Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Document Information [Line Items] | |
Entity Registrant Name | NatWest Group plc |
Entity Central Index Key | 0000844150 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2021 |
Amendment Flag | false |
Document Fiscal Period Focus | FY |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Incorporation, State or Country Code | X0 |
Entity File Number | 001-10306 |
Entity Address, Address Line One | Gogarburn, |
Entity Address, Address Line Two | PO Box 1000 |
Entity Address, City or Town | Edinburgh |
Entity Address, Country | GB |
Entity Address, Postal Zip Code | EH12 1HQ |
Entity Interactive Data Current | Yes |
Entity Well-known Seasoned Issuer | No |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | International Financial Reporting Standards |
Entity Shell Company | false |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
ICFR Auditor Attestation Flag | true |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 1438 |
Auditor Location | London, United Kingdom |
Chief Governance Officer and Company Secretary | |
Document Information [Line Items] | |
Entity Address, Address Line One | PO Box 1000 |
Entity Address, Address Line Two | Gogarburn |
Entity Address, City or Town | Edinburgh |
Entity Address, Country | GB |
Entity Address, Postal Zip Code | EH12 1HQ |
Contact Personnel Name | Jan Cargill |
City Area Code | +44 (0) |
Local Phone Number | 370 702 0135 |
Ordinary shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Ordinary shares, nominal value £1 per share |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 11,467,982,635 |
No Trading Symbol Flag | true |
11% Cumulative Preference Shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 240,686 |
5 1/2% Cumulative Preference Shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 242,454 |
Non-cumulative preference shares of US$0.01 | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 10,130 |
American Depositary Shares, each representing 2 ordinary shares, nominal value ??1 per share | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares, each representing 2 ordinary shares, nominal value £1 per share |
Trading Symbol | RBS |
Security Exchange Name | NYSE |
Dollar Perpetual Regulatory Tier 1 Securities | |
Document Information [Line Items] | |
Title of 12(b) Security | Dollar Perpetual Regulatory Tier 1 Securities |
Trading Symbol | RBSP1 |
Security Exchange Name | NYSE |
3.875% Senior Notes due 2023 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.875% Senior Notes due 2023 |
Trading Symbol | RBS23B |
Security Exchange Name | NYSE |
3.498% Fixed Rate / Floating Rate Senior Notes due 2023 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.498% Fixed Rate / Floating Rate Senior Notes due 2023 |
Trading Symbol | RBS23D |
Security Exchange Name | NYSE |
4.519% Fixed Rate / Floating Rate Senior Notes due 2024 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.519% Fixed Rate / Floating Rate Senior Notes due 2024 |
Trading Symbol | RBS23A |
Security Exchange Name | NYSE |
2.359% Callable Fixed-to-fixed Reset Rate Green Senior Notes due 2024 | |
Document Information [Line Items] | |
Title of 12(b) Security | 2.359% Callable Fixed-to-fixed Reset Rate Green Senior Notes due 2024 |
Trading Symbol | RBS24C |
Security Exchange Name | NYSE |
4.269% Fixed Rate / Floating Rate Senior Notes due 2025 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.269% Fixed Rate / Floating Rate Senior Notes due 2025 |
Trading Symbol | RBS25 |
Security Exchange Name | NYSE |
3.073% Callable Fixed-to-fixed Reset Rate Senior Notes due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.073% Callable Fixed-to-fixed Reset Rate Senior Notes due 2028 |
Trading Symbol | RBS28 |
Security Exchange Name | NYSE |
4.892% Fixed Rate / Floating Rate Senior Notes due 2029 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.892% Fixed Rate / Floating Rate Senior Notes due 2029 |
Trading Symbol | RBS29 |
Security Exchange Name | NYSE |
5.076% Fixed Rate / Floating Rate Senior Notes due 2030 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.076% Fixed Rate / Floating Rate Senior Notes due 2030 |
Trading Symbol | RBS30 |
Security Exchange Name | NYSE |
4.445% Fixed Rate / Floating Rate Senior Notes due 2030 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.445% Fixed Rate / Floating Rate Senior Notes due 2030 |
Trading Symbol | RBS30A |
Security Exchange Name | NYSE |
1.642% Senior Callable Fixed-to-Fixed Reset Rate Notes due 2027 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.642% Senior Callable Fixed-to-Fixed Reset Rate Notes due 2027 |
Trading Symbol | NWG27 |
Security Exchange Name | NYSE |
4.8% Fixed Rate Notes due 2026 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.8% Fixed Rate Notes due 2026 |
Trading Symbol | RBS26 |
Security Exchange Name | NYSE |
Senior Floating Rate Notes due 2023 | |
Document Information [Line Items] | |
Title of 12(b) Security | Senior Floating Rate Notes due 2023 |
Trading Symbol | RBS23C |
Security Exchange Name | NYSE |
Senior Floating Rate Notes due 2024 | |
Document Information [Line Items] | |
Title of 12(b) Security | Senior Floating Rate Notes due 2024 |
Trading Symbol | RBS24B |
Security Exchange Name | NYSE |
6.125% Subordinated Tier 2 Notes due 2022 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.125% Subordinated Tier 2 Notes due 2022 |
Trading Symbol | RBS22 |
Security Exchange Name | NYSE |
6.000% Subordinated Tier 2 Notes due 2023 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.000% Subordinated Tier 2 Notes due 2023 |
Trading Symbol | RBS23A |
Security Exchange Name | NYSE |
6.100% Subordinated Tier 2 Notes due 2023 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.100% Subordinated Tier 2 Notes due 2023 |
Trading Symbol | RBS23 |
Security Exchange Name | NYSE |
5.125% Subordinated Tier 2 Notes due 2024 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.125% Subordinated Tier 2 Notes due 2024 |
Trading Symbol | RBS24 |
Security Exchange Name | NYSE |
3.754% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2029 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.754% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2029 |
Trading Symbol | RBS29A |
Security Exchange Name | NYSE |
3.032% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2035 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.032% Fixed-to-fixed Reset Rate Subordinated Tier 2 Notes due 2035 |
Trading Symbol | NWG35 |
Security Exchange Name | NYSE |
Consolidated income statement
Consolidated income statement - GBP (£) £ in Millions | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | [1] | Dec. 31, 2019 | [1] | ||
Consolidated income statement | ||||||
Interest receivable | £ 9,313 | £ 9,798 | £ 11,127 | |||
Interest payable | (1,699) | (2,322) | (3,328) | |||
Net interest income | 7,614 | 7,476 | 7,799 | |||
Fees and commissions receivable | 2,698 | 2,722 | 3,345 | |||
Fees and commissions payable | (574) | (722) | (848) | |||
Income from trading activities | 323 | 1,125 | 932 | |||
Other operating income | 451 | (93) | 2,759 | |||
Non-interest income | 2,898 | 3,032 | 6,188 | |||
Total income | 10,512 | 10,508 | 13,987 | |||
Staff costs | (3,676) | (3,878) | (3,976) | |||
Premises and equipment | (1,133) | (1,222) | (1,258) | |||
Other administrative expenses | (2,026) | (1,845) | (2,828) | |||
Depreciation and amortisation | (923) | (913) | (1,218) | |||
Operating expenses | (7,758) | (7,858) | (9,280) | |||
Profit before impairment losses | 2,754 | 2,650 | 4,707 | |||
Impairment releases | 1,278 | (3,131) | (724) | |||
Operating profit before tax | 4,032 | (481) | 3,983 | |||
Tax charge | (996) | (74) | (439) | |||
Profit/(loss) from continuing operations | 3,036 | (555) | 3,544 | |||
Profit from discontinued operations, net of tax | [2] | 276 | 121 | 256 | ||
Profit/(loss) for the year | 3,312 | (434) | 3,800 | |||
Attributable to: | ||||||
Ordinary shareholders | 2,950 | (753) | 3,133 | |||
Preference shareholders | 19 | 26 | 39 | |||
Paid-in equity holders | 299 | 355 | 367 | |||
Non-controlling interests | 44 | (62) | 261 | |||
Profit/(loss) for the year | £ 3,312 | £ (434) | £ 3,800 | |||
Per ordinary share | ||||||
Earnings per ordinary share - continuing operations | £ 0.230 | £ (0.072) | £ 0.239 | |||
Earnings per ordinary share - discontinued operations | 0.024 | 0.010 | 0.021 | |||
Total earnings per share attributable to ordinary shareholders - basic | 0.254 | (0.062) | 0.260 | |||
Earnings per ordinary share - fully diluted continuing operations | 0.229 | (0.072) | 0.238 | |||
Earnings per ordinary share - fully diluted discontinued operations | 0.024 | 0.010 | 0.021 | |||
Total earnings per share attributable to ordinary shareholders - fully diluted | £ 0.253 | £ (0.062) | £ 0.259 | |||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. | |||||
[2] | The results of discontinued operations, comprising the post-tax profit is shown as a single amount on the face of the income statement. An analysis of this amount is presented in Note 8 to the consolidated financial statements. |
Consolidated statement of compr
Consolidated statement of comprehensive income - GBP (£) £ in Millions | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||||
Consolidated statement of comprehensive income | ||||||
Profit/(loss) for the year | £ 3,312 | £ (434) | [1] | £ 3,800 | [1] | |
Items that do not qualify for reclassification | ||||||
- other movements | [2] | (669) | 4 | (142) | ||
Loss on fair value of credit in financial liabilities designated at FVTPL due to own credit risk | (29) | (52) | (189) | |||
FVOCI financial assets | 13 | (64) | (71) | |||
Tax | 164 | 42 | 28 | |||
Total - Items that do not qualify for reclassification | (521) | (70) | (374) | |||
Items that do qualify for reclassification | ||||||
FVOCI financial assets | (100) | 44 | (14) | |||
Cash flow hedges | (848) | 271 | 294 | |||
Currency translation | (382) | 276 | (1,836) | |||
Tax | 213 | (89) | (170) | |||
Total - Items that do qualify for reclassification | (1,117) | 502 | (1,726) | |||
Other comprehensive (loss)/income after tax | (1,638) | 432 | (2,100) | |||
Total comprehensive income/(loss) for the year | 1,674 | (2) | 1,700 | |||
Attributable to: | ||||||
Ordinary shareholders | 1,308 | (338) | 1,044 | |||
Preference shareholders | 19 | 26 | 39 | |||
Paid-in equity holders | 299 | 355 | 367 | |||
Non-controlling interests | 48 | (45) | 250 | |||
Total comprehensive income/(loss) for the year | £ 1,674 | £ (2) | £ 1,700 | |||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. | |||||
[2] | Following the purchase of ordinary shares from UKGI in March 2021, NatWest Group contributed £500 million to its main pension scheme in line with the memorandum of understanding announced on 17 April 2018. After tax relief, this contribution reduced total equity by £365 million. There was also a pre-tax loss of £192 million (€ 224 million) in relation to the re-measurement of the Group’s Republic of Ireland pension schemes, primarily as a result of significant movements in underlying actuarial assumptions (2020: pre-tax gain of £ 72 million (€ 81 million)). In line with our policy, the present value of defined benefit obligations and the fair value of plan assets at the end of the reporting period, are assessed to identify significant market fluctuations and one-off events since the end of the prior financial year. |
Consolidated statement of com_2
Consolidated statement of comprehensive income (Parenthetical) € in Millions, £ in Millions | 1 Months Ended | |||
Mar. 31, 2021GBP (£) | Mar. 31, 2021EUR (€) | Mar. 31, 2020GBP (£) | Mar. 31, 2020EUR (€) | |
Main Scheme | ||||
Disclosure of transactions between related parties [line items] | ||||
Contributions | £ 500 | |||
Decrease in equity | 365 | |||
Ireland Pension Scheme | ||||
Disclosure of transactions between related parties [line items] | ||||
Net gain (loss) due to significant movements in underlying actuarial assumptions | (192) | € (224) | £ 72 | € 81 |
UK Government Investments Ltd (UKGI) | Main Scheme | ||||
Disclosure of transactions between related parties [line items] | ||||
Contributions | 500 | |||
Decrease in equity | £ 365 |
Consolidated balance sheet
Consolidated balance sheet - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and balances at central banks | £ 177,757 | £ 124,489 |
Trading assets | 59,158 | 68,990 |
Derivatives | 106,139 | 166,523 |
Settlement balances | 2,141 | 2,297 |
Loans to banks - amortised cost | 7,682 | 6,955 |
Loans to customers - amortised cost | 358,990 | 360,544 |
Securities subject to repurchase agreements | 11,746 | 11,542 |
Other financial assets excluding securities subject to repurchase agreements | 34,399 | 43,606 |
Other financial assets | 46,145 | 55,148 |
Intangible assets | 6,723 | 6,655 |
Other assets | 8,242 | 7,890 |
Assets of disposal groups | 9,015 | |
Total assets | 781,992 | 799,491 |
Liabilities | ||
Bank deposits | 26,279 | 20,606 |
Customer deposits | 479,810 | 431,739 |
Settlement balances | 2,068 | 5,545 |
Trading liabilities | 64,598 | 72,256 |
Derivatives | 100,835 | 160,705 |
Other financial liabilities | 49,326 | 45,811 |
Subordinated liabilities | 8,429 | 9,962 |
Notes in circulation | 3,047 | 2,655 |
Other liabilities | 5,797 | 6,388 |
Total liabilities | 740,189 | 755,667 |
Equity | ||
Ordinary shareholders' interests | 37,412 | 38,367 |
Other owners' interests | 4,384 | 5,493 |
Owners' equity | 41,796 | 43,860 |
Non-controlling interests | 7 | (36) |
Total equity | 41,803 | 43,824 |
Total liabilities and equity | £ 781,992 | £ 799,491 |
Condensed consolidated statemen
Condensed consolidated statement of changes in equity - GBP (£) £ in Millions | Called-up share capital | Paid-in equity | Share premium account | Merger reserve | FVOCI reserve | Cash flow hedging reserve | Foreign exchange reserve | Capital redemption reserve | Retained earnings | Own shares held | Shareholders' equity | Non-controlling interests | Ordinary shareholders | Preference shareholders | Total | |||
Balance at Dec. 31, 2018 | £ 12,049 | £ 4,058 | £ 1,027 | £ 343 | £ (191) | £ 3,278 | £ 14,312 | £ (21) | £ 754 | |||||||||
Ordinary shares issued | 45 | 67 | ||||||||||||||||
Share cancellation (1,5) | [1] | £ 0 | ||||||||||||||||
Implementation of IFRS 16 on 1 January 2019 (5) | (187) | |||||||||||||||||
profit/(loss) attributable to ordinary shareholders and other equity owners - continuing operations | 3,283 | |||||||||||||||||
profit/(loss) attributable to ordinary shareholders and other equity owners - discontinued operations | 256 | |||||||||||||||||
Equity preference dividends paid | (39) | |||||||||||||||||
Paid-in equity dividends paid | (367) | |||||||||||||||||
Ordinary dividends paid | (3,018) | |||||||||||||||||
Shares repurchased during the year | [1] | 60 | ||||||||||||||||
Unrealised gains/(losses) | (107) | £ (22) | ||||||||||||||||
Realised losses/(gains) | [2] | (90) | ||||||||||||||||
Tax | (8) | |||||||||||||||||
Amount recognized in equity | 573 | |||||||||||||||||
Amount transferred from equity to earnings | (279) | |||||||||||||||||
Tax | (68) | |||||||||||||||||
Retranslation of net assets | (428) | |||||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | 83 | |||||||||||||||||
Tax | (110) | |||||||||||||||||
Recycled to profit or loss on disposal of businesses | (1,480) | |||||||||||||||||
Realised (losses)/gains in period on FVOCI equity shares Gross | 112 | |||||||||||||||||
Remeasurement of the retirement benefit schemes other movements | [3] | (142) | ||||||||||||||||
Remeasurement of the retirement benefit schemes, tax | [3] | 24 | ||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, gross | (189) | (189) | ||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, tax | 20 | |||||||||||||||||
Shares issued under employee share schemes | (6) | 39 | ||||||||||||||||
Share based payments | [4] | (113) | ||||||||||||||||
Own shares acquired | [1] | (60) | ||||||||||||||||
Currency translation adjustments and other movements | (11) | |||||||||||||||||
Profit/(loss) attributable to non-controlling interests | 261 | |||||||||||||||||
Dividends paid | (5) | |||||||||||||||||
Equity raised | 45 | |||||||||||||||||
Equity withdrawn and disposals | (1,035) | |||||||||||||||||
Balance at Dec. 31, 2019 | 12,094 | 4,058 | 1,094 | £ 10,881 | 138 | 35 | 1,343 | 0 | 13,946 | (42) | £ 43,547 | 9 | £ 38,993 | £ 496 | 43,556 | |||
Ordinary shares issued | 35 | 17 | ||||||||||||||||
Share cancellation (1,5) | [1] | 0 | ||||||||||||||||
Securities issued during the period | 2,218 | |||||||||||||||||
Redeemed | (1,277) | |||||||||||||||||
profit/(loss) attributable to ordinary shareholders and other equity owners - continuing operations | (493) | |||||||||||||||||
profit/(loss) attributable to ordinary shareholders and other equity owners - discontinued operations | 121 | |||||||||||||||||
Equity preference dividends paid | (26) | |||||||||||||||||
Paid-in equity dividends paid | (355) | |||||||||||||||||
Shares repurchased during the year | [1] | 77 | ||||||||||||||||
Unclaimed dividend | 2 | |||||||||||||||||
Redemption/reclassification of paid-in equity (2,6) | [5],[6] | (355) | ||||||||||||||||
Unrealised gains/(losses) | 76 | 96 | ||||||||||||||||
Realised losses/(gains) | [2] | 152 | ||||||||||||||||
Tax | (6) | |||||||||||||||||
Amount recognized in equity | 321 | |||||||||||||||||
Amount transferred from equity to earnings | (50) | |||||||||||||||||
Tax | (77) | |||||||||||||||||
Retranslation of net assets | 297 | |||||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | (55) | |||||||||||||||||
Tax | 6 | |||||||||||||||||
Recycled to profit or loss on disposal of businesses | 17 | |||||||||||||||||
Realised (losses)/gains in period on FVOCI equity shares Gross | (248) | |||||||||||||||||
Remeasurement of the retirement benefit schemes other movements | [3] | 4 | ||||||||||||||||
Remeasurement of the retirement benefit schemes, tax | [3] | 22 | ||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, gross | (52) | (52) | ||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, tax | 8 | |||||||||||||||||
Shares issued under employee share schemes | (11) | 95 | ||||||||||||||||
Share based payments | [4] | 4 | ||||||||||||||||
Own shares acquired | [1] | (77) | ||||||||||||||||
Currency translation adjustments and other movements | 17 | |||||||||||||||||
Profit/(loss) attributable to non-controlling interests | (62) | |||||||||||||||||
Balance at Dec. 31, 2020 | 12,129 | 4,999 | 1,111 | 10,881 | 360 | 229 | 1,608 | 0 | 12,567 | (24) | 43,860 | (36) | 38,367 | 494 | 43,824 | |||
Ordinary shares issued | 37 | 50 | ||||||||||||||||
Share cancellation (1,5) | [1] | (698) | [7] | 698 | ||||||||||||||
Securities issued during the period | 937 | |||||||||||||||||
Reclassified (2) | [5] | (2,046) | ||||||||||||||||
profit/(loss) attributable to ordinary shareholders and other equity owners - continuing operations | 2,992 | |||||||||||||||||
profit/(loss) attributable to ordinary shareholders and other equity owners - discontinued operations | 276 | |||||||||||||||||
Equity preference dividends paid | (19) | |||||||||||||||||
Paid-in equity dividends paid | (299) | |||||||||||||||||
Ordinary dividends paid | (693) | |||||||||||||||||
Shares repurchased during the year | [1] | (1,423) | [7] | 383 | ||||||||||||||
Redemption of preference shares | 24 | 24 | ||||||||||||||||
Redemption/reclassification of paid-in equity (2,6) | [5],[6] | 150 | ||||||||||||||||
Unrealised gains/(losses) | 32 | 117 | ||||||||||||||||
Realised losses/(gains) | [2] | (122) | ||||||||||||||||
Tax | (1) | |||||||||||||||||
Amount recognized in equity | (687) | |||||||||||||||||
Amount transferred from equity to earnings | (161) | |||||||||||||||||
Tax | 224 | |||||||||||||||||
Retranslation of net assets | (484) | |||||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | 88 | |||||||||||||||||
Tax | (17) | |||||||||||||||||
Recycled to profit or loss on disposal of businesses | 10 | |||||||||||||||||
Realised (losses)/gains in period on FVOCI equity shares Gross | 3 | |||||||||||||||||
Remeasurement of the retirement benefit schemes other movements | [3] | (669) | ||||||||||||||||
Remeasurement of the retirement benefit schemes, tax | [3] | 168 | ||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, gross | (29) | (29) | ||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, tax | 3 | |||||||||||||||||
Shares issued under employee share schemes | 8 | 36 | ||||||||||||||||
Share based payments | [4] | (45) | ||||||||||||||||
Own shares acquired | [1] | 1,423 | [7] | (383) | ||||||||||||||
Currency translation adjustments and other movements | 4 | |||||||||||||||||
Profit/(loss) attributable to non-controlling interests | 44 | |||||||||||||||||
Dividends paid | (5) | |||||||||||||||||
Balance at Dec. 31, 2021 | £ 11,468 | £ 3,890 | £ 1,161 | £ 10,881 | £ 269 | £ (395) | £ 1,205 | £ 722 | £ 12,966 | £ (371) | £ 41,796 | £ 7 | £ 37,412 | £ 494 | £ 41,803 | |||
[1] | In March 2021, there was an agreement with HM Treasury to buy 591 million ordinary shares in the Company from UK Government Investments Ltd (UKGI), at 190.5 p per share for the total consideration of £ 1.13 billion. NatWest Group cancelled 391 million of the purchased ordinary shares, amounting to £ 744 million excluding fees, and held the remaining 200 million in own shares held, amounting to £ 381 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve. | |||||||||||||||||
[2] | In 2020, the completion of the Alawwal bank merger resulted in the derecognition of the associate investment in Alawwal bank and recognition of a new investment in SABB held at fair value through other comprehensive income (FVOCI). | |||||||||||||||||
[3] | Following the purchase of ordinary shares from UKGI in March 2021, NatWest Group contributed £ 500 million to its main pension scheme in line with the memorandum of understanding announced on 17 April 2018. After tax relief, this contribution reduced total equity by £ 365 million. There was also a pre-tax loss of £ 192 million (€ 224 million) in relation to the re-measurement of the Group’s Republic of Ireland pension schemes, primarily as a result of significant movements in underlying actuarial assumptions (2020: pre-tax gain of £ 72 million (€ 81 million)). In line with our policy, the present value of defined benefit obligations and the fair value of plan assets at the end of the reporting period, are assessed to identify significant market fluctuations and one-off events since the end of the prior financial year. | |||||||||||||||||
[4] | Share-based payments includes a tax credit of £ 10 million. | |||||||||||||||||
[5] | In July 2021, paid-in equity reclassified to liabilities as the result of a call in August 2021 of US $2.65 billion AT1 capital notes . | |||||||||||||||||
[6] | The redemption of paid-in equity includes a tax credit of £16 million. | |||||||||||||||||
[7] | In line with the announcement in July 2021, NatWest Group plc repurchased and cancelled 310.8 million shares for total consideration of £676.2 million excluding fees. Of the 310.8 million shares bought back, 2.8 million shares were settled and cancelled in January 2022. The nominal value of the share cancellations has been transferred to the capital redemption reserve with the share premium element to retained earnings. |
Condensed consolidated statem_2
Condensed consolidated statement of changes in equity (Parenthetical) € in Millions, £ in Millions, shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2022shares | Jul. 31, 2021GBP (£)shares | Mar. 31, 2021GBP (£)£ / sharesshares | Mar. 31, 2021EUR (€)shares | Mar. 31, 2020GBP (£) | Mar. 31, 2020EUR (€) | Dec. 31, 2021GBP (£) | Dec. 31, 2021EUR (€) | Jul. 31, 2021USD ($) | |
Net (loss) gain as a result of significant movements in underlying actuarial assumptions | £ 1,204 | ||||||||
Redemption of paid-in equity includes tax credit | 16 | ||||||||
Share-based payments includes a tax credit | € | € 10 | ||||||||
Main Scheme | |||||||||
Employer contributions | £ 500 | ||||||||
Decrease in equity | 365 | ||||||||
Net (loss) gain as a result of significant movements in underlying actuarial assumptions | 1,165 | ||||||||
Ireland Pension Scheme | |||||||||
Net (loss) gain as a result of significant movements in underlying actuarial assumptions | (192) | € (224) | £ 72 | € 81 | |||||
Paid-in equity | |||||||||
AT1 capital notes called | $ | $ 2,650 | ||||||||
Issue of AT1 capital notes | £ 937 | ||||||||
UK Government Investments Ltd (UKGI) | Main Scheme | |||||||||
Employer contributions | 500 | ||||||||
Decrease in equity | £ 365 | ||||||||
NatWest Group | |||||||||
Number of shares repurchased and cancelled | shares | 310.8 | ||||||||
Total consideration of repurchased and cancelled shares excluding fees | £ 676.2 | ||||||||
Number of shares bought back | shares | 310.8 | ||||||||
NatWest Group | Settlement and cancellation of own shares | |||||||||
Number of shares settled and cancelled | shares | 2.8 | ||||||||
UK Government Investments Ltd (UKGI) | |||||||||
Ordinary shares acquired | shares | 591 | 591 | |||||||
Purchase price per share | £ / shares | £ 1.905 | ||||||||
Value of purchased ordinary shares | £ 1,130 | ||||||||
Number of purchased ordinary shares cancelled | shares | 391 | 391 | |||||||
Share cancellation | £ 744 | ||||||||
Number of own shares held | shares | 200 | 200 | |||||||
Value of own shares held | £ 381 |
Consolidated cash flow statemen
Consolidated cash flow statement - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Cash flows from operating activities | ||||
Operating profit (loss) from continuing operations, before tax | [1] | £ 4,032 | £ (481) | £ 3,983 |
Operating profit before tax from discontinued operations | 279 | 130 | 249 | |
Impairment (releases)/losses | (1,335) | 3,242 | 696 | |
Amortisation of discounts and premiums of other financial assets | 203 | 267 | 255 | |
Depreciation, amortisation and impairment of other assets | 923 | 914 | 1,220 | |
Change in fair value taken to profit or loss of other financial assets | 1,771 | (1,474) | (280) | |
Change in fair value taken to profit or loss on other financial liabilities and subordinated liabilities | (1,083) | 962 | 856 | |
Elimination of foreign exchange differences | 2,446 | (2,497) | 949 | |
Other non-cash items | (164) | (2) | (272) | |
Income receivable on other financial assets | (581) | (518) | (854) | |
(Profit)/loss on sale of other financial assets | (118) | (96) | 22 | |
(Profit)/loss on sale of subsidiaries and associates | (48) | 16 | (2,224) | |
Share of (profit)/loss of associates | (216) | 30 | 14 | |
Loss/(profit) on sale of other assets and net assets/liabiltiies | 23 | (16) | (58) | |
Interest payable on MRELs and subordinated liabilities | 964 | 1,182 | 1,151 | |
Loss on sale of MRELs and subordinated liabilities | 145 | 324 | ||
Charges and releases on provisions | 478 | 296 | 1,243 | |
Defined benefit pension schemes | 215 | 215 | 188 | |
Net cash flow from trading activities | 7,934 | 2,494 | 7,138 | |
Decrease/(increase) in trading assets | 7,751 | 4,147 | (659) | |
Decrease/(increase) in derivative assets | 59,697 | (16,173) | (16,680) | |
Decrease/(increase) in settlement balance assets | 156 | 2,090 | (1,459) | |
(Increase)/decrease in loans to banks | (252) | (554) | 3,563 | |
Decrease/(increase) in loans to customers | 2,721 | (33,748) | (22,642) | |
(Increase)/decrease in other financial assets | (128) | 221 | 924 | |
(Increase)/decrease in other assets | (57) | 8 | 707 | |
Increase in assets of disposal groups | (9,015) | |||
Increase/(decrease) in banks deposits | 5,673 | 113 | (2,804) | |
Increase/(decrease) in customer deposits | 48,071 | 62,492 | 8,333 | |
(Decrease)/increase in settlement balance liabilities | (350) | (1,652) | 1,003 | |
(Decrease)/increase in trading liabilities | (7,658) | (1,693) | 1,599 | |
(Decrease)/increase in derivative liabilities | (59,870) | 13,826 | 17,982 | |
Increase/(decrease) in other financial liabilities | 938 | (1,085) | 2,871 | |
Increase/(decrease) in notes in circulation | 392 | 546 | (43) | |
Decrease in other liabilities | (1,463) | (1,723) | (2,634) | |
Changes in operating assets and liabilities | 46,606 | 26,815 | (9,939) | |
Income taxes paid | (856) | (214) | (278) | |
Net cash flows from operating activities | [2] | 53,684 | 29,095 | (3,079) |
Cash flows from investing activities | ||||
Sale and maturity of other financial assets | 16,859 | 25,952 | 19,990 | |
Purchase of other financial assets | (10,150) | (18,825) | (21,345) | |
Income received on other financial assets | 581 | 518 | 854 | |
Net movement in business interests and intangible assets | (3,489) | (70) | (84) | |
Sale of property, plant and equipment | 165 | 348 | 428 | |
Purchase of property, plant and equipment | (901) | (376) | (559) | |
Net cash flows from investing activities | 3,065 | 7,547 | (716) | |
Cash flows from financing activities | ||||
Movement in MRELs | 2,736 | 636 | 1,927 | |
Movement in subordinated liabilities | (3,452) | (2,381) | (1,064) | |
Ordinary shares issued | 17 | |||
Share cancellation | (1,806) | (2) | (21) | |
Dividends paid | (1,016) | (381) | (3,429) | |
Issue of paid-in equity | 937 | 2,218 | ||
Net cash flows from financing activities | (2,601) | 90 | (2,570) | |
Effects of exchange rate changes on cash and cash equivalents | (2,641) | 1,879 | (1,983) | |
Net increase/(decrease) in cash and cash equivalents | 51,507 | 38,611 | (8,348) | |
Cash and cash equivalents at 1 January | 139,199 | 100,588 | 108,936 | |
Cash and cash equivalents at 31 December | £ 190,706 | £ 139,199 | £ 100,588 | |
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. | |||
[2] | Includes interest received of £9,696 million (2020 - £10,007 million, 2019 - £11,245 million) and interest paid of £1,668 million (2020 - £2,414 million, 2019 - £3,318 million). |
Consolidated cash flow statem_2
Consolidated cash flow statement (Parenthetical) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Condensed consolidated cash flow statement | |||
Interest received | £ 9,696 | £ 10,007 | £ 11,245 |
Interest paid | £ 1,668 | £ 2,414 | £ 3,318 |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting policies | |
Accounting policies | This section includes the basis of preparation of the financial statements and the significant accounting policies used to prepare the financial statements. Our accounting policies are the specific principles, bases, conventions, rules, and practices we apply in preparing and presenting the financial statements. Further information is provided where judgment and estimation is applied to critical accounting policies and key sources of estimation uncertainty. Future accounting developments details new or amendments to existing accounting standards, when they are effective from and where the NatWest Group is assessing their impact on future financial statements. 1. Presentation of financial statements NatWest Group plc is incorporated in the UK and registered in Scotland. The financial statements are presented in the functional currency, pounds sterling. NatWest Group plc’s consolidated financial statements incorporate the results of NatWest Group plc and the entities it controls. Control arises when NatWest Group plc has 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 financial statements are prepared under consistent accounting policies. Transactions and balances between Group companies are eliminated in the consolidated financial statements to show only those transactions and balances external to the NatWest Group. The audited financial statements are set out on pages 29 to 110 and the audited sections of Risk and capital management on pages 172 to 269 of the NatWest Group 2021 Annual Report and Form 20-F Information included as Exhibit 15.2 to this Form 20-F, form an integral part of these financial statements. The directors have prepared the financial 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 financial statements are approved (see the Report of the directors, page 168 of the NatWest Group 2021 Annual Report and Form 20-F Information included as Exhibit 15.2 to this Form 20-F) and in accordance with UK adopted International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union. The significant accounting policies and related judgments are set out below. Except for certain financial instruments as described in Accounting policies 10 and 15 and investment property, the financial statements are presented on a historical cost basis. Accounting policy changes effective 1 January 2021. The IASB amended IFRS 16 Leases with “COVID-19 amendments on lease modifications – Amendments to IFRS 16 – Leases (IFRS 16)”. The effect of the amendment on NatWest Group’s financial statements is immaterial. 2. Revenue recognition Interest income and expense are recognised in the income statement using the effective interest rate method for: all financial instruments measured at amortised cost, debt instruments measured as 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. Negative interest on financial assets is presented in interest payable and negative interest on financial liabilities is presented in interest receivable. Other interest relating to financial 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 fixed and always determinable. 3. Discontinued operations, Held for sale and Disposal group The results of discontinued operations (comprising the post-tax profit or loss of discontinued operations and the post-tax results of either the ongoing measurement at fair value less costs to sell or disposal of the discontinued operation) are excluded from the results of continuing operations and are presented as a single amount as profit/(loss) from discontinued operations, net of tax in the income statement. Comparatives are represented for the income statement, cash flow statement, statement of changes in equity and related notes. An asset or disposal group (assets and liabilities) is classified as held for sale if NatWest Group will recover its carrying amount principally through a sale transaction rather than through continuing use. These are measured at the lower of its carrying amount or fair value less cost to sell unless scoped out of IFRS 5 in which case the existing measurement provisions of IFRS apply. These are presented as single amounts, comparatives are not represented. 4. Staff costs Employee costs, such as salaries, paid absences, and other benefits are recognised over the period in which the employees provide the related services to NatWest Group. Employees may receive variable compensation in cash, in deferred cash or debt instruments of NatWest Group or in ordinary shares of NatWest Group plc. NatWest Group operates a number of share-based compensation schemes under which it grants awards of NatWest Group plc shares and share options to its 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 and forfeiture criteria with a corresponding increase in equity. The fair value of the instruments granted is based on market prices at the grant date. Defined contribution pension scheme A scheme where NatWest Group pays fixed contributions and there is no legal or constructive obligation to pay further contributions or benefits. Contributions are recognised in the income statement as employee service costs accrue. Defined benefit pension scheme A scheme that defines the benefit 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 defined benefit 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 defined benefit asset or liability) is recognised in operating expenses. Actuarial gains and losses (i.e. gains and/or losses on re-measuring the net defined benefit 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 defined benefit asset or liability, is recognised on the balance sheet if the criteria of the asset ceiling test are met. This requires the net defined benefit surplus to be limited to the present value of any economic benefits available to NatWest Group in the form of refunds from the plan or reduced contributions to it. NatWest Group will recognise a liability where a minimum funding requirement exists for any of its defined benefit pension schemes. This reflects agreed minimum funding and the availability of a net surplus as determined as described above. When estimating the liability for minimum funding requirements NatWest Group plc only include contributions that are substantively or contractually agreed and do not include discretionary features, including dividend-linked contributions 5. Intangible assets and goodwill Intangible assets are identifiable non-monetary assets without physical substance acquired by NatWest Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is a method to spread the cost of such assets over time to the income statement. This is charged to the income statement over the assets' estimated useful economic lives using methods that best reflect the pattern of economic benefits. The estimated useful economic lives are: Computer software 3 to 12 years Other acquired intangibles 5 to 10 years Expenditure on internally generated goodwill and brands is charged to the income statement as incurred. 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 benefits 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 benefits beyond one year 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’s net assets over the net fair value of the subsidiary’s identifiable 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 when such transactions occur. 6. Impairment of non-financial assets At each balance sheet date, NatWest Group assesses whether there is any indication that its intangible assets or property, plant and equipment are impaired. If any such indication exists, NatWest Group estimates the recoverable amount of the asset and compares it to its balance sheet value to calculate if an impairment loss should be charged to the income statement. The balance sheet value of the asset is reduced by the amount of the impairment loss. A reversal of an impairment loss on 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. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Impairment losses on goodwill are not reversed The recoverable amount of an asset that does not generate cash flows 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 identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to NatWest Group’s cash-generating units or groups of cash-generating units expected to benefit 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 flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been considered in estimating future cash flows. 7. 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 flow 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 financial assets classified 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 reclassified from equity to the income statement on disposal of a foreign operation. 8. Provisions and contingent liabilities NatWest Group recognises a provision for a present obligation resulting from a past event when it is more likely than not that it 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 NatWest Group has a constructive obligation. An obligation exists when NatWest Group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected either by starting to implement the plan or by announcing its main features. NatWest Group recognises any onerous cost of the present obligation under a contract as a provision. An onerous cost is the unavoidable cost of meeting its contractual obligations that exceed the expected economic benefits. When NatWest Group intends 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, such as rates. Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by uncertain future events, or present obligations arising from past events that are not recognised because either an outflow of economic benefits is not probable, or the amount of the obligation cannot be reliably measured. Contingent liabilities are not recognised but information about them is disclosed unless the possibility of any outflow of economic benefits in settlement is remote. 9. 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 financial instruments classified as equity are recognised in the income statement in line with IAS 12. Current tax is tax payable or recoverable in respect of the taxable profit or loss for the year arising in the income statement, other comprehensive income or equity. Provision is made for current tax at rates enacted, or substantively enacted, at the balance sheet date. Deferred tax is the 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. 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 not recognised on temporary differences that arise from initial recognition of an asset or a liability in a transaction (other than a business combination) that at the time of the transaction affects neither accounting nor taxable profit or loss. 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 assets and liabilities are offset where NatWest Group has a legally enforceable right to offset and where they relate to income taxes levied by the same taxation authority either on an individual NatWest Group company or on NatWest Group companies in the same tax group that intend, in future periods, to settle current tax liabilities and assets on a net basis or on a gross basis simultaneously. Accounting for taxes is judgmental and carries a degree of uncertainty because tax law is subject to interpretation, which might be questioned by the relevant tax authority. NatWest Group recognises the most likely current and deferred tax liability or asset, assessed for uncertainty using consistent judgments 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. 10. Financial instruments Financial instruments are measured at fair value on initial recognition on the balance sheet. Monetary financial assets are classified into one of the following subsequent measurement categories (subject to business model assessment and review of contractual cash flow for the purposes of sole payments of principal and interest where applicable): - amortised cost measured at cost using the effective interest rate method, less any impairment allowance; - 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; - mandatory fair value through profit or loss (MFVTPL) measured at fair value and changes in fair value reported in the income statement; or - designated at fair value through profit or loss (DFV) measured at fair value and changes in fair value reported in the income statement. Classification by business model reflects how NatWest Group manages its financial assets to generate cash flows. A business model assessment helps to ascertain the measurement approach depending on whether cash flows result from holding financial assets to collect the contractual cash flows, from selling those financial assets, or both. Business model assessment of assets is made at portfolio level, being the level at which they are managed to achieve a predefined business objective. This is expected to result in the most consistent classification of assets because it aligns with the stated objectives for the portfolio, its risk management, manager’s remuneration and the ability to monitor sales of assets from a portfolio. The contractual terms of a financial asset; any leverage features; prepayment and extension terms; and triggers that might reset the effective rate of interest; are considered in determining whether cash flows are solely payments of principal and interest. Certain financial assets may be designated at fair value through profit or loss (DFV) upon initial recognition if such designation eliminates, or significantly reduces, accounting mismatch. Equity shares are measured at fair value through profit or loss unless specifically 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 non-monetary assets (equity shares) the cumulative gains or losses are transferred directly to retained earnings. Regular way purchases of financial assets classified as amortised cost are recognised on the settlement date; all other regular way transactions in financial assets are recognised on the trade date. Financial liabilities are classified into one of following measurement categories: - amortised cost measured at cost using the effective interest rate method; - held for trading measured at fair value and changes in fair value reported in income statement; or - designated at fair value through profit 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. 11. Impairment: expected credit losses (ECL) At each balance sheet date each financial asset or portfolio of financial assets measured at amortised cost or at fair value through other comprehensive income, issued financial guarantee and loan commitment (other than those classified 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 significant increase in credit risk rating, otherwise allowances are based on lifetime expected losses. ECL are a probability-weighted estimate of credit losses. The probability is determined by the risk of default which is applied to the cash flow 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 flows. Following a significant increase in credit risk, ECL are adjusted from 12 months to lifetime. This will lead to a higher impairment charge. Judgment is exercised as follows: - Models – in certain low default portfolios, Basel parameter estimates are also applied for IFRS 9. - Non-modelled portfolios , mainly in Private Banking, RBSI and Lombard, use a standardised capital requirement under Basel II. Under IFRS 9, they have bespoke treatments for the identification of significant increase in credit risk. Benchmark PDs, EADs and LGDs are reviewed annually for appropriateness. The ECL calculation is based on expected future cash flows, which is typically applied at a portfolio level. - Multiple economic scenarios (MES) – 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. - Significant increase in credit risk – IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased significantly 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 financial asset is not derecognised, the revised cash flows are used in re-estimating the credit loss. Where restructuring causes derecognition of the original financial asset, the fair value of the replacement asset is used as the closing cash flow 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 NatWest Group’s acquired interest is in equity shares, relevant policies for control, associates and joint ventures apply. Impaired financial assets are written off and therefore derecognised from the balance sheet when NatWest Group concludes that there is no longer any realistic prospect of recovery of part, or all, of the loan. For financial assets that are individually assessed for impairment, the timing of the write-off is determined on a case-by-case basis. Such financial assets are reviewed regularly and write-off will be prompted by bankruptcy, insolvency, re-negotiation, and similar events. The typical time frames from initial impairment to write-off for NatWest Group’s collectively assessed portfolios are: - Retail mortgages: write-off usually occurs within five years , or earlier, when an account is closed, but can be longer where the customer engages constructively; - 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; - Overdrafts and other unsecured loans: write-off occurs within six years ; - Commercial loans: write-offs are determined in the light of individual circumstances; and Business loans are generally written off within five years . 12. Derecognition A financial asset is derecognised (removed from the balance sheet) when the contractual right to receive cash flows from the asset has expired or when it has been transferred and the transfer qualifies for derecognition. Conversely, an asset is not derecognised in a contract under which NatWest Group retains substantially all the risks and rewards of ownership. A financial liability is removed from the balance sheet when the obligation is paid, or is cancelled, or expires. Cancellation includes the issuance of a substitute instrument on substantially different terms. 13. Netting Financial assets and financial liabilities are offset, and the net amount presented on the balance sheet when, and only when, NatWest Group currently has a legally enforceable right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. NatWest Group is party to a number of arrangements, including master netting agreements, that give it the right to offset financial assets and financial liabilities, but where it does not intend to settle the amounts net or simultaneously, the assets and liabilities concerned are presented separately on the balance sheet. 14. Capital instruments NatWest Group classifies a financial instrument that it issues as a liability if it is a contractual obligation to deliver cash or another financial asset, or to exchange financial assets or financial liabilities on potentially unfavourable terms and as equity if it evidences a residual interest in the assets of NatWest Group 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 NatWest Group (known as treasury shares or own shares held) is deducted from equity. On the cancellation of treasury shares their nominal value is removed from equity and any excess of consideration over nominal value is treated in accordance with the capital maintenance provisions of 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. 15. Derivatives and hedging Derivatives are reported on the balance sheet at fair value. NatWest Group uses derivatives as part of its trading activities, to manage its 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 the income statement in Income from trading activities except for gains and losses on those derivatives that are managed together with financial instruments designated at fair value; these gains and losses are included in Other operating income. Hedge accounting NatWest Group enters into three types of hedge accounting relationships (see later)). Hedge accounting relationships are designated and documented at inception in line with the requirements of IAS 39 Financial instruments – Recognition and Measurement. The documentation identifies 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. Fair value hedge Cash flow hedge Hedge of net investment in a foreign operation 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 flows 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 hedge item is no longer on the balance sheet the adjustment to the hedged item is reported in the income statement. For cash flow hedging the cumulative unrealised gain or loss is reclassified from equity to the income statement when the hedged cash flows occur or, if the forecast transaction results in the recognition of a financial asset or financial liability, when the hedged forecast cash flows affect the income statement. Where a forecast transaction is no longer expected to occur, the cumulative unrealised gain or loss is reclassified 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 reclassified from equity to the income statement. 16. Investment in Group undertakings NatWest Group plc’s investments in its Group undertakings (subsidiaries) are stated at cost less any impairment. Critical accounting policies and key sources of estimation uncertainty The reported results of NatWest Group are sensitive to the accounting policies, assumptions and estimates that underlie the preparation of the financial statements. The accounting standards used in the preparation of the financial statements (see presentation of financial statements above) require the directors, in preparing NatWest Group's financial statements, to select suitable accounting policies, apply them consistently and make judgments and estimates that are reasonable and prudent. In the absence of accounting guidance, standards used in the preparation of the financial statements require the directors to develop and apply an accounting policy that results in relevant and reliable information in the light of the requirements and guidance in IFRS dealing with similar and related issues and the IASB's ’Conceptual Framework for Financial Reporting’. The judgments and assumptions involved in NatWest Group's accounting policies that are considered by the Board to be the most important to the portrayal of its financial condition are noted below. The use of estimates, assumptions or models that differ from those adopted by NatWest Group would affect its reported results. Estimation uncertainty continues to be affected by the COVID-19 pandemic. The COVID-19 pandemic continued to cause significant economic and social disruption during 2021. Key financial estimates are based on management's latest five-year revenue and cost forecasts. Measurement of goodwill, deferred tax and expected credit losses are highly sensitive to reasonably possible changes in those anticipated conditions. Other reasonably possible assumptions about the future include a prolonged financial effect of the COVID-19 pandemic on the economy of the UK and other countries or greater economic effect as countries and companies implement plans to counter climate risks. How Climate risk affects our accounting judgments and estimates NatWest Group makes use of reasonable and supportable information to make accounting judgments 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. It also includes the effect on NatWest Group’s competitiveness and profitability. 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 judgments and estimates for the current period. Some physical and transition risks can |
Net interest income
Net interest income | 12 Months Ended |
Dec. 31, 2021 | |
Net interest income | |
Net interest income | 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 financial assets, and the interest paid on its interest-bearing liabilities, such as deposits and subordinated liabilities. Interest receivable on financial instruments classified as amortised cost, debt instruments classified as FVOCI and the interest element of the effective portion of any designated hedging relationships are measured using the effective interest rate, which allocates the interest receivable or interest payable over the expected life of the financial instrument at the rate that exactly discounts all estimated future cash flows to equal the financial 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 financial instrument’s yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows. Negative interest on financial assets is presented in interest payable and negative interest on financial liabilities is presented in interest receivable. Included in interest receivable is finance lease income which is recognised at a constant periodic rate of return before tax on the net investment. For accounting policy information see Accounting policies note 2. 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Balances at central banks 99 90 321 Loans to banks - amortised cost 346 246 405 Loans to customers - amortised cost 8,615 8,979 9,547 Other financial assets 253 483 854 Interest receivable 9,313 9,798 11,127 Balances with banks 204 144 319 Customer deposits 556 911 1,256 Other financial liabilities 670 846 1,102 Subordinated liabilities 267 402 483 Internal funding of trading businesses 2 19 168 Interest payable 1,699 2,322 3,328 Net interest income 7,614 7,476 7,799 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. |
Non-interest income
Non-interest income | 12 Months Ended |
Dec. 31, 2021 | |
Non-interest income | |
Non-interest income | 2 Non-interest income There are three main categories of non-interest income: net fees and commissions, income from trading activities, 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, mortgage arrangement fees, underwriting fees, payment services, brokerage fees, trade finance, investment management fees, trustee and fiduciary services, and fees incurred in the provision of those services, such as credit card interchange fees, customer incentives, loan administration, foreign currency transaction charges, brokerage fees, and mortgage valuation reports. Income from trading activities is earned from short-term financial assets and financial 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 profit or loss from associate, operating lease income, the profit or loss on the sale of a subsidiary or property, plant and equipment, profit or loss on own debt, and changes in the fair value of financial assets and liabilities designated at fair value through profit or loss. For accounting policy information see Accounting policies note 2. 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Net fees and commissions (2) 2,124 2,000 2,497 Income from trading activities Foreign exchange 364 569 448 Interest rate (130) 541 532 Credit 83 3 32 Changes in fair value of own debt and derivative liabilities attributable to own credit risk - debt securities in issue 6 (24) (60) - derivative liabilities — — (20) Equities, commodities and other — 36 — 323 1,125 932 Other operating income Loss on redemption of own debt (145) (324) — Operating lease and other rental income 225 232 250 Changes in fair value of financial assets and liabilities designated at fair value (8) (54) (17) through profit or loss (3) Changes in fair value of other financial assets at fair value through profit or loss (4) 5 2 58 Hedge ineffectiveness 25 24 48 (Loss)/profit on disposal of amortised cost assets (15) (18) 42 Profit/(loss) on disposal of fair value through other comprehensive income assets 117 96 (22) (Loss)/profit on sale of property, plant and equipment (5) (30) 13 58 Share of profits/ (losses)of associated entities 216 (30) (14) Profit/(loss) on disposal of subsidiaries and associates (6) 48 (16) 2,224 Other income (7,8) 13 (18) 132 451 (93) 2,759 2,898 3,032 6,188 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) Refer to Note 4 for further analysis. (3) Including related derivatives. (4) Includes instruments that have failed Solely payments of principal and interest testing under IFRS 9. (5) Includes £44 million loss on the purchase of freeholds for properties where the Group was the primary leaseholder. (6) 2019 includes a gain of £444 million( €523 million), a legacy liability release of £256 million and an FX recycling gain of £290 million on completion of the Alawwal bank merger in June 2019; In 2019, £1,102 million of FX recycling gains arising on the liquidation of RFS Holdings BV and £67 million in relation to a capital repayment by UBIDAC. The recycling gains and capital repayment have been calculated using the step-by-step method in IFRIC 16 and by reference to the proportion of equity applied to the FX translation reserve. (7) Includes income from activities other than banking. (8) 2020 includes £58 million loss on acquisition of a £3.0 billion prime UK mortgages portfolio from Metro Bank plc. |
Operating expenses
Operating expenses | 12 Months Ended |
Dec. 31, 2021 | |
Operating expenses | |
Operating expenses | 3 Operating expenses Operating expenses are expenses NatWest Group incurs for operation of the business such as salaries, bonus awards, pension costs, depreciation and other administrative expenses. Operating expenses are expenses NatWest Group incurs in the running of the business such as all personnel expenditure (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 see Accounting policies note 4. 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Salaries 2,295 2,494 2,477 Bonus awards 267 232 299 Temporary and contract costs 240 258 401 Social security costs 300 316 296 Pension costs 354 340 301 - defined benefit schemes (see Note 5) 215 215 188 - defined contribution schemes 139 125 113 Other 220 238 202 Staff costs 3,676 3,878 3,976 Premises and equipment (2) 1,133 1,222 1,258 UK bank levy (3) 99 167 134 Depreciation and amortisation (4,5) 923 913 1,218 Other administrative expenses (6) 1,927 1,678 2,694 Administrative expenses 4,082 3,980 5,304 7,758 7,858 9,280 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) 2021 includes cost of £33 million including accelerated depreciation of £41 million (2020 - £144 million including £71 million accelerated depreciation; 2019 - £161 million including £40 million accelerated depreciation) in relation to the planned reduction of the property portfolio (2021 – freehold £3 million; leasehold £30 million; 2020 - freehold £1 million; leasehold £143 million; 2019 - freehold £4 million; leasehold £157 million). (3) 2019 includes a rebate of £31 million relating to prior periods. (4) 2021 includes a £58 million charge relating to the reduction in property portfolio, leasehold £48 million and freehold £10 million (2020 - £107 million charge, leasehold £86 million and freehold £21 million; 2019 - £287 million charge, leasehold £37 million and freehold £250 million). (5) Includes impairment of goodwill of £85 million. (6) Includes litigation and conduct costs, net of amounts recovered. Refer to Notes 21 and 27 for further details. The average number of persons employed, rounded to the nearest hundred, during the year, excluding temporary staff,was 59,200 (2020 - 61,400;2019 - 64,200). The average number of temporary employees during 2021 was 2,500 (2020 - 3,200;2019 - 4,100). The number of persons employed at 31 December, excluding temporary staff, by reportable segment, was as follows: Continuing operations 2021 2020 2019 Retail Banking 15,800 17,200 19,600 Private Banking 1,900 1,900 1,700 Commercial Banking 8,400 9,700 9,700 RBS International 1,400 1,500 1,600 NatWest Markets 1,600 2,100 5,000 Central items & other 27,000 24,900 22,600 Ulster Bank RoI (1) 1,700 1,900 2,000 Total 57,800 59,200 62,200 UK 40,600 42,500 44,600 USA 300 300 400 India 13,500 13,200 13,500 Poland 1,400 1,200 1,300 Republic of Ireland 1,200 1,400 1,500 Rest of the World 800 600 900 Total 57,800 59,200 62,200 (1) Total number of persons employed in Ulster Bank RoI of 2,400 (2020 – 2,600 ; 2019 – 2,700 ) includes 700 people employed in discontinued operations at 31 December 2021 (2020 – 700 ; 2019 – 700 ). 3 Operating expenses continued Share-based payments As described in the Remuneration report, NatWest Group grants share-based awards to employees principally on the following bases: Award plan Eligible employees Nature of award Vesting conditions (1) Settlement Sharesave UK, Channel Islands, Gibraltar, Isle of Man, Poland and India. Option to buy shares under employee savings plan Continuing employment or leavers in certain circumstances 2022 to 2026 Deferred performance awards All Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances 2022 to 2028 Long-term incentives (2) Senior employees Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances and/or satisfaction of the pre-vest assessment and underpins 2022 to 2028 (1) All awards have vesting conditions which may not be met. (2) Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment. All awards are granted under the Employee Share Plan. The fair value of Sharesave options granted in 2021 was determined using a pricing model that included: expected volatility of shares determined at the grant date based on historical volatility over a period of up to five years; expected option lives that equal the vesting period; expected dividends 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 five 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 defined on pages 142 of the NatWest Group 2021 Annual Report and Form 20-F Information included as Exhibit 15.2 to this Form 20-F) are used. The fair value of the award is recognised as services are provided over the vesting period. Sharesave 2021 2020 2019 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January 1.64 96 2.01 84 2.18 75 Granted 1.80 24 1.12 35 1.78 25 Exercised 1.76 (10) 1.83 — 2.83 (4) Cancelled 2.02 (15) 2.20 (23) 2.25 (12) At 31 December 1.61 95 1.64 96 2.01 84 Options are exercisable within six months of vesting; 6.0 million options were exercisable at 31 December 2021 ( 2020 - 6.3 million; 2019 - 3.2 million). The weighted average share price at the date of exercise of options was £2.19 (2020 - £1.57; 2019 - £2.49). At 31 December 2021, exercise prices ranged from £1.12 to £2.27 (2020 - £1.12 to £ 2.27; 2019 - £1.68 to £2.91) and the remaining average contractual life was 2.1 years (2020 - 2.3 years; 2019 - 2.7 years ). The fair value of options granted in 2021 was £ 17 million (2020 - £8 million; 2019 - £11 million). Deferred performance awards 2021 2020 2019 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 169 77 196 76 233 92 Granted 61 32 109 67 110 42 Forfeited (10) (5) (5) (2) (10) (4) Vested (88) (39) (131) (64) (137) (54) At 31 December 132 65 169 77 196 76 The awards granted in 2021 vest in equal tranches on their anniversaries, predominantly over three years. Long-term incentives 2021 2020 2019 Value at Shares Options Value at Shares Options Value at Shares Options grant awarded over shares grant awarded over shares grant awarded over shares £m (million) (million) £m (million) (million) £m (million) (million) At 1 January 50 24 — 63 25 — 85 32 2 Granted 6 3 — 14 10 — 15 6 — Vested/exercised (12) (6) — (17) (7) — (12) (4) — Lapsed — — — (10) (4) — (25) (9) (2) At 31 December 44 21 — 50 24 — 63 25 — The market value of awards vested/exercised in 2021 was £13 million (2020 - £ 13 million; 2019- £10 million). There are no vested options of shares exercisable up to 2022 (2020 - nil; 2019 - nil). 3 Operating expenses continued Bonus awards The following tables analyse NatWest Group’s bonus awards for 2021. 2021 2020 Change £m £m % Non-deferred cash awards (1) 38 35 9 % Deferred cash awards 214 111 93 % Deferred share awards 49 60 (18) % Total deferred bonus awards 263 171 54 % Total bonus awards (2) 301 206 46 % Bonus awards as a % of operating profit before tax (3) 7 % (83) % Proportion of bonus awards that are deferred 87 % 83 % of which - deferred cash awards 81 % 65 % - deferred share awards 19 % 35 % 2021 2020 2019 Reconciliation of bonus awards to income statement charge £m £m £m Bonus awarded 301 206 307 Less: deferral of charge for amounts awarded for current year (99) (77) (110) Income statement charge for amounts awarded in current year 202 129 197 Add: current year charge for amounts deferred from prior years 80 114 127 Less: forfeiture of amounts deferred from prior years (15) (11) (25) Income statement charge for amounts deferred from prior years 65 103 102 Income statement charge for bonus awards 267 232 299 (1) Non-deferred cash awards are limited to £2,000 for all employees. (2) Excludes other performance related compensation. (3) Operating profit before tax and bonus expense. Actual Expected 2023 2019 2020 2021 2022 and beyond Year in which income statement charge is expected to be taken for deferred bonus awards £m £m £m £m £m Bonus awards deferred from 2019 and earlier 127 114 28 11 6 Bonus awards deferred from 2020 — — 52 8 7 Less: forfeiture of amounts deferred from prior years (25) (11) (15) — — Bonus awards for 2021 deferred — — — 86 13 102 103 65 105 26 |
Segmental analysis
Segmental analysis | 12 Months Ended |
Dec. 31, 2021 | |
Segmental analysis | |
