NatWest Group plc
2021 Annual Report
and Accounts
Thrive
Together

Approval of Strategic report
The Strategic report for the year
ended 31 December 2021 set out
on pages 1 to 81 was approved
by the Board of directors on
17 February 2022.
By order of the Board
Jan Cargill
Chief Governance Officer
and Company Secretary
17 February 2022
Chairman:
Howard Davies
Executive directors:
Alison Rose (Group CEO)
Katie Murray (Group CFO)
Non-executive directors:
Frank Dangeard
Patrick Flynn
Morten Friis
Robert Gillespie
Yasmin Jetha
Mike Rogers
Mark Seligman
Lena Wilson
Contents
Our 2021 reporting suite brings together NatWest Group’s
financial, non-financial and risk performance for the year. The
reports are designed primarily to meet the expectations of our
investors (including holders of bonds issued under our green,
social and sustainability framework), as well as regulators, and
our wider stakeholders, including customers, colleagues and
society more broadly. The main reports within this suite and
their focus are detailed below:
Available within this report:
Strategic report: an overview of our business, our 2021
financial and non-financial performance and progress against
our purpose-led strategy to champion potential, helping people,
families and businesses to thrive.
Governance and remuneration report: a review of our
corporate governance and remuneration, including the
Report of the directors and Annual report on remuneration.
Risk and capital management report: an overview of the
management of key risks relating to our business operations
and disclosures on our capital, liquidity and funding position.
Financial statements: our financial statements and related
notes, including the independent auditor’s report.
Strategic report
2 Financial performance
3 Operational highlights
4 Chairman’s statement
6 Group Chief Executive’s review
12 Our purpose framework
14 Our stakeholders
18 Our strategy
20 Our strategy in action
28 Key performance indicators
30 Our purpose-led areas of focus
32 Market environment
34 How we create value
38 Business performance
40 Retail Banking
42 Private Banking
44 Commercial Banking
46 RBS International
48 NatWest Markets
50 Ulster Bank RoI
51 Outlook
52 Section 172(1) statement
54 Stakeholder focus areas
54 Customers
57 Investors
58 Colleagues
62 Communities
63 Regulators
63 Suppliers
64 Climate-related disclosures
72 Risk overview
74 Top and emerging risks
76 Viability statement
78 Non-financial information statement
80 Governance at a glance
82 Financial review
96 Governance
188 Risk and capital management
286 Financial statements
429 Additional information
Company announcement and
Financial supplement
Our latest company information including our
financial performance for the year with a focus
on key metrics and measurement.
Climate-related Disclosures Report
Details our progress in 2021 on our climate ambitions
including an overview of our approach to climate
related governance, strategy (including scenario
analysis), risk management, metrics and targets.
ESG Supplement
Provides an overview of our purpose in action and
key environmental, social and governance matters
including progress in 2021.
Pillar 3 Report
Focuses on our regulatory reporting requirements
and provides an explanation of our risk profile,
including our capital adequacy, risk appetite
and risk management.
Mica Johnson,
Owner, Floral Glory

Thrive
Together
NatWest Group champions potential,
helping people, families and businesses
to thrive.
We are the UK’s leading business bank,
and we serve 19 million customers
across every region of the UK.
As a relationship bank for a digital world,
we are helping to break down barriers
that hold back our customers and we are
helping to build their financial confidence.
Because when people, families and
businesses thrive, we all…
1NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

2021
(9,280)
(7,858)
(7,758)
2020 2019 2021
2.7
0.4
3.8
2020 2019
2021
3,983
(481)
4,032
2020 2019 2021
3,136
(753)
2,950
2020 20192021
4,707
2,650
2,754
2020 2019
Financial performance
Financial strength
enables our purpose
Operating
profit/(loss)
before tax £m
Operating
expenses £m
Profit/(loss)
attributable
to ordinary
shareholders £m
Total capital
return to
shareholders
(paid and
proposed) £bn
20211 Jan
2022
16.2
18.5
18.2
15.9
2020 2019
CET1
ratio %
We have delivered a strong operating performance in 2021. Group
RoTE was 9.4%, benefiting from a £1.3 billion net impairment release.
We achieved our Group cost reduction target of 4.0% and lending
growth across our UK and RBSI retail and commercial businesses
was 2.6%, excluding UK Government financial support schemes. Our
capital and liquidity position remains strong after returning £3.8 billion
to shareholders, and default levels have remained low across all our
portfolios. The CET1 ratio was 18.2%, reducing to 15.9% on 1 January
2022 following regulatory RWA and capital changes. We have made
good progress on our phased withdrawal from the Republic of Ireland
and will focus the financial commentary below on the Group excluding
Ulster Bank RoI (Go-forward group).
Total income, excluding notable items, in the Go-forward group
was 5.6% lower than prior year. Across the UK and RBSI retail
and commercial businesses income increased by 1.4% reflecting
strong balance sheet growth, principally in our mortgage book. NWM
income was below expectations, down by 61.5%, compared with 2020,
reflecting continued weakness in Fixed Income, impacted by subdued
levels of customer activity and ongoing reshaping of the business, and
exceptional levels of market activity in the prior year.
We delivered a cost reduction of £256 million, or 4.0%, in 2021, in line
with our target for the year
(1)
. This has been achieved by transformation
across our customer journeys and NWM business, in line with the
strategic announcement made in February 2020 and a £68 million
reduction in the bank levy charge. Strategic costs of £787 million
included £237 million in NWM related to transformation, £124 million
of redundancy charges, £88 million of technology spend, and an
£85 million goodwill impairment.
A net impairment release of £1,278 million reflects the low levels
of realised losses we have seen across the year. Total impairment
Operating
profit before
impairment
losses £m
provisions reduced by £2.4 billion to £3.8 billion during 2021 and
as a result ECL coverage ratio decreased from 1.66% to 1.03%.
We are pleased to report a 2021 attributable profit of £2,950 million,
with earnings per share of 25.4 pence and a RoTE of 9.4%. A final
dividend of 7.5 pence per share is proposed, bringing our total 2021
paid and proposed capital distributions to £3.8 billion through a
combination of ordinary dividends, directed buybacks of the UK
Government stake and our on-market buyback programme.
Across the UK and RBSI retail and commercial businesses, and
excluding UK Government support schemes, net lending increased by
2.6%. Mortgage growth exceeded the market, however commercial
lending was behind market as we have sought to reduce certain
exposures, through targeted sector reductions and capital actions, whilst
continuing to focus on supporting customers through sustainable lending.
During the second half of the year we completed £8.1 billion Climate and
Sustainable Funding and Financing against our £100 billion target.
The CET1 ratio remains strong at 18.2%, or 17.8% excluding IFRS 9
transitional relief. The 30 basis points reduction in the year includes
capital distributions of c.240 basis points, partially offset by the reduction
in RWAs, c.170 basis points, and the attributable profit net of IFRS 9
transitional relief and other capital movements. RWAs of £157.0 billion
reduced by £13.3 billion in 2021 mainly reflecting business movements
in Commercial Banking, including targeted sector reductions,
improvement in risk parameters and active capital management.
On 1 January 2022, the proforma CET1 ratio was 15.9% including the
impact of regulatory RWA inflation, 200 basis points, the removal of the
software development costs capital benefit, 20 basis points, and the
tapering of IFRS 9 transitional relief, 10 basis points. RWAs increased
by £18.8 billion, including £14.8 billion associated with mortgage risk
weight changes.
(1) Total expenses excluding litigation and conduct costs, strategic costs, operating lease depreciation (OLD) and Ulster Bank RoI direct costs.
2 NatWest Group 2021 Annual Report and Accounts

Operational highlights
Operational highlights
2021 2020 2019
Growth
UK and RBSI retail and commercial businesses net lending excluding
UK Government support schemes 305.7bn £297.9bn £289.7bn
Gross new mortgage lending in Retail Banking 36.0bn £31.5bn £33.3bn
AUM Net New Money (NNM) £3.0bn £1.5bn £0.6bn
Percentage of customers using digital channels exclusively to interact with us
Retail Banking 60% 58% 46%
Commercial Banking 83% 82% 76%
Simplification
Reduction in other operating expenses £256m £277m £310m
Artificial intelligence – retail banking Cora conversations 10.7m 8.4m 5.4m
Video banking interactions per week 10,200 3,300 <100
Capital
Directed buyback value £1,125m – –
On-market buyback value £676m – –
Dividend per share (paid and proposed) 10.5p 3p 14p
Risk-weighted assets (RWAs) 157.0bn 170.3bn 179.2bn
CET1 ratio 18.2% 18.5% 16.2%
As at 1 Jan 2022 15.9% – –
Return on tangible equity 9.4% (2.4%) 9.4%
Read more about our strategic priorities on pages 18 and 19.
3NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Chairman’s statement
For much of 2021, there was a
growing sense of cautious optimism
that we might finally have put the
worst of the COVID-19 pandemic
behind us. However, towards the end
of the year, our resilience was put to
the test once more as the spread
of new variants necessitated the
reintroduction of various restrictions.
That brought particular challenges for our colleagues,
our customers and for the bank itself. But it also presented
opportunities and NatWest Group’s commitment to helping
people, families and businesses to thrive has never been
more important. We are building from extremely robust
foundations as a bank which holds strong market positions,
serving 19 million customers throughout the UK.
For the moment, a number of the key economic
indicators remain relatively positive – growth has returned,
unemployment is low, and the bank is seeing little in the
way of significant defaults among its customers.
However, there is no doubt that the rising cost of living is
making life difficult for many. It seems certain that inflation
will continue to increase in the short term at least – especially
as energy prices remain high. And we are yet to see the full
impact that the end of government support schemes will have
on the employment or housing markets. The uncertainty is not
just COVID-19-related, with global, European and domestic
political considerations also having an impact.
The Bank of England’s response has been limited so far and
while the market is anticipating a continued trajectory of
rate rises over the next twelve months, the low interest
rate environment is set to persist for some time to come.
Building a
purpose-led bank
to champion
potential
We champion potential; breaking
down barriers and building financial
confidence so the 19 million people,
families and businesses we serve
in communities up and down the
country can rebuild and thrive.
Howard Davies
Chairman
4 NatWest Group 2021 Annual Report and Accounts

‘The extensive support that the bank has provided to
its customers, colleagues and communities throughout
the pandemic was a key focus for the Board in 2021. We
also spent a significant amount of time ensuring that the
implementation of the bank’s strategy and transformation
agenda was subject to rigorous oversight and scrutiny.’
Against that backdrop, NatWest Group delivered a strong
financial performance in 2021, returning to profitability
and writing-back some of our pandemic-related impairment
provisions as the economic outlook improved. The bank’s
share price also saw a sharp recovery throughout the year,
increasing around 35% and outperforming our UK peers.
As our economy recovers and is reshaped to reflect new and
accelerating trends, we are focused on delivering sustainable
growth by creating deeper relationships with our customers
and giving them the support they need at every stage of their
lives – whether that is buying a house, saving for retirement
or setting up and growing their own business.
The UK banking industry as a whole has held up well
during the pandemic, remaining open for business and
well capitalised. NatWest Group retains one of the strongest
capital ratios among major European banks and we once
again comfortably passed the Bank of England’s stress test
in December 2021, further demonstrating the resilience of
our balance sheet to future crises. This, combined with our
continued capital generation, means our bank is well placed
to support its customers, invest for growth and drive
sustainable returns to shareholders.
£3.8 billion shareholder distributions were announced for
the financial year 2021, through buybacks – both directed and
on-market – and dividends. We also announced that we would
distribute at least £1 billion in dividends each year to 2023 as
we continue to optimise our capital ratio.
UK Government Investments (UKGI), which manages
the government’s shareholding, announced three separate
transactions during the course of 2021: the directed buyback
by NatWest Group; an on-market placement of shares; and an
ongoing trading plan. The government stake reduced from 62%
at the start of 2021, to less than 53% by the end of the year.
£3.8 billion
(paid and proposed)
shareholder distributions
announced for 2021
Final dividend of
7.5p per share
This was welcome progress. And we may take part in
further directed buybacks at the next opportunity, subject to
agreement from HM Treasury. Any transaction of this nature
could take the government’s shareholding below 50% for the
first time since the financial crisis. And while that would have
little impact on our governance or operations, it would be an
important symbolic moment for our bank.
NatWest Group’s financial performance has also been reflected
in the bonus pool for 2021, which has increased from the
previous year, where a significant reduction was made to reflect
our COVID-19-related losses. It is important to note, however,
that the bonus pool is slightly down on pre-pandemic levels.
It has been a period of relative stability in terms of Board
composition, with no changes to our membership in 2021.
As you would expect, we keep the composition, skills and
experience of the Board under review, and over the next
year or so we will need to recruit new members to cope
with planned retirements. In the main, the Board continued
to meet virtually throughout 2021. For 2022, we intend to
adopt a hybrid calendar with some meetings being held
virtually and some meetings in person, subject to relevant
government guidelines. Our virtual meeting technology has
served us well during the pandemic and we will continue to use
it to support the efficient and effective running of the Board.
The extensive support that the bank has provided to its
customers, colleagues and communities throughout the
pandemic was a key focus for the Board in 2021. We
also spent a significant amount of time scrutinising the
implementation of the bank’s strategy and transformation
agenda as well as enhancing our oversight of the bank’s culture.
The progress that Alison Rose and her strong and capable
leadership team have delivered in the last two years has
helped to ensure that NatWest Group is well placed to succeed
and grow as the needs and expectations of our customers
evolve. We are delivering on our purpose, underpinned by
our strategic priorities, and as a result, generating long-term
growth for our business, playing a positive role in our
communities and driving sustainable returns to our
shareholders. We know that by championing the potential
of the 19 million people, families and businesses we serve,
we will help them to thrive. And if they thrive, so will we.
Howard Davies
Chairman
5NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Group Chief Executive’s review
We champion
potential, helping
people, families,
and businesses
to thrive
Our future and our growth are
built on this one, clear purpose.
It’s what drives us, defines us,
and guides us. Because getting this
right means success – for ourselves
and for everyone we serve.
Alison Rose
Group Chief Executive Officer
NatWest Group’s execution is
centred around our purpose,
driving sustainable growth through
our strategic priorities. We are a
relationship bank for a digital world,
building ever deeper and closer
connections with our customers
throughout their financial lives,
enabling people, families and
businesses to thrive.
As I look back on 2021, I’m filled with admiration for
the resilience and adaptability that our colleagues and
customers have demonstrated during the pandemic. Faced
with unprecedented and constantly evolving challenges to the
UK’s public health and economy, the collective response has
been nothing short of extraordinary.
As it has been throughout the pandemic, the health and
well-being of our colleagues and customers continues to be
our highest priority. In particular, for the key workers who
have remained in our offices and branches to provide the
level of service and support our customers have needed
to rebuild and thrive.
NatWest Group is the UK’s leading business bank. It is also
a truly regional bank, serving 19 million customers throughout
the UK. We are proud of the role we play and the relationships
we already have across every part of the country. And we are
well positioned to deepen these relationships and to help our
customers, our economy and our bank to grow because
of the actions we have taken in recent years.
Thrive together
In spite of the difficult economic environment and the pressure
this continues to place on people, families and businesses up
and down the country, the UK remains an attractive and
entrepreneurial market, with small and medium-sized
enterprises (SMEs) driving around half of UK turnover and
employing 60% of the private sector workforce. It is also
an increasingly competitive market, where banks have
to maintain their relevance to earn their growth.
As the economy starts to recover and grow, customers’
expectations of banks are changing faster than ever. So too
is the way people live and work. Customers want a simple,
6 NatWest Group 2021 Annual Report and Accounts

Climate LearningEnterprise
Supporting customers at
every stage of their lives
Simple to deal with
Sharpened capital
allocation
Powered by innovation
and partnerships
These help us make a meaningful
contribution to society while balancing
the needs of our customers, colleagues
and shareholders
Our initial areas of focus
We champion potential, helping
people, families and businesses
to thrive
Our purpose
Our strategy
engaging experience, designed to anticipate particular needs
and reflect their priorities, just as they have in other areas of
their lives.
When I first took up my role as Chief Executive, we committed
to a purpose that guides all of our decision-making – we
champion potential, helping people, families and businesses
to thrive. We also set out clear areas of strategic focus to
deliver on this purpose in order to drive sustainable returns
for our shareholders and build sustainable value in our bank.
We are executing well against these areas of focus, delivering
growth in key areas while controlling costs, better allocating
our capital and accelerating our digital transformation.
As a relationship bank for a digital world, our focus now is
on the opportunities we see for future growth. It is a simple
principle: if our customers and economy thrive, so will we.
Sustainable growth will come from ever closer and
deeper relationships with our customers at every stage
of their lives. Relationships that are based on insight and
shared goals, delivering a simpler customer experience
that removes complexity and frustration. Relationships
that reflect customers’ values and aspirations for themselves
and society. Relationships that start earlier in our customers’
lives and which adapt to meet their evolving needs.
All of which will be enabled by the strategic partnerships
and acquisitions we have made, and by our efforts to simplify
how customers interact with our bank so they can enjoy
an easier, frictionless banking experience. It will also be
driven by a better allocation of our capital – with £3 billion
being invested in the business across a three-year period
from 2021 to 2023, in addition to the sustainable returns
we are delivering to shareholders.
7NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Chief Executive’s review continued
Delivering on our strategy
Of course, we are building from strong foundations. Our
operating profit for 2021 of £4.0 billion (£4.3 billion including
operating profit from discounted operations
(1)
) increased from a
loss of £481 million (£351 million loss including operating profit
from discounted operations
(1)
) the year before. This included
impairment releases of £1.3 billion, which reflected the low
levels of realised losses we have seen across the year.
We also continued to make progress against our other financial
targets. The bank’s net lending – excluding government
schemes – grew by £7.8 billion in 2021, primarily driven by
growth in mortgages. We removed a further £256 million of
costs from the business and retain a capital ratio well above
our target range.
At the same time, our digital transformation accelerated
as our customers chose to interact with us in different ways.
Around 60% of our retail current account holders now
only interact with us digitally
(1)
and we have seen further
strong growth in mobile payments and video banking. This
digitalisation of customer journeys is crucial to our future
growth, and our Net Promoter Scores are improving in key
segments as a result. For example, our much-improved
online process for renewing mortgages now takes as little
as 10 minutes.
We are also using our digital capabilities to keep our customers
safe and to build their financial capabilities, with credit scoring
now available in our app, dedicated support lines available
for customers in vulnerable situations and more than 1 million
customers growing their savings with us by £100 or more
for the first time.
As the UK’s leading business bank and a committed champion
of start-ups, we are removing barriers to enterprise, tackling
inequality and supporting growth by helping entrepreneurs
achieve their ambitions. We offer the UK’s largest fully funded
business accelerator network, with accelerator hubs across
the country providing support for high-growth businesses,
especially those led by under-represented groups. During the
pandemic, we pivoted this support for entrepreneurs to be
delivered digitally, as we did with our ‘Dream Bigger’
programme which helps 16–18-year-old girls develop
Committed to
embedding ESG
principles and
leading on
climate action.
(1) Go-forward group excludes Ulster Bank RoI.
(2) Income excluding notable items.
(3) Between 1 July 2021 and the end of 2025.
(4) Go-forward group other operating expenses defined as total expenses excluding litigation and conduct costs.
(1) Refer to the Non-IFRS financial measures section for details of the basis of preparation and reconciliation of Non-IFRS financial and performance measures.
(2) Retail Banking current account customers only based as at 31 December 2021 – metric is 87% of our retail customer needs are now met digitally, with 60% of our customers banking
entirely digitally. Only activity in the last quarter is considered.
A purpose-led company
with clear strategic
priorities, strong market
positions and capacity
to grow.
Supporting
19 million customers
throughout the UK.
Investing in our
digital proposition
to better serve
customers and
reduce cost.
Underpinned by
a robust balance
sheet and
an intelligent
approach to risk.
Focused on generating
long-term sustainable
value and a return
on tangible equity
of comfortably above
10% for the Group
in 2023.
Income excluding
notable items to be
above £11.0 billion
in 2022 in the
Go-forward group.
(1,2)
Accelerating
growth
Provide an
additional
£100 billion
of Climate and
Sustainable
Funding and
Financing.
(3)
Simplification via
digital and
technology
~3% cost reduction
per annum through
to 2023.
(1,4)
Disciplined
deployment of
capital
CET1 ratio of
13-14% by 2023,
~14% by the end
of 2022.
Long-term
sustainable returns
and distributions
Intention to
distribute a
minimum of £1
billion in each of
2022 and 2023.
Capital generative
business enabling
us to reinvest for
growth and return
excess to investors.
Our investment case: delivering against our strategic priorities to help our customers
to thrive and drive sustainable returns for shareholders
8 NatWest Group 2021 Annual Report and Accounts

transferable entrepreneurial skills. We also helped create
the SME Transformation Taskforce to unlock the growth
opportunity for the UK economy, identified in our
‘Springboard to Sustainable Recovery’ report.
Turning to our own business, the capital restructuring of
NatWest Markets has made substantial progress. It is simpler,
less capital intensive and better able to create opportunities for
our commercial customers by meeting their financing and risk
management needs, and by providing access to global markets
as well as leadership in high-growth areas, such as the green
and sustainable bond markets. As a result, we are creating
a new franchise called Commercial and Institutional by
bringing together our Commercial Banking, NatWest Markets
and RBS International businesses. The creation of this new
franchise is a further step in removing complexity and
becoming a simpler bank for customers to deal with.
We continue to make good progress on our phased withdrawal
from the Irish market, minimising job losses and protecting
services while supporting our customers and colleagues to
allow a smooth transition. During the year, we signed two
agreements with Allied Irish Banks p.l.c. (AIB) and Permanent
TSB p.l.c. (PTSB) which account for about 60% of the
Ulster Bank loan book in the Republic of Ireland, including
the transfer of colleagues, wholly or mainly supporting
the relevant portfolios and 25 branch locations.
These structural changes, along with our strong capital
position and continued capital generation, mean that we
are well placed to invest for growth, to provide the support
our customers need as the economy recovers and to drive
sustainable returns to shareholders, with £3.8 billion
shareholder distributions announced for 2021 through
dividends and buybacks.
The bank’s financial performance in 2021 also included a fine
following breaches of the Money Laundering Regulations 2007.
NatWest Group takes its responsibility to prevent and detect
financial crime extremely seriously. We deeply regret that we
failed to adequately monitor one of our customers between 2012
and 2016 to prevent money laundering. And while the case has
now come to an end, we continue to invest significant resources
in the ongoing fight against financial crime and fraud.
We are delivering our strategy through four strategic
priorities, with the aim of driving long-term sustainable
value and delivering on our 2023 targets, which we are
now updating. In 2022, we expect to deliver income excluding
notable items of above £11.0 billion in the Go-forward group
(1,2)
.
We are amending our cost reduction target to around 3% per
annum for 2022 and 2023
(2,3)
, reflecting higher inflation and our
ongoing investment in the business. Nevertheless, we maintain
a strong focus on continued cost discipline. We retain our 2023
CET1 ratio of 13–14%, and we have upgraded our return on
tangible equity target in 2023 to comfortably above 10% for
the Group.
Tackling climate change
One key area where our bank has a critical role to play is
in helping to tackle climate change. It is the biggest challenge
we face as a society, requiring collaboration and co-operation
on a global scale, and NatWest Group was proud to sponsor
the COP26 global climate conference which took place in
Glasgow in October/November 2021.
Our industry has a responsibility to drive and influence positive
change. As such, NatWest Group is committed to getting its
own house in order, bringing to an end the most harmful
activity and providing the support, advice and products our
customers need in order to accelerate the transition to a
net-zero economy.
We are one of the few banks to offer a Green Mortgage product,
with £728 million of lending to retail customers since its launch
in Q4 2020, and we established the Sustainable Homes and
Buildings Coalition with British Gas, Worcester Bosch and
Shelter to improve the energy efficiency of buildings in the UK.
Working with the fintech company CoGo, we were also the
first bank to introduce a carbon-tracking feature in our mobile
banking app. And we are helping colleagues and customers
to move to electric vehicles through a collaboration with
Octopus Energy.
Our Springboard to Sustainable Recovery report found that the
transition to net zero can create a huge opportunity for SMEs.
Close to 40% of our accelerator hubs are dedicated to supporting
sustainable businesses to help our most innovative start-ups to
take advantage of this opportunity. There is a clear societal
responsibility here, but also an obvious commercial imperative
in helping our customers to thrive as we transition to net zero.
Building a culture to champion potential
In seeking to make a positive contribution to the communities we
serve, we are also building an open, inclusive and progressive
place to work, breaking down barriers for our customers and
for our colleagues.
We are a learning organisation and our culture is critical to our
future success. We have worked with our colleagues as well
as with our customers, suppliers and communities to create a
new set of values that reflect the organisation we are today.
Values that match the ambition, optimism and energy our
purpose has given us, and that we can all believe in.
This builds on the progress we have made in recent years as
we consider the needs of all our colleagues and stakeholders.
In 2021, we launched our global Talent Academy to help
identify and develop colleague potential, with almost 4,000
accepted onto the programme. We also offered mental health
workshops for our line managers and our 1,300 Wellbeing
Champions, as well as seeing strong take up of our virtual
GP and physiotherapy offers.
(1) Income excluding notable items.
(2) Go-forward group excludes Ulster Bank RoI.
(3) Go-forward group other operating expenses defined as total of expenses less litigation and conduct
9NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Chief Executive’s review continued
Alison Rose talks about the
legacy of COP26 and NatWest
Group’s continued commitment
to help reach the 2015 Paris
Agreement goals.
Climate change in
conversation
What did it mean for NatWest Group
to be a principal partner of COP26?
Firstly, it was a huge honour. As one of the UK’s
biggest banks – and indeed the biggest for business
– we have both the ability and the responsibility to
take a major role in the fight against climate change.
We wanted to achieve two things at the conference:
to demonstrate how we can support our customers;
and to ensure that we play a leading role in the
global coalition of financial services organisations
tackling climate change.
We know the financial sector is a key enabler in
the drive towards net-zero emissions, so we invited
our customers to COP26 and held events that
explained the huge opportunity that climate change
can bring to businesses. We formed alliances to help
customers ‘green’ their homes, and collaborated with
organisations such as CoGo to help our customers
understand their carbon footprint. In this sense,
we saw the conference as an incredible chance
to showcase and develop the practical support we
can offer our retail and business customers to lower
their emissions.
With regard to collaborative action, we signed
up to the UK Government’s joint declaration on
accelerating the transition to 100% zero emission
vehicles, as well as announcing that we will be one
of 27 new members of the Powering Past Coal
Alliance, to accelerate the global transition from
coal. This follows on from our role as a founding
member of the Net Zero Banking Alliance and
becoming part of the new coalition of the Glasgow
Financial Alliance for Net Zero (GFANZ).
Outside the bank, we launched our ‘CareerSense’ programme,
providing more than 8,200 young people with free access
to tools that will develop critical skills and support their
employability prospects. We were also recognised by
the ‘Good Business Pays’ campaign for our commitment to
paying our suppliers the day after receiving an invoice, in
line with the Supplier Charter which we introduced in 2020.
In our top three layers globally, 38% of roles are currently filled
by female colleagues, a 9% increase since we first introduced
our target to have a full gender balance in these roles by 2030,
but a 1% decrease from 31 December 2020. We know we
have more to do and we continue to focus on the recruitment,
retention and advancement of women to meet our 2030 target.
In 2020, we launched the Racial Equality Taskforce to listen,
learn and better understand the barriers faced by colleagues,
customers and communities from Black, Asian and Minority
Ethnic backgrounds. Of those who disclose their ethnicity,
we have an aggregate of 11% Black, Asian and Minority
Ethnic colleagues in our top four layers in the UK; a 3%
increase since our 14% target was first introduced in 2018.
Living up to our purpose
Over the coming years, we will create a closer and deeper
relationship with the people, families and businesses that
we serve throughout the UK. From teenagers to retirees,
from newlyweds to new homeowners and from start-ups
to the largest multinationals, we will understand them
better, provide more value to them and help them to thrive.
By playing such a central role throughout the lives of our
customers, by taking action on the issues they care about
and by retaining their business as their needs and aspirations
change, our bank will go from strength to strength.
More than that, it will make a meaningful contribution to our
society, helping to grow and transition our economy as we
move towards net zero, sustainably growing our business
by living up to our purpose.
Alison Rose
Group Chief Executive Officer
10 NatWest Group 2021 Annual Report and Accounts

Read more about our Climate-related
disclosures on pages 64 to 71.
You mention the financial sector
is a key enabler, how can banking
make a difference?
Banks have a vital role to play –
by providing customers with access
to the necessary finance, expertise
and products, there is the chance
to drive real, positive change.
Importantly, I believe this is not only
good for the planet, but good for business
too. Our ‘Springboard to Sustainable
Recovery’ report clearly highlights this.
The report shows that small and medium-
sized enterprises (SMEs) can deliver
a significant amount of the UK’s
abatement targets, if they get the
right support. And this, we believe,
is a huge opportunity for businesses.
Demand for the financing to make this
happen is already significant. In 2020,
we set out to provide £20 billion of Climate
and Sustainable Funding and Financing over
two years. I am delighted that we met this
initial target in under 18 months, so in October
2021 we committed to an ambitious new goal
of providing an additional £100 billion of Climate
and Sustainable Funding and Financing between
1 July 2021 and the end of 2025.
Education and guidance are also key, which is why
we worked with fintech company CoGo in 2021 to
introduce a carbon-tracking feature in our mobile banking
app helping retail customers reduce the climate impact
of their spending. We are also working on similar pilot
schemes for our business customers.
What do you think will be the biggest
legacies of COP26?
I think history will judge COP26 as the point when
serious, collective climate action began across all
industries and all countries. In particular, it showed
the private sector starting to act together and at scale:
putting their own houses in order; taking action on
deforestation and biodiversity loss; and focusing on
the opportunities of the transition to net zero.
Most of all though, as 100,000 activists walked the
streets of Glasgow, it felt like a rallying call to embed
climate in all our decisions. Time will tell, but I hope
that COP26 will be remembered as the moment
where climate change truly became a global priority.
11NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our purpose framework
A relationship bank
for a digital world
We champion potential, helping people,
families and businesses to thrive
Read more on page 13
We are guided by
our purpose
Read more on pages 14-17 and 54-63
Delivering long-term sustainable value and
attractive returns, now and for the next generation
Focused on growth, underpinned by our values
and an intelligent approach to risk:
We are informed
by the needs of our
stakeholders
Customers
Colleagues
Regulators
Read more on pages 18-19
We have four
strategic priorities…
Read more on pages 30-31
…creating a positive
impact through our
areas of focus
Climate Enterprise Learning
Supporting
customers at every
stage of their lives
Communities
Investors
Suppliers
Simple to
deal with
Sharpened capital
allocation
Powered by
innovation and
partnerships
12 NatWest Group 2021 Annual Report and Accounts

Our purpose
NatWest Group champions potential, helping people, families
and businesses to thrive. Because when they thrive, so do we.
Our purpose guides and underpins everything we do.
It enables us to build long-term value, to invest for growth,
to make a positive contribution to society and to drive
sustainable returns for shareholders.
Our stakeholders
We aim to balance the different interests of our stakeholders –
customers, investors, colleagues, communities, regulators and
suppliers – in all our decision-making, especially when there
are difficult choices to be made. We also recognise the need
for transparency and openness, regularly engaging and
seeking the views of our stakeholders.
Our blueprint for better business
Our strategy
We are a relationship bank for a digital world. Our strategy
for growth delivers on our purpose and drives sustainable
returns to shareholders through four strategic priorities:
we will support our customers at every stage of their lives;
we will be powered by innovation and partnerships as we
accelerate our digital transformation; we will be simple
to deal with; and we will allocate our capital in a way
that delivers for customers and shareholders.
Our values
Our values are at the heart of how we deliver our purpose-led
strategy. In 2021, responding to feedback from stakeholders,
we engaged with colleagues, customers and communities to
re-envision a modernised set of values that fully align with our
strategic priorities. These collaborative and evolved values
will be launched in 2022 and will form an integral part of
our cultural identity.
Our positive impact
We recognise the huge responsibilities that our role
brings – from supporting the day-to-day financial needs
of 19 million customers, to the positive impacts we can have
on the environment and wider society.
We have identified three focus areas where we can make
a meaningful contribution and build long-term value in
our business:
Climate
We have made addressing the climate challenge and
supporting our customers in their transition to net zero
a key strategic priority.
Enterprise
We are committed to removing barriers to enterprise and
providing businesses in the UK the support they need to grow.
Learning
We are helping people to take control of their finances,
to make the most of their money, safely and securely –
now and in the future.
Our robust balance sheet, strong capital position and capital
generative businesses mean we are well placed to support our
customers and invest for growth, as well as driving sustainable
returns to shareholders and creating long-term value for all
our stakeholders.
Honest and fair
with customers and
suppliers
A responsible and
responsive employer
A good citizen
A guardian for
future generations
Our purpose:
Deliver long-term
sustainable
performance by
championing potential,
helping people, families
and businesses to thrive
13NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our stakeholders
Stakeholder
engagement
Our business is made up of a network of relationships. Listening, engaging
and partnering with stakeholders helps us to address our business impacts
and improve outcomes for customers, society and the environment. Below,
we highlight who our key stakeholders are and some examples of how we
collaborate with them to create value.
How we engaged What we discussed Outcome of engagements Challenges we faced
Customers – the people and businesses we serve
(*) Within the scope of EY assurance. Refer to page 78
– Face to face with retail customers via branches, mobile
branches and with our community bankers. Also, through
our video banking, telephony and secure messaging services.
– Customer surveys including Net Promoter Scores (NPS),
syndicated surveys, focus groups and listening sessions.
– Complaints.
– With businesses, through Bankline for our business and
commercial customers; our Accelerator, Business Builder
and Digital Boost programmes; and our Banking on Business
Surveys, polls and discussions.
– We support customers with their financial wellbeing, goals
and plans, our products and services, and with advice on
how to avoid fraud and scams.
– Customer experience and satisfaction, climate change
(including COP26), problem debt and financial distress, our
youth proposition, and building thriving local communities.
– Examples included service quality, and processes such
as fraud blocking and customer due diligence.
– COVID-19, Brexit, support for small and medium-sized
enterprises (SMEs), removing barriers to enterprise,
UK Government’s Levelling Up agenda, transition to a net-
zero economy.
– In 2021 we delivered 6.1 million
(*)
financial capability interactions and helped
470,813
(*)
additional customers start to save. We helped 111,895 people to
identify scams and know where to go to get help in 2021.
– In terms of customer advocacy in 2021, NPS for Retail Banking improved by six
points for NatWest and seven points for Royal Bank of Scotland. In Commercial
Banking, NatWest maintained a leading score in the market while Royal Bank
of Scotland is one of the leading brands – refer to page 56 for full details.
– Complaints provided us with the opportunity to improve our journeys for
customers and enhance colleague capability.
– Our Digital Boost collaboration has supported SME recovery and helped
drive inclusive economic growth. We have committed to support Digital Boost
to offer expertise to 500,000 women and 200,000 people from ethnically
diverse backgrounds.
Several customers reached out to us
expressing their dissatisfaction at the
closure of their local branch.
The way people bank with us has
changed dramatically in recent years,
with an increased demand for mobile
and online services as customers benefit
from a faster and easier way to bank.
However, we still have more than 800
branches open and 16,000 physical
points of presence including our ATM
network and our relationship with the
Post Office.
Closing a branch is a decision we take
very seriously – we know it can affect
people who are less confident with the
alternatives we offer. We will strive to
guide those customers through the
changes and find the best way to
serve them from now on.
– Customer engagement programme for
non-executive directors.
– Customer feedback videos.
– Customer experience and how our customers think about us.
– Changing customer behaviours and product feedback.
– Non-executive directors were able to observe customer-facing colleagues in
action and to hear customer feedback as part of a focus group or customer
listening surgery.
– Feedback videos were shown to NatWest Group Board as part of the
annual Board strategy session and provided useful insights to help inform
Board discussions.
Colleagues – the people who deliver our purpose
– Our View opinion survey.
– Wellbeing Champions, Inclusion Champions, Our Colleague
Experience Squad and employee-led networks.
– Team meetings, town halls and all-colleague webinars.
– Junior Management Team (JMT).
– Our View asks for colleague opinion on topics such as
purpose, wellbeing, inclusion, leadership and reward.
– Our colleague representative groups are passionate
about advancing topics that influence our culture, such
as wellbeing; new ways of working; diversity, equity
and inclusion; colleague capability; and remuneration.
– Several of the above topics, plus our sustainability aims.
– The JMT mirrored the size and shape of the executive
leadership team, and supported several strategic goals.
– Our View September 2021 survey results showed that overall colleague
sentiment remains strong, despite the impact of the pandemic.
– Our c.1,300 Wellbeing Champions supported and amplified our wellbeing
strategy, signposting colleagues to the right resources at the right time.
We continued to support our c.24,000 participant employee-led networks,
who empowered colleagues and helped to create an inclusive workplace.
– In 2021, we transformed our approach to mandatory diversity, equity and inclusion
learning. With help from some of our c.1,500 Inclusion Champions, we created an
e-Learning module featuring videos focusing on lived experiences of colleagues.
– The JMT created Mystery Meetups – an initiative that encourages connections
across NatWest Group, promoting wellbeing and a one-bank mentality.
Over 46,700 colleagues (81%)
participated in our September 2021
Our View survey. Despite colleague
sentiment on culture, purpose, inclusion
and building capability remaining strong,
scores in the reward category have
declined since 2020, but remain aligned
with the Global Financial Services Norm
(GFSN) in all but one question. We will
seek to address this, subject to
performance, in 2022.
Across all 15 measured categories,
NatWest Group is an average of 11
percentage points above the GFSN
and five percentage points above the
Global High Performance Norm (GHPN).
– Colleague Advisory Panel.
– Board and Group Sustainable Banking Committee (SBC)
talent sessions with potential Group Executive Committee
(ExCo) successors.
– Wellbeing, remuneration (including executives and
the wider workforce), climate, retail banking strategy,
sustainability and purpose.
– Board: customer behaviour and purpose, sustainability
and climate.
– SBC: how we can continue to support, build relationships,
and grow within the communities we serve.
– The Colleague Advisory Panel continued to provide an important
two-way communication channel between the Board and colleagues
on key topics of interest.
– Executive talent sessions helped our non-executive directors get to know
potential future leaders, through focused debates on strategic topics.
14 NatWest Group 2021 Annual Report and Accounts

How we engaged What we discussed Outcome of engagements Challenges we faced
Customers – the people and businesses we serve
(*) Within the scope of EY assurance. Refer to page 78
– Face to face with retail customers via branches, mobile
branches and with our community bankers. Also, through
our video banking, telephony and secure messaging services.
– Customer surveys including Net Promoter Scores (NPS),
syndicated surveys, focus groups and listening sessions.
– Complaints.
– With businesses, through Bankline for our business and
commercial customers; our Accelerator, Business Builder
and Digital Boost programmes; and our Banking on Business
Surveys, polls and discussions.
– We support customers with their financial wellbeing, goals
and plans, our products and services, and with advice on
how to avoid fraud and scams.
– Customer experience and satisfaction, climate change
(including COP26), problem debt and financial distress, our
youth proposition, and building thriving local communities.
– Examples included service quality, and processes such
as fraud blocking and customer due diligence.
– COVID-19, Brexit, support for small and medium-sized
enterprises (SMEs), removing barriers to enterprise,
UK Government’s Levelling Up agenda, transition to a net-
zero economy.
– In 2021 we delivered 6.1 million
(*)
financial capability interactions and helped
470,813
(*)
additional customers start to save. We helped 111,895 people to
identify scams and know where to go to get help in 2021.
– In terms of customer advocacy in 2021, NPS for Retail Banking improved by six
points for NatWest and seven points for Royal Bank of Scotland. In Commercial
Banking, NatWest maintained a leading score in the market while Royal Bank
of Scotland is one of the leading brands – refer to page 56 for full details.
– Complaints provided us with the opportunity to improve our journeys for
customers and enhance colleague capability.
– Our Digital Boost collaboration has supported SME recovery and helped
drive inclusive economic growth. We have committed to support Digital Boost
to offer expertise to 500,000 women and 200,000 people from ethnically
diverse backgrounds.
Several customers reached out to us
expressing their dissatisfaction at the
closure of their local branch.
The way people bank with us has
changed dramatically in recent years,
with an increased demand for mobile
and online services as customers benefit
from a faster and easier way to bank.
However, we still have more than 800
branches open and 16,000 physical
points of presence including our ATM
network and our relationship with the
Post Office.
Closing a branch is a decision we take
very seriously – we know it can affect
people who are less confident with the
alternatives we offer. We will strive to
guide those customers through the
changes and find the best way to
serve them from now on.
– Customer engagement programme for
non-executive directors.
– Customer feedback videos.
– Customer experience and how our customers think about us.
– Changing customer behaviours and product feedback.
– Non-executive directors were able to observe customer-facing colleagues in
action and to hear customer feedback as part of a focus group or customer
listening surgery.
– Feedback videos were shown to NatWest Group Board as part of the
annual Board strategy session and provided useful insights to help inform
Board discussions.
Colleagues – the people who deliver our purpose
– Our View opinion survey.
– Wellbeing Champions, Inclusion Champions, Our Colleague
Experience Squad and employee-led networks.
– Team meetings, town halls and all-colleague webinars.
– Junior Management Team (JMT).
– Our View asks for colleague opinion on topics such as
purpose, wellbeing, inclusion, leadership and reward.
– Our colleague representative groups are passionate
about advancing topics that influence our culture, such
as wellbeing; new ways of working; diversity, equity
and inclusion; colleague capability; and remuneration.
– Several of the above topics, plus our sustainability aims.
– The JMT mirrored the size and shape of the executive
leadership team, and supported several strategic goals.
– Our View September 2021 survey results showed that overall colleague
sentiment remains strong, despite the impact of the pandemic.
– Our c.1,300 Wellbeing Champions supported and amplified our wellbeing
strategy, signposting colleagues to the right resources at the right time.
We continued to support our c.24,000 participant employee-led networks,
who empowered colleagues and helped to create an inclusive workplace.
– In 2021, we transformed our approach to mandatory diversity, equity and inclusion
learning. With help from some of our c.1,500 Inclusion Champions, we created an
e-Learning module featuring videos focusing on lived experiences of colleagues.
– The JMT created Mystery Meetups – an initiative that encourages connections
across NatWest Group, promoting wellbeing and a one-bank mentality.
Over 46,700 colleagues (81%)
participated in our September 2021
Our View survey. Despite colleague
sentiment on culture, purpose, inclusion
and building capability remaining strong,
scores in the reward category have
declined since 2020, but remain aligned
with the Global Financial Services Norm
(GFSN) in all but one question. We will
seek to address this, subject to
performance, in 2022.
Across all 15 measured categories,
NatWest Group is an average of 11
percentage points above the GFSN
and five percentage points above the
Global High Performance Norm (GHPN).
– Colleague Advisory Panel.
– Board and Group Sustainable Banking Committee (SBC)
talent sessions with potential Group Executive Committee
(ExCo) successors.
– Wellbeing, remuneration (including executives and
the wider workforce), climate, retail banking strategy,
sustainability and purpose.
– Board: customer behaviour and purpose, sustainability
and climate.
– SBC: how we can continue to support, build relationships,
and grow within the communities we serve.
– The Colleague Advisory Panel continued to provide an important
two-way communication channel between the Board and colleagues
on key topics of interest.
– Executive talent sessions helped our non-executive directors get to know
potential future leaders, through focused debates on strategic topics.
Key ESG topics for our stakeholders
In 2021 we carried out an Environmental, Social and Governance (ESG) materiality assessment, involving a programme of
stakeholder engagement to deepen our understanding of the ESG topics that matter most to them. The findings guide our reporting
and decision-making, ensuring we remain focused on the right issues. While we have identified climate, enterprise and learning as
the three focus areas of our purpose where we can make a meaningful contribution, our 2021 assessment confirmed that our
stakeholders believe there are many other important ESG topics for NatWest Group to consider, particularly those related to
our core business responsibilities.
Read more about our ESG materiality assessment, including our methodology, in our 2021 Environmental,
Social and Governance Supplement.
How we engage
across the company
How we engage
at Board level
For further information on how stakeholder considerations influenced the
Board’s discussions and decision-making, refer to our section 172(1) statement
on pages 52 to 53, and our Corporate governance report on page 102.
15NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our stakeholders continued
How we engaged What we discussed Outcome of engagements Challenges we faced
Communities – the places where we have an impact
(*) Within the scope of EY assurance. Refer to page 78
– We continued to engage with our charity relationships,
supporting them through Payroll Giving, colleague fundraising
and volunteering, and disaster and emergency appeals.
– We supported young people through the delivery of our
MoneySense and CareerSense programmes.
– NGOs, academia and think tanks.
– We discussed raising awareness of charitable donations,
and enabling employee volunteering and fundraising
opportunities through our Do Good Feel Good campaign.
– MoneySense gave financial advice to young people while
our CareerSense programme provided critical
employability skills – especially to those from
underprivileged backgrounds.
– We discussed several climate-related topics, such as our
lending policies, Paris Alignment, biodiversity and COP26.
– Our direct community investment in 2021 amounted to £7,266,818
(*)
. Across all
of our fundraising and volunteering programmes, our colleagues have given
£3,543,533 and 43,003 worktime volunteering hours.
– MoneySense has helped 10 million young people learn about money since it
was launched in 1994, and is currently supported by over 6000 active volunteer
colleagues. CareerSense has seen 8,200 pupil registrations since its launch in
June 2021.
– We sponsored COP26, published our first Nature and Biodiversity Statement,
and signed up to the Net Zero Banking Alliance and other commitments.
During 2021, the COVID-19 pandemic
resulted in NatWest Group temporarily
closing two popular volunteering
programmes – MoneySense for Schools
and The Conservation Volunteers (TCV).
MoneySense for Schools remained
closed throughout 2021, though online
resources were still available. However,
due to the TCV programme being
delivered outdoors, in June we were
once again able to offer colleagues the
chance to do their bit to help nature
and biodiversity to thrive.
– The Chairman, Group CEO, Group CFO and selected
non-executive directors attended the COP26 Climate Summit
along with members of the executive team.
– Progress against our climate ambitions, goals and targets.
– Regulatory and investor expectations in relation to climate.
– Non-executive directors and the executive team spent time talking with
customers, colleagues and industry peers at a range of climate-focused events.
Suppliers – where we source our goods and services
– Regular review meetings with key suppliers.
– Policy due diligence activity.
– Audit reviews.
– Environmental and ethical sustainability.
– Prompt payment.
– Risk management.
– In collaboration with key stakeholders, we completed the first review
of our Supplier Charter, which sets out our aims and expectations in
several key areas.
– We worked with EcoVadis – a leading organisation providing third-party
evidence-based assessments of sustainability performance – to measure our
own performance and that of our suppliers against the charter, enabling us
to identify social, environmental and ethical improvements.
Where suppliers that underwent the
EcoVadis assessment performed below
the global average, we know there is
more we can do to engage and support
them in improving their performance on
key sustainability topics.
To achieve this, we have put in place
a strategy for 2022 that aims to enable
our suppliers to improve and help us
cultivate a more responsible value chain.
– Business reviews (regular Board reports) – Regular updates on key supplier and partnership
relationships and initiatives being undertaken with them.
– Business review updates provided the Board with visibility on key supplier
activity and how this supported our purpose, strategy, financial performance
and climate ambitions.
Investors – providers of the capital and funding that supports our business activities
– Investor spotlight sessions, presentations at industry
conferences and meetings with our senior management.
– These presentations provided a deep dive into key areas
of the business, progress to date and future priorities.
– Institutional investors and research analysts gained a deeper understanding of
our business and were able to ask questions of the wider management team.
COVID-19 restrictions presented a
challenge for the 2021 AGM. As a
solution to investors being unable to
attend the AGM, we held a virtual
shareholder event one week prior to
the AGM. Investors had the opportunity
to hear from Board members and ask
questions prior to voting on the AGM
resolutions. Answers and a recording of
the event were made available on our
website. Holding the event demonstrated
that engagement with investors is a
priority for the Board.
– The Chairman, Group CEO, and Group CFO took part in
a programme of engagement through quarterly results
presentations and 1-1 meetings with our largest investors.
– The Chairman, Group CEO, and other non-executive
directors represented the Board at three virtual shareholder
events with private shareholders.
– The Chairman and a number of non-executive directors
hosted a corporate governance forum for investors.
– Progress against strategic priorities, financial performance,
capital return policy, environmental, social and governance
topics, regulation and the macroeconomic environment.
– As above, plus a discussion around dividends and share
price performance, supporting enterprise and tackling
climate change.
– Board succession planning, diversity and inclusion, key
areas of Board focus, ‘Say on Climate’ resolutions.
– The Chairman, Group CEO and Group CFO have an open dialogue
with institutional investors, updating investors on progress and keeping
the Board informed about their views and priorities throughout the year.
– Private shareholders also had the opportunity to raise any concerns directly
with Board members at our virtual shareholder events.
– Investors received an update on key corporate governance topics and the
Board heard their views on evolving practice for Say on Climate resolutions.
Regulators – who we seek to comply with
– We engaged in several regulatory consultations. – Alternative risk-free reference rates (to replace LIBOR).
– Credit risk.
– Cybersecurity.
– Historical conduct issues.
– Access to cash.
– COVID-19 support measures and recovery.
– Environmental, Social and Governance issues.
– We sent bilateral responses to material consultations or other requests for
comment/input issued by various government, regulatory and standard setting
bodies during 2021.
– We engaged with regulators during the policy proposal phase on several
occasions to help inform priorities – examples included the independent review
of ring-fencing and proprietary trading and the FCA’s proposals for a new
consumer duty.
In December 2021, NatWest Bank Plc
was fined £264.8 million by the FCA for
three breaches of the Money Laundering
Regulations 2007. We deeply regret that
we failed to adequately monitor one of
our customers between 2012 and 2016
for the purpose of preventing money
laundering. We cooperated fully with
the FCA’s investigation. As part of its
ongoing programme of investment in
its people, processes and technology,
NatWest Group’s financial plans
already include over £1 billion to
further strengthen financial crime
controls over the next five years.
– Prudential Regulation Authority (PRA) attendance at
July 2021 Board meeting.
– Non-executive directors engaged with regulators through
continuous assessment and proactive engagement meetings.
– PRA periodic summary meeting (PSM) outputs.
– Topics included strategy, financial performance, capital
distributions, Board and Committee priorities, Board
effectiveness, governance, risk and control environment,
financial crime and ring-fenced bank independence.
– The Board were able to hear directly from the PRA on the key messages in the
PRA’s PSM letter, including regulator expectations for key areas of Board focus.
– Engagement meetings allowed the directors to understand the regulators’ key
areas of interest and provide them with direct feedback on those topics.
16 NatWest Group 2021 Annual Report and Accounts

How we engaged What we discussed Outcome of engagements Challenges we faced
Communities – the places where we have an impact
(*) Within the scope of EY assurance. Refer to page 78
– We continued to engage with our charity relationships,
supporting them through Payroll Giving, colleague fundraising
and volunteering, and disaster and emergency appeals.
– We supported young people through the delivery of our
MoneySense and CareerSense programmes.
– NGOs, academia and think tanks.
– We discussed raising awareness of charitable donations,
and enabling employee volunteering and fundraising
opportunities through our Do Good Feel Good campaign.
– MoneySense gave financial advice to young people while
our CareerSense programme provided critical
employability skills – especially to those from
underprivileged backgrounds.
– We discussed several climate-related topics, such as our
lending policies, Paris Alignment, biodiversity and COP26.
– Our direct community investment in 2021 amounted to £7,266,818
(*)
. Across all
of our fundraising and volunteering programmes, our colleagues have given
£3,543,533 and 43,003 worktime volunteering hours.
– MoneySense has helped 10 million young people learn about money since it
was launched in 1994, and is currently supported by over 6000 active volunteer
colleagues. CareerSense has seen 8,200 pupil registrations since its launch in
June 2021.
– We sponsored COP26, published our first Nature and Biodiversity Statement,
and signed up to the Net Zero Banking Alliance and other commitments.
During 2021, the COVID-19 pandemic
resulted in NatWest Group temporarily
closing two popular volunteering
programmes – MoneySense for Schools
and The Conservation Volunteers (TCV).
MoneySense for Schools remained
closed throughout 2021, though online
resources were still available. However,
due to the TCV programme being
delivered outdoors, in June we were
once again able to offer colleagues the
chance to do their bit to help nature
and biodiversity to thrive.
– The Chairman, Group CEO, Group CFO and selected
non-executive directors attended the COP26 Climate Summit
along with members of the executive team.
– Progress against our climate ambitions, goals and targets.
– Regulatory and investor expectations in relation to climate.
– Non-executive directors and the executive team spent time talking with
customers, colleagues and industry peers at a range of climate-focused events.
Suppliers – where we source our goods and services
– Regular review meetings with key suppliers.
– Policy due diligence activity.
– Audit reviews.
– Environmental and ethical sustainability.
– Prompt payment.
– Risk management.
– In collaboration with key stakeholders, we completed the first review
of our Supplier Charter, which sets out our aims and expectations in
several key areas.
– We worked with EcoVadis – a leading organisation providing third-party
evidence-based assessments of sustainability performance – to measure our
own performance and that of our suppliers against the charter, enabling us
to identify social, environmental and ethical improvements.
Where suppliers that underwent the
EcoVadis assessment performed below
the global average, we know there is
more we can do to engage and support
them in improving their performance on
key sustainability topics.
To achieve this, we have put in place
a strategy for 2022 that aims to enable
our suppliers to improve and help us
cultivate a more responsible value chain.
– Business reviews (regular Board reports) – Regular updates on key supplier and partnership
relationships and initiatives being undertaken with them.
– Business review updates provided the Board with visibility on key supplier
activity and how this supported our purpose, strategy, financial performance
and climate ambitions.
Investors – providers of the capital and funding that supports our business activities
– Investor spotlight sessions, presentations at industry
conferences and meetings with our senior management.
– These presentations provided a deep dive into key areas
of the business, progress to date and future priorities.
– Institutional investors and research analysts gained a deeper understanding of
our business and were able to ask questions of the wider management team.
COVID-19 restrictions presented a
challenge for the 2021 AGM. As a
solution to investors being unable to
attend the AGM, we held a virtual
shareholder event one week prior to
the AGM. Investors had the opportunity
to hear from Board members and ask
questions prior to voting on the AGM
resolutions. Answers and a recording of
the event were made available on our
website. Holding the event demonstrated
that engagement with investors is a
priority for the Board.
– The Chairman, Group CEO, and Group CFO took part in
a programme of engagement through quarterly results
presentations and 1-1 meetings with our largest investors.
– The Chairman, Group CEO, and other non-executive
directors represented the Board at three virtual shareholder
events with private shareholders.
– The Chairman and a number of non-executive directors
hosted a corporate governance forum for investors.
– Progress against strategic priorities, financial performance,
capital return policy, environmental, social and governance
topics, regulation and the macroeconomic environment.
– As above, plus a discussion around dividends and share
price performance, supporting enterprise and tackling
climate change.
– Board succession planning, diversity and inclusion, key
areas of Board focus, ‘Say on Climate’ resolutions.
– The Chairman, Group CEO and Group CFO have an open dialogue
with institutional investors, updating investors on progress and keeping
the Board informed about their views and priorities throughout the year.
– Private shareholders also had the opportunity to raise any concerns directly
with Board members at our virtual shareholder events.
– Investors received an update on key corporate governance topics and the
Board heard their views on evolving practice for Say on Climate resolutions.
Regulators – who we seek to comply with
– We engaged in several regulatory consultations. – Alternative risk-free reference rates (to replace LIBOR).
– Credit risk.
– Cybersecurity.
– Historical conduct issues.
– Access to cash.
– COVID-19 support measures and recovery.
– Environmental, Social and Governance issues.
– We sent bilateral responses to material consultations or other requests for
comment/input issued by various government, regulatory and standard setting
bodies during 2021.
– We engaged with regulators during the policy proposal phase on several
occasions to help inform priorities – examples included the independent review
of ring-fencing and proprietary trading and the FCA’s proposals for a new
consumer duty.
In December 2021, NatWest Bank Plc
was fined £264.8 million by the FCA for
three breaches of the Money Laundering
Regulations 2007. We deeply regret that
we failed to adequately monitor one of
our customers between 2012 and 2016
for the purpose of preventing money
laundering. We cooperated fully with
the FCA’s investigation. As part of its
ongoing programme of investment in
its people, processes and technology,
NatWest Group’s financial plans
already include over £1 billion to
further strengthen financial crime
controls over the next five years.
– Prudential Regulation Authority (PRA) attendance at
July 2021 Board meeting.
– Non-executive directors engaged with regulators through
continuous assessment and proactive engagement meetings.
– PRA periodic summary meeting (PSM) outputs.
– Topics included strategy, financial performance, capital
distributions, Board and Committee priorities, Board
effectiveness, governance, risk and control environment,
financial crime and ring-fenced bank independence.
– The Board were able to hear directly from the PRA on the key messages in the
PRA’s PSM letter, including regulator expectations for key areas of Board focus.
– Engagement meetings allowed the directors to understand the regulators’ key
areas of interest and provide them with direct feedback on those topics.
17NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our strategy
A strategy to deliver our purpose,
driving sustainable returns
Supporting customers at
every stage of their lives
Powered by innovation
and partnerships
Simple to deal with
Sharpened capital allocation
– We acquired fintech company RoosterMoney,
whose pocket money app aims to build money
confidence and financial capability from an
early age.
– We delivered £2.2 billion of gross lending to
small and medium-sized businesses in 2021
and processed 1 in 4 UK payments.
– In Retail Banking, we have completed £728
million of Green Mortgages since their launch
in Q4 2020, rewarding customers for choosing
an energy efficient home.
– We made it easier for our customers to
understand their financial health, by providing
c.1 million financial health checks during 2021.
– Around £3 billion in investment continues to be
made (over 2021–2023), of which c.80% relates
to digital and technology programmes.
– As the first major bank to join forces with
a renewable energy supplier through our
collaboration with Octopus Energy, we offer our
retail, business and wealth customers a tailored
package that improves the cost and efficiency
of owning and running an electric vehicle.
– Collaborating with the fintech firm CoGo,
we were the first bank to introduce a carbon-
tracking feature in our mobile banking app.
– We established the Sustainable Homes and
Buildings Coalition with British Gas, Worcester
Bosch and Shelter to improve the energy
efficiency of buildings in the UK.
– 87% of our retail customer needs are now
met digitally, with 60% of our customers banking
exclusively digitally.
(1)
– There were 10,200 video banker conversations
per week in 2021 across Retail Banking,
compared with 3,300 per week in 2020.
– In 2021, Cora, our AI virtual assistant,
handled 10.7 million Retail Banking
conversations, up 27% on the previous year.
– Following our investments to improve customer
journeys, 70% of digitalised new account
openings in Retail Banking were completed
without human intervention in 2021; this
compares with 45% in 2020.
– The NatWest Markets’ refocus has made
substantial progress in 2021; risk-weighted
assets reduced from £38 billion in 2019 to
£24 billion in 2021.
– We have made good progress on our phased
withdrawal from the Republic of Ireland and
expect the majority of the Allied Irish Banks p.l.c.
(AIB) and Permanent TSB p.l.c. (PTSB) asset
sales to be largely complete by the end of 2022
and deposits to reduce over a longer timescale.
– £3.8 billion shareholder distributions were
announced for the financial year 2021.
– We completed £17.5 billion in Climate and
Sustainable Funding and Financing in 2021,
including £8.1 billion contribution towards
our £100 billion target.
(2)
Outcomes
We are more relevant to our customers by building
deeper relationships and evolving our propositions
to meet more of their needs throughout their lives.
Through technology and digital expertise, we
deliver an excellent customer experience by
harnessing our internal knowledge and experience
of partnering with leading external organisations
around the world.
By being simple to deal with we improve both
customer experiences and colleague engagement.
We focus on great customer service technology
and improving customer journeys.
Effective deployment of capital and efficient
portfolio discipline helps manage risk and drives
sustainable returns.
Our execution is centred around our purpose, driving sustainable growth
through our strategic priorities. We are a relationship bank for a digital world,
building ever-deeper and closer connections with our customers throughout
their financial lives, enabling people, families and businesses to thrive.
18 NatWest Group 2021 Annual Report and Accounts

Supporting customers at
every stage of their lives
Powered by innovation
and partnerships
Simple to deal with
Sharpened capital allocation
– We acquired fintech company RoosterMoney,
whose pocket money app aims to build money
confidence and financial capability from an
early age.
– We delivered £2.2 billion of gross lending to
small and medium-sized businesses in 2021
and processed 1 in 4 UK payments.
– In Retail Banking, we have completed £728
million of Green Mortgages since their launch
in Q4 2020, rewarding customers for choosing
an energy efficient home.
– We made it easier for our customers to
understand their financial health, by providing
c.1 million financial health checks during 2021.
– Around £3 billion in investment continues to be
made (over 2021–2023), of which c.80% relates
to digital and technology programmes.
– As the first major bank to join forces with
a renewable energy supplier through our
collaboration with Octopus Energy, we offer our
retail, business and wealth customers a tailored
package that improves the cost and efficiency
of owning and running an electric vehicle.
– Collaborating with the fintech firm CoGo,
we were the first bank to introduce a carbon-
tracking feature in our mobile banking app.
– We established the Sustainable Homes and
Buildings Coalition with British Gas, Worcester
Bosch and Shelter to improve the energy
efficiency of buildings in the UK.
– 87% of our retail customer needs are now
met digitally, with 60% of our customers banking
exclusively digitally.
(1)
– There were 10,200 video banker conversations
per week in 2021 across Retail Banking,
compared with 3,300 per week in 2020.
– In 2021, Cora, our AI virtual assistant,
handled 10.7 million Retail Banking
conversations, up 27% on the previous year.
– Following our investments to improve customer
journeys, 70% of digitalised new account
openings in Retail Banking were completed
without human intervention in 2021; this
compares with 45% in 2020.
– The NatWest Markets’ refocus has made
substantial progress in 2021; risk-weighted
assets reduced from £38 billion in 2019 to
£24 billion in 2021.
– We have made good progress on our phased
withdrawal from the Republic of Ireland and
expect the majority of the Allied Irish Banks p.l.c.
(AIB) and Permanent TSB p.l.c. (PTSB) asset
sales to be largely complete by the end of 2022
and deposits to reduce over a longer timescale.
– £3.8 billion shareholder distributions were
announced for the financial year 2021.
– We completed £17.5 billion in Climate and
Sustainable Funding and Financing in 2021,
including £8.1 billion contribution towards
our £100 billion target.
(2)
Outcomes
We are more relevant to our customers by building
deeper relationships and evolving our propositions
to meet more of their needs throughout their lives.
Through technology and digital expertise, we
deliver an excellent customer experience by
harnessing our internal knowledge and experience
of partnering with leading external organisations
around the world.
By being simple to deal with we improve both
customer experiences and colleague engagement.
We focus on great customer service technology
and improving customer journeys.
Effective deployment of capital and efficient
portfolio discipline helps manage risk and drives
sustainable returns.
(2) In October 2021, having surpassed our previous 2020-21 £20 billion target during
H1 2021, NatWest Group announced an ambition to provide £100 billion climate
and sustainable funding and financing between 1 July 2021 and the end of 2025.
(1) Retail Banking current account customers only based as at 31 December 2021 –
metric is 87% of our retail customer needs are now met digitally, with 60% of our
customers banking entirely digitally. Only activity in the last quarter is considered.
19NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our strategy in action
We’re always here to help our customers
when they need us.
So, when Nathalie decided to pursue her goal of buying a car to give her
more flexibility when travelling, we were ready to support.
It was late afternoon on a Friday when Nathalie got in touch with us. She’d
wanted a car for a long time and was unsure on how to go about it, but a
prompt on her NatWest mobile app about a personal loan offer was the
encouragement she needed to drive ahead with her plans.
Nathalie booked a video call with us using her mobile app and was
speaking to one of our team within 15 minutes. We made the process
simple and easy for Nathalie, taking her through the loan application and
also identifying that Nathalie would benefit from a savings account.
By 6pm that evening, Nathalie had the loan money in her account, giving
her the financial support she needed to buy a car. We’re passionate about
getting to know our customers and supporting them with all their banking
needs, whether we’re helping them in-person in a branch, or through one
of our innovative digital channels like video banking.
We think the help we gave to Nathalie is a great example of NatWest
Group’s determination to build deeper relationships with our customers
and support them to achieve their different goals in life.
Supporting
customers
at every stage
of their lives
Watch the story online
“We’re passionate
about getting to
know our
customers and
supporting them
with all their
banking needs”
20 NatWest Group 2021 Annual Report and Accounts20 NatWest Group 2021 Annual Report and Accounts

Paul French,
Senior Personal Banker,
NatWest Torquay Branch
21NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our strategy in action
Vernon is passionate about brewing,
and sustainability.
His company, Wye Valley Brewery in Herefordshire, has grown
from humble beginnings to now distributing to over 1,200 pubs,
as well as selling to all the major supermarkets.
And as the business’s operations have expanded over the years,
so have its sustainability ambitions. Reducing its carbon footprint has
been a key priority. The company had already installed over 1,000
solar panels, producing around 280 kilowatts of electricity, but it
also wanted to make the switch to all-electric vehicles.
For Vernon, investing in sustainable and innovative technology is
key to the long-term success of his business. And this is exactly
where NatWest was able to help.
When Vernon mentioned his plans to the NatWest relationship manager,
we were able to tell him of our collaboration with Octopus Energy.
Through our collaboration – the first time a major bank and a renewable
energy supplier have joined forces – we offer our retail, business and
wealth customers a tailored package that improves the cost and efficiency
of owning and running an electric vehicle.
The brewery now has eight charging points which the staff can use
and are also open to the public. Vernon believes it has made a real
difference in his company’s shift to electric vehicles.
With our focus on partnerships and innovation, NatWest Group is making
it easier and more affordable for our customers to make a positive
difference to our environment.
Powered by innovation
and partnerships
Watch the story online
“With our focus
on partnerships
and innovation,
NatWest is making
it easier and more
affordable for our
customers to
make a positive
difference to our
environment.”
22 NatWest Group 2021 Annual Report and Accounts

Vernon Amor,
Managing Director,
Wye Valley Brewery
23NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our strategy in action
Mica Johnson,
Owner,
Floral Glory
24 NatWest Group 2021 Annual Report and Accounts

Mica had always dreamed of running
her own business.
Indulging her passion for flowers, she launched Walsall-based
florist Floral Glory. However, a month after she went self-employed,
the pandemic struck.
Being a start-up company can be hard enough at the best of times.
But trying to connect with suppliers and customers during a national
lockdown was a real challenge. Mica needed all the support she
could get.
As a long-standing personal banking customer, she knew NatWest
was simple to deal with. So she reached out to our business banking
team for help with setting up Floral Glory’s payments system.
Running her business from home initially meant that transactions
needed to work across virtual and physical platforms. Tyl by NatWest
provided the solution.
It allowed Mica to accept online payments securely through her
website or by phone. The next-day business settlement also really
helped in the early days when cash flow was so important.
After the lockdown, when Mica moved into her premises, Tyl once
again helped her keep things simple. The portable card machine was
ideal for moving around the shop, while each payment integrated
straight into her accounting software.
Mica’s story shows how NatWest is here to help.
By combining the right products and being simple to deal with,
we make life easier for our customers.
Simple
to deal with
Watch the story online
“By combining the
right products and
being simple to
deal with, we
make life easier
for our customers.”
25NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our strategy in action
Lightsource bp,
solar array
26 NatWest Group 2021 Annual Report and Accounts

The team at Lightsource bp believe
there’s huge potential in the transition
to a net-zero economy.
They should know. As a global leader in the development and
management of solar energy projects, they’ve seen the market
for renewables grow sharply over the past decade.
But accessing that opportunity has required hard work, innovation
and, of course, the financing to make it happen.
NatWest Group has supported Lightsource bp throughout its journey
from a UK start-up 10 years ago, to its emergence as a major renewable
energy firm.
The company now employs 700 industry specialists working across
17 countries to help deliver affordable and sustainable solar power
for businesses and communities around the world.
For us, our work with Lightsource bp aligns perfectly with our
purpose and climate ambitions. We know the financial sector is a
key enabler in the drive towards net-zero emissions, but it’s more than
that. As well as being good for the environment, it’s also good business.
It’s a belief we have committed to with our announcement in 2021
to provide an additional £100 billion of Climate and Sustainable Funding
and Financing by the end of 2025.
And we’re continuing our journey with Lightsource bp too – agreeing
in 2021 to be part of the funding package for the company’s ambitious
new growth strategy.
We believe focusing the allocation of capital in this way makes perfect
sense. It’s good for our business, the companies we support, and our planet.
Sharpened
capital allocation
Watch the story online
“Focusing the
allocation of
capital in this way
makes perfect
sense. It’s good
for our business,
the companies
we support, and
our planet”
27NatWest Group 2021 Annual Report and Accounts
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2021
289.7
310.8
317.3
2020 2019
2021
310
277
256
2020 2019
20211 Jan
2022
16.2
18.5
18.2
15.9
2020 2019
2021
9.4
(2.4)
9.4
2020 2019
Financial
Measuring
our performance
Key performance indicators
£m % %
Achieve net lending growth in
our UK and RBSI retail and
commercial businesses.
Achieve a c.4% cost reduction in
other expenses excluding OLD
and Ulster Bank RoI direct costs
in 2021.
Achieve CET1 ratio target of
13-14% by 2023.
Achieve return on tangible
equity target of 9-10% by 2023.
Net lending Cost reduction CET1 ratio Return on tangible
equity
Across the UK and RBSI retail
and commercial businesses and
excluding UK Government support
schemes, net lending increased by
£7.8 billion, or 2.6% largely driven
by mortgages. Mortgage growth
exceeded the market, however
commercial lending was behind
market as we have sought to
reduce certain exposures, through
targeted sector reductions and
capital actions, whilst continuing
to focus on supporting customers
through sustainable lending.
A cost reduction of £256 million,
or 4.0%, in 2021, in line with our
target for the year.
This has been achieved by
transformation across our
customer journeys and in the
NatWest Markets business.
The CET1 ratio remains strong
at 18.2%. The 30 basis points
reduction in the year principally
reflects capital distributions,
partially offset by the reduction in
RWAs and the attributable profit.
RWAs of £157.0 billion reduced
by £13.3 billion in 2021 mainly
reflecting business movements in
Commercial Banking, including
targeted sector reductions,
improvement in risk parameters
and active capital management.
Return on tangible equity
which was 9.4% at year end,
benefitted from significant
impairment releases.
Supporting customers at
every stage of their lives.
Simple to deal with.
Powered by innovation
and partnerships.
Sharpened capital
allocation.
Sharpened capital
allocation.
Supporting customers at
every stage of their lives.
Simple to deal with.
In 2022 we expect income
excluding notable items to be
above £11.0 billion in the
Go-forward group.
In both 2022 and 2023 reduce
Go-forward operating expenses,
excluding litigation and conduct
costs by around 3%.
Aim to end 2022 with a CET1
ratio of around 14% and target
a ratio of 13-14% by 2023.
In 2023, we expect to achieve
a return on tangible equity of
comfortably above 10% for
the Group.
Link to remuneration
Read more on how the KPIs are aligned to executive directors’ remuneration in our Annual remuneration report on pages 158 to 174.
Why is it important?
Delivering long-term sustainable performance.
Run a safe and secure bank.
Our performance
Link to strategy and areas of focus
How we measure our progress and our future priorities
Future priorities
Read more: Our investment case on page 8 and Outlook statement on page 51
£bn
28 NatWest Group 2021 Annual Report and Accounts

2021
13
7
4
-2 -2 -7
22
24
23
2020 2019
2021
12.0
9.48.1
2020
2021
c.60,700
2020
c.55,000
2021
79
80 80
2020 2019
£bn
Increase the likelihood that
customers will recommend our
brands. Achieve NPS targets
for our core customer-facing
businesses.
Net Promoter Score
NatWest Retail main bank NPS
exceeded its target by five points,
up six points year on year.
NatWest Business Banking
missed its target by two points
and continues to be ranked 3rd.
NatWest Commercial Banking
retained first position and its
lead over next best competitor.
Simple to deal with.
NPS improvement of: one point
for NatWest Retail Main Bank or
be 5th or better; four points for
NatWest Business Banking and
be 3rd or better.
Read more: Our customers on
page 54 to 56.
Why is it important?
Link to strategy and areas of focus
Future priorities
How we measure our progress
Our performance
Honest and fair with customers
and suppliers.
Support removal of barriers to
UK enterprise growth through
the provision of learning,
networking and funding
interventions.
Achieve the culture target,
as measured through the
NatWest Group ‘Our View’
colleague survey.
Provide an additional £100 billion
of Climate and Sustainable
Funding and Financing from
1 July 2021 – end 2025.
Non-financial
Climate and Sustainable
Funding and Financing
Supporting enterprise Build up and strengthen
a healthy culture
We have supported c.55,000
(1)
individuals or businesses through
enterprise programmes with
c.200,000
(1)
customer interventions
delivered. Of those supported,
c.26% were from Black Asian and
Minority Ethnic backgrounds
c.60% identified as female.
c.52% were purpose-led.
c.75% were outside of London and
the South East.
In 2021 we exceeded our target
on Culture by two points. Our
target was to be seven points
above the Financial Services
Culture Board (FSCB) norm.
For Culture measurement and
assessment, our calculation
methodology aligns with that
used by the FSCB.
In October 2021 having
surpassed our 2020-2021 target
of £20 billion in the first half of
2021 we announced an ambition
to provide an additional £100
billion between 1 July 2021
and the end of 2025. In 2021
we provided £17.5 billion of
Climate and Sustainable
Funding and Financing
(*)
,
including £8.1 billion
(*)
contribution to our
£100 billion target.
Support 35,000 businesses
through enterprise
programmes
(*)
with 200,000
customer interactions to start,
run and grow a business.
We independently survey
thousands of customers each
year, asking them how likely
they would be to recommend
the bank.
Funding and financing
provided to support climate and
sustainable activities, in line with
our Climate and Sustainable
Finance Inclusion (CSFI) criteria.
Read more: Our purpose-led
areas of focus on pages 30 and
31 and in our ESG Supplement.
Read more: Our colleagues
section on pages 58 to 61
and in our ESG Supplement.
Read more: Our climate-related
disclosures on pages 64 to 71
and in our Climate-related
Disclosures Report.
A good citizen.
Remove barriers to
UK enterprise growth.
A responsible and
responsive employer.
Build up and strengthen
a healthy culture.
A guardian for future
generations.
To be a leading bank in
the UK helping to address
the climate challenge.
Climate
Enterprise
Learning
(*) Within the scope of EY assurance. Refer to page 78.
(1) Refer to page 31 for further details.
29NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Our purpose-led areas of focus
building long-term value
Our purpose-led focus areas
Our ambition
Our areas of focus
contribute to UN Sustainable
Development Goals (SDGs):
We are committed to championing potential, helping people, families and
businesses to thrive. Aligned to our purpose are three focus areas where we
believe we can make a long-term, meaningful contribution to our customers,
colleagues and communities. These are: climate, enterprise and learning.
Climate
A leading bank in the UK helping to address
the climate challenge
Our targets
Net zero
(1)
by 2050
£100bn
Climate and Sustainable Funding and Financing between 1 July 2021 and the end
of 2025
-50%
at least halve the climate impact of our financing activity by 2030
50%
of our UK mortgage customers’ homes at, or above, EPC C rating by 2030
Full phase out of coal – by 1 January 2030
(2)
-50%
reduce our direct
(3)
own operations carbon footprint by 2025
As well as highlighting
activity that relates to each
of the SDGs above, case
studies throughout this
report will reference positive
impacts mapped against
other SDGs. More detail
on our embedding of SDGs
can be found in our ESG
Supplement. As signatories
of the UN Principles for
Responsible Banking, we
also remain committed to
aligning our strategy with
the 2015 Paris Agreement
and the SDGs.
(1) Please refer to section 1.2 in the
NatWest Group plc Climate-related
Disclosures Report for further detail
on our net-zero ambitions.
(2) Please refer to section 3.5.2 in the
Natwest Group plc Climate-related
Disclosures Report for further details
on outcomes.
(3) Against a 2019 baseline. Direct own
operations is defined as Scope 1,
Scope 2 and Scope 3 (paper, water,
waste, business travel, commuting
and work from home) emissions. It
excludes upstream and downstream
emissions from our value chain.
(4) In October 2021, having surpassed
our previous 2020-21 £20 billion
target during H1 2021, NatWest
Group announced an ambition to
provide an additional £100 billion
Climate and Sustainable Funding
and Financing between 1 July 2021
and the end of 2025.
Enterprise
Removing the barriers to enterprise
Our targets
35,000
individuals or businesses supported through enterprise programmes in 2021
(8)
200,000
interventions delivered to start, run or grow a business in 2021
(8)
60%
of those supported will be female
75%
of those supported will be based outside London and the South East
20%
of those supported will be of a Black, Asian and/or Minority Ethnic background
10%
of those supported will be social purpose-led
Learning
Building financial capability and resilience and enhancing the skills of
our colleagues
Our targets
15m
financial capability interactions delivered by 2023
2m
additional customers helped to start saving by 2023
100%
front-line colleagues professionally accredited within the first 18 months in role
UK
Social Mobility Apprenticeship Programme extended across multiple UK locations
30 NatWest Group 2021 Annual Report and Accounts

Our 2021 performance
£17.5bn
(*)
Climate and Sustainable
Funding and Financing
completed, including £8.1bn
contribution towards our
£100bn target
(4)
2020: £12 bn
£728m
(*)
Retail Banking Green
Mortgage completions
(7)
38%
(*)
of Retail Banking mortgages
are at, or above, EPC rating C
(5)
2020: 36%
52%
of gross lending and investment
balances at 31 December 2019
estimated for financed emissions.
A further eight high carbon
emitting sectors estimated
2020: 45% (four sectors)
-46%
reduction in our
direct
(3)
own operational
carbon footprint
(3)
Credible
transition plan
assessments
completed for oil and gas majors
and in scope coal customers
(2)
Climate
Read more on page 20 of
NatWest Group plc 2021
Environmental, Social and
Governance Supplement
(5) Percentage of £110.3 billion UK Retail Banking mortgages where EPC data is available. 2020 comparative for England and Wales
mortgages only.
(6) Retail Banking RBS, NatWest and Ulster Bank Northern Ireland mobile apps.
(7) Retail Banking Green Mortgage products relate only to mortgages for energy efficient homes (EPC A or B rated) and are aligned to
the World Green Building Council definition of green mortgages.
(8) Represents approximate number of interventions delivered by and individuals supported through enterprise programmes during 2021,
which is based upon data provided by third parties delivering these interventions without further independent verification by
NatWest Group.
(9) Includes instances where customers had savings with other banks and transferred them to their NatWest Group account.
(*) Within the scope of EY assurance. Refer to page 78.
Read more on page 24 of
NatWest Group plc 2021
Environmental, Social and
Governance Supplement
c.55,000
individuals and businesses
supported through enterprise
programmes in 2021
(8)
c.75%
of those supported were based
outside of London and the
South East
c.200,000
interventions delivered to start,
run or grow a business in 2021
(8)
c.52%
individuals or businesses
supported were
purpose-led businesses
c.60%
of those supported identified as
female purpose-led businesses
c.26%
of those supported were of
Black, Asian and Minority
Ethnic background
Enterprise
Read more on page 29 of
NatWest group plc 2021
Environmental, Social and
Governance supplement
8.96m
(*)
financial capability interactions
delivered by 31 December 2021
against the 2023 target
1.07m
(*)
additional customers helped
to start saving by 31 December
2021 against the 2023 target
(9)
99.6%
front-line colleagues
professionally accredited within
the first 18 months in role
Learning
31NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Customers
Overview
Customers’ needs and behaviours are changing as a result of
new technologies. The impact of COVID-19 has accelerated
digital trends as well as prompting different ways of working,
shopping, socialising and communicating. Demographic shifts
and changing labour patterns are also having a profound
long-term effect on customer behaviours, as people work
longer, retire later, rent for longer or buy property later in life.
Our response
Understanding these trends allows us to better support our
customers’ needs, being there at every stage of their lives
and tailoring banking services and products that meet their
evolving expectations. By harnessing new technology and
partnering with leading organisations, we have again
enhanced and evolved our customer experiences in 2021.
We have also continued our efforts to make banking more
accessible for all of our customers through improving face-to-
face, digital and remote interactions. And in 2021, we again
devoted significant focus to supporting customers facing
financial difficulty or in vulnerable situations, as well as
helping more people to start saving.
Technology
Overview
New business models and customer behaviours continue to
rapidly evolve through advancing technology. COVID-19 has
increased our customers’ reliance on technology with a further
shift to digital, reinforcing the need for modern capabilities and
resilient systems. Our active digital users across both personal
and business customers continued to grow in 2021.
Our response
With a focus on innovation, and through collaborations
with experienced companies, our technology solutions have
driven significant benefits for our customers. This has been
particularly evident again in 2021 with our approach to Open
Banking. Leveraging the ability to combine transaction and
bank issuance data has helped us generate invaluable insights
for our commercial customers. In terms of our own digital
estate in 2021, we have also delivered further technological
innovation to help protect privacy and customer confidentiality.
In addition to the strong focus on delivering innovative
solutions for our customers, technology transformation
continues to prioritise simplification, stability and resilience,
as well as year-on-year run-cost reduction.
The environment we operate in is constantly changing. Understanding
the multiple influences on our business enables us to be prepared for change,
to respond quickly, and to create value for the long term.
NatWest Group continues
to adapt to evolving market trends
Economy
Overview
In 2021, the UK economy continued its recovery from the
impact of COVID-19 and lockdown restrictions, with GDP
approaching pre-pandemic levels towards the end of the year.
The employment market continued to remain robust, with the
furlough scheme proving an effective tool to lessen the impact
of COVID-19 as well as helping the labour market emerge from
COVID-19 in a position of strength. Towards the end of 2021,
UK job vacancies remained elevated. Against this backdrop,
inflationary pressure began to build with the Consumer Prices
Index ending the year well ahead of the Bank of England’s 2%
target. Countering inflation is therefore likely to remain high on
the agenda for policy makers in the short to medium term. In
the longer term, demographic change, climate change, high
levels of debt and inequality could all have financial impacts
for our customers.
Our response
Our business performance is correlated with economic factors.
Put simply, when people, families and businesses thrive, so
do we. We know the tough economic conditions many of our
customers have faced throughout the year. As such, we have
remained focused on removing barriers to doing business and
providing more opportunities for companies to grow, helping
the economy to build back better. Initiatives such as our
‘Accelerator’ programme, our ‘Springboard to Sustainable
Recovery’ report, and an additional £1 billion in funding to
help support female-led businesses in the UK recover from
COVID-19 have been a key part of this.
Market environment
“COVID-19 has increased
our customers’ reliance
on technology with a
further shift to digital,
reinforcing the need
for modern capabilities
and resilient systems.”
32 NatWest Group 2021 Annual Report and Accounts

Cyber threats
Overview
Cyberattacks pose a constant risk to our operations, both in
relation to our own digital estate and indirectly with regards
to our supply chain. Cybercrime continues to evolve rapidly.
Attacks may be from individuals or highly organised criminal
groups intent on stealing money or sensitive data, or potentially
holding organisations to ransom.
Our response
We continue to invest significant resources in the development
and evolution of cybersecurity controls, deploy rigorous due
diligence with regards to third parties and work to protect and
educate our colleagues and customers on fraud and scam
activity. To provide continuity of service for customers with
minimal disruption, we monitor and assess a diverse and
evolving array of threats, both external and internal, as well
as developing, strengthening or adapting existing control
capability to be able to absorb and adapt to such disruptions.
Climate change
Overview
Climate change represents an inherent risk to NatWest
Group, not only from its impact on the global economy and
our customers, but also through its potential effects on asset
values, operational costs and business models as the essential
transition to a net-zero economy accelerates. These risks are
subject to increasing regulatory, political and societal change.
Conversely, the requirement to reduce carbon emissions also
means NatWest Group has a significant role to play in areas
such as the provision of Climate and Sustainable Funding
and Financing.
Our response
Climate risk was formally incorporated into the NatWest Group
risk directory as a principal risk in February 2021 and in April
2021, NatWest Group Board Risk Committee approved a
principles-based climate risk policy. Our Climate Opportunities
Group (COG) was established to support our ambition to be a
leading bank in helping to address climate change. The COG
brings together colleagues from all business segments to
conceptualise and develop opportunities that complement the
NatWest Group climate ambition. Being a principal partner of
COP26 gave us the opportunity to re-state our commitment
to working with our partners to help reduce carbon emissions.
At the conference in Glasgow, we focused on highlighting the
practical support we are providing our customers to help them
achieve their climate ambitions, as well as strengthening our
existing partnerships and building new ones. Our commitment
to tackling climate change means we have already reduced
our direct own operations footprint by 46%, against a 2019
baseline and plan to achieve a 50% reduction by 2025. We
have also set stretching targets for our wider operational
value chain and have an ambition to halve the impact of
our financing activity by 2030.
Regulation
Overview
We operate in a highly regulated market which continues
to evolve in scope. Areas of current regulatory focus include:
delivering good customer outcomes, in particular the FCA’s
current proposals for a Consumer Duty, which looks to
expand its rules and principles to force firms to provide better
consumer protection; operational resilience, in light of the UK
authorities’ new policy requirements; climate change, and
the development of the regulatory framework for sustainable
finance; fraud and financial crime, with a focus on protecting
customers from ever-more sophisticated scams; capital and
liquidity management, including the UK’s approach to the
implementation of Basel III; the UK’s future regulatory
framework, following its exit from the European Union and
the opportunities that this provides; digital currencies, with
the development of both public (central bank digital currencies)
and private (e.g. stablecoins) offerings which have the potential
to materially change the digital payments landscape; improving
diversity, equity and inclusion in financial services, through
policy developments focused on improved data collection
and reporting, and use of targets for representation.
Our response
We constantly monitor regulatory change and work with our
regulators to help shape those developments that materially
impact the bank, lobbying when necessary either bilaterally
or in partnership with one of our affiliated industry bodies.
We implement new regulatory requirements where applicable
and use our frequent engagement meetings with regulators
to discuss key regulatory priorities.
(1) Since 1 July 2021, UK & Ireland £5.5 billion, Western Europe £1.9 billion and
Other £0.6 billion.
United Kingdom and Ireland
Western Europe
Other
Total:
£17.5bn
£7.8bn
£8.5bn
£1.2bn
NatWest Group 2021 Climate and Sustainable
Funding and Financing – Geographical split
(1)
33NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Purpose-led and integrated value creation
We aim to create value for our
stakeholders, having a positive impact
on our environment and wider society.
Our work lends particular support
to the below seven sustainable
development goals.
Find out more in the following sections:
How we
create value
1
Financial
Human and relationships
NatWest Group was a
principal partner for COP26,
widening the involvement
of the business community,
young people and civil society,
enabling voices to be heard
to help progress be made.
Our business activities
2
Our resources1
How we create value
3
Our resources
Nature
Infrastructure
34 NatWest Group 2021 Annual Report and Accounts

9.4% return on tangible equity, 18.2% CET1 ratio,
£256 million cost reduction and £2,950 million profit
attributable to ordinary shareholders.
We support the financial lives of our customers and
drive economic growth through our well-known brands.
We make appropriate use of shareholder capital and
other forms of financial capital, including £479.8 billion
in customer deposits.
We are committed to sustainability as a driver of value
creation through our investment, products and service.
Financial
We rely on an engaged, healthy and inclusive workforce
of 58,500
(1)
to deliver our strategy to 19 million customers
in the UK.
Our relationships with all stakeholder groups help to shape
and support our strategy and operations. This includes our
shareholders and regulators, suppliers, consumer and
campaign groups, local communities and more.
Human and relationships
Our resources Our business activities
2
(1) NatWest Group headcount for both continuing and discontinued operations at 31 December
2021, based on global data for active permanent colleagues (including FTC and excl. temps).
We understand we are part of the natural world, benefiting
from resources and ecosystem services to conduct our
business activities. We are forming expert partnerships to
restore degraded lands and forests, to support the needs
of local communities and nature, as well as removing
120,000 tonnes of CO
2
e each year.
Nature
We depend on our property and technology infrastructure,
and that of our supply chain, to run the bank’s systems
and operations. We are also investing significantly in
technology and human expertise to deliver a leading
digital customer experience.
Infrastructure
Products and services
We provide a comprehensive range of banking and financial
services to personal, business and commercial customers
via our businesses. Examples include current and savings
accounts, credit cards, mortgages and investments for our
personal customers; as well as banking, lending, project
finance, risk management and trading solutions for our
large commercial customers.
Revenues and returns
We earn income from interest charged on lending to our
customers and fees from transactions and other services.
We pay interest to customers who place deposits with us
and to investors who buy our debt securities. We also make
reward payments on products like our Reward bank accounts
and credit cards. The attributable profit generated is either
returned to shareholders or retained and reinvested into
improving our business to benefit our stakeholders.
Customer relationships
We support our personal, business, commercial and
institutional customers with financial services that meet their
needs, which include keeping their funds safe and secure,
improving financial capability and supporting enterprise.
We believe in treating customers fairly, offering flexibility
to our customers in how they choose to bank with us and
providing extra help to customers in vulnerable situations
or financial difficulty.
Partners and networks
Being powered by innovation and partnerships means
we work with a diverse range of partners to help shape our
business strategy and deliver positive outcomes for customers
and society. This includes our supply chain, communities,
academia, regulators, expert advisers, consumer groups and
charities, as well as strategic partners. We are also members
of, or signatories to, a large number of organisations, trade
bodies and frameworks that help us create long-term value
and balance the interests of stakeholders.
35NatWest Group 2021 Annual Report and Accounts
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3
How we create value for our customers and society
Supporting enterprise
Creating opportunities for
businesses and enterprise
£34.6 billion
gross lending to SMEs and mid-corporates in Commercial Banking,
supporting economic growth.
£1 billion
additional funding made available to support female-led businesses
in the UK to recover from the disruption caused by COVID-19.
Building financial
capability
Helping people make
better financial decisions
470,813
(*)
additional customers helped to start to save and 6.1 million
(*)
financial
capability interactions delivered in 2021.
10 million
MoneySense has helped 10 million young people learn about
money since it was launched in 1994.
Helping to address the
climate challenge
Taking action on the risks and
opportunities of climate change
£17.5 billion
(*)
Climate and Sustainable Funding and Financing completed, including
£8.1 billion contribution towards our £100 billion target.
(1)
38%
(*)
of Retail Banking mortgages are at or above EPC rating C.
(2)
Jobs and the economy
Supporting employment across
the UK
Early career
We hired over 1,000 interns, graduates and apprentices in 2021
including 205 colleagues who have been recruited through our social
mobility apprentice programmes.
£1.73 billion
Payment of £1.73 billion in tax was made to the UK
Government in 2021 which supported central government
and local authority spending.
(3)
Protecting our
customers
Keeping money safe and
accessible for our customers
£193.3 million
(*)
We prevented 542,969 cases of attempted fraud against our customers,
amounting to over £193.3 million in the UK.
159 hotline
We are one of the original pilot organisations behind the
new ‘159’ fraud reporting hotline, launched in 2021.
Improving digital
capability
Offering customers more choice
and ways to bank
9.7 million
(*)
active digital customers. 8.3 million actively use our mobile app
and 4.2 million use our online banking platform.
60%
(*)
of our active current accounts are customers exclusively
banking with us using digital channels through mobile or online.
Community and
charitable giving
Making a difference in our
local communities
32,235 trees
planted by colleagues, in our new tree planting programme with
The Conservation Volunteers.
43,003 hours
were volunteered by our colleagues to local communities and good
causes received over £3.5 million through their giving and fundraising.
Helping our colleagues
to thrive
Building a great place to work
that reflects the society we are
proud to serve
Our integrated wellbeing strategy allows us to support colleagues,
customers and communities, and is a key part of NatWest Group
being a purpose-led organisation.
+14 points
Colleague sentiment on inclusivity has continued to increase in 2021,
now reaching a score of 93 percentage points. We are 14 percentage
points above the Global Financial Services Norm and 10 percentage
points above the Global High Performing Norm.
Homes and housing
Helping more people access
efficient homes
£728 million
(*)
Retail Banking Green Mortgage
completions.
(4)
Over 48,000
We have supported more than
48,000 customers with first-time mortgages.
(*)
262,000
customers were helped with mortgage
payment holidays between 2020 and 2021
due to the challenges caused by COVID-19.
Supporting customers at
every stage of their lives
Simple to
deal with
Sharpened
capital allocation
Powered by innovation and
partnerships
Purpose-led and integrated value creation continued
36 NatWest Group 2021 Annual Report and Accounts

How we create value for our customers and society
Supporting enterprise
Creating opportunities for
businesses and enterprise
£34.6 billion
gross lending to SMEs and mid-corporates in Commercial Banking,
supporting economic growth.
£1 billion
additional funding made available to support female-led businesses
in the UK to recover from the disruption caused by COVID-19.
Building financial
capability
Helping people make
better financial decisions
470,813
(*)
additional customers helped to start to save and 6.1 million
(*)
financial
capability interactions delivered in 2021.
10 million
MoneySense has helped 10 million young people learn about
money since it was launched in 1994.
Helping to address the
climate challenge
Taking action on the risks and
opportunities of climate change
£17.5 billion
(*)
Climate and Sustainable Funding and Financing completed, including
£8.1 billion contribution towards our £100 billion target.
(1)
38%
(*)
of Retail Banking mortgages are at or above EPC rating C.
(2)
Jobs and the economy
Supporting employment across
the UK
Early career
We hired over 1,000 interns, graduates and apprentices in 2021
including 205 colleagues who have been recruited through our social
mobility apprentice programmes.
£1.73 billion
Payment of £1.73 billion in tax was made to the UK
Government in 2021 which supported central government
and local authority spending.
(3)
Protecting our
customers
Keeping money safe and
accessible for our customers
£193.3 million
(*)
We prevented 542,969 cases of attempted fraud against our customers,
amounting to over £193.3 million in the UK.
159 hotline
We are one of the original pilot organisations behind the
new ‘159’ fraud reporting hotline, launched in 2021.
Improving digital
capability
Offering customers more choice
and ways to bank
9.7 million
(*)
active digital customers. 8.3 million actively use our mobile app
and 4.2 million use our online banking platform.
60%
(*)
of our active current accounts are customers exclusively
banking with us using digital channels through mobile or online.
Community and
charitable giving
Making a difference in our
local communities
32,235 trees
planted by colleagues, in our new tree planting programme with
The Conservation Volunteers.
43,003 hours
were volunteered by our colleagues to local communities and good
causes received over £3.5 million through their giving and fundraising.
Helping our colleagues
to thrive
Building a great place to work
that reflects the society we are
proud to serve
Our integrated wellbeing strategy allows us to support colleagues,
customers and communities, and is a key part of NatWest Group
being a purpose-led organisation.
+14 points
Colleague sentiment on inclusivity has continued to increase in 2021,
now reaching a score of 93 percentage points. We are 14 percentage
points above the Global Financial Services Norm and 10 percentage
points above the Global High Performing Norm.
Homes and housing
Helping more people access
efficient homes
£728 million
(*)
Retail Banking Green Mortgage
completions.
(4)
Over 48,000
We have supported more than
48,000 customers with first-time mortgages.
(*)
262,000
customers were helped with mortgage
payment holidays between 2020 and 2021
due to the challenges caused by COVID-19.
Examples of how we create value
(*) Within the scope of EY assurance. Refer to page 78.
(1) In October 2021, having surpassed our previous 2020-21 £20 billion target during
H1 2021, NatWest Group announced an ambition to provide £100 billion climate
and sustainable funding and financing between 1 July 2021 and the end of 2025.
(2) Percentage of £110.3 billion UK Retail Banking mortgages where EPC data is available.
2020 comparative for England and Wales mortgages only.
(3) Comprises £787 million corporate tax, £473 million irrecoverable VAT, £126 million bank
levies, £257 million employer payroll taxes and £88 million other taxes.
(4) Retail Banking Green Mortgage products relate only to mortgages for energy efficient
homes (EPC A or B rated) and are aligned to the World Green Building Council definition
of green mortgages, which has Pioneer status with the Green Home Finance Principles
established by the Green Finance Institute.
37NatWest Group 2021 Annual Report and Accounts
Strategic report
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Building a purpose-led bank
Our business
performance
Retail Banking
Through the NatWest and Royal Bank of Scotland brands
we provide a comprehensive range of banking products
and related financial services including current accounts,
mortgages, personal unsecured lending and personal deposits.
We’re here for customers whenever and wherever they need
us – from our mobile app and online banking, through to our
contact centres and high street and mobile branches.
Commercial Banking
We offer comprehensive banking and financing solutions
to start-up, SME, commercial, corporate and institutional
customers in the UK. We’re there for our customers as they
start, grow and manage their businesses. Our innovative
products and services help customers achieve their growth,
environmental and social targets. We deliver a high-quality
sales and service experience through our expertise and deep
engagement, locally, regionally and nationally through face-to-
face, direct and digital channels. We continue to support our
customers through the Brexit transition period and beyond.
Ulster Bank RoI
Since the end of July 2021 (apart from the UBIDAC asset
finance business which remains fully open), commercial
banking has been closed to new customers, remaining open
for existing customers only. Since the end of October 2021,
we have stopped accepting applications from new personal
customers, but continue to consider applications on a reduced
number of products from existing personal customers, mainly
mortgages. We continue to support our existing customers
pending further decisions on the phased withdrawal.
RBS International
As one of the largest full-service banks operating in the
local and institutional banking sectors in the Channel Islands,
Isle of Man and Gibraltar, we serve international customers
with a UK connection through our International Banking
proposition. We operate under six brands: RBS International;
NatWest International; Isle of Man Bank; Coutts Crown
Dependencies; NatWest Trustee and Depositary Services and
RBS International Depositary Services. We have wholesale
branches and fund depositary services businesses in the UK
and Luxembourg to further serve our institutional clients
and protect investors.
Private Banking
Private Banking is the Investment Centre of Expertise for
NatWest Group, servicing all client segments across Retail,
Premier & Private Banking. We provide private banking and
wealth management services to UK-connected high-net-worth
individuals and their business interests through the Coutts & Co
brand. We continue to focus on delivering the best client
experience through a proactive engagement model which
supports clients across both sides of their balance sheet –
improving returns by deepening client relationships and
enhancing our digital banking capabilities to make it easier
for clients to deal with us.
NatWest Markets
We help NatWest Group’s corporate and institutional
customers manage their financial risks safely and achieve
their short-term and long-term sustainable financial goals.
We think and act as one bank for our customers, collaborating
with teams across NatWest Group to be the partner of choice
for our customers and their financial markets needs. By
focusing on the things we do best and that matter most
to our customers, we help champion their potential.
38 NatWest Group 2021 Annual Report and Accounts

