Good afternoon, everyone. Thank you for joining our H1 2026 fixed income results presentation.

I'm joined today by Donal Quaid, our Treasurer, and Paul Pybus, our Head of Debt IR. I will take you through the headlines for the half-year and the detail for the quarter.

Donal will take you through the balance sheet, capital, and liquidity, and then I'll go through the forward look and targets, and then we'll open up for questions. Turning to the headlines.

Our results today show how we've created a bank with increasing momentum through our focus on sustainable growth and returns. By delivering growth across all three businesses, improving operating leverage, and managing our capital and risk well, we have created the most efficient large UK bank with the lowest cost of risk, delivering the strongest levels of capital generation and highest returns.

Our performance makes clear we have the capability and capacity to grow at scale. The momentum we're seeing in customer growth, efficiency, and returns gives us confidence for the future.

We have created a business capable of delivering strong compounding, sustainable returns through the cycle. In February, we set out how we planned to deliver our 2028 targets by pursuing disciplined growth, leveraging simplification, and actively managing our capital and risk.

Our aim is to grow customer assets and liabilities at an annual rate of more than 4%, to reduce our cost-income ratio to below 45%, and to generate over 200 basis points of capital before distributions with a return on tangible equity of more than 18%. Our strategy is delivering excellent results as we make good progress against these three ambitions.

Let me give you the financial headlines. We have deliberately built a scaled business that benefits from structural UK growth drivers to deliver strong returns on a sustainable basis.

Our return on tangible equity was industry-leading at 19.7%. Our acquisition of Evelyn Partners has now completed and boosts our exposure to the fast-growing UK wealth market.

Customer assets and liabilities grew 13.4%, including Evelyn Partners. We continue to drive operating leverage.

Income growth of 8.9% is significantly ahead of 4.5% cost growth, and our cost-income ratio reduced 2.8 percentage points to 46%, getting close to our 2028 target. We also generated high levels of capital at 137 basis points, and our balance sheet remains strong with a CET1 ratio of 13.2% after the acquisition of Evelyn Partners.

Given the strength of our performance and our confidence in the outlook, we are upgrading our 2026 returns guidance to more than 19%. I'll now take you through the performance of the second quarter.

My comments for the second quarter use the first quarter as a comparator. Our strong performance in the first quarter continued in the second with broad-based growth, income momentum, and improved operating leverage.

Income excluding notable items increased 5.4% to £4.4 billion, and total operating costs grew 1.8% to £2.1 billion, driving a 1 percentage point improvement in the cost-income ratio to 45.5%. The impairment charge was £140 million, equivalent to 13 basis points of loans.

This resulted in 12.4% growth in operating profit to £2.3 billion pounds. Profit attributable to ordinary shareholders was £1.6 billion, and we delivered a return on tangible equity of 21%.

Turning now to income. Income excluding notable items was up 5.4% at £4.4 billion.

Income across our three businesses continued to grow, supported by an increase in CAL, margin expansion, and higher non-interest income. Non-interest income grew 15% or £124 million.

Given the strength of our performance and the inclusion of Evelyn Partners, we now expect full-year income excluding notable items of around £17.9 billion. Turning now to customer assets and liabilities, or CAL.

We are pleased with our continued track record of growth. CAL increased by £86.8 billion in the quarter, or 9.6% to £986.9 billion.

This comprises £9.7 billion of broad-based customer lending growth, £2.8 billion of customer deposit growth, and a £73.9 billion pound increase in assets under management and administration, including Evelyn Partners. I'll touch on each of these elements in turn.

We are reporting another quarter of strong broad-based loan growth across the group with gross loans to customers up by £9.7 billion. Retail Banking and Private Banking and Wealth Management balances grew £4 billion or 1.7%.

This comprises £3.9 billion in mortgages and £0.1 billion in unsecured lending. Our mortgage stock share increased to 12.7% with record applications in March.

Commercial & Institutional lending increased by £5.7 billion or 3.6%. Within this, growth is strongest for larger corporate and institutions where we see continued strong demand driven by structural trends, including digitization and decarbonization.

Our mid-market customers are showing healthy demand driven by manufacturing and social housing. Turning now to deposits.

Customer deposits grew by £2.8 billion in the quarter. This was driven by Commercial & Institutional where deposits increased by £2.5 billion with broad-based growth across business banking, commercial mid-market, and our large corporates.

