Past due >180 days
715
67
619
1,401
812
4
-
816
2,217
Loans - Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Not past due
19,939
1,889
1,521
23,349
13,485
1,228
133
14,846
38,195
- Past due 1-30 days
853
31
37
921
640
11
-
651
1,572
- Past due 31-90 days
269
33
64
366
339
2
-
341
707
Weighted average life
(2)
- ECL measurement (years)
8
4
6
6
6
2
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.51
3.23
4.59
0.76
1.24
0.16
5.51
0.86
0.80
- Basel (%)
0.68
3.65
3.18
0.87
1.11
0.15
4.16
0.76
0.82
ECL provisions by geography
462
381
969
1,812
1,504
90
19
1,613
3,425
- UK
462
381
969
1,812
1,335
37
12
1,384
3,196
- Other Europe
-
-
-
-
109
9
-
118
118
- RoW
-
-
-
-
60
44
7
111
111
\n
For the notes to this table refer to the following page.
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
462
381
969
1,812
1,504
90
19
1,613
3,425
- Stage 1
77
77
130
284
264
38
12
314
598
- Stage 2
60
186
183
429
344
12
2
358
787
- Stage 3
325
118
656
1,099
896
40
5
941
2,040
- Of which: individual
11
-
17
28
382
36
5
423
451
- Of which: collective
314
118
639
1,071
514
4
-
518
1,589
ECL provisions coverage (%)
0.22
5.50
9.94
0.80
1.35
0.13
1.16
0.88
0.83
- Stage 1 (%)
0.04
1.60
1.79
0.14
0.28
0.06
0.80
0.19
0.16
- Stage 2 (%)
0.28
9.52
11.28
1.74
2.38
0.97
1.50
2.26
1.94
- Stage 3 (%)
12.82
67.05
76.28
30.78
39.32
67.80
23.81
39.89
34.40
ECL (release)/charge
8
115
161
284
55
19
1
75
359
- UK
8
115
161
284
43
1
-
44
328
- Other Europe
-
-
-
-
17
(7)
-
10
10
- RoW
-
-
-
-
(5)
25
1
21
21
Amounts written-off
18
102
313
433
221
-
-
221
654
Loans by residual maturity
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- \u22641 year
3,367
3,903
3,186
10,456
34,929
54,971
822
90,722
101,178
- >1 and \u22645 year
11,651
3,027
5,551
20,229
48,075
10,967
488
59,530
79,759
- > 5 and \u2264 15 year
45,454
-
1,006
46,460
20,623
4,270
298
25,191
71,651
- > 15 year
149,374
-
6
149,380
8,107
113
37
8,257
157,637
Other financial assets by asset quality
(3)
-
-
-
-
3,644
31,102
119,502
154,248
154,248
- AQ1-AQ4
-
-
-
-
3,639
30,743
119,502
153,884
153,884
- AQ5-AQ8
-
-
-
-
5
359
-
364
364
Off-balance sheet
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- Loan commitments
13,806
20,135
7,906
41,847
72,940
20,341
239
93,520
135,367
- Contingent liabilities
-
-
41
41
3,024
1,584
-
4,608
4,649
Off-balance sheet by asset quality
(3)
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- AQ1-AQ4
12,951
510
6,568
20,029
47,896
20,063
155
68,114
88,143
- AQ5-AQ8
839
19,276
1,336
21,451
27,657
1,813
21
29,491
50,942
- AQ9
1
12
17
30
19
-
63
82
112
- AQ10
15
337
26
378
392
49
-
441
819
\n
(1)
Includes a portion of Private Banking & Wealth Management lending secured against residential real estate, in line with ECL calculation methodology. Private Banking & Wealth Management and RBS International mortgages are reported in the UK, reflecting the country of lending origination and
\n
includes crown dependencies.
\n
(2)
Not within the scope of the Independent auditors\u2019 report.
\n
(3)
AQ bandings are based on Basel PDs and mapping is as follows:
\n\n \n
Internal asset quality band
Probability of default range
Indicative S&P rating
Internal asset quality band
Probability of default range
Indicative S&P rating
AQ1
0% - 0.034%
AAA to AA
AQ6
1.076% - 2.153%
BB- to B+
AQ2
0.034% - 0.048%
AA to AA-
AQ7
2.153% - 6.089%
B+ to B
AQ3
0.048% - 0.095%
A+ to A
AQ8
6.089% - 17.222%
B- to CCC+
AQ4
0.095% - 0.381%
BBB+ to BBB-
AQ9
17.222% - 100%
CCC to C
AQ5
0.381% - 1.076%
BB+ to BB
AQ10
100%
D
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows ECL by stage, for the Personal portfolio and Non-Personal portfolio, including the three largest borrowing sector clusters included in corporate and other.
\n\n \n
Loans - amortised cost and FVOCI
Off-balance sheet
ECL provisions
Stage 1
Stage 2
Stage 3
Total
Loan commitments
Contingent liabilities
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
212,904
19,500
2,537
234,941
45,009
36
342
426
1,112
1,880
Mortgages
(1)
197,939
15,951
1,339
215,229
14,799
-
45
36
191
272
Credit cards
5,988
2,081
242
8,311
22,696
-
125
205
190
520
Other personal
8,977
1,468
956
11,401
7,514
36
172
185
731
1,088
Non-Personal
173,747
19,082
2,146
194,975
97,779
4,357
272
370
1,063
1,705
Financial institutions
(2)
73,959
356
141
74,456
21,555
1,476
37
5
113
155
Sovereign
2,009
266
15
2,290
501
-
7
5
6
18
Corporate and other
97,779
18,460
1,990
118,229
75,723
2,881
228
360
944
1,532
Of which:
Commercial real estate
17,838
1,272
294
19,404
6,646
162
55
22
120
197
Mobility and logistics
13,021
4,312
81
17,414
10,194
520
24
45
40
109
Consumer industries
12,875
2,912
389
16,176
11,149
496
33
68
199
300
Total
386,651
38,582
4,683
429,916
142,788
4,393
614
796
2,175
3,585
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
198,318
24,636
3,571
226,525
41,847
41
284
429
1,099
1,812
Mortgages
(1)
186,250
21,061
2,535
209,846
13,806
-
77
60
325
462
Credit cards
4,801
1,953
176
6,930
20,135
-
77
186
118
381
Other personal
7,267
1,622
860
9,749
7,906
41
130
183
656
969
Non-Personal
165,503
15,838
2,359
183,700
93,520
4,608
314
358
941
1,613
Financial institutions
(2)
69,021
1,241
59
70,321
20,341
1,584
38
12
40
90
Sovereign
1,491
133
21
1,645
239
-
12
2
5
19
Corporate and other
94,991
14,464
2,279
111,734
72,940
3,024
264
344
896
1,504
Of which:
Commercial real estate
16,191
1,517
433
18,141
6,661
143
70
30
146
246
Mobility and logistics
13,363
2,384
148
15,895
9,367
595
26
35
67
128
Consumer industries
13,312
3,015
444
16,771
10,706
595
45
90
188
323
Total
363,821
40,474
5,930
410,225
135,367
4,649
598
787
2,040
3,425
\n
(1)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential mortgages portfolio had Energy Performance Certificate (EPC) data available (2024 \u2013 \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C (2024 \u2013 46.3%).
\n
(2)
Includes transactions, such as securitisations, where the underlying risk may be in other sectors.
Non-Personal forbearance (audited)
\n
The table below shows Non-Personal forbearance, Heightened Monitoring and Risk of Credit Loss by sector. The table shows current exposure but re\ufb02ects risk transfers where there is a guarantee by
\n
another customer.
\n\n \n
Corporate and other
Financial institutions
Sovereign
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Forbearance (flow)
3,495
43
12
3,550
Forbearance (stock)
4,167
122
12
4,301
Heightened Monitoring and Risk of Credit Loss
6,115
103
2
6,220
2024
Forbearance (flow)
3,359
119
18
3,496
Forbearance (stock)
4,556
106
18
4,680
Heightened Monitoring and Risk of Credit Loss
5,931
150
1
6,082
\n
Sector analysis \u2013 portfolio summary (audited)
\n
\u2022
Loans by geography and sector
\u2013 In line with NatWest Group\u2019s strategic focus, exposures continued to be mainly in the UK.
\n
\u2022
Loans by stage
\u2013 Stage 3 balances reduced overall, with a small reduction in Non-Personal due to write-offs and lower in\ufb02ows, and a larger reduction in Personal mortgages following the
\n
securitisation transaction that removed \u00a30.8 billion of Stage 3 assets, alongside a default de\ufb01nition systems and process enhancement that moved loans back to the good book. Stage 1 balances
\n
increased across the Personal portfolios, driven by growth in mortgages and unsecured lending, including the Sainsbury\u2019s Bank portfolio acquisition. Stage 2 balances were broadly unchanged from
\n
the end of 2024, with reductions in Personal mortgages, linked to PD model enhancements and stable portfolio trends offset by increases in Non-Personal, largely driven by post model adjustment
\n
downgrades to sectors deemed most at risk of economic uncertainty.
\n
\u2022
Loans \u2013 Past due analysis
\u2013 Within the Personal portfolio, arrears balances overall decreased during 2025 mainly driven by the balance sheet management actions within the mortgage portfolio
\n
described previously. For the unsecured portfolios, arrears balances increased due to book growth and portfolio maturation. In Non-Personal, arrears balances reduced in line with Stage 3 balance
\n
reduction. The vast majority of Stage 2 balances remained up to date, as Stage 2 is normally captured through other forward-looking Stage 2 triggers.
\n
\u2022
Weighted average 12 months PDs
\u2013 Both IFRS 9 and Basel PDs remained broadly stable during the year overall, noting the reduction in Personal mortgages due to PD model enhancements and
\n
an increase in unsecured PDs driven by strategic growth and seasoning of credit card balances since 2022. Non-Personal PDs were broadly stable in the year. The higher PD in sovereigns
\n
re\ufb02ected a single entity where lending is fully guaranteed.
\n
\u2022
ECL provisions by stage and ECL provisions coverage
\u2013 Overall provisions increased from 31 December 2024, following an increase in good book ECL in the Personal portfolios, driven by the
\n
portfolio acquisition of Sainsbury\u2019s Bank and organic growth in unsecured lending, and a small number of signi\ufb01cant individual Non-Personal Stage 3 charges. Stage 3 ECL growth was partly offset
\n
by the transfer of mortgage assets to a securitisation special purpose vehicle. Provisions coverage remained consistent with 31 December 2024.
\n
\u2022
ECL charge
\u2013 The 2025 impairment charge, primarily re\ufb02ected a small number of
signi\ufb01cant
individual charges in the Non-Personal portfolio alongside the initial ECL cost from the portfolio
\n
acquisition from Sainsbury\u2019s Bank within Personal. This was partially offset by post model adjustment releases in the good book and one-off releases, notably on the de\ufb01nition of default systems
\n
and process enhancement on Personal mortgages and a mortgage securitisation. The increased charge in Non-Personal portfolio primarily re\ufb02ected lower levels of reduction in performing book
\n
post model adjustments compared to 2024.
\n
\u2022
Loans by residual maturity
\u2013 The maturity pro\ufb01le of the portfolios remained consistent with prior periods. In mortgages, as expected, the vast majority of exposures were greater than \ufb01ve years. In
\n
unsecured lending, cards and other, exposures were concentrated in less than \ufb01ve years. In Non-Personal portfolios the maturity pro\ufb01le will vary by product and sectors, but is typically less than
\n
\ufb01ve years for most exposures.
\n
\u2022
Other \ufb01nancial assets by asset quality
\u2013
These assets were cash and debt securities, and generally of high credit quality as re\ufb02ected in the AQ banding.
\n
\u2022
Off-balance sheet exposures by asset quality
\u2013 The AQ band split of off-balance sheet exposures broadly mirrored the drawn loans portfolio for non-defaulted exposures. In the Non-Personal
\n
portfolio, off-balance sheet exposures increased year-on-year, re\ufb02ecting an increase in unutilised exposure in corporates and \ufb01nancial institutions. The increase was primarily in the AQ1 to AQ4
\n
band, indicating high credit quality.
\n
\u2022
Non-Personal problem debt
\u2013 Exposures in the Wholesale Problem Debt Management framework marginally increased during 2025 due to an in\ufb02ow of corporate customers onto the framework
\n
across a range of sectors. There was no change in the reasons for customers moving onto the framework from 2024, with trading issues and cash/liquidity remaining the key
main drivers.
\n
\u2022
Non-Personal forbearance
\u2013
Exposures classi\ufb01ed as forborne reduced marginally across multiple sectors, leading to lower stock values in corporates. A portion of forbearance \ufb02ows related to cases
\n
in Customer Lending Support subject to repeated forbearance.
Credit risk enhancement and mitigation (audited)
\n
The table below shows exposures of modelled portfolios within the scope of the ECL framework and related credit risk enhancement and mitigation (CREM).
\n\n \n
Gross
Maximum credit risk
CREM by type
CREM coverage
Exposure post CREM
exposure
ECL
Total
Stage 3
Financial (1)
Property
Other (2)
Total
Stage 3
Total
Stage 3
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
Cash and balances at central banks
84.1
-
84.1
-
-
-
-
-
-
84.1
-
Loans - amortised cost
(3)
429.9
3.5
426.4
2.5
47.9
261.0
26.0
334.9
2.1
91.5
0.4
Personal
(4)
234.9
1.9
233.0
1.4
1.4
214.5
-
215.9
1.2
17.1
0.2
Non-Personal
(5)
195.0
1.6
193.4
1.1
46.5
46.5
26.0
119.0
0.9
74.4
0.2
Debt securities
78.5
-
78.5
-
0.3
-
-
0.3
-
78.2
-
Total financial assets
592.5
3.5
589.0
2.5
48.2
261.0
26.0
335.2
2.1
253.8
0.4
Contingent liabilities and commitments
Personal
(6)
45.0
-
45.0
0.2
1.1
3.2
-
4.3
0.1
40.7
0.1
Non-Personal
102.2
0.1
102.1
0.4
4.1
7.9
5.3
17.3
0.1
84.8
0.3
Total off-balance sheet
147.2
0.1
147.1
0.6
5.2
11.1
5.3
21.6
0.2
125.5
0.4
Total exposure
739.7
3.6
736.1
3.1
53.4
272.1
31.3
356.8
2.3
379.3
0.8
2024
Financial assets
Cash and balances at central banks
91.8
-
91.8
-
-
-
-
-
-
91.8
-
Loans - amortised cost
(3)
410.2
3.3
406.9
3.9
46.3
253.0
25.5
324.8
3.4
82.1
0.5
Personal
(4)
226.5
1.8
224.7
2.5
0.8
209.1
-
209.9
2.2
14.8
0.3
Non-Personal
(5)
183.7
1.5
182.2
1.4
45.5
43.9
25.5
114.9
1.2
67.3
0.2
Debt securities
62.5
-
62.5
-
0.1
-
-
0.1
-
62.4
-
Total financial assets
564.5
3.3
561.2
3.9
46.4
253.0
25.5
324.9
3.4
236.3
0.5
Contingent liabilities and commitments
Personal
(6)
41.9
-
41.9
0.4
1.1
3.7
-
4.8
-
37.1
0.4
Non-Personal
98.1
0.1
98.0
0.4
3.1
8.2
5.1
16.4
0.1
81.6
0.3
Total off-balance sheet
140.0
0.1
139.9
0.8
4.2
11.9
5.1
21.2
0.1
118.7
0.7
Total exposure
704.5
3.4
701.1
4.7
50.6
264.9
30.6
346.1
3.5
355.0
1.2
\n
(1)
Includes cash and securities collateral.
\n
(2)
Includes guarantees, charges over trade debtors, other asset finance related physical collateral as well as the amount by which credit risk exposure is reduced through netting arrangements, mainly cash management pooling, which give NatWest Group a legal right to set off the financial asset
\n
against a financial liability due to the same counterparty. Any additional credit risk mitigation from a synthetic securitisation is not included in the table above.
\n
(3)
NatWest Group holds collateral in respect of individual loans \u2013 amortised cost to banks and customers. This collateral includes mortgages over property (both personal and commercial); charges over business assets such as plant and equipment; inventories and trade debtors; and guarantees of
\n
lending from parties other than the borrower. NatWest Group obtains collateral in the form of securities in reverse repurchase agreements. Collateral values are capped at the value of the loan.
\n
(4)
Stage 3 mortgage exposures have relatively limited uncovered exposure reflecting the security held. On unsecured credit cards and other personal borrowing, the residual uncovered amount reflects historical experience of continued cash recovery post default through ongoing engagement with
\n
customers.
\n
(5)
Stage 3 exposures post credit risk enhancement and mitigation in Non-Personal mainly represent enterprise value and the impact of written down collateral values; an individual assessment to determine ECL will consider multiple scenarios and in some instances allocate a probability weighting to a
\n
collateral value in excess of the written down value.
\n
(6)
The Personal gross exposure value includes \u00a311.4 billion (2024 \u2013 \u00a310.1 billion) in respect of pipeline mortgages where a committed offer has been made to a customer but where the funds have not yet been drawn down. When drawn down, the exposure would be covered by a security over the
\n
borrower\u2019s property.
Personal portfolio (audited)
\n
Disclosures in the Personal portfolio section include drawn exposure (gross of provisions).
\n\n \n
2025
2024
Private Banking
Private Banking
Retail
& Wealth
Commercial &
Central items
Retail
& Wealth
Commercial &
Central items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Total
Personal lending
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Mortgages
199,972
13,038
2,210
9
215,229
194,865
12,826
2,161
-
209,852
Of which:
Owner occupied
180,323
11,644
1,508
8
193,483
176,137
11,348
1,457
-
188,942
Buy-to-let
19,649
1,394
702
1
21,746
18,728
1,478
704
-
20,910
Interest only
21,812
11,533
436
-
33,781
22,186
11,276
437
-
33,899
Mixed
(1)
9,977
76
4
-
10,057
10,384
40
8
-
10,432
ECL provisions
(2)
248
17
5
2
272
440
12
10
-
462
Other personal lending
(3)
17,696
1,699
221
95
19,711
15,045
1,301
242
-
16,588
ECL provisions
(2)
1,586
11
7
4
1,608
1,330
12
3
-
1,345
Total personal lending
217,668
14,737
2,431
104
234,940
209,910
14,127
2,403
-
226,440
Mortgage LTV ratios
- Owner occupied
57%
61%
57%
42%
57%
56%
59%
56%
-
56%
- Stage 1
57%
59%
57%
-
57%
56%
59%
55%
-
56%
- Stage 2
52%
57%
59%
32%
52%
55%
61%
56%
-
55%
- Stage 3
47%
69%
67%
56%
51%
50%
64%
74%
-
51%
- Buy-to-let
54%
62%
55%
26%
55%
53%
60%
52%
-
53%
- Stage 1
54%
60%
54%
-
55%
54%
60%
51%
-
54%
- Stage 2
52%
56%
62%
26%
52%
52%
57%
55%
-
52%
- Stage 3
51%
56%
66%
24%
53%
52%
56%
59%
-
53%
Gross new mortgage lending
34,458
1,492
313
-
36,263
26,440
1,395
257
-
28,092
Of which:
Owner occupied
32,059
1,372
229
-
33,660
25,300
1,266
183
-
26,749
- LTV > 90%
1,677
-
-
-
1,677
888
-
-
-
888
Weighted average LTV
(4)
71%
66%
61%
-
70%
70%
63%
71%
-
70%
Buy-to-let
2,399
120
84
-
2,603
1,140
129
74
-
1,343
Weighted average LTV
(4)
61%
65%
61%
-
61%
61%
62%
56%
-
61%
Interest only
2,443
1,357
54
-
3,854
1,575
1,238
42
-
2,855
Mixed
(1)
1,049
-
1
-
1,050
1,150
-
1
-
1,151
Mortgage forbearance
Forbearance flow
(5)
328
14
1
-
343
473
8
6
-
487
Forbearance stock
1,203
10
9
1
1,223
1,680
20
15
-
1,715
Current
918
2
3
-
923
1,214
9
10
-
1,233
1-3 months in arrears
110
6
-
-
116
146
9
-
-
155
>3 months in arrears
175
2
6
1
184
320
2
5
-
327
\n
(1) Includes accounts which have an interest only sub-account and a capital and interest sub-account to provide a more comprehensive view of interest only exposures.
\n
(2) Retail Banking excludes a non-material amount of lending and provisions held on relatively small legacy portfolios.
\n
(3) Comprises unsecured lending except for Private Banking & Wealth Management, which includes both secured and unsecured lending. It excludes loans that are commercial in nature.
\n
(4) New mortgage lending LTV re\ufb02ects the LTV at the time of lending.
\n
(5) Forbearance \ufb02ows only include an account once per year, although some accounts may be subject to multiple forbearance deals. Forbearance deals post default are excluded from these \ufb02ows
Personal portfolio (audited)
\n
Mortgage LTV distribution by stage
\n
The table below shows gross mortgage lending and related ECL by LTV band for the Retail Banking portfolio.
\n\n \n
Mortgages
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
66,203
7,099
597
73,899
10
10
94.0
114.0
-
0.1
15.7
0.2
>50% and \u226470%
63,802
5,948
338
70,088
16
15
50.0
81.0
-
0.3
14.8
0.1
>70% and \u226480%
27,658
1,745
73
29,476
8
6
12.0
26.0
-
0.3
16.4
0.1
>80% and \u226490%
20,777
744
39
21,560
7
4
6.0
17.0
-
0.5
15.4
0.1
>90% and
\u2264100%
4,438
76
7
4,521
1
1
2.0
4.0
-
1.3
28.6
0.1
>100%
9
1
7
17
-
-
3
3
-
-
42.9
17.6
Total with LTVs
182,887
15,613
1,061
199,561
42
36
167
245
-
0.2
15.7
0.1
Other
406
1
4
411
2
-
1
3
0.5
-
25.0
0.7
Total
183,293
15,614
1,065
199,972
44
36
168
248
-
0.2
15.8
0.1
2024
\u226450%
64,040
8,344
1,159
73,543
21
16
153
190
-
0.2
13.2
0.3
>50% and \u226470%
61,739
7,741
855
70,335
29
23
104
156
-
0.3
12.2
0.2
>70% and \u226480%
25,022
2,361
173
27,556
13
9
22
44
0.1
0.4
12.7
0.2
>80% and \u226490%
16,718
1,769
85
18,572
9
9
13
31
0.1
0.5
15.3
0.2
>90% and
\u2264100%
4,076
512
26
4,614
2
3
5
10
-
0.6
19.2
0.2
>100%
14
4
13
31
-
-
6
6
-
-
46.2
19.4
Total with LTVs
171,609
20,731
2,311
194,651
74
60
303
437
-
0.3
13.1
0.2
Other
212
1
1
214
2
-
1
3
0.9
-
100.0
1.4
Total
171,821
20,732
2,312
194,865
76
60
304
440
-
0.3
13.1
0.2
\n
\u2022
Mortgage balances increased during 2025 with continuing organic growth. Unsecured lending grew overall, driven by continuing growth in prime quality whole of market lending and balance
\n
transfer credit card segments, as well as the acquisition of Sainsbury\u2019s Bank credit card and personal loan portfolios.
\n
\u2022
Portfolios and new business were closely monitored against agreed operating limits. These included loan-to-value ratios, buy-to-let concentrations, new-build concentrations and credit quality.
\n
Lending criteria, affordability calculations and assumptions for new lending were adjusted during the year, to maintain credit quality in line with appetite and to ensure customers are assessed fairly
\n
as economic conditions change.
\n
\u2022
LTV distribution of portfolio was broadly consistent with the prior year with an increase in balances in the 70-90% LTV bands consistent with increased new business during the year, including
\n
support for \ufb01rst time buyers.
\n
\u2022
The mortgage forbearance reported in 2025 was net of the mortgage securitisation previously mentioned, which reduced the stock by \u00a30.4 billion at the year-end.
Personal portfolio (audited)
\n
Mortgage LTV distribution by region
\n
The table below shows gross mortgage lending by LTV band for Retail Banking, by geographical region.
\n\n \n
Flood risk (1,2)
Weighted
% of regional
% of regional
Lending at high/
\u226450%
50%\u226480%
80%\u2264100%
>100%
Total
average LTV
Other
Total
Total
lending at high
lending at very
very high risk (3)
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
\u00a3m
\u00a3m
%
risk (>60)
high risk (>80)
%
South East
13,656
19,277
5,022
1
37,956
57
3
37,959
19
3.7
1.2
4.9
Greater London
13,505
18,501
4,069
3
36,078
56
4
36,082
18
4.8
0.9
5.7
East of England
8,128
12,167
3,379
-
23,674
57
2
23,676
12
2.9
1.4
4.3
North West
7,479
8,443
2,158
2
18,082
55
1
18,083
9
2.9
2.0
4.9
South West
6,578
8,679
2,454
-
17,711
56
1
17,712
9
2.7
1.0
3.7
West Midlands
5,385
7,228
2,013
1
14,627
57
2
14,629
7
1.8
0.6
2.4
Scotland
4,868
5,821
1,498
1
12,188
55
2
12,190
6
2.5
1.3
3.8
Rest of the UK
14,300
19,448
5,488
9
39,245
57
396
39,641
20
2.8
1.9
4.7
Total
73,899
99,564
26,081
17
199,561
56
411
199,972
100
3.3
1.3
4.6
2024
South East
13,622
19,007
4,506
1
37,136
56
3
37,139
19
3.6
1.2
4.8
Greater London
13,951
18,537
3,391
2
35,881
55
3
35,884
18
4.8
0.9
5.7
East of England
7,776
11,730
3,211
2
22,719
58
1
22,720
12
2.9
1.4
4.3
North West
7,507
8,305
1,878
2
17,692
54
1
17,693
9
2.9
1.9
4.8
South West
6,577
8,455
2,055
1
17,088
56
1
17,089
9
2.6
1.0
3.6
West Midlands
5,379
6,970
1,683
1
14,033
56
1
14,034
7
1.8
0.6
2.4
Scotland
4,860
5,766
1,591
1
12,218
55
1
12,219
6
2.4
1.2
3.6
Rest of the UK
13,871
19,121
4,871
21
37,884
57
203
38,087
20
2.4
2.5
4.9
Total
73,543
97,891
23,186
31
194,651
56
214
194,865
100
3.1
1.4
4.5
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
\n
(2)
As at 31 December 2025, \u00a312.9 billion, 99%, of the Private Banking & Wealth Management mortgage portfolio had flood risk data available (2024 \u2013 \u00a312.6 billion, 98.0%). Of which, 6.2% were rated as high flood risk and 1.0% as very high flood risk
(2024 \u2013 5.4% high flood risk and 1.0% very high
\n
flood risk). 64% of the exposure is in the Greater London region.
\n
(3)
Flood risk is modelled by calculating an estimated loss for each flood source different types of flooding (fluvial, pluvial, tidal), annualised for each source and combined for a total flood score. Flood defences were considered where available. Flood scores were allocated per property based on the
\n
potential annualised loss (\u00a3) to a property dependent on the type, frequency and depth of flooding modelled across different return periods. The scoring ranged from 0 to 100, with 0 being lowest and 100 being the highest risk. A score of 61 and above was considered to be high risk and
\n
properties with a score of 81 and above were considered to be very high risk after flood mitigants were taken-into-account.
Personal portfolio (audited)
Retail Banking \ufb01xed rate mortgages by roll-off date
(1)
The table below shows gross \ufb01xed rate mortgage lending for Retail Banking, by roll-off date.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Retail Banking mortgages - gross
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
exposure
(2)
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Fixed rate roll-off
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
<=1 year
41,993
3,897
158
46,048
34,989
4,309
336
39,634
>1<= 2 years
63,366
4,978
183
68,527
44,146
5,080
418
49,644
>2 years
67,544
4,901
243
72,688
78,629
8,667
693
87,989
Total
172,903
13,776
584
187,263
157,764
18,056
1,447
177,267
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
(2)
Excluding the Metro Bank portfolio acquired during 2024
Retail Banking mortgages by Energy Performance Certi\ufb01cate (EPC) rating
(1)
The table below shows the energy ef\ufb01ciency of Retail Banking residential mortgages
(2)
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Owner occupied
Buy-to-let
Total
Owner occupied
Buy-to-let
Total
EPC rating
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
A
1,415
27
1,442
788
18
806
B
22,217
1,659
23,876
21,923
1,480
23,403
C
35,153
6,767
41,920
31,353
5,876
37,229
D
46,108
5,991
52,099
45,455
5,748
51,203
E
13,305
1,269
14,574
14,455
1,369
15,824
F
2,709
46
2,755
3,026
55
3,081
G
628
10
638
695
13
708
Unclassified
58,788
3,880
62,668
58,442
4,169
62,611
Total
180,323
19,649
199,972
176,137
18,728
194,865
\n
(1)
Not within scope of the Independent auditors\u2019 report
(2)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential
mortgages portfolio had Energy Performance Certificate (EPC) data available
(2024 - \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C
(2024 \u2013 46.3%).
Commercial real estate (CRE)
\n
CRE LTV distribution by stage (audited)
\n
The table below shows CRE gross loans and related ECL by LTV band.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
7,324
222
26
7,572
20
5
6
31
0.3
2.3
23.1
0.4
>50% and \u226460%
4,417
144
40
4,601
15
2
6
23
0.3
1.4
15.0
0.5
>60% and \u226470%
881
21
27
929
4
1
10
15
0.5
4.8
37.0
1.6
>70% and \u2264100%
270
146
35
451
1
4
19
24
0.4
2.7
54.3
5.3
>100%
183
2
83
268
2
-
39
41
1.1
-
47.0
15.3
Total with LTVs
13,075
535
211
13,821
42
12
80
134
0.3
2.2
37.9
1.0
Total portfolio
average LTV
48%
58%
115%
49%
Other
Investment
(1)
2,745
331
36
3,112
5
4
11
20
0.2
1.2
30.6
0.6
Investment
15,820
866
247
16,933
47
16
91
154
0.3
1.8
36.8
0.9
Development and
other
(2)
2,018
406
47
2,471
8
6
29
43
0.4
1.5
61.7
1.7
Total
17,838
1,272
294
19,404
55
22
120
197
0.3
1.7
40.8
1.0
2024
\u226450%
7,334
380
48
7,762
28
6
7
41
0.4
1.6
14.6
0.5
>50% and \u226460%
3,829
169
53
4,051
19
5
9
33
0.5
3.0
17.0
0.8
>60% and \u226470%
584
198
34
816
3
5
8
16
0.5
2.5
23.5
2.0
>70% and \u2264100%
312
83
79
474
2
4
21
27
0.6
4.8
26.6
5.7
>100%
139
8
119
266
1
-
56
57
0.7
-
47.1
21.4
Total with LTVs
12,198
838
333
13,369
53
20
101
174
0.4
2.4
30.3
1.3
Total portfolio
average LTV
46%
51%
102%
48%
Other
Investment
(1)
2,132
348
41
2,521
6
6
15
27
0.3
1.7
36.6
1.1
Investment
14,330
1,186
374
15,890
59
26
116
201
0.4
2.2
31.0
1.3
Development and
other
(2)
1,861
331
59
2,251
11
4
30
45
0.6
1.2
50.8
2.0
Total
16,191
1,517
433
18,141
70
30
146
246
0.4
2.0
33.7
1.4
\n
(1)
Relates mainly to business banking and unsecured corporate lending.
\n
(2)
Relates to the development of commercial and residential properties, along
\n
with CRE activities that are not strictly investment or development. LTV is not
\n
a meaningful measure for this type of lending activity.
\n
\u2022
Overall \u2013 The majority of the CRE portfolio was located and managed in the UK. Business appetite and strategy was aligned across NatWest Group.
\n
\u2022
2025 trends \u2013 There was strong growth in the residential and retail sector, with other CRE sectors remaining broadly \ufb02at. LTV pro\ufb01le remained stable.
\n
\u2022
Credit quality \u2013 Credit quality improved, with marginally fewer exposures in the Wholesale Problem Debt Management framework.
\n
\u2022
Risk appetite \u2013 Lending appetite is subject to regular review and implemented at sub-sector level. Overall appetite slightly increased over the year supported by the view that cyclical risks are
\n
currently at a lower level.
Flow statements (audited)
The \ufb02ow statements that follow show the main ECL and related income statement movements. They also show the changes in ECL as well as the changes in related \ufb01nancial assets used in
determining ECL. Due to differences in scope, exposures may differ from
those reported in other tables, principally in relation to exposures in Stage 1 and Stage 2. These differences do not have a
material ECL effect. Other points to note:
\u2022
Financial assets include treasury liquidity portfolios, comprising balances at central banks and debt securities, as well as loans. Both modelled and non-modelled portfolios are included.
\u2022
Stage transfers (for example, exposures moving from Stage 1 into Stage 2) are a key feature of the ECL movements, with the net re-measurement cost of transitioning to a worse stage being a
primary driver of income statement charges. Similarly, there is an ECL bene\ufb01t for accounts improving stage.
\u2022
Changes in risk parameters shows the reassessment of the ECL within a given stage, including any ECL overlays and residual income statement gains or losses at the point of write-off or
accounting write-down.
\u2022
Other (P&L only items) includes any subsequent changes in the value of written-down assets (for example, fortuitous recoveries) along with other direct write-off items such as direct recovery
costs. Other (P&L only items) affects the income statement but does not affect balance sheet ECL movements.
\u2022
Amounts written-off represent the gross asset written-off against accounts with ECL, including the net asset written-off for any debt sale activity.
\u2022
There were some \ufb02ows from Stage 1 into Stage 3 including transfers due to unexpected default events with a post model adjustment in place for Commercial & Institutional to account for this risk.
\u2022
The effect of any change in post model adjustments during the year is typically reported under changes in risk parameters, as are any effects arising from changes to the underlying models.
\u2022
All movements are captured monthly and aggregated. Interest suspended post default is included within Stage 3 ECL with the movement in the value of suspended interest during the year
reported under currency translation and other adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
NatWest Group total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Currency translation and other adjustments
(644)
-
14
1
156
163
(474)
164
Transfers from Stage 1 to Stage 2
(40,165)
(229)
40,165
229
-
-
-
-
Transfers from Stage 2 to Stage 1
33,789
433
(33,789)
(433)
-
-
-
-
Transfers to Stage 3
(397)
(5)
(2,527)
(258)
2,924
263
-
-
Transfers from Stage 3
161
18
999
47
(1,160)
(65)
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(299)
\u00a0
616
-
447
\u00a0
764
Changes in risk parameters
\u00a0
(114)
\u00a0
(18)
-
312
\u00a0
180
Other changes in net exposure
38,094
212
(7,429)
(175)
(2,349)
(256)
28,316
(219)
Other (P&L only items)
\u00a0
(3)
\u00a0
(2)
-
(49)
\u00a0
(54)
Income statement (releases)/charges
\u00a0
(204)
\u00a0
421
\u00a0
454
\u00a0
671
Amounts written-off
-
-
-
-
(579)
(579)
(579)
(579)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(150)
\u00a0
(150)
At 31 December 2025
546,394
614
39,598
796
4,893
2,175
590,885
3,585
Net carrying amount
545,780
\u00a0
38,802
\u00a0
2,718
\u00a0
587,300
\u00a0
At 1 January 2024
504,345
709
40,294
976
5,621
1,960
550,260
3,645
2024 movements
11,211
(111)
1,871
(189)
280
80
13,362
(220)
At 31 December 2024
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Net carrying amount
514,958
\u00a0
41,378
\u00a0
3,861
\u00a0
560,197
\u00a0
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - mortgages
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
171,333
76
20,992
60
2,303
305
194,628
441
Currency translation and other
adjustments
-
-
-
-
92
92
92
92
Transfers from Stage 1 to Stage 2
(16,507)
(17)
16,507
17
-
-
-
-
Transfers from Stage 2 to Stage 1
17,824
24
(17,824)
(24)
-
-
-
-
Transfers to Stage 3
(14)
-
(865)
(7)
879
7
-
-
Transfers from Stage 3
23
-
806
11
(829)
(11)
-
-
Net re-measurement of ECL on stage
transfer
(7)
7
7
7
Changes in risk parameters
(19)
(18)
74
37
Other changes in net exposure
9,277
(13)
(3,792)
(10)
(1,274)
(152)
4,211
(175)
Other (P&L only items)
-
-
(16)
(16)
Income statement (releases)/charges
(39)
(21)
(87)
(147)
Amounts written-off
-
-
-
-
(87)
(87)
(87)
(87)
Unwinding of discount
-
-
(67)
(67)
At 31 December 2025
181,936
44
15,824
36
1,084
168
198,844
248
Net carrying amount
181,892
15,788
916
198,596
At 1 January 2024
174,038
87
17,827
60
2,068
250
193,933
397
2024 movements
(2,705)
(11)
3,165
-
235
55
695
44
At 31 December 2024
171,333
76
20,992
60
2,303
305
194,628
441
Net carrying amount
171,257
20,932
1,998
194,187
\n
\u2022
ECL coverage for mortgages decreased during the year, primarily driven by the reduction in economic uncertainty post model adjustments (supported by back-testing) and a de\ufb01nition of default
\n
systems and process enhancement in the \ufb01rst half of the year. Additionally, the transfer of \u00a32.1 billion of mortgages with \u00a30.1 billion of ECL to a securitisation special purpose vehicle further
\n
reduced ECL coverage overall, noting that \u00a30.8 billion of these loans were in Stage 3.
\n
\u2022
Stage 3 in\ufb02ows reduced in the year, with the portfolio showing continued resilience alongside the effect of the de\ufb01nition of default systems and process enhancement earlier in the year.
\n
\u2022
Stable portfolio trends and PD model enhancements underpinned PD reductions in the year, resulting in a reduction in Stage 2 balances.
\n
\u2022
The relatively small ECL cost for net re-measurement on transfer into Stage 3 included the effect of risk targeted ECL adjustments, when previously in the good book. Refer to the ECL post model
\n
adjustments section for further details.
\n
\u2022
Write-off occurs once the repossessed property has been sold and there is a residual shortfall balance remaining outstanding. This would typically be within \ufb01ve years from default but can be
\n
longer.
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - credit cards
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
4,523
76
2,034
186
162
117
6,719
379
Currency translation and other
adjustments
-
-
-
-
6
6
6
6
Transfers from Stage 1 to Stage 2
(2,329)
(52)
2,329
52
-
-
-
-
Transfers from Stage 2 to Stage 1
1,339
105
(1,339)
(105)
-
-
-
-
Transfers to Stage 3
(36)
(1)
(231)
(78)
267
79
-
-
Transfers from Stage 3
3
2
14
5
(17)
(7)
-
-
Net re-measurement of ECL on stage
transfer
(71)
191
101
221
Changes in risk parameters
15
30
25
70
Other changes in net exposure
2,243
50
(640)
(77)
(33)
(1)
1,570
(28)
Other (P&L only items)
-
-
(1)
(1)
Income statement (releases)/charges
(6)
144
124
262
Amounts written-off
-
-
-
-
(118)
(118)
(118)
(118)
Unwinding of discount
-
-
(12)
(12)
At 31 December 2025
5,743
124
2,167
204
267
190
8,177
518
Net carrying amount
5,619
1,963
77
7,659
At 1 January 2024
3,475
70
2,046
204
146
89
5,667
363
2024 movements
1,048
6
(12)
(18)
16
28
1,052
16
At 31 December 2024
4,523
76
2,034
186
162
117
6,719
379
Net carrying amount
4,447
1,848
45
6,340
\n
\u2022
Overall ECL for cards increased during 2025, driven primarily by the acquisition of Sainsbury\u2019s Bank credit card balances alongside continued organic portfolio growth, re\ufb02ecting strong customer
\n
demand, while sustaining robust risk appetite.
\n
\u2022
Flow rates into Stage 3 were slightly higher in 2025 compared to 2024, re\ufb02ecting the strategic growth and seasoning of credit card balances since 2022. This trend contributed to an increase in
\n
PDs during the year, driving a net \ufb02ow into Stage 2 from Stage 1.
\n
\u2022
Charge-off (analogous to partial write-off) typically occurs after 12 missed payments.
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - other personal unsecured
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
5,605
127
1,465
182
833
641
7,903
950
Currency translation and other
adjustments
-
-
-
-
27
27
27
27
Transfers from Stage 1 to Stage 2
(2,145)
(95)
2,145
95
-
-
-
-
Transfers from Stage 2 to Stage 1
1,471
157
(1,471)
(157)
-
-
-
-
Transfers to Stage 3
(79)
(3)
(329)
(118)
408
121
-
-
Transfers from Stage 3
7
3
24
10
(31)
(13)
-
-
Net re-measurement of ECL on stage
transfer
(100)
219
63
182
Changes in risk parameters
(33)
(10)
126
83
Other changes in net exposure
1,992
111
(389)
(37)
(128)
(47)
1,475
27
Other (P&L only items)
-
-
30
30
Income statement (releases)/charges
(22)
172
172
322
Amounts written-off
-
-
-
-
(168)
(168)
(168)
(168)
Unwinding of discount
-
-
(33)
(33)
At 31 December 2025
6,851
167
1,445
184
941
717
9,237
1,068
Net carrying amount
6,684
1,261
224
8,169
At 1 January 2024
5,240
149
1,657
238
963
758
7,860
1,145
2024 movements
365
(22)
(192)
(56)
(130)
(117)
43
(195)
At 31 December 2024
5,605
127
1,465
182
833
641
7,903
950
Net carrying amount
5,478
1,283
192
6,953
\n
\u2022
Total ECL increased during the year, primarily driven by the acquisition of Sainsbury\u2019s Bank loan balances and continued organic loan book growth, while arrears performance remained stable,
\n
resulting in ECL coverage levels broadly consistent with 31 December 2024.
\n
\u2022
Flow rates into Stage 3 remained stable, in line with broader portfolio trends on arrears, with overall Stage 3 balances increasing as a result of reduced debt sale activity overall in the year.
\n
\u2022
Write-off occurs once recovery activity with the customer has been concluded or there are no further recoveries expected, but no later than six years after default.
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - corporate
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
62,575
175
11,450
273
1,562
659
75,587
1,107
Currency translation and other
adjustments
(331)
-
17
-
24
18
(290)
18
Inter-group transfers
156
1
8
1
1
-
165
2
Transfers from Stage 1 to Stage 2
(14,018)
(50)
14,018
50
-
-
-
-
Transfers from Stage 2 to Stage 1
8,374
103
(8,374)
(103)
-
-
-
-
Transfers to Stage 3
(170)
(1)
(741)
(44)
911
45
-
-
Transfers from Stage 3
54
7
82
15
(136)
(22)
-
-
Net re-measurement of ECL on stage
transfer
(84)
151
214
281
Changes in risk parameters
(22)
(9)
42
11
Other changes in net exposure
7,479
30
(1,776)
(42)
(591)
(37)
5,112
(49)
Other (P&L only items)
(4)
(3)
(61)
(68)
Income statement (releases)/charges
(80)
97
158
175
Amounts written-off
-
-
-
-
(166)
(166)
(166)
(166)
Unwinding of discount
-
-
(26)
(26)
At 31 December 2025
64,119
159
14,684
292
1,605
727
80,408
1,178
Net carrying amount
63,960
14,392
878
79,230
At 1 January 2024
61,402
226
12,275
344
1,454
602
75,131
1,172
2024 movements
1,173
(51)
(825)
(71)
108
57
456
(65)
At 31 December 2024
62,575
175
11,450
273
1,562
659
75,587
1,107
Net carrying amount
62,400
11,177
903
74,480
\n
\u2022
Total ECL increased in the year primarily re\ufb02ecting a small number of individual defaults. Despite the growth in Stage 3 ECL, transfers into Stage 3 reduced compared to 2024, with a notable
\n
reduction in transfers seen in the second half of 2025.
\n
\u2022
Total performing book ECL was stable year-on-year, but with a small increase in Stage 2, re\ufb02ecting the net transfer of assets from Stage 1 into Stage 2.
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - property
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
27,468
77
2,980
61
590
225
31,038
363
Currency translation and other
adjustments
8
-
-
-
9
-
17
-
Inter-group transfers
(175)
-
(7)
-
(1)
-
(183)
-
Transfers from Stage 1 to Stage 2
(2,569)
(8)
2,569
8
-
-
-
-
Transfers from Stage 2 to Stage 1
2,021
23
(2,021)
(23)
-
-
-
-
Transfers to Stage 3
(6)
-
(143)
(8)
149
8
-
-
Transfers from Stage 3
45
4
28
5
(73)
(9)
-
-
Net re-measurement of ECL on stage
transfer
(22)
31
13
22
Changes in risk parameters
(28)
(8)
18
(18)
Other changes in net exposure
3,692
15
(313)
(10)
(199)
(21)
3,180
(16)
Other (P&L only items)
-
-
-
-
Income statement (releases)/charges
(35)
13
10
(12)
Amounts written-off
-
-
-
-
(33)
(33)
(33)
(33)
Unwinding of discount
-
-
(8)
(8)
At 31 December 2025
30,484
61
3,093
56
442
193
34,019
310
Net carrying amount
30,423
3,037
249
33,709
At 1 January 2024
26,040
94
3,155
89
606
195
29,801
378
2024 movements
1,428
(17)
(175)
(28)
(16)
30
1,237
(15)
At 31 December 2024
27,468
77
2,980
61
590
225
31,038
363
Net carrying amount
27,391
2,919
365
30,675
\n
\u2022
Total ECL for property exposures reduced notably in the year, with reductions observed in all stages.
\n
\u2022
In Stage 3, both total \ufb01nancial assets and ECL reduced as there were low levels of default in the year, which were more than offset by the effects of repayments and write-offs.
\n
\u2022
Performing book ECL reduced in the year driven by changes in risk parameters, which included the impact of reductions in post model adjustments.
Flow statements (audited)
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
93,724
37
1,739
12
123
57
95,586
106
Currency translation and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
adjustments
(377)
-
(3)
-
-
14
(380)
14
Inter-group transfers
18
-
(1)
-
-
-
17
-
Transfers from Stage 1 to Stage 2
(960)
(3)
960
3
-
-
-
-
Transfers from Stage 2 to Stage 1
1,714
11
(1,714)
(11)
-
-
-
-
Transfers to Stage 3
(82)
-
(29)
(1)
111
1
-
-
Transfers from Stage 3
8
-
9
-
(17)
-
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(8)
\u00a0
7
\u00a0
44
\u00a0
43
Changes in risk parameters
\u00a0
(11)
\u00a0
(2)
\u00a0
19
\u00a0
6
Other changes in net exposure
3,828
10
(317)
1
(17)
5
3,494
16
Other (P&L only items)
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
Income statement (releases)/charges
\u00a0
(9)
\u00a0
6
\u00a0
65
\u00a0
62
Amounts written-off
-
-
-
-
(6)
(6)
(6)
(6)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
At 31 December 2025
97,873
36
644
9
194
128
98,711
173
Net carrying amount
97,837
\u00a0
635
\u00a0
66
\u00a0
98,538
\u00a0
At 1 January 2024
88,860
36
1,599
14
101
22
90,560
72
2024 movements
4,864
1
140
(2)
22
35
5,026
34
At 31 December 2024
93,724
37
1,739
12
123
57
95,586
106
Net carrying amount
93,687
\u00a0
1,727
\u00a0
66
\u00a0
95,480
\u00a0
\n
\u2022
The increase in Stage 3 \ufb01nancial assets and ECL primarily re\ufb02ected the impact of a single large \ufb02ow to default in the year.
\u2022
Performing book ECL was marginally lower at 31 December 2025, with the Stage 2 ECL reduction re\ufb02ective of exposure \ufb02owing back into Stage 1.Asset quality (audited)
The table below shows asset quality bands of gross loans and ECL, by stage, for the Personal portfolio.
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,087
6,432
-
120,519
19
9
-
28
-
0.1
-
-
AQ5-AQ8
83,712
8,584
-
92,296
26
21
-
47
-
0.2
-
0.1
AQ9
140
935
-
1,075
-
6
-
6
-
0.6
-
0.6
AQ10
-
-
1,339
1,339
-
-
191
191
-
-
14.3
14.3
\u00a0
197,939
15,951
1,339
215,229
45
36
191
272
-
0.2
14.3
0.1
Credit cards
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
117
-
-
117
1
-
-
1
0.9
-
-
0.9
AQ5-AQ8
5,850
1,967
-
7,817
123
181
-
304
2.1
9.2
-
3.9
AQ9
21
114
-
135
1
24
-
25
4.8
21.1
-
18.5
AQ10
-
-
242
242
-
-
190
190
-
-
78.5
78.5
\u00a0
5,988
2,081
242
8,311
125
205
190
520
2.1
9.9
78.5
6.3
Other personal
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
765
112
-
877
5
12
-
17
0.7
10.7
-
1.9
AQ5-AQ8
8,148
1,212
-
9,360
161
137
-
298
2.0
11.3
-
3.2
AQ9
64
144
-
208
6
36
-
42
9.4
25.0
-
20.2
AQ10
-
-
956
956
-
-
731
731
-
-
76.5
76.5
\u00a0
8,977
1,468
956
11,401
172
185
731
1,088
1.9
12.6
76.5
9.5
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,969
6,544
-
121,513
25
21
-
46
-
0.3
-
-
AQ5-AQ8
97,710
11,763
-
109,473
310
339
-
649
0.3
2.9
-
0.6
AQ9
225
1,193
-
1,418
7
66
-
73
3.1
5.5
-
5.2
AQ10
-
-
2,537
2,537
-
-
1,112
1,112
-
-
43.8
43.8
\u00a0
212,904
19,500
2,537
234,941
342
426
1,112
1,880
0.2
2.2
43.8
0.8
Asset quality (audited)
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
AQ1-AQ4
104,793
8,416
-
113,209
29
16
-
45
-
0.2
-
-
AQ5-AQ8
81,263
11,683
-
92,946
48
38
-
86
0.1
0.3
-
0.1
AQ9
194
962
-
1,156
-
6
-
6
-
0.6
-
0.5
AQ10
-
-
2,535
2,535
-
-
325
325
-
-
12.8
12.8
186,250
21,061
2,535
209,846
77
60
325
462
-
0.3
12.8
0.2
Credit cards
AQ1-AQ4
128
-
-
128
1
-
-
1
0.8
-
-
0.8
AQ5-AQ8
4,650
1,866
-
6,516
75
169
-
244
1.6
9.1
-
3.7
AQ9
23
87
-
110
1
17
-
18
4.4
19.5
-
16.4
AQ10
-
-
176
176
-
-
118
118
-
-
67.1
67.1
4,801
1,953
176
6,930
77
186
118
381
1.6
9.5
67.1
5.5
Other personal
AQ1-AQ4
691
127
-
818
6
14
-
20
0.9
11.0
-
2.4
AQ5-AQ8
6,521
1,359
-
7,880
120
134
-
254
1.8
9.9
-
3.2
AQ9
55
136
-
191
4
35
-
39
7.3
25.7
-
20.4
AQ10
-
-
860
860
-
-
656
656
-
-
76.3
76.3
7,267
1,622
860
9,749
130
183
656
969
1.8
11.3
76.3
9.9
Total
AQ1-AQ4
105,612
8,543
-
114,155
36
30
-
66
-
0.4
-
0.1
AQ5-AQ8
92,434
14,908
-
107,342
243
341
-
584
0.3
2.3
-
0.5
AQ9
272
1,185
-
1,457
5
58
-
63
1.8
4.9
-
4.3
AQ10
-
-
3,571
3,571
-
-
1,099
1,099
-
-
30.8
30.8
198,318
24,636
3,571
226,525
284
429
1,099
1,812
0.1
1.7
30.8
0.8
\n
\u2022
The distribution of lending across the AQ1-AQ9 bands remained broadly consistent with the prior year. Growth in the mortgage portfolio was mainly in the AQ1-AQ4 bands as expected.
\n
\u2022
The proportion of Stage 3/AQ10 loans declined over the year, mainly as a result of the balance sheet management actions described above, notably the mortgage securitisation which reduced
\n
Stage 3 loans by \u00a30.8 billion. Furthermore, there was an enhancement to the mortgage de\ufb01nition of default systems and process resulting in approximately \u00a30.4 billion of loans migrating from
\n
Stage 3 back to the good book. Within the credit card portfolio, \ufb02ows into Stage 3 increased year-on-year, driven by strategic growth and seasoning of credit card balances since 2022. For other
\n
personal lending, \ufb02ow rates into AQ10/Stage 3 remained stable, with AQ10 balances increasing as a result of reduced debt sale activity overall in the year.
Asset quality (audited)
\n
The table below shows asset quality bands of gross loans and ECL, by stage, for the Non-Personal portfolio.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
AQ1-AQ4
43,968
2,314
-
46,282
29
15
-
44
0.1
0.7
-
0.1
AQ5-AQ8
53,783
15,882
-
69,665
199
326
-
525
0.4
2.1
-
0.8
AQ9
28
264
-
292
-
19
-
19
-
7.2
-
6.5
AQ10
-
-
1,990
1,990
-
-
944
944
-
-
47.4
47.4
97,779
18,460
1,990
118,229
228
360
944
1,532
0.2
2.0
47.4
1.3
Financial institutions
AQ1-AQ4
68,620
154
-
68,774
20
2
-
22
-
1.3
-
-
AQ5-AQ8
5,339
196
-
5,535
17
3
-
20
0.3
1.5
-
0.4
AQ9
-
6
-
6
-
-
-
-
-
-
-
-
AQ10
-
-
141
141
-
-
113
113
-
-
80.1
80.1
73,959
356
141
74,456
37
5
113
155
0.1
1.4
80.1
0.2
Sovereign
AQ1-AQ4
1,878
1
-
1,879
7
1
-
8
0.4
100.0
-
0.4
AQ5-AQ8
131
-
-
131
-
-
-
-
-
-
-
-
AQ9
-
265
-
265
-
4
-
4
-
1.5
-
1.5
AQ10
-
-
15
15
-
-
6
6
-
-
40.0
40.0
2,009
266
15
2,290
7
5
6
18
0.4
1.9
40.0
0.8
Total
AQ1-AQ4
114,466
2,469
-
116,935
56
18
-
74
0.1
0.7
-
0.1
AQ5-AQ8
59,253
16,078
-
75,331
216
329
-
545
0.4
2.1
-
0.7
AQ9
28
535
-
563
-
23
-
23
-
4.3
-
4.1
AQ10
-
-
2,146
2,146
-
-
1,063
1,063
-
-
49.5
49.5
173,747
19,082
2,146
194,975
272
370
1,063
1,705
0.2
1.9
49.5
0.9
Asset quality (audited)
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
41,509
2,409
-
43,918
32
19
-
51
0.1
0.8
-
0.1
AQ5-AQ8
53,448
11,783
-
65,231
232
306
-
538
0.4
2.6
-
0.8
AQ9
34
272
-
306
-
19
-
19
-
7.0
-
6.2
AQ10
-
-
2,279
2,279
-
-
896
896
-
-
39.3
39.3
\u00a0
94,991
14,464
2,279
111,734
264
344
896
1,504
0.3
2.4
39.3
1.4
Financial institutions
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
64,845
233
-
65,078
21
2
-
23
-
0.9
-
-
AQ5-AQ8
4,176
996
-
5,172
17
9
-
26
0.4
0.9
-
0.5
AQ9
-
12
-
12
-
1
-
1
-
8.3
-
8.3
AQ10
-
-
59
59
-
-
40
40
-
-
67.8
67.8
\u00a0
69,021
1,241
59
70,321
38
12
40
90
0.1
1.0
67.8
0.1
Sovereign
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
1,364
1
-
1,365
12
1
-
13
0.9
100.0
-
1.0
AQ5-AQ8
127
-
-
127
-
-
-
-
-
-
-
-
AQ9
-
132
-
132
-
1
-
1
-
0.8
-
0.8
AQ10
-
-
21
21
-
-
5
5
-
-
23.8
23.8
\u00a0
1,491
133
21
1,645
12
2
5
19
0.8
1.5
23.8
1.2
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
107,718
2,643
-
110,361
65
22
-
87
0.1
0.8
-
0.1
AQ5-AQ8
57,751
12,779
-
70,530
249
315
-
564
0.4
2.5
-
0.8
AQ9
34
416
-
450
-
21
-
21
-
5.1
-
4.7
AQ10
-
-
2,359
2,359
-
-
941
941
-
-
39.9
39.9
\u00a0
165,503
15,838
2,359
183,700
314
358
941
1,613
0.2
2.3
39.9
0.9
\n
\u2022
The majority of Non-Personal lending remained in the AQ1-AQ4 band, with the increase in the year driven by increases in \ufb01nancial institutions sectors. This portfolio is subject to low ECL coverage,
re\ufb02ecting the high credit quality in the portfolio.
\u2022
In corporate sectors, Stage 2 exposure grew in the year, primarily in the AQ5-AQ8 band, which accounted for the majority of exposure to corporates. AQ10 exposures in Stage 3 reduced in
corporates, as new defaults were more than offset by write-offs and repayments on previous defaults.
\u2022
The increase in sovereigns exposure in AQ9 and Stage 2 was primarily due to increased exposure to a single counterparty where the lending is fully guaranteed.
Credit risk - Trading activities
This section details the credit risk pro\ufb01le of NatWest Group\u2019s trading activities.
Securities \ufb01nancing transactions and collateral (audited)
The table below shows securities \ufb01nancing transactions in Commercial & Institutional and Central items & other. Balance sheet captions include balances held at all classi\ufb01cations under IFRS.
\u00a0 \n \n
Reverse repos
Repos
Of which:
Outside netting
Of which:
Outside netting
Total
can be offset
arrangements
Total
can be offset
arrangements
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Gross
95,674
95,618
56
89,789
87,730
2,059
IFRS offset
(31,599)
(31,599)
-
(31,599)
(31,599)
-
Carrying value
64,075
64,019
56
58,190
56,131
2,059
Master netting arrangements
(474)
(474)
-
(474)
(474)
-
Securities collateral
(63,292)
(63,292)
-
(55,657)
(55,657)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(56,131)
(56,131)
-
Net
309
253
56
2,059
-
2,059
2024
Gross
87,901
87,861
40
68,024
67,321
703
IFRS offset
(23,883)
(23,883)
-
(23,883)
(23,883)
-
Carrying value
64,018
63,978
40
44,141
43,438
703
Master netting arrangements
(1,549)
(1,549)
-
(1,549)
(1,549)
-
Securities collateral
(62,217)
(62,217)
-
(41,889)
(41,889)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(43,438)
(43,438)
-
Net
252
212
40
703
-
703
Derivatives (audited)
The table below shows derivatives by type of contract. The master netting agreements and collateral shown do not result in a net presentation on the balance sheet under IFRS. A signi\ufb01cant
proportion of the derivatives relate to trading activities in Commercial & Institutional. The table also includes hedging derivatives in Central items & other.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Notional
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
GBP
USD
EUR
Other
Total
Assets
Liabilities
Notional
Assets
Liabilities
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3m
\u00a3m
\u00a3bn
\u00a3m
\u00a3m
Gross exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
77,796
71,925
\u00a0
97,152
93,109
IFRS offset
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(17,007)
(17,951)
\u00a0
(18,746)
(21,027)
Carrying value
3,460
3,573
6,328
1,158
14,519
60,789
53,974
13,628
78,406
72,082
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate
(1)
3,125
2,072
5,699
192
11,088
32,742
26,758
10,333
37,499
31,532
Exchange rate
331
1,495
622
966
3,414
27,981
27,042
3,279
40,797
40,306
Credit
2
6
7
-
15
66
174
14
110
244
Equity and commodity
2
-
-
-
2
-
-
2
-
-
Carrying value
\u00a0 \u00a0 \u00a0 \u00a0
14,519
60,789
53,974
13,628
78,406
72,082
Counterparty mark-to-market
netting
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(45,928)
(45,928)
\u00a0
(61,883)
(61,883)
Cash collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(9,275)
(4,281)
\u00a0
(10,005)
(5,801)
Securities collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(3,283)
(1,256)
\u00a0
(4,072)
(896)
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Banks
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
89
217
\u00a0
214
345
Other financial institutions
(3)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,508
1,160
\u00a0
1,429
1,456
Corporate
(4)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
673
1,110
\u00a0
769
1,669
Government
(5)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
33
22
\u00a0
34
32
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
UK
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,098
1,548
\u00a0
1,061
1,774
Europe
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
693
589
\u00a0
875
978
US
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
437
283
\u00a0
443
604
RoW
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
75
89
\u00a0
67
146
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Asset quality of uncollateralised
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
derivative assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,865
\u00a0 \u00a0
2,049
\u00a0
AQ5-AQ8
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
435
\u00a0 \u00a0
394
\u00a0
AQ9-AQ10
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
3
\u00a0 \u00a0
3
\u00a0
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
\u00a0 \u00a0
2,446
\u00a0
\n
(1)
The notional amount of interest rate derivatives includes \u00a38,768 billion
(2024 \u2013 \u00a37,321 billion) in respect of contracts cleared through central
clearing counterparties.
(2)
Transactions with certain counterparties with whom NatWest Group has
netting arrangements but collateral is not posted on a daily basis; certain
transactions with speci\ufb01c terms that may not fall within netting and
collateral arrangements; derivative positions in certain jurisdictions where
the collateral agreements are not deemed to be legally enforceable.
(3)
Includes transactions with securitisation vehicles and funds where
collateral posting is contingent on NatWest Group\u2019s external rating.
(4)
Mainly large corporates with whom NatWest Group may have netting
arrangements in place with no collateral posting.
(5)
Sovereigns and supranational entities with no collateral arrangements,
collateral arrangements that are not considered enforceable, or one-way
collateral agreements in their favour.
Debt securities (audited)
The table below shows debt securities held at mandatory fair value through pro\ufb01t or loss by issuer as well as ratings based on the lowest of Standard & Poor\u2019s, Moody\u2019s and Fitch.
\u00a0
Central and local government
\u00a0 \u00a0 \u00a0
\u00a0
UK
US
Other
Financial institutions
Corporate
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
AAA
-
-
1,505
1,283
-
2,788
AA to AA+
-
4,153
257
309
18
4,737
A to AA-
2,105
-
1,481
596
215
4,397
BBB- to A-
-
-
892
256
384
1,532
Non-investment grade
-
-
-
11
50
61
Total
2,105
4,153
4,135
2,455
667
13,515
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AAA
-
-
1,335
1,368
-
2,703
AA to AA+
-
3,734
74
569
2
4,379
A to AA-
2,077
-
1,266
381
519
4,243
BBB- to A-
-
-
831
562
885
2,278
Non-investment grade
-
-
-
108
167
275
Total
2,077
3,734
3,506
2,988
1,573
13,878
Capital, liquidity and funding riskDe\ufb01nitions (audited)
Regulatory capital consists of reserves and
instruments issued that are available, have a
degree of permanency and are capable of
absorbing losses. A number of strict
conditions set by regulators must be satis\ufb01ed
to be eligible as capital.
Capital risk is the inability to conduct business
in base or stress conditions on a risk or
leverage basis due to insuf\ufb01cient qualifying
capital as well as the failure to assess,
monitor, plan and manage capital adequacy
requirements.
Liquidity consists of assets that can be readily
converted to cash within a short timeframe at
a reliable value. Liquidity risk is de\ufb01ned as the
risk that the Group or any of its subsidiaries
or branches cannot meet it\u2019s actual or
potential \ufb01nancial obligations in a timely
manner as they fall due in the short term.
Funding consists of on-balance sheet liabilities
that are used to provide cash to \ufb01nance
assets. Funding risk is the current or
prospective risk that the Group or its
subsidiaries or branches cannot meet
\ufb01nancial obligations as they fall due in the
medium to long term, either at all or without
increasing funding costs unacceptably.
Liquidity and funding risks arise in a number
of ways, including through the maturity
transformation role that banks perform. The
risks are dependent on factors such as:
\u2022
Maturity pro\ufb01le;
\u2022
Composition of sources and uses of
funding;
\u2022
The quality and size of the liquidity
portfolio;
\u2022
Wholesale market conditions; and
\u2022
Depositor and investor behaviour.
Sources of risk (audited)
Capital
The eligibility of instruments and \ufb01nancial
resources as regulatory capital is laid down
by applicable regulation. Capital is
categorised under two tiers (Tier 1 and Tier
2) according to the ability to absorb losses,
degree of permanency and the ranking of
absorbing losses on either a going or gone
concern basis. There are three broad
categories of capital across these two tiers:
CET1 capital
-
CET1 capital must be
perpetual and capable of unrestricted and
immediate use to cover risks or losses as
soon as these occur. This includes ordinary
shares issued and retained earnings.
Additional Tier 1 (AT1) capital -
This is the
second type of loss-absorbing capital and
must be capable of absorbing losses on a
going concern basis. These instruments are
either written down or converted into CET1
capital when the CET1 ratio falls below a pre-
speci\ufb01ed level.
Tier 2 capital -
Tier 2 capital is the bank
entities' supplementary capital and provides
loss absorption on a gone concern basis.
Tier
2 capital absorbs losses after Tier 1 capital.
It typically consists of subordinated debt
securities which must have a minimum of \ufb01ve
years to maturity at all times to be fully
recognised for regulatory purposes. Funding sources (audited)
The table below shows the carrying values of the principal funding sources based on contractual maturity. Balance sheet captions include balances held at all classi\ufb01cations under IFRS 9.
\u00a0
2025
2024
\u00a0
Short-term less
Long-term more
\u00a0
Short-term less
Long-term more
\u00a0
\u00a0
than 1 year
than 1 year
Total
than 1 year
than 1 year
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
22,371
5,445
27,816
11,967
-
11,967
Other bank deposits
(1)
6,094
10,182
16,276
9,708
9,777
19,485
\u00a0
28,465
15,627
44,092
21,675
9,777
31,452
Customer Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
753
1,043
1,796
1,363
-
1,363
Non-bank financial institutions
53,559
4
53,563
48,761
241
49,002
Personal
232,815
7,757
240,572
231,483
2,451
233,934
Corporate
147,022
45
147,067
149,086
105
149,191
\u00a0
434,149
8,849
442,998
430,693
2,797
433,490
Trading liabilities
(2)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
(3)
26,168
2,410
28,578
29,752
810
30,562
Derivatives collateral
11,966
-
11,966
12,509
-
12,509
Other bank and customer deposits
454
286
740
627
268
895
Debt securities in issue - Medium term notes
28
206
234
20
237
257
\u00a0
38,616
2,902
41,518
42,908
1,315
44,223
Other financial liabilities
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Customer deposits including repos
836
1,476
2,312
471
1,341
1,812
Debt securities in issue:
\u00a0\u00a0
-
\u00a0\u00a0\u00a0
Commercial paper and certificates of deposit
8,718
683
9,401
10,889
377
11,266
Medium term notes
11,475
41,999
53,474
11,118
34,967
46,085
Covered bonds
-
749
749
-
749
749
Securitisation
-
1,663
1,663
295
880
1,175
\u00a0
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Total funding
523,335
78,995
602,330
519,100
57,288
576,388
Of which: available in resolution
(4)
\u00a0\u00a0
30,049
\u00a0\u00a0
29,742
\n
(1)
Includes \u00a38.2 billion (2024 \u2013 \u00a312.0 billion) relating to Term Funding Scheme
with additional incentives for Small and Medium-sized Enterprises participation.
(2)
Excludes short positions of \u00a37.5 billion (2024 \u2013 \u00a310.5 billion).
(3)
Comprises central & other bank repos of \u00a38.2 billion (2024 \u2013 \u00a37.2 billion), other
financial institution repos of \u00a318.0 billion (2024 \u2013 \u00a320.4 billion) and other
corporate repos of \u00a32.4 billion (2024 \u2013 \u00a33.0 billion).
(4)
Eligible liabilities (as defined in the Banking Act 2009 as amended from time to
time) that meet the eligibility criteria set out in the regulations, rules, policies,
guidelines, or statements of the Bank of England including the Statement of
Policy published by the Bank of England in December 2021 (updating June
2018). The balance consists of \u00a324.3 billion (2024 \u2013 \u00a324.0 billion) under debt
securities in issue (senior MREL) and \u00a35.7 billion (2024 \u2013 \u00a35.7 billion) under
subordinated liabilities.
Contractual maturity (audited)
\n
This table shows the residual maturity of \ufb01nancial instruments, based on contractual date of maturity of NatWest Group\u2019s banking activities, including hedging derivatives. Trading activities, comprising
\n
mandatory fair value through pro\ufb01t or loss (MFVTPL) assets and held-for-trading (HFT) liabilities have been excluded from the maturity analysis and are shown in total in the table below.
\n\n \n
Banking activities
Less than
6 months-
More than
Trading
1 months
1-3 months
3-6 months
1 year
Subtotal
1-3 years
3-5 years
5 years
Total
activities
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
85,182
-
-
-
85,182
-
-
-
85,182
-
85,182
Trading assets
-
-
-
-
-
-
-
-
-
46,537
46,537
Derivatives
(10)
95
34
29
148
65
322
-
535
60,254
60,789
Settlement balances
645
-
-
-
645
-
-
-
645
-
645
Loans to banks - amortised cost
4,854
748
411
109
6,122
696
-
140
6,958
-
6,958
Loans to customers -
amortised cost
(1)
43,857
19,126
17,086
23,561
103,630
66,657
49,262
202,841
422,390
-
422,390
Personal
7,795
2,222
3,331
6,496
19,844
24,503
21,533
168,637
234,517
-
234,517
Corporate
20,497
4,196
3,851
7,862
36,406
30,312
21,908
30,208
118,834
-
118,834
Non-bank financial institutions
15,565
12,708
9,904
9,203
47,380
11,842
5,821
3,996
69,039
-
69,039
Other financial assets
1,683
2,994
3,968
2,621
11,266
23,899
9,978
33,583
78,726
1,044
79,770
Total financial assets
136,211
22,963
21,499
26,320
206,993
91,317
59,562
236,564
594,436
107,835
702,271
2024
Total financial assets
146,069
22,925
18,701
31,177
218,872
76,479
56,413
215,575
567,339
128,007
695,346
\n
(1)
Loans to customers is gross and excludes \u00a33.5 billion (2024 - \u00a33.3 billion) of impairment provisions.
Contractual maturity (audited)
\n\n \n
Banking activities
Less than
More than
Trading
1 months
1-3 months
3-6 months
6 months - 1 year
Subtotal
1-3 years
3-5 years
5 years
Total
activities
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank deposits excluding repos
4,447
342
845
460
6,094
6,556
568
3,058
16,276
-
16,276
Bank repos
20,926
881
-
564
22,371
3,616
1,829
-
27,816
-
27,816
Customer repos
587
16
-
150
753
1,043
-
-
1,796
-
1,796
Customer deposits excluding repos
380,523
20,637
17,331
14,905
433,396
7,785
13
8
441,202
-
441,202
Personal
205,094
5,698
9,628
12,395
232,815
7,750
7
-
240,572
-
240,572
Corporate
126,625
11,281
7,074
2,042
147,022
31
6
8
147,067
-
147,067
Non-bank financial institutions
48,804
3,658
629
468
53,559
4
-
-
53,563
-
53,563
Settlement balances
942
-
-
-
942
-
-
-
942
-
942
Trading liabilities
-
-
-
-
-
-
-
-
-
49,022
49,022
Derivatives
31
14
12
29
86
164
106
1
357
53,617
53,974
Other financial liabilities
3,745
3,702
7,783
5,799
21,029
22,923
16,418
7,229
67,599
-
67,599
CPs and CDs
1,500
1,718
2,497
3,003
8,718
683
-
-
9,401
-
9,401
Medium term notes
2,209
1,459
5,107
2,700
11,475
21,229
15,412
5,358
53,474
-
53,474
Covered bonds
-
-
-
-
-
-
749
-
749
-
749
Securitisations
-
-
-
-
-
3
-
1,660
1,663
-
1,663
Customer deposits including repos
36
525
179
96
836
1,008
257
211
2,312
-
2,312
Subordinated liabilities
-
57
20
999
1,076
1,892
2,780
375
6,123
-
6,123
Notes in circulation
3,164
-
-
-
3,164
-
-
-
3,164
-
3,164
Lease liabilities
4
19
21
41
85
158
62
230
535
-
535
Total financial liabilities
414,369
25,668
26,012
22,947
488,996
44,137
21,776
10,901
565,810
102,639
668,449
2024
Total financial liabilities
399,323
28,936
21,299
32,066
481,624
33,905
16,240
6,535
538,304
126,332
664,636
Senior notes and subordinated liabilities - residual maturity pro\ufb01le by instrument type (audited)
The table below shows NatWest Group\u2019s debt securities in issue and subordinated liabilities by residual maturity.
\u00a0
Trading
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
liabilities
Other financial liabilities
\u00a0
\u00a0 \u00a0
Debt securities in issue
\u00a0 \u00a0 \u00a0
\u00a0
Debt securities
Commercial
\u00a0
Covered
\u00a0
Subordinated
\u00a0
Total notes
\u00a0
in issue MTNs
paper and CDs
MTNs
bonds
Securitisation
liabilities
Total
in issue
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Less than 1 year
28
8,718
11,475
-
-
1,076
21,269
21,297
1-3 years
1
683
21,229
-
3
1,892
23,807
23,808
3-5 years
73
-
15,412
749
-
2,780
18,941
19,014
More than 5 years
132
-
5,358
-
1,660
375
7,393
7,525
Total
234
9,401
53,474
749
1,663
6,123
71,410
71,644
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Less than 1 year
20
10,889
11,118
-
295
1,051
23,353
23,373
1-3 years
35
377
18,426
-
7
1,523
20,333
20,368
3-5 years
42
-
12,409
749
-
2,623
15,781
15,823
More than 5 years
160
-
4,132
-
873
939
5,944
6,104
Total
257
11,266
46,085
749
1,175
6,136
65,411
65,668
\n
The table below shows the currency breakdown.
\u00a0
GBP
USD
EUR
Other
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Commercial paper and CDs
3,227
1,341
4,833
-
9,401
MTNs
4,914
22,061
23,536
3,197
53,708
Covered bonds
749
-
-
-
749
Securitisation
1,663
-
-
-
1,663
Subordinated liabilities
2,383
1,325
2,415
-
6,123
Total
12,936
24,727
30,784
3,197
71,644
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Total
14,541
23,797
24,325
3,005
65,668
Encumbrance (audited)
NatWest Group evaluates the extent to which assets can be \ufb01nanced in a secured form (encumbrance), but certain asset types lend themselves more readily to encumbrance. The typical
\n
characteristics that support encumbrance are an ability to pledge those assets to another counterparty or entity through operation of law without necessarily requiring prior noti\ufb01cation, homogeneity,
\n
predictable and measurable cash \ufb02ows, and a consistent and uniform underwriting and collection process. Retail assets including residential mortgages, credit card receivables and personal loans
\n
display many of these features.
\n
NatWest Group categorises its assets into four broad groups, those that are:
\n
\u2022
Already encumbered and used to support funding currently in place through own-asset securitisations, covered bonds and securities repurchase agreements.
\n
\u2022
Pre-positioned with central banks as part of funding schemes and those encumbered under such schemes.
\n
\u2022
Ring-fenced to meet regulatory requirements, where NatWest Group has in place an operational continuity in resolution (OCIR) investment mandate wherein the PRA requires critical service
\n
providers to hold segregated liquidity buffers covering at least 50% of their annual \ufb01xed overheads.
\n
\u2022
Unencumbered. In this category, NatWest Group has in place an enablement programme which seeks to identify assets capable of being encumbered and to identify the actions to facilitate such
\n
encumbrance whilst not affecting customer relationships or servicing. Programmes to manage the use of assets to actively support funding are established within UK DoLSub and NatWest Markets
\nPlc.Non-traded market risk
De\ufb01nition (audited)
Non-traded market risk is the risk to the
value of assets or liabilities outside the trading
book, or the risk to income, that arises from
changes in market prices such as interest
rates, foreign exchange rates and equity
prices, or from changes in managed rates.
Sources of risk (audited)
Non-traded market risk exists in all balance-
sheet exposure that makes reference to
market risk factors, when customer
behaviour could impact the size and timing of
the repricing or maturity of future cash \ufb02ows,
or when valuation of assets and liabilities is
driven by market risk factors such as interest
rates or foreign exchange rates.
The key sources of non-traded market risk
are interest rate risk, credit spread risk,
foreign exchange risk, equity risk and
accounting volatility risk. Qualitative and
quantitative information on these risk types is
provided following the VaR table below.Governance (audited)
Risk governance for non-traded market risk is
in line with the approach outlined in the Risk
management framework section.Equity risk (audited)
Non-traded equity risk is the potential variation in income and reserves arising from changes in equity
valuations. Equity positions are carried on the balance sheet at fair value based on market prices where
available. Equity positions may take the form of shares that are publicly listed on a recognised exchange,
privately owned investments and shareholdings in industry participations including SWIFT. Further
disclosure of NatWest Group\u2019s investments in equity shareholdings, fair value gains and losses and
valuation techniques may be found in the notes to the consolidated \ufb01nancial statements. Investments,
acquisitions or disposals of a strategic nature are referred to the Acquisitions & Disposals Committee.
Once approved by the Chief Financial Of\ufb01cer with support from the Acquisitions & Disposals Committee
for execution, such transactions are referred for approval to the Board, the Executive Committee, the
Chief Executive Of\ufb01cer, the Chief Financial Of\ufb01cer or as otherwise required. Decisions to acquire or hold
equity positions in the non-trading book that are not of a strategic nature are taken by authorised
persons with delegated authority. Non-traded equity value at risk is monitored monthly and capital
allocation to the risk is included in NatWest Group\u2019s annual Internal Capital Adequacy Assessment Process
(ICAAP). Traded market risk
De\ufb01nition (audited)
Traded market risk is the risk of losses in
trading book positions from \ufb02uctuations in
market variables, such as interest rates, credit
spreads, foreign exchange rates, equity prices,
implied volatilities and asset correlations.
Sources of risk (audited)
NatWest Group is exposed to traded market
risk through trading activities entered into by
NatWest Markets where such risk arises from
market-making and underwriting activity and
by facilitating customer-facing business that
cannot be immediately offset with other
customers or market participants.
From a market risk perspective, activities are
focused on rates; currencies; and traded
credit. NatWest Markets undertakes
transactions in \ufb01nancial instruments including
debt securities, as well as securities \ufb01nancing
and derivatives.
The key categories of traded market risk are
interest rate risk, credit spread risk and
foreign currency price risk.
Trading activities may also give rise to
counterparty credit risk. For further detail
refer to the Credit risk section. Governance (audited)
Risk governance for traded market risk is in
line with the approach outlined in the Risk
management framework section. Traded VaR (1-day 99%) (audited)
The table below shows one-day 99% internal VaR for NatWest Group\u2019s trading portfolios, split by exposure type.
2025
2024
Average
Maximum
Minimum
Period end
Average
Maximum
Minimum
Period end
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Interest rate
3.2
5.4
1.8
2.3
6.6
12.1
3.0
3.8
Credit spread
4.8
7.2
3.1
3.1
7.7
10.1
5.6
5.6
Currency
1.3
4.0
-
0.5
2.0
6.7
0.5
1.3
Equity
0.1
0.1
-
0.1
0.1
0.3
-
-
Diversification
(1)
(3.8)
(2.5)
(6.3)
(5.4)
Total
5.6
9.7
3.4
3.5
10.1
16.2
5.3
5.3
\n
(1)
NatWest Group benefits from diversification across various financial instrument
\n
types, currencies and markets. The extent of the diversification benefit
\n
depends on the correlation between the assets and risk factors in the portfolio
\n
at a particular time. The diversification factor is the sum of the VaR on
\n
individual risk types less the total portfolio VaR.
\n
\u2022
Both interest rate VaR and credit spread VaR decreased on an average basis, compared to 2024.
\n
\u2022
This re\ufb02ects an earlier period of higher market volatility dropping out of the rolling window for VaR calculation during H2 2024.2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.14 Loan impairment provisions
There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, for which we hold expected credit losses (ECL). The calculation of ECL
\n
considers historical, current, and forward-looking information to determine the amount we do not expect to recover. It considers losses on both defaulted exposures and performing exposures
\n
that may default in future. ECL is recognised on drawn exposures, loans commitments, and contingent liabilities.
\n
For accounting policy information refer to Accounting policy 2.3. Further disclosures on credit risk and information on ECL methodology are shown from page 187.
\n
Loan exposure and impairment metrics
\n
The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit loss framework.
2025
2024
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
386,651
363,821
Stage 2
38,582
40,474
Stage 3
4,683
5,930
Of which: individual
1,456
1,285
Of which: collective
3,227
4,645
429,916
410,225
ECL provisions
(3)
- Stage 1
614
598
- Stage 2
796
787
- Stage 3
2,175
2,040
Of which: individual
598
451
Of which: collective
1,577
1,589
3,585
3,425
ECL provision coverage
(4)
- Stage 1 (%)
0.16
0.16
- Stage 2 (%)
2.06
1.94
- Stage 3 (%)
46.44
34.40
0.83
0.83
Continuing operations
Impairment (releases)/losses
ECL charge
(5)
671
359
Stage 1
(204)
(438)
Stage 2
421
360
Stage 3
454
437
Of which: individual
188
192
Of which: collective
266
245
Amounts written off
579
654
Of which: individual
137
144
Of which: collective
442
510
\n
(1)
The table shows gross loans only and excludes amounts that are outside the
\n
scope of the ECL framework. Refer to Financial instruments within the scope of
\n
the IFRS 9 ECL framework for further details. Other financial assets within the
\n
scope of the IFRS 9 ECL framework were cash and balances at central banks
\n
totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 - \u00a34 million) related to assets classified as FVOCI and
\n
\u00a30.1 billion (2024 - \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions divided by loans \u2013
\n
amortised cost and FVOCI. It is calculated on loans and total ECL provisions,
\n
including ECL for other (non-loan) assets and unutilised exposure. Some
\n
segments with a high proportion of debt securities or unutilised exposure may
\n
result in a not meaningful coverage ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial
\n
assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets
\n
classified as FVOCI; and \u00a33 million charge (2024 - \u00a35 million release) related to
\n
contingent liabilities.
Credit risk enhancement and mitigation
For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management \u2013 Credit risk enhancement and mitigation section.
Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00239": { "value": "Credit riskDe\ufb01nition (audited)
Credit risk is the risk that customers,
counterparties or issuers fail to meet a
contractual obligation to settle outstanding
amounts. For the purposes of the credit risk
section, Personal refers to lending to
individuals and Non-Personal refers to lending
to small and medium-sized enterprises,
corporates, banks and other \ufb01nancial
institutions.
Sources of risk (audited)
The principal sources of credit risk for
NatWest Group are lending, off-balance sheet
products, derivatives and securities \ufb01nancing,
and debt securities. NatWest Group is also
exposed to settlement risk through foreign
exchange, trade \ufb01nance and payments
activities.
Governance (audited)
Risk governance for credit risk is in line with
the approach outlined in the Risk
management framework section.
The Credit Risk function provides oversight
and challenge of frontline credit risk
management activities:
\u2022
Establishing credit risk policy, standards
and toolkits which set out the mandatory
limits and parameters required to ensure
that credit risk is managed within risk
appetite and which provide the minimum
standards for the identi\ufb01cation,
assessment, management, monitoring
and reporting of credit risk.
\u2022
Oversight of the \ufb01rst line of defence to
ensure that credit risk remains within the
appetite set by the Board and that it is
being managed adequately and
effectively.
\u2022
Assessing the adequacy of ECL provisions
including approving key IFRS 9 inputs
(such as signi\ufb01cant increase in credit risk
(SICR) thresholds) and any necessary in-
model and post model adjustments
through NatWest Group and business unit
provisions and model committees.
Risk appetite (audited)
Risk appetite for credit risk is in line with the
approach outlined in the Risk management
framework section.
Credit risk appetite is monitored through risk
appetite frameworks tailored to NatWest
Group\u2019s Personal and Non-Personal
segments.
Personal
The Personal credit risk appetite framework
sets limits that control the quality and
concentration of both existing and new
business for each relevant business segment.
Risk appetite measures consider the
segments\u2019 ability to grow sustainably and the
level of losses expected under stress. Credit
risk is further controlled through operational
limits speci\ufb01c to customer or product
characteristics.
Non-Personal
The Non-Personal credit risk appetite
framework has been designed to re\ufb02ect
factors that in\ufb02uence the ability to operate
within risk appetite. Tools such as stress
testing and economic capital are used to
measure credit risk volatility and develop links
between the framework and risk appetite
limits.
The framework is used to manage
concentrations of risk which may arise across
four lenses \u2013 single name, sector, country
and product and asset classes. The
framework is supported by a suite of
transactional acceptance standards that set
out the risk parameters within which
businesses should operate.Problem debt management
(audited)
\n
When stress or \ufb01nancial dif\ufb01culties are
\n
identi\ufb01ed, NatWest Group collaborates closely
\n
with customers to support them.
\n
Personal
\n
Pre-emptive triggers, based on both NatWest
\n
Group and credit reference agency data, are
\n
used to identify customers that may be at
\n
risk of \ufb01nancial dif\ufb01culty. NatWest Group
\n
proactively contacts these customers to offer
\n
support with the aim of preventing further
\n
deterioration of their \ufb01nancial position.
\n
Financial Health and Support
\n
When a customer exceeds an agreed limit or
\n
misses a regular monthly payment, the
\n
customer is contacted by NatWest Group and
\n
requested to remedy the position. If the
\n
situation is not resolved then, where
\n
appropriate, the Financial Health and Support
\n
team become involved and the customer is
\n
supported by skilled debt management staff
\n
who endeavour to provide customers with
\n
bespoke solutions.
\n
If appropriate, a notice of intention to default
\n
and/or a formal demand may be issued to the
\n
customer. The account may also be
\n
registered with credit reference agencies.
\n
Subsequently, the customer\u2019s debt may be
\n
referred to a third-party debt collection
\n
agency or solicitor, to agree an affordable
\n
repayment plan. The sale of unsecured debt
\n
may also be considered as an option.
\n
Non-Personal
\n
NatWest Group uses a range of early warning
\n
indicators to identify customers that may be
\n
exposed to emerging risks, including \ufb01nancial
\n
stress, allowing for increased monitoring
\n
where necessary. Early warning indicators
\n
may be internal, such as a customer\u2019s bank
\n
account activity, or external, such as the
\n
share price of a publicly listed customer.
\n
When these indicators suggest that a
\n
customer is experiencing potential or actual
\n
dif\ufb01culty, or if relationship managers or credit
\n
of\ufb01cers observe other signs of \ufb01nancial
\n
dif\ufb01culty, the customer may be classi\ufb01ed
\n
within the Wholesale Problem Debt
\n
Management framework.
\n
Wholesale Problem Debt Management
\n
framework
\n
This framework focuses on Non-Personal
\n
customers and is designed to provide early
\n
identi\ufb01cation of credit deterioration, support
\n
intelligent risk-taking, ensure fair and
\n
consistent customer outcomes and provide
\n
key insights into Non-Personal lending
\n
portfolios.
\n
There are two classi\ufb01cations in the
\n
framework that apply to non-defaulted
\n
customers that are in \ufb01nancial stress \u2013
\n
Heightened Monitoring and Risk of Credit
\n
Loss.
\n
For the purposes of provisioning, all
\n
exposures categorised as Heightened
\n
Monitoring or Risk of Credit Loss are
\n
categorised as Stage 2 and subject to a
\n
lifetime loss assessment.
\n
The framework also applies to those
\n
customers that have met NatWest Group\u2019s
\n
default criteria (AQ10 exposures). Defaulted
\n
exposures are categorised as Stage 3
\n
impaired for provisioning purposes.
\n
Heightened Monitoring customers are
\n
performing customers that have met certain
\n
characteristics, which have led to signi\ufb01cant
\n
credit deterioration. Characteristics include
\n
trading issues, covenant breaches, material
\n
probability of default (PD) downgrades and
\n
past due facilities.
\n
Heightened Monitoring customers require
\n
pre-emptive actions (outside the customer\u2019s
\n
normal trading patterns) to return or maintain
\n
their facilities within NatWest Group\u2019s current
\n
risk appetite.
\n
Risk of Credit Loss customers are performing
\n
customers that have met the criteria for
\n
Heightened Monitoring and also pose a risk of
\n
credit loss to NatWest Group in the next 12
\n
months should mitigating action not be taken
\n
or not be successful.
\n
The Wholesale Problem Debt Management
\n
framework does not apply to problem debt
\n
management for small and medium-sized
\n
enterprise retail customers. These customers
\n
are, where necessary, managed by specialist
\n
problem debt management teams, depending
\n
on the size of exposure or by the Financial
\n
Health and Support team where a loan has
\n
been impaired.
Customer Lending Support
Where customers meet speci\ufb01c referral
criteria, relationships are supported by the
Customer Lending Support team.
Customer Lending Support works with
corporate and commercial customers in
\ufb01nancial dif\ufb01culty to help them understand
their options and how their restructuring or
repayment strategies can be delivered.
Helping viable customers return to \ufb01nancial
health and restoring a normal banking
relationship is always the preferred outcome.
However, where this is not possible, NatWest
Group works with customers to achieve a
solvent outcome.
Forbearance (audited)
Forbearance occurs when a concession is
made on the contractual terms of a debt in
response to a customer\u2019s \ufb01nancial dif\ufb01culties.
The aim of forbearance is to help the
customer regain \ufb01nancial stability while
reducing risk. To ensure that forbearance is
appropriate for the customer, minimum
standards are applied when assessing,
recording, monitoring and reporting
forbearance.
Personal
Forbearance options include payment
concessions, loan rescheduling (such as
extending contractual maturity), switching to
interest-only payments, suspending interest
or capitalising arrears. This support can be
provided for both mortgages and unsecured
lending.
Non-Personal
Forbearance may involve covenant waivers,
amendments to margins, payment
concessions and loan rescheduling (including
extensions in contractual maturity),
capitalisation of arrears, and debt forgiveness
or debt-for-equity swaps.
Customer PD and facility loss given default
(LGD) are reassessed prior to \ufb01nalising any
forbearance arrangement. The ultimate
outcome of a forbearance strategy is highly
dependent on the co-operation of the
borrower and a viable business or repayment
outcome. If forbearance becomes unsuitable
or is unsuccessful, NatWest Group may
pursue repayment, enforcement of security
or insolvency proceedings, although these are
options of last resort.
IFRS 9 models
(audited)
IFRS 9 models provide PD, exposure at
default (EAD) and LGD for the purpose of
calculating ECL.
Model build
Risk ranking is normally the same as for
internal ratings based (IRB) models to
maintain consistency in risk measurement.
Economic drivers are incorporated, normally
by using stress models. Term structures are
used to assess the risk of loss beyond 12
months that will affect lifetime loss for
exposures which have signi\ufb01cantly
deteriorated (Stage 2) or defaulted (Stage 3).
Model application
Model application involves selecting forward-
looking economic scenarios and assigning
appropriate probability weights.
Model design principles
The modelling of ECL under IFRS 9 adopts
the standard approach of breaking down
credit loss estimation into its component
parts of PD, LGD and EAD. To comply with
IFRS 9, these model parameters are designed
with the following characteristics:
\u2022
Unbiased \u2013 provide a best estimate.
\u2022
Point-in-time \u2013 re\ufb02ecting current
economic conditions as opposed to
through-the-cycle.
\u2022
Economic forecasts \u2013 IFRS 9 PD estimates
and, where appropriate, EAD and LGD
estimates re\ufb02ecting economic forecasts.
\u2022
Lifetime measurement \u2013 parameters are
provided as multi-period term structures
up to behavioural lifetimes.
PD
Personal
Personal PD models follow a discrete multi-
horizon survival approach, predicting
quarterly PDs up to lifetime at account level.
A key driver is the score from related IRB PD
models, with economic forecasts incorporated
through the stress models.
Non-Personal
Non-Personal PD models use a point-in-
time/through-the-cycle framework to provide
point-in-time estimates that re\ufb02ect economic
conditions at the reporting date. A key driver
is the score from related IRB PD models, with
economic forecasts incorporated through the
stress models.
LGD
Personal
Economic forecasts are incorporated for the
secured portfolios, where changes in property
prices can be readily accommodated.
Analysis has shown limited sensitivity to
economic conditions on LGDs for the other
Personal portfolios.
Non-Personal
Economic forecasts are incorporated into
LGD estimates using the existing point-in-
time/through-the-cycle framework. However,
for some portfolios, including low-default,
sovereigns and banks, there is insuf\ufb01cient loss
data to substantiate estimates that vary with
economic conditions.
EAD
Personal
Revolving products employ existing IRB
models as a foundation, with appropriate
adjustments incorporating a term structure
based on time to default. Amortising products
use an amortisation schedule, where a
formula is used to calculate the expected
balance based on remaining terms and
interest rates.
Non-Personal
EAD values rely on product-speci\ufb01c credit
conversion factors (CCFs), closely mirroring
the product segmentation and approach of
the respective IRB model, but without
conservative or downturn assumptions. These
CCFs are estimated over multi-year time
horizons.
Economic drivers (audited)
Introduction
The portfolio segmentation and selection of
economic drivers for IFRS 9 follows the
approach used in stress testing. The stress
models for each portfolio segment (de\ufb01ned by
product or asset class and where relevant,
industry sector and region) are based on a
selected, small number of economic variables
that best explain the movements in portfolio
loss rates. The process to select economic
drivers uses empirical analysis and expert
judgement.
\n\n
Economic drivers (audited)
\n
The most signi\ufb01cant economic drivers for
\n
material portfolios are shown in the table
\n
below:
\n\n \n
Portfolio
Economic drivers
Unemployment rate, sterling
Personal
swap rate, house price index,
mortgages
real wage
Personal
Unemployment rate, sterling
unsecured
swap rate, real wage
Stock price index, gross
Corporates
domestic product (GDP)
Commercial
Stock price index, commercial
real estate
property price index, GDP
\n
Economic scenarios
\n
At 31 December 2025, the range of
\n
anticipated future economic conditions was
\n
de\ufb01ned by a set of four internally developed
\n
scenarios and their respective probabilities. In
\n
addition to the base case, they comprised
\n
upside, downside and extreme downside
\n
scenarios.
\n
For 31 December 2025, the four scenarios
\n
were deemed appropriate in capturing the
\n
uncertainty in economic forecasts and the
\n
non-linearity in outcomes under different
\n
scenarios. These four scenarios were
\n
developed to provide suf\ufb01cient coverage to
\n
current risks faced by the economy and
\n
consider varying outcomes across the labour
\n
market, in\ufb02ation, interest rate, asset price
\n
and economic growth, around which there
\n
remains pronounced levels of uncertainty.
\n
Since 31 December 2024, the near-term
\n
economic growth outlook weakened, with
\n
growth in the second half of 2025 losing
\n
momentum. In\ufb02ation rose to nearly double
\n
the target level of 2% in 2025, with underlying
\n
price pressures remaining \ufb01rm. However,
\n
there are tentative signs of easing in\ufb02ationary
\n
pressures and in\ufb02ation is assumed to fall back
\n
close to the target by the end of 2026. The
\n
peak unemployment rate is higher than at 31
\n
December 2024. The unemployment rate is
\n
assumed to continue to rise in the near-term,
\n
albeit at a slower pace. The Bank of England
\n
is expected to continue cutting interest rates
\n
in a \u2018gradual and careful\u2019 manner with an
\n
assumed terminal rate in the base case of
\n
3.25%, marginally lower compared to 3.5%
\n
assumed at 31 December 2024. Housing
\n
market activities remained resilient in 2025,
\n
with prices expected to grow modestly.
\n
High-level narrative \u2013 potential developments, vulnerabilities and risks
\n\n \n
Outperformance sustained
\u2013 above trend growth as
consumer sentiment recovers
Upside
Steady growth
\u2013 staying close to trend pace
Base case
Growth
Stalling
\u2013 cautious consumer and policy uncertainty
weighs on activity
Downside
Extreme stress
\u2013 extreme fall in GDP, with policy
support to facilitate sharp recovery
Extreme downside
Sticky
\u2013 strong growth and/or wage policies keep
services in\ufb02ation above target in medium term
Upside
Battle won
\u2013 beyond near-term volatility, services
in\ufb02ation continues to ease, 2% target is met on a
In\ufb02ation
sustained basis
Base case
Slow
\u2013 above target in\ufb02ation in 2026 but swiftly falls to
lower levels
Downside
Close to de\ufb02ation
\u2013 in\ufb02ationary pressures diminish
amidst pronounced weakness in demand
Extreme downside
Recovery
\u2013 job growth rebounds strongly, reversing
much of the recent rise in unemployment rate
Upside
Cooling continues
\u2013 gradual loosening continues into
Labour
2026, before improving
Base case
market
Job shedding
\u2013 redundancies, reduced hours, building
slack
Downside
Depression
\u2013 unemployment hits levels close to previous
peaks amid severe stress
Extreme downside
Limited cuts
\u2013 higher growth and in\ufb02ation keep the
Monetary Policy Committee cautious
Upside
Steady
\u2013 rate cutting cycle largely done, two further
Rates
rate cuts
Base case
short-term
Supportive
\u2013 sharp declines to support recovery
Downside
Sharp drop
\u2013 drastic easing in policy to support a sharp
deterioration in the economy
Extreme downside
Above consensus
\u2013 4%
Upside
Rates
Middle
\u2013 3.25%
Base case
long-term
Low
\u2013 2.5% and below
Downside/Extreme downside
\n\n
Economic drivers
(audited)
\n
Main macroeconomic variables
\n
The main macroeconomic variables for each of the four scenarios used for ECL modelling are set out in the table below.
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Upside
Base case
Downside
downside
average
Upside
Base case
Downside
downside
average
Five-year summary
%
%
%
%
%
%
%
%
%
%
GDP
2.1
1.4
0.5
0.1
1.2
2.0
1.3
0.5
(0.2)
1.1
Unemployment rate
4.3
5.1
5.6
7.0
5.3
3.6
4.3
5.0
6.7
4.6
House price index
5.7
3.3
0.6
(3.8)
2.6
5.8
3.5
0.8
(4.3)
2.7
Commercial real estate price
6.1
2.2
(0.3)
(5.0)
1.9
5.4
1.2
(1.0)
(5.7)
1.1
Consumer price index
2.6
2.4
2.4
1.8
2.3
2.4
2.2
3.5
1.6
2.4
Bank of England base rate
4.0
3.5
2.6
1.4
3.2
4.4
4.0
3.0
1.6
3.6
Stock price index
6.2
4.8
2.8
1.1
4.3
6.3
5.0
3.4
1.1
4.5
World GDP
3.7
3.1
2.5
2.2
3.0
3.8
3.2
2.5
1.6
3.0
Probability weight
22.4
45.0
19.5
13.1
23.2
45.0
19.1
12.7
\n
(1)
The \ufb01ve-year summary runs from 2025-2029 for 31 December 2025
\n
and from 2024-2028 for 31 December 2024.
\n
(2)
The table shows compound annual growth rate (CAGR) for GDP,
\n
average levels for the unemployment rate and Bank of England base
\n
rate and Q4 to Q4 CAGR for other parameters.
\n
(3)
An implicit carbon price is an additional cost related to greenhouse gas
\n
emissions as a result of climate transition policy.
\n
Climate transition
\n
Since 2023, NatWest Group has assessed the
\n
implicit contribution to its base case
\n
macroeconomic scenario from changes in UK
\n
transition policy, expressed as an additional
\n
implicit sectoral carbon price
\n
(3)
\n
. Climate
\n
transition policy contribution to the total ECL
\n
was immaterial at the end of 2025.
\n
In 2025, NatWest Group individually assessed
\n
50 active and potential UK transition policies
\n
that had a signi\ufb01cant impact on the cost of
\n
emissions \u2013 for example, the Emissions
\n
Trading Scheme and Renewables Obligation \u2013
\n
and converted them into equivalent implicit
\n
sectoral carbon prices. The prices were
\n
calculated as the cost per tonne of emissions
\n
abated by each policy. Using an internally
\n
developed model, NatWest Group estimated
\n
the impact of sector carbon prices on key
\n
macroeconomic variables such as GDP and
\n
unemployment. Using this analysis, NatWest
\n
Group created two scenarios, the baseline,
\n
which incorporates climate transition related
\n
impacts, and an alternative scenario, which
\n
excludes them.
\n
Comparing ECL under these two scenarios
\n
allowed NatWest Group to estimate an
\n
aggregate macroeconomic impact of the
\n
analysed transition policies and their
\n
contribution to ECL.
\n
The current approach does not include
\n
physical risks and transition risks, beyond the
\n
assessed transition policies. NatWest Group
\n
will continue to enhance and develop the
\n
approach as reliable data and methodology
\n
become available.
\n
Probability weightings of scenarios
\n
NatWest Group applies a quantitative
\n
approach for IFRS 9 multiple economic
\n
scenarios by selecting speci\ufb01c discrete
\n
scenarios that represent the range of risks in
\n
the economic outlook and assigning
\n
appropriate probability weights.
\n
The approach involves comparing GDP paths
\n
for NatWest Group\u2019s scenarios against a set
\n
of 1,000 model simulations to determine the
\n
percentile in the distribution that aligns most
\n
closely with each scenario.
\n
The probability weight for the base case is
\n
determined \ufb01rst using judgement, while
\n
probability weights for the alternative
\n
scenarios are then assigned based on these
\n
percentiles scores.
\n
The weights were broadly comparable to
\n
those used at 31 December 2024 but with
\n
slightly more downside skew. The assigned
\n
probability weights were judged to be aligned
\n
with the subjective assessment of balance of
\n
the risks in the economy. Given the balance
\n
of risks that the economies in which NatWest
\n
Group operates are exposed to, NatWest
\n
Group judges it appropriate that downside-
\n
biased scenarios have higher combined
\n
probability weights than the upside-biased
\n
scenario.
\n
It presents good coverage to the range of
\n
outcomes assumed in the scenarios, including
\n
the potential for a robust recovery on the
\n
upside and exceptionally challenging
\n
outcomes on the downside. A 22.4%
\n
weighting was applied to the upside scenario,
\n
a 45.0% weighting applied to the base case
\n
scenario, a 19.5% weighting applied to the
\n
downside scenario and a 13.1% weighting
\n
applied to the extreme downside scenario.
\n\n
Economic drivers
(audited)
\n
2,600
\n
2,700
\n
2,800
\n
2,900
\n
3,000
\n
3,100
\n
3,200
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK gross domestic product (\u00a3bn)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
7
\n
8
\n
9
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK unemployment rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
Bank of England base rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
100
\n
120
\n
140
\n
160
\n
180
\n
200
\n
220
\n
240
\n
260
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK house prices (index)
\n
Upside
Base case
\n
Downside
Extreme downside
\n\n
Economic drivers
(audited)
\n
Annual \ufb01gures
\n \n \n
GDP - annual growth
Consumer price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
1.4
1.4
1.4
1.4
1.4
2025
3.6
3.6
3.6
3.6
3.6
2026
1.9
1.0
0.3
(3.7)
0.5
2026
2.7
2.3
2.7
0.6
2.3
2027
3.2
1.5
(0.6)
(0.2)
1.3
2027
2.4
2.0
1.8
1.1
1.9
2028
2.3
1.4
0.2
1.4
1.4
2028
2.1
2.0
1.7
1.8
1.9
2029
1.6
1.4
1.4
1.4
1.5
2029
2.0
2.0
2.0
2.0
2.0
2030
1.6
1.4
1.7
1.4
1.5
2030
2.0
2.0
2.0
2.0
2.0
\n\n \n
Unemployment rate - annual average
Bank of England base rate - annual average
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
4.8
4.8
4.8
4.8
4.8
2025
4.24
4.24
4.24
4.24
4.24
2026
4.7
5.4
5.5
6.1
5.3
2026
4.00
3.52
2.94
1.14
3.20
2027
4.1
5.2
6.1
8.1
5.5
2027
4.00
3.25
2.00
0.17
2.77
2028
4.1
5.1
6.0
8.3
5.4
2028
4.00
3.25
2.00
0.39
2.80
2029
4.0
4.9
5.7
7.6
5.2
2029
4.00
3.25
2.00
1.02
2.88
2030
4.0
4.8
5.5
6.9
5.1
2030
4.00
3.25
2.15
1.82
3.02
\n\n \n
House price index - four quarter change
Stock price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
3.0
3.0
3.0
3.0
3.0
2025
11.1
11.1
11.1
11.1
11.1
2026
7.8
3.4
(1.2)
(13.1)
1.3
2026
8.1
3.3
(16.0)
(52.9)
(6.7)
2027
7.2
3.4
(2.8)
(14.1)
1.2
2027
5.1
3.3
7.2
33.9
6.5
2028
5.1
3.4
0.1
(0.2)
2.9
2028
3.5
3.3
7.2
25.3
5.9
2029
5.4
3.4
4.4
7.2
4.5
2029
3.5
3.3
7.2
20.2
5.7
2030
5.6
3.4
4.2
6.6
4.4
2030
3.0
3.3
7.2
16.8
5.5
\n\n \n
Commercial real estate price - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
2.6
2.6
2.6
2.6
2.6
2026
14.1
2.9
(6.8)
(24.1)
-
2027
4.4
2.6
(2.5)
(13.0)
0.6
2028
5.5
1.5
2.8
7.0
3.3
2029
4.2
1.6
2.6
6.8
2.9
2030
2.7
1.6
2.5
6.5
2.5
\n\n
Economic drivers
(audited)
\n
Worst points
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Downside
downside
average
Downside
downside
average
%
Quarter
%
Quarter
%
%
Quarter
%
Quarter
%
GDP
-
Q4 2027
(3.8)
Q4 2026
-
-
Q1 2024
(4.1)
Q4 2025
-
Unemployment rate - peak
6.2
Q4 2027
8.5
Q4 2027
5.6
5.6
Q4 2026
8.5
Q1 2027
4.9
House price index
(2.4)
Q2 2028
(25.9)
Q2 2028
-
(1.9)
Q2 2027
(25.6)
Q3 2027
-
Commercial real estate price
(7.3)
Q2 2027
(33.3)
Q3 2027
-
(10.5)
Q2 2026
(35.0)
Q3 2026
(1.8)
Consumer price index
- highest four quarter change
3.8
Q3 2025
3.8
Q3 2025
3.8
6.1
Q1 2026
3.5
Q1 2024
3.5
Bank of England base rate - extreme level
2.0
Q1 2025
0.1
Q1 2025
2.8
2.0
Q1 2024
0.1
Q1 2024
2.9
Stock price index
(6.7)
Q4 2026
(47.7)
Q4 2026
-
(0.2)
Q4 2025
(27.4)
Q4 2025
-
\n
(1)
The figures show falls relative to the starting period for GDP, house price index,
\n
commercial real estate price and stock price index. For unemployment rate, it
\n
shows highest value through the scenario horizon. For consumer price index, it
\n
shows highest annual percentage change. For Bank of England base rate, it
\n
shows highest or lowest value through the horizon. The calculations are
\n
performed over five years, with a starting point of Q4 2024 for 31 December
\n
2025 scenarios and Q4 2023 for 31 December 2024 scenarios.
Impairment, provisioning and write-
offs (audited)
In the overall assessment of credit risk,
impairment provisioning and write-offs are
used as key indicators of credit quality.
SICR
Defaulted exposures are classi\ufb01ed in Stage 3
and subject to lifetime ECL measurement.
Remaining exposures are assessed for SICR
since initial recognition. Where exposures are
identi\ufb01ed with SICR, they are classi\ufb01ed in
Stage 2 and assessed using a lifetime ECL
measurement. Exposures not considered
deteriorated are assessed with a 12-month
ECL. NatWest Group applies a framework to
identify deterioration, primarily based on
changes in lifetime PD, supported by
additional qualitative high-risk backstops.
\u2022
IFRS 9 lifetime PD assessment (the
primary driver) \u2013 relies on measuring the
relative deterioration in forward-looking
lifetime PD and is assessed monthly. SICR
is determined by comparing the residual
lifetime PD at the balance sheet date with
the lifetime PD at the date of initial
recognition (DOIR). If the current lifetime
PD exceeds the origination PD by more
than a de\ufb01ned threshold, SICR is assumed
to have occurred and the exposure moved
into Stage 2 for a lifetime ECL
assessment. For Non-Personal, a doubling
of PD would indicate a SICR, subject to a
minimum PD uplift of 0.1%. For Personal
portfolios and small and medium-sized
enterprise retail, the criteria vary by risk
band, as detailed in the following table:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Personal
PD bandings (based
\u00a0
risk
on
residual lifetime PD
PD deterioration
bands
calculated at DOIR)
threshold criteria
A
<0.762%
PD@DOIR + 1%
B
<4.306%
PD@DOIR + 3%
C
>=4.306%
1.7 x PD@DOIR
\n
\u2022
Qualitative high-risk backstop assessment
\u2013 supplements the PD assessment to
evaluate whether signi\ufb01cant deterioration
in lifetime risk of default occurred. This
included the mandatory 30+ days past
due backstop, as prescribed by IFRS 9
guidance, as well as other elements such
as forbearance support, Non-Personal
exposures managed within the Wholesale
Problem Debt Management framework,
and adverse credit bureau results for
Personal customers.
\u2022
Persistence (Personal and small and
medium-sized enterprise retail customers
only) \u2013 the persistence rule ensures that
accounts which have met the criteria for
PD driven deterioration are still considered
to be signi\ufb01cantly deteriorated for three
months thereafter. This additional rule
enhances the timeliness of capture into
Stage 2. The persistence rule is applied to
PD driven deterioration only.
Lifetime
The de\ufb01nitions of initial recognition and asset
lifetime are important considerations when
determining the amount of lifetime losses to
be applied.
\u2022
Initial recognition refers to the date that a
transaction (or account) is \ufb01rst recognised
on the balance sheet, with the PD at that
point serving as the basis for subsequent
determination of SICR, as detailed above.
\u2022
For asset lifetime, the approach is aligned
with IFRS 9 requirements:
o
Term lending \u2013 the contractual
maturity date is used and adjusted
for behavioural trends where
applicable, such as expected
prepayment and amortisation.
o
Revolving facilities \u2013 for Personal
portfolios (excluding credit cards),
asset duration is determined by
behavioural life, which was typically
greater than contractual life. For the
Non-Personal portfolios, asset
duration is based on annual
customer review schedules.
Governance
The IFRS 9 PD, EAD and LGD models are
subject to NatWest Group\u2019s model risk policy,
which stipulates periodic model monitoring
and, re-validation and de\ufb01nes approval
procedures and authorities according to
model materiality. Post model adjustments are
applied where management deemed them
necessary to ensure an adequate level of
overall ECL provision. All post model
adjustments undergo review, challenge and
approval by the relevant model or provisioning
committees.
Post model adjustments will remain a key
focus area of NatWest Group\u2019s ongoing ECL
adequacy assessment process. A
comprehensive framework has been
established that incorporates analysis of
diverse economic data, external benchmarks
and portfolio performance trends with a
particular focus on segments (across both
Personal and Non-Personal portfolios) that
may be more susceptible to speci\ufb01c risk
factors.
Measurement uncertainty and ECL
sensitivity analysis (audited)
The recognition and measurement of ECL is
complex and requires signi\ufb01cant judgement
and estimation, especially during times of
economic volatility and uncertainty. This
includes the formulation and incorporation of
multiple forward-looking economic conditions
into ECL to meet the measurement objectives
of IFRS 9. The ECL provision is sensitive to the
model inputs and economic assumptions used
in the estimation.
Simulations were conducted to assess the
impact of various economic scenarios,
including base case, upside, downside and
extreme downside scenarios. The potential
ECL impacts re\ufb02ected the simulated impact as
at 31 December 2025. In the simulations,
NatWest Group assumed that the economic
macro variables associated with each
scenario would replace the existing base case
economic assumptions, giving them a 100%
probability weighting and therefore serving as
a single economic scenario. These scenarios
were applied to all modelled portfolios in the
table, with the simulation affecting both PDs
and LGDs. Post model adjustments included in
the ECL estimates were adjusted in line with
the modelled ECL movements. However,
adjustments that were judgemental in nature,
such as those for deferred model calibrations
and economic uncertainty, were not
automatically recalculated. Instead, they will
be re-evaluated by management through ECL
governance for any new economic scenario
outlook.
As expected, the scenarios created varying
impacts on ECL by portfolio, and these
impacts were deemed reasonable. The
simulations assumed that existing modelled
relationships between key economic variables
and drivers would hold. However, in practice,
other factors such as potential changes in
customer behaviour and policy changes could
also impact the wider availability of credit.
The focus of the simulations was on ECL
provisioning requirements for performing
exposures in Stage 1 and Stage 2. The
simulations were run on a stand-alone basis
and were independent of each other. Scenario
impacts on SICR were considered when
evaluating the ECL movements of Stage 1
and Stage 2. In all scenarios, the total
exposure remained the same, but exposure
by stage varied.
Stage 3 provisions are not subject to the same
level of measurement uncertainty, as default is
an observed event as at the balance sheet
date and defaulted LGD is typically more
impacted by borrower speci\ufb01c factors rather
than economics. Therefore, Stage 3 provisions
were not considered in this analysis. NatWest
Group\u2019s core criterion for identifying a SICR is
based on PD deterioration. Under the
simulations, changes in PDs resulted in
exposures moving between Stage 1 and
Stage 2, contributing to the ECL impact.
\n\n
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 modelled loans (\u00a3m)
Retail Banking - mortgages
181,869
182,357
183,665
181,119
176,988
Retail Banking - unsecured
12,761
12,858
13,232
12,601
11,683
Non-Personal - property
31,809
31,924
31,995
31,764
23,027
Non-Personal - non-property
141,924
142,660
142,972
141,841
118,828
368,363
369,799
371,864
367,325
330,526
Stage 1 modelled ECL (\u00a3m)
Retail Banking - mortgages
42
42
41
42
43
Retail Banking - unsecured
293
300
288
291
278
Non-Personal - property
66
46
38
71
148
Non-Personal - non-property
189
156
144
202
353
590
544
511
606
822
Stage 1 coverage (%)
Retail Banking - mortgages
0.02%
0.02%
0.02%
0.02%
0.02%
Retail Banking - unsecured
2.30%
2.33%
2.18%
2.31%
2.38%
Non-Personal - property
0.21%
0.14%
0.12%
0.22%
0.64%
Non-Personal - non-property
0.13%
0.11%
0.10%
0.14%
0.30%
0.16%
0.15%
0.14%
0.16%
0.25%
Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
15,821
15,333
14,025
16,571
20,702
Retail Banking - unsecured
3,621
3,524
3,150
3,781
4,699
Non-Personal - property
3,072
2,957
2,886
3,117
11,854
Non-Personal - non-property
15,721
14,985
14,673
15,804
38,817
38,235
36,799
34,734
39,273
76,072
Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
36
33
29
38
55
Retail Banking - unsecured
388
378
326
408
516
Non-Personal - property
55
47
42
59
351
Non-Personal - non-property
305
263
242
317
880
784
721
639
822
1,802
Stage 2 coverage (%)
Retail Banking - mortgages
0.23%
0.22%
0.21%
0.23%
0.27%
Retail Banking - unsecured
10.72%
10.73%
10.35%
10.79%
10.98%
Non-Personal - property
1.79%
1.59%
1.46%
1.89%
2.96%
Non-Personal - non-property
1.94%
1.76%
1.65%
2.01%
2.27%
2.05%
1.96%
1.84%
2.09%
2.37%
\n
For the notes to this table refer to the following page.
\n\n
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 and Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
197,690
197,690
197,690
197,690
197,690
Retail Banking - unsecured
16,382
16,382
16,382
16,382
16,382
Non-Personal - property
34,881
34,881
34,881
34,881
34,881
Non-Personal - non-property
157,645
157,645
157,645
157,645
157,645
406,598
406,598
406,598
406,598
406,598
Stage 1 and Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
78
75
70
80
98
Retail Banking - unsecured
681
678
614
699
794
Non-Personal - property
121
93
80
130
499
Non-Personal - non-property
494
419
386
519
1,233
1,374
1,265
1,150
1,428
2,624
Stage 1 and Stage 2 coverage (%)
Retail Banking - mortgages
0.04%
0.04%
0.04%
0.04%
0.05%
Retail Banking - unsecured
4.16%
4.14%
3.75%
4.27%
4.85%
Non-Personal - property
0.35%
0.27%
0.23%
0.37%
1.43%
Non-Personal - non-property
0.31%
0.27%
0.24%
0.33%
0.78%
0.34%
0.31%
0.28%
0.35%
0.65%
Reconciliation to Stage 1 and Stage 2
ECL (\u00a3m)
ECL on modelled exposures
1,374
1,265
1,150
1,428
2,624
ECL on non-modelled exposures
36
36
36
36
36
Total Stage 1 and Stage 2 ECL (\u00a3m)
1,410
1,301
1,186
1,464
2,660
Variance to actual total Stage 1 and
Stage 2 ECL (\u00a3m)
-
(109)
(224)
54
1,250
Reconciliation to Stage 1 and Stage 2
flow exposures (\u00a3m)
Modelled loans
406,598
406,598
406,598
406,598
406,598
Non-modelled loans
19,264
19,264
19,264
19,264
19,264
Other asset classes
160,130
160,130
160,130
160,130
160,130
\n
(1)
Reflects ECL for all modelled exposure in scope for IFRS 9. The analysis
\n
excludes non-modelled portfolios and exposure relating to bonds and cash.
\n
(2)
All simulations are run on a stand-alone basis and are independent of each
\n
other, with the potential ECL impact reflecting the simulated impact as at 31
\n
December 2025. The simulations change the composition of Stage 1 and
\n
Stage 2 exposure but total exposure was unchanged under each scenario as
\n
the loan population was static.
\n
(3)
Refer to the Economic drivers section for details of economic scenarios.
\n
(4)
Refer to the NatWest Group 2024 Annual Report and Accounts for 2024
\n
comparatives.
\n
\u2022
If the economics were as negative as observed in the extreme downside (i.e. 100% probability weighting), total Stage 1 and Stage 2 ECL was simulated to increase by \u00a31.3 billion (approximately
\n
90%). In this scenario, Stage 2 exposure increased signi\ufb01cantly and was the key driver of the simulated ECL rise. The movement in Stage 2 balances in the other simulations was less signi\ufb01cant.
\n
\u2022
In the Non-Personal portfolio, there was a signi\ufb01cant increase in ECL under the extreme downside scenario on non-property portfolios, driven by a signi\ufb01cant deterioration in the stock index.
\n
\u2022
Given the continued economic uncertainty, NatWest Group utilised a framework of quantitative and qualitative measures to support the levels of ECL coverage. This included economic data, credit
\n
performance insights and problem debt trends. This was particularly important for consideration of post model adjustments.
ECL post model adjustments (audited)
The table below shows ECL post model adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0
Private Banking
\u00a0 \u00a0
\u00a0
Retail Banking
& Wealth
Commercial
\u00a0
\u00a0
Mortgages
Other
Management
& Institutional
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Deferred model calibrations
-
-
1
14
15
Economic uncertainty
44
42
11
149
246
Other adjustments
-
19
-
16
35
Total
44
61
12
179
296
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
33
38
4
73
148
- Stage 2
11
20
8
106
145
- Stage 3
-
3
-
-
3
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Deferred model calibrations
-
-
1
18
19
Economic uncertainty
90
22
8
179
299
Other adjustments
-
-
-
18
18
Total
90
22
9
215
336
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
58
9
5
94
166
- Stage 2
26
13
4
119
162
- Stage 3
6
-
-
2
8
\n
Post model adjustments reduced since 31 December 2024, re\ufb02ecting the removal of COVID-19 post model adjustments combined with updates to parameters.
\u2022
Retail Banking
\u2013 As
at
31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a386 million (2024 \u2013 \u00a3112 million).
This reduction was driven by a revision to the
cost of
living
post model adjustment, standing at \u00a386 million (2024 \u2013 \u00a3105 million), and was the sole remaining
economic uncertainty
post model adjustment.
This change was based on a review
of back-
testing. Despite ongoing economic and geopolitical uncertainty, the Retail Banking portfolios
demonstrated
resilience, supported by a robust risk appetite. The
cost of living
post model adjustment
continued to address the risk in segments of the Retail Banking portfolio that were more susceptible to affordability challenges. It focused on key affordability factors, including over-indebted
borrowers, poor credit card affordability status and lower income customers in fuel poverty.
\u2022
A \u00a319 million post model adjustment was recognised as a judgemental measure while additional loss data is accumulated on the recently migrated Sainsbury\u2019s Bank lending portfolio.
\u2022
Commercial & Institutional
\u2013 As at 31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a3149 million (2024 \u2013 \u00a3179 million). The reduction was driven by the
retirement of COVID-19 post model adjustments which were associated with government scheme lending (2024 \u2013 \u00a329 million). The continued economic uncertainty post model adjustments
re\ufb02ected downgrades to risk pro\ufb01le that were applied to the sectors that were considered most at risk from the current economic and geopolitical headwinds.
\u2022
The remaining \u00a330 million (2024 \u2013 \u00a336 million) of post model adjustments were for deferred model calibrations relating to re\ufb01nance risk and to mitigate the effect of operational timing delays in the
identi\ufb01cation and \ufb02agging of a signi\ufb01cant increase in credit risk.
Credit risk - Banking activities
Introduction
This section details the credit risk pro\ufb01le of NatWest Group\u2019s banking activities. Refer to Accounting policy 2.3 and Note 14 to the consolidated \ufb01nancial statements for policies and critical judgements
relating to impairment loss determination.
Financial instruments within the scope of the IFRS 9 ECL framework (audited)
Refer to Note 9 to the consolidated \ufb01nancial statements for balance sheet analysis of \ufb01nancial assets that are classi\ufb01ed as amortised cost or fair value through other comprehensive income (FVOCI),
the starting point for IFRS 9 ECL framework assessment.
\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
31 December 2025
31 December 2024
\u00a0
Gross
ECL
Net
Gross
ECL
Net
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Balance sheet total gross amortised cost and FVOCI
593.9
\u00a0 \u00a0
567.2
\u00a0 \u00a0
In scope of IFRS 9 ECL framework
592.4
\u00a0 \u00a0
564.4
\u00a0 \u00a0
% in scope
100%
\u00a0 \u00a0
100%
\u00a0 \u00a0
Loans to customers - in scope - amortised cost
422.9
3.6
419.3
404.2
3.4
400.8
Loans to customers - in scope - FVOCI
0.2
-
0.2
-
-
-
Loans to banks - in scope - amortised cost
6.8
-
6.8
6.0
-
6.0
Total loans - in scope
429.9
3.6
426.3
410.2
3.4
406.8
Stage 1
386.6
0.6
386.0
363.8
0.6
363.2
Stage 2
38.6
0.8
37.8
40.5
0.8
39.7
Stage 3
4.7
2.2
2.5
5.9
2.0
3.9
Other financial assets - in scope - amortised cost
120.7
-
120.7
116.4
-
116.4
Other financial assets - in scope - FVOCI
41.8
-
41.8
37.8
-
37.8
Total other financial assets - in scope
162.5
-
162.5
154.2
-
154.2
Stage 1
161.5
-
161.5
153.4
-
153.4
Stage 2
1.0
-
1.0
0.8
-
0.8
Out of scope of IFRS 9 ECL framework
1.5
na
1.5
2.8
na
2.8
Loans to customers - out of scope - amortised cost
(0.6)
na
(0.6)
(0.5)
na
(0.5)
Loans to banks - out of scope - amortised cost
0.2
na
0.2
0.1
na
0.1
Other financial assets - out of scope - amortised cost
1.7
na
1.7
3.2
na
3.2
Other financial assets - out of scope - FVOCI
0.2
na
0.2
-
na
-
na = not applicable
The assets outside the scope of IFRS 9 ECL framework were as follows:
\u2022
Settlement balances, items in the course of collection, cash balances and other non-credit risk assets of \u00a31.8 billion (2024 \u2013 \u00a33.3 billion). These were assessed as having no ECL unless there was
evidence that they were defaulted.
\u2022
Equity shares of \u00a30.1 billion (2024 \u2013 \u00a30.2 billion) as not within the IFRS 9 ECL framework by de\ufb01nition.
\u2022
Fair value adjustments on loans hedged by interest rate swaps, where the underlying loan was within the IFRS 9 ECL scope of \u00a3(0.3) billion (2024 \u2013 \u00a3(0.5) billion).
Contingent liabilities and commitments
Total
contingent liabilities (including \ufb01nancial guarantees) and commitments within IFRS 9 ECL scope of \u00a3147.2 billion (2024 \u2013 \u00a3140.0 billion) comprised Stage 1 \u00a3135.8 billion (2024 \u2013 \u00a3129.8 billion);
Stage 2 \u00a310.8 billion (2024 \u2013 \u00a39.4 billion); and Stage 3 \u00a30.6 billion (2024 \u2013 \u00a30.8 billion). The ECL relating to off-balance sheet exposures was \u00a30.1 billion (2024 \u2013 \u00a30.1 billion). The total ECL in the
remainder of the Credit risk section of \u00a33.6 billion (2024 \u2013 \u00a33.4 billion) included ECL for both on and off-balance sheet exposures.
\n\n
Segment analysis \u2013 portfolio summary (audited)
\n
The table below shows gross loans and ECL, by segment and stage, within the scope of the IFRS 9 ECL framework.
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
196,325
17,552
138,769
34,005
386,651
196,325
14,140
2,355
84
3,412
136,414
33,921
Stage 2
19,113
1,115
18,289
65
38,582
19,113
337
32
18
778
18,257
47
Stage 3
2,231
348
2,102
2
4,683
2,231
260
44
2
88
2,058
-
Of which: individual
-
276
1,180
-
1,456
-
188
5
-
88
1,175
-
Of which: collective
2,231
72
922
2
3,227
2,231
72
39
2
-
883
-
Total
217,669
19,015
159,160
34,072
429,916
217,669
14,737
2,431
104
4,278
156,729
33,968
ECL provisions
(3)
Stage 1
335
13
256
10
614
335
3
1
3
10
255
7
Stage 2
424
13
357
2
796
424
1
-
1
12
357
1
Stage 3
1,075
50
1,048
2
2,175
1,075
24
11
2
26
1,037
-
Of which: individual
-
50
548
-
598
-
24
5
-
26
543
-
Of which: collective
1,075
-
500
2
1,577
1,075
-
6
2
-
494
-
Total
1,834
76
1,661
14
3,585
1,834
28
12
6
48
1,649
8
ECL provisions coverage
(4)
Stage 1 (%)
0.17
0.07
0.18
0.03
0.16
0.17
0.02
0.04
3.57
0.29
0.19
0.02
Stage 2 (%)
2.22
1.17
1.95
3.08
2.06
2.22
0.30
-
5.56
1.54
1.96
2.13
Stage 3 (%)
48.18
14.37
49.86
100.00
46.44
48.18
9.23
25.00
100.00
29.55
50.39
-
Total
0.84
0.40
1.04
0.04
0.83
0.84
0.19
0.49
5.77
1.12
1.05
0.02
Impairment (releases)/losses
ECL (release)/charge
(5)
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Stage 1
(67)
(9)
(124)
(4)
(204)
(67)
(1)
(1)
4
(8)
(123)
(8)
Stage 2
295
9
116
1
421
295
2
1
1
7
115
-
Stage 3
209
10
233
2
454
209
4
1
2
6
232
-
Of which: individual
-
10
178
-
188
-
4
-
-
6
178
-
Of which: collective
209
-
55
2
266
209
-
1
2
-
54
-
Total
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Amounts written-off
373
1
205
-
579
373
1
6
-
-
199
-
Of which: individual
-
1
136
-
137
-
1
-
-
-
136
-
Of which: collective
373
-
69
-
442
373
-
6
-
-
63
-
\n
For the notes to this table refer to the following page.
\n\n
Segment analysis \u2013 portfolio summary (audited)
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
182,366
17,155
128,988
35,312
363,821
182,366
13,726
2,226
-
3,429
126,762
35,312
Stage 2
24,242
844
15,339
49
40,474
24,242
352
42
-
492
15,297
49
Stage 3
3,268
322
2,340
-
5,930
3,268
251
52
-
71
2,288
-
Of which: individual
-
233
1,052
-
1,285
-
162
5
-
71
1,047
-
Of which: collective
3,268
89
1,288
-
4,645
3,268
89
47
-
-
1,241
-
Total
209,876
18,321
146,667
35,361
410,225
209,876
14,329
2,320
-
3,992
144,347
35,361
ECL provisions
(3)
Stage 1
279
16
289
14
598
279
2
3
-
14
286
14
Stage 2
428
12
346
1
787
428
1
-
-
11
346
1
Stage 3
1,063
36
941
-
2,040
1,063
21
15
-
15
926
-
Of which: individual
-
36
415
-
451
-
21
7
-
15
408
-
Of which: collective
1,063
-
526
-
1,589
1,063
-
8
-
-
518
-
Total
1,770
64
1,576
15
3,425
1,770
24
18
-
40
1,558
15
ECL provisions coverage
(4)
Stage 1 (%)
0.15
0.09
0.22
0.04
0.16
0.15
0.01
0.13
-
0.41
0.23
0.04
Stage 2 (%)
1.77
1.42
2.26
2.04
1.94
1.77
0.28
-
-
2.24
2.26
2.04
Stage 3 (%)
32.53
11.18
40.21
-
34.40
32.53
8.37
28.85
-
21.13
40.47
-
Total
0.84
0.35
1.07
0.04
0.83
0.84
0.17
0.78
-
1.00
1.08
0.04
Impairment (releases)/losses
ECL (release)/charge
(5)
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Stage 1
(208)
(11)
(205)
(14)
(438)
(208)
(2)
(1)
-
(9)
(204)
(14)
Stage 2
278
(1)
79
4
360
278
2
1
-
(3)
78
4
Stage 3
212
1
224
-
437
212
1
1
-
-
223
-
Of which: individual
-
1
191
-
192
-
1
(1)
-
-
192
-
Of which: collective
212
-
33
-
245
212
-
2
-
-
31
-
Total
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Amounts written-off
430
1
223
-
654
430
1
2
-
-
221
-
Of which: individual
-
1
143
-
144
-
1
-
-
-
143
-
Of which: collective
430
-
80
-
510
430
-
2
-
-
78
-
\n
(1)
The table shows gross loans only and excludes amounts that were outside the scope of the ECL framework. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 \u2013 \u00a34 million) related to assets classified as FVOCI and \u00a30.1 billion (2024 \u2013 \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions, including ECL for other non-loan assets and unutilised exposure, divided by loans \u2013 amortised cost and FVOCI. Some segments with a high proportion of debt securities or unutilised exposure may result in a not meaningful (nm) coverage
\n
ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets classified as FVOCI and includes a \u00a33 million charge (2024 - \u00a35 million release) related to contingent liabilities.
\n\n
Segmental loans and impairment metrics (audited)
\n
\u2022
Retail Banking
\u2013 Balance sheet growth during the year was mainly due to mortgages.
\n
Within the Unsecured portfolios, alongside organic growth in the credit cards and personal
\n
loans portfolios, the acquisition of the Sainsbury\u2019s Bank portfolios further contributed to the
\n
balance sheet growth. Asset quality was maintained during the year, re\ufb02ecting ongoing
\n
customer resilience and robust risk appetite. Alongside steady portfolio performance, good
\n
book and total ECL coverage for Retail Banking remained broadly consistent with 31
\n
December 2024. Underlying ECL coverage increased due to growth in unsecured lending,
\n
including the acquisition of the Sainsbury\u2019s Bank portfolio earlier in 2025, but this was offset
\n
by balance sheet management actions, including a mortgage securitisation transaction and
\n
unsecured debt sales. The proportion of Stage 3 loans declined over the year, mainly as a
\n
result of the balance sheet management actions described above, notably the mortgage
\n
securitisation, which reduced Stage 3 loans by \u00a30.8 billion. Furthermore, there was an
\n
enhancement to the mortgage de\ufb01nition of default systems and process, resulting in
\n
approximately \u00a30.4 billion of loans migrating from Stage 3 back to the good book. While
\n
default performance was broadly stable overall, unsecured \ufb02ows into Stage 3 increased
\n
year-on-year, driven by strategic growth and seasoning of credit card balances since 2022.
\n
\u2022
Commercial & Institutional
\u2013 Balance sheet growth in the year was primarily in corporates
\n
and institutions and was re\ufb02ected in Stage 1. Despite the increase in performing book
\n
exposures, performing book provisions decreased, driven by reductions in post model
\n
adjustments for economic uncertainty. Total provision balance growth primarily re\ufb02ected
\n
the impact of a small number of individual charges in Stage 3. Despite the increase in
\n
Stage 3 ECL, loan balances \ufb02owing into Stage 3 were lower than the prior year. The
\n
combination of increased Stage 3 charges combined with lower in\ufb02ows into Stage 3 drove
\n
the increase in Stage 3 ECL provisions coverage. Total book coverage remained broadly
\n
similar year-on-year, as the increase in Stage 3 ECL provisions coverage was more than
\n
offset by reductions in performing book coverage. The full year 2025 total charge was
\n
higher compared to 2024, primarily as the good book release in 2025 was notably lower
\n
than the release in 2024. The lower release in 2025 re\ufb02ected lower reductions in post
\n
model adjustments compared to 2024.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows \ufb01nancial assets and off-balance sheet exposures gross of ECL and related ECL provisions, impairment and past due by sector, asset quality and geographical region.
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- UK
215,220
8,311
11,401
234,932
101,441
45,700
1,477
148,618
383,550
- Other Europe
9
-
-
9
7,010
14,059
351
21,420
21,429
- RoW
-
-
-
-
9,778
14,697
462
24,937
24,937
Loans by stage
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Stage 1
197,939
5,988
8,977
212,904
97,779
73,959
2,009
173,747
386,651
- Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Stage 3
1,339
242
956
2,537
1,990
141
15
2,146
4,683
- Of which: individual
167
1
25
193
1,112
136
15
1,263
1,456
- Of which: collective
1,172
241
931
2,344
878
5
-
883
3,227
Loans - past due analysis
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Not past due
212,492
7,993
10,388
230,873
114,895
74,257
2,275
191,427
422,300
- Past due 1-30 days
1,510
71
92
1,673
2,261
137
-
2,398
4,071
- Past due 31-90 days
469
86
130
685
274
8
-
282
967
- Past due 91-180 days
275
62
104
441
110
6
-
116
557
- Past due >180 days
483
99
687
1,269
689
48
15
752
2,021
Loans - Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Not past due
14,521
1,979
1,335
17,835
17,605
343
266
18,214
36,049
- Past due 1-30 days
1,138
41
48
1,227
610
5
-
615
1,842
- Past due 31-90 days
292
61
85
438
245
8
-
253
691
Weighted average life
(2)
- ECL measurement (years)
9
4
6
5
7
4
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.46
3.68
5.05
0.77
1.18
0.14
5.40
0.83
0.80
- Basel (%)
0.62
3.91
3.52
0.85
1.04
0.15
5.40
0.75
0.80
ECL provisions by geography
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- UK
270
520
1,088
1,878
1,367
103
5
1,475
3,353
- Other Europe
2
-
-
2
104
10
1
115
117
- RoW
-
-
-
-
61
42
12
115
115
\n
For the notes to this table refer to page 207.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages
(1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- Stage 1
45
125
172
342
228
37
7
272
614
- Stage 2
36
205
185
426
360
5
5
370
796
- Stage 3
191
190
731
1,112
944
113
6
1,063
2,175
- Of which: individual
16
1
12
29
453
110
6
569
598
- Of which: collective
175
189
719
1,083
491
3
-
494
1,577
ECL provisions coverage (%)
0.13
6.26
9.54
0.80
1.30
0.21
0.79
0.87
0.83
- Stage 1 (%)
0.02
2.09
1.92
0.16
0.23
0.05
0.35
0.16
0.16
- Stage 2 (%)
0.23
9.85
12.60
2.18
1.95
1.40
1.88
1.94
2.06
- Stage 3 (%)
14.26
78.51
76.46
43.83
47.44
80.14
40.00
49.53
46.44
ECL (release)/charge
(142)
263
329
450
168
56
(3)
221
671
- UK
(144)
263
329
448
148
60
(6)
202
650
- Other Europe
2
-
-
2
18
1
-
19
21
- RoW
-
-
-
-
2
(5)
3
-
-
Amounts written-off
92
118
170
380
199
-
-
199
579
Loans by residual maturity
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- \u22641 year
2,764
1,856
2,736
7,356
33,768
52,130
1,765
87,663
95,019
- >1 and \u22645 year
8,332
6,452
6,898
21,682
51,723
18,262
77
70,062
91,744
- > 5 and \u2264 15 year
42,759
3
1,772
44,534
24,136
4,016
290
28,442
72,976
- > 15 year
161,374
-
(5)
161,369
8,602
48
158
8,808
170,177
Other financial assets by asset quality
(3)
-
-
-
-
4,513
28,490
129,532
162,535
162,535
- AQ1-AQ4
-
-
-
-
4,506
28,301
129,532
162,339
162,339
- AQ5-AQ8
-
-
-
-
7
189
-
196
196
Off-balance sheet
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- Loan commitments
14,799
22,696
7,514
45,009
75,723
21,555
501
97,779
142,788
- Contingent liabilities
-
-
36
36
2,881
1,476
-
4,357
4,393
Off-balance sheet by asset quality
(3)
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- AQ1-AQ4
13,926
415
6,140
20,481
50,709
21,030
114
71,853
92,334
- AQ5-AQ8
859
22,205
1,283
24,347
27,525
1,924
12
29,461
53,808
- AQ9
4
11
12
27
61
-
375
436
463
- AQ10
10
65
115
190
309
77
-
386
576
\n
For the notes to this table refer to page 207.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- UK
209,846
6,930
9,749
226,525
97,409
43,412
562
141,383
367,908
- Other Europe
-
-
-
-
6,311
14,747
766
21,824
21,824
- RoW
-
-
-
-
8,014
12,162
317
20,493
20,493
Loans by stage
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Stage 1
186,250
4,801
7,267
198,318
94,991
69,021
1,491
165,503
363,821
- Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Stage 3
2,535
176
860
3,571
2,279
59
21
2,359
5,930
- Of which: individual
141
-
26
167
1,046
51
21
1,118
1,285
- Of which: collective
2,394
176
834
3,404
1,233
8
-
1,241
4,645
Loans - past due analysis
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Not past due
206,739
6,721
8,865
222,325
107,855
70,055
1,627
179,537
401,862
- Past due 1-30 days
1,404
50
70
1,524
2,530
211
-
2,741
4,265
- Past due 31-90 days
580
51
99
730
398
2
18
418
1,148
- Past due 91-180 days
408
41
96
545
139
49
-
188
733
- Past due >180 days
715
67
619
1,401
812
4
-
816
2,217
Loans - Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Not past due
19,939
1,889
1,521
23,349
13,485
1,228
133
14,846
38,195
- Past due 1-30 days
853
31
37
921
640
11
-
651
1,572
- Past due 31-90 days
269
33
64
366
339
2
-
341
707
Weighted average life
(2)
- ECL measurement (years)
8
4
6
6
6
2
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.51
3.23
4.59
0.76
1.24
0.16
5.51
0.86
0.80
- Basel (%)
0.68
3.65
3.18
0.87
1.11
0.15
4.16
0.76
0.82
ECL provisions by geography
462
381
969
1,812
1,504
90
19
1,613
3,425
- UK
462
381
969
1,812
1,335
37
12
1,384
3,196
- Other Europe
-
-
-
-
109
9
-
118
118
- RoW
-
-
-
-
60
44
7
111
111
\n
For the notes to this table refer to the following page.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
462
381
969
1,812
1,504
90
19
1,613
3,425
- Stage 1
77
77
130
284
264
38
12
314
598
- Stage 2
60
186
183
429
344
12
2
358
787
- Stage 3
325
118
656
1,099
896
40
5
941
2,040
- Of which: individual
11
-
17
28
382
36
5
423
451
- Of which: collective
314
118
639
1,071
514
4
-
518
1,589
ECL provisions coverage (%)
0.22
5.50
9.94
0.80
1.35
0.13
1.16
0.88
0.83
- Stage 1 (%)
0.04
1.60
1.79
0.14
0.28
0.06
0.80
0.19
0.16
- Stage 2 (%)
0.28
9.52
11.28
1.74
2.38
0.97
1.50
2.26
1.94
- Stage 3 (%)
12.82
67.05
76.28
30.78
39.32
67.80
23.81
39.89
34.40
ECL (release)/charge
8
115
161
284
55
19
1
75
359
- UK
8
115
161
284
43
1
-
44
328
- Other Europe
-
-
-
-
17
(7)
-
10
10
- RoW
-
-
-
-
(5)
25
1
21
21
Amounts written-off
18
102
313
433
221
-
-
221
654
Loans by residual maturity
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- \u22641 year
3,367
3,903
3,186
10,456
34,929
54,971
822
90,722
101,178
- >1 and \u22645 year
11,651
3,027
5,551
20,229
48,075
10,967
488
59,530
79,759
- > 5 and \u2264 15 year
45,454
-
1,006
46,460
20,623
4,270
298
25,191
71,651
- > 15 year
149,374
-
6
149,380
8,107
113
37
8,257
157,637
Other financial assets by asset quality
(3)
-
-
-
-
3,644
31,102
119,502
154,248
154,248
- AQ1-AQ4
-
-
-
-
3,639
30,743
119,502
153,884
153,884
- AQ5-AQ8
-
-
-
-
5
359
-
364
364
Off-balance sheet
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- Loan commitments
13,806
20,135
7,906
41,847
72,940
20,341
239
93,520
135,367
- Contingent liabilities
-
-
41
41
3,024
1,584
-
4,608
4,649
Off-balance sheet by asset quality
(3)
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- AQ1-AQ4
12,951
510
6,568
20,029
47,896
20,063
155
68,114
88,143
- AQ5-AQ8
839
19,276
1,336
21,451
27,657
1,813
21
29,491
50,942
- AQ9
1
12
17
30
19
-
63
82
112
- AQ10
15
337
26
378
392
49
-
441
819
\n
(1)
Includes a portion of Private Banking & Wealth Management lending secured against residential real estate, in line with ECL calculation methodology. Private Banking & Wealth Management and RBS International mortgages are reported in the UK, reflecting the country of lending origination and
\n
includes crown dependencies.
\n
(2)
Not within the scope of the Independent auditors\u2019 report.
\n
(3)
AQ bandings are based on Basel PDs and mapping is as follows:
\n\n \n
Internal asset quality band
Probability of default range
Indicative S&P rating
Internal asset quality band
Probability of default range
Indicative S&P rating
AQ1
0% - 0.034%
AAA to AA
AQ6
1.076% - 2.153%
BB- to B+
AQ2
0.034% - 0.048%
AA to AA-
AQ7
2.153% - 6.089%
B+ to B
AQ3
0.048% - 0.095%
A+ to A
AQ8
6.089% - 17.222%
B- to CCC+
AQ4
0.095% - 0.381%
BBB+ to BBB-
AQ9
17.222% - 100%
CCC to C
AQ5
0.381% - 1.076%
BB+ to BB
AQ10
100%
D
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows ECL by stage, for the Personal portfolio and Non-Personal portfolio, including the three largest borrowing sector clusters included in corporate and other.
\n\n \n
Loans - amortised cost and FVOCI
Off-balance sheet
ECL provisions
Stage 1
Stage 2
Stage 3
Total
Loan commitments
Contingent liabilities
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
212,904
19,500
2,537
234,941
45,009
36
342
426
1,112
1,880
Mortgages
(1)
197,939
15,951
1,339
215,229
14,799
-
45
36
191
272
Credit cards
5,988
2,081
242
8,311
22,696
-
125
205
190
520
Other personal
8,977
1,468
956
11,401
7,514
36
172
185
731
1,088
Non-Personal
173,747
19,082
2,146
194,975
97,779
4,357
272
370
1,063
1,705
Financial institutions
(2)
73,959
356
141
74,456
21,555
1,476
37
5
113
155
Sovereign
2,009
266
15
2,290
501
-
7
5
6
18
Corporate and other
97,779
18,460
1,990
118,229
75,723
2,881
228
360
944
1,532
Of which:
Commercial real estate
17,838
1,272
294
19,404
6,646
162
55
22
120
197
Mobility and logistics
13,021
4,312
81
17,414
10,194
520
24
45
40
109
Consumer industries
12,875
2,912
389
16,176
11,149
496
33
68
199
300
Total
386,651
38,582
4,683
429,916
142,788
4,393
614
796
2,175
3,585
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
198,318
24,636
3,571
226,525
41,847
41
284
429
1,099
1,812
Mortgages
(1)
186,250
21,061
2,535
209,846
13,806
-
77
60
325
462
Credit cards
4,801
1,953
176
6,930
20,135
-
77
186
118
381
Other personal
7,267
1,622
860
9,749
7,906
41
130
183
656
969
Non-Personal
165,503
15,838
2,359
183,700
93,520
4,608
314
358
941
1,613
Financial institutions
(2)
69,021
1,241
59
70,321
20,341
1,584
38
12
40
90
Sovereign
1,491
133
21
1,645
239
-
12
2
5
19
Corporate and other
94,991
14,464
2,279
111,734
72,940
3,024
264
344
896
1,504
Of which:
Commercial real estate
16,191
1,517
433
18,141
6,661
143
70
30
146
246
Mobility and logistics
13,363
2,384
148
15,895
9,367
595
26
35
67
128
Consumer industries
13,312
3,015
444
16,771
10,706
595
45
90
188
323
Total
363,821
40,474
5,930
410,225
135,367
4,649
598
787
2,040
3,425
\n
(1)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential mortgages portfolio had Energy Performance Certificate (EPC) data available (2024 \u2013 \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C (2024 \u2013 46.3%).