UN Principles for Responsible Banking
We have now been signatories to the UN Principles for
Responsible Banking for over two years. In 2021, we
undertook a portfolio impact analysis using the United
Nations Environment Programme Finance Initiative (UNEP FI)
developed tool, responded to the collective progress survey,
and were active in working groups on financial inclusion and
health, biodiversity, and the collective commitment on climate
action. We remain committed to aligning our strategy with
the UN Sustainable Development Goals and the 2015 Paris
Agreement and our progress against the six principles can
be found in our second self-assessment report included in
our 2021 ESG Supplement.
Human Rights and Modern Slavery
At NatWest Group, we understand that businesses have an
important role to play in promoting respect for human rights.
We seek to act in accordance with the Universal Declaration of
Human Rights and our approach to respecting human rights
is informed by other international standards and principles
including the UN Guiding Principles on Business and Human
Rights (UNGPs). We have established a human rights steering
group, a management group that brings representatives from
across NatWest Group together to coordinate our activities,
and to make recommendations to NatWest Group Executive
Committee and Board to develop and strengthen our approach.
More information can be found at natwestgroup.com.
Tackling modern slavery forms an integral part of our approach
to human rights. We seek to tackle modern slavery and human
trafficking through continued implementation of policies covering
our customers, colleagues and suppliers and by monitoring our
financing and supply chain for this activity. Our full approach is
outlined in our annual Modern Slavery and Human Trafficking
Statement which can be found at natwestgroup.com.
In 2021, we continued to engage with a range of stakeholders in
relation to human rights including charities, Non-Governmental
Organisations (NGOs) and campaign groups to help grow our
knowledge and understanding of these issues. We remained
members of the Thun Group and the UN Global Compact’s
UK Modern Slavery Working Group. We also continued to
work with anti-slavery charity Unseen to support survivors
and raise awareness of modern slavery with colleagues
throughout NatWest Group.
1.
Alignment
4. Stakeholders
2.
Impact & Target
Setting
3.
Clients &
Customers
6.
Transparency &
Accountability
5.
Governance
& Culture
Ways of Working
Re-imagining the workplace
How do you manage a never-before
moment in the world of work?
That was the question we were suddenly
posed with when COVID-19 hit. But as the
pandemic played out, we quickly started to
think beyond immediate operational requirements
to what a new way of working could look like –
considering the needs of over 58,000 colleagues
across a number of jurisdictions.
But we also knew we had a real opportunity to make
the return to the work environment different from
how it had always been: a more flexible design.
Tailored to what mattered most to our colleagues.
To get there, we adopted a robust, data and
experience-led approach. Through extensive
colleague interviews, executive engagement and
external research we started to build a picture of the
new way colleagues would like to work and interact.
Our insights quickly guided us that one size
wouldn’t fit all. And that a ‘Ways of Working’
framework designed around three models was a
flexible and dynamic way to both deliver colleague
choice and better meet customer needs.
Colleague safety, and health and wellbeing were
paramount during roll-out. To ensure this, we knew
that having a range of measures in place – from a
‘Wellbeing Hub’ and ‘Best Practices Zones’, to
working from home guides and mental health
advice – was vital.
We also realised that getting it right would take time.
So we created a feedback loop, gathering colleague
views and adapting our process. For example,
following colleague suggestions we introduced
reorientation events as well as onsite wellbeing
support to help colleagues back into the office.
We’re still on a journey, but it’s one we’re on together.
“Our insights quickly
guided us that one size
wouldn’t fit all”
39NatWest Group 2021 Annual Report and Accounts
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Business performance
Retail
Banking
In Retail Banking, we’re focused on
creating lifelong relationships with our
customers. Whether it’s providing early
financial education, helping them onto
the property ladder or building secure
financial futures, we’re there at every
stage of our customers’ lives. We are
delivering on our strategy to support
building a relationship bank for a digital
world – combining the best people and
the best technology.
By investing in world-class digital experiences which meet the
needs of our customers (from our digital banking app and AI
virtual assistant Cora, to video calling with expert advisers), we
make sure they have 24/7 access to the help and information
they need. Our focused investment in driving deeper-value
exchanges with customers while digitalising more customer
journeys and simplifying our business has resulted in a further
£52 million gross annualised cost reduction, as well as income
growth from a number of products and journeys.
We’re extremely proud of providing 30 years of free early
financial education to children through our MoneySense
programme. And we’re delighted to now evolve this further
through the acquisition of RoosterMoney in October 2021 – a
leading children’s banking app, which builds financial skills in a
fun, accessible way. We are committed to helping more young
customers with their financial capability and have seen a steady
increase in the proportion of young people choosing to bank
with us in 2021 versus pre-pandemic levels.
We have also increased the number of customers who choose
us as their main bank in 2021, reaching our highest-ever score
for customer satisfaction. We are helping all our customers
make the most of their money and achieve their goals, especially
at a time when many are facing financial difficulties. We know
that at every life stage, whether our customers have a short-
or long-term goal, saving needs to be easy and rewarding. Our
Digital Regular Saver account, alongside budgeting and goal
tools, was designed specifically to help first-time savers build
financial resilience.
(1)
We aim to address the savings gap by
helping two million customers start saving by the end of 2023;
since launch we have enabled over one million customers to
start their savings journey, including almost 471,000 in 2021.
We also conducted more than 661,000 financial health checks in
2021, of which over 350,000 were completed via video banking.
We recognise that building secure financial futures begins early
on in our customers’ lives and we are there to support them
from the start. Our digital investing platform, NatWest Invest
and Royal Bank Invest, helps our customers with their long-
term financial plans. By offering digital access to five funds
managed by Coutts, customers can plan for life’s big events
or simply invest towards securing their financial future. Nearly
33,000 retail bank customers started investing through the
platform in 2021.
When our customers are ready to step onto the property
ladder, they’re in safe hands, we have 11.5% flow share of
UK mortgages, we helped more than 48,000 customers to buy
their first home and over 40,000 customers to re-mortgage. Our
continued digitalisation of the mortgage journey means that we
can now offer customers browsing price-comparison websites
a more seamless experience; gaining a decision in principle
upfront without them having to leave the website. Through our
Green Mortgage, which we provided to around 2,900 customers
in 2021, we proactively supported customers to lower their
carbon footprint by offering discounted mortgage rates for
buying more energy efficient homes.
We are also there to support our customers with their short-
term borrowing needs and enable them to achieve their goals
sooner. We have over 3.8 million users of our ‘Know My Credit
Score’ tool, with just under 1.4 million signing up in 2021. This
helps customers better understand their credit options – and
how the decisions they make today, could affect their finances
tomorrow. We launched a new Purchase and Balance
Transfer credit card and grew credit card balances faster
than the market in the second half of the year. Our credit card
customers can also now manage large purchases more easily
by setting up an instalment plan to spread payments between
three and 24 months.
We’re always striving to make banking simpler for our
customers. We now have over eight million customers
regularly using our mobile app, which uses biometric
authentication to make the user experience secure and
convenient and 60% of our customers now interact with us
exclusively via digital channels. We’ve also launched ‘Banking
My Way’ in the app, making it easier for customers to tell us
how we can best support their needs relating to accessibility
or personal circumstances.
(1) Active customers aged 17+ who have saved more than £100 with us for the first
time. Includes instances where customers had existing savings with other banks and
transferred them to their NatWest Group account
Total income
(£m)
4,445
2020: 4,181
Operating expenses
(£m)
(2,513)
2020: (2,540)
Operating
profit
(£m)
1,968
2020: 849
Return on equity
(%)
26.1
2020: 10.2
Net loans to customers
(£bn)
182.2
2020: 172.3
Video banking financial
health checks
350k
2020: 173k
Customers exclusively
using digital channels
(%)
60
2020: 58
Customers helped to
buy their first home
48k
2020: 32k
40 NatWest Group 2021 Annual Report and Accounts

Over the last few years, we have
significantly improved Cora’s capability
and intelligence. In 2021, Cora handled
10.7 million retail banking conversations,
up 27% on the previous year.
The AI virtual assistant also fully
supported 47% of all customer
queries without having to hand
over to a human.
Cora is now able to help customers
by providing personalised responses
to a range of different banking needs,
from providing help on how to access
the mobile app, to updating us when
they move home.
In 2021, for the first time, Cora
began assisting customers over the
phone, allowing the use of natural
conversation to self-serve.
Cora is now a key part of the
bank’s digital and telephony offering,
with a constantly evolving role in
frontline customer support. As well
as improving our service efficiency,
it also enables our colleagues to focus
on more complex customer enquiries.
We will continue to invest in the use
of innovative technologies to make it
easier for our customers to get the
support they require, when and
where it is needed.
For us, this is a vital component
of being a relationship bank for
a digital world.
“The AI virtual
assistant also fully
supported 47%
of all customer
queries without
having to
hand over
to a human.”
Cora supporting our customers
Using AI to provide that personal touch
‘Cora’ is NatWest Group’s customer-facing
AI virtual assistant, helping to provide support
for our customers using both our digital and
telephony channels.
41NatWest Group 2021 Annual Report and Accounts
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Private
Banking
We partner with our clients and their families as their wealth
needs evolve over their lifetime, ensuring that their wealth
has its intended consequences. In 2021, we launched NatWest
Group’s first digital Junior ISA, which so far has enabled over
4,000 clients to start saving for their children’s future more
easily. We continue to develop our digital capabilities and have
seen strong growth in digital sales with over 26% of net new
money now being executed through digital channels. We also
continue to meet the more complex lending and investment
needs of Coutts clients through face-to-face specialist advisers
and we welcomed a 29% increase in new Coutts clients in 2021
compared with 2020.
As a result of our collaboration with global asset manager
BlackRock, Coutts invests in a dedicated range of bespoke funds
managed and administrated by BlackRock on their platform.
Coutts set the investment strategy and ESG policy for the funds
and this relationship provides efficiency benefits for our clients.
We have also increased our ability to influence change at the
companies held within these bespoke funds to drive better ESG
outcomes, engaging with over five times more companies across
the UK, Europe and North America and voting on 79% more
company resolutions in 2021 compared with 2020. Our online
investment product series, Personal Portfolio funds, available
as NatWest Invest, Royal Bank Invest and Coutts Invest grew
significantly and more than doubled from £0.9 billion in 2020
to £1.9 billion in 2021.
Coutts collaborated with BGF Group (BGF) to launch the UK
Enterprise Fund and provide additional growth funding and
support to SMEs across the UK. The fund is co-investing
equity growth capital alongside BGF, taking minority stakes
in businesses looking to scale in the UK, with initiatives to
support female entrepreneurship and promote the diversity
of management teams. In 2021, over 100 clients invested a
combined £42 million and Coutts and BGF intend to launch
a further fund in 2022.
In November, we launched our first full-scale brand and
television campaign to increase awareness and consideration
among a new type of client: younger (35-44), female and
entrepreneurial. The campaign ‘real success takes true
character’, focused on the duality of acting in the right way
being the reason for achieving long-term success and played
into the progress we have made to become a B Corporation
and our responsible investing credentials.
In June, we started to incentivise new and existing clients
to improve the energy efficiency of their homes. We offer
discounted mortgage fees on homes with an A or B EPC ratings
and fee rebates to clients who improve their EPC rating above C
within a year of taking out their mortgage. We continue to grow
our nascent Green Mortgage book and have further plans to
help our clients understand the carbon intensity of their homes.
Coutts has been recognised by the Green Finance Institute as
a Pioneer of the UK Green Home Finance Principles.
We introduced our new Coutts mobile app to a pilot population
with a full roll out planned for 2022. We have introduced
integrated biometrics for enhanced security and easy-to-use
digital features such as first time beneficiary payment
authorisation. In app domestic payments can be completed in
one of the most efficient journeys in the UK market amongst
other notable features. The latest digital tools have enabled
clients to self-serve all disclosures during the onboarding
process, including electronic e-signatures, and enabled us
to send automated fraud alerts via SMS.
(1) Private Banking manages assets under management portfolios on behalf of Retail
Banking and RBSI and receives a management fee in respect of providing this service.
Business performance continued
Private Banking is the Centre of
Expertise for asset management
across NatWest Group, and in 2021 we
continued to see growth in customers
investing with us across our brands
and through various mediums, such as
digital or face-to-face. Coutts provides
our high-net-worth and ultra-high-net-
worth clients with day-to-day banking,
flexible lending and responsible
investments, underpinned by first-class
client service. In July 2021, Coutts
became a Certified B Corporation,
evidencing our commitment to
balance people, profit and the planet.
Total income
(£m)
816
2020: 763
Operating expenses
(£m)
(520)
2020: (455)
Operating profit
(£m)
350
2020: 208
Return on equity
(%)
17.0
2020: 10.3
Net loans to customers
(£bn)
18.4
2020: 17.0
AUMA
(1)
(£bn)
35.6
2020: 32.1
Customer deposits
(£bn)
39.3
2020: 32.4
NatWest Invest/Royal
Bank Invest/Coutts
Invest users
78,890
2020: 44,410
42 NatWest Group 2021 Annual Report and Accounts

It’s a conviction woven deeply
in our history, most notably in the
philanthropic legacy of Angela Burdett-
Coutts, whose family forged the bank.
And now more than ever, we know
we have a responsibility to make a
positive difference to the world we live
in. It’s why – over two years ago – we
made the decision to aim to be part
of the ever-growing community of
Certified B Corporations.
B Corps are a new kind of business.
Ones that balance purpose and profit
– being required to consider the impact
of their decisions on their workers,
customers, suppliers, community
and the environment.
However, the journey to B Corp
certification is understandably long and
rigorous. The external accreditation
took over 18 months and involved
answering around 300 questions on
everything from company governance
and how we care for our colleagues, to
our environmental impact and what we
contribute to the community.
Most meaningfully perhaps, we also
changed our Articles of Association,
enshrining the importance of
considering all stakeholders
in our decision-making.
In July 2021, as a result of these efforts,
Coutts gained the proud distinction of
being a Certified B Corp.
Since then, we have been busy.
Coutts was a founding member of
the ‘B Finance UK Coalition’ which
was launched at COP26, and also
supported B Lab UK’s Boardroom
2030 initiative.
But for us, this is very much just
the beginning.
“For us, this is
very much just
the beginning”
Doing well by doing good
Coutts becomes a Certified B Corp
As a business, we believe we can be
a force for good.
“More than
ever, we know
we have a
responsibility to
make a positive
difference to the
world we live in.”
43NatWest Group 2021 Annual Report and Accounts
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Commercial
Banking
In 2021, we opened over 78,000 accounts for new businesses,
supported c.55,000 individuals and businesses through
c.200,000 interventions; of those supported c.52% were
purpose-led businesses, c.60% identified as female and c.26%
were from Minority Ethnic backgrounds. Further to publishing
our ‘Springboard to Sustainable Recovery’ reports in March
and October, we implemented our SME Task Force across all
our regions to focus on five areas identified with the potential
to create opportunity for SMEs tackling climate change. We
continued our support for customers through Brexit, facilitating
UK imports and exports by onboarding 27 more non-UK
suppliers to Supply Chain Finance programmes and increasing
the proportion of our lending to non-UK suppliers by 50%.
As transaction volumes recovered in the second half of 2021,
our investments in Payit and Tyl led to continued growth in
their respective customer bases. Payit became one of the
largest Open Banking-enabled ‘Payment Initiation Service’
platforms in the UK by volume and Tyl, our point-of-sale
solution for small businesses, processed its 50 millionth
transaction during 2021. Our Confirmation of Payee API also
won the first public tender with HMRC. We collaborated with
NatWest Markets to underwrite 56 new transactions, £6 billion
commitments, and improve onboarding processes enabling
customers to take advantage of our award-winning
corporate FX services.
Our strategy of collaborating with industry leaders to deliver
better customer experiences evolved at pace in 2021 with a
joint offering of charging infrastructure with Octopus, allowing
customers to understand the carbon emissions of their supply
chains and working on The Global Farm Metric with the
Sustainable Food Trust.
We gave 16,000 additional SME customers access to a
relationship manager through the launch of our new direct
relationship manager proposition. We enhanced 32 digital
sales and servicing journeys, enabling our customers to start
and complete more journeys digitally. In 2021, over 60% of
customers’ service requests were initiated digitally and
over two thirds of those were processed with no human
intervention. Our AI virtual assistant, Cora handled over
1.2 million chats, of which more than half required no
human intervention.
We continue to be disciplined in our capital allocation, allowing
us to best support the economy in line with our strategy while
maintaining a resilient balance sheet. In 2021, we embedded
our climate commitments in our capital allocation and pricing-
decision frameworks. Our new sector strategy reflects a
continued rebalancing of our balance sheet towards sectors
aligned to an economic recovery and building a fair transition
to a green economy across the regions. In 2021, we delivered
a £1.5 billion risk-weighted assets (RWA) saving from targeted
sector reductions, significant risk transfers and other active
capital management actions; improving RWA efficiency by
around 1%.
Business performance continued
We pivoted from our leading role
supporting customers with £14.4 billion
of approved government scheme
lending through the COVID-19 crisis
to support UK businesses to grow with
£4 billion of SME-scale funding. We
grew lending in areas where we have
competitive advantage, such as climate
and sustainable funding and financing
where we delivered £5.2 billion of
lending. As a relationship bank for a
digital world, our innovations allow us
to better support our customers across
a growing number of digital channels
while simplifying and automating our
own processes.
Total income
(£m)
3,875
2020: 3,958
Operating expenses
(£m)
(2,354)
2020: (2,430)
Operating
profit/(loss)
(£m)
2,594
2020: (399)
Net loans to customers
(£bn)
101.2
2020: 108.2
Return on equity
(%)
22.0
2020: (4.5)
Tyl payments
processed
(m)
39.3
2020: 13.6
44 NatWest Group 2021 Annual Report and Accounts

“Speed of
arrangement
was crucial.
Working to short
timescales we
were able to
deliver the
contract for
the required
facility quickly.”
It’s why we place so much importance
on championing potential in those early
years. When a business has a clear
commercial opportunity, we want to
help them deliver on their ambitions.
PensionBee is a great example.
A direct-to-consumer financial
technology company and a leading
online pension provider in the UK,
it enables customers to interact with
their retirement savings through
its unique combination of smart
technology and dedicated
customer service.
We assisted PensionBee in March
2021, in the run up to its planned
IPO, with a £10 million revolving credit
facility through our innovative Growth
Capital team. Our support gave the
company that vital element of flexibility
around optimising its capital structure
to protect its cash runway.
Speed of arrangement was crucial.
Working to short timescales we were
able to deliver the contract for the
required facility quickly, providing
PensionBee with fast assurance that
liquidity would be available if needed.
The company is continuing to move
from strength to strength. Having
more than doubled its assets under
administration to £2.25 billion in the year
between September 2020 and 2021, it is
now listed on the High Growth Segment
of the main market of the London Stock
Exchange and has announced its
intention to transition to the Premium
Segment in the first half of 2022.
For us, seeing PensionBee’s success
is massively rewarding. It shows that our
support made a difference – at a time
when it was needed most.
“We want to help
them deliver on
their ambitions”
There when it counts
Championing business potential
We know it’s essential for growing businesses
to get the right kind of support at the right time.
45NatWest Group 2021 Annual Report and Accounts
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RBS
International
We have continued to support our customers through life’s
changing circumstances. We helped our customers grow
their deposits, with over 500 customers (who had either never
saved with us or had previously saved less than £100 with us)
now saving at least £100. We provided 8,729 financial health
checks, of which over 21% were virtual and we removed six
different mortgage fees and launched our mortgage broker
portal to simplify our offering and support customers. We
also launched our Green Mortgage to NatWest International
customers in the UK as we support the wider climate
ambitions of NatWest Group.
Following the successful launch of Cora, our AI virtual
assistant, 63% of interactions have been completed without
the need for human intervention. RBSI’s Social Enterprise
Mentoring Scheme is also now well established and involves
partnering with a social enterprise in each retail banking
jurisdiction to share our knowledge and expertise. We have
also shared our wellbeing material, which received the
‘Wellbeing in the Workplace Star Award’ for our work
with Gibraltar Samaritans.
Partnering with four banks, RBSI will contribute £90,000 over
three years to help secure the future of Jersey’s Community
Savings Limited – a registered charity working to promote
financial inclusion.
Operating profit of £358 million was £259 million higher than
2020, primarily reflecting a £52 million impairment release
combined with income growth and cost reduction. Net loans
to customers increased by £2.2 billion, or 16.5%, and customer
deposits by £6.2 billion, or 19.8% compared with Q3 2021.
During the year, Moody’s upgraded our long-term credit
rating to A3, bringing us more in line with our peers, setting
our rating outlook to stable and affirming the short-term
credit rating at P-2; this reflects the resilience of the business
throughout the pandemic, our continued profitability and
strong balance sheet position.
In responding to changing customer demands, we introduced
cheque deposits in our mobile app among other new features
across our personal digital channels, contributing to a 23%
increase in users. Overall, 82% of local banking customers
are now registered with digital banking which is a 14%
increase compared with 2020.
Our Institutional Banking and Depositary Services business
has received significant investment as it progresses on its
digitisation journey. Customers have felt the benefits of this
and the business continues to be a driver of growth with
Climate and Sustainable Funding and Financing solutions
increasingly popular. We have worked closely with NatWest
Markets to strengthen our combined position as a trusted
partner for these clients by supporting them with a holistic
offering across products and geographies.
Business performance continued
Our strategy of digital transformation
across the communities we operate
in remained unchanged despite the
COVID-19 pandemic. Parts of the
transformation programme were also
accelerated in recognition of rapidly
changing customer behaviours and
needs. We believe this focus on
becoming a bank that is easy to
deal with helps fulfil our purpose of
championing potential, helping people,
families and businesses to thrive.
Total income
(£m)
548
2020: 497
Operating expenses
(£m)
(242)
2020: (291)
Operating profit
(£m)
358
2020: 99
Return on equity
(%)
22.5
2020: 6.1%
Net loans to customers
(£bn)
15.5
2020: 13.3
Retail customers
registered with
digital banking
(%)
82
2020: 68
Net Promoter Score
36
2020: 30
Financial health checks
8,729
2020: 9,872
46 NatWest Group 2021 Annual Report and Accounts

“For us, this is
about fulfilling
our purpose,
being part of the
community we
live and work in”
Helping financial inclusion
RBSI in the community
Think about what it means to be outside the
financial system. To not have a bank account.
To not be able to pay bills, obtain credit or save
for the future.
The effects can be devastating,
trapping people in a vicious cycle
of poverty and financial exclusion,
unable to participate fully in society.
It’s a problem that we felt we could
(and, should) help with. So, we
decided to do something about it.
We got together with four other
local banks in Jersey to support
Community Savings Ltd – a registered
charity which works to promote
financial inclusion in Jersey by providing
services, guidance and practical
assistance to those most in need.
We know Community Savings well.
We’ve been banking the charity since
2018 and recognise the outstanding
work it does in Jersey supporting the
financial inclusion of the islanders.
Community Savings relies on grants,
donations and bequests to ensure the
continued running of its long-standing
initiative. Its customers’ money is not
used to fund its operations and it strives
to provide its services free of charge.
Over the next three years, we
are contributing £90,000 to ensure
that the charity is able to help provide
access to mainstream banking services.
For us, this is about fulfilling our
purpose, being part of the community
we live and work in. But it’s also more
than that. We look after each other here
on the island, and helping people with
financial inclusion is a big part of that.”
Lynn Cleary
Chief Financial Officer,
RBS International
47NatWest Group 2021 Annual Report and Accounts
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Business performance continued
NatWest
Markets
We have made progress during 2021 to better support NatWest
Group’s corporate and institutional customers through refining
our global footprint and product range. We have also simplified
our operating model and leveraged expertise across the bank
to improve core processes to support cost reduction.
Our Foreign Exchange (FX) teams have worked with NatWest
Group’s Commercial, Retail and Private Banking segments
on technology and customer sales initiatives to ensure that
customers across NatWest Group benefit from our market-
leading expertise.
We collaborated across RBSI, NatWest Markets and
Commercial Banking to establish a team to grow our offering
to the investment management sector and provide a more
integrated experience for our Funds and Sponsors customers.
We continued to support our customers with their ESG and
climate-related finance needs, with product innovation across
bonds, FX, interest rate derivatives and private finance. In
2021, we completed £9.7 billion of Climate and Sustainable
Funding and Financing, including £3.3 billion which will
contribute towards the new NatWest Group target of
£100 billion between 1 July 2021 and the end of 2025.
Our support for customers has been recognised by a number
of awards:
– ‘Lead manager of the year, sustainability bonds – local
authority/municipality’, and ‘Lead manager of the year,
green bonds – supranational, sub-sovereign and
agency (SSAs)’, from the Environmental Finance
Bond Awards 2021.
– ‘Sterling Bond House of the Year’ from the IFR Awards 2020
(awarded February 2021).
– ‘Best Agent of International US Private Placements’ from
the GlobalCapital Private Debt Awards 2020 (awarded
February 2021).
– ‘Best Bank for ALM and Libor Transition Management’
from the GlobalCapital Covered Bond Awards 2021.
– ‘#1 bank for Overall FX Service Quality to the UK corporate
sector’ from Coalition Greenwich 2021.
We have advanced product innovation in the voluntary carbon
market by supporting NatWest Group’s collaboration with
other international banks to develop a transparent global
marketplace for carbon offsets with clear and consistent
pricing and standards known as Carbonplace. We also
progressed the development of our digital bond capability,
completing a successful pilot trade of a blockchain bond in
the secondary market.
We made significant progress on the implementation of our
agreement with BNP Paribas for the provision of house futures
and associated back-office services, and in January 2022 we
successfully went live with the outsourcing of back office
services for our US-based Listed Derivatives business.
NatWest Markets incurred an operating loss of £711 million
in 2021. A reduction in income was driven by a weak
performance in Fixed Income, reflecting subdued levels of
customer activity and the continued reshaping of the business.
This also contrasted with the exceptional levels of market
activity seen in 2020. We continued to reduce costs in line
with the strategic announcement in February 2020, with other
expenses decreasing by 12.6%. RWAs were £2.7 billion lower
than 2020 reflecting lower levels of market risk and counter-
party credit risk, including the impact of capital optimisation
actions taken throughout the year.
Note: The NatWest Markets operating segment is not the same as the NatWest Markets
Plc legal entity (NWM Plc) or group (NWM or NWM Group). The NatWest Markets
segment excludes the Central items & other segment.
We have supported our customers’
evolving needs with innovative
solutions and continued to deliver a
more integrated customer proposition
across NatWest Group. We have made
good progress on building a refocused,
sustainable business from which we
can grow. We incurred an operating
loss in 2021, but have continued to
reduce our risk-weighted assets
(RWAs) and operating expenses.
Total income
(£m)
415
2020: 1,123
Operating expenses
(£m)
(1,161)
2020: (1,310)
Operating loss
(£m)
(711)
2020: (227)
Risk-weighted assets
(£bn)
24.2
2020: 26.9
Climate and Sustainable
Funding and Financing
(£bn)
9.7
2020: 7.2
GBP-denominated DCM
volume by bookrunner
– FY 2021 Dealogic
#1
2020: #1
48 NatWest Group 2021 Annual Report and Accounts

One of the most important ways
we can do this is by helping tackle
climate change.
To build out the green infrastructure
needed to reach net-zero targets first
requires the funding and the market
mechanisms to deliver it. This is where
NatWest Markets has a vital role to play.
Following the UK Government’s
announcement of its first-ever sovereign
green bond, we supported the second
issuance of green gilts in October 2021
as joint bookrunner.
The bond, which matures in July 2053,
is the longest-dated sovereign green
bond currently outstanding in the
market. Crucially, it will help finance a
whole range of climate projects such
as offshore windfarms, zero-emission
transport and schemes to decarbonise
homes and buildings.
With these two green issuances, the
UK’s Debt Management Office has
become one of the top three largest
sovereign issuers of green bonds in
the world.
NatWest Markets is proud to be part of
this process, and to have helped deliver
on the government’s commitment to
issue a minimum of £15 billion of
green gilts in 2021–22.
Supporting the UK
Government to tackle
climate change
NatWest Markets and green finance
Being purpose-led is about knowing and fulfilling
our responsibilities. It means delivering on our
commitments to our stakeholders, society and
the environment.
“NatWest Markets
is proud to have
helped deliver on
the government’s
commitment to
issue a minimum
of £15 billion
of green gilts
in 2021–22”
49NatWest Group 2021 Annual Report and Accounts
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Ulster Bank
Rol
During 2021, we entered into binding agreements for the
sale of material parts of our commercial and personal banking
businesses with Allied Irish Banks p.l.c. (AIB) and Permanent
TSB p.l.c. (PTSB), which subject to regulatory and other
approvals and other conditions being satisfied, are
expected to be completed during 2022 and 2023.
Since the end of July 2021, (apart from the UBIDAC asset
finance business), commercial banking has been closed to
new customers, remaining open for existing customers only.
Since the end of October 2021, we have stopped accepting
applications from new personal customers, but continue to
consider applications on a reduced number of products
from existing personal customers, mainly mortgages.
We have focused on effective and timely communications,
engaging with all customers impacted by the loan sales and
launched the ‘Choose, Move & Close’ readiness campaign
designed to give personal customers, especially those in
vulnerable situations, as much notice as possible of the steps
they will be required to take to move the products they hold
with us that are not already covered by the sale agreements.
This readiness campaign is an important step in our closure,
not just for customers but for the industry too, as we work
together to ensure the safe transition of customers to their
new providers. With this in mind, we are engaging with the
rest of the industry within the bounds of competition law, to
allow them time to prepare for the volume of customers who
will need to move or switch accounts. We are also engaging
with the main direct debit originators and large employers
to provide advance notice of the changes to allow them time
to prepare to help their own customers and employees who
will be switching accounts.
In July 2021, we launched our Customer Charter, a set
of principles developed from our colleagues’ ideas and
suggestions for how we best serve customers and the
communities in which we operate throughout the withdrawal
process. This includes helping customers in vulnerable
situations to close or move their accounts, continuing to
provide financial education to customers and donating
surplus office furniture to local communities and charities.
Following the announcement of the phased withdrawal,
our focus on colleague wellbeing has been a key priority.
Listening sessions were held to answer questions and keep our
colleagues informed. We also invested significantly in learning
and development to support colleagues, which has included
one-to-one career coaching sessions and career development
focus workshops.
Following the announcement to
begin a phased withdrawal from the
Republic of Ireland, we have made
progress to develop and implement
a plan which acts in the best interests
of customers, colleagues and
stakeholders. Our focus is to support
customers and colleagues now and
help them to prepare for the future.
Continuing operations
Total income
(€m)
265
2020: 250
Operating expenses
(€m)
(557)
2020: (498)
Total income
(€m)
578
2020: 574
Operating expenses
(€m)
(609)
2020: (548)
Net loans to customers
(€bn)
7.9
2020: 20.0
Operating loss
(€m)
(259)
2020: (405)
Net loans to customers
(€bn)
18.6
2020: 20.0
Operating profit/(loss)
(€m)
68
2020: (255)
Business performance continued
The results above are presented for continuing operations.
For further details on the treatment of discontinued operations
refer to Note 8 to the consolidated financial statements.
Total including discontinued operations
50 NatWest Group 2021 Annual Report and Accounts

Outlook
Outlook.
The economic outlook remains uncertain. We will monitor and react to market conditions and refine our internal
forecasts as the economic position evolves. The following statements are based on current market interest rate
and economic expectations.
– In 2023, we expect to achieve a return on tangible equity of comfortably above 10% for the Group.
– In 2022, we expect income excluding notable items to be above £11.0bn in the Go-forward group.
– We plan to invest around £3 billion over 2021 to 2023 but, with continuing simplification, we plan to reduce
Go-forward group operating expenses, excluding litigation and conduct costs, by around 3% in both 2022
and 2023.
– As a result of positive actions to change the shape of our book in recent years, we expect our through-the-cycle
impairment loss rate to be around 20 – 30 basis points. We expect our 2022 and 2023 impairment charge to be
lower than our through the cycle loss rate.
– Across 2022 and 2023, we expect movements in RWAs to largely reflect lending growth and our phased
withdrawal from the Republic of Ireland.
Capital and funding
– We aim to end 2022 with a CET1 ratio of around 14% and target a ratio of 13-14% by 2023.
– We intend to maintain ordinary dividends of around 40% of attributable profit and to distribute a minimum of
£1 billion in each of 2022 and 2023 via a combination of ordinary and special dividends.
– We intend to maintain capacity to participate in directed buybacks of the UK Government stake, recognising that
any exercise of this authority would be dependent upon HMT’s intentions and is limited to 4.99% of issued share
capital in any 12-month period.
– We will consider further on-market buybacks, in addition to the £750 million announced today, as part of our
overall capital distribution approach as well as inorganic opportunities provided they are consistent with our
strategy and have a strong shareholder value case.
– As part of the NatWest Group capital and funding plans we intend to issue between £3 billion to £5 billion
of MREL-compliant instruments in 2022, with a continued focus on issuance under our Green, Social and
Sustainability Bond Framework. NatWest Markets plc’s funding plan targets £4 billion to £5 billion of public
benchmark issuance.
Ulster Bank RoI
– We have made good progress on our phased withdrawal from the Republic of Ireland and expect the majority of
the Allied Irish Banks and Permanent TSB asset sales to be largely complete by the end of 2022 and deposits to
reduce over a longer timescale.
– We would expect income and RWAs to follow the balance sheet trajectory. We expect the cost base to reduce
over time and anticipate other operating expenses, excluding withdrawal related costs, in 2023 will be around
€200 million lower than 2021.
– We expect to incur disposal losses through income of around €300 million in 2022 and withdrawal related costs
of around €600 million across 2022-24, with around €500 million incurred by the end of 2023.
– We expect the phased withdrawal to be capital accretive.
(1) The guidance, targets, expectations and trends discussed in this section represent NatWest Group plc management’s current expectations and are subject to change, including as a
result of the factors described in the Risk Factors section on pages 406 to 426 of the 2021 NatWest Group plc Annual Report and Accounts and on pages 179 to 201 of the NatWest
Markets Plc 2021 Annual Report and Accounts These statements constitute forward-looking statements. Refer to Forward-looking statements in this document.
51NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Section 172(1)
statement
In this statement we describe how
our directors have had regard to the
matters set out in section 172(1) (a) to
(f) of the Companies Act 2006 (section
172) when performing their duty to
promote the success of the company.
Board engagement with stakeholders
The Board reviews and confirms its key stakeholder groups
for the purposes of section 172 annually. For 2021, they
remained customers, colleagues, communities, investors,
regulators and suppliers. Examples of how the Board has
engaged with key stakeholders, including the impact on
principal decisions, can be found in this statement and on
pages 14 to 17 (stakeholder engagement) and pages 102
to 113 (Corporate governance report).
Supporting effective Board discussions
and decision-making
Our purpose continues to influence Board discussions
and decision-making.
Our Board and Committee terms of reference reinforce the
importance of considering both our purpose and the matters
set out in section 172. Our Board and Committee paper
template includes a section for authors to explain how the
proposal or update aligns with our purpose and a separate
section for them to include an assessment of the relevant
stakeholder impacts for the directors to consider.
Our directors are mindful that it is not always possible to
achieve an outcome which meets the requirements, needs
and/or expectations of all stakeholders who are, or may be,
impacted. For decisions which are particularly challenging
or complex, we introduced an additional page to our paper
template in 2021 which provides directors with further
information to support purposeful decision-making. This
additional page uses the Blueprint for Better Business as
a base and is aligned to our broader purpose framework.
Principal decisions
Principal decisions are those decisions taken by the Board
that are material, or of strategic importance, to the company,
or are significant to NatWest Group’s key stakeholders.
This statement describes three examples of principal
decisions taken by the Board during 2021.
Likely long-term consequences.
Employee interests.
Relationships with customers, suppliers and others.
The impact on community and environment.
Maintaining a reputation for high standards of business
conduct.
Acting fairly between members of the company.
Section 172(1) statement
Withdrawing from the
Republic of Ireland
What was the decision-making process?
In February 2021, the Board took the decision to commence
a phased withdrawal from the Republic of Ireland. This was a
very carefully considered decision by the Board that followed a
strategic review of the Ulster Bank business in the Republic of
Ireland, which concluded that Ulster Bank Ireland Designated
Activity Company (UBIDAC) would not be able to generate
sustainable long-term returns for NatWest Group plc’s
shareholders. Alongside the decision to withdraw, it was
announced that a non-binding Memorandum of Understanding
with Allied Irish Banks, p.l.c had been entered into in connection
with the sale of a portion of UBIDAC’s performing commercial
loan book.
To support the Board in its decision-making, it received
comprehensive papers prepared by management which
updated the Board on the progress of each stage of the
strategic review and sought the Board’s support to proceed to
the next stage. These papers included detailed analysis of the
potential options available to execute the withdrawal (including
potential counterparties and transactions), valuations, financial
impacts, key risks, and stakeholder impacts and engagement
plans. During its discussions, the Board acknowledged the
complexity and challenges of a withdrawal and the various
options were explored through the lenses of time, value,
execution risk and stakeholder impacts.
How did the directors fulfil their duties under section
172? How were stakeholder interests considered?
At each stage of the strategic review the directors were
mindful of their duties under section 172 including the likely
long-term consequences of the decision. Each update the
Board received provided an overview of relevant stakeholder
considerations. The Board discussed in detail the various
stakeholders that would be impacted (including shareholders,
employees, customers, suppliers, regulators and communities),
what their concerns were likely to be and the key messages
that would support engagement. The Chairman and Group
CEO undertook engagement directly with key stakeholders and
reported back to the Board on their discussions. The UBIDAC
CEO also attended each meeting at which the strategic review
was discussed to provide direct feedback to the Board on
stakeholder concerns and considerations.
How was our purpose considered as part of the decision?
Considering relevant stakeholder interests is key to purposeful
decision-making. Our new purposeful decision-making page
was used to provide the Board with a detailed analysis of
stakeholder considerations and impacts, using the Blueprint
for Better Business framework. Having taken the decision to
withdraw, the Board agreed this should be done in an orderly
manner that was considerate to customers, colleagues,
suppliers and other stakeholders.
Actions and outcomes
The Board continues to receive updates on the execution
of the withdrawal. A binding agreement was subsequently
reached with Allied Irish Banks p.l.c. on the sale of the
majority of UBIDAC’s performing commercial lending portfolio.
Factors considered:
52 NatWest Group 2021 Annual Report and Accounts

Approving capital
distributions
Approving our
refreshed values
What was the decision-making process?
During 2021, the Board recommended a final dividend, agreed
to participate in a directed buyback of ordinary shares from
Her Majesty’s Treasury, approved an interim dividend and
agreed to commence an on-market buyback of ordinary
shares, as well as providing outlook guidance to investors
on capital distributions.
The Board’s decisions were informed by the 2021 capital
distribution plans as well as regular updates on NatWest Group
plc’s financial and capital positions. A key focus of Board-level
discussions was how surplus capital was being managed.
The Group Board Risk Committee also reviewed all capital
distributions proposals in advance of Board consideration,
and recommended them to the Board for approval.
How did the directors fulfil their duties under section
172? How were stakeholder interests considered?
Again, in taking decisions, the directors were mindful of
their duties under section 172. For the dividend decisions the
directors were particularly focused on whether the declaration
of a dividend would support the long-term sustainable success
of the company. The Board also sought advice from NatWest
Group plc’s corporate brokers on investor expectations in
respect of the outlook guidance.
How was our purpose considered as part of the decision?
The Board is aware that in taking decisions on capital
distributions, it also needs to consider the financial implications
of those decisions in terms of continuing to support customers
and maintaining financial stability.
Actions and outcomes
The final dividend of 3 pence per ordinary share was approved
by shareholders at the Annual General Meeting in April 2021
and an interim dividend of 3 pence per ordinary share was
approved by the Board in July 2021.
The outlook guidance on capital distributions was announced
as part of the 2020 annual results in February 2021. It stated
that, subject to market conditions, the company intended to
maintain ordinary dividends of around 40% of attributable
profit and aimed to distribute a minimum of £800 million per
annum from 2021 to 2023 via a combination of ordinary and
special dividends. This was updated by the Board in July 2021
which increased the outlook guidance for capital distributions
from £800 million to £1 billion for 2021 and future periods
(again subject to market conditions).
In March 2021, the company participated in a directed
buyback of ordinary shares from Her Majesty’s Treasury and
in July 2021 the Board agreed to commence an on-market
buyback of ordinary shares, further reducing the UK
Government’s shareholding in NatWest Group plc.
What was the decision-making process?
In July 2021, the Board received an update on the work being
undertaken to refresh our values and the related behavioural
framework to provide greater alignment to our purpose and
strategy. At that time, the Board confirmed its support for the
refresh and noted that the final proposal would be brought
back to the Board for approval.
In December 2021, the Board was presented with detailed
proposals from management seeking approval for the
recommended refreshed values and behaviours. The paper
explained the behavioural science and data-led approach that
had been adopted and the range of stakeholders that had
been engaged. The paper also set out the first draft of the
people proposition that would be aligned to the refreshed
values. The Board discussed the proposals and provided
positive feedback on both the approach taken and the
refreshed values.
How did the directors fulfil their duties under section
172? How were stakeholder interests considered?
The paper explained very clearly the stakeholder engagement
that had been undertaken in developing the refreshed values
and the draft people proposition, both in terms of the stakeholder
groups consulted (which included colleagues, customers and
communities) and the methods of engagement used (such as
interviews with senior executives, workshops, focus groups,
digital surveys, external partner review by Blueprint for Better
Business and virtual engagement). A stakeholder overview also
set out stakeholder impacts and a number of Board members
provided direct input and feedback as part of the stakeholder
engagement process. Colleagues were, understandably, the
key focus of the Board’s discussions.
How was our purpose considered as part of
the decision?
The refresh of our values was undertaken to provide greater
alignment with our purpose and strategy and the Board
acknowledged this as part of its discussions.
Actions and outcomes
The Board approved the refreshed values in December 2021
and noted the intention to launch them to colleagues,
customers and communities in 2022.
Factors considered:Factors considered:
“The Board knows how important it is
to engage with our stakeholders, to
listen to them and to consider their
interests during Board discussions and
decision-making. Understanding the
needs of our stakeholders is at the
core of our purpose framework.”
Howard Davies,
Chairman
53NatWest Group 2021 Annual Report and Accounts
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Listening and responding to our customers
We want to know what our customers think about
us. It helps us better understand their needs and
improve the products and services we offer.
To achieve this, we have in place a framework of independent
customer feedback surveys that measure satisfaction across
our business segments. In terms of customer advocacy in 2021,
Net Promoter Scores (NPS) for Retail Banking improved by
six points for NatWest and seven points for Royal Bank of
Scotland. Business Banking NPS remained flat. In Commercial
Banking NPS declined by two points for NatWest and six points
for Royal Bank of Scotland. Refer to page 56 for the full
breakdown of scores.
The insight from these surveys is reported at the most senior
levels of the bank and plays a crucial role in how we address
the evolving requirements of our customers. In 2021, we
responded to customer feedback with a range of
innovative solutions.
Stakeholder focus areas
Customers
Customer trust
NatWest
74%
Q4 2021
76%
Q4 2020
Royal Bank
of Scotland
68%
Q4 2021
61%
Q4 2020
Source: Yonder reputation tracker, GB, trust amongst Retail Banking customers
Listening, engaging and
partnering with our stakeholders
is vital for the success of our
business. It helps us to address
our operational impacts
and improve outcomes for
customers, society and the
environment. In the following
sections we detail some of the
notable steps we have taken
to respond to our stakeholders’
changing requirements
during 2021.
So that customers can settle payments easily between family
and friends (without the need to share account details or hold
cash), we launched ‘PayMe’. This service uses Payit, our Open
Banking Payments solution, to request a payment from anyone
who uses online or mobile banking and has a participating UK
Bank account. Payment can be made via a link or QR code,
which can be scanned by any device with a camera.
Our approach to Open Banking and the innovative use of
data has also created opportunities for reusing services and
capabilities across NatWest Group products, making it simpler
and quicker to develop and deploy them to our customers.
For example, through Tyl, Payit and Mettle we will be able to
offer a seamless, one-bank payments proposition, delivering
personalised, smart insights for businesses so they can track
sales, target customers and grow loyalty.
Elsewhere, a new feature launched in 2021 in the mobile
banking app to enable our retail and commercial customers
to deposit cheques has swiftly become one of the app’s
most used features – testament to both the demand for,
and usability of the function. For our Commercial Banking
customers, we also enhanced our digital platform offering
‘Bankline’, with new and improved functionality within
the service.
Making banking more accessible
We recognise that our customers’ individual needs are all
different. As such, we aim to make banking as accessible
as possible for everyone, offering our customers the ability
to choose from a variety of face-to-face, digital and
remote options.
We have more than 800 branches and 16,000 physical points
of presence, including our ATM network and our relationship
with the Post Office, which remain an important part of how
we deliver services to our customers and communities.
54 NatWest Group 2021 Annual Report and Accounts

Customers can now also take greater digital control of
their finances through our mobile app, including the ability
to open an account, check their credit score and apply for a
mortgage. Our app is compatible with both Apple and Android
accessibility features such as inverting colours and magnifiers,
as well as biometric log-ins. We have also introduced a dark/
light mode for customers with visual impairments or dyslexia.
Our AI virtual assistant, Cora supports customers via the
‘message us’ feature in the app, and our contact centre
colleagues are just a click away with the ‘tap to call’ function.
When our customers want the reassurance of a face-to-face
conversation remotely, our video banking service is available.
We offer customers who require additional support a range of
accessibility services, such as accessible statements in braille,
large print and audio CD. BT’s Relay UK service also supports
customers with hearing impairments through a type-to-talk
service, while accessible card readers, rubber signature
stamps, braille card wallets and our talking ATM service
are other key accessibility features.
Combating financial crime
Detecting and preventing financial crime to protect people,
families and businesses is a key priority for NatWest Group.
Along with other major banks and telecoms companies, we
participated in a pilot scheme to introduce a hotline to help
fight fraud across the industry and protect our customers
from fraud and scams.
Spearheaded by Stop Scams UK (SSUK), the phone
number ‘159’ is designed to disrupt scams in which victims
have been contacted or engaged by a scammer via phishing or
impersonation. The number works by encouraging customers
experiencing suspected fraud to stop, hang up and call 159,
at which point they are directed to their bank.
Supporting customers in vulnerable situations
At any time, a customer may find themselves either in a
vulnerable situation or caring for a loved one experiencing a
vulnerability. The continuing impact of COVID-19 has meant
that for many of our customers this was a reality in 2021. Our
dedicated customer care line, which was set up in response to
the pandemic, has continued to support a significant number of
our customers in 2021. Our support service ‘Banking My Way’
continues to develop, with customers now able to tell us about
the support they need by updating their details in the new
mobile app function.
In 2021, we continued to work with organisations such
as ‘GamCare’ and the ‘Money Advice Trust’ to improve
the support available to customers in vulnerable situations,
connecting them to expert advice where appropriate. We also
significantly expanded our referral programme with Citizens
Advice, connecting customers to their advisers where we
identify additional advice or vulnerability needs. In February
2021, with the domestic abuse charity SafeLives, we launched
The Circle Fund. The Circle Fund, available for three years,
supports SafeLives to provide small grants to help economic
abuse victims and survivors to regain financial confidence
and control. This follows from our announcement to donate
£1 million for the fund in 2020.
We know how important our branches are
to our customers. But we also know that the
ways in which our customers live, work and
bank have altered dramatically in the past
two years. To meet these changing needs
and to help people, families and businesses
to rebuild and thrive, we plan to turn our
branches into sustainable local banking hubs.
We want to provide our customers a space in the
heart of our high streets with a range of specialist
services, venturing beyond traditional banking to
help break down barriers to enterprise and increase
financial capability. Our Broadmead Bristol hub,
which opened earlier in 2021, is the first example
of this.
Within the hubs, retail customers are able to
connect face-to-face and learn more about financial
education and how to best manage their money,
and businesses can access expert advice and
collaboration spaces. The hubs will also include
enterprise zones, where potential and current
customers can liaise with local enterprise managers
and other specialists with access to initiatives such as
‘Women in Business’ or our ‘Accelerator’ programme.
Among the other features are: dedicated events
and learning spaces, which can also be used by
local charities or community groups; customer hot
desks offering free Wi-Fi; private consultation rooms,
where we can provide confidential assistance to
customers both face to face and digitally; and
self-service areas with colleague assistance to
support people with simple banking transactions
quickly and conveniently.
And from listening to our customers, we understand
that managing the environmental impact of the
space is vital. To help reduce waste and promote
sustainability, we’ve incorporated recycled furniture,
included water bottle refill stations for customers
and removed paper marketing materials. We’ll
also measure the climate impact of our new
local banking hubs through the SKA and Energy
Performance Certificate (EPC) assessments.
55NatWest Group 2021 Annual Report and Accounts
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Account opening
Q4 2021
28
Q4 2021
14
Q4 2021
45
Q4 2021
25
Q4 2021
78
Dec 2021
74%
Q4 2021
37
Dec 2021
68%
Q4 2020
16
Q4 2020
16
Q4 2020
44
Q4 2020
22
Q4 2020
76
Dec 2020
76%
Q4 2020
32
Dec 2020
61%
Source: Strategic NPS benchmarking study run
through InMoment
Source: Strategic NPS benchmarking study run
through InMoment
Source: Strategic NPS benchmarking study run
through InMoment
Source: Strategic NPS benchmarking study run
through InMoment
Source: Operational NPS study run
through InMoment
Source: Yonder reputation tracker, GB,
Trust among Retail Banking customers
Source: Operational NPS study run
through InMoment
Source: Yonder reputation tracker, GB,
Trust among Retail Banking customers
Lending
NatWest
Mortgage
Day-to-day servicing
Royal Bank of Scotland
Mobile Banking
Online Banking
Retail Banking
Business and Commercial Banking
Customer Trust
Stakeholder focus areas continued
Overall NPS
NatWest
Royal Bank of Scotland
Business
Q4 2021
-2
Q4 2021
-12
Q4 2020
-2
Source: MarketVue
Business Banking from
Savanta, England &
Wales, businesses with
a turnover up to £2m
Q4 2020
-13
Source: MarketVue
Business Banking from
Savanta, Scotland,
businesses with a
turnover up to £2m
Q4 2021
22
Q4 2021
21
Q4 2020
24
Source: MarketVue
Business Banking from
Savanta, England &
Wales, businesses with
a turnover up to £2m
Q4 2020
27
Source: MarketVue
Business Banking from
Savanta, Scotland,
businesses with a
turnover over £2m
Commercial
Banking:
Retail
Q4 2021
13
Q4 2020
7
Source: Strategic NPS
benchmarking study run
through InMoment,
England & Wales
Q4 2021
-2
Q4 2020
-9
Source: Strategic NPS
benchmarking study run
through InMoment,
Scotland
Customers continued
Our brands are our main connection with customers. We track customer advocacy for our key brands and services using the Net
Promoter Score (NPS), a commonly used metric in banking and other industries across the world.
56 NatWest Group 2021 Annual Report and Accounts

Investors
Transparency and engagement
Private investors
We engaged with our private investors through
our Annual General Meeting (AGM), virtual
shareholder events, and our annual and
strategic report communications.
In light of ongoing restrictions related to the COVID-19
pandemic, investors were not be able to attend the 2021
AGM in person. However, we held a live virtual shareholder
event a week prior to the AGM. Investors were invited to
submit questions either in advance of, or during, the virtual
event and the answers to questions on key themes were
displayed on our website.
In addition, we held two further virtual events in July and
November 2021. At these events, we spoke about the work
NatWest Group is doing to support and stimulate enterprise,
why it was so important for us to sponsor COP26 and how
tackling climate change is at the core of our purpose. These
virtual shareholder events remain a key component of our
stakeholder engagement programme and provide an
opportunity for private investors to hear from, and ask
questions of, Board members and senior management on
topics such as innovation, enterprise, sustainability and our
financial performance. It is our intention to deliver further
virtual events in 2022.
In addition, we published investor updates on the topics of
‘Championing Enterprise’ and ‘Our Purpose: Beyond COP26’.
These updates provided information on initiatives such as the
relaunch of our enterprise programme, the additional £1 billion
in funding to help support female-led businesses in the UK
recover from the pandemic, the introduction of our carbon
footprint tracker for our mobile app and our launch of the
UK’s first carbon-neutral podcast. Our investor updates and
recordings of our virtual events can be found on our website.
Institutional investors
We have a well-established programme of engagement
with our institutional investors. The financial year begins
with a presentation on our annual results in February, hosted
by our Chairman, CEO and CFO. This live event includes an
interactive Q&A session to give research analysts and investors
an opportunity to ask questions and engage with our
management team. We then follow up quarterly with
presentations to the market when we announce each set of
financial results in April, July and October. While these events
could not be held face to face in 2021, we were able to host
a live presentation and Q&A session via Zoom, enabling the
same level of interaction in a virtual forum.
In addition to the quarterly results presentations, we hosted a
programme of virtual one-to-one and group meetings with
institutional investors from around the world. Across our
management team, we hosted over 250 meetings with
investors covering key topics such as progress against our
financial targets, strategic priorities, innovation, ESG and
industry challenges. While the total number of one-to-one
meetings was lower than the prior year when we saw an
unusually heightened demand for time with management due
to the pandemic, our CEO and CFO engaged regularly with UK
Government Investments and our largest active institutional
investors throughout the year.
To enhance our investor relations programme during a
challenging time when we were unable to meet face to face,
we hosted a series of ‘Meet the Exco’ and business spotlight
presentations via Zoom. These events gave analysts and
investors the opportunity to hear from key members of our
executive team as they discussed their priorities for the year
ahead and to ask questions live over Zoom.
Environmental, Social and Governance (ESG) issues were
regularly discussed at our one-to-one meetings and we also
engaged with specialist socially responsible investors through
a programme of meetings with ESG analysts from institutional
investors, presentations at ESG-focused conferences and
increased interactions with sustainability rating agencies.
Alongside the virtual shareholder events mentioned above,
members of our Board hosted a live virtual corporate
governance forum. This gave investors the opportunity to hear
an update on Board priorities in 2021 and the opportunity for
a discussion on corporate governance topics directly with our
non-executive directors.
A key development in terms of the transparency of our
business during 2021 was the enhancement of two key
areas of our non-financial reporting. In recognition that
climate change is a critical global issue which has significant
implications for our investors (as well as our customers,
employees, suppliers and partners), we produced our first
standalone Climate-related Disclosures Report in February
2021. This comprehensive document was a material step
towards alignment with the Financial Stability Board’s Task
Force on Climate-related Financial Disclosures (TCFD)
recommendations and recommended disclosures. The report
covered our climate strategy and associated ambitions,
governance, scenario analysis, risk management and
climate-related metrics.
We also produced our first Environmental, Social and
Governance Supplement – providing investors and other
stakeholders with a deeper understanding of the work that
we are doing to understand and manage issues facing our
business, customers, communities and society as a whole.
57NatWest Group 2021 Annual Report and Accounts
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Colleagues
Helping our colleagues to thrive
We want NatWest Group to be a great place
to work. By offering a fulfilling job, a healthy
workplace, fair rewards, excellent development
and great leadership, we believe together our
colleagues can thrive and unlock the full potential
of NatWest Group.
Our People Pledge sets out commitments and initiatives in
direct response to what colleagues tell us is important to help
them in their jobs. Throughout 2021, we have worked with
colleagues to champion their potential across all five parts
of the pledge: ‘Help you develop your skills’; ‘Support your
wellbeing’; ‘Help customers thrive’; ‘Create inclusive and
connected teams’; and ‘Help you make a difference’.
The pandemic has drastically altered how we work and has
changed (perhaps forever) the relationship between employers
and employees. We listen to our colleagues and use this insight
to attract, engage and retain the best talent for the future. Our
colleague listening strategy – which includes: our colleague
opinion surveys; a Colleague Advisory Panel (CAP) that
connects colleagues directly with our Board; the ‘Colleague
Experience Squad’, a group of colleagues who volunteer to
provide feedback on colleague products and services; and
Workplace, our social media platform – contributes to our
deeper understanding of colleague sentiment. We also track
metrics and key performance indicators which we can
benchmark with sector and high-performing comparisons.
Over 46,700 colleagues (81%) participated in our September
2021 Our View survey. The results showed that colleague
sentiment remains strong, despite the pandemic. Lead
measures in culture, purpose, inclusion and building capability
showed a continued and sustained year-on-year improvement
(+1 percentage point each). Across all 15 measured categories,
NatWest Group sits an average of 11 percentage points above
the Global Financial Services Norm (GFSN) and five percentage
points above the Global High Performance Norm (GHPN).
(1)
Regular interactions with our employee representatives such
as trade unions, elected employee bodies and works councils
are a vital means of transparency and engagement for us.
We frequently use these sessions to discuss developments
and updates on the progress of our strategic priorities. In 2021,
topics included ‘ways of working’ and ‘health and safety in the
context of the pandemic’. We are also committed to respecting
our employees’ rights of freedom of association across all our
business. In addition, our CAP was set up in 2018 to help
promote colleague voices in the boardroom. For full
details, refer to the Corporate governance report
and ESG Supplement.
Performance and reward
Our approach to performance management provides clarity for
our colleagues on how their contribution links to our purpose,
with all colleagues set performance goals across a balanced
scorecard of measures. We continue to ensure employees are
paid fairly for the work they do and are supported by simple and
transparent pay structures in line with industry best practices.
We keep our policies and processes under review to ensure we
do so. In general, the scores from the reward category in Our
View declined since 2020, although in all but one category they
remain above the GFSN. We will be looking to address this,
subject to performance, in 2022.
In the UK, our rates of pay continue to exceed the Living Wage
Foundation benchmarks and we ensure employees performing
the same roles are paid fairly. We ensure colleagues have an
awareness of financial and economic factors affecting our
performance through quarterly ‘Results Explained’
communications and ‘Workplace Live’ events with our Group
Chief Executive Officer and Group Chief Financial Officer.
Refer to our Directors’ remuneration report for full details
on our remuneration policies and employee share plans.
Helping colleagues realise their potential
At NatWest Group, we exist to champion potential and help
people, families, and businesses to thrive – helping them at
every stage of their lives. We’ll achieve our ambition to be a
relationship bank for a digital world by working together as
one team, across NatWest Group. Investing in our workforce in
a variety of ways helps us achieve that. To support this, we’re
building a learning organisation that tests ideas and learns
every day – helping colleagues develop the capabilities to
stay relevant and employable for the future.
The COVID-19 pandemic has accelerated the pace of change,
and it is likely that predictions made for 5-10 years’ time –
working seamlessly alongside robotics, smarter uses of AI
and collaboration across organisations and boundaries – will
become the norm more quickly. This will have a significant
impact on how people work and the capabilities they will
need to thrive in this new world.
At NatWest Group, we believe that we have an obligation to
help build skills across our industry. Working with the Financial
Services Skills Commission, we led the build of an industry-
wide skills framework that is available via an online tool to all
financial services organisations in the UK. Its purpose is to
create a consistent language around skills across the industry
– which in turn will support mobility and is in line with our
commitment to support wider communities.
In 2021, we provided all colleagues with access to build future
skills through the NatWest Group Learning Academy, bringing
together learning opportunities and curated content into a
single place. This supports our commitment for all colleagues
to be upskilled in future-focused skills by 2025. Around 80% of
colleagues have used it since it launched in 2020 and, in 2021,
we’ve offered new topics including cybersecurity and innovation.
It has helped us to increase colleague learning completions
by 10%, with our target (aligned to the UN Sustainable
Development Goals) to increase them by 50% at the end
of 2023.
As well as increasing our colleagues’ learning and
development, we’re also focused on ensuring that it’s the right
kind. We have made a commitment that half of all learning at
NatWest Group is focused on building critical skills for the
future. We have prioritised data and digital capability and have
given our colleagues access to a range of opportunities to build
these skills through the NatWest Group Academy. Early
Stakeholder focus areas continued
(1) NatWest Group Our View results exclude Ulster Bank RoI.
58 NatWest Group 2021 Annual Report and Accounts

Supporting our colleagues’ wellbeing
To be part of NatWest Group means being part of
something bigger than ourselves, where the strength
of our culture underpins everything we do; an
organisation where we all learn, grow, thrive and
support each other. A vital part of this is having a
fully embedded wellbeing strategy; refer to our ESG
Supplement for full details.
progress is positive with data learning up 134% and digital
learning up 31%. We also continue to invest in our people to do
their job, with 99.6% of our front-line colleagues professionally
accredited within their first 18 months in role.
We are committed to reskilling colleagues whenever possible.
The Mobility Hub supports with redeploying colleagues and
reskilling them for future work. In 2021, we commenced our
first formal reskill programme, with 20 colleagues who were at
risk of redundancy taking the opportunity to reskill as software
engineers. Of these, 17 accepted permanent positions.
In 2021, we launched our global Talent Academy to help
identify and develop colleagues with high potential through
a programme of challenging and purposeful development
opportunities. For the first time, colleagues were encouraged
to self-nominate regardless of role, level, working pattern
and location. Following a robust assessment process, 3,911
colleagues were accepted on to the programme. The cohort
is 53% male and 47% female, and 23% of the successful
applicants come from a Black, Asian and Minority Ethnic
background, thus providing NatWest Group with a diverse
talent pipeline for the future.
As we committed to, we hired over 1,000 interns, graduates
and apprentices in 2021; including 205 colleagues who were
recruited through our social mobility apprentice programmes
and we aim to hire a further 1,100 interns, graduates and
apprentices in 2022.
We are also focusing on building our leaders’ capabilities,
which is critical to delivering our purpose-led strategy.
Our ‘Determined to Lead’ programme has helped focus
and energise our people leaders, cultivating a framework for
common leadership behaviours and practices. In addition, our
leadership, talent and career support activity is enabled by our
new Leadership and Coaching Faculty. This resource gives
our leaders access to clear thinking, relevant frameworks
and problem-solving approaches at the point of need.
Supporting this, our succession planning processes enhance
our framework to spot, develop and mobilise a diverse pool
of our most promising talent. Successors are assessed and
developed against a purpose-led profile that defines the
behaviours, traits and drivers associated with success in a
purpose-led role and organisation. Our Succession Council
gives bank ExCo successors the opportunity to engage directly
with the CEO and other ExCo members to ensure they have
the potential and aspiration to reach ExCo level. Our most
talented senior leaders are given exposure through Board &
Talent sessions with interactive sessions discussing topics
that are shaping the direction of NatWest Group.
Following the success of our first NatWest Junior Management
Team (JMT), a second cohort was selected in September 2021.
The JMT mirrors the NatWest Group Executive Committee and
brings a fresh perspective and voice to that team. They also
deliver key strategic projects to broaden their experience,
exposure and connections across NatWest Group.
Refer to our ESG Supplement for full details on how we
support colleagues to realise their potential.
Diversity, equity
and inclusion
Creating a diverse, equitable and inclusive workplace is
integral to fulfilling our purpose. It enables us to truly connect
with, and serve, our diverse customers and communities with
the products and services they need. We remain committed
to progressing our diversity, equity and inclusion strategy,
focusing on becoming gender balanced, ethnically diverse,
disability smart, LGBT+ innovative and an inclusive workplace.
Inclusive workplace
Colleague sentiment on inclusivity continued to increase
in 2021, reaching a score of 93 percentage points. We are
14 percentage points above the GFSN and 10 percentage
points above the GHPN. Although sentiment has increased
in all colleague groups, our focus is now on where scores
may vary for our minority colleague groups.
Our 2021 Inclusion Week showcased diversity, equity and
inclusion across our business. This offered time to reflect on
why we need a diverse and inclusive workplace, to celebrate
the progress we are making, and challenge ourselves to do
more. We also continued to focus on behavioural change
through new and enhanced learning modules. These include
our mandatory learning and additional optional learning (such
as ‘Choose to Challenge’, which educates colleagues on the
importance of challenging behaviours that are not inclusive).
For more details refer to our ESG Supplement.
We continued to support our employee-led networks, which
have around 24,000 members globally. These include: Gender,
Multicultural, Disability, Rainbow (LGBT+), Armed Forces,
Families & Carers, Sustainable Futures, and Aspire. In 2021,
NatWest Markets Americas’ Energized Employees Network
(and sub-networks) focused on uniting and empowering
colleagues by running several events and initiatives, including
‘One Small Step: The George Floyd Verdict’ hosted by the
Black Professional Network and ‘New Ways of Working
and the Impact on Women’ hosted by the Gender Network.
We have been listed in the ‘Working Families Benchmark Top
10 Employers’, showing that we are among those leading the
way in building a flexible, family-friendly workplace. We have
also been accredited as a ‘Good Work Standard’ employer at
Excellence (highest) level by the Mayor of London’s office.
We marked ‘South Asian Heritage Month’ with cultural
celebrations and awareness campaigns that define the diverse
cultural tapestry of our South Asian colleagues. We ran events
(such as wedding traditions across different faiths) and created
a memory wall for colleagues to share personal histories.
For the third consecutive year, NatWest Poland received the
highest score in ‘Diversity IN CHECK’ – a certification granted
to employers well advanced in managing diversity and
inclusion considerations.
References to ‘colleagues’ in this Strategic report mean all members of our workforce
(for example, contractors, agency workers).
59NatWest Group 2021 Annual Report and Accounts
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Gender balanced
Our Board composition exceeds the FTSE Women Leaders
target with a figure of 36% female representation. We have
female representation of 29% on our executive management
team, with a female Chief Executive Officer, Chief Financial
Officer, Chief Marketing Officer, Chief People & Transformation
Officer and Chief Governance Officer & Company Secretary.
We have a target to have full gender balance in our CEO-3
and above global roles by 2030. At 31 December 2021, we
had, on aggregate, 38% women in our top three layers, a
decline of 1% since 31 December 2020. While representing
an increase of 9% since targets were introduced in 2015, we
know we have more to do and we continue to focus on the
recruitment, retention and advancement of women to meet
our 2030 target.
The mean gender pay gap for NatWest Bank is 30.1%
(median: 34.2%) and the mean gender bonus gap is 26.0%
(median: 12.5%). The statutory bonus gap calculated in line
with regulation is the number including recognition vouchers
(mean 50.5%; median 92.9%). This means that even colleagues
who received a small recognition voucher – for example a £10
voucher – are included in the calculations. Most colleagues in
our more junior jobs only receive fixed pay – a change made
to provide more certainty over earnings; and this means
that many colleagues included in the statutory bonus
gap calculations only received a recognition voucher.
We currently have a higher proportion of women in these
roles. We therefore believe the figures excluding recognition
vouchers, 26.0% (median: 12.5%), are the most accurate
reflection of our gender bonus gap today.
In line with being a signatory to HM Treasury’s ‘Women in
Finance Charter’, we are committed to implementing its four
key industry actions for gender balance across financial
services. Executive Sponsor for Gender, David Lindberg
(CEO, Retail Banking), is also part of the external
Accountable Executive Taskforce for the Charter.
In 2021, we were listed as a ‘Times Top 50 Employer for
Women’ for the 11th consecutive year. For the fifth year,
we’ve retained our place in Bloomberg’s ‘Global Gender
Equality Index’. NatWest Group India was recognised as the
‘Winner of Gender Inclusive Workplace’ by ‘UN Women Asia
Pacific Awards 2021’ for the region and as a ‘Top 10 Best
Workplaces for Women 2021’, awarded by the Great Place to
Work (GPTW) Institute, India. Elsewhere, NatWest Poland won
the ‘Fair to Women’ award, in recognition of their initiatives
and, more specifically, for supporting women in technology.
We continued our long-standing collaboration with Women
in Banking and Finance (WiBF), a volunteer-led organisation
which aims to connect members to thought leaders, business
leaders and women at all stages of their careers. Alison Rose
was presented with WiBF’s first President’s Award, recognising
her contribution to financial services over many years.
Ethnically diverse
Introduced in 2018, our ethnicity target is to have 14% Black,
Asian and Minority Ethnic colleagues in our top four layers
(CEO-4 and above) in the UK by 2025. At 31 December 2021,
Stakeholder focus areas continued
of 86% of colleagues who disclosed their ethnicity in the top
four layers in the UK, we have on aggregate 11% Black, Asian
and Minority Ethnic colleagues. This represents a 3% increase
since targets were introduced. Overall, of those who disclose
their ethnicity, 17% of colleagues in the UK identify as Black,
Asian and Minority Ethnic.
In line with our commitment to transparency under the UK
Government’s Race at Work Charter and in anticipation of
a requirement to disclose our ethnicity pay gap, we have
voluntarily disclosed our ethnicity pay gap for NatWest Group
combined UK & Ireland. The mean ethnicity pay gap for
NatWest Group is 9.3% (median: 13.0%). The mean ethnicity
bonus gap for NatWest Group is 24.2% (median: 17.9%).
These bonus gap numbers are excluding recognition
vouchers, the numbers including recognition vouchers
are 32.8% (median 46.3%).
We are proud to be placed in the ‘Top 10 Outstanding
Employers’ as part of ‘Investing in Ethnicity Employer’s
Maturity Matrix’, a position we have held since its inception
in 2018. The Matrix creates a framework and provides a
benchmark to assist employers on their ethnicity journey.
In 2020, we launched the Racial Equality Taskforce to listen,
learn and better understand the barriers faced by colleagues,
customers and communities from Black, Asian and Minority
Ethnic backgrounds. The Taskforce set out ten commitments
in the Banking on Racial Equality report, including a new UK
target to have Black colleagues occupying 3% of UK roles
(CEO-5 and above) by 2025. At 31 December 2021, we have
1.5% of colleagues who identify as Black in the top five layers
in the UK. Overall, of those who disclose their ethnicity, 2%
of our colleagues in the UK identify as Black. In 2021, we
published a first anniversary update on the report, for full
details refer to natwestgroup.com.
In October, we celebrated Black History Month 2021 with
a theme of Black Excellence. This provided opportunities
to celebrate Black people striving to be the best version of
themselves, and spotlight Black role models excelling in their
chosen fields. We ran events throughout the month, with a
keynote lecture from Lord Simon Woolley, supported by
our Executive Sponsors for Ethnicity Simon McNamara
(Chief Administration Officer) and Nigel Prideaux
(Chief Communications Officer).
In 2021, we relaunched our Ethnicity Advisory Council to
support our ethnicity and inclusion strategy. Chaired by Simon
McNamara, nominated diversity and inclusion specialists from
different industries will provide critical challenge, guidance,
and direction on our strategy.
Disability smart
In 2021, we re-launched a career development programme
on a virtual platform for colleagues with a disability to explore
common barriers which impede progress and provide access
to tools and techniques to help overcome them.
We undertook a discovery session with Lexxic (specialist
psychology consultants) to help us create an environment
where neurodiversity can flourish. This helped inform us of
areas for improvement, with the aim of exploring how to
60 NatWest Group 2021 Annual Report and Accounts

become an even more neuroinclusive employer. We have
a roadmap in place, with five key areas: governance and
strategy; awareness and education; positive management
culture; attracting and retaining neurodiverse talent; and
future ways of working.
Since 2019 we have sponsored the Business Disability
Forum’s (BDF) Scottish Disability Conference, bringing together
organisations to support each other in becoming disability
smart. In 2021, the conference ran virtually and consisted
of workshops which facilitated group discussions on topics
including disability and diversity in the wake of COVID-19, how
to have conversations about disability at work, and supporting
neurodiverse colleagues in the workplace. The workshops had
more than 330 attendees.
In 2021, we refreshed our disability smart e-learning module
to help colleagues understand how we can be more inclusive
and accessible for all colleagues and customers. The module
included an overview of why accessibility is important
from our Executive Sponsor for Disability, Oliver Holbourn
(Director of Strategy & Ventures) and featured colleagues
sharing experiences.
Our efforts to be disability smart are recognised through a gold
rating in the BDF benchmark and Leader (the highest level)
status in the UK Government’s Disability Confident Scheme.
In India, we launched an On-Demand Sign Language
programme to facilitate access to sign language interpreters
for colleagues with hearing impairments for one-on-one
discussion and team meetings. NatWest Group India received
special recognition for disability smart work practices at the
GPTW Diversity & Inclusion Award Summit 2021. In Poland, we
ran a ‘Becoming Disability Smart’ project to increase support
for colleagues with disabilities. A new assistive technology
and workplace adjustment process was introduced, as well
as updated safety arrangements for disabled colleagues.
LGBT+ innovative
In 2021, we celebrated Pride by running a host of different
events that celebrated some of the successes we’ve had with
progressing our work. We also participated in the UK Stonewall
Workplace Equality Index to understand what more we can
do to support our LGBT+ colleagues and customers. This will
provide us with a definitive benchmark and allow us to assess
our achievements and progress on LGBT+ equality going
forward. Our Executive Sponsor for LGBT+, Jen Tippin (Chief
People & Transformation Officer), is guiding and shaping our
roadmap for the future.
During 2021, we created a new LGBT+ e-learning module
to be launched in 2022. The module focuses on establishing
colleagues’ understanding of various subjects across the gender
identity and sexual orientation spectrum. Our global learning
uses colleagues’ perspectives and insights from external
partners to enhance understanding. We also reviewed and
updated our international travel safety guidance for LGBT+
colleagues and our family friendly policies to ensure language
and scenarios are LGBT+ inclusive.
As a founding partner of the British LGBT Awards in 2015,
we continued our support in 2021 as a sponsor. The awards
2021 UK ethnicity profile by level
#Black,
Asian and
Minority
Ethnic
#White
%Black,
Asian and
Minority
Ethnic
CEO-3 and above combined 52 566 8
CEO-4 262 2,018 11
CEO-5 886 5,171 15
Target population
(CEO-4 and above combined)
314 2,584 11
(*)
2021 Global gender profile by level
#Women #Men %Women
CEO 1 – 100
CEO-1 3 12 20
CEO-2 48 80 38
CEO-3 270 429 39
CEO-4 1,298 1,863 41
Target population
(CEO-3 and above combined)
322 521 38
(*)
Note: Our reporting reflects our organisational (CEO) levels. This is more reflective of
our organisational structure and enables comparison to be made externally. To maintain
integrity, we remove colleagues from our reporting that sit in CEO-3 and above that do
not hold leadership or influential roles.
For ethnicity: Our reporting only includes colleagues who have disclosed their ethnicity.
We report CEO to CEO-3 as a total to comply with GDPR restrictions.
For gender: There are differences between CEO and CEO-1 reporting versus reporting
on the gender balance of our Executive Management Team. Female representation on
our Executive Management Team is 29%
Male Female
Directors of the company 7 4
Executive employees 72 24
Director of subsidiaries 189 68
Permanent colleagues
(active and inactive)
30,000 29,500
There were 353 senior managers (in accordance with the definition
contained within the relevant Companies Act legislation), which
comprises our executive population and individuals who are
directors of our subsidiaries.
(*) Within the scope of EY assurance. Refer to page 78.
spotlight organisations working to better meet the needs of
LGBT+ people. In 2021, Jen Tippin delivered a keynote speech
at the awards and presented the lifetime achievement award.
NatWest Group India received special recognition for LGBT+
workplace practices at the GPTW 2021 Diversity & Inclusion
Award Summit. In Poland, we once again hosted and
organised the NatWest LGBT+ Business Awards in recognition
of organisations and influencers making a real difference to
the lives of LGBT+ people in a very challenging climate.
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Stakeholder focus areas continued
Young people have been hit hard by
the pandemic. From disrupted study
time to reduced job prospects, the
current generation of pupils and
school leavers will be feeling the
shockwaves of COVID-19 for a long
time to come. – Bless Chiwanda
Stronger together
Making a positive contribution to the communities
in which we live and work is integral to delivering
on our purpose.
The last two years have been incredibly tough for many
of our customers, but we have also seen the remarkable
collective support that happens when people come together.
We firmly believe NatWest Group has a role to play in this
process, positively impacting communities at both a local
and national level.
Focused on our communities
During the year we worked with the Centre for Social Justice
(CSJ) to carry out dedicated research into community strength:
‘Pillars of the Community’ explored what government, business
and the third sector can do to strengthen local communities as
the UK recovers from the pandemic. The research identified
the barriers that prevent local communities from thriving and
set out a range of policy initiatives that could help to overcome
these barriers.
We were also once again in regular contact with our
communities, including through our regional boards,
leveraging existing relationships and forming new ones. Our
seven regional boards are key to delivering the bank’s strategy
at a local level and championing potential across the UK. With
membership drawn from across the bank, the local insight and
strong teamwork of the boards is vital in demonstrating our
purpose to the communities we are part of.
The boards have been particularly important during
the pandemic, bringing people together to help serve our
customers and support our colleagues. In 2021, the regional
boards continued to focus on engaging with colleagues,
customers and communities across the nations and regions
of the UK, particularly in the areas of climate, learning
and enterprise.
Real-life support
We believe in supporting our customers with practical
measures that can help them in their day-to-day lives.
In doing so, we can provide part of the vital infrastructure
that communities need to live and thrive, such as our mobile
banking fleet, which visited nearly 600 communities every
week in 2021.
In response to the pandemic we have changed the way we
interact with our customers and communities, launching video
banking so our customers can meet with us from the comfort
of any location they choose. Elsewhere, NatWest Group’s
collaborations with Business in The Community (BITC), Hatch
and Digital Boost are another vital link with our business
communities, providing access to networks, sponsorship
and mentorship opportunities.
Helping young people into work
In 2021, we launched our ‘CareerSense’ programme – which
provides free-to-access tools to develop critical skills and
support youth employability prospects for 13 to 24-year-olds –
especially for those from low-income families and Black, Asian
and Minority Ethnic backgrounds. In November 2021, we also
Communities
Our CareerSense
programme
Supporting young people into workplaces
Bless Chiwanda
Journey Developer
welcomed our first cohort to the CareerSense ‘Find Your Path’,
an initiative for young people not in employment, education or
training, which has been created and delivered in partnership
with regional youth delivery partners. The scheme helps young
people to benefit from a range of skills-development sessions,
mentoring and paid work experience.
To support the CareerSense programme we have developed
the mycareersense.com website, which offers access to a
range of free tools and resources, as well as the learning
content accessed through our NatWest Learning Academy.
In addition, we launched an external learning academy
‘Learning with NatWest’ in November 2021 which supports
communities, families and businesses (both customers and
non-customers), focusing on five key capabilities: climate;
employability; entrepreneurship and enterprise; future skills;
and financial capability. For more information, please refer
to our NatWest Group ESG Supplement.
So, when NatWest Group launched the CareerSense
programme in 2021, I saw it as great way of offering some
practical help, and welcomed the opportunity to get
involved.
Along with almost 600 of my colleagues, who
have also volunteered, I became a CareerSense
Ambassador: a role that has involved me supporting a local
high school in Edinburgh, running sessions for S4 pupils.
The experience has been great. Not just because of
the positive feedback from the school, but because I’ve
been able to see so many of the young people get engaged
about their next steps. It’s also given me the opportunity
to reflect on my own personal development. To think
about the skills and behaviours I use daily to deliver
my work, while also making a positive change to my
local community.
Since its launch in June 2021, over 8,200 pupils have
registered to attend a skills exploration workshop. That’s a
lot of young people getting the career support they need.
62 NatWest Group 2021 Annual Report and Accounts

Our Supplier Charter
As a purpose-led business, we foster strong
relationships with all our key stakeholders,
including our supply chains. In 2022, our ambition
is to quantify the impact of all supplier activities
through a supplier engagement framework.
A key milestone towards this ambition was the launch of
the NatWest Group ‘Supplier Charter’ in September 2020.
The charter sets out our aims and expectations in the areas
of ethical business conduct, human rights, environmental
sustainability, diversity and inclusion, the Living Wage and
prompt payment. It details what we expect from our suppliers,
but also outlines our own commitments in these key areas and
the outcomes we aim to achieve by working together. In 2021,
led by NatWest Group’s Chief Administrative Officer and with
collaboration from subject matter experts and policy owners,
we completed our first annual review of the charter.
Central to the aims of charter, we worked with EcoVadis
– a leading organisation providing third-party, evidence-based
assessments of sustainability performance. EcoVadis is helping
us to understand and measure our own performance and that
of our suppliers against the charter, enabling us to identify
social, environmental and ethical improvements. NatWest
Group has made significant progress in the first year of
working with EcoVadis, with 834 suppliers invited to take
part in the assessment, representing over 85% of our in-scope
supplier spend. During 2021, NatWest Group Supply Chain
Services has delivered the biggest and fastest deployment
of EcoVadis supplier sustainability assessments in the UK.
Continuing to support our suppliers
We are determined to pay our suppliers promptly for the
services that they provide to us. Our standard payment
terms are normally 30 days. However, from earlier on in the
COVID-19 pandemic and since, we have maintained immediate
payment on receipt of goods and services whenever possible.
This supports our suppliers during this difficult financial period
and goes beyond our commitment undertaken as a signatory
to the UK Government’s ‘Prompt Payment Code’, which
requires payment to be made in 60 days.
Ongoing dialogue
We operate in a highly regulated market
which continues to evolve in scope. As such,
we understand the need to have an ongoing,
constructive and open dialogue with all relevant
regulatory bodies.
During 2021, this included bilateral responses to material
consultations or other requests for comment/input issued by
various government, regulatory and standard-setting bodies.
Key consultations that NatWest Group has responded to
bilaterally include the FCA’s Consumer Duty proposals; its
work on diversity and inclusion; the UK Government’s plans
for audit and corporate governance reform; the independent
review of Ring-fencing and Proprietary Trading; and the
Payment Systems Regulator’s proposals on Authorised
Push Payment (APP) scams.
We formally engage with our regulators, at both senior
executive and Board level, as well as via individual non-
executive directors, through continuous assessment and
proactive engagement meetings. Most notably, during 2021,
we kept our regulators fully informed of any contingencies
and impacts on our operations as a result of COVID-19.
This has been particularly relevant for monitoring compliance
with the Financial Conduct Authority’s Senior Managers
and Certification Regime to ensure that all governance
arrangements across NatWest Group have been kept under
review in the context of the pandemic. We have also engaged
with regulators during policy proposal phases on a number of
occasions to help inform priorities.
SuppliersRegulators
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Climate-related disclosures overview
Climate-related
disclosures
We recognise that climate change is a global issue which has
significant implications for our customers, employees, suppliers,
partners, investors and therefore NatWest Group itself.
Our ambition is to be a leading bank in the UK helping to
address the climate challenge. We have set ourselves the
challenge to halve the climate impact of our financing activity
by 2030 and to become net zero
(1)
by 2050.
NatWest Group confirms that it has:
– made climate related financial disclosures for the year ended December 31, 2021 that it believes are consistent with the Task
Force on Climate-related Financial Disclosures (“TCFD”) Recommendations and Recommended Disclosures (as defined in
Appendix 1 of the Financial Conduct Authority Listing Rules) and summarised in the tables on pages 66-69;
– set out these disclosures in its “2021 NatWest Group Climate-related Disclosures Report” (the “Climate Report”), published today
(and available on natwestgroup.com); and
– adopted this approach given the detailed and technical content of the climate-related financial disclosures as it believes these
presentations best present its climate related financial disclosures in a decision-useful manner to the users of those reports.
(1) Science Based Targets initiative (SBTi) defines net zero as reducing Scope 1, 2 and 3 emissions to zero or to a residual level that is consistent with reaching net-zero emissions at a
global or sector level in eligible 1.5 degree-aligned pathways.
(2) Upstream operational value chain emissions are all the indirect Scope 3 emissions required for our operations to occur, including emissions from our suppliers, energy creation and
transport to our facilities, and our mail. Downstream operational value chain emissions are all of the indirect Scope 3 emissions associated with our operations during and after serving
our customers, including customer transport to and from our facilities, how our products are used and how they are disposed of.
Accelerating
the speed of
transition to a
net-zero
economy
Helping to
end the most
harmful activity
Championing
climate
solutions
Net-zero
emissions for
our operational
value chain
(2)
Embedding
climate into
our culture and
decision-making
Net zero by 2050
64 NatWest Group 2021 Annual Report and Accounts

Climate ambition statements
A leading bank in the UK helping
to address the climate challenge
We have an ambition to achieve net zero by 2050, this includes:
– Financed emissions: Greenhouse gas emissions from loans and investments activity, attributable to NatWest Group.
– Assets under management: Greenhouse gas emissions associated with our discretionarily managed assets.
– Our operational value chain: Greenhouse gas emissions related to the upstream and downstream activities associated with
our operations.
Helping to end the most harmful activity
– We plan to phase out of coal for UK and non-UK customers
who have UK coal production, coal fired generation and
coal related infrastructure by 1 October 2024, with a full
global phase out by 1 January 2030.
Embedding climate into our culture and
decision-making
– Each year, we plan to include targets for executive
remuneration that reflect our latest climate ambitions.
– We have an ambition to at least halve the climate impact
of our financing activity by 2030 and align with the 2015
Paris Agreement. To do this, we plan to quantify our climate
impact and set sector-specific targets by the end of 2022.
– We plan to continue the integration of the financial and
non-financial risks arising from climate change into our
enterprise wide risk management framework (EWRMF).
Net-zero emissions for our operational
value chain
– We have a target to reduce our direct
(3)
own operations
carbon footprint by 50% by 2025, against a 2019 baseline.
– We plan to reduce the carbon footprint for our wider
operational value chain by 50%, against a 2019 baseline,
by 2030 and achieve net zero by 2050.
– We plan to use only renewable electricity in our direct own
global operations by 2025 (RE100) and improve our energy
productivity 40% by 2025 against a 2015 baseline (EP100).
– We plan to install electric vehicle charging infrastructure in
15% of spaces across our UK portfolio by 2030 and upgrade
our fleet of 300 vehicles to electric by 2025 (EV100).
Accelerating the speed of transition to a
net-zero economy
Championing climate solutions
– We have a target to provide £100 billion Climate and
Sustainable Funding and Financing between 1 July 2021
and the end of 2025.
– We have an ambition to support our UK mortgage
customers to increase their residential energy efficiency and
incentivise purchasing of the most energy efficient homes,
with an ambition that 50% of our mortgage portfolio has
an EPC rating of C or above by 2030.
– We plan to collaborate cross industry and create
products and services to enable customers to track
their carbon impact.
– We plan to reduce the carbon intensity of our funds and
discretionary portfolios by 50% by 2030 and to achieve
net zero on discretionarily managed assets by 2050.
For our full report, refer to
the 2021 Climate-related
Disclosures Report
(3) Our Scope 1, Scope 2 and Scope 3 (paper, water, waste, business, travel commuting, work from home). Excludes upstream and
downstream emissions from our wider operational value chain as well as financed emissions.
Net zero by 2050
65NatWest Group 2021 Annual Report and Accounts
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Financial review Governance Risk and capital management Additional informationFinancial statements

Governance
NatWest Group’s governance around climate-related risks and opportunities
The Board’s oversight of climate-related risks and opportunities
Summary
– Board monitoring and oversight of climate-related risks and opportunities is supported by clear roles and responsibilities
for the Board and Board Committees, as well as regular management reporting on climate strategy, ambition, and risk
management activities.
– Key Board level decisions and areas of discussion and/or challenge related to climate strategy, climate scenario analysis,
risk appetite, reporting controls and embedding climate measures within remuneration and performance structures.
– The Boards of NatWest Group’s principal subsidiaries exercised oversight of key climate-related risks and opportunities through
regular risk reporting and management updates.
Future priorities
– Continue to oversee progress against NatWest Group’s climate ambitions and targets, particularly long term reduction in financed
emissions and development of transition plans to support this.
– Continue to build knowledge at Board level and to support the directors in addressing and overseeing climate-related risks within
NatWest Group’s overall business strategy and risk appetite.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 2.1, 2.2.
Management’s role in assessing and managing climate-related risks and opportunities
Summary
– NatWest Group CEO and Chief Risk Officer jointly share accountability under the Senior Managers and Certification Regime for
identifying and managing the financial risk of climate change.
– This responsibility is delegated amongst the Executive and senior leadership teams. Cross-bank climate-related groups, advisory
teams and committee structures support with collaboration, escalation, and additional controls.
– The Climate Change Executive Steering Group acts as the primary management forum responsible for overseeing direction and
progress on NatWest Group’s climate-related commitments.
Future priorities
– Further embed operating models and business processes to support the management of climate-related risks and opportunities,
including coordination of actions to support further development and execution of climate transition plans.
– Continue to maintain a One Bank approach to climate strategy development and transition plans, including at subsidiary levels.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 2.1, 2.3.
Climate-related
disclosures overview
NatWest Group publicly committed to support the Financial Stability Board’s Task Force on
Climate-related Financial Disclosures (TCFD) recommendations in 2017. Our first stand-alone
2020 Climate-related Disclosures Report provided updates on climate as a key focus area
for NatWest Group.
During 2021, we have continued to progress our work and the tables on the following pages
summarise the content of the 2021 Climate-related Disclosures Report. Please refer to the
NatWest Group plc 2021 Climate-related Disclosures Report for further detail.
Disclosures summary
66 NatWest Group 2021 Annual Report and Accounts

Strategy
The actual and potential impacts of climate-related risks and opportunities on NatWest Group’s businesses, strategy
and financial planning
Climate-related risks and opportunities identified over the short, medium and long term
Summary
– NatWest Group’s climate ambition, announced in February 2020, recognises various short, medium and long-term climate-related
risks and opportunities to embed climate in our business and culture, as well as support our customers in their transition to net zero.
Future priorities
– Further enhance capabilities associated with climate-related risks and opportunities measurement.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 1.1, 1.2, 1.3, 1.4, 3.1, 3.2, 3.3, 3.4, 3.5, 4.3, 5.1.
The impact of climate-related risks and opportunities on our businesses, strategy and financial planning
Summary
– NatWest Group made a number of environmental, social and ethical (ESE) policy updates during 2021 to help end the most
harmful activity and concluded a credible transition plan (CTP) assessments for oil and gas majors and in scope coal customers.
This supported our stated ambition to stop lending and underwriting to companies with more than 15% of activities related to
thermal and lignite coal, unless they had a CTP in line with the 2015 Paris Agreement in place by the end of 2021.
– We continued to harness climate-related opportunities. We exceeded our 2020-2021 Climate and Sustainable Funding and Financing
target in under 18 months and supported our retail customers with a range of Green Mortgage products.
– Our work on climate scenario analysis has supported our assessment of climate related risks and opportunities and helped re-affirm
our climate ambition. We continued to build powerful partnerships, acting as principal partner at COP26, and becoming a founding
member of the Net Zero Banking Alliance and Glasgow Financial Alliance for Net Zero (GFANZ).
– We worked to incorporate climate in the financial planning process by developing our first carbon plan. This included an assessment
of carbon impacts of current and planned climate-related opportunities as well as climate-related risks, particularly those related to
dependencies on future policy and technology development.
Future priorities
– Continue to integrate climate in business activities.
– Further enhance carbon planning capability to support the development of transition plans to measure and track our progress
towards our ambition to halve the climate impact of our financing activity by 2030.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 1.1, 1.2, 1.3, 1.4, 3.1, 3.2, 3.3, 3.4, 3.5. 3.6, 3.7, 3.8.
The resilience of our strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario
Summary
– During 2021, NatWest Group has developed its scenario analysis capabilities and deepened its understanding of climate-related
risks and opportunities through its participation in the Bank of England’s Climate Biennial Exploratory Scenario (CBES) exercise.
NatWest Group has also taken further steps to translate these insights into tangible action that will enable us and our customers
to mitigate climate-related risks and take advantage of the opportunities that the transition to net zero will create.
– NatWest Group has used three scenarios published by the Bank of England for its CBES exercise as the foundation for its scenario
analysis, including an early action scenario which assumes the increase in global temperature is limited to under 2.0°C. Also,
scenarios have been used to estimate financed emissions reductions required by 2030 to support our net zero by 2050 ambition.
Future priorities
– Continue to enhance scenario modelling and analytic capabilities.
– Continue to address significant challenges related to the availability of granular customer data.
– Respond to developing regulatory requirements on the approach to climate-related risk within the regulatory capital regime.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 3.4, 3.7, 3.8, 5.7.
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67NatWest Group 2021 Annual Report and Accounts
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Risk Management
How NatWest Group identifies, assesses, and manages climate-related risks
Our processes for identifying and assessing climate-related risks
Summary
– Climate risk was incorporated into the NatWest Group risk directory as a principal risk in February 2021 and in April, Board Risk
Committee approved a principles-based climate risk policy that defined the key requirements for the identification, assessment,
and management of climate risk, through the incorporation of climate considerations in key risk management processes.
– We completed a qualitative assessment of the current and potential impact of physical and transition climate risk as a causal
factor to other risks. This assessment of relative significance identified the following principal risks as being most exposed to
climate-related impacts: credit risk; operational risk; reputational risk; conduct risk and regulatory compliance risk.
– NatWest Group regularly considers existing and emerging regulatory requirements related to climate change through external
horizon scanning and monitoring of emerging regulatory requirements which is completed by our Legal, Governance and
Regulatory Affairs team.
Future priorities
Continue enhancements to our enterprise wide risk toolkit to support identification and assessment of risk impact on other principal risks.
References
NatWest Group plc 2021 Climate-related Disclosures Report – section 3.1, 3.2, 4.1.
Our processes for managing climate-related risks
Summary
– The management of climate risk is largely delivered through three mechanisms: scenario analysis, long-term balance sheet
transformation and enhanced climate risk data capabilities.
– NatWest Group has established a climate risk appetite statement, determining the level of risk which the climate risk policy seeks
to operate within.
– A climate maturity rating was developed, which supports ongoing assessment of climate risk management throughout
the organisation. This approach translated NatWest Group’s climate risk policy into thematic management outcomes.
– As at 31 December 2021, NatWest Group has achieved first generation implementation of climate risk management, with a
predominantly qualitative approach to internal risk policy outcomes, covering priority sectors or customers. Where quantitative
approaches are applied, they are predominantly conducted on an ad hoc basis.
Future priorities
– Work will continue to further integrate climate-related risk across business processes to achieve full integration within risk
management and decision-making.
– Future target state includes, but is not limited to, climate risk being systematically captured as a quantified risk factor within lending
and risk decision-making, informing limits and pricing.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 3.1, 3.2, 4.2.
How our processes for identifying, assessing, and managing climate-related risks are integrated into overall risk management
Summary
– Retail credit risk: A review of EPC and flood impact was finalised for the Retail Banking residential mortgage portfolio; Credit
oversight tracking of EPC and flood risk concentrations have been developed. In addition, preliminary climate operational
measures were developed.
– Wholesale credit risk: Continued evolution of our credit risk frameworks to incorporate climate risk, for example its inclusion
in Transaction Acceptance Standards (TAS) and in climate commentary within credit applications for the majority of the
wholesale portfolio.
– Operational risk: NatWest Group-wide operational risk climate scenarios were completed in 2021. Two distinct extreme heat
scenarios were considered.
– Reputational risk: Review of risk acceptance criteria (RAC) suite to validate the sectors which present high environmental, social
and ethical (ESE) risk.
– Conduct risk and regulatory compliance risk: Supported the development and embedding of climate focused questions which have
been embedded into the existing governance processes.
Future priorities
– Continue to assess impact of climate-related risks on NatWest Group’s financial and non-financial risk profile as part of risk and
control assessment of relevant processes.
– Further embedding of climate considerations in product design and lending decisions through the use of climate risk data
(EPC and flood analysis, CBES findings).
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 3.1, 3.2, 4.3.
Disclosures summary continued
68 NatWest Group 2021 Annual Report and Accounts

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Metric and Targets
The metrics and targets used to assess and manage relevant climate-related risks and opportunities where such
information is material
The metrics used to assess climate-related risks and opportunities in line with our strategy and risk management process
Summary
Metrics used to assess climate-related risks:
– Exposures to heightened climate-related risk sectors.
– Energy efficiency and flood risk assessment for Retail Banking residential mortgage portfolio.
– Capital markets transactions.
– NatWest Group own operational footprint.
– Estimates of financed emissions and emission intensities.
Metrics used to assess climate-related opportunities:
– Climate and Sustainable Funding and Financing.
– NatWest Group Own Green Bond issuance.
We added performance against climate targets as part of the bonus pool assessment for our wider workforce. Refer to the Directors’
Remuneration Report in the NatWest Group plc 2021 Annual Report and Accounts for further details.
Future priorities
We will continue to develop metrics and measurement capabilities to monitor and manage climate-related risks and opportunities
during 2022.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 3.4, 4.2, 4.3, 5.1, 5.2, 5.3, 5.4, 5.5, 5.6., 5.7.
Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.
Summary
We continued to develop and enhance capabilities to measure our carbon footprint in relation to our own operational footprint as
well as financed emissions:
– We reduced our direct own operations carbon footprint by 46% against a 2019 baseline, and increased our renewable electricity
consumption to 97%.
– We worked on enhancing our capabilities across an additional eight emissions intensive wholesale sectors. We also extended the
scope of emissions calculations for the oil and gas sector beyond extraction activities covered in 2020. We have now analysed
52% of our loans and investment portfolio based on 2019 gross on-balance sheet loans and investments.
Future priorities
– To support our commitments to the Net Zero Banking Alliance, we will align to the Science Based Targets initiative’s (SBTi)
definition and account for the wider value chain, including suppliers, for our own operational footprint.
– We have submitted our 2030 sector emissions reduction estimates to SBTi for validation and will continue our work to enhance
availability of data to support future calculations of financed emissions and emissions intensities.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 5.6, 5.7, 5.8.
The targets used by the organisation to manage climate-related risks and opportunities and performance against targets
Summary
Our stated climate ambition is to be a leading bank in the UK helping to address the climate challenge. We have committed to achieve
net zero by 2050 across our financed emissions, assets under management and our operational value chain. Progress is monitored via
climate-related targets and ambitions across the following thematic opportunities:
– Accelerating the speed of transition.
– Helping to end the most harmful activity.
– Championing climate solutions.
– Embedding climate into our culture and decision-making.
– Net zero for our operational value chain.
Future priorities
We will continue to monitor our performance against our climate-related targets and ambitions and revise, as appropriate.
References
NatWest Group plc 2021 Climate-related Disclosures Report – sections 1.1, 3.5, 5.
69NatWest Group 2021 Annual Report and Accounts
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Financial review Governance Risk and capital management Additional informationFinancial statements