Private Banking and Wealth Management deposits were up £0.3 billion, mainly as a result of growth in savings balances. Retail Banking deposits were stable with further migration to fixed and variable rate ISAs as customers prioritize tax-efficient savings options.

Turning now to assets under management. Assets under management and administration closed the quarter at £130.6 billion.

This includes the addition of £71.7 billion from Evelyn Partners and a £4 billion reduction following the sale of Cushon in May. Turning now to costs.

We are pleased that once again we have driven operating leverage as income growth outpaced cost growth. Other operating expenses were £2 billion in the second quarter, taking the total to £4.1 billion for the first half.

Our cost-income ratio reduced by 2.8 percentage points to 46%, and we now expect other operating expenses to be around £8.5 billion for the full year. Turning to impairments.

Credit performance remains strong and we benefit from a structurally low loan impairment rate and strong asset quality. The impairment charge for the quarter was £140 million, equivalent to 13 basis points of loans.

We saw no new signs of stress across our three businesses, and we continue to expect a loan impairment rate below 25 basis points for 2026, our guidance is unchanged. We carry economic uncertainty post-model adjustments of £284 million with total PMAs of £316 million.

With that, I'll hand over to Donal.

Thank you, Katie. Good afternoon, and thank you for joining today's call.

I'll start by sharing some highlights from the first half of the year before moving into more detail on the balance sheet, covering capital, liquidity, and funding. I'll then update you on our progress on funding plans across the group.

Starting with an overview of the key metrics on slide 15. We ended the first half with strong capital, MREL, and leverage positions, comfortably above regulatory minima with a CET1 ratio of 13.2%, a total MREL ratio of 30.6%, and a leverage ratio of 4.7%.

Our average liquidity coverage ratio was 140%, giving us a comfortable surplus over minimum requirements. Our average net stable funding ratio was 132%, and primary liquidity was £152 billion.

The group's funding is very well diversified. Our loan-to-deposit ratio was 90%, and we have a strong retail, private, and corporate deposit franchise with around £448 billion of customer deposits across our three businesses.

We've made good progress with our 2026 funding plan with £2.7 billion sterling equivalent of benchmark issuance from NatWest Group across HoldCo senior, AT1, and Tier 2 capital securities, and £3.7 billion sterling equivalent from NatWest Markets. Thank you for your continued support of NatWest in both the primary and secondary markets.

We saw another positive step in our credit ratings journey as Fitch upgraded a number of rated subsidiaries by 1 notch following an update to its bank ratings criteria. Moving to capital generation on slide 16.

Our business continues to be highly capital generative. We've ended the first half of the year with a common equity Tier 1 ratio of 14% before distributions, in line with the year-end.

Our earnings power is reflected in 197 basis points of CET1 capital generation, which was boosted by 31 basis points of capital generation from RWA management. Our ongoing investment spend consumed 19 basis points and organic lending growth consumed 61 basis points.

This means all our investment in growth was funded with just 6 months of capital generation. We are reporting a CET1 ratio of 13.2% after accruing 50% of attributable profit for ordinary dividend payments.

We expect to continue generating strong capital from earnings with active RWA management, and for 2026, we now anticipate capital generation before distributions and the impact of Evelyn Partners of more than 240 basis points. This is before the impact of Basel 3.1 on the 1st of January 2027 where we continue to assume around £10 billion of RWA uplift.

Turning now to our approach to capital allocation on slide 17. We have a robust balance sheet and aim to operate with a CET1 ratio of around 13%, giving us appropriate headroom above minimum requirements.

Our strong capital generation enables us to invest in our business to grow and deepen customer relationships. We are both disciplined and dynamic in our deployment of capital, and our diversification across three businesses gives us optionality through the cycle to optimize risk-adjusted returns.

We also apply a high bar as we consider acquisitions to accelerate our strategy through additional scale or capabilities. Our strategy is delivering attractive and growing shareholder returns, and we remain committed to a dividend payout ratio of around 50% and to returning surplus capital to shareholders via share buybacks.

Turning to our total capital position on slide 18. Our total capital ratio of 18.9% reflects the strength of our CET1 ratio and higher levels of AT1 and Tier 2 capital relative to our minimum requirements.