\n
(2)
Includes transactions, such as securitisations, where the underlying risk may be in other sectors.
\n\n
Non-Personal forbearance (audited)
\n
The table below shows Non-Personal forbearance, Heightened Monitoring and Risk of Credit Loss by sector. The table shows current exposure but re\ufb02ects risk transfers where there is a guarantee by
\n
another customer.
\n\n \n
Corporate and other
Financial institutions
Sovereign
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Forbearance (flow)
3,495
43
12
3,550
Forbearance (stock)
4,167
122
12
4,301
Heightened Monitoring and Risk of Credit Loss
6,115
103
2
6,220
2024
Forbearance (flow)
3,359
119
18
3,496
Forbearance (stock)
4,556
106
18
4,680
Heightened Monitoring and Risk of Credit Loss
5,931
150
1
6,082
\n
Sector analysis \u2013 portfolio summary (audited)
\n
\u2022
Loans by geography and sector
\u2013 In line with NatWest Group\u2019s strategic focus, exposures continued to be mainly in the UK.
\n
\u2022
Loans by stage
\u2013 Stage 3 balances reduced overall, with a small reduction in Non-Personal due to write-offs and lower in\ufb02ows, and a larger reduction in Personal mortgages following the
\n
securitisation transaction that removed \u00a30.8 billion of Stage 3 assets, alongside a default de\ufb01nition systems and process enhancement that moved loans back to the good book. Stage 1 balances
\n
increased across the Personal portfolios, driven by growth in mortgages and unsecured lending, including the Sainsbury\u2019s Bank portfolio acquisition. Stage 2 balances were broadly unchanged from
\n
the end of 2024, with reductions in Personal mortgages, linked to PD model enhancements and stable portfolio trends offset by increases in Non-Personal, largely driven by post model adjustment
\n
downgrades to sectors deemed most at risk of economic uncertainty.
\n
\u2022
Loans \u2013 Past due analysis
\u2013 Within the Personal portfolio, arrears balances overall decreased during 2025 mainly driven by the balance sheet management actions within the mortgage portfolio
\n
described previously. For the unsecured portfolios, arrears balances increased due to book growth and portfolio maturation. In Non-Personal, arrears balances reduced in line with Stage 3 balance
\n
reduction. The vast majority of Stage 2 balances remained up to date, as Stage 2 is normally captured through other forward-looking Stage 2 triggers.
\n
\u2022
Weighted average 12 months PDs
\u2013 Both IFRS 9 and Basel PDs remained broadly stable during the year overall, noting the reduction in Personal mortgages due to PD model enhancements and
\n
an increase in unsecured PDs driven by strategic growth and seasoning of credit card balances since 2022. Non-Personal PDs were broadly stable in the year. The higher PD in sovereigns
\n
re\ufb02ected a single entity where lending is fully guaranteed.
\n
\u2022
ECL provisions by stage and ECL provisions coverage
\u2013 Overall provisions increased from 31 December 2024, following an increase in good book ECL in the Personal portfolios, driven by the
\n
portfolio acquisition of Sainsbury\u2019s Bank and organic growth in unsecured lending, and a small number of signi\ufb01cant individual Non-Personal Stage 3 charges. Stage 3 ECL growth was partly offset
\n
by the transfer of mortgage assets to a securitisation special purpose vehicle. Provisions coverage remained consistent with 31 December 2024.
\n
\u2022
ECL charge
\u2013 The 2025 impairment charge, primarily re\ufb02ected a small number of
signi\ufb01cant
individual charges in the Non-Personal portfolio alongside the initial ECL cost from the portfolio
\n
acquisition from Sainsbury\u2019s Bank within Personal. This was partially offset by post model adjustment releases in the good book and one-off releases, notably on the de\ufb01nition of default systems
\n
and process enhancement on Personal mortgages and a mortgage securitisation. The increased charge in Non-Personal portfolio primarily re\ufb02ected lower levels of reduction in performing book
\n
post model adjustments compared to 2024.
\n
\u2022
Loans by residual maturity
\u2013 The maturity pro\ufb01le of the portfolios remained consistent with prior periods. In mortgages, as expected, the vast majority of exposures were greater than \ufb01ve years. In
\n
unsecured lending, cards and other, exposures were concentrated in less than \ufb01ve years. In Non-Personal portfolios the maturity pro\ufb01le will vary by product and sectors, but is typically less than
\n
\ufb01ve years for most exposures.
\n
\u2022
Other \ufb01nancial assets by asset quality
\u2013
These assets were cash and debt securities, and generally of high credit quality as re\ufb02ected in the AQ banding.
\n
\u2022
Off-balance sheet exposures by asset quality
\u2013 The AQ band split of off-balance sheet exposures broadly mirrored the drawn loans portfolio for non-defaulted exposures. In the Non-Personal
\n
portfolio, off-balance sheet exposures increased year-on-year, re\ufb02ecting an increase in unutilised exposure in corporates and \ufb01nancial institutions. The increase was primarily in the AQ1 to AQ4
\n
band, indicating high credit quality.
\n
\u2022
Non-Personal problem debt
\u2013 Exposures in the Wholesale Problem Debt Management framework marginally increased during 2025 due to an in\ufb02ow of corporate customers onto the framework
\n
across a range of sectors. There was no change in the reasons for customers moving onto the framework from 2024, with trading issues and cash/liquidity remaining the key
main drivers.
\n
\u2022
Non-Personal forbearance
\u2013
Exposures classi\ufb01ed as forborne reduced marginally across multiple sectors, leading to lower stock values in corporates. A portion of forbearance \ufb02ows related to cases
\n
in Customer Lending Support subject to repeated forbearance.
\n\n
Credit risk enhancement and mitigation (audited)
\n
The table below shows exposures of modelled portfolios within the scope of the ECL framework and related credit risk enhancement and mitigation (CREM).
\n\n \n
Gross
Maximum credit risk
CREM by type
CREM coverage
Exposure post CREM
exposure
ECL
Total
Stage 3
Financial (1)
Property
Other (2)
Total
Stage 3
Total
Stage 3
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
Cash and balances at central banks
84.1
-
84.1
-
-
-
-
-
-
84.1
-
Loans - amortised cost
(3)
429.9
3.5
426.4
2.5
47.9
261.0
26.0
334.9
2.1
91.5
0.4
Personal
(4)
234.9
1.9
233.0
1.4
1.4
214.5
-
215.9
1.2
17.1
0.2
Non-Personal
(5)
195.0
1.6
193.4
1.1
46.5
46.5
26.0
119.0
0.9
74.4
0.2
Debt securities
78.5
-
78.5
-
0.3
-
-
0.3
-
78.2
-
Total financial assets
592.5
3.5
589.0
2.5
48.2
261.0
26.0
335.2
2.1
253.8
0.4
Contingent liabilities and commitments
Personal
(6)
45.0
-
45.0
0.2
1.1
3.2
-
4.3
0.1
40.7
0.1
Non-Personal
102.2
0.1
102.1
0.4
4.1
7.9
5.3
17.3
0.1
84.8
0.3
Total off-balance sheet
147.2
0.1
147.1
0.6
5.2
11.1
5.3
21.6
0.2
125.5
0.4
Total exposure
739.7
3.6
736.1
3.1
53.4
272.1
31.3
356.8
2.3
379.3
0.8
2024
Financial assets
Cash and balances at central banks
91.8
-
91.8
-
-
-
-
-
-
91.8
-
Loans - amortised cost
(3)
410.2
3.3
406.9
3.9
46.3
253.0
25.5
324.8
3.4
82.1
0.5
Personal
(4)
226.5
1.8
224.7
2.5
0.8
209.1
-
209.9
2.2
14.8
0.3
Non-Personal
(5)
183.7
1.5
182.2
1.4
45.5
43.9
25.5
114.9
1.2
67.3
0.2
Debt securities
62.5
-
62.5
-
0.1
-
-
0.1
-
62.4
-
Total financial assets
564.5
3.3
561.2
3.9
46.4
253.0
25.5
324.9
3.4
236.3
0.5
Contingent liabilities and commitments
Personal
(6)
41.9
-
41.9
0.4
1.1
3.7
-
4.8
-
37.1
0.4
Non-Personal
98.1
0.1
98.0
0.4
3.1
8.2
5.1
16.4
0.1
81.6
0.3
Total off-balance sheet
140.0
0.1
139.9
0.8
4.2
11.9
5.1
21.2
0.1
118.7
0.7
Total exposure
704.5
3.4
701.1
4.7
50.6
264.9
30.6
346.1
3.5
355.0
1.2
\n
(1)
Includes cash and securities collateral.
\n
(2)
Includes guarantees, charges over trade debtors, other asset finance related physical collateral as well as the amount by which credit risk exposure is reduced through netting arrangements, mainly cash management pooling, which give NatWest Group a legal right to set off the financial asset
\n
against a financial liability due to the same counterparty. Any additional credit risk mitigation from a synthetic securitisation is not included in the table above.
\n
(3)
NatWest Group holds collateral in respect of individual loans \u2013 amortised cost to banks and customers. This collateral includes mortgages over property (both personal and commercial); charges over business assets such as plant and equipment; inventories and trade debtors; and guarantees of
\n
lending from parties other than the borrower. NatWest Group obtains collateral in the form of securities in reverse repurchase agreements. Collateral values are capped at the value of the loan.
\n
(4)
Stage 3 mortgage exposures have relatively limited uncovered exposure reflecting the security held. On unsecured credit cards and other personal borrowing, the residual uncovered amount reflects historical experience of continued cash recovery post default through ongoing engagement with
\n
customers.
\n
(5)
Stage 3 exposures post credit risk enhancement and mitigation in Non-Personal mainly represent enterprise value and the impact of written down collateral values; an individual assessment to determine ECL will consider multiple scenarios and in some instances allocate a probability weighting to a
\n
collateral value in excess of the written down value.
\n
(6)
The Personal gross exposure value includes \u00a311.4 billion (2024 \u2013 \u00a310.1 billion) in respect of pipeline mortgages where a committed offer has been made to a customer but where the funds have not yet been drawn down. When drawn down, the exposure would be covered by a security over the
\n
borrower\u2019s property.
\n\n
Personal portfolio (audited)
\n
Disclosures in the Personal portfolio section include drawn exposure (gross of provisions).
\n\n \n
2025
2024
Private Banking
Private Banking
Retail
& Wealth
Commercial &
Central items
Retail
& Wealth
Commercial &
Central items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Total
Personal lending
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Mortgages
199,972
13,038
2,210
9
215,229
194,865
12,826
2,161
-
209,852
Of which:
Owner occupied
180,323
11,644
1,508
8
193,483
176,137
11,348
1,457
-
188,942
Buy-to-let
19,649
1,394
702
1
21,746
18,728
1,478
704
-
20,910
Interest only
21,812
11,533
436
-
33,781
22,186
11,276
437
-
33,899
Mixed
(1)
9,977
76
4
-
10,057
10,384
40
8
-
10,432
ECL provisions
(2)
248
17
5
2
272
440
12
10
-
462
Other personal lending
(3)
17,696
1,699
221
95
19,711
15,045
1,301
242
-
16,588
ECL provisions
(2)
1,586
11
7
4
1,608
1,330
12
3
-
1,345
Total personal lending
217,668
14,737
2,431
104
234,940
209,910
14,127
2,403
-
226,440
Mortgage LTV ratios
- Owner occupied
57%
61%
57%
42%
57%
56%
59%
56%
-
56%
- Stage 1
57%
59%
57%
-
57%
56%
59%
55%
-
56%
- Stage 2
52%
57%
59%
32%
52%
55%
61%
56%
-
55%
- Stage 3
47%
69%
67%
56%
51%
50%
64%
74%
-
51%
- Buy-to-let
54%
62%
55%
26%
55%
53%
60%
52%
-
53%
- Stage 1
54%
60%
54%
-
55%
54%
60%
51%
-
54%
- Stage 2
52%
56%
62%
26%
52%
52%
57%
55%
-
52%
- Stage 3
51%
56%
66%
24%
53%
52%
56%
59%
-
53%
Gross new mortgage lending
34,458
1,492
313
-
36,263
26,440
1,395
257
-
28,092
Of which:
Owner occupied
32,059
1,372
229
-
33,660
25,300
1,266
183
-
26,749
- LTV > 90%
1,677
-
-
-
1,677
888
-
-
-
888
Weighted average LTV
(4)
71%
66%
61%
-
70%
70%
63%
71%
-
70%
Buy-to-let
2,399
120
84
-
2,603
1,140
129
74
-
1,343
Weighted average LTV
(4)
61%
65%
61%
-
61%
61%
62%
56%
-
61%
Interest only
2,443
1,357
54
-
3,854
1,575
1,238
42
-
2,855
Mixed
(1)
1,049
-
1
-
1,050
1,150
-
1
-
1,151
Mortgage forbearance
Forbearance flow
(5)
328
14
1
-
343
473
8
6
-
487
Forbearance stock
1,203
10
9
1
1,223
1,680
20
15
-
1,715
Current
918
2
3
-
923
1,214
9
10
-
1,233
1-3 months in arrears
110
6
-
-
116
146
9
-
-
155
>3 months in arrears
175
2
6
1
184
320
2
5
-
327
\n
(1) Includes accounts which have an interest only sub-account and a capital and interest sub-account to provide a more comprehensive view of interest only exposures.
\n
(2) Retail Banking excludes a non-material amount of lending and provisions held on relatively small legacy portfolios.
\n
(3) Comprises unsecured lending except for Private Banking & Wealth Management, which includes both secured and unsecured lending. It excludes loans that are commercial in nature.
\n
(4) New mortgage lending LTV re\ufb02ects the LTV at the time of lending.
\n
(5) Forbearance \ufb02ows only include an account once per year, although some accounts may be subject to multiple forbearance deals. Forbearance deals post default are excluded from these \ufb02ows
\n\n
Personal portfolio (audited)
\n
Mortgage LTV distribution by stage
\n
The table below shows gross mortgage lending and related ECL by LTV band for the Retail Banking portfolio.
\n\n \n
Mortgages
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
66,203
7,099
597
73,899
10
10
94.0
114.0
-
0.1
15.7
0.2
>50% and \u226470%
63,802
5,948
338
70,088
16
15
50.0
81.0
-
0.3
14.8
0.1
>70% and \u226480%
27,658
1,745
73
29,476
8
6
12.0
26.0
-
0.3
16.4
0.1
>80% and \u226490%
20,777
744
39
21,560
7
4
6.0
17.0
-
0.5
15.4
0.1
>90% and
\u2264100%
4,438
76
7
4,521
1
1
2.0
4.0
-
1.3
28.6
0.1
>100%
9
1
7
17
-
-
3
3
-
-
42.9
17.6
Total with LTVs
182,887
15,613
1,061
199,561
42
36
167
245
-
0.2
15.7
0.1
Other
406
1
4
411
2
-
1
3
0.5
-
25.0
0.7
Total
183,293
15,614
1,065
199,972
44
36
168
248
-
0.2
15.8
0.1
2024
\u226450%
64,040
8,344
1,159
73,543
21
16
153
190
-
0.2
13.2
0.3
>50% and \u226470%
61,739
7,741
855
70,335
29
23
104
156
-
0.3
12.2
0.2
>70% and \u226480%
25,022
2,361
173
27,556
13
9
22
44
0.1
0.4
12.7
0.2
>80% and \u226490%
16,718
1,769
85
18,572
9
9
13
31
0.1
0.5
15.3
0.2
>90% and
\u2264100%
4,076
512
26
4,614
2
3
5
10
-
0.6
19.2
0.2
>100%
14
4
13
31
-
-
6
6
-
-
46.2
19.4
Total with LTVs
171,609
20,731
2,311
194,651
74
60
303
437
-
0.3
13.1
0.2
Other
212
1
1
214
2
-
1
3
0.9
-
100.0
1.4
Total
171,821
20,732
2,312
194,865
76
60
304
440
-
0.3
13.1
0.2
\n
\u2022
Mortgage balances increased during 2025 with continuing organic growth. Unsecured lending grew overall, driven by continuing growth in prime quality whole of market lending and balance
\n
transfer credit card segments, as well as the acquisition of Sainsbury\u2019s Bank credit card and personal loan portfolios.
\n
\u2022
Portfolios and new business were closely monitored against agreed operating limits. These included loan-to-value ratios, buy-to-let concentrations, new-build concentrations and credit quality.
\n
Lending criteria, affordability calculations and assumptions for new lending were adjusted during the year, to maintain credit quality in line with appetite and to ensure customers are assessed fairly
\n
as economic conditions change.
\n
\u2022
LTV distribution of portfolio was broadly consistent with the prior year with an increase in balances in the 70-90% LTV bands consistent with increased new business during the year, including
\n
support for \ufb01rst time buyers.
\n
\u2022
The mortgage forbearance reported in 2025 was net of the mortgage securitisation previously mentioned, which reduced the stock by \u00a30.4 billion at the year-end.
\n\n
Personal portfolio (audited)
\n
Mortgage LTV distribution by region
\n
The table below shows gross mortgage lending by LTV band for Retail Banking, by geographical region.
\n\n \n
Flood risk (1,2)
Weighted
% of regional
% of regional
Lending at high/
\u226450%
50%\u226480%
80%\u2264100%
>100%
Total
average LTV
Other
Total
Total
lending at high
lending at very
very high risk (3)
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
\u00a3m
\u00a3m
%
risk (>60)
high risk (>80)
%
South East
13,656
19,277
5,022
1
37,956
57
3
37,959
19
3.7
1.2
4.9
Greater London
13,505
18,501
4,069
3
36,078
56
4
36,082
18
4.8
0.9
5.7
East of England
8,128
12,167
3,379
-
23,674
57
2
23,676
12
2.9
1.4
4.3
North West
7,479
8,443
2,158
2
18,082
55
1
18,083
9
2.9
2.0
4.9
South West
6,578
8,679
2,454
-
17,711
56
1
17,712
9
2.7
1.0
3.7
West Midlands
5,385
7,228
2,013
1
14,627
57
2
14,629
7
1.8
0.6
2.4
Scotland
4,868
5,821
1,498
1
12,188
55
2
12,190
6
2.5
1.3
3.8
Rest of the UK
14,300
19,448
5,488
9
39,245
57
396
39,641
20
2.8
1.9
4.7
Total
73,899
99,564
26,081
17
199,561
56
411
199,972
100
3.3
1.3
4.6
2024
South East
13,622
19,007
4,506
1
37,136
56
3
37,139
19
3.6
1.2
4.8
Greater London
13,951
18,537
3,391
2
35,881
55
3
35,884
18
4.8
0.9
5.7
East of England
7,776
11,730
3,211
2
22,719
58
1
22,720
12
2.9
1.4
4.3
North West
7,507
8,305
1,878
2
17,692
54
1
17,693
9
2.9
1.9
4.8
South West
6,577
8,455
2,055
1
17,088
56
1
17,089
9
2.6
1.0
3.6
West Midlands
5,379
6,970
1,683
1
14,033
56
1
14,034
7
1.8
0.6
2.4
Scotland
4,860
5,766
1,591
1
12,218
55
1
12,219
6
2.4
1.2
3.6
Rest of the UK
13,871
19,121
4,871
21
37,884
57
203
38,087
20
2.4
2.5
4.9
Total
73,543
97,891
23,186
31
194,651
56
214
194,865
100
3.1
1.4
4.5
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
\n
(2)
As at 31 December 2025, \u00a312.9 billion, 99%, of the Private Banking & Wealth Management mortgage portfolio had flood risk data available (2024 \u2013 \u00a312.6 billion, 98.0%). Of which, 6.2% were rated as high flood risk and 1.0% as very high flood risk
(2024 \u2013 5.4% high flood risk and 1.0% very high
\n
flood risk). 64% of the exposure is in the Greater London region.
\n
(3)
Flood risk is modelled by calculating an estimated loss for each flood source different types of flooding (fluvial, pluvial, tidal), annualised for each source and combined for a total flood score. Flood defences were considered where available. Flood scores were allocated per property based on the
\n
potential annualised loss (\u00a3) to a property dependent on the type, frequency and depth of flooding modelled across different return periods. The scoring ranged from 0 to 100, with 0 being lowest and 100 being the highest risk. A score of 61 and above was considered to be high risk and
\n
properties with a score of 81 and above were considered to be very high risk after flood mitigants were taken-into-account.
Personal portfolio (audited)
Retail Banking \ufb01xed rate mortgages by roll-off date
(1)
The table below shows gross \ufb01xed rate mortgage lending for Retail Banking, by roll-off date.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Retail Banking mortgages - gross
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
exposure
(2)
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Fixed rate roll-off
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
<=1 year
41,993
3,897
158
46,048
34,989
4,309
336
39,634
>1<= 2 years
63,366
4,978
183
68,527
44,146
5,080
418
49,644
>2 years
67,544
4,901
243
72,688
78,629
8,667
693
87,989
Total
172,903
13,776
584
187,263
157,764
18,056
1,447
177,267
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
(2)
Excluding the Metro Bank portfolio acquired during 2024
Retail Banking mortgages by Energy Performance Certi\ufb01cate (EPC) rating
(1)
The table below shows the energy ef\ufb01ciency of Retail Banking residential mortgages
(2)
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Owner occupied
Buy-to-let
Total
Owner occupied
Buy-to-let
Total
EPC rating
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
A
1,415
27
1,442
788
18
806
B
22,217
1,659
23,876
21,923
1,480
23,403
C
35,153
6,767
41,920
31,353
5,876
37,229
D
46,108
5,991
52,099
45,455
5,748
51,203
E
13,305
1,269
14,574
14,455
1,369
15,824
F
2,709
46
2,755
3,026
55
3,081
G
628
10
638
695
13
708
Unclassified
58,788
3,880
62,668
58,442
4,169
62,611
Total
180,323
19,649
199,972
176,137
18,728
194,865
\n
(1)
Not within scope of the Independent auditors\u2019 report
(2)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential
mortgages portfolio had Energy Performance Certificate (EPC) data available
(2024 - \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C
(2024 \u2013 46.3%).
\n\n
Commercial real estate (CRE)
\n
CRE LTV distribution by stage (audited)
\n
The table below shows CRE gross loans and related ECL by LTV band.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
7,324
222
26
7,572
20
5
6
31
0.3
2.3
23.1
0.4
>50% and \u226460%
4,417
144
40
4,601
15
2
6
23
0.3
1.4
15.0
0.5
>60% and \u226470%
881
21
27
929
4
1
10
15
0.5
4.8
37.0
1.6
>70% and \u2264100%
270
146
35
451
1
4
19
24
0.4
2.7
54.3
5.3
>100%
183
2
83
268
2
-
39
41
1.1
-
47.0
15.3
Total with LTVs
13,075
535
211
13,821
42
12
80
134
0.3
2.2
37.9
1.0
Total portfolio
average LTV
48%
58%
115%
49%
Other
Investment
(1)
2,745
331
36
3,112
5
4
11
20
0.2
1.2
30.6
0.6
Investment
15,820
866
247
16,933
47
16
91
154
0.3
1.8
36.8
0.9
Development and
other
(2)
2,018
406
47
2,471
8
6
29
43
0.4
1.5
61.7
1.7
Total
17,838
1,272
294
19,404
55
22
120
197
0.3
1.7
40.8
1.0
2024
\u226450%
7,334
380
48
7,762
28
6
7
41
0.4
1.6
14.6
0.5
>50% and \u226460%
3,829
169
53
4,051
19
5
9
33
0.5
3.0
17.0
0.8
>60% and \u226470%
584
198
34
816
3
5
8
16
0.5
2.5
23.5
2.0
>70% and \u2264100%
312
83
79
474
2
4
21
27
0.6
4.8
26.6
5.7
>100%
139
8
119
266
1
-
56
57
0.7
-
47.1
21.4
Total with LTVs
12,198
838
333
13,369
53
20
101
174
0.4
2.4
30.3
1.3
Total portfolio
average LTV
46%
51%
102%
48%
Other
Investment
(1)
2,132
348
41
2,521
6
6
15
27
0.3
1.7
36.6
1.1
Investment
14,330
1,186
374
15,890
59
26
116
201
0.4
2.2
31.0
1.3
Development and
other
(2)
1,861
331
59
2,251
11
4
30
45
0.6
1.2
50.8
2.0
Total
16,191
1,517
433
18,141
70
30
146
246
0.4
2.0
33.7
1.4
\n
(1)
Relates mainly to business banking and unsecured corporate lending.
\n
(2)
Relates to the development of commercial and residential properties, along
\n
with CRE activities that are not strictly investment or development. LTV is not
\n
a meaningful measure for this type of lending activity.
\n
\u2022
Overall \u2013 The majority of the CRE portfolio was located and managed in the UK. Business appetite and strategy was aligned across NatWest Group.
\n
\u2022
2025 trends \u2013 There was strong growth in the residential and retail sector, with other CRE sectors remaining broadly \ufb02at. LTV pro\ufb01le remained stable.
\n
\u2022
Credit quality \u2013 Credit quality improved, with marginally fewer exposures in the Wholesale Problem Debt Management framework.
\n
\u2022
Risk appetite \u2013 Lending appetite is subject to regular review and implemented at sub-sector level. Overall appetite slightly increased over the year supported by the view that cyclical risks are
\n
currently at a lower level.
Flow statements (audited)
The \ufb02ow statements that follow show the main ECL and related income statement movements. They also show the changes in ECL as well as the changes in related \ufb01nancial assets used in
determining ECL. Due to differences in scope, exposures may differ from
those reported in other tables, principally in relation to exposures in Stage 1 and Stage 2. These differences do not have a
material ECL effect. Other points to note:
\u2022
Financial assets include treasury liquidity portfolios, comprising balances at central banks and debt securities, as well as loans. Both modelled and non-modelled portfolios are included.
\u2022
Stage transfers (for example, exposures moving from Stage 1 into Stage 2) are a key feature of the ECL movements, with the net re-measurement cost of transitioning to a worse stage being a
primary driver of income statement charges. Similarly, there is an ECL bene\ufb01t for accounts improving stage.
\u2022
Changes in risk parameters shows the reassessment of the ECL within a given stage, including any ECL overlays and residual income statement gains or losses at the point of write-off or
accounting write-down.
\u2022
Other (P&L only items) includes any subsequent changes in the value of written-down assets (for example, fortuitous recoveries) along with other direct write-off items such as direct recovery
costs. Other (P&L only items) affects the income statement but does not affect balance sheet ECL movements.
\u2022
Amounts written-off represent the gross asset written-off against accounts with ECL, including the net asset written-off for any debt sale activity.
\u2022
There were some \ufb02ows from Stage 1 into Stage 3 including transfers due to unexpected default events with a post model adjustment in place for Commercial & Institutional to account for this risk.
\u2022
The effect of any change in post model adjustments during the year is typically reported under changes in risk parameters, as are any effects arising from changes to the underlying models.
\u2022
All movements are captured monthly and aggregated. Interest suspended post default is included within Stage 3 ECL with the movement in the value of suspended interest during the year
reported under currency translation and other adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
NatWest Group total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Currency translation and other adjustments
(644)
-
14
1
156
163
(474)
164
Transfers from Stage 1 to Stage 2
(40,165)
(229)
40,165
229
-
-
-
-
Transfers from Stage 2 to Stage 1
33,789
433
(33,789)
(433)
-
-
-
-
Transfers to Stage 3
(397)
(5)
(2,527)
(258)
2,924
263
-
-
Transfers from Stage 3
161
18
999
47
(1,160)
(65)
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(299)
\u00a0
616
-
447
\u00a0
764
Changes in risk parameters
\u00a0
(114)
\u00a0
(18)
-
312
\u00a0
180
Other changes in net exposure
38,094
212
(7,429)
(175)
(2,349)
(256)
28,316
(219)
Other (P&L only items)
\u00a0
(3)
\u00a0
(2)
-
(49)
\u00a0
(54)
Income statement (releases)/charges
\u00a0
(204)
\u00a0
421
\u00a0
454
\u00a0
671
Amounts written-off
-
-
-
-
(579)
(579)
(579)
(579)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(150)
\u00a0
(150)
At 31 December 2025
546,394
614
39,598
796
4,893
2,175
590,885
3,585
Net carrying amount
545,780
\u00a0
38,802
\u00a0
2,718
\u00a0
587,300
\u00a0
At 1 January 2024
504,345
709
40,294
976
5,621
1,960
550,260
3,645
2024 movements
11,211
(111)
1,871
(189)
280
80
13,362
(220)
At 31 December 2024
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Net carrying amount
514,958
\u00a0
41,378
\u00a0
3,861
\u00a0
560,197
\u00a0
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - mortgages
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
171,333
76
20,992
60
2,303
305
194,628
441
Currency translation and other
adjustments
-
-
-
-
92
92
92
92
Transfers from Stage 1 to Stage 2
(16,507)
(17)
16,507
17
-
-
-
-
Transfers from Stage 2 to Stage 1
17,824
24
(17,824)
(24)
-
-
-
-
Transfers to Stage 3
(14)
-
(865)
(7)
879
7
-
-
Transfers from Stage 3
23
-
806
11
(829)
(11)
-
-
Net re-measurement of ECL on stage
transfer
(7)
7
7
7
Changes in risk parameters
(19)
(18)
74
37
Other changes in net exposure
9,277
(13)
(3,792)
(10)
(1,274)
(152)
4,211
(175)
Other (P&L only items)
-
-
(16)
(16)
Income statement (releases)/charges
(39)
(21)
(87)
(147)
Amounts written-off
-
-
-
-
(87)
(87)
(87)
(87)
Unwinding of discount
-
-
(67)
(67)
At 31 December 2025
181,936
44
15,824
36
1,084
168
198,844
248
Net carrying amount
181,892
15,788
916
198,596
At 1 January 2024
174,038
87
17,827
60
2,068
250
193,933
397
2024 movements
(2,705)
(11)
3,165
-
235
55
695
44
At 31 December 2024
171,333
76
20,992
60
2,303
305
194,628
441
Net carrying amount
171,257
20,932
1,998
194,187
\n
\u2022
ECL coverage for mortgages decreased during the year, primarily driven by the reduction in economic uncertainty post model adjustments (supported by back-testing) and a de\ufb01nition of default
\n
systems and process enhancement in the \ufb01rst half of the year. Additionally, the transfer of \u00a32.1 billion of mortgages with \u00a30.1 billion of ECL to a securitisation special purpose vehicle further
\n
reduced ECL coverage overall, noting that \u00a30.8 billion of these loans were in Stage 3.
\n
\u2022
Stage 3 in\ufb02ows reduced in the year, with the portfolio showing continued resilience alongside the effect of the de\ufb01nition of default systems and process enhancement earlier in the year.
\n
\u2022
Stable portfolio trends and PD model enhancements underpinned PD reductions in the year, resulting in a reduction in Stage 2 balances.
\n
\u2022
The relatively small ECL cost for net re-measurement on transfer into Stage 3 included the effect of risk targeted ECL adjustments, when previously in the good book. Refer to the ECL post model
\n
adjustments section for further details.
\n
\u2022
Write-off occurs once the repossessed property has been sold and there is a residual shortfall balance remaining outstanding. This would typically be within \ufb01ve years from default but can be
\n
longer.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - credit cards
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
4,523
76
2,034
186
162
117
6,719
379
Currency translation and other
adjustments
-
-
-
-
6
6
6
6
Transfers from Stage 1 to Stage 2
(2,329)
(52)
2,329
52
-
-
-
-
Transfers from Stage 2 to Stage 1
1,339
105
(1,339)
(105)
-
-
-
-
Transfers to Stage 3
(36)
(1)
(231)
(78)
267
79
-
-
Transfers from Stage 3
3
2
14
5
(17)
(7)
-
-
Net re-measurement of ECL on stage
transfer
(71)
191
101
221
Changes in risk parameters
15
30
25
70
Other changes in net exposure
2,243
50
(640)
(77)
(33)
(1)
1,570
(28)
Other (P&L only items)
-
-
(1)
(1)
Income statement (releases)/charges
(6)
144
124
262
Amounts written-off
-
-
-
-
(118)
(118)
(118)
(118)
Unwinding of discount
-
-
(12)
(12)
At 31 December 2025
5,743
124
2,167
204
267
190
8,177
518
Net carrying amount
5,619
1,963
77
7,659
At 1 January 2024
3,475
70
2,046
204
146
89
5,667
363
2024 movements
1,048
6
(12)
(18)
16
28
1,052
16
At 31 December 2024
4,523
76
2,034
186
162
117
6,719
379
Net carrying amount
4,447
1,848
45
6,340
\n
\u2022
Overall ECL for cards increased during 2025, driven primarily by the acquisition of Sainsbury\u2019s Bank credit card balances alongside continued organic portfolio growth, re\ufb02ecting strong customer
\n
demand, while sustaining robust risk appetite.
\n
\u2022
Flow rates into Stage 3 were slightly higher in 2025 compared to 2024, re\ufb02ecting the strategic growth and seasoning of credit card balances since 2022. This trend contributed to an increase in
\n
PDs during the year, driving a net \ufb02ow into Stage 2 from Stage 1.
\n
\u2022
Charge-off (analogous to partial write-off) typically occurs after 12 missed payments.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - other personal unsecured
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
5,605
127
1,465
182
833
641
7,903
950
Currency translation and other
adjustments
-
-
-
-
27
27
27
27
Transfers from Stage 1 to Stage 2
(2,145)
(95)
2,145
95
-
-
-
-
Transfers from Stage 2 to Stage 1
1,471
157
(1,471)
(157)
-
-
-
-
Transfers to Stage 3
(79)
(3)
(329)
(118)
408
121
-
-
Transfers from Stage 3
7
3
24
10
(31)
(13)
-
-
Net re-measurement of ECL on stage
transfer
(100)
219
63
182
Changes in risk parameters
(33)
(10)
126
83
Other changes in net exposure
1,992
111
(389)
(37)
(128)
(47)
1,475
27
Other (P&L only items)
-
-
30
30
Income statement (releases)/charges
(22)
172
172
322
Amounts written-off
-
-
-
-
(168)
(168)
(168)
(168)
Unwinding of discount
-
-
(33)
(33)
At 31 December 2025
6,851
167
1,445
184
941
717
9,237
1,068
Net carrying amount
6,684
1,261
224
8,169
At 1 January 2024
5,240
149
1,657
238
963
758
7,860
1,145
2024 movements
365
(22)
(192)
(56)
(130)
(117)
43
(195)
At 31 December 2024
5,605
127
1,465
182
833
641
7,903
950
Net carrying amount
5,478
1,283
192
6,953
\n
\u2022
Total ECL increased during the year, primarily driven by the acquisition of Sainsbury\u2019s Bank loan balances and continued organic loan book growth, while arrears performance remained stable,
\n
resulting in ECL coverage levels broadly consistent with 31 December 2024.
\n
\u2022
Flow rates into Stage 3 remained stable, in line with broader portfolio trends on arrears, with overall Stage 3 balances increasing as a result of reduced debt sale activity overall in the year.
\n
\u2022
Write-off occurs once recovery activity with the customer has been concluded or there are no further recoveries expected, but no later than six years after default.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - corporate
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
62,575
175
11,450
273
1,562
659
75,587
1,107
Currency translation and other
adjustments
(331)
-
17
-
24
18
(290)
18
Inter-group transfers
156
1
8
1
1
-
165
2
Transfers from Stage 1 to Stage 2
(14,018)
(50)
14,018
50
-
-
-
-
Transfers from Stage 2 to Stage 1
8,374
103
(8,374)
(103)
-
-
-
-
Transfers to Stage 3
(170)
(1)
(741)
(44)
911
45
-
-
Transfers from Stage 3
54
7
82
15
(136)
(22)
-
-
Net re-measurement of ECL on stage
transfer
(84)
151
214
281
Changes in risk parameters
(22)
(9)
42
11
Other changes in net exposure
7,479
30
(1,776)
(42)
(591)
(37)
5,112
(49)
Other (P&L only items)
(4)
(3)
(61)
(68)
Income statement (releases)/charges
(80)
97
158
175
Amounts written-off
-
-
-
-
(166)
(166)
(166)
(166)
Unwinding of discount
-
-
(26)
(26)
At 31 December 2025
64,119
159
14,684
292
1,605
727
80,408
1,178
Net carrying amount
63,960
14,392
878
79,230
At 1 January 2024
61,402
226
12,275
344
1,454
602
75,131
1,172
2024 movements
1,173
(51)
(825)
(71)
108
57
456
(65)
At 31 December 2024
62,575
175
11,450
273
1,562
659
75,587
1,107
Net carrying amount
62,400
11,177
903
74,480
\n
\u2022
Total ECL increased in the year primarily re\ufb02ecting a small number of individual defaults. Despite the growth in Stage 3 ECL, transfers into Stage 3 reduced compared to 2024, with a notable
\n
reduction in transfers seen in the second half of 2025.
\n
\u2022
Total performing book ECL was stable year-on-year, but with a small increase in Stage 2, re\ufb02ecting the net transfer of assets from Stage 1 into Stage 2.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - property
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
27,468
77
2,980
61
590
225
31,038
363
Currency translation and other
adjustments
8
-
-
-
9
-
17
-
Inter-group transfers
(175)
-
(7)
-
(1)
-
(183)
-
Transfers from Stage 1 to Stage 2
(2,569)
(8)
2,569
8
-
-
-
-
Transfers from Stage 2 to Stage 1
2,021
23
(2,021)
(23)
-
-
-
-
Transfers to Stage 3
(6)
-
(143)
(8)
149
8
-
-
Transfers from Stage 3
45
4
28
5
(73)
(9)
-
-
Net re-measurement of ECL on stage
transfer
(22)
31
13
22
Changes in risk parameters
(28)
(8)
18
(18)
Other changes in net exposure
3,692
15
(313)
(10)
(199)
(21)
3,180
(16)
Other (P&L only items)
-
-
-
-
Income statement (releases)/charges
(35)
13
10
(12)
Amounts written-off
-
-
-
-
(33)
(33)
(33)
(33)
Unwinding of discount
-
-
(8)
(8)
At 31 December 2025
30,484
61
3,093
56
442
193
34,019
310
Net carrying amount
30,423
3,037
249
33,709
At 1 January 2024
26,040
94
3,155
89
606
195
29,801
378
2024 movements
1,428
(17)
(175)
(28)
(16)
30
1,237
(15)
At 31 December 2024
27,468
77
2,980
61
590
225
31,038
363
Net carrying amount
27,391
2,919
365
30,675
\n
\u2022
Total ECL for property exposures reduced notably in the year, with reductions observed in all stages.
\n
\u2022
In Stage 3, both total \ufb01nancial assets and ECL reduced as there were low levels of default in the year, which were more than offset by the effects of repayments and write-offs.
\n
\u2022
Performing book ECL reduced in the year driven by changes in risk parameters, which included the impact of reductions in post model adjustments.
Flow statements (audited)
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
93,724
37
1,739
12
123
57
95,586
106
Currency translation and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
adjustments
(377)
-
(3)
-
-
14
(380)
14
Inter-group transfers
18
-
(1)
-
-
-
17
-
Transfers from Stage 1 to Stage 2
(960)
(3)
960
3
-
-
-
-
Transfers from Stage 2 to Stage 1
1,714
11
(1,714)
(11)
-
-
-
-
Transfers to Stage 3
(82)
-
(29)
(1)
111
1
-
-
Transfers from Stage 3
8
-
9
-
(17)
-
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(8)
\u00a0
7
\u00a0
44
\u00a0
43
Changes in risk parameters
\u00a0
(11)
\u00a0
(2)
\u00a0
19
\u00a0
6
Other changes in net exposure
3,828
10
(317)
1
(17)
5
3,494
16
Other (P&L only items)
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
Income statement (releases)/charges
\u00a0
(9)
\u00a0
6
\u00a0
65
\u00a0
62
Amounts written-off
-
-
-
-
(6)
(6)
(6)
(6)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
At 31 December 2025
97,873
36
644
9
194
128
98,711
173
Net carrying amount
97,837
\u00a0
635
\u00a0
66
\u00a0
98,538
\u00a0
At 1 January 2024
88,860
36
1,599
14
101
22
90,560
72
2024 movements
4,864
1
140
(2)
22
35
5,026
34
At 31 December 2024
93,724
37
1,739
12
123
57
95,586
106
Net carrying amount
93,687
\u00a0
1,727
\u00a0
66
\u00a0
95,480
\u00a0
\n
\u2022
The increase in Stage 3 \ufb01nancial assets and ECL primarily re\ufb02ected the impact of a single large \ufb02ow to default in the year.
\u2022
Performing book ECL was marginally lower at 31 December 2025, with the Stage 2 ECL reduction re\ufb02ective of exposure \ufb02owing back into Stage 1.Asset quality (audited)
The table below shows asset quality bands of gross loans and ECL, by stage, for the Personal portfolio.
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,087
6,432
-
120,519
19
9
-
28
-
0.1
-
-
AQ5-AQ8
83,712
8,584
-
92,296
26
21
-
47
-
0.2
-
0.1
AQ9
140
935
-
1,075
-
6
-
6
-
0.6
-
0.6
AQ10
-
-
1,339
1,339
-
-
191
191
-
-
14.3
14.3
\u00a0
197,939
15,951
1,339
215,229
45
36
191
272
-
0.2
14.3
0.1
Credit cards
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
117
-
-
117
1
-
-
1
0.9
-
-
0.9
AQ5-AQ8
5,850
1,967
-
7,817
123
181
-
304
2.1
9.2
-
3.9
AQ9
21
114
-
135
1
24
-
25
4.8
21.1
-
18.5
AQ10
-
-
242
242
-
-
190
190
-
-
78.5
78.5
\u00a0
5,988
2,081
242
8,311
125
205
190
520
2.1
9.9
78.5
6.3
Other personal
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
765
112
-
877
5
12
-
17
0.7
10.7
-
1.9
AQ5-AQ8
8,148
1,212
-
9,360
161
137
-
298
2.0
11.3
-
3.2
AQ9
64
144
-
208
6
36
-
42
9.4
25.0
-
20.2
AQ10
-
-
956
956
-
-
731
731
-
-
76.5
76.5
\u00a0
8,977
1,468
956
11,401
172
185
731
1,088
1.9
12.6
76.5
9.5
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,969
6,544
-
121,513
25
21
-
46
-
0.3
-
-
AQ5-AQ8
97,710
11,763
-
109,473
310
339
-
649
0.3
2.9
-
0.6
AQ9
225
1,193
-
1,418
7
66
-
73
3.1
5.5
-
5.2
AQ10
-
-
2,537
2,537
-
-
1,112
1,112
-
-
43.8
43.8
\u00a0
212,904
19,500
2,537
234,941
342
426
1,112
1,880
0.2
2.2
43.8
0.8
\n\n
Asset quality (audited)
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
AQ1-AQ4
104,793
8,416
-
113,209
29
16
-
45
-
0.2
-
-
AQ5-AQ8
81,263
11,683
-
92,946
48
38
-
86
0.1
0.3
-
0.1
AQ9
194
962
-
1,156
-
6
-
6
-
0.6
-
0.5
AQ10
-
-
2,535
2,535
-
-
325
325
-
-
12.8
12.8
186,250
21,061
2,535
209,846
77
60
325
462
-
0.3
12.8
0.2
Credit cards
AQ1-AQ4
128
-
-
128
1
-
-
1
0.8
-
-
0.8
AQ5-AQ8
4,650
1,866
-
6,516
75
169
-
244
1.6
9.1
-
3.7
AQ9
23
87
-
110
1
17
-
18
4.4
19.5
-
16.4
AQ10
-
-
176
176
-
-
118
118
-
-
67.1
67.1
4,801
1,953
176
6,930
77
186
118
381
1.6
9.5
67.1
5.5
Other personal
AQ1-AQ4
691
127
-
818
6
14
-
20
0.9
11.0
-
2.4
AQ5-AQ8
6,521
1,359
-
7,880
120
134
-
254
1.8
9.9
-
3.2
AQ9
55
136
-
191
4
35
-
39
7.3
25.7
-
20.4
AQ10
-
-
860
860
-
-
656
656
-
-
76.3
76.3
7,267
1,622
860
9,749
130
183
656
969
1.8
11.3
76.3
9.9
Total
AQ1-AQ4
105,612
8,543
-
114,155
36
30
-
66
-
0.4
-
0.1
AQ5-AQ8
92,434
14,908
-
107,342
243
341
-
584
0.3
2.3
-
0.5
AQ9
272
1,185
-
1,457
5
58
-
63
1.8
4.9
-
4.3
AQ10
-
-
3,571
3,571
-
-
1,099
1,099
-
-
30.8
30.8
198,318
24,636
3,571
226,525
284
429
1,099
1,812
0.1
1.7
30.8
0.8
\n
\u2022
The distribution of lending across the AQ1-AQ9 bands remained broadly consistent with the prior year. Growth in the mortgage portfolio was mainly in the AQ1-AQ4 bands as expected.
\n
\u2022
The proportion of Stage 3/AQ10 loans declined over the year, mainly as a result of the balance sheet management actions described above, notably the mortgage securitisation which reduced
\n
Stage 3 loans by \u00a30.8 billion. Furthermore, there was an enhancement to the mortgage de\ufb01nition of default systems and process resulting in approximately \u00a30.4 billion of loans migrating from
\n
Stage 3 back to the good book. Within the credit card portfolio, \ufb02ows into Stage 3 increased year-on-year, driven by strategic growth and seasoning of credit card balances since 2022. For other
\n
personal lending, \ufb02ow rates into AQ10/Stage 3 remained stable, with AQ10 balances increasing as a result of reduced debt sale activity overall in the year.
\n\n
Asset quality (audited)
\n
The table below shows asset quality bands of gross loans and ECL, by stage, for the Non-Personal portfolio.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
AQ1-AQ4
43,968
2,314
-
46,282
29
15
-
44
0.1
0.7
-
0.1
AQ5-AQ8
53,783
15,882
-
69,665
199
326
-
525
0.4
2.1
-
0.8
AQ9
28
264
-
292
-
19
-
19
-
7.2
-
6.5
AQ10
-
-
1,990
1,990
-
-
944
944
-
-
47.4
47.4
97,779
18,460
1,990
118,229
228
360
944
1,532
0.2
2.0
47.4
1.3
Financial institutions
AQ1-AQ4
68,620
154
-
68,774
20
2
-
22
-
1.3
-
-
AQ5-AQ8
5,339
196
-
5,535
17
3
-
20
0.3
1.5
-
0.4
AQ9
-
6
-
6
-
-
-
-
-
-
-
-
AQ10
-
-
141
141
-
-
113
113
-
-
80.1
80.1
73,959
356
141
74,456
37
5
113
155
0.1
1.4
80.1
0.2
Sovereign
AQ1-AQ4
1,878
1
-
1,879
7
1
-
8
0.4
100.0
-
0.4
AQ5-AQ8
131
-
-
131
-
-
-
-
-
-
-
-
AQ9
-
265
-
265
-
4
-
4
-
1.5
-
1.5
AQ10
-
-
15
15
-
-
6
6
-
-
40.0
40.0
2,009
266
15
2,290
7
5
6
18
0.4
1.9
40.0
0.8
Total
AQ1-AQ4
114,466
2,469
-
116,935
56
18
-
74
0.1
0.7
-
0.1
AQ5-AQ8
59,253
16,078
-
75,331
216
329
-
545
0.4
2.1
-
0.7
AQ9
28
535
-
563
-
23
-
23
-
4.3
-
4.1
AQ10
-
-
2,146
2,146
-
-
1,063
1,063
-
-
49.5
49.5
173,747
19,082
2,146
194,975
272
370
1,063
1,705
0.2
1.9
49.5
0.9
Asset quality (audited)
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
41,509
2,409
-
43,918
32
19
-
51
0.1
0.8
-
0.1
AQ5-AQ8
53,448
11,783
-
65,231
232
306
-
538
0.4
2.6
-
0.8
AQ9
34
272
-
306
-
19
-
19
-
7.0
-
6.2
AQ10
-
-
2,279
2,279
-
-
896
896
-
-
39.3
39.3
\u00a0
94,991
14,464
2,279
111,734
264
344
896
1,504
0.3
2.4
39.3
1.4
Financial institutions
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
64,845
233
-
65,078
21
2
-
23
-
0.9
-
-
AQ5-AQ8
4,176
996
-
5,172
17
9
-
26
0.4
0.9
-
0.5
AQ9
-
12
-
12
-
1
-
1
-
8.3
-
8.3
AQ10
-
-
59
59
-
-
40
40
-
-
67.8
67.8
\u00a0
69,021
1,241
59
70,321
38
12
40
90
0.1
1.0
67.8
0.1
Sovereign
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
1,364
1
-
1,365
12
1
-
13
0.9
100.0
-
1.0
AQ5-AQ8
127
-
-
127
-
-
-
-
-
-
-
-
AQ9
-
132
-
132
-
1
-
1
-
0.8
-
0.8
AQ10
-
-
21
21
-
-
5
5
-
-
23.8
23.8
\u00a0
1,491
133
21
1,645
12
2
5
19
0.8
1.5
23.8
1.2
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
107,718
2,643
-
110,361
65
22
-
87
0.1
0.8
-
0.1
AQ5-AQ8
57,751
12,779
-
70,530
249
315
-
564
0.4
2.5
-
0.8
AQ9
34
416
-
450
-
21
-
21
-
5.1
-
4.7
AQ10
-
-
2,359
2,359
-
-
941
941
-
-
39.9
39.9
\u00a0
165,503
15,838
2,359
183,700
314
358
941
1,613
0.2
2.3
39.9
0.9
\n
\u2022
The majority of Non-Personal lending remained in the AQ1-AQ4 band, with the increase in the year driven by increases in \ufb01nancial institutions sectors. This portfolio is subject to low ECL coverage,
re\ufb02ecting the high credit quality in the portfolio.
\u2022
In corporate sectors, Stage 2 exposure grew in the year, primarily in the AQ5-AQ8 band, which accounted for the majority of exposure to corporates. AQ10 exposures in Stage 3 reduced in
corporates, as new defaults were more than offset by write-offs and repayments on previous defaults.
\u2022
The increase in sovereigns exposure in AQ9 and Stage 2 was primarily due to increased exposure to a single counterparty where the lending is fully guaranteed.
Credit risk - Trading activities
This section details the credit risk pro\ufb01le of NatWest Group\u2019s trading activities.
Securities \ufb01nancing transactions and collateral (audited)
The table below shows securities \ufb01nancing transactions in Commercial & Institutional and Central items & other. Balance sheet captions include balances held at all classi\ufb01cations under IFRS.
\u00a0 \n \n
Reverse repos
Repos
Of which:
Outside netting
Of which:
Outside netting
Total
can be offset
arrangements
Total
can be offset
arrangements
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Gross
95,674
95,618
56
89,789
87,730
2,059
IFRS offset
(31,599)
(31,599)
-
(31,599)
(31,599)
-
Carrying value
64,075
64,019
56
58,190
56,131
2,059
Master netting arrangements
(474)
(474)
-
(474)
(474)
-
Securities collateral
(63,292)
(63,292)
-
(55,657)
(55,657)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(56,131)
(56,131)
-
Net
309
253
56
2,059
-
2,059
2024
Gross
87,901
87,861
40
68,024
67,321
703
IFRS offset
(23,883)
(23,883)
-
(23,883)
(23,883)
-
Carrying value
64,018
63,978
40
44,141
43,438
703
Master netting arrangements
(1,549)
(1,549)
-
(1,549)
(1,549)
-
Securities collateral
(62,217)
(62,217)
-
(41,889)
(41,889)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(43,438)
(43,438)
-
Net
252
212
40
703
-
703
Derivatives (audited)
The table below shows derivatives by type of contract. The master netting agreements and collateral shown do not result in a net presentation on the balance sheet under IFRS. A signi\ufb01cant
proportion of the derivatives relate to trading activities in Commercial & Institutional. The table also includes hedging derivatives in Central items & other.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Notional
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
GBP
USD
EUR
Other
Total
Assets
Liabilities
Notional
Assets
Liabilities
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3m
\u00a3m
\u00a3bn
\u00a3m
\u00a3m
Gross exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
77,796
71,925
\u00a0
97,152
93,109
IFRS offset
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(17,007)
(17,951)
\u00a0
(18,746)
(21,027)
Carrying value
3,460
3,573
6,328
1,158
14,519
60,789
53,974
13,628
78,406
72,082
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate
(1)
3,125
2,072
5,699
192
11,088
32,742
26,758
10,333
37,499
31,532
Exchange rate
331
1,495
622
966
3,414
27,981
27,042
3,279
40,797
40,306
Credit
2
6
7
-
15
66
174
14
110
244
Equity and commodity
2
-
-
-
2
-
-
2
-
-
Carrying value
\u00a0 \u00a0 \u00a0 \u00a0
14,519
60,789
53,974
13,628
78,406
72,082
Counterparty mark-to-market
netting
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(45,928)
(45,928)
\u00a0
(61,883)
(61,883)
Cash collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(9,275)
(4,281)
\u00a0
(10,005)
(5,801)
Securities collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(3,283)
(1,256)
\u00a0
(4,072)
(896)
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Banks
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
89
217
\u00a0
214
345
Other financial institutions
(3)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,508
1,160
\u00a0
1,429
1,456
Corporate
(4)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
673
1,110
\u00a0
769
1,669
Government
(5)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
33
22
\u00a0
34
32
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
UK
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,098
1,548
\u00a0
1,061
1,774
Europe
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
693
589
\u00a0
875
978
US
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
437
283
\u00a0
443
604
RoW
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
75
89
\u00a0
67
146
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Asset quality of uncollateralised
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
derivative assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,865
\u00a0 \u00a0
2,049
\u00a0
AQ5-AQ8
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
435
\u00a0 \u00a0
394
\u00a0
AQ9-AQ10
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
3
\u00a0 \u00a0
3
\u00a0
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
\u00a0 \u00a0
2,446
\u00a0
\n
(1)
The notional amount of interest rate derivatives includes \u00a38,768 billion
(2024 \u2013 \u00a37,321 billion) in respect of contracts cleared through central
clearing counterparties.
(2)
Transactions with certain counterparties with whom NatWest Group has
netting arrangements but collateral is not posted on a daily basis; certain
transactions with speci\ufb01c terms that may not fall within netting and
collateral arrangements; derivative positions in certain jurisdictions where
the collateral agreements are not deemed to be legally enforceable.
(3)
Includes transactions with securitisation vehicles and funds where
collateral posting is contingent on NatWest Group\u2019s external rating.
(4)
Mainly large corporates with whom NatWest Group may have netting
arrangements in place with no collateral posting.
(5)
Sovereigns and supranational entities with no collateral arrangements,
collateral arrangements that are not considered enforceable, or one-way
collateral agreements in their favour.
Debt securities (audited)
The table below shows debt securities held at mandatory fair value through pro\ufb01t or loss by issuer as well as ratings based on the lowest of Standard & Poor\u2019s, Moody\u2019s and Fitch.
\u00a0
Central and local government
\u00a0 \u00a0 \u00a0
\u00a0
UK
US
Other
Financial institutions
Corporate
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
AAA
-
-
1,505
1,283
-
2,788
AA to AA+
-
4,153
257
309
18
4,737
A to AA-
2,105
-
1,481
596
215
4,397
BBB- to A-
-
-
892
256
384
1,532
Non-investment grade
-
-
-
11
50
61
Total
2,105
4,153
4,135
2,455
667
13,515
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AAA
-
-
1,335
1,368
-
2,703
AA to AA+
-
3,734
74
569
2
4,379
A to AA-
2,077
-
1,266
381
519
4,243
BBB- to A-
-
-
831
562
885
2,278
Non-investment grade
-
-
-
108
167
275
Total
2,077
3,734
3,506
2,988
1,573
13,878
Capital, liquidity and funding riskDe\ufb01nitions (audited)
Regulatory capital consists of reserves and
instruments issued that are available, have a
degree of permanency and are capable of
absorbing losses. A number of strict
conditions set by regulators must be satis\ufb01ed
to be eligible as capital.
Capital risk is the inability to conduct business
in base or stress conditions on a risk or
leverage basis due to insuf\ufb01cient qualifying
capital as well as the failure to assess,
monitor, plan and manage capital adequacy
requirements.
Liquidity consists of assets that can be readily
converted to cash within a short timeframe at
a reliable value. Liquidity risk is de\ufb01ned as the
risk that the Group or any of its subsidiaries
or branches cannot meet it\u2019s actual or
potential \ufb01nancial obligations in a timely
manner as they fall due in the short term.
Funding consists of on-balance sheet liabilities
that are used to provide cash to \ufb01nance
assets. Funding risk is the current or
prospective risk that the Group or its
subsidiaries or branches cannot meet
\ufb01nancial obligations as they fall due in the
medium to long term, either at all or without
increasing funding costs unacceptably.
Liquidity and funding risks arise in a number
of ways, including through the maturity
transformation role that banks perform. The
risks are dependent on factors such as:
\u2022
Maturity pro\ufb01le;
\u2022
Composition of sources and uses of
funding;
\u2022
The quality and size of the liquidity
portfolio;
\u2022
Wholesale market conditions; and
\u2022
Depositor and investor behaviour.
Sources of risk (audited)
Capital
The eligibility of instruments and \ufb01nancial
resources as regulatory capital is laid down
by applicable regulation. Capital is
categorised under two tiers (Tier 1 and Tier
2) according to the ability to absorb losses,
degree of permanency and the ranking of
absorbing losses on either a going or gone
concern basis. There are three broad
categories of capital across these two tiers:
CET1 capital
-
CET1 capital must be
perpetual and capable of unrestricted and
immediate use to cover risks or losses as
soon as these occur. This includes ordinary
shares issued and retained earnings.
Additional Tier 1 (AT1) capital -
This is the
second type of loss-absorbing capital and
must be capable of absorbing losses on a
going concern basis. These instruments are
either written down or converted into CET1
capital when the CET1 ratio falls below a pre-
speci\ufb01ed level.
Tier 2 capital -
Tier 2 capital is the bank
entities' supplementary capital and provides
loss absorption on a gone concern basis.
Tier
2 capital absorbs losses after Tier 1 capital.
It typically consists of subordinated debt
securities which must have a minimum of \ufb01ve
years to maturity at all times to be fully
recognised for regulatory purposes. Funding sources (audited)
The table below shows the carrying values of the principal funding sources based on contractual maturity. Balance sheet captions include balances held at all classi\ufb01cations under IFRS 9.
\u00a0
2025
2024
\u00a0
Short-term less
Long-term more
\u00a0
Short-term less
Long-term more
\u00a0
\u00a0
than 1 year
than 1 year
Total
than 1 year
than 1 year
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
22,371
5,445
27,816
11,967
-
11,967
Other bank deposits
(1)
6,094
10,182
16,276
9,708
9,777
19,485
\u00a0
28,465
15,627
44,092
21,675
9,777
31,452
Customer Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
753
1,043
1,796
1,363
-
1,363
Non-bank financial institutions
53,559
4
53,563
48,761
241
49,002
Personal
232,815
7,757
240,572
231,483
2,451
233,934
Corporate
147,022
45
147,067
149,086
105
149,191
\u00a0
434,149
8,849
442,998
430,693
2,797
433,490
Trading liabilities
(2)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
(3)
26,168
2,410
28,578
29,752
810
30,562
Derivatives collateral
11,966
-
11,966
12,509
-
12,509
Other bank and customer deposits
454
286
740
627
268
895
Debt securities in issue - Medium term notes
28
206
234
20
237
257
\u00a0
38,616
2,902
41,518
42,908
1,315
44,223
Other financial liabilities
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Customer deposits including repos
836
1,476
2,312
471
1,341
1,812
Debt securities in issue:
\u00a0\u00a0
-
\u00a0\u00a0\u00a0
Commercial paper and certificates of deposit
8,718
683
9,401
10,889
377
11,266
Medium term notes
11,475
41,999
53,474
11,118
34,967
46,085
Covered bonds
-
749
749
-
749
749
Securitisation
-
1,663
1,663
295
880
1,175
\u00a0
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Total funding
523,335
78,995
602,330
519,100
57,288
576,388
Of which: available in resolution
(4)
\u00a0\u00a0
30,049
\u00a0\u00a0
29,742
\n
(1)
Includes \u00a38.2 billion (2024 \u2013 \u00a312.0 billion) relating to Term Funding Scheme
with additional incentives for Small and Medium-sized Enterprises participation.
(2)
Excludes short positions of \u00a37.5 billion (2024 \u2013 \u00a310.5 billion).
(3)
Comprises central & other bank repos of \u00a38.2 billion (2024 \u2013 \u00a37.2 billion), other
financial institution repos of \u00a318.0 billion (2024 \u2013 \u00a320.4 billion) and other
corporate repos of \u00a32.4 billion (2024 \u2013 \u00a33.0 billion).
(4)
Eligible liabilities (as defined in the Banking Act 2009 as amended from time to
time) that meet the eligibility criteria set out in the regulations, rules, policies,
guidelines, or statements of the Bank of England including the Statement of
Policy published by the Bank of England in December 2021 (updating June
2018). The balance consists of \u00a324.3 billion (2024 \u2013 \u00a324.0 billion) under debt
securities in issue (senior MREL) and \u00a35.7 billion (2024 \u2013 \u00a35.7 billion) under
subordinated liabilities.
\n\n
Contractual maturity (audited)
\n
This table shows the residual maturity of \ufb01nancial instruments, based on contractual date of maturity of NatWest Group\u2019s banking activities, including hedging derivatives. Trading activities, comprising
\n
mandatory fair value through pro\ufb01t or loss (MFVTPL) assets and held-for-trading (HFT) liabilities have been excluded from the maturity analysis and are shown in total in the table below.
\n\n \n
Banking activities
Less than
6 months-
More than
Trading
1 months
1-3 months
3-6 months
1 year
Subtotal
1-3 years
3-5 years
5 years
Total
activities
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
85,182
-
-
-
85,182
-
-
-
85,182
-
85,182
Trading assets
-
-
-
-
-
-
-
-
-
46,537
46,537
Derivatives
(10)
95
34
29
148
65
322
-
535
60,254
60,789
Settlement balances
645
-
-
-
645
-
-
-
645
-
645
Loans to banks - amortised cost
4,854
748
411
109
6,122
696
-
140
6,958
-
6,958
Loans to customers -
amortised cost
(1)
43,857
19,126
17,086
23,561
103,630
66,657
49,262
202,841
422,390
-
422,390
Personal
7,795
2,222
3,331
6,496
19,844
24,503
21,533
168,637
234,517
-
234,517
Corporate
20,497
4,196
3,851
7,862
36,406
30,312
21,908
30,208
118,834
-
118,834
Non-bank financial institutions
15,565
12,708
9,904
9,203
47,380
11,842
5,821
3,996
69,039
-
69,039
Other financial assets
1,683
2,994
3,968
2,621
11,266
23,899
9,978
33,583
78,726
1,044
79,770
Total financial assets
136,211
22,963
21,499
26,320
206,993
91,317
59,562
236,564
594,436
107,835
702,271
2024
Total financial assets
146,069
22,925
18,701
31,177
218,872
76,479
56,413
215,575
567,339
128,007
695,346
\n
(1)
Loans to customers is gross and excludes \u00a33.5 billion (2024 - \u00a33.3 billion) of impairment provisions.
\n\n
Contractual maturity (audited)
\n\n \n
Banking activities
Less than
More than
Trading
1 months
1-3 months
3-6 months
6 months - 1 year
Subtotal
1-3 years
3-5 years
5 years
Total
activities
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank deposits excluding repos
4,447
342
845
460
6,094
6,556
568
3,058
16,276
-
16,276
Bank repos
20,926
881
-
564
22,371
3,616
1,829
-
27,816
-
27,816
Customer repos
587
16
-
150
753
1,043
-
-
1,796
-
1,796
Customer deposits excluding repos
380,523
20,637
17,331
14,905
433,396
7,785
13
8
441,202
-
441,202
Personal
205,094
5,698
9,628
12,395
232,815
7,750
7
-
240,572
-
240,572
Corporate
126,625
11,281
7,074
2,042
147,022
31
6
8
147,067
-
147,067
Non-bank financial institutions
48,804
3,658
629
468
53,559
4
-
-
53,563
-
53,563
Settlement balances
942
-
-
-
942
-
-
-
942
-
942
Trading liabilities
-
-
-
-
-
-
-
-
-
49,022
49,022
Derivatives
31
14
12
29
86
164
106
1
357
53,617
53,974
Other financial liabilities
3,745
3,702
7,783
5,799
21,029
22,923
16,418
7,229
67,599
-
67,599
CPs and CDs
1,500
1,718
2,497
3,003
8,718
683
-
-
9,401
-
9,401
Medium term notes
2,209
1,459
5,107
2,700
11,475
21,229
15,412
5,358
53,474
-
53,474
Covered bonds
-
-
-
-
-
-
749
-
749
-
749
Securitisations
-
-
-
-
-
3
-
1,660
1,663
-
1,663
Customer deposits including repos
36
525
179
96
836
1,008
257
211
2,312
-
2,312
Subordinated liabilities
-
57
20
999
1,076
1,892
2,780
375
6,123
-
6,123
Notes in circulation
3,164
-
-
-
3,164
-
-
-
3,164
-
3,164
Lease liabilities
4
19
21
41
85
158
62
230
535
-
535
Total financial liabilities
414,369
25,668
26,012
22,947
488,996
44,137
21,776
10,901
565,810
102,639
668,449
2024
Total financial liabilities
399,323
28,936
21,299
32,066
481,624
33,905
16,240
6,535
538,304
126,332
664,636
Senior notes and subordinated liabilities - residual maturity pro\ufb01le by instrument type (audited)
The table below shows NatWest Group\u2019s debt securities in issue and subordinated liabilities by residual maturity.
\u00a0
Trading
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
liabilities
Other financial liabilities
\u00a0
\u00a0 \u00a0
Debt securities in issue
\u00a0 \u00a0 \u00a0
\u00a0
Debt securities
Commercial
\u00a0
Covered
\u00a0
Subordinated
\u00a0
Total notes
\u00a0
in issue MTNs
paper and CDs
MTNs
bonds
Securitisation
liabilities
Total
in issue
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Less than 1 year
28
8,718
11,475
-
-
1,076
21,269
21,297
1-3 years
1
683
21,229
-
3
1,892
23,807
23,808
3-5 years
73
-
15,412
749
-
2,780
18,941
19,014
More than 5 years
132
-
5,358
-
1,660
375
7,393
7,525
Total
234
9,401
53,474
749
1,663
6,123
71,410
71,644
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Less than 1 year
20
10,889
11,118
-
295
1,051
23,353
23,373
1-3 years
35
377
18,426
-
7
1,523
20,333
20,368
3-5 years
42
-
12,409
749
-
2,623
15,781
15,823
More than 5 years
160
-
4,132
-
873
939
5,944
6,104
Total
257
11,266
46,085
749
1,175
6,136
65,411
65,668
\n
The table below shows the currency breakdown.
\u00a0
GBP
USD
EUR
Other
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Commercial paper and CDs
3,227
1,341
4,833
-
9,401
MTNs
4,914
22,061
23,536
3,197
53,708
Covered bonds
749
-
-
-
749
Securitisation
1,663
-
-
-
1,663
Subordinated liabilities
2,383
1,325
2,415
-
6,123
Total
12,936
24,727
30,784
3,197
71,644
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Total
14,541
23,797
24,325
3,005
65,668
Encumbrance (audited)
NatWest Group evaluates the extent to which assets can be \ufb01nanced in a secured form (encumbrance), but certain asset types lend themselves more readily to encumbrance. The typical
\n
characteristics that support encumbrance are an ability to pledge those assets to another counterparty or entity through operation of law without necessarily requiring prior noti\ufb01cation, homogeneity,
\n
predictable and measurable cash \ufb02ows, and a consistent and uniform underwriting and collection process. Retail assets including residential mortgages, credit card receivables and personal loans
\n
display many of these features.
\n
NatWest Group categorises its assets into four broad groups, those that are:
\n
\u2022
Already encumbered and used to support funding currently in place through own-asset securitisations, covered bonds and securities repurchase agreements.
\n
\u2022
Pre-positioned with central banks as part of funding schemes and those encumbered under such schemes.
\n
\u2022
Ring-fenced to meet regulatory requirements, where NatWest Group has in place an operational continuity in resolution (OCIR) investment mandate wherein the PRA requires critical service
\n
providers to hold segregated liquidity buffers covering at least 50% of their annual \ufb01xed overheads.
\n
\u2022
Unencumbered. In this category, NatWest Group has in place an enablement programme which seeks to identify assets capable of being encumbered and to identify the actions to facilitate such
\n
encumbrance whilst not affecting customer relationships or servicing. Programmes to manage the use of assets to actively support funding are established within UK DoLSub and NatWest Markets
\nPlc.Non-traded market risk
De\ufb01nition (audited)
Non-traded market risk is the risk to the
value of assets or liabilities outside the trading
book, or the risk to income, that arises from
changes in market prices such as interest
rates, foreign exchange rates and equity
prices, or from changes in managed rates.
Sources of risk (audited)
Non-traded market risk exists in all balance-
sheet exposure that makes reference to
market risk factors, when customer
behaviour could impact the size and timing of
the repricing or maturity of future cash \ufb02ows,
or when valuation of assets and liabilities is
driven by market risk factors such as interest
rates or foreign exchange rates.
The key sources of non-traded market risk
are interest rate risk, credit spread risk,
foreign exchange risk, equity risk and
accounting volatility risk. Qualitative and
quantitative information on these risk types is
provided following the VaR table below.Governance (audited)
Risk governance for non-traded market risk is
in line with the approach outlined in the Risk
management framework section.Equity risk (audited)
Non-traded equity risk is the potential variation in income and reserves arising from changes in equity
valuations. Equity positions are carried on the balance sheet at fair value based on market prices where
available. Equity positions may take the form of shares that are publicly listed on a recognised exchange,
privately owned investments and shareholdings in industry participations including SWIFT. Further
disclosure of NatWest Group\u2019s investments in equity shareholdings, fair value gains and losses and
valuation techniques may be found in the notes to the consolidated \ufb01nancial statements. Investments,
acquisitions or disposals of a strategic nature are referred to the Acquisitions & Disposals Committee.
Once approved by the Chief Financial Of\ufb01cer with support from the Acquisitions & Disposals Committee
for execution, such transactions are referred for approval to the Board, the Executive Committee, the
Chief Executive Of\ufb01cer, the Chief Financial Of\ufb01cer or as otherwise required. Decisions to acquire or hold
equity positions in the non-trading book that are not of a strategic nature are taken by authorised
persons with delegated authority. Non-traded equity value at risk is monitored monthly and capital
allocation to the risk is included in NatWest Group\u2019s annual Internal Capital Adequacy Assessment Process
(ICAAP). Traded market risk
De\ufb01nition (audited)
Traded market risk is the risk of losses in
trading book positions from \ufb02uctuations in
market variables, such as interest rates, credit
spreads, foreign exchange rates, equity prices,
implied volatilities and asset correlations.
Sources of risk (audited)
NatWest Group is exposed to traded market
risk through trading activities entered into by
NatWest Markets where such risk arises from
market-making and underwriting activity and
by facilitating customer-facing business that
cannot be immediately offset with other
customers or market participants.
From a market risk perspective, activities are
focused on rates; currencies; and traded
credit. NatWest Markets undertakes
transactions in \ufb01nancial instruments including
debt securities, as well as securities \ufb01nancing
and derivatives.
The key categories of traded market risk are
interest rate risk, credit spread risk and
foreign currency price risk.
Trading activities may also give rise to
counterparty credit risk. For further detail
refer to the Credit risk section. Governance (audited)
Risk governance for traded market risk is in
line with the approach outlined in the Risk
management framework section.Traded VaR (1-day 99%) (audited)
The table below shows one-day 99% internal VaR for NatWest Group\u2019s trading portfolios, split by exposure type.
2025
2024
Average
Maximum
Minimum
Period end
Average
Maximum
Minimum
Period end
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Interest rate
3.2
5.4
1.8
2.3
6.6
12.1
3.0
3.8
Credit spread
4.8
7.2
3.1
3.1
7.7
10.1
5.6
5.6
Currency
1.3
4.0
-
0.5
2.0
6.7
0.5
1.3
Equity
0.1
0.1
-
0.1
0.1
0.3
-
-
Diversification
(1)
(3.8)
(2.5)
(6.3)
(5.4)
Total
5.6
9.7
3.4
3.5
10.1
16.2
5.3
5.3
\n
(1)
NatWest Group benefits from diversification across various financial instrument
\n
types, currencies and markets. The extent of the diversification benefit
\n
depends on the correlation between the assets and risk factors in the portfolio
\n
at a particular time. The diversification factor is the sum of the VaR on
\n
individual risk types less the total portfolio VaR.
\n
\u2022
Both interest rate VaR and credit spread VaR decreased on an average basis, compared to 2024.
\n
\u2022
This re\ufb02ects an earlier period of higher market volatility dropping out of the rolling window for VaR calculation during H2 2024.2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.14 Loan impairment provisions
There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, for which we hold expected credit losses (ECL). The calculation of ECL
\n
considers historical, current, and forward-looking information to determine the amount we do not expect to recover. It considers losses on both defaulted exposures and performing exposures
\n
that may default in future. ECL is recognised on drawn exposures, loans commitments, and contingent liabilities.
\n
For accounting policy information refer to Accounting policy 2.3. Further disclosures on credit risk and information on ECL methodology are shown from page 187.
\n
Loan exposure and impairment metrics
\n
The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit loss framework.
2025
2024
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
386,651
363,821
Stage 2
38,582
40,474
Stage 3
4,683
5,930
Of which: individual
1,456
1,285
Of which: collective
3,227
4,645
429,916
410,225
ECL provisions
(3)
- Stage 1
614
598
- Stage 2
796
787
- Stage 3
2,175
2,040
Of which: individual
598
451
Of which: collective
1,577
1,589
3,585
3,425
ECL provision coverage
(4)
- Stage 1 (%)
0.16
0.16
- Stage 2 (%)
2.06
1.94
- Stage 3 (%)
46.44
34.40
0.83
0.83
Continuing operations
Impairment (releases)/losses
ECL charge
(5)
671
359
Stage 1
(204)
(438)
Stage 2
421
360
Stage 3
454
437
Of which: individual
188
192
Of which: collective
266
245
Amounts written off
579
654
Of which: individual
137
144
Of which: collective
442
510
\n
(1)
The table shows gross loans only and excludes amounts that are outside the
\n
scope of the ECL framework. Refer to Financial instruments within the scope of
\n
the IFRS 9 ECL framework for further details. Other financial assets within the
\n
scope of the IFRS 9 ECL framework were cash and balances at central banks
\n
totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 - \u00a34 million) related to assets classified as FVOCI and
\n
\u00a30.1 billion (2024 - \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions divided by loans \u2013
\n
amortised cost and FVOCI. It is calculated on loans and total ECL provisions,
\n
including ECL for other (non-loan) assets and unutilised exposure. Some
\n
segments with a high proportion of debt securities or unutilised exposure may
\n
result in a not meaningful coverage ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial
\n
assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets
\n
classified as FVOCI; and \u00a33 million charge (2024 - \u00a35 million release) related to
\n
contingent liabilities.
Credit risk enhancement and mitigation
For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management \u2013 Credit risk enhancement and mitigation section.
Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00253": { "value": "Credit riskDe\ufb01nition (audited)
Credit risk is the risk that customers,
counterparties or issuers fail to meet a
contractual obligation to settle outstanding
amounts. For the purposes of the credit risk
section, Personal refers to lending to
individuals and Non-Personal refers to lending
to small and medium-sized enterprises,
corporates, banks and other \ufb01nancial
institutions.
Sources of risk (audited)
The principal sources of credit risk for
NatWest Group are lending, off-balance sheet
products, derivatives and securities \ufb01nancing,
and debt securities. NatWest Group is also
exposed to settlement risk through foreign
exchange, trade \ufb01nance and payments
activities.
Governance (audited)
Risk governance for credit risk is in line with
the approach outlined in the Risk
management framework section.
The Credit Risk function provides oversight
and challenge of frontline credit risk
management activities:
\u2022
Establishing credit risk policy, standards
and toolkits which set out the mandatory
limits and parameters required to ensure
that credit risk is managed within risk
appetite and which provide the minimum
standards for the identi\ufb01cation,
assessment, management, monitoring
and reporting of credit risk.
\u2022
Oversight of the \ufb01rst line of defence to
ensure that credit risk remains within the
appetite set by the Board and that it is
being managed adequately and
effectively.
\u2022
Assessing the adequacy of ECL provisions
including approving key IFRS 9 inputs
(such as signi\ufb01cant increase in credit risk
(SICR) thresholds) and any necessary in-
model and post model adjustments
through NatWest Group and business unit
provisions and model committees.
Risk appetite (audited)
Risk appetite for credit risk is in line with the
approach outlined in the Risk management
framework section.
Credit risk appetite is monitored through risk
appetite frameworks tailored to NatWest
Group\u2019s Personal and Non-Personal
segments.
Personal
The Personal credit risk appetite framework
sets limits that control the quality and
concentration of both existing and new
business for each relevant business segment.
Risk appetite measures consider the
segments\u2019 ability to grow sustainably and the
level of losses expected under stress. Credit
risk is further controlled through operational
limits speci\ufb01c to customer or product
characteristics.
Non-Personal
The Non-Personal credit risk appetite
framework has been designed to re\ufb02ect
factors that in\ufb02uence the ability to operate
within risk appetite. Tools such as stress
testing and economic capital are used to
measure credit risk volatility and develop links
between the framework and risk appetite
limits.
The framework is used to manage
concentrations of risk which may arise across
four lenses \u2013 single name, sector, country
and product and asset classes. The
framework is supported by a suite of
transactional acceptance standards that set
out the risk parameters within which
businesses should operate.Problem debt management
(audited)
\n
When stress or \ufb01nancial dif\ufb01culties are
\n
identi\ufb01ed, NatWest Group collaborates closely
\n
with customers to support them.
\n
Personal
\n
Pre-emptive triggers, based on both NatWest
\n
Group and credit reference agency data, are
\n
used to identify customers that may be at
\n
risk of \ufb01nancial dif\ufb01culty. NatWest Group
\n
proactively contacts these customers to offer
\n
support with the aim of preventing further
\n
deterioration of their \ufb01nancial position.
\n
Financial Health and Support
\n
When a customer exceeds an agreed limit or
\n
misses a regular monthly payment, the
\n
customer is contacted by NatWest Group and
\n
requested to remedy the position. If the
\n
situation is not resolved then, where
\n
appropriate, the Financial Health and Support
\n
team become involved and the customer is
\n
supported by skilled debt management staff
\n
who endeavour to provide customers with
\n
bespoke solutions.
\n
If appropriate, a notice of intention to default
\n
and/or a formal demand may be issued to the
\n
customer. The account may also be
\n
registered with credit reference agencies.
\n
Subsequently, the customer\u2019s debt may be
\n
referred to a third-party debt collection
\n
agency or solicitor, to agree an affordable
\n
repayment plan. The sale of unsecured debt
\n
may also be considered as an option.
\n
Non-Personal
\n
NatWest Group uses a range of early warning
\n
indicators to identify customers that may be
\n
exposed to emerging risks, including \ufb01nancial
\n
stress, allowing for increased monitoring
\n
where necessary. Early warning indicators
\n
may be internal, such as a customer\u2019s bank
\n
account activity, or external, such as the
\n
share price of a publicly listed customer.
\n
When these indicators suggest that a
\n
customer is experiencing potential or actual
\n
dif\ufb01culty, or if relationship managers or credit
\n
of\ufb01cers observe other signs of \ufb01nancial
\n
dif\ufb01culty, the customer may be classi\ufb01ed
\n
within the Wholesale Problem Debt
\n
Management framework.
\n
Wholesale Problem Debt Management
\n
framework
\n
This framework focuses on Non-Personal
\n
customers and is designed to provide early
\n
identi\ufb01cation of credit deterioration, support
\n
intelligent risk-taking, ensure fair and
\n
consistent customer outcomes and provide
\n
key insights into Non-Personal lending
\n
portfolios.
\n
There are two classi\ufb01cations in the
\n
framework that apply to non-defaulted
\n
customers that are in \ufb01nancial stress \u2013
\n
Heightened Monitoring and Risk of Credit
\n
Loss.
\n
For the purposes of provisioning, all
\n
exposures categorised as Heightened
\n
Monitoring or Risk of Credit Loss are
\n
categorised as Stage 2 and subject to a
\n
lifetime loss assessment.
\n
The framework also applies to those
\n
customers that have met NatWest Group\u2019s
\n
default criteria (AQ10 exposures). Defaulted
\n
exposures are categorised as Stage 3
\n
impaired for provisioning purposes.
\n
Heightened Monitoring customers are
\n
performing customers that have met certain
\n
characteristics, which have led to signi\ufb01cant
\n
credit deterioration. Characteristics include
\n
trading issues, covenant breaches, material
\n
probability of default (PD) downgrades and
\n
past due facilities.
\n
Heightened Monitoring customers require
\n
pre-emptive actions (outside the customer\u2019s
\n
normal trading patterns) to return or maintain
\n
their facilities within NatWest Group\u2019s current
\n
risk appetite.
\n
Risk of Credit Loss customers are performing
\n
customers that have met the criteria for
\n
Heightened Monitoring and also pose a risk of
\n
credit loss to NatWest Group in the next 12
\n
months should mitigating action not be taken
\n
or not be successful.
\n
The Wholesale Problem Debt Management
\n
framework does not apply to problem debt
\n
management for small and medium-sized
\n
enterprise retail customers. These customers
\n
are, where necessary, managed by specialist
\n
problem debt management teams, depending
\n
on the size of exposure or by the Financial
\n
Health and Support team where a loan has
\n
been impaired.
Customer Lending Support
Where customers meet speci\ufb01c referral
criteria, relationships are supported by the
Customer Lending Support team.
Customer Lending Support works with
corporate and commercial customers in
\ufb01nancial dif\ufb01culty to help them understand
their options and how their restructuring or
repayment strategies can be delivered.
Helping viable customers return to \ufb01nancial
health and restoring a normal banking
relationship is always the preferred outcome.
However, where this is not possible, NatWest
Group works with customers to achieve a
solvent outcome.
Forbearance (audited)
Forbearance occurs when a concession is
made on the contractual terms of a debt in
response to a customer\u2019s \ufb01nancial dif\ufb01culties.
The aim of forbearance is to help the
customer regain \ufb01nancial stability while
reducing risk. To ensure that forbearance is
appropriate for the customer, minimum
standards are applied when assessing,
recording, monitoring and reporting
forbearance.
Personal
Forbearance options include payment
concessions, loan rescheduling (such as
extending contractual maturity), switching to
interest-only payments, suspending interest
or capitalising arrears. This support can be
provided for both mortgages and unsecured
lending.
Non-Personal
Forbearance may involve covenant waivers,
amendments to margins, payment
concessions and loan rescheduling (including
extensions in contractual maturity),
capitalisation of arrears, and debt forgiveness
or debt-for-equity swaps.
Customer PD and facility loss given default
(LGD) are reassessed prior to \ufb01nalising any
forbearance arrangement. The ultimate
outcome of a forbearance strategy is highly
dependent on the co-operation of the
borrower and a viable business or repayment
outcome. If forbearance becomes unsuitable
or is unsuccessful, NatWest Group may
pursue repayment, enforcement of security
or insolvency proceedings, although these are
options of last resort.
IFRS 9 models
(audited)
IFRS 9 models provide PD, exposure at
default (EAD) and LGD for the purpose of
calculating ECL.
Model build
Risk ranking is normally the same as for
internal ratings based (IRB) models to
maintain consistency in risk measurement.
Economic drivers are incorporated, normally
by using stress models. Term structures are
used to assess the risk of loss beyond 12
months that will affect lifetime loss for
exposures which have signi\ufb01cantly
deteriorated (Stage 2) or defaulted (Stage 3).
Model application
Model application involves selecting forward-
looking economic scenarios and assigning
appropriate probability weights.
Model design principles
The modelling of ECL under IFRS 9 adopts
the standard approach of breaking down
credit loss estimation into its component
parts of PD, LGD and EAD. To comply with
IFRS 9, these model parameters are designed
with the following characteristics:
\u2022
Unbiased \u2013 provide a best estimate.
\u2022
Point-in-time \u2013 re\ufb02ecting current
economic conditions as opposed to
through-the-cycle.
\u2022
Economic forecasts \u2013 IFRS 9 PD estimates
and, where appropriate, EAD and LGD
estimates re\ufb02ecting economic forecasts.
\u2022
Lifetime measurement \u2013 parameters are
provided as multi-period term structures
up to behavioural lifetimes.
PD
Personal
Personal PD models follow a discrete multi-
horizon survival approach, predicting
quarterly PDs up to lifetime at account level.
A key driver is the score from related IRB PD
models, with economic forecasts incorporated
through the stress models.
Non-Personal
Non-Personal PD models use a point-in-
time/through-the-cycle framework to provide
point-in-time estimates that re\ufb02ect economic
conditions at the reporting date. A key driver
is the score from related IRB PD models, with
economic forecasts incorporated through the
stress models.
LGD
Personal
Economic forecasts are incorporated for the
secured portfolios, where changes in property
prices can be readily accommodated.
Analysis has shown limited sensitivity to
economic conditions on LGDs for the other
Personal portfolios.
Non-Personal
Economic forecasts are incorporated into
LGD estimates using the existing point-in-
time/through-the-cycle framework. However,
for some portfolios, including low-default,
sovereigns and banks, there is insuf\ufb01cient loss
data to substantiate estimates that vary with
economic conditions.
EAD
Personal
Revolving products employ existing IRB
models as a foundation, with appropriate
adjustments incorporating a term structure
based on time to default. Amortising products
use an amortisation schedule, where a
formula is used to calculate the expected
balance based on remaining terms and
interest rates.
Non-Personal
EAD values rely on product-speci\ufb01c credit
conversion factors (CCFs), closely mirroring
the product segmentation and approach of
the respective IRB model, but without
conservative or downturn assumptions. These
CCFs are estimated over multi-year time
horizons.
Economic drivers (audited)
Introduction
The portfolio segmentation and selection of
economic drivers for IFRS 9 follows the
approach used in stress testing. The stress
models for each portfolio segment (de\ufb01ned by
product or asset class and where relevant,
industry sector and region) are based on a
selected, small number of economic variables
that best explain the movements in portfolio
loss rates. The process to select economic
drivers uses empirical analysis and expert
judgement.
\n\n
Economic drivers (audited)
\n
The most signi\ufb01cant economic drivers for
\n
material portfolios are shown in the table
\n
below:
\n\n \n
Portfolio
Economic drivers
Unemployment rate, sterling
Personal
swap rate, house price index,
mortgages
real wage
Personal
Unemployment rate, sterling
unsecured
swap rate, real wage
Stock price index, gross
Corporates
domestic product (GDP)
Commercial
Stock price index, commercial
real estate
property price index, GDP
\n
Economic scenarios
\n
At 31 December 2025, the range of
\n
anticipated future economic conditions was
\n
de\ufb01ned by a set of four internally developed
\n
scenarios and their respective probabilities. In
\n
addition to the base case, they comprised
\n
upside, downside and extreme downside
\n
scenarios.
\n
For 31 December 2025, the four scenarios
\n
were deemed appropriate in capturing the
\n
uncertainty in economic forecasts and the
\n
non-linearity in outcomes under different
\n
scenarios. These four scenarios were
\n
developed to provide suf\ufb01cient coverage to
\n
current risks faced by the economy and
\n
consider varying outcomes across the labour
\n
market, in\ufb02ation, interest rate, asset price
\n
and economic growth, around which there
\n
remains pronounced levels of uncertainty.
\n
Since 31 December 2024, the near-term
\n
economic growth outlook weakened, with
\n
growth in the second half of 2025 losing
\n
momentum. In\ufb02ation rose to nearly double
\n
the target level of 2% in 2025, with underlying
\n
price pressures remaining \ufb01rm. However,
\n
there are tentative signs of easing in\ufb02ationary
\n
pressures and in\ufb02ation is assumed to fall back
\n
close to the target by the end of 2026. The
\n
peak unemployment rate is higher than at 31
\n
December 2024. The unemployment rate is
\n
assumed to continue to rise in the near-term,
\n
albeit at a slower pace. The Bank of England
\n
is expected to continue cutting interest rates
\n
in a \u2018gradual and careful\u2019 manner with an
\n
assumed terminal rate in the base case of
\n
3.25%, marginally lower compared to 3.5%
\n
assumed at 31 December 2024. Housing
\n
market activities remained resilient in 2025,
\n
with prices expected to grow modestly.
\n
High-level narrative \u2013 potential developments, vulnerabilities and risks
\n\n \n
Outperformance sustained
\u2013 above trend growth as
consumer sentiment recovers
Upside
Steady growth
\u2013 staying close to trend pace
Base case
Growth
Stalling
\u2013 cautious consumer and policy uncertainty
weighs on activity
Downside
Extreme stress
\u2013 extreme fall in GDP, with policy
support to facilitate sharp recovery
Extreme downside
Sticky
\u2013 strong growth and/or wage policies keep
services in\ufb02ation above target in medium term
Upside
Battle won
\u2013 beyond near-term volatility, services
in\ufb02ation continues to ease, 2% target is met on a
In\ufb02ation
sustained basis
Base case
Slow
\u2013 above target in\ufb02ation in 2026 but swiftly falls to
lower levels
Downside
Close to de\ufb02ation
\u2013 in\ufb02ationary pressures diminish
amidst pronounced weakness in demand
Extreme downside
Recovery
\u2013 job growth rebounds strongly, reversing
much of the recent rise in unemployment rate
Upside
Cooling continues
\u2013 gradual loosening continues into
Labour
2026, before improving
Base case
market
Job shedding
\u2013 redundancies, reduced hours, building
slack
Downside
Depression
\u2013 unemployment hits levels close to previous
peaks amid severe stress
Extreme downside
Limited cuts
\u2013 higher growth and in\ufb02ation keep the
Monetary Policy Committee cautious
Upside
Steady
\u2013 rate cutting cycle largely done, two further
Rates
rate cuts
Base case
short-term
Supportive
\u2013 sharp declines to support recovery
Downside
Sharp drop
\u2013 drastic easing in policy to support a sharp
deterioration in the economy
Extreme downside
Above consensus
\u2013 4%
Upside
Rates
Middle
\u2013 3.25%
Base case
long-term
Low
\u2013 2.5% and below
Downside/Extreme downside
\n\n
Economic drivers
(audited)
\n
Main macroeconomic variables
\n
The main macroeconomic variables for each of the four scenarios used for ECL modelling are set out in the table below.
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Upside
Base case
Downside
downside
average
Upside
Base case
Downside
downside
average
Five-year summary
%
%
%
%
%
%
%
%
%
%
GDP
2.1
1.4
0.5
0.1
1.2
2.0
1.3
0.5
(0.2)
1.1
Unemployment rate
4.3
5.1
5.6
7.0
5.3
3.6
4.3
5.0
6.7
4.6
House price index
5.7
3.3
0.6
(3.8)
2.6
5.8
3.5
0.8
(4.3)
2.7
Commercial real estate price
6.1
2.2
(0.3)
(5.0)
1.9
5.4
1.2
(1.0)
(5.7)
1.1
Consumer price index
2.6
2.4
2.4
1.8
2.3
2.4
2.2
3.5
1.6
2.4
Bank of England base rate
4.0
3.5
2.6
1.4
3.2
4.4
4.0
3.0
1.6
3.6
Stock price index
6.2
4.8
2.8
1.1
4.3
6.3
5.0
3.4
1.1
4.5
World GDP
3.7
3.1
2.5
2.2
3.0
3.8
3.2
2.5
1.6
3.0
Probability weight
22.4
45.0
19.5
13.1
23.2
45.0
19.1
12.7
\n
(1)
The \ufb01ve-year summary runs from 2025-2029 for 31 December 2025
\n
and from 2024-2028 for 31 December 2024.
\n
(2)
The table shows compound annual growth rate (CAGR) for GDP,
\n
average levels for the unemployment rate and Bank of England base
\n
rate and Q4 to Q4 CAGR for other parameters.
\n
(3)
An implicit carbon price is an additional cost related to greenhouse gas
\n
emissions as a result of climate transition policy.
\n
Climate transition
\n
Since 2023, NatWest Group has assessed the
\n
implicit contribution to its base case
\n
macroeconomic scenario from changes in UK
\n
transition policy, expressed as an additional
\n
implicit sectoral carbon price
\n
(3)
\n
. Climate
\n
transition policy contribution to the total ECL
\n
was immaterial at the end of 2025.
\n
In 2025, NatWest Group individually assessed
\n
50 active and potential UK transition policies
\n
that had a signi\ufb01cant impact on the cost of
\n
emissions \u2013 for example, the Emissions
\n
Trading Scheme and Renewables Obligation \u2013
\n
and converted them into equivalent implicit
\n
sectoral carbon prices. The prices were
\n
calculated as the cost per tonne of emissions
\n
abated by each policy. Using an internally
\n
developed model, NatWest Group estimated
\n
the impact of sector carbon prices on key
\n
macroeconomic variables such as GDP and
\n
unemployment. Using this analysis, NatWest
\n
Group created two scenarios, the baseline,
\n
which incorporates climate transition related
\n
impacts, and an alternative scenario, which
\n
excludes them.
\n
Comparing ECL under these two scenarios
\n
allowed NatWest Group to estimate an
\n
aggregate macroeconomic impact of the
\n
analysed transition policies and their
\n
contribution to ECL.
\n
The current approach does not include
\n
physical risks and transition risks, beyond the
\n
assessed transition policies. NatWest Group
\n
will continue to enhance and develop the
\n
approach as reliable data and methodology
\n
become available.
\n
Probability weightings of scenarios
\n
NatWest Group applies a quantitative
\n
approach for IFRS 9 multiple economic
\n
scenarios by selecting speci\ufb01c discrete
\n
scenarios that represent the range of risks in
\n
the economic outlook and assigning
\n
appropriate probability weights.
\n
The approach involves comparing GDP paths
\n
for NatWest Group\u2019s scenarios against a set
\n
of 1,000 model simulations to determine the
\n
percentile in the distribution that aligns most
\n
closely with each scenario.
\n
The probability weight for the base case is
\n
determined \ufb01rst using judgement, while
\n
probability weights for the alternative
\n
scenarios are then assigned based on these
\n
percentiles scores.
\n
The weights were broadly comparable to
\n
those used at 31 December 2024 but with
\n
slightly more downside skew. The assigned
\n
probability weights were judged to be aligned
\n
with the subjective assessment of balance of
\n
the risks in the economy. Given the balance
\n
of risks that the economies in which NatWest
\n
Group operates are exposed to, NatWest
\n
Group judges it appropriate that downside-
\n
biased scenarios have higher combined
\n
probability weights than the upside-biased
\n
scenario.
\n
It presents good coverage to the range of
\n
outcomes assumed in the scenarios, including
\n
the potential for a robust recovery on the
\n
upside and exceptionally challenging
\n
outcomes on the downside. A 22.4%
\n
weighting was applied to the upside scenario,
\n
a 45.0% weighting applied to the base case
\n
scenario, a 19.5% weighting applied to the
\n
downside scenario and a 13.1% weighting
\n
applied to the extreme downside scenario.
\n\n
Economic drivers
(audited)
\n
2,600
\n
2,700
\n
2,800
\n
2,900
\n
3,000
\n
3,100
\n
3,200
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK gross domestic product (\u00a3bn)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
7
\n
8
\n
9
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK unemployment rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
Bank of England base rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
100
\n
120
\n
140
\n
160
\n
180
\n
200
\n
220
\n
240
\n
260
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK house prices (index)
\n
Upside
Base case
\n
Downside
Extreme downside
\n\n
Economic drivers
(audited)
\n
Annual \ufb01gures
\n \n \n
GDP - annual growth
Consumer price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
1.4
1.4
1.4
1.4
1.4
2025
3.6
3.6
3.6
3.6
3.6
2026
1.9
1.0
0.3
(3.7)
0.5
2026
2.7
2.3
2.7
0.6
2.3
2027
3.2
1.5
(0.6)
(0.2)
1.3
2027
2.4
2.0
1.8
1.1
1.9
2028
2.3
1.4
0.2
1.4
1.4
2028
2.1
2.0
1.7
1.8
1.9
2029
1.6
1.4
1.4
1.4
1.5
2029
2.0
2.0
2.0
2.0
2.0
2030
1.6
1.4
1.7
1.4
1.5
2030
2.0
2.0
2.0
2.0
2.0
\n\n \n
Unemployment rate - annual average
Bank of England base rate - annual average
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
4.8
4.8
4.8
4.8
4.8
2025
4.24
4.24
4.24
4.24
4.24
2026
4.7
5.4
5.5
6.1
5.3
2026
4.00
3.52
2.94
1.14
3.20
2027
4.1
5.2
6.1
8.1
5.5
2027
4.00
3.25
2.00
0.17
2.77
2028
4.1
5.1
6.0
8.3
5.4
2028
4.00
3.25
2.00
0.39
2.80
2029
4.0
4.9
5.7
7.6
5.2
2029
4.00
3.25
2.00
1.02
2.88
2030
4.0
4.8
5.5
6.9
5.1
2030
4.00
3.25
2.15
1.82
3.02
\n\n \n
House price index - four quarter change
Stock price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
3.0
3.0
3.0
3.0
3.0
2025
11.1
11.1
11.1
11.1
11.1
2026
7.8
3.4
(1.2)
(13.1)
1.3
2026
8.1
3.3
(16.0)
(52.9)
(6.7)
2027
7.2
3.4
(2.8)
(14.1)
1.2
2027
5.1
3.3
7.2
33.9
6.5
2028
5.1
3.4
0.1
(0.2)
2.9
2028
3.5
3.3
7.2
25.3
5.9
2029
5.4
3.4
4.4
7.2
4.5
2029
3.5
3.3
7.2
20.2
5.7
2030
5.6
3.4
4.2
6.6
4.4
2030
3.0
3.3
7.2
16.8
5.5
\n\n \n
Commercial real estate price - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
2.6
2.6
2.6
2.6
2.6
2026
14.1
2.9
(6.8)
(24.1)
-
2027
4.4
2.6
(2.5)
(13.0)
0.6
2028
5.5
1.5
2.8
7.0
3.3
2029
4.2
1.6
2.6
6.8
2.9
2030
2.7
1.6
2.5
6.5
2.5
\n\n
Economic drivers
(audited)
\n
Worst points
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Downside
downside
average
Downside
downside
average
%
Quarter
%
Quarter
%
%
Quarter
%
Quarter
%
GDP
-
Q4 2027
(3.8)
Q4 2026
-
-
Q1 2024
(4.1)
Q4 2025
-
Unemployment rate - peak
6.2
Q4 2027
8.5
Q4 2027
5.6
5.6
Q4 2026
8.5
Q1 2027
4.9
House price index
(2.4)
Q2 2028
(25.9)
Q2 2028
-
(1.9)
Q2 2027
(25.6)
Q3 2027
-
Commercial real estate price
(7.3)
Q2 2027
(33.3)
Q3 2027
-
(10.5)
Q2 2026
(35.0)
Q3 2026
(1.8)
Consumer price index
- highest four quarter change
3.8
Q3 2025
3.8
Q3 2025
3.8
6.1
Q1 2026
3.5
Q1 2024
3.5
Bank of England base rate - extreme level
2.0
Q1 2025
0.1
Q1 2025
2.8
2.0
Q1 2024
0.1
Q1 2024
2.9
Stock price index
(6.7)
Q4 2026
(47.7)
Q4 2026
-
(0.2)
Q4 2025
(27.4)
Q4 2025
-
\n
(1)
The figures show falls relative to the starting period for GDP, house price index,
\n
commercial real estate price and stock price index. For unemployment rate, it
\n
shows highest value through the scenario horizon. For consumer price index, it
\n
shows highest annual percentage change. For Bank of England base rate, it
\n
shows highest or lowest value through the horizon. The calculations are
\n
performed over five years, with a starting point of Q4 2024 for 31 December
\n
2025 scenarios and Q4 2023 for 31 December 2024 scenarios.
Impairment, provisioning and write-
offs (audited)
In the overall assessment of credit risk,
impairment provisioning and write-offs are
used as key indicators of credit quality.
SICR
Defaulted exposures are classi\ufb01ed in Stage 3
and subject to lifetime ECL measurement.
Remaining exposures are assessed for SICR
since initial recognition. Where exposures are
identi\ufb01ed with SICR, they are classi\ufb01ed in
Stage 2 and assessed using a lifetime ECL
measurement. Exposures not considered
deteriorated are assessed with a 12-month
ECL. NatWest Group applies a framework to
identify deterioration, primarily based on
changes in lifetime PD, supported by
additional qualitative high-risk backstops.
\u2022
IFRS 9 lifetime PD assessment (the
primary driver) \u2013 relies on measuring the
relative deterioration in forward-looking
lifetime PD and is assessed monthly. SICR
is determined by comparing the residual
lifetime PD at the balance sheet date with
the lifetime PD at the date of initial
recognition (DOIR). If the current lifetime
PD exceeds the origination PD by more
than a de\ufb01ned threshold, SICR is assumed
to have occurred and the exposure moved
into Stage 2 for a lifetime ECL
assessment. For Non-Personal, a doubling
of PD would indicate a SICR, subject to a
minimum PD uplift of 0.1%. For Personal
portfolios and small and medium-sized
enterprise retail, the criteria vary by risk
band, as detailed in the following table:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Personal
PD bandings (based
\u00a0
risk
on
residual lifetime PD
PD deterioration
bands
calculated at DOIR)
threshold criteria
A
<0.762%
PD@DOIR + 1%
B
<4.306%
PD@DOIR + 3%
C
>=4.306%
1.7 x PD@DOIR
\n
\u2022
Qualitative high-risk backstop assessment
\u2013 supplements the PD assessment to
evaluate whether signi\ufb01cant deterioration
in lifetime risk of default occurred. This
included the mandatory 30+ days past
due backstop, as prescribed by IFRS 9
guidance, as well as other elements such
as forbearance support, Non-Personal
exposures managed within the Wholesale
Problem Debt Management framework,
and adverse credit bureau results for
Personal customers.
\u2022
Persistence (Personal and small and
medium-sized enterprise retail customers
only) \u2013 the persistence rule ensures that
accounts which have met the criteria for
PD driven deterioration are still considered
to be signi\ufb01cantly deteriorated for three
months thereafter. This additional rule
enhances the timeliness of capture into
Stage 2. The persistence rule is applied to
PD driven deterioration only.
Lifetime
The de\ufb01nitions of initial recognition and asset
lifetime are important considerations when
determining the amount of lifetime losses to
be applied.
\u2022
Initial recognition refers to the date that a
transaction (or account) is \ufb01rst recognised
on the balance sheet, with the PD at that
point serving as the basis for subsequent
determination of SICR, as detailed above.
\u2022
For asset lifetime, the approach is aligned
with IFRS 9 requirements:
o
Term lending \u2013 the contractual
maturity date is used and adjusted
for behavioural trends where
applicable, such as expected
prepayment and amortisation.
o
Revolving facilities \u2013 for Personal
portfolios (excluding credit cards),
asset duration is determined by
behavioural life, which was typically
greater than contractual life. For the
Non-Personal portfolios, asset
duration is based on annual
customer review schedules.
Governance
The IFRS 9 PD, EAD and LGD models are
subject to NatWest Group\u2019s model risk policy,
which stipulates periodic model monitoring
and, re-validation and de\ufb01nes approval
procedures and authorities according to
model materiality. Post model adjustments are
applied where management deemed them
necessary to ensure an adequate level of
overall ECL provision. All post model
adjustments undergo review, challenge and
approval by the relevant model or provisioning
committees.
Post model adjustments will remain a key
focus area of NatWest Group\u2019s ongoing ECL
adequacy assessment process. A
comprehensive framework has been
established that incorporates analysis of
diverse economic data, external benchmarks
and portfolio performance trends with a
particular focus on segments (across both
Personal and Non-Personal portfolios) that
may be more susceptible to speci\ufb01c risk
factors.
Measurement uncertainty and ECL
sensitivity analysis (audited)
The recognition and measurement of ECL is
complex and requires signi\ufb01cant judgement
and estimation, especially during times of
economic volatility and uncertainty. This
includes the formulation and incorporation of
multiple forward-looking economic conditions
into ECL to meet the measurement objectives
of IFRS 9. The ECL provision is sensitive to the
model inputs and economic assumptions used
in the estimation.
Simulations were conducted to assess the
impact of various economic scenarios,
including base case, upside, downside and
extreme downside scenarios. The potential
ECL impacts re\ufb02ected the simulated impact as
at 31 December 2025. In the simulations,
NatWest Group assumed that the economic
macro variables associated with each
scenario would replace the existing base case
economic assumptions, giving them a 100%
probability weighting and therefore serving as
a single economic scenario. These scenarios
were applied to all modelled portfolios in the
table, with the simulation affecting both PDs
and LGDs. Post model adjustments included in
the ECL estimates were adjusted in line with
the modelled ECL movements. However,
adjustments that were judgemental in nature,
such as those for deferred model calibrations
and economic uncertainty, were not
automatically recalculated. Instead, they will
be re-evaluated by management through ECL
governance for any new economic scenario
outlook.
As expected, the scenarios created varying
impacts on ECL by portfolio, and these
impacts were deemed reasonable. The
simulations assumed that existing modelled
relationships between key economic variables
and drivers would hold. However, in practice,
other factors such as potential changes in
customer behaviour and policy changes could
also impact the wider availability of credit.
The focus of the simulations was on ECL
provisioning requirements for performing
exposures in Stage 1 and Stage 2. The
simulations were run on a stand-alone basis
and were independent of each other. Scenario
impacts on SICR were considered when
evaluating the ECL movements of Stage 1
and Stage 2. In all scenarios, the total
exposure remained the same, but exposure
by stage varied.
Stage 3 provisions are not subject to the same
level of measurement uncertainty, as default is
an observed event as at the balance sheet
date and defaulted LGD is typically more
impacted by borrower speci\ufb01c factors rather
than economics. Therefore, Stage 3 provisions
were not considered in this analysis. NatWest
Group\u2019s core criterion for identifying a SICR is
based on PD deterioration. Under the
simulations, changes in PDs resulted in
exposures moving between Stage 1 and
Stage 2, contributing to the ECL impact.
\n\n
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 modelled loans (\u00a3m)
Retail Banking - mortgages
181,869
182,357
183,665
181,119
176,988
Retail Banking - unsecured
12,761
12,858
13,232
12,601
11,683
Non-Personal - property
31,809
31,924
31,995
31,764
23,027
Non-Personal - non-property
141,924
142,660
142,972
141,841
118,828
368,363
369,799
371,864
367,325
330,526
Stage 1 modelled ECL (\u00a3m)
Retail Banking - mortgages
42
42
41
42
43
Retail Banking - unsecured
293
300
288
291
278
Non-Personal - property
66
46
38
71
148
Non-Personal - non-property
189
156
144
202
353
590
544
511
606
822
Stage 1 coverage (%)
Retail Banking - mortgages
0.02%
0.02%
0.02%
0.02%
0.02%
Retail Banking - unsecured
2.30%
2.33%
2.18%
2.31%
2.38%
Non-Personal - property
0.21%
0.14%
0.12%
0.22%
0.64%
Non-Personal - non-property
0.13%
0.11%
0.10%
0.14%
0.30%
0.16%
0.15%
0.14%
0.16%
0.25%
Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
15,821
15,333
14,025
16,571
20,702
Retail Banking - unsecured
3,621
3,524
3,150
3,781
4,699
Non-Personal - property
3,072
2,957
2,886
3,117
11,854
Non-Personal - non-property
15,721
14,985
14,673
15,804
38,817
38,235
36,799
34,734
39,273
76,072
Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
36
33
29
38
55
Retail Banking - unsecured
388
378
326
408
516
Non-Personal - property
55
47
42
59
351
Non-Personal - non-property
305
263
242
317
880
784
721
639
822
1,802
Stage 2 coverage (%)
Retail Banking - mortgages
0.23%
0.22%
0.21%
0.23%
0.27%
Retail Banking - unsecured
10.72%
10.73%
10.35%
10.79%
10.98%
Non-Personal - property
1.79%
1.59%
1.46%
1.89%
2.96%
Non-Personal - non-property
1.94%
1.76%
1.65%
2.01%
2.27%
2.05%
1.96%
1.84%
2.09%
2.37%
\n
For the notes to this table refer to the following page.
\n\n
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 and Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
197,690
197,690
197,690
197,690
197,690
Retail Banking - unsecured
16,382
16,382
16,382
16,382
16,382
Non-Personal - property
34,881
34,881
34,881
34,881
34,881
Non-Personal - non-property
157,645
157,645
157,645
157,645
157,645
406,598
406,598
406,598
406,598
406,598
Stage 1 and Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
78
75
70
80
98
Retail Banking - unsecured
681
678
614
699
794
Non-Personal - property
121
93
80
130
499
Non-Personal - non-property
494
419
386
519
1,233
1,374
1,265
1,150
1,428
2,624
Stage 1 and Stage 2 coverage (%)
Retail Banking - mortgages
0.04%
0.04%
0.04%
0.04%
0.05%
Retail Banking - unsecured
4.16%
4.14%
3.75%
4.27%
4.85%
Non-Personal - property
0.35%
0.27%
0.23%
0.37%
1.43%
Non-Personal - non-property
0.31%
0.27%
0.24%
0.33%
0.78%
0.34%
0.31%
0.28%
0.35%
0.65%
Reconciliation to Stage 1 and Stage 2
ECL (\u00a3m)
ECL on modelled exposures
1,374
1,265
1,150
1,428
2,624
ECL on non-modelled exposures
36
36
36
36
36
Total Stage 1 and Stage 2 ECL (\u00a3m)
1,410
1,301
1,186
1,464
2,660
Variance to actual total Stage 1 and
Stage 2 ECL (\u00a3m)
-
(109)
(224)
54
1,250
Reconciliation to Stage 1 and Stage 2
flow exposures (\u00a3m)
Modelled loans
406,598
406,598
406,598
406,598
406,598
Non-modelled loans
19,264
19,264
19,264
19,264
19,264
Other asset classes
160,130
160,130
160,130
160,130
160,130
\n
(1)
Reflects ECL for all modelled exposure in scope for IFRS 9. The analysis
\n
excludes non-modelled portfolios and exposure relating to bonds and cash.
\n
(2)
All simulations are run on a stand-alone basis and are independent of each
\n
other, with the potential ECL impact reflecting the simulated impact as at 31
\n
December 2025. The simulations change the composition of Stage 1 and
\n
Stage 2 exposure but total exposure was unchanged under each scenario as
\n
the loan population was static.
\n
(3)
Refer to the Economic drivers section for details of economic scenarios.
\n
(4)
Refer to the NatWest Group 2024 Annual Report and Accounts for 2024
\n
comparatives.
\n
\u2022
If the economics were as negative as observed in the extreme downside (i.e. 100% probability weighting), total Stage 1 and Stage 2 ECL was simulated to increase by \u00a31.3 billion (approximately
\n
90%). In this scenario, Stage 2 exposure increased signi\ufb01cantly and was the key driver of the simulated ECL rise. The movement in Stage 2 balances in the other simulations was less signi\ufb01cant.
\n
\u2022
In the Non-Personal portfolio, there was a signi\ufb01cant increase in ECL under the extreme downside scenario on non-property portfolios, driven by a signi\ufb01cant deterioration in the stock index.
\n
\u2022
Given the continued economic uncertainty, NatWest Group utilised a framework of quantitative and qualitative measures to support the levels of ECL coverage. This included economic data, credit
\n
performance insights and problem debt trends. This was particularly important for consideration of post model adjustments.
ECL post model adjustments (audited)
The table below shows ECL post model adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0
Private Banking
\u00a0 \u00a0
\u00a0
Retail Banking
& Wealth
Commercial
\u00a0
\u00a0
Mortgages
Other
Management
& Institutional
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Deferred model calibrations
-
-
1
14
15
Economic uncertainty
44
42
11
149
246
Other adjustments
-
19
-
16
35
Total
44
61
12
179
296
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
33
38
4
73
148
- Stage 2
11
20
8
106
145
- Stage 3
-
3
-
-
3
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Deferred model calibrations
-
-
1
18
19
Economic uncertainty
90
22
8
179
299
Other adjustments
-
-
-
18
18
Total
90
22
9
215
336
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
58
9
5
94
166
- Stage 2
26
13
4
119
162
- Stage 3
6
-
-
2
8
\n
Post model adjustments reduced since 31 December 2024, re\ufb02ecting the removal of COVID-19 post model adjustments combined with updates to parameters.
\u2022
Retail Banking
\u2013 As
at
31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a386 million (2024 \u2013 \u00a3112 million).
This reduction was driven by a revision to the
cost of
living
post model adjustment, standing at \u00a386 million (2024 \u2013 \u00a3105 million), and was the sole remaining
economic uncertainty
post model adjustment.
This change was based on a review
of back-
testing. Despite ongoing economic and geopolitical uncertainty, the Retail Banking portfolios
demonstrated
resilience, supported by a robust risk appetite. The
cost of living
post model adjustment
continued to address the risk in segments of the Retail Banking portfolio that were more susceptible to affordability challenges. It focused on key affordability factors, including over-indebted
borrowers, poor credit card affordability status and lower income customers in fuel poverty.
\u2022
A \u00a319 million post model adjustment was recognised as a judgemental measure while additional loss data is accumulated on the recently migrated Sainsbury\u2019s Bank lending portfolio.
\u2022
Commercial & Institutional
\u2013 As at 31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a3149 million (2024 \u2013 \u00a3179 million). The reduction was driven by the
retirement of COVID-19 post model adjustments which were associated with government scheme lending (2024 \u2013 \u00a329 million). The continued economic uncertainty post model adjustments
re\ufb02ected downgrades to risk pro\ufb01le that were applied to the sectors that were considered most at risk from the current economic and geopolitical headwinds.
\u2022
The remaining \u00a330 million (2024 \u2013 \u00a336 million) of post model adjustments were for deferred model calibrations relating to re\ufb01nance risk and to mitigate the effect of operational timing delays in the
identi\ufb01cation and \ufb02agging of a signi\ufb01cant increase in credit risk.
Credit risk - Banking activities
Introduction
This section details the credit risk pro\ufb01le of NatWest Group\u2019s banking activities. Refer to Accounting policy 2.3 and Note 14 to the consolidated \ufb01nancial statements for policies and critical judgements
relating to impairment loss determination.
Financial instruments within the scope of the IFRS 9 ECL framework (audited)
Refer to Note 9 to the consolidated \ufb01nancial statements for balance sheet analysis of \ufb01nancial assets that are classi\ufb01ed as amortised cost or fair value through other comprehensive income (FVOCI),
the starting point for IFRS 9 ECL framework assessment.
\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
31 December 2025
31 December 2024
\u00a0
Gross
ECL
Net
Gross
ECL
Net
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Balance sheet total gross amortised cost and FVOCI
593.9
\u00a0 \u00a0
567.2
\u00a0 \u00a0
In scope of IFRS 9 ECL framework
592.4
\u00a0 \u00a0
564.4
\u00a0 \u00a0
% in scope
100%
\u00a0 \u00a0
100%
\u00a0 \u00a0
Loans to customers - in scope - amortised cost
422.9
3.6
419.3
404.2
3.4
400.8
Loans to customers - in scope - FVOCI
0.2
-
0.2
-
-
-
Loans to banks - in scope - amortised cost
6.8
-
6.8
6.0
-
6.0
Total loans - in scope
429.9
3.6
426.3
410.2
3.4
406.8
Stage 1
386.6
0.6
386.0
363.8
0.6
363.2
Stage 2
38.6
0.8
37.8
40.5
0.8
39.7
Stage 3
4.7
2.2
2.5
5.9
2.0
3.9
Other financial assets - in scope - amortised cost
120.7
-
120.7
116.4
-
116.4
Other financial assets - in scope - FVOCI
41.8
-
41.8
37.8
-
37.8
Total other financial assets - in scope
162.5
-
162.5
154.2
-
154.2
Stage 1
161.5
-
161.5
153.4
-
153.4
Stage 2
1.0
-
1.0
0.8
-
0.8
Out of scope of IFRS 9 ECL framework
1.5
na
1.5
2.8
na
2.8
Loans to customers - out of scope - amortised cost
(0.6)
na
(0.6)
(0.5)
na
(0.5)
Loans to banks - out of scope - amortised cost
0.2
na
0.2
0.1
na
0.1
Other financial assets - out of scope - amortised cost
1.7
na
1.7
3.2
na
3.2
Other financial assets - out of scope - FVOCI
0.2
na
0.2
-
na
-
na = not applicable
The assets outside the scope of IFRS 9 ECL framework were as follows:
\u2022
Settlement balances, items in the course of collection, cash balances and other non-credit risk assets of \u00a31.8 billion (2024 \u2013 \u00a33.3 billion). These were assessed as having no ECL unless there was
evidence that they were defaulted.
\u2022
Equity shares of \u00a30.1 billion (2024 \u2013 \u00a30.2 billion) as not within the IFRS 9 ECL framework by de\ufb01nition.
\u2022
Fair value adjustments on loans hedged by interest rate swaps, where the underlying loan was within the IFRS 9 ECL scope of \u00a3(0.3) billion (2024 \u2013 \u00a3(0.5) billion).
Contingent liabilities and commitments
Total
contingent liabilities (including \ufb01nancial guarantees) and commitments within IFRS 9 ECL scope of \u00a3147.2 billion (2024 \u2013 \u00a3140.0 billion) comprised Stage 1 \u00a3135.8 billion (2024 \u2013 \u00a3129.8 billion);
Stage 2 \u00a310.8 billion (2024 \u2013 \u00a39.4 billion); and Stage 3 \u00a30.6 billion (2024 \u2013 \u00a30.8 billion). The ECL relating to off-balance sheet exposures was \u00a30.1 billion (2024 \u2013 \u00a30.1 billion). The total ECL in the
remainder of the Credit risk section of \u00a33.6 billion (2024 \u2013 \u00a33.4 billion) included ECL for both on and off-balance sheet exposures.
\n\n
Segment analysis \u2013 portfolio summary (audited)
\n
The table below shows gross loans and ECL, by segment and stage, within the scope of the IFRS 9 ECL framework.
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
196,325
17,552
138,769
34,005
386,651
196,325
14,140
2,355
84
3,412
136,414
33,921
Stage 2
19,113
1,115
18,289
65
38,582
19,113
337
32
18
778
18,257
47
Stage 3
2,231
348
2,102
2
4,683
2,231
260
44
2
88
2,058
-
Of which: individual
-
276
1,180
-
1,456
-
188
5
-
88
1,175
-
Of which: collective
2,231
72
922
2
3,227
2,231
72
39
2
-
883
-
Total
217,669
19,015
159,160
34,072
429,916
217,669
14,737
2,431
104
4,278
156,729
33,968
ECL provisions
(3)
Stage 1
335
13
256
10
614
335
3
1
3
10
255
7
Stage 2
424
13
357
2
796
424
1
-
1
12
357
1
Stage 3
1,075
50
1,048
2
2,175
1,075
24
11
2
26
1,037
-
Of which: individual
-
50
548
-
598
-
24
5
-
26
543
-
Of which: collective
1,075
-
500
2
1,577
1,075
-
6
2
-
494
-
Total
1,834
76
1,661
14
3,585
1,834
28
12
6
48
1,649
8
ECL provisions coverage
(4)
Stage 1 (%)
0.17
0.07
0.18
0.03
0.16
0.17
0.02
0.04
3.57
0.29
0.19
0.02
Stage 2 (%)
2.22
1.17
1.95
3.08
2.06
2.22
0.30
-
5.56
1.54
1.96
2.13
Stage 3 (%)
48.18
14.37
49.86
100.00
46.44
48.18
9.23
25.00
100.00
29.55
50.39
-
Total
0.84
0.40
1.04
0.04
0.83
0.84
0.19
0.49
5.77
1.12
1.05
0.02
Impairment (releases)/losses
ECL (release)/charge
(5)
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Stage 1
(67)
(9)
(124)
(4)
(204)
(67)
(1)
(1)
4
(8)
(123)
(8)
Stage 2
295
9
116
1
421
295
2
1
1
7
115
-
Stage 3
209
10
233
2
454
209
4
1
2
6
232
-
Of which: individual
-
10
178
-
188
-
4
-
-
6
178
-
Of which: collective
209
-
55
2
266
209
-
1
2
-
54
-
Total
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Amounts written-off
373
1
205
-
579
373
1
6
-
-
199
-
Of which: individual
-
1
136
-
137
-
1
-
-
-
136
-
Of which: collective
373
-
69
-
442
373
-
6
-
-
63
-
\n
For the notes to this table refer to the following page.
\n\n
Segment analysis \u2013 portfolio summary (audited)
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
182,366
17,155
128,988
35,312
363,821
182,366
13,726
2,226
-
3,429
126,762
35,312
Stage 2
24,242
844
15,339
49
40,474
24,242
352
42
-
492
15,297
49
Stage 3
3,268
322
2,340
-
5,930
3,268
251
52
-
71
2,288
-
Of which: individual
-
233
1,052
-
1,285
-
162
5
-
71
1,047
-
Of which: collective
3,268
89
1,288
-
4,645
3,268
89
47
-
-
1,241
-
Total
209,876
18,321
146,667
35,361
410,225
209,876
14,329
2,320
-
3,992
144,347
35,361
ECL provisions
(3)
Stage 1
279
16
289
14
598
279
2
3
-
14
286
14
Stage 2
428
12
346
1
787
428
1
-
-
11
346
1
Stage 3
1,063
36
941
-
2,040
1,063
21
15
-
15
926
-
Of which: individual
-
36
415
-
451
-
21
7
-
15
408
-
Of which: collective
1,063
-
526
-
1,589
1,063
-
8
-
-
518
-
Total
1,770
64
1,576
15
3,425
1,770
24
18
-
40
1,558
15
ECL provisions coverage
(4)
Stage 1 (%)
0.15
0.09
0.22
0.04
0.16
0.15
0.01
0.13
-
0.41
0.23
0.04
Stage 2 (%)
1.77
1.42
2.26
2.04
1.94
1.77
0.28
-
-
2.24
2.26
2.04
Stage 3 (%)
32.53
11.18
40.21
-
34.40
32.53
8.37
28.85
-
21.13
40.47
-
Total
0.84
0.35
1.07
0.04
0.83
0.84
0.17
0.78
-
1.00
1.08
0.04
Impairment (releases)/losses
ECL (release)/charge
(5)
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Stage 1
(208)
(11)
(205)
(14)
(438)
(208)
(2)
(1)
-
(9)
(204)
(14)
Stage 2
278
(1)
79
4
360
278
2
1
-
(3)
78
4
Stage 3
212
1
224
-
437
212
1
1
-
-
223
-
Of which: individual
-
1
191
-
192
-
1
(1)
-
-
192
-
Of which: collective
212
-
33
-
245
212
-
2
-
-
31
-
Total
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Amounts written-off
430
1
223
-
654
430
1
2
-
-
221
-
Of which: individual
-
1
143
-
144
-
1
-
-
-
143
-
Of which: collective
430
-
80
-
510
430
-
2
-
-
78
-
\n
(1)
The table shows gross loans only and excludes amounts that were outside the scope of the ECL framework. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 \u2013 \u00a34 million) related to assets classified as FVOCI and \u00a30.1 billion (2024 \u2013 \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions, including ECL for other non-loan assets and unutilised exposure, divided by loans \u2013 amortised cost and FVOCI. Some segments with a high proportion of debt securities or unutilised exposure may result in a not meaningful (nm) coverage
\n
ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets classified as FVOCI and includes a \u00a33 million charge (2024 - \u00a35 million release) related to contingent liabilities.
\n\n
Segmental loans and impairment metrics (audited)
\n
\u2022
Retail Banking
\u2013 Balance sheet growth during the year was mainly due to mortgages.
\n
Within the Unsecured portfolios, alongside organic growth in the credit cards and personal
\n
loans portfolios, the acquisition of the Sainsbury\u2019s Bank portfolios further contributed to the
\n
balance sheet growth. Asset quality was maintained during the year, re\ufb02ecting ongoing
\n
customer resilience and robust risk appetite. Alongside steady portfolio performance, good
\n
book and total ECL coverage for Retail Banking remained broadly consistent with 31
\n
December 2024. Underlying ECL coverage increased due to growth in unsecured lending,
\n
including the acquisition of the Sainsbury\u2019s Bank portfolio earlier in 2025, but this was offset
\n
by balance sheet management actions, including a mortgage securitisation transaction and
\n
unsecured debt sales. The proportion of Stage 3 loans declined over the year, mainly as a
\n
result of the balance sheet management actions described above, notably the mortgage
\n
securitisation, which reduced Stage 3 loans by \u00a30.8 billion. Furthermore, there was an
\n
enhancement to the mortgage de\ufb01nition of default systems and process, resulting in
\n
approximately \u00a30.4 billion of loans migrating from Stage 3 back to the good book. While
\n
default performance was broadly stable overall, unsecured \ufb02ows into Stage 3 increased
\n
year-on-year, driven by strategic growth and seasoning of credit card balances since 2022.
\n
\u2022
Commercial & Institutional
\u2013 Balance sheet growth in the year was primarily in corporates
\n
and institutions and was re\ufb02ected in Stage 1. Despite the increase in performing book
\n
exposures, performing book provisions decreased, driven by reductions in post model
\n
adjustments for economic uncertainty. Total provision balance growth primarily re\ufb02ected
\n
the impact of a small number of individual charges in Stage 3. Despite the increase in
\n
Stage 3 ECL, loan balances \ufb02owing into Stage 3 were lower than the prior year. The
\n
combination of increased Stage 3 charges combined with lower in\ufb02ows into Stage 3 drove
\n
the increase in Stage 3 ECL provisions coverage. Total book coverage remained broadly
\n
similar year-on-year, as the increase in Stage 3 ECL provisions coverage was more than
\n
offset by reductions in performing book coverage. The full year 2025 total charge was
\n
higher compared to 2024, primarily as the good book release in 2025 was notably lower
\n
than the release in 2024. The lower release in 2025 re\ufb02ected lower reductions in post
\n
model adjustments compared to 2024.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows \ufb01nancial assets and off-balance sheet exposures gross of ECL and related ECL provisions, impairment and past due by sector, asset quality and geographical region.
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- UK
215,220
8,311
11,401
234,932
101,441
45,700
1,477
148,618
383,550
- Other Europe
9
-
-
9
7,010
14,059
351
21,420
21,429
- RoW
-
-
-
-
9,778
14,697
462
24,937
24,937
Loans by stage
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Stage 1
197,939
5,988
8,977
212,904
97,779
73,959
2,009
173,747
386,651
- Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Stage 3
1,339
242
956
2,537
1,990
141
15
2,146
4,683
- Of which: individual
167
1
25
193
1,112
136
15
1,263
1,456
- Of which: collective
1,172
241
931
2,344
878
5
-
883
3,227
Loans - past due analysis
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Not past due
212,492
7,993
10,388
230,873
114,895
74,257
2,275
191,427
422,300
- Past due 1-30 days
1,510
71
92
1,673
2,261
137
-
2,398
4,071
- Past due 31-90 days
469
86
130
685
274
8
-
282
967
- Past due 91-180 days
275
62
104
441
110
6
-
116
557
- Past due >180 days
483
99
687
1,269
689
48
15
752
2,021
Loans - Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Not past due
14,521
1,979
1,335
17,835
17,605
343
266
18,214
36,049
- Past due 1-30 days
1,138
41
48
1,227
610
5
-
615
1,842
- Past due 31-90 days
292
61
85
438
245
8
-
253
691
Weighted average life
(2)
- ECL measurement (years)
9
4
6
5
7
4
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.46
3.68
5.05
0.77
1.18
0.14
5.40
0.83
0.80
- Basel (%)
0.62
3.91
3.52
0.85
1.04
0.15
5.40
0.75
0.80
ECL provisions by geography
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- UK
270
520
1,088
1,878
1,367
103
5
1,475
3,353
- Other Europe
2
-
-
2
104
10
1
115
117
- RoW
-
-
-
-
61
42
12
115
115
\n
For the notes to this table refer to page 207.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages
(1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- Stage 1
45
125
172
342
228
37
7
272
614
- Stage 2
36
205
185
426
360
5
5
370
796
- Stage 3
191
190
731
1,112
944
113
6
1,063
2,175
- Of which: individual
16
1
12
29
453
110
6
569
598
- Of which: collective
175
189
719
1,083
491
3
-
494
1,577
ECL provisions coverage (%)
0.13
6.26
9.54
0.80
1.30
0.21
0.79
0.87
0.83
- Stage 1 (%)
0.02
2.09
1.92
0.16
0.23
0.05
0.35
0.16
0.16
- Stage 2 (%)
0.23
9.85
12.60
2.18
1.95
1.40
1.88
1.94
2.06
- Stage 3 (%)
14.26
78.51
76.46
43.83
47.44
80.14
40.00
49.53
46.44
ECL (release)/charge
(142)
263
329
450
168
56
(3)
221
671
- UK
(144)
263
329
448
148
60
(6)
202
650
- Other Europe
2
-
-
2
18
1
-
19
21
- RoW
-
-
-
-
2
(5)
3
-
-
Amounts written-off
92
118
170
380
199
-
-
199
579
Loans by residual maturity
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- \u22641 year
2,764
1,856
2,736
7,356
33,768
52,130
1,765
87,663
95,019
- >1 and \u22645 year
8,332
6,452
6,898
21,682
51,723
18,262
77
70,062
91,744
- > 5 and \u2264 15 year
42,759
3
1,772
44,534
24,136
4,016
290
28,442
72,976
- > 15 year
161,374
-
(5)
161,369
8,602
48
158
8,808
170,177
Other financial assets by asset quality
(3)
-
-
-
-
4,513
28,490
129,532
162,535
162,535
- AQ1-AQ4
-
-
-
-
4,506
28,301
129,532
162,339
162,339
- AQ5-AQ8
-
-
-
-
7
189
-
196
196
Off-balance sheet
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- Loan commitments
14,799
22,696
7,514
45,009
75,723
21,555
501
97,779
142,788
- Contingent liabilities
-
-
36
36
2,881
1,476
-
4,357
4,393
Off-balance sheet by asset quality
(3)
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- AQ1-AQ4
13,926
415
6,140
20,481
50,709
21,030
114
71,853
92,334
- AQ5-AQ8
859
22,205
1,283
24,347
27,525
1,924
12
29,461
53,808
- AQ9
4
11
12
27
61
-
375
436
463
- AQ10
10
65
115
190
309
77
-
386
576
\n
For the notes to this table refer to page 207.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- UK
209,846
6,930
9,749
226,525
97,409
43,412
562
141,383
367,908
- Other Europe
-
-
-
-
6,311
14,747
766
21,824
21,824
- RoW
-
-
-
-
8,014
12,162
317
20,493
20,493
Loans by stage
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Stage 1
186,250
4,801
7,267
198,318
94,991
69,021
1,491
165,503
363,821
- Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Stage 3
2,535
176
860
3,571
2,279
59
21
2,359
5,930
- Of which: individual
141
-
26
167
1,046
51
21
1,118
1,285
- Of which: collective
2,394
176
834
3,404
1,233
8
-
1,241
4,645
Loans - past due analysis
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Not past due
206,739
6,721
8,865
222,325
107,855
70,055
1,627
179,537
401,862
- Past due 1-30 days
1,404
50
70
1,524
2,530
211
-
2,741
4,265
- Past due 31-90 days
580
51
99
730
398
2
18
418
1,148
- Past due 91-180 days
408
41
96
545
139
49
-
188
733
- Past due >180 days
715
67
619
1,401
812
4
-
816
2,217
Loans - Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Not past due
19,939
1,889
1,521
23,349
13,485
1,228
133
14,846
38,195
- Past due 1-30 days
853
31
37
921
640
11
-
651
1,572
- Past due 31-90 days
269
33
64
366
339
2
-
341
707
Weighted average life
(2)
- ECL measurement (years)
8
4
6
6
6
2
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.51
3.23
4.59
0.76
1.24
0.16
5.51
0.86
0.80
- Basel (%)
0.68
3.65
3.18
0.87
1.11
0.15
4.16
0.76
0.82
ECL provisions by geography
462
381
969
1,812
1,504
90
19
1,613
3,425
- UK
462
381
969
1,812
1,335
37
12
1,384
3,196
- Other Europe
-
-
-
-
109
9
-
118
118
- RoW
-
-
-
-
60
44
7
111
111
\n
For the notes to this table refer to the following page.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
462
381
969
1,812
1,504
90
19
1,613
3,425
- Stage 1
77
77
130
284
264
38
12
314
598
- Stage 2
60
186
183
429
344
12
2
358
787
- Stage 3
325
118
656
1,099
896
40
5
941
2,040
- Of which: individual
11
-
17
28
382
36
5
423
451
- Of which: collective
314
118
639
1,071
514
4
-
518
1,589
ECL provisions coverage (%)
0.22
5.50
9.94
0.80
1.35
0.13
1.16
0.88
0.83
- Stage 1 (%)
0.04
1.60
1.79
0.14
0.28
0.06
0.80
0.19
0.16
- Stage 2 (%)
0.28
9.52
11.28
1.74
2.38
0.97
1.50
2.26
1.94
- Stage 3 (%)
12.82
67.05
76.28
30.78
39.32
67.80
23.81
39.89
34.40
ECL (release)/charge
8
115
161
284
55
19
1
75
359
- UK
8
115
161
284
43
1
-
44
328
- Other Europe
-
-
-
-
17
(7)
-
10
10
- RoW
-
-
-
-
(5)
25
1
21
21
Amounts written-off
18
102
313
433
221
-
-
221
654
Loans by residual maturity
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- \u22641 year
3,367
3,903
3,186
10,456
34,929
54,971
822
90,722
101,178
- >1 and \u22645 year
11,651
3,027
5,551
20,229
48,075
10,967
488
59,530
79,759
- > 5 and \u2264 15 year
45,454
-
1,006
46,460
20,623
4,270
298
25,191
71,651
- > 15 year
149,374
-
6
149,380
8,107
113
37
8,257
157,637
Other financial assets by asset quality
(3)
-
-
-
-
3,644
31,102
119,502
154,248
154,248
- AQ1-AQ4
-
-
-
-
3,639
30,743
119,502
153,884
153,884
- AQ5-AQ8
-
-
-
-
5
359
-
364
364
Off-balance sheet
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- Loan commitments
13,806
20,135
7,906
41,847
72,940
20,341
239
93,520
135,367
- Contingent liabilities
-
-
41
41
3,024
1,584
-
4,608
4,649
Off-balance sheet by asset quality
(3)
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- AQ1-AQ4
12,951
510
6,568
20,029
47,896
20,063
155
68,114
88,143
- AQ5-AQ8
839
19,276
1,336
21,451
27,657
1,813
21
29,491
50,942
- AQ9
1
12
17
30
19
-
63
82
112
- AQ10
15
337
26
378
392
49
-
441
819
\n
(1)
Includes a portion of Private Banking & Wealth Management lending secured against residential real estate, in line with ECL calculation methodology. Private Banking & Wealth Management and RBS International mortgages are reported in the UK, reflecting the country of lending origination and
\n
includes crown dependencies.
\n
(2)
Not within the scope of the Independent auditors\u2019 report.
\n
(3)
AQ bandings are based on Basel PDs and mapping is as follows:
\n\n \n
Internal asset quality band
Probability of default range
Indicative S&P rating
Internal asset quality band
Probability of default range
Indicative S&P rating
AQ1
0% - 0.034%
AAA to AA
AQ6
1.076% - 2.153%
BB- to B+
AQ2
0.034% - 0.048%
AA to AA-
AQ7
2.153% - 6.089%
B+ to B
AQ3
0.048% - 0.095%
A+ to A
AQ8
6.089% - 17.222%
B- to CCC+
AQ4
0.095% - 0.381%
BBB+ to BBB-
AQ9
17.222% - 100%
CCC to C
AQ5
0.381% - 1.076%
BB+ to BB
AQ10
100%
D
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows ECL by stage, for the Personal portfolio and Non-Personal portfolio, including the three largest borrowing sector clusters included in corporate and other.
\n\n \n
Loans - amortised cost and FVOCI
Off-balance sheet
ECL provisions
Stage 1
Stage 2
Stage 3
Total
Loan commitments
Contingent liabilities
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
212,904
19,500
2,537
234,941
45,009
36
342
426
1,112
1,880
Mortgages
(1)
197,939
15,951
1,339
215,229
14,799
-
45
36
191
272
Credit cards
5,988
2,081
242
8,311
22,696
-
125
205
190
520
Other personal
8,977
1,468
956
11,401
7,514
36
172
185
731
1,088
Non-Personal
173,747
19,082
2,146
194,975
97,779
4,357
272
370
1,063
1,705
Financial institutions
(2)
73,959
356
141
74,456
21,555
1,476
37
5
113
155
Sovereign
2,009
266
15
2,290
501
-
7
5
6
18
Corporate and other
97,779
18,460
1,990
118,229
75,723
2,881
228
360
944
1,532
Of which:
Commercial real estate
17,838
1,272
294
19,404
6,646
162
55
22
120
197
Mobility and logistics
13,021
4,312
81
17,414
10,194
520
24
45
40
109
Consumer industries
12,875
2,912
389
16,176
11,149
496
33
68
199
300
Total
386,651
38,582
4,683
429,916
142,788
4,393
614
796
2,175
3,585
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
198,318
24,636
3,571
226,525
41,847
41
284
429
1,099
1,812
Mortgages
(1)
186,250
21,061
2,535
209,846
13,806
-
77
60
325
462
Credit cards
4,801
1,953
176
6,930
20,135
-
77
186
118
381
Other personal
7,267
1,622
860
9,749
7,906
41
130
183
656
969
Non-Personal
165,503
15,838
2,359
183,700
93,520
4,608
314
358
941
1,613
Financial institutions
(2)
69,021
1,241
59
70,321
20,341
1,584
38
12
40
90
Sovereign
1,491
133
21
1,645
239
-
12
2
5
19
Corporate and other
94,991
14,464
2,279
111,734
72,940
3,024
264
344
896
1,504
Of which:
Commercial real estate
16,191
1,517
433
18,141
6,661
143
70
30
146
246
Mobility and logistics
13,363
2,384
148
15,895
9,367
595
26
35
67
128
Consumer industries
13,312
3,015
444
16,771
10,706
595
45
90
188
323
Total
363,821
40,474
5,930
410,225
135,367
4,649
598
787
2,040
3,425
\n
(1)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential mortgages portfolio had Energy Performance Certificate (EPC) data available (2024 \u2013 \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C (2024 \u2013 46.3%).
\n
(2)
Includes transactions, such as securitisations, where the underlying risk may be in other sectors.
\n\n
Non-Personal forbearance (audited)
\n
The table below shows Non-Personal forbearance, Heightened Monitoring and Risk of Credit Loss by sector. The table shows current exposure but re\ufb02ects risk transfers where there is a guarantee by
\n
another customer.
\n\n \n
Corporate and other
Financial institutions
Sovereign
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Forbearance (flow)
3,495
43
12
3,550
Forbearance (stock)
4,167
122
12
4,301
Heightened Monitoring and Risk of Credit Loss
6,115
103
2
6,220
2024
Forbearance (flow)
3,359
119
18
3,496
Forbearance (stock)
4,556
106
18
4,680
Heightened Monitoring and Risk of Credit Loss
5,931
150
1
6,082
\n
Sector analysis \u2013 portfolio summary (audited)
\n
\u2022
Loans by geography and sector
\u2013 In line with NatWest Group\u2019s strategic focus, exposures continued to be mainly in the UK.
\n
\u2022
Loans by stage
\u2013 Stage 3 balances reduced overall, with a small reduction in Non-Personal due to write-offs and lower in\ufb02ows, and a larger reduction in Personal mortgages following the
\n
securitisation transaction that removed \u00a30.8 billion of Stage 3 assets, alongside a default de\ufb01nition systems and process enhancement that moved loans back to the good book. Stage 1 balances
\n
increased across the Personal portfolios, driven by growth in mortgages and unsecured lending, including the Sainsbury\u2019s Bank portfolio acquisition. Stage 2 balances were broadly unchanged from
\n
the end of 2024, with reductions in Personal mortgages, linked to PD model enhancements and stable portfolio trends offset by increases in Non-Personal, largely driven by post model adjustment
\n
downgrades to sectors deemed most at risk of economic uncertainty.
\n
\u2022
Loans \u2013 Past due analysis
\u2013 Within the Personal portfolio, arrears balances overall decreased during 2025 mainly driven by the balance sheet management actions within the mortgage portfolio
\n
described previously. For the unsecured portfolios, arrears balances increased due to book growth and portfolio maturation. In Non-Personal, arrears balances reduced in line with Stage 3 balance
\n
reduction. The vast majority of Stage 2 balances remained up to date, as Stage 2 is normally captured through other forward-looking Stage 2 triggers.
\n
\u2022
Weighted average 12 months PDs
\u2013 Both IFRS 9 and Basel PDs remained broadly stable during the year overall, noting the reduction in Personal mortgages due to PD model enhancements and
\n
an increase in unsecured PDs driven by strategic growth and seasoning of credit card balances since 2022. Non-Personal PDs were broadly stable in the year. The higher PD in sovereigns
\n
re\ufb02ected a single entity where lending is fully guaranteed.
\n
\u2022
ECL provisions by stage and ECL provisions coverage
\u2013 Overall provisions increased from 31 December 2024, following an increase in good book ECL in the Personal portfolios, driven by the
\n
portfolio acquisition of Sainsbury\u2019s Bank and organic growth in unsecured lending, and a small number of signi\ufb01cant individual Non-Personal Stage 3 charges. Stage 3 ECL growth was partly offset
\n
by the transfer of mortgage assets to a securitisation special purpose vehicle. Provisions coverage remained consistent with 31 December 2024.
\n
\u2022
ECL charge
\u2013 The 2025 impairment charge, primarily re\ufb02ected a small number of
signi\ufb01cant
individual charges in the Non-Personal portfolio alongside the initial ECL cost from the portfolio
\n
acquisition from Sainsbury\u2019s Bank within Personal. This was partially offset by post model adjustment releases in the good book and one-off releases, notably on the de\ufb01nition of default systems
\n
and process enhancement on Personal mortgages and a mortgage securitisation. The increased charge in Non-Personal portfolio primarily re\ufb02ected lower levels of reduction in performing book
\n
post model adjustments compared to 2024.
\n
\u2022
Loans by residual maturity
\u2013 The maturity pro\ufb01le of the portfolios remained consistent with prior periods. In mortgages, as expected, the vast majority of exposures were greater than \ufb01ve years. In
\n
unsecured lending, cards and other, exposures were concentrated in less than \ufb01ve years. In Non-Personal portfolios the maturity pro\ufb01le will vary by product and sectors, but is typically less than
\n
\ufb01ve years for most exposures.
\n
\u2022
Other \ufb01nancial assets by asset quality
\u2013
These assets were cash and debt securities, and generally of high credit quality as re\ufb02ected in the AQ banding.
\n
\u2022
Off-balance sheet exposures by asset quality
\u2013 The AQ band split of off-balance sheet exposures broadly mirrored the drawn loans portfolio for non-defaulted exposures. In the Non-Personal
\n
portfolio, off-balance sheet exposures increased year-on-year, re\ufb02ecting an increase in unutilised exposure in corporates and \ufb01nancial institutions. The increase was primarily in the AQ1 to AQ4
\n
band, indicating high credit quality.
\n
\u2022
Non-Personal problem debt
\u2013 Exposures in the Wholesale Problem Debt Management framework marginally increased during 2025 due to an in\ufb02ow of corporate customers onto the framework
\n
across a range of sectors. There was no change in the reasons for customers moving onto the framework from 2024, with trading issues and cash/liquidity remaining the key
main drivers.
\n
\u2022
Non-Personal forbearance
\u2013
Exposures classi\ufb01ed as forborne reduced marginally across multiple sectors, leading to lower stock values in corporates. A portion of forbearance \ufb02ows related to cases
\n
in Customer Lending Support subject to repeated forbearance.
\n\n
Credit risk enhancement and mitigation (audited)
\n
The table below shows exposures of modelled portfolios within the scope of the ECL framework and related credit risk enhancement and mitigation (CREM).