Own operational footprint
Own operational
footprint
During 2021
(1)
, we reduced our direct own operations
(2)
carbon footprint
(3)
46% against 2019 baseline, and increased
our renewable electricity consumption to 97%.
Net-zero carbon
(3)
We plan to reduce the carbon footprint for our wider operational
value chain by 50% (against a 2019 baseline) by 2030 and
achieve net zero by 2050.
While there was previously no standard definition of net zero,
as part of COP26, in October 2021 the SBTi released the
‘SBTi Corporate Net Zero Standard’, the world’s first net zero
framework which encapsulates the full value chain of Scope 3
and deep decarbonisation targets. To support NatWest Group’s
public commitments to the Net Zero Banking Alliance, we plan
to align to the SBTi’s definition for own operations and also
account for the wider value
(4)
chain, including suppliers. We
have a target to reduce our direct own operations carbon
footprint by 50% by 2025 (2019 baseline) and plan to halve the
carbon footprint of our wider operational value chain by 2030,
with minimum 90% decarbonisation by 2050 for all emissions
(refer section 5.7 of the NatWest Group plc 2021 Climate-
related Disclosures Report for approach to financed emissions).
We intend to neutralise the remaining 10% of emissions with
high quality internationally recognised carbon credits
(5)
to
achieve net zero. We plan to continue making significant
emission reductions within our own operations, alongside
investments to mitigate GHG emissions through carbon
removal projects, programmes and solutions that provide
benefits to climate, especially those that generate additional
co-benefits for people and nature, in line with SBTi guidance.
As the first part of our journey, we are disclosing an initial view
of our upstream emissions for our 2021 footprint, with a plan
to refine this view and disclose our downstream emissions for
2022. Further, from 2022, NatWest Group will be using the
outputs from our 2021 energy audits to run a programme to
improve our building EPC ratings, reducing our climate impact.
Our 2021 total market-based operational footprint 66,149
tCO
2
e covers Scopes 1, 2 and our direct own operation
upstream Scope 3. This includes emission reductions from
the use of green electricity covering 97% of our consumption
through green tariffs and renewable electricity certificates,
but in accordance with the Greenhouse Gas Protocol, it does
not include emissions reduction from the use of carbon credits.
Further detail on our decarbonisation plans can be found
on page 71 of the NatWest Group plc 2021 Climate-related
Disclosures Report.
When announcing our Climate Positive
(6)
ambition in February
2020, the wide-ranging impacts from COVID-19 could not have
(1) Our own operational footprint reporting year runs from October 2020 to September 2021.
(2) NatWest Group defines direct own operations as our Scope 1, Scope 2 and Scope 3 (paper, water, waste, business travel, commuting and work from home) emissions. It therefore
excludes upstream and downstream emissions from our value chain.
(3) Carbon/carbon footprint in this section refers to GHG emissions reported as carbon dioxide equivalent.
(4) Upstream operational value chain emissions are all the indirect Scope 3 emissions required for our operations to occur, including emissions from our suppliers, energy creation and
transport to our facilities, and our mail. Downstream operational value chain emissions are all of the indirect Scope 3 emissions associated with our operations during and after serving
our customers, including customer transport to and from our facilities, how our products are used and how they are disposed of.
(5) NatWest Group used carbon credits for our 2021 achievement. These projects remove carbon from the atmosphere through tree planting and are dual-validated and verified under the
Verified Carbon Standard (VCS) and Climate, Community and Biodiversity Standards (CCB).
(6) NatWest Group defines Climate Positive as reducing location-based emissions from our direct own operations 25% from our 2019 baseline and using carbon credits to neutralise our
baseline market-based emissions of 120,000 tCO
2
e.
been anticipated. By procuring a minimum 120,000 tCO
2
e in
carbon credits, in line with our market-based 2019 baseline,
while simultaneously reducing emissions from our own
operations, we have already achieved our ambition to be
Climate Positive in 2021 for our direct own operations. We
used 120,000 tCO
2
e of internationally recognised carbon
credits which add environmental, social and community
benefits compared to the 2021 residual market-based 66,149
tCO
2
e Scope 1, 2 and 3 emissions. We had previously targeted
a 25% reduction in emissions from our direct own operations
by 2025 (2019 baseline) but are now increasing this to 50% as
we seek to build on the emissions reductions that have already
occurred.
Energy and carbon
In 2021, we reduced our direct operational Scope 1, 2 and 3
(business travel, paper, waste, water, commuting and work
from home) emissions by 46% against a 2019 baseline. This has
been through a number of emission reduction activities as well
as impacts from COVID-19.
Despite COVID-19, a number of key projects were still
completed in 2021. Notable highlights include:
– Renewable power: NatWest Group has partnered to
develop a solar generation facility in the UK under a
corporate power purchase agreement. The facility is due
to start generating low-carbon electricity for the bank
from 2024 and will bring additional renewable generation
capacity online to facilitate the decarbonisation of the UK
power grid. Once constructed, the facility is expected to
generate 40% of NatWest’s electricity demand in the UK.
– Branch investments: The high-performance specification
implemented for a branch fit-out in Bristol meant that we
achieved an energy performance rating of ‘B’ and achieved
Royal Institute of Chartered Surveyors (RICS) SKA Silver
rating in terms of the design’s broader sustainable design.
– Lifts: The first phase of a replacement passenger lift system
at our offices at 250 Bishopsgate, London, leading to a 30%
reduction in the energy use of the lifts; making the lifts ‘A’
rated in terms of energy.
– Building Management System investment: In our Coutts
head office we have invested in ‘out BMS controllers’ which
have provided a better environment for our colleagues and
enable more efficient energy management from the facilities
management team. We have also installed dashboard
screens in the customer and colleague areas in both the
Coutts head office and 250 Bishopsgate to educate on
the energy usage of the buildings.
70 NatWest Group 2021 Annual Report and Accounts

Streamlined energy and carbon reporting
2021 2020
Greenhouse gas (GHG) emissions
UK and
offshore
(1)
area
Global total
(excluding UK
and offshore)’
UK and offshore
(1)
area
Global total
(excluding UK
and offshore)
Emissions from the combustion of fuel and operation of any facility
(Scope 1
(2)
Direct) CO
2
e (tonnes)
(*)
17,464 1,663 18,443 1,921
Emissions from the purchase of electricity, heat, steam or cooling by
the company for its own use (Scope 2
(3)
Indirect) Location-based
CO
2
e emissions (tonnes)
(*)
52,735 16,305 63,841 23,057
Total gross Scope 1 & Scope 2 (location-based) emissions CO
2
e (tonnes)
(*)
70,199 17,968 82,284 24,977
Energy consumption used to calculate above emissions (kWh) 329,396,747 40,652,346 347,909,621 49,510,271
Intensity ratio: Location-based CO
2
e emissions per FTE (Scope 1 & 2)
(tonnes/FTE)
1.71 1.03 1.83 1.37
Scope 3
(4)
CO
2
e emissions from direct operations, paper, water, waste,
business travel, commuting and working from home (tonnes)
(*)
36,016 8,855 38,502 14,967
Total gross CO
2
e emissions for direct operations (Scope 1, location-based
Scope 2, Scope 3) (tonnes)
(*)
106,215 26,823 120,787 39,944
Intensity ratio: Location-based CO
2
e emissions per FTE (Scope 1, 2 & direct
operations Scope 3) (tonnes/FTE)
2.59 1.54 2.69 2.19
Scope 2
(5)
(Indirect) Market-based CO
2
e emissions (tonnes)
(*)
12 2,139 8,860 2,346
Emissions methodology and basis of preparation
Boundary: We have reported on all emission sources required under the Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018. Our reporting year runs from October 2020 to September 2021.
The emissions reporting boundary is defined as all entities and facilities either owned or under our operational control.
Calculation: Emissions have been calculated using the Greenhouse Gas Protocol Corporate Standard and associated guidance and
include all greenhouse gases, reported in tonnes of carbon dioxide equivalent (CO
2
e) and global warming potential values. When
converting data to carbon emissions, we use Emission Factors from UK Government Emissions Conversion Factors for Company
Reporting (Department for Business, Energy & Industrial Strategy, 2021), CO
2
emissions from fuel combustion (International Energy
Agency, 2021) or relevant local authorities as required. NatWest Group utilises a third-party software system, Envizi, to capture and
record our environmental impact and ensure audit requirements are met. All data is aggregated at a regional level to reflect the
total regional consumption. The regional consumption results are then collated to reflect the total NatWest Group footprint. CO
2
e
values are attributed to these sources via an automatic conversion module in the Envizi system. For more information, please see
the own operational footprint page on natwestgroup.com.
(1) Offshore area as defined in The Companies (Directors Report) and Limited Liability Partnerships (Energy and Carbon) Regulations 2018. This includes Jersey and Guernsey but not our
overseas sites in America, EMEA and Asia-Pacific. These are included in the global total (excluding UK and offshore).
(2) Scope 1 emissions from natural gas, liquid fossil fuels, fluorinated gas losses and owned/leased vehicles.
(3) Scope 2 emissions from electricity, district heating and cooling used in NatWest Group premises.
(4) Scope 3 emissions from paper and water, category 5: waste (UK and RoI only), category 6: business travel including air, rail, hired vehicles and our grey fleet, category 7: employee
commuting and working from home.
(5) Market-based Scope 2 emissions. UK market-based emissions have dropped 99% (to 12 tCO
2
e) as we have procured 100% of the electricity we have consumed from renewable
sources using green tariffs and renewable electricity certificates, whereas in 2020, we sourced 90% of our UK electricity from renewable sources, with the remaining 10% accounting
for 8,848 tCO
2
e. The 12 tCO
2
e arises from district cooling and district heating, which is used at only a few sites.
(*) Within the scope of EY assurance (2021 only).
71NatWest Group 2021 Annual Report and Accounts
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Risk overview
Risk management
Risk is an inherent part of doing business. Some types of
risk – such as credit risk or market risk for example – are an
integral part of NatWest Group’s day-to-day activities and a
vital part of revenue generation. Other risks, such as those
arising from changes in the economy or the competitive
landscape, are an inescapable part of the environment in
which NatWest Group operates and must also be managed
and mitigated.
Effective risk management is a vital element of ensuring
NatWest Group is able to achieve its long-term strategy
and fulfil its purpose.
NatWest Group operates an enterprise-wide risk management
framework. The framework – which is supported by policies,
standards and operational procedures – sets out a consistent
approach to managing risk across the organisation. It is
aligned to NatWest Group’s purpose and is designed to
support intelligent risk-taking.
While the Board reviews and approves the framework, all
colleagues share ownership of risk management. The industry-
standard three lines of defence approach is used to define
responsibilities. This aims to ensure that risks are properly
identified and assessed, managed and mitigated, monitored
and reported.
NatWest Group’s independent Risk function designs and
maintains the framework. The Risk function – which is led by
the Chief Risk Officer – also provides oversight and monitoring
of all risk management activities. The Chief Risk Officer plays
an integral role in providing the Board with advice on NatWest
Group’s risk profile, the performance of its controls and in
providing challenge where a proposed business strategy
may exceed risk tolerance.
NatWest Group has identified a number of principal risks.
These are risks that are an inherent part of banking activity
and have the potential to significantly affect NatWest Group’s
performance or prospects. They are categorised as financial
and non-financial principal risks.
In addition, a regular process identifies top and emerging risks.
These are specific scenarios of concern that may combine
elements of several principal risks – or create new types of
threat altogether – and which, without appropriate management
and mitigation, could have a significant negative impact on
NatWest Group’s ability to meet its strategic objectives.
These are detailed on page 75.
Risk appetite is a key component of the framework. It defines
the level and types of risk NatWest Group is willing to take as
part of its business activities. Risk appetite is set in line with
overall strategy and approved by the Board. It supports the
strategic aim of building a sustainable business by providing
colleagues with a structured approach to risk-taking within
agreed boundaries.
Information on the risk profile relative to risk appetite, as well
as details of new and emerging risks, is reported regularly to
the Board and to NatWest Group’s senior risk committees.
Principal financial risks Principal non-financial risks
Credit risk Conduct risk
Traded market risk Financial crime risk
Non-traded market risk Operational risk
Capital adequacy Regulatory compliance risk
Liquidity and funding Model risk
Earnings stability Climate risk
Pension risk Reputational risk
Areas of focus in 2021
The global economy continued to grow, though more
slowly than expected. The aftershocks of the pandemic also
intensified uncertainty around both the pace of recovery and
the longer-term future. Accordingly, risk management played
a critical role throughout the year, focusing both on striking
the correct balance between risk and opportunity, and also
on ensuring that supporting processes, policies and controls
were properly optimised to deal with the heightened risk
environment. Providing a clear risk perimeter allowed NatWest
Group’s customer-facing franchises to operate safely as they
set out to achieve NatWest Group’s purpose of helping people,
families and businesses to thrive.
As a result, NatWest Group’s credit risk profile remained in line
with expectations, though given the heightened uncertainty,
this remained an area of significant risk management focus.
Impairment releases were significant. IFRS 9 forward-looking
expected credit losses for performing assets in Stage 1 and
Stage 2 reduced and actual Stage 3 default charges were
relatively modest. However, NatWest Group anticipates
increased default levels in 2022 as the longer-term impacts
of pandemic-related disruption emerge. Other headwinds,
such as ongoing supply chain challenges and inflation,
have the potential to heighten the credit risk profile.
NatWest Group’s traded and non-traded market risk profiles
were also broadly stable, though the potential second-order
effects of the pandemic on both remain a key risk
management consideration.
Compliance and conduct
Further progress was made on the compliance agenda during
2021. This included the introduction of a digital rules-mapping
platform intended to enhance NatWest Group’s assessment
and implementation of regulatory obligations. In addition,
a new ring-fencing hub was established to provide an
aggregated view of ring-fencing compliance and risk
management. The conduct risk profile also remained a key
focus. In December 2021, the NatWest Markets subsidiary
pleaded guilty to one count of wire fraud and one count of
securities fraud related to historical spoofing conduct by
former employees in US Treasuries markets between 2008 and
2014. As part of the plea agreement, NatWest Markets will pay
Impactful and effective risk management supports NatWest Group
in delivering its strategy and purpose.
72 NatWest Group 2021 Annual Report and Accounts

a criminal fine and a criminal forfeiture as well as restitution.
The plea agreement also imposes an independent corporate
monitor. NatWest Markets has also committed to compliance
programme reviews and improvements. Throughout the year,
with many colleagues working from home, additional controls
around the supervision of certain roles remained in place to
ensure secure and compliant operations. Controls established
to mitigate risks relating to the recording of regulated
communications, the flow of inside information and
management of conflicts of interest also remained a focus.
Financial crime
While work continues to enhance the control environment
relating to financial crime risk, operational weaknesses
between 2012 and 2016 resulted in the inadequate monitoring
of a UK-incorporated NatWest Bank Plc customer. Regulations
require risk-sensitive ongoing monitoring of customers for the
purposes of preventing money laundering. NatWest Bank Plc
co-operated fully with the regulator’s investigation into this
case and, in October 2021, pleaded guilty to three breaches
of the Money Laundering Regulations 2007.
NatWest Group takes its responsibility to prevent and detect
financial crime extremely seriously and continues to make
significant multi-year investments to strengthen and improve
its overall financial crime framework with prevention systems
and capabilities. This investment continued during 2021 and
there was significant risk management focus on the systems
and processes relating to customer due diligence, transaction
monitoring and automated customer screening. NatWest
Group continues to work with law enforcement agencies,
industry bodies and regulators to develop intelligence and
collaborative solutions to prevent financial crime.
Anti-bribery and corruption (ABC)
NatWest Group is committed to ensuring it acts responsibly
and ethically, both when pursuing its own business
opportunities and when awarding business. Consequently,
it has embedded appropriate policies, mandatory procedures
and controls to ensure its employees, and any other parties it
does business with, understand these obligations and abide by
them whenever they act for NatWest Group. ABC training is
mandatory for all staff on an annual basis, with targeted
training appropriate for certain roles. NatWest Group considers
Risk management process
This diagram summarises the main risk management processes and responsibilities within NatWest Group.
Risk activities Responsibilities Governance
Identify and
Assess
Report
Monitor
Manage/
Mitigate
Board
Responsible for reviewing the effectiveness
of the risk management and internal control
systems of NatWest Group, including the
nature and extent of the risks it may take
in pursuit of its strategic objectives.
Strategic consideration of principal risks –
together with top and emerging risks –
against NatWest Group’s business plan.
Leads the development of, and assesses/
monitors, risk culture.
NatWest Group Risk Function
Design and implementation of the enterprise-
wide risk management framework and
policies. Oversight of franchise and entity
risk management activities.
Aggregated reporting of franchise/
entity-level management of principal risks
– together with top and emerging risks –
against the agreed risk appetite set by the
Board, including assessment of the way
correlation and concentration levels may
change in aggregate.
Franchises and Entities
Take risks within the risk appetite set by
the Board in pursuit of business objectives.
Day-to-day risk management including,
identification and assessment, mitigation
and monitoring.
Reporting on franchise/entity-level
management of principal/top and emerging
risks within appetite. Horizon-scanning to
identify and assess likely changes in risk
environment/landscape.
Board
Sets risk appetite, reviews and
approves the enterprise-wide
risk management framework.
Board Risk Committee
Provides oversight and advice
to the Board on current and
future risk profile. Reviews the
effectiveness of internal controls
to manage risk.
Group Audit Committee
Reviews the effectiveness of
NatWest Group’s system of
internal control relating to
financial management.
Executive Risk Committee
Reviews, challenges and debates
all material risk and control
matters across NatWest Group.
Franchise Risk
Committees
Detailed oversight of risk profile
relative to risk appetite for
specific franchises/entities.
Top
down
Bottom
up
73NatWest Group 2021 Annual Report and Accounts
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Financial review Governance Risk and capital management Additional informationFinancial statements

Risk management continued
ABC risk in its business processes including, but not limited to,
corporate donations, charitable sponsorships, political activities
and commercial sponsorships. Where appropriate, ABC
contract clauses are required in written agreements.
Climate risk
The impact of climate change on NatWest Group and its
customers continued to be a central risk management focus
during the year. A new Climate Centre of Excellence was
established to provide specialist expertise across NatWest
Group, including horizon scanning to identify strategic
opportunities and risks. In addition, the qualitative
consideration of climate-related risk was made mandatory for
most of the wholesale portfolio within credit assessments, and
enhancements were made to NatWest Group’s environmental,
social and ethical framework to address reputational risks
arising from carbon-intensive sectors. NatWest Group also
participated in the Bank of England’s Climate Biennial
Exploratory Scenario stress test exercise. This exercise was
designed to support improved understanding of the financial
system’s exposure to climate-related risks and the likely
challenges to business models emerging from climate change.
While participation was mandatory, the exercise also helped
NatWest Group in understanding and preparing to manage
risks that could arise, both in terms of the transition to
net zero and the physical risks from climate change.
LIBOR
Risks relating to the reform of interest-rate benchmarks were a
consistent focus during the year. With the exception of certain
tenors, publication of the London Inter-Bank Offered Rate
(LIBOR), a key benchmark in the global financial markets for
many years, ceased on 31 December 2021. In preparation for
the move to alternative risk-free rates – including the Sterling
Overnight Index Average (SONIA) – NatWest Group stopped
offering Sterling LIBOR for new transactions on 31 March
2021. A Group-wide transition programme coordinated work
to help customers smoothly transition from a range of LIBOR-
based products, such as mortgages, investment-backed
lending and derivatives, to those using alternative benchmarks.
Significant attention was paid to the potential conduct risks
arising from transition activity, as well as related operational
risks, in order to ensure appropriate customer outcomes.
In addition, there was a strong focus on carefully managing
the associated compliance risk, market risk and counterparty
credit risk. The complexity of the transition, especially in
relation to so-called ‘tough legacy’ contracts that cannot be
transitioned to alternative reference rates, also heightened
execution risk. The FCA has proposed that use of synthetic
sterling LIBOR may be permitted for a number of legacy
contracts. It’s expected that management of related risks
will remain a focus into 2022 as NatWest Group continues
to support its customers through the transition.
Information and cyber-security
Cyber crime is an ever-present threat across the digital
landscape and continues to evolve rapidly. Attacks may be
from individuals or highly-organised criminal groups intent
on stealing money or sensitive data, or potentially holding
organisations to ransom. NatWest Group takes this threat
seriously and continues to work with industry bodies, peers
and the National Cyber Security Centre to gather and
share intelligence. During 2021, there was continued risk
management focus on ensuring defences remain optimised
for the evolving threat.
Risk culture
NatWest Group’s multi-year programme to enhance risk
management capability at every level of the organisation
continued with an ongoing emphasis on risk culture. This work
aims to embed a generative risk culture across all three lines
of defence – where risk management is an integral part of
the way colleagues work and think. The approach supports
intelligent risk-taking, better customer outcomes, stronger and
more sustainable business as well as an improved cost base.
During 2021, there was a focus on a number of risk culture
initiatives, including improvements in risk data and systems
alignment as well as enhancements to risk identification
processes and risk culture management information.
Model risk
An effective understanding of likely future outcomes and the
scale of likely hazards is an essential part of forward-looking
risk management. NatWest Group is heavily reliant on
modelling across all aspects of its business. Ensuring its models
are designed effectively – and that associated assumptions,
data inputs and techniques are appropriate – remained a key
risk management focus in 2021. This included a programme
of ongoing work to upgrade a number of models to improve
predictability and compliance with new regulatory requirements.
Risk-weighted assets (RWAs)
RWAs were down £13.3 billion at 31 December 2021, ending
the year at £157 billion (from £170.3 billion in 2020). This was
mainly driven by a £9.8 billion reduction in credit risk RWAs
as well as reductions in market risk RWAs (£1.4 billion),
counterparty credit risk RWAs (£1.2 billion) and operational
risk RWAs (£0.9 billion).
Common Equity Tier 1 ratio
NatWest Group maintained a strong CET1 ratio of 18.2%
(2020 – 18.5%), reflecting both the £13.3 billion reduction in
RWAs and a £2.9 billion decrease in CET 1. This decrease was
mainly driven by the directed buy-back and associated pension
contribution of £1.2 billion and on-market share buy-backs
totalling £1.5 billion, as well as foreseeable dividends and
associated pension contributions of £1.2 billion and a £1.1
billion decrease in the IFRS 9 transitional adjustment and other
reserve reductions, offset by the £3 billion attributable profit
in the period. The CET1 ratio reduced to 15.9% on 1 January
2022 as a result of regulatory RWA and capital changes.
Leverage ratios
The CRR leverage ratio decreased to 4.4% (2020 – 5.2%) due
to a £40 billion increase in leverage exposure and a £4 billion
decrease in Tier 1 capital. The UK leverage ratio decreased
to 5.8% (2020 – 6.4%) due to the decrease in Tier 1 capital.
Stress testing
Under the 2021 Bank of England solvency stress test, on an
IFRS 9 transitional basis NatWest Group’s low point CET1
ratio was 10.4%. This was above the reference rate of 7%.
The transitional Tier 1 leverage ratio low point was projected
to be 4.4% under stress. NatWest Group also took part in the
Bank of England’s Climate Biennial Exploratory Scenario.
Liquidity and funding
The liquidity portfolio increased by £24.1 billion to £286.4
billion. Primary liquidity increased by £38.2 billion to £208.6
billion. The increase in primary liquidity resulted mainly from
customer deposits, TFSME funding, new issuances and a
methodology change to include UBIDAC cash at central banks.
74 NatWest Group 2021 Annual Report and Accounts

Top and emerging
risks
A continuous process is used to identify and manage the Group’s top and
emerging risks. These are risks that could have a significant negative impact on
the ability to operate or meet strategic objectives.
External
Climate-related
risks
NatWest Group and its customers may face significant climate-related risks, including those arising from the transition
to a net-zero economy. These risks are receiving increasing regulatory, political and societal scrutiny, both in the UK
and internationally. There are significant uncertainties as to the extent and timing of the manifestation of the physical
risks of climate change, such as more extreme and frequent weather events and reductions in biodiversity. Embedding
climate risk into the Group’s risk framework and adapting NatWest Group’s operations and business strategy to
address the risks is in line with the purpose-led strategy.
Competitive
environment
NatWest Group operates in markets that are highly competitive, raising the threat of a loss of market share, reduced
revenue and lower profitability. The risks mainly relate to changes in regulation, developments in financial technology
(including digital currency), new entrants to the market and changes in customer behaviour. The Group closely
monitors the competitive environment and adapts strategy as appropriate to deliver innovative and compelling
propositions for customers.
COVID-19
The COVID-19 crisis could impede the Group’s ability to meet its targets and deliver its purpose-led strategy. Despite
delivery of a mass vaccination programme in the UK, uncertainty remains around the future evolution of the virus and
the ultimate impact of the pandemic on NatWest Group and its customers. Key mitigation measures to manage the
uncertainty include scenario analysis, stress testing and active portfolio management including the adjustment of
risk appetite.
Cyber threats
The threat from cyber attacks is constant both directly to businesses such as NatWest Group and to others in the
supply chain. As cyber attacks evolve and become more sophisticated, NatWest Group continues to invest in additional
capability and controls designed to defend against the evolving threats. There is a sustained focus on managing the
impact of the attacks and maintaining the availability of services for NatWest Group’s customers.
Economic and
political risks
NatWest Group is exposed to economic and political risks in the markets in which it operates. Economic uncertainty
remains high due to a combination of inflationary pressures including supply chain frictions and disruption due to new
COVID-19 variants. A range of complementary approaches is used to mitigate these risks including scenario analysis
and stress testing. The Group continues to monitor geopolitical risks alongside domestic political risk including those in
relation to the UK’s withdrawal from the European Union and a Scottish independence referendum. In the longer term,
demographic change, high levels of debt and inequality could all have financial impacts. As a result, these risks are
closely monitored and strategic plans are adapted as appropriate.
Regulatory, legal
and conduct risks
NatWest Group is subject to extensive laws and regulations and expects government and regulatory intervention
in the financial services industry to remain high for the foreseeable future. The Group implements new regulatory
requirements, where applicable, and incorporates the implications of related changes in its strategic and financial
plans. However, changes in laws or regulations, or failure by NatWest Group to comply with these, may adversely
affect NatWest Group’s business, results of operations and outlook.
Internal
Change risk
The implementation of NatWest Group’s purpose-led strategy and the refocusing of NatWest Markets carry significant
execution, operational and people risks. NatWest Group continues to manage and implement change in line with
its strategic plans while assessing execution risks and taking appropriate mitigating action. In addition, the Group
continues to monitor and strengthen its control environment including in relation to financial crime, through robust
governance and controls frameworks.
Data
management
NatWest Group operations and strategy are highly dependent on the accuracy and effective use of data. Failure
to have current, high-quality data and/or the ineffective use of such data could result in a failure to deliver NatWest
Group’s strategy including reducing costs and meeting customer expectations. The Group is focused on delivering
a long-term data strategy alongside control and policy framework enhancements governing data usage.
People risk
NatWest Group’s success depends on its ability to attract, retain and develop highly skilled and qualified personnel,
including senior management, directors and key employees in a highly competitive market and under internal cost
reduction pressures. A combination of strategic workforce planning, including in relation to critical role resource and
retention of specific skills, and close monitoring of staff turnover levels and colleague wellbeing are key mitigants.
Third-party
suppliers
Operational risks arise from NatWest Group’s reliance on third-party suppliers to provide a range of services,
including information technology. While the ineffective management of these risks could adversely affect NatWest
Group, significant resources and planning have been devoted to mitigate the risks including the implementation of
robust risk controls.
75NatWest Group 2021 Annual Report and Accounts
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In assessing NatWest Group’s future prospects, the Board
considers a period of three years to be appropriate. Although
strategic and business planning – as well as internal stress
tests – are based on a five-year timespan, levels of uncertainty
increase as the time horizon extends and therefore the shorter
period is considered more suitable for this assessment. The
Board will continue to monitor and consider the appropriateness
of this period.
In assessing NatWest Group’s viability over that three-year
time frame, the Board has considered a wide range of
information, including:
Strategic
– NatWest Group’s long-term business and strategic plans;
– Its liquidity and funding profile, including projections over
the relevant period;
– Its current capital position and projections over the
relevant period.
Risk
– NatWest Group’s risk profile and risk management
practices, including the processes by which risks are
identified and mitigated;
– Its principal risks as well as the top and emerging risks
that could have a significant negative impact on NatWest
Group’s licence to operate or meet its strategic objectives
over the medium term;
– Internal stress tests, which include consideration of
NatWest Group’s principal and emerging risks within
the scenario design.
Regulatory
– The results of the Bank of England 2021 solvency
stress test;
– The Group’s results in the Bank of England’s Climate
Biennial Exploratory Scenario (CBES);
– The output of the Group’s 2021 Internal Capital Adequacy
Assessment Process (ICAAP) and Internal Liquidity
Adequacy Assessment Process (ILAAP).
Operating environment
– The wider political and economic environment within which
NatWest Group operates, including uncertainties relating
to the geopolitical outlook and the global pandemic.
The Group’s business and strategic plans, which are reviewed
and evaluated on an annual basis at minimum, provide
long-term direction. This includes multi-year forecasts
assessing NatWest Group’s expected financial position
throughout the planning period. Threats to the achievement
of those plans – including financial, operational, conduct and
financial crime risks – are identified and assessed through
NatWest Group’s enterprise-wide risk management framework.
As part of this, Board-approved risk appetite is a key
consideration. Performance against risk appetite for each of
the principal risks is reported to the Board on a regular basis
together with assessments of emerging risks that could have an
impact within the planning horizon. NatWest Group’s principal
risks and uncertainties are set out on pages 72 to 75. Further
detail can be found in the Risk and capital management
section of the Annual Report and Accounts (pages 187-285).
The effects of COVID-19 and associated government responses
remained an important consideration particularly in relation to
the impacts on customers – including the end of government
support schemes and the likely trajectory of the overall
recovery. The impact of the pandemic and potential
aftershocks are subject to continuous monitoring with
additional focus in NatWest Group’s senior risk committees and
at Board level. In addition, other impacts, such as the effect of
sustained supply chain disruption for business and corporate
clients, were also a focus.
A series of internally-developed stress scenarios supports
NatWest Group’s planning processes. During 2021, a range of
future economic conditions of increasing severity was defined
in order to support internal modelling and assess NatWest
Group’s potential performance over the planning horizon.
These included a base case – or central – scenario using a set
of assumptions such as expected GDP growth of 1.7% over the
scenario period, an average Bank of England base rate of 0.8%
and a total change in the UK house price index of 12.1%. This
scenario also assumed a resilient labour market following the
end of the government furlough scheme and inflation peaking
in early 2022, followed by a gradual easing of pressures in the
medium term. While potential performance was also assessed
against a more positive, or upside scenario, NatWest Group’s
likely response to more adverse and challenging conditions
was assessed using a suite of downside scenarios ranging from
moderate to extreme. The assumptions used in these scenarios
included GDP contraction of -1.8% and -7.9%, base rate of
1.5% or -0.5%, and house price index falls of -3% and -26%.
Additional scenarios, assuming much more severe conditions
– ranging from a sharp economic downturn in the UK to
persistent COVID-19 impacts and a global recession – were
also used for internal modelling and planning purposes. These
included a range of challenges relating to NatWest Group’s
principal risks. Internal scenarios used for the ICAAP are
designed to be extreme but plausible and take account of
potential risk management actions and mitigation supported by
the enterprise-wide risk management framework. For example,
a range of financial crime scenarios was assessed using both
one-in-25-years and one-in-100-years stresses to analyse the
likely impacts of extreme events on the Group’s licence to
operate. These assessed the potential impacts of external
fraud, sanctions, money laundering, tax evasion or bribery
Viability statement
Viability
statement
In accordance with Provision 31 of the UK Corporate Governance Code,
the Board is required to make a statement in the Annual Report and Accounts
regarding NatWest Group’s viability over a specified time horizon.
76 NatWest Group 2021 Annual Report and Accounts

and corruption events on the Group. Similarly, such exercises
were carried out across credit risk, market risk, pension risk,
capital adequacy, liquidity and funding, operational risk and
conduct risk – in order to ensure NatWest Group remains
appropriately resilient even in extreme circumstances.
In addition, NatWest Group’s top and emerging risks are a
significant consideration in internal planning as well as in
assessing future capital and liquidity resilience under
adverse scenarios through the ICAAP and ILAAP.
Reverse stress testing is also used to assess scenarios and
circumstances that could make NatWest Group’s business
model unviable. These exercises begin with a definition of
business model failure – including capital adequacy thresholds
– and then analyse the events that could cause that failure.
NatWest Group uses a range of stress scenarios that include
systemic events, that may affect the entire financial system,
idiosyncratic events that would create adverse consequences
for only NatWest Group and a combination of these. During
2021, reverse stress testing considered the impact of sustained
income challenges and increased impairments in a recession.
Significant drops in UK GDP (-9%, -12, -15%) were factored in
together with high unemployment (16–17%), a collapse in asset
prices (commercial real estate values falling, for example, by
up to 50%) and a dramatic reduction in house prices (-34%,
-47% and -50%). In each of the extreme scenarios, NatWest
Group remained above the defined thresholds.
The results of the 2021 Bank of England solvency stress
test were also considered as part of the assessment.
The assumptions involved in this stress scenario included a
significant drop in UK GDP (37% of 2019 UK GDP) between
2020 and 2022, an unemployment spike just under 12% and
a 33% fall in residential and commercial property prices. The
scenario also included a 31% cumulative fall in world GDP.
NatWest Group remained considerably above the hurdle
rate before and after strategic management actions.
In considering NatWest Group’s prospects over the period of
the viability assessment, the Board’s assessment in this regard
is that NatWest Group is appropriately resilient and able to
withstand a combination of severe economic shocks without
breaching regulatory thresholds.
The assessment also considered the effects of an intensifying
competitive environment particularly in the context of the
disruption to underlying economic cycles due to COVID-19.
Throughout the year, consideration was given to the likelihood
of a catastrophic cyberattack within the time frame of the
assessment. While NatWest Group operates a multi-layered
system of defences, there is a possibility that a successful
cyberattack could have a severe effect on operations.
However, the evolving threat is continually monitored.
NatWest Group remains prepared and continues to invest
in this area to ensure that it remains robustly protected.
Planning also takes into account a range of correlated
risks in order to ensure that NatWest Group’s strategy
and forecasts remain appropriate for the evolving
environment. During 2021, there was further
management focus on the potential crystallisation of a
severe but plausible combination of both principal risks
and top and emerging risks. Such combinations could
amplify existing risks and adversely affect NatWest
Group’s profitability. The results of these exercises
were considered by the Executive Risk Committee
and form part of NatWest Group’s forward-looking
risk management activity.
While considering both near-term and medium-term
risks in its assessment – and given the increased
uncertainty over longer-term predictions – the Board
noted analysis performed as part of NatWest Group’s
participation in the Bank of England’s CBES test. While
this is a mandatory stress test, the activity supports
NatWest Group in understanding and preparing to
manage risks that could arise, both in terms of the
transition to net zero and the physical risks from
climate change. This included a Group-wide
operational risk scenario, assuming significant business
disruption due to an intense heatwave. Aspects of the
CBES scenarios were also used in the Group’s ICAAP
process and in internal stress tests, particularly in
relation to credit risk.
In drawing its conclusions, the Board also considered
the following:
– The Group’s strong capital position (CET1 ratio
of 18.2%–17.8% excluding IFRS 9 transitional relief).
The current capital position provides significant
headroom above both NatWest Group’s minimum
requirements and its MDA threshold requirements;
– Its ability to generate capital in recent years;
– Its proposed distribution strategy to shareholders;
and
– Its strong liquidity position (LCR of 172% at
31 December 2021 and liquidity headroom
of £89.9 billion).
Based on the factors above, the current financial
forecasts, the management of NatWest Group’s
principal risks, including mitigating actions, and the
strength of its capital and liquidity positions, NatWest
Group’s Board has a reasonable expectation that
NatWest Group will be able to continue in operation
and meet its liabilities over the three-year period of
the assessment.
77NatWest Group 2021 Annual Report and Accounts
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Financial review Governance Risk and capital management Additional informationFinancial statements

Non-financial information statement
Non-financial
information statement
This non-financial information statement provides an overview of topics and
related reporting references in our external reporting as required by sections
414CA and 414CB of the Companies Act 2006. We integrate non-financial
and Environmental, Social and Governance (ESG) information across the
Strategic report and wider reporting suite, thereby promoting cohesive
reporting of non-financial and ESG matters.
ESG reporting frameworks and guidance
We are actively monitoring developments including in relation
to metrics. In 2021, our focus included the Sustainability
Accounting Standards Board (SASB) standards, the Global
Reporting Initiative (GRI) standards, the Task Force on
Climate-related Financial Disclosures (TCFD) and the World
Economic Forum (WEF) International Business Council (IBC)
metrics. As signatories of the UN Principles for Responsible
Banking, we are committed to an ongoing process to align
our strategy with the 2015 Paris Agreement and the UN
Sustainable Development Goals (SDGs). Our climate
ambition strives to make a positive contribution.
Further information on non-financial and ESG
matters can be found within our reporting suite
– Climate-related Disclosures Report
– ESG Supplement
– natwestgroup.com
Assurance Approach
NatWest Group plc appointed Ernst & Young LLP (EY) to
provide independent assurance over certain sustainability
metrics, indicated with (*) in the NatWest Group’s 2021
Strategic Report, the 2021 Environmental, Social and
Governance (ESG) Supplement, and the 2021 Climate-related
Disclosures Report. The assurance engagement was planned
and performed in accordance with the International Standard
on Assurance Engagements (UK) 3000 (July 2020) Assurance
Engagements Other than Audits or Reviews of Historical
Financial Information (“ISAE (UK) 3000 (July 2020)”). An
assurance report was issued and is available at natwestgroup.
com. This report includes further details on the scope,
respective responsibilities, work performed, limitations
and conclusion.
78 NatWest Group 2021 Annual Report and Accounts

Reporting
requirement
Page references
in this document
Relevant policy
available at
natwestgroup.com
Business model – Our purpose framework
– Our strategy
– Our strategy in action
– Our purpose-led areas of focus
– How we create value
– Our business performance
– 12 to 13
– 18 to 19
– 20 to 27
– 30 to 31
– 34 to 37
– 38 to 50
Our
stakeholders
– Our stakeholders
– Section 172(1) statement
– Stakeholder focus areas
– 14 to 17
– 52 to 53
– 54 to 63
Environment – Market environment
– Climate-related disclosures
– Top and emerging risks
– Risk overview
– Risk factors
– 32 to 33
– 64 to 71
– 75
– 72 to 75
– 406 to 426
Environmental, social
and ethical policies
Our colleagues – Colleagues
– Approving refreshed values
– Diversity and Inclusion
– 58 to 61
– 53
– 59 to 61
Our code of conduct
Governance – Governance at a glance
– Section 172(1) statement
– Boardroom Inclusion Policy
– Corporate governance
– Directors’ remuneration report
– Report of the directors
– 80 to 81
– 52 to 53
– 114 to 115
– 102 to 113
– 136 to 142
– 184 to 186
Boardroom
Inclusion Policy
Social matters – Market environment
– Our strategy in action
– Stakeholder focus areas
– How we create value
– 32 to 33
– 20 to 27
– 54 to 63
– 34 to 37
Supplier Charter
Respect for
human rights
– Human rights and Modern Slavery – 39 Statement on Human
Rights
Anti-bribery
and corruption
(ABC)
– Risk overview
– Risk and capital management
– Mandatory learning for all colleagues
– 72 to 75
– 188 to 285
– 73 to 74
Statement on Anti-
Bribery and Corruption
Risk
management
– Risk overview
– Top and emerging risks
– Risk and capital management
– Risk factors
– 73 to 74
– 75
– 188 to 285
– 406 to 426
Environmental, social
and ethical policies
79NatWest Group 2021 Annual Report and Accounts
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Governance at a glance
Governance
at a glance
Our Board
The Board has 11 directors comprising the Chairman, two executive directors and eight independent non-executive directors.
Biographies of the directors are available on pages 98 to 101 and at natwestgroup.com.
Board governance framework
The Board is collectively responsible for promoting the long-term success of NatWest Group plc, driving both shareholder value and
contribution to society. To assist in providing effective oversight and leadership, the Board has established the following committees:
NatWest Group plc Board
Group Audit
Committee
see report – page 116
Group Board
Risk Committee
see report – page 124
Group
Nominations and
Governance
Committee
see report – page 114
Group
Performance and
Remuneration
Committee
see report – page 136
Group
Sustainable
Banking
Committee
see report – page 132
Technology
and Innovation
Committee
see report – page 134
The Group CEO has established the Group Executive Committee to support her in discharging her responsibilities in
managing NatWest Group’s businesses day to day.
– Further information on our governance structure is available on pages 102 to 187.
– Information on how stakeholders have influenced Board discussions and decision-making during 2021 is available in
our section 172(1) statement on pages 52 to 53.
– Various corporate documents including our Articles of Association and terms of reference for the Board and Board
Committees are available at natwestgroup.com.
Executive directors
– Alison Rose
(Group CEO)
– Katie Murray
(Group CFO)
Independent non-
executive directors
– Frank Dangeard
– Patrick Flynn
– Morten Friis
– Robert Gillespie
– Yasmin Jetha
– Mike Rogers
– Mark Seligman (Senior
Independent Director)
– Lena Wilson
Company Secretary
– Jan Cargill
Francesca Barnes, Graham Beale and Ian Cormack are the three additional independent non-executive directors of NatWest
Holdings Limited and also attend NatWest Group plc Board meetings and relevant Board Committee meetings as observers.
Further information can be found in the Corporate governance report on pages 102-113.
Chairman
– Howard Davies
80 NatWest Group 2021 Annual Report and Accounts

Board composition
The charts below describe our Board’s composition by gender,
tenure, age, and skills and experience as at 31 December 2021.
Female executive directors: 2
Female non-executive
directors: 2
Male Chairman +
non-executive directors: 7
Board composition by gender
2
2
7
0-3 years: 2
3-6 years: 6
6-9 years: 3
Board tenure
2
6
3
45-55: 2
56-65: 5
66-75: 4
Board age range
2
5
4
Board diversity and inclusion
The Board operates a Boardroom Inclusion Policy (available
at natwestgroup.com) which reflects the most recent industry
targets and is aligned to the NatWest Group Inclusion Policy
and Principles applying to the wider bank.
Throughout 2021 the Board met the recommendation of the
Parker Review with at least one member of the Board being
of Black, Asian or Minority Ethnic background and it intends
to continue to meet that recommendation (9% of the Board
at the end of 2021).
At the end of 2021 the Board exceeded the recommendation
of the FTSE Women Leaders Review (formerly the Hampton-
Alexander Review) of 33% female representation on the board,
with 36% of the Board being female.
Board skills and experience
The Board is structured to ensure that the directors provide
NatWest Group plc with the appropriate combination of skills,
experience and knowledge as well as independence.
The bar chart opposite is an extract from our Board skills
matrix, which is reviewed by the Group Nominations and
Governance Committee and approved by the Board annually.
The matrix reflects our directors’ self-assessment of the skills
and experience they bring to Board discussions, in line with
pre-determined criteria aligned to current and future
strategic priorities.
The 2021 external Board evaluation did not identify any
immediate or material gaps in Board skills and experience,
however it was acknowledged that the Board would benefit
from additional technology expertise. The Board and Group
Nominations and Governance Committee will continue to
keep Board skills and composition under review during 2022.
UK Corporate Governance Code
Throughout 2021, NatWest Group plc applied the principles
and complied with all of the provisions of the 2018 UK
Corporate Governance Code with the following exceptions:
– Provision 17 – that the Group Nominations and Governance
Committee should ensure plans are in place for orderly
succession to both the board and senior management
positions, and oversee the development of a diverse
pipeline for succession; and
– Provision 33 – that the Group Performance and
Remuneration Committee should have delegated
responsibility for setting remuneration for the Chairman
and executive directors.
The Board considers these are matters that should be reserved
for the Board.
Our full 2018 UK Corporate Governance Code compliance
statement is available on page 181.
Our full Corporate governance report is available on pages 102
to 187 and includes our Board Committee reports, the Directors’
remuneration report and the Report of the directors.
Board skills and experience
Skills and experience
Number of directors
0 2 4 6 11108
Risk management
Broad Financial Services
Transformation
Financial Markets / Investment Banking
Environmental, Social and Governance (incl climate)
CEO / Senior Executive Management
Customer experience
Government / regulatory / public sector
Retail / Commercial / Private Banking
Digital and Innovation
CFO / Accountant
Technology (infrastructure, cyber)
81NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review Governance Risk and capital management Additional informationFinancial statements

Financial review
Chief Financial
Officer’s review
84 Financial summary
86 Summary consolidated balance sheet
87 Segment summary income statements
88 Segment performance
95 Summary financial statements
We have delivered a strong operating
performance in 2021.
Group RoTE was 9.4%, benefiting from a £1.3 billion net
impairment release. We achieved our Group cost reduction
target of 4.0% and lending growth across our UK and RBSI
retail and commercial businesses was 2.6%, excluding UK
Government financial support schemes.
Our capital and liquidity position remains strong after
returning £3.8 billion to shareholders, and default levels
have remained low across all our portfolios. The CET1 ratio
was 18.2%, reducing to 15.9% on 1 January 2022 following
regulatory RWA and capital changes. We have made good
progress on our phased withdrawal from the Republic of
Ireland and will focus the financial commentary below on
the Group excluding Ulster Bank RoI (Go-forward group).
Total income, excluding notable items, in the Go-forward
group was 5.6% lower than prior year. Across the UK and
RBSI retail and commercial businesses income increased by
1.4% reflecting strong balance sheet growth, principally in our
mortgage book. NWM income was below expectations, down
by 61.5%, compared with 2020, reflecting continued weakness
in Fixed Income, impacted by subdued levels of customer
activity and ongoing reshaping of the business, and
exceptional levels of market activity in the prior year.
Bank NIM
(1)
of 2.39% was 7 basis points lower than 2020
impacted by reduced structural hedge income, yield curve
movements and lower unsecured balances.
We delivered a cost reduction of £256 million, or 4.0%, in 2021,
in line with our target for the year. This has been achieved
by transformation across our customer journeys and NWM
business, in line with the strategic announcement made
in February 2020 and a £68 million reduction in the bank
levy charge.
A net impairment release of £1,278 million reflects the low
levels of realised losses we have seen across the year. Total
impairment provisions reduced by £2.4 billion to £3.8 billion
during 2021 and as a result ECL coverage ratio decreased
from 1.66% to 1.03%.
We are pleased to report a 2021 attributable profit of £2,950
million, with earnings per share of 25.4 pence and a RoTE
of 9.4%.
A final dividend of 7.5 pence per share is proposed, bringing
our total 2021 paid and proposed capital distributions to £3.8
billion through a combination of ordinary dividends, directed
buybacks of the UK Government stake and our on-market
buyback programme.
Across the UK and RBSI retail and commercial businesses,
and excluding UK Government support schemes, net lending
increased by 2.6%. Mortgage growth exceeded the market,
however commercial lending was behind market as we have
sought to reduce certain exposures, through targeted sector
reductions and capital actions, whilst continuing to focus on
supporting customers through sustainable lending.
Customer deposits in the Go-forward group increased by
£49.3 billion, or 12.0%, in 2021 including £9.4 billion related
to Treasury repo activity. Across the UK and RBSI retail and
commercial businesses customer deposits increased by 10.0%,
as customers continued to build and retain liquidity.
Katie Murray
Chief Financial Officer
82 NatWest Group 2021 Annual Report and Accounts

Continuing operations
Two legally binding agreements for the sale of the UBIDAC business were announced in 2021 as part of the phased withdrawal from the Republic
of Ireland: the sale of commercial lending to Allied Irish Banks p.l.c. (AIB) and the performing non-tracker mortgages, performing micro-SME
loans, UBIDAC’s asset finance business and 25 of its branch locations to Permanent TSB p.l.c (PTSB).
The business activities relating to these sales that meet the requirements of IFRS 5 are presented as a discontinued operation and as a disposal
group on 31 December 2021.
The Financial review presents the results of the Group’s continuing operations. For further details refer to Note 8 Discontinued operations and
assets and liabilities of disposal groups in the Notes to the consolidated financial statements.
Year ended
2021
£m
2020
(1)
£m
Variance
£m
Continuing operations
Go-forward group income
(2,3)
10,284 10,286 (2)
Total income 10,512 10,508 4
Operating expenses (7,758) (7,858) (100)
Profit before impairment releases/(losses) 2,754 2,650 104
Operating profit/(loss) before tax 4,032 (481) 4,513
Profit/(loss) attributable to ordinary shareholders 2,950 (753) 3,703
Excluding notable items within total income
(4)
Go-forward group income excluding notable items
(2,3)
10,074 10,670 (596)
Total income excluding notable items
(3)
10,267 10,892 (625)
Operating expenses (7,758) (7,858) 100
Profit before impairment releases/(losses) excluding notable items 2,509 3,034 (525)
Operating profit/(loss) before tax excluding notable items 3,787 (97) 3,884
UK and RBSI retail and commercial businesses income excluding notable items
(3)
9,620 9,486 134
Performance key metrics and ratios
Bank net interest margin
(3,5)
2.39% 2.46% (0.07%)
Bank average interest earning assets
(3,5)
£314bn £301bn £13bn
Cost:income ratio
(3)
73.4% 74.4% (1.1%)
Loan impairment rate
(3)
(35bps) 85bps (120bps)
Total earnings per share attributable to ordinary shareholders – basic 25.4p (6.2p) 31.6p
Go-forward group return on tangible equity
(2)
10.0% (1.3%) 11.3%
Return on tangible equity
(3)
9.4% (2.4%) 11.8%
Balance sheet
Go-forward group customer deposits
(2,3)
£461.4bn £412.1bn £49.3bn
UK and RBSI retail and commercial net lending excluding UK Government support schemes
(3)
£305.7bn £297.9bn £7.8bn
Capital, liquidity and funding
Common Equity Tier (CET1) ratio
(6)
18.2% 18.5% (0.3%)
Risk-weighted assets (RWAs) £157.0bn £170.3bn (£13.3bn)
Liquidity coverage ratio (LCR) 172% 165% 7%
Total wholesale funding
(3)
£77bn £71bn £6bn
Tangible net asset value (TNAV) per ordinary share
(3)
272p 261p 11p
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(2) Go-forward group excludes Ulster Bank RoI and discontinued operations.
(3) Refer to the Non-IFRS financial measures section for details of the basis of preparation and reconciliation of non-IFRS financial measures.
(4) Refer to page 84 for details of notable items within total income.
(5) NatWest Group excluding NatWest Markets, Ulster Bank RoI and liquid asset buffer.
(6) Based on CRR end-point including the IFRS 9 transitional adjustment of £0.6 billion (31 December 2020 – £1.7 billion). Excluding this adjustment, the CET1 ratio would be 17.8%
(31 December 2020 – 17.5%.)
TNAV per share increased by 3 pence in the quarter to 272
pence largely reflecting the attributable profit partially offset
by movements in the cash flow hedging reserve.
Capital, funding and liquidity
The CET1 ratio remains strong at 18.2%, or 17.8% excluding
IFRS 9 transitional relief. The 30 basis points reduction in the
year includes capital distributions of c.240 basis points, partially
offset by the reduction in RWAs, c.170 basis points, and the
attributable profit net of IFRS 9 transitional relief and other
capital movements. RWAs of £157.0 billion reduced by £13.3
billion in 2021 mainly reflecting business movements in
Commercial Banking, including targeted sector reductions,
improvement in risk parameters and active capital management.
On 1 January 2022, the proforma CET1 ratio was 15.9%
including the impact of regulatory RWA inflation, 200 basis
points, the removal of the software development costs capital
benefit, 20 basis points, and the tapering of IFRS 9 transitional
relief, 10 basis points. RWAs increased by £18.8 billion,
including £14.8 billion associated with mortgage risk
weight changes.
The liquidity coverage ratio (LCR) of 172%, representing £89.9
billion headroom above 100% minimum requirement, increased
by 7 percentage points compared with 2020. Total wholesale
funding increased by £6.0 billion in the year to £76.7 billion.
(1) Excludes NatWest Markets, liquid asset buffer and Ulster Bank RoI.
83NatWest Group 2021 Annual Report and Accounts
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Financial summary
2021
2020
(1)
Variance
Income -
Continuing operations
£m £m
£m
%
Interest receivable
(2)
9,313
9,798
(485)
(4.9)
Interest payable (2)
(1,699)
(2,322)
623
(26.8)
Net interest income
7,614
7,476
138
1.8
Net fees and commissions
2,124
2,000
124
6.2
Income from trading activities
323
1,125
(802)
(71.3)
Other non-interest income
451
(93)
544
nm
Non-interest income
2,898
3,032
(134)
(4.4)
Total income
10,512
10,508
4
nm
Go-forward group income excluding notable items
(3)
10,074
10,670
(596)
(5.6)
Total income excluding notable items
(3)
10,267
10,892
(625)
(5.7)
Notable items within total income
(3)
Retail Banking
Retail Banking debt sale gain
—
8
Metro Bank mortgage portfolio acquisition loss
—
(58)
Private Banking
Consideration on the sale of the Adam & Company investment
management business
54
—
Commercial Banking
Commercial Banking fair value and disposal loss
(22)
(37)
Commercial Banking tax variable lease repricing
32
—
NatWest Markets
NatWest Markets asset disposals/strategic risk reduction
(4)
(64)
(83)
Own credit adjustments (OCA)
6
(24)
Central items & other
Share of associate profit/(loss) for Business Growth Fund
219
(22)
Liquidity Asset Bond sale gains
120
113
Loss on redemption of own debt
(138)
(324)
IFRS volatility in Central items & other
(5)
47
83
Property strategy update
(44)
—
FX recycling loss in Central items & other
—
(40)
Ulster Bank RoI
Ulster Bank RoI gain arising from the restructuring of structural hedges
35
—
Total
245
(384)
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(2) Interest receivable and interest payable on trading assets and liabilities are included in income from trading activities.
(3) Refer to the Non-IFRS financial measures section for details of the basis of preparation and reconciliation of Non-IFRS financial and performance measures
(4) Asset disposals/strategic risk reduction in 2020 relates to the cost of exiting positions and the impact of risk reduction transactions entered into, in respect of the strategic
announcement on 14 February 2020.
(5) IFRS volatility relates to loans which are economically hedged but for which hedge accounting is not permitted under IFRS.
2021 compared with 2020
 Total income, excluding notable items, in the Go-forward
group
(1)
was £596 million, or 5.6% lower than prior year.
Across the UK and RBSI retail and commercial businesses
income increased by 1.4% reflecting strong balance sheet
growth, principally in our mortgage book. NWM income was
below expectations, down £757 million, or 61.5% compared
with 2020, reflecting continued weakness in Fixed Income,
impacted by subdued levels of customer activity and
ongoing reshaping of the business, and exceptional levels of
market activity in the prior year.
(1) Go-forward group excludes Ulster Bank RoI.
(2) NatWest Group excluding NatWest Markets, liquid asset buffer and Ulster Bank RoI.
 Bank NIM
(2)
of 2.39% was 7 basis points lower than 2020
impacted by reduced structural hedge income, yield curve
movements and lower unsecured balances.
 Structural hedges of £190 billion generated £1.3 billion of
incremental net interest income for the year, compared
with £1.1 billion of incremental net interest income on a
balance of £159 billion in 2020.
84 NatWest Group 2021 Annual Report and Accounts

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Financial summary continued
2021
2020 (1)
Variance
Operating expenses -
Continuing operations
£m £m
£m
%
Staff expenses
3,265
3,416
(151)
(4.4)
Premises and equipment
1,030
989
41
4.1
Other administrative expenses
1,427
1,535
(108)
(7.0)
Strategic costs
787
1,013
(226)
(22.3)
Litigation and conduct costs
466
113
353
nm
Depreciation and amortisation
783
792
(9)
(1.1)
Operating expenses
7,758
7,858
(100)
(1.3)
Excluding:
Litigation and conduct costs
466
113
353
nm
Strategic costs
787
1,013
(226)
(22.3)
Operating lease depreciation
140
145
(5)
(3.4)
Ulster Bank RoI direct costs
273
239
34
14.2
6,092
6,348
(256)
(4.0)
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
2021 compared with 2020
 Operating expenses excluding litigation and conduct costs,
strategic costs, operating lease depreciation and Ulster
Bank RoI direct costs decreased by £256 million, or 4.0%, in
line with our target for the year. This has been achieved by
transformation across our customer journeys and NWM
business, in line with the strategic announcement made in
February 2020 and a £68 million reduction in the UK bank
levy charge.
 Strategic costs of £787 million included £237 million in NWM
related to transformation, £124 million of redundancy
charges, £88 million of technology spend and an £85 million
goodwill impairment.
 Litigation and conduct costs of £466 million represent the
net impact of a number of remediation and litigation
matters concluding. This amount includes penalties
associated with the resolution of FCA’s investigation into
potential breaches of the UK Money Laundering Regulations
2007. Refer to Note 27 for additional information on other
litigation and regulatory matters.
2021
2020
Variance
Impairments - Continuing operations (1)
£m £m
£m
Loans - amortised cost and FVOCI
369,827
372,399
(2,572)
(0.7%)
ECL provisions
3,806
6,186
(2,380)
(38.5%)
ECL provisions coverage ratio (%)
1.03
1.66
(0.6)
(38.0%)
Impairment (releases)/losses
ECL (release)/charge
(2)
(1,278)
3,131
(4,409)
(140.8%)
Amounts written off
876
937
(61)
(6.5%)
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(2) The table above summarises loans and related credit impairment measured on an IFRS 9 basis. Refer to Credit Risk – Banking activities in the Risk and capital management section
for further details.
2021 compared with 2020
 A net impairment release of £1,278 million reflects the low levels of realised losses we have seen across the year. Total
impairment provisions reduced by £2.4 billion to £3.8 billion during 2021 and as a result ECL coverage ratio decreased from
1.66% to 1.03%. Whilst we are comfortable with the strong credit performance of our book, we continue to hold economic
uncertainty post model adjustments (PMA) of £0.6 billion, or 15.3% of total impairment provisions. We will continue to assess
this position throughout the year.
2021
2020 (1)
Tax - Continuing operations
£m £m
Tax charge
(996)
(74)
UK corporation tax rate
19.0%
19.0%
Effective tax rate
24.7%
(23.7%)
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
2021 compared with 2020
 A tax charge of £996 million for the year ended 31 December 2021 arises rather than the expected tax charge of £766 million
based on the UK corporation tax rate of 19%. The higher tax charge reflects the UK banking surcharge, and other non-
deductible items such as UK bank levy. These factors have been partially offset by the impact on the group's UK net deferred
tax asset of the increased tax rate from 1 April 2023, enacted on 10 June 2021. Further details can be found in Note 7 to the
consolidated financial statements.
85NatWest Group 2021 Annual Report and Accounts
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Summary consolidated balance sheet as at 31 December 2021
2021
2020
Variance
£m
£m
£m
Assets
Cash and balances at central banks
177,757
124,489
53,268
43%
Trading assets
59,158
68,990
(9,832)
(14%)
Derivatives
106,139
166,523
(60,384)
(36%)
Settlement balances
2,141
2,297
(156)
(7%)
Loans to banks - amortised cost
7,682
6,955
727
10%
Loans to customers - amortised cost
358,990
360,544
(1,554)
(0%)
Other financial assets
46,145
55,148
(9,003)
(16%)
Other assets (including intangible assets)
14,965
14,545
420
3%
Assets of disposal groups
9,015
—
9,015
nm
Total assets
781,992
799,491
(17,499)
(2%)
Liabilities
Bank deposits
26,279
20,606
5,673
28%
Customer deposits
479,810
431,739
48,071
11%
Settlement balances
2,068
5,545
(3,477)
(63%)
Trading liabilities
64,598
72,256
(7,658)
(11%)
Derivatives
100,835
160,705
(59,870)
(37%)
Other financial liabilities
49,326
45,811
3,515
8%
Subordinated liabilities
8,429
9,962
(1,533)
(15%)
Notes in circulation
3,047
2,655
392
15%
Other liabilities
5,797
6,388
(591)
(9%)
Total liabilities
740,189
755,667
(15,478)
(2%)
Total equity
41,803
43,824
(2,021)
(5%)
Total liabilities and equity
781,992
799,491
(17,499)
(2%)
Tangible net asset value per ordinary share (pence)
(1)
272p
261p
11p
4%
(1) Tangible net asset value per ordinary share represents tangible equity divided by the number of ordinary shares.
 Total assets of £782.0 billion as at 31 December 2021
decreased by £17.5 billion, 2%, compared with 31
December 2020. This was primarily driven by decreases in
derivatives, trading assets and other financial assets
partially offset by cash and balances at central banks.
 Cash and balances at central banks increased by £53.3
billion, 43%, to £177.8 billion mainly as a result of a net
customer funding surplus driven by significant deposit
inflows flow in addition to £15.6 billion liquidity and debt
portfolio optimisation activity.
 Trading assets decreased by £9.8 billion, 14%, to £59.2
billion mainly driven by reductions in cash collateral and
debt securities. Trading liabilities decreased by £7.7 billion,
11%, to £64.6 billion due to reduction in cash collateral.
 Derivative assets decreased £60.4 billion, 36%, to £106.1
billion, and liabilities, decreased by £59.9 billion, 37%, to
£100.8 billion. These movements were driven by a decrease
in underlying volumes due to matured trades and buyouts
exceeding new trades and lower mark-to-market
valuations due to higher interest rates for major currencies
in the year.
 Loans to customers - amortised cost, decreased by £1.6
billion, to £359.0 billion including £11.3 billion decrease in
Ulster Bank ROI predominantly due to a reclassification of
banking portfolio loans to assets of disposal groups,
partially offset by an £9.9 billion increase in Retail Banking
driven by strong gross mortgage lending.
 Other financial assets, which includes debt securities,
equity shares and other loans, decreased by £9.0 billion,
16%, to £46.1 billion, primarily due to reductions in debt
securities.
 Customer deposits increased by £48 billion, 11%, to £479.8
billion including increases of £17.1 billion in Retail Banking,
£10 billion in Commercial Banking and £7.0 billion in Private
Banking as customers retained liquidity in light of the
COVID-19 economic uncertainty. Treasury reflected a £9.4
billion increase in customer facing repos due to prevailing
market conditions.
 Other financial liabilities, which includes customer deposits
at fair value through profit and loss and debt securities in
issue, increased by £3.5 billion, 8%, to £49.3 billion.
 Subordinated liabilities have decreased by £1.5 billion, 15%,
to £8.4 billion due to redemptions partially offset by new
issuances.
 Other liabilities decreased by £0.6 billion, 9%, to £5.8 billion
mainly due to lower lease liabilities in the year.
 Owners’ equity decreased by £2.0 billion, 5%, to £41.8
billion, driven by share repurchase, ordinary and paid-in-
equity dividends paid, partially offset by the attributable
profit for the year.
86 NatWest Group 2021 Annual Report and Accounts

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Additional information
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Segmental summary income statements
Continuing operations
Go-forward group
Total
Central
excluding
Total
Retail
Private
Commercial
RBS
NatWest
items
Ulster
Ulster
NatWest
Banking
Banking
Banking
International
Markets
& other
Bank RoI
Bank RoI
Group
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
4,074
480
2,582
383
9
(14)
7,514
100
7,614
Non-interest income
371
336
1,293
165
406
199
2,770
128
2,898
Total income
4,445
816
3,875
548
415
185
10,284
228
10,512
Other expenses
(2,250)
(504)
(2,153)
(228)
(907)
(42)
(6,084)
(421)
(6,505)
Strategic costs
(187)
(19)
(93)
(11)
(254)
(201)
(765)
(22)
(787)
Litigation and conduct costs
(76)
3
(108)
(3)
—
(243)
(427)
(39)
(466)
Operating expenses
(2,513)
(520)
(2,354)
(242)
(1,161)
(486)
(7,276)
(482)
(7,758)
Impairment releases
36
54
1,073
52
35
—
1,250
28
1,278
Operating profit/(loss)
1,968
350
2,594
358
(711)
(301)
4,258
(226)
4,032
Total income excluding
notable items
4,445
762
3,865
548
473
(19)
10,074
193
10,267
Return on tangible equity
(1)
na
na
na
na
na
na
10.0%
na
9.4%
Return on equity
(2)
26.1%
17.0%
22.0%
22.5%
(13.1%)
nm
nm
nm
na
Cost:income ratio
(1)
56.5%
63.7%
59.3%
44.2%
279.8%
nm
70.3%
nm
73.4%
Customer deposits (£bn)
188.9
39.3
177.7
37.5
2.3
15.7
461.4
18.4
479.8
Average interest
earning assets (£bn)
196.0
27.2
168.1
37.8
32.7
nm
nm
15.9
524.9
Net interest margin
(1)
2.08%
1.76%
1.54%
1.01%
nm
nm
nm
nm
nm
Third party customer
asset rate (3)
2.66%
2.36%
2.71%
2.26%
nm
nm
nm
nm
nm
Third party customer
funding rate (3)
(0.06%)
—
(0.01%)
0.08%
nm
nm
nm
0.02%
nm
2020 (4)
Continuing operations
Net interest income
3,868
489
2,740
371
(57)
(57)
7,354
122
7,476
Non-interest income
313
274
1,218
126
1,180
(179)
2,932
100
3,032
Total income
4,181
763
3,958
497
1,123
(236)
10,286
222
10,508
Other expenses
(2,295)
(466)
(2,261)
(244)
(1,038)
(19)
(6,323)
(409)
(6,732)
Strategic costs
(226)
(15)
(179)
(49)
(267)
(252)
(988)
(25)
(1,013)
Litigation and conduct costs
(19)
26
10
2
(5)
(120)
(106)
(7)
(113)
Operating expenses
(2,540)
(455)
(2,430)
(291)
(1,310)
(391)
(7,417)
(441)
(7,858)
Impairment losses
(792)
(100)
(1,927)
(107)
(40)
(26)
(2,992)
(139)
(3,131)
Operating profit/(loss)
849
208
(399)
99
(227)
(653)
(123)
(358)
(481)
Total income excluding
notable items
4,231
763
3,995
497
1,230
(46)
10,670
222
10,892
Return on tangible equity
(1)
na
na
na
na
na
na
(1.3%)
na
(2.4%)
Return on equity (2)
10.2%
10.3%
(4.5%)
6.1%
(3.8%)
nm
nm
nm
na
Cost:income ratio
(1)
60.8%
59.6%
59.9%
58.6%
116.7%
nm
71.7%
nm
74.4%
Customer deposits (£bn)
171.8
32.4
167.7
31.3
2.6
6.3
412.1
19.6
431.7
Average interest
earning assets (£bn)
181.4
23.8
163.1
31.7
37.9
nm
nm
16.6
483.7
Net interest margin
(1)
2.13%
2.05%
1.68%
1.17%
nm
nm
nm
nm
nm
Third party customer
asset rate (3)
2.89%
2.53%
2.86%
2.51%
nm
nm
nm
nm
nm
Third party customer
funding rate
(3)
(0.19%)
(0.11%)
(0.08%)
(0.01%)
nm
nm
nm
(0.04%)
nm
nm = not meaningful
(1) Refer to the Non-IFRS financial measures section for details of the basis of preparation.
(2) NatWest Group’s CET1 target is approximately 14% but for the purposes of computing segmental return on equity (ROE), to better reflect the differential drivers of capital usage,
segmental operating profit adjusted for preference share dividends and tax is divided by average notional equity allocated at different rates of 14.5% (Retail Banking), 15.5% (Ulster
Bank RoI), 11.5% (Commercial Banking), 12.5% (Private Banking), 16% (RBS International) and 15% for all other segments, of the period average of segmental risk-weighted assets
equivalents (RWAe) incorporating the effect of capital deductions. NatWest Group return on equity is calculated using profit attributable to ordinary shareholders. Refer to the Non-
IFRS financial measures section for details of the basis of preparation.
(3) Third party customer asset rate is calculated as annualised interest receivable on third-party loans to customers as a percentage of third-party loans to customers. This excludes
assets of disposal groups, intragroup items, loans to banks and liquid asset portfolios. Third party customer funding rate reflects interest payable or receivable on third-party
customer deposits, including interest bearing and non-interest bearing customer deposits. Intragroup items, bank deposits, debt securities in issue and subordinated liabilities are
excluded from the customer funding rate calculation. Net interest margin is calculated as net interest income as a percentage of the average interest-earning assets, excluding
assets of disposal groups and without these remaining exclusions.
(4) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
87NatWest Group 2021 Annual Report and Accounts
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NNaattWWeesstt GGrroouupp Annual Report and Accounts 2021 88
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Segment performance
Retail Banking
2021
2020
Variance
Income statement
£m £m
£m
%
Net interest income
4,074
3,868
206
5
Non-interest income
371
313
58
19
Total income
4,445
4,181
264
6
Other expenses
(2,250)
(2,295)
45
(2)
Strategic costs
(187)
(226)
39
(17)
Litigation and conduct costs
(76)
(19)
(57)
300
Operating expenses
(2,513)
(2,540)
27
(1)
Impairment releases/(losses)
36
(792)
828
(105)
Operating profit
1,968
849
1,119
132
Performance ratios
Return on equity
(1)
26.1%
10.2%
15.9%
Net interest margin
2.08%
2.13%
(0.05%)
Cost:income ratio
56.5%
60.8%
(4.3%)
Loan impairment rate
(2bps)
45bps
(47bps)
(1) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 14.5% of the period average of
segmental risk-weighted assets incorporating the effect of capital deductions (RWAes), assuming a 28% tax rate.
2021
2020
Variance
Capital and balance sheet
£bn £bn
£m
%
Loans to customers (amortised cost)
- personal advances
7.1
7.3
(0.2)
(3)
- mortgages
172.8
163.0
9.8
6
- cards
3.8
3.8
—
—
Total loans to customers (amortised cost)
183.7
174.1
9.6
6
Loan impairment provisions
(1.5)
(1.8)
0.3
(17)
Net loans to customers (amortised cost)
182.2
172.3
9.9
6
Total assets
210.0
197.6
12.4
6
Customer deposits
188.9
171.8
17.1
10
Risk-weighted assets
36.7
36.7
—
—
2021 compared with 2020
 In 2021, Retail Banking continued to grow net lending with
an measured approach to risk, delivering a return on equity
of 26.1% and operating profit of £1,968 million. Lending
growth was supported by a strong performance in
mortgages and a return to unsecured lending growth in the
second half of 2021.
 Retail Banking completed £1.1 billion of Climate and
Sustainable Funding and Financing in 2021, which will
contribute towards the new NatWest Group target of £100
billion of Climate and Sustainable Funding and Financing
between 1 July 2021 and the end of 2025.
 Total income was £264 million, or 6.3%, higher than 2020
reflecting mortgage balance and margin improvement,
higher transactional-related fee income and non-repeat of
loss on acquisition, partially offset by the impact of the
lower interest rate environment on deposit returns, lower
average unsecured balances and the annualised impact of
regulatory changes on fee income.
 Net interest margin was 5 basis points lower than 2020
reflecting lower deposit returns and lower average
unsecured balances, partly offset by higher mortgage
margins.
 Other expenses decreased by £45 million, or 2.0%,
compared with 2020 primarily reflecting an 8.8% reduction
in headcount as a result of continued customer digital
adoption, automation and improvement of end-to-end
customer journeys, including digitalising the customer
account opening processes, leading to an increase in
straight through processing within journeys from 45% in
December 2020 to 70% in December 2021.
 Strategic costs of £117 million in Q4 2021 include an £85
million impairment of goodwill, reflecting a legacy business
in accelerated run down within Retail Banking.
 An impairment release of £36 million primarily reflects ECL
provision releases in the non-defaulted portfolio.
 Net loans to customers increased by £9.9 billion, or 5.7%,
compared with 2020 as a result of strong gross new
mortgage lending and improved retention. Gross new
mortgage lending was £36.0 billion with flow share of
11.5%, supporting mortgage balance growth of £9.8 billion
or 6.0%, representing a stock share of 11.0%. Cards were
stable however, we have seen improved customer spend
and demand in the second half of 2021. Personal advances
reduced by £0.2 billion as customers made higher overdraft
repayments in H1 2021, reflecting the impact of UK
Government restrictions partly offset by growth in H2 2021
as customer demand for personal loans increased as the
UK economy recovered.
 Customer deposits increased by £17.1 billion, or 10.0%,
compared with 2020 as UK Government schemes combined
with Covid related restrictions resulted in lower customer
spend and increased savings in H1 2021.
 RWAs were broadly stable compared with 2020 primarily
reflecting lending growth, offset by continued quality
improvements.
88 NatWest Group 2021 Annual Report and Accounts

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NNaattWWeesstt GGrroouupp Annual Report and Accounts 2021 89
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Segment performance continued
Private Banking
2021
2020
Variance
Income statement
£m £m
£m
%
Net interest income
480
489
(9)
(2)
Non-interest income
336
274
62
23
Total income
816
763
53
7
Other expenses
(504)
(466)
(38)
8
Strategic costs
(19)
(15)
(4)
27
Litigation and conduct costs
3
26
(23)
(88)
Operating expenses
(520)
(455)
(65)
14
Impairment releases/(losses)
54
(100)
154
(154)
Operating profit
350
208
142
68
Performance ratios
Return on equity (1)
17.0%
10.3%
6.7%
Net interest margin
1.76%
2.05%
(0.29%)
Cost:income ratio
63.7%
59.6%
4.1%
Loan impairment rate
(29bps)
58bps
(87bps)
(1) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 12.5% of the period average of
segmental risk-weighted assets incorporating the effect of capital deductions (RWAes), assuming a 28% tax rate.
2021
2020
Variance
Capital and balance sheet
£bn
£bn
£m
%
Loans to customers (amortised cost)
- personal
2.3
2.2
0.1
5
- mortgages
11.8
10.7
1.1
10
- other
4.4
4.2
0.2
5
Total loans to customers (amortised cost)
18.5
17.1
1.4
8
Loan impairment provisions
(0.1)
(0.1)
—
—
Net loans to customers (amortised cost)
18.4
17.0
1.4
8
Total assets
29.9
26.2
3.7
14
Assets under management (AUMs)
(2)
30.2
27.0
3.2
12
Assets under administration (AUAs)
(2)
5.4
5.1
0.3
6
Assets under management and administration (AUMA) (2)
35.6
32.1
3.5
11
Customer deposits
39.3
32.4
6.9
21
Loan:deposit ratio
47%
52%
(5%)
(10)
Risk-weighted assets
11.3
10.9
0.4
4
(2) The definition of AUMs/AUAs has been updated to provide clarity on assets where the investment management is undertaken by Private Banking. AUMs now comprises assets
where the investment management is undertaken by Private Banking irrespective of the franchise the customer belongs to. AUAs now comprises third party assets held on an
execution-only basis in custody. Total AUMA remain as before.
2021 compared with 2020
 In 2021, Private Banking delivered strong growth across
AUMA, lending and deposits which has supported a 2021
return on equity of 17.0% and operating profit of £350
million. Digital net new money across NatWest Invest, Royal
Bank Invest and Coutts Invest of £0.8 billion in 2021 is more
than double 2020. Approximately 2,114 new customers
were onboarded into Private Banking, an increase of
around 29% compared to 2020.
 NatWest Group completed the sale of Adam & Company’s
investment management business on 1 October 2021 for a
total consideration of £54 million, which has been recorded
as a notable item in the Q4 2021 results.
 Total income was £53 million, or 6.9%, higher than 2020
reflecting a £54 million consideration from the sale of the
Adam & Company investment management business in Q4
2021 and strong balance growth partially offset by lower
deposit returns in a lower interest rate environment.
 Net interest margin decreased by 29 basis points reflecting
lower deposit returns and higher liquidity portfolio costs.
 Other expenses were £38 million, or 7.9%, higher than 2020
principally due to investment in digital infrastructure and an
increase in headcount related to the enhancement of AUMA
growth propositions.
 A net impairment release of £54 million in 2021 mainly
reflects ECL provision releases in non-default portfolios.
 Net loans to customers increased by £1.4 billion, or 8.2%,
compared with 2020 driven by continued strong mortgage
lending growth of £1.1 billion or 10.3%, including gross new
lending of £3.3 billion. RWAs increased by £0.4 billion, or
3.7%.
 Customer deposits increased by £6.9 billion, or 21.3%,
compared with 2020 reflecting strong personal and
commercial inflows as UK Government restrictions resulted
in clients continuing to build and retain liquidity.
 AUMAs increased by £3.5 billion, or 10.9%, driven by an
increase in AUM net new money (NNM) of £3.0 billion and
AUM positive investment performance of £2.1 billion,
partially offset by the £1.8 billion impact of the sale of Adam
& Company’s investment management business and £0.2
billion EEA resident client outflows following the UK’s exit
from the EU. AUM NNM of £3.0 billion represents 9.3% of
opening AUMAs, which is double NNM in 2020.
89NatWest Group 2021 Annual Report and Accounts
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Governance Risk and capital management Additional informationFinancial statements

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NNaattWWeesstt GGrroouupp Annual Report and Accounts 2021 90
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
Segment performance continued
Commercial Banking
2021
2020
Variance
Income statement
£m £m
£m
%
Net interest income
2,582
2,740
(158)
(6)
Non-interest income
1,293
1,218
75
6
Total income
3,875
3,958
(83)
(2)
Other expenses (excluding operating lease depreciation)
(2,013)
(2,116)
103
(5)
Strategic costs
(93)
(179)
86
(48)
Litigation and conduct costs
(108)
10
(118)
(1,180)
Operating expenses
(2,354)
(2,430)
76
(3)
Impairment releases/(losses)
1,073
(1,927)
3,000
(156)
Operating profit/(loss)
2,594
(399)
2,993
(750)
Performance ratios
Return on equity
(1)
22.0%
(4.5%)
26.5%
Net interest margin
1.54%
1.68%
(0.14%)
Cost:income ratio
59.3%
59.9%
(0.6%)
Loan impairment rate
(104bps)
173bps
(277bps)
(1) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 11.5% of the period average of
segmental risk-weighted assets incorporating the effect of capital deductions (RWAes), assuming a 28% tax rate.
2021
2020
Variance
Capital and balance sheet
£bn
£bn
£m
%
Loans to customers (amortised cost)
- business banking
14.3
13.5
0.8
6
- SME & mid corporates
34.6
32.4
2.2
7
- specialised business
15.5
14.8
0.7
5
- large corporates & institutions (1)
18.8
21.4
(2.6)
(12)
- real estate
(2)
18.6
21.5
(2.9)
(13)
- commercial - EU divestment (3)
—
5.9
(5.9)
(100)
- other
(4)
0.9
1.6
(0.7)
(44)
Total loans to customers (amortised cost)
102.7
111.1
(8.4)
(8)
Loan impairment provisions
(1.5)
(2.9)
1.4
(48)
Net loans to customers (amortised cost)
101.2
108.2
(7.0)
(6)
Total assets
184.6
187.4
(2.8)
(1)
Customer deposits
177.7
167.7
10.0
6
Loan:deposit ratio
57%
65%
(8%)
(12)
Risk-weighted assets
66.4
75.1
(8.7)
(12)
(1) Segment reporting for income, impairments and loans to customers for large corporates & institutions (LC&I) includes the Western European business segment.
(2) Real estate includes commercial real estate and housing associations.
(3) EU Divestment balances from Q2 2021 integrated within business banking (Q3 2020 - £0.9 billion, Q4 2020 - £1.1 billion) and SME & mid corporates (Q3 2020 - £5.0 billion, Q4 2020
- £4.8 billion), as the Incentivised Switching Scheme (ISS) closed at the end of June 2021.
(4) Other includes shipping and project finance.
2021 compared with 2020
 Commercial Banking delivered a resilient performance with
a return on equity of 22.0% and operating profit of £2,594
million including a £1,073 million impairment release as the
UK economy continued to recover. Returns have improved
through active capital management, pricing discipline, and
a targeted sector strategy linked to our purpose.
 Growth in Tyl, our innovative merchant acquiring platform
saw over £1.5 billion of transactions in 2021, three times
2020 levels, as transaction activity recovered and
customers favoured digital payment solutions and reduced
their reliance on cash and branch.
 Commercial Banking completed £5.2 billion of Climate and
Sustainable Funding and Financing in 2021, including £2.7
billion in H2 2021 which will contribute towards the new
NatWest Group target of £100 billion between 1 July 2021
and the end of 2025.
 Total income was £83 million, or 2.1%, lower than 2020 due
to reduced deposit returns in a low interest rate
environment and lower lending volumes, partially offset by
a recovery in transactional banking fee income in H2 2021
driven by the UK economy.
 Net interest margin decreased by 14 basis points in 2021
reflecting lower deposit returns.
 Other expenses, excluding OLD, decreased by £103 million,
or 4.8%, compared with 2020 reflecting cost efficiencies and
simplifying our operating model enabling better service to
our customers including building momentum in our digital
service, whilst reducing our headcount by 9.8%.
 Impairment release of £1,073 million primarily reflects ECL
provision releases related to the improved economic outlook
with Stage 3 defaults remaining at low levels.
 Net loans to customers decreased by £7.0 billion, or 6.4%,
compared with 2020 primarily reflecting and targeted
sector reductions including real estate, retail and leisure
and active capital management of £1.0 billion. Customer
liquidity resulted in net revolving credit facility (RCF)
repayments of £1.7 billion driven by large corporates &
institutions and real estate as well as UK Government
financial support scheme repayments of £1.3 billion. RCF
utilisation was approximately 19% of committed facilities in
2021, significantly below pre-COVID-19 levels of
approximately 27%. These items were partially offset by
£1.4 billion lower loan provisions and growth in specialist
businesses of £0.7 billion.
 Customer deposits increased by £10.0 billion, or 6.0%,
compared with 2020 reflecting customer behaviour to build
and retain liquidity.
 RWAs decreased by £8.7 billion, or 11.6%, compared with
2020 mainly reflecting business movements including
targeted sector reductions in real estate and retail,
improvement in risk parameters and active capital
management of £1.5 billion.
90 NatWest Group 2021 Annual Report and Accounts

Financial review continued
NNaattWWeesstt GGrroouupp Annual Report and Accounts 2021 91
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Segment performance continued
RBS International
2021
2020
Variance
Income statement
£m £m
£m
%
Net interest income
383
371
12
3
Non-interest income
165
126
39
31
Total income
548
497
51
10
Other expenses
(228)
(244)
16
(7)
Strategic costs
(11)
(49)
38
(78)
Litigation and conduct costs
(3)
2
(5)
(250)
Operating expenses
(242)
(291)
49
(17)
Impairment releases/(losses)
52
(107)
159
(149)
Operating profit
358
99
259
262
Performance ratios
Return on equity
(1)
22.5%
6.1%
16.4%
Net interest margin
1.01%
1.17%
(0.16%)
Cost:income ratio
44.2%
58.6%
(14.4%)
Loan impairment rate
(33bps)
80bps
(113bps)
(1) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 16% of the period average of
segmental risk-weighted assets incorporating the effect of capital deductions (RWAes), assuming a 17.5% (14% prior to Q1 2021) tax rate.
2021
2020
Variance
Capital and balance sheet
£bn
£bn
£m
%
Loans to customers (amortised cost)
- corporate
12.7
10.4
2.3
22
- mortgages
2.4
2.5
(0.1)
(4)
- other
0.5
0.5
—
—
Total loans to customers (amortised cost)
15.6
13.4
2.2
16
Loan impairment provisions
(0.1)
(0.1)
—
—
Net loans to customers (amortised cost)
15.5
13.3
2.2
17
Total assets
40.6
34.0
6.6
19
Customer deposits
37.5
31.3
6.2
20
Risk-weighted assets
7.5
7.5
—
—
Depositary assets
(1)
479.4
427.5
51.9
12
(1) Assets held by RBSI as an independent trustee and in a depositary service capacity.
2021 compared with 2020
 During 2021 RBS International (RBSI) delivered £358 million
of operating profit with return on equity of 22.5% through
strong lending and deposit volumes, an impairment release
and continued growth in our depositary offering. This was
achieved while continuing investment in our digital offering
to customers including new payment features on the mobile
app for both personal and business customers and the
extension of our video banking proposition delivered in 2021.
 RBSI completed £1.5 billion of Climate and Sustainable
Funding and Financing in 2021, including £0.9 billion in H2
2021 which will contribute towards the new NatWest Group
target of £100 billion between 1 July 2021 and the end of
2025.
 Total income increased by £51 million, or 10.3%, compared
with 2020 as a result of higher average lending balances in
Institutional Banking, including higher non-utilisation fees,
and higher depositary fee income.
 Net interest margin decreased by 16 basis points in 2021
reflecting a higher proportion of lower yielding assets with
central banks due to the higher volume of short term
customer deposits in the year.
 Other expenses decreased by £16 million, or 6.6%,
compared with 2020 primarily reflecting the reduction in the
bank levy charge for 2021.
 An impairment release of £52 million in 2021 largely reflects
releases across Stage 1 and 2 within the wholesale sector.
 Net loans to customers increased by £2.2 billion, or 16.5%,
compared with 2020 as a result of higher Institutional
Banking sector volumes.
 Customer deposits increased by £6.2 billion, or 19.8%,
compared with 2020 as a result of higher call balances in
the Institutional Banking sector throughout the year.
 Depositary assets were £51.9 billion, or 12.1%, higher than
2020 reflecting strong performance in the funds sector
primarily in the UK.
 RWAs of £7.5 billion are broadly stable compared with 2020
as a result of lending volume growth primarily in the
Institutional Banking sector, offset by model updates in the
period.
91NatWest Group 2021 Annual Report and Accounts
Strategic report
Financial review
Governance Risk and capital management Additional informationFinancial statements

Financial review continued
NNaattWWeesstt GGrroouupp Annual Report and Accounts 2021 92
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Segment performance continued
NatWest Markets
(1)
2021
2020
Variance
Income statement
£m £m
£m
%
Net interest income
9
(57)
66
(116)
Non-interest income
406
1,180
(774)
(66)
Total income
415
1,123
(708)
(63)
Other expenses
(907)
(1,038)
131
(13)
Strategic costs
(254)
(267)
13
(5)
Litigation and conduct costs
—
(5)
5
(100)
Operating expenses
(1,161)
(1,310)
149
(11)
Impairment releases/(losses)
35
(40)
75
(188)
Operating loss
(711)
(227)
(484)
213
Analysis of income by product
(2)
Fixed income
(64)
518
(582)
(112)
Currencies
427
583
(156)
(27)
Capital Markets
336
384
(48)
(13)
Capital Management Unit & other
(29)
(62)
33
(53)
Income before revenue share paid, asset disposals and OCA
670
1,423
(753)
(53)
Revenue share with other NatWest Group segments
(197)
(193)
(4)
2
Income excluding asset disposals and OCA
473
1,230
(757)
(62)
Asset disposals/strategic risk reduction
(3)
(64)
(83)
19
(23)
Own credit adjustments (OCA)
6
(24)
30
(125)
Total income
415
1,123
(708)
(63)
Performance ratios
Return on equity
(4)
(13.1)%
(3.8)%
(9.3)%
Cost:income ratio
279.8%
116.7%
163.1%
2021
2020
Variance
Capital and balance sheet
£bn
£bn
£bn
%
Loans to customers (amortised cost)
7.5
8.4
(0.9)
(11)
Total assets
200.7
270.1
(69.4)
(26)
Funded assets
96.1
105.9
(9.8)
(9)
Risk-weighted assets
24.2
26.9
(2.7)
(10)
(1) The NatWest Markets operating segment is not the same as the NatWest Markets Plc legal entity (NWM Plc) or group (NWM or NWM Group) because the NatWest Markets segment
excludes the Central items & other segment.
(2) Product performance includes gross income earned on a group-wide basis, including amounts contributed to other segments.
(3) Asset disposals/strategic risk reduction relates to the cost of exiting positions, which includes changes in carrying value to align to the expected exit valuation, and the impact of risk
reduction transactions entered into, in respect of the strategic announcement on 14 February 2020.
(4) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 15% of the period average of
segmental risk-weighted assets incorporating the effect of capital deductions (RWAe), assuming a 28% tax rate.
2021 compared with 2020
 NatWest Markets has supported its customers’ evolving
needs with innovative solutions and continued to deliver a
more integrated customer proposition across NatWest
Group. NatWest Markets has made good progress on
building a refocused, sustainable business from which it can
grow. NatWest Markets incurred an operating loss in 2021
but has largely completed its RWA reduction and continued
to reduce operating expenses, and in Q4 2021, introduced
changes to Rates which will improve the strategic alignment
with the rest of the business and drive income growth.
NatWest Markets performance at the beginning of 2022 has
been in line with expectations.
 NatWest Markets completed £9.7 billion of Climate and
Sustainable Funding and Financing in 2021, including £3.3
billion in H2 2021 which will contribute towards the new
NatWest Group target of £100 billion between 1 July 2021
and the end of 2025.
 Income excluding asset disposals/strategic risk reduction
and OCA was £757 million, or 61.5% lower than 2020. The
performance of Fixed Income was weak in 2021 impacted
by subdued levels of customer activity and the reshaping of
the business, in contrast to the prior year which benefitted
from exceptional levels of market activity generated by the
initial spread of the COVID-19 virus. Both Currencies and
Capital Markets income were lower than in 2020 but
performed broadly in line with expectations.
 Other expenses decreased by £131 million, or 12.6%,
compared with 2020 reflecting continued reductions in line
with the strategic announcement in February 2020.
 A net impairment release of £35 million in 2021 reflects
releases against a number of cases throughout the year.
 RWAs decreased by £2.7 billion, or 10.0%, compared with
2020 reflecting lower levels of market risk and counterparty
credit risk, including the impact of capital optimisation
actions taken throughout the year.
92 NatWest Group 2021 Annual Report and Accounts

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Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Segment performance continued
Ulster Bank RoI
Continuing operations
2021
2020 (1)
Variance
2021
2020 (1)
Variance
Income statement
€m €m €m
%
£m £m
£m
%
Net interest income
116
137
(21)
(15)
100
122
(22)
(18)
Non-interest income
149
113
36
32
128
100
28
28
Total income
265
250
15
6
228
222
6
3
Other expenses
(487)
(462)
(25)
5
(421)
(409)
(12)
3
Strategic costs
(25)
(28)
3
(11)
(22)
(25)
3
(12)
Litigation and conduct costs
(45)
(8)
(37)
463
(39)
(7)
(32)
457
Operating expenses
(557)
(498)
(59)
12
(482)
(441)
(41)
9
Impairment releases/(losses)
33
(157)
190
(121)
28
(139)
167
(120)
Operating loss
(259)
(405)
146
(36)
(226)
(358)
132
(37)
Average exchange rate - €/£
1.163
1.125
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
2021
2020
Variance
2021
2020
Variance
Capital and balance sheet
€bn
€bn
€bn
%
£bn
£bn
£m
%
Loans to customers (amortised cost)
- mortgages
7.3
15.2
(7.9)
(52)
6.2
13.7
(7.5)
(55)
- other lending
1.1
5.7
(4.6)
(81)
1.0
5.1
(4.1)
(80)
Total loans to customers (amortised
cost)
8.4
20.9
(12.5)
(60)
7.2
18.8
(11.6)
(62)
Loan impairment provisions
(0.5)
(0.9)
0.4
(44)
(0.5)
(0.8)
0.3
(38)
Net loans to customers (amortised
cost)
7.9
20.0
(12.1)
(61)
6.7
18.0
(11.3)
(63)
Total assets
27.2
29.6
(2.4)
(8)
22.8
26.6
(3.8)
(14)
Funded assets
27.2
29.6
(2.4)
(8)
22.8
26.6
(3.8)
(14)
Customer deposits
21.9
21.8
0.1
0.5
18.4
19.6
(1.2)
(6)
Risk-weighted assets
10.9
13.2
(2.3)
(17)
9.1
11.8
(2.7)
(23)
Spot exchange rate - €/£
1.190
1.113
2021 compared with 2020
 Ulster Bank RoI continues to make progress on its phased
withdrawal from the Republic of Ireland. On 17 December
2021 UBIDAC entered a legally binding agreement with
Permanent TSB p.l.c. (PTSB) for the proposed sale of
approximately €7.6 billion of gross performing loans as at
30 June 2021, comprising performing non-tracker
mortgages, performing loans in the micro-SME business,
the UBIDAC Asset Finance business, including its digital
platform, and 25 Ulster Bank branch locations. Completion
of the sale is subject to obtaining competition, regulatory
and other approvals, including PTSB's holding company
shareholder approval, and other conditions being satisfied.
The transaction is expected to occur in phases between Q4
2022 and Q1 2023 with the majority of loans expected to
transfer by Q4 2022.
 Progress continues with Allied Irish Banks, p.l.c. (AIB) for
the transfer of approximately €4.2 billion, plus up to €2.8
billion of undrawn exposures, of performing commercial
lending. A key part of the process is to complete the
regulatory approvals and the Competition and Consumer
Protection Commission (CCPC) has already carried out an
extended preliminary investigation and on 31 December
2021 announced its decision to carry out a Phase 2
investigation into the proposed sale. There is no firm date
for the completion of this process. Discussions are ongoing
with other counterparties about their potential interest in
other parts of the bank.
 The values shown above represent the continuing
operations of Ulster Bank RoI, including re-presented
comparatives for the income statement. The re-
presentation is in accordance with IFRS 5 ‘Non-current
Assets Held for Sale and Discontinued Operations’.
 Total income was €15 million, or 6.0%, higher than 2020
reflecting gains arising from the adjustment of the swap
hedging portfolio to align the modelled maturity position of
deposits and other balances to the withdrawal plan, offset
by lower lending levels and fee income as a result of the
decision to withdraw from the RoI market.
 Other expenses were €25 million, or 5.4%, higher than
2020, due to higher VAT costs and regulatory levies,
partially offset by a 15% reduction in headcount, lower
advertising spend and back office operational costs.
 A net impairment release of €33 million in 2021 reflects
improvements in the reducing loan portfolios and economic
forecasts.
 Net loans to customers decreased by €12.1 billion primarily
due to the reclassification of €10.7 billion of loans to the
disposal group.
93NatWest Group 2021 Annual Report and Accounts
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Governance Risk and capital management Additional informationFinancial statements

Financial review continued
NNaattWWeesstt GGrroouupp Annual Report and Accounts 2021 94
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
Segment performance continued
Central items & other
2021
2020
Variance
£m
£m
£m
%
Central items not allocated
(301)
(653)
352
(54)
Funding and operating costs have been allocated to operating segments based on direct service usage, the requirement for market
funding and other appropriate drivers where services span more than one segment. Residual unallocated items relate to volatile
corporate items that do not naturally reside within a segment.
2021 compared with 2020
 Central items not allocated represented a £301 million operating loss in 2021 principally reflecting litigation and conduct
charges of £243 million, strategic costs of £201 million and losses on redemption of own debt of £138 million related to the
repurchase of legacy instruments, partially offset by a £219 million share of gains under equity accounting for Business Growth
Fund, and other Treasury income. 2020 included the day one loss on redemption of own debt of £324 million related to the
repurchase of legacy instruments, property-related strategic costs and litigation and conduct charges.
94 NatWest Group 2021 Annual Report and Accounts

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NNaattWWeesstt GGrroouupp Annual Report and Accounts 2021 95
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Summary financial statements
NatWest Group’s financial statements are prepared in accordance with IFRS. Selected data under IFRS for each of the last three
years is presented below.
2021
2020
(1)
2019
(1)
Summary consolidated income statement
£m £m £m
Net interest income
7,614
7,476
7,799
Non-interest income
2,898
3,032
6,188
Total income
10,512
10,508
13,987
Operating expenses
(7,758)
(7,858)
(9,280)
Profit before impairment losses
2,754
2,650
4,707
Impairment releases/(losses)
1,278
(3,131)
(724)
Operating profit/(loss) before tax
4,032
(481)
3,983
Tax charge
(996)
(74)
(439)
Profit/(loss) from continuing operations
3,036
(555)
3,544
Profit from discontinued operations, net of tax
276
121
256
Profit/(loss) for the year
3,312
(434)
3,800
Attributable to:
Ordinary shareholders
2,950
(753)
3,133
Preference shareholders
19
26
39
Paid-in equity holders
299
355
367
Non-controlling interests
44
(62)
261
3,312
(434)
3,800
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
2021
2020
2019
Summary consolidated balance sheet
£m
£m
£m
Cash and balances at central banks
177,757
124,489
80,993
Trading assets
59,158
68,990
76,745
Derivatives
106,139
166,523
150,029
Settlement balances
2,141
2,297
4,387
Loans to banks and customers - amortised cost
366,672
367,499
334,501
Other financial assets
46,145
55,148
61,452
Other and intangible assets
14,965
14,545
14,932
Assets of disposal groups
9,015
—
—
Total assets
781,992
799,491
723,039
Deposits
506,089
452,345
389,740
Trading liabilities
64,598
72,256
73,949
Settlement balances, derivatives, other financial liabilities and subordinated liabilities
160,658
222,023
206,147
Other liabilities
8,844
9,043
9,647
Owners' equity
41,796
43,860
43,547
Non-controlling interests
7
(36)
9
Total liabilities and equity
781,992
799,491
723,039
95NatWest Group 2021 Annual Report and Accounts
Strategic report
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Governance Risk and capital management Additional informationFinancial statements

Governance
96 NatWest Group 2021 Annual Report and Accounts

96 Governance
98 Our Board
102 Chairman’s introduction
103 Corporate governance
114 Report of the Group Nominations and
Governance Committee
116 Report of the Group Audit Committee
124 Report of the Group Board Risk Committee
132 Report of the Group Sustainable Banking Committee
134 Report of the Technology and Innovation Committee
136 Directors’ remuneration report
158 Annual remuneration report
175 Other remuneration disclosures
181 Compliance report
184 Report of the directors
187 Statement of directors’ responsibilities
97NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Our Board
Corporate governance
Howard Davies
Chairman
Alison Rose
Group Chief Executive Officer
Date of appointment:
1 November 2019
Committee memberships
N/A
Contribution to the Board:
Alison has been instrumental in
leading NatWest Group’s progress
and performance as a purpose-led
organisation, since NatWest Group’s
purpose was announced in February 2020.
Having gained a wealth of frontline
banking experience during her 29-year
career with NatWest, Alison brings a
strong customer focus to Board
discussions alongside an essential
stakeholder lens. Alison is a passionate
supporter of diversity and is executive
sponsor for NatWest Group’s
employee-led networks.
Relevant experience:
Having joined as a graduate in 1992,
Alison’s diverse career at NatWest Group
has included a number of senior leadership
roles, including Deputy CEO of NatWest
Holdings; Chief Executive of Commercial &
Private Banking; Head of Europe, Middle
East and Africa, Markets & International
Banking; and Global Head of International
Banking Capital and Balance Sheet. In
2019, Alison was commissioned by the UK
Government to report on the barriers to
women starting businesses. She now
sits on the Rose Review Board and is
responsible for driving forward its
recommendations.
Current external appointments:
– Board member of the Institute of
International Finance
– Member of the International Business
Council for the World Economic Forum
– Trustee of Business in the Community
(BITC) and Chair of the Scottish BITC
Advisory Board
– Non-executive director of Great
Portland Estates plc
– Director of the Coutts Charitable
Foundation
– Member of the UK Government’s Help
to Grow Advisory Council
Date of appointment:
14 July 2015 (Board), 1 September 2015
(Chairman)
Committee memberships
Contribution to the Board:
Howard brings substantial financial
services knowledge and experience to the
Board, together with a deep understanding
of global economic, environmental and
social issues. With extensive board level
experience, Howard draws on his prior
regulatory and supervisory expertise to
contribute both strategic and practical
insights to Board discussions and debate.
Howard is also a highly adept Chairman
with valuable leadership and stakeholder
management skills.
Relevant experience:
Howard has held several regulatory
roles during his career including Chairman
of the UK Financial Services Authority
and Deputy Governor of the Bank of
England. Howard was Director of the
London School of Economics and Political
Science and is also Professor of Practice
at the Paris Institute of Political Studies
(Sciences Po).
Howard has also previously served as a
non-executive director of Morgan Stanley
and Prudential plc, as Chairman of
Phoenix plc and as Chair of the UK
Airports Commission.
Current external appointments:
– Chairman of Inigo Limited
– Member of the Regulatory and
Compliance Advisory Board of
Millennium Management LLC
– Chair of the International Advisory
Council of the China Securities
Regulatory Commission
– Member of the International Advisory
Council of the China Banking and
Insurance Regulatory Commission
N
Date of appointment:
1 January 2019
Committee memberships
N/A
Contribution to the Board:
Katie is a Chartered Accountant with
nearly 30 years experience in finance and
accounting gained through several roles
across the financial services industry.
Katie’s deep knowledge and experience
in specialist areas including capital
management, investor relations and
financial planning mean she is well
placed to provide valuable input and
expertise during Board discussions.
Relevant experience:
Katie joined NatWest Group as Director
of Finance in 2015 and was appointed as
Deputy Chief Financial Officer in March
2017. She was appointed as Chief
Financial Officer in January 2019.
Katie was previously the Group Finance
Director for Old Mutual Emerging Markets,
based in Johannesburg (2011 to 2015),
having held various roles across Old
Mutual from 2002. Prior to this Katie
worked at KPMG for 13 years. She is
a member of the Institute of Chartered
Accountants in Scotland.
Current external appointments:
– Member of the Money and Pensions
Service Advisory Group
Katie Murray
Group Chief Financial Officer
Board Committees
Group Nominations & Governance Committee
S
Group Sustainable Banking Committee
A
Group Audit Committee
T
Technology and Innovation Committee
Ri
Group Board Risk Committee
Re
Group Performance & Remuneration Committee
Underline indicates Committee Chairman
N
98 NatWest Group 2021 Annual Report and Accounts