We currently have an AT1 ratio of 2.5% with £5.1 billion of securities outstanding, inclusive of the £500 million we issued in May. This is above our minimum requirement of 2.1%, and I expect to move closer to this requirement during the course of next year after the implementation of Basel 3.1.

Our Tier 2 ratio is 3.1% with £6.3 billion of securities outstanding, including the $750 million new issuance in the first half. Turning to our total MREL position on slide 19.

Our total MREL is very healthy at 30.6%, significantly higher than our risk-weighted asset requirements, leaving us well positioned for the growth and the upcoming impact of Basel 3.1. Having built out the maturity curve of our MREL stack, issuance requirements will be driven primarily by refinancing needs.

Turning to our total leverage position on slide 20. Our spot UK leverage ratio is 4.7% with an average ratio of 4.8%, compared to our 4.3% minimum requirements.

I welcome the proposed reforms to the leverage framework that were announced as part of the Financial Stability Report in July, which the PRA intend to consult on in the near future. As you can see from this slide, if the proposals are adopted, the minimum leverage ratio for NatWest Group would reduce by approximately 40 basis points to 3.9%.

While this will ensure leverage remains a backstop measure going forward, it will not bring any Day 1 benefits to the group given the risk-weight framework is our binding constraint. Turning to liquidity on slide 21.

Our liquidity position remains very strong. At the end of the quarter, the LCR was 140% on a 12-month rolling average, reflecting around £44 billion of surplus primary liquidity above minimum requirements.

Our total liquidity portfolio was £224.6 billion, comprising primary liquidity of £152 billion and secondary liquidity of £72.6 billion. Primary liquidity decreased during the first half, driven by an increase in lending and the acquisition of Evelyn Partners, partially offset by new issuance.

Secondary liquidity decreased through the amortization of eligible collateral prepositioned at the Bank of England. Our central bank balances are held at both the Bank of England and the European Central Bank, with 70% of balances held in sterling.

Looking at the composition of the securities portfolio, 69% are held to collect and sell and fair value through other comprehensive income, and 31% are held to collect and held on the balance sheet at amortized cost. The remaining primary liquidity is a smaller percentage of level 1 high-quality covered bonds and level 2 securities.

Turning to slide 22 and our funding composition. Although customer deposits account for over 80% of the group's funding, we also have access to stable and diverse sources of wholesale funding across a range of products, maturities, and currencies.

Of the £93 billion of wholesale funding outstanding, the large majority is senior HoldCo and regulatory capital issuance from NatWest Group and senior unsecured issuance from NatWest Markets. Drawings under the Bank of England's TFSME scheme are part of our funding mix, and our current drawings are £8.2 billion, with £5.2 billion repayable in March '27 and £3 billion in March 2031.

On slide 23, you can see that we've made progress against our issuance plans for 2026, including benchmark transactions from the group holding company, NatWest Markets, and NatWest Bank. From NatWest Group, we've issued around £1.6 billion sterling equivalent in HoldCo senior against our guidance of approximately £3 billion for the year.

In addition, we also issued £0.5 billion of AT1 and around £0.6 billion sterling equivalent of Tier 2 capital during the year, including our longest maturity dollar Tier 2 capital transaction to date, a very well supported 21 non-call 20. While for NatWest Markets Plc, our benchmark trades totaled £3.7 billion sterling equivalent across euro and US dollar markets.

We also returned to the covered bond market for NatWest Bank in June with a £1 billion issuance, our first since 2024. As we come into H2, we continue to look for opportunities to further balance our funding mix to support our customers.

Following the success of our covered bond issuance, we expect to return to the market with another transaction later in the year. Investor demand remains strong across a broad range of asset classes, including short-term markets, providing the flexibility to access funding where we see the best value.

As we approach the year-end, we will consider pre-financing opportunities across asset classes, taking into account balance sheet growth assumptions. Finally, turning to credit ratings on slide 24.

We are a composite strong A rating across our senior ratings, and it was pleasing to see progress in our credit ratings during the first half as Fitch upgraded a number of rated subsidiaries by 1 notch following an update to its bank ratings criteria. With that, I'll hand back to Katie.

Thank you, Donal. Given our first-half performance and the inclusion of Evelyn Partners, we are strengthening our 2026 guidance.

We now expect income excluding notable items of around £17.9 billion, other operating expenses of around £8.5 billion, capital generation before distributions and the impact of Evelyn Partners greater than 240 basis points, and a return on tangible equity of more than 19%. Finally, we now expect to announce our next buyback with our full-year results in February.