\n\n \n
Gross
Maximum credit risk
CREM by type
CREM coverage
Exposure post CREM
exposure
ECL
Total
Stage 3
Financial (1)
Property
Other (2)
Total
Stage 3
Total
Stage 3
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
Cash and balances at central banks
84.1
-
84.1
-
-
-
-
-
-
84.1
-
Loans - amortised cost
(3)
429.9
3.5
426.4
2.5
47.9
261.0
26.0
334.9
2.1
91.5
0.4
Personal
(4)
234.9
1.9
233.0
1.4
1.4
214.5
-
215.9
1.2
17.1
0.2
Non-Personal
(5)
195.0
1.6
193.4
1.1
46.5
46.5
26.0
119.0
0.9
74.4
0.2
Debt securities
78.5
-
78.5
-
0.3
-
-
0.3
-
78.2
-
Total financial assets
592.5
3.5
589.0
2.5
48.2
261.0
26.0
335.2
2.1
253.8
0.4
Contingent liabilities and commitments
Personal
(6)
45.0
-
45.0
0.2
1.1
3.2
-
4.3
0.1
40.7
0.1
Non-Personal
102.2
0.1
102.1
0.4
4.1
7.9
5.3
17.3
0.1
84.8
0.3
Total off-balance sheet
147.2
0.1
147.1
0.6
5.2
11.1
5.3
21.6
0.2
125.5
0.4
Total exposure
739.7
3.6
736.1
3.1
53.4
272.1
31.3
356.8
2.3
379.3
0.8
2024
Financial assets
Cash and balances at central banks
91.8
-
91.8
-
-
-
-
-
-
91.8
-
Loans - amortised cost
(3)
410.2
3.3
406.9
3.9
46.3
253.0
25.5
324.8
3.4
82.1
0.5
Personal
(4)
226.5
1.8
224.7
2.5
0.8
209.1
-
209.9
2.2
14.8
0.3
Non-Personal
(5)
183.7
1.5
182.2
1.4
45.5
43.9
25.5
114.9
1.2
67.3
0.2
Debt securities
62.5
-
62.5
-
0.1
-
-
0.1
-
62.4
-
Total financial assets
564.5
3.3
561.2
3.9
46.4
253.0
25.5
324.9
3.4
236.3
0.5
Contingent liabilities and commitments
Personal
(6)
41.9
-
41.9
0.4
1.1
3.7
-
4.8
-
37.1
0.4
Non-Personal
98.1
0.1
98.0
0.4
3.1
8.2
5.1
16.4
0.1
81.6
0.3
Total off-balance sheet
140.0
0.1
139.9
0.8
4.2
11.9
5.1
21.2
0.1
118.7
0.7
Total exposure
704.5
3.4
701.1
4.7
50.6
264.9
30.6
346.1
3.5
355.0
1.2
\n
(1)
Includes cash and securities collateral.
\n
(2)
Includes guarantees, charges over trade debtors, other asset finance related physical collateral as well as the amount by which credit risk exposure is reduced through netting arrangements, mainly cash management pooling, which give NatWest Group a legal right to set off the financial asset
\n
against a financial liability due to the same counterparty. Any additional credit risk mitigation from a synthetic securitisation is not included in the table above.
\n
(3)
NatWest Group holds collateral in respect of individual loans \u2013 amortised cost to banks and customers. This collateral includes mortgages over property (both personal and commercial); charges over business assets such as plant and equipment; inventories and trade debtors; and guarantees of
\n
lending from parties other than the borrower. NatWest Group obtains collateral in the form of securities in reverse repurchase agreements. Collateral values are capped at the value of the loan.
\n
(4)
Stage 3 mortgage exposures have relatively limited uncovered exposure reflecting the security held. On unsecured credit cards and other personal borrowing, the residual uncovered amount reflects historical experience of continued cash recovery post default through ongoing engagement with
\n
customers.
\n
(5)
Stage 3 exposures post credit risk enhancement and mitigation in Non-Personal mainly represent enterprise value and the impact of written down collateral values; an individual assessment to determine ECL will consider multiple scenarios and in some instances allocate a probability weighting to a
\n
collateral value in excess of the written down value.
\n
(6)
The Personal gross exposure value includes \u00a311.4 billion (2024 \u2013 \u00a310.1 billion) in respect of pipeline mortgages where a committed offer has been made to a customer but where the funds have not yet been drawn down. When drawn down, the exposure would be covered by a security over the
\n
borrower\u2019s property.
\n\n
Personal portfolio (audited)
\n
Disclosures in the Personal portfolio section include drawn exposure (gross of provisions).
\n\n \n
2025
2024
Private Banking
Private Banking
Retail
& Wealth
Commercial &
Central items
Retail
& Wealth
Commercial &
Central items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Total
Personal lending
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Mortgages
199,972
13,038
2,210
9
215,229
194,865
12,826
2,161
-
209,852
Of which:
Owner occupied
180,323
11,644
1,508
8
193,483
176,137
11,348
1,457
-
188,942
Buy-to-let
19,649
1,394
702
1
21,746
18,728
1,478
704
-
20,910
Interest only
21,812
11,533
436
-
33,781
22,186
11,276
437
-
33,899
Mixed
(1)
9,977
76
4
-
10,057
10,384
40
8
-
10,432
ECL provisions
(2)
248
17
5
2
272
440
12
10
-
462
Other personal lending
(3)
17,696
1,699
221
95
19,711
15,045
1,301
242
-
16,588
ECL provisions
(2)
1,586
11
7
4
1,608
1,330
12
3
-
1,345
Total personal lending
217,668
14,737
2,431
104
234,940
209,910
14,127
2,403
-
226,440
Mortgage LTV ratios
- Owner occupied
57%
61%
57%
42%
57%
56%
59%
56%
-
56%
- Stage 1
57%
59%
57%
-
57%
56%
59%
55%
-
56%
- Stage 2
52%
57%
59%
32%
52%
55%
61%
56%
-
55%
- Stage 3
47%
69%
67%
56%
51%
50%
64%
74%
-
51%
- Buy-to-let
54%
62%
55%
26%
55%
53%
60%
52%
-
53%
- Stage 1
54%
60%
54%
-
55%
54%
60%
51%
-
54%
- Stage 2
52%
56%
62%
26%
52%
52%
57%
55%
-
52%
- Stage 3
51%
56%
66%
24%
53%
52%
56%
59%
-
53%
Gross new mortgage lending
34,458
1,492
313
-
36,263
26,440
1,395
257
-
28,092
Of which:
Owner occupied
32,059
1,372
229
-
33,660
25,300
1,266
183
-
26,749
- LTV > 90%
1,677
-
-
-
1,677
888
-
-
-
888
Weighted average LTV
(4)
71%
66%
61%
-
70%
70%
63%
71%
-
70%
Buy-to-let
2,399
120
84
-
2,603
1,140
129
74
-
1,343
Weighted average LTV
(4)
61%
65%
61%
-
61%
61%
62%
56%
-
61%
Interest only
2,443
1,357
54
-
3,854
1,575
1,238
42
-
2,855
Mixed
(1)
1,049
-
1
-
1,050
1,150
-
1
-
1,151
Mortgage forbearance
Forbearance flow
(5)
328
14
1
-
343
473
8
6
-
487
Forbearance stock
1,203
10
9
1
1,223
1,680
20
15
-
1,715
Current
918
2
3
-
923
1,214
9
10
-
1,233
1-3 months in arrears
110
6
-
-
116
146
9
-
-
155
>3 months in arrears
175
2
6
1
184
320
2
5
-
327
\n
(1) Includes accounts which have an interest only sub-account and a capital and interest sub-account to provide a more comprehensive view of interest only exposures.
\n
(2) Retail Banking excludes a non-material amount of lending and provisions held on relatively small legacy portfolios.
\n
(3) Comprises unsecured lending except for Private Banking & Wealth Management, which includes both secured and unsecured lending. It excludes loans that are commercial in nature.
\n
(4) New mortgage lending LTV re\ufb02ects the LTV at the time of lending.
\n
(5) Forbearance \ufb02ows only include an account once per year, although some accounts may be subject to multiple forbearance deals. Forbearance deals post default are excluded from these \ufb02ows
\n\n
Personal portfolio (audited)
\n
Mortgage LTV distribution by stage
\n
The table below shows gross mortgage lending and related ECL by LTV band for the Retail Banking portfolio.
\n\n \n
Mortgages
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
66,203
7,099
597
73,899
10
10
94.0
114.0
-
0.1
15.7
0.2
>50% and \u226470%
63,802
5,948
338
70,088
16
15
50.0
81.0
-
0.3
14.8
0.1
>70% and \u226480%
27,658
1,745
73
29,476
8
6
12.0
26.0
-
0.3
16.4
0.1
>80% and \u226490%
20,777
744
39
21,560
7
4
6.0
17.0
-
0.5
15.4
0.1
>90% and
\u2264100%
4,438
76
7
4,521
1
1
2.0
4.0
-
1.3
28.6
0.1
>100%
9
1
7
17
-
-
3
3
-
-
42.9
17.6
Total with LTVs
182,887
15,613
1,061
199,561
42
36
167
245
-
0.2
15.7
0.1
Other
406
1
4
411
2
-
1
3
0.5
-
25.0
0.7
Total
183,293
15,614
1,065
199,972
44
36
168
248
-
0.2
15.8
0.1
2024
\u226450%
64,040
8,344
1,159
73,543
21
16
153
190
-
0.2
13.2
0.3
>50% and \u226470%
61,739
7,741
855
70,335
29
23
104
156
-
0.3
12.2
0.2
>70% and \u226480%
25,022
2,361
173
27,556
13
9
22
44
0.1
0.4
12.7
0.2
>80% and \u226490%
16,718
1,769
85
18,572
9
9
13
31
0.1
0.5
15.3
0.2
>90% and
\u2264100%
4,076
512
26
4,614
2
3
5
10
-
0.6
19.2
0.2
>100%
14
4
13
31
-
-
6
6
-
-
46.2
19.4
Total with LTVs
171,609
20,731
2,311
194,651
74
60
303
437
-
0.3
13.1
0.2
Other
212
1
1
214
2
-
1
3
0.9
-
100.0
1.4
Total
171,821
20,732
2,312
194,865
76
60
304
440
-
0.3
13.1
0.2
\n
\u2022
Mortgage balances increased during 2025 with continuing organic growth. Unsecured lending grew overall, driven by continuing growth in prime quality whole of market lending and balance
\n
transfer credit card segments, as well as the acquisition of Sainsbury\u2019s Bank credit card and personal loan portfolios.
\n
\u2022
Portfolios and new business were closely monitored against agreed operating limits. These included loan-to-value ratios, buy-to-let concentrations, new-build concentrations and credit quality.
\n
Lending criteria, affordability calculations and assumptions for new lending were adjusted during the year, to maintain credit quality in line with appetite and to ensure customers are assessed fairly
\n
as economic conditions change.
\n
\u2022
LTV distribution of portfolio was broadly consistent with the prior year with an increase in balances in the 70-90% LTV bands consistent with increased new business during the year, including
\n
support for \ufb01rst time buyers.
\n
\u2022
The mortgage forbearance reported in 2025 was net of the mortgage securitisation previously mentioned, which reduced the stock by \u00a30.4 billion at the year-end.
\n\n
Personal portfolio (audited)
\n
Mortgage LTV distribution by region
\n
The table below shows gross mortgage lending by LTV band for Retail Banking, by geographical region.
\n\n \n
Flood risk (1,2)
Weighted
% of regional
% of regional
Lending at high/
\u226450%
50%\u226480%
80%\u2264100%
>100%
Total
average LTV
Other
Total
Total
lending at high
lending at very
very high risk (3)
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
\u00a3m
\u00a3m
%
risk (>60)
high risk (>80)
%
South East
13,656
19,277
5,022
1
37,956
57
3
37,959
19
3.7
1.2
4.9
Greater London
13,505
18,501
4,069
3
36,078
56
4
36,082
18
4.8
0.9
5.7
East of England
8,128
12,167
3,379
-
23,674
57
2
23,676
12
2.9
1.4
4.3
North West
7,479
8,443
2,158
2
18,082
55
1
18,083
9
2.9
2.0
4.9
South West
6,578
8,679
2,454
-
17,711
56
1
17,712
9
2.7
1.0
3.7
West Midlands
5,385
7,228
2,013
1
14,627
57
2
14,629
7
1.8
0.6
2.4
Scotland
4,868
5,821
1,498
1
12,188
55
2
12,190
6
2.5
1.3
3.8
Rest of the UK
14,300
19,448
5,488
9
39,245
57
396
39,641
20
2.8
1.9
4.7
Total
73,899
99,564
26,081
17
199,561
56
411
199,972
100
3.3
1.3
4.6
2024
South East
13,622
19,007
4,506
1
37,136
56
3
37,139
19
3.6
1.2
4.8
Greater London
13,951
18,537
3,391
2
35,881
55
3
35,884
18
4.8
0.9
5.7
East of England
7,776
11,730
3,211
2
22,719
58
1
22,720
12
2.9
1.4
4.3
North West
7,507
8,305
1,878
2
17,692
54
1
17,693
9
2.9
1.9
4.8
South West
6,577
8,455
2,055
1
17,088
56
1
17,089
9
2.6
1.0
3.6
West Midlands
5,379
6,970
1,683
1
14,033
56
1
14,034
7
1.8
0.6
2.4
Scotland
4,860
5,766
1,591
1
12,218
55
1
12,219
6
2.4
1.2
3.6
Rest of the UK
13,871
19,121
4,871
21
37,884
57
203
38,087
20
2.4
2.5
4.9
Total
73,543
97,891
23,186
31
194,651
56
214
194,865
100
3.1
1.4
4.5
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
\n
(2)
As at 31 December 2025, \u00a312.9 billion, 99%, of the Private Banking & Wealth Management mortgage portfolio had flood risk data available (2024 \u2013 \u00a312.6 billion, 98.0%). Of which, 6.2% were rated as high flood risk and 1.0% as very high flood risk
(2024 \u2013 5.4% high flood risk and 1.0% very high
\n
flood risk). 64% of the exposure is in the Greater London region.
\n
(3)
Flood risk is modelled by calculating an estimated loss for each flood source different types of flooding (fluvial, pluvial, tidal), annualised for each source and combined for a total flood score. Flood defences were considered where available. Flood scores were allocated per property based on the
\n
potential annualised loss (\u00a3) to a property dependent on the type, frequency and depth of flooding modelled across different return periods. The scoring ranged from 0 to 100, with 0 being lowest and 100 being the highest risk. A score of 61 and above was considered to be high risk and
\n
properties with a score of 81 and above were considered to be very high risk after flood mitigants were taken-into-account.
Personal portfolio (audited)
Retail Banking \ufb01xed rate mortgages by roll-off date
(1)
The table below shows gross \ufb01xed rate mortgage lending for Retail Banking, by roll-off date.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Retail Banking mortgages - gross
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
exposure
(2)
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Fixed rate roll-off
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
<=1 year
41,993
3,897
158
46,048
34,989
4,309
336
39,634
>1<= 2 years
63,366
4,978
183
68,527
44,146
5,080
418
49,644
>2 years
67,544
4,901
243
72,688
78,629
8,667
693
87,989
Total
172,903
13,776
584
187,263
157,764
18,056
1,447
177,267
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
(2)
Excluding the Metro Bank portfolio acquired during 2024
Retail Banking mortgages by Energy Performance Certi\ufb01cate (EPC) rating
(1)
The table below shows the energy ef\ufb01ciency of Retail Banking residential mortgages
(2)
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Owner occupied
Buy-to-let
Total
Owner occupied
Buy-to-let
Total
EPC rating
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
A
1,415
27
1,442
788
18
806
B
22,217
1,659
23,876
21,923
1,480
23,403
C
35,153
6,767
41,920
31,353
5,876
37,229
D
46,108
5,991
52,099
45,455
5,748
51,203
E
13,305
1,269
14,574
14,455
1,369
15,824
F
2,709
46
2,755
3,026
55
3,081
G
628
10
638
695
13
708
Unclassified
58,788
3,880
62,668
58,442
4,169
62,611
Total
180,323
19,649
199,972
176,137
18,728
194,865
\n
(1)
Not within scope of the Independent auditors\u2019 report
(2)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential
mortgages portfolio had Energy Performance Certificate (EPC) data available
(2024 - \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C
(2024 \u2013 46.3%).
\n\n
Commercial real estate (CRE)
\n
CRE LTV distribution by stage (audited)
\n
The table below shows CRE gross loans and related ECL by LTV band.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
7,324
222
26
7,572
20
5
6
31
0.3
2.3
23.1
0.4
>50% and \u226460%
4,417
144
40
4,601
15
2
6
23
0.3
1.4
15.0
0.5
>60% and \u226470%
881
21
27
929
4
1
10
15
0.5
4.8
37.0
1.6
>70% and \u2264100%
270
146
35
451
1
4
19
24
0.4
2.7
54.3
5.3
>100%
183
2
83
268
2
-
39
41
1.1
-
47.0
15.3
Total with LTVs
13,075
535
211
13,821
42
12
80
134
0.3
2.2
37.9
1.0
Total portfolio
average LTV
48%
58%
115%
49%
Other
Investment
(1)
2,745
331
36
3,112
5
4
11
20
0.2
1.2
30.6
0.6
Investment
15,820
866
247
16,933
47
16
91
154
0.3
1.8
36.8
0.9
Development and
other
(2)
2,018
406
47
2,471
8
6
29
43
0.4
1.5
61.7
1.7
Total
17,838
1,272
294
19,404
55
22
120
197
0.3
1.7
40.8
1.0
2024
\u226450%
7,334
380
48
7,762
28
6
7
41
0.4
1.6
14.6
0.5
>50% and \u226460%
3,829
169
53
4,051
19
5
9
33
0.5
3.0
17.0
0.8
>60% and \u226470%
584
198
34
816
3
5
8
16
0.5
2.5
23.5
2.0
>70% and \u2264100%
312
83
79
474
2
4
21
27
0.6
4.8
26.6
5.7
>100%
139
8
119
266
1
-
56
57
0.7
-
47.1
21.4
Total with LTVs
12,198
838
333
13,369
53
20
101
174
0.4
2.4
30.3
1.3
Total portfolio
average LTV
46%
51%
102%
48%
Other
Investment
(1)
2,132
348
41
2,521
6
6
15
27
0.3
1.7
36.6
1.1
Investment
14,330
1,186
374
15,890
59
26
116
201
0.4
2.2
31.0
1.3
Development and
other
(2)
1,861
331
59
2,251
11
4
30
45
0.6
1.2
50.8
2.0
Total
16,191
1,517
433
18,141
70
30
146
246
0.4
2.0
33.7
1.4
\n
(1)
Relates mainly to business banking and unsecured corporate lending.
\n
(2)
Relates to the development of commercial and residential properties, along
\n
with CRE activities that are not strictly investment or development. LTV is not
\n
a meaningful measure for this type of lending activity.
\n
\u2022
Overall \u2013 The majority of the CRE portfolio was located and managed in the UK. Business appetite and strategy was aligned across NatWest Group.
\n
\u2022
2025 trends \u2013 There was strong growth in the residential and retail sector, with other CRE sectors remaining broadly \ufb02at. LTV pro\ufb01le remained stable.
\n
\u2022
Credit quality \u2013 Credit quality improved, with marginally fewer exposures in the Wholesale Problem Debt Management framework.
\n
\u2022
Risk appetite \u2013 Lending appetite is subject to regular review and implemented at sub-sector level. Overall appetite slightly increased over the year supported by the view that cyclical risks are
\n
currently at a lower level.
Flow statements (audited)
The \ufb02ow statements that follow show the main ECL and related income statement movements. They also show the changes in ECL as well as the changes in related \ufb01nancial assets used in
determining ECL. Due to differences in scope, exposures may differ from
those reported in other tables, principally in relation to exposures in Stage 1 and Stage 2. These differences do not have a
material ECL effect. Other points to note:
\u2022
Financial assets include treasury liquidity portfolios, comprising balances at central banks and debt securities, as well as loans. Both modelled and non-modelled portfolios are included.
\u2022
Stage transfers (for example, exposures moving from Stage 1 into Stage 2) are a key feature of the ECL movements, with the net re-measurement cost of transitioning to a worse stage being a
primary driver of income statement charges. Similarly, there is an ECL bene\ufb01t for accounts improving stage.
\u2022
Changes in risk parameters shows the reassessment of the ECL within a given stage, including any ECL overlays and residual income statement gains or losses at the point of write-off or
accounting write-down.
\u2022
Other (P&L only items) includes any subsequent changes in the value of written-down assets (for example, fortuitous recoveries) along with other direct write-off items such as direct recovery
costs. Other (P&L only items) affects the income statement but does not affect balance sheet ECL movements.
\u2022
Amounts written-off represent the gross asset written-off against accounts with ECL, including the net asset written-off for any debt sale activity.
\u2022
There were some \ufb02ows from Stage 1 into Stage 3 including transfers due to unexpected default events with a post model adjustment in place for Commercial & Institutional to account for this risk.
\u2022
The effect of any change in post model adjustments during the year is typically reported under changes in risk parameters, as are any effects arising from changes to the underlying models.
\u2022
All movements are captured monthly and aggregated. Interest suspended post default is included within Stage 3 ECL with the movement in the value of suspended interest during the year
reported under currency translation and other adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
NatWest Group total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Currency translation and other adjustments
(644)
-
14
1
156
163
(474)
164
Transfers from Stage 1 to Stage 2
(40,165)
(229)
40,165
229
-
-
-
-
Transfers from Stage 2 to Stage 1
33,789
433
(33,789)
(433)
-
-
-
-
Transfers to Stage 3
(397)
(5)
(2,527)
(258)
2,924
263
-
-
Transfers from Stage 3
161
18
999
47
(1,160)
(65)
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(299)
\u00a0
616
-
447
\u00a0
764
Changes in risk parameters
\u00a0
(114)
\u00a0
(18)
-
312
\u00a0
180
Other changes in net exposure
38,094
212
(7,429)
(175)
(2,349)
(256)
28,316
(219)
Other (P&L only items)
\u00a0
(3)
\u00a0
(2)
-
(49)
\u00a0
(54)
Income statement (releases)/charges
\u00a0
(204)
\u00a0
421
\u00a0
454
\u00a0
671
Amounts written-off
-
-
-
-
(579)
(579)
(579)
(579)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(150)
\u00a0
(150)
At 31 December 2025
546,394
614
39,598
796
4,893
2,175
590,885
3,585
Net carrying amount
545,780
\u00a0
38,802
\u00a0
2,718
\u00a0
587,300
\u00a0
At 1 January 2024
504,345
709
40,294
976
5,621
1,960
550,260
3,645
2024 movements
11,211
(111)
1,871
(189)
280
80
13,362
(220)
At 31 December 2024
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Net carrying amount
514,958
\u00a0
41,378
\u00a0
3,861
\u00a0
560,197
\u00a0
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - mortgages
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
171,333
76
20,992
60
2,303
305
194,628
441
Currency translation and other
adjustments
-
-
-
-
92
92
92
92
Transfers from Stage 1 to Stage 2
(16,507)
(17)
16,507
17
-
-
-
-
Transfers from Stage 2 to Stage 1
17,824
24
(17,824)
(24)
-
-
-
-
Transfers to Stage 3
(14)
-
(865)
(7)
879
7
-
-
Transfers from Stage 3
23
-
806
11
(829)
(11)
-
-
Net re-measurement of ECL on stage
transfer
(7)
7
7
7
Changes in risk parameters
(19)
(18)
74
37
Other changes in net exposure
9,277
(13)
(3,792)
(10)
(1,274)
(152)
4,211
(175)
Other (P&L only items)
-
-
(16)
(16)
Income statement (releases)/charges
(39)
(21)
(87)
(147)
Amounts written-off
-
-
-
-
(87)
(87)
(87)
(87)
Unwinding of discount
-
-
(67)
(67)
At 31 December 2025
181,936
44
15,824
36
1,084
168
198,844
248
Net carrying amount
181,892
15,788
916
198,596
At 1 January 2024
174,038
87
17,827
60
2,068
250
193,933
397
2024 movements
(2,705)
(11)
3,165
-
235
55
695
44
At 31 December 2024
171,333
76
20,992
60
2,303
305
194,628
441
Net carrying amount
171,257
20,932
1,998
194,187
\n
\u2022
ECL coverage for mortgages decreased during the year, primarily driven by the reduction in economic uncertainty post model adjustments (supported by back-testing) and a de\ufb01nition of default
\n
systems and process enhancement in the \ufb01rst half of the year. Additionally, the transfer of \u00a32.1 billion of mortgages with \u00a30.1 billion of ECL to a securitisation special purpose vehicle further
\n
reduced ECL coverage overall, noting that \u00a30.8 billion of these loans were in Stage 3.
\n
\u2022
Stage 3 in\ufb02ows reduced in the year, with the portfolio showing continued resilience alongside the effect of the de\ufb01nition of default systems and process enhancement earlier in the year.
\n
\u2022
Stable portfolio trends and PD model enhancements underpinned PD reductions in the year, resulting in a reduction in Stage 2 balances.
\n
\u2022
The relatively small ECL cost for net re-measurement on transfer into Stage 3 included the effect of risk targeted ECL adjustments, when previously in the good book. Refer to the ECL post model
\n
adjustments section for further details.
\n
\u2022
Write-off occurs once the repossessed property has been sold and there is a residual shortfall balance remaining outstanding. This would typically be within \ufb01ve years from default but can be
\n
longer.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - credit cards
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
4,523
76
2,034
186
162
117
6,719
379
Currency translation and other
adjustments
-
-
-
-
6
6
6
6
Transfers from Stage 1 to Stage 2
(2,329)
(52)
2,329
52
-
-
-
-
Transfers from Stage 2 to Stage 1
1,339
105
(1,339)
(105)
-
-
-
-
Transfers to Stage 3
(36)
(1)
(231)
(78)
267
79
-
-
Transfers from Stage 3
3
2
14
5
(17)
(7)
-
-
Net re-measurement of ECL on stage
transfer
(71)
191
101
221
Changes in risk parameters
15
30
25
70
Other changes in net exposure
2,243
50
(640)
(77)
(33)
(1)
1,570
(28)
Other (P&L only items)
-
-
(1)
(1)
Income statement (releases)/charges
(6)
144
124
262
Amounts written-off
-
-
-
-
(118)
(118)
(118)
(118)
Unwinding of discount
-
-
(12)
(12)
At 31 December 2025
5,743
124
2,167
204
267
190
8,177
518
Net carrying amount
5,619
1,963
77
7,659
At 1 January 2024
3,475
70
2,046
204
146
89
5,667
363
2024 movements
1,048
6
(12)
(18)
16
28
1,052
16
At 31 December 2024
4,523
76
2,034
186
162
117
6,719
379
Net carrying amount
4,447
1,848
45
6,340
\n
\u2022
Overall ECL for cards increased during 2025, driven primarily by the acquisition of Sainsbury\u2019s Bank credit card balances alongside continued organic portfolio growth, re\ufb02ecting strong customer
\n
demand, while sustaining robust risk appetite.
\n
\u2022
Flow rates into Stage 3 were slightly higher in 2025 compared to 2024, re\ufb02ecting the strategic growth and seasoning of credit card balances since 2022. This trend contributed to an increase in
\n
PDs during the year, driving a net \ufb02ow into Stage 2 from Stage 1.
\n
\u2022
Charge-off (analogous to partial write-off) typically occurs after 12 missed payments.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - other personal unsecured
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
5,605
127
1,465
182
833
641
7,903
950
Currency translation and other
adjustments
-
-
-
-
27
27
27
27
Transfers from Stage 1 to Stage 2
(2,145)
(95)
2,145
95
-
-
-
-
Transfers from Stage 2 to Stage 1
1,471
157
(1,471)
(157)
-
-
-
-
Transfers to Stage 3
(79)
(3)
(329)
(118)
408
121
-
-
Transfers from Stage 3
7
3
24
10
(31)
(13)
-
-
Net re-measurement of ECL on stage
transfer
(100)
219
63
182
Changes in risk parameters
(33)
(10)
126
83
Other changes in net exposure
1,992
111
(389)
(37)
(128)
(47)
1,475
27
Other (P&L only items)
-
-
30
30
Income statement (releases)/charges
(22)
172
172
322
Amounts written-off
-
-
-
-
(168)
(168)
(168)
(168)
Unwinding of discount
-
-
(33)
(33)
At 31 December 2025
6,851
167
1,445
184
941
717
9,237
1,068
Net carrying amount
6,684
1,261
224
8,169
At 1 January 2024
5,240
149
1,657
238
963
758
7,860
1,145
2024 movements
365
(22)
(192)
(56)
(130)
(117)
43
(195)
At 31 December 2024
5,605
127
1,465
182
833
641
7,903
950
Net carrying amount
5,478
1,283
192
6,953
\n
\u2022
Total ECL increased during the year, primarily driven by the acquisition of Sainsbury\u2019s Bank loan balances and continued organic loan book growth, while arrears performance remained stable,
\n
resulting in ECL coverage levels broadly consistent with 31 December 2024.
\n
\u2022
Flow rates into Stage 3 remained stable, in line with broader portfolio trends on arrears, with overall Stage 3 balances increasing as a result of reduced debt sale activity overall in the year.
\n
\u2022
Write-off occurs once recovery activity with the customer has been concluded or there are no further recoveries expected, but no later than six years after default.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - corporate
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
62,575
175
11,450
273
1,562
659
75,587
1,107
Currency translation and other
adjustments
(331)
-
17
-
24
18
(290)
18
Inter-group transfers
156
1
8
1
1
-
165
2
Transfers from Stage 1 to Stage 2
(14,018)
(50)
14,018
50
-
-
-
-
Transfers from Stage 2 to Stage 1
8,374
103
(8,374)
(103)
-
-
-
-
Transfers to Stage 3
(170)
(1)
(741)
(44)
911
45
-
-
Transfers from Stage 3
54
7
82
15
(136)
(22)
-
-
Net re-measurement of ECL on stage
transfer
(84)
151
214
281
Changes in risk parameters
(22)
(9)
42
11
Other changes in net exposure
7,479
30
(1,776)
(42)
(591)
(37)
5,112
(49)
Other (P&L only items)
(4)
(3)
(61)
(68)
Income statement (releases)/charges
(80)
97
158
175
Amounts written-off
-
-
-
-
(166)
(166)
(166)
(166)
Unwinding of discount
-
-
(26)
(26)
At 31 December 2025
64,119
159
14,684
292
1,605
727
80,408
1,178
Net carrying amount
63,960
14,392
878
79,230
At 1 January 2024
61,402
226
12,275
344
1,454
602
75,131
1,172
2024 movements
1,173
(51)
(825)
(71)
108
57
456
(65)
At 31 December 2024
62,575
175
11,450
273
1,562
659
75,587
1,107
Net carrying amount
62,400
11,177
903
74,480
\n
\u2022
Total ECL increased in the year primarily re\ufb02ecting a small number of individual defaults. Despite the growth in Stage 3 ECL, transfers into Stage 3 reduced compared to 2024, with a notable
\n
reduction in transfers seen in the second half of 2025.
\n
\u2022
Total performing book ECL was stable year-on-year, but with a small increase in Stage 2, re\ufb02ecting the net transfer of assets from Stage 1 into Stage 2.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - property
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
27,468
77
2,980
61
590
225
31,038
363
Currency translation and other
adjustments
8
-
-
-
9
-
17
-
Inter-group transfers
(175)
-
(7)
-
(1)
-
(183)
-
Transfers from Stage 1 to Stage 2
(2,569)
(8)
2,569
8
-
-
-
-
Transfers from Stage 2 to Stage 1
2,021
23
(2,021)
(23)
-
-
-
-
Transfers to Stage 3
(6)
-
(143)
(8)
149
8
-
-
Transfers from Stage 3
45
4
28
5
(73)
(9)
-
-
Net re-measurement of ECL on stage
transfer
(22)
31
13
22
Changes in risk parameters
(28)
(8)
18
(18)
Other changes in net exposure
3,692
15
(313)
(10)
(199)
(21)
3,180
(16)
Other (P&L only items)
-
-
-
-
Income statement (releases)/charges
(35)
13
10
(12)
Amounts written-off
-
-
-
-
(33)
(33)
(33)
(33)
Unwinding of discount
-
-
(8)
(8)
At 31 December 2025
30,484
61
3,093
56
442
193
34,019
310
Net carrying amount
30,423
3,037
249
33,709
At 1 January 2024
26,040
94
3,155
89
606
195
29,801
378
2024 movements
1,428
(17)
(175)
(28)
(16)
30
1,237
(15)
At 31 December 2024
27,468
77
2,980
61
590
225
31,038
363
Net carrying amount
27,391
2,919
365
30,675
\n
\u2022
Total ECL for property exposures reduced notably in the year, with reductions observed in all stages.
\n
\u2022
In Stage 3, both total \ufb01nancial assets and ECL reduced as there were low levels of default in the year, which were more than offset by the effects of repayments and write-offs.
\n
\u2022
Performing book ECL reduced in the year driven by changes in risk parameters, which included the impact of reductions in post model adjustments.
Flow statements (audited)
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
93,724
37
1,739
12
123
57
95,586
106
Currency translation and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
adjustments
(377)
-
(3)
-
-
14
(380)
14
Inter-group transfers
18
-
(1)
-
-
-
17
-
Transfers from Stage 1 to Stage 2
(960)
(3)
960
3
-
-
-
-
Transfers from Stage 2 to Stage 1
1,714
11
(1,714)
(11)
-
-
-
-
Transfers to Stage 3
(82)
-
(29)
(1)
111
1
-
-
Transfers from Stage 3
8
-
9
-
(17)
-
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(8)
\u00a0
7
\u00a0
44
\u00a0
43
Changes in risk parameters
\u00a0
(11)
\u00a0
(2)
\u00a0
19
\u00a0
6
Other changes in net exposure
3,828
10
(317)
1
(17)
5
3,494
16
Other (P&L only items)
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
Income statement (releases)/charges
\u00a0
(9)
\u00a0
6
\u00a0
65
\u00a0
62
Amounts written-off
-
-
-
-
(6)
(6)
(6)
(6)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
At 31 December 2025
97,873
36
644
9
194
128
98,711
173
Net carrying amount
97,837
\u00a0
635
\u00a0
66
\u00a0
98,538
\u00a0
At 1 January 2024
88,860
36
1,599
14
101
22
90,560
72
2024 movements
4,864
1
140
(2)
22
35
5,026
34
At 31 December 2024
93,724
37
1,739
12
123
57
95,586
106
Net carrying amount
93,687
\u00a0
1,727
\u00a0
66
\u00a0
95,480
\u00a0
\n
\u2022
The increase in Stage 3 \ufb01nancial assets and ECL primarily re\ufb02ected the impact of a single large \ufb02ow to default in the year.
\u2022
Performing book ECL was marginally lower at 31 December 2025, with the Stage 2 ECL reduction re\ufb02ective of exposure \ufb02owing back into Stage 1.Asset quality (audited)
The table below shows asset quality bands of gross loans and ECL, by stage, for the Personal portfolio.
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,087
6,432
-
120,519
19
9
-
28
-
0.1
-
-
AQ5-AQ8
83,712
8,584
-
92,296
26
21
-
47
-
0.2
-
0.1
AQ9
140
935
-
1,075
-
6
-
6
-
0.6
-
0.6
AQ10
-
-
1,339
1,339
-
-
191
191
-
-
14.3
14.3
\u00a0
197,939
15,951
1,339
215,229
45
36
191
272
-
0.2
14.3
0.1
Credit cards
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
117
-
-
117
1
-
-
1
0.9
-
-
0.9
AQ5-AQ8
5,850
1,967
-
7,817
123
181
-
304
2.1
9.2
-
3.9
AQ9
21
114
-
135
1
24
-
25
4.8
21.1
-
18.5
AQ10
-
-
242
242
-
-
190
190
-
-
78.5
78.5
\u00a0
5,988
2,081
242
8,311
125
205
190
520
2.1
9.9
78.5
6.3
Other personal
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
765
112
-
877
5
12
-
17
0.7
10.7
-
1.9
AQ5-AQ8
8,148
1,212
-
9,360
161
137
-
298
2.0
11.3
-
3.2
AQ9
64
144
-
208
6
36
-
42
9.4
25.0
-
20.2
AQ10
-
-
956
956
-
-
731
731
-
-
76.5
76.5
\u00a0
8,977
1,468
956
11,401
172
185
731
1,088
1.9
12.6
76.5
9.5
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,969
6,544
-
121,513
25
21
-
46
-
0.3
-
-
AQ5-AQ8
97,710
11,763
-
109,473
310
339
-
649
0.3
2.9
-
0.6
AQ9
225
1,193
-
1,418
7
66
-
73
3.1
5.5
-
5.2
AQ10
-
-
2,537
2,537
-
-
1,112
1,112
-
-
43.8
43.8
\u00a0
212,904
19,500
2,537
234,941
342
426
1,112
1,880
0.2
2.2
43.8
0.8
\n\n
Asset quality (audited)
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
AQ1-AQ4
104,793
8,416
-
113,209
29
16
-
45
-
0.2
-
-
AQ5-AQ8
81,263
11,683
-
92,946
48
38
-
86
0.1
0.3
-
0.1
AQ9
194
962
-
1,156
-
6
-
6
-
0.6
-
0.5
AQ10
-
-
2,535
2,535
-
-
325
325
-
-
12.8
12.8
186,250
21,061
2,535
209,846
77
60
325
462
-
0.3
12.8
0.2
Credit cards
AQ1-AQ4
128
-
-
128
1
-
-
1
0.8
-
-
0.8
AQ5-AQ8
4,650
1,866
-
6,516
75
169
-
244
1.6
9.1
-
3.7
AQ9
23
87
-
110
1
17
-
18
4.4
19.5
-
16.4
AQ10
-
-
176
176
-
-
118
118
-
-
67.1
67.1
4,801
1,953
176
6,930
77
186
118
381
1.6
9.5
67.1
5.5
Other personal
AQ1-AQ4
691
127
-
818
6
14
-
20
0.9
11.0
-
2.4
AQ5-AQ8
6,521
1,359
-
7,880
120
134
-
254
1.8
9.9
-
3.2
AQ9
55
136
-
191
4
35
-
39
7.3
25.7
-
20.4
AQ10
-
-
860
860
-
-
656
656
-
-
76.3
76.3
7,267
1,622
860
9,749
130
183
656
969
1.8
11.3
76.3
9.9
Total
AQ1-AQ4
105,612
8,543
-
114,155
36
30
-
66
-
0.4
-
0.1
AQ5-AQ8
92,434
14,908
-
107,342
243
341
-
584
0.3
2.3
-
0.5
AQ9
272
1,185
-
1,457
5
58
-
63
1.8
4.9
-
4.3
AQ10
-
-
3,571
3,571
-
-
1,099
1,099
-
-
30.8
30.8
198,318
24,636
3,571
226,525
284
429
1,099
1,812
0.1
1.7
30.8
0.8
\n
\u2022
The distribution of lending across the AQ1-AQ9 bands remained broadly consistent with the prior year. Growth in the mortgage portfolio was mainly in the AQ1-AQ4 bands as expected.
\n
\u2022
The proportion of Stage 3/AQ10 loans declined over the year, mainly as a result of the balance sheet management actions described above, notably the mortgage securitisation which reduced
\n
Stage 3 loans by \u00a30.8 billion. Furthermore, there was an enhancement to the mortgage de\ufb01nition of default systems and process resulting in approximately \u00a30.4 billion of loans migrating from
\n
Stage 3 back to the good book. Within the credit card portfolio, \ufb02ows into Stage 3 increased year-on-year, driven by strategic growth and seasoning of credit card balances since 2022. For other
\n
personal lending, \ufb02ow rates into AQ10/Stage 3 remained stable, with AQ10 balances increasing as a result of reduced debt sale activity overall in the year.
\n\n
Asset quality (audited)
\n
The table below shows asset quality bands of gross loans and ECL, by stage, for the Non-Personal portfolio.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
AQ1-AQ4
43,968
2,314
-
46,282
29
15
-
44
0.1
0.7
-
0.1
AQ5-AQ8
53,783
15,882
-
69,665
199
326
-
525
0.4
2.1
-
0.8
AQ9
28
264
-
292
-
19
-
19
-
7.2
-
6.5
AQ10
-
-
1,990
1,990
-
-
944
944
-
-
47.4
47.4
97,779
18,460
1,990
118,229
228
360
944
1,532
0.2
2.0
47.4
1.3
Financial institutions
AQ1-AQ4
68,620
154
-
68,774
20
2
-
22
-
1.3
-
-
AQ5-AQ8
5,339
196
-
5,535
17
3
-
20
0.3
1.5
-
0.4
AQ9
-
6
-
6
-
-
-
-
-
-
-
-
AQ10
-
-
141
141
-
-
113
113
-
-
80.1
80.1
73,959
356
141
74,456
37
5
113
155
0.1
1.4
80.1
0.2
Sovereign
AQ1-AQ4
1,878
1
-
1,879
7
1
-
8
0.4
100.0
-
0.4
AQ5-AQ8
131
-
-
131
-
-
-
-
-
-
-
-
AQ9
-
265
-
265
-
4
-
4
-
1.5
-
1.5
AQ10
-
-
15
15
-
-
6
6
-
-
40.0
40.0
2,009
266
15
2,290
7
5
6
18
0.4
1.9
40.0
0.8
Total
AQ1-AQ4
114,466
2,469
-
116,935
56
18
-
74
0.1
0.7
-
0.1
AQ5-AQ8
59,253
16,078
-
75,331
216
329
-
545
0.4
2.1
-
0.7
AQ9
28
535
-
563
-
23
-
23
-
4.3
-
4.1
AQ10
-
-
2,146
2,146
-
-
1,063
1,063
-
-
49.5
49.5
173,747
19,082
2,146
194,975
272
370
1,063
1,705
0.2
1.9
49.5
0.9
Asset quality (audited)
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
41,509
2,409
-
43,918
32
19
-
51
0.1
0.8
-
0.1
AQ5-AQ8
53,448
11,783
-
65,231
232
306
-
538
0.4
2.6
-
0.8
AQ9
34
272
-
306
-
19
-
19
-
7.0
-
6.2
AQ10
-
-
2,279
2,279
-
-
896
896
-
-
39.3
39.3
\u00a0
94,991
14,464
2,279
111,734
264
344
896
1,504
0.3
2.4
39.3
1.4
Financial institutions
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
64,845
233
-
65,078
21
2
-
23
-
0.9
-
-
AQ5-AQ8
4,176
996
-
5,172
17
9
-
26
0.4
0.9
-
0.5
AQ9
-
12
-
12
-
1
-
1
-
8.3
-
8.3
AQ10
-
-
59
59
-
-
40
40
-
-
67.8
67.8
\u00a0
69,021
1,241
59
70,321
38
12
40
90
0.1
1.0
67.8
0.1
Sovereign
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
1,364
1
-
1,365
12
1
-
13
0.9
100.0
-
1.0
AQ5-AQ8
127
-
-
127
-
-
-
-
-
-
-
-
AQ9
-
132
-
132
-
1
-
1
-
0.8
-
0.8
AQ10
-
-
21
21
-
-
5
5
-
-
23.8
23.8
\u00a0
1,491
133
21
1,645
12
2
5
19
0.8
1.5
23.8
1.2
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
107,718
2,643
-
110,361
65
22
-
87
0.1
0.8
-
0.1
AQ5-AQ8
57,751
12,779
-
70,530
249
315
-
564
0.4
2.5
-
0.8
AQ9
34
416
-
450
-
21
-
21
-
5.1
-
4.7
AQ10
-
-
2,359
2,359
-
-
941
941
-
-
39.9
39.9
\u00a0
165,503
15,838
2,359
183,700
314
358
941
1,613
0.2
2.3
39.9
0.9
\n
\u2022
The majority of Non-Personal lending remained in the AQ1-AQ4 band, with the increase in the year driven by increases in \ufb01nancial institutions sectors. This portfolio is subject to low ECL coverage,
re\ufb02ecting the high credit quality in the portfolio.
\u2022
In corporate sectors, Stage 2 exposure grew in the year, primarily in the AQ5-AQ8 band, which accounted for the majority of exposure to corporates. AQ10 exposures in Stage 3 reduced in
corporates, as new defaults were more than offset by write-offs and repayments on previous defaults.
\u2022
The increase in sovereigns exposure in AQ9 and Stage 2 was primarily due to increased exposure to a single counterparty where the lending is fully guaranteed.
Credit risk - Trading activities
This section details the credit risk pro\ufb01le of NatWest Group\u2019s trading activities.
Securities \ufb01nancing transactions and collateral (audited)
The table below shows securities \ufb01nancing transactions in Commercial & Institutional and Central items & other. Balance sheet captions include balances held at all classi\ufb01cations under IFRS.
\u00a0 \n \n
Reverse repos
Repos
Of which:
Outside netting
Of which:
Outside netting
Total
can be offset
arrangements
Total
can be offset
arrangements
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Gross
95,674
95,618
56
89,789
87,730
2,059
IFRS offset
(31,599)
(31,599)
-
(31,599)
(31,599)
-
Carrying value
64,075
64,019
56
58,190
56,131
2,059
Master netting arrangements
(474)
(474)
-
(474)
(474)
-
Securities collateral
(63,292)
(63,292)
-
(55,657)
(55,657)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(56,131)
(56,131)
-
Net
309
253
56
2,059
-
2,059
2024
Gross
87,901
87,861
40
68,024
67,321
703
IFRS offset
(23,883)
(23,883)
-
(23,883)
(23,883)
-
Carrying value
64,018
63,978
40
44,141
43,438
703
Master netting arrangements
(1,549)
(1,549)
-
(1,549)
(1,549)
-
Securities collateral
(62,217)
(62,217)
-
(41,889)
(41,889)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(43,438)
(43,438)
-
Net
252
212
40
703
-
703
Derivatives (audited)
The table below shows derivatives by type of contract. The master netting agreements and collateral shown do not result in a net presentation on the balance sheet under IFRS. A signi\ufb01cant
proportion of the derivatives relate to trading activities in Commercial & Institutional. The table also includes hedging derivatives in Central items & other.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Notional
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
GBP
USD
EUR
Other
Total
Assets
Liabilities
Notional
Assets
Liabilities
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3m
\u00a3m
\u00a3bn
\u00a3m
\u00a3m
Gross exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
77,796
71,925
\u00a0
97,152
93,109
IFRS offset
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(17,007)
(17,951)
\u00a0
(18,746)
(21,027)
Carrying value
3,460
3,573
6,328
1,158
14,519
60,789
53,974
13,628
78,406
72,082
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate
(1)
3,125
2,072
5,699
192
11,088
32,742
26,758
10,333
37,499
31,532
Exchange rate
331
1,495
622
966
3,414
27,981
27,042
3,279
40,797
40,306
Credit
2
6
7
-
15
66
174
14
110
244
Equity and commodity
2
-
-
-
2
-
-
2
-
-
Carrying value
\u00a0 \u00a0 \u00a0 \u00a0
14,519
60,789
53,974
13,628
78,406
72,082
Counterparty mark-to-market
netting
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(45,928)
(45,928)
\u00a0
(61,883)
(61,883)
Cash collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(9,275)
(4,281)
\u00a0
(10,005)
(5,801)
Securities collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(3,283)
(1,256)
\u00a0
(4,072)
(896)
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Banks
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
89
217
\u00a0
214
345
Other financial institutions
(3)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,508
1,160
\u00a0
1,429
1,456
Corporate
(4)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
673
1,110
\u00a0
769
1,669
Government
(5)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
33
22
\u00a0
34
32
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
UK
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,098
1,548
\u00a0
1,061
1,774
Europe
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
693
589
\u00a0
875
978
US
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
437
283
\u00a0
443
604
RoW
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
75
89
\u00a0
67
146
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Asset quality of uncollateralised
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
derivative assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,865
\u00a0 \u00a0
2,049
\u00a0
AQ5-AQ8
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
435
\u00a0 \u00a0
394
\u00a0
AQ9-AQ10
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
3
\u00a0 \u00a0
3
\u00a0
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
\u00a0 \u00a0
2,446
\u00a0
\n
(1)
The notional amount of interest rate derivatives includes \u00a38,768 billion
(2024 \u2013 \u00a37,321 billion) in respect of contracts cleared through central
clearing counterparties.
(2)
Transactions with certain counterparties with whom NatWest Group has
netting arrangements but collateral is not posted on a daily basis; certain
transactions with speci\ufb01c terms that may not fall within netting and
collateral arrangements; derivative positions in certain jurisdictions where
the collateral agreements are not deemed to be legally enforceable.
(3)
Includes transactions with securitisation vehicles and funds where
collateral posting is contingent on NatWest Group\u2019s external rating.
(4)
Mainly large corporates with whom NatWest Group may have netting
arrangements in place with no collateral posting.
(5)
Sovereigns and supranational entities with no collateral arrangements,
collateral arrangements that are not considered enforceable, or one-way
collateral agreements in their favour.
Debt securities (audited)
The table below shows debt securities held at mandatory fair value through pro\ufb01t or loss by issuer as well as ratings based on the lowest of Standard & Poor\u2019s, Moody\u2019s and Fitch.
\u00a0
Central and local government
\u00a0 \u00a0 \u00a0
\u00a0
UK
US
Other
Financial institutions
Corporate
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
AAA
-
-
1,505
1,283
-
2,788
AA to AA+
-
4,153
257
309
18
4,737
A to AA-
2,105
-
1,481
596
215
4,397
BBB- to A-
-
-
892
256
384
1,532
Non-investment grade
-
-
-
11
50
61
Total
2,105
4,153
4,135
2,455
667
13,515
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AAA
-
-
1,335
1,368
-
2,703
AA to AA+
-
3,734
74
569
2
4,379
A to AA-
2,077
-
1,266
381
519
4,243
BBB- to A-
-
-
831
562
885
2,278
Non-investment grade
-
-
-
108
167
275
Total
2,077
3,734
3,506
2,988
1,573
13,878
2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.14 Loan impairment provisions
There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, for which we hold expected credit losses (ECL). The calculation of ECL
\n
considers historical, current, and forward-looking information to determine the amount we do not expect to recover. It considers losses on both defaulted exposures and performing exposures
\n
that may default in future. ECL is recognised on drawn exposures, loans commitments, and contingent liabilities.
\n
For accounting policy information refer to Accounting policy 2.3. Further disclosures on credit risk and information on ECL methodology are shown from page 187.
\n
Loan exposure and impairment metrics
\n
The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit loss framework.
2025
2024
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
386,651
363,821
Stage 2
38,582
40,474
Stage 3
4,683
5,930
Of which: individual
1,456
1,285
Of which: collective
3,227
4,645
429,916
410,225
ECL provisions
(3)
- Stage 1
614
598
- Stage 2
796
787
- Stage 3
2,175
2,040
Of which: individual
598
451
Of which: collective
1,577
1,589
3,585
3,425
ECL provision coverage
(4)
- Stage 1 (%)
0.16
0.16
- Stage 2 (%)
2.06
1.94
- Stage 3 (%)
46.44
34.40
0.83
0.83
Continuing operations
Impairment (releases)/losses
ECL charge
(5)
671
359
Stage 1
(204)
(438)
Stage 2
421
360
Stage 3
454
437
Of which: individual
188
192
Of which: collective
266
245
Amounts written off
579
654
Of which: individual
137
144
Of which: collective
442
510
\n
(1)
The table shows gross loans only and excludes amounts that are outside the
\n
scope of the ECL framework. Refer to Financial instruments within the scope of
\n
the IFRS 9 ECL framework for further details. Other financial assets within the
\n
scope of the IFRS 9 ECL framework were cash and balances at central banks
\n
totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 - \u00a34 million) related to assets classified as FVOCI and
\n
\u00a30.1 billion (2024 - \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions divided by loans \u2013
\n
amortised cost and FVOCI. It is calculated on loans and total ECL provisions,
\n
including ECL for other (non-loan) assets and unutilised exposure. Some
\n
segments with a high proportion of debt securities or unutilised exposure may
\n
result in a not meaningful coverage ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial
\n
assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets
\n
classified as FVOCI; and \u00a33 million charge (2024 - \u00a35 million release) related to
\n
contingent liabilities.
Credit risk enhancement and mitigation
For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management \u2013 Credit risk enhancement and mitigation section.
Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00661": { "value": "Credit riskDe\ufb01nition (audited)
Credit risk is the risk that customers,
counterparties or issuers fail to meet a
contractual obligation to settle outstanding
amounts. For the purposes of the credit risk
section, Personal refers to lending to
individuals and Non-Personal refers to lending
to small and medium-sized enterprises,
corporates, banks and other \ufb01nancial
institutions.
Sources of risk (audited)
The principal sources of credit risk for
NatWest Group are lending, off-balance sheet
products, derivatives and securities \ufb01nancing,
and debt securities. NatWest Group is also
exposed to settlement risk through foreign
exchange, trade \ufb01nance and payments
activities.
Governance (audited)
Risk governance for credit risk is in line with
the approach outlined in the Risk
management framework section.
The Credit Risk function provides oversight
and challenge of frontline credit risk
management activities:
\u2022
Establishing credit risk policy, standards
and toolkits which set out the mandatory
limits and parameters required to ensure
that credit risk is managed within risk
appetite and which provide the minimum
standards for the identi\ufb01cation,
assessment, management, monitoring
and reporting of credit risk.
\u2022
Oversight of the \ufb01rst line of defence to
ensure that credit risk remains within the
appetite set by the Board and that it is
being managed adequately and
effectively.
\u2022
Assessing the adequacy of ECL provisions
including approving key IFRS 9 inputs
(such as signi\ufb01cant increase in credit risk
(SICR) thresholds) and any necessary in-
model and post model adjustments
through NatWest Group and business unit
provisions and model committees.
Risk appetite (audited)
Risk appetite for credit risk is in line with the
approach outlined in the Risk management
framework section.
Credit risk appetite is monitored through risk
appetite frameworks tailored to NatWest
Group\u2019s Personal and Non-Personal
segments.
Personal
The Personal credit risk appetite framework
sets limits that control the quality and
concentration of both existing and new
business for each relevant business segment.
Risk appetite measures consider the
segments\u2019 ability to grow sustainably and the
level of losses expected under stress. Credit
risk is further controlled through operational
limits speci\ufb01c to customer or product
characteristics.
Non-Personal
The Non-Personal credit risk appetite
framework has been designed to re\ufb02ect
factors that in\ufb02uence the ability to operate
within risk appetite. Tools such as stress
testing and economic capital are used to
measure credit risk volatility and develop links
between the framework and risk appetite
limits.
The framework is used to manage
concentrations of risk which may arise across
four lenses \u2013 single name, sector, country
and product and asset classes. The
framework is supported by a suite of
transactional acceptance standards that set
out the risk parameters within which
businesses should operate.Problem debt management
(audited)
\n
When stress or \ufb01nancial dif\ufb01culties are
\n
identi\ufb01ed, NatWest Group collaborates closely
\n
with customers to support them.
\n
Personal
\n
Pre-emptive triggers, based on both NatWest
\n
Group and credit reference agency data, are
\n
used to identify customers that may be at
\n
risk of \ufb01nancial dif\ufb01culty. NatWest Group
\n
proactively contacts these customers to offer
\n
support with the aim of preventing further
\n
deterioration of their \ufb01nancial position.
\n
Financial Health and Support
\n
When a customer exceeds an agreed limit or
\n
misses a regular monthly payment, the
\n
customer is contacted by NatWest Group and
\n
requested to remedy the position. If the
\n
situation is not resolved then, where
\n
appropriate, the Financial Health and Support
\n
team become involved and the customer is
\n
supported by skilled debt management staff
\n
who endeavour to provide customers with
\n
bespoke solutions.
\n
If appropriate, a notice of intention to default
\n
and/or a formal demand may be issued to the
\n
customer. The account may also be
\n
registered with credit reference agencies.
\n
Subsequently, the customer\u2019s debt may be
\n
referred to a third-party debt collection
\n
agency or solicitor, to agree an affordable
\n
repayment plan. The sale of unsecured debt
\n
may also be considered as an option.
\n
Non-Personal
\n
NatWest Group uses a range of early warning
\n
indicators to identify customers that may be
\n
exposed to emerging risks, including \ufb01nancial
\n
stress, allowing for increased monitoring
\n
where necessary. Early warning indicators
\n
may be internal, such as a customer\u2019s bank
\n
account activity, or external, such as the
\n
share price of a publicly listed customer.
\n
When these indicators suggest that a
\n
customer is experiencing potential or actual
\n
dif\ufb01culty, or if relationship managers or credit
\n
of\ufb01cers observe other signs of \ufb01nancial
\n
dif\ufb01culty, the customer may be classi\ufb01ed
\n
within the Wholesale Problem Debt
\n
Management framework.
\n
Wholesale Problem Debt Management
\n
framework
\n
This framework focuses on Non-Personal
\n
customers and is designed to provide early
\n
identi\ufb01cation of credit deterioration, support
\n
intelligent risk-taking, ensure fair and
\n
consistent customer outcomes and provide
\n
key insights into Non-Personal lending
\n
portfolios.
\n
There are two classi\ufb01cations in the
\n
framework that apply to non-defaulted
\n
customers that are in \ufb01nancial stress \u2013
\n
Heightened Monitoring and Risk of Credit
\n
Loss.
\n
For the purposes of provisioning, all
\n
exposures categorised as Heightened
\n
Monitoring or Risk of Credit Loss are
\n
categorised as Stage 2 and subject to a
\n
lifetime loss assessment.
\n
The framework also applies to those
\n
customers that have met NatWest Group\u2019s
\n
default criteria (AQ10 exposures). Defaulted
\n
exposures are categorised as Stage 3
\n
impaired for provisioning purposes.
\n
Heightened Monitoring customers are
\n
performing customers that have met certain
\n
characteristics, which have led to signi\ufb01cant
\n
credit deterioration. Characteristics include
\n
trading issues, covenant breaches, material
\n
probability of default (PD) downgrades and
\n
past due facilities.
\n
Heightened Monitoring customers require
\n
pre-emptive actions (outside the customer\u2019s
\n
normal trading patterns) to return or maintain
\n
their facilities within NatWest Group\u2019s current
\n
risk appetite.
\n
Risk of Credit Loss customers are performing
\n
customers that have met the criteria for
\n
Heightened Monitoring and also pose a risk of
\n
credit loss to NatWest Group in the next 12
\n
months should mitigating action not be taken
\n
or not be successful.
\n
The Wholesale Problem Debt Management
\n
framework does not apply to problem debt
\n
management for small and medium-sized
\n
enterprise retail customers. These customers
\n
are, where necessary, managed by specialist
\n
problem debt management teams, depending
\n
on the size of exposure or by the Financial
\n
Health and Support team where a loan has
\n
been impaired.
Customer Lending Support
Where customers meet speci\ufb01c referral
criteria, relationships are supported by the
Customer Lending Support team.
Customer Lending Support works with
corporate and commercial customers in
\ufb01nancial dif\ufb01culty to help them understand
their options and how their restructuring or
repayment strategies can be delivered.
Helping viable customers return to \ufb01nancial
health and restoring a normal banking
relationship is always the preferred outcome.
However, where this is not possible, NatWest
Group works with customers to achieve a
solvent outcome.
Forbearance (audited)
Forbearance occurs when a concession is
made on the contractual terms of a debt in
response to a customer\u2019s \ufb01nancial dif\ufb01culties.
The aim of forbearance is to help the
customer regain \ufb01nancial stability while
reducing risk. To ensure that forbearance is
appropriate for the customer, minimum
standards are applied when assessing,
recording, monitoring and reporting
forbearance.
Personal
Forbearance options include payment
concessions, loan rescheduling (such as
extending contractual maturity), switching to
interest-only payments, suspending interest
or capitalising arrears. This support can be
provided for both mortgages and unsecured
lending.
Non-Personal
Forbearance may involve covenant waivers,
amendments to margins, payment
concessions and loan rescheduling (including
extensions in contractual maturity),
capitalisation of arrears, and debt forgiveness
or debt-for-equity swaps.
Customer PD and facility loss given default
(LGD) are reassessed prior to \ufb01nalising any
forbearance arrangement. The ultimate
outcome of a forbearance strategy is highly
dependent on the co-operation of the
borrower and a viable business or repayment
outcome. If forbearance becomes unsuitable
or is unsuccessful, NatWest Group may
pursue repayment, enforcement of security
or insolvency proceedings, although these are
options of last resort.
IFRS 9 models
(audited)
IFRS 9 models provide PD, exposure at
default (EAD) and LGD for the purpose of
calculating ECL.
Model build
Risk ranking is normally the same as for
internal ratings based (IRB) models to
maintain consistency in risk measurement.
Economic drivers are incorporated, normally
by using stress models. Term structures are
used to assess the risk of loss beyond 12
months that will affect lifetime loss for
exposures which have signi\ufb01cantly
deteriorated (Stage 2) or defaulted (Stage 3).
Model application
Model application involves selecting forward-
looking economic scenarios and assigning
appropriate probability weights.
Model design principles
The modelling of ECL under IFRS 9 adopts
the standard approach of breaking down
credit loss estimation into its component
parts of PD, LGD and EAD. To comply with
IFRS 9, these model parameters are designed
with the following characteristics:
\u2022
Unbiased \u2013 provide a best estimate.
\u2022
Point-in-time \u2013 re\ufb02ecting current
economic conditions as opposed to
through-the-cycle.
\u2022
Economic forecasts \u2013 IFRS 9 PD estimates
and, where appropriate, EAD and LGD
estimates re\ufb02ecting economic forecasts.
\u2022
Lifetime measurement \u2013 parameters are
provided as multi-period term structures
up to behavioural lifetimes.
PD
Personal
Personal PD models follow a discrete multi-
horizon survival approach, predicting
quarterly PDs up to lifetime at account level.
A key driver is the score from related IRB PD
models, with economic forecasts incorporated
through the stress models.
Non-Personal
Non-Personal PD models use a point-in-
time/through-the-cycle framework to provide
point-in-time estimates that re\ufb02ect economic
conditions at the reporting date. A key driver
is the score from related IRB PD models, with
economic forecasts incorporated through the
stress models.
LGD
Personal
Economic forecasts are incorporated for the
secured portfolios, where changes in property
prices can be readily accommodated.
Analysis has shown limited sensitivity to
economic conditions on LGDs for the other
Personal portfolios.
Non-Personal
Economic forecasts are incorporated into
LGD estimates using the existing point-in-
time/through-the-cycle framework. However,
for some portfolios, including low-default,
sovereigns and banks, there is insuf\ufb01cient loss
data to substantiate estimates that vary with
economic conditions.
EAD
Personal
Revolving products employ existing IRB
models as a foundation, with appropriate
adjustments incorporating a term structure
based on time to default. Amortising products
use an amortisation schedule, where a
formula is used to calculate the expected
balance based on remaining terms and
interest rates.
Non-Personal
EAD values rely on product-speci\ufb01c credit
conversion factors (CCFs), closely mirroring
the product segmentation and approach of
the respective IRB model, but without
conservative or downturn assumptions. These
CCFs are estimated over multi-year time
horizons.
Economic drivers (audited)
Introduction
The portfolio segmentation and selection of
economic drivers for IFRS 9 follows the
approach used in stress testing. The stress
models for each portfolio segment (de\ufb01ned by
product or asset class and where relevant,
industry sector and region) are based on a
selected, small number of economic variables
that best explain the movements in portfolio
loss rates. The process to select economic
drivers uses empirical analysis and expert
judgement.
\n\n
Economic drivers (audited)
\n
The most signi\ufb01cant economic drivers for
\n
material portfolios are shown in the table
\n
below:
\n\n \n
Portfolio
Economic drivers
Unemployment rate, sterling
Personal
swap rate, house price index,
mortgages
real wage
Personal
Unemployment rate, sterling
unsecured
swap rate, real wage
Stock price index, gross
Corporates
domestic product (GDP)
Commercial
Stock price index, commercial
real estate
property price index, GDP
\n
Economic scenarios
\n
At 31 December 2025, the range of
\n
anticipated future economic conditions was
\n
de\ufb01ned by a set of four internally developed
\n
scenarios and their respective probabilities. In
\n
addition to the base case, they comprised
\n
upside, downside and extreme downside
\n
scenarios.
\n
For 31 December 2025, the four scenarios
\n
were deemed appropriate in capturing the
\n
uncertainty in economic forecasts and the
\n
non-linearity in outcomes under different
\n
scenarios. These four scenarios were
\n
developed to provide suf\ufb01cient coverage to
\n
current risks faced by the economy and
\n
consider varying outcomes across the labour
\n
market, in\ufb02ation, interest rate, asset price
\n
and economic growth, around which there
\n
remains pronounced levels of uncertainty.
\n
Since 31 December 2024, the near-term
\n
economic growth outlook weakened, with
\n
growth in the second half of 2025 losing
\n
momentum. In\ufb02ation rose to nearly double
\n
the target level of 2% in 2025, with underlying
\n
price pressures remaining \ufb01rm. However,
\n
there are tentative signs of easing in\ufb02ationary
\n
pressures and in\ufb02ation is assumed to fall back
\n
close to the target by the end of 2026. The
\n
peak unemployment rate is higher than at 31
\n
December 2024. The unemployment rate is
\n
assumed to continue to rise in the near-term,
\n
albeit at a slower pace. The Bank of England
\n
is expected to continue cutting interest rates
\n
in a \u2018gradual and careful\u2019 manner with an
\n
assumed terminal rate in the base case of
\n
3.25%, marginally lower compared to 3.5%
\n
assumed at 31 December 2024. Housing
\n
market activities remained resilient in 2025,
\n
with prices expected to grow modestly.
\n
High-level narrative \u2013 potential developments, vulnerabilities and risks
\n\n \n
Outperformance sustained
\u2013 above trend growth as
consumer sentiment recovers
Upside
Steady growth
\u2013 staying close to trend pace
Base case
Growth
Stalling
\u2013 cautious consumer and policy uncertainty
weighs on activity
Downside
Extreme stress
\u2013 extreme fall in GDP, with policy
support to facilitate sharp recovery
Extreme downside
Sticky
\u2013 strong growth and/or wage policies keep
services in\ufb02ation above target in medium term
Upside
Battle won
\u2013 beyond near-term volatility, services
in\ufb02ation continues to ease, 2% target is met on a
In\ufb02ation
sustained basis
Base case
Slow
\u2013 above target in\ufb02ation in 2026 but swiftly falls to
lower levels
Downside
Close to de\ufb02ation
\u2013 in\ufb02ationary pressures diminish
amidst pronounced weakness in demand
Extreme downside
Recovery
\u2013 job growth rebounds strongly, reversing
much of the recent rise in unemployment rate
Upside
Cooling continues
\u2013 gradual loosening continues into
Labour
2026, before improving
Base case
market
Job shedding
\u2013 redundancies, reduced hours, building
slack
Downside
Depression
\u2013 unemployment hits levels close to previous
peaks amid severe stress
Extreme downside
Limited cuts
\u2013 higher growth and in\ufb02ation keep the
Monetary Policy Committee cautious
Upside
Steady
\u2013 rate cutting cycle largely done, two further
Rates
rate cuts
Base case
short-term
Supportive
\u2013 sharp declines to support recovery
Downside
Sharp drop
\u2013 drastic easing in policy to support a sharp
deterioration in the economy
Extreme downside
Above consensus
\u2013 4%
Upside
Rates
Middle
\u2013 3.25%
Base case
long-term
Low
\u2013 2.5% and below
Downside/Extreme downside
\n\n
Economic drivers
(audited)
\n
Main macroeconomic variables
\n
The main macroeconomic variables for each of the four scenarios used for ECL modelling are set out in the table below.
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Upside
Base case
Downside
downside
average
Upside
Base case
Downside
downside
average
Five-year summary
%
%
%
%
%
%
%
%
%
%
GDP
2.1
1.4
0.5
0.1
1.2
2.0
1.3
0.5
(0.2)
1.1
Unemployment rate
4.3
5.1
5.6
7.0
5.3
3.6
4.3
5.0
6.7
4.6
House price index
5.7
3.3
0.6
(3.8)
2.6
5.8
3.5
0.8
(4.3)
2.7
Commercial real estate price
6.1
2.2
(0.3)
(5.0)
1.9
5.4
1.2
(1.0)
(5.7)
1.1
Consumer price index
2.6
2.4
2.4
1.8
2.3
2.4
2.2
3.5
1.6
2.4
Bank of England base rate
4.0
3.5
2.6
1.4
3.2
4.4
4.0
3.0
1.6
3.6
Stock price index
6.2
4.8
2.8
1.1
4.3
6.3
5.0
3.4
1.1
4.5
World GDP
3.7
3.1
2.5
2.2
3.0
3.8
3.2
2.5
1.6
3.0
Probability weight
22.4
45.0
19.5
13.1
23.2
45.0
19.1
12.7
\n
(1)
The \ufb01ve-year summary runs from 2025-2029 for 31 December 2025
\n
and from 2024-2028 for 31 December 2024.
\n
(2)
The table shows compound annual growth rate (CAGR) for GDP,
\n
average levels for the unemployment rate and Bank of England base
\n
rate and Q4 to Q4 CAGR for other parameters.
\n
(3)
An implicit carbon price is an additional cost related to greenhouse gas
\n
emissions as a result of climate transition policy.
\n
Climate transition
\n
Since 2023, NatWest Group has assessed the
\n
implicit contribution to its base case
\n
macroeconomic scenario from changes in UK
\n
transition policy, expressed as an additional
\n
implicit sectoral carbon price
\n
(3)
\n
. Climate
\n
transition policy contribution to the total ECL
\n
was immaterial at the end of 2025.
\n
In 2025, NatWest Group individually assessed
\n
50 active and potential UK transition policies
\n
that had a signi\ufb01cant impact on the cost of
\n
emissions \u2013 for example, the Emissions
\n
Trading Scheme and Renewables Obligation \u2013
\n
and converted them into equivalent implicit
\n
sectoral carbon prices. The prices were
\n
calculated as the cost per tonne of emissions
\n
abated by each policy. Using an internally
\n
developed model, NatWest Group estimated
\n
the impact of sector carbon prices on key
\n
macroeconomic variables such as GDP and
\n
unemployment. Using this analysis, NatWest
\n
Group created two scenarios, the baseline,
\n
which incorporates climate transition related
\n
impacts, and an alternative scenario, which
\n
excludes them.
\n
Comparing ECL under these two scenarios
\n
allowed NatWest Group to estimate an
\n
aggregate macroeconomic impact of the
\n
analysed transition policies and their
\n
contribution to ECL.
\n
The current approach does not include
\n
physical risks and transition risks, beyond the
\n
assessed transition policies. NatWest Group
\n
will continue to enhance and develop the
\n
approach as reliable data and methodology
\n
become available.
\n
Probability weightings of scenarios
\n
NatWest Group applies a quantitative
\n
approach for IFRS 9 multiple economic
\n
scenarios by selecting speci\ufb01c discrete
\n
scenarios that represent the range of risks in
\n
the economic outlook and assigning
\n
appropriate probability weights.
\n
The approach involves comparing GDP paths
\n
for NatWest Group\u2019s scenarios against a set
\n
of 1,000 model simulations to determine the
\n
percentile in the distribution that aligns most
\n
closely with each scenario.
\n
The probability weight for the base case is
\n
determined \ufb01rst using judgement, while
\n
probability weights for the alternative
\n
scenarios are then assigned based on these
\n
percentiles scores.
\n
The weights were broadly comparable to
\n
those used at 31 December 2024 but with
\n
slightly more downside skew. The assigned
\n
probability weights were judged to be aligned
\n
with the subjective assessment of balance of
\n
the risks in the economy. Given the balance
\n
of risks that the economies in which NatWest
\n
Group operates are exposed to, NatWest
\n
Group judges it appropriate that downside-
\n
biased scenarios have higher combined
\n
probability weights than the upside-biased
\n
scenario.
\n
It presents good coverage to the range of
\n
outcomes assumed in the scenarios, including
\n
the potential for a robust recovery on the
\n
upside and exceptionally challenging
\n
outcomes on the downside. A 22.4%
\n
weighting was applied to the upside scenario,
\n
a 45.0% weighting applied to the base case
\n
scenario, a 19.5% weighting applied to the
\n
downside scenario and a 13.1% weighting
\n
applied to the extreme downside scenario.
\n\n
Economic drivers
(audited)
\n
2,600
\n
2,700
\n
2,800
\n
2,900
\n
3,000
\n
3,100
\n
3,200
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK gross domestic product (\u00a3bn)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
7
\n
8
\n
9
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK unemployment rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
0
\n
1
\n
2
\n
3
\n
4
\n
5
\n
6
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
Bank of England base rate (%)
\n
Upside
Base case
\n
Downside
Extreme downside
\n
100
\n
120
\n
140
\n
160
\n
180
\n
200
\n
220
\n
240
\n
260
\n
Q4 2025
Q4 2026
Q4 2027
Q4 2028
Q4 2029
Q4 2030
\n
UK house prices (index)
\n
Upside
Base case
\n
Downside
Extreme downside
\n\n
Economic drivers
(audited)
\n
Annual \ufb01gures
\n \n \n
GDP - annual growth
Consumer price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
1.4
1.4
1.4
1.4
1.4
2025
3.6
3.6
3.6
3.6
3.6
2026
1.9
1.0
0.3
(3.7)
0.5
2026
2.7
2.3
2.7
0.6
2.3
2027
3.2
1.5
(0.6)
(0.2)
1.3
2027
2.4
2.0
1.8
1.1
1.9
2028
2.3
1.4
0.2
1.4
1.4
2028
2.1
2.0
1.7
1.8
1.9
2029
1.6
1.4
1.4
1.4
1.5
2029
2.0
2.0
2.0
2.0
2.0
2030
1.6
1.4
1.7
1.4
1.5
2030
2.0
2.0
2.0
2.0
2.0
\n\n \n
Unemployment rate - annual average
Bank of England base rate - annual average
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
4.8
4.8
4.8
4.8
4.8
2025
4.24
4.24
4.24
4.24
4.24
2026
4.7
5.4
5.5
6.1
5.3
2026
4.00
3.52
2.94
1.14
3.20
2027
4.1
5.2
6.1
8.1
5.5
2027
4.00
3.25
2.00
0.17
2.77
2028
4.1
5.1
6.0
8.3
5.4
2028
4.00
3.25
2.00
0.39
2.80
2029
4.0
4.9
5.7
7.6
5.2
2029
4.00
3.25
2.00
1.02
2.88
2030
4.0
4.8
5.5
6.9
5.1
2030
4.00
3.25
2.15
1.82
3.02
\n\n \n
House price index - four quarter change
Stock price index - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
3.0
3.0
3.0
3.0
3.0
2025
11.1
11.1
11.1
11.1
11.1
2026
7.8
3.4
(1.2)
(13.1)
1.3
2026
8.1
3.3
(16.0)
(52.9)
(6.7)
2027
7.2
3.4
(2.8)
(14.1)
1.2
2027
5.1
3.3
7.2
33.9
6.5
2028
5.1
3.4
0.1
(0.2)
2.9
2028
3.5
3.3
7.2
25.3
5.9
2029
5.4
3.4
4.4
7.2
4.5
2029
3.5
3.3
7.2
20.2
5.7
2030
5.6
3.4
4.2
6.6
4.4
2030
3.0
3.3
7.2
16.8
5.5
\n\n \n
Commercial real estate price - four quarter change
Upside %
Base case %
Downside %
Extreme downside %
Weighted average %
2025
2.6
2.6
2.6
2.6
2.6
2026
14.1
2.9
(6.8)
(24.1)
-
2027
4.4
2.6
(2.5)
(13.0)
0.6
2028
5.5
1.5
2.8
7.0
3.3
2029
4.2
1.6
2.6
6.8
2.9
2030
2.7
1.6
2.5
6.5
2.5
\n\n
Economic drivers
(audited)
\n
Worst points
\n\n \n
2025
2024
Extreme
Weighted
Extreme
Weighted
Downside
downside
average
Downside
downside
average
%
Quarter
%
Quarter
%
%
Quarter
%
Quarter
%
GDP
-
Q4 2027
(3.8)
Q4 2026
-
-
Q1 2024
(4.1)
Q4 2025
-
Unemployment rate - peak
6.2
Q4 2027
8.5
Q4 2027
5.6
5.6
Q4 2026
8.5
Q1 2027
4.9
House price index
(2.4)
Q2 2028
(25.9)
Q2 2028
-
(1.9)
Q2 2027
(25.6)
Q3 2027
-
Commercial real estate price
(7.3)
Q2 2027
(33.3)
Q3 2027
-
(10.5)
Q2 2026
(35.0)
Q3 2026
(1.8)
Consumer price index
- highest four quarter change
3.8
Q3 2025
3.8
Q3 2025
3.8
6.1
Q1 2026
3.5
Q1 2024
3.5
Bank of England base rate - extreme level
2.0
Q1 2025
0.1
Q1 2025
2.8
2.0
Q1 2024
0.1
Q1 2024
2.9
Stock price index
(6.7)
Q4 2026
(47.7)
Q4 2026
-
(0.2)
Q4 2025
(27.4)
Q4 2025
-
\n
(1)
The figures show falls relative to the starting period for GDP, house price index,
\n
commercial real estate price and stock price index. For unemployment rate, it
\n
shows highest value through the scenario horizon. For consumer price index, it
\n
shows highest annual percentage change. For Bank of England base rate, it
\n
shows highest or lowest value through the horizon. The calculations are
\n
performed over five years, with a starting point of Q4 2024 for 31 December
\n
2025 scenarios and Q4 2023 for 31 December 2024 scenarios.
Impairment, provisioning and write-
offs (audited)
In the overall assessment of credit risk,
impairment provisioning and write-offs are
used as key indicators of credit quality.
SICR
Defaulted exposures are classi\ufb01ed in Stage 3
and subject to lifetime ECL measurement.
Remaining exposures are assessed for SICR
since initial recognition. Where exposures are
identi\ufb01ed with SICR, they are classi\ufb01ed in
Stage 2 and assessed using a lifetime ECL
measurement. Exposures not considered
deteriorated are assessed with a 12-month
ECL. NatWest Group applies a framework to
identify deterioration, primarily based on
changes in lifetime PD, supported by
additional qualitative high-risk backstops.
\u2022
IFRS 9 lifetime PD assessment (the
primary driver) \u2013 relies on measuring the
relative deterioration in forward-looking
lifetime PD and is assessed monthly. SICR
is determined by comparing the residual
lifetime PD at the balance sheet date with
the lifetime PD at the date of initial
recognition (DOIR). If the current lifetime
PD exceeds the origination PD by more
than a de\ufb01ned threshold, SICR is assumed
to have occurred and the exposure moved
into Stage 2 for a lifetime ECL
assessment. For Non-Personal, a doubling
of PD would indicate a SICR, subject to a
minimum PD uplift of 0.1%. For Personal
portfolios and small and medium-sized
enterprise retail, the criteria vary by risk
band, as detailed in the following table:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Personal
PD bandings (based
\u00a0
risk
on
residual lifetime PD
PD deterioration
bands
calculated at DOIR)
threshold criteria
A
<0.762%
PD@DOIR + 1%
B
<4.306%
PD@DOIR + 3%
C
>=4.306%
1.7 x PD@DOIR
\n
\u2022
Qualitative high-risk backstop assessment
\u2013 supplements the PD assessment to
evaluate whether signi\ufb01cant deterioration
in lifetime risk of default occurred. This
included the mandatory 30+ days past
due backstop, as prescribed by IFRS 9
guidance, as well as other elements such
as forbearance support, Non-Personal
exposures managed within the Wholesale
Problem Debt Management framework,
and adverse credit bureau results for
Personal customers.
\u2022
Persistence (Personal and small and
medium-sized enterprise retail customers
only) \u2013 the persistence rule ensures that
accounts which have met the criteria for
PD driven deterioration are still considered
to be signi\ufb01cantly deteriorated for three
months thereafter. This additional rule
enhances the timeliness of capture into
Stage 2. The persistence rule is applied to
PD driven deterioration only.
Lifetime
The de\ufb01nitions of initial recognition and asset
lifetime are important considerations when
determining the amount of lifetime losses to
be applied.
\u2022
Initial recognition refers to the date that a
transaction (or account) is \ufb01rst recognised
on the balance sheet, with the PD at that
point serving as the basis for subsequent
determination of SICR, as detailed above.
\u2022
For asset lifetime, the approach is aligned
with IFRS 9 requirements:
o
Term lending \u2013 the contractual
maturity date is used and adjusted
for behavioural trends where
applicable, such as expected
prepayment and amortisation.
o
Revolving facilities \u2013 for Personal
portfolios (excluding credit cards),
asset duration is determined by
behavioural life, which was typically
greater than contractual life. For the
Non-Personal portfolios, asset
duration is based on annual
customer review schedules.
Governance
The IFRS 9 PD, EAD and LGD models are
subject to NatWest Group\u2019s model risk policy,
which stipulates periodic model monitoring
and, re-validation and de\ufb01nes approval
procedures and authorities according to
model materiality. Post model adjustments are
applied where management deemed them
necessary to ensure an adequate level of
overall ECL provision. All post model
adjustments undergo review, challenge and
approval by the relevant model or provisioning
committees.
Post model adjustments will remain a key
focus area of NatWest Group\u2019s ongoing ECL
adequacy assessment process. A
comprehensive framework has been
established that incorporates analysis of
diverse economic data, external benchmarks
and portfolio performance trends with a
particular focus on segments (across both
Personal and Non-Personal portfolios) that
may be more susceptible to speci\ufb01c risk
factors.
Measurement uncertainty and ECL
sensitivity analysis (audited)
The recognition and measurement of ECL is
complex and requires signi\ufb01cant judgement
and estimation, especially during times of
economic volatility and uncertainty. This
includes the formulation and incorporation of
multiple forward-looking economic conditions
into ECL to meet the measurement objectives
of IFRS 9. The ECL provision is sensitive to the
model inputs and economic assumptions used
in the estimation.
Simulations were conducted to assess the
impact of various economic scenarios,
including base case, upside, downside and
extreme downside scenarios. The potential
ECL impacts re\ufb02ected the simulated impact as
at 31 December 2025. In the simulations,
NatWest Group assumed that the economic
macro variables associated with each
scenario would replace the existing base case
economic assumptions, giving them a 100%
probability weighting and therefore serving as
a single economic scenario. These scenarios
were applied to all modelled portfolios in the
table, with the simulation affecting both PDs
and LGDs. Post model adjustments included in
the ECL estimates were adjusted in line with
the modelled ECL movements. However,
adjustments that were judgemental in nature,
such as those for deferred model calibrations
and economic uncertainty, were not
automatically recalculated. Instead, they will
be re-evaluated by management through ECL
governance for any new economic scenario
outlook.
As expected, the scenarios created varying
impacts on ECL by portfolio, and these
impacts were deemed reasonable. The
simulations assumed that existing modelled
relationships between key economic variables
and drivers would hold. However, in practice,
other factors such as potential changes in
customer behaviour and policy changes could
also impact the wider availability of credit.
The focus of the simulations was on ECL
provisioning requirements for performing
exposures in Stage 1 and Stage 2. The
simulations were run on a stand-alone basis
and were independent of each other. Scenario
impacts on SICR were considered when
evaluating the ECL movements of Stage 1
and Stage 2. In all scenarios, the total
exposure remained the same, but exposure
by stage varied.
Stage 3 provisions are not subject to the same
level of measurement uncertainty, as default is
an observed event as at the balance sheet
date and defaulted LGD is typically more
impacted by borrower speci\ufb01c factors rather
than economics. Therefore, Stage 3 provisions
were not considered in this analysis. NatWest
Group\u2019s core criterion for identifying a SICR is
based on PD deterioration. Under the
simulations, changes in PDs resulted in
exposures moving between Stage 1 and
Stage 2, contributing to the ECL impact.
\n\n
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 modelled loans (\u00a3m)
Retail Banking - mortgages
181,869
182,357
183,665
181,119
176,988
Retail Banking - unsecured
12,761
12,858
13,232
12,601
11,683
Non-Personal - property
31,809
31,924
31,995
31,764
23,027
Non-Personal - non-property
141,924
142,660
142,972
141,841
118,828
368,363
369,799
371,864
367,325
330,526
Stage 1 modelled ECL (\u00a3m)
Retail Banking - mortgages
42
42
41
42
43
Retail Banking - unsecured
293
300
288
291
278
Non-Personal - property
66
46
38
71
148
Non-Personal - non-property
189
156
144
202
353
590
544
511
606
822
Stage 1 coverage (%)
Retail Banking - mortgages
0.02%
0.02%
0.02%
0.02%
0.02%
Retail Banking - unsecured
2.30%
2.33%
2.18%
2.31%
2.38%
Non-Personal - property
0.21%
0.14%
0.12%
0.22%
0.64%
Non-Personal - non-property
0.13%
0.11%
0.10%
0.14%
0.30%
0.16%
0.15%
0.14%
0.16%
0.25%
Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
15,821
15,333
14,025
16,571
20,702
Retail Banking - unsecured
3,621
3,524
3,150
3,781
4,699
Non-Personal - property
3,072
2,957
2,886
3,117
11,854
Non-Personal - non-property
15,721
14,985
14,673
15,804
38,817
38,235
36,799
34,734
39,273
76,072
Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
36
33
29
38
55
Retail Banking - unsecured
388
378
326
408
516
Non-Personal - property
55
47
42
59
351
Non-Personal - non-property
305
263
242
317
880
784
721
639
822
1,802
Stage 2 coverage (%)
Retail Banking - mortgages
0.23%
0.22%
0.21%
0.23%
0.27%
Retail Banking - unsecured
10.72%
10.73%
10.35%
10.79%
10.98%
Non-Personal - property
1.79%
1.59%
1.46%
1.89%
2.96%
Non-Personal - non-property
1.94%
1.76%
1.65%
2.01%
2.27%
2.05%
1.96%
1.84%
2.09%
2.37%
\n
For the notes to this table refer to the following page.
\n\n
Measurement uncertainty and ECL sensitivity analysis (audited)
\n\n \n
Moderate
Moderate
Extreme
Base
upside
downside
downside
2025
Actual
scenario
scenario
scenario
scenario
Stage 1 and Stage 2 modelled loans (\u00a3m)
Retail Banking - mortgages
197,690
197,690
197,690
197,690
197,690
Retail Banking - unsecured
16,382
16,382
16,382
16,382
16,382
Non-Personal - property
34,881
34,881
34,881
34,881
34,881
Non-Personal - non-property
157,645
157,645
157,645
157,645
157,645
406,598
406,598
406,598
406,598
406,598
Stage 1 and Stage 2 modelled ECL (\u00a3m)
Retail Banking - mortgages
78
75
70
80
98
Retail Banking - unsecured
681
678
614
699
794
Non-Personal - property
121
93
80
130
499
Non-Personal - non-property
494
419
386
519
1,233
1,374
1,265
1,150
1,428
2,624
Stage 1 and Stage 2 coverage (%)
Retail Banking - mortgages
0.04%
0.04%
0.04%
0.04%
0.05%
Retail Banking - unsecured
4.16%
4.14%
3.75%
4.27%
4.85%
Non-Personal - property
0.35%
0.27%
0.23%
0.37%
1.43%
Non-Personal - non-property
0.31%
0.27%
0.24%
0.33%
0.78%
0.34%
0.31%
0.28%
0.35%
0.65%
Reconciliation to Stage 1 and Stage 2
ECL (\u00a3m)
ECL on modelled exposures
1,374
1,265
1,150
1,428
2,624
ECL on non-modelled exposures
36
36
36
36
36
Total Stage 1 and Stage 2 ECL (\u00a3m)
1,410
1,301
1,186
1,464
2,660
Variance to actual total Stage 1 and
Stage 2 ECL (\u00a3m)
-
(109)
(224)
54
1,250
Reconciliation to Stage 1 and Stage 2
flow exposures (\u00a3m)
Modelled loans
406,598
406,598
406,598
406,598
406,598
Non-modelled loans
19,264
19,264
19,264
19,264
19,264
Other asset classes
160,130
160,130
160,130
160,130
160,130
\n
(1)
Reflects ECL for all modelled exposure in scope for IFRS 9. The analysis
\n
excludes non-modelled portfolios and exposure relating to bonds and cash.
\n
(2)
All simulations are run on a stand-alone basis and are independent of each
\n
other, with the potential ECL impact reflecting the simulated impact as at 31
\n
December 2025. The simulations change the composition of Stage 1 and
\n
Stage 2 exposure but total exposure was unchanged under each scenario as
\n
the loan population was static.
\n
(3)
Refer to the Economic drivers section for details of economic scenarios.
\n
(4)
Refer to the NatWest Group 2024 Annual Report and Accounts for 2024
\n
comparatives.
\n
\u2022
If the economics were as negative as observed in the extreme downside (i.e. 100% probability weighting), total Stage 1 and Stage 2 ECL was simulated to increase by \u00a31.3 billion (approximately
\n
90%). In this scenario, Stage 2 exposure increased signi\ufb01cantly and was the key driver of the simulated ECL rise. The movement in Stage 2 balances in the other simulations was less signi\ufb01cant.
\n
\u2022
In the Non-Personal portfolio, there was a signi\ufb01cant increase in ECL under the extreme downside scenario on non-property portfolios, driven by a signi\ufb01cant deterioration in the stock index.
\n
\u2022
Given the continued economic uncertainty, NatWest Group utilised a framework of quantitative and qualitative measures to support the levels of ECL coverage. This included economic data, credit
\n
performance insights and problem debt trends. This was particularly important for consideration of post model adjustments.
ECL post model adjustments (audited)
The table below shows ECL post model adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0
Private Banking
\u00a0 \u00a0
\u00a0
Retail Banking
& Wealth
Commercial
\u00a0
\u00a0
Mortgages
Other
Management
& Institutional
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Deferred model calibrations
-
-
1
14
15
Economic uncertainty
44
42
11
149
246
Other adjustments
-
19
-
16
35
Total
44
61
12
179
296
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
33
38
4
73
148
- Stage 2
11
20
8
106
145
- Stage 3
-
3
-
-
3
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Deferred model calibrations
-
-
1
18
19
Economic uncertainty
90
22
8
179
299
Other adjustments
-
-
-
18
18
Total
90
22
9
215
336
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- Stage 1
58
9
5
94
166
- Stage 2
26
13
4
119
162
- Stage 3
6
-
-
2
8
\n
Post model adjustments reduced since 31 December 2024, re\ufb02ecting the removal of COVID-19 post model adjustments combined with updates to parameters.
\u2022
Retail Banking
\u2013 As
at
31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a386 million (2024 \u2013 \u00a3112 million).
This reduction was driven by a revision to the
cost of
living
post model adjustment, standing at \u00a386 million (2024 \u2013 \u00a3105 million), and was the sole remaining
economic uncertainty
post model adjustment.
This change was based on a review
of back-
testing. Despite ongoing economic and geopolitical uncertainty, the Retail Banking portfolios
demonstrated
resilience, supported by a robust risk appetite. The
cost of living
post model adjustment
continued to address the risk in segments of the Retail Banking portfolio that were more susceptible to affordability challenges. It focused on key affordability factors, including over-indebted
borrowers, poor credit card affordability status and lower income customers in fuel poverty.
\u2022
A \u00a319 million post model adjustment was recognised as a judgemental measure while additional loss data is accumulated on the recently migrated Sainsbury\u2019s Bank lending portfolio.
\u2022
Commercial & Institutional
\u2013 As at 31 December 2025, the post model adjustment for economic uncertainty decreased to \u00a3149 million (2024 \u2013 \u00a3179 million). The reduction was driven by the
retirement of COVID-19 post model adjustments which were associated with government scheme lending (2024 \u2013 \u00a329 million). The continued economic uncertainty post model adjustments
re\ufb02ected downgrades to risk pro\ufb01le that were applied to the sectors that were considered most at risk from the current economic and geopolitical headwinds.
\u2022
The remaining \u00a330 million (2024 \u2013 \u00a336 million) of post model adjustments were for deferred model calibrations relating to re\ufb01nance risk and to mitigate the effect of operational timing delays in the
identi\ufb01cation and \ufb02agging of a signi\ufb01cant increase in credit risk.
Credit risk - Banking activities
Introduction
This section details the credit risk pro\ufb01le of NatWest Group\u2019s banking activities. Refer to Accounting policy 2.3 and Note 14 to the consolidated \ufb01nancial statements for policies and critical judgements
relating to impairment loss determination.
Financial instruments within the scope of the IFRS 9 ECL framework (audited)
Refer to Note 9 to the consolidated \ufb01nancial statements for balance sheet analysis of \ufb01nancial assets that are classi\ufb01ed as amortised cost or fair value through other comprehensive income (FVOCI),
the starting point for IFRS 9 ECL framework assessment.
\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
31 December 2025
31 December 2024
\u00a0
Gross
ECL
Net
Gross
ECL
Net
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Balance sheet total gross amortised cost and FVOCI
593.9
\u00a0 \u00a0
567.2
\u00a0 \u00a0
In scope of IFRS 9 ECL framework
592.4
\u00a0 \u00a0
564.4
\u00a0 \u00a0
% in scope
100%
\u00a0 \u00a0
100%
\u00a0 \u00a0
Loans to customers - in scope - amortised cost
422.9
3.6
419.3
404.2
3.4
400.8
Loans to customers - in scope - FVOCI
0.2
-
0.2
-
-
-
Loans to banks - in scope - amortised cost
6.8
-
6.8
6.0
-
6.0
Total loans - in scope
429.9
3.6
426.3
410.2
3.4
406.8
Stage 1
386.6
0.6
386.0
363.8
0.6
363.2
Stage 2
38.6
0.8
37.8
40.5
0.8
39.7
Stage 3
4.7
2.2
2.5
5.9
2.0
3.9
Other financial assets - in scope - amortised cost
120.7
-
120.7
116.4
-
116.4
Other financial assets - in scope - FVOCI
41.8
-
41.8
37.8
-
37.8
Total other financial assets - in scope
162.5
-
162.5
154.2
-
154.2
Stage 1
161.5
-
161.5
153.4
-
153.4
Stage 2
1.0
-
1.0
0.8
-
0.8
Out of scope of IFRS 9 ECL framework
1.5
na
1.5
2.8
na
2.8
Loans to customers - out of scope - amortised cost
(0.6)
na
(0.6)
(0.5)
na
(0.5)
Loans to banks - out of scope - amortised cost
0.2
na
0.2
0.1
na
0.1
Other financial assets - out of scope - amortised cost
1.7
na
1.7
3.2
na
3.2
Other financial assets - out of scope - FVOCI
0.2
na
0.2
-
na
-
na = not applicable
The assets outside the scope of IFRS 9 ECL framework were as follows:
\u2022
Settlement balances, items in the course of collection, cash balances and other non-credit risk assets of \u00a31.8 billion (2024 \u2013 \u00a33.3 billion). These were assessed as having no ECL unless there was
evidence that they were defaulted.
\u2022
Equity shares of \u00a30.1 billion (2024 \u2013 \u00a30.2 billion) as not within the IFRS 9 ECL framework by de\ufb01nition.
\u2022
Fair value adjustments on loans hedged by interest rate swaps, where the underlying loan was within the IFRS 9 ECL scope of \u00a3(0.3) billion (2024 \u2013 \u00a3(0.5) billion).
Contingent liabilities and commitments
Total
contingent liabilities (including \ufb01nancial guarantees) and commitments within IFRS 9 ECL scope of \u00a3147.2 billion (2024 \u2013 \u00a3140.0 billion) comprised Stage 1 \u00a3135.8 billion (2024 \u2013 \u00a3129.8 billion);
Stage 2 \u00a310.8 billion (2024 \u2013 \u00a39.4 billion); and Stage 3 \u00a30.6 billion (2024 \u2013 \u00a30.8 billion). The ECL relating to off-balance sheet exposures was \u00a30.1 billion (2024 \u2013 \u00a30.1 billion). The total ECL in the
remainder of the Credit risk section of \u00a33.6 billion (2024 \u2013 \u00a33.4 billion) included ECL for both on and off-balance sheet exposures.
\n\n
Segment analysis \u2013 portfolio summary (audited)
\n
The table below shows gross loans and ECL, by segment and stage, within the scope of the IFRS 9 ECL framework.
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
196,325
17,552
138,769
34,005
386,651
196,325
14,140
2,355
84
3,412
136,414
33,921
Stage 2
19,113
1,115
18,289
65
38,582
19,113
337
32
18
778
18,257
47
Stage 3
2,231
348
2,102
2
4,683
2,231
260
44
2
88
2,058
-
Of which: individual
-
276
1,180
-
1,456
-
188
5
-
88
1,175
-
Of which: collective
2,231
72
922
2
3,227
2,231
72
39
2
-
883
-
Total
217,669
19,015
159,160
34,072
429,916
217,669
14,737
2,431
104
4,278
156,729
33,968
ECL provisions
(3)
Stage 1
335
13
256
10
614
335
3
1
3
10
255
7
Stage 2
424
13
357
2
796
424
1
-
1
12
357
1
Stage 3
1,075
50
1,048
2
2,175
1,075
24
11
2
26
1,037
-
Of which: individual
-
50
548
-
598
-
24
5
-
26
543
-
Of which: collective
1,075
-
500
2
1,577
1,075
-
6
2
-
494
-
Total
1,834
76
1,661
14
3,585
1,834
28
12
6
48
1,649
8
ECL provisions coverage
(4)
Stage 1 (%)
0.17
0.07
0.18
0.03
0.16
0.17
0.02
0.04
3.57
0.29
0.19
0.02
Stage 2 (%)
2.22
1.17
1.95
3.08
2.06
2.22
0.30
-
5.56
1.54
1.96
2.13
Stage 3 (%)
48.18
14.37
49.86
100.00
46.44
48.18
9.23
25.00
100.00
29.55
50.39
-
Total
0.84
0.40
1.04
0.04
0.83
0.84
0.19
0.49
5.77
1.12
1.05
0.02
Impairment (releases)/losses
ECL (release)/charge
(5)
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Stage 1
(67)
(9)
(124)
(4)
(204)
(67)
(1)
(1)
4
(8)
(123)
(8)
Stage 2
295
9
116
1
421
295
2
1
1
7
115
-
Stage 3
209
10
233
2
454
209
4
1
2
6
232
-
Of which: individual
-
10
178
-
188
-
4
-
-
6
178
-
Of which: collective
209
-
55
2
266
209
-
1
2
-
54
-
Total
437
10
225
(1)
671
437
5
1
7
5
224
(8)
Amounts written-off
373
1
205
-
579
373
1
6
-
-
199
-
Of which: individual
-
1
136
-
137
-
1
-
-
-
136
-
Of which: collective
373
-
69
-
442
373
-
6
-
-
63
-
\n
For the notes to this table refer to the following page.
\n\n
Segment analysis \u2013 portfolio summary (audited)
\n\n \n
Of which:
Personal
Non-Personal
Private
Private
Private
Banking &
Central
Banking &
Central
Banking &
Central
Retail
Wealth
Commercial &
items
Retail
Wealth
Commercial &
items
Wealth
Commercial &
items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Management
Institutional
& other
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
182,366
17,155
128,988
35,312
363,821
182,366
13,726
2,226
-
3,429
126,762
35,312
Stage 2
24,242
844
15,339
49
40,474
24,242
352
42
-
492
15,297
49
Stage 3
3,268
322
2,340
-
5,930
3,268
251
52
-
71
2,288
-
Of which: individual
-
233
1,052
-
1,285
-
162
5
-
71
1,047
-
Of which: collective
3,268
89
1,288
-
4,645
3,268
89
47
-
-
1,241
-
Total
209,876
18,321
146,667
35,361
410,225
209,876
14,329
2,320
-
3,992
144,347
35,361
ECL provisions
(3)
Stage 1
279
16
289
14
598
279
2
3
-
14
286
14
Stage 2
428
12
346
1
787
428
1
-
-
11
346
1
Stage 3
1,063
36
941
-
2,040
1,063
21
15
-
15
926
-
Of which: individual
-
36
415
-
451
-
21
7
-
15
408
-
Of which: collective
1,063
-
526
-
1,589
1,063
-
8
-
-
518
-
Total
1,770
64
1,576
15
3,425
1,770
24
18
-
40
1,558
15
ECL provisions coverage
(4)
Stage 1 (%)
0.15
0.09
0.22
0.04
0.16
0.15
0.01
0.13
-
0.41
0.23
0.04
Stage 2 (%)
1.77
1.42
2.26
2.04
1.94
1.77
0.28
-
-
2.24
2.26
2.04
Stage 3 (%)
32.53
11.18
40.21
-
34.40
32.53
8.37
28.85
-
21.13
40.47
-
Total
0.84
0.35
1.07
0.04
0.83
0.84
0.17
0.78
-
1.00
1.08
0.04
Impairment (releases)/losses
ECL (release)/charge
(5)
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Stage 1
(208)
(11)
(205)
(14)
(438)
(208)
(2)
(1)
-
(9)
(204)
(14)
Stage 2
278
(1)
79
4
360
278
2
1
-
(3)
78
4
Stage 3
212
1
224
-
437
212
1
1
-
-
223
-
Of which: individual
-
1
191
-
192
-
1
(1)
-
-
192
-
Of which: collective
212
-
33
-
245
212
-
2
-
-
31
-
Total
282
(11)
98
(10)
359
282
1
1
-
(12)
97
(10)
Amounts written-off
430
1
223
-
654
430
1
2
-
-
221
-
Of which: individual
-
1
143
-
144
-
1
-
-
-
143
-
Of which: collective
430
-
80
-
510
430
-
2
-
-
78
-
\n
(1)
The table shows gross loans only and excludes amounts that were outside the scope of the ECL framework. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 \u2013 \u00a34 million) related to assets classified as FVOCI and \u00a30.1 billion (2024 \u2013 \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions, including ECL for other non-loan assets and unutilised exposure, divided by loans \u2013 amortised cost and FVOCI. Some segments with a high proportion of debt securities or unutilised exposure may result in a not meaningful (nm) coverage
\n
ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets classified as FVOCI and includes a \u00a33 million charge (2024 - \u00a35 million release) related to contingent liabilities.
\n\n
Segmental loans and impairment metrics (audited)
\n
\u2022
Retail Banking
\u2013 Balance sheet growth during the year was mainly due to mortgages.
\n
Within the Unsecured portfolios, alongside organic growth in the credit cards and personal
\n
loans portfolios, the acquisition of the Sainsbury\u2019s Bank portfolios further contributed to the
\n
balance sheet growth. Asset quality was maintained during the year, re\ufb02ecting ongoing
\n
customer resilience and robust risk appetite. Alongside steady portfolio performance, good
\n
book and total ECL coverage for Retail Banking remained broadly consistent with 31
\n
December 2024. Underlying ECL coverage increased due to growth in unsecured lending,
\n
including the acquisition of the Sainsbury\u2019s Bank portfolio earlier in 2025, but this was offset
\n
by balance sheet management actions, including a mortgage securitisation transaction and
\n
unsecured debt sales. The proportion of Stage 3 loans declined over the year, mainly as a
\n
result of the balance sheet management actions described above, notably the mortgage
\n
securitisation, which reduced Stage 3 loans by \u00a30.8 billion. Furthermore, there was an
\n
enhancement to the mortgage de\ufb01nition of default systems and process, resulting in
\n
approximately \u00a30.4 billion of loans migrating from Stage 3 back to the good book. While
\n
default performance was broadly stable overall, unsecured \ufb02ows into Stage 3 increased
\n
year-on-year, driven by strategic growth and seasoning of credit card balances since 2022.
\n
\u2022
Commercial & Institutional
\u2013 Balance sheet growth in the year was primarily in corporates
\n
and institutions and was re\ufb02ected in Stage 1. Despite the increase in performing book
\n
exposures, performing book provisions decreased, driven by reductions in post model
\n
adjustments for economic uncertainty. Total provision balance growth primarily re\ufb02ected
\n
the impact of a small number of individual charges in Stage 3. Despite the increase in
\n
Stage 3 ECL, loan balances \ufb02owing into Stage 3 were lower than the prior year. The
\n
combination of increased Stage 3 charges combined with lower in\ufb02ows into Stage 3 drove
\n
the increase in Stage 3 ECL provisions coverage. Total book coverage remained broadly
\n
similar year-on-year, as the increase in Stage 3 ECL provisions coverage was more than
\n
offset by reductions in performing book coverage. The full year 2025 total charge was
\n
higher compared to 2024, primarily as the good book release in 2025 was notably lower
\n
than the release in 2024. The lower release in 2025 re\ufb02ected lower reductions in post
\n
model adjustments compared to 2024.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows \ufb01nancial assets and off-balance sheet exposures gross of ECL and related ECL provisions, impairment and past due by sector, asset quality and geographical region.
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- UK
215,220
8,311
11,401
234,932
101,441
45,700
1,477
148,618
383,550
- Other Europe
9
-
-
9
7,010
14,059
351
21,420
21,429
- RoW
-
-
-
-
9,778
14,697
462
24,937
24,937
Loans by stage
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Stage 1
197,939
5,988
8,977
212,904
97,779
73,959
2,009
173,747
386,651
- Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Stage 3
1,339
242
956
2,537
1,990
141
15
2,146
4,683
- Of which: individual
167
1
25
193
1,112
136
15
1,263
1,456
- Of which: collective
1,172
241
931
2,344
878
5
-
883
3,227
Loans - past due analysis
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- Not past due
212,492
7,993
10,388
230,873
114,895
74,257
2,275
191,427
422,300
- Past due 1-30 days
1,510
71
92
1,673
2,261
137
-
2,398
4,071
- Past due 31-90 days
469
86
130
685
274
8
-
282
967
- Past due 91-180 days
275
62
104
441
110
6
-
116
557
- Past due >180 days
483
99
687
1,269
689
48
15
752
2,021
Loans - Stage 2
15,951
2,081
1,468
19,500
18,460
356
266
19,082
38,582
- Not past due
14,521
1,979
1,335
17,835
17,605
343
266
18,214
36,049
- Past due 1-30 days
1,138
41
48
1,227
610
5
-
615
1,842
- Past due 31-90 days
292
61
85
438
245
8
-
253
691
Weighted average life
(2)
- ECL measurement (years)
9
4
6
5
7
4
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.46
3.68
5.05
0.77
1.18
0.14
5.40
0.83
0.80
- Basel (%)
0.62
3.91
3.52
0.85
1.04
0.15
5.40
0.75
0.80
ECL provisions by geography
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- UK
270
520
1,088
1,878
1,367
103
5
1,475
3,353
- Other Europe
2
-
-
2
104
10
1
115
117
- RoW
-
-
-
-
61
42
12
115
115
\n
For the notes to this table refer to page 207.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages
(1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
272
520
1,088
1,880
1,532
155
18
1,705
3,585
- Stage 1
45
125
172
342
228
37
7
272
614
- Stage 2
36
205
185
426
360
5
5
370
796
- Stage 3
191
190
731
1,112
944
113
6
1,063
2,175
- Of which: individual
16
1
12
29
453
110
6
569
598
- Of which: collective
175
189
719
1,083
491
3
-
494
1,577
ECL provisions coverage (%)
0.13
6.26
9.54
0.80
1.30
0.21
0.79
0.87
0.83
- Stage 1 (%)
0.02
2.09
1.92
0.16
0.23
0.05
0.35
0.16
0.16
- Stage 2 (%)
0.23
9.85
12.60
2.18
1.95
1.40
1.88
1.94
2.06
- Stage 3 (%)
14.26
78.51
76.46
43.83
47.44
80.14
40.00
49.53
46.44
ECL (release)/charge
(142)
263
329
450
168
56
(3)
221
671
- UK
(144)
263
329
448
148
60
(6)
202
650
- Other Europe
2
-
-
2
18
1
-
19
21
- RoW
-
-
-
-
2
(5)
3
-
-
Amounts written-off
92
118
170
380
199
-
-
199
579
Loans by residual maturity
215,229
8,311
11,401
234,941
118,229
74,456
2,290
194,975
429,916
- \u22641 year
2,764
1,856
2,736
7,356
33,768
52,130
1,765
87,663
95,019
- >1 and \u22645 year
8,332
6,452
6,898
21,682
51,723
18,262
77
70,062
91,744
- > 5 and \u2264 15 year
42,759
3
1,772
44,534
24,136
4,016
290
28,442
72,976
- > 15 year
161,374
-
(5)
161,369
8,602
48
158
8,808
170,177
Other financial assets by asset quality
(3)
-
-
-
-
4,513
28,490
129,532
162,535
162,535
- AQ1-AQ4
-
-
-
-
4,506
28,301
129,532
162,339
162,339
- AQ5-AQ8
-
-
-
-
7
189
-
196
196
Off-balance sheet
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- Loan commitments
14,799
22,696
7,514
45,009
75,723
21,555
501
97,779
142,788
- Contingent liabilities
-
-
36
36
2,881
1,476
-
4,357
4,393
Off-balance sheet by asset quality
(3)
14,799
22,696
7,550
45,045
78,604
23,031
501
102,136
147,181
- AQ1-AQ4
13,926
415
6,140
20,481
50,709
21,030
114
71,853
92,334
- AQ5-AQ8
859
22,205
1,283
24,347
27,525
1,924
12
29,461
53,808
- AQ9
4
11
12
27
61
-
375
436
463
- AQ10
10
65
115
190
309
77
-
386
576
\n
For the notes to this table refer to page 207.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Loans by geography
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- UK
209,846
6,930
9,749
226,525
97,409
43,412
562
141,383
367,908
- Other Europe
-
-
-
-
6,311
14,747
766
21,824
21,824
- RoW
-
-
-
-
8,014
12,162
317
20,493
20,493
Loans by stage
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Stage 1
186,250
4,801
7,267
198,318
94,991
69,021
1,491
165,503
363,821
- Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Stage 3
2,535
176
860
3,571
2,279
59
21
2,359
5,930
- Of which: individual
141
-
26
167
1,046
51
21
1,118
1,285
- Of which: collective
2,394
176
834
3,404
1,233
8
-
1,241
4,645
Loans - past due analysis
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- Not past due
206,739
6,721
8,865
222,325
107,855
70,055
1,627
179,537
401,862
- Past due 1-30 days
1,404
50
70
1,524
2,530
211
-
2,741
4,265
- Past due 31-90 days
580
51
99
730
398
2
18
418
1,148
- Past due 91-180 days
408
41
96
545
139
49
-
188
733
- Past due >180 days
715
67
619
1,401
812
4
-
816
2,217
Loans - Stage 2
21,061
1,953
1,622
24,636
14,464
1,241
133
15,838
40,474
- Not past due
19,939
1,889
1,521
23,349
13,485
1,228
133
14,846
38,195
- Past due 1-30 days
853
31
37
921
640
11
-
651
1,572
- Past due 31-90 days
269
33
64
366
339
2
-
341
707
Weighted average life
(2)
- ECL measurement (years)
8
4
6
6
6
2
nm
6
6
Weighted average 12 months PDs
(2)
- IFRS 9 (%)
0.51
3.23
4.59
0.76
1.24
0.16
5.51
0.86
0.80
- Basel (%)
0.68
3.65
3.18
0.87
1.11
0.15
4.16
0.76
0.82
ECL provisions by geography
462
381
969
1,812
1,504
90
19
1,613
3,425
- UK
462
381
969
1,812
1,335
37
12
1,384
3,196
- Other Europe
-
-
-
-
109
9
-
118
118
- RoW
-
-
-
-
60
44
7
111
111
\n
For the notes to this table refer to the following page.
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n\n \n
Personal
Non-Personal
Mortgages (1)
Credit cards
Other personal
Total
Corporate and other (2)
Financial institutions
Sovereign
Total
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
ECL provisions by stage
462
381
969
1,812
1,504
90
19
1,613
3,425
- Stage 1
77
77
130
284
264
38
12
314
598
- Stage 2
60
186
183
429
344
12
2
358
787
- Stage 3
325
118
656
1,099
896
40
5
941
2,040
- Of which: individual
11
-
17
28
382
36
5
423
451
- Of which: collective
314
118
639
1,071
514
4
-
518
1,589
ECL provisions coverage (%)
0.22
5.50
9.94
0.80
1.35
0.13
1.16
0.88
0.83
- Stage 1 (%)
0.04
1.60
1.79
0.14
0.28
0.06
0.80
0.19
0.16
- Stage 2 (%)
0.28
9.52
11.28
1.74
2.38
0.97
1.50
2.26
1.94
- Stage 3 (%)
12.82
67.05
76.28
30.78
39.32
67.80
23.81
39.89
34.40
ECL (release)/charge
8
115
161
284
55
19
1
75
359
- UK
8
115
161
284
43
1
-
44
328
- Other Europe
-
-
-
-
17
(7)
-
10
10
- RoW
-
-
-
-
(5)
25
1
21
21
Amounts written-off
18
102
313
433
221
-
-
221
654
Loans by residual maturity
209,846
6,930
9,749
226,525
111,734
70,321
1,645
183,700
410,225
- \u22641 year
3,367
3,903
3,186
10,456
34,929
54,971
822
90,722
101,178
- >1 and \u22645 year
11,651
3,027
5,551
20,229
48,075
10,967
488
59,530
79,759
- > 5 and \u2264 15 year
45,454
-
1,006
46,460
20,623
4,270
298
25,191
71,651
- > 15 year
149,374
-
6
149,380
8,107
113
37
8,257
157,637
Other financial assets by asset quality
(3)
-
-
-
-
3,644
31,102
119,502
154,248
154,248
- AQ1-AQ4
-
-
-
-
3,639
30,743
119,502
153,884
153,884
- AQ5-AQ8
-
-
-
-
5
359
-
364
364
Off-balance sheet
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- Loan commitments
13,806
20,135
7,906
41,847
72,940
20,341
239
93,520
135,367
- Contingent liabilities
-
-
41
41
3,024
1,584
-
4,608
4,649
Off-balance sheet by asset quality
(3)
13,806
20,135
7,947
41,888
75,964
21,925
239
98,128
140,016
- AQ1-AQ4
12,951
510
6,568
20,029
47,896
20,063
155
68,114
88,143
- AQ5-AQ8
839
19,276
1,336
21,451
27,657
1,813
21
29,491
50,942
- AQ9
1
12
17
30
19
-
63
82
112
- AQ10
15
337
26
378
392
49
-
441
819
\n
(1)
Includes a portion of Private Banking & Wealth Management lending secured against residential real estate, in line with ECL calculation methodology. Private Banking & Wealth Management and RBS International mortgages are reported in the UK, reflecting the country of lending origination and
\n
includes crown dependencies.
\n
(2)
Not within the scope of the Independent auditors\u2019 report.
\n
(3)
AQ bandings are based on Basel PDs and mapping is as follows:
\n\n \n
Internal asset quality band
Probability of default range
Indicative S&P rating
Internal asset quality band
Probability of default range
Indicative S&P rating
AQ1
0% - 0.034%
AAA to AA
AQ6
1.076% - 2.153%
BB- to B+
AQ2
0.034% - 0.048%
AA to AA-
AQ7
2.153% - 6.089%
B+ to B
AQ3
0.048% - 0.095%
A+ to A
AQ8
6.089% - 17.222%
B- to CCC+
AQ4
0.095% - 0.381%
BBB+ to BBB-
AQ9
17.222% - 100%
CCC to C
AQ5
0.381% - 1.076%
BB+ to BB
AQ10
100%
D
\n\n
Sector analysis \u2013 portfolio summary (audited)
\n
The table below shows ECL by stage, for the Personal portfolio and Non-Personal portfolio, including the three largest borrowing sector clusters included in corporate and other.
\n\n \n
Loans - amortised cost and FVOCI
Off-balance sheet
ECL provisions
Stage 1
Stage 2
Stage 3
Total
Loan commitments
Contingent liabilities
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
212,904
19,500
2,537
234,941
45,009
36
342
426
1,112
1,880
Mortgages
(1)
197,939
15,951
1,339
215,229
14,799
-
45
36
191
272
Credit cards
5,988
2,081
242
8,311
22,696
-
125
205
190
520
Other personal
8,977
1,468
956
11,401
7,514
36
172
185
731
1,088
Non-Personal
173,747
19,082
2,146
194,975
97,779
4,357
272
370
1,063
1,705
Financial institutions
(2)
73,959
356
141
74,456
21,555
1,476
37
5
113
155
Sovereign
2,009
266
15
2,290
501
-
7
5
6
18
Corporate and other
97,779
18,460
1,990
118,229
75,723
2,881
228
360
944
1,532
Of which:
Commercial real estate
17,838
1,272
294
19,404
6,646
162
55
22
120
197
Mobility and logistics
13,021
4,312
81
17,414
10,194
520
24
45
40
109
Consumer industries
12,875
2,912
389
16,176
11,149
496
33
68
199
300
Total
386,651
38,582
4,683
429,916
142,788
4,393
614
796
2,175
3,585
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Personal
198,318
24,636
3,571
226,525
41,847
41
284
429
1,099
1,812
Mortgages
(1)
186,250
21,061
2,535
209,846
13,806
-
77
60
325
462
Credit cards
4,801
1,953
176
6,930
20,135
-
77
186
118
381
Other personal
7,267
1,622
860
9,749
7,906
41
130
183
656
969
Non-Personal
165,503
15,838
2,359
183,700
93,520
4,608
314
358
941
1,613
Financial institutions
(2)
69,021
1,241
59
70,321
20,341
1,584
38
12
40
90
Sovereign
1,491
133
21
1,645
239
-
12
2
5
19
Corporate and other
94,991
14,464
2,279
111,734
72,940
3,024
264
344
896
1,504
Of which:
Commercial real estate
16,191
1,517
433
18,141
6,661
143
70
30
146
246
Mobility and logistics
13,363
2,384
148
15,895
9,367
595
26
35
67
128
Consumer industries
13,312
3,015
444
16,771
10,706
595
45
90
188
323
Total
363,821
40,474
5,930
410,225
135,367
4,649
598
787
2,040
3,425
\n
(1)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential mortgages portfolio had Energy Performance Certificate (EPC) data available (2024 \u2013 \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C (2024 \u2013 46.3%).
\n
(2)
Includes transactions, such as securitisations, where the underlying risk may be in other sectors.
\n\n
Non-Personal forbearance (audited)
\n
The table below shows Non-Personal forbearance, Heightened Monitoring and Risk of Credit Loss by sector. The table shows current exposure but re\ufb02ects risk transfers where there is a guarantee by
\n
another customer.
\n\n \n
Corporate and other
Financial institutions
Sovereign
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Forbearance (flow)
3,495
43
12
3,550
Forbearance (stock)
4,167
122
12
4,301
Heightened Monitoring and Risk of Credit Loss
6,115
103
2
6,220
2024
Forbearance (flow)
3,359
119
18
3,496
Forbearance (stock)
4,556
106
18
4,680
Heightened Monitoring and Risk of Credit Loss
5,931
150
1
6,082
\n
Sector analysis \u2013 portfolio summary (audited)
\n
\u2022
Loans by geography and sector
\u2013 In line with NatWest Group\u2019s strategic focus, exposures continued to be mainly in the UK.
\n
\u2022
Loans by stage
\u2013 Stage 3 balances reduced overall, with a small reduction in Non-Personal due to write-offs and lower in\ufb02ows, and a larger reduction in Personal mortgages following the
\n
securitisation transaction that removed \u00a30.8 billion of Stage 3 assets, alongside a default de\ufb01nition systems and process enhancement that moved loans back to the good book. Stage 1 balances
\n
increased across the Personal portfolios, driven by growth in mortgages and unsecured lending, including the Sainsbury\u2019s Bank portfolio acquisition. Stage 2 balances were broadly unchanged from
\n
the end of 2024, with reductions in Personal mortgages, linked to PD model enhancements and stable portfolio trends offset by increases in Non-Personal, largely driven by post model adjustment
\n
downgrades to sectors deemed most at risk of economic uncertainty.
\n
\u2022
Loans \u2013 Past due analysis
\u2013 Within the Personal portfolio, arrears balances overall decreased during 2025 mainly driven by the balance sheet management actions within the mortgage portfolio
\n
described previously. For the unsecured portfolios, arrears balances increased due to book growth and portfolio maturation. In Non-Personal, arrears balances reduced in line with Stage 3 balance
\n
reduction. The vast majority of Stage 2 balances remained up to date, as Stage 2 is normally captured through other forward-looking Stage 2 triggers.
\n
\u2022
Weighted average 12 months PDs
\u2013 Both IFRS 9 and Basel PDs remained broadly stable during the year overall, noting the reduction in Personal mortgages due to PD model enhancements and
\n
an increase in unsecured PDs driven by strategic growth and seasoning of credit card balances since 2022. Non-Personal PDs were broadly stable in the year. The higher PD in sovereigns
\n
re\ufb02ected a single entity where lending is fully guaranteed.
\n
\u2022
ECL provisions by stage and ECL provisions coverage
\u2013 Overall provisions increased from 31 December 2024, following an increase in good book ECL in the Personal portfolios, driven by the
\n
portfolio acquisition of Sainsbury\u2019s Bank and organic growth in unsecured lending, and a small number of signi\ufb01cant individual Non-Personal Stage 3 charges. Stage 3 ECL growth was partly offset
\n
by the transfer of mortgage assets to a securitisation special purpose vehicle. Provisions coverage remained consistent with 31 December 2024.
\n
\u2022
ECL charge
\u2013 The 2025 impairment charge, primarily re\ufb02ected a small number of
signi\ufb01cant
individual charges in the Non-Personal portfolio alongside the initial ECL cost from the portfolio
\n
acquisition from Sainsbury\u2019s Bank within Personal. This was partially offset by post model adjustment releases in the good book and one-off releases, notably on the de\ufb01nition of default systems
\n
and process enhancement on Personal mortgages and a mortgage securitisation. The increased charge in Non-Personal portfolio primarily re\ufb02ected lower levels of reduction in performing book
\n
post model adjustments compared to 2024.
\n
\u2022
Loans by residual maturity
\u2013 The maturity pro\ufb01le of the portfolios remained consistent with prior periods. In mortgages, as expected, the vast majority of exposures were greater than \ufb01ve years. In
\n
unsecured lending, cards and other, exposures were concentrated in less than \ufb01ve years. In Non-Personal portfolios the maturity pro\ufb01le will vary by product and sectors, but is typically less than
\n
\ufb01ve years for most exposures.
\n
\u2022
Other \ufb01nancial assets by asset quality
\u2013
These assets were cash and debt securities, and generally of high credit quality as re\ufb02ected in the AQ banding.
\n
\u2022
Off-balance sheet exposures by asset quality
\u2013 The AQ band split of off-balance sheet exposures broadly mirrored the drawn loans portfolio for non-defaulted exposures. In the Non-Personal
\n
portfolio, off-balance sheet exposures increased year-on-year, re\ufb02ecting an increase in unutilised exposure in corporates and \ufb01nancial institutions. The increase was primarily in the AQ1 to AQ4
\n
band, indicating high credit quality.
\n
\u2022
Non-Personal problem debt
\u2013 Exposures in the Wholesale Problem Debt Management framework marginally increased during 2025 due to an in\ufb02ow of corporate customers onto the framework
\n
across a range of sectors. There was no change in the reasons for customers moving onto the framework from 2024, with trading issues and cash/liquidity remaining the key
main drivers.
\n
\u2022
Non-Personal forbearance
\u2013
Exposures classi\ufb01ed as forborne reduced marginally across multiple sectors, leading to lower stock values in corporates. A portion of forbearance \ufb02ows related to cases
\n
in Customer Lending Support subject to repeated forbearance.
\n\n
Credit risk enhancement and mitigation (audited)
\n
The table below shows exposures of modelled portfolios within the scope of the ECL framework and related credit risk enhancement and mitigation (CREM).
\n\n \n
Gross
Maximum credit risk
CREM by type
CREM coverage
Exposure post CREM
exposure
ECL
Total
Stage 3
Financial (1)
Property
Other (2)
Total
Stage 3
Total
Stage 3
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
Cash and balances at central banks
84.1
-
84.1
-
-
-
-
-
-
84.1
-
Loans - amortised cost
(3)
429.9
3.5
426.4
2.5
47.9
261.0
26.0
334.9
2.1
91.5
0.4
Personal
(4)
234.9
1.9
233.0
1.4
1.4
214.5
-
215.9
1.2
17.1
0.2
Non-Personal
(5)
195.0
1.6
193.4
1.1
46.5
46.5
26.0
119.0
0.9
74.4
0.2
Debt securities
78.5
-
78.5
-
0.3
-
-
0.3
-
78.2
-
Total financial assets
592.5
3.5
589.0
2.5
48.2
261.0
26.0
335.2
2.1
253.8
0.4
Contingent liabilities and commitments
Personal
(6)
45.0
-
45.0
0.2
1.1
3.2
-
4.3
0.1
40.7
0.1
Non-Personal
102.2
0.1
102.1
0.4
4.1
7.9
5.3
17.3
0.1
84.8
0.3
Total off-balance sheet
147.2
0.1
147.1
0.6
5.2
11.1
5.3
21.6
0.2
125.5
0.4
Total exposure
739.7
3.6
736.1
3.1
53.4
272.1
31.3
356.8
2.3
379.3
0.8
2024
Financial assets
Cash and balances at central banks
91.8
-
91.8
-
-
-
-
-
-
91.8
-
Loans - amortised cost
(3)
410.2
3.3
406.9
3.9
46.3
253.0
25.5
324.8
3.4
82.1
0.5
Personal
(4)
226.5
1.8
224.7
2.5
0.8
209.1
-
209.9
2.2
14.8
0.3
Non-Personal
(5)
183.7
1.5
182.2
1.4
45.5
43.9
25.5
114.9
1.2
67.3
0.2
Debt securities
62.5
-
62.5
-
0.1
-
-
0.1
-
62.4
-
Total financial assets
564.5
3.3
561.2
3.9
46.4
253.0
25.5
324.9
3.4
236.3
0.5
Contingent liabilities and commitments
Personal
(6)
41.9
-
41.9
0.4
1.1
3.7
-
4.8
-
37.1
0.4
Non-Personal
98.1
0.1
98.0
0.4
3.1
8.2
5.1
16.4
0.1
81.6
0.3
Total off-balance sheet
140.0
0.1
139.9
0.8
4.2
11.9
5.1
21.2
0.1
118.7
0.7
Total exposure
704.5
3.4
701.1
4.7
50.6
264.9
30.6
346.1
3.5
355.0
1.2
\n
(1)
Includes cash and securities collateral.
\n
(2)
Includes guarantees, charges over trade debtors, other asset finance related physical collateral as well as the amount by which credit risk exposure is reduced through netting arrangements, mainly cash management pooling, which give NatWest Group a legal right to set off the financial asset
\n
against a financial liability due to the same counterparty. Any additional credit risk mitigation from a synthetic securitisation is not included in the table above.
\n
(3)
NatWest Group holds collateral in respect of individual loans \u2013 amortised cost to banks and customers. This collateral includes mortgages over property (both personal and commercial); charges over business assets such as plant and equipment; inventories and trade debtors; and guarantees of
\n
lending from parties other than the borrower. NatWest Group obtains collateral in the form of securities in reverse repurchase agreements. Collateral values are capped at the value of the loan.
\n
(4)
Stage 3 mortgage exposures have relatively limited uncovered exposure reflecting the security held. On unsecured credit cards and other personal borrowing, the residual uncovered amount reflects historical experience of continued cash recovery post default through ongoing engagement with
\n
customers.
\n
(5)
Stage 3 exposures post credit risk enhancement and mitigation in Non-Personal mainly represent enterprise value and the impact of written down collateral values; an individual assessment to determine ECL will consider multiple scenarios and in some instances allocate a probability weighting to a
\n
collateral value in excess of the written down value.
\n
(6)
The Personal gross exposure value includes \u00a311.4 billion (2024 \u2013 \u00a310.1 billion) in respect of pipeline mortgages where a committed offer has been made to a customer but where the funds have not yet been drawn down. When drawn down, the exposure would be covered by a security over the
\n
borrower\u2019s property.
\n\n
Personal portfolio (audited)
\n
Disclosures in the Personal portfolio section include drawn exposure (gross of provisions).
\n\n \n
2025
2024
Private Banking
Private Banking
Retail
& Wealth
Commercial &
Central items
Retail
& Wealth
Commercial &
Central items
Banking
Management
Institutional
& other
Total
Banking
Management
Institutional
& other
Total
Personal lending
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Mortgages
199,972
13,038
2,210
9
215,229
194,865
12,826
2,161
-
209,852
Of which:
Owner occupied
180,323
11,644
1,508
8
193,483
176,137
11,348
1,457
-
188,942
Buy-to-let
19,649
1,394
702
1
21,746
18,728
1,478
704
-
20,910
Interest only
21,812
11,533
436
-
33,781
22,186
11,276
437
-
33,899
Mixed
(1)
9,977
76
4
-
10,057
10,384
40
8
-
10,432
ECL provisions
(2)
248
17
5
2
272
440
12
10
-
462
Other personal lending
(3)
17,696
1,699
221
95
19,711
15,045
1,301
242
-
16,588
ECL provisions
(2)
1,586
11
7
4
1,608
1,330
12
3
-
1,345
Total personal lending
217,668
14,737
2,431
104
234,940
209,910
14,127
2,403
-
226,440
Mortgage LTV ratios
- Owner occupied
57%
61%
57%
42%
57%
56%
59%
56%
-
56%
- Stage 1
57%
59%
57%
-
57%
56%
59%
55%
-
56%
- Stage 2
52%
57%
59%
32%
52%
55%
61%
56%
-
55%
- Stage 3
47%
69%
67%
56%
51%
50%
64%
74%
-
51%
- Buy-to-let
54%
62%
55%
26%
55%
53%
60%
52%
-
53%
- Stage 1
54%
60%
54%
-
55%
54%
60%
51%
-
54%
- Stage 2
52%
56%
62%
26%
52%
52%
57%
55%
-
52%
- Stage 3
51%
56%
66%
24%
53%
52%
56%
59%
-
53%
Gross new mortgage lending
34,458
1,492
313
-
36,263
26,440
1,395
257
-
28,092
Of which:
Owner occupied
32,059
1,372
229
-
33,660
25,300
1,266
183
-
26,749
- LTV > 90%
1,677
-
-
-
1,677
888
-
-
-
888
Weighted average LTV
(4)
71%
66%
61%
-
70%
70%
63%
71%
-
70%
Buy-to-let
2,399
120
84
-
2,603
1,140
129
74
-
1,343
Weighted average LTV
(4)
61%
65%
61%
-
61%
61%
62%
56%
-
61%
Interest only
2,443
1,357
54
-
3,854
1,575
1,238
42
-
2,855
Mixed
(1)
1,049
-
1
-
1,050
1,150
-
1
-
1,151
Mortgage forbearance
Forbearance flow
(5)
328
14
1
-
343
473
8
6
-
487
Forbearance stock
1,203
10
9
1
1,223
1,680
20
15
-
1,715
Current
918
2
3
-
923
1,214
9
10
-
1,233
1-3 months in arrears
110
6
-
-
116
146
9
-
-
155
>3 months in arrears
175
2
6
1
184
320
2
5
-
327
\n
(1) Includes accounts which have an interest only sub-account and a capital and interest sub-account to provide a more comprehensive view of interest only exposures.
\n
(2) Retail Banking excludes a non-material amount of lending and provisions held on relatively small legacy portfolios.
\n
(3) Comprises unsecured lending except for Private Banking & Wealth Management, which includes both secured and unsecured lending. It excludes loans that are commercial in nature.
\n
(4) New mortgage lending LTV re\ufb02ects the LTV at the time of lending.
\n
(5) Forbearance \ufb02ows only include an account once per year, although some accounts may be subject to multiple forbearance deals. Forbearance deals post default are excluded from these \ufb02ows
\n\n
Personal portfolio (audited)
\n
Mortgage LTV distribution by stage
\n
The table below shows gross mortgage lending and related ECL by LTV band for the Retail Banking portfolio.
\n\n \n
Mortgages
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
66,203
7,099
597
73,899
10
10
94.0
114.0
-
0.1
15.7
0.2
>50% and \u226470%
63,802
5,948
338
70,088
16
15
50.0
81.0
-
0.3
14.8
0.1
>70% and \u226480%
27,658
1,745
73
29,476
8
6
12.0
26.0
-
0.3
16.4
0.1
>80% and \u226490%
20,777
744
39
21,560
7
4
6.0
17.0
-
0.5
15.4
0.1
>90% and
\u2264100%
4,438
76
7
4,521
1
1
2.0
4.0
-
1.3
28.6
0.1
>100%
9
1
7
17
-
-
3
3
-
-
42.9
17.6
Total with LTVs
182,887
15,613
1,061
199,561
42
36
167
245
-
0.2
15.7
0.1
Other
406
1
4
411
2
-
1
3
0.5
-
25.0
0.7
Total
183,293
15,614
1,065
199,972
44
36
168
248
-
0.2
15.8
0.1
2024
\u226450%
64,040
8,344
1,159
73,543
21
16
153
190
-
0.2
13.2
0.3
>50% and \u226470%
61,739
7,741
855
70,335
29
23
104
156
-
0.3
12.2
0.2
>70% and \u226480%
25,022
2,361
173
27,556
13
9
22
44
0.1
0.4
12.7
0.2
>80% and \u226490%
16,718
1,769
85
18,572
9
9
13
31
0.1
0.5
15.3
0.2
>90% and
\u2264100%
4,076
512
26
4,614
2
3
5
10
-
0.6
19.2
0.2
>100%
14
4
13
31
-
-
6
6
-
-
46.2
19.4
Total with LTVs
171,609
20,731
2,311
194,651
74
60
303
437
-
0.3
13.1
0.2
Other
212
1
1
214
2
-
1
3
0.9
-
100.0
1.4
Total
171,821
20,732
2,312
194,865
76
60
304
440
-
0.3
13.1
0.2
\n
\u2022
Mortgage balances increased during 2025 with continuing organic growth. Unsecured lending grew overall, driven by continuing growth in prime quality whole of market lending and balance
\n
transfer credit card segments, as well as the acquisition of Sainsbury\u2019s Bank credit card and personal loan portfolios.
\n
\u2022
Portfolios and new business were closely monitored against agreed operating limits. These included loan-to-value ratios, buy-to-let concentrations, new-build concentrations and credit quality.
\n
Lending criteria, affordability calculations and assumptions for new lending were adjusted during the year, to maintain credit quality in line with appetite and to ensure customers are assessed fairly
\n
as economic conditions change.
\n
\u2022
LTV distribution of portfolio was broadly consistent with the prior year with an increase in balances in the 70-90% LTV bands consistent with increased new business during the year, including
\n
support for \ufb01rst time buyers.
\n
\u2022
The mortgage forbearance reported in 2025 was net of the mortgage securitisation previously mentioned, which reduced the stock by \u00a30.4 billion at the year-end.
\n\n
Personal portfolio (audited)
\n
Mortgage LTV distribution by region
\n
The table below shows gross mortgage lending by LTV band for Retail Banking, by geographical region.
\n\n \n
Flood risk (1,2)
Weighted
% of regional
% of regional
Lending at high/
\u226450%
50%\u226480%
80%\u2264100%
>100%
Total
average LTV
Other
Total
Total
lending at high
lending at very
very high risk (3)
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
\u00a3m
\u00a3m
%
risk (>60)
high risk (>80)
%
South East
13,656
19,277
5,022
1
37,956
57
3
37,959
19
3.7
1.2
4.9
Greater London
13,505
18,501
4,069
3
36,078
56
4
36,082
18
4.8
0.9
5.7
East of England
8,128
12,167
3,379
-
23,674
57
2
23,676
12
2.9
1.4
4.3
North West
7,479
8,443
2,158
2
18,082
55
1
18,083
9
2.9
2.0
4.9
South West
6,578
8,679
2,454
-
17,711
56
1
17,712
9
2.7
1.0
3.7
West Midlands
5,385
7,228
2,013
1
14,627
57
2
14,629
7
1.8
0.6
2.4
Scotland
4,868
5,821
1,498
1
12,188
55
2
12,190
6
2.5
1.3
3.8
Rest of the UK
14,300
19,448
5,488
9
39,245
57
396
39,641
20
2.8
1.9
4.7
Total
73,899
99,564
26,081
17
199,561
56
411
199,972
100
3.3
1.3
4.6
2024
South East
13,622
19,007
4,506
1
37,136
56
3
37,139
19
3.6
1.2
4.8
Greater London
13,951
18,537
3,391
2
35,881
55
3
35,884
18
4.8
0.9
5.7
East of England
7,776
11,730
3,211
2
22,719
58
1
22,720
12
2.9
1.4
4.3
North West
7,507
8,305
1,878
2
17,692
54
1
17,693
9
2.9
1.9
4.8
South West
6,577
8,455
2,055
1
17,088
56
1
17,089
9
2.6
1.0
3.6
West Midlands
5,379
6,970
1,683
1
14,033
56
1
14,034
7
1.8
0.6
2.4
Scotland
4,860
5,766
1,591
1
12,218
55
1
12,219
6
2.4
1.2
3.6
Rest of the UK
13,871
19,121
4,871
21
37,884
57
203
38,087
20
2.4
2.5
4.9
Total
73,543
97,891
23,186
31
194,651
56
214
194,865
100
3.1
1.4
4.5
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
\n
(2)
As at 31 December 2025, \u00a312.9 billion, 99%, of the Private Banking & Wealth Management mortgage portfolio had flood risk data available (2024 \u2013 \u00a312.6 billion, 98.0%). Of which, 6.2% were rated as high flood risk and 1.0% as very high flood risk
(2024 \u2013 5.4% high flood risk and 1.0% very high
\n
flood risk). 64% of the exposure is in the Greater London region.
\n
(3)
Flood risk is modelled by calculating an estimated loss for each flood source different types of flooding (fluvial, pluvial, tidal), annualised for each source and combined for a total flood score. Flood defences were considered where available. Flood scores were allocated per property based on the
\n
potential annualised loss (\u00a3) to a property dependent on the type, frequency and depth of flooding modelled across different return periods. The scoring ranged from 0 to 100, with 0 being lowest and 100 being the highest risk. A score of 61 and above was considered to be high risk and
\n
properties with a score of 81 and above were considered to be very high risk after flood mitigants were taken-into-account.
Personal portfolio (audited)
Retail Banking \ufb01xed rate mortgages by roll-off date
(1)
The table below shows gross \ufb01xed rate mortgage lending for Retail Banking, by roll-off date.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Retail Banking mortgages - gross
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
exposure
(2)
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Fixed rate roll-off
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
<=1 year
41,993
3,897
158
46,048
34,989
4,309
336
39,634
>1<= 2 years
63,366
4,978
183
68,527
44,146
5,080
418
49,644
>2 years
67,544
4,901
243
72,688
78,629
8,667
693
87,989
Total
172,903
13,776
584
187,263
157,764
18,056
1,447
177,267
\n
(1)
Not within the scope of the Independent auditors\u2019 report.
(2)
Excluding the Metro Bank portfolio acquired during 2024
Retail Banking mortgages by Energy Performance Certi\ufb01cate (EPC) rating
(1)
The table below shows the energy ef\ufb01ciency of Retail Banking residential mortgages
(2)
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Owner occupied
Buy-to-let
Total
Owner occupied
Buy-to-let
Total
EPC rating
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
A
1,415
27
1,442
788
18
806
B
22,217
1,659
23,876
21,923
1,480
23,403
C
35,153
6,767
41,920
31,353
5,876
37,229
D
46,108
5,991
52,099
45,455
5,748
51,203
E
13,305
1,269
14,574
14,455
1,369
15,824
F
2,709
46
2,755
3,026
55
3,081
G
628
10
638
695
13
708
Unclassified
58,788
3,880
62,668
58,442
4,169
62,611
Total
180,323
19,649
199,972
176,137
18,728
194,865
\n
(1)
Not within scope of the Independent auditors\u2019 report
(2)
As at 31 December 2025, \u00a3144.2 billion, 67%, of the total residential
mortgages portfolio had Energy Performance Certificate (EPC) data available
(2024 - \u00a3139.1 billion, 66.3%). Of which, 48.8% were rated as EPC A to C
(2024 \u2013 46.3%).
\n\n
Commercial real estate (CRE)
\n
CRE LTV distribution by stage (audited)
\n
The table below shows CRE gross loans and related ECL by LTV band.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
\u226450%
7,324
222
26
7,572
20
5
6
31
0.3
2.3
23.1
0.4
>50% and \u226460%
4,417
144
40
4,601
15
2
6
23
0.3
1.4
15.0
0.5
>60% and \u226470%
881
21
27
929
4
1
10
15
0.5
4.8
37.0
1.6
>70% and \u2264100%
270
146
35
451
1
4
19
24
0.4
2.7
54.3
5.3
>100%
183
2
83
268
2
-
39
41
1.1
-
47.0
15.3
Total with LTVs
13,075
535
211
13,821
42
12
80
134
0.3
2.2
37.9
1.0
Total portfolio
average LTV
48%
58%
115%
49%
Other
Investment
(1)
2,745
331
36
3,112
5
4
11
20
0.2
1.2
30.6
0.6
Investment
15,820
866
247
16,933
47
16
91
154
0.3
1.8
36.8
0.9
Development and
other
(2)
2,018
406
47
2,471
8
6
29
43
0.4
1.5
61.7
1.7
Total
17,838
1,272
294
19,404
55
22
120
197
0.3
1.7
40.8
1.0
2024
\u226450%
7,334
380
48
7,762
28
6
7
41
0.4
1.6
14.6
0.5
>50% and \u226460%
3,829
169
53
4,051
19
5
9
33
0.5
3.0
17.0
0.8
>60% and \u226470%
584
198
34
816
3
5
8
16
0.5
2.5
23.5
2.0
>70% and \u2264100%
312
83
79
474
2
4
21
27
0.6
4.8
26.6
5.7
>100%
139
8
119
266
1
-
56
57
0.7
-
47.1
21.4
Total with LTVs
12,198
838
333
13,369
53
20
101
174
0.4
2.4
30.3
1.3
Total portfolio
average LTV
46%
51%
102%
48%
Other
Investment
(1)
2,132
348
41
2,521
6
6
15
27
0.3
1.7
36.6
1.1
Investment
14,330
1,186
374
15,890
59
26
116
201
0.4
2.2
31.0
1.3
Development and
other
(2)
1,861
331
59
2,251
11
4
30
45
0.6
1.2
50.8
2.0
Total
16,191
1,517
433
18,141
70
30
146
246
0.4
2.0
33.7
1.4
\n
(1)
Relates mainly to business banking and unsecured corporate lending.
\n
(2)
Relates to the development of commercial and residential properties, along
\n
with CRE activities that are not strictly investment or development. LTV is not
\n
a meaningful measure for this type of lending activity.
\n
\u2022
Overall \u2013 The majority of the CRE portfolio was located and managed in the UK. Business appetite and strategy was aligned across NatWest Group.
\n
\u2022
2025 trends \u2013 There was strong growth in the residential and retail sector, with other CRE sectors remaining broadly \ufb02at. LTV pro\ufb01le remained stable.
\n
\u2022
Credit quality \u2013 Credit quality improved, with marginally fewer exposures in the Wholesale Problem Debt Management framework.
\n
\u2022
Risk appetite \u2013 Lending appetite is subject to regular review and implemented at sub-sector level. Overall appetite slightly increased over the year supported by the view that cyclical risks are
\n
currently at a lower level.
Flow statements (audited)
The \ufb02ow statements that follow show the main ECL and related income statement movements. They also show the changes in ECL as well as the changes in related \ufb01nancial assets used in
determining ECL. Due to differences in scope, exposures may differ from
those reported in other tables, principally in relation to exposures in Stage 1 and Stage 2. These differences do not have a
material ECL effect. Other points to note:
\u2022
Financial assets include treasury liquidity portfolios, comprising balances at central banks and debt securities, as well as loans. Both modelled and non-modelled portfolios are included.
\u2022
Stage transfers (for example, exposures moving from Stage 1 into Stage 2) are a key feature of the ECL movements, with the net re-measurement cost of transitioning to a worse stage being a
primary driver of income statement charges. Similarly, there is an ECL bene\ufb01t for accounts improving stage.
\u2022
Changes in risk parameters shows the reassessment of the ECL within a given stage, including any ECL overlays and residual income statement gains or losses at the point of write-off or
accounting write-down.
\u2022
Other (P&L only items) includes any subsequent changes in the value of written-down assets (for example, fortuitous recoveries) along with other direct write-off items such as direct recovery
costs. Other (P&L only items) affects the income statement but does not affect balance sheet ECL movements.
\u2022
Amounts written-off represent the gross asset written-off against accounts with ECL, including the net asset written-off for any debt sale activity.
\u2022
There were some \ufb02ows from Stage 1 into Stage 3 including transfers due to unexpected default events with a post model adjustment in place for Commercial & Institutional to account for this risk.
\u2022
The effect of any change in post model adjustments during the year is typically reported under changes in risk parameters, as are any effects arising from changes to the underlying models.