Date of appointment:
1 April 2017 (Board), 1 January 2018
(Senior Independent Director)
Committee memberships
Contribution to the Board:
Mark, a former senior investment banker,
brings comprehensive financial services
knowledge and substantial FTSE 100
board experience to the Board. A former
boardroom adviser, Mark contributes
significant banking and corporate
transformation expertise in particular,
alongside a range of customer and
wider stakeholder engagement skills.
Relevant experience:
Mark has held various senior roles at
Credit Suisse/BZW during his executive
career, including Deputy Chairman, CSFB
Europe and Chairman, UK Investment
Banking, CSFB.
Mark has served as a non-executive
director on company boards across a
range of industry sectors, including BG
Group plc, as Senior Independent Director
of Kingfisher plc, and as Deputy Chairman
of G4S plc. He has significant experience
of chairing committees and as a Senior
Independent Director.
Current external appointments:
– Non-executive director of
Smiths Group plc
– Non-executive director and trustee of
The Brooklands Museum
A ReN
Date of appointment:
16 May 2016
Committee memberships
Contribution to the Board:
Frank is a former investment banker
and technology company CEO with
substantial global board expertise.
This broad background enables Frank to
make a valuable contribution to Board
discussions, particularly in relation to
technology, digital and innovation matters.
Frank’s experience also encompasses key
areas including customer experience,
stakeholder engagement, ESG and risk.
In April 2018, Frank assumed the role of
Chairman of NatWest Markets Plc, which
enables him to bring a unique perspective
to Board debate.
Relevant experience:
During his executive career, Frank held
various roles at Thomson S.A., including
Chairman and Chief Executive Officer,
and was Deputy Chief Executive Officer
of France Telecom. Prior to that he was
Chairman of SG Warburg France and
Managing Director of SG Warburg.
Frank has also held a number of non-
executive roles at Crédit Agricole CIB,
EDF, Home Credit, Orange, Sonaecom
SGPS and Arqiva Group Limited. He
was also Deputy Chairman and acting
Chairman of Telenor ASA, an international
media communications group.
Current external appointments:
– Chairman of NortonLifeLock Inc.
– Non-executive director of IHS
Holding Limited
– Chairman of SPEAR Investments I B.V.
– Chairman of the Advisory Board of
STJ Advisors
Re
T
Date of appointment:
1 June 2018
Committee memberships
Contribution to the Board:
Patrick contributes significant retail
and commercial banking experience to
the Board, together with a background
in complex organisational restructuring
and technology transformation. This
experience enables Patrick to provide
insightful contributions to Board
discussions on complex matters,
alongside his significant financial
knowledge and expertise.
Relevant experience:
Patrick was the Chief Financial Officer
and a member of the Executive Board
of ING Group for over eight years to
May 2017. Prior to that, he worked for
HSBC for 20 years. Patrick is a Fellow
of Chartered Accountants Ireland.
Current external appointments:
– Non-executive director and Senior
Independent Director of Aviva plc
A
TRiN
Mark Seligman
Senior Independent Director
Frank Dangeard
Independent non-executive director
Patrick Flynn
Independent non-executive director
99NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Morten Friis
Independent non-executive director
Robert Gillespie
Independent non-executive director
Corporate governance continued
Yasmin Jetha
Independent non-executive director
Date of appointment:
2 December 2013
Committee memberships
Contribution to the Board:
Having run a global investment bank
during his executive career, Robert has
in-depth knowledge of banking and its
role within the economy. As a Chartered
Accountant, Robert understands complex
organisations and demonstrates strong
stakeholder management and leadership
skills, which enable him to provide
constructive views and contributions
during Board discussions.
Relevant experience:
Robert’s career in investment banking
specialised in corporate advisory work. He
was also Director General of the Takeover
Panel from 2010 until 2013. Prior to that
Robert held a number of senior positions
at UBS including being global head of
investment banking, Chief Executive of
UBS for EMEA and Vice Chairman of UBS
Investment Bank. Robert began his career
at Price Waterhouse (now PwC) and then
S.G. Warburg which subsequently became
part of UBS.
Robert was also previously Chairman of
The Boat Race Company Limited.
Current external appointments:
– Non-executive director of Burford
Capital Limited
– Professor of Practice at the University
of Durham
– Non-executive director of Social
Finance Limited
A Ri
Re
N
Date of appointment:
10 April 2014
Committee memberships
Contribution to the Board:
Morten is a former frontline banker,
who subsequently became a Chief
Risk Officer in a universal bank. He has
in-depth knowledge and expertise in risk
management within the financial services
industry, which enables him to make
a substantial contribution to Board
discussions and debate on risk matters.
Morten is also knowledgeable in regulatory
matters, capital markets, transformation
management and corporate resolution.
Relevant experience:
Morten’s extensive executive career
included various roles at Royal Bank
of Canada and its subsidiaries, such
as Senior Vice President, Group Risk
Management, Chief Credit Officer and
then Chief Risk Officer. Previously he
was also a Director of RBC Bank (USA);
Westbury Life Insurance Company; RBC
Life Insurance Company; and RBC Dexia
Investor Services Trust Company.
Morten also served as a Non-executive
director of Jackson National Life Insurance
Company for five years, and was chair of
its board risk committee and a member
of its audit committee.
Current external appointments:
– Member of the board of directors of
the Harvard Business School Club
of Toronto
A
Ri
N
Date of appointment:
1 April 2020
Committee memberships
Contribution to the Board:
Yasmin brings a wealth of retail banking
and customer experience to the Board, as
well as valuable technology and innovation
insights, and a strong background in
general management. Yasmin adds
strength and depth to the Board in these
important areas, supporting challenge and
debate and effective decision-making.
On 1 April 2020 Yasmin re-joined the
Board of NatWest Group plc, having first
been appointed in June 2017. Yasmin
stepped down in April 2018 in order
to serve solely as a director of our key
ring-fenced entities, and, like the majority
of our directors, she continues to serve on
these boards in addition to the Board of
NatWest Group plc.
Relevant experience:
During her executive career, Yasmin held
Chief Information Officer roles at Bupa
and the Financial Times, where she later
became the Chief Operating Officer. Prior
to that Yasmin held a number of senior
roles at Abbey National PLC, in a career
spanning nearly 20 years, where latterly
she served as an executive director on
the board.
Yasmin has also held a number of
non-commercial roles including Vice
Chair of the Board of Governors at the
University of Bedfordshire (2008 to 2011)
and Vice Chair of the National Committee
of the Aga Khan Foundation (UK) Ltd, a
non-denominational charity that works
with communities in Africa, Asia and the
Middle East.
Current external appointments:
– Non-executive director of Guardian
Media Group plc
– Non-executive director of Nation Media
Group Limited
S
T
100 NatWest Group 2021 Annual Report and Accounts

Mike Rogers
Independent non-executive director
Lena Wilson
Independent non-executive director
Jan Cargill
Chief Governance Officer and Company
Secretary
Date of appointment:
26 January 2016
Committee memberships
Contribution to the Board:
Mike is an extremely experienced retail
and commercial banker, with extensive
boardroom experience. As a former Chief
Executive, Mike brings a broad-based
skillset and perspective to the Board,
particularly in relation to customer
experience, general management
and stakeholder engagement.
Relevant experience:
During his executive career Mike was
Chief Executive of Liverpool Victoria
Group and he held a variety of roles, both
in the UK and overseas, at Barclays Bank.
This included roles in business banking,
wealth management and retail banking
where Mike was Managing Director of
Small Business, Premier Banking and
UK Retail Banking.
Current external appointments:
– Chairman of Experian plc
– Chairman of Aegon UK plc
Re
S
Date of appointment:
1 January 2018
Committee memberships
Contribution to the Board:
Lena contributes significant knowledge
and experience to the Board drawn from a
broad executive and non-executive career.
She has extensive transformation and
development skills, with experience
in enterprise, internationalisation,
stakeholder management, ESG
and general management.
As Chair of the NatWest Group Colleague
Advisory Panel since it was established in
2018, Lena provides valuable insights on
customer and people issues in particular.
Relevant experience:
Lena has a portfolio of Chair roles in the
listed, private equity and professional
services sectors. She has been a FTSE 100
non-executive director for 10 years and
previously served on the boards of Scottish
Power Renewables Limited and Intertek
Group plc. Lena was Chief Executive of
Scottish Enterprise from November 2009
until October 2017 and prior to that, was
Senior Investment Advisor to The World
Bank in Washington DC.
Lena was a member of Scotland’s
Financial Services Advisory Board and
Chair of Scotland’s Energy Jobs Taskforce.
In June 2015 she received a CBE for
services to economic development
in Scotland.
Current external appointments:
– Chair of Picton Property
Income Limited
– Chair of AGS Airports Limited
– Senior Independent Director of
Argentex Group plc
– Member of the UK Prime Minister’s
Business Council for 2022
– Chair of the Advisory Board of Turtle
Pack Limited
– Chair of Chiene + Tait LLP
– Visiting Professor, University
of Strathclyde Business School
Re SRi
Date of appointment:
5 August 2019
Contribution to the Board:
Jan works closely with the Chairman to
ensure effective and efficient functioning
of the Board and appropriate alignment
and information flows between the Board
and its Committees. She is responsible for
advising the Board and individual directors
on all governance matters, and also
facilitates Board induction and
directors’ professional development.
Relevant experience:
Jan is a chartered company secretary
with over 20 years corporate governance
experience. She was appointed Chief
Governance Officer and Company
Secretary in 2019, and prior to that held
various roles in the legal and secretariat
functions, including Head of Board and
Shareholder Services.
Jan has a law degree and is a Fellow
of the Chartered Banker Institute. She
is also an Associate of The Chartered
Governance Institute and has an INSEAD
Certificate in Corporate Governance.
101NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Chairman’s
introduction
Corporate governance continued
Contents
98 Our Board
103 Corporate governance
114 Report of the Group
Nominations and
Governance Committee
116 Report of the Group
Audit Committee
124 Report of the Group Board
Risk Committee
132 Report of the Group
Sustainable Banking
Committee
134 Report of the Technology and
Innovation Committee
136 Directors’ remuneration
report
181 Compliance report
184 Report of the directors
187 Statement of directors’
responsibilities
Dear Shareholder,
I am pleased to present the Corporate
Governance Report for 2021.
The Board met mostly virtually during the
year and while we missed the opportunity to
meet and engage with colleagues in person,
virtual meeting technology continued to offer
an effective alternative which supported the
efficient running of the Board.
The Board spent significant time overseeing
the implementation of our strategy and transformation programme alongside other
key priorities including our ongoing withdrawal from the Republic of Ireland, capital
distributions and financial crime. COVID-19 also remained a key area of focus for
the Board in 2021, particularly the support being provided to our customers and
colleagues. The three additional independent non-executive directors of NatWest
Holdings Limited attend all Board and relevant Board Committee meetings
as observers and contribute a ring-fenced bank perspective to Board and
Committee discussions.
Further details of the Board’s principal activities during 2021 can be found on
page 104.
As a Board, we know how important it is to engage with our stakeholders, to listen
to them and to consider their interests during Board discussions and decision-making.
Understanding the needs of our stakeholders is at the core of our purpose framework
as shown on pages 12 to 13.
Examples of how the Board has engaged with key stakeholders and considered
their interests, including the impact on principal decisions, can be found on pages
14 to 17 and pages 52 to 53 of the Strategic report and later in this Corporate
governance report.
There were no changes to Board or Board Committee membership during 2021,
however we continue to keep the composition, skills and experience of the Board
under review.
Board effectiveness
In 2021, the Board and Committee evaluation was externally facilitated by
Independent Board Evaluation. Further information on how the evaluation
was conducted, key outcomes and actions arising can be found on page 112.
UK Corporate Governance Code 2018
All directors are committed to observing high standards of corporate governance,
integrity and professionalism.
Information on how the company has applied the Principles and complied with the
Provisions of the UK Corporate Governance Code 2018 (the Code) can be found in this
Corporate governance report under the Code’s five main section headings. A formal
statement of compliance with the Code can be found on page 181.
In conclusion I would like to thank my fellow Board members for their outstanding
contributions and commitment throughout the year.
Howard Davies
Chairman of the Board
17 February 2022
102 NatWest Group 2021 Annual Report and Accounts

Board and Committee meetings
The table below shows Board and Committee membership and directors’ meeting attendance during 2021. There were six
scheduled Board meetings during 2021, the same number as in 2020.
In addition to scheduled meetings, additional ad hoc meetings of the Board and some of its Committees were held throughout the
year to receive updates and deal with time-critical matters. There were eight additional Board meetings held in 2021 compared to
16 additional meetings held in 2020. When directors are unable to attend meetings convened at short notice, they receive the
papers and have the opportunity to provide their feedback in advance.
In accordance with the Code, the Chairman and the non-executive directors met at least once without executive directors present.
Board and Committee membership and meeting attendance in 2021
Board
Group Audit
Committee (GAC)
Group Board Risk
Committee (BRC)
Group Nominations
and Governance
Committee (N&G)
Group Performance
and Remuneration
Committee (RemCo)
Group Sustainable
Banking Committee
(SBC)
Technology and
Innovation
Committee (TIC)
Director Scheduled Ad hoc Scheduled Ad hoc Scheduled Ad hoc Scheduled Ad hoc Scheduled Ad hoc Scheduled Ad hoc Scheduled Ad hoc
Howard Davies 6/6 8/8 – – – – 4/4 – – – – – – –
Alison Rose 6/6 8/8 – – – – – – – – – – – –
Katie Murray 6/6 8/8 – – – – – – – – – – – –
Frank Dangeard
(1)
6/6 7/8 – – – – – – 8/8 3/3 – – 4/4 –
Patrick Flynn 6/6 8/8 5/5 – 8/8 1/1 4/4 – – – – – 4/4 –
Morten Friis 6/6 8/8 5/5 – 8/8 1/1 4/4 – – – – – – –
Robert Gillespie 6/6 8/8 5/5 – 8/8 1/1 4/4 – 8/8 3/3 – – – –
Yasmin Jetha 6/6 8/8 – – – – – – – – 5/5 2/2 4/4 –
Mike Rogers
(1)
6/6 7/8 – – – – – – 8/8 3/3 5/5 2/2 – –
Mark Seligman 6/6 8/8 5/5 – – – 4/4 – 8/8 3/3 – – – –
Lena Wilson 6/6 8/8 – – 8/8 1/1 – – 8/8 3/3 5/5 2/2 – –
(1) Mr Dangeard and Mr Rogers were each unable to attend one ad hoc meeting, due to prior commitments.
How the Board operated in 2021
The Board continued to meet largely virtually during 2021.
A hybrid meeting was held in July and in September the full
Board was able to meet in person for the first time since the
start of the pandemic.
At each scheduled Board meeting the directors received
reports from the Chairman, Board Committee Chairmen,
Group Chief Executive Officer (Group CEO), Group Chief
Financial Officer (Group CFO), Group Chief Risk Officer
and other members of the executive management team, as
appropriate (referred to in the Board annual calendar which
follows as ‘regular reports’). Other senior executives attended
Board meetings throughout the year to present reports to the
Board. This provided the Board with an opportunity to engage
directly with management on key issues and support
succession planning.
The Board and Group Executive Committee (ExCo) operating
rhythm continues to support a proactive and transparent
agenda planning and paper preparation process. This
process includes the following key elements:
– A pre-Board meeting with the Chairman, Group CEO,
Group CFO and Chief Governance Officer and Company
Secretary to ensure the Board and executive management
are aligned on Board agendas.
– A post Board meeting with the Chairman, Group CEO
and Chief Governance Officer and Company Secretary
to discuss what went well or could be improved after
each meeting.
– A look ahead paper at each ExCo and Board meeting
setting out key items that will be discussed at the
next meeting.
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Corporate governance continued
Board annual calendar for 2021
Spotlight and ad hoc items Scheduled items Training
January
(ad hoc)
– Strategy updates
– Capital distributions
– Executive remuneration
February – Strategy updates
– Budget
– Capital distributions
– Banking Standards Board
presentation (now Financial
Services Culture Board or FSCB)
– Regular reports
– Business reviews
– 2020 Annual Results (including
ESG Supplement and Climate-
related Disclosures Report)
– Legal and regulatory report
– Board business insights pack
– 2021 Board objectives
– 2021 Annual General Meeting
arrangements
March
(ad hoc)
– Talent engagement session
– Strategy
– One Bank transformation
– Colleague Advisory Panel report
– Directed share buyback
– Internal Capital Adequacy
Assessment Process
– Internal Liquidity Adequacy
Assessment Process
– Board succession planning
– Financial crime
– Operational resilience
– Consumer protection
April – Strategy updates
– One Bank transformation
– Regular reports
– Business reviews
– Risk management framework
– Risk appetite
– Q1 2021 results
– Legal and regulatory report
– Board business insights pack
– 2021 Annual General Meeting
arrangements
– Health and safety annual review
– Governance Framework
annual review
Principal areas of Board focus in 2021
As in 2020, a short set of Board objectives was adopted for
2021, closely aligned to our purpose and strategic priorities.
These have supported agenda planning and helped to guide
how the Board spends its time, ensuring appropriate focus on
the longer-term and strategic issues. Whilst our response to the
COVID-19 pandemic continued to be a priority for the Board,
there was a shift away from standalone pandemic-related
updates towards integrated reporting on COVID-19 related
matters across the Board agenda, including through our
regular reports and business reviews.
The Chief Governance Officer and Company Secretary
maintains an annual agenda planner designed to ensure
that all matters set out in the Board’s terms of reference are
considered by the Board. The table below is an overview of the
main matters considered by the Board during 2021 and also
shows the Board training provided. In 2021, we introduced the
use of videos into Board training and presentations which has
been well received by the Board. They have been used, for
example, to deliver background materials as well as insights
from colleagues and customers to support Board discussions.
Ad hoc meetings of the Board were held concurrently with
scheduled meetings of the Board of NatWest Holdings Limited
in March and September, to deal with any time critical matters
or to support efficient review of items of mutual interest.
104 NatWest Group 2021 Annual Report and Accounts

Spotlight and ad hoc items Scheduled items Training
June – Talent and executive succession
– Recovery plans
– Capital distributions
– Annual Board strategy session
– Regular reports
– Colleague Advisory Panel report
– Business reviews
– Legal and regulatory report
– Board business insights pack
– Group money laundering reporting
officer report
– Financial crime
– 2020 Modern Slavery and
Human Trafficking statement
– Our View mid-year survey results
– 2021 solvency stress test results
– Directors’ duties in resolution
July – Prudential Regulation
Authority presentation
and engagement session
– Culture spotlight
– One Bank transformation
– Brand portfolio
– Capital distributions
– Resolvability Self-Assessment
– On-market share buyback
– Regular reports
– Business reviews
– H1 2021 results
– Legal and regulatory report
– Board business insights pack
– Cyber security
September
(ad hoc)
– One Bank transformation
– Budget and stress scenarios
– Climate Biennial Stress Test
results
– Financial crime
– Financial crime
October – Strategy updates
– One Bank transformation
– Our View annual survey results
– Regular reports
– Business reviews
– Q3 2021 results
– Talent and executive succession
– Legal and regulatory report
– Board business insights pack
– Climate
December – Strategy updates
– One Bank transformation
– Annual Board effectiveness review
– Budget
– Capital distributions
– Operational resilience
– Our values refresh
– Culture measurement report
– Annual purpose update
– Brand portfolio
– Board skills matrix
– Executive performance and
remuneration
– Regular reports
– Business reviews
– Colleague Advisory Panel report
– Risk management framework
– Risk appetite
– Board business insights pack
– Financial crime
– 2022 Annual General Meeting
arrangements
Online training
Included video materials as part
of training or Board materials.
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Subsidiary governance and ring-fencing
NatWest Group plc is a listed company with equity listed on the
London and New York stock exchanges.
NatWest Holdings Limited (NWH) is the holding company for
our ring-fenced operations, which include our retail, commercial
and private banking businesses. A common board structure is
operated such that the directors of NWH are also directors of
The Royal Bank of Scotland plc and National Westminster Bank
Plc. Known collectively as the NWH Sub Group, the boards of
these three entities meet concurrently.
On 3 May 2021, following Court approval, the business of
Ulster Bank Limited was transferred into its immediate parent,
National Westminster Bank Plc (NWB Plc). This reorganisation
saw the Ulster Bank brand in Northern Ireland become a
trading name of NWB Plc and simplified the NatWest Group
by aligning the legal entity structure with the pre-existing
management structure. The simplification ensured continuity
of service under the Ulster Bank brand, with customers
continuing to receive the same products and services through
the same channels. Colleagues became employees of NWB Plc,
with their existing benefits and conditions of employment
remaining unchanged.
An integral part of NatWest Group’s governance arrangements
is the appointment of three double independent non-executive
directors (DINEDs) to the boards, and board committees, of the
NWH Sub Group. They are Francesca Barnes, Graham Beale,
and Ian Cormack.
The DINEDs are independent in two respects: (i) independent
of management as non-executives; and (ii) independent of
the rest of NatWest Group by virtue of their NWH Sub
Group-only directorships.
The DINEDs play a critical role in NatWest Group’s ring-fencing
governance structure, and are responsible for exercising
appropriate oversight of the independence and effectiveness
of the NWH Sub Group’s governance arrangements, including
the ability of each board to take decisions independently.
The DINEDs attend NatWest Group plc Board and relevant
Board Committee meetings in an observer capacity.
The governance arrangements for the boards and board
committees of NatWest Group plc and the NWH Sub Group
have been designed to enable NatWest Group plc to exercise
appropriate oversight and to ensure that, as far as is
reasonably practicable, the NWH Sub Group is able
to take decisions independently of the wider Group.
NatWest Markets supports NatWest Group’s corporate
and institutional customers through NatWest Markets Plc
and its subsidiaries.
RBS International serves retail, commercial and corporate
customers and financial institutions and operates through
The Royal Bank of Scotland International (Holdings) Limited
and its subsidiaries.
The Group Nominations and Governance Committee monitors
the governance arrangements of NatWest Group plc and its
subsidiaries and approves appointments to the boards of
principal and material regulated subsidiaries, as described in
the Group Nominations and Governance Committee report
on page 114.
2018 UK Corporate Governance Code
Throughout the year the company has applied the Principles
and complied with the Provisions of the Code, except in
relation to:
– Provision 17 that the Group Nominations and Governance
Committee should ensure plans are in place for orderly
succession to both the board and senior management
positions and oversee the development of a diverse
pipeline for succession; and
– Provision 33 that the Group Performance and Remuneration
Committee should have delegated responsibility for setting
remuneration for the Chairman and executive directors.
In both instances, the Board considers that these are matters
which should rightly be reserved for the Board, as set out in
more detail in our statement of compliance on page 181.
In addition, the Board has delegated two particular aspects
of the Code’s provisions to Board Committees, with regular
updates provided to the Board as appropriate:
– The Group Audit Committee has delegated responsibility
for reviewing and monitoring NatWest Group’s
whistleblowing process.
– The Group Sustainable Banking Committee has delegated
responsibility for reviewing key workforce policies and
practices (not related to pay) to ensure they are consistent
with NatWest Group’s values and support long-term
sustainable success.
For further information please refer to the remainder
of this report and the relevant Committee reports on the
following pages.
Further information on how the company has applied the
Principles and complied with the Provisions of the Code is
set out below under the Code’s five main section headings.
Board leadership and company purpose
Role of the Board
The Board is collectively responsible for promoting the
long-term sustainable success of the company, driving both
shareholder value and contribution to wider society. The
Board’s role is to provide leadership of the company within
a framework of prudent and effective controls which enables
risk to be assessed and managed. The Board establishes
NatWest Group’s purpose, values and strategy and leads the
development of NatWest Group’s culture. The Board sets the
strategic aims of the company and its subsidiaries, ensures that
the necessary resources are in place for NatWest Group to
meet its objectives, is responsible for the raising and allocation
of capital and reviews business and financial performance.
It ensures that the company’s obligations to its shareholders
and other key stakeholders are understood and met.
Corporate governance continued
106 NatWest Group 2021 Annual Report and Accounts

The Board terms of reference include a formal schedule
of matters specifically reserved for the Board’s decision
and are reviewed at least annually. They are available at
natwestgroup.com. An internal review confirmed the Board
had fulfilled its remit as set out in its terms of reference
during 2021.
Board Committees
The Board has established a number of Board Committees
with particular responsibilities. Please refer to the Committee
Chairman reports for further details. Board Committee terms
of reference are available at natwestgroup.com.
Purpose, values, strategy and culture
In February 2020, and following an extensive period of
stakeholder engagement, the Board approved NatWest
Group’s purpose and strategy. Throughout 2021, our
purpose has continued to inform and drive our response to the
pandemic, acting as an important point of reference during
Board discussions, debate and decision-making.
The Board received its annual purpose update in December
2021 which summarised progress in becoming a purpose-led
bank against the three purpose focus areas of climate,
enterprise and learning. It highlighted the progress to
date on embedding purpose and delivering against public
commitments; the key areas of focus for 2022; and an update
on stakeholders’ perception of NatWest Group and its purpose
aligned to the Blueprint for Better Business framework.
Further information on progress against our purpose and
strategic priorities can be found in the Strategic report.
The Board assesses and monitors NatWest Group’s culture
in several ways, as illustrated by the diagram below.
NatWest Group plc – Board responsibilities in relation to culture
– Leads the development of NatWest Group’s culture, values and standards.
– Assesses and monitors culture.
– Reviews and approves NatWest Group’s values.
Board reporting on culture
What did the Board receive?
When did it
receive it?
Key areas of focus
Banking Standards Board (BSB)
presentation (now FSCB)
February BSB’s 2020 Survey Annual Report and its review of the embedding of purpose in
NatWest Group.
Colleague Advisory
Panel reports
March
June
December
Feedback on discussions from Colleague Advisory Panel meetings. Topics
covered included wellbeing support for colleagues, retail banking strategy,
purpose, remuneration (including executives and the wider workforce),
climate and ways of working.
One Bank Transformation
Programme spotlight on
organisation, skills and culture
April
October
Future of work and strategic workforce planning. This covered new ways of
working, colleague journeys, colleague experience, career development, skills
and capability, learning, wellbeing and inclusion.
Our View colleague survey June
October
December
Insights from the colleague opinion surveys conducted in April and September
2021. Key measures included culture, purpose, building capability, inclusion,
engagement and leadership. A follow up paper was presented to the Board
in December to address an action from the Board on how to strengthen
engagement with middle and senior mangers on leading through transformation.
Culture spotlight July An update on the refresh of our values and the alignment to purpose and
strategy as well as an overview of cultural strengths, behavioural weaknesses,
operating model and future culture.
Culture measurement report July
December
Insights and metrics to allow the Board to assess the status of NatWest Group’s
culture and understand future priorities. The reports used the Blueprint for
Better Business framework to report progress highlighting both positive trends
and areas for improvement.
Our values December The Board was asked to approve the refreshed values which had been updated
to ensure greater alignment to purpose and strategy.
Board business insights pack Each meeting Metrics to demonstrate how NatWest Group is delivering for colleagues
(culture, purpose and inclusion).
The activities described above have supported the Board in meeting the Code requirement to satisfy itself that the company’s
purpose, values, strategy and culture are aligned.
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Corporate governance continued
Stakeholder
Group
How stakeholder
views have been
communicated
Examples of what was shared How did the Board use that information?
Customers
– Group CEO report
– Business reviews
– Ad hoc reports to
the Board
– Updates on customer engagement activity and
customer sentiment.
– Competition and Markets Authority service
quality results and Net Promoter Scores.
– Allowed the Board to oversee and challenge business
performance more effectively and better understand
performance versus peers.
Colleagues
– Group CEO report
– Business reviews
– Colleague specific
papers presented
to the Board
– Ways of working updates.
– Our View survey results.
– Culture measurement reports.
– Colleague input to the development of our
refreshed values.
– Allowed the Board to better understand colleague
sentiment and levels of colleague engagement and, in
the case of the values refresh, how colleagues’ views
have been considered and influenced the final proposal.
Communities
– Board training
– Ad hoc reports to
the Board
– Training materials on climate.
– Launch of CareerSense.
– The climate training session updated the Board on
progress against our climate ambitions, goals and
targets and supported a better understanding of
regulatory and investor expectations on climate.
– The CareerSense update was a good example of our
purpose in action and NatWest Group’s support of
young people and communities across the UK.
Investors
– Investor feedback
reports
– Group CFO report
– Detailed investor feedback (both equity market
reaction and fixed income market reaction)
was shared each quarter following each
results presentation.
– Feedback on other investor presentations
by management.
– External market perspectives.
– Investor feedback reports provided the Board with
direct feedback from investors on NatWest Group’s
strategy and financial performance.
– The Group CFO kept the Board updated on external
market perspectives which included share price
performance and trading activity, allowing the
Board to monitor investor activity.
Regulators
– Regulatory
correspondence
– Group CEO and
Group CFO reports
and business
reviews
– Relevant regulatory correspondence that
regulators requested be shared with the
Board and, where applicable, proposed
management responses.
– Updates on regulatory engagement.
– Sharing the correspondence and proposed responses
allowed the Board to understand key matters being
raised by regulators and how management were
addressing those.
– Kept the Board informed on key topics being discussed
by management with regulators, enhancing the Board’s
understanding of key regulatory priorities.
Suppliers
– Business reviews – Regular updates on key supplier and
partnership relationships and initiatives
being undertaken with them.
– Provided the Board with visibility on key supplier
activity and how this is supporting our purpose,
strategy, financial performance and our ambitions
on climate and the environment.
Stakeholder engagement
In February 2021, the Board approved its annual objectives
and confirmed the Board’s key stakeholder groups –
customers, colleagues, communities, investors, regulators,
and suppliers. The Board’s agenda and engagement plans
were structured to enhance the Board’s understanding of
stakeholders’ views and interests. This in turn has informed
Board discussions and decision-making.
Workforce engagement
NatWest Group’s Colleague Advisory Panel (CAP) was set up in
2018 to help promote colleague voices in the boardroom and
supports our compliance with Code requirements in relation
to Board engagement with the workforce.
Through the CAP, colleagues can engage directly with senior
management and the Board on topics which are important to
them, thereby strengthening the voice of colleagues in the
Boardroom. The CAP is made up of 28 colleagues who
represent employee-led networks, talent programmes,
employee representative bodies or are self-nominated.
In this way we ensure the panel is diverse, inclusive and
representative of the workforce.
The CAP met with representatives from the Board
three times in 2021 to discuss issues such as wellbeing,
remuneration (including executives and the wider workforce),
climate, retail banking strategy, sustainability and purpose.
The CAP continues to be highly regarded by those who
attend and has proven to be an effective way of establishing
two-way dialogue between colleagues and Board members.
In 2022 we are reviewing our approach to how the Board
engages with the workforce.
The Stakeholder engagement section of the Strategic report
on pages 14 to 17 includes examples of how the Board
engaged directly with stakeholders, and our section 172(1)
statement on pages 52 to 53 describes how stakeholder
interests have been considered in board decision-making,
including principal decisions.
Set out below is an overview of further ways in which
stakeholder views have been communicated to the Board,
which often takes place indirectly via management updates.
108 NatWest Group 2021 Annual Report and Accounts

The effectiveness of Board stakeholder engagement
mechanisms is considered during the annual Board evaluation.
Further details on NatWest Group’s approach to investing
in and rewarding its workforce can be found on pages 58 to 61
of the Strategic report.
Workforce policies and practices
As referred to above, the Board has delegated certain Code
provisions to Board Committees, with regular updates to the
Board on relevant issues.
In October 2021 the Group Sustainable Banking Committee
considered key workforce policies and practices as part of
its people and culture meeting, where a spotlight on living our
purpose included updates on reward, career development,
succession planning, recruitment, inclusion and learning
frameworks. At that time, it was acknowledged that a
refreshed set of values, aligned to our purpose, would be
presented to the Board in December 2021 for approval
and that workforce policies and practices would be updated
where required to ensure ongoing alignment to NatWest
Group’s values.
The Group Audit Committee retains responsibility for reviewing
and monitoring NatWest Group’s whistleblowing process.
Conflicts of interest
The Directors’ Conflicts of Interest policy sets out procedures
to ensure that the Board’s management of conflicts of
interest and its powers for authorising certain conflicts
are operating effectively.
Each director is required to notify the Board of any actual or
potential situational or transactional conflict of interest and
to update the Board with any changes to the facts and
circumstances surrounding such conflicts.
Situational conflicts can be authorised by the Board in
accordance with the Companies Act 2006 and the company’s
Articles of Association. The Board considers each request for
authorisation on a case-by-case basis and has the power to
impose conditions or limitations on any authorisation granted
as part of the process. Details of all directors’ conflicts of
interest are recorded in a register which is maintained by
the Chief Governance Officer and Company Secretary and
reviewed annually by the Board.
Division of responsibilities
The Board has 11 directors comprising the Chairman, two
executive directors and eight independent non-executive
directors, one of whom is the Senior Independent Director.
Director biographies and details of the Board Committees of
which they are members can be found on pages 98 to 101.
Non-executive director independence
The Board considers that the Chairman was independent on
appointment and that all current non-executive directors are
independent for the purposes of the Code.
Chairman and Group CEO
The role of Chairman is distinct and separate from that of
the Group CEO and there is a clear division of responsibilities,
with the Chairman leading the Board and the Group CEO
managing the business day to day.
Senior Independent Director
Throughout 2021, Mark Seligman, as Senior Independent
Director, acted as a sounding board for the Chairman, and
as an intermediary for other directors when necessary. He
was also available to shareholders to discuss any concerns
they may have had, as appropriate.
Non-executive directors
Along with the Chairman and executive directors, the
non-executive directors are responsible for ensuring the
Board fulfils its responsibilities under its terms of reference.
The non-executive directors combine broad business
and commercial experience with independent and objective
judgment. They provide constructive challenge, strategic
guidance, and specialist advice to the executive directors
and the executive management team and hold management
to account.
The balance between non-executive and executive directors
enables the Board to provide clear and effective leadership
across NatWest Group’s business activities and ensures no
one individual or small group of individuals dominates the
Board’s decision-making.
The Chairman and non-executive directors meet at least once
every year without the executive directors present.
Details of the key responsibilities of the Chairman, Group CEO,
Senior Independent Director and non-executive directors are
available at natwestgroup.com.
The performance of the Chairman and non-executive directors
is evaluated annually and further details of the process
undertaken can be found on page 113.
Chief Governance Officer and Company Secretary
The Chief Governance Officer and Company Secretary,
Jan Cargill, works closely with the Chairman to ensure
effective and efficient functioning of the Board and appropriate
alignment and information flows between the Board and
its Committees.
The Chief Governance Officer and Company Secretary
is responsible for advising the Board and individual directors
on all governance matters, and also facilitates Board induction
and directors’ professional development.
Executive management
The Group CEO is supported by Group ExCo, which considers
strategic, financial, capital, risk and operational issues affecting
NatWest Group and reviews relevant matters in advance of
Board submission. Group ExCo’s membership comprises the
Group CEO, Group CFO and the Group Chief Risk Officer; who
are also members of the wider executive management team.
Biographies of the executive management team can be found
at natwestgroup.com.
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Time commitment and external appointments
It is anticipated that non-executive directors will allocate
sufficient time to the company to discharge their responsibilities
effectively and will devote such time as is necessary to fulfil
their role. Directors have been briefed on the limits on the
number of other directorships that they can hold under the
requirements of the fourth Capital Requirements Directive.
The Code emphasises the importance of ensuring directors
have sufficient time to meet their board responsibilities. Prior to
appointment, significant commitments require to be disclosed
with an indication of the time involved. External appointments
require prior Board approval, with the reasons for permitting
significant appointments explained in the Annual Report
and Accounts.
Lena Wilson and Frank Dangeard both re-organised their
portfolios of appointments and took up new appointments in
2021. Ms Wilson was appointed as a non-executive director
and subsequently Chair of Picton Property Income Limited
and as a non-executive director and Chair of AGS Airports
Limited and Mr Dangeard was appointed Chairman of SPEAR
Investments I B.V. These appointments were approved by
the Board in advance and the Board considered both potential
conflicts and time commitment and was satisfied that each
would be able to continue to meet their commitments to
NatWest Group given the other changes to their
respective portfolios.
The Board continues to monitor the commitments of the
Chairman and directors and is satisfied that they are able to
allocate sufficient time to enable them to discharge their duties
and responsibilities effectively.
Information
All directors receive accurate, timely and clear information on
all relevant matters and have access to the advice and services
of the Chief Governance Officer and Company Secretary.
In addition, all directors are able, if necessary, to obtain
independent professional advice at the company’s expense.
Our Board and Committee paper template includes a
section for authors to explain how the proposal or update
aligns with our purpose and a separate section for them to
include an assessment of the relevant stakeholder impacts
for the directors to consider. This aligns with the directors’
duties under section 172(1) of the Companies Act 2006 and
further details on how the directors have complied with their
section 172(1) duties can be found on pages 52 to 53 of
the Strategic report.
Our directors are mindful that it is not always possible to
achieve an outcome which meets the requirements, needs
and/or expectations of all stakeholders who are, or may be,
impacted. For decisions which are particularly challenging
or complex, we introduced an additional page to our paper
template in 2021 which provides directors with further
information to support purposeful decision-making. This
additional page uses Blueprint for Better Business as a
base and is aligned to our broader purpose framework.
Induction and professional development
Each new director receives a formal induction on joining the
Board, which is coordinated by the Chief Governance Officer
and Company Secretary and tailored to suit the requirements
of the individual concerned. This includes visits to NatWest
Group’s major businesses and functions and meetings with
directors and senior management. Meetings with external
auditors, counsel and stakeholders are also arranged
as appropriate.
All new directors receive a copy of the NatWest Group
Director Handbook. The Handbook operates as a consolidated
governance support manual for directors of NatWest Group plc
and the NWH Sub Group, providing both new and current
directors with a single source of information relevant to their
role. It covers a range of topics including NatWest Group’s
corporate structure; the Board and Board Committee
operating model; Board policies and processes; and a range
of technical guidance on relevant matters including directors’
duties, conflicts of interest, and the UK Senior Managers
and Certification Regime. The Handbook forms part of
a wider library of reference materials available via our
resources portal.
Directors have access to a wide range of briefing and training
sessions and other professional development opportunities.
Internal training relevant to the business of NatWest Group is
also provided. Directors undertake the training they consider
necessary to assist them in carrying out their duties and
responsibilities. The non-executive directors discuss their
training and professional development with the Chairman
at least annually. Details of the training and development
undertaken by directors during 2021, which is co-ordinated by
the Chief Governance Officer and Company Secretary, can be
found on pages 104 to 105 (Board annual calendar for 2021).
Composition, succession and evaluation
Composition
The Board is structured to ensure that the directors provide
NatWest Group plc with the appropriate combination of skills,
experience, knowledge and diversity, as well as independence.
Given the nature of NatWest Group’s businesses, experience
of banking and financial services is clearly of benefit, and the
Board has a number of directors with substantial experience
in those areas. Our directors also possess substantial skills and
experience in the areas of Transformation, Financial Markets/
Investment Banking, and Environmental, Social and
Governance (including climate).
In December 2021 the Group Nominations and Governance
Committee reviewed, and the Board approved, a refreshed
version of our Board skills matrix, a summary view of which
is set out below.
The Board skills matrix reflects directors’ self-assessment of
the skills and experience they bring to Board discussions, in
line with pre-determined criteria aligned to current and future
strategic priorities, and will continue to be considered by the
Group Nominations and Governance Committee, and the
Board, at least once a year.
Corporate governance continued
110 NatWest Group 2021 Annual Report and Accounts

Board skills and experience
0 2 4 6 108
Risk management
Broad Financial Services
Transformation
Financial Markets / Investment Banking
Environmental, Social and Governance (incl climate)
CEO / Senior Executive Management
Customer experience
Government / regulatory / public sector
Retail / Commercial / Private Banking
Digital and Innovation
CFO / Accountant
Technology (infrastructure, cyber)
11
Skills and experience
Number of directors
Board Committees also comprise directors with a variety of
skills and experience so that no undue reliance is placed on
any one individual.
Succession
As set out in its terms of reference the Board is responsible
for ensuring adequate succession planning for the Board and
senior management, so as to maintain an appropriate balance
of skills and experience within NatWest Group and on the Board.
In 2021 the Board received two updates on talent and
executive succession planning which enabled them to
monitor the internal talent pipeline and provide feedback.
These updates included a detailed analysis of the diversity
of the talent pool, with a view towards continuing to improve
diversity over the longer term.
The Board also held a talent session with potential Executive
Committee successors, and members of the Group Sustainable
Banking Committee held an informal session with executive
talent. These sessions helped our non-executive directors to
get to know potential future leaders, through focused debates
on strategic topics.
The Group Nominations and Governance Committee supports
the Board on Board succession planning, including making
recommendations to the Board on Board appointments and
Board Committee membership.
In February 2021 (following review and recommendation
by the Group Nominations and Governance Committee),
the Board approved succession plans for the roles of Senior
Independent Director and Committee Chairs, covering
orderly transition plans for the short and medium term, and
contingency arrangements which could be implemented in
case of an emergency. These succession plans are reviewed
by the Group Nominations and Governance Committee and
approved by the Board at least once a year.
Further information on the role of the Group Nominations and
Governance Committee and its activities during 2021 can be
found in the Committee Chairman’s report on page 114.
Election and re-election of directors
In accordance with the provisions of the Code, all directors
stand for election or re-election by shareholders at the
company’s AGM.
In accordance with the UK Listing Rules, the election or
re-election of independent directors also requires approval
by a majority of independent shareholders.
Evaluation
In accordance with the Code, an evaluation of the
performance of the Board, its Committees, the Chairman
and individual directors takes place annually. The evaluation
is externally facilitated every three years, with internal
evaluations in the intervening years.
An external evaluation was conducted in 2018 by Independent
Board Evaluation (IBE), with internal evaluations taking place in
2019 and 2020. IBE returned in 2021 to facilitate their second
external Board and Committee evaluation for NatWest Group.
Further details on how IBE was selected in 2021, how the 2021
evaluation was conducted and the outcomes and actions
arising from that process are set out in this section.
Progress following the 2020 internal Board evaluation
A number of actions were progressed during 2021 in response to the findings of the 2020 internal Board evaluation.
2020 actions 2021 progress
Agree a shorter and more focused set of
Board objectives for 2021.
– A more concise set of Board objectives was agreed for 2021, supporting effective
management of Board priorities and agenda planning.
Explore different options for directors to
engage with customers.
– Through a customer engagement programme a number of non-executive directors
observed customer facing colleagues in action and heard customer feedback as
part of a focus group or customer listening surgery.
Review potential enhancements to Board
Management Information on customers
and suppliers
– Board reporting was enhanced to include customer measures aligned to purpose
and transformation targets, and enhanced tracking of progress against customer
advocacy and satisfaction targets.
– There was also a review and alignment of customer measures used across the
businesses, to ensure greater consistency of reporting.
– Our business review template was updated to provide for more detailed reporting
on supplier relationships.
Enhance Board visibility of Executive
Committee successors.
– Board visibility of the executive talent pipeline was enhanced through Board and
Group Sustainable Banking Committee talent sessions.
– Senior executives below Executive Committee level continued to present papers
at Board meetings, further contributing to their profile in the Boardroom.
Details of progress made against the actions arising from the 2020 internal Committee evaluations can be found in the relevant
Committee Chairman Reports.
111NatWest Group 2021 Annual Report and Accounts
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Corporate governance continued
2021 Board evaluation – outcomes and actions
The IBE report identified positive changes in Boardroom culture
and dynamics since the last external review in 2018. Board
relationships with management were more transparent, and
there was a better balance between support and challenge
from the Board. Care would be required to ensure this balance
was maintained. Whilst working remotely remained challenging
and directors missed the opportunity for informal interaction,
they were pleased at how quickly and effectively they had
been able to adapt.
After a period of stability in terms of Board composition, the
IBE report highlighted the importance of prioritising Board
succession planning in future. IBE highlighted scope to enhance
the Board’s technology experience, and the importance of
ensuring appropriate focus on diversity (with respect to age,
gender, experience and ethnicity). These are matters which
the Board and Group Nominations and Governance Committee
will keep under review during 2022.
IBE also observed that NatWest Group’s ring-fencing
governance arrangements, which had just been introduced
at the time of the 2018 evaluation, were now considered
to be operating effectively with no significant issues or
concerns raised.
2021 External Board Committee evaluation
IBE were engaged to facilitate the external evaluation in 2021. IBE had previously conducted the 2018 evaluation and at that time,
NatWest Group’s corporate governance arrangements were undergoing significant change in preparation for the implementation
of ring-fencing.
Following a recommendation from the Group Nominations and Governance Committee, the Board agreed that the 2021 evaluation
should be conducted externally in accordance with the Code and that IBE should be appointed again to provide important
continuity. The Board concluded that IBE’s appointment would also provide a helpful opportunity to review how ring-fencing
governance arrangements had embedded since the 2018 exercise.
IBE has no other connection with NatWest Group. The sections of this report which describe the process followed or which attribute
opinions to the external facilitator have been agreed with IBE prior to publication.
How the evaluation was conducted
Objectives and
scope
– The Chairman, Group CEO and Chief Governance Officer and Company Secretary briefed IBE on the
objectives of the 2021 Board and Committee evaluation.
– The NatWest Group plc and NWH Sub Group Boards and Board Committees were confirmed to be in scope
for a comprehensive performance review. Focus areas included Board culture, Board composition and
succession planning (including skills, diversity and experience), strategy (oversight and implementation),
Board focus and priorities, induction, risk management, stakeholder engagement, and quality of meetings
and papers.
Information
gathering
– IBE held interviews with all of the directors, members of senior management, external advisers and auditors.
– The lead evaluator observed the main Board and Committee meetings in October 2021.
– The Chief Governance Officer and Company Secretary provided copies of Board and Committee papers and
other supporting materials to IBE.
Report preparation – IBE prepared draft reports for the Board and Board Committees.
– IBE’s recommendations were based on best practice as described in the Code and other relevant guidelines.
– Draft conclusions were discussed with the Chairman and Committee Chairmen in advance of
report circulation.
Review and action
planning
– Board and Committee reports were presented and discussed at the December 2021 Board and
Committee meetings.
– In February 2022, the Board agreed an action plan in response to the recommendations set out in
IBE’s report.
112 NatWest Group 2021 Annual Report and Accounts

In February 2022 the Board agreed a detailed action plan in response to the recommendations set out in IBE’s 2021 external Board
evaluation report, which included the following:-
Theme 2022 actions
Strategy Introduce a new operating rhythm for Board engagement and oversight with more frequent sessions
during the year focused on key strategic topics.
Board focus and priorities Agree a new set of Board objectives for 2022. Identify opportunities to streamline the Board agenda
and other Board activities to facilitate effective management of Board priorities.
Engagement with the
business and stakeholders
Identify further opportunities for non-executive directors to engage with the business and key
stakeholders either through participation in existing business initiatives or Board specific activity.
Colleague engagement Review the Board’s overall approach to colleague engagement, including the role of the Colleague
Advisory Panel, to ensure it remains fit for purpose.
Implementation of the 2021 Board evaluation action plan will be overseen by the Group Nominations and Governance Committee
during 2022.
2021 Board Committee evaluations – outcomes
and actions
Details of the outcomes of the 2021 external Board Committee
evaluations can be found in the relevant Committee Chairman
reports. Progress against these actions will be tracked at
Committee level during 2022.
2021 Individual director and Chairman
effectiveness reviews
The Chairman met each director individually to discuss their
own performance and continuing professional development
and establish whether each director continues to contribute
effectively to the company’s long-term sustainable success.
The Chairman also shared peer feedback provided to IBE
as part of the evaluation process.
Separately, the Senior Independent Director, together with
the Senior Independent Director of the ring-fenced bank,
sought feedback on the Chairman’s performance from the
non-executive directors, executive directors and other key
internal and external stakeholders and discussed it with the
Chairman. This included peer feedback provided to IBE by
directors as part of the evaluation process.
Audit, risk & internal control
Information on how the company has applied the Principles
and complied with the Provisions set out in this section of
the Code can be found throughout the Annual Report and
Accounts. The following sections are of particular relevance:
– the Group Audit Committee Chairman’s letter and the
report of the Committee (page 116) which sets out the
process undertaken to evaluate the effectiveness of both
the Internal Audit function and the external auditors in 2021,
and the principal findings thereof. It also explains the
approach taken to ensuring the integrity of financial and
narrative statements, and confirms that it supports the
Board in the assessment of NatWest Group’s disclosures
to be fair, balanced and understandable;
– the viability statement (page 76) which details how the
Board has assessed the future prospects of NatWest
Group plc and the ways in which risks are considered
and managed in order to achieve its strategic objectives;
– the Compliance report (page 181), which explains the
internal control framework in place; and
– the Group Board Risk Committee Chairman’s letter and
report of the Committee (page 124) which explains how
the Board oversees the principal and emerging risks facing
NatWest Group and how management addresses these.
Remuneration
The Directors’ remuneration report on pages 136 to
139 provides information on the activities of the Group
Performance and Remuneration Committee, the decisions
taken on remuneration during the year and why the
Committee believes these are the right outcomes in the
circumstances. The report also details how the remuneration
policy for executive directors supports the delivery of the
company’s strategic goals and purpose, with significant
delivery in shares to provide long-term alignment with
shareholders. Information is also included on wider workforce
remuneration and the steps taken to engage with the
workforce around remuneration and ensure fair pay
and a healthy culture.
113NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Report of the Group Nominations
and Governance Committee
Corporate governance continued
Dear Shareholder,
As Chairman of the Board and Chairman of the Group
Nominations and Governance Committee I am pleased to
present our report on the Committee’s activity during 2021.
Role and responsibilities
The Committee is responsible for reviewing the structure,
size and composition of the Board, and membership and
chairmanship of Board Committees and recommends
appointments to the Board. In addition, the Committee
monitors NatWest Group’s governance arrangements to
ensure that best corporate governance standards and
practices are upheld and considers developments relating
to banking reform and analogous issues affecting NatWest
Group. The Committee makes recommendations to the Board
in respect of any consequential amendments to NatWest
Group’s operating model.
The terms of reference of the Committee are reviewed
annually, approved by the Board and are available at
natwestgroup.com.
Principal activity during 2021
There were no changes to the composition of the Board during
2021. The Committee nevertheless acknowledges the tenure
of a number of current Board directors and therefore made
succession planning a priority in 2021. The Committee
reviewed the contribution of a number of Board members
under the Board Appointment Policy which sees non-executive
directors appointed for an initial three year term, subject to
annual re-election at the AGM. Following assessment by the
Committee, they may then be appointed for a further three
year term. Non-executive directors may continue to serve
beyond six years, subject to a maximum tenure of nine years.
The tenures of current Board directors is set out on page 81.
In addition to reviewing the structure, size and composition
of the NatWest Group plc Board, the Committee has also
continued to oversee work aimed at further enhancing
NatWest Group’s subsidiary governance framework. A number
of our material regulated subsidiaries made appointments to
their boards during 2021, which the Committee has overseen.
Spencer Stuart and Green Park have both been engaged
during the year to support NatWest Group’s subsidiary board
search activity. The firms are members of the retained
executive search panel of suppliers (managed by NatWest
Executive Search). Spencer Stuart also provide leadership
advisory and senior executive search and assessment services
to the Human Resources function within NatWest Group.
In addition to succession planning, the Committee has
overseen the process to reach agreement with the PRA in
respect of the renewal of regulatory modifications which
ensure the continuation of a governance model that is
compatible with ring-fencing legislation.
During the year the Committee continued to monitor
NatWest Group’s governance arrangements to ensure that
they remain appropriate by reference to best practices in
corporate governance (having regard to relevant legislation,
guidelines, industry practice and developments affecting
NatWest Group in the markets where it operates).
During 2021 the Committee considered a number of external
policy developments and the potential impacts on NatWest
Group’s corporate governance framework, including HM
Treasury’s independent review of ring-fencing and proprietary
trading, as well as discussion and consultation papers issued
by the FCA, PRA and Bank of England on proposals to
enhance diversity and inclusion in the financial sector.
Membership and meetings
Throughout 2021 the Committee comprised the Chairman
of the Board and four independent non-executive directors.
Graham Beale also observes meetings of the Committee in
his capacity as Senior Independent Director of NWH Ltd
and member of the NWH Ltd Nominations Committee.
The Committee holds a minimum of four meetings per year
and meets on an ad hoc basis as required. In 2021, there
were four meetings. Individual attendance by directors at
these meetings is shown in the table on page 103.
Letter from Howard Davies
Chairman of the Group Nominations
and Governance Committee
114 NatWest Group 2021 Annual Report and Accounts

Performance evaluation
The 2021 review of the effectiveness of the Board and its
senior Committees was facilitated by Independent Board
Evaluation, a specialist board evaluation consultancy. The
Committee has considered and discussed the outcomes of
the evaluation and accepts the findings, more information
on which can be found on page 112. Overall, the review
concluded that the Committee’s responsibilities had been
discharged effectively with no material recommendations
being identified for action. The Committee will continue to
ensure that the full Board is appropriately sighted on the work
of the Committee, including the Board succession activity
that will be a key priority for the Committee during 2022.
The outcomes of the evaluation have been reported to the
Board and the Committee will track progress during the year.
Boardroom Inclusion Policy
As noted on page 81, the Board operates a Boardroom
Inclusion Policy which reflects the most recent industry targets
and is aligned to the NatWest Group Inclusion Policy and
Principles applying to the wider bank. The policy currently
applies to the most senior NatWest Group boards: NatWest
Group plc, NWH Ltd, NWB Plc and RBS plc. A copy of the
Boardroom Inclusion Policy is available at natwestgroup.com/
who-we-are.
Objectives and targets
The Boardroom Inclusion Policy’s objectives ensure that the
Board, and any Committee to which it delegates nomination
responsibilities, follows an inclusive process when making
nomination decisions. That includes ensuring that the
nomination process is based on the principles of fairness,
respect and inclusion, that all nominations and appointments
are made on the basis of individual competence, skills and
expertise measured against identified objective criteria and
that searches for Board candidates are conducted with due
regard to the benefits of diversity and inclusion.
Monitoring and reporting
Throughout 2021 the Board met the recommendation of the
Parker Review with at least one member of the Board being
of Black, Asian or Minority Ethnic background and it intends
to continue to meet that recommendation.
At the end of 2021 the Board exceeded the recommendation
of the FTSE Women Leaders Review ((formerly the Hampton-
Alexander Report) 33% female representation on the boards),
with 36% of the Board being female.
The boards of NatWest Group plc and the NWH Group meet
consecutively and share a largely common membership.
When considered together, the director population across both
boards currently meets the Parker target and exceeds the
FTSE Woman Leaders target with a female representation
of 36%.
Diversity and inclusion progress, including information about
the appointment process, will continue to be reported in the
Group Nominations and Governance Committee’s report in
the NatWest Group plc Annual Report and Accounts.
The balance of skills, experience, independence, knowledge
and diversity on the Board, and how the Board operates
together as a unit, is reviewed annually as part of the Board
evaluation. Where appropriate, findings from the evaluation
will be considered in the search, nomination and appointment
process. Further details on NatWest Group’s approach to
diversity can be found on page 59.
Howard Davies
Chairman of the Group Nominations and
Governance Committee
17 February 2022
115NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Report of the Group
Audit Committee
Corporate governance continued
Membership
Full biographical details of the members of the Committee
during 2021 are set out on pages 98 and 101. The members
are all independent non-executive directors who also sit on
other Board committees in addition to the GAC (as set out in
their biographies). This common membership helps facilitate
effective governance across all finance, risk and remuneration
matters and ensures that agendas are aligned and duplication
of responsibilities is avoided.
Members of the GAC are selected with a view to the expertise
and experience of the Committee as a whole and with proper
regard to the key issues and challenges facing NatWest Group.
As NatWest Group plc is a listed company on the London and
New York stock exchanges it has certain obligations as to the
expertise and qualifications of the Audit Committee. The Board
is satisfied that all GAC members have recent and relevant
financial experience and are independent as defined in the
SEC rules under the US Securities Exchange Act of 1934 (the
‘Exchange Act’) and related guidance. The Board has further
determined that Patrick Flynn, Mark Seligman and Robert
Gillespie are all ‘financial experts’ for the purposes of compliance
with the Exchange Act Rules and the requirements of the New
York Stock Exchange, and that they have competence in
accounting and/or auditing as required under the
Disclosure Guidance and Transparency Rules.
Dear Shareholder,
In 2021 the Group Audit Committee (GAC) has continued to
operate effectively, supporting NatWest Group to help people,
families and businesses to thrive. This report sets out the key
areas of focus for the GAC during the year and explains how
the Committee discharged its key responsibilities.
A core function of the Committee is to oversee and challenge
the processes undertaken by management in the preparation
of the published financial and relevant non-financial information.
The Committee also assists the NatWest Group Board in
carrying out its responsibilities relating to accounting policies
and internal control functions. More detail on the remit of the
Committee can be found in its terms of reference which are
reviewed annually and available at natwestgroup.com.
Scrutinising the integrity and quality of the financial results
released by NatWest Group over the course of the year
continued to be a priority for the Committee. As part of its
review of disclosures such as the quarterly, interim and full
year results, the Committee also considered detailed reports
from management on the judgments applied during the
preparation of the information and legal and regulatory
developments. Consideration was also given to management’s
assessment of the internal controls over financial reporting and
the GAC also received reports from both the internal auditors
on the internal control environment and the external auditors
on internal controls over financial reporting and key
accounting and judgmental matters.
The Committee reviewed the annual, interim and quarterly
supplements on climate, purpose and ESG matters, as well
as the annual Climate-related Disclosures Report. Particular
scrutiny was given to the controls and basis of preparation for
these releases. The Committee recognises such disclosures will
continue to evolve over time. The impact of climate-related
issues on financial statements more broadly was also
considered by the Committee during the year.
As the economic impacts of the COVID-19 pandemic and
measures taken by the Government in response persisted
throughout 2021, the Committee dedicated much time to
the consideration of accounting judgments. In particular the
Committee considered how the judgments were applied to
determining post-model adjustments, as well as the actual and
forecast impact on credit losses. The performance of internal
models used by management for these purposes continued
to improve following enhancements implemented in 2020.
Benchmarking data provided by the PRA and the external
auditor has again offered helpful context to the Committee
given the continued uncertain conditions.
The Committee oversight of the performance of the
Internal Audit function and ensuring its independence is a key
responsibility of the Committee. In February 2021 a new Chief
Audit Executive joined NatWest Group and I have supported
him in delivering enhancements to the operation and focus of
the Internal Audit function.
I have continued to be NatWest Group’s whistleblowing
champion, and the Committee maintains responsibility for
oversight of the independence, autonomy and effectiveness
of NatWest group’s whistleblowing policies and procedures.
In 2021 NatWest Group has continued to offer an effective
whistleblowing service to colleagues.
I welcomed the opportunity to respond to the consultation
launched by the Department for Business, Energy and
Industrial Strategy (BEIS) into audit and corporate governance.
Stakeholders were invited to share their views on a range of
proposals relating to the UK’s corporate governance framework
for major companies and the way they are audited. I shared
my views as Chairman of the GAC on the most pertinent
proposals, which were submitted alongside a detailed NatWest
Group-wide response. I would like to extend my thanks to
my fellow Committee members and attendees for their
contributions to the work of the GAC during 2021.
Patrick Flynn
Chairman of the Group Audit Committee
17 February 2022
Letter from Patrick Flynn
Chairman of the Group Audit
Committee
116 NatWest Group 2021 Annual Report and Accounts

Meetings and visits
Five scheduled meetings of the Committee were held in 2021,
four of which took place immediately prior to the release of
the financial results each quarter. During the year all members
attended the meetings, all of which were held virtually. All
meetings were also attended, in an observational capacity,
by the two non-executive directors of NatWest Holdings
who are members of that entity’s Audit Committee.
In conjunction with the Group and NWH Board Risk Committee
(BRC) and the NWH Audit Committee, the GAC undertook its
annual programme of visits to control functions. Constructive
and insightful discussions were held with members of
management from the Risk, Internal Audit and Finance teams.
Performance evaluations
In 2021 the annual review of the effectiveness of the Board
and its senior Committees, including the GAC, was conducted
externally by Independent Board Evaluation. It was determined
that the GAC had continued to operate effectively during 2021,
Financial and non-financial reporting
The GAC considered a number of accounting judgments and reporting issues in the preparation of NatWest Group’s financial
results throughout 2021. The Committee reviewed the quarterly, interim and full year results announcements, the annual reporting
suite of documents and other principal financial and non-financial releases for recommendation to the NatWest Group plc Board for
approval. This included the disclosures required by the TCFD and the quarterly Climate, Purpose and ESG measures supplements.
Consideration was given to the controls surrounding the preparation of these releases.
Matter
Role of Committee and
context of discussion
How the Committee addressed the matter
Expected
credit losses
To review and challenge
management’s judgements
in relation to credit
impairments and the
underlying assumptions,
methodologies and models
applied, and any post-model
adjustments required. To
also consider the impact of
macro-economic risks on
the credit environment.
The GAC focused on the key assumptions, methodologies and post-model
adjustments applied to provisions under IFRS 9. The continued economic
uncertainty during 2021 and the dislocation between the economics and
the credit impacts observed, led management to adopt a measured
approach to the release of IFRS 9 provisions in the year. In evaluating
management’s proposal to release £1.3 billion, the Committee considered
the previously implemented enhancements to the internal models and
the improvements in the economic environment during 2021. Industry
benchmarking data, particularly in the first half of the year, was also
helpful to the Committee and informed its considerations. The Committee
recognises that post-model adjustments should be limited to considerations
beyond model capability and so sought from management confirmation
of the criteria which would need to be satisfied to enable their release.
The Committee will continue to scrutinise the application of post-model
adjustments in 2022.
Treatment
of goodwill
To consider the treatment
of goodwill throughout
the year and ensure
the carrying value was
appropriate and suitable
disclosures were made.
Management did not identify any reason to undertake an out of
cycle reassessment of goodwill during 2021. Following discussion and
challenge, the Committee was satisfied that goodwill remained recoverable
throughout the year, and that appropriate disclosures were included in the
quarterly and interim financial releases. The Committee considered and
supported management’s proposed write down of £85 million of goodwill in
RBS (and at higher levels) on the basis of materiality at the end of the year.
Valuation
methodologies
To consider valuation
methodologies, assumptions
and judgments made
by management.
The GAC considered valuation methodologies and assumptions for
financial instruments carried at fair value and scrutinised judgments made
by management.
meeting its statutory duties. The outcomes of the evaluation
were considered by the Committee and subsequently reported
to the Board. The Committee will support management’s
consideration of the recommendation to review the leadership
structure of the Finance function, and this was discussed with
the Group CFO in the context of talent development and
longer term planning for the function. The Committee also
welcomed the recommendation to improve the diversity of
the Committee membership, and this will be reviewed by the
Nominations and Governance Committee as part of its ongoing
business. The depth of financial expertise of the Committee
was also recognised via the evaluation. The Committee is
satisfied it fulfilled its terms of reference in 2021.
The Committee continued to monitor the performance of the
external auditor and the Internal Audit function in 2021. Formal
assessments were undertaken at the end of the year via an
internal process and the Committee reviewed summaries of
the feedback provided by relevant stakeholders. Progress
made to address the recommendations of the previous
year’s evaluations was welcomed.
117NatWest Group 2021 Annual Report and Accounts
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Report of the Group Audit Committee continued
Matter
Role of Committee and
context of discussion
How the Committee addressed the matter
Provisions and
disclosures
To consider the level of
provisions for regulatory,
litigation and conduct issues
throughout the year.
The Committee reviewed the levels of provisions during the year for
regulatory, litigation and conduct matters, and was satisfied these were
appropriate. The timing of certain litigation provisions was discussed with
management and the external auditor, and the Committee concluded
that it was only appropriate to record a provision once there was reliable
estimate as to the quantum. The Committee welcomed the conclusion of
a number of historic conduct and litigation matters during the year.
Viability statement
and the going
concern basis
of accounting
To review NatWest
Group’s going concern
and viability statements.
The GAC considered evidence of NatWest Group’s capital, liquidity and
funding position and considered the process to support the assessment
of principal risks. The GAC reviewed the company’s prospects in light of
its current position, the identified principal and emerging risks (including
climate risk) and the ongoing economic uncertainty resulting from the
pandemic. FRC guidance and reviews of peer disclosures were considered
as part of the preparation of the viability statement for NatWest Group.
The Committee recommended both the going concern assessment and
viability statement to the Board. (Refer to the Report of the directors for
further information.)
Fair, balanced and
understandable
To oversee the review
process which supports
the Committee and Board
in concluding that the
disclosures in the Annual
Report and Accounts and
other elements of the
year-end reporting suite
of documents, taken as a
whole, are fair, balanced
and understandable and
provide the information
necessary for shareholders
to assess the company’s
position and performance,
business model and strategy.
The Committee oversaw the review process for the year-end disclosures
which included: central coordination and oversight of the Annual Report
and Accounts and other disclosures led by the Finance function; review
of the documents by the Executive Disclosure Committee prior to
consideration by the GAC; and a management certification process of the
year-end reporting suite. The Committee considered whether the annual,
interim and quarterly disclosures met the UK Corporate Governance Code
requirements to be ‘fair, balanced and understandable’. It concluded each
time that the releases satisfied the necessary criteria. The external auditor
also considered the fair, balanced and understandable statement as part
of the year-end processes and supported NatWest Group’s position.
Non-financial
reporting
To review the principal
non-financial disclosures
made by NatWest Group
and to ensure appropriate
controls are in place to
support the preparation
of the information. These
disclosures include the
annual Climate-related
Disclosures Report and the
Climate, Purpose and ESG
measures supplement
published each quarter.
As NatWest Group’s non-financial reporting has continued to evolve
in 2021, the Committee has remained focused on ensuring robust
and appropriate controls supported the preparation of the disclosures,
which aligned with the existing measures in place in relation to financial
disclosures. The Committee discussed the merits of publishing this
information separately or as part of the interim and full-year results
announcements, and concluded that releasing separate documents
would be most useful for external stakeholders accessing the information.
Industry best-practice and the output of peer reviews were considered
to ensure NatWest Group is disclosing an appropriate and useful level
of information, and this will continue to be reviewed going forward. The
Committee considered the outcome of the reviews of the documents
by management via the Executive Disclosure Committee and its sub-
committee which focuses specifically on ESG disclosures. The Committee
welcomed the extension of the risk and control assessments and the
addition assurance work being undertaken by the external auditor.
The Committee was satisfied that appropriate steps had been taken
by management to limit the legal liability arising from the disclosure of
such non-financial information. It received advice from NatWest Group
Reputational Risk Committee as to the risk of reputational impacts in the
event of a misstatement or future change in methodology which could
give rise to suggestions of ‘greenwashing’.
118 NatWest Group 2021 Annual Report and Accounts

Systems of internal control
Systems of internal control relating to financial management, reporting and accounting issues is a key area of focus for the
Committee. In 2021 it received reports throughout the year on the topic and evaluated the effectiveness of NatWest Group’s
internal control systems, including any significant failings or weaknesses.
Matter
Role of Committee and
context of discussion
How the Committee addressed the matter
Sarbanes-Oxley Act
of 2002
To consider NatWest
Group’s compliance with the
requirements of section 404
of the Sarbanes-Oxley Act
of 2002.
The Committee received interim updates on the status of the bank’s
internal controls over financial reporting throughout 2021 enabling it to
monitor progress and support management’s conclusion at the year-end
that there were no Material Weaknesses for NatWest Group. Two
Significant Deficiencies were addressed by management during the year.
The Committee monitored progress and supported management’s
approach which allowed the matters to be downgraded prior to the
end of the year.
The Committee also reviewed the process undertaken to support the
Group CEO and Group CFO in providing the certifications required
under sections 302, 404 and 906 of the Sarbanes-Oxley Act of 2002.
Regulatory and
financial returns
To review the controls and
procedures established by
management of NatWest
Group for compliance with
regulatory and financial
reporting requirements.
In December 2019 the PRA announced an industry-wide review of
regulatory returns via means of a skilled persons report. In 2020, the
Committee approved the appointment of EY as the skilled person to
undertake the review for NatWest Group, given the external auditor’s
extensive knowledge of our internal systems and processes. The
Committee received regular updates on the review and while the skilled
person raised a number of findings, there were none which indicated
material errors with the regulatory returns. The Committee encouraged
management to work collaboratively across the bank to ensure the
necessary regulatory deadlines were met while ensuring business as
usual work continued to be delivered. Three industry-wide themes were
identified by the skilled person reviews: governance and ownership;
controls; and data and investment. The Committee reviewed the formal
remediation plans submitted to the PRA in response to the industry-wide
findings and those specific to NatWest Group. It received assurances from
management that appropriate resource was available to execute the plans
and that the timescales were manageable. On this basis it approved the
plans. The ongoing work to further strengthen the controls surrounding
the preparation of regulatory returns has also been closely monitored and
supported by the Committee throughout 2021; this will continue in 2022.
Control
Environment
Certification
To consider the control
environment ratings of the
businesses, functions and
material subsidiaries and
management’s actions to
ensure that the control
environment is maintained
or strengthened.
Management provided bi-annual reports on the Control Environment
Certification, which were supplemented by the views of the second and
third lines of defence. Changes in ratings during the year by certain
businesses and functions were noted and supported by the Committee.
Return to appetite plans have been developed by management for
all major areas which was welcomed by the Committee. The most
significant plans are regularly reviewed and challenged by the
relevant Board Committee.
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Matter
Role of Committee and
context of discussion
How the Committee addressed the matter
Notifiable
event process
To monitor control breaches
captured by the internal
notifiable event process.
The Committee received bi-annual updates on the volumes and nature of
the most significant control breaches escalated via the internal notifiable
event process and any common themes. Process-related issues accounted
for the majority of the most significant events in 2021, and the Committee
noted the high level of manual elements to processes across the bank.
It requested management report on how greater automation could be
implemented to NatWest Group’s key processes and systems. The work
launched by the Chief Transformation Officer in this respect in relation to
Customer Journeys was welcomed and will be monitored going forward.
Where process issues had not been the cause of control breaches the
Committee encouraged management to ensure the root causes of these
issues are remediated. The outcome of an internal review of the process to
ensure it was operating as expected was also presented to the Committee.
All Board directors were alerted to the most significant breaches
throughout the year.
Whistleblowing To monitor the effectiveness
of the bank’s whistleblowing
policies and procedures.
The Committee chairman
is also the whistleblowers’
champion for
NatWest Group.
The GAC monitored the effectiveness of the bank’s whistleblowing process
and received updates on the volume of whistleblowing reports and any
common themes. The results of the annual Our View survey indicated that
colleagues’ awareness of how to raise concerns was high and that the
majority of respondents reported they felt safe to do so and that concerns
raised would be handled appropriately. The Committee considered the
output of Internal Audit’s annual review of the whistleblowing process,
and welcomed the largely positive results.
The GAC Chairman acts as NatWest Group’s Whistleblowers’ Champion,
in line with PRA and FCA regulations, and meets regularly with the
whistleblowing team. Whistleblowing is also discussed regularly with the
chairs of the principal subsidiary audit committees to ensure a common
and coordinated approach across the bank, and the Board is updated on
these and the GAC’s discussions as appropriate.
Legal and
regulatory reports
To note material legal
investigations (current and
emerging) and any impacts
on financial reporting; and to
monitor the bank’s
relationship with relevant
regulatory bodies including
the FCA and PRA.
Quarterly reports were presented to the Committee setting out updates on
new and existing major investigations and litigation cases. The Committee
considered provision levels and the impact on each quarterly financial
results disclosure and was satisfied in both respects. The Committee also
received updates on ongoing regulatory investigations, current and future
areas of regulatory focus and the nature of the relationships with the
primary regulators.
Other standards
of control
In addition, the Committee
receives regular updates on
matters pertinent to NatWest
Group’s standards of
internal control.
The Committee received an update on the bank’s tax position and
discussed matters including tax disclosures and provisions, NatWest
Group’s tax compliance status, the relationship with HMRC, the UK bank
levy and emerging and forthcoming tax issues (including the likely post-
COVID-19 tax environment and the impact on the OECD Pillar 2 rules
on NatWest Group).
The GAC reviewed the disclosure on internal control matters in conjunction
with the related guidance from the Financial Reporting Council.
Report of the Group Audit Committee continued
120 NatWest Group 2021 Annual Report and Accounts

Internal Audit
The GAC is responsible for overseeing the Internal Audit function, monitoring its effectiveness and independence.
Matter
Role of Committee and
context of discussion
How the Committee addressed the matter
Quarterly opinions To consider periodic
opinion reports prepared
by Internal Audit on the
overall effectiveness
of the governance, risk
management and internal
control framework, current
issues and the adequacy of
remediation activity.
Quarterly opinion reports were provided to the Committee by Internal
Audit, setting out its view of the overall effectiveness of NatWest Group’s
governance, risk management and internal control framework, current
issues and the adequacy of remediation activity. Internal Audit also
outlined material and emerging concerns identified through their audit
work. Over the course of the year Internal Audit reported a gradual
improvement in the bank’s control environment as the wider economic
recovery from the COVID-19 pandemic continued. The Committee
welcomed Internal Audit’s views on major programmes being undertaken
by the bank such as the remediation of financial crime matters, the
implementation of the Enterprise Wide Risk Management Framework and
delivery of the One Bank transformation programme. The importance of
increasing automation across the bank’s processes was also evident in
Internal Audit’s reports, and this was explored further by the Committee,
as noted above.
Annual plan
and budget
To approve Internal Audit’s
annual plan and budget
prior to the start of each
year as well as any
significant changes
required during the year.
The Committee considered and approved Internal Audit’s 2021 plan and
budget at the end of 2020. Following the appointment of a new Chief Audit
Executive (CAE) certain refinements to the focus of the plan were made
and these were discussed with the Committee throughout 2021. The
Committee encouraged the function to increase its focus on validating
the closure of prior findings by management. The Committee approved
an increase to Internal Audit’s budget for 2021 to support recruitment
to ensure there were appropriate resources available to deliver the plan.
In December 2021, the Committee approved Internal Audit’s 2022 plan
and budget.
Internal Audit
Charter and
independence
To approve the Internal
Audit Charter each year and
reviews the independence of
the CAE and function as
a whole.
The GAC reviewed and approved the Internal Audit Charter which was
consistent with prior years. The Committee noted the Independence
Statement and confirmed the independence of Internal Audit. In line with
the revised industry guidance issued in September 2017 and in order to
maintain the independence and perceived independence of both the role of
CAE and the wider Internal Audit function, a new CAE was appointed in
2020 and joined NatWest Group in February 2021.
Performance/
evaluation
To monitor and review,
at least annually, the
effectiveness of
Internal Audit.
In line with prior practice and industry guidance, the CAE continued to
report to the GAC Chairman in 2021, with a secondary reporting line to
the Group CEO for administrative purposes. The GAC assessed the annual
performance (including risk performance) of the function and CAE.
The 2021 evaluation of the Internal Audit function was carried out
internally. Key stakeholders across the bank, including the GAC members,
attendees and the external auditors provided feedback, identifying areas
of particular strength and those for enhancement. The overall findings
were positive, and the Internal Audit function was found to be operating
effectively with continued improvement in most areas being noted. Certain
areas for continued development were identified, including: the greater use
of integrated audits, increased use of digital tools, and building bench-
strength. Progress will be overseen by the GAC in 2022.
Visit To undertake an annual
deep dive session with
members of the Internal
Audit leadership team.
In conjunction with the BRC, the GAC participated in a successful deep
dive session with members of the Internal Audit team in 2021. A variety of
issues impacting the Internal Audit function were discussed, including
succession planning and bench-strength of the function and its recent
work to fully implement integrated audits and extend its use of data
analytics. The Committee was very encouraged by the innovative
approach being taken in these areas and the clear benefits to both
the function and the wider business.
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Report of the Group Audit Committee continued
External audit
The GAC has responsibility for monitoring the independence and objectivity of the external auditor, the effectiveness of the audit
process and for reviewing the bank’s financial relationship with the external auditor and fixing its remuneration. Ernst & Young LLP
(EY) has been NatWest Group’s external auditor since 2016, following a tender process carried out in 2014.
Matter
Role of Committee and
context of discussion
How the Committee addressed the matter
External
audit reports
To review reports prepared
by the external auditor in
relation to NatWest Group’s
financial results and
control environment.
The Committee received quarterly reports on the audit-related work
and conclusions of the external auditor. The reports included EY’s view
of the judgments made by management, compliance with international
financial reporting standards and the external auditor’s observations and
assessment of effectiveness of internal controls over financial reporting.
The GAC also received helpful benchmarking information from EY during
the course of the year and in particular relating to the accounting
treatment of the impacts of the COVID-19 pandemic. The Committee
received all communications from EY required by UK auditing standards,
SEC and NYSE rules, including 2021 audit quality and transparency
reports.
Audit plan and fees To consider the scope and
planning of the external
auditor in relation to the
audit of NatWest Group.
It is also authorised by the
shareholders to fix the
remuneration of the
external auditor.
The GAC reviewed EY’s 2021 plan. It welcomed the external auditor’s
intention to make greater use of digital tools in its work. In line with the
authority granted to the Committee by shareholders at the 2021 Annual
General Meeting (AGM) to fix the remuneration of the external auditor,
the GAC approved the audit fees for the year including the fee for the 2021
interim results. The Committee received confirmation from the external
auditor that the fees were appropriate to enable delivery of the required
procedures to a high quality.
Annual evaluation To review and monitor
the external auditor’s
independence and objectivity
and the effectiveness of the
audit process, taking into
consideration all relevant
professional and
regulatory requirements.
In 2021 an internal evaluation was carried out on behalf of the Committee
to assess the independence and objectivity of the external auditor and the
effectiveness of the audit process. The GAC members, attendees, finance
directors of customer businesses and functions, and key members of the
Finance team were consulted as part of the evaluation. The process
assessed the external auditor’s independence, engagement, provision of
robust challenge, bench-strength and reporting. The evaluation concluded
that the external auditor was operating effectively and with objectivity.
Respondents reported improvements in relation to the quality of
engagement and challenge in 2021, as well as enhancements in certain
aspects of the audit team’s bench-strength. Some suggested areas for
consideration to further strengthen effectiveness included: refining written
reports provided to senior Committees, exploring opportunities to leverage
the work undertaken by other teams within EY and Internal Audit, and to
continue to share its valuable insights on the emerging area of reporting on
climate metrics. Following the evaluation, the GAC recommended that the
Board seek the reappointment of EY as external auditor at the next AGM.
The Committee noted the positive results of the audit quality reviews of
EY’s 2020 audit by the FRC and PCAOB during 2021.
Audit partner To oversee the lead audit
partner and resolution of
any points of disagreement
with management.
In February 2021 Micha Missakian succeeded Jonathan Bourne as EY’s
lead audit partner for NatWest Group, following the conclusion of Mr
Bourne’s five year term in role. Mr Missakian attended all meetings of the
Committee in 2021. The Committee members met in private session with
Mr Missakian twice during the year to ensure the external auditor had
an opportunity to raise any points of disagreement with management.
No such points were raised by the external auditor in 2021.
122 NatWest Group 2021 Annual Report and Accounts

Matter
Role of Committee and
context of discussion
How the Committee addressed the matter
Additional reports
prepared by the
external auditor
To review reports prepared
by the external auditor in
relation to NatWest Group.
During 2021 various additional reports prepared by the external auditor
were considered by the Committee. These included the results of the
external auditor’s assurance procedures on compliance with the FCA’s
Client Asset Rules for NatWest Group’s regulated legal entities for the year
ended 31 December 2021. The Committee also received the outcome of
EY’s written auditor report to the PRA under supervisory statement SS1/16
for the year ended 31 December 2021, noting that the matters identified
were already being addressed by management. The Committee Chairman
also contributed to a review of the process and its efficacy by the PRA.
Non-audit services To review and approve,
at least annually, NatWest
Group’s policy in relation
to the engagement of the
external auditors to perform
audit and non-audit services
(the policy). All audit and
non-audit services are
approved by, or on behalf of,
the Committee to safeguard
the external auditor’s
independence
and objectivity.
The GAC reviewed and approved NatWest Group’s non-audit services
policy in 2021. Under the policy, audit-related services and permitted
non-audit service engagements may be approved by the Group CFO up to
certain financial thresholds. Engagements in excess of these limits require
the approval of the GAC chairman. Where the fee for a non-audit service
engagement is expected to exceed £100,000, a competitive tender process
must be held; where the fee is anticipated to be £250,000 or more approval
of all GAC members is required. The policy permits the external auditor to
undertake engagements which are required by law or regulation or which
relate to the provision of comfort letters in respect of debt issuances by the
NatWest Group, provided prior approvals are in place in accordance with
the policy. The policy also allows NatWest Group to receive services from
EY which result from a customer’s banking relationship, provided prior
approvals are in place in accordance with the policy. All such approvals
are subsequently reported to the GAC.
During 2021 the Committee approved, on an ad hoc basis, three significant
non-audit engagements (where the fees exceeded £100,000) to be
undertaken by the external auditor. These related to: assurance over
selected ESG metrics; the audit of client money and assets (CASS); and the
audit of LIBOR submissions. The latter two engagements are annual audits
required under UK regulations and in prior years had been approved as
part of the consideration of the total audit fees. Given the external
auditor’s knowledge of the emerging area of climate-related disclosures
and the alignment to other year-end reporting the Committee determined
that EY were best placed to undertake this work. The audit to non-audit
fee ratio for 2021 was 18%. Further details of the non-audit services policy
can be found at natwestgroup.com. Information on fees paid in respect of
audit and non-audit services carried out by the external auditor can be
found in Note 6 to the consolidated accounts.
123NatWest Group 2021 Annual Report and Accounts
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Corporate governance continued
Dear Shareholder
I am pleased to present my second report as Chairman of
the Board Risk Committee (the Committee or BRC).
This report describes how the BRC has fulfilled its role
overseeing and advising the Board in relation to current
and potential future risk exposures and risk profile; and
in overseeing the effectiveness of risk management
frameworks. In carrying out this important role, the Committee
helps to ensure that NatWest Group is purpose-led in its
decision-making, building long-term value in the business.
More detail on the remit of the Committee can also be found
in its terms of reference which are reviewed annually and
available at natwestgroup.com.
During 2021 the committee ensured its time was prioritised to
focus on oversight of NatWest Group’s principal and emerging
risks, including improvements to the management of financial
crime risk, model risk improvements, and the risk impacts of
developments in the external environment as a result of
COVID-19. It has also maintained oversight of the continued
enhancement of the enterprise-wide risk management
framework and the development of regular risk reporting
to drive more insightful reporting to the Board.
It is expected that these will continue to be areas of focus
in 2022 as NatWest Group drives towards return to appetite
in a number of areas and further impact of COVID-19
is experienced.
Further information on key topics considered during the
year and areas of focus and challenge by the Committee
is provided on the following pages.
I would like to thank my fellow Committee members
for their continued commitment, support and challenge
throughout the year.
Morten Friis
Chairman of the Group Board Risk Committee
17 February 2022
Report of the Group
Board Risk Committee
Membership
BRC comprises four independent non-executive directors.
The details of the members and their skills and experience
are set out on pages 98 to 101.
Patrick Flynn is chairman of the Group Audit Committee
of which Robert Gillespie and I are also members. Robert is
also chairman of the Group Performance and Remuneration
Committee (RemCo) and Lena Wilson sits on this Committee.
This common membership across Committees helps to ensure
effective governance across the committees.
Regular attendees at BRC meetings include: the Group
Chairman, Group Chief Executive Officer, Group Chief
Financial Officer, Group Chief Risk Officer, Group Chief Legal
Officer and General Counsel, Group Chief Audit Executive
and the external auditor. External advice is sought by the
Committee where appropriate.
Two non-executive directors of NWH Ltd (the ring-fenced
bank) attended Committee meetings as observers in their
capacity as members of NWH Ltd’s BRC. Meetings of the
Group and NWH Ltd’s BRCs share much of a common
agenda and are generally run in parallel.
Meetings and visits
There were eight scheduled meetings of the Committee held in
2021 and one ad hoc meeting of members only was required
to discuss executive remuneration matters. The majority
of meetings were held virtually during the year due to the
pandemic but there was one in person meeting arranged
in the second half of the year when circumstances allowed.
Details of meeting attendance can be found on page 103.
Outside of formal meetings, the Committee also held an
additional meeting on financial crime and met with the Risk
Leadership Team to help build relationships and provide the
team with greater insights on the Committee’s perspectives.
Members of the Group and NWH Ltd’s BRCs also undertook
a programme of visits to the Risk, Internal Audit and Finance
functions, in conjunction with members of the Group and
NWH Ltd’s Audit Committees.
Letter from Morten Friis
Chairman of the Group Board
Risk Committee
“BRC has focused on oversight of
NatWest Group’s principal risks,
including financial crime risk
management and model risk
management, whilst also overseeing
improvements in the quality of
underlying risk management
frameworks and reporting.”
124 NatWest Group 2021 Annual Report and Accounts

Performance evaluation
Throughout the year the Committee acted in accordance with its terms of reference. The annual review of the effectiveness of the
Board and its Committees, including BRC, facilitated by Independent Board Evaluation, a specialist board evaluation consultancy.
Overall, the review concluded that the Committee operated effectively and had evolved in a positive way. Some areas for potential
enhancement were also identified which included streamlining reporting and driving action to address major issues of reputational
significant to NatWest Group. These will be areas of focus for 2022.
Key matters considered by the Committee in 2021
Matter Context of discussion How the Committee addressed the matter
Financial crime Oversight of the
management and return to
appetite of financial crime
risk, which continues to be a
top risk for NatWest Group.
Given the critical importance of the management of financial crime, the
Committee held an additional focus session in January 2021 to discuss the
detailed return to appetite plans and proposed management information
requirements to ensure the Committee was provided with appropriate
reporting to track progress throughout the year. The Committee received
quarterly updates from all three lines of defence which included updates
on progress on return to appetite plans, transformation, emerging risks
and issues, and the Skilled Person’s report findings. In addition, the
Committee considered the Money Laundering Reporting Officer’s (MLRO’s)
report, from the newly appointed MLRO, and considered the enterprise-
wide financial crime risk assessment. The CRO reported on the financial
crime risk profile and progress on remediation as part of the risk
management report at each meeting. Throughout the year, the Committee
challenged management on return to appetite slippage, adequacy of
resource and external support, and the pace of transformation and
remediation to drive improvements in financial crime to ensure we
can protect our customers.
Model risk BRC maintained close
oversight of management
activity to return to appetite
for model risk.
The Committee evaluated the appropriateness of the model risk
management framework, including required model changes, regulatory
approval thereof, and the return to appetite plan. The Committee
requested a number of additional spotlight sessions in March, July,
September and October 2021 to maintain close oversight of progress. In
intervening months, updates were given via the risk management report.
The Committee requested additional metrics to differentiate between
models where remediation and validation had been completed but
regulatory approval had not been obtained from those models where
management action was still underway and there was particular focus on
progress of IFRS9 and Internal Ratings Based (IRB) models. The Committee
held management to account in relation to return to appetite plans and
sought clarity on accountabilities. Specific consideration of the impact of
model weaknesses was considered as part of separate discussions
regarding capital distributions, ICAAPs and stress testing updates.
125NatWest Group 2021 Annual Report and Accounts
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Matter Context of discussion How the Committee addressed the matter
Enterprise Wide
Risk Management
Framework
(EWRMF)
enhancement
(including risk
appetite)
BRC monitored the
effectiveness of the risk
management framework
including further significant
enhancements to the risk
governance arrangements
of NatWest Group.
The EWRMF is NatWest Group’s primary risk management and risk
governance document providing a framework to deliver strategy in a safe
and sustainable way. A number of key enhancements to the EWRMF were
considered by BRC and recommended to Board during 2021, including: the
elevation of the EWRMF to a Board-approved framework; the assimilation
of and enhancement to the pre-existing Board-approved Risk Appetite
Framework within the EWRMF; transitioning all principal risk appetite
measures to Board approved measures; and requiring all principal risk
policies to be approved by the Committee. Further details of these changes
can be found in the Risk management section of the report on page 188.
These enhancements better align NatWest Group with peers and
regulatory expectations. The Committee considers the implementation
of the EWRMF to be of significant importance to NatWest Group’s robust
risk management and requested regular updates on the progress of the
implementation of the EWRMF via the risk management report.
The Committee oversaw the refresh of both qualitative risk appetite
statements and the quantitative risk appetite measures in line with the
enhanced EWRMF and monitored the risk profile of NatWest Group relative
to risk appetite via the risk management report. The risk appetite refresh
included the introduction of climate risk as a principal risk with associated
risk appetite statement and measures aligned to external climate
commitments and NatWest Group’s strategic ambition, acknowledging that
management of this long-term risk will continue to evolve. A more strategic
approach to reputational risk appetite was introduced and the Committee
challenged management to ensure conduct risk appetite is a key focus of
the Board, as well as more generally ensuring risk appetite triggers and
limits are appropriately set. Changes to the manner in which earnings
stability risk appetite is managed and monitored and the framework
to manage capital targets were reviewed by the Committee and
recommended for Board approval. The Committee also challenged
management to develop a more quantitative approach to risk appetite for
all non-financial risks, including conduct, compliance and operational risk
and these were introduced as part of the risk appetite refresh in December
2021. The Committee oversaw the enhancement of the approach to
ensure alignment between risk appetite measures. All of these changes
were subject to detailed review and challenge by the Committee. The
Committee received specific spotlights in respect of all principal risks
during the year.
Report of the Group Board Risk Committee continued
126 NatWest Group 2021 Annual Report and Accounts

Matter Context of discussion How the Committee addressed the matter
Risk profile
and reporting
Time was spent at every
BRC meeting reviewing
NatWest Group’s current
and future risk profile
relative to risk appetite,
with a particular focus on
COVID-19 impacts, and
scrutinising management’s
actions to monitor and
control exposures.
Risk management reports – The Committee considered detailed analysis
on NatWest Group’s risk profile, including the UK and global economic
outlook, top and emerging risks and threats, and NatWest Group’s
performance against risk appetite at each of its meetings via risk
management reports. During 2021, the format and content of the
report evolved, including integration with the Nerve Centre management
information tool which provided additional optional detail to directors.
The Committee sought a number of changes to the report to drive
more insightful reporting, including more detail on actions being taken
to mitigate top risks, implementation of EWRMF, credit risk and the
Commercial Real Estate portfolio and this work will continue into 2022.
The ongoing impact of COVID-19 on the economy, our customers and
our colleagues was a key element of discussions throughout the year,
particularly the manner in which the better than expected recovery
was managed from a risk perspective. Other key areas of focus included
financial crime and model remediation; the control environment and issues
related thereto; regulatory compliance and conduct issues; embedding
climate risk; operational and change risk; and management of the
correlation of top risks. Reports on legal and regulatory developments
and litigation risks were considered quarterly. The CRO also reported
on key matters discussed at the Executive Risk Committee.
Updates from Subsidiary Risk Committees – Quarterly reports were
received from the Chairmen of the management risk committees of
the franchises and the board-level risk committees of material regulated
subsidiaries providing an overview of issues being overseen and a channel
for escalation of issues. The Chairmen of the Board Risk Committees of
material regulated subsidiaries were invited to join meetings throughout
the year, providing updates on key areas of focus.
Capital, funding
and liquidity risk
BRC completed a detailed
review of capital, funding
and liquidity requirements
and also reviewed the
capital distribution proposals.
ICAAPs, ILAAPs and budget stress tests – The BRC considered the
budget and budget stress test as well as the ILAAP and ICAAP for NatWest
Group and recommended them to the Board for approval. It challenged
management to ensure that prior regulatory feedback had been addressed
and that Risk and Internal Audit improvement recommendations would
be incorporated in 2022 submissions. The Committee reviewed and
recommended to the Board the scenarios to be used during 2022 for the
Budget, IFRS 9, Earnings Stability, the ICAAP and the ILAAP and noted that
management would continue to use this suite of scenarios throughout
2022, in response to prior feedback from the Committee.
Capital distributions – The Committee provided detailed review of
proposals to increase capital distributions to shareholders, prior to
approval by the Board, including creation of an on-market buyback plan,
following the improved projected capital position of NatWest Group in
comparison to the initial view of impacts from COVID-19. The Committee
challenged management on the CET1% target, the manner in which
capital would be deployed over the plan, and how excess capital would
be managed.
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Matter Context of discussion How the Committee addressed the matter
Stress testing BRC reviewed in detail the
stress testing activity
undertaken by management
to identify and monitor risks
and threats and in relation
to the SST and CBES,
challenging and scrutinising
the outputs.
Stress testing capabilities – The Committee also received an update on
improvements in the stress testing capabilities and realignment of stress
testing activity and accountabilities within NatWest Group. This included
the development of enhanced scenario analysis capabilities to support
the calibration of risk appetite measures, earnings stability risk profile
and dynamic capital planning targets.
Bank of England stress tests – The BRC performed a detailed review of
the 2021 Bank of England Solvency Stress Test (SST) and the Biennial
Exploratory Stress Test, examining the impact on NatWest Group of
potential climate change scenarios (CBES) and recommended the results
of both stress tests to the Board. The Committee approved the scenarios
for these stress tests, under delegated authority from the Board, including
scenario expansion, and considered significant judgments, the impact of
model weaknesses, the results and proposed management actions. The
Committee acknowledged the limitations of the CBES in its preliminary
year and that NatWest Group will continue to develop its modelling and
data capabilities. To ensure directors had sufficient understanding of the
CBES activity in its introductory year, the Committee received a series of
supporting training video materials to help contextualise the process
and results.
Recovery plans and
the resolvability
self-assessment
BRC monitors and
challenges the development
of plans which would allow
NatWest Group to be dealt
with effectively in the event
of financial failure.
Recovery Plan – BRC performed the detailed review of the NatWest Group
Recovery Plan prior to approval by the Board. The Committee sought
confirmation from management that NatWest Group had adequate
capacity and capabilities in a recovery scenario and requested that the
dynamic nature of capital planning targets and their impact on CET1
recovery level thresholds be clarified.
Resolvability self-assessment – The Committee reviewed management’s
approach to its first Resolvability self-assessment and reviewed and
recommended the results of the self-assessment to the Board for approval.
The Committee discussed the risks to resolvability and sought comfort
on observations from Risk and Internal Audit regarding the limited
restructuring options. In advance of approval, the Board undertook
a training session on directors’ duties in Resolution.
Control
environment
BRC continued to monitor
the effectiveness of internal
controls required to
manage risk.
Control Environment Certification and oversight – The Committee
was provided with updates regarding the control environment ratings of
NatWest Group, franchises, functions, services, and legal entities. Particular
areas of focus were NatWest Markets and RBSI and the Committee sought
comfort from management on the key activities to improve ratings,
including financial crime, model risk and surveillance systems. The
Committee received regular updates on trends in the NatWest Group
Notifiable Event Process notifications and management focus on the
culture of escalating issues timeously. The Committee reviewed and
supported management’s report on the effectiveness of internal
controls required to manage risk.
Risk culture – To support the Board in its role, BRC received updates on
progress to align NatWest Group’s culture to its purpose and strategy,
which includes refreshing the approach to risk culture under the banner
‘Intelligent Risk Taking’ as a fundamental pillar within the One Bank
culture. This places emphasis on risk appetite alignment with strategic
goals, analytically supported decisions and behaviours such as openness,
challenge and raising issues early. The Committee encouraged
management to consider tolerance for failure and clarity on expectations
as the cultural behaviours were refined. It also sought clarity on how
the updated articulation of risk culture would align with other existing
employee tools and it was confirmed this has been considered.
Report of the Group Board Risk Committee continued
128 NatWest Group 2021 Annual Report and Accounts

Matter Context of discussion How the Committee addressed the matter
Financial and
strategic risks
Regular monitoring of key
risks is a pivotal part of
BRC’s role both via routine
risk reporting and via
regular focused reports.
Credit and market risk – In addition to reporting on credit and market
risk within the risk management report, BRC received separate updates
in respect of the retail and wholesale credit risk portfolios, the single
name concertation framework, commercial real estate exposures, credit
decisions made by the Executive Credit Group and traded and non-traded
market risk. These updates provided insight into the sources of the risk,
including asset quality, risk management approach and risk appetite,
controls and testing and monitoring activity undertaken. The Committee
also received specific spotlights on Commercial Banking credit risk and
stewardship and preparation for expected increased levels of problem
debt due to COVID-19 and plans established to manage this increase.
Financial risk from climate change – BRC received quarterly updates on
management plans to address the financial and non-financial risks arising
from climate change, including the inclusion of climate related risks within
the existing EWRMF and the development of new risk appetite measures
to assist monitoring of NatWest Group’s risk profile. The Committee also
received assurance from management in relation to the NatWest Group
Climate Change Programme closure activity as NatWest Group transitions
to the integration of climate-related matters into business-as-usual activity.
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Matter Context of discussion How the Committee addressed the matter
Non-financial risks BRC continued its oversight
of NatWest Group’s non-
financial risks, including
major change programmes
and strategic transformation
initiatives.
Transformation/major change programmes – BRC considered progress on
the delivery of NatWest Group’s transformation and change programme
and its position relative to risk appetite, including oversight of red rated
programmes and consideration of a new reporting style. It received
updates on key regulatory programmes, including LIBOR transition,
IRB models transformation, and GDPR readiness. BRC requested greater
visibility of how interdependencies between programmes were managed,
monitored how strategic risks were being managed and challenged
management on slippage of Objectives and Key Results, adequacy of
capabilities and budget prioritisation. The Committee also challenged
the proposed risk appetite measure which was subsequently changed.
Conduct risk and regulatory compliance risk – In addition to the review
of changes to risk appetite measures, the Committee received regular
updates on the conduct and regulatory compliance risk profile, the
elements driving the elevated conduct and compliance risk profile, both,
internally and externally, and actions being taken to return to appetite.
A spotlight on conduct and regulatory compliance highlighted the steps
being taken to embed regulatory compliance within the risk operating
model across NatWest Group. The Committee supported the Board in
overseeing management’s progress in embedding compliance with the UK
ring-fencing rules in support of the submission of its regulatory attestation.
Operational risk, resilience, and cyber security – BRC received regular
updates on NatWest Group’s operational risk profile and risk appetite, with
a particular focus on the impact of COVID-19 on operational resilience,
outsourcing and information and cyber security. The Committee
considered the bank’s preparation for compliance with the new
Operational Resilience Regulatory Policy and recommended a new list of
Important Business Services and associated impact tolerances to the Board
for approval. In addition, separate updates on information security were
reviewed and the BRC dedicated time to the consideration of cyber risk,
the external threat landscape, and the action being taken by management
in response. The Committee received confirmation that there was sufficient
investment in this area and there would continue to be focus on change
capacity and effective prioritisation. The Committee received a third-party
management dashboard to facilitate oversight of the identification
and management of third-party related risks. The Committee sought
additional clarity on the process for re-tender and management of
cloud service providers.
Data management and BCBS239 – BRC received reports on the data
management risk profile, including the risk implications of proposed data
strategy changes, required to support NatWest Group’s refreshed purpose-
led strategy. The Committee also received regular updates on compliance
with BCBS239, challenging management on its approach to assessment of
NatWest Group’s compliance status. Changes to the Risk Data Aggregation
& Reporting Framework were reviewed and approved by the Committee
under Board delegated authority.
Report of the Group Board Risk Committee continued
130 NatWest Group 2021 Annual Report and Accounts