With that, I'll hand back to the operator for Q&A. Thank you.

Donal, do you want to take that?

Yeah. Quite generic questions, there's a lot to unpack.

Let me cover a few elements. Overall, what we say is we welcome the direction of travel to date.

We reiterate what Katie said in the call this morning and I also said in my opening comments, there has been no change to our capital requirements to date. If we look at some of the proposed reforms that were discussed as part of the FSR review: Firstly, on leverage, again, in my opening remarks, I talked about the changes that we see from a NatWest Group perspective.

If implemented as proposed, we see about a 40 basis points reduction in our leverage requirement, but that will not bring any Day 1 benefit to the group given we are constrained by the risk-weight framework and not leverage. However, I would say it is a positive move because it removes and ensures that leverage remains a backstop measure and will not become a binding constraint in the foreseeable future.

We've also had a lot around buffer usability. The FBC has signaled an ambition to support the move towards a simpler framework centered on a single buffer that is releasable in stress.

Again, very much welcome that. Anything that increases the size of releasable buffers in stress and simplifies the framework is a positive.

However, I think given that any changes there will be in conjunction with international authorities, I don't expect any changes in the near term that will evolve over a number of years. Then we also had the proposed change to the O-SII buffer where the PRA have clarified that they could release the O-SII buffer in the event of a systemic stress under existing discretionary powers.

Now, again, this is not going to have any impact on the way we manage capital or our CET1 target for a number of reasons. Firstly, the O-SII is applied at the ring-fencing holding group level, and the related group risk add-on that is apple at NatWest Group does not form part of MDA threshold.

Therefore, in a stress, there will be no change to our MDA, though it would obviously be a change to our minimum requirement. As we give careful thought to the calibration of our CET1 target with consideration to multiple factors, not just a consideration of MDA or buffers in stress.

We also look to balance the expectations of various stakeholders, as well as consideration to our minimum supervisory requirements in both BAU and stress requirements. Also, probably the last point I would just call out is that the releasability of the O-SII buffer would only be in the event of a systemic stress and would afford no benefit against an idiosyncratic capital event, which is an integral part of our management planning and target setting.

I think there are the key, I think, proposals that were outlined in the FSR. The other probably more meaningful element from a NatWest Group perspective is the work that still needs to be done on the overlapping elements of the domestic capital framework.

That's one that we see the most potential upside. That has been deferred to Q4, but we look forward to constructively engaging with the PRA on the case for reducing that overlap so within the framework.

I'll pause there.

Thank you, Donal.

I'll

take this one again.

Sure.

Covered bonds, we guided to a billion of covered bonds for the year. You saw we did execute our first covered bond in a number of years in June.

As Katie outlined this morning, given the success of that transaction, we will look to come back to that market at some stage in H2. I think the likelihood is as we move to a more normalized liquidity position, we expect covered bonds to be more core part of our issuance requirements going forward.

Thanks, Donal.

Hi, Violetta.

Hi, Katie. Hi, Donal.

Can you hear me?

Yes.

Perfectly. Yeah.

Oh,

great. Sorry.

Thank you very much for organizing the call, and obviously, congratulations on the results. Look, just a question from me.

I'm looking at your funding slide, and you're halfway through your funding for 2026. Shall I just take that we're still expecting you in AT1, Tier 2, and a little bit of MREL?

Is that, if you can confirm, just that? Then you mentioned pre-funding.

If we could quantify that a little bit, maybe, and then which part of the capital structure? Any comment also on currencies would be highly appreciated.

Thank you.

Sure. Let me cover them, Violetta.

Thanks for the question. Yeah.

I think your expectations from a holding company are pretty much there or thereabouts. I would expect from an MREL perspective to be active in H2, given we have to date issued about £1.6 billion sterling equivalent of our £3 billion guidance.

Probably expect that to be done over two transactions over H2. Additional Tier 1, we're running headroom at the moment, 2.5% versus our requirement 2.1%.

Obviously, I need to consider the impact of Basel 3.1 on the 1st of January '27, but also, we do have a £1 billion sterling call in May. We'll keep optionality there if there's a follow-on transaction to the £500 million we've done earlier on this year.