\u2022
All movements are captured monthly and aggregated. Interest suspended post default is included within Stage 3 ECL with the movement in the value of suspended interest during the year
reported under currency translation and other adjustments.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
NatWest Group total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Currency translation and other adjustments
(644)
-
14
1
156
163
(474)
164
Transfers from Stage 1 to Stage 2
(40,165)
(229)
40,165
229
-
-
-
-
Transfers from Stage 2 to Stage 1
33,789
433
(33,789)
(433)
-
-
-
-
Transfers to Stage 3
(397)
(5)
(2,527)
(258)
2,924
263
-
-
Transfers from Stage 3
161
18
999
47
(1,160)
(65)
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(299)
\u00a0
616
-
447
\u00a0
764
Changes in risk parameters
\u00a0
(114)
\u00a0
(18)
-
312
\u00a0
180
Other changes in net exposure
38,094
212
(7,429)
(175)
(2,349)
(256)
28,316
(219)
Other (P&L only items)
\u00a0
(3)
\u00a0
(2)
-
(49)
\u00a0
(54)
Income statement (releases)/charges
\u00a0
(204)
\u00a0
421
\u00a0
454
\u00a0
671
Amounts written-off
-
-
-
-
(579)
(579)
(579)
(579)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(150)
\u00a0
(150)
At 31 December 2025
546,394
614
39,598
796
4,893
2,175
590,885
3,585
Net carrying amount
545,780
\u00a0
38,802
\u00a0
2,718
\u00a0
587,300
\u00a0
At 1 January 2024
504,345
709
40,294
976
5,621
1,960
550,260
3,645
2024 movements
11,211
(111)
1,871
(189)
280
80
13,362
(220)
At 31 December 2024
515,556
598
42,165
787
5,901
2,040
563,622
3,425
Net carrying amount
514,958
\u00a0
41,378
\u00a0
3,861
\u00a0
560,197
\u00a0
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - mortgages
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
171,333
76
20,992
60
2,303
305
194,628
441
Currency translation and other
adjustments
-
-
-
-
92
92
92
92
Transfers from Stage 1 to Stage 2
(16,507)
(17)
16,507
17
-
-
-
-
Transfers from Stage 2 to Stage 1
17,824
24
(17,824)
(24)
-
-
-
-
Transfers to Stage 3
(14)
-
(865)
(7)
879
7
-
-
Transfers from Stage 3
23
-
806
11
(829)
(11)
-
-
Net re-measurement of ECL on stage
transfer
(7)
7
7
7
Changes in risk parameters
(19)
(18)
74
37
Other changes in net exposure
9,277
(13)
(3,792)
(10)
(1,274)
(152)
4,211
(175)
Other (P&L only items)
-
-
(16)
(16)
Income statement (releases)/charges
(39)
(21)
(87)
(147)
Amounts written-off
-
-
-
-
(87)
(87)
(87)
(87)
Unwinding of discount
-
-
(67)
(67)
At 31 December 2025
181,936
44
15,824
36
1,084
168
198,844
248
Net carrying amount
181,892
15,788
916
198,596
At 1 January 2024
174,038
87
17,827
60
2,068
250
193,933
397
2024 movements
(2,705)
(11)
3,165
-
235
55
695
44
At 31 December 2024
171,333
76
20,992
60
2,303
305
194,628
441
Net carrying amount
171,257
20,932
1,998
194,187
\n
\u2022
ECL coverage for mortgages decreased during the year, primarily driven by the reduction in economic uncertainty post model adjustments (supported by back-testing) and a de\ufb01nition of default
\n
systems and process enhancement in the \ufb01rst half of the year. Additionally, the transfer of \u00a32.1 billion of mortgages with \u00a30.1 billion of ECL to a securitisation special purpose vehicle further
\n
reduced ECL coverage overall, noting that \u00a30.8 billion of these loans were in Stage 3.
\n
\u2022
Stage 3 in\ufb02ows reduced in the year, with the portfolio showing continued resilience alongside the effect of the de\ufb01nition of default systems and process enhancement earlier in the year.
\n
\u2022
Stable portfolio trends and PD model enhancements underpinned PD reductions in the year, resulting in a reduction in Stage 2 balances.
\n
\u2022
The relatively small ECL cost for net re-measurement on transfer into Stage 3 included the effect of risk targeted ECL adjustments, when previously in the good book. Refer to the ECL post model
\n
adjustments section for further details.
\n
\u2022
Write-off occurs once the repossessed property has been sold and there is a residual shortfall balance remaining outstanding. This would typically be within \ufb01ve years from default but can be
\n
longer.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - credit cards
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
4,523
76
2,034
186
162
117
6,719
379
Currency translation and other
adjustments
-
-
-
-
6
6
6
6
Transfers from Stage 1 to Stage 2
(2,329)
(52)
2,329
52
-
-
-
-
Transfers from Stage 2 to Stage 1
1,339
105
(1,339)
(105)
-
-
-
-
Transfers to Stage 3
(36)
(1)
(231)
(78)
267
79
-
-
Transfers from Stage 3
3
2
14
5
(17)
(7)
-
-
Net re-measurement of ECL on stage
transfer
(71)
191
101
221
Changes in risk parameters
15
30
25
70
Other changes in net exposure
2,243
50
(640)
(77)
(33)
(1)
1,570
(28)
Other (P&L only items)
-
-
(1)
(1)
Income statement (releases)/charges
(6)
144
124
262
Amounts written-off
-
-
-
-
(118)
(118)
(118)
(118)
Unwinding of discount
-
-
(12)
(12)
At 31 December 2025
5,743
124
2,167
204
267
190
8,177
518
Net carrying amount
5,619
1,963
77
7,659
At 1 January 2024
3,475
70
2,046
204
146
89
5,667
363
2024 movements
1,048
6
(12)
(18)
16
28
1,052
16
At 31 December 2024
4,523
76
2,034
186
162
117
6,719
379
Net carrying amount
4,447
1,848
45
6,340
\n
\u2022
Overall ECL for cards increased during 2025, driven primarily by the acquisition of Sainsbury\u2019s Bank credit card balances alongside continued organic portfolio growth, re\ufb02ecting strong customer
\n
demand, while sustaining robust risk appetite.
\n
\u2022
Flow rates into Stage 3 were slightly higher in 2025 compared to 2024, re\ufb02ecting the strategic growth and seasoning of credit card balances since 2022. This trend contributed to an increase in
\n
PDs during the year, driving a net \ufb02ow into Stage 2 from Stage 1.
\n
\u2022
Charge-off (analogous to partial write-off) typically occurs after 12 missed payments.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Retail Banking - other personal unsecured
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
5,605
127
1,465
182
833
641
7,903
950
Currency translation and other
adjustments
-
-
-
-
27
27
27
27
Transfers from Stage 1 to Stage 2
(2,145)
(95)
2,145
95
-
-
-
-
Transfers from Stage 2 to Stage 1
1,471
157
(1,471)
(157)
-
-
-
-
Transfers to Stage 3
(79)
(3)
(329)
(118)
408
121
-
-
Transfers from Stage 3
7
3
24
10
(31)
(13)
-
-
Net re-measurement of ECL on stage
transfer
(100)
219
63
182
Changes in risk parameters
(33)
(10)
126
83
Other changes in net exposure
1,992
111
(389)
(37)
(128)
(47)
1,475
27
Other (P&L only items)
-
-
30
30
Income statement (releases)/charges
(22)
172
172
322
Amounts written-off
-
-
-
-
(168)
(168)
(168)
(168)
Unwinding of discount
-
-
(33)
(33)
At 31 December 2025
6,851
167
1,445
184
941
717
9,237
1,068
Net carrying amount
6,684
1,261
224
8,169
At 1 January 2024
5,240
149
1,657
238
963
758
7,860
1,145
2024 movements
365
(22)
(192)
(56)
(130)
(117)
43
(195)
At 31 December 2024
5,605
127
1,465
182
833
641
7,903
950
Net carrying amount
5,478
1,283
192
6,953
\n
\u2022
Total ECL increased during the year, primarily driven by the acquisition of Sainsbury\u2019s Bank loan balances and continued organic loan book growth, while arrears performance remained stable,
\n
resulting in ECL coverage levels broadly consistent with 31 December 2024.
\n
\u2022
Flow rates into Stage 3 remained stable, in line with broader portfolio trends on arrears, with overall Stage 3 balances increasing as a result of reduced debt sale activity overall in the year.
\n
\u2022
Write-off occurs once recovery activity with the customer has been concluded or there are no further recoveries expected, but no later than six years after default.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - corporate
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
62,575
175
11,450
273
1,562
659
75,587
1,107
Currency translation and other
adjustments
(331)
-
17
-
24
18
(290)
18
Inter-group transfers
156
1
8
1
1
-
165
2
Transfers from Stage 1 to Stage 2
(14,018)
(50)
14,018
50
-
-
-
-
Transfers from Stage 2 to Stage 1
8,374
103
(8,374)
(103)
-
-
-
-
Transfers to Stage 3
(170)
(1)
(741)
(44)
911
45
-
-
Transfers from Stage 3
54
7
82
15
(136)
(22)
-
-
Net re-measurement of ECL on stage
transfer
(84)
151
214
281
Changes in risk parameters
(22)
(9)
42
11
Other changes in net exposure
7,479
30
(1,776)
(42)
(591)
(37)
5,112
(49)
Other (P&L only items)
(4)
(3)
(61)
(68)
Income statement (releases)/charges
(80)
97
158
175
Amounts written-off
-
-
-
-
(166)
(166)
(166)
(166)
Unwinding of discount
-
-
(26)
(26)
At 31 December 2025
64,119
159
14,684
292
1,605
727
80,408
1,178
Net carrying amount
63,960
14,392
878
79,230
At 1 January 2024
61,402
226
12,275
344
1,454
602
75,131
1,172
2024 movements
1,173
(51)
(825)
(71)
108
57
456
(65)
At 31 December 2024
62,575
175
11,450
273
1,562
659
75,587
1,107
Net carrying amount
62,400
11,177
903
74,480
\n
\u2022
Total ECL increased in the year primarily re\ufb02ecting a small number of individual defaults. Despite the growth in Stage 3 ECL, transfers into Stage 3 reduced compared to 2024, with a notable
\n
reduction in transfers seen in the second half of 2025.
\n
\u2022
Total performing book ECL was stable year-on-year, but with a small increase in Stage 2, re\ufb02ecting the net transfer of assets from Stage 1 into Stage 2.
\n\n
Flow statements (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - property
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
27,468
77
2,980
61
590
225
31,038
363
Currency translation and other
adjustments
8
-
-
-
9
-
17
-
Inter-group transfers
(175)
-
(7)
-
(1)
-
(183)
-
Transfers from Stage 1 to Stage 2
(2,569)
(8)
2,569
8
-
-
-
-
Transfers from Stage 2 to Stage 1
2,021
23
(2,021)
(23)
-
-
-
-
Transfers to Stage 3
(6)
-
(143)
(8)
149
8
-
-
Transfers from Stage 3
45
4
28
5
(73)
(9)
-
-
Net re-measurement of ECL on stage
transfer
(22)
31
13
22
Changes in risk parameters
(28)
(8)
18
(18)
Other changes in net exposure
3,692
15
(313)
(10)
(199)
(21)
3,180
(16)
Other (P&L only items)
-
-
-
-
Income statement (releases)/charges
(35)
13
10
(12)
Amounts written-off
-
-
-
-
(33)
(33)
(33)
(33)
Unwinding of discount
-
-
(8)
(8)
At 31 December 2025
30,484
61
3,093
56
442
193
34,019
310
Net carrying amount
30,423
3,037
249
33,709
At 1 January 2024
26,040
94
3,155
89
606
195
29,801
378
2024 movements
1,428
(17)
(175)
(28)
(16)
30
1,237
(15)
At 31 December 2024
27,468
77
2,980
61
590
225
31,038
363
Net carrying amount
27,391
2,919
365
30,675
\n
\u2022
Total ECL for property exposures reduced notably in the year, with reductions observed in all stages.
\n
\u2022
In Stage 3, both total \ufb01nancial assets and ECL reduced as there were low levels of default in the year, which were more than offset by the effects of repayments and write-offs.
\n
\u2022
Performing book ECL reduced in the year driven by changes in risk parameters, which included the impact of reductions in post model adjustments.
Flow statements (audited)
\u00a0
Stage 1
Stage 2
Stage 3
Total
\u00a0
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Financial assets
ECL
Commercial & Institutional - other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
93,724
37
1,739
12
123
57
95,586
106
Currency translation and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
adjustments
(377)
-
(3)
-
-
14
(380)
14
Inter-group transfers
18
-
(1)
-
-
-
17
-
Transfers from Stage 1 to Stage 2
(960)
(3)
960
3
-
-
-
-
Transfers from Stage 2 to Stage 1
1,714
11
(1,714)
(11)
-
-
-
-
Transfers to Stage 3
(82)
-
(29)
(1)
111
1
-
-
Transfers from Stage 3
8
-
9
-
(17)
-
-
-
Net re-measurement of ECL on stage
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
transfer
\u00a0
(8)
\u00a0
7
\u00a0
44
\u00a0
43
Changes in risk parameters
\u00a0
(11)
\u00a0
(2)
\u00a0
19
\u00a0
6
Other changes in net exposure
3,828
10
(317)
1
(17)
5
3,494
16
Other (P&L only items)
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
Income statement (releases)/charges
\u00a0
(9)
\u00a0
6
\u00a0
65
\u00a0
62
Amounts written-off
-
-
-
-
(6)
(6)
(6)
(6)
Unwinding of discount
\u00a0
-
\u00a0
-
\u00a0
(3)
\u00a0
(3)
At 31 December 2025
97,873
36
644
9
194
128
98,711
173
Net carrying amount
97,837
\u00a0
635
\u00a0
66
\u00a0
98,538
\u00a0
At 1 January 2024
88,860
36
1,599
14
101
22
90,560
72
2024 movements
4,864
1
140
(2)
22
35
5,026
34
At 31 December 2024
93,724
37
1,739
12
123
57
95,586
106
Net carrying amount
93,687
\u00a0
1,727
\u00a0
66
\u00a0
95,480
\u00a0
\n
\u2022
The increase in Stage 3 \ufb01nancial assets and ECL primarily re\ufb02ected the impact of a single large \ufb02ow to default in the year.
\u2022
Performing book ECL was marginally lower at 31 December 2025, with the Stage 2 ECL reduction re\ufb02ective of exposure \ufb02owing back into Stage 1.Asset quality (audited)
The table below shows asset quality bands of gross loans and ECL, by stage, for the Personal portfolio.
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,087
6,432
-
120,519
19
9
-
28
-
0.1
-
-
AQ5-AQ8
83,712
8,584
-
92,296
26
21
-
47
-
0.2
-
0.1
AQ9
140
935
-
1,075
-
6
-
6
-
0.6
-
0.6
AQ10
-
-
1,339
1,339
-
-
191
191
-
-
14.3
14.3
\u00a0
197,939
15,951
1,339
215,229
45
36
191
272
-
0.2
14.3
0.1
Credit cards
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
117
-
-
117
1
-
-
1
0.9
-
-
0.9
AQ5-AQ8
5,850
1,967
-
7,817
123
181
-
304
2.1
9.2
-
3.9
AQ9
21
114
-
135
1
24
-
25
4.8
21.1
-
18.5
AQ10
-
-
242
242
-
-
190
190
-
-
78.5
78.5
\u00a0
5,988
2,081
242
8,311
125
205
190
520
2.1
9.9
78.5
6.3
Other personal
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
765
112
-
877
5
12
-
17
0.7
10.7
-
1.9
AQ5-AQ8
8,148
1,212
-
9,360
161
137
-
298
2.0
11.3
-
3.2
AQ9
64
144
-
208
6
36
-
42
9.4
25.0
-
20.2
AQ10
-
-
956
956
-
-
731
731
-
-
76.5
76.5
\u00a0
8,977
1,468
956
11,401
172
185
731
1,088
1.9
12.6
76.5
9.5
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
114,969
6,544
-
121,513
25
21
-
46
-
0.3
-
-
AQ5-AQ8
97,710
11,763
-
109,473
310
339
-
649
0.3
2.9
-
0.6
AQ9
225
1,193
-
1,418
7
66
-
73
3.1
5.5
-
5.2
AQ10
-
-
2,537
2,537
-
-
1,112
1,112
-
-
43.8
43.8
\u00a0
212,904
19,500
2,537
234,941
342
426
1,112
1,880
0.2
2.2
43.8
0.8
\n\n
Asset quality (audited)
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Mortgages
AQ1-AQ4
104,793
8,416
-
113,209
29
16
-
45
-
0.2
-
-
AQ5-AQ8
81,263
11,683
-
92,946
48
38
-
86
0.1
0.3
-
0.1
AQ9
194
962
-
1,156
-
6
-
6
-
0.6
-
0.5
AQ10
-
-
2,535
2,535
-
-
325
325
-
-
12.8
12.8
186,250
21,061
2,535
209,846
77
60
325
462
-
0.3
12.8
0.2
Credit cards
AQ1-AQ4
128
-
-
128
1
-
-
1
0.8
-
-
0.8
AQ5-AQ8
4,650
1,866
-
6,516
75
169
-
244
1.6
9.1
-
3.7
AQ9
23
87
-
110
1
17
-
18
4.4
19.5
-
16.4
AQ10
-
-
176
176
-
-
118
118
-
-
67.1
67.1
4,801
1,953
176
6,930
77
186
118
381
1.6
9.5
67.1
5.5
Other personal
AQ1-AQ4
691
127
-
818
6
14
-
20
0.9
11.0
-
2.4
AQ5-AQ8
6,521
1,359
-
7,880
120
134
-
254
1.8
9.9
-
3.2
AQ9
55
136
-
191
4
35
-
39
7.3
25.7
-
20.4
AQ10
-
-
860
860
-
-
656
656
-
-
76.3
76.3
7,267
1,622
860
9,749
130
183
656
969
1.8
11.3
76.3
9.9
Total
AQ1-AQ4
105,612
8,543
-
114,155
36
30
-
66
-
0.4
-
0.1
AQ5-AQ8
92,434
14,908
-
107,342
243
341
-
584
0.3
2.3
-
0.5
AQ9
272
1,185
-
1,457
5
58
-
63
1.8
4.9
-
4.3
AQ10
-
-
3,571
3,571
-
-
1,099
1,099
-
-
30.8
30.8
198,318
24,636
3,571
226,525
284
429
1,099
1,812
0.1
1.7
30.8
0.8
\n
\u2022
The distribution of lending across the AQ1-AQ9 bands remained broadly consistent with the prior year. Growth in the mortgage portfolio was mainly in the AQ1-AQ4 bands as expected.
\n
\u2022
The proportion of Stage 3/AQ10 loans declined over the year, mainly as a result of the balance sheet management actions described above, notably the mortgage securitisation which reduced
\n
Stage 3 loans by \u00a30.8 billion. Furthermore, there was an enhancement to the mortgage de\ufb01nition of default systems and process resulting in approximately \u00a30.4 billion of loans migrating from
\n
Stage 3 back to the good book. Within the credit card portfolio, \ufb02ows into Stage 3 increased year-on-year, driven by strategic growth and seasoning of credit card balances since 2022. For other
\n
personal lending, \ufb02ow rates into AQ10/Stage 3 remained stable, with AQ10 balances increasing as a result of reduced debt sale activity overall in the year.
\n\n
Asset quality (audited)
\n
The table below shows asset quality bands of gross loans and ECL, by stage, for the Non-Personal portfolio.
\n\n \n
Gross loans
ECL provisions
ECL provisions coverage
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
AQ1-AQ4
43,968
2,314
-
46,282
29
15
-
44
0.1
0.7
-
0.1
AQ5-AQ8
53,783
15,882
-
69,665
199
326
-
525
0.4
2.1
-
0.8
AQ9
28
264
-
292
-
19
-
19
-
7.2
-
6.5
AQ10
-
-
1,990
1,990
-
-
944
944
-
-
47.4
47.4
97,779
18,460
1,990
118,229
228
360
944
1,532
0.2
2.0
47.4
1.3
Financial institutions
AQ1-AQ4
68,620
154
-
68,774
20
2
-
22
-
1.3
-
-
AQ5-AQ8
5,339
196
-
5,535
17
3
-
20
0.3
1.5
-
0.4
AQ9
-
6
-
6
-
-
-
-
-
-
-
-
AQ10
-
-
141
141
-
-
113
113
-
-
80.1
80.1
73,959
356
141
74,456
37
5
113
155
0.1
1.4
80.1
0.2
Sovereign
AQ1-AQ4
1,878
1
-
1,879
7
1
-
8
0.4
100.0
-
0.4
AQ5-AQ8
131
-
-
131
-
-
-
-
-
-
-
-
AQ9
-
265
-
265
-
4
-
4
-
1.5
-
1.5
AQ10
-
-
15
15
-
-
6
6
-
-
40.0
40.0
2,009
266
15
2,290
7
5
6
18
0.4
1.9
40.0
0.8
Total
AQ1-AQ4
114,466
2,469
-
116,935
56
18
-
74
0.1
0.7
-
0.1
AQ5-AQ8
59,253
16,078
-
75,331
216
329
-
545
0.4
2.1
-
0.7
AQ9
28
535
-
563
-
23
-
23
-
4.3
-
4.1
AQ10
-
-
2,146
2,146
-
-
1,063
1,063
-
-
49.5
49.5
173,747
19,082
2,146
194,975
272
370
1,063
1,705
0.2
1.9
49.5
0.9
Asset quality (audited)
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Gross loans
ECL provisions
ECL provisions coverage
\u00a0
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
%
%
%
%
Corporate and other
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
41,509
2,409
-
43,918
32
19
-
51
0.1
0.8
-
0.1
AQ5-AQ8
53,448
11,783
-
65,231
232
306
-
538
0.4
2.6
-
0.8
AQ9
34
272
-
306
-
19
-
19
-
7.0
-
6.2
AQ10
-
-
2,279
2,279
-
-
896
896
-
-
39.3
39.3
\u00a0
94,991
14,464
2,279
111,734
264
344
896
1,504
0.3
2.4
39.3
1.4
Financial institutions
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
64,845
233
-
65,078
21
2
-
23
-
0.9
-
-
AQ5-AQ8
4,176
996
-
5,172
17
9
-
26
0.4
0.9
-
0.5
AQ9
-
12
-
12
-
1
-
1
-
8.3
-
8.3
AQ10
-
-
59
59
-
-
40
40
-
-
67.8
67.8
\u00a0
69,021
1,241
59
70,321
38
12
40
90
0.1
1.0
67.8
0.1
Sovereign
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
1,364
1
-
1,365
12
1
-
13
0.9
100.0
-
1.0
AQ5-AQ8
127
-
-
127
-
-
-
-
-
-
-
-
AQ9
-
132
-
132
-
1
-
1
-
0.8
-
0.8
AQ10
-
-
21
21
-
-
5
5
-
-
23.8
23.8
\u00a0
1,491
133
21
1,645
12
2
5
19
0.8
1.5
23.8
1.2
Total
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
107,718
2,643
-
110,361
65
22
-
87
0.1
0.8
-
0.1
AQ5-AQ8
57,751
12,779
-
70,530
249
315
-
564
0.4
2.5
-
0.8
AQ9
34
416
-
450
-
21
-
21
-
5.1
-
4.7
AQ10
-
-
2,359
2,359
-
-
941
941
-
-
39.9
39.9
\u00a0
165,503
15,838
2,359
183,700
314
358
941
1,613
0.2
2.3
39.9
0.9
\n
\u2022
The majority of Non-Personal lending remained in the AQ1-AQ4 band, with the increase in the year driven by increases in \ufb01nancial institutions sectors. This portfolio is subject to low ECL coverage,
re\ufb02ecting the high credit quality in the portfolio.
\u2022
In corporate sectors, Stage 2 exposure grew in the year, primarily in the AQ5-AQ8 band, which accounted for the majority of exposure to corporates. AQ10 exposures in Stage 3 reduced in
corporates, as new defaults were more than offset by write-offs and repayments on previous defaults.
\u2022
The increase in sovereigns exposure in AQ9 and Stage 2 was primarily due to increased exposure to a single counterparty where the lending is fully guaranteed.
Credit risk - Trading activities
This section details the credit risk pro\ufb01le of NatWest Group\u2019s trading activities.
Securities \ufb01nancing transactions and collateral (audited)
The table below shows securities \ufb01nancing transactions in Commercial & Institutional and Central items & other. Balance sheet captions include balances held at all classi\ufb01cations under IFRS.
\u00a0 \n \n
Reverse repos
Repos
Of which:
Outside netting
Of which:
Outside netting
Total
can be offset
arrangements
Total
can be offset
arrangements
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Gross
95,674
95,618
56
89,789
87,730
2,059
IFRS offset
(31,599)
(31,599)
-
(31,599)
(31,599)
-
Carrying value
64,075
64,019
56
58,190
56,131
2,059
Master netting arrangements
(474)
(474)
-
(474)
(474)
-
Securities collateral
(63,292)
(63,292)
-
(55,657)
(55,657)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(56,131)
(56,131)
-
Net
309
253
56
2,059
-
2,059
2024
Gross
87,901
87,861
40
68,024
67,321
703
IFRS offset
(23,883)
(23,883)
-
(23,883)
(23,883)
-
Carrying value
64,018
63,978
40
44,141
43,438
703
Master netting arrangements
(1,549)
(1,549)
-
(1,549)
(1,549)
-
Securities collateral
(62,217)
(62,217)
-
(41,889)
(41,889)
-
Potential for offset not recognised under IFRS
(63,766)
(63,766)
-
(43,438)
(43,438)
-
Net
252
212
40
703
-
703
Derivatives (audited)
The table below shows derivatives by type of contract. The master netting agreements and collateral shown do not result in a net presentation on the balance sheet under IFRS. A signi\ufb01cant
proportion of the derivatives relate to trading activities in Commercial & Institutional. The table also includes hedging derivatives in Central items & other.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Notional
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
GBP
USD
EUR
Other
Total
Assets
Liabilities
Notional
Assets
Liabilities
\u00a0
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3m
\u00a3m
\u00a3bn
\u00a3m
\u00a3m
Gross exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
77,796
71,925
\u00a0
97,152
93,109
IFRS offset
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(17,007)
(17,951)
\u00a0
(18,746)
(21,027)
Carrying value
3,460
3,573
6,328
1,158
14,519
60,789
53,974
13,628
78,406
72,082
Of which:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate
(1)
3,125
2,072
5,699
192
11,088
32,742
26,758
10,333
37,499
31,532
Exchange rate
331
1,495
622
966
3,414
27,981
27,042
3,279
40,797
40,306
Credit
2
6
7
-
15
66
174
14
110
244
Equity and commodity
2
-
-
-
2
-
-
2
-
-
Carrying value
\u00a0 \u00a0 \u00a0 \u00a0
14,519
60,789
53,974
13,628
78,406
72,082
Counterparty mark-to-market
netting
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(45,928)
(45,928)
\u00a0
(61,883)
(61,883)
Cash collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(9,275)
(4,281)
\u00a0
(10,005)
(5,801)
Securities collateral
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
(3,283)
(1,256)
\u00a0
(4,072)
(896)
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Banks
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
89
217
\u00a0
214
345
Other financial institutions
(3)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,508
1,160
\u00a0
1,429
1,456
Corporate
(4)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
673
1,110
\u00a0
769
1,669
Government
(5)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
33
22
\u00a0
34
32
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
UK
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,098
1,548
\u00a0
1,061
1,774
Europe
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
693
589
\u00a0
875
978
US
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
437
283
\u00a0
443
604
RoW
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
75
89
\u00a0
67
146
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
2,509
\u00a0
2,446
3,502
Asset quality of uncollateralised
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
derivative assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AQ1-AQ4
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
1,865
\u00a0 \u00a0
2,049
\u00a0
AQ5-AQ8
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
435
\u00a0 \u00a0
394
\u00a0
AQ9-AQ10
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
3
\u00a0 \u00a0
3
\u00a0
Net exposure
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
2,303
\u00a0 \u00a0
2,446
\u00a0
\n
(1)
The notional amount of interest rate derivatives includes \u00a38,768 billion
(2024 \u2013 \u00a37,321 billion) in respect of contracts cleared through central
clearing counterparties.
(2)
Transactions with certain counterparties with whom NatWest Group has
netting arrangements but collateral is not posted on a daily basis; certain
transactions with speci\ufb01c terms that may not fall within netting and
collateral arrangements; derivative positions in certain jurisdictions where
the collateral agreements are not deemed to be legally enforceable.
(3)
Includes transactions with securitisation vehicles and funds where
collateral posting is contingent on NatWest Group\u2019s external rating.
(4)
Mainly large corporates with whom NatWest Group may have netting
arrangements in place with no collateral posting.
(5)
Sovereigns and supranational entities with no collateral arrangements,
collateral arrangements that are not considered enforceable, or one-way
collateral agreements in their favour.
Debt securities (audited)
The table below shows debt securities held at mandatory fair value through pro\ufb01t or loss by issuer as well as ratings based on the lowest of Standard & Poor\u2019s, Moody\u2019s and Fitch.
\u00a0
Central and local government
\u00a0 \u00a0 \u00a0
\u00a0
UK
US
Other
Financial institutions
Corporate
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
AAA
-
-
1,505
1,283
-
2,788
AA to AA+
-
4,153
257
309
18
4,737
A to AA-
2,105
-
1,481
596
215
4,397
BBB- to A-
-
-
892
256
384
1,532
Non-investment grade
-
-
-
11
50
61
Total
2,105
4,153
4,135
2,455
667
13,515
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
AAA
-
-
1,335
1,368
-
2,703
AA to AA+
-
3,734
74
569
2
4,379
A to AA-
2,077
-
1,266
381
519
4,243
BBB- to A-
-
-
831
562
885
2,278
Non-investment grade
-
-
-
108
167
275
Total
2,077
3,734
3,506
2,988
1,573
13,878
2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.14 Loan impairment provisions
There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, for which we hold expected credit losses (ECL). The calculation of ECL
\n
considers historical, current, and forward-looking information to determine the amount we do not expect to recover. It considers losses on both defaulted exposures and performing exposures
\n
that may default in future. ECL is recognised on drawn exposures, loans commitments, and contingent liabilities.
\n
For accounting policy information refer to Accounting policy 2.3. Further disclosures on credit risk and information on ECL methodology are shown from page 187.
\n
Loan exposure and impairment metrics
\n
The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit loss framework.
2025
2024
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
386,651
363,821
Stage 2
38,582
40,474
Stage 3
4,683
5,930
Of which: individual
1,456
1,285
Of which: collective
3,227
4,645
429,916
410,225
ECL provisions
(3)
- Stage 1
614
598
- Stage 2
796
787
- Stage 3
2,175
2,040
Of which: individual
598
451
Of which: collective
1,577
1,589
3,585
3,425
ECL provision coverage
(4)
- Stage 1 (%)
0.16
0.16
- Stage 2 (%)
2.06
1.94
- Stage 3 (%)
46.44
34.40
0.83
0.83
Continuing operations
Impairment (releases)/losses
ECL charge
(5)
671
359
Stage 1
(204)
(438)
Stage 2
421
360
Stage 3
454
437
Of which: individual
188
192
Of which: collective
266
245
Amounts written off
579
654
Of which: individual
137
144
Of which: collective
442
510
\n
(1)
The table shows gross loans only and excludes amounts that are outside the
\n
scope of the ECL framework. Refer to Financial instruments within the scope of
\n
the IFRS 9 ECL framework for further details. Other financial assets within the
\n
scope of the IFRS 9 ECL framework were cash and balances at central banks
\n
totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 - \u00a34 million) related to assets classified as FVOCI and
\n
\u00a30.1 billion (2024 - \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions divided by loans \u2013
\n
amortised cost and FVOCI. It is calculated on loans and total ECL provisions,
\n
including ECL for other (non-loan) assets and unutilised exposure. Some
\n
segments with a high proportion of debt securities or unutilised exposure may
\n
result in a not meaningful coverage ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial
\n
assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets
\n
classified as FVOCI; and \u00a33 million charge (2024 - \u00a35 million release) related to
\n
contingent liabilities.
Credit risk enhancement and mitigation
For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management \u2013 Credit risk enhancement and mitigation section.
Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00662": { "value": "Capital, liquidity and funding riskDe\ufb01nitions (audited)
Regulatory capital consists of reserves and
instruments issued that are available, have a
degree of permanency and are capable of
absorbing losses. A number of strict
conditions set by regulators must be satis\ufb01ed
to be eligible as capital.
Capital risk is the inability to conduct business
in base or stress conditions on a risk or
leverage basis due to insuf\ufb01cient qualifying
capital as well as the failure to assess,
monitor, plan and manage capital adequacy
requirements.
Liquidity consists of assets that can be readily
converted to cash within a short timeframe at
a reliable value. Liquidity risk is de\ufb01ned as the
risk that the Group or any of its subsidiaries
or branches cannot meet it\u2019s actual or
potential \ufb01nancial obligations in a timely
manner as they fall due in the short term.
Funding consists of on-balance sheet liabilities
that are used to provide cash to \ufb01nance
assets. Funding risk is the current or
prospective risk that the Group or its
subsidiaries or branches cannot meet
\ufb01nancial obligations as they fall due in the
medium to long term, either at all or without
increasing funding costs unacceptably.
Liquidity and funding risks arise in a number
of ways, including through the maturity
transformation role that banks perform. The
risks are dependent on factors such as:
\u2022
Maturity pro\ufb01le;
\u2022
Composition of sources and uses of
funding;
\u2022
The quality and size of the liquidity
portfolio;
\u2022
Wholesale market conditions; and
\u2022
Depositor and investor behaviour.
Sources of risk (audited)
Capital
The eligibility of instruments and \ufb01nancial
resources as regulatory capital is laid down
by applicable regulation. Capital is
categorised under two tiers (Tier 1 and Tier
2) according to the ability to absorb losses,
degree of permanency and the ranking of
absorbing losses on either a going or gone
concern basis. There are three broad
categories of capital across these two tiers:
CET1 capital
-
CET1 capital must be
perpetual and capable of unrestricted and
immediate use to cover risks or losses as
soon as these occur. This includes ordinary
shares issued and retained earnings.
Additional Tier 1 (AT1) capital -
This is the
second type of loss-absorbing capital and
must be capable of absorbing losses on a
going concern basis. These instruments are
either written down or converted into CET1
capital when the CET1 ratio falls below a pre-
speci\ufb01ed level.
Tier 2 capital -
Tier 2 capital is the bank
entities' supplementary capital and provides
loss absorption on a gone concern basis.
Tier
2 capital absorbs losses after Tier 1 capital.
It typically consists of subordinated debt
securities which must have a minimum of \ufb01ve
years to maturity at all times to be fully
recognised for regulatory purposes. Funding sources (audited)
The table below shows the carrying values of the principal funding sources based on contractual maturity. Balance sheet captions include balances held at all classi\ufb01cations under IFRS 9.
\u00a0
2025
2024
\u00a0
Short-term less
Long-term more
\u00a0
Short-term less
Long-term more
\u00a0
\u00a0
than 1 year
than 1 year
Total
than 1 year
than 1 year
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
22,371
5,445
27,816
11,967
-
11,967
Other bank deposits
(1)
6,094
10,182
16,276
9,708
9,777
19,485
\u00a0
28,465
15,627
44,092
21,675
9,777
31,452
Customer Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
753
1,043
1,796
1,363
-
1,363
Non-bank financial institutions
53,559
4
53,563
48,761
241
49,002
Personal
232,815
7,757
240,572
231,483
2,451
233,934
Corporate
147,022
45
147,067
149,086
105
149,191
\u00a0
434,149
8,849
442,998
430,693
2,797
433,490
Trading liabilities
(2)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
(3)
26,168
2,410
28,578
29,752
810
30,562
Derivatives collateral
11,966
-
11,966
12,509
-
12,509
Other bank and customer deposits
454
286
740
627
268
895
Debt securities in issue - Medium term notes
28
206
234
20
237
257
\u00a0
38,616
2,902
41,518
42,908
1,315
44,223
Other financial liabilities
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Customer deposits including repos
836
1,476
2,312
471
1,341
1,812
Debt securities in issue:
\u00a0\u00a0
-
\u00a0\u00a0\u00a0
Commercial paper and certificates of deposit
8,718
683
9,401
10,889
377
11,266
Medium term notes
11,475
41,999
53,474
11,118
34,967
46,085
Covered bonds
-
749
749
-
749
749
Securitisation
-
1,663
1,663
295
880
1,175
\u00a0
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Total funding
523,335
78,995
602,330
519,100
57,288
576,388
Of which: available in resolution
(4)
\u00a0\u00a0
30,049
\u00a0\u00a0
29,742
\n
(1)
Includes \u00a38.2 billion (2024 \u2013 \u00a312.0 billion) relating to Term Funding Scheme
with additional incentives for Small and Medium-sized Enterprises participation.
(2)
Excludes short positions of \u00a37.5 billion (2024 \u2013 \u00a310.5 billion).
(3)
Comprises central & other bank repos of \u00a38.2 billion (2024 \u2013 \u00a37.2 billion), other
financial institution repos of \u00a318.0 billion (2024 \u2013 \u00a320.4 billion) and other
corporate repos of \u00a32.4 billion (2024 \u2013 \u00a33.0 billion).
(4)
Eligible liabilities (as defined in the Banking Act 2009 as amended from time to
time) that meet the eligibility criteria set out in the regulations, rules, policies,
guidelines, or statements of the Bank of England including the Statement of
Policy published by the Bank of England in December 2021 (updating June
2018). The balance consists of \u00a324.3 billion (2024 \u2013 \u00a324.0 billion) under debt
securities in issue (senior MREL) and \u00a35.7 billion (2024 \u2013 \u00a35.7 billion) under
subordinated liabilities.
\n\n
Contractual maturity (audited)
\n
This table shows the residual maturity of \ufb01nancial instruments, based on contractual date of maturity of NatWest Group\u2019s banking activities, including hedging derivatives. Trading activities, comprising
\n
mandatory fair value through pro\ufb01t or loss (MFVTPL) assets and held-for-trading (HFT) liabilities have been excluded from the maturity analysis and are shown in total in the table below.
\n\n \n
Banking activities
Less than
6 months-
More than
Trading
1 months
1-3 months
3-6 months
1 year
Subtotal
1-3 years
3-5 years
5 years
Total
activities
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
85,182
-
-
-
85,182
-
-
-
85,182
-
85,182
Trading assets
-
-
-
-
-
-
-
-
-
46,537
46,537
Derivatives
(10)
95
34
29
148
65
322
-
535
60,254
60,789
Settlement balances
645
-
-
-
645
-
-
-
645
-
645
Loans to banks - amortised cost
4,854
748
411
109
6,122
696
-
140
6,958
-
6,958
Loans to customers -
amortised cost
(1)
43,857
19,126
17,086
23,561
103,630
66,657
49,262
202,841
422,390
-
422,390
Personal
7,795
2,222
3,331
6,496
19,844
24,503
21,533
168,637
234,517
-
234,517
Corporate
20,497
4,196
3,851
7,862
36,406
30,312
21,908
30,208
118,834
-
118,834
Non-bank financial institutions
15,565
12,708
9,904
9,203
47,380
11,842
5,821
3,996
69,039
-
69,039
Other financial assets
1,683
2,994
3,968
2,621
11,266
23,899
9,978
33,583
78,726
1,044
79,770
Total financial assets
136,211
22,963
21,499
26,320
206,993
91,317
59,562
236,564
594,436
107,835
702,271
2024
Total financial assets
146,069
22,925
18,701
31,177
218,872
76,479
56,413
215,575
567,339
128,007
695,346
\n
(1)
Loans to customers is gross and excludes \u00a33.5 billion (2024 - \u00a33.3 billion) of impairment provisions.
\n\n
Contractual maturity (audited)
\n\n \n
Banking activities
Less than
More than
Trading
1 months
1-3 months
3-6 months
6 months - 1 year
Subtotal
1-3 years
3-5 years
5 years
Total
activities
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank deposits excluding repos
4,447
342
845
460
6,094
6,556
568
3,058
16,276
-
16,276
Bank repos
20,926
881
-
564
22,371
3,616
1,829
-
27,816
-
27,816
Customer repos
587
16
-
150
753
1,043
-
-
1,796
-
1,796
Customer deposits excluding repos
380,523
20,637
17,331
14,905
433,396
7,785
13
8
441,202
-
441,202
Personal
205,094
5,698
9,628
12,395
232,815
7,750
7
-
240,572
-
240,572
Corporate
126,625
11,281
7,074
2,042
147,022
31
6
8
147,067
-
147,067
Non-bank financial institutions
48,804
3,658
629
468
53,559
4
-
-
53,563
-
53,563
Settlement balances
942
-
-
-
942
-
-
-
942
-
942
Trading liabilities
-
-
-
-
-
-
-
-
-
49,022
49,022
Derivatives
31
14
12
29
86
164
106
1
357
53,617
53,974
Other financial liabilities
3,745
3,702
7,783
5,799
21,029
22,923
16,418
7,229
67,599
-
67,599
CPs and CDs
1,500
1,718
2,497
3,003
8,718
683
-
-
9,401
-
9,401
Medium term notes
2,209
1,459
5,107
2,700
11,475
21,229
15,412
5,358
53,474
-
53,474
Covered bonds
-
-
-
-
-
-
749
-
749
-
749
Securitisations
-
-
-
-
-
3
-
1,660
1,663
-
1,663
Customer deposits including repos
36
525
179
96
836
1,008
257
211
2,312
-
2,312
Subordinated liabilities
-
57
20
999
1,076
1,892
2,780
375
6,123
-
6,123
Notes in circulation
3,164
-
-
-
3,164
-
-
-
3,164
-
3,164
Lease liabilities
4
19
21
41
85
158
62
230
535
-
535
Total financial liabilities
414,369
25,668
26,012
22,947
488,996
44,137
21,776
10,901
565,810
102,639
668,449
2024
Total financial liabilities
399,323
28,936
21,299
32,066
481,624
33,905
16,240
6,535
538,304
126,332
664,636
Senior notes and subordinated liabilities - residual maturity pro\ufb01le by instrument type (audited)
The table below shows NatWest Group\u2019s debt securities in issue and subordinated liabilities by residual maturity.
\u00a0
Trading
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
liabilities
Other financial liabilities
\u00a0
\u00a0 \u00a0
Debt securities in issue
\u00a0 \u00a0 \u00a0
\u00a0
Debt securities
Commercial
\u00a0
Covered
\u00a0
Subordinated
\u00a0
Total notes
\u00a0
in issue MTNs
paper and CDs
MTNs
bonds
Securitisation
liabilities
Total
in issue
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Less than 1 year
28
8,718
11,475
-
-
1,076
21,269
21,297
1-3 years
1
683
21,229
-
3
1,892
23,807
23,808
3-5 years
73
-
15,412
749
-
2,780
18,941
19,014
More than 5 years
132
-
5,358
-
1,660
375
7,393
7,525
Total
234
9,401
53,474
749
1,663
6,123
71,410
71,644
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Less than 1 year
20
10,889
11,118
-
295
1,051
23,353
23,373
1-3 years
35
377
18,426
-
7
1,523
20,333
20,368
3-5 years
42
-
12,409
749
-
2,623
15,781
15,823
More than 5 years
160
-
4,132
-
873
939
5,944
6,104
Total
257
11,266
46,085
749
1,175
6,136
65,411
65,668
\n
The table below shows the currency breakdown.
\u00a0
GBP
USD
EUR
Other
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Commercial paper and CDs
3,227
1,341
4,833
-
9,401
MTNs
4,914
22,061
23,536
3,197
53,708
Covered bonds
749
-
-
-
749
Securitisation
1,663
-
-
-
1,663
Subordinated liabilities
2,383
1,325
2,415
-
6,123
Total
12,936
24,727
30,784
3,197
71,644
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Total
14,541
23,797
24,325
3,005
65,668
Encumbrance (audited)
NatWest Group evaluates the extent to which assets can be \ufb01nanced in a secured form (encumbrance), but certain asset types lend themselves more readily to encumbrance. The typical
\n
characteristics that support encumbrance are an ability to pledge those assets to another counterparty or entity through operation of law without necessarily requiring prior noti\ufb01cation, homogeneity,
\n
predictable and measurable cash \ufb02ows, and a consistent and uniform underwriting and collection process. Retail assets including residential mortgages, credit card receivables and personal loans
\n
display many of these features.
\n
NatWest Group categorises its assets into four broad groups, those that are:
\n
\u2022
Already encumbered and used to support funding currently in place through own-asset securitisations, covered bonds and securities repurchase agreements.
\n
\u2022
Pre-positioned with central banks as part of funding schemes and those encumbered under such schemes.
\n
\u2022
Ring-fenced to meet regulatory requirements, where NatWest Group has in place an operational continuity in resolution (OCIR) investment mandate wherein the PRA requires critical service
\n
providers to hold segregated liquidity buffers covering at least 50% of their annual \ufb01xed overheads.
\n
\u2022
Unencumbered. In this category, NatWest Group has in place an enablement programme which seeks to identify assets capable of being encumbered and to identify the actions to facilitate such
\n
encumbrance whilst not affecting customer relationships or servicing. Programmes to manage the use of assets to actively support funding are established within UK DoLSub and NatWest Markets
\nPlc.", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00277": { "value": "Funding sources (audited)
The table below shows the carrying values of the principal funding sources based on contractual maturity. Balance sheet captions include balances held at all classi\ufb01cations under IFRS 9.
\u00a0
2025
2024
\u00a0
Short-term less
Long-term more
\u00a0
Short-term less
Long-term more
\u00a0
\u00a0
than 1 year
than 1 year
Total
than 1 year
than 1 year
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
22,371
5,445
27,816
11,967
-
11,967
Other bank deposits
(1)
6,094
10,182
16,276
9,708
9,777
19,485
\u00a0
28,465
15,627
44,092
21,675
9,777
31,452
Customer Deposits
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
753
1,043
1,796
1,363
-
1,363
Non-bank financial institutions
53,559
4
53,563
48,761
241
49,002
Personal
232,815
7,757
240,572
231,483
2,451
233,934
Corporate
147,022
45
147,067
149,086
105
149,191
\u00a0
434,149
8,849
442,998
430,693
2,797
433,490
Trading liabilities
(2)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Repos
(3)
26,168
2,410
28,578
29,752
810
30,562
Derivatives collateral
11,966
-
11,966
12,509
-
12,509
Other bank and customer deposits
454
286
740
627
268
895
Debt securities in issue - Medium term notes
28
206
234
20
237
257
\u00a0
38,616
2,902
41,518
42,908
1,315
44,223
Other financial liabilities
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Customer deposits including repos
836
1,476
2,312
471
1,341
1,812
Debt securities in issue:
\u00a0\u00a0
-
\u00a0\u00a0\u00a0
Commercial paper and certificates of deposit
8,718
683
9,401
10,889
377
11,266
Medium term notes
11,475
41,999
53,474
11,118
34,967
46,085
Covered bonds
-
749
749
-
749
749
Securitisation
-
1,663
1,663
295
880
1,175
\u00a0
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Total funding
523,335
78,995
602,330
519,100
57,288
576,388
Of which: available in resolution
(4)
\u00a0\u00a0
30,049
\u00a0\u00a0
29,742
\n
(1)
Includes \u00a38.2 billion (2024 \u2013 \u00a312.0 billion) relating to Term Funding Scheme
with additional incentives for Small and Medium-sized Enterprises participation.
(2)
Excludes short positions of \u00a37.5 billion (2024 \u2013 \u00a310.5 billion).
(3)
Comprises central & other bank repos of \u00a38.2 billion (2024 \u2013 \u00a37.2 billion), other
financial institution repos of \u00a318.0 billion (2024 \u2013 \u00a320.4 billion) and other
corporate repos of \u00a32.4 billion (2024 \u2013 \u00a33.0 billion).
(4)
Eligible liabilities (as defined in the Banking Act 2009 as amended from time to
time) that meet the eligibility criteria set out in the regulations, rules, policies,
guidelines, or statements of the Bank of England including the Statement of
Policy published by the Bank of England in December 2021 (updating June
2018). The balance consists of \u00a324.3 billion (2024 \u2013 \u00a324.0 billion) under debt
securities in issue (senior MREL) and \u00a35.7 billion (2024 \u2013 \u00a35.7 billion) under
subordinated liabilities.3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 23 Asset transfers and collateral received
This note provides an overview of assets that have been transferred but where the NatWest Group retains substantially all the risks and rewards of the transferred assets and therefore
continues to recognize them on balance sheet. This note also provides an overview of collateral received by NatWest Group, which the Group is permitted to sell or re-pledge.
Transfers that do not qualify for derecognition
NatWest Group enters into securities repurchase, lending and total return transactions in
accordance with normal market practice which includes the provision of additional collateral if
necessary. Under standard terms in the UK and US markets, the recipient has an unrestricted
right to sell or repledge collateral, subject to returning equivalent securities on settlement of the
transaction.
Securities sold under repurchase transactions and transactions with the substance of securities
repurchase agreements are not derecognised if NatWest Group retains substantially all the risks
and rewards of ownership. The fair value (and carrying value) of securities transferred under such
transactions included on the balance sheet are set out below. All of these securities could be sold
or repledged by the holder.
2025
2024
The following assets have failed derecognition
(1)
\u00a3m
\u00a3m
Trading assets
8,210
7,708
Loans to bank - amortised cost
29
70
Loans to customers - amortised cost
110
45
Other financial assets
19,854
13,174
Total
28,203
20,997
(1)
Associated liabilities were \u00a327,478 million (2024 \u2013 \u00a320,394 million).
Assets pledged as collateral
NatWest Group pledges collateral with its counterparties in respect of derivative liabilities, bank
and stock borrowings and other transactions. Under standard arrangements the counterparty
has the right to sell or repledge the collateral. Where the NatWest Group retains exposure to the
signi\ufb01cant risks and rewards of the transferred collateral it is not derecognised from the NatWest
Group balance sheet and continues to be disclosed within either Trading Assets, Loans to
Customers or Other Financial Assets.
2025
2024
Assets pledged against liabilities
\u00a3m
\u00a3m
Trading assets
7,894
10,288
Loans to customers - amortised cost
16,052
19,030
Other financial assets
(1)
5,648
4,451
Total
29,594
33,769
(1)
Includes assets pledged for pension derivatives and \u00a3524 million of debt securities under the continuing control of NWB Plc. This follows the
agreement between NWB Plc and the Group Pension Fund to establish a bankruptcy remote reservoir trust to hold these assets. Refer to Note
5 for additional information.
As part of the covered debt programme \u00a38,278 million of loans to customers and other debt
instruments (2024 \u2013 \u00a39,668 million) have been transferred to bankruptcy remote limited liability
partnerships within the NatWest Group to provide collateral for issuances of debt securities and
other borrowings by the NatWest Group of \u00a32,935 million (2024 \u2013 \u00a32,305 million). Refer to Note
22.
Collateral received
The fair value of assets accepted as collateral relating primarily to standard securities lending,
reverse repurchase agreements, swaps of securities and derivatives margining that NatWest
Group is permitted to sell or repledge in the absence of default was \u00a3113,866 million (2024:
\u00a3110,151 million).The fair value of any such collateral sold or repledged was \u00a370,284 million
(2024: \u00a361,530 million).
NatWest Group is obliged to return equivalent securities. These transactions are conducted under
terms that are usual and customary to standard securities lending, reverse repurchase
agreements, swaps of securities and derivative margining.", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00660": { "value": "Non-traded market risk
De\ufb01nition (audited)
Non-traded market risk is the risk to the
value of assets or liabilities outside the trading
book, or the risk to income, that arises from
changes in market prices such as interest
rates, foreign exchange rates and equity
prices, or from changes in managed rates.
Sources of risk (audited)
Non-traded market risk exists in all balance-
sheet exposure that makes reference to
market risk factors, when customer
behaviour could impact the size and timing of
the repricing or maturity of future cash \ufb02ows,
or when valuation of assets and liabilities is
driven by market risk factors such as interest
rates or foreign exchange rates.
The key sources of non-traded market risk
are interest rate risk, credit spread risk,
foreign exchange risk, equity risk and
accounting volatility risk. Qualitative and
quantitative information on these risk types is
provided following the VaR table below.Governance (audited)
Risk governance for non-traded market risk is
in line with the approach outlined in the Risk
management framework section.Equity risk (audited)
Non-traded equity risk is the potential variation in income and reserves arising from changes in equity
valuations. Equity positions are carried on the balance sheet at fair value based on market prices where
available. Equity positions may take the form of shares that are publicly listed on a recognised exchange,
privately owned investments and shareholdings in industry participations including SWIFT. Further
disclosure of NatWest Group\u2019s investments in equity shareholdings, fair value gains and losses and
valuation techniques may be found in the notes to the consolidated \ufb01nancial statements. Investments,
acquisitions or disposals of a strategic nature are referred to the Acquisitions & Disposals Committee.
Once approved by the Chief Financial Of\ufb01cer with support from the Acquisitions & Disposals Committee
for execution, such transactions are referred for approval to the Board, the Executive Committee, the
Chief Executive Of\ufb01cer, the Chief Financial Of\ufb01cer or as otherwise required. Decisions to acquire or hold
equity positions in the non-trading book that are not of a strategic nature are taken by authorised
persons with delegated authority. Non-traded equity value at risk is monitored monthly and capital
allocation to the risk is included in NatWest Group\u2019s annual Internal Capital Adequacy Assessment Process
(ICAAP). Traded market risk
De\ufb01nition (audited)
Traded market risk is the risk of losses in
trading book positions from \ufb02uctuations in
market variables, such as interest rates, credit
spreads, foreign exchange rates, equity prices,
implied volatilities and asset correlations.
Sources of risk (audited)
NatWest Group is exposed to traded market
risk through trading activities entered into by
NatWest Markets where such risk arises from
market-making and underwriting activity and
by facilitating customer-facing business that
cannot be immediately offset with other
customers or market participants.
From a market risk perspective, activities are
focused on rates; currencies; and traded
credit. NatWest Markets undertakes
transactions in \ufb01nancial instruments including
debt securities, as well as securities \ufb01nancing
and derivatives.
The key categories of traded market risk are
interest rate risk, credit spread risk and
foreign currency price risk.
Trading activities may also give rise to
counterparty credit risk. For further detail
refer to the Credit risk section. Governance (audited)
Risk governance for traded market risk is in
line with the approach outlined in the Risk
management framework section. Traded VaR (1-day 99%) (audited)
The table below shows one-day 99% internal VaR for NatWest Group\u2019s trading portfolios, split by exposure type.
2025
2024
Average
Maximum
Minimum
Period end
Average
Maximum
Minimum
Period end
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Interest rate
3.2
5.4
1.8
2.3
6.6
12.1
3.0
3.8
Credit spread
4.8
7.2
3.1
3.1
7.7
10.1
5.6
5.6
Currency
1.3
4.0
-
0.5
2.0
6.7
0.5
1.3
Equity
0.1
0.1
-
0.1
0.1
0.3
-
-
Diversification
(1)
(3.8)
(2.5)
(6.3)
(5.4)
Total
5.6
9.7
3.4
3.5
10.1
16.2
5.3
5.3
\n
(1)
NatWest Group benefits from diversification across various financial instrument
\n
types, currencies and markets. The extent of the diversification benefit
\n
depends on the correlation between the assets and risk factors in the portfolio
\n
at a particular time. The diversification factor is the sum of the VaR on
\n
individual risk types less the total portfolio VaR.
\n
\u2022
Both interest rate VaR and credit spread VaR decreased on an average basis, compared to 2024.
\n
\u2022
This re\ufb02ects an earlier period of higher market volatility dropping out of the rolling window for VaR calculation during H2 2024.", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "ConsolidatedIncomeStatement_Label_001": { "value": "25698000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestRevenueCalculatedUsingEffectiveInterestMethod", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_002": { "value": "25187000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestRevenueCalculatedUsingEffectiveInterestMethod", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_003": { "value": "21026000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestRevenueCalculatedUsingEffectiveInterestMethod", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_NegatedLabel_006": { "value": "12869000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_NegatedLabel_005": { "value": "13912000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_NegatedLabel_004": { "value": "9977000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0014": { "value": "12829000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestRevenueExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0015": { "value": "11275000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestRevenueExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0016": { "value": "11049000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestRevenueExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0018": { "value": "3247000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:FeeAndCommissionIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0017": { "value": "3175000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:FeeAndCommissionIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0019": { "value": "2983000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:FeeAndCommissionIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_NegatedLabel_0023": { "value": "733000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:FeeAndCommissionExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_NegatedLabel_0025": { "value": "708000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:FeeAndCommissionExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_NegatedLabel_0024": { "value": "653000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:FeeAndCommissionExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0034": { "value": "1112000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:TradingIncomeExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0033": { "value": "825000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:TradingIncomeExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0035": { "value": "794000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:TradingIncomeExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0037": { "value": "186000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:OtherOperatingIncomeExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0036": { "value": "136000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:OtherOperatingIncomeExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_Label_0038": { "value": "579000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:OtherOperatingIncomeExpense", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0045": { "value": "3812000000.0", "decimals": -6, "dimensions": { "concept": "nwg:NonInterestIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0044": { "value": "3428000000.0", "decimals": -6, "dimensions": { "concept": "nwg:NonInterestIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0043": { "value": "3703000000.0", "decimals": -6, "dimensions": { "concept": "nwg:NonInterestIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0052": { "value": "16641000000.0", "decimals": -6, "dimensions": { "concept": "nwg:TotalNetInterestIncomeAndNetNonInterestIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0053": { "value": "14703000000.0", "decimals": -6, "dimensions": { "concept": "nwg:TotalNetInterestIncomeAndNetNonInterestIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_TotalLabel_0051": { "value": "14752000000.0", "decimals": -6, "dimensions": { "concept": "nwg:TotalNetInterestIncomeAndNetNonInterestIncome", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedIncomeStatement_NegatedLabel_0059": { "value": "4174000000.0", "decimals": -6, "dimensions": { "concept": 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Richard Haythornthwaite
Chair
John-Paul Thwaite
Group Chief Executive Of\ufb01cer
Katie Murray
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"nwg:ProceedsFromIssueOfMinimumRequirementForOwnFundsAndEligibleLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00299": { "value": "3177000000.0", "decimals": -6, "dimensions": { "concept": "nwg:RepaymentsOfMinimumRequirementForOwnFundsAndEligibleLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00300": { "value": "2854000000.0", "decimals": -6, "dimensions": { "concept": "nwg:RepaymentsOfMinimumRequirementForOwnFundsAndEligibleLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00298": { "value": "4236000000.0", "decimals": -6, "dimensions": { "concept": "nwg:RepaymentsOfMinimumRequirementForOwnFundsAndEligibleLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00581": { "value": "1035000000.0", "decimals": -6, "dimensions": { "concept": "nwg:InterestPaidOnMinimumRequirementForOwnFundsAndEligibleLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00580": { "value": "885000000.0", "decimals": -6, "dimensions": { "concept": "nwg:InterestPaidOnMinimumRequirementForOwnFundsAndEligibleLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00582": { "value": "844000000.0", "decimals": -6, "dimensions": { "concept": "nwg:InterestPaidOnMinimumRequirementForOwnFundsAndEligibleLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00584": { "value": "21000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsFromChangesInOwnershipInterestsInSubsidiaries", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00585": { "value": "0.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsFromChangesInOwnershipInterestsInSubsidiaries", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00583": { "value": "0.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsFromChangesInOwnershipInterestsInSubsidiaries", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00588": { "value": "579000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsToAcquireOrRedeemEntitysShares", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00586": { "value": "2716000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsToAcquireOrRedeemEntitysShares", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00587": { "value": "2416000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsToAcquireOrRedeemEntitysShares", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00756": { "value": "2376000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00758": { "value": "1800000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_NegatedLabel_00757": { "value": "1703000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_TotalLabel_00760": { "value": "-3494000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_TotalLabel_00759": { "value": "-1886000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_TotalLabel_00761": { "value": "-6304000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_Label_00119": { "value": "775000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_Label_00120": { "value": "-1166000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_Label_00118": { "value": "-1189000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_TotalLabel_00122": { "value": "-9412000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_TotalLabel_00121": { "value": "-13979000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_TotalLabel_00123": { "value": "-39625000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_PeriodStartLabel_00589": { "value": "104845000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_PeriodStartLabel_00591": { "value": "118824000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_PeriodStartLabel_00590": { "value": "158449000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_PeriodEndLabel_00592": { "value": "95433000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_PeriodEndLabel_00594": { "value": "104845000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatement_PeriodEndLabel_00593": { "value": "118824000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00172": { "value": "25401000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestReceivedClassifiedAsOperatingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00174": { "value": "24996000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestReceivedClassifiedAsOperatingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00173": { "value": "20345000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestReceivedClassifiedAsOperatingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00177": { "value": "13028000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestPaidClassifiedAsOperatingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00175": { "value": "13689000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestPaidClassifiedAsOperatingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00176": { "value": "8871000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestPaidClassifiedAsOperatingActivities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00289": { "value": "94000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashOutflowForLeases", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00290": { "value": "95000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashOutflowForLeases", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00291": { "value": "122000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashOutflowForLeases", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00596": { "value": "77000000.0", "decimals": -6, "dimensions": { "concept": "nwg:PaymentsOfPrincipalAmountLeaseLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00595": { "value": "79000000.0", "decimals": -6, "dimensions": { "concept": "nwg:PaymentsOfPrincipalAmountLeaseLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "ConsolidatedCashFlowStatementParenthetical_Label_00597": { "value": "102000000.0", "decimals": -6, "dimensions": { "concept": "nwg:PaymentsOfPrincipalAmountLeaseLiabilities", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00216": { "value": "Accounting policies
This section includes the basis of
preparation and critical and material
accounting policies used to prepare the
\ufb01nancial statements.
Our accounting policies are the speci\ufb01c
principles, bases, conventions, rules, and
practices we apply in preparing and
presenting the \ufb01nancial statements.
Further information is provided where
judgement and estimation is applied to
critical accounting policies and key
sources of estimation uncertainty.
Future accounting developments details
new and amendments to existing
accounting standards, their effective
date, and our assessment of their impact
on future \ufb01nancial statements.
1. Presentation of \ufb01nancial
statements
NatWest Group plc is incorporated in the UK
and registered in Scotland. The \ufb01nancial
statements are presented in the functional
currency, pounds sterling.
The audited \ufb01nancial statements include
these accounting policies, the accompanying
notes to the \ufb01nancial statements on pages
305 to 375 and the audited sections of the
Risk and capital management section on
pages 178 to 275 which together from an
integral part of the primary \ufb01nancial
statements.
The directors have prepared the \ufb01nancial
statements on a going concern basis after
assessing the principal risks, forecasts,
projections and other relevant evidence over
the twelve months from the date the \ufb01nancial
statements are approved (see the Report of
the directors) and in accordance with UK-
adopted International Accounting Standards
(IAS), and International Financial Reporting
Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB). The critical and material accounting
policies and related judgements are set out
below.
The \ufb01nancial statements are presented on an
historical cost basis except for certain
\ufb01nancial instruments which are stated at fair
value.
The effect of the amendments to IFRS
Accounting Standards effective from 1
January 2025 on our \ufb01nancial statements
was immaterial.
We have applied the exception from the
accounting requirements for deferred taxes in
IAS 12 Income taxes in respect of Pillar 2
income taxes issued by the IASB in May
2023. Accordingly, we have not recognised or
disclosed information about deferred tax
assets and liabilities related to Pillar 2 income
taxes.
Our consolidated \ufb01nancial statements
incorporate the results of NatWest Group plc
and the entities it controls. Control arises
when we have the power to direct the
activities of an entity so as to affect the
return from the entity. Control is assessed by
reference to our ability to enforce our will on
the other entity, typically through voting
rights. The consolidated \ufb01nancial statements
are prepared under consistent accounting
policies.
A subsidiary is included in the consolidated
\ufb01nancial statements at fair value on
acquisition from the date it is controlled by us
until the date we cease to control it through a
sale or a signi\ufb01cant change in circumstances.
Changes in our interest in a subsidiary that
do not result in us ceasing to control that
subsidiary are accounted for as equity
transactions.
We apply accounting for associates and joint
arrangements to entities where we have
signi\ufb01cant in\ufb02uence, but not control, over the
operating and \ufb01nancial policies. We assess
signi\ufb01cant in\ufb02uence by reference to a
presumption of voting rights of more than
20%, but less than 50%, supplemented by a
qualitative assessment of substantive rights
which include representation at the Board of
Directors and signi\ufb01cant exchange of
managerial personnel or technology amongst
others.
Investments in associates and joint ventures
are recorded upon initial recognition at cost
and increased or decreased each period by
the share of the subsequent levels of pro\ufb01t or
loss. Other changes in equity are considered
in line with their nature.
The judgements and assumptions involved in
our accounting policies that are considered
by the Board to be the most important to the
portrayal of its \ufb01nancial condition are noted
below. The use of estimates, assumptions or
models that differ from those adopted by us
would affect our reported results.
How Climate risk affects our accounting
judgements and estimates
Business planning
Key \ufb01nancial estimates are based on
management's latest \ufb01ve-year revenue and
cost forecasts. The outputs from this forecast
affect forward-looking accounting estimates.
Measurement of deferred tax and expected
credit losses are highly sensitive to
reasonably possible changes in those
anticipated conditions. In 2024, our scenario
planning was enhanced by the further
integration of NatWest Group\u2019s climate
transition plan, including the assessment of
climate-related risks and opportunities.
In 2025, our scenario planning was enhanced
by the further integration of NatWest Group\u2019s
climate transition plan, including the
assessment of climate-related risks and
opportunities.
Our climate transition plan includes an
\u2022
assessment of:
o
Changes in products, services and
business operations to support
customer transition towards net zero.
o
Financial impacts of supporting
customer transition, including
investment required. The linkage
between our \ufb01nancial plan and our
climate transition plan will continue to
be developed and refreshed annually
as part of the \ufb01nancial planning cycle.
o
The impact of UK Government
policies. To estimate the impact of
current UK Government policy on our
climate transition plan, we developed
a progress-adjusted scenario. We use
the UK CCC\u2019s Seventh Carbon
Budget Report\u2019s sectoral balanced
pathways and apply estimated time
delays based on the credibility
assessment of policies from the UK
CCC\u2019s June 2025 Progress Report.
There remains considerable uncertainty in the
climate policy environment, shaped by
geopolitical developments and wider
uncertainty over how the climate will evolve
and how and when governments, regulators,
businesses, investors and customers will
respond.
Information used in other accounting
estimates
We make use of reasonable and
supportable information to make
accounting judgements and estimates.
This includes information about the
observable effects of the physical and
transition risks of climate change on the
current creditworthiness of borrowers,
asset values and market indicators. Many
of the effects arising from climate change
will be longer term in nature, with an
inherent level of uncertainty, and have
limited effect on accounting judgements
and estimates for the current period.
Some physical and transition risks can
manifest in the shorter term. The
following items represent the most
signi\ufb01cant effects:
\u2022
The classi\ufb01cation of \ufb01nancial
instruments linked to climate, or
other sustainability indicators.
Consideration is given to whether the
effect of climate-related terms
prevent the instrument cash\ufb02ows
being solely payments of principal
and interest.
\u2022
The use of market indicators as
inputs to fair value is assumed to
include current information and
knowledge regarding the effect of
climate risk.
Effect of climate change in the
estimation of expected credit loss
We are monitoring the effect of the
physical and transition consequences of
climate change on our experience of loan
loss. We use available information
regarding the effect of climate transition
policy largely driven by carbon prices as
an adjustment to macroeconomic factors
that are used as inputs to the models that
generate PD and LGD outcomes, which
are key inputs to the ECL calculation. The
determination of whether speci\ufb01c loss
drivers and climate events generate
speci\ufb01c losses is ongoing and is necessary
to determine how sensitive changes in ECL
could be to climate inputs.
Future cash\ufb02ows are discounted, so long-
dated cash\ufb02ows are less likely to affect
current expectations on credit loss. Our
assessment of sector-speci\ufb01c risks, and
whether additional adjustments are
required, includes expectations of the
ability of those sectors to meet their
\ufb01nancing needs in the market. Changes in
credit stewardship and credit risk appetite
that stem from climate transition policies
may directly affect our positions.
2. Critical accounting policies
The judgements and assumptions involved in our accounting policies that are considered by the Board to
be the most important to the portrayal of our \ufb01nancial condition are noted below. The use of estimates,
assumptions or models that differ from those adopted by us would affect our reported results.
Management\u2019s consideration of uncertainty is outlined in the relevant sections, including the ECL
estimate in the Risk and capital management section.
Information used for signi\ufb01cant estimate
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0
Further
Policy
Judgement
Estimate
information
Deferred tax
Determination of whether
Our estimates are based on
Note 7
\u00a0
suf\ufb01cient sustainable taxable
the \ufb01ve-year revenue and cost
\u00a0
\u00a0
pro\ufb01ts will be generated in future
forecasts (which include
\u00a0
\u00a0
years to recover the deferred tax
inherent uncertainties).
\u00a0
\u00a0
asset.
\u00a0\u00a0
Fair value \u2013
Classi\ufb01cation of a fair value
Estimation of the fair value,
Note 10
\ufb01nancial
instrument as level 3, where the
where it is reasonably possible
\u00a0
instruments
valuation is driven by
to have alternative
\u00a0
\u00a0
unobservable inputs.
assumptions in determining the
\u00a0
\u00a0\u00a0
FV.
\u00a0
Loan
De\ufb01nition of default against which
ECL estimates contain a
Note 14
impairment
to apply PD, LGD and EAD
number of measurement
\u00a0
provisions
models.
uncertainties (such as the
\u00a0
\u00a0
Selection of multiple economic
weighting of multiple economic
\u00a0
\u00a0
scenarios.
scenarios) and disclosures
\u00a0
\u00a0
Criteria for a signi\ufb01cant increase
include sensitivities to show the
\u00a0
\u00a0
in credit risk.
impact on other reasonably
\u00a0
\u00a0
Identi\ufb01cation of risks not captured
possible scenarios.
\u00a0
\u00a0
by the models.
\u00a0\u00a0
\n
Changes in judgements and assumptions could result in a material adjustment to those estimates in
future reporting periods.
2.1. Deferred tax
Deferred tax is the estimated tax expected to
be payable or recoverable in respect of
temporary differences between the carrying
amount of an asset or liability for accounting
purposes and the carrying amount for tax
purposes in the future. Deferred tax liabilities
are generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent their
recovery is probable.
Deferred tax is calculated using tax rates
expected to apply in the periods when the
assets will be realised or the liabilities settled,
based on tax rates and laws enacted, or
substantively enacted, at the balance sheet
date.
Deferred tax asset recoverability is based on
the level of supporting eligible and available
deferred tax liabilities we have and of our
future taxable pro\ufb01ts. These future taxable
pro\ufb01ts are based on our \ufb01ve-year revenue
and cost forecasts and the expectation of
long-term economic growth beyond this
period. The \ufb01ve-year forecast takes account
of management\u2019s current expectations of
competitiveness and pro\ufb01tability. The long-
term growth rate re\ufb02ects external indicators
which will include market expectations on
climate risk. We do not consider any
additional adjustments to this indicator.
2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.
2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.
3. Material accounting policies
3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.
3.2. Discontinued operations, held for sale
and disposal groups
The results of discontinued operations are
excluded from the results of continuing
operations and are presented as a single
amount as pro\ufb01t or loss from discontinued
operations, net of tax in the income
statement. Comparatives are re-presented
for the income statement, cash \ufb02ow
statement, statement of changes in equity
and related notes.
An asset or disposal group (assets and
liabilities) is classi\ufb01ed as held for sale if we will
recover its carrying amount principally
through a sale transaction rather than
through continuing use. It is measured at the
lower of its carrying amount or fair value less
cost to sell unless the existing measurement
provisions of IFRS apply. These are presented
as single amounts; comparatives are not re-
presented.
3.3. Staff costs
Employee costs, such as salaries, paid
absences, and other bene\ufb01ts are recognised
over the period in which the employees
provide the related services to us.
Employees may receive variable
compensation in cash, in deferred cash or
debt instruments of NatWest Group or in
ordinary shares of NatWest Group plc subject
to deferral, clawback and forfeiture criteria.
We operate a number of share-based
compensation schemes under which we
grant awards of NatWest Group plc shares
and share options to our employees. Such
awards are subject to vesting conditions.
Variable compensation that is settled in cash
or debt instruments is charged to the income
statement on a straight-line basis over the
period during which services are provided,
taking account of forfeiture and clawback
criteria. The value of employee services
received in exchange for NatWest Group plc
shares and share options is recognised as an
expense over the vesting period, subject to
deferral, clawback, cancellation and forfeiture
criteria with a corresponding increase in
equity. The fair value of shares granted is the
market price adjusted for the expected effect
of dividends as employees are not entitled to
dividends until shares are vested.
The fair value of options granted is
determined using option pricing models to
estimate the numbers of shares likely to vest.
These consider the exercise price of the
option, the current share price, the risk-free
interest rate, the expected volatility of the
share price over the life of the option and
other relevant factors such as the dividend
yield.
De\ufb01ned contribution pension scheme
A scheme where we pay \ufb01xed contributions
and there is no legal or constructive
obligation to pay further contributions or
bene\ufb01ts. Contributions are recognised in the
income statement as employee service costs
accrue.
De\ufb01ned bene\ufb01t pension scheme
A scheme that de\ufb01nes the bene\ufb01t an
employee will receive on retirement and is
dependent on one or more factors such as
age, salary, and years of service. The net of
the recognisable scheme assets and
obligations is reported on the balance sheet
in other assets or other liabilities. The de\ufb01ned
bene\ufb01t obligation is measured on an actuarial
basis.
The charge to the income statement for
pension costs (mainly the service cost and
the net interest on the net de\ufb01ned bene\ufb01t
asset or liability) is recognised in operating
expenses.
Actuarial gains and losses (i.e. gains and/or
losses on remeasuring the net de\ufb01ned bene\ufb01t
asset or liability due to changes in actuarial
measurement assumptions) are recognised in
other comprehensive income in full in the
period in which they arise, and not subject to
recycling to the income statement.
The difference between scheme assets and
scheme liabilities, the net de\ufb01ned bene\ufb01t
asset or liability, is recognised on the balance
sheet if the criteria of the asset ceiling test
are met. This requires the net de\ufb01ned bene\ufb01t
surplus to be limited to the present value of
any economic bene\ufb01ts available to us in the
form of refunds from the plan or reduced
contributions to it.
We will recognise a liability where a minimum
funding requirement exists for any of our
de\ufb01ned bene\ufb01t pension schemes. This re\ufb02ects
agreed minimum funding and the availability
of a net surplus as described above.
We recognise a net de\ufb01ned bene\ufb01t asset
when the net de\ufb01ned bene\ufb01t surplus can
generate a bene\ufb01t in the form of a refund or
reduction in future contributions to the plan.
The net bene\ufb01t pension asset is recognised at
the present value of the bene\ufb01ts that will be
available to us excluding interest and the
effect of the asset ceiling (if any), excluding
interest. Changes in the present value of the
net bene\ufb01t pension asset are recognised
immediately in other comprehensive income.
In instances where Trustees have the ability
to declare augmented bene\ufb01ts to
participants, we do not recognise a de\ufb01ned
bene\ufb01t pension asset and record the surplus
immediately in other comprehensive income.
3.4. Intangible assets
Intangible assets are identi\ufb01able non-
monetary assets without physical substance
acquired or developed by us, and are stated
at cost less accumulated amortisation and
impairment losses. Amortisation is a method
to spread the cost of such assets over time in
the income statement.
This is charged to the income statement over
the assets' estimated useful economic lives
using methods that best re\ufb02ect the pattern of
economic bene\ufb01ts.
The estimated useful economic lives are:
Computer software 3 to 10 years
Other acquired intangibles 3 to 5 years
Direct costs relating to the development of
internal-use computer software are reported
on the balance sheet after technical feasibility
and economic viability have been established.
These direct costs include payroll, the costs of
materials and services, and directly
attributable overheads. Capitalisation of costs
ceases when the software can operate as
intended.
During and after development, accumulated
costs are reviewed for impairment against the
bene\ufb01ts that the software is expected to
generate. Costs incurred prior to the
establishment of technical feasibility and
economic viability are expensed to the
income statement as incurred, as are all
training costs and general overheads. The
costs of licences to use computer software
that are expected to generate economic
bene\ufb01ts beyond three years are also reported
on the balance sheet.
Goodwill on the acquisition of a subsidiary is
the excess of the fair value of the
consideration paid, the fair value of any
existing interest in the subsidiary and the
amount of any non-controlling interest
measured either at fair value or at its share
of the subsidiary\u2019s net assets over the net fair
value of the subsidiary\u2019s identi\ufb01able assets,
liabilities, and contingent liabilities.
Goodwill is measured at initial cost less any
subsequent impairment losses. The gain or
loss on the disposal of a subsidiary includes
the carrying value of any related goodwill.
3.5. Impairment of non-\ufb01nancial assets
Goodwill is tested for impairment annually or
more frequently if events or changes in
circumstances indicate that it might be
impaired.
At each balance sheet date, we assess
whether there is any indication that other
intangible assets or property, plant and
equipment are impaired. If any such
indication exists, we estimate the recoverable
amount of the asset and compare it to its
balance sheet value to calculate if an
impairment loss should be recognised in the
income statement. A reversal of an
impairment loss on other intangible assets or
property, plant and equipment is recognised
in the income statement provided the
increased carrying value is not greater than it
would have been had no impairment loss
been recognised.
The recoverable amount of an asset that
does not generate cash \ufb02ows that are
independent from those of other assets or
groups of assets, is determined as part of the
cash-generating unit to which the asset
belongs.
A cash-generating unit is the smallest
identi\ufb01able group of assets that generates
cash in\ufb02ows that are largely independent of
the cash in\ufb02ows from other assets or groups
of assets. For the purposes of impairment
testing, goodwill acquired in a business
combination is allocated to cash-generating
units or groups of cash-generating units
expected to bene\ufb01t from the combination.
The recoverable amount of an asset or cash-
generating unit is the higher of its fair value
less cost to sell or its value in use. Value in
use is the present value of future cash \ufb02ows
from the asset or cash-generating unit
discounted at a rate that re\ufb02ects market
interest rates adjusted for risks speci\ufb01c to the
asset or cash-generating unit that have not
been considered in estimating future cash
\ufb02ows.
The assessment of asset impairment is based
upon value in use. This represents the value
of future cash\ufb02ows and uses our \ufb01ve-year
revenue and cost forecasts and the
expectation of long term economic growth
beyond this period. The \ufb01ve-year forecast
takes account of management\u2019s current
expectations of competitiveness and
pro\ufb01tability, including near-term effects of
climate transition risk. The long-term growth
rate re\ufb02ects external indicators which will
include market expectations on climate risk.
We do not consider any additional
adjustments to this indicator.
3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.
Income and expenses of foreign subsidiaries
and branches are translated into sterling at
average exchange rates unless these do not
approximate the foreign exchange rates
ruling at the dates of the transactions.
Foreign exchange differences arising on the
translation of a foreign operation are
recognised in other comprehensive income.
The amount accumulated in equity is
reclassi\ufb01ed from equity to the income
statement on disposal of a foreign operation.
3.7. Tax
Tax encompassing current tax and deferred
tax is recognised in the income statement
except when taxable items are recognised in
other comprehensive income or equity. Tax
consequences arising from servicing \ufb01nancial
instruments classi\ufb01ed as equity are
recognised in the income statement.
Accounting for taxes is judgemental and
carries a degree of uncertainty because tax
law is subject to interpretation, which might
be questioned by the relevant tax authority.
We recognise the most likely current and
deferred tax liability or asset, assessed for
uncertainty using consistent judgements and
estimates. Current and deferred tax assets
are only recognised where their recovery is
deemed probable, and current and deferred
tax liabilities are recognised at the amount
that represents the best estimate of the
probable outcome having regard to their
acceptance by the tax authorities.
3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.
3.9. Netting
Financial assets and \ufb01nancial liabilities are
offset, and the net amount presented on the
balance sheet when, and only when, we
currently have a legally enforceable right to
set off the recognised amounts and we intend
either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
We are party to a number of arrangements,
including master netting agreements, that
give us the right to offset \ufb01nancial assets and
\ufb01nancial liabilities, but where we do not intend
to settle the amounts net or simultaneously,
the assets and liabilities concerned are
presented separately on the balance sheet.
3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.
3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement.
3.12. Provisions
We recognise a provision for a present
obligation resulting from a past event when it
is more likely than not that we will be
required to pay to settle the obligation and
the amount of the obligation can be
estimated reliably.
Provision is made for restructuring costs,
including the costs of redundancy, when we
have a constructive obligation. An obligation
exists when we have a detailed formal plan
for the restructuring and have raised a valid
expectation in those affected either by
starting to implement the plan or by
announcing its main features.
We recognise any onerous cost of the present
obligation under a contract as a provision. An
onerous cost is the unavoidable cost of
meeting our contractual obligations that
exceed the expected economic bene\ufb01ts.
When we intend to vacate a leasehold
property or right of use asset, the asset
would be tested for impairment and a
provision may be recognised for the ancillary
contractual occupancy costs.
3.13. Financial guarantee contracts
Under a \ufb01nancial guarantee contract, we, in
return for a fee, undertake to meet a
customer\u2019s obligations under the terms of a
debt instrument if the customer fails to do so.
A \ufb01nancial guarantee not designated as fair
value through pro\ufb01t or loss is recognised as a
liability; initially at fair value and subsequently
at the higher of its initial value less cumulative
amortisation and any provision under the
contract measured in accordance with our
ECL accounting policy. Amortisation is
calculated to recognise fees receivable in the
income statement over the period of the
guarantee. A separate asset is recognised in
respect of fees receivable for provision of the
\ufb01nancial guarantee.
Purchased \ufb01nancial guarantees are
considered to be integral, and fully adjust the
covered debt instrument expected credit loss
provision, only where the guarantee is
contemplated at the inception of the debt
instrument and is entered into within a
reasonable timeframe.
4. Future accounting developments
International Financial Reporting
Standards
Effective 1 January 2026
\u2022
Amendments to the Classi\ufb01cation and
Measurement of Financial Instruments
(Amendments to IFRS 9 and IFRS 7 \u2013
Issued May 2024)
Effective 1 January 2027
\u2022
P
resentation and Disclosures in Financial
Statements (IFRS 18 \u2013 Issued April 2024)
\u2022
Subsidiaries without Public Accountability
(IFRS 19 \u2013 Issued May 2024)
We are assessing the effect of adopting the
accounting developments effective from 1
January 2027 on our \ufb01nancial statements and
have largely completed a similar assessment
for the Amendments to IFRS 9 and IFRS 7
effective from 1 January 2026. We do not
expect any to have a material impact on our
\ufb01nancial performance or position, although
IFRS18 may have an impact on presentation
and disclosure. Accounting Assumptions
Placing a value on NatWest Group\u2019s de\ufb01ned bene\ufb01t pension schemes\u2019 liabilities requires NatWest
\n
Group\u2019s management to make a number of assumptions, with the support of independent
\n
actuaries. The ultimate cost of the de\ufb01ned bene\ufb01t obligations depends upon actual future events
\n
and the assumptions made are unlikely to be exactly borne out in practice, meaning the \ufb01nal
\n
cost may be higher or lower than expected.
\n
The most signi\ufb01cant assumptions used for the Main section are shown below:
Principal IAS 19 actuarial assumptions
(1)
2025
2024
%
%
Discount rate
5.7
5.6
Inflation assumption (RPI)
2.9
3.2
Rate of increase in salaries
1.8
1.8
Rate of increase in deferred pensions
2.9
3.4
Rate of increase in pensions in payment
2.4
2.6
Lump sum conversion rate at retirement
18.0
18.0
Longevity at age 60:
years
years
Current pensioners
Males
26.9
26.5
Females
28.6
28.5
Future pensioners, currently aged 40
Males
27.9
27.5
Females
29.9
29.7
\n
(1)
The above financial assumptions are long-term assumptions set with reference to the period over which the obligations are expected to be
\nsettled. Signi\ufb01cant judgement is required when setting the criteria for bonds to be included in the basket of bonds that is used to determine the discount rate used in the IAS 19 valuations. The criteria include
issue size, quality of pricing and the exclusion of outliers. Judgement is also required in determining the shape of the yield curve at long durations; a constant credit spread relative to gilts is assumed.
Sensitivity to the main assumptions is presented below.Judgement: tax contingencies
NatWest Group\u2019s corporate income tax charge and its provisions for corporate income taxes necessarily involve a 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. Any difference between the \ufb01nal outcome and the amounts provided will affect current and deferred income tax
charges in the period when the matter is resolved. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Critical accounting policy: Deferred tax
NatWest Group has recognised a deferred tax asset of \u00a31,252 million (2024 - \u00a31,876 million) and
a deferred tax liability of \u00a3104 million (2024 - \u00a399 million). These include amounts recognised in
respect of UK and overseas tax losses of \u00a3814 million (2024 - \u00a31,106 million).
Judgement
\u2013
NatWest Group has considered the carrying value of deferred tax assets and
concluded that, based on management\u2019s estimates, suf\ufb01cient sustainable taxable pro\ufb01ts will be
generated in future years to recover recognised deferred tax assets.
Estimates
\u2013
For entities with mature business models and a longer track record of pro\ufb01tability
and stable earnings, these estimates are partly based on forecast performance beyond the
horizon for management\u2019s detailed plans. They have regard to inherent uncertainties. The
deferred tax asset in Ulydien DAC is supported substantially by future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025.Judgement: classi\ufb01cation of \ufb01nancial assets
Classi\ufb01cation of \ufb01nancial assets between amortised cost and fair
value through other comprehensive income requires a degree of
judgement in respect of business models and contractual
cash\ufb02ows.
\u2022
The business model criteria are assessed at a portfolio level
to determine whether assets are classi\ufb01ed as held to collect
or held to collect and sell. Information that is considered in
determining the applicable business model includes: the
portfolio\u2019s policies and objectives; how the performance and
risks of the portfolio are managed, evaluated and reported
to management; and the frequency, volume and timing of
sales in prior periods, sales expectation for future periods,
and the reasons for sales.
\u2022
The contractual cash \ufb02ow characteristics of \ufb01nancial assets
are assessed with reference to whether the cash \ufb02ows
represent solely payments of principal and interest (SPPI). A
level of judgement is made in assessing terms that could
change the contractual cash \ufb02ows so that it would not meet
the condition for SPPI, including contingent and leverage
features, non-recourse arrangements and features that
could modify the time value of money.
For accounting policy information refer to Accounting policies
3.8, 3.9 and 3.11.Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.Key areas of judgement
Over the years the business has simpli\ufb01ed,
with most products classi\ufb01ed as level 1 or 2
of the fair value hierarchy. However, the
diverse range of products historically traded
by NatWest Group means some products
remain classi\ufb01ed as level 3. Level 3 indicates
a signi\ufb01cant level of pricing uncertainty,
where expert judgement is used. As such,
extra disclosures are required in respect of
level 3 instruments.
In general, the degree of expert judgement
used and hence valuation uncertainty
depends on the degree of liquidity of an
instrument or input.
Where markets are liquid, little judgement is
required. However, when the information
regarding the liquidity in a particular market
is not clear, a judgement may need to be
made. For example, for an equity traded on
an exchange, daily volumes of trading can be
seen, but for an OTC derivative, assessing
the liquidity of the market with no central
exchange is more challenging.
The breadth and depth of the IPV data allows
for a rules-based quality assessment to be
made of market activity, liquidity, and pricing
uncertainty, which assists with the process of
allocation to an appropriate level. Where
suitable independent pricing information is
not readily available, the quality assessment
will result in the instrument being assessed as
level 3.Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.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 out\ufb02ow of economic bene\ufb01t is probable and the out\ufb02ow can
be estimated reliably. Any difference between the \ufb01nal 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 3.12.
Background information on all material provisions is given in Note 25
. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00311": { "value": "1. Presentation of \ufb01nancial
statements
NatWest Group plc is incorporated in the UK
and registered in Scotland. The \ufb01nancial
statements are presented in the functional
currency, pounds sterling.
The audited \ufb01nancial statements include
these accounting policies, the accompanying
notes to the \ufb01nancial statements on pages
305 to 375 and the audited sections of the
Risk and capital management section on
pages 178 to 275 which together from an
integral part of the primary \ufb01nancial
statements.
The directors have prepared the \ufb01nancial
statements on a going concern basis after
assessing the principal risks, forecasts,
projections and other relevant evidence over
the twelve months from the date the \ufb01nancial
statements are approved (see the Report of
the directors) and in accordance with UK-
adopted International Accounting Standards
(IAS), and International Financial Reporting
Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB). The critical and material accounting
policies and related judgements are set out
below.
The \ufb01nancial statements are presented on an
historical cost basis except for certain
\ufb01nancial instruments which are stated at fair
value.
The effect of the amendments to IFRS
Accounting Standards effective from 1
January 2025 on our \ufb01nancial statements
was immaterial.
We have applied the exception from the
accounting requirements for deferred taxes in
IAS 12 Income taxes in respect of Pillar 2
income taxes issued by the IASB in May
2023. Accordingly, we have not recognised or
disclosed information about deferred tax
assets and liabilities related to Pillar 2 income
taxes.
Our consolidated \ufb01nancial statements
incorporate the results of NatWest Group plc
and the entities it controls. Control arises
when we have the power to direct the
activities of an entity so as to affect the
return from the entity. Control is assessed by
reference to our ability to enforce our will on
the other entity, typically through voting
rights. The consolidated \ufb01nancial statements
are prepared under consistent accounting
policies.
A subsidiary is included in the consolidated
\ufb01nancial statements at fair value on
acquisition from the date it is controlled by us
until the date we cease to control it through a
sale or a signi\ufb01cant change in circumstances.
Changes in our interest in a subsidiary that
do not result in us ceasing to control that
subsidiary are accounted for as equity
transactions.
We apply accounting for associates and joint
arrangements to entities where we have
signi\ufb01cant in\ufb02uence, but not control, over the
operating and \ufb01nancial policies. We assess
signi\ufb01cant in\ufb02uence by reference to a
presumption of voting rights of more than
20%, but less than 50%, supplemented by a
qualitative assessment of substantive rights
which include representation at the Board of
Directors and signi\ufb01cant exchange of
managerial personnel or technology amongst
others.
Investments in associates and joint ventures
are recorded upon initial recognition at cost
and increased or decreased each period by
the share of the subsequent levels of pro\ufb01t or
loss. Other changes in equity are considered
in line with their nature.
The judgements and assumptions involved in
our accounting policies that are considered
by the Board to be the most important to the
portrayal of its \ufb01nancial condition are noted
below. The use of estimates, assumptions or
models that differ from those adopted by us
would affect our reported results. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00217": { "value": "1. Presentation of \ufb01nancial statementsThe directors have prepared the \ufb01nancial
statements on a going concern basis after
assessing the principal risks, forecasts,
projections and other relevant evidence over
the twelve months from the date the \ufb01nancial
statements are approved (see the Report of
the directors) and in accordance with UK-
adopted International Accounting Standards
(IAS), and International Financial Reporting
Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB).", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00215": { "value": "1. Presentation of \ufb01nancial
statements
NatWest Group plc is incorporated in the UK
and registered in Scotland. The \ufb01nancial
statements are presented in the functional
currency, pounds sterling.
The audited \ufb01nancial statements include
these accounting policies, the accompanying
notes to the \ufb01nancial statements on pages
305 to 375 and the audited sections of the
Risk and capital management section on
pages 178 to 275 which together from an
integral part of the primary \ufb01nancial
statements.
The directors have prepared the \ufb01nancial
statements on a going concern basis after
assessing the principal risks, forecasts,
projections and other relevant evidence over
the twelve months from the date the \ufb01nancial
statements are approved (see the Report of
the directors) and in accordance with UK-
adopted International Accounting Standards
(IAS), and International Financial Reporting
Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB). The critical and material accounting
policies and related judgements are set out
below.
The \ufb01nancial statements are presented on an
historical cost basis except for certain
\ufb01nancial instruments which are stated at fair
value.
The effect of the amendments to IFRS
Accounting Standards effective from 1
January 2025 on our \ufb01nancial statements
was immaterial.
We have applied the exception from the
accounting requirements for deferred taxes in
IAS 12 Income taxes in respect of Pillar 2
income taxes issued by the IASB in May
2023. Accordingly, we have not recognised or
disclosed information about deferred tax
assets and liabilities related to Pillar 2 income
taxes.
Our consolidated \ufb01nancial statements
incorporate the results of NatWest Group plc
and the entities it controls. Control arises
when we have the power to direct the
activities of an entity so as to affect the
return from the entity. Control is assessed by
reference to our ability to enforce our will on
the other entity, typically through voting
rights. The consolidated \ufb01nancial statements
are prepared under consistent accounting
policies.
A subsidiary is included in the consolidated
\ufb01nancial statements at fair value on
acquisition from the date it is controlled by us
until the date we cease to control it through a
sale or a signi\ufb01cant change in circumstances.
Changes in our interest in a subsidiary that
do not result in us ceasing to control that
subsidiary are accounted for as equity
transactions.
We apply accounting for associates and joint
arrangements to entities where we have
signi\ufb01cant in\ufb02uence, but not control, over the
operating and \ufb01nancial policies. We assess
signi\ufb01cant in\ufb02uence by reference to a
presumption of voting rights of more than
20%, but less than 50%, supplemented by a
qualitative assessment of substantive rights
which include representation at the Board of
Directors and signi\ufb01cant exchange of
managerial personnel or technology amongst
others.
Investments in associates and joint ventures
are recorded upon initial recognition at cost
and increased or decreased each period by
the share of the subsequent levels of pro\ufb01t or
loss. Other changes in equity are considered
in line with their nature.
The judgements and assumptions involved in
our accounting policies that are considered
by the Board to be the most important to the
portrayal of its \ufb01nancial condition are noted
below. The use of estimates, assumptions or
models that differ from those adopted by us
would affect our reported results.
How Climate risk affects our accounting
judgements and estimates
Business planning
Key \ufb01nancial estimates are based on
management's latest \ufb01ve-year revenue and
cost forecasts. The outputs from this forecast
affect forward-looking accounting estimates.
Measurement of deferred tax and expected
credit losses are highly sensitive to
reasonably possible changes in those
anticipated conditions. In 2024, our scenario
planning was enhanced by the further
integration of NatWest Group\u2019s climate
transition plan, including the assessment of
climate-related risks and opportunities.
In 2025, our scenario planning was enhanced
by the further integration of NatWest Group\u2019s
climate transition plan, including the
assessment of climate-related risks and
opportunities.
Our climate transition plan includes an
\u2022
assessment of:
o
Changes in products, services and
business operations to support
customer transition towards net zero.
o
Financial impacts of supporting
customer transition, including
investment required. The linkage
between our \ufb01nancial plan and our
climate transition plan will continue to
be developed and refreshed annually
as part of the \ufb01nancial planning cycle.
o
The impact of UK Government
policies. To estimate the impact of
current UK Government policy on our
climate transition plan, we developed
a progress-adjusted scenario. We use
the UK CCC\u2019s Seventh Carbon
Budget Report\u2019s sectoral balanced
pathways and apply estimated time
delays based on the credibility
assessment of policies from the UK
CCC\u2019s June 2025 Progress Report.
There remains considerable uncertainty in the
climate policy environment, shaped by
geopolitical developments and wider
uncertainty over how the climate will evolve
and how and when governments, regulators,
businesses, investors and customers will
respond.
Information used in other accounting
estimates
We make use of reasonable and
supportable information to make
accounting judgements and estimates.
This includes information about the
observable effects of the physical and
transition risks of climate change on the
current creditworthiness of borrowers,
asset values and market indicators. Many
of the effects arising from climate change
will be longer term in nature, with an
inherent level of uncertainty, and have
limited effect on accounting judgements
and estimates for the current period.
Some physical and transition risks can
manifest in the shorter term. The
following items represent the most
signi\ufb01cant effects:
\u2022
The classi\ufb01cation of \ufb01nancial
instruments linked to climate, or
other sustainability indicators.
Consideration is given to whether the
effect of climate-related terms
prevent the instrument cash\ufb02ows
being solely payments of principal
and interest.
\u2022
The use of market indicators as
inputs to fair value is assumed to
include current information and
knowledge regarding the effect of
climate risk.
Effect of climate change in the
estimation of expected credit loss
We are monitoring the effect of the
physical and transition consequences of
climate change on our experience of loan
loss. We use available information
regarding the effect of climate transition
policy largely driven by carbon prices as
an adjustment to macroeconomic factors
that are used as inputs to the models that
generate PD and LGD outcomes, which
are key inputs to the ECL calculation. The
determination of whether speci\ufb01c loss
drivers and climate events generate
speci\ufb01c losses is ongoing and is necessary
to determine how sensitive changes in ECL
could be to climate inputs.
Future cash\ufb02ows are discounted, so long-
dated cash\ufb02ows are less likely to affect
current expectations on credit loss. Our
assessment of sector-speci\ufb01c risks, and
whether additional adjustments are
required, includes expectations of the
ability of those sectors to meet their
\ufb01nancing needs in the market. Changes in
credit stewardship and credit risk appetite
that stem from climate transition policies
may directly affect our positions.", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00211": { "value": "NatWest Group plc ", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00208": { "value": "NatWest Group plc ", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00205": { "value": "NatWest Group plc ", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00213": { "value": "plc ", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00206": { "value": " the UK", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00209": { "value": "the UK", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00212": { "value": "UK", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00218": { "value": "The audited \ufb01nancial statements include
these accounting policies, the accompanying
notes to the \ufb01nancial statements on pages
305 to 375 and the audited sections of the
Risk and capital management section on
pages 178 to 275 which together from an
integral part of the primary \ufb01nancial
statements.
The directors have prepared the \ufb01nancial
statements on a going concern basis after
assessing the principal risks, forecasts,
projections and other relevant evidence over
the twelve months from the date the \ufb01nancial
statements are approved (see the Report of
the directors) and in accordance with UK-
adopted International Accounting Standards
(IAS), and International Financial Reporting
Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB). The critical and material accounting
policies and related judgements are set out
below.", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00664": { "value": "Our consolidated \ufb01nancial statements
incorporate the results of NatWest Group plc
and the entities it controls. Control arises
when we have the power to direct the
activities of an entity so as to affect the
return from the entity. Control is assessed by
reference to our ability to enforce our will on
the other entity, typically through voting
rights. The consolidated \ufb01nancial statements
are prepared under consistent accounting
policies.
A subsidiary is included in the consolidated
\ufb01nancial statements at fair value on
acquisition from the date it is controlled by us
until the date we cease to control it through a
sale or a signi\ufb01cant change in circumstances.
Changes in our interest in a subsidiary that
do not result in us ceasing to control that
subsidiary are accounted for as equity
transactions.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00657": { "value": "How Climate risk affects our accounting judgements and estimates Business planning Key \ufb01nancial estimates are based on management's latest \ufb01ve-year revenue and cost forecasts. The outputs from this forecast affect forward-looking accounting estimates. Measurement of deferred tax and expected credit losses are highly sensitive to reasonably possible changes in those anticipated conditions. In 2024, our scenario planning was enhanced by the further integration of NatWest Group\u2019s climate transition plan, including the assessment of climate-related risks and opportunities. In 2025, our scenario planning was enhanced by the further integration of NatWest Group\u2019s climate transition plan, including the assessment of climate-related risks and opportunities. Our climate transition plan includes an \u2022 assessment of: o Changes in products, services and business operations to support customer transition towards net zero. o Financial impacts of supporting customer transition, including investment required. The linkage between our \ufb01nancial plan and our climate transition plan will continue to be developed and refreshed annually as part of the \ufb01nancial planning cycle. o The impact of UK Government policies. To estimate the impact of current UK Government policy on our climate transition plan, we developed a progress-adjusted scenario. We use the UK CCC\u2019s Seventh Carbon Budget Report\u2019s sectoral balanced pathways and apply estimated time delays based on the credibility assessment of policies from the UK CCC\u2019s June 2025 Progress Report. There remains considerable uncertainty in the climate policy environment, shaped by geopolitical developments and wider uncertainty over how the climate will evolve and how and when governments, regulators, businesses, investors and customers will respond. Information used in other accounting estimates We make use of reasonable and supportable information to make accounting judgements and estimates. This includes information about the observable effects of the physical and transition risks of climate change on the current creditworthiness of borrowers, asset values and market indicators. Many of the effects arising from climate change will be longer term in nature, with an inherent level of uncertainty, and have limited effect on accounting judgements and estimates for the current period. Some physical and transition risks can manifest in the shorter term. The following items represent the most signi\ufb01cant effects: \u2022 The classi\ufb01cation of \ufb01nancial instruments linked to climate, or other sustainability indicators. Consideration is given to whether the effect of climate-related terms prevent the instrument cash\ufb02ows being solely payments of principal and interest. \u2022 The use of market indicators as inputs to fair value is assumed to include current information and knowledge regarding the effect of climate risk. Effect of climate change in the estimation of expected credit loss We are monitoring the effect of the physical and transition consequences of climate change on our experience of loan loss. We use available information regarding the effect of climate transition policy largely driven by carbon prices as an adjustment to macroeconomic factors that are used as inputs to the models that generate PD and LGD outcomes, which are key inputs to the ECL calculation. The determination of whether speci\ufb01c loss drivers and climate events generate speci\ufb01c losses is ongoing and is necessary to determine how sensitive changes in ECL could be to climate inputs. Future cash\ufb02ows are discounted, so long- dated cash\ufb02ows are less likely to affect current expectations on credit loss. Our assessment of sector-speci\ufb01c risks, and whether additional adjustments are required, includes expectations of the ability of those sectors to meet their \ufb01nancing needs in the market. Changes in credit stewardship and credit risk appetite that stem from climate transition policies may directly affect our positions. 2. Critical accounting policies The judgements and assumptions involved in our accounting policies that are considered by the Board to be the most important to the portrayal of our \ufb01nancial condition are noted below. The use of estimates, assumptions or models that differ from those adopted by us would affect our reported results. Management\u2019s consideration of uncertainty is outlined in the relevant sections, including the ECL estimate in the Risk and capital management section. Information used for signi\ufb01cant estimate \n\n\n\t\n\t\t\n\t\t\t \u00a0\n\t\t\t \u00a0\n\t\t\n\t\n\t\n\t\t\n\t\t\t\u00a0\n\t\t\t\u00a0\n\t\t\t\u00a0\n\t\t\tFurther \n\t\t\n\t\t\n\t\t\tPolicy \n\t\t\tJudgement \n\t\t\tEstimate \n\t\t\tinformation \n\t\t\n\t\t\n\t\t\tDeferred tax \n\t\t\tDetermination of whether \n\t\t\tOur estimates are based on \n\t\t\tNote 7 \n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tsuf\ufb01cient sustainable taxable \n\t\t\tthe \ufb01ve-year revenue and cost \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tpro\ufb01ts will be generated in future \n\t\t\tforecasts (which include \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tyears to recover the deferred tax \n\t\t\tinherent uncertainties). \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tasset. \n\t\t\t\u00a0\n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\tFair value \u2013 \n\t\t\tClassi\ufb01cation of a fair value \n\t\t\tEstimation of the fair value, \n\t\t\tNote 10 \n\t\t\n\t\t\n\t\t\t\ufb01nancial \n\t\t\tinstrument as level 3, where the \n\t\t\twhere it is reasonably possible \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\tinstruments \n\t\t\tvaluation is driven by \n\t\t\tto have alternative \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tunobservable inputs. \n\t\t\tassumptions in determining the \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\t\u00a0\n\t\t\tFV. \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\tLoan \n\t\t\tDe\ufb01nition of default against which \n\t\t\tECL estimates contain a \n\t\t\tNote 14 \n\t\t\n\t\t\n\t\t\timpairment \n\t\t\tto apply PD, LGD and EAD \n\t\t\tnumber of measurement \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\tprovisions \n\t\t\tmodels. \n\t\t\tuncertainties (such as the \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tSelection of multiple economic \n\t\t\tweighting of multiple economic \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tscenarios. \n\t\t\tscenarios) and disclosures \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tCriteria for a signi\ufb01cant increase \n\t\t\tinclude sensitivities to show the \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tin credit risk. \n\t\t\timpact on other reasonably \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tIdenti\ufb01cation of risks not captured \n\t\t\tpossible scenarios. \n\t\t\t\u00a0\n\t\t\n\t\t\n\t\t\t\u00a0\n\t\t\tby the models. \n\t\t\t\u00a0\n\t\t\t\u00a0\n\t\t\n\t\n\nChanges in judgements and assumptions could result in a material adjustment to those estimates in future reporting periods. 2.1. Deferred tax Deferred tax is the estimated tax expected to be payable or recoverable in respect of temporary differences between the carrying amount of an asset or liability for accounting purposes and the carrying amount for tax purposes in the future. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent their recovery is probable. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax asset recoverability is based on the level of supporting eligible and available deferred tax liabilities we have and of our future taxable pro\ufb01ts. These future taxable pro\ufb01ts are based on our \ufb01ve-year revenue and cost forecasts and the expectation of long-term economic growth beyond this period. The \ufb01ve-year forecast takes account of management\u2019s current expectations of competitiveness and pro\ufb01tability. The long- term growth rate re\ufb02ects external indicators which will include market expectations on climate risk. We do not consider any additional adjustments to this indicator. 2.2. Fair value \u2013 \ufb01nancial instruments We measure \ufb01nancial instruments at fair value when they are classi\ufb01ed as mandatory fair value through pro\ufb01t or loss; held-for- trading; designated fair value through pro\ufb01t or loss and fair value through other comprehensive income and they are recognised in the \ufb01nancial statements at fair value. All derivatives are measured at fair value. We manage some portfolios of \ufb01nancial assets and \ufb01nancial liabilities based on our net exposure to either market or credit risk. In these cases, the fair value is derived from the net risk exposure of that portfolio with portfolio level adjustments applied to incorporate bid-offer spreads, counterparty credit risk, and funding costs (refer to \u2018Valuation Adjustments\u2019). Where the market for a \ufb01nancial instrument is not active, fair value is established using a valuation technique. These valuation techniques involve a degree of estimation, the extent of which depends on the instrument\u2019s complexity and the availability of market- based data. The complexity and uncertainty in the \ufb01nancial instrument\u2019s fair value is categorised using the fair value hierarchy. The use of market indicators as inputs to fair value is assumed to include current information and knowledge regarding the effect of climate risk. 2.3. Loan impairment provisions: expected credit losses (ECL) At each balance sheet date each \ufb01nancial asset or portfolio of \ufb01nancial assets measured at amortised cost or at fair value through other comprehensive income, issued \ufb01nancial guarantee and loan commitment (other than those classi\ufb01ed as held for trading) is assessed for impairment. Any change in impairment is reported in the income statement. Loss allowances are forward-looking, based on 12-month ECL where there has not been a signi\ufb01cant increase in credit risk rating, otherwise allowances are based on lifetime expected losses. ECL is a probability-weighted estimate of credit losses. The probability is determined by the risk of default which is applied to the cash \ufb02ow estimates. In the absence of a change in credit rating, allowances are recognised when there is a reduction in the net present value of expected cash \ufb02ows. Following a signi\ufb01cant increase in credit risk, ECL is adjusted from 12 months to lifetime. This will lead to a higher impairment charge. The measurement of expected credit loss considers the ability of borrowers to make payments as they fall due. Future cash\ufb02ows are discounted, so long-dated cash\ufb02ows are less likely to affect current expectations on credit loss. Our assessment of sector speci\ufb01c risks, and whether additional adjustments are required, include expectations of the ability of those sectors to meet their \ufb01nancing needs in the market. Changes in credit stewardship and credit risk appetite that stem from climate transition policies may directly affect our positions. Judgement is exercised as follows: \u2022 Non-modelled portfolios \u2013 under IFRS 9, there are bespoke treatments for the identi\ufb01cation of signi\ufb01cant increase in credit risk. Benchmark PDs, EADs and LGDs are reviewed annually for appropriateness. The ECL calculation is based on expected future cash \ufb02ows, which is typically applied at a portfolio level. \u2022 Multiple economic scenarios (MES) \u2013 the central, or base, scenario is most critical to the ECL calculation, independent of the method used to generate a range of alternative outcomes and their probabilities. \u2022 Signi\ufb01cant increase in credit risk \u2013 IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased signi\ufb01cantly since initial recognition. Part of this assessment requires a comparison to be made between the current lifetime PD (i.e. the current probability of default over the remaining lifetime) with the equivalent lifetime PD as determined at the date of initial recognition. On restructuring where a \ufb01nancial asset is not derecognised, the revised cash \ufb02ows are used in re-estimating the credit loss. Where restructuring causes derecognition of the original \ufb01nancial asset, the fair value of the replacement asset is used as the closing cash \ufb02ow of the original asset. Where in the course of the orderly realisation of a loan, it is exchanged for equity shares or property, the exchange is accounted for as the sale of the loan and the acquisition of equity securities or investment property. Where our acquired interest is in equity shares, relevant policies for control, associates and joint ventures apply. Impaired \ufb01nancial assets are written off and therefore derecognised from the balance sheet when we conclude that there is no longer any realistic prospect of recovery of part, or all, of the loan. For \ufb01nancial assets that are individually assessed for impairment, the timing of the write-off is determined on a case-by-case basis. Such \ufb01nancial assets are reviewed regularly and write-off will be prompted by bankruptcy, insolvency, renegotiation, and similar events. The typical time frames from initial impairment to write-off for our collectively assessed portfolios are: \u2022 Retail mortgages: write-off usually occurs within \ufb01ve years, or earlier, when an account is closed, but can be longer where the customer engages constructively; \u2022 Credit cards: the irrecoverable amount is typically written off after twelve arrears cycles or at four years post default any remaining amounts outstanding are written off; \u2022 Overdrafts and other unsecured loans: write-off occurs within six years; \u2022 Commercial loans: write-offs are determined in the light of individual circumstances; and uncollateralised impaired business loans are generally written off within \ufb01ve years.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00658": { "value": "2. Critical accounting policies
The judgements and assumptions involved in our accounting policies that are considered by the Board to
be the most important to the portrayal of our \ufb01nancial condition are noted below. The use of estimates,
assumptions or models that differ from those adopted by us would affect our reported results.
Management\u2019s consideration of uncertainty is outlined in the relevant sections, including the ECL
estimate in the Risk and capital management section.
Information used for signi\ufb01cant estimate
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0
Further
Policy
Judgement
Estimate
information
Deferred tax
Determination of whether
Our estimates are based on
Note 7
\u00a0
suf\ufb01cient sustainable taxable
the \ufb01ve-year revenue and cost
\u00a0
\u00a0
pro\ufb01ts will be generated in future
forecasts (which include
\u00a0
\u00a0
years to recover the deferred tax
inherent uncertainties).
\u00a0
\u00a0
asset.
\u00a0\u00a0
Fair value \u2013
Classi\ufb01cation of a fair value
Estimation of the fair value,
Note 10
\ufb01nancial
instrument as level 3, where the
where it is reasonably possible
\u00a0
instruments
valuation is driven by
to have alternative
\u00a0
\u00a0
unobservable inputs.
assumptions in determining the
\u00a0
\u00a0\u00a0
FV.
\u00a0
Loan
De\ufb01nition of default against which
ECL estimates contain a
Note 14
impairment
to apply PD, LGD and EAD
number of measurement
\u00a0
provisions
models.
uncertainties (such as the
\u00a0
\u00a0
Selection of multiple economic
weighting of multiple economic
\u00a0
\u00a0
scenarios.
scenarios) and disclosures
\u00a0
\u00a0
Criteria for a signi\ufb01cant increase
include sensitivities to show the
\u00a0
\u00a0
in credit risk.
impact on other reasonably
\u00a0
\u00a0
Identi\ufb01cation of risks not captured
possible scenarios.
\u00a0
\u00a0
by the models.
\u00a0\u00a0
\n
Changes in judgements and assumptions could result in a material adjustment to those estimates in
future reporting periods.
2.1. Deferred tax
Deferred tax is the estimated tax expected to
be payable or recoverable in respect of
temporary differences between the carrying
amount of an asset or liability for accounting
purposes and the carrying amount for tax
purposes in the future. Deferred tax liabilities
are generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent their
recovery is probable.
Deferred tax is calculated using tax rates
expected to apply in the periods when the
assets will be realised or the liabilities settled,
based on tax rates and laws enacted, or
substantively enacted, at the balance sheet
date.
Deferred tax asset recoverability is based on
the level of supporting eligible and available
deferred tax liabilities we have and of our
future taxable pro\ufb01ts. These future taxable
pro\ufb01ts are based on our \ufb01ve-year revenue
and cost forecasts and the expectation of
long-term economic growth beyond this
period. The \ufb01ve-year forecast takes account
of management\u2019s current expectations of
competitiveness and pro\ufb01tability. The long-
term growth rate re\ufb02ects external indicators
which will include market expectations on
climate risk. We do not consider any
additional adjustments to this indicator.
2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.
2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.Accounting Assumptions
Placing a value on NatWest Group\u2019s de\ufb01ned bene\ufb01t pension schemes\u2019 liabilities requires NatWest
\n
Group\u2019s management to make a number of assumptions, with the support of independent
\n
actuaries. The ultimate cost of the de\ufb01ned bene\ufb01t obligations depends upon actual future events
\n
and the assumptions made are unlikely to be exactly borne out in practice, meaning the \ufb01nal
\n
cost may be higher or lower than expected.
\n
The most signi\ufb01cant assumptions used for the Main section are shown below:
Principal IAS 19 actuarial assumptions
(1)
2025
2024
%
%
Discount rate
5.7
5.6
Inflation assumption (RPI)
2.9
3.2
Rate of increase in salaries
1.8
1.8
Rate of increase in deferred pensions
2.9
3.4
Rate of increase in pensions in payment
2.4
2.6
Lump sum conversion rate at retirement
18.0
18.0
Longevity at age 60:
years
years
Current pensioners
Males
26.9
26.5
Females
28.6
28.5
Future pensioners, currently aged 40
Males
27.9
27.5
Females
29.9
29.7
\n
(1)
The above financial assumptions are long-term assumptions set with reference to the period over which the obligations are expected to be
\nsettled. Signi\ufb01cant judgement is required when setting the criteria for bonds to be included in the basket of bonds that is used to determine the discount rate used in the IAS 19 valuations. The criteria include
issue size, quality of pricing and the exclusion of outliers. Judgement is also required in determining the shape of the yield curve at long durations; a constant credit spread relative to gilts is assumed.
Sensitivity to the main assumptions is presented below.Judgement: tax contingencies
NatWest Group\u2019s corporate income tax charge and its provisions for corporate income taxes necessarily involve a 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. Any difference between the \ufb01nal outcome and the amounts provided will affect current and deferred income tax
charges in the period when the matter is resolved. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Critical accounting policy: Deferred tax
NatWest Group has recognised a deferred tax asset of \u00a31,252 million (2024 - \u00a31,876 million) and
a deferred tax liability of \u00a3104 million (2024 - \u00a399 million). These include amounts recognised in
respect of UK and overseas tax losses of \u00a3814 million (2024 - \u00a31,106 million).
Judgement
\u2013
NatWest Group has considered the carrying value of deferred tax assets and
concluded that, based on management\u2019s estimates, suf\ufb01cient sustainable taxable pro\ufb01ts will be
generated in future years to recover recognised deferred tax assets.
Estimates
\u2013
For entities with mature business models and a longer track record of pro\ufb01tability
and stable earnings, these estimates are partly based on forecast performance beyond the
horizon for management\u2019s detailed plans. They have regard to inherent uncertainties. The
deferred tax asset in Ulydien DAC is supported substantially by future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025.Judgement: classi\ufb01cation of \ufb01nancial assets
Classi\ufb01cation of \ufb01nancial assets between amortised cost and fair
value through other comprehensive income requires a degree of
judgement in respect of business models and contractual
cash\ufb02ows.
\u2022
The business model criteria are assessed at a portfolio level
to determine whether assets are classi\ufb01ed as held to collect
or held to collect and sell. Information that is considered in
determining the applicable business model includes: the
portfolio\u2019s policies and objectives; how the performance and
risks of the portfolio are managed, evaluated and reported
to management; and the frequency, volume and timing of
sales in prior periods, sales expectation for future periods,
and the reasons for sales.
\u2022
The contractual cash \ufb02ow characteristics of \ufb01nancial assets
are assessed with reference to whether the cash \ufb02ows
represent solely payments of principal and interest (SPPI). A
level of judgement is made in assessing terms that could
change the contractual cash \ufb02ows so that it would not meet
the condition for SPPI, including contingent and leverage
features, non-recourse arrangements and features that
could modify the time value of money.
For accounting policy information refer to Accounting policies
3.8, 3.9 and 3.11.Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.Key areas of judgement
Over the years the business has simpli\ufb01ed,
with most products classi\ufb01ed as level 1 or 2
of the fair value hierarchy. However, the
diverse range of products historically traded
by NatWest Group means some products
remain classi\ufb01ed as level 3. Level 3 indicates
a signi\ufb01cant level of pricing uncertainty,
where expert judgement is used. As such,
extra disclosures are required in respect of
level 3 instruments.
In general, the degree of expert judgement
used and hence valuation uncertainty
depends on the degree of liquidity of an
instrument or input.
Where markets are liquid, little judgement is
required. However, when the information
regarding the liquidity in a particular market
is not clear, a judgement may need to be
made. For example, for an equity traded on
an exchange, daily volumes of trading can be
seen, but for an OTC derivative, assessing
the liquidity of the market with no central
exchange is more challenging.
The breadth and depth of the IPV data allows
for a rules-based quality assessment to be
made of market activity, liquidity, and pricing
uncertainty, which assists with the process of
allocation to an appropriate level. Where
suitable independent pricing information is
not readily available, the quality assessment
will result in the instrument being assessed as
level 3.Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section. 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 out\ufb02ow of economic bene\ufb01t is probable and the out\ufb02ow can
be estimated reliably. Any difference between the \ufb01nal 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 3.12.
Background information on all material provisions is given in Note 25
. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00631": { "value": "2.1. Deferred tax
Deferred tax is the estimated tax expected to
be payable or recoverable in respect of
temporary differences between the carrying
amount of an asset or liability for accounting
purposes and the carrying amount for tax
purposes in the future. Deferred tax liabilities
are generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent their
recovery is probable.
Deferred tax is calculated using tax rates
expected to apply in the periods when the
assets will be realised or the liabilities settled,
based on tax rates and laws enacted, or
substantively enacted, at the balance sheet
date.
Deferred tax asset recoverability is based on
the level of supporting eligible and available
deferred tax liabilities we have and of our
future taxable pro\ufb01ts. These future taxable
pro\ufb01ts are based on our \ufb01ve-year revenue
and cost forecasts and the expectation of
long-term economic growth beyond this
period. The \ufb01ve-year forecast takes account
of management\u2019s current expectations of
competitiveness and pro\ufb01tability. The long-
term growth rate re\ufb02ects external indicators
which will include market expectations on
climate risk. We do not consider any
additional adjustments to this indicator.3.7. Tax
Tax encompassing current tax and deferred
tax is recognised in the income statement
except when taxable items are recognised in
other comprehensive income or equity. Tax
consequences arising from servicing \ufb01nancial
instruments classi\ufb01ed as equity are
recognised in the income statement.
Accounting for taxes is judgemental and
carries a degree of uncertainty because tax
law is subject to interpretation, which might
be questioned by the relevant tax authority.
We recognise the most likely current and
deferred tax liability or asset, assessed for
uncertainty using consistent judgements and
estimates. Current and deferred tax assets
are only recognised where their recovery is
deemed probable, and current and deferred
tax liabilities are recognised at the amount
that represents the best estimate of the
probable outcome having regard to their
acceptance by the tax authorities.Judgement: tax contingencies
NatWest Group\u2019s corporate income tax charge and its provisions for corporate income taxes necessarily involve a 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. Any difference between the \ufb01nal outcome and the amounts provided will affect current and deferred income tax
charges in the period when the matter is resolved. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Critical accounting policy: Deferred tax
NatWest Group has recognised a deferred tax asset of \u00a31,252 million (2024 - \u00a31,876 million) and
a deferred tax liability of \u00a3104 million (2024 - \u00a399 million). These include amounts recognised in
respect of UK and overseas tax losses of \u00a3814 million (2024 - \u00a31,106 million).
Judgement
\u2013
NatWest Group has considered the carrying value of deferred tax assets and
concluded that, based on management\u2019s estimates, suf\ufb01cient sustainable taxable pro\ufb01ts will be
generated in future years to recover recognised deferred tax assets.
Estimates
\u2013
For entities with mature business models and a longer track record of pro\ufb01tability
and stable earnings, these estimates are partly based on forecast performance beyond the
horizon for management\u2019s detailed plans. They have regard to inherent uncertainties. The
deferred tax asset in Ulydien DAC is supported substantially by future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00630": { "value": "2.1. Deferred tax
Deferred tax is the estimated tax expected to
be payable or recoverable in respect of
temporary differences between the carrying
amount of an asset or liability for accounting
purposes and the carrying amount for tax
purposes in the future. Deferred tax liabilities
are generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent their
recovery is probable.
Deferred tax is calculated using tax rates
expected to apply in the periods when the
assets will be realised or the liabilities settled,
based on tax rates and laws enacted, or
substantively enacted, at the balance sheet
date.
Deferred tax asset recoverability is based on
the level of supporting eligible and available
deferred tax liabilities we have and of our
future taxable pro\ufb01ts. These future taxable
pro\ufb01ts are based on our \ufb01ve-year revenue
and cost forecasts and the expectation of
long-term economic growth beyond this
period. The \ufb01ve-year forecast takes account
of management\u2019s current expectations of
competitiveness and pro\ufb01tability. The long-
term growth rate re\ufb02ects external indicators
which will include market expectations on
climate risk. We do not consider any
additional adjustments to this indicator.3.7. Tax
Tax encompassing current tax and deferred
tax is recognised in the income statement
except when taxable items are recognised in
other comprehensive income or equity. Tax
consequences arising from servicing \ufb01nancial
instruments classi\ufb01ed as equity are
recognised in the income statement.
Accounting for taxes is judgemental and
carries a degree of uncertainty because tax
law is subject to interpretation, which might
be questioned by the relevant tax authority.
We recognise the most likely current and
deferred tax liability or asset, assessed for
uncertainty using consistent judgements and
estimates. Current and deferred tax assets
are only recognised where their recovery is
deemed probable, and current and deferred
tax liabilities are recognised at the amount
that represents the best estimate of the
probable outcome having regard to their
acceptance by the tax authorities.Judgement: tax contingencies
NatWest Group\u2019s corporate income tax charge and its provisions for corporate income taxes necessarily involve a 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. Any difference between the \ufb01nal outcome and the amounts provided will affect current and deferred income tax
charges in the period when the matter is resolved. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Critical accounting policy: Deferred tax
NatWest Group has recognised a deferred tax asset of \u00a31,252 million (2024 - \u00a31,876 million) and
a deferred tax liability of \u00a3104 million (2024 - \u00a399 million). These include amounts recognised in
respect of UK and overseas tax losses of \u00a3814 million (2024 - \u00a31,106 million).
Judgement
\u2013
NatWest Group has considered the carrying value of deferred tax assets and
concluded that, based on management\u2019s estimates, suf\ufb01cient sustainable taxable pro\ufb01ts will be
generated in future years to recover recognised deferred tax assets.
Estimates
\u2013
For entities with mature business models and a longer track record of pro\ufb01tability
and stable earnings, these estimates are partly based on forecast performance beyond the
horizon for management\u2019s detailed plans. They have regard to inherent uncertainties. The
deferred tax asset in Ulydien DAC is supported substantially by future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00238": { "value": "2.1. Deferred tax
Deferred tax is the estimated tax expected to
be payable or recoverable in respect of
temporary differences between the carrying
amount of an asset or liability for accounting
purposes and the carrying amount for tax
purposes in the future. Deferred tax liabilities
are generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent their
recovery is probable.
Deferred tax is calculated using tax rates
expected to apply in the periods when the
assets will be realised or the liabilities settled,
based on tax rates and laws enacted, or
substantively enacted, at the balance sheet
date.
Deferred tax asset recoverability is based on
the level of supporting eligible and available
deferred tax liabilities we have and of our
future taxable pro\ufb01ts. These future taxable
pro\ufb01ts are based on our \ufb01ve-year revenue
and cost forecasts and the expectation of
long-term economic growth beyond this
period. The \ufb01ve-year forecast takes account
of management\u2019s current expectations of
competitiveness and pro\ufb01tability. The long-
term growth rate re\ufb02ects external indicators
which will include market expectations on
climate risk. We do not consider any
additional adjustments to this indicator.3.7. Tax
Tax encompassing current tax and deferred
tax is recognised in the income statement
except when taxable items are recognised in
other comprehensive income or equity. Tax
consequences arising from servicing \ufb01nancial
instruments classi\ufb01ed as equity are
recognised in the income statement.
Accounting for taxes is judgemental and
carries a degree of uncertainty because tax
law is subject to interpretation, which might
be questioned by the relevant tax authority.
We recognise the most likely current and
deferred tax liability or asset, assessed for
uncertainty using consistent judgements and
estimates. Current and deferred tax assets
are only recognised where their recovery is
deemed probable, and current and deferred
tax liabilities are recognised at the amount
that represents the best estimate of the
probable outcome having regard to their
acceptance by the tax authorities.7 Tax
NatWest Group\u2019s corporate income tax charge for the period is set out below, together with a reconciliation to the expected tax charge calculated using the UK standard corporation tax rate and
details of the NatWest Group\u2019s deferred tax balances.
For accounting policy information refer to Accounting policies 2.1 and 3.7.
Analysis of the tax charge for the year
The tax charge comprises current and deferred tax in respect of pro\ufb01ts and losses recognised or originating in the income statement. Tax on items originating outside the income statement is
charged to other comprehensive income or direct to equity (as appropriate) and is therefore not re\ufb02ected in the table below.
Current tax is tax payable or recoverable in respect of the taxable pro\ufb01t or loss for the year and any adjustments to tax payable in prior years. Deferred tax is explained on page 323.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Current tax
\u00a0 \u00a0 \u00a0
Charge for the year
(1,511)
(1,415)
(1,373)
Over/(under) provision in respect of prior years
110
(145)
(123)
\u00a0
(1,401)
(1,560)
(1,496)
Deferred tax
\u00a0 \u00a0 \u00a0
Charge for the year
(548)
(343)
(281)
Net increase in the carrying value of deferred tax assets in respect of losses
119
428
385
(Under)/over provision in respect of prior years
(44)
10
(42)
Tax charge for the year
(1,874)
(1,465)
(1,434)
\n
Factors affecting the tax charge for the year
Taxable pro\ufb01ts differ from pro\ufb01ts reported in the income statement as certain amounts of income and expense may not be taxable or deductible. In addition, taxable pro\ufb01ts may re\ufb02ect items that have
been included outside the income statement (for instance, in other comprehensive income) or adjustments that are made for tax purposes only.
Current tax for the year ended 31 December 2025 is based on rates of 25% for the standard rate of UK corporation tax and 3% for the UK banking surcharge.
The expected tax charge for the year is calculated by applying the standard UK corporation tax rate of 25% (2024 \u2013 25% and 2023 \u2013 23.5%) to the Operating pro\ufb01t or loss before tax in the income
statement.
The actual tax charge differs from the expected tax charge as follows:
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Expected tax charge
(1,927)
(1,549)
(1,452)
Losses and temporary differences in year where no deferred tax asset recognised
(5)
(18)
(56)
Foreign profits and losses taxed at other rates
15
37
10
Items not allowed for tax:
\u00a0 \u00a0 \u00a0
- losses on disposals and write-downs
(10)
(22)
(63)
- UK bank levy
(30)
(31)
(27)
- regulatory and legal actions
4
(47)
(1)
- other disallowable items
(28)
(61)
(57)
Non-taxable items:
\u00a0 \u00a0 \u00a0
- foreign exchange recycling on capital reduction
10
-
114
- RPI-related uplift on index linked gilts
8
18
6
- dividends
15
-
-
- other non-taxable items
34
11
20
Taxable foreign exchange movements
(6)
7
9
Unrecognised losses brought forward and utilised
18
33
27
Net increase/(decrease) in the carrying value of deferred tax assets in respect of:
\u00a0 \u00a0 \u00a0
- UK losses
59
378
371
- Netherlands losses
58
50
15
- Other overseas losses
2
-
(1)
Banking surcharge
(198)
(169)
(236)
Pillar 2 top-up tax
-
(20)
-
Redemption of AT1 (paid-in equity) capital notes
(46)
-
-
Tax on AT1 (paid-in equity) dividends
87
53
52
Adjustments in respect of prior years
(1)
66
(135)
(165)
Actual tax charge
(1,874)
(1,465)
(1,434)
\n
(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.
Global minimum top-up tax
The Group is subject to the global minimum top-up tax under Pillar Two tax legislation. The Group recognised no current tax expense related to the top-up tax for 2025 (2024 - \u00a320 million) due to
suf\ufb01cient taxes being paid in the Group\u2019s jurisdictions under local tax rules.
The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.
Judgement: tax contingencies
NatWest Group\u2019s corporate income tax charge and its provisions for corporate income taxes necessarily involve a 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. Any difference between the \ufb01nal outcome and the amounts provided will affect current and deferred income tax
charges in the period when the matter is resolved. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice.
\n\n\n
Deferred tax
\n
Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences where the carrying amount of an asset or liability differs for accounting and tax purposes.
\n
Deferred tax liabilities re\ufb02ect the expected amount of tax payable in the future on these temporary differences. Deferred tax assets re\ufb02ect the expected amount of tax recoverable in the
\n
future on these differences.
\n
The net deferred tax asset recognised by NatWest Group is shown below, together with details of the accounting judgements and tax rates that have been used to calculate the deferred tax.
\n
Details are also provided of any deferred tax assets or liabilities that have not been recognised on the balance sheet.
\n
Analysis of deferred tax
\n\n \n
2025
2024
\u00a3m
\u00a3m
Deferred tax asset
1,252
1,876
Deferred tax liability
(104)
(99)
Net deferred tax asset
1,148
1,777
\n\n \n
Accelerated
Tax losses
capital
Expense
Financial
carried forward
Pension
allowances
provisions
instruments (1)
Other
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2024
(16)
76
61
538
1,019
75
1,753
Credit/(charge) to income statement:
- continuing operations
3
85
16
(57)
90
(42)
95
(Charge)/credit to other comprehensive income
(15)
-
-
(77)
-
26
(66)
Currency translation and other adjustments
(1)
-
-
(1)
(3)
-
(5)
At 1 January 2025
(29)
161
77
403
1,106
59
1,777
Charge to income statement:
- continuing operations
(6)
(35)
(19)
(115)
(297)
(1)
(473)
(Charge)/credit to other comprehensive income
(6)
-
-
(166)
-
15
(157)
Currency translation and other adjustments
(1)
(3)
-
-
5
-
1
At 31 December 2025
(42)
123
58
122
814
73
1,148
(1)
The in-year movement predominantly relates to cash flow hedges.
Deferred tax assets in respect of carried forward tax losses are recognised if the losses can be
used to offset probable future taxable pro\ufb01ts after taking into account the expected reversal of
other temporary differences. Recognised deferred tax assets in respect of tax losses are analysed
further below.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
UK tax losses carried forward
\u00a0 \u00a0
- NWB Plc
55
333
- RBS plc
622
685
Total
677
1,018
Overseas tax losses carried forward
\u00a0 \u00a0
- Ulydien DAC
5
5
- NWM N.V.
132
83
\u00a0
814
1,106
\n
Critical accounting policy: Deferred tax
NatWest Group has recognised a deferred tax asset of \u00a31,252 million (2024 - \u00a31,876 million) and
a deferred tax liability of \u00a3104 million (2024 - \u00a399 million). These include amounts recognised in
respect of UK and overseas tax losses of \u00a3814 million (2024 - \u00a31,106 million).
Judgement
\u2013
NatWest Group has considered the carrying value of deferred tax assets and
concluded that, based on management\u2019s estimates, suf\ufb01cient sustainable taxable pro\ufb01ts will be
generated in future years to recover recognised deferred tax assets.
Estimates
\u2013
For entities with mature business models and a longer track record of pro\ufb01tability
and stable earnings, these estimates are partly based on forecast performance beyond the
horizon for management\u2019s detailed plans. They have regard to inherent uncertainties. The
deferred tax asset in Ulydien DAC is supported substantially by future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025.
UK tax losses
Under UK tax rules, tax losses can be carried forward inde\ufb01nitely. As the recognised tax losses in
NatWest Group arose prior to 1 April 2015, credit in future periods is given against 25% of pro\ufb01ts
at the main rate of UK corporation tax, excluding the Banking Surcharge.
NWM Plc
\u2013 Losses of \u00a35,553 million have not been recognised in the deferred tax balance at 31
December 2025.
NWB Plc
\u2013
A deferred tax asset of \u00a355 million (2024 - \u00a3333 million) has been recognised in
respect of losses of \u00a3220 million of total losses of \u00a31,036 million carried forward at 31 December
2025. NWB Plc expects the deferred tax asset to be utilised against future taxable pro\ufb01ts by the
end of 2032.
RBS plc
\u2013
A deferred tax asset of \u00a3622 million (2024 - \u00a3685 million) has been recognised in
respect of losses of \u00a32,489 million carried forward at 31 December 2025. The losses were
transferred from NatWest Markets Plc as a consequence of the ring fencing regulations. RBS plc
expects the deferred tax asset to be utilised against future taxable pro\ufb01ts by the end of 2032.
Overseas tax losses
Ulydien DAC
\u2013
A deferred tax asset of \u00a35 million (2024 - \u00a35 million) has been recognised in
respect of losses of \u00a340 million, and is now entirely supported by way of future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025. The
ability to set off unutilised RoI losses of \u00a310,262 million against future taxable pro\ufb01ts will cease
following the Group\u2019s full exit of business operations in RoI.
NatWest Markets N.V. (NWM N.V.)
\u2013
A deferred tax asset of \u00a3132 million (2024 - \u00a383 million) has
been recognised in respect of losses and tax credits of \u00a3512 million of total losses of \u00a32,371
million carried forward at 31 December 2025. NWM N.V. expects the deferred tax asset to be
utilised against future taxable pro\ufb01ts by the end of 2032. The tax losses and tax credits have no
expiry date.
Unrecognised deferred tax
Deferred tax assets of \u00a34,882 million (2024 - \u00a34,960 million; 2023 - \u00a35,168 million) have not been
recognised in respect of tax losses and other deductible temporary differences carried forward of
\u00a323,385 million (2024 - \u00a323,238 million; 2023 - \u00a324,438 million) in jurisdictions where doubt exists
over the availability of future taxable pro\ufb01ts. Of these losses and other deductible temporary
differences, \u00a34,176 million expire after 10 years. The balance of tax losses and other deductible
temporary differences carried forward has no expiry date.
Deferred tax liabilities of \u00a3258 million (2024 - \u00a3269 million; 2023 - \u00a3256 million) on aggregate
underlying temporary differences of \u00a31,022 million (2024 - \u00a31,241 million; 2023 - \u00a31,005 million)
have not been recognised in respect of retained earnings of overseas subsidiaries and held-over
gains on the incorporation of certain overseas branches. These retained earnings are expected to
be reinvested inde\ufb01nitely or remitted to the UK free from further taxation. No taxation is expected
to arise in the foreseeable future in respect of held-over gains on which deferred tax is not
recognised. UK tax legislation largely exempts from UK tax overseas dividends received. 17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00237": { "value": "2.1. Deferred tax
Deferred tax is the estimated tax expected to
be payable or recoverable in respect of
temporary differences between the carrying
amount of an asset or liability for accounting
purposes and the carrying amount for tax
purposes in the future. Deferred tax liabilities
are generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent their
recovery is probable.
Deferred tax is calculated using tax rates
expected to apply in the periods when the
assets will be realised or the liabilities settled,
based on tax rates and laws enacted, or
substantively enacted, at the balance sheet
date.
Deferred tax asset recoverability is based on
the level of supporting eligible and available
deferred tax liabilities we have and of our
future taxable pro\ufb01ts. These future taxable
pro\ufb01ts are based on our \ufb01ve-year revenue
and cost forecasts and the expectation of
long-term economic growth beyond this
period. The \ufb01ve-year forecast takes account
of management\u2019s current expectations of
competitiveness and pro\ufb01tability. The long-
term growth rate re\ufb02ects external indicators
which will include market expectations on
climate risk. We do not consider any
additional adjustments to this indicator. 3.7. Tax
Tax encompassing current tax and deferred
tax is recognised in the income statement
except when taxable items are recognised in
other comprehensive income or equity. Tax
consequences arising from servicing \ufb01nancial
instruments classi\ufb01ed as equity are
recognised in the income statement.
Accounting for taxes is judgemental and
carries a degree of uncertainty because tax
law is subject to interpretation, which might
be questioned by the relevant tax authority.
We recognise the most likely current and
deferred tax liability or asset, assessed for
uncertainty using consistent judgements and
estimates. Current and deferred tax assets
are only recognised where their recovery is
deemed probable, and current and deferred
tax liabilities are recognised at the amount
that represents the best estimate of the
probable outcome having regard to their
acceptance by the tax authorities.7 Tax
NatWest Group\u2019s corporate income tax charge for the period is set out below, together with a reconciliation to the expected tax charge calculated using the UK standard corporation tax rate and
details of the NatWest Group\u2019s deferred tax balances.
For accounting policy information refer to Accounting policies 2.1 and 3.7.
Analysis of the tax charge for the year
The tax charge comprises current and deferred tax in respect of pro\ufb01ts and losses recognised or originating in the income statement. Tax on items originating outside the income statement is
charged to other comprehensive income or direct to equity (as appropriate) and is therefore not re\ufb02ected in the table below.
Current tax is tax payable or recoverable in respect of the taxable pro\ufb01t or loss for the year and any adjustments to tax payable in prior years. Deferred tax is explained on page 323.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Current tax
\u00a0 \u00a0 \u00a0
Charge for the year
(1,511)
(1,415)
(1,373)
Over/(under) provision in respect of prior years
110
(145)
(123)
\u00a0
(1,401)
(1,560)
(1,496)
Deferred tax
\u00a0 \u00a0 \u00a0
Charge for the year
(548)
(343)
(281)
Net increase in the carrying value of deferred tax assets in respect of losses
119
428
385
(Under)/over provision in respect of prior years
(44)
10
(42)
Tax charge for the year
(1,874)
(1,465)
(1,434)
\n
Factors affecting the tax charge for the year
Taxable pro\ufb01ts differ from pro\ufb01ts reported in the income statement as certain amounts of income and expense may not be taxable or deductible. In addition, taxable pro\ufb01ts may re\ufb02ect items that have
been included outside the income statement (for instance, in other comprehensive income) or adjustments that are made for tax purposes only.
Current tax for the year ended 31 December 2025 is based on rates of 25% for the standard rate of UK corporation tax and 3% for the UK banking surcharge.
The expected tax charge for the year is calculated by applying the standard UK corporation tax rate of 25% (2024 \u2013 25% and 2023 \u2013 23.5%) to the Operating pro\ufb01t or loss before tax in the income
statement.
The actual tax charge differs from the expected tax charge as follows:
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Expected tax charge
(1,927)
(1,549)
(1,452)
Losses and temporary differences in year where no deferred tax asset recognised
(5)
(18)
(56)
Foreign profits and losses taxed at other rates
15
37
10
Items not allowed for tax:
\u00a0 \u00a0 \u00a0
- losses on disposals and write-downs
(10)
(22)
(63)
- UK bank levy
(30)
(31)
(27)
- regulatory and legal actions
4
(47)
(1)
- other disallowable items
(28)
(61)
(57)
Non-taxable items:
\u00a0 \u00a0 \u00a0
- foreign exchange recycling on capital reduction
10
-
114
- RPI-related uplift on index linked gilts
8
18
6
- dividends
15
-
-
- other non-taxable items
34
11
20
Taxable foreign exchange movements
(6)
7
9
Unrecognised losses brought forward and utilised
18
33
27
Net increase/(decrease) in the carrying value of deferred tax assets in respect of:
\u00a0 \u00a0 \u00a0
- UK losses
59
378
371
- Netherlands losses
58
50
15
- Other overseas losses
2
-
(1)
Banking surcharge
(198)
(169)
(236)
Pillar 2 top-up tax
-
(20)
-
Redemption of AT1 (paid-in equity) capital notes
(46)
-
-
Tax on AT1 (paid-in equity) dividends
87
53
52
Adjustments in respect of prior years
(1)
66
(135)
(165)
Actual tax charge
(1,874)
(1,465)
(1,434)
\n
(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.
Global minimum top-up tax
The Group is subject to the global minimum top-up tax under Pillar Two tax legislation. The Group recognised no current tax expense related to the top-up tax for 2025 (2024 - \u00a320 million) due to
suf\ufb01cient taxes being paid in the Group\u2019s jurisdictions under local tax rules.
The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.
Judgement: tax contingencies
NatWest Group\u2019s corporate income tax charge and its provisions for corporate income taxes necessarily involve a 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. Any difference between the \ufb01nal outcome and the amounts provided will affect current and deferred income tax
charges in the period when the matter is resolved. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice.
Deferred tax
\n
Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences where the carrying amount of an asset or liability differs for accounting and tax purposes.
\n
Deferred tax liabilities re\ufb02ect the expected amount of tax payable in the future on these temporary differences. Deferred tax assets re\ufb02ect the expected amount of tax recoverable in the
\n
future on these differences.
\n
The net deferred tax asset recognised by NatWest Group is shown below, together with details of the accounting judgements and tax rates that have been used to calculate the deferred tax.
\n
Details are also provided of any deferred tax assets or liabilities that have not been recognised on the balance sheet.
\n
Analysis of deferred tax
\n\n \n
2025
2024
\u00a3m
\u00a3m
Deferred tax asset
1,252
1,876
Deferred tax liability
(104)
(99)
Net deferred tax asset
1,148
1,777
\n\n \n
Accelerated
Tax losses
capital
Expense
Financial
carried forward
Pension
allowances
provisions
instruments (1)
Other
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2024
(16)
76
61
538
1,019
75
1,753
Credit/(charge) to income statement:
- continuing operations
3
85
16
(57)
90
(42)
95
(Charge)/credit to other comprehensive income
(15)
-
-
(77)
-
26
(66)
Currency translation and other adjustments
(1)
-
-
(1)
(3)
-
(5)
At 1 January 2025
(29)
161
77
403
1,106
59
1,777
Charge to income statement:
- continuing operations
(6)
(35)
(19)
(115)
(297)
(1)
(473)
(Charge)/credit to other comprehensive income
(6)
-
-
(166)
-
15
(157)
Currency translation and other adjustments
(1)
(3)
-
-
5
-
1
At 31 December 2025
(42)
123
58
122
814
73
1,148
(1)
The in-year movement predominantly relates to cash flow hedges.
Deferred tax assets in respect of carried forward tax losses are recognised if the losses can be
used to offset probable future taxable pro\ufb01ts after taking into account the expected reversal of
other temporary differences. Recognised deferred tax assets in respect of tax losses are analysed
further below.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
UK tax losses carried forward
\u00a0 \u00a0
- NWB Plc
55
333
- RBS plc
622
685
Total
677
1,018
Overseas tax losses carried forward
\u00a0 \u00a0
- Ulydien DAC
5
5
- NWM N.V.
132
83
\u00a0
814
1,106
\n
Critical accounting policy: Deferred tax
NatWest Group has recognised a deferred tax asset of \u00a31,252 million (2024 - \u00a31,876 million) and
a deferred tax liability of \u00a3104 million (2024 - \u00a399 million). These include amounts recognised in
respect of UK and overseas tax losses of \u00a3814 million (2024 - \u00a31,106 million).
Judgement
\u2013
NatWest Group has considered the carrying value of deferred tax assets and
concluded that, based on management\u2019s estimates, suf\ufb01cient sustainable taxable pro\ufb01ts will be
generated in future years to recover recognised deferred tax assets.
Estimates
\u2013
For entities with mature business models and a longer track record of pro\ufb01tability
and stable earnings, these estimates are partly based on forecast performance beyond the
horizon for management\u2019s detailed plans. They have regard to inherent uncertainties. The
deferred tax asset in Ulydien DAC is supported substantially by future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025.
UK tax losses
Under UK tax rules, tax losses can be carried forward inde\ufb01nitely. As the recognised tax losses in
NatWest Group arose prior to 1 April 2015, credit in future periods is given against 25% of pro\ufb01ts
at the main rate of UK corporation tax, excluding the Banking Surcharge.
NWM Plc
\u2013 Losses of \u00a35,553 million have not been recognised in the deferred tax balance at 31
December 2025.
NWB Plc
\u2013
A deferred tax asset of \u00a355 million (2024 - \u00a3333 million) has been recognised in
respect of losses of \u00a3220 million of total losses of \u00a31,036 million carried forward at 31 December
2025. NWB Plc expects the deferred tax asset to be utilised against future taxable pro\ufb01ts by the
end of 2032.
RBS plc
\u2013
A deferred tax asset of \u00a3622 million (2024 - \u00a3685 million) has been recognised in
respect of losses of \u00a32,489 million carried forward at 31 December 2025. The losses were
transferred from NatWest Markets Plc as a consequence of the ring fencing regulations. RBS plc
expects the deferred tax asset to be utilised against future taxable pro\ufb01ts by the end of 2032.
Overseas tax losses
Ulydien DAC
\u2013
A deferred tax asset of \u00a35 million (2024 - \u00a35 million) has been recognised in
respect of losses of \u00a340 million, and is now entirely supported by way of future reversing taxable
temporary differences on which deferred tax liabilities are recognised at 31 December 2025. The
ability to set off unutilised RoI losses of \u00a310,262 million against future taxable pro\ufb01ts will cease
following the Group\u2019s full exit of business operations in RoI.
NatWest Markets N.V. (NWM N.V.)
\u2013
A deferred tax asset of \u00a3132 million (2024 - \u00a383 million) has
been recognised in respect of losses and tax credits of \u00a3512 million of total losses of \u00a32,371
million carried forward at 31 December 2025. NWM N.V. expects the deferred tax asset to be
utilised against future taxable pro\ufb01ts by the end of 2032. The tax losses and tax credits have no
expiry date.