Segmental analysis | 4 Segmental analysis NatWest Group analyses its performance between the different operating segments of the Group. Ulster Bank RoI is presented separately from the Go-forward group (refer to the split below) to reflect the strategic decision on the phased withdrawal from the Republic of Ireland announced in February 2021. This is consistent with internal financial reporting and how senior management assesses the performance of each operating segment. The directors manage NatWest Group primarily by class of business and present the segmental analysis on that basis. This includes the review of net interest income for each class of business. Interest receivable and payable for all reportable segments is therefore presented net. Segments charge market prices for services rendered between each other; funding charges between segments are determined by NatWest Group Treasury, having regard to commercial demands. The segment performance measure is operating profit/(loss). Reportable operating segments: The reportable operating segments are as follows: Retail Banking Private Banking Commercial Banking RBS International (RBSI) NatWest Markets (NWM) Central items & other Ulster Bank RoI Allocation of central balance sheet items NatWest Group allocates all central costs relating to Services and 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. Go-forward group Total Central excluding Retail Private Commercial RBS NatWest items Ulster Ulster Banking Banking Banking International Markets & other Bank RoI Bank RoI Total 2021 £m £m £m £m £m £m £m £m £m Continuing operations Net interest income 4,074 480 2,582 383 9 (14) 7,514 100 7,614 Net fees and commissions 377 258 1,158 124 158 (16) 2,059 65 2,124 Other non-interest income (6) 78 135 41 248 215 711 63 774 Total income 4,445 816 3,875 548 415 185 10,284 228 10,512 Depreciation and amortisation (85) — (146) (13) (14) (665) (923) — (923) Other operating expenses (2,428) (520) (2,208) (229) (1,147) 179 (6,353) (482) (6,835) Impairment releases 36 54 1,073 52 35 — 1,250 28 1,278 Operating profit/(loss) 1,968 350 2,594 358 (711) (301) 4,258 (226) 4,032 4 Segmental analysis continued Go-forward group Total excluding Retail Private Commercial RBS NatWest Central items Ulster Ulster Banking Banking Banking International Markets & other (1) Bank RoI Bank RoI Total 2020 (2) £m £m £m £m £m £m £m £m £m Continuing operations Net interest income 3,868 489 2,740 371 (57) (57) 7,354 122 7,476 Net fees and commissions 379 257 1,110 94 99 (16) 1,923 77 2,000 Other non-interest income (66) 17 108 32 1,081 (163) 1,009 23 1,032 Total income 4,181 763 3,958 497 1,123 (236) 10,286 222 10,508 Depreciation and amortisation — (8) (149) (17) (16) (723) (913) — (913) Other operating expenses (2,540) (447) (2,281) (274) (1,294) 332 (6,504) (441) (6,945) Impairment losses (792) (100) (1,927) (107) (40) (26) (2,992) (139) (3,131) Operating profit/(loss) 849 208 (399) 99 (227) (653) (123) (358) (481) 2019 (2) Continuing operations Net interest income 4,130 521 2,842 478 (188) (136) 7,647 152 7,799 Net fees and commissions 696 226 1,312 106 85 (23) 2,402 95 2,497 Other non-interest income 40 30 164 26 1,445 1,932 3,637 54 3,691 Total income 4,866 777 4,318 610 1,342 1,773 13,686 301 13,987 Depreciation and amortisation — (4) (142) (10) (12) (1,050) (1,218) — (1,218) Operating expenses (3,618) (482) (2,458) (254) (1,406) 666 (7,552) (510) (8,062) Impairment losses (393) 6 (391) (2) 51 (1) (730) 6 (724) Operating profit/(loss) 855 297 1,327 344 (25) 1,388 4,186 (203) 3,983 (1) 2019 predominantly related to strategic disposals in Functions. (2) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. Total revenue (2) Go-forward group Total Central excluding Ulster Retail Private Commercial RBS NatWest items & Ulster Bank Banking Banking Banking International Markets Other Bank RoI RoI Total Year ended 31 December 2021 £m £m £m £m £m £m £m £m £m Continuing operations External 5,419 792 3,751 594 823 1,109 12,488 297 12,785 Inter-segmental 14 127 87 6 30 (265) (1) 1 — Total 5,433 919 3,838 600 853 844 12,487 298 12,785 Year ended 31 December 2020 (1) Continuing operations External 5,386 702 3,734 505 1,984 961 13,272 280 13,552 Inter-segmental 39 163 64 3 13 (284) (2) 2 — Total 5,425 865 3,798 508 1,997 677 13,270 282 13,552 Year ended 31 December 2019 (1) Continuing operations External 6,161 703 4,347 639 2,516 3,447 17,813 350 18,163 Inter-segmental 62 241 139 19 558 (1,025) (6) 6 — Total 6,223 944 4,486 658 3,074 2,422 17,807 356 18,163 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income. 4 Segmental analysis continued Total income Go-forward group Total Central excluding Ulster Retail Private Commercial RBS NatWest items & Ulster Bank Banking Banking Banking International Markets Other Bank RoI RoI Total Year ended 31 December 2021 £m £m £m £m £m £m £m £m £m Continuing operations External 4,433 801 3,939 548 554 — 10,275 237 10,512 Inter-segmental 12 15 (64) — (139) 185 9 (9) — Total 4,445 816 3,875 548 415 185 10,284 228 10,512 Year ended 31 December 2020 (1) Continuing operations External 4,157 700 4,065 500 1,395 (537) 10,280 228 10,508 Inter-segmental 24 63 (107) (3) (272) 301 6 (6) — Total 4,181 763 3,958 497 1,123 (236) 10,286 222 10,508 Year ended 31 December 2019 (1) Continuing operations External 4,834 631 4,814 603 1,664 1,145 13,691 296 13,987 Inter-segmental 32 146 (496) 7 (322) 628 (5) 5 — Total 4,866 777 4,318 610 1,342 1,773 13,686 301 13,987 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. 4 Segmental analysis continued Go-forward group Total Central excluding Retail Private Commercial RBS NatWest items Ulster Ulster Analysis of net fees and commissions Banking Banking Banking International Markets & other Bank RoI Bank RoI Total 2021 £m £m £m £m £m £m £m £m £m Continuing operations Fees and commissions receivable - Payment services 306 35 538 19 20 — 918 53 971 - Credit and debit card fees 344 10 147 2 — — 503 19 522 - Lending and financing 13 10 515 54 74 — 666 4 670 - Brokerage 48 6 — 1 41 — 96 — 96 - Investment management, trustee and fiduciary services (1) 3 230 — 45 — — 278 2 280 - Underwriting fees — — — — 127 — 127 — 127 - Other — 35 105 4 — (112) 32 — 32 Total 714 326 1,305 125 262 (112) 2,620 78 2,698 Fees and commissions payable (337) (68) (147) (1) (104) 96 (561) (13) (574) Net fees and commissions 377 258 1,158 124 158 (16) 2,059 65 2,124 2020 (2) Continuing operations Fees and commissions receivable - Payment services 264 28 507 18 18 — 835 57 892 - Credit and debit card fees 299 9 129 2 — — 439 21 460 - Lending and financing 42 7 505 34 86 — 674 4 678 - Brokerage 54 6 — 1 93 — 154 1 155 - Investment management, trustee and fiduciary services (1) 3 225 1 38 2 — 269 2 271 - Underwriting fees — — — — 183 — 183 — 183 - Other 1 26 82 3 4 (33) 83 — 83 Total 663 301 1,224 96 386 (33) 2,637 85 2,722 Fees and commissions payable (284) (44) (114) (2) (287) 17 (714) (8) (722) Net fees and commissions 379 257 1,110 94 99 (16) 1,923 77 2,000 2019 (2) Fees and commissions receivable - Payment services 292 33 659 27 24 — 1,035 60 1,095 - Credit and debit card fees 427 12 154 2 — — 595 28 623 - Lending and financing 356 3 510 36 85 — 990 4 994 - Brokerage 55 5 — — 96 — 156 8 164 - Investment management, trustee and fiduciary services 44 186 3 41 1 — 275 3 278 - Underwriting fees — — — — 170 — 170 — 170 - Other 2 27 90 2 69 (173) 17 4 21 Total 1,176 266 1,416 108 445 (173) 3,238 107 3,345 Fees and commissions payable (480) (40) (104) (2) (360) 150 (836) (12) (848) Net fees and commissions 696 226 1,312 106 85 (23) 2,402 95 2,497 (1) Comparisons with prior periods are impacted by the transfer of the Private Client Advice business to Private Banking from 1 January 2020. (2) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. 2021 2020 2019 Assets Liabilities Assets Liabilities Assets Liabilities £m £m £m £m £m £m Retail Banking 209,973 192,715 197,618 178,617 182,305 153,999 Private Banking 29,854 39,388 26,206 32,457 23,304 28,610 Commercial Banking 184,564 184,890 187,413 174,251 165,399 140,863 RBS International 40,578 38,436 33,984 31,989 31,738 30,330 NatWest Markets 200,576 188,431 270,147 254,098 263,885 246,907 Central items & other 93,614 77,308 57,503 61,262 31,023 57,762 Total excluding Ulster Bank RoI 759,159 721,168 772,871 732,674 697,654 658,471 Ulster Bank RoI 22,833 19,021 26,620 22,993 25,385 21,012 Total 781,992 740,189 799,491 755,667 723,039 679,483 4 Segmental analysis continued Segmental analysis of goodwill There was an £85 million impairment of goodwill in Retail banking during 2021. The total carrying value of goodwill at 31 December was £5,522 million, comprised of Retail Banking £2,607 million; Commercial Banking £2,606 million; Private Banking £9 million; and RBS International £300 million. (2020 – total carrying value was £5,607 million comprising of Retail Banking £2,692 million; Commercial Banking £2,606 million; Private Banking £9 million; and RBS International £300 million). See note 17 for further details. Geographical segments The geographical analysis in the tables below has been compiled on the basis of location of office where the transactions are recorded. UK USA Europe RoW Total 2021 £m £m £m £m £m Continuing operations Total revenue 12,100 87 565 33 12,785 Interest receivable 8,949 20 336 8 9,313 Interest payable (1,483) (2) (211) (3) (1,699) Net fees and commissions 1,820 27 235 42 2,124 Income from trading activities 247 53 (1) 24 323 Other operating income 387 2 62 - 451 Total income 9,920 100 421 71 10,512 Operating profit/(loss) before tax 4,143 48 (199) 40 4,032 Total assets 693,221 21,776 64,415 2,580 781,992 Total liabilities 676,684 23,286 38,835 1,384 740,189 Contingent liabilities and commitments 117,225 1 8,114 27 125,367 2020 (1) Continuing operations Total revenue 12,511 211 656 174 13,552 Interest receivable 9,479 — 297 22 9,798 Interest payable (2,163) — (158) (1) (2,322) Net fees and commissions 1,637 33 233 97 2,000 Income from trading activities 911 170 33 11 1,125 Other operating income (117) (22) 42 4 (93) Total income 9,747 181 447 133 10,508 Operating profit/(loss) before tax (193) (85) (291) 88 (481) Total assets 704,725 25,439 66,884 2,443 799,491 Total liabilities 686,500 26,932 41,018 1,217 755,667 Contingent liabilities and commitments 118,654 — 10,068 10 128,732 2019 (1) Continuing operations Total revenue 16,925 228 882 128 18,163 Interest receivable 10,923 — 169 35 11,127 Interest payable (3,255) — (70) (3) (3,328) Net fees and commissions 2,191 37 197 72 2,497 Income from trading activities 727 148 49 8 932 Other operating income 2,305 13 432 9 2,759 Total income 12,891 198 777 121 13,987 Operating profit/(loss) before tax 3,543 186 172 82 3,983 Total assets 634,642 27,396 57,534 3,467 723,039 Total liabilities 613,151 31,715 33,539 1,078 679,483 Contingent liabilities and commitments 114,422 — 10,571 2 124,995 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. |
Pensions
Pensions | 12 Months Ended |
Dec. 31, 2021 | |
Pensions | |
Pensions | 5 Pensions NatWest Group operates two types of pension scheme: defined benefit and defined contribution. The defined contribution schemes invest contributions in a choice of funds and the accumulated contributions and investment returns are used by the employee to provide benefits on retirement, there is no legal or constructive obligation for NatWest Group to pay any further contributions or benefits. The defined benefit schemes provide pensions in retirement based on employees’ pensionable salary and service. NatWest Group’s balance sheet includes any defined benefit pension scheme surplus or deficit as a retirement benefit asset or liability reported in other assets and other liabilities. The surplus or deficit is the difference between the liabilities to be paid from the defined benefit scheme, and the assets held by the scheme to meet these liabilities. The liabilities are calculated by external actuaries using a number of financial and demographic assumptions. For some NatWest Group defined benefit schemes where there is a net defined benefit surplus which means any surplus in excess of present value of any economic benefits, the application of accounting standards means we don’t recognise that surplus on the balance sheet as the trustees may have control over the use of the surplus. For accounting policy information see Accounting policies note 4. Defined contribution schemes NatWest Group sponsors several defined contribution schemes in different territories, which new employees are entitled to join. NatWest Group pays specific contributions into individual investment funds on employees’ behalf. Once those contributions are paid, there is no further liability on the NatWest Group balance sheet relating to the defined contribution scheme. Defined benefit 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 benefits are paid in accordance with the scheme rules and national law. The trustees are the legal owner of a scheme’s assets, and have a duty to act in the best interests of all scheme members. The schemes generally provide a pension of one 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 comprises four member trustee directors selected from eligible active staff, deferred and pensioner members who apply and six appointed by NatWest Group. Under UK legislation, a defined benefit pension scheme is required to meet the statutory funding objective of having sufficient and appropriate assets to cover its liabilities (the pensions that have been promised to members). Similar governance principles apply to NatWest Group’s other defined benefit pension schemes. Investment strategy The assets of the Main section, which is typical of other group schemes, represent 90% of all plan assets at 31 December 2021 (2020 - 90%) and are invested as shown below. The Main section employs both physical and derivative instruments to achieve a desired asset class exposure and to reduce the section’s interest rate, inflation, 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 inflation are substantially hedged by the Trustee. Major classes of plan assets as a percentage of 2021 2020 total plan assets of the Main section Quoted Unquoted Total Quoted Unquoted Total % % % % % % Equities 3.7 4.7 8.4 3.9 4.6 8.5 Index linked bonds 46.7 — 46.7 49.4 — 49.4 Government bonds 9.8 — 9.8 6.2 — 6.2 Corporate and other bonds 10.7 4.4 15.1 11.8 5.0 16.8 Real estate — 4.4 4.4 — 4.2 4.2 Derivatives — 8.8 8.8 — 10.0 10.0 Cash and other assets — 6.8 6.8 — 4.9 4.9 70.9 29.1 100.0 71.3 28.7 100.0 5 Pensions continued The Main section’s holdings of derivative instruments are summarised in the table below: 2021 2020 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps 20 1,408 796 18 1,390 1,716 Interest rate swaps 172 8,385 4,421 68 11,197 6,215 Currency forwards 12 61 98 11 334 38 Equity and bond call options — 1 — 1 169 1 Equity and bond put options — 1 3 3 1 19 Other 1 9 10 2 63 17 Swaps have been executed at prevailing market rates and within standard market bid/offer spreads with a number of counterparties, including NWB Plc. At 31 December 2021, the gross notional value of the swaps was £192 billion (2020 - £88 billion) and had a net positive fair value of £4,573 million (2020 - £4,706 million) against which the counterparties had posted approximately 95% collateral. The schemes do not invest directly in NatWest Group but can have exposure to NatWest Group. The trustees of the respective UK schemes are responsible for ensuring that indirect investments in NatWest Group do not exceed the regulatory limit of 5% of plan assets. Main section All schemes Present value Asset Net Present value Asset Net Fair of defined ceiling/ pension Fair of defined ceiling/ pension value of benefit minimum (assets)/ value of benefit minimum (assets)/ plan assets obligation funding liability plan assets obligation funding liability Changes in value of net pension (assets)/liability £m £m £m £m £m £m £m £m At 1 January 2020 46,555 39,669 6,886 — 51,925 44,115 7,315 (495) Currency translation and other adjustments — 4 — 4 92 71 — (21) Income statement 936 954 141 159 1,037 1,103 149 215 Statement of comprehensive income 5,486 5,130 426 70 6,027 5,704 319 (4) Contributions by employer 233 — — (233) 296 — — (296) Contributions by plan participants and other scheme members 9 9 — — 14 14 — — Assets/liabilities extinguished upon settlement — — — — (2) (3) — (1) Benefits paid (1,896) (1,896) — — (2,140) (2,140) — — At 1 January 2021 51,323 43,870 7,453 — 57,249 48,864 7,783 (602) Currency translation and other adjustments — — — — (129) (116) (3) 10 Income statement Net interest expense 713 603 105 (5) 795 676 109 (10) Current service cost — 158 — 158 — 213 — 213 Past service cost — 6 — 6 — 12 — 12 713 767 105 159 795 901 109 215 Statement of comprehensive income Return on plan assets excluding recognised interest income 841 — — (841) 872 — — (872) Experience gains and losses — (241) — (241) — (236) — (236) Effect of changes in actuarial financial assumptions — (1,165) — (1,165) — (1,204) — (1,204) Effect of changes in actuarial demographic assumptions — 350 — 350 — 379 — 379 Asset ceiling adjustments — — 2,443 2,443 — — 2,602 2,602 841 (1,056) 2,443 546 872 (1,061) 2,602 669 Contributions by employer 705 — — (705) 780 — — (780) Contributions by plan participants and other scheme members 8 8 — — 13 13 — — Assets/liabilities extinguished upon settlement — — — — — — — — Benefits paid (1,569) (1,569) — — (1,793) (1,793) — — At 31 December 2021 52,021 42,020 10,001 — 57,787 46,808 10,491 (488) (1) Defined benefit obligations are subject to annual valuation by independent actuaries. (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 contributions. This is most relevant to the Main section, where the surplus is not recognised as the trustees may have control 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. (3) NatWest Group expects to make contributions to the Main section of £714 million in 2022. Following the £500 million contribution in March 2021, additional contributions of up to £ 500 million will be paid to the Main section in 2022, should NatWest Group make further distributions in 2022. This leaves one remaining payment of up to £ 500 million to be paid to the Main Section after 2022, in line with the ring-fencing agreement with the Trustee. Such contributions do not constitute a minimum funding requirement as the obligation to pay only arises on the payment of a distribution to shareholders. 5 Pensions continued All schemes 2021 2020 Amounts recognised on the balance sheet £m £m Fund asset at fair value 57,787 57,249 Present value of fund liabilities 46,808 48,864 Funded status 10,979 8,385 Assets ceiling/minimun funding 10,491 7,783 488 602 2021 2020 Net pension assets/(liability) comprises £m £m Net assets of schemes in surplus (included in Other assets, Note 18) 602 723 Net liabilities of schemes in deflicit (included in Other liabilities, Note 21) (114) (121) 488 602 The income statement charge comprises (1) 2021 2020 £m £m Continuing operations 196 195 Discontinued operations 19 20 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. Funding and contributions by NatWest Group In the UK, the trustees of defined benefit pension schemes are required to perform funding valuations every three years. The trustees and the sponsor, with the support of the Scheme Actuary, agree the assumptions used to value the liabilities and to determine future contribution requirements. The funding assumptions incorporate a margin for prudence over and above the expected cost of providing the benefits promised to members, taking into account the sponsor’s covenant and the investment strategy of the scheme. Similar arrangements apply in the other territories where NatWest Group sponsors defined benefit pension schemes. A full triennial funding valuation of the Main section, effective 31 December 2020, was completed during the year. This triennial funding valuation determined the funding level to be 104%, pension liabilities to be £49 billion and the surplus to be £2 billion, all assessed on the agreed funding basis. The average cost of the future service of current members is 49% of salary before contributions from those members. In addition, the sponsor has agreed to meet administrative expenses. Following the ring-fencing agreement with the Trustee reached in 2018, additional contributions of up to £500 million p.a. are payable to the Main section should the Group make distributions to shareholders of an equal amount. These contributions are capped at £1.5 billion in total; £500 million was made in 2021 (2020 – Nil). The key assumptions used to determine the funding liabilities were the discount rate, which is determined based on fixed interest swap and gilt yields plus 0.64% per annum, and mortality assumptions, which result in life expectancies of 27.7 / 29.4 years for males/females who are currently age 60 and 28.9 / 30.7 years from age 60 for males/females who are currently aged 40. The 2020 triennial valuation of the Group Pension Fund included an allowance for the estimated impact of guaranteed minimum pension equalisation, which is reflected in the IAS 19 valuation at 31 December 2021. As such, no explicit allowance is required in the IAS 19 figures (2020: £169 million). Accounting Assumptions Placing a value on NatWest Group’s defined benefit pension schemes’ liabilities requires NatWest Group’s management to make a number of assumptions, with the support of independent actuaries. The ultimate cost of the defined benefit obligations depends upon actual future events and the assumptions made are unlikely to be exactly borne out in practice, meaning the final cost may be higher or lower than expected. 5 Pensions continued The most significant assumptions used for the Main section are shown below: Principal IAS 19 actuarial assumptions 2021 2020 % % Discount rate 1.8 1.4 Inflation assumption (RPI) 3.3 2.9 Rate of increase in salaries 1.8 1.8 Rate of increase in deferred pensions 3.7 3.0 Rate of increase in pensions in payment 2.5 2.7 Lump sum conversion rate at retirement 18 20 Longevity at age 60: years years Current pensioners Males 27.3 27.1 Females 29.0 29.0 Future pensioners, currently aged 40 Males 28.2 28.3 Females 30.1 30.4 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. Significant judgment 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. Judgment 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's defined benefit obligation at 31 December 2021 is 20 years (2020 - 22 years). The chart below shows the projected benefit payment pattern for the Main section in nominal terms. These cashflows are based on the most recent formal actuarial valuation, effective 31 December 2020. The larger outflow in the first three years represents the expected level of transfers out to 31 December 2023. 5 Pensions continued The table below shows how the net pension asset 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 not move completely in isolation. (Decrease)/ (Decrease)/ Increase in increase in increase in net pension value of value of (obligations)/ assets liabilities assets 2021 £m £m £m 0.25% increase in interest rates/discount rate (2,917) (1,926) (991) 0.25% increase in inflation 1,883 1,329 554 0.25% increase in credit spreads (3) (1,926) 1,923 Longevity increase of one year — 1,790 (1,790) 0.25% additional rate of increase in pensions in payment — 1,485 (1,485) Increase in equity values of 10% (1) 442 — 442 2020 0.25% increase in interest rates/discount rate (2,585) (2,384) (201) 0.25% increase in inflation 2,204 1,603 601 0.25% increase in credit spreads (6) (2,384) 2,378 Longevity increase of one year — 1,930 (1,930) 0.25% additional rate of increase in pensions in payment — 1,608 (1,608) Increase in equity values of 10% (1) 454 — 454 (1) Includes both quoted and private equity. The funded status is most sensitive to movements in credit spreads and longevity. The table below shows the combined change in the funded status of the Main section as a result of larger movements in these assumptions, assuming no changes in other assumptions. Change in life expectancies -2 years -1 years No change + 1 year + 2 years 2021 £bn £bn £bn £bn £bn Change in credit spreads +50 bps 6.9 5.3 3.8 2.3 0.8 No change 3.6 1.8 — (1.8) (3.6) -50 bps (0.3) (2.4) (4.5) (6.6) (8.7) 2020 Change in credit spreads +50 bps 7.8 6.1 4.5 2.9 1.3 No change 3.9 1.9 — (1.9) (3.9) -50 bps (0.6) (2.8) (5.1) (7.4) (9.7) The defined benefit obligation of the Main section is attributable to the different classes of scheme members in the following proportions: 2021 2020 Membership category % % Active members 10.7 14.2 Deferred members 47.6 50.9 Pensioners and dependants 41.7 34.9 100.0 100.0 The experience history of NatWest Group schemes is shown below: Main section All schemes 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets 52,021 51,323 46,555 43,806 44,652 57,787 57,249 51,925 48,752 49,746 Present value of plan obligations 42,020 43,870 39,669 35,466 37,937 46,808 48,864 44,115 39,607 42,378 Net surplus/(deficit) 10,001 7,453 6,886 8,340 6,715 10,979 8,385 7,810 9,145 7,368 Experience gains/(losses) on plan liabilities 241 427 275 (122) (107) 237 455 279 (81) (93) Experience gains/(losses) on plan assets 841 5,486 3,021 (1,891) 1,580 872 6,027 3,556 (2,090) 1,728 Actual return on plan assets 1,554 6,422 4,266 (768) 2,735 1,667 7,064 4,930 (848) 3,013 Actual return on plan assets % 3.0% 13.8 % 9.7 % (1.7) % 6.2 % 2.9 % 13.6 % 10.1 % (1.7) % 6.1 % |
Auditor's remuneration
Auditor's remuneration | 12 Months Ended |
Dec. 31, 2021 | |
Auditor's remuneration | |
Auditor's remuneration | 6 Auditor’s 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’s 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 to meet its requirements. NatWest Group’s auditors are permitted to tender for such work in competition with other firms where the work is permissible under audit independence rules. 2021 2020 2019 £m £m £m Fees payable for : - the audit of NatWest Group’s annual accounts (1) 4.4 4.7 3.8 - the audit of NatWest Group plc’s subsidiaries (1) 29.6 30.6 25.7 - audit-related assurance services (1,2) 5.3 4.7 3.2 Total audit and audit-related assurance services fees 39.3 40.0 32.7 Other assurance services 0.4 0.6 1.2 Corporate finance services (3) 0.5 0.4 0.6 Total other services 0.9 1.0 1.8 (1) The 2021 audit fee was approved by the Group Audit Committee. At 31 December 2021, £19.7 million has been billed and paid in respect of the 2021 NatWest Group audit fees. (2) Comprises fees of £1.1 million (2020 - £1.1 million) in relation to reviews of interim financial information, £3.5 million (2020 - £3.2 million) in respect of reports to NatWest Group’s regulators in the UK and overseas, and £0.7 million (2020 - £0.4 million) in relation to non-statutory audit opinions. (3) Comprises fees of £0.5 million (2020 - £0.4 million) in respect of work performed by the auditors as reporting accountants on debt and equity issuances undertaken by NatWest Group . |
Tax
Tax | 12 Months Ended |
Dec. 31, 2021 | |
Tax | |
Tax | 7 Tax NatWest Group’s 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’s deferred tax balances. For accounting policy information see Accounting policies note 9. Analysis of the tax charge for the year The tax charge comprises current and deferred tax in respect of profits 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 reflected in the table below. Current tax is tax payable or recoverable in respect of the taxable profit or loss for the year and any adjustments to tax payable in prior years. Deferred tax is explained on page 60. 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Current tax Charge for the year (1,036) (191) (673) Over provision in respect of prior years 31 86 122 (1,005) (105) (551) Deferred tax (Charge)/credit for the year (185) 176 38 UK tax rate change impact (2) 165 75 — Net increase/(decrease) in the carrying value of deferred tax assets in respect of UK, Ireland and Netherlands losses 12 (130) 55 Over/(under) provision in respect of prior years (3) 17 (90) 19 Tax charge for the year (996) (74) (439) (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) It was announced in the UK Government’s budget on 3 March 2021 that the main UK corporation tax rate will increase from 19% to 25% from 1 April 2023. This legislative change was enacted on 10 June 2021. (3) 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. 7 Tax continued Factors affecting the tax charge for the year Taxable profits differ from profits reported in the income statement as certain amounts of income and expense may not be taxable or deductible. In addition, taxable profits may reflect items that have been included outside the income statement (for instance, in other comprehensive income) or adjustments that are made for tax purposes only. The expected tax charge for the year is calculated by applying the standard UK corporation tax rate of 19% (2020 and 2019 – 19%) to the Operating profit or loss before tax in the income statement. The actual tax charge differs from the expected tax charge as follows: 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Expected tax (charge)/credit (766) 92 (757) Losses and temporary differences in year where no deferred tax asset recognised (51) (43) (24) Foreign profits taxed at other rates (11) (29) 7 Non deductible goodwill impairment (16) — — Items not allowed for tax: - losses on disposals and write-downs (55) (22) (71) - UK bank levy (18) (32) (26) - regulatory and legal actions (74) 14 (165) - other disallowable items (28) (70) (62) Non-taxable items: - Alawwal bank merger gain disposal — — 215 - FX recycling on the liquidation of RFS Holdings — — 279 - other non-taxable items 73 28 80 Taxable foreign exchange movements 8 (3) (1) Unrecognised losses brought forward and utilised 10 16 16 (Decrease)/increase in the carrying value of deferred tax assets in respect of: - UK losses (9) 7 129 - Ireland losses (27) (137) (74) - Netherlands losses 48 — — Banking surcharge (341) (27) (199) Tax on paid-in equity 48 61 73 UK tax rate change impact 165 75 — Adjustments in respect of prior years 48 (4) 141 Actual tax charge (996) (74) (439) (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. Judgment: tax contingencies NatWest Group’s corporate income tax charge and its provisions for corporate income taxes necessarily involve a degree of estimation and judgment. The tax treatment of some transactions is uncertain and tax computations are yet to be agreed with the tax authorities in a number of jurisdictions. NatWest Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Any difference between the final outcome and the amounts provided will affect current and deferred income tax charges in the period when the matter is resolved. Deferred tax 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. Deferred tax liabilities reflect the expected amount of tax payable in the future on these temporary differences. Deferred tax assets reflect the expected amount of tax recoverable in the future on these differences. The net deferred tax asset recognised by the NatWest Group is shown below, together with details of the accounting judgments and tax rates that have been used to calculate the deferred tax. Details are also provided of any deferred tax assets or liabilities that have not been recognised on the balance sheet. Analysis of deferred tax £m £m Deferred tax asset (1,195) (901) Deferred tax liability 359 291 Net deferred tax asset (836) (610) 7 Tax continued Tax Accelerated losses capital Expense Financial carried Pension allowances provisions instruments forward Other Total £m £m £m £m £m £m £m At 1 January 2020 (139) 172 (118) 315 (951) (24) (745) Charge/(credit) to income statement: (1) - continuing operations 15 (234) 33 114 46 (5) (31) - discontinued operations — — — — 9 — 9 Charge/(credit) to other comprehensive income 119 — — 51 — (7) 163 Currency translation and other adjustments 1 (2) — — (9) 4 (6) At 1 January 2021 (4) (64) (85) 480 (905) (32) (610) Charge/(credit) to income statement: - continuing operations 19 21 (5) (10) (1) (33) (9) - discontinued operations — — — — 3 — 3 Charge/(credit) to other comprehensive income 10 — (7) (222) — (5) (224) Currency translation and other adjustments (1) 1 — — 4 — 4 At 31 December 2021 24 (42) (97) 248 (899) (70) (836) (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. Deferred tax assets in respect of carried forward tax losses are recognised if the losses can be used to offset probable future taxable profits after taking into account the expected reversal of other temporary differences. Recognised deferred tax assets in respect of tax losses are analysed further below. 2021 2020 £m £m UK tax losses carried forward - NWM Plc 56 62 - NWB Plc 608 592 - RBS plc 176 200 - Ulster Bank Limited — 8 Total 840 862 Overseas tax losses carried forward - UBIDAC 11 43 - NWM N.V. 48 — 899 905 Critical accounting policy: Deferred tax NatWest Group has recognised a deferred tax asset of £1,195 million (31 December 2020 - £901 million) and a deferred tax liability of £359 million (31 December 2020 - £291 million). These include amounts recognised in respect of UK and overseas tax losses of £899 million (31 December 2020 - £905 million). Deferred tax assets are recognised to the extent that it is probable that there will be future taxable profits to recover them. Judgment – Estimate – UK tax losses Under UK tax rules, tax losses can be carried forward indefinitely. As the recognised tax losses in NatWest Group arose prior to 1 April 2015, credit in future periods is given against 25% of profits at the main rate of UK corporation tax, excluding the Banking Surcharge 8% rate introduced by The Finance (No. 2) Act 2015. It was announced in the UK Government's budget on 3 March 2021 that the main UK corporation tax rate will increase from 19% to 25% from 1 April 2023. This legislative change was enacted on 10 June 2021. NatWest Group's closing deferred tax assets and liabilities have therefore been recalculated taking into account this change of rate and the applicable period the deferred tax assets and liabilities are expected to crystallise. As a result, the net deferred tax asset position in NatWest Group has increased by £163 million, with a £165 million tax credit included in the income statement (refer to reconciling item above), and a £2 million tax charge included in other comprehensive income. It was subsequently announced in the UK Government's budget on 27 October 2021 that the UK banking surcharge will decrease from 8% to 3% from 1 April 2023. This legislative change was substantively enacted on 2 February 2022. Had this rate reduction been substantively enacted as at the balance sheet date, the estimated rate change impact would not have been material. 7 Tax continued NWM Plc - NWB Plc – RBS plc – Overseas tax losses UBIDAC – NatWest Market N.V. (NWM N.V.) - Unrecognised deferred tax Deferred tax assets of £5,437 million (2020 - £4,965 million; 2019 - £4,653 million) have not been recognised in respect of tax losses and other deductible temporary differences carried forward of £24,699 million (2020 - £25,091 million; 2019 - £23,555 million) in jurisdictions where doubt exists over the availability of future taxable profits. Of these losses and other deductible temporary differences, £77 million expire within five years and £4,288 million thereafter. The balance of tax losses and other deductible temporary differences carried forward has no expiry date. Deferred tax liabilities of £302 million (2020 - £242 million; 2019 - £262 million) on aggregate underlying temporary differences of £1,032 million (2020 - £1,021 million; 2019 £1,074 million) have not been recognised in respect of retained earnings of overseas subsidiaries and held-over gains on the incorporation of certain overseas branches. Retained earnings of overseas subsidiaries are expected to be reinvested indefinitely 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. Changes to UK tax legislation largely exempts from UK tax overseas dividends received on or after 1 July 2009. |
Discontinued operations and ass
Discontinued operations and assets and liabilities of disposal groups | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued operations and assets and liabilities of disposal groups | |
Discontinued operations and assets and liabilities of disposal groups | 8 Discontinued operations and assets and liabilities of disposal groups Discontinued operations are reported separately on the income statement to allow users to distinguish the profits and cash flows from continuing operations from those activities that are subject to disposal. Assets and liabilities which we intend to dispose of in a single transaction are also presented separately on the balance sheet. For accounting policy information see Accounting policies note 3. This note sets out the profit/(loss) from the discontinued operations (represented for comparative periods), the assets and liabilities of the disposal group and the operating cash flows attributable to the discontinued operations. Two legally binding agreements for the sale of UBIDAC business were announced in 2021 as part of the phased withdrawal from the Republic of Ireland: On 28 June 2021 we announced it had agreed a binding sale agreement with Allied Irish Banks, p.l.c. for the transfer of c.€4.2 billion (plus up to €2.8 billion of undrawn exposures), of performing commercial loans as well as c.280 colleagues that are wholly or mainly assigned to supporting that part of the business, with the final number of roles to be confirmed as the deal completes. The sale, subject to Competition and Consumer Protection Commission (CCPC) approval, is expected to be completed in a series of transactions during 2022 and Q1 2023. On the 17 December 2021 we signed a legally binding agreement with Permanent TSB p.l.c. The proposed sale will include performing non-tracker mortgages, the performing loans in the micro-SME business; the UBIDAC Asset Finance business, including its Lombard digital platform, and a subset of Ulster Bank branch locations in the Republic of Ireland. The majority of loans are expected to transfer by Q4 2022. As part of the transaction it is anticipated that c.450 colleagues will have the right to transfer under the TUPE regulations with the final number of roles to be confirmed as the deal completes. The business activities relating to these sales that meet the requirements of IFRS 5 are presented as a discontinued operation and as a disposal group at 31 December 2021. The Ulster Bank RoI operating segment continues to be reported separately and reflects the results and balance sheet position of its continuing operations. (a) Profit from discontinued operations, net of tax 2021 2020 2019 £m £m £m Interest receivable 260 273 248 Net interest income 260 273 248 Non-interest income 9 15 18 Total income 269 288 266 Operating expenses (47) (47) (45) Profit before impairment losses 222 241 221 Impairment releases/(losses) 57 (111) 28 Operating profit before tax 279 130 249 Tax (charge)/credit (3) (9) 7 Profit from discontinued operations, net of tax 276 121 256 (b) Assets and liabilities of disposal groups 2021 £m Assets of disposal groups Loans to customers - amortised cost 9,002 Derivatives 5 Other assets 8 9,015 Liabilities of disposal groups Other liabilities 5 5 Net assets of disposal groups 9,010 (c) Operating cash flows attributable to discontinued operations 2021 2020 2019 £m £m £m Net cash flows from operating activities 1,290 (895) (3,909) Net increase/(decrease) in cash and cash equivalents 1,290 (895) (3,909) |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings per share | |
Earnings per share | 9 Earnings per share Earnings per share is a metric to measure how much profit NatWest Group makes for each share that is in issue during the year. Basic earnings per ordinary share is calculated by dividing the profit 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. 2021 2020 2019 £m £m £m Earnings Profit/(loss) from continuing operations attributable to ordinary shareholders 2,674 (874) 2,877 Profit from discontinued operations attributable to ordinary shareholders 276 121 256 Profit/(loss) attributable to ordinary shareholders 2,950 (753) 3,133 Weighted average number of shares (millions) Weighted average number of ordinary shares outstanding during the year 11,622 12,095 12,067 Effect of dilutive share options and convertible securities (1) 45 — 35 Diluted weighted average number of ordinary shares outstanding during the year 11,667 12,095 12,102 (1) As there was a loss from continuing operations attributable to the parent company for the period to 31 December 2020, the effect of share options and convertible securities was not dilutive. |
Financial instruments - classif
Financial instruments - classification | 12 Months Ended |
Dec. 31, 2021 | |
Financial instruments - classification | |
Financial instruments - classification | 10 Financial instruments – classification Financial instruments are contracts that give rise to a financial asset of one entity and a corresponding financial liability or equity instrument of a counterparty entity, such as: cash; derivatives; loans; deposits; and settlement balances. This note presents financial instruments classified in accordance with IFRS 9 – Financial Instruments. Judgment: classification of financial assets Classification of financial assets between amortised cost and fair value through other comprehensive income requires a degree of judgment in respect of business models and contractual cashflows. - The business model criteria is assessed at a portfolio level to determine whether assets are classified as held to collect or held to collect and sell. Information that is considered in determining the applicable business model includes the portfolio’s 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. - The contractual cash flow characteristics of financial assets are assessed with reference to whether the cash flows represent solely payments of principal and interest. A level of judgment is made in assessing terms that could change the contractual cash flows so that it would not meet the condition for solely payments of principal and interest, including contingent and leverage features, non-recourse arrangements and features that could modify the time value of money. For accounting policy information see Accounting policies 10, 12, 13 and 15. 10 Financial instruments – classification continued Judgment: classification of financial assets The following tables analyse financial assets and liabilities in accordance with the categories of financial instruments on an IFRS 9 basis. Amortised Other MFVTPL FVOCI cost assets Total Assets £m £m £m £m £m Cash and balances at central banks — — 177,757 — 177,757 Trading assets 59,158 — — — 59,158 Derivatives (1) 106,139 — — — 106,139 Settlement balances — — 2,141 — 2,141 Loans to bank - amortised cost (2) — — 7,682 — 7,682 Loans to customers - amortised cost (3) — — 358,990 — 358,990 Other financial assets 317 37,266 8,562 — 46,145 Intangible assets — — — 6,723 6,723 Other assets — — — 8,242 8,242 Assets of disposal groups — — — 9,015 9,015 31 December 2021 165,614 37,266 555,132 23,980 781,992 Cash and balances at central banks 124,489 124,489 Trading assets 68,990 68,990 Derivatives (1) 166,523 166,523 Settlement balances 2,297 2,297 Loans to bank - amortised cost (2) 6,955 6,955 Loans to customers - amortised cost (3) 360,544 360,544 Other financial assets 440 44,902 9,806 55,148 Intangible assets 6,655 6,655 Other assets 7,890 7,890 31 December 2020 235,953 44,902 504,091 14,545 799,491 Held-for- Amortised Other trading DFV cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (4) — — 26,279 — 26,279 Customer deposits — — 479,810 — 479,810 Settlement balances — — 2,068 — 2,068 Trading liabilities 64,598 — — — 64,598 Derivatives (1) 100,835 — — — 100,835 Other financial liabilities (5) — 1,671 47,655 — 49,326 Subordinated liabilities — 703 7,726 — 8,429 Notes in circulation — — 3,047 — 3,047 Other liabilities (6) — — 1,356 4,441 5,797 31 December 2021 165,433 2,374 567,941 4,441 740,189 Bank deposits (4) 20,606 20,606 Customer deposits 431,739 431,739 Settlement balances 5,545 5,545 Trading liabilities 72,256 72,256 Derivatives (1) 160,705 160,705 Other financial liabilities (5) 2,403 43,408 45,811 Subordinated liabilities 793 9,169 9,962 Notes in circulation 2,655 2,655 Other liabilities (6) 1,882 4,506 6,388 31 December 2020 232,961 3,196 515,004 4,506 755,667 (1) Includes net hedging derivatives assets of £ 44 million (2020 - £93 million) and net hedging derivatives liabilities of £ 120 million (2020 - £130 million). (2) Includes items in the course of collection from other banks of £67 million (2020 - £148 million). (3) Includes finance lease receivables of £8,531 million (2020 - £9,061 million). (4) Includes items in the course of transmission to other banks of £56 million (2020 - £12 million). (5) The carrying amount of other customer accounts designated at fair value through profit or loss is the same as the principal amount for both periods. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. (6) Includes lease liabilities of £1,263 million (2020 - £1,698 million) held at amortised cost. 10 Financial instruments – classification continued Judgment: classification of financial assets 2021 2020 £m £m Reverse repos Trading assets 20,742 19,404 Loans to banks - amortised cost 189 153 Loans to customers - amortised cost 25,962 25,011 Repos Bank deposits 7,912 6,470 Customer deposits 14,541 5,167 Trading liabilities 19,389 19,036 The tables below present information on financial assets and financial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements together with financial collateral received or given. Instruments which can be offset Potential for offset not recognised by IFRS Effect of Net amount after Instruments master netting the effect of netting outside IFRS Balance and similar Cash Securities agreements and netting Balance Gross offset sheet agreements collateral collateral related collateral agreements sheet total 2021 £m £m £m £m £m £m £m £m £m Derivative assets 113,220 (7,961) 105,259 (85,006) (15,035) (2,428) 2,790 880 106,139 Derivative liabilities 108,594 (8,568) 100,026 (85,006) (9,909) (2,913) 2,198 809 100,835 Net position (1) 4,626 607 5,233 — (5,126) 485 592 71 5,304 Trading reverse repos 44,529 (24,422) 20,107 (900) — (19,136) 71 635 20,742 Trading repos 42,664 (24,422) 18,242 (900) — (17,341) 1 1,147 19,389 Net position 1,865 — 1,865 — — (1,795) 70 (512) 1,353 Non trading reverse repos 33,729 (7,594) 26,135 — — (26,135) — 16 26,151 Non trading repos 30,047 (7,594) 22,453 — — (22,453) — — 22,453 Net position 3,682 — 3,682 — — (3,682) — 16 3,698 2020 Derivative assets 176,425 (10,807) 165,618 (137,086) (19,608) (5,053) 3,871 905 166,523 Derivative liabilities 171,614 (11,540) 160,074 (137,086) (15,034) (4,921) 3,033 631 160,705 Net position (1) 4,811 733 5,544 — (4,574) (132) 838 274 5,818 Trading reverse repos 43,908 (24,867) 19,041 (929) — (18,040) 72 363 19,404 Trading repos 42,203 (24,867) 17,336 (929) — (16,407) — 1,700 19,036 Net position 1,705 — 1,705 — — (1,633) 72 (1,337) 368 Non trading reverse repos 36,117 (10,953) 25,164 — — (25,164) — — 25,164 Non trading repos 22,590 (10,953) 11,637 — — (11,637) — — 11,637 Net position 13,527 — 13,527 — — (13,527) — — 13,527 (1) The net IFRS offset balance of £607 million (2020 - £733 million)relates to variation margin netting reflected on other balance sheet lines . 10 Financial instruments – classification continued Interest rate benchmark reform The NatWest Group IBOR program successfully delivered the conversion of the vast majority of the IBOR exposures to risk free rates (RFR) in advance of the cessation date. This encompasses loans, deposits, capital instruments and derivatives, which, have been converted using fallback provisions, switch provisions or as part of market-wide conversion events in the case of derivatives subject to clearing. These instruments will convert at the first repricing date post cessation. The total amount of exposure for NatWest Group at 31 December 2021 subject to the above conversion provisions are £22,056 million of assets, £426 million of liabilities, £15,785 million of loan commitments and £557.7 billion of derivative notionals. Despite the significant conversion levels achieved, certain instruments remain in discussion with customers and counterparties to achieve consensual conversion. If consensual conversion is not achieved these instruments will default to synthetic LIBOR in line with relevant legislation. The level of exposures without explicit or agreed conversion provisions as of 31 December 2021 is as follows: Rates subject to IBOR reform GBP LIBOR USD IBOR (1) Other IBOR (2) Total 2021 £m £m £m £m Trading assets 62 90 — 152 Loans to banks - amortised cost — 11 — 11 Loans to customers - amortised cost 4,788 4,565 267 9,620 Other financial assets 864 768 — 1,632 Bank deposits — 37 — 37 Customer deposits — — — — Trading liabilities 31 166 — 197 Other financial liabilities 2,390 7,023 131 9,544 Subordinated liabilities — 90 — 90 Loan commitments (3) 1,016 6,366 55 7,437 Derivatives notional (£bn) 3.6 1,152.0 — 1,155.6 At December 2021 NatWest Group held certain currency swaps with both legs subject to IBOR reform, for which only the GBP LIBOR leg has an explicit or agreed conversion provisions as of 31 December 2021, but not the entire contract. These include currency swaps of GBP LIBOR of £8.7 billion with USD IBOR £8.2 billion and Other IBOR £0.5 billion; currency swaps of USD IBOR of £117 billion with GBP LIBOR £91.7 billion and Other IBOR £25.3 billion; currency swaps of EURIBOR of £0.1 billion with GBP LIBOR £0.1 billion; currency swaps of Other IBOR of £0.4 billion with USD IBOR £0.4 billion. 10 Financial instruments – classification continued Interest rate benchmark reform Rates subject to IBOR reform GBP LIBOR USD IBOR (1) EURIBOR (2) Other IBOR Total 2020 £m £m £m £m £m Trading assets 75 60 348 1 484 Loans to banks - amortised cost 23 82 101 — 206 Loans to customers - amortised cost 40,299 6,366 4,950 234 51,849 Other financial assets 2,918 303 370 — 3,591 Bank deposits — 367 — 107 474 Customer deposits — — — 4 4 Trading liabilities 54 414 269 2 739 Other financial liabilities 2,492 9,806 5,902 196 18,396 Subordinated liabilities 8 850 438 — 1,296 Loan commitments (3) 25,616 9,228 7,176 682 42,702 Derivatives notional (£bn) 1,407.5 1,368.8 2,358.7 289.6 5,424.6 (1) In 2021 the FCA declared that USD IBOR will be non-representative post 30 June 2023; at the time of preparing the 31 December 2020 Annual Report on Form 20-F this date was expected to be 31 December 2021. (2) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for EURIBOR has ended. 31 December 2020 data includes EURIBOR exposure as subject to reform. (3) Certain loan commitments are multi-currency facilities. Where these are fully undrawn, they are allocated to the principal currency of the facility. Where the facilities are partly drawn, the remaining loan commitment is allocated to the currency with the largest drawn amount. Included within the 31 December 2020 table above for derivatives were currency swaps with corresponding legs also subject to IBOR reform of GBP LIBOR of £5.2 billion with USD IBOR £2.0 billion, EURIBOR £2.9 billion and Other IBOR £0.3 billion. Currency swaps of USD IBOR of £231.7 billion with GBP LIBOR £98.5 billion, EURIBOR £85.8 billion and Other IBOR £47.4 billion. Currency swaps of EURIBOR of £5.1 billion with GBP LIBOR £2.3 billion, USD IBOR £1.8 billion and Other IBOR £1.0 billion. Currency swaps of Other IBOR of £2.2 billion with EURIBOR £0.7 billion, USD IBOR £1.2 billion and Other IBOR £0.3 billion. Additionally, included above are basis swaps for GBP LIBOR of £97 billion, USD IBOR of £ 81 billion, EURIBOR of £49 billion and Other IBOR of £10 billion. AT1 issuances NatWest Group has issued certain capital instruments, AT1, under which reset clauses are linked to IBOR rates subject to reform. Where under the contractual terms of the instrument the coupon resets to a rate which has IBOR as a specified component of its pricing structure, these are subject to IBOR reform and listed below: 31 December 31 December 2021 2020 £m £m US$1.15 billion 8% notes 734 734 US$2.65 billion 8.625% notes — 2,046 NatWest Group‘s non-cumulative preference shares of USD$0.01 Series U (£494 million) are also subject to IBOR reform. |
Financial instruments - valuati
Financial instruments - valuation | 12 Months Ended |
Dec. 31, 2021 | |
Financial instruments - classification | |
Financial instruments - valuation | 11 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 financial instruments. The table below provides an overview of the various sections contained within the note. Critical accounting policy: Fair value - financial instruments Financial instruments classified as mandatory fair value through profit or loss; held-for-trading; designated fair value through profit or loss and fair value through other comprehensive income are recognised in the financial 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 financial assets and financial 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 (see ’Valuation Adjustments’). Where the market for a financial 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’s complexity and the availability of market-based data. The complexity and uncertainty in the financial instrument’s fair value is categorised using the fair value hierarchy. For accounting policy information see Accounting policies notes 10 and 15. Page Financial instruments Critical accounting policy: Fair value 68 Valuation Fair value hierarchy 69 Valuation techniques 69 Inputs to valuation models 69 Valuation control 70 Key areas of judgment 70 Table of assets and liabilities split by fair value hierarchy level 71 Valuation adjustments Table of fair value adjustments made 71 Funding valuation adjustments (FVA) 72 Credit valuation adjustments (CVA) 72 Bid-offer 72 Product and deal specific 72 Own credit 72 Level 3 additional information Level 3 ranges of unobservable inputs 73 Table of level 3 instruments, valuation techniques and inputs (T) 73 Level 3 sensitivities 74 Alternative assumptions 74 Other considerations 74 Table of high and low range of fair value of level 3 assets and liabilities (T) 74 Movement in level 3 assets and liabilities over the reporting period 75 Table of the movement in level 3 assets and liabilities 75 Fair value of financial instruments measured at amortised cost Table showing the fair value of financial instruments measured at amortised cost on the balance sheet 76 (D) = Descriptive; (T) = Table 11 Financial instruments – valuation continued Valuation Fair value hierarchy Financial instruments carried at fair value have been classified under the fair value hierarchy. The classification ranges from level 1 to level 3, with more expert judgment and price uncertainly for those classified at level 3. The determination of an instrument’s level cannot be made at a global product level as a single product type can be in more than one level. For example, a single name corporate credit default swap could be in level 2 or level 3 depending on the level of market activity for the referenced entity. Level 1 – instruments valued using unadjusted quoted prices in active and liquid markets, for identical financial instruments. Examples include government bonds, listed equity shares and certain exchange-traded derivatives. Level 2 - instruments valued using valuation techniques that have observable inputs. Observable inputs are those that are readily available with limited adjustments required. Examples include most government agency securities, investment-grade corporate bonds, certain mortgage products - including CLOs, most bank loans, repos and reverse repos, state and municipal obligations, most notes issued, certain money market securities, loan commitments and most OTC derivatives. Level 3 - instruments valued using a valuation technique where at least one input which could have a significant effect on the instruments valuation, is not based on observable market data. Examples include non-derivative instruments which trade infrequently, certain syndicated and commercial mortgage loans, private equity, and derivatives with unobservable model inputs. Valuation techniques NatWest Group derives the fair value of its instruments differently depending on whether the instrument is a non-modelled or a modelled product. Non-modelled products are valued directly from a price input, typically on a position-by-position basis. Examples include equities and most debt securities. Non-modelled products can fall into any fair value levelling hierarchy depending on the observable market activity, liquidity, and assessment of valuation uncertainty of the instruments. The assessment of fair value and the classification of the instrument to a fair value level is subject to the valuation controls discussed in the Valuation control section. Modelled products valued using a pricing model range in complexity from comparatively vanilla products such as interest rate swaps and options (e.g., interest rate caps and floors) through to more complex derivatives (e.g., balance guarantee swaps). For modelled products the fair value is derived using the model and the appropriate model inputs or parameters, as opposed to a cash price equivalent. Model inputs are taken either directly or indirectly from available data, where some inputs are also modelled. Fair value classification of modelled instruments is either level 2 or level 3, depending on the product/model combination, the observability and quality of input parameters and other factors. All these must be assessed to classify a position. The modelled product is assigned to the lowest fair value hierarchy level of any significant input used in that valuation. Most derivative instruments, for example vanilla interest rate swaps, foreign exchange swaps and liquid single name credit derivatives, are classified as level 2. This is because they are vanilla products valued using standard market models and with observable inputs. Level 2 products range from vanilla to more complex products, where more complex products remain classified as Level 2 due to the materiality of any unobservable inputs. Inputs to valuation models When using valuation techniques, the fair value can be significantly affected by the choice of valuation model and underlying assumptions. Factors considered include the cashflow amounts and timing of those cash flows, and application of appropriate discount rates, incorporating both funding and credit risk. Values between and beyond available data points are obtained by interpolation and extrapolation. The principal inputs to these valuation techniques are as follows: Bond prices - quoted prices are generally available for government bonds, certain corporate securities, and some mortgage-related products. Credit spreads - these express the return required over a benchmark rate or index to compensate for the referenced credit risk. Where available, these are derived from the price of credit default swaps or other credit-based instruments, such as debt securities. When direct prices are not available; credit spreads are determined with reference to available prices of entities with similar characteristics. Interest rates - these are principally based on interest rate swap prices referencing benchmark interest rates. Benchmark rates include Interbank Offered Rates (IBOR) and the Overnight Index Swap (OIS) rate, including SONIA (Sterling Overnight Interbank Average Rate). Other quoted interest rates may also be used from both the bond, and futures markets. Foreign currency exchange rates - there are observable prices both for spot and forward contracts and futures in the world's major currencies. 11 Financial instruments – valuation continued Equity and equity index prices - quoted prices are generally readily available for equity shares listed on the world's major stock exchanges and for major indices on such shares. Price volatilities and correlations - volatility is a measure of the tendency of a price to change with time. Correlation measures the degree which two or more prices or variables are observed to move together. Variables that move in the same direction show positive correlation; those that move in opposite directions are negatively correlated. Prepayment rates - rates used to reflect how fast a pool of assets prepay. The fair value of a financial instrument that can be prepaid by the issuer or borrower differs from that of an instrument that cannot be prepaid. When valuing prepayable instruments, the value of this prepayment option is considered. Recovery rates/loss given default - these are used as an input to valuation models and reserves for asset-backed securities and other credit products as an indicator of severity of losses on default. Recovery rates are primarily sourced from market data providers, the value of the underlying collateral, or inferred from observable credit spreads. Valuation control NatWest Group's control environment for the determination of the fair value of financial instruments includes formalised procedures for the review and validation of fair values. This review is performed by an independent price verification (IPV) team. IPV is a key element of the control environment. Valuations are first performed by the business which entered into the transaction. These valuations are then reviewed by the IPV team, independent of those trading the financial 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 identified through the IPV process these are grouped by the quality hierarchy of the independent data. If the size of the difference exceeds defined 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 financial 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 classifications. Initial fair value level classification of a financial instrument is carried out by the IPV team. These initial classifications 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 significantly 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 judgment Over the years the business has simplified, with most products classified 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 classified as level 3. Level 3 indicates a significant level of pricing uncertainty, where expert judgment is used. As such, extra disclosures are required in respect of level 3 instruments. Over the years the business has simplified, with most products classified 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 classified as level 3. Level 3 indicates a significant level of pricing uncertainty, where expert judgment is used. As such, extra disclosures are required in respect of level 3 instruments. In general, the degree of expert judgment used and hence valuation uncertainty depends on the degree of liquidity of an instrument or input. Where markets are liquid, little judgment is required. However, when the information regarding the liquidity in a particular market is not clear, a judgment may need to be made. For example, for an equity traded on an exchange, daily volumes of trading can be seen, but for an over the counter (OTC) derivative, assessing the liquidity of the market with no central exchange is more challenging. 11 Financial instruments – valuation continued A key related matter is where a market moves from liquid to illiquid or vice versa. Where this movement is considered temporary, the fair value level is not changed. For example, if there is little market trading in a product on a reporting date but at the previous reporting date and during the intervening period the market has been liquid. In this case, the instrument will continue to be classified at the same level in the hierarchy. This is to provide consistency so that transfers between levels are driven by genuine changes in market liquidity and do not reflect short term or seasonal effects. Material movements between levels are reviewed quarterly by the Business and IPV. 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 expert judgment and hence carry the most significant price uncertainty. 2021 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total £m £m £m £m £m £m £m £m Assets Trading assets Loans — 33,482 721 34,203 — 39,550 225 39,775 Securities 19,563 5,371 21 24,955 21,535 7,599 81 29,215 Derivatives — 105,222 917 106,139 — 165,441 1,082 166,523 Other financial assets — — Loans — 359 207 566 — 185 168 353 Securities 28,880 7,951 186 37,017 35,972 8,850 167 44,989 Total financial assets held at fair value 48,443 152,385 2,052 202,880 57,507 221,625 1,723 280,855 As % of total fair value assets 24 % 75 % 1 % 20 % 79 % 1 % Liabilities Trading liabilities Deposits — 38,658 2 38,660 — 44,062 7 44,069 Debt securities in issue — 974 — 974 — 1,408 — 1,408 Short positions 20,507 4,456 1 24,964 19,045 7,734 — 26,779 Derivatives — 100,229 606 100,835 — 159,818 887 160,705 Other financial liabilities — — Debt securities in issue — 1,103 — 1,103 — 1,607 — 1,607 Other deposits — 568 — 568 — 796 — 796 Subordinated liabilities — 703 — 703 — 793 — 793 Total financial liabilities held at fair value 20,507 146,691 609 167,807 19,045 216,218 894 236,157 As % of total fair value liabilities 12 % 88 % 0 % 8 % 92 % 0 % (1) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. (2) For an analysis of debt securities held at mandatory fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Risk and capital management – Credit risk. Valuation adjustments When valuing financial instruments in the trading book, adjustments are made to mid-market valuations to cover bid-offer spread, funding and credit risk. These adjustments are presented in the table below: 2021 2020 Adjustment £m £m Funding – FVA 90 140 Credit – CVA 390 390 Bid – Offer 113 148 Product and deal specific 119 172 712 850 11 Financial instruments – valuation continued There was a reallocation of FVA to CVA during the period following an update to the risk management of certain exposures. The net decrease across CVA and FVA was driven by reduced exposures, due to increases in interest rates and trade exit activity. The reduction in bid-offer and product and deal specific reserves followed reduced risk due to trade exit activity and LIBOR cessation. Funding valuation adjustments (FVA) FVA represents an estimate of the adjustment that a market participant would make to incorporate funding costs and benefits that arise in relation to derivative exposures. FVA is calculated as a portfolio level adjustment and can result in either a funding charge (positive) or funding benefit (negative). Funding levels are applied to estimated potential future exposures. For uncollateralised derivatives, the exposure reflects the future valuation of the derivative. For collateralised derivatives, the exposure reflects the difference between the future valuation of the derivative and the level of collateral posted. Credit valuation adjustments (CVA) CVA represents an estimate of the adjustment to fair value that is made to incorporate the counterparty credit risk inherent in derivative exposures. CVA is actively managed by a credit and market risk hedging process, and therefore movements in CVA are partially offset by trading revenue on the hedges. The CVA is calculated on a portfolio basis reflecting an estimate of the amount a third party would charge to assume the credit risk. Collateral held under a credit support agreement is factored into the CVA calculation. In such cases where NatWest Group holds collateral against counterparty exposures, CVA is held to the extent that residual risk remains. Bid-offer Fair value positions are required to be marked to exit, represented by bid (long positions) or offer (short positions) levels. Non-derivative positions are typically marked directly to bid or offer prices. However derivative exposures are adjusted to exit levels by taking bid-offer reserves calculated on a portfolio basis. The bid-offer approach is based on current market spreads and standard market bucketing of risk. Bid-offer spreads vary by maturity and risk type to reflect different spreads in the market. For positions where there is no observable quote, the bid-offer spreads are widened in comparison to proxies to reflect reduced liquidity or observability. Netting is applied on a portfolio basis to reflect the value at which NatWest Group believes it could exit the net risk of the portfolio, rather than the sum of exit costs for each of the portfolio’s individual trades. This is applied where the asset and liability positions are managed as a portfolio for risk and reporting purposes. Product and deal specific On initial recognition of financial assets and liabilities valued using valuation techniques which have a significant dependence on information other than observable market data, any difference between the transaction price and that derived from the valuation technique is deferred. Such amounts are recognised in the income statement over the life of the transaction; when market data becomes observable; or when the transaction matures or is closed out as appropriate. On 31 December 2021, net gains of £71 million (2020 - £63 million) were carried forward. During the year, net gains of £103 million (2020 - £75 million) were deferred and £94 million (2020 - £100 million) were recognised in the income statement. Where system generated valuations do not accurately recover market prices, manual valuation adjustments are applied either at a position or portfolio level. Manual adjustments are subject to the scrutiny of independent control teams and are subject to monthly review by senior management. Own Credit NatWest Group considers the effect of its own credit standing when valuing financial liabilities recorded at fair value. Own credit spread adjustments are made when valuing issued debt held at fair value, including issued structured notes. An own credit adjustment is applied to positions where it is believed that counterparties would consider NatWest Group's creditworthiness when pricing trades. 11 Financial instruments – valuation continued Level 3 additional information For illiquid assets and liabilities, classified 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 to gauge the level of uncertainty that arises from positions with significant unobservable inputs or modelling parameters. Level 3 ranges of unobservable inputs 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 or inputs and input range. 2021 2020 Financial instrument Valuation technique Unobservable inputs Units Low High Low High Trading assets and Other financial assets Loans Price-based Price % — 106 — 105 Discount cash flow Credit spreads bps 40 102 69 119 Discount cash flow Discount margin bps 46 55 51 226 Debt securities Price-based Price % — 240 — 232 Equity Shares Price-based Price GBP — 30,378 — 27,737 Price-based Price % — 7 — 80 Discount cash flow Discount margin % 6 8 7 9 Net asset valuation Net asset value % 80 120 80 120 Derivative assets and liabilities Credit derivatives Credit derivative pricing Credit spreads bps 6 635 2 500 Correlation % (15) 95 (50) 95 Volatility % 30 108 27 80 Upfront points % — 100 — 100 Recovery rate % — 60 10 40 Interest rate & FX Option pricing Correlation % (50) 100 (50) 100 derivatives Volatility % 17 77 17 60 Constant Prepayment Rate % 2 16 2 18 Mean Reversion % — 92 — 92 Basis volatility bps 8 18 15 21 Inflation volatility % 1 2 1 2 Inflation rate % 2 3 1 2 Equity derivatives Option pricing Correlation % (53) 87 (53) 87 (1) Valuation for private equity investments may be estimated by looking at past prices of similar stocks and from valuation statements where valuations are usually derived from earnings measures such as EBITDA or net asset value (NAV). Similarly, for equity or bond fund investments, prices may be estimated from valuation or credit statements using NAV or similar measures. (2) NatWest Group does not have any material liabilities measured at fair value that are issued with an inseparable third-party credit enhancement. 11 Financial instruments – valuation continued Level 3 sensitivities The level 3 sensitivities presented below are calculated at a trade or low-level portfolio basis rather than an overall portfolio basis. As individual sensitivities are aggregated with no reflection of the correlated nature between instruments, the overall portfolio sensitivity may not be accurately reflected. For example, some portfolios may be negatively correlated to others, where a downwards movement in one asset would produce an upwards movement in another. However, due to the additive presentation of the above figures this correlation impact cannot be displayed. As such, the actual potential downside sensitivity of the total portfolio may be less than the non-correlated sum of the additive figures as shown in the below table. Alternative assumptions Reasonably plausible alternative assumptions of unobservable inputs are determined based on a specified target level of certainty of 90%. Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information considering consistency between 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); day 1 profit 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 market intelligence. Other considerations 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 significant effect on the net valuation of the related derivative portfolios and issued debt. 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 included in the level 3 sensitivities presented. The table below shows the high and low 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. 2021 2020 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 721 10 (10) 225 10 — Securities 21 — — 81 — — Derivatives 917 60 (70) 1,082 80 (80) Other financial assets Loans 207 10 (10) 168 20 (10) Securities 186 20 (20) 167 30 (20) 2,052 100 (110) 1,723 140 (110) Liabilities Trading liabilities Deposits 2 — — 7 — — Debt securities in issue — — — — — — Short positions 1 — — — — — Derivatives 606 30 (30) 887 50 (40) Other financial liabilities — — — — — — 609 30 (30) 894 50 (40) 11 Financial instruments – valuation continued Movement in level 3 assets and liabilities The following table shows the movement in level 3 assets and liabilities in the year. 2021 2020 Trading Other Trading Other assets financial Total Total assets financial Total Total (2) assets (3) assets liabilities (2) assets (3) assets liabilities £m £m £m £m £m £m £m £m At 1 January 1,388 335 1,723 894 2,233 321 2,554 1,317 Amounts recorded in the income statement (1) (93) (29) (122) (90) 127 (21) 106 (67) Amounts recorded in the statement of comprehensive income — 23 23 — — 63 63 — Level 3 transfers in 125 3 128 20 165 98 263 188 Level 3 transfers out (104) (6) (109) (168) (139) — (139) (368) Purchases/originations (4) 965 452 1,416 305 441 327 768 127 Settlements/other decreases (47) (364) (411) (28) (293) (153) (446) (59) Sales (573) (17) (590) (321) (1,148) (301) (1,449) (245) Foreign exchange and other (3) (3) (6) (3) 2 1 3 1 At 31 December 1,658 394 2,052 609 1,388 335 1,723 894 Amounts recorded in the income statement in respect of balances held at year end - unrealised (93) (32) (126) (90) 129 (22) 107 (68) (1) There were £3 million net losses on trading assets and liabilities (2020 - £194 million net gain) recorded in income from trading activities. Net losses on other instruments of £29 million (2020 - £21 million net losses) were recorded in other operating income and interest income as appropriate. (2) Trading assets comprise assets held at fair value in trading portfolios. (3) Other financial assets comprise fair value through other comprehensive income, designated as at fair value through profit or loss and other fair value through profit or loss. (4) Movement in the period includes new loan originations classified as HTC&S under IFRS 9 and fair valued through other comprehensive income. 2021 purchases include a new leveraged finance loan of £ 450 million. As a result of its composition and illiquid nature, pricing is based on unobservable inputs and the judgment of valuation experts. 11 Financial instruments – valuation continued Fair value of financial instruments measured at amortised cost on the balance sheet The following table shows the carrying value and fair value of financial instruments measured at amortised cost on the balance sheet. Items where fair value approximates Carrying Fair value hierarchy level carrying value value Fair value Level 1 Level 2 Level 3 2021 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 177.8 — — — — — Settlement balances 2.1 — — — — — Loans to banks 0.1 7.5 7.5 — 5.0 2.5 Loans to customers — 359.0 354.1 — 28.0 326.1 Other financial assets - securities — 8.6 8.6 4.4 0.7 3.5 2020 Financial assets Cash and balances at central banks 124.5 — — — — — Settlement balances 2.3 — — — — — Loans to banks 0.1 6.9 6.9 — 3.8 3.1 Loans to customers — 360.5 359.2 — 25.2 334.0 Other financial assets - securities — 9.8 10.1 5.9 1.2 3.0 2021 Financial liabilities Bank deposits 4.9 21.4 21.0 — 18.7 2.3 Customer deposits 442.4 37.4 37.6 — 18.1 19.5 Settlement balances 2.1 — — — Other financial liabilities - debt securities in issue — 47.7 48.6 — 41.4 7.2 Subordinated liabilities — 7.7 8.3 — 8.2 0.1 Notes in circulation 3.0 — — — — — 2020 Financial liabilities Bank deposits 4.4 16.2 16.2 — 11.3 4.9 Customer deposits 371.7 60.0 60.1 — 10.1 50.0 Settlement balances 5.5 — — — — — Other financial liabilities - debt securities in issue — 43.4 44.6 — 34.7 9.9 Subordinated liabilities — 9.2 9.8 — 9.7 0.1 Notes in circulation 2.7 — — — — — The assumptions and methodologies underlying the calculation of fair values of financial instruments at the balance sheet date are as follows: Short-term financial instruments For certain short-term financial instruments: cash and balances at central banks, items in the course of collection from other banks, settlement balances, items in the course of transmission to other banks, customer demand deposits and notes in circulation, 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's loans are segregated into appropriate portfolios reflecting the characteristics of the constituent loans. Two principal methods are used to estimate fair value: (a) Contractual cash flows 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. This method is used for por |
