NatWest Markets Plc

The stable outlook on NWM mirrors that on NWG and reflects our expectation that NWG will perform resiliently over the remainder of the current credit cycle. We expect NWG's 2021 impairment charge could be close to zero as the economy recovers from the pandemic, which would provide a significant boost to earnings. Loan arrears and defaults are likely to increase moderately as the U.K. government withdraws its furlough scheme and tapers other fiscal measures, and we think NWG's provision cover is sufficient to manage this trend. 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 on

...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 (which is a stronger assessment) because we consider it has a higher risk profile and weaker earnings than NWG's ring-fenced activities. 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, credit, currencies, and financing. NWG has significantly reduced the scale and scope of its capital markets business...

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