Unrecognised deferred tax
Deferred tax assets of \u00a34,882 million (2024 - \u00a34,960 million; 2023 - \u00a35,168 million) have not been
recognised in respect of tax losses and other deductible temporary differences carried forward of
\u00a323,385 million (2024 - \u00a323,238 million; 2023 - \u00a324,438 million) in jurisdictions where doubt exists
over the availability of future taxable pro\ufb01ts. Of these losses and other deductible temporary
differences, \u00a34,176 million expire after 10 years. The balance of tax losses and other deductible
temporary differences carried forward has no expiry date.
Deferred tax liabilities of \u00a3258 million (2024 - \u00a3269 million; 2023 - \u00a3256 million) on aggregate
underlying temporary differences of \u00a31,022 million (2024 - \u00a31,241 million; 2023 - \u00a31,005 million)
have not been recognised in respect of retained earnings of overseas subsidiaries and held-over
gains on the incorporation of certain overseas branches. These retained earnings are expected to
be reinvested inde\ufb01nitely or remitted to the UK free from further taxation. No taxation is expected
to arise in the foreseeable future in respect of held-over gains on which deferred tax is not
recognised. UK tax legislation largely exempts from UK tax overseas dividends received.17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00635": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.
3.9. Netting
Financial assets and \ufb01nancial liabilities are
offset, and the net amount presented on the
balance sheet when, and only when, we
currently have a legally enforceable right to
set off the recognised amounts and we intend
either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
We are party to a number of arrangements,
including master netting agreements, that
give us the right to offset \ufb01nancial assets and
\ufb01nancial liabilities, but where we do not intend
to settle the amounts net or simultaneously,
the assets and liabilities concerned are
presented separately on the balance sheet.
3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.
3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 3.13. Financial guarantee contracts
Under a \ufb01nancial guarantee contract, we, in
return for a fee, undertake to meet a
customer\u2019s obligations under the terms of a
debt instrument if the customer fails to do so.
A \ufb01nancial guarantee not designated as fair
value through pro\ufb01t or loss is recognised as a
liability; initially at fair value and subsequently
at the higher of its initial value less cumulative
amortisation and any provision under the
contract measured in accordance with our
ECL accounting policy. Amortisation is
calculated to recognise fees receivable in the
income statement over the period of the
guarantee. A separate asset is recognised in
respect of fees receivable for provision of the
\ufb01nancial guarantee.
Purchased \ufb01nancial guarantees are
considered to be integral, and fully adjust the
covered debt instrument expected credit loss
provision, only where the guarantee is
contemplated at the inception of the debt
instrument and is entered into within a
reasonable timeframe. Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00636": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 9 Financial instruments - classi\ufb01cation
Financial instruments are contracts that give rise to a \ufb01nancial asset of one entity and a corresponding \ufb01nancial liability or equity instrument of a counterparty entity, such as cash,
derivatives, loans, deposits and settlement balances. This note presents \ufb01nancial instruments classi\ufb01ed in accordance with IFRS 9 \u2013 Financial Instruments.
Judgement: classi\ufb01cation of \ufb01nancial assets
Classi\ufb01cation of \ufb01nancial assets between amortised cost and fair
value through other comprehensive income requires a degree of
judgement in respect of business models and contractual
cash\ufb02ows.
\u2022
The business model criteria are assessed at a portfolio level
to determine whether assets are classi\ufb01ed as held to collect
or held to collect and sell. Information that is considered in
determining the applicable business model includes: the
portfolio\u2019s policies and objectives; how the performance and
risks of the portfolio are managed, evaluated and reported
to management; and the frequency, volume and timing of
sales in prior periods, sales expectation for future periods,
and the reasons for sales.
\u2022
The contractual cash \ufb02ow characteristics of \ufb01nancial assets
are assessed with reference to whether the cash \ufb02ows
represent solely payments of principal and interest (SPPI). A
level of judgement is made in assessing terms that could
change the contractual cash \ufb02ows so that it would not meet
the condition for SPPI, including contingent and leverage
features, non-recourse arrangements and features that
could modify the time value of money.
For accounting policy information refer to Accounting policies
3.8, 3.9 and 3.11.
The following tables analyse \ufb01nancial assets and liabilities in accordance with the categories of \ufb01nancial
instruments in IFRS 9.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0
Amortised
Other
\u00a0
\u00a0
MFVTPL
DFV
FVOCI
cost
assets
Total
Assets
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
\u00a0\u00a0\u00a0
85,182
\u00a0
85,182
Trading assets
46,537
\u00a0\u00a0\u00a0\u00a0
46,537
Derivatives
(1)
60,789
\u00a0\u00a0\u00a0\u00a0
60,789
Settlement balances
\u00a0\u00a0\u00a0
645
\u00a0
645
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,958
\u00a0
6,958
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
418,881
\u00a0
418,881
Other financial assets
1,041
3
42,168
36,558
\u00a0
79,770
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,292
7,292
Other assets
\u00a0\u00a0\u00a0\u00a0
8,499
8,499
31 December 2025
108,367
3
42,168
548,224
15,791
714,553
Cash and balances at central banks
\u00a0\u00a0\u00a0
92,994
\u00a0
92,994
Trading assets
48,917
\u00a0\u00a0\u00a0\u00a0
48,917
Derivatives
(1)
78,406
\u00a0\u00a0\u00a0\u00a0
78,406
Settlement balances
\u00a0\u00a0\u00a0
2,085
\u00a0
2,085
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,030
\u00a0
6,030
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
400,326
\u00a0
400,326
Other financial assets
798
5
37,843
24,597
\u00a0
63,243
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,588
7,588
Other assets
\u00a0\u00a0\u00a0\u00a0
8,396
8,396
31 December 2024
128,121
5
37,843
526,032
15,984
707,985
\n
For the notes to this table refer to the following page.
Amortised
Other
Held-for-trading
DFV
cost
liabilities
Total
Liabilities
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank deposits
(4)
44,092
44,092
Customer deposits
442,998
442,998
Settlement balances
942
942
Trading liabilities
49,022
49,022
Derivatives
(1)
53,974
53,974
Other financial liabilities
(5)
4,617
62,982
67,599
Subordinated liabilities
237
5,886
6,123
Notes in circulation
3,164
3,164
Other liabilities
(6)
594
3,432
4,026
31 December 2025
102,996
4,854
560,658
3,432
671,940
Bank deposits
(4)
31,452
31,452
Customer deposits
433,490
433,490
Settlement balances
1,729
1,729
Trading liabilities
54,714
54,714
Derivatives
(1)
72,082
72,082
Other financial liabilities
(5)
3,548
57,539
61,087
Subordinated liabilities
234
5,902
6,136
Notes in circulation
3,316
3,316
Other liabilities
(6)
684
3,917
4,601
31 December 2024
126,796
3,782
534,112
3,917
668,607
\n
(1)
Includes net hedging derivatives assets of \u00a3535 million (2024 - \u00a3118 million)
\n
and net hedging derivatives liabilities of \u00a3356 million (2024 - \u00a3464 million).
\n
(2)
Includes items in the course of collection from other banks of \u00a3166 million
\n
(2024 - \u00a359 million).
\n
(3)
Includes finance lease receivables of \u00a38,971 million (2024 - \u00a38,998 million).
\n
(4)
Includes items in the course of transmission to other banks of \u00a3192 million
\n
(2024 - \u00a3136 million).
\n
(5)
The carrying amount of customer deposits designated at fair value through
\n
profit or loss is materially the same as the principal amount for both periods.
\n
No amounts have been recognised in the profit or loss for changes in credit
\n
risk associated with these liabilities as the changes are immaterial both during
\n
the period and cumulatively.
\n
(6)
Includes lease liabilities of \u00a3535 million (2024 - \u00a3630 million), held at amortised
\n
cost.
We originate loans that include features that change the contractual cash \ufb02ows based on the borrower meeting certain contractually speci\ufb01ed environmental, social and governance (ESG) targets.
These are known as ESG-linked, or sustainability-linked, loans. As part of the terms of these loans, the contractual interest rate is reduced or increased if the borrower meets, or fails to meet, speci\ufb01c
targets linked to the activity of the borrower, for example; reducing carbon emissions, increasing the level of diversity at Board level, or achieving a sustainable supply chain. ESG features are \ufb01rst
assessed to ascertain whether the adjustment to the contractual cash \ufb02ows results in a de minimis exposure to risks or volatility in those contractual cash \ufb02ows. If this is the case the classi\ufb01cation of
the loan is not affected. If the effect of the ESG feature is assessed as being more than de minimis, we apply judgement to ensure that the ESG features do not generate compensation for risks that
are not in line with a basic lending arrangement. This includes, amongst other aspects, a review of the consistency of the ESG targets with the asset or activity of the borrower, and consideration of
the targets within our risk appetite. Some of these loans were eligible under our climate and sustainable funding and \ufb01nancing inclusion (CSFFI) criteria, which underpinned our previous target to
provide \u00a3100 billion in climate and sustainable funding and \ufb01nancing between 1 July 2021 and the end of 2025. Our CSFFI criteria was replaced with our climate and transition \ufb01nance framework in
July 2025 alongside our new target to provide \u00a3200 billion in climate and transition \ufb01nance. Some of these loans continue to be eligible under the climate and transition \ufb01nance framework.
The table below analyses \ufb01nancial assets forming a component of ESG-linked loans and other products with contractual terms that could change the timing or amount of cash \ufb02ows. This is based on
balance sheet values as at 31 December and the maximum impact of the potential margin changes on these over a 12 month period.
\u00a0
2025
2024
\u00a0 \u00a0
Positive impact on
Negative impact on
\u00a0
Positive impact on
Negative impact on
\u00a0
Carrying value
product margin
product margin
Carrying value
product margin
product margin
\u00a0
\u00a3bn
bps
bps
\u00a3bn
bps
bps
Sustainability-linked loans
8.0
2.9
3.7
6.9
3.1
4.0
Other products
21.9
-
-
20.2
-
-
Lending subject to performance
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
triggers
29.9
\u00a0 \u00a0
27.1
\u00a0 \u00a0
Financial instruments \u2013 \ufb01nancial assets and liabilities that can be offset
The tables below present information on \ufb01nancial assets and \ufb01nancial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with
\ufb01nancial collateral received or given.
\u00a0
Instruments which can be offset
Potential for offset not recognised by IFRS
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Effect of master
\u00a0\u00a0
Net amount after
Instruments
\u00a0
\u00a0\u00a0\u00a0\u00a0
netting and similar
Cash
\u00a0
netting agreements and
outside netting
Balance sheet
\u00a0
Gross
IFRS offset
Balance sheet
agreements
collateral
Securities collateral
effect of related collateral
agreements
total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Derivative assets
77,408
(17,007)
60,401
(45,928)
(9,275)
(3,283)
1,915
388
60,789
Derivative liabilities
71,589
(17,951)
53,638
(45,928)
(4,281)
(1,256)
2,173
336
53,974
Net position
(1)
5,819
944
6,763
-
(4,994)
(2,027)
(258)
52
6,815
Trading reverse repos
44,729
(17,129)
27,600
(465)
-
(26,882)
253
56
27,656
Trading repos
43,648
(17,129)
26,519
(465)
-
(26,054)
-
2,059
28,578
Net position
1,081
-
1,081
-
-
(828)
253
(2,003)
(922)
Non trading reverse repos
50,889
(14,470)
36,419
(9)
-
(36,410)
-
-
36,419
Non trading repos
44,082
(14,470)
29,612
(9)
-
(29,603)
-
-
29,612
Net position
6,807
-
6,807
-
-
(6,807)
-
-
6,807
2024
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Derivative assets
96,624
(18,746)
77,878
(61,883)
(10,005)
(4,072)
1,918
528
78,406
Derivative liabilities
92,620
(21,027)
71,593
(61,883)
(5,801)
(896)
3,013
489
72,082
Net position
(1)
4,004
2,281
6,285
-
(4,204)
(3,176)
(1,095)
39
6,324
Trading reverse repos
42,261
(15,174)
27,087
(1,469)
-
(25,406)
212
40
27,127
Trading repos
45,033
(15,174)
29,859
(1,469)
-
(28,390)
-
703
30,562
Net position
(2,772)
-
(2,772)
\u00a0
-
2,984
212
(663)
(3,435)
Non trading reverse repos
45,600
(8,709)
36,891
(80)
-
(36,811)
-
-
36,891
Non trading repos
22,288
(8,709)
13,579
(80)
-
(13,499)
-
-
13,579
Net position
23,312
-
23,312
-
-
(23,312)
-
-
23,312
\n
(1)
Net IFRS offset balance of \u00a3944 million (2024 - \u00a32,281 million) relates to variation margin netting re\ufb02ected on other balance sheet lines.
10 Financial instruments - valuation
Financial instruments recognised at fair value are revalued using techniques that can include observable inputs (pricing information that is readily available in the market, for example UK
Government securities), and unobservable inputs (pricing information that is not readily available, for example unlisted securities). Gains and losses are recognised in the income statement
and statement of comprehensive income as appropriate.
This note presents information on the valuation of \ufb01nancial instruments.
The table below provides an overview of the various sections contained within the note.
Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.
Valuation
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Page
Financial instruments
\u00a0
Critical accounting policy: Fair value
330
Valuation
\u00a0
Fair value hierarchy
(D)
331
Valuation techniques
(D)
331
Inputs to valuation models
(D)
331
Valuation control
(D)
332
Key areas of judgement
(D)
332
Assets and liabilities split by fair value hierarchy level
(T)
333
Valuation adjustments
\u00a0
Fair value adjustments made
(T)
334
Funding valuation adjustments (FVA)
(D)
334
Credit valuation adjustments (CVA)
(D)
334
Bid-offer
(D)
334
Product and deal speci\ufb01c
(D)
334
Own credit
(D)
334
Level 3 additional information
\u00a0
Level 3 ranges of unobservable inputs
(D)
335
Level 3 instruments, valuation techniques and inputs
(T)
335
Level 3 sensitivities
(D)
335
Alternative assumptions
(D)
336
Other considerations
(D)
336
High and low range of fair value of level 3 assets and liabilities
(T)
336
Movement in level 3 assets and liabilities over the reporting period
(D)
337
Movement in level 3 assets and liabilities
(T)
337
Fair value of \ufb01nancial instruments measured at amortised cost
\u00a0
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
338
(D) = Descriptive; (T) = Table
\u00a0
Fair value hierarchy
\n
Financial instruments carried at fair value
\n
have been classi\ufb01ed under the fair value
\n
hierarchy. The classi\ufb01cation ranges from level
\n
1 to level 3, with more expert judgement and
\n
price uncertainty for those classi\ufb01ed at level
\n
3.
\n
The determination of an instrument\u2019s level
\n
cannot be made at a global product level as
\n
a single product type can be in more than
\n
one level. For example, a single name
\n
corporate credit default swap could be in level
\n
2 or level 3 depending on the level of market
\n
activity for the referenced entity.
\n
Level 1
\u2013 instruments valued using unadjusted
\n
quoted prices in active and liquid markets, for
\n
identical \ufb01nancial instruments. Examples
\n
include government bonds, listed equity
\n
shares and certain exchange-traded
\n
derivatives.
\n
Level 2
\u2013 instruments valued using valuation
\n
techniques that have observable inputs.
\n
Observable inputs are those that are readily
\n
available with limited adjustments required.
\n
Examples include most government agency
\n
securities, investment-grade corporate bonds,
\n
certain mortgage products - including
\n
collateralised loan obligations (CLOs), most
\n
bank loans, repos and reverse repos, state
\n
and municipal obligations, most notes issued,
\n
certain money market securities, loan
\n
commitments and most over the counter
\n
(OTC) derivatives.
\n
Level 3
\u2013 instruments valued using a
\n
valuation technique where at least one input
\n
which could have a signi\ufb01cant effect on the
\n
instrument\u2019s valuation, is not based on
\n
observable market data.
\n
Examples include non-derivative instruments
\n
which trade infrequently, certain syndicated
\n
and commercial mortgage loans, private
\n
equity, and derivatives with unobservable
\n
model inputs.
\n
Valuation techniques
\n
NatWest Group derives the fair value of its
\n
instruments differently depending on whether
\n
the instrument is a non-modelled or a
\n
modelled product.
\n
Non-modelled products
are valued directly
\n
from a price input, typically on a position-by-
\n
position basis. Examples include equities and
\n
most debt securities.
\n
Non-modelled products can fall into any fair
\n
value levelling hierarchy depending on the
\n
observable market activity, liquidity, and
\n
assessment of valuation uncertainty of the
\n
instruments. The assessment of fair value and
\n
the classi\ufb01cation of the instrument to a fair
\n
value level is subject to the valuation controls
\n
discussed in the Valuation control section.
\n
Modelled products
\u2013 valued using a pricing
\n
model range in complexity from
\n
comparatively vanilla products such as
\n
interest rate swaps and options (e.g., interest
\n
rate caps and \ufb02oors) through to more
\n
complex derivatives (e.g., balance guarantee
\n
swaps).
\n
For modelled products the fair value is
\n
derived using the model and the appropriate
\n
model inputs or parameters, as opposed to a
\n
cash price equivalent. Model inputs are taken
\n
either directly or indirectly from available
\n
data, where some inputs are also modelled.
\n
Fair value classi\ufb01cation of modelled
\n
instruments is either level 2 or level 3,
\n
depending on the product/model
\n
combination, the observability and quality of
\n
input parameters and other factors.
\n
All these must be assessed to classify a
\n
position. The modelled product is assigned to
\n
the lowest fair value hierarchy level of any
\n
signi\ufb01cant input used in that valuation.
\n
Most derivative instruments, for example
\n
vanilla interest rate swaps, foreign exchange
\n
swaps and liquid single name credit
\n
derivatives, are classi\ufb01ed as level 2. This is
\n
because they are vanilla products valued
\n
using standard market models and with
\n
observable inputs. Level 2 products range
\n
from vanilla to more complex products,
\n
where more complex products remain
\n
classi\ufb01ed as level 2 due to the low materiality
\n
of any unobservable inputs.
\n
Inputs to valuation models
\n
When using valuation techniques, the fair
\n
value can be signi\ufb01cantly affected by the
\n
choice of
valuation model
and underlying
\n
assumptions. Factors considered include the
\n
cash\ufb02ow amounts and timing of those cash
\n
\ufb02ows, and application of appropriate discount
\n
rates, incorporating both funding and credit
\n
risk. Values between and beyond available
\n
data points are obtained by interpolation and
\n
extrapolation. The principal inputs to these
\n
valuation techniques are as follows:
\n
Bond prices
\u2013 quoted prices are generally
\n
available for government bonds, certain
\n
corporate securities, and some mortgage-
\n
related products.
\n
Credit spreads/margins
\u2013 these re\ufb02ect credit
\n
default swap levels or the return required
\n
over a benchmark rate or index to
\n
compensate for the referenced credit risk.
\n
Where available, these are derived from the
\n
price of credit default swaps or other credit-
\n
based instruments, such as debt securities.
\n
When direct prices are not available, credit
\n
spreads/margins are determined with
\n
reference to available prices of entities with
\n
similar characteristics.
\n
Interest rates
\u2013 these are principally based on
\n
interest rate swap prices referencing
\n
benchmark interest rates. Interest rates,
\n
include SONIA (Sterling Overnight Interbank
\n
Average Rate) and other overnight rates.
\n
Other quoted interest rates may also be used
\n
from both the bond, and futures markets.
\n
Foreign currency exchange rates
\u2013 there are
\n
observable prices both for spot and forward
\n
contracts and futures in the world's major
\n
currencies.
\n
Equity and equity index prices
\u2013 quoted
\n
prices are generally readily available for
\n
equity shares listed on the world's major
\n
stock exchanges and for major indices on
\n
such shares.
\n
Price volatilities and correlations
\u2013 volatility is
\n
a measure of the tendency of a price to
\n
change with time. Correlation measures the
\n
degree which two or more prices or variables
\n
are observed to move together. Variables
\n
that move in the same direction show positive
\n
correlation; those that move in opposite
\n
directions are negatively correlated.
\n
Prepayment rates
\u2013 are used to re\ufb02ect how
\n
fast a pool of assets prepay. The fair value of
\n
a \ufb01nancial instrument that can be prepaid by
\n
the issuer or borrower differs from that of an
\n
instrument that cannot be prepaid. When
\n
valuing prepayable instruments, the value of
\n
this prepayment option is considered.
\n
Recovery rates/loss given default
\u2013 are used
\n
as an input to valuation models and reserves
\n
for asset-backed securities and other credit
\n
products as an indicator of severity of losses
\n
on default. Recovery rates are primarily
\n
sourced from market data providers, the
\n
value of the underlying collateral or inferred
\n
from observable credit spreads.
Valuation control
NatWest Group's control environment for the
determination of the fair value of \ufb01nancial
instruments includes formalised procedures
for the review and validation of fair values.
The review of market prices and inputs is
performed by an independent price
veri\ufb01cation (IPV) team.
IPV is a key element of the control
environment. Valuations are \ufb01rst performed
by the business which entered into the
transaction. These valuations are then
reviewed by the IPV team, independent of
those trading the \ufb01nancial instruments, in
light of available pricing evidence.
Independent pricing data is collated from a
range of sources. Each source is reviewed for
quality and the independent data applied in
the IPV processes using a formalised input
quality hierarchy. Consensus services are one
source of independent data and encompass
interest rate, currency, credit, and bond
markets, providing comprehensive coverage
of vanilla products and a wide selection of
exotic products.
Where measurement differences are
identi\ufb01ed through the IPV process these are
grouped by the quality hierarchy of the
independent data. If the size of the difference
exceeds de\ufb01ned thresholds, an adjustment is
made to bring the valuation to within the
independently calculated fair value range.
IPV takes place at least monthly, for all fair
value \ufb01nancial instruments. The IPV control
includes formalised reporting and escalation
of any valuation differences in breach of
established thresholds.
The quality and completeness of the
information gathered in the IPV process gives
an indication as to the liquidity and valuation
uncertainty of an instrument and forms part
of the information considered when
determining fair value hierarchy
classi\ufb01cations.
Initial fair value level classi\ufb01cation of a
\ufb01nancial instrument is carried out by the IPV
team. These initial classi\ufb01cations are subject
to senior management review. Particular
attention is paid to instruments transferring
from one level to another, new instrument
classes or products, instruments where the
transaction price is signi\ufb01cantly different from
the fair value and instruments where
valuation uncertainty is high.
Valuation Committees are made up of
valuation specialists and senior business
representatives from various functions and
oversees pricing, reserving and valuations
issues. These committees meet monthly to
review and ratify any methodology changes.
The Executive Valuation Committee meets
quarterly to address key material and
subjective valuation issues, to review items
escalated by Valuation Committees and to
discuss other relevant industry matters.
The Group model risk policy sets the policy
for model documentation, testing and review.
Governance of the model risk policy is carried
out by the Group Model Risk Oversight
Committee, which comprises model risk
owners and independent model experts. All
models are required to be independently
validated in accordance with the model risk
Policy.
Key areas of judgement
Over the years the business has simpli\ufb01ed,
with most products classi\ufb01ed as level 1 or 2
of the fair value hierarchy. However, the
diverse range of products historically traded
by NatWest Group means some products
remain classi\ufb01ed as level 3. Level 3 indicates
a signi\ufb01cant level of pricing uncertainty,
where expert judgement is used. As such,
extra disclosures are required in respect of
level 3 instruments.
In general, the degree of expert judgement
used and hence valuation uncertainty
depends on the degree of liquidity of an
instrument or input.
Where markets are liquid, little judgement is
required. However, when the information
regarding the liquidity in a particular market
is not clear, a judgement may need to be
made. For example, for an equity traded on
an exchange, daily volumes of trading can be
seen, but for an OTC derivative, assessing
the liquidity of the market with no central
exchange is more challenging.
The breadth and depth of the IPV data allows
for a rules-based quality assessment to be
made of market activity, liquidity, and pricing
uncertainty, which assists with the process of
allocation to an appropriate level. Where
suitable independent pricing information is
not readily available, the quality assessment
will result in the instrument being assessed as
level 3.
The table below shows the assets and liabilities held by NatWest Group split by fair value hierarchy level. Level 1 are considered the most liquid instruments, and level 3 the most illiquid, valued using
\n
expert judgement and so carry the most signi\ufb01cant price uncertainty.
\n\n \n
2025
2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
-
33,556
96
33,652
-
34,761
278
35,039
Securities
9,586
3,299
-
12,885
8,772
5,106
-
13,878
Derivatives
Interest rate
-
32,382
360
32,742
-
37,026
473
37,499
Foreign exchange
-
27,878
103
27,981
-
40,687
110
40,797
Other
-
57
9
66
-
63
47
110
Other financial assets
Loans
-
35
533
568
-
288
565
853
Securities
25,528
16,964
152
42,644
23,943
13,641
209
37,793
Total financial assets held at fair value
35,114
114,171
1,253
150,538
32,715
131,572
1,682
165,969
As a % of total fair value assets
23%
76%
1%
20%
79%
1%
Liabilities
Trading liabilities
Deposits
-
41,284
-
41,284
-
43,966
-
43,966
Debt securities in issue
-
234
-
234
-
257
-
257
Short positions
6,172
1,331
1
7,504
8,766
1,724
1
10,491
Derivatives
Interest rate
-
26,589
169
26,758
-
31,253
279
31,532
Foreign exchange
-
26,988
54
27,042
-
40,240
66
40,306
Other
-
119
55
174
-
124
120
244
Other financial liabilities
Debt securities in issue
-
2,302
3
2,305
-
1,733
3
1,736
Other deposits
-
2,285
27
2,312
-
1,787
25
1,812
Subordinated liabilities
-
237
-
237
-
234
-
234
Total financial liabilities held at fair value
6,172
101,369
309
107,850
8,766
121,318
494
130,578
As a % of total fair value liabilities
6%
94%
0%
7%
93%
0%
\n
(1)
Transfers between levels are deemed to have occurred at the beginning
\n
of the quarter in which the instrument was transferred.
\n
(2)
For an analysis of debt securities held at mandatory fair value through profit or
\n
loss by issuer as well as ratings and derivatives, by type and contract, refer to
\n
Risk and capital management \u2013 Credit risk.
Valuation adjustments
\n
When valuing \ufb01nancial instruments in the trading book, adjustments are made to mid-market
\n
valuations to cover bid-offer spread, funding and credit risk. These adjustments are presented in
\n
the table below:
\n\n \n
2025
2024
Adjustment
\u00a3m
\u00a3m
Funding valuation adjustments
(11)
123
Credit valuation adjustments
179
190
Bid-offer
60
76
Product and deal speci\ufb01c
124
157
Total
352
546
\n
The decrease in funding valuation adjustments was primarily driven by unwinding of a major
\n
portfolio. The decrease in credit valuation adjustments was driven by credit spreads tightening
\n
with the impacts of exposure changes largely offsetting. The decrease in bid-offer was driven by
\n
risk reduction and unwinding of a major portfolio. The decrease in product and deal speci\ufb01c was
\n
driven by the amortisation of deferred trade inception pro\ufb01ts partially offset by new trading
\n
activity.
\n
Funding valuation adjustments (FVA)
\n
FVA represents an estimate of the adjustment that a market participant would make to
\n
incorporate funding costs and bene\ufb01ts that arise in relation to derivative exposures. FVA is
\n
calculated as a portfolio level adjustment and can result in either a funding charge (positive) or
\n
funding bene\ufb01t (negative).
\n
Funding levels are applied to estimated potential future exposures. For uncollateralised
\n
derivatives, the exposure re\ufb02ects the future valuation of the derivative. For collateralised
\n
derivatives, the exposure re\ufb02ects the difference between the future valuation of the derivative
\n
and the level of collateral posted.
\n
Credit valuation adjustments (CVA)
\n
CVA represents an estimate of the adjustment to fair value that is made to incorporate the
\n
counterparty credit risk inherent in derivative exposures. CVA is calculated on a portfolio basis
\n
re\ufb02ecting an estimate of the amount a third party would charge to assume the credit risk.
\n
Collateral held under a credit support agreement is factored into the CVA calculation. In such
\n
cases where NatWest Group holds collateral against counterparty exposures, CVA is held to the
\n
extent that residual risk remains.
\n
FVA and CVA are actively managed by a credit and market risk hedging process, and therefore
\n
movements in CVA and FVA are partially offset by trading revenue on the hedges.
\n
Bid-offer
\n
Fair value positions are required to be marked to exit levels, represented by bid (long positions)
\n
or offer (short positions) levels. Non-derivative positions are typically marked directly to bid or
\n
offer prices. However derivative exposures are adjusted to exit levels by taking bid-offer reserves
\n
calculated on a portfolio basis. The reserving approach is based on current market bid-offer
\n
spreads and standard market bucketing of risk.
\n
Bid-offer spreads vary by maturity and risk type to re\ufb02ect different spreads in the market. For
\n
positions where there is no observable quote, the bid-offer spreads are widened in comparison to
\n
proxies to re\ufb02ect reduced liquidity or observability.
\n
Netting is applied on a portfolio basis to re\ufb02ect the value at which NatWest Group believes it
\n
could exit the net risk of the portfolio, rather than the sum of exit costs for each of the portfolio\u2019s
\n
individual trades. This is applied where the asset and liability positions are managed as a portfolio
\n
for risk and reporting purposes.
\n
Product and deal speci\ufb01c
\n
On initial recognition of \ufb01nancial assets and liabilities valued using valuation techniques which
\n
have a signi\ufb01cant dependence on information other than observable market data, any difference
\n
between the transaction price and that derived from the valuation technique is deferred. Such
\n
amounts are recognised in the income statement over the life of the transaction, when market
\n
data becomes observable, or when the transaction matures or is closed out as appropriate. On
\n
31 December 2025, net gains of \u00a3109 million (2024 - \u00a3139 million) were carried forward. During
\n
the year, net gains of \u00a3205 million (2024 - \u00a3218 million) were deferred and \u00a3235 million (2024 -
\n
\u00a3157 million) were recognised in the income statement.
\n
Where system-generated valuations do not accurately re\ufb02ect market prices, manual valuation
\n
adjustments are applied either at a position or portfolio level. Manual adjustments are subject to
\n
the scrutiny of independent control teams and are subject to monthly review by senior
\n
management.
\n
Own credit
\n
NatWest Group considers the effect of its own credit standing when valuing \ufb01nancial liabilities
\n
recorded at fair value. Own credit spread adjustments are made when valuing issued debt held
\n
at fair value, including issued structured notes. An own credit adjustment is applied to positions
\n
where it is believed that counterparties would consider NatWest Group\u2019s creditworthiness when
\n
pricing trades. Accumulated changes in fair value due to credit risk are \u00a357 million (2024 \u2013 \u00a344
\n
million).
Level 3 additional information
\n
For illiquid assets and liabilities, classi\ufb01ed as level 3, additional information is provided on the valuation techniques used and price sensitivity of the products to those inputs. This is to enable the reader
\n
to gauge the level of uncertainty that arises from positions with signi\ufb01cant unobservable inputs or modelling parameters.
\n
Level 3 ranges of unobservable inputs
\n
The table below provides additional information on level 3 instruments and inputs. This shows the valuation technique used for the fair value calculation, the unobservable input and input range.
\n\n \n
2025
2024
Financial instrument
Valuation technique
Unobservable inputs
Units
Low
High
Low
High
Trading assets and Other financial assets
Loans
Price-based
Price
%
89
121
88
123
Discount cash \ufb02ow
Credit spreads
bps
34
81
36
93
Debt securities
Price-based
Price
%
-
111
-
116
Equity Shares
Price-based
Price
GBP
-
44,090
-
47,312
Price-based
Price
%
-
-
-
15
Discount cash \ufb02ow
Discount margin
%
-
-
9
13
Net asset valuation
Fund NAV
%
80
120
80
120
Derivative assets and liabilities
Credit derivatives
Credit derivative
Credit spreads
bps
16
133
15
86
pricing
Correlation
%
(15)
75
(15)
95
Option pricing
Volatility
%
30
75
30
80
Upfront points
%
-
99
-
99
Recovery rate
%
-
60
-
60
Interest rate & FX
Option pricing
Correlation
%
(50)
98
(50)
98
derivatives
Volatility
%
3
82
3
99
Constant Prepayment
Rate
%
2
25
2
20
Mean Reversion
%
-
13
-
20
In\ufb02ation volatility
%
1
2
1
2
In\ufb02ation rate
%
2
2
2
2
\n
(1)
Valuation for private equity investments may be estimated by looking at
\n
past prices of similar stocks and from valuation statements where
\n
valuations are usually derived from earnings measures such as EBITDA
\n
or net asset value (NAV). Similarly, for equity or bond fund investments,
\n
prices may be estimated from valuation or credit statements using NAV
\n
or similar measures.
\n
(2)
NatWest Group does not have any material liabilities measured at fair
\n
value that are issued with an inseparable third-party credit
\n
enhancement
.
\n
Level 3 sensitivities
\n
The level 3 sensitivities presented on the next page are calculated at a trade or low-level portfolio basis rather than an overall portfolio basis. As individual sensitivities are aggregated with no re\ufb02ection
\n
of the correlated nature between instruments, the overall portfolio sensitivity may not be accurately re\ufb02ected. For example, some portfolios may be negatively correlated to others, where a downwards
\n
movement in one asset would produce an upwards movement in another. However, due to the additive presentation of the above \ufb01gures this correlation impact cannot be displayed. As such, the
\n
actual potential downside sensitivity of the total portfolio may be less than the non-correlated sum of the additive \ufb01gures as shown in the table on the next page.
Alternative assumptions
\n
Reasonably plausible alternative assumptions of unobservable inputs are determined based on a speci\ufb01ed target level of certainty of 90%.
\n
Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information considering consistency between
\n
different sources, variation over time, perceived tradability or otherwise of available quotes; consensus service dispersion ranges; volume of trading activity and market bias (e.g. one-way inventory);
\n
day 1 pro\ufb01t or loss arising on new trades; number and nature of market participants; market conditions; modelling consistency in the market; size and nature of risk; length of holding of position; and
\n
market intelligence.
\n
Other considerations
\n
Whilst certain inputs used to calculate CVA, FVA and own credit adjustments are not based on observable market data, the uncertainty of these inputs is not considered to have a signi\ufb01cant effect on
\n
the net valuation of the related derivative portfolios and issued debt.
\n
As such, the fair value levelling of the derivative portfolios and issued debt is not determined by CVA, FVA or own credit inputs. In addition, any fair value sensitivity driven by these inputs is not
\n
included in the level 3 sensitivities presented.
\n
The table below shows the favourable and unfavourable range of fair value of the level 3 assets and liabilities. This range incorporates the range of fair value inputs as described in the previous table.
\n\n \n
2025
2024
Level 3
Favourable
Unfavourable
Level 3
Favourable
Unfavourable
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
96
-
-
278
-
-
Derivatives
Interest rate
360
20
(10)
473
20
(20)
Foreign exchange
103
10
(10)
110
-
-
Other
9
-
-
47
-
-
Other financial assets
Loans
533
-
(10)
565
-
(10)
Securities
152
10
(20)
209
20
(30)
Total financial assets held at fair value
1,253
40
(50)
1,682
40
(60)
Liabilities
Trading liabilities
Short positions
1
-
-
1
-
-
Derivatives
Interest rate
169
10
(10)
279
10
(10)
Foreign exchange
54
-
-
66
-
-
Other
55
-
-
120
10
(10)
Other financial liabilities
Debt securities in issue
3
-
-
3
-
-
Other deposits
27
-
(20)
25
10
(20)
Total financial liabilities held at fair value
309
10
(30)
494
30
(40)
Movement in level 3 assets and liabilities
\n
The following table shows the movement in level 3 assets and liabilities in the year.
\n\n \n
Other
Other
Other
Other
Derivatives
trading
financial
Total
Derivatives
trading
financial
Total
assets
assets (2)
assets (3)
assets
liabilities
liabilities (2)
liabilities
liabilities
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement
(1)
(145)
(3)
7
(141)
(136)
-
2
(134)
Amount recorded in the statement
of
comprehensive income
-
-
5
5
-
-
-
-
Level 3 transfers in
42
-
-
42
12
-
-
12
Level 3 transfers out
(41)
-
(15)
(56)
(13)
-
(1)
(14)
Purchases/originations
124
105
164
393
98
-
-
98
Settlements/other decreases
(39)
(89)
-
(128)
(46)
-
-
(46)
Sales
(100)
(197)
(250)
(547)
(105)
-
-
(105)
Foreign exchange and other adjustments
1
2
-
3
3
-
1
4
At 31 December
472
96
685
1,253
278
1
30
309
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
(12)
12
4
4
(31)
-
-
(31)
2024
At 1 January
823
223
915
1,961
685
3
3
691
Amounts recorded in the income statement
(1)
(122)
(17)
12
(127)
(121)
-
-
(121)
Amount recorded in the statement of
comprehensive income
-
-
13
13
-
-
-
-
Level 3 transfers in
7
1
56
64
1
2
25
28
Level 3 transfers out
(3)
(19)
(241)
(263)
(2)
(3)
-
(5)
Purchases/originations
147
118
117
382
121
1
-
122
Settlements/other decreases
(44)
(27)
(18)
(89)
(32)
-
-
(32)
Sales
(178)
-
(72)
(250)
(182)
(2)
-
(184)
Foreign exchange and other adjustments
-
(1)
(8)
(9)
(5)
-
-
(5)
At 31 December
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
83
1
12
96
56
-
-
56
\n
(1)
There were net losses on trading assets and liabilities of \u00a312 million
\n
(2024 - net losses of \u00a318 million) was included in income from trading
\n
activities. Net gains on other instruments of \u00a35 million (2024 - net gains
\n
of \u00a312 million) was included in other operating income or interest
\n
income as appropriate.
\n
(2)
Other trading assets and other trading liabilities comprise assets and
\n
liabilities held at fair value in trading portfolios.
\n
(3)
Other financial assets comprise fair value through other comprehensive
\n
income, designated as at fair value through profit or loss and other fair
\n
value through profit or loss.
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
The following table shows the carrying value and fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet.
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Items where
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
fair value
\u00a0
Carrying
\u00a0
Fair value hierarchy level
approximates
\u00a0
value
Fair value
Level 1
Level 2
Level 3
carrying value
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85.2
85.2
-
-
-
85.2
Settlement balances
0.6
0.6
-
-
-
0.6
Loans to banks
7.0
6.9
-
3.6
0.8
2.5
Loans to customers
418.9
414.5
-
33.1
381.4
-
Other financial assets - securities
36.6
36.6
15.4
15.1
6.1
-
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
93.0
93.0
-
-
-
93.0
Settlement balances
2.1
2.1
-
-
-
2.1
Loans to banks
6.0
5.9
-
1.8
0.5
3.6
Loans to customers
400.3
396.6
-
34.9
361.7
-
Other financial assets - securities
24.6
24.6
4.3
12.4
7.9
-
2025
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
44.1
44.1
-
36.2
3.8
4.1
Customer deposits
443.0
424.4
-
30.4
26.3
367.7
Settlement balances
0.9
0.9
-
-
-
0.9
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
63.0
63.6
-
51.9
11.7
-
Subordinated liabilities
5.9
6.1
-
6.1
-
-
Notes in circulation
3.2
3.2
-
-
-
3.2
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
31.5
31.2
-
23.9
3.0
4.3
Customer deposits
433.5
433.3
-
24.3
46.0
363.0
Settlement balances
1.7
1.7
-
-
-
1.7
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
57.5
57.6
-
48.9
8.7
-
Subordinated liabilities
5.9
6.0
-
6.0
-
-
Notes in circulation
3.3
3.3
-
-
-
3.3
\n
The assumptions and methodologies underlying the
calculation of fair values of \ufb01nancial instruments at the
balance sheet date are as follows:
Short-term \ufb01nancial instruments
For certain short-term \ufb01nancial instruments, including
but not limited to, cash and balances at central banks,
settlement balances, loans with short-term maturities,
notes in circulation and customer demand deposits,
carrying value is deemed a reasonable approximation
of fair value.
Loans to banks and customers
In estimating the fair value of net loans to customers
and banks measured at amortised cost, NatWest
Group\u2019s loans are segregated into appropriate portfolios
re\ufb02ecting the characteristics of the constituent loans.
Two principal methods are used to estimate fair value:
(a)
Contractual cash \ufb02ows that are discounted using a
market discount rate that incorporates the current
spread for the borrower or where this is not
observable, the spread for borrowers of a similar
credit standing.
(b) Expected cash \ufb02ows (unadjusted for credit losses)
are discounted at the current offer rate for the
same or similar products. The current methodology
caps all loan values at par rather than modelling
clients\u2019 option to repay loans early. This approach is
adopted for lending portfolios in Retail Banking,
Commercial & Institutional (SME loans) and Private
Banking & Wealth Management in order to re\ufb02ect
the homogeneous nature of these portfolios.
Debt securities and subordinated liabilities
Most debt securities are valued using quoted prices in
active markets or from quoted prices of similar \ufb01nancial
instruments. The remaining population is valued using
discounted cash\ufb02ows at current offer rates.
Bank and customer deposits
Fair values of deposits are estimated using discounted
cash \ufb02ow valuation techniques. Where required,
methodologies can be revised as additional information
and valuation inputs become available.12 Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair value and classi\ufb01ed as held-for-trading. Financial instruments are classi\ufb01ed as held-for-trading if they are held for the
purpose of selling or repurchasing them in the short term, to make a spread between purchase and sale price or held to take advantage of movements in prices and yields.
For accounting policy information refer to Accounting policy 3.8.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Assets
\u00a3m
\u00a3m
Loans
\u00a0 \u00a0
Reverse repos
27,656
27,127
Collateral given
5,701
7,367
Other loans
295
545
Total loans
33,652
35,039
Securities
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
2,120
2,077
- US
4,153
3,734
- Other
4,135
3,506
Financial institutions and corporate
2,477
4,561
Total securities
12,885
13,878
Total
46,537
48,917
Liabilities
\u00a0 \u00a0
Deposits
\u00a0 \u00a0
Repos
28,578
30,562
Collateral received
11,966
12,509
Other deposits
740
895
Total deposits
41,284
43,966
Debt securities in issue
234
257
Short positions
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
1,504
2,680
- US
1,161
1,677
- Other
4,137
4,755
Financial institutions and Corporate
702
1,379
Total short positions
7,504
10,491
Total
49,022
54,714
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00663": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.
3.9. Netting
Financial assets and \ufb01nancial liabilities are
offset, and the net amount presented on the
balance sheet when, and only when, we
currently have a legally enforceable right to
set off the recognised amounts and we intend
either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
We are party to a number of arrangements,
including master netting agreements, that
give us the right to offset \ufb01nancial assets and
\ufb01nancial liabilities, but where we do not intend
to settle the amounts net or simultaneously,
the assets and liabilities concerned are
presented separately on the balance sheet.
3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.
3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 9 Financial instruments - classi\ufb01cation
Financial instruments are contracts that give rise to a \ufb01nancial asset of one entity and a corresponding \ufb01nancial liability or equity instrument of a counterparty entity, such as cash,
derivatives, loans, deposits and settlement balances. This note presents \ufb01nancial instruments classi\ufb01ed in accordance with IFRS 9 \u2013 Financial Instruments.
Judgement: classi\ufb01cation of \ufb01nancial assets
Classi\ufb01cation of \ufb01nancial assets between amortised cost and fair
value through other comprehensive income requires a degree of
judgement in respect of business models and contractual
cash\ufb02ows.
\u2022
The business model criteria are assessed at a portfolio level
to determine whether assets are classi\ufb01ed as held to collect
or held to collect and sell. Information that is considered in
determining the applicable business model includes: the
portfolio\u2019s policies and objectives; how the performance and
risks of the portfolio are managed, evaluated and reported
to management; and the frequency, volume and timing of
sales in prior periods, sales expectation for future periods,
and the reasons for sales.
\u2022
The contractual cash \ufb02ow characteristics of \ufb01nancial assets
are assessed with reference to whether the cash \ufb02ows
represent solely payments of principal and interest (SPPI). A
level of judgement is made in assessing terms that could
change the contractual cash \ufb02ows so that it would not meet
the condition for SPPI, including contingent and leverage
features, non-recourse arrangements and features that
could modify the time value of money.
For accounting policy information refer to Accounting policies
3.8, 3.9 and 3.11.
The following tables analyse \ufb01nancial assets and liabilities in accordance with the categories of \ufb01nancial
instruments in IFRS 9.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0
Amortised
Other
\u00a0
\u00a0
MFVTPL
DFV
FVOCI
cost
assets
Total
Assets
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
\u00a0\u00a0\u00a0
85,182
\u00a0
85,182
Trading assets
46,537
\u00a0\u00a0\u00a0\u00a0
46,537
Derivatives
(1)
60,789
\u00a0\u00a0\u00a0\u00a0
60,789
Settlement balances
\u00a0\u00a0\u00a0
645
\u00a0
645
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,958
\u00a0
6,958
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
418,881
\u00a0
418,881
Other financial assets
1,041
3
42,168
36,558
\u00a0
79,770
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,292
7,292
Other assets
\u00a0\u00a0\u00a0\u00a0
8,499
8,499
31 December 2025
108,367
3
42,168
548,224
15,791
714,553
Cash and balances at central banks
\u00a0\u00a0\u00a0
92,994
\u00a0
92,994
Trading assets
48,917
\u00a0\u00a0\u00a0\u00a0
48,917
Derivatives
(1)
78,406
\u00a0\u00a0\u00a0\u00a0
78,406
Settlement balances
\u00a0\u00a0\u00a0
2,085
\u00a0
2,085
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,030
\u00a0
6,030
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
400,326
\u00a0
400,326
Other financial assets
798
5
37,843
24,597
\u00a0
63,243
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,588
7,588
Other assets
\u00a0\u00a0\u00a0\u00a0
8,396
8,396
31 December 2024
128,121
5
37,843
526,032
15,984
707,985
\n
For the notes to this table refer to the following page.
Amortised
Other
Held-for-trading
DFV
cost
liabilities
Total
Liabilities
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank deposits
(4)
44,092
44,092
Customer deposits
442,998
442,998
Settlement balances
942
942
Trading liabilities
49,022
49,022
Derivatives
(1)
53,974
53,974
Other financial liabilities
(5)
4,617
62,982
67,599
Subordinated liabilities
237
5,886
6,123
Notes in circulation
3,164
3,164
Other liabilities
(6)
594
3,432
4,026
31 December 2025
102,996
4,854
560,658
3,432
671,940
Bank deposits
(4)
31,452
31,452
Customer deposits
433,490
433,490
Settlement balances
1,729
1,729
Trading liabilities
54,714
54,714
Derivatives
(1)
72,082
72,082
Other financial liabilities
(5)
3,548
57,539
61,087
Subordinated liabilities
234
5,902
6,136
Notes in circulation
3,316
3,316
Other liabilities
(6)
684
3,917
4,601
31 December 2024
126,796
3,782
534,112
3,917
668,607
\n
(1)
Includes net hedging derivatives assets of \u00a3535 million (2024 - \u00a3118 million)
\n
and net hedging derivatives liabilities of \u00a3356 million (2024 - \u00a3464 million).
\n
(2)
Includes items in the course of collection from other banks of \u00a3166 million
\n
(2024 - \u00a359 million).
\n
(3)
Includes finance lease receivables of \u00a38,971 million (2024 - \u00a38,998 million).
\n
(4)
Includes items in the course of transmission to other banks of \u00a3192 million
\n
(2024 - \u00a3136 million).
\n
(5)
The carrying amount of customer deposits designated at fair value through
\n
profit or loss is materially the same as the principal amount for both periods.
\n
No amounts have been recognised in the profit or loss for changes in credit
\n
risk associated with these liabilities as the changes are immaterial both during
\n
the period and cumulatively.
\n
(6)
Includes lease liabilities of \u00a3535 million (2024 - \u00a3630 million), held at amortised
\n
cost.
We originate loans that include features that change the contractual cash \ufb02ows based on the borrower meeting certain contractually speci\ufb01ed environmental, social and governance (ESG) targets.
These are known as ESG-linked, or sustainability-linked, loans. As part of the terms of these loans, the contractual interest rate is reduced or increased if the borrower meets, or fails to meet, speci\ufb01c
targets linked to the activity of the borrower, for example; reducing carbon emissions, increasing the level of diversity at Board level, or achieving a sustainable supply chain. ESG features are \ufb01rst
assessed to ascertain whether the adjustment to the contractual cash \ufb02ows results in a de minimis exposure to risks or volatility in those contractual cash \ufb02ows. If this is the case the classi\ufb01cation of
the loan is not affected. If the effect of the ESG feature is assessed as being more than de minimis, we apply judgement to ensure that the ESG features do not generate compensation for risks that
are not in line with a basic lending arrangement. This includes, amongst other aspects, a review of the consistency of the ESG targets with the asset or activity of the borrower, and consideration of
the targets within our risk appetite. Some of these loans were eligible under our climate and sustainable funding and \ufb01nancing inclusion (CSFFI) criteria, which underpinned our previous target to
provide \u00a3100 billion in climate and sustainable funding and \ufb01nancing between 1 July 2021 and the end of 2025. Our CSFFI criteria was replaced with our climate and transition \ufb01nance framework in
July 2025 alongside our new target to provide \u00a3200 billion in climate and transition \ufb01nance. Some of these loans continue to be eligible under the climate and transition \ufb01nance framework.
The table below analyses \ufb01nancial assets forming a component of ESG-linked loans and other products with contractual terms that could change the timing or amount of cash \ufb02ows. This is based on
balance sheet values as at 31 December and the maximum impact of the potential margin changes on these over a 12 month period.
\u00a0
2025
2024
\u00a0 \u00a0
Positive impact on
Negative impact on
\u00a0
Positive impact on
Negative impact on
\u00a0
Carrying value
product margin
product margin
Carrying value
product margin
product margin
\u00a0
\u00a3bn
bps
bps
\u00a3bn
bps
bps
Sustainability-linked loans
8.0
2.9
3.7
6.9
3.1
4.0
Other products
21.9
-
-
20.2
-
-
Lending subject to performance
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
triggers
29.9
\u00a0 \u00a0
27.1
\u00a0 \u00a0
Financial instruments \u2013 \ufb01nancial assets and liabilities that can be offset
The tables below present information on \ufb01nancial assets and \ufb01nancial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with
\ufb01nancial collateral received or given.
\u00a0
Instruments which can be offset
Potential for offset not recognised by IFRS
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Effect of master
\u00a0\u00a0
Net amount after
Instruments
\u00a0
\u00a0\u00a0\u00a0\u00a0
netting and similar
Cash
\u00a0
netting agreements and
outside netting
Balance sheet
\u00a0
Gross
IFRS offset
Balance sheet
agreements
collateral
Securities collateral
effect of related collateral
agreements
total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Derivative assets
77,408
(17,007)
60,401
(45,928)
(9,275)
(3,283)
1,915
388
60,789
Derivative liabilities
71,589
(17,951)
53,638
(45,928)
(4,281)
(1,256)
2,173
336
53,974
Net position
(1)
5,819
944
6,763
-
(4,994)
(2,027)
(258)
52
6,815
Trading reverse repos
44,729
(17,129)
27,600
(465)
-
(26,882)
253
56
27,656
Trading repos
43,648
(17,129)
26,519
(465)
-
(26,054)
-
2,059
28,578
Net position
1,081
-
1,081
-
-
(828)
253
(2,003)
(922)
Non trading reverse repos
50,889
(14,470)
36,419
(9)
-
(36,410)
-
-
36,419
Non trading repos
44,082
(14,470)
29,612
(9)
-
(29,603)
-
-
29,612
Net position
6,807
-
6,807
-
-
(6,807)
-
-
6,807
2024
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Derivative assets
96,624
(18,746)
77,878
(61,883)
(10,005)
(4,072)
1,918
528
78,406
Derivative liabilities
92,620
(21,027)
71,593
(61,883)
(5,801)
(896)
3,013
489
72,082
Net position
(1)
4,004
2,281
6,285
-
(4,204)
(3,176)
(1,095)
39
6,324
Trading reverse repos
42,261
(15,174)
27,087
(1,469)
-
(25,406)
212
40
27,127
Trading repos
45,033
(15,174)
29,859
(1,469)
-
(28,390)
-
703
30,562
Net position
(2,772)
-
(2,772)
\u00a0
-
2,984
212
(663)
(3,435)
Non trading reverse repos
45,600
(8,709)
36,891
(80)
-
(36,811)
-
-
36,891
Non trading repos
22,288
(8,709)
13,579
(80)
-
(13,499)
-
-
13,579
Net position
23,312
-
23,312
-
-
(23,312)
-
-
23,312
\n
(1)
Net IFRS offset balance of \u00a3944 million (2024 - \u00a32,281 million) relates to variation margin netting re\ufb02ected on other balance sheet lines.
10 Financial instruments - valuation
Financial instruments recognised at fair value are revalued using techniques that can include observable inputs (pricing information that is readily available in the market, for example UK
Government securities), and unobservable inputs (pricing information that is not readily available, for example unlisted securities). Gains and losses are recognised in the income statement
and statement of comprehensive income as appropriate.
This note presents information on the valuation of \ufb01nancial instruments.
The table below provides an overview of the various sections contained within the note.
Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.
Valuation
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Page
Financial instruments
\u00a0
Critical accounting policy: Fair value
330
Valuation
\u00a0
Fair value hierarchy
(D)
331
Valuation techniques
(D)
331
Inputs to valuation models
(D)
331
Valuation control
(D)
332
Key areas of judgement
(D)
332
Assets and liabilities split by fair value hierarchy level
(T)
333
Valuation adjustments
\u00a0
Fair value adjustments made
(T)
334
Funding valuation adjustments (FVA)
(D)
334
Credit valuation adjustments (CVA)
(D)
334
Bid-offer
(D)
334
Product and deal speci\ufb01c
(D)
334
Own credit
(D)
334
Level 3 additional information
\u00a0
Level 3 ranges of unobservable inputs
(D)
335
Level 3 instruments, valuation techniques and inputs
(T)
335
Level 3 sensitivities
(D)
335
Alternative assumptions
(D)
336
Other considerations
(D)
336
High and low range of fair value of level 3 assets and liabilities
(T)
336
Movement in level 3 assets and liabilities over the reporting period
(D)
337
Movement in level 3 assets and liabilities
(T)
337
Fair value of \ufb01nancial instruments measured at amortised cost
\u00a0
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
338
(D) = Descriptive; (T) = Table
\u00a0
\n\n\n\n
Fair value hierarchy
\n
Financial instruments carried at fair value
\n
have been classi\ufb01ed under the fair value
\n
hierarchy. The classi\ufb01cation ranges from level
\n
1 to level 3, with more expert judgement and
\n
price uncertainty for those classi\ufb01ed at level
\n
3.
\n
The determination of an instrument\u2019s level
\n
cannot be made at a global product level as
\n
a single product type can be in more than
\n
one level. For example, a single name
\n
corporate credit default swap could be in level
\n
2 or level 3 depending on the level of market
\n
activity for the referenced entity.
\n
Level 1
\u2013 instruments valued using unadjusted
\n
quoted prices in active and liquid markets, for
\n
identical \ufb01nancial instruments. Examples
\n
include government bonds, listed equity
\n
shares and certain exchange-traded
\n
derivatives.
\n
Level 2
\u2013 instruments valued using valuation
\n
techniques that have observable inputs.
\n
Observable inputs are those that are readily
\n
available with limited adjustments required.
\n
Examples include most government agency
\n
securities, investment-grade corporate bonds,
\n
certain mortgage products - including
\n
collateralised loan obligations (CLOs), most
\n
bank loans, repos and reverse repos, state
\n
and municipal obligations, most notes issued,
\n
certain money market securities, loan
\n
commitments and most over the counter
\n
(OTC) derivatives.
\n
Level 3
\u2013 instruments valued using a
\n
valuation technique where at least one input
\n
which could have a signi\ufb01cant effect on the
\n
instrument\u2019s valuation, is not based on
\n
observable market data.
\n
Examples include non-derivative instruments
\n
which trade infrequently, certain syndicated
\n
and commercial mortgage loans, private
\n
equity, and derivatives with unobservable
\n
model inputs.
\n
Valuation techniques
\n
NatWest Group derives the fair value of its
\n
instruments differently depending on whether
\n
the instrument is a non-modelled or a
\n
modelled product.
\n
Non-modelled products
are valued directly
\n
from a price input, typically on a position-by-
\n
position basis. Examples include equities and
\n
most debt securities.
\n
Non-modelled products can fall into any fair
\n
value levelling hierarchy depending on the
\n
observable market activity, liquidity, and
\n
assessment of valuation uncertainty of the
\n
instruments. The assessment of fair value and
\n
the classi\ufb01cation of the instrument to a fair
\n
value level is subject to the valuation controls
\n
discussed in the Valuation control section.
\n
Modelled products
\u2013 valued using a pricing
\n
model range in complexity from
\n
comparatively vanilla products such as
\n
interest rate swaps and options (e.g., interest
\n
rate caps and \ufb02oors) through to more
\n
complex derivatives (e.g., balance guarantee
\n
swaps).
\n
For modelled products the fair value is
\n
derived using the model and the appropriate
\n
model inputs or parameters, as opposed to a
\n
cash price equivalent. Model inputs are taken
\n
either directly or indirectly from available
\n
data, where some inputs are also modelled.
\n
Fair value classi\ufb01cation of modelled
\n
instruments is either level 2 or level 3,
\n
depending on the product/model
\n
combination, the observability and quality of
\n
input parameters and other factors.
\n
All these must be assessed to classify a
\n
position. The modelled product is assigned to
\n
the lowest fair value hierarchy level of any
\n
signi\ufb01cant input used in that valuation.
\n
Most derivative instruments, for example
\n
vanilla interest rate swaps, foreign exchange
\n
swaps and liquid single name credit
\n
derivatives, are classi\ufb01ed as level 2. This is
\n
because they are vanilla products valued
\n
using standard market models and with
\n
observable inputs. Level 2 products range
\n
from vanilla to more complex products,
\n
where more complex products remain
\n
classi\ufb01ed as level 2 due to the low materiality
\n
of any unobservable inputs.
\n
Inputs to valuation models
\n
When using valuation techniques, the fair
\n
value can be signi\ufb01cantly affected by the
\n
choice of
valuation model
and underlying
\n
assumptions. Factors considered include the
\n
cash\ufb02ow amounts and timing of those cash
\n
\ufb02ows, and application of appropriate discount
\n
rates, incorporating both funding and credit
\n
risk. Values between and beyond available
\n
data points are obtained by interpolation and
\n
extrapolation. The principal inputs to these
\n
valuation techniques are as follows:
\n
Bond prices
\u2013 quoted prices are generally
\n
available for government bonds, certain
\n
corporate securities, and some mortgage-
\n
related products.
\n
Credit spreads/margins
\u2013 these re\ufb02ect credit
\n
default swap levels or the return required
\n
over a benchmark rate or index to
\n
compensate for the referenced credit risk.
\n
Where available, these are derived from the
\n
price of credit default swaps or other credit-
\n
based instruments, such as debt securities.
\n
When direct prices are not available, credit
\n
spreads/margins are determined with
\n
reference to available prices of entities with
\n
similar characteristics.
\n
Interest rates
\u2013 these are principally based on
\n
interest rate swap prices referencing
\n
benchmark interest rates. Interest rates,
\n
include SONIA (Sterling Overnight Interbank
\n
Average Rate) and other overnight rates.
\n
Other quoted interest rates may also be used
\n
from both the bond, and futures markets.
\n
Foreign currency exchange rates
\u2013 there are
\n
observable prices both for spot and forward
\n
contracts and futures in the world's major
\n
currencies.
\n
Equity and equity index prices
\u2013 quoted
\n
prices are generally readily available for
\n
equity shares listed on the world's major
\n
stock exchanges and for major indices on
\n
such shares.
\n
Price volatilities and correlations
\u2013 volatility is
\n
a measure of the tendency of a price to
\n
change with time. Correlation measures the
\n
degree which two or more prices or variables
\n
are observed to move together. Variables
\n
that move in the same direction show positive
\n
correlation; those that move in opposite
\n
directions are negatively correlated.
\n
Prepayment rates
\u2013 are used to re\ufb02ect how
\n
fast a pool of assets prepay. The fair value of
\n
a \ufb01nancial instrument that can be prepaid by
\n
the issuer or borrower differs from that of an
\n
instrument that cannot be prepaid. When
\n
valuing prepayable instruments, the value of
\n
this prepayment option is considered.
\n
Recovery rates/loss given default
\u2013 are used
\n
as an input to valuation models and reserves
\n
for asset-backed securities and other credit
\n
products as an indicator of severity of losses
\n
on default. Recovery rates are primarily
\n
sourced from market data providers, the
\n
value of the underlying collateral or inferred
\n
from observable credit spreads.
Valuation control
NatWest Group's control environment for the
determination of the fair value of \ufb01nancial
instruments includes formalised procedures
for the review and validation of fair values.
The review of market prices and inputs is
performed by an independent price
veri\ufb01cation (IPV) team.
IPV is a key element of the control
environment. Valuations are \ufb01rst performed
by the business which entered into the
transaction. These valuations are then
reviewed by the IPV team, independent of
those trading the \ufb01nancial instruments, in
light of available pricing evidence.
Independent pricing data is collated from a
range of sources. Each source is reviewed for
quality and the independent data applied in
the IPV processes using a formalised input
quality hierarchy. Consensus services are one
source of independent data and encompass
interest rate, currency, credit, and bond
markets, providing comprehensive coverage
of vanilla products and a wide selection of
exotic products.
Where measurement differences are
identi\ufb01ed through the IPV process these are
grouped by the quality hierarchy of the
independent data. If the size of the difference
exceeds de\ufb01ned thresholds, an adjustment is
made to bring the valuation to within the
independently calculated fair value range.
IPV takes place at least monthly, for all fair
value \ufb01nancial instruments. The IPV control
includes formalised reporting and escalation
of any valuation differences in breach of
established thresholds.
The quality and completeness of the
information gathered in the IPV process gives
an indication as to the liquidity and valuation
uncertainty of an instrument and forms part
of the information considered when
determining fair value hierarchy
classi\ufb01cations.
Initial fair value level classi\ufb01cation of a
\ufb01nancial instrument is carried out by the IPV
team. These initial classi\ufb01cations are subject
to senior management review. Particular
attention is paid to instruments transferring
from one level to another, new instrument
classes or products, instruments where the
transaction price is signi\ufb01cantly different from
the fair value and instruments where
valuation uncertainty is high.
Valuation Committees are made up of
valuation specialists and senior business
representatives from various functions and
oversees pricing, reserving and valuations
issues. These committees meet monthly to
review and ratify any methodology changes.
The Executive Valuation Committee meets
quarterly to address key material and
subjective valuation issues, to review items
escalated by Valuation Committees and to
discuss other relevant industry matters.
The Group model risk policy sets the policy
for model documentation, testing and review.
Governance of the model risk policy is carried
out by the Group Model Risk Oversight
Committee, which comprises model risk
owners and independent model experts. All
models are required to be independently
validated in accordance with the model risk
Policy.
Key areas of judgement
Over the years the business has simpli\ufb01ed,
with most products classi\ufb01ed as level 1 or 2
of the fair value hierarchy. However, the
diverse range of products historically traded
by NatWest Group means some products
remain classi\ufb01ed as level 3. Level 3 indicates
a signi\ufb01cant level of pricing uncertainty,
where expert judgement is used. As such,
extra disclosures are required in respect of
level 3 instruments.
In general, the degree of expert judgement
used and hence valuation uncertainty
depends on the degree of liquidity of an
instrument or input.
Where markets are liquid, little judgement is
required. However, when the information
regarding the liquidity in a particular market
is not clear, a judgement may need to be
made. For example, for an equity traded on
an exchange, daily volumes of trading can be
seen, but for an OTC derivative, assessing
the liquidity of the market with no central
exchange is more challenging.
The breadth and depth of the IPV data allows
for a rules-based quality assessment to be
made of market activity, liquidity, and pricing
uncertainty, which assists with the process of
allocation to an appropriate level. Where
suitable independent pricing information is
not readily available, the quality assessment
will result in the instrument being assessed as
level 3.
\n\n\n
The table below shows the assets and liabilities held by NatWest Group split by fair value hierarchy level. Level 1 are considered the most liquid instruments, and level 3 the most illiquid, valued using
\n
expert judgement and so carry the most signi\ufb01cant price uncertainty.
\n\n \n
2025
2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
-
33,556
96
33,652
-
34,761
278
35,039
Securities
9,586
3,299
-
12,885
8,772
5,106
-
13,878
Derivatives
Interest rate
-
32,382
360
32,742
-
37,026
473
37,499
Foreign exchange
-
27,878
103
27,981
-
40,687
110
40,797
Other
-
57
9
66
-
63
47
110
Other financial assets
Loans
-
35
533
568
-
288
565
853
Securities
25,528
16,964
152
42,644
23,943
13,641
209
37,793
Total financial assets held at fair value
35,114
114,171
1,253
150,538
32,715
131,572
1,682
165,969
As a % of total fair value assets
23%
76%
1%
20%
79%
1%
Liabilities
Trading liabilities
Deposits
-
41,284
-
41,284
-
43,966
-
43,966
Debt securities in issue
-
234
-
234
-
257
-
257
Short positions
6,172
1,331
1
7,504
8,766
1,724
1
10,491
Derivatives
Interest rate
-
26,589
169
26,758
-
31,253
279
31,532
Foreign exchange
-
26,988
54
27,042
-
40,240
66
40,306
Other
-
119
55
174
-
124
120
244
Other financial liabilities
Debt securities in issue
-
2,302
3
2,305
-
1,733
3
1,736
Other deposits
-
2,285
27
2,312
-
1,787
25
1,812
Subordinated liabilities
-
237
-
237
-
234
-
234
Total financial liabilities held at fair value
6,172
101,369
309
107,850
8,766
121,318
494
130,578
As a % of total fair value liabilities
6%
94%
0%
7%
93%
0%
\n
(1)
Transfers between levels are deemed to have occurred at the beginning
\n
of the quarter in which the instrument was transferred.
\n
(2)
For an analysis of debt securities held at mandatory fair value through profit or
\n
loss by issuer as well as ratings and derivatives, by type and contract, refer to
\n
Risk and capital management \u2013 Credit risk.
\n\n\n
Valuation adjustments
\n
When valuing \ufb01nancial instruments in the trading book, adjustments are made to mid-market
\n
valuations to cover bid-offer spread, funding and credit risk. These adjustments are presented in
\n
the table below:
\n\n \n
2025
2024
Adjustment
\u00a3m
\u00a3m
Funding valuation adjustments
(11)
123
Credit valuation adjustments
179
190
Bid-offer
60
76
Product and deal speci\ufb01c
124
157
Total
352
546
\n
The decrease in funding valuation adjustments was primarily driven by unwinding of a major
\n
portfolio. The decrease in credit valuation adjustments was driven by credit spreads tightening
\n
with the impacts of exposure changes largely offsetting. The decrease in bid-offer was driven by
\n
risk reduction and unwinding of a major portfolio. The decrease in product and deal speci\ufb01c was
\n
driven by the amortisation of deferred trade inception pro\ufb01ts partially offset by new trading
\n
activity.
\n
Funding valuation adjustments (FVA)
\n
FVA represents an estimate of the adjustment that a market participant would make to
\n
incorporate funding costs and bene\ufb01ts that arise in relation to derivative exposures. FVA is
\n
calculated as a portfolio level adjustment and can result in either a funding charge (positive) or
\n
funding bene\ufb01t (negative).
\n
Funding levels are applied to estimated potential future exposures. For uncollateralised
\n
derivatives, the exposure re\ufb02ects the future valuation of the derivative. For collateralised
\n
derivatives, the exposure re\ufb02ects the difference between the future valuation of the derivative
\n
and the level of collateral posted.
\n
Credit valuation adjustments (CVA)
\n
CVA represents an estimate of the adjustment to fair value that is made to incorporate the
\n
counterparty credit risk inherent in derivative exposures. CVA is calculated on a portfolio basis
\n
re\ufb02ecting an estimate of the amount a third party would charge to assume the credit risk.
\n
Collateral held under a credit support agreement is factored into the CVA calculation. In such
\n
cases where NatWest Group holds collateral against counterparty exposures, CVA is held to the
\n
extent that residual risk remains.
\n
FVA and CVA are actively managed by a credit and market risk hedging process, and therefore
\n
movements in CVA and FVA are partially offset by trading revenue on the hedges.
\n
Bid-offer
\n
Fair value positions are required to be marked to exit levels, represented by bid (long positions)
\n
or offer (short positions) levels. Non-derivative positions are typically marked directly to bid or
\n
offer prices. However derivative exposures are adjusted to exit levels by taking bid-offer reserves
\n
calculated on a portfolio basis. The reserving approach is based on current market bid-offer
\n
spreads and standard market bucketing of risk.
\n
Bid-offer spreads vary by maturity and risk type to re\ufb02ect different spreads in the market. For
\n
positions where there is no observable quote, the bid-offer spreads are widened in comparison to
\n
proxies to re\ufb02ect reduced liquidity or observability.
\n
Netting is applied on a portfolio basis to re\ufb02ect the value at which NatWest Group believes it
\n
could exit the net risk of the portfolio, rather than the sum of exit costs for each of the portfolio\u2019s
\n
individual trades. This is applied where the asset and liability positions are managed as a portfolio
\n
for risk and reporting purposes.
\n
Product and deal speci\ufb01c
\n
On initial recognition of \ufb01nancial assets and liabilities valued using valuation techniques which
\n
have a signi\ufb01cant dependence on information other than observable market data, any difference
\n
between the transaction price and that derived from the valuation technique is deferred. Such
\n
amounts are recognised in the income statement over the life of the transaction, when market
\n
data becomes observable, or when the transaction matures or is closed out as appropriate. On
\n
31 December 2025, net gains of \u00a3109 million (2024 - \u00a3139 million) were carried forward. During
\n
the year, net gains of \u00a3205 million (2024 - \u00a3218 million) were deferred and \u00a3235 million (2024 -
\n
\u00a3157 million) were recognised in the income statement.
\n
Where system-generated valuations do not accurately re\ufb02ect market prices, manual valuation
\n
adjustments are applied either at a position or portfolio level. Manual adjustments are subject to
\n
the scrutiny of independent control teams and are subject to monthly review by senior
\n
management.
\n
Own credit
\n
NatWest Group considers the effect of its own credit standing when valuing \ufb01nancial liabilities
\n
recorded at fair value. Own credit spread adjustments are made when valuing issued debt held
\n
at fair value, including issued structured notes. An own credit adjustment is applied to positions
\n
where it is believed that counterparties would consider NatWest Group\u2019s creditworthiness when
\n
pricing trades. Accumulated changes in fair value due to credit risk are \u00a357 million (2024 \u2013 \u00a344
\n
million).
\n\n\n
Level 3 additional information
\n
For illiquid assets and liabilities, classi\ufb01ed as level 3, additional information is provided on the valuation techniques used and price sensitivity of the products to those inputs. This is to enable the reader
\n
to gauge the level of uncertainty that arises from positions with signi\ufb01cant unobservable inputs or modelling parameters.
\n
Level 3 ranges of unobservable inputs
\n
The table below provides additional information on level 3 instruments and inputs. This shows the valuation technique used for the fair value calculation, the unobservable input and input range.
\n\n \n
2025
2024
Financial instrument
Valuation technique
Unobservable inputs
Units
Low
High
Low
High
Trading assets and Other financial assets
Loans
Price-based
Price
%
89
121
88
123
Discount cash \ufb02ow
Credit spreads
bps
34
81
36
93
Debt securities
Price-based
Price
%
-
111
-
116
Equity Shares
Price-based
Price
GBP
-
44,090
-
47,312
Price-based
Price
%
-
-
-
15
Discount cash \ufb02ow
Discount margin
%
-
-
9
13
Net asset valuation
Fund NAV
%
80
120
80
120
Derivative assets and liabilities
Credit derivatives
Credit derivative
Credit spreads
bps
16
133
15
86
pricing
Correlation
%
(15)
75
(15)
95
Option pricing
Volatility
%
30
75
30
80
Upfront points
%
-
99
-
99
Recovery rate
%
-
60
-
60
Interest rate & FX
Option pricing
Correlation
%
(50)
98
(50)
98
derivatives
Volatility
%
3
82
3
99
Constant Prepayment
Rate
%
2
25
2
20
Mean Reversion
%
-
13
-
20
In\ufb02ation volatility
%
1
2
1
2
In\ufb02ation rate
%
2
2
2
2
\n
(1)
Valuation for private equity investments may be estimated by looking at
\n
past prices of similar stocks and from valuation statements where
\n
valuations are usually derived from earnings measures such as EBITDA
\n
or net asset value (NAV). Similarly, for equity or bond fund investments,
\n
prices may be estimated from valuation or credit statements using NAV
\n
or similar measures.
\n
(2)
NatWest Group does not have any material liabilities measured at fair
\n
value that are issued with an inseparable third-party credit
\n
enhancement
.
\n
Level 3 sensitivities
\n
The level 3 sensitivities presented on the next page are calculated at a trade or low-level portfolio basis rather than an overall portfolio basis. As individual sensitivities are aggregated with no re\ufb02ection
\n
of the correlated nature between instruments, the overall portfolio sensitivity may not be accurately re\ufb02ected. For example, some portfolios may be negatively correlated to others, where a downwards
\n
movement in one asset would produce an upwards movement in another. However, due to the additive presentation of the above \ufb01gures this correlation impact cannot be displayed. As such, the
\n
actual potential downside sensitivity of the total portfolio may be less than the non-correlated sum of the additive \ufb01gures as shown in the table on the next page.
\n\n\n
Alternative assumptions
\n
Reasonably plausible alternative assumptions of unobservable inputs are determined based on a speci\ufb01ed target level of certainty of 90%.
\n
Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information considering consistency between
\n
different sources, variation over time, perceived tradability or otherwise of available quotes; consensus service dispersion ranges; volume of trading activity and market bias (e.g. one-way inventory);
\n
day 1 pro\ufb01t or loss arising on new trades; number and nature of market participants; market conditions; modelling consistency in the market; size and nature of risk; length of holding of position; and
\n
market intelligence.
\n
Other considerations
\n
Whilst certain inputs used to calculate CVA, FVA and own credit adjustments are not based on observable market data, the uncertainty of these inputs is not considered to have a signi\ufb01cant effect on
\n
the net valuation of the related derivative portfolios and issued debt.
\n
As such, the fair value levelling of the derivative portfolios and issued debt is not determined by CVA, FVA or own credit inputs. In addition, any fair value sensitivity driven by these inputs is not
\n
included in the level 3 sensitivities presented.
\n
The table below shows the favourable and unfavourable range of fair value of the level 3 assets and liabilities. This range incorporates the range of fair value inputs as described in the previous table.
\n\n \n
2025
2024
Level 3
Favourable
Unfavourable
Level 3
Favourable
Unfavourable
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
96
-
-
278
-
-
Derivatives
Interest rate
360
20
(10)
473
20
(20)
Foreign exchange
103
10
(10)
110
-
-
Other
9
-
-
47
-
-
Other financial assets
Loans
533
-
(10)
565
-
(10)
Securities
152
10
(20)
209
20
(30)
Total financial assets held at fair value
1,253
40
(50)
1,682
40
(60)
Liabilities
Trading liabilities
Short positions
1
-
-
1
-
-
Derivatives
Interest rate
169
10
(10)
279
10
(10)
Foreign exchange
54
-
-
66
-
-
Other
55
-
-
120
10
(10)
Other financial liabilities
Debt securities in issue
3
-
-
3
-
-
Other deposits
27
-
(20)
25
10
(20)
Total financial liabilities held at fair value
309
10
(30)
494
30
(40)
\n\n\n
Movement in level 3 assets and liabilities
\n
The following table shows the movement in level 3 assets and liabilities in the year.
\n\n \n
Other
Other
Other
Other
Derivatives
trading
financial
Total
Derivatives
trading
financial
Total
assets
assets (2)
assets (3)
assets
liabilities
liabilities (2)
liabilities
liabilities
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement
(1)
(145)
(3)
7
(141)
(136)
-
2
(134)
Amount recorded in the statement
of
comprehensive income
-
-
5
5
-
-
-
-
Level 3 transfers in
42
-
-
42
12
-
-
12
Level 3 transfers out
(41)
-
(15)
(56)
(13)
-
(1)
(14)
Purchases/originations
124
105
164
393
98
-
-
98
Settlements/other decreases
(39)
(89)
-
(128)
(46)
-
-
(46)
Sales
(100)
(197)
(250)
(547)
(105)
-
-
(105)
Foreign exchange and other adjustments
1
2
-
3
3
-
1
4
At 31 December
472
96
685
1,253
278
1
30
309
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
(12)
12
4
4
(31)
-
-
(31)
2024
At 1 January
823
223
915
1,961
685
3
3
691
Amounts recorded in the income statement
(1)
(122)
(17)
12
(127)
(121)
-
-
(121)
Amount recorded in the statement of
comprehensive income
-
-
13
13
-
-
-
-
Level 3 transfers in
7
1
56
64
1
2
25
28
Level 3 transfers out
(3)
(19)
(241)
(263)
(2)
(3)
-
(5)
Purchases/originations
147
118
117
382
121
1
-
122
Settlements/other decreases
(44)
(27)
(18)
(89)
(32)
-
-
(32)
Sales
(178)
-
(72)
(250)
(182)
(2)
-
(184)
Foreign exchange and other adjustments
-
(1)
(8)
(9)
(5)
-
-
(5)
At 31 December
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
83
1
12
96
56
-
-
56
\n
(1)
There were net losses on trading assets and liabilities of \u00a312 million
\n
(2024 - net losses of \u00a318 million) was included in income from trading
\n
activities. Net gains on other instruments of \u00a35 million (2024 - net gains
\n
of \u00a312 million) was included in other operating income or interest
\n
income as appropriate.
\n
(2)
Other trading assets and other trading liabilities comprise assets and
\n
liabilities held at fair value in trading portfolios.
\n
(3)
Other financial assets comprise fair value through other comprehensive
\n
income, designated as at fair value through profit or loss and other fair
\n
value through profit or loss.
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
The following table shows the carrying value and fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet.
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Items where
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
fair value
\u00a0
Carrying
\u00a0
Fair value hierarchy level
approximates
\u00a0
value
Fair value
Level 1
Level 2
Level 3
carrying value
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85.2
85.2
-
-
-
85.2
Settlement balances
0.6
0.6
-
-
-
0.6
Loans to banks
7.0
6.9
-
3.6
0.8
2.5
Loans to customers
418.9
414.5
-
33.1
381.4
-
Other financial assets - securities
36.6
36.6
15.4
15.1
6.1
-
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
93.0
93.0
-
-
-
93.0
Settlement balances
2.1
2.1
-
-
-
2.1
Loans to banks
6.0
5.9
-
1.8
0.5
3.6
Loans to customers
400.3
396.6
-
34.9
361.7
-
Other financial assets - securities
24.6
24.6
4.3
12.4
7.9
-
2025
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
44.1
44.1
-
36.2
3.8
4.1
Customer deposits
443.0
424.4
-
30.4
26.3
367.7
Settlement balances
0.9
0.9
-
-
-
0.9
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
63.0
63.6
-
51.9
11.7
-
Subordinated liabilities
5.9
6.1
-
6.1
-
-
Notes in circulation
3.2
3.2
-
-
-
3.2
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
31.5
31.2
-
23.9
3.0
4.3
Customer deposits
433.5
433.3
-
24.3
46.0
363.0
Settlement balances
1.7
1.7
-
-
-
1.7
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
57.5
57.6
-
48.9
8.7
-
Subordinated liabilities
5.9
6.0
-
6.0
-
-
Notes in circulation
3.3
3.3
-
-
-
3.3
\n
The assumptions and methodologies underlying the
calculation of fair values of \ufb01nancial instruments at the
balance sheet date are as follows:
Short-term \ufb01nancial instruments
For certain short-term \ufb01nancial instruments, including
but not limited to, cash and balances at central banks,
settlement balances, loans with short-term maturities,
notes in circulation and customer demand deposits,
carrying value is deemed a reasonable approximation
of fair value.
Loans to banks and customers
In estimating the fair value of net loans to customers
and banks measured at amortised cost, NatWest
Group\u2019s loans are segregated into appropriate portfolios
re\ufb02ecting the characteristics of the constituent loans.
Two principal methods are used to estimate fair value:
(a)
Contractual cash \ufb02ows that are discounted using a
market discount rate that incorporates the current
spread for the borrower or where this is not
observable, the spread for borrowers of a similar
credit standing.
(b) Expected cash \ufb02ows (unadjusted for credit losses)
are discounted at the current offer rate for the
same or similar products. The current methodology
caps all loan values at par rather than modelling
clients\u2019 option to repay loans early. This approach is
adopted for lending portfolios in Retail Banking,
Commercial & Institutional (SME loans) and Private
Banking & Wealth Management in order to re\ufb02ect
the homogeneous nature of these portfolios.
Debt securities and subordinated liabilities
Most debt securities are valued using quoted prices in
active markets or from quoted prices of similar \ufb01nancial
instruments. The remaining population is valued using
discounted cash\ufb02ows at current offer rates.
Bank and customer deposits
Fair values of deposits are estimated using discounted
cash \ufb02ow valuation techniques. Where required,
methodologies can be revised as additional information
and valuation inputs become available.12 Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair value and classi\ufb01ed as held-for-trading. Financial instruments are classi\ufb01ed as held-for-trading if they are held for the
purpose of selling or repurchasing them in the short term, to make a spread between purchase and sale price or held to take advantage of movements in prices and yields.
For accounting policy information refer to Accounting policy 3.8.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Assets
\u00a3m
\u00a3m
Loans
\u00a0 \u00a0
Reverse repos
27,656
27,127
Collateral given
5,701
7,367
Other loans
295
545
Total loans
33,652
35,039
Securities
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
2,120
2,077
- US
4,153
3,734
- Other
4,135
3,506
Financial institutions and corporate
2,477
4,561
Total securities
12,885
13,878
Total
46,537
48,917
Liabilities
\u00a0 \u00a0
Deposits
\u00a0 \u00a0
Repos
28,578
30,562
Collateral received
11,966
12,509
Other deposits
740
895
Total deposits
41,284
43,966
Debt securities in issue
234
257
Short positions
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
1,504
2,680
- US
1,161
1,677
- Other
4,137
4,755
Financial institutions and Corporate
702
1,379
Total short positions
7,504
10,491
Total
49,022
54,714
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00634": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.
3.9. Netting
Financial assets and \ufb01nancial liabilities are
offset, and the net amount presented on the
balance sheet when, and only when, we
currently have a legally enforceable right to
set off the recognised amounts and we intend
either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
We are party to a number of arrangements,
including master netting agreements, that
give us the right to offset \ufb01nancial assets and
\ufb01nancial liabilities, but where we do not intend
to settle the amounts net or simultaneously,
the assets and liabilities concerned are
presented separately on the balance sheet.
3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.
3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00633": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.
2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.
3.9. Netting
Financial assets and \ufb01nancial liabilities are
offset, and the net amount presented on the
balance sheet when, and only when, we
currently have a legally enforceable right to
set off the recognised amounts and we intend
either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
We are party to a number of arrangements,
including master netting agreements, that
give us the right to offset \ufb01nancial assets and
\ufb01nancial liabilities, but where we do not intend
to settle the amounts net or simultaneously,
the assets and liabilities concerned are
presented separately on the balance sheet.3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 9 Financial instruments - classi\ufb01cation
Financial instruments are contracts that give rise to a \ufb01nancial asset of one entity and a corresponding \ufb01nancial liability or equity instrument of a counterparty entity, such as cash,
derivatives, loans, deposits and settlement balances. This note presents \ufb01nancial instruments classi\ufb01ed in accordance with IFRS 9 \u2013 Financial Instruments.
Judgement: classi\ufb01cation of \ufb01nancial assets
Classi\ufb01cation of \ufb01nancial assets between amortised cost and fair
value through other comprehensive income requires a degree of
judgement in respect of business models and contractual
cash\ufb02ows.
\u2022
The business model criteria are assessed at a portfolio level
to determine whether assets are classi\ufb01ed as held to collect
or held to collect and sell. Information that is considered in
determining the applicable business model includes: the
portfolio\u2019s policies and objectives; how the performance and
risks of the portfolio are managed, evaluated and reported
to management; and the frequency, volume and timing of
sales in prior periods, sales expectation for future periods,
and the reasons for sales.
\u2022
The contractual cash \ufb02ow characteristics of \ufb01nancial assets
are assessed with reference to whether the cash \ufb02ows
represent solely payments of principal and interest (SPPI). A
level of judgement is made in assessing terms that could
change the contractual cash \ufb02ows so that it would not meet
the condition for SPPI, including contingent and leverage
features, non-recourse arrangements and features that
could modify the time value of money.
For accounting policy information refer to Accounting policies
3.8, 3.9 and 3.11.Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00632": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.
2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.
3.9. Netting
Financial assets and \ufb01nancial liabilities are
offset, and the net amount presented on the
balance sheet when, and only when, we
currently have a legally enforceable right to
set off the recognised amounts and we intend
either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
We are party to a number of arrangements,
including master netting agreements, that
give us the right to offset \ufb01nancial assets and
\ufb01nancial liabilities, but where we do not intend
to settle the amounts net or simultaneously,
the assets and liabilities concerned are
presented separately on the balance sheet.
3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.
3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00243": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.
2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 9 Financial instruments - classi\ufb01cation
Financial instruments are contracts that give rise to a \ufb01nancial asset of one entity and a corresponding \ufb01nancial liability or equity instrument of a counterparty entity, such as cash,
derivatives, loans, deposits and settlement balances. This note presents \ufb01nancial instruments classi\ufb01ed in accordance with IFRS 9 \u2013 Financial Instruments.
Judgement: classi\ufb01cation of \ufb01nancial assets
Classi\ufb01cation of \ufb01nancial assets between amortised cost and fair
value through other comprehensive income requires a degree of
judgement in respect of business models and contractual
cash\ufb02ows.
\u2022
The business model criteria are assessed at a portfolio level
to determine whether assets are classi\ufb01ed as held to collect
or held to collect and sell. Information that is considered in
determining the applicable business model includes: the
portfolio\u2019s policies and objectives; how the performance and
risks of the portfolio are managed, evaluated and reported
to management; and the frequency, volume and timing of
sales in prior periods, sales expectation for future periods,
and the reasons for sales.
\u2022
The contractual cash \ufb02ow characteristics of \ufb01nancial assets
are assessed with reference to whether the cash \ufb02ows
represent solely payments of principal and interest (SPPI). A
level of judgement is made in assessing terms that could
change the contractual cash \ufb02ows so that it would not meet
the condition for SPPI, including contingent and leverage
features, non-recourse arrangements and features that
could modify the time value of money.
For accounting policy information refer to Accounting policies
3.8, 3.9 and 3.11.
The following tables analyse \ufb01nancial assets and liabilities in accordance with the categories of \ufb01nancial
instruments in IFRS 9.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0
Amortised
Other
\u00a0
\u00a0
MFVTPL
DFV
FVOCI
cost
assets
Total
Assets
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
\u00a0\u00a0\u00a0
85,182
\u00a0
85,182
Trading assets
46,537
\u00a0\u00a0\u00a0\u00a0
46,537
Derivatives
(1)
60,789
\u00a0\u00a0\u00a0\u00a0
60,789
Settlement balances
\u00a0\u00a0\u00a0
645
\u00a0
645
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,958
\u00a0
6,958
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
418,881
\u00a0
418,881
Other financial assets
1,041
3
42,168
36,558
\u00a0
79,770
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,292
7,292
Other assets
\u00a0\u00a0\u00a0\u00a0
8,499
8,499
31 December 2025
108,367
3
42,168
548,224
15,791
714,553
Cash and balances at central banks
\u00a0\u00a0\u00a0
92,994
\u00a0
92,994
Trading assets
48,917
\u00a0\u00a0\u00a0\u00a0
48,917
Derivatives
(1)
78,406
\u00a0\u00a0\u00a0\u00a0
78,406
Settlement balances
\u00a0\u00a0\u00a0
2,085
\u00a0
2,085
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,030
\u00a0
6,030
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
400,326
\u00a0
400,326
Other financial assets
798
5
37,843
24,597
\u00a0
63,243
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,588
7,588
Other assets
\u00a0\u00a0\u00a0\u00a0
8,396
8,396
31 December 2024
128,121
5
37,843
526,032
15,984
707,985
\n
For the notes to this table refer to the following page.
Amortised
Other
Held-for-trading
DFV
cost
liabilities
Total
Liabilities
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank deposits
(4)
44,092
44,092
Customer deposits
442,998
442,998
Settlement balances
942
942
Trading liabilities
49,022
49,022
Derivatives
(1)
53,974
53,974
Other financial liabilities
(5)
4,617
62,982
67,599
Subordinated liabilities
237
5,886
6,123
Notes in circulation
3,164
3,164
Other liabilities
(6)
594
3,432
4,026
31 December 2025
102,996
4,854
560,658
3,432
671,940
Bank deposits
(4)
31,452
31,452
Customer deposits
433,490
433,490
Settlement balances
1,729
1,729
Trading liabilities
54,714
54,714
Derivatives
(1)
72,082
72,082
Other financial liabilities
(5)
3,548
57,539
61,087
Subordinated liabilities
234
5,902
6,136
Notes in circulation
3,316
3,316
Other liabilities
(6)
684
3,917
4,601
31 December 2024
126,796
3,782
534,112
3,917
668,607
\n
(1)
Includes net hedging derivatives assets of \u00a3535 million (2024 - \u00a3118 million)
\n
and net hedging derivatives liabilities of \u00a3356 million (2024 - \u00a3464 million).
\n
(2)
Includes items in the course of collection from other banks of \u00a3166 million
\n
(2024 - \u00a359 million).
\n
(3)
Includes finance lease receivables of \u00a38,971 million (2024 - \u00a38,998 million).
\n
(4)
Includes items in the course of transmission to other banks of \u00a3192 million
\n
(2024 - \u00a3136 million).
\n
(5)
The carrying amount of customer deposits designated at fair value through
\n
profit or loss is materially the same as the principal amount for both periods.
\n
No amounts have been recognised in the profit or loss for changes in credit
\n
risk associated with these liabilities as the changes are immaterial both during
\n
the period and cumulatively.
\n
(6)
Includes lease liabilities of \u00a3535 million (2024 - \u00a3630 million), held at amortised
\n
cost.
We originate loans that include features that change the contractual cash \ufb02ows based on the borrower meeting certain contractually speci\ufb01ed environmental, social and governance (ESG) targets.
These are known as ESG-linked, or sustainability-linked, loans. As part of the terms of these loans, the contractual interest rate is reduced or increased if the borrower meets, or fails to meet, speci\ufb01c
targets linked to the activity of the borrower, for example; reducing carbon emissions, increasing the level of diversity at Board level, or achieving a sustainable supply chain. ESG features are \ufb01rst
assessed to ascertain whether the adjustment to the contractual cash \ufb02ows results in a de minimis exposure to risks or volatility in those contractual cash \ufb02ows. If this is the case the classi\ufb01cation of
the loan is not affected. If the effect of the ESG feature is assessed as being more than de minimis, we apply judgement to ensure that the ESG features do not generate compensation for risks that
are not in line with a basic lending arrangement. This includes, amongst other aspects, a review of the consistency of the ESG targets with the asset or activity of the borrower, and consideration of
the targets within our risk appetite. Some of these loans were eligible under our climate and sustainable funding and \ufb01nancing inclusion (CSFFI) criteria, which underpinned our previous target to
provide \u00a3100 billion in climate and sustainable funding and \ufb01nancing between 1 July 2021 and the end of 2025. Our CSFFI criteria was replaced with our climate and transition \ufb01nance framework in
July 2025 alongside our new target to provide \u00a3200 billion in climate and transition \ufb01nance. Some of these loans continue to be eligible under the climate and transition \ufb01nance framework.
The table below analyses \ufb01nancial assets forming a component of ESG-linked loans and other products with contractual terms that could change the timing or amount of cash \ufb02ows. This is based on
balance sheet values as at 31 December and the maximum impact of the potential margin changes on these over a 12 month period.
\u00a0
2025
2024
\u00a0 \u00a0
Positive impact on
Negative impact on
\u00a0
Positive impact on
Negative impact on
\u00a0
Carrying value
product margin
product margin
Carrying value
product margin
product margin
\u00a0
\u00a3bn
bps
bps
\u00a3bn
bps
bps
Sustainability-linked loans
8.0
2.9
3.7
6.9
3.1
4.0
Other products
21.9
-
-
20.2
-
-
Lending subject to performance
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
triggers
29.9
\u00a0 \u00a0
27.1
\u00a0 \u00a0
Financial instruments \u2013 \ufb01nancial assets and liabilities that can be offset
The tables below present information on \ufb01nancial assets and \ufb01nancial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with
\ufb01nancial collateral received or given.
\u00a0
Instruments which can be offset
Potential for offset not recognised by IFRS
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Effect of master
\u00a0\u00a0
Net amount after
Instruments
\u00a0
\u00a0\u00a0\u00a0\u00a0
netting and similar
Cash
\u00a0
netting agreements and
outside netting
Balance sheet
\u00a0
Gross
IFRS offset
Balance sheet
agreements
collateral
Securities collateral
effect of related collateral
agreements
total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Derivative assets
77,408
(17,007)
60,401
(45,928)
(9,275)
(3,283)
1,915
388
60,789
Derivative liabilities
71,589
(17,951)
53,638
(45,928)
(4,281)
(1,256)
2,173
336
53,974
Net position
(1)
5,819
944
6,763
-
(4,994)
(2,027)
(258)
52
6,815
Trading reverse repos
44,729
(17,129)
27,600
(465)
-
(26,882)
253
56
27,656
Trading repos
43,648
(17,129)
26,519
(465)
-
(26,054)
-
2,059
28,578
Net position
1,081
-
1,081
-
-
(828)
253
(2,003)
(922)
Non trading reverse repos
50,889
(14,470)
36,419
(9)
-
(36,410)
-
-
36,419
Non trading repos
44,082
(14,470)
29,612
(9)
-
(29,603)
-
-
29,612
Net position
6,807
-
6,807
-
-
(6,807)
-
-
6,807
2024
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Derivative assets
96,624
(18,746)
77,878
(61,883)
(10,005)
(4,072)
1,918
528
78,406
Derivative liabilities
92,620
(21,027)
71,593
(61,883)
(5,801)
(896)
3,013
489
72,082
Net position
(1)
4,004
2,281
6,285
-
(4,204)
(3,176)
(1,095)
39
6,324
Trading reverse repos
42,261
(15,174)
27,087
(1,469)
-
(25,406)
212
40
27,127
Trading repos
45,033
(15,174)
29,859
(1,469)
-
(28,390)
-
703
30,562
Net position
(2,772)
-
(2,772)
\u00a0
-
2,984
212
(663)
(3,435)
Non trading reverse repos
45,600
(8,709)
36,891
(80)
-
(36,811)
-
-
36,891
Non trading repos
22,288
(8,709)
13,579
(80)
-
(13,499)
-
-
13,579
Net position
23,312
-
23,312
-
-
(23,312)
-
-
23,312
\n
(1)
Net IFRS offset balance of \u00a3944 million (2024 - \u00a32,281 million) relates to variation margin netting re\ufb02ected on other balance sheet lines.
10 Financial instruments - valuation
Financial instruments recognised at fair value are revalued using techniques that can include observable inputs (pricing information that is readily available in the market, for example UK
Government securities), and unobservable inputs (pricing information that is not readily available, for example unlisted securities). Gains and losses are recognised in the income statement
and statement of comprehensive income as appropriate.
This note presents information on the valuation of \ufb01nancial instruments.
The table below provides an overview of the various sections contained within the note.
Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.
Valuation
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Page
Financial instruments
\u00a0
Critical accounting policy: Fair value
330
Valuation
\u00a0
Fair value hierarchy
(D)
331
Valuation techniques
(D)
331
Inputs to valuation models
(D)
331
Valuation control
(D)
332
Key areas of judgement
(D)
332
Assets and liabilities split by fair value hierarchy level
(T)
333
Valuation adjustments
\u00a0
Fair value adjustments made
(T)
334
Funding valuation adjustments (FVA)
(D)
334
Credit valuation adjustments (CVA)
(D)
334
Bid-offer
(D)
334
Product and deal speci\ufb01c
(D)
334
Own credit
(D)
334
Level 3 additional information
\u00a0
Level 3 ranges of unobservable inputs
(D)
335
Level 3 instruments, valuation techniques and inputs
(T)
335
Level 3 sensitivities
(D)
335
Alternative assumptions
(D)
336
Other considerations
(D)
336
High and low range of fair value of level 3 assets and liabilities
(T)
336
Movement in level 3 assets and liabilities over the reporting period
(D)
337
Movement in level 3 assets and liabilities
(T)
337
Fair value of \ufb01nancial instruments measured at amortised cost
\u00a0
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
338
(D) = Descriptive; (T) = Table
\u00a0
\n\n\n\n
Fair value hierarchy
\n
Financial instruments carried at fair value
\n
have been classi\ufb01ed under the fair value
\n
hierarchy. The classi\ufb01cation ranges from level
\n
1 to level 3, with more expert judgement and
\n
price uncertainty for those classi\ufb01ed at level
\n
3.
\n
The determination of an instrument\u2019s level
\n
cannot be made at a global product level as
\n
a single product type can be in more than
\n
one level. For example, a single name
\n
corporate credit default swap could be in level
\n
2 or level 3 depending on the level of market
\n
activity for the referenced entity.
\n
Level 1
\u2013 instruments valued using unadjusted
\n
quoted prices in active and liquid markets, for
\n
identical \ufb01nancial instruments. Examples
\n
include government bonds, listed equity
\n
shares and certain exchange-traded
\n
derivatives.
\n
Level 2
\u2013 instruments valued using valuation
\n
techniques that have observable inputs.
\n
Observable inputs are those that are readily
\n
available with limited adjustments required.
\n
Examples include most government agency
\n
securities, investment-grade corporate bonds,
\n
certain mortgage products - including
\n
collateralised loan obligations (CLOs), most
\n
bank loans, repos and reverse repos, state
\n
and municipal obligations, most notes issued,
\n
certain money market securities, loan
\n
commitments and most over the counter
\n
(OTC) derivatives.
\n
Level 3
\u2013 instruments valued using a
\n
valuation technique where at least one input
\n
which could have a signi\ufb01cant effect on the
\n
instrument\u2019s valuation, is not based on
\n
observable market data.
\n
Examples include non-derivative instruments
\n
which trade infrequently, certain syndicated
\n
and commercial mortgage loans, private
\n
equity, and derivatives with unobservable
\n
model inputs.
\n
Valuation techniques
\n
NatWest Group derives the fair value of its
\n
instruments differently depending on whether
\n
the instrument is a non-modelled or a
\n
modelled product.
\n
Non-modelled products
are valued directly
\n
from a price input, typically on a position-by-
\n
position basis. Examples include equities and
\n
most debt securities.
\n
Non-modelled products can fall into any fair
\n
value levelling hierarchy depending on the
\n
observable market activity, liquidity, and
\n
assessment of valuation uncertainty of the
\n
instruments. The assessment of fair value and
\n
the classi\ufb01cation of the instrument to a fair
\n
value level is subject to the valuation controls
\n
discussed in the Valuation control section.
\n
Modelled products
\u2013 valued using a pricing
\n
model range in complexity from
\n
comparatively vanilla products such as
\n
interest rate swaps and options (e.g., interest
\n
rate caps and \ufb02oors) through to more
\n
complex derivatives (e.g., balance guarantee
\n
swaps).
\n
For modelled products the fair value is
\n
derived using the model and the appropriate
\n
model inputs or parameters, as opposed to a
\n
cash price equivalent. Model inputs are taken
\n
either directly or indirectly from available
\n
data, where some inputs are also modelled.
\n
Fair value classi\ufb01cation of modelled
\n
instruments is either level 2 or level 3,
\n
depending on the product/model
\n
combination, the observability and quality of
\n
input parameters and other factors.
\n
All these must be assessed to classify a
\n
position. The modelled product is assigned to
\n
the lowest fair value hierarchy level of any
\n
signi\ufb01cant input used in that valuation.
\n
Most derivative instruments, for example
\n
vanilla interest rate swaps, foreign exchange
\n
swaps and liquid single name credit
\n
derivatives, are classi\ufb01ed as level 2. This is
\n
because they are vanilla products valued
\n
using standard market models and with
\n
observable inputs. Level 2 products range
\n
from vanilla to more complex products,
\n
where more complex products remain
\n
classi\ufb01ed as level 2 due to the low materiality
\n
of any unobservable inputs.
\n
Inputs to valuation models
\n
When using valuation techniques, the fair
\n
value can be signi\ufb01cantly affected by the
\n
choice of
valuation model
and underlying
\n
assumptions. Factors considered include the
\n
cash\ufb02ow amounts and timing of those cash
\n
\ufb02ows, and application of appropriate discount
\n
rates, incorporating both funding and credit
\n
risk. Values between and beyond available
\n
data points are obtained by interpolation and
\n
extrapolation. The principal inputs to these
\n
valuation techniques are as follows:
\n
Bond prices
\u2013 quoted prices are generally
\n
available for government bonds, certain
\n
corporate securities, and some mortgage-
\n
related products.
\n
Credit spreads/margins
\u2013 these re\ufb02ect credit
\n
default swap levels or the return required
\n
over a benchmark rate or index to
\n
compensate for the referenced credit risk.
\n
Where available, these are derived from the
\n
price of credit default swaps or other credit-
\n
based instruments, such as debt securities.
\n
When direct prices are not available, credit
\n
spreads/margins are determined with
\n
reference to available prices of entities with
\n
similar characteristics.
\n
Interest rates
\u2013 these are principally based on
\n
interest rate swap prices referencing
\n
benchmark interest rates. Interest rates,
\n
include SONIA (Sterling Overnight Interbank
\n
Average Rate) and other overnight rates.
\n
Other quoted interest rates may also be used
\n
from both the bond, and futures markets.
\n
Foreign currency exchange rates
\u2013 there are
\n
observable prices both for spot and forward
\n
contracts and futures in the world's major
\n
currencies.
\n
Equity and equity index prices
\u2013 quoted
\n
prices are generally readily available for
\n
equity shares listed on the world's major
\n
stock exchanges and for major indices on
\n
such shares.
\n
Price volatilities and correlations
\u2013 volatility is
\n
a measure of the tendency of a price to
\n
change with time. Correlation measures the
\n
degree which two or more prices or variables
\n
are observed to move together. Variables
\n
that move in the same direction show positive
\n
correlation; those that move in opposite
\n
directions are negatively correlated.
\n
Prepayment rates
\u2013 are used to re\ufb02ect how
\n
fast a pool of assets prepay. The fair value of
\n
a \ufb01nancial instrument that can be prepaid by
\n
the issuer or borrower differs from that of an
\n
instrument that cannot be prepaid. When
\n
valuing prepayable instruments, the value of
\n
this prepayment option is considered.
\n
Recovery rates/loss given default
\u2013 are used
\n
as an input to valuation models and reserves
\n
for asset-backed securities and other credit
\n
products as an indicator of severity of losses
\n
on default. Recovery rates are primarily
\n
sourced from market data providers, the
\n
value of the underlying collateral or inferred
\n
from observable credit spreads.
Valuation control
NatWest Group's control environment for the
determination of the fair value of \ufb01nancial
instruments includes formalised procedures
for the review and validation of fair values.
The review of market prices and inputs is
performed by an independent price
veri\ufb01cation (IPV) team.
IPV is a key element of the control
environment. Valuations are \ufb01rst performed
by the business which entered into the
transaction. These valuations are then
reviewed by the IPV team, independent of
those trading the \ufb01nancial instruments, in
light of available pricing evidence.
Independent pricing data is collated from a
range of sources. Each source is reviewed for
quality and the independent data applied in
the IPV processes using a formalised input
quality hierarchy. Consensus services are one
source of independent data and encompass
interest rate, currency, credit, and bond
markets, providing comprehensive coverage
of vanilla products and a wide selection of
exotic products.
Where measurement differences are
identi\ufb01ed through the IPV process these are
grouped by the quality hierarchy of the
independent data. If the size of the difference
exceeds de\ufb01ned thresholds, an adjustment is
made to bring the valuation to within the
independently calculated fair value range.
IPV takes place at least monthly, for all fair
value \ufb01nancial instruments. The IPV control
includes formalised reporting and escalation
of any valuation differences in breach of
established thresholds.
The quality and completeness of the
information gathered in the IPV process gives
an indication as to the liquidity and valuation
uncertainty of an instrument and forms part
of the information considered when
determining fair value hierarchy
classi\ufb01cations.
Initial fair value level classi\ufb01cation of a
\ufb01nancial instrument is carried out by the IPV
team. These initial classi\ufb01cations are subject
to senior management review. Particular
attention is paid to instruments transferring
from one level to another, new instrument
classes or products, instruments where the
transaction price is signi\ufb01cantly different from
the fair value and instruments where
valuation uncertainty is high.
Valuation Committees are made up of
valuation specialists and senior business
representatives from various functions and
oversees pricing, reserving and valuations
issues. These committees meet monthly to
review and ratify any methodology changes.
The Executive Valuation Committee meets
quarterly to address key material and
subjective valuation issues, to review items
escalated by Valuation Committees and to
discuss other relevant industry matters.
The Group model risk policy sets the policy
for model documentation, testing and review.
Governance of the model risk policy is carried
out by the Group Model Risk Oversight
Committee, which comprises model risk
owners and independent model experts. All
models are required to be independently
validated in accordance with the model risk
Policy.
Key areas of judgement
Over the years the business has simpli\ufb01ed,
with most products classi\ufb01ed as level 1 or 2
of the fair value hierarchy. However, the
diverse range of products historically traded
by NatWest Group means some products
remain classi\ufb01ed as level 3. Level 3 indicates
a signi\ufb01cant level of pricing uncertainty,
where expert judgement is used. As such,
extra disclosures are required in respect of
level 3 instruments.
In general, the degree of expert judgement
used and hence valuation uncertainty
depends on the degree of liquidity of an
instrument or input.
Where markets are liquid, little judgement is
required. However, when the information
regarding the liquidity in a particular market
is not clear, a judgement may need to be
made. For example, for an equity traded on
an exchange, daily volumes of trading can be
seen, but for an OTC derivative, assessing
the liquidity of the market with no central
exchange is more challenging.
The breadth and depth of the IPV data allows
for a rules-based quality assessment to be
made of market activity, liquidity, and pricing
uncertainty, which assists with the process of
allocation to an appropriate level. Where
suitable independent pricing information is
not readily available, the quality assessment
will result in the instrument being assessed as
level 3.
\n\n\n
The table below shows the assets and liabilities held by NatWest Group split by fair value hierarchy level. Level 1 are considered the most liquid instruments, and level 3 the most illiquid, valued using
\n
expert judgement and so carry the most signi\ufb01cant price uncertainty.
\n\n \n
2025
2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
-
33,556
96
33,652
-
34,761
278
35,039
Securities
9,586
3,299
-
12,885
8,772
5,106
-
13,878
Derivatives
Interest rate
-
32,382
360
32,742
-
37,026
473
37,499
Foreign exchange
-
27,878
103
27,981
-
40,687
110
40,797
Other
-
57
9
66
-
63
47
110
Other financial assets
Loans
-
35
533
568
-
288
565
853
Securities
25,528
16,964
152
42,644
23,943
13,641
209
37,793
Total financial assets held at fair value
35,114
114,171
1,253
150,538
32,715
131,572
1,682
165,969
As a % of total fair value assets
23%
76%
1%
20%
79%
1%
Liabilities
Trading liabilities
Deposits
-
41,284
-
41,284
-
43,966
-
43,966
Debt securities in issue
-
234
-
234
-
257
-
257
Short positions
6,172
1,331
1
7,504
8,766
1,724
1
10,491
Derivatives
Interest rate
-
26,589
169
26,758
-
31,253
279
31,532
Foreign exchange
-
26,988
54
27,042
-
40,240
66
40,306
Other
-
119
55
174
-
124
120
244
Other financial liabilities
Debt securities in issue
-
2,302
3
2,305
-
1,733
3
1,736
Other deposits
-
2,285
27
2,312
-
1,787
25
1,812
Subordinated liabilities
-
237
-
237
-
234
-
234
Total financial liabilities held at fair value
6,172
101,369
309
107,850
8,766
121,318
494
130,578
As a % of total fair value liabilities
6%
94%
0%
7%
93%
0%
\n
(1)
Transfers between levels are deemed to have occurred at the beginning
\n
of the quarter in which the instrument was transferred.
\n
(2)
For an analysis of debt securities held at mandatory fair value through profit or
\n
loss by issuer as well as ratings and derivatives, by type and contract, refer to
\n
Risk and capital management \u2013 Credit risk.
\n\n\n
Valuation adjustments
\n
When valuing \ufb01nancial instruments in the trading book, adjustments are made to mid-market
\n
valuations to cover bid-offer spread, funding and credit risk. These adjustments are presented in
\n
the table below:
\n\n \n
2025
2024
Adjustment
\u00a3m
\u00a3m
Funding valuation adjustments
(11)
123
Credit valuation adjustments
179
190
Bid-offer
60
76
Product and deal speci\ufb01c
124
157
Total
352
546
\n
The decrease in funding valuation adjustments was primarily driven by unwinding of a major
\n
portfolio. The decrease in credit valuation adjustments was driven by credit spreads tightening
\n
with the impacts of exposure changes largely offsetting. The decrease in bid-offer was driven by
\n
risk reduction and unwinding of a major portfolio. The decrease in product and deal speci\ufb01c was
\n
driven by the amortisation of deferred trade inception pro\ufb01ts partially offset by new trading
\n
activity.
\n
Funding valuation adjustments (FVA)
\n
FVA represents an estimate of the adjustment that a market participant would make to
\n
incorporate funding costs and bene\ufb01ts that arise in relation to derivative exposures. FVA is
\n
calculated as a portfolio level adjustment and can result in either a funding charge (positive) or
\n
funding bene\ufb01t (negative).
\n
Funding levels are applied to estimated potential future exposures. For uncollateralised
\n
derivatives, the exposure re\ufb02ects the future valuation of the derivative. For collateralised
\n
derivatives, the exposure re\ufb02ects the difference between the future valuation of the derivative
\n
and the level of collateral posted.
\n
Credit valuation adjustments (CVA)
\n
CVA represents an estimate of the adjustment to fair value that is made to incorporate the
\n
counterparty credit risk inherent in derivative exposures. CVA is calculated on a portfolio basis
\n
re\ufb02ecting an estimate of the amount a third party would charge to assume the credit risk.
\n
Collateral held under a credit support agreement is factored into the CVA calculation. In such
\n
cases where NatWest Group holds collateral against counterparty exposures, CVA is held to the
\n
extent that residual risk remains.
\n
FVA and CVA are actively managed by a credit and market risk hedging process, and therefore
\n
movements in CVA and FVA are partially offset by trading revenue on the hedges.
\n
Bid-offer
\n
Fair value positions are required to be marked to exit levels, represented by bid (long positions)
\n
or offer (short positions) levels. Non-derivative positions are typically marked directly to bid or
\n
offer prices. However derivative exposures are adjusted to exit levels by taking bid-offer reserves
\n
calculated on a portfolio basis. The reserving approach is based on current market bid-offer
\n
spreads and standard market bucketing of risk.
\n
Bid-offer spreads vary by maturity and risk type to re\ufb02ect different spreads in the market. For
\n
positions where there is no observable quote, the bid-offer spreads are widened in comparison to
\n
proxies to re\ufb02ect reduced liquidity or observability.
\n
Netting is applied on a portfolio basis to re\ufb02ect the value at which NatWest Group believes it
\n
could exit the net risk of the portfolio, rather than the sum of exit costs for each of the portfolio\u2019s
\n
individual trades. This is applied where the asset and liability positions are managed as a portfolio
\n
for risk and reporting purposes.
\n
Product and deal speci\ufb01c
\n
On initial recognition of \ufb01nancial assets and liabilities valued using valuation techniques which
\n
have a signi\ufb01cant dependence on information other than observable market data, any difference
\n
between the transaction price and that derived from the valuation technique is deferred. Such
\n
amounts are recognised in the income statement over the life of the transaction, when market
\n
data becomes observable, or when the transaction matures or is closed out as appropriate. On
\n
31 December 2025, net gains of \u00a3109 million (2024 - \u00a3139 million) were carried forward. During
\n
the year, net gains of \u00a3205 million (2024 - \u00a3218 million) were deferred and \u00a3235 million (2024 -
\n
\u00a3157 million) were recognised in the income statement.
\n
Where system-generated valuations do not accurately re\ufb02ect market prices, manual valuation
\n
adjustments are applied either at a position or portfolio level. Manual adjustments are subject to
\n
the scrutiny of independent control teams and are subject to monthly review by senior
\n
management.
\n
Own credit
\n
NatWest Group considers the effect of its own credit standing when valuing \ufb01nancial liabilities
\n
recorded at fair value. Own credit spread adjustments are made when valuing issued debt held
\n
at fair value, including issued structured notes. An own credit adjustment is applied to positions
\n
where it is believed that counterparties would consider NatWest Group\u2019s creditworthiness when
\n
pricing trades. Accumulated changes in fair value due to credit risk are \u00a357 million (2024 \u2013 \u00a344
\n
million).
\n\n\n
Level 3 additional information
\n
For illiquid assets and liabilities, classi\ufb01ed as level 3, additional information is provided on the valuation techniques used and price sensitivity of the products to those inputs. This is to enable the reader
\n
to gauge the level of uncertainty that arises from positions with signi\ufb01cant unobservable inputs or modelling parameters.
\n
Level 3 ranges of unobservable inputs
\n
The table below provides additional information on level 3 instruments and inputs. This shows the valuation technique used for the fair value calculation, the unobservable input and input range.
\n\n \n
2025
2024
Financial instrument
Valuation technique
Unobservable inputs
Units
Low
High
Low
High
Trading assets and Other financial assets
Loans
Price-based
Price
%
89
121
88
123
Discount cash \ufb02ow
Credit spreads
bps
34
81
36
93
Debt securities
Price-based
Price
%
-
111
-
116
Equity Shares
Price-based
Price
GBP
-
44,090
-
47,312
Price-based
Price
%
-
-
-
15
Discount cash \ufb02ow
Discount margin
%
-
-
9
13
Net asset valuation
Fund NAV
%
80
120
80
120
Derivative assets and liabilities
Credit derivatives
Credit derivative
Credit spreads
bps
16
133
15
86
pricing
Correlation
%
(15)
75
(15)
95
Option pricing
Volatility
%
30
75
30
80
Upfront points
%
-
99
-
99
Recovery rate
%
-
60
-
60
Interest rate & FX
Option pricing
Correlation
%
(50)
98
(50)
98
derivatives
Volatility
%
3
82
3
99
Constant Prepayment
Rate
%
2
25
2
20
Mean Reversion
%
-
13
-
20
In\ufb02ation volatility
%
1
2
1
2
In\ufb02ation rate
%
2
2
2
2
\n
(1)
Valuation for private equity investments may be estimated by looking at
\n
past prices of similar stocks and from valuation statements where
\n
valuations are usually derived from earnings measures such as EBITDA
\n
or net asset value (NAV). Similarly, for equity or bond fund investments,
\n
prices may be estimated from valuation or credit statements using NAV
\n
or similar measures.
\n
(2)
NatWest Group does not have any material liabilities measured at fair
\n
value that are issued with an inseparable third-party credit
\n
enhancement
.
\n
Level 3 sensitivities
\n
The level 3 sensitivities presented on the next page are calculated at a trade or low-level portfolio basis rather than an overall portfolio basis. As individual sensitivities are aggregated with no re\ufb02ection
\n
of the correlated nature between instruments, the overall portfolio sensitivity may not be accurately re\ufb02ected. For example, some portfolios may be negatively correlated to others, where a downwards
\n
movement in one asset would produce an upwards movement in another. However, due to the additive presentation of the above \ufb01gures this correlation impact cannot be displayed. As such, the
\n
actual potential downside sensitivity of the total portfolio may be less than the non-correlated sum of the additive \ufb01gures as shown in the table on the next page.
\n\n\n
Alternative assumptions
\n
Reasonably plausible alternative assumptions of unobservable inputs are determined based on a speci\ufb01ed target level of certainty of 90%.
\n
Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information considering consistency between
\n
different sources, variation over time, perceived tradability or otherwise of available quotes; consensus service dispersion ranges; volume of trading activity and market bias (e.g. one-way inventory);
\n
day 1 pro\ufb01t or loss arising on new trades; number and nature of market participants; market conditions; modelling consistency in the market; size and nature of risk; length of holding of position; and
\n
market intelligence.
\n
Other considerations
\n
Whilst certain inputs used to calculate CVA, FVA and own credit adjustments are not based on observable market data, the uncertainty of these inputs is not considered to have a signi\ufb01cant effect on
\n
the net valuation of the related derivative portfolios and issued debt.
\n
As such, the fair value levelling of the derivative portfolios and issued debt is not determined by CVA, FVA or own credit inputs. In addition, any fair value sensitivity driven by these inputs is not
\n
included in the level 3 sensitivities presented.
\n
The table below shows the favourable and unfavourable range of fair value of the level 3 assets and liabilities. This range incorporates the range of fair value inputs as described in the previous table.
\n\n \n
2025
2024
Level 3
Favourable
Unfavourable
Level 3
Favourable
Unfavourable
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
96
-
-
278
-
-
Derivatives
Interest rate
360
20
(10)
473
20
(20)
Foreign exchange
103
10
(10)
110
-
-
Other
9
-
-
47
-
-
Other financial assets
Loans
533
-
(10)
565
-
(10)
Securities
152
10
(20)
209
20
(30)
Total financial assets held at fair value
1,253
40
(50)
1,682
40
(60)
Liabilities
Trading liabilities
Short positions
1
-
-
1
-
-
Derivatives
Interest rate
169
10
(10)
279
10
(10)
Foreign exchange
54
-
-
66
-
-
Other
55
-
-
120
10
(10)
Other financial liabilities
Debt securities in issue
3
-
-
3
-
-
Other deposits
27
-
(20)
25
10
(20)
Total financial liabilities held at fair value
309
10
(30)
494
30
(40)
\n\n\n
Movement in level 3 assets and liabilities
\n
The following table shows the movement in level 3 assets and liabilities in the year.
\n\n \n
Other
Other
Other
Other
Derivatives
trading
financial
Total
Derivatives
trading
financial
Total
assets
assets (2)
assets (3)
assets
liabilities
liabilities (2)
liabilities
liabilities
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement
(1)
(145)
(3)
7
(141)
(136)
-
2
(134)
Amount recorded in the statement
of
comprehensive income
-
-
5
5
-
-
-
-
Level 3 transfers in
42
-
-
42
12
-
-
12
Level 3 transfers out
(41)
-
(15)
(56)
(13)
-
(1)
(14)
Purchases/originations
124
105
164
393
98
-
-
98
Settlements/other decreases
(39)
(89)
-
(128)
(46)
-
-
(46)
Sales
(100)
(197)
(250)
(547)
(105)
-
-
(105)
Foreign exchange and other adjustments
1
2
-
3
3
-
1
4
At 31 December
472
96
685
1,253
278
1
30
309
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
(12)
12
4
4
(31)
-
-
(31)
2024
At 1 January
823
223
915
1,961
685
3
3
691
Amounts recorded in the income statement
(1)
(122)
(17)
12
(127)
(121)
-
-
(121)
Amount recorded in the statement of
comprehensive income
-
-
13
13
-
-
-
-
Level 3 transfers in
7
1
56
64
1
2
25
28
Level 3 transfers out
(3)
(19)
(241)
(263)
(2)
(3)
-
(5)
Purchases/originations
147
118
117
382
121
1
-
122
Settlements/other decreases
(44)
(27)
(18)
(89)
(32)
-
-
(32)
Sales
(178)
-
(72)
(250)
(182)
(2)
-
(184)
Foreign exchange and other adjustments
-
(1)
(8)
(9)
(5)
-
-
(5)
At 31 December
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
83
1
12
96
56
-
-
56
\n
(1)
There were net losses on trading assets and liabilities of \u00a312 million
\n
(2024 - net losses of \u00a318 million) was included in income from trading
\n
activities. Net gains on other instruments of \u00a35 million (2024 - net gains
\n
of \u00a312 million) was included in other operating income or interest
\n
income as appropriate.
\n
(2)
Other trading assets and other trading liabilities comprise assets and
\n
liabilities held at fair value in trading portfolios.
\n
(3)
Other financial assets comprise fair value through other comprehensive
\n
income, designated as at fair value through profit or loss and other fair
\n
value through profit or loss.
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
The following table shows the carrying value and fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet.
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Items where
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
fair value
\u00a0
Carrying
\u00a0
Fair value hierarchy level
approximates
\u00a0
value
Fair value
Level 1
Level 2
Level 3
carrying value
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85.2
85.2
-
-
-
85.2
Settlement balances
0.6
0.6
-
-
-
0.6
Loans to banks
7.0
6.9
-
3.6
0.8
2.5
Loans to customers
418.9
414.5
-
33.1
381.4
-
Other financial assets - securities
36.6
36.6
15.4
15.1
6.1
-
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
93.0
93.0
-
-
-
93.0
Settlement balances
2.1
2.1
-
-
-
2.1
Loans to banks
6.0
5.9
-
1.8
0.5
3.6
Loans to customers
400.3
396.6
-
34.9
361.7
-
Other financial assets - securities
24.6
24.6
4.3
12.4
7.9
-
2025
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
44.1
44.1
-
36.2
3.8
4.1
Customer deposits
443.0
424.4
-
30.4
26.3
367.7
Settlement balances
0.9
0.9
-
-
-
0.9
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
63.0
63.6
-
51.9
11.7
-
Subordinated liabilities
5.9
6.1
-
6.1
-
-
Notes in circulation
3.2
3.2
-
-
-
3.2
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
31.5
31.2
-
23.9
3.0
4.3
Customer deposits
433.5
433.3
-
24.3
46.0
363.0
Settlement balances
1.7
1.7
-
-
-
1.7
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
57.5
57.6
-
48.9
8.7
-
Subordinated liabilities
5.9
6.0
-
6.0
-
-
Notes in circulation
3.3
3.3
-
-
-
3.3
\n
The assumptions and methodologies underlying the
calculation of fair values of \ufb01nancial instruments at the
balance sheet date are as follows:
Short-term \ufb01nancial instruments
For certain short-term \ufb01nancial instruments, including
but not limited to, cash and balances at central banks,
settlement balances, loans with short-term maturities,
notes in circulation and customer demand deposits,
carrying value is deemed a reasonable approximation
of fair value.
Loans to banks and customers
In estimating the fair value of net loans to customers
and banks measured at amortised cost, NatWest
Group\u2019s loans are segregated into appropriate portfolios
re\ufb02ecting the characteristics of the constituent loans.
Two principal methods are used to estimate fair value:
(a)
Contractual cash \ufb02ows that are discounted using a
market discount rate that incorporates the current
spread for the borrower or where this is not
observable, the spread for borrowers of a similar
credit standing.
(b) Expected cash \ufb02ows (unadjusted for credit losses)
are discounted at the current offer rate for the
same or similar products. The current methodology
caps all loan values at par rather than modelling
clients\u2019 option to repay loans early. This approach is
adopted for lending portfolios in Retail Banking,
Commercial & Institutional (SME loans) and Private
Banking & Wealth Management in order to re\ufb02ect
the homogeneous nature of these portfolios.
Debt securities and subordinated liabilities
Most debt securities are valued using quoted prices in
active markets or from quoted prices of similar \ufb01nancial
instruments. The remaining population is valued using
discounted cash\ufb02ows at current offer rates.
Bank and customer deposits
Fair values of deposits are estimated using discounted
cash \ufb02ow valuation techniques. Where required,
methodologies can be revised as additional information
and valuation inputs become available.12 Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair value and classi\ufb01ed as held-for-trading. Financial instruments are classi\ufb01ed as held-for-trading if they are held for the
purpose of selling or repurchasing them in the short term, to make a spread between purchase and sale price or held to take advantage of movements in prices and yields.
For accounting policy information refer to Accounting policy 3.8.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Assets
\u00a3m
\u00a3m
Loans
\u00a0 \u00a0
Reverse repos
27,656
27,127
Collateral given
5,701
7,367
Other loans
295
545
Total loans
33,652
35,039
Securities
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
2,120
2,077
- US
4,153
3,734
- Other
4,135
3,506
Financial institutions and corporate
2,477
4,561
Total securities
12,885
13,878
Total
46,537
48,917
Liabilities
\u00a0 \u00a0
Deposits
\u00a0 \u00a0
Repos
28,578
30,562
Collateral received
11,966
12,509
Other deposits
740
895
Total deposits
41,284
43,966
Debt securities in issue
234
257
Short positions
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
1,504
2,680
- US
1,161
1,677
- Other
4,137
4,755
Financial institutions and Corporate
702
1,379
Total short positions
7,504
10,491
Total
49,022
54,714
\n
13 Derivatives
Derivative is a term covering a wide range of \ufb01nancial instruments that derive their
fair value from an underlying rate or price, for example interest rates or exchange rates (the underlying).
NatWest Group uses derivatives as a part of its trading activities, to manage its own risks such as interest rate, foreign exchange, or credit risk and in certain customer transactions. This
note
shows contracted volumes of derivatives, how they are used for hedging purposes and the effects of the application of hedge accounting.
For accounting policy information refer to Accounting policies 3.8 and 3.11.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Notional
Asset
Liability
\u00a0
Traded on
\u00a0 \u00a0
Traded on
\u00a0 \u00a0
Traded on
\u00a0 \u00a0
\u00a0
recognised
Traded over
\u00a0
recognised
Traded over
\u00a0
recognised
Traded over
\u00a0
\u00a0
exchanges
the counter
Total
exchanges
the counter
Total
exchanges
the counter
Total
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Interest rate
794
10,294
11,088
4
32,738
32,742
-
26,758
26,758
- Swaps
-
7,938
7,938
-
25,700
25,700
-
19,685
19,685
- Options
324
1,105
1,429
4
7,038
7,042
-
7,073
7,073
- Forwards and futures
470
1,251
1,721
-
-
-
-
-
-
Exchange rate
1
3,413
3,414
-
27,981
27,981
12
27,030
27,042
- Swaps
-
456
456
-
4,978
4,978
-
4,417
4,417
- Options
1
727
728
-
4,422
4,422
12
4,474
4,486
- Spot, forwards and futures
-
2,230
2,230
-
18,581
18,581
-
18,139
18,139
Credit
-
15
15
-
66
66
-
174
174
Equity and commodity
-
2
2
-
-
-
-
-
-
Total
795
13,724
14,519
4
60,785
60,789
12
53,962
53,974
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate
1,066
9,267
10,333
20
37,479
37,499
2
31,530
31,532
- Swaps
-
7,015
7,015
-
28,960
28,960
-
23,138
23,138
- Options
736
1,490
2,226
20
8,519
8,539
2
8,392
8,394
- Forwards and futures
330
762
1,092
-
-
-
-
-
-
Exchange rate
1
3,278
3,279
6
40,791
40,797
15
40,291
40,306
- Swaps
-
454
454
-
8,450
8,450
-
8,195
8,195
- Options
1
851
852
6
5,385
5,391
15
5,561
5,576
- Spot, forwards and futures
-
1,973
1,973
-
26,956
26,956
-
26,535
26,535
Credit
-
14
14
-
110
110
-
244
244
Equity and commodity
-
2
2
-
-
-
-
-
-
Total
1,067
12,561
13,628
26
78,380
78,406
17
72,065
72,082
\n
Included in the table above is the notional amount of \u00a38,768 billion (2024 - \u00a37,321 billion) of interest rate derivatives that are traded over the counter and settled through central clearing
counterparties. NatWest Group has no other type of derivatives that are settled through central counterparties.
Hedge accounting using derivatives
\n
NatWest Group applies hedge accounting to
\n
reduce the accounting mismatch caused in
\n
the income statement by using derivatives to
\n
hedge the following risks: interest rate, foreign
\n
exchange and the foreign exchange risk
\n
associated with net investment in foreign
\n
operations.
\n
NatWest Group\u2019s interest rate hedging relates
\n
to the management of NatWest Group\u2019s non-
\n
trading structural interest rate risk, caused by
\n
the mismatch between \ufb01xed interest rates
\n
and \ufb02oating interest rates on its \ufb01nancial
\n
instruments. NatWest Group manages this
\n
risk within approved limits. Residual risk
\n
positions are hedged with derivatives,
\n
principally interest rate swaps.
\n
Cash \ufb02ow hedges of interest rate risk relate
\n
to exposures to the variability in future
\n
interest payments and receipts due to the
\n
movement of interest rates on forecast
\n
transactions and on \ufb01nancial assets and
\n
\ufb01nancial liabilities. This variability in cash \ufb02ows
\n
is hedged by interest rate swaps, which
\n
convert variable cash \ufb02ows into \ufb01xed. For
\n
these cash \ufb02ow hedge relationships, the
\n
hedged items are actual and forecast variable
\n
interest rate cash \ufb02ows arising from \ufb01nancial
\n
assets and \ufb01nancial liabilities with interest
\n
rates linked to the relevant interest rates,
\n
most notably SOFR, EURIBOR, the European
\n
Central Bank deposit rate, SONIA and the
\n
Bank of England Of\ufb01cial Bank Rate. The
\n
variability in cash \ufb02ows due to movements in
\n
the relevant interest rate is hedged; this risk
\n
component is identi\ufb01ed using the risk
\n
management systems of NatWest Group and
\n
encompasses the majority of cash \ufb02ow
\n
variability risk.
\n
Suitable larger \ufb01xed rate \ufb01nancial instruments
\n
are subject to fair value hedging in line with
\n
documented risk management strategies.
\n
Fair value hedges of interest rate risk involve
\n
interest rate swaps transforming the \ufb01xed
\n
interest rate risk in \ufb01nancial assets and
\n
\ufb01nancial liabilities to \ufb02oating. The hedged risk
\n
is the risk of changes in the hedged item\u2019s fair
\n
value attributable to changes in the interest
\n
rate risk component of the hedged item. The
\n
signi\ufb01cant interest rates identi\ufb01ed as risk
\n
components are SOFR, EURIBOR, ESTR and
\n
SONIA. These risk components are identi\ufb01ed
\n
using the risk management systems of
\n
NatWest Group and encompass the majority
\n
of the hedged item\u2019s fair value risk.
\n
NatWest Group hedges the exchange rate
\n
risk of its net investment in foreign currency
\n
denominated operations with currency
\n
borrowings and forward foreign exchange
\n
contracts.
\n
NatWest Group reviews the value of the
\n
investments\u2019 net assets, executing hedges
\n
where appropriate to reduce the sensitivity of
\n
capital ratios to foreign exchange rate
\n
movement. Hedge accounting relationships
\n
will be designated where required.
\n
Exchange rate risk also arises in NatWest
\n
Group where payments are denominated in
\n
currencies other than the functional currency.
\n
Residual risk positions are hedged with
\n
foreign exchange derivatives, \ufb01xing the
\n
exchange rate the payments will be settled in.
\n
The derivatives are documented as cash \ufb02ow
\n
hedges.
\n
For all cash \ufb02ow hedging, fair value hedge
\n
relationships and net investment hedging,
\n
NatWest Group determines that there is an
\n
economic relationship between the hedged
\n
item and hedging instrument via assessing
\n
the initial and ongoing effectiveness by
\n
comparing movements in the fair value of the
\n
expected highly probable forecast interest
\n
cash \ufb02ows/ fair value of the hedged item
\n
attributable to the hedged risk with
\n
movements in the fair value of the expected
\n
changes in cash \ufb02ows from the hedging
\n
instrument. The method used for comparing
\n
movements is either regression testing, or the
\n
dollar offset method. The method for testing
\n
effectiveness and the period over which the
\n
test is performed depends on the applicable
\n
risk management strategy and is applied
\n
consistently to each risk management
\n
strategy. Hedge effectiveness is assessed on
\n
a cumulative basis and the determination of
\n
effectiveness is in line with the requirements
\n
of IAS 39.
\n
NatWest Group uses either the actual ratio
\n
between the hedged item and hedging
\n
instrument(s) or one that minimises hedge
\n
ineffectiveness to establish the hedge ratio for
\n
hedge accounting. Hedge ineffectiveness is
\n
measured in line with the requirements of IAS
\n
39 and recognised in the income statement
\n
as it arises.
Derivatives in hedge accounting relationships
\n
Included in the table below are derivatives held for hedging purposes as follows.
\n\n \n
2025
2024
Changes in fair value used
Changes in fair value used for
for
Notional
Assets
Liabilities
hedge ineffectiveness (1)
Notional
Assets
Liabilities
hedge ineffectiveness (1)
\u00a3bn
\u00a3m
\u00a3m
\u00a3m
\u00a3bn
\u00a3m
\u00a3m
\u00a3m
Fair value hedging
Interest rate contracts
(2)
92.7
829
1,256
522
83.1
1,096
1,965
958
Cash flow hedging
Interest rate contracts
156.1
868
1,619
717
167.9
1,424
3,300
581
Exchange rate contracts
25.3
532
355
(3)
14.4
116
457
1
Net investment hedging
Exchange rate contracts
(3)
0.4
3
1
(10)
0.3
2
1
9
274.5
2,232
3,231
1,226
265.7
2,638
5,723
1,549
IFRS netting and clearing house
settlements
(1,697)
(2,875)
(2,520)
(5,259)
535
356
118
464
\n
(1)
The change in fair value used for hedge ineffectiveness includes
\n
instruments that were derecognised in the year.
\n
(2)
The hedged risk includes in\ufb02ation risk.
\n
(3)
In addition to the derivative hedging instruments above, NatWest Group
\n
held notionals of \u00a32,760 million (2024 - \u00a33,144 million) of non-derivative
\n
hedging instruments with a carrying value of \u00a32,776 million (2024 -
\n
\u00a33,163 million), that were used in net investment hedges. The non-
\n
derivative instruments are other \ufb01nancial liabilities - debt securities in
\n
issue.
\n
Hedge ineffectiveness
\n
Hedge ineffectiveness recognised in other operating income comprises.
\n\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Fair value hedging
Loss on hedged items attributable to the hedged risk
(533)
(954)
(364)
Gain on the hedging instruments
522
958
406
Fair value hedging ineffectiveness
(11)
4
42
Cash flow hedging
Interest rate risk
(5)
(2)
10
Cash flow hedging ineffectiveness
(5)
(2)
10
Total
(16)
2
52
\n
The main sources of ineffectiveness for interest rate risk hedge accounting relationships are:
\n
\u2022
The effect of the counterparty credit risk on the fair value of the interest rate swap which is not re\ufb02ected in the fair value of the hedged item attributable to the change in interest rate (fair value
\n
hedge);
\n
\u2022
Differences in the repricing basis between the hedging instrument and hedged cash \ufb02ows (cash \ufb02ow hedge); and
\n
\u2022
Upfront present values on the hedging derivatives where hedge accounting relationships have been designated after the trade date (cash \ufb02ow hedge and fair value hedge).
Maturity of notional hedging contracts
\n
The following table shows the period in which the notional of hedging contract ends.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
Over 10 years
Total
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Fair value hedging
Interest rate risk
(1)
Hedging assets
0.6
4.4
21.3
8.5
8.6
2.9
46.3
Hedging liabilities
1.4
4.4
14.9
20.5
4.7
0.5
46.4
2024
Fair value hedging
Interest rate risk
(1)
Hedging assets
4.0
5.5
12.6
9.7
6.6
3.7
42.1
Hedging liabilities
0.8
4.3
14.2
15.5
5.7
0.5
41.0
2025
Cash flow hedging
Interest rate risk
Hedging assets
4.8
8.2
20.1
31.8
4.7
-
69.6
Hedging liabilities
10.7
18.0
52.0
4.6
0.8
0.4
86.5
Exchange rate risk
Hedging assets
6.3
3.6
-
-
-
-
9.9
Hedging liabilities
-
2.7
4.5
8.2
-
-
15.4
2024
Cash flow hedging
Interest rate risk
Hedging assets
10.6
10.8
22.0
30.3
12.0
-
85.7
Hedging liabilities
2.5
17.1
50.7
10.1
1.4
0.4
82.2
Exchange rate risk
Hedging assets
0.5
0.8
0.5
-
-
-
1.8
Hedging liabilities
3.1
2.5
3.7
3.3
-
-
12.6
\n
(1)
The hedged risk includes in\ufb02ation risk.
Average \ufb01xed interest rates
\n
The following table shows average \ufb01xed rate for cash \ufb02ow hedges, interest rate risk.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
Over 10 years
Total
2025
%
%
%
%
%
%
%
Average fixed interest rate
Hedging assets
1.26
2.57
3.22
3.21
3.60
3.12
3.03
Hedging liabilities
4.37
3.78
3.63
3.67
3.71
4.18
3.75
2024
Average fixed interest rate
Hedging assets
3.85
0.98
2.52
3.32
2.84
3.12
2.82
Hedging liabilities
4.34
4.76
3.97
3.09
3.64
4.18
4.03
\n
Average foreign exchange rates
\n
For cash \ufb02ow hedging of exchange rate risk, the average foreign exchange rates applicable across the relationships were as below for the
\n
main currencies hedged.
\n\n \n
2025
2024
INR/GBP
119.17
109.07
USD/GBP
1.32
1.30
JPY/GBP
195.35
176.04
EUR/GBP
1.14
-
JPY/USD
137.82
130.79
NOK/USD
9.21
9.21
AUD/USD
1.54
1.49
CHF/USD
0.88
0.91
EUR/USD
0.89
0.91
Analysis of hedged items and related hedging instruments
\n
The table below analyses assets and liabilities subject to hedging derivatives.
\n\n \n
Changes in fair value
Carrying value of
Impact on hedged items
used as a basis to
hedged assets and liabilities
included in carrying value
determine ineffectiveness (1)
2025
\u00a3m
\u00a3m
\u00a3m
Fair value hedging - interest rate
(2)
Loans to banks and customers - amortised cost
5,466
(368)
87
Other financial assets - securities
41,688
7
-
Total
(3)
47,154
(361)
87
Bank and customer deposits
1,582
2
1
Other financial liabilities - debt securities in issue
(5)
41,221
(277)
(501)
Subordinated liabilities
5,748
(105)
(120)
Total
48,551
(380)
(620)
2024
Fair value hedging - interest rate
(2)
Loans to banks and customers - amortised cost
5,318
(478)
(182)
Other financial assets - securities
36,724
(29)
(347)
Total
(3)
42,042
(507)
(529)
Bank and customer deposits
382
-
(3)
Other financial liabilities - debt securities in issue
(5)
37,548
(784)
(315)
Subordinated liabilities
5,772
(244)
(107)
Total
43,702
(1,028)
(425)
\n
For the notes to this table refer to the following page.
\n \n
Changes in fair value
Carrying value of
used as a basis to
hedged assets and liabilities
determine ineffectiveness (1)
2025
\u00a3m
\u00a3m
Cash flow hedging - interest rate
Loans to banks and customers - amortised cost
(4)
68,660
(1,455)
Other financial assets - securities
982
(23)
Total
69,642
(1,478)
Bank and customer deposits
86,285
756
Other financial liabilities - debt securities in issue
156
-
Total
86,441
756
Cash flow hedging - exchange rate
Loans to banks and customers - amortised cost
(4)
7,269
-
Other financial assets - securities
2,586
-
Total
9,855
-
Other financial liabilities - debt securities in issue
8,751
(2)
Other
210
5
Total
8,961
3
2024
Cash flow hedging - interest rate
Loans to banks and customers - amortised cost
(4)
84,065
(190)
Other financial assets - securities
1,625
(2)
Total
85,690
(192)
Bank and customer deposits
82,081
(391)
Other financial liabilities - debt securities in issue
149
-
Total
82,230
(391)
Cash flow hedging - exchange rate
Loans to banks and customer - amortised cost
(4)
223
-
Other financial assets - securities
1,598
-
Total
1,821
-
Other financial liabilities - debt securities in issue
8,279
(1)
Other
195
-
Total
8,474
(1)
\n
(1)
The change in fair value used for hedge ineffectiveness includes
\n
instruments that were derecognised in the year.
\n
(2)
The hedged risk includes in\ufb02ation risk.
\n
(3)
Carrying values include \u00a335 million (2024 - \u00a346 million) adjustment for
\n
discontinued fair value hedges.
\n
(4)
Includes cash and balances at central banks.
\n
(5)
The carrying value include \u00a34,759 million (2024 - \u00a34,631 million) of debt
\n
securities held at amortised cost.
Analysis of cash \ufb02ow and foreign exchange hedge reserve
The following table shows an analysis of the pre-tax cash \ufb02ow hedge reserve and foreign exchange hedge reserve.
\n \n
2025
2024
Foreign
Foreign
Cash flow
exchange
Cash flow
exchange
hedge reserve
hedge reserve
hedge reserve
hedge reserve
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing
Interest rate risk
(598)
-
(1,564)
-
Foreign exchange risk
1
(50)
(6)
15
De-designated
Interest rate risk
(438)
-
(437)
-
Foreign exchange risk
-
(699)
2
(663)
Total
(1,035)
(749)
(2,005)
(648)
\n \n
2025
2024
Foreign
Foreign
Cash flow
exchange
Cash flow
exchange
hedge reserve
hedge reserve
hedge reserve
hedge reserve
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Amount recognised in equity
Interest rate risk
50
-
(931)
-
Foreign exchange risk
19
(92)
59
122
Total
69
(92)
(872)
122
Amount transferred from equity to earnings
Interest rate risk to net interest income
912
-
1,562
-
Foreign exchange risk to net interest income
(21)
-
(73)
-
Foreign exchange risk to non interest income
-
(9)
-
19
Foreign exchange risk to operating expenses
8
-
5
-
Total
899
(9)
1,494
19
15 Other \ufb01nancial assets
Other \ufb01nancial assets consist of debt securities, equity shares and loans that are not held for trading. Balances consist of local and central government securities, a part of NatWest Group\u2019s
liquidity portfolio.
For accounting policy information refer to Accounting policy 3.8.
\n \n
Debt securities
Central and local government
Equity
UK
US
Other
Other debt
Total
shares
Loans
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Mandatory fair value through profit or loss
-
-
-
631
631
1
409
1,041
Designated at fair value
-
-
-
3
3
-
-
3
Fair value through other comprehensive income
(1)
14,117
5,128
6,403
16,241
41,889
121
158
42,168
Amortised cost
13,083
341
1,795
21,339
36,558
-
-
36,558
Total
27,200
5,469
8,198
38,214
79,081
122
567
79,770
2024
Mandatory fair value through profit or loss
-
-
-
1
1
4
793
798
Designated at fair value
-
-
2
3
5
-
-
5
Fair value through other comprehensive income
(1)
13,281
4,587
6,192
13,476
37,536
247
60
37,843
Amortised cost
3,571
500
85
20,441
24,597
-
-
24,597
Total
16,852
5,087
6,279
33,921
62,139
251
853
63,243
(1)
Upon initial recognition, NatWest Group occasionally
irrevocably
designates some of its equity investments as equity
instruments at FVOCI when they meet the de\ufb01nition of equity under IAS
32 Financial instruments: presentation, are not held for trading or they
are held for strategic purposes. Such classi\ufb01cation is determined on an
instrument-by-instrument basis. Gains and losses on these equity
instruments are not recycled to the income statement and dividends are
recognised in pro\ufb01t or loss except when they represent a recovery of
part of the cost of the instrument, in which case such gains are recorded
in OCI. Equity instruments at FVOCI are not subject to an impairment
assessment.
There were no signi\ufb01cant acquisitions of equity shared in either year.
NatWest Group disposed of equity shares in Visa Inc \u00a316 million (2024: \u00a362 million), Permanent TSB p.l.c of \u00a3109 million, and Vodeno \u00a345 million.
Dividends received on FVOCI equity shares during 2025 includes \u00a358 million from OTCDERIV LIMITED.18 Other \ufb01nancial liabilities
Other \ufb01nancial liabilities consist of customer deposits designated at fair value and debt securities in issue.
For accounting policy information refer to Accounting policies 3.8 and 3.10.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Customer deposits including repos
2,312
1,812
Debt securities in issue
\u00a0 \u00a0
- MRELs
25,441
23,998
- Other medium term notes
28,033
22,087
- Commercial paper and certificates of deposit
9,401
11,266
- Covered bonds
749
749
- Securitisation
1,663
1,175
Total
67,599
61,087
\n
19 Subordinated liabilities
Subordinated liabilities are debt securities that, in the event of winding up or bankruptcy, rank below other liabilities for interest payments and repayment.