Financial instruments - maturit
Financial instruments - maturity analysis | 12 Months Ended |
Dec. 31, 2021 | |
Financial instruments - classification | |
Financial instruments - maturity analysis | 12 Financial instruments - maturity analysis Remaining maturity This note shows the maturity profile of NatWest Group’s financial assets and liabilities by contractual date of maturity and contractual cash flows. The following table shows the residual maturity of financial instruments, based on contractual date of maturity. 2021 2020 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 177,757 — 177,757 124,489 — 124,489 Trading assets 40,263 18,895 59,158 42,037 26,953 68,990 Derivatives 34,538 71,601 106,139 46,244 120,279 166,523 Settlement balances 2,141 — 2,141 2,297 — 2,297 Loans to banks - amortised cost 7,425 257 7,682 6,835 120 6,955 Loans to customers - amortised cost 103,689 255,301 358,990 87,531 273,013 360,544 Other financial assets 11,151 34,994 46,145 8,901 46,247 55,148 Liabilities Bank deposits 13,715 12,564 26,279 12,315 8,291 20,606 Customer deposits 478,801 1,009 479,810 430,283 1,456 431,739 Settlement balances 2,068 — 2,068 5,545 — 5,545 Trading liabilities 41,664 22,934 64,598 45,037 27,219 72,256 Derivatives 34,593 66,242 100,835 47,361 113,344 160,705 Other financial liabilities 16,060 33,266 49,326 12,403 33,408 45,811 Subordinated liabilities 1,375 7,054 8,429 365 9,597 9,962 Notes in circulation 3,047 — 3,047 2,655 — 2,655 Lease liabilities 238 1,025 1,263 185 1,513 1,698 Assets and liabilities by contractual cash flows up to 20 years The tables on the following page, show the contractual undiscounted cash flows receivable and payable, up to a period of 20 years, including future receipts and payments of interest of financial 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 flows 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 reflected 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 financial instrument is triggered by, or is subject to, specific 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 fulfilled, 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 outflow will be included in the less than three months period, whatever the level of the 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 flows are received from the securitised assets. Where these assets are prepayable, the timing of the cash outflow relating to securities assumes that each asset will be prepaid at the earliest possible date. As the repayments of 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. The principal amounts of financial 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 interest payments after 20 years. The maturity of guarantees and commitments is based on the earliest possible date they would be drawn in order to evaluate NatWest Group's liquidity position. MFVTPL assets of £165.6 billion (2020 - £236.0 billion) and HFT liabilities of £165.3 billion (2020 - £232.8 billion) have been excluded from the following tables. 12 Financial instruments - maturity analysis continued 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2021 £m £m £m £m £m £m Assets by contractual maturity up to 20 years Cash and balances at central banks 177,757 — — — — — Derivatives held for hedging (23) (32) 72 15 10 17 Settlement balances 2,141 — — — — — Loans to banks - amortised cost 5,735 1,689 21 — — — Loans to customers - amortised cost 65,760 43,144 63,979 45,057 73,044 90,115 Other financial assets (1) 3,924 7,576 10,467 8,048 7,444 5,523 Finance lease 290 340 746 504 704 377 255,584 52,717 75,285 53,624 81,202 96,032 Liabilities by contractual maturity up to 20 years Bank deposits 13,292 421 566 12,003 — — Customer deposits 473,123 5,440 1,155 73 4 19 Settlement balances 2,068 — — — — — Derivatives held for hedging (57) (31) 561 155 (152) (198) Other financial liabilities 6,967 9,293 16,953 10,062 7,905 292 Subordinated liabilities 66 1,604 3,481 2,170 1,496 563 Other liabilities - Notes in circulation 3,047 — — — — — Lease liabilities 74 161 220 167 281 251 498,580 16,888 22,936 24,630 9,534 927 Guarantees and commitments - notional amount Guarantees (2) 2,055 — — — — — Commitments (3) 118,536 — — — — — 120,591 — — — — — 2020 Assets by contractual maturity up to 20 years Cash and balances at central banks 124,489 — — — — — Derivatives held for hedging 14 18 96 — 12 6 Settlement balances 2,297 — — — — — Loans to banks - amortised cost 5,600 1,245 — — 1 110 Loans to customers - amortised cost 47,507 46,718 65,138 58,680 81,544 88,155 Other financial assets (1) 4,019 5,919 12,592 10,791 11,855 5,774 Finance lease 48 366 840 671 895 545 183,974 54,266 78,666 70,142 94,307 94,590 Liabilities by contractual maturity up to 20 years Bank deposits 11,217 1,078 3,241 5,038 — — Customer deposits 421,763 8,528 1,407 23 26 20 Settlement balances 5,545 — — — — — Derivatives held for hedging 36 (17) 94 3 64 (2) Other financial liabilities 4,716 8,144 15,558 11,470 7,358 254 Subordinated liabilities 73 685 4,387 3,444 923 562 Other liabilities - Notes in circulation 2,655 — — — — — Lease liabilities 51 135 294 245 429 497 446,056 18,553 24,981 20,223 8,800 1,331 Guarantees and commitments - notional amount Guarantees (2) 2,244 — — — — — Commitments (3) 121,922 — — — — — 124,166 — — — — — (1) Other financial assets excludes equity shares. (2) 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. (3) 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. |
Trading assets and liabilities
Trading assets and liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Trading assets and liabilities | |
Trading assets and liabilities | 13 Trading assets and liabilities Trading assets and liabilities comprise assets and liabilities held at fair value and classified as held-for- trading. Financial instruments are classified 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 see Accounting policies note 10. 2021 2020 Assets £m £m Loans Reverse repos 20,742 19,404 Collateral given 12,047 18,760 Other loans 1,414 1,611 Total loans 34,203 39,775 Securities Central and local government - UK 6,919 4,184 - US 3,329 5,149 - other 10,929 16,436 Financial institutions and corporate 3,778 3,446 Total securities 24,955 29,215 Total 59,158 68,990 Liabilities Deposits Repos 19,389 19,036 Collateral received 17,718 23,229 Other deposits 1,553 1,804 Total deposits 38,660 44,069 Debt securities in issue 974 1,408 Short positions 24,964 26,779 Total 64,598 72,256 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2021 | |
Derivatives | |
Derivatives | 14 Derivatives Derivative is a term covering a wide range of financial 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 more specifically the effects of the application of hedge accounting. For accounting policy information see Accounting policies note 10 and 15. 2021 2020 Notional Assets Liabilities Notional Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts 3,167 38,517 39,286 3,328 52,239 55,107 Interest rate contracts 8,919 67,458 61,206 10,703 114,115 105,214 Credit derivatives 14 154 343 15 161 376 Equity and commodity contracts — 10 — 1 8 8 106,139 100,835 166,523 160,705 NatWest Group applies hedge accounting to reduce the accounting mismatch caused in the income statement by using derivatives to hedge the following risks: interest rate, foreign exchange and net investment in foreign operations. NatWest Group’s interest rate hedging relates to the management of NatWest Group’s non-trading structural interest rate risk, caused by the mismatch between fixed interest rates and floating interest rates on its financial instruments. NatWest Group manages this risk within approved limits. Residual risk positions are hedged with derivatives, principally interest rate swaps. Suitable larger fixed rate financial instruments are subject to fair value hedging; the remaining exposure, where possible, is hedged by derivatives designated as cash flow hedges. Cash flow hedges of interest rate risk relate to exposures to the variability in future interest payments and receipts due to the movement of benchmark interest rates on forecast transactions and on financial assets and financial liabilities. This variability in cash flows is hedged by interest rate swaps, which convert variable cash flows into fixed. For these cash flow hedge relationships, the hedged items are actual and forecast variable interest rate cash flows arising from financial assets and financial liabilities with interest rates linked to the relevant benchmark rates, most notably LIBOR, EURIBOR, SONIA and the Bank of England Official Bank Rate. The variability in cash flows due to movements in the relevant benchmark rate is hedged; this risk component is identified using the risk management systems of NatWest Group and encompasses the majority of cash flow variability risk. Fair value hedges of interest rate risk involve interest rate swaps transforming the fixed interest rate risk in financial assets and financial liabilities to floating. The hedged risk is the risk of changes in the hedged item’s fair value attributable to changes in the benchmark interest rate risk component of the hedged item. The significant benchmarks identified as risk components are LIBOR, EURIBOR and SONIA. These risk components are identified using the risk management systems of NatWest Group and encompass the majority of the hedged item’s fair value risk. NatWest Group hedges the exchange rate risk of its net investment in foreign currency denominated operations with currency borrowings and forward foreign exchange contracts. NatWest Group reviews the value of the investments’ net assets, executing hedges where appropriate to reduce the sensitivity of capital ratios to foreign exchange rate movement. Hedge accounting relationships will be designated where required. Exchange rate risk also arises in NatWest Group where payments are denominated in currencies other than the functional currency. Residual risk positions are hedged with forward foreign exchange contracts, fixing the exchange rate the payments will be settled in. The derivatives are documented as cash flow hedges. For all cash flow hedging and fair value hedge relationships, and net investment hedging, NatWest Group determines that there is an adequate level of offsetting between the hedged item and hedging instrument at inception and on an ongoing basis. This is achieved by comparing movements in the fair value of the expected highly probable forecast interest cash flows/fair value of the hedged item attributable to the hedged risk with movements in the fair value of the expected changes in cash flows from the hedging interest rate swap. Hedge effectiveness is assessed on a cumulative basis over a time period management determines to be appropriate. NatWest Group uses either the actual ratio between the hedged item and hedging instrument(s) or one that minimises hedge ineffectiveness to establish the hedge ratio for hedge accounting. Hedge ineffectiveness is measured and recognised in the income statement as it arises. IBOR reform - NatWest Group in the year continued to apply, for relationships directly affected by interest rate benchmark reform, Interest Rate Benchmark Reform Amendments to IAS 39 and IFRS 7 issued September 2019 (“Phase 1 relief”) and Interest Rate Benchmark Reform – Phase 2 Amendments to IAS 39 and IFRS 7 issued August 2020 (“Phase 2 relief”). Significant transitions in the year were the GBP, JPY and CHF derivatives subject to cash flow and fair value hedging transitioned as part of the LCH ‘big bang’ conversion in December 2021. The swaps were restructured to reprice off the appropriate risk free rate from the next repricing date post 31 December 2021 plus a spread adjustment. All impacted hedge accounting relationships had their designations updated to reflect this transition. USD cash flow and fair value hedges of interest rate risk that mature post 30 June 2023 continue to be directly affected by interest rate benchmark reform. 14 Derivatives continued Included in the table below are derivatives held for hedging purposes as follows: 2021 2020 Changes in fair Changes in fair value used for value used for Notional Assets Liabilities hedge ineffectiveness (1) Notional Assets Liabilities hedge ineffectiveness (1) £bn £m £m £m £bn £m £m £m Fair value hedging Interest rate contracts 65.6 1,176 2,057 897 65.5 1,878 3,844 (875) Cash flow hedging Interest rate contracts 133.1 952 1,149 (931) 128.8 2,035 1,210 217 Exchange rate contracts 7.3 30 109 27 10.8 37 116 (55) Net investment hedging Exchange rate contracts 0.5 11 1 7 0.2 — 9 11 206.5 2,169 3,316 — 205.3 3,950 5,179 (702) IFRS netting/Clearing house settlements (2,125) (3,196) (3,857) (5,049) 44 120 93 130 (1) The change in fair value used for hedge ineffectiveness includes instruments that were decrecognised in the year. The notional of hedging instruments affected by interest rate benchmark reform is as follows: 2021 2020 £bn £bn Fair value hedging EURIBOR (1) — 13.6 GBP LIBOR — 11.2 USD LIBOR (2) 20.2 26.6 Other currency LIBOR — 1.1 Cash flow hedging EURIBOR (1) — 5.2 GBP LIBOR — 51.7 SOFR (3) 0.2 — USD LIBOR (2) 3.1 2.7 (1) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for EURIBOR has ended. (2) In 2021 the FCA declared that USD LIBOR will be non-representative post 30 June 2023; at the time of preparing the 2020 disclosures this date was expected to be 31 December 2021. (3) Hedge relationships subject to reform are those where either the hedged item or the hedging instrument is subject to the IBOR reform. (4) Notional of £1 billion cross currency derivative contracts in cash flow hedge relationships will convert to repricing off the relevant risk-free rate at the first repricing date post cessation. 14 Derivatives continued The following table shows the period in which the notional of hedging contract ends: 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 20+ years Total 2021 £bn £bn £bn £bn £bn £bn £bn £bn Fair value hedging Hedging assets - interest rate risk 0.9 2.5 5.5 5.7 6.2 4.9 4.5 30.2 Hedging liabilities - interest rate risk 1.1 4.2 11.8 9.3 8.4 0.6 0.0 35.4 Cash flow hedging Hedging assets Interest rate risk 5.4 8.1 14.3 24.5 11.4 — — 63.7 Average fixed interest rate (%) 1.40 1.19 1.35 0.65 0.82 — — 0.97 Hedging liabilities Interest rate risk 8.8 21.1 33.0 3.3 2.5 0.7 — 69.4 Average fixed interest rate (%) 0.50 0.24 0.41 0.47 1.01 4.55 — 0.44 Hedging assets Exchange rate risk — — — — — — — — Hedging liabilities Exchange rate risk 0.1 2.4 3.5 1.3 — — — 7.3 Net investment hedging Exchange rate risk 0.5 — — — — — — 0.5 2020 Fair value hedging Hedging assets - interest rate risk 1.2 2.3 6.3 7.4 8.9 5.1 4.2 35.4 Hedging liabilities - interest rate risk — 0.6 10.1 11.6 7.1 0.5 0.2 30.1 Cash flow hedging Hedging assets Interest rate risk 0.7 10.5 19.3 13.9 10.5 0.1 — 55.0 Average fixed interest rate (%) 1.28 1.22 1.51 1.06 0.92 3.12 — 1.23 Hedging liabilities Interest rate risk 1.6 28.9 36.8 3.4 2.4 0.7 — 73.8 Average fixed interest rate (%) 1.14 0.78 0.37 1.25 0.65 4.55 — 0.64 Hedging assets Exchange rate risk — — 0.1 — — — — 0.1 Hedging liabilities Exchange rate risk — 3.3 5.3 1.0 1.1 — — 10.7 Net investment hedging Exchange rate risk 0.1 0.1 — — — — — 0.2 For cash flow hedging of exchange rate risk, the average foreign exchange rates applicable across the relationships were as below for the main currencies hedged. 2021 2020 INR/GBP 106.58 95.29 USD/GBP 1.38 1.36 CHF/GBP 1.25 n/a JPY/GBP 132.93 132.93 JPY/EUR n/a 120.21 CNH/GBP 8.74 n/a For net investment hedging of exchange rate risk, the average foreign exchange rates applicable were as below for the main currencies hedged. 2021 2020 SEK/GBP 11.74 11.15 DKK/GBP 8.85 8.28 NOK/GBP 12.12 12.73 AED/USD 3.67 n/a USD/GBP 1.32 n/a 14 Derivatives continued The table below analyses assets and liabilities subject to hedging derivatives. Impact on Changes in fair hedged items Carrying value Impact on value used as ceased to be of hedged hedged items a basis to adjusted for assets and included in determine hedging liabilities carrying value ineffectiveness (1) gains or losses 2021 £m £m £m £m Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,603 701 (478) 69 Other financial assets - securities 30,882 518 (1,576) — Total 37,485 1,219 (2,054) 69 Other financial liabilities - debt securities in issue 34,371 454 953 — Subordinated liabilities 6,235 (9) 255 — Total 40,606 445 1,208 — Cash flow hedging - interest rate Loans to banks and customers - amortised cost 63,025 1,984 Other financial assets - securities 714 26 Total 63,739 2,010 Cash flow hedging - interest rate Bank and customer deposits 68,383 (1,084) Other financial liabilities - debt securities in issue 1,006 (21) Total 69,389 (1,105) Cash flow hedging - exchange rate Loans to banks and customer - amortised cost 21 — Other financial assets - securities 2 — Total 23 — Other financial liabilities - debt securities in issue 6,337 (5) Subordinated liabilities 742 (12) Other 200 (10) Total 7,279 (27) 2020 Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,858 1,228 323 77 Other financial assets - securities 35,754 2,268 1,568 — Total 42,612 3,496 1,891 77 Other financial liabilities - debt securities in issue 29,317 1,336 (746) — Subordinated liabilities 6,441 293 (268) 10 Total 35,758 1,629 (1,014) 10 Cash flow hedging - interest rate Loans to banks and customers - amortised cost 53,335 (601) Other financial assets - securities 1,550 (16) Total 54,885 (617) Cash flow hedging - interest rate Bank and customer deposits 72,880 409 Other financial liabilities - debt securities in issue 1,014 13 Total 73,894 422 Cash flow hedging - exchange rate Loans to banks and customer - amortised cost 112 1 Other financial assets - securities 30 — Total 142 1 Cash flow hedging - exchange rate Other financial liabilities - debt securities in issue 6,272 20 Subordinated liabilities 4,194 36 Other 152 (2) Total 10,618 54 (1) The change in fair value used for hedge ineffectiveness includes instruments that were derecognised in the year. 14 Derivatives continued The following risk exposures will be affected by interest rate benchmark reform (notional, hedged adjustment): 2021 2020 Hedged Hedged Notional adjustment Notional adjustment £bn £m £bn £m Fair value hedging EURIBOR (1) — — 15.1 27 GBP LIBOR — — 11.4 1,178 USD LIBOR (2) 21.8 7 28.1 (427) Other currency LIBOR — — 1.1 1 Cash flow hedging EURIBOR (1) — — 4.1 (76) GBP LIBOR — — 10.5 (473) USD LIBOR (2) 3.3 21 2.7 (61) BOE Base rate (3) — — 40.7 (156) ECB REFI rate (3) — — 1.2 — SONIA (3) — — 0.6 4 (1) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for EURIBOR has ended. (2) In 2021 the FCA declared that USD LIBOR will be non-representative post 30 June 2023; at the time of preparing the 2020 disclosures this date was expected to be 31 December 2021. (3) Hedge relationships subject to reform are those where either the hedged item or the hedging instrument is subject to the IBOR reform. (4) Notional of £6.5 billion GBP LIBOR hedged items in cash flow hedge relationships will convert to repricing off SONIA at the first repricing date post cessation. 14 Derivatives continued The following table shows an analysis of the pre-tax cash flow hedge reserve and foreign exchange hedge reserve. 2021 2020 Foreign Foreign Cash flow exchange Cash flow exchange hedge reserve hedge reserve hedge reserve hedge reserve £m £m £m £m Continuing Interest rate risk (295) — 695 — Foreign exchange risk 23 53 22 (13) De-designated Interest rate risk (297) — (424) — Foreign exchange risk 10 (759) (1) (775) Total (559) (706) 292 (788) 2021 2020 Foreign Foreign Cash flow exchange hedge Cash flow exchange hedge hedge reserve reserve hedge reserve reserve £m £m £m £m Amount recognised in equity Interest rate risk (700) — 318 — Foreign exchange risk 13 88 3 (57) Total (687) 88 321 (57) Amount transferred from equity to earnings Interest rate risk to net interest income (181) — (19) — Interest rate risk to non-interest income (1) 20 — — — Foreign exchange risk to net interest income (4) 2 (35) — Foreign exchange risk to non-interest income 1 (2) — 2 Foreign exchange risk to operating expenses 3 — 4 — Total (161) — (50) 2 (1) There was £20 million reclassified from the cash flow reserve to earnings due to forecasted cash flows that are no longer expected to occur. Hedge ineffectiveness recognised in other operating income comprises: 2021 2020 2019 £m £m £m Fair value hedging (Losses)/gains on hedged items attributable to the hedged risk (846) 877 610 Gains/(losses) on the hedging instruments 897 (875) (585) Fair value hedging ineffectiveness 51 2 25 Cash flow hedging Interest rate risk (26) 22 23 Cash flow hedging ineffectiveness (26) 22 23 Total 25 24 48 The main sources of ineffectiveness for interest rate risk hedge accounting relationships are: - The effect of the counterparty credit risk on the fair value of the interest rate swap which is not reflected in the fair value of the hedged item attributable to the change in interest rate (fair value hedge). - Differences in the repricing basis between the hedging instrument and hedged cash flows (cash flow hedge); and Upfront present values on the hedging derivatives where hedge accounting relationships have been designated after the trade date (cash flow hedge and fair value hedge). |
Loan impairment provisions
Loan impairment provisions | 12 Months Ended |
Dec. 31, 2021 | |
Loan impairment provisions | |
Loan impairment provisions | 15 Loan impairment provisions Loan exposure and impairment metrics There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, known as expected credit losses (ECL). The calculation of ECL considers historic, current and forward-looking information to determine the amount we do not expect to recover. ECL is recognised on current and potential exposures, and contingent liabilities. For accounting policy information see Accounting policies note 11. Further disclosures on credit risk and information on ECL methodology are shown from page 181 of the NatWest Group 2021 Annual Report and Form 20-F Information included as Exhibit 15.2 to this Form 20-F. The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit losses framework. 2021 2020 £m £m Loans - amortised cost Stage 1 330,824 287,124 Stage 2 33,981 78,917 Stage 3 5,022 6,358 Of which: individual 1,215 2,292 Of which: collective 3,807 4,066 369,827 372,399 ECL provisions (1) - Stage 1 302 519 - Stage 2 1,478 3,081 - Stage 3 2,026 2,586 Of which: individual 363 831 Of which: collective 1,663 1,755 3,806 6,186 ECL provision coverage (2,3) - Stage 1 (%) 0.09 0.18 - Stage 2 (%) 4.35 3.90 - Stage 3 (%) 40.34 40.67 1.03 1.66 Continuing operations Impairment (releases)/losses ECL (release)/charge (3,4) (1,278) 3,131 Stage 1 (1,377) (89) Stage 2 (187) 2,601 Stage 3 286 619 Of which: individual 20 194 Of which: collective 266 425 Amounts written off 876 937 Of which: individual 455 191 Of which: collective 421 746 (1) Includes £5 million (2020 - £6 million) related to assets classified as FVOCI. (2) ECL provisions coverage is calculated as total ECL provisions divided by third party loans – amortised cost and FVOCI. (3) Includes a £3 million charge (2020 - £12 million charge) related to other financial assets, of which £2 million release (2020 - £2 million charge) related to assets classified as FVOCI; and £34 million release (2020 - £28 million charge) related to contingent liabilities. (4) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (5) The table shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to Financial instruments within the scope of the IFRS 9 ECL framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £176.3 billion (2020 - £122.8 billion) and debt securities of £44.9 billion (2020 – £53.8 billion). 15 Loan impairment provisions continued Credit risk enhancement and mitigation For information on Credit risk enhancement and mitigation held as security, refer to Risk and capital management – Credit risk enhancement and mitigation section. Critical accounting policy: Loan impairment provisions Accounting policies note 11 sets out how the expected loss approach is applied. At 31 December 2021, customer loan impairment provisions amounted to £3,806 million (2020 - £6,186 million). A loan is impaired when there is objective evidence that the cash flows 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, significant 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 flows at the loan's original effective interest rate. The measurement of credit impairment under the IFRS expected loss model depends on management's 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 judgments that are potentially significant to the estimate of impairment losses. For further information and sensitivity analysis, refer to Risk and capital management - Measurement uncertainty and ECL sensitivity analysis section. IFRS 9 ECL model design principles Refer to Credit risk – IFRS 9 ECL model design principles 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 - Economic loss drivers - Probability weightings of scenarios section for further details . |
Other financial assets
Other financial assets | 12 Months Ended |
Dec. 31, 2021 | |
Other financial assets | |
Other financial assets | 16 Other financial assets Other financial assets consist of debt securities, equity shares and loans that are not held for trading. Balances consist of local and central government securities, a component part of NatWest Group’s liquidity portfolio. For accounting policy information see Accounting policy 10. Debt securities Central and local government Other Equity Other UK US Other debt Total shares loans Total 2021 £m £m £m £m £m £m £m £m Mandatory fair value through profit or loss — — — 6 6 13 298 317 Fair value through other comprehensive income (1) 11,938 10,086 5,604 9,058 36,686 312 268 37,266 Amortised cost 3,821 156 81 4,504 8,562 — — 8,562 Total 15,759 10,242 5,685 13,568 45,254 325 566 46,145 2020 Mandatory fair value through profit or loss — — — 88 88 14 338 440 Fair value through other comprehensive income (1) 17,458 11,742 6,802 8,591 44,593 294 15 44,902 Amortised cost 4,997 235 116 4,458 9,806 — — 9,806 Total 22,455 11,977 6,918 13,137 54,487 308 353 55,148 (1) Upon initial recognition, the Group occasionally irrevocably designates some of its equity investments as equity instruments at FVOCI when they meet the definition of equity under IAS 32 Financial instruments: presentation, are not held for trading or they are held for strategic purposes. Such classification 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 profit 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. Equity shares disposed during 2020 included SABB (£383 million), VISA Inc. (£186 million), and Vocalink (£16 million). Dividends on FVOCI equity shares include £4 million (2020: £5 million) in relation to the equity holding in OTC Derivative Limited and £1 million (2020: £2 million) for VISA Inc. Dividends received in relation to equity shares disposed during the year were nil (2020: £15 million for NWG's equity holding in SABB). |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2021 | |
Intangible assets | |
Intangible assets | 17 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 reflects the usage of the asset and impairment is a reduction in value arising from specific events identified during the year. For accounting policy information see Accounting policies notes 5 and 6. 2021 2020 Goodwill Other (1) Total Goodwill Other (1) Total Cost £m £m £m £m £m £m At 1 January 9,939 2,592 12,531 9,980 2,293 12,273 Currency translation and other adjustments — 29 29 — (1) (1) Additions — 479 479 — 348 348 Disposals and write-off of fully amortised assets — (50) (50) (41) (48) (89) At 31 December 9,939 3,050 12,989 9,939 2,592 12,531 Accumulated amortisation and impairment At 1 January 4,332 1,544 5,876 4,373 1,278 5,651 Currency translation and other adjustments — 31 31 — 1 1 Disposals and write-off of fully amortised assets — (28) (28) (41) (26) (67) Impairment of intangible assets 85 2 87 — 9 9 Amortisation charge for the year — 300 300 — 282 282 At 31 December 4,417 1,849 6,266 4,332 1,544 5,876 Net book value at 31 December 5,522 1,201 6,723 5,607 1,048 6,655 (1) Principally internally generated software. Intangible assets and goodwill are reviewed for indicators of impairment. In 2021 £85 million of goodwill was impaired due to a reduction in the recoverable value. NatWest Group’s goodwill acquired in business combinations analysed by reportable segment is in Note 4 Segmental analysis. It is reviewed annually at 31 December for impairment. In 2021 goodwill in the Retail segment was impaired by £85 million. No other impairment was indicated at 31 December 2021 or 2020. Impairment testing involves the comparison of the carrying value of each cash-generating unit (CGU) with its recoverable amount. The carrying values of the segments reflect the equity allocations made by management, which are consistent with NatWest Group’s 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 flows from the CGU. The recoverable amounts for all CGUs at 31 December 2021 were based on value in use, using management's latest five-year revenue and cost forecasts. These are discounted cash flow projections over five 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. The pre-tax risk discount rates are based on those observed to be applied to businesses regarded as peers of the CGUs. Critical accounting policy: Goodwill Critical estimates Impairment testing involves a number of judgments. The key judgments are the five-year cash flow forecast, the long-term growth rate used to derive the terminal value, and the discount rate. Future value in use is primarily affected by changes in profitability and changes in discount rate. Adverse changes could lead to value in use falling below carrying value. The most likely cause for this would be a failure to meet budgets, including cost targets, or external downgrades in the UK economy. 17 Intangible assets continued The impact of reasonably possible changes to the more significant variables in the value in use calculations is presented below. This reflects the sensitivity of the VIU to each key assumption on its own. It is possible that more than one change may occur at the same time. Consequential impact of 1% Consequential impact of 5% Assumptions Recoverable adverse movement adverse movement Terminal Pre-tax Cost: amount exceeded Discount Terminal Forecast Forecast Goodwill growth rate discount rate income ratio (1) carrying value rate growth rate Income cost 31 December 2021 £bn % % % £bn £bn £bn £bn £bn Retail Banking 2.6 1.6 13.9 51.6 6.8 (1.8) (0.8) (2.1) (1.0) Commercial Banking 2.6 1.6 13.9 52.3 6.3 (1.9) (0.8) (2.0) (1.0) RBS International 0.3 1.6 12.1 37.0 2.6 (0.6) (0.3) (0.4) (0.1) 31 December 2020 Retail Banking 2.7 1.6 13.7 48.3 5.9 (1.8) (0.8) (2.0) (0.9) Commercial Banking 2.6 1.6 13.7 53.7 1.5 (1.5) (0.5) (1.8) (0.9) RBS International 0.3 1.6 12.1 42.7 1.1 (0.4) (0.2) (0.3) (0.1) (1) Average Cost:income ratio % over the 5 -year forecast period The following table gives the percentage change in key assumptions that would reduce the headroom of CGUs to nil. 2021 2020 Terminal Pre-tax Forecast Forecast Terminal Pre-tax Forecast Forecast growth rate discount rate income cost growth rate discount rate income cost Change in key assumptions to reduce headroom to nil (%) % % % % % % % % Retail Banking (139.2) 8.1 (16.1) 32.7 (25.4) 6.2 (14.6) 33.9 Commercial Banking (47.0) 6.6 (15.7) 32.8 (4.0) 1.3 (4.1) 8.2 RBS International (85.2) 10.3 (30.3) 87.2 (10.8) 4.4 (18.6) 52.8 |
Other assets
Other assets | 12 Months Ended |
Dec. 31, 2021 | |
Other assets | |
Other assets | 18 Other assets Other assets are not financial assets and reflect a grouping of assets that are not large enough to present separately on the balance sheet. 2021 2020 £m £m Interests in associates (1) 716 449 Property, plant and equipment (2) 4,230 4,418 Pension schemes in net surplus (Note 5) 602 723 Prepayments 360 328 Accrued income 248 216 Tax recoverable 190 192 Deferred tax (Note 7) 1,195 901 Acceptances 225 272 Other 476 391 Other assets 8,242 7,890 (1) Includes interest in Business Growth Fund £700 million (2020 - £442 million). (2) The estimated useful lives of NatWest Group's 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 . |
Other financial liabilities
Other financial liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Other financial liabilities | |
Other financial liabilities | 19 Other financial liabilities Other financial liabilities consist of customer deposits designated at fair value and debt securities in issue classified as designated at fair value and amortised cost. For accounting policy information see Accounting policies notes 10 and 14. 2021 2020 £m £m Customer deposits - designated as at fair value through profit or loss 568 796 Debt securities in issue - designated as at fair value through profit or loss 1,103 1,607 - amortised cost 47,655 43,408 Total 49,326 45,811 |
Subordinated liabilities
Subordinated liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Subordinated liabilities | |
Subordinated liabilities | 20 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. The subordinated liabilities presented in the note are classified as designated at fair value and amortised cost. For accounting policy information see Accounting policies notes 10 and 14. 2021 2020 £m £m Dated loan capital 8,051 8,530 Undated loan capital 259 1,287 Preference shares 119 145 8,429 9,962 Certain preference shares issued by the company are classified as liabilities; these securities remain subject to the capital maintenance rules of the Companies Act 2006. Capital 2021 2020 New issue treatment £m £m NatWest Group plc £1,000 million 3.622% dated notes 2030 (callable between May 2025 to August 2025) Tier 2 — 996 US$850 million 3.032% dated notes 2035 (callable November 2030) Tier 2 — 634 £1000 million 2.105% dated notes 2031 (callable between August 2026 to November 2026) Tier 2 996 — €750 million 1.043% dated notes 2032 (callable between June 2027 to September 2027) Tier 2 638 — 1,634 1,630 Redemptions NatWest Group plc US$2,250 million 6.13% dated notes 2022 (partial redemption) Tier 2 226 499 US$1,000 million 6.10% dated notes 2023 (partial redemption) Tier 2 57 358 US$2,000 million 7.5% dated notes 2020 Tier 2 — 1,528 US$762 million 7.648% undated notes (partial redemption) Ineligible 45 497 US$106 million floating rate undated notes (callable on any interest payment date) Ineligible 77 — US$2,650 million 8.625% dated notes 2021 (callable August 2021) (1) Tier 2 1,914 — US$2,250 million 5.125% dated notes 2024 (partial redemption) Tier 2 729 — US$2,000 million 6% dated notes 2023 (partial redemption) Tier 2 436 — 3,484 2,882 NatWest Markets Plc US$125.6 million floating rate notes 2020 Tier 2 — 97 €145.6 million floating rate dated notes 2023 (partial redemption) Tier 2 20 — £31 million 7.38% notes (partial redemption) Tier 2 29 — £19 million 5.63% notes (partial redemption) Tier 2 20 — 69 97 National Westminister Bank Plc £300 million 6.5% subordinated notes 2021 (not callable) Tier 2 300 — €10 million floating rate notes (callable quarterly) Upper Tier 2 9 — €178 million floating rate notes (callable quarterly) Upper Tier 2 152 — US$193 million floating rate notes (callable semi-annually) Upper Tier 2 138 — US$229 million floating rate notes (callable semi-annually) Upper Tier 2 167 — US$285 million floating rate notes (callable semi-annually) Upper Tier 2 201 — £35 million 11.5% notes (callable December 2022) (partial redemption) Upper Tier 2 3 — £140 million 9% cumulative preference shares of £1 (not callable) Tier 1 24 — 994 — NWM N.V. and subsidiaries US$650 million 6.425% dated notes 2043 (partial redemption) Ineligible 73 187 €15 million 6.00% notes 2020 Tier 2 — 11 73 198 (1) In July 2021, paid in equity reclassified to liabilities as the result of a call in August 2021 of US$ 2.65 billion AT1 capital notes which were subsequently redeemed in August 2021. |
Other liabilities
Other liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Other liabilities. | |
Other liabilities | 21 Other liabilities Other liabilities are amounts due to third parties that are not financial liabilities including lease liabilities, amounts due for goods and services that have been received but not invoiced, tax due to HMRC, and retirement benefit 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. 2021 2020 Other liabilities £m £m Lease liabilities (Note 23) 1,263 1,698 Provisions for liabilities and charges 1,268 1,852 Retirement benefit liabilities (Note 5) 114 121 Accruals 1,508 990 Deferred income 319 361 Current tax 12 63 Deferred tax (Note 7) 359 291 Acceptances 225 272 Other liabilities (1) 729 740 5,797 6,388 (1) Other liabilities include liabilities of disposal groups of £5 million (2020: nil ). See Note 8 for further information. Litigation and Financial Customer other commitments redress (1) regulatory (4) Property (3) and guarantees Other (2) Total Provisions for liabilities and charges £m £m £m £m £m £m At 1 January 2021 749 365 271 178 289 1,852 Expected credit loss impairment release — — — (83) — (83) Currency translation and other movements (5) — 2 (2) (7) (12) Charge to income statements 173 307 113 — 196 789 Release to income statement (25) (86) (118) — (82) (311) Provisions utilised (418) (309) (37) — (203) (967) At 31 December 2021 474 277 231 93 193 1,268 (1) Includes payment protection insurance provision which reflects the estimated cost of PPI redress attributable to claims prior to the Financial Conduct Authority (FCA) complaint deadline of 29 August 2019. All pre-deadline complaints have been processed which removes complaint volume estimation uncertainty from the provision estimate. NatWest Group continues to conclude remaining bank-identified closure work and conclude cases with the Financial Ombudsmen Service. (2) Other materially comprises provisions relating to restructuring costs. (3) Property provision materially includes dilapidation provisions. Release in property provision includes the effect of purchase of freeholds for properties where the group was the primary leaseholder. (4) Majority of charge in the year and utilisation of litigation provisions relates to FCA investigation into money laundering. 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 outflow of economic benefit is probable and the outflow can be estimated reliably. Any difference between the final outcome and the amounts provided will affect the reported results in the period when the matter is resolved. For accounting policy information see Accounting policies note 8. Critical accounting policy: Provisions for liabilities The key judgment is involved in determining whether a present obligation exists. There is often a high degree of uncertainty and judgment is based on the specific facts and circumstances relating to individual events in determining whether there is a present obligation. Judgment is also involved in estimation of the probability, timing and amount of any outflows. Where NatWest Group can look to another party such as an insurer to pay some or all of the expenditure required to settle a provision, any reimbursement is recognised when, and only when, it is virtually certain that it will be received. Estimates - - Customer redress: Provisions reflect the estimated cost of redress attributable to claims where it is determined that a present obligation exists. - Litigation and other regulatory: NatWest Group is engaged in various legal proceedings, both in the UK and in overseas jurisdictions, including the US. For further information in relation to legal proceedings and discussion of the associated uncertainties, refer to Note 27. - Property: This includes provision for contractual costs such as rates associated with vacant properties. - Other provisions: These materially comprise provisions for onerous contracts and restructuring costs. Onerous contract provisions comprise an estimate of the costs involved in fulfilling the terms and conditions of contracts net of any expected benefits to be received. This includes provision for contractual costs such as rates associated with vacant properties. Redundancy and restructuring provisions comprise the estimated cost of restructuring, including redundancy costs where an obligation exists. Background information for all material provisions is given in Note 27. |
Share capital and other equity
Share capital and other equity | 12 Months Ended |
Dec. 31, 2021 | |
Share capital and other equity | |
Share capital and other equity | 22 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 includes paid-in equity, merger reserves, capital redemption reserve and own shares held. For accounting policy information see Accounting policies note 14. Number of shares 2021 2020 2021 2020 Allotted, called up and fully paid £m £m 000s 000s Ordinary shares of £1 11,468 12,129 11,467,982 12,129,165 Cumulative preference shares of £1 1 1 483 900 Non-cumulative preference shares of US$0.01 (1) — — 10 10 (1) No shares were redeemed in 2021 or 2020. The company announced on 1 February 2022 that it had given notice to holders of the redemption on 31 March 2022 of the Series U Non-cumulative dollar preference shares. Number of Movement in allotted, called up and fully paid ordinary shares £m shares 000s At 1 January 2020 12,094 12,093,909 Shares issued 35 35,256 At 1 January 2021 12,129 12,129,165 Shares issued 38 37,584 Shares redeemed (699) (698,767) At 31 December 2021 11,468 11,467,982 Ordinary shares There is no authorised share capital under the company’s constitution. At 31 December 2021, the directors had authority granted at the 2021 Annual General Meeting to issue up to £608,328,288 nominal of ordinary shares other than by pre-emption to existing shareholders. This figure was reduced to £578,791,771 to reflect the reduction in issued share capital resulting from the off-market buyback announced on 19 March 2021. On 6 February 2019 the company held a General Meeting and shareholders approved a special resolution to give the company authority to make off-market purchases of its ordinary shares from HM Treasury (or its nominee) at such times as the directors may determine is appropriate. Full details of the proposal are set out in the Circular and Notice of General Meeting. This authority was renewed at the Annual General Meeting in 2021 and shareholders will be asked to renew the authority at the Annual General Meeting in 2022. The company utilised the authority it obtained at the 2020 AGM to make an off-market purchase of 590,730,325 ordinary shares (nominal value £590,730,325) in the company from HMT on 19 March 2021, at a price of 190.50p per ordinary share for the total consideration of £1,125,341,269, representing 4.86% of the company's issued ordinary share capital. The company cancelled 390,730,325 of the purchased ordinary shares and held the remaining 200,000,000 ordinary shares in treasury. The company has used a total of 19,062,290 treasury shares to satisfy the exercise of options and the vesting of share awards under the employee share plans. At the Annual General Meeting in 2021 shareholders authorised the company to make market purchases of up to 1,216,656,575 ordinary shares in the company. The directors utilised the authority obtained at the 2021 AGM to conduct a share buyback programme (the Programme) of up to £750 million, as announced to the market on 30 July 2021. The Programme’s purpose is to reduce the ordinary share capital of NatWest Group. Taking into account the reduction in issued ordinary share capital which occurred as a result of the off-market buyback announced on 19 March 2021, the maximum number of ordinary shares that could be purchased by the company under the Programme was 1,157,583,542. The Programme commenced on 2 August 2021 and, as at 31 December 2021, 310,802,416 ordinary shares (nominal value £310,802,416) had been purchased by the company at an average purchase price of 217.5796p per ordinary share for the total consideration of £676,242,656. A further 29,735,044 ordinary shares (nominal value £29,735,044) were purchased by the company from 1 January to 18 January 2022 at an average purchase price of 245.5264p per ordinary share for the total consideration of £73,007,375. All of the purchased ordinary shares were cancelled, representing 2.93% of the company's issued ordinary share capital. Shareholders will be asked to renew the authorisation at the Annual General Meeting in 2022. In 2021, the company issued 38 million ordinary shares of £1 each in connection with employee share plans. In 2021 NatWest Group paid an interim dividend of £347 million, or 3.0p per ordinary share (2020 - nil). The company has announced that the directors have recommended a final dividend of £844.3 million, or 7.5p per ordinary share (2020 - £364 million, or 3p) subject to shareholder approval at the Annual General Meeting on 28 April 2022. If approved, payment will be made on 4 May 2022 to shareholders on the register at the close of business on 18 March 2022. The ex-dividend date will be 17 March 2022. Cumulative preference shares At the 2021 Annual General Meeting, shareholders authorised the company to make an off-market purchase of preference shares in the company. The company announced on 15 December 2021 that it had utilised this authority to purchase 157,546 5.5% cumulative preference shares (nominal value £157,546), representing 39.39% of the share class, at a purchase price of 102% for the total consideration of £160,697 and 259,314 11.00% cumulative preference shares (nominal value £259,314), representing 51.86% of the share class, at a purchase price of 155% for the total consideration of £401,937. The company cancelled all of the purchased preference shares. 22 Share capital and other equity continued Non-cumulative preference shares Non-cumulative preference shares entitle their holders to periodic non-cumulative cash dividends at specified fixed rates for each series payable out of distributable profits of the company. The company may redeem some or all of the non-cumulative preference shares from time to time at the rates detailed in the table below plus dividends otherwise payable for the then current dividend period to the date of redemption. Number of shares Redemption Redemption Non-cumulative preference shares classified as equity in issue Interest rate date on or after price per share Shares of US$0.01 - Series U 10,130 Floating 29 September 2017 US$100,000 (1) Preference shares where distributions are discretionary are classified as equity. On a winding-up or liquidation of the company, the holders of the non-cumulative preference shares are entitled to receive, out of any surplus assets available for distribution to the company’s shareholders (after payment of arrears of dividends on the cumulative preference shares up to the date of repayment) pari passu with the cumulative preference shares and all other shares of the company ranking pari passu with the non-cumulative preference shares as regards participation in the surplus assets of the company, a liquidation distribution per share equal to the applicable redemption price detailed in the table above, together with an amount equal to dividends for the then current dividend period accrued to the date of payment, before any distribution or payment may be made to holders of the ordinary shares as regards participation in the surplus assets of the company. Except as described above, the holders of the non-cumulative preference shares have no right to participate in the surplus assets of the company. Holders of the non-cumulative preference shares are not entitled to receive notice of or attend general meetings of the company except if any resolution is proposed for adoption by the shareholders of the company to vary or abrogate any of the rights attaching to the non-cumulative preference shares or proposing the winding-up or liquidation of the company. In any such case, they are entitled to receive notice of and to attend the general meeting of shareholders at which such resolution is to be proposed and are entitled to speak and vote on such resolution (but not on any other resolution). In addition, in the event that, prior to any general meeting of Paid-in equity - comprises equity instruments issued by the company other than those legally constituted as shares. Additional Tier 1 instruments issued by NatWest Group plc having the legal form of debt are classified as equity under IFRS. The coupons on these instruments are non-cumulative and payable at the company’s discretion. In the event NatWest Group’s CET1 ratio falls below 7% any outstanding instruments will be converted into ordinary shares at a fixed price Capital recognised for regulatory purposes cannot be redeemed without Prudential Regulation Authority consent. This includes ordinary shares, preference shares and additional Tier 1 instruments. 2021 2020 2019 £m £m £m Additional Tier 1 notes US$2.0 billion 7.5% notes callable August 2020 (1) — — 1,277 US$1.15 billion 8% notes callable August 2025 (1) 735 735 735 US$2.65 billion 8.625% notes callable August 2021 (2) — 2,046 2,046 US$1.5 billion 6.000% notes callable December 2025 - June 2026 (3) 1,220 1,220 — GBP£1.0 billion 5.125% notes callable May - November 2027 (4) 998 998 — GBP£0.4 billion – March 2021 issuance (5) 399 — — US$0.75 billion – June 2021 issuance (6) 538 — — 3,890 4,999 4,058 (1) Issued in August 2015. In the event of conversion, converted into ordinary shares at a price of $3.606 nominal per £1 share. (2) Issued in August 2016. In the event of conversion, converted into ordinary shares at a price of $2.284 nominal per £1 share. In July 2021, paid-in equity reclassified to liabilities as the result of a call in August 2021 of US$ 2.65 billion AT1 Capital notes. (3) Issued in June 2020. In the event of conversion, converted into ordinary shares at a price of £1.754 (translated at applicable exchange rate) per £1 share. (4) Issued in November 2020. In the event of conversion, converted into ordinary shares at a price of £1.754 nominal per £1 share. (5) Issued in March 2021. In the event of conversion, converted into ordinary shares at a price of £1.754 nominal per £1 share. (6) Issued in June 2021. In the event of conversion, converted into ordinary shares at a price of £1.754 (translated at applicable exchange rate) per £1 share. 22 Share capital and other equity continued Merger reserve - Capital redemption reserve - Own shares held - As part of the shares bought back from HM Treasury in March 2021, the company transferred 200 million ordinary shares to treasury. The company has used a total of 19,062,290 treasury shares to satisfy the exercise of options and the vesting of share awards under the employee share plans. The balance of ordinary shares held in treasury as at 31 December 2021 was 180,937,710. NatWest Group plc optimises capital efficiency by maintaining reserves in subsidiaries, including regulated entities. Certain preference shares and subordinated debt are also included within regulatory capital. The remittance of reserves to the company or the redemption of shares or subordinated capital by regulated entities may be subject to maintaining the capital resources required by the relevant regulator. UK law prescribes that only the reserves of the company are taken into account for the purpose of making distributions and in determining permissible applications of the share premium account. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 23 Leases A lease is a contract or part of a contract whereby the lessor (the legal owner of an asset) conveys to the lessee (the user of the asset) the right to use an asset for an agreed period of time in exchange for a payment or series of payments. This note presents the income, expenses, assets, liabilities and cash flows of NatWest Group in the capacity of both lessee and lessor. Lessee NatWest Group is party to lease contracts as lessee to support its operations. The following table provides information in respect of those lease contracts as lessee. 2021 2020 £m £m Amount recognised in consolidated income statement Interest payable (38) (42) Depreciation (1) (167) (209) Rental expenses on short term leases — (1) Income from subleasing right to use assets 4 4 2021 2020 £m £m Amount recognised on balance sheet Right of use assets include property, plant and equipment (2),(3) 733 955 Additions to right of use assets 70 80 Lease liabilities (3),(4) (1,263) (1,698) The total cash outflow for leases is £195 million (2020: £220 million), including payment of principal amount of £164 million (2020: £179 million) which are included in the operating activities in the cash flow statement. (1) Includes impairment of right of use assets of £52 million (2020: £89 million). (2) Includes right of use asset for plant and equipment of £9 million (2020: £8 million) and depreciation of £4 million (2020: £2 million). (3) Includes the effect of the purchase of freeholds for properties where the Group was the primary leaseholder. (4) Contractual cashflows of lease liabilities are shown in Note 12. Lessor Acting as a lessor, NatWest Group provides asset finance to its customers. It purchases plant, equipment and intellectual property, renting them to customers under lease arrangements that, depending on their terms, qualify as either operating or finance leases. 2021 2020 £m £m Amount included in consolidated income statement Finance leases Finance income on the net investment in leases 298 289 Operating leases Lease income 169 168 The following table shows the reconciliation of undiscounted finance lease receivables to net investment in finance leases: 2021 2020 £m £m Amount receivable under finance leases Within 1 year 3,272 3,156 1 to 2 years 2,044 2,231 2 to 3 years 1,443 1,609 3 to 4 years 757 952 4 to 5 years 429 492 After 5 years 1,423 1,688 Lease payments total 9,368 10,128 Unguaranteed residual values 225 232 Future drawdowns (21) (22) Unearned income (891) (1,081) Present value of lease payments 8,681 9,257 Impairments (150) (196) Net investment in finance leases 8,531 9,061 23 Leases continued The following tables show undiscounted lease receivables from operating leases: 2021 2020 £m £m Amount receivable under operating leases Within 1 year 131 143 1 to 2 years 92 112 2 to 3 years 50 79 3 to 4 years 23 34 4 to 5 years 11 14 After 5 years 9 11 Total 316 393 2021 2020 Nature of operating lease assets on the balance sheet £m £m Transportation 282 327 Car and light commercial vehicles 21 28 Other 223 245 526 600 Fair value of investment properties under operating lease are £838 million (2020: £840 million) and had lease income of £59 million (2020: £60 million). The following table shows undiscounted lease receivables from investment properties: 2021 2020 £m £m Amount receivable under investment properties Within 1 year 63 67 1 to 2 years 62 127 2 to 3 years 58 54 3 to 4 years 56 76 4 to 5 years 51 88 After 5 years 304 142 Total 594 554 |
Structured entities
Structured entities | 12 Months Ended |
Dec. 31, 2021 | |
Structured entities | |
Structured entities | 24 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 specific, limited purpose. They do not carry out a business or trade and typically have no employees. They take a variety of legal forms - trusts, partnerships and companies - and fulfil many different functions where these can be a medium for a single transaction or portfolio of similar transactions. SEs are established as investment or funding vehicles, within the NatWest Group and for client transactions. Consolidated structured entities Securitisations In a securitisation, assets, or interests in a pool of assets, are transferred generally to an SE which then issues liabilities to third party investors. The majority of securitisations are supported through liquidity facilities or other credit enhancements. NatWest Group arranges securitisations to facilitate client transactions and undertakes own-asset securitisations to sell or to fund portfolios of financial assets. NatWest Group also acts as an underwriter and depositor in securitisation transactions in both client and proprietary transactions. NatWest Group involvement in client securitisations takes a number of forms. It may: sponsor or administer a securitisation programme; provide liquidity facilities or programme-wide credit enhancement; and purchase securities issued by the vehicle. Other credit risk transfer securitisations NatWest Group also 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 financial guarantee contracts with consolidated SEs. At 31 December 2021, debt securities in issue by such SEs (and held by third parties) were £867 million (2020 - £772 million). The associated loans and mortgages at 31 December 2021 were £7,137 million (2020 - £10,027 million). At 31 December, ECL in relation to non-defaulted assets was reduced by £28 million (2020 - £183 million) as a result of financial 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 financial liabilities. At 31 December 2021, £8,965 million (2020 - £10,758 million) of loans to customers and nil (2020 - £318 million) of debt investments provided security for debt securities in issue and other borrowing of £3,512 million (2020 - £4,105 million). Lending of own issued securities NatWest Group has issued, retained, and lent debt securities under securities lending 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 under such arrangements and does not recognise them. At 31 December 2021, £1,494 million (2020 - £1,893 million) of secured own issued liabilities have been retained and lent under securities lending arrangements. At 31 December 2021, £1,564 million (2020 - £2,029 million) of loans and other debt instruments provided security for secured own issued liabilities that have been retained and lent under securities lending arrangements. Unconsolidated structured entities NatWest Group's interest in unconsolidated structured entities is analysed below. 2021 2020 Asset Asset backed Investment backed Investment securitisation funds and securitisation funds and vehicles others Total vehicles others Total £m £m £m £m £m £m Trading assets and derivatives Trading assets 490 117 607 319 46 365 Derivative assets 251 18 269 441 16 457 Derivative liabilities (170) (1) (171) (319) (21) (340) Total 571 134 705 441 41 482 Non trading assets Loans to customers 1,692 361 2,053 1,400 497 1,897 Other financial assets 3,645 379 4,024 3,892 170 4,062 Total 5,337 740 6,077 5,292 667 5,959 Liquidity facilities/loan commitments 1,403 135 1,538 1,482 204 1,686 Maximum exposure 7,311 1,009 8,320 7,215 912 8,127 |
Asset transfers
Asset transfers | 12 Months Ended |
Dec. 31, 2021 | |
Asset transfers | |
Asset transfers | 25 Asset transfers This note provides an overview of asset transfers which do not qualify for derecognition and therefore continue to be recognised in NatWest Group’s balance sheet. For accounting policy information see Accounting policies note 4. 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. 2021 2020 The following assets have failed derecognition (1) £m £m Trading assets 13,084 20,526 Loans to bank - amortised cost 38 5 Loans to customers - amortised cost 1,837 39 Other financial assets 11,746 11,542 Total 26,705 32,112 (1) Associated liabilities were £24,747 million (2020 - £31,932 million). Assets pledged as collateral NatWest Group pledges collateral with its counterparties in respect of derivative liabilities and bank and stock borrowings. 2021 2020 Assets pledged against liabilities £m £m Trading assets 23,601 28,728 Loans to banks - amortised cost 62 49 Loans to customers - amortised cost 20,108 15,939 Other financial assets (1) 3,624 4,966 Total 47,395 49,682 (1) Includes assets pledged for pension derivatives and stock borrowings. As part of the covered debt programme £8,965 million of loans to customers and other debt instruments (2020 – £11,076 million) have been transferred to bankruptcy remote limited liability partnerships within the NatWest Group to provide collateral for issues of debt securities and other borrowing by the NatWest Group of £3,512 million (2020 – £4,105 million). See Structured Entities Note. Own asset securitisations In own-asset securitisations, the pool of assets held by the SE is either originated by NatWest Group or, in the case of whole loan programmes, purchased from third parties. The table below analyses the asset categories for those own-asset securitisations where the transferred assets continue to be recorded on NatWest Group's balance sheet. 2021 2020 Debt Securities in issue Debt Securities in issue Held by Held by Held by Held by third NatWest third NatWest Assets parties Group (1) Total Assets parties Group (1) Total Asset Type £m £m £m £m £m £m £m £m Mortgages - Rol 1,244 — 1,314 1,314 1,921 243 1,848 2,091 Cash deposits 42 146 1,286 2,067 (1) Debt securities retained by NatWest Group may be pledged with central banks. |
Capital resources
Capital resources | 12 Months Ended |
Dec. 31, 2021 | |
Capital resources | |
Capital resources | 26 Capital resources NatWest Group’s regulatory capital is assessed against minimum requirements that are set out under the Capital Requirements Regulation to determine the strength of its capital base. This note shows a reconciliation of shareholders’ equity to regulatory capital. PRA transitional basis 2021 2020 £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity 41,796 43,860 Preference shares - equity (494) (494) Other equity instruments (3,890) (4,999) 37,412 38,367 Regulatory adjustments and deductions Own credit 21 (1) Defined benefit pension fund adjustment (465) (579) Cash flow hedging reserve 395 (229) Deferred tax assets (761) (760) Prudential valuation adjustments (274) (286) Goodwill and other intangible assets (6,312) (6,182) Foreseeable ordinary dividends (846) (364) Foreseeable charges (825) — Foreseeable pension contributions (365) (266) Adjustment under IFRS 9 transitional arrangements 621 1,747 Other regulatory adjustments (5) — (8,816) (6,920) CET1 capital 28,596 31,447 Additional Tier 1 (AT1) capital Qualifying instruments and related share premium 3,875 4,983 Qualifying instruments and related share premium subject to phase out 571 690 Qualifying instruments issued by subsidiaries and held by third parties subject to phase out — 140 AT1 capital 4,446 5,813 Tier 1 capital 33,042 37,260 Qualifying Tier 2 capital Qualifying instruments and related share premium 4,935 4,882 Qualifying instruments issued by subsidiaries and held by third parties 314 1,191 Other regulatory adjustments 457 400 Tier 2 capital 5,706 6,473 Total regulatory capital 38,748 43,733 It is NatWest Group policy to maintain a strong capital base, to expand it as appropriate and to utilise it efficiently 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 reflect 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’s 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 financial and operating performance. |
Memorandum items
Memorandum items | 12 Months Ended |
Dec. 31, 2021 | |
Memorandum items | |
