“NatWest Group delivered a strong performance in 2021 as we returned to profitability, made progress against our strategy, and distributed more than £3.8bn of capital to our shareholders, including £1.7bn to the taxpayer,” said chief executive officer Alison Rose.
NatWest reported a “resilient financial performance in a challenging environment,” with full year attributable profit of £2,950m and a return on tangible equity of 9.4%.
Its income across the UK and Royal Bank of Scotland (RBS) International retail and commercial businesses generally increased by 1.4% from 2020, reflecting “balance sheet growth,” although NatWest reported that this was offset by a 61.5% reduction in NatWest Markets income.
Q4 2021 bank net interest margin (NIM) of 2.38% was 3 basis points higher than it was in Q3, reflecting higher yield curve and higher unsecured balances only partly offset by lower mortgage margins.
Other expenses, excluding operating lease depreciation and Ulster Bank RoI direct costs, were £256 million, 4% lower than 2020 and in line with NatWest’s target for the year.
NatWest also observed releases in non-default portfolios and low levels of realised losses throughout the year, which reflected in a net impairment release of £1,278m, or 35 basis points of gross customer loans.
A final dividend of 7.5p was proposed. The report revealed NatWest’s plan to commence an ordinary share buy-back programme of up to £750m in the first half of the year, taking total distributions deducted from capital in the year to £3.8bn.
The report also revealed strong capital and liquidity levels in NatWest, with its CET1 ratio at 18.2% and proforma CET1 ratio at 15.9% on January 01, 2022, following regulatory changes.
The liquidity coverage ratio of 172% increased by 6% in Q4.
Across the UK and RBS International retail and commercial businesses, net lending excluding UK government support schemes increased by £7.8bn, or 2.6%, including £10.8bn of mortgage growth, and increased by £0.8bn in Q4 2021.
Customer deposits increased by £48.1bn in 2021, raising total customer deposits to £479.8bn.
