Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
Please consider a small donation if you think this website provides you with relevant information
| Statement |
|---|
| The book is performing better than we'd anticipated |
| I hope you'll agree we've laid out a good strong performance for 2023 |
| We have delivered strong returns across our 3 businesses in both 2022 and 2023 |
| Retail Banking continued to be our highest-returning business in 2023 with good income growth |
| I noted on Slide 21, you still get through-the-cycle figures, 20 bps to 30 bps; and you obviously expect to come in better than that this year |
| And that's why we have confidence in the income growth over the medium-term, as we see those deposits stabilize |
| Naturally, I'm delighted to have been confirmed as the CEO of NatWest Group today and look forward to driving the very best performance we can for the benefit of our customers and shareholders |
| Our Commercial & Institutional business delivered the strongest year-on-year improvement, growing income by 16% and operating profit by 27% |
| Our business diversification enabled us to deliver a strong group performance whilst responding to a broad range of customer behaviors and market dynamics |
| This gives us an opportunity to be a trusted partner to customers at a time of ongoing change |
| I'm very keen that we have good cost discipline |
| I think we've proven over a number of years in both businesses that we've successfully grown the asset side of the business |
| So our TNAV is growing very well, very strongly this year |
| I think we've got a good track record over a number of years delivering on that line |
| We're also making big market share gains in areas like startups and youth, where we're now over 20% |
| This customer activity underpins our strong financial performance |
| We believe they're businesses and asset classes that offer good upside over the course of the next couple of years |
| Our performance naturally reflects the rates environment in 2023, but our strong capital and risk management made an important contribution too |
| Non-interest income excluding notable items grew 2.5%, supported by increased customer activity and higher income from the markets business |
| On the asset side, our personal lending is almost secure and our corporate book is well diversified |
| In the kind of commercial and institutional business, we've seen some good growth around our project finance, infrastructure and funds business |
| This balance sheet strength and well-diversified funding underpins our ability to continue supporting customers through the economic cycle |
| We are pleased to have delivered another year of balanced lending growth across the group |
| We've also made good progress on the unsecured side in retail |
| Business confidence is also improving, and our net lending to large U.K |
| As you see that deposit stabilization and then the mortgage stabilization as well what -- and then you start to see the structural hedge kind of come through, we expect the second half income of 2024 to be better than the first half |
| Household and corporate balance sheets remained strong and the resilience of our customers is evident from our low level of impairments in 2023 |
| During the first half, we delivered strong mortgage growth, whereas in the second half, we delivered strong corporate loan growth as we took a disciplined approach to capital allocation in a competitive and dynamic market |
| We believe the strength from our customer franchise positions us well for 2024 and beyond |
| We have leading market positions and we also have a track record of growing share in attractive segments |
| Statement |
|---|
| And then finally, on the asset side, we experienced significant mortgage margin pressure in 2023 as our mortgage customers refinanced onto higher rates at a tighter margin |
| We also anticipate a slight deterioration in levels of employment in both '24 and '25 |
| This was slightly lower than our expectations as a result of active management in December yet up from 15% at the end of the third quarter and 6% at the start of the year |
| And there's clearly some downside versus consensus, but I guess, to push back against that it doesn't really feel that surprising to see you come out with a revenue number that's that low |
| Income excluding all notable items was GBP 3.4 billion, down 2% |
| So loan impairment, 15 bps for '23, obviously below our through-the-cycle range |
| As expected, the rate of margin compression was slower than in the third quarter |
| However, inflation has fallen and market expectations for interest rates have come down |
| In my first year, we declared a loss of over GBP 2 billion |
| Bank net interest margin reduced by 8 basis points to 286 which includes a 3 basis point drag from notable items |
| Is it a demand problem or a supply problem? Is that the key issue in terms of a sort of reasonably lackluster -- because I guess the loan growth and the economic performance often go together |
| However, this was offset by higher costs and an increase in impairments, which impacted the return on equity, reducing it to 23.8% |
| Non-interest income fell 6.9%, reflecting seasonally lower trading and other income |
| I think, if you looked at what happened in rates just in the first part of this year and if I was to cut the numbers now, you'd actually see it reverse a little bit in the other direction, but overall with our rate assumptions, we'll definitely see that continue to come down |
| You've seen the guide for '24, below 20 |
| However, overall demand from personal and business customers is currently muted |
| However, this flow share reduced to 10.5% in the fourth quarter, as we managed the balance sheet in a smaller, more competitive market |
| And I presume you're assuming within the guidance some negative pricing lag effects |
| This headwind continues to moderate |
| And I'm not going to share with you -- or it just now, but we have worked on a 60% pass-through of that rate, taking in mind as well that there is a delay in passing through because of some of the regulatory requirements so the speed of notification that you need to give to our customer base |
Please consider a small donation if you think this website provides you with relevant information