Memorandum items | 27 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. For accounting policy information see Accounting policies note 8. The amounts shown in the table below are intended only to provide an indication of the volume of business outstanding at 31 December 2021. Although NatWest Group is exposed to credit risk in the event of a customer’s 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. More than More than 1 year but 3 years but Less than less than less than Over 1 year 3 years 5 years 5 years 2021 2020 £m £m £m £m £m £m Guarantees 993 321 195 546 2,055 2,244 Other contingent liabilities 1,005 435 43 521 2,004 2,321 Standby facilities, credit lines and other commitments 60,029 26,775 27,136 7,368 121,308 124,167 Contingent liabilities and commitments 62,027 27,531 27,374 8,435 125,367 128,732 (1) The maturity of contingent liabilities and commitment is based on the expiry of the agreement between NatWest Group and the customer. 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 – NatWest Group gives guarantees on behalf of customers. A financial guarantee represents an irrevocable undertaking that NatWest Group will meet a customer’s specified obligations to 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 specified term, may be unconditionally cancellable or may persist, provided all conditions in the loan facility are satisfied 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 beneficiary against presentation of specified 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. 2021 2020 £m £m Capital expenditure on property, plant and equipment 16 15 Contracts to purchase goods or services 682 729 698 744 (1) Of which due within 1 year: £301 million (2020 - £267 million). 27 Memorandum items continued Trustee and other fiduciary activities In its capacity as trustee or other fiduciary 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 financial statements. NatWest Group earned fee income of £280 million (2020 - £245 million; 2019 - £250 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 financial services firms, pays compensation if a firm 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 firm 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 financial 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 legal proceedings and involved in 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 outflow of economic benefits 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 these 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's 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 a liability can reasonably be estimated for any claim. NatWest Group cannot predict if, how, or when such claims will be resolved or what the eventual settlement, damages, fine, penalty or other relief, if any, may be, particularly for claims 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 claims or regulatory matters, even for those Matters for which NatWest Group believes it has credible defences and should prevail on the merits. The uncertainties inherent in all such Matters affect the amount and timing of any potential outflows for both Matters with respect to which provisions have been established and other contingent liabilities. It is not practicable to provide an aggregate estimate of potential liability for our legal proceedings and regulatory matters as a class of contingent liabilities. The future outflow of resources in respect of any Matter may ultimately prove to be substantially greater than or less than the aggregate provision that NatWest Group has recognised. Where (and as far as) liability cannot be reasonably estimated, no provision has been recognised. NatWest Group expects that in future periods, additional provisions, settlement amounts and customer redress payments will be necessary, in amounts that are expected to be substantial in some instances. Please refer to Note 21 for information on material provisions. Material Matters 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’s litigation and regulatory matters, see the Risk factor relating to legal, regulatory and governmental actions and investigations set out on page 156. Litigation Residential mortgage-backed securities (RMBS) litigation in the US NatWest Group companies continue to defend RMBS-related claims in the US in which the plaintiff, the Federal Deposit Insurance Corporation (FDIC), alleges that certain disclosures made in connection with the relevant offerings of RMBS contained materially false or misleading statements and/or omissions regarding the underwriting standards pursuant to which the mortgage loans underlying the RMBS were issued. In Q4 2021, NWMSI settled RMBS claims by the State of New Mexico for an amount that was covered by an existing provision. In addition, NWMSI previously agreed to settle a purported RMBS class action entitled New Jersey Carpenters Health Fund v. Novastar Mortgage Inc. et al. for US$55.3 million. This was paid into escrow pending court approval of the settlement, which was granted in March 2019, but which remains the subject of an appeal by a class member who does not want to participate in the settlement. 27 Memorandum items continued London Interbank Offered Rate (LIBOR) and other rates litigation NWM Plc and certain other members of NatWest Group, including NatWest Group plc, are defendants in a number of class actions and individual claims pending in the United States District Court for the Southern District of New York (SDNY) with respect to the setting of LIBOR and certain other benchmark interest rates. The complaints 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. Several class actions relating to USD LIBOR, as well as more than two Litigation and regulatory matters In the same decision, the appellate court affirmed the SDNY’s prior decision that plaintiffs who purchased LIBOR-based instruments from third parties (as opposed to the defendants) lack antitrust standing to pursue such claims. The appellate court remanded these matters to the SDNY for further proceedings in light of its rulings. A separate appeal concerning the SDNY’s dismissal of a fraud class action on behalf of lender plaintiffs remains pending in the US Court of Appeals. In March 2020, NatWest Group companies finalised a settlement resolving the class action on behalf of bondholder plaintiffs (those who held bonds issued by non-defendants on which interest was paid from 2007 to 2010 at a rate expressly tied to USD LIBOR). The amount of the settlement (which was covered by an existing provision) has been paid into escrow pending court approval of the settlement. The non-class claims filed in the SDNY include claims that the FDIC is asserting on behalf of certain failed US banks. In July 2017, the FDIC, on behalf of 39 of those failed US banks, commenced substantially similar claims against NatWest Group companies and others in the High Court of Justice of England and Wales. The action alleges collusion with regard to the setting of USD LIBOR and that the defendants breached UK and European competition law, as well as asserting common law claims of fraud under US law. The defendant banks consented to a request by the FDIC for discontinuance of the claim in respect of 20 failed US banks, leaving 19 failed US banks as claimants. The UK proceedings are at the disclosure stage. In addition, there are two class actions relating to JPY LIBOR and Euroyen TIBOR. The first class action, which relates to Euroyen TIBOR futures contracts, was dismissed by the SDNY in September 2020 on jurisdictional and other grounds, and the plaintiffs have commenced an appeal to the US Court of Appeals. The second class action, which relates to other derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR, was dismissed by the SDNY in relation to NWM Plc and other NatWest Group companies in September 2021. That dismissal may be the subject of a future appeal. In addition to the above, five other class action complaints were filed against NatWest Group companies in the SDNY, each relating to a different reference rate. In February 2017, the SDNY dismissed the case relating to Euribor for lack of personal jurisdiction and in August 2019, the SDNY dismissed the case relating to Pound Sterling for various reasons. Plaintiffs’ appeals in both cases remain pending. In July 2019, the SDNY dismissed the case relating to the Singapore Interbank Offered Rate and Singapore Swap Offer Rate (‘SIBOR / SOR’) but in March 2021, the US Court of Appeals reversed the SDNY’s decision, such that the case has returned to the SDNY, where it is the subject of a further motion to dismiss. In the class action relating to the Australian Bank Bill Swap Reference Rate, the SDNY in February 2020 declined to dismiss the amended complaint as against NWM Plc and certain other defendants, but dismissed it as to other members of NatWest Group (including NatWest Group plc). The claims against non-dismissed defendants (including NWM Plc) are now proceeding in discovery. In June 2021, NWM Plc and the plaintiffs in the Swiss Franc LIBOR class action finalised a settlement resolving that case. The amount of the settlement (which was covered by an existing provision) has been paid into escrow pending court approval of the settlement. NWM Plc is also named as a defendant in a motion to certify a class action relating to LIBOR in the Tel Aviv District Court in Israel. NWM Plc filed a motion for cancellation of service outside the jurisdiction, which was granted in July 2020. The claimants appealed that decision and in November 2020 the appeal was refused and the claim dismissed by the Appellate Court. The claim could in future be recommenced depending on the outcome of an appeal to Israel's Supreme Court in respect of dismissal of the substantive case against banks that had a presence in Israel. In January 2019, a class action antitrust complaint was filed in the SDNY alleging that the defendants (USD ICE LIBOR panel banks and affiliates) have conspired to suppress USD ICE LIBOR from 2014 to the present by submitting incorrect information to ICE about their borrowing costs. The NatWest Group defendants are NatWest Group plc, NWM Plc, NWMSI and NWB Plc. The defendants made a motion to dismiss this case, which was granted by the court in March 2020. One plaintiff sought to appeal the dismissal, but on 14 February 2022, the US Court of Appeals dismissed the appeal because that plaintiff lacks standing to maintain the appeal. In August 2020, a complaint was filed in the United States District Court for the Northern District of California by several United States consumer borrowers against the USD ICE LIBOR panel banks and their affiliates, alleging that the normal process of setting USD ICE LIBOR amounts to illegal price-fixing, and also that banks in the United States have illegally agreed to use LIBOR as a component of price in variable consumer loans. The NatWest Group defendants are NatWest Group plc, NWM Plc, NWMSI and NWB Plc. The plaintiffs seek damages and to prevent the enforcement of LIBOR-based instruments through injunction. Defendants have filed a motion to dismiss, which remains pending. 27 Memorandum items continued FX litigation NWM Plc, NWMSI and/or NatWest Group plc are defendants in several cases relating to NWM Plc's foreign exchange (FX) business. In 2015, NWM Plc paid US$255 million to settle the consolidated antitrust class action filed in the SDNY on behalf of persons who entered into over-the-counter FX transactions with defendants or who traded FX instruments on exchanges. In 2018, some members of the settlement class who opted out of that class action settlement filed their own non-class complaint in the SDNY asserting antitrust claims against NWM Plc, NWMSI and other banks. Those opt-out claims are proceeding in discovery. In April 2019, some of the same claimants in the opt-out case described above, as well as others, served proceedings (which are ongoing) in the High Court of Justice of England and Wales, asserting competition claims against NWM Plc and several other banks. The claim was transferred from the High Court of Justice of England and Wales in December 2021 and registered in the Competition Appeal Tribunal in January 2022. An FX-related class action, on behalf of ‘consumers and end-user businesses’, is proceeding in the SDNY against NWM Plc and others. Plaintiffs have filed a motion for class certification, which defendants are opposing. In May 2019, a cartel class action was filed in the Federal Court of Australia against NWM Plc and four other banks on behalf of persons who bought or sold currency through FX spots or forwards between 1 January 2008 and 15 October 2013 with a total transaction value exceeding AUD $0.5 million. The claimant has alleged that the banks, including NWM Plc, contravened Australian competition law by sharing information, coordinating conduct, widening spreads and manipulating FX rates for certain currency pairs during this period. NatWest Group plc and NWMSI have been named in the action as 'other cartel participants', but are not respondents. The claim was served in June 2019 and, after a number of interlocutory Litigation and regulatory matters pleading disputes, NWM Plc is preparing its defence. In July and December 2019, two separate applications seeking opt-out collective proceedings orders were filed in the UK Competition Appeal Tribunal against NatWest Group plc, NWM Plc and other banks. Both applications have been brought on behalf of persons who, between 18 December 2007 and 31 January 2013, entered into a relevant FX spot or outright forward transaction in the EEA with a relevant financial institution or on an electronic communications network. A hearing to determine class certification and which of the applications should be permitted to represent the class took place in July 2021 and judgment is awaited. In November 2020, proceedings were issued in the High Court of Justice of England and Wales against NWM Plc by a claimant who sought an account of profits and/or damages in respect of alleged historical FX trading misconduct. The claim was served on NWM Plc in March 2021 and discontinued in December 2021. Two motions to certify FX-related class actions were filed in the Tel Aviv District Court in Israel in September and October 2018, and were subsequently consolidated into one motion. The consolidated motion to certify, which names The Royal Bank of Scotland plc (now NWM Plc) and several other banks as defendants, was served on NWM Plc in May 2020. NWM Plc has filed a motion challenging the permission to serve the consolidated motion outside the Israeli jurisdiction, which remains pending. In December 2021, a claim was issued in the Netherlands against NatWest Group plc, NWM Plc and NWM N.V. by Stichting FX Claims, seeking a declaration from the court that anti-competitive FX market conduct described in decisions of the European Commission of 16 May 2019 is unlawful, along with unspecified damages. The claimant has indicated that it may seek to amend its claim to also refer to the December 2021 decision by the EC (described below under “Foreign exchange related investigations”). A hearing is scheduled for June 2022. Certain other foreign exchange transaction related claims have been or may be threatened. NatWest Group cannot predict whether all or any of these claims will be pursued. Government securities antitrust litigation NWMSI and certain other US broker-dealers are defendants in a consolidated antitrust class action pending in the SDNY on behalf of persons who transacted in US Treasury securities or derivatives based on such instruments, including futures and options. The plaintiffs allege that defendants rigged the US Treasury securities auction bidding process to deflate prices at which they bought such securities and colluded to increase the prices at which they sold such securities to plaintiffs. The complaint was dismissed in March 2021. Plaintiffs have filed an amended complaint, which defendants are again seeking to have dismissed. Class action antitrust claims commenced in March 2019 are pending in the SDNY against NWM Plc, NWMSI and other banks in respect of Euro-denominated bonds issued by European central banks (EGBs). The complaint alleges a conspiracy among dealers of EGBs to widen the bid-ask spreads they quoted to customers, thereby increasing the prices customers paid for the EGBs or decreasing the prices at which customers sold the bonds. The class consists of those who purchased or sold EGBs in the US between 2007 and 2012. The defendants filed a motion to dismiss this matter, which was granted by the court in respect of NWM Plc and NWMSI in July 2020. Plaintiffs have filed an amended complaint which defendants are seeking to have dismissed. 27 Memorandum items continued Swaps antitrust litigation NWM Plc and other members of NatWest Group, including NatWest Group plc, as well as a number of other interest rate swap dealers, are defendants in several cases pending in the SDNY alleging violations of the US antitrust laws in the market for interest rate swaps. There is a consolidated class action complaint on behalf of persons who entered into interest rate swaps with the defendants, as well as non-class action claims by three swap execution facilities (TeraExchange, Javelin, and trueEx). The plaintiffs allege that the swap execution facilities would have successfully established exchange-like trading of interest rate swaps if the defendants had not unlawfully conspired to prevent that from happening through boycotts and other means. Discovery in these cases is complete, and the plaintiffs' motion for class certification remains pending. In June 2021, a class action antitrust complaint was filed against a number of credit default swap dealers in New Mexico federal court on behalf of persons who, from 2005 onwards, settled credit default swaps in the United States by reference to the ISDA credit default swap auction protocol. The complaint alleges that the defendants conspired to manipulate that benchmark through various means in violation of the antitrust laws and the Commodity Exchange Act. The defendants include several NatWest Group companies, including NatWest Group plc. Defendants are seeking dismissal. Odd lot corporate bond trading antitrust litigation In October 2021, the SDNY granted defendants’ motion to dismiss the class action antitrust complaint alleging that from August 2006 onwards various securities dealers, including NWMSI, conspired artificially to widen spreads for odd lots of corporate bonds bought or sold in the United States secondary market and to boycott electronic trading platforms that would have allegedly promoted pricing competition in the market for such bonds. Plaintiffs have commenced an appeal of the dismissal. Spoofing litigation In December 2021, three substantially similar class actions complaints were filed in federal court in the United States against NWM Plc and NWMSI alleging Commodity Exchange Act and common law unjust enrichment claims arising from manipulative trading known as spoofing. The complaints refer to NWM Plc’s December 2021 spoofing-related guilty plea (described below under “US investigations relating to fixed-income securities”) and purport to assert claims on behalf of those who transacted in US Treasury securities and futures and options on US Treasury securities between 2008 and 2018. The three complaints are pending in the United States District Court for the Northern District of Illinois. Madoff NWM N.V. is a defendant in two actions filed by the trustee for the bankruptcy estates of Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, in bankruptcy court in New York, which together seek to clawback more than US$298 million that NWM N.V. allegedly received from certain Madoff feeder funds and certain swap counterparties. The claims were previously dismissed, but as a result of an August 2021 decision by the US Court of Appeals, they will now proceed in the bankruptcy court subject to NWM N.V.’s legal and factual defences. Litigation and regulatory matters EUA trading litigation NWM Plc was a named defendant in civil proceedings before the High Court of Justice of England and Wales brought in 2015 by ten companies (all in liquidation) (the 'Liquidated Companies') and their respective liquidators (together, 'the Claimants'). The Liquidated Companies previously traded in European Union Allowances (EUAs) in 2009 and were alleged to be VAT defaulting traders within (or otherwise connected to) EUA supply chains of which NWM Plc was a party. In March 2020, the court held that NWM Plc and Mercuria Energy Europe Trading Limited (‘Mercuria’) were liable for dishonestly assisting and knowingly being a party to fraudulent trading during a seven business day period in 2009. In October 2020, the High Court quantified total damages against NWM Plc and Mercuria at £45 million plus interest and costs, and permitted the defendants to appeal to the Court of Appeal. In May 2021 the Court of Appeal set aside the High Court’s judgment and ordered that a retrial take place before a different High Court judge. The claimants have sought permission from the Supreme Court to appeal. The Court of Appeal also dismissed an appeal by Mercuria against the finding by the High Court that NWM Plc and Mercuria were both vicariously liable. Mercuria has sought permission from the Supreme Court to appeal that decision. Offshoring VAT assessments HMRC issued protective tax assessments in 2018 against NatWest Group plc totalling £143 million relating to unpaid VAT in respect of the UK branches of two NatWest Group companies registered in India. NatWest Group formally requested reconsideration by HMRC of their assessments, and this process was completed in November 2020. HMRC upheld their original decision and, as a result, NatWest Group plc lodged an appeal with the Tax Tribunal and an application for judicial review with the High Court of Justice of England and Wales, both in December 2020. In order to lodge the appeal with the Tax Tribunal, NatWest Group plc was required to pay the £143 million to HMRC, and payment was made in December 2020. The appeal and the application for judicial review have both been stayed pending resolution of a separate case involving another bank. US Anti-Terrorism Act litigation NWB Plc is a defendant in lawsuits filed in the United States District Court for the Eastern District of New York by a number of US nationals (or their estates, survivors, or heirs) who were victims of terrorist attacks in Israel. The plaintiffs allege that NWB Plc is liable for damages arising from those attacks pursuant to the US Anti-Terrorism Act because NWB Plc previously maintained bank accounts and transferred funds for the Palestine Relief & Development Fund, an organisation which plaintiffs allege solicited funds for Hamas, the alleged perpetrator of the attacks. In March 2019, the trial court granted summary judgment in favour of NWB Plc. In April 2021, the US Court of Appeals affirmed the trial court’s judgment in favour of NWB Plc. In September 2021, the plaintiffs filed a petition seeking discretionary review by the United States Supreme Court, and that petition remains pending. 27 Memorandum items continued NWM N.V. and certain other financial institutions are defendants in several actions filed by a number of US nationals (or their estates, survivors, or heirs), most of whom are or were US military personnel, who were killed or injured in attacks in Iraq between 2003 and 2011. NWM Plc is also a defendant in some of these cases. According to the plaintiffs’ allegations, the defendants are liable for damages arising from the attacks because they allegedly conspired with Iran and certain Iranian banks to assist Iran in transferring money to Hezbollah and the Iraqi terror cells that committed the attacks, in violation of the US Anti-Terrorism Act, by agreeing to engage in ‘stripping’ of transactions initiated by the Iranian banks so that the Iranian nexus to the transactions would not be detected. The first of these actions was filed in the United States District Court for the Eastern District of New York in November 2014. In September 2019, the district court dismissed the case, finding that the claims were deficient for several reasons, including lack of sufficient allegations as to the alleged conspiracy and causation. The plaintiffs are appealing the decision to the US Court of Appeals. Another action, filed in the SDNY in 2017, was dismissed in March 2019 on similar grounds, but remains subject to appeal to the US Court of Appeals. Other follow-on actions that are substantially similar to the two that have now been dismissed are pending in the same courts. Securities underwriting litigation NWMSI is an underwriter defendant in securities class actions in the US in which plaintiffs generally allege that an issuer of public securities, as well as the underwriters of the securities (including NWMSI), are liable to purchasers for misrepresentations and omissions made in connection with the offering of such securities. 1MDB litigation A claim for a material sum has been issued, but not served, recently in Malaysia by 1MDB against Coutts & Co Ltd for alleged losses in connection with the 1MDB fund. Coutts & Co Ltd is a company registered in Switzerland and is in wind-down following the announced sale of its business assets in 2015. Regulatory matters (including investigations and customer redress programmes) NatWest Group's businesses and financial condition can be affected by the actions of various governmental and regulatory authorities in the UK, the US, the EU and elsewhere. NatWest Group has engaged, and will continue to engage, in discussions with relevant governmental and regulatory authorities, including in the UK, the US, the EU and elsewhere, on an ongoing and regular basis, and in response to informal and formal inquiries or investigations, regarding operational, systems and control evaluations and issues including those related to compliance with applicable laws and regulations, including consumer protection, investment advice, business conduct, competition/anti-trust, VAT recovery, anti-bribery, anti-money laundering and sanctions regimes. NWM Group in particular has been providing information regarding a variety of matters, including, for example, offering of securities, the setting of benchmark rates and related derivatives trading, conduct in the foreign exchange market, product mis-selling and various issues relating to the issuance, underwriting, and sales and trading of fixed-income securities, including structured products and government securities, some of which have resulted, and others of which may result, in investigations or proceedings. Litigation and regulatory matters Any matters discussed or identified during such discussions and inquiries may result in, among other things, further inquiry or investigation, other action being taken by governmental and regulatory authorities, increased costs being incurred by NatWest Group, remediation of systems and controls, public or private censure, restriction of NatWest Group's business activities and/or fines. Any of the events or circumstances mentioned in this paragraph or below could have a material adverse effect on NatWest Group, its business, authorisations and licences, reputation, results of operations or the price of securities issued by it, or lead to material additional provisions being taken. NatWest Group is co-operating fully with the matters described below. Investigations US investigations relating to fixed-income securities I |
Analysis of the net investment
Analysis of the net investment in business interests and intangible assets | 12 Months Ended |
Dec. 31, 2021 | |
Analysis of the net investment in business interests and intangible assets | |
Analysis of the net investment in business interests and intangible assets | 28 Analysis of the net investment in business interests and intangible assets This note shows cash flows relating to obtaining or losing control of associates or subsidiaries and net assets and liabilities purchased and sold. These cash flows are presented as investing activities on the cash flow statement. 2021 2020 2019 £m £m £m Fair value given for businesses acquired(1) — — (55) Additional investment in associates (51) (40) — Net assets/liabilities purchased (3,128) — — Net outflow of cash in respect of acquisitions (3,179) (40) (55) Sale of interests in associates — 27 — Net assets/liabilities disposed 114 288 351 Profit on disposal 55 3 — Net inflow of cash in respect of disposals 169 318 351 Cash expenditure on intangible assets (479) (348) (380) Net outflow of cash (3,489) (70) (84) (1) 2019 includes the purchase of Free agent. |
Analysis of changes in financin
Analysis of changes in financing during the year | 12 Months Ended |
Dec. 31, 2021 | |
Analysis of changes in financing during the year | |
Analysis of changes in financing during the year | 29 Analysis of changes in financing during the year This note shows cash flows and non-cash movements relating to the financing activities of the Group. These activities reflect movements in share capital, share premium, paid-in equity, subordinated liabilities and MRELs. Share capital, share premium, and paid-in equity Subordinated liabilities MRELs 2021 2020 2019 2021 2020 2019 2021 2020 2019 £m £m £m £m £m £m £m £m £m At 1 January 18,239 17,246 17,134 9,962 9,979 10,535 20,873 19,249 16,821 Ordinary shares issued — — 17 — — — — — — Issue of paid-in equity 937 2,218 — — — — — — — Issue of subordinated liabilities — — — 1,634 1,631 577 — — — Redemption of subordinated liabilities — — — (4,765) (3,502) (1,108) — — — Interest on subordinated liabilities — — — (321) (510) (533) — — — Issue of MRELs — — — — — — 3,383 1,309 3,640 Maturity/redemption of MRELs — — — — — — — (2) (1,285) Interest on MRELs — — — — — — (647) (671) (428) Net cash inflow/(outflow) from financing 937 2,218 17 (3,452) (2,381) (1,064) 2,736 636 1,927 Ordinary shares issued 87 52 95 — — — — — — Share cancellation (698) — — — — — — — — Effects of foreign exchange — — — (18) (234) (315) (190) (514) (683) Changes in fair value of subordinated liabilities and MRELs (434) 133 317 (649) 829 539 Paid in equity reclassified to subordinated liabilities (2,046) (1,277) — 1,915 1,632 — Loss on sale of subordinated liabilities and MRELs 145 324 — — — — Interest on subordinated liabilities and MRELs 311 509 506 653 673 645 At 31 December 16,519 18,239 17,246 8,429 9,962 9,979 23,423 20,873 19,249 |
Analysis of cash and cash equiv
Analysis of cash and cash equivalents | 12 Months Ended |
Dec. 31, 2021 | |
Analysis of cash and cash equivalents | |
Analysis of cash and cash equivalents | 30 Analysis of cash and cash equivalents In the cash flow statement, cash and cash equivalents comprises cash, 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 insignificant risk of change in value. 2021 2020 2019 £m £m £m At 1 January - cash 124,489 80,993 91,368 - cash equivalents 14,710 19,595 17,568 139,199 100,588 108,936 Net increase/(decrease) in cash and cash equivalents 51,507 38,611 (8,348) At 31 December 190,706 139,199 100,588 Comprising: Cash and balances at central banks 177,757 124,489 80,993 Trading assets 7,137 9,220 12,578 Other financial assets 16 173 459 Loans to banks - amortised cost (1) 5,796 5,317 6,558 Cash and cash equivalents 190,706 139,199 100,588 (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £4,293 million (2020 - £7,592 million; 2019 - £7,570 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 €60 million (2020 - €81 million, 2019 €47 million). The Royal Bank of Scotland International (Holdings) Limited had balances with Central Bank of Luxembourg of €123 million (2020 - €59 million, 2019 €58 million) |
Directors' and key management r
Directors' and key management remuneration | 12 Months Ended |
Dec. 31, 2021 | |
Directors' and key management remuneration | |
Directors' and key management remuneration | 31 Directors' 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 identified as Persons Discharging Managerial Responsibilities of NatWest Group plc under the new governance structure. 2021 2020 Directors' remuneration £000 £000 Non-executive directors emoluments 1,641 1,708 Chairman and executive directors emoluments 4,688 4,349 6,329 6,057 Amounts receivable under long-term incentive plans and share option plans 549 609 Total 6,878 6,666 No directors accrued benefits under defined benefit schemes or defined contribution schemes during 2021 and 2020. Compensation of key management The aggregate remuneration of directors and other members of key management during the year was as follows: 2021 2020 £000 £000 Short-term benefits 18,124 18,718 Post-employment benefits 380 474 Share-based payments 2,491 3,249 20,995 22,441 |
Transactions with directors and
Transactions with directors and key management | 12 Months Ended |
Dec. 31, 2021 | |
Transactions with directors and key management | |
Transactions with directors and key management | 32 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 comprise 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. 2021 2020 £000 £000 Loans to customers - amortised cost 9,128 5,165 Customer deposits 51,018 45,747 At 31 December 2021, amounts outstanding in relation to transactions, arrangements and agreements entered into by authorised institutions in NatWest Group, as defined in UK legislation, were £7,023,190 in respect of loans to seven persons who were directors of the company at any time during the financial period. |
Related parties
Related parties | 12 Months Ended |
Dec. 31, 2021 | |
Related parties | |
Related parties | 33 Related parties A related party is a person or entity that is related to the entity that is preparing its financial statements. Transactions between an entity and any related party are disclosed in the financial statements to ensure readers are aware of how financial statements may be affected by these transactions. UK Government The UK Government through HM Treasury is the ultimate controlling party of The NatWest Group plc. The UK Government's shareholding is managed by UK Government Investments Limited, a company wholly owned by the UK Government. As a result the UK Government and UK Government controlled bodies are related parties of the Group. At 31 December 2021, HM Treasury’s holding in the company’s ordinary shares was 52.96%. NatWest Group enters into transactions with many of these bodies. Transactions include the payment of: taxes – principally UK corporation tax (Note 7) and value added tax; national insurance contributions; local authority rates; and regulatory fees and levies (including the bank levy (Note 3) and FSCS levy (Note 27) - 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. Members of NatWest Group that are UK authorised institutions are required to maintain non-interest bearing (cash ratio) deposits with the Bank of England amounting to 0.406% of their average eligible liabilities in excess of £600 million. 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 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. In some instances, the investment may extend to ownership or control over 20% or more of the voting rights of the investee company. - NatWest Group recharges NatWest Group Pension Fund with the cost of administration services incurred by it. The amounts involved are not material to NatWest Group. - In accordance with IAS 24, transactions or balances between NatWest Group entities that have been eliminated on consolidation are not reported. - The captions in the primary financial statements of the parent company include amounts attributable to subsidiaries. These amounts have been disclosed in aggregate in the relevant notes to the financial statements. Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit (or loss) on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions. |
Post balance sheet events
Post balance sheet events | 12 Months Ended |
Dec. 31, 2021 | |
Post balance sheet events | |
Post balance sheet events | 34 Post balance sheet events A post balance sheet event is an event that takes place between 31 December 2021 (reporting date) and 17 February 2022 (date of approval of these financial statements). Significant events are included in the financial statements either to provide new information about conditions that existed at 31 December 2021, including estimates used to prepare the financial statements (known as an adjusting event) or to provide new information about conditions that did not exist at 31 December 2021 (non-adjusting events). This note provides information relating to material non-adjusting events. On 27 January 2022, NatWest Group announced that we will create a new franchise, Commercial and Institutional, bringing together our Commercial, NatWest Markets and RBS International businesses to form a single franchise, with common objectives, to best support our customers across the full non-personal customer lifecycle. Our reporting will follow this new structure from Q1 2022. Regulatory calls were announced as a result of the PRA determination that certain instruments can no longer be included as part of Tier 1 capital on a solo and/or consolidated basis after 31 December 2021: – On 1 February 2022, NatWest Group plc gave notice of redemption to holders of the USD Series U Non-Cumulative Dollar Preference Shares (ISIN US39057AA62). The notional outstanding of $1,013 million plus dividends for the current period to, but excluding the redemption date of 31 March 2022 will be paid to noteholders at par. – On 1 February 2022, NatWest Group plc gave notice of redemption to holders of the $1,200 million 7.648% dollar Perpetual Regulatory Tier One Security (ISIN US780097AH44). The notional outstanding of $67.5 million plus interest for the current period will be paid to noteholders at a make whole price calculated at least one business day prior to the redemption date of 3 March 2022. On 11 February 2022, NatWest Group plc gave notice to noteholders of the redemption of its €1.5 billion Fixed to Floating Rate notes due 8 March 2023. The notes will be redeemed on the optional redemption date of 8 March 2022. Payment of principal and accrued interest will be settled upon redemption at par. The call is because the note will cease to be MREL eligible from 8 March 2022. Other than as disclosed in the accounts, there have been no other significant events between 31 December 2021 and the date of approval of these accounts which would require a change or additional disclosure. |
Accounting policies (Policies)
Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting policies | |
Presentation of accounts | 1. Presentation of financial statements NatWest Group plc is incorporated in the UK and registered in Scotland. The financial statements are presented in the functional currency, pounds sterling. NatWest Group plc’s consolidated financial statements incorporate the results of NatWest Group plc and the entities it controls. Control arises when NatWest Group plc has 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 financial statements are prepared under consistent accounting policies. Transactions and balances between Group companies are eliminated in the consolidated financial statements to show only those transactions and balances external to the NatWest Group. The audited financial statements are set out on pages 29 to 110 and the audited sections of Risk and capital management on pages 172 to 269 of the NatWest Group 2021 Annual Report and Form 20-F Information included as Exhibit 15.2 to this Form 20-F, form an integral part of these financial statements. The directors have prepared the financial 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 financial statements are approved (see the Report of the directors, page 168 of the NatWest Group 2021 Annual Report and Form 20-F Information included as Exhibit 15.2 to this Form 20-F) and in accordance with UK adopted International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union. The significant accounting policies and related judgments are set out below. Except for certain financial instruments as described in Accounting policies 10 and 15 and investment property, the financial statements are presented on a historical cost basis. Accounting policy changes effective 1 January 2021. The IASB amended IFRS 16 Leases with “COVID-19 amendments on lease modifications – Amendments to IFRS 16 – Leases (IFRS 16)”. The effect of the amendment on NatWest Group’s financial statements is immaterial. |
Revenue recognition | 2. Revenue recognition Interest income and expense are recognised in the income statement using the effective interest rate method for: all financial instruments measured at amortised cost, debt instruments measured as 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. Negative interest on financial assets is presented in interest payable and negative interest on financial liabilities is presented in interest receivable. Other interest relating to financial 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 fixed and always determinable. |
Discontinued operations, Held for sale and Disposal group | 3. Discontinued operations, Held for sale and Disposal group The results of discontinued operations (comprising the post-tax profit or loss of discontinued operations and the post-tax results of either the ongoing measurement at fair value less costs to sell or disposal of the discontinued operation) are excluded from the results of continuing operations and are presented as a single amount as profit/(loss) from discontinued operations, net of tax in the income statement. Comparatives are represented for the income statement, cash flow statement, statement of changes in equity and related notes. An asset or disposal group (assets and liabilities) is classified as held for sale if NatWest Group will recover its carrying amount principally through a sale transaction rather than through continuing use. These are measured at the lower of its carrying amount or fair value less cost to sell unless scoped out of IFRS 5 in which case the existing measurement provisions of IFRS apply. These are presented as single amounts, comparatives are not represented. |
Staff costs | 4. Staff costs Employee costs, such as salaries, paid absences, and other benefits are recognised over the period in which the employees provide the related services to NatWest Group. Employees may receive variable compensation in cash, in deferred cash or debt instruments of NatWest Group or in ordinary shares of NatWest Group plc. NatWest Group operates a number of share-based compensation schemes under which it grants awards of NatWest Group plc shares and share options to its 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 and forfeiture criteria with a corresponding increase in equity. The fair value of the instruments granted is based on market prices at the grant date. Defined contribution pension scheme A scheme where NatWest Group pays fixed contributions and there is no legal or constructive obligation to pay further contributions or benefits. Contributions are recognised in the income statement as employee service costs accrue. Defined benefit pension scheme A scheme that defines the benefit 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 defined benefit 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 defined benefit asset or liability) is recognised in operating expenses. Actuarial gains and losses (i.e. gains and/or losses on re-measuring the net defined benefit 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 defined benefit asset or liability, is recognised on the balance sheet if the criteria of the asset ceiling test are met. This requires the net defined benefit surplus to be limited to the present value of any economic benefits available to NatWest Group in the form of refunds from the plan or reduced contributions to it. NatWest Group will recognise a liability where a minimum funding requirement exists for any of its defined benefit pension schemes. This reflects agreed minimum funding and the availability of a net surplus as determined as described above. When estimating the liability for minimum funding requirements NatWest Group plc only include contributions that are substantively or contractually agreed and do not include discretionary features, including dividend-linked contributions |
Intangible assets and goodwill | 5. Intangible assets and goodwill Intangible assets are identifiable non-monetary assets without physical substance acquired by NatWest Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is a method to spread the cost of such assets over time to the income statement. This is charged to the income statement over the assets' estimated useful economic lives using methods that best reflect the pattern of economic benefits. The estimated useful economic lives are: Computer software 3 to 12 years Other acquired intangibles 5 to 10 years Expenditure on internally generated goodwill and brands is charged to the income statement as incurred. 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 benefits 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 benefits beyond one year 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’s net assets over the net fair value of the subsidiary’s identifiable 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 when such transactions occur. |
Impairment of non-financial assets | 6. Impairment of non-financial assets At each balance sheet date, NatWest Group assesses whether there is any indication that its intangible assets or property, plant and equipment are impaired. If any such indication exists, NatWest Group estimates the recoverable amount of the asset and compares it to its balance sheet value to calculate if an impairment loss should be charged to the income statement. The balance sheet value of the asset is reduced by the amount of the impairment loss. A reversal of an impairment loss on 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. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Impairment losses on goodwill are not reversed The recoverable amount of an asset that does not generate cash flows 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 identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to NatWest Group’s cash-generating units or groups of cash-generating units expected to benefit 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 flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been considered in estimating future cash flows. |
Foreign currencies | 7. 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 flow 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 financial assets classified 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 reclassified from equity to the income statement on disposal of a foreign operation. |
Provisions and contingent liabilities | 8. Provisions and contingent liabilities NatWest Group recognises a provision for a present obligation resulting from a past event when it is more likely than not that it 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 NatWest Group has a constructive obligation. An obligation exists when NatWest Group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected either by starting to implement the plan or by announcing its main features. NatWest Group recognises any onerous cost of the present obligation under a contract as a provision. An onerous cost is the unavoidable cost of meeting its contractual obligations that exceed the expected economic benefits. When NatWest Group intends 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, such as rates. Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by uncertain future events, or present obligations arising from past events that are not recognised because either an outflow of economic benefits is not probable, or the amount of the obligation cannot be reliably measured. Contingent liabilities are not recognised but information about them is disclosed unless the possibility of any outflow of economic benefits in settlement is remote. |
Tax | 9. 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 financial instruments classified as equity are recognised in the income statement in line with IAS 12. Current tax is tax payable or recoverable in respect of the taxable profit or loss for the year arising in the income statement, other comprehensive income or equity. Provision is made for current tax at rates enacted, or substantively enacted, at the balance sheet date. Deferred tax is the 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. 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 not recognised on temporary differences that arise from initial recognition of an asset or a liability in a transaction (other than a business combination) that at the time of the transaction affects neither accounting nor taxable profit or loss. 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 assets and liabilities are offset where NatWest Group has a legally enforceable right to offset and where they relate to income taxes levied by the same taxation authority either on an individual NatWest Group company or on NatWest Group companies in the same tax group that intend, in future periods, to settle current tax liabilities and assets on a net basis or on a gross basis simultaneously. Accounting for taxes is judgmental and carries a degree of uncertainty because tax law is subject to interpretation, which might be questioned by the relevant tax authority. NatWest Group recognises the most likely current and deferred tax liability or asset, assessed for uncertainty using consistent judgments 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. |
Financial instruments | 10. Financial instruments Financial instruments are measured at fair value on initial recognition on the balance sheet. Monetary financial assets are classified into one of the following subsequent measurement categories (subject to business model assessment and review of contractual cash flow for the purposes of sole payments of principal and interest where applicable): - amortised cost measured at cost using the effective interest rate method, less any impairment allowance; - 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; - mandatory fair value through profit or loss (MFVTPL) measured at fair value and changes in fair value reported in the income statement; or - designated at fair value through profit or loss (DFV) measured at fair value and changes in fair value reported in the income statement. Classification by business model reflects how NatWest Group manages its financial assets to generate cash flows. A business model assessment helps to ascertain the measurement approach depending on whether cash flows result from holding financial assets to collect the contractual cash flows, from selling those financial assets, or both. Business model assessment of assets is made at portfolio level, being the level at which they are managed to achieve a predefined business objective. This is expected to result in the most consistent classification of assets because it aligns with the stated objectives for the portfolio, its risk management, manager’s remuneration and the ability to monitor sales of assets from a portfolio. The contractual terms of a financial asset; any leverage features; prepayment and extension terms; and triggers that might reset the effective rate of interest; are considered in determining whether cash flows are solely payments of principal and interest. Certain financial assets may be designated at fair value through profit or loss (DFV) upon initial recognition if such designation eliminates, or significantly reduces, accounting mismatch. Equity shares are measured at fair value through profit or loss unless specifically 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 non-monetary assets (equity shares) the cumulative gains or losses are transferred directly to retained earnings. Regular way purchases of financial assets classified as amortised cost are recognised on the settlement date; all other regular way transactions in financial assets are recognised on the trade date. Financial liabilities are classified into one of following measurement categories: - amortised cost measured at cost using the effective interest rate method; - held for trading measured at fair value and changes in fair value reported in income statement; or - designated at fair value through profit 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. |
Impairment: expected credit losses (ECL) | 11. Impairment: expected credit losses (ECL) At each balance sheet date each financial asset or portfolio of financial assets measured at amortised cost or at fair value through other comprehensive income, issued financial guarantee and loan commitment (other than those classified 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 significant increase in credit risk rating, otherwise allowances are based on lifetime expected losses. ECL are a probability-weighted estimate of credit losses. The probability is determined by the risk of default which is applied to the cash flow 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 flows. Following a significant increase in credit risk, ECL are adjusted from 12 months to lifetime. This will lead to a higher impairment charge. Judgment is exercised as follows: - Models – in certain low default portfolios, Basel parameter estimates are also applied for IFRS 9. - Non-modelled portfolios , mainly in Private Banking, RBSI and Lombard, use a standardised capital requirement under Basel II. Under IFRS 9, they have bespoke treatments for the identification of significant increase in credit risk. Benchmark PDs, EADs and LGDs are reviewed annually for appropriateness. The ECL calculation is based on expected future cash flows, which is typically applied at a portfolio level. - Multiple economic scenarios (MES) – 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. - Significant increase in credit risk – IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased significantly 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 financial asset is not derecognised, the revised cash flows are used in re-estimating the credit loss. Where restructuring causes derecognition of the original financial asset, the fair value of the replacement asset is used as the closing cash flow 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 NatWest Group’s acquired interest is in equity shares, relevant policies for control, associates and joint ventures apply. Impaired financial assets are written off and therefore derecognised from the balance sheet when NatWest Group concludes that there is no longer any realistic prospect of recovery of part, or all, of the loan. For financial assets that are individually assessed for impairment, the timing of the write-off is determined on a case-by-case basis. Such financial assets are reviewed regularly and write-off will be prompted by bankruptcy, insolvency, re-negotiation, and similar events. The typical time frames from initial impairment to write-off for NatWest Group’s collectively assessed portfolios are: - Retail mortgages: write-off usually occurs within five years , or earlier, when an account is closed, but can be longer where the customer engages constructively; - 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; - Overdrafts and other unsecured loans: write-off occurs within six years ; - Commercial loans: write-offs are determined in the light of individual circumstances; and Business loans are generally written off within five years . |
Derecognition | 12. Derecognition A financial asset is derecognised (removed from the balance sheet) when the contractual right to receive cash flows from the asset has expired or when it has been transferred and the transfer qualifies for derecognition. Conversely, an asset is not derecognised in a contract under which NatWest Group retains substantially all the risks and rewards of ownership. A financial liability is removed from the balance sheet when the obligation is paid, or is cancelled, or expires. Cancellation includes the issuance of a substitute instrument on substantially different terms. |
Netting | 13. Netting Financial assets and financial liabilities are offset, and the net amount presented on the balance sheet when, and only when, NatWest Group currently has a legally enforceable right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. NatWest Group is party to a number of arrangements, including master netting agreements, that give it the right to offset financial assets and financial liabilities, but where it does not intend to settle the amounts net or simultaneously, the assets and liabilities concerned are presented separately on the balance sheet. |
Capital instruments | 14. Capital instruments NatWest Group classifies a financial instrument that it issues as a liability if it is a contractual obligation to deliver cash or another financial asset, or to exchange financial assets or financial liabilities on potentially unfavourable terms and as equity if it evidences a residual interest in the assets of NatWest Group 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 NatWest Group (known as treasury shares or own shares held) is deducted from equity. On the cancellation of treasury shares their nominal value is removed from equity and any excess of consideration over nominal value is treated in accordance with the capital maintenance provisions of 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. |
Derivatives and hedging | 15. Derivatives and hedging Derivatives are reported on the balance sheet at fair value. NatWest Group uses derivatives as part of its trading activities, to manage its 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 the income statement in Income from trading activities except for gains and losses on those derivatives that are managed together with financial instruments designated at fair value; these gains and losses are included in Other operating income. Hedge accounting NatWest Group enters into three types of hedge accounting relationships (see later)). Hedge accounting relationships are designated and documented at inception in line with the requirements of IAS 39 Financial instruments – Recognition and Measurement. The documentation identifies 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. Fair value hedge Cash flow hedge Hedge of net investment in a foreign operation 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 flows 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 hedge item is no longer on the balance sheet the adjustment to the hedged item is reported in the income statement. For cash flow hedging the cumulative unrealised gain or loss is reclassified from equity to the income statement when the hedged cash flows occur or, if the forecast transaction results in the recognition of a financial asset or financial liability, when the hedged forecast cash flows affect the income statement. Where a forecast transaction is no longer expected to occur, the cumulative unrealised gain or loss is reclassified 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 reclassified from equity to the income statement. |
Investment in Group Undertakings | 16. Investment in Group undertakings NatWest Group plc’s investments in its Group undertakings (subsidiaries) are stated at cost less any impairment. |
Critical accounting policies and key sources of estimation uncertainty | Critical accounting policies and key sources of estimation uncertainty The reported results of NatWest Group are sensitive to the accounting policies, assumptions and estimates that underlie the preparation of the financial statements. The accounting standards used in the preparation of the financial statements (see presentation of financial statements above) require the directors, in preparing NatWest Group's financial statements, to select suitable accounting policies, apply them consistently and make judgments and estimates that are reasonable and prudent. In the absence of accounting guidance, standards used in the preparation of the financial statements require the directors to develop and apply an accounting policy that results in relevant and reliable information in the light of the requirements and guidance in IFRS dealing with similar and related issues and the IASB's ’Conceptual Framework for Financial Reporting’. The judgments and assumptions involved in NatWest Group's accounting policies that are considered by the Board to be the most important to the portrayal of its financial condition are noted below. The use of estimates, assumptions or models that differ from those adopted by NatWest Group would affect its reported results. Estimation uncertainty continues to be affected by the COVID-19 pandemic. The COVID-19 pandemic continued to cause significant economic and social disruption during 2021. Key financial estimates are based on management's latest five-year revenue and cost forecasts. Measurement of goodwill, deferred tax and expected credit losses are highly sensitive to reasonably possible changes in those anticipated conditions. Other reasonably possible assumptions about the future include a prolonged financial effect of the COVID-19 pandemic on the economy of the UK and other countries or greater economic effect as countries and companies implement plans to counter climate risks. How Climate risk affects our accounting judgments and estimates NatWest Group makes use of reasonable and supportable information to make accounting judgments 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. It also includes the effect on NatWest Group’s competitiveness and profitability. 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 judgments and estimates for the current period. Some physical and transition risks can manifest in the shorter term. The following items represent the most significant effects: - The classification of financial instruments linked to climate, or other sustainability indicators: consideration is given to whether the effect of climate related terms prevent the instrument cashflows being solely payments of principal and interest. - The measurement of expected credit loss considers the ability of borrowers to make payments as they fall due. Future cashflows are discounted, so long dated cashflows are less likely to affect current expectations on credit loss. NatWest Group’s assessment of sector specific risks, and whether additional adjustments are required, include expectations on the ability of those sectors to meet their financing needs in the market. Changes in credit stewardship and credit risk appetite that stem from climate considerations, such as oil and gas, will directly affect our positions. - The assessment of asset impairment and deferred tax are based upon value in use. This represents the value of future cashflows and uses the Group’s five-year forecast and the expectation of long term economic growth beyond this period. The five-year forecast takes account of management’s current expectations on competitiveness and profitability, including near term effects of climate transition risk. The long term growth rate reflects external indicators which will include market expectations on climate risk. NatWest Group did not consider any additional adjustments to this indicator. - The use of market indicators as inputs to fair value is assumed to include current information and knowledge regarding the effect of climate risk. Changes in judgments and assumptions could result in a material adjustment to those estimates in the next reporting periods. Consideration of this source of estimation uncertainty has been set out in the notes below (as applicable). Critical accounting policy Note Deferred tax 7 Fair value - financial instruments 11 Loan impairment provisions 15 Goodwill 17 Provisions for liabilities and charges 21 |
Future accounting developments | Future accounting developments International Financial Reporting Standards Effective 1 January 2022 - Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37); - Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16); - Reference to Conceptual Framework (Amendments to IFRS 3); and - Fees in the “10 per cent” test for Derecognition of Financial Liabilities (Amendments to IFRS 9). Other new standards and amendments that are effective for annual periods beginning after 1 January 2023, with earlier application permitted, are set out below. Effective 1 January 2023 - IFRS 17 Insurance Contracts (Amendments to IFRS 17 Insurance Contracts); - Classification of Liabilities as Current or Non-current (Amendments to IAS 1); - Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12); - Definition of Accounting Estimates (Amendments to IAS 8); and - Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2). NatWest Group is assessing the effect of adopting these standards and amendments on its financial statements but does not expect the effect to be material. |
Accounting policies (Tables)
Accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting policies | |
Schedule of estimated useful economic lives | Computer software 3 to 12 years Other acquired intangibles 5 to 10 years |
Net interest income (Tables)
Net interest income (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Net interest income | |
Schedule of Net interest income | 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Balances at central banks 99 90 321 Loans to banks - amortised cost 346 246 405 Loans to customers - amortised cost 8,615 8,979 9,547 Other financial assets 253 483 854 Interest receivable 9,313 9,798 11,127 Balances with banks 204 144 319 Customer deposits 556 911 1,256 Other financial liabilities 670 846 1,102 Subordinated liabilities 267 402 483 Internal funding of trading businesses 2 19 168 Interest payable 1,699 2,322 3,328 Net interest income 7,614 7,476 7,799 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. |
Non-interest income (Tables)
Non-interest income (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Non-interest income | |
Schedule of Non-interest income | 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Net fees and commissions (2) 2,124 2,000 2,497 Income from trading activities Foreign exchange 364 569 448 Interest rate (130) 541 532 Credit 83 3 32 Changes in fair value of own debt and derivative liabilities attributable to own credit risk - debt securities in issue 6 (24) (60) - derivative liabilities — — (20) Equities, commodities and other — 36 — 323 1,125 932 Other operating income Loss on redemption of own debt (145) (324) — Operating lease and other rental income 225 232 250 Changes in fair value of financial assets and liabilities designated at fair value (8) (54) (17) through profit or loss (3) Changes in fair value of other financial assets at fair value through profit or loss (4) 5 2 58 Hedge ineffectiveness 25 24 48 (Loss)/profit on disposal of amortised cost assets (15) (18) 42 Profit/(loss) on disposal of fair value through other comprehensive income assets 117 96 (22) (Loss)/profit on sale of property, plant and equipment (5) (30) 13 58 Share of profits/ (losses)of associated entities 216 (30) (14) Profit/(loss) on disposal of subsidiaries and associates (6) 48 (16) 2,224 Other income (7,8) 13 (18) 132 451 (93) 2,759 2,898 3,032 6,188 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) Refer to Note 4 for further analysis. (3) Including related derivatives. (4) Includes instruments that have failed Solely payments of principal and interest testing under IFRS 9. (5) Includes £44 million loss on the purchase of freeholds for properties where the Group was the primary leaseholder. (6) 2019 includes a gain of £444 million( €523 million), a legacy liability release of £256 million and an FX recycling gain of £290 million on completion of the Alawwal bank merger in June 2019; In 2019, £1,102 million of FX recycling gains arising on the liquidation of RFS Holdings BV and £67 million in relation to a capital repayment by UBIDAC. The recycling gains and capital repayment have been calculated using the step-by-step method in IFRIC 16 and by reference to the proportion of equity applied to the FX translation reserve. (7) Includes income from activities other than banking. (8) 2020 includes £58 million loss on acquisition of a £3.0 billion prime UK mortgages portfolio from Metro Bank plc. |
Operating expenses (Tables)
Operating expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Operating expenses | |
Schedule of operating expenses | 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Salaries 2,295 2,494 2,477 Bonus awards 267 232 299 Temporary and contract costs 240 258 401 Social security costs 300 316 296 Pension costs 354 340 301 - defined benefit schemes (see Note 5) 215 215 188 - defined contribution schemes 139 125 113 Other 220 238 202 Staff costs 3,676 3,878 3,976 Premises and equipment (2) 1,133 1,222 1,258 UK bank levy (3) 99 167 134 Depreciation and amortisation (4,5) 923 913 1,218 Other administrative expenses (6) 1,927 1,678 2,694 Administrative expenses 4,082 3,980 5,304 7,758 7,858 9,280 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) 2021 includes cost of £33 million including accelerated depreciation of £41 million (2020 - £144 million including £71 million accelerated depreciation; 2019 - £161 million including £40 million accelerated depreciation) in relation to the planned reduction of the property portfolio (2021 – freehold £3 million; leasehold £30 million; 2020 - freehold £1 million; leasehold £143 million; 2019 - freehold £4 million; leasehold £157 million). (3) 2019 includes a rebate of £31 million relating to prior periods. (4) 2021 includes a £58 million charge relating to the reduction in property portfolio, leasehold £48 million and freehold £10 million (2020 - £107 million charge, leasehold £86 million and freehold £21 million; 2019 - £287 million charge, leasehold £37 million and freehold £250 million). (5) Includes impairment of goodwill of £85 million. (6) Includes litigation and conduct costs, net of amounts recovered. Refer to Notes 21 and 27 for further details. |
Schedule of employees in continuing operations | Continuing operations 2021 2020 2019 Retail Banking 15,800 17,200 19,600 Private Banking 1,900 1,900 1,700 Commercial Banking 8,400 9,700 9,700 RBS International 1,400 1,500 1,600 NatWest Markets 1,600 2,100 5,000 Central items & other 27,000 24,900 22,600 Ulster Bank RoI (1) 1,700 1,900 2,000 Total 57,800 59,200 62,200 UK 40,600 42,500 44,600 USA 300 300 400 India 13,500 13,200 13,500 Poland 1,400 1,200 1,300 Republic of Ireland 1,200 1,400 1,500 Rest of the World 800 600 900 Total 57,800 59,200 62,200 (1) Total number of persons employed in Ulster Bank RoI of 2,400 (2020 – 2,600 ; 2019 – 2,700 ) includes 700 people employed in discontinued operations at 31 December 2021 (2020 – 700 ; 2019 – 700 ). |
Schedule of share-based compensation | Award plan Eligible employees Nature of award Vesting conditions (1) Settlement Sharesave UK, Channel Islands, Gibraltar, Isle of Man, Poland and India. Option to buy shares under employee savings plan Continuing employment or leavers in certain circumstances 2022 to 2026 Deferred performance awards All Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances 2022 to 2028 Long-term incentives (2) Senior employees Awards of ordinary shares and conditional shares Continuing employment or leavers in certain circumstances and/or satisfaction of the pre-vest assessment and underpins 2022 to 2028 (1) All awards have vesting conditions which may not be met. (2) Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment. All awards are granted under the Employee Share Plan. |
Schedule of bonus awards | 2021 2020 Change £m £m % Non-deferred cash awards (1) 38 35 9 % Deferred cash awards 214 111 93 % Deferred share awards 49 60 (18) % Total deferred bonus awards 263 171 54 % Total bonus awards (2) 301 206 46 % Bonus awards as a % of operating profit before tax (3) 7 % (83) % Proportion of bonus awards that are deferred 87 % 83 % of which - deferred cash awards 81 % 65 % - deferred share awards 19 % 35 % |
Schedule of reconciliation of bonus awards | 2021 2020 2019 Reconciliation of bonus awards to income statement charge £m £m £m Bonus awarded 301 206 307 Less: deferral of charge for amounts awarded for current year (99) (77) (110) Income statement charge for amounts awarded in current year 202 129 197 Add: current year charge for amounts deferred from prior years 80 114 127 Less: forfeiture of amounts deferred from prior years (15) (11) (25) Income statement charge for amounts deferred from prior years 65 103 102 Income statement charge for bonus awards 267 232 299 (1) Non-deferred cash awards are limited to £2,000 for all employees. (2) Excludes other performance related compensation. (3) Operating profit before tax and bonus expense. |
Schedule of income statement charge expected to be taken for bonus awards | Actual Expected 2023 2019 2020 2021 2022 and beyond Year in which income statement charge is expected to be taken for deferred bonus awards £m £m £m £m £m Bonus awards deferred from 2019 and earlier 127 114 28 11 6 Bonus awards deferred from 2020 — — 52 8 7 Less: forfeiture of amounts deferred from prior years (25) (11) (15) — — Bonus awards for 2021 deferred — — — 86 13 102 103 65 105 26 |
Sharesave | |
Operating expenses | |
Schedule of share-based compensation | Sharesave 2021 2020 2019 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January 1.64 96 2.01 84 2.18 75 Granted 1.80 24 1.12 35 1.78 25 Exercised 1.76 (10) 1.83 — 2.83 (4) Cancelled 2.02 (15) 2.20 (23) 2.25 (12) At 31 December 1.61 95 1.64 96 2.01 84 |
Deferred performance awards | |
Operating expenses | |
Schedule of share-based compensation | Deferred performance awards 2021 2020 2019 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 169 77 196 76 233 92 Granted 61 32 109 67 110 42 Forfeited (10) (5) (5) (2) (10) (4) Vested (88) (39) (131) (64) (137) (54) At 31 December 132 65 169 77 196 76 |
Long-term incentives | |
Operating expenses | |
Schedule of share-based compensation | Long-term incentives 2021 2020 2019 Value at Shares Options Value at Shares Options Value at Shares Options grant awarded over shares grant awarded over shares grant awarded over shares £m (million) (million) £m (million) (million) £m (million) (million) At 1 January 50 24 — 63 25 — 85 32 2 Granted 6 3 — 14 10 — 15 6 — Vested/exercised (12) (6) — (17) (7) — (12) (4) — Lapsed — — — (10) (4) — (25) (9) (2) At 31 December 44 21 — 50 24 — 63 25 — |
Segmental analysis (Tables)
Segmental analysis (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segmental analysis | |
Schedule of operating segments | Go-forward group Total Central excluding Retail Private Commercial RBS NatWest items Ulster Ulster Banking Banking Banking International Markets & other Bank RoI Bank RoI Total 2021 £m £m £m £m £m £m £m £m £m Continuing operations Net interest income 4,074 480 2,582 383 9 (14) 7,514 100 7,614 Net fees and commissions 377 258 1,158 124 158 (16) 2,059 65 2,124 Other non-interest income (6) 78 135 41 248 215 711 63 774 Total income 4,445 816 3,875 548 415 185 10,284 228 10,512 Depreciation and amortisation (85) — (146) (13) (14) (665) (923) — (923) Other operating expenses (2,428) (520) (2,208) (229) (1,147) 179 (6,353) (482) (6,835) Impairment releases 36 54 1,073 52 35 — 1,250 28 1,278 Operating profit/(loss) 1,968 350 2,594 358 (711) (301) 4,258 (226) 4,032 4 Segmental analysis continued Go-forward group Total excluding Retail Private Commercial RBS NatWest Central items Ulster Ulster Banking Banking Banking International Markets & other (1) Bank RoI Bank RoI Total 2020 (2) £m £m £m £m £m £m £m £m £m Continuing operations Net interest income 3,868 489 2,740 371 (57) (57) 7,354 122 7,476 Net fees and commissions 379 257 1,110 94 99 (16) 1,923 77 2,000 Other non-interest income (66) 17 108 32 1,081 (163) 1,009 23 1,032 Total income 4,181 763 3,958 497 1,123 (236) 10,286 222 10,508 Depreciation and amortisation — (8) (149) (17) (16) (723) (913) — (913) Other operating expenses (2,540) (447) (2,281) (274) (1,294) 332 (6,504) (441) (6,945) Impairment losses (792) (100) (1,927) (107) (40) (26) (2,992) (139) (3,131) Operating profit/(loss) 849 208 (399) 99 (227) (653) (123) (358) (481) 2019 (2) Continuing operations Net interest income 4,130 521 2,842 478 (188) (136) 7,647 152 7,799 Net fees and commissions 696 226 1,312 106 85 (23) 2,402 95 2,497 Other non-interest income 40 30 164 26 1,445 1,932 3,637 54 3,691 Total income 4,866 777 4,318 610 1,342 1,773 13,686 301 13,987 Depreciation and amortisation — (4) (142) (10) (12) (1,050) (1,218) — (1,218) Operating expenses (3,618) (482) (2,458) (254) (1,406) 666 (7,552) (510) (8,062) Impairment losses (393) 6 (391) (2) 51 (1) (730) 6 (724) Operating profit/(loss) 855 297 1,327 344 (25) 1,388 4,186 (203) 3,983 (1) 2019 predominantly related to strategic disposals in Functions. (2) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. Total revenue (2) Go-forward group Total Central excluding Ulster Retail Private Commercial RBS NatWest items & Ulster Bank Banking Banking Banking International Markets Other Bank RoI RoI Total Year ended 31 December 2021 £m £m £m £m £m £m £m £m £m Continuing operations External 5,419 792 3,751 594 823 1,109 12,488 297 12,785 Inter-segmental 14 127 87 6 30 (265) (1) 1 — Total 5,433 919 3,838 600 853 844 12,487 298 12,785 Year ended 31 December 2020 (1) Continuing operations External 5,386 702 3,734 505 1,984 961 13,272 280 13,552 Inter-segmental 39 163 64 3 13 (284) (2) 2 — Total 5,425 865 3,798 508 1,997 677 13,270 282 13,552 Year ended 31 December 2019 (1) Continuing operations External 6,161 703 4,347 639 2,516 3,447 17,813 350 18,163 Inter-segmental 62 241 139 19 558 (1,025) (6) 6 — Total 6,223 944 4,486 658 3,074 2,422 17,807 356 18,163 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income. 4 Segmental analysis continued Total income Go-forward group Total Central excluding Ulster Retail Private Commercial RBS NatWest items & Ulster Bank Banking Banking Banking International Markets Other Bank RoI RoI Total Year ended 31 December 2021 £m £m £m £m £m £m £m £m £m Continuing operations External 4,433 801 3,939 548 554 — 10,275 237 10,512 Inter-segmental 12 15 (64) — (139) 185 9 (9) — Total 4,445 816 3,875 548 415 185 10,284 228 10,512 Year ended 31 December 2020 (1) Continuing operations External 4,157 700 4,065 500 1,395 (537) 10,280 228 10,508 Inter-segmental 24 63 (107) (3) (272) 301 6 (6) — Total 4,181 763 3,958 497 1,123 (236) 10,286 222 10,508 Year ended 31 December 2019 (1) Continuing operations External 4,834 631 4,814 603 1,664 1,145 13,691 296 13,987 Inter-segmental 32 146 (496) 7 (322) 628 (5) 5 — Total 4,866 777 4,318 610 1,342 1,773 13,686 301 13,987 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. 4 Segmental analysis continued Go-forward group Total Central excluding Retail Private Commercial RBS NatWest items Ulster Ulster Analysis of net fees and commissions Banking Banking Banking International Markets & other Bank RoI Bank RoI Total 2021 £m £m £m £m £m £m £m £m £m Continuing operations Fees and commissions receivable - Payment services 306 35 538 19 20 — 918 53 971 - Credit and debit card fees 344 10 147 2 — — 503 19 522 - Lending and financing 13 10 515 54 74 — 666 4 670 - Brokerage 48 6 — 1 41 — 96 — 96 - Investment management, trustee and fiduciary services (1) 3 230 — 45 — — 278 2 280 - Underwriting fees — — — — 127 — 127 — 127 - Other — 35 105 4 — (112) 32 — 32 Total 714 326 1,305 125 262 (112) 2,620 78 2,698 Fees and commissions payable (337) (68) (147) (1) (104) 96 (561) (13) (574) Net fees and commissions 377 258 1,158 124 158 (16) 2,059 65 2,124 2020 (2) Continuing operations Fees and commissions receivable - Payment services 264 28 507 18 18 — 835 57 892 - Credit and debit card fees 299 9 129 2 — — 439 21 460 - Lending and financing 42 7 505 34 86 — 674 4 678 - Brokerage 54 6 — 1 93 — 154 1 155 - Investment management, trustee and fiduciary services (1) 3 225 1 38 2 — 269 2 271 - Underwriting fees — — — — 183 — 183 — 183 - Other 1 26 82 3 4 (33) 83 — 83 Total 663 301 1,224 96 386 (33) 2,637 85 2,722 Fees and commissions payable (284) (44) (114) (2) (287) 17 (714) (8) (722) Net fees and commissions 379 257 1,110 94 99 (16) 1,923 77 2,000 2019 (2) Fees and commissions receivable - Payment services 292 33 659 27 24 — 1,035 60 1,095 - Credit and debit card fees 427 12 154 2 — — 595 28 623 - Lending and financing 356 3 510 36 85 — 990 4 994 - Brokerage 55 5 — — 96 — 156 8 164 - Investment management, trustee and fiduciary services 44 186 3 41 1 — 275 3 278 - Underwriting fees — — — — 170 — 170 — 170 - Other 2 27 90 2 69 (173) 17 4 21 Total 1,176 266 1,416 108 445 (173) 3,238 107 3,345 Fees and commissions payable (480) (40) (104) (2) (360) 150 (836) (12) (848) Net fees and commissions 696 226 1,312 106 85 (23) 2,402 95 2,497 (1) Comparisons with prior periods are impacted by the transfer of the Private Client Advice business to Private Banking from 1 January 2020. (2) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. 2021 2020 2019 Assets Liabilities Assets Liabilities Assets Liabilities £m £m £m £m £m £m Retail Banking 209,973 192,715 197,618 178,617 182,305 153,999 Private Banking 29,854 39,388 26,206 32,457 23,304 28,610 Commercial Banking 184,564 184,890 187,413 174,251 165,399 140,863 RBS International 40,578 38,436 33,984 31,989 31,738 30,330 NatWest Markets 200,576 188,431 270,147 254,098 263,885 246,907 Central items & other 93,614 77,308 57,503 61,262 31,023 57,762 Total excluding Ulster Bank RoI 759,159 721,168 772,871 732,674 697,654 658,471 Ulster Bank RoI 22,833 19,021 26,620 22,993 25,385 21,012 Total 781,992 740,189 799,491 755,667 723,039 679,483 |
