Update: NatWest Group PLC

The stable outlook indicates that we expect NatWest'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. We could lower the ratings if macroeconomic pressures and geopolitical uncertainties appear likely to challenge asset quality and earnings materially. We could raise the ratings during our two-year outlook horizon if economic and geopolitical conditions stabilize and NatWest demonstrates a

...NatWest's franchise is anchored by a broad and deep domestic business. NatWest is one of the leading competitors in U.K. retail and commercial banking. Its commercial banking franchise, in particular, is in peer leading--with diverse commercial lending franchise across small, midsize, and large U.K. corporates, as well as institutional banking services through its NatWest Markets business. While the commercial and institutional franchise sits at the core of NatWest, recent asset growth has been driven by its mortgage business, which grew by 18% between 2018 and half-year 2022. This has broadened the scope of its retail franchise, and further anchored NatWest's position in the U.K. market....

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