NatWest Markets PLC

The stable outlook on NWM mirrors that on NWG and we expect NWG's credit profile to remain robust over our two-year horizon. We anticipate that its earnings will strengthen in line with management's guidance and it will maintain solid funding and liquidity profiles. Loan arrears and defaults are likely to increase from the current benign levels, but we do not foresee a material deterioration. Consistent with the CET1 ratio trajectory, we anticipate that our risk-adjusted capital (RAC) ratio will fall to 9.5%-10.0% at year-end 2024. Our ratings on NWM will move in tandem with those on NWG as long as we continue to view NWM as a highly strategic subsidiary of the group. We could lower the ratings if macroeconomic

...S&P Global Ratings assesses NatWest Markets (NWM) as a highly strategic subsidiary of ultimate parent NatWest Group plc (NWG). This classification takes into account NWM's materiality, important role in the parent's strategy, and close link to the group's brand and reputation. We see NWM as highly strategic rather than core (core is a stronger assessment) because we consider it has a higher risk profile and weaker earnings than NWG's ring-fenced activities, which we assess as core to the group in our rating on the primary holding company of these operations, National Westminster Bank plc. As a result of NWM's highly strategic status, we position the long-term issuer credit rating one notch below the 'a' group credit profile, which includes a two-notch uplift for additional loss-absorbing capacity (ALAC). We do not determine a stand-alone credit profile for NWM. NWM is NWG's primary U.K. non-ring-fenced bank subsidiary. It houses the majority of the group's capital-market activities, which...

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