Schedule of geographical segments | UK USA Europe RoW Total 2021 £m £m £m £m £m Continuing operations Total revenue 12,100 87 565 33 12,785 Interest receivable 8,949 20 336 8 9,313 Interest payable (1,483) (2) (211) (3) (1,699) Net fees and commissions 1,820 27 235 42 2,124 Income from trading activities 247 53 (1) 24 323 Other operating income 387 2 62 - 451 Total income 9,920 100 421 71 10,512 Operating profit/(loss) before tax 4,143 48 (199) 40 4,032 Total assets 693,221 21,776 64,415 2,580 781,992 Total liabilities 676,684 23,286 38,835 1,384 740,189 Contingent liabilities and commitments 117,225 1 8,114 27 125,367 2020 (1) Continuing operations Total revenue 12,511 211 656 174 13,552 Interest receivable 9,479 — 297 22 9,798 Interest payable (2,163) — (158) (1) (2,322) Net fees and commissions 1,637 33 233 97 2,000 Income from trading activities 911 170 33 11 1,125 Other operating income (117) (22) 42 4 (93) Total income 9,747 181 447 133 10,508 Operating profit/(loss) before tax (193) (85) (291) 88 (481) Total assets 704,725 25,439 66,884 2,443 799,491 Total liabilities 686,500 26,932 41,018 1,217 755,667 Contingent liabilities and commitments 118,654 — 10,068 10 128,732 2019 (1) Continuing operations Total revenue 16,925 228 882 128 18,163 Interest receivable 10,923 — 169 35 11,127 Interest payable (3,255) — (70) (3) (3,328) Net fees and commissions 2,191 37 197 72 2,497 Income from trading activities 727 148 49 8 932 Other operating income 2,305 13 432 9 2,759 Total income 12,891 198 777 121 13,987 Operating profit/(loss) before tax 3,543 186 172 82 3,983 Total assets 634,642 27,396 57,534 3,467 723,039 Total liabilities 613,151 31,715 33,539 1,078 679,483 Contingent liabilities and commitments 114,422 — 10,571 2 124,995 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. |
Pensions (Tables)
Pensions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Pensions | |
Major classes of plan assets as a percentage of total plan assets | Major classes of plan assets as a percentage of 2021 2020 total plan assets of the Main section Quoted Unquoted Total Quoted Unquoted Total % % % % % % Equities 3.7 4.7 8.4 3.9 4.6 8.5 Index linked bonds 46.7 — 46.7 49.4 — 49.4 Government bonds 9.8 — 9.8 6.2 — 6.2 Corporate and other bonds 10.7 4.4 15.1 11.8 5.0 16.8 Real estate — 4.4 4.4 — 4.2 4.2 Derivatives — 8.8 8.8 — 10.0 10.0 Cash and other assets — 6.8 6.8 — 4.9 4.9 70.9 29.1 100.0 71.3 28.7 100.0 |
Summary of derivative instruments | 2021 2020 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps 20 1,408 796 18 1,390 1,716 Interest rate swaps 172 8,385 4,421 68 11,197 6,215 Currency forwards 12 61 98 11 334 38 Equity and bond call options — 1 — 1 169 1 Equity and bond put options — 1 3 3 1 19 Other 1 9 10 2 63 17 |
Changes in value of net pension liability | Main section All schemes Present value Asset Net Present value Asset Net Fair of defined ceiling/ pension Fair of defined ceiling/ pension value of benefit minimum (assets)/ value of benefit minimum (assets)/ plan assets obligation funding liability plan assets obligation funding liability Changes in value of net pension (assets)/liability £m £m £m £m £m £m £m £m At 1 January 2020 46,555 39,669 6,886 — 51,925 44,115 7,315 (495) Currency translation and other adjustments — 4 — 4 92 71 — (21) Income statement 936 954 141 159 1,037 1,103 149 215 Statement of comprehensive income 5,486 5,130 426 70 6,027 5,704 319 (4) Contributions by employer 233 — — (233) 296 — — (296) Contributions by plan participants and other scheme members 9 9 — — 14 14 — — Assets/liabilities extinguished upon settlement — — — — (2) (3) — (1) Benefits paid (1,896) (1,896) — — (2,140) (2,140) — — At 1 January 2021 51,323 43,870 7,453 — 57,249 48,864 7,783 (602) Currency translation and other adjustments — — — — (129) (116) (3) 10 Income statement Net interest expense 713 603 105 (5) 795 676 109 (10) Current service cost — 158 — 158 — 213 — 213 Past service cost — 6 — 6 — 12 — 12 713 767 105 159 795 901 109 215 Statement of comprehensive income Return on plan assets excluding recognised interest income 841 — — (841) 872 — — (872) Experience gains and losses — (241) — (241) — (236) — (236) Effect of changes in actuarial financial assumptions — (1,165) — (1,165) — (1,204) — (1,204) Effect of changes in actuarial demographic assumptions — 350 — 350 — 379 — 379 Asset ceiling adjustments — — 2,443 2,443 — — 2,602 2,602 841 (1,056) 2,443 546 872 (1,061) 2,602 669 Contributions by employer 705 — — (705) 780 — — (780) Contributions by plan participants and other scheme members 8 8 — — 13 13 — — Assets/liabilities extinguished upon settlement — — — — — — — — Benefits paid (1,569) (1,569) — — (1,793) (1,793) — — At 31 December 2021 52,021 42,020 10,001 — 57,787 46,808 10,491 (488) (1) Defined benefit obligations are subject to annual valuation by independent actuaries. (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 contributions. This is most relevant to the Main section, where the surplus is not recognised as the trustees may have control 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. (3) NatWest Group expects to make contributions to the Main section of £714 million in 2022. Following the £500 million contribution in March 2021, additional contributions of up to £ 500 million will be paid to the Main section in 2022, should NatWest Group make further distributions in 2022. This leaves one remaining payment of up to £ 500 million to be paid to the Main Section after 2022, in line with the ring-fencing agreement with the Trustee. Such contributions do not constitute a minimum funding requirement as the obligation to pay only arises on the payment of a distribution to shareholders. 5 Pensions continued All schemes 2021 2020 Amounts recognised on the balance sheet £m £m Fund asset at fair value 57,787 57,249 Present value of fund liabilities 46,808 48,864 Funded status 10,979 8,385 Assets ceiling/minimun funding 10,491 7,783 488 602 2021 2020 Net pension assets/(liability) comprises £m £m Net assets of schemes in surplus (included in Other assets, Note 18) 602 723 Net liabilities of schemes in deflicit (included in Other liabilities, Note 21) (114) (121) 488 602 |
Schedule of income statement charge | 2021 2020 £m £m Continuing operations 196 195 Discontinued operations 19 20 (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. |
Principal actuarial assumptions | Principal IAS 19 actuarial assumptions 2021 2020 % % Discount rate 1.8 1.4 Inflation assumption (RPI) 3.3 2.9 Rate of increase in salaries 1.8 1.8 Rate of increase in deferred pensions 3.7 3.0 Rate of increase in pensions in payment 2.5 2.7 Lump sum conversion rate at retirement 18 20 Longevity at age 60: years years Current pensioners Males 27.3 27.1 Females 29.0 29.0 Future pensioners, currently aged 40 Males 28.2 28.3 Females 30.1 30.4 |
Sensitivities of the present value of defined benefit obligations | (Decrease)/ (Decrease)/ Increase in increase in increase in net pension value of value of (obligations)/ assets liabilities assets 2021 £m £m £m 0.25% increase in interest rates/discount rate (2,917) (1,926) (991) 0.25% increase in inflation 1,883 1,329 554 0.25% increase in credit spreads (3) (1,926) 1,923 Longevity increase of one year — 1,790 (1,790) 0.25% additional rate of increase in pensions in payment — 1,485 (1,485) Increase in equity values of 10% (1) 442 — 442 2020 0.25% increase in interest rates/discount rate (2,585) (2,384) (201) 0.25% increase in inflation 2,204 1,603 601 0.25% increase in credit spreads (6) (2,384) 2,378 Longevity increase of one year — 1,930 (1,930) 0.25% additional rate of increase in pensions in payment — 1,608 (1,608) Increase in equity values of 10% (1) 454 — 454 (1) Includes both quoted and private equity. The funded status is most sensitive to movements in credit spreads and longevity. The table below shows the combined change in the funded status of the Main section as a result of larger movements in these assumptions, assuming no changes in other assumptions. Change in life expectancies -2 years -1 years No change + 1 year + 2 years 2021 £bn £bn £bn £bn £bn Change in credit spreads +50 bps 6.9 5.3 3.8 2.3 0.8 No change 3.6 1.8 — (1.8) (3.6) -50 bps (0.3) (2.4) (4.5) (6.6) (8.7) 2020 Change in credit spreads +50 bps 7.8 6.1 4.5 2.9 1.3 No change 3.9 1.9 — (1.9) (3.9) -50 bps (0.6) (2.8) (5.1) (7.4) (9.7) |
Different classes of scheme members proportions | 2021 2020 Membership category % % Active members 10.7 14.2 Deferred members 47.6 50.9 Pensioners and dependants 41.7 34.9 100.0 100.0 |
History of defined benefit schemes | Main section All schemes 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets 52,021 51,323 46,555 43,806 44,652 57,787 57,249 51,925 48,752 49,746 Present value of plan obligations 42,020 43,870 39,669 35,466 37,937 46,808 48,864 44,115 39,607 42,378 Net surplus/(deficit) 10,001 7,453 6,886 8,340 6,715 10,979 8,385 7,810 9,145 7,368 Experience gains/(losses) on plan liabilities 241 427 275 (122) (107) 237 455 279 (81) (93) Experience gains/(losses) on plan assets 841 5,486 3,021 (1,891) 1,580 872 6,027 3,556 (2,090) 1,728 Actual return on plan assets 1,554 6,422 4,266 (768) 2,735 1,667 7,064 4,930 (848) 3,013 Actual return on plan assets % 3.0% 13.8 % 9.7 % (1.7) % 6.2 % 2.9 % 13.6 % 10.1 % (1.7) % 6.1 % |
Auditor's remuneration (Tables)
Auditor's remuneration (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Auditor's remuneration | |
Schedule of auditor's remuneration | 2021 2020 2019 £m £m £m Fees payable for : - the audit of NatWest Group’s annual accounts (1) 4.4 4.7 3.8 - the audit of NatWest Group plc’s subsidiaries (1) 29.6 30.6 25.7 - audit-related assurance services (1,2) 5.3 4.7 3.2 Total audit and audit-related assurance services fees 39.3 40.0 32.7 Other assurance services 0.4 0.6 1.2 Corporate finance services (3) 0.5 0.4 0.6 Total other services 0.9 1.0 1.8 (1) The 2021 audit fee was approved by the Group Audit Committee. At 31 December 2021, £19.7 million has been billed and paid in respect of the 2021 NatWest Group audit fees. (2) Comprises fees of £1.1 million (2020 - £1.1 million) in relation to reviews of interim financial information, £3.5 million (2020 - £3.2 million) in respect of reports to NatWest Group’s regulators in the UK and overseas, and £0.7 million (2020 - £0.4 million) in relation to non-statutory audit opinions. (3) Comprises fees of £0.5 million (2020 - £0.4 million) in respect of work performed by the auditors as reporting accountants on debt and equity issuances undertaken by NatWest Group . |
Tax (Tables)
Tax (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tax | |
Schedule of current and deferred tax expense | 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Current tax Charge for the year (1,036) (191) (673) Over provision in respect of prior years 31 86 122 (1,005) (105) (551) Deferred tax (Charge)/credit for the year (185) 176 38 UK tax rate change impact (2) 165 75 — Net increase/(decrease) in the carrying value of deferred tax assets in respect of UK, Ireland and Netherlands losses 12 (130) 55 Over/(under) provision in respect of prior years (3) 17 (90) 19 Tax charge for the year (996) (74) (439) (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (2) It was announced in the UK Government’s budget on 3 March 2021 that the main UK corporation tax rate will increase from 19% to 25% from 1 April 2023. This legislative change was enacted on 10 June 2021. (3) 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. |
Schedule of reconciliation of actual tax charge from the expected tax charge | 2021 2020 (1) 2019 (1) Continuing operations £m £m £m Expected tax (charge)/credit (766) 92 (757) Losses and temporary differences in year where no deferred tax asset recognised (51) (43) (24) Foreign profits taxed at other rates (11) (29) 7 Non deductible goodwill impairment (16) — — Items not allowed for tax: - losses on disposals and write-downs (55) (22) (71) - UK bank levy (18) (32) (26) - regulatory and legal actions (74) 14 (165) - other disallowable items (28) (70) (62) Non-taxable items: - Alawwal bank merger gain disposal — — 215 - FX recycling on the liquidation of RFS Holdings — — 279 - other non-taxable items 73 28 80 Taxable foreign exchange movements 8 (3) (1) Unrecognised losses brought forward and utilised 10 16 16 (Decrease)/increase in the carrying value of deferred tax assets in respect of: - UK losses (9) 7 129 - Ireland losses (27) (137) (74) - Netherlands losses 48 — — Banking surcharge (341) (27) (199) Tax on paid-in equity 48 61 73 UK tax rate change impact 165 75 — Adjustments in respect of prior years 48 (4) 141 Actual tax charge (996) (74) (439) (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. |
Schedule of deferred tax asset and liability | £m £m Deferred tax asset (1,195) (901) Deferred tax liability 359 291 Net deferred tax asset (836) (610) |
Schedule of net deferred tax asset | Tax Accelerated losses capital Expense Financial carried Pension allowances provisions instruments forward Other Total £m £m £m £m £m £m £m At 1 January 2020 (139) 172 (118) 315 (951) (24) (745) Charge/(credit) to income statement: (1) - continuing operations 15 (234) 33 114 46 (5) (31) - discontinued operations — — — — 9 — 9 Charge/(credit) to other comprehensive income 119 — — 51 — (7) 163 Currency translation and other adjustments 1 (2) — — (9) 4 (6) At 1 January 2021 (4) (64) (85) 480 (905) (32) (610) Charge/(credit) to income statement: - continuing operations 19 21 (5) (10) (1) (33) (9) - discontinued operations — — — — 3 — 3 Charge/(credit) to other comprehensive income 10 — (7) (222) — (5) (224) Currency translation and other adjustments (1) 1 — — 4 — 4 At 31 December 2021 24 (42) (97) 248 (899) (70) (836) (1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. |
Schedule of recognised deferred tax assets in respect of tax losses | 2021 2020 £m £m UK tax losses carried forward - NWM Plc 56 62 - NWB Plc 608 592 - RBS plc 176 200 - Ulster Bank Limited — 8 Total 840 862 Overseas tax losses carried forward - UBIDAC 11 43 - NWM N.V. 48 — 899 905 |
Discontinued operations and a_2
Discontinued operations and assets and liabilities of disposal groups (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued operations and assets and liabilities of disposal groups | |
Schedule of profit/(loss) net of tax and operating cash flows attributable to discontinued operations | 2021 2020 2019 £m £m £m Interest receivable 260 273 248 Net interest income 260 273 248 Non-interest income 9 15 18 Total income 269 288 266 Operating expenses (47) (47) (45) Profit before impairment losses 222 241 221 Impairment releases/(losses) 57 (111) 28 Operating profit before tax 279 130 249 Tax (charge)/credit (3) (9) 7 Profit from discontinued operations, net of tax 276 121 256 2021 2020 2019 £m £m £m Net cash flows from operating activities 1,290 (895) (3,909) Net increase/(decrease) in cash and cash equivalents 1,290 (895) (3,909) |
Schedule of assets and liabilities of disposal groups | 2021 £m Assets of disposal groups Loans to customers - amortised cost 9,002 Derivatives 5 Other assets 8 9,015 Liabilities of disposal groups Other liabilities 5 5 Net assets of disposal groups 9,010 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings per share | |
Schedule of earnings per share | 2021 2020 2019 £m £m £m Earnings Profit/(loss) from continuing operations attributable to ordinary shareholders 2,674 (874) 2,877 Profit from discontinued operations attributable to ordinary shareholders 276 121 256 Profit/(loss) attributable to ordinary shareholders 2,950 (753) 3,133 Weighted average number of shares (millions) Weighted average number of ordinary shares outstanding during the year 11,622 12,095 12,067 Effect of dilutive share options and convertible securities (1) 45 — 35 Diluted weighted average number of ordinary shares outstanding during the year 11,667 12,095 12,102 (1) As there was a loss from continuing operations attributable to the parent company for the period to 31 December 2020, the effect of share options and convertible securities was not dilutive. |
Financial instruments - class_2
Financial instruments - classification (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Financial instruments - classification | |
Schedule of classification for financial assets and liabilities | Amortised Other MFVTPL FVOCI cost assets Total Assets £m £m £m £m £m Cash and balances at central banks — — 177,757 — 177,757 Trading assets 59,158 — — — 59,158 Derivatives (1) 106,139 — — — 106,139 Settlement balances — — 2,141 — 2,141 Loans to bank - amortised cost (2) — — 7,682 — 7,682 Loans to customers - amortised cost (3) — — 358,990 — 358,990 Other financial assets 317 37,266 8,562 — 46,145 Intangible assets — — — 6,723 6,723 Other assets — — — 8,242 8,242 Assets of disposal groups — — — 9,015 9,015 31 December 2021 165,614 37,266 555,132 23,980 781,992 Cash and balances at central banks 124,489 124,489 Trading assets 68,990 68,990 Derivatives (1) 166,523 166,523 Settlement balances 2,297 2,297 Loans to bank - amortised cost (2) 6,955 6,955 Loans to customers - amortised cost (3) 360,544 360,544 Other financial assets 440 44,902 9,806 55,148 Intangible assets 6,655 6,655 Other assets 7,890 7,890 31 December 2020 235,953 44,902 504,091 14,545 799,491 Held-for- Amortised Other trading DFV cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (4) — — 26,279 — 26,279 Customer deposits — — 479,810 — 479,810 Settlement balances — — 2,068 — 2,068 Trading liabilities 64,598 — — — 64,598 Derivatives (1) 100,835 — — — 100,835 Other financial liabilities (5) — 1,671 47,655 — 49,326 Subordinated liabilities — 703 7,726 — 8,429 Notes in circulation — — 3,047 — 3,047 Other liabilities (6) — — 1,356 4,441 5,797 31 December 2021 165,433 2,374 567,941 4,441 740,189 Bank deposits (4) 20,606 20,606 Customer deposits 431,739 431,739 Settlement balances 5,545 5,545 Trading liabilities 72,256 72,256 Derivatives (1) 160,705 160,705 Other financial liabilities (5) 2,403 43,408 45,811 Subordinated liabilities 793 9,169 9,962 Notes in circulation 2,655 2,655 Other liabilities (6) 1,882 4,506 6,388 31 December 2020 232,961 3,196 515,004 4,506 755,667 (1) Includes net hedging derivatives assets of £ 44 million (2020 - £93 million) and net hedging derivatives liabilities of £ 120 million (2020 - £130 million). (2) Includes items in the course of collection from other banks of £67 million (2020 - £148 million). (3) Includes finance lease receivables of £8,531 million (2020 - £9,061 million). (4) Includes items in the course of transmission to other banks of £56 million (2020 - £12 million). (5) The carrying amount of other customer accounts designated at fair value through profit or loss is the same as the principal amount for both periods. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. (6) Includes lease liabilities of £1,263 million (2020 - £1,698 million) held at amortised cost. |
Schedule of financial assets and liabilities | 2021 2020 £m £m Reverse repos Trading assets 20,742 19,404 Loans to banks - amortised cost 189 153 Loans to customers - amortised cost 25,962 25,011 Repos Bank deposits 7,912 6,470 Customer deposits 14,541 5,167 Trading liabilities 19,389 19,036 |
Schedule of financial assets and liabilities that are offset on the balance sheet | Instruments which can be offset Potential for offset not recognised by IFRS Effect of Net amount after Instruments master netting the effect of netting outside IFRS Balance and similar Cash Securities agreements and netting Balance Gross offset sheet agreements collateral collateral related collateral agreements sheet total 2021 £m £m £m £m £m £m £m £m £m Derivative assets 113,220 (7,961) 105,259 (85,006) (15,035) (2,428) 2,790 880 106,139 Derivative liabilities 108,594 (8,568) 100,026 (85,006) (9,909) (2,913) 2,198 809 100,835 Net position (1) 4,626 607 5,233 — (5,126) 485 592 71 5,304 Trading reverse repos 44,529 (24,422) 20,107 (900) — (19,136) 71 635 20,742 Trading repos 42,664 (24,422) 18,242 (900) — (17,341) 1 1,147 19,389 Net position 1,865 — 1,865 — — (1,795) 70 (512) 1,353 Non trading reverse repos 33,729 (7,594) 26,135 — — (26,135) — 16 26,151 Non trading repos 30,047 (7,594) 22,453 — — (22,453) — — 22,453 Net position 3,682 — 3,682 — — (3,682) — 16 3,698 2020 Derivative assets 176,425 (10,807) 165,618 (137,086) (19,608) (5,053) 3,871 905 166,523 Derivative liabilities 171,614 (11,540) 160,074 (137,086) (15,034) (4,921) 3,033 631 160,705 Net position (1) 4,811 733 5,544 — (4,574) (132) 838 274 5,818 Trading reverse repos 43,908 (24,867) 19,041 (929) — (18,040) 72 363 19,404 Trading repos 42,203 (24,867) 17,336 (929) — (16,407) — 1,700 19,036 Net position 1,705 — 1,705 — — (1,633) 72 (1,337) 368 Non trading reverse repos 36,117 (10,953) 25,164 — — (25,164) — — 25,164 Non trading repos 22,590 (10,953) 11,637 — — (11,637) — — 11,637 Net position 13,527 — 13,527 — — (13,527) — — 13,527 (1) The net IFRS offset balance of £607 million (2020 - £733 million)relates to variation margin netting reflected on other balance sheet lines . |
Schedule of IBOR related exposure by currency and nature of financial instruments | Rates subject to IBOR reform GBP LIBOR USD IBOR (1) Other IBOR (2) Total 2021 £m £m £m £m Trading assets 62 90 — 152 Loans to banks - amortised cost — 11 — 11 Loans to customers - amortised cost 4,788 4,565 267 9,620 Other financial assets 864 768 — 1,632 Bank deposits — 37 — 37 Customer deposits — — — — Trading liabilities 31 166 — 197 Other financial liabilities 2,390 7,023 131 9,544 Subordinated liabilities — 90 — 90 Loan commitments (3) 1,016 6,366 55 7,437 Derivatives notional (£bn) 3.6 1,152.0 — 1,155.6 Rates subject to IBOR reform GBP LIBOR USD IBOR (1) EURIBOR (2) Other IBOR Total 2020 £m £m £m £m £m Trading assets 75 60 348 1 484 Loans to banks - amortised cost 23 82 101 — 206 Loans to customers - amortised cost 40,299 6,366 4,950 234 51,849 Other financial assets 2,918 303 370 — 3,591 Bank deposits — 367 — 107 474 Customer deposits — — — 4 4 Trading liabilities 54 414 269 2 739 Other financial liabilities 2,492 9,806 5,902 196 18,396 Subordinated liabilities 8 850 438 — 1,296 Loan commitments (3) 25,616 9,228 7,176 682 42,702 Derivatives notional (£bn) 1,407.5 1,368.8 2,358.7 289.6 5,424.6 (1) In 2021 the FCA declared that USD IBOR will be non-representative post 30 June 2023; at the time of preparing the 31 December 2020 Annual Report on Form 20-F this date was expected to be 31 December 2021. (2) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for EURIBOR has ended. 31 December 2020 data includes EURIBOR exposure as subject to reform. (3) Certain loan commitments are multi-currency facilities. Where these are fully undrawn, they are allocated to the principal currency of the facility. Where the facilities are partly drawn, the remaining loan commitment is allocated to the currency with the largest drawn amount. |
Summary of issuance of certain capital instruments | 31 December 31 December 2021 2020 £m £m US$1.15 billion 8% notes 734 734 US$2.65 billion 8.625% notes — 2,046 |
Financial instruments - valua_2
Financial instruments - valuation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Financial instruments - classification | |
Schedule of financial assets and liabilities at fair value by valuation hierarchy | 2021 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total £m £m £m £m £m £m £m £m Assets Trading assets Loans — 33,482 721 34,203 — 39,550 225 39,775 Securities 19,563 5,371 21 24,955 21,535 7,599 81 29,215 Derivatives — 105,222 917 106,139 — 165,441 1,082 166,523 Other financial assets — — Loans — 359 207 566 — 185 168 353 Securities 28,880 7,951 186 37,017 35,972 8,850 167 44,989 Total financial assets held at fair value 48,443 152,385 2,052 202,880 57,507 221,625 1,723 280,855 As % of total fair value assets 24 % 75 % 1 % 20 % 79 % 1 % Liabilities Trading liabilities Deposits — 38,658 2 38,660 — 44,062 7 44,069 Debt securities in issue — 974 — 974 — 1,408 — 1,408 Short positions 20,507 4,456 1 24,964 19,045 7,734 — 26,779 Derivatives — 100,229 606 100,835 — 159,818 887 160,705 Other financial liabilities — — Debt securities in issue — 1,103 — 1,103 — 1,607 — 1,607 Other deposits — 568 — 568 — 796 — 796 Subordinated liabilities — 703 — 703 — 793 — 793 Total financial liabilities held at fair value 20,507 146,691 609 167,807 19,045 216,218 894 236,157 As % of total fair value liabilities 12 % 88 % 0 % 8 % 92 % 0 % (1) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. (2) For an analysis of debt securities held at mandatory fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Risk and capital management – Credit risk. |
Schedule of financial instruments valuation adjustments | 2021 2020 Adjustment £m £m Funding – FVA 90 140 Credit – CVA 390 390 Bid – Offer 113 148 Product and deal specific 119 172 712 850 |
Schedule of valuation techniques for unobservable inputs of level 3 financial instruments | 2021 2020 Financial instrument Valuation technique Unobservable inputs Units Low High Low High Trading assets and Other financial assets Loans Price-based Price % — 106 — 105 Discount cash flow Credit spreads bps 40 102 69 119 Discount cash flow Discount margin bps 46 55 51 226 Debt securities Price-based Price % — 240 — 232 Equity Shares Price-based Price GBP — 30,378 — 27,737 Price-based Price % — 7 — 80 Discount cash flow Discount margin % 6 8 7 9 Net asset valuation Net asset value % 80 120 80 120 Derivative assets and liabilities Credit derivatives Credit derivative pricing Credit spreads bps 6 635 2 500 Correlation % (15) 95 (50) 95 Volatility % 30 108 27 80 Upfront points % — 100 — 100 Recovery rate % — 60 10 40 Interest rate & FX Option pricing Correlation % (50) 100 (50) 100 derivatives Volatility % 17 77 17 60 Constant Prepayment Rate % 2 16 2 18 Mean Reversion % — 92 — 92 Basis volatility bps 8 18 15 21 Inflation volatility % 1 2 1 2 Inflation rate % 2 3 1 2 Equity derivatives Option pricing Correlation % (53) 87 (53) 87 (1) Valuation for private equity investments may be estimated by looking at past prices of similar stocks and from valuation statements where valuations are usually derived from earnings measures such as EBITDA or net asset value (NAV). Similarly, for equity or bond fund investments, prices may be estimated from valuation or credit statements using NAV or similar measures. (2) NatWest Group does not have any material liabilities measured at fair value that are issued with an inseparable third-party credit enhancement. |
Schedule of financial instruments carried at fair value on the balance sheet by valuation sensitivities for level 3 balances | 2021 2020 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 721 10 (10) 225 10 — Securities 21 — — 81 — — Derivatives 917 60 (70) 1,082 80 (80) Other financial assets Loans 207 10 (10) 168 20 (10) Securities 186 20 (20) 167 30 (20) 2,052 100 (110) 1,723 140 (110) Liabilities Trading liabilities Deposits 2 — — 7 — — Debt securities in issue — — — — — — Short positions 1 — — — — — Derivatives 606 30 (30) 887 50 (40) Other financial liabilities — — — — — — 609 30 (30) 894 50 (40) |
Schedule of movement in level 3 assets and liabilities | 2021 2020 Trading Other Trading Other assets financial Total Total assets financial Total Total (2) assets (3) assets liabilities (2) assets (3) assets liabilities £m £m £m £m £m £m £m £m At 1 January 1,388 335 1,723 894 2,233 321 2,554 1,317 Amounts recorded in the income statement (1) (93) (29) (122) (90) 127 (21) 106 (67) Amounts recorded in the statement of comprehensive income — 23 23 — — 63 63 — Level 3 transfers in 125 3 128 20 165 98 263 188 Level 3 transfers out (104) (6) (109) (168) (139) — (139) (368) Purchases/originations (4) 965 452 1,416 305 441 327 768 127 Settlements/other decreases (47) (364) (411) (28) (293) (153) (446) (59) Sales (573) (17) (590) (321) (1,148) (301) (1,449) (245) Foreign exchange and other (3) (3) (6) (3) 2 1 3 1 At 31 December 1,658 394 2,052 609 1,388 335 1,723 894 Amounts recorded in the income statement in respect of balances held at year end - unrealised (93) (32) (126) (90) 129 (22) 107 (68) (1) There were £3 million net losses on trading assets and liabilities (2020 - £194 million net gain) recorded in income from trading activities. Net losses on other instruments of £29 million (2020 - £21 million net losses) were recorded in other operating income and interest income as appropriate. (2) Trading assets comprise assets held at fair value in trading portfolios. (3) Other financial assets comprise fair value through other comprehensive income, designated as at fair value through profit or loss and other fair value through profit or loss. (4) Movement in the period includes new loan originations classified as HTC&S under IFRS 9 and fair valued through other comprehensive income. 2021 purchases include a new leveraged finance loan of £ 450 million. As a result of its composition and illiquid nature, pricing is based on unobservable inputs and the judgment of valuation experts. |
Schedule of carrying value and fair value of financial instruments carried at amortised cost on the balance sheet | Items where fair value approximates Carrying Fair value hierarchy level carrying value value Fair value Level 1 Level 2 Level 3 2021 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 177.8 — — — — — Settlement balances 2.1 — — — — — Loans to banks 0.1 7.5 7.5 — 5.0 2.5 Loans to customers — 359.0 354.1 — 28.0 326.1 Other financial assets - securities — 8.6 8.6 4.4 0.7 3.5 2020 Financial assets Cash and balances at central banks 124.5 — — — — — Settlement balances 2.3 — — — — — Loans to banks 0.1 6.9 6.9 — 3.8 3.1 Loans to customers — 360.5 359.2 — 25.2 334.0 Other financial assets - securities — 9.8 10.1 5.9 1.2 3.0 2021 Financial liabilities Bank deposits 4.9 21.4 21.0 — 18.7 2.3 Customer deposits 442.4 37.4 37.6 — 18.1 19.5 Settlement balances 2.1 — — — Other financial liabilities - debt securities in issue — 47.7 48.6 — 41.4 7.2 Subordinated liabilities — 7.7 8.3 — 8.2 0.1 Notes in circulation 3.0 — — — — — 2020 Financial liabilities Bank deposits 4.4 16.2 16.2 — 11.3 4.9 Customer deposits 371.7 60.0 60.1 — 10.1 50.0 Settlement balances 5.5 — — — — — Other financial liabilities - debt securities in issue — 43.4 44.6 — 34.7 9.9 Subordinated liabilities — 9.2 9.8 — 9.7 0.1 Notes in circulation 2.7 — — — — — |
Financial Instruments - matur_2
Financial Instruments - maturity analysis (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Financial instruments - classification | |
Schedule of residual maturity of financial instruments | 2021 2020 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 177,757 — 177,757 124,489 — 124,489 Trading assets 40,263 18,895 59,158 42,037 26,953 68,990 Derivatives 34,538 71,601 106,139 46,244 120,279 166,523 Settlement balances 2,141 — 2,141 2,297 — 2,297 Loans to banks - amortised cost 7,425 257 7,682 6,835 120 6,955 Loans to customers - amortised cost 103,689 255,301 358,990 87,531 273,013 360,544 Other financial assets 11,151 34,994 46,145 8,901 46,247 55,148 Liabilities Bank deposits 13,715 12,564 26,279 12,315 8,291 20,606 Customer deposits 478,801 1,009 479,810 430,283 1,456 431,739 Settlement balances 2,068 — 2,068 5,545 — 5,545 Trading liabilities 41,664 22,934 64,598 45,037 27,219 72,256 Derivatives 34,593 66,242 100,835 47,361 113,344 160,705 Other financial liabilities 16,060 33,266 49,326 12,403 33,408 45,811 Subordinated liabilities 1,375 7,054 8,429 365 9,597 9,962 Notes in circulation 3,047 — 3,047 2,655 — 2,655 Lease liabilities 238 1,025 1,263 185 1,513 1,698 |
Schedule of undiscounted cash flows payable by contractual maturity | 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2021 £m £m £m £m £m £m Assets by contractual maturity up to 20 years Cash and balances at central banks 177,757 — — — — — Derivatives held for hedging (23) (32) 72 15 10 17 Settlement balances 2,141 — — — — — Loans to banks - amortised cost 5,735 1,689 21 — — — Loans to customers - amortised cost 65,760 43,144 63,979 45,057 73,044 90,115 Other financial assets (1) 3,924 7,576 10,467 8,048 7,444 5,523 Finance lease 290 340 746 504 704 377 255,584 52,717 75,285 53,624 81,202 96,032 Liabilities by contractual maturity up to 20 years Bank deposits 13,292 421 566 12,003 — — Customer deposits 473,123 5,440 1,155 73 4 19 Settlement balances 2,068 — — — — — Derivatives held for hedging (57) (31) 561 155 (152) (198) Other financial liabilities 6,967 9,293 16,953 10,062 7,905 292 Subordinated liabilities 66 1,604 3,481 2,170 1,496 563 Other liabilities - Notes in circulation 3,047 — — — — — Lease liabilities 74 161 220 167 281 251 498,580 16,888 22,936 24,630 9,534 927 Guarantees and commitments - notional amount Guarantees (2) 2,055 — — — — — Commitments (3) 118,536 — — — — — 120,591 — — — — — 2020 Assets by contractual maturity up to 20 years Cash and balances at central banks 124,489 — — — — — Derivatives held for hedging 14 18 96 — 12 6 Settlement balances 2,297 — — — — — Loans to banks - amortised cost 5,600 1,245 — — 1 110 Loans to customers - amortised cost 47,507 46,718 65,138 58,680 81,544 88,155 Other financial assets (1) 4,019 5,919 12,592 10,791 11,855 5,774 Finance lease 48 366 840 671 895 545 183,974 54,266 78,666 70,142 94,307 94,590 Liabilities by contractual maturity up to 20 years Bank deposits 11,217 1,078 3,241 5,038 — — Customer deposits 421,763 8,528 1,407 23 26 20 Settlement balances 5,545 — — — — — Derivatives held for hedging 36 (17) 94 3 64 (2) Other financial liabilities 4,716 8,144 15,558 11,470 7,358 254 Subordinated liabilities 73 685 4,387 3,444 923 562 Other liabilities - Notes in circulation 2,655 — — — — — Lease liabilities 51 135 294 245 429 497 446,056 18,553 24,981 20,223 8,800 1,331 Guarantees and commitments - notional amount Guarantees (2) 2,244 — — — — — Commitments (3) 121,922 — — — — — 124,166 — — — — — (1) Other financial assets excludes equity shares. (2) 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. (3) 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. |
Trading assets and liabilities
Trading assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Trading assets and liabilities | |
Schedule of trading assets and liabilities | 2021 2020 Assets £m £m Loans Reverse repos 20,742 19,404 Collateral given 12,047 18,760 Other loans 1,414 1,611 Total loans 34,203 39,775 Securities Central and local government - UK 6,919 4,184 - US 3,329 5,149 - other 10,929 16,436 Financial institutions and corporate 3,778 3,446 Total securities 24,955 29,215 Total 59,158 68,990 Liabilities Deposits Repos 19,389 19,036 Collateral received 17,718 23,229 Other deposits 1,553 1,804 Total deposits 38,660 44,069 Debt securities in issue 974 1,408 Short positions 24,964 26,779 Total 64,598 72,256 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivatives | |
Schedule of actual movements in the fair value of the hedged items attributable to the hedged risk | 2021 2020 Notional Assets Liabilities Notional Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts 3,167 38,517 39,286 3,328 52,239 55,107 Interest rate contracts 8,919 67,458 61,206 10,703 114,115 105,214 Credit derivatives 14 154 343 15 161 376 Equity and commodity contracts — 10 — 1 8 8 106,139 100,835 166,523 160,705 |
Schedule of derivatives held for hedging purposes | 2021 2020 Changes in fair Changes in fair value used for value used for Notional Assets Liabilities hedge ineffectiveness (1) Notional Assets Liabilities hedge ineffectiveness (1) £bn £m £m £m £bn £m £m £m Fair value hedging Interest rate contracts 65.6 1,176 2,057 897 65.5 1,878 3,844 (875) Cash flow hedging Interest rate contracts 133.1 952 1,149 (931) 128.8 2,035 1,210 217 Exchange rate contracts 7.3 30 109 27 10.8 37 116 (55) Net investment hedging Exchange rate contracts 0.5 11 1 7 0.2 — 9 11 206.5 2,169 3,316 — 205.3 3,950 5,179 (702) IFRS netting/Clearing house settlements (2,125) (3,196) (3,857) (5,049) 44 120 93 130 (1) The change in fair value used for hedge ineffectiveness includes instruments that were decrecognised in the year. |
Schedule of notional of hedging instruments affected by interest rate benchmark reform (SONIA not subject to reform) | 2021 2020 £bn £bn Fair value hedging EURIBOR (1) — 13.6 GBP LIBOR — 11.2 USD LIBOR (2) 20.2 26.6 Other currency LIBOR — 1.1 Cash flow hedging EURIBOR (1) — 5.2 GBP LIBOR — 51.7 SOFR (3) 0.2 — USD LIBOR (2) 3.1 2.7 (1) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for EURIBOR has ended. (2) In 2021 the FCA declared that USD LIBOR will be non-representative post 30 June 2023; at the time of preparing the 2020 disclosures this date was expected to be 31 December 2021. (3) Hedge relationships subject to reform are those where either the hedged item or the hedging instrument is subject to the IBOR reform. (4) Notional of £1 billion cross currency derivative contracts in cash flow hedge relationships will convert to repricing off the relevant risk-free rate at the first repricing date post cessation. |
Schedule of period in which the hedging contracts ends | 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 20+ years Total 2021 £bn £bn £bn £bn £bn £bn £bn £bn Fair value hedging Hedging assets - interest rate risk 0.9 2.5 5.5 5.7 6.2 4.9 4.5 30.2 Hedging liabilities - interest rate risk 1.1 4.2 11.8 9.3 8.4 0.6 0.0 35.4 Cash flow hedging Hedging assets Interest rate risk 5.4 8.1 14.3 24.5 11.4 — — 63.7 Average fixed interest rate (%) 1.40 1.19 1.35 0.65 0.82 — — 0.97 Hedging liabilities Interest rate risk 8.8 21.1 33.0 3.3 2.5 0.7 — 69.4 Average fixed interest rate (%) 0.50 0.24 0.41 0.47 1.01 4.55 — 0.44 Hedging assets Exchange rate risk — — — — — — — — Hedging liabilities Exchange rate risk 0.1 2.4 3.5 1.3 — — — 7.3 Net investment hedging Exchange rate risk 0.5 — — — — — — 0.5 2020 Fair value hedging Hedging assets - interest rate risk 1.2 2.3 6.3 7.4 8.9 5.1 4.2 35.4 Hedging liabilities - interest rate risk — 0.6 10.1 11.6 7.1 0.5 0.2 30.1 Cash flow hedging Hedging assets Interest rate risk 0.7 10.5 19.3 13.9 10.5 0.1 — 55.0 Average fixed interest rate (%) 1.28 1.22 1.51 1.06 0.92 3.12 — 1.23 Hedging liabilities Interest rate risk 1.6 28.9 36.8 3.4 2.4 0.7 — 73.8 Average fixed interest rate (%) 1.14 0.78 0.37 1.25 0.65 4.55 — 0.64 Hedging assets Exchange rate risk — — 0.1 — — — — 0.1 Hedging liabilities Exchange rate risk — 3.3 5.3 1.0 1.1 — — 10.7 Net investment hedging Exchange rate risk 0.1 0.1 — — — — — 0.2 |
Schedule of assets and liabilities subject to hedging derivatives | Impact on Changes in fair hedged items Carrying value Impact on value used as ceased to be of hedged hedged items a basis to adjusted for assets and included in determine hedging liabilities carrying value ineffectiveness (1) gains or losses 2021 £m £m £m £m Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,603 701 (478) 69 Other financial assets - securities 30,882 518 (1,576) — Total 37,485 1,219 (2,054) 69 Other financial liabilities - debt securities in issue 34,371 454 953 — Subordinated liabilities 6,235 (9) 255 — Total 40,606 445 1,208 — Cash flow hedging - interest rate Loans to banks and customers - amortised cost 63,025 1,984 Other financial assets - securities 714 26 Total 63,739 2,010 Cash flow hedging - interest rate Bank and customer deposits 68,383 (1,084) Other financial liabilities - debt securities in issue 1,006 (21) Total 69,389 (1,105) Cash flow hedging - exchange rate Loans to banks and customer - amortised cost 21 — Other financial assets - securities 2 — Total 23 — Other financial liabilities - debt securities in issue 6,337 (5) Subordinated liabilities 742 (12) Other 200 (10) Total 7,279 (27) 2020 Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,858 1,228 323 77 Other financial assets - securities 35,754 2,268 1,568 — Total 42,612 3,496 1,891 77 Other financial liabilities - debt securities in issue 29,317 1,336 (746) — Subordinated liabilities 6,441 293 (268) 10 Total 35,758 1,629 (1,014) 10 Cash flow hedging - interest rate Loans to banks and customers - amortised cost 53,335 (601) Other financial assets - securities 1,550 (16) Total 54,885 (617) Cash flow hedging - interest rate Bank and customer deposits 72,880 409 Other financial liabilities - debt securities in issue 1,014 13 Total 73,894 422 Cash flow hedging - exchange rate Loans to banks and customer - amortised cost 112 1 Other financial assets - securities 30 — Total 142 1 Cash flow hedging - exchange rate Other financial liabilities - debt securities in issue 6,272 20 Subordinated liabilities 4,194 36 Other 152 (2) Total 10,618 54 (1) The change in fair value used for hedge ineffectiveness includes instruments that were derecognised in the year. |
Schedule of risk exposures will be affected by interest rate benchmark reform (notional, fair value) | 2021 2020 Hedged Hedged Notional adjustment Notional adjustment £bn £m £bn £m Fair value hedging EURIBOR (1) — — 15.1 27 GBP LIBOR — — 11.4 1,178 USD LIBOR (2) 21.8 7 28.1 (427) Other currency LIBOR — — 1.1 1 Cash flow hedging EURIBOR (1) — — 4.1 (76) GBP LIBOR — — 10.5 (473) USD LIBOR (2) 3.3 21 2.7 (61) BOE Base rate (3) — — 40.7 (156) ECB REFI rate (3) — — 1.2 — SONIA (3) — — 0.6 4 (1) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for EURIBOR has ended. (2) In 2021 the FCA declared that USD LIBOR will be non-representative post 30 June 2023; at the time of preparing the 2020 disclosures this date was expected to be 31 December 2021. (3) Hedge relationships subject to reform are those where either the hedged item or the hedging instrument is subject to the IBOR reform. (4) Notional of £6.5 billion GBP LIBOR hedged items in cash flow hedge relationships will convert to repricing off SONIA at the first repricing date post cessation. |
Schedule of analysis of cash flow reserve and foreign exchange reserve | 2021 2020 INR/GBP 106.58 95.29 USD/GBP 1.38 1.36 CHF/GBP 1.25 n/a JPY/GBP 132.93 132.93 JPY/EUR n/a 120.21 CNH/GBP 8.74 n/a For net investment hedging of exchange rate risk, the average foreign exchange rates applicable were as below for the main currencies hedged. 2021 2020 SEK/GBP 11.74 11.15 DKK/GBP 8.85 8.28 NOK/GBP 12.12 12.73 AED/USD 3.67 n/a USD/GBP 1.32 n/a 2021 2020 Foreign Foreign Cash flow exchange Cash flow exchange hedge reserve hedge reserve hedge reserve hedge reserve £m £m £m £m Continuing Interest rate risk (295) — 695 — Foreign exchange risk 23 53 22 (13) De-designated Interest rate risk (297) — (424) — Foreign exchange risk 10 (759) (1) (775) Total (559) (706) 292 (788) 2021 2020 Foreign Foreign Cash flow exchange hedge Cash flow exchange hedge hedge reserve reserve hedge reserve reserve £m £m £m £m Amount recognised in equity Interest rate risk (700) — 318 — Foreign exchange risk 13 88 3 (57) Total (687) 88 321 (57) Amount transferred from equity to earnings Interest rate risk to net interest income (181) — (19) — Interest rate risk to non-interest income (1) 20 — — — Foreign exchange risk to net interest income (4) 2 (35) — Foreign exchange risk to non-interest income 1 (2) — 2 Foreign exchange risk to operating expenses 3 — 4 — Total (161) — (50) 2 (1) There was £20 million reclassified from the cash flow reserve to earnings due to forecasted cash flows that are no longer expected to occur. |
Schedule of hedge ineffectiveness recognized in other operating income | 2021 2020 2019 £m £m £m Fair value hedging (Losses)/gains on hedged items attributable to the hedged risk (846) 877 610 Gains/(losses) on the hedging instruments 897 (875) (585) Fair value hedging ineffectiveness 51 2 25 Cash flow hedging Interest rate risk (26) 22 23 Cash flow hedging ineffectiveness (26) 22 23 Total 25 24 48 |
Loan impairment provisions (Tab
Loan impairment provisions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loan impairment provisions | |
Schedule of loan exposure and impairment metrics | 2021 2020 £m £m Loans - amortised cost Stage 1 330,824 287,124 Stage 2 33,981 78,917 Stage 3 5,022 6,358 Of which: individual 1,215 2,292 Of which: collective 3,807 4,066 369,827 372,399 ECL provisions (1) - Stage 1 302 519 - Stage 2 1,478 3,081 - Stage 3 2,026 2,586 Of which: individual 363 831 Of which: collective 1,663 1,755 3,806 6,186 ECL provision coverage (2,3) - Stage 1 (%) 0.09 0.18 - Stage 2 (%) 4.35 3.90 - Stage 3 (%) 40.34 40.67 1.03 1.66 Continuing operations Impairment (releases)/losses ECL (release)/charge (3,4) (1,278) 3,131 Stage 1 (1,377) (89) Stage 2 (187) 2,601 Stage 3 286 619 Of which: individual 20 194 Of which: collective 266 425 Amounts written off 876 937 Of which: individual 455 191 Of which: collective 421 746 (1) Includes £5 million (2020 - £6 million) related to assets classified as FVOCI. (2) ECL provisions coverage is calculated as total ECL provisions divided by third party loans – amortised cost and FVOCI. (3) Includes a £3 million charge (2020 - £12 million charge) related to other financial assets, of which £2 million release (2020 - £2 million charge) related to assets classified as FVOCI; and £34 million release (2020 - £28 million charge) related to contingent liabilities. (4) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8. (5) The table shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to Financial instruments within the scope of the IFRS 9 ECL framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £176.3 billion (2020 - £122.8 billion) and debt securities of £44.9 billion (2020 – £53.8 billion). |
Other financial assets (Tables)
Other financial assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other financial assets | |
Schedule of other financial assets | Debt securities Central and local government Other Equity Other UK US Other debt Total shares loans Total 2021 £m £m £m £m £m £m £m £m Mandatory fair value through profit or loss — — — 6 6 13 298 317 Fair value through other comprehensive income (1) 11,938 10,086 5,604 9,058 36,686 312 268 37,266 Amortised cost 3,821 156 81 4,504 8,562 — — 8,562 Total 15,759 10,242 5,685 13,568 45,254 325 566 46,145 2020 Mandatory fair value through profit or loss — — — 88 88 14 338 440 Fair value through other comprehensive income (1) 17,458 11,742 6,802 8,591 44,593 294 15 44,902 Amortised cost 4,997 235 116 4,458 9,806 — — 9,806 Total 22,455 11,977 6,918 13,137 54,487 308 353 55,148 (1) Upon initial recognition, the Group occasionally irrevocably designates some of its equity investments as equity instruments at FVOCI when they meet the definition of equity under IAS 32 Financial instruments: presentation, are not held for trading or they are held for strategic purposes. Such classification 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 profit 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. |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Intangible assets | |
Schedule of Intangible assets | 2021 2020 Goodwill Other (1) Total Goodwill Other (1) Total Cost £m £m £m £m £m £m At 1 January 9,939 2,592 12,531 9,980 2,293 12,273 Currency translation and other adjustments — 29 29 — (1) (1) Additions — 479 479 — 348 348 Disposals and write-off of fully amortised assets — (50) (50) (41) (48) (89) At 31 December 9,939 3,050 12,989 9,939 2,592 12,531 Accumulated amortisation and impairment At 1 January 4,332 1,544 5,876 4,373 1,278 5,651 Currency translation and other adjustments — 31 31 — 1 1 Disposals and write-off of fully amortised assets — (28) (28) (41) (26) (67) Impairment of intangible assets 85 2 87 — 9 9 Amortisation charge for the year — 300 300 — 282 282 At 31 December 4,417 1,849 6,266 4,332 1,544 5,876 Net book value at 31 December 5,522 1,201 6,723 5,607 1,048 6,655 (1) Principally internally generated software. |
Schedule of key assumptions applied in calculating the recoverable amount and sensitivities to changes in those assumptions for Commercial Banking | Consequential impact of 1% Consequential impact of 5% Assumptions Recoverable adverse movement adverse movement Terminal Pre-tax Cost: amount exceeded Discount Terminal Forecast Forecast Goodwill growth rate discount rate income ratio (1) carrying value rate growth rate Income cost 31 December 2021 £bn % % % £bn £bn £bn £bn £bn Retail Banking 2.6 1.6 13.9 51.6 6.8 (1.8) (0.8) (2.1) (1.0) Commercial Banking 2.6 1.6 13.9 52.3 6.3 (1.9) (0.8) (2.0) (1.0) RBS International 0.3 1.6 12.1 37.0 2.6 (0.6) (0.3) (0.4) (0.1) 31 December 2020 Retail Banking 2.7 1.6 13.7 48.3 5.9 (1.8) (0.8) (2.0) (0.9) Commercial Banking 2.6 1.6 13.7 53.7 1.5 (1.5) (0.5) (1.8) (0.9) RBS International 0.3 1.6 12.1 42.7 1.1 (0.4) (0.2) (0.3) (0.1) (1) Average Cost:income ratio % over the 5 -year forecast period |
Schedule of impact on Commercial Banking VIU of reasonably possible changes to key assumptions | 2021 2020 Terminal Pre-tax Forecast Forecast Terminal Pre-tax Forecast Forecast growth rate discount rate income cost growth rate discount rate income cost Change in key assumptions to reduce headroom to nil (%) % % % % % % % % Retail Banking (139.2) 8.1 (16.1) 32.7 (25.4) 6.2 (14.6) 33.9 Commercial Banking (47.0) 6.6 (15.7) 32.8 (4.0) 1.3 (4.1) 8.2 RBS International (85.2) 10.3 (30.3) 87.2 (10.8) 4.4 (18.6) 52.8 |
Other assets (Tables)
Other assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other assets | |
Schedule of other assets | 2021 2020 £m £m Interests in associates (1) 716 449 Property, plant and equipment (2) 4,230 4,418 Pension schemes in net surplus (Note 5) 602 723 Prepayments 360 328 Accrued income 248 216 Tax recoverable 190 192 Deferred tax (Note 7) 1,195 901 Acceptances 225 272 Other 476 391 Other assets 8,242 7,890 (1) Includes interest in Business Growth Fund £700 million (2020 - £442 million). (2) The estimated useful lives of NatWest Group's 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 . |
Other financial liabilities (Ta
Other financial liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other financial liabilities | |
Schedule of other financial liabilities | 2021 2020 £m £m Customer deposits - designated as at fair value through profit or loss 568 796 Debt securities in issue - designated as at fair value through profit or loss 1,103 1,607 - amortised cost 47,655 43,408 Total 49,326 45,811 |
Subordinated liabilities (Table
Subordinated liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Subordinated liabilities | |
Schedule of subordinated liabilities | 2021 2020 £m £m Dated loan capital 8,051 8,530 Undated loan capital 259 1,287 Preference shares 119 145 8,429 9,962 |
Schedule of issuances and redemptions | Capital 2021 2020 New issue treatment £m £m NatWest Group plc £1,000 million 3.622% dated notes 2030 (callable between May 2025 to August 2025) Tier 2 — 996 US$850 million 3.032% dated notes 2035 (callable November 2030) Tier 2 — 634 £1000 million 2.105% dated notes 2031 (callable between August 2026 to November 2026) Tier 2 996 — €750 million 1.043% dated notes 2032 (callable between June 2027 to September 2027) Tier 2 638 — 1,634 1,630 Redemptions NatWest Group plc US$2,250 million 6.13% dated notes 2022 (partial redemption) Tier 2 226 499 US$1,000 million 6.10% dated notes 2023 (partial redemption) Tier 2 57 358 US$2,000 million 7.5% dated notes 2020 Tier 2 — 1,528 US$762 million 7.648% undated notes (partial redemption) Ineligible 45 497 US$106 million floating rate undated notes (callable on any interest payment date) Ineligible 77 — US$2,650 million 8.625% dated notes 2021 (callable August 2021) (1) Tier 2 1,914 — US$2,250 million 5.125% dated notes 2024 (partial redemption) Tier 2 729 — US$2,000 million 6% dated notes 2023 (partial redemption) Tier 2 436 — 3,484 2,882 NatWest Markets Plc US$125.6 million floating rate notes 2020 Tier 2 — 97 €145.6 million floating rate dated notes 2023 (partial redemption) Tier 2 20 — £31 million 7.38% notes (partial redemption) Tier 2 29 — £19 million 5.63% notes (partial redemption) Tier 2 20 — 69 97 National Westminister Bank Plc £300 million 6.5% subordinated notes 2021 (not callable) Tier 2 300 — €10 million floating rate notes (callable quarterly) Upper Tier 2 9 — €178 million floating rate notes (callable quarterly) Upper Tier 2 152 — US$193 million floating rate notes (callable semi-annually) Upper Tier 2 138 — US$229 million floating rate notes (callable semi-annually) Upper Tier 2 167 — US$285 million floating rate notes (callable semi-annually) Upper Tier 2 201 — £35 million 11.5% notes (callable December 2022) (partial redemption) Upper Tier 2 3 — £140 million 9% cumulative preference shares of £1 (not callable) Tier 1 24 — 994 — NWM N.V. and subsidiaries US$650 million 6.425% dated notes 2043 (partial redemption) Ineligible 73 187 €15 million 6.00% notes 2020 Tier 2 — 11 73 198 |
Other liabilities (Tables)
Other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other liabilities. | |
Schedule of other liabilities | 2021 2020 Other liabilities £m £m Lease liabilities (Note 23) 1,263 1,698 Provisions for liabilities and charges 1,268 1,852 Retirement benefit liabilities (Note 5) 114 121 Accruals 1,508 990 Deferred income 319 361 Current tax 12 63 Deferred tax (Note 7) 359 291 Acceptances 225 272 Other liabilities (1) 729 740 5,797 6,388 (1) Other liabilities include liabilities of disposal groups of £5 million (2020: nil ). See Note 8 for further information. |
Schedule for provisions for liabilities and charges | Litigation and Financial Customer other commitments redress (1) regulatory (4) Property (3) and guarantees Other (2) Total Provisions for liabilities and charges £m £m £m £m £m £m At 1 January 2021 749 365 271 178 289 1,852 Expected credit loss impairment release — — — (83) — (83) Currency translation and other movements (5) — 2 (2) (7) (12) Charge to income statements 173 307 113 — 196 789 Release to income statement (25) (86) (118) — (82) (311) Provisions utilised (418) (309) (37) — (203) (967) At 31 December 2021 474 277 231 93 193 1,268 (1) Includes payment protection insurance provision which reflects the estimated cost of PPI redress attributable to claims prior to the Financial Conduct Authority (FCA) complaint deadline of 29 August 2019. All pre-deadline complaints have been processed which removes complaint volume estimation uncertainty from the provision estimate. NatWest Group continues to conclude remaining bank-identified closure work and conclude cases with the Financial Ombudsmen Service. (2) Other materially comprises provisions relating to restructuring costs. (3) Property provision materially includes dilapidation provisions. Release in property provision includes the effect of purchase of freeholds for properties where the group was the primary leaseholder. (4) Majority of charge in the year and utilisation of litigation provisions relates to FCA investigation into money laundering. |
Share capital and other equity
Share capital and other equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share capital and other equity | |
Schedule of allotted, called up and fully paid shares | Number of shares 2021 2020 2021 2020 Allotted, called up and fully paid £m £m 000s 000s Ordinary shares of £1 11,468 12,129 11,467,982 12,129,165 Cumulative preference shares of £1 1 1 483 900 Non-cumulative preference shares of US$0.01 (1) — — 10 10 (1) No shares were redeemed in 2021 or 2020. The company announced on 1 February 2022 that it had given notice to holders of the redemption on 31 March 2022 of the Series U Non-cumulative dollar preference shares. |
Schedule of movement in allotted, called up and fully paid ordinary shares | Number of Movement in allotted, called up and fully paid ordinary shares £m shares 000s At 1 January 2020 12,094 12,093,909 Shares issued 35 35,256 At 1 January 2021 12,129 12,129,165 Shares issued 38 37,584 Shares redeemed (699) (698,767) At 31 December 2021 11,468 11,467,982 |
Schedule of non-cumulative preference shares | Number of shares Redemption Redemption Non-cumulative preference shares classified as equity in issue Interest rate date on or after price per share Shares of US$0.01 - Series U 10,130 Floating 29 September 2017 US$100,000 (1) Preference shares where distributions are discretionary are classified as equity. |
Schedule of other equity instruments | 2021 2020 2019 £m £m £m Additional Tier 1 notes US$2.0 billion 7.5% notes callable August 2020 (1) — — 1,277 US$1.15 billion 8% notes callable August 2025 (1) 735 735 735 US$2.65 billion 8.625% notes callable August 2021 (2) — 2,046 2,046 US$1.5 billion 6.000% notes callable December 2025 - June 2026 (3) 1,220 1,220 — GBP£1.0 billion 5.125% notes callable May - November 2027 (4) 998 998 — GBP£0.4 billion – March 2021 issuance (5) 399 — — US$0.75 billion – June 2021 issuance (6) 538 — — 3,890 4,999 4,058 (1) Issued in August 2015. In the event of conversion, converted into ordinary shares at a price of $3.606 nominal per £1 share. (2) Issued in August 2016. In the event of conversion, converted into ordinary shares at a price of $2.284 nominal per £1 share. In July 2021, paid-in equity reclassified to liabilities as the result of a call in August 2021 of US$ 2.65 billion AT1 Capital notes. (3) Issued in June 2020. In the event of conversion, converted into ordinary shares at a price of £1.754 (translated at applicable exchange rate) per £1 share. (4) Issued in November 2020. In the event of conversion, converted into ordinary shares at a price of £1.754 nominal per £1 share. (5) Issued in March 2021. In the event of conversion, converted into ordinary shares at a price of £1.754 nominal per £1 share. (6) Issued in June 2021. In the event of conversion, converted into ordinary shares at a price of £1.754 (translated at applicable exchange rate) per £1 share. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of amounts recognized in consolidated income and balance sheet | 2021 2020 £m £m Amount recognised in consolidated income statement Interest payable (38) (42) Depreciation (1) (167) (209) Rental expenses on short term leases — (1) Income from subleasing right to use assets 4 4 2021 2020 £m £m Amount recognised on balance sheet Right of use assets include property, plant and equipment (2),(3) 733 955 Additions to right of use assets 70 80 Lease liabilities (3),(4) (1,263) (1,698) The total cash outflow for leases is £195 million (2020: £220 million), including payment of principal amount of £164 million (2020: £179 million) which are included in the operating activities in the cash flow statement. (1) Includes impairment of right of use assets of £52 million (2020: £89 million). (2) Includes right of use asset for plant and equipment of £9 million (2020: £8 million) and depreciation of £4 million (2020: £2 million). (3) Includes the effect of the purchase of freeholds for properties where the Group was the primary leaseholder. (4) Contractual cashflows of lease liabilities are shown in Note 12. |
Schedule of amounts included in consolidated income statement for lessor leases | 2021 2020 £m £m Amount included in consolidated income statement Finance leases Finance income on the net investment in leases 298 289 Operating leases Lease income 169 168 |
Schedule of amount receivable under finance leases | 2021 2020 £m £m Amount receivable under finance leases Within 1 year 3,272 3,156 1 to 2 years 2,044 2,231 2 to 3 years 1,443 1,609 3 to 4 years 757 952 4 to 5 years 429 492 After 5 years 1,423 1,688 Lease payments total 9,368 10,128 Unguaranteed residual values 225 232 Future drawdowns (21) (22) Unearned income (891) (1,081) Present value of lease payments 8,681 9,257 Impairments (150) (196) Net investment in finance leases 8,531 9,061 |
Schedule of undiscounted lease receipts from operating leases | 2021 2020 £m £m Amount receivable under operating leases Within 1 year 131 143 1 to 2 years 92 112 2 to 3 years 50 79 3 to 4 years 23 34 4 to 5 years 11 14 After 5 years 9 11 Total 316 393 |
Schedule of nature of operating lease assets on the balance sheet | 2021 2020 Nature of operating lease assets on the balance sheet £m £m Transportation 282 327 Car and light commercial vehicles 21 28 Other 223 245 526 600 |
Schedule of undiscounted lease receipts from investment properties | 2021 2020 £m £m Amount receivable under investment properties Within 1 year 63 67 1 to 2 years 62 127 2 to 3 years 58 54 3 to 4 years 56 76 4 to 5 years 51 88 After 5 years 304 142 Total 594 554 |
Structured entities (Tables)
Structured entities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Structured entities | |
Schedule of RBS's interest in unconsolidated structured entities | 2021 2020 Asset Asset backed Investment backed Investment securitisation funds and securitisation funds and vehicles others Total vehicles others Total £m £m £m £m £m £m Trading assets and derivatives Trading assets 490 117 607 319 46 365 Derivative assets 251 18 269 441 16 457 Derivative liabilities (170) (1) (171) (319) (21) (340) Total 571 134 705 441 41 482 Non trading assets Loans to customers 1,692 361 2,053 1,400 497 1,897 Other financial assets 3,645 379 4,024 3,892 170 4,062 Total 5,337 740 6,077 5,292 667 5,959 Liquidity facilities/loan commitments 1,403 135 1,538 1,482 204 1,686 Maximum exposure 7,311 1,009 8,320 7,215 912 8,127 |
Asset transfers (Tables)
Asset transfers (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Asset transfers | |
Schedule of Assets subject to securities repurchase agreements or security lending transactions | 2021 2020 The following assets have failed derecognition (1) £m £m Trading assets 13,084 20,526 Loans to bank - amortised cost 38 5 Loans to customers - amortised cost 1,837 39 Other financial assets 11,746 11,542 Total 26,705 32,112 (1) Associated liabilities were £24,747 million (2020 - £31,932 million). |
Schedule of assets pledged as collateral | 2021 2020 Assets pledged against liabilities £m £m Trading assets 23,601 28,728 Loans to banks - amortised cost 62 49 Loans to customers - amortised cost 20,108 15,939 Other financial assets (1) 3,624 4,966 Total 47,395 49,682 (1) Includes assets pledged for pension derivatives and stock borrowings. |
Schedule of analysis of asset categories for those own-asset securitisations where the transferred assets continue to be recorded on NatWest Group's balance sheet | 2021 2020 Debt Securities in issue Debt Securities in issue Held by Held by Held by Held by third NatWest third NatWest Assets parties Group (1) Total Assets parties Group (1) Total Asset Type £m £m £m £m £m £m £m £m Mortgages - Rol 1,244 — 1,314 1,314 1,921 243 1,848 2,091 Cash deposits 42 146 1,286 2,067 (1) Debt securities retained by NatWest Group may be pledged with central banks. |
Capital resources (Tables)
Capital resources (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Capital resources | |
Schedule of regulatory capital | PRA transitional basis 2021 2020 £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity 41,796 43,860 Preference shares - equity (494) (494) Other equity instruments (3,890) (4,999) 37,412 38,367 Regulatory adjustments and deductions Own credit 21 (1) Defined benefit pension fund adjustment (465) (579) Cash flow hedging reserve 395 (229) Deferred tax assets (761) (760) Prudential valuation adjustments (274) (286) Goodwill and other intangible assets (6,312) (6,182) Foreseeable ordinary dividends (846) (364) Foreseeable charges (825) — Foreseeable pension contributions (365) (266) Adjustment under IFRS 9 transitional arrangements 621 1,747 Other regulatory adjustments (5) — (8,816) (6,920) CET1 capital 28,596 31,447 Additional Tier 1 (AT1) capital Qualifying instruments and related share premium 3,875 4,983 Qualifying instruments and related share premium subject to phase out 571 690 Qualifying instruments issued by subsidiaries and held by third parties subject to phase out — 140 AT1 capital 4,446 5,813 Tier 1 capital 33,042 37,260 Qualifying Tier 2 capital Qualifying instruments and related share premium 4,935 4,882 Qualifying instruments issued by subsidiaries and held by third parties 314 1,191 Other regulatory adjustments 457 400 Tier 2 capital 5,706 6,473 Total regulatory capital 38,748 43,733 |
Memorandum items (Tables)
Memorandum items (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Memorandum items | |
Contingent liabilities and commitments | More than More than 1 year but 3 years but Less than less than less than Over 1 year 3 years 5 years 5 years 2021 2020 £m £m £m £m £m £m Guarantees 993 321 195 546 2,055 2,244 Other contingent liabilities 1,005 435 43 521 2,004 2,321 Standby facilities, credit lines and other commitments 60,029 26,775 27,136 7,368 121,308 124,167 Contingent liabilities and commitments 62,027 27,531 27,374 8,435 125,367 128,732 (1) The maturity of contingent liabilities and commitment is based on the expiry of the agreement between NatWest Group and the customer. |
Schedule of contractual obligations for future expenditure not provided for in the accounts | 2021 2020 £m £m Capital expenditure on property, plant and equipment 16 15 Contracts to purchase goods or services 682 729 698 744 (1) Of which due within 1 year: £301 million (2020 - £267 million). |
Analysis of the net investmen_2
Analysis of the net investment in business interests and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Analysis of the net investment in business interests and intangible assets | |
Schedule of the analysis of the net investment in business interests and intangible assets | 2021 2020 2019 £m £m £m Fair value given for businesses acquired(1) — — (55) Additional investment in associates (51) (40) — Net assets/liabilities purchased (3,128) — — Net outflow of cash in respect of acquisitions (3,179) (40) (55) Sale of interests in associates — 27 — Net assets/liabilities disposed 114 288 351 Profit on disposal 55 3 — Net inflow of cash in respect of disposals 169 318 351 Cash expenditure on intangible assets (479) (348) (380) Net outflow of cash (3,489) (70) (84) (1) 2019 includes the purchase of Free agent. |
Analysis of changes in financ_2
Analysis of changes in financing during the year (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Analysis of changes in financing during the year | |
Schedule of the analysis of changes in financing during the year | Share capital, share premium, and paid-in equity Subordinated liabilities MRELs 2021 2020 2019 2021 2020 2019 2021 2020 2019 £m £m £m £m £m £m £m £m £m At 1 January 18,239 17,246 17,134 9,962 9,979 10,535 20,873 19,249 16,821 Ordinary shares issued — — 17 — — — — — — Issue of paid-in equity 937 2,218 — — — — — — — Issue of subordinated liabilities — — — 1,634 1,631 577 — — — Redemption of subordinated liabilities — — — (4,765) (3,502) (1,108) — — — Interest on subordinated liabilities — — — (321) (510) (533) — — — Issue of MRELs — — — — — — 3,383 1,309 3,640 Maturity/redemption of MRELs — — — — — — — (2) (1,285) Interest on MRELs — — — — — — (647) (671) (428) Net cash inflow/(outflow) from financing 937 2,218 17 (3,452) (2,381) (1,064) 2,736 636 1,927 Ordinary shares issued 87 52 95 — — — — — — Share cancellation (698) — — — — — — — — Effects of foreign exchange — — — (18) (234) (315) (190) (514) (683) Changes in fair value of subordinated liabilities and MRELs (434) 133 317 (649) 829 539 Paid in equity reclassified to subordinated liabilities (2,046) (1,277) — 1,915 1,632 — Loss on sale of subordinated liabilities and MRELs 145 324 — — — — Interest on subordinated liabilities and MRELs 311 509 506 653 673 645 At 31 December 16,519 18,239 17,246 8,429 9,962 9,979 23,423 20,873 19,249 |
Analysis of cash and cash equ_2
Analysis of cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Analysis of cash and cash equivalents | |
Schedule of the analysis of cash and cash equivalents | 2021 2020 2019 £m £m £m At 1 January - cash 124,489 80,993 91,368 - cash equivalents 14,710 19,595 17,568 139,199 100,588 108,936 Net increase/(decrease) in cash and cash equivalents 51,507 38,611 (8,348) At 31 December 190,706 139,199 100,588 Comprising: Cash and balances at central banks 177,757 124,489 80,993 Trading assets 7,137 9,220 12,578 Other financial assets 16 173 459 Loans to banks - amortised cost (1) 5,796 5,317 6,558 Cash and cash equivalents 190,706 139,199 100,588 (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £4,293 million (2020 - £7,592 million; 2019 - £7,570 million). |
Directors' and key management_2
Directors' and key management remuneration (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Directors' and key management remuneration | |
Schedule of directors' remuneration | 2021 2020 Directors' remuneration £000 £000 Non-executive directors emoluments 1,641 1,708 Chairman and executive directors emoluments 4,688 4,349 6,329 6,057 Amounts receivable under long-term incentive plans and share option plans 549 609 Total 6,878 6,666 |
Schedule of compensation of key management | 2021 2020 £000 £000 Short-term benefits 18,124 18,718 Post-employment benefits 380 474 Share-based payments 2,491 3,249 20,995 22,441 |
Transactions with directors a_2
Transactions with directors and key management (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Transactions with directors and key management | |
Schedule of transactions with directors and key management | 2021 2020 £000 £000 Loans to customers - amortised cost 9,128 5,165 Customer deposits 51,018 45,747 |
Accounting policies (Details)
Accounting policies (Details) | 12 Months Ended |
Dec. 31, 2021item | |
Credit cards | |
Financial assets carried at amortised cost | |
Write off period | 4 years |
Accounting developments | |
Number of arrear cycles after which the financial asset is written off | 12 |
Financial Asset Writeoff Period | 4 years |
Minimum | Computer software | |
Intangible assets and goodwill | |
Estimated useful economic lives | 3 years |
Minimum | Other acquired intangibles | |
Intangible assets and goodwill | |
Estimated useful economic lives | 5 years |
Maximum | Retail mortgages | |
Financial assets carried at amortised cost | |
Write off period | 5 years |
Accounting developments | |
Financial Asset Writeoff Period | 5 years |
Maximum | Overdrafts and other unsecured loans | |
Financial assets carried at amortised cost | |
Write off period | 6 years |
Accounting developments | |
Financial Asset Writeoff Period | 6 years |
Maximum | Business loans | |
Financial assets carried at amortised cost | |
Write off period | 5 years |
Accounting developments | |
Financial Asset Writeoff Period | 5 years |
Maximum | Computer software | |
Intangible assets and goodwill | |
Estimated useful economic lives | 12 years |
Maximum | Other acquired intangibles | |
Intangible assets and goodwill | |
Estimated useful economic lives | 10 years |
Net interest income (Details)
Net interest income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Net interest income | |||||
Balances at central banks | £ 99 | £ 90 | £ 321 | ||
Loans to banks - amortised cost | 346 | 246 | 405 | ||
Loans to customers - amortised cost | 8,615 | 8,979 | 9,547 | ||
Other financial assets | 253 | 483 | 854 | ||
Interest receivable | 9,313 | 9,798 | [1] | 11,127 | [1] |
Balances with banks | 204 | 144 | 319 | ||
Customer deposits | 556 | 911 | 1,256 | ||
Other financial liabilities | 670 | 846 | 1,102 | ||
Subordinated liabilities | 267 | 402 | 483 | ||
Internal funding of trading businesses | 2 | 19 | 168 | ||
Interest payable | 1,699 | 2,322 | [1] | 3,328 | [1] |
Net interest income | £ 7,614 | £ 7,476 | [1] | £ 7,799 | [1] |
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Non-interest income (Details)
Non-interest income (Details) € in Millions, £ in Millions | 1 Months Ended | 12 Months Ended | |||||
Jun. 30, 2019GBP (£) | Jun. 30, 2019EUR (€) | Dec. 31, 2021GBP (£) | Dec. 31, 2020GBP (£) | Dec. 31, 2019GBP (£) | |||
Fees and commissions receivable | |||||||
Net fees and commissions | £ 2,124 | £ 2,000 | £ 2,497 | ||||
Income from trading activities | |||||||
Foreign exchange | 364 | 569 | 448 | ||||