For accounting policy information refer to Accounting policies 3.8 and 3.10.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Dated loan capital
5,983
5,996
Undated loan capital
21
21
Preference shares
119
119
\u00a0
6,123
6,136
\n
Certain preference shares issued by the company are classi\ufb01ed as liabilities; these securities remain subject to the capital maintenance rules of the Companies Act 2006.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
First call
Maturity
Capital
2025
2024
Dated loan capital
\u00a0
date
date
treatment
\u00a3m
\u00a3m
NatWest Group plc
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a31,000 million
3.622% notes
May-25
Aug-30
Tier 2
-
1,006
\u00a31,000 million
2.105% notes
Aug-26
Nov-31
Tier 2
1,002
1,001
\u20ac1,000 million
3.723% notes
Feb-30
Feb-35
Tier 2
898
-
$1,000 million
6.475% notes
Mar-29
Jun-34
Tier 2
746
799
$850 million
3.032% notes
Aug-30
Nov-35
Tier 2
547
550
\u20ac750 million
1.043% notes
Jun-27
Sep-32
Tier 2
656
624
\u20ac700 million
5.763% notes
Nov-28
Feb-34
Tier 2
640
608
\u00a3650 million
7.416% notes
Mar-28
Jun-33
Tier 2
655
644
\u00a3600 million
5.642% notes
Oct-29
Oct-34
Tier 2
605
608
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
5,749
5,840
Other subsidiaries
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u20ac170 million
Floating rate notes
-
Feb-41
Not applicable
237
234
$150 million
7.125% notes
-
Oct-93
Not applicable
17
17
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
6,003
6,091
Fair value hedging
\u00a0 \u00a0 \u00a0 \u00a0
(20)
(95)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
5,983
5,996
\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
First call
Maturity
Capital
2025
2024
Undated loan capital
\u00a0
date
date
treatment
\u00a3m
\u00a3m
Other subsidiaries
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a331 million
7.380% notes
-
-
Not applicable
1
1
\u00a316 million
5.630% notes
Sep-26
-
Not applicable
17
17
\u00a34.9 million
2.500% fixed notes
-
-
Not applicable
3
3
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
21
21
Preference shares
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Other subsidiaries
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a3140 million
Non-cumulative preference shares of \u00a31
-
-
Not applicable
119
119
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
119
119
Total
\u00a0 \u00a0 \u00a0 \u00a0
6,123
6,136
\nAmounts included in the NatWest Group financial statements, in aggregate, by category of
related party are as follows:
Associates and joint
Equity
ventures
shares (1)
Total
31 December 2025
\u00a3m
\u00a3m
\u00a3m
Investments
753
1
754
Loans to customers - amortised cost
-
4
4
Customer deposits
1
-
1
Other comprehensive income
-
33
33
Other operating income
69
10
79
31 December 2024
Investments
690
122
812
Loans to customers - amortised cost
-
4
4
Customer deposits
1
1
2
Other comprehensive income
-
(22)
(22)
Other operating income
19
-
19
(1)
Represents investments in entities where ownership is more than 10%", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00244": { "value": "2.2. Fair value \u2013 \ufb01nancial instruments
We measure \ufb01nancial instruments at fair
value when they are classi\ufb01ed as mandatory
fair value through pro\ufb01t or loss; held-for-
trading; designated fair value through pro\ufb01t
or loss and fair value through other
comprehensive income and they are
recognised in the \ufb01nancial statements at fair
value. All derivatives are measured at fair
value.
We manage some portfolios of \ufb01nancial
assets and \ufb01nancial liabilities based on our
net exposure to either market or credit risk.
In these cases, the fair value is derived from
the net risk exposure of that portfolio with
portfolio level adjustments applied to
incorporate bid-offer spreads, counterparty
credit risk, and funding costs (refer to
\u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is
not active, fair value is established using a
valuation technique. These valuation
techniques involve a degree of estimation, the
extent of which depends on the instrument\u2019s
complexity and the availability of market-
based data. The complexity and uncertainty
in the \ufb01nancial instrument\u2019s fair value is
categorised using the fair value hierarchy.
The use of market indicators as inputs to fair
value is assumed to include current
information and knowledge regarding the
effect of climate risk.3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 10 Financial instruments - valuation
Financial instruments recognised at fair value are revalued using techniques that can include observable inputs (pricing information that is readily available in the market, for example UK
Government securities), and unobservable inputs (pricing information that is not readily available, for example unlisted securities). Gains and losses are recognised in the income statement
and statement of comprehensive income as appropriate.
This note presents information on the valuation of \ufb01nancial instruments.
The table below provides an overview of the various sections contained within the note.
Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.
Valuation
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Page
Financial instruments
\u00a0
Critical accounting policy: Fair value
330
Valuation
\u00a0
Fair value hierarchy
(D)
331
Valuation techniques
(D)
331
Inputs to valuation models
(D)
331
Valuation control
(D)
332
Key areas of judgement
(D)
332
Assets and liabilities split by fair value hierarchy level
(T)
333
Valuation adjustments
\u00a0
Fair value adjustments made
(T)
334
Funding valuation adjustments (FVA)
(D)
334
Credit valuation adjustments (CVA)
(D)
334
Bid-offer
(D)
334
Product and deal speci\ufb01c
(D)
334
Own credit
(D)
334
Level 3 additional information
\u00a0
Level 3 ranges of unobservable inputs
(D)
335
Level 3 instruments, valuation techniques and inputs
(T)
335
Level 3 sensitivities
(D)
335
Alternative assumptions
(D)
336
Other considerations
(D)
336
High and low range of fair value of level 3 assets and liabilities
(T)
336
Movement in level 3 assets and liabilities over the reporting period
(D)
337
Movement in level 3 assets and liabilities
(T)
337
Fair value of \ufb01nancial instruments measured at amortised cost
\u00a0
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
338
(D) = Descriptive; (T) = Table
\u00a0
\n\n\n\n
Fair value hierarchy
\n
Financial instruments carried at fair value
\n
have been classi\ufb01ed under the fair value
\n
hierarchy. The classi\ufb01cation ranges from level
\n
1 to level 3, with more expert judgement and
\n
price uncertainty for those classi\ufb01ed at level
\n
3.
\n
The determination of an instrument\u2019s level
\n
cannot be made at a global product level as
\n
a single product type can be in more than
\n
one level. For example, a single name
\n
corporate credit default swap could be in level
\n
2 or level 3 depending on the level of market
\n
activity for the referenced entity.
\n
Level 1
\u2013 instruments valued using unadjusted
\n
quoted prices in active and liquid markets, for
\n
identical \ufb01nancial instruments. Examples
\n
include government bonds, listed equity
\n
shares and certain exchange-traded
\n
derivatives.
\n
Level 2
\u2013 instruments valued using valuation
\n
techniques that have observable inputs.
\n
Observable inputs are those that are readily
\n
available with limited adjustments required.
\n
Examples include most government agency
\n
securities, investment-grade corporate bonds,
\n
certain mortgage products - including
\n
collateralised loan obligations (CLOs), most
\n
bank loans, repos and reverse repos, state
\n
and municipal obligations, most notes issued,
\n
certain money market securities, loan
\n
commitments and most over the counter
\n
(OTC) derivatives.
\n
Level 3
\u2013 instruments valued using a
\n
valuation technique where at least one input
\n
which could have a signi\ufb01cant effect on the
\n
instrument\u2019s valuation, is not based on
\n
observable market data.
\n
Examples include non-derivative instruments
\n
which trade infrequently, certain syndicated
\n
and commercial mortgage loans, private
\n
equity, and derivatives with unobservable
\n
model inputs.
\n
Valuation techniques
\n
NatWest Group derives the fair value of its
\n
instruments differently depending on whether
\n
the instrument is a non-modelled or a
\n
modelled product.
\n
Non-modelled products
are valued directly
\n
from a price input, typically on a position-by-
\n
position basis. Examples include equities and
\n
most debt securities.
\n
Non-modelled products can fall into any fair
\n
value levelling hierarchy depending on the
\n
observable market activity, liquidity, and
\n
assessment of valuation uncertainty of the
\n
instruments. The assessment of fair value and
\n
the classi\ufb01cation of the instrument to a fair
\n
value level is subject to the valuation controls
\n
discussed in the Valuation control section.
\n
Modelled products
\u2013 valued using a pricing
\n
model range in complexity from
\n
comparatively vanilla products such as
\n
interest rate swaps and options (e.g., interest
\n
rate caps and \ufb02oors) through to more
\n
complex derivatives (e.g., balance guarantee
\n
swaps).
\n
For modelled products the fair value is
\n
derived using the model and the appropriate
\n
model inputs or parameters, as opposed to a
\n
cash price equivalent. Model inputs are taken
\n
either directly or indirectly from available
\n
data, where some inputs are also modelled.
\n
Fair value classi\ufb01cation of modelled
\n
instruments is either level 2 or level 3,
\n
depending on the product/model
\n
combination, the observability and quality of
\n
input parameters and other factors.
\n
All these must be assessed to classify a
\n
position. The modelled product is assigned to
\n
the lowest fair value hierarchy level of any
\n
signi\ufb01cant input used in that valuation.
\n
Most derivative instruments, for example
\n
vanilla interest rate swaps, foreign exchange
\n
swaps and liquid single name credit
\n
derivatives, are classi\ufb01ed as level 2. This is
\n
because they are vanilla products valued
\n
using standard market models and with
\n
observable inputs. Level 2 products range
\n
from vanilla to more complex products,
\n
where more complex products remain
\n
classi\ufb01ed as level 2 due to the low materiality
\n
of any unobservable inputs.
\n
Inputs to valuation models
\n
When using valuation techniques, the fair
\n
value can be signi\ufb01cantly affected by the
\n
choice of
valuation model
and underlying
\n
assumptions. Factors considered include the
\n
cash\ufb02ow amounts and timing of those cash
\n
\ufb02ows, and application of appropriate discount
\n
rates, incorporating both funding and credit
\n
risk. Values between and beyond available
\n
data points are obtained by interpolation and
\n
extrapolation. The principal inputs to these
\n
valuation techniques are as follows:
\n
Bond prices
\u2013 quoted prices are generally
\n
available for government bonds, certain
\n
corporate securities, and some mortgage-
\n
related products.
\n
Credit spreads/margins
\u2013 these re\ufb02ect credit
\n
default swap levels or the return required
\n
over a benchmark rate or index to
\n
compensate for the referenced credit risk.
\n
Where available, these are derived from the
\n
price of credit default swaps or other credit-
\n
based instruments, such as debt securities.
\n
When direct prices are not available, credit
\n
spreads/margins are determined with
\n
reference to available prices of entities with
\n
similar characteristics.
\n
Interest rates
\u2013 these are principally based on
\n
interest rate swap prices referencing
\n
benchmark interest rates. Interest rates,
\n
include SONIA (Sterling Overnight Interbank
\n
Average Rate) and other overnight rates.
\n
Other quoted interest rates may also be used
\n
from both the bond, and futures markets.
\n
Foreign currency exchange rates
\u2013 there are
\n
observable prices both for spot and forward
\n
contracts and futures in the world's major
\n
currencies.
\n
Equity and equity index prices
\u2013 quoted
\n
prices are generally readily available for
\n
equity shares listed on the world's major
\n
stock exchanges and for major indices on
\n
such shares.
\n
Price volatilities and correlations
\u2013 volatility is
\n
a measure of the tendency of a price to
\n
change with time. Correlation measures the
\n
degree which two or more prices or variables
\n
are observed to move together. Variables
\n
that move in the same direction show positive
\n
correlation; those that move in opposite
\n
directions are negatively correlated.
\n
Prepayment rates
\u2013 are used to re\ufb02ect how
\n
fast a pool of assets prepay. The fair value of
\n
a \ufb01nancial instrument that can be prepaid by
\n
the issuer or borrower differs from that of an
\n
instrument that cannot be prepaid. When
\n
valuing prepayable instruments, the value of
\n
this prepayment option is considered.
\n
Recovery rates/loss given default
\u2013 are used
\n
as an input to valuation models and reserves
\n
for asset-backed securities and other credit
\n
products as an indicator of severity of losses
\n
on default. Recovery rates are primarily
\n
sourced from market data providers, the
\n
value of the underlying collateral or inferred
\n
from observable credit spreads.
Valuation control
NatWest Group's control environment for the
determination of the fair value of \ufb01nancial
instruments includes formalised procedures
for the review and validation of fair values.
The review of market prices and inputs is
performed by an independent price
veri\ufb01cation (IPV) team.
IPV is a key element of the control
environment. Valuations are \ufb01rst performed
by the business which entered into the
transaction. These valuations are then
reviewed by the IPV team, independent of
those trading the \ufb01nancial instruments, in
light of available pricing evidence.
Independent pricing data is collated from a
range of sources. Each source is reviewed for
quality and the independent data applied in
the IPV processes using a formalised input
quality hierarchy. Consensus services are one
source of independent data and encompass
interest rate, currency, credit, and bond
markets, providing comprehensive coverage
of vanilla products and a wide selection of
exotic products.
Where measurement differences are
identi\ufb01ed through the IPV process these are
grouped by the quality hierarchy of the
independent data. If the size of the difference
exceeds de\ufb01ned thresholds, an adjustment is
made to bring the valuation to within the
independently calculated fair value range.
IPV takes place at least monthly, for all fair
value \ufb01nancial instruments. The IPV control
includes formalised reporting and escalation
of any valuation differences in breach of
established thresholds.
The quality and completeness of the
information gathered in the IPV process gives
an indication as to the liquidity and valuation
uncertainty of an instrument and forms part
of the information considered when
determining fair value hierarchy
classi\ufb01cations.
Initial fair value level classi\ufb01cation of a
\ufb01nancial instrument is carried out by the IPV
team. These initial classi\ufb01cations are subject
to senior management review. Particular
attention is paid to instruments transferring
from one level to another, new instrument
classes or products, instruments where the
transaction price is signi\ufb01cantly different from
the fair value and instruments where
valuation uncertainty is high.
Valuation Committees are made up of
valuation specialists and senior business
representatives from various functions and
oversees pricing, reserving and valuations
issues. These committees meet monthly to
review and ratify any methodology changes.
The Executive Valuation Committee meets
quarterly to address key material and
subjective valuation issues, to review items
escalated by Valuation Committees and to
discuss other relevant industry matters.
The Group model risk policy sets the policy
for model documentation, testing and review.
Governance of the model risk policy is carried
out by the Group Model Risk Oversight
Committee, which comprises model risk
owners and independent model experts. All
models are required to be independently
validated in accordance with the model risk
Policy.
Key areas of judgement
Over the years the business has simpli\ufb01ed,
with most products classi\ufb01ed as level 1 or 2
of the fair value hierarchy. However, the
diverse range of products historically traded
by NatWest Group means some products
remain classi\ufb01ed as level 3. Level 3 indicates
a signi\ufb01cant level of pricing uncertainty,
where expert judgement is used. As such,
extra disclosures are required in respect of
level 3 instruments.
In general, the degree of expert judgement
used and hence valuation uncertainty
depends on the degree of liquidity of an
instrument or input.
Where markets are liquid, little judgement is
required. However, when the information
regarding the liquidity in a particular market
is not clear, a judgement may need to be
made. For example, for an equity traded on
an exchange, daily volumes of trading can be
seen, but for an OTC derivative, assessing
the liquidity of the market with no central
exchange is more challenging.
The breadth and depth of the IPV data allows
for a rules-based quality assessment to be
made of market activity, liquidity, and pricing
uncertainty, which assists with the process of
allocation to an appropriate level. Where
suitable independent pricing information is
not readily available, the quality assessment
will result in the instrument being assessed as
level 3.
\n\n\n
The table below shows the assets and liabilities held by NatWest Group split by fair value hierarchy level. Level 1 are considered the most liquid instruments, and level 3 the most illiquid, valued using
\n
expert judgement and so carry the most signi\ufb01cant price uncertainty.
\n\n \n
2025
2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
-
33,556
96
33,652
-
34,761
278
35,039
Securities
9,586
3,299
-
12,885
8,772
5,106
-
13,878
Derivatives
Interest rate
-
32,382
360
32,742
-
37,026
473
37,499
Foreign exchange
-
27,878
103
27,981
-
40,687
110
40,797
Other
-
57
9
66
-
63
47
110
Other financial assets
Loans
-
35
533
568
-
288
565
853
Securities
25,528
16,964
152
42,644
23,943
13,641
209
37,793
Total financial assets held at fair value
35,114
114,171
1,253
150,538
32,715
131,572
1,682
165,969
As a % of total fair value assets
23%
76%
1%
20%
79%
1%
Liabilities
Trading liabilities
Deposits
-
41,284
-
41,284
-
43,966
-
43,966
Debt securities in issue
-
234
-
234
-
257
-
257
Short positions
6,172
1,331
1
7,504
8,766
1,724
1
10,491
Derivatives
Interest rate
-
26,589
169
26,758
-
31,253
279
31,532
Foreign exchange
-
26,988
54
27,042
-
40,240
66
40,306
Other
-
119
55
174
-
124
120
244
Other financial liabilities
Debt securities in issue
-
2,302
3
2,305
-
1,733
3
1,736
Other deposits
-
2,285
27
2,312
-
1,787
25
1,812
Subordinated liabilities
-
237
-
237
-
234
-
234
Total financial liabilities held at fair value
6,172
101,369
309
107,850
8,766
121,318
494
130,578
As a % of total fair value liabilities
6%
94%
0%
7%
93%
0%
\n
(1)
Transfers between levels are deemed to have occurred at the beginning
\n
of the quarter in which the instrument was transferred.
\n
(2)
For an analysis of debt securities held at mandatory fair value through profit or
\n
loss by issuer as well as ratings and derivatives, by type and contract, refer to
\n
Risk and capital management \u2013 Credit risk.
\n\n\n
Valuation adjustments
\n
When valuing \ufb01nancial instruments in the trading book, adjustments are made to mid-market
\n
valuations to cover bid-offer spread, funding and credit risk. These adjustments are presented in
\n
the table below:
\n\n \n
2025
2024
Adjustment
\u00a3m
\u00a3m
Funding valuation adjustments
(11)
123
Credit valuation adjustments
179
190
Bid-offer
60
76
Product and deal speci\ufb01c
124
157
Total
352
546
\n
The decrease in funding valuation adjustments was primarily driven by unwinding of a major
\n
portfolio. The decrease in credit valuation adjustments was driven by credit spreads tightening
\n
with the impacts of exposure changes largely offsetting. The decrease in bid-offer was driven by
\n
risk reduction and unwinding of a major portfolio. The decrease in product and deal speci\ufb01c was
\n
driven by the amortisation of deferred trade inception pro\ufb01ts partially offset by new trading
\n
activity.
\n
Funding valuation adjustments (FVA)
\n
FVA represents an estimate of the adjustment that a market participant would make to
\n
incorporate funding costs and bene\ufb01ts that arise in relation to derivative exposures. FVA is
\n
calculated as a portfolio level adjustment and can result in either a funding charge (positive) or
\n
funding bene\ufb01t (negative).
\n
Funding levels are applied to estimated potential future exposures. For uncollateralised
\n
derivatives, the exposure re\ufb02ects the future valuation of the derivative. For collateralised
\n
derivatives, the exposure re\ufb02ects the difference between the future valuation of the derivative
\n
and the level of collateral posted.
\n
Credit valuation adjustments (CVA)
\n
CVA represents an estimate of the adjustment to fair value that is made to incorporate the
\n
counterparty credit risk inherent in derivative exposures. CVA is calculated on a portfolio basis
\n
re\ufb02ecting an estimate of the amount a third party would charge to assume the credit risk.
\n
Collateral held under a credit support agreement is factored into the CVA calculation. In such
\n
cases where NatWest Group holds collateral against counterparty exposures, CVA is held to the
\n
extent that residual risk remains.
\n
FVA and CVA are actively managed by a credit and market risk hedging process, and therefore
\n
movements in CVA and FVA are partially offset by trading revenue on the hedges.
\n
Bid-offer
\n
Fair value positions are required to be marked to exit levels, represented by bid (long positions)
\n
or offer (short positions) levels. Non-derivative positions are typically marked directly to bid or
\n
offer prices. However derivative exposures are adjusted to exit levels by taking bid-offer reserves
\n
calculated on a portfolio basis. The reserving approach is based on current market bid-offer
\n
spreads and standard market bucketing of risk.
\n
Bid-offer spreads vary by maturity and risk type to re\ufb02ect different spreads in the market. For
\n
positions where there is no observable quote, the bid-offer spreads are widened in comparison to
\n
proxies to re\ufb02ect reduced liquidity or observability.
\n
Netting is applied on a portfolio basis to re\ufb02ect the value at which NatWest Group believes it
\n
could exit the net risk of the portfolio, rather than the sum of exit costs for each of the portfolio\u2019s
\n
individual trades. This is applied where the asset and liability positions are managed as a portfolio
\n
for risk and reporting purposes.
\n
Product and deal speci\ufb01c
\n
On initial recognition of \ufb01nancial assets and liabilities valued using valuation techniques which
\n
have a signi\ufb01cant dependence on information other than observable market data, any difference
\n
between the transaction price and that derived from the valuation technique is deferred. Such
\n
amounts are recognised in the income statement over the life of the transaction, when market
\n
data becomes observable, or when the transaction matures or is closed out as appropriate. On
\n
31 December 2025, net gains of \u00a3109 million (2024 - \u00a3139 million) were carried forward. During
\n
the year, net gains of \u00a3205 million (2024 - \u00a3218 million) were deferred and \u00a3235 million (2024 -
\n
\u00a3157 million) were recognised in the income statement.
\n
Where system-generated valuations do not accurately re\ufb02ect market prices, manual valuation
\n
adjustments are applied either at a position or portfolio level. Manual adjustments are subject to
\n
the scrutiny of independent control teams and are subject to monthly review by senior
\n
management.
\n
Own credit
\n
NatWest Group considers the effect of its own credit standing when valuing \ufb01nancial liabilities
\n
recorded at fair value. Own credit spread adjustments are made when valuing issued debt held
\n
at fair value, including issued structured notes. An own credit adjustment is applied to positions
\n
where it is believed that counterparties would consider NatWest Group\u2019s creditworthiness when
\n
pricing trades. Accumulated changes in fair value due to credit risk are \u00a357 million (2024 \u2013 \u00a344
\n
million).
\n\n\n
Level 3 additional information
\n
For illiquid assets and liabilities, classi\ufb01ed as level 3, additional information is provided on the valuation techniques used and price sensitivity of the products to those inputs. This is to enable the reader
\n
to gauge the level of uncertainty that arises from positions with signi\ufb01cant unobservable inputs or modelling parameters.
\n
Level 3 ranges of unobservable inputs
\n
The table below provides additional information on level 3 instruments and inputs. This shows the valuation technique used for the fair value calculation, the unobservable input and input range.
\n\n \n
2025
2024
Financial instrument
Valuation technique
Unobservable inputs
Units
Low
High
Low
High
Trading assets and Other financial assets
Loans
Price-based
Price
%
89
121
88
123
Discount cash \ufb02ow
Credit spreads
bps
34
81
36
93
Debt securities
Price-based
Price
%
-
111
-
116
Equity Shares
Price-based
Price
GBP
-
44,090
-
47,312
Price-based
Price
%
-
-
-
15
Discount cash \ufb02ow
Discount margin
%
-
-
9
13
Net asset valuation
Fund NAV
%
80
120
80
120
Derivative assets and liabilities
Credit derivatives
Credit derivative
Credit spreads
bps
16
133
15
86
pricing
Correlation
%
(15)
75
(15)
95
Option pricing
Volatility
%
30
75
30
80
Upfront points
%
-
99
-
99
Recovery rate
%
-
60
-
60
Interest rate & FX
Option pricing
Correlation
%
(50)
98
(50)
98
derivatives
Volatility
%
3
82
3
99
Constant Prepayment
Rate
%
2
25
2
20
Mean Reversion
%
-
13
-
20
In\ufb02ation volatility
%
1
2
1
2
In\ufb02ation rate
%
2
2
2
2
\n
(1)
Valuation for private equity investments may be estimated by looking at
\n
past prices of similar stocks and from valuation statements where
\n
valuations are usually derived from earnings measures such as EBITDA
\n
or net asset value (NAV). Similarly, for equity or bond fund investments,
\n
prices may be estimated from valuation or credit statements using NAV
\n
or similar measures.
\n
(2)
NatWest Group does not have any material liabilities measured at fair
\n
value that are issued with an inseparable third-party credit
\n
enhancement
.
\n
Level 3 sensitivities
\n
The level 3 sensitivities presented on the next page are calculated at a trade or low-level portfolio basis rather than an overall portfolio basis. As individual sensitivities are aggregated with no re\ufb02ection
\n
of the correlated nature between instruments, the overall portfolio sensitivity may not be accurately re\ufb02ected. For example, some portfolios may be negatively correlated to others, where a downwards
\n
movement in one asset would produce an upwards movement in another. However, due to the additive presentation of the above \ufb01gures this correlation impact cannot be displayed. As such, the
\n
actual potential downside sensitivity of the total portfolio may be less than the non-correlated sum of the additive \ufb01gures as shown in the table on the next page.
\n\n\n
Alternative assumptions
\n
Reasonably plausible alternative assumptions of unobservable inputs are determined based on a speci\ufb01ed target level of certainty of 90%.
\n
Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information considering consistency between
\n
different sources, variation over time, perceived tradability or otherwise of available quotes; consensus service dispersion ranges; volume of trading activity and market bias (e.g. one-way inventory);
\n
day 1 pro\ufb01t or loss arising on new trades; number and nature of market participants; market conditions; modelling consistency in the market; size and nature of risk; length of holding of position; and
\n
market intelligence.
\n
Other considerations
\n
Whilst certain inputs used to calculate CVA, FVA and own credit adjustments are not based on observable market data, the uncertainty of these inputs is not considered to have a signi\ufb01cant effect on
\n
the net valuation of the related derivative portfolios and issued debt.
\n
As such, the fair value levelling of the derivative portfolios and issued debt is not determined by CVA, FVA or own credit inputs. In addition, any fair value sensitivity driven by these inputs is not
\n
included in the level 3 sensitivities presented.
\n
The table below shows the favourable and unfavourable range of fair value of the level 3 assets and liabilities. This range incorporates the range of fair value inputs as described in the previous table.
\n\n \n
2025
2024
Level 3
Favourable
Unfavourable
Level 3
Favourable
Unfavourable
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
Loans
96
-
-
278
-
-
Derivatives
Interest rate
360
20
(10)
473
20
(20)
Foreign exchange
103
10
(10)
110
-
-
Other
9
-
-
47
-
-
Other financial assets
Loans
533
-
(10)
565
-
(10)
Securities
152
10
(20)
209
20
(30)
Total financial assets held at fair value
1,253
40
(50)
1,682
40
(60)
Liabilities
Trading liabilities
Short positions
1
-
-
1
-
-
Derivatives
Interest rate
169
10
(10)
279
10
(10)
Foreign exchange
54
-
-
66
-
-
Other
55
-
-
120
10
(10)
Other financial liabilities
Debt securities in issue
3
-
-
3
-
-
Other deposits
27
-
(20)
25
10
(20)
Total financial liabilities held at fair value
309
10
(30)
494
30
(40)
\n\n\n
Movement in level 3 assets and liabilities
\n
The following table shows the movement in level 3 assets and liabilities in the year.
\n\n \n
Other
Other
Other
Other
Derivatives
trading
financial
Total
Derivatives
trading
financial
Total
assets
assets (2)
assets (3)
assets
liabilities
liabilities (2)
liabilities
liabilities
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement
(1)
(145)
(3)
7
(141)
(136)
-
2
(134)
Amount recorded in the statement
of
comprehensive income
-
-
5
5
-
-
-
-
Level 3 transfers in
42
-
-
42
12
-
-
12
Level 3 transfers out
(41)
-
(15)
(56)
(13)
-
(1)
(14)
Purchases/originations
124
105
164
393
98
-
-
98
Settlements/other decreases
(39)
(89)
-
(128)
(46)
-
-
(46)
Sales
(100)
(197)
(250)
(547)
(105)
-
-
(105)
Foreign exchange and other adjustments
1
2
-
3
3
-
1
4
At 31 December
472
96
685
1,253
278
1
30
309
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
(12)
12
4
4
(31)
-
-
(31)
2024
At 1 January
823
223
915
1,961
685
3
3
691
Amounts recorded in the income statement
(1)
(122)
(17)
12
(127)
(121)
-
-
(121)
Amount recorded in the statement of
comprehensive income
-
-
13
13
-
-
-
-
Level 3 transfers in
7
1
56
64
1
2
25
28
Level 3 transfers out
(3)
(19)
(241)
(263)
(2)
(3)
-
(5)
Purchases/originations
147
118
117
382
121
1
-
122
Settlements/other decreases
(44)
(27)
(18)
(89)
(32)
-
-
(32)
Sales
(178)
-
(72)
(250)
(182)
(2)
-
(184)
Foreign exchange and other adjustments
-
(1)
(8)
(9)
(5)
-
-
(5)
At 31 December
630
278
774
1,682
465
1
28
494
Amounts recorded in the income statement in
respect of balances held at period end - unrealised
83
1
12
96
56
-
-
56
\n
(1)
There were net losses on trading assets and liabilities of \u00a312 million
\n
(2024 - net losses of \u00a318 million) was included in income from trading
\n
activities. Net gains on other instruments of \u00a35 million (2024 - net gains
\n
of \u00a312 million) was included in other operating income or interest
\n
income as appropriate.
\n
(2)
Other trading assets and other trading liabilities comprise assets and
\n
liabilities held at fair value in trading portfolios.
\n
(3)
Other financial assets comprise fair value through other comprehensive
\n
income, designated as at fair value through profit or loss and other fair
\n
value through profit or loss.
Fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet
The following table shows the carrying value and fair value of \ufb01nancial instruments measured at amortised cost on the balance sheet.
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Items where
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
fair value
\u00a0
Carrying
\u00a0
Fair value hierarchy level
approximates
\u00a0
value
Fair value
Level 1
Level 2
Level 3
carrying value
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85.2
85.2
-
-
-
85.2
Settlement balances
0.6
0.6
-
-
-
0.6
Loans to banks
7.0
6.9
-
3.6
0.8
2.5
Loans to customers
418.9
414.5
-
33.1
381.4
-
Other financial assets - securities
36.6
36.6
15.4
15.1
6.1
-
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
93.0
93.0
-
-
-
93.0
Settlement balances
2.1
2.1
-
-
-
2.1
Loans to banks
6.0
5.9
-
1.8
0.5
3.6
Loans to customers
400.3
396.6
-
34.9
361.7
-
Other financial assets - securities
24.6
24.6
4.3
12.4
7.9
-
2025
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
44.1
44.1
-
36.2
3.8
4.1
Customer deposits
443.0
424.4
-
30.4
26.3
367.7
Settlement balances
0.9
0.9
-
-
-
0.9
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
63.0
63.6
-
51.9
11.7
-
Subordinated liabilities
5.9
6.1
-
6.1
-
-
Notes in circulation
3.2
3.2
-
-
-
3.2
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
31.5
31.2
-
23.9
3.0
4.3
Customer deposits
433.5
433.3
-
24.3
46.0
363.0
Settlement balances
1.7
1.7
-
-
-
1.7
Other financial liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
- debt securities in issue
57.5
57.6
-
48.9
8.7
-
Subordinated liabilities
5.9
6.0
-
6.0
-
-
Notes in circulation
3.3
3.3
-
-
-
3.3
\n
The assumptions and methodologies underlying the
calculation of fair values of \ufb01nancial instruments at the
balance sheet date are as follows:
Short-term \ufb01nancial instruments
For certain short-term \ufb01nancial instruments, including
but not limited to, cash and balances at central banks,
settlement balances, loans with short-term maturities,
notes in circulation and customer demand deposits,
carrying value is deemed a reasonable approximation
of fair value.
Loans to banks and customers
In estimating the fair value of net loans to customers
and banks measured at amortised cost, NatWest
Group\u2019s loans are segregated into appropriate portfolios
re\ufb02ecting the characteristics of the constituent loans.
Two principal methods are used to estimate fair value:
(a)
Contractual cash \ufb02ows that are discounted using a
market discount rate that incorporates the current
spread for the borrower or where this is not
observable, the spread for borrowers of a similar
credit standing.
(b) Expected cash \ufb02ows (unadjusted for credit losses)
are discounted at the current offer rate for the
same or similar products. The current methodology
caps all loan values at par rather than modelling
clients\u2019 option to repay loans early. This approach is
adopted for lending portfolios in Retail Banking,
Commercial & Institutional (SME loans) and Private
Banking & Wealth Management in order to re\ufb02ect
the homogeneous nature of these portfolios.
Debt securities and subordinated liabilities
Most debt securities are valued using quoted prices in
active markets or from quoted prices of similar \ufb01nancial
instruments. The remaining population is valued using
discounted cash\ufb02ows at current offer rates.
Bank and customer deposits
Fair values of deposits are estimated using discounted
cash \ufb02ow valuation techniques. Where required,
methodologies can be revised as additional information
and valuation inputs become available.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00637": { "value": "2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.During and after development, accumulated
costs are reviewed for impairment against the
bene\ufb01ts that the software is expected to
generate. Costs incurred prior to the
establishment of technical feasibility and
economic viability are expensed to the
income statement as incurred, as are all
training costs and general overheads. The
costs of licences to use computer software
that are expected to generate economic
bene\ufb01ts beyond three years are also reported
on the balance sheet.
Goodwill on the acquisition of a subsidiary is
the excess of the fair value of the
consideration paid, the fair value of any
existing interest in the subsidiary and the
amount of any non-controlling interest
measured either at fair value or at its share
of the subsidiary\u2019s net assets over the net fair
value of the subsidiary\u2019s identi\ufb01able assets,
liabilities, and contingent liabilities.
Goodwill is measured at initial cost less any
subsequent impairment losses. The gain or
loss on the disposal of a subsidiary includes
the carrying value of any related goodwill.
3.5. Impairment of non-\ufb01nancial assets
Goodwill is tested for impairment annually or
more frequently if events or changes in
circumstances indicate that it might be
impaired.
At each balance sheet date, we assess
whether there is any indication that other
intangible assets or property, plant and
equipment are impaired. If any such
indication exists, we estimate the recoverable
amount of the asset and compare it to its
balance sheet value to calculate if an
impairment loss should be recognised in the
income statement. A reversal of an
impairment loss on other intangible assets or
property, plant and equipment is recognised
in the income statement provided the
increased carrying value is not greater than it
would have been had no impairment loss
been recognised.
The recoverable amount of an asset that
does not generate cash \ufb02ows that are
independent from those of other assets or
groups of assets, is determined as part of the
cash-generating unit to which the asset
belongs.
A cash-generating unit is the smallest
identi\ufb01able group of assets that generates
cash in\ufb02ows that are largely independent of
the cash in\ufb02ows from other assets or groups
of assets. For the purposes of impairment
testing, goodwill acquired in a business
combination is allocated to cash-generating
units or groups of cash-generating units
expected to bene\ufb01t from the combination.
The recoverable amount of an asset or cash-
generating unit is the higher of its fair value
less cost to sell or its value in use. Value in
use is the present value of future cash \ufb02ows
from the asset or cash-generating unit
discounted at a rate that re\ufb02ects market
interest rates adjusted for risks speci\ufb01c to the
asset or cash-generating unit that have not
been considered in estimating future cash
\ufb02ows.
The assessment of asset impairment is based
upon value in use. This represents the value
of future cash\ufb02ows and uses our \ufb01ve-year
revenue and cost forecasts and the
expectation of long term economic growth
beyond this period. The \ufb01ve-year forecast
takes account of management\u2019s current
expectations of competitiveness and
pro\ufb01tability, including near-term effects of
climate transition risk. The long-term growth
rate re\ufb02ects external indicators which will
include market expectations on climate risk.
We do not consider any additional
adjustments to this indicator.Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00638": { "value": "2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00644": { "value": "2.3. Loan impairment provisions:
expected credit losses (ECL)
At each balance sheet date each \ufb01nancial
asset or portfolio of \ufb01nancial assets measured
at amortised cost or at fair value through
other comprehensive income, issued \ufb01nancial
guarantee and loan commitment (other than
those classi\ufb01ed as held for trading) is
assessed for impairment. Any change in
impairment is reported in the income
statement.
Loss allowances are forward-looking, based
on 12-month ECL where there has not been
a signi\ufb01cant increase in credit risk rating,
otherwise allowances are based on lifetime
expected losses.
ECL is a probability-weighted estimate of
credit losses. The probability is determined by
the risk of default which is applied to the cash
\ufb02ow estimates. In the absence of a change in
credit rating, allowances are recognised when
there is a reduction in the net present value
of expected cash \ufb02ows. Following a signi\ufb01cant
increase in credit risk, ECL is adjusted from
12 months to lifetime. This will lead to a
higher impairment charge.
The measurement of expected credit loss
considers the ability of borrowers to make
payments as they fall due. Future cash\ufb02ows
are discounted, so long-dated cash\ufb02ows are
less likely to affect current expectations on
credit loss. Our assessment of sector speci\ufb01c
risks, and whether additional adjustments are
required, include expectations of the ability of
those sectors to meet their \ufb01nancing needs in
the market. Changes in credit stewardship
and credit risk appetite that stem from
climate transition policies may directly affect
our positions.
Judgement is exercised as follows:
\u2022
Non-modelled portfolios
\u2013 under IFRS 9,
there are bespoke treatments for the
identi\ufb01cation of signi\ufb01cant increase in
credit risk. Benchmark PDs, EADs and
LGDs are reviewed annually for
appropriateness. The ECL calculation is
based on expected future cash \ufb02ows,
which is typically applied at a portfolio
level.
\u2022
Multiple economic scenarios (MES)
\u2013 the
central, or base, scenario is most critical
to the ECL calculation, independent of the
method used to generate a range of
alternative outcomes and their
probabilities.
\u2022
Signi\ufb01cant increase in credit risk
\u2013 IFRS 9
requires that at each reporting date, an
entity shall assess whether the credit risk
on an account has increased signi\ufb01cantly
since initial recognition. Part of this
assessment requires a comparison to be
made between the current lifetime PD (i.e.
the current probability of default over the
remaining lifetime) with the equivalent
lifetime PD as determined at the date of
initial recognition.
On restructuring where a \ufb01nancial asset is
not derecognised, the revised cash \ufb02ows are
used in re-estimating the credit loss. Where
restructuring causes derecognition of the
original \ufb01nancial asset, the fair value of the
replacement asset is used as the closing cash
\ufb02ow of the original asset.
Where in the course of the orderly realisation
of a loan, it is exchanged for equity shares or
property, the exchange is accounted for as
the sale of the loan and the acquisition of
equity securities or investment property.
Where our acquired interest is in equity
shares, relevant policies for control,
associates and joint ventures apply.
Impaired \ufb01nancial assets are written off and
therefore derecognised from the balance
sheet when we conclude that there is no
longer any realistic prospect of recovery of
part, or all, of the loan. For \ufb01nancial assets
that are individually assessed for impairment,
the timing of the write-off is determined on a
case-by-case basis.
Such \ufb01nancial assets are reviewed regularly
and write-off will be prompted by bankruptcy,
insolvency, renegotiation, and similar events.
The typical time frames from initial
impairment to write-off for our collectively
assessed portfolios are:
\u2022
Retail mortgages: write-off usually occurs
within \ufb01ve years, or earlier, when an
account is closed, but can be longer
where the customer engages
constructively;
\u2022
Credit cards: the irrecoverable amount is
typically written off after twelve arrears
cycles or at four years post default any
remaining amounts outstanding are
written off;
\u2022
Overdrafts and other unsecured loans:
write-off occurs within six years;
\u2022
Commercial loans: write-offs are
determined in the light of individual
circumstances; and uncollateralised
impaired business loans are generally
written off within \ufb01ve years.Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLoansAndReceivablesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00223": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.
Income and expenses of foreign subsidiaries
and branches are translated into sterling at
average exchange rates unless these do not
approximate the foreign exchange rates
ruling at the dates of the transactions.
Foreign exchange differences arising on the
translation of a foreign operation are
recognised in other comprehensive income.
The amount accumulated in equity is
reclassi\ufb01ed from equity to the income
statement on disposal of a foreign operation.1 Net interest income
Net interest income is the difference between the interest NatWest Group earns from its interest-bearing assets, such as loans, balances with central banks and other \ufb01nancial assets, and the
interest paid on its interest-bearing liabilities, such as deposits and subordinated liabilities.
Interest income on \ufb01nancial instruments measured at amortised cost, debt instruments classi\ufb01ed as FVOCI and the interest element of the effective portion of any designated hedging relationships are
measured using the effective interest rate method, which allocates the interest income or interest expense over the expected life of the asset or liability at the rate that exactly discounts all estimated
future cash \ufb02ows to equal the instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument's
yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a \ufb01nancial instrument are considered when estimating future cash \ufb02ows.
Interest income on \ufb01nancial assets is presented in interest receivable, interest expense on \ufb01nancial liabilities is presented in interest payable.
Negative interest on \ufb01nancial assets is presented in interest
payable and negative interest on \ufb01nancial liabilities is presented in interest receivable. Included in interest receivable (Loans to customers - amortised cost) is \ufb01nance lease income of \u00a3588 million (2024
- \u00a3549 million) which is recognised at a constant periodic rate of return before tax on the net investment.
For accounting policy information refer to Accounting policy 3.1.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Balances at central banks and loans to banks - amortised cost
3,299
4,047
3,737
Loans to customers - amortised cost
19,293
18,295
15,553
Other financial assets
3,106
2,845
1,736
Interest receivable
25,698
25,187
21,026
Bank deposits
1,776
1,534
1,039
Customer deposits
7,607
8,332
5,276
Other financial liabilities
3,103
3,581
3,198
Subordinated liabilities
383
465
464
Interest payable
12,869
13,912
9,977
Net interest income
12,829
11,275
11,049
\n
2 Non-interest income
There are three main categories of non-interest income: net fees and commissions, trading income, and other operating income.
Net fees and commissions is the difference between fees received from customers for services provided by NatWest Group, such as credit card annual fees, underwriting fees, payment services,
brokerage fees, trade \ufb01nance, investment management fees, trustee and \ufb01duciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer
incentives, loan administration, foreign currency transaction charges, and brokerage fees.
Trading income is earned from short-term \ufb01nancial assets and \ufb01nancial liabilities to either make a spread between purchase and sale price or held to take advantage of movements in prices and
yields.
Other operating income includes revenue from other operating activities which are not related to the principal activities of the company, such as: share of pro\ufb01t or loss of associates; operating lease
income; the pro\ufb01t or loss on the sale of a subsidiary or property, plant and equipment; pro\ufb01t or loss on own debt; and changes in the fair value of \ufb01nancial assets and liabilities designated at fair
value through pro\ufb01t or loss.
For accounting policy information refer to Accounting policies 3.1, 3.6, 3.8 and 3.11.
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Net fees and commissions
(1)
2,514
2,467
2,330
Trading income
\u00a0 \u00a0 \u00a0
Foreign exchange
452
310
270
Interest rate
(2)
590
687
595
Credit
68
(163)
(72)
Changes in fair value of own debt and derivative liabilities
\u00a0 \u00a0 \u00a0
attributable to own credit risk - debt securities in issue
1
(9)
(2)
Equities, commodities and other
1
-
3
\u00a0
1,112
825
794
Other operating income
\u00a0 \u00a0 \u00a0
Rental income on operating lease assets and investment property
219
233
234
Changes in fair value of financial assets and liabilities
\u00a0 \u00a0 \u00a0
designated at FVTPL
(3)
(132)
(137)
(150)
Changes in fair value of other financial assets at FVTPL
(4)
41
75
50
Hedge ineffectiveness
(16)
2
52
Profit/(loss) on disposal of amortised cost assets and liabilities
9
5
(5)
Loss on disposal of fair value through other comprehensive
\u00a0 \u00a0 \u00a0
income assets
(8)
(19)
(43)
Profit/(loss) on sale of property, plant and equipment
7
31
(21)
Loss on disposal of subsidiaries and associates
(43)
-
(2)
Share of profits/(losses) of associated entities
68
19
(9)
Foreign exchange recycling (losses)/gains
(28)
(76)
484
Other income
(5)
69
3
(11)
\u00a0
186
136
579
\u00a0
3,812
3,428
3,703
\n
(1)
Refer to Note 4 for further analysis.
(2)
Includes fair value changes on derivatives not designated in a hedge
accounting relationship, and gains and losses from structural hedges.
(3)
Includes related derivatives.
(4)
Includes instruments that have failed solely payments of principal and interest
testing under IFRS 9.
(5)
Includes dividend income \u00a360 million (2024 - \u00a39 million; 2023 - \u00a37 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00226": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.2 Non-interest income
There are three main categories of non-interest income: net fees and commissions, trading income, and other operating income.
Net fees and commissions is the difference between fees received from customers for services provided by NatWest Group, such as credit card annual fees, underwriting fees, payment services,
brokerage fees, trade \ufb01nance, investment management fees, trustee and \ufb01duciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer
incentives, loan administration, foreign currency transaction charges, and brokerage fees.
Trading income is earned from short-term \ufb01nancial assets and \ufb01nancial liabilities to either make a spread between purchase and sale price or held to take advantage of movements in prices and
yields.
Other operating income includes revenue from other operating activities which are not related to the principal activities of the company, such as: share of pro\ufb01t or loss of associates; operating lease
income; the pro\ufb01t or loss on the sale of a subsidiary or property, plant and equipment; pro\ufb01t or loss on own debt; and changes in the fair value of \ufb01nancial assets and liabilities designated at fair
value through pro\ufb01t or loss.
For accounting policy information refer to Accounting policies 3.1, 3.6, 3.8 and 3.11.
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Net fees and commissions
(1)
2,514
2,467
2,330
Trading income
\u00a0 \u00a0 \u00a0
Foreign exchange
452
310
270
Interest rate
(2)
590
687
595
Credit
68
(163)
(72)
Changes in fair value of own debt and derivative liabilities
\u00a0 \u00a0 \u00a0
attributable to own credit risk - debt securities in issue
1
(9)
(2)
Equities, commodities and other
1
-
3
\u00a0
1,112
825
794
Other operating income
\u00a0 \u00a0 \u00a0
Rental income on operating lease assets and investment property
219
233
234
Changes in fair value of financial assets and liabilities
\u00a0 \u00a0 \u00a0
designated at FVTPL
(3)
(132)
(137)
(150)
Changes in fair value of other financial assets at FVTPL
(4)
41
75
50
Hedge ineffectiveness
(16)
2
52
Profit/(loss) on disposal of amortised cost assets and liabilities
9
5
(5)
Loss on disposal of fair value through other comprehensive
\u00a0 \u00a0 \u00a0
income assets
(8)
(19)
(43)
Profit/(loss) on sale of property, plant and equipment
7
31
(21)
Loss on disposal of subsidiaries and associates
(43)
-
(2)
Share of profits/(losses) of associated entities
68
19
(9)
Foreign exchange recycling (losses)/gains
(28)
(76)
484
Other income
(5)
69
3
(11)
\u00a0
186
136
579
\u00a0
3,812
3,428
3,703
\n
(1)
Refer to Note 4 for further analysis.
(2)
Includes fair value changes on derivatives not designated in a hedge
accounting relationship, and gains and losses from structural hedges.
(3)
Includes related derivatives.
(4)
Includes instruments that have failed solely payments of principal and interest
testing under IFRS 9.
(5)
Includes dividend income \u00a360 million (2024 - \u00a39 million; 2023 - \u00a37 million).
3 Operating expenses
Operating expenses are expenses NatWest Group incurs in the running of its business such as all staff costs (for example salaries, bonus awards, pension costs and social security costs),
premises and equipment costs that arise from the occupation of premises and the use of equipment, depreciation and amortisation and other administrative expenses.
For accounting policy information refer to Accounting policies 3.3, 3.4 and 3.5.
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Salaries
2,456
2,477
2,483
Bonus awards
(1)
479
411
353
Temporary and contract costs
162
162
199
Social security costs
418
371
352
Pension costs
338
311
313
- defined benefit schemes (Note 5)
93
86
122
- defined contribution schemes
245
225
191
Other
321
329
201
Staff costs
4,174
4,061
3,901
Premises and equipment
1,291
1,211
1,153
Bank levy
123
142
109
Depreciation and amortisation
(2)
1,154
1,058
934
Other administrative expenses
(3)
1,520
1,677
1,899
Administrative expenses
4,088
4,088
4,095
\u00a0
8,262
8,149
7,996
\n
(1)
Includes current year charge for amounts deferred from prior years. Refer to reconciliation of bonus awards to income statement
charge on page 309.
(2)
Includes depreciation of right of use assets of \u00a392 million (2024 - \u00a3103 million; 2023 - \u00a3104 million).
(3)
Includes litigation and conduct costs, net of amounts recovered. Refer to Note 20 for further details.
The average number of persons employed during the year, excluding temporary staff and
rounded to the nearest hundred, was 59,300 (2024 \u2013 60,700; 2023 \u2013 61,500). The average
number of temporary employees during the year, rounded to the nearest hundred, was 1,300
(2024 \u2013 1,400; 2023 \u2013 2,100).
The number of persons employed at 31 December 2025, excluding temporary staff and
rounded to the nearest hundred, by reportable segment, was as follows:
Continuing operations
2025
2024
2023
Retail Banking
12,200
13,000
14,300
Private Banking & Wealth Management
2,100
2,200
2,400
Commercial & Institutional
12,300
12,700
12,400
Central items & other
32,400
31,800
32,500
Total
59,000
59,700
61,600
UK
39,000
40,100
41,500
India
18,800
17,600
16,900
Poland
(1)
100
800
1,500
USA
300
300
300
Republic of Ireland
-
100
400
Rest of the World
800
800
1,000
Total
59,000
59,700
61,600
\n
(1)
Re\ufb02ecting closure of operations in Poland.
Share-based payments
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Award plan
Eligible employees
Nature of award
Vesting conditions (1)
Settlement
Sharesave
UK, Channel Islands, Gibraltar, Isle
Option to buy shares under
Continuing employment or leavers in certain circumstances
2026 to 2030
\u00a0
of Man, Poland and India.
employee savings plan
\u00a0 \u00a0
Deferred performance
All
Awards of ordinary shares
Continuing employment or leavers in certain circumstances
2026 to 2031
awards
\u00a0
and conditional shares
\u00a0 \u00a0
Long-term incentives
(2)
Senior employees
Awards of ordinary shares
Continuing employment or leavers in certain circumstances and/or
2026 to 2032
\u00a0 \u00a0
and conditional shares
satisfaction of the pre-vesting assessment and underpins
\u00a0
Sharing in Success
(
3)
All
Awards of ordinary shares
Future continuing employment and achievement of pre-de\ufb01ned
2026
\u00a0 \u00a0
and conditional shares
measures.
\u00a0
\n
(1)
All awards are subject to the discretion of Remuneration Committee.
(2)
Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment.
Existing Long-term incentives vest over 3 to 7 years.
(3)
In 2025 12.5 million shares at total value of \u00a360.5 million were granted and vested under Sharing in Success.
Sharesave
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Average
Shares
Average
Shares
Average
Shares
\u00a0
exercise
under
exercise
under
exercise
under
\u00a0
price
option
price
option
price
option
\u00a0
\u00a3
(million)
\u00a3
(million)
\u00a3
(million)
At 1 January
1.93
101
1.59
114
1.63
99
Granted
4.67
18
2.94
24
1.42
43
Exercised
1.82
(20)
1.52
(32)
1.44
(23)
Cancelled
1.99
(3)
1.60
(5)
1.72
(5)
At 31 December
2.45
96
1.93
101
1.59
114
\n
The fair value of Sharesave options granted in 2025 was determined using a pricing model that
included: expected volatility of share price determined at the grant date based on historical share
price volatility over a period of up to \ufb01ve years; expected option lives that equal the vesting
period; estimated dividend yield on equity shares; and risk-free interest rates determined from
UK gilts with terms matching the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the
average market price over the \ufb01ve trading days (three trading days for Sharesave) preceding
grant date. When estimating the fair value of the award, the number of shares granted and the
prevailing market price as de\ufb01ned on page 155 are used.
The fair value of the award is
recognised as services are provided by employees over the vesting period.
Options are exercisable within six months of vesting; 5.1 million options were exercisable at 31
December 2025 (2024 \u2013 8.9 million; 2023 \u2013 19.0 million). The weighted average share price at
the date of exercise of options was \u00a36.39 (2024 - \u00a34.03; 2023 - \u00a32.20). At 31 December 2025,
exercise prices ranged from \u00a31.42 to \u00a34.67 (2024 - \u00a31.42 to \u00a32.94; 2023 - \u00a31.12 to \u00a31.89) and
the remaining average contractual life was 2.11 years (2024 \u2013 2.35 years; 2023 \u2013 2.25 years).
The fair value of options granted in 2025 was \u00a329.8 million (2024 - \u00a328.3 million; 2023 - \u00a327.3
million).
Deferred performance awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
66
30
76
35
93
46
Granted
60
14
50
23
52
20
Forfeited
(4)
(1)
(3)
(1)
(2)
(1)
Vested
(52)
(18)
(57)
(27)
(67)
(30)
At 31 December
70
25
66
30
76
35
\n
The awards granted in 2025 vest in equal tranches on the anniversary of the award,
predominantly over three years.
Long-term incentives
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
40
19
49
23
49
23
Granted
18
4
9
5
11
5
Vested/exercised
(13)
(5)
(11)
(5)
(10)
(4)
Lapsed
(4)
(1)
(7)
(4)
(1)
(1)
At 31 December
41
17
40
19
49
23
\n
The market value of awards vested/exercised in 2025 was \u00a334.4 million (2024 - \u00a319.3 million;
2023 - \u00a39.5 million).
Bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Change
\u00a0
\u00a3m
\u00a3m
%
Deferred cash awards
(1)
438
387
13%
Deferred share awards
58
61
(5%)
Total bonus awards
(2)
496
448
11%
Bonus awards as a % of operating profit before tax and bonus awards
6%
7%
\u00a0
Proportion of bonus awards that are deferred
\u00a0 \u00a0 \u00a0
- deferred cash awards
88%
86%
\u00a0
- deferred share awards
12%
14%
\u00a0
\n
Reconciliation of bonus awards to income statement charge
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Bonus awarded
496
448
356
Less: deferral of charge for amounts awarded for current year
(155)
(144)
(114)
Income statement charge for amounts awarded in current year
341
304
242
Add: current year charge for amounts deferred from prior years
144
109
115
Less: forfeiture of amounts deferred from prior years
(6)
(2)
(4)
Income statement charge for amounts deferred from prior years
138
107
111
Income statement charge for bonus awards
(2)
479
411
353
\n
Year in which income statement charge is expected to be taken for deferred bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Actual
Expected
\u00a0
2023
2024
2025
2026
2027 and beyond
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bonus awards deferred from 2023 and earlier
115
109
22
7
3
Bonus awards deferred from 2024
-
-
122
10
7
Less: forfeiture of amounts deferred from prior years
(4)
(2)
(6)
-
-
Bonus awards deferred for 2025
-
-
-
137
18
\u00a0
111
107
138
154
28
\n
(1)
Includes March cash awards which are limited to \u00a32,000 for all employees and
are paid in the March following the balance sheet date.
(2)
Excludes other performance-related compensation.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00224": { "value": "3.1. Revenue recognitionOther interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.
Income and expenses of foreign subsidiaries
and branches are translated into sterling at
average exchange rates unless these do not
approximate the foreign exchange rates
ruling at the dates of the transactions.
Foreign exchange differences arising on the
translation of a foreign operation are
recognised in other comprehensive income.
The amount accumulated in equity is
reclassi\ufb01ed from equity to the income
statement on disposal of a foreign operation.2 Non-interest income
There are three main categories of non-interest income: net fees and commissions, trading income, and other operating income.
Net fees and commissions is the difference between fees received from customers for services provided by NatWest Group, such as credit card annual fees, underwriting fees, payment services,
brokerage fees, trade \ufb01nance, investment management fees, trustee and \ufb01duciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer
incentives, loan administration, foreign currency transaction charges, and brokerage fees.
Trading income is earned from short-term \ufb01nancial assets and \ufb01nancial liabilities to either make a spread between purchase and sale price or held to take advantage of movements in prices and
yields.
Other operating income includes revenue from other operating activities which are not related to the principal activities of the company, such as: share of pro\ufb01t or loss of associates; operating lease
income; the pro\ufb01t or loss on the sale of a subsidiary or property, plant and equipment; pro\ufb01t or loss on own debt; and changes in the fair value of \ufb01nancial assets and liabilities designated at fair
value through pro\ufb01t or loss.
For accounting policy information refer to Accounting policies 3.1, 3.6, 3.8 and 3.11.
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Net fees and commissions
(1)
2,514
2,467
2,330
Trading income
\u00a0 \u00a0 \u00a0
Foreign exchange
452
310
270
Interest rate
(2)
590
687
595
Credit
68
(163)
(72)
Changes in fair value of own debt and derivative liabilities
\u00a0 \u00a0 \u00a0
attributable to own credit risk - debt securities in issue
1
(9)
(2)
Equities, commodities and other
1
-
3
\u00a0
1,112
825
794
Other operating income
\u00a0 \u00a0 \u00a0
Rental income on operating lease assets and investment property
219
233
234
Changes in fair value of financial assets and liabilities
\u00a0 \u00a0 \u00a0
designated at FVTPL
(3)
(132)
(137)
(150)
Changes in fair value of other financial assets at FVTPL
(4)
41
75
50
Hedge ineffectiveness
(16)
2
52
Profit/(loss) on disposal of amortised cost assets and liabilities
9
5
(5)
Loss on disposal of fair value through other comprehensive
\u00a0 \u00a0 \u00a0
income assets
(8)
(19)
(43)
Profit/(loss) on sale of property, plant and equipment
7
31
(21)
Loss on disposal of subsidiaries and associates
(43)
-
(2)
Share of profits/(losses) of associated entities
68
19
(9)
Foreign exchange recycling (losses)/gains
(28)
(76)
484
Other income
(5)
69
3
(11)
\u00a0
186
136
579
\u00a0
3,812
3,428
3,703
\n
(1)
Refer to Note 4 for further analysis.
(2)
Includes fair value changes on derivatives not designated in a hedge
accounting relationship, and gains and losses from structural hedges.
(3)
Includes related derivatives.
(4)
Includes instruments that have failed solely payments of principal and interest
testing under IFRS 9.
(5)
Includes dividend income \u00a360 million (2024 - \u00a39 million; 2023 - \u00a37 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00623": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00227": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.2 Non-interest income
There are three main categories of non-interest income: net fees and commissions, trading income, and other operating income.
Net fees and commissions is the difference between fees received from customers for services provided by NatWest Group, such as credit card annual fees, underwriting fees, payment services,
brokerage fees, trade \ufb01nance, investment management fees, trustee and \ufb01duciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer
incentives, loan administration, foreign currency transaction charges, and brokerage fees.
Trading income is earned from short-term \ufb01nancial assets and \ufb01nancial liabilities to either make a spread between purchase and sale price or held to take advantage of movements in prices and
yields.
Other operating income includes revenue from other operating activities which are not related to the principal activities of the company, such as: share of pro\ufb01t or loss of associates; operating lease
income; the pro\ufb01t or loss on the sale of a subsidiary or property, plant and equipment; pro\ufb01t or loss on own debt; and changes in the fair value of \ufb01nancial assets and liabilities designated at fair
value through pro\ufb01t or loss.
For accounting policy information refer to Accounting policies 3.1, 3.6, 3.8 and 3.11.
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Net fees and commissions
(1)
2,514
2,467
2,330
Trading income
\u00a0 \u00a0 \u00a0
Foreign exchange
452
310
270
Interest rate
(2)
590
687
595
Credit
68
(163)
(72)
Changes in fair value of own debt and derivative liabilities
\u00a0 \u00a0 \u00a0
attributable to own credit risk - debt securities in issue
1
(9)
(2)
Equities, commodities and other
1
-
3
\u00a0
1,112
825
794
Other operating income
\u00a0 \u00a0 \u00a0
Rental income on operating lease assets and investment property
219
233
234
Changes in fair value of financial assets and liabilities
\u00a0 \u00a0 \u00a0
designated at FVTPL
(3)
(132)
(137)
(150)
Changes in fair value of other financial assets at FVTPL
(4)
41
75
50
Hedge ineffectiveness
(16)
2
52
Profit/(loss) on disposal of amortised cost assets and liabilities
9
5
(5)
Loss on disposal of fair value through other comprehensive
\u00a0 \u00a0 \u00a0
income assets
(8)
(19)
(43)
Profit/(loss) on sale of property, plant and equipment
7
31
(21)
Loss on disposal of subsidiaries and associates
(43)
-
(2)
Share of profits/(losses) of associated entities
68
19
(9)
Foreign exchange recycling (losses)/gains
(28)
(76)
484
Other income
(5)
69
3
(11)
\u00a0
186
136
579
\u00a0
3,812
3,428
3,703
\n
(1)
Refer to Note 4 for further analysis.
(2)
Includes fair value changes on derivatives not designated in a hedge
accounting relationship, and gains and losses from structural hedges.
(3)
Includes related derivatives.
(4)
Includes instruments that have failed solely payments of principal and interest
testing under IFRS 9.
(5)
Includes dividend income \u00a360 million (2024 - \u00a39 million; 2023 - \u00a37 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00225": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.2 Non-interest income
There are three main categories of non-interest income: net fees and commissions, trading income, and other operating income.
Net fees and commissions is the difference between fees received from customers for services provided by NatWest Group, such as credit card annual fees, underwriting fees, payment services,
brokerage fees, trade \ufb01nance, investment management fees, trustee and \ufb01duciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer
incentives, loan administration, foreign currency transaction charges, and brokerage fees.
Trading income is earned from short-term \ufb01nancial assets and \ufb01nancial liabilities to either make a spread between purchase and sale price or held to take advantage of movements in prices and
yields.
Other operating income includes revenue from other operating activities which are not related to the principal activities of the company, such as: share of pro\ufb01t or loss of associates; operating lease
income; the pro\ufb01t or loss on the sale of a subsidiary or property, plant and equipment; pro\ufb01t or loss on own debt; and changes in the fair value of \ufb01nancial assets and liabilities designated at fair
value through pro\ufb01t or loss.
For accounting policy information refer to Accounting policies 3.1, 3.6, 3.8 and 3.11.
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Net fees and commissions
(1)
2,514
2,467
2,330
Trading income
\u00a0 \u00a0 \u00a0
Foreign exchange
452
310
270
Interest rate
(2)
590
687
595
Credit
68
(163)
(72)
Changes in fair value of own debt and derivative liabilities
\u00a0 \u00a0 \u00a0
attributable to own credit risk - debt securities in issue
1
(9)
(2)
Equities, commodities and other
1
-
3
\u00a0
1,112
825
794
Other operating income
\u00a0 \u00a0 \u00a0
Rental income on operating lease assets and investment property
219
233
234
Changes in fair value of financial assets and liabilities
\u00a0 \u00a0 \u00a0
designated at FVTPL
(3)
(132)
(137)
(150)
Changes in fair value of other financial assets at FVTPL
(4)
41
75
50
Hedge ineffectiveness
(16)
2
52
Profit/(loss) on disposal of amortised cost assets and liabilities
9
5
(5)
Loss on disposal of fair value through other comprehensive
\u00a0 \u00a0 \u00a0
income assets
(8)
(19)
(43)
Profit/(loss) on sale of property, plant and equipment
7
31
(21)
Loss on disposal of subsidiaries and associates
(43)
-
(2)
Share of profits/(losses) of associated entities
68
19
(9)
Foreign exchange recycling (losses)/gains
(28)
(76)
484
Other income
(5)
69
3
(11)
\u00a0
186
136
579
\u00a0
3,812
3,428
3,703
\n
(1)
Refer to Note 4 for further analysis.
(2)
Includes fair value changes on derivatives not designated in a hedge
accounting relationship, and gains and losses from structural hedges.
(3)
Includes related derivatives.
(4)
Includes instruments that have failed solely payments of principal and interest
testing under IFRS 9.
(5)
Includes dividend income \u00a360 million (2024 - \u00a39 million; 2023 - \u00a37 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00222": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.1 Net interest income
Net interest income is the difference between the interest NatWest Group earns from its interest-bearing assets, such as loans, balances with central banks and other \ufb01nancial assets, and the
interest paid on its interest-bearing liabilities, such as deposits and subordinated liabilities.
Interest income on \ufb01nancial instruments measured at amortised cost, debt instruments classi\ufb01ed as FVOCI and the interest element of the effective portion of any designated hedging relationships are
measured using the effective interest rate method, which allocates the interest income or interest expense over the expected life of the asset or liability at the rate that exactly discounts all estimated
future cash \ufb02ows to equal the instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument's
yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a \ufb01nancial instrument are considered when estimating future cash \ufb02ows.
Interest income on \ufb01nancial assets is presented in interest receivable, interest expense on \ufb01nancial liabilities is presented in interest payable.
Negative interest on \ufb01nancial assets is presented in interest
payable and negative interest on \ufb01nancial liabilities is presented in interest receivable. Included in interest receivable (Loans to customers - amortised cost) is \ufb01nance lease income of \u00a3588 million (2024
- \u00a3549 million) which is recognised at a constant periodic rate of return before tax on the net investment.
For accounting policy information refer to Accounting policy 3.1.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Balances at central banks and loans to banks - amortised cost
3,299
4,047
3,737
Loans to customers - amortised cost
19,293
18,295
15,553
Other financial assets
3,106
2,845
1,736
Interest receivable
25,698
25,187
21,026
Bank deposits
1,776
1,534
1,039
Customer deposits
7,607
8,332
5,276
Other financial liabilities
3,103
3,581
3,198
Subordinated liabilities
383
465
464
Interest payable
12,869
13,912
9,977
Net interest income
12,829
11,275
11,049
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00221": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.1 Net interest income
Net interest income is the difference between the interest NatWest Group earns from its interest-bearing assets, such as loans, balances with central banks and other \ufb01nancial assets, and the
interest paid on its interest-bearing liabilities, such as deposits and subordinated liabilities.
Interest income on \ufb01nancial instruments measured at amortised cost, debt instruments classi\ufb01ed as FVOCI and the interest element of the effective portion of any designated hedging relationships are
measured using the effective interest rate method, which allocates the interest income or interest expense over the expected life of the asset or liability at the rate that exactly discounts all estimated
future cash \ufb02ows to equal the instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument's
yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a \ufb01nancial instrument are considered when estimating future cash \ufb02ows.
Interest income on \ufb01nancial assets is presented in interest receivable, interest expense on \ufb01nancial liabilities is presented in interest payable.
Negative interest on \ufb01nancial assets is presented in interest
payable and negative interest on \ufb01nancial liabilities is presented in interest receivable. Included in interest receivable (Loans to customers - amortised cost) is \ufb01nance lease income of \u00a3588 million (2024
- \u00a3549 million) which is recognised at a constant periodic rate of return before tax on the net investment.
For accounting policy information refer to Accounting policy 3.1.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Balances at central banks and loans to banks - amortised cost
3,299
4,047
3,737
Loans to customers - amortised cost
19,293
18,295
15,553
Other financial assets
3,106
2,845
1,736
Interest receivable
25,698
25,187
21,026
Bank deposits
1,776
1,534
1,039
Customer deposits
7,607
8,332
5,276
Other financial liabilities
3,103
3,581
3,198
Subordinated liabilities
383
465
464
Interest payable
12,869
13,912
9,977
Net interest income
12,829
11,275
11,049
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00220": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.1 Net interest income
Net interest income is the difference between the interest NatWest Group earns from its interest-bearing assets, such as loans, balances with central banks and other \ufb01nancial assets, and the
interest paid on its interest-bearing liabilities, such as deposits and subordinated liabilities.
Interest income on \ufb01nancial instruments measured at amortised cost, debt instruments classi\ufb01ed as FVOCI and the interest element of the effective portion of any designated hedging relationships are
measured using the effective interest rate method, which allocates the interest income or interest expense over the expected life of the asset or liability at the rate that exactly discounts all estimated
future cash \ufb02ows to equal the instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument's
yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a \ufb01nancial instrument are considered when estimating future cash \ufb02ows.
Interest income on \ufb01nancial assets is presented in interest receivable, interest expense on \ufb01nancial liabilities is presented in interest payable.
Negative interest on \ufb01nancial assets is presented in interest
payable and negative interest on \ufb01nancial liabilities is presented in interest receivable. Included in interest receivable (Loans to customers - amortised cost) is \ufb01nance lease income of \u00a3588 million (2024
- \u00a3549 million) which is recognised at a constant periodic rate of return before tax on the net investment.
For accounting policy information refer to Accounting policy 3.1.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Balances at central banks and loans to banks - amortised cost
3,299
4,047
3,737
Loans to customers - amortised cost
19,293
18,295
15,553
Other financial assets
3,106
2,845
1,736
Interest receivable
25,698
25,187
21,026
Bank deposits
1,776
1,534
1,039
Customer deposits
7,607
8,332
5,276
Other financial liabilities
3,103
3,581
3,198
Subordinated liabilities
383
465
464
Interest payable
12,869
13,912
9,977
Net interest income
12,829
11,275
11,049
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00665": { "value": "3.1. Revenue recognition
Interest receivable and payable are
recognised in the income statement using the
effective interest rate method for all \ufb01nancial
instruments measured at amortised cost;
debt instruments measured at fair value
through other comprehensive income; and
the effective part of any related accounting
hedging instruments.
Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.
Other interest relating to \ufb01nancial instruments
measured at fair value is recognised as part
of the movement in fair value and is reported
in income from trading activities or other
operating income as relevant. Fees in respect
of services are recognised as the right to
consideration accrues through the
performance of each distinct service
obligation to the customer.
The arrangements are generally contractual
and the cost of providing the service is
incurred as the service is rendered. The price
is usually \ufb01xed and always determinable.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00645": { "value": "Finance lease income is recognised at a
constant periodic rate of return before tax on
the net investment on the lease.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00648": { "value": "3.2. Discontinued operations, held for sale
and disposal groups
The results of discontinued operations are
excluded from the results of continuing
operations and are presented as a single
amount as pro\ufb01t or loss from discontinued
operations, net of tax in the income
statement. Comparatives are re-presented
for the income statement, cash \ufb02ow
statement, statement of changes in equity
and related notes.
An asset or disposal group (assets and
liabilities) is classi\ufb01ed as held for sale if we will
recover its carrying amount principally
through a sale transaction rather than
through continuing use. It is measured at the
lower of its carrying amount or fair value less
cost to sell unless the existing measurement
provisions of IFRS apply. These are presented
as single amounts; comparatives are not re-
presented.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00647": { "value": "3.2. Discontinued operations, held for sale
and disposal groups
The results of discontinued operations are
excluded from the results of continuing
operations and are presented as a single
amount as pro\ufb01t or loss from discontinued
operations, net of tax in the income
statement. Comparatives are re-presented
for the income statement, cash \ufb02ow
statement, statement of changes in equity
and related notes.
An asset or disposal group (assets and
liabilities) is classi\ufb01ed as held for sale if we will
recover its carrying amount principally
through a sale transaction rather than
through continuing use. It is measured at the
lower of its carrying amount or fair value less
cost to sell unless the existing measurement
provisions of IFRS apply. These are presented
as single amounts; comparatives are not re-
presented.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00646": { "value": "3.2. Discontinued operations, held for sale
and disposal groups
The results of discontinued operations are
excluded from the results of continuing
operations and are presented as a single
amount as pro\ufb01t or loss from discontinued
operations, net of tax in the income
statement. Comparatives are re-presented
for the income statement, cash \ufb02ow
statement, statement of changes in equity
and related notes.
An asset or disposal group (assets and
liabilities) is classi\ufb01ed as held for sale if we will
recover its carrying amount principally
through a sale transaction rather than
through continuing use. It is measured at the
lower of its carrying amount or fair value less
cost to sell unless the existing measurement
provisions of IFRS apply. These are presented
as single amounts; comparatives are not re-
presented.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00229": { "value": "3.3. Staff costs
Employee costs, such as salaries, paid
absences, and other bene\ufb01ts are recognised
over the period in which the employees
provide the related services to us.
Employees may receive variable
compensation in cash, in deferred cash or
debt instruments of NatWest Group or in
ordinary shares of NatWest Group plc subject
to deferral, clawback and forfeiture criteria.
We operate a number of share-based
compensation schemes under which we
grant awards of NatWest Group plc shares
and share options to our employees. Such
awards are subject to vesting conditions.
Variable compensation that is settled in cash
or debt instruments is charged to the income
statement on a straight-line basis over the
period during which services are provided,
taking account of forfeiture and clawback
criteria. The value of employee services
received in exchange for NatWest Group plc
shares and share options is recognised as an
expense over the vesting period, subject to
deferral, clawback, cancellation and forfeiture
criteria with a corresponding increase in
equity. The fair value of shares granted is the
market price adjusted for the expected effect
of dividends as employees are not entitled to
dividends until shares are vested.
The fair value of options granted is
determined using option pricing models to
estimate the numbers of shares likely to vest.
These consider the exercise price of the
option, the current share price, the risk-free
interest rate, the expected volatility of the
share price over the life of the option and
other relevant factors such as the dividend
yield.
De\ufb01ned contribution pension scheme
A scheme where we pay \ufb01xed contributions
and there is no legal or constructive
obligation to pay further contributions or
bene\ufb01ts. Contributions are recognised in the
income statement as employee service costs
accrue.
De\ufb01ned bene\ufb01t pension scheme
A scheme that de\ufb01nes the bene\ufb01t an
employee will receive on retirement and is
dependent on one or more factors such as
age, salary, and years of service. The net of
the recognisable scheme assets and
obligations is reported on the balance sheet
in other assets or other liabilities. The de\ufb01ned
bene\ufb01t obligation is measured on an actuarial
basis.
The charge to the income statement for
pension costs (mainly the service cost and
the net interest on the net de\ufb01ned bene\ufb01t
asset or liability) is recognised in operating
expenses.
Actuarial gains and losses (i.e. gains and/or
losses on remeasuring the net de\ufb01ned bene\ufb01t
asset or liability due to changes in actuarial
measurement assumptions) are recognised in
other comprehensive income in full in the
period in which they arise, and not subject to
recycling to the income statement.
The difference between scheme assets and
scheme liabilities, the net de\ufb01ned bene\ufb01t
asset or liability, is recognised on the balance
sheet if the criteria of the asset ceiling test
are met. This requires the net de\ufb01ned bene\ufb01t
surplus to be limited to the present value of
any economic bene\ufb01ts available to us in the
form of refunds from the plan or reduced
contributions to it.
We will recognise a liability where a minimum
funding requirement exists for any of our
de\ufb01ned bene\ufb01t pension schemes. This re\ufb02ects
agreed minimum funding and the availability
of a net surplus as described above.
We recognise a net de\ufb01ned bene\ufb01t asset
when the net de\ufb01ned bene\ufb01t surplus can
generate a bene\ufb01t in the form of a refund or
reduction in future contributions to the plan.
The net bene\ufb01t pension asset is recognised at
the present value of the bene\ufb01ts that will be
available to us excluding interest and the
effect of the asset ceiling (if any), excluding
interest. Changes in the present value of the
net bene\ufb01t pension asset are recognised
immediately in other comprehensive income.
In instances where Trustees have the ability
to declare augmented bene\ufb01ts to
participants, we do not recognise a de\ufb01ned
bene\ufb01t pension asset and record the surplus
immediately in other comprehensive income.3 Operating expenses
Operating expenses are expenses NatWest Group incurs in the running of its business such as all staff costs (for example salaries, bonus awards, pension costs and social security costs),
premises and equipment costs that arise from the occupation of premises and the use of equipment, depreciation and amortisation and other administrative expenses.
For accounting policy information refer to Accounting policies 3.3, 3.4 and 3.5.
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Salaries
2,456
2,477
2,483
Bonus awards
(1)
479
411
353
Temporary and contract costs
162
162
199
Social security costs
418
371
352
Pension costs
338
311
313
- defined benefit schemes (Note 5)
93
86
122
- defined contribution schemes
245
225
191
Other
321
329
201
Staff costs
4,174
4,061
3,901
Premises and equipment
1,291
1,211
1,153
Bank levy
123
142
109
Depreciation and amortisation
(2)
1,154
1,058
934
Other administrative expenses
(3)
1,520
1,677
1,899
Administrative expenses
4,088
4,088
4,095
\u00a0
8,262
8,149
7,996
\n
(1)
Includes current year charge for amounts deferred from prior years. Refer to reconciliation of bonus awards to income statement
charge on page 309.
(2)
Includes depreciation of right of use assets of \u00a392 million (2024 - \u00a3103 million; 2023 - \u00a3104 million).
(3)
Includes litigation and conduct costs, net of amounts recovered. Refer to Note 20 for further details.
The average number of persons employed during the year, excluding temporary staff and
rounded to the nearest hundred, was 59,300 (2024 \u2013 60,700; 2023 \u2013 61,500). The average
number of temporary employees during the year, rounded to the nearest hundred, was 1,300
(2024 \u2013 1,400; 2023 \u2013 2,100).
The number of persons employed at 31 December 2025, excluding temporary staff and
rounded to the nearest hundred, by reportable segment, was as follows:
Continuing operations
2025
2024
2023
Retail Banking
12,200
13,000
14,300
Private Banking & Wealth Management
2,100
2,200
2,400
Commercial & Institutional
12,300
12,700
12,400
Central items & other
32,400
31,800
32,500
Total
59,000
59,700
61,600
UK
39,000
40,100
41,500
India
18,800
17,600
16,900
Poland
(1)
100
800
1,500
USA
300
300
300
Republic of Ireland
-
100
400
Rest of the World
800
800
1,000
Total
59,000
59,700
61,600
\n
(1)
Re\ufb02ecting closure of operations in Poland.
Share-based payments
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Award plan
Eligible employees
Nature of award
Vesting conditions (1)
Settlement
Sharesave
UK, Channel Islands, Gibraltar, Isle
Option to buy shares under
Continuing employment or leavers in certain circumstances
2026 to 2030
\u00a0
of Man, Poland and India.
employee savings plan
\u00a0 \u00a0
Deferred performance
All
Awards of ordinary shares
Continuing employment or leavers in certain circumstances
2026 to 2031
awards
\u00a0
and conditional shares
\u00a0 \u00a0
Long-term incentives
(2)
Senior employees
Awards of ordinary shares
Continuing employment or leavers in certain circumstances and/or
2026 to 2032
\u00a0 \u00a0
and conditional shares
satisfaction of the pre-vesting assessment and underpins
\u00a0
Sharing in Success
(
3)
All
Awards of ordinary shares
Future continuing employment and achievement of pre-de\ufb01ned
2026
\u00a0 \u00a0
and conditional shares
measures.
\u00a0
\n
(1)
All awards are subject to the discretion of Remuneration Committee.
(2)
Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment.
Existing Long-term incentives vest over 3 to 7 years.
(3)
In 2025 12.5 million shares at total value of \u00a360.5 million were granted and vested under Sharing in Success.
Sharesave
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Average
Shares
Average
Shares
Average
Shares
\u00a0
exercise
under
exercise
under
exercise
under
\u00a0
price
option
price
option
price
option
\u00a0
\u00a3
(million)
\u00a3
(million)
\u00a3
(million)
At 1 January
1.93
101
1.59
114
1.63
99
Granted
4.67
18
2.94
24
1.42
43
Exercised
1.82
(20)
1.52
(32)
1.44
(23)
Cancelled
1.99
(3)
1.60
(5)
1.72
(5)
At 31 December
2.45
96
1.93
101
1.59
114
\n
The fair value of Sharesave options granted in 2025 was determined using a pricing model that
included: expected volatility of share price determined at the grant date based on historical share
price volatility over a period of up to \ufb01ve years; expected option lives that equal the vesting
period; estimated dividend yield on equity shares; and risk-free interest rates determined from
UK gilts with terms matching the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the
average market price over the \ufb01ve trading days (three trading days for Sharesave) preceding
grant date. When estimating the fair value of the award, the number of shares granted and the
prevailing market price as de\ufb01ned on page 155 are used.
The fair value of the award is
recognised as services are provided by employees over the vesting period.
Options are exercisable within six months of vesting; 5.1 million options were exercisable at 31
December 2025 (2024 \u2013 8.9 million; 2023 \u2013 19.0 million). The weighted average share price at
the date of exercise of options was \u00a36.39 (2024 - \u00a34.03; 2023 - \u00a32.20). At 31 December 2025,
exercise prices ranged from \u00a31.42 to \u00a34.67 (2024 - \u00a31.42 to \u00a32.94; 2023 - \u00a31.12 to \u00a31.89) and
the remaining average contractual life was 2.11 years (2024 \u2013 2.35 years; 2023 \u2013 2.25 years).
The fair value of options granted in 2025 was \u00a329.8 million (2024 - \u00a328.3 million; 2023 - \u00a327.3
million).
Deferred performance awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
66
30
76
35
93
46
Granted
60
14
50
23
52
20
Forfeited
(4)
(1)
(3)
(1)
(2)
(1)
Vested
(52)
(18)
(57)
(27)
(67)
(30)
At 31 December
70
25
66
30
76
35
\n
The awards granted in 2025 vest in equal tranches on the anniversary of the award,
predominantly over three years.
Long-term incentives
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
40
19
49
23
49
23
Granted
18
4
9
5
11
5
Vested/exercised
(13)
(5)
(11)
(5)
(10)
(4)
Lapsed
(4)
(1)
(7)
(4)
(1)
(1)
At 31 December
41
17
40
19
49
23
\n
The market value of awards vested/exercised in 2025 was \u00a334.4 million (2024 - \u00a319.3 million;
2023 - \u00a39.5 million).
Bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Change
\u00a0
\u00a3m
\u00a3m
%
Deferred cash awards
(1)
438
387
13%
Deferred share awards
58
61
(5%)
Total bonus awards
(2)
496
448
11%
Bonus awards as a % of operating profit before tax and bonus awards
6%
7%
\u00a0
Proportion of bonus awards that are deferred
\u00a0 \u00a0 \u00a0
- deferred cash awards
88%
86%
\u00a0
- deferred share awards
12%
14%
\u00a0
\n
Reconciliation of bonus awards to income statement charge
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Bonus awarded
496
448
356
Less: deferral of charge for amounts awarded for current year
(155)
(144)
(114)
Income statement charge for amounts awarded in current year
341
304
242
Add: current year charge for amounts deferred from prior years
144
109
115
Less: forfeiture of amounts deferred from prior years
(6)
(2)
(4)
Income statement charge for amounts deferred from prior years
138
107
111
Income statement charge for bonus awards
(2)
479
411
353
\n
Year in which income statement charge is expected to be taken for deferred bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Actual
Expected
\u00a0
2023
2024
2025
2026
2027 and beyond
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bonus awards deferred from 2023 and earlier
115
109
22
7
3
Bonus awards deferred from 2024
-
-
122
10
7
Less: forfeiture of amounts deferred from prior years
(4)
(2)
(6)
-
-
Bonus awards deferred for 2025
-
-
-
137
18
\u00a0
111
107
138
154
28
\n
(1)
Includes March cash awards which are limited to \u00a32,000 for all employees and
are paid in the March following the balance sheet date.
(2)
Excludes other performance-related compensation.5 Pensions
NatWest Group operates two types of pension scheme: de\ufb01ned contribution and de\ufb01ned bene\ufb01t. The de\ufb01ned contribution schemes invest contributions in a choice of funds and the
accumulated contributions and investment returns are used by the employee to provide bene\ufb01ts on retirement. There is no legal or constructive obligation for NatWest Group to pay any
further contributions or bene\ufb01ts. The de\ufb01ned bene\ufb01t schemes provide pensions in retirement based on employees' pensionable salaries and service.
NatWest Group\u2019s balance sheet includes any
de\ufb01ned bene\ufb01t pension scheme surplus or
de\ufb01cit as a retirement bene\ufb01t asset or liability
reported in other assets and other liabilities.
The surplus or de\ufb01cit is the difference
between the liabilities to be paid from the
de\ufb01ned bene\ufb01t scheme and the assets held
by the scheme to meet these liabilities. The
liabilities are calculated by external actuaries
using a number of \ufb01nancial and demographic
assumptions.
For some NatWest Group de\ufb01ned bene\ufb01t
schemes where there is a net de\ufb01ned bene\ufb01t
surplus in excess of the present value of any
economic bene\ufb01ts that can be obtained from
that surplus, the application of accounting
standards means we do not recognise that
surplus on the balance sheet.
For accounting policy information refer to
Accounting policy 3.3.
De\ufb01ned contribution schemes
NatWest Group sponsors several de\ufb01ned
contribution schemes in different territories,
which new employees are entitled to join.
NatWest Group pays speci\ufb01c contributions
into individual investment funds on employees\u2019
behalf. Once those contributions are paid,
there is no further liability on the NatWest
Group balance sheet relating to the de\ufb01ned
contribution schemes.
De\ufb01ned bene\ufb01t schemes
NatWest Group sponsors a number of
pension schemes in the UK and overseas,
including the Main section of the NatWest
Group Pension Fund (the Main section) which
operates under UK trust law and is managed
and administered on behalf of its members in
accordance with the terms of the trust deed,
the scheme rules and UK legislation.
Pension fund trustees are appointed to
operate each fund and ensure bene\ufb01ts are
paid in accordance with the scheme rules
and national law. The trustees are the legal
owner of a scheme\u2019s assets, and have a duty
to act in the best interests of all scheme
members.
The schemes generally provide a pension of
one-sixtieth of \ufb01nal pensionable salary for
each year of service prior to retirement up to
a maximum of 40 years and are contributory
for current members.
These have been closed to new entrants
since 2006, although active members
continue to build up additional pension
bene\ufb01ts, currently subject to 2% maximum
annual pensionable salary in\ufb02ation, while they
remain employed by NatWest Group.
The Main section corporate trustee is
NatWest Pension Trustee Limited (the
Trustee), a wholly owned subsidiary of NWB
Plc, Principal Employer of the Main section.
The Board of the Trustee includes member
trustee directors selected from eligible active
staff, deferred and pensioner members who
apply and trustee directors appointed by
NatWest Group.
Under UK legislation, a de\ufb01ned bene\ufb01t
pension scheme is required to meet the
statutory funding objective of having suf\ufb01cient
and appropriate assets to cover its liabilities
(the pensions that have been promised to
members).
Similar governance principles apply to
NatWest Group\u2019s other de\ufb01ned bene\ufb01t
pension schemes.
Investment strategy
The assets of the Main section represent 90%
of all plan assets at 31 December 2025 (2024
- 90%) and are invested as shown below.
Within the non-insured portfolio the Main
section employs physical, derivative and non-
derivative instruments to achieve a desired
asset class exposure and to reduce the
section\u2019s interest rate, in\ufb02ation, and currency
risk. This means that the net funding position
is considerably less sensitive to changes in
market conditions than the value of the
assets or liabilities in isolation. In particular,
movements in interest rate and in\ufb02ation are
substantially hedged by the Trustee.
The Main and AA sections now include buy-in
insurance policies, following transactions over
2023-2025. Each insurance transaction saw
a premium paid to an insurer in exchange for
a buy-in insurance contract. The contracts
provide a stream of cash\ufb02ows to the Trustee
replicating payments due to members,
thereby passing material demographic and
market risk to the insurer.
At 31 December 2025, the Main section
included buy-in insurance contracts covering
around 44% of the liabilities, while around
99% of AA section liabilities were insured.
The premium for each transaction was
determined by the insurer using its pricing
basis. Under IAS 19, the value placed on this
asset mirrors the valuation of the de\ufb01ned
bene\ufb01t obligations covered, incorporating an
assessment of credit risk. Since the insurer\u2019s
pricing basis is more conservative than the
best-estimate valuation under IAS 19, an
asset loss arises at outset.
However, the
asset loss is offset by a corresponding
movement in the asset ceiling adjustment,
meaning the net balance sheet and OCI
impacts are neutral. Once the contract has
been established, the value of the buy-in
insurance contracts will move in line with
movements in the de\ufb01ned bene\ufb01t obligations
covered, protecting the scheme against
demographic and market risk.
Major classes of plan assets as a percentage of total plan assets of the Main section
\n\n \n
2025
2024
Quoted
Unquoted
Total
Quoted
Unquoted
Total
%
%
%
%
%
%
Equities
-
6.1
6.1
0.1
6.6
6.7
Index-linked bonds
16.8
-
16.8
23.6
-
23.6
Government bonds
8.6
-
8.6
9.9
-
9.9
Corporate and other bonds
12.4
3.0
15.4
14.4
4.1
18.5
Real estate
-
2.7
2.7
-
2.4
2.4
Derivatives
-
(0.2)
(0.2)
-
0.1
0.1
Buy-in insurance contracts
-
35.9
35.9
-
27.0
27.0
Cash and other assets
-
14.7
14.7
-
11.8
11.8
37.8
62.2
100.0
48.0
52.0
100.0
\n
The Main section\u2019s holdings of derivative instruments are summarised in the table below
:
\n\n \n
2025
2024
Notional
Fair value
Notional
Fair value
amounts
Assets
Liabilities
amounts
Assets
Liabilities
\u00a3bn
\u00a3m
\u00a3m
\u00a3bn
\u00a3m
\u00a3m
Inflation rate swaps
8
33
88
24
1,548
812
Interest rate swaps
30
363
390
57
3,096
3,763
Currency forwards
10
76
38
8
60
130
Equity and bond call options
-
-
-
-
-
-
Equity and bond put options
-
-
-
-
-
-
Other
1
-
3
1
22
4
\n
Swaps have been executed at prevailing market rates and within standard market bid/offer spreads with a number of counterparties, including NWB Plc.
\n
At 31 December 2025, the gross notional value of the swaps was \u00a339 billion (2024 - \u00a381 billion) and had a net negative fair value of \u00a385 million (2024 - \u00a373 million net positive) against which the
\n
scheme had posted 43% collateral.
\n
The schemes do not invest directly in NatWest Group but may have exposure to NatWest Group through indirect holdings. The trustees of the respective UK schemes are responsible for ensuring that
\n
indirect investments in NatWest Group do not exceed the regulatory limit of 5% of plan assets.
Changes in value of net pension assets/(liability)
\n\n \n
Main section
All schemes
Fair value
Present value of
Asset ceiling/
Net pension
Fair value
Present value
Asset ceiling/
Net
of plan
defined benefit
minimum
assets/
of plan
of defined
minimum
pension
assets
obligation (1)
funding
liability
assets
benefit obligation (1)
funding
assets (2)
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2024
33,638
(26,534)
(7,104)
-
37,111
(29,592)
(7,417)
102
Currency translation and other adjustments
-
-
-
-
(5)
9
(4)
-
Income statement - operating expenses
1,589
(1,319)
(341)
(71)
1,737
(1,468)
(355)
(86)
Other comprehensive income
(4,612)
2,118
2,360
(134)
(4,860)
2,278
2,416
(166)
Contributions by employer
205
-
-
205
250
-
-
250
Contributions by plan participants and other scheme members
7
(7)
-
-
11
(11)
-
-
Assets/liabilities extinguished upon settlement
-
-
-
-
(42)
42
-
-
Benefits paid
(1,281)
1,281
-
-
(1,445)
1,455
-
10
At 1 January 2025
29,546
(24,461)
(5,085)
-
32,757
(27,287)
(5,360)
110
Currency translation and other adjustments
-
-
-
-
34
(11)
(12)
11
Income statement - operating expenses
Net interest expense
1,606
(1,323)
(282)
1
1,755
(1,453)
(294)
8
Current service cost
-
(59)
-
(59)
-
(85)
-
(85)
Past service cost
-
(1)
-
(1)
-
(14)
-
(14)
Loss on curtailments and settlements
-
-
-
-
-
(2)
-
(2)
1,606
(1,383)
(282)
(59)
1,755
(1,554)
(294)
(93)
Other comprehensive income
Return on plan assets excluding recognised interest income
(3)
(1,107)
-
-
(1,107)
(1,305)
-
-
(1,305)
Experience gains and losses
-
(165)
-
(165)
-
(176)
-
(176)
Effect of changes in actuarial financial assumptions
-
823
-
823
-
1,001
-
1,001
Effect of changes in actuarial demographic assumptions
-
(108)
-
(108)
-
(91)
-
(91)
Asset ceiling adjustments
(3)
-
-
565
565
-
-
602
602
(1,107)
550
565
8
(1,305)
734
602
31
Contributions by employer
(4)
51
-
-
51
93
-
-
93
Contributions by plan participants and other scheme members
7
(7)
-
-
10
(10)
-
-
Assets/liabilities extinguished upon settlement
-
-
-
-
(55)
55
-
-
Benefits paid
(1,292)
1,292
-
-
(1,444)
1,448
-
4
At 31 December 2025
28,811
(24,009)
(4,802)
-
31,845
(26,625)
(5,064)
156
\n
(1)
Defined benefit obligations are subject to annual valuation by independent actuaries.
\n
(2)
NatWest Group recognises the net pension scheme surplus or deficit as a net asset or liability. In doing so, the funded status is adjusted to reflect any schemes with a surplus that NatWest Group may not be able to access, as well as any minimum funding requirement to pay in additional
\n
contributions. This is most relevant to the Main section, where the surplus is not recognised as the trustees have rights over the use of the surplus. Other NatWest Group schemes that this applies to include the Ulster Bank Pension Scheme (NI) and the NatWest Markets section.
\n
(3)
Buy-in transactions have had an, offsetting impact on the \u2018Return on plan assets excluding recognised interest income\u2019 and \u201cAsset ceiling adjustments\u201d line items recognised in OCI.
\n
(4)
NatWest Group expects to make contributions to the Main section of \u00a340 million in 2026.
Amounts recognised on the balance sheet
All schemes
2025
2024
\u00a3m
\u00a3m
Fund asset at fair value
31,845
32,757
Present value of fund liabilities
(26,625)
(27,287)
Funded status
5,220
5,470
Assets ceiling/minimum funding
(5,064)
(5,360)
156
110
\n
Net pension asset/(liability) comprises
2025
2024
\u00a3m
\u00a3m
Net assets of schemes in surplus (Note 17)
234
190
Net liabilities of schemes in deficit (Note 20)
(78)
(80)
156
110
\n
Funding and contributions by NatWest Group
\n
In the UK, the trustees of de\ufb01ned bene\ufb01t pension schemes are required to perform funding
\n
valuations every three years. The trustees and the sponsor, with the support of the Scheme
\n
Actuary, agree the assumptions used to value the liabilities and to determine future contribution
\n
requirements. The funding assumptions incorporate a margin for prudence over and above the
\n
expected cost of providing the bene\ufb01ts promised to members, taking into account the sponsor\u2019s
\n
covenant and the investment strategy of the scheme. Similar arrangements apply in the other
\n
territories where NatWest Group sponsors de\ufb01ned bene\ufb01t pension schemes.
\n
A full triennial funding valuation of the Main section, effective 31 December 2023, was completed
\n
during \ufb01nancial year 2024.
\n
This triennial funding valuation determined the funding level to be 115%, pension liabilities to be
\n
\u00a329 billion and the surplus to be \u00a34 billion, all assessed on the agreed funding basis. The average
\n
cost of the future service of current members is 21.2% of salary before contributions from those
\n
members.
Given the strong funding level, it was agreed that future service contributions would
\n
cease from 1 January 2025. The sponsor continues to meet administrative expenses.
\n
The key assumptions used to determine the uninsured funding liabilities were the discount rate,
\n
which is determined based on \ufb01xed interest swap and gilt yields plus 0.64% per annum, and
\n
mortality assumptions, which result in life expectancies of 27.1/29.1 years for male/female
\n
pensioners who were age 60 and 28.5/30.6 years from age 60 for males/females who were age
\n
40 at the valuation date.
\n
Accounting Assumptions
\n
Placing a value on NatWest Group\u2019s de\ufb01ned bene\ufb01t pension schemes\u2019 liabilities requires NatWest
\n
Group\u2019s management to make a number of assumptions, with the support of independent
\n
actuaries. The ultimate cost of the de\ufb01ned bene\ufb01t obligations depends upon actual future events
\n
and the assumptions made are unlikely to be exactly borne out in practice, meaning the \ufb01nal
\n
cost may be higher or lower than expected.
\n
The most signi\ufb01cant assumptions used for the Main section are shown below:
Principal IAS 19 actuarial assumptions
(1)
2025
2024
%
%
Discount rate
5.7
5.6
Inflation assumption (RPI)
2.9
3.2
Rate of increase in salaries
1.8
1.8
Rate of increase in deferred pensions
2.9
3.4
Rate of increase in pensions in payment
2.4
2.6
Lump sum conversion rate at retirement
18.0
18.0
Longevity at age 60:
years
years
Current pensioners
Males
26.9
26.5
Females
28.6
28.5
Future pensioners, currently aged 40
Males
27.9
27.5
Females
29.9
29.7
\n
(1)
The above financial assumptions are long-term assumptions set with reference to the period over which the obligations are expected to be
\n
settled.
Discount rate
The IAS 19 valuation uses a single discount rate set by reference to the yield on a basket of high quality sterling corporate bonds.
Signi\ufb01cant judgement is required when setting the criteria for bonds to be included in the basket of bonds that is used to determine the discount rate used in the IAS 19 valuations. The criteria include
issue size, quality of pricing and the exclusion of outliers. Judgement is also required in determining the shape of the yield curve at long durations; a constant credit spread relative to gilts is assumed.
Sensitivity to the main assumptions is presented below.
The weighted average duration of the Main section\u2019s de\ufb01ned bene\ufb01t obligation at 31 December 2025 is 13 years (2024 \u2013 13 years). The chart below shows the projected bene\ufb01t payment pattern for
the Main section in nominal terms. These cash\ufb02ows are based on the most recent formal actuarial valuation, effective 31 December 2023.
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Expected Cashflows (\u00a3m)
Year
Pensioner
Non pensioner
The table below shows how the funded status of the Main section would change if the key assumptions used were changed independently. In practice the variables have a degree of correlation and do
\n
not move completely in isolation.
\n\n \n
(Decrease)/
(Decrease)/
Increase in net
increase in value
increase in value
pension
of assets
of liabilities
(obligations)/assets
2025
(1)
\u00a3m
\u00a3m
\u00a3m
0.5% increase in interest rates/discount rate
(1,434)
(1,425)
(9)
0.25% increase in inflation
585
525
60
0.5% increase in credit spreads
(10)
(1,425)
1,415
Longevity increase of one year
308
773
(465)
0.25% additional rate of increase in pensions in payment
264
613
(349)
Increase in equity values of 10%
(2)
180
na
180
2024
0.5% increase in interest rates/discount rate
(1,554)
(1,529)
(25)
0.25% increase in inflation
648
571
77
0.5% increase in credit spreads
(4)
(1,529)
1,525
Longevity increase of one year
295
832
(537)
0.25% additional rate of increase in pensions in payment
205
605
(400)
Increase in equity values of 10%
(2)
199
na
199
\n
na = not applicable
\n
(1)
The asset sensitivities shown for 2025 are derived using benchmark
\n
information, so will be more approximate than those shown for 2024.
\n
(2)
Includes both quoted and private equity.
\n
The table below shows the combined change in de\ufb01ned bene\ufb01t obligation from larger movements in these assumptions, assuming no changes in other assumptions.
\n\n \n
Change in life expectancies
- 2 years
- 1 year
No change
+ 1 year
+ 2 years
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Change in credit spreads
+50 bps
(2.9)
(2.2)
(1.4)
(0.7)
-
No change
(1.6)
(0.8)
-
0.8
1.5
-50 bps
(0.1)
0.7
1.6
2.4
3.2
2024
Change in credit spreads
+50 bps
(3.1)
(2.3)
(1.5)
(0.7)
-
No change
(1.7)
(0.9)
-
0.8
1.7
-50 bps
(0.2)
0.7
1.7
2.5
3.4
\n
The de\ufb01ned bene\ufb01t obligation of the Main section is attributable to the different classes of scheme members in the following proportions:
\n\n \n
2025
2024
Membership category
%
%
Active members
4.5
6.9
Deferred members
34.5
40.7
Pensioners and dependants
61.0
52.4
100.0
100.0
The experience history of NatWest Group schemes is shown below:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Main section
All schemes
\u00a0
2025
2024
2023
2022
2021
2025
2024
2023
2022
2021
Experience history of defined benefit schemes
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Fair value of plan assets
28,811
29,546
33,638
34,016
52,021
31,845
32,757
37,111
37,598
57,787
Present value of plan obligations
(24,009)
(24,461)
(26,534)
(24,733)
(42,020)
(26,625)
(27,287)
(29,592)
(27,601)
(46,808)
Net surplus
4,802
5,085
7,104
9,283
10,001
5,220
5,470
7,519
9,997
10,979
Experience (losses)/gains on plan liabilities
(165)
13
(1,531)
(2,053)
241
(176)
(3)
(1,599)
(2,137)
237
Experience (losses)/gains on plan assets
(1,107)
(4,612)
(1,042)
(18,180)
841
(1,305)
(4,860)
(1,182)
(20,326)
872
Actual return on plan assets
499
(3,023)
634
(17,248)
1,554
450
(3,123)
659
(19,285)
1,667
Actual return on plan assets
1.7%
(9.0%)
1.9%
(33.2%)
3.0%
1.4%
(8.4%)
1.8%
(33.4%)
2.9%
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00627": { "value": "3.3. Staff costs
Employee costs, such as salaries, paid
absences, and other bene\ufb01ts are recognised
over the period in which the employees
provide the related services to us.
Employees may receive variable
compensation in cash, in deferred cash or
debt instruments of NatWest Group or in
ordinary shares of NatWest Group plc subject
to deferral, clawback and forfeiture criteria.
We operate a number of share-based
compensation schemes under which we
grant awards of NatWest Group plc shares
and share options to our employees. Such
awards are subject to vesting conditions.
Variable compensation that is settled in cash
or debt instruments is charged to the income
statement on a straight-line basis over the
period during which services are provided,
taking account of forfeiture and clawback
criteria. The value of employee services
received in exchange for NatWest Group plc
shares and share options is recognised as an
expense over the vesting period, subject to
deferral, clawback, cancellation and forfeiture
criteria with a corresponding increase in
equity. The fair value of shares granted is the
market price adjusted for the expected effect
of dividends as employees are not entitled to
dividends until shares are vested.
The fair value of options granted is
determined using option pricing models to
estimate the numbers of shares likely to vest.
These consider the exercise price of the
option, the current share price, the risk-free
interest rate, the expected volatility of the
share price over the life of the option and
other relevant factors such as the dividend
yield. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00624": { "value": "3.3. Staff costs
Employee costs, such as salaries, paid
absences, and other bene\ufb01ts are recognised
over the period in which the employees
provide the related services to us.
Employees may receive variable
compensation in cash, in deferred cash or
debt instruments of NatWest Group or in
ordinary shares of NatWest Group plc subject
to deferral, clawback and forfeiture criteria.
We operate a number of share-based
compensation schemes under which we
grant awards of NatWest Group plc shares
and share options to our employees. Such
awards are subject to vesting conditions.
Variable compensation that is settled in cash
or debt instruments is charged to the income
statement on a straight-line basis over the
period during which services are provided,
taking account of forfeiture and clawback
criteria. The value of employee services
received in exchange for NatWest Group plc
shares and share options is recognised as an
expense over the vesting period, subject to
deferral, clawback, cancellation and forfeiture
criteria with a corresponding increase in
equity. The fair value of shares granted is the
market price adjusted for the expected effect
of dividends as employees are not entitled to
dividends until shares are vested.
The fair value of options granted is
determined using option pricing models to
estimate the numbers of shares likely to vest.
These consider the exercise price of the
option, the current share price, the risk-free
interest rate, the expected volatility of the
share price over the life of the option and
other relevant factors such as the dividend
yield.
De\ufb01ned contribution pension scheme
A scheme where we pay \ufb01xed contributions
and there is no legal or constructive
obligation to pay further contributions or
bene\ufb01ts. Contributions are recognised in the
income statement as employee service costs
accrue.
De\ufb01ned bene\ufb01t pension scheme
A scheme that de\ufb01nes the bene\ufb01t an
employee will receive on retirement and is
dependent on one or more factors such as
age, salary, and years of service. The net of
the recognisable scheme assets and
obligations is reported on the balance sheet
in other assets or other liabilities. The de\ufb01ned
bene\ufb01t obligation is measured on an actuarial
basis.
The charge to the income statement for
pension costs (mainly the service cost and
the net interest on the net de\ufb01ned bene\ufb01t
asset or liability) is recognised in operating
expenses.
Actuarial gains and losses (i.e. gains and/or
losses on remeasuring the net de\ufb01ned bene\ufb01t
asset or liability due to changes in actuarial
measurement assumptions) are recognised in
other comprehensive income in full in the
period in which they arise, and not subject to
recycling to the income statement.
The difference between scheme assets and
scheme liabilities, the net de\ufb01ned bene\ufb01t
asset or liability, is recognised on the balance
sheet if the criteria of the asset ceiling test
are met. This requires the net de\ufb01ned bene\ufb01t
surplus to be limited to the present value of
any economic bene\ufb01ts available to us in the
form of refunds from the plan or reduced
contributions to it.
We will recognise a liability where a minimum
funding requirement exists for any of our
de\ufb01ned bene\ufb01t pension schemes. This re\ufb02ects
agreed minimum funding and the availability
of a net surplus as described above.
We recognise a net de\ufb01ned bene\ufb01t asset
when the net de\ufb01ned bene\ufb01t surplus can
generate a bene\ufb01t in the form of a refund or
reduction in future contributions to the plan.
The net bene\ufb01t pension asset is recognised at
the present value of the bene\ufb01ts that will be
available to us excluding interest and the
effect of the asset ceiling (if any), excluding
interest. Changes in the present value of the
net bene\ufb01t pension asset are recognised
immediately in other comprehensive income.
In instances where Trustees have the ability
to declare augmented bene\ufb01ts to
participants, we do not recognise a de\ufb01ned
bene\ufb01t pension asset and record the surplus
immediately in other comprehensive income.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00231": { "value": "3.3. Staff costs
Employee costs, such as salaries, paid
absences, and other bene\ufb01ts are recognised
over the period in which the employees
provide the related services to us.
Employees may receive variable
compensation in cash, in deferred cash or
debt instruments of NatWest Group or in
ordinary shares of NatWest Group plc subject
to deferral, clawback and forfeiture criteria.
We operate a number of share-based
compensation schemes under which we
grant awards of NatWest Group plc shares
and share options to our employees. Such
awards are subject to vesting conditions.
Variable compensation that is settled in cash
or debt instruments is charged to the income
statement on a straight-line basis over the
period during which services are provided,
taking account of forfeiture and clawback
criteria. The value of employee services
received in exchange for NatWest Group plc
shares and share options is recognised as an
expense over the vesting period, subject to
deferral, clawback, cancellation and forfeiture
criteria with a corresponding increase in
equity. The fair value of shares granted is the
market price adjusted for the expected effect
of dividends as employees are not entitled to
dividends until shares are vested.
The fair value of options granted is
determined using option pricing models to
estimate the numbers of shares likely to vest.
These consider the exercise price of the
option, the current share price, the risk-free
interest rate, the expected volatility of the
share price over the life of the option and
other relevant factors such as the dividend
yield.
De\ufb01ned contribution pension scheme
A scheme where we pay \ufb01xed contributions
and there is no legal or constructive
obligation to pay further contributions or
bene\ufb01ts. Contributions are recognised in the
income statement as employee service costs
accrue.
De\ufb01ned bene\ufb01t pension scheme
A scheme that de\ufb01nes the bene\ufb01t an
employee will receive on retirement and is
dependent on one or more factors such as
age, salary, and years of service. The net of
the recognisable scheme assets and
obligations is reported on the balance sheet
in other assets or other liabilities. The de\ufb01ned
bene\ufb01t obligation is measured on an actuarial
basis.
The charge to the income statement for
pension costs (mainly the service cost and
the net interest on the net de\ufb01ned bene\ufb01t
asset or liability) is recognised in operating
expenses.
Actuarial gains and losses (i.e. gains and/or
losses on remeasuring the net de\ufb01ned bene\ufb01t
asset or liability due to changes in actuarial
measurement assumptions) are recognised in
other comprehensive income in full in the
period in which they arise, and not subject to
recycling to the income statement.
The difference between scheme assets and
scheme liabilities, the net de\ufb01ned bene\ufb01t
asset or liability, is recognised on the balance
sheet if the criteria of the asset ceiling test
are met. This requires the net de\ufb01ned bene\ufb01t
surplus to be limited to the present value of
any economic bene\ufb01ts available to us in the
form of refunds from the plan or reduced
contributions to it.
We will recognise a liability where a minimum
funding requirement exists for any of our
de\ufb01ned bene\ufb01t pension schemes. This re\ufb02ects
agreed minimum funding and the availability
of a net surplus as described above.
We recognise a net de\ufb01ned bene\ufb01t asset
when the net de\ufb01ned bene\ufb01t surplus can
generate a bene\ufb01t in the form of a refund or
reduction in future contributions to the plan.
The net bene\ufb01t pension asset is recognised at
the present value of the bene\ufb01ts that will be
available to us excluding interest and the
effect of the asset ceiling (if any), excluding
interest. Changes in the present value of the
net bene\ufb01t pension asset are recognised
immediately in other comprehensive income.
In instances where Trustees have the ability
to declare augmented bene\ufb01ts to
participants, we do not recognise a de\ufb01ned
bene\ufb01t pension asset and record the surplus
immediately in other comprehensive income.3 Operating expenses
Operating expenses are expenses NatWest Group incurs in the running of its business such as all staff costs (for example salaries, bonus awards, pension costs and social security costs),
premises and equipment costs that arise from the occupation of premises and the use of equipment, depreciation and amortisation and other administrative expenses.
For accounting policy information refer to Accounting policies 3.3, 3.4 and 3.5.
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Salaries
2,456
2,477
2,483
Bonus awards
(1)
479
411
353
Temporary and contract costs
162
162
199
Social security costs
418
371
352
Pension costs
338
311
313
- defined benefit schemes (Note 5)
93
86
122
- defined contribution schemes
245
225
191
Other
321
329
201
Staff costs
4,174
4,061
3,901
Premises and equipment
1,291
1,211
1,153
Bank levy
123
142
109
Depreciation and amortisation
(2)
1,154
1,058
934
Other administrative expenses
(3)
1,520
1,677
1,899
Administrative expenses
4,088
4,088
4,095
\u00a0
8,262
8,149
7,996
\n
(1)
Includes current year charge for amounts deferred from prior years. Refer to reconciliation of bonus awards to income statement
charge on page 309.
(2)
Includes depreciation of right of use assets of \u00a392 million (2024 - \u00a3103 million; 2023 - \u00a3104 million).
(3)
Includes litigation and conduct costs, net of amounts recovered. Refer to Note 20 for further details.
The average number of persons employed during the year, excluding temporary staff and
rounded to the nearest hundred, was 59,300 (2024 \u2013 60,700; 2023 \u2013 61,500). The average
number of temporary employees during the year, rounded to the nearest hundred, was 1,300
(2024 \u2013 1,400; 2023 \u2013 2,100).
The number of persons employed at 31 December 2025, excluding temporary staff and
rounded to the nearest hundred, by reportable segment, was as follows:
Continuing operations
2025
2024
2023
Retail Banking
12,200
13,000
14,300
Private Banking & Wealth Management
2,100
2,200
2,400
Commercial & Institutional
12,300
12,700
12,400
Central items & other
32,400
31,800
32,500
Total
59,000
59,700
61,600
UK
39,000
40,100
41,500
India
18,800
17,600
16,900
Poland
(1)
100
800
1,500
USA
300
300
300
Republic of Ireland
-
100
400
Rest of the World
800
800
1,000
Total
59,000
59,700
61,600
\n
(1)
Re\ufb02ecting closure of operations in Poland.
Share-based payments
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Award plan
Eligible employees
Nature of award
Vesting conditions (1)
Settlement
Sharesave
UK, Channel Islands, Gibraltar, Isle
Option to buy shares under
Continuing employment or leavers in certain circumstances
2026 to 2030
\u00a0
of Man, Poland and India.
employee savings plan
\u00a0 \u00a0
Deferred performance
All
Awards of ordinary shares
Continuing employment or leavers in certain circumstances
2026 to 2031
awards
\u00a0
and conditional shares
\u00a0 \u00a0
Long-term incentives
(2)
Senior employees
Awards of ordinary shares
Continuing employment or leavers in certain circumstances and/or
2026 to 2032
\u00a0 \u00a0
and conditional shares
satisfaction of the pre-vesting assessment and underpins
\u00a0
Sharing in Success
(
3)
All
Awards of ordinary shares
Future continuing employment and achievement of pre-de\ufb01ned
2026
\u00a0 \u00a0
and conditional shares
measures.
\u00a0
\n
(1)
All awards are subject to the discretion of Remuneration Committee.
(2)
Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment.
Existing Long-term incentives vest over 3 to 7 years.
(3)
In 2025 12.5 million shares at total value of \u00a360.5 million were granted and vested under Sharing in Success.
Sharesave
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Average
Shares
Average
Shares
Average
Shares
\u00a0
exercise
under
exercise
under
exercise
under
\u00a0
price
option
price
option
price
option
\u00a0
\u00a3
(million)
\u00a3
(million)
\u00a3
(million)
At 1 January
1.93
101
1.59
114
1.63
99
Granted
4.67
18
2.94
24
1.42
43
Exercised
1.82
(20)
1.52
(32)
1.44
(23)
Cancelled
1.99
(3)
1.60
(5)
1.72
(5)
At 31 December
2.45
96
1.93
101
1.59
114
\n
The fair value of Sharesave options granted in 2025 was determined using a pricing model that
included: expected volatility of share price determined at the grant date based on historical share
price volatility over a period of up to \ufb01ve years; expected option lives that equal the vesting
period; estimated dividend yield on equity shares; and risk-free interest rates determined from
UK gilts with terms matching the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the
average market price over the \ufb01ve trading days (three trading days for Sharesave) preceding
grant date. When estimating the fair value of the award, the number of shares granted and the
prevailing market price as de\ufb01ned on page 155 are used.
The fair value of the award is
recognised as services are provided by employees over the vesting period.
Options are exercisable within six months of vesting; 5.1 million options were exercisable at 31
December 2025 (2024 \u2013 8.9 million; 2023 \u2013 19.0 million). The weighted average share price at
the date of exercise of options was \u00a36.39 (2024 - \u00a34.03; 2023 - \u00a32.20). At 31 December 2025,
exercise prices ranged from \u00a31.42 to \u00a34.67 (2024 - \u00a31.42 to \u00a32.94; 2023 - \u00a31.12 to \u00a31.89) and
the remaining average contractual life was 2.11 years (2024 \u2013 2.35 years; 2023 \u2013 2.25 years).
The fair value of options granted in 2025 was \u00a329.8 million (2024 - \u00a328.3 million; 2023 - \u00a327.3
million).
Deferred performance awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
66
30
76
35
93
46
Granted
60
14
50
23
52
20
Forfeited
(4)
(1)
(3)
(1)
(2)
(1)
Vested
(52)
(18)
(57)
(27)
(67)
(30)
At 31 December
70
25
66
30
76
35
\n
The awards granted in 2025 vest in equal tranches on the anniversary of the award,
predominantly over three years.
Long-term incentives
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
40
19
49
23
49
23
Granted
18
4
9
5
11
5
Vested/exercised
(13)
(5)
(11)
(5)
(10)
(4)
Lapsed
(4)
(1)
(7)
(4)
(1)
(1)
At 31 December
41
17
40
19
49
23
\n
The market value of awards vested/exercised in 2025 was \u00a334.4 million (2024 - \u00a319.3 million;
2023 - \u00a39.5 million).
Bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Change
\u00a0
\u00a3m
\u00a3m
%
Deferred cash awards
(1)
438
387
13%
Deferred share awards
58
61
(5%)
Total bonus awards
(2)
496
448
11%
Bonus awards as a % of operating profit before tax and bonus awards
6%
7%
\u00a0
Proportion of bonus awards that are deferred
\u00a0 \u00a0 \u00a0
- deferred cash awards
88%
86%
\u00a0
- deferred share awards
12%
14%
\u00a0
\n
Reconciliation of bonus awards to income statement charge
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Bonus awarded
496
448
356
Less: deferral of charge for amounts awarded for current year
(155)
(144)
(114)
Income statement charge for amounts awarded in current year
341
304
242
Add: current year charge for amounts deferred from prior years
144
109
115
Less: forfeiture of amounts deferred from prior years
(6)
(2)
(4)
Income statement charge for amounts deferred from prior years
138
107
111
Income statement charge for bonus awards
(2)
479
411
353
\n
Year in which income statement charge is expected to be taken for deferred bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Actual
Expected
\u00a0
2023
2024
2025
2026
2027 and beyond
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bonus awards deferred from 2023 and earlier
115
109
22
7
3
Bonus awards deferred from 2024
-
-
122
10
7
Less: forfeiture of amounts deferred from prior years
(4)
(2)
(6)
-
-
Bonus awards deferred for 2025
-
-
-
137
18
\u00a0
111
107
138
154
28
\n
(1)
Includes March cash awards which are limited to \u00a32,000 for all employees and
are paid in the March following the balance sheet date.
(2)
Excludes other performance-related compensation.", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00233": { "value": "3.3. Staff costs
Employee costs, such as salaries, paid
absences, and other bene\ufb01ts are recognised
over the period in which the employees
provide the related services to us.
Employees may receive variable
compensation in cash, in deferred cash or
debt instruments of NatWest Group or in
ordinary shares of NatWest Group plc subject
to deferral, clawback and forfeiture criteria.
We operate a number of share-based
compensation schemes under which we
grant awards of NatWest Group plc shares
and share options to our employees. Such
awards are subject to vesting conditions.
Variable compensation that is settled in cash
or debt instruments is charged to the income
statement on a straight-line basis over the
period during which services are provided,
taking account of forfeiture and clawback
criteria. The value of employee services
received in exchange for NatWest Group plc
shares and share options is recognised as an
expense over the vesting period, subject to
deferral, clawback, cancellation and forfeiture
criteria with a corresponding increase in
equity. The fair value of shares granted is the
market price adjusted for the expected effect
of dividends as employees are not entitled to
dividends until shares are vested.
The fair value of options granted is
determined using option pricing models to
estimate the numbers of shares likely to vest.
These consider the exercise price of the
option, the current share price, the risk-free
interest rate, the expected volatility of the
share price over the life of the option and
other relevant factors such as the dividend
yield.
De\ufb01ned contribution pension scheme
A scheme where we pay \ufb01xed contributions
and there is no legal or constructive
obligation to pay further contributions or
bene\ufb01ts. Contributions are recognised in the
income statement as employee service costs
accrue.
De\ufb01ned bene\ufb01t pension scheme
A scheme that de\ufb01nes the bene\ufb01t an
employee will receive on retirement and is
dependent on one or more factors such as
age, salary, and years of service. The net of
the recognisable scheme assets and
obligations is reported on the balance sheet
in other assets or other liabilities. The de\ufb01ned
bene\ufb01t obligation is measured on an actuarial
basis.
The charge to the income statement for
pension costs (mainly the service cost and
the net interest on the net de\ufb01ned bene\ufb01t
asset or liability) is recognised in operating
expenses.
Actuarial gains and losses (i.e. gains and/or
losses on remeasuring the net de\ufb01ned bene\ufb01t
asset or liability due to changes in actuarial
measurement assumptions) are recognised in
other comprehensive income in full in the
period in which they arise, and not subject to
recycling to the income statement.
The difference between scheme assets and
scheme liabilities, the net de\ufb01ned bene\ufb01t
asset or liability, is recognised on the balance
sheet if the criteria of the asset ceiling test
are met. This requires the net de\ufb01ned bene\ufb01t
surplus to be limited to the present value of
any economic bene\ufb01ts available to us in the
form of refunds from the plan or reduced
contributions to it.
We will recognise a liability where a minimum
funding requirement exists for any of our
de\ufb01ned bene\ufb01t pension schemes. This re\ufb02ects
agreed minimum funding and the availability
of a net surplus as described above.
We recognise a net de\ufb01ned bene\ufb01t asset
when the net de\ufb01ned bene\ufb01t surplus can
generate a bene\ufb01t in the form of a refund or
reduction in future contributions to the plan.
The net bene\ufb01t pension asset is recognised at
the present value of the bene\ufb01ts that will be
available to us excluding interest and the
effect of the asset ceiling (if any), excluding
interest. Changes in the present value of the
net bene\ufb01t pension asset are recognised
immediately in other comprehensive income.
In instances where Trustees have the ability
to declare augmented bene\ufb01ts to
participants, we do not recognise a de\ufb01ned
bene\ufb01t pension asset and record the surplus
immediately in other comprehensive income.3 Operating expenses
Operating expenses are expenses NatWest Group incurs in the running of its business such as all staff costs (for example salaries, bonus awards, pension costs and social security costs),
premises and equipment costs that arise from the occupation of premises and the use of equipment, depreciation and amortisation and other administrative expenses.
For accounting policy information refer to Accounting policies 3.3, 3.4 and 3.5.
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Salaries
2,456
2,477
2,483
Bonus awards
(1)
479
411
353
Temporary and contract costs
162
162
199
Social security costs
418
371
352
Pension costs
338
311
313
- defined benefit schemes (Note 5)
93
86
122
- defined contribution schemes
245
225
191
Other
321
329
201
Staff costs
4,174
4,061
3,901
Premises and equipment
1,291
1,211
1,153
Bank levy
123
142
109
Depreciation and amortisation
(2)
1,154
1,058
934
Other administrative expenses
(3)
1,520
1,677
1,899
Administrative expenses
4,088
4,088
4,095
\u00a0
8,262
8,149
7,996
\n
(1)
Includes current year charge for amounts deferred from prior years. Refer to reconciliation of bonus awards to income statement
charge on page 309.
(2)
Includes depreciation of right of use assets of \u00a392 million (2024 - \u00a3103 million; 2023 - \u00a3104 million).
(3)
Includes litigation and conduct costs, net of amounts recovered. Refer to Note 20 for further details.
The average number of persons employed during the year, excluding temporary staff and
rounded to the nearest hundred, was 59,300 (2024 \u2013 60,700; 2023 \u2013 61,500). The average
number of temporary employees during the year, rounded to the nearest hundred, was 1,300
(2024 \u2013 1,400; 2023 \u2013 2,100).
The number of persons employed at 31 December 2025, excluding temporary staff and
rounded to the nearest hundred, by reportable segment, was as follows:
Continuing operations
2025
2024
2023
Retail Banking
12,200
13,000
14,300
Private Banking & Wealth Management
2,100
2,200
2,400
Commercial & Institutional
12,300
12,700
12,400
Central items & other
32,400
31,800
32,500
Total
59,000
59,700
61,600
UK
39,000
40,100
41,500
India
18,800
17,600
16,900
Poland
(1)
100
800
1,500
USA
300
300
300
Republic of Ireland
-
100
400
Rest of the World
800
800
1,000
Total
59,000
59,700
61,600
\n
(1)
Re\ufb02ecting closure of operations in Poland.
Share-based payments
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Award plan
Eligible employees
Nature of award
Vesting conditions (1)
Settlement
Sharesave
UK, Channel Islands, Gibraltar, Isle
Option to buy shares under
Continuing employment or leavers in certain circumstances
2026 to 2030
\u00a0
of Man, Poland and India.
employee savings plan
\u00a0 \u00a0
Deferred performance
All
Awards of ordinary shares
Continuing employment or leavers in certain circumstances
2026 to 2031
awards
\u00a0
and conditional shares
\u00a0 \u00a0
Long-term incentives
(2)
Senior employees
Awards of ordinary shares
Continuing employment or leavers in certain circumstances and/or
2026 to 2032
\u00a0 \u00a0
and conditional shares
satisfaction of the pre-vesting assessment and underpins
\u00a0
Sharing in Success
(
3)
All
Awards of ordinary shares
Future continuing employment and achievement of pre-de\ufb01ned
2026
\u00a0 \u00a0
and conditional shares
measures.
\u00a0
\n
(1)
All awards are subject to the discretion of Remuneration Committee.
(2)
Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment.
Existing Long-term incentives vest over 3 to 7 years.
(3)
In 2025 12.5 million shares at total value of \u00a360.5 million were granted and vested under Sharing in Success.
Sharesave
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Average
Shares
Average
Shares
Average
Shares
\u00a0
exercise
under
exercise
under
exercise
under
\u00a0
price
option
price
option
price
option
\u00a0
\u00a3
(million)
\u00a3
(million)
\u00a3
(million)
At 1 January
1.93
101
1.59
114
1.63
99
Granted
4.67
18
2.94
24
1.42
43
Exercised
1.82
(20)
1.52
(32)
1.44
(23)
Cancelled
1.99
(3)
1.60
(5)
1.72
(5)
At 31 December
2.45
96
1.93
101
1.59
114
\n
The fair value of Sharesave options granted in 2025 was determined using a pricing model that
included: expected volatility of share price determined at the grant date based on historical share
price volatility over a period of up to \ufb01ve years; expected option lives that equal the vesting
period; estimated dividend yield on equity shares; and risk-free interest rates determined from
UK gilts with terms matching the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the
average market price over the \ufb01ve trading days (three trading days for Sharesave) preceding
grant date. When estimating the fair value of the award, the number of shares granted and the
prevailing market price as de\ufb01ned on page 155 are used.
The fair value of the award is
recognised as services are provided by employees over the vesting period.
Options are exercisable within six months of vesting; 5.1 million options were exercisable at 31
December 2025 (2024 \u2013 8.9 million; 2023 \u2013 19.0 million). The weighted average share price at
the date of exercise of options was \u00a36.39 (2024 - \u00a34.03; 2023 - \u00a32.20). At 31 December 2025,
exercise prices ranged from \u00a31.42 to \u00a34.67 (2024 - \u00a31.42 to \u00a32.94; 2023 - \u00a31.12 to \u00a31.89) and
the remaining average contractual life was 2.11 years (2024 \u2013 2.35 years; 2023 \u2013 2.25 years).
The fair value of options granted in 2025 was \u00a329.8 million (2024 - \u00a328.3 million; 2023 - \u00a327.3
million).
Deferred performance awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
66
30
76
35
93
46
Granted
60
14
50
23
52
20
Forfeited
(4)
(1)
(3)
(1)
(2)
(1)
Vested
(52)
(18)
(57)
(27)
(67)
(30)
At 31 December
70
25
66
30
76
35
\n
The awards granted in 2025 vest in equal tranches on the anniversary of the award,
predominantly over three years.
Long-term incentives
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
40
19
49
23
49
23
Granted
18
4
9
5
11
5
Vested/exercised
(13)
(5)
(11)
(5)
(10)
(4)
Lapsed
(4)
(1)
(7)
(4)
(1)
(1)
At 31 December
41
17
40
19
49
23
\n
The market value of awards vested/exercised in 2025 was \u00a334.4 million (2024 - \u00a319.3 million;
2023 - \u00a39.5 million).
Bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Change
\u00a0
\u00a3m
\u00a3m
%
Deferred cash awards
(1)
438
387
13%
Deferred share awards
58
61
(5%)
Total bonus awards
(2)
496
448
11%
Bonus awards as a % of operating profit before tax and bonus awards
6%
7%
\u00a0
Proportion of bonus awards that are deferred
\u00a0 \u00a0 \u00a0
- deferred cash awards
88%
86%
\u00a0
- deferred share awards
12%
14%
\u00a0
\n
Reconciliation of bonus awards to income statement charge
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Bonus awarded
496
448
356
Less: deferral of charge for amounts awarded for current year
(155)
(144)
(114)
Income statement charge for amounts awarded in current year
341
304
242
Add: current year charge for amounts deferred from prior years
144
109
115
Less: forfeiture of amounts deferred from prior years
(6)
(2)
(4)
Income statement charge for amounts deferred from prior years
138
107
111
Income statement charge for bonus awards
(2)
479
411
353
\n
Year in which income statement charge is expected to be taken for deferred bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Actual
Expected
\u00a0
2023
2024
2025
2026
2027 and beyond
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bonus awards deferred from 2023 and earlier
115
109
22
7
3
Bonus awards deferred from 2024
-
-
122
10
7
Less: forfeiture of amounts deferred from prior years
(4)
(2)
(6)
-
-
Bonus awards deferred for 2025
-
-
-
137
18
\u00a0
111
107
138
154
28
\n
(1)
Includes March cash awards which are limited to \u00a32,000 for all employees and
are paid in the March following the balance sheet date.
(2)
Excludes other performance-related compensation.", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00625": { "value": "3.3. Staff costs
Employee costs, such as salaries, paid
absences, and other bene\ufb01ts are recognised
over the period in which the employees
provide the related services to us.
Employees may receive variable
compensation in cash, in deferred cash or
debt instruments of NatWest Group or in
ordinary shares of NatWest Group plc subject
to deferral, clawback and forfeiture criteria.
We operate a number of share-based
compensation schemes under which we
grant awards of NatWest Group plc shares
and share options to our employees. Such
awards are subject to vesting conditions.
Variable compensation that is settled in cash
or debt instruments is charged to the income
statement on a straight-line basis over the
period during which services are provided,
taking account of forfeiture and clawback
criteria. The value of employee services
received in exchange for NatWest Group plc
shares and share options is recognised as an
expense over the vesting period, subject to
deferral, clawback, cancellation and forfeiture
criteria with a corresponding increase in
equity. The fair value of shares granted is the
market price adjusted for the expected effect
of dividends as employees are not entitled to
dividends until shares are vested.
The fair value of options granted is
determined using option pricing models to
estimate the numbers of shares likely to vest.
These consider the exercise price of the
option, the current share price, the risk-free
interest rate, the expected volatility of the
share price over the life of the option and
other relevant factors such as the dividend
yield.
De\ufb01ned contribution pension scheme
A scheme where we pay \ufb01xed contributions
and there is no legal or constructive
obligation to pay further contributions or
bene\ufb01ts. Contributions are recognised in the
income statement as employee service costs
accrue.
De\ufb01ned bene\ufb01t pension scheme
A scheme that de\ufb01nes the bene\ufb01t an
employee will receive on retirement and is
dependent on one or more factors such as
age, salary, and years of service. The net of
the recognisable scheme assets and
obligations is reported on the balance sheet
in other assets or other liabilities. The de\ufb01ned
bene\ufb01t obligation is measured on an actuarial
basis.
The charge to the income statement for
pension costs (mainly the service cost and
the net interest on the net de\ufb01ned bene\ufb01t
asset or liability) is recognised in operating
expenses.
Actuarial gains and losses (i.e. gains and/or
losses on remeasuring the net de\ufb01ned bene\ufb01t
asset or liability due to changes in actuarial
measurement assumptions) are recognised in
other comprehensive income in full in the
period in which they arise, and not subject to
recycling to the income statement.
The difference between scheme assets and
scheme liabilities, the net de\ufb01ned bene\ufb01t
asset or liability, is recognised on the balance
sheet if the criteria of the asset ceiling test
are met. This requires the net de\ufb01ned bene\ufb01t
surplus to be limited to the present value of
any economic bene\ufb01ts available to us in the
form of refunds from the plan or reduced
contributions to it.
We will recognise a liability where a minimum
funding requirement exists for any of our
de\ufb01ned bene\ufb01t pension schemes. This re\ufb02ects
agreed minimum funding and the availability
of a net surplus as described above.
We recognise a net de\ufb01ned bene\ufb01t asset
when the net de\ufb01ned bene\ufb01t surplus can
generate a bene\ufb01t in the form of a refund or
reduction in future contributions to the plan.
The net bene\ufb01t pension asset is recognised at
the present value of the bene\ufb01ts that will be
available to us excluding interest and the
effect of the asset ceiling (if any), excluding
interest. Changes in the present value of the
net bene\ufb01t pension asset are recognised
immediately in other comprehensive income.
In instances where Trustees have the ability
to declare augmented bene\ufb01ts to
participants, we do not recognise a de\ufb01ned
bene\ufb01t pension asset and record the surplus
immediately in other comprehensive income.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00650": { "value": "3.4. Intangible assets
Intangible assets are identi\ufb01able non-
monetary assets without physical substance
acquired or developed by us, and are stated
at cost less accumulated amortisation and
impairment losses. Amortisation is a method
to spread the cost of such assets over time in
the income statement.
This is charged to the income statement over
the assets' estimated useful economic lives
using methods that best re\ufb02ect the pattern of
economic bene\ufb01ts.
The estimated useful economic lives are:
Computer software 3 to 10 years
Other acquired intangibles 3 to 5 years
Direct costs relating to the development of
internal-use computer software are reported
on the balance sheet after technical feasibility
and economic viability have been established.
These direct costs include payroll, the costs of
materials and services, and directly
attributable overheads. Capitalisation of costs
ceases when the software can operate as
intended.
During and after development, accumulated
costs are reviewed for impairment against the
bene\ufb01ts that the software is expected to
generate. Costs incurred prior to the
establishment of technical feasibility and
economic viability are expensed to the
income statement as incurred, as are all
training costs and general overheads. The
costs of licences to use computer software
that are expected to generate economic
bene\ufb01ts beyond three years are also reported
on the balance sheet. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00649": { "value": "3.4. Intangible assets
Intangible assets are identi\ufb01able non-
monetary assets without physical substance
acquired or developed by us, and are stated
at cost less accumulated amortisation and
impairment losses. Amortisation is a method
to spread the cost of such assets over time in
the income statement.
This is charged to the income statement over
the assets' estimated useful economic lives
using methods that best re\ufb02ect the pattern of
economic bene\ufb01ts.
The estimated useful economic lives are:
Computer software 3 to 10 years
Other acquired intangibles 3 to 5 years
Direct costs relating to the development of
internal-use computer software are reported
on the balance sheet after technical feasibility
and economic viability have been established.
These direct costs include payroll, the costs of
materials and services, and directly
attributable overheads. Capitalisation of costs
ceases when the software can operate as
intended.
During and after development, accumulated
costs are reviewed for impairment against the
bene\ufb01ts that the software is expected to
generate. Costs incurred prior to the
establishment of technical feasibility and
economic viability are expensed to the
income statement as incurred, as are all
training costs and general overheads. The
costs of licences to use computer software
that are expected to generate economic
bene\ufb01ts beyond three years are also reported
on the balance sheet.
Goodwill on the acquisition of a subsidiary is
the excess of the fair value of the
consideration paid, the fair value of any
existing interest in the subsidiary and the
amount of any non-controlling interest
measured either at fair value or at its share
of the subsidiary\u2019s net assets over the net fair
value of the subsidiary\u2019s identi\ufb01able assets,
liabilities, and contingent liabilities.
Goodwill is measured at initial cost less any
subsequent impairment losses. The gain or
loss on the disposal of a subsidiary includes
the carrying value of any related goodwill.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00652": { "value": "Goodwill on the acquisition of a subsidiary is
the excess of the fair value of the
consideration paid, the fair value of any
existing interest in the subsidiary and the
amount of any non-controlling interest
measured either at fair value or at its share
of the subsidiary\u2019s net assets over the net fair
value of the subsidiary\u2019s identi\ufb01able assets,
liabilities, and contingent liabilities.
Goodwill is measured at initial cost less any
subsequent impairment losses. The gain or
loss on the disposal of a subsidiary includes
the carrying value of any related goodwill.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00651": { "value": "Goodwill on the acquisition of a subsidiary is
the excess of the fair value of the
consideration paid, the fair value of any
existing interest in the subsidiary and the
amount of any non-controlling interest
measured either at fair value or at its share
of the subsidiary\u2019s net assets over the net fair
value of the subsidiary\u2019s identi\ufb01able assets,
liabilities, and contingent liabilities.
Goodwill is measured at initial cost less any
subsequent impairment losses. The gain or
loss on the disposal of a subsidiary includes
the carrying value of any related goodwill.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00653": { "value": "3.5. Impairment of non-\ufb01nancial assets
Goodwill is tested for impairment annually or
more frequently if events or changes in
circumstances indicate that it might be
impaired.
At each balance sheet date, we assess
whether there is any indication that other
intangible assets or property, plant and
equipment are impaired. If any such
indication exists, we estimate the recoverable
amount of the asset and compare it to its
balance sheet value to calculate if an
impairment loss should be recognised in the
income statement. A reversal of an
impairment loss on other intangible assets or
property, plant and equipment is recognised
in the income statement provided the
increased carrying value is not greater than it
would have been had no impairment loss
been recognised.
The recoverable amount of an asset that
does not generate cash \ufb02ows that are
independent from those of other assets or
groups of assets, is determined as part of the
cash-generating unit to which the asset
belongs.
A cash-generating unit is the smallest
identi\ufb01able group of assets that generates
cash in\ufb02ows that are largely independent of
the cash in\ufb02ows from other assets or groups
of assets. For the purposes of impairment
testing, goodwill acquired in a business
combination is allocated to cash-generating
units or groups of cash-generating units
expected to bene\ufb01t from the combination.
The recoverable amount of an asset or cash-
generating unit is the higher of its fair value
less cost to sell or its value in use. Value in
use is the present value of future cash \ufb02ows
from the asset or cash-generating unit
discounted at a rate that re\ufb02ects market
interest rates adjusted for risks speci\ufb01c to the
asset or cash-generating unit that have not
been considered in estimating future cash
\ufb02ows.
The assessment of asset impairment is based
upon value in use. This represents the value
of future cash\ufb02ows and uses our \ufb01ve-year
revenue and cost forecasts and the
expectation of long term economic growth
beyond this period. The \ufb01ve-year forecast
takes account of management\u2019s current
expectations of competitiveness and
pro\ufb01tability, including near-term effects of
climate transition risk. The long-term growth
rate re\ufb02ects external indicators which will
include market expectations on climate risk.
We do not consider any additional
adjustments to this indicator.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00626": { "value": "3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.
Income and expenses of foreign subsidiaries
and branches are translated into sterling at
average exchange rates unless these do not
approximate the foreign exchange rates
ruling at the dates of the transactions.
Foreign exchange differences arising on the
translation of a foreign operation are
recognised in other comprehensive income.
The amount accumulated in equity is
reclassi\ufb01ed from equity to the income
statement on disposal of a foreign operation.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00654": { "value": "3.6. Foreign currencies
Foreign exchange differences arising on the
settlement of foreign currency transactions
and from the translation of monetary assets
and liabilities are reported in income from
trading activities except for differences arising
on cash \ufb02ow hedges and hedges of net
investments in foreign operations.
Non-monetary items denominated in foreign
currencies that are stated at fair value are
translated into the functional currency at the
foreign exchange rates ruling at the dates the
values are determined. Translation differences
are recognised in the income statement
except for differences arising on non-
monetary \ufb01nancial assets classi\ufb01ed as fair
value through other comprehensive income.
Income and expenses of foreign subsidiaries
and branches are translated into sterling at
average exchange rates unless these do not
approximate the foreign exchange rates
ruling at the dates of the transactions.
Foreign exchange differences arising on the
translation of a foreign operation are
recognised in other comprehensive income.
The amount accumulated in equity is
reclassi\ufb01ed from equity to the income
statement on disposal of a foreign operation.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00659": { "value": "3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. Critical accounting policy: Fair value \u2013 \ufb01nancial
instruments
Financial instruments classi\ufb01ed as mandatory fair value through
pro\ufb01t or loss; held-for-trading; designated fair value through
pro\ufb01t or loss; and fair value through other comprehensive
income are recognised in the \ufb01nancial statements at fair value.
All derivatives are measured at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value
measurement considers the characteristics of the asset or
liability and the assumptions that a market participant would
consider when pricing the asset or liability.
NatWest Group manages some portfolios of \ufb01nancial assets and
\ufb01nancial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net
risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit
risk, and funding costs (refer to \u2018Valuation Adjustments\u2019).
Where the market for a \ufb01nancial instrument is not active, fair
value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which
depends on the instrument\u2019s complexity and the availability of
market-based data. The complexity and uncertainty in the
\ufb01nancial instrument\u2019s fair value is categorised using the fair
value hierarchy.
For accounting policy information refer to Accounting policies
2.2, 3.8 and 3.11.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00242": { "value": "3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. 9 Financial instruments - classi\ufb01cation
Financial instruments are contracts that give rise to a \ufb01nancial asset of one entity and a corresponding \ufb01nancial liability or equity instrument of a counterparty entity, such as cash,
derivatives, loans, deposits and settlement balances. This note presents \ufb01nancial instruments classi\ufb01ed in accordance with IFRS 9 \u2013 Financial Instruments.
Judgement: classi\ufb01cation of \ufb01nancial assets
Classi\ufb01cation of \ufb01nancial assets between amortised cost and fair
value through other comprehensive income requires a degree of
judgement in respect of business models and contractual
cash\ufb02ows.
\u2022
The business model criteria are assessed at a portfolio level
to determine whether assets are classi\ufb01ed as held to collect
or held to collect and sell. Information that is considered in
determining the applicable business model includes: the
portfolio\u2019s policies and objectives; how the performance and
risks of the portfolio are managed, evaluated and reported
to management; and the frequency, volume and timing of
sales in prior periods, sales expectation for future periods,
and the reasons for sales.
\u2022
The contractual cash \ufb02ow characteristics of \ufb01nancial assets
are assessed with reference to whether the cash \ufb02ows
represent solely payments of principal and interest (SPPI). A
level of judgement is made in assessing terms that could
change the contractual cash \ufb02ows so that it would not meet
the condition for SPPI, including contingent and leverage
features, non-recourse arrangements and features that
could modify the time value of money.
For accounting policy information refer to Accounting policies
3.8, 3.9 and 3.11.
The following tables analyse \ufb01nancial assets and liabilities in accordance with the categories of \ufb01nancial
instruments in IFRS 9.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0
Amortised
Other
\u00a0
\u00a0
MFVTPL
DFV
FVOCI
cost
assets
Total
Assets
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
\u00a0\u00a0\u00a0
85,182
\u00a0
85,182
Trading assets
46,537
\u00a0\u00a0\u00a0\u00a0
46,537
Derivatives
(1)
60,789
\u00a0\u00a0\u00a0\u00a0
60,789
Settlement balances
\u00a0\u00a0\u00a0
645
\u00a0
645
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,958
\u00a0
6,958
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
418,881
\u00a0
418,881
Other financial assets
1,041
3
42,168
36,558
\u00a0
79,770
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,292
7,292
Other assets
\u00a0\u00a0\u00a0\u00a0
8,499
8,499
31 December 2025
108,367
3
42,168
548,224
15,791
714,553
Cash and balances at central banks
\u00a0\u00a0\u00a0
92,994
\u00a0
92,994
Trading assets
48,917
\u00a0\u00a0\u00a0\u00a0
48,917
Derivatives
(1)
78,406
\u00a0\u00a0\u00a0\u00a0
78,406
Settlement balances
\u00a0\u00a0\u00a0
2,085
\u00a0
2,085
Loans to bank - amortised cost
(2)
\u00a0\u00a0\u00a0
6,030
\u00a0
6,030
Loans to customers - amortised cost
(3)
\u00a0\u00a0\u00a0
400,326
\u00a0
400,326
Other financial assets
798
5
37,843
24,597
\u00a0
63,243
Intangible assets
\u00a0\u00a0\u00a0\u00a0
7,588
7,588
Other assets
\u00a0\u00a0\u00a0\u00a0
8,396
8,396
31 December 2024
128,121
5
37,843
526,032
15,984
707,985
\n
For the notes to this table refer to the following page.
Amortised
Other
Held-for-trading
DFV
cost
liabilities
Total
Liabilities
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bank deposits
(4)
44,092
44,092
Customer deposits
442,998
442,998
Settlement balances
942
942
Trading liabilities
49,022
49,022
Derivatives
(1)
53,974
53,974
Other financial liabilities
(5)
4,617
62,982
67,599
Subordinated liabilities
237
5,886
6,123
Notes in circulation
3,164
3,164
Other liabilities
(6)
594
3,432
4,026
31 December 2025
102,996
4,854
560,658
3,432
671,940
Bank deposits
(4)
31,452
31,452
Customer deposits
433,490
433,490
Settlement balances
1,729
1,729
Trading liabilities
54,714
54,714
Derivatives
(1)
72,082
72,082
Other financial liabilities
(5)
3,548
57,539
61,087
Subordinated liabilities
234
5,902
6,136
Notes in circulation
3,316
3,316
Other liabilities
(6)
684
3,917
4,601
31 December 2024
126,796
3,782
534,112
3,917
668,607
\n
(1)
Includes net hedging derivatives assets of \u00a3535 million (2024 - \u00a3118 million)
\n
and net hedging derivatives liabilities of \u00a3356 million (2024 - \u00a3464 million).
\n
(2)
Includes items in the course of collection from other banks of \u00a3166 million
\n
(2024 - \u00a359 million).
\n
(3)
Includes finance lease receivables of \u00a38,971 million (2024 - \u00a38,998 million).
\n
(4)
Includes items in the course of transmission to other banks of \u00a3192 million
\n
(2024 - \u00a3136 million).
\n
(5)
The carrying amount of customer deposits designated at fair value through
\n
profit or loss is materially the same as the principal amount for both periods.
\n
No amounts have been recognised in the profit or loss for changes in credit
\n
risk associated with these liabilities as the changes are immaterial both during
\n
the period and cumulatively.
\n
(6)
Includes lease liabilities of \u00a3535 million (2024 - \u00a3630 million), held at amortised
\ncost. Financial instruments \u2013 \ufb01nancial assets and liabilities that can be offset
The tables below present information on \ufb01nancial assets and \ufb01nancial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with
\ufb01nancial collateral received or given.