Matter Context of discussion How the Committee addressed the matter
Accountability
and remuneration
BRC continued to provide
oversight over the risk
dimension of performance
and remuneration
arrangements, working
closely with RemCo.
Accountability – The Committee regularly considered developments in
significant material events and investigations. This included resultant
accountability review recommendations, ensuring appropriateness of
the recommendations from a risk perspective.
Remuneration – The risk and control goals and associated long term
incentive performance measures of the NatWest Group Executive
Committee (ExCo) were reviewed, with additional focus on underlying
objectives for the Group Chief Risk Officer. In addition, the Committee
reviewed the risk management performance and long term incentive
performance conditions, pre-grant and pre-vest assessments for ExCo,
ensuring fair reflection of risk management performance in award and
vesting outcomes. More generally, the Committee considered and
recommended to RemCo adjustments to NatWest Group’s bonus
calculation, to reflect NatWest Group’s risk management performance.
Remuneration policy – Proposals for the 2022 Executive Director
Remuneration Policy were considered by the Committee and
recommended to RemCo from a risk management perspective.
The Committee also reviewed relevant changes to the Material
Risk Taker identification process.
Further detail on how risk is considered in remuneration decisions can
be found in the Report of the RemCo on page 136.
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Corporate governance continued
Report of the Group
Sustainable Banking Committee
Dear Shareholder,
I am pleased to present my fourth report as Chairman of the
Group Sustainable Banking Committee (the Committee or SBC).
The journey towards being purpose-led
As the Group continues its journey towards being purpose-led,
the Committee has played an important oversight role. On
behalf of the Board, we have focused our efforts on NatWest
Group’s progress against our purposeful commitments
and ambitions.
In response to feedback arising from the 2021 performance
evaluation, it was agreed that the Committee should enhance
its focus on customer service and experience. This is now
reflected in our terms of reference and refreshed sustainable
banking pillars – Climate; Customers; Enterprise; People &
Culture; and Conduct & Ethics.
2021 Highlights
We held several spotlight sessions throughout the year,
covering our five SBC pillar topics. Committee members
challenged the actions taken by management to run the bank
as a sustainable business and sought the views of internal and
external stakeholders wherever possible. Meeting time is
prioritised towards meaningful debate and discussion.
Below are the key discussion points and outcomes for 2021.
Climate
At its annual climate spotlight session, the Committee
discussed external developments relating to climate and their
potential impact on NatWest Group, including key messages
emerging from an NGO roundtable and an update on COP26
preparations. The Committee also considered a detailed
update on progress against NatWest Group’s climate-related
goals and targets.
A franchise-led session on climate-related returns and
opportunities included deep dives on clean buildings and
voluntary carbon markets. Updates were also considered on
climate measurement and reporting; managing the financial
and non-financial risks arising from climate change; how
“The Committee has continued to
oversee the embedding of purpose
across NatWest Group, with enhanced
focus on customer service and
experience.”
NatWest Group was reducing its own carbon footprint;
and investor insights. Later in the year, the Committee
also received a deep dive session on NatWest Group’s first
carbon budget in the context of our carbon emission reduction
commitments. A key outcome was to challenge management
on climate transition activity, specifically to maintain a
opportunistic perspective and to consider the sustainable
business model and performance impacts of exiting climate
sectors as part of climate budgeting activity.
Discussion and questions focused on accelerating the transition
to net zero for customers in their daily lives and for businesses,
including creating new products, services, and sustainable
funding and financing. The Committee was impressed by the
excellent levels of collaboration demonstrated across NatWest
Group and noted the benefits of effective partnerships with
third parties on climate-related initiatives. There was debate
on how NatWest Group maintains a leadership position while
promoting industry-wide progress, and on fostering meaningful
partnerships. A key management action was to report back
on which ESG surveys and NGO reports were most valued
by NatWest Group’s influential investors, to direct
appropriate resources.
The discussion continued to build Board level knowledge on
the financial risks from climate change. The discussion should
influence future proposition and strategy design, particularly
around how NatWest Group helps customers to transition, the
approach to investor relations and future climate budgeting.
Customers (including enterprise)
The Committee received an update on customer service and
experience, focused on three key customer segments: Under
30s, Affluent, and Small and Medium-sized Enterprises (SMEs).
Franchise CEOs and their teams presented on the range of
measures which had been introduced to support customers
and communities because of the pandemic.
Discussion and questions focused on the impact of the
pandemic on customers’ needs for products and services.
Areas of debate included the steps being taken within each
segment to enhance customer service and experience, as
well as peer comparisons and broader industry trends.
An external speaker connected to a youth charity joined to
help us understand how young people had been hardest hit
by the economic crisis arising from the pandemic.
A key outcome was a greater understanding of how youth
opinions and expectations of banks had evolved as a result
of the pandemic, allowing both management and the Board
directors present to better consider the opportunities and
needs relating to this important customer segment during
future strategy design.
People & Culture
Reflecting an enhanced level of focus on culture at Board level,
the Committee’s People & Culture meeting concentrated on
the cultural change involved in building a purpose-led bank.
The meeting began with a ‘Living our purpose’ spotlight
session covering some of the diversity, equity and inclusion
Letter from Mike Rogers
Chairman of the Group Sustainable
Banking Committee
132 NatWest Group 2021 Annual Report and Accounts

initiatives which focused on community learning and social
mobility. We were joined by two guest speakers – one of
NatWest Group’s apprentices who joined the bank from
school, and charity partner of CareerSense (NatWest Group’s
employability programme which aims to support 13 to 24 year
olds to have the skills, knowledge and experience to take
control of their future) – who helped us understand how
these programmes are changing the lives of young people.
The Committee also discussed the results of the latest Our
View survey where employees respond to questions covering
wellbeing, purpose, building capability and leadership. Linked
to this was an update from Internal Audit on their Behavioural
Risk reviews, where team sub-cultures are assessed using
behavioural science for indicators of potential future
conduct issues.
Key areas of discussion and challenge were the need to
coordinate and potentially simplify the range of diversity,
equity and inclusion policies and practices, culture measurement
reporting improvements and assurance of management action
to address behavioural sub-culture findings.
A key outcome and example of constructive, Board level
challenge was the request for a further deep dive on the
branch culture findings, where the Committee felt more detail
and understanding was needed about behaviours, products
and practices involved, and the improvements planned for.
Conduct & Ethics
Following discussion at the People & Culture session, the
Committee received a deep dive presentation on branch
culture which focused on safe sales practices, the ongoing
branch transformation activity and culture improvement
plans which focus on customer feedback rather than product
targets. The report and presentation were well received
and demonstrated a robust management response to the
issues raised.
Spotlight sessions on customer trust, fraud and human rights
were also presented, followed by a group discussion with
external insights from a guest speaker who challenged
NatWest Group’s approach and shared practical suggestions
based on experience of leading on human rights activity for
a global consumer goods company.
Discussion and challenge focused on the social dimension of
the ESG agenda; an area in which interest and expectations
are increasing. The Committee listened to customer calls
about romance and cryptocurrency scams which prompted
discussion about some of the conduct and ethical dilemmas
NatWest Group and the wider industry are facing around
customer behaviour and responsibility.
A specific conduct-related action was for management to
provide data on colleague abuse and related support, given
the worrying trend seen in service industries generally.
Supporting long-term value creation
Given its purpose responsibilities, the Committee continues
to receive a purpose dashboard providing a useful snapshot
of NatWest Group’s progress against key purpose targets
and metrics.
The Committee also considered and provided advice to
the Group Performance and Remuneration Committee
on customer, strategy, people and culture targets and
performance, advocating for sustainable targets with
the incentive framework.
Committee members enjoyed meeting potential executive-level
successors in July 2021, when we explored with top talent how
NatWest Group can continue to support, build relationships,
and grow within the communities NatWest Group serves.
Membership, meetings and escalation
There were no changes to the Committee’s membership
during 2021. Membership of the SBC continues to comprise
three non-executive directors as members, with two non-
executive directors from NatWest Group’s ring-fenced bank
board observing, along with management attendees. More
details of membership and attendance for the SBC can be
found in the Corporate governance report.
The Committee’s operating rhythm, including the number
of scheduled meetings held in the year and escalation
mechanisms, has not changed since last year’s report. Two
ad hoc meetings were scheduled to accommodate executive
remuneration policy matters. Authority is delegated to the SBC
by the Board and a regular report of the Committee’s activities
is provided to the Board. The Committee’s terms of reference
are available at natwestgroup.com and these are reviewed
annually and approved by the Board.
Performance evaluation
The annual review of the effectiveness of the Board and its
senior Committees was conducted externally in 2021. The
report on the SBC was a positive one. I was pleased to read
that the agendas feel well-purposed and my fellow directors
enjoy the range of presentations and insights as much as I do.
We discussed recommendations relating to driving harder to
action and effecting change in the areas within our remit,
noting the successes and limitations of our current meeting
structure and schedule.
We agreed to maintain a keener eye on management actions
going forward which should support enhanced management
accountability. I would also like to continue to see customer
experience and service remain at the heart of each of
our sessions.
Areas of focus for 2022 will follow this year’s structure with
the same dedicated meeting themes. The structure will retain
some flexibility to allow us to respond to any emerging issues
within the Committee’s remit should something significant
arise. Challenging views and a diverse range of insights
will continue to be sought to support the 2022 meetings.
The Committee operated within its Terms of Reference during
the year.
Conclusion
As I envisaged in last year’s report, the Committee has
continued to oversee Purpose progress across the Group
during what has been a critical time of embedding, with
enhanced focus on customer service and experience.
We have continued to benefit from a broad range of internal
and external stakeholder perspectives, and our discussions
have been all the richer for it.
I would like to take this opportunity to thank everyone who has
contributed to the Committee’s activities during 2021, including
my fellow directors, attendees, and presenters, for their
commitment and dedication.
Mike Rogers
Chairman of the Group Sustainable Banking Committee
17 February 2022
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Corporate governance continued
Report of the Technology and
Innovation Committee
Dear Shareholder,
I am delighted to present my second report as Chairman of the
Technology and Innovation Committee (the Committee or TIC).
Role and responsibilities
TIC is responsible for supporting the Board by overseeing,
monitoring, and challenging the actions being taken by
management in relation to technology and innovation.
In doing so, the Committee also gives due consideration
to NatWest Group’s purpose.
Authority is delegated to TIC by the Board and a regular report
of the Committee’s activities is provided to the Board. The terms
of reference are available at natwestgroup.com. These are
reviewed annually and approved by the Board.
Principal activity during 2021
During 2021, the Committee has played an important role in
helping to support and challenge management plans to use
technology and innovation as part of its journey to become
a relationship bank for a digital world. TIC focused on the
principal themes of digitising the core, future ready, innovation,
partnerships and ventures, and emerging threats and
opportunities. As agreed, as part of the 2020 Committee
evaluation, it deliberately focused on a smaller number of deep
dives into specific aspects of each theme, including competitor
position and link to purpose. Key highlights included:
Digitising the core
The Committee received a number of spotlight sessions on
the development of existing technology, architecture, and
processes to enhance customer experience and maintain
the health and resilience of IT systems.
The Committee considered management programmes
designed to automate pioneer customer journeys, including
Account Opening and Pay a Bill or Person, which impact 70 to
80% of customer interactions and the majority of the customer
base. The Committee considered how the activity would
improve customer experience, reduce cost, and utilise One
Bank capabilities to drive a consistent approach. Committee
discussions focused on digitising the front to back architecture;
the use of digital journeys in branch and telephony channels;
the benefits from immediate decisioning; and from simplifying
the product offering and supporting processes and technology.
“The Committee has played an
important role in helping to support
and challenge management plans to
use technology and innovation as part
of its journey to become a relationship
bank for a digital world.”
The Committee also discussed how predictive analytics, including
machine learning, was being used within the Retail and Private
Banking businesses, primarily to assist with identification of
potential customer needs and plans to extend the use of such
techniques to the Commercial Banking business.
TIC also considered how Open Finance was changing
the sector and the changes required to core systems and
architecture. The Committee noted the increased use of
Application Programming Interfaces (APIs) to improve the
NatWest Group’s internal architecture, maximise re-use of
assets and to improve customer experience. In addition, the
external consumption and monetisation of bank produced
APIs in conjunction with partners was also considered. The
Committee discussed potential opportunities presented by the
development of FreeAgent (integrated lending for NatWest
Group customers based on cashflow forecast), Payit (Open
Banking payments offering), and data sharing to support
new SME customers onboarding.
The Committee received an update regarding changes in
the use of technology by the Risk function. TIC discussed
technology and data transformation underway, including
the use of robotic process automation and workflow tools;
movement of risk engines to a cloud-based solution; data
transformation; and use of ‘Software as A Service’ applications
for solutions. The Committee discussed and challenged how
proposed changes to the logical data architecture could
improve regulatory reporting and noted that approach
reduced complexity via data consolidation and assigning
end to end ownership for such data.
The update on the use of technology and innovation as part
of NatWest Group’s security and cyber defences, included the
evolution of the threats faced by NatWest Group; the strength
of NatWest Group’s defences against such attacks to date; and
the continuous innovation approach being implemented. Mr
James Lyne, Head of Research and Development at the SANS
Institute and member of NatWest Group’s Technology Advisory
Board provided an external perspective on how NatWest
Group compared to competitors and challenges being
faced by the industry.
Future ready
The Committee considered a number of actions being taken
within the organisation to transform data and technology
capabilities and deploy forward-looking technology.
Letter from Yasmin Jetha
Chairman of the Technology and
Innovation Committee
134 NatWest Group 2021 Annual Report and Accounts

TIC received an update on how new technology was
empowering colleagues to adapt to a digital future by
providing modern software, such as Workday, which had seen
high adoption rates. Implementation of Ask Archie, NatWest
Group’s chatbot, and accelerated adoption of tools such as
Microsoft Office 365 and Zoom as a result of COVID-19 were
also considered. The Committee discussed and challenged the
mindset and behaviour changes needed to embrace adoption,
the technology challenges posed by legacy technology
platforms, and contention between tools which were
managed via One Bank design oversight.
The Committee discussed the manner in which potential
acquisitions would be considered from a technology and
innovation perspective. Discussion focussed on external
threats, lessons learned from prior acquisitions and
potential targets.
Innovation & partnerships and ventures
Being powered by innovations and partnerships is a key part
of NatWest Group’s strategy.
TIC considered an update on the framework and approach
to partnership working from a technology and innovation
perspective. This was supported by certain deep dives on
existing strategic relationships. TIC also discussed the
potential income threat from payments disruption and
potential opportunities to address this threat.
The Committee received updates regarding key Venture’s
initiatives, including Tyl and Rapidcash. In relation to Tyl, the
Committee noted that it extended beyond helping businesses
to receive payments by helping customers to run and grow
their business as well as giving back to the community. The
Committee discussed and challenged growth plans and how
the business was proposed to be scaled following reduced
growth, partly as a result of COVID-19. The competitive
environment, emergence of non-traditional payment providers,
and the potential to make greater use of merchant acquiring
data to help customers and drive further development was
also considered.
Regarding Rapidcash, TIC noted the transition of the business
into Commercial Banking as a market leading product with the
potential to disrupt the asset finance market by resolving issues
such as long onboarding times, links to customers’ accounting
software packages to provide ‘always on’ lending and use of
an invisible trust account to resolve customer pain points.
Emerging threats and opportunities
TIC considered the potential threats and opportunities
presented by big technology companies, including innovation
from China-based technology companies. The Committee
noted the collaborative approach taken by management
to deepen relationships beyond supplier relationships
into partnership working to solve customer needs.
The Committee discussed the evolution of digital currencies,
exploration of central bank digital currencies and growth of
tokenised assets and the potential threats and opportunities
presented. It was agreed that this would continue to
be monitored.
Membership and meetings
The Committee is comprised of three non-executive director
members, Frank Dangeard, Patrick Flynn, and me. More
details of membership and attendance at meetings can be
found on page 103 of the Corporate governance report.
The Committee is supported by management and the
Group CEO, Group CFO, Chief Administration Officer,
Chief Risk Officer, Director of Innovation, Director of Strategy
& Corporate Development and Chief Technology Officer are
all standing attendees.
External insights were also provided through the updates
provided by management.
The Committee held four scheduled meetings during 2021.
Performance evaluation
The annual review of the effectiveness of the Board and its
Committees, including TIC, was facilitated by Independent
Board Evaluation, a specialist board evaluation consultancy.
Throughout the year the Committee acted in accordance with
its terms of reference and, overall, the review concluded that
the Committee operated effectively, and had responded to
prior feedback regarding focus on a smaller number of
spotlight items.
The review suggested that, given the importance of technology
and innovation, the Committee could arrange its work in a way
that would be more accessible to all Board members. As a
result, it was agreed that appropriate agenda topics would be
opened to all Board Directors in future and that consideration
would be given to reducing the number of Committee meetings
held taking into account the sessions opened up to the full
Board in future years.
The outcomes of the evaluation have been reported to the
Board and the Committee will track progress during 2022.
Conclusion
I am delighted to chair this Committee as it continues to
support the Board in an area core to NatWest Group’s purpose
to champion potential, helping people, families, and businesses
to thrive.
Together with my fellow directors, we will retain our focus
on monitoring the future technology and innovation landscape
and its impact on NatWest Group in order to ensure continued
resilience and help NatWest Group become a relationship bank
in a digital world. The Committee will continue to shape
opportunities arising from management’s response to
both threats and opportunities that align with NatWest
Group’s purpose.
I want to take the opportunity to thank the Committee
members and attendees for their continued commitment
during 2021.
Yasmin Jetha
Chairman of the Technology and Innovation Committee
17 February 2022
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Directors’ remuneration report
Directors’
remuneration report
Dear Shareholder,
On behalf of the Board I am pleased to set out the Directors’
remuneration report for 2021. There continues to be
heightened public interest in pay, as the wider economy and
society attempts to recover from the impact of the COVID-19
pandemic. Economic conditions have improved, which has led
to an increasingly competitive external market for key talent
and skills. Many companies are having to manage higher than
usual attrition rates. Furthermore, the level of inflation in the
UK economy has increased significantly, as have forecasts of
its level in the coming year, which has given rise to heightened
expectations of general salary increases. For many individuals,
the experience of working from home has led to significant
changes in how working environments are now perceived.
As a result, we have had many important matters to
consider during the year.
As part of this report, we have set out proposals for a new
Directors’ Remuneration Policy (the Policy). Subject to approval
from shareholders, this will apply from the 2022 Annual General
Meeting (AGM), with the first awards being granted under the
new Policy in March 2023. This letter explains why we are
seeking approval for this new policy which is significantly
different from the existing policy which has been in force
since 2017. The report also details the remuneration
decisions we made under the existing Policy for 2021.
Summary of the year
NatWest Group has delivered a strong operating performance
in 2021, returning to profitability with an attributable profit of
£2,950 million. NatWest Group’s share price also saw a sharp
recovery throughout the year, increasing around 35% and
outperforming our UK peers. Our capital distribution plan has
helped return £3.8 billion to shareholders through buybacks,
both directed and on-market, and dividends. Our strong capital
position and continued capital generation mean that NatWest
Group is well placed to invest for growth, to provide the
support our customers need as the economy recovers
and to drive sustainable returns to shareholders.
We have also been acutely aware in our deliberations that
during 2021 the Financial Conduct Authority (FCA) imposed
a fine of £265 million on NatWest Bank Plc for breaches of
the Money Laundering Regulations 2007 over five years ago.
My report explains how we have taken this matter into
account in our pay decisions.
Wider workforce remuneration
The Committee has a very keen interest in wider workforce
remuneration. Our colleagues enable us to achieve our
purpose of helping people, families and businesses to thrive.
It is therefore vital they are paid fairly and in ways that
support our values and culture.
I met with the Colleague Advisory Panel (CAP) during the year
and we had a good discussion on our approach to executive
and wider workforce remuneration. We know how important
it is to have fair and transparent pay structures for all. One of
the suggestions from the CAP was to explore how our Fair Pay
Charter could receive a higher profile within the bank which
the Committee is taking forward. I also explained certain
challenges we have been facing with the current Policy for
executive directors, as described later in my letter. Further
details regarding my engagement with the CAP is set out
on page 154.
Over the year we have seen demand rise rapidly for certain skill
sets. This has put pressure on retaining talent within NatWest
Group. With the decisions we make as a Committee, we seek
to recognise these demands while meeting our commitment
to pay colleagues fairly, in line with our Fair Pay Charter.
I am pleased that the lowest level of pay for UK-based
colleagues at NatWest Group has exceeded the Living Wage
foundation benchmarks in the UK for several years. We take
a similar approach across our major hubs outside the UK. The
fixed pay investment we have made over the last few years
has typically been higher than the rate of inflation for that
period. This investment has been targeted primarily towards
our most junior and lowest paid colleagues, areas where
specialist skills are required leading to high attrition rates
and those lowest in their salary ranges.
I know from speaking to colleagues that they are concerned by
the economic conditions especially in our main hub in the UK.
Our 2022 pay discussions with our recognised trade unions
are still ongoing, but we believe the proposed salary increases,
which would provide an expected 3.6% on average across
the wider global workforce from April 2022, demonstrate a
materially improved pay position with fair outcomes for our
colleagues. For the most junior colleagues in the UK, the
minimum proposed salary increase would be £600 and the
majority of them would be in line to receive at least 4%.
Contents
136 Chairman’s introduction
140 Remuneration at a glance
143 The Directors’ Remuneration Policy
and wider workforce remuneration
158 The Annual remuneration report
175 Other remuneration disclosures
Letter from Robert Gillespie,
Chairman of the Group
Performance and
Remuneration Committee
136 NatWest Group 2021 Annual Report and Accounts

We have agreed a bonus pool of £298 million in respect of
2021 for those colleagues who are eligible to receive a bonus
award. This is 44% higher than the 2020 bonus pool, which
was significantly reduced to reflect the impact of COVID-19. It
is also 3% lower than the 2019 bonus pool, which was agreed
prior to COVID-19. We have followed a consistent process for
determining the bonus pool since 2014. When determining
the pool, we considered a balanced scorecard of strategically
important measures, including financial performance,
customer outcomes, colleague experience and risk performance.
In 2021, we included a new measure of progress against our
climate ambitions.
A material downward adjustment was applied to the 2021
bonus pool to reflect the fine imposed on NatWest Bank Plc
for breaches of the Money Laundering Regulations 2007
and ongoing financial crime remediation considerations.
This adjustment was apportioned across all business areas
to reflect the impact on the bank’s financial performance and
to reinforce to colleagues the need to ensure the effective
management of financial crime. Whilst progress has been
made in recent years on NatWest Group’s management of
financial crime, an all-colleague financial crime performance
goal has been introduced in 2022 so that it continues to receive
the appropriate focus. We have also initiated an accountability
review into the events that led to the breaches of the Money
Laundering Regulations 2007. The possible need for individual
pay adjustments to prior year awards, using the malus and
clawback provisions in the NatWest Group remuneration
construct, will be considered as part of the accountability process.
Revised remuneration policy for executive directors
The current Policy was introduced in 2017 and renewed in
2020. The Committee believes it has worked well in supporting
our culture of prudent risk taking, by introducing a significantly
restrained variable pay position for executive directors in
return for more consistent pay outcomes during a time of
significant transition for the organisation.
The Committee has been mindful that the current Policy is not
aligned to standard market practice and that some of its unique
features have been subject to challenge. Over the last year, we
have listened carefully to shareholders and other stakeholders.
We have also been mindful that the bank is nearing the end
of its long process of normalisation and the Government
continues to sell its shareholding which will result in a
normalised shareholder base. Finally, we have found the
operation of the pre-vest test more difficult than expected. We
have concluded in the light of all these factors that substantial
change to our existing Policy is required and that now is the
appropriate time for NatWest Group to transition to a more
market-standard remuneration model rather than waiting
until the next triennial vote on the Policy in 2023.
Under regulatory requirements, which have been in force for a
number of years, regulated banks may only offer variable pay
equal to 100% of fixed pay, unless shareholder approval is
obtained to increase the ratio to 200% of fixed pay. NatWest
Group did not seek shareholder approval and has operated
on a 1:1 structure. The Board is not seeking to change this
position as it believes the current construct supports our belief
in prudent risk taking and the maintenance of restrained
compensation levels. We do, however, believe that executives
should be incentivised using a structure that balances both
short-term and longer-term performance, while maintaining
our focus on prudent risk management. We are, therefore,
proposing that our current long-term incentive (LTI) construct
is replaced by a more widely accepted and competitive
construct based around annual bonus plus Restricted
Share Plan (RSP) awards.
In total, the changes set out in this report would result in
expected total compensation increasing by 19% for the CEO
and by 13% for the CFO, once the transition period is complete.
This would bring both executive directors closer to, but still
below, the average expected total compensation paid by
the other major UK banks.
We recognise that the move to a more normal construct
which involves an increase to total compensation represents a
material change and intend to make the transition to the new
Policy over two years. The phasing will mean that no more
than half of the increase will apply in year one.
The Committee is highly aware that any increase in
compensation will be closely scrutinised by shareholders. It is,
therefore, important for us to be clear on why we believe the
combination of annual bonus plus RSP represents the best
cultural and strategic fit for our organisation and why the
proposed opportunities under each element are appropriate.
By introducing a market-aligned annual bonus mechanism we
will increase the performance alignment within the package
to annual performance based on formulaic and weighted
measures and targets. This will provide greater transparency
on performance outcomes and a more direct link between pay
and the delivery of our strategic targets. The market-aligned
RSP will also ensure that we continue to retain a level of
balance within the package between annual performance
and longer-term alignment with the shareholder experience.
Delivering a remuneration package which is sufficiently
competitive both in structure and quantum to attract and
retain our senior team has been a significant consideration
in determining the proposed new arrangements. You can
find detailed information about the new Policy on pages 140
to 152 below.
The Committee has consulted widely with shareholders
and the final form of the proposals being put forward
for shareholder approval reflects much of the feedback
we have received. In my discussions with some of our
major shareholders, it has become clear that the current
management team is highly regarded and that it would be
imprudent to ignore this when setting an appropriate pay
scale. Further details of the consultation findings are set out
in this report.
The Board believes that these proposals are in the company’s
best interests as they move our remuneration policy into line
with market norms and provide a more competitive package
to our executive directors, which is a very important factor in
attracting and retaining highly talented colleagues. The Board,
therefore, recommends that shareholders vote in favour of the
new Policy.
137NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

2019 LTI award vesting outcome
Following an assessment of her performance in 2018, Ms Rose
received an LTI award over 2019, while CEO of Commercial &
Private Banking. Ms Murray was on a different remuneration
construct for the 2018 performance year and did not receive
an LTI award in 2019.
The Committee carried out a pre-vest assessment at the end
of 2021 for awards granted in 2019 which vest in 2022. This
involved considering whether anything had come to light since
grant that would change our original view of performance of
the beneficiaries of the award during the 2018 financial year.
We used a structured set of questions and evidence factors to
guide discussions. From the analysis, we agreed that customer
and risk were areas that merited further consideration.
Supported by external opinion, we concluded that although
customer performance had declined in one business area,
it was not due to factors within management’s reasonable
control. Therefore, no adjustment was made relating
to customer.
On risk performance, the pre-vest test confirmed there had
been no material deterioration in risk culture or profile over the
relevant period. However, management performance relating
to financial crime remediation over the 2018 performance year
was considered to be an area that merited further investigation
using the Risk & Control underpin.
The Group Board Risk Committee (BRC) concluded that,
while management had taken significant action to drive
delivery of the financial crime remediation programme,
there had not been a full appreciation of scale, complexity
and interdependencies of the programme at the time of the
2019 LTI grant, resulting in delays to the proposed return
to appetite.
The BRC recommended that an adjustment be considered and
as a result we applied a pre-vest reduction of 5% of Ms Rose’s
original maximum 2019 LTI award resulting in a reduction of
32,234 shares vesting. A pre-vest reduction of 5% of the
original maximum was also made to the 2019 LTI award
held by the former CEO, Ross McEwan.
The total adjustments made to their respective maximum 2019
LTI award levels, when combined with adjustments made
pre-grant, amounted to 17% for Ms Rose and 11% for Mr
McEwan. You can find full details of the pre-vest assessment
for both Ms Rose and Mr McEwan on page 159 to 160.
2019 LTI award to Alison Rose
Maximum Granted Shares to vest
Shares 644,672 568,829 536,595
Value £1.7m £1.5m £1.197m
The £1.197 million value reflects an aggregate reduction of
17% of the maximum LTI award level for Ms Rose across
pre-grant and pre-vest stages. It also reflects the fall in
the share price over the performance period.
Directors’ remuneration report continued
Executive director pay for 2021 and
salaries for 2022
Alison Rose
At the time of the last Policy renewal in 2020, we committed to
considering salary increases for Ms Rose during the life of the
Policy. No increases have been made since her appointment
in 2019. In December 2021, we noted the proposed average
salary increase for the wider global workforce and agreed
that a reduced rate of increase would be appropriate for the
executive directors. As a result, Ms Rose’s salary will increase
by 2% under the existing Policy from 1 April 2022.
In considering performance against the LTI targets for 2021,
we agreed that Ms Rose’s performance has been highly
impressive. Finance and climate performance was strong with
targets achieved and despite a marginal ‘miss’ on the ‘building
capability’ target, our people scores were good. Targets for
supporting enterprise were also met and customer performance
had improved in most areas. In terms of risk performance,
while there had been some progress, it was noted that
there was more work to do on the control environment.
External assessments of Ms Rose’s performance were
also very favourable, especially in relation to leadership on
COVID-19 schemes and COP26. Board members welcomed
Ms Rose’s frankness and transparency during the year.
Our overall assessment of Ms Rose’s performance for 2021 led
the Committee to agree that an LTI award of £1,598,000 would
be an appropriate outcome, which represents 145% of salary
and 83% of the maximum LTI award. In order to ensure parity
of treatment with the wider workforce, the LTI outcome
reflected an adjustment to mirror the downward adjustment to
the 2021 bonus pool for the fine imposed on NatWest Bank Plc
for breaches of the Money Laundering Regulations 2007 and
ongoing financial crime remediation considerations. Ms Rose’s
LTI award will be granted in March 2022.
Katie Murray
Ms Murray’s salary has remained unchanged since
her appointment to the Board in January 2019 and
the Committee agreed that an increase of 2% would be
appropriate. The increase will take effect from 1 April 2022.
In considering an LTI award for 2021, we agreed that Ms
Murray had also performed well during the year. Along with
the achievements noted against LTI targets for Ms Rose, Ms
Murray had successfully delivered the quarterly results, with
proactive investor engagement and made good progress on
refreshing the annual reporting process. Cost reduction
targets were also met for Finance and NatWest Group.
Our overall assessment of performance for 2021 led the
Committee to agree that an LTI award of £1,057,500 would be
an appropriate outcome, which represents 141% of salary and
71% of the maximum LTI award. In line with the approach
taken for Ms Rose, the LTI outcome reflected an adjustment to
mirror the downward adjustment to the 2021 bonus pool for
the fine imposed on NatWest Bank Plc for breaches of the
Money Laundering Regulations 2007 and ongoing financial
crime remediation. Ms Murray’s LTI award will be granted
in March 2022.
138 NatWest Group 2021 Annual Report and Accounts

While the performance cycle has completed, the shares
from this award will vest in tranches up to 2026. Malus and
clawback provisions help ensure that recipients maintain a
long-term focus in their decision-making and aligns with
regulatory expectations.
Approach to windfall gains
In my report last year, I highlighted that windfall gains had
become a focal point for shareholders due to share price
volatility as a result of the pandemic. When the LTI grants
were made in 2021, the share price had risen over the prior
year resulting in fewer shares being granted to satisfy a given
quantum of award. We, therefore, did not consider there were
any obvious potential windfall gains implications for award
levels that should be addressed at the time of grant. We
continue to believe that vesting, rather than at grant, is the
best time to consider any adjustments for windfall gains.
To guide our judgment, we continue to operate a framework
designed to assess whether windfall gains have arisen over the
period from grant to vest and the factors to be considered in
making any adjustments.
Gender and ethnicity pay reporting
The Committee considers gender and ethnicity pay gap
metrics to be another important indicator and full details can
be found in the Strategic report and at natwestgroup.com.
This is the fourth year that we have published ethnicity pay
gap information on a voluntary basis. We are confident that
colleagues are paid fairly and policies and processes are kept
under review to make sure this continues to be the case.
Climate in remuneration
From 2020, we have included a climate goal and related
measures in our executive director performance goals.
Climate will continue to be an integral part of the annual bonus
scorecard to be introduced under the new Policy proposals.
As mentioned above, the bonus pool agreed for the wider
workforce was also determined for 2021 having regard to
performance against strategically important measures,
including our climate ambition. This ensures that the work
of colleagues in supporting the transition to a low carbon
economy is being reflected in pay decisions.
Looking ahead
The Committee understands the expectations of shareholders,
colleagues and wider society relating to the oversight of
remuneration continue to evolve. It is also very aware that
the bank’s commitment to purpose, to equality of opportunity
and to fighting climate change must be fully reflected in
compensation outcomes for its employees in general and
its leaders in particular. I have referred to all these matters
throughout this letter and the Committee will continue to
focus on these and other emerging issues in the coming year.
The Committee is focused on ensuring the smooth transition to
the new Policy, assuming it is approved by shareholders at the
2022 AGM. Set out later in this document is the annual bonus
scorecard expected to be used in respect of 2022. We would
expect the bonus scorecard to continue to evolve to ensure
that it is incentivising progress against NatWest Group’s
purpose-led targets and wider societal needs.
We have committed to publish our climate transition plan
which will support alignment with the Paris Agreement. Future
climate targets will in turn evidence progress towards longer-
term climate objectives. We will also continue to engage with
colleagues to explain the alignment of our approaches to
executive and wider workforce remuneration and to listen
to their feedback.
This is my last report as the Chairman of the Committee
as I will have completed nine years as a director of NatWest
Group later this year. It has been a great privilege to perform
the role of Chairman of the Committee for the last five years.
I believe it is imperative for NatWest Group to be able to
motivate and retain colleagues of great ability at every level in
the firm and therefore to be able to evidence the link between
its remuneration policies, culture and purpose. I strongly
believe that the proposed changes to the Policy are an
important step in the evolution of NatWest Group to being
a purpose led organisation and hope shareholders will vote
for its approval at the forthcoming AGM.
Robert Gillespie
Chairman of the Group Performance and
Remuneration Committee
17 February 2022
139NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Delivering a restrained but fair level of pay for executive directors
Remuneration at a glance
NatWest Group CEO target variable pay
% of salary (£000 total compensation (TC) target)
8% increase
in compensation
9% increase
in compensation
50%
150%
85%
125%
200%
(TC: £4,626)
125%
43%
168%
(TC: £4,262)
140%
140%
(TC: £3,953)
Current Policy Year 1 proposed Year 2 onwards
Target variable pay (% of salary)
Bonus
RSP Major UK banks average
LTI
Major UK
bank average
226% (TC:£5,347)
NatWest Group CEO maximum variable pay
% of salary (£000 total compensation (TC) maximum)
9% increase
in compensation
Major UK
bank average
433% (TC:£7,849)
9% increase
in compensation
Bonus
RSP Major UK banks average
LTI
100%
150%
85%
125%
250%
(TC: £5,187)
125%
85%
144%
210%
(TC: £4,739)
175%
175%
(TC: £4,346)
Current Policy Year 1 proposed Year 2 onwards
Max variable pay (% of salary)
How does the new Policy ensure continued
shareholder alignment?
With the adoption of the RSP, we will replace our current
leaver terms with market aligned best practice leaver terms,
with pro-rating reintroduced in good-leaver scenarios for RSP
awards. Shareholding requirements will be increased from
400% to 500% of salary for the CEO and from 250% to 300%
of salary for the CFO and the fixed share allowance release
period will be extended from three to five years.
As is the case under the current Policy, around 67% of
expected remuneration would continue to be delivered under
the new Policy in shares, which will be subject to deferral and
retention requirements. Along with the proposed increase in
shareholding requirements, this will continue to ensure close
symmetry between executives, shareholders and the financial
health of the business.
Delivering a restrained but competitive level of pay
for executive directors which is aligned with our
cultural values
What is driving the move to a new Policy?
Under the current Policy we deliver variable pay through a
single long-term incentive arrangement, which operates in
a different way to those more commonly seen in the market,
particularly in the case of the main UK banks. The LTI-only
construct operates within a 1:1 variable to fixed pay ratio with
executive directors receiving a significantly restrained but more
predicable level of pay, thereby encouraging safe and secure
growth within appetite.
However, it has become apparent through our stakeholder
engagement process that certain shareholders continue to
have reservations with regard to the current Policy and its
unique features, in particular, the lack of formulaic, weighted
performance measures, and the removal of pro-rating. The
Committee has given considerable thought to how it should
address such feedback and, conscious that we are continuing
on a trajectory towards private ownership, believe now would
be an appropriate time to introduce a more market-aligned
annual bonus and RSP construct for executive directors.
Why are we increasing total compensation?
The Committee has also been mindful that while we have
successfully recruited highly talented executive directors under
the current Policy, our compensation levels are falling too far
behind our nearest competitors. The Board is very pleased with
the performance of the executive directors since appointment.
We believe that continuing an approach that is materially
behind our peers is imprudent and that a move towards a
more flexible remuneration structure, which delivers more
competitive levels of pay, is justified and in the best interests
of the business.
The new Policy will result in an increase to total compensation
for executive directors, with maximum variable pay set at
100% of base salary for annual bonus and 150% of base
salary for RSP awards. While this enables us to deliver more
competitive levels of pay, maximum compensation levels for
the CEO would still be the lowest compared with other major
UK banks and significantly lower than peers who continue to
operate traditional long-term incentive plan (LTIP) constructs,
demonstrating continued restraint on executive pay. The
increase in variable pay levels should also be viewed in the
context of us making further changes to the Policy which
will introduce less favourable leaver treatment, increased
shareholding requirements and longer holding periods for
the fixed share allowance.
We recognise moving to a more normal construct represents
a material change and intend to make the transition in two
phases. For the first year, maximum awards will be limited to
85% of base salary for annual bonus and 125% of salary for
the RSP. The charts opposite illustrate the transition for the
CEO from our current Policy and also show that compensation
levels will move closer to, but still below, the average maximum
and target compensation levels at the other major UK banks.
The CFO will also be below the average maximum and target
compensation levels at the other major UK banks.
140 NatWest Group 2021 Annual Report and Accounts

One of the principal areas of focus during meetings was the
transition to the new Policy including the new variable pay
structure with annual bonus and RSP awards. The Committee
Chairman explained that NatWest Group remained committed
to prudent yet competitive compensation levels that would
assess long-term performance and ensure alignment with
shareholder interests. Discussions also highlighted that
under the new Policy shareholders would expect continued
adherence to best practice and transparent remuneration
disclosures. The Committee acknowledged the need to ensure
the ongoing alignment of all aspects of the new Policy with
market best practice. A summary of the new Policy and how it
compares to the current Policy can be found on the next page,
followed by the main Policy tables which set out further details.
In addition to the above discussions, we also held three virtual
shareholder events with retail shareholders in 2021 to ensure
we heard from the wider shareholder base on matters of
importance. The event held in November 2021 focused on
climate and one of our shareholders asked how we link
executive pay to ESG measures including climate. Yasmin
Jetha, one of our directors who was present at the event,
confirmed that climate measures had been introduced for
executive directors in 2020 which assessed performance with
reference to progress towards climate positive operations, the
funding and financing of climate and sustainable finance, and
the setting of sector specific targets for emissions reduction.
Ms Jetha’s response also noted that executive director
performance had, for several years, also been assessed with
reference to social and governance measures, with diversity
and inclusion targets having been in place since 2017. Further
shareholder events are planned for 2022. Shareholders play
a vital role in helping us develop remuneration practices that
meet the needs of all our stakeholders and we are grateful for
their involvement in the process.
It is also now more important than ever that we listen to our
colleagues and use the insight we gain to attract, engage and
retain the talent we need for the future. In November 2021, the
Committee Chairman met with our Colleague Advisory Panel
to discuss executive and wider workforce pay. The outcome of
such discussion is summarised in more detail in the ‘colleague
listening strategy’ section later in this report.
NatWest Group CEO variable pay
% of salary (£000 total compensation maximum)
50% reduction
in LTIP
opportunity
Further discount
acknowledging restrained
pay position
and rebalancing
towards long term
Year 1
implementation
limited to a
lower award
Bonus
RSP
LTIP
100%
150%
85%
125%
250%
(£5,187)
210%
(£4,739)
192%
144%
336%
(£6,839)
192%
288%
480%
(£8,597)
Average for
other major UK
banks with LTIPs
Illustrative 50%
reduction
Proposed
Policy
Year 1
implementation
Max variable pay (% of salary)
With bonus expected to vest at 50% of maximum opportunity,
the combination of the RSP and bonus means that we are still
guiding towards an expected vesting level of 80% for variable
remuneration outcomes. This is aligned with the position under
our current LTI-only construct which is expected to vest at 80%
of maximum opportunity. However, in the case of the new
Policy, the expected vesting level of 80% depends on executive
directors achieving on-target performance across the annual
bonus scorecard.
How does the RSP operate in practice and does it satisfy
shareholder guidelines?
The Committee will be required to assess the performance
of executives under the RSP construct, both at the pre-grant
and pre-vest stage. The pre-grant test will measure whether
executives have achieved satisfactory performance over
the performance period prior to grant, using the existing
performance management processes that apply to all
colleagues across the bank.
RSP awards will also be subject to an underpin assessment at
pre-vest stage. The underpin assessment is designed to ensure
that sustainable performance has been achieved over the
course of the vesting period.
While RSP awards are expected to be granted and vest at
100% of maximum opportunity, the combination of the RSP
pre-grant and pre-vest tests enable the Committee to make
downward adjustments, potentially to zero, in order to guard
against payments for failure.
We know that shareholder guidelines normally expect an
appropriate discount, of at least 50%, to be applied when
introducing RSP awards compared to a traditional LTIP with
performance conditions. As our current Policy differs in a
number of ways to traditional practice and has already
delivered a more restrained pay position, with significantly
reduced maximum total compensation levels, it would not
be appropriate to apply the 50% discount to our current
LTI construct.
Recognising that the principle of a 50% discount to an LTIP
equivalent construct remains important to stakeholders, the
Committee is satisfied that the proposed move to the RSP is
aligned with the spirit of the guidelines as it delivers more than
a 50% reduction when the RSP construct is compared with
more traditional LTIP constructs envisaged by the guidance.
This is illustrated further in the chart opposite.
Engagement with stakeholders on
remuneration
Every year we undertake an engagement programme
with major shareholders and other stakeholders before the
Committee makes final decisions on pay awards. In late 2021
and early 2022, we met with several institutional shareholders,
UK Government Investments, proxy advisors and the UK
regulators to discuss our approach to remuneration for the
2021 performance year and our proposed policy amendments
for executive directors.
141NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Remuneration at a glance continued
Comparing the new Policy with the current Policy
The main features of the Policy as applied in 2021 is summarised in the table below. The table also includes details of how the
Policy is intended to apply in 2022 if approved by shareholders at the 2022 AGM.
Timing Key elements Current Policy Proposed Policy
Paid over
performance year
Fixed pay Salary Any increase will not normally be greater than the average salary increase for NatWest Group
employees over the period of the Policy.
Other than in exceptional circumstances, the salary of an executive director will not increase by
more than 15% over the course of this Policy.
Implementation in 2021:
CEO: £1,100,000
CFO: £750,000
Implementation in 2022:
2% increase under existing Policy from 1 April
CEO: £1,122,000
CFO: £765,000
Pension Pension contribution, aligned to the wider workforce, at 10% of base salary.
Benefits £26,250 standard benefit funding
Other benefits can be paid within the terms of the Policy.
Fixed Share
Allowance
100% of base salary
Shares released over three years.
100% of base salary
Shares released over five years.
Paid in the year after
the performance
year, share element
subject to 12-month
retention period.
Annual
bonus
Maximum
benefit
Not part of Policy for 2021 Maximum award: 100% of base salary
Phased maximum: 85% of base salary for first
awards in 2023 for performance year (PY)2022
Operation Awarded upfront with a 50/50 split of cash
and shares.
Metrics Annual bonus assessed based on a weighted
scorecard of strategic measures, as set out
below. A risk modifier will also apply, enabling
risk performance to be assessed and awards
reduced, potentially to zero.
Metrics Weighting
RoTE 30%
Income growth 10%
Cost reduction 10%
Capital 10%
Climate 10%
Customer 10%
Purpose, Culture and People 10%
Enterprise and Capability 5%
Personal 5%
Paid over years three
to seven after grant
with a 12-month
retention period
after each vesting.
Long-term
incentives
LTI award RSP award
Maximum
benefit
CEO: 175% of base salary
CFO: 200% of base salary
Final award in 2022 for PY2021.
Maximum award: 150% of base salary
Phased maximum: 125% of base salary
for first awards in 2023 for PY2022.
Operation Delivered in shares, vesting in equal tranches over years three to seven with a 12-month
retention period following each vesting.
Metrics Performance assessed over year before grant
with further tests before vesting.
Balanced scorecard in line with our strategic
aims, performance assessed in the round.
RSP awards subject to satisfactory
performance before grant and an underpin
assessment after three years to check
performance has been sustainable.
Ongoing
Share
ownership
Shareholding
requirements
CEO: 400% of salary
CFO: 250% of salary
CEO: 500% of salary
CFO: 300% of salary
Post-
employment
requirements
Equal to the lower of the shareholding requirement immediately prior to departure or the actual
shareholding on departure, to be held for a period of two years post departure.
Ongoing
Malus and
clawback
Operation Any variable pay awarded is subject to malus prior to vesting and clawback for seven years
from grant, extended to ten years in certain circumstances. See page 157 for further details.
142 NatWest Group 2021 Annual Report and Accounts

Subject to approval from shareholders, the new Policy set out below will be effective from the date of the 2022 AGM. It will apply
for a period of three years, until the 2025 AGM, unless a revised Policy is approved by shareholders before then.
Fixed pay for executive directors
Purpose and link to strategy Operation Maximum potential value
Base salary
Providing fair levels of base
salary and other elements of
pay supports the recruitment
and retention of high-calibre
executives to develop and
deliver strategic priorities.
Base salary set at a
competitive level which
means there is less reliance
on variable pay. This helps
to discourage excessive
risk-taking.
Base salary is paid monthly in cash and reviewed annually.
Rates are determined based on the individual’s role,
skills and experience and are benchmarked against
market practice.
We use a peer group, which includes comparable roles in
other financial services groups of a similar size, to determine
the appropriate level of base salary. We amend this peer
group from time to time to ensure it remains relevant.
Salaries will be increased by 2% from 1 April 2022.
1 January 2022 1 April 2022
CEO £1,100,000 £1,122,000
CFO £750,000 £765,000
Any future salary increases will take
in-role performance into account
and will be considered against peer
companies. Any increase will not
normally be greater than the
average salary increase for NatWest
Group employees over the period
of the Policy.
Other than in exceptional
circumstances, an executive
director’s salary will not increase
by more than 15% over the course
of this Policy. See the recruitment
policy section for new directors.
Fixed share allowance
Additional fixed pay
that reflects the skills
and experience required
and the complexities and
responsibilities of the role.
It further supports the
delivery of a balanced
remuneration policy offering
a suitable mix of fixed and
variable pay.
This is a fixed allowance paid entirely in shares. Individuals
receive shares that vest immediately subject to any
deductions required for tax purposes. A retention period
will also apply. Shares will be released annually on a
pro-rata basis over five years from the date of award
(1)
.
As shares are held beneficially, the directors will be entitled
to any dividends paid on those shares.
The fixed share allowance will broadly be paid in arrears, in
four instalments per year or at any other frequency that the
Committee deems appropriate. The fixed share allowance is
not pensionable and no performance conditions apply.
An award of shares with an annual
value of up to 100% of base salary
at the time of award, or such higher
amount as represents this value
rounded up to the nearest
whole share.
(1) If regulatory requirements emerge that prohibit allowances from being delivered in shares, or deem that such allowances will not qualify as fixed remuneration, then NatWest Group
reserves the right to provide the value of the allowance in cash in order to ensure compliance with such requirements.
The Directors’ Remuneration Policy
(the Policy)
143NatWest Group 2021 Annual Report and Accounts
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The Directors’ Remuneration Policy continued
Purpose and link to strategy Operation Maximum potential value
Benefits
Providing a range of flexible
and market competitive
benefits that colleagues value
and that help them carry
out their duties effectively.
Executive directors can select from a range of standard
benefits including a company car, private medical cover,
life assurance and critical illness insurance.
Executive directors are also entitled to travel assistance
connected with company business including the use of a car
and driver. NatWest Group will meet the cost of any tax due
on the benefit. On rare occasions when executive directors
are accompanied by their spouse or partner to business
events, NatWest Group may also meet the costs and any
associated tax liability. Executive directors are also entitled
to holiday and sick pay.
NatWest Group may offer further benefits including, but not
limited to, relocation assistance in line with market practice.
We may also put in place certain security arrangements for
executive directors when that is deemed appropriate and
meet the cost of any tax due on these benefits.
A set level of funding for standard
benefits (currently £26,250 and
subject to periodic review).
We disclose the total value of
benefits provided each year in the
Annual Report on remuneration.
The maximum potential value of
benefits will depend on the type
of benefit and cost of providing it,
which will vary according to
market rates.
Any non-standard benefits are
subject to approval from the Board.
Pension
Encouraging planning
for retirement and
long-term savings.
This involves the provision of a monthly pension allowance
paid in cash and based on a percentage of salary.
Recipients have the opportunity to use the cash to
participate in a defined contribution pension scheme.
– CEO – 10% of base salary
– CFO – 10% of base salary
In compliance with the UK Corporate
Governance Code (the Code),
the pension allowance rates for
executive directors are aligned with
the rate for the wider workforce
(currently 10% of base salary)
(1)
.
This rate may be increased or
reduced to remain aligned with
the wider NatWest Group.
(1) 10% of base salary is in line with the rate applicable to the vast majority of the workforce. Over 99.64% of employees in the UK receive this rate.
144 NatWest Group 2021 Annual Report and Accounts

Variable pay for executive directors
Purpose and link to
strategy
Operation Maximum potential value Performance assessment
Annual bonus
To support a culture
where individuals are
rewarded for the delivery
of superior performance,
taking into account
NatWest Group’s
strategic objectives
and purpose.
Performance will be
assessed based on a
range of financial and
non-financial measures
that encourage long-term
value creation for
shareholders.
Part of the annual bonus
award is paid in shares
with a holding period.
Awards are also subject
to malus and clawback
adjustments to support
long-term decision-making.
Annual bonus awards will operate
as follows:
– performance will be assessed
against a balanced scorecard
of measures to determine the
amount of any award for a
particular year;
– awards will be paid 50% in shares
and 50% in cash;
– awards will be paid in combination
with RSP awards to meet or
exceed the deferral period for
variable pay in order to comply
with regulatory requirements;
– a post-vesting retention period will
apply to the amount delivered in
shares in line with regulations
(currently 12 months); and
– malus provisions apply prior to
vesting and clawback applies for
seven (and potentially up to ten)
years from the date of award.
Awards will be subject to any other
terms as regulators require from
time to time.
We may calculate the number of
shares awarded using a share price
that is discounted to reflect the
absence of the right to receive
dividends or equivalents during the
vesting period. If regulations permit
the use of dividend equivalents in
future, awards may be eligible to
receive dividend equivalents instead.
The discounted share price will
be calculated with reference to
estimated dividend yields based on
market consensus and the length of
the vesting period. An independent
adviser will then review it. For the
avoidance of doubt, there is no
intention to reflect special
dividends in the calculation.
We will grant annual bonus awards
on a discretionary basis. They will be
delivered through one of NatWest
Group’s shareholder-approved
employee share plans.
The maximum value of
annual bonus awards will be
set at 100% of base salary
for executive directors (or
an amount which represents
such value rounded up to
the nearest whole share).
The value of awards can
also reflect a discount
for long-term deferral, in
line with the Prudential
Regulation Authority (PRA)
Rulebook and European
Banking Authority
(EBA) guidelines.
The level of the award to be
paid can vary between 10%
for threshold performance
and 100% for maximum
performance. Target
performance will pay
out at 50% of maximum
opportunity.
Threshold and maximum
targets will be disclosed at
the end of the performance
period in the 2022 Directors’
Remuneration Report,
alongside the actual level
of performance achieved.
The Committee will set and
assess performance against the
scorecard with weightings that
apply to each category. The
measures and targets we use
will reflect NatWest Group’s
strategic priorities for the year
and align with our purpose.
Financial measures will account
for between 50% and 60% of
the annual bonus opportunity.
A range of non-financial
measures will be included in a
strategic category accounting
for at least 30% of the overall
scorecard. Personal measures
may also be used up to a
maximum of 10% of the overall
scorecard. A risk modifier
will also apply, enabling risk
performance to be assessed
and awards reduced,
potentially to zero.
The Committee has discretion
to vary the performance
measures and weightings in
appropriate circumstances.
However, financial measures
will always account for at
least 50%.
The Committee also has
discretion to determine the
appropriate bonus outcome
when the assessment of
performance against the
formulaic measures and
targets would drive an
unrepresentative outcome
or when it is necessary to
consider strategic, economic,
or societal impacts that were
not or could not have been
accounted for at the point of
agreeing the bonus scorecard.
We will set out further details
on the performance measures
and weightings and a detailed
assessment of performance
against targets in the relevant
year’s Annual Report
on remuneration.
You can find the proposed
performance measures and
weightings for the 2022
financial year on page 166.
145NatWest Group 2021 Annual Report and Accounts
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Variable pay for executive directors continued
Purpose and link to
strategy
Operation Maximum potential value Performance assessment
RSP awards
To support sustainable
performance over a
multi-year period.
We will deliver awards
entirely in shares with
payments deferred over
many years. This creates
simple and effective
alignment with the
returns that shareholders
receive over the long term.
Awards are subject to
malus and clawback
adjustments to
discourage excessive
risk-taking and other
inappropriate behaviours.
RSP awards will operate as follows:
– an award will be granted in shares
provided satisfactory performance
has been achieved in the prior year;
– performance will be assessed
using our established performance
management processes that apply
to all colleagues across the bank;
– after three years, performance
against pre-determined underpin
criteria will be used to ensure
there is no payment for failure;
– subject to the underpin assessment,
awards will vest in combination with
annual bonus awards to meet or
exceed the deferral period for
variable pay under regulatory
requirements (currently between
years three to seven after grant);
– a post-vesting retention period
will apply to the shares in line with
regulations (currently 12 months);
and
– malus provisions can be applied
prior to vesting and clawback
applies for seven (and potentially
up to ten) years from the date
of award.
Awards will be subject to any other
terms regulators require from time
to time.
We may calculate the number
of shares awarded using a share
price that is discounted to reflect
the absence of the right to receive
dividends or equivalents during the
vesting period. If regulations permit
the use of dividend equivalents in
future, awards may be eligible to
receive dividend equivalents instead.
The discounted share price will be
calculated with reference to estimated
dividend yields based on market
consensus and the length of the
vesting period. An independent adviser
will then review it. For the avoidance
of doubt, there is no intention
to reflect special dividends in
the calculation.
We will grant RSP awards on a
discretionary basis. They will be
delivered through one of NatWest
Group’s shareholder-approved
employee share plans.
The maximum value of
RSP awards will be set at
150% of base salary for
executive directors (or an
amount which represents
such value rounded up to
the nearest whole share).
The value of awards can
also reflect a discount for
long-term deferral, in line
with the PRA Rulebook
and EBA guidelines.
Depending on the
Committee’s assessment of
the RSP underpin criteria,
the vesting level of the
award can vary between
0% and 100% of the
original number of
shares granted.
The expected vesting level
of the RSP award is 100%
of maximum opportunity.
Executive directors will
be granted an RSP award
provided performance over the
prior year is considered by the
Committee to be satisfactory,
when assessed using our
established performance
management processes.
Before vesting takes place,
the Committee will review
the outcomes of the business
against underpin criteria
determined by the Committee.
In the first year of operation,
the underpin criteria will
consider whether a sustainable
level of performance over the
period has been achieved with
reference to:
1. the level of capital held
relative to the maximum
distributable amount;
2. total distributions paid relative
to our distribution policy; and
3. any material deterioration
in the risk or regulatory
compliance profile or control
environment of NatWest
Group, or a serious conduct
or reputational event.
Following the underpin
assessment, RSP awards may
vest in full, in part or lapse in
their entirety. The Committee
will also retain the right to
consider other factors and
apply discretion before deciding
on the final vesting outcome.
This will aim to mitigate
any potential unintended
consequences that might arise
and ensure that the outcome
is fair. You can find more
information on the RSP in
the implementation of Policy
for 2022 on page 167.
The Committee is committed
to transparency and will
explain its reasons for applying
discretion or for not doing so.
We also reserve the right to
change the underpin criteria
when granting new RSP
awards over the Policy period.
The Directors’ Remuneration Policy continued
146 NatWest Group 2021 Annual Report and Accounts

Other elements of the Policy for executive directors
Purpose and link to strategy Operation Maximum potential value
Shareholding requirements
Executive directors must
build and continue to hold
a significant shareholding
both during and after
employment.
This helps to further align
their interests with returns
to shareholders over the
long term.
Shares held outright, including those acquired under the
fixed share allowance, qualify towards the shareholding
requirement. Unvested shares from annual bonus and
RSP awards count on a net-of-tax basis towards the
shareholding requirement once performance conditions
have been assessed. When any applicable retention periods
have passed, executive directors can dispose of up to 25%
of the net-of-tax shares received until the shareholding
requirement is met. Any shares purchased voluntarily will
count towards the requirement but are excluded from the
restriction on sale.
On leaving, executive directors are required to hold
shares of a value equal to the lower of their shareholding
requirement immediately prior to departure or the actual
shareholding on departure, for a period of two years. The
requirement includes vested and unvested shares that have
been assessed for performance but shares purchased
voluntarily are excluded from the post-employment
shareholding requirement. A fixed number of shares for
the post-employment requirement will be determined at
the date of departure.
Procedures are in place to help enforce the shareholding
requirements, both during and after employment. Executive
directors are required to agree to be bound by the terms of
the requirements and to use prescribed nominee accounts
to hold shares subject to restrictions.
CEO – 500% of salary.
CFO – 300% of salary.
Requirements may be reviewed
in future but are not expected to
be reduced.
Employee share plans
Providing an opportunity
for executive directors to
purchase shares in the
company voluntarily.
The plans provide an opportunity for executive directors to
contribute from salary and acquire shares under one or
more of NatWest Group’s all-employee share plans in
operation from time to time. In the UK, this currently includes:
– the Sharesave plan where monthly savings over a fixed
period may be used to purchase shares at an agreed
option price; and
– the Buy As You Earn plan where shares can be purchased
from pre-tax salary.
Executive directors may participate on the same basis as
other eligible employees. All-employee share plans are not
subject to performance conditions.
The statutory limits that are imposed
by HMRC in the UK or the limits
under the relevant share plan rules.
Legacy arrangements
To ensure NatWest Group
can continue to honour
payments due to
executive directors.
In approving this Policy, authority is given to honour any
previous commitments or arrangements entered into with
current or former directors. This includes any share awards
granted under the 2014 Employee Share Plan. For the
avoidance of doubt, all outstanding LTI awards granted
under previous policies will continue to vest in line with the
terms agreed at the time of grant. LTI awards are subject to
performance assessments prior to grant and again before
vesting. Awards are deferred over three to seven years and
a 12-month retention period applies after each vesting.
Authority is also given to honour arrangements agreed with
an employee prior to appointment as an executive director
that may have different terms or performance conditions.
In line with existing commitments
and arrangements.
147NatWest Group 2021 Annual Report and Accounts
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The Directors’ Remuneration Policy continued
Remuneration for the Chairman and non-executive directors
Purpose and link to strategy Operation Potential value
Fees
Competitive fixed
remuneration that reflects
the skills, experience and
time commitment required
for the role.
Fees are set at an
appropriate level to attract
individuals with the attributes
needed to oversee the
Board’s strategy.
Fees are paid monthly in cash. The Board retains discretion
to pay fees in cash, shares or a combination of the two.
The level of remuneration reflects the responsibility and time
commitment required, and the level of fees paid to directors
of comparable major UK companies. We review fees regularly,
and the Board may choose to apply an increase within the
limits of the Policy on an annual or less frequent basis.
The Chairman receives an all-inclusive fee. Non-executive
directors receive a basic Board fee with additional payments
when serving as a member or Chairman of a Board
Committee or performing an additional role such as the
Senior Independent Director. Non-executive directors may
also receive fees as directors of subsidiary companies.
Additional fees may be paid for new Board Committees
provided these are not greater than fees payable for the
existing Board Committees as detailed in the Annual
remuneration report.
No variable pay is provided, enabling the Chairman
and non-executive directors to maintain appropriate
independence, focus on long-term decision-making
and constructively challenge performance of the
executive directors.
The rates for the year ahead
are set out in the Annual Report
on remuneration.
Any increases to fees will not
normally be greater than the
average inflation rate or salary
increases for the wider workforce
over the period of the new Policy.
However, we take into account that
any change in responsibilities, role
or time commitment may merit a
larger increase.
Other than in exceptional
circumstances, fees will not increase
by more than 15% over the course of
this Policy.
Benefits
Providing a level of benefits
in line with market practice.
The Chairman and non-executive directors are also entitled
to travel assistance connected with company business,
including the use of a car and driver where deemed
appropriate. Where this is a taxable benefit for the recipient,
NatWest Group will meet the cost of any tax due on the
benefit. On rare occasions when directors are accompanied
by their spouse or partner to business events, NatWest
Group may also meet the costs and any associated tax
liability. We may also offer other benefits in line with
market practice.
In line with evolving working practices and our efforts to
discourage unnecessary travel and costs, the Board has
moved to a hybrid model where meetings take place both
‘in person’ and remotely. In light of the change, NatWest
Group will consider providing assistance and meeting
reasonable costs on a case-by-case basis to support the
Chairman and non-executive directors in the effective
undertaking of their roles from another location. If additional
tax liabilities arise from this practice, NatWest Group will
also meet these costs when deemed appropriate. The
Chairman is entitled to private medical cover and life
insurance cover provided the Board considers the
costs to be reasonable.
Reasonable expenses incurred in connection with
the performance of duties will also be reimbursed.
The value of the private medical and
life insurance cover provided to the
Chairman as well as other benefits
provided under the new Policy will
be in line with market rates and
disclosed in the Annual
remuneration report.
148 NatWest Group 2021 Annual Report and Accounts

Other policy elements for directors
Provisions Operation
Recruitment policy Our Boardroom Inclusion Policy is in place to ensure that NatWest Group can attract, motivate and
retain the best talent and avoid limiting potential caused by bias, prejudice or discrimination. When
recruiting new directors, our Policy aims to be competitive and to structure pay in line with the
framework applicable to current directors (as stated in the tables above), while recognising that
some adjustment to quantum may be necessary to secure the preferred candidate.
The pension allowance for new executive directors will be in line with that of the wider UK workforce.
We can continue to honour existing commitments in the event of an internal promotion. A buy-out
policy exists to replace awards forfeited or payments foregone, which is in line with regulatory
requirements. The Committee will minimise buy-outs wherever possible and ensure they are no
more generous than, and on substantially similar terms to, the original awards or payments they
are replacing. No sign-on awards will be offered on joining.
Any awards granted following recruitment may be made under such NatWest Group employee
share plans as are in place from time to time or otherwise in accordance with the relevant provisions
in the Listing Rules. We will disclose full details in the next remuneration report. The maximum level
of variable pay which may be granted to new executive directors will be guided by, but not limited to,
arrangements for existing executive directors. In any event this will not exceed the limit of one times
the level of fixed pay. The maximum level excludes any buy-out arrangements.
Notice and
termination provisions
Executive directors
As set out in our executive directors’ service contracts, NatWest Group or the executive director is
required to give 12 months’ notice to the other party to terminate the employment. The Committee
will ensure that any proposals relating to termination payments are fair and reasonable and
recognise that failure is not rewarded. There are no pre-determined provisions for compensation on
termination, other than when we determine that a redundancy payment is properly due under our
redundancy policy in place from time to time. There is discretion for NatWest Group to make a
payment in lieu of notice (based on salary only) which is released in monthly instalments. The
executive director must take all reasonable steps to find alternative work and any remaining
instalments will be reduced as appropriate to offset income from any such work.
Chairman and non-executive directors
Instead of service contracts, the Chairman and the non-executive directors have letters of
appointment that reflect their responsibilities and time commitments. There are no notice periods
and we will pay no compensation in the event of termination, other than standard payments for the
period served up to the termination date.
Under the Board Appointment Policy, non-executive directors are appointed for an initial term of
three years, subject to annual re-election by shareholders. At the end of this initial term, a further
three-year term may be agreed. Non-executive directors may be invited to serve beyond six years,
up to a maximum tenure of nine years. The Chairman is not subject to the Board Appointment Policy
but is subject to the Code’s requirements relating to the maximum tenure period for chairs. All
directors stand for annual election or re-election by shareholders at the NatWest Group’s AGM.
Effective dates of appointment for directors:
Howard Davies – 14 July 2015
Alison Rose – 1 November 2019
Katie Murray – 1 January 2019
Frank Dangeard – 16 May 2016
Patrick Flynn – 1 June 2018
Morten Friis – 10 April 2014
Robert Gillespie – 2 December 2013
Yasmin Jetha – 21 June 2017
(1)
Mike Rogers – 26 January 2016
Mark Seligman – 1 April 2017
Lena Wilson – 1 January 2018
(1) Yasmin Jetha’s first appointment to the Board. In preparation for the ring-fencing regime, Ms Jetha stepped down from the Board in
2018 to serve solely as a director of some of our subsidiary companies before re-joining the Board on 1 April 2020.
149NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Provisions Operation
Treatment of outstanding
share plan awards
on termination
On termination, we will treat awards in accordance with the relevant plan rules or other terms on
which they were granted. Individuals will only qualify for good leaver treatment if they leave due
to ill-health, injury, disability, death, retirement (as agreed with NatWest Group), redundancy, the
employing company ceasing to be a member of NatWest Group, transfer of the employing business,
or any other reason if, and to the extent, the Committee decides in any case. Malus and clawback
provisions will continue to apply to all leavers, and could be used to adjust awards if subsequent
issues relating to executive directors’ performance come to light. In the event of a change of control,
outstanding awards will be treated in line with the provisions of the relevant plan rules, as approved
by shareholders.
Fixed share allowances
Shares will continue to be released over the applicable retention period helping to ensure that former
executive directors maintain an appropriate interest in shares. In all leaver circumstances, executive
directors will continue to be eligible to receive a pro-rated fixed share allowance to reflect the period
up to the termination date.
LTI awards (under the existing Policy)
LTI awards normally lapse on leaving unless the termination is for one of the specified good leaver
reasons. LTI awards held by good leavers will normally vest on the original vesting dates, subject to
the performance conditions being met and the rules of the relevant plan. No pro-rating applies after
grant for LTI awards granted from 2018 onwards.
The existing Policy allows good leaver retirement to be granted provided the individual is not leaving
to work in a capacity considered to be competing directly and materially with NatWest Group. The
new Policy introduces a more typical and less favourable definition of retirement that will not allow
good leaver retirement treatment where individuals take up a commensurate role elsewhere or a role
with a company providing banking services. The new Policy will also address the concerns from some
shareholders by introducing pro-rating for RSP awards in good leaver circumstances.
Annual bonus awards (for performance year 2022 and later years)
Any deferred bonus awards that are unvested will normally lapse on leaving unless good leaver
circumstances apply, in which case the awards will normally continue to vest on the original
vesting dates. Provided that individuals leave in good-leaver circumstances, they will be eligible
to be considered for an annual bonus award for their final year of employment.
RSP awards (for performance year 2022 and later years)
RSP awards that are unvested will normally lapse on leaving unless specified good-leaver
circumstances apply. For good leavers, awards are pro-rated for time served during the three-year
performance period and will normally continue to vest on the original vesting dates. Individuals will
not be eligible to be considered for an RSP award for the final year of employment.
Contractual provisions Contracts include standard clauses covering remuneration arrangements and discretionary incentive
plans (as set out in this report). The contracts also reference: reimbursement of reasonable out-of-
pocket expenses; annual leave; redundancy terms and sickness absence; the performance review
process; directors’ and officers’ insurance; the disciplinary procedure; and terms for dismissal in
the event of personal underperformance or breaches of NatWest Group’s policies.
The Committee retains the discretion to make payments (including but not limited to professional
and outplacement fees) to: facilitate smooth handovers; mitigate against legal claims; and/or procure
reasonable assistance with investigations or claims, subject to any payments being made pursuant to
a settlement or release agreement.
The Directors’ Remuneration Policy continued
150 NatWest Group 2021 Annual Report and Accounts

Summary of proposed changes for executive directors
Under the new Policy, LTI awards will be replaced with annual bonuses and RSP awards. This will provide a more market-aligned
and competitive remuneration package for executive directors, while incentivising growth and the delivery of our purpose-led
strategy. It will also align more closely to shareholder expectations, with pro-rating applying to RSP awards in good leaver
circumstances and annual bonus outcomes being determined with reference to weighted performance measures and robust
strategic targets. RSP awards will contribute to nearly 67% of expected pay being delivered in shares, further supporting the
delivery of sustainable long-term performance. The fixed share allowance retention period will also be extended from three to
five years, further aligning remuneration to the long term. The pay levels under the Policy were decided after considering relevant
market positioning for similar roles at comparable financial services companies. They remain relatively modest compared to other
major UK bank peers. We selected performance measures for annual bonus and RSP awards to reflect a cross section of our main
strategic deliverables. There will be greater transparency on the link between performance and pay outcomes through weighted
annual bonus measures with non-financial targets being set to reflect our purpose-led strategy.
Other changes under the new Policy for executive directors
Performance conditions Leaver terms Shareholding requirement
While LTI awards under the existing Policy
are based on assessing performance in
the round, we will base bonus awards
under the new Policy on a weighted
scorecard of annual measures and targets
aligned with our strategic priorities.
Financial measures will account for
at least 50% of the bonus scorecard
supported by strategic and
personal measures.
RSP awards will be based on a simpler
pre-grant test than the existing Policy
with an underpin assessment at the end
of three years to ensure there are no
payments for failure.
As is currently the case, any outstanding
awards will be forfeited on leaving unless
the individual leaves for a specified good
leaver reason. Under the existing Policy
no pro-rating applies to LTI awards after
grant in agreed good leaver circumstances.
RSP awards under the new Policy
will be subject to pro-rating in good
leaver circumstances.
In addition, we will adopt a more typical
definition of ‘retirement’, that is more in
line with shareholder expectations and
does not allow good leaver status where
individuals take up a commensurate role
elsewhere or a role with a company
providing banking services.
Shareholding requirements will increase
from 400% of salary to 500% of salary for
the CEO and from 250% of salary to 300%
of salary for the CFO.
This increase recognises that
shareholders expect executive directors
to have significant shareholdings where
RSP constructs are being introduced.
The change moves NatWest Group
towards the highest levels of market
practice on shareholder requirements
and reinforces the long-term alignment of
executive remuneration with shareholders.
Changes to the policy for the Chairman and non-executive directors
We reviewed the remuneration policy for the Chairman and the non-executive directors during 2021, following which only one
change will be made. To recognise working practices have changed, and also to discourage unnecessary travel, the Board has
moved to a hybrid model whereby meetings take place both in person and remotely. The change under the Policy will allow the
Chairman and non-executive directors to receive assistance when they are attending Board meetings from another location,
including meeting any costs that are considered reasonable and appropriate. Arrangements will be considered on a
case-by-case basis.
The Committee retains discretion to make minor amendments to the Directors’ Remuneration Policy that reflect changing legal or
regulatory requirements or guidelines. We will not make any material changes to the advantage of directors without first reverting
to shareholders for approval.
151NatWest Group 2021 Annual Report and Accounts
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The Directors’ Remuneration Policy continued
(1) The charts above are for illustration only, with minimum representing fixed remuneration (base salary, fixed share allowance, pension and standard benefit funding).
(2) The charts reflect remuneration receivable in the first year of the new Policy which, as noted earlier in this report, is being introduced on a phased basis. The maximum annual bonus
award will be limited to 85% of base salary in year one rising to 100% of base salary in year two. The maximum RSP award will be limited to 125% of base salary in year one rising to
150% of base salary in year two.
(3) The expected value assumes annual bonus payments will be made at 50% of maximum opportunity and RSP awards will vest at 100% of maximum.
(4) Maximum 1 in the charts assumes both annual bonus and RSP awards are paid and vest in full, at 100% of maximum. Maximum 2 extends this to show the impact of a 50% increase
in the share price for RSP awards over the period from grant to vest. The benefits figure includes standard benefit funding as outlined in the Policy but excludes any potential other
benefits under the Policy such as travel assistance in connection with company business. We will disclose the value of any taxable business expenses in the total remuneration table
each year.
Chief Executive Officer
(£000’s)
Chief Financial Officer
(£000’s)
Base salary Fixed share allowance
Pension & benefits Annual bonus
RSP award (vesting value)
47%
47%
2,382
6%
26%
26%
11%
34%
4,262
3%
24%
24%
20%
29%
4,739
3%
21%
21%
17%
39%
5,440
2%
120%
Minimum Expected Maximum 1 Maximum 2
Fixed pay only Bonus and RSP at
constant share price
RSP at 50% share
price increase
47%
47%
1,633
6%
26%
26%
11%
33%
2,914
4%
24%
24%
20%
29%
3,239
3%
21%
21%
17%
38%
3,717
3%
Minimum Expected Maximum 1 Maximum 2
Fixed pay only Bonus and RSP at
constant share price
RSP at 50% share
price increase
Illustration of annual remuneration for executive directors under the new policy
152 NatWest Group 2021 Annual Report and Accounts

Directors’ remuneration report
Aligning executive pay with ESG performance and our purpose-led strategy
In addition to considering financial measures, the process to determine variable pay for executive directors under the new Policy
will continue to reflect progress against our Environmental, Social and Governance (ESG) priorities. The combined bonus scorecard
for 2022 and the assessment of satisfactory performance under the RSP will align with the five principles of a purpose-led business,
as set out in the Blueprint for Better Business (BfBB) framework. The five principles form part of our purpose framework and you
can find more details of this on page 13 of the Strategic report.
Five principles of a purpose-led business
A guardian for
future generations
Honest and fair
with customers
and suppliers
A good citizen A responsible
and responsive
employer
Has a purpose which
delivers long-term
sustainable
performance
Variable
pay for
2022
Tackling climate
change is core to
our purpose.
Several climate
measures are
included in the
bonus scorecard for
executive directors.
The climate category
accounts for 10% of
annual bonus awards
for 2022. This
includes three
measures as follows:
1. Carbon emissions
from own operations
2. Funding and
financing committed
to climate and
sustainable finance
3. Develop climate
transition plan for
publication with
2022 annual results.
Putting customers at
the heart of what we
do will help people,
families and
businesses to thrive.
We target customer
satisfaction and
the likelihood that
customers will
recommend our
brands in annual
bonus decisions.
A weighted Net
Promoter Score (NPS)
will account for 10%
of the annual bonus
awards for 2022.
RSP awards will also
be assessed to ensure
that performance has
been sustainable
before the vesting
takes place.
We can only deliver
on our purpose-led
strategy by
continuing and
deepening our
relationships with
all our stakeholders.
There are targets to
encourage and grow
businesses and to
increase financial
capability.
The Committee
has discretion when
making decisions to
ensure outcomes are
fair and appropriate.
Variable pay can
also be recovered
from individuals
if we believe the
payments are no
longer justified.
We are committed
to creating a diverse
workforce with
an equitable and
inclusive culture.
This will also help us
in serving our diverse
range of customers
and communities in
the ways they need.
There are targets
to increase the
percentage of
females and Black,
Asian and Minority
Ethnic colleagues in
the top layers of the
organisation.
Together the
Purpose, Culture
and People targets
account for 10% of
annual bonus awards
for 2022.
A very high proportion
of pay is delivered in
shares over many
years. This encourages
executive directors to
think and act in the
best long-term interests
of all our stakeholders.
10% of the 2022 annual
bonus award will be
based on maintaining
efficient and safe
levels of capital.
If risk performance is
not at the required
level, annual bonus
awards can
be adjusted.
RSP awards also take
financial and risk
considerations into
account prior
to vesting.
ESG
alignment
E S G
153NatWest Group 2021 Annual Report and Accounts
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Our ‘Colleague Listening Strategy’
It is more important than ever that we listen to colleagues and use the insight we gain to attract, engage and retain the talent we
need for the future. This helps us improve by assessing colleague
(1)
sentiment and our progress in creating a great place to work.
Regular engagement Colleague Advisory Panel (CAP)
– Twice a year, a colleague
opinion survey (Our View)
allows people to have a say
on what it feels like to work
at NatWest Group.
– Just over 46,700 (81%) of
our colleagues participated
in the latest survey
and there is regular
engagement throughout
the year.
– Question and answer
sessions take place
with senior executives
throughout the year.
– Feedback from colleagues
forms part of the People
and Culture measures
that impact executive pay.
– Engagement on
remuneration also takes
place with representatives
from Unite in Great Britain
and Offshore and the
Financial Services Union
in Northern Ireland and
the Republic of Ireland.
The CAP was established in 2018 to help us promote colleague voice in the boardroom. The CAP is
chaired by Lena Wilson, one of our non-executive directors, and allows colleagues to engage directly
with senior management and the Board on topics that are important to them. It includes colleagues
who volunteered to be involved, representatives from trade union bodies and works councils, the
colleague-led networks and junior management teams.
After each meeting, the Board receives a summary and a follow-up call is then held with the CAP
so that CAP members can hear how their views were shared and what happened as a result. The
CAP continues to be highly regarded by those who attend and has proven to be an effective way
of establishing two-way dialogue between colleagues and Board members. In November 2021, the
Committee Chairman met with the CAP to discuss executive and wider workforce remuneration.
There was a focus on fairness, simplicity, transparency and inclusion which runs through all
colleague remuneration.
Members were appreciative of the presentation, saying it was a very clear explanation of NatWest
Group’s approach to remuneration. They were keen to see how our Fair Pay Charter could receive
a higher profile and also discussed NatWest Group’s approach to salary increases and the impact
of the rising cost of living. The Committee Chairman explained that the combination of inflation and
higher living costs was something employers had not faced for some time. The COVID-19 pandemic
had also had a significant impact across society. Economic factors alongside the external pay
market and longer-term business affordability would all need to be taken in to account when
deciding our investment in fixed pay.
Climate was the overall theme of the November meeting and the Committee Chairman referred
to this in his presentation. He highlighted that executive directors had specific performance goals
and measures linked to climate cost, our climate footprint and colleague feedback, all of which was
considered when deciding their pay awards. New ways of working were also discussed, and the
Group Chief People and Transformation Officer highlighted that focus groups were being run to
understand the cost impact of working from home.
A number of actions were agreed at the meeting for further consideration and the Chair of the
CAP provided the Board with an update on the feedback received from colleagues.
(1) Colleagues means all employees and, in some instances, other members of the wider workforce (including contractors and agency workers).
154 NatWest Group 2021 Annual Report and Accounts

Our View survey
The Our View colleague opinion survey compares responses from colleagues at NatWest Group against those from other
companies, known as the Global Financial Services Norm (GFSN). In general, the scores from the Reward category in Our
View have declined over the last year although they remain above the GFSN in all but one category. The reduction in scores was
anticipated as the impact of the global pandemic on our financial performance meant investment in fixed pay was constrained last
year and our bonus pool was reduced. Some colleagues also felt they had limited opportunity over the last year to use some of the
benefits they had purchased under our benefit scheme.
2021 favourable
score
Versus
2020
Versus
GFSN
Total Reward
(1)
76 -4 +4
Colleagues who think they are paid fairly for the work they do 67 -6 +4
Understand how their pay is determined 87 -2 +13
Understand how their bonus is determined 72 -5 -5
Believe NatWest Group’s benefit programme fits their needs 80 -1 +5
Manager regularly gives them recognition for work well done 87 no change +5
(1) NatWest Group Our View scores for 2021 exclude Ulster Bank RoI.
Pay gaps and pay ratio disclosures
Pay equality, including neutrality in respect of protected characteristics, is a core feature of our approach, to support equal pay for
equal work. You can find the latest gender and ethnicity pay gap reporting for NatWest Group together with the steps being taken
to address the position in the ‘Our Colleagues’ section of the Strategic Report and at natwestgroup.com. You can also see the
CEO-to-employee pay ratios and further information on remuneration for the wider workforce later in this report.
Further information on our wider workforce approach.
Fair reward is one of the key things we are committed to in order to provide a great place to work for everyone. Our Fair Pay
Charter is one of the ways we do this and you can find further information on our approach in our ESG Supplement. The ‘Our
Colleagues’ section of the Strategic Report also sets out how we helping colleagues to thrive and realise their potential, how
we support their wellbeing and how we create a diverse, equitable and inclusive culture.
How we align wider workforce and executive pay
Consistent with our approach to executive pay, our remuneration policy for all colleagues aims to be simple, transparent and
to promote the long-term success of NatWest Group. It encourages a culture where individuals are rewarded for sustained
performance in line with risk appetite and for demonstrating the right behaviours. These principles apply to everyone with
adjustments made where necessary to comply with local requirements. As set out on the previous page, the Committee Chairman
met with colleagues through the CAP in November 2021 to discuss how we take a consistent approach to workforce remuneration.
He also highlighted some of the challenges being faced with the existing Policy for executive directors. The proposed introduction
of annual bonus for executive directors under the new Policy will create closer alignment with the remuneration construct for the
wider workforce. A significant proportion of our colleagues are eligible to receive annual bonus awards, subject to performance.
155NatWest Group 2021 Annual Report and Accounts
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All colleagues Certain colleagues depending on location, grade or job Senior executives only
Base salary and
pension funding
Benefits and share
plans
Role-based allowances Annual bonus RSP awards
A competitive level of
salary paid in cash and
reviewed annually. Set
to reflect the talents,
skills and competencies
that the individual brings
to the business.
Additional funding
is provided which
colleagues can use
to save in a company
pension scheme.
Colleagues in the UK
receive pension funding
at 10% of base salary.
The same rate applies
to executive directors.
Rates in other locations
reflect market practice
in those locations.
Some colleagues receive
funding which they can
use towards the cost of
benefits or take as cash.
Benefits offered include
private medical cover,
dental cover, personal
accident insurance, life
assurance and critical
illness insurance.
Individuals in some
jurisdictions can also join
share plans, providing
an efficient way to buy
NatWest Group plc
shares and align their
interests with our
shareholders.
Role-based allowances
reflect the skills and
experience required
for certain jobs.
These are part of
fixed remuneration for
regulatory purposes.
They are delivered in
cash and/or shares
depending on the level
of the allowance and the
seniority of the recipient.
Shares are released
in instalments over a
minimum three-year
period with a five-year
period applying to
executive directors.
This is a way of
rewarding individuals
for superior
performance.
The annual bonus pool
is based on a balanced
scorecard of measures
across our core
strategic areas
and our purpose.
Allocation from the
pool depends on the
performance of the
business area and
the individual.
Awards are made in
cash and/or shares
with larger amounts
paid out over
several years.
These encourage a
sustainable long-term
performance.
Awards are delivered
entirely in shares to provide
direct alignment with our
shareholders. We carry out
performance checks prior
to grant and again after
three years to ensure
satisfactory and sustained
performance has been
achieved.
Awards are paid out in
equal amounts across years
three to seven following
grant, followed by a
12-month retention period.
RSP participants are also
subject to shareholding
requirements.
Fixed pay Variable pay
To drive consistency, we have agreed a set of NatWest Group-wide Remuneration Policy
Principles which are designed to:
1. support a performance culture – we recognise colleagues’
skills and experience, the responsibilities of their job and
their geographic location. Ultimately, we ‘pay for
performance’, underpinned by a robust performance
management process;
2. be market facing – we benchmark ourselves against a core
peer group and ensure our pay is fair, competitive and
affordable; and
3. ensure compliance and governance – our reward
design must be within policy, meet the expectations and
requirements of our regulators and be appropriately aligned
with the expectations of our shareholders and customers.
– A simple and transparent pay policy supports colleagues in
doing the right thing.
– Our more junior colleagues are typically paid through
fixed pay only, which was increased when variable pay
was removed.
– This provides them with greater security and allows them
to fully focus on the needs of the customer.
Pay for executive directors is aligned with the wider workforce, with two main differences:
i. the use of RSP awards; and
ii. a requirement to maintain a holding of shares in NatWest Group, both during and after employment.
These differences are deliberate and recognise that it is in the best interests of our stakeholders for executive directors to have
a significant proportion of their remuneration paid in shares and subject to long-term holding requirements.
Base
Salary
Pension &
Benefit
Funding
+
Role-based
Allowances
Annual Bonus
RSP Awards
The Directors’ remuneration report continued
+
Benefit funding
applies to
certain jobs
Provided to some
Material Risk
Takers (MRTs) only
Mainly manager grade and
above (including executive
directors under the new Policy).
Executive directors and
potentially some of the
CEO’s direct reports.
156 NatWest Group 2021 Annual Report and Accounts

Our approach to the UK Corporate Governance Code (the ‘Code’)
This table supplements other information in this report by demonstrating some of the ways in which we meet the requirements and
spirit of the Code. We continue to monitor and reflect on best practice when developing our remuneration practices. By introducing
weighted annual bonus measures, rather than assessing performance in the round, the new Policy for executive directors creates a
more direct link between the delivery of our strategy and pay and performance outcomes. We consider both the outcomes and how
they have been achieved to encourage and reward behaviours in line with our values. Malus and clawback provisions together with
long holding periods reinforce the need for recipients to act in the best interests of our stakeholders.
Provision Our approach
Review workforce
remuneration
and alignment
with culture
– Every year we consider how pay has been distributed across NatWest Group, analysing performance ratings
by grade and diversity categories. Checks are in place to ensure decisions are made fairly.
– Over the last year, we also offered colleagues the opportunity to join Sharesave in the UK, Poland and India.
This simple savings plan encourages colleagues to think about their financial wellbeing and provides an
option to buy shares and align their interests with our shareholders.
– We also review the annual spend on fixed pay (approximately two-thirds of the workforce receive fixed pay
only). We have targeted recent increases towards our most junior and lowest-paid colleagues, areas where
specialist skills are required leading to high attrition rates and those lowest in their salary range.
– The Committee also approves, and reviews the implementation of, the Group-wide remuneration policy
principles, and approves the bonus pool for bonus-eligible colleagues across the wider workforce.
– Targets exist to help build colleagues’ capability, strengthen our culture and build a diverse workforce within
an inclusive environment. These form part of the performance measures that are aligned with our strategy
and affect the pay of executive directors and bonus-eligible colleagues.
– An accountability review process allows us to respond where new information would change our variable
pay decisions. The Committee works closely with other Board Committees to consider how to reflect
progress on culture in remuneration.
– The governance of culture is clearly laid out with specific Senior Management Function roles having defined
accountabilities, which are taken into account in determining pay decisions for such roles.
When determining
the executive
director
remuneration
policy, we consider
factors including
clarity, simplicity,
risk, predictability,
proportionality and
alignment to culture
– Most of the remuneration for executive directors is share-based and subject to deferral and retention
requirements, creating significant alignment with our shareholders.
– There is clarity for executives on how performance will be assessed and the behaviours expected of them.
We provide detailed disclosure on decisions made to give our shareholders transparency.
– We take risk into account at various stages of the performance assessment process, with underpins and
malus and clawback provisions providing us with further tools to adjust awards, if necessary.
– We have set out scenarios of the possible rewards to executive directors under the new Policy on page 152
along with the impact of a 50% share price appreciation over the performance period for RSP awards.
– Variable pay cannot be awarded above the level of fixed pay. We believe that this is a restrained and
proportionate approach to executive remuneration. RSP awards will be subject to a satisfactory and
sustainable level of performance having been achieved, having regard to our purpose-led strategic goals.
RSP awards will also be deferred over many years to encourage long-term thinking.
Discretion – We can apply discretion under our share plan rules where appropriate. The Committee has in the past
applied downwards discretion in determining variable pay outcomes and did so again this year in respect
of the 2019 LTI awards due to vest in March 2022.
– The Committee can also determine whether an individual would qualify as a good leaver on departure and,
subject to meeting any regulatory requirements, decide that awards held by good leavers should vest earlier
than the normal vesting date.
– Discretion is only used to ensure a fair outcome. We will disclose any use of discretion.
– Further discretions include the ability to: treat variable pay awards in a range of ways in the event of a
change of control, but only within the terms of the share plan rules approved by shareholders; change any
performance measures, targets, and adjust awards if major events occur.
Scope to adjust
variable pay
through malus
and clawback
– Malus allows us to reduce the amount of any unvested variable pay awards, potentially to zero, prior to
payment. Clawback allows the recovery of variable pay awards that have already vested.
– The circumstances in which NatWest Group may apply malus or clawback include:
– conduct which results in significant financial losses for NatWest Group;
– an individual failing to meet appropriate standards of fitness and propriety;
– an individual’s misbehaviour or material error;
– NatWest Group or the individual’s business unit suffering a material failure of risk management; and
– for malus and in-year bonus reduction only, circumstances where there has been a material downturn in
financial performance.
– This list is not exhaustive and further circumstances may be considered where appropriate.
157NatWest Group 2021 Annual Report and Accounts
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Annual remuneration report
Annual
remuneration report
Single total figure of remuneration for executive directors for 2021 (audited)
Alison Rose Katie Murray
2021
£000
2020
£000
2021
£000
2020
£000
Base salary 1,100 1,100 750 750
Fixed share allowance
(1)
1,100 674 750 750
Benefits
(2)
81 81 30 47
Pension
(3)
110 110 75 75
Total fixed remuneration 2,391 1,965 1,605 1,622
Annual bonus n/a n/a n/a n/a
Long-term incentive award
(4)
1,197 650 – –
Total variable remuneration 1,197 650 – –
Total remuneration 3,588 2,615 1,605 1,622
(1) The fixed share allowance is based on 100% of salary and, as part of fixed remuneration, is not subject to any performance conditions. In April 2020, Ms Rose announced she would
forgo 25% of her fixed pay for the rest of the year. A reduction of £426,078 was applied to her fixed share allowance and NatWest Group made a comparable donation to the NET
Coronavirus Appeal.
(2) Includes standard benefit funding at £26,250 per annum. In addition, Ms Rose received travel assistance in connection with company business (£25,314) and assistance with home
security (£29,703). Ms Murray also received travel assistance (£990) and home security arrangements (£2,519) for 2021.
(3) The executive directors receive a monthly cash allowance and can choose to participate in the company’s defined contribution pension arrangements.
(4) The 2021 value for Ms Rose relates to an LTI award granted in 2019, prior to becoming an executive director. The Committee assessed performance prior to vesting as set out below
and on the next page. No discretion was exercised as a result of the share price changing over the performance period. Ms Murray was not eligible for an LTI award in 2019.
Vesting of 2019 LTI award (audited)
The table summarises the number of shares due to vest to Ms Rose following the pre-grant and pre-vest performance assessments
and the estimated vesting value for the 2019 LTI award, shown in the single total figure of remuneration above. No dividend
equivalents were paid prior to vesting.
Alison Rose
2019 LTI award
Maximum shares
at grant
Reduction at
pre-grant test
Shares granted Further
reduction at
pre–vest test
as a percentage
of original
maximum
Shares to vest
644,672 c.11.76% 568,829 5% 536,595
Maximum value
at grant
Reduction in
value from
pre-grant test
Value of Shares
granted
Reduction in
value at pre-vest
test
Reduction due to
fall in share price
Vesting value
(1)
£1,700,000 £200,000 £1,500,000 £85,000 £218,000 £1,197,000
(1) Share price at grant was £2.637 and the vesting value was based on share price of £2.23, the average over the three-month period from October to December 2021.
158 NatWest Group 2021 Annual Report and Accounts

2019 LTI award – Pre-vest performance assessment framework
LTI awards were made in early 2019 following an assessment of performance over the 2018 financial year. Before vesting, the
Committee carries out a further review to consider whether anything has come to light which might call the original award into
question. Internal control functions and PwC, as independent advisers, the Group Board Risk Committee (BRC) and the Group
Sustainable Banking Committee (SBC) support the Committee in this assessment, with the outcome set out below.
Looking back to performance for 2018 and ‘knowing what we know now’, has NatWest Group
1. Remained safe and
secure, taking into
account financial results
and the capital position?
Has NatWest
Group breached
a minimum
capital ratio over
the period?
NO
NatWest Group
has remained
well capitalised
since 2018.
YES
Has there been
a material fall
in the NatWest
Group share
price over
the period?
NO
The share price
has risen by
4% since the
end of 2018.
Has Net
Promoter Score
(NPS) fallen
across the
business?
NO
for six segments.
YES
for one of the
five targeted
customer brands.
Have there
been indicators
of a material
deterioration in
the risk culture
or profile, taking
into account
annual
assessments by
the Risk function
and the BRC?
NO
No material
deterioration
in risk culture or
profile since 2018.
Has the
Financial
Services Culture
Board (FSCB)
(1)
survey position
fallen materially?
NO
Scores improved
consistently
since 2018.
Have colleague
engagement
scores fallen
materially?
NO
Engagement
Index has
increased
since 2018.
NO
2. Been a good bank for
customers taking into
account customer and
advocacy performance?
3. Operated in an
environment in which risk
is seen as part of the way
we work and think?
4. Operated in a way that
reflects its stated values?
Core questions
Where the answer is ‘Yes’, three further questions are considered:
1. Is the underperformance due to factors within management’s reasonable control in the circumstances?
2. Can the underperformance be linked back to the performance year to which the award relates, rather
than to performance developments since?
3. Is it appropriate to reflect the underperformance in the current pre-vest test (i.e. if the underperformance
has not been adequately reflected in other ways such as subsequent pre-grant tests for awards granted in
the interim)?
If the answer to each of these questions is “Yes”, the Committee may decide that a further adjustment prior
to vesting is appropriate, and it has the discretion to decide the amount.
Further analysis
The areas of customer and risk were investigated with a specific focus on Financial Crime (FC) remediation.
– Supported by external opinion, we concluded that while NPS had declined within Ulster Bank ROI over the
period, it was not considered to be due to factors which related to the 2018 award year or were within
management’s reasonable control.
– Although on risk there had been no material deterioration in risk culture or profile over the period, it was
felt appropriate that the management performance relating to FC remediation should be assessed using
the Risk & Control underpin.
(1) FSCB was formerly the Banking Standards Board. NatWest Group will cease to take part in the FSCB survey from 2022. Going forwards the LTI
pre vest test culture assessment will be assessed using Our View; NatWest Group’s internal colleague opinion survey.
Achievement of
‘threshold level
of sustainable
performance’ has
been evidenced.
No adjustment
proposed, subject
to the underpins
below.
Evidenced
by
Analysis
Potential underperformance?
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BRC assessment and recommendation to invoke the Risk & Control underpin
Following a detailed investigation by management, the BRC concluded that, while management had taken significant action to drive
delivery of the FC remediation programme, there had not been a full appreciation of the scale, complexity and interdependencies of
the programme at the time of the 2019 LTI grant which had resulted in technology and programme delays. This had led to target
dates being pushed out for critical deliverables to return within risk appetite, with such delays not being fully reflected at grant or
in subsequent grants. Following the steps above, the BRC recommended that the Committee consider applying the Risk & Control
underpin for the 2019 LTI awards.
Assessment by the Committee and final outcome (audited)
After considering the Risk & Control underpin and the organisational significance of the FC remediation programme alongside
the Group’s other priorities and performance in 2018, the Committee agreed that the awards of three individuals holding 2019 LTI
awards would be adjusted. Ross McEwan was viewed as having supervisory responsibility for the delivery of the FC remediation
programme and Alison Rose was considered to have had joint primary responsibility for the delivery of the programme, during
2018. The third individual, who is not currently an executive director and has not held such a role in the past, was also considered
to have joint primary responsibility for the programme in 2018. The Committee considered at length the differing level of
involvement of and responsibilities held by the three individuals, to ensure that fair and proportionate adjustments were made.
Mr McEwan received an LTI award of 625,712 shares out of a maximum of 663,633 shares in 2019 after the application of the
pre-grant performance assessment. Under the pre-vest assessment above, a further reduction of 5% of the maximum award was
applied using the Risk & Control underpin, resulting in a balance of 592,530 shares. Ms Rose received a 2019 LTI award of 568,829
shares following the pre-grant test, representing a 11.76% reduction from the maximum possible award. The Committee and the
Board agreed that a further reduction of 5% of Ms Rose’s 2019 LTI maximum award level would be appropriate using the Risk &
Control underpin, resulting in a balance of 536,595 shares. Applying a consistent reduction for Mr McEwan and Ms Rose was
considered to be appropriate as whilst Mr McEwan was not primarily responsible for the delivery of the programme, he continued
to play a significant role as Group CEO and was expected to provide clear line manager direction and oversight given the
importance of the FC remediation programme. These pre-vest reductions to the 2019 LTI awards of Mr McEwan and Ms Rose
resulted in a total reduction, based on their respective maximum 2019 LTI awards, of 11% for Mr McEwan and 17% for Ms Rose.
Further details on Mr McEwan’s arrangements can be found in the payments to past directors’ section.
Scheme interests – LTI awards granted during 2021 (audited)
Grant date Face value
Award
price
Shares
awarded
(1)
Vesting levels Performance requirements
Alison Rose – – – –
Between 0%
– 100% with
no set
minimum
vesting
The award was subject to a pre-grant assessment of
performance over 2020. A further assessment will take
place following the end of the 2023 financial year to
check that nothing has come to light that would
change the original decision. This assessment will
operate in a similar way to the framework for the 2019
LTI award pre-vest assessment, as set out above.
Katie
Murray
8 March
2021
£682,000 £1.6746 407,262
(1) An indicative PY 2020 award of £899k was approved in principle for Ms Rose. However, as Ms Rose confirmed in April 2020 that she did not wish to be considered for a 2021 LTI
award, due to the impact of COVID-19, she declined this award. The conditional share award granted to Ms Murray equates to c.91% of base salary. The number of shares was
calculated taking into account performance and the maximum potential award for Ms Murray. The award price was based on the average share price over five business days prior
to grant. Subject to the pre-vest assessment, these awards will vest in equal amounts between years 2024 and 2028. Service conditions and malus provisions apply up until vest, and
clawback provisions apply for a period of at least seven years from the date of grant.
Pre-grant assessment of performance in 2021 (for LTI awards to be granted in 2022)
For each of the core performance areas, the Committee considers whether the executive directors have achieved what would
reasonably have been expected of them over the performance year prior to grant. We use a robust process to review performance
against pre-set goals relevant to NatWest Group’s strategic aims for that year, but apply our judgment without a formulaic range
for vesting or mechanistic weightings. Risk & Control and Stakeholder Perception underpins also apply, under which we can
consider if there are any other factors that would lead to a downwards adjustment. The CFO’s performance was assessed in line
with the framework set out below and also with reference to the performance of the Finance function.
A further performance assessment will take place in early 2025 before any vesting takes place. This will operate in a similar way to
the pre-vest framework in place for the 2019 LTI awards, as described in detail on page 159. It will consider whether anything has
come to light that would indicate the assessment below did not represent a correct view of performance at that time.
Annual remuneration report continued
Risk & Control and Stakeholder Perception underpins
We use the underpins to give us scope to consider significant risk, stakeholder or reputational matters not already captured
in the performance assessment, taking into account advice from the BRC and the SBC. We can use the underpins to consider
events arising during the period between grant and the end of year three. Having reviewed the facts relating to management
performance with regard to FC remediation, and recognising its significance, BRC agreed it would be appropriate for the
Committee to consider an adjustment to 2019 LTI vest levels.
160 NatWest Group 2021 Annual Report and Accounts