Interest rate | (130) | 541 | 532 | ||||
Credit | 83 | 3 | 32 | ||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||||
- debt securities in issue | 6 | (24) | (60) | ||||
- derivative liabilities | (20) | ||||||
Equity, commodities and other | 36 | ||||||
Income from trading activities | 323 | 1,125 | [1] | 932 | [1] | ||
Loss on redemption of own debt | 145 | 324 | |||||
Operating Lease and Other Rental Income | 225 | 232 | 250 | ||||
Changes in the fair value of financial assets and liabilities designated at fair value through profit or loss | (8) | (54) | (17) | ||||
Changes in fair value of other financial assets fair value through profit or loss | 5 | 2 | 58 | ||||
Hedge ineffectiveness | 25 | 24 | 48 | ||||
(Loss)/profit on disposal of amortised cost assets | (15) | (18) | 42 | ||||
Profit/(loss) on disposal of fair value through other comprehensive income assets | 117 | 96 | (22) | ||||
(Loss)/profit on sale of property, plant and equipment | 30 | 13 | 58 | ||||
Share of profits/ (losses)of associated entities | 216 | (30) | (14) | ||||
Profit/(loss) on disposal of subsidiaries and associates | 48 | (16) | 2,224 | ||||
Other income | 13 | (18) | 132 | ||||
Other operating income | 451 | (93) | [1] | 2,759 | [1] | ||
Non-interest income | 2,898 | 3,032 | 6,188 | ||||
Loss on the purchase of freeholds for properties | £ 44 | ||||||
UK mortgages portfolio | |||||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||||
Loss on acquisition of financial assets | 58 | ||||||
Notional amount of financial assets | £ 3,000 | ||||||
RFS Holdings | |||||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||||
FX recycling gain | 1,102 | ||||||
UBIDAC | |||||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||||
Capital repayment | £ 67 | ||||||
Alawwal bank merger | |||||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||||
Profit/(loss) on disposal of subsidiaries and associates | £ 444 | € 523 | |||||
Legacy Liability Release Amount | 256 | ||||||
FX recycling gain | £ 290 | ||||||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Operating expenses (Details)
Operating expenses (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||
Salaries | £ 2,295 | £ 2,494 | £ 2,477 | ||
Bonus awards | 267 | 232 | 299 | ||
Temporary and contract costs | 240 | 258 | 401 | ||
Social security costs | 300 | 316 | 296 | ||
Pension costs | 354 | 340 | 301 | ||
- defined benefit schemes | 215 | 215 | 188 | ||
- defined contribution schemes | 139 | 125 | 113 | ||
Other | 220 | 238 | 202 | ||
Staff costs | 3,676 | 3,878 | [1] | 3,976 | [1] |
Premises and equipment | 1,133 | 1,222 | [1] | 1,258 | [1] |
UK bank levy | 99 | 167 | 134 | ||
Depreciation and amortisation | 923 | 913 | 1,218 | ||
Other administrative expenses | 1,927 | 1,678 | 2,694 | ||
Administrative expenses | 4,082 | 3,980 | 5,304 | ||
Operating expenses | 7,758 | 7,858 | [1] | 9,280 | [1] |
Prior period rebate | 31 | ||||
Impairment loss of goodwill | 85 | ||||
Planned reduction of property portfolio | |||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||
Premises and equipment | 33 | 144 | 161 | ||
Depreciation, property, plant and equipment | 58 | 107 | 287 | ||
Accelerated depreciation | 41 | 71 | 40 | ||
Freehold premises | Planned reduction of property portfolio | |||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||
Premises and equipment | 3 | 1 | 4 | ||
Depreciation, property, plant and equipment | 10 | 21 | 250 | ||
Long leasehold property | Planned reduction of property portfolio | |||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||
Premises and equipment | 30 | 143 | 157 | ||
Depreciation, property, plant and equipment | £ 48 | £ 86 | £ 37 | ||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Operating expenses - Continuing
Operating expenses - Continuing operations (Details) - employee | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number and average number of employees | |||
Average number of employees | 59,200 | 61,400 | 64,200 |
Temporary employees | 2,500 | 3,200 | 4,100 |
Number of employees | 57,800 | 59,200 | 62,200 |
UK | |||
Number and average number of employees | |||
Number of employees | 40,600 | 42,500 | 44,600 |
USA | |||
Number and average number of employees | |||
Number of employees | 300 | 300 | 400 |
India | |||
Number and average number of employees | |||
Number of employees | 13,500 | 13,200 | 13,500 |
Poland | |||
Number and average number of employees | |||
Number of employees | 1,400 | 1,200 | 1,300 |
Republic of Ireland | |||
Number and average number of employees | |||
Number of employees | 1,200 | 1,400 | 1,500 |
Rest of the World | |||
Number and average number of employees | |||
Number of employees | 800 | 600 | 900 |
Ulster Bank RoI | |||
Number and average number of employees | |||
Number of employees | 2,400 | 2,600 | 2,700 |
Operating segment | Retail Banking | |||
Number and average number of employees | |||
Number of employees | 15,800 | 17,200 | 19,600 |
Operating segment | Ulster Bank RoI | |||
Number and average number of employees | |||
Number of employees | 1,700 | 1,900 | 2,000 |
Operating segment | Commercial Banking | |||
Number and average number of employees | |||
Number of employees | 8,400 | 9,700 | 9,700 |
Operating segment | Private Banking | |||
Number and average number of employees | |||
Number of employees | 1,900 | 1,900 | 1,700 |
Operating segment | RBS International | |||
Number and average number of employees | |||
Number of employees | 1,400 | 1,500 | 1,600 |
Operating segment | NatWest Markets | |||
Number and average number of employees | |||
Number of employees | 1,600 | 2,100 | 5,000 |
Operating segment | Central items & other | |||
Number and average number of employees | |||
Number of employees | 27,000 | 24,900 | 22,600 |
Discontinued operations | Ulster Bank RoI | |||
Number and average number of employees | |||
Number of employees | 700 | 700 | 700 |
Operating expenses - Share-base
Operating expenses - Share-based payments (Details) £ / shares in Units, £ in Millions, shares in Millions, Options in Millions, Option in Millions, EquityInstruments in Millions | 12 Months Ended | ||
Dec. 31, 2021GBP (£)EquityInstrumentsOptions£ / sharesshares | Dec. 31, 2020GBP (£)EquityInstrumentsOption£ / sharesshares | Dec. 31, 2019GBP (£)EquityInstrumentsOption£ / sharesshares | |
Sharesave | |||
Average exercise price | |||
At 1 January | £ / shares | £ 1.64 | £ 2.01 | £ 2.18 |
Granted | £ / shares | 1.80 | 1.12 | 1.78 |
Exercised | £ / shares | 1.76 | 1.83 | 2.83 |
Cancelled | £ / shares | 2.02 | 2.20 | 2.25 |
At 31 December | £ / shares | £ 1.61 | £ 1.64 | £ 2.01 |
Shares under option | |||
At 1 January | 96 | 84 | 75 |
Granted | 24 | 35 | 25 |
Exercised | (10) | (4) | |
Cancelled | (15) | (23) | (12) |
At 31 December | 95 | 96 | 84 |
Vesting period | 6 months | ||
Options exercisable | 6 | 6.3 | 3.2 |
Weighted average share price | £ / shares | £ 2.19 | £ 1.57 | £ 2.49 |
Weighted average remaining contractual life of outstanding share options | 2 years 1 month 6 days | 2 years 3 months 18 days | 2 years 8 months 12 days |
Fair value of options granted | £ 17 | £ 8 | £ 11 |
Sharesave | Minimum | |||
Shares under option | |||
Exercise price of outstanding share options | £ / shares | £ 1.12 | £ 1.12 | £ 1.68 |
Sharesave | Maximum | |||
Shares under option | |||
Exercise price of outstanding share options | £ / shares | £ 2.27 | £ 2.27 | £ 2.91 |
Deferred performance awards | |||
Shares under option | |||
Vesting period | 3 years | ||
Value at grant | |||
At 1 January | £ 169 | £ 196 | £ 233 |
Granted | 61 | 109 | 110 |
Forfeited | (10) | (5) | (10) |
Vested | (88) | (131) | (137) |
At 31 December | £ 132 | £ 169 | £ 196 |
Shares awarded | |||
At 1 January (in shares) | EquityInstruments | 77 | 76 | 92 |
Granted (in shares) | EquityInstruments | 32 | 67 | 42 |
Forfeited (in shares) | EquityInstruments | (5) | (2) | (4) |
Vested/exercised (in shares) | EquityInstruments | (39) | (64) | (54) |
At 31 December (in shares) | EquityInstruments | 65 | 77 | 76 |
Long-term incentives | |||
Value at grant | |||
At 1 January | £ 50 | £ 63 | £ 85 |
Granted | 6 | 14 | 15 |
Vested | (12) | (17) | (12) |
Lapsed | (10) | (25) | |
At 31 December | £ 44 | £ 50 | £ 63 |
Shares awarded | |||
At 1 January (in shares) | EquityInstruments | 24 | 25 | 32 |
Granted (in shares) | EquityInstruments | 3 | 10 | 6 |
Vested/exercised (in shares) | EquityInstruments | (6) | (7) | (4) |
Lapsed (in shares) | EquityInstruments | (4) | (9) | |
At 31 December (in shares) | EquityInstruments | 21 | 24 | 25 |
Options over shares | |||
At 1 January (in shares) | shares | 2 | ||
Lapsed (in shares) | shares | (2) | ||
Market value of awards vested and exercised | £ 13 | £ 13 | £ 10 |
Vested options over shares exercisable | shares | 0 | 0 |
Operating expenses - Bonus awar
Operating expenses - Bonus awards (Details) - GBP (£) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses | |||
Total Bonus awards | £ 301,000,000 | £ 206,000,000 | £ 307,000,000 |
Bonus awards as a % of operating profit before tax | 7.00% | (83.00%) | |
Proportion of bonus awards that are deferred | 87.00% | 83.00% | |
Bonus awards | |||
Operating expenses | |||
Total Bonus awards | £ 301,000,000 | £ 206,000,000 | |
Change % | 46.00% | ||
Non-deferred cash awards | |||
Operating expenses | |||
Total Bonus awards | £ 38,000,000 | 35,000,000 | |
Change % | 9.00% | ||
Total deferred bonus awards | |||
Operating expenses | |||
Total Bonus awards | £ 263,000,000 | 171,000,000 | |
Change % | 54.00% | ||
Deferred cash awards | |||
Operating expenses | |||
Total Bonus awards | £ 214,000,000 | £ 111,000,000 | |
Change % | 93.00% | ||
Proportion of bonus awards that are deferred | 81.00% | 65.00% | |
Deferred share awards | |||
Operating expenses | |||
Total Bonus awards | £ 49,000,000 | £ 60,000,000 | |
Change % | (18.00%) | ||
Proportion of bonus awards that are deferred | 19.00% | 35.00% | |
Maximum | |||
Operating expenses | |||
Cash awards | £ 2,000 |
Operating expenses - Bonus aw_2
Operating expenses - Bonus awards reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses | |||
Bonus Awards | £ 301 | £ 206 | £ 307 |
Less: deferral of charge for amounts awarded for current year | (99) | (77) | (110) |
Income statement charge for amounts awarded in current year | 202 | 129 | 197 |
Add: current year charge for amounts deferred from prior years | 80 | 114 | 127 |
Less: forfeiture of amounts deferred from prior years | (15) | (11) | (25) |
Income statement charge for amounts deferred from prior years | 65 | 103 | 102 |
Income statement charge for bonus awards | £ 267 | £ 232 | £ 299 |
Operating expenses - Bonus aw_3
Operating expenses - Bonus awards - Actual and Expected (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses | |||
Bonus awards deferred from 2019 and earlier | £ 28 | £ 114 | £ 127 |
Bonus awards deferred from 2020 | 52 | ||
Less: forfeiture of amounts deferred from prior years | (15) | (11) | (25) |
Income statement charge for amounts deferred from prior years | 65 | £ 103 | £ 102 |
Not later than one year [member] | |||
Operating expenses | |||
Bonus awards deferred from 2019 and earlier | 11 | ||
Bonus awards deferred from 2020 | 8 | ||
Bonus awards for 2021 deferred | 86 | ||
Income statement charge for amounts deferred from prior years | 105 | ||
Later than one year [member] | |||
Operating expenses | |||
Bonus awards deferred from 2019 and earlier | 6 | ||
Bonus awards deferred from 2020 | 7 | ||
Bonus awards for 2021 deferred | 13 | ||
Income statement charge for amounts deferred from prior years | £ 26 |
Segmental analysis - Operating
Segmental analysis - Operating profit/(loss) before tax (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Segmental analysis | |||||
Net interest income | £ 7,614 | £ 7,476 | [1] | £ 7,799 | [1] |
Net fees and commissions | 2,124 | 2,000 | 2,497 | ||
Other non-interest income | 774 | 1,032 | 3,691 | ||
Total income | 10,512 | 10,508 | [1] | 13,987 | [1] |
Operating expenses | (8,062) | ||||
Depreciation and amortisation | (923) | (913) | (1,218) | ||
Other operating expenses | (6,835) | (6,945) | |||
Impairment releases | 1,278 | (3,131) | [1] | (724) | [1] |
Operating profit before tax | 4,032 | (481) | [1] | 3,983 | [1] |
Retail Banking | |||||
Segmental analysis | |||||
Net interest income | 4,074 | 3,868 | 4,130 | ||
Net fees and commissions | 377 | 379 | 696 | ||
Other non-interest income | (6) | (66) | 40 | ||
Total income | 4,445 | 4,181 | 4,866 | ||
Operating expenses | (3,618) | ||||
Depreciation and amortisation | (85) | ||||
Other operating expenses | (2,428) | (2,540) | |||
Impairment releases | 36 | (792) | (393) | ||
Operating profit before tax | 1,968 | 849 | 855 | ||
Ulster Bank RoI | |||||
Segmental analysis | |||||
Net interest income | 100 | 122 | 152 | ||
Net fees and commissions | 65 | 77 | 95 | ||
Other non-interest income | 63 | 23 | 54 | ||
Total income | 228 | 222 | 301 | ||
Operating expenses | (510) | ||||
Other operating expenses | (482) | (441) | |||
Impairment releases | 28 | (139) | 6 | ||
Operating profit before tax | (226) | (358) | (203) | ||
Private Banking | |||||
Segmental analysis | |||||
Net interest income | 480 | 489 | 521 | ||
Net fees and commissions | 258 | 257 | 226 | ||
Other non-interest income | 78 | 17 | 30 | ||
Total income | 816 | 763 | 777 | ||
Operating expenses | (482) | ||||
Depreciation and amortisation | (8) | (4) | |||
Other operating expenses | (520) | (447) | |||
Impairment releases | 54 | (100) | 6 | ||
Operating profit before tax | 350 | 208 | 297 | ||
Commercial Banking | |||||
Segmental analysis | |||||
Net interest income | 2,582 | 2,740 | 2,842 | ||
Net fees and commissions | 1,158 | 1,110 | 1,312 | ||
Other non-interest income | 135 | 108 | 164 | ||
Total income | 3,875 | 3,958 | 4,318 | ||
Operating expenses | (2,458) | ||||
Depreciation and amortisation | (146) | (149) | (142) | ||
Other operating expenses | (2,208) | (2,281) | |||
Impairment releases | 1,073 | (1,927) | (391) | ||
Operating profit before tax | 2,594 | (399) | 1,327 | ||
RBS International | |||||
Segmental analysis | |||||
Net interest income | 383 | 371 | 478 | ||
Net fees and commissions | 124 | 94 | 106 | ||
Other non-interest income | 41 | 32 | 26 | ||
Total income | 548 | 497 | 610 | ||
Operating expenses | (254) | ||||
Depreciation and amortisation | (13) | (17) | (10) | ||
Other operating expenses | (229) | (274) | |||
Impairment releases | 52 | (107) | (2) | ||
Operating profit before tax | 358 | 99 | 344 | ||
NatWest Markets | |||||
Segmental analysis | |||||
Net interest income | 9 | (57) | (188) | ||
Net fees and commissions | 158 | 99 | 85 | ||
Other non-interest income | 248 | 1,081 | 1,445 | ||
Total income | 415 | 1,123 | 1,342 | ||
Operating expenses | (1,406) | ||||
Depreciation and amortisation | (14) | (16) | (12) | ||
Other operating expenses | (1,147) | (1,294) | |||
Impairment releases | 35 | (40) | 51 | ||
Operating profit before tax | (711) | (227) | (25) | ||
Central Items and other | |||||
Segmental analysis | |||||
Net interest income | (14) | (57) | (136) | ||
Net fees and commissions | (16) | (16) | (23) | ||
Other non-interest income | 215 | (163) | 1,932 | ||
Total income | 185 | (236) | 1,773 | ||
Operating expenses | 666 | ||||
Depreciation and amortisation | (665) | (723) | (1,050) | ||
Other operating expenses | 179 | 332 | |||
Impairment releases | (26) | (1) | |||
Operating profit before tax | (301) | (653) | 1,388 | ||
Total excluding Ulster Bank RoI | |||||
Segmental analysis | |||||
Net interest income | 7,514 | 7,354 | 7,647 | ||
Net fees and commissions | 2,059 | 1,923 | 2,402 | ||
Other non-interest income | 711 | 1,009 | 3,637 | ||
Total income | 10,284 | 10,286 | 13,686 | ||
Operating expenses | (7,552) | ||||
Depreciation and amortisation | (923) | (913) | (1,218) | ||
Other operating expenses | (6,353) | (6,504) | |||
Impairment releases | 1,250 | (2,992) | (730) | ||
Operating profit before tax | £ 4,258 | £ (123) | £ 4,186 | ||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Segmental analysis - Total reve
Segmental analysis - Total revenue (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Segmental analysis | |||||
Revenue | £ 12,785 | £ 13,552 | £ 18,163 | ||
Total income | 10,512 | 10,508 | [1] | 13,987 | [1] |
Retail Banking | |||||
Segmental analysis | |||||
Revenue | 5,433 | 5,425 | 6,223 | ||
Total income | 4,445 | 4,181 | 4,866 | ||
Ulster Bank RoI | |||||
Segmental analysis | |||||
Revenue | 298 | 282 | 356 | ||
Total income | 228 | 222 | 301 | ||
Commercial Banking | |||||
Segmental analysis | |||||
Revenue | 3,838 | 3,798 | 4,486 | ||
Total income | 3,875 | 3,958 | 4,318 | ||
Private Banking | |||||
Segmental analysis | |||||
Revenue | 919 | 865 | 944 | ||
Total income | 816 | 763 | 777 | ||
RBS International | |||||
Segmental analysis | |||||
Revenue | 600 | 508 | 658 | ||
Total income | 548 | 497 | 610 | ||
NatWest Markets | |||||
Segmental analysis | |||||
Revenue | 853 | 1,997 | 3,074 | ||
Total income | 415 | 1,123 | 1,342 | ||
Central Items and other | |||||
Segmental analysis | |||||
Revenue | 844 | 677 | 2,422 | ||
Total income | 185 | (236) | 1,773 | ||
Total excluding Ulster Bank RoI | |||||
Segmental analysis | |||||
Revenue | 12,487 | 13,270 | 17,807 | ||
Total income | 10,284 | 10,286 | 13,686 | ||
Operating segment | |||||
Segmental analysis | |||||
Revenue | 12,785 | 13,552 | 18,163 | ||
Total income | 10,512 | 10,508 | 13,987 | ||
Operating segment | Retail Banking | |||||
Segmental analysis | |||||
Revenue | 5,419 | 5,386 | 6,161 | ||
Total income | 4,433 | 4,157 | 4,834 | ||
Operating segment | Ulster Bank RoI | |||||
Segmental analysis | |||||
Revenue | 297 | 280 | 350 | ||
Total income | 237 | 228 | 296 | ||
Operating segment | Commercial Banking | |||||
Segmental analysis | |||||
Revenue | 3,751 | 3,734 | 4,347 | ||
Total income | 3,939 | 4,065 | 4,814 | ||
Operating segment | Private Banking | |||||
Segmental analysis | |||||
Revenue | 792 | 702 | 703 | ||
Total income | 801 | 700 | 631 | ||
Operating segment | RBS International | |||||
Segmental analysis | |||||
Revenue | 594 | 505 | 639 | ||
Total income | 548 | 500 | 603 | ||
Operating segment | NatWest Markets | |||||
Segmental analysis | |||||
Revenue | 823 | 1,984 | 2,516 | ||
Total income | 554 | 1,395 | 1,664 | ||
Operating segment | Central Items and other | |||||
Segmental analysis | |||||
Revenue | 1,109 | 961 | 3,447 | ||
Total income | (537) | 1,145 | |||
Operating segment | Total excluding Ulster Bank RoI | |||||
Segmental analysis | |||||
Revenue | 12,488 | 13,272 | 17,813 | ||
Total income | 10,275 | 10,280 | 13,691 | ||
Inter segment | Retail Banking | |||||
Segmental analysis | |||||
Revenue | 14 | 39 | 62 | ||
Total income | 12 | 24 | 32 | ||
Inter segment | Ulster Bank RoI | |||||
Segmental analysis | |||||
Revenue | 1 | 2 | 6 | ||
Total income | (9) | (6) | 5 | ||
Inter segment | Commercial Banking | |||||
Segmental analysis | |||||
Revenue | 87 | 64 | 139 | ||
Total income | (64) | (107) | (496) | ||
Inter segment | Private Banking | |||||
Segmental analysis | |||||
Revenue | 127 | 163 | 241 | ||
Total income | 15 | 63 | 146 | ||
Inter segment | RBS International | |||||
Segmental analysis | |||||
Revenue | 6 | 3 | 19 | ||
Total income | (3) | 7 | |||
Inter segment | NatWest Markets | |||||
Segmental analysis | |||||
Revenue | 30 | 13 | 558 | ||
Total income | (139) | (272) | (322) | ||
Inter segment | Central Items and other | |||||
Segmental analysis | |||||
Revenue | (265) | (284) | (1,025) | ||
Total income | 185 | 301 | 628 | ||
Inter segment | Total excluding Ulster Bank RoI | |||||
Segmental analysis | |||||
Revenue | (1) | (2) | (6) | ||
Total income | £ 9 | £ 6 | £ (5) | ||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Segmental analysis - Net fees a
Segmental analysis - Net fees and commissions (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Fees and commissions receivable | |||||
Payment services | £ 971 | £ 892 | £ 1,095 | ||
Credit and debit card fees | 522 | 460 | 623 | ||
Lending and financing | 670 | 678 | 994 | ||
Brokerage | 96 | 155 | 164 | ||
Investment management, trustee and fiduciary services | 280 | 271 | 278 | ||
Underwriting fees | 127 | 183 | 170 | ||
Other | 32 | 83 | 21 | ||
Total | 2,698 | 2,722 | [1] | 3,345 | [1] |
Fees and commissions payable | (574) | (722) | [1] | (848) | [1] |
Net fees and commissions | 2,124 | 2,000 | 2,497 | ||
Retail Banking | |||||
Fees and commissions receivable | |||||
Payment services | 306 | 264 | 292 | ||
Credit and debit card fees | 344 | 299 | 427 | ||
Lending and financing | 13 | 42 | 356 | ||
Brokerage | 48 | 54 | 55 | ||
Investment management, trustee and fiduciary services | 3 | 3 | 44 | ||
Other | 1 | 2 | |||
Total | 714 | 663 | 1,176 | ||
Fees and commissions payable | (337) | (284) | (480) | ||
Net fees and commissions | 377 | 379 | 696 | ||
Ulster Bank RoI | |||||
Fees and commissions receivable | |||||
Payment services | 53 | 57 | 60 | ||
Credit and debit card fees | 19 | 21 | 28 | ||
Lending and financing | 4 | 4 | 4 | ||
Brokerage | 1 | 8 | |||
Investment management, trustee and fiduciary services | 2 | 2 | 3 | ||
Other | 4 | ||||
Total | 78 | 85 | 107 | ||
Fees and commissions payable | (13) | (8) | (12) | ||
Net fees and commissions | 65 | 77 | 95 | ||
Commercial Banking | |||||
Fees and commissions receivable | |||||
Payment services | 538 | 507 | 659 | ||
Credit and debit card fees | 147 | 129 | 154 | ||
Lending and financing | 515 | 505 | 510 | ||
Investment management, trustee and fiduciary services | 1 | 3 | |||
Other | 105 | 82 | 90 | ||
Total | 1,305 | 1,224 | 1,416 | ||
Fees and commissions payable | (147) | (114) | (104) | ||
Net fees and commissions | 1,158 | 1,110 | 1,312 | ||
Private Banking | |||||
Fees and commissions receivable | |||||
Payment services | 35 | 28 | 33 | ||
Credit and debit card fees | 10 | 9 | 12 | ||
Lending and financing | 10 | 7 | 3 | ||
Brokerage | 6 | 6 | 5 | ||
Investment management, trustee and fiduciary services | 230 | 225 | 186 | ||
Other | 35 | 26 | 27 | ||
Total | 326 | 301 | 266 | ||
Fees and commissions payable | (68) | (44) | (40) | ||
Net fees and commissions | 258 | 257 | 226 | ||
RBS International | |||||
Fees and commissions receivable | |||||
Payment services | 19 | 18 | 27 | ||
Credit and debit card fees | 2 | 2 | 2 | ||
Lending and financing | 54 | 34 | 36 | ||
Brokerage | 1 | 1 | |||
Investment management, trustee and fiduciary services | 45 | 38 | 41 | ||
Other | 4 | 3 | 2 | ||
Total | 125 | 96 | 108 | ||
Fees and commissions payable | (1) | (2) | (2) | ||
Net fees and commissions | 124 | 94 | 106 | ||
NatWest Markets | |||||
Fees and commissions receivable | |||||
Payment services | 20 | 18 | 24 | ||
Lending and financing | 74 | 86 | 85 | ||
Brokerage | 41 | 93 | 96 | ||
Investment management, trustee and fiduciary services | 2 | 1 | |||
Underwriting fees | 127 | 183 | 170 | ||
Other | 4 | 69 | |||
Total | 262 | 386 | 445 | ||
Fees and commissions payable | (104) | (287) | (360) | ||
Net fees and commissions | 158 | 99 | 85 | ||
Central Items and other | |||||
Fees and commissions receivable | |||||
Other | (112) | (33) | (173) | ||
Total | (112) | (33) | (173) | ||
Fees and commissions payable | 96 | 17 | 150 | ||
Net fees and commissions | (16) | (16) | (23) | ||
Total excluding Ulster Bank RoI | |||||
Fees and commissions receivable | |||||
Payment services | 918 | 835 | 1,035 | ||
Credit and debit card fees | 503 | 439 | 595 | ||
Lending and financing | 666 | 674 | 990 | ||
Brokerage | 96 | 154 | 156 | ||
Investment management, trustee and fiduciary services | 278 | 269 | 275 | ||
Underwriting fees | 127 | 183 | 170 | ||
Other | 32 | 83 | 17 | ||
Total | 2,620 | 2,637 | 3,238 | ||
Fees and commissions payable | (561) | (714) | (836) | ||
Net fees and commissions | £ 2,059 | £ 1,923 | £ 2,402 | ||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Segmental analysis - Assets and
Segmental analysis - Assets and liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Segmental analysis | |||
Assets | £ 781,992 | £ 799,491 | £ 723,039 |
Liabilities | 740,189 | 755,667 | 679,483 |
Retail Banking | |||
Segmental analysis | |||
Assets | 209,973 | 197,618 | 182,305 |
Liabilities | 192,715 | 178,617 | 153,999 |
Ulster Bank RoI | |||
Segmental analysis | |||
Assets | 22,833 | 26,620 | 25,385 |
Liabilities | 19,021 | 22,993 | 21,012 |
Commercial Banking | |||
Segmental analysis | |||
Assets | 184,564 | 187,413 | 165,399 |
Liabilities | 184,890 | 174,251 | 140,863 |
Private Banking | |||
Segmental analysis | |||
Assets | 29,854 | 26,206 | 23,304 |
Liabilities | 39,388 | 32,457 | 28,610 |
RBS International | |||
Segmental analysis | |||
Assets | 40,578 | 33,984 | 31,738 |
Liabilities | 38,436 | 31,989 | 30,330 |
NatWest Markets | |||
Segmental analysis | |||
Assets | 200,576 | 270,147 | 263,885 |
Liabilities | 188,431 | 254,098 | 246,907 |
Central Items and other | |||
Segmental analysis | |||
Assets | 93,614 | 57,503 | 31,023 |
Liabilities | 77,308 | 61,262 | 57,762 |
Total excluding Ulster Bank RoI | |||
Segmental analysis | |||
Assets | 759,159 | 772,871 | 697,654 |
Liabilities | £ 721,168 | £ 732,674 | £ 658,471 |
Segmental analysis - Goodwill (
Segmental analysis - Goodwill (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Analysis of goodwill | ||
Impairment of goodwill | £ 85 | |
Carrying value of goodwill | 5,522 | £ 5,607 |
Retail Banking | ||
Analysis of goodwill | ||
Impairment of goodwill | 85 | |
Carrying value of goodwill | 2,607 | 2,692 |
Commercial Banking | ||
Analysis of goodwill | ||
Carrying value of goodwill | 2,606 | 2,606 |
Private Banking | ||
Analysis of goodwill | ||
Carrying value of goodwill | 9 | 9 |
RBS International | ||
Analysis of goodwill | ||
Carrying value of goodwill | £ 300 | £ 300 |
Segmental analysis - Geographic
Segmental analysis - Geographical segments (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Geographical segments | |||||
Total revenue | £ 12,785 | £ 13,552 | £ 18,163 | ||
Interest receivable | 9,313 | 9,798 | [1] | 11,127 | [1] |
Interest payable | (1,699) | (2,322) | [1] | (3,328) | [1] |
Net fees and commissions | 2,124 | 2,000 | 2,497 | ||
Income from trading activities | 323 | 1,125 | [1] | 932 | [1] |
Other operating income | 451 | (93) | 2,759 | ||
Total income | 10,512 | 10,508 | [1] | 13,987 | [1] |
Operating profit/(loss) before tax | 4,032 | (481) | [1] | 3,983 | [1] |
Total assets | 781,992 | 799,491 | 723,039 | ||
Assets of disposal groups | 9,015 | ||||
Total liabilities | 740,189 | 755,667 | 679,483 | ||
Contingent liabilities and commitments | 125,367 | 128,732 | 124,995 | ||
UK | |||||
Geographical segments | |||||
Total revenue | 12,100 | 12,511 | 16,925 | ||
Interest receivable | 8,949 | 9,479 | 10,923 | ||
Interest payable | (1,483) | (2,163) | (3,255) | ||
Net fees and commissions | 1,820 | 1,637 | 2,191 | ||
Income from trading activities | 247 | 911 | 727 | ||
Other operating income | 387 | (117) | 2,305 | ||
Total income | 9,920 | 9,747 | 12,891 | ||
Operating profit/(loss) before tax | 4,143 | (193) | 3,543 | ||
Total assets | 693,221 | 704,725 | 634,642 | ||
Total liabilities | 676,684 | 686,500 | 613,151 | ||
Contingent liabilities and commitments | 117,225 | 118,654 | 114,422 | ||
USA | |||||
Geographical segments | |||||
Total revenue | 87 | 211 | 228 | ||
Interest receivable | 20 | ||||
Interest payable | (2) | ||||
Net fees and commissions | 27 | 33 | 37 | ||
Income from trading activities | 53 | 170 | 148 | ||
Other operating income | 2 | (22) | 13 | ||
Total income | 100 | 181 | 198 | ||
Operating profit/(loss) before tax | 48 | (85) | 186 | ||
Total assets | 21,776 | 25,439 | 27,396 | ||
Total liabilities | 23,286 | 26,932 | 31,715 | ||
Contingent liabilities and commitments | 1 | ||||
Europe | |||||
Geographical segments | |||||
Total revenue | 565 | 656 | 882 | ||
Interest receivable | 336 | 297 | 169 | ||
Interest payable | (211) | (158) | (70) | ||
Net fees and commissions | 235 | 233 | 197 | ||
Income from trading activities | (1) | 33 | 49 | ||
Other operating income | 62 | 42 | 432 | ||
Total income | 421 | 447 | 777 | ||
Operating profit/(loss) before tax | (199) | (291) | 172 | ||
Total assets | 64,415 | 66,884 | 57,534 | ||
Total liabilities | 38,835 | 41,018 | 33,539 | ||
Contingent liabilities and commitments | 8,114 | 10,068 | 10,571 | ||
RoW | |||||
Geographical segments | |||||
Total revenue | 33 | 174 | 128 | ||
Interest receivable | 8 | 22 | 35 | ||
Interest payable | (3) | (1) | (3) | ||
Net fees and commissions | 42 | 97 | 72 | ||
Income from trading activities | 24 | 11 | 8 | ||
Other operating income | 4 | 9 | |||
Total income | 71 | 133 | 121 | ||
Operating profit/(loss) before tax | 40 | 88 | 82 | ||
Total assets | 2,580 | 2,443 | 3,467 | ||
Total liabilities | 1,384 | 1,217 | 1,078 | ||
Contingent liabilities and commitments | £ 27 | £ 10 | £ 2 | ||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Pensions (Details)
Pensions (Details) | 12 Months Ended |
Dec. 31, 2021trustee | |
Pensions | |
Portion of final pensionable salary, considered for pension | 1.67% |
Maximum number of years of service for pension | 40 years |
Maximum annual salary inflation | 2.00% |
Main Scheme | |
Pensions | |
Number of nominated trustee directors | 4 |
Number of appointed trustee directors | 6 |
Pensions - Investment strategy
Pensions - Investment strategy (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Pensions | ||
Fair value of assets | £ 106,139 | £ 166,523 |
Fair value of liabilities | £ 100,835 | £ 160,705 |
Main Scheme | ||
Pensions | ||
Percentage of total plan assets | 90.00% | 90.00% |
Equities | 8.40% | 8.50% |
Index-linked bonds | 46.70% | 49.40% |
Government bonds | 9.80% | 6.20% |
Corporate and other bonds | 15.10% | 16.80% |
Real estate | 4.40% | 4.20% |
Derivatives | 8.80% | 10.00% |
Cash and other assets | 6.80% | 4.90% |
Total | 100.00% | 100.00% |
Percentage of collateral | 95.00% | |
Maximum percentage of indirect investment by trustees | 5.00% | |
Main Scheme | Swap | ||
Pensions | ||
Notional amount | £ 192,000 | £ 88,000 |
Fair value of assets | 4,573 | 4,706 |
Main Scheme | Inflation rate swaps | ||
Pensions | ||
Notional amount | 20,000 | 18,000 |
Fair value of assets | 1,408 | 1,390 |
Fair value of liabilities | 796 | 1,716 |
Main Scheme | Interest rate contracts | ||
Pensions | ||
Notional amount | 172,000 | 68,000 |
Fair value of assets | 8,385 | 11,197 |
Fair value of liabilities | 4,421 | 6,215 |
Main Scheme | Currency forwards | ||
Pensions | ||
Notional amount | 12,000 | 11,000 |
Fair value of assets | 61 | 334 |
Fair value of liabilities | 98 | 38 |
Main Scheme | Equity and bond call options | ||
Pensions | ||
Notional amount | 1,000 | |
Fair value of assets | 1 | 169 |
Fair value of liabilities | 1 | |
Main Scheme | Equity and bond put options | ||
Pensions | ||
Notional amount | 3,000 | |
Fair value of assets | 1 | 1 |
Fair value of liabilities | 3 | 19 |
Main Scheme | Other | ||
Pensions | ||
Notional amount | 1,000 | 2,000 |
Fair value of assets | 9 | 63 |
Fair value of liabilities | £ 10 | £ 17 |
Quoted | ||
Pensions | ||
Equities | 3.70% | 3.90% |
Index-linked bonds | 46.70% | 49.40% |
Government bonds | 9.80% | 6.20% |
Corporate and other bonds | 10.70% | 11.80% |
Total | 70.90% | 71.30% |
Unquoted | ||
Pensions | ||
Equities | 4.70% | 4.60% |
Corporate and other bonds | 4.40% | 5.00% |
Real estate | 4.40% | 4.20% |
Derivatives | 8.80% | 10.00% |
Cash and other assets | 6.80% | 4.90% |
Total | 29.10% | 28.70% |
Pensions - Changes in value of
Pensions - Changes in value of net pension (assets)/liability (Details) - GBP (£) £ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pensions | ||||
Balance at beginning of year | £ (488) | £ (602) | £ (495) | |
Currency translation and other adjustments | 10 | (21) | ||
Net interest expense | (10) | |||
Current service cost | 213 | |||
Past service cost | 12 | |||
Income statement | 215 | 215 | ||
Return on plan assets excluding recognised interest income | (872) | |||
Experience gains and losses | 236 | |||
Effect of changes in actuarial financial assumptions | (1,204) | |||
Effect of changes in actuarial demographic assumptions | 379 | |||
Asset ceiling adjustments | 2,602 | |||
Statement of comprehensive income | (669) | 4 | ||
Contributions by employer | (780) | (296) | ||
Assets/liabilities extinguished upon settlement | (1) | |||
Balance at end of year | (488) | (602) | ||
Main Scheme | ||||
Pensions | ||||
Currency translation and other adjustments | 4 | |||
Net interest expense | (5) | |||
Current service cost | 158 | |||
Past service cost | 6 | |||
Income statement | 159 | 159 | ||
Return on plan assets excluding recognised interest income | (841) | |||
Experience gains and losses | 241 | |||
Effect of changes in actuarial financial assumptions | (1,165) | |||
Effect of changes in actuarial demographic assumptions | 350 | |||
Asset ceiling adjustments | 2,443 | |||
Statement of comprehensive income | (546) | (70) | ||
Contributions by employer | (705) | (233) | ||
Main Scheme | Forecast | ||||
Pensions | ||||
Contributions by employer | (714) | |||
Main Scheme | If distributions are made in coming financial year | ||||
Pensions | ||||
Contributions by employer | (500) | |||
Main Scheme | If distributions are made in coming financial year | Maximum | ||||
Pensions | ||||
Contributions by employer | £ (500) | |||
Fair value of plan assets | ||||
Pensions | ||||
Balance at beginning of year | (57,787) | (57,249) | (51,925) | |
Currency translation and other adjustments | 129 | (92) | ||
Net interest expense | (795) | |||
Income statement | (795) | (1,037) | ||
Return on plan assets excluding recognised interest income | (872) | |||
Statement of comprehensive income | 872 | 6,027 | ||
Contributions by employer | (780) | (296) | ||
Contributions by plan participants and other scheme members | (13) | (14) | ||
Assets/liabilities extinguished upon settlement | 2 | |||
Benefits paid | (1,793) | 2,140 | ||
Balance at end of year | (57,787) | (57,249) | ||
Fair value of plan assets | Main Scheme | ||||
Pensions | ||||
Balance at beginning of year | (52,021) | (51,323) | (46,555) | |
Net interest expense | (713) | |||
Income statement | (713) | (936) | ||
Return on plan assets excluding recognised interest income | (841) | |||
Statement of comprehensive income | 841 | 5,486 | ||
Contributions by employer | (705) | (233) | ||
Contributions by plan participants and other scheme members | (8) | (9) | ||
Benefits paid | 1,569 | 1,896 | ||
Balance at end of year | (52,021) | (51,323) | ||
Present value of defined benefit obligation | ||||
Pensions | ||||
Balance at beginning of year | 46,808 | 48,864 | 44,115 | |
Currency translation and other adjustments | (116) | 71 | ||
Net interest expense | 676 | |||
Current service cost | 213 | |||
Past service cost | 12 | |||
Income statement | 901 | 1,103 | ||
Experience gains and losses | 236 | |||
Effect of changes in actuarial financial assumptions | (1,204) | |||
Effect of changes in actuarial demographic assumptions | 379 | |||
Statement of comprehensive income | 1,061 | (5,704) | ||
Contributions by plan participants and other scheme members | 13 | 14 | ||
Assets/liabilities extinguished upon settlement | (3) | |||
Benefits paid | (1,793) | (2,140) | ||
Balance at end of year | 46,808 | 48,864 | ||
Present value of defined benefit obligation | Main Scheme | ||||
Pensions | ||||
Balance at beginning of year | 42,020 | 43,870 | 39,669 | |
Currency translation and other adjustments | 4 | |||
Net interest expense | 603 | |||
Current service cost | 158 | |||
Past service cost | 6 | |||
Income statement | 767 | 954 | ||
Experience gains and losses | 241 | |||
Effect of changes in actuarial financial assumptions | (1,165) | |||
Effect of changes in actuarial demographic assumptions | 350 | |||
Statement of comprehensive income | 1,056 | (5,130) | ||
Contributions by plan participants and other scheme members | 8 | 9 | ||
Benefits paid | (1,569) | (1,896) | ||
Balance at end of year | 42,020 | 43,870 | ||
Asset ceiling/minimum funding | ||||
Pensions | ||||
Balance at beginning of year | 10,491 | 7,783 | 7,315 | |
Currency translation and other adjustments | (3) | |||
Net interest expense | 109 | |||
Income statement | 109 | 149 | ||
Asset ceiling adjustments | 2,602 | |||
Statement of comprehensive income | (2,602) | (319) | ||
Balance at end of year | 10,491 | 7,783 | ||
Asset ceiling/minimum funding | Main Scheme | ||||
Pensions | ||||
Balance at beginning of year | £ 10,001 | 7,453 | 6,886 | |
Net interest expense | 105 | |||
Income statement | 105 | 141 | ||
Asset ceiling adjustments | 2,443 | |||
Statement of comprehensive income | (2,443) | (426) | ||
Balance at end of year | £ 10,001 | £ 7,453 |
Pensions - Amounts in the Finan
Pensions - Amounts in the Financial statements (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Pensions | |||||
Fund assets at fair value | £ 57,787 | £ 57,249 | £ 51,925 | £ 48,752 | £ 49,746 |
Present value of fund liabilities | 46,808 | 48,864 | 44,115 | 39,607 | 42,378 |
Net surplus/(deficit) | 10,979 | 8,385 | 7,810 | £ 9,145 | £ 7,368 |
Net assets of schemes in surplus | 602 | 723 | |||
Net liabilities of schemes in deficit | (114) | (121) | |||
Retirement benefit liability | (488) | (602) | (495) | ||
Asset ceiling/minimum funding | |||||
Pensions | |||||
Retirement benefit liability | £ 10,491 | £ 7,783 | £ 7,315 |
Pensions - Income statement cha
Pensions - Income statement charge (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Pensions | ||
Continuing operations | £ 196 | £ 195 |
Discontinued operations | £ 19 | £ 20 |
Pensions - Funding and contribu
Pensions - Funding and contributions by the Group and most significant assumptions used for the Main Scheme (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Pensions | |||
Administrative expenses | £ 4,082 | £ 3,980 | £ 5,304 |
Contributions by employer | £ 780 | 296 | |
Fixed interest swap and guilt yields plus percentage | 0.64% | ||
Life expectancy of male employees after retirement who are currently at age 60 | 27 years 8 months 12 days | ||
Life expectancy of female employees after retirement who are currently at age 60 | 29 years 4 months 24 days | ||
Life expectancy of male employees after retirement who are currently aged 40 | 28 years 10 months 24 days | ||
Life expectancy of female employees after retirement who are currently aged 40 | 30 years 8 months 12 days | ||
Amount of impact of guaranteed minimum pension equalisation | £ 0 | £ 169 | |
Main Scheme | |||
Pensions | |||
Period of funding valuations (in years) | 3 years | ||
Funding level, as percent | 104.00% | ||
Pension liabilities | £ 49,000 | ||
Deficit | 2,000 | ||
Cash payment | £ 1,500 | ||
Contributions by employer | 705 | 233 | |
Contributions by employer, capped amount | £ 500 | £ 0 | |
Average cost (as a percent) | 49.00% | ||
Main Scheme | Principal IAS 19 actuarial assumptions | |||
Pensions | |||
Discount rate | 1.80% | 1.40% | |
Inflation assumption (RPI) | 3.30% | 2.90% | |
Rate of increase in salaries | 1.80% | 1.80% | |
Rate of increase in deferred pensions | 3.70% | 3.00% | |
Rate of increase in pensions in payment | 2.50% | 2.70% | |
Proportion of pension converted to a cash lump sum at retirement | 18.00% | 20.00% | |
Longevity at age 60 for current pensioners (years), males | 27 years 3 months 18 days | 27 years 1 month 6 days | |
Longevity at age 60 for current pensioners (years), females | 29 years | 29 years | |
Longevity at age 60 for future pensioners currently aged 40 (years), males | 28 years 2 months 12 days | 28 years 3 months 18 days | |
Longevity at age 60 for future pensioners currently aged 40 (years), females | 30 years 1 month 6 days | 30 years 4 months 24 days | |
Main Scheme | Maximum | Distributions to shareholders of an equal amount are made [Member] | |||
Pensions | |||
Settlement of the future contributions | £ 500 |
Pensions - Sensitivities of the
Pensions - Sensitivities of the present value of defined benefit obligation (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Pensions | ||
Weighted average duration of defined benefit obligation | 20 years | 22 years |
Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.50% | 0.50% |
Decrease in actuarial assumption (as a percent) | 0.50% | 0.50% |
Active members | 10.70% | 14.20% |
Deferred members | 47.60% | 50.90% |
Pensioners and dependants | 41.70% | 34.90% |
Total proportions to the different classes of scheme | 100.00% | 100.00% |
Discount rate | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of assets | £ (2,917) | £ (2,585) |
(Decrease)/ increase in value of liabilities | 1,926 | 2,384 |
Increase in net pension assets/ (obligations) | £ 991 | £ 201 |
Inflation | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of assets | £ 1,883 | £ 2,204 |
(Decrease)/ increase in value of liabilities | (1,329) | (1,603) |
Increase in net pension assets/ (obligations) | £ (554) | £ (601) |
Credit spreads | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of assets | £ (3) | £ (6) |
(Decrease)/ increase in value of liabilities | 1,926 | 2,384 |
Increase in net pension assets/ (obligations) | (1,923) | (2,378) |
Credit spreads | Actuarial assumption of longevity, decrease by 2 years | Main Scheme | ||
Pensions | ||
Increase in net pension assets/ (obligations) | 6,900 | 7,800 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | 3,600 | 3,900 |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | (300) | (600) |
Credit spreads | Actuarial assumption of longevity, decrease by 1 year | Main Scheme | ||
Pensions | ||
Increase in net pension assets/ (obligations) | 5,300 | 6,100 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | 1,800 | 1,900 |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | (2,400) | (2,800) |
Credit spreads | Actuarial assumption of longevity, no change | Main Scheme | ||
Pensions | ||
Increase in net pension assets/ (obligations) | 3,800 | 4,500 |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | £ (4,500) | (5,100) |
Credit spreads | Actuarial assumption of longevity, increase by 1 year | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity increase | 1 year | |
Increase in net pension assets/ (obligations) | £ 2,300 | 2,900 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | (1,800) | (1,900) |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | £ (6,600) | (7,400) |
Credit spreads | Actuarial assumption of longevity, increase by 2 years | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity increase | 2 years | |
Increase in net pension assets/ (obligations) | £ 800 | 1,300 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | (3,600) | (3,900) |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | £ (8,700) | £ (9,700) |
Longevity increase | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity increase | 1 year | 1 year |
(Decrease)/ increase in value of liabilities | £ (1,790) | £ (1,930) |
Increase in net pension assets/ (obligations) | £ 1,790 | £ 1,930 |
Pension increase | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of liabilities | £ (1,485) | £ (1,608) |
Increase in net pension assets/ (obligations) | £ 1,485 | £ 1,608 |
Equity values | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 10.00% | 10.00% |
(Decrease)/ increase in value of assets | £ 442 | £ 454 |
Increase in net pension assets/ (obligations) | £ (442) | £ (454) |
Pensions - History of defined b
Pensions - History of defined benefit schemes (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pensions | |||||
Fair value of plan assets | £ 57,787 | £ 57,249 | £ 51,925 | £ 48,752 | £ 49,746 |
Present value of plan obligations | 46,808 | 48,864 | 44,115 | 39,607 | 42,378 |
Net surplus/(deficit) | 10,979 | 8,385 | 7,810 | 9,145 | 7,368 |
Actual return on plan assets | £ 1,667 | £ 7,064 | £ 4,930 | £ (848) | £ 3,013 |
Actual return on plan assets - % | 2.90% | 13.60% | 10.10% | (1.70%) | 6.10% |
Plan liabilities | |||||
Pensions | |||||
Experience gains/(losses) | £ 237 | £ 455 | £ 279 | £ (81) | £ (93) |
Plan assets | |||||
Pensions | |||||
Experience gains/(losses) | 872 | 6,027 | 3,556 | (2,090) | 1,728 |
Main Scheme | |||||
Pensions | |||||
Fair value of plan assets | 52,021 | 51,323 | 46,555 | 43,806 | 44,652 |
Present value of plan obligations | 42,020 | 43,870 | 39,669 | 35,466 | 37,937 |
Net surplus/(deficit) | 10,001 | 7,453 | 6,886 | 8,340 | 6,715 |
Actual return on plan assets | £ 1,554 | £ 6,422 | £ 4,266 | £ (768) | £ 2,735 |
Actual return on plan assets - % | 3.00% | 13.80% | 9.70% | (1.70%) | 6.20% |
Main Scheme | Plan liabilities | |||||
Pensions | |||||
Experience gains/(losses) | £ 241 | £ 427 | £ 275 | £ (122) | £ (107) |
Main Scheme | Plan assets | |||||
Pensions | |||||
Experience gains/(losses) | £ 841 | £ 5,486 | £ 3,021 | £ (1,891) | £ 1,580 |
Auditor's remuneration (Details
Auditor's remuneration (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Auditor's remuneration | |||
Fees payable for the audit of NatWest Group's annual accounts | £ 4.4 | £ 4.7 | £ 3.8 |
Fees payable for the audit of NatWest Group plc's subsidiaries | 29.6 | 30.6 | 25.7 |
Fees payable for audit-related assurance services | 5.3 | 4.7 | 3.2 |
Total audit and audit-related assurance services fees | 39.3 | 40 | 32.7 |
Other assurance services | 0.4 | 0.6 | 1.2 |
Corporate finance services | 0.5 | 0.4 | 0.6 |
Total other services | 0.9 | 1 | £ 1.8 |
Audit fees paid | 19.7 | ||
Fees for review of interim financial information | 1.1 | 1.1 | |
Fees for reports to the regulatory | 3.5 | 3.2 | |
Fees for non-statutory audit opinions | 0.7 | 0.4 | |
Fees for the auditors as reporting accountants on debt and equity issuances | £ 0.5 | £ 0.4 |
Tax - Tax charge (Details)
Tax - Tax charge (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Current tax: | |||||
Charge for the year | £ (1,036) | £ (191) | £ (673) | ||
Over provision in respect of prior years | 31 | 86 | 122 | ||
Total current tax | (1,005) | (105) | (551) | ||
Deferred tax: | |||||
(Charge)/credit for the year | (185) | 176 | 38 | ||
Net increase/(decrease) in the carrying value of deferred tax assets in respect of UK, Ireland and Netherlands losses | 12 | (130) | 55 | ||
UK tax rate change impact | 165 | 75 | |||
Over/(under) provision in respect of prior years | 17 | (90) | 19 | ||
Tax charge for the year | £ (996) | £ (74) | [1] | £ (439) | [1] |
UK corporation tax | 19.00% | 19.00% | 19.00% | ||
UK | |||||
Deferred tax: | |||||
UK corporation tax | 19.00% | ||||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Tax - Reconciliation (Details)
Tax - Reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Tax reconciliation | |||||
UK corporation tax | 19.00% | 19.00% | 19.00% | ||
Expected tax (charge)/credit | £ 766 | £ (92) | £ 757 | ||
Losses and temporary differences in year where no deferred tax asset recognised | (51) | (43) | (24) | ||
Foreign profits taxed at other rates | (11) | (29) | 7 | ||
Non-deductible goodwill impairment | (16) | ||||
losses on disposals and write-downs | (55) | (22) | (71) | ||
UK bank levy | (18) | (32) | (26) | ||
regulatory and legal actions | (74) | 14 | (165) | ||
other disallowable items | (28) | (70) | (62) | ||
Alawwal bank merger gain on disposal | 215 | ||||
FX recycling on the liquidation of RFS Holdings | 279 | ||||
other non-taxable items | 73 | 28 | 80 | ||
Taxable foreign exchange movements | 8 | (3) | (1) | ||
Unrecognised losses brought forward and utilised | 10 | 16 | 16 | ||
Banking surcharge | (341) | (27) | (199) | ||
Tax on paid-in equity | 48 | 61 | 73 | ||
UK tax rate change impact | 165 | 75 | |||
Adjustments in respect of prior years | 48 | (4) | 141 | ||
Tax charge for the year | £ (996) | (74) | [1] | (439) | [1] |
UK | |||||
Tax reconciliation | |||||
UK corporation tax | 19.00% | ||||
(Decrease)/increase in the carrying value of deferred tax assets in respect of: | £ (9) | 7 | 129 | ||
Republic of Ireland | |||||
Tax reconciliation | |||||
(Decrease)/increase in the carrying value of deferred tax assets in respect of: | (27) | £ (137) | £ (74) | ||
Netherlands | |||||
Tax reconciliation | |||||
(Decrease)/increase in the carrying value of deferred tax assets in respect of: | £ 48 | ||||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Tax - Analysis of deferred tax
Tax - Analysis of deferred tax (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax | |||
Deferred tax asset | £ (1,195) | £ (901) | |
Deferred tax liability | 359 | 291 | |
Net deferred tax asset | £ (836) | £ (610) | £ (745) |
Tax - Deferred tax reconciliati
Tax - Deferred tax reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of net deferred tax asset | ||
At 1 January | £ (610) | £ (745) |
Charge/(credit) to income statement | (9) | (31) |
Charge/(credit) to other comprehensive income | (224) | 163 |
Currency translation and other adjustments | 4 | (6) |
At 31 December | (836) | (610) |
Discontinued operations | ||
Reconciliation of net deferred tax asset | ||
Charge/(credit) to income statement | 3 | 9 |
Pension | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (4) | (139) |
Charge/(credit) to income statement | 19 | 15 |
Charge/(credit) to other comprehensive income | 10 | 119 |
Currency translation and other adjustments | (1) | 1 |
At 31 December | 24 | (4) |
Accelerated capital allowances | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (64) | 172 |
Charge/(credit) to income statement | 21 | (234) |
Currency translation and other adjustments | 1 | (2) |
At 31 December | (42) | (64) |
Provisions | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (85) | (118) |
Charge/(credit) to income statement | (5) | 33 |
Charge/(credit) to other comprehensive income | (7) | |
At 31 December | (97) | (85) |
Fair value of financial instruments | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 480 | 315 |
Charge/(credit) to income statement | (10) | 114 |
Charge/(credit) to other comprehensive income | (222) | 51 |
At 31 December | 248 | 480 |
Total losses carried forward | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (905) | (951) |
Charge/(credit) to income statement | (1) | 46 |
Currency translation and other adjustments | 4 | (9) |
At 31 December | (899) | (905) |
Total losses carried forward | Discontinued operations | ||
Reconciliation of net deferred tax asset | ||
Charge/(credit) to income statement | 3 | 9 |
Other | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (32) | (24) |
Charge/(credit) to income statement | (33) | (5) |
Charge/(credit) to other comprehensive income | (5) | (7) |
Currency translation and other adjustments | 4 | |
At 31 December | £ (70) | £ (32) |
Tax - Tax losses (Details)
Tax - Tax losses (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Unused tax losses | ||
Deferred tax asset | £ 1,195 | £ 901 |
Total losses carried forward | ||
Unused tax losses | ||
Deferred tax asset | 899 | 905 |
Total losses carried forward | National Westminster Bank Plc | ||
Unused tax losses | ||
Deferred tax asset | 592 | |
Total losses carried forward | UK | ||
Unused tax losses | ||
Deferred tax asset | 840 | 862 |
Total losses carried forward | UK | NatWest Markets Plc | ||
Unused tax losses | ||
Deferred tax asset | 56 | 62 |
Total losses carried forward | UK | National Westminster Bank Plc | ||
Unused tax losses | ||
Deferred tax asset | 608 | 592 |
Total losses carried forward | UK | RBS plc | ||
Unused tax losses | ||
Deferred tax asset | 176 | 200 |
Total losses carried forward | UK | Ulster Bank | ||
Unused tax losses | ||
Deferred tax asset | 8 | |
Total losses carried forward | Ireland | UBIDAC | ||
Unused tax losses | ||
Deferred tax asset | 11 | £ 43 |
Total losses carried forward | Ireland | NWM N.V. | ||
Unused tax losses | ||
Deferred tax asset | £ 48 |
Tax - Other (Details)
Tax - Other (Details) - GBP (£) £ in Millions | Apr. 01, 2023 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax: | ||||
Deferred tax asset | £ 1,195 | £ 901 | ||
Deferred tax liabilities | £ 359 | £ 291 | ||
UK corporation tax | 19.00% | 19.00% | 19.00% | |
Deferred tax expense (income) recognised in profit or loss | £ (9) | £ (31) | ||
Deferred tax expense (income) recognised in other comprehensive income | (224) | 163 | ||
UK tax rate change impact | (165) | (75) | ||
Deferred tax assets that have not been recognised | 5,437 | 4,965 | £ 4,653 | |
Tax losses and other temporary differences for which no deferred tax asset has been recognised | 24,699 | 25,091 | 23,555 | |
Deferred tax liabilities not recognised | 302 | 242 | 262 | |
Expected future taxation from unrecognised deferred tax liabilities | 0 | |||
Temporary differences associated with investments in subsidiaries and branches | 1,032 | 1,021 | 1,074 | |
Underlying temporary differences in respect of retained earnings of overseas subsidiaries and held-over gains on the incorporation of certain overseas branches | 1,032 | 1,021 | £ 1,074 | |
Forecast | ||||
Deferred tax: | ||||
UK corporation tax | 25.00% | |||
within 5 years | ||||
Deferred tax: | ||||
Tax losses and other temporary differences for which no deferred tax asset has been recognised | 77 | |||
After 5 years | ||||
Deferred tax: | ||||
Tax losses and other temporary differences for which no deferred tax asset has been recognised | 4,288 | |||
Total losses carried forward | ||||
Deferred tax: | ||||
Deferred tax asset | 899 | 905 | ||
Deferred tax expense (income) recognised in profit or loss | £ (1) | 46 | ||
Country of domicile | ||||
Deferred tax: | ||||
Limit of offset of losses carried forward (as a percent) | 25.00% | |||
Banking surcharge rate | 8.00% | |||
UK corporation tax | 19.00% | |||
Country of domicile | Forecast | ||||
Deferred tax: | ||||
Banking surcharge rate | 3.00% | |||
UK corporation tax | 25.00% | |||
Country of domicile | Total losses carried forward | ||||
Deferred tax: | ||||
Deferred tax asset | £ 840 | 862 | ||
Country of domicile | Effect of future tax rate change on recognised deferred tax [Member] | ||||
Deferred tax: | ||||
Increase (decrease) in deferred tax liability (asset) | (163) | |||
Deferred tax expense (income) recognised in profit or loss | (165) | |||
Deferred tax expense (income) recognised in other comprehensive income | 2 | |||
NatWest Markets Plc | Total losses carried forward | ||||
Deferred tax: | ||||
Deferred tax asset | 56 | 62 | ||
Increase (decrease) in deferred tax liability (asset) | 13 | |||
Tax losses carried forward | 254 | |||
NatWest Markets Plc | Effect of future tax rate change on recognised deferred tax [Member] | ||||
Deferred tax: | ||||
UK tax rate change impact | 7 | |||
National Westminster Bank Plc | Total losses carried forward | ||||
Deferred tax: | ||||
Deferred tax asset | 608 | |||
Tax losses carried forward | 2,610 | |||
RBS plc | Total losses carried forward | ||||
Deferred tax: | ||||
Deferred tax asset | 176 | 200 | ||
Tax losses carried forward | 3,979 | |||
Tax losses for which deferred tax assets are recognised | 722 | |||
UBIDAC | ||||
Deferred tax: | ||||
Increase (decrease) in deferred tax liability (asset) | 32 | |||
UBIDAC | Total losses carried forward | ||||
Deferred tax: | ||||
Deferred tax asset | 11 | £ 43 | ||
Tax losses for which deferred tax assets are recognised | 88 | |||
NWM N.V. | Total losses carried forward | ||||
Deferred tax: | ||||
Deferred tax asset | 48 | |||
Tax losses carried forward | 187 | |||
NWM N.V. | Total tax credits carryforward | ||||
Deferred tax: | ||||
Tax losses carried forward | £ 2,785 |
Discontinued operations and a_3
Discontinued operations and assets and liabilities of disposal groups (Details) € in Billions | Dec. 17, 2021item | Jun. 28, 2021EUR (€) | Dec. 31, 2021item |
Disclosure of analysis of single amount of discontinued operations [line items] | |||
Number of legally binding agreements for sale of business | item | 2 | ||
Allied Irish Banks, p.l.c | |||
Disclosure of analysis of single amount of discontinued operations [line items] | |||
Binding sale agreement transfer amount | € | € 4.2 | ||
Binding sale agreement, additional amount of undrawn exposures | € | € 2.8 | ||
Permanent TSB Group Holdings p.l.c. | |||
Disclosure of analysis of single amount of discontinued operations [line items] | |||
Approximate number of employees will have the right to transfer | item | 450 |
Discontinued operations and a_4
Discontinued operations and assets and liabilities of disposal groups - Profit (loss) from discontinued operations, net of tax (Details) - GBP (£) £ in Millions | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||
Interest receivable | £ 9,313 | £ 9,798 | [1] | £ 11,127 | [1] | |
Net interest income | 7,614 | 7,476 | [1] | 7,799 | [1] | |
Non-interest income | 2,898 | 3,032 | 6,188 | |||
Total income | 10,512 | 10,508 | [1] | 13,987 | [1] | |
Operating expenses | 7,758 | 7,858 | [1] | 9,280 | [1] | |
Profit before impairment losses | 2,754 | 2,650 | [1] | 4,707 | [1] | |
Impairment releases/(losses) | (1,278) | 3,131 | [1] | 724 | [1] | |
Operating profit before tax | 4,032 | (481) | [1] | 3,983 | [1] | |
Profit from discontinued operations, net of tax | [2] | 276 | 121 | [1] | 256 | [1] |
Discontinued operations | ||||||
Disclosure of analysis of single amount of discontinued operations [line items] | ||||||
Interest receivable | 260 | 273 | 248 | |||
Net interest income | 260 | 273 | 248 | |||
Non-interest income | 9 | 15 | 18 | |||
Total income | 269 | 288 | 266 | |||
Operating expenses | 47 | 47 | 45 | |||
Profit before impairment losses | 222 | 241 | 221 | |||
Impairment releases/(losses) | 57 | (111) | 28 | |||
Operating profit before tax | 279 | 130 | 249 | |||
Tax (charge)/credit | (3) | (9) | 7 | |||
Profit from discontinued operations, net of tax | £ 276 | £ 121 | £ 256 | |||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. | |||||
[2] | The results of discontinued operations, comprising the post-tax profit is shown as a single amount on the face of the income statement. An analysis of this amount is presented in Note 8 to the consolidated financial statements. |
Discontinued operations and a_5
Discontinued operations and assets and liabilities of disposal groups - Assets and liabilities of disposal groups (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets of disposal groups | |||
Loans to customers - amortised cost | £ 358,990 | £ 360,544 | |
Derivatives | 106,139 | 166,523 | |
Other assets | 8,242 | 7,890 | |
Assets | 781,992 | 799,491 | £ 723,039 |
Liabilities Of Disposal Groups | |||
Other liabilities | 5,797 | 6,388 | |
Liabilities | 740,189 | £ 755,667 | £ 679,483 |
Discontinued operations | |||
Assets of disposal groups | |||
Loans to customers - amortised cost | 9,002 | ||
Derivatives | 5 | ||
Other assets | 8 | ||
Assets | 9,015 | ||
Liabilities Of Disposal Groups | |||
Other liabilities | 5 | ||
Liabilities | 5 | ||
Net assets of disposal groups | £ 9,010 |
Discontinued operations and a_6
Discontinued operations and assets and liabilities of disposal groups - Operating cash flows attributable to discontinued operations (Details) - Discontinued operations - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Noncurrent assets or disposal groups classified as held for sale | |||
Net cash flows from operating activities | £ 1,290 | £ (895) | £ (3,909) |
Net increase/(decrease) in cash and cash equivalents | £ 1,290 | £ (895) | £ (3,909) |
Earnings per share (Details)
Earnings per share (Details) - GBP (£) £ in Millions, shares in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Earnings per share | |||||
Profit/(loss) from continuing operations attributable to ordinary shareholders | £ 2,674 | £ (874) | £ 2,877 | ||
Profit from discontinued operations attributable to ordinary shareholders | 276 | 121 | 256 | ||
Profit/(loss) attributable to ordinary shareholders | £ 2,950 | £ (753) | [1] | £ 3,133 | [1] |
Weighted average number of shares | |||||
Weighted average number of ordinary shares outstanding during the year | 11,622 | 12,095 | 12,067 | ||
Effect of dilutive share options and convertible securities | 45 | 35 | |||
Diluted weighted average number of ordinary shares outstanding during the year | 11,667 | 12,095 | 12,102 | ||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Financial instruments_ classifi
Financial instruments: classification - Assets (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Financial instruments | |||
Assets | £ 781,992 | £ 799,491 | £ 723,039 |
Financial Assets | 781,992 | 799,491 | |
Cash and balances at central banks | |||
Financial instruments | |||
Financial Assets | 177,757 | 124,489 | |
Trading assets | |||
Financial instruments | |||
Financial Assets | 59,158 | 68,990 | |
Derivatives [Member] | |||
Financial instruments | |||
Net hedging derivative assets | 44 | 93 | |
Financial Assets | 106,139 | 166,523 | |
Settlement balances | |||
Financial instruments | |||
Financial Assets | 2,141 | 2,297 | |
Loans to banks - amortised cost | |||
Financial instruments | |||
Items in course of collection from other banks | 67 | 148 | |
Financial Assets | 7,682 | 6,955 | |
Loans to customers - amortised cost | |||
Financial instruments | |||
Financial Assets | 358,990 | 360,544 | |
Other financial assets | |||
Financial instruments | |||
Financial Assets | 46,145 | 55,148 | |
Intangible assets other than goodwill | |||
Financial instruments | |||
Financial Assets | 6,723 | 6,655 | |
Assets, other [Member] | |||
Financial instruments | |||
Financial Assets | 8,242 | 7,890 | |
Assets of Disposal Groups [Member] | |||
Financial instruments | |||
Financial Assets | 9,015 | ||
Other assets | |||
Financial instruments | |||
Assets | 23,980 | 14,545 | |
Other assets | Intangible assets other than goodwill | |||
Financial instruments | |||
Assets | 6,723 | 6,655 | |
Other assets | Assets, other [Member] | |||
Financial instruments | |||
Assets | 8,242 | 7,890 | |
Other assets | Assets of Disposal Groups [Member] | |||
Financial instruments | |||
Financial Assets | 9,015 | ||
MVFTPL | |||
Financial instruments | |||
Financial Assets | 165,614 | 235,953 | |
MVFTPL | Trading assets | |||
Financial instruments | |||
Financial Assets | 59,158 | 68,990 | |
MVFTPL | Derivatives [Member] | |||
Financial instruments | |||
Financial Assets | 106,139 | 166,523 | |
MVFTPL | Other financial assets | |||
Financial instruments | |||
Financial Assets | 317 | 440 | |
FVOCI | |||
Financial instruments | |||
Financial Assets | 37,266 | 44,902 | |
FVOCI | Other financial assets | |||
Financial instruments | |||
Financial Assets | 37,266 | 44,902 | |
Amortised cost | |||
Financial instruments | |||
Financial Assets | 555,132 | 504,091 | |
Amortised cost | Cash and balances at central banks | |||
Financial instruments | |||
Financial Assets | 177,757 | 124,489 | |
Amortised cost | Settlement balances | |||
Financial instruments | |||
Financial Assets | 2,141 | 2,297 | |
Amortised cost | Loans to banks - amortised cost | |||
Financial instruments | |||
Financial Assets | 7,682 | 6,955 | |
Amortised cost | Loans to customers - amortised cost | |||
Financial instruments | |||
Financial Assets | 358,990 | 360,544 | |
Amortised cost | Other financial assets | |||
Financial instruments | |||
Financial Assets | £ 8,562 | £ 9,806 |
Financial instruments_ classi_2
Financial instruments: classification - Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Financial instruments | |||
Liabilities | £ 740,189 | £ 755,667 | £ 679,483 |
Financial Liabilities | 740,189 | 755,667 | |
Other comprehensive income, before tax, change in fair value of financial liability attributable to change in credit risk of liability | (29) | (52) | £ (189) |
Lease liabilities | 1,263 | 1,698 | |
Bank deposits | |||
Financial instruments | |||
Financial Liabilities | 26,279 | 20,606 | |
Items in course of transmission to other banks | 56 | 12 | |
Customer deposits | |||
Financial instruments | |||
Financial Liabilities | 479,810 | 431,739 | |
Settlement balances | |||
Financial instruments | |||
Financial Liabilities | 2,068 | 5,545 | |
Trading liabilities | |||
Financial instruments | |||
Financial Liabilities | 64,598 | 72,256 | |
Derivatives | |||
Financial instruments | |||
Financial Liabilities | 100,835 | 160,705 | |
Net hedging derivative liabilities | 120 | 130 | |
Other financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 49,326 | 45,811 | |
Subordinated liabilities | |||
Financial instruments | |||
Financial Liabilities | 8,429 | 9,962 | |
Notes in circulation | |||
Financial instruments | |||
Financial Liabilities | 3,047 | 2,655 | |
Other Financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 5,797 | 6,388 | |
Loans to customers - amortised cost | |||
Financial instruments | |||
Finance lease receivable | 8,531 | 9,061 | |
Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Liabilities | 4,441 | 4,506 | |
Financial Assets and Liabilities, Category | Other Financial liabilities | |||
Financial instruments | |||
Liabilities | 4,506 | ||
Other liabilities | Other Financial liabilities | |||
Financial instruments | |||
Liabilities | 4,441 | ||
Held-for-trading | |||
Financial instruments | |||
Financial Liabilities | 165,300 | 232,800 | |
Held-for-trading | Trading liabilities | |||
Financial instruments | |||
Financial Liabilities | 64,598 | 72,256 | |
Held-for-trading | Derivatives | |||
Financial instruments | |||
Financial Liabilities | 100,835 | 160,705 | |
Held-for-trading | Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Financial Liabilities | 165,433 | 232,961 | |
DFV. | Other financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 1,671 | 2,403 | |
Other comprehensive income, before tax, change in fair value of financial liability attributable to change in credit risk of liability | 0 | ||
DFV. | Subordinated liabilities | |||
Financial instruments | |||
Financial Liabilities | 703 | 793 | |
DFV. | Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Financial Liabilities | 2,374 | 3,196 | |
Amortised cost | |||
Financial instruments | |||
Financial Liabilities | 567,941 | 515,004 | |
Lease liabilities | 1,263 | 1,698 | |
Amortised cost | Bank deposits | |||
Financial instruments | |||
Financial Liabilities | 26,279 | 20,606 | |
Amortised cost | Customer deposits | |||
Financial instruments | |||
Financial Liabilities | 479,810 | 431,739 | |
Amortised cost | Settlement balances | |||
Financial instruments | |||
Financial Liabilities | 2,068 | 5,545 | |
Amortised cost | Other financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 47,655 | 43,408 | |
Amortised cost | Subordinated liabilities | |||
Financial instruments | |||
Financial Liabilities | 7,726 | 9,169 | |
Amortised cost | Notes in circulation | |||
Financial instruments | |||
Financial Liabilities | 3,047 | 2,655 | |
Amortised cost | Other Financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 1,356 | 1,882 | |
Amortised cost | Items where fair values approximates carrying value | Bank deposits | |||
Financial instruments | |||
Financial Liabilities | 4,900 | 4,400 | |
Amortised cost | Items where fair values approximates carrying value | Customer deposits | |||
Financial instruments | |||
Financial Liabilities | 442,400 | 371,700 | |
Amortised cost | Items where fair values approximates carrying value | Settlement balances | |||
Financial instruments | |||
Financial Liabilities | £ 2,100 | 5,500 | |
Amortised cost | Items where fair values approximates carrying value | Notes in circulation | |||
Financial instruments | |||
Financial Liabilities | £ 2,700 |
Financial instruments_ classi_3
Financial instruments: classification - Reverse repos and repos (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Bank deposits | ||
Financial instruments | ||
Repos | £ 7,912 | £ 6,470 |
Customer deposits | ||
Financial instruments | ||
Repos | 14,541 | 5,167 |
Trading liabilities | ||
Financial instruments | ||
Repos | 19,389 | 19,036 |
Trading assets | ||
Financial instruments | ||
Reverse repos | 20,742 | 19,404 |
Loans to banks - amortised cost | ||
Financial instruments | ||
Reverse repos | 189 | 153 |
Loans to customers - amortised cost | ||
Financial instruments | ||
Reverse repos | £ 25,962 | £ 25,011 |
Financial Instruments - class_3
Financial Instruments - classification - Offsetable assets and liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Instruments which can be offset | ||
IFRS offset | £ 607 | £ 733 |
Potential for offset not recognised by IFRS | ||
Financial Assets | 781,992 | 799,491 |
Derivatives [Member] | ||
Instruments which can be offset | ||
Gross | 4,626 | 4,811 |
IFRS offset | 607 | 733 |
Balance sheet | 5,233 | 5,544 |
Potential for offset not recognised by IFRS | ||
Cash collateral | (5,126) | (4,574) |
Securities collateral | 485 | (132) |
Net amount after the effect of netting arrangements and related collateral | 592 | 838 |
Instruments outside netting arrangements | 71 | 274 |
Balance sheet total | 5,304 | 5,818 |
Trading reverse repos/repos | ||
Instruments which can be offset | ||
Gross | 1,865 | 1,705 |
Balance sheet | 1,865 | 1,705 |
Potential for offset not recognised by IFRS | ||
Securities collateral | (1,795) | (1,633) |
Net amount after the effect of netting arrangements and related collateral | 70 | 72 |
Instruments outside netting arrangements | (512) | (1,337) |
Balance sheet total | 1,353 | 368 |
Non trading reverse repos / repos | ||
Instruments which can be offset | ||
Gross | 3,682 | 13,527 |
Balance sheet | 3,682 | 13,527 |
Potential for offset not recognised by IFRS | ||
Securities collateral | (3,682) | (13,527) |
Instruments outside netting arrangements | 16 | |
Balance sheet total | 3,698 | 13,527 |
Derivatives [Member] | ||
Instruments which can be offset | ||
Gross | 108,594 | 171,614 |
IFRS offset | (8,568) | (11,540) |
Balance sheet | 100,026 | 160,074 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (85,006) | (137,086) |
Cash collateral | (9,909) | (15,034) |
Other financial collateral | (2,913) | (4,921) |
Net amount after the effect of netting arrangements and related collateral | 2,198 | 3,033 |
Instruments outside netting arrangements | 809 | 631 |
Balance sheet total | 100,835 | 160,705 |
Trading repos | ||
Instruments which can be offset | ||
Gross | 42,664 | 42,203 |
IFRS offset | (24,422) | (24,867) |
Balance sheet | 18,242 | 17,336 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (900) | (929) |
Other financial collateral | (17,341) | (16,407) |
Net amount after the effect of netting arrangements and related collateral | 1 | |
Instruments outside netting arrangements | 1,147 | 1,700 |
Balance sheet total | 19,389 | 19,036 |
Non trading repos | ||
Instruments which can be offset | ||
Gross | 30,047 | 22,590 |
IFRS offset | (7,594) | (10,953) |
Balance sheet | 22,453 | 11,637 |
Potential for offset not recognised by IFRS | ||
Other financial collateral | (22,453) | (11,637) |
Balance sheet total | 22,453 | 11,637 |
Trading reverse repos | ||
Instruments which can be offset | ||
Gross | 44,529 | 43,908 |
IFRS offset | (24,422) | (24,867) |
Balance sheet | 20,107 | 19,041 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (900) | (929) |
Other financial collateral | (19,136) | (18,040) |
Net amount after the effect of netting arrangements and related collateral | 71 | 72 |
Instruments outside netting arrangements | 363 | |
Balance sheet total | 19,404 | |
Potential for offset not recognised by IFRS | ||
Instruments outside netting arrangements | 635 | |
Balance sheet total | 20,742 | |
Derivatives [Member] | ||
Instruments which can be offset | ||
Gross | 113,220 | 176,425 |
IFRS offset | (7,961) | (10,807) |
Balance sheet | 105,259 | 165,618 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (85,006) | (137,086) |
Cash collateral | (15,035) | (19,608) |
Other financial collateral | (2,428) | (5,053) |
Net amount after the effect of netting arrangements and related collateral | 2,790 | 3,871 |
Instruments outside netting arrangements | 880 | 905 |
Balance sheet total | 106,139 | 166,523 |
Potential for offset not recognised by IFRS | ||
Financial Assets | 106,139 | 166,523 |
Trading assets | ||
Potential for offset not recognised by IFRS | ||
Financial Assets | 59,158 | 68,990 |
Non trading reverse repos | ||
Instruments which can be offset | ||
Gross | 33,729 | 36,117 |
IFRS offset | (7,594) | (10,953) |
Balance sheet | 26,135 | 25,164 |
Potential for offset not recognised by IFRS | ||
Other financial collateral | (26,135) | (25,164) |
Instruments outside netting arrangements | 16 | |
Balance sheet total | £ 26,151 | £ 25,164 |
Financial Instruments - class_4
Financial Instruments - classification - IBOR reform (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | £ 781,992 | £ 799,491 |
