NatWest Markets PLC

The stable outlook on NWM mirrors that on NWG. The stable outlook indicates that we expect NWG's credit profile to remain robust over our two-year horizon. We anticipate that its earnings will remain strong and it will maintain solid funding and liquidity profiles. Our ratings on NWM will move in tandem with those on NWG so long as we continue to view NWM as a highly strategic subsidiary of the group. We could lower the ratings on the group, and NWM, if macroeconomic pressures and geopolitical uncertainties appear likely to challenge NWG's asset quality and earnings materially. Furthermore, any ongoing economic volatility that undermines the broad stability of the U.K. banking and financial system could also lead to a downgrade.

...NatWest Markets (NWM) is a highly strategic subsidiary of its 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 (a stronger assessment). This is because we consider NWM to have 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 focus on rates,...

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