\u00a0
Instruments which can be offset
Potential for offset not recognised by IFRS
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Effect of master
\u00a0\u00a0
Net amount after
Instruments
\u00a0
\u00a0\u00a0\u00a0\u00a0
netting and similar
Cash
\u00a0
netting agreements and
outside netting
Balance sheet
\u00a0
Gross
IFRS offset
Balance sheet
agreements
collateral
Securities collateral
effect of related collateral
agreements
total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Derivative assets
77,408
(17,007)
60,401
(45,928)
(9,275)
(3,283)
1,915
388
60,789
Derivative liabilities
71,589
(17,951)
53,638
(45,928)
(4,281)
(1,256)
2,173
336
53,974
Net position
(1)
5,819
944
6,763
-
(4,994)
(2,027)
(258)
52
6,815
Trading reverse repos
44,729
(17,129)
27,600
(465)
-
(26,882)
253
56
27,656
Trading repos
43,648
(17,129)
26,519
(465)
-
(26,054)
-
2,059
28,578
Net position
1,081
-
1,081
-
-
(828)
253
(2,003)
(922)
Non trading reverse repos
50,889
(14,470)
36,419
(9)
-
(36,410)
-
-
36,419
Non trading repos
44,082
(14,470)
29,612
(9)
-
(29,603)
-
-
29,612
Net position
6,807
-
6,807
-
-
(6,807)
-
-
6,807
2024
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Derivative assets
96,624
(18,746)
77,878
(61,883)
(10,005)
(4,072)
1,918
528
78,406
Derivative liabilities
92,620
(21,027)
71,593
(61,883)
(5,801)
(896)
3,013
489
72,082
Net position
(1)
4,004
2,281
6,285
-
(4,204)
(3,176)
(1,095)
39
6,324
Trading reverse repos
42,261
(15,174)
27,087
(1,469)
-
(25,406)
212
40
27,127
Trading repos
45,033
(15,174)
29,859
(1,469)
-
(28,390)
-
703
30,562
Net position
(2,772)
-
(2,772)
\u00a0
-
2,984
212
(663)
(3,435)
Non trading reverse repos
45,600
(8,709)
36,891
(80)
-
(36,811)
-
-
36,891
Non trading repos
22,288
(8,709)
13,579
(80)
-
(13,499)
-
-
13,579
Net position
23,312
-
23,312
-
-
(23,312)
-
-
23,312
\n
(1)
Net IFRS offset balance of \u00a3944 million (2024 - \u00a32,281 million) relates to variation margin netting re\ufb02ected on other balance sheet lines.13 Derivatives
Derivative is a term covering a wide range of \ufb01nancial instruments that derive their
fair value from an underlying rate or price, for example interest rates or exchange rates (the underlying).
NatWest Group uses derivatives as a part of its trading activities, to manage its own risks such as interest rate, foreign exchange, or credit risk and in certain customer transactions. This
note
shows contracted volumes of derivatives, how they are used for hedging purposes and the effects of the application of hedge accounting.
For accounting policy information refer to Accounting policies 3.8 and 3.11.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Notional
Asset
Liability
\u00a0
Traded on
\u00a0 \u00a0
Traded on
\u00a0 \u00a0
Traded on
\u00a0 \u00a0
\u00a0
recognised
Traded over
\u00a0
recognised
Traded over
\u00a0
recognised
Traded over
\u00a0
\u00a0
exchanges
the counter
Total
exchanges
the counter
Total
exchanges
the counter
Total
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Interest rate
794
10,294
11,088
4
32,738
32,742
-
26,758
26,758
- Swaps
-
7,938
7,938
-
25,700
25,700
-
19,685
19,685
- Options
324
1,105
1,429
4
7,038
7,042
-
7,073
7,073
- Forwards and futures
470
1,251
1,721
-
-
-
-
-
-
Exchange rate
1
3,413
3,414
-
27,981
27,981
12
27,030
27,042
- Swaps
-
456
456
-
4,978
4,978
-
4,417
4,417
- Options
1
727
728
-
4,422
4,422
12
4,474
4,486
- Spot, forwards and futures
-
2,230
2,230
-
18,581
18,581
-
18,139
18,139
Credit
-
15
15
-
66
66
-
174
174
Equity and commodity
-
2
2
-
-
-
-
-
-
Total
795
13,724
14,519
4
60,785
60,789
12
53,962
53,974
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate
1,066
9,267
10,333
20
37,479
37,499
2
31,530
31,532
- Swaps
-
7,015
7,015
-
28,960
28,960
-
23,138
23,138
- Options
736
1,490
2,226
20
8,519
8,539
2
8,392
8,394
- Forwards and futures
330
762
1,092
-
-
-
-
-
-
Exchange rate
1
3,278
3,279
6
40,791
40,797
15
40,291
40,306
- Swaps
-
454
454
-
8,450
8,450
-
8,195
8,195
- Options
1
851
852
6
5,385
5,391
15
5,561
5,576
- Spot, forwards and futures
-
1,973
1,973
-
26,956
26,956
-
26,535
26,535
Credit
-
14
14
-
110
110
-
244
244
Equity and commodity
-
2
2
-
-
-
-
-
-
Total
1,067
12,561
13,628
26
78,380
78,406
17
72,065
72,082
\n
Included in the table above is the notional amount of \u00a38,768 billion (2024 - \u00a37,321 billion) of interest rate derivatives that are traded over the counter and settled through central clearing
counterparties. NatWest Group has no other type of derivatives that are settled through central counterparties.
\n\n\n
Hedge accounting using derivatives
\n
NatWest Group applies hedge accounting to
\n
reduce the accounting mismatch caused in
\n
the income statement by using derivatives to
\n
hedge the following risks: interest rate, foreign
\n
exchange and the foreign exchange risk
\n
associated with net investment in foreign
\n
operations.
\n
NatWest Group\u2019s interest rate hedging relates
\n
to the management of NatWest Group\u2019s non-
\n
trading structural interest rate risk, caused by
\n
the mismatch between \ufb01xed interest rates
\n
and \ufb02oating interest rates on its \ufb01nancial
\n
instruments. NatWest Group manages this
\n
risk within approved limits. Residual risk
\n
positions are hedged with derivatives,
\n
principally interest rate swaps.
\n
Cash \ufb02ow hedges of interest rate risk relate
\n
to exposures to the variability in future
\n
interest payments and receipts due to the
\n
movement of interest rates on forecast
\n
transactions and on \ufb01nancial assets and
\n
\ufb01nancial liabilities. This variability in cash \ufb02ows
\n
is hedged by interest rate swaps, which
\n
convert variable cash \ufb02ows into \ufb01xed. For
\n
these cash \ufb02ow hedge relationships, the
\n
hedged items are actual and forecast variable
\n
interest rate cash \ufb02ows arising from \ufb01nancial
\n
assets and \ufb01nancial liabilities with interest
\n
rates linked to the relevant interest rates,
\n
most notably SOFR, EURIBOR, the European
\n
Central Bank deposit rate, SONIA and the
\n
Bank of England Of\ufb01cial Bank Rate. The
\n
variability in cash \ufb02ows due to movements in
\n
the relevant interest rate is hedged; this risk
\n
component is identi\ufb01ed using the risk
\n
management systems of NatWest Group and
\n
encompasses the majority of cash \ufb02ow
\n
variability risk.
\n
Suitable larger \ufb01xed rate \ufb01nancial instruments
\n
are subject to fair value hedging in line with
\n
documented risk management strategies.
\n
Fair value hedges of interest rate risk involve
\n
interest rate swaps transforming the \ufb01xed
\n
interest rate risk in \ufb01nancial assets and
\n
\ufb01nancial liabilities to \ufb02oating. The hedged risk
\n
is the risk of changes in the hedged item\u2019s fair
\n
value attributable to changes in the interest
\n
rate risk component of the hedged item. The
\n
signi\ufb01cant interest rates identi\ufb01ed as risk
\n
components are SOFR, EURIBOR, ESTR and
\n
SONIA. These risk components are identi\ufb01ed
\n
using the risk management systems of
\n
NatWest Group and encompass the majority
\n
of the hedged item\u2019s fair value risk.
\n
NatWest Group hedges the exchange rate
\n
risk of its net investment in foreign currency
\n
denominated operations with currency
\n
borrowings and forward foreign exchange
\n
contracts.
\n
NatWest Group reviews the value of the
\n
investments\u2019 net assets, executing hedges
\n
where appropriate to reduce the sensitivity of
\n
capital ratios to foreign exchange rate
\n
movement. Hedge accounting relationships
\n
will be designated where required.
\n
Exchange rate risk also arises in NatWest
\n
Group where payments are denominated in
\n
currencies other than the functional currency.
\n
Residual risk positions are hedged with
\n
foreign exchange derivatives, \ufb01xing the
\n
exchange rate the payments will be settled in.
\n
The derivatives are documented as cash \ufb02ow
\n
hedges.
\n
For all cash \ufb02ow hedging, fair value hedge
\n
relationships and net investment hedging,
\n
NatWest Group determines that there is an
\n
economic relationship between the hedged
\n
item and hedging instrument via assessing
\n
the initial and ongoing effectiveness by
\n
comparing movements in the fair value of the
\n
expected highly probable forecast interest
\n
cash \ufb02ows/ fair value of the hedged item
\n
attributable to the hedged risk with
\n
movements in the fair value of the expected
\n
changes in cash \ufb02ows from the hedging
\n
instrument. The method used for comparing
\n
movements is either regression testing, or the
\n
dollar offset method. The method for testing
\n
effectiveness and the period over which the
\n
test is performed depends on the applicable
\n
risk management strategy and is applied
\n
consistently to each risk management
\n
strategy. Hedge effectiveness is assessed on
\n
a cumulative basis and the determination of
\n
effectiveness is in line with the requirements
\n
of IAS 39.
\n
NatWest Group uses either the actual ratio
\n
between the hedged item and hedging
\n
instrument(s) or one that minimises hedge
\n
ineffectiveness to establish the hedge ratio for
\n
hedge accounting. Hedge ineffectiveness is
\n
measured in line with the requirements of IAS
\n
39 and recognised in the income statement
\n
as it arises.
\n\n\n
Derivatives in hedge accounting relationships
\n
Included in the table below are derivatives held for hedging purposes as follows.
\n\n \n
2025
2024
Changes in fair value used
Changes in fair value used for
for
Notional
Assets
Liabilities
hedge ineffectiveness (1)
Notional
Assets
Liabilities
hedge ineffectiveness (1)
\u00a3bn
\u00a3m
\u00a3m
\u00a3m
\u00a3bn
\u00a3m
\u00a3m
\u00a3m
Fair value hedging
Interest rate contracts
(2)
92.7
829
1,256
522
83.1
1,096
1,965
958
Cash flow hedging
Interest rate contracts
156.1
868
1,619
717
167.9
1,424
3,300
581
Exchange rate contracts
25.3
532
355
(3)
14.4
116
457
1
Net investment hedging
Exchange rate contracts
(3)
0.4
3
1
(10)
0.3
2
1
9
274.5
2,232
3,231
1,226
265.7
2,638
5,723
1,549
IFRS netting and clearing house
settlements
(1,697)
(2,875)
(2,520)
(5,259)
535
356
118
464
\n
(1)
The change in fair value used for hedge ineffectiveness includes
\n
instruments that were derecognised in the year.
\n
(2)
The hedged risk includes in\ufb02ation risk.
\n
(3)
In addition to the derivative hedging instruments above, NatWest Group
\n
held notionals of \u00a32,760 million (2024 - \u00a33,144 million) of non-derivative
\n
hedging instruments with a carrying value of \u00a32,776 million (2024 -
\n
\u00a33,163 million), that were used in net investment hedges. The non-
\n
derivative instruments are other \ufb01nancial liabilities - debt securities in
\n
issue.
\n
Hedge ineffectiveness
\n
Hedge ineffectiveness recognised in other operating income comprises.
\n\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Fair value hedging
Loss on hedged items attributable to the hedged risk
(533)
(954)
(364)
Gain on the hedging instruments
522
958
406
Fair value hedging ineffectiveness
(11)
4
42
Cash flow hedging
Interest rate risk
(5)
(2)
10
Cash flow hedging ineffectiveness
(5)
(2)
10
Total
(16)
2
52
\n
The main sources of ineffectiveness for interest rate risk hedge accounting relationships are:
\n
\u2022
The effect of the counterparty credit risk on the fair value of the interest rate swap which is not re\ufb02ected in the fair value of the hedged item attributable to the change in interest rate (fair value
\n
hedge);
\n
\u2022
Differences in the repricing basis between the hedging instrument and hedged cash \ufb02ows (cash \ufb02ow hedge); and
\n
\u2022
Upfront present values on the hedging derivatives where hedge accounting relationships have been designated after the trade date (cash \ufb02ow hedge and fair value hedge).
\n\n\n
Maturity of notional hedging contracts
\n
The following table shows the period in which the notional of hedging contract ends.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
Over 10 years
Total
2025
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
\u00a3bn
Fair value hedging
Interest rate risk
(1)
Hedging assets
0.6
4.4
21.3
8.5
8.6
2.9
46.3
Hedging liabilities
1.4
4.4
14.9
20.5
4.7
0.5
46.4
2024
Fair value hedging
Interest rate risk
(1)
Hedging assets
4.0
5.5
12.6
9.7
6.6
3.7
42.1
Hedging liabilities
0.8
4.3
14.2
15.5
5.7
0.5
41.0
2025
Cash flow hedging
Interest rate risk
Hedging assets
4.8
8.2
20.1
31.8
4.7
-
69.6
Hedging liabilities
10.7
18.0
52.0
4.6
0.8
0.4
86.5
Exchange rate risk
Hedging assets
6.3
3.6
-
-
-
-
9.9
Hedging liabilities
-
2.7
4.5
8.2
-
-
15.4
2024
Cash flow hedging
Interest rate risk
Hedging assets
10.6
10.8
22.0
30.3
12.0
-
85.7
Hedging liabilities
2.5
17.1
50.7
10.1
1.4
0.4
82.2
Exchange rate risk
Hedging assets
0.5
0.8
0.5
-
-
-
1.8
Hedging liabilities
3.1
2.5
3.7
3.3
-
-
12.6
\n
(1)
The hedged risk includes in\ufb02ation risk.
\n\n\n
Average \ufb01xed interest rates
\n
The following table shows average \ufb01xed rate for cash \ufb02ow hedges, interest rate risk.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
Over 10 years
Total
2025
%
%
%
%
%
%
%
Average fixed interest rate
Hedging assets
1.26
2.57
3.22
3.21
3.60
3.12
3.03
Hedging liabilities
4.37
3.78
3.63
3.67
3.71
4.18
3.75
2024
Average fixed interest rate
Hedging assets
3.85
0.98
2.52
3.32
2.84
3.12
2.82
Hedging liabilities
4.34
4.76
3.97
3.09
3.64
4.18
4.03
\n
Average foreign exchange rates
\n
For cash \ufb02ow hedging of exchange rate risk, the average foreign exchange rates applicable across the relationships were as below for the
\n
main currencies hedged.
\n\n \n
2025
2024
INR/GBP
119.17
109.07
USD/GBP
1.32
1.30
JPY/GBP
195.35
176.04
EUR/GBP
1.14
-
JPY/USD
137.82
130.79
NOK/USD
9.21
9.21
AUD/USD
1.54
1.49
CHF/USD
0.88
0.91
EUR/USD
0.89
0.91
\n\n\n
Analysis of hedged items and related hedging instruments
\n
The table below analyses assets and liabilities subject to hedging derivatives.
\n\n \n
Changes in fair value
Carrying value of
Impact on hedged items
used as a basis to
hedged assets and liabilities
included in carrying value
determine ineffectiveness (1)
2025
\u00a3m
\u00a3m
\u00a3m
Fair value hedging - interest rate
(2)
Loans to banks and customers - amortised cost
5,466
(368)
87
Other financial assets - securities
41,688
7
-
Total
(3)
47,154
(361)
87
Bank and customer deposits
1,582
2
1
Other financial liabilities - debt securities in issue
(5)
41,221
(277)
(501)
Subordinated liabilities
5,748
(105)
(120)
Total
48,551
(380)
(620)
2024
Fair value hedging - interest rate
(2)
Loans to banks and customers - amortised cost
5,318
(478)
(182)
Other financial assets - securities
36,724
(29)
(347)
Total
(3)
42,042
(507)
(529)
Bank and customer deposits
382
-
(3)
Other financial liabilities - debt securities in issue
(5)
37,548
(784)
(315)
Subordinated liabilities
5,772
(244)
(107)
Total
43,702
(1,028)
(425)
\n
For the notes to this table refer to the following page.
\n\n\n\n \n
Changes in fair value
Carrying value of
used as a basis to
hedged assets and liabilities
determine ineffectiveness (1)
2025
\u00a3m
\u00a3m
Cash flow hedging - interest rate
Loans to banks and customers - amortised cost
(4)
68,660
(1,455)
Other financial assets - securities
982
(23)
Total
69,642
(1,478)
Bank and customer deposits
86,285
756
Other financial liabilities - debt securities in issue
156
-
Total
86,441
756
Cash flow hedging - exchange rate
Loans to banks and customers - amortised cost
(4)
7,269
-
Other financial assets - securities
2,586
-
Total
9,855
-
Other financial liabilities - debt securities in issue
8,751
(2)
Other
210
5
Total
8,961
3
2024
Cash flow hedging - interest rate
Loans to banks and customers - amortised cost
(4)
84,065
(190)
Other financial assets - securities
1,625
(2)
Total
85,690
(192)
Bank and customer deposits
82,081
(391)
Other financial liabilities - debt securities in issue
149
-
Total
82,230
(391)
Cash flow hedging - exchange rate
Loans to banks and customer - amortised cost
(4)
223
-
Other financial assets - securities
1,598
-
Total
1,821
-
Other financial liabilities - debt securities in issue
8,279
(1)
Other
195
-
Total
8,474
(1)
\n
(1)
The change in fair value used for hedge ineffectiveness includes
\n
instruments that were derecognised in the year.
\n
(2)
The hedged risk includes in\ufb02ation risk.
\n
(3)
Carrying values include \u00a335 million (2024 - \u00a346 million) adjustment for
\n
discontinued fair value hedges.
\n
(4)
Includes cash and balances at central banks.
\n
(5)
The carrying value include \u00a34,759 million (2024 - \u00a34,631 million) of debt
\n
securities held at amortised cost.
Analysis of cash \ufb02ow and foreign exchange hedge reserve
The following table shows an analysis of the pre-tax cash \ufb02ow hedge reserve and foreign exchange hedge reserve.
\n \n
2025
2024
Foreign
Foreign
Cash flow
exchange
Cash flow
exchange
hedge reserve
hedge reserve
hedge reserve
hedge reserve
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing
Interest rate risk
(598)
-
(1,564)
-
Foreign exchange risk
1
(50)
(6)
15
De-designated
Interest rate risk
(438)
-
(437)
-
Foreign exchange risk
-
(699)
2
(663)
Total
(1,035)
(749)
(2,005)
(648)
\n \n
2025
2024
Foreign
Foreign
Cash flow
exchange
Cash flow
exchange
hedge reserve
hedge reserve
hedge reserve
hedge reserve
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Amount recognised in equity
Interest rate risk
50
-
(931)
-
Foreign exchange risk
19
(92)
59
122
Total
69
(92)
(872)
122
Amount transferred from equity to earnings
Interest rate risk to net interest income
912
-
1,562
-
Foreign exchange risk to net interest income
(21)
-
(73)
-
Foreign exchange risk to non interest income
-
(9)
-
19
Foreign exchange risk to operating expenses
8
-
5
-
Total
899
(9)
1,494
19
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00252": { "value": "3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.Financial instruments \u2013 \ufb01nancial assets and liabilities that can be offset
The tables below present information on \ufb01nancial assets and \ufb01nancial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with
\ufb01nancial collateral received or given.
\u00a0
Instruments which can be offset
Potential for offset not recognised by IFRS
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Effect of master
\u00a0\u00a0
Net amount after
Instruments
\u00a0
\u00a0\u00a0\u00a0\u00a0
netting and similar
Cash
\u00a0
netting agreements and
outside netting
Balance sheet
\u00a0
Gross
IFRS offset
Balance sheet
agreements
collateral
Securities collateral
effect of related collateral
agreements
total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Derivative assets
77,408
(17,007)
60,401
(45,928)
(9,275)
(3,283)
1,915
388
60,789
Derivative liabilities
71,589
(17,951)
53,638
(45,928)
(4,281)
(1,256)
2,173
336
53,974
Net position
(1)
5,819
944
6,763
-
(4,994)
(2,027)
(258)
52
6,815
Trading reverse repos
44,729
(17,129)
27,600
(465)
-
(26,882)
253
56
27,656
Trading repos
43,648
(17,129)
26,519
(465)
-
(26,054)
-
2,059
28,578
Net position
1,081
-
1,081
-
-
(828)
253
(2,003)
(922)
Non trading reverse repos
50,889
(14,470)
36,419
(9)
-
(36,410)
-
-
36,419
Non trading repos
44,082
(14,470)
29,612
(9)
-
(29,603)
-
-
29,612
Net position
6,807
-
6,807
-
-
(6,807)
-
-
6,807
2024
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Derivative assets
96,624
(18,746)
77,878
(61,883)
(10,005)
(4,072)
1,918
528
78,406
Derivative liabilities
92,620
(21,027)
71,593
(61,883)
(5,801)
(896)
3,013
489
72,082
Net position
(1)
4,004
2,281
6,285
-
(4,204)
(3,176)
(1,095)
39
6,324
Trading reverse repos
42,261
(15,174)
27,087
(1,469)
-
(25,406)
212
40
27,127
Trading repos
45,033
(15,174)
29,859
(1,469)
-
(28,390)
-
703
30,562
Net position
(2,772)
-
(2,772)
\u00a0
-
2,984
212
(663)
(3,435)
Non trading reverse repos
45,600
(8,709)
36,891
(80)
-
(36,811)
-
-
36,891
Non trading repos
22,288
(8,709)
13,579
(80)
-
(13,499)
-
-
13,579
Net position
23,312
-
23,312
-
-
(23,312)
-
-
23,312
\n
(1)
Net IFRS offset balance of \u00a3944 million (2024 - \u00a32,281 million) relates to variation margin netting re\ufb02ected on other balance sheet lines.12 Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair value and classi\ufb01ed as held-for-trading. Financial instruments are classi\ufb01ed as held-for-trading if they are held for the
purpose of selling or repurchasing them in the short term, to make a spread between purchase and sale price or held to take advantage of movements in prices and yields.
For accounting policy information refer to Accounting policy 3.8.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Assets
\u00a3m
\u00a3m
Loans
\u00a0 \u00a0
Reverse repos
27,656
27,127
Collateral given
5,701
7,367
Other loans
295
545
Total loans
33,652
35,039
Securities
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
2,120
2,077
- US
4,153
3,734
- Other
4,135
3,506
Financial institutions and corporate
2,477
4,561
Total securities
12,885
13,878
Total
46,537
48,917
Liabilities
\u00a0 \u00a0
Deposits
\u00a0 \u00a0
Repos
28,578
30,562
Collateral received
11,966
12,509
Other deposits
740
895
Total deposits
41,284
43,966
Debt securities in issue
234
257
Short positions
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
1,504
2,680
- US
1,161
1,677
- Other
4,137
4,755
Financial institutions and Corporate
702
1,379
Total short positions
7,504
10,491
Total
49,022
54,714
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesHeldForTradingExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00251": { "value": "3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.Financial instruments \u2013 \ufb01nancial assets and liabilities that can be offset
The tables below present information on \ufb01nancial assets and \ufb01nancial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with
\ufb01nancial collateral received or given.
\u00a0
Instruments which can be offset
Potential for offset not recognised by IFRS
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Effect of master
\u00a0\u00a0
Net amount after
Instruments
\u00a0
\u00a0\u00a0\u00a0\u00a0
netting and similar
Cash
\u00a0
netting agreements and
outside netting
Balance sheet
\u00a0
Gross
IFRS offset
Balance sheet
agreements
collateral
Securities collateral
effect of related collateral
agreements
total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Derivative assets
77,408
(17,007)
60,401
(45,928)
(9,275)
(3,283)
1,915
388
60,789
Derivative liabilities
71,589
(17,951)
53,638
(45,928)
(4,281)
(1,256)
2,173
336
53,974
Net position
(1)
5,819
944
6,763
-
(4,994)
(2,027)
(258)
52
6,815
Trading reverse repos
44,729
(17,129)
27,600
(465)
-
(26,882)
253
56
27,656
Trading repos
43,648
(17,129)
26,519
(465)
-
(26,054)
-
2,059
28,578
Net position
1,081
-
1,081
-
-
(828)
253
(2,003)
(922)
Non trading reverse repos
50,889
(14,470)
36,419
(9)
-
(36,410)
-
-
36,419
Non trading repos
44,082
(14,470)
29,612
(9)
-
(29,603)
-
-
29,612
Net position
6,807
-
6,807
-
-
(6,807)
-
-
6,807
2024
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Derivative assets
96,624
(18,746)
77,878
(61,883)
(10,005)
(4,072)
1,918
528
78,406
Derivative liabilities
92,620
(21,027)
71,593
(61,883)
(5,801)
(896)
3,013
489
72,082
Net position
(1)
4,004
2,281
6,285
-
(4,204)
(3,176)
(1,095)
39
6,324
Trading reverse repos
42,261
(15,174)
27,087
(1,469)
-
(25,406)
212
40
27,127
Trading repos
45,033
(15,174)
29,859
(1,469)
-
(28,390)
-
703
30,562
Net position
(2,772)
-
(2,772)
\u00a0
-
2,984
212
(663)
(3,435)
Non trading reverse repos
45,600
(8,709)
36,891
(80)
-
(36,811)
-
-
36,891
Non trading repos
22,288
(8,709)
13,579
(80)
-
(13,499)
-
-
13,579
Net position
23,312
-
23,312
-
-
(23,312)
-
-
23,312
\n
(1)
Net IFRS offset balance of \u00a3944 million (2024 - \u00a32,281 million) relates to variation margin netting re\ufb02ected on other balance sheet lines.12 Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair value and classi\ufb01ed as held-for-trading. Financial instruments are classi\ufb01ed as held-for-trading if they are held for the
purpose of selling or repurchasing them in the short term, to make a spread between purchase and sale price or held to take advantage of movements in prices and yields.
For accounting policy information refer to Accounting policy 3.8.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Assets
\u00a3m
\u00a3m
Loans
\u00a0 \u00a0
Reverse repos
27,656
27,127
Collateral given
5,701
7,367
Other loans
295
545
Total loans
33,652
35,039
Securities
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
2,120
2,077
- US
4,153
3,734
- Other
4,135
3,506
Financial institutions and corporate
2,477
4,561
Total securities
12,885
13,878
Total
46,537
48,917
Liabilities
\u00a0 \u00a0
Deposits
\u00a0 \u00a0
Repos
28,578
30,562
Collateral received
11,966
12,509
Other deposits
740
895
Total deposits
41,284
43,966
Debt securities in issue
234
257
Short positions
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
1,504
2,680
- US
1,161
1,677
- Other
4,137
4,755
Financial institutions and Corporate
702
1,379
Total short positions
7,504
10,491
Total
49,022
54,714
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsHeldForTradingExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00250": { "value": "3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.Financial instruments \u2013 \ufb01nancial assets and liabilities that can be offset
The tables below present information on \ufb01nancial assets and \ufb01nancial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with
\ufb01nancial collateral received or given.
\u00a0
Instruments which can be offset
Potential for offset not recognised by IFRS
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Effect of master
\u00a0\u00a0
Net amount after
Instruments
\u00a0
\u00a0\u00a0\u00a0\u00a0
netting and similar
Cash
\u00a0
netting agreements and
outside netting
Balance sheet
\u00a0
Gross
IFRS offset
Balance sheet
agreements
collateral
Securities collateral
effect of related collateral
agreements
total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Derivative assets
77,408
(17,007)
60,401
(45,928)
(9,275)
(3,283)
1,915
388
60,789
Derivative liabilities
71,589
(17,951)
53,638
(45,928)
(4,281)
(1,256)
2,173
336
53,974
Net position
(1)
5,819
944
6,763
-
(4,994)
(2,027)
(258)
52
6,815
Trading reverse repos
44,729
(17,129)
27,600
(465)
-
(26,882)
253
56
27,656
Trading repos
43,648
(17,129)
26,519
(465)
-
(26,054)
-
2,059
28,578
Net position
1,081
-
1,081
-
-
(828)
253
(2,003)
(922)
Non trading reverse repos
50,889
(14,470)
36,419
(9)
-
(36,410)
-
-
36,419
Non trading repos
44,082
(14,470)
29,612
(9)
-
(29,603)
-
-
29,612
Net position
6,807
-
6,807
-
-
(6,807)
-
-
6,807
2024
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Derivative assets
96,624
(18,746)
77,878
(61,883)
(10,005)
(4,072)
1,918
528
78,406
Derivative liabilities
92,620
(21,027)
71,593
(61,883)
(5,801)
(896)
3,013
489
72,082
Net position
(1)
4,004
2,281
6,285
-
(4,204)
(3,176)
(1,095)
39
6,324
Trading reverse repos
42,261
(15,174)
27,087
(1,469)
-
(25,406)
212
40
27,127
Trading repos
45,033
(15,174)
29,859
(1,469)
-
(28,390)
-
703
30,562
Net position
(2,772)
-
(2,772)
\u00a0
-
2,984
212
(663)
(3,435)
Non trading reverse repos
45,600
(8,709)
36,891
(80)
-
(36,811)
-
-
36,891
Non trading repos
22,288
(8,709)
13,579
(80)
-
(13,499)
-
-
13,579
Net position
23,312
-
23,312
-
-
(23,312)
-
-
23,312
\n
(1)
Net IFRS offset balance of \u00a3944 million (2024 - \u00a32,281 million) relates to variation margin netting re\ufb02ected on other balance sheet lines.12 Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair value and classi\ufb01ed as held-for-trading. Financial instruments are classi\ufb01ed as held-for-trading if they are held for the
purpose of selling or repurchasing them in the short term, to make a spread between purchase and sale price or held to take advantage of movements in prices and yields.
For accounting policy information refer to Accounting policy 3.8.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Assets
\u00a3m
\u00a3m
Loans
\u00a0 \u00a0
Reverse repos
27,656
27,127
Collateral given
5,701
7,367
Other loans
295
545
Total loans
33,652
35,039
Securities
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
2,120
2,077
- US
4,153
3,734
- Other
4,135
3,506
Financial institutions and corporate
2,477
4,561
Total securities
12,885
13,878
Total
46,537
48,917
Liabilities
\u00a0 \u00a0
Deposits
\u00a0 \u00a0
Repos
28,578
30,562
Collateral received
11,966
12,509
Other deposits
740
895
Total deposits
41,284
43,966
Debt securities in issue
234
257
Short positions
\u00a0 \u00a0
Central and local government
\u00a0 \u00a0
- UK
1,504
2,680
- US
1,161
1,677
- Other
4,137
4,755
Financial institutions and Corporate
702
1,379
Total short positions
7,504
10,491
Total
49,022
54,714
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsHeldForTradingExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00247": { "value": "3.8. Financial instruments
Financial instruments are measured at fair
value on initial recognition on the balance
sheet.
Monetary \ufb01nancial assets are classi\ufb01ed into
one of the following subsequent
measurement categories (subject to business
model assessment and review of contractual
cash \ufb02ow for the purposes of sole payments
of principal and interest where applicable):
\u2022
amortised cost
measured at cost using
the effective interest rate method, less
any impairment allowance;
\u2022
fair value through other comprehensive
income (FVOCI)
measured at fair value,
using the effective interest rate method
and changes in fair value through other
comprehensive income;
\u2022
mandatory fair value through pro\ufb01t or
loss (MFVTPL)
measured at fair value and
changes in fair value reported in the
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss (DFV) (held for trading)
measured at
fair value and changes in fair value
reported in the income statement.
Classi\ufb01cation by business model re\ufb02ects how
we manage our \ufb01nancial assets to generate
cash \ufb02ows. A business model assessment
helps to ascertain the measurement
approach depending on whether cash \ufb02ows
result from holding \ufb01nancial assets to collect
the contractual cash \ufb02ows, from selling those
\ufb01nancial assets, or both.
Business model assessment of assets is made
at portfolio level, being the level at which they
are managed to achieve a prede\ufb01ned
business objective. This is expected to result
in the most consistent classi\ufb01cation of assets
because it aligns with the stated objectives
for the portfolio, its risk management,
manager\u2019s remuneration and the ability to
monitor sales of assets from a portfolio.
When a signi\ufb01cant change to our business is
communicated to external parties, we
reassess our business model for managing
those \ufb01nancial assets. We reclassify \ufb01nancial
assets if we have a signi\ufb01cant change to the
business model. A reclassi\ufb01cation is applied
prospectively from the reclassi\ufb01cation date.
The contractual terms of a \ufb01nancial asset;
any leverage features; prepayment and
extension terms; and discounts or penalties to
interest rates that are part of meeting
environmental, social and governance targets
as well as other contingent and leverage
features, non-recourse arrangements and
features that could modify the timing and/or
amount of the contractual cash \ufb02ows that
might reset the effective rate of interest; are
considered in determining whether cash \ufb02ows
are solely payments of principal and interest.
Certain \ufb01nancial assets may be designated at
fair value through pro\ufb01t or loss (DFV) upon
initial recognition if such designation
eliminates, or signi\ufb01cantly reduces,
accounting mismatch.
Equity shares are measured at fair value
through pro\ufb01t or loss unless speci\ufb01cally
elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses
in fair value through other comprehensive
income reserve are recycled to the income
statement for monetary assets and for non-
monetary assets (equity shares) the
cumulative gains or losses are transferred
directly to retained earnings.
Regular way purchases and sales of \ufb01nancial
assets classi\ufb01ed as amortised cost are
recognised on the settlement date; all other
regular way transactions in \ufb01nancial assets
are recognised on the trade date.
Financial liabilities are classi\ufb01ed into one of
following measurement categories:
\u2022
amortised cost measured at cost using
the effective interest rate method;
\u2022
held for trading measured at fair value
and changes in fair value reported in
income statement; or
\u2022
designated at fair value through pro\ufb01t or
loss; measured at fair value and changes
in fair value reported in the income
statement except changes in fair value
attributable to the credit risk component
recognised in other comprehensive
income when no accounting mismatch
occurs.3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.Debt securities and subordinated liabilities
Most debt securities are valued using quoted prices in
active markets or from quoted prices of similar \ufb01nancial
instruments. The remaining population is valued using
discounted cash\ufb02ows at current offer rates.15 Other \ufb01nancial assets
Other \ufb01nancial assets consist of debt securities, equity shares and loans that are not held for trading. Balances consist of local and central government securities, a part of NatWest Group\u2019s
liquidity portfolio.
For accounting policy information refer to Accounting policy 3.8.
\n \n
Debt securities
Central and local government
Equity
UK
US
Other
Other debt
Total
shares
Loans
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Mandatory fair value through profit or loss
-
-
-
631
631
1
409
1,041
Designated at fair value
-
-
-
3
3
-
-
3
Fair value through other comprehensive income
(1)
14,117
5,128
6,403
16,241
41,889
121
158
42,168
Amortised cost
13,083
341
1,795
21,339
36,558
-
-
36,558
Total
27,200
5,469
8,198
38,214
79,081
122
567
79,770
2024
Mandatory fair value through profit or loss
-
-
-
1
1
4
793
798
Designated at fair value
-
-
2
3
5
-
-
5
Fair value through other comprehensive income
(1)
13,281
4,587
6,192
13,476
37,536
247
60
37,843
Amortised cost
3,571
500
85
20,441
24,597
-
-
24,597
Total
16,852
5,087
6,279
33,921
62,139
251
853
63,243
(1)
Upon initial recognition, NatWest Group occasionally
irrevocably
designates some of its equity investments as equity
instruments at FVOCI when they meet the de\ufb01nition of equity under IAS
32 Financial instruments: presentation, are not held for trading or they
are held for strategic purposes. Such classi\ufb01cation is determined on an
instrument-by-instrument basis. Gains and losses on these equity
instruments are not recycled to the income statement and dividends are
recognised in pro\ufb01t or loss except when they represent a recovery of
part of the cost of the instrument, in which case such gains are recorded
in OCI. Equity instruments at FVOCI are not subject to an impairment
assessment.
There were no signi\ufb01cant acquisitions of equity shared in either year.
NatWest Group disposed of equity shares in Visa Inc \u00a316 million (2024: \u00a362 million), Permanent TSB p.l.c of \u00a3109 million, and Vodeno \u00a345 million.
Dividends received on FVOCI equity shares during 2025 includes \u00a358 million from OTCDERIV LIMITED.18 Other \ufb01nancial liabilities
Other \ufb01nancial liabilities consist of customer deposits designated at fair value and debt securities in issue.
For accounting policy information refer to Accounting policies 3.8 and 3.10.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Customer deposits including repos
2,312
1,812
Debt securities in issue
\u00a0 \u00a0
- MRELs
25,441
23,998
- Other medium term notes
28,033
22,087
- Commercial paper and certificates of deposit
9,401
11,266
- Covered bonds
749
749
- Securitisation
1,663
1,175
Total
67,599
61,087
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00640": { "value": "3.9. Netting
Financial assets and \ufb01nancial liabilities are
offset, and the net amount presented on the
balance sheet when, and only when, we
currently have a legally enforceable right to
set off the recognised amounts and we intend
either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
We are party to a number of arrangements,
including master netting agreements, that
give us the right to offset \ufb01nancial assets and
\ufb01nancial liabilities, but where we do not intend
to settle the amounts net or simultaneously,
the assets and liabilities concerned are
presented separately on the balance sheet.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00270": { "value": "3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.21 Share capital and other equity
Share capital consists of ordinary shares and preference shares and is measured as the number of shares allotted and fully paid, multiplied by the nominal value of a share. Other equity
\n
includes paid-in equity, merger reserve, capital redemption reserve and own shares held.
\n
For accounting policy information refer to Accounting policy 3.10.
Number of shares
2025
2024
2025
2024
Allotted, called up and fully paid
\u00a3m
\u00a3m
000s
000s
Ordinary shares of \u00a31.0769
(1)
8,860
8,972
8,227,042
8,331,145
Cumulative preference shares of \u00a31
0.5
0.5
483.0
483.0
\n
(1)
The nominal value of ordinary shares without rounding is \u00a31.076923076923077 per share.
Number of shares
Movement in allotted, called up and fully paid ordinary shares
\u00a3m
000s
At 31 December 2023
9,683
8,991,737
Share cancellation
(711)
(660,592)
At 31 December 2024
8,972
8,331,145
Share cancellation
(112)
(104,103)
At 31 December 2025
8,860
8,227,042
\n
Ordinary shares
\n
There is no authorised share capital under the company\u2019s constitution. At 31 December 2025, the
\n
directors had authority granted at the 2025 Annual General Meeting (AGM) to issue up to \u00a3435
\n
million nominal of ordinary shares other than by pre-emption to existing shareholders.
\n
On-market purchases
\n
At the AGM in 2025, shareholders renewed the authority (2025 Authority) for the company to
\n
make on-market purchases of up to 807,750,182 ordinary shares. The directors used the 2025
\n
Authority to carry out a share buyback programme (the 2025 Programme) of up to \u00a3750
\n
million, as announced to the market on 28 July 2025.
\n
The 2025 Programme started on 28 July 2025 and will end no later than 13 February 2026,
\n
provided that the term of the 2025 Programme may be extended to end no later than 13 March
\n
2026 to account for any days where usual trading has not been possible because of market
\n
events during the term of the 2025 Programme.
\n
As at 31 December 2025, 104,103,117 ordinary shares (nominal value \u00a3112,111,049) have been
\n
purchased by the company under the 2025 Programme at a volume weighted average price of
\n
551.8173 pence per ordinary share for a total consideration of \u00a3574,458,965. All of the
\n
purchased ordinary shares were cancelled, representing 1.27% of the company\u2019s issued ordinary
\n
share capital.
\n
Off-market purchases
\n
The authority from shareholders to make off-market purchases of ordinary shares from HMT (or
\n
its nominee) was renewed at the 2025 AGM.
\n
The company did not make any off-market purchases under this authority in 2025.
\n
Dividends
\n
In 2025 NatWest Group paid an interim dividend of \u00a3768 million, or 9.5 pence per ordinary share
\n
(2024 \u2013 \u00a3498 million, or 6 pence per ordinary share).
\n
The company has announced that the directors have recommended a \ufb01nal dividend of \u00a31.8
\n
billion, or 23.0 pence per ordinary share (2024 \u2013 \u00a31.2 billion, or 15.5 pence per ordinary share).
\n
The \ufb01nal dividend recommended by directors is subject to shareholders\u2019 approval at the AGM on
\n
28 April 2026. If approved, payment will be made on 5 May 2026 to shareholders on the register
\n
at the close of business on 20 March 2026. The ex-dividend date will be 19 March 2026.
\n
Cumulative preference shares
\n
At the AGM in 2025, shareholders renewed the authority for the company to make an off-market
\n
purchase of its preference shares. Shareholders will be asked to renew the authority at the AGM
\n
in 2026.
\n\n\n
Other equity
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Additional Tier 1 notes
$1.15 billion 8.000% notes callable August 2025
-
736
735
$1.50 billion 6.000% notes callable
December 2025 - June 2026
-
1,220
1,220
\u00a31.00 billion 5.125% notes callable May - November 2027
(1)
998
998
998
\u00a30.40 billion 4.5% notes callable March 2028
(2)
399
399
399
$0.75 billion 4.6% notes callable June 2031
(3)
539
539
538
\u00a30.75 billion 7.50% notes callable February 2032
(4)
748
-
-
$1.00 billion 8.125% notes callable November 2033
(5)
798
798
-
$0.75 billion 7.3% notes callable November 2034
(6)
590
590
-
\u00a30.50 billion 7.625% notes callable February 2035
(7)
499
-
-
4,571
5,280
3,890
\n
(1)
Issued in November 2020. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
(2)
Issued in March 2021. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
(3)
Issued in June 2021. In the event of conversion, converted into ordinary shares at a price of $2.462 (translated at applicable
\n
exchange rate) per share.
\n
(4)
Issued in March 2025. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
(5)
Issued in May 2024. In the event of conversion, converted into ordinary shares at a price of $2.205 (translated at applicable
\n
exchange rate) per share.
\n
(6)
Issued in November 2024. In the event of conversion, converted into ordinary shares at a price of $2.226 (translated at applicable
\n
exchange rate) per share.
\n
(7)
Issued in September 2025. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
Paid-in equity
-
comprises equity instruments
\n
issued by the company other than those legally
\n
constituted as shares.
\n
Additional Tier 1 instruments issued by NatWest
\n
Group plc having the legal form of debt are
\n
classi\ufb01ed as equity under IFRS. The coupons on
\n
these instruments are non-cumulative and
\n
payable at the company\u2019s discretion. In the event
\n
NatWest Group\u2019s CET1 ratio falls below 7% any
\n
outstanding instruments will be converted into
\n
ordinary shares at a \ufb01xed price.
\n
Capital recognised for regulatory purposes cannot
\n
be redeemed without Prudential Regulation
\n
Authority consent. This includes ordinary shares,
\n
preference shares and Additional Tier
\n
1
instruments.
\n
Merger reserve
-
the merger reserve comprises
\n
the premium on shares issued to acquire NatWest
\n
Bank Plc less goodwill amortisation charged
\n
under previous GAAP.
\n
Capital redemption reserve -
under UK
\n
companies legislation, when shares are redeemed
\n
or purchased wholly or partly out of the
\n
company's pro\ufb01ts, the amount by which the
\n
company's issued share capital is diminished must
\n
be transferred to the capital redemption reserve.
\n
The capital maintenance provisions of UK
\n
companies legislation apply to the capital
\n
redemption reserve as if it were part of the
\n
company\u2019s paid up share capital. The nominal
\n
value of the shares bought back from market
\n
during 2025 and via the Programme during 2025
\n
have been transferred to the Capital redemption
\n
reserve.
\n
Own shares held
-
at 31 December 2025, 10
\n
million ordinary shares of \u00a31.0769 each of the
\n
company (2024 - 11 million) were held by
\n
employee share trusts in respect of share awards
\n
and options granted to employees.
\n
During 2025, the employee share trusts
\n
purchased no ordinary shares and delivered 1
\n
million ordinary shares in satisfaction of the
\n
exercise of options and the vesting of share
\n
awards under the employee share plans. The
\n
company retains the \ufb02exibility to use newly issued
\n
shares, shares purchased by the NatWest Group
\n
Employee Share Ownership Trust and any
\n
available treasury shares to satisfy obligations
\n
under its employee share plans.
\n
The company does not use performance
\n
conditions or targets based on earnings per share
\n
(EPS), total shareholder return (TSR), and net
\n
asset value (NAV) in connection with its employee
\n
share plans.
\n
The company has used a total of 56 million
\n
treasury shares in 2025 to satisfy the exercise of
\n
options and the vesting of share awards under
\n
the employee share plans. The balance of
\n
ordinary shares held in treasury as at 31
\n
December 2025 was 221 million.
\n
NatWest Group plc optimises capital ef\ufb01ciency by
\n
maintaining reserves in subsidiaries, including
\n
regulated entities. Certain preference shares and
\n
subordinated debt are also included within
\n
regulatory capital. The remittance of reserves to
\n
the company or the redemption of shares or
\n
subordinated capital by regulated entities may be
\n
subject to maintaining the capital resources
\n
required by the relevant regulator.
\n
UK law prescribes that only the reserves of the
\n
company are taken into account for the purpose
\n
of making distributions and in determining
\n
permissible applications of the share premium
\naccount.", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00274": { "value": "3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.Merger reserve
-
the merger reserve comprises
\n
the premium on shares issued to acquire NatWest
\n
Bank Plc less goodwill amortisation charged
\n
under previous GAAP.
\n
Capital redemption reserve -
under UK
\n
companies legislation, when shares are redeemed
\n
or purchased wholly or partly out of the
\n
company's pro\ufb01ts, the amount by which the
\n
company's issued share capital is diminished must
\n
be transferred to the capital redemption reserve.
\n
The capital maintenance provisions of UK
\n
companies legislation apply to the capital
\n
redemption reserve as if it were part of the
\n
company\u2019s paid up share capital. The nominal
\n
value of the shares bought back from market
\n
during 2025 and via the Programme during 2025
\n
have been transferred to the Capital redemption
\n
reserve.
\n
Own shares held
-
at 31 December 2025, 10
\n
million ordinary shares of \u00a31.0769 each of the
\n
company (2024 - 11 million) were held by
\n
employee share trusts in respect of share awards
\n
and options granted to employees.
\n
During 2025, the employee share trusts
\n
purchased no ordinary shares and delivered 1
\n
million ordinary shares in satisfaction of the
\n
exercise of options and the vesting of share
\n
awards under the employee share plans. The
\n
company retains the \ufb02exibility to use newly issued
\n
shares, shares purchased by the NatWest Group
\n
Employee Share Ownership Trust and any
\n
available treasury shares to satisfy obligations
\n
under its employee share plans.
\n
The company does not use performance
\n
conditions or targets based on earnings per share
\n
(EPS), total shareholder return (TSR), and net
\n
asset value (NAV) in connection with its employee
\n
share plans.
\n
The company has used a total of 56 million
\n
treasury shares in 2025 to satisfy the exercise of
\n
options and the vesting of share awards under
\n
the employee share plans. The balance of
\n
ordinary shares held in treasury as at 31
\n
December 2025 was 221 million.
\n
NatWest Group plc optimises capital ef\ufb01ciency by
\n
maintaining reserves in subsidiaries, including
\n
regulated entities. Certain preference shares and
\n
subordinated debt are also included within
\n
regulatory capital. The remittance of reserves to
\n
the company or the redemption of shares or
\n
subordinated capital by regulated entities may be
\n
subject to maintaining the capital resources
\n
required by the relevant regulator.
\n
UK law prescribes that only the reserves of the
\n
company are taken into account for the purpose
\n
of making distributions and in determining
\n
permissible applications of the share premium
account.", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00655": { "value": "3.10. Capital instruments
We classify a \ufb01nancial instrument that we
issue as a \ufb01nancial liability if it is a contractual
obligation to deliver cash or another \ufb01nancial
asset, or to exchange \ufb01nancial assets or
\ufb01nancial liabilities on potentially unfavourable
terms and as equity if we evidence a residual
interest in our assets after the deduction of
liabilities. Incremental costs and related tax
that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00656": { "value": "The consideration for any ordinary shares of
NatWest Group plc purchased by us (known
as treasury shares or own shares held) is
deducted from retained earnings. On the
cancellation of treasury shares their nominal
value is removed from retained earnings and
a consequential amount recognised in capital
redemption reserve in compliance with the
Companies Act 2006. On the sale or re-issue
of treasury shares the consideration received
and related tax are credited to equity, net of
any directly attributable incremental costs.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00643": { "value": "3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00642": { "value": "3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00641": { "value": "3.11. Derivatives and hedging
Derivatives are reported on the balance sheet
at fair value.
We use derivatives as part of our trading
activities, to manage our own risk such as
interest rate, foreign exchange, or credit risk
or in certain customer transactions. Not all
derivatives used to manage risk are in hedge
accounting relationships (an IFRS method to
reduce accounting mismatch from changes in
the fair value of the derivatives reported in
the income statement).
Gains and losses arising from changes in the
fair value of derivatives that are not in hedge
relationships are recognised in Income from
trading activities unless those derivatives are
managed together with \ufb01nancial instruments
designated at fair value; these gains and
losses are included in Other operating
income.
Hedge accounting
Hedge accounting relationships are
designated and documented at inception in
line with the requirements of IAS 39 Financial
instruments \u2013 Recognition and Measurement.
The documentation identi\ufb01es the hedged
item, the hedging instrument and details of
the risk that is being hedged and the way in
which effectiveness will be assessed at
inception and during the period of the hedge.
When designating a hedging relationship, we
consider: the economic relationship between
the hedged item (including the risk being
hedged) and the hedging instrument; the
nature of the risk; the risk management
objective and strategy for undertaking the
hedge; and the appropriateness of the
method that will be used to assess hedge
effectiveness.
Designated hedging relationships must be
expected to be highly effective both on a
prospective and retrospective basis. This is
assessed using regression techniques which
model the degree of offsetting between the
changes in fair value or cash \ufb02ows
attributable to the hedged risk and the
changes in fair value of the designated
hedging derivatives. Ineffectiveness is
measured based on actual levels of offsetting
and recognised in the income statement.
We enter into three types of hedge
accounting relationships.
Fair value hedge
- the gain or loss on the
hedging instrument and the hedged item
attributable to the hedged risk is recognised
in the income statement. Where the hedged
item is measured at amortised cost, the
balance sheet amount of the hedged item is
also adjusted.
Cash \ufb02ow hedge
- the effective portion of the
designated hedge relationship is recognised in
other comprehensive income and the
ineffective portion in the income statement.
When the hedged item (forecasted cash
\ufb02ows) results in the recognition of a \ufb01nancial
asset or \ufb01nancial liability, the cumulative gain
or loss is reclassi\ufb01ed from equity to the
income statement in the same periods in
which the hedged forecasted cash \ufb02ows
affect the income statement.
Hedge of net investment in a foreign
operation
-
in the hedge of a net investment
in a foreign operation, the effective portion of
the designated hedge relationship is
recognised in other comprehensive income.
Any ineffective portion is recognised in pro\ufb01t
or loss. Non-derivative \ufb01nancial liabilities as
well as derivatives may be designated as a
hedging instrument in a net investment
hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge
no longer meets the criteria for hedge
accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or
cash \ufb02ows attributable to the hedged risk,
consistent with the documented risk
management strategy; the hedging
instrument expires or is sold, terminated or
exercised; or if hedge designation is revoked.
For fair value hedging any cumulative
adjustment is amortised to the income
statement over the life of the hedged item.
Where the hedged item is no longer on the
balance sheet the adjustment to the hedged
item is reported in the income statement. For
cash \ufb02ow hedging the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement when the hedged cash
\ufb02ows occur or, if the forecast transaction
results in the recognition of a \ufb01nancial asset
or \ufb01nancial liability, when the hedged forecast
cash \ufb02ows affect the income statement.
Where a forecast transaction is no longer
expected to occur, the cumulative unrealised
gain or loss is reclassi\ufb01ed from equity to the
income statement immediately.
For net investment hedging on disposal or
partial disposal of a foreign operation, the
amount accumulated in equity is reclassi\ufb01ed
from equity to the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00269": { "value": "3.12. Provisions
We recognise a provision for a present
obligation resulting from a past event when it
is more likely than not that we will be
required to pay to settle the obligation and
the amount of the obligation can be
estimated reliably.
Provision is made for restructuring costs,
including the costs of redundancy, when we
have a constructive obligation. An obligation
exists when we have a detailed formal plan
for the restructuring and have raised a valid
expectation in those affected either by
starting to implement the plan or by
announcing its main features.
We recognise any onerous cost of the present
obligation under a contract as a provision. An
onerous cost is the unavoidable cost of
meeting our contractual obligations that
exceed the expected economic bene\ufb01ts.
When we intend to vacate a leasehold
property or right of use asset, the asset
would be tested for impairment and a
provision may be recognised for the ancillary
contractual occupancy costs.20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).
Provisions for liabilities and charges
\u00a0 \u00a0
Litigation and
\u00a0
Commitments
\u00a0 \u00a0
\u00a0
Customer redress
other regulatory
Property
and guarantees
Other (1)
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
420
128
90
55
171
864
Expected credit loss impairment release
-
-
-
3
-
3
Currency translation and other movements
1
(7)
-
-
3
(3)
Charge to income statement
78
39
26
-
220
363
Release to income statement
(42)
(50)
(24)
-
(46)
(162)
Provisions utilised
(175)
(46)
(19)
-
(206)
(446)
At 31 December 2025
282
64
73
58
142
619
\n
(1)
Other materially comprises provisions for restructuring costs and provision for
Bank of England Levy.
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 out\ufb02ow of economic bene\ufb01t is probable and the out\ufb02ow can
be estimated reliably. Any difference between the \ufb01nal 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 3.12.
Background information on all material provisions is given in Note 25
. ", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00629": { "value": "3.12. Provisions
We recognise a provision for a present
obligation resulting from a past event when it
is more likely than not that we will be
required to pay to settle the obligation and
the amount of the obligation can be
estimated reliably.
Provision is made for restructuring costs,
including the costs of redundancy, when we
have a constructive obligation. An obligation
exists when we have a detailed formal plan
for the restructuring and have raised a valid
expectation in those affected either by
starting to implement the plan or by
announcing its main features.
We recognise any onerous cost of the present
obligation under a contract as a provision. An
onerous cost is the unavoidable cost of
meeting our contractual obligations that
exceed the expected economic bene\ufb01ts.
When we intend to vacate a leasehold
property or right of use asset, the asset
would be tested for impairment and a
provision may be recognised for the ancillary
contractual occupancy costs. 20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).
Provisions for liabilities and charges
\u00a0 \u00a0
Litigation and
\u00a0
Commitments
\u00a0 \u00a0
\u00a0
Customer redress
other regulatory
Property
and guarantees
Other (1)
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
420
128
90
55
171
864
Expected credit loss impairment release
-
-
-
3
-
3
Currency translation and other movements
1
(7)
-
-
3
(3)
Charge to income statement
78
39
26
-
220
363
Release to income statement
(42)
(50)
(24)
-
(46)
(162)
Provisions utilised
(175)
(46)
(19)
-
(206)
(446)
At 31 December 2025
282
64
73
58
142
619
\n
(1)
Other materially comprises provisions for restructuring costs and provision for
Bank of England Levy.
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 out\ufb02ow of economic bene\ufb01t is probable and the out\ufb02ow can
be estimated reliably. Any difference between the \ufb01nal 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 3.12.
Background information on all material provisions is given in Note 25
. 25 Memorandum items
Contingent liabilities and commitments
NatWest Group provides its customers with a variety of services to support their businesses,
such as guarantees. These are reported as commitments.
Contingent liabilities are possible
obligations dependent on a future event or present obligations which are either not
probable or cannot be measured reliably.
The amounts shown in the table below are intended only to provide an indication of the volume of
business outstanding at 31 December 2025. Although NatWest Group is exposed to credit risk in
the event of a customer\u2019s failure to meet its obligations, the amounts shown do not, and are not
intended to, provide any indication of NatWest Group's expectation of future losses.
2025
2024
\u00a3m
\u00a3m
Contingent liabilities and commitments
Guarantees
2,810
3,060
Other contingent liabilities
1,548
1,496
Standby facilities, credit lines and other commitments
142,765
135,405
Total
147,123
139,961
Banking commitments and contingent obligations, which have been entered into on behalf of
customers and for which there are corresponding obligations from customers, are not included in
assets and liabilities. NatWest Group's maximum exposure to credit loss, in the event of its
obligation crystallising and all counterclaims, collateral or security proving valueless, is
represented by the contractual nominal amount of these instruments included in the table above.
These commitments and contingent obligations are subject to NatWest Group's normal credit
approval processes.
Guarantees
\u2013 NatWest Group gives guarantees on behalf of customers. A \ufb01nancial guarantee
represents an irrevocable undertaking that NatWest Group will meet a customer's speci\ufb01ed
obligations to a third party if the customer fails to do so. The maximum amount that NatWest
Group could be required to pay under a guarantee is its principal amount as disclosed in the table
above. NatWest Group expects most guarantees it provides to expire unused.
Other contingent liabilities
- these include standby letters of credit, supporting customer debt
issues and contingent liabilities relating to customer trading activities such as those arising from
performance and customs bonds, warranties and indemnities.
Standby facilities and credit lines
- under a loan commitment, NatWest Group agrees to make
funds available to a customer in the future. Loan commitments, which are usually for a speci\ufb01ed
term, may be unconditionally cancellable or may persist, provided all conditions in the loan facility
are satis\ufb01ed or waived. Commitments to lend include commercial standby facilities and credit
lines, liquidity facilities to commercial paper conduits and unutilised overdraft facilities.
Other commitments
- these include documentary credits, which are commercial letters of credit
providing for payment by NatWest Group to a named bene\ufb01ciary against presentation of speci\ufb01ed
documents, forward asset purchases, forward deposits placed and undrawn note issuance and
revolving underwriting facilities, and other short-term trade related transactions.
Contractual obligations for future expenditure not provided for in the accounts
The following table shows contractual obligations for future expenditure not provided for in the
accounts at the year end.
2025
2024
\u00a3m
\u00a3m
Capital expenditure on property, plant and equipment
12
14
Contracts to purchase goods or services
(1)
1,188
1,160
1,200
1,174
(1)
Of which due within 1 year: \u00a3477 million (2024 \u2013 \u00a3356 million).
Trustee and other \ufb01duciary activities
In its capacity as trustee or other \ufb01duciary role, NatWest 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 NatWest Group's \ufb01nancial statements. NatWest Group earned fee income of
\u00a3339 million (2024 - \u00a3302 million; 2023 - \u00a3264 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 \ufb01nancial services \ufb01rms, pays compensation if a \ufb01rm 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 \ufb01rm 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 \ufb01nancial year it ceased to be a participant in the scheme.
Litigation and regulatory matters
NatWest Group plc and certain members of
NatWest 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.
NatWest Group recognises a provision for a
liability in relation to these Matters when it is
probable that an out\ufb02ow of economic bene\ufb01ts
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
NatWest Group\u2019s 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.
NatWest Group cannot predict if, how, or
when such claims will be resolved or what
the eventual settlement, damages, \ufb01ne,
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 NatWest 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 NatWest 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 out\ufb02ows 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 out\ufb02ow in respect of any
Matter may ultimately prove to be
substantially greater than, or less than, the
aggregate provision, if any, that NatWest
Group has recognised in respect of such
Matter. Where a reliable estimate of the
economic out\ufb02ow cannot be reasonably
made, no provision has been recognised.
NatWest Group expects that in future periods,
additional provisions and economic out\ufb02ows
relating to Matters that may or may not be
currently known by NatWest Group will be
necessary, in amounts that are expected to
be substantial in some instances. Refer to
Note 20 for information on material
provisions.
Matters which are, or could be, material,
either individually or in aggregate, having
regard to NatWest Group, considered as a
whole, in which NatWest 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 NatWest Group\u2019s litigation and regulatory
matters (including the Matters), refer to the
Risk Factor relating to legal, regulatory and
governmental actions and investigations set
out on pages 417 to 419.
Litigation
London Interbank Offered Rate (LIBOR)
and other rates litigation
NatWest Group plc and certain other
members of NatWest Group, including NWM
Plc, are defendants in a number of claims
pending in the United States District Court for
the Southern District of New York (SDNY)
with respect to the setting of USD LIBOR. The
complainants allege that certain members of
NatWest Group and other panel banks
violated various federal laws, including the US
commodities and antitrust laws, and state
statutory and common law, as well as
contracts, by manipulating LIBOR and prices
of LIBOR-based derivatives in various
markets through various means.
The co-ordinated proceeding in the SDNY
relating to USD LIBOR now includes one
remaining class action, which is on behalf of
persons who purchased LIBOR-linked
instruments from defendants and bonds
issued by defendants, as well as two non-
class actions.
On 25 September 2025, the SDNY granted
summary judgment to the defendants on the
issue of liability and dismissed all claims in
both the class action and the non-class
actions. The decision is being appealed in the
United States Court of Appeals for the
Second Circuit (US Court of Appeals).
In addition to the USD LIBOR cases described
above, there is a class action relating to
derivatives allegedly tied to JPY LIBOR and
Euroyen TIBOR, which was dismissed by the
SDNY in relation to NWM Plc and other
NatWest Group companies in September
2021. That dismissal is now the subject of an
appeal to the US Court of Appeals.
Two other IBOR-related class actions
involving NWM Plc, concerning alleged
manipulation of Euribor and Pound Sterling
LIBOR, were previously dismissed by the
SDNY for various reasons.
On 22 August 2025, the US Court of Appeals
reversed the SDNY\u2019s decision in the Euribor
case, reinstating claims against NWM plc.
That case has therefore returned to the
SDNY for further proceedings.
On 15 September 2025, the US Court of
Appeals af\ufb01rmed the SDNY\u2019s dismissal of the
Pound Sterling LIBOR case.
Foreign exchange litigation
NatWest Group plc, NWM Plc and/or NWMSI
are defendants in several cases relating to
NWM Plc\u2019s foreign exchange (FX) business.
In May 2019, a cartel class action was \ufb01led in
\n
the Federal Court of Australia against NWM
\n
Plc and four other banks on behalf of persons
\n
who bought or sold currency through FX
\n
spots or forwards between 1 January 2008
\n
and 15 October 2013 with a total transaction
\n
value exceeding AUD 0.5 million. The claimant
\n
has alleged that the banks, including NWM
\n
Plc, contravened Australian competition law
\n
by sharing information, coordinating conduct,
\n
widening spreads and manipulating FX rates
\n
for certain currency pairs during this period.
\n
NatWest Group plc and NWMSI have been
\n
named in the action as \u2018other cartel
\n
participants\u2019 but are not respondents.
\n
In May 2025, NWM Plc executed an
\n
agreement to settle the claim in the Federal
\n
Court of Australia, which the court approved
\n
in August 2025. The settlement amount is
\n
covered in full by an existing provision.
\n
In July and December 2019, two separate
\n
applications seeking opt-out collective
\n
proceedings orders were \ufb01led in the UK
\n
Competition Appeal Tribunal (CAT) against
\n
NatWest Group plc, NWM Plc and other
\n
banks. Both applications were brought on
\n
behalf of persons who, between 18
\n
December 2007 and 31 January 2013,
\n
entered into a relevant FX spot or outright
\n
forward transaction in the European
\n
Economic Area with a relevant \ufb01nancial
\n
institution or on an electronic communications
\n
network.
\n
In March 2022, the CAT declined to certify
\n
either application as collective proceedings on
\n
an opt-out basis.
This decision was appealed
\n
by the applicants and was the subject of an
\n
application for judicial review.
\n
The CAT, in its judgment, allowed the
\n
applicants three months in which to
\n
reformulate their claims as opt-in claims.
\n
In its amended judgment in November 2023,
\n
the Court of Appeal allowed the appeal and
\n
decided that the claims should proceed on an
\n
opt-out basis. Separately, the court
\n
determined which of the two competing
\n
applicants can proceed as class
\n
representative and dismissed the application
\n
for judicial review of the CAT\u2019s decision. The
\n
other applicant has discontinued its claim and
\n
withdrawn from the proceedings. The banks
\n
sought permission to appeal the Court of
\n
Appeal decision directly to the UK Supreme
\n
Court, which was granted in April 2024. The
\n
appeal was heard in April 2025.
\n
In December 2025, the UK Supreme Court
\n
reinstated the CAT\u2019s decision to refuse the
\n
application for a collective proceedings order
\n
on an opt-out basis.
\n
Two motions to certify FX-related class
\n
actions were \ufb01led in the Tel Aviv District
\n
Court in Israel in September and October
\n
2018 and were subsequently consolidated
\n
into one motion. The consolidated motion to
\n
certify, which names The Royal Bank of
\n
Scotland plc (now NWM Plc) and several
\n
other banks as defendants, was served on
\n
NWM Plc in May 2020.
\n
The applicants sought the court\u2019s permission
\n
to amend their motions to certify the class
\n
actions. NWM Plc \ufb01led a motion challenging
\n
the permission granted by the court for the
\n
applicants to serve the consolidated motion
\n
outside the Israeli jurisdiction. That NWM Plc
\n
motion remains pending. In February 2024,
\n
NWM Plc executed an agreement to settle
\n
the claim, subject to court approval.
\n
The settlement amount is covered in full by
\n
an existing provision.
\n
In December 2021, a summons was served in
\n
the Netherlands against NatWest Group plc,
\n
NWM Plc and NWM N.V. by Stichting FX
\n
Claims on behalf of a number of parties,
\n
seeking declarations from the court
\n
concerning liability for anti-competitive FX
\n
market conduct described in decisions of the
\n
European Commission (EC) of 16 May 2019,
\n
along with unspeci\ufb01ed damages. The
\n
claimant amended its claim to also refer to a
\n
2 December 2021 decision by the EC, which
\n
described anti-competitive FX market
\n
conduct. NatWest Group plc, NWM Plc and
\n
other defendants contested the jurisdiction of
\n
the Dutch court.
\n
In March 2023, the district court in
\n
Amsterdam accepted that it has jurisdiction
\n
to hear claims against NWM N.V. but refused
\n
jurisdiction to hear any claims against the
\n
other defendant banks (including NatWest
\n
Group plc and NWM Plc) brought on behalf of
\n
the parties represented by the claimant that
\n
are domiciled outside of the Netherlands. The
\n
claimant is appealing that decision.
\n
The defendant banks have brought cross-
\n
appeals which seek a ruling that the Dutch
\n
court has no jurisdiction to hear any claims
\n
against the defendant banks domiciled
\n
outside of the Netherlands, irrespective of
\n
whether the claim has been brought on
\n
behalf of a party represented by the claimant
\n
that is domiciled within or outside of the
\n
Netherlands. The Amsterdam Court of Appeal
\n
has stayed these appeal proceedings until the
\n
Court of Justice of the European Union has
\n
answered preliminary questions that have
\n
been referred to it in another matter.
\n
In September 2023, a second summons was
\n
served by Stichting FX Claims on NatWest
\n
Group plc, NWM Plc and NWM N.V., on behalf
\n
of a new group of parties. The claimant seeks
\n
declarations from the district court in
\n
Amsterdam concerning liability for anti-
\n
competitive FX market conduct described in
\n
the above referenced decisions of the EC of
\n
16 May 2019 and 2 December 2021, along
\n
with unspeci\ufb01ed damages. NatWest Group
\n
plc, NWM Plc and other defendants are
\n
contesting the Dutch court's jurisdiction. The
\n
district court has stayed the proceedings
\n
pending judgment in the above-mentioned
\n
appeals.
\n
In January 2025, a third summons was
\n
served by Stichting FX Claims on NatWest
\n
Group plc, NWM Plc and NWM N.V., on behalf
\n
of another new group of parties. The
\n
claimant seeks similar declarations from the
\n
district court in Amsterdam to those being
\n
sought in the above-mentioned claims, along
\n
with unspeci\ufb01ed damages.
\n
NatWest Group plc, NWM Plc and other
\n
defendants are contesting the Dutch court's
\n
jurisdiction. The district court has stayed the
\n
proceedings pending judgment in the above-
\n
mentioned appeals.
\n
Certain other foreign exchange transaction
\n
related claims have been or may be
\n
threatened. NatWest Group cannot predict
\n
whether all or any of these claims will be
\n
pursued.
Swaps antitrust litigation
\n
NWM Plc and other members of NatWest
\n
Group, including NatWest Group plc, as well
\n
as a number of other interest rate swap
\n
dealers, are defendants in several cases
\n
pending in the SDNY alleging violations of the
\n
US antitrust laws in the market for interest
\n
rate swaps. Three swap execution facilities
\n
(TeraExchange, Javelin, and trueEx) allege
\n
that they would have successfully established
\n
exchange-like trading of interest rate swaps if
\n
the defendants had not unlawfully conspired
\n
to prevent that from happening through
\n
boycotts and other means. Discovery is
\n
complete though expert discovery is ongoing.
\n
In June 2021, a class action antitrust
\n
complaint was \ufb01led against a number of
\n
credit default swap dealers in New Mexico
\n
federal court on behalf of persons who, from
\n
2005 onwards, settled credit default swaps in
\n
the United States by reference to the ISDA
\n
credit default swap auction protocol. The
\n
complaint alleges that the defendants
\n
conspired to manipulate that benchmark
\n
through various means in violation of the
\n
antitrust laws and the Commodity Exchange
\n
Act.
\n
In May 2025, the US Court of Appeals
\n
af\ufb01rmed a January 2024 decision by the
\n
SDNY which barred the plaintiffs in the New
\n
Mexico case from pursuing claims based on
\n
conduct occurring before 30 June 2014 on
\n
the ground that such claims were
\n
extinguished by a 2015 settlement agreement
\n
that resolved a prior class action relating to
\n
credit default swaps.
\n
The case in New Mexico (which had been
\n
stayed pending the appeal of the SDNY\u2019s
\n
decision) has now resumed. The defendants
\n
have \ufb01led a motion to dismiss, which is
\n
pending.
\n
Odd lot corporate bond trading antitrust
\n
litigation
\n
On 2 September 2025, the SDNY dismissed
\n
the class action antitrust complaint alleging
\n
that, from August 2006 onwards, various
\n
securities dealers, including NWMSI,
\n
conspired arti\ufb01cially to widen spreads for odd
\n
lots of corporate bonds bought or sold in the
\n
United States secondary market and to
\n
boycott electronic trading platforms that
\n
would have allegedly promoted pricing
\n
competition in the market for such bonds.
\n
The plaintiffs did not appeal the SDNY\u2019s
\n
decision and the case is now closed.
\n
Spoo\ufb01ng litigation
\n
In December 2021, three substantially similar
\n
class actions complaints were \ufb01led in federal
\n
court in the United States against NWM Plc
\n
and NWMSI alleging Commodity Exchange
\n
Act and common law unjust enrichment
\n
claims arising from manipulative trading
\n
known as spoo\ufb01ng. The complaints refer to
\n
NWM Plc\u2019s December 2021 spoo\ufb01ng-related
\n
guilty plea (described below under \u201cUS
\n
investigations relating to \ufb01xed-income
\n
securities\u201d) and purport to assert claims on
\n
behalf of those who transacted in US
\n
Treasury securities and futures and options
\n
on US Treasury securities between 2008 and
\n
2018.
\n
In July 2022, the defendants \ufb01led a motion to
\n
dismiss these claims, which have been
\n
consolidated into one matter in the United
\n
States District Court for the Northern District
\n
of Illinois. The motion to dismiss remains
\n
pending.
\n
Madoff
\n
NWM N.V. was named as a defendant in two
\n
actions \ufb01led by the trustee for the bankrupt
\n
estates of Bernard L. Madoff and Bernard L.
\n
Madoff Investment Securities LLC, in
\n
bankruptcy court in New York, which
\n
together seek to clawback more than
\n
US$300 million (plus pre-judgment interest)
\n
that NWM N.V. allegedly received from certain
\n
Madoff feeder funds and certain swap
\n
counterparties.
\n
The claims were previously dismissed, but as
\n
a result of an August 2021 decision by the US
\n
Court of Appeals, they are now proceeding in
\n
the discovery phase in the bankruptcy court,
\n
where they have been consolidated into one
\n
action.
\n
Offshoring VAT assessments
\n
HMRC, as part of an industry-wide review,
\n
issued protective tax assessments in 2018
\n
against NatWest Group plc totalling \u00a3143
\n
million relating to unpaid VAT in respect of the
\n
UK branches of two NatWest Group
\n
companies registered in India for the period
\n
from 1 January 2014 until 31 December 2017
\n
inclusive. NatWest Group formally requested
\n
reconsideration by HMRC of their
\n
assessments, and this process was completed
\n
in November 2020. HMRC upheld their
\n
original decision and, as a result, NatWest
\n
Group plc lodged an appeal with the Tax
\n
Tribunal and an application for judicial review
\n
with the High Court of Justice of England and
\n
Wales, both in December 2020.
\n
In order to lodge the appeal with the Tax
\n
Tribunal, NatWest Group plc was required to
\n
pay amounts totalling \u00a3153 million (including
\n
statutory interest) to HMRC in December
\n
2020 and May 2022. The appeal and the
\n
application for judicial review were previously
\n
stayed behind a separate case involving
\n
another bank.
\n
NatWest Group plc was informed in late 2024
\n
that the other bank had settled its case with
\n
HMRC by agreement.
NatWest Group plc is
\n
progressing its appeal before the Tax Tribunal
\n
in its own name. NatWest Group plc will also
\n
continue to review next steps relevant to the
\n
judicial review.
\n
The amount of \u00a3153 million continues to be
\n
recognised as an asset that NatWest Group
\n
plc expects to recover. Since 1 January 2018,
\n
NatWest Group plc has paid VAT on intra-
\n
group supplies from the India-registered
\n
NatWest Group companies.
\n
US Anti-Terrorism Act litigation
\n
NWM N.V. and certain other \ufb01nancial
\n
institutions are defendants in several actions
\n
\ufb01led by a number of US nationals (or their
\n
estates, survivors, or heirs), most of whom
\n
are, or were, US military personnel who were
\n
killed or injured in attacks in Iraq between
\n
2003 and 2011.
\n
NWM Plc is also a defendant in some of these
\n
cases.
\n
According to the plaintiffs\u2019 allegations, the
\n
defendants are liable for damages arising
\n
from the attacks because they allegedly
\n
conspired with and/or aided and abetted Iran
\n
and certain Iranian banks to assist Iran in
\n
transferring money to Hezbollah and the Iraqi
\n
terror cells that committed the attacks, in
\n
violation of the US Anti-Terrorism Act, by
\n
agreeing to engage in \u2018stripping\u2019 of
\n
transactions initiated by the Iranian banks so
\n
that the Iranian nexus to the transactions
\n
would not be detected.
The \ufb01rst of these actions, alleging conspiracy
\n
claims but not aiding and abetting claims,
\n
was \ufb01led in the United States District Court
\n
for the Eastern District of New York in
\n
November 2014. In September 2019, the
\n
district court dismissed the case, \ufb01nding that
\n
the claims were de\ufb01cient for several reasons,
\n
including lack of suf\ufb01cient allegations as to
\n
the alleged conspiracy and causation. In
\n
January 2023, the US Court of Appeals
\n
af\ufb01rmed the district court\u2019s dismissal of this
\n
case.
\n
On 30 September 2025, the district court
\n
denied a motion by the plaintiffs to re-open
\n
the case to assert aiding and abetting claims
\n
that they previously did not assert. Another
\n
action, \ufb01led in the SDNY in 2017, which
\n
asserted both conspiracy and aiding and
\n
abetting claims, was dismissed by the SDNY
\n
in March 2019 on similar grounds as the \ufb01rst
\n
case, but remains subject to appeal to the US
\n
Court of Appeals.
\n
Other follow-on actions that are substantially
\n
similar to those described above are pending
\n
in the same courts.
\n
1MDB litigation
\n
A Malaysian court claim was served in
\n
Switzerland in November 2022 by 1MDB, a
\n
sovereign wealth fund, in which Coutts & Co
\n
Ltd was named, along with six others, as a
\n
defendant in respect of losses allegedly
\n
incurred by 1MDB.
\n
It is claimed that Coutts & Co Ltd is liable as
\n
a constructive trustee for having dishonestly
\n
assisted the directors of 1MDB in the breach
\n
of their \ufb01duciary duties by failing (amongst
\n
other alleged claims) to undertake due
\n
diligence in relation to a customer of Coutts &
\n
Co Ltd, through which funds totalling c.US$1
\n
billion were received and paid out between
\n
2009 and 2011. 1MDB sought the return of
\n
that amount plus interest.
\n
Coutts & Co Ltd \ufb01led an application in
\n
January 2023 challenging the validity of
\n
service and the Malaysian court\u2019s jurisdiction
\n
to hear the claim, and a hearing took place in
\n
February 2024. In March 2024, the court
\n
granted that application. 1MDB appealed that
\n
decision and a prior decision by the court not
\n
to allow them to discontinue their claim. Both
\n
appeals were scheduled to be heard in
\n
November 2025 but did not progress as
\n
1MDB withdrew their appeal and
\n
discontinued the claim.
\n
Coutts & Co Ltd (a subsidiary of RBS
\n
Netherlands Holdings B.V., which in turn is a
\n
subsidiary of NWM Plc) is a company
\n
registered in Switzerland and is in wind-down
\n
following the announced sale of its business
\n
assets in 2015.
\n
Oracle Securities Litigation
\n
On 14 January 2026, a class action complaint
\n
was \ufb01led in New York state court against
\n
Oracle Corporation and the underwriters of a
\n
September 2025 bond offering by Oracle,
\n
including NWMSI.
The complaint alleges that
\n
the offering documents for the bonds were
\n
materially misleading because they failed to
\n
disclose that, at the time of the bond offering,
\n
Oracle was already planning to further
\n
increase its debt to fund its Arti\ufb01cial
\n
Intelligence infrastructure expansion.
\n
The complaint seeks damages under the U.S.
\n
Securities Act of 1933 (the \u2018Securities Act\u2019),
\n
as amended, on behalf of those who
\n
purchased Oracle\u2019s bonds. In connection with
\n
the bond offering, Oracle agreed to indemnify
\n
the underwriters against certain potential
\n
liabilities, including disclosure-based liability
\n
under the Securities Act.
\n
Tandanor Litigation in Argentina
\n
In October 2012, a claim was \ufb01led in the
\n
District Court of Buenos Aires by \u2018Argentina
\n
Talleres Navales D\u00e1rsena Norte Sociedad
\n
An\u00f3nima Comercial, Industrial y Naviera\u2019
\n
(\u201cTandanor\u201d) (a naval repair business) against
\n
what is now the Representative Of\ufb01ce of The
\n
Royal Bank of Scotland NV, Argentine Branch
\n
(in liquidation) (the \u201cRepresentative Of\ufb01ce\u201d)
\n
and eleven private individuals. (The
\n
Representative Of\ufb01ce inherited the claim from
\n
Banco Holand\u00e9s Unido, Argentine
\n
Branch.)
The claim, which was unquanti\ufb01ed,
\n
sought damages for alleged fraudulent
\n
conduct during Tandanor\u2019s privatisation,
\n
which concluded in 1993. The Representative
\n
Of\ufb01ce\u2019s participation in the privatisation was
\n
2.9%. The Argentine Ministry of Defence
\n
joined Tandanor as a plaintiff in 2014.
\n
The claim was dismissed on limitation
\n
grounds in 2018, and the plaintiffs were
\n
unsuccessful in subsequent appeals. In
\n
November 2024, however, the Argentine
\n
Supreme Court set the appealed judgments
\n
aside and, in June 2025, the Argentine
\n
Federal Court of Appeal returned the case to
\n
the Argentine Federal District Court for
\n
further consideration. In
December 2025, the
\n
plaintiffs \ufb01led an update quantifying damages
\n
at USD 1.1 billion. The Representative Of\ufb01ce
\n
continues to defend the claim and has
\n
requested a hearing.
\n
Regulatory matters (including
\n
investigations and customer redress
\n
programmes)
\n
NatWest Group\u2019s businesses and \ufb01nancial
\n
condition can be affected by the actions of
\n
various governmental and regulatory
\n
authorities in the UK, the US, the EU and
\n
elsewhere. NatWest Group has engaged, and
\n
will continue to engage, in discussions with
\n
relevant governmental and regulatory
\n
authorities, including in the UK, the US, the
\n
EU and elsewhere, on an ongoing and regular
\n
basis, and in response to informal and formal
\n
inquiries or investigations, regarding
\n
operational, systems and control evaluations
\n
and issues including those related to
\n
compliance with applicable laws and
\n
regulations, including consumer protection,
\n
investment advice, business conduct,
\n
competition/anti-trust, VAT recovery, anti-
\n
bribery, anti-money laundering and sanctions
\n
regimes. NatWest Group expects government
\n
and regulatory intervention in \ufb01nancial
\n
services to be high for the foreseeable future,
\n
including increased scrutiny from competition
\n
and other regulators in the retail and SME
\n
business sectors.
\n
Any matters discussed or identi\ufb01ed during
\n
such discussions and inquiries may result in,
\n
among other things, further inquiry or
\n
investigation, other action being taken by
\n
governmental and regulatory authorities,
\n
increased costs being incurred by NatWest
\n
Group, remediation of systems and controls,
\n
public or private censure, restriction of
\n
NatWest Group\u2019s business activities and/or
\n
\ufb01nes. Any of the events or circumstances
\n
mentioned in this paragraph or below could
\n
have a material adverse effect on NatWest
\n
Group, its business, authorisations and
\n
licences, reputation, results of operations or
\n
the price of securities issued by it, or lead to
\n
material additional provisions being taken.
NatWest Group is co-operating fully with the
matters described below.
US investigations relating to \ufb01xed-income
securities
In December 2021, NWM Plc pled guilty in
the United States District Court for the
District of Connecticut to one count of wire
fraud and one count of securities fraud in
connection with historical spoo\ufb01ng conduct
by former employees in US Treasuries
markets between January 2008 and May
2014 and, separately, during approximately
three months in 2018. The 2018 trading
occurred during the term of a non-
prosecution agreement (NPA) between
NWMSI and the United States Attorney's
Of\ufb01ce for the District of Connecticut (USAO
CT), under which non-prosecution was
conditioned on NWMSI and af\ufb01liated
companies not engaging in criminal conduct
during the term of the NPA. The relevant
trading in 2018 was conducted by two NWM
traders in Singapore and breached that NPA.
The plea agreement reached with the US
Department of Justice (DOJ) and the USAO
CT resolved both the spoo\ufb01ng conduct and
the breach of the NPA.
The DOJ and USAO CT paused the
monitorship in May 2025 and, following a
review, determined that a monitorship was no
longer necessary as a result of NWM\u2019s
notable progress in strengthening its
compliance programme, certain of NWM\u2019s
remedial improvements, internal controls, and
the status of implementation of Monitor
recommendations, and that reporting by
NWM to the DOJ and USAO CT on its
continued compliance programme progress
provided an appropriate degree of
oversight.
The court approved the agreement
and extended NWM\u2019s obligations under the
plea agreement and probation until
December 2026.
In the event that NWM Plc does not meet its
obligations to the DOJ, this may lead to
adverse consequences such as increased
costs, \ufb01ndings that NWM Plc violated its
probation term, and possible re-sentencing,
amongst other consequences. Other material
adverse collateral consequences may occur
as a result of this matter, as further described
in the Risk Factor relating to legal, regulatory
and governmental actions and investigations
set out on pages 417 to 419 of the NatWest
Group plc Annual Report and Accounts 2025.
Investment advice review
In October 2019, the FCA noti\ufb01ed 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\u2019s 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\u2019s review has concluded
and, after discussion with the FCA, NatWest
Group is undertaking additional review /
remediation work, which is expected to
conclude in H1 2026.
Review and investigation of treatment of
tracker mortgage customers in Ulster
Bank Ireland DAC
In December 2015, correspondence was
received from the Central Bank of Ireland
setting out an industry examination
framework in respect of the sale of tracker
mortgages from approximately 2001 until the
end of 2015.
The redress and compensation process has
now largely concluded, although a small
number of cases remain outstanding relating
to uncontactable customers.
Ulydien (formerly UBIDAC) customers have
lodged tracker mortgage complaints with the
Financial Services and Pensions Ombudsman
(FSPO). UBIDAC challenged three FSPO
adjudications in the Irish High Court. In June
2023, the High Court found in favour of the
FSPO in all matters. UBIDAC appealed that
decision to the Court of Appeal. In September
2024, the Court of Appeal allowed UBIDAC\u2019s
appeal and set aside certain \ufb01ndings of the
FSPO. The Court of Appeal directed one
aspect of the FSPO decisions to be remitted
to the FSPO for its consideration following an
oral hearing.
Decisions are awaited from the FSPO in
respect of these cases.
Other customer remediation in Ulster Bank
Ireland DAC
Ulydien identi\ufb01ed other legacy issues leading
to the establishment of remediation
requirements, and progress is ongoing to
conclude activities.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00628": { "value": "3.12. Provisions
We recognise a provision for a present
obligation resulting from a past event when it
is more likely than not that we will be
required to pay to settle the obligation and
the amount of the obligation can be
estimated reliably.
Provision is made for restructuring costs,
including the costs of redundancy, when we
have a constructive obligation. An obligation
exists when we have a detailed formal plan
for the restructuring and have raised a valid
expectation in those affected either by
starting to implement the plan or by
announcing its main features.
We recognise any onerous cost of the present
obligation under a contract as a provision. An
onerous cost is the unavoidable cost of
meeting our contractual obligations that
exceed the expected economic bene\ufb01ts.
When we intend to vacate a leasehold
property or right of use asset, the asset
would be tested for impairment and a
provision may be recognised for the ancillary
contractual occupancy 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 out\ufb02ow of economic bene\ufb01t is probable and the out\ufb02ow can
be estimated reliably. Any difference between the \ufb01nal 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 3.12.
Background information on all material provisions is given in Note 25
.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00639": { "value": "3.13. Financial guarantee contracts
Under a \ufb01nancial guarantee contract, we, in
return for a fee, undertake to meet a
customer\u2019s obligations under the terms of a
debt instrument if the customer fails to do so.
A \ufb01nancial guarantee not designated as fair
value through pro\ufb01t or loss is recognised as a
liability; initially at fair value and subsequently
at the higher of its initial value less cumulative
amortisation and any provision under the
contract measured in accordance with our
ECL accounting policy. Amortisation is
calculated to recognise fees receivable in the
income statement over the period of the
guarantee. A separate asset is recognised in
respect of fees receivable for provision of the
\ufb01nancial guarantee.
Purchased \ufb01nancial guarantees are
considered to be integral, and fully adjust the
covered debt instrument expected credit loss
provision, only where the guarantee is
contemplated at the inception of the debt
instrument and is entered into within a
reasonable timeframe. Securitisations
In a securitisation, assets, or interests in a
pool of assets, are transferred, or the credit
risk is transferred via a derivative or \ufb01nancial
guarantee to a SE which then issues
liabilities to third party investors.
NatWest Group\u2019s involvement in client
securitisations takes a number of forms. It
may provide secured \ufb01nance to, or purchase
asset-backed notes from, client sponsored
SEs secured on assets transferred by the
client entity; purchase asset backed
securities issued by client sponsored SEs in
the primary or secondary markets; or
provide liquidity facilities to client sponsored
SEs. In addition, NatWest Group arranges or
acts as lead manager or placement agent in
client primary markets securitisations.
NatWest Group provides portfolio structured
derivative hedging solutions to clients.
NatWest Group undertakes own-asset
securitisations to transfer the credit risk on
portfolios of \ufb01nancial assets. In 2025 NatWest
Group transacted an own-asset RMBS via a
sponsored unconsolidated SE, resulting in
\u00a32.1 billion of residential mortgage assets
being derecognised from the NatWest Group
balance sheet.
Other credit risk transfer
securitisations
NatWest Group transfers credit risk on
originated loans and mortgages without the
transfer of assets to a SE. As part of this,
NatWest Group enters into credit derivative
and \ufb01nancial guarantee contracts with
consolidated SEs. At 31 December 2025,
debt securities in issue by such SEs (and held
by third parties) were \u00a31,663 million (2024 -
\u00a31,175 million). The associated loans and
mortgages at 31 December 2025 were
\u00a324,535 million (2024 - \u00a313,226 million). At
31 December, ECL in relation to non -
defaulted assets was reduced by \u00a343 million
(2024 - \u00a343 million) as a result of \ufb01nancial
guarantee contracts with consolidated SEs. Guarantees
\u2013 NatWest Group gives guarantees on behalf of customers. A \ufb01nancial guarantee
represents an irrevocable undertaking that NatWest Group will meet a customer's speci\ufb01ed
obligations to a third party if the customer fails to do so. The maximum amount that NatWest
Group could be required to pay under a guarantee is its principal amount as disclosed in the table
above. NatWest Group expects most guarantees it provides to expire unused. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00219": { "value": "4. Future accounting developments
International Financial Reporting
Standards
Effective 1 January 2026
\u2022
Amendments to the Classi\ufb01cation and
Measurement of Financial Instruments
(Amendments to IFRS 9 and IFRS 7 \u2013
Issued May 2024)
Effective 1 January 2027
\u2022
P
resentation and Disclosures in Financial
Statements (IFRS 18 \u2013 Issued April 2024)
\u2022
Subsidiaries without Public Accountability
(IFRS 19 \u2013 Issued May 2024)
We are assessing the effect of adopting the
accounting developments effective from 1
January 2027 on our \ufb01nancial statements and
have largely completed a similar assessment
for the Amendments to IFRS 9 and IFRS 7
effective from 1 January 2026. We do not
expect any to have a material impact on our
\ufb01nancial performance or position, although
IFRS18 may have an impact on presentation
and disclosure. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00622": { "value": "4. Future accounting developments
International Financial Reporting
Standards
Effective 1 January 2026
\u2022
Amendments to the Classi\ufb01cation and
Measurement of Financial Instruments
(Amendments to IFRS 9 and IFRS 7 \u2013
Issued May 2024)
Effective 1 January 2027
\u2022
P
resentation and Disclosures in Financial
Statements (IFRS 18 \u2013 Issued April 2024)
\u2022
Subsidiaries without Public Accountability
(IFRS 19 \u2013 Issued May 2024)
We are assessing the effect of adopting the
accounting developments effective from 1
January 2027 on our \ufb01nancial statements and
have largely completed a similar assessment
for the Amendments to IFRS 9 and IFRS 7
effective from 1 January 2026. We do not
expect any to have a material impact on our
\ufb01nancial performance or position, although
IFRS18 may have an impact on presentation
and disclosure. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00666": { "value": "There are three main categories of non-interest income: net fees and commissions, trading income, and other operating income.
Net fees and commissions is the difference between fees received from customers for services provided by NatWest Group, such as credit card annual fees, underwriting fees, payment services,
brokerage fees, trade \ufb01nance, investment management fees, trustee and \ufb01duciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer
incentives, loan administration, foreign currency transaction charges, and brokerage fees.
Trading income is earned from short-term \ufb01nancial assets and \ufb01nancial liabilities to either make a spread between purchase and sale price or held to take advantage of movements in prices and
yields.
Other operating income includes revenue from other operating activities which are not related to the principal activities of the company, such as: share of pro\ufb01t or loss of associates; operating lease
income; the pro\ufb01t or loss on the sale of a subsidiary or property, plant and equipment; pro\ufb01t or loss on own debt; and changes in the fair value of \ufb01nancial assets and liabilities designated at fair
value through pro\ufb01t or loss.
For accounting policy information refer to Accounting policies 3.1, 3.6, 3.8 and 3.11.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00228": { "value": "3 Operating expenses
Operating expenses are expenses NatWest Group incurs in the running of its business such as all staff costs (for example salaries, bonus awards, pension costs and social security costs),
premises and equipment costs that arise from the occupation of premises and the use of equipment, depreciation and amortisation and other administrative expenses.
For accounting policy information refer to Accounting policies 3.3, 3.4 and 3.5.
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Salaries
2,456
2,477
2,483
Bonus awards
(1)
479
411
353
Temporary and contract costs
162
162
199
Social security costs
418
371
352
Pension costs
338
311
313
- defined benefit schemes (Note 5)
93
86
122
- defined contribution schemes
245
225
191
Other
321
329
201
Staff costs
4,174
4,061
3,901
Premises and equipment
1,291
1,211
1,153
Bank levy
123
142
109
Depreciation and amortisation
(2)
1,154
1,058
934
Other administrative expenses
(3)
1,520
1,677
1,899
Administrative expenses
4,088
4,088
4,095
\u00a0
8,262
8,149
7,996
\n
(1)
Includes current year charge for amounts deferred from prior years. Refer to reconciliation of bonus awards to income statement
charge on page 309.
(2)
Includes depreciation of right of use assets of \u00a392 million (2024 - \u00a3103 million; 2023 - \u00a3104 million).
(3)
Includes litigation and conduct costs, net of amounts recovered. Refer to Note 20 for further details.
The average number of persons employed during the year, excluding temporary staff and
rounded to the nearest hundred, was 59,300 (2024 \u2013 60,700; 2023 \u2013 61,500). The average
number of temporary employees during the year, rounded to the nearest hundred, was 1,300
(2024 \u2013 1,400; 2023 \u2013 2,100).
The number of persons employed at 31 December 2025, excluding temporary staff and
rounded to the nearest hundred, by reportable segment, was as follows:
Continuing operations
2025
2024
2023
Retail Banking
12,200
13,000
14,300
Private Banking & Wealth Management
2,100
2,200
2,400
Commercial & Institutional
12,300
12,700
12,400
Central items & other
32,400
31,800
32,500
Total
59,000
59,700
61,600
UK
39,000
40,100
41,500
India
18,800
17,600
16,900
Poland
(1)
100
800
1,500
USA
300
300
300
Republic of Ireland
-
100
400
Rest of the World
800
800
1,000
Total
59,000
59,700
61,600
\n
(1)
Re\ufb02ecting closure of operations in Poland.
Share-based payments
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Award plan
Eligible employees
Nature of award
Vesting conditions (1)
Settlement
Sharesave
UK, Channel Islands, Gibraltar, Isle
Option to buy shares under
Continuing employment or leavers in certain circumstances
2026 to 2030
\u00a0
of Man, Poland and India.
employee savings plan
\u00a0 \u00a0
Deferred performance
All
Awards of ordinary shares
Continuing employment or leavers in certain circumstances
2026 to 2031
awards
\u00a0
and conditional shares
\u00a0 \u00a0
Long-term incentives
(2)
Senior employees
Awards of ordinary shares
Continuing employment or leavers in certain circumstances and/or
2026 to 2032
\u00a0 \u00a0
and conditional shares
satisfaction of the pre-vesting assessment and underpins
\u00a0
Sharing in Success
(
3)
All
Awards of ordinary shares
Future continuing employment and achievement of pre-de\ufb01ned
2026
\u00a0 \u00a0
and conditional shares
measures.
\u00a0
\n
(1)
All awards are subject to the discretion of Remuneration Committee.
(2)
Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment.
Existing Long-term incentives vest over 3 to 7 years.
(3)
In 2025 12.5 million shares at total value of \u00a360.5 million were granted and vested under Sharing in Success.
Sharesave
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Average
Shares
Average
Shares
Average
Shares
\u00a0
exercise
under
exercise
under
exercise
under
\u00a0
price
option
price
option
price
option
\u00a0
\u00a3
(million)
\u00a3
(million)
\u00a3
(million)
At 1 January
1.93
101
1.59
114
1.63
99
Granted
4.67
18
2.94
24
1.42
43
Exercised
1.82
(20)
1.52
(32)
1.44
(23)
Cancelled
1.99
(3)
1.60
(5)
1.72
(5)
At 31 December
2.45
96
1.93
101
1.59
114
\n
The fair value of Sharesave options granted in 2025 was determined using a pricing model that
included: expected volatility of share price determined at the grant date based on historical share
price volatility over a period of up to \ufb01ve years; expected option lives that equal the vesting
period; estimated dividend yield on equity shares; and risk-free interest rates determined from
UK gilts with terms matching the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the
average market price over the \ufb01ve trading days (three trading days for Sharesave) preceding
grant date. When estimating the fair value of the award, the number of shares granted and the
prevailing market price as de\ufb01ned on page 155 are used.
The fair value of the award is
recognised as services are provided by employees over the vesting period.
Options are exercisable within six months of vesting; 5.1 million options were exercisable at 31
December 2025 (2024 \u2013 8.9 million; 2023 \u2013 19.0 million). The weighted average share price at
the date of exercise of options was \u00a36.39 (2024 - \u00a34.03; 2023 - \u00a32.20). At 31 December 2025,
exercise prices ranged from \u00a31.42 to \u00a34.67 (2024 - \u00a31.42 to \u00a32.94; 2023 - \u00a31.12 to \u00a31.89) and
the remaining average contractual life was 2.11 years (2024 \u2013 2.35 years; 2023 \u2013 2.25 years).
The fair value of options granted in 2025 was \u00a329.8 million (2024 - \u00a328.3 million; 2023 - \u00a327.3
million).
Deferred performance awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
66
30
76
35
93
46
Granted
60
14
50
23
52
20
Forfeited
(4)
(1)
(3)
(1)
(2)
(1)
Vested
(52)
(18)
(57)
(27)
(67)
(30)
At 31 December
70
25
66
30
76
35
\n
The awards granted in 2025 vest in equal tranches on the anniversary of the award,
predominantly over three years.
Long-term incentives
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
40
19
49
23
49
23
Granted
18
4
9
5
11
5
Vested/exercised
(13)
(5)
(11)
(5)
(10)
(4)
Lapsed
(4)
(1)
(7)
(4)
(1)
(1)
At 31 December
41
17
40
19
49
23
\n
The market value of awards vested/exercised in 2025 was \u00a334.4 million (2024 - \u00a319.3 million;
2023 - \u00a39.5 million).
Bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Change
\u00a0
\u00a3m
\u00a3m
%
Deferred cash awards
(1)
438
387
13%
Deferred share awards
58
61
(5%)
Total bonus awards
(2)
496
448
11%
Bonus awards as a % of operating profit before tax and bonus awards
6%
7%
\u00a0
Proportion of bonus awards that are deferred
\u00a0 \u00a0 \u00a0
- deferred cash awards
88%
86%
\u00a0
- deferred share awards
12%
14%
\u00a0
\n
Reconciliation of bonus awards to income statement charge
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Bonus awarded
496
448
356
Less: deferral of charge for amounts awarded for current year
(155)
(144)
(114)
Income statement charge for amounts awarded in current year
341
304
242
Add: current year charge for amounts deferred from prior years
144
109
115
Less: forfeiture of amounts deferred from prior years
(6)
(2)
(4)
Income statement charge for amounts deferred from prior years
138
107
111
Income statement charge for bonus awards
(2)
479
411
353
\n
Year in which income statement charge is expected to be taken for deferred bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Actual
Expected
\u00a0
2023
2024
2025
2026
2027 and beyond
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bonus awards deferred from 2023 and earlier
115
109
22
7
3
Bonus awards deferred from 2024
-
-
122
10
7
Less: forfeiture of amounts deferred from prior years
(4)
(2)
(6)
-
-
Bonus awards deferred for 2025
-
-
-
137
18
\u00a0
111
107
138
154
28
\n
(1)
Includes March cash awards which are limited to \u00a32,000 for all employees and
are paid in the March following the balance sheet date.
(2)
Excludes other performance-related compensation.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00230": { "value": "3 Operating expenses
Operating expenses are expenses NatWest Group incurs in the running of its business such as all staff costs (for example salaries, bonus awards, pension costs and social security costs),
premises and equipment costs that arise from the occupation of premises and the use of equipment, depreciation and amortisation and other administrative expenses.
For accounting policy information refer to Accounting policies 3.3, 3.4 and 3.5.
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Salaries
2,456
2,477
2,483
Bonus awards
(1)
479
411
353
Temporary and contract costs
162
162
199
Social security costs
418
371
352
Pension costs
338
311
313
- defined benefit schemes (Note 5)
93
86
122
- defined contribution schemes
245
225
191
Other
321
329
201
Staff costs
4,174
4,061
3,901
Premises and equipment
1,291
1,211
1,153
Bank levy
123
142
109
Depreciation and amortisation
(2)
1,154
1,058
934
Other administrative expenses
(3)
1,520
1,677
1,899
Administrative expenses
4,088
4,088
4,095
\u00a0
8,262
8,149
7,996
\n
(1)
Includes current year charge for amounts deferred from prior years. Refer to reconciliation of bonus awards to income statement
charge on page 309.
(2)
Includes depreciation of right of use assets of \u00a392 million (2024 - \u00a3103 million; 2023 - \u00a3104 million).
(3)
Includes litigation and conduct costs, net of amounts recovered. Refer to Note 20 for further details.
The average number of persons employed during the year, excluding temporary staff and
rounded to the nearest hundred, was 59,300 (2024 \u2013 60,700; 2023 \u2013 61,500). The average
number of temporary employees during the year, rounded to the nearest hundred, was 1,300
(2024 \u2013 1,400; 2023 \u2013 2,100).
The number of persons employed at 31 December 2025, excluding temporary staff and
rounded to the nearest hundred, by reportable segment, was as follows:
Continuing operations
2025
2024
2023
Retail Banking
12,200
13,000
14,300
Private Banking & Wealth Management
2,100
2,200
2,400
Commercial & Institutional
12,300
12,700
12,400
Central items & other
32,400
31,800
32,500
Total
59,000
59,700
61,600
UK
39,000
40,100
41,500
India
18,800
17,600
16,900
Poland
(1)
100
800
1,500
USA
300
300
300
Republic of Ireland
-
100
400
Rest of the World
800
800
1,000
Total
59,000
59,700
61,600
\n
(1)
Re\ufb02ecting closure of operations in Poland.
Share-based payments
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Award plan
Eligible employees
Nature of award
Vesting conditions (1)
Settlement
Sharesave
UK, Channel Islands, Gibraltar, Isle
Option to buy shares under
Continuing employment or leavers in certain circumstances
2026 to 2030
\u00a0
of Man, Poland and India.
employee savings plan
\u00a0 \u00a0
Deferred performance
All
Awards of ordinary shares
Continuing employment or leavers in certain circumstances
2026 to 2031
awards
\u00a0
and conditional shares
\u00a0 \u00a0
Long-term incentives
(2)
Senior employees
Awards of ordinary shares
Continuing employment or leavers in certain circumstances and/or
2026 to 2032
\u00a0 \u00a0
and conditional shares
satisfaction of the pre-vesting assessment and underpins
\u00a0
Sharing in Success
(
3)
All
Awards of ordinary shares
Future continuing employment and achievement of pre-de\ufb01ned
2026
\u00a0 \u00a0
and conditional shares
measures.
\u00a0
\n
(1)
All awards are subject to the discretion of Remuneration Committee.
(2)
Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment.
Existing Long-term incentives vest over 3 to 7 years.
(3)
In 2025 12.5 million shares at total value of \u00a360.5 million were granted and vested under Sharing in Success.
Sharesave
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Average
Shares
Average
Shares
Average
Shares
\u00a0
exercise
under
exercise
under
exercise
under
\u00a0
price
option
price
option
price
option
\u00a0
\u00a3
(million)
\u00a3
(million)
\u00a3
(million)
At 1 January
1.93
101
1.59
114
1.63
99
Granted
4.67
18
2.94
24
1.42
43
Exercised
1.82
(20)
1.52
(32)
1.44
(23)
Cancelled
1.99
(3)
1.60
(5)
1.72
(5)
At 31 December
2.45
96
1.93
101
1.59
114
\n
The fair value of Sharesave options granted in 2025 was determined using a pricing model that
included: expected volatility of share price determined at the grant date based on historical share
price volatility over a period of up to \ufb01ve years; expected option lives that equal the vesting
period; estimated dividend yield on equity shares; and risk-free interest rates determined from
UK gilts with terms matching the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the
average market price over the \ufb01ve trading days (three trading days for Sharesave) preceding
grant date. When estimating the fair value of the award, the number of shares granted and the
prevailing market price as de\ufb01ned on page 155 are used.
The fair value of the award is
recognised as services are provided by employees over the vesting period.
Options are exercisable within six months of vesting; 5.1 million options were exercisable at 31
December 2025 (2024 \u2013 8.9 million; 2023 \u2013 19.0 million). The weighted average share price at
the date of exercise of options was \u00a36.39 (2024 - \u00a34.03; 2023 - \u00a32.20). At 31 December 2025,
exercise prices ranged from \u00a31.42 to \u00a34.67 (2024 - \u00a31.42 to \u00a32.94; 2023 - \u00a31.12 to \u00a31.89) and
the remaining average contractual life was 2.11 years (2024 \u2013 2.35 years; 2023 \u2013 2.25 years).
The fair value of options granted in 2025 was \u00a329.8 million (2024 - \u00a328.3 million; 2023 - \u00a327.3
million).
Deferred performance awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
66
30
76
35
93
46
Granted
60
14
50
23
52
20
Forfeited
(4)
(1)
(3)
(1)
(2)
(1)
Vested
(52)
(18)
(57)
(27)
(67)
(30)
At 31 December
70
25
66
30
76
35
\n
The awards granted in 2025 vest in equal tranches on the anniversary of the award,
predominantly over three years.
Long-term incentives
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
40
19
49
23
49
23
Granted
18
4
9
5
11
5
Vested/exercised
(13)
(5)
(11)
(5)
(10)
(4)
Lapsed
(4)
(1)
(7)
(4)
(1)
(1)
At 31 December
41
17
40
19
49
23
\n
The market value of awards vested/exercised in 2025 was \u00a334.4 million (2024 - \u00a319.3 million;
2023 - \u00a39.5 million).
Bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Change
\u00a0
\u00a3m
\u00a3m
%
Deferred cash awards
(1)
438
387
13%
Deferred share awards
58
61
(5%)
Total bonus awards
(2)
496
448
11%
Bonus awards as a % of operating profit before tax and bonus awards
6%
7%
\u00a0
Proportion of bonus awards that are deferred
\u00a0 \u00a0 \u00a0
- deferred cash awards
88%
86%
\u00a0
- deferred share awards
12%
14%
\u00a0
\n
Reconciliation of bonus awards to income statement charge
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Bonus awarded
496
448
356
Less: deferral of charge for amounts awarded for current year
(155)
(144)
(114)
Income statement charge for amounts awarded in current year
341
304
242
Add: current year charge for amounts deferred from prior years
144
109
115
Less: forfeiture of amounts deferred from prior years
(6)
(2)
(4)
Income statement charge for amounts deferred from prior years
138
107
111
Income statement charge for bonus awards
(2)
479
411
353
\n
Year in which income statement charge is expected to be taken for deferred bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Actual
Expected
\u00a0
2023
2024
2025
2026
2027 and beyond
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bonus awards deferred from 2023 and earlier
115
109
22
7
3
Bonus awards deferred from 2024
-
-
122
10
7
Less: forfeiture of amounts deferred from prior years
(4)
(2)
(6)
-
-
Bonus awards deferred for 2025
-
-
-
137
18
\u00a0
111
107
138
154
28
\n
(1)
Includes March cash awards which are limited to \u00a32,000 for all employees and
are paid in the March following the balance sheet date.
(2)
Excludes other performance-related compensation.", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00232": { "value": "
\u00a0
2025
2024
2023
Continuing operations
\u00a3m
\u00a3m
\u00a3m
Salaries
2,456
2,477
2,483
Bonus awards
(1)
479
411
353
Temporary and contract costs
162
162
199
Social security costs
418
371
352
Pension costs
338
311
313
- defined benefit schemes (Note 5)
93
86
122
- defined contribution schemes
245
225
191
Other
321
329
201
Staff costs
4,174
4,061
3,901
Premises and equipment
1,291
1,211
1,153
Bank levy
123
142
109
Depreciation and amortisation
(2)
1,154
1,058
934
Other administrative expenses
(3)
1,520
1,677
1,899
Administrative expenses
4,088
4,088
4,095
\u00a0
8,262
8,149
7,996
\n
(1)
Includes current year charge for amounts deferred from prior years. Refer to reconciliation of bonus awards to income statement
charge on page 309.
(2)
Includes depreciation of right of use assets of \u00a392 million (2024 - \u00a3103 million; 2023 - \u00a3104 million).
(3)
Includes litigation and conduct costs, net of amounts recovered. Refer to Note 20 for further details. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00234": { "value": "Share-based payments \n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Award plan
Eligible employees
Nature of award
Vesting conditions (1)
Settlement
Sharesave
UK, Channel Islands, Gibraltar, Isle
Option to buy shares under
Continuing employment or leavers in certain circumstances
2026 to 2030
\u00a0
of Man, Poland and India.
employee savings plan
\u00a0 \u00a0
Deferred performance
All
Awards of ordinary shares
Continuing employment or leavers in certain circumstances
2026 to 2031
awards
\u00a0
and conditional shares
\u00a0 \u00a0
Long-term incentives
(2)
Senior employees
Awards of ordinary shares
Continuing employment or leavers in certain circumstances and/or
2026 to 2032
\u00a0 \u00a0
and conditional shares
satisfaction of the pre-vesting assessment and underpins
\u00a0
Sharing in Success
(
3)
All
Awards of ordinary shares
Future continuing employment and achievement of pre-de\ufb01ned
2026
\u00a0 \u00a0
and conditional shares
measures.
\u00a0
\n
(1)
All awards are subject to the discretion of Remuneration Committee.
(2)
Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment.
Existing Long-term incentives vest over 3 to 7 years.
(3)
In 2025 12.5 million shares at total value of \u00a360.5 million were granted and vested under Sharing in Success.
Sharesave
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Average
Shares
Average
Shares
Average
Shares
\u00a0
exercise
under
exercise
under
exercise
under
\u00a0
price
option
price
option
price
option
\u00a0
\u00a3
(million)
\u00a3
(million)
\u00a3
(million)
At 1 January
1.93
101
1.59
114
1.63
99
Granted
4.67
18
2.94
24
1.42
43
Exercised
1.82
(20)
1.52
(32)
1.44
(23)
Cancelled
1.99
(3)
1.60
(5)
1.72
(5)
At 31 December
2.45
96
1.93
101
1.59
114
\n
The fair value of Sharesave options granted in 2025 was determined using a pricing model that
included: expected volatility of share price determined at the grant date based on historical share
price volatility over a period of up to \ufb01ve years; expected option lives that equal the vesting
period; estimated dividend yield on equity shares; and risk-free interest rates determined from
UK gilts with terms matching the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the
average market price over the \ufb01ve trading days (three trading days for Sharesave) preceding
grant date. When estimating the fair value of the award, the number of shares granted and the
prevailing market price as de\ufb01ned on page 155 are used.
The fair value of the award is
recognised as services are provided by employees over the vesting period.
Options are exercisable within six months of vesting; 5.1 million options were exercisable at 31
December 2025 (2024 \u2013 8.9 million; 2023 \u2013 19.0 million). The weighted average share price at
the date of exercise of options was \u00a36.39 (2024 - \u00a34.03; 2023 - \u00a32.20). At 31 December 2025,
exercise prices ranged from \u00a31.42 to \u00a34.67 (2024 - \u00a31.42 to \u00a32.94; 2023 - \u00a31.12 to \u00a31.89) and
the remaining average contractual life was 2.11 years (2024 \u2013 2.35 years; 2023 \u2013 2.25 years).
The fair value of options granted in 2025 was \u00a329.8 million (2024 - \u00a328.3 million; 2023 - \u00a327.3
million).
Deferred performance awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
66
30
76
35
93
46
Granted
60
14
50
23
52
20
Forfeited
(4)
(1)
(3)
(1)
(2)
(1)
Vested
(52)
(18)
(57)
(27)
(67)
(30)
At 31 December
70
25
66
30
76
35
\n
The awards granted in 2025 vest in equal tranches on the anniversary of the award,
predominantly over three years.
Long-term incentives
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Value at
Shares
Value at
Shares
Value at
Shares
\u00a0
grant
awarded
grant
awarded
grant
awarded
\u00a0
\u00a3m
(million)
\u00a3m
(million)
\u00a3m
(million)
At 1 January
40
19
49
23
49
23
Granted
18
4
9
5
11
5
Vested/exercised
(13)
(5)
(11)
(5)
(10)
(4)
Lapsed
(4)
(1)
(7)
(4)
(1)
(1)
At 31 December
41
17
40
19
49
23
\n
The market value of awards vested/exercised in 2025 was \u00a334.4 million (2024 - \u00a319.3 million;
2023 - \u00a39.5 million).
Bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
Change
\u00a0
\u00a3m
\u00a3m
%
Deferred cash awards
(1)
438
387
13%
Deferred share awards
58
61
(5%)
Total bonus awards
(2)
496
448
11%
Bonus awards as a % of operating profit before tax and bonus awards
6%
7%
\u00a0
Proportion of bonus awards that are deferred
\u00a0 \u00a0 \u00a0
- deferred cash awards
88%
86%
\u00a0
- deferred share awards
12%
14%
\u00a0
\n
Reconciliation of bonus awards to income statement charge
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Bonus awarded
496
448
356
Less: deferral of charge for amounts awarded for current year
(155)
(144)
(114)
Income statement charge for amounts awarded in current year
341
304
242
Add: current year charge for amounts deferred from prior years
144
109
115
Less: forfeiture of amounts deferred from prior years
(6)
(2)
(4)
Income statement charge for amounts deferred from prior years
138
107
111
Income statement charge for bonus awards
(2)
479
411
353
\n
Year in which income statement charge is expected to be taken for deferred bonus awards
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Actual
Expected
\u00a0
2023
2024
2025
2026
2027 and beyond
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Bonus awards deferred from 2023 and earlier
115
109
22
7
3
Bonus awards deferred from 2024
-
-
122
10
7
Less: forfeiture of amounts deferred from prior years
(4)
(2)
(6)
-
-
Bonus awards deferred for 2025
-
-
-
137
18
\u00a0
111
107
138
154
28
\n
(1)
Includes March cash awards which are limited to \u00a32,000 for all employees and
are paid in the March following the balance sheet date.
(2)
Excludes other performance-related compensation.", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00235": { "value": "4 Segmental analysis
NatWest Group analyses its performance between the different operating segments of the Group as required by IFRS 8 Operating segments. The presentation is consistent with internal
\ufb01nancial reporting and how senior management assesses the performance of each operating segment.
Reportable operating segments:
The business is organised into the following reportable
segments: Retail Banking, Private Banking & Wealth
Management, Commercial & Institutional, and Central items &
other.
Retail Banking
serves personal customers in the UK.
Private Banking & Wealth Management
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. Our Markets offering helps our customers
manage \ufb01nancial risks across different geographies, while our
International offering provides full-service banking operations in
the Channel Islands, Isle of Man, Gibraltar and Luxembourg.
Central items & other
includes corporate functions, such as
treasury, \ufb01nance, risk management, compliance, legal,
communications and human resources. Central functions
manage NatWest Group capital resources and NatWest Group-
wide regulatory projects and provide services to the reportable
segments. Central items & other includes businesses and
amounts not directly related to any of the other reportable
segments.
Alloca\ue001on of central balance sheet items
NatWest Group allocates all central costs relating to central
functions to the business using appropriate drivers; these are
reported as indirect costs in the segmental income statements.
Assets and risk-weighted assets held centrally, mainly relating
to NatWest Group Treasury, are allocated to the business using
appropriate drivers
.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Private Banking
\u00a0 \u00a0 \u00a0
\u00a0
Retail
& Wealth
Commercial &
Central items
\u00a0
\u00a0
Banking
Management
Institutional
& other
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing operations
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Net interest income
6,064
757
6,149
(141)
12,829
Net fees and commissions
429
340
1,729
16
2,514
Other non-interest income
2
34
931
331
1,298
Total income
6,495
1,131
8,809
206
16,641
Depreciation and amortisation
(1)
(1)
(164)
(988)
(1,154)
Other operating expenses
(2,936)
(726)
(4,356)
910
(7,108)
Impairment (losses)/releases
(437)
(10)
(225)
1
(671)
Operating profit
3,121
394
4,064
129
7,708
2024
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Continuing operations
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Net interest income
5,233
645
5,339
58
11,275
Net fees and commissions
408
290
1,765
4
2,467
Other non-interest income
9
34
853
65
961
Total income
5,650
969
7,957
127
14,703
Depreciation and amortisation
(1)
(1)
(154)
(902)
(1,058)
Other operating expenses
(2,936)
(715)
(4,120)
680
(7,091)
Impairment (losses)/releases
(282)
11
(98)
10
(359)
Operating profit/(loss)
2,431
264
3,585
(85)
6,195
2023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Continuing operations
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Net interest income
5,496
710
5,044
(201)
11,049
Net fees and commissions
427
249
1,654
-
2,330
Other non-interest income
8
31
723
611
1,373
Total income
5,931
990
7,421
410
14,752
Depreciation and amortisation
(1)
(1)
(154)
(778)
(934)
Other operating expenses
(2,827)
(684)
(3,937)
386
(7,062)
Impairment losses
(465)
(14)
(94)
(5)
(578)
Operating profit
2,638
291
3,236
13
6,178
Total revenue
\n
(1)
\n\n \n
Private Banking
Retail
& Wealth
Commercial &
Central items
Banking
Management
Institutional
& other
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing operations
External
10,146
1,262
13,414
5,421
30,243
Inter-segmental
(2)
5
1,525
(1,505)
(25)
-
Total
10,151
2,787
11,909
5,396
30,243
2024
Continuing operations
External
9,041
1,250
14,194
4,838
29,323
Inter-segmental
(2)
11
1,538
(1,769)
220
-
Total
9,052
2,788
12,425
5,058
29,323
2023
Continuing operations
External
7,366
1,157
12,519
4,340
25,382
Inter-segmental
(2)
5
1,000
(1,602)
597
-
Total
7,371
2,157
10,917
4,937
25,382
\n
Total income
\n\n \n
Private Banking
Retail
& Wealth
Commercial &
Central items
Banking
Management
Institutional
& other
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing operations
External
6,559
208
8,324
1,550
16,641
Inter-segmental
(2)
(64)
923
485
(1,344)
-
Total
6,495
1,131
8,809
206
16,641
2024
Continuing operations
External
4,743
26
8,250
1,684
14,703
Inter-segmental
(2)
907
943
(293)
(1,557)
-
Total
5,650
969
7,957
127
14,703
2023
Continuing operations
External
4,170
327
7,730
2,525
14,752
Inter-segmental
(2)
1,761
663
(309)
(2,115)
-
Total
5,931
990
7,421
410
14,752
\n
For the notes to this table refer to page 313.
Analysis of net fees and commissions
\n \n \n
Private Banking
Retail
& Wealth
Commercial &
Central items
Banking
Management
Institutional
& other
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing operations
Fees and commissions receivable
- Payment services
350
38
731
-
1,119
- Credit and debit card fees
424
30
268
-
722
- Lending and financing
16
9
744
-
769
- Brokerage
34
10
49
-
93
- Investment management, trustee and fiduciary services
3
265
53
21
342
- Underwriting fees
-
-
161
-
161
- Other
5
8
41
(13)
41
Total
832
360
2,047
8
3,247
Fees and commissions payable
(403)
(20)
(318)
8
(733)
Net fees and commissions
429
340
1,729
16
2,514
2024
Continuing operations
Fees and commissions receivable
- Payment services
322
37
700
-
1,059
- Credit and debit card fees
402
13
261
5
681
- Lending and financing
18
5
771
-
794
- Brokerage
34
9
46
-
89
- Investment management, trustee and fiduciary services
2
235
48
19
304
- Underwriting fees
-
-
155
-
155
- Other
7
11
95
(20)
93
Total
785
310
2,076
4
3,175
Fees and commissions payable
(377)
(20)
(311)
-
(708)
Net fees and commissions
408
290
1,765
4
2,467
2023
Continuing operations
Fees and commissions receivable
- Payment services
324
32
671
3
1,030
- Credit and debit card fees
400
13
260
3
676
- Lending and financing
14
5
709
1
729
- Brokerage
35
6
42
-
83
- Investment management, trustee and fiduciary services
2
209
45
10
266
- Underwriting fees
-
-
123
-
123
- Other
4
5
73
(6)
76
Total
779
270
1,923
11
2,983
Fees and commissions payable
(352)
(21)
(269)
(11)
(653)
Net fees and commissions
427
249
1,654
-
2,330
\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Retail Banking
240,259
206,398
232,835
198,795
228,684
191,936
Private Banking & Wealth
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Management
30,457
42,895
28,593
42,603
26,894
37,806
Commercial & Institutional
391,869
354,499
398,750
367,342
384,958
359,766
Central items & other
51,968
68,148
47,807
59,867
52,137
65,977
Total
714,553
671,940
707,985
668,607
692,673
655,485
\n
Segmental analysis of goodwill
The total carrying value of goodwill at 31 December 2025 was \u00a35,520 million (2024 - \u00a35,675
million) comprising: Retail Banking \u00a32,607 million (2024 - \u00a32,607 million); Private Banking &
Wealth Management \u00a39 million (2024 - \u00a39 million); Commercial & Institutional \u00a32,904 million
(2024 - \u00a32,904 million) and Central items & other - nil (2024 \u2013 \u00a3155 million). Refer to Note 16 for
more details.
Geographical segments
The geographical analysis in the tables below has been compiled on the basis of location of of\ufb01ce
where the transactions are recorded.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
UK
USA
Europe
RoW
Total
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing operations
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Total revenue
(1)
28,745
294
1,103
101
30,243
Interest receivable
25,021
23
636
18
25,698
Interest payable
(12,496)
(48)
(318)
(7)
(12,869)
Net fees and commissions
2,103
142
216
53
2,514
Trading income
902
136
44
30
1,112
Other operating income
26
(7)
167
-
186
Total income
(3)
15,556
246
745
94
16,641
Operating profit before tax
7,109
99
369
131
7,708
Total assets
638,475
22,924
52,402
752
714,553
Total liabilities
616,010
21,413
34,202
315
671,940
Contingent liabilities and
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
commitments
(4)
139,306
-
7,817
-
147,123
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
UK
USA
Europe
RoW
Total
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Continuing operations
\u00a0\u00a0\u00a0\u00a0\u00a0
Total revenue
(1)
28,067
297
857
102
29,323
Interest receivable
24,276
32
859
20
25,187
Interest payable
(13,328)
(63)
(516)
(5)
(13,912)
Net fees and commissions
2,096
108
207
56
2,467
Trading income
648
135
18
24
825
Other operating income
403
(4)
(264)
1
136
Total income
(3)
14,095
208
304
96
14,703
Operating profit/(loss) before tax
6,146
75
(151)
125
6,195
Total assets
627,519
25,793
53,392
1,281
707,985
Total liabilities
608,708
23,495
35,602
802
668,607
Contingent liabilities and
\u00a0\u00a0\u00a0\u00a0\u00a0
commitments
(4)
132,035
-
7,925
1
139,961
2023
\u00a0\u00a0\u00a0\u00a0\u00a0
Continuing operations
\u00a0\u00a0\u00a0\u00a0\u00a0
Total revenue
(1)
24,096
167
1,016
103
25,382
Interest receivable
20,192
39
774
21
21,026
Interest payable
(9,500)
(1)
(472)
(4)
(9,977)
Net fees and commissions
2,052
49
172
57
2,330
Trading income
704
66
1
23
794
Other operating income
556
(10)
30
3
579
Total income
(3)
14,004
143
505
100
14,752
Operating profit/(loss) before tax
6,196
45
(149)
86
6,178
Total assets
610,831
23,725
56,001
2,116
692,673
Total liabilities
594,250
22,106
37,506
1,623
655,485
Contingent liabilities and
\u00a0\u00a0\u00a0\u00a0\u00a0
commitments
(4)
124,298
-
7,561
21
131,880
\n
(1)
Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income.
(2)
Revenue and income arising from transactions between the group\u2019s segments are reported as inter-segment and include net inter-segment
funding income/(expense).
(3)
Total income excludes internal service fee income which has been calculated on a cost plus mark-up basis.
(4)
Refer to Note 25 Memorandum items \u2013 Contingent liabilities and commitments. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00668": { "value": "NatWest Group analyses its performance between the different operating segments of the Group as required by IFRS 8 Operating segments. The presentation is consistent with internal \ufb01nancial reporting and how senior management assesses the performance of each operating segment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00236": { "value": "6 Auditor\u2019s remuneration
Amounts payable to NatWest Group's auditors for statutory audit and other services are set out below.
All audit-related and other services are approved by the Group Audit Committee and are subject to strict controls to ensure the external auditor\u2019s independence is unaffected by the provision of
other services. The Group Audit Committee recognises that for certain assignments, the auditors are best placed to perform the work economically; for other work, NatWest Group selects the
supplier best placed.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Fees payable for:
\u00a0 \u00a0 \u00a0
- the audit of NatWest Group\u2019s annual accounts
(1)
5.3
5.1
4.9
- the audit of NatWest Group plc\u2019s subsidiaries
(1)
34.8
32.5
32.3
- audit-related assurance services
(1,2)
4.7
4.2
4.5
Total audit and audit-related assurance services fees
44.8
41.8
41.7
Other assurance services
1.0
1.0
0.7
Corporate finance services
(3)
0.9
3.1
0.7
Total other services
1.9
4.1
1.4
\n
(1)
The 2025 audit fee was approved by the Group Audit Committee. At 31
December 2025, \u00a316.0 million has been billed and paid in respect of the 2025
NatWest Group audit fees.
(2)
Comprises fees of \u00a31.5 million (2024 - \u00a31.4 million) for reviews of interim
financial information and \u00a33.2 million (2024 - \u00a32.8 million) for reports to
NatWest Group\u2019s regulators in the UK and overseas.
(3)
Comprises fees of \u00a30.9 million (2024 - \u00a33.1 million) in respect of work
performed by the auditors as reporting accountants on debt and equity
issuances
undertaken by NatWest Group.", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00240": { "value": "8 Earnings per share
Earnings per share measures how much pro\ufb01t NatWest Group makes for each share in issue during the year.
Basic earnings per ordinary share is calculated by dividing the pro\ufb01t attributable
to ordinary shareholders by the weighted average number of ordinary shares outstanding. Diluted earnings per ordinary share is calculated by dividing the basic earnings by the weighted
average number of ordinary shares outstanding plus the weighted average number of ordinary shares that would be issued on conversion of dilutive share options and convertible securities.
The assessment of whether the effect of share options and convertible securities is dilutive or not is based on the earnings from continuing operations.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
2023
\u00a0
\u00a3m
\u00a3m
\u00a3m
Earnings
\u00a0 \u00a0 \u00a0
Profit from continuing operations attributable to ordinary shareholders
5,479
4,438
4,506
Profit/(loss) from discontinued operations attributable to ordinary shareholders
-
81
(112)
Profit attributable to ordinary shareholders
5,479
4,519
4,394
Weighted average number of shares (millions)
\u00a0 \u00a0 \u00a0
Weighted average number of ordinary shares outstanding during the year
8,052
8,450
9,164
Effect of dilutive share options and convertible securities
74
66
55
Diluted weighted average number of ordinary shares outstanding during the year
8,126
8,516
9,219
Earnings per ordinary share - continuing operations
68.0p
52.5p
49.2p
Earnings per ordinary share - discontinued operations
-
1.0p
(1.2p)
Total earnings per share attributable to ordinary shareholders - basic
(1)
68.0p
53.5p
47.9p
Earnings per ordinary share - diluted continuing operations
67.4p
52.1p
48.9p
Earnings per ordinary share - diluted discontinued operations
-
1.0p
(1.2p)
Total earnings per share attributable to ordinary shareholders - diluted
67.4p
53.1p
47.7p
\n
(1)
In 2023, the unrounded Total earnings per share attributable to
ordinary shareholders \u2013 basic is 47.948p. The unrounded Earnings per
ordinary share \u2013 continuing operations was 49.170p. The unrounded
Earnings per ordinary share \u2013 discontinued operations was (1.222p).", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00667": { "value": "Additional information on \ufb01nance lease receivables
The following table shows the reconciliation of undiscounted \ufb01nance lease receivables to net investment in \ufb01nance leases which are presented under Loans to customers-amortised cost on the balance
sheet.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Amount receivable under finance leases
\u00a0 \u00a0
Within 1 year
3,670
3,493
1 to 2 years
2,411
2,499
2 to 3 years
1,478
1,612
3 to 4 years
946
842
4 to 5 years
454
464
After 5 years
854
1,043
Total lease payments
9,813
9,953
Unguaranteed residual values
151
150
Future drawdowns
(12)
(12)
Unearned income
(895)
(1,001)
Present value of lease payments
9,057
9,090
Impairments
(86)
(92)
Net investment in finance leases
8,971
8,998
\n20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00245": { "value": "Loans to banks and customers
In estimating the fair value of net loans to customers
and banks measured at amortised cost, NatWest
Group\u2019s loans are segregated into appropriate portfolios
re\ufb02ecting the characteristics of the constituent loans.
Two principal methods are used to estimate fair value:
(a)
Contractual cash \ufb02ows that are discounted using a
market discount rate that incorporates the current
spread for the borrower or where this is not
observable, the spread for borrowers of a similar
credit standing.
(b) Expected cash \ufb02ows (unadjusted for credit losses)
are discounted at the current offer rate for the
same or similar products. The current methodology
caps all loan values at par rather than modelling
clients\u2019 option to repay loans early. This approach is
adopted for lending portfolios in Retail Banking,
Commercial & Institutional (SME loans) and Private
Banking & Wealth Management in order to re\ufb02ect
the homogeneous nature of these portfolios. 11 Financial instruments \u2013 maturity analysis
This note shows the maturity pro\ufb01le of NatWest Group\u2019s \ufb01nancial assets and liabilities by contractual date of maturity and contractual cash \ufb02ows.
Remaining maturity
The following table shows the residual maturity of \ufb01nancial instruments, based on contractual date of maturity.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Less than
More than
\u00a0
Less than
More than
\u00a0
\u00a0
12 months
12 months
Total
12 months
12 months
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85,182
-
85,182
92,994
-
92,994
Trading assets
33,677
12,860
46,537
37,168
11,749
48,917
Derivatives
24,126
36,663
60,789
34,267
44,139
78,406
Settlement balances
645
-
645
2,085
-
2,085
Loans to banks - amortised cost
6,122
836
6,958
5,360
670
6,030
Loans to customers - amortised cost
100,120
318,761
418,881
99,793
300,533
400,326
Other financial assets
11,905
67,865
79,770
14,524
48,719
63,243
Liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
28,465
15,627
44,092
21,675
9,777
31,452
Customer deposits
434,149
8,849
442,998
430,693
2,797
433,490
Settlement balances
942
-
942
1,729
-
1,729
Trading liabilities
39,918
9,104
49,022
44,683
10,031
54,714
Derivatives
24,204
29,770
53,974
34,134
37,948
72,082
Other financial liabilities
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Notes in circulation
3,164
-
3,164
3,316
-
3,316
Lease liabilities
85
450
535
94
536
630
\n
Assets and liabilities by contractual cash \ufb02ows up to 20 years
The tables on the following page show the contractual undiscounted cash \ufb02ows receivable and payable, up to a period of 20 years, including future receipts and payments of interest of \ufb01nancial assets
and liabilities by contractual maturity. The balances in the following tables do not agree directly with the consolidated balance sheet, as the tables include all cash \ufb02ows relating to principal and future
coupon payments, presented on an undiscounted basis. The tables have been prepared on the following basis:
Financial assets have been re\ufb02ected in the time band of the latest date on which they could be repaid, unless earlier repayment can be demanded by NatWest Group. Financial liabilities are included at
the earliest date on which the counterparty can require repayment, regardless of whether or not such early repayment results in a penalty. If the repayment of a \ufb01nancial instrument is triggered by, or
is subject to, speci\ufb01c criteria such as market price hurdles being reached, the asset is included in the time band that contains the latest date on which it can be repaid, regardless of early repayment.
The liability is included in the time band that contains the earliest possible date on which the conditions could be ful\ufb01lled, without considering the probability of the conditions being met.
\n\n\n
For example, if a structured note is automatically prepaid when an equity index exceeds a certain level, the cash out\ufb02ow will be included in the less than three months period, whatever the level of the
\n
index at the year end. The settlement date of debt securities in issue, issued by certain securitisation vehicles consolidated by NatWest Group, depends on when cash \ufb02ows are received from the
\n
securitised assets. Where these assets are prepayable, the timing of the cash out\ufb02ow relating to securities assumes that each asset will be prepaid at the earliest possible date. As the repayments of
\n
assets and liabilities are linked, the repayment of assets in securitisations is shown on the earliest date that the asset can be prepaid, as this is the basis used for liabilities.
\n
The principal amounts of \ufb01nancial assets and liabilities that are repayable after 20 years or where the counterparty has no right to repayment of the principal are excluded from the table, as are
\n
interest payments after 20 years.
\n
The maturity of guarantees and commitments is based on the earliest possible date they would be drawn in order to evaluate NatWest Group\u2019s liquidity position.
\n
MFVTPL assets of \u00a3108 billion (2024 - \u00a3128 billion) and HFT liabilities of \u00a3102.6 billion (2024 - \u00a3126.3 billion) have been excluded from the following tables.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
Cash and balances at central banks
85,182
-
-
-
-
-
Derivatives held for hedging
121
164
21
153
70
69
Settlement balances
645
-
-
-
-
-
Loans to banks - amortised cost
5,544
563
778
8
19
153
Loans to customers - amortised cost
63,503
52,679
93,380
70,214
104,670
127,073
Other financial assets
(1)
4,770
7,726
26,014
11,733
24,491
8,742
Finance lease
-
3
7
14
37
26
159,765
61,135
120,200
82,122
129,287
136,063
Liabilities by contractual maturity up to 20 years
Bank deposits
26,707
2,111
10,523
2,712
3,094
-
Customer deposits
401,858
33,017
9,239
14
-
14
Settlement balances
942
-
-
-
-
-
Derivatives held for hedging
42
54
299
163
39
1
Other financial liabilities
7,547
14,212
24,824
17,301
6,804
1,218
Subordinated liabilities
68
1,193
1,742
3,676
52
342
Other liabilities - Notes in circulation
3,164
-
-
-
-
-
Lease liabilities
25
68
156
80
175
25
440,353
50,655
46,783
23,946
10,164
1,600
Guarantees and commitments - notional amount
(2)
Guarantees
(3)
2,810
-
-
-
-
-
Commitments
(4)
137,519
-
-
-
-
-
140,329
-
-
-
-
-
\n
For the notes to this table refer to the following page.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
92,994
-
-
-
-
-
Derivatives held for hedging
17
66
107
61
53
76
Settlement balances
2,085
-
-
-
-
-
Loans to banks - amortised cost
5,080
297
612
9
23
158
Loans to customers - amortised cost
59,702
56,264
82,995
63,857
99,837
123,946
Other financial assets
(1)
7,068
9,414
17,417
11,643
11,843
7,493
Finance lease
27
89
126
105
207
325
\u00a0
166,973
66,130
101,257
75,675
111,963
131,998
Liabilities by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
16,914
5,315
10,114
81
79
-
Customer deposits
396,703
34,316
2,713
82
-
14
Settlement balances
1,729
-
-
-
-
-
Derivatives held for hedging
63
343
335
271
43
2
Other financial liabilities
8,305
13,501
22,869
15,350
4,710
987
Subordinated liabilities
53
1,201
2,059
2,927
754
339
Other liabilities - Notes in circulation
3,316
-
-
-
-
-
Lease liabilities
24
68
185
96
168
102
\u00a0
427,107
54,744
38,275
18,807
5,754
1,444
Guarantees and commitments - notional amount
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Guarantees
(3)
3,060
-
-
-
-
-
Commitments
(4)
132,958
-
-
-
-
-
\u00a0
136,018
-
-
-
-
-
\n
(1)
Other \ufb01nancial assets exclude equity shares.
(2)
Refer to Note 25 Memorandum items \u2013 Contingent liabilities and
commitments.
(3)
NatWest Group is only called upon to satisfy a guarantee when the
guaranteed party fails to meet its obligations. NatWest Group expects
most guarantees it provides to expire unused.
(4)
NatWest Group has given commitments to provide funds to customers
under undrawn formal facilities, credit lines and other commitments to
lend subject to certain conditions being met by the counterparty. NatWest
Group does not expect all facilities to be drawn, and some may lapse
before drawdown. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00246": { "value": "Loans to banks and customers
In estimating the fair value of net loans to customers
and banks measured at amortised cost, NatWest
Group\u2019s loans are segregated into appropriate portfolios
re\ufb02ecting the characteristics of the constituent loans.
Two principal methods are used to estimate fair value:
(a)
Contractual cash \ufb02ows that are discounted using a
market discount rate that incorporates the current
spread for the borrower or where this is not
observable, the spread for borrowers of a similar
credit standing.
(b) Expected cash \ufb02ows (unadjusted for credit losses)
are discounted at the current offer rate for the
same or similar products. The current methodology
caps all loan values at par rather than modelling
clients\u2019 option to repay loans early. This approach is
adopted for lending portfolios in Retail Banking,
Commercial & Institutional (SME loans) and Private
Banking & Wealth Management in order to re\ufb02ect
the homogeneous nature of these portfolios. 11 Financial instruments \u2013 maturity analysis
This note shows the maturity pro\ufb01le of NatWest Group\u2019s \ufb01nancial assets and liabilities by contractual date of maturity and contractual cash \ufb02ows.
Remaining maturity
The following table shows the residual maturity of \ufb01nancial instruments, based on contractual date of maturity.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Less than
More than
\u00a0
Less than
More than
\u00a0
\u00a0
12 months
12 months
Total
12 months
12 months
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85,182
-
85,182
92,994
-
92,994
Trading assets
33,677
12,860
46,537
37,168
11,749
48,917
Derivatives
24,126
36,663
60,789
34,267
44,139
78,406
Settlement balances
645
-
645
2,085
-
2,085
Loans to banks - amortised cost
6,122
836
6,958
5,360
670
6,030
Loans to customers - amortised cost
100,120
318,761
418,881
99,793
300,533
400,326
Other financial assets
11,905
67,865
79,770
14,524
48,719
63,243
Liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
28,465
15,627
44,092
21,675
9,777
31,452
Customer deposits
434,149
8,849
442,998
430,693
2,797
433,490
Settlement balances
942
-
942
1,729
-
1,729
Trading liabilities
39,918
9,104
49,022
44,683
10,031
54,714
Derivatives
24,204
29,770
53,974
34,134
37,948
72,082
Other financial liabilities
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Notes in circulation
3,164
-
3,164
3,316
-
3,316
Lease liabilities
85
450
535
94
536
630
\n
Assets and liabilities by contractual cash \ufb02ows up to 20 years
The tables on the following page show the contractual undiscounted cash \ufb02ows receivable and payable, up to a period of 20 years, including future receipts and payments of interest of \ufb01nancial assets
and liabilities by contractual maturity. The balances in the following tables do not agree directly with the consolidated balance sheet, as the tables include all cash \ufb02ows relating to principal and future
coupon payments, presented on an undiscounted basis. The tables have been prepared on the following basis:
Financial assets have been re\ufb02ected in the time band of the latest date on which they could be repaid, unless earlier repayment can be demanded by NatWest Group. Financial liabilities are included at
the earliest date on which the counterparty can require repayment, regardless of whether or not such early repayment results in a penalty. If the repayment of a \ufb01nancial instrument is triggered by, or
is subject to, speci\ufb01c criteria such as market price hurdles being reached, the asset is included in the time band that contains the latest date on which it can be repaid, regardless of early repayment.
The liability is included in the time band that contains the earliest possible date on which the conditions could be ful\ufb01lled, without considering the probability of the conditions being met.
\n\n\n
For example, if a structured note is automatically prepaid when an equity index exceeds a certain level, the cash out\ufb02ow will be included in the less than three months period, whatever the level of the
\n
index at the year end. The settlement date of debt securities in issue, issued by certain securitisation vehicles consolidated by NatWest Group, depends on when cash \ufb02ows are received from the
\n
securitised assets. Where these assets are prepayable, the timing of the cash out\ufb02ow relating to securities assumes that each asset will be prepaid at the earliest possible date. As the repayments of
\n
assets and liabilities are linked, the repayment of assets in securitisations is shown on the earliest date that the asset can be prepaid, as this is the basis used for liabilities.
\n
The principal amounts of \ufb01nancial assets and liabilities that are repayable after 20 years or where the counterparty has no right to repayment of the principal are excluded from the table, as are
\n
interest payments after 20 years.
\n
The maturity of guarantees and commitments is based on the earliest possible date they would be drawn in order to evaluate NatWest Group\u2019s liquidity position.
\n
MFVTPL assets of \u00a3108 billion (2024 - \u00a3128 billion) and HFT liabilities of \u00a3102.6 billion (2024 - \u00a3126.3 billion) have been excluded from the following tables.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
Cash and balances at central banks
85,182
-
-
-
-
-
Derivatives held for hedging
121
164
21
153
70
69
Settlement balances
645
-
-
-
-
-
Loans to banks - amortised cost
5,544
563
778
8
19
153
Loans to customers - amortised cost
63,503
52,679
93,380
70,214
104,670
127,073
Other financial assets
(1)
4,770
7,726
26,014
11,733
24,491
8,742
Finance lease
-
3
7
14
37
26
159,765
61,135
120,200
82,122
129,287
136,063
Liabilities by contractual maturity up to 20 years
Bank deposits
26,707
2,111
10,523
2,712
3,094
-
Customer deposits
401,858
33,017
9,239
14
-
14
Settlement balances
942
-
-
-
-
-
Derivatives held for hedging
42
54
299
163
39
1
Other financial liabilities
7,547
14,212
24,824
17,301
6,804
1,218
Subordinated liabilities
68
1,193
1,742
3,676
52
342
Other liabilities - Notes in circulation
3,164
-
-
-
-
-
Lease liabilities
25
68
156
80
175
25
440,353
50,655
46,783
23,946
10,164
1,600
Guarantees and commitments - notional amount
(2)
Guarantees
(3)
2,810
-
-
-
-
-
Commitments
(4)
137,519
-
-
-
-
-
140,329
-
-
-
-
-
\n
For the notes to this table refer to the following page.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
92,994
-
-
-
-
-
Derivatives held for hedging
17
66
107
61
53
76
Settlement balances
2,085
-
-
-
-
-
Loans to banks - amortised cost
5,080
297
612
9
23
158
Loans to customers - amortised cost
59,702
56,264
82,995
63,857
99,837
123,946
Other financial assets
(1)
7,068
9,414
17,417
11,643
11,843
7,493
Finance lease
27
89
126
105
207
325
\u00a0
166,973
66,130
101,257
75,675
111,963
131,998
Liabilities by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
16,914
5,315
10,114
81
79
-
Customer deposits
396,703
34,316
2,713
82
-
14
Settlement balances
1,729
-
-
-
-
-
Derivatives held for hedging
63
343
335
271
43
2
Other financial liabilities
8,305
13,501
22,869
15,350
4,710
987
Subordinated liabilities
53
1,201
2,059
2,927
754
339
Other liabilities - Notes in circulation
3,316
-
-
-
-
-
Lease liabilities
24
68
185
96
168
102
\u00a0
427,107
54,744
38,275
18,807
5,754
1,444
Guarantees and commitments - notional amount
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Guarantees
(3)
3,060
-
-
-
-
-
Commitments
(4)
132,958
-
-
-
-
-
\u00a0
136,018
-
-
-
-
-
\n
(1)
Other \ufb01nancial assets exclude equity shares.
(2)
Refer to Note 25 Memorandum items \u2013 Contingent liabilities and
commitments.
(3)
NatWest Group is only called upon to satisfy a guarantee when the
guaranteed party fails to meet its obligations. NatWest Group expects
most guarantees it provides to expire unused.
(4)
NatWest Group has given commitments to provide funds to customers
under undrawn formal facilities, credit lines and other commitments to
lend subject to certain conditions being met by the counterparty. NatWest
Group does not expect all facilities to be drawn, and some may lapse
before drawdown. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00249": { "value": "Bank and customer deposits
Fair values of deposits are estimated using discounted
cash \ufb02ow valuation techniques. Where required,
methodologies can be revised as additional information
and valuation inputs become available.
11 Financial instruments \u2013 maturity analysis
This note shows the maturity pro\ufb01le of NatWest Group\u2019s \ufb01nancial assets and liabilities by contractual date of maturity and contractual cash \ufb02ows.