Core strategic
areas
Measures and targets to assess pre-grant
performance
Performance against targets for 2021 Ratings
Scorecard
Financial &
Business Delivery
Purpose
alignment
Has a purpose
which delivers
long-term
sustainable
performance
Run a safe and secure bank
Achieve cost reduction target by reducing
other expenses, excluding operating lease
depreciation, by around 4% in comparison
to 2020. Priority
Achieve CET1 ratio targets for NatWest
Group of 15.3% and NWH Group of 14.5%,
with appropriate repatriation of capital to
NatWest Group. Priority
Above market rate net lending growth
across the retail and commercial businesses,
excluding UK Government financial support
schemes. Increase focus on climate lending.
Priority
Achieve RoTE target of 0.8% for NatWest
Group. Progress towards execution of
the NatWest Markets strategic review by
achieving the majority of the remaining RWA
reduction towards our medium-term target of
£20 billion by the end of 2021. Priority
NatWest Group cost savings were £256 million or
4.0% meaning the target has been met.
NatWest Group CET1 was 18.2% at year end and
exceeded the target. In the year, NatWest Group
made significant shareholder distributions. NWH
Group CET1 was 15.9% with appropriate capital
repatriation to NatWest Group, which also
exceeded the target.
Across the UK and RBSI retail and commercial
businesses, and excluding UK Government
support schemes, net lending increased by 2.6%.
Mortgage growth exceeded the market, however
commercial lending was behind market as we
have sought to reduce certain exposures, through
targeted sector reductions and capital actions,
whilst continuing to focus on supporting
customers through sustainable lending.
Significant outperformance on RoTE which was
9.4% for the year, benefiting from a significant
impairment release.
NatWest Markets did not achieve its 2021 RWA
reduction target.
Partially
met
Scorecard
Risk & Control
Purpose
alignment
Has a purpose
which delivers
long-term
sustainable
performance
Maintain a robust control environment
NatWest Group and NWH Group to achieve
a control environment rating of ‘2’, with
evidence to support progress against
regulatory responsibilities and priorities.
Compliance with minimum controls under
ring-fencing rules.
Priority
The control environment rating across NatWest
Group and NWH Group remained a ‘3’, meaning
the target was not met.
NatWest Group is materially compliant with
ring-fencing requirements. Internal arrangements
including frameworks, processes and controls
have been developed to facilitate demonstration
of compliance with the ring-fencing regime
Not met
Material progress towards our desired
risk culture
NatWest Group and NWH Group to each
achieve a ‘2’ systematic risk culture rating
as a minimum, with key Enterprise Wide
Risk Management Framework (EWRMF)
milestones delivered and decisions made
through application of a ‘purpose’ lens.
Priority
NWH Group risk culture has improved to
systematic. However at NatWest Group level, risk
culture is still assessed as being proactive and as
such the target has not been met.
Group key risk policies and key components of the
non-financial risk framework were delivered for
implementation on 1 January 2022 meaning the
EWRMF element of the risk culture measure was
achieved in line with target.
Partially
met
Scorecard
Customer &
Stakeholder
Purpose
alignment
Honest and fair
with customers
and suppliers
A good citizen
Meaningful increase in customer advocacy
Achievement of targets across the top four
customer journeys prioritised for 2021.
Aiming for Net Promoter Score (NPS)
improvement of:
– Six points for NatWest Account Opening
or be fourth or better;
– Two points for NatWest Commercial
Lending;
– Two points for NatWest Day-to-Day
Business Servicing.
Maintain NPS for NatWest Mortgages or
be second or better.
As at Q3 2021, customer NPS performance was
positive with targets met for two out of four
customer NPS journeys.
NatWest Account Opening NPS exceeded target
by six points, up 12 points year on year and
ranking third.
NatWest Lending NPS missed target by one point.
NatWest Day-to-Day Business Servicing has
exceeded its target by five points.
NatWest Mortgages NPS missed its target as a
result of dropping one point and dropping one
place to third.
Partially
met
161NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Core strategic
areas
Measures and targets to assess pre-grant
performance
Performance against targets for 2021 Ratings
Increase the likelihood that customers will
recommend our brands
Achievement of NPS targets for our core customer
facing businesses. Priority
Aiming for NPS improvement of:
– One point for NatWest Retail Main Bank or be fifth
or better;
– Four points for NatWest Business Banking and be
third or better; and
– Five points for Mid-Markets NPS or be first by
five points.
As at Q3 2021, customer NPS
performance has been positive with
targets met or exceeded for two out of
the three core customer facing businesses.
NatWest Retail main bank NPS exceeded
its target by five points, up six points year
on year. NatWest is now ranked third
compared to equal seventh a year ago.
NatWest Business Banking NPS missed
its target by two points and continues
to be ranked third. After a strong start
to the year, NPS flattened following
NatWest Group asking customers to pay
back their loans (in line with approach
advised by the Government), which
contributed to a change in sentiment.
NatWest Business Mid-Markets NPS
increased by four points but met target
by regaining first position and its lead
over the next best competitor.
Partially
met
Improve the financial capability of our customers,
colleagues and communities
Aiming to help an additional 500,000 customers to
start saving at least £100. Priority
NatWest Group to reach 3.2 million individuals
through agreed financial capability interactions.
We have supported an additional
471,000 customers to start saving
at least £100.
We have reached 6.1 million individuals
through financial capability interactions.
Partially
met
Remove barriers to UK enterprise growth
Support removal of barriers to UK enterprise growth
through networking and funding interventions.
Support 35,000 businesses through enterprise
programmes with 200,000 customer interactions to
help them start, run and grow a business. Priority
Support to be distributed:
– 75% to UK regions outside London and the
South East;
– 60% to females;
– 20% to Black, Asian and Minority Ethnic
individuals; and
– 10% to people intending to create
purpose-led businesses.
NatWest Group supported c.54,500
businesses through enterprise
programmes with c.200,000
(1)
customer interactions focused on
supporting businesses to start, run
and grow. Support was distributed:
– 79% to UK regions outside London
and the South East;
– 60% to females;
– 26% to Black, Asian and Minority
Ethnic individuals; and
– 52% to people intending to create
purpose-led businesses.
Met
A guardian for
future generations
To be a leading bank in helping to address the
climate challenge
Progress towards Climate Positive own operations
by 2025. Reduce carbon emissions from our direct
operational footprint by 25% of NatWest Group’s
2019 baseline position.
Providing £8 billion of funding and financing for
climate and sustainable finance in 2021.
Complete footprint estimate of 2019 total financed
emissions. Develop estimates aligned with the 2015
Paris Agreement for a further four sectors. Priority
Progress has continued to be made
against the carbon emissions target,
with NatWest Group exceeding the
target with a 46% reduction in
emissions in 2021.
Funding and financing for climate and
sustainable finance totalled £17.5 billion,
meaning the target has been exceeded.
NatWest Group has completed its footprint
estimate of 2019 total financed emissions.
We developed 2019 financed emissions
estimates for a further eight sectors,
meaning the target has been exceeded.
Exceeded
(1) Represents approximate number of interactions delivered by enterprise programmes during 2021 which is based upon data provided by third parties delivering these interactions
without further independent verification by NatWest Group.
Annual remuneration report continued
162 NatWest Group 2021 Annual Report and Accounts

Core strategic
areas
Measures and targets to assess pre-grant performance Performance against targets for 2021 Ratings
Scorecard
People & Culture
Purpose
alignment
A responsible
and responsive
employer
Build the capability of our colleagues to realise
their potential.
Achieving the capability targets as measured through
the ‘Our View’ colleague survey, NatWest Group to be
15 points above and NWH Group to be 16 points above
the Global Financial Services Norm.
NatWest Group and NWH Group
building capability scores both
missed the target by one point.
Not met
Build up and strengthen a healthy culture.
Achieving the culture targets as measured through the
Our View colleague survey. NatWest Group to be seven
points above and NWH Group to be eight points above
the FSCB. Priority
NatWest Group and NWH Group
culture scores both exceeded
the target by two points.
Exceeded
Embed our shared purpose across the business
and brands
Achieving the shared purpose target as measured
through the ‘Our View’ colleague survey. NatWest
Group and NWH Group to be six points above the
FSCB. Priority
NatWest Group and NWH Group
shared purpose scores exceeded
the target by three points and four
points respectively.
Exceeded
A diverse workforce and inclusive environment
To increase the percentage of females in the top three
layers of NatWest Group from 39% to 40% on aggregate.
To increase the percentage of Black, Asian and
Minority Ethnic UK employees in the top four layers
of NatWest Group from 10% to 11% on aggregate.
Achieving the inclusion target as measured through the
‘Our View’ colleague survey. NatWest Group and NWH
Group to be 13 points above the Global Financial
Services Norm.
The percentage of females in top
three layers of NatWest Group, in
aggregate, increased from 39% to 40%
as at Q3 2021, meaning the target has
been met.
The percentage of Black, Asian and
Minority Ethnic UK employees in the
top four layers of NatWest Group, in
aggregate, increased from 10% to 11%
as at Q3 2021, meaning the target has
been met.
The NatWest Group and NWH Group
inclusion index scores both exceeded
target by one point.
Met
Outcome of the pre-grant assessment for LTI awards to be granted in 2022 (audited)
In assessing performance against the above framework, the Committee also received advice from the BRC and the SBC in
making its final assessment. As part of its ‘performance in the round’ judgment, the Committee noted that targets had been met
or exceeded for five of the areas above, while five were partially met and two were missed, albeit narrowly in both cases. The
highlighted priority measures were a key focus for the Committee as it applied its judgment to assess performance for the year.
Alison Rose (audited)
Turning to individual performance, Ms Rose was considered to have had a strong year. NatWest Group’s underlying financial
performance was viewed as strong, which had resulted in significant shareholder distributions across 2021. Progress had been
made against NatWest Group’s Enterprise and Climate goals and NatWest Group’s contribution to COP26 was considered to have
been strong. People scores remained strong, despite a marginal ‘miss’ on building capability, and Customer scores were improved
in most areas. NatWest Group continued to be behind target on its Risk performance, although progress had been made in some
areas. Taking into account performance against the core goals as set out above, the Committee agreed an LTI award level of
£1,598,000 would be appropriate, which represents 145% of salary and 83% of the maximum LTI award. In order to ensure parity
of treatment with the wider workforce, the LTI outcome reflected an adjustment to mirror the downward adjustment to the 2021
bonus pool for the fine imposed by the FCA on NatWest Bank Plc for breaches of the Money Laundering Regulations 2007 and
ongoing FC remediation considerations.
163NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Katie Murray (audited)
Ms Murray’s performance was also considered to be strong in 2021, with highlights including her proactive engagement
with investors, the refresh of NatWest Group’s Annual Report and Accounts process and reporting frameworks and on scenario
modelling, with improvements having been delivered in forecasting capabilities. Ms Murray had shown excellent leadership on
the cost and investment agenda and had made progress on the Finance transformation agenda. In light of performance achieved,
the Committee agreed that an LTI award of £1,057,500 would be appropriate, which represents 141% of salary and 71% of the
maximum award available. In line with the approach taken for Ms Rose, the LTI outcome reflected an adjustment to mirror the
downward adjustment to the 2021 bonus pool for the fine imposed on NatWest Bank Plc for breaches of the Money Laundering
Regulations 2007 and ongoing FC remediation considerations.
Maximum award
Reduction
for pre- grant
performance
LTI award to be
made in 2022
Award level agreed
by Committee
(% of maximum)
Alison Rose £1,925,000 £327,000 £1,598,000 83%
Katie Murray £1,500,000 £442,500 £1,057,500 71%
Remuneration for the Chairman and non-executive directors
A change was made to the level of fees for the Group Performance and Remuneration Committee, with the Committee Chairman
receiving an increase from £60,000 to £68,000 per annum and members receiving an increase from £30,000 to £34,000 per annum
with effect from 1 July 2021. Committee fees had not changed since 2014 and the review took place after considering the time
commitment against the other NatWest Group Board Committees and market practice. The number of meetings remained
consistently high and was not expected to change due to the heavily-regulated nature of remuneration at large banks. The annual
engagement with our stakeholders on remuneration also required a significant amount of work, particularly for the Committee
Chairman. After reflecting on current and expected future time commitment, it was agreed to bring the rates in line with those
currently paid for the BRC and the Group Audit Committee. No directors are involved in decisions regarding their own remuneration.
The temporary increase in the fees for the Chairman of the CAP, to reflect additional engagement with the workforce due to
COVID-19, came to an end on 1 April 2021 with fees reverting from £30,000 to £15,000 per annum. For NatWest Group plc Board
directors who also serve on the Boards and Committees of NatWest Holdings Limited, National Westminster Bank Plc, The Royal
Bank of Scotland plc and Ulster Bank Limited, the fees below reflect membership of all five boards and their respective Board
Committees. Directors may also receive fees for membership of other subsidiary company Boards and Committees, the value
of which is included below. No variable pay is provided to the Chairman and non-executive directors.
Total remuneration for the Chairman and non-executive directors in 2021 (audited)
Fees Benefits
(1)
Total
Chairman (composite fee)
2021
£000
2020
£000
2021
£000
2020
£000
2021
£000
2020
£000
Howard Davies 750 750 13 12 763 762
Non-executive directors
Fees Benefits
(2)
Total
Board
£000
N&G
£000
GAC
£000
BRC
£000
RemCo
£000
SBC
£000
TIC
£000
SID
£000
CAP
£000
Other
£000
2021
£000
2020
£000
2021
£000
2020
£000
2021
£000
2020
£000
Frank Dangeard
(3)
262 262 260 1 1 263 261
Patrick Flynn 80 15 68 34 30 227 227 1 3 228 230
Morten Friis 80 15 34 68 197 168 22 7 219 175
Robert Gillespie 80 15 34 34 64 227 221 2 3 229 224
Yasmin Jetha 80 30 60 170 128 1 – 171 128
Mike Rogers 80 32 60 172 170 – 2 172 172
Mark Seligman 80 15 34 32 30 191 189 1 1 192 190
Lena Wilson 80 34 32 30 19 195 180 5 4 200 184
(1) The benefits column for Howard Davies, Chairman, includes private medical cover, life cover and expenses in connection with attendance at Board meetings. In April 2020, the
Chairman announced he would donate 25% of his fees for the rest of 2020 to the NET Coronavirus Appeal.
(2) Non-executive directors are reimbursed expenses incurred in connection with travel and attendance at Board meetings.
(3) Under the ‘Other’ column, Frank Dangeard received a composite fee as Chairman of the NatWest Markets Plc (NWM Plc) Board.
Key to table:
N&G Group Nominations and Governance Committee SBC Group Sustainable Banking Committee
GAC Group Audit Committee TIC Technology and Innovation Committee
BRC Group Board Risk Committee SID Senior Independent Director
RemCo Group Performance and Remuneration Committee CAP Colleague Advisory Panel
Annual remuneration report continued
164 NatWest Group 2021 Annual Report and Accounts

Payments for loss of office and payments to past directors (audited)
There were no payments for loss of office made to directors in 2021. Ross McEwan stepped down from the Board as CEO in
October 2019. Mr McEwan qualified for good leaver treatment meaning his outstanding LTI awards continue to vest on their
scheduled vesting dates and pro-rating does not apply. All awards remain subject to a performance assessment prior to vesting
and the potential application of malus and clawback provisions.
As set out earlier in this report, Mr McEwan received an LTI award of 625,712 shares in 2019 which was reduced to 592,530 shares
following the application of the pre-vest assessment and Risk and Control underpin. The remaining shares are due to vest between
2022 and 2026, subject to good leaver criteria continuing to be met. The value of the shares is £1,321,342 based on the average
share price over October to December 2021. A further disclosure will be made in next year’s report following the pre-vest
assessment of the final LTI award granted to Mr McEwan in 2020. In addition, Mr McEwan received assistance with his UK tax
return for his final year of employment with NatWest Group and a payment was made in relation to taxes incurred as a result of a
business trip to California while in employment, with payments totalling £10,700. There are no other payments to past directors to
disclose for 2021.
Implementation of remuneration policy in 2022
Pay arrangements
Both executive directors will receive LTI awards in March 2022 in respect of the 2021 performance year. You can find details of
these awards on page 164. Under the existing Policy, a salary increase of 2% has been agreed for executive directors from 1 April
2022, which is below the expected average salary increase for the wider global workforce of 3.6%. Subject to the new Policy being
approved by shareholders at the 2022 AGM, the revised annual pay arrangements that will apply from the date of the AGM for the
2022 performance year are set out below.
Salary
(1 Jan 2022)
Salary
(1 April 2022)
Standard
benefits
(1)
Pension
Fixed share
allowance
(2)
Maximum bonus
award for 2022
(3)
Maximum RSP award
for 2022
(4)
Alison Rose £1,100,000 £1,122,000 £26,250 10% of salary 100% of salary 85% of salary 125% of salary
Katie Murray £750,000 £765,000 £26,250 10% of salary 100% of salary 85% of salary 125% of salary
(1) Amounts shown relates to standard benefit funding. Executive directors are also entitled to travel assistance and security arrangements in line with the policy. We will disclose the value
of benefits received each year.
(2) Fixed share allowance is payable broadly in arrears, currently in four instalments per year. The first payment for January to March 2022 will be made under the existing Policy, with the
shares released in equal amounts over a three-year period. The remaining instalments for 2022 will be made under the new Policy, with shares released in equal amounts over a
five-year period.
(3) The maximum bonus award under the Policy is set at 100% of base salary, however, in the first year of implementation this will be limited to 85% of base salary as part of a phased
increase. The calculation of award maximum is based on salary earned over the year. As the salary increase is effective from 1 April, three months of the year will be based on existing
salary with nine months based on the post April salary. The annual bonus award is expected to vest at 50% where target performance is achieved across the scorecard.
(4) The maximum RSP award under the Policy will be set at 150% of base salary, however, in the first year of implementation this will be limited to 125% of base salary as part of a phased
increase. As per above, the calculation of maximum is based on salary earned over the year. The RSP award is normally expected to vest in full, subject to underpin criteria that will
ensure there is no payment for failure.
Annual bonus and RSP
Subject to being approved by shareholders at the 2022 AGM, the Policy on pages 143 to 147 will apply to the executive directors
from 2022. The Committee intends to implement the new Policy as follows.
Annual bonus
The 2022 bonus scorecard will be based on weighted performance measures and appropriately stretching targets across financial
and non-financial areas that align with our purpose-led strategy. For 2022, these will be apportioned as follows:
– Financial performance measures will represent 60% of the overall scorecard. Target ranges have been set in line with
the budget. A qualitative overlay will be applied to consider actual performance and how the outcome has been achieved.
Any M&A activity and performance versus the market will be considered in the final assessment;
– Non-financial measures will be focused across Climate, Customer, Purpose, Culture and People, Enterprise and Capability.
For 2022, these areas will represent an aggregate of 35% of the scorecard;
– Personal measures will represent 5% of the overall scorecard and the performance of each executive director will be based on
a discretionary assessment at year end; and
– A downward Risk modifier will also apply, enabling risk performance to be assessed and awards reduced, potentially to zero,
as required. This will be based on an assessment of:
– Annual risk performance assessment of Franchises/Functions/Legal Entities;
– Annual assessment of individual performance against executive director risk and control goals; and
– Qualitative behavioural observations from the Group Chief Risk Officer.
In the first year of implementation the annual bonus will be granted at a maximum value of 85% of base salary.
165NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Annual remuneration report continued
Annual bonus performance assessment under the new Policy for 2022
Threshold and maximum targets will be disclosed retrospectively at the end of the performance period in the 2022 Directors’
Remuneration Report, alongside the actual level of performance achieved and associated narrative. No award will be made if
threshold performance, as determined by the Committee, is not achieved.
The level of the award to be paid will vary between 10% for threshold performance and 100% for maximum performance. Target
performance will pay out at 50% of maximum opportunity.
All assessments of performance are subject to the Committee’s judgment to determine the appropriate outcome. Discretion will
only be used by the Committee when the application of the formulaic performance outcome drives an unrepresentative outcome or
when it is necessary to take into account strategic, economic or societal impacts that were not or could not have been accounted
for at the point of agreeing the bonus scorecard.
Annual bonus performance measure and targets for 2022
Category Performance measures Target Weighting
%
Financial
Go-forward group
(1)
ROTE. Targets set and the extent of their achievement will be disclosed
in the 2022 Annual Report as the Committee considers them to
be commercially sensitive at this point in time.
30%
Financial
(60%)
Underlying income growth of the
Go-forward group.
Income excluding notable items to exceed £11.0 billion in the
Go-forward group.
10%
Go-forward group operating expenses,
excluding litigation and conduct costs.
Around 3% cost reduction. 10%
Progress to medium-term capital target. CET1 ratio of around 14% post distributions. 10%
Non-Financial
Climate Progress towards halving
emissions for own direct
operations by 2025.
Funding and financing
committed to climate and
sustainable finance.
Develop climate transition
plan for publication.
Maintain 40% reduction in carbon emissions from our direct
operational footprint against 2019 baseline.
£17.5 billion of funding and financing for climate and sustainable
finance in 2022.
Development of NWG climate transition plan for publication with
the 2022 annual results.
10%
Strategic
(35%)
Customer Achieving Net Promoter
Score (NPS) targets on
an aggregated basis for
NatWest Group.
NPS improvement of:
– One point for NatWest Retail Banking or be 2nd or better
– Two points for NatWest Premier Banking
– One point for Coutts
– One point for NatWest Business Banking and be 3rd or better
– Two points for RBSI
Maintain NPS for NatWest Commercial & Corporate Banking and
maintain 1st position.
Achieve a Customer Touchpoint Rating of 70 for NatWest Markets
(2)
.
10%
Purpose,
Culture
and
People
Progress against
purpose targets.
Progress against
culture targets.
Number of females in
senior roles.
Black, Asian and Minority
Ethnic representation.
Maintain current purpose score of 90.
Maintain current culture score of 83.
Progression towards the achievement of our externally published
long-term target (2030) for gender of 50%. Increase percentage
of females in top three layers of the organisation to 41%.
Progression towards the achievement of our externally published
medium-term target (2025) for ethnicity of 15%. Increase
percentage of Black, Asian and Minority Ethnic colleagues in top
four layers of the organisation to 12%.
10%
166 NatWest Group 2021 Annual Report and Accounts

Enterprise
&
Capability
Support a Springboard to
Sustainable Recovery and
prioritise support for harder
to reach groups.
Encourage youth participation
in enterprise.
Increase number of customers
to save at least £100.
Number of financial capability
interactions which require
active engagement, give
knowledge or skills or
change behaviour.
Support 35,000 businesses through enterprise programmes with
250,000 customer interactions to start, run and grow a business.
Support being distributed as follows:
– 75% support to UK regions outside London & South East;
– 60% support to females;
– 20% support to Black, Asian and Minority Ethnic individuals;
– 20% to people intending to create purpose-led businesses.
30,000 young adults engaged in enterprise and
entrepreneurship activity.
Help an additional 530,000 customers to start saving.
Reach 4 million people through financial capability interactions.
5%
Personal
(5%)
Discretionary assessment at year end for
both executive directors.
CEO performance is based on recommendation from Chairman
taking into account additional individual performance factors.
CFO performance is based on recommendation from CEO taking
into account individual performance goals and the performance of
the Finance function.
5%
Risk
(0-100%)
Risk performance assessment based on
Group, NatWest Holdings, Functional
(CFO only) and individual risk performance.
Discretionary downwards modifier. 0
-100%
(1) Go-forward group excludes Ulster Bank RoI.
(2) As NPS is not available for the NatWest Markets business, an internal Customer Touchpoint Rating is applied to assess NatWest Markets’ customer performance.
RSP performance assessment under the new Policy for 2022
The new tests are simpler than those currently operated under the existing LTI-only construct. The RSP is bolstered by the annual
bonus, which ensures that executive directors are also incentivised to deliver on the key strategic priorities of NatWest Group, with
robust weighted performance measures as set out on the previous page. After the pre-grant test and underpin, the RSP would be
expected to pay out at 100% in the vast majority of cases to deliver the expected value under the construct. In the first year of
implementation, the RSP will be granted at a maximum value of 125% of base salary. This will rise to 150% of base salary in
the second year of the new Policy.
Pre-grant test
The first RSP award will be granted in early 2023. Executive directors will be granted an RSP award provided the Committee
considers performance over 2022 has been satisfactory, based on an assessment against our performance management framework.
Pre-vest underpin
RSP awards will not be subject to further performance conditions. However, before vesting, the Committee will review the
outcomes of the business against the following underpin criteria.
A sustainable level of performance over the period will be considered with reference to:
1. the level of capital held relative to the maximum distributable amount;
2. total distributions paid relative to our distribution policy; and
3. any material deterioration in the risk or regulatory compliance profile or control environment of NatWest Group, or a serious
conduct or reputational event.
The Committee will make an assessment at the end of the three-year performance period to determine whether sustainable
performance has been achieved. The Committee will refer to the above underpin criteria in determining whether this has been
the case. Following the Committee’s assessment, RSP awards may vest in full, in part or lapse in their entirety. The Committee will
also retain the right to consider other factors and apply discretion before making a decision on the final vesting outcome. This will
mitigate any potential unintended outcomes that might arise and ensure that there is a fair outcome. The Committee will explain
its reasons for applying discretion in either direction, or for not doing so. The Committee reserves the right to change the underpin
criteria when granting new RSP awards over the Policy period.
167NatWest Group 2021 Annual Report and Accounts
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Governance
Risk and capital management Additional informationFinancial statements

Annual remuneration report continued
Chairman and non-executive directors’ annual fees for 2022
Following a review of fees paid during 2021, the only change is to increase the fees for the Senior Independent Director role.
The rate will increase from £30,000 per annum to £34,000 per annum. This is closer to the fees paid for the equivalent role at
peer banks and also aligns with the rates currently being paid to members of the Group Board Risk Committee, the Group Audit
Committee and the Group Performance and Remuneration Committee. The change will apply from 1 January 2022 and is within
the limits allowed under the existing remuneration policy.
Fees for NatWest Group plc Board
(1)
Rates from
1 January 2022
Chairman (composite fee) £750,000
Non-executive director basic fee £80,000
Senior Independent Director £34,000
Fees for NatWest Group plc Board Committees
(1)
Member Chairman
Group Board Risk Committee £34,000 £68,000
Group Audit Committee £34,000 £68,000
Group Performance and Remuneration Committee £34,000 £68,000
Group Sustainable Banking Committee £30,000 £60,000
Technology and Innovation Committee £30,000 £60,000
Group Nominations and Governance Committee £15,000 –
Other fees for NatWest Group plc Board directors
Chairman of NatWest Markets Plc (composite fee to cover all boards and committees) £264,000
Chairman of the Colleague Advisory Panel £15,000
(1) No additional fees are payable where the director is also a member of the boards and respective board committees of NatWest Holdings Limited, National Westminster Bank Plc and
The Royal Bank of Scotland plc. Where appropriate, directors receive additional fees for membership of other subsidiary company boards and committees including NatWest Markets
Plc. We will disclose the value of fees received in this report each year.
125% of
base salary
85% of
base salary
Annual
bonus
perf.
assessment
period
RSP
pre-grant
perf.
period
Cash
vesting
Share
vesting
Grant
Given 60% of variable is in the RSP, there would normally
be no deferral requirements for the bonus
210% of base salary
(maximum variable pay for 2022)
Base salary Pension FSA
RSP
Post-vesting retention period
Bonus
Total Year 2030 203120292027 202820262025202420232022
100%
100%
10%
20%
20%
20%
20%
20%
20%
20%
Underpin
assessment
20%
Share
release
20%
20%
Structure and timing of payments under the new Policy for 2022
168 NatWest Group 2021 Annual Report and Accounts

Other external directorships
The Board must approve any additional appointments undertaken by directors outside NatWest Group. Steps are in place to
make sure that directors comply with regulatory limits on the number of directorships held. The Board also considers whether
it is appropriate for executive directors to retain any remuneration from any new external roles, depending on the appointment.
You can find details of current external appointments in the biographies section of the Corporate Governance report.
Annual change in directors’ pay compared to average change in employee pay
Remuneration for employees is based on salary, benefits and annual bonus. The CEO and CFO receive fixed share allowances
and are eligible for LTI awards rather than an annual bonus. The Chairman and non-executive directors receive fees rather than
salary and do not receive any variable pay. We regularly review membership of Board Committees and changes in membership will
impact the level of fees paid to non-executive directors from one year to the next. The benefits figures for non-executive directors
can also change significantly year on year depending on the amount of travel undertaken in connection with Board meetings.
2020 to 2021 2019 to 2020
Annual percentage change Salary Benefits
(1)
Annual Bonus Salary Benefits
(1)
Annual Bonus
UK employees
(2)
2.02% 4.68% 35.24% 2.86% 1.70% -32.4%
Executive directors
Alison Rose
(3)
0% 0% n/a – – n/a
Katie Murray 0% 0% n/a 0% 0% n/a
Chairman and non-executive directors Fees Benefits Annual Bonus Fees Benefits Annual Bonus
Howard Davies 0% 8% n/a 0% 9% n/a
Frank Dangeard 1% 0% n/a 0% -75% n/a
Patrick Flynn 0% -67% n/a 2% -70% n/a
Morten Friis 17% 214% n/a 14% -80% n/a
Robert Gillespie 3% -33% n/a -3% -84% n/a
Yasmin Jetha
(4)
33% 100% n/a – – n/a
Mike Rogers 1% -100% n/a 0% -83% n/a
Mark Seligman 1% 0% n/a -4% -88% n/a
Lena Wilson 8% 25% n/a 16% -64% n/a
(1) Standard benefit funding for executive directors has remained unchanged. The figures above excludes any other benefits to executive directors such as travel assistance in connection
with company business, the value of which is disclosed each year in the total remuneration table.
(2) NatWest Group plc is a holding company and is not an employing entity. Therefore the disclosure above is made on a voluntary basis to compare any change in directors’ pay with all
employees based in the UK. The data above is based on full-year average salary costs of UK based employees of NatWest Group, excluding the CEO and the CFO. This is considered
to be the most representative comparator group, as it covers the majority of employees and the CEO and CFO are based in the UK.
(3) Alison Rose, CEO, was appointed on 1 November 2019 and therefore the annual change comparison to 2020 is not relevant. No change has been made to Ms Rose’s salary over the
last two years.
(4) Yasmin Jetha re-joined the Board on 1 April 2020, so there is no comparison for the 2019 to 2020 annual change.
169NatWest Group 2021 Annual Report and Accounts
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Governance
Risk and capital management Additional informationFinancial statements

Annual remuneration report continued
CEO to employee pay ratios
The ratios compare the total pay of the CEO against the pay of three UK employees, whose earnings represent the lower,
median and upper quartiles of the UK employee population. A significant proportion of the CEO’s pay is delivered in LTI awards.
As these are linked to performance and share price movements, this part of the ratio can fluctuate significantly from one year to
the next. None of the three employees identified this year received LTI awards. Information based on salary only is included as a
further comparison.
The pay ratios reflect the diverse range of roles and pay levels across NatWest Group as a large financial services company. The
median employee for 2021 works in Services and the median pay ratio is consistent with the pay, reward and progression policies
for UK employees taken as a whole. We are committed to paying each individual a fair rate for the role performed, using consistent
reward policies and offering opportunities for progression. We set out further information on our fair pay approach earlier in this
report and in the supporting ESG Supplement at natwestgroup.com. The change in the median pay ratio since 2018 is largely
driven by the more volatile nature of pay for the CEO. In April 2020, the CEO decided to forgo 25% of her fixed pay for the rest of
the year which also contributed to the ratio falling in 2020 before returning to more typical levels in 2021. Based on a comparison
of salary only, the trend is more stable.
Pay ratios Remuneration values (£000)
Year Methodology
P25
(LQ)
P50
(Median)
P75
(UQ) Calculation CEO
Y25
(LQ)
Y50
(Median)
Y75
(UQ)
2018 A Total remuneration 143:1 97:1 56:1 Total remuneration 3,578 25 37 64
Salary only 44:1 30:1 19:1 Salary only 1,000 23 33 51
2019 A Total remuneration 175:1 118:1 69:1 Total remuneration 4,517 26 38 66
Salary only 44:1 30:1 19:1 Salary only 1,017 23 34 52
2020 A Total remuneration 99:1 66:1 39:1 Total remuneration 2,615 26 40 66
Salary only 46:1 31:1 20:1 Salary only 1,100 24 36 54
2021 A Total remuneration 130:1 87:1 51:1 Total remuneration 3,588 28 41 70
Salary only 44:1 29:1 20:1 Salary only 1,100 25 37 55
Supplementary information on the pay ratio table:
(1) The data for 2021 is based on remuneration earned by Alison Rose, as set out in the single figure of remuneration table in this report.
(2) The employees at the 25th, 50th and 75th percentiles (lower, median and upper quartiles) were determined as at 31 December of the relevant year, based on full-time equivalent
remuneration for all UK employees. This includes fixed pay (salary, pension funding and where relevant benefit funding and other allowances) and also any variable pay (based on the
amount to be paid). For employees who work part-time, fixed pay is grossed up to the full-time equivalent.
(3) ‘Option A’ methodology was selected as this is considered the most statistically accurate method under the reporting regulations. UK employees receive a pension funding allowance
set as a percentage of salary. Some employees, but not the CEO, continue to participate in the defined benefit pension scheme. Under this, it would be possible to recognise a higher
value, which would in turn reduce the ratios. However, for simplicity and consistency with regulatory disclosures, we have included the pension funding allowance value in the
calculation for all employees.
(4) The data for the three employees identified has been considered and fairly reflects pay at the relevant quartiles among the UK employee population. Each of the three individuals was
a full-time employee during the year and none received an exceptional award that would otherwise inflate their pay figure
Summary of remuneration levels for employees in 2021
49,171 employees earned total remuneration up to £50,000
12,678 employees earned total remuneration between £50,000 and £100,000
5,256 employees earned total remuneration between £100,000 and £250,000
790 employees earned total remuneration over £250,000
(1) For 2021, the disclosure of remuneration levels for employees includes anyone employed by NatWest Group during the year. This is a change of approach from previous years when
we only included colleagues employed at year end.
170 NatWest Group 2021 Annual Report and Accounts

Directors’ interests in NatWest Group plc shares (audited)
Under the existing shareholding requirements, the CEO and CFO need to build up and maintain shares to the value of 400% of
salary and 250% of salary respectively. The requirements apply both during employment and for two years after leaving, in line
with best practice. Procedures are in place to enforce the shareholding requirements, and you can find further details on page 147.
Subject to approval of the new Policy by shareholders at the 2022 AGM, the requirements will be increased to 500% of salary for
the CEO and 300% of salary for the CFO.
0 100 200 300 400 500 600 700
Alison Rose
Katie Murray
168%
316%
£1.1m
49%267%
501%59%442%
Values as percentage
of salary
Shares held outright
Shares awards still subject
to performance
Shares awards that count
towards requirement
Shareholding requirement
Share interests held by directors
Alison
Rose
Katie
Murray
Howard
Davies
Frank
Dangeard
Patrick
Flynn
Morten
Friis
(2)
Robert
Gillespie
Yasmin
Jetha
Mike
Rogers
Mark
Seligman
(3)
Lena
Wilson
Shares held
(1)
2,155,298 886,232 100,000 5,000 20,000 20,000 25,000 30,000 20,000 30,000 20,000
Shareholding requirement
400% of
salary
250% of
salary – – – – – – – – –
Position against requirement
501% of
salary
316% of
salary – – – – – – – – –
(1) Shares owned beneficially as at 31 December 2021 or at the date of stepping down from the Board if earlier. Includes shares held by persons closely associated with the directors. As
at 17 February 2022, there were no changes to the shares held as shown above. Share awards, as shown below, are also included for the purposes of the shareholding requirement
once any performance assessment has been completed. All share awards are included net-of-taxes due to be paid on vesting. The position against the requirement was calculated as
at 31 December 2021, at which point both executive directors exceeded the requirement based on the closing price of £2.257.
(2) The share interest held is over 10,000 American Depositary Receipts representing 20,000 ordinary shares.
(3) 10,000 shares are held in the name of M Seligman & Co Limited, of which Mr Seligman and Louise Seligman are shareholders.
Share awards under share plans
Year
Awards held
1 Jan 2021
Awards
granted
Award price
£
Awards
vested
Awards
lapsed
Awards
forfeited
Awards held
31 Dec 2021 Expected vesting dates
Alison Rose
LTI award 2016 100,780 2.26 100,780 0
LTI award 2017 223,677 2.41 55,919 167,758
(1)
07.03.22 – 07.03.24
LTI award 2018 488,906 2.66 92,140 28,206 368,560
(1)
07.03.22 – 07.03.25
LTI award 2019 568,829 2.64 568,829
(2)
07.03.22 – 07.03.26
LTI award 2020 881,679 1.70 881,679
(2)
07.03.23 – 07.03.27
2,263,871 248,839 28,206 1,986,826
Total LTI awards subject to service 536,318
(1)
Total LTI awards subject to performance and service 1,450,508
(2)
Katie Murray
LTI award 2016 9,142 2.26 9,142 0
Deferred award 2017 34,171 2.41 17,087 17,084
(1)
07.03.22
LTI award 2017 62,382 2.41 31,191 31,191
(1)
07.03.22
Deferred award 2018 80,387 2.66 26,796 53,591
(1)
07.03.22 – 07.03.23
Deferred award 2019 226,388 2.64 17,443 208,945
(1)
07.03.22 – 07.03.26
LTI award 2020 646,565 1.70 646,565
(2)
07.03.23 – 07.03.27
Sharesave 2020 3,200 1.12 3,200
(3)
18.12.23
LTI award 2021 407,262 1.67 407,262
(2)
07.03.24 – 07.03.28
1,062,235 407,262 101,659 1,367,838
Total LTI and deferred awards subject to service 310,811
(1)
Total LTI awards subject to performance and service 1,053,827
(2)
Total Sharesave options 3,200
(3)
(1) Performance assessment has taken place and awards remain subject to deferral and employment conditions before vesting. These awards count on a net of tax basis towards meeting
the shareholding requirement.
(2) Awards are subject to the LTI pre-vest performance assessment along with deferral and employment conditions before vesting. See earlier in this report for the pre-vest assessment of
the 2019 LTI award. The first vesting of this award is due to take place in March 2022, which will be reflected in next year’s table together with the shares lapsed for performance.
(3) Sharesave options enable colleagues to save from their salary with an option to buy shares at the end of the savings period. The award price is the price at which shares can be
bought. Sharesave options are normally exercisable for a period of six months from the maturity date at an option price that is discounted by up to 20% of the market value around the
time of the award.
171NatWest Group 2021 Annual Report and Accounts
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Governance
Risk and capital management Additional informationFinancial statements

Annual remuneration report continued
CEO pay over the same period
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Total remuneration (£000s)
(1)
AR 1,401 2,615 3,588
RM 393 1,878 3,492 3,702 3,487 3,578 4,066
SH 1,646 1,235
Annual bonus against
maximum opportunity SH 0% 0% n/a n/a n/a n/a n/a n/a n/a n/a
LTI vesting rates against
maximum opportunity
(2)
AR 60% 82% 83%
RM 73% 62% 56% 89% 41% 78%
SH 0% 0%
(1) CEOs are Alison Rose (AR), Ross McEwan (RM) and Stephen Hester (SH) with figures based on the single figure of remuneration for the relevant year.
(2) Maximum opportunity is set according to the approved policy and, for LTI awards granted in 2015 and onwards, the regulatory cap.
Relative importance of spend on pay
2021
£m
2020
£m Change
Remuneration paid to all employees
(1,2)
3,156 3,324 -5.05%
Distributions to holders of ordinary shares
(3)
693 – n/a
Distributions to holders of preference shares and paid-in equity 318 381 -16.5%
(1) Remuneration paid to all employees represents total staff expenses as per Note 3 to the consolidated financial statements, exclusive of social security and other staff costs.
(2) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(3) Dividends proposed for payment during 2020 were withdrawn in line with regulatory requirements. The Board has confirmed its intention to pay a dividend of 7.5p per ordinary share
in respect of financial year 2021, subject to approval by shareholders at the Annual General Meeting on 28 April 2022.
Total Shareholder Return (TSR) performance
The graph compares the TSR performance of NatWest Group with companies comprising the FTSE 100 Index over the last
10 years. We have selected this index because it represents a cross-section of leading UK companies. We have added the TSR
for FTSE UK banks for the same period as a further comparison. Source: Datastream
250
200
150
100
50
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
FTSE 100 FTSE UK Banks NatWest Group
Shareholder dilution and share sourcing
NatWest Group can use new issue, market-purchase or treasury shares to deliver shares that are required for employee share
plans. Best practice dilution limits are monitored and govern the number of shares that may be issued to satisfy share plan awards.
172 NatWest Group 2021 Annual Report and Accounts

Statement of shareholder voting
The tables below set out the latest resolutions to approve the Directors’ Remuneration Policy and the Annual remuneration report.
Directors’ Remuneration Policy – 2020 Annual remuneration report – 2021
Vote Number of shares Percentage Vote Number of shares Percentage
For 39,142,662,676 90.14% For 40,070,096,464 99.89%
Against 4,281,775,516 9.86% Against 42,368,132 0.11%
Withheld 12,426,752 – Withheld 1,371,168,504 –
The Group Performance and Remuneration Committee
Membership All members of the Committee are independent non-executive directors. In order to be considered for the
role of Committee Chairman, an individual must first have served on a remuneration committee for at least
12 months. During 2021, Robert Gillespie was the Committee Chairman. Frank Dangeard, Mike Rogers, Mark
Seligman and Lena Wilson were members. The Committee held eight scheduled meetings in 2021 and a
further three ad hoc meetings. You can find further details on members and attendance in the Corporate
Governance report on page 103.
Role of the
Committee
The Committee is responsible for:
– approving the remuneration policy for all colleagues and reviewing the effectiveness of its implementation;
– reviewing performance and making recommendations to the Board on arrangements for
executive directors;
– approving remuneration for a defined ‘in-scope’ population comprising members and attendees of the
Senior Executive Committees and direct reports of the CEO, control function heads and the Company
Secretary. The Committee also approves arrangements where individuals earn total compensation above
£1 million; and
– setting the remuneration framework and principles for colleagues identified as Material Risk Takers
(MRTs). The terms of reference (ToR) of the Committee are reviewed annually and available on
natwestgroup.com
Main activities
One of the main
activities of the
Committee was to
reflect on stakeholder
feedback on the new
Policy for executive
directors, and
developing revised
proposals as set out in
this report.
Wider workforce Executive remuneration Governance and regulatory
– Approving and overseeing
the NatWest Group-wide
Remuneration Policy.
– Considering how pay has been
allocated across the workforce,
including analysis by colleague
level, geography and diversity.
– Reviewing fixed pay proposals.
– Approving Sharesave offers
to colleagues.
– Reviewing performance over the
year and approving bonus pools
for the business areas.
– Reviewing gender and ethnicity
pay gap reporting.
– Reviewing performance
assessments and remuneration
arrangements for the
Committee’s ‘in scope’
population.
– Setting performance objectives
for Senior Executives for the
year ahead.
– Approving vesting and grant
levels for LTI awards.
– Approving remuneration for
senior hires and arrangements
for any leavers.
– Engaging with stakeholders
on our remuneration proposals.
– Reviewing and approving the
Directors’ Remuneration Report.
– Receiving benchmarking
data on executive pay and
peer practice.
– Approving agenda planners
and ensuring the Committee is
meeting all its obligations under
its ToR.
– Considering matters escalated
by other Board Committees and
subsidiary Performance and
Remuneration Committees.
– Overseeing the MRT
identification process.
– Approving submissions through
the year to the UK regulators.
– Receiving quarterly updates
on accountability reviews and
approving accountability
decisions for the population
within its governance.
– Carrying out the annual
evaluation of its performance.
173NatWest Group 2021 Annual Report and Accounts
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Governance
Risk and capital management Additional informationFinancial statements

Annual remuneration report continued
Operation of the
policy
The remuneration policy operated broadly as intended during the year, with adjustments made for
performance where appropriate. Some shareholders continued to express concerns with some parts of
the policy for executive directors, as explained earlier in this report, and the challenges in maintaining a
competitive level of pay for executive directors have heightened over the past year. This led the Committee
to believe that amendments should be proposed to shareholders at the 2022 AGM.
Managing conflicts To mitigate potential conflicts of interest, directors are not involved in decisions regarding their own
remuneration and the Committee rather than management appoint remuneration advisers. Attendees
also play an important role in advising the Committee but are not present when their own remuneration is
discussed. The Group Chief People & Transformation Officer may be present when discussions take place on
senior executive pay, as there is considerable benefit from her participation. However, she is never present
for discussions on her remuneration.
Committee Advisers PricewaterhouseCoopers LLP (PwC) was first appointed as remuneration adviser by the Committee in 2010
and reappointed in 2021, following an annual review of the quality of advice and the level of fees. PwC is a
signatory to the voluntary code of conduct in relation to remuneration consulting in the UK. The Committee
also took account of the views of the Chairman, the CEO, the CFO, the Group Chief HR Officer, the Group
Chief People & Transformation Officer, the Director of Reward & Employment, the Group Chief Risk Officer
and the Group Chief Audit Executive. The Committee also received input from the BRC, the GAC, the SBC
and the Performance and Remuneration Committees for the principal legal entities across NatWest Group.
The professional services PwC provides in the ordinary course of business include assurance, advisory,
tax and legal advice to NatWest Group subsidiaries. The Committee is satisfied that the advice received is
independent and objective. We also receive an annual statement setting out the protocols PwC has followed
to maintain independence. There are no connections between PwC and individual directors to be disclosed.
Fees paid to PwC for advising the Committee are based on a fixed fee structure with any exceptional items
charged on a time/cost basis. Fees for 2021 in relation to directors’ remuneration rose compared to last year
primarily due to additional work in relation to the new Policy, amounting to £211,041 in total excluding VAT
(2020 – £136,830 excluding VAT).
Performance
evaluation
The 2021 performance evaluation for the Committee was conducted externally by Independent Board
Evaluation. The Committee was considered to have managed a number of challenging items well in a
difficult year. It was noted there had been a number of unscheduled meetings, but on balance the
Committee recognised that additional discussions had been necessary.
The Committee requested the governance team to explore whether there was an opportunity to simplify
and streamline the remuneration governance framework, with it being noted that remuneration outcomes
currently flowed through a number of key legal entity performance and remuneration committees and board
risk committees.
Robert Gillespie
Chairman of the NatWest Group Performance and Remuneration Committee
17 February 2022
174 NatWest Group 2021 Annual Report and Accounts

Other remuneration disclosures
This section contains disclosures which are required in
accordance with UK regulatory requirements and the
Basel Committee on Banking Supervision Pillar 3 disclosure
requirements. They also take into account the European
Banking Authority (EBA) guidelines on sound remuneration
policies. It should be read in conjunction with the Directors’
remuneration report starting on page 136.
Remuneration policy for all colleagues
The remuneration policy supports the business strategy and is
designed to promote the long-term success of NatWest Group.
It aims to reward the delivery of good performance provided
this is achieved in a manner consistent with NatWest Group
values and within acceptable risk parameters.
The remuneration policy applies the same principles to
everyone, including Material Risk Takers (MRTs), with some
minor adjustments where necessary to comply with local
regulatory requirements. The main elements of the Policy
are set out below.
Base salary
The purpose is to provide a competitive level of fixed
cash remuneration.
Operation
We review base salaries annually to ensure they reflect the
talents, skills and competencies that the individual brings to
the business.
Role-based allowance
Certain MRT roles receive role-based allowances in order
to provide fixed pay that reflects the skills and experience
required for the role.
Operation
Role-based allowances are fixed allowances which form an
element of overall fixed remuneration for regulatory purposes.
They are based on the role the individual performs.
They are delivered in cash and/or shares depending on
the level of the allowance and the seniority of the recipient.
Shares are subject to a minimum three-year retention period.
Benefits and pension
The purpose is to provide a range of flexible and
competitive benefits.
Operation
In most jurisdictions, benefits or a cash equivalent are provided
from a flexible benefits account. Pension funding forms part
of fixed remuneration and NatWest Group does not provide
discretionary pension benefits.
Annual bonus
The purpose is to support a culture where individuals recognise
the importance of helping people, families and businesses to
thrive and are rewarded for superior performance.
Operation
The annual bonus pool is based on a balanced scorecard of
measures including financial and business delivery, customer,
people and culture, climate and risk and control measures.
Allocation from the pool depends on the performance of
the business area and the individual.
We use a structured performance management framework to
support individual performance assessment. This is designed to
assess performance against longer-term business requirements
across a range of financial and non-financial metrics. It also
evaluates adherence to internal controls and risk management.
We use a balanced scorecard to align with the business
strategy. Each individual will have defined measures of
success for their role.
We also take risk and conduct performance into account.
Control functions are assessed independently of the business
units that they oversee. Objectives and remuneration are set
according to the priorities of the control area, not the targets
of the businesses they support. The Group Chief Risk Officer
and the Chief Audit Executive have the authority to
escalate matters to Board level if management do
not respond appropriately.
Independent control functions exist for the main legal entities
outside the ring fence (NWM Plc and RBSI). Dual solid reporting
lines are in place into the respective legal entity CEOs and the
NatWest Group Control Function Heads.
Awards may be granted up to a maximum of 100% of fixed
pay. For awards made in respect of the 2021 performance
year, immediate cash awards continue to be limited to a
maximum of £2,000. In line with regulatory requirements for
MRTs, 40% of awards under £500,000 will be deferred over
four, five or seven years. This rises to 60% for awards over
£500,000. For MRTs, a minimum of 50% of any variable pay
is delivered in shares and a 12-month retention period applies
to the shares after vesting.
The deferral period is four years for standard MRTs and Risk
Manager MRTs who meet the ‘non-higher paid’ condition. It
rises to five years for ‘higher paid’ Risk Manager MRTs, FCA
Senior Management Functions (SMF) roles and PRA SMFs who
meet the ‘non-higher paid’ condition; and to seven years for
‘higher paid’ PRA SMFs. All awards are subject to malus and
clawback provisions.
Long-term incentive (LTI) awards
The purpose and operation of LTI awards is explained in detail
in the Directors’ remuneration report. Instead of an annual
bonus, NatWest Group provides executive directors and certain
members of NatWest Group’s senior executive committees with
LTI awards. Any awards made are subject to a performance
assessment prior to grant and again prior to vesting.
Shareholding requirements
The requirements promote long-term alignment between
senior executives and shareholders.
175NatWest Group 2021 Annual Report and Accounts
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Other remuneration disclosures continued
Operation
Executive directors and certain members of NatWest Group’s
senior executive committees are required to build up and hold
a shareholding equivalent to a percentage of salary. There is
a restriction on the number of shares that individuals can sell
until this requirement is met.
Company share plans
The purpose is to provide an easy way for individuals to
hold shares in NatWest Group plc, which helps to encourage
long-term thinking and provides a direct involvement in
NatWest Group’s performance.
Operation
Colleagues in certain jurisdictions are offered the opportunity
to contribute from salary and acquire shares in NatWest Group
plc through company share plans. This includes Sharesave and
the Buy As You Earn plan in the UK. Any shares held are not
subject to performance conditions.
Criteria for identifying MRTs
The EBA has issued criteria for identifying MRT roles, which
includes those staff whose activities have a material influence
over NatWest Group’s performance or risk profile. These
criteria are both qualitative (based on the nature of the role)
and quantitative (based on the amount a colleague is paid).
In 2021, MRTs were identified for 11 legal entities (including
at parent holding company and consolidated levels) within
NatWest Group. The MRT criteria are applied for each of these
entities, and consequently many MRTs are identified in relation
to more than one entity.
The qualitative criteria can be summarised as: staff within
the management body; senior management; other staff with
key functional or managerial responsibilities including for
risk management; and staff who individually, or as part of a
Committee, have authority to approve new business products
or to commit to credit risk exposures and market risk
transactions above certain levels.
The quantitative criteria are: individuals earning £658,000
or more in the previous year; individuals earning less than
£658,000 in the previous year, but more than a threshold set
at the higher of £440,000 or the average total earnings of the
management body and senior management for the relevant
legal entity and who can impact the risk profile of a material
business unit; and individuals in the top 0.3% of earners of
the relevant legal entity for the previous year. In addition to
the qualitative and quantitative criteria, NatWest Group has
applied its own minimum standards to identify roles that are
considered to have a material influence over its risk profile.
Personal hedging strategies
The conditions attached to discretionary share-based awards
prohibit the use of any personal hedging strategies to lessen
the impact of a reduction in the value of such awards.
Recipients explicitly acknowledge and accept these
conditions when any share-based awards are granted.
Risk in the remuneration process
NatWest Group’s approach to remuneration promotes effective
risk management through having a clear distinction between
fixed remuneration (which reflects the role undertaken by an
individual) and variable remuneration (which is directly linked
to performance and can be risk-adjusted). Fixed pay is set at
an appropriate level to discourage excessive risk-taking and
which would allow NatWest Group to pay zero variable pay.
We achieve focus on risk through clear inclusion of risk in
performance goals, performance reviews, the determination
of variable pay pools, incentive plan design and the application
of malus and clawback. The Committee is supported in this by
the Group Board Risk Committee (BRC) and the Risk function,
as well as independent oversight by the Internal Audit function.
We use a robust process to assess risk performance. We
consider a range of measures, specifically: capital, liquidity and
funding risk; credit risk; market risk; pension risk; compliance
and conduct risk; financial crime; climate risk; operational risk;
business risk and reputational risk. We also consider our overall
risk culture.
Remuneration arrangements are in line with regulatory
requirements and we fully disclose and discuss the steps taken
to ensure appropriate and thorough risk adjustment with the
PRA and the FCA.
Variable pay determination
For the 2021 performance year, NatWest Group operated
a robust control function-led, multi-step process to assess
performance and determine the appropriate bonus pool by
business area and function. At multiple points throughout the
process, we made reference to NatWest Group-wide business
performance (from both affordability and appropriateness
perspectives) and the need to distinguish between ‘go-forward’
and ‘resolution’ activities.
The process uses financial, climate, customer and people
measures to consider a balanced scorecard of performance
assessments at the level of each business area or function.
We then undertake risk and conduct assessments at the same
level to ensure performance achieved without appropriate
consideration of risk, risk culture and conduct controls, is
not inappropriately rewarded.
BRC reviews any material risk and conduct events and, if
appropriate, an underpin may be applied to the individual
business and function bonus pools or to the overall bonus
pool. BRC may recommend a reduction of a bonus pool if it
considers that risk and conduct performance is unacceptable
or that the impact of poor risk management has yet to be fully
reflected in the respective inputs.
Following further review against overall performance
and conduct, taking into account input from the CFO on
affordability and capital and liquidity adequacy, the CEO will
make a final recommendation to the Committee, informed by
all the previous steps and her strategic view of the business.
The Committee will then make an independent decision on the
final bonus pool taking all of these earlier steps into account.
176 NatWest Group 2021 Annual Report and Accounts

The assessment process for LTI awards to executive directors
and other recipients is also founded on a balanced scorecard
approach. The scorecard is aligned with the multi-step bonus
pool process, reflecting a consistent risk management
performance assessment.
Remuneration and culture
NatWest Group continues to assess conduct and its impact
on remuneration as part of the annual Group-wide bonus pool
process and also via the accountability review framework.
Many colleagues receive fixed pay only, which provides them
with greater security and allows them to fully focus on the
needs of the customer. The Committee will continue to review
workforce remuneration and the alignment of incentives and
reward with culture.
The governance of culture is clearly laid out. SMF roles
have clearly defined accountabilities. The delivery of these
accountabilities is taken into account in their performance
and pay decisions. The Board and Group Sustainable Banking
Committee (SBC) also play essential roles in building cultural
priorities. Frameworks are in place to measure progress.
Accountability review process and
malus/clawback
We introduced the accountability review process in 2012 to
identify any material risk management, control and general
policy breach failures, and to ensure accountability for
those events.
This allows NatWest Group to respond to instances where new
information would change the variable pay decisions made in
previous years and/or the decisions to be made in the current
year. Potential outcomes under the accountability review
process are:
– malus – to reduce (to zero if appropriate) the amount
of any unvested variable pay awards prior to payment;
– clawback – to recover awards that have already vested;
and
– in-year bonus reductions – to adjust variable pay that
would have otherwise been awarded for the current year.
As part of the acceptance of variable pay awards, colleagues
must agree to terms that state that malus and clawback may
be applied. Any variable pay awarded to MRTs is subject to
clawback for seven years from the date of grant. Since the
2016 performance year onwards, this period can be extended
to 10 years for MRTs who perform a SMF role under the
Senior Managers Regime where there are outstanding internal
or regulatory investigations at the end of the normal seven-
year clawback period. Awards to other colleagues (non-MRTs)
are subject to clawback for 12 months from each vesting date.
You can read more about the circumstances in which malus,
clawback or in-year bonus reduction may be applied on
page 157.
During 2021 a number of issues and events were considered
under the accountability review framework. The outcomes
covered a range of actions including reduction (to zero where
appropriate) of unvested awards through malus and the
suspension of awards pending further investigation.
Remuneration of MRTs
The quantitative disclosures below are made in accordance
with regulatory requirements in relation to 846 individuals who
have been identified as MRTs for one or more entities across
NatWest Group plc. The number of MRTs identified has
decreased since last year due to a reduction in credit
‘initiators’ and changes in credit authorities.
We have excluded two individuals from the tables below on
the basis that, although they have been identified as an MRT in
relation to a role within a subsidiary entity, they do not receive
any remuneration for this role and are not an MRT in relation
to their primary role for NatWest Group.
You can find details of remuneration paid to MRTs in Pillar 3
reporting on a consolidated, sub-consolidated and solo entity
level at natwestgroup.com.
177NatWest Group 2021 Annual Report and Accounts
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Other remuneration disclosures continued
Total remuneration awarded to MRTs for the financial year
Other senior management and other MRTs
split by business area
NatWest
Group plc
NEDs
NatWest
Group plc
EDs
Other
senior
mngt.
Other
MRTs
NatWest
Holdings
NatWest
Markets RBSI
Corporate
functions
Control
functions Total
Fixed remuneration
(1)
Total number of MRTs 9 2 18 817 846
Other senior management – split by
business area 3 1 1 7 6
Other MRTs – split by business area 181 128 22 105 381
£m £m £m £m £m £m £m £m £m £m
Total fixed remuneration of MRTs 2.40 3.94 16.48 186.99 42.57 57.16 3.94 34.50 65.30 209.81
Cash-based 2.40 2.09 13.97 185.77 41.76 55.76 3.79 34.02 64.39 204.23
Share-based – 1.85 2.51 1.22 0.81 1.39 0.15 0.48 0.91 5.58
Other instruments or forms – – – – – – – – – –
Variable remuneration
(2)
Total number of MRTs – 2 16 661 679
Other senior management – split by
business area 3 1 1 7 4
Other MRTs – split by business area 142 94 17 79 329
£m £m £m £m £m £m £m £m £m £m
Total variable remuneration of MRTs – 2.65 9.99 76.28 18.86 27.27 2.17 15.44 22.52 88.92
Cash-based – – 1.25 40.52 8.82 13.29 0.88 7.36 11.41 41.77
Of which: deferred cash – – 0.55 15.05 3.08 5.87 0.25 2.97 3.43 15.60
Share-based (annual bonus) – – 1.24 35.76 7.57 13.23 0.63 7.14 8.43 37.00
Of which: deferred shares – – 0.55 15.05 3.08 5.87 0.25 2.97 3.43 15.60
Share-based (LTI awards) – 2.65 7.50 – 2.46 0.75 0.66 0.94 2.69 10.15
Of which: deferred shares – 2.65 7.50 – 2.46 0.75 0.66 0.94 2.69 10.15
Other instruments or forms – – – – – – – – – –
Total remuneration of MRTs 2.40 6.59 26.47 263.27 61.43 84.43 6.11 49.94 87.82 298.73
(1) Fixed remuneration consists of salaries, allowances, pension and benefit funding.
(2) Variable remuneration consists of a combination of annual bonus and long-term incentive awards, deferred over a four to seven year period in accordance with regulatory
requirements. Under the NatWest Group bonus deferral structure, immediate cash awards are limited to £2,000 per person, with a further payment of cash and shares within Year 0.
(3) Long-term incentive awards vest subject to the extent to which performance conditions were met and can result in zero payment.
(4) Under CRD V regulations, a notional discount is available which allows variable pay to be awarded at a level that would otherwise exceed the 1:1 ratio, provided that variable pay is
delivered ‘in instruments’ (shares) and deferred over five years or more. The discount rate was not used for remuneration awarded in respect of the 2021 performance year.
Derogations
The regulations allow some flexibility not to apply certain requirements that would normally apply to MRTs where an individual’s
annual variable remuneration does not exceed £44,000 and does not represent more than one third of the individual’s total annual
remuneration (derogations permitted under point (b) of Article 94(3) of CRD V). We have used this flexibility to disapply MRT rules
relating to deferral and delivery of awards in shares for 274 MRTs in respect of the performance year 2021. Total remuneration
for these individuals in 2021 was £35.88 million (of which £31.16 million was fixed pay and £4.72 million was variable pay).
Ratio between fixed and variable remuneration
The variable component of total remuneration for MRTs at NatWest Group shall not exceed 100% of the fixed component (except
where local jurisdictions apply a lower maximum ratio for variable pay). The average ratio between fixed and variable remuneration
for 2021 was approximately 1 to 0.42. The majority of MRTs were based in the UK.
178 NatWest Group 2021 Annual Report and Accounts

Outstanding deferred remuneration
The table below includes deferred remuneration awarded or paid out in 2021 relating to prior performance years.
Deferred and retained remuneration
Total amount
of deferred
remuneration
awarded for
previous
performance
periods
£m
Of which: due
to vest in the
financial year
£m
Of which:
vesting in
subsequent
financial years
£m
Amount of
performance
adjustment
to deferred
remuneration
that was due to
vest in the
financial year
£m
Amount of
performance
adjustment
to deferred
remuneration
due to vest in
future financial
years
£m
Total amount
of adjustment
during the
financial year
due to ex post
implicit
adjustments
(1)
£m
Total amount
of deferred
remuneration
awarded before
the financial
year actually
paid out in the
financial year
£m
Total amount
of deferred
remuneration
awarded for
previous
performance
period that has
vested but is
subject to
retention
£m
NatWest Group plc NEDs – No deferred or retained remuneration held
NatWest Group plc EDs
Cash-based – – – – – – – –
Shares or equivalent interests 7.23 0.88 6.36 (0.01) (0.06) 1.93 0.86 0.36
Other instruments or forms – – – – – – – –
Other senior management
Cash-based – – – – – – – –
Shares or equivalent interests 18.46 3.08 15.37 – – 4.96 3.09 2.04
Other instruments or forms – – – – – – – –
Other MRTs
Cash-based – – – – – – – –
Shares or equivalent interests 91.65 38.97 52.68 0.17 – 24.75 38.32 34.67
Other instruments or forms – – – – – – – –
Total amount 117.34 42.93 74.41 0.16 (0.06) 31.64 42.27 37.07
(1) i.e. Changes of value of deferred remuneration due to the changes of prices of instruments.
(2) Deferred remuneration reduced during the year relates to long-term incentives that lapsed when performance conditions were not met, long-term incentives and deferred awards
forfeited on leaving and malus adjustments of prior year deferred awards and long-term incentives.
179NatWest Group 2021 Annual Report and Accounts
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Guaranteed awards (including ‘sign-on’ awards) and severance payments
Special payments
NatWest Group
plc NEDs
NatWest Group
plc EDs
Other senior
management Other MRTs
Guaranteed awards and sign on awards
Number of MRTs – – 1 2
£m £m £m £m
Total amount – – 0.12 0.26
Of which: paid during the financial year that are not taken into account in the
bonus cap – – – –
Severance payments awarded in previous periods,
paid out during the financial year
Number of MRTs – – 2 10
£m £m £m £m
Total amount – – 0.42 2.17
Severance payment awarded during the financial year
Number of MRTs – – 2 57
£m £m £m £m
Total amount – – 0.26 12.10
Of which: paid during the financial year – – 0.26 11.31
Of which: deferred – – – 0.79
Of which: paid during the financial year that are not taken into account in the
bonus cap – – 0.26 12.10
Of which: highest payment that has been awarded to a single person – – 0.16 0.77
(1) NatWest Group does not offer sign-on awards. Guaranteed awards may only be granted for new hires in exceptional circumstances in compensation for awards forgone on their
previous company and are limited to first year of service.
(2) Severance payments and/or arrangements can be made to colleagues who leave NatWest Group in certain situations, including redundancy. Such payments are calculated by a
pre-determined formula set out within the relevant social plans, policies, agreements or local laws. Where local laws permit, there is a cap on the maximum amount that can be paid.
(3) No severance payments in excess of contractual payments, local policies, standards or statutory amounts were made to MRTs during the year, other than payments to five individuals
totalling £522,373. There were four non-standard payments totalling £443,973 in relation to litigation and one non compete payment of £78,410.
Total remuneration by band for all colleagues earning >€1million
2021 Number of MRTs
€1.0 million to below €1.5 million 42
€1.5 million to below €2.0 million 14
€2.0 million to below €2.5million 6
€2.5 million to below €3.0 million –
€3.0 million to below €3.5 million 1
€3.5 million to below €4.0 million –
More than €4.0 million –
Total 63
(1) Total remuneration in the table above includes fixed pay, pension and benefit funding and variable pay.
(2) Where applicable, the table is based on an average exchange rate of €1.163 to £1 for 2021.
Colleagues who earned total remuneration of over €1 million in 2021 represent 0.09% of the workforce. These individuals include
those who manage major businesses and functions with responsibility for significant assets, earnings or areas of strategic activity
and can be grouped as follows:
– The CEOs responsible for each area and their direct reports.
– Those who manage large business areas.
– Income generators responsible for high levels of income including those involved in managing trading activity and supporting
clients with more complex financial transactions, including financial restructuring.
– Those responsible for managing balance sheet and liquidity and funding positions across the business.
Other remuneration disclosures continued
180 NatWest Group 2021 Annual Report and Accounts

Compliance report
Statement of compliance
NatWest Group plc is committed to high standards of
corporate governance, business integrity and professionalism
in all its activities.
Throughout the year ended 31 December 2021, NatWest
Group plc has applied the Principles and complied with all of
the Provisions of the UK Corporate Governance Code issued
by the Financial Reporting Council dated July 2018 (the ‘Code’)
except in relation to:
– Provision 17, in respect of the requirement that the Group
Nominations and Governance Committee should ensure
plans are in place for orderly succession to both the
Board and senior management positions and oversee
the development of a diverse pipeline for succession; and
– Provision 33 that the Group Performance and Remuneration
Committee (Group RemCo) should have delegated
responsibility for setting remuneration for the Chairman
and executive directors.
In respect of Provision 17, whilst the Board is supported on
board succession by the Group Nominations and Governance
Committee, the Board considers this is a matter of significant
importance which should rightly be reserved for the full Board.
Adopting this approach ensures that all directors have an
opportunity to contribute to succession planning discussions
for Board and senior management, in support of achieving
an appropriate balance of skills, experience, knowledge and
diversity at senior levels within NatWest Group and on the
Board. It also means that all directors have an opportunity to
review, consider and become familiar with the next generation
of executive leaders.
The Board does not anticipate any changes to its approach on
these aspects of the Code.
Further information on how NatWest Group plc has applied the
Principles, and complied with the Provisions, of the Code can
be found in the Corporate governance section of this report,
which includes cross-references to relevant sections of the
Strategic report and other related disclosures.
NatWest Group plc has complied in all material respects with
the Financial Reporting Council Guidance on Audit Committees
issued in September 2012 and April 2016.
Under the US Sarbanes-Oxley Act of 2002, specific standards
of corporate governance and business and financial disclosures
and controls apply to companies with securities registered in
the US. NatWest Group plc complies with all applicable sections
of the US Sarbanes-Oxley Act of 2002, subject to a number of
exceptions available to foreign private issuers.
Internal control
The Board of Directors is responsible for the system of internal
controls that is designed to maintain effective and efficient
operations, compliant with applicable laws and regulations.
The system of internal controls is designed to manage, or
mitigate, risk to an acceptable residual level rather than
eliminate it entirely. Systems of internal control can only
provide reasonable and not absolute assurance against
material misstatement, fraud or loss.
Ongoing processes for the identification, evaluation and
management of the principal risks faced by NatWest Group
operated throughout the period from 1 January 2021 to 17
February 2022, the date the directors approved the Annual
Report and Accounts. These included the semi-annual Control
Environment Certification process, which requires senior
members of the executive and management to assess the
adequacy and effectiveness of their internal control
frameworks and certify that their business or function is
compliant with the requirements of Sarbanes-Oxley Section
404 and the UK Corporate Governance Code. The policies
that govern these processes – and reports on internal controls
arising from them – are reviewed by the Board and meet the
requirements of the Financial Reporting Council’s Guidance on
Risk Management Internal Control and Related Financial and
Business Reporting.
NatWest Group operates a three lines of defence model, which
provides an effective apportionment of responsibilities and
accountabilities across the organisation. As part of its second
line of defence role, the Risk oversight function exercises
oversight and challenge of the risk management activities
undertaken by the first line of defence, which is responsible for
designing, implementing and maintaining effective processes,
procedures and controls to mitigate risks within risk appetite.
The Internal Audit function, which is the third line of defence,
undertakes independent and objective assurance activities and
provides reports to the Board and executive management on
the quality and effectiveness of governance, risk management
and internal controls to monitor, manage and mitigate risks in
achieving NatWest Group’s objectives.
The effectiveness of NatWest Group’s internal controls is
reviewed regularly by the Board, the Group Audit Committee
and the Group Board Risk Committee. In addition, the Board
receives a risk management report at each scheduled Board
meeting. Executive management committees in each of
NatWest Group’s businesses also receive regular reports on
significant risks facing their business and how these are being
controlled. Details of the bank’s approach to risk management
are given in the Risk & Capital Management section of the
Annual Report and Accounts.
181NatWest Group 2021 Annual Report and Accounts
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Governance
Risk and capital management Additional informationFinancial statements
In respect of Provision 33, the Board also considers that this is
a matter which should rightly be reserved for the Board and
this is an approach the Board has adopted for a number
of years. Remuneration for the executive directors is first
considered by the Group RemCo which then makes
recommendations to the Board for consideration. This
approach allows all non-executive directors, and not just
those who are members of the Group RemCo, to participate
in decisions on the executive directors’ and the Chairman’s
remuneration and also allows the executive directors to input
to the decision on the Chairman’s remuneration. The Board
believes this approach is very much in line with the spirit of the
Code and no director is involved in decisions regarding his or
her own remuneration. A copy of the Code can be found at
frc.org.uk.

Compliance report continued
While work continues to enhance the control environment
relating to financial crime risk, operational weaknesses
between 2012 and 2016 resulted in the inadequate monitoring
of a UK-incorporated NatWest Bank Plc customer. Regulations
require risk-sensitive ongoing monitoring of customers for the
purposes of preventing money laundering. NatWest Bank Plc
co-operated fully with the regulator’s investigation into this
case and, in October 2021, pleaded guilty to three breaches
of the Money Laundering Regulations 2007. NatWest Group
takes its responsibility to prevent and detect financial crime
extremely seriously and continues to make significant multi-
year investments to strengthen and improve its overall financial
crime framework with prevention systems and capabilities.
Almost £700 million has been invested in the last five years,
including upgrades to transaction monitoring systems,
automated customer screening and new customer due
diligence solutions.
NatWest Group continued to make enhancements to other
aspects of the wider control environment in 2021. This has
included the management of delivery of regulated programmes
such as the IRB programme, as required by Prudential
Regulatory Authority (PRA) and the European Banking
Authority (EBA). NWG continued to focus on the embedding of
a strong risk culture to support a robust control environment.
The remediation of known control issues continued to be an
important focus for both the Group Audit Committee and the
Board Risk Committee during 2021. For further information
on their oversight of remediation of the most significant issues,
please refer to the Report of the Group Audit Committee
and the Report of the Group Board Risk Committee. As part
of its activities, the Group Audit Committee has received
confirmation that management has taken, or is taking, action
to remedy significant failings or weaknesses identified through
NatWest Group’s control framework.
While not being part of the bank’s system of internal control,
the Group’s independent auditors present to the Group Audit
Committee reports that include details of any significant
internal control deficiencies they have identified. Further,
the system of internal controls is also subject to regulatory
oversight in the UK and overseas. Additional details of
regulatory oversight are given in the Risk & Capital
Management section.
While several planned activities designed to enhance the
control environment were disrupted by the extensive impact of
COVID-19 (thereby delaying the achievement of the NatWest
Group’s control environment target), the control environment
remained largely stable in 2021. There was continuing
management focus on the delivery of regulatory programmes
– including the internal transformation programme established
in response to updated IRB regulation from the Prudential
Regulatory Authority (PRA) and the European Banking
Authority (EBA) – as well as a review of the controls and
processes relating to certain regulatory reporting. There was
also significant focus on work to enhance controls relating to
financial crime risks – including ongoing work to strengthen
customer due diligence standards. The focus of the of NatWest
Group in establishing and maintaining a robust risk culture made
a valuable contribution to the overall control environment.
The remediation of known control issues remained a focus
of the Group Audit Committee and the Group Board Risk
Committee during 2021. For further information on their
oversight of remediation of the most significant issues, please
refer to the Report of the Group Audit Committee and the
Report of the Group Board Risk Committee. The Group Audit
Committee has received confirmation that management has
taken, or is taking, action to remedy significant failings or
weaknesses identified through NatWest Group’s control
framework. The Group Audit Committee and the Group Board
Risk Committee will continue to focus on such remediation
activity, particularly in view of the transformation agenda.
While not being part of the Group’s system of internal control,
the Group’s independent auditors present to the Group Audit
Committee reports that include details of any significant
internal control deficiencies they have identified. Further,
the system of internal controls is also subject to regulatory
oversight in the UK and overseas. Additional details of
regulatory oversight are given in the Risk and capital
management section.
Internal control over financial reporting
NatWest Group plc is required to comply with Section 404
of the US Sarbanes-Oxley Act of 2002 and assess the
effectiveness of internal control over financial reporting
as of 31 December 2021.
NatWest Group has assessed the effectiveness of its internal
control over financial reporting as of 31 December 2021 based
on the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in the 2013
publication of ‘Internal Control – Integrated Framework’.
Based on its assessment, management has concluded that, as
of 31 December 2021, NatWest Group’s internal control over
financial reporting is effective.
NatWest Group’s auditors have audited the effectiveness of
NatWest Group’s internal control over financial reporting and
have given an unqualified opinion.
Management’s report on NatWest Group’s internal control
over financial reporting will be filed with the Securities and
Exchange Commission as part of the 2021 Annual Report
on Form 20-F.
Disclosure controls and procedures
As required by Exchange Act rules, management (including
the Group CEO and Group CFO) have conducted an evaluation
of the effectiveness and design of NatWest Group’s disclosure
controls and procedures (as defined in the Exchange Act rules)
as at 31 December 2021. Based on this evaluation,
management (including the Group CEO and Group CFO)
concluded that NatWest Group plc’s disclosure controls and
procedures were effective as of the end of the period covered
by this Annual Report and Accounts.
182 NatWest Group 2021 Annual Report and Accounts

Changes in internal control
There was no change in NatWest Group’s internal control over
financial reporting that occurred during the period covered by
this report that has materially affected, or is reasonably likely
to materially affect, NatWest Group’s internal control over
financial reporting.
The New York Stock Exchange
As a foreign private issuer with American Depository Shares
representing ordinary shares, preference shares and debt
securities listed on the New York Stock Exchange (the NYSE),
NatWest Group plc is not required to comply with all of the
NYSE governance standards applicable to US domestic
companies (the NYSE Standards) provided that it follows home
country practice in lieu of the NYSE Standards and discloses
any significant ways in which its corporate governance
practices differ from the NYSE Standards. NatWest Group plc
is also required to provide an Annual Written Affirmation to the
NYSE of its compliance with the mandatory applicable NYSE
Standards. In March 2021 NatWest Group plc submitted its
most recent Annual Written Affirmation to the NYSE which
confirmed NatWest Group plc’s full compliance with the
applicable provisions.
The Group Audit Committee fully complies with the mandatory
provisions of the NYSE Standards (including by reference to
the rules of the Exchange Act) that relate to the composition,
responsibilities and operation of audit committees. More
detailed information about the Group Audit Committee and
its work during 2021 is set out in the Group Audit Committee
report on pages 116 to 123.
The Board has reviewed its corporate governance
arrangements and is satisfied that these are consistent with
the NYSE Standards, subject to the following departures:
i. NYSE Standards require the majority of the Board
to be independent. The NYSE Standards contain
different tests from the Code for determining
whether a director is independent. NatWest Group
plc follows the Code’s requirements in determining
the independence of its directors and currently has
eight independent non-executive directors, one
of whom is the Senior Independent Director.
ii. The NYSE Standards require non-management
directors to hold regular sessions without
management present, and that independent
directors meet at least once a year. The Code
requires the Chairman to hold meetings with non-
executive directors without the executives present
and non-executive directors are to meet without the
Chairman present at least once a year to appraise
the Chairman’s performance and NatWest Group plc
complies with the requirements of the Code.
iii. The NYSE Standards require that the nominating/
corporate governance committee of a listed company
be composed entirely of independent directors. The
Chairman of the Board is also the Chairman of the
Group Nominations and Governance Committee,
which is permitted under the Code (since the
Chairman was considered independent on
appointment). The terms of reference of the Group
Nominations and Governance Committee differ in
certain limited respects from the requirements set out
in the NYSE Standards, including because the Group
Nominations and Governance Committee does not
have responsibility for overseeing the evaluation
of management.
iv. The NYSE standards require that the compensation
committee of a listed company be composed entirely
of independent directors. Although the members
of the Group RemCo are deemed independent in
compliance with the provisions of the Code, the Board
has not assessed the independence of the members
of the Group RemCo and Group RemCo has not
assessed the independence of any compensation
consultant, legal counsel or other adviser, in each
case, in accordance with the independence tests
prescribed by the NYSE Standards. The NYSE
Standards require that the compensation committee
must have direct responsibility to review and approve
the CEO’s remuneration. As stated at the start of this
Compliance report, in the case of NatWest Group plc,
the Board rather than the Group RemCo reserves
the authority to make the final determination of
the remuneration of the CEO.
v. The NYSE Standards require listed companies to
adopt and disclose corporate governance guidelines.
Throughout the year ended 31 December 2021,
NatWest Group plc has complied with all of the
provisions of the Code (subject to the exception
described above) and the Code does not require
NatWest Group plc to disclose the full range of
corporate governance guidelines with which
it complies.
vi. The NYSE Standards require listed companies to
adopt and disclose a code of business conduct and
ethics for directors, officers and employees, and
promptly disclose any waivers of the code for
directors or executive officers. NatWest Group has
adopted a code of conduct which is supplemented
by a number of key policies and guidance dealing
with matters including, among others, anti-bribery
and corruption, anti-money laundering, sanctions,
confidentiality, inside information, health, safety and
environment, conflicts of interest, market conduct and
management records. This code of conduct applies to
all officers and employees and is fully aligned to the
PRA and FCA Conduct Rules which apply to all
directors. The Code of Conduct is available to view
on NatWest Group’s website at natwestgroup.com.
This Compliance report forms part of the Corporate
governance report and the Report of the directors.
183NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

The directors present their report together with the audited
accounts for the year ended 31 December 2021.
Other information incorporated into this report by reference can
be found at:
Page/Note
Strategic report 2
Our colleagues 58
Climate-related financial disclosures 64
Stakeholder engagement 14, 52
Governance at a glance 80
Section 172(1) statement 52
Viability statement 76
Financial review 86
Board of directors and secretary 98
Corporate governance 103
Segmental analysis Note 4
Share capital and other equity Note 22
Post balance sheet events Note 34
Risk factors 406
Group structure
During 2018, in preparation for ring-fencing a number of changes
were made to the NatWest Group structure. Following these
changes the company owns three main subsidiaries, NatWest
Holdings Limited (the parent of the ring-fenced group which
includes National Westminster Bank Plc, The Royal Bank of
Scotland plc and Ulster Bank Ireland DAC), NatWest Markets Plc
(the investment bank and the parent of NatWest Markets N.V.)
and The Royal Bank of Scotland International (Holdings) Limited
(the parent of The Royal Bank of Scotland International Limited).
Further details of the principal subsidiary undertakings are shown
in Note 33 of the consolidated financial statements and a full list of
subsidiary undertakings and overseas branches is shown in Note
12 of the parent company accounts.
Following placing and open offers in December 2008 and in April
2009, HM Treasury (HMT) owned approximately 70.3% of the
enlarged ordinary share capital of the company. In December
2009, the company issued a further £25.5 billion of new capital to
HMT in the form of B shares. HMT sold 630 million of its holding of
the company’s ordinary shares in August 2015. In October 2015
HMT converted its entire holding of 51 billion B shares into 5.1
billion new ordinary shares of £1 each in the company. HMT sold a
further 925 million of its holding of the company’s ordinary shares
in June 2018.
In March 2021, the company carried out an off-market purchase of
591 million of its ordinary shares from HMT.
In May 2021, HMT sold 580 million ordinary shares through
an accelerated book building process to institutional investors.
In July 2021, HMT announced its intention to sell part of its
shareholding over a 12 month period from August 2021 via
a trading plan, for up to 15% of the aggregate total trading volume.
At 31 December 2021, HMT’s holding in the total voting rights of
the company was 52.96%. The percentage was correct as at the
date of notification on 5 November 2021.
Activities
NatWest Group is engaged principally in providing a wide range
of banking and other financial services. Further details of the
organisational structure and business overview of NatWest Group,
including the products and services provided by each of its
operating segments and the markets in which they operate
are contained in the Business review. Details of the strategy
for delivering the company’s objectives can be found in the
Strategic report.
Results and dividends
UK company law provides that dividends can only be paid if a
company has sufficient distributable profits available to cover the
dividend. A company’s distributable profits are its accumulated,
realised profits not previously distributed or capitalised, less its
accumulated, realised losses not previously written off in a
reduction or re-organisation of capital. At 31 December 2021,
NatWest Group Plc’s distributable profits were £31 billion.
The profit attributable to the ordinary shareholders of NatWest
Group plc for the year ended 31 December 2021 amounted
to £2,950 million compared with a loss of £753 million for the
year ended 31 December 2020, as set out in the consolidated
income statement on page 300.
In 2021 NatWest Group paid an interim dividend of £347 million,
or 3.0p per ordinary share (2020 – nil).
The company has announced that the directors have recommended
a final dividend of £844 million, or 7.5p per ordinary share (2020
– £364 million or 3.0p per ordinary share). The final dividend
recommended by directors is subject to shareholders’ approval
at the Annual General Meeting on 28 April 2022.
If approved, payment will be made on 4 May 2022 to shareholders
on the register at the close of business on 18 March 2022. The
ex-dividend date will be 17 March 2022.
Subject to above mentioned condition, the payment of interim
dividends on ordinary shares is at the discretion of the Board.
Colleagues
As at 31 December 2021, NatWest Group employed 57,800 people
(excluding temporary staff). Details of all related costs are included
in Note 3 to the consolidated accounts.
Employment for disabled persons
For colleagues with disabilities NatWest Group supports them with
workplace adjustments so that they can succeed. If a colleague
becomes disabled NatWest Group will, wherever possible, make
adjustments to support them in their existing role or re-deploy
them to a more suitable alternative role.
With external recruitment, the NatWest Group Careers site gives
comprehensive insights into NatWest Group jobs, culture, locations
and application processes. It also hosts a variety of blog content
to portray stories of what it is like to work at NatWest Group. The
company also makes sure that candidates can easily request any
adjustments to help complete their application or assessment.
Going concern
NatWest Group’s business activities and financial position, the
factors likely to affect its future development and performance and
its objectives and policies in managing the financial risks to which
it is exposed and its capital are discussed in the Business review.
The risk factors which could materially affect NatWest Group’s
future results are set out on pages 406 to 426. NatWest Group’s
regulatory capital resources and significant developments in 2021
and anticipated future developments are detailed in the Capital,
liquidity and funding section on pages 249 to 265. This section also
describes NatWest Group’s funding and liquidity profile, including
changes in key metrics and the build up of liquidity reserves.
Report of
the directors
184 NatWest Group 2021 Annual Report and Accounts

Having reviewed NatWest Group’s principal risks, forecasts,
projections and other relevant evidence, the directors have a
reasonable expectation that the Group will continue in operational
existence for a period of 12 months from the date of this report.
Accordingly, the financial statements of NatWest Group and of
the company have been prepared on a going concern basis.
UK Code for Financial Reporting Disclosure
NatWest Group plc’s 2021 financial statements have been
prepared in compliance with the principles set out in the Code for
Financial Reporting Disclosure published by the British Bankers’
Association in 2010. The Code sets out five disclosure principles
together with supporting guidance. The principles are that NatWest
Group and other major UK banks will provide high quality,
meaningful and decision-useful disclosures; review and enhance
their financial instrument disclosures for key areas of interest to
market participants; assess the applicability and relevance of good
practice recommendations to their disclosures, acknowledging the
importance of such guidance; seek to enhance the comparability of
financial statement disclosures across the UK banking sector; and
clearly differentiate in their annual reports between information
that is audited and information that is unaudited.
Enhanced Disclosure Task Force (EDTF)
and Disclosures on Expected Credit Losses
(DECL) Taskforce recommendations
The EDTF, established by the Financial Stability Board, published
its report ‘Enhancing the Risk Disclosures of Banks’ in October
2012, with an update in November 2015 covering IFRS 9 expected
credit losses (ECL). The DECL Taskforce, jointly established by the
Financial Conduct Authority, Financial Reporting Council and the
Prudential Regulatory Authority, published its phase 2 report
recommendations in December 2019.
NatWest Group plc’s 2021 Annual Report and Accounts and
Pillar 3 Report reflect EDTF and have regard to DECL
Taskforce recommendations.
Authority to repurchase shares
At the Annual General Meeting in 2021 shareholders authorised
the company to make market purchases of up to 1,216,656,575
ordinary shares. The directors utilised the authority obtained
at the 2021 AGM to conduct a share buyback programme (the
‘Programme’) of up to £750 million, as announced to the market on
30 July 2021. The Programme’s purpose is to reduce the ordinary
share capital of NatWest Group.
Taking into account the reduction in issued ordinary share capital
which occurred as a result of the off-market buyback announced
on 19 March 2021, the maximum number of ordinary shares that
could be purchased by the company under the Programme was
1,157,583,542. The Programme commenced on 2 August 2021
and, as at 31 December 2021, 310,802,416 ordinary shares
(nominal value £310,802,416) had been purchased by the company
at an average purchase price of 217.5796p per ordinary share for
the total consideration of £676,242,656. A further 29,735,044
ordinary shares (nominal value £29,735,044) were purchased by
the company from 1 January to 18 January 2022 at an average
purchase price of 245.5264p per ordinary share for the total
consideration of £73,007,375. All of the purchased ordinary shares
were cancelled, representing 2.93% of the company’s issued
ordinary share capital. Shareholders will be asked to renew
this authorisation at the Annual General Meeting in 2022.
On 6 February 2019 the company held a General Meeting and
shareholders approved a special resolution to give the company
authority to make off-market purchases of up to 4.99% of its
ordinary share capital in issuance from HMT (or its nominee) at
such times as the directors may determine is appropriate. Full
details of the proposal are set out in the Circular and Notice of
General Meeting available at natwestgroup.com. This authority
was renewed at the Annual General Meeting in 2021 and
shareholders will be asked to renew the authority at the
Annual General Meeting in 2022.
The company utilised the authority it obtained at the 2020 AGM
to make an off-market purchase of 590,730,325 ordinary shares
(nominal value £590,730,325) in the company from HMT on 19
March 2021, at a price of 190.50p per ordinary share for the
total consideration of £1,125,341,269, representing 4.86% of the
company’s issued ordinary share capital. The company cancelled
390,730,325 of the purchased ordinary shares and held the
remaining 200,000,000 ordinary shares in treasury. The company
has used a total of 19,062,290 treasury shares to satisfy the
exercise of options and the vesting of share awards under the
employee share plans and the balance of ordinary shares held
in treasury as at 31 December 2021 was 180,937,710.
At the 2021 Annual General Meeting, shareholders authorised the
company to make an off-market purchase of preference shares in
the company. The company announced on 15 December 2021 that
it had utilised this authority to purchase 157,546 5.5% cumulative
preference shares (nominal value £157,546), representing 39.39%
of the share class, at a purchase price of 102%, for the total
consideration of £160,697 and 259,314 11.00% cumulative
preference shares (nominal value £259,314), representing 51.86%
of the share class, at a purchase price of 155%, for the total
consideration of £401,937. The company cancelled all of the
purchased preference shares.
Additional information
Where not provided elsewhere in the Report of the directors, the
following additional information is required to be disclosed by Part
6 of Schedule 7 to the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008.
The rights and obligations attached to the company’s ordinary
shares and preference shares are set out in our Articles of
Association, copies of which can be obtained from Companies
House in the UK or can be found at natwestgroup.com. Non-
cumulative preference share details are set out in Note 22 of
the consolidated accounts.
The cumulative preference shares represent less than 0.005% of
the total voting rights of the company, the remainder being
represented by the ordinary shares.
In a show of hands at a General Meeting of the company, every
holder of ordinary shares and cumulative preference shares, present
in person or by proxy and entitled to vote, shall have one vote.
On a poll, every holder of ordinary shares or cumulative
preference shares present in person or by proxy and entitled
to vote, shall have four votes for every share held. The notices
of Annual General Meetings and General Meetings specify the
deadlines for exercising voting rights and appointing a proxy or
proxies to vote in relation to resolutions to be passed at the meeting.
There are no restrictions on the transfer of ordinary shares in the
company other than certain restrictions which may from time to
time be imposed by laws and regulations (for example, insider
trading laws). At the 2021 Annual General Meeting, shareholders
gave authority to directors to offer a scrip dividend alternative on
any dividend paid up to the conclusion of the Annual General
Meeting in 2024. Pursuant to the UK Listing Rules, certain
employees of the company require the approval of the company
to deal in the company’s shares.
The rules governing the powers of directors, including in relation to
issuing or buying back shares and their appointment, are set out in
our Articles of Association. It will be proposed at the 2022 Annual
General Meeting that the directors’ authorities to allot shares under
the Companies Act 2006 (the Companies Act) be renewed. The
Articles of Association may only be amended by a special
resolution at a General Meeting of shareholders. The company is
not aware of any agreements between shareholders that may
result in restrictions on the transfer of securities and/or voting
rights. There are no persons holding securities carrying special
rights with regard to control of the company. A number of the
company’s employee share plans include restrictions on transfers
of shares while shares are subject to the plans. Note 3 sets out a
summary of the plans.
185NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Report of the directors continued
Under the rules of certain employee share plans, voting rights are
exercised by the Trustees of the plan on receipt of participants’
instructions. If a participant does not submit an instruction to the
Trustee no vote is registered.
For shares held in the company’s other employee share trusts,
the voting rights are exercisable by the Trustees. However, in
accordance with investor protection guidelines, the Trustees
abstain from voting. The Trustees would take independent advice
before accepting any offer in respect of their shareholdings for the
company in a takeover bid situation. The Trustees have chosen
to waive their entitlement to the dividend on shares held by
the Trusts.
A change of control of the company following a takeover bid may
cause a number of agreements to which the company is party to
take effect, alter or terminate. All of the company’s employee
share plans contain provisions relating to a change of control.
In the context of the company as a whole, these agreements
are not considered to be significant.
Directors
The names and brief biographical details of the current directors
are shown on pages 98 to 101.
Howard Davies, Frank Dangeard, Patrick Flynn, Morten Friis,
Robert Gillespie, Yasmin Jetha, Katie Murray, Mike Rogers, Alison
Rose, Mark Seligman and Lena Wilson all served throughout the
year and to the date of signing of the financial statements.
All directors of the company are required to stand for election
or re-election annually by shareholders at the Annual General
Meeting and, in accordance with the UK Listing Rules, the election
or re-election of independent directors requires approval by all
shareholders and also by independent shareholders.
Directors’ interests
The interests of the directors in the shares of the company at
31 December 2021 are shown on page 171. None of the directors
held an interest in the loan capital of the company or in the
shares or loan capital of any of the subsidiary undertakings
of the company, during the period from 1 January 2021 to
17 February 2022.
Directors’ indemnities
In terms of section 236 of the Companies Act, Qualifying Third
Party Indemnity Provisions have been issued by the company to
its directors, members of the NatWest Group and NWH Executive
Committees, individuals authorised by the PRA/FCA, certain
directors and/or officers of NatWest Group subsidiaries and
all trustees of NatWest Group pension schemes.
Controlling shareholder
In accordance with the UK Listing Rules, the company has entered
into an agreement with HM Treasury (the ‘Controlling Shareholder’)
which is intended to ensure that the Controlling Shareholder
complies with the independence provisions set out in the UK
Listing Rules. The company has complied with the independence
provisions in the relationship agreement and as far as the company
is aware the independence and procurement provisions in the
relationship agreement have been complied with in the period
by the controlling shareholder.
Shareholdings
The table below shows shareholders that have notified NatWest
Group that they hold more than 3% of the total voting rights of the
company at 31 December 2021.
Ordinary
shares
(millions)
% of issued
share capital
with voting
rights held
1
Solicitor For The Affairs of
Her Majesty’s Treasury as Nominee
for Her Majesty’s Treasury 6,038 52.96
Norges Bank 348 3.07
(1) Percentages provided were correct at the date of notification on 5 November 2021.
On 11 February 2022 a notification under Rule 5 of the Disclosure
and Transparency Rules (‘DTR’) was received from HMT notifying
that they held 5,735 million ordinary shares, representing 50.94% of
the issued share capital with voting rights.
As at 17 February 2022, no further notifications have been
received under Rule 5 of the DTR.
Listing rule 9.8.4
The information to be disclosed in the Annual Report and
Accounts under LR 9.8.4, is set out in this Directors’ report with the
exception of details of contracts of significance under LR 9.8.4 (10)
and (11) given in Additional information on page 427.
Political donations
At the Annual General Meeting in 2021, shareholders gave
authority under Part 14 of the Companies Act 2006, for a period of
one year, for the company (and its subsidiaries) to make political
donations and incur political expenditure up to a maximum
aggregate sum of £100,000. This authorisation was taken as a
precaution only, as the company has a longstanding policy of not
making political donations or incurring political expenditure within
the ordinary meaning of those words.
During 2021, NatWest Group made no political donations,
nor incurred any political expenditure in the UK or EU and it is not
proposed that NatWest Group’s longstanding policy of not making
contributions to any political party be changed. Shareholders will
be asked to renew this authorisation at the Annual General
Meeting in 2022.
Directors’ disclosure to auditors
Each of the directors at the date of approval of this report
confirms that:
(a) so far as the director is aware, there is no relevant audit
information of which the company’s auditors are unaware; and
(b) the director has taken all the steps that he/she ought to have
taken as a director to make himself/herself aware of any relevant
audit information and to establish that the company’s auditors are
aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of section 418 of the Companies Act.
Auditors
Ernst & Young LLP (EY LLP) are the auditors and have
indicated their willingness to continue in office. A resolution to
re-appoint EY LLP as the company’s auditors will be proposed
at the forthcoming Annual General Meeting.
By order of the Board
Jan Cargill
Chief Governance Officer and Company Secretary
17 February 2022
NatWest Group plc
is registered in Scotland No. SC45551
186 NatWest Group 2021 Annual Report and Accounts

This statement should be read in conjunction with the responsibilities of the auditor set out in their report on pages 287 to 299.
The directors are responsible for the preparation of the Annual Report and Accounts. The directors are required to prepare Group
financial statements, and as permitted by the Companies Act 2006 have elected to prepare company financial statements, for each
financial year in accordance with UK adopted International Accounting Standards, International Financial Reporting Standards as
issued by the International Accounting Standards Board and IFRS as adopted by the European Union. They are responsible for
preparing financial statements that present fairly the financial position, financial performance and cash flows of NatWest Group.
In preparing those financial statements, the directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgments and estimates that are reasonable, relevant and reliable; and
– state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained
in the financial statements.
– prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company and Group will
continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of NatWest Group and to enable them to ensure that the Annual Report and Accounts complies with the
Companies Act 2006. They are also responsible for safeguarding the assets of NatWest Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a Strategic report, Directors’ report,
Directors’ remuneration report and Corporate governance statement that comply with that law and those regulations. The directors
are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website.
The directors confirm that to the best of their knowledge:
– the financial statements, prepared in accordance with UK adopted International Accounting Standards, International Financial
Reporting Standards as issued by the International Accounting Standards Board and IFRS as adopted by the European Union,
give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings
included in the consolidation taken as a whole; and
– the Strategic report and Directors’ report (incorporating the Financial review) include a fair review of the development and
performance of the business and the position of the company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and uncertainties that they face.
In addition, the directors are of the opinion that the Annual Report and Accounts, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the company’s position and performance,
business model and strategy.
By order of the Board
Howard Davies
Chairman
Alison Rose-Slade
Group Chief Executive Officer
Katie Murray
Group Chief Financial Officer
17 February 2022
Board of directors
Chairman
Howard Davies
Executive directors
Alison Rose-Slade
Katie Murray
Non-executive directors
Frank Dangeard
Patrick Flynn
Morten Friis
Robert Gillespie
Yasmin Jetha
Mike Rogers
Mark Seligman
Lena Wilson
Statement of directors’ responsibilities
187NatWest Group 2021 Annual Report and Accounts
Strategic report Financial review
Governance
Risk and capital management Additional informationFinancial statements

Risk and
capital
management
188 Risk and capital management
189 Presentation of information
189 Update on COVID-19
189 Risk management framework
189 Introduction
189 Culture
190 Governance
192 Risk appetite
193 Identification and measurement
193 Mitigation
193 Testing and monitoring
193 Stress testing
197 Credit risk
197 Definition, sources of risk and key developments
197 Governance and risk appetite
197 Identification and measurement
197 Mitigation
198 Assessment and monitoring
199 Problem debt management
200 Forbearance
200 Impairment, provisioning and write-offs
203 Significant increase in credit risk and asset lifetimes
205 Economic loss drivers and UK economic uncertainty
211 Measurement uncertainty and ECL sensitivity analysis
213 Measurement uncertainty and ECL adequacy
214 Banking activities
245 Trading activities
249 Capital, liquidity and funding risk
249 Definitions and sources of risk
250 Capital, liquidity and funding management
251 Key points
252 Minimum requirements
253 Measurement
266 Market risk
266 Non-traded market risk
274 Traded market risk
277 Market risk – linkage to balance sheet
278 Pension risk
279 Compliance & conduct risk
279 Financial crime risk
280 Climate risk
281 Operational risk
284 Model risk
284 Reputational risk

Risk and capital management
NatWest Group Annual Report and Accounts 2021 189
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Presentation of information
Where marked as audited in the section header, certain
information in the Risk and capital management section (pages
188 to 285) is within the scope of the Independent auditor’s
report.
Update on COVID-19
While the immediate disruption diminished during the year, the
ongoing impacts of the global pandemic remained a significant
focus for risk management in 2021 and uncertainty in the
operating environment continued. NatWest Group remained
committed to supporting its customers while operating safely
and soundly in line with its strategic objectives.
Against the backdrop of a slowly-recovering economy, the
credit risk profile remains heightened and there is an
expectation that the impacts of the pandemic will continue to
be seen in the performance of NatWest Group’s portfolios for
some time. NatWest Group anticipates increased default levels
in 2022 as a result.
While the direct impact on NatWest Group’s operational risk
profile reduced, NatWest Group continued to closely monitor
the second-order impacts on its transformation agenda, with a
significant focus on managing resource to protect key
regulatory deliveries. The continued evolution of NatWest
Group’s ways of working – to include large-scale working from
home – also required significant operational risk focus,
particularly in terms of business resilience.
As a result of its strong balance sheet and prudent approach to
risk management, NatWest Group remains well placed to
withstand these aftershocks as well as providing support to
customers when they need it most.
Risk management framework
Introduction
NatWest Group operates an enterprise-wide risk management
framework, which is centred around the embedding of a strong
risk culture. The framework ensures the governance,
capabilities and methods are in place to facilitate risk
management and decision-making across the organisation.
The framework ensures that NatWest Group’s principal risks –
which are detailed in this section – are appropriately controlled
and managed. It sets out the standards and objectives for risk
management as well as defining the division of roles and
responsibilities.
This seeks to ensure a consistent approach to risk management
across NatWest Group and its subsidiaries. It aligns risk
management with NatWest Group’s overall strategic objectives.
The framework, which is designed and maintained by NatWest
Group’s independent Risk function, is owned by the Chief Risk
Officer. It is reviewed and approved annually by the Board. The
framework incorporates risk governance, NatWest Group’s
three lines of defence operating model and the Risk function’s
mandate.
Risk appetite, supported by a robust set of principles, policies
and practices, defines the levels of tolerance for a variety of
risks and provides a structured approach to risk-taking within
agreed boundaries.
While all NatWest Group colleagues are responsible for
managing risk, the Risk function provides oversight and
monitoring of risk management activities, including the
implementation of the framework and adherence to its
supporting policies, standards and operational procedures. The
Chief Risk Officer plays an integral role in providing the Board
with advice on NatWest Group’s risk profile, the performance of
its controls and in providing challenge where a proposed
business strategy may exceed risk tolerance.
In addition, there is a process to identify and manage top risks,
which are those that could have a significant negative impact
on NatWest Group’s ability to meet its strategic objectives. A
complementary process operates to identify emerging risks.
Both top and emerging risks may incorporate aspects of – or
correlate to – a number of principal risks and are reported
alongside them to the Board on a regular basis.
Culture
Risk culture is at the heart of NatWest Group’s risk
management framework and its risk management practice.
The risk culture target is to make risk part of the way
employees work and think.
A focus on leaders as role models and action to build clarity,
develop capability and motivate employees to reach the
required standards of behaviour are key to achieving the risk
culture target. Colleagues are expected to:
 Take personal responsibility for understanding and proactively
managing the risks associated with individual roles.
 Respect risk management and the part it plays in daily work.
 Understand the risks associated with individual roles.
 Align decision-making to NatWest Group’s risk appetite.
 Consider risk in all actions and decisions.
 Escalate risks and issues early; taking action to mitigate risks
and learning from mistakes and near-misses.
 Challenge others’ attitudes, ideas and actions.
 Report and communicate risks transparently.
The target risk culture behaviours are embedded in NatWest
Group’s Critical People Capabilities and are clearly aligned to
the core values of “serving customers”, “working together”,
“doing the right thing” and “thinking long term”. These act as
an effective basis for a strong risk culture because the Critical
People Capabilities form the basis of all recruitment and
selection processes.
Training
Enabling employees to have the capabilities and confidence to
manage risk is core to NatWest Group’s learning strategy.
NatWest Group offers a wide range of learning, both technical
and behavioural, across the risk disciplines. This training can be
mandatory, role-specific or for personal development.
Mandatory learning for all staff is focused on keeping
employees, customers and NatWest Group safe. This is easily
accessed online and is assigned to each person according to
their role and business area. The system allows monitoring at
all levels to ensure completion.
Our Code
NatWest Group’s conduct guidance, Our Code, provides
direction on expected behaviour and sets out the standards of
conduct that support the values. The code explains the effect of
decisions that are taken and describes the principles that must
be followed.
These principles cover conduct-related issues as well as wider
business activities. They focus on desired outcomes, with
practical guidelines to align the values with commercial
strategy and actions. The embedding of these principles
facilitates sound decision-making and a clear focus on good
customer outcomes.
Where appropriate, if conduct falls short of NatWest Group’s
required standards, the accountability review process is used to
assess how this should be reflected in pay outcomes for the
individuals concerned (for more information on this process
refer to page 155). The NatWest Group remuneration policy
ensures that the remuneration arrangements for all employees
reflect the principles and standards prescribed by the PRA
rulebook and the FCA handbook. Any employee falling short of
the expected standards would also be subject to internal
disciplinary policies and procedures. If appropriate, the relevant
authority would be notified.

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Governance
Committee structure
The diagram shows NatWest Group’s risk committee structure in 2021 and the main purposes of each committee.
(1) The Group Executive Risk Committee is chaired by the Group Chief Executive Officer and supports her (and other accountable executives) in discharging risk management
accountabilities.
(2) The Group Executive Committee is chaired by the Group Chief Executive Officer and supports her in discharging her individual accountabilities in accordance with the authority
delegated to her by the Board.
(3) The Group Asset & Liability Management Committee is chaired by the Group Chief Financial Officer and supports her in discharging her individual accountabilities relating to
treasury and balance sheet management.
(4) In addition, the Group Technical Asset & Liability Management Committee, chaired by the Group Treasurer, provides oversight of capital and balance sheet management in line with
approved risk appetite under normal and stress conditions. Reviews and challenges the financial strategy, risk management, balance sheet and remuneration and policy implications
of the Group’s pension schemes.
(5) The Group Executive Disclosure Committee is chaired by the Group Chief Financial Officer and supports her in discharging her accountabilities relating to the production and
integrity of the Group’s financial information and disclosures.
NatWest Group plc Board
Group Board Risk
Committee
Provides oversight and
advice to the Board on
current and future risk
exposures, risk profile, risk
appetite and risk culture.
Reviews the design and
implementation of the risk
management framework
and provides input to
remuneration decisions.
Group Asset &
Liability
Management
Committee
(3, 4)
Supports the Group CFO in
overseeing the effective
management of the Group’s
current and future balance
sheet in line with Board-
approved strategy and
risk appetite.
Group Executive Risk
Committee
(1)
Reviews, challenges and
debates all material risk and
control matters across the
Group. Supports the CEO and
other accountable executives in
discharging risk management
accountabilities. Considers the
Group’s risk profile relative to
current and future strategy and
oversees implementation of the
risk management framework.
Group Executive
Committee
(2)
Supports the Group CEO in
discharging her individual
accountabilities including matters
relating to strategy, financials,
capital, risk and operational
issues. Monitors the
implementation of culture
change. Supports the Group CEO
in forming recommendations to
the Board and to relevant Board
committees.
Group Audit
Committee
Assists the Board in carrying
out its accounting, internal
control and financial
reporting responsibilities.
Reviews the effectiveness of
internal controls systems
relating to financial
management and
compliance with financial
reporting, asset
safeguarding and
accounting standards.
Considers material risks and approves, as appropriate, actions recommended by the Group Board Risk Committee.
Monitors performance against risk appetite. Reviews and approves the risk appetite framework and qualitative
statements of risk appetite for
all key risks.
Group Executive
Disclosure Committee
(5)
Ensures that NatWest Group
and relevant subsidiary
disclosures are accurate,
complete and fair. Supports the
Group CRO in reviewing and
evaluating all significant
expected credit losses and the
Group CFO in reviewing and
evaluating related provisions
and valuations.
.

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Risk management structure
The diagram shows NatWest Group’s risk management structure in 2021 and key risk management responsibilities.
(1) The Group Chief Executive Officer also performs the NWH Chief Executive Officer role.
(2) The Group Chief Risk Officer also performs the NWH Chief Risk Officer role.
(3) The NWH Risk function provides risk management services across NWH, including to the NWH Chief Risk Officer and – where agreed – to NWM and RBSI Chief Risk Officers. These
services are managed, as appropriate, through service level agreements.
(4) The NWH Risk function is independent of the NWH customer-facing franchises and support functions. Its structure is divided into three parts (Directors of Risk, Specialist Risk
Directors and Chief Operating Officer) to facilitate effective management of the risks facing NWH. Risk committees in the customer businesses oversee risk exposures arising from
management and business activities and focus on ensuring that these are adequately monitored and controlled. The Directors of Risk, (Retail Banking; Commercial Banking; wealth
businesses; Financial & Strategic Risk; Non-Financial Risk & Frameworks and Compliance & Conduct) as well as the Director, Financial Crime Risk NatWest Holdings and the Chief
Operating Officer report to the NWH Chief Risk Officer. The Director of Risk, Ulster Bank Ireland DAC reports to the Ulster Bank Ireland DAC Chief Executive. He also has a
reporting line to the NWH Chief Risk Officer and to the Chair of the Ulster Bank Ireland DAC Board Risk Committee.
(5) The Chief Risk Officers for NWM and RBSI have dual reporting lines into the Group Chief Risk Officer and the respective Chief Executive Officers of their entities. There are
additional reporting lines to the NWM and RBSI Board Risk Committee chairs and a right of access to the respective Risk Committees.
NWM
Chief Risk
Officer
NWH
Chief Risk
Officer
Leads the NatWest Group Risk function. Defines and delivers
the risk, conduct, compliance and financial crime strategies.
Defines overall risk service provision requirements to enable
delivery of NatWest Group strategies, including policies,
governance, frameworks, oversight and challenge, risk
culture and risk reporting. Contributes to the development of
strategy, transformation and culture as a member of the
Executive Committee.
RBSI
Chief Executive
Officer
NWH
Chief
Executive
Officer
NWM
Chief Executive
Officer
RBS Chief
Executive
Group
Chief Risk
Officer
RBSI
Chief Risk
Officer
Group
Chief Executive
Officer
Leads the NWH Risk function. Responsibilities include policy,
governance, frameworks, oversight and challenge, risk
culture and reporting. Delivers risk services across NatWest
Group governed by appropriate service level agreements.
Contributes to NWH strategy as a member of the NWH
Executive Committee.
Leads the NWM Risk function. Responsibilities include policy,
governance, frameworks, oversight and challenge, risk
culture and reporting. Contributes to NWM strategy as a
member of the NWM Executive Committee.
Leads the RBSI Risk function. Responsibilities include policy,
governance, frameworks, oversight and challenge, risk
culture and reporting. Contributes to RBSI strategy as a
member of the RBSI Executive Committee.

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Three lines of defence
NatWest Group uses the industry-standard three lines of
defence model to articulate accountabilities and responsibilities
for managing risk. This supports the embedding of effective risk
management throughout the organisation. All roles below the
CEO sit within one of the three lines. The CEO ensures the
efficient use of resources and the effective management of
risks as stipulated in the risk management framework and is
therefore considered to be outside the three lines of defence
principles.
First line of defence
The first line of defence incorporates most roles in NatWest
Group, including those in the customer-facing franchises,
Technology and Services as well as support functions such as
Human Resources, Legal and Finance.
The first line of defence is empowered to take risks within the
constraints of the risk management framework and policies as
well as the risk appetite statements and measures set by the
Board.
The first line of defence is responsible for managing its direct
risks. With the support of specialist functions such as Legal,
Human Resources and Technology, it is also responsible for
managing its consequential risks by identifying, assessing,
mitigating, monitoring and reporting risks.
Second line of defence
The second line of defence comprises the Risk function and is
independent of the first line.
The second line of defence is empowered to design and
maintain the risk management framework and its components.
It undertakes proactive risk oversight and continuous
monitoring activities to confirm that NatWest Group engages in
permissible and sustainable risk-taking activities.
The second line of defence advises on, monitors, challenges,
approves, escalates and reports on the risk-taking activities of
the first line, ensuring that these are within the constraints of
the risk management framework and policies as well as the risk
appetite statements and measures set by the Board.
Third line of defence
The third line of defence is the Internal Audit function and is
independent of the first and second lines.
The third line of defence is responsible for providing
independent and objective assurance to the Board, its
subsidiary legal entity boards and executive management on
the adequacy and effectiveness of key internal controls,
governance and the risk management in place to monitor,
manage and mitigate the key risks to NatWest Group and its
subsidiary companies achieving their objectives.
The third line of defence executes its duties freely and
objectively in accordance with the Chartered Institute of
Internal Auditors’ Code of Ethics and International Standards.
Risk appetite
Risk appetite defines the type and aggregate level of risk
NatWest Group is willing to accept in pursuit of its strategic
objectives and business plans. Risk appetite supports sound risk
taking, the promotion of robust risk practices and risk
behaviours, and is calibrated annually.
For certain principal risks, risk capacity defines the maximum
level of risk NatWest Group can assume before breaching
constraints determined by regulatory capital and liquidity
requirements, the operational environment, and from a conduct
perspective. Establishing risk capacity helps determine where
risk appetite should be set, ensuring there is a buffer between
internal risk appetite and NatWest Group’s ultimate capacity to
absorb losses.
Risk appetite framework
The risk appetite framework supports effective risk
management by promoting sound risk-taking through a
structured approach, within agreed boundaries. It also ensures
emerging risks and risk-taking activities that might be out of
appetite are identified, assessed, escalated and addressed in a
timely manner.
To facilitate this, a detailed annual review of the framework is
carried out. The review includes:
 Assessing the adequacy of the framework when compared
to internal and external expectations.
 Ensuring the framework remains effective and acts as a
strong control environment for risk appetite.
 Assessing the level of embedding of risk appetite across the
organisation.
The Board approves the risk appetite framework annually.
Establishing risk appetite
In line with NatWest Group’s risk appetite framework, risk
appetite is maintained across NatWest Group through risk
appetite statements. These are in place for all principal risks
and describe the extent and type of activities that can be
undertaken.
Risk appetite statements consist of qualitative statements of
appetite supported by risk limits and triggers that operate as a
defence against excessive risk-taking. Risk measures and their
associated limits are an integral part of the risk appetite
approach and a key part of embedding risk appetite in day-to-
day risk management decisions. A clear tolerance for each
principal risk is set in alignment with business activities.
The annual process of reviewing and updating risk appetite
statements is completed alongside the business and financial
planning process. This ensures that plans and risk appetite are
appropriately aligned.
The Board sets risk appetite for all principal risks to help ensure
NatWest Group is well placed to meet its priorities and long-
term targets even in challenging economic environments. This
supports NatWest Group in remaining resilient and secure as it
pursues its strategic business objectives.
NatWest Group’s risk profile is frequently reviewed and
monitored. Management focus is concentrated on all principal
risks as well as the top and emerging risk issues which may
correlate to them. Risk profile relative to risk appetite is
reported regularly to senior management and the Board.
NatWest Group policies directly support the qualitative aspects
of risk appetite. They define the qualitative expectations,
guidance and standards that stipulate the nature and extent of
permissible risk taking and are consistently applied across
NatWest Group and its subsidiaries.

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Identification and measurement
Identification and measurement within the risk management
process comprises:
 Regular assessment of the overall risk profile, incorporating
market developments and trends, as well as external and
internal factors.
 Monitoring of the risks associated with lending and credit
exposures.
 Assessment of trading and non-trading portfolios.
 Review of potential risks in new business activities and
processes.
 Analysis of potential risks in any complex and unusual
business transactions.
The financial and non-financial risks that NatWest Group faces
are detailed in its Risk Directory. This provides a common risk
language to ensure consistent terminology is used across
NatWest Group. The Risk Directory is subject to annual review
to ensure it continues to fully reflect the risks that NatWest
Group faces.
Mitigation
Mitigation is a critical aspect of ensuring that risk profile
remains within risk appetite. Risk mitigation strategies are
discussed and agreed within NatWest Group.
When evaluating possible strategies, costs and benefits, residual
risks (risks that are retained) and secondary risks (those that
arise from risk mitigation actions themselves) are also
considered. Monitoring and review processes are in place to
evaluate results. Early identification, and effective management
of changes in legislation and regulation are critical to the
successful mitigation of compliance and conduct risk. The
effects of all changes are managed to ensure the timely
achievement of compliance. Those changes assessed as having
a high or medium-high impact are managed more closely.
Emerging risks that could affect future results and performance
are also closely monitored. Action is taken to mitigate potential
risks as and when required. Further in-depth analysis, including
the stress testing of exposures, is also carried out.
Testing and monitoring
Targeted risk processes and controls – including controls within
the scope of Section 404 of the Sarbanes-Oxley Act 2002 – are
subject to independent testing and monitoring.
This activity is carried out to confirm to both internal and
external stakeholders – including the Board, senior
management, the customer-facing franchises, Internal Audit and
NatWest Group’s regulators – that such processes and controls
are being correctly implemented and operate adequately and
effectively. A consistent testing and monitoring methodology is
in place across NatWest Group.
Testing and monitoring activity focuses on processes and
controls relating to credit risk, financial crime risk, operational
resilience, and compliance and conduct risk. However, a range
of controls and processes relating to other risk types is also
subject to testing and monitoring activity as deemed appropriate
within the context of a robust control environment.
The Risk Testing & Monitoring Forum assesses and validates the
annual plan as well as the ongoing programme of reviews.
Stress testing
Stress testing – capital management
Stress testing is a key risk management tool and a fundamental
component of NatWest Group’s approach to capital
management. It is used to quantify and evaluate the potential
impact of specified changes to risk factors on the financial
strength of NatWest Group, including its capital position.
Stress testing includes:
 Scenario testing, which examines the impact of a
hypothetical future state to define changes in risk factors.
 Sensitivity testing, which examines the impact of an
incremental change to one or more risk factors.
The process for stress testing consists of four broad stages:
Define
scenarios

Identify macro and NatWest Group
specific vulnerabilities and risks.
 Define and calibrate scenarios to
examine risks and vulnerabilities.
 Formal governance process to agree
scenarios.
Assess
impact

Translate scenarios into risk drivers.
 Assess impact to current and projected
P&L and balance sheet across NatWest
Group.
Calculate
results and
assess
implications

Aggregate impacts into overall results.
 Results form part of the risk
management process.
 Scenario results are used to inform
business and capital plans.
Develop and
agree
management
actions

Scenario results are analysed by
subject matter experts. Appropriate
management actions are then
developed.
 Scenario results and management
actions are reviewed by the relevant
Executive Risk Committees and Board
Risk Committees and agreed by the
relevant
Boards.
Stress testing is used widely across NatWest Group. The
diagram below summarises key areas of focus.

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Specific areas that involve capital management include:
 Strategic financial and capital planning – by assessing the
impact of sensitivities and scenarios on the capital plan and
capital ratios.
 Risk appetite – by gaining a better understanding of the
drivers of, and the underlying risks associated with, risk
appetite.
 Risk monitoring – by monitoring the risks and horizon
scanning events that could potentially affect NatWest
Group’s financial strength and capital position.
 Risk mitigation – by identifying actions to mitigate risks, or
those that could be taken, in the event of adverse changes
to the business or economic environment. Key risk
mitigating actions are documented in NatWest Group’s
recovery plan.
Reverse stress testing is also carried out in order to identify
circumstances that may lead to specific, defined outcomes such
as business failure. Reverse stress testing allows potential
vulnerabilities in the business model to be examined more fully.
Capital sufficiency – going concern forward-looking view
Going concern capital requirements are examined on a
forward-looking basis – including as part of the annual
budgeting process – by assessing the resilience of capital
adequacy and leverage ratios under hypothetical future states.
These assessments include assumptions about regulatory and
accounting factors (such as IFRS 9). They incorporate
economic variables and key assumptions on balance sheet and
P&L drivers, such as impairments, to demonstrate that NatWest
Group and its operating subsidiaries maintain sufficient capital.
A range of future states are tested. In particular, capital
requirements are assessed:
 Based on a forecast of future business performance, given
expectations of economic and market conditions over the
forecast period.
 Based on a forecast of future business performance under
adverse economic and market conditions over the forecast
period. Scenarios of different severity may be examined.
The potential impact of normal and adverse economic and
market conditions on capital requirements is assessed through
stress testing, the results of which are not only used widely
across NatWest Group but also by the regulators to set specific
capital buffers. NatWest Group takes part in stress tests run by
regulatory authorities to test industry-wide vulnerabilities under
crystallising global and domestic systemic risks.
Stress and peak-to-trough movements are used to help assess
the amount of capital NatWest Group needs to hold in stress
conditions in accordance with the capital risk appetite
framework.
Internal assessment of capital adequacy
An internal assessment of material risks is carried out annually
to enable an evaluation of the amount, type and distribution of
capital required to cover these risks. This is referred to as the
Internal Capital Adequacy Assessment Process (ICAAP). The
ICAAP consists of a point-in-time assessment of exposures and
risks at the end of the financial year together with a forward-
looking stress capital assessment. The ICAAP is approved by
the Board and submitted to the PRA.
The ICAAP is used to form a view of capital adequacy
separately to the minimum regulatory requirements. The ICAAP
is used by the PRA to assess NatWest Group’s specific capital
requirements through the Pillar 2 framework.
Capital allocation
NatWest Group has mechanisms to allocate capital across its
legal entities and businesses. These aim to optimise the use of
capital resources taking into account applicable regulatory
requirements, strategic and business objectives and risk
appetite. The framework for allocating capital is approved by
the CFO with support from the Asset & Liability Management
Committee.
Governance
Capital management is subject to substantial review and
governance. The Board approves the capital plans, including
those for key legal entities and businesses as well as the results
of the stress tests relating to those capital plans.
Stress testing – liquidity
Liquidity risk monitoring and contingency planning
A suite of tools is used to monitor, limit and stress test the risks
on the balance sheet. Limit frameworks are in place to control
the level of liquidity risk, asset and liability mismatches and
funding concentrations. Liquidity risks are reviewed at
significant legal entity and business levels daily, with
performance reported to the Asset & Liability Management
Committee on a regular basis. Liquidity Condition Indicators are
monitored daily. This ensures any build-up of stress is detected
early and the response escalated appropriately through
recovery planning.
Internal assessment of liquidity
Under the liquidity risk management framework, NatWest
Group maintains the Internal Liquidity Adequacy Assessment
Process. This includes assessment of net stressed liquidity
outflows under a range of severe but plausible stress scenarios.
Each scenario evaluates either an idiosyncratic, market-wide or
combined stress event as described in the table below.
Type
Description
Idiosyncratic
scenario
The market perceives NatWest Group to be
suffering from a severe stress event, which
results in an immediate assumption of
increased credit risk or concerns over
solvency.
Market-wide
scenario
A market stress event affecting all
participants in a market through contagion,
potential counterparty failure and other
market risks. NatWest Group is affected under
this scenario but no more severely than any
other participants with equivalent exposure.
Combined
scenario
This scenario models the combined impact of
an idiosyncratic and market stress occurring
at once, severely affecting funding markets
and the liquidity of some assets.
NatWest Group uses the most severe outcome to set the
internal stress testing scenario which underpins its internal
liquidity risk appetite. This complements the regulatory liquidity
coverage ratio requirement.

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Stress testing – recovery and resolution planning
The NatWest Group recovery plan explains how NatWest Group
and its subsidiaries – as a consolidated group – would identify
and respond to a financial stress event and restore its financial
position so that it remains viable on an ongoing basis.
The recovery plan ensures risks that could delay the
implementation of a recovery strategy are highlighted and
preparations are made to minimise the impact of these risks.
Preparations include:
 Developing a series of recovery indicators to provide early
warning of potential stress events.
 Clarifying roles, responsibilities and escalation routes to
minimise uncertainty or delay.
 Developing a recovery playbook to provide a concise
description of the actions required during recovery.
 Detailing a range of options to address different stress
conditions.
 Appointing dedicated option owners to reduce the risk of
delay and capacity concerns.
The plan is intended to enable NatWest Group to maintain
critical services and products it provides to its customers,
maintain its core business lines and operate within risk appetite
while restoring NatWest Group’s financial condition. It is
assessed for appropriateness on an ongoing basis and is
updated annually. The plan is reviewed and approved by the
Board prior to submission to the PRA each year. Individual
recovery plans are also prepared for NatWest Holdings Limited,
NatWest Markets Plc, RBS International (Holdings) Limited,
Ulster Bank Ireland DAC and NatWest Markets N.V.. These
plans detail the recovery options, recovery indicators and
escalation routes for each entity.
Fire drill simulations of possible recovery events are used to
test the effectiveness of NatWest Group and individual legal
entity recovery plans. The fire drills are designed to replicate
possible financial stress conditions and allow senior
management to rehearse the responses and decisions that may
be required in an actual stress event. The results and lessons
learnt from the fire drills are used to enhance NatWest Group’s
approach to recovery planning.
Under the resolution assessment part of the PRA rulebook,
NatWest Group is required to carry out an assessment of its
preparations for resolution, submit a report of the assessment
to the PRA and publish a summary of this report.
Resolution would be implemented if NatWest Group was
assessed by the UK authorities to have failed and the
appropriate regulator put it into resolution. The process of
resolution is owned and implemented by the Bank of England
(as the UK resolution authority). A multi-year programme is in
place to further develop resolution capability in line with
regulatory requirements.
Stress testing – market risk
Non-traded market risk
Non-traded exposures are reported to the PRA on a quarterly
basis. This provides the regulator with an overview of NatWest
Group’s banking book interest rate exposure. The report
includes detailed product information analysed by interest rate
driver and other characteristics, including accounting
classification, currency and counterparty type.
Scenario analysis based on hypothetical adverse scenarios is
performed on non-traded exposures as part of the Bank of
England and European Banking Authority stress test exercises.
NatWest Group also produces an internal scenario analysis as
part of its financial planning cycles.
Non-traded exposures are capitalised through the ICAAP. This
covers gap risk, basis risk, credit spread risk, pipeline risk,
structural foreign exchange risk, prepayment risk, equity risk
and accounting volatility risk. The ICAAP is completed with a
combination of value and earnings measures. The total non-
traded market risk capital requirement is determined by adding
the different charges for each sub risk type. The ICAAP
methodology captures at least ten years of historical volatility,
produced with a 99% confidence level. Methodologies are
reviewed by NatWest Group Model Risk and the results are
approved by the NatWest Group Technical Asset & Liability
Management Committee.
Non-traded market risk stress results are combined with those
for other risks into the capital plan presented to the Board. The
cross-risk capital planning process is conducted once a year,
with a planning horizon of five years. The scenario narratives
cover both regulatory scenarios and macroeconomic scenarios
identified by NatWest Group.
Vulnerability-based stress testing begins with the analysis of a
portfolio and expresses its key vulnerabilities in terms of
plausible, vulnerability scenarios under which the portfolio
would suffer material losses. These scenarios can be historical,
macroeconomic or forward-looking/hypothetical. Vulnerability-
based stress testing is used for internal management
information and is not subject to limits. The results for relevant
scenarios are reported to senior management.
Traded market risk
NatWest Group carries out regular market risk stress testing to
identify vulnerabilities and potential losses in excess of, or not
captured in, value-at-risk. The calculated stresses measure the
impact of changes in risk factors on the fair values of the
trading portfolios.
NatWest Group conducts historical, macroeconomic and
vulnerability-based stress testing. Historical stress testing is a
measure that is used for internal management. Using the
historical simulation framework employed for value-at-risk, the
current portfolio is stressed using historical data since 1
January 2005. This methodology simulates the impact of the
99.9 percentile loss that would be incurred by historical risk
factor movements over the period, assuming variable holding
periods specific to the risk factors and the businesses.

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Historical stress tests form part of the market risk limit
framework and their results are reported regularly to senior
management. Macroeconomic stress tests are carried out
periodically as part of the bank-wide, cross-risk capital
planning process. The scenario narratives are translated into
risk factor shocks using historical events and insights by
economists, risk managers and the first line.
Market risk stress results are combined with those for other
risks into the capital plan presented to the Board. The cross-
risk capital planning process is conducted once a year, with a
planning horizon of five years. The scenario narratives cover
both regulatory scenarios and macroeconomic scenarios
identified by NatWest Group.
Vulnerability-based stress testing begins with the analysis of a
portfolio and expresses its key vulnerabilities in terms of
plausible, vulnerability scenarios under which the portfolio
would suffer material losses. These scenarios can be historical,
macroeconomic or forward-looking/hypothetical. Vulnerability-
based stress testing is used for internal management
information and is not subject to limits. The results for relevant
scenarios are reported to senior management.
Internal scenarios
During 2021, NatWest Group continuously refined and reviewed
a series of internal scenarios – benchmarked against the Bank
of England’s illustrative scenario – as the impact of COVID-19
evolved, including actual and potential effects on economic
fundamentals. These scenarios included:
 The impact of travel restrictions, social distancing policies,
self-isolation and sickness on GDP, employment and
consumer spending.
 The impacts on business investment in critical sectors.
 The effect on house prices, commercial real estate values
and major project finance.
 The effect of government interventions such as the Job
Retention Scheme and the Coronavirus Business
Interruption Loan Scheme.
Applying the macro-scenarios to NatWest Group’s earnings,
capital, liquidity and funding positions did not result in a breach
of any regulatory thresholds.
Internal scenarios were also used to assess the potential
impacts of severe weather events on NatWest Group’s
operations in the UK and India.
Regulatory stress testing
In 2021, NatWest Group participated in the regulatory stress tests conducted by the Bank of England following their suspension in
2020 as a result of COVID-19. The scenario was hypothetical in nature and does not represent a forecast of NatWest Group’s
future business or profitability. The results of regulatory stress tests are carefully assessed and form part of the wider risk
management of NatWest Group. Following the UK’s exit from the European Union on 31 December 2020, only relevant European
subsidiaries of NatWest Group will take part in the European Banking Authority stress tests going forward. NatWest Group itself will
not participate.
NatWest Group also took part in the Bank of England’s Climate Biennial Exploratory Scenario (CBES). This exercise was designed
to assess the resilience of the largest UK banks and insurers to the physical and transition risks associated with climate change.
The CBES used three 30-year scenarios to explore the risks – Early Action (in which the transition to a net-zero emissions economy
gets underway with carbon taxes and associated policies intensifying gradually), Late Action (in which the transition is delayed
until 2031, with a sudden increase in the intensity of carbon taxes and climate policy leading to a recession) and No Additional
Action (in which no new climate policies are introduced and the physical impacts of climate change are most severe). The Bank of
England is expected to publish aggregate findings in 2022 though, given the exploratory nature of the exercise, it will not use CBES
to set capital requirements.
Bank of England
stress test
Scenario
Designed to assess the resilience of major UK banks to reasonable worst-case stress in the current
environment. The severity of the test is related to policymakers’ assessments of risk levels across
markets and regions.
The 2021 stress test assessed the impact of a severe economic path from 2021 to 2025 on top of the
economic shocks arising from the pandemic. The scenario implied a cumulative three-year loss of 37%
of 2019 UK GDP and 31% of 2019 global GDP with the UK’s trading partners experiencing severe and
synchronised slowdowns, a decline in equity prices and a rise in bond spreads. The scenario also
included a 33% fall in UK residential property prices and a rise in UK unemployment of 5.6 percentage
points to peak at 11.9%.
The stress was based on an end-of-2020 balance sheet starting position.
Results
Under the 2021 Bank of England solvency stress test, on an IFRS 9 transitional basis, the CET1 ratio
reached a low point of 10.4%. This was above the reference rate of 7%.
Tier 1 leverage ratio was projected to be 4.4% under stress. This was above the reference rate of 3.6%
On an IFRS 9 non-transitional basis, the CET1 ratio reached a low point of 10.3%. This was above the
reference rate of 7%. Tier 1 leverage ratio was projected to be 4.4% under stress. This was above the
reference rate of 3.6%
What does this
mean?
The 2021 Bank of England solvency stress result demonstrated that the balance sheet continues to be
robust with a strong capital position.

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Additional information
Financial review
Credit risk
Definition (audited)
Credit risk is the risk that customers and counterparties fail to
meet their contractual obligation to settle outstanding amounts.
Sources of risk (audited)
The principal sources of credit risk for NatWest Group are
lending, off-balance sheet products, derivatives and securities
financing, and debt securities. NatWest Group is also exposed
to settlement risk through foreign exchange, trade finance and
payments activities.
Key developments in 2021
 The outlook for credit risk and asset quality improved
during 2021 with the economic recovery from the disruption
caused by COVID-19 being faster than initially forecast.
 The overall expected credit loss (ECL) decreased materially
as a result, with lower than expected defaults and
exposures moving from Stage 2 into Stage 1. Stage 3 ECL
charges remained low, reflecting the effect of government
support schemes mitigating against defaults.
 In Personal, lending criteria and underwriting standards,
which had been tightened during 2020 in response to
COVID-19, were selectively relaxed as economic conditions
improved and portfolio performance stabilised following the
conclusion of payment holidays.
 In Wholesale, sector specific risk appetite continued to be
closely monitored and appropriately adjusted during the
year for those sectors most affected by COVID-19. As in
Personal, a selective relaxation of lending criteria and
underwriting standards was possible as economic
conditions improved and portfolio performance stabilised.
 NatWest Group continued to progress embedding climate
change considerations in credit assessment and monitoring,
including scenario analysis to assess the materiality of
climate change risks. For further information refer to the
2021 Climate-related disclosures report.
Governance (audited)
The Credit Risk function provides oversight and challenge of
frontline credit risk management activities.
Governance activities include:
 Defining credit risk appetite measures for the management
of concentration risk and credit policy to establish the key
causes of risk in the process of providing credit and the
controls that must be in place to mitigate them.
 Approving and monitoring operational limits for business
segments and credit limits for customers.
 Oversight of the first line of defence to ensure that credit
risk remains within the appetite set by the Board and that
controls are being operated adequately and effectively.
 Assessing the adequacy of ECL provisions including
approving key IFRS 9 inputs (such as significant increase in
credit risk (SICR) thresholds) and any necessary in-model
and post model adjustments through NatWest Group and
business unit provisions and model committees.
 Development and approval of credit grading models.
Risk appetite
Credit risk appetite aligns to the strategic risk appetite set by
the Board and is set and monitored through risk appetite
frameworks tailored to NatWest Group’s Personal and
Wholesale segments.
Personal
The Personal credit risk appetite framework sets limits that
control the quality and concentration of both existing and new
business for each relevant business segment.
These risk appetite measures consider the segments’ ability to
grow sustainably and the level of losses expected under stress.
Credit risk is further controlled through operational limits
specific to customer or product characteristics.
Wholesale
For Wholesale credit, the framework has been designed to
reflect factors that influence the ability to operate within risk
appetite. Tools such as stress testing and economic capital are
used to measure credit risk volatility and develop links between
the framework and risk appetite limits.
Four formal frameworks are used, classifying, measuring and
monitoring credit risk exposure across single name, sector and
country concentrations and product and asset classes with
heightened risk characteristics.
The framework is supported by a suite of transactional
acceptance standards that set out the risk parameters within
which businesses should operate.
Credit policy standards are in place for both the Wholesale and
Personal portfolios. They are expressed as a set of mandatory
controls.
Identification and measurement
Credit stewardship (audited)
Risks are identified through relationship management and
credit stewardship of customers and portfolios. Credit risk
stewardship takes place throughout the customer relationship,
beginning with the initial approval. It includes the application of
credit assessment standards, credit risk mitigation and
collateral, ensuring that credit documentation is complete and
appropriate, carrying out regular portfolio or customer reviews
and problem debt identification and management.
Asset quality (audited)
All credit grades map to an asset quality (AQ) scale, used for
financial reporting. This AQ scale is based on Basel probability
of defaults. Performing loans are defined as AQ1-AQ9 (where
the probability of default (PD) is less than 100%) and defaulted
non-performing loans as AQ10 or Stage 3 under IFRS 9 (where
the PD is 100%). Loans are defined as defaulted when the
payment status becomes 90 days past due, or earlier if there is
clear evidence that the borrower is unlikely to repay, for
example bankruptcy or insolvency.
Counterparty credit risk
Counterparty credit risk arises from the obligations of
customers under derivative and securities financing
transactions.
NatWest Group mitigates counterparty credit risk through
collateralisation and netting agreements, which allow amounts
owed by NatWest Group to a counterparty to be netted against
amounts the counterparty owes NatWest Group.
Mitigation
Mitigation techniques, as set out in the appropriate credit
policies and transactional acceptance standards, are used in
the management of credit portfolios across NatWest Group.
These techniques mitigate credit concentrations in relation to
an individual customer, a borrower group or a collection of
related borrowers. Where possible, customer credit balances
are netted against obligations. Mitigation tools can include
structuring a security interest in a physical or financial asset,
the use of credit derivatives including credit default swaps,
credit-linked debt instruments and securitisation structures, and
the use of guarantees and similar instruments (for example,
credit insurance) from related and third parties.

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Financial review
Credit risk continued
Property is used to mitigate credit risk across a number of
portfolios, in particular residential mortgage lending and
commercial real estate (CRE).
The valuation methodologies for collateral in the form of
residential mortgage property and CRE are detailed below.
Residential mortgages – NatWest Group takes collateral in the
form of residential property to mitigate the credit risk arising
from mortgages. NatWest Group values residential property
individually during the loan underwriting process, either by
obtaining an appraisal by a suitably qualified appraiser (for
example, Royal Institution of Chartered Surveyors (RICS)) or
using a statistically valid model. In both cases, a sample of the
valuation outputs are periodically reviewed by an independent
RICS qualified appraiser. NatWest Group updates residential
property values quarterly using the relevant residential
property index namely:
Region
Index used
UK (including
Northern Ireland)
Office for National Statistics House
Price Index
Republic of Ireland
Central Statistics Office Residential
Property Price Index
The current indexed value of the property is a component of
the ECL provisioning calculation.
Commercial real estate valuations – NatWest Group has an
actively managed panel of chartered surveying firms that cover
the spectrum of geography and property sectors in which
NatWest Group takes collateral. Suitable RICS registered
valuers for particular assets are typically contracted through a
service agreement to ensure consistency of quality and advice.
Valuations are generally commissioned when an asset is taken
as security; a material increase in a facility is requested; or a
default event is anticipated or has occurred. In the UK, an
independent third-party market indexation is applied to update
external valuations once they are more than a year old and
every three years, a formal independent valuation review is
commissioned. In the Republic of Ireland, assets are revalued in
line with the Central Bank of Ireland threshold requirements,
which permits indexation for lower value residential assets, but
demands regular valuations for higher value assets.
Assessment and monitoring
Practices for credit stewardship – including credit assessment,
approval and monitoring as well as the identification and
management of problem debts – differ between the Personal
and Wholesale portfolios.
Personal
Personal customers are served through a lending approach
that entails offering a large number of small-value loans. To
ensure that these lending decisions are made consistently,
NatWest Group analyses internal credit information as well as
external data supplied by credit reference agencies (including
historical debt servicing behaviour of customers with respect to
both NatWest Group and other lenders). NatWest Group then
sets its lending rules accordingly, developing different rules for
different products.
The process is then largely automated, with each customer
receiving an individual credit score that reflects both internal
and external behaviours and this score is compared with the
lending rules set. For relatively high-value, complex personal
loans, including some residential mortgage lending, specialist
credit managers make the final lending decisions. These
decisions are made within specified delegated authority limits
that are issued dependent on the experience of the individual.
Underwriting standards and portfolio performance are
monitored on an ongoing basis to ensure they remain adequate
in the current market environment and are not weakened
materially to sustain growth. The actual performance of each
portfolio is tracked relative to operational limits. The limits
apply to a range of credit risk-related measures including
projected credit default rates across products and the loan-to-
value (LTV) ratio of the mortgage portfolios. Where operational
limits identify areas of concern management action is taken to
adjust credit or business strategy.
Wholesale
Wholesale customers – including corporates, banks and other
financial institutions – are grouped by industry sectors and
geography as well as by product/asset class and are managed
on an individual basis. Customers are aggregated as a single
risk when sufficiently interconnected.
A credit assessment is carried out before credit facilities are
made available to customers. The assessment process is
dependent on the complexity of the transaction. Credit
approvals are subject to environmental, social and governance
risk policies which restrict exposure to certain highly carbon
intensive industries as well as those with potentially heightened
reputational impacts. Customer specific climate risk
commentary is now mandatory.
In response to COVID-19, a new framework was introduced to
categorise clients in a consistent manner across the Wholesale
portfolio, based on the effect of COVID-19 on their financial
position and outlook in relation to the sector risk appetite. This
framework has been retained and updated to consider viability
impacts beyond those directly related to COVID-19 and
classification via the framework is now mandatory and must be
refreshed annually. The framework extends to all Wholesale
borrowing customers and supplements the Risk of Credit Loss
framework in assessing whether customers exhibit a SICR, if
support is considered to be granting forbearance and the time
it would take for customers to return to operating within
transactional acceptance standards. Tailored approaches were
also introduced for business banking, commercial real estate
and financial institution customers.
For lower risk transactions below specific thresholds, credit
decisions can be approved through self-sanctioning within the
business. This process is facilitated through an auto-decision
making system, which utilises scorecards, strategies and policy
rules. Such credit decisions must be within the approval
authority of the relevant business approver.
For all other transactions, credit is only granted to customers
following joint approval by an approver from the business and
the credit risk function or by two credit officers. The joint
business and credit approvers act within a delegated approval
authority under the Wholesale Credit Authorities Framework
Policy. The level of delegated authority held by approvers is
dependent on their experience and expertise with only a small
number of senior executives holding the highest approval
authority. Both business and credit approvers are accountable
for the quality of each decision taken, although the credit risk
approver holds ultimate sanctioning authority.
Transactional acceptance standards provide detailed
transactional lending and risk acceptance metrics and
structuring guidance. As such, these standards provide a
mechanism to manage risk appetite at the
customer/transaction level and are supplementary to the
established credit risk appetite.

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Financial review
Credit risk continued
Credit grades (PD) and loss given default (LGD) are reviewed
and if appropriate reapproved annually. The review process
assesses borrower performance, including reconfirmation or
adjustment of risk parameter estimates; the adequacy of
security; compliance with terms and conditions; and refinancing
risk.
Problem debt management
Personal
Early problem identification
Pre-emptive triggers are in place to help identify customers
that may be at risk of being in financial difficulty. These triggers
are both internal, using NatWest Group data, and external
using information from credit reference agencies. Proactive
contact is then made with the customer to establish if they
require help with managing their finances. By adopting this
approach, the aim is to prevent a customer’s financial position
deteriorating which may then require intervention from the
Collections and Recoveries teams.
Personal customers experiencing financial difficulty are
managed by the Collections team. If the Collections team is
unable to provide appropriate support after discussing suitable
options with the customer, management of that customer
moves to the Recoveries team. If at any point in the collections
and recoveries process, the customer is identified as being
potentially vulnerable, the customer will be separated from the
regular process and supported by a specialist team to ensure
the customer receives appropriate support for their
circumstances.
Collections
When a customer exceeds an agreed limit or misses a regular
monthly payment the customer is contacted by NatWest Group
and requested to remedy the position. If the situation is not
regularised then, where appropriate, the Collections team will
become more involved and the customer will be supported by
skilled debt management staff who endeavour to provide
customers with bespoke solutions. Solutions include short-term
account restructuring, refinance loans and forbearance which
can include interest suspension and ‘breathing space’. In the
event that an affordable/sustainable agreement with a
customer cannot be reached, the debt will transition to the
Recoveries team. For provisioning purposes, under IFRS 9,
exposure to customers managed by the Collections team is
categorised as Stage 2 and subject to a lifetime loss
assessment, unless it is 90 days past due or has an interest
non-accrual status, in which case it is categorised as Stage 3.
In the Republic of Ireland, the relationship may pass to a
specialist support team prior to any transfer to recoveries,
depending on the outcome of customer financial assessment.
Recoveries
The Recoveries team will issue a notice of intention to default to
the customer and, if appropriate, a formal demand, while also
registering the account with credit reference agencies where
appropriate. Following this, the customer’s debt may then be
placed with a third-party debt collection agency, or
alternatively a solicitor, in order to agree an affordable
repayment plan with the customer. An option that may also be
considered, is the sale of unsecured debt. Exposures subject to
formal debt recovery are defaulted and, under IFRS 9,
categorised as Stage 3.
Wholesale
Early problem identification
Each segment and sector have defined early warning indicators
to identify customers experiencing financial difficulty, and to
increase monitoring if needed. Early warning indicators may be
internal, such as a customer’s bank account activity, or
external, such as a publicly-listed customer’s share price. If
early warning indicators show a customer is experiencing
potential or actual difficulty, or if relationship managers or
credit officers identify other signs of financial difficulty, they
may decide to classify the customer within the Risk of Credit
Loss framework.
Risk of Credit Loss framework
The framework focuses on Wholesale customers whose credit
profiles have deteriorated materially since origination. Expert
judgment is applied by experienced credit risk officers to
classify cases into categories that reflect progressively
deteriorating credit risk to NatWest Group. There are two
classifications in the framework that apply to non-defaulted
customers – Heightened Monitoring and Risk of Credit Loss. For
the purposes of provisioning, all exposures subject to the
framework are categorised as Stage 2 and subject to a lifetime
loss assessment. The framework also applies to those
customers that have met NatWest Group’s default criteria
(AQ10 exposures). Defaulted exposures are categorised as
Stage 3 impaired for provisioning purposes.
Heightened Monitoring customers are performing customers
that have met certain characteristics, which have led to
significant credit deterioration. Collectively, characteristics
reflect circumstances that may affect the customer’s ability to
meet repayment obligations. Characteristics include trading
issues, covenant breaches, material PD downgrades and past
due facilities.
Heightened Monitoring customers require pre-emptive actions
(outside the customer’s normal trading patterns) to return or
maintain their facilities within NatWest Group’s current risk
appetite prior to maturity.
Risk of Credit Loss customers are performing customers that
have met the criteria for Heightened Monitoring and also pose
a risk of credit loss to NatWest Group in the next 12 months
should mitigating action not be taken or not be successful.
Once classified as either Heightened Monitoring or Risk of
Credit Loss, a number of mandatory actions are taken in
accordance with policies. Actions include a review of the
customer’s credit grade, facility and security documentation
and the valuation of security. Depending on the severity of the
financial difficulty and the size of the exposure, the customer
relationship strategy is reassessed by credit officers, by
specialist credit risk or relationship management units in the
relevant business, or by Restructuring.
Agreed customer management strategies are regularly
monitored by both the business and credit teams. The largest
Risk of Credit Loss exposures are regularly reviewed by a Risk
of Credit Loss forum. The forum members are experienced
credit, business and restructuring specialists. The purpose of
the forum is to review and challenge the strategies undertaken
for customers that pose the largest risk of credit loss to
NatWest Group.

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Credit risk continued
Appropriate corrective action is taken when circumstances
emerge that may affect the customer’s ability to service its debt
(refer to Heightened Monitoring characteristics). Corrective
actions may include granting a customer various types of
concessions. Any decision to approve a concession will be a
function of specific appetite, the credit quality of the customer,
the market environment and the loan structure and security. All
customers granted forbearance are classified Heightened
Monitoring as a minimum.
Other potential outcomes of the relationship review are to:
remove the customer from the Risk of Credit Loss framework,
offer additional lending and continue monitoring, transfer the
relationship to Restructuring if appropriate, or exit the
relationship.
The Risk of Credit Loss framework does not apply to problem
debt management for business banking customers. These
customers are, where necessary, managed by specialist
problem debt management teams, depending on the size of
exposure or by the business banking recoveries team where a
loan has been impaired.
Restructuring
Where customers are categorised as Risk of Credit Loss and
the lending exposure is above £1 million, relationships are
supported by the Restructuring team. The objective of
Restructuring is to protect NatWest Group’s capital.
Restructuring does this by working with corporate and
commercial customers in financial difficulty to help them
understand their options and how their restructuring or
repayment strategies can be delivered. Helping the customer
return to financial health and restoring a normal banking
relationship is always the preferred outcome, however, where a
solvent outcome is not possible, insolvency may be considered
as a last resort.
Restructuring will always aim to recover capital fairly and
efficiently. Throughout Restructuring’s involvement, the
mainstream relationship manager will remain an integral part
of the customer relationship. Restructuring’s work helps
NatWest Group remain safe and sustainable, contributing to its
ability to champion potential.
Forbearance (audited)
Forbearance takes place when a concession is made on the
contractual terms of a loan/debt in response to a customer’s
financial difficulties.
The aim of forbearance is to support and restore the customer
to financial health while minimising risk. To ensure that
forbearance is appropriate for the needs of the customer,
minimum standards are applied when assessing, recording,
monitoring and reporting forbearance.
A credit exposure may be forborne more than once, generally
where a temporary concession has been granted and
circumstances warrant another temporary or permanent
revision of the loan’s terms.
Loans are reported as forborne until they meet the exit criteria
as detailed in the appropriate regulatory guidance. These
include being classified as performing for two years since the
last forbearance event, making regular repayments and the
loan/debt being less than 30 days past due.
Types of forbearance
Personal
In the Personal portfolio, forbearance may involve payment
concessions and loan rescheduling (including extensions in
contractual maturity), capitalisation of arrears and, in the
Republic of Ireland only, temporary interest-only or partial
capital and interest arrangements. Forbearance support is
provided for both mortgages and unsecured lending.
Wholesale
In the Wholesale portfolio, forbearance may involve covenant
waivers, amendments to margins, payment concessions and
loan rescheduling (including extensions in contractual maturity),
capitalisation of arrears, and debt forgiveness or debt-for-
equity swaps.
Monitoring of forbearance
Personal
For Personal portfolios, forborne loans are separated and
regularly monitored and reported while the forbearance
strategy is implemented, until they exit forbearance.
Wholesale
In the Wholesale portfolio, customer PDs and facility LGDs are
reassessed prior to finalising any forbearance arrangement.
The ultimate outcome of a forbearance strategy is highly
dependent on the co-operation of the borrower and a viable
business or repayment outcome. Where forbearance is no
longer appropriate, NatWest Group will consider other options
such as the enforcement of security, insolvency proceedings or
both, although these are options of last resort.
Provisioning requirements on forbearance are detailed in the
Provisioning for forbearance section.
Credit grading models
Credit grading models is the collective term used to describe all
models, frameworks and methodologies used to calculate PD,
exposure at default (EAD), LGD, maturity and the production of
credit grades.
Credit grading models are designed to provide:
 An assessment of customer and transaction characteristics.
 A meaningful differentiation of credit risk.
 Accurate internal default rate, loss and exposure estimates
that are used in the capital calculation or wider risk
management purposes.
Impairment, provisioning and write-offs
(audited)
In the overall assessment of credit risk, impairment provisioning
and write-offs are used as key indicators of credit quality.
NatWest Group’s IFRS 9 provisioning models, which use existing
Basel models as a starting point, incorporate term structures
and forward-looking information. Regulatory conservatism
within the Basel models has been removed as appropriate to
comply with the IFRS 9 requirement for unbiased ECL
estimates.

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Credit risk continued
Five key areas may materially influence the measurement of
credit impairment under IFRS 9 – two of these relate to model
build and three relate to model application:
Model build:
 The determination of economic indicators that have most
influence on credit loss for each portfolio and the severity of
impact (this leverages existing stress testing models which
are reviewed annually).
 The build of term structures to extend the determination of
the risk of loss beyond 12 months that will influence the
impact of lifetime loss for exposures in Stage 2.
Model application:
 The assessment of the SICR and the formation of a
framework capable of consistent application.
 The determination of asset lifetimes that reflect behavioural
characteristics while also representing management actions
and processes (using historical data and experience).
 The choice of forward-looking economic scenarios and their
respective probability weights.
Refer to Accounting policy 11 for further details.
IFRS 9 ECL model design principles (audited)
Modelling of ECL for IFRS 9 follows the conventional approach
to divide the estimation of credit losses into its component parts
of PD, LGD and EAD.
To meet IFRS 9 requirements, the PD, LGD and EAD
parameters differ from their Pillar 1 internal ratings based
counterparts in the following aspects:
 Unbiased – material regulatory conservatism has been
removed from IFRS 9 parameters to produce unbiased
estimates.
 Point-in-time – IFRS 9 parameters reflect actual economic
conditions at the reporting date instead of long-run average
or downturn conditions.
 Forward-looking – IFRS 9 PD estimates and, where
appropriate, EAD and LGD estimates reflect forward-
looking economic conditions.
 Lifetime measurement – IFRS 9 PD, LGD and EAD are
provided as multi-period term structures up to exposure
lifetimes instead of over a fixed one-year horizon.
IFRS 9 requires that at each reporting date, an entity shall
assess whether the credit risk on an account has increased
significantly since initial recognition. Part of this assessment
requires a comparison to be made between the current lifetime
PD (i.e. the PD over the remaining lifetime at the reporting
date) and the equivalent lifetime PD as determined at the date
of initial recognition.
For assets originated before IFRS 9 was introduced,
comparable lifetime origination PDs did not exist. These have
been retrospectively created using the relevant model inputs
applicable at initial recognition.
PD estimates
Personal models
Personal PD models use the Exogenous, Maturity and Vintage
(EMV) approach to model default rates. The EMV approach
separates portfolio default risk trends into three components:
vintage effects (quality of new business over time), maturity
effects (changes in risk relating to time on book) and
exogenous effects (changes in risk relating to changes in
macro-economic conditions). The EMV methodology has been
widely adopted across the industry because it enables forward-
looking economic information to be systematically incorporated
into PD estimates.
Wholesale models
Wholesale PD models use a point-in-time/through-the-cycle
framework to convert one-year regulatory PDs into point-in-
time estimates that reflect economic conditions at the reporting
date. The framework utilises credit cycle indices (CCIs) for a
comprehensive set of region/industry segments. Further detail
on CCIs is provided in the Economic loss drivers section.
One year point-in-time PDs are extended to forward-looking
lifetime PDs using a conditional transition matrix approach and
a set of econometric forecasting models.
LGD estimates
The general approach for the IFRS 9 LGD models is to leverage
corresponding Basel LGD models with bespoke adjustments to
ensure estimates are unbiased and, where relevant, forward-
looking.
Personal
Forward-looking information has only been incorporated for the
secured portfolios, where changes in property prices can be
readily accommodated. Analysis has shown minimal impact of
economic conditions on LGDs for the other Personal portfolios.
Wholesale
Forward-looking economic information is incorporated into
LGD estimates using the existing CCI framework. For low
default portfolios, including sovereigns and banks, loss data is
too scarce to substantiate estimates that vary with economic
conditions. Consequently, for these portfolios, LGD estimates
are assumed to be constant throughout the projection horizon.
EAD estimates
Personal
The IFRS 9 Personal modelling approach for EAD is dependent
on product type.
 Revolving products use the existing Basel models as a basis,
with appropriate adjustments incorporating a term
structure based on time to default.
 Amortising products use an amortising schedule, where a
formula is used to calculate the expected balance based on
remaining terms and interest rates.
 There is no EAD model for Personal loans. Instead, debt
flow (i.e. combined PD x EAD) is modelled directly.
Analysis has indicated that there is minimal impact on EAD
arising from changes in the economy for all Personal portfolios
except mortgages. Therefore, forward-looking information is
only incorporated in the mortgage EAD model (through
forecast changes in interest rates).
Wholesale
For Wholesale, EAD values are projected using product specific
credit conversion factors (CCFs), closely following the product
segmentation and approach of the respective Basel model.
However, the CCFs are estimated over multi-year time horizons
and contain no regulatory conservatism or downturn
assumptions.
No explicit forward-looking information is incorporated, on the
basis of analysis showing the temporal variation in CCFs is
mainly attributable to changes in exposure management
practices rather than economic conditions.

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Governance and post model adjustments (audited)
The IFRS 9 PD, EAD and LGD models are subject to NatWest
Group’s model risk policy that stipulates periodic model
monitoring, periodic re-validation and defines approval
procedures and authorities according to model materiality.
Various post model adjustments were applied where
management judged they were necessary to ensure an
adequate level of overall ECL provision. All post model
adjustments were subject to formal approval through
provisioning governance, and were categorised as follows
(business level commentary is provided below):
 Deferred model calibrations – ECL adjustments where PD
model monitoring indicated that actual defaults were below
estimated levels but where it was judged that an implied
ECL release was not supportable due to the influence of
government support schemes. As a consequence, any
potential ECL release was deferred and retained on the
balance sheet.
 Economic uncertainty – ECL adjustments primarily arising
from uncertainties associated with multiple economic
scenarios (also for 2020) and credit outcomes as a result of
the effect of COVID-19 and the consequences of
government support schemes. In both cases, management
judged that additional ECL was required until further credit
performance data became available on the behavioural and
loss consequences of COVID-19.
 Other adjustments – ECL adjustments where it was judged
that the modelled ECL required to be amended.
Post model adjustments will remain a key focus area of NatWest
Group’s ongoing ECL adequacy assessment process. A holistic
framework has been established including reviewing a range of
economic data, external benchmark information and portfolio
performance trends, particularly with more observable
outcomes from the unwinding of COVID-19 support schemes. A
key part of the assessment is also understanding the current
levels of ECL coverage (portfolio by portfolio) against pre-
COVID-19 levels, recognising changes in franchise
portfolio/sector mix.
ECL post model adjustments
The table below shows ECL post model adjustments.
Retail Banking Wholesale Ulster Bank RoI
Mortgages
Other
Commercial
Other
Mortgages
Other
Total
2021
£m
£m
£m
£m £m £m
£m
Deferred model calibrations
58
97
62
—
—
2
219
Economic uncertainty
60
99
373
23 6 23
584
Other adjustments
37
—
2
3 156
—
198
Total
155
196
437
26 162 25
1,001
Of which:
-
Stage 1
9
5
13
2
4
1
34
- Stage 2
126
164
424
24
7
26
771
- Stage 3
20
27
—
—
151
(2)
196
2020
Deferred model calibrations
25
9
13
— — 2
49
Economic uncertainty
79
79
526
18 113 63
878
Other adjustments
20
—
19
3 26 —
68
Total
124
88
558
21 139 65
995
Of which:
-
Stage 1
21
8
37
2
15
—
83
- Stage 2
93
78
521
19
47
65
823
- Stage 3
10
2
—
—
77
—
89
(1) 2021 data excludes £49 million of post model adjustments (mortgages – £4 million; other – £45 million) for Ulster Bank RoI disclosed as discontinued operations.
While in aggregate the post model adjustments have only seen
a modest increase since 31 December 2020, there was an
increase on the proportion of ECL and notable shifts across and
within categories. These reflect:
 Changes in profile in Ulster Bank RoI to reflect both the
portfolio performance and the strategic shift to exit the
market.
 A modest reduction in the judgmental uncertainty post
model adjustments in the Wholesale portfolios, which was
directionally in line with the portfolio quality and some
reduction in uncertainty about recovery in affected sectors
in the economy.
 In the Retail Banking portfolio, to reflect a risk that default
levels were being unsustainably suppressed due to the
various temporary government led support schemes (with
the sustainability requiring further outcome data),
management effected a hold back of further modelled
releases judgmentally through the deferred model
calibrations category.
Retail Banking – The post model adjustment for deferred model
calibrations increased to £155 million from £34 million at 31
December 2020. This reflected management’s continued
judgment that the implied ECL decreases that continued to
manifest themselves through the standard PD model monitoring
process during the year, were not fully supportable.
Management retained this view on the basis that underlying
portfolio performance is believed to be underpinned by
government support schemes and further outcome data is
required on the level of default suppression.

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The post model adjustment for economic uncertainty remained
elevated at £159 million. The total included an ECL uplift of £26
million on a subset of customers who had accessed payment
holiday support where their risk profile was identified as
relatively high risk. In addition, NatWest Group continued to
retain a holdback of a modelled ECL release of £69 million,
again due to the delayed default emergence reflective of the
various customer support schemes (£15 million related to
mortgages and £54 million related to unsecured lending). The
year end overlay position also included an ECL uplift on buy-to-
let mortgages of £12 million to mitigate the risk of a
disproportionate credit deterioration in challenging economic
circumstances.
Other judgmental overlays increased due to the introduction of
a new post model adjustment of £14 million to capture the
impact of potential cladding risk in the portfolio.
Commercial Banking – The post model adjustment for
economic uncertainty reduced from £526 million to £373 million
during the year. It included an overlay of £328 million (£360
million across NatWest Group’s Wholesale portfolio) reflecting
continued concern that the unprecedented nature of COVID-19
might indicate that default level may be higher in future periods
above that currently expected. In addition, it reflected a risk
that government support schemes during COVID-19 could have
suppressed defaults that may materialise in future periods
above expected default levels. The reduction during the year
was mainly due to a sustained improvement in underlying
credit metrics which resulted in a decrease in Stage 2 assets
and reduced levels of uncertainty around economic outcome.
The post model adjustment also included an overlay of £7
million in respect of elevated concerns around borrowers’
ability to refinance facilities at the end of the contractual term.
The post model adjustment for deferred model calibrations on
the business banking portfolio increased to £62 million during
the year. This reflected management’s judgment that the
continued beneficial modelling impact, and implied ECL
decrease, remained unsupportable while portfolio performance
was being underpinned by the various support schemes.
Other adjustments included an overlay of £2 million to mitigate
the effect of operational timing delays in the identification and
flagging of a SICR. This reduced from £19 million at 31
December 2020, mainly as a result of a significantly reduced
Stage 2 population and lower defaults across the portfolio.
Ulster Bank RoI – Similar to Commercial Banking, the post
model adjustment for economic uncertainty included an
adjustment of £12 million reflecting concerns that the
unprecedented nature of COVID-19 could result in longer debt
recovery periods and lower values than history suggested. It
also included an adjustment of £9 million deferring the benefits
of improvements in economic forecasts given ongoing
uncertainty as well as an adjustment of £9 million in the SME
portfolio, reflective of the elevated risk for this sector. Other
judgmental overlays increased to £156 million from £26 million
reflected management opinion that continuing actions on the
phased withdrawal of Ulster Bank RoI from the Irish market will
lead to higher, and/or earlier, crystallisation of losses.
Other
– The post model adjustments held in other businesses
were for similar reasons as those described above.
Significant increase in credit risk (SICR)
(audited)
Exposures that are considered significantly credit deteriorated
since initial recognition are classified in Stage 2 and assessed
for lifetime ECL measurement (exposures not considered
deteriorated carry a 12 month ECL). NatWest Group has
adopted a framework to identify deterioration based primarily
on relative movements in lifetime PD supported by additional
qualitative backstops. The principles applied are consistent
across NatWest Group and align to credit risk management
practices, where appropriate.
The framework comprises the following elements:
 IFRS 9 lifetime PD assessment (the primary driver) – on
modelled portfolios, the assessment is based on the relative
deterioration in forward-looking lifetime PD and is assessed
monthly. To assess whether credit deterioration has
occurred, the residual lifetime PD at balance sheet date
(which PD is established at date of initial recognition (DOIR))
is compared to the current PD. If the current lifetime PD
exceeds the residual origination PD by more than a
threshold amount, deterioration is assumed to have
occurred and the exposure transferred into Stage 2 for a
lifetime loss assessment. For Wholesale, a doubling of PD
would indicate a SICR subject to a minimum PD uplift of
0.1%. For Personal portfolios, the criteria vary by risk band,
with lower risk exposures needing to deteriorate more than
higher risk exposures, as outlined in the following table:
 Qualitative high-risk backstops – the PD assessment is
complemented with the use of qualitative high-risk
backstops to further inform whether significant
deterioration in lifetime risk of default has occurred. The
qualitative high-risk backstop assessment includes the use
of the mandatory 30+ days past due backstop, as
prescribed by IFRS 9 guidance, and other features such as
forbearance support, Wholesale exposures managed within
the Risk of Credit Loss framework, and adverse credit
bureau results for Personal customers. Where a Personal
customer was granted a payment holiday (also referred to
as a payment deferral) in response to COVID-19, they were
not automatically transferred into Stage 2. However, a
subset of Personal customers who had accessed payment
holiday support, and where their risk profile was identified
as relatively high risk, were collectively migrated to Stage 2
(if not in Stage 2 already). Any support provided beyond
completion of the second payment holiday was considered
forbearance.
 Persistence (Personal and business banking customers only)
– the persistence rule ensures that accounts which have
met the criteria for PD driven deterioration are still
considered to be significantly deteriorated for three months
thereafter. This additional rule enhances the timeliness of
capture in Stage 2. The persistence rule is applied to PD
driven deterioration only.
Personal
risk bands
PD bandings (based
on residual lifetime
PD calculated at
DOIR)
PD deterioration
threshold criteria
Risk band A
<0.762%
PD@DOIR + 1%
Risk band B
<4.306%
PD@DOIR + 3%
Risk band C
>=4.306%
1.7 x PD@DOIR

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The criteria are based on a significant amount of empirical
analysis and seek to meet three key objectives:
 Criteria effectiveness – the criteria should be effective in
identifying significant credit deterioration and prospective
default population.
 Stage 2 stability – the criteria should not introduce
unnecessary volatility in the Stage 2 population.
 Portfolio analysis – the criteria should produce results which
are intuitive when reported as part of the wider credit
portfolio.
Provisioning for forbearance (audited)
Personal
The methodology used for provisioning in respect of Personal
forborne loans will differ depending on whether the loans are
performing or non-performing and which business is managing
them due to local market conditions.
Granting forbearance will only change the arrears status of the
loan in specific circumstances, which can include capitalisation
of principal and interest in arrears, where the loan may be
returned to the performing book if the customer has
demonstrated an ability to meet regular payments and is likely
to continue to do so.
The loan would continue to be reported as forborne until it
meets the exit criteria set out by the appropriate regulatory
guidance.
Additionally, for some forbearance types, a loan may be
transferred to the performing book if a customer makes
payments that reduce loan arrears below 90 days (Retail
Banking collections function).
For ECL provisioning, all forborne but performing exposures
are categorised as Stage 2 and are subject to a lifetime loss
provisioning assessment. Where the forbearance treatment
includes the cessation of interest on the customer balance (i.e.
non-accrual), this will be treated as a Stage 3 default.
For non-performing forborne loans, the Stage 3 loss
assessment process is the same as for non-forborne loans.
In the absence of any other forbearance or SICR triggers,
customers granted COVID-19 related payment holidays were
not considered forborne. However, any support provided
beyond completion of a second payment holiday is considered
forbearance.
Wholesale
Provisions for forborne loans are assessed in accordance with
normal provisioning policies. The customer’s financial position
and prospects – as well as the likely effect of the forbearance,
including any concessions granted, and revised PD or LGD
gradings – are considered in order to establish whether an
impairment provision increase is required.
Wholesale loans granted forbearance are individually credit
assessed in most cases. Performing loans subject to
forbearance treatment are categorised as Stage 2 and subject
to a lifetime loss assessment.
Forbearance may result in the value of the outstanding debt
exceeding the present value of the estimated future cash flows.
This difference will lead to a customer being classified as non-
performing.
In the case of non-performing forborne loans, an individual loan
impairment provision assessment generally takes place prior to
forbearance being granted. The amount of the loan impairment
provision may change once the terms of the forbearance are
known, resulting in an additional provision charge or a release
of the provision in the period the forbearance is granted.
The transfer of Wholesale loans from impaired to performing
status follows assessment by relationship managers and credit.
When no further losses are anticipated and the customer is
expected to meet the loan’s revised terms, any provision is
written-off or released and the balance of the loan returned to
performing status. This is not dependent on a specified time
period and follows the credit risk manager’s assessment.
Customers seeking COVID-19 related support, including
payment holidays, who were not subject to any wider SICR
triggers and who were assessed as having the ability in the
medium term post-COVID-19 to be viable and meet credit
appetite metrics, were not considered to have been granted
forbearance.
Asset lifetimes (audited)
The choice of initial recognition and asset duration is another
critical judgment in determining the quantum of lifetime losses
that apply.
 The date of initial recognition reflects the date that a
transaction (or account) was first recognised on the
balance sheet; the PD recorded at that time provides the
baseline used for subsequent determination of SICR as
detailed above.
 For asset duration, the approach applied (in line with IFRS 9
requirements) is:
 Term lending – the contractual maturity date, reduced
for behavioural trends where appropriate (such as,
expected prepayment and amortisation).
 Revolving facilities – for Personal portfolios (except
credit cards), asset duration is based on behavioural
life and this is normally greater than contractual life
(which would typically be overnight). For Wholesale
portfolios, asset duration is based on annual customer
review schedules and will be set to the next review
date.
In the case of credit cards, the most significant judgment is to
reflect the operational practice of card reissuance and the
associated credit assessment as enabling a formal re-
origination trigger. As a consequence, a capped lifetime
approach of up to 36 months is used on credit card balances. If
the approach was uncapped the ECL impact is estimated at
approximately £70 million (2020 – £110 million). However,
credit card balances originated under the 0% balance transfer
product, and representing approximately 13% of performing
card balances, have their ECL calculated on a behavioural
lifetime approach as opposed to being capped at a maximum
of three years.
The capped approach reflects NatWest Group practice of a
credit-based review of customers prior to credit card issuance
and complies with IFRS 9. Benchmarking information indicates
that peer UK banks use behavioural approaches in the main for
credit card portfolios with average durations between three
and ten years. Across Europe, durations are shorter and are, in
some cases, as low as one year.

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Economic loss drivers (audited)
Introduction
The portfolio segmentation and selection of economic loss
drivers for IFRS 9 follow closely the approach used in stress
testing. To enable robust modelling the forecasting models for
each portfolio segment (defined by product or asset class and
where relevant, industry sector and region) are based on a
selected, small number of economic factors, (typically three to
four) that best explain the temporal variations in portfolio loss
rates. The process to select economic loss drivers involves
empirical analysis and expert judgment.
The most material economic loss drivers are shown in the table
below.
Portfolio
Economic loss drivers
UK retail
mortgages
UK unemployment rate, sterling swap
rate, UK house price index, UK
household debt to income
UK retail
unsecured
UK unemployment rate, sterling swap
rate, UK household debt to income
UK large
corporates
World GDP, UK unemployment rate,
sterling swap rate, stock price index
UK commercial UK GDP, UK unemployment rate, sterling
swap rate
UK commercial
real estate
UK GDP, UK commercial property price
index, sterling swap rate, stock price
index
RoI retail
mortgages
RoI unemployment rate, European
Central Bank base rate, RoI house price
index
(1) This is not an exhaustive list of economic loss drivers but shows the most material
drivers for the most significant portfolios.
Economic scenarios
At 31 December 2021, the range of anticipated future economic
conditions was defined by a set of four internally developed
scenarios and their respective probabilities. In addition to the
base case, they comprised upside, downside and extreme
downside scenarios. The scenarios primarily reflected a range
of outcomes for the path of COVID-19 as well as recovery, and
the associated effects on labour and asset markets.
The four economic scenarios are translated into forward-looking
projections of CCIs using a set of econometric models.
Subsequently the CCI projections for the individual scenarios are
averaged into a single central CCI projection according to the
given scenario probabilities. The central CCI projection is then
overlaid with an additional mean reversion assumption i.e. that
after reaching their worst forecast position the CCIs start to
gradually revert to their long-run average of zero.
Upside – This scenario assumes a very strong recovery through
2022 as consumers dip into excess savings built up over the last
two years. The labour market remains resilient, with the
unemployment rate falling below pre-COVID-19 levels. Inflation
is higher than the base case but eventually comes back close to
the target. The strong economic recovery enables tightening to
be quicker than the base case. The housing market continues its
recent strong performance.
Base case – COVID-19 related risks remain contained. After a
strong recovery in 2021, the growth moderates in 2022. Most of
the furloughed workers can go back to their existing job or find
a new job very quickly, with the unemployment rate reaching
4.1% by the end of 2022. Inflation initially increases but retreats
over 2022. Interest rates are raised, starting in early 2022.
There is a gradual cool down in the housing market but activity
is still at healthy levels.
Downside – This scenario assumes a reversal in recovery as
inflation build up leads to a lessening of expectations. Interest
rates are raised aggressively to counter the inflation risks.
However, starting in 2023, the interest hikes are reversed to
assist the recovery. Unemployment is higher than the base case
and there is a modest decline in house prices.
Extreme downside – This scenario assumes a resurgence of
COVID-19 related risks. There is a renewed downturn with
declines in consumer spending and business investment. Interest
rates are reduced into negative territory to -0.5%. There is wide-
spread job shedding in the labour market while asset prices see
deep corrections, with housing market falls higher than those
seen during previous episodes. The recovery is tepid throughout
the five-year period, meaning only a gradual decline in
joblessness.
The approach of using four scenarios is similar to that as at 31
December 2020. Previously, NatWest Group used five discrete
scenarios to characterise the distribution of risks in the
economic outlook. For 2021, the four scenarios were deemed
appropriate in capturing the uncertainty in economic forecasts
and the non-linearity in outcomes under different scenarios.
These four scenarios were developed to provide sufficient
coverage across potential rises in unemployment, inflation, asset
price falls and the degree of permanent damage to the
economy, around which there remains pronounced levels of
uncertainty.

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Economic loss drivers (audited)
The tables and commentary below provide details of the key economic loss drivers under the four scenarios.
The main macroeconomic variables for each of the four scenarios used for ECL modelling are set out in the main macroeconomic
variables table below. The compound annual growth rate (CAGR) for GDP is shown. It also shows the five-year average for
unemployment and the Bank of England base rate. The house price index and commercial real estate figures show the total
change in each asset over five years.
Main macroeconomic variables
2021
2020
Extreme
Extreme
Upside Base case
Downside
downside
Upside Base case Downside downside
Five-year summary
% %
%
%
% % % %
UK
Republic of Ireland
GDP
-
CAGR
4.4 3.7
2.9
1.6
4.2 3.5 3.0 1.6
Unemployment - average 4.2 5.2
6.8
9.3
5.6 7.5 9.3 11.2
House price index - total change 30.3 23.4
16.3
4.6
21.0 13.3 6.8 (7.0)
European Central Bank base rate - average
0.8 0.1
0.2
—
0.1 — — —
World GDP - CAGR 3.5 3.2
2.6
0.6
3.5 3.4 2.9 2.8
Probability weight
30.0 45.0
20.0
5.0
20.0 40.0 30.0 10.0
(1) The five year period starts after Q3 2021 for 2021 and Q3 2020 for 2020.
(2) The Republic of Ireland unemployment rate in the table above and the tables that follow corresponds to the mid-point of the Irish Central Statistics Office lower and upper bound
unemployment rate measures.
Probability weightings of scenarios
NatWest Group’s approach to IFRS 9 multiple economic
scenarios (MES) involves selecting a suitable set of discrete
scenarios to characterise the distribution of risks in the
economic outlook and assigning appropriate probability weights.
The scale of the economic impact of COVID-19 and the range of
recovery paths necessitates a change of approach to assigning
probability weights from that used in recent updates. Prior to
2020, GDP paths for NatWest Group’s scenarios were compared
against a set of 1,000 model runs, following which a percentile
in the distribution was established that most closely
corresponded to the scenario.
Instead, NatWest Group has subjectively applied probability
weights, reflecting expert views within NatWest Group. The
probability weight assignment was judged to present good
coverage to the central scenarios and the potential for a robust
recovery on the upside and exceptionally challenging outcomes
on the downside. A 30% weighting was applied to the upside
scenario, a 45% weighting applied to the base case scenario, a
20% weighting applied to the downside scenario and a 5%
weighting applied to the extreme downside scenario. NatWest
Group assessed the downside risk posed by COVID-19 to be
diminishing over the course of 2021, with the vaccination roll-
out and positive economic data being observed since the
gradual relaxing of lockdown restrictions.
NatWest Group therefore judged it was appropriate to apply a
higher probability to upside-biased scenarios than at 31
December 2020. However, compared to 31 December 2020, the
base case has a higher weight reflecting reduction in
uncertainty as the path of economy recovery became clearer.
The 25% weighting to the two downside scenarios gives
appropriate consideration to the threats posed to the recovery,
including inflation, supply and COVID-19-related risks. Balanced
against that is the adaptability of the UK economy to successive
waves of COVID-19, and the resilience of labour and asset
markets. The potential for further better than expected
outcomes is reflected in the 30% probability weighting applied to
the upside scenario.
GDP - CAGR 2.4 1.7 1.4 0.6
3.6 3.1 2.8 1.3
Unemployment - average
3.5 4.2 4.8 6.7
4.4 5.7 7.1 9.7
House price index - total change
22.7 12.1 4.3 (5.3)
12.5 7.6 4.4 (19.0)
Bank of England base rate - average
1.5 0.8 0.7 (0.5)
0.2 — (0.1) (0.5)
Commercial real estate price - total change
18.2 7.2 5.5 (6.4)
4.3 0.7 (12.0) (31.5)

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Economic loss drivers
75
80
85
90
95
100
105
110
115
Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 Q4 2024 Q4 2025 Q4 2026
UK gross domestic product
Upside Base Downside Extreme downside
-0.75
-0.50
-0.25
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 Q4 2024 Q4 2025 Q4 2026
%
Bank of England base rate
Upside Base Downside Extreme downside

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Economic loss drivers (audited)
Annual figures
GDP - annual growth
Extreme Extreme
Upside
Base case
Downside downside Upside Base case Downside downside
UK
%
%
% %
Republic of Ireland
% % % %
2021
7.0
7.0
7.0 7.0
2021
15.1 15.1 15.1 15.1
2022
8.1
5.0
1.5 (3.6)
2022
8.9 6.8 2.9 (4.9)
2023
2.1
1.6
2.4 4.1
2023
5.8 4.1 3.8 5.3
2024
1.2
0.9
1.6 1.2
2024
3.0 3.1 3.3 3.1
2025
1.2
1.3
1.4 1.4
2025
2.9 3.1 3.1 3.2
2026
1.2
1.5
1.6 1.5
2026
2.8 2.7 2.7 3.1
Unemployment rate
-
annual average
Extreme Extreme
Upside
Base case
Downside downside Upside Base case Downside downside
UK
%
%
% %
Republic of Ireland
% % % %
2021
4.6
4.6
4.6 4.6
2021
11.2 11.2 11.2 11.2
2022
3.5
4.1
5.1 8.3
2022
4.5 5.5 8.8 13.7
2023
3.3
4.0
5.2 8.8
2023
4.1 5.3 7.2 10.2
2024
3.4
4.1
4.7 6.6
2024
4.0 5.1 6.3 8.4
2025
3.4
4.2
4.5 5.2
2025
4.0 5.0 5.7 7.5
2026
3.6
4.2
4.5 4.9
2026
4.0 5.0 5.5 7.0
House price index
-
four quarter
growth
Extreme Extreme
Upside
Base case
Downside downside Upside Base case Downside downside
UK
%
%
% %
Republic of Ireland
% % % %
2021
6.9
6.9
6.9 6.9
2021
12.9 12.9 12.9 12.9
2022
7.9
1.6
(2.9) (20.4)
2022
12.2 5.1 (3.3) (17.8)
2023
4.2
1.6
(0.2) (2.6)
2023
3.4 4.0 2.0 (4.7)
2024
3.1
2.9
1.7 13.0
2024
2.6 3.3 4.1 16.1
2025
3.0
2.7
3.0 4.7
2025
3.4 3.4 5.9 6.8
2026
3.0
2.7
3.0 3.6
2026
3.3 3.0 4.4 4.9
Commercial real estate price
-
four quarter
growth
Bank of England base rate
-
annual average
Extreme Extreme
Upside
Base case
Downside downside Upside Base case Downside downside
UK
%
%
% %
UK
% % % %
2022
1.02 0.63 1.06 (0.40)
2023
3.4
1.9
4.2 17.2
2023
1.58 1.00 1.06 (0.50)
2024
1.7
0.2
1.7 5.2
2024
1.75 1.00 0.50 (0.50)
2025
0.6
(0.8)
0.3 3.5
2025
1.75 0.90 0.50 (0.50)
2026
(0.8)
(0.8)
(0.2) 3.2
2026
1.75 0.75 0.50 (0.50)
Worst points
31 December 2021
31 December 2020
Extreme
Extreme
Downside downside
Downside downside
UK
%
Quarter
% Quarter
% Quarter %
Quarter
GDP
(1.8) Q1 2022 (7.9) Q1 2022
(5.1) Q1 2021 (10.4) Q1 2021
Unemployment rate (peak)
5.4 Q1 2023 9.4 Q4 2022
9.4 Q4 2021 13.9 Q3 2021
House price index
(3.0) Q3 2023 (26.0) Q2 2023
(11.2) Q2 2021 (32.0) Q4 2021
Commercial real estate price
(2.5) Q1 2022 (29.8) Q3 2022
(28.9) Q2 2021 (40.4) Q2 2021
Bank of England base rate
1.5 Q4 2022 (0.5) Q2 2022
(0.1) Q3 2021 (0.5) Q1 2021
Republic of Ireland
Unemployment rate (peak)
9.4 Q2 2022 15.1 Q2 2022
16.5 Q2 2020 18.1 Q4 2020
House price index
(0.1) Q4 2022 (25.1) Q2 2023
(13.3) Q3 2021 (27.0) Q4 2021
(1) For the unemployment rate, the figures show the peak levels. For the Bank of England base rate, the figures show highest or lowest levels. For other parameters, the figures show
falls relative to the starting period. The calculations are performed over five years, with a starting point of Q3 2021 for 31 December 2021 scenarios.
2021
8.4 8.4 8.4 8.4
GDP
(0.7) Q1 2022 (8.9) Q2 2022
(5.5) Q1 2021 (13.8) Q1 2021
2021
0.10 0.10 0.10 0.10
2022
10.2 4.4 (2.7) (29.8)

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 209
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Additional information
Financial review
Credit risk continued
Economic loss drivers (audited)
Use of the scenarios in Personal lending
Personal lending follows a discrete scenario approach. The PD
and LGD values for each discrete scenario are calculated using
product specific econometric models. Each account has a PD
and LGD calculated as probability weighted averages across
the suite of economic scenarios.
Use of the scenarios in Wholesale lending
The Wholesale lending ECL methodology is based on the
concept of credit cycle indices (CCIs). The CCIs represent,
similar to the exogenous component in Personal, all relevant
economic loss drivers for a region/industry segment
aggregated into a single index value that describes the loss
rate conditions in the respective segment relative to its long-run
average. A CCI value of zero corresponds to loss rates at long-
run average levels, a positive CCI value corresponds to loss
rates below long run average levels and a negative CCI value
corresponds to loss rates above long-run average levels.
The four economic scenarios are translated into forward-
looking projections of CCIs using a set of econometric models.
Subsequently the CCI projections for the individual scenarios
are averaged into a single central CCI projection according to
the given scenario probabilities. The central CCI projection is
then overlaid with an additional mean reversion assumption i.e.
that after one to two years into the forecast horizon the CCIs
start to gradually revert to their long-run average of zero.
Finally, ECL is calculated using a Monte Carlo approach by
averaging PD and LGD values arising from many CCI paths
simulated around the central CCI projection.
The rationale for the Wholesale approach is the long-standing
observation that loss rates in Wholesale portfolios tend to follow
regular cycles. This allows NatWest Group to enrich the range
and depth of future economic conditions embedded in the final
ECL beyond what would be obtained from using the discrete
macro-economic scenarios alone.
Business banking, while part of the Wholesale segment, for
reporting purposes, utilises the Personal lending rather than the
Wholesale lending methodology.
UK economic uncertainty
Treatment of COVID-19 relief mechanisms
Use of COVID-19 relief mechanisms (for example, payment
holidays, CBILS and BBLS) does not automatically merit
identification of a SICR and trigger a Stage 2 classification in
isolation. However, a subset of Personal customers who had
accessed payment holiday support, and where their risk profile
was identified as relatively high risk continue to be collectively
migrated into Stage 2 (if not already captured by other SICR
criteria).
For Wholesale customers, NatWest Group continues to provide
support, where appropriate, to existing customers. Those who
are deemed either (a) to require a prolonged timescale to
return to within NatWest Group’s risk appetite, (b) not to have
been viable pre-COVID-19, or (c) not to be able to sustain their
debt once COVID-19 is over, will trigger a SICR and, if
concessions are sought, be categorised as forborne, in line with
regulatory guidance. Payment holiday extensions beyond an
aggregate of 12 months in an 18 month period to cover
continuing COVID-19 business interruption are categorised as
forbearance, including for customers where no other SICR
triggers are present.
In February 2021, the British Business Bank announced details
of Pay As You Grow (PAYG) options for borrowers of BBLS.
The scheme options include the extension of lending terms,
periods of reduced repayments and six month payment
holidays. PAYG options are a feature of BBLS rather than a
concession granted by NatWest Group. It is therefore not
automatically considered significant credit deterioration and a
Stage 2 trigger. NatWest Group relies on both customer
attestations and existing credit monitoring procedures to
identify significant financial difficulty. Should signs of financial
stress be identified, a review is performed. If credit
deterioration is confirmed, existing problem debt management
journeys are followed and forbearance (if a concession is
granted) is marked in line with existing processes. This will
result in Stage 2 transfer.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 210
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Risk and capital management
Additional information
Financial review
Credit risk continued
Economic loss drivers (audited)
Model monitoring and enhancement
The severe economic impact from COVID-19 and the ensuing
government support schemes have disrupted the normal
relationships between key economic loss drivers and credit
outcomes. While most government support schemes have now
been phased out and economic conditions are normalising, the
effect of this disruption is still evident in model monitoring and
accounted for in judgments applied to the use and
recalibrations of models.
Most significantly, latest PD model monitoring shows general
overprediction across all key portfolios, i.e., observed default
rates still at or even below pre-COVID-19 levels despite
increased PD estimates from a deterioration in several key
economic variables. Model recalibrations to adjust for this
overprediction have been deferred based on the judgment that
default rate actuals are distorted due to government support.
In addition, to account for residual model uncertainty and the
risk of eventual default emergence hitherto supressed by
government support, lag assumptions of up to 12 months are
applied in the models. These assumptions are consistent with
and unchanged from previous disclosures in 2021, although
their effective impact gradually reduces over time.
Industry sector detail – Wholesale only
The economic impact of COVID-19 is highly differentiated by
industry sector, with hospitality and other contact-based
leisure, service, travel and passenger transport activities
significantly more affected than the overall economy. On the
other hand, the corporate and commercial econometric
forecasting models used in Wholesale are sector agnostic.
Sector performance was monitored throughout the year and
additional post model adjustments were recognised where a
risk of higher than expected future default levels, including their
timing and value, was identified.
Scenario sensitivity – Personal only
For the Personal lending portfolio, the forward-looking
components of the IFRS 9 PD models continue to be modified,
leveraging existing econometric models used in stress testing to
ensure that PDs appropriately reflect the forecasts for
unemployment and house prices in particular.
Additionally, post model ECL adjustments were made in
Personal to account for known model weaknesses pre-dating
COVID-19, pending the systematic re-development of the
underlying models.
Government guarantees
In April 2021, the UK government launched the Recovery Loan
Scheme, replacing previous support schemes which are now
closed. Consistent with CBILS and the Coronavirus Large
Business Interruption Loan Scheme (CLBILS), the government
guarantee is 80%. NatWest Group recognises lower LGDs for
these lending products as a result, with 0% applied to the
government-guaranteed part of the exposure. NatWest Group
does not directly adjust the measurement of PD due to the
government guarantee and continues to move exposures into
Stage 2 and Stage 3 where a significant deterioration in credit
risk or a default is identified.
Wholesale support schemes*
The table below shows the sector split for the Bounce Back Loan Scheme (BBLS) as well as associated debt split by stage.
Associated debt refers to the non-BBLS lending to customers who also have BBLS lending.
Gross Carrying Amount
Associated BBL and Of which:
BBL
debt
associated debt
Stage 1
Stage 2
Stage 3
31 December 2021
£m
£m £m £m £m £m
Wholesale
Property
1,797
1,452 3,249 2,712 383 154
Financial institutions
39
32 71 41 26 4
Soverign
8
2 10
7,070 1,795 417
Of which:
Airlines and aerospace
7
2
9
6
2
1
Automotive
373
160
533
429
81
23
Health
266
431
697
519
158
20
Land transport and logistics
231
85
316
237
58
21
Leisure
883
600
1,483
1,072
331
80
Oil and gas
11
4
15
11
3
1
Retail
956
445
1,401
1,110
236
55
Total
7,474
5,138 12,612 9,832 2,205 575
*Not within audit scope.
9 1 —
Corporate
5,630 3,652 9,282

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 211
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Risk and capital management
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Credit risk continued
Economic loss drivers (audited)
Gross Carrying Amount
Associated
BBL and Of which:
BBL
debt
associated debt
Stage 1 Stage 2 Stage 3
31 December 2020
£m
£m
£m £m £m £m
Wholesale
Property
1,996
1,801
3,797 2,603 1,146 48
Financial institutions
49
35
84 47 37 —
Soverign
11
2
13 12 1 —
Corporate
6,242
4,105
10,347 7,390 2,861 96
Of which:
Airlines and aerospace
7
3
10
7
3
—
Automotive
416
177
593
472
119
2
Health
314
510
824
470
343
11
Land transport and logistics
255
112
367
275
83
9
Leisure
989
712
1,701
1,191
477
33
Oil and gas
9
4
13
11
2
—
Retail
1,078
512
1,590
1,207
374
9
Total
8,298
5,943
14,241 10,052 4,045 144
(1) The Recovery Loan Scheme, a successor to the closed BBLS was launched on 6 April 2021. Uptake of the new scheme was minimal with 527 customers having drawn down £54
million as at 31 December 2021
Measurement uncertainty and ECL sensitivity
analysis (audited)
The recognition and measurement of ECL is complex and
involves the use of significant judgment and estimation,
particularly in times of economic volatility and uncertainty. This
includes the formulation and incorporation of multiple forward-
looking economic conditions into ECL to meet the measurement
objective of IFRS 9. The ECL provision is sensitive to the model
inputs and economic assumptions underlying the estimate.
The focus of the simulations is on ECL provisioning
requirements on performing exposures in Stage 1 and Stage 2.
The simulations are run on a stand-alone basis and are
independent of each other; the potential ECL impacts reflect
the simulated impact at 31 December 2021. Scenario impacts
on SICR should be considered when evaluating the ECL
movements of Stage 1 and Stage 2. In all scenarios the total
exposure was the same but exposure by stage varied in each
scenario.
Stage 3 provisions are not subject to the same level of
measurement uncertainty – default is an observed event as at
the balance sheet date. Stage 3 provisions therefore have not
been considered in this analysis.
The impact arising from the base case, upside, downside and
extreme downside scenarios has been simulated. These
scenarios are three of the four discrete scenarios used in the
methodology for Personal multiple economic scenarios as
described in the Economic loss drivers section. In the
simulations, NatWest Group has assumed that the economic
macro variables associated with these scenarios replace the
existing base case economic assumptions, giving them a 100%
probability weighting and therefore serving as a single
economic scenario.
These scenarios have been applied to all modelled portfolios in
the analysis below, with the simulation impacting both PDs and
LGDs. Modelled post model adjustments present in the
underlying ECL estimates are also sensitised in line with the
modelled ECL movements, but those that were judgmental in
nature, primarily those for deferred model calibrations and
economic uncertainty, were not (refer to the Governance and
post model adjustments section). As expected, the scenarios
create differing impacts on ECL by portfolio and the impacts
are deemed reasonable. In this simulation, it is assumed that
existing modelled relationships between key economic variables
and loss drivers hold, but in practice other factors would also
have an impact, for example, potential customer behaviour
changes and policy changes by lenders that might impact on
the wider availability of credit.
NatWest Group’s core criterion to identify a SICR is founded on
PD deterioration, as discussed above. Under the simulations,
PDs change and result in exposures moving between Stage 1
and Stage 2 contributing to the ECL impact.