Financial Liabilities | 740,189 | 755,667 |
IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Loan commitments | 7,437 | 42,702 |
Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Loan commitments | 55 | 682 |
GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Loan commitments | 1,016 | 25,616 |
EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Loan commitments | 7,176 | |
USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Loan commitments | 6,366 | 9,228 |
Subject to conversion provisions under IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 22,056 | |
Financial Liabilities | 426 | |
Loan commitments | 15,785 | |
Derivatives [Member] | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 1,155,600 | 5,424,600 |
Derivatives [Member] | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 289,600 | |
Derivatives [Member] | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 3,600 | 1,407,500 |
Derivatives [Member] | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 2,358,700 | |
Derivatives [Member] | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 1,152,000 | 1,368,800 |
Derivatives [Member] | Subject to conversion provisions under IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 557,700 | |
Currency swaps | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 2,200 | |
Currency swaps | Other IBOR | GBP | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 500 | 300 |
Currency swaps | Other IBOR | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 400 | 300 |
Currency swaps | Other IBOR | USD | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 25,300 | 47,400 |
Currency swaps | Other IBOR | Euro | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 1,000 | |
Currency swaps | GBP LIBOR | GBP | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 8,700 | 5,200 |
Currency swaps | GBP LIBOR | USD | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 91,700 | 98,500 |
Currency swaps | GBP LIBOR | Euro | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 100 | 2,300 |
Currency swaps | EUR IBOR | GBP | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 2,900 | |
Currency swaps | EUR IBOR | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 700 | |
Currency swaps | EUR IBOR | USD | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 85,800 | |
Currency swaps | EUR IBOR | Euro | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 100 | 5,100 |
Currency swaps | USD IBOR | GBP | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 8,200 | 2,000 |
Currency swaps | USD IBOR | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 400 | 1,200 |
Currency swaps | USD IBOR | USD | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 117,000 | 231,700 |
Currency swaps | USD IBOR | Euro | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 1,800 | |
Basis swaps | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 10,000 | |
Basis swaps | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 97,000 | |
Basis swaps | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 49,000 | |
Basis swaps | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Notional amount | 81,000 | |
Trading assets. | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 152 | 484 |
Trading assets. | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 1 | |
Trading assets. | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 62 | 75 |
Trading assets. | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 348 | |
Trading assets. | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 90 | 60 |
Loans to banks - amortised cost. | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 11 | 206 |
Loans to banks - amortised cost. | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 23 | |
Loans to banks - amortised cost. | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 101 | |
Loans to banks - amortised cost. | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 11 | 82 |
Loans to customers - amortised cost. | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 9,620 | 51,849 |
Loans to customers - amortised cost. | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 267 | 234 |
Loans to customers - amortised cost. | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 4,788 | 40,299 |
Loans to customers - amortised cost. | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 4,950 | |
Loans to customers - amortised cost. | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 4,565 | 6,366 |
Other financial assets | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 46,145 | 55,148 |
Other financial assets | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 1,632 | 3,591 |
Other financial assets | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 864 | 2,918 |
Other financial assets | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 370 | |
Other financial assets | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Assets | 768 | 303 |
Bank deposits | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 37 | 474 |
Bank deposits | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 107 | |
Bank deposits | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 37 | 367 |
Customer deposits. | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 4 | |
Customer deposits. | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 4 | |
Trading liabilities. | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 197 | 739 |
Trading liabilities. | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 2 | |
Trading liabilities. | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 31 | 54 |
Trading liabilities. | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 269 | |
Trading liabilities. | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 166 | 414 |
Financial liabilities (other) | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 49,326 | 45,811 |
Financial liabilities (other) | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 9,544 | 18,396 |
Financial liabilities (other) | Other IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 131 | 196 |
Financial liabilities (other) | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 2,390 | 2,492 |
Financial liabilities (other) | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 5,902 | |
Financial liabilities (other) | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 7,023 | 9,806 |
Subordinated Liabilities | IBOR reform | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 90 | 1,296 |
Subordinated Liabilities | GBP LIBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 8 | |
Subordinated Liabilities | EUR IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | 438 | |
Subordinated Liabilities | USD IBOR | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial Liabilities | £ 90 | £ 850 |
Financial Instruments - class_5
Financial Instruments - classification - AT1 issuances (Details) $ / shares in Units, £ in Millions, $ in Millions | Dec. 31, 2021GBP (£) | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020GBP (£) |
Disclosure of Financial Assets and Liabilities [Line Items] | |||
Financial Liabilities | £ 740,189 | £ 755,667 | |
Series U, Non-cumulative preference shares of US$0.01 | |||
Disclosure of Financial Assets and Liabilities [Line Items] | |||
Financial Liabilities | 494 | ||
Par value per share | $ / shares | $ 0.01 | ||
US$1.15 billion 8% notes | |||
Disclosure of Financial Assets and Liabilities [Line Items] | |||
Financial Liabilities | £ 734 | 734 | |
Notional amount of financial assets | $ | $ 1,150 | ||
Interest Rate | 8.00% | 8.00% | |
US$2.65 billion 8.625% notes | |||
Disclosure of Financial Assets and Liabilities [Line Items] | |||
Financial Liabilities | £ 2,046 | ||
Notional amount of financial assets | $ | $ 2,650 | ||
Interest Rate | 8.625% | 8.625% |
Financial instruments_ valuatio
Financial instruments: valuation - Hierarchy of assets (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value of assets | |||
Assets | £ 202,880 | £ 280,855 | |
Trading loans | |||
Fair value of assets | |||
Assets | 34,203 | 39,775 | |
Trading securities | |||
Fair value of assets | |||
Assets | 24,955 | 29,215 | |
Derivatives [Member] | |||
Fair value of assets | |||
Assets | 106,139 | 166,523 | |
Other loans | |||
Fair value of assets | |||
Assets | 566 | 353 | |
Securities | |||
Fair value of assets | |||
Assets | 37,017 | 44,989 | |
Level 1 | |||
Fair value of assets | |||
Assets | £ 48,443 | £ 57,507 | |
As % of Total Fair Value Assets | 24.00% | 20.00% | |
Level 1 | Trading securities | |||
Fair value of assets | |||
Assets | £ 19,563 | £ 21,535 | |
Level 1 | Securities | |||
Fair value of assets | |||
Assets | 28,880 | 35,972 | |
Level 2 | |||
Fair value of assets | |||
Assets | £ 152,385 | £ 221,625 | |
As % of Total Fair Value Assets | 75.00% | 79.00% | |
Level 2 | Trading loans | |||
Fair value of assets | |||
Assets | £ 33,482 | £ 39,550 | |
Level 2 | Trading securities | |||
Fair value of assets | |||
Assets | 5,371 | 7,599 | |
Level 2 | Derivatives [Member] | |||
Fair value of assets | |||
Assets | 105,222 | 165,441 | |
Level 2 | Other loans | |||
Fair value of assets | |||
Assets | 359 | 185 | |
Level 2 | Securities | |||
Fair value of assets | |||
Assets | 7,951 | 8,850 | |
Level 3 | |||
Fair value of assets | |||
Assets | £ 2,052 | £ 1,723 | |
As % of Total Fair Value Assets | 1.00% | 1.00% | |
Level 3 | Trading loans | |||
Fair value of assets | |||
Assets | £ 721 | £ 225 | |
Level 3 | Trading securities | |||
Fair value of assets | |||
Assets | 21 | 81 | |
Level 3 | Derivatives [Member] | |||
Fair value of assets | |||
Assets | 917 | 1,082 | |
Level 3 | Other loans | |||
Fair value of assets | |||
Assets | 207 | 168 | |
Level 3 | Securities | |||
Fair value of assets | |||
Assets | 186 | 167 | |
Recurring | Level 3 | |||
Fair value of assets | |||
Assets | £ 2,052 | £ 1,723 | £ 2,554 |
Financial instruments_ valuat_2
Financial instruments: valuation - Hierarchy of liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value of liabilities | |||
Liabilities | £ 167,807 | £ 236,157 | |
Trading deposits | |||
Fair value of liabilities | |||
Liabilities | 38,660 | 44,069 | |
Debt securities in issue, trading | |||
Fair value of liabilities | |||
Liabilities | 974 | 1,408 | |
Short positions, trading | |||
Fair value of liabilities | |||
Liabilities | 24,964 | 26,779 | |
Derivatives [Member] | |||
Fair value of liabilities | |||
Liabilities | 100,835 | 160,705 | |
Other financial liabilities - Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 1,103 | 1,607 | |
Other deposits | |||
Fair value of liabilities | |||
Liabilities | 568 | 796 | |
Financial liabilities, subordinated | |||
Fair value of liabilities | |||
Liabilities | 703 | 793 | |
Level 1 | |||
Fair value of liabilities | |||
Liabilities | £ 20,507 | £ 19,045 | |
As % of Total FV Assets | 12.00% | 8.00% | |
Level 1 | Short positions, trading | |||
Fair value of liabilities | |||
Liabilities | £ 20,507 | £ 19,045 | |
Level 2 | |||
Fair value of liabilities | |||
Liabilities | £ 146,691 | £ 216,218 | |
As % of Total FV Assets | 88.00% | 92.00% | |
Level 2 | Trading deposits | |||
Fair value of liabilities | |||
Liabilities | £ 38,658 | £ 44,062 | |
Level 2 | Debt securities in issue, trading | |||
Fair value of liabilities | |||
Liabilities | 974 | 1,408 | |
Level 2 | Short positions, trading | |||
Fair value of liabilities | |||
Liabilities | 4,456 | 7,734 | |
Level 2 | Derivatives [Member] | |||
Fair value of liabilities | |||
Liabilities | 100,229 | 159,818 | |
Level 2 | Other financial liabilities - Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 1,103 | 1,607 | |
Level 2 | Other deposits | |||
Fair value of liabilities | |||
Liabilities | 568 | 796 | |
Level 2 | Financial liabilities, subordinated | |||
Fair value of liabilities | |||
Liabilities | 703 | 793 | |
Level 3 | |||
Fair value of liabilities | |||
Liabilities | £ 609 | £ 894 | |
As % of Total FV Assets | 0.00% | 0.00% | |
Level 3 | Trading deposits | |||
Fair value of liabilities | |||
Liabilities | £ 2 | £ 7 | |
Level 3 | Short positions, trading | |||
Fair value of liabilities | |||
Liabilities | 1 | ||
Level 3 | Derivatives [Member] | |||
Fair value of liabilities | |||
Liabilities | 606 | 887 | |
Recurring | Level 3 | |||
Fair value of liabilities | |||
Liabilities | £ 609 | £ 894 | £ 1,317 |
Financial instruments_ valuat_3
Financial instruments: valuation - Adjustments (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Adjustments | ||
Funding - FVA | £ 90 | £ 140 |
Credit - CVA | 390 | 390 |
Bid - Offer | 113 | 148 |
Product and deal specific | 119 | 172 |
Financial instruments valuation adjustments | 712 | 850 |
Financial liabilities at fair value through profit or loss | ||
Product and deal specific | ||
Net (gains) carried forward | 71 | 63 |
Net gains deferred | 103 | 75 |
Net gains recognized in the income statement | £ 94 | £ 100 |
Financial instruments_ valuat_4
Financial instruments: valuation - Valuation techniques (Details) - Level 3 - GBP (£) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, assets | £ 100,000,000 | £ 140,000,000 | ||
Increase (decrease) in fair value measurement due to reasonably possible decrease in unobservable input, assets | 110,000,000 | 110,000,000 | ||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, liabilities | 30,000,000 | 40,000,000 | ||
Increase (decrease) in fair value measurement due to reasonably possible decrease in unobservable input, liabilities | £ 30,000,000 | £ (50,000,000) | ||
Recurring | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Basis points of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 18 | 0.0021 | ||
Basis Points of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 0.08 | 0.0015 | ||
Recurring | Loans | Price-based | Price | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of reasonably possible increase in unobservable input, assets | 106.00% | 105.00% | 106.00% | 105.00% |
Recurring | Loans | Discounted cash flow | Discount margin | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of reasonably possible increase in unobservable input, assets | 0.55% | 2.26% | 0.55% | 2.26% |
Percentage of reasonably possible decrease in unobservable input, assets | 0.46% | 0.51% | 0.46% | 0.51% |
Recurring | Loans | Discounted cash flow | Credit spreads | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of reasonably possible increase in unobservable input, assets | 1.02% | 1.19% | 1.02% | 1.19% |
Percentage of reasonably possible decrease in unobservable input, assets | 0.40% | 0.69% | 0.40% | 0.69% |
Recurring | Debt securities | Price-based | Price | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of reasonably possible increase in unobservable input, assets | 240.00% | 232.00% | 240.00% | 232.00% |
Recurring | Equity shares | Price-based | Price | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, assets | £ 27,737 | £ 30,378 | ||
Recurring | Equity shares | Market comparables | Price | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of reasonably possible increase in unobservable input, assets | 7.00% | 80.00% | 7.00% | 80.00% |
Recurring | Equity shares | Net asset valuation | Fund NAV | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of reasonably possible increase in unobservable input, assets | 120.00% | 120.00% | 120.00% | 120.00% |
Percentage of reasonably possible decrease in unobservable input, assets | 80.00% | 80.00% | 80.00% | 80.00% |
Recurring | Equity shares | Discounted cash flow | Discount margin | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of reasonably possible increase in unobservable input, assets | 8.00% | 9.00% | 8.00% | 9.00% |
Percentage of reasonably possible decrease in unobservable input, assets | 6.00% | 7.00% | 6.00% | 7.00% |
Recurring | Credit Default Swap | Credit Derivative Pricing | Credit spreads | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 635.00% | 500.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 0.06% | 0.02% | ||
Recurring | Credit Default Swap | Option pricing model | Correlation | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 95.00% | 95.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | (15.00%) | (50.00%) | ||
Recurring | Credit Default Swap | Option pricing model | Volatility | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 108.00% | 80.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 30.00% | 27.00% | ||
Recurring | Credit Default Swap | Option pricing model | Upfront points | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 100.00% | 100.00% | ||
Recurring | Credit Default Swap | Option pricing model | Recovery rate | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 60.00% | 40.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 10.00% | |||
Recurring | Derivatives [Member] | Option pricing model | Volatility | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 77.00% | 60.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 17.00% | 17.00% | ||
Recurring | Interest and foreign exchange contracts | Inflation volatility | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 2.00% | 2.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 1.00% | 1.00% | ||
Recurring | Interest and foreign exchange contracts | Inflation rate | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 3.00% | 2.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 2.00% | 1.00% | ||
Recurring | Interest and foreign exchange contracts | Option pricing model | Correlation | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 100.00% | 100.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | (50.00%) | (50.00%) | ||
Recurring | Interest and foreign exchange contracts | Option pricing model | Constant Prepayment Rate | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 16.00% | 18.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 2.00% | 2.00% | ||
Recurring | Interest and foreign exchange contracts | Option pricing model | Mean Reversal | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 92.00% | 92.00% | ||
Recurring | Equity | Option pricing model | Correlation | ||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 87.00% | 87.00% | ||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | (53.00%) | (53.00%) |
Financial instruments_ valuat_5
Financial instruments: valuation - Level 3 Sensitivities of Assets (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value of assets | |||
Assets | £ 202,880 | £ 280,855 | |
Trading securities [Member] | |||
Fair value of assets | |||
Assets | 24,955 | 29,215 | |
Derivatives [Member] | |||
Fair value of assets | |||
Assets | 106,139 | 166,523 | |
Other loans | |||
Fair value of assets | |||
Assets | 566 | 353 | |
Securities | |||
Fair value of assets | |||
Assets | 37,017 | 44,989 | |
Level 3 | |||
Fair value of assets | |||
Assets | 2,052 | 1,723 | |
Sensitivity favourable | 100 | 140 | |
Sensitivity unfavourable | (110) | (110) | |
Level 3 | Loans | |||
Fair value of assets | |||
Assets | 721 | 225 | |
Sensitivity favourable | 10 | 10 | |
Sensitivity unfavourable | (10) | ||
Level 3 | Trading securities [Member] | |||
Fair value of assets | |||
Assets | 21 | 81 | |
Level 3 | Derivatives [Member] | |||
Fair value of assets | |||
Assets | 917 | 1,082 | |
Sensitivity favourable | 60 | 80 | |
Sensitivity unfavourable | (70) | (80) | |
Level 3 | Other loans | |||
Fair value of assets | |||
Assets | 207 | 168 | |
Sensitivity favourable | 10 | 20 | |
Sensitivity unfavourable | (10) | (10) | |
Level 3 | Securities | |||
Fair value of assets | |||
Assets | 186 | 167 | |
Sensitivity favourable | 20 | 30 | |
Sensitivity unfavourable | (20) | (20) | |
Recurring | Level 3 | |||
Fair value of assets | |||
Assets | £ 2,052 | £ 1,723 | £ 2,554 |
Financial instruments_ valuat_6
Financial instruments: valuation - Level 3 Sensitivities of Liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value of liabilities | |||
Liabilities | £ 167,807 | £ 236,157 | |
Derivatives [Member] | |||
Fair value of liabilities | |||
Liabilities | 100,835 | 160,705 | |
Other financial liabilities - Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 1,103 | 1,607 | |
Level 3 | |||
Fair value of liabilities | |||
Liabilities | 609 | 894 | |
Sensitivity favourable | (30) | 50 | |
Sensitivity unfavourable | 30 | 40 | |
Level 3 | Deposits | |||
Fair value of liabilities | |||
Liabilities | 2 | 7 | |
Level 3 | Short Positions | |||
Fair value of liabilities | |||
Liabilities | 1 | ||
Level 3 | Derivatives [Member] | |||
Fair value of liabilities | |||
Liabilities | 606 | 887 | |
Sensitivity favourable | (30) | 50 | |
Sensitivity unfavourable | 30 | 40 | |
Recurring | Level 3 | |||
Fair value of liabilities | |||
Liabilities | £ 609 | £ 894 | £ 1,317 |
Financial instruments_ valuat_7
Financial instruments: valuation - Movement in Level 3 portfolios - Assets (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Movement in level 3 assets | ||
At 1 January | £ 280,855 | |
At 31 December | 202,880 | £ 280,855 |
Level 3 | ||
Movement in level 3 assets | ||
At 1 January | 1,723 | |
At 31 December | 2,052 | 1,723 |
Level 3 | Financial assets, other | Other operating income and interest income [Member] | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement | 29 | 21 |
Recurring | Level 3 | ||
Movement in level 3 assets | ||
At 1 January | 1,723 | 2,554 |
Amounts recorded in the income statement | (122) | 106 |
Amounts recorded in the statement of comprehensive income | 23 | 63 |
Level 3 transfers in | 128 | 263 |
Level 3 transfers out | (109) | (139) |
Purchases/Originations | 1,416 | 768 |
Settlements/Other decreases | (411) | (446) |
Sales | (590) | (1,449) |
Foreign exchange and other adjustments | (6) | 3 |
At 31 December | 2,052 | 1,723 |
Recurring | Level 3 | Financial assets | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement in respect of balances held at year end - unrealised | (126) | 107 |
Recurring | Level 3 | Trading assets | ||
Movement in level 3 assets | ||
At 1 January | 1,388 | 2,233 |
Amounts recorded in the income statement | (93) | 127 |
Level 3 transfers in | 125 | 165 |
Level 3 transfers out | (104) | (139) |
Purchases/Originations | 965 | 441 |
Settlements/Other decreases | (47) | (293) |
Sales | (573) | (1,148) |
Foreign exchange and other adjustments | (3) | 2 |
At 31 December | 1,658 | 1,388 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | (93) | 129 |
Recurring | Level 3 | Financial assets, other | ||
Movement in level 3 assets | ||
At 1 January | 335 | 321 |
Amounts recorded in the income statement | (29) | (21) |
Amounts recorded in the statement of comprehensive income | 23 | 63 |
Level 3 transfers in | 3 | 98 |
Level 3 transfers out | (6) | |
Purchases/Originations | 452 | 327 |
Settlements/Other decreases | (364) | (153) |
Sales | (17) | (301) |
Foreign exchange and other adjustments | (3) | 1 |
At 31 December | 394 | 335 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | £ (32) | £ (22) |
Financial instruments_ valuat_8
Financial instruments: valuation - Movement in Level 3 portfolios - Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Movement in level 3 liabilities | ||
Liabilities at beginning of period | £ 236,157 | |
Liabilities at end of period | 167,807 | £ 236,157 |
Level 3 | ||
Movement in level 3 liabilities | ||
Liabilities at beginning of period | 894 | |
Liabilities at end of period | 609 | 894 |
Leveraged finance loan | 450 | |
Level 3 | Other operating income and interest income | ||
Movement in level 3 liabilities | ||
Net gain (loss) on trading assets and liabilities recorded in income from trading activities | (194) | |
Level 3 | Income from trading activities | ||
Movement in level 3 liabilities | ||
Net gain (loss) on trading assets and liabilities recorded in income from trading activities | 3 | |
Recurring | Level 3 | ||
Movement in level 3 liabilities | ||
Liabilities at beginning of period | 894 | 1,317 |
Amounts recorded in the income statement | (90) | (67) |
Level 3 transfers in | 20 | 188 |
Level 3 transfers out | (168) | (368) |
Purchases/Originations | 305 | 127 |
Settlements/Other decreases | (28) | (59) |
Sales | (321) | (245) |
Foreign exchange and other adjustments | (3) | 1 |
Liabilities at end of period | 609 | 894 |
Recurring | Level 3 | Financial liabilities | ||
Movement in level 3 liabilities | ||
Amounts recorded in the income statement in respect of balances held at year end - unrealised | £ (90) | £ (68) |
Financial instruments_ valuat_9
Financial instruments: valuation - Assets at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair value of assets | ||
Financial Assets | £ 781,992 | £ 799,491 |
Other financial assets - securities | 202,880 | 280,855 |
Carrying value, Financial liabilities | 740,189 | 755,667 |
Level 1 | ||
Fair value of assets | ||
Other financial assets - securities | 48,443 | 57,507 |
Level 2 | ||
Fair value of assets | ||
Other financial assets - securities | 152,385 | 221,625 |
Level 3 | ||
Fair value of assets | ||
Other financial assets - securities | 2,052 | 1,723 |
Cash and balances at central banks | ||
Fair value of assets | ||
Financial Assets | 177,757 | 124,489 |
Loans and advances to banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 7,682 | 6,955 |
Loans and advances to customers | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 358,990 | 360,544 |
Securities | ||
Fair value of assets | ||
Other financial assets - securities | 37,017 | 44,989 |
Securities | Level 1 | ||
Fair value of assets | ||
Other financial assets - securities | 28,880 | 35,972 |
Securities | Level 2 | ||
Fair value of assets | ||
Other financial assets - securities | 7,951 | 8,850 |
Securities | Level 3 | ||
Fair value of assets | ||
Other financial assets - securities | 186 | 167 |
Items where fair values approximates carrying value | Cash and balances at central banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 177,800 | 124,500 |
Items where fair values approximates carrying value | Settlement balances | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 2,100 | 2,300 |
Items where fair values approximates carrying value | Loans and advances to banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 100 | 100 |
Carrying value | Loans and advances to banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 7,500 | 6,900 |
Carrying value | Loans and advances to customers | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 359,000 | 360,500 |
Carrying value | Other financial assets - securities | Financial assets at amortised cost | ||
Fair value of assets | ||
Financial Assets | 8,600 | 9,800 |
At fair value | Loans and advances to banks | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 7,500 | 6,900 |
At fair value | Loans and advances to banks | Level 2 | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 5,000 | 3,800 |
At fair value | Loans and advances to banks | Level 3 | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 2,500 | 3,100 |
At fair value | Loans and advances to customers | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 354,100 | 359,200 |
At fair value | Loans and advances to customers | Level 2 | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 28,000 | 25,200 |
At fair value | Loans and advances to customers | Level 3 | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 326,100 | 334,000 |
At fair value | Other financial assets - securities | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 8,600 | 10,100 |
At fair value | Other financial assets - securities | Level 1 | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 4,400 | 5,900 |
At fair value | Other financial assets - securities | Level 2 | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | 700 | 1,200 |
At fair value | Other financial assets - securities | Level 3 | Financial assets at amortised cost | ||
Fair value of assets | ||
Other financial assets - securities | £ 3,500 | £ 3,000 |
Financial instruments_ valua_10
Financial instruments: valuation - Liabilities at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair value of liabilities | ||
Financial Liabilities | £ 740,189 | £ 755,667 |
Fair value, Financial liabilities | 167,807 | 236,157 |
Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 567,941 | 515,004 |
Level 1 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 20,507 | 19,045 |
Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 146,691 | 216,218 |
Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 609 | 894 |
Deposits by banks | ||
Fair value of liabilities | ||
Financial Liabilities | 26,279 | 20,606 |
Deposits by banks | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 26,279 | 20,606 |
Customer deposits | ||
Fair value of liabilities | ||
Financial Liabilities | 479,810 | 431,739 |
Customer deposits | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 479,810 | 431,739 |
Settlement balances liabilities | ||
Fair value of liabilities | ||
Financial Liabilities | 2,068 | 5,545 |
Settlement balances liabilities | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 2,068 | 5,545 |
Financial liabilities, subordinated | ||
Fair value of liabilities | ||
Financial Liabilities | 8,429 | 9,962 |
Fair value, Financial liabilities | 703 | 793 |
Financial liabilities, subordinated | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 7,726 | 9,169 |
Financial liabilities, subordinated | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 703 | 793 |
Notes in circulation | ||
Fair value of liabilities | ||
Financial Liabilities | 3,047 | 2,655 |
Notes in circulation | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 3,047 | 2,655 |
Items where fair values approximates carrying value | Deposits by banks | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 4,900 | 4,400 |
Items where fair values approximates carrying value | Customer deposits | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 442,400 | 371,700 |
Items where fair values approximates carrying value | Settlement balances liabilities | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 2,100 | 5,500 |
Items where fair values approximates carrying value | Notes in circulation | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 2,700 | |
Fair value, Financial liabilities | 3,000 | |
Carrying value | Deposits by banks | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 21,400 | 16,200 |
Carrying value | Customer deposits | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 37,400 | 60,000 |
Carrying value | Other financial liabilities - debt securities in issue | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 47,700 | 43,400 |
Carrying value | Financial liabilities, subordinated | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Financial Liabilities | 7,700 | 9,200 |
At fair value | Deposits by banks | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 21,000 | 16,200 |
At fair value | Deposits by banks | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 18,700 | 11,300 |
At fair value | Deposits by banks | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 2,300 | 4,900 |
At fair value | Customer deposits | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 37,600 | 60,100 |
At fair value | Customer deposits | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 18,100 | 10,100 |
At fair value | Customer deposits | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 19,500 | 50,000 |
At fair value | Other financial liabilities - debt securities in issue | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 48,600 | 44,600 |
At fair value | Other financial liabilities - debt securities in issue | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 41,400 | 34,700 |
At fair value | Other financial liabilities - debt securities in issue | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 7,200 | 9,900 |
At fair value | Financial liabilities, subordinated | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 8,300 | 9,800 |
At fair value | Financial liabilities, subordinated | Level 2 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 8,200 | 9,700 |
At fair value | Financial liabilities, subordinated | Level 3 | Financial liabilities at amortised cost | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | £ 100 | £ 100 |
Financial Instruments - matur_3
Financial Instruments - maturity analysis - Residual Maturity (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Financial instruments | ||
Financial Assets | £ 781,992 | £ 799,491 |
Financial Liabilities | 740,189 | 755,667 |
Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 567,941 | 515,004 |
Deposits by banks | ||
Financial instruments | ||
Financial Liabilities | 26,279 | 20,606 |
Deposits by banks | Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 26,279 | 20,606 |
Derivatives [Member] | ||
Financial instruments | ||
Financial Liabilities | 100,835 | 160,705 |
Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 479,810 | 431,739 |
Settlement balances and short positions | ||
Financial instruments | ||
Financial Liabilities | 2,068 | 5,545 |
Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 64,598 | 72,256 |
Financial liabilities (other) | ||
Financial instruments | ||
Financial Liabilities | 49,326 | 45,811 |
Financial liabilities (other) | Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 47,655 | 43,408 |
Financial liabilities, subordinated | ||
Financial instruments | ||
Financial Liabilities | 8,429 | 9,962 |
Financial liabilities, subordinated | Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 7,726 | 9,169 |
Notes in circulation | ||
Financial instruments | ||
Financial Liabilities | 3,047 | 2,655 |
Notes in circulation | Financial liabilities at amortised cost | ||
Financial instruments | ||
Financial Liabilities | 3,047 | 2,655 |
Lease liabilities. | ||
Financial instruments | ||
Financial Liabilities | 1,263 | 1,698 |
Less than 12 months | Deposits by banks | ||
Financial instruments | ||
Financial Liabilities | 13,715 | 12,315 |
Less than 12 months | Derivatives [Member] | ||
Financial instruments | ||
Financial Liabilities | 34,593 | 47,361 |
Less than 12 months | Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 478,801 | 430,283 |
Less than 12 months | Settlement balances and short positions | ||
Financial instruments | ||
Financial Liabilities | 2,068 | 5,545 |
Less than 12 months | Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 41,664 | 45,037 |
Less than 12 months | Financial liabilities (other) | ||
Financial instruments | ||
Financial Liabilities | 16,060 | 12,403 |
Less than 12 months | Financial liabilities, subordinated | ||
Financial instruments | ||
Financial Liabilities | 1,375 | 365 |
Less than 12 months | Notes in circulation | ||
Financial instruments | ||
Financial Liabilities | 3,047 | 2,655 |
Less than 12 months | Lease liabilities. | ||
Financial instruments | ||
Financial Liabilities | 238 | 185 |
More than 12 months | Deposits by banks | ||
Financial instruments | ||
Financial Liabilities | 12,564 | 8,291 |
More than 12 months | Derivatives [Member] | ||
Financial instruments | ||
Financial Liabilities | 66,242 | 113,344 |
More than 12 months | Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 1,009 | 1,456 |
More than 12 months | Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 22,934 | 27,219 |
More than 12 months | Financial liabilities (other) | ||
Financial instruments | ||
Financial Liabilities | 33,266 | 33,408 |
More than 12 months | Financial liabilities, subordinated | ||
Financial instruments | ||
Financial Liabilities | 7,054 | 9,597 |
More than 12 months | Lease liabilities. | ||
Financial instruments | ||
Financial Liabilities | 1,025 | 1,513 |
Cash and balances at central banks | ||
Financial instruments | ||
Financial Assets | 177,757 | 124,489 |
Cash and balances at central banks | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 177,757 | 124,489 |
Trading assets | ||
Financial instruments | ||
Financial Assets | 59,158 | 68,990 |
Trading assets | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 40,263 | 42,037 |
Trading assets | More than 12 months | ||
Financial instruments | ||
Financial Assets | 18,895 | 26,953 |
Derivatives [Member] | ||
Financial instruments | ||
Financial Assets | 106,139 | 166,523 |
Derivatives [Member] | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 34,538 | 46,244 |
Derivatives [Member] | More than 12 months | ||
Financial instruments | ||
Financial Assets | 71,601 | 120,279 |
Settlement balances | ||
Financial instruments | ||
Financial Assets | 2,141 | 2,297 |
Settlement balances | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 2,141 | 2,297 |
The loans and advances to banks | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 7,682 | 6,955 |
The loans and advances to banks | Less than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 7,425 | 6,835 |
The loans and advances to banks | More than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 257 | 120 |
The loans and advances to customers | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 358,990 | 360,544 |
The loans and advances to customers | Less than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 103,689 | 87,531 |
The loans and advances to customers | More than 12 months | Financial assets at amortised cost | ||
Financial instruments | ||
Financial Assets | 255,301 | 273,013 |
Financial assets (Other) | ||
Financial instruments | ||
Financial Assets | 46,145 | 55,148 |
Financial assets (Other) | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 11,151 | 8,901 |
Financial assets (Other) | More than 12 months | ||
Financial instruments | ||
Financial Assets | £ 34,994 | £ 46,247 |
Financial Instruments - matur_4
Financial Instruments - maturity analysis - Contractual Maturity (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Financial instruments | ||
Contractual maturity period for undiscounted cash flows | 20 years | |
Threshold period for principal amounts of financial liabilities to be excluded from contractual maturity for cash outflows | 20 years | |
Threshold period for interest payments of financial liabilities to be excluded from contractual maturity for cash outflows | 20 years | |
Financial Assets | £ 781,992 | £ 799,491 |
Financial Liabilities | 740,189 | 755,667 |
0-3 months | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 255,584 | 183,974 |
0-3 months | Cash and balances at central banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 177,757 | 124,489 |
0-3 months | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | (23) | 14 |
0-3 months | Settlement balances | ||
Financial instruments | ||
Undiscounted cash flows, assets | 2,141 | 2,297 |
0-3 months | The loans and advances to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 5,600 | |
0-3 months | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 47,507 | |
0-3 months | Financial assets (Other) | ||
Financial instruments | ||
Undiscounted cash flows, assets | 3,924 | 4,019 |
0-3 months | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 290 | 48 |
0-3 months | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 498,580 | 446,056 |
0-3 months | Deposits by banks | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 13,292 | 11,217 |
0-3 months | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 473,123 | 421,763 |
0-3 months | Settlement balances liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,068 | 5,545 |
0-3 months | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | (57) | 36 |
0-3 months | Financial liabilities (other) | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 6,967 | 4,716 |
0-3 months | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 66 | 73 |
0-3 months | Notes in circulation | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 3,047 | 2,655 |
0-3 months | Lease liabilities. | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 74 | 51 |
0-3 months | Guarantees and Commitments | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 120,591 | 124,166 |
0-3 months | Guarantees | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,055 | 2,244 |
0-3 months | Commitments | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 118,536 | 121,922 |
3-12 months | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 52,717 | 54,266 |
3-12 months | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | (32) | 18 |
3-12 months | The loans and advances to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 1,245 | |
3-12 months | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 46,718 | |
3-12 months | Financial assets (Other) | ||
Financial instruments | ||
Undiscounted cash flows, assets | 7,576 | 5,919 |
3-12 months | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 340 | 366 |
3-12 months | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 16,888 | 18,553 |
3-12 months | Deposits by banks | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 421 | 1,078 |
3-12 months | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 5,440 | 8,528 |
3-12 months | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | (31) | (17) |
3-12 months | Financial liabilities (other) | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 9,293 | 8,144 |
3-12 months | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,604 | 685 |
3-12 months | Lease liabilities. | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 161 | 135 |
More than 1 year but less than 3 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 75,285 | 78,666 |
More than 1 year but less than 3 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 72 | 96 |
More than 1 year but less than 3 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 65,138 | |
More than 1 year but less than 3 years | Financial assets (Other) | ||
Financial instruments | ||
Undiscounted cash flows, assets | 10,467 | 12,592 |
More than 1 year but less than 3 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 746 | 840 |
More than 1 year but less than 3 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 22,936 | 24,981 |
More than 1 year but less than 3 years | Deposits by banks | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 566 | 3,241 |
More than 1 year but less than 3 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,155 | 1,407 |
More than 1 year but less than 3 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 561 | 94 |
More than 1 year but less than 3 years | Financial liabilities (other) | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 16,953 | 15,558 |
More than 1 year but less than 3 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 3,481 | 4,387 |
More than 1 year but less than 3 years | Lease liabilities. | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 220 | 294 |
More than 3 years but less than 5 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 53,624 | 70,142 |
More than 3 years but less than 5 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 15 | |
More than 3 years but less than 5 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 58,680 | |
More than 3 years but less than 5 years | Financial assets (Other) | ||
Financial instruments | ||
Undiscounted cash flows, assets | 8,048 | 10,791 |
More than 3 years but less than 5 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 504 | 671 |
More than 3 years but less than 5 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 24,630 | 20,223 |
More than 3 years but less than 5 years | Deposits by banks | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 12,003 | 5,038 |
More than 3 years but less than 5 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 73 | 23 |
More than 3 years but less than 5 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 155 | 3 |
More than 3 years but less than 5 years | Financial liabilities (other) | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 10,062 | 11,470 |
More than 3 years but less than 5 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,170 | 3,444 |
More than 3 years but less than 5 years | Lease liabilities. | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 167 | 245 |
5-10 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 81,202 | 94,307 |
5-10 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 10 | 12 |
5-10 years | The loans and advances to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 1 | |
5-10 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 81,544 | |
5-10 years | Financial assets (Other) | ||
Financial instruments | ||
Undiscounted cash flows, assets | 7,444 | 11,855 |
5-10 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 704 | 895 |
5-10 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 9,534 | 8,800 |
5-10 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 4 | 26 |
5-10 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | (152) | 64 |
5-10 years | Financial liabilities (other) | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 7,905 | 7,358 |
5-10 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,496 | 923 |
5-10 years | Lease liabilities. | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 281 | 429 |
10-20 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 96,032 | 94,590 |
10-20 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 17 | 6 |
10-20 years | The loans and advances to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 110 | |
10-20 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 88,155 | |
10-20 years | Financial assets (Other) | ||
Financial instruments | ||
Undiscounted cash flows, assets | 5,523 | 5,774 |
10-20 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 377 | 545 |
10-20 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 927 | 1,331 |
10-20 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 19 | 20 |
10-20 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | (198) | (2) |
10-20 years | Financial liabilities (other) | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 292 | 254 |
10-20 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 563 | 562 |
10-20 years | Lease liabilities. | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 251 | 497 |
Financial liabilities at fair value through profit or loss that meet definition of held for trading | ||
Financial instruments | ||
Financial Liabilities | 165,300 | 232,800 |
Financial liabilities at fair value through profit or loss that meet definition of held for trading | Financial Assets and Liabilities, Category | ||
Financial instruments | ||
Financial Liabilities | 165,433 | 232,961 |
Designated as at fair value through profit or loss [Member] | ||
Financial instruments | ||
Financial Assets | 165,614 | £ 235,953 |
Financial assets at amortised cost | 0-3 months | The loans and advances to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 5,735 | |
Financial assets at amortised cost | 0-3 months | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 65,760 | |
Financial assets at amortised cost | 3-12 months | The loans and advances to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 1,689 | |
Financial assets at amortised cost | 3-12 months | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 43,144 | |
Financial assets at amortised cost | More than 1 year but less than 3 years | The loans and advances to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 21 | |
Financial assets at amortised cost | More than 1 year but less than 3 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 63,979 | |
Financial assets at amortised cost | More than 3 years but less than 5 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 45,057 | |
Financial assets at amortised cost | 5-10 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 73,044 | |
Financial assets at amortised cost | 10-20 years | The loans and advances to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | £ 90,115 |
Trading assets and liabilitie_2
Trading assets and liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Securities | ||
Total | £ 59,158 | £ 68,990 |
Deposits | ||
Total | 64,598 | 72,256 |
Trading liabilities | ||
Deposits | ||
Repos | 19,389 | 19,036 |
Collateral received | 17,718 | 23,229 |
Other deposits | 1,553 | 1,804 |
Total deposits | 38,660 | 44,069 |
Debt securities in issue | 974 | 1,408 |
Short positions | 24,964 | 26,779 |
Total | 64,598 | 72,256 |
Trading assets | ||
Loans | ||
Reverse repos | 20,742 | 19,404 |
Collateral given | 12,047 | 18,760 |
Other loans | 1,414 | 1,611 |
Total loans | 34,203 | 39,775 |
Securities | ||
Financial institutions and corporate | 3,778 | 3,446 |
Total securities | 24,955 | 29,215 |
Total | 59,158 | 68,990 |
UK | Trading assets | ||
Securities | ||
Central and local government securities | 6,919 | 4,184 |
USA | Trading assets | ||
Securities | ||
Central and local government securities | 3,329 | 5,149 |
Other | Trading assets | ||
Securities | ||
Central and local government securities | £ 10,929 | £ 16,436 |
Derivatives - fair value of the
Derivatives - fair value of the hedging derivative (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value of the hedging derivative | |||
Derivative financial assets | £ 106,139 | £ 166,523 | |
Derivative financial liabilities | 100,835 | 160,705 | |
Derivatives held for hedging before IFRS netting | |||
Fair value of the hedging derivative | |||
Notional amount | 206,500 | 205,300 | |
Changes in fair value used for hedge ineffectiveness | (702) | ||
Derivatives [Member] | Derivatives held for hedging before IFRS netting | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 3,316 | 5,179 | |
Derivatives [Member] | IFRS netting/Clearing house settlements | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | (3,196) | (5,049) | |
Derivatives [Member] | Derivatives after IFRS netting | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 120 | 130 | |
Fair value hedging | |||
Fair value of the hedging derivative | |||
Changes in fair value used for hedge ineffectiveness | (846) | 877 | £ 610 |
Fair value hedging | Interest rate contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 65,600 | 65,500 | |
Changes in fair value used for hedge ineffectiveness | 897 | (875) | |
Fair value hedging | Derivatives [Member] | Interest rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 2,057 | 3,844 | |
Cash flow hedging | Interest rate contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 133,100 | 128,800 | |
Changes in fair value used for hedge ineffectiveness | (931) | 217 | |
Cash flow hedging | Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 7,300 | 10,800 | |
Changes in fair value used for hedge ineffectiveness | 27 | (55) | |
Cash flow hedging | Derivatives [Member] | Interest rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 1,149 | 1,210 | |
Cash flow hedging | Derivatives [Member] | Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 109 | 116 | |
Net investment hedging | Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 500 | 200 | |
Changes in fair value used for hedge ineffectiveness | 7 | 11 | |
Net investment hedging | Derivatives [Member] | Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 1 | 9 | |
Derivatives [Member] | Derivatives held for hedging before IFRS netting | |||
Fair value of the hedging derivative | |||
Derivative financial assets | 2,169 | 3,950 | |
Derivatives [Member] | IFRS netting/Clearing house settlements | |||
Fair value of the hedging derivative | |||
Derivative financial assets | (2,125) | (3,857) | |
Derivatives [Member] | Derivatives after IFRS netting | |||
Fair value of the hedging derivative | |||
Derivative financial assets | 44 | 93 | |
Derivatives [Member] | Fair value hedging | Interest rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial assets | 1,176 | 1,878 | |
Derivatives [Member] | Cash flow hedging | Interest rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial assets | 952 | 2,035 | |
Derivatives [Member] | Cash flow hedging | Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial assets | 30 | 37 | |
Derivatives [Member] | Net investment hedging | Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Derivative financial assets | 11 | ||
Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 3,167,000 | 3,328,000 | |
Derivative financial assets | 38,517 | 52,239 | |
Derivative financial liabilities | 39,286 | 55,107 | |
Interest rate risk | |||
Fair value of the hedging derivative | |||
Notional amount | 8,919,000 | 10,703,000 | |
Derivative financial assets | 67,458 | 114,115 | |
Derivative financial liabilities | 61,206 | 105,214 | |
Credit derivatives | |||
Fair value of the hedging derivative | |||
Notional amount | 14,000 | 15,000 | |
Derivative financial assets | 154 | 161 | |
Derivative financial liabilities | 343 | 376 | |
Equity and commodity contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 1,000 | ||
Derivative financial assets | £ 10 | 8 | |
Derivative financial liabilities | £ 8 |
Derivatives - Notional of hedgi
Derivatives - Notional of hedging instruments affected by interest rate benchmark reform (Details) - GBP (£) £ in Billions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair value hedging | EUR IBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | £ 13.6 | |
Fair value hedging | GBP LIBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 11.2 | |
Fair value hedging | USD IBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | £ 20.2 | 26.6 |
Fair value hedging | Other currency | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 1.1 | |
Cash flow hedging | EUR IBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 5.2 | |
Cash flow hedging | GBP LIBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 51.7 | |
Cash flow hedging | SOFR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 0.2 | |
Cash flow hedging | USD IBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 3.1 | £ 2.7 |
Cash flow hedging | Risk free rate | Cross Currency | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount, convertible to repricing | £ 1 |
Derivatives - Impact of the acc
Derivatives - Impact of the accumulated amount of fair hedge adjustments (Details) £ in Millions | 12 Months Ended | |||||||||||||||||
Dec. 31, 2021GBP (£) | Dec. 31, 2021GBP (£)₨ / £ | Dec. 31, 2021GBP (£)$ / £ | Dec. 31, 2021GBP (£)SFr / £ | Dec. 31, 2021GBP (£)¥ / £ | Dec. 31, 2021GBP (£)¥ / £ | Dec. 31, 2021GBP (£)kr / £ | Dec. 31, 2021GBP (£)kr / £ | Dec. 31, 2021GBP (£)kr / £ | Dec. 31, 2021GBP (£)د.إ / $ | Dec. 31, 2020GBP (£) | Dec. 31, 2020GBP (£)₨ / £ | Dec. 31, 2020GBP (£)$ / £ | Dec. 31, 2020GBP (£)¥ / £ | Dec. 31, 2020GBP (£)¥ / € | Dec. 31, 2020GBP (£)kr / £ | Dec. 31, 2020GBP (£)kr / £ | Dec. 31, 2020GBP (£)kr / £ | |
Interest rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 8,919,000 | £ 10,703,000 | £ 10,703,000 | £ 10,703,000 | £ 10,703,000 | £ 10,703,000 | £ 10,703,000 | £ 10,703,000 | £ 10,703,000 |
Fair value hedging | Interest rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 37,485 | 37,485 | 37,485 | 37,485 | 37,485 | 37,485 | 37,485 | 37,485 | 37,485 | 37,485 | 42,612 | 42,612 | 42,612 | 42,612 | 42,612 | 42,612 | 42,612 | 42,612 |
Carrying value of hedged liabilities | 40,606 | 40,606 | 40,606 | 40,606 | 40,606 | 40,606 | 40,606 | 40,606 | 40,606 | 40,606 | 35,758 | 35,758 | 35,758 | 35,758 | 35,758 | 35,758 | 35,758 | 35,758 |
Impact on hedged items included in carrying value, assets | 1,219 | 1,219 | 1,219 | 1,219 | 1,219 | 1,219 | 1,219 | 1,219 | 1,219 | 1,219 | 3,496 | 3,496 | 3,496 | 3,496 | 3,496 | 3,496 | 3,496 | 3,496 |
Impact on hedged items included in carrying value, liabilities | 1,629 | 1,629 | 1,629 | 1,629 | 1,629 | 1,629 | 1,629 | 1,629 | ||||||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, assets | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 77 | 77 | 77 | 77 | 77 | 77 | 77 | 77 |
Impact on hedged items ceased to be adjusted for hedging gains or losses, liabilities | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | ||||||||||
Fair value hedging | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 30,200 | 30,200 | 30,200 | 30,200 | 30,200 | 30,200 | 30,200 | 30,200 | 30,200 | 30,200 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 |
Changes in fair value used for hedge ineffectiveness | (2,054) | 1,891 | ||||||||||||||||
Fair value hedging | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | 35,400 | ||||||||
Impact on hedged items included in carrying value, liabilities | 445 | 445 | 445 | 445 | 445 | 445 | 445 | 445 | 445 | 445 | ||||||||
Changes in fair value used for hedge ineffectiveness | 1,208 | (1,014) | ||||||||||||||||
Fair value hedging | Interest rate risk | Financial liabilities (other) | Debt securities in issue | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged liabilities | 34,371 | 34,371 | 34,371 | 34,371 | 34,371 | 34,371 | 34,371 | 34,371 | 34,371 | 34,371 | 29,317 | 29,317 | 29,317 | 29,317 | 29,317 | 29,317 | 29,317 | 29,317 |
Impact on hedged items included in carrying value, liabilities | 454 | 454 | 454 | 454 | 454 | 454 | 454 | 454 | 454 | 454 | 1,336 | 1,336 | 1,336 | 1,336 | 1,336 | 1,336 | 1,336 | 1,336 |
Changes in fair value used for hedge ineffectiveness | 953 | (746) | ||||||||||||||||
Fair value hedging | Interest rate risk | Financial liabilities, subordinated | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged liabilities | 6,235 | 6,235 | 6,235 | 6,235 | 6,235 | 6,235 | 6,235 | 6,235 | 6,235 | 6,235 | 6,441 | 6,441 | 6,441 | 6,441 | 6,441 | 6,441 | 6,441 | 6,441 |
Impact on hedged items included in carrying value, liabilities | (9) | (9) | (9) | (9) | (9) | (9) | (9) | (9) | (9) | (9) | 293 | 293 | 293 | 293 | 293 | 293 | 293 | 293 |
Changes in fair value used for hedge ineffectiveness | 255 | (268) | ||||||||||||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, liabilities | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | ||||||||||
Fair value hedging | Interest rate risk | Loans to banks and customers | Amortised cost | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 6,603 | 6,603 | 6,603 | 6,603 | 6,603 | 6,603 | 6,603 | 6,603 | 6,603 | 6,603 | 6,858 | 6,858 | 6,858 | 6,858 | 6,858 | 6,858 | 6,858 | 6,858 |
Impact on hedged items included in carrying value, assets | 701 | 701 | 701 | 701 | 701 | 701 | 701 | 701 | 701 | 701 | 1,228 | 1,228 | 1,228 | 1,228 | 1,228 | 1,228 | 1,228 | 1,228 |
Changes in fair value used for hedge ineffectiveness | (478) | 323 | ||||||||||||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, assets | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 69 | 77 | 77 | 77 | 77 | 77 | 77 | 77 | 77 |
Fair value hedging | Interest rate risk | Other financial assets - Securities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 30,882 | 30,882 | 30,882 | 30,882 | 30,882 | 30,882 | 30,882 | 30,882 | 30,882 | 30,882 | 35,754 | 35,754 | 35,754 | 35,754 | 35,754 | 35,754 | 35,754 | 35,754 |
Impact on hedged items included in carrying value, assets | 518 | 518 | 518 | 518 | 518 | 518 | 518 | 518 | 518 | 518 | 2,268 | 2,268 | 2,268 | 2,268 | 2,268 | 2,268 | 2,268 | 2,268 |
Changes in fair value used for hedge ineffectiveness | (1,576) | 1,568 | ||||||||||||||||
Fair value hedging | Average fixed interest rate | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 30,100 | 30,100 | 30,100 | 30,100 | 30,100 | 30,100 | 30,100 | 30,100 | ||||||||||
Fair value hedging | 0-3 months | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 900 | 900 | 900 | 900 | 900 | 900 | 900 | 900 | 900 | 900 | 1,200 | 1,200 | 1,200 | 1,200 | 1,200 | 1,200 | 1,200 | 1,200 |
Fair value hedging | 0-3 months | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 1,100 | 1,100 | 1,100 | 1,100 | 1,100 | 1,100 | 1,100 | 1,100 | 1,100 | 1,100 | ||||||||
Fair value hedging | 3-12 months | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | 2,300 | 2,300 | 2,300 | 2,300 | 2,300 | 2,300 | 2,300 | 2,300 |
Fair value hedging | 3-12 months | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | ||||||||
Fair value hedging | 3-12 months | Average fixed interest rate | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 600 | 600 | 600 | 600 | 600 | 600 | 600 | 600 | ||||||||||
Fair value hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 |
Fair value hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 11,800 | 11,800 | 11,800 | 11,800 | 11,800 | 11,800 | 11,800 | 11,800 | 11,800 | 11,800 | ||||||||
Fair value hedging | More than 1 year but less than 3 years | Average fixed interest rate | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 10,100 | 10,100 | 10,100 | 10,100 | 10,100 | 10,100 | 10,100 | 10,100 | ||||||||||
Fair value hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 5,700 | 5,700 | 5,700 | 5,700 | 5,700 | 5,700 | 5,700 | 5,700 | 5,700 | 5,700 | 7,400 | 7,400 | 7,400 | 7,400 | 7,400 | 7,400 | 7,400 | 7,400 |
Fair value hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 9,300 | 9,300 | 9,300 | 9,300 | 9,300 | 9,300 | 9,300 | 9,300 | 9,300 | 9,300 | ||||||||
Fair value hedging | More than 3 years but less than 5 years | Average fixed interest rate | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 11,600 | 11,600 | 11,600 | 11,600 | 11,600 | 11,600 | 11,600 | 11,600 | ||||||||||
Fair value hedging | 5-10 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 6,200 | 8,900 | 8,900 | 8,900 | 8,900 | 8,900 | 8,900 | 8,900 | 8,900 |
Fair value hedging | 5-10 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | 8,400 | ||||||||
Fair value hedging | 5-10 years | Average fixed interest rate | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 7,100 | 7,100 | 7,100 | 7,100 | 7,100 | 7,100 | 7,100 | 7,100 | ||||||||||
Fair value hedging | 10-20 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 5,100 | 5,100 | 5,100 | 5,100 | 5,100 | 5,100 | 5,100 | 5,100 |
Fair value hedging | 10-20 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 600 | 600 | 600 | 600 | 600 | 600 | 600 | 600 | 600 | 600 | ||||||||
Fair value hedging | 10-20 years | Average fixed interest rate | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 500 | 500 | 500 | 500 | 500 | 500 | 500 | 500 | ||||||||||
Fair value hedging | 20+ years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 4,500 | 4,500 | 4,500 | 4,500 | 4,500 | 4,500 | 4,500 | 4,500 | 4,500 | 4,500 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 |
Fair value hedging | 20+ years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
Fair value hedging | 20+ years | Average fixed interest rate | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | ||||||||||
Cash flow hedging | Interest rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 63,739 | 63,739 | 63,739 | 63,739 | 63,739 | 63,739 | 63,739 | 63,739 | 63,739 | 63,739 | 54,885 | 54,885 | 54,885 | 54,885 | 54,885 | 54,885 | 54,885 | 54,885 |
Carrying value of hedged liabilities | 69,389 | 69,389 | 69,389 | 69,389 | 69,389 | 69,389 | 69,389 | 69,389 | 69,389 | 69,389 | 73,894 | 73,894 | 73,894 | 73,894 | 73,894 | 73,894 | 73,894 | 73,894 |
Cash flow hedging | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 63,700 | £ 63,700 | £ 63,700 | £ 63,700 | £ 63,700 | £ 63,700 | £ 63,700 | £ 63,700 | £ 63,700 | £ 63,700 | £ 55,000 | £ 55,000 | £ 55,000 | £ 55,000 | £ 55,000 | £ 55,000 | £ 55,000 | £ 55,000 |
Average fixed interest rate | 0.97% | 0.97% | 0.97% | 0.97% | 0.97% | 0.97% | 0.97% | 0.97% | 0.97% | 0.97% | 1.23% | 1.23% | 1.23% | 1.23% | 1.23% | 1.23% | 1.23% | 1.23% |
Changes in fair value used for hedge ineffectiveness | £ 2,010 | £ (617) | ||||||||||||||||
Cash flow hedging | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 69,400 | £ 69,400 | £ 69,400 | £ 69,400 | £ 69,400 | £ 69,400 | £ 69,400 | £ 69,400 | £ 69,400 | £ 69,400 | £ 73,800 | £ 73,800 | £ 73,800 | £ 73,800 | £ 73,800 | £ 73,800 | £ 73,800 | £ 73,800 |
Average fixed interest rate | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% |
Changes in fair value used for hedge ineffectiveness | £ (1,105) | £ 422 | ||||||||||||||||
Cash flow hedging | Interest rate risk | Bank and customer deposits | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged liabilities | 68,383 | £ 68,383 | £ 68,383 | £ 68,383 | £ 68,383 | £ 68,383 | £ 68,383 | £ 68,383 | £ 68,383 | £ 68,383 | 72,880 | £ 72,880 | £ 72,880 | £ 72,880 | £ 72,880 | £ 72,880 | £ 72,880 | £ 72,880 |
Changes in fair value used for hedge ineffectiveness | (1,084) | 409 | ||||||||||||||||
Cash flow hedging | Interest rate risk | Financial liabilities (other) | Debt securities in issue | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged liabilities | 1,006 | 1,006 | 1,006 | 1,006 | 1,006 | 1,006 | 1,006 | 1,006 | 1,006 | 1,006 | 1,014 | 1,014 | 1,014 | 1,014 | 1,014 | 1,014 | 1,014 | 1,014 |
Changes in fair value used for hedge ineffectiveness | (21) | 13 | ||||||||||||||||
Cash flow hedging | Interest rate risk | Loans to banks and customers | Amortised cost | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 63,025 | 63,025 | 63,025 | 63,025 | 63,025 | 63,025 | 63,025 | 63,025 | 63,025 | 63,025 | 53,335 | 53,335 | 53,335 | 53,335 | 53,335 | 53,335 | 53,335 | 53,335 |
Changes in fair value used for hedge ineffectiveness | 1,984 | (601) | ||||||||||||||||
Cash flow hedging | Interest rate risk | Other financial assets - Securities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 714 | £ 714 | £ 714 | £ 714 | £ 714 | £ 714 | 714 | 714 | 714 | 714 | 1,550 | £ 1,550 | £ 1,550 | £ 1,550 | £ 1,550 | 1,550 | 1,550 | 1,550 |
Changes in fair value used for hedge ineffectiveness | 26 | (16) | ||||||||||||||||
Cash flow hedging | Exchange rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Average foreign exchange rate | 106.58 | 1.38 | 1.25 | 132.93 | 8.74 | 95.29 | 1.36 | 132.93 | 120.21 | |||||||||
Carrying value of hedged assets | 23 | £ 23 | £ 23 | £ 23 | £ 23 | £ 23 | 23 | 23 | 23 | 23 | 142 | £ 142 | £ 142 | £ 142 | £ 142 | 142 | 142 | 142 |
Carrying value of hedged liabilities | 7,279 | 7,279 | 7,279 | 7,279 | 7,279 | 7,279 | 7,279 | 7,279 | 7,279 | 7,279 | 10,618 | 10,618 | 10,618 | 10,618 | 10,618 | 10,618 | 10,618 | 10,618 |
Cash flow hedging | Exchange rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | ||||||||||
Changes in fair value used for hedge ineffectiveness | 1 | |||||||||||||||||
Cash flow hedging | Exchange rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | 7,300 | 7,300 | 7,300 | 7,300 | 7,300 | 7,300 | 7,300 | 7,300 | 7,300 | 7,300 | 10,700 | 10,700 | 10,700 | 10,700 | 10,700 | 10,700 | 10,700 | 10,700 |
Changes in fair value used for hedge ineffectiveness | (27) | 54 | ||||||||||||||||
Cash flow hedging | Exchange rate risk | Financial liabilities (other) | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged liabilities | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 152 | 152 | 152 | 152 | 152 | 152 | 152 | 152 |
Changes in fair value used for hedge ineffectiveness | (10) | (2) | ||||||||||||||||
Cash flow hedging | Exchange rate risk | Financial liabilities (other) | Debt securities in issue | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged liabilities | 6,337 | 6,337 | 6,337 | 6,337 | 6,337 | 6,337 | 6,337 | 6,337 | 6,337 | 6,337 | 6,272 | 6,272 | 6,272 | 6,272 | 6,272 | 6,272 | 6,272 | 6,272 |
Changes in fair value used for hedge ineffectiveness | (5) | 20 | ||||||||||||||||
Cash flow hedging | Exchange rate risk | Financial liabilities, subordinated | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged liabilities | 742 | 742 | 742 | 742 | 742 | 742 | 742 | 742 | 742 | 742 | 4,194 | 4,194 | 4,194 | 4,194 | 4,194 | 4,194 | 4,194 | 4,194 |
Changes in fair value used for hedge ineffectiveness | (12) | 36 | ||||||||||||||||
Cash flow hedging | Exchange rate risk | Loans to banks and customers | Amortised cost | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 21 | 21 | 21 | 21 | 21 | 21 | 21 | 21 | 21 | 21 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 |
Changes in fair value used for hedge ineffectiveness | 1 | |||||||||||||||||
Cash flow hedging | Exchange rate risk | Other financial assets - Securities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Carrying value of hedged assets | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 |
Cash flow hedging | 0-3 months | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 5,400 | £ 5,400 | £ 5,400 | £ 5,400 | £ 5,400 | £ 5,400 | £ 5,400 | £ 5,400 | £ 5,400 | £ 5,400 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 |
Average fixed interest rate | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% | 1.28% | 1.28% | 1.28% | 1.28% | 1.28% | 1.28% | 1.28% | 1.28% |
Cash flow hedging | 0-3 months | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 8,800 | £ 8,800 | £ 8,800 | £ 8,800 | £ 8,800 | £ 8,800 | £ 8,800 | £ 8,800 | £ 8,800 | £ 8,800 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 | £ 1,600 |
Average fixed interest rate | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 1.14% | 1.14% | 1.14% | 1.14% | 1.14% | 1.14% | 1.14% | 1.14% |
Cash flow hedging | 0-3 months | Exchange rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | ||||||||
Cash flow hedging | 3-12 months | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 8,100 | £ 8,100 | £ 8,100 | £ 8,100 | £ 8,100 | £ 8,100 | £ 8,100 | £ 8,100 | £ 8,100 | £ 8,100 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 |
Average fixed interest rate | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.19% | 1.22% | 1.22% | 1.22% | 1.22% | 1.22% | 1.22% | 1.22% | 1.22% |
Cash flow hedging | 3-12 months | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 21,100 | £ 21,100 | £ 21,100 | £ 21,100 | £ 21,100 | £ 21,100 | £ 21,100 | £ 21,100 | £ 21,100 | £ 21,100 | £ 28,900 | £ 28,900 | £ 28,900 | £ 28,900 | £ 28,900 | £ 28,900 | £ 28,900 | £ 28,900 |
Average fixed interest rate | 0.24% | 0.24% | 0.24% | 0.24% | 0.24% | 0.24% | 0.24% | 0.24% | 0.24% | 0.24% | 0.78% | 0.78% | 0.78% | 0.78% | 0.78% | 0.78% | 0.78% | 0.78% |
Cash flow hedging | 3-12 months | Exchange rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 |
Cash flow hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 14,300 | £ 14,300 | £ 14,300 | £ 14,300 | £ 14,300 | £ 14,300 | £ 14,300 | £ 14,300 | £ 14,300 | £ 14,300 | £ 19,300 | £ 19,300 | £ 19,300 | £ 19,300 | £ 19,300 | £ 19,300 | £ 19,300 | £ 19,300 |
Average fixed interest rate | 1.35% | 1.35% | 1.35% | 1.35% | 1.35% | 1.35% | 1.35% | 1.35% | 1.35% | 1.35% | 1.51% | 1.51% | 1.51% | 1.51% | 1.51% | 1.51% | 1.51% | 1.51% |
Cash flow hedging | More than 1 year but less than 3 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 33,000 | £ 33,000 | £ 33,000 | £ 33,000 | £ 33,000 | £ 33,000 | £ 33,000 | £ 33,000 | £ 33,000 | £ 33,000 | £ 36,800 | £ 36,800 | £ 36,800 | £ 36,800 | £ 36,800 | £ 36,800 | £ 36,800 | £ 36,800 |
Average fixed interest rate | 0.41% | 0.41% | 0.41% | 0.41% | 0.41% | 0.41% | 0.41% | 0.41% | 0.41% | 0.41% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% |
Cash flow hedging | More than 1 year but less than 3 years | Exchange rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | ||||||||||
Cash flow hedging | More than 1 year but less than 3 years | Exchange rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 3,500 | £ 3,500 | £ 3,500 | £ 3,500 | £ 3,500 | £ 3,500 | £ 3,500 | £ 3,500 | £ 3,500 | £ 3,500 | 5,300 | 5,300 | 5,300 | 5,300 | 5,300 | 5,300 | 5,300 | 5,300 |
Cash flow hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 24,500 | £ 24,500 | £ 24,500 | £ 24,500 | £ 24,500 | £ 24,500 | £ 24,500 | £ 24,500 | £ 24,500 | £ 24,500 | £ 13,900 | £ 13,900 | £ 13,900 | £ 13,900 | £ 13,900 | £ 13,900 | £ 13,900 | £ 13,900 |
Average fixed interest rate | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 1.06% | 1.06% | 1.06% | 1.06% | 1.06% | 1.06% | 1.06% | 1.06% |
Cash flow hedging | More than 3 years but less than 5 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,300 | £ 3,400 | £ 3,400 | £ 3,400 | £ 3,400 | £ 3,400 | £ 3,400 | £ 3,400 | £ 3,400 |
Average fixed interest rate | 0.47% | 0.47% | 0.47% | 0.47% | 0.47% | 0.47% | 0.47% | 0.47% | 0.47% | 0.47% | 1.25% | 1.25% | 1.25% | 1.25% | 1.25% | 1.25% | 1.25% | 1.25% |
Cash flow hedging | More than 3 years but less than 5 years | Exchange rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,300 | £ 1,000 | £ 1,000 | £ 1,000 | £ 1,000 | £ 1,000 | £ 1,000 | £ 1,000 | £ 1,000 |
Cash flow hedging | 5-10 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 | £ 10,500 |
Average fixed interest rate | 0.82% | 0.82% | 0.82% | 0.82% | 0.82% | 0.82% | 0.82% | 0.82% | 0.82% | 0.82% | 0.92% | 0.92% | 0.92% | 0.92% | 0.92% | 0.92% | 0.92% | 0.92% |