Remaining maturity
The following table shows the residual maturity of \ufb01nancial instruments, based on contractual date of maturity.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Less than
More than
\u00a0
Less than
More than
\u00a0
\u00a0
12 months
12 months
Total
12 months
12 months
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85,182
-
85,182
92,994
-
92,994
Trading assets
33,677
12,860
46,537
37,168
11,749
48,917
Derivatives
24,126
36,663
60,789
34,267
44,139
78,406
Settlement balances
645
-
645
2,085
-
2,085
Loans to banks - amortised cost
6,122
836
6,958
5,360
670
6,030
Loans to customers - amortised cost
100,120
318,761
418,881
99,793
300,533
400,326
Other financial assets
11,905
67,865
79,770
14,524
48,719
63,243
Liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
28,465
15,627
44,092
21,675
9,777
31,452
Customer deposits
434,149
8,849
442,998
430,693
2,797
433,490
Settlement balances
942
-
942
1,729
-
1,729
Trading liabilities
39,918
9,104
49,022
44,683
10,031
54,714
Derivatives
24,204
29,770
53,974
34,134
37,948
72,082
Other financial liabilities
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Notes in circulation
3,164
-
3,164
3,316
-
3,316
Lease liabilities
85
450
535
94
536
630
\n
Assets and liabilities by contractual cash \ufb02ows up to 20 years
The tables on the following page show the contractual undiscounted cash \ufb02ows receivable and payable, up to a period of 20 years, including future receipts and payments of interest of \ufb01nancial assets
and liabilities by contractual maturity. The balances in the following tables do not agree directly with the consolidated balance sheet, as the tables include all cash \ufb02ows relating to principal and future
coupon payments, presented on an undiscounted basis. The tables have been prepared on the following basis:
Financial assets have been re\ufb02ected in the time band of the latest date on which they could be repaid, unless earlier repayment can be demanded by NatWest Group. Financial liabilities are included at
the earliest date on which the counterparty can require repayment, regardless of whether or not such early repayment results in a penalty. If the repayment of a \ufb01nancial instrument is triggered by, or
is subject to, speci\ufb01c criteria such as market price hurdles being reached, the asset is included in the time band that contains the latest date on which it can be repaid, regardless of early repayment.
The liability is included in the time band that contains the earliest possible date on which the conditions could be ful\ufb01lled, without considering the probability of the conditions being met.
For example, if a structured note is automatically prepaid when an equity index exceeds a certain level, the cash out\ufb02ow will be included in the less than three months period, whatever the level of the
\n
index at the year end. The settlement date of debt securities in issue, issued by certain securitisation vehicles consolidated by NatWest Group, depends on when cash \ufb02ows are received from the
\n
securitised assets. Where these assets are prepayable, the timing of the cash out\ufb02ow relating to securities assumes that each asset will be prepaid at the earliest possible date. As the repayments of
\n
assets and liabilities are linked, the repayment of assets in securitisations is shown on the earliest date that the asset can be prepaid, as this is the basis used for liabilities.
\n
The principal amounts of \ufb01nancial assets and liabilities that are repayable after 20 years or where the counterparty has no right to repayment of the principal are excluded from the table, as are
\n
interest payments after 20 years.
\n
The maturity of guarantees and commitments is based on the earliest possible date they would be drawn in order to evaluate NatWest Group\u2019s liquidity position.
\n
MFVTPL assets of \u00a3108 billion (2024 - \u00a3128 billion) and HFT liabilities of \u00a3102.6 billion (2024 - \u00a3126.3 billion) have been excluded from the following tables.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
Cash and balances at central banks
85,182
-
-
-
-
-
Derivatives held for hedging
121
164
21
153
70
69
Settlement balances
645
-
-
-
-
-
Loans to banks - amortised cost
5,544
563
778
8
19
153
Loans to customers - amortised cost
63,503
52,679
93,380
70,214
104,670
127,073
Other financial assets
(1)
4,770
7,726
26,014
11,733
24,491
8,742
Finance lease
-
3
7
14
37
26
159,765
61,135
120,200
82,122
129,287
136,063
Liabilities by contractual maturity up to 20 years
Bank deposits
26,707
2,111
10,523
2,712
3,094
-
Customer deposits
401,858
33,017
9,239
14
-
14
Settlement balances
942
-
-
-
-
-
Derivatives held for hedging
42
54
299
163
39
1
Other financial liabilities
7,547
14,212
24,824
17,301
6,804
1,218
Subordinated liabilities
68
1,193
1,742
3,676
52
342
Other liabilities - Notes in circulation
3,164
-
-
-
-
-
Lease liabilities
25
68
156
80
175
25
440,353
50,655
46,783
23,946
10,164
1,600
Guarantees and commitments - notional amount
(2)
Guarantees
(3)
2,810
-
-
-
-
-
Commitments
(4)
137,519
-
-
-
-
-
140,329
-
-
-
-
-
\n
For the notes to this table refer to the following page.
\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
92,994
-
-
-
-
-
Derivatives held for hedging
17
66
107
61
53
76
Settlement balances
2,085
-
-
-
-
-
Loans to banks - amortised cost
5,080
297
612
9
23
158
Loans to customers - amortised cost
59,702
56,264
82,995
63,857
99,837
123,946
Other financial assets
(1)
7,068
9,414
17,417
11,643
11,843
7,493
Finance lease
27
89
126
105
207
325
\u00a0
166,973
66,130
101,257
75,675
111,963
131,998
Liabilities by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
16,914
5,315
10,114
81
79
-
Customer deposits
396,703
34,316
2,713
82
-
14
Settlement balances
1,729
-
-
-
-
-
Derivatives held for hedging
63
343
335
271
43
2
Other financial liabilities
8,305
13,501
22,869
15,350
4,710
987
Subordinated liabilities
53
1,201
2,059
2,927
754
339
Other liabilities - Notes in circulation
3,316
-
-
-
-
-
Lease liabilities
24
68
185
96
168
102
\u00a0
427,107
54,744
38,275
18,807
5,754
1,444
Guarantees and commitments - notional amount
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Guarantees
(3)
3,060
-
-
-
-
-
Commitments
(4)
132,958
-
-
-
-
-
\u00a0
136,018
-
-
-
-
-
\n
(1)
Other \ufb01nancial assets exclude equity shares.
(2)
Refer to Note 25 Memorandum items \u2013 Contingent liabilities and
commitments.
(3)
NatWest Group is only called upon to satisfy a guarantee when the
guaranteed party fails to meet its obligations. NatWest Group expects
most guarantees it provides to expire unused.
(4)
NatWest Group has given commitments to provide funds to customers
under undrawn formal facilities, credit lines and other commitments to
lend subject to certain conditions being met by the counterparty. NatWest
Group does not expect all facilities to be drawn, and some may lapse
before drawdown. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00248": { "value": "Bank and customer deposits
Fair values of deposits are estimated using discounted
cash \ufb02ow valuation techniques. Where required,
methodologies can be revised as additional information
and valuation inputs become available.
11 Financial instruments \u2013 maturity analysis
This note shows the maturity pro\ufb01le of NatWest Group\u2019s \ufb01nancial assets and liabilities by contractual date of maturity and contractual cash \ufb02ows.
Remaining maturity
The following table shows the residual maturity of \ufb01nancial instruments, based on contractual date of maturity.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
Less than
More than
\u00a0
Less than
More than
\u00a0
\u00a0
12 months
12 months
Total
12 months
12 months
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
85,182
-
85,182
92,994
-
92,994
Trading assets
33,677
12,860
46,537
37,168
11,749
48,917
Derivatives
24,126
36,663
60,789
34,267
44,139
78,406
Settlement balances
645
-
645
2,085
-
2,085
Loans to banks - amortised cost
6,122
836
6,958
5,360
670
6,030
Loans to customers - amortised cost
100,120
318,761
418,881
99,793
300,533
400,326
Other financial assets
11,905
67,865
79,770
14,524
48,719
63,243
Liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
28,465
15,627
44,092
21,675
9,777
31,452
Customer deposits
434,149
8,849
442,998
430,693
2,797
433,490
Settlement balances
942
-
942
1,729
-
1,729
Trading liabilities
39,918
9,104
49,022
44,683
10,031
54,714
Derivatives
24,204
29,770
53,974
34,134
37,948
72,082
Other financial liabilities
21,029
46,570
67,599
22,773
38,314
61,087
Subordinated liabilities
1,076
5,047
6,123
1,051
5,085
6,136
Notes in circulation
3,164
-
3,164
3,316
-
3,316
Lease liabilities
85
450
535
94
536
630
\n
Assets and liabilities by contractual cash \ufb02ows up to 20 years
The tables on the following page show the contractual undiscounted cash \ufb02ows receivable and payable, up to a period of 20 years, including future receipts and payments of interest of \ufb01nancial assets
and liabilities by contractual maturity. The balances in the following tables do not agree directly with the consolidated balance sheet, as the tables include all cash \ufb02ows relating to principal and future
coupon payments, presented on an undiscounted basis. The tables have been prepared on the following basis:
Financial assets have been re\ufb02ected in the time band of the latest date on which they could be repaid, unless earlier repayment can be demanded by NatWest Group. Financial liabilities are included at
the earliest date on which the counterparty can require repayment, regardless of whether or not such early repayment results in a penalty. If the repayment of a \ufb01nancial instrument is triggered by, or
is subject to, speci\ufb01c criteria such as market price hurdles being reached, the asset is included in the time band that contains the latest date on which it can be repaid, regardless of early repayment.
The liability is included in the time band that contains the earliest possible date on which the conditions could be ful\ufb01lled, without considering the probability of the conditions being met.
\n\n\n
For example, if a structured note is automatically prepaid when an equity index exceeds a certain level, the cash out\ufb02ow will be included in the less than three months period, whatever the level of the
\n
index at the year end. The settlement date of debt securities in issue, issued by certain securitisation vehicles consolidated by NatWest Group, depends on when cash \ufb02ows are received from the
\n
securitised assets. Where these assets are prepayable, the timing of the cash out\ufb02ow relating to securities assumes that each asset will be prepaid at the earliest possible date. As the repayments of
\n
assets and liabilities are linked, the repayment of assets in securitisations is shown on the earliest date that the asset can be prepaid, as this is the basis used for liabilities.
\n
The principal amounts of \ufb01nancial assets and liabilities that are repayable after 20 years or where the counterparty has no right to repayment of the principal are excluded from the table, as are
\n
interest payments after 20 years.
\n
The maturity of guarantees and commitments is based on the earliest possible date they would be drawn in order to evaluate NatWest Group\u2019s liquidity position.
\n
MFVTPL assets of \u00a3108 billion (2024 - \u00a3128 billion) and HFT liabilities of \u00a3102.6 billion (2024 - \u00a3126.3 billion) have been excluded from the following tables.
\n\n \n
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2025
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
Cash and balances at central banks
85,182
-
-
-
-
-
Derivatives held for hedging
121
164
21
153
70
69
Settlement balances
645
-
-
-
-
-
Loans to banks - amortised cost
5,544
563
778
8
19
153
Loans to customers - amortised cost
63,503
52,679
93,380
70,214
104,670
127,073
Other financial assets
(1)
4,770
7,726
26,014
11,733
24,491
8,742
Finance lease
-
3
7
14
37
26
159,765
61,135
120,200
82,122
129,287
136,063
Liabilities by contractual maturity up to 20 years
Bank deposits
26,707
2,111
10,523
2,712
3,094
-
Customer deposits
401,858
33,017
9,239
14
-
14
Settlement balances
942
-
-
-
-
-
Derivatives held for hedging
42
54
299
163
39
1
Other financial liabilities
7,547
14,212
24,824
17,301
6,804
1,218
Subordinated liabilities
68
1,193
1,742
3,676
52
342
Other liabilities - Notes in circulation
3,164
-
-
-
-
-
Lease liabilities
25
68
156
80
175
25
440,353
50,655
46,783
23,946
10,164
1,600
Guarantees and commitments - notional amount
(2)
Guarantees
(3)
2,810
-
-
-
-
-
Commitments
(4)
137,519
-
-
-
-
-
140,329
-
-
-
-
-
\n
For the notes to this table refer to the following page.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
0-3 months
3-12 months
1-3 years
3-5 years
5-10 years
10-20 years
2024
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Cash and balances at central banks
92,994
-
-
-
-
-
Derivatives held for hedging
17
66
107
61
53
76
Settlement balances
2,085
-
-
-
-
-
Loans to banks - amortised cost
5,080
297
612
9
23
158
Loans to customers - amortised cost
59,702
56,264
82,995
63,857
99,837
123,946
Other financial assets
(1)
7,068
9,414
17,417
11,643
11,843
7,493
Finance lease
27
89
126
105
207
325
\u00a0
166,973
66,130
101,257
75,675
111,963
131,998
Liabilities by contractual maturity up to 20 years
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank deposits
16,914
5,315
10,114
81
79
-
Customer deposits
396,703
34,316
2,713
82
-
14
Settlement balances
1,729
-
-
-
-
-
Derivatives held for hedging
63
343
335
271
43
2
Other financial liabilities
8,305
13,501
22,869
15,350
4,710
987
Subordinated liabilities
53
1,201
2,059
2,927
754
339
Other liabilities - Notes in circulation
3,316
-
-
-
-
-
Lease liabilities
24
68
185
96
168
102
\u00a0
427,107
54,744
38,275
18,807
5,754
1,444
Guarantees and commitments - notional amount
(2)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Guarantees
(3)
3,060
-
-
-
-
-
Commitments
(4)
132,958
-
-
-
-
-
\u00a0
136,018
-
-
-
-
-
\n
(1)
Other \ufb01nancial assets exclude equity shares.
(2)
Refer to Note 25 Memorandum items \u2013 Contingent liabilities and
commitments.
(3)
NatWest Group is only called upon to satisfy a guarantee when the
guaranteed party fails to meet its obligations. NatWest Group expects
most guarantees it provides to expire unused.
(4)
NatWest Group has given commitments to provide funds to customers
under undrawn formal facilities, credit lines and other commitments to
lend subject to certain conditions being met by the counterparty. NatWest
Group does not expect all facilities to be drawn, and some may lapse
before drawdown. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00255": { "value": "14 Loan impairment provisions
There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, for which we hold expected credit losses (ECL). The calculation of ECL
\n
considers historical, current, and forward-looking information to determine the amount we do not expect to recover. It considers losses on both defaulted exposures and performing exposures
\n
that may default in future. ECL is recognised on drawn exposures, loans commitments, and contingent liabilities.
\n
For accounting policy information refer to Accounting policy 2.3. Further disclosures on credit risk and information on ECL methodology are shown from page 187.
\n
Loan exposure and impairment metrics
\n
The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit loss framework.
2025
2024
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
386,651
363,821
Stage 2
38,582
40,474
Stage 3
4,683
5,930
Of which: individual
1,456
1,285
Of which: collective
3,227
4,645
429,916
410,225
ECL provisions
(3)
- Stage 1
614
598
- Stage 2
796
787
- Stage 3
2,175
2,040
Of which: individual
598
451
Of which: collective
1,577
1,589
3,585
3,425
ECL provision coverage
(4)
- Stage 1 (%)
0.16
0.16
- Stage 2 (%)
2.06
1.94
- Stage 3 (%)
46.44
34.40
0.83
0.83
Continuing operations
Impairment (releases)/losses
ECL charge
(5)
671
359
Stage 1
(204)
(438)
Stage 2
421
360
Stage 3
454
437
Of which: individual
188
192
Of which: collective
266
245
Amounts written off
579
654
Of which: individual
137
144
Of which: collective
442
510
\n
(1)
The table shows gross loans only and excludes amounts that are outside the
\n
scope of the ECL framework. Refer to Financial instruments within the scope of
\n
the IFRS 9 ECL framework for further details. Other financial assets within the
\n
scope of the IFRS 9 ECL framework were cash and balances at central banks
\n
totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 - \u00a34 million) related to assets classified as FVOCI and
\n
\u00a30.1 billion (2024 - \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions divided by loans \u2013
\n
amortised cost and FVOCI. It is calculated on loans and total ECL provisions,
\n
including ECL for other (non-loan) assets and unutilised exposure. Some
\n
segments with a high proportion of debt securities or unutilised exposure may
\n
result in a not meaningful coverage ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial
\n
assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets
\n
classified as FVOCI; and \u00a33 million charge (2024 - \u00a35 million release) related to
\n
contingent liabilities.
Credit risk enhancement and mitigation
For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management \u2013 Credit risk enhancement and mitigation section.
Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00254": { "value": "14 Loan impairment provisions
There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, for which we hold expected credit losses (ECL). The calculation of ECL
\n
considers historical, current, and forward-looking information to determine the amount we do not expect to recover. It considers losses on both defaulted exposures and performing exposures
\n
that may default in future. ECL is recognised on drawn exposures, loans commitments, and contingent liabilities.
\n
For accounting policy information refer to Accounting policy 2.3. Further disclosures on credit risk and information on ECL methodology are shown from page 187.
\n
Loan exposure and impairment metrics
\n
The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit loss framework.
2025
2024
\u00a3m
\u00a3m
Loans - amortised cost and FVOCI
(1,2)
Stage 1
386,651
363,821
Stage 2
38,582
40,474
Stage 3
4,683
5,930
Of which: individual
1,456
1,285
Of which: collective
3,227
4,645
429,916
410,225
ECL provisions
(3)
- Stage 1
614
598
- Stage 2
796
787
- Stage 3
2,175
2,040
Of which: individual
598
451
Of which: collective
1,577
1,589
3,585
3,425
ECL provision coverage
(4)
- Stage 1 (%)
0.16
0.16
- Stage 2 (%)
2.06
1.94
- Stage 3 (%)
46.44
34.40
0.83
0.83
Continuing operations
Impairment (releases)/losses
ECL charge
(5)
671
359
Stage 1
(204)
(438)
Stage 2
421
360
Stage 3
454
437
Of which: individual
188
192
Of which: collective
266
245
Amounts written off
579
654
Of which: individual
137
144
Of which: collective
442
510
\n
(1)
The table shows gross loans only and excludes amounts that are outside the
\n
scope of the ECL framework. Refer to Financial instruments within the scope of
\n
the IFRS 9 ECL framework for further details. Other financial assets within the
\n
scope of the IFRS 9 ECL framework were cash and balances at central banks
\n
totalling \u00a384.1 billion (2024 \u2013 \u00a391.8 billion) and debt securities of \u00a378.4 billion
\n
(2024 \u2013 \u00a362.4 billion).
\n
(2)
Includes loans to customers and banks.
\n
(3)
Includes \u00a36 million (2024 - \u00a34 million) related to assets classified as FVOCI and
\n
\u00a30.1 billion (2024 - \u00a30.1 billion) related to off-balance sheet exposures.
\n
(4)
ECL provisions coverage is calculated as ECL provisions divided by loans \u2013
\n
amortised cost and FVOCI. It is calculated on loans and total ECL provisions,
\n
including ECL for other (non-loan) assets and unutilised exposure. Some
\n
segments with a high proportion of debt securities or unutilised exposure may
\n
result in a not meaningful coverage ratio.
\n
(5)
Includes a \u00a36 million release (2024 - \u00a312 million release) related to other financial
\n
assets, of which \u00a31 million charge (2024 - \u00a34 million release) related to assets
\n
classified as FVOCI; and \u00a33 million charge (2024 - \u00a35 million release) related to
\n
contingent liabilities.
Credit risk enhancement and mitigation
For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management \u2013 Credit risk enhancement and mitigation section.
Critical accounting policy: Loan impairment provisions
Accounting policy 2.3 sets out how the expected loss approach is applied. At 31 December 2025, impairment provisions amounted to \u00a33,585 million (2024 - \u00a33,425 million). A loan is impaired when
there is objective evidence that the cash \ufb02ows 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, signi\ufb01cant 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 \ufb02ows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS expected loss model depends on management\u2019s 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 signi\ufb01cant to the estimate of impairment losses. For further information
and sensitivity analysis, refer to Risk and capital management \u2013 Measurement uncertainty and ECL sensitivity analysis section.
IFRS 9 models
Refer to Credit risk \u2013 IFRS 9 models section 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 \u2013 Economic loss drivers - Probability weightings of scenarios section for further details.16 Intangible assets
Intangible assets, such as internally generated software and goodwill generated on business combinations, are not physical in nature. This note presents the cost of the assets, which is the
amount NatWest Group initially paid or incurred, additions and disposals during the year, and any amortisation or impairment. Amortisation is a charge that re\ufb02ects the usage of the asset and
impairment is a reduction in value arising from speci\ufb01c events identi\ufb01ed during the year.
For accounting policy information refer to Accounting policies 3.4 and 3.5.
\u00a0
2025
2024
\u00a0
Goodwill
Other (1)
Total
Goodwill
Other (1)
Total
Cost
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
10,086
4,782
14,868
10,090
4,447
14,537
Currency translation and other adjustments
-
59
59
(4)
(65)
(69)
Acquisitions of companies and businesses
-
-
-
-
-
-
Additions
-
617
617
-
614
614
Disposals and write-off of fully amortised assets
-
(9)
(9)
-
(214)
(214)
Reclassifications to assets held for sale
(2)
(155)
(43)
(198)
-
-
-
At 31 December
9,931
5,406
15,337
10,086
4,782
14,868
Accumulated amortisation and impairment
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
At 1 January
4,411
2,869
7,280
4,410
2,513
6,923
Currency translation and other adjustments
-
66
66
-
(24)
(24)
Disposals and write-off of fully amortised assets
-
(5)
(5)
-
(201)
(201)
Impairment of intangible assets
-
23
23
1
20
21
Amortisation charge for the year
-
689
689
-
561
561
Reclassifications to assets held for sale
(2)
-
(8)
(8)
-
-
-
At 31 December
4,411
3,634
8,045
4,411
2,869
7,280
Net book value at 31 December
5,520
1,772
7,292
5,675
1,913
7,588
\n
(1)
Principally consists of internally generated software.
(2)
Being reclassification of goodwill associated with Cushon to assets held for sale.
Intangible assets and goodwill are reviewed for indicators of impairment. Intangible assets were
impaired by \u00a323 million in 2025 (2024 \u2013 \u00a321 million).
NatWest Group\u2019s goodwill acquired in business combinations is reviewed for impairment annually
at 31 December by cash-generating unit (CGU): 2025 - Retail Banking \u00a32,607 million (2024 -
\u00a32,607 million), Ring-Fenced Bank Commercial & Institutional \u00a32,604 million (2024 - \u00a32,604
million), Other \u00a3309 million (2024 \u2013 \u00a3464 million). Our CGUs represent the smallest group of
assets to which we have allocated goodwill and re\ufb02ect the lowest level at which we monitor
goodwill post acquisition. Analysis by reportable segment is in Note 4 Segmental analysis.
Impairment testing involves the comparison of the carrying value of each CGU with its
recoverable amount. The carrying values of the segments re\ufb02ect the equity allocations made by
management, which are consistent with NatWest Group\u2019s capital targets. Recoverable amount is
the higher of fair value less costs of disposal and value in use. Fair value is the price that would
be received to sell an asset in an orderly transaction between market participants. Value in use is
the present value of expected future cash \ufb02ows from the CGU.
The recoverable amounts for all CGUs at 31 December 2025 were based on value in use, using
management's latest \ufb01ve-year revenue and cost forecasts. These are discounted cash \ufb02ow
projections over \ufb01ve years. The forecast is then extrapolated in perpetuity using a long-term
growth rate to compute a terminal value, which comprises the majority of the value in use. The
long-term growth rates have been based on expected growth of the CGUs (2024 and 2025 \u2013
1.4%). The 2025 pre-tax risk discount rates are informed by our view of the rates of relevant
comparable companies using data from market brokers, our Capital Asset Pricing Model and the
Warranted Equity Value method. Using the selected post-tax discount rate, the implied pre-tax
discount rate is then determined for calculating the equivalent value in use \ufb01gure. Pre-tax
discount rates for the CGUs are: Retail Banking \u2013 16% (2024 \u2013 16%), Ring-Fenced Bank
Commercial & Institutional and Private Banking & Wealth Management \u2013 16.9% (2024 \u2013 16%),
RBS International \u2013 16.7% (2024 \u2013 14.6%).", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00256": { "value": "16 Intangible assets
Intangible assets, such as internally generated software and goodwill generated on business combinations, are not physical in nature. This note presents the cost of the assets, which is the
amount NatWest Group initially paid or incurred, additions and disposals during the year, and any amortisation or impairment. Amortisation is a charge that re\ufb02ects the usage of the asset and
impairment is a reduction in value arising from speci\ufb01c events identi\ufb01ed during the year.
For accounting policy information refer to Accounting policies 3.4 and 3.5.
\u00a0
2025
2024
\u00a0
Goodwill
Other (1)
Total
Goodwill
Other (1)
Total
Cost
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
10,086
4,782
14,868
10,090
4,447
14,537
Currency translation and other adjustments
-
59
59
(4)
(65)
(69)
Acquisitions of companies and businesses
-
-
-
-
-
-
Additions
-
617
617
-
614
614
Disposals and write-off of fully amortised assets
-
(9)
(9)
-
(214)
(214)
Reclassifications to assets held for sale
(2)
(155)
(43)
(198)
-
-
-
At 31 December
9,931
5,406
15,337
10,086
4,782
14,868
Accumulated amortisation and impairment
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
At 1 January
4,411
2,869
7,280
4,410
2,513
6,923
Currency translation and other adjustments
-
66
66
-
(24)
(24)
Disposals and write-off of fully amortised assets
-
(5)
(5)
-
(201)
(201)
Impairment of intangible assets
-
23
23
1
20
21
Amortisation charge for the year
-
689
689
-
561
561
Reclassifications to assets held for sale
(2)
-
(8)
(8)
-
-
-
At 31 December
4,411
3,634
8,045
4,411
2,869
7,280
Net book value at 31 December
5,520
1,772
7,292
5,675
1,913
7,588
\n
(1)
Principally consists of internally generated software.
(2)
Being reclassification of goodwill associated with Cushon to assets held for sale.
Intangible assets and goodwill are reviewed for indicators of impairment. Intangible assets were
impaired by \u00a323 million in 2025 (2024 \u2013 \u00a321 million).
NatWest Group\u2019s goodwill acquired in business combinations is reviewed for impairment annually
at 31 December by cash-generating unit (CGU): 2025 - Retail Banking \u00a32,607 million (2024 -
\u00a32,607 million), Ring-Fenced Bank Commercial & Institutional \u00a32,604 million (2024 - \u00a32,604
million), Other \u00a3309 million (2024 \u2013 \u00a3464 million). Our CGUs represent the smallest group of
assets to which we have allocated goodwill and re\ufb02ect the lowest level at which we monitor
goodwill post acquisition. Analysis by reportable segment is in Note 4 Segmental analysis.
Impairment testing involves the comparison of the carrying value of each CGU with its
recoverable amount. The carrying values of the segments re\ufb02ect the equity allocations made by
management, which are consistent with NatWest Group\u2019s capital targets. Recoverable amount is
the higher of fair value less costs of disposal and value in use. Fair value is the price that would
be received to sell an asset in an orderly transaction between market participants. Value in use is
the present value of expected future cash \ufb02ows from the CGU.
The recoverable amounts for all CGUs at 31 December 2025 were based on value in use, using
management's latest \ufb01ve-year revenue and cost forecasts. These are discounted cash \ufb02ow
projections over \ufb01ve years. The forecast is then extrapolated in perpetuity using a long-term
growth rate to compute a terminal value, which comprises the majority of the value in use. The
long-term growth rates have been based on expected growth of the CGUs (2024 and 2025 \u2013
1.4%). The 2025 pre-tax risk discount rates are informed by our view of the rates of relevant
comparable companies using data from market brokers, our Capital Asset Pricing Model and the
Warranted Equity Value method. Using the selected post-tax discount rate, the implied pre-tax
discount rate is then determined for calculating the equivalent value in use \ufb01gure. Pre-tax
discount rates for the CGUs are: Retail Banking \u2013 16% (2024 \u2013 16%), Ring-Fenced Bank
Commercial & Institutional and Private Banking & Wealth Management \u2013 16.9% (2024 \u2013 16%),
RBS International \u2013 16.7% (2024 \u2013 14.6%).", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00257": { "value": "16 Intangible assets
Intangible assets, such as internally generated software and goodwill generated on business combinations, are not physical in nature. This note presents the cost of the assets, which is the
amount NatWest Group initially paid or incurred, additions and disposals during the year, and any amortisation or impairment. Amortisation is a charge that re\ufb02ects the usage of the asset and
impairment is a reduction in value arising from speci\ufb01c events identi\ufb01ed during the year.
For accounting policy information refer to Accounting policies 3.4 and 3.5.
\u00a0
2025
2024
\u00a0
Goodwill
Other (1)
Total
Goodwill
Other (1)
Total
Cost
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
10,086
4,782
14,868
10,090
4,447
14,537
Currency translation and other adjustments
-
59
59
(4)
(65)
(69)
Acquisitions of companies and businesses
-
-
-
-
-
-
Additions
-
617
617
-
614
614
Disposals and write-off of fully amortised assets
-
(9)
(9)
-
(214)
(214)
Reclassifications to assets held for sale
(2)
(155)
(43)
(198)
-
-
-
At 31 December
9,931
5,406
15,337
10,086
4,782
14,868
Accumulated amortisation and impairment
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
At 1 January
4,411
2,869
7,280
4,410
2,513
6,923
Currency translation and other adjustments
-
66
66
-
(24)
(24)
Disposals and write-off of fully amortised assets
-
(5)
(5)
-
(201)
(201)
Impairment of intangible assets
-
23
23
1
20
21
Amortisation charge for the year
-
689
689
-
561
561
Reclassifications to assets held for sale
(2)
-
(8)
(8)
-
-
-
At 31 December
4,411
3,634
8,045
4,411
2,869
7,280
Net book value at 31 December
5,520
1,772
7,292
5,675
1,913
7,588
\n
(1)
Principally consists of internally generated software.
(2)
Being reclassification of goodwill associated with Cushon to assets held for sale.
Intangible assets and goodwill are reviewed for indicators of impairment. Intangible assets were
impaired by \u00a323 million in 2025 (2024 \u2013 \u00a321 million).
NatWest Group\u2019s goodwill acquired in business combinations is reviewed for impairment annually
at 31 December by cash-generating unit (CGU): 2025 - Retail Banking \u00a32,607 million (2024 -
\u00a32,607 million), Ring-Fenced Bank Commercial & Institutional \u00a32,604 million (2024 - \u00a32,604
million), Other \u00a3309 million (2024 \u2013 \u00a3464 million). Our CGUs represent the smallest group of
assets to which we have allocated goodwill and re\ufb02ect the lowest level at which we monitor
goodwill post acquisition. Analysis by reportable segment is in Note 4 Segmental analysis.
Impairment testing involves the comparison of the carrying value of each CGU with its
recoverable amount. The carrying values of the segments re\ufb02ect the equity allocations made by
management, which are consistent with NatWest Group\u2019s capital targets. Recoverable amount is
the higher of fair value less costs of disposal and value in use. Fair value is the price that would
be received to sell an asset in an orderly transaction between market participants. Value in use is
the present value of expected future cash \ufb02ows from the CGU.
The recoverable amounts for all CGUs at 31 December 2025 were based on value in use, using
management's latest \ufb01ve-year revenue and cost forecasts. These are discounted cash \ufb02ow
projections over \ufb01ve years. The forecast is then extrapolated in perpetuity using a long-term
growth rate to compute a terminal value, which comprises the majority of the value in use. The
long-term growth rates have been based on expected growth of the CGUs (2024 and 2025 \u2013
1.4%). The 2025 pre-tax risk discount rates are informed by our view of the rates of relevant
comparable companies using data from market brokers, our Capital Asset Pricing Model and the
Warranted Equity Value method. Using the selected post-tax discount rate, the implied pre-tax
discount rate is then determined for calculating the equivalent value in use \ufb01gure. Pre-tax
discount rates for the CGUs are: Retail Banking \u2013 16% (2024 \u2013 16%), Ring-Fenced Bank
Commercial & Institutional and Private Banking & Wealth Management \u2013 16.9% (2024 \u2013 16%),
RBS International \u2013 16.7% (2024 \u2013 14.6%).", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00258": { "value": "16 Intangible assets
Intangible assets, such as internally generated software and goodwill generated on business combinations, are not physical in nature. This note presents the cost of the assets, which is the
amount NatWest Group initially paid or incurred, additions and disposals during the year, and any amortisation or impairment. Amortisation is a charge that re\ufb02ects the usage of the asset and
impairment is a reduction in value arising from speci\ufb01c events identi\ufb01ed during the year.
For accounting policy information refer to Accounting policies 3.4 and 3.5.
\u00a0
2025
2024
\u00a0
Goodwill
Other (1)
Total
Goodwill
Other (1)
Total
Cost
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
10,086
4,782
14,868
10,090
4,447
14,537
Currency translation and other adjustments
-
59
59
(4)
(65)
(69)
Acquisitions of companies and businesses
-
-
-
-
-
-
Additions
-
617
617
-
614
614
Disposals and write-off of fully amortised assets
-
(9)
(9)
-
(214)
(214)
Reclassifications to assets held for sale
(2)
(155)
(43)
(198)
-
-
-
At 31 December
9,931
5,406
15,337
10,086
4,782
14,868
Accumulated amortisation and impairment
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
At 1 January
4,411
2,869
7,280
4,410
2,513
6,923
Currency translation and other adjustments
-
66
66
-
(24)
(24)
Disposals and write-off of fully amortised assets
-
(5)
(5)
-
(201)
(201)
Impairment of intangible assets
-
23
23
1
20
21
Amortisation charge for the year
-
689
689
-
561
561
Reclassifications to assets held for sale
(2)
-
(8)
(8)
-
-
-
At 31 December
4,411
3,634
8,045
4,411
2,869
7,280
Net book value at 31 December
5,520
1,772
7,292
5,675
1,913
7,588
\n
(1)
Principally consists of internally generated software.
(2)
Being reclassification of goodwill associated with Cushon to assets held for sale.
Intangible assets and goodwill are reviewed for indicators of impairment. Intangible assets were
impaired by \u00a323 million in 2025 (2024 \u2013 \u00a321 million).
NatWest Group\u2019s goodwill acquired in business combinations is reviewed for impairment annually
at 31 December by cash-generating unit (CGU): 2025 - Retail Banking \u00a32,607 million (2024 -
\u00a32,607 million), Ring-Fenced Bank Commercial & Institutional \u00a32,604 million (2024 - \u00a32,604
million), Other \u00a3309 million (2024 \u2013 \u00a3464 million). Our CGUs represent the smallest group of
assets to which we have allocated goodwill and re\ufb02ect the lowest level at which we monitor
goodwill post acquisition. Analysis by reportable segment is in Note 4 Segmental analysis.
Impairment testing involves the comparison of the carrying value of each CGU with its
recoverable amount. The carrying values of the segments re\ufb02ect the equity allocations made by
management, which are consistent with NatWest Group\u2019s capital targets. Recoverable amount is
the higher of fair value less costs of disposal and value in use. Fair value is the price that would
be received to sell an asset in an orderly transaction between market participants. Value in use is
the present value of expected future cash \ufb02ows from the CGU.
The recoverable amounts for all CGUs at 31 December 2025 were based on value in use, using
management's latest \ufb01ve-year revenue and cost forecasts. These are discounted cash \ufb02ow
projections over \ufb01ve years. The forecast is then extrapolated in perpetuity using a long-term
growth rate to compute a terminal value, which comprises the majority of the value in use. The
long-term growth rates have been based on expected growth of the CGUs (2024 and 2025 \u2013
1.4%). The 2025 pre-tax risk discount rates are informed by our view of the rates of relevant
comparable companies using data from market brokers, our Capital Asset Pricing Model and the
Warranted Equity Value method. Using the selected post-tax discount rate, the implied pre-tax
discount rate is then determined for calculating the equivalent value in use \ufb01gure. Pre-tax
discount rates for the CGUs are: Retail Banking \u2013 16% (2024 \u2013 16%), Ring-Fenced Bank
Commercial & Institutional and Private Banking & Wealth Management \u2013 16.9% (2024 \u2013 16%),
RBS International \u2013 16.7% (2024 \u2013 14.6%).", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00262": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00260": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00259": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00303": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years27 Analysis of the net investment in business interests and intangible assets
This note shows cash \ufb02ows relating to obtaining or losing signi\ufb01cant in\ufb02uence in associates or control of subsidiaries and net assets and liabilities purchased and sold.
These cash \ufb02ows are presented as investing activities on the cash \ufb02ow statement.
\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Fair value given for business acquired
-
-
(139)
Acquisition of interest in associates
(14)
(4)
-
Additional investment in associates
-
(1)
(5)
Cash paid for assets and liabilities purchased
244
(2,296)
-
Net inflow/(outflow) of cash in respect of acquisitions
230
(2,301)
(144)
Disposal of net assets and liabilities
-
1,003
5,560
Loss on disposal of net assets and liabilities
-
(8)
(87)
Net inflow of cash in respect of disposals
-
995
5,473
Dividends received from associate
19
1
16
Net cash expenditure on intangible assets
(617)
(614)
(744)
Net (outflow)/inflow of cash
(368)
(1,919)
4,601
Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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.
Amounts included in the NatWest Group financial statements, in aggregate, by category of
related party are as follows:
Associates and joint
Equity
ventures
shares (1)
Total
31 December 2025
\u00a3m
\u00a3m
\u00a3m
Investments
753
1
754
Loans to customers - amortised cost
-
4
4
Customer deposits
1
-
1
Other comprehensive income
-
33
33
Other operating income
69
10
79
31 December 2024
Investments
690
122
812
Loans to customers - amortised cost
-
4
4
Customer deposits
1
1
2
Other comprehensive income
-
(22)
(22)
Other operating income
19
-
19
(1)
Represents investments in entities where ownership is more than 10%", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00302": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years27 Analysis of the net investment in business interests and intangible assets
This note shows cash \ufb02ows relating to obtaining or losing signi\ufb01cant in\ufb02uence in associates or control of subsidiaries and net assets and liabilities purchased and sold.
These cash \ufb02ows are presented as investing activities on the cash \ufb02ow statement.
\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Fair value given for business acquired
-
-
(139)
Acquisition of interest in associates
(14)
(4)
-
Additional investment in associates
-
(1)
(5)
Cash paid for assets and liabilities purchased
244
(2,296)
-
Net inflow/(outflow) of cash in respect of acquisitions
230
(2,301)
(144)
Disposal of net assets and liabilities
-
1,003
5,560
Loss on disposal of net assets and liabilities
-
(8)
(87)
Net inflow of cash in respect of disposals
-
995
5,473
Dividends received from associate
19
1
16
Net cash expenditure on intangible assets
(617)
(614)
(744)
Net (outflow)/inflow of cash
(368)
(1,919)
4,601
Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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.
Amounts included in the NatWest Group financial statements, in aggregate, by category of
related party are as follows:
Associates and joint
Equity
ventures
shares (1)
Total
31 December 2025
\u00a3m
\u00a3m
\u00a3m
Investments
753
1
754
Loans to customers - amortised cost
-
4
4
Customer deposits
1
-
1
Other comprehensive income
-
33
33
Other operating income
69
10
79
31 December 2024
Investments
690
122
812
Loans to customers - amortised cost
-
4
4
Customer deposits
1
1
2
Other comprehensive income
-
(22)
(22)
Other operating income
19
-
19
(1)
Represents investments in entities where ownership is more than 10%", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00261": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00263": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00268": { "value": "17 Other assets
Other assets are non-\ufb01nancial assets and re\ufb02ect a grouping of assets that are not large enough to present separately on the balance sheet.
.
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Interests in associates
(1)
753
690
Property, plant and equipment
(2)
4,282
3,967
Pension schemes in net surplus (Note 5)
234
190
Tax recoverable
71
7
Deferred tax (Note 7)
1,252
1,876
Assets of disposal groups
229
64
Other
1,678
1,602
Other assets
8,499
8,396
\n
(1)
Includes interest in Business Growth Fund \u00a3730 million (2024 - \u00a3678 million).
(2)
The estimated useful lives of NatWest Group\u2019s property, plant and equipment
are: freehold buildings and long leasehold 50 years, short leaseholds for
unexpired period of lease, property adaptation costs 10 to 15 years, computer
equipment up to 5 years and other equipment 4 to 15 years
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00265": { "value": "19 Subordinated liabilities
Subordinated liabilities are debt securities that, in the event of winding up or bankruptcy, rank below other liabilities for interest payments and repayment.
For accounting policy information refer to Accounting policies 3.8 and 3.10.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2025
2024
\u00a0
\u00a3m
\u00a3m
Dated loan capital
5,983
5,996
Undated loan capital
21
21
Preference shares
119
119
\u00a0
6,123
6,136
\n
Certain preference shares issued by the company are classi\ufb01ed as liabilities; these securities remain subject to the capital maintenance rules of the Companies Act 2006.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
First call
Maturity
Capital
2025
2024
Dated loan capital
\u00a0
date
date
treatment
\u00a3m
\u00a3m
NatWest Group plc
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a31,000 million
3.622% notes
May-25
Aug-30
Tier 2
-
1,006
\u00a31,000 million
2.105% notes
Aug-26
Nov-31
Tier 2
1,002
1,001
\u20ac1,000 million
3.723% notes
Feb-30
Feb-35
Tier 2
898
-
$1,000 million
6.475% notes
Mar-29
Jun-34
Tier 2
746
799
$850 million
3.032% notes
Aug-30
Nov-35
Tier 2
547
550
\u20ac750 million
1.043% notes
Jun-27
Sep-32
Tier 2
656
624
\u20ac700 million
5.763% notes
Nov-28
Feb-34
Tier 2
640
608
\u00a3650 million
7.416% notes
Mar-28
Jun-33
Tier 2
655
644
\u00a3600 million
5.642% notes
Oct-29
Oct-34
Tier 2
605
608
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
5,749
5,840
Other subsidiaries
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u20ac170 million
Floating rate notes
-
Feb-41
Not applicable
237
234
$150 million
7.125% notes
-
Oct-93
Not applicable
17
17
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
6,003
6,091
Fair value hedging
\u00a0 \u00a0 \u00a0 \u00a0
(20)
(95)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
5,983
5,996
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
First call
Maturity
Capital
2025
2024
Undated loan capital
\u00a0
date
date
treatment
\u00a3m
\u00a3m
Other subsidiaries
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a331 million
7.380% notes
-
-
Not applicable
1
1
\u00a316 million
5.630% notes
Sep-26
-
Not applicable
17
17
\u00a34.9 million
2.500% fixed notes
-
-
Not applicable
3
3
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
21
21
Preference shares
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Other subsidiaries
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a3140 million
Non-cumulative preference shares of \u00a31
-
-
Not applicable
119
119
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
119
119
Total
\u00a0 \u00a0 \u00a0 \u00a0
6,123
6,136
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00264": { "value": "20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00267": { "value": "20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).
Provisions for liabilities and charges
\u00a0 \u00a0
Litigation and
\u00a0
Commitments
\u00a0 \u00a0
\u00a0
Customer redress
other regulatory
Property
and guarantees
Other (1)
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
420
128
90
55
171
864
Expected credit loss impairment release
-
-
-
3
-
3
Currency translation and other movements
1
(7)
-
-
3
(3)
Charge to income statement
78
39
26
-
220
363
Release to income statement
(42)
(50)
(24)
-
(46)
(162)
Provisions utilised
(175)
(46)
(19)
-
(206)
(446)
At 31 December 2025
282
64
73
58
142
619
\n
(1)
Other materially comprises provisions for restructuring costs and provision for
Bank of England Levy.
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 out\ufb02ow of economic bene\ufb01t is probable and the out\ufb02ow can
be estimated reliably. Any difference between the \ufb01nal 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 3.12.
Background information on all material provisions is given in Note 25
.", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00266": { "value": "20 Other liabilities
Other liabilities are amounts due to third parties that are not \ufb01nancial liabilities, including lease liabilities held at amortised cost. Other liabilities represent, for example, amounts due for goods
and services that have been received but not invoiced,
tax due to HMRC, and retirement bene\ufb01t liabilities. Liabilities which have a level of uncertainty regarding their timing or the future cost
to settle them are included in other liabilities as provisions for liabilities and charges.
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n
(1)
Other liabilities include liabilities of disposal groups of \u00a327 million (2024 - nil).
Provisions for liabilities and charges
\u00a0 \u00a0
Litigation and
\u00a0
Commitments
\u00a0 \u00a0
\u00a0
Customer redress
other regulatory
Property
and guarantees
Other (1)
Total
\u00a0
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2025
420
128
90
55
171
864
Expected credit loss impairment release
-
-
-
3
-
3
Currency translation and other movements
1
(7)
-
-
3
(3)
Charge to income statement
78
39
26
-
220
363
Release to income statement
(42)
(50)
(24)
-
(46)
(162)
Provisions utilised
(175)
(46)
(19)
-
(206)
(446)
At 31 December 2025
282
64
73
58
142
619
\n
(1)
Other materially comprises provisions for restructuring costs and provision for
Bank of England Levy.
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 out\ufb02ow of economic bene\ufb01t is probable and the out\ufb02ow can
be estimated reliably. Any difference between the \ufb01nal 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 3.12.
Background information on all material provisions is given in Note 25
.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00306": { "value": "
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00304": { "value": "
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00305": { "value": "
\u00a0
2025
2024
Other liabilities
\u00a3m
\u00a3m
Lease liabilities
535
630
Provisions for liabilities and charges
619
864
Retirement benefit liabilities (Note 5)
78
80
Accruals
1,350
1,353
Deferred income
422
394
Current tax
76
263
Deferred tax (Note 7)
104
99
Other liabilities
(1)
842
918
Total
4,026
4,601
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00271": { "value": "21 Share capital and other equity
Share capital consists of ordinary shares and preference shares and is measured as the number of shares allotted and fully paid, multiplied by the nominal value of a share. Other equity
\n
includes paid-in equity, merger reserve, capital redemption reserve and own shares held.
\n
For accounting policy information refer to Accounting policy 3.10.
Number of shares
2025
2024
2025
2024
Allotted, called up and fully paid
\u00a3m
\u00a3m
000s
000s
Ordinary shares of \u00a31.0769
(1)
8,860
8,972
8,227,042
8,331,145
Cumulative preference shares of \u00a31
0.5
0.5
483.0
483.0
\n
(1)
The nominal value of ordinary shares without rounding is \u00a31.076923076923077 per share.
Number of shares
Movement in allotted, called up and fully paid ordinary shares
\u00a3m
000s
At 31 December 2023
9,683
8,991,737
Share cancellation
(711)
(660,592)
At 31 December 2024
8,972
8,331,145
Share cancellation
(112)
(104,103)
At 31 December 2025
8,860
8,227,042
\n
Ordinary shares
\n
There is no authorised share capital under the company\u2019s constitution. At 31 December 2025, the
\n
directors had authority granted at the 2025 Annual General Meeting (AGM) to issue up to \u00a3435
\n
million nominal of ordinary shares other than by pre-emption to existing shareholders.
\n
On-market purchases
\n
At the AGM in 2025, shareholders renewed the authority (2025 Authority) for the company to
\n
make on-market purchases of up to 807,750,182 ordinary shares. The directors used the 2025
\n
Authority to carry out a share buyback programme (the 2025 Programme) of up to \u00a3750
\n
million, as announced to the market on 28 July 2025.
\n
The 2025 Programme started on 28 July 2025 and will end no later than 13 February 2026,
\n
provided that the term of the 2025 Programme may be extended to end no later than 13 March
\n
2026 to account for any days where usual trading has not been possible because of market
\n
events during the term of the 2025 Programme.
\n
As at 31 December 2025, 104,103,117 ordinary shares (nominal value \u00a3112,111,049) have been
\n
purchased by the company under the 2025 Programme at a volume weighted average price of
\n
551.8173 pence per ordinary share for a total consideration of \u00a3574,458,965. All of the
\n
purchased ordinary shares were cancelled, representing 1.27% of the company\u2019s issued ordinary
\n
share capital.
\n
Off-market purchases
\n
The authority from shareholders to make off-market purchases of ordinary shares from HMT (or
\n
its nominee) was renewed at the 2025 AGM.
\n
The company did not make any off-market purchases under this authority in 2025.
\n
Dividends
\n
In 2025 NatWest Group paid an interim dividend of \u00a3768 million, or 9.5 pence per ordinary share
\n
(2024 \u2013 \u00a3498 million, or 6 pence per ordinary share).
\n
The company has announced that the directors have recommended a \ufb01nal dividend of \u00a31.8
\n
billion, or 23.0 pence per ordinary share (2024 \u2013 \u00a31.2 billion, or 15.5 pence per ordinary share).
\n
The \ufb01nal dividend recommended by directors is subject to shareholders\u2019 approval at the AGM on
\n
28 April 2026. If approved, payment will be made on 5 May 2026 to shareholders on the register
\n
at the close of business on 20 March 2026. The ex-dividend date will be 19 March 2026.
\n
Cumulative preference shares
\n
At the AGM in 2025, shareholders renewed the authority for the company to make an off-market
\n
purchase of its preference shares. Shareholders will be asked to renew the authority at the AGM
\n
in 2026.
Other equity
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Additional Tier 1 notes
$1.15 billion 8.000% notes callable August 2025
-
736
735
$1.50 billion 6.000% notes callable
December 2025 - June 2026
-
1,220
1,220
\u00a31.00 billion 5.125% notes callable May - November 2027
(1)
998
998
998
\u00a30.40 billion 4.5% notes callable March 2028
(2)
399
399
399
$0.75 billion 4.6% notes callable June 2031
(3)
539
539
538
\u00a30.75 billion 7.50% notes callable February 2032
(4)
748
-
-
$1.00 billion 8.125% notes callable November 2033
(5)
798
798
-
$0.75 billion 7.3% notes callable November 2034
(6)
590
590
-
\u00a30.50 billion 7.625% notes callable February 2035
(7)
499
-
-
4,571
5,280
3,890
\n
(1)
Issued in November 2020. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
(2)
Issued in March 2021. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
(3)
Issued in June 2021. In the event of conversion, converted into ordinary shares at a price of $2.462 (translated at applicable
\n
exchange rate) per share.
\n
(4)
Issued in March 2025. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
(5)
Issued in May 2024. In the event of conversion, converted into ordinary shares at a price of $2.205 (translated at applicable
\n
exchange rate) per share.
\n
(6)
Issued in November 2024. In the event of conversion, converted into ordinary shares at a price of $2.226 (translated at applicable
\n
exchange rate) per share.
\n
(7)
Issued in September 2025. In the event of conversion, converted into ordinary shares at a price of \u00a31.764 per share.
\n
Paid-in equity
-
comprises equity instruments
\n
issued by the company other than those legally
\n
constituted as shares.
\n
Additional Tier 1 instruments issued by NatWest
\n
Group plc having the legal form of debt are
\n
classi\ufb01ed as equity under IFRS. The coupons on
\n
these instruments are non-cumulative and
\n
payable at the company\u2019s discretion. In the event
\n
NatWest Group\u2019s CET1 ratio falls below 7% any
\n
outstanding instruments will be converted into
\n
ordinary shares at a \ufb01xed price.
\n
Capital recognised for regulatory purposes cannot
\n
be redeemed without Prudential Regulation
\n
Authority consent. This includes ordinary shares,
\n
preference shares and Additional Tier
\n
1
instruments.", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00273": { "value": "Dividends
In 2025 NatWest Group paid an interim dividend of \u00a3768 million, or 9.5 pence per ordinary share
\n
(2024 \u2013 \u00a3498 million, or 6 pence per ordinary share).
\n
The company has announced that the directors have recommended a \ufb01nal dividend of \u00a31.8
\n
billion, or 23.0 pence per ordinary share (2024 \u2013 \u00a31.2 billion, or 15.5 pence per ordinary share).
\n
The \ufb01nal dividend recommended by directors is subject to shareholders\u2019 approval at the AGM on
\n
28 April 2026. If approved, payment will be made on 5 May 2026 to shareholders on the register
\nat the close of business on 20 March 2026. The ex-dividend date will be 19 March 2026.", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00275": { "value": "1800000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00276": { "value": "0.23", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP/xbrli:shares" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00307": { "value": "Own shares held
-
at 31 December 2025, 10
\n
million ordinary shares of \u00a31.0769 each of the
\n
company (2024 - 11 million) were held by
\n
employee share trusts in respect of share awards
\n
and options granted to employees.
\n
During 2025, the employee share trusts
\n
purchased no ordinary shares and delivered 1
\n
million ordinary shares in satisfaction of the
\n
exercise of options and the vesting of share
\n
awards under the employee share plans. The
\n
company retains the \ufb02exibility to use newly issued
\n
shares, shares purchased by the NatWest Group
\n
Employee Share Ownership Trust and any
\n
available treasury shares to satisfy obligations
\n
under its employee share plans.
\n
The company does not use performance
\n
conditions or targets based on earnings per share
\n
(EPS), total shareholder return (TSR), and net
\n
asset value (NAV) in connection with its employee
\n
share plans.
\n
The company has used a total of 56 million
\n
treasury shares in 2025 to satisfy the exercise of
\n
options and the vesting of share awards under
\n
the employee share plans. The balance of
\n
ordinary shares held in treasury as at 31
\n
December 2025 was 221 million.
\n
NatWest Group plc optimises capital ef\ufb01ciency by
\n
maintaining reserves in subsidiaries, including
\n
regulated entities. Certain preference shares and
\n
subordinated debt are also included within
\n
regulatory capital. The remittance of reserves to
\n
the company or the redemption of shares or
\n
subordinated capital by regulated entities may be
\n
subject to maintaining the capital resources
\n
required by the relevant regulator.
\n
UK law prescribes that only the reserves of the
\n
company are taken into account for the purpose
\n
of making distributions and in determining
\n
permissible applications of the share premium
account.", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00272": { "value": "22 Structured entities
A structured entity (SE) is an entity that has been designed such that voting or similar rights are not the dominant factor in deciding who controls the entity, for example, when any voting
rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. SEs are usually established for a speci\ufb01c, limited purpose. They do not
carry out a business or trade and typically have no employees.
Securitisations
In a securitisation, assets, or interests in a
pool of assets, are transferred, or the credit
risk is transferred via a derivative or \ufb01nancial
guarantee to a SE which then issues
liabilities to third party investors.
NatWest Group\u2019s involvement in client
securitisations takes a number of forms. It
may provide secured \ufb01nance to, or purchase
asset-backed notes from, client sponsored
SEs secured on assets transferred by the
client entity; purchase asset backed
securities issued by client sponsored SEs in
the primary or secondary markets; or
provide liquidity facilities to client sponsored
SEs. In addition, NatWest Group arranges or
acts as lead manager or placement agent in
client primary markets securitisations.
NatWest Group provides portfolio structured
derivative hedging solutions to clients.
NatWest Group undertakes own-asset
securitisations to transfer the credit risk on
portfolios of \ufb01nancial assets. In 2025 NatWest
Group transacted an own-asset RMBS via a
sponsored unconsolidated SE, resulting in
\u00a32.1 billion of residential mortgage assets
being derecognised from the NatWest Group
balance sheet.
Other credit risk transfer
securitisations
NatWest Group transfers credit risk on
originated loans and mortgages without the
transfer of assets to a SE. As part of this,
NatWest Group enters into credit derivative
and \ufb01nancial guarantee contracts with
consolidated SEs. At 31 December 2025,
debt securities in issue by such SEs (and held
by third parties) were \u00a31,663 million (2024 -
\u00a31,175 million). The associated loans and
mortgages at 31 December 2025 were
\u00a324,535 million (2024 - \u00a313,226 million). At
31 December, ECL in relation to non -
defaulted assets was reduced by \u00a343 million
(2024 - \u00a343 million) as a result of \ufb01nancial
guarantee contracts with consolidated SEs.
Covered debt programme
Group companies have assigned loans to
customers and debt investments to
bankruptcy remote limited liability
partnerships to provide security for issues of
debt securities. NatWest Group retains all of
the risks and rewards of these assets and
continues to recognise them. The
partnerships are consolidated by NatWest
Group and the related covered bonds
included within other \ufb01nancial liabilities. At 31
December 2025, \u00a38,278 million (2024 -
\u00a39,668 million) of loans to customers
provided security for debt securities in issue
and other borrowing of \u00a32,935 million (2024
- \u00a32,305 million).
Lending of own issued securities
Where the NatWest Group issues and retains
debt securities it does not recognise them.
From time to time the NatWest Group issues,
retains, and lends debt securities under
bespoke securities lending and repurchase
\ufb01nancing arrangements. Under standard
terms in the UK and US markets, the
recipient has an unrestricted right to sell or
repledge collateral, subject to returning
equivalent securities on maturity of the
transaction. NatWest Group retains all of the
risks and rewards of own issued liabilities lent
or sold under such arrangements and,
where the ability of the recipient to sell or
pledge the asset is restricted under a
bespoke arrangement, does not recognise
them. At 31 December 2025, \u00a34,580 million
(2024 - \u00a34,715 million) of secured own
issued liabilities have been retained and lent
under securities lending and repurchase
\ufb01nancing arrangements, total retained
secured own issued liabilities \u00a38,156 million
(2024 - \u00a36,956 million).
At 31 December 2025, \u00a35,071 million (2024 - \u00a34,878 million) of loans and other debt instruments
provided security for secured own issued liabilities that have been retained and lent under securities
lending and repurchase \ufb01nancing arrangements, total loans and other debt instruments providing
security for retained secured own issued liabilities \u00a310,872 million (2024 - \u00a310,770 million).
Unconsolidated structured entities
The term \u2018unconsolidated structured entities\u2019 refers to structured entities not controlled by NatWest
Group, and which are established either by NatWest Group or a third party. An interest in a
structured entity is any form of contractual or non-contractual involvement which creates variability
in returns for NatWest Group arising from the performance of the entity. Such interests include
holdings of debt or equity securities, derivatives that transfer \ufb01nancial risks from the entity to
NatWest Group, provision of lending and loan commitments, \ufb01nancial guarantees and investment
management agreements. NatWest Group enters into transactions with unconsolidated structured
entities in the normal course of business to facilitate customer transactions, to provide risk
management services and for speci\ufb01c investment opportunities. Structured entities may take the
form of funds, trusts, partnerships, securitisation vehicles, and private investment companies.
NatWest Group considers itself to be the sponsor of a structured entity where it is primarily involved
in the set up and design of the entity and where NatWest Group transfers assets to the entity,
markets products associated with the entity in its own name, and/or provides guarantees in relation
to the performance of the entity. The nature and extent of NatWest Group\u2019s interests in
unconsolidated structured entities is summarised in the following table:
2025
2024
Asset-backed
Investment
Asset-backed
Investment
securitisation
funds
securitisation
funds
vehicles
and other
Total
vehicles
and other
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Assets
Trading assets
122
28
150
252
216
468
Derivatives
96
-
96
94
-
94
Loans to customers
7,471
1,736
9,207
5,399
1,601
7,000
Other financial assets
17,504
723
18,227
15,744
923
16,667
Total
25,193
2,487
27,680
21,489
2,740
24,229
Liabilities
Derivatives
82
2
84
153
8
161
Total
82
2
84
153
8
161
Off balance sheet
Liquidity facilities/loan
commitments
2,374
416
2,790
2,134
457
2,591
Guarantees
-
546
546
-
104
104
Total
2,374
962
3,336
2,134
561
2,695
Maximum exposure
27,485
3,447
30,932
23,470
3,293
26,763
Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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.
Amounts included in the NatWest Group financial statements, in aggregate, by category of
related party are as follows:
Associates and joint
Equity
ventures
shares (1)
Total
31 December 2025
\u00a3m
\u00a3m
\u00a3m
Investments
753
1
754
Loans to customers - amortised cost
-
4
4
Customer deposits
1
-
1
Other comprehensive income
-
33
33
Other operating income
69
10
79
31 December 2024
Investments
690
122
812
Loans to customers - amortised cost
-
4
4
Customer deposits
1
1
2
Other comprehensive income
-
(22)
(22)
Other operating income
19
-
19
(1)
Represents investments in entities where ownership is more than 10%", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00308": { "value": "Transfers that do not qualify for derecognition
NatWest Group enters into securities repurchase, lending and total return transactions in
accordance with normal market practice which includes the provision of additional collateral if
necessary. Under standard terms in the UK and US markets, the recipient has an unrestricted
right to sell or repledge collateral, subject to returning equivalent securities on settlement of the
transaction.
Securities sold under repurchase transactions and transactions with the substance of securities
repurchase agreements are not derecognised if NatWest Group retains substantially all the risks
and rewards of ownership. The fair value (and carrying value) of securities transferred under such
transactions included on the balance sheet are set out below. All of these securities could be sold
or repledged by the holder.
2025
2024
The following assets have failed derecognition
(1)
\u00a3m
\u00a3m
Trading assets
8,210
7,708
Loans to bank - amortised cost
29
70
Loans to customers - amortised cost
110
45
Other financial assets
19,854
13,174
Total
28,203
20,997
(1)
Associated liabilities were \u00a327,478 million (2024 \u2013 \u00a320,394 million).
Assets pledged as collateral
NatWest Group pledges collateral with its counterparties in respect of derivative liabilities, bank
and stock borrowings and other transactions. Under standard arrangements the counterparty
has the right to sell or repledge the collateral. Where the NatWest Group retains exposure to the
signi\ufb01cant risks and rewards of the transferred collateral it is not derecognised from the NatWest
Group balance sheet and continues to be disclosed within either Trading Assets, Loans to
Customers or Other Financial Assets.
2025
2024
Assets pledged against liabilities
\u00a3m
\u00a3m
Trading assets
7,894
10,288
Loans to customers - amortised cost
16,052
19,030
Other financial assets
(1)
5,648
4,451
Total
29,594
33,769
(1)
Includes assets pledged for pension derivatives and \u00a3524 million of debt securities under the continuing control of NWB Plc. This follows the
agreement between NWB Plc and the Group Pension Fund to establish a bankruptcy remote reservoir trust to hold these assets. Refer to Note
5 for additional information.
As part of the covered debt programme \u00a38,278 million of loans to customers and other debt
instruments (2024 \u2013 \u00a39,668 million) have been transferred to bankruptcy remote limited liability
partnerships within the NatWest Group to provide collateral for issuances of debt securities and
other borrowings by the NatWest Group of \u00a32,935 million (2024 \u2013 \u00a32,305 million). Refer to Note
22. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsTransferredDuringPeriodWhichDoNotQualifyForDerecognitionExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00278": { "value": "Assets pledged as collateral
NatWest Group pledges collateral with its counterparties in respect of derivative liabilities, bank
and stock borrowings and other transactions. Under standard arrangements the counterparty
has the right to sell or repledge the collateral. Where the NatWest Group retains exposure to the
signi\ufb01cant risks and rewards of the transferred collateral it is not derecognised from the NatWest
Group balance sheet and continues to be disclosed within either Trading Assets, Loans to
Customers or Other Financial Assets.
2025
2024
Assets pledged against liabilities
\u00a3m
\u00a3m
Trading assets
7,894
10,288
Loans to customers - amortised cost
16,052
19,030
Other financial assets
(1)
5,648
4,451
Total
29,594
33,769
(1)
Includes assets pledged for pension derivatives and \u00a3524 million of debt securities under the continuing control of NWB Plc. This follows the
agreement between NWB Plc and the Group Pension Fund to establish a bankruptcy remote reservoir trust to hold these assets. Refer to Note
5 for additional information.
As part of the covered debt programme \u00a38,278 million of loans to customers and other debt
instruments (2024 \u2013 \u00a39,668 million) have been transferred to bankruptcy remote limited liability
partnerships within the NatWest Group to provide collateral for issuances of debt securities and
other borrowings by the NatWest Group of \u00a32,935 million (2024 \u2013 \u00a32,305 million). Refer to Note
22.
Collateral received
The fair value of assets accepted as collateral relating primarily to standard securities lending,
reverse repurchase agreements, swaps of securities and derivatives margining that NatWest
Group is permitted to sell or repledge in the absence of default was \u00a3113,866 million (2024:
\u00a3110,151 million).The fair value of any such collateral sold or repledged was \u00a370,284 million
(2024: \u00a361,530 million).
NatWest Group is obliged to return equivalent securities. These transactions are conducted under
terms that are usual and customary to standard securities lending, reverse repurchase
agreements, swaps of securities and derivative margining.", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00282": { "value": "24 Capital resources
NatWest Group\u2019s regulatory capital is assessed against minimum requirements that are set out under the UK Capital Requirements Regulation to determine the strength of its capital base. This
note shows a reconciliation of shareholders\u2019 equity to regulatory capital.
\n \n
2025
2024
\u00a3m
\u00a3m
Shareholders\u2019 equity (excluding non-controlling interests)
Shareholders\u2019 equity
42,599
39,350
Other equity instruments
(4,571)
(5,280)
38,028
34,070
Regulatory adjustments and deductions
Own credit
42
28
Defined benefit pension fund adjustment
(187)
(147)
Cash flow hedging reserve
752
1,443
Deferred tax assets
(804)
(1,084)
Prudential valuation adjustments
(167)
(230)
Goodwill and other intangible assets
(7,386)
(7,544)
Expected loss less impairment
(89)
(27)
Foreseeable ordinary dividends
(1,837)
(1,249)
Adjustment for trust assets
(1)
(365)
(365)
Foreseeable charges
(2)
(921)
-
Adjustment under IFRS 9 transitional arrangements
-
33
(10,962)
(9,142)
CET1 capital
27,066
24,928
Additional Tier 1 (AT1) capital
Qualifying instruments and related share premium
4,555
5,259
AT1 capital
4,555
5,259
Tier 1 capital
31,621
30,187
Qualifying Tier 2 capital
Qualifying instruments and related share premium
5,754
5,918
Tier 2 capital
5,754
5,918
Total regulatory capital
37,375
36,105
(1)
Prudent deduction in respect of agreement with the pension fund to establish legal structure to remove dividend linked contribution. Refer to Notes 5 and 32.
(2)
For December 2025, the foreseeable charge of \u00a3921 million relates to share buybacks (\u00a3750 million relating to FY 2025, \u00a3171 million relating to H1 2025).
It is NatWest Group policy to maintain a strong
capital base, to expand it as appropriate and to
utilise it ef\ufb01ciently throughout its activities to
optimise the return to shareholders while
maintaining a prudent relationship between the
capital base and the underlying risks of the
business. In carrying out this policy, NatWest Group
has regard to the supervisory requirements of the
PRA. The PRA uses capital ratios as a measure of
capital adequacy in the UK banking sector,
comparing a bank's capital resources with its risk-
weighted assets (the assets and off-balance sheet
exposures are weighted to re\ufb02ect the inherent
credit and other risks); by international agreement,
the Pillar 1 capital ratios should be not less than 8%
with a Common Equity Tier 1 component of not
less than 4.5%. NatWest Group has complied with
the PRA\u2019s capital requirements throughout the year.
A number of subsidiaries and sub-groups within
NatWest Group, principally banking entities, are
subject to various individual regulatory capital
requirements in the UK and overseas. Furthermore,
the payment of dividends by subsidiaries and the
ability of members of NatWest Group to lend money
to other members of NatWest Group may be
subject to restrictions such as local regulatory or
legal requirements, the availability of reserves and
\ufb01nancial and operating performance.", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00283": { "value": "25 Memorandum items
Contingent liabilities and commitments
NatWest Group provides its customers with a variety of services to support their businesses,
such as guarantees. These are reported as commitments.
Contingent liabilities are possible
obligations dependent on a future event or present obligations which are either not
probable or cannot be measured reliably.
The amounts shown in the table below are intended only to provide an indication of the volume of
business outstanding at 31 December 2025. Although NatWest Group is exposed to credit risk in
the event of a customer\u2019s failure to meet its obligations, the amounts shown do not, and are not
intended to, provide any indication of NatWest Group's expectation of future losses.
2025
2024
\u00a3m
\u00a3m
Contingent liabilities and commitments
Guarantees
2,810
3,060
Other contingent liabilities
1,548
1,496
Standby facilities, credit lines and other commitments
142,765
135,405
Total
147,123
139,961
Banking commitments and contingent obligations, which have been entered into on behalf of
customers and for which there are corresponding obligations from customers, are not included in
assets and liabilities. NatWest Group's maximum exposure to credit loss, in the event of its
obligation crystallising and all counterclaims, collateral or security proving valueless, is
represented by the contractual nominal amount of these instruments included in the table above.
These commitments and contingent obligations are subject to NatWest Group's normal credit
approval processes.
Guarantees
\u2013 NatWest Group gives guarantees on behalf of customers. A \ufb01nancial guarantee
represents an irrevocable undertaking that NatWest Group will meet a customer's speci\ufb01ed
obligations to a third party if the customer fails to do so. The maximum amount that NatWest
Group could be required to pay under a guarantee is its principal amount as disclosed in the table
above. NatWest Group expects most guarantees it provides to expire unused.
Other contingent liabilities
- these include standby letters of credit, supporting customer debt
issues and contingent liabilities relating to customer trading activities such as those arising from
performance and customs bonds, warranties and indemnities.
Standby facilities and credit lines
- under a loan commitment, NatWest Group agrees to make
funds available to a customer in the future. Loan commitments, which are usually for a speci\ufb01ed
term, may be unconditionally cancellable or may persist, provided all conditions in the loan facility
are satis\ufb01ed or waived. Commitments to lend include commercial standby facilities and credit
lines, liquidity facilities to commercial paper conduits and unutilised overdraft facilities.
Other commitments
- these include documentary credits, which are commercial letters of credit
providing for payment by NatWest Group to a named bene\ufb01ciary against presentation of speci\ufb01ed
documents, forward asset purchases, forward deposits placed and undrawn note issuance and
revolving underwriting facilities, and other short-term trade related transactions.
Contractual obligations for future expenditure not provided for in the accounts
The following table shows contractual obligations for future expenditure not provided for in the
accounts at the year end.
2025
2024
\u00a3m
\u00a3m
Capital expenditure on property, plant and equipment
12
14
Contracts to purchase goods or services
(1)
1,188
1,160
1,200
1,174
(1)
Of which due within 1 year: \u00a3477 million (2024 \u2013 \u00a3356 million).
Trustee and other \ufb01duciary activities
In its capacity as trustee or other \ufb01duciary role, NatWest 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 NatWest Group's \ufb01nancial statements. NatWest Group earned fee income of
\u00a3339 million (2024 - \u00a3302 million; 2023 - \u00a3264 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 \ufb01nancial services \ufb01rms, pays compensation if a \ufb01rm 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 \ufb01rm 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 \ufb01nancial year it ceased to be a participant in the scheme.
Litigation and regulatory matters
NatWest Group plc and certain members of
NatWest 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.
NatWest Group recognises a provision for a
liability in relation to these Matters when it is
probable that an out\ufb02ow of economic bene\ufb01ts
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
NatWest Group\u2019s 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.
NatWest Group cannot predict if, how, or
when such claims will be resolved or what
the eventual settlement, damages, \ufb01ne,
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 NatWest 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 NatWest 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 out\ufb02ows 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 out\ufb02ow in respect of any
Matter may ultimately prove to be
substantially greater than, or less than, the
aggregate provision, if any, that NatWest
Group has recognised in respect of such
Matter. Where a reliable estimate of the
economic out\ufb02ow cannot be reasonably
made, no provision has been recognised.
NatWest Group expects that in future periods,
additional provisions and economic out\ufb02ows
relating to Matters that may or may not be
currently known by NatWest Group will be
necessary, in amounts that are expected to
be substantial in some instances. Refer to
Note 20 for information on material
provisions.
Matters which are, or could be, material,
either individually or in aggregate, having
regard to NatWest Group, considered as a
whole, in which NatWest 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 NatWest Group\u2019s litigation and regulatory
matters (including the Matters), refer to the
Risk Factor relating to legal, regulatory and
governmental actions and investigations set
out on pages 417 to 419.
Litigation
London Interbank Offered Rate (LIBOR)
and other rates litigation
NatWest Group plc and certain other
members of NatWest Group, including NWM
Plc, are defendants in a number of claims
pending in the United States District Court for
the Southern District of New York (SDNY)
with respect to the setting of USD LIBOR. The
complainants allege that certain members of
NatWest Group and other panel banks
violated various federal laws, including the US
commodities and antitrust laws, and state
statutory and common law, as well as
contracts, by manipulating LIBOR and prices
of LIBOR-based derivatives in various
markets through various means.
The co-ordinated proceeding in the SDNY
relating to USD LIBOR now includes one
remaining class action, which is on behalf of
persons who purchased LIBOR-linked
instruments from defendants and bonds
issued by defendants, as well as two non-
class actions.
On 25 September 2025, the SDNY granted
summary judgment to the defendants on the
issue of liability and dismissed all claims in
both the class action and the non-class
actions. The decision is being appealed in the
United States Court of Appeals for the
Second Circuit (US Court of Appeals).
In addition to the USD LIBOR cases described
above, there is a class action relating to
derivatives allegedly tied to JPY LIBOR and
Euroyen TIBOR, which was dismissed by the
SDNY in relation to NWM Plc and other
NatWest Group companies in September
2021. That dismissal is now the subject of an
appeal to the US Court of Appeals.
Two other IBOR-related class actions
involving NWM Plc, concerning alleged
manipulation of Euribor and Pound Sterling
LIBOR, were previously dismissed by the
SDNY for various reasons.
On 22 August 2025, the US Court of Appeals
reversed the SDNY\u2019s decision in the Euribor
case, reinstating claims against NWM plc.
That case has therefore returned to the
SDNY for further proceedings.
On 15 September 2025, the US Court of
Appeals af\ufb01rmed the SDNY\u2019s dismissal of the
Pound Sterling LIBOR case.
Foreign exchange litigation
NatWest Group plc, NWM Plc and/or NWMSI
are defendants in several cases relating to
NWM Plc\u2019s foreign exchange (FX) business.
\n\n\n\n
In May 2019, a cartel class action was \ufb01led in
\n
the Federal Court of Australia against NWM
\n
Plc and four other banks on behalf of persons
\n
who bought or sold currency through FX
\n
spots or forwards between 1 January 2008
\n
and 15 October 2013 with a total transaction
\n
value exceeding AUD 0.5 million. The claimant
\n
has alleged that the banks, including NWM
\n
Plc, contravened Australian competition law
\n
by sharing information, coordinating conduct,
\n
widening spreads and manipulating FX rates
\n
for certain currency pairs during this period.
\n
NatWest Group plc and NWMSI have been
\n
named in the action as \u2018other cartel
\n
participants\u2019 but are not respondents.
\n
In May 2025, NWM Plc executed an
\n
agreement to settle the claim in the Federal
\n
Court of Australia, which the court approved
\n
in August 2025. The settlement amount is
\n
covered in full by an existing provision.
\n
In July and December 2019, two separate
\n
applications seeking opt-out collective
\n
proceedings orders were \ufb01led in the UK
\n
Competition Appeal Tribunal (CAT) against
\n
NatWest Group plc, NWM Plc and other
\n
banks. Both applications were brought on
\n
behalf of persons who, between 18
\n
December 2007 and 31 January 2013,
\n
entered into a relevant FX spot or outright
\n
forward transaction in the European
\n
Economic Area with a relevant \ufb01nancial
\n
institution or on an electronic communications
\n
network.
\n
In March 2022, the CAT declined to certify
\n
either application as collective proceedings on
\n
an opt-out basis.
This decision was appealed
\n
by the applicants and was the subject of an
\n
application for judicial review.
\n
The CAT, in its judgment, allowed the
\n
applicants three months in which to
\n
reformulate their claims as opt-in claims.
\n
In its amended judgment in November 2023,
\n
the Court of Appeal allowed the appeal and
\n
decided that the claims should proceed on an
\n
opt-out basis. Separately, the court
\n
determined which of the two competing
\n
applicants can proceed as class
\n
representative and dismissed the application
\n
for judicial review of the CAT\u2019s decision. The
\n
other applicant has discontinued its claim and
\n
withdrawn from the proceedings. The banks
\n
sought permission to appeal the Court of
\n
Appeal decision directly to the UK Supreme
\n
Court, which was granted in April 2024. The
\n
appeal was heard in April 2025.
\n
In December 2025, the UK Supreme Court
\n
reinstated the CAT\u2019s decision to refuse the
\n
application for a collective proceedings order
\n
on an opt-out basis.
\n
Two motions to certify FX-related class
\n
actions were \ufb01led in the Tel Aviv District
\n
Court in Israel in September and October
\n
2018 and were subsequently consolidated
\n
into one motion. The consolidated motion to
\n
certify, which names The Royal Bank of
\n
Scotland plc (now NWM Plc) and several
\n
other banks as defendants, was served on
\n
NWM Plc in May 2020.
\n
The applicants sought the court\u2019s permission
\n
to amend their motions to certify the class
\n
actions. NWM Plc \ufb01led a motion challenging
\n
the permission granted by the court for the
\n
applicants to serve the consolidated motion
\n
outside the Israeli jurisdiction. That NWM Plc
\n
motion remains pending. In February 2024,
\n
NWM Plc executed an agreement to settle
\n
the claim, subject to court approval.
\n
The settlement amount is covered in full by
\n
an existing provision.
\n
In December 2021, a summons was served in
\n
the Netherlands against NatWest Group plc,
\n
NWM Plc and NWM N.V. by Stichting FX
\n
Claims on behalf of a number of parties,
\n
seeking declarations from the court
\n
concerning liability for anti-competitive FX
\n
market conduct described in decisions of the
\n
European Commission (EC) of 16 May 2019,
\n
along with unspeci\ufb01ed damages. The
\n
claimant amended its claim to also refer to a
\n
2 December 2021 decision by the EC, which
\n
described anti-competitive FX market
\n
conduct. NatWest Group plc, NWM Plc and
\n
other defendants contested the jurisdiction of
\n
the Dutch court.
\n
In March 2023, the district court in
\n
Amsterdam accepted that it has jurisdiction
\n
to hear claims against NWM N.V. but refused
\n
jurisdiction to hear any claims against the
\n
other defendant banks (including NatWest
\n
Group plc and NWM Plc) brought on behalf of
\n
the parties represented by the claimant that
\n
are domiciled outside of the Netherlands. The
\n
claimant is appealing that decision.
\n
The defendant banks have brought cross-
\n
appeals which seek a ruling that the Dutch
\n
court has no jurisdiction to hear any claims
\n
against the defendant banks domiciled
\n
outside of the Netherlands, irrespective of
\n
whether the claim has been brought on
\n
behalf of a party represented by the claimant
\n
that is domiciled within or outside of the
\n
Netherlands. The Amsterdam Court of Appeal
\n
has stayed these appeal proceedings until the
\n
Court of Justice of the European Union has
\n
answered preliminary questions that have
\n
been referred to it in another matter.
\n
In September 2023, a second summons was
\n
served by Stichting FX Claims on NatWest
\n
Group plc, NWM Plc and NWM N.V., on behalf
\n
of a new group of parties. The claimant seeks
\n
declarations from the district court in
\n
Amsterdam concerning liability for anti-
\n
competitive FX market conduct described in
\n
the above referenced decisions of the EC of
\n
16 May 2019 and 2 December 2021, along
\n
with unspeci\ufb01ed damages. NatWest Group
\n
plc, NWM Plc and other defendants are
\n
contesting the Dutch court's jurisdiction. The
\n
district court has stayed the proceedings
\n
pending judgment in the above-mentioned
\n
appeals.
\n
In January 2025, a third summons was
\n
served by Stichting FX Claims on NatWest
\n
Group plc, NWM Plc and NWM N.V., on behalf
\n
of another new group of parties. The
\n
claimant seeks similar declarations from the
\n
district court in Amsterdam to those being
\n
sought in the above-mentioned claims, along
\n
with unspeci\ufb01ed damages.
\n
NatWest Group plc, NWM Plc and other
\n
defendants are contesting the Dutch court's
\n
jurisdiction. The district court has stayed the
\n
proceedings pending judgment in the above-
\n
mentioned appeals.
\n
Certain other foreign exchange transaction
\n
related claims have been or may be
\n
threatened. NatWest Group cannot predict
\n
whether all or any of these claims will be
\n
pursued.
\n\n\n\n
Swaps antitrust litigation
\n
NWM Plc and other members of NatWest
\n
Group, including NatWest Group plc, as well
\n
as a number of other interest rate swap
\n
dealers, are defendants in several cases
\n
pending in the SDNY alleging violations of the
\n
US antitrust laws in the market for interest
\n
rate swaps. Three swap execution facilities
\n
(TeraExchange, Javelin, and trueEx) allege
\n
that they would have successfully established
\n
exchange-like trading of interest rate swaps if
\n
the defendants had not unlawfully conspired
\n
to prevent that from happening through
\n
boycotts and other means. Discovery is
\n
complete though expert discovery is ongoing.
\n
In June 2021, a class action antitrust
\n
complaint was \ufb01led against a number of
\n
credit default swap dealers in New Mexico
\n
federal court on behalf of persons who, from
\n
2005 onwards, settled credit default swaps in
\n
the United States by reference to the ISDA
\n
credit default swap auction protocol. The
\n
complaint alleges that the defendants
\n
conspired to manipulate that benchmark
\n
through various means in violation of the
\n
antitrust laws and the Commodity Exchange
\n
Act.
\n
In May 2025, the US Court of Appeals
\n
af\ufb01rmed a January 2024 decision by the
\n
SDNY which barred the plaintiffs in the New
\n
Mexico case from pursuing claims based on
\n
conduct occurring before 30 June 2014 on
\n
the ground that such claims were
\n
extinguished by a 2015 settlement agreement
\n
that resolved a prior class action relating to
\n
credit default swaps.
\n
The case in New Mexico (which had been
\n
stayed pending the appeal of the SDNY\u2019s
\n
decision) has now resumed. The defendants
\n
have \ufb01led a motion to dismiss, which is
\n
pending.
\n
Odd lot corporate bond trading antitrust
\n
litigation
\n
On 2 September 2025, the SDNY dismissed
\n
the class action antitrust complaint alleging
\n
that, from August 2006 onwards, various
\n
securities dealers, including NWMSI,
\n
conspired arti\ufb01cially to widen spreads for odd
\n
lots of corporate bonds bought or sold in the
\n
United States secondary market and to
\n
boycott electronic trading platforms that
\n
would have allegedly promoted pricing
\n
competition in the market for such bonds.
\n
The plaintiffs did not appeal the SDNY\u2019s
\n
decision and the case is now closed.
\n
Spoo\ufb01ng litigation
\n
In December 2021, three substantially similar
\n
class actions complaints were \ufb01led in federal
\n
court in the United States against NWM Plc
\n
and NWMSI alleging Commodity Exchange
\n
Act and common law unjust enrichment
\n
claims arising from manipulative trading
\n
known as spoo\ufb01ng. The complaints refer to
\n
NWM Plc\u2019s December 2021 spoo\ufb01ng-related
\n
guilty plea (described below under \u201cUS
\n
investigations relating to \ufb01xed-income
\n
securities\u201d) and purport to assert claims on
\n
behalf of those who transacted in US
\n
Treasury securities and futures and options
\n
on US Treasury securities between 2008 and
\n
2018.
\n
In July 2022, the defendants \ufb01led a motion to
\n
dismiss these claims, which have been
\n
consolidated into one matter in the United
\n
States District Court for the Northern District
\n
of Illinois. The motion to dismiss remains
\n
pending.
\n
Madoff
\n
NWM N.V. was named as a defendant in two
\n
actions \ufb01led by the trustee for the bankrupt
\n
estates of Bernard L. Madoff and Bernard L.
\n
Madoff Investment Securities LLC, in
\n
bankruptcy court in New York, which
\n
together seek to clawback more than
\n
US$300 million (plus pre-judgment interest)
\n
that NWM N.V. allegedly received from certain
\n
Madoff feeder funds and certain swap
\n
counterparties.
\n
The claims were previously dismissed, but as
\n
a result of an August 2021 decision by the US
\n
Court of Appeals, they are now proceeding in
\n
the discovery phase in the bankruptcy court,
\n
where they have been consolidated into one
\n
action.
\n
Offshoring VAT assessments
\n
HMRC, as part of an industry-wide review,
\n
issued protective tax assessments in 2018
\n
against NatWest Group plc totalling \u00a3143
\n
million relating to unpaid VAT in respect of the
\n
UK branches of two NatWest Group
\n
companies registered in India for the period
\n
from 1 January 2014 until 31 December 2017
\n
inclusive. NatWest Group formally requested
\n
reconsideration by HMRC of their
\n
assessments, and this process was completed
\n
in November 2020. HMRC upheld their
\n
original decision and, as a result, NatWest
\n
Group plc lodged an appeal with the Tax
\n
Tribunal and an application for judicial review
\n
with the High Court of Justice of England and
\n
Wales, both in December 2020.
\n
In order to lodge the appeal with the Tax
\n
Tribunal, NatWest Group plc was required to
\n
pay amounts totalling \u00a3153 million (including
\n
statutory interest) to HMRC in December
\n
2020 and May 2022. The appeal and the
\n
application for judicial review were previously
\n
stayed behind a separate case involving
\n
another bank.
\n
NatWest Group plc was informed in late 2024
\n
that the other bank had settled its case with
\n
HMRC by agreement.
NatWest Group plc is
\n
progressing its appeal before the Tax Tribunal
\n
in its own name. NatWest Group plc will also
\n
continue to review next steps relevant to the
\n
judicial review.
\n
The amount of \u00a3153 million continues to be
\n
recognised as an asset that NatWest Group
\n
plc expects to recover. Since 1 January 2018,
\n
NatWest Group plc has paid VAT on intra-
\n
group supplies from the India-registered
\n
NatWest Group companies.
\n
US Anti-Terrorism Act litigation
\n
NWM N.V. and certain other \ufb01nancial
\n
institutions are defendants in several actions
\n
\ufb01led by a number of US nationals (or their
\n
estates, survivors, or heirs), most of whom
\n
are, or were, US military personnel who were
\n
killed or injured in attacks in Iraq between
\n
2003 and 2011.
\n
NWM Plc is also a defendant in some of these
\n
cases.
\n
According to the plaintiffs\u2019 allegations, the
\n
defendants are liable for damages arising
\n
from the attacks because they allegedly
\n
conspired with and/or aided and abetted Iran
\n
and certain Iranian banks to assist Iran in
\n
transferring money to Hezbollah and the Iraqi
\n
terror cells that committed the attacks, in
\n
violation of the US Anti-Terrorism Act, by
\n
agreeing to engage in \u2018stripping\u2019 of
\n
transactions initiated by the Iranian banks so
\n
that the Iranian nexus to the transactions
\n
would not be detected.
\n\n\n\n
The \ufb01rst of these actions, alleging conspiracy
\n
claims but not aiding and abetting claims,
\n
was \ufb01led in the United States District Court
\n
for the Eastern District of New York in
\n
November 2014. In September 2019, the
\n
district court dismissed the case, \ufb01nding that
\n
the claims were de\ufb01cient for several reasons,
\n
including lack of suf\ufb01cient allegations as to
\n
the alleged conspiracy and causation. In
\n
January 2023, the US Court of Appeals
\n
af\ufb01rmed the district court\u2019s dismissal of this
\n
case.
\n
On 30 September 2025, the district court
\n
denied a motion by the plaintiffs to re-open
\n
the case to assert aiding and abetting claims
\n
that they previously did not assert. Another
\n
action, \ufb01led in the SDNY in 2017, which
\n
asserted both conspiracy and aiding and
\n
abetting claims, was dismissed by the SDNY
\n
in March 2019 on similar grounds as the \ufb01rst
\n
case, but remains subject to appeal to the US
\n
Court of Appeals.
\n
Other follow-on actions that are substantially
\n
similar to those described above are pending
\n
in the same courts.
\n
1MDB litigation
\n
A Malaysian court claim was served in
\n
Switzerland in November 2022 by 1MDB, a
\n
sovereign wealth fund, in which Coutts & Co
\n
Ltd was named, along with six others, as a
\n
defendant in respect of losses allegedly
\n
incurred by 1MDB.
\n
It is claimed that Coutts & Co Ltd is liable as
\n
a constructive trustee for having dishonestly
\n
assisted the directors of 1MDB in the breach
\n
of their \ufb01duciary duties by failing (amongst
\n
other alleged claims) to undertake due
\n
diligence in relation to a customer of Coutts &
\n
Co Ltd, through which funds totalling c.US$1
\n
billion were received and paid out between
\n
2009 and 2011. 1MDB sought the return of
\n
that amount plus interest.
\n
Coutts & Co Ltd \ufb01led an application in
\n
January 2023 challenging the validity of
\n
service and the Malaysian court\u2019s jurisdiction
\n
to hear the claim, and a hearing took place in
\n
February 2024. In March 2024, the court
\n
granted that application. 1MDB appealed that
\n
decision and a prior decision by the court not
\n
to allow them to discontinue their claim. Both
\n
appeals were scheduled to be heard in
\n
November 2025 but did not progress as
\n
1MDB withdrew their appeal and
\n
discontinued the claim.
\n
Coutts & Co Ltd (a subsidiary of RBS
\n
Netherlands Holdings B.V., which in turn is a
\n
subsidiary of NWM Plc) is a company
\n
registered in Switzerland and is in wind-down
\n
following the announced sale of its business
\n
assets in 2015.
\n
Oracle Securities Litigation
\n
On 14 January 2026, a class action complaint
\n
was \ufb01led in New York state court against
\n
Oracle Corporation and the underwriters of a
\n
September 2025 bond offering by Oracle,
\n
including NWMSI.
The complaint alleges that
\n
the offering documents for the bonds were
\n
materially misleading because they failed to
\n
disclose that, at the time of the bond offering,
\n
Oracle was already planning to further
\n
increase its debt to fund its Arti\ufb01cial
\n
Intelligence infrastructure expansion.
\n
The complaint seeks damages under the U.S.
\n
Securities Act of 1933 (the \u2018Securities Act\u2019),
\n
as amended, on behalf of those who
\n
purchased Oracle\u2019s bonds. In connection with
\n
the bond offering, Oracle agreed to indemnify
\n
the underwriters against certain potential
\n
liabilities, including disclosure-based liability
\n
under the Securities Act.
\n
Tandanor Litigation in Argentina
\n
In October 2012, a claim was \ufb01led in the
\n
District Court of Buenos Aires by \u2018Argentina
\n
Talleres Navales D\u00e1rsena Norte Sociedad
\n
An\u00f3nima Comercial, Industrial y Naviera\u2019
\n
(\u201cTandanor\u201d) (a naval repair business) against
\n
what is now the Representative Of\ufb01ce of The
\n
Royal Bank of Scotland NV, Argentine Branch
\n
(in liquidation) (the \u201cRepresentative Of\ufb01ce\u201d)
\n
and eleven private individuals. (The
\n
Representative Of\ufb01ce inherited the claim from
\n
Banco Holand\u00e9s Unido, Argentine
\n
Branch.)
The claim, which was unquanti\ufb01ed,
\n
sought damages for alleged fraudulent
\n
conduct during Tandanor\u2019s privatisation,
\n
which concluded in 1993. The Representative
\n
Of\ufb01ce\u2019s participation in the privatisation was
\n
2.9%. The Argentine Ministry of Defence
\n
joined Tandanor as a plaintiff in 2014.
\n
The claim was dismissed on limitation
\n
grounds in 2018, and the plaintiffs were
\n
unsuccessful in subsequent appeals. In
\n
November 2024, however, the Argentine
\n
Supreme Court set the appealed judgments
\n
aside and, in June 2025, the Argentine
\n
Federal Court of Appeal returned the case to
\n
the Argentine Federal District Court for
\n
further consideration. In
December 2025, the
\n
plaintiffs \ufb01led an update quantifying damages
\n
at USD 1.1 billion. The Representative Of\ufb01ce
\n
continues to defend the claim and has
\n
requested a hearing.
\n
Regulatory matters (including
\n
investigations and customer redress
\n
programmes)
\n
NatWest Group\u2019s businesses and \ufb01nancial
\n
condition can be affected by the actions of
\n
various governmental and regulatory
\n
authorities in the UK, the US, the EU and
\n
elsewhere. NatWest Group has engaged, and
\n
will continue to engage, in discussions with
\n
relevant governmental and regulatory
\n
authorities, including in the UK, the US, the
\n
EU and elsewhere, on an ongoing and regular
\n
basis, and in response to informal and formal
\n
inquiries or investigations, regarding
\n
operational, systems and control evaluations
\n
and issues including those related to
\n
compliance with applicable laws and
\n
regulations, including consumer protection,
\n
investment advice, business conduct,
\n
competition/anti-trust, VAT recovery, anti-
\n
bribery, anti-money laundering and sanctions
\n
regimes. NatWest Group expects government
\n
and regulatory intervention in \ufb01nancial
\n
services to be high for the foreseeable future,
\n
including increased scrutiny from competition
\n
and other regulators in the retail and SME
\n
business sectors.
\n
Any matters discussed or identi\ufb01ed during
\n
such discussions and inquiries may result in,
\n
among other things, further inquiry or
\n
investigation, other action being taken by
\n
governmental and regulatory authorities,
\n
increased costs being incurred by NatWest
\n
Group, remediation of systems and controls,
\n
public or private censure, restriction of
\n
NatWest Group\u2019s business activities and/or
\n
\ufb01nes. Any of the events or circumstances
\n
mentioned in this paragraph or below could
\n
have a material adverse effect on NatWest
\n
Group, its business, authorisations and
\n
licences, reputation, results of operations or
\n
the price of securities issued by it, or lead to
\n
material additional provisions being taken.
NatWest Group is co-operating fully with the
matters described below.
US investigations relating to \ufb01xed-income
securities
In December 2021, NWM Plc pled guilty in
the United States District Court for the
District of Connecticut to one count of wire
fraud and one count of securities fraud in
connection with historical spoo\ufb01ng conduct
by former employees in US Treasuries
markets between January 2008 and May
2014 and, separately, during approximately
three months in 2018. The 2018 trading
occurred during the term of a non-
prosecution agreement (NPA) between
NWMSI and the United States Attorney's
Of\ufb01ce for the District of Connecticut (USAO
CT), under which non-prosecution was
conditioned on NWMSI and af\ufb01liated
companies not engaging in criminal conduct
during the term of the NPA. The relevant
trading in 2018 was conducted by two NWM
traders in Singapore and breached that NPA.
The plea agreement reached with the US
Department of Justice (DOJ) and the USAO
CT resolved both the spoo\ufb01ng conduct and
the breach of the NPA.
The DOJ and USAO CT paused the
monitorship in May 2025 and, following a
review, determined that a monitorship was no
longer necessary as a result of NWM\u2019s
notable progress in strengthening its
compliance programme, certain of NWM\u2019s
remedial improvements, internal controls, and
the status of implementation of Monitor
recommendations, and that reporting by
NWM to the DOJ and USAO CT on its
continued compliance programme progress
provided an appropriate degree of
oversight.
The court approved the agreement
and extended NWM\u2019s obligations under the
plea agreement and probation until
December 2026.
In the event that NWM Plc does not meet its
obligations to the DOJ, this may lead to
adverse consequences such as increased
costs, \ufb01ndings that NWM Plc violated its
probation term, and possible re-sentencing,
amongst other consequences. Other material
adverse collateral consequences may occur
as a result of this matter, as further described
in the Risk Factor relating to legal, regulatory
and governmental actions and investigations
set out on pages 417 to 419 of the NatWest
Group plc Annual Report and Accounts 2025.
Investment advice review
In October 2019, the FCA noti\ufb01ed 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\u2019s 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\u2019s review has concluded
and, after discussion with the FCA, NatWest
Group is undertaking additional review /
remediation work, which is expected to
conclude in H1 2026.
Review and investigation of treatment of
tracker mortgage customers in Ulster
Bank Ireland DAC
In December 2015, correspondence was
received from the Central Bank of Ireland
setting out an industry examination
framework in respect of the sale of tracker
mortgages from approximately 2001 until the
end of 2015.
The redress and compensation process has
now largely concluded, although a small
number of cases remain outstanding relating
to uncontactable customers.
Ulydien (formerly UBIDAC) customers have
lodged tracker mortgage complaints with the
Financial Services and Pensions Ombudsman
(FSPO). UBIDAC challenged three FSPO
adjudications in the Irish High Court. In June
2023, the High Court found in favour of the
FSPO in all matters. UBIDAC appealed that
decision to the Court of Appeal. In September
2024, the Court of Appeal allowed UBIDAC\u2019s
appeal and set aside certain \ufb01ndings of the
FSPO. The Court of Appeal directed one
aspect of the FSPO decisions to be remitted
to the FSPO for its consideration following an
oral hearing.
Decisions are awaited from the FSPO in
respect of these cases.
Other customer remediation in Ulster Bank
Ireland DAC
Ulydien identi\ufb01ed other legacy issues leading
to the establishment of remediation
requirements, and progress is ongoing to
conclude activities.", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00284": { "value": "25 Memorandum items
Contingent liabilities and commitments
NatWest Group provides its customers with a variety of services to support their businesses,
such as guarantees. These are reported as commitments.
Contingent liabilities are possible
obligations dependent on a future event or present obligations which are either not
probable or cannot be measured reliably.
The amounts shown in the table below are intended only to provide an indication of the volume of
business outstanding at 31 December 2025. Although NatWest Group is exposed to credit risk in
the event of a customer\u2019s failure to meet its obligations, the amounts shown do not, and are not
intended to, provide any indication of NatWest Group's expectation of future losses.
2025
2024
\u00a3m
\u00a3m
Contingent liabilities and commitments
Guarantees
2,810
3,060
Other contingent liabilities
1,548
1,496
Standby facilities, credit lines and other commitments
142,765
135,405
Total
147,123
139,961
Banking commitments and contingent obligations, which have been entered into on behalf of
customers and for which there are corresponding obligations from customers, are not included in
assets and liabilities. NatWest Group's maximum exposure to credit loss, in the event of its
obligation crystallising and all counterclaims, collateral or security proving valueless, is
represented by the contractual nominal amount of these instruments included in the table above.
These commitments and contingent obligations are subject to NatWest Group's normal credit
approval processes.Standby facilities and credit lines
- under a loan commitment, NatWest Group agrees to make
funds available to a customer in the future. Loan commitments, which are usually for a speci\ufb01ed
term, may be unconditionally cancellable or may persist, provided all conditions in the loan facility
are satis\ufb01ed or waived. Commitments to lend include commercial standby facilities and credit
lines, liquidity facilities to commercial paper conduits and unutilised overdraft facilities.
Other commitments
- these include documentary credits, which are commercial letters of credit
providing for payment by NatWest Group to a named bene\ufb01ciary against presentation of speci\ufb01ed
documents, forward asset purchases, forward deposits placed and undrawn note issuance and
revolving underwriting facilities, and other short-term trade related transactions.", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00285": { "value": "25 Memorandum items
Contingent liabilities and commitments
NatWest Group provides its customers with a variety of services to support their businesses,
such as guarantees. These are reported as commitments.
Contingent liabilities are possible
obligations dependent on a future event or present obligations which are either not
probable or cannot be measured reliably.
The amounts shown in the table below are intended only to provide an indication of the volume of
business outstanding at 31 December 2025. Although NatWest Group is exposed to credit risk in
the event of a customer\u2019s failure to meet its obligations, the amounts shown do not, and are not
intended to, provide any indication of NatWest Group's expectation of future losses.
2025
2024
\u00a3m
\u00a3m
Contingent liabilities and commitments
Guarantees
2,810
3,060
Other contingent liabilities
1,548
1,496
Standby facilities, credit lines and other commitments
142,765
135,405
Total
147,123
139,961
Banking commitments and contingent obligations, which have been entered into on behalf of
customers and for which there are corresponding obligations from customers, are not included in
assets and liabilities. NatWest Group's maximum exposure to credit loss, in the event of its
obligation crystallising and all counterclaims, collateral or security proving valueless, is
represented by the contractual nominal amount of these instruments included in the table above.
These commitments and contingent obligations are subject to NatWest Group's normal credit
approval processes.Other contingent liabilities
- these include standby letters of credit, supporting customer debt
issues and contingent liabilities relating to customer trading activities such as those arising from
performance and customs bonds, warranties and indemnities. Litigation and regulatory matters
NatWest Group plc and certain members of
NatWest 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.
NatWest Group recognises a provision for a
liability in relation to these Matters when it is
probable that an out\ufb02ow of economic bene\ufb01ts
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
NatWest Group\u2019s 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.
NatWest Group cannot predict if, how, or
when such claims will be resolved or what
the eventual settlement, damages, \ufb01ne,
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 NatWest 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 NatWest 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 out\ufb02ows 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 out\ufb02ow in respect of any
Matter may ultimately prove to be
substantially greater than, or less than, the
aggregate provision, if any, that NatWest
Group has recognised in respect of such
Matter. Where a reliable estimate of the
economic out\ufb02ow cannot be reasonably
made, no provision has been recognised.
NatWest Group expects that in future periods,
additional provisions and economic out\ufb02ows
relating to Matters that may or may not be
currently known by NatWest Group will be
necessary, in amounts that are expected to
be substantial in some instances. Refer to
Note 20 for information on material
provisions.
Matters which are, or could be, material,
either individually or in aggregate, having
regard to NatWest Group, considered as a
whole, in which NatWest 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 NatWest Group\u2019s litigation and regulatory
matters (including the Matters), refer to the
Risk Factor relating to legal, regulatory and
governmental actions and investigations set
out on pages 417 to 419.
Litigation
London Interbank Offered Rate (LIBOR)
and other rates litigation
NatWest Group plc and certain other
members of NatWest Group, including NWM
Plc, are defendants in a number of claims
pending in the United States District Court for
the Southern District of New York (SDNY)
with respect to the setting of USD LIBOR. The
complainants allege that certain members of
NatWest Group and other panel banks
violated various federal laws, including the US
commodities and antitrust laws, and state
statutory and common law, as well as
contracts, by manipulating LIBOR and prices
of LIBOR-based derivatives in various
markets through various means.
The co-ordinated proceeding in the SDNY
relating to USD LIBOR now includes one
remaining class action, which is on behalf of
persons who purchased LIBOR-linked
instruments from defendants and bonds
issued by defendants, as well as two non-
class actions.
On 25 September 2025, the SDNY granted
summary judgment to the defendants on the
issue of liability and dismissed all claims in
both the class action and the non-class
actions. The decision is being appealed in the
United States Court of Appeals for the
Second Circuit (US Court of Appeals).
In addition to the USD LIBOR cases described
above, there is a class action relating to
derivatives allegedly tied to JPY LIBOR and
Euroyen TIBOR, which was dismissed by the
SDNY in relation to NWM Plc and other
NatWest Group companies in September
2021. That dismissal is now the subject of an
appeal to the US Court of Appeals.
Two other IBOR-related class actions
involving NWM Plc, concerning alleged
manipulation of Euribor and Pound Sterling
LIBOR, were previously dismissed by the
SDNY for various reasons.
On 22 August 2025, the US Court of Appeals
reversed the SDNY\u2019s decision in the Euribor
case, reinstating claims against NWM plc.
That case has therefore returned to the
SDNY for further proceedings.
On 15 September 2025, the US Court of
Appeals af\ufb01rmed the SDNY\u2019s dismissal of the
Pound Sterling LIBOR case.
Foreign exchange litigation
NatWest Group plc, NWM Plc and/or NWMSI
are defendants in several cases relating to
NWM Plc\u2019s foreign exchange (FX) business.
\n\n\n\n
In May 2019, a cartel class action was \ufb01led in
\n
the Federal Court of Australia against NWM
\n
Plc and four other banks on behalf of persons
\n
who bought or sold currency through FX
\n
spots or forwards between 1 January 2008
\n
and 15 October 2013 with a total transaction
\n
value exceeding AUD 0.5 million. The claimant
\n
has alleged that the banks, including NWM
\n
Plc, contravened Australian competition law
\n
by sharing information, coordinating conduct,
\n
widening spreads and manipulating FX rates
\n
for certain currency pairs during this period.
\n
NatWest Group plc and NWMSI have been
\n
named in the action as \u2018other cartel
\n
participants\u2019 but are not respondents.
\n
In May 2025, NWM Plc executed an
\n
agreement to settle the claim in the Federal
\n
Court of Australia, which the court approved
\n
in August 2025. The settlement amount is
\n
covered in full by an existing provision.
\n
In July and December 2019, two separate
\n
applications seeking opt-out collective
\n
proceedings orders were \ufb01led in the UK
\n
Competition Appeal Tribunal (CAT) against
\n
NatWest Group plc, NWM Plc and other
\n
banks. Both applications were brought on
\n
behalf of persons who, between 18
\n
December 2007 and 31 January 2013,
\n
entered into a relevant FX spot or outright
\n
forward transaction in the European
\n
Economic Area with a relevant \ufb01nancial
\n
institution or on an electronic communications
\n
network.
\n
In March 2022, the CAT declined to certify
\n
either application as collective proceedings on
\n
an opt-out basis.
This decision was appealed
\n
by the applicants and was the subject of an
\n
application for judicial review.
\n
The CAT, in its judgment, allowed the
\n
applicants three months in which to
\n
reformulate their claims as opt-in claims.
\n
In its amended judgment in November 2023,
\n
the Court of Appeal allowed the appeal and
\n
decided that the claims should proceed on an
\n
opt-out basis. Separately, the court
\n
determined which of the two competing
\n
applicants can proceed as class
\n
representative and dismissed the application
\n
for judicial review of the CAT\u2019s decision. The
\n
other applicant has discontinued its claim and
\n
withdrawn from the proceedings. The banks
\n
sought permission to appeal the Court of
\n
Appeal decision directly to the UK Supreme
\n
Court, which was granted in April 2024. The
\n
appeal was heard in April 2025.
\n
In December 2025, the UK Supreme Court
\n
reinstated the CAT\u2019s decision to refuse the
\n
application for a collective proceedings order
\n
on an opt-out basis.
\n
Two motions to certify FX-related class
\n
actions were \ufb01led in the Tel Aviv District
\n
Court in Israel in September and October
\n
2018 and were subsequently consolidated
\n
into one motion. The consolidated motion to
\n
certify, which names The Royal Bank of
\n
Scotland plc (now NWM Plc) and several
\n
other banks as defendants, was served on
\n
NWM Plc in May 2020.
\n
The applicants sought the court\u2019s permission
\n
to amend their motions to certify the class
\n
actions. NWM Plc \ufb01led a motion challenging
\n
the permission granted by the court for the
\n
applicants to serve the consolidated motion
\n
outside the Israeli jurisdiction. That NWM Plc
\n
motion remains pending. In February 2024,
\n
NWM Plc executed an agreement to settle
\n
the claim, subject to court approval.
\n
The settlement amount is covered in full by
\n
an existing provision.
\n
In December 2021, a summons was served in
\n
the Netherlands against NatWest Group plc,
\n
NWM Plc and NWM N.V. by Stichting FX
\n
Claims on behalf of a number of parties,
\n
seeking declarations from the court
\n
concerning liability for anti-competitive FX
\n
market conduct described in decisions of the
\n
European Commission (EC) of 16 May 2019,
\n
along with unspeci\ufb01ed damages. The
\n
claimant amended its claim to also refer to a
\n
2 December 2021 decision by the EC, which
\n
described anti-competitive FX market
\n
conduct. NatWest Group plc, NWM Plc and
\n
other defendants contested the jurisdiction of
\n
the Dutch court.
\n
In March 2023, the district court in
\n
Amsterdam accepted that it has jurisdiction
\n
to hear claims against NWM N.V. but refused
\n
jurisdiction to hear any claims against the
\n
other defendant banks (including NatWest
\n
Group plc and NWM Plc) brought on behalf of
\n
the parties represented by the claimant that
\n
are domiciled outside of the Netherlands. The
\n
claimant is appealing that decision.
\n
The defendant banks have brought cross-
\n
appeals which seek a ruling that the Dutch
\n
court has no jurisdiction to hear any claims
\n
against the defendant banks domiciled
\n
outside of the Netherlands, irrespective of
\n
whether the claim has been brought on
\n
behalf of a party represented by the claimant
\n
that is domiciled within or outside of the
\n
Netherlands. The Amsterdam Court of Appeal
\n
has stayed these appeal proceedings until the
\n
Court of Justice of the European Union has
\n
answered preliminary questions that have
\n
been referred to it in another matter.
\n
In September 2023, a second summons was
\n
served by Stichting FX Claims on NatWest
\n
Group plc, NWM Plc and NWM N.V., on behalf
\n
of a new group of parties. The claimant seeks
\n
declarations from the district court in
\n
Amsterdam concerning liability for anti-
\n
competitive FX market conduct described in
\n
the above referenced decisions of the EC of
\n
16 May 2019 and 2 December 2021, along
\n
with unspeci\ufb01ed damages. NatWest Group
\n
plc, NWM Plc and other defendants are
\n
contesting the Dutch court's jurisdiction. The
\n
district court has stayed the proceedings
\n
pending judgment in the above-mentioned
\n
appeals.
\n
In January 2025, a third summons was
\n
served by Stichting FX Claims on NatWest
\n
Group plc, NWM Plc and NWM N.V., on behalf
\n
of another new group of parties. The
\n
claimant seeks similar declarations from the
\n
district court in Amsterdam to those being
\n
sought in the above-mentioned claims, along
\n
with unspeci\ufb01ed damages.
\n
NatWest Group plc, NWM Plc and other
\n
defendants are contesting the Dutch court's
\n
jurisdiction. The district court has stayed the
\n
proceedings pending judgment in the above-
\n
mentioned appeals.
\n
Certain other foreign exchange transaction
\n
related claims have been or may be
\n
threatened. NatWest Group cannot predict
\n
whether all or any of these claims will be
\n
pursued.
\n\n\n\n
Swaps antitrust litigation
\n
NWM Plc and other members of NatWest
\n
Group, including NatWest Group plc, as well
\n
as a number of other interest rate swap
\n
dealers, are defendants in several cases
\n
pending in the SDNY alleging violations of the
\n
US antitrust laws in the market for interest
\n
rate swaps. Three swap execution facilities
\n
(TeraExchange, Javelin, and trueEx) allege
\n
that they would have successfully established
\n
exchange-like trading of interest rate swaps if
\n
the defendants had not unlawfully conspired
\n
to prevent that from happening through
\n
boycotts and other means. Discovery is
\n
complete though expert discovery is ongoing.
\n
In June 2021, a class action antitrust
\n
complaint was \ufb01led against a number of
\n
credit default swap dealers in New Mexico
\n
federal court on behalf of persons who, from
\n
2005 onwards, settled credit default swaps in
\n
the United States by reference to the ISDA
\n
credit default swap auction protocol. The
\n
complaint alleges that the defendants
\n
conspired to manipulate that benchmark
\n
through various means in violation of the
\n
antitrust laws and the Commodity Exchange
\n
Act.
\n
In May 2025, the US Court of Appeals
\n
af\ufb01rmed a January 2024 decision by the
\n
SDNY which barred the plaintiffs in the New
\n
Mexico case from pursuing claims based on
\n
conduct occurring before 30 June 2014 on
\n
the ground that such claims were
\n
extinguished by a 2015 settlement agreement
\n
that resolved a prior class action relating to
\n
credit default swaps.
\n
The case in New Mexico (which had been
\n
stayed pending the appeal of the SDNY\u2019s
\n
decision) has now resumed. The defendants
\n
have \ufb01led a motion to dismiss, which is
\n
pending.
\n
Odd lot corporate bond trading antitrust
\n
litigation
\n
On 2 September 2025, the SDNY dismissed
\n
the class action antitrust complaint alleging
\n
that, from August 2006 onwards, various
\n
securities dealers, including NWMSI,
\n
conspired arti\ufb01cially to widen spreads for odd
\n
lots of corporate bonds bought or sold in the
\n
United States secondary market and to
\n
boycott electronic trading platforms that
\n
would have allegedly promoted pricing
\n
competition in the market for such bonds.
\n
The plaintiffs did not appeal the SDNY\u2019s
\n
decision and the case is now closed.
\n
Spoo\ufb01ng litigation
\n
In December 2021, three substantially similar
\n
class actions complaints were \ufb01led in federal
\n
court in the United States against NWM Plc
\n
and NWMSI alleging Commodity Exchange
\n
Act and common law unjust enrichment
\n
claims arising from manipulative trading
\n
known as spoo\ufb01ng. The complaints refer to
\n
NWM Plc\u2019s December 2021 spoo\ufb01ng-related
\n
guilty plea (described below under \u201cUS
\n
investigations relating to \ufb01xed-income
\n
securities\u201d) and purport to assert claims on
\n
behalf of those who transacted in US
\n
Treasury securities and futures and options
\n
on US Treasury securities between 2008 and
\n
2018.
\n
In July 2022, the defendants \ufb01led a motion to
\n
dismiss these claims, which have been
\n
consolidated into one matter in the United
\n
States District Court for the Northern District
\n
of Illinois. The motion to dismiss remains
\n
pending.
\n
Madoff
\n
NWM N.V. was named as a defendant in two
\n
actions \ufb01led by the trustee for the bankrupt
\n
estates of Bernard L. Madoff and Bernard L.
\n
Madoff Investment Securities LLC, in
\n
bankruptcy court in New York, which
\n
together seek to clawback more than
\n
US$300 million (plus pre-judgment interest)
\n
that NWM N.V. allegedly received from certain
\n
Madoff feeder funds and certain swap
\n
counterparties.
\n
The claims were previously dismissed, but as
\n
a result of an August 2021 decision by the US
\n
Court of Appeals, they are now proceeding in
\n
the discovery phase in the bankruptcy court,
\n
where they have been consolidated into one
\n
action.
\n
Offshoring VAT assessments
\n
HMRC, as part of an industry-wide review,
\n
issued protective tax assessments in 2018
\n
against NatWest Group plc totalling \u00a3143
\n
million relating to unpaid VAT in respect of the
\n
UK branches of two NatWest Group
\n
companies registered in India for the period
\n
from 1 January 2014 until 31 December 2017
\n
inclusive. NatWest Group formally requested
\n
reconsideration by HMRC of their
\n
assessments, and this process was completed
\n
in November 2020. HMRC upheld their
\n
original decision and, as a result, NatWest
\n
Group plc lodged an appeal with the Tax
\n
Tribunal and an application for judicial review
\n
with the High Court of Justice of England and
\n
Wales, both in December 2020.
\n
In order to lodge the appeal with the Tax
\n
Tribunal, NatWest Group plc was required to
\n
pay amounts totalling \u00a3153 million (including
\n
statutory interest) to HMRC in December
\n
2020 and May 2022. The appeal and the
\n
application for judicial review were previously
\n
stayed behind a separate case involving
\n
another bank.
\n
NatWest Group plc was informed in late 2024
\n
that the other bank had settled its case with
\n
HMRC by agreement.
NatWest Group plc is
\n
progressing its appeal before the Tax Tribunal
\n
in its own name. NatWest Group plc will also
\n
continue to review next steps relevant to the
\n
judicial review.
\n
The amount of \u00a3153 million continues to be
\n
recognised as an asset that NatWest Group
\n
plc expects to recover. Since 1 January 2018,
\n
NatWest Group plc has paid VAT on intra-
\n
group supplies from the India-registered
\n
NatWest Group companies.
\n
US Anti-Terrorism Act litigation
\n
NWM N.V. and certain other \ufb01nancial
\n
institutions are defendants in several actions
\n
\ufb01led by a number of US nationals (or their
\n
estates, survivors, or heirs), most of whom
\n
are, or were, US military personnel who were
\n
killed or injured in attacks in Iraq between
\n
2003 and 2011.
\n
NWM Plc is also a defendant in some of these
\n
cases.
\n
According to the plaintiffs\u2019 allegations, the
\n
defendants are liable for damages arising
\n
from the attacks because they allegedly
\n
conspired with and/or aided and abetted Iran
\n
and certain Iranian banks to assist Iran in
\n
transferring money to Hezbollah and the Iraqi
\n
terror cells that committed the attacks, in
\n
violation of the US Anti-Terrorism Act, by
\n
agreeing to engage in \u2018stripping\u2019 of
\n
transactions initiated by the Iranian banks so
\n
that the Iranian nexus to the transactions
\n
would not be detected.
\n\n\n\n
The \ufb01rst of these actions, alleging conspiracy
\n
claims but not aiding and abetting claims,
\n
was \ufb01led in the United States District Court
\n
for the Eastern District of New York in
\n
November 2014. In September 2019, the
\n
district court dismissed the case, \ufb01nding that
\n
the claims were de\ufb01cient for several reasons,
\n
including lack of suf\ufb01cient allegations as to
\n
the alleged conspiracy and causation. In
\n
January 2023, the US Court of Appeals
\n
af\ufb01rmed the district court\u2019s dismissal of this
\n
case.
\n
On 30 September 2025, the district court
\n
denied a motion by the plaintiffs to re-open
\n
the case to assert aiding and abetting claims
\n
that they previously did not assert. Another
\n
action, \ufb01led in the SDNY in 2017, which
\n
asserted both conspiracy and aiding and
\n
abetting claims, was dismissed by the SDNY
\n
in March 2019 on similar grounds as the \ufb01rst
\n
case, but remains subject to appeal to the US
\n
Court of Appeals.
\n
Other follow-on actions that are substantially
\n
similar to those described above are pending
\n
in the same courts.
\n
1MDB litigation
\n
A Malaysian court claim was served in
\n
Switzerland in November 2022 by 1MDB, a
\n
sovereign wealth fund, in which Coutts & Co
\n
Ltd was named, along with six others, as a
\n
defendant in respect of losses allegedly
\n
incurred by 1MDB.
\n
It is claimed that Coutts & Co Ltd is liable as
\n
a constructive trustee for having dishonestly
\n
assisted the directors of 1MDB in the breach
\n
of their \ufb01duciary duties by failing (amongst
\n
other alleged claims) to undertake due
\n
diligence in relation to a customer of Coutts &
\n
Co Ltd, through which funds totalling c.US$1
\n
billion were received and paid out between
\n
2009 and 2011. 1MDB sought the return of
\n
that amount plus interest.
\n
Coutts & Co Ltd \ufb01led an application in
\n
January 2023 challenging the validity of
\n
service and the Malaysian court\u2019s jurisdiction
\n
to hear the claim, and a hearing took place in
\n
February 2024. In March 2024, the court
\n
granted that application. 1MDB appealed that
\n
decision and a prior decision by the court not
\n
to allow them to discontinue their claim. Both
\n
appeals were scheduled to be heard in
\n
November 2025 but did not progress as
\n
1MDB withdrew their appeal and
\n
discontinued the claim.
\n
Coutts & Co Ltd (a subsidiary of RBS
\n
Netherlands Holdings B.V., which in turn is a
\n
subsidiary of NWM Plc) is a company
\n
registered in Switzerland and is in wind-down
\n
following the announced sale of its business
\n
assets in 2015.
\n
Oracle Securities Litigation
\n
On 14 January 2026, a class action complaint
\n
was \ufb01led in New York state court against
\n
Oracle Corporation and the underwriters of a
\n
September 2025 bond offering by Oracle,
\n
including NWMSI.
The complaint alleges that
\n
the offering documents for the bonds were
\n
materially misleading because they failed to
\n
disclose that, at the time of the bond offering,
\n
Oracle was already planning to further
\n
increase its debt to fund its Arti\ufb01cial
\n
Intelligence infrastructure expansion.
\n
The complaint seeks damages under the U.S.
\n
Securities Act of 1933 (the \u2018Securities Act\u2019),
\n
as amended, on behalf of those who
\n
purchased Oracle\u2019s bonds. In connection with
\n
the bond offering, Oracle agreed to indemnify
\n
the underwriters against certain potential
\n
liabilities, including disclosure-based liability
\n
under the Securities Act.
\n
Tandanor Litigation in Argentina
\n
In October 2012, a claim was \ufb01led in the
\n
District Court of Buenos Aires by \u2018Argentina
\n
Talleres Navales D\u00e1rsena Norte Sociedad
\n
An\u00f3nima Comercial, Industrial y Naviera\u2019
\n
(\u201cTandanor\u201d) (a naval repair business) against
\n
what is now the Representative Of\ufb01ce of The
\n
Royal Bank of Scotland NV, Argentine Branch
\n
(in liquidation) (the \u201cRepresentative Of\ufb01ce\u201d)
\n
and eleven private individuals. (The
\n
Representative Of\ufb01ce inherited the claim from
\n
Banco Holand\u00e9s Unido, Argentine
\n
Branch.)
The claim, which was unquanti\ufb01ed,
\n
sought damages for alleged fraudulent
\n
conduct during Tandanor\u2019s privatisation,
\n
which concluded in 1993. The Representative
\n
Of\ufb01ce\u2019s participation in the privatisation was
\n
2.9%. The Argentine Ministry of Defence
\n
joined Tandanor as a plaintiff in 2014.
\n
The claim was dismissed on limitation
\n
grounds in 2018, and the plaintiffs were
\n
unsuccessful in subsequent appeals. In
\n
November 2024, however, the Argentine
\n
Supreme Court set the appealed judgments
\n
aside and, in June 2025, the Argentine
\n
Federal Court of Appeal returned the case to
\n
the Argentine Federal District Court for
\n
further consideration. In
December 2025, the
\n
plaintiffs \ufb01led an update quantifying damages
\n
at USD 1.1 billion. The Representative Of\ufb01ce
\n
continues to defend the claim and has
\n
requested a hearing.
\n
Regulatory matters (including
\n
investigations and customer redress
\n
programmes)
\n
NatWest Group\u2019s businesses and \ufb01nancial
\n
condition can be affected by the actions of
\n
various governmental and regulatory
\n
authorities in the UK, the US, the EU and
\n
elsewhere. NatWest Group has engaged, and
\n
will continue to engage, in discussions with
\n
relevant governmental and regulatory
\n
authorities, including in the UK, the US, the
\n
EU and elsewhere, on an ongoing and regular
\n
basis, and in response to informal and formal
\n
inquiries or investigations, regarding
\n
operational, systems and control evaluations
\n
and issues including those related to
\n
compliance with applicable laws and
\n
regulations, including consumer protection,
\n
investment advice, business conduct,
\n
competition/anti-trust, VAT recovery, anti-
\n
bribery, anti-money laundering and sanctions
\n
regimes. NatWest Group expects government
\n
and regulatory intervention in \ufb01nancial
\n
services to be high for the foreseeable future,
\n
including increased scrutiny from competition
\n
and other regulators in the retail and SME
\n
business sectors.
\n
Any matters discussed or identi\ufb01ed during
\n
such discussions and inquiries may result in,
\n
among other things, further inquiry or
\n
investigation, other action being taken by
\n
governmental and regulatory authorities,
\n
increased costs being incurred by NatWest
\n
Group, remediation of systems and controls,
\n
public or private censure, restriction of
\n
NatWest Group\u2019s business activities and/or
\n
\ufb01nes. Any of the events or circumstances
\n
mentioned in this paragraph or below could
\n
have a material adverse effect on NatWest
\n
Group, its business, authorisations and
\n
licences, reputation, results of operations or
\n
the price of securities issued by it, or lead to
\n
material additional provisions being taken.
NatWest Group is co-operating fully with the
matters described below.
US investigations relating to \ufb01xed-income
securities
In December 2021, NWM Plc pled guilty in
the United States District Court for the
District of Connecticut to one count of wire
fraud and one count of securities fraud in
connection with historical spoo\ufb01ng conduct
by former employees in US Treasuries
markets between January 2008 and May
2014 and, separately, during approximately
three months in 2018. The 2018 trading
occurred during the term of a non-
prosecution agreement (NPA) between
NWMSI and the United States Attorney's
Of\ufb01ce for the District of Connecticut (USAO
CT), under which non-prosecution was
conditioned on NWMSI and af\ufb01liated
companies not engaging in criminal conduct
during the term of the NPA. The relevant
trading in 2018 was conducted by two NWM
traders in Singapore and breached that NPA.
The plea agreement reached with the US
Department of Justice (DOJ) and the USAO
CT resolved both the spoo\ufb01ng conduct and
the breach of the NPA.
The DOJ and USAO CT paused the
monitorship in May 2025 and, following a
review, determined that a monitorship was no
longer necessary as a result of NWM\u2019s
notable progress in strengthening its
compliance programme, certain of NWM\u2019s
remedial improvements, internal controls, and
the status of implementation of Monitor
recommendations, and that reporting by
NWM to the DOJ and USAO CT on its
continued compliance programme progress
provided an appropriate degree of
oversight.
The court approved the agreement
and extended NWM\u2019s obligations under the
plea agreement and probation until
December 2026.
In the event that NWM Plc does not meet its
obligations to the DOJ, this may lead to
adverse consequences such as increased
costs, \ufb01ndings that NWM Plc violated its
probation term, and possible re-sentencing,
amongst other consequences. Other material
adverse collateral consequences may occur
as a result of this matter, as further described
in the Risk Factor relating to legal, regulatory
and governmental actions and investigations
set out on pages 417 to 419 of the NatWest
Group plc Annual Report and Accounts 2025.
Investment advice review
In October 2019, the FCA noti\ufb01ed 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\u2019s 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\u2019s review has concluded
and, after discussion with the FCA, NatWest
Group is undertaking additional review /
remediation work, which is expected to
conclude in H1 2026.
Review and investigation of treatment of
tracker mortgage customers in Ulster
Bank Ireland DAC
In December 2015, correspondence was
received from the Central Bank of Ireland
setting out an industry examination
framework in respect of the sale of tracker
mortgages from approximately 2001 until the
end of 2015.
The redress and compensation process has
now largely concluded, although a small
number of cases remain outstanding relating
to uncontactable customers.
Ulydien (formerly UBIDAC) customers have
lodged tracker mortgage complaints with the
Financial Services and Pensions Ombudsman
(FSPO). UBIDAC challenged three FSPO
adjudications in the Irish High Court. In June
2023, the High Court found in favour of the
FSPO in all matters. UBIDAC appealed that
decision to the Court of Appeal. In September
2024, the Court of Appeal allowed UBIDAC\u2019s
appeal and set aside certain \ufb01ndings of the
FSPO. The Court of Appeal directed one
aspect of the FSPO decisions to be remitted
to the FSPO for its consideration following an
oral hearing.
Decisions are awaited from the FSPO in
respect of these cases.
Other customer remediation in Ulster Bank
Ireland DAC
Ulydien identi\ufb01ed other legacy issues leading
to the establishment of remediation
requirements, and progress is ongoing to
conclude activities.", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00286": { "value": "26 Non-cash and other items
This note shows non-cash items adjusted for in the cash \ufb02ow statement and movement in operating assets and liabilities.
\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Impairment losses
671
359
572
Depreciation and amortisation
1,154
1,058
934
Change in fair value taken to profit or loss of other financial assets
33
274
(584)
Change in fair value taken to profit or loss of other financial liabilities and subordinated liabilities
517
200
831
Foreign exchange recycling losses/(gains)
28
77
(484)
Elimination of foreign exchange differences
(1,673)
1,525
312
Income receivable on other financial assets
(3,138)
(2,459)
(1,415)
Loss on sale of other financial assets
8
21
44
Share of (profit)/loss of associates
(68)
(19)
9
(Gain)/loss on sale of other assets and net assets and liabilities
(7)
(23)
125
Interest payable on MRELs and subordinated liabilities
1,340
1,407
1,352
Gain on redemption of own debt
-
-
(3)
Charges and releases of provisions
201
330
313
Change in fair value of cash flow hedges
899
1,494
1,021
Other non-cash items
126
35
59
Defined benefit pension schemes
93
86
122
Non-cash and other items
184
4,365
3,208
Change in operating assets and liabilities
Change in trading assets
197
(5,331)
327
Change in derivative assets
17,687
(373)
20,826
Change in settlement balance assets
1,440
5,146
(4,659)
Change in loans to banks
(950)
278
752
Change in loans to customers
(16,846)
(17,173)
(15,626)
Change in other financial assets
292
(92)
132
Change in other assets
(81)
133
(213)
Change in assets of disposal groups
-
106
412
Change in bank deposits
12,640
9,262
1,749
Change in customer deposits
6,848
2,113
(18,964)
Change in settlement balance liabilities
(787)
(4,916)
4,633
Change in trading liabilities
(5,694)
1,078
828
Change in derivative liabilities
(18,108)
(313)
(21,652)
Change in other financial liabilities
5,090
3,640
6,564
Change in notes in circulation
(152)
79
19
Change in other liabilities
(604)
(904)
(807)
Change in operating assets and liabilities
972
(7,267)
(25,679)
28 Analysis of changes in \ufb01nancing during the year
This note shows cash \ufb02ows and non-cash movements relating to the \ufb01nancing activities of the Group, including movements in share capital, share premium, paid-in equity, subordinated
liabilities and MRELs.
\n \n
Share capital, share premium,
and paid-in equity
Subordinated liabilities
MREL instruments
2025
2024
2023
2025
2024
2023
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January
15,413
14,734
15,590
6,136
5,714
6,260
23,998
21,660
22,265
Issued
1,248
1,390
-
828
1,386
611
4,864
5,051
3,973
Redeemed
(1,957)
(1,000)
(999)
(1,250)
(3,177)
(2,854)
(4,236)
Interest paid
(267)
(459)
(439)
(1,035)
(885)
(844)
Net cash flows from financing activities
(709)
1,390
-
(439)
(72)
(1,078)
652
1,312
(1,107)
Shares repurchased
(112)
(711)
(856)
Effects of foreign exchange
16
(54)
(166)
(666)
(49)
(987)
Changes in fair value
127
76
230
390
124
601
Loss on redemption of own debt
-
-
(3)
-
Interest payable
279
465
464
1,061
942
888
Other
4
7
7
6
9
-
At 31 December
14,592
15,413
14,734
6,123
6,136
5,714
25,441
23,998
21,660
29 Analysis of cash and cash equivalents
Non-cash and other add back items and movements in operating assets and liabilities are adjusted for in the cash \ufb02ow statement. Loans to banks and treasury bills with an original maturity of
less than three months that are readily convertible to known amounts of cash and subject to insigni\ufb01cant risk of change in value.
\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
85,182
92,994
104,262
Trading assets
(1)
4,703
6,886
8,851
Other financial assets
631
-
139
Loans to banks
4,917
4,965
5,572
Cash and cash equivalents
95,433
104,845
118,824
(1)
Includes cash collateral posted with bank counterparties in respect of derivative liabilities of \u00a32,647 million (2024 - \u00a33,660 million; 2023 - \u00a34,434 million).
Certain members of NatWest Group are required by law or regulation to maintain balances with the central banks in the jurisdictions in which they operate. NatWest Markets N.V.
had mandatory
reserve deposits with
De Nederlandsche Bank N.V.
of \u20ac100 million (2024 - \u20ac95 million, 2023 - \u20ac132 million). The Royal Bank of Scotland International Limited had balances with Central Bank of
Luxembourg of \u00a379 million (2024 - \u00a3111 million, 2023 - \u00a3135 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00309": { "value": "27 Analysis of the net investment in business interests and intangible assets
This note shows cash \ufb02ows relating to obtaining or losing signi\ufb01cant in\ufb02uence in associates or control of subsidiaries and net assets and liabilities purchased and sold.
These cash \ufb02ows are presented as investing activities on the cash \ufb02ow statement.
\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Fair value given for business acquired
-
-
(139)
Acquisition of interest in associates
(14)
(4)
-
Additional investment in associates
-
(1)
(5)
Cash paid for assets and liabilities purchased
244
(2,296)
-
Net inflow/(outflow) of cash in respect of acquisitions
230
(2,301)
(144)
Disposal of net assets and liabilities
-
1,003
5,560
Loss on disposal of net assets and liabilities
-
(8)
(87)
Net inflow of cash in respect of disposals
-
995
5,473
Dividends received from associate
19
1
16
Net cash expenditure on intangible assets
(617)
(614)
(744)
Net (outflow)/inflow of cash
(368)
(1,919)
4,601
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00281": { "value": "29 Analysis of cash and cash equivalentsCertain members of NatWest Group are required by law or regulation to maintain balances with the central banks in the jurisdictions in which they operate. NatWest Markets N.V.
had mandatory
reserve deposits with
De Nederlandsche Bank N.V.
of \u20ac100 million (2024 - \u20ac95 million, 2023 - \u20ac132 million). The Royal Bank of Scotland International Limited had balances with Central Bank of
Luxembourg of \u00a379 million (2024 - \u00a3111 million, 2023 - \u00a3135 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00280": { "value": "29 Analysis of cash and cash equivalents
Non-cash and other add back items and movements in operating assets and liabilities are adjusted for in the cash \ufb02ow statement. Loans to banks and treasury bills with an original maturity of
less than three months that are readily convertible to known amounts of cash and subject to insigni\ufb01cant risk of change in value.
\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
85,182
92,994
104,262
Trading assets
(1)
4,703
6,886
8,851
Other financial assets
631
-
139
Loans to banks
4,917
4,965
5,572
Cash and cash equivalents
95,433
104,845
118,824
(1)
Includes cash collateral posted with bank counterparties in respect of derivative liabilities of \u00a32,647 million (2024 - \u00a33,660 million; 2023 - \u00a34,434 million).
Certain members of NatWest Group are required by law or regulation to maintain balances with the central banks in the jurisdictions in which they operate. NatWest Markets N.V.
had mandatory
reserve deposits with
De Nederlandsche Bank N.V.
of \u20ac100 million (2024 - \u20ac95 million, 2023 - \u20ac132 million). The Royal Bank of Scotland International Limited had balances with Central Bank of
Luxembourg of \u00a379 million (2024 - \u00a3111 million, 2023 - \u00a3135 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00279": { "value": "29 Analysis of cash and cash equivalents
Non-cash and other add back items and movements in operating assets and liabilities are adjusted for in the cash \ufb02ow statement. Loans to banks and treasury bills with an original maturity of
less than three months that are readily convertible to known amounts of cash and subject to insigni\ufb01cant risk of change in value.
\n \n
2025
2024
2023
\u00a3m
\u00a3m
\u00a3m
Cash and balances at central banks
85,182
92,994
104,262
Trading assets
(1)
4,703
6,886
8,851
Other financial assets
631
-
139
Loans to banks
4,917
4,965
5,572
Cash and cash equivalents
95,433
104,845
118,824
(1)
Includes cash collateral posted with bank counterparties in respect of derivative liabilities of \u00a32,647 million (2024 - \u00a33,660 million; 2023 - \u00a34,434 million).
Certain members of NatWest Group are required by law or regulation to maintain balances with the central banks in the jurisdictions in which they operate. NatWest Markets N.V.
had mandatory
reserve deposits with
De Nederlandsche Bank N.V.
of \u20ac100 million (2024 - \u20ac95 million, 2023 - \u20ac132 million). The Royal Bank of Scotland International Limited had balances with Central Bank of
Luxembourg of \u00a379 million (2024 - \u00a3111 million, 2023 - \u00a3135 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00287": { "value": "30 Directors\u2019 and key management remuneration
Directors and key management are remunerated for services rendered in the period. The
executive directors may participate in the company's long-term incentive plans, executive
share option and Sharesave schemes and details of their interests in the company's shares
arising from their participation are given in the Directors' remuneration report. Details of the
remuneration received by each director are also given in the Directors' remuneration report.
Key management comprises members of the NatWest Group plc and NWH Ltd Boards, members
of the NatWest Group plc and NWH Ltd Executive Committees, and the Chief Executives of
NatWest Markets Plc and RBS International (Holdings) Limited. This is on the basis that these
individuals have been identi\ufb01ed as Persons Discharging Managerial Responsibilities of NatWest
Group plc under the new governance structure.
\n \n
2025
2024
Directors' remuneration
\u00a3000
\u00a3000
Non-executive directors emoluments
1,638
1,547
Chair and executive directors emoluments
7,519
6,425
9,157
7,972
Amounts receivable under long-term incentive plans
and share option plans
3,279
1,471
Total
12,436
9,443
Compensa\ue001on of key management
The aggregate remuneration of directors and other members of key management during the
year was as follows:
\n \n
2025
2024
\u00a3000
\u00a3000
Short-term benefits
23,380
20,862
Post-employment benefits
683
643
Share-based payments
10,801
5,624
34,864
27,129
Short term bene\ufb01ts include bene\ufb01ts expected to be settled wholly within twelve months of
balance sheet date. Post-employment bene\ufb01ts include de\ufb01ned bene\ufb01t contributions for active
members and pension funding to support contributions to the de\ufb01ned contribution schemes.
Share-based payments include awards vested under rewards schemes.
31 Transactions with directors and key management
This note presents information relating to any transactions with directors and key
management. Key management comprises directors of the company and Persons
Discharging Managerial Responsibilities (PDMRs) of NatWest Group plc.
For the purposes of IAS 24 Related party disclosures, key management comprises directors of the
company and PDMRs of NatWest Group plc. Key management have banking relationships with
NatWest Group entities which are entered into in the normal course of business and on
substantially the same terms, including interest rates and security, as for comparable transactions
with other persons of a similar standing or, where applicable, with other employees. These
transactions did not involve more than the normal risk of repayment or present other
unfavourable features.
Amounts in the table below are attributed to each person at their highest level of NatWest Group
key management, and relate to those who were key management at any time during the
\ufb01nancial period.
\n \n
At 31 December
2025
2024
\u00a3000
\u00a3000
Loans to customers - amortised cost
2,631
3,538
Customer deposits
52,378
39,431
At 31 December 2025, amounts outstanding in relation to transactions, arrangements and
agreements entered into by authorised institutions in NatWest Group, as de\ufb01ned in UK legislation,
were \u00a32,582,333 in respect of loans to six persons who were directors of the company at any
time during the \ufb01nancial period.", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00288": { "value": "30 Directors\u2019 and key management remuneration
Directors and key management are remunerated for services rendered in the period. The
executive directors may participate in the company's long-term incentive plans, executive
share option and Sharesave schemes and details of their interests in the company's shares
arising from their participation are given in the Directors' remuneration report. Details of the
remuneration received by each director are also given in the Directors' remuneration report.
Key management comprises members of the NatWest Group plc and NWH Ltd Boards, members
of the NatWest Group plc and NWH Ltd Executive Committees, and the Chief Executives of
NatWest Markets Plc and RBS International (Holdings) Limited. This is on the basis that these
individuals have been identi\ufb01ed as Persons Discharging Managerial Responsibilities of NatWest
Group plc under the new governance structure.
\n \n
2025
2024
Directors' remuneration
\u00a3000
\u00a3000
Non-executive directors emoluments
1,638
1,547
Chair and executive directors emoluments
7,519
6,425
9,157
7,972
Amounts receivable under long-term incentive plans
and share option plans
3,279
1,471
Total
12,436
9,443
Compensa\ue001on of key management
The aggregate remuneration of directors and other members of key management during the
year was as follows:
\n \n
2025
2024
\u00a3000
\u00a3000
Short-term benefits
23,380
20,862
Post-employment benefits
683
643
Share-based payments
10,801
5,624
34,864
27,129
Short term bene\ufb01ts include bene\ufb01ts expected to be settled wholly within twelve months of
balance sheet date. Post-employment bene\ufb01ts include de\ufb01ned bene\ufb01t contributions for active
members and pension funding to support contributions to the de\ufb01ned contribution schemes.
Share-based payments include awards vested under rewards schemes.
31 Transactions with directors and key management
This note presents information relating to any transactions with directors and key
management. Key management comprises directors of the company and Persons
Discharging Managerial Responsibilities (PDMRs) of NatWest Group plc.
For the purposes of IAS 24 Related party disclosures, key management comprises directors of the
company and PDMRs of NatWest Group plc. Key management have banking relationships with
NatWest Group entities which are entered into in the normal course of business and on
substantially the same terms, including interest rates and security, as for comparable transactions
with other persons of a similar standing or, where applicable, with other employees. These
transactions did not involve more than the normal risk of repayment or present other
unfavourable features.
Amounts in the table below are attributed to each person at their highest level of NatWest Group
key management, and relate to those who were key management at any time during the
\ufb01nancial period.
\n \n
At 31 December
2025
2024
\u00a3000
\u00a3000
Loans to customers - amortised cost
2,631
3,538
Customer deposits
52,378
39,431
At 31 December 2025, amounts outstanding in relation to transactions, arrangements and
agreements entered into by authorised institutions in NatWest Group, as de\ufb01ned in UK legislation,
were \u00a32,582,333 in respect of loans to six persons who were directors of the company at any
time during the \ufb01nancial period.
32 Related parties
A related party is a person or entity that is related to the entity that is preparing its \ufb01nancial statements. This includes subsidiaries, associates, joint ventures, post-employment bene\ufb01ts plans,
Key management personnel and their close family members and entities controlled by them. Transactions between an entity and any related party are disclosed in the \ufb01nancial statements in
accordance with both accounting standards and relevant listing rules to ensure readers are aware of how \ufb01nancial statements may be affected by these transactions.
UK Government
In May 2025, the UK Government through His Majesty\u2019s Treasury (HMT) sold its remaining
shareholding in NatWest Group plc. Under UK listing rules the UK Government and UK
Government-controlled bodies remained related parties until 12 July 2025, 12 months after
the UK Government shareholding in NatWest Group plc fell below 20%.
NatWest Group enters into transactions with many of these bodies. Transactions include
the payment of: taxes \u2013 principally UK corporation tax (Note 7) and value added tax;
national insurance contributions; local authority rates; and regulatory fees and levies
(including the UK bank levy Note 3) and FSCS levy (Note 25) - together with banking
transactions such as loans and deposits undertaken in the normal course of banker-
customer relationships.
Bank of England facilities
NatWest Group may participate in a number of schemes operated by the Bank of England
in the normal course of business.
In March 2024 Bank of England Levy replaced the Cash Ratio Deposit scheme. Members of
NatWest Group that are UK authorised institutions having eligible liabilities greater than
\u00a3600 million are required to pay the levy. They also have access to Bank of England
reserve accounts: sterling current accounts that earn interest at the Bank of England Base
rate.
NatWest Group provides guarantees for certain subsidiaries, liabilities to the Bank of
England
.
Other Related Parties
In accordance with IAS 24, transactions or balances between NatWest Group entities that
have been eliminated on consolidation are not reported.
The primary financial statements of the parent company include transactions and balances
with its subsidiaries which have been further disclosed in the relevant notes.
Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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.
Amounts included in the NatWest Group financial statements, in aggregate, by category of
related party are as follows:
Associates and joint
Equity
ventures
shares (1)
Total
31 December 2025
\u00a3m
\u00a3m
\u00a3m
Investments
753
1
754
Loans to customers - amortised cost
-
4
4
Customer deposits
1
-
1
Other comprehensive income
-
33
33
Other operating income
69
10
79
31 December 2024
Investments
690
122
812
Loans to customers - amortised cost
-
4
4
Customer deposits
1
1
2
Other comprehensive income
-
(22)
(22)
Other operating income
19
-
19
(1)
Represents investments in entities where ownership is more than 10%
Post employment bene\ufb01ts
NatWest Group recharges NatWest Group Pension Fund with the cost of pension
management services incurred by it. NatWest Group Pension Fund holds bank accounts
held with the NatWest Group plc. At 31 December 2025 these balances amounted to \u00a344.1
million (2024 - \u00a343.2 million).
NatWest Group Pension fund also holds certain interest rate swaps, inflation swaps, credit
derivatives, cross currency swaps and forward exchange rate agreements where
subsidiaries of NatWest Group act as counterparties. These transactions are on commercial
terms and carried out on an arms-length basis.
During February 2023, NatWest Group entered into an agreement to establish a new legal
structure to hold assets, consolidated on NatWest Group\u2019s balance sheet, to meet potential
future contributions required by the Main section of the Group\u2019 Pension Fund. This
transaction required transfer of \u00a3471 million to the Reservoir Trust after the final dividend
for 2022 approved by shareholders. This transaction does not create a pension liability with
the Main section of the Group Pension Fund. Refer to details in Note 5 and in Material
contracts information on page 423.", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00669": { "value": "A related party is a person or entity that is related to the entity that is preparing its \ufb01nancial statements. This includes subsidiaries, associates, joint ventures, post-employment bene\ufb01ts plans,
Key management personnel and their close family members and entities controlled by them. Transactions between an entity and any related party are disclosed in the \ufb01nancial statements in
accordance with both accounting standards and relevant listing rules to ensure readers are aware of how \ufb01nancial statements may be affected by these transactions.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00705": { "value": "Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00670": { "value": "Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00671": { "value": "Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00310": { "value": "Associates, joint ventures (JVs) and equity investments
In their roles as providers of finance, NatWest 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, NatWest 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.
Amounts included in the NatWest Group financial statements, in aggregate, by category of
related party are as follows:
Associates and joint
Equity
ventures
shares (1)
Total
31 December 2025
\u00a3m
\u00a3m
\u00a3m
Investments
753
1
754
Loans to customers - amortised cost
-
4
4
Customer deposits
1
-
1
Other comprehensive income
-
33
33
Other operating income
69
10
79
31 December 2024
Investments
690
122
812
Loans to customers - amortised cost
-
4
4
Customer deposits
1
1
2
Other comprehensive income
-
(22)
(22)
Other operating income
19
-
19
(1)
Represents investments in entities where ownership is more than 10%", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00301": { "value": "33 Post balance sheet events
A post balance sheet event is an event that takes place between the reporting date and the
date of approval of the \ufb01nancial statements. Signi\ufb01cant events are included in the \ufb01nancial
statements either to provide new information about conditions that existed at 31 December
2025 (reporting date), including estimates used to prepare the \ufb01nancial statements (known
as an adjusting event) or to provide new information about conditions that did not exist at
31 December 2025 (non-adjusting events). This note provides information relating to
material non-adjusting events.
On 9 February 2026, NatWest Group plc announced that it had reached an agreement to
acquire Evelyn Partners for an enterprise value of \u00a32.7 billion. Evelyn Partners is a leading
integrated wealth management and financial planning firm with approximately \u00a369 billion of
assets under management and administration. The transaction is expected to complete in
the summer of 2026, subject to regulatory approval.
As part of the ongoing on-market share buyback programme, NatWest Group plc has
repurchased and cancelled a further 23.99 million shares since December 2025 for a total
consideration (excluding fees) of \u00a3156.76 million.
Other than as disclosed in the accounts, there have been no other significant events
subsequent to 31 December 2025 which would require a change or additional disclosure. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00207": { "value": "36 St Andrew Square Edinburgh, EH2 2YB", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:2138005O9XJIJN4JPN90", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } } } }