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Leases | 12 Months Ended
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Dec. 31, 2021
Leases |
Leases | 23 Leases A lease is a contract or part of a contract whereby the lessor (the legal owner of an asset) conveys to the lessee (the user of the asset) the right to use an asset for an agreed period of time in exchange for a payment or series of payments. This note presents the income, expenses, assets, liabilities and cash flows of NatWest Group in the capacity of both lessee and lessor. ​ Lessee NatWest Group is party to lease contracts as lessee to support its operations. The following table provides information in respect of those lease contracts as lessee. ​
​ | ​ | ​ | ​ | ​
​ |  | 2021 |  | 2020
​ |  | £m | ​ | £m
Amount recognised in consolidated income statement | ​ | ​ | ​ | ​
Interest payable |  | (38) | ​ | (42)
Depreciation (1) |  | (167) | ​ | (209)
Rental expenses on short term leases |  | — | ​ | (1)
Income from subleasing right to use assets |  | 4 | ​ | 4
​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
​ | ​ | 2021 | ​ | 2020
​ | ​ | £m | ​ | £m
Amount recognised on balance sheet | ​ | ​ | ​ | ​
Right of use assets include property, plant and equipment (2),(3) |  | 733 | ​ | 955
Additions to right of use assets |  | 70 | ​ | 80
Lease liabilities (3),(4) |  | (1,263) | ​ | (1,698)
​ The total cash outflow for leases is £195 million (2020: £220 million), including payment of principal amount of £164 million (2020: £179 million) which are included in the operating activities in the cash flow statement.
(1) | Includes impairment of right of use assets of £52 million (2020: £89 million).
(2) | Includes right of use asset for plant and equipment of £9 million (2020: £8 million) and depreciation of £4 million (2020: £2 million).
(3) | Includes the effect of the purchase of freeholds for properties where the Group was the primary leaseholder.
(4) | Contractual cashflows of lease liabilities are shown in Note 12.
​ Lessor Acting as a lessor, NatWest Group provides asset finance to its customers. It purchases plant, equipment and intellectual property, renting them to customers under lease arrangements that, depending on their terms, qualify as either operating or finance leases. ​
​ | ​ | ​ | ​ | ​
​ |  | 2021 |  | 2020
​ |  | £m | ​ | £m
Amount included in consolidated income statement |  | ​ | ​ |
Finance leases | ​ | ​ | ​ | ​
Finance income on the net investment in leases |  | 298 | ​ | 289
​ | ​ | ​ | ​ | ​
Operating leases | ​ | ​ | ​ | ​
Lease income |  | 169 | ​ | 168
​ The following table shows the reconciliation of undiscounted finance lease receivables to net investment in finance leases: ​
​ | ​ | ​ | ​ | ​
​ |  | 2021 | ​ | 2020
​ |  | £m |  | £m
Amount receivable under finance leases | ​ | ​ | ​ | ​
Within 1 year |  | 3,272 | ​ | 3,156
1 to 2 years |  | 2,044 | ​ | 2,231
2 to 3 years |  | 1,443 | ​ | 1,609
3 to 4 years |  | 757 | ​ | 952
4 to 5 years |  | 429 | ​ | 492
After 5 years |  | 1,423 | ​ | 1,688
Lease payments total |  | 9,368 | ​ | 10,128
Unguaranteed residual values |  | 225 | ​ | 232
Future drawdowns |  | (21) | ​ | (22)
Unearned income |  | (891) | ​ | (1,081)
Present value of lease payments |  | 8,681 | ​ | 9,257
Impairments |  | (150) | ​ | (196)
Net investment in finance leases |  | 8,531 | ​ | 9,061
​ ​ 23 Leases continued The following tables show undiscounted lease receivables from operating leases: ​
​ | ​ | ​ | ​ | ​
​ |  | 2021 | ​ | 2020
​ |  | £m |  | £m
Amount receivable under operating leases | ​ | ​ | ​ | ​
Within 1 year |  | 131 | ​ | 143
1 to 2 years |  | 92 | ​ | 112
2 to 3 years |  | 50 | ​ | 79
3 to 4 years |  | 23 | ​ | 34
4 to 5 years |  | 11 | ​ | 14
After 5 years |  | 9 | ​ | 11
Total |  | 316 | ​ | 393
​
​ | ​ | ​ | ​ | ​
​ |  | 2021 |  | 2020
Nature of operating lease assets on the balance sheet | ​ | £m | ​ | £m
Transportation |  | 282 |  | 327
Car and light commercial vehicles |  | 21 |  | 28
Other |  | 223 |  | 245
|  | 526 |  | 600
​ Fair value of investment properties under operating lease are £838 million (2020: £840 million) and had lease income of £59 million (2020: £60 million). The following table shows undiscounted lease receivables from investment properties: ​
​ | ​ | ​ | ​ | ​
​ |  | 2021 |  | 2020
​ | ​ | £m | ​ | £m
Amount receivable under investment properties |  |  |  |
Within 1 year |  | 63 |  | 67
1 to 2 years |  | 62 |  | 127
2 to 3 years |  | 58 |  | 54
3 to 4 years |  | 56 |  | 76
4 to 5 years |  | 51 |  | 88
After 5 years |  | 304 |  | 142
Total |  | 594 |  | 554
​

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