Cash flow hedging | 5-10 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,500 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 | £ 2,400 |
Average fixed interest rate | 1.01% | 1.01% | 1.01% | 1.01% | 1.01% | 1.01% | 1.01% | 1.01% | 1.01% | 1.01% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% |
Cash flow hedging | 5-10 years | Exchange rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | £ 1,100 | ||||||||||
Cash flow hedging | 10-20 years | Interest rate risk | Hedging assets | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | ||||||||||
Average fixed interest rate | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | 3.12% | ||||||||||
Cash flow hedging | 10-20 years | Interest rate risk | Hedging liabilities | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 | £ 700 |
Average fixed interest rate | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% | 4.55% |
Foreign exchange | Exchange rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Average foreign exchange rate | 1.32 | 11.74 | 8.85 | 12.12 | 3.67 | 11.15 | 8.28 | 12.73 | ||||||||||
Net investment hedging | Exchange rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 |
Net investment hedging | 0-3 months | Exchange rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
Net investment hedging | 3-12 months | Exchange rate risk | ||||||||||||||||||
Derivatives | ||||||||||||||||||
Notional amount | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 | £ 100 |
Derivatives - Risk exposures th
Derivatives - Risk exposures that will be affected by interest rate benchmark reform (Details) - Interest rate risk - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair value hedging | EURIBOR | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | £ 15,100 | |
Hedged adjustment | 27 | |
Fair value hedging | GBP LIBOR | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 11,400 | |
Hedged adjustment | 1,178 | |
Fair value hedging | USD IBOR | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | £ 21,800 | 28,100 |
Hedged adjustment | 7 | (427) |
Fair value hedging | Other IBOR | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 1,100 | |
Hedged adjustment | 1 | |
Cash flow hedging | EURIBOR | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 4,100 | |
Hedged adjustment | (76) | |
Cash flow hedging | GBP LIBOR | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 10,500 | |
Hedged adjustment | (473) | |
Cash flow hedging | USD IBOR | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 3,300 | 2,700 |
Hedged adjustment | 21 | (61) |
Cash flow hedging | BOE Base rate | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 40,700 | |
Hedged adjustment | (156) | |
Cash flow hedging | ECB REFI rate | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 1,200 | |
Cash flow hedging | SONIA | ||
Disclosure of detailed information about hedged items [line items] | ||
Notional amount | 600 | |
Hedged adjustment | £ 4 | |
Notional amount, convertible to repricing | £ 6,500 |
Derivatives - Analysis of cash
Derivatives - Analysis of cash flow reserve and foreign exchange reserve (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about hedged items [line items] | ||
Continuing cash flow hedge reserve | £ (559) | £ 292 |
Continuing foreign exchange hedge reserve | (706) | (788) |
Cash flow hedge reserve, amount recognised in equity | (687) | 321 |
Foreign exchange hedge reserve, amount recognised in equity | 88 | (57) |
Amount transferred from equity to earnings, cash flow hedge reserve | (161) | (50) |
Amount transferred from equity to earnings, foreign exchange hedge reserve | 2 | |
Interest rate risk | ||
Disclosure of detailed information about hedged items [line items] | ||
Continuing cash flow hedge reserve | (295) | 695 |
De-designated cash flow hedge reserve | (297) | (424) |
Cash flow hedge reserve, amount recognised in equity | (700) | 318 |
Interest rate risk | Net interest income | ||
Disclosure of detailed information about hedged items [line items] | ||
Amount transferred from equity to earnings, cash flow hedge reserve | (181) | (19) |
Interest rate risk | Non interest income | ||
Disclosure of detailed information about hedged items [line items] | ||
Amount transferred from equity to earnings, cash flow hedge reserve | 20 | |
Exchange rate risk | ||
Disclosure of detailed information about hedged items [line items] | ||
Continuing cash flow hedge reserve | 23 | 22 |
Continuing foreign exchange hedge reserve | 53 | (13) |
De-designated cash flow hedge reserve | 10 | (1) |
De-designated foreign exchange hedge reserve | (759) | (775) |
Cash flow hedge reserve, amount recognised in equity | 13 | 3 |
Foreign exchange hedge reserve, amount recognised in equity | 88 | (57) |
Exchange rate risk | Net interest income | ||
Disclosure of detailed information about hedged items [line items] | ||
Amount transferred from equity to earnings, cash flow hedge reserve | (4) | (35) |
Amount transferred from equity to earnings, foreign exchange hedge reserve | 2 | |
Exchange rate risk | Non interest income | ||
Disclosure of detailed information about hedged items [line items] | ||
Amount transferred from equity to earnings, cash flow hedge reserve | 1 | |
Amount transferred from equity to earnings, foreign exchange hedge reserve | (2) | 2 |
Exchange rate risk | Operating expenses | ||
Disclosure of detailed information about hedged items [line items] | ||
Amount transferred from equity to earnings, cash flow hedge reserve | £ 3 | £ 4 |
Derivatives - Hedge ineffective
Derivatives - Hedge ineffectiveness recognised (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about hedged items | |||
Hedging ineffectiveness | £ 25 | £ 24 | £ 48 |
Fair value hedging | |||
Disclosure of detailed information about hedged items | |||
(Losses)/gains on hedged items attributable to the hedged risk | (846) | 877 | 610 |
Gains/(losses) on the hedging instruments | 897 | (875) | (585) |
Hedging ineffectiveness | 51 | 2 | 25 |
Cash flow hedging | |||
Disclosure of detailed information about hedged items | |||
Hedging ineffectiveness | (26) | 22 | 23 |
Cash flow hedging | Interest rate risk | |||
Disclosure of detailed information about hedged items | |||
Hedging ineffectiveness | £ (26) | £ 22 | £ 23 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) £ in Millions | 12 Months Ended | |||||||||||||||
Dec. 31, 2021GBP (£)₨ / £ | Dec. 31, 2021GBP (£)$ / £ | Dec. 31, 2021GBP (£)SFr / £ | Dec. 31, 2021GBP (£)¥ / £ | Dec. 31, 2021GBP (£)¥ / £ | Dec. 31, 2021GBP (£)kr / £ | Dec. 31, 2021GBP (£)kr / £ | Dec. 31, 2021GBP (£)kr / £ | Dec. 31, 2021GBP (£)د.إ / $ | Dec. 31, 2020GBP (£)₨ / £ | Dec. 31, 2020GBP (£)$ / £ | Dec. 31, 2020GBP (£)¥ / £ | Dec. 31, 2020GBP (£)¥ / € | Dec. 31, 2020GBP (£)kr / £ | Dec. 31, 2020GBP (£)kr / £ | Dec. 31, 2020GBP (£)kr / £ | |
Disclosure of detailed information about hedged items [line items] | ||||||||||||||||
Derivative financial assets | £ 106,139 | £ 106,139 | £ 106,139 | £ 106,139 | £ 106,139 | £ 106,139 | £ 106,139 | £ 106,139 | £ 106,139 | £ 166,523 | £ 166,523 | £ 166,523 | £ 166,523 | £ 166,523 | £ 166,523 | £ 166,523 |
Derivative financial liabilities | 100,835 | 100,835 | 100,835 | 100,835 | 100,835 | 100,835 | 100,835 | 100,835 | 100,835 | 160,705 | 160,705 | 160,705 | 160,705 | 160,705 | 160,705 | 160,705 |
Interest rate risk | ||||||||||||||||
Disclosure of detailed information about hedged items [line items] | ||||||||||||||||
Notional amount of financial assets | 8,919,000 | 8,919,000 | 8,919,000 | 8,919,000 | 8,919,000 | 8,919,000 | 8,919,000 | 8,919,000 | 8,919,000 | 10,703,000 | 10,703,000 | 10,703,000 | 10,703,000 | 10,703,000 | 10,703,000 | 10,703,000 |
Derivative financial assets | 67,458 | 67,458 | 67,458 | 67,458 | 67,458 | 67,458 | 67,458 | 67,458 | 67,458 | 114,115 | 114,115 | 114,115 | 114,115 | 114,115 | 114,115 | 114,115 |
Derivative financial liabilities | £ 61,206 | £ 61,206 | £ 61,206 | £ 61,206 | £ 61,206 | £ 61,206 | £ 61,206 | £ 61,206 | £ 61,206 | £ 105,214 | £ 105,214 | £ 105,214 | £ 105,214 | £ 105,214 | £ 105,214 | £ 105,214 |
Exchange rate risk | Cash flow hedging | ||||||||||||||||
Disclosure of detailed information about hedged items [line items] | ||||||||||||||||
Average foreign exchange rate | 106.58 | 1.38 | 1.25 | 132.93 | 8.74 | 95.29 | 1.36 | 132.93 | 120.21 | |||||||
Exchange rate risk | Foreign exchange | ||||||||||||||||
Disclosure of detailed information about hedged items [line items] | ||||||||||||||||
Average foreign exchange rate | 1.32 | 11.74 | 8.85 | 12.12 | 3.67 | 11.15 | 8.28 | 12.73 | ||||||||
Exchange rate risk | Net investment hedging | ||||||||||||||||
Disclosure of detailed information about hedged items [line items] | ||||||||||||||||
Notional amount of financial assets | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 500 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 | £ 200 |
Loan impairment provisions (Det
Loan impairment provisions (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loan impairment provisions | ||
Financial Assets | £ 781,992 | £ 799,491 |
ECL provisions | £ 3,806 | £ 6,186 |
Expected Credit Loss, Provision Coverage | 1.03% | 1.66% |
ECL (release)/charge | £ (1,278) | £ 3,131 |
Amounts written off | 876 | 937 |
Individual | ||
Loan impairment provisions | ||
Amounts written off | 455 | 191 |
Collective | ||
Loan impairment provisions | ||
Amounts written off | 421 | 746 |
Contingent liabilities [member] | ||
Loan impairment provisions | ||
ECL (release)/charge | 34,000 | 28,000 |
Financial assets (Other) | ||
Loan impairment provisions | ||
Financial Assets | 46,145 | 55,148 |
ECL (release)/charge | 3 | 12 |
FVOCI | ||
Loan impairment provisions | ||
Financial Assets | 37,266 | 44,902 |
ECL provisions | 5 | 6 |
FVOCI | Financial assets (Other) | ||
Loan impairment provisions | ||
Financial Assets | 37,266 | 44,902 |
ECL (release)/charge | 2 | 2 |
Amortised cost | ||
Loan impairment provisions | ||
Financial Assets | 555,132 | 504,091 |
Amortised cost | Financial assets (Other) | ||
Loan impairment provisions | ||
Financial Assets | 8,562 | 9,806 |
Loans and advances | ||
Loan impairment provisions | ||
Financial Assets | 369,827 | 372,399 |
Cash at central banks | Financial assets (Other) | ||
Loan impairment provisions | ||
Financial Assets | 176,300 | 122,800 |
Debt securities | Financial assets (Other) | ||
Loan impairment provisions | ||
Financial Assets | 44,900 | 53,800 |
Business loans | ||
Loan impairment provisions | ||
ECL provisions | 3,806 | 6,186 |
Stage 1 | ||
Loan impairment provisions | ||
ECL provisions | £ 302 | £ 519 |
Expected Credit Loss, Provision Coverage | 0.09% | 0.18% |
ECL (release)/charge | £ (1,377) | £ (89) |
Stage 1 | Loans and advances | Amortised cost | ||
Loan impairment provisions | ||
Financial Assets | 330,824 | 287,124 |
Stage 2 | ||
Loan impairment provisions | ||
ECL provisions | £ 1,478 | £ 3,081 |
Expected Credit Loss, Provision Coverage | 4.35% | 3.90% |
ECL (release)/charge | £ (187) | £ 2,601 |
Stage 2 | Loans and advances | Amortised cost | ||
Loan impairment provisions | ||
Financial Assets | 33,981 | 78,917 |
Stage 3 | ||
Loan impairment provisions | ||
ECL provisions | £ 2,026 | £ 2,586 |
Expected Credit Loss, Provision Coverage | 40.34% | 40.67% |
ECL (release)/charge | £ 286 | £ 619 |
Stage 3 | Individual | ||
Loan impairment provisions | ||
ECL provisions | 363 | 831 |
ECL (release)/charge | 20 | 194 |
Stage 3 | Collective | ||
Loan impairment provisions | ||
ECL provisions | 1,663 | 1,755 |
ECL (release)/charge | 266 | 425 |
Stage 3 | Loans and advances | Amortised cost | ||
Loan impairment provisions | ||
Financial Assets | 5,022 | 6,358 |
Stage 3 | Loans and advances | Amortised cost | Individual | ||
Loan impairment provisions | ||
Financial Assets | 1,215 | 2,292 |
Stage 3 | Loans and advances | Amortised cost | Collective | ||
Loan impairment provisions | ||
Financial Assets | £ 3,807 | £ 4,066 |
Other financial assets (Details
Other financial assets (Details) € in Millions, £ in Millions | 12 Months Ended | |||
Dec. 31, 2021EUR (€) | Dec. 31, 2020GBP (£) | Dec. 31, 2020EUR (€) | Dec. 31, 2021GBP (£) | |
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets. | £ 55,148 | £ 46,145 | ||
VISA | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets disposed off | 186 | |||
SABB | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets disposed off | 383 | |||
Vocalink | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets disposed off | 16 | |||
Equity shares | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets. | 308 | 325 | ||
Other loans | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets. | 353 | 566 | ||
Designated as at fair value through profit or loss [Member] | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 88 | 6 | ||
Other financial assets. | 440 | 317 | ||
Designated as at fair value through profit or loss [Member] | Other financial institutions | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 88 | 6 | ||
Designated as at fair value through profit or loss [Member] | Equity shares | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets. | 14 | 13 | ||
Designated as at fair value through profit or loss [Member] | Other loans | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets. | 338 | 298 | ||
FVOCI | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 44,593 | 36,686 | ||
Other financial assets. | 44,902 | 37,266 | ||
FVOCI | Central and local government | UK | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 17,458 | 11,938 | ||
FVOCI | Central and local government | USA | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 11,742 | 10,086 | ||
FVOCI | Central and local government | Countries other than the US and the UK | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 6,802 | 5,604 | ||
FVOCI | Other financial institutions | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 8,591 | 9,058 | ||
FVOCI | Equity shares | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets. | 294 | 312 | ||
FVOCI | Equity shares | VISA | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Dividend income | € | € 1 | € 2 | ||
FVOCI | Equity shares | OTC Derivative Ltd | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Dividend income | € | 4 | 5 | ||
FVOCI | Equity shares | SABB | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Dividend income | € | € 0 | € 15 | ||
FVOCI | Other loans | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Other financial assets. | 15 | 268 | ||
Amortised cost | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 9,806 | 8,562 | ||
Other financial assets. | 9,806 | 8,562 | ||
Amortised cost | Central and local government | UK | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 4,997 | 3,821 | ||
Amortised cost | Central and local government | USA | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 235 | 156 | ||
Amortised cost | Central and local government | Countries other than the US and the UK | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 116 | 81 | ||
Amortised cost | Other financial institutions | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 4,458 | 4,504 | ||
Debt securities | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 54,487 | 45,254 | ||
Debt securities | Central and local government | UK | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 22,455 | 15,759 | ||
Debt securities | Central and local government | USA | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 11,977 | 10,242 | ||
Debt securities | Central and local government | Countries other than the US and the UK | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | 6,918 | 5,685 | ||
Debt securities | Other financial institutions | ||||
Disclosure Of Detailed Information About Hedging Instruments LineItems | ||||
Debt instruments held | £ 13,137 | £ 13,568 |
Intangible assets (Details)
Intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible assets | ||
At beginning of period | £ 6,655 | |
At end of period | 6,723 | £ 6,655 |
Impairment loss of goodwill | 85 | |
Retail Banking | ||
Intangible assets | ||
Impairment loss of goodwill | 85 | |
NatWest group excluding RBS Plc and retail banking | ||
Intangible assets | ||
Impairment loss of goodwill | 0 | 0 |
Cost | ||
Intangible assets | ||
At beginning of period | 12,531 | 12,273 |
Currency translation and other adjustments | 29 | (1) |
Additions | 479 | 348 |
Disposals and write-off of fully amortised assets | (50) | (89) |
At end of period | 12,989 | 12,531 |
Accumulated impairment, depreciation and amortisation | ||
Intangible assets | ||
At beginning of period | (5,876) | (5,651) |
Currency translation and other adjustments | (31) | (1) |
Disposals and write-off of fully amortised assets | 28 | 67 |
Impairment of intangible assets | (87) | (9) |
Amortisation charge for the year | 300 | 282 |
At end of period | (6,266) | (5,876) |
Goodwill | ||
Intangible assets | ||
At beginning of period | 5,607 | |
At end of period | 5,522 | 5,607 |
Goodwill | Cost | ||
Intangible assets | ||
At beginning of period | 9,939 | 9,980 |
Disposals and write-off of fully amortised assets | (41) | |
At end of period | 9,939 | 9,939 |
Goodwill | Accumulated impairment, depreciation and amortisation | ||
Intangible assets | ||
At beginning of period | (4,332) | (4,373) |
Disposals and write-off of fully amortised assets | 41 | |
Impairment of intangible assets | (85) | |
At end of period | (4,417) | (4,332) |
Intangible assets other than goodwill | Internally generated software | ||
Intangible assets | ||
At beginning of period | 1,048 | |
At end of period | 1,201 | 1,048 |
Intangible assets other than goodwill | Internally generated software | Cost | ||
Intangible assets | ||
At beginning of period | 2,592 | 2,293 |
Currency translation and other adjustments | 29 | (1) |
Additions | 479 | 348 |
Disposals and write-off of fully amortised assets | (50) | (48) |
At end of period | 3,050 | 2,592 |
Intangible assets other than goodwill | Internally generated software | Accumulated impairment, depreciation and amortisation | ||
Intangible assets | ||
At beginning of period | (1,544) | (1,278) |
Currency translation and other adjustments | (31) | (1) |
Disposals and write-off of fully amortised assets | 28 | 26 |
Impairment of intangible assets | (2) | (9) |
Amortisation charge for the year | 300 | 282 |
At end of period | (1,849) | £ (1,544) |
Computer software | RBS plc | ||
Intangible assets | ||
Impairment loss of goodwill | £ 85 |
Intangible assets - Assumptions
Intangible assets - Assumptions (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of information for cash-generating units | ||
Goodwill | £ 5,522 | £ 5,607 |
Forecast period for average cost:income ratio | 5 years | |
Commercial Banking | ||
Disclosure of information for cash-generating units | ||
Goodwill | £ 2,606 | £ 2,606 |
Terminal growth rate | 1.60% | 1.60% |
Pre-tax discount rate | 13.90% | 13.70% |
Cost Income Ratio | 52.30% | 53.70% |
Recoverable amount exceeded carrying value | £ 6,300 | £ 1,500 |
Commercial Banking | 1% adverse movement in discount rate | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (1,900) | (1,500) |
Commercial Banking | 1% adverse movement in terminal growth rate | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (800) | (500) |
Commercial Banking | 5% adverse movement in forecast income | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (2,000) | (1,800) |
Commercial Banking | 5% adverse movement in forecast cost | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (1,000) | (900) |
Retail Banking | ||
Disclosure of information for cash-generating units | ||
Goodwill | £ 2,607 | £ 2,692 |
Terminal growth rate | 1.60% | 1.60% |
Pre-tax discount rate | 13.90% | 13.70% |
Cost Income Ratio | 51.60% | 48.30% |
Recoverable amount exceeded carrying value | £ 6,800 | £ 5,900 |
Retail Banking | 1% adverse movement in discount rate | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (1,800) | (1,800) |
Retail Banking | 1% adverse movement in terminal growth rate | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (800) | (800) |
Retail Banking | 5% adverse movement in forecast income | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (2,100) | (2,000) |
Retail Banking | 5% adverse movement in forecast cost | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (1,000) | (900) |
RBS International | ||
Disclosure of information for cash-generating units | ||
Goodwill | £ 300 | £ 300 |
Terminal growth rate | 1.60% | 1.60% |
Pre-tax discount rate | 12.10% | 12.10% |
Cost Income Ratio | 37.00% | 42.70% |
Recoverable amount exceeded carrying value | £ 2,600 | £ 1,100 |
RBS International | 1% adverse movement in discount rate | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (600) | (400) |
RBS International | 1% adverse movement in terminal growth rate | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (300) | (200) |
RBS International | 5% adverse movement in forecast income | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | (400) | (300) |
RBS International | 5% adverse movement in forecast cost | ||
Disclosure of information for cash-generating units | ||
Decrease in recoverable amount of goodwill as a consequence of adverse movement | £ (100) | £ (100) |
Intangible assets - Changes to
Intangible assets - Changes to key assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Commercial Banking | ||
Disclosure of information for cash-generating units | ||
Terminal growth rate | 1.60% | 1.60% |
Pre-tax discount rate | 13.90% | 13.70% |
Retail Banking | ||
Disclosure of information for cash-generating units | ||
Terminal growth rate | 1.60% | 1.60% |
Pre-tax discount rate | 13.90% | 13.70% |
RBS International | ||
Disclosure of information for cash-generating units | ||
Terminal growth rate | 1.60% | 1.60% |
Pre-tax discount rate | 12.10% | 12.10% |
change to reduce headroom CGUs to nil | Commercial Banking | ||
Disclosure of information for cash-generating units | ||
Terminal growth rate | (47.00%) | (4.00%) |
Pre-tax discount rate | 6.60% | 1.30% |
Forecast income | (15.70%) | (4.10%) |
Forecast cost | 32.8 | 8.2 |
change to reduce headroom CGUs to nil | Retail Banking | ||
Disclosure of information for cash-generating units | ||
Terminal growth rate | (139.20%) | (25.40%) |
Pre-tax discount rate | 8.10% | 6.20% |
Forecast income | (16.10%) | (14.60%) |
Forecast cost | 32.7 | 33.9 |
change to reduce headroom CGUs to nil | RBS International | ||
Disclosure of information for cash-generating units | ||
Terminal growth rate | (85.20%) | (10.80%) |
Pre-tax discount rate | 10.30% | 4.40% |
Forecast income | (30.30%) | (18.60%) |
Forecast cost | 87.2 | 52.8 |
Other assets (Details)
Other assets (Details) € in Millions, £ in Millions | 12 Months Ended | ||
Dec. 31, 2021GBP (£) | Dec. 31, 2021EUR (€) | Dec. 31, 2020GBP (£) | |
Other assets | |||
Interests in associates (1) | £ 716 | £ 449 | |
Property, plant and equipment | 4,230 | 4,418 | |
Pension schemes in net surplus (Note 5) | 602 | 723 | |
Prepayments | 360 | 328 | |
Accrued income | 248 | 216 | |
Tax recoverable | 190 | 192 | |
Deferred tax (Note 7) | 1,195 | 901 | |
Acceptances | 225 | 272 | |
Other | 476 | 391 | |
Other assets | £ 8,242 | 7,890 | |
Long leasehold property | |||
Other assets | |||
Estimated useful lives | 50 years | ||
Long leasehold property | Maximum | |||
Other assets | |||
Estimated useful lives | 15 years | ||
Long leasehold property | Minimum | |||
Other assets | |||
Estimated useful lives | 10 years | ||
Other equipment | Maximum | |||
Other assets | |||
Estimated useful lives | 15 years | ||
Other equipment | Minimum | |||
Other assets | |||
Estimated useful lives | 4 years | ||
Computers equipment | |||
Other assets | |||
Estimated useful lives | 5 years | ||
Business Growth Fund | |||
Other assets | |||
Interests in associates (1) | € 700 | £ 442 |
Other financial liabilities (De
Other financial liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of financial liabilities | ||
Total | £ 49,326 | £ 45,811 |
Financial liabilities at fair value through profit or loss | Customer accounts | ||
Disclosure of financial liabilities | ||
Total | 568 | 796 |
Financial liabilities at fair value through profit or loss | Debt securities in issue | ||
Disclosure of financial liabilities | ||
Total | 1,103 | 1,607 |
Financial liabilities at amortised cost | Debt securities in issue | ||
Disclosure of financial liabilities | ||
Total | £ 47,655 | £ 43,408 |
Subordinated liabilities (Detai
Subordinated liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Subordinated liabilities | ||
Dated loan capital | £ 8,051 | £ 8,530 |
Undated loan capital | 259 | 1,287 |
Preference shares | 119 | 145 |
Total subordinated liabilities | £ 8,429 | £ 9,962 |
Subordinated liabilities - Rede
Subordinated liabilities - Redemption (Details) € in Millions, £ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2021USD ($) | Dec. 31, 2021GBP (£) | Dec. 31, 2020GBP (£) | Dec. 31, 2021USD ($) | Dec. 31, 2021EUR (€) | |
NatWest Group plc, 1,000 million 3.622% dated notes 2030 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | £ 1,000 | ||||
Interest rate | 3.622% | 3.622% | 3.622% | ||
Issue of subordinated liabilities | £ 996 | ||||
NatWest Group plc, US$850 million 3.032% dated notes 2035 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 850 | ||||
Interest rate | 3.032% | 3.032% | 3.032% | ||
Issue of subordinated liabilities | 634 | ||||
NatWest Group plc, 1000 million 2.105% dated notes 2031 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | € | € 1,000 | ||||
Interest rate | 2.105% | 2.105% | 2.105% | ||
Issue of subordinated liabilities | £ 996 | ||||
NatWest Group plc, 750 million 1.043% dated notes 2032 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | € | € 750 | ||||
Interest rate | 1.043% | 1.043% | 1.043% | ||
Issue of subordinated liabilities | £ 638 | ||||
NatWest Group plc | |||||
Subordinated liabilities | |||||
Redemption of subordinated liabilities | 3,484 | 2,882 | |||
Issue of subordinated liabilities | $ 2,650 | £ 1,634 | 1,630 | ||
NatWest Group plc, US$2,250 million 6.13% dated notes 2022 (partial redemption) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 2,250 | ||||
Interest rate | 6.13% | 6.13% | 6.13% | ||
Redemption of subordinated liabilities | £ 226 | 499 | |||
NatWest Group plc, US$1,000 million 6.10% dated notes 2023 (partial redemption) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 1,000 | ||||
Interest rate | 6.10% | 6.10% | 6.10% | ||
Redemption of subordinated liabilities | £ 57 | 358 | |||
NatWest Group plc, US$2,000 million 7.5% dated notes 2020 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 2,000 | ||||
Interest rate | 7.50% | 7.50% | 7.50% | ||
Redemption of subordinated liabilities | 1,528 | ||||
NatWest Group plc, US$762 million 7.648% undated notes (partial redemption) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 762 | ||||
Interest rate | 7.648% | 7.648% | 7.648% | ||
Redemption of subordinated liabilities | £ 45 | 497 | |||
NatWest Group Plc, US$106 million floating rate undated notes (callable on any interest payment date) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 106 | ||||
Redemption of subordinated liabilities | £ 77 | ||||
NatWest Group plc, US$2,650 million 8.625% dated notes 2021 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 2,650 | ||||
Interest rate | 8.625% | 8.625% | 8.625% | ||
Redemption of subordinated liabilities | £ 1,914 | ||||
NatWest Group plc, US$2,250 million 5.125% dated notes 2024 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 2,250 | ||||
Interest rate | 5.125% | 5.125% | 5.125% | ||
Redemption of subordinated liabilities | £ 729 | ||||
NatWest Group plc, US$2,000 million 6% dated notes 2023 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 2,000 | ||||
Interest rate | 6.00% | 6.00% | 6.00% | ||
Redemption of subordinated liabilities | £ 436 | ||||
NatWest Markets Plc US$125.6 million floating rate notes 2020 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 125.6 | ||||
Redemption of subordinated liabilities | 97 | ||||
NatWest Markets Plc, 144.4 million floating rate dated notes 2023 | |||||
Subordinated liabilities | |||||
Redemption of subordinated liabilities | 20 | ||||
145.6 million floating rate dated notes 2023 (partial redemption) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | € | € 145.6 | ||||
NatWest Markets Plc, 31 million 3.0883% notes (partial redemption) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | £ 31 | ||||
Interest rate | 7.38% | 7.38% | 7.38% | ||
Redemption of subordinated liabilities | £ 29 | ||||
NatWest Markets Plc, 19 million 5.63% notes (partial redemption) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | £ 19 | ||||
Interest rate | 5.63% | 5.63% | 5.63% | ||
Redemption of subordinated liabilities | £ 20 | ||||
NatWest Markets Plc | |||||
Subordinated liabilities | |||||
Redemption of subordinated liabilities | 69 | 97 | |||
National Westminister Bank Plc, US$285 million floating rate notes (callable semi-annually). | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 285 | ||||
Redemption of subordinated liabilities | 300 | ||||
National Westminister Bank Plc, 10 million floating rate notes (callable quarterly). | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | € | € 10 | ||||
Redemption of subordinated liabilities | 9 | ||||
National Westminister Bank Plc, 178 million floating rate notes (callable quarterly). | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | € | € 178 | ||||
Redemption of subordinated liabilities | 152 | ||||
National Westminister Bank Plc, US$193 million floating rate notes (callable semi-annually). | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | 193 | ||||
Redemption of subordinated liabilities | 138 | ||||
National Westminister Bank Plc, US$229 million floating rate notes (callable semi-annually). | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 229 | ||||
Redemption of subordinated liabilities | 167 | ||||
National Westminister Bank Plc, 300 million 6.5% subordinated notes 2021 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | £ 300 | ||||
Interest rate | 6.50% | 6.50% | 6.50% | ||
Redemption of subordinated liabilities | £ 201 | ||||
National Westminister Bank Plc, 35 million 11.5% notes | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | £ 35 | ||||
Interest rate | 11.50% | 11.50% | 11.50% | ||
Redemption of subordinated liabilities | £ 3 | ||||
National Westminister Bank Plc, 140 million 9% cumulative preference shares of 1 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | £ 140 | ||||
Interest rate | 9.00% | 9.00% | 9.00% | ||
Redemption of subordinated liabilities | £ 24 | ||||
National Westminister Bank Plc | |||||
Subordinated liabilities | |||||
Redemption of subordinated liabilities | £ 994 | ||||
NWM N.V. and subsidiaries, US$650 million 6.425% Undated notes 2043 (partial redemption) | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | $ | $ 650 | ||||
Interest rate | 6.425% | 6.425% | 6.425% | ||
Redemption of subordinated liabilities | £ 73 | 187 | |||
NWM N.V. and subsidiaries, 15 million 6.00% notes 2020 | |||||
Subordinated liabilities | |||||
Notional amount of financial assets | € | € 15 | ||||
Interest rate | 6.00% | 6.00% | 6.00% | ||
Redemption of subordinated liabilities | 11 | ||||
NWM S NV and subsidiaries | |||||
Subordinated liabilities | |||||
Redemption of subordinated liabilities | £ 73 | £ 198 |
Other liabilities (Details)
Other liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Other liabilities. | ||
Lease liabilities (Note 23) | £ 1,263 | £ 1,698 |
Provisions for liabilities and charges | 1,268 | 1,852 |
Retirement benefit liabilities (Note 5) | 114 | 121 |
Accruals | 1,508 | 990 |
Deferred income | 319 | 361 |
Current tax | 12 | 63 |
Deferred tax (Note 7) | 359 | 291 |
Acceptances | 225 | 272 |
Other liabilities | 729 | 740 |
Total other liabilities | 5,797 | 6,388 |
Liabilities of disposal groups | £ 5 | £ 0 |
Other liabilities - Provision f
Other liabilities - Provision for liabilities and charges (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2021GBP (£) | |
Provisions for liabilities and charges | |
Balance at beginning of the period | £ 1,852 |
Expected credit losses impairment release | (83) |
Currency translation and other movements | (12) |
Charge to income statement | 789 |
Release to income statement | (311) |
Provisions utilised | (967) |
Balance at end of the period | 1,268 |
Customer redress | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 749 |
Currency translation and other movements | (5) |
Charge to income statement | 173 |
Release to income statement | (25) |
Provisions utilised | (418) |
Balance at end of the period | 474 |
Legal proceedings provision [Member] | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 365 |
Currency translation and other movements | 0 |
Charge to income statement | 307 |
Release to income statement | (86) |
Provisions utilised | (309) |
Balance at end of the period | 277 |
Property | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 271 |
Currency translation and other movements | 2 |
Charge to income statement | 113 |
Release to income statement | (118) |
Provisions utilised | (37) |
Balance at end of the period | 231 |
Financial commitments and guarantees | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 178 |
Expected credit losses impairment release | (83) |
Currency translation and other movements | (2) |
Balance at end of the period | 93 |
Property and other | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 289 |
Currency translation and other movements | (7) |
Charge to income statement | 196 |
Release to income statement | (82) |
Provisions utilised | (203) |
Balance at end of the period | £ 193 |
Share capital and other equit_2
Share capital and other equity (Details) £ / shares in Units, shares in Thousands, £ in Millions | 12 Months Ended | |||
Dec. 31, 2021GBP (£)£ / sharesshares | Dec. 31, 2020GBP (£)shares | Dec. 31, 2021$ / shares | Dec. 31, 2019GBP (£) | |
Share capital | ||||
Value of shares | £ | £ 41,803 | £ 43,824 | £ 43,556 | |
Ordinary shares | ||||
Share capital | ||||
Value of shares | £ | £ 11,468 | £ 12,129 | £ 12,094 | |
Number of shares | 11,467,982 | 12,129,165 | ||
Par value per share | £ / shares | £ 1 | |||
Non-cumulative preference shares of US$0.01 | ||||
Share capital | ||||
Shares redeemed | 0 | 0 | ||
Non-cumulative preference shares of 0.01 | ||||
Share capital | ||||
Number of shares | 10 | 10 | ||
Par value per share | $ / shares | $ 0.01 | |||
Cumulative preference shares of 1 | ||||
Share capital | ||||
Value of shares | £ | £ 1 | £ 1 | ||
Number of shares | 483 | 900 | ||
Par value per share | £ / shares | £ 1 |
Share capital and other equit_3
Share capital and other equity - Movement in shares (Details) - GBP (£) shares in Thousands, £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Value of shares | ||
Balance | £ 43,824 | £ 43,556 |
Balance | 41,803 | 43,824 |
Ordinary shares | ||
Value of shares | ||
Balance | 12,129 | 12,094 |
Ordinary shares issued | 38 | 35 |
Shares redeemed | (699) | |
Balance | £ 11,468 | £ 12,129 |
Number of shares | ||
At 1 January | 12,129,165 | 12,093,909 |
Shares issued | (37,584) | 35,256 |
Shares redeemed | (698,767) | |
At 31 December | 11,467,982 | 12,129,165 |
Share capital and other equit_4
Share capital and other equity - Ordinary shares (Details) - GBP (£) | Mar. 31, 2021 | Mar. 19, 2021 | Jan. 18, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Jul. 30, 2021 | Apr. 30, 2021 | |
Own shares held | ||||||||||||
Share capital | ||||||||||||
Own shares acquired | [1] | £ 383,000,000 | £ 77,000,000 | £ 60,000,000 | ||||||||
Own shares held | Share awards and options | ||||||||||||
Share capital | ||||||||||||
Shares held in treasury | 15,000,000 | 15,000,000 | 15,000,000 | 16,000,000 | 15,000,000 | |||||||
Delivery of own shares held | 1,000,000 | |||||||||||
Par value | £ 1 | £ 1 | £ 1 | £ 1 | ||||||||
Ordinary shares | ||||||||||||
Share capital | ||||||||||||
Authorized share capital | £ 0 | £ 0 | £ 0 | £ 0 | ||||||||
Authorized share capital granted | 608,328,288 | 608,328,288 | 608,328,288 | 608,328,288 | ||||||||
Authorized share capital amount granted after the buyback effect | £ 578,791,771 | £ 578,791,771 | 578,791,771 | £ 578,791,771 | ||||||||
Number of own shares purchased | 590,730,325 | 310,802,416 | ||||||||||
Nominal value of own shares purchased | £ 590,730,325 | £ 310,802,416 | ||||||||||
Consideration paid for repurchase of own shares | £ 1,125,341,269 | £ 676,242,656 | ||||||||||
Purchase price per share | £ 1.9050 | £ 2.175796 | ||||||||||
Own shares acquired | £ 0 | |||||||||||
Percentage of issued shares repurchased | 4.86% | |||||||||||
Number of own shares cancelled | 390,730,325 | |||||||||||
Treasury Shares, Re-Issued For Options Exercise | 19,062,290 | |||||||||||
Shares held in treasury | 200,000,000 | |||||||||||
Delivery of own shares held | 200,000,000 | |||||||||||
Maximum amount for share buy back programme | £ 750,000,000 | |||||||||||
Maximum number of ordinary shares purchased under Programme | 1,157,583,542 | 1,216,656,575 | ||||||||||
Number of shares issued in connection to employee share plans | 38,000,000 | |||||||||||
Par value | £ 1 | £ 1 | £ 1 | £ 1 | ||||||||
Interim dividend paid | £ 347,000,000 | 0 | ||||||||||
Interim dividend per share | £ 0.030 | |||||||||||
Final dividend recommended | £ 844,300,000 | £ 844,300,000 | £ 844,300,000 | £ 364,000,000 | £ 844,300,000 | |||||||
Final dividend recommended, per share | £ 0.075 | £ 0.075 | £ 0.075 | £ 0.03 | £ 0.075 | |||||||
Ordinary shares | Ordinary share buyback program | ||||||||||||
Share capital | ||||||||||||
Number of own shares purchased | 29,735,044 | |||||||||||
Nominal value of own shares purchased | £ 29,735,044 | |||||||||||
Consideration paid for repurchase of own shares | £ 73,007,375 | |||||||||||
Purchase price per share | £ 2.455264 | |||||||||||
Percentage of issued shares repurchased | 2.93% | |||||||||||
Ordinary shares | Own shares held | ||||||||||||
Share capital | ||||||||||||
Shares held in treasury | 180,937,710 | 180,937,710 | 180,937,710 | 180,937,710 | ||||||||
Delivery of own shares held | 19,062,290 | |||||||||||
[1] | In March 2021, there was an agreement with HM Treasury to buy 591 million ordinary shares in the Company from UK Government Investments Ltd (UKGI), at 190.5 p per share for the total consideration of £ 1.13 billion. NatWest Group cancelled 391 million of the purchased ordinary shares, amounting to £ 744 million excluding fees, and held the remaining 200 million in own shares held, amounting to £ 381 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve. |
Share capital and other equit_5
Share capital and other equity - Non-cumulative preference shares (Details) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Series U, Non-cumulative preference shares of US$0.01 | ||
Share capital | ||
Par value | $ 0.01 | |
Number of shares | 10,130 | |
Redemption price per share | $ 100,000 | |
Non-cumulative preference shares of 0.01 | ||
Share capital | ||
Par value | $ 0.01 | |
Number of shares | 10,000 | 10,000 |
Share capital and other equit_6
Share capital and other equity - Paid-in equity (Details) £ / shares in Units, $ / shares in Units, £ in Millions, $ in Millions | Dec. 31, 2021GBP (£)£ / shares | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020GBP (£) | Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£) |
Borrowings | |||||
Equity | £ 41,803 | £ 43,824 | £ 43,556 | ||
Maximum | Instruments are converted to into ordinary shares at fixed price | |||||
Borrowings | |||||
CET1 ratio (as a percent) | 7.00% | 7.00% | |||
Paid-in equity | |||||
Borrowings | |||||
Equity | £ 3,890 | £ 4,999 | 4,058 | £ 4,058 | |
Paid-in equity | Additional tier 1 note callable August, 2020, USD | |||||
Borrowings | |||||
Equity | £ 1,277 | ||||
Notional amount of financial assets | $ | $ 2,000 | ||||
Interest rate | 7.50% | 7.50% | 7.50% | 7.50% | |
Conversion rate | $ / shares | $ 3.606 | ||||
Par value | £ / shares | £ 1 | ||||
Paid-in equity | Additional tier 1 note callable August, 2025, USD | |||||
Borrowings | |||||
Equity | £ 735 | £ 735 | £ 735 | ||
Notional amount of financial assets | $ | $ 1,150 | ||||
Interest rate | 8.00% | 8.00% | 8.00% | 8.00% | |
Paid-in equity | Additional tier 1 note callable August, 2021, USD | |||||
Borrowings | |||||
Equity | £ 2,046 | £ 2,046 | |||
Notional amount of financial assets | $ | $ 2,650 | ||||
Interest rate | 8.625% | 8.625% | 8.625% | 8.625% | |
Conversion rate | $ / shares | $ 2.284 | ||||
Par value | £ / shares | £ 1 | ||||
Paid-in equity | Additional tier 1 note callable December 2025 - June, 2026, USD | |||||
Borrowings | |||||
Equity | £ 1,220 | £ 1,220 | |||
Notional amount of financial assets | $ | $ 1,500 | ||||
Interest rate | 6.00% | 6.00% | 6.00% | 6.00% | |
Conversion rate | £ / shares | £ 1.754 | ||||
Par value | £ / shares | £ 1 | ||||
Paid-in equity | Additional tier1 note callable May - November 2027, GBP | |||||
Borrowings | |||||
Equity | £ 998 | £ 998 | |||
Notional amount of financial assets | £ 1,000 | ||||
Interest rate | 5.125% | 5.125% | |||
Conversion rate | £ / shares | £ 1.754 | ||||
Par value | £ / shares | £ 1 | ||||
Paid-in equity | Additional tier 1 notes, march 2021 issuance, GBP | |||||
Borrowings | |||||
Equity | £ 399 | ||||
Notional amount of financial assets | £ 400 | ||||
Conversion rate | £ / shares | £ 1.754 | ||||
Par value | £ / shares | £ 1 | ||||
Paid-in equity | Additional tier 1 notes, June 2021 issuance, USD | |||||
Borrowings | |||||
Equity | £ 538 | ||||
Notional amount of financial assets | $ | $ 750 | ||||
Conversion rate | £ / shares | £ 1.754 | ||||
Par value | £ / shares | £ 1 |
Share capital and other equit_7
Share capital and other equity - Reserves (Details) - £ / shares | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | [1] | Dec. 31, 2019 | Mar. 19, 2021 | |
Ordinary share from discontinued operations basic | £ 0.024 | £ 0.010 | £ 0.021 | [1] | |||
Ordinary share from discontinued operations dilutive | 0.024 | £ 0.010 | £ 0.021 | [1] | |||
Ordinary shares | |||||||
Own shares held | 200,000,000 | ||||||
Par value | £ 1 | ||||||
Delivery of own shares held | 200,000,000 | ||||||
Own shares held | Ordinary shares | |||||||
Own shares held | 180,937,710 | ||||||
Delivery of own shares held | 19,062,290 | ||||||
Share awards and options | Own shares held | |||||||
Own shares held | 15,000,000 | 16,000,000 | |||||
Par value | £ 1 | ||||||
Delivery of own shares held | 1,000,000 | ||||||
[1] | Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated financial statements. |
Share capital and other equit_8
Share capital and other equity - Cumulative preference shares (Details) | Dec. 15, 2021GBP (£)shares |
11% Cumulative Preference Shares | |
Number of own shares purchased | shares | 259,314 |
Dividend rate | 11.00% |
Nominal value | £ 259,314 |
Percentage Of Preferred Stock Shares Purchased | 51.86% |
Preferred Stock Shares Purchase Price Percentage | 155.00% |
Total consideration | £ 401,937 |
5 1/2% Cumulative Preference Shares | |
Number of own shares purchased | shares | 157,546 |
Dividend rate | 5.50% |
Nominal value | £ 157,546 |
Percentage Of Preferred Stock Shares Purchased | 39.39% |
Preferred Stock Shares Purchase Price Percentage | 102.00% |
Total consideration | £ 160,697 |
Leases - Lessee Leases - Amount
Leases - Lessee Leases - Amounts recognised in consolidated financial statements (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of quantitative information about right-of-use assets [line items] | ||
Interest payable | £ (38) | £ (42) |
Depreciation | (167) | (209) |
Rental expense on short term leases | (1) | |
Income from subleasing right-of-use assets | 4 | 4 |
Right of use assets | 733 | 955 |
Additions to right of use assets | 70 | 80 |
Lease liabilities | (1,263) | (1,698) |
Total cash outflow for leases | 195 | 220 |
Payments of principal amount, lease liabilities | 164 | 179 |
Impairment of right of use assets | 52 | 89 |
Plant and equipment | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Right of use assets | 9 | 8 |
Accumulated depreciation | £ 4 | £ 2 |
Leases - Lessor Leases - Amount
Leases - Lessor Leases - Amounts recognised in consolidated income statement (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Amount included in consolidated income statement for finance leases | ||
Finance income on the net investment in leases | £ 298 | £ 289 |
Amount included in consolidated income statement for operating leases | ||
Gross Lease income | £ 169 | £ 168 |
Leases - Lessor Leases - Amou_2
Leases - Lessor Leases - Amount receivable under finance leases (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | £ 9,368 | £ 10,128 |
Unguaranteed residual values | (225) | (232) |
Future drawdowns | (21) | (22) |
Unearned income | (891) | (1,081) |
Present value of lease payments | 8,681 | 9,257 |
Impairments | (150) | (196) |
Net investment in finance lease | 8,531 | 9,061 |
Not later than one year [member] | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 3,272 | 3,156 |
After 1 year but within 2 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 2,044 | 2,231 |
2 to 3 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 1,443 | 1,609 |
3 to 4 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 757 | 952 |
4 to 5 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 429 | 492 |
After 5 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | £ 1,423 | £ 1,688 |
Leases - Lessor Leases - Nature
Leases - Lessor Leases - Nature of operating lease assets on the balance sheet (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of quantitative information about right-of-use assets [line items] | ||
Property, plant and equipment | £ 4,230 | £ 4,418 |
Operating lease assets | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Property, plant and equipment | 526 | 600 |
Rental income from investment property | 838 | 840 |
Transportation | Operating lease assets | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Property, plant and equipment | 282 | 327 |
Cars and light commercial vehicles | Operating lease assets | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Property, plant and equipment | 21 | 28 |
Other | Operating lease assets | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Property, plant and equipment | 223 | 245 |
Investment properties | Operating lease assets | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Lease income | £ 59 | £ 60 |
Leases - Lessor Leases - Undisc
Leases - Lessor Leases - Undiscounted lease receipts from operating leases and investment properties (Details) € in Millions, £ in Millions | Dec. 31, 2021GBP (£) | Dec. 31, 2021EUR (€) | Dec. 31, 2020GBP (£) | Dec. 31, 2020EUR (€) |
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | £ | £ 316 | £ 393 | ||
Investment properties | Operating lease assets | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | € | € 594 | € 554 | ||
Not later than one year [member] | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | £ | 131 | 143 | ||
Not later than one year [member] | Investment properties | Operating lease assets | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | € | 63 | 67 | ||
After 1 year but within 2 years | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | £ | 92 | 112 | ||
After 1 year but within 2 years | Investment properties | Operating lease assets | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | € | 62 | 127 | ||
2 to 3 years | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | £ | 50 | 79 | ||
2 to 3 years | Investment properties | Operating lease assets | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | € | 58 | 54 | ||
3 to 4 years | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | £ | 23 | 34 | ||
3 to 4 years | Investment properties | Operating lease assets | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | € | 56 | 76 | ||
4 to 5 years | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | £ | 11 | 14 | ||
4 to 5 years | Investment properties | Operating lease assets | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | € | 51 | 88 | ||
After 5 years | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | £ | £ 9 | £ 11 | ||
After 5 years | Investment properties | Operating lease assets | ||||
Disclosure of maturity analysis of operating lease payments [line items] | ||||
Amount receivable under operating leases | € | € 304 | € 142 |
Structured entities - Own asset
Structured entities - Own asset securitisations (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated structured entities | ||
Loans and advances to customers | £ 358,990 | £ 360,544 |
Consolidated structured entities | Other credit risk transfer securitisations | ||
Consolidated structured entities | ||
Loans and advances to customers | 7,137 | 10,027 |
ECL in relation to non-defaulted assets | 28 | 183 |
Consolidated structured entities | Covered Bond Programme | ||
Consolidated structured entities | ||
Debt securities in issue | 0 | 318 |
Loans and advances to customers | 8,965 | 10,758 |
Other borrowings | 3,512 | 4,105 |
Consolidated structured entities | Lending of own issued securities | ||
Consolidated structured entities | ||
Debt securities in issue | 1,564 | 2,029 |
Consolidated structured entities | Lending of own issued securities | Secured | ||
Consolidated structured entities | ||
Debt securities in issue | 1,494 | 1,893 |
Held by Third party | Other credit risk transfer securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | £ 867 | £ 772 |
Structured entities - Unconsoli
Structured entities - Unconsolidated structured entities (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Unconsolidated structured entities | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | £ 1,538 | £ 1,686 |
Maximum exposure | 8,320 | 8,127 |
Unconsolidated structured entities | Trading assets and derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 705 | 482 |
Unconsolidated structured entities | Trading assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 607 | 365 |
Unconsolidated structured entities | Derivative assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 269 | 457 |
Unconsolidated structured entities | Derivative liabilities | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (171) | (340) |
Unconsolidated structured entities | Non trading assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 6,077 | 5,959 |
Unconsolidated structured entities | Loans to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 2,053 | 1,897 |
Unconsolidated structured entities | Financial assets (Other) | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 4,024 | 4,062 |
Asset backed securitisation vehicles | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | 1,403 | 1,482 |
Maximum exposure | 7,311 | 7,215 |
Asset backed securitisation vehicles | Trading assets and derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 571 | 441 |
Asset backed securitisation vehicles | Trading assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 490 | 319 |
Asset backed securitisation vehicles | Derivative assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 251 | 441 |
Asset backed securitisation vehicles | Derivative liabilities | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (170) | (319) |
Asset backed securitisation vehicles | Non trading assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 5,337 | 5,292 |
Asset backed securitisation vehicles | Loans to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 1,692 | 1,400 |
Asset backed securitisation vehicles | Financial assets (Other) | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 3,645 | 3,892 |
Investment funds and other | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | 135 | 204 |
Maximum exposure | 1,009 | 912 |
Investment funds and other | Trading assets and derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 134 | 41 |
Investment funds and other | Trading assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 117 | 46 |
Investment funds and other | Derivative assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 18 | 16 |
Investment funds and other | Derivative liabilities | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (1) | (21) |
Investment funds and other | Non trading assets | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 740 | 667 |
Investment funds and other | Loans to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 361 | 497 |
Investment funds and other | Financial assets (Other) | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | £ 379 | £ 170 |
Asset transfers (Details)
Asset transfers (Details) - Securities repurchase agreements or lending transactions - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | £ 26,705 | £ 32,112 |
Fair value of associated liabilities | 24,747 | 31,932 |
Trading assets | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | 13,084 | 20,526 |
Loans to banks - amortised cost. | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | 38 | 5 |
Loans to customers - amortised cost. | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | 1,837 | 39 |
Financial assets (Other) | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | £ 11,746 | £ 11,542 |
Asset transfers - Assets pledge
Asset transfers - Assets pledged as collateral (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Asset transfers | ||
Assets pledged against liabilities | £ 47,395 | £ 49,682 |
Loans to customers and debt instruments transferred to provide collateral for issue of debt | 8,965 | 11,076 |
Debt securities and other borrowings issued for which collateral is provided by transferred assets | 3,512 | 4,105 |
Trading assets | ||
Asset transfers | ||
Assets pledged against liabilities | 23,601 | 28,728 |
The loans and advances to banks | ||
Asset transfers | ||
Assets pledged against liabilities | 62 | 49 |
The loans and advances to customers | ||
Asset transfers | ||
Assets pledged against liabilities | 20,108 | 15,939 |
Financial assets (Other) | ||
Asset transfers | ||
Assets pledged against liabilities | £ 3,624 | £ 4,966 |
Asset transfers - Transferred a
Asset transfers - Transferred assets continue to be recorded on Natwest Group's balance sheet (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of transferred financial assets that are not derecognised in their entirety [line items] | |||
Assets | £ 781,992 | £ 799,491 | £ 723,039 |
Mortgages - RoI | |||
Disclosure of transferred financial assets that are not derecognised in their entirety [line items] | |||
Total | 1,314 | 2,091 | |
Debt securities in issue | |||
Disclosure of transferred financial assets that are not derecognised in their entirety [line items] | |||
Assets | 1,286 | 2,067 | |
Debt securities in issue | Mortgages - RoI | |||
Disclosure of transferred financial assets that are not derecognised in their entirety [line items] | |||
Assets | 1,244 | 1,921 | |
Debt securities in issue | Cash deposits | |||
Disclosure of transferred financial assets that are not derecognised in their entirety [line items] | |||
Assets | 42 | 146 | |
Debt securities in issue held by third parties | Mortgages - RoI | |||
Disclosure of transferred financial assets that are not derecognised in their entirety [line items] | |||
Assets | 243 | ||
Debt securities in issue held by the Group | Mortgages - RoI | |||
Disclosure of transferred financial assets that are not derecognised in their entirety [line items] | |||
Assets | £ 1,314 | £ 1,848 |
Capital resources (Details)
Capital resources (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Shareholders' equity (excluding non-controlling interests) | |||
Shareholders' equity | £ 41,796 | £ 43,860 | |
Total equity | 41,803 | 43,824 | £ 43,556 |
Capital resources under the Prudential Regulation Authority requirements [Member] | |||
Shareholders' equity (excluding non-controlling interests) | |||
Shareholders' equity | 41,796 | 43,860 | |
Preference shares - equity | (494) | (494) | |
Other equity instruments | (3,890) | (4,999) | |
Shareholders' equity (excluding non-controlling interests) | 37,412 | 38,367 | |
Regulatory adjustments and deductions | |||
Own credit | 21 | (1) | |
Defined benefit pension fund adjustment | (465) | (579) | |
Cash flow hedging reserve | 395 | (229) | |
Deferred tax assets | (761) | (760) | |
Prudential valuation adjustments | (274) | (286) | |
Goodwill and other intangible assets | (6,312) | (6,182) | |
Foreseeable ordinary dividends | (846) | (364) | |
Foreseeable charges | (825) | ||
Foreseeable pension contributions | (365) | (266) | |
Adjustment under IFRS 9 transitional arrangements | 621 | 1,747 | |
Other regulatory adjustments | (5) | ||
Total regulatory adjustments and deductions | (8,816) | (6,920) | |
CET1 capital | 28,596 | 31,447 | |
Additional Tier 1 (AT1) capital | |||
Qualifying instruments and related share premium | 3,875 | 4,983 | |
Qualifying instruments and related share premium subject to phase out | 571 | 690 | |
Qualifying instruments issued by subsidiaries and held by third parties subject to phase out | 140 | ||
AT1 capital | 4,446 | 5,813 | |
Tier 1 capital | 33,042 | 37,260 | |
Qualifying Tier 2 capital | |||
Qualifying instruments and related share premium | 4,935 | 4,882 | |
Qualifying instruments issued by subsidiaries and held by third parties | 314 | 1,191 | |
Other regulatory adjustments | 457 | 400 | |
Tier 2 capital | 5,706 | 6,473 | |
Total regulatory capital | £ 38,748 | £ 43,733 | |
Minimum pillar 1 capital ratio | 8.00% | ||
Minimum tier 1 component ratio | 4.50% |
Memorandum items - Contingent l
Memorandum items - Contingent liabilities and commitments (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | £ 121,308 | £ 124,167 | |
Contingent liabilities and commitments | 125,367 | 128,732 | £ 124,995 |
Not later than one year [member] | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 60,029 | ||
Contingent liabilities and commitments | 62,027 | ||
More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 26,775 | ||
Contingent liabilities and commitments | 27,531 | ||
More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 27,136 | ||
Contingent liabilities and commitments | 27,374 | ||
After 5 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 7,368 | ||
Contingent liabilities and commitments | 8,435 | ||
The Financial Services Compensation Scheme | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 2,055 | 2,244 | |
The Financial Services Compensation Scheme | Not later than one year [member] | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 993 | ||
The Financial Services Compensation Scheme | More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 321 | ||
The Financial Services Compensation Scheme | More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 195 | ||
The Financial Services Compensation Scheme | After 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 546 | ||
Other contingent liabilities | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 2,004 | £ 2,321 | |
Other contingent liabilities | Not later than one year [member] | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 1,005 | ||
Other contingent liabilities | More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 435 | ||
Other contingent liabilities | More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 43 | ||
Other contingent liabilities | After 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | £ 521 |
Memorandum items - Contractual
Memorandum items - Contractual obligations of future (Details) - GBP (£) £ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Capital Commitments [Line Items] | |||
Capital expenditure on property, plant and equipment | £ 16 | £ 15 | [1] |
Contracts to purchase goods or services | 682 | 729 | [1] |
Total capital commitments | 698 | 744 | [1] |
Not later than one year [member] | |||
Disclosure Of Capital Commitments [Line Items] | |||
Contracts to purchase goods or services | £ 301 | £ 267 | |
[1] | Of which due within 1 year: £301 million (2020 - £267 million). |
Memorandum items - Other (Detai
Memorandum items - Other (Details) € in Millions, £ in Millions, $ in Millions, $ in Millions | 1 Months Ended | 2 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2021GBP (£)itemaction | Dec. 31, 2021USD ($)itemaction | Dec. 31, 2021EUR (€)itemaction | Dec. 31, 2020GBP (£) | Oct. 31, 2020GBP (£) | May 31, 2019AUD ($) | Mar. 31, 2019USD ($) | Oct. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2021GBP (£)actionitem | Dec. 31, 2021USD ($)actionitem | Dec. 31, 2021EUR (€)actionitem | Dec. 31, 2020GBP (£) | Dec. 31, 2019GBP (£) | Dec. 31, 2015USD ($)company | Dec. 31, 2018GBP (£) | Jul. 31, 2017item | Jan. 31, 2017 | |
Trustee and other fiduciary activities | ||||||||||||||||||
Fee income | £ 280 | £ 245 | £ 250 | |||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Additional Provisions | 789 | |||||||||||||||||
Provisions utilised | 967 | |||||||||||||||||
Legal proceedings provision [Member] | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Additional Provisions | 307 | |||||||||||||||||
Provisions utilised | 309 | |||||||||||||||||
Treatment of tracker mortgage customers | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Additional Provisions | 300 | € 358 | ||||||||||||||||
Provisions utilised | 281 | 335 | ||||||||||||||||
Internal review from treatment of tracker mortgage customers | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Additional Provisions | 158 | 188 | ||||||||||||||||
Provisions utilised | £ 131 | € 156 | ||||||||||||||||
Litigation and regulatory matters | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of failed US banks | item | 39 | |||||||||||||||||
Foreign exchange related investigations | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Fines received | € | € 32.5 | |||||||||||||||||
US investigations relating to fixed-income securities | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of years probation | 3 years | 3 years | 3 years | |||||||||||||||
Number of wire fraud | item | 1 | 1 | 1 | |||||||||||||||
Number of securities frauds | item | 1 | 1 | 1 | |||||||||||||||
Penalty paid for criminal fines | $ | $ 25.2 | |||||||||||||||||
Penalty paid for criminal forfeiture | $ | 2.8 | |||||||||||||||||
Penalty paid for restitution | $ | $ 6.8 | |||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US, issued by Nomura Holding America Inc and subsidiaries | New Jersey Carpenters Health Fund | NWMSI | ||||||||||||||||||
Litigation, investigations and reviews | ||||||||||||||||||
Agreed settlement amount | $ | $ 55.3 | |||||||||||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of non-class action | action | 24 | 24 | 24 | 24 | 24 | 24 | ||||||||||||
JPY LIBOR and Euroyen TIBOR | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of class action lawsuits | 2 | 2 | 2 | 2 | 2 | 2 | ||||||||||||
Other LIBOR cases | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of class action lawsuits | 5 | |||||||||||||||||
FX antitrust litigation | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Settlement amount paid | $ | $ 255 | |||||||||||||||||
Federal Court of Australia FX antitrust litigation | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of other parties subject to lawsuit or legal investigation | 4 | |||||||||||||||||
Maximum Total Transaction Value | $ | $ 0.5 | |||||||||||||||||
UK Competition Appeal Tribunal | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of applications for opt-out collective proceedings | 2 | |||||||||||||||||
Tel Aviv District Court FX antitrust litigations | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of motions to certify FX-related class actions | 2 | |||||||||||||||||
Tel Aviv District Court FX antitrust litigations | NatWest Markets Plc | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of pending motions | 1 | 1 | 1 | 1 | 1 | 1 | ||||||||||||
Swaps antitrust litigation | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of swap execution facilities | item | 3 | 3 | 3 | |||||||||||||||
Spoofing litigation | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of class action lawsuits | action | 3 | 3 | 3 | 3 | 3 | 3 | ||||||||||||
Madoff | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Number of class action lawsuits | action | 2 | 2 | 2 | 2 | 2 | 2 | ||||||||||||
Damages claimed | $ | $ 298 | |||||||||||||||||
EUA trading litigation | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Damages quantified | £ 45 | |||||||||||||||||
Number of claimants | company | 10 | |||||||||||||||||
Offshoring VAT assessments | HMRC | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Claimed unpaid VAT after tax assessment | £ 143 | |||||||||||||||||
Payments For Value Added Tax Assessments | £ 143 | |||||||||||||||||
Legal proceedings money laundering regulation litigation | National Westminster Bank Plc | ||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||
Fines received | £ 264.8 |
Analysis of the net investmen_3
Analysis of the net investment in business interests and intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Analysis of the net investment in business interests and intangible assets | |||
Fair value given for businesses acquired | £ (55) | ||
Additional investment in associates | £ (51) | £ (40) | |
Net assets/liabilities purchased | (3,128) | ||
Net outflow of cash in respect of acquisitions | 3,179 | 40 | 55 |
Sale of interests in associates | 27 | ||
Net assets/liabilities disposed | 114 | 288 | 351 |
Profit on disposal | 55 | 3 | |
Net inflow of cash in respect of disposals | 169 | 318 | 351 |
Cash expenditure on intangible assets | (479) | (348) | (380) |
Net outflow of cash | £ (3,489) | £ (70) | £ (84) |
Analysis of changes in financ_3
Analysis of changes in financing during the year (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Balance | £ 43,824 | £ 43,556 | |
Net cash flows from financing activities | (2,601) | 90 | £ (2,570) |
Balance | 41,803 | 43,824 | 43,556 |
Share capital, share premium, paid-in equity and merger reserve | |||
Balance | 18,239 | 17,246 | 17,134 |
Ordinary shares issued | 17 | ||
Cancellation of treasury shares | (698) | ||
Issue of paid in equity | (937) | 2,218 | |
Net cash flows from financing activities | 937 | 2,218 | 17 |
Paid in equity reclassified to subordinated liabilities | (2,046) | (1,277) | |
Balance | 16,519 | 18,239 | 17,246 |
Share capital, share premium, paid-in equity and merger reserve | Employee share schemes | |||
Ordinary shares issued | £ 87 | £ 52 | £ 95 |
Analysis of changes in financ_4
Analysis of changes in financing during the year - Subordinated liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Analysis of changes in financing during the year | |||
Net cash flows from financing activities | £ (2,601) | £ 90 | £ (2,570) |
Subordinated Liabilities | |||
Analysis of changes in financing during the year | |||
At 1 January | 9,962 | 9,979 | 10,535 |
Issue of subordinated liabilities | 1,634 | 1,631 | 577 |
Redemption of subordinated liabilities | (4,765) | (3,502) | (1,108) |
Interest on subordinated liabilities | (321) | (510) | (533) |
Net cash flows from financing activities | (3,452) | (2,381) | (1,064) |
Effects of foreign exchange | (18) | (234) | (315) |
Changes in fair value of subordinated liabilities and MRELs | (434) | 133 | 317 |
Paid in equity reclassified to subordinated liabilities | 1,915 | 1,632 | |
Loss on sale of subordinated liabilities and MRELs | 145 | 324 | |
Interest on subordinated liabilities and MRELs | 311 | 509 | 506 |
At 31 December | 8,429 | 9,962 | 9,979 |
MREL | |||
Analysis of changes in financing during the year | |||
At 1 January | 20,873 | 19,249 | 16,821 |
Issue of MRELs | 3,383 | 1,309 | 3,640 |
Maturity/redemption of MRELs | (2) | (1,285) | |
Interest on MRELs | (647) | (671) | (428) |
Net cash flows from financing activities | 2,736 | 636 | 1,927 |
Effects of foreign exchange | (190) | (514) | (683) |
Changes in fair value of subordinated liabilities and MRELs | (649) | 829 | 539 |
Interest on subordinated liabilities and MRELs | 653 | 673 | 645 |
At 31 December | £ 23,423 | £ 20,873 | £ 19,249 |
Analysis of cash and cash equ_3
Analysis of cash and cash equivalents (Details) € in Millions, £ in Millions | 12 Months Ended | ||||||
Dec. 31, 2021GBP (£) | Dec. 31, 2020GBP (£) | Dec. 31, 2019GBP (£) | Dec. 31, 2021EUR (€) | Dec. 31, 2020EUR (€) | Dec. 31, 2019EUR (€) | Dec. 31, 2018GBP (£) | |
Analysis of cash and cash equivalents | |||||||
Cash | £ 124,489 | £ 80,993 | £ 91,368 | ||||
Cash equivalents | 14,710 | 19,595 | 17,568 | ||||
Cash and cash equivalents at 1 January | £ 139,199 | 100,588 | 108,936 | ||||
Net increase/(decrease) in cash and cash equivalents | 51,507 | 38,611 | (8,348) | ||||
Cash and cash equivalents at 31 December | 190,706 | 139,199 | 100,588 | ||||
Cash and balances at central banks | 177,757 | 124,489 | 80,993 | ||||
Trading assets | 7,137 | 9,220 | 12,578 | ||||
Other financial assets | 16 | 173 | 459 | ||||
Loans to banks - amortised cost | 5,796 | 5,317 | 6,558 | ||||
Total cash and cash equivalents | 190,706 | 139,199 | 100,588 | £ 108,936 | |||
Cash collateral posted with bank counterparties | £ 4,293 | £ 7,592 | £ 7,570 | ||||
NWM N.V. | |||||||
Cash | |||||||
Mandatory reserve deposits at central banks | € | € 60 | € 81 | € 47 | ||||
Royal Bank of Scotland International (Holdings) Limited | |||||||
Cash | |||||||
Mandatory reserve deposits at central banks | € | € 123 | € 59 | € 58 |
Directors' and key management_3
Directors' and key management remuneration - Directors (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | ||
Short-term benefits | £ 18,124 | £ 18,718 |
Share-based payments | 2,491 | 3,249 |
Post-employment benefits | 380 | 474 |
Director | ||
Related party transactions | ||
Short-term benefits | 6,329 | 6,057 |
Share-based payments | 549 | 609 |
Total Directors' remuneration | 6,878 | 6,666 |
Post-employment benefits | 0 | 0 |
Non-executive directors | ||
Related party transactions | ||
Short-term benefits | 1,641 | 1,708 |
Chairman and executive directors | ||
Related party transactions | ||
Short-term benefits | £ 4,688 | £ 4,349 |
Directors' and key management_4
Directors' and key management remuneration - Key management (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Directors' and key management remuneration | ||
Short-term benefits | £ 18,124 | £ 18,718 |
Post-employment benefits | 380 | 474 |
Share-based payments | 2,491 | 3,249 |
Total remuneration | £ 20,995 | £ 22,441 |
Transactions with directors a_3
Transactions with directors and key management (Details) £ in Thousands | Dec. 31, 2021GBP (£)director | Dec. 31, 2020GBP (£) |
Transactions with directors and key management | ||
Loans to customers - amortised cost | £ 358,990,000 | £ 360,544,000 |
Customer deposits | 479,810,000 | 431,739,000 |
key management personnel | ||
Transactions with directors and key management | ||
Loans to directors | £ 7,023,190 | |
Number of directors with outstanding loans | director | 7 | |
Loans to customers - amortised cost | £ 9,128 | 5,165 |
Customer deposits | £ 51,018 | £ 45,747 |
Related parties (Details)
Related parties (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2021GBP (£) | |
Related party transactions | |
Cash ratio deposits | 0.406% |
Threshold eligible liabilities | £ 600 |
Associate | |
Related party transactions | |
Investment extended to ownership voting rights (as a percentage) | 20.00% |
Subsidiary | HM Treasury | NatWest Group plc | |
Related party transactions | |
Percentage of ownership interest | 52.96% |
Post balance sheet events (Deta
Post balance sheet events (Details) - Notice of redemption of instruments that can no longer be included as part of Tier 1 capital [Member] £ in Millions, € in Billions | Mar. 31, 2022GBP (£) | Mar. 08, 2022EUR (€) | Mar. 02, 2022GBP (£) | Feb. 01, 2022GBP (£) |
Perpetual Regulatory Tier One Security (ISIN US780097AH44) | ||||
Post balance sheet events | ||||
Notional amount | £ 1,200 | |||
Interest Rate | 7.648% | |||
Perpetual Regulatory Tier One Security (ISIN US780097AH44) | Forecast | ||||
Post balance sheet events | ||||
Redemption of subordinated liabilities | £ 67.5 | |||
Fixed to Floating Rate notes due 8 March 2023 | Forecast | ||||
Post balance sheet events | ||||
Redemption of subordinated liabilities | € | € 1.5 | |||
USD Series U Non-Cumulative Dollar Preference Shares (ISIN US39057AA62) | Forecast | ||||
Post balance sheet events | ||||
Redemption of preference shares | £ 1,013 |