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NatWest Group Annual Report and Accounts 2021 212
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Risk and capital management
Additional
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Financial review
Credit risk continued
Measurement uncertainty and ECL sensitivity analysis (audited)
Extreme
2021 Actual Base case
Upside
Downside
downside
Stage 1 modelled exposure (£m)
Retail Banking - mortgages
157,456 157,803
159,093
153,018
128,673
Retail Banking - unsecured
7,386 7,435
7,675
6,939
5,975
Wholesale
-
property
28,047 28,137
28,181
27,995
26,074
Wholesale - non-property
103,604 104,080
104,309
103,749
92,645
296,493
297,455
299,258
291,701
253,367
Stage 1 modelled ECL (£m)
Retail Banking - mortgages
13 12
11
14
22
Retail Banking - unsecured
112 109
107
107
95
Wholesale - property
24 22
26
21
20
Wholesale
-
non
-
property
112 113
112
114
98
261
256
256
256
235
Stage 2 modelled exposure (£m)
Retail Banking - mortgages
10,728 10,381
9,091
15,166
39,511
Retail Banking - unsecured
2,934 2,885
2,645
3,381
4,345
Wholesale - property
3,220 3,130
3,086
3,272
5,193
Wholesale - non-property
16,908 16,432
16,203
16,763
27,867
33,790
32,828
31,025
38,582
76,916
Stage 2 modelled ECL (£m)
Retail Banking - mortgages
155 152
135
177
379
Retail Banking - unsecured
435 435
413
475
562
Wholesale - property
109 105
99
110
191
Wholesale - non-property
701 674
666
680
989
1,400
1,366
1,313
1,442
2,121
Stage 1 and Stage 2 modelled exposure (£m)
Retail Banking - mortgages
168,184 168,184
168,184
168,184
168,184
Retail Banking - unsecured
10,320 10,320
10,320
10,320
10,320
Wholesale - property
31,267 31,267
31,267
31,267
31,267
Wholesale - non-property
120,512 120,512
120,512
120,512
120,512
330,283
330,283
330,283
330,283
330,283
Stage 1 and Stage 2 modelled ECL (£m)
Retail Banking - mortgages
168 164
146
191
401
Retail Banking - unsecured
547 544
520
582
657
Wholesale - property
133 127
125
131
211
Wholesale - non-property
813 787
778
794
1,087
1,661
1,622
1,569
1,698
2,356
Stage 1 and Stage 2 coverage (%)
Retail Banking - mortgages
0.10% 0.10%
0.09%
0.11%
0.24%
Retail Banking - unsecured
5.30% 5.27%
5.04%
5.64%
6.37%
Wholesale - property
0.43% 0.41%
0.40%
0.42%
0.67%
Wholesale - non-property
0.67% 0.65%
0.65%
0.66%
0.90%
0.50% 0.49%
0.48%
0.51%
0.71%
Reconciliation to Stage 1 and Stage 2 ECL (£m)
ECL on modelled exposures
1,661 1,622
1,569
1,698
2,356
ECL on Ulster Bank RoI modelled exposures
74 74
74
74
74
ECL on non-modelled exposures
45 45
45
45
45
Total Stage 1 and Stage 2 ECL
1,780 1,741
1,688
1,817
2,475
Variance
–
(lower)/higher to actual total Stage 1 and Stage 2
ECL
(39)
(92)
37
695
(1) Variations in future undrawn exposure values across the scenarios are modelled, however the exposure position reported is that used to calculate modelled ECL as at 31 December
2021 and therefore does not include variation in future undrawn exposure values.
(2) Reflects ECL for all modelled exposure in scope for IFRS 9. The analysis excludes non-modelled portfolios and exposure relating to bonds and cash.
(3) Exposures related to Ulster Bank RoI continuing operations have not been included in the simulations, the current Ulster Bank RoI ECL has been included across all scenarios to
enable reconciliation to other disclosures.
(4) All simulations are run on a stand-alone basis and are independent of each other, with the potential ECL impact reflecting the simulated impact as at 31 December 2021. The
simulations change the composition of Stage 1 and Stage 2 exposure but total exposure is unchanged under each scenario as the loan population is static.
(5) Refer to the Economic loss drivers section for details of economic scenarios.
(6) Refer to the NatWest Group 2020 Annual Report and Accounts for 2020 comparatives.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 213
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Risk and capital management
Additional
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Financial review
Credit risk continued
Measurement uncertainty and ECL adequacy
(audited)
 During 2021, both the Stage 2 size and overall modelled ECL
reduced as a result of the improved economic outlook and
scenario weightings, together with stable portfolio
performance. Judgmental ECL post model adjustments,
although reduced, continued to reflect residual economic
uncertainty with the expectation of increased defaults later
in 2022 and beyond, now representing 26% of total ECL
(2020 – 16%). These combined factors, in conjunction with a
less severe suite of economics in the 2021 extreme downside
scenario, contributed to a smaller range of ECL sensitivities
at 31 December 2021 compared to the 2020 year end.
 If the economics were as negative as observed in the
extreme downside, total Stage 1 and Stage 2 ECL was
simulated to increase by £0.7 billion (approximately 39%). In
this scenario, Stage 2 exposure increased significantly and
was the key driver of the simulated ECL rise. The movement
in Stage 2 balances in the other simulations was less
significant.
 In the Wholesale portfolios, the outcome range of scenarios,
except for the extreme downside, was relatively narrow.
This was due to the combined effect of the assumption that
government support schemes will delay defaults, mean
reversion of CCIs and that only in the extreme downside
CCIs do deteriorate beyond their year-end starting point.
 The lower modelled ECL in the downside scenario for
Wholesale compared to the actual central scenario reflected
the net effect of the MES weightings towards the downside
for ECL.
Single factor sensitivity
In addition to scenario sensitivity, NatWest Group uses single
factor analysis to support its evaluation and governance. This
covers changes such as the variation of an individual input
parameter (economic or credit) or a change of scenario
weightings. The application of single factor analysis recognises
the limitation that it is not normal for one single factor to vary in
isolation, but can help identify possible risks in the credit
portfolios.
At 31 December 2021, NatWest Group considered the effect of
moving the unemployment peak in the base case from 4.1% to
7.5% in 2022 but without changing expectations in subsequent
years. This had the effect of increasing ECL requirement by
approximately 4.5% and 2.5% for the UK Retail and Wholesale
portfolios respectively.
The lower effect on the Wholesale portfolio reflected that
unemployment is not a significant loss driver for property
exposures nor some of NatWest Group’s specialised lending
areas.
The improvement in the economic outlook and scenarios used in
the IFRS 9 MES framework in 2021 resulted in a release of
modelled ECL. Given that continued uncertainty remains due to
COVID-19 despite the improved economic outlook, NatWest
Group utilised a framework of quantitative and qualitative
measures to support the directional change and levels of ECL
coverage, including economic data, credit performance insights
and problem debt trends. This was particularly important for
consideration of post model adjustments.
As government support schemes continued to conclude during
2021, NatWest Group anticipates further credit deterioration in
the portfolios. However, the income statement effect of this will
be mitigated by the forward-looking provisions retained on the
balance sheet as at 31 December 2021.
There are a number of key factors that could drive further
downside to impairments, through deteriorating economic and
credit metrics and increased stage migration as credit risk
increases for more customers. A key factor would be a more
adverse deterioration in GDP and unemployment in the
economies in which NatWest Group operates, but also, among
others:
 The ongoing trajectory of lockdown restrictions within the
UK and the Republic of Ireland, and any future repeated
lockdown requirements.
 The progress of the COVID-19 vaccination roll-out and its
effectiveness against new variants.
 The long-term efficacy of the various government support
schemes in terms of their ability to defray customer defaults
is yet to be proven over an extended period.
 The effect on customer affordability in the event of sustained
inflationary pressures.
 The level of revenues lost by corporate clients and pace of
recovery of those revenues may affect NatWest Group’s
clients’ ability to service their borrowing, especially in those
sectors most exposed to the effects of COVID-19.
Movement in ECL provision*
The table below shows the main ECL provision movements.
ECL provision
£m
At 1 January 2021
6,186
Transfers to disposal groups
(166)
Changes in economic forecasts
(611)
Changes in risk metrics and exposure: Stage 1 and Stage 2 (931)
Changes in risk metrics and exposure: Stage 3 374
Judgmental changes: changes in post model adjustments for Stage 1, Stage 2 and Stage 3
6
Write-offs and other
(1,052)
At 31 December 2021
3,806
At 1 January 2020
3,792
2020 movements
2,394
At 31 December 2020
6,186
*Not within audit scope.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 214
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Risk and capital management
Additional information
Financial review
Credit risk – Banking activities
Introduction
This section details the credit risk profile of NatWest Group’s banking activities. Refer to Accounting policy 11 and Note 15 to the
consolidated financial statements for policies and critical judgments relating to impairment loss determination.
Presentation of discontinued operations and assets and liabilities of disposal groups
Two legally binding agreements for the sale of the UBIDAC business were announced in 2021 as part of the phased withdrawal
from the Republic of Ireland: The sale of commercial lending to Allied Irish Banks p.l.c. and the performing non-tracker mortgages,
performing micro-SME loans, UBIDAC’s asset finance business and 25 of its branch locations to Permanent TSB p.l.c.. The business
activities relating to these sales that meet the requirements of IFRS 5 are presented as a discontinued operation and as a disposal
group on 31 December 2021. The Ulster Bank RoI operating segment continues to be reported separately and reflects the results
of its continuing operations.
Refer to Note 8 to the consolidated financial statements for further details.
Financial instruments within the scope of the IFRS 9 ECL framework (audited)
Refer to Note 10 to the consolidated financial statements for balance sheet analysis of financial assets that are classified as
amortised cost or fair value through other comprehensive income (FVOCI), the starting point for IFRS 9 ECL framework
assessment. The table below excludes loans in disposal group of £9.1 billion.
Financial assets
31 December 2021
31 December 2020
Gross ECL Net
Gross ECL Net
£bn £bn £bn
£bn £bn £bn
Balance sheet total gross amortised cost and FVOCI
596.1
555.0
In scope of IFRS 9 ECL framework 590.9
548.8
% in scope
99%
99%
Loans to customers - in scope - amortised cost
361.9 3.7 358.2
365.5 6.0 359.5
Loans to customers - in scope - FVOCI
0.3 — 0.3
— — —
Loans to banks - in scope - amortised cost
7.6 — 7.6
6.8 — 6.8
Total loans - in scope
369.8 3.7 366.1
372.3 6.0 366.3
Stage 1
330.8 0.3 330.5
287.1 0.5 286.6
Stage 2
34.0 1.4 32.6
78.9 3.0 75.9
Stage 3
5.0 2.0 3.0
6.3 2.5 3.8
Other financial assets - in scope - amortised cost
184.4 — 184.4
132.1 — 132.1
Other financial assets - in scope - FVOCI 36.7 — 36.7
44.4 — 44.4
Total other financial assets - in scope
221.1 — 221.1
176.5 — 176.5
Stage 1
220.8 — 220.8
175.5 — 175.5
Stage 2 0.3 — 0.3
1.0 — 1.0
Out of scope of IFRS 9 ECL framework
5.2 na 5.2
6.2 na 6.2
Loans to customers - out of scope - amortised cost 0.8 na 0.8
1.0 na 1.0
Loans to banks - out of scope - amortised cost
0.1 na 0.1
0.1 na 0.1
Other financial assets - out of scope - amortised cost
4.0 na 4.0
4.6 na 4.6
Other financial assets - out of scope - FVOCI
0.3 na 0.3
0.5 na 0.5
na = not applicable
The assets outside the scope of IFRS 9 ECL framework were as
follows:
 Settlement balances, items in the course of collection, cash
balances and other non-credit risk assets of £3.7 billion
(2020 – £4.1 billion). These were assessed as having no ECL
unless there was evidence that they were defaulted.
 Equity shares of £0.3 billion (2020 – £0.3 billion) as not
within the IFRS 9 ECL framework by definition.
 Fair value adjustments on loans and debt securities hedged
by interest rate swaps, where the underlying loan was
within the IFRS 9 ECL scope – £0.8 billion (2020 – £1.4
billion).
 NatWest Group originated securitisations, where ECL was
captured on the underlying loans of £0.4 billion (2020 – £0.4
billion).
Contingent liabilities and commitments
In addition to contingent liabilities and commitments disclosed
in Note 27 to the consolidated financial statements,
reputationally-committed limits are also included in the scope of
the IFRS 9 ECL framework. These were offset by £0.8 billion
(2020 – £0.2 billion) out of scope balances primarily related to
facilities that, if drawn, would not be classified as amortised
cost or FVOCI, or undrawn limits relating to financial assets
exclusions. Total contingent liabilities (including financial
guarantees) and commitments within IFRS 9 ECL scope of
£127.9 billion (2020 – £133.6 billion) comprised Stage 1 £119.5
billion (2020 – £107.4 billion); Stage 2 £7.8 billion (2020 – £25.2
billion); and Stage 3 £0.6 billion (2020 – £1.0 billion).
The ECL relating to off balance sheet exposures is £0.1 billion
(2020 - £0.2 billion). The total ECL in the remainder of the
credit risk section of £3.8 billion included ECL for both on and
off balance sheet exposures for continuing operations.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 215
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Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Segment analysis – portfolio summary (audited)
The table below shows gross loans and ECL, by segment and stage, within the scope of the IFRS 9 ECL framework.
Go
-
forward group
Total
Ulster
Retail
Private
Commercial
RBS
NatWest
Central items
excluding
Bank
Banking
Banking
Banking
International
Markets
& other
Ulster Bank RoI
RoI
Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
Loans - amortised cost and FVOCI
Stage 1
168,013 17,600 82,893 16,185 8,290 32,283 325,264 5,560 330,824
Stage 2
13,594 967 17,853 477 147 90 33,128 853 33,981
Stage 3
1,884 270 1,820 162 99
—
4,235 787 5,022
Of which: individual
—
270
631
162
91
—
1,154
61
1,215
Of which: collective
1,884
—
1,189
—
8
—
3,081
726
3,807
Subtotal excluding
disposal group loans
183,491
18,837
102,566
16,824
8,536
32,373
362,627
7,200
369,827
Disposal group loans
9,084
9,084
Total
16,284 378,911
ECL provisions (1)
Stage 1
134 12 116 7 6 17 292 10 302
Stage 2
590 29 758 23 3 11 1,414 64 1,478
Stage 3
850 37 651 25 75
—
1,638 388 2,026
Of which: individual
—
37
221
25
67
—
350
13
363
Of which: collective
850
—
430
—
8
—
1,288
375
1,663
Subtotal excluding ECL provisions
on disposal group loans
1,574
78
1,525
55
84
28
3,344
462
3,806
ECL on disposal group loans
109
109
Total
571 3,915
ECL provisions coverage (2)
Stage 1 (%)
0.08 0.07 0.14 0.04 0.07 0.05 0.09 0.18 0.09
Stage 2 (%)
4.34 3.00 4.25 4.82 2.04 12.22 4.27 7.50 4.35
Stage 3 (%)
45.12 13.70 35.77 15.43 75.76
—
38.68 49.30 40.34
ECL provisions coverage excluding
disposal group loans
0.86
0.41
1.49
0.33
0.98
0.09
0.92
6.42
1.03
ECL provisions coverage on
disposal group loans
1.20
1.20
Total
3.51 1.03
Impairment (releases)/losses
ECL (release)/charge (3)
(36) (54) (1,073) (52) (35)
—
(1,250) (28) (1,278)
Stage 1
(387) (45) (818) (39) (15) (3) (1,307) (70) (1,377)
Stage 2
157 (15) (272) (16) (11) 3 (154) (33) (187)
Stage 3
194 6 17 3 (9)
—
211 75 286
Of which: individual
—
6
19
3
(6)
—
22
(2)
20
Of which: collective
194
—
(2)
—
(3)
—
189
77
266
Continuing operations
(36)
(54)
(1,073)
(52)
(35)
—
(1,250)
(28)
(1,278)
Discontinued operations
(57)
(57)
Total
(85) (1,335)
Amounts written-off
220 6 467 28 67
—
788 88 876
Of which: individual
—
6
378
28
43
—
455
—
455
Of which: collective
220
—
89
—
24
—
333
88
421
For the notes to this table refer to the following page.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 216
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Segment analysis – portfolio summary (audited)
Go
-
forward group
Total
Ulster
Retail
Private
Commercial
RBS
NatWest
Central
items
excluding
Bank
Banking
Banking
Banking
International
Markets
& other
Ulster Bank RoI
RoI
Total
2020
£m
£m
£m
£m
£m
£m
£m
£m
£m
Loans - amortised cost and FVOCI
Stage 1
139,956 15,321 70,685 12,143 7,780 26,859 272,744 14,380 287,124
Stage 2
32,414 1,939 37,344 2,242 1,566 110 75,615 3,302 78,917
Stage 3
1,891 298 2,551 211 171 — 5,122 1,236 6,358
Of which: individual
—
298
1,578
211
162
—
2,249
43
2,292
Of which: collective
1,891
—
973
—
9
—
2,873
1,193
4,066
174,261 17,558 110,580 14,596 9,517 26,969 353,481 18,918 372,399
ECL provisions
(1)
Stage 1
134 31 270 14 12 13 474 45 519
Stage 2
897 68 1,713 74 49 15 2,816 265 3,081
Stage 3
806 39 1,069 48 132 — 2,094 492 2,586
Of which: individual
—
39
607
48
124
—
818
13
831
Of which: collective
806
—
462
—
8
—
1,276
479
1,755
1,837 138 3,052 136 193 28 5,384 802 6,186
ECL provisions coverage (2)
Stage 1 (%)
0.10 0.20 0.38 0.12 0.15 0.05 0.17 0.31 0.18
Stage 2 (%)
2.77 3.51 4.59 3.30 3.13 13.64 3.72 8.03 3.90
Stage 3 (%)
42.62 13.09 41.91 22.75 77.19 — 40.88 39.81 40.67
1.05 0.79 2.76 0.93 2.03 0.10 1.52 4.24 1.66
Impairment (releases)/losses
ECL (release)/charge (3,4)
792 100 1,927 107 40 26 2,992 139 3,131
Stage 1
(36) 25 (58) 8 (2) 10 (53) (36) (89)
Stage 2
619 60 1,667 71 54 15 2,486 115 2,601
Stage 3
209 15 318 28 (12) 1 559 60 619
Of which: individual
—
15
166
28
(3)
—
206
(12)
194
Of which: collective
209
—
152
—
(9)
1
353
72
425
Continuing operations
792 100 1,927 107 40 26 2,992 139 3,131
Discontinued operations
111 111
Total
250 3,242
Amounts written
-
off
378 5 321 3 11 — 718 219 937
Of which: individual
—
5
172
3
11
—
191
—
191
Of which: collective
378
—
149
—
—
—
527
219
746
(1) Includes £5 million (2020 – £6 million) related to assets classified as FVOCI.
(2) ECL provisions coverage is calculated as ECL provisions divided by loans – amortised cost and FVOCI. It is calculated on third party loans and total ECL provisions.
(3) Includes a £3 million charge (2020 – £12 million charge) related to other financial assets, of which £2 million release (2020 – £2 million charge) related to assets classified as FVOCI;
and £34 million release (2020 – £28 million charge) related to contingent liabilities.
(4) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(5) The table shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to the Financial instruments within the scope of the IFRS 9 ECL
framework section for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £176.3 billion (2020 –
£122.7 billion) and debt securities of £44.9 billion (2020 – £53.8 billion).
 Stage 1 and Stage 2 ECL reduced significantly during 2021,
with sustained improvement in underlying risk metrics
mainly due to the improved economic outlook and
underpinned by various government support schemes.
 The Stage 2 population reduced reflecting lower underlying
PDs, resulting in migration of cases back into Stage 1.
However, the Stage 2 population remained above pre-
COVID-19 levels.
 Stage 3 loans and ECL balances reduced, mainly due to
write-off, repayment of defaulted debt and portfolio sale of
defaulted debt. To date, the various COVID-19 related
government support schemes have mitigated new flows into
default. It is expected that defaults will increase as the
effect of the various government support schemes unwinds.
The table below shows Ulster Bank RoI disposal groups for Personal and Wholesale, by stage, for gross loans, off-balance sheet
exposures and ECL. The tables in the rest of the Credit risk section are shown on a continuing basis and therefore exclude these
exposures.
Loans - amortised cost Off-balance sheet
and FVOCI Loan
Contingent
ECL provisions
Stage 1 Stage 2 Stage 3 Total commitments liabilities Stage 1 Stage 2 Stage 3 Total
2021
£m £m £m £m £m £m £m £m £m £m
Personal
5,547 210 34 5,791
—
—
4 6 7 17
Wholesale
2,647 639 7 3,293 1,665 115 10 78 4 92
Total
8,194 849 41 9,084 1,665 115 14 84 11 109

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 217
Financial
statements
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Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Segmental loans and impairment metrics (audited)
The table below shows gross loans and ECL provisions, by days past due, by segment and stage, within the scope of the ECL
framework.
Gross loans ECL provisions
(2)
Stage 2
(1)
Stage 2
(1)
Not past
Not past
Stage 1
due
1
-
30 DPD
>30 DPD
Total
Stage 3
Total
Stage 1
due
1
-
30 DPD
>30 DPD
Total
Stage 3
Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Retail Banking
168,013 12,275
863
456 13,594
1,884
183,491 134
516
38 36 590
850
1,574
Private Banking
17,600 902
27
38 967
270
18,837 12
29
—
—
29
37
78
Personal
14,350
137
24
11
172
232
14,754
6
2
—
—
2
18
26
Wholesale
3,250
765
3
27
795
38
4,083
6
27
—
—
27
19
52
Commercial
Banking
82,893 16,792
437
624 17,853
1,820
102,566 116
724
23 11 758
651
1,525
RBS International
16,185 431
18
28 477
162
16,824 7
23
—
—
23
25
55
Personal
2,647
21
17
11
49
57
2,753
2
1
—
—
1
10
13
Wholesale
13,538
410
1
17
428
105
14,071
5
22
—
—
22
15
42
NatWest Markets
8,290 129
—
18 147
99
8,536 6
3
—
—
3
75
84
Ulster Bank RoI
5,560 747
58
48 853
787
7,200 10
58
3 3 64
388
462
Personal
5,165
510
52
46
608
609
6,382
7
15
3
3
21
301
329
Wholesale
395
237
6
2
245
178
818
3
43
—
—
43
87
133
Central items
& other
32,283 90
—
—
90
—
32,373 17
11
—
—
11
—
28
Total loans
330,824 31,366
1,403
1,212 33,981
5,022
369,827 302
1,364
64 50 1,478
2,026
3,806
Of which:
Personal
190,175
12,943
956
524
14,423
2,782
207,380
149
534
41
39
614
1,179
1,942
Wholesale
140,649
18,423
447
688
19,558
2,240
162,447
153
830
23
11
864
847
1,864
2020
Retail Banking
139,956 30,714
1,080
620 32,414
1,891
174,261 134
762
70 65 897
806
1,837
Private Banking
15,321 1,908
17
14 1,939
298
17,558 31
67
— 1 68
39
138
Personal
12,799
116
17
11
144
263
13,206
7
2
—
—
2
19
28
Wholesale
2,522
1,792
—
3
1,795
35
4,352
24
65
—
1
66
20
110
Commercial Banking
70,685 36,451
589
304 37,344
2,551
110,580 270
1,648
44 21 1,713
1,069
3,052
RBS International
12,143 2,176
46
20 2,242
211
14,596 14
72
1 1 74
48
136
Personal
2,676
18
17
14
49
70
2,795
3
1
—
—
1
11
15
Wholesale
9,467
2,158
29
6
2,193
141
11,801
11
71
1
1
73
37
121
NatWest Markets
7,780 1,457
—
109 1,566
171
9,517 12
49
— — 49
132
193
Ulster Bank RoI
14,380 2,964
144
194 3,302
1,236
18,918 45
227
15 23 265
492
802
Personal
11,117
1,500
115
130
1,745
1,064
13,926
27
74
9
13
96
392
515
Wholesale
3,263
1,464
29
64
1,557
172
4,992
18
153
6
10
169
100
287
Central items & other
26,859 110
—
— 110
—
26,969 13
15
— — 15
—
28
Total loans
287,124 75,780
1,876
1,261 78,917
6,358
372,399 519
2,840
130 111 3,081
2,586
6,186
Of which:
Personal
166,548
32,348
1,229
775
34,352
3,288
204,188
171
839
79
78
996
1,228
2,395
Wholesale
120,576
43,432
647
486
44,565
3,070
168,211
348
2,001
51
33
2,085
1,358
3,791
2019
Retail Banking
144,513 11,921
1,034
603 13,558
1,902
159,973 114
375
45 47 467
823
1,404
Private Banking
14,956 478
63
46 587
207
15,750 7
6
— 1 7
29
43
Personal
11,630
180
60
41
281
192
12,103
3
2
—
1
3
23
29
Wholesale
3,326
298
3
5
306
15
3,647
4
4
—
—
4
6
14
Commercial Banking
88,100 10,837
254
262 11,353
2,162
101,615 152
195
12 7 214
1,021
1,387
RBS International
14,834 520
18
7 545
121
15,500 4
6
— — 6
21
31
Personal
2,799
27
17
6
50
65
2,914
1
1
—
—
1
12
14
Wholesale
12,035
493
1
1
495
56
12,586
3
5
—
—
5
9
17
NatWest Markets
9,273 176
4
— 180
169
9,622 10
5
— — 5
131
146
Ulster Bank RoI
15,409 1,405
104
133 1,642
2,037
19,088 29
39
6 8 53
693
775
Personal
10,858
944
96
105
1,145
1,877
13,880
12
20
6
6
32
591
635
Wholesale
4,551
461
8
28
497
160
5,208
17
19
—
2
21
102
140
Central items & other
15,282 3
—
— 3
—
15,285 6
—
— — —
—
6
Total loans
302,367 25,340
1,477
1,051 27,868
6,598
336,833 322
626
63 63 752
2,718
3,792
Of which:
Personal
169,800
13,072
1,207
755
15,034
4,036
188,870
130
398
51
54
503
1,449
2,082
Wholesale
132,567
12,268
270
296
12,834
2,562
147,963
192
228
12
9
249
1,269
1,710
For the notes to this table refer to the following page.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 218
Financial
statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Segmental loans and impairment metrics (audited)
The table below shows ECL and ECL provisions coverage, by days past due, by segment and stage, within the scope of the ECL
framework.
ECL provisions coverage
ECL
Stage 2
(1,2)
Total
Not past
(release) /
Amounts
Stage 1
due
1
-
30 DPD
>30 DPD
Total
Stage 3
Total
charge
(3)
written
-
off
2021
%
%
%
%
%
%
%
£m
£m
Retail Banking
0.08
4.20 4.40 7.89 4.34 45.12 0.86 (36) 220
Private Banking
0.07
3.22
—
—
3.00 13.70 0.41 (54) 6
Personal
0.04
1.46
—
—
1.16
7.76
0.18
1
3
Wholesale
0.18
3.53
—
—
3.40
50.00
1.27
(55)
3
Commercial Banking
0.14
4.31 5.26 1.76 4.25 35.77 1.49 (1,073) 467
RBS International
0.04
5.34
—
—
4.82 15.43 0.33 (52) 28
Personal
0.08
4.76
—
—
2.04
17.54
0.47
—
1
Wholesale
0.04
5.37
—
—
5.14
14.29
0.30
(52)
27
NatWest Markets
0.07
2.33
—
—
2.04 75.76 0.98 (35) 67
Ulster Bank RoI
0.18
7.76 5.17 6.25 7.50 49.30 6.42 (28) 88
Personal
0.14
2.94
5.77
6.52
3.45
49.43
5.16
(7)
76
Wholesale
0.76
18.14
—
—
17.55
48.88
16.26
(21)
12
Central items & other
0.05
12.22
—
—
12.22
—
0.09
—
—
Total loans
0.09
4.35 4.56 4.13 4.35 40.34 1.03 (1,278) 876
Of which:
Personal
0.08
4.13
4.29
7.44
4.26
42.38
0.94
(42)
300
Wholesale
0.11
4.51
5.15
1.60
4.42
37.81
1.15
(1,236)
576
2020
Retail Banking
0.10
2.48 6.48 10.48 2.77 42.62 1.05 792 378
Private Banking
0.20
3.51 — 7.14 3.51 13.09 0.79 100 5
Personal
0.05
1.72
—
—
1.39
7.22
0.21
(5)
1
Wholesale
0.95
3.63
—
33.33
3.68
57.14
2.53
105
4
Commercial Banking
0.38
4.52 7.47 6.91 4.59 41.91 2.76 1,927 321
RBS International
0.12
3.31 2.17 5.00 3.30 22.75 0.93 107 3
Personal
0.11
5.56
—
—
2.04
15.71
0.54
4
3
Wholesale
0.12
3.29
3.45
16.67
3.33
26.24
1.03
103
—
NatWest Markets
0.15
3.36 — — 3.13 77.19 2.03 40 11
Ulster Bank RoI
0.31
7.66 10.42 11.86 8.03 39.81 4.24 139 219
Personal
0.24
4.93
7.83
10.00
5.50
36.84
3.70
98
212
Wholesale
0.55
10.45
20.69
15.63
10.85
58.14
5.75
41
7
Central items & other
0.05
13.64 — — 13.64 — 0.10 26 —
Total loans
0.18
3.75 6.93 8.80 3.90 40.67 1.66 3,131 937
Of which:
Personal
0.10
2.59
6.43
10.06
2.90
37.35
1.17
889
594
Wholesale
0.29
4.61
7.88
6.79
4.68
44.23
2.25
2,242
343
2019
Retail Banking
0.08
3.15 4.35 7.79 3.44 43.27 0.88 393 235
Private Banking
0.05
1.26 — 2.17 1.19 14.01 0.27 (6) 1
Personal
0.03
1.11
—
2.44
1.07
11.98
0.24
5
1
Wholesale
0.12
1.34
—
—
1.31
40.00
0.38
(11)
—
Commercial Banking
0.17
1.80 4.72 2.67 1.88 47.22 1.36 391 450
RBS International
0.03
1.15 — — 1.10 17.36 0.20 2 5
Personal
0.04
3.70
—
—
2.00
18.46
0.48
—
5
Wholesale
0.02
1.01
—
—
1.01
16.07
0.14
2
—
NatWest Markets
0.11
2.84 — — 2.78 77.51 1.52 (51) 16
Ulster Bank RoI
0.19
2.78 5.77 6.02 3.23 34.02 4.06 (6) 85
Personal
0.11
2.12
6.25
5.71
2.79
31.49
4.57
11
69
Wholesale
0.37
4.12
—
7.14
4.23
63.75
2.69
(17)
16
Central items & other
0.04
— — — — — 0.04 1 —
Total loans
0.11
2.47 4.27 5.99 2.70 41.19 1.13 724 792
Of which:
Personal
0.08
3.04
4.23
7.15
3.35
35.90
1.10
409
310
Wholesale
0.14
1.86
4.44
3.04
1.94
49.53
1.16
315
482
(1) 30 DPD – 30 days past due, the mandatory 30 days past due backstop as prescribed by IFRS 9 for a SICR.
(2) ECL provisions on contingent liabilities and commitments are included within the Financial assets section so as not to distort ECL coverage ratios.
(3) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 219
Financial
statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Segmental loans and impairment metrics (audited)
 Retail Banking – Balance sheet growth during 2021 was
mainly due to mortgages. In line with the market, mortgage
demand was strong during the year, supported by the
extension of the stamp duty holiday and overall
improvements in economic conditions. The improved
economic outlook captured in the updated MES scenarios,
including a more positive forecast on unemployment levels,
resulted in reduced account level PDs. Unsecured lending
balances decreased as customer spend and demand for
borrowing were subdued as a result of COVID-19
restrictions, particularly in the first quarter of 2021. Lending
criteria were cautiously relaxed during 2021 to support
growing demand as lockdown restrictions eased.
 Portfolio performance remained stable, for further details
refer to the Personal portfolio section. Arrears levels in both
the mortgage and unsecured portfolios remained low
overall. However, a small number of customers who utilised
their full payment holiday, did migrate into late arrears
during the second half of the year. With COVID-19 payment
holidays complete, this trend stabilised by the year end and
new inflows to arrears were below pre-COVID-19 levels.
 ECL in Stage 2 decreased due to migrations back into
Stage 1, following the effects of improving economic
scenarios during 2021 and continued stable portfolio
performance supporting improved risk metrics. However,
the ECL coverage on remaining Stage 2 exposures
increased simply due to the relative underlying risk profile
of the remaining Stage 2 exposures. The various COVID-19
related customer support schemes (for example, loan
repayment holidays, government job retention scheme)
mitigated actual portfolio deterioration in the short-term,
with the arrears levels and flows into Stage 3 yet to be
materially affected. Total ECL coverage reduced further in
the fourth quarter of 2021, overall mirroring the positive
trajectory of the COVID-19 vaccinations, labour market
trends and portfolio performance, whilst maintaining
coverage for the key portfolios above pre-COVID-19 levels
given the persisting sources of uncertainty, including the
Omicron variant and inflationary pressures on customers.
 Commercial Banking – Balance sheet reduction was mainly
as a result of repayments of both COVID-19 government
lending schemes and conventional borrowing where
demand was lower, particularly in the second half of the
year. Strategic reduction was achieved in high risk sectors.
 The improved economic outlook, including significant
increases in GDP and commercial real estate valuations,
resulted in lower IFRS 9 PDs. Consequently, compared to
2020, a smaller proportion of the exposures exhibited a
SICR, which resulted in a migration of assets from Stage 2
into Stage 1. As a result, the ECL requirement reduced.
 Reflecting the continued level of uncertainty caused by
COVID-19, management judged that certain ECL post
model adjustments remained necessary, refer to the
Governance and post model adjustments section for further
details. The increase in Stage 2 exposures that were past
due greater than 30 days was mainly due to the
commencement of repayments of government scheme debt
with some borrowers failing to meet scheduled repayments.
The lower coverage of this population was driven by the
guaranteed nature of government support schemes.
Conventional bank debt did not see a significant increase in
past due balances.
 The various COVID-19 related customer support schemes
and economic recovery continued to mitigate against flows
into default. The reduction in coverage in Stage 1 and
Stage 2 was mainly due to the decrease in ECL during
2021, primarily as a result of the improved economic
outlook. There was a reduction in Stage 3 coverage as
balances reduced and were not replaced by new flows,
write-offs of existing debt were also higher in the year.
Coverage remained above pre-COVID-19 levels. The loss
rate was significantly lower than in the prior year.
 Other – The reasons for the increased ECL requirement
were similar to those described above.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 220
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Sector analysis – portfolio summary (audited)
The table below shows financial assets and off-balance sheet exposures gross of ECL and related ECL provisions, impairment and
past due by sector, asset quality and geographical region.
Personal
Wholesale
Mortgages
Credit
Other
(1)
cards
personal
Total
Property
Corporate
FI
Sovereign
Total
Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Loans by geography
194,011 3,947 9,422 207,380 32,522 70,851
53,041
6,033 162,447 369,827
- UK
187,847
3,877
9,253
200,977
31,574
62,952
39,086
4,542
138,154
339,131
- RoI
6,164
70
147
6,381
130
1,222
116
4
1,472
7,853
- Other Europe
—
—
—
—
439
3,831
5,066
840
10,176
10,176
-
RoW
—
—
22
22
379
2,846
8,773
647
12,645
12,667
Loans by stage
194,011 3,947 9,422 207,380 32,522 70,851
53,041
6,033 162,447 369,827
- Stage 1
180,418
2,924
6,833
190,175
28,679
53,803
52,263
5,904
140,649
330,824
- Stage 2
11,543
933
1,947
14,423
3,101
15,604
732
121
19,558
33,981
- Stage 3
2,050
90
642
2,782
742
1,444
46
8
2,240
5,022
- Of which: individual
269
—
19
288
329
583
7
8
927
1,215
- Of which: collective
1,781
90
623
2,494
413
861
39
—
1,313
3,807
Loans - past due analysis (3,4)
194,011 3,947 9,422 207,380 32,522 70,851
53,041
6,033 162,447 369,827
-
Not past due
190,834
3,834
8,619
203,287
31,391
68,630
52,285
6,030
158,336
361,623
- Past due 1-30 days
1,217
28
124
1,369
521
1,081
732
2
2,336
3,705
- Past due 31-89 days
592
25
73
690
256
448
19
1
724
1,414
- Past due 90-180 days
367
22
61
450
91
215
1
—
307
757
- Past due >180 days
1,001
38
545
1,584
263
477
4
—
744
2,328
Loans - Stage 2
11,543 933 1,947 14,423 3,101 15,604
732
121 19,558 33,981
- Not past due
10,259
899
1,785
12,943
2,725
14,870
708
120
18,423
31,366
- Past due 1-30 days
843
16
97
956
125
318
4
—
447
1,403
-
Past due 31
-
89 days
441
18
65
524
251
416
20
1
688
1,212
Weighted average life*
-
ECL measurement (years)
8 2 5 5 5 6
3
1 6 6
Weighted average 12 months
PDs*
- IFRS 9 (%)
0.16 4.84 2.73 0.36 0.76 1.85
0.14
0.14 1.00 0.65
- Basel (%)
0.76 3.31 3.22 0.91 1.20 1.74
0.14
0.16 1.04 0.97
ECL provisions by geography
768 260 914 1,942 374 1,411
57
22 1,864 3,806
- UK
449
258
904
1,611
331
1,124
47
18
1,520
3,131
- RoI
319
2
10
331
19
107
3
1
130
461
- Other Europe
—
—
—
—
20
77
4
1
102
102
-
RoW
—
—
—
—
4
103
3
2
112
112
ECL provisions by stage
768 260 914 1,942 374 1,411
57
22 1,864 3,806
- Stage 1
32
59
58
149
24
96
14
19
153
302
- Stage 2
174
141
299
614
111
713
39
1
864
1,478
- Stage 3
562
60
557
1,179
239
602
4
2
847
2,026
- Of which: individual
19
—
12
31
69
261
—
2
332
363
- Of which: collective
543
60
545
1,148
170
341
4
—
515
1,663
ECL provisions coverage (%)
0.40 6.59 9.70 0.94 1.15 1.99
0.11
0.36 1.15 1.03
- Stage 1 (%)
0.02
2.02
0.85
0.08
0.08
0.18
0.03
0.32
0.11
0.09
-
Stage 2 (%)
1.51
15.11
15.36
4.26
3.58
4.57
5.33
0.83
4.42
4.35
- Stage 3 (%)
27.41
66.67
86.76
42.38
32.21
41.69
8.70
25.00
37.81
40.34
ECL (release)/charge
(58) (14) 30 (42) (477) (724)
(38)
3 (1,236) (1,278)
- UK
(52)
(14)
31
(35)
(457)
(647)
(12)
3
(1,113)
(1,148)
- RoI
(6)
-
(1)
(7)
(5)
(24)
2
—
(27)
(34)
- Other Europe
—
—
—
—
(7)
(7)
(21)
—
(35)
(35)
- RoW
—
—
—
—
(8)
(46)
(7)
—
(61)
(61)
Amounts written-off
85 74 141 300 271 271
34
-
576 876
*Not within audit scope.
For the notes to this table refer to page 223.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 221
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Sector analysis – portfolio summary (audited)
Personal
Wholesale
Credit
Other
Mortgages
(1)
cards personal
Total
Property
Corporate
FI Sovereign Total Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Loans by residual maturity
194,011 3,947 9,422
207,380
32,522
70,851
53,041 6,033 162,447 369,827
-
<1 year
3,611
2,532
3,197
9,340
7,497
22,593
41,195
2,809
74,094
83,434
- 1-5 year
12,160
1,415
5,393
18,968
16,293
33,301
10,969
1,967
62,530
81,498
- 5 year
178,240
—
832
179,072
8,732
14,957
877
1,257
25,823
204,895
Other financial assets by asset
quality (2)
—
—
—
—
55
11
11,516 209,553 221,135 221,135
-
AQ1
-
AQ4
—
—
—
—
—
11
10,974
209,551
220,536
220,536
- AQ5-AQ8
—
—
—
—
55
—
542
2
599
599
Off
-
balance sheet
16,827 15,354 8,230
40,411
16,342
52,033
17,898 1,212 87,485 127,896
- Loan commitments
16,827
15,354
8,170
40,351
15,882
49,231
16,906
1,212
83,231
123,582
- Financial guarantees
—
—
60
60
460
2,802
992
—
4,254
4,314
Off-balance sheet by asset quality (2)
16,827 15,354 8,230
40,411
16,342
52,033
17,898 1,212 87,485 127,896
- AQ1-AQ4
14,792
248
6,591
21,631
12,550
30,417
16,192
1,064
60,223
81,854
- AQ5-AQ8
2,028
14,804
1,625
18,457
3,757
21,262
1,703
148
26,870
45,327
- AQ9
—
9
3
12
6
48
1
—
55
67
-
AQ10
7
293
11
311
29
306
2
—
337
648
For the notes to this table refer to page 223.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 222
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Sector analysis – portfolio summary (audited)
Personal
Wholesale
Credit
Other
Mortgages
(1)
cards personal Total Property Corporate FI Sovereign Total
Total
2020
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Loans by geography
190,516
3,895 9,777 204,188 38,076 77,533 47,643 4,959 168,211 372,399
- UK
176,866
3,816
9,580
190,262
35,617
65,968
34,847
3,776
140,208
330,470
- RoI
13,650
79
197
13,926
1,241
4,056
348
30
5,675
19,601
-
Other Europe
—
—
—
—
772
4,132
4,535
538
9,977
9,977
- RoW
—
—
—
—
446
3,377
7,913
615
12,351
12,351
Loans by stage
190,516
3,895 9,777 204,188 38,076 77,533 47,643 4,959 168,211 372,399
- Stage 1
158,387
2,411
5,750
166,548
23,733
48,090
44,002
4,751
120,576
287,124
- Stage 2
29,571
1,375
3,406
34,352
13,021
27,716
3,624
204
44,565
78,917
- Stage 3
2,558
109
621
3,288
1,322
1,727
17
4
3,070
6,358
- of which: individual
308
—
26
334
987
958
9
4
1,958
2,292
- of which: collective
2,250
109
595
2,954
335
769
8
—
1,112
4,066
Loans - past due analysis (3,4)
190,516
3,895 9,777 204,188 38,076 77,533 47,643 4,959 168,211 372,399
-
Not past due
186,592
3,770
8,868
199,230
36,818
75,690
47,195
4,689
164,392
363,622
- Past due 1-30 days
1,482
29
192
1,703
348
990
328
270
1,936
3,639
- Past due 31-89 days
863
26
135
1,024
260
251
113
—
624
1,648
- Past due 90-180 days
456
20
66
542
161
67
—
—
228
770
- Past due >180 days
1,123
50
516
1,689
489
535
7
—
1,031
2,720
Loans - Stage 2
29,571
1,375 3,406 34,352 13,021 27,716 3,624 204 44,565 78,917
- Not past due
27,893
1,340
3,115
32,348
12,708
27,036
3,484
204
43,432
75,780
- Past due 1-30 days
1,038
18
173
1,229
160
457
30
—
647
1,876
-
Past due 31
-
89 days
640
17
118
775
153
223
110
—
486
1,261
Weighted average life*
- ECL measurement (years)
9
2 5 6 4 6 4 — 5 5
Weighted average 12 months PDs*
- IFRS 9 (%)
0.72
6.17 4.82 1.03 3.99 3.70 0.51 0.13 2.73 1.81
- Basel (%)
0.85
3.40 3.82 1.03 1.66 2.51 0.32 0.15 1.54 1.25
ECL provisions by geography
1,005
354 1,036 2,395 1,175 2,478 121 17 3,791 6,186
- UK
506
351
1,024
1,881
1,069
1,907
60
12
3,048
4,929
- RoI
499
3
12
514
41
277
3
1
322
836
- Other Europe
—
—
—
—
53
125
46
1
225
225
- RoW
—
—
—
—
12
169
12
3
196
196
ECL provisions by stage
1,005
354 1,036 2,395 1,175 2,478 121 17 3,791 6,186
-
Stage 1
51
53
67
171
123
188
23
14
348
519
- Stage 2
319
225
452
996
507
1,487
90
1
2,085
3,081
- Stage 3
635
76
517
1,228
545
803
8
2
1,358
2,586
- of which: individual
18
—
12
30
360
436
3
2
801
831
- of which: collective
617
76
505
1,198
185
367
5
—
557
1,755
ECL provisions coverage (%)
0.53
9.09 10.60 1.17 3.09 3.20 0.25 0.34 2.25 1.66
- Stage 1 (%)
0.03
2.20
1.17
0.10
0.52
0.39
0.05
0.29
0.29
0.18
- Stage 2 (%)
1.08
16.36
13.27
2.90
3.89
5.37
2.48
0.49
4.68
3.90
-
Stage 3 (%)
24.82
69.72
83.25
37.35
41.23
46.50
47.06
50.00
44.23
40.67
ECL
(release)/charge
(5)
276
191 422 889 733 1,407 95 7 2,242 3,131
- UK
181
190
420
791
703
1,276
48
6
2,033
2,824
- RoI
95
1
2
98
(1)
54
—
—
53
151
- Other Europe
—
—
—
—
21
34
38
—
93
93
- RoW
—
—
—
—
10
43
9
1
63
63
Amounts written-off
221
95 278 594 54 287 2 — 343 937
*Not within audit scope.
For the notes to this table refer to the following page.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 223
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Sector analysis – portfolio summary (audited)
Personal
Wholesale
Credit
Other
Mortgages
cards
personal
Total
Property
Corporate
FI
Sovereign
Total
Total
2020
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Loans by residual maturity
190,516 3,895 9,777 204,188 38,076
77,533
47,643
4,959
168,211 372,399
- <1 year
3,831
2,557
3,249
9,637
8,669
23,015
38,203
2,196
72,083
81,720
- 1-5 year
12,193
1,338
5,509
19,040
20,029
36,640
8,340
1,590
66,599
85,639
-
5 year
174,492
—
1,019
175,511
9,378
17,878
1,100
1,173
29,529
205,040
Other financial assets by asset
quality (2)
— — — — 98
116
11,093
165,209
176,516 176,516
- AQ1-AQ4
— — — —
—
116
10,734
165,184
176,034
176,034
- AQ5-AQ8
—
—
—
—
98
—
359
25
482
482
Off-balance sheet
14,557 14,262 10,186 39,005 17,397
58,635
17,011
1,587
94,630 133,635
- Loan commitments
14,554
14,262
10,144
38,960
16,829
55,496
15,935
1,585
89,845
128,805
- Financial guarantees
3
—
42
45
568
3,139
1,076
2
4,785
4,830
Off-balance sheet by asset quality (2)
14,557 14,262 10,186 39,005 17,397
58,635
17,011
1,587
94,630 133,635
-
AQ1
-
AQ4
13,610
148
8,008
21,766
12,917
33,939
15,460
1,404
63,720
85,486
- AQ5-AQ8
937
13,809
2,152
16,898
4,372
24,065
1,544
183
30,164
47,062
- AQ9
1
8
9
18
13
76
1
—
90
108
- AQ10
9
297
17
323
95
555
6
—
656
979
(1) Includes a portion of Private Banking lending secured against residential real estate, in line with ECL calculation methodology. Private Banking and RBS International mortgages are
reported in UK, which includes crown dependencies, reflecting the country of lending origination.
(2) AQ bandings are based on Basel PDs and mapping is as follows:
Internal asset
quality band
Probability of
default range
Indicative
S&P rating
AQ1
0%
-
0.034%
AAA to AA
AQ2 0.034% - 0.048% AA to AA-
AQ3
0.048%
-
0.095%
A+ to A
AQ4
0.095%
-
0.381%
BBB+ to BBB
-
AQ5
0.381%
-
1.076%
BB+ to BB
AQ6
1.076%
-
2.153%
BB
-
to B+
AQ7
2.153%
-
6.089%
B+ to B
AQ8
6.089%
-
17.222%
B
-
to CCC+
AQ9
17.222%
-
100%
CCC to C
AQ10
100%
D
£0.3 billion (2020 – £0.3 billion) of AQ10 Personal balances primarily relate to loan commitments, the drawdown of which is effectively prohibited. AQ10 includes £0.2 billion (2020 –
£0.4 billion) of RoI mortgages which are not currently considered defaulted for capital calculation purposes for RoI but are included in Stage 3.
(3) 30 DPD – 30 days past due, the mandatory 30 days past due backstop as prescribed by IFRS 9 for a SICR.
(4) Days past due – Personal products: at a high level, for amortising products, the number of days past due is derived from the arrears amount outstanding and the monthly
repayment instalment. For credit cards, it is based on payments missed, and for current accounts the number of continual days in excess of borrowing limit. Wholesale products: the
number of days past due for all products is the number of continual days in excess of borrowing limit.
(5) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 224
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Sector analysis – portfolio summary (audited)
The table below shows ECL by stage, for the Personal portfolios and key sectors of the Wholesale portfolios, that continue to be
affected by COVID-19.
Off-balance sheet
Loans
-
amortised cost and FVOCI
Loan
Contingent
ECL provisions
Stage 1
Stage 2
Stage 3
Total
commitments
liabilities
Stage 1
Stage 2
Stage 3
Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Personal
190,175 14,423 2,782 207,380 40,351
60
149 614 1,179 1,942
Mortgages
180,418 11,543 2,050 194,011 16,827
—
32 174 562 768
Credit cards
2,924 933 90 3,947 15,354
—
59 141 60 260
Other personal
6,833 1,947 642 9,422 8,170
60
58 299 557 914
Wholesale
140,649 19,558 2,240 162,447 83,231
4,254
153 864 847 1,864
Property
28,679 3,101 742 32,522 15,882
460
24 111 239 374
Financial institutions
52,263 732 46 53,041 16,906
992
14 39 4 57
Sovereign
5,904 121 8 6,033 1,212
—
19 1 2 22
Corporate
53,803 15,604 1,444 70,851 49,231
2,802
96 713 602 1,411
Of which:
Airlines and aerospace
779
668
44
1,491
1,528
221
1
39
15
55
Automotive
5,133
1,304
38
6,475
3,507
65
9
32
10
51
Health
3,818
1,235
133
5,186
799
9
9
58
48
115
Land transport and logistics
3,721
833
39
4,593
3,069
188
4
53
12
69
Leisure
3,712
4,050
340
8,102
1,874
107
11
247
133
391
Oil and gas
1,482
141
52
1,675
1,126
453
1
14
28
43
Retail
6,380
1,342
180
7,902
4,872
410
8
29
66
103
Total
330,824 33,981 5,022 369,827 123,582
4,314
302 1,478 2,026 3,806
2020
Personal
166,548 34,352 3,288 204,188 38,960
45
171 996 1,228 2,395
Mortgages
158,387 29,571 2,558 190,516 14,554
3
51 319 635 1,005
Credit cards
2,411 1,375 109 3,895 14,262
—
53 225 76 354
Other personal
5,750 3,406 621 9,777 10,144
42
67 452 517 1,036
Wholesale
120,576 44,565 3,070 168,211 89,845
4,785
348 2,085 1,358 3,791
Property
23,733 13,021 1,322 38,076 16,829
568
123 507 545 1,175
Financial institutions
44,002 3,624 17 47,643 15,935
1,076
23 90 8 121
Sovereign
4,751 204 4 4,959 1,585
2
14 1 2 17
Corporate
48,090 27,716 1,727 77,533 55,496
3,139
188 1,487 803 2,478
Of which:
Airlines and aerospace
753
1,213
41
2,007
1,888
215
2
42
25
69
Automotive
4,383
1,759
161
6,303
4,205
102
17
63
17
97
Health
2,694
2,984
131
5,809
616
14
13
164
48
225
Land transport and logistics
2,868
1,823
111
4,802
3,782
197
8
98
32
138
Leisure
3,299
6,135
385
9,819
2,199
125
22
439
204
665
Oil and gas
1,178
300
83
1,561
2,225
346
4
20
59
83
Retail
6,702
2,282
187
9,171
5,888
512
18
112
101
231
Total
287,124 78,917 6,358 372,399 128,805
4,830
519 3,081 2,586 6,186
Wholesale forbearance (audited)
The table below shows Wholesale forbearance, Heightened Monitoring and Risk of Credit Loss by sector. Personal forbearance is
disclosed in the Personal portfolio section. This table show current exposure but reflects risk transfers where there is a guarantee
by another customer.
Property
FI
Other corporate
Total
2021
£m
£m
£m
£m
Forbearance (flow)
709 27 3,894 4,630
Forbearance (stock)
1,033 35 5,659 6,727
Heightened Monitoring and Risk of Credit Loss
1,225 83 4,492 5,800
2020
Forbearance (flow)
1,597 68 4,201 5,866
Forbearance (stock)
1,744 92 4,983 6,819
Heightened Monitoring and Risk of Credit Loss
1,600 155 5,771 7,526

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 225
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Sector analysis – portfolio summary (audited)
 Loans by geography – In Personal, exposures continued to
be concentrated in the UK and heavily weighted to
mortgages and the vast majority of exposures in the
Republic of Ireland was also mostly in mortgages. Balance
sheet growth during the year was mainly in mortgages.
Unsecured lending balances were subdued as noted
previously. In Wholesale, exposures were mainly in the UK.
Balance sheet reduction was primarily due to repayments
of both COVID-19 government lending schemes and
conventional borrowing where demand was lower.
Strategic reduction was achieved in high risk sectors.
 Loans by stage – In both Wholesale and Personal, the
improved economic outlook resulted in reduced IFRS 9 PDs
compared to 2020. This, alongside continued benign credit
performance of the portfolio, resulted in a smaller
proportion of accounts exhibiting a SICR and thereby an
associated migration of exposures from Stage 2 into Stage
1. In the absence of any other forbearance or SICR triggers,
customers granted COVID-19 related payment holidays
were not considered forborne and did not result in an
automatic trigger into Stage 2. However, a subset of
Personal customers who had accessed payment holiday
support, and where their risk profile was identified as
relatively high, continued to be collectively migrated into
Stage 2. In Wholesale, BBLS customers granted PAYG
options, including the extension of lending terms, periods of
reduced repayments and six month payment holidays, were
not automatically considered significantly credit
deteriorated. PAYG options are a feature of BBLS rather
than a concession granted by NatWest Group.
 Loans – Past due analysis – The various COVID-19 related
customer support schemes (capital repayment holidays,
government job retention scheme, government supported
lending schemes) are mitigating actual portfolio
deterioration in the short-term, although there have been
some small increases in past due exposures.
 Weighted average 12 months PDs – In Personal, the Basel II
point-in-time PDs improved slightly during 2021. The
forward-looking IFRS 9 PDs reduced significantly during
2021 reflecting the improved economics. PD reductions
were most evident in Personal mortgages due to benign
arrears performance (catalysed by COVID-19 support
schemes) combined with the improved economic outlook,
which is connected to the need for collective SICR
migration and judgmental post model adjustments. In
Wholesale, the Basel II PDs were based on a through-the-
cycle approach and decreased less than the forward-
looking IFRS 9 PDs which reduced, reflecting the improved
economic outlook. For further details refer to the Asset
quality section.
 ECL provision by geography – In line with the point relating
to loans by geography above, the vast majority of ECL
related to exposures in the UK and the Republic of Ireland.
 ECL provisions by stage – Stage 1 and Stage 2 provisions
reduced reflecting the improved economic outlook. As
outlined above, Stage 3 provisions have yet to be materially
affected, underpinned by the various customer support
schemes noted previously.
 ECL provisions coverage – Overall provisions coverage
reduced, mainly due to the improvement in economic
outlook and scenario weightings. The base economic
scenario improved reflecting the faster than expected
vaccination roll-out, better than expected actual economic
data and strong government support. Stage 2 coverage
increased during the period for some portfolios and notably
on certain Wholesale sectors due to the inclusion of the
recovery risk overlay and lower Stage 2 balances.
 The ECL charge and loss rate – Reflecting the improved
economic outlook, the impairment charge was significantly
lower, with a material reduction in the annualised loss rate.
 Loans by residual maturity – In mortgages, as expected, the
vast majority of exposures were greater than five years. In
unsecured lending – cards and other – exposures were
concentrated in less than five years. In Wholesale, with the
exception of financial institutions where lending was
concentrated in less than one year, the majority of lending
was for residual maturity of one to five years, with some
greater than five years in line with lending under the
government support schemes.
 Other financial assets by asset quality – Consisting almost
entirely of cash and balances at central banks and debt
securities, held in the course of treasury related
management activities, these assets were mainly within the
AQ1-AQ4 bands.
 Off-balance sheet exposures by asset quality – In Personal,
undrawn exposures were reflective of available credit lines
in credit cards and current accounts. Additionally, the
mortgage portfolio had undrawn exposures, where a formal
offer had been made to a customer but had not yet drawn
down; the value increased in line with the pipeline of offers.
There was also a legacy portfolio of flexible mortgages
where a customer had the right and ability to draw down
further funds. The asset quality was aligned to the wider
portfolio. In Wholesale, undrawn exposures declined in line
with muted credit demand, with customers repaying
revolving credit and working capital facilities to optimise
liquidity. In addition, sector appetite adjustments in high risk
sectors reduced off-balance sheet exposures to these
sectors.
 Wholesale forbearance – Customers seeking COVID-19
related support, including payment holidays, who were not
subject to any wider SICR triggers and who were assessed
as having the ability in the medium term post-COVID-19 to
be viable and meet credit appetite metrics, were not
considered to have been granted forbearance. Customers
seeking a payment holiday extension beyond an aggregate
of 12 months in an 18 month period were considered to
have been granted forbearance and were classed as
heightened monitoring. This classification did not apply to
customers with BBLS taking a PAYG payment holiday
option. For Wholesale, forbearance flow decreased in the
second half of 2021 following the lifting of most COVID-19
restrictions. The leisure sector represented the largest
share of forbearance flow throughout 2021 due to
disruption caused by the periodic presence of COVID-19
restrictions and resultant consumer uncertainty. Payment
holidays and covenant waivers were the most common
forms of forbearance granted.
 Heightened Monitoring and Risk of Credit Loss – Inflows
decreased during 2021 compared to 2020. The reduction in
value was mainly due to the lower number of inflows as
well as a small number of high value customers who moved
out of the framework as economic conditions improved.
While noting the reduced flows into Heightened Monitoring
and Risk of Credit Loss and the improved stock position, the
volume and value of cases remained higher than pre-
COVID-19 levels. The sector breakdown of exposures
remained consistent with prior periods.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 226
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Credit risk enhancement and mitigation (audited)
The table below shows exposures of modelled portfolios within the scope of the ECL framework and related credit risk
enhancement and mitigation (CREM).
Gross
Maximum credit risk
CREM by type
CREM coverage
Exposure post CREM
exposure
ECL
Total
Stage 3
Financial
(1)
Property
Other (2) Total Stage 3 Total Stage 3
2021
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Financial assets
Cash and balances at central banks 176.3
—
176.3
—
—
—
—
—
— 176.3
—
Loans - amortised cost (3) 369.8
3.7
366.1
3.0
41.1 232.7 23.5 297.3 2.7 68.8 0.3
Personal (4)
207.4
1.9
205.5
1.6
1.3
192.6
—
193.9
1.5
11.6
0.1
Wholesale
(5)
162.4
1.8
160.6
1.4
39.8
40.1
23.5
103.4
1.2
57.2
0.2
Debt securities 44.9
—
44.9
—
—
—
—
—
— 44.9
—
Total financial assets
591.0
3.7
587.3
3.0
41.1 232.7 23.5 297.3 2.7 290.0 0.3
Contingent liabilities and commitments
Personal (6,7) 40.4
—
40.4
0.3
0.5 4.9
—
5.4 — 35.0 0.3
Wholesale
87.5
0.1
87.4
0.3
3.2 7.9 3.9 15.0 0.1 72.4 0.2
Total off-balance sheet
127.9
0.1
127.8
0.6
3.7 12.8 3.9 20.4 0.1 107.4 0.5
Total exposure
718.9
3.8
715.1
3.6
44.8 245.5 27.4 317.7 2.8 397.4 0.8
2020
Financial assets
Cash and balances at central banks
122.7
—
122.7
—
— — — — — 122.7 —
Loans - amortised cost (3)
372.4
6.0
366.4
3.8
38.6 232.7 23.7 295.0 3.3 71.4 0.5
Personal
(4)
204.2
2.4
201.8
2.1
0.3
189.5
—
189.8
1.9
12.0
0.2
Wholesale (5)
168.2
3.6
164.6
1.7
38.3
43.2
23.7
105.2
1.4
59.4
0.3
Debt securities
53.8
—
53.8
—
— — — — — 53.8 —
Total financial assets
548.9
6.0
542.9
3.8
38.6 232.7 23.7 295.0 3.3 247.9 0.5
Contingent liabilities and commitments
Personal (6,7)
39.0
—
39.0
0.3
—
4.1
—
4.1
—
34.9
0.3
Wholesale
94.6
0.2
94.4
0.6
3.3
7.6
4.6
15.5
0.1
78.9
0.5
Total off-balance sheet
133.6
0.2
133.4
0.9
3.3 11.7 4.6 19.6 0.1 113.8 0.8
Total exposure
682.5
6.2
676.3
4.7
41.9 244.4 28.3 314.6 3.4 361.7 1.3
(1) Includes cash and securities collateral.
(2) Includes guarantees, charges over trade debtors, other asset finance related physical collateral as well as the amount by which credit risk exposure is reduced through netting
arrangements, mainly cash management pooling, which give NatWest Group a legal right to set off the financial asset against a financial liability due to the same counterparty.
(3) NatWest Group holds collateral in respect of individual loans – amortised cost to banks and customers. This collateral includes mortgages over property (both personal and
commercial); charges over business assets such as plant and equipment; inventories and trade debtors; and guarantees of lending from parties other than the borrower. NatWest
Group obtains collateral in the form of securities in reverse repurchase agreements. Collateral values are capped at the value of the loan.
(4) Stage 3 mortgage exposures have relatively limited uncovered exposure reflecting the security held. On unsecured credit cards and other personal borrowing, the residual
uncovered amount reflects historical experience of continued cash recovery post default through ongoing engagement with customers.
(5) Stage 3 exposures post credit risk enhancement and mitigation in Wholesale mainly represent enterprise value and the impact of written down collateral values; an individual
assessment to determine ECL will consider multiple scenarios and in some instances allocate a probability weighting to a collateral value in excess of the written down value.
(6) £0.3 billion (2020 – £0.3 billion) Personal Stage 3 balances primarily relate to loan commitments, the draw down of which is effectively prohibited.
(7) The Personal gross exposure value includes £11.8 billion (2020 – £10.0 billion) in respect of pipeline mortgages where a committed offer has been made to a customer but where
the funds have not yet been drawn down. When drawn down, the exposure would be covered by a security over the borrower’s property.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 227
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Personal portfolio (audited)
Disclosures in the Personal portfolio section include drawn exposure (gross of provisions).
2021
2020
Retail
Private
RBS
Ulster
Retail
Private
RBS
Ulster
Personal lending
Banking
Banking
International
Bank RoI
Total
Banking
Banking
International
Bank RoI
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Mortgages
172,707 12,781
2,444
6,164 194,096
163,107
10,910 2,517
13,678
190,212
Of which:
Owner occupied 158,059 11,219
1,597
5,563 176,438
148,614
9,601 1,676
12,781
172,672
Buy-to-let 14,648 1,562
847
601 17,658
14,493
1,309 841
897
17,540
Interest only - variable
4,348 4,889
346
120 9,703
5,135
4,375 347
159
10,016
Interest only - fixed
14,255 5,957
209
3 20,424
13,776
4,758 233
10
18,777
Mixed (1) 8,616 1
17
34 8,668
7,321
1 20
56
7,398
Impairment provisions
(2) 429 7
8
318 762
483
5 9
499
996
Other personal lending
(3) 10,829 1,974
305
218 13,326
11,116
1,613 279
276
13,284
Impairment provisions
(2) 1,140 19
2
11 1,172
1,348
20 1
15
1,384
Total personal lending
183,536 14,755
2,749
6,382 207,422
174,223
12,523 2,796
13,954
203,496
Mortgage LTV ratios
-
Total portfolio
54% 59%
57%
50% 54%
56%
58% 57%
59%
57%
- Stage 1
54%
59%
56%
48%
54%
55%
58%
57%
57%
55%
- Stage 2
52%
59%
62%
57%
52%
66%
61%
64%
65%
66%
- Stage 3
49%
64%
77%
56%
53%
53%
64%
75%
67%
60%
- Buy-to-let
50% 57%
53%
52% 51%
52%
56% 53%
59%
53%
- Stage 1
50%
58%
53%
51%
51%
51%
56%
53%
55%
52%
- Stage 2
52%
55%
50%
56%
52%
60%
59%
53%
69%
61%
- Stage 3
51%
53%
60%
66%
56%
56%
54%
61%
74%
62%
Gross new mortgage lending (4) 35,290 2,874
340
40 38,544
30,551
2,148 249
910
33,858
Of which:
Owner occupied
33,630 2,583
206
40 36,459
29,608
1,922 167
908
32,605
Weighted average LTV 66% 65%
67%
57% 66%
69%
66% 66%
74%
69%
Buy-to-let
1,660 292
134
— 2,086
943
227 82
2
1,254
Weighted average LTV
62% 65%
63%
53% 63%
62%
62% 63%
54%
62%
Interest only - variable rate
25 832
37
— 894
81
1,082 7
—
1,170
Interest only - fixed rate
2,388 1,563
36
— 3,987
1,501
695 35
—
2,231
Mixed
(1) 2,256
—
7
— 2,263
1,630
— 2
—
1,632
Mortgage forbearance
Forbearance flow
316 19
4
50 389
550
50 10
127
737
Forbearance stock 1,156 3
8
944 2,111
1,293
18 10
1,627
2,948
Current
727
—
5
616
1,348
648
13
9
1,070
1,740
1-3 months in arrears
146
2
1
58
207
360
3
—
105
468
> 3 months in arrears
283
1
2
270
556
285
2
1
452
740
(1) Includes accounts which have an interest only sub-account and a capital and interest sub-account to provide a more comprehensive view of interest only exposures.
(2) Retail Banking excludes a non-material amount of provisions held on relatively small legacy portfolios.
(3) Comprises unsecured lending except for Private Banking, which includes both secured and unsecured lending. It excludes loans that are commercial in nature.
(4) Retail Banking excludes additional lending to existing customers.
 The mortgage portfolio grew strongly during 2021, assisted
by the UK stamp duty reduction.
 LTV ratios improved as high demand increased house prices
during the year.
 The existing mortgage stock and new business were closely
monitored against agreed risk appetite parameters. These
included LTV ratios, buy-to-let concentrations, new-build
concentrations and credit quality. Lending criteria were
cautiously relaxed during the year as demand returned and
economic conditions improved.
 Demand for mortgages was mostly within owner occupier
mortgages, consequently there has been a reduction in the
proportion of interest only and buy-to-let mortgages.
 In the Retail Banking mortgage portfolio, 37% of the stock of
lending was in Greater London and the South East (2020 –
37%). The weighted average loan-to-value for these regions
was 53% (2020 – 54%) compared to all regions 54%.
 In the Retail Banking mortgage portfolio, 92% of customer
balances were on fixed rates (62% of these on five-year
deals). In addition, 97% of all new mortgage completions
were fixed rate deals (56% of these on five-year deals).
 Forbearance flows and arrears levels remained low relative
to historic norms, with customers able to utilise payment
holidays during the first half of the year.
 Unsecured lending overall reduced during the year as
demand was subdued with lower levels of consumer
spending.
 As noted previously, the improved economic outlook
including a more positive forecast on unemployment and
house prices, resulted in reduced ECL.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 228
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Personal portfolio (audited)
Mortgage LTV distribution by stage
The table below shows gross mortgage lending and related ECL by LTV band. Mortgage lending not within the scope of IFRS 9
ECL reflected portfolios carried at fair value.
Mortgages
ECL provisions
ECL provisions coverage (2)
Not within
Of
IFRS 9
which;
Retail Banking
ECL
gross new
Stage 1
Stage 2
Stage 3
scope
Total
lending
Stage 1
Stage 2
Stage 3
Total (1)
Stage 1
Stage 2
Stage 3
Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
%
%
%
%
≤50%
61,233
4,548 644 63
66,488
5,845
7
60
140 207
—
1.3 21.7 0.3
>50% and ≤70%
68,271
4,674 483 9
73,437
12,397
10
64
84 158
—
1.4 17.4 0.2
>70% and ≤80%
24,004
1,255 93 1
25,353
10,964
3
18
15 36
—
1.4 16.1 0.1
>80% and
≤90%
5,983
250 22 1
6,256
4,985
1
8
5 14
—
3.2 22.7 0.2
>90% and ≤100%
1,125
58 10
—
1,193
1,098
—
5
3 8
—
8.6 30.0 0.7
>100%
14
18 6
—
38
—
—
1
2 3
—
5.6 33.3 7.9
Total with LTVs
160,630
10,803 1,258 74
172,765
35,289
21
156
249 426
—
1.4 19.8 0.2
Other
14
1 1
—
16
1
—
—
—
—
—
—
—
—
Total
160,644
10,804 1,259 74
172,781
35,290
21
156
249 426
—
1.4 19.8 0.2
2020
≤50%
50,170
5,009 554 124
55,857
4,207
4
43
107 154 0.0 0.8 19.4 0.3
>50% and ≤70%
55,263
7,416 488 35
63,202
9,083
7
66
81 154 0.0 0.9 16.5 0.2
>70% and ≤80%
19,994
9,555 141 8
29,698
11,060
7
56
26 89 0.0 0.6 18.5 0.3
>80% and ≤90%
8,029
5,552 52 6
13,639
5,175
3
52
11 66 0.0 0.9 20.3 0.5
>90% and ≤100%
368
137 13 2
520
865
—
5
3 8 0.1 3.4 26.8 1.6
>100%
48
99 20 2
169
—
—
6
5 11 0.0 6.1 25.0 6.5
Total with LTVs
133,872
27,768 1,268 177
163,085
30,390
21
228
233 482 0.0 0.8 18.5 0.3
Other
17
4 1 —
22
161
—
—
1 1 0.1 3.6 71.9 3.3
Total
133,889
27,772 1,269 177
163,107
30,551
21
228
234 483 0.0 0.8 18.5 0.3
Ulster Bank RoI
2021
≤50%
2,660 221 274
—
3,155 13 4 6
138
148
0.2
2.7
50.4
4.7
>50% and ≤70%
1,497 172 128
—
1,797 16 2 5
59
66
0.1
2.9
46.1
3.7
>70% and ≤80%
484 67 60
—
611 9 1 2
28
31
0.2
3.0
46.7
5.1
>80% and ≤90%
231 51 55
—
337 1 1 2
26
29
0.4
3.9
47.3
8.6
>90% and
≤100%
82 26 37
—
145 1
—
1
19
20
—
3.8
51.4
13.8
>100%
33 16 41
—
90
—
—
1
23
24
—
6.3
56.1
26.7
Total with LTVs
4,987 553 595
—
6,135 40 8 17
293
318
0.2
3.1
49.2
5.2
Other
25 — 4
—
29
—
—
—
—
—
—
—
—
—
Total
5,012 553 599
—
6,164 40 8 17
293
318
0.2
3.1
48.9
5.2
2020
≤50%
4,156 504 354 — 5,014 78 10 24
105
139
0.2
4.8
29.7
2.8
>50% and ≤70%
3,453 453 230 — 4,136 194 8 23
66
97
0.2
5.1
28.7
2.3
>70% and ≤80%
1,569 232 114 — 1,915 346 4 12
40
56
0.3
5.2
35.1
2.9
>80% and ≤90%
1,214 190 105 — 1,509 286 3 11
40
54
0.2
5.8
38.1
3.6
>90% and ≤100%
372 145 88 — 605 1 1 9
40
50
0.3
6.2
45.5
8.3
>100%
183 151 165 — 499 5 1 12
90
103
0.5
7.9
54.5
20.6
Total with LTVs
10,947 1,675 1,056 — 13,678 910 27 91
381
499
0.2
5.4
36.1
3.6
(1) Excludes a non-material amount of provisions held on relatively small legacy portfolios.
(2) ECL provisions coverage is ECL provisions divided by mortgages.
 ECL coverage rates increased through the LTV bands
with both Retail Banking and Ulster Bank RoI having only
limited exposures in the highest LTV bands. The
relatively high coverage level in the lowest LTV band for
Retail Banking included the effect of time-discounting on
expected recoveries and reflects a modelling approach
that captures losses expected from both repossession
and also other recovery action.
 The improved economic outlook resulted in decreased
account level IFRS 9 PDs. Consequently, compared to the
2020 year end, a lower proportion of accounts exhibited
a SICR with an associated migration of exposures from
Stage 2 into Stage 1.

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Personal portfolio (audited)
Retail Banking mortgage LTV distribution by region
The table below shows gross mortgage lending by LTV band for Retail Banking, by geographical region.
Weighted
≤50%
50%
≤80%
80%
≤100%
>100%
Total
average LTV
Other
Total
Total
2021
£m
£m
£m
£m
£m
%
£m
£m
%
South East
13,160 18,298 886
1
32,345 53 3 32,348 19
Greater London
13,308 16,716 1,477
1
31,502 53 3 31,505 18
Scotland 4,493 6,529 559
2
11,583 54 1 11,584 7
North West 6,598 9,212 654
3
16,467 53 2 16,469 10
South West
6,140 8,619 499
1
15,259 53 2 15,261 9
West Midlands
4,323 7,449 553
1
12,326 55 1 12,327 6
East of England
7,467 11,679 820
1
19,967 54 2 19,969 12
Rest of the UK
10,937 20,278 2,001
26
33,242 56 2 33,244 19
Total
66,426 98,780 7,449
36
172,691 54 16 172,707 100
2020
South East
10,980 17,217 2,365
4
30,566 56 5 30,571 19
Greater London
13,044 14,505 1,638
2
29,189 52 5 29,194 18
Scotland
3,594 6,636 1,148
1
11,379 58 1 11,380 7
North West
4,849 9,745 1,402
3
15,999 58 3 16,002 10
South West
5,086 8,551 882
3
14,522 55 2 14,524 9
West Midlands
3,366 7,080 1,265
4
11,715 59 1 11,716 7
East of England
6,487 10,294 1,588
2
18,371 56 2 18,373 11
Rest of the UK
8,451 18,869 3,873
151
31,344 60 3 31,347 19
Total
55,857 92,897 14,161
170
163,085 56 22 163,107 100
Commercial real estate (CRE)*
The CRE portfolio comprises exposures to entities involved in the development of, or investment in, commercial and residential
properties (including house builders but excluding housing associations, construction and the building materials sub-sector). The
sector is reviewed regularly by senior executive committees. Reviews include portfolio credit quality, capital consumption and
control frameworks. The CRE tables in this section include information on exposures which are out of scope of ECL calculations or
part of disposal groups.
2021
2020
By geography and sub-sector (1)
UK
RoI
Other
Total
UK RoI
Other
Total
£m
£m
£m £m
£m £m
£m
£m
Investment
Residential (2) 4,422
341
19 4,782
4,507 360
14
4,881
Office (3) 3,037
190
10 3,237
3,386 226
28
3,640
Retail (4) 4,207
81
—
4,288
5,423 68
118
5,609
Industrial
(5) 2,760
13
106 2,879
2,773 18
202
2,993
Mixed/other (6) 1,185
113
50 1,348
2,688 154
74
2,916
15,611
738
185 16,534
18,777 826
436
20,039
Development
Residential (2) 1,775
76
2 1,853
2,685 200
3
2,888
Office (3) 79
33
—
112
123 30
—
153
Retail (4)
48
—
—
48
126 —
—
126
Industrial
(5) 67
1
—
68
125 2
—
127
Mixed/other (6) 20
2
—
22
24 2
—
26
1,989
112
2 2,103
3,083 234
3
3,320
Total 17,600
850
187 18,637
21,860 1,060
439
23,359
*Not within audit scope.
(1) Geographical splits are based on country of collateral risk.
(2) Properties including houses, flats and student accommodation.
(3) Properties including offices in central business districts, regional headquarters and business parks.
(4) Properties including high street retail, shopping centres, restaurants, bars and gyms.
(5) Properties including distribution centres, manufacturing and warehouses.
(6) Properties that do not fall within the other categories above. Mixed generally relates to a mixture of retail/office with residential.

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Commercial real estate (CRE)
CRE LTV distribution by stage (audited)
The table below shows CRE current exposure and related ECL by LTV band.
Current exposure (gross of provisions)
(1,2) ECL provisions
ECL provisions coverage
(4)
Not within
IFRS 9 ECL
Stage 1
Stage 2 Stage 3
scope (3)
Total Stage 1 Stage 2 Stage 3 Total (1) Stage 1 Stage 2 Stage 3 Total
2021
£m
£m £m
£m
£m £m £m £m £m % % % %
≤50%
6,767
388 34
268
7,457 5 7 9 21 0.1 1.8 26.5 0.3
>50% and ≤70%
4,367
470 46
469
5,352 3 13 20 36 0.1 2.8 43.5 0.7
>70% and ≤100%
377
192 127
9
705
—
9 32 41 — 4.7 25.2 5.8
>100%
215
7 86
4
312
—
2 28 30 — 28.6 32.6 9.6
Total with LTVs
11,726
1,057 293
750
13,826 8 31 89 128 0.1 2.9 30.4 0.9
Total portfolio
average LTV%
48%
58% 88%
52%
50%
Other
(5)
2,271
293 61
83
2,708 4 13 28 45 0.2 4.4 45.9 1.7
Development (6)
1,736
228 62
77
2,103 3 6 34 43 0.2 2.6 54.8 2.0
Total
15,733
1,578 416
910
18,637 15 50 151 216 0.1 3.2 36.3 1.2
2020
≤50%
4,918
4,538 138
—
9,594 46 145 24 215 0.9 3.2 17.4 2.2
>50% and ≤70%
2,815
3,266 226
—
6,307 32 112 63 207 1.1 3.4 27.9 3.3
>70% and ≤100%
169
283 124
—
576 3 23 51 77 1.8 8.1 41.1 13.4
>100%
50
64 295
—
409 — 6 113 119 — 9.4 38.3 29.1
Total with LTVs
7,952
8,151 783
—
16,886 81 286 251 618 1.0 3.5 32.1 3.7
Total portfolio
average LTV%
45%
47% 93%
—
48%
Other (5)
1,776
511 159
707
3,153 6 40 93 139 0.3 7.8 58.5 5.7
Development
(6)
1,362
1,767 161
30
3,320 15 58 70 143 1.1 3.3 43.5 4.3
Total
11,090
10,429 1,103
737
23,359 102 384 414 900 0.9 3.7 37.5 4.0
(1)
Comprises gross lending, interest rate hedging derivatives and other assets carried at fair value that are managed as part of
the overall CRE portfolio.
(2)
The exposure in Stage 3 mainly relates to legacy assets.
(3)
Includes exposures relating to non
-
modelled portfolios and other exposures carried at fair value, including derivatives.
(4)
ECL provisions coverage is ECL provisions divided by current exposure.
(5)
Relates mainly to business banking, rate risk management products and unsecured corporat
e lending.
(6)
Relates to the development of commercial and residential properties. LTV is not a meaningful measure for this type of lending
activity.
 Overall – The majority of the CRE portfolio was located and
managed in the UK. Business appetite and strategy was
aligned across NatWest Group.
 2021 trends – The continued reduction in the real estate
exposure was a consequence of active portfolio
management to rebalance the size and composition of the
CRE portfolio. In addition, customer appetite to borrow was
muted, particularly amongst larger customers. At a sub-
sector level, the residential market had a positive out-turn
over the year; the retail sector exhibited mixed performance
in line with changing consumer habits; the industrial market
performed very strongly; with uncertainty continuing in the
office sub-sector as occupiers moved to a more flexible way
of working.
 Credit quality – NatWest Group entered the COVID-19
period with a conservatively positioned CRE portfolio, which
helped to mitigate the effect of COVID-19. The majority of
the defaults during 2021 were in the retail sector,
particularly in the fashion-led shopping centre sub-sector.
NatWest Group completed a strategic sale of a portfolio of
these loans during 2021. Customers experienced reduced
rent collections during COVID-19 albeit rental payments
have now normalised. Outside of retail, there was limited
distress as noted, uncertainty still remains, particularly in
relation to the office sub-sector and the portfolio continues
to be actively reviewed and managed.
 Risk appetite – Lending appetite was gradually and
selectively increased by sub-sector, particularly towards the
end of 2021, albeit these remain below pre-COVID-19 levels.

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Flow statements (audited)
The flow statements that follow show the main ECL and related
income statement movements. They also show the changes in
ECL as well as the changes in related financial assets used in
determining ECL. Due to differences in scope, exposures may
differ from those reported in other tables, principally in relation
to exposures in Stage 1 and Stage 2. These differences do not
have a material ECL effect. Other points to note:
 Financial assets include treasury liquidity portfolios,
comprising balances at central banks and debt securities,
as well as loans. Both modelled and non-modelled portfolios
are included.
 Stage transfers (for example, exposures moving from Stage
1 into Stage 2) are a key feature of the ECL movements,
with the net re-measurement cost of transitioning to a
worse stage being a primary driver of income statement
charges. Similarly, there is an ECL benefit for accounts
improving stage.
 Changes in risk parameters shows the reassessment of the
ECL within a given stage, including any ECL overlays and
residual income statement gains or losses at the point of
write-off or accounting write-down.
 Other (P&L only items) includes any subsequent changes in
the value of written-down assets (for example, fortuitous
recoveries) along with other direct write-off items such as
direct recovery costs. Other (P&L only items) affects the
income statement but does not affect balance sheet ECL
movements.
 Amounts written-off represent the gross asset written-down
against accounts with ECL, including the net asset write-
down for any debt sale activity.
 There were flows from Stage 1 into Stage 3 including
transfers due to unexpected default events. The small
number of write-offs in Stage 1 and Stage 2 reflect the
effect of portfolio debt sales and also staging at the start of
the analysis period.
 The effect of any change in post model adjustments during
the year is typically reported under changes in risk
parameters, as are any effects arising from changes to the
underlying models. Refer to the section on Governance and
post model adjustments for further details.
 All movements are captured monthly and aggregated.
Interest suspended post default is included within Stage 3
ECL with the movement in the value of suspended interest
during the year reported under currency translation and
other adjustments.
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
NatWest Group total
£m £m £m
£m
£m £m £m £m
At 1 January 2021
446,666 519 81,667
3,081
6,524 2,586 534,857 6,186
Currency translation and other adjustments (4,111) (1) (246)
(6)
48 (89) (4,309) (96)
Transfers from Stage 1 to Stage 2 (35,307) (160) 35,307
160
—
—
—
—
Transfers from Stage 2 to Stage 1
62,702 1,322 (62,702)
(1,322)
—
—
—
—
Transfers to Stage 3
(390) (2) (2,628)
(285)
3,018 287
—
—
Transfers from Stage 3
241 21 1,352
188
(1,593) (209)
—
—
Net re-measurement of ECL on stage transfer
(1,114)
869
310 65
Changes in risk parameters
(343)
(566)
244 (665)
Other changes in net exposure
84,331 84 (15,657)
(496)
(1,795) (148) 66,879 (560)
Other (P&L only items) (3)
5
(120) (118)
Income statement (releases)/charges
(1,376)
(188)
286 (1,278)
Transfers to disposal groups (7,954) (24) (1,511)
(120)
(113) (22) (9,578) (166)
Amounts written-off
—
—
(25)
(25)
(851) (851) (876) (876)
Unwinding of discount
—
—
(82) (82)
At 31 December 2021
546,178 302 35,557
1,478
5,238 2,026 586,973 3,806
Net carrying amount 545,876 34,079 3,212 583,167
At 1 January 2020
428,604 322 28,630
752
7,135 2,718 464,369 3,792
2020 movements
18,062 197 53,037
2,329
(611) (132) 70,488 2,394
At 31 December 2020
446,666 519 81,667
3,081
6,524 2,586 534,857 6,186
Net carrying amount
446,147 78,586 3,938 528,671

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Flow statements (audited)
Stage 1 Stage 2 Stage 3 Total
Financial Financial Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
Retail Banking - mortgages
£m £m £m £m £m £m
£m
£m
At 1 January 2021
132,390 23 28,079 227 1,291 236
161,760
486
Currency translation and other adjustments
—
—
—
—
10 10
10
10
Transfers from Stage 1 to Stage 2
(10,957) (3) 10,957 3
—
—
—
—
Transfers from Stage 2 to Stage 1
25,468 162 (25,468) (162)
—
—
—
—
Transfers to Stage 3
(17)
—
(574) (19) 591 19
—
—
Transfers from Stage 3 11
—
343 25 (354) (25)
—
—
Net re-measurement of ECL on stage transfer (156) 117 9 (30)
Changes in risk parameters (1) (9) 58 48
Other changes in net exposure
13,071 (1) (2,589) (27) (263) (19)
10,219
(47)
Other (P&L only items)
(1) 1 (26) (26)
Income statement (releases)/charges
(159) 82 22 (55)
Amounts written-off
—
—
—
—
(8) (8)
(8)
(8)
Unwinding of discount
—
—
(30) (30)
At 31 December 2021
159,966 24 10,748 155 1,267 250
171,981
429
Net carrying amount
159,942 10,593 1,017
171,552
At 1 January 2020
135,625 12 10,283 86 1,289 215
147,197
313
2020 movements
(3,235) 11 17,796 141 2 21
14,563
173
At 31 December 2020
132,390 23 28,079 227 1,291 236
161,760
486
Net carrying amount
132,367 27,852 1,055
161,274
 Despite the strong portfolio growth during 2021, ECL levels
for mortgages reduced during the same period. The
decrease in ECL was primarily a result of reduced PDs and
LGDs reflecting the improved economic outlook and stable
portfolio performance. This resulted in lower levels of SICR
identification and ECL requirement.
 More specifically, the reduced PDs alongside muted
portfolio deterioration resulted in a net migration of assets
from Stage 2 into Stage 1, with an associated decrease
from lifetime ECL to a 12 month ECL.
 With various customer support schemes available and the
revised economic outlook, Stage 3 ECL remained stable as
new inflows remaining subdued. The relatively small ECL
cost for net re-measurement on stage transfer included the
effect of risk targeted ECL adjustments, when previously in
Stage 2. Refer to the Governance and post model
adjustments section for further details.
 Write-off occurs once the repossessed property has been
sold and there is a residual shortfall balance remaining
outstanding. This would typically be within five years from
default but can be longer. Given the moratorium on
repossession activity until later in 2021, write-offs remained
at a subdued level.

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Flow statements (audited)
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
Retail Banking - credit cards
£m £m £m £m £m £m £m £m
At 1 January 2021
2,250 52 1,384 220 114 75 3,748 347
Currency translation and other adjustments —
—
—
—
(1) (1) (1) (1)
Transfers from Stage 1 to Stage 2 (951) (48) 951 48
—
—
—
—
Transfers from Stage 2 to Stage 1
1,119 143 (1,119) (143)
—
—
—
—
Transfers to Stage 3
(17)
—
(84) (35) 101 35
—
—
Transfers from Stage 3
—
—
9 5 (9) (5)
—
—
Net re-measurement of ECL on stage transfer
(88) 184 28 124
Changes in risk parameters
(19) (65) 8 (76)
Other changes in net exposure
339 18 (194) (73) (41) (2) 104 (57)
Other (P&L only items)
—
—
(4) (4)
Income statement (releases)/charges (89) 46 30 (13)
Amounts written-off —
—
—
—
(73) (73) (73) (73)
Unwinding of discount
—
—
(5) (5)
At 31 December 2021 2,740 58 947 141 91 60 3,778 259
Net carrying amount 2,682 806 31 3,519
At 1 January 2020
2,804 38 1,246 131 127 88 4,177 257
2020 movements
(554) 14 138 89 (13) (13) (429) 90
At 31 December 2020
2,250 52 1,384 220 114 75 3,748 347
Net carrying amount
2,198 1,164 39 3,401
 The overall decrease in ECL was mainly due to the
reduction in Stage 2 ECL reflecting the improved economic
outlook and stable portfolio performance, causing PDs to
decrease. This resulted in reduced levels of SICR
identification and ECL requirement.
 More specifically, the reduced PDs alongside muted
portfolio deterioration resulted in a net migration of assets
from Stage 2 into Stage 1, with an associated decrease
from lifetime ECL to a 12 month ECL.
 Cards balances remained broadly flat compared with the
2020 year end. In line with industry trends in the UK, credit
card balances decreased during the first half of the year
but then increased as lockdown restrictions eased and
borrowing demand increased.
 With various customer support schemes available and the
improved economic outlook, Stage 3 inflows remained
subdued and therefore Stage 3 ECL movement was
minimal.
 Charge-off (analogous to partial write-off) typically occurs
after 12 missed payments.

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Flow statements (audited)
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
Retail Banking
-
other personal unsecured
£m
£m £m £m £m £m £m £m
At 1 January 2021
3,385
59 3,487 450 596 495 7,468 1,004
Currency translation and other adjustments
—
—
—
—
2 2 2 2
Transfers from Stage 1 to Stage 2
(1,715)
(39) 1,715 39 —
—
—
—
Transfers from Stage 2 to Stage 1
2,034
164 (2,034) (164) —
—
—
—
Transfers to Stage 3
(10)
—
(339) (120) 349 120
—
—
Transfers from Stage 3
5
7 96 60 (101) (67)
—
—
Net re-measurement of ECL on stage transfer
(133) 161 111 139
Changes in risk parameters
(18) (47) 60 (5)
Other changes in net exposure
849
12 (958) (85) (79) (26) (188) (99)
Other (P&L only items)
—
—
(3) (3)
Income statement (releases)/charges
(139) 29 142 32
Amounts written
-
off
—
—
—
—
(138) (138) (138) (138)
Unwinding of discount
—
—
(17) (17)
At 31 December 2021
4,548
52 1,967 294 629 540 7,144 886
Net carrying amount
4,496
1,673 89 6,258
At 1 January 2020
5,417
63 2,250 252 608 518 8,275 833
2020 movements
(2,032)
(4) 1,237 198 (12) (23) (807) 171
At 31 December 2020
3,385
59 3,487 450 596 495 7,468 1,004
Net carrying amount
3,326
3,037 101 6,464
 The overall decrease in ECL was mainly due to the reduction
in Stage 2 ECL reflecting the improved economic outlook
and stable portfolio performance, causing PDs to decrease.
This resulted in reduced levels of SICR identification and ECL
requirement.
 More specifically, the reduced PDs alongside muted portfolio
deterioration resulted in a net migration of assets from
Stage 2 into Stage 1, with an associated decrease from
lifetime ECL to a 12 month ECL.
 In line with industry trends in the UK, unsecured balances
reduced, amplifying the ECL reductions within the portfolio.
This has stabilised as UK lockdown restrictions have eased
and borrowing demand increased.
 With various customer support schemes available and the
improved economic outlook, Stage 3 inflows remained
subdued and therefore Stage 3 ECL movement was minimal.
 Write-off occurs once recovery activity with the customer
has been concluded or there are no further recoveries
expected, but no later than six years after default.

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Flow statements (audited)
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
Commercial Banking - commercial
assets
ECL
assets ECL assets ECL assets ECL
real estate
£m
£m
£m £m £m £m £m £m
At 1 January 2021
17,269
90
10,380 364 1,118 428 28,767 882
Currency translation and other adjustments
(10)
1
(2) (1) (1) (26) (13) (26)
Inter-group transfers
—
—
—
—
—
—
—
—
Transfers from Stage 1 to Stage 2
(2,687)
(17)
2,687 17
—
—
—
—
Transfers from Stage 2 to Stage 1 7,872
219
(7,872) (219)
—
—
—
—
Transfers to Stage 3
(55)
—
(327) (16) 382 16
—
—
Transfers from Stage 3
71
2
82 7 (153) (9)
—
—
Net re-measurement of ECL on stage transfer
(176)
41 21 (114)
Changes in risk parameters
(119)
(68) 8 (179)
Other changes in net exposure
(107)
16
(2,746) (74) (666) (54) (3,519) (112)
Other (P&L only items)
—
—
—
—
Income statement (releases)/charges
(279)
(101) (25) (405)
Amounts written
-
off
—
—
—
—
(235) (235) (235) (235)
Unwinding of discount
—
—
(4) (4)
At 31 December 2021
22,353
16
2,202 51 445 145 25,000 212
Net carrying amount
22,337 2,151 300 24,788
At 1 January 2020
25,556
31
2,218 28 895 306 28,669 365
2020 movements
(8,287)
59
8,162 336 223 122 98 517
At 31 December 2020
17,269
90
10,380 364 1,118 428 28,767 882
Net carrying amount
17,179 10,016 690 27,885
 Stage 1 and Stage 2 ECL reduced significantly due to the
improvement in the economic outlook, causing both PDs
and LGDs to decrease.
 The updated economics also resulted in a migration of
assets from Stage 2 into Stage 1 as improved underlying
PDs meant assets no longer met Stage 2 criteria.
 Flows into Stage 3 remained low as government support
schemes combined with the economic recovery, suppressed
a higher level of flows into Stage 3.
 The reduction in Stage 3 balances was largely a result of a
portfolio sale of non-performing exposure.
 Performing exposure reduced due to repayments of existing
borrowing with limited appetite for new lending to replace
it.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 236
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Credit risk – Banking activities continued
Flow statements (audited)
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
Commercial Banking - business banking
£m
£m £m £m £m £m £m £m
At 1 January 2021
12,122
41 2,184 145 250 173 14,556 359
Currency translation and other adjustments
—
—
—
—
(7) (5) (7) (5)
Transfers from Stage 1 to Stage 2
(3,641)
(13) 3,641 13 —
—
—
—
Transfers from Stage 2 to Stage 1
2,622
144 (2,622) (144) —
—
—
—
Transfers to Stage 3
(75)
—
(470) (27) 545 27
—
—
Transfers from Stage 3
12
3 38 9 (50) (12)
—
—
Net re-measurement of ECL on stage transfer
(135) 171 38 74
Changes in risk parameters
(11) (23) 9 (25)
Other changes in net exposure
252
(2) (498) (28) (33) (5) (279) (35)
Other (P&L only items)
—
—
(36) (36)
Income statement (releases)/charges (148) 120 6 (22)
Amounts written-off
—
—
—
—
(37) (37) (37) (37)
Unwinding of discount
—
—
(10) (10)
At 31 December 2021
11,292
27 2,273 116 668 178 14,233 321
Net carrying amount
11,265
2,157 490 13,912
At 1 January 2020
6,338
28 767 45 257 200 7,362 273
2020 movements
5,784
13 1,417 100 (7) (27) 7,194 86
At 31 December 2020
12,122
41 2,184 145 250 173 14,556 359
Net carrying amount
12,081
2,039 77 14,197
 At a total level, exposure remained relatively stable with
reduction mainly due to the repayment of government
scheme debt.
 The updated economics resulted in an improvement in
underlying credit metrics resulting in migration of exposure
from Stage 2 into Stage 1 with a consequential reduction
from lifetime ECL to a 12 month ECL calculation. However,
the transfer of exposure from Stage 1 into Stage 2
outweighed the positive migration and was largely related
to customers with government scheme borrowing.
 Flows of defaulted exposure into Stage 3 were mainly a
result of government scheme lending rather than
conventional debt. This was reflected in the lower ECL
associated with the Stage 3 transfers.
 The portfolio continued to benefit from cash recoveries post
write-off, which are reported as other (P&L only items).
Write-off occurs once recovery activity with the customer
has been concluded or there are no further recoveries
expected, but no later than five years after default.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 237
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Additional information
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Credit risk – Banking activities continued
Flow statements (audited)
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
Commercial Banking - other
£m £m £m £m £m £m
£m
£m
At 1 January 2021
39,279 139 25,981 1,204 1,249 468
66,509
1,811
Currency translation and other adjustments (262)
—
(70)
—
77 21
(255)
21
Inter-group transfers 105
—
—
—
—
—
105
—
Transfers from Stage 1 to Stage 2
(7,206) (29) 7,206 29
—
—
—
—
Transfers from Stage 2 to Stage 1
13,581 350 (13,581) (350)
—
—
—
—
Transfers to Stage 3
(80)
—
(558) (42) 638 42
—
—
Transfers from Stage 3
30 6 528 41 (558) (47)
—
—
Net re-measurement of ECL on stage transfer
(306) 160 87 (59)
Changes in risk
parameters
(119) (286) (7) (412)
Other changes in net exposure 1,271 32 (5,003) (165) (386) (35)
(4,118)
(168)
Other (P&L only items)
—
1 (8) (7)
Income statement (releases)/charges (393) (290) 37 (646)
Amounts written-off
—
—
—
—
(195) (195)
(195)
(195)
Unwinding of discount
—
—
(6) (6)
At 31 December 2021
46,718 73 14,503 591 825 328
62,046
992
Net carrying amount
46,645 13,912 497
61,054
At 1 January 2020
53,722 94 8,788 143 1,386 516
63,896
753
2020 movements
(14,443) 45 17,193 1,061 (137) (48)
2,613
1,058
At 31 December 2020
39,279 139 25,981 1,204 1,249 468
66,509
1,811
Net carrying amount
39,140 24,777 781
64,698
 The decrease in ECL across Stage 1 and Stage 2 was
primarily due to improvement in the economic outlook,
causing both PDs and LGDs to reduce.
 The updated economics also resulted in the migration of
assets from Stage 2 into Stage 1 with a consequential
decrease from a lifetime ECL to a 12 month ECL calculation.
 For flows into Stage 3, defaults remained suppressed,
reflecting both the effect of increased liquidity from
government customer support schemes and the improving
economic environment.
 Other changes in net exposure decreased following the
commencement of repayments of government scheme debt
and strategic reduction in high risk sectors.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 238
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Credit risk – Banking activities continued
Flow statements (audited)
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
NatWest Markets (1)
£m £m £m £m £m £m £m £m
At 1 January 2021
33,327 12 1,671 49 168 132 35,166 193
Currency translation and other adjustments
(799)
—
(38) (1) (4) (9) (841) (10)
Inter-group transfers
(105)
—
—
—
—
—
(105) —
Transfers from Stage 1 to Stage 2
(881) (1) 881 1
—
—
—
—
Transfers from Stage 2 to Stage 1
1,762 9 (1,762) (9)
—
—
—
—
Transfers to Stage 3
—
—
(1)
—
1
—
—
—
Net re-measurement of ECL on stage transfer (7) 4
—
(3)
Changes in risk parameters (7) (9) (2) (18)
Other changes in net exposure
79
—
(530) (8) (27) (3) (478) (11)
Other (P&L only items)
—
1 (4) (3)
Income statement (releases)/charges
(14) (12) (9) (35)
Amounts written-off
—
—
(24) (24) (43) (43) (67) (67)
At 31 December 2021
33,383 6 197 3 95 75 33,675 84
Net carrying amount
33,377 194 20 33,591
At 1 January 2020
32,892 10 188 5 183 131 33,263 146
2020 movements
435 2 1,483 44 (15) 1 1,903 47
At 31 December 2020
33,327 12 1,671 49 168 132 35,166 193
Net carrying amount
33,315 1,622 36 34,973
(1)
Reflects the NatWest Markets segment and includes NWM N.V..
 Consistent with other Wholesale portfolios, Stage 1 and
Stage 2 ECL reduced due to the improved economic
outlook which led to a reduction in underlying PDs and
LGDs.
 The Stage 2 population reduced materially with the
improved economic outlook improving credit metrics and
resulting in migration of assets into Stage 1.
Stage 1
Stage 2
Stage 3
Total
Financial
Financial
Financial
Financial
assets
ECL
assets
ECL
assets
ECL
assets
ECL
Ulster Bank RoI - mortgages
£m £m £m £m £m
£m
£m £m
At 1 January 2021
10,919 27 1,682 91 1,061
381
13,662 499
Currency translation and other adjustments
(342) (1) (72) (4) (57)
(55)
(471) (60)
Transfers from Stage 1 to Stage 2
(488) (2) 488 2
—
—
—
—
Transfers from Stage 2 to Stage 1
1,164 54 (1,164) (54)
—
—
—
—
Transfers to Stage 3 (8)
—
(65) (7) 73
7
—
—
Transfers from Stage 3 19 2 172 33 (191)
(35)
—
—
Net re-measurement of ECL on stage transfer (51) (3)
10
(44)
Changes in risk parameters (8) (18)
82
56
Other changes in net exposure
(618) (1) (109) (2) (115)
(3)
(842) (6)
Other (P&L only items)
(1)
—
(12)
(13)
Income statement (releases)/charges
(61) (23)
77
(7)
Transfers to disposal groups (1)
(5,610) (13) (373) (20) (95)
(14)
(6,078) (47)
Amounts written-off
—
—
(1) (1) (72)
(72)
(73) (73)
Unwinding of discount
—
—
(7)
(7)
At 31 December 2021
5,036 7 558 17 604
294
6,198 318
Net carrying amount
5,029 541 310 5,880
At 1 January 2020
10,603 11 1,084 30 1,875
581
13,562 622
2020 movements
316 16 598 61 (814)
(200)
100 (123)
At 31 December 2020
10,919 27 1,682 91 1,061
381
13,662 499
Net carrying amount
10,892 1,591 680 13,163
(1) Reflects balance of disposal groups at 1 January 2021.
 The reduction in balances across all stages was primarily a
result of the agreed sale of mortgages to Permanent TSB
p.l.c..
 A further reduction in Stage 2 balances was mainly due to
the cessation of the collective migration of high-risk
mortgage accounts which were in receipt of COVID-19
payment support during 2020 due to post-payment support
performance. Economic uncertainty post model adjustments
also decreased significantly during the year.
 Like previous years, portfolio improvements and debt sale
activity resulted in deceases in the Stage 3 portfolio.
 Write-offs were mainly a result of the execution of the final
tranche of the 2019 debt sale.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 239
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Credit risk – Banking activities continued
Stage 2 decomposition – arrears status and contributing factors
The tables below show Stage 2 decomposition for the Personal and Wholesale portfolios.
UK mortgages
RoI mortgages
Credit cards
Other
Total
Loans
ECL
Loans
ECL
Loans
ECL
Loans
ECL
Loans
ECL
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Personal
Currently >30 DPD
397
9
38 3
11
6 50 13 496 31
Currently <=30 DPD
10,593
148
515 14
922
135 1,897 286 13,927 583
- PD deterioration
2,400
56
58
4
549
96
970
174
3,977
330
- PD persistence
3,088
38
21
1
270
23
770
91
4,149
153
- Other driver (adverse credit, forbearance etc)
5,105
54
436
9
103
16
157
21
5,801
100
Total Stage 2
10,990
157
553 17
933
141 1,947 299 14,423 614
2020
Personal
Currently >30 DPD
426 19 109 11 10 6 75
25
620 61
Currently <=30 DPD
27,477 209 1,559 80 1,365 219 3,331
427
33,732 935
- PD deterioration
13,136
163
664
42
901
167
2,242
354
16,943
726
-
PD persistence
9,977
22
46
2
350
32
966
57
11,339
113
- Other driver (adverse credit, forbearance etc)
4,364
24
849
36
114
20
123
16
5,450
96
Total Stage 2
27,903 228 1,668 91 1,375 225 3,406
452
34,352 996
 The improved economic outlook, including forecast
increases in unemployment, resulted in decreased account
level IFRS 9 PDs during the year. Consequently, compared
to 2020, a smaller proportion of accounts exhibited
significant PD deterioration causing Stage 2 exposures to
decrease significantly and increase the proportion of cases
in Stage 2 for other reasons.
 During the year, a subset of customers who had accessed
payment holiday support and where their risk profile was
identified as relatively high risk, were collectively migrated
into Stage 2. For mortgages, in Retail Banking,
approximately £0.8 billion of exposures were collectively
migrated from Stage 1 into Stage 2. The impact of
collective migrations on unsecured lending was much more
limited.
 As expected, ECL coverage was higher in accounts that
were more than 30 days past due than those in Stage 2 for
other reasons.
Property
Corporate
Financial institutions
Sovereign
Total
Loans
ECL
Loans
ECL
Loans
ECL
Loans
ECL
Loans
ECL
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Wholesale
Currently >30 DPD
239 3 390 8 19
—
—
—
648 11
Currently <=30 DPD
2,862 108 15,214 705 713 39 121 1 18,910 853
- PD deterioration
896
57
10,391
549
595
36
84
1
11,966
643
- PD persistence
139
8
552
32
6
—
1
—
698
40
- Other driver (forbearance, RoCL etc)
1,827
43
4,271
124
112
3
36
—
6,246
170
Total Stage 2
3,101 111 15,604 713 732 39 121 1 19,558 864
2020
Wholesale
Currently >30 DPD
136
6
215 28 110 — — — 461 34
Currently <=30 DPD
12,885
501
27,501 1,459 3,514 90 204 1 44,104 2,051
- PD deterioration
11,765
450
23,268
1,229
3,182
85
97
—
38,312
1,764
-
PD persistence
162
5
623
20
7
—
—
—
792
25
- Other driver (forbearance, RoCL etc)
958
46
3,610
210
325
5
107
1
5,000
262
Total Stage 2
13,021
507
27,716 1,487 3,624 90 204 1 44,565 2,085
 The improved economic outlook, including upgrades in GDP
and commercial real estate valuations, resulted in a
reduction of IFRS 9 PDs. Consequently, compared to 2020,
a large proportion of exposure no longer exhibited a SICR
and migrated back into Stage 1 resulting in a reduction in
Stage 2 exposure.
 PD deterioration remained the primary trigger for
identifying a SICR and Stage 2 treatment, although there
was also an increase in arrears and other drivers.
 The increase in arrears greater than 30 days was partially a
result of the commencement of payments on government
scheme debt with some customers unable to make
scheduled repayments.
 There was a decrease in flows on to the Risk of Credit Loss
framework. At a total level, exposure on the Risk of Credit
Loss framework remained above pre-COVID-19 levels.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 240
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Credit risk – Banking activities continued
Stage 2 decomposition – by a significant increase in credit risk trigger
UK mortgages
RoI mortgages
Credit cards
Other
Total
2021
£m
%
£m
%
£m
%
£m
%
£m
%
Personal trigger
(1)
PD movement 2,707 24.6 83 14.9 560 60.1
1,008
51.8
4,358
30.2
PD persistence
3,103 28.2 21 3.8 270 28.9
771
39.6
4,165
28.9
Adverse credit bureau recorded with credit
reference agency
3,657 33.3 —
—
60 6.4
73
3.7
3,790
26.3
Forbearance
support provided
178 1.6 6 1.1 2 0.2
28
1.4
214
1.5
Customers in collections 82 0.8 33 6.0 3 0.3
15
0.8
133
0.9
Collective SICR and other reasons (2) 1,197 10.9 409 74.0 38 4.1
46
2.4
1,690
11.7
Days past due >30
66 0.6 1 0.2
—
—
6
0.3
73
0.5
10,990 100 553 100 933 100
1,947
100
14,423
100
2020
Personal trigger
(1)
PD movement
13,520 48.4 751 45.0 911 66.2
2,310
67.8
17,492
51.0
PD persistence
9,977 35.8 46 2.8 350 25.5
968
28.4
11,341
33.0
Adverse credit bureau recorded with credit
reference agency
2,936 10.5 — — 51 3.7
46
1.4
3,033
8.8
Forbearance support provided
138 0.5 7 0.4 1 0.1
9
0.3
155
0.5
Customers in
collections
131 0.5 30 1.8 2 0.1
14
0.4
177
0.5
Collective SICR and other reasons (2)
1,165 4.2 832 49.9 60 4.4
55
1.6
2,112
6.1
Days past due >30
36 0.1 2 0.1 — —
4
0.1
42
0.1
27,903 100 1,668 100 1,375 100
3,406
100
34,352
100
For the notes to this table refer to the following page.
 The improved economic outlook, including a more optimistic
forecast for unemployment, resulted in decreased account
level IFRS 9 PDs. Consequently, compared to 2020, a
smaller proportion of accounts exhibited significant PD
deterioration at 31 December 2021.
 Since the 2020 year end, large populations of Stage 2 were
migrated into Stage 1 reflecting continued reductions in PDs
as a result of the improved economic outlook alongside
stable portfolio performance during the year.
 However, a subset of customers who had accessed
payment holiday support, and where their risk profile was
identified as relatively high risk, were collectively migrated
into Stage 2. In Retail Banking (primarily mortgages),
approximately £0.8 billion of exposures were collectively
migrated from Stage 1 into Stage 2. The effect of collective
migrations on unsecured lending was much more limited.
PD movement made up a smaller proportion of Stage 2 for
UK mortgages than at the 2020 year end, supporting the
use of the collective SICR migration approach described
above.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 241
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Credit risk – Banking activities continued
Stage 2 decomposition – by a significant increase in credit risk trigger continued
Property
Corporate
Financial institutions
Sovereign
Total
2021
£m
%
£m
%
£m
%
£m
%
£m
%
Wholesale trigger (1)
PD movement
942 30.3 10,553 67.7 595 81.3
84
69.4
12,174
62.2
PD persistence
139 4.5 553 3.5 6 0.8
1
0.8
699
3.6
Risk of Credit Loss 962 31.0 2,626 16.8 71 9.7
34
28.1
3,693
18.9
Forbearance support provided
101 3.3 489 3.1 6 0.8
—
—
596
3.0
Customers in collections
27 0.9 88 0.6 1 0.1
—
—
116
0.6
Collective SICR and other reasons (2) 762 24.6 1,189 7.6 35 4.8
2
1.7
1,988
10.2
Days past due >30
168 5.4 106 0.7 18 2.5
—
—
292
1.5
3,101
100
15,604
100
732
100
121
100
19,558
100
2020
Wholesale trigger (1)
PD movement 11,849 91.1 23,403 84.3 3,183 87.9
97
47.6
38,532
86.6
PD persistence 162 1.2 624 2.3 7 0.2
—
—
793
1.8
Risk of Credit Loss 394 3.0 2,106 7.6 66 1.8
39
19.1
2,605
5.8
Forbearance support provided 73 0.6