I think we're done in Tier 2 capital for this year given the transaction that we did earlier in the year. Then if I move on to the pre-financing question, I suppose it's becoming quite a regular occurrence, I think, just given the strong market dynamic.

We'll look at market conditions into H2 once we've completed this year's requirements. If we think, from an issuer perspective and spreads are attractive, then we will give that some consideration, probably later in Q4.

The question around, I think going forward capital requirements, you can actually see, post-Basel 3.1, really what you're looking at is refinancing of existing calls and maturities with some balance sheet growth built in there as well. We do have a slide in the deck that shows you, post the AT1 call next year in May, we have, I think, only £400 million in 2028, and then there's nothing from an AT1 perspective for call until 2031.

Do expect that capital issuance to be quite light, I think, over the next few years. Currency-wise, we'll be open to, I think, just different pricing dynamics in each market.

Again, given a large portion of our outstanding capital MREL is in dollars, expect kind of dollars to play a big role in that as well over the next few years.

Super. Thanks, Donal.

Hi, Robert. Hope you're well.

Hi. Thanks.

Good to hear from you both, and thanks for taking my questions and doing the call. Some of my question was just answered, but with respect overall to AT1s and then Tier 2s, first, given the amount of capital generation that the bank is currently producing, do you see going forward even a bigger decline in the use of AT1s and Tier 2s?

I know other than this call next year, you don't have anything for a while. It seems like you'll just grow the balance sheet without keeping pace on the AT1 side.

How about on the Tier 2 side? Number 1.

Secondly, you did 21 non-call 20, very successful issue here in dollars. US investors still, for whatever reason, struggle with the 15 non-call 10 structure.

Could you talk about how the 21 non-call 20 worked from your point of view, from a treasury and cost point of view? Because I think that would be something that would be more attractive going forward to US investors rather than the 15 non-call 10 for whatever reasons.

Then third question: on the call this morning, a question was asked about data centers. If you want to give any more color on your exposure there just as a percentage of balance sheet and what you want to do in that subsector going forward, that'd be great.

Thanks.

Donal, do you want to take the first couple, and I can get the third?

Yes. Send data centers back.

Yeah. Hi, Robert.

Good to hear from you. First question, just around AT1, Tier 2, and any reducing requirement there.

I wouldn't say reducing requirement because obviously, we still expect the balance sheet to grow, and with that, we expect RWAs to grow as well. It really is the refinancing calls and maturities, I think, across the AT1 and Tier 2 stack as opposed to actually the overall requirement going down.

As I said just on the answer to previous question, it is quite staggered because we have extended duration, particularly I think within our AT1 outstanding issues. A lot of that refinancing is back-ended beyond 2030.

On the question on the 21 non-call 20, yeah, your comments resonate. I think we've definitely seen at times from a US investor perspective that they aren't as comfortable with the 5-year non-call, if it's 15 non-call 10 or 10-year non-call 5.

Saying that, we have successfully issued both in the US over the last number of years. I think even though all investors aren't completely comfortable with that structure, there is a strong cohort of people who are invested in our debt that are.

The 21 non-call 20 was a very successful transaction for us. I think it just looked attractive from an issuance and spread perspective with the longer duration, and that's something that we're open to in terms of looking at longer duration issues as well if the investor demand is there.

Hopefully, that answers those questions.

Sure. Thanks very much, Donal.

Good to hear from you as ever, Robert. When looking at the kind of data center piece, look, it's not a separate classification that we pull out to say it would be x within here or there.

To get a kind of a view of kind of some of the detail of where we have different exposure, probably one of the easiest places to look is in the Pillar 3. I think if you go to page 34, within that, you can see it's the kind of SIC code kind of classification of different amounts that we have on the balance sheet by kind of subcategory of lending, and you'll be able to pick up in there the category that they're obviously part of in terms of that.

It's not in itself a meaningful number as part of the total bank. We obviously focus on long-term contracted assets with kind of strong off-pages and things like that.

Have a look there, and you'll be able to get a little bit of a flavor of the makeup of the total book by subcategory. Hopefully, that's helpful.

Thanks very much. I'd just like to say thank you as ever to all of you for the support you give us on our debt issuances.

It really is really much appreciated, and particularly when we come out with classes that we don't use as regularly, as we've obviously done a little bit this year with covered bonds. Thank you for joining the call, and I wish you all a lovely weekend when you get to it.

Take care. Thanks very much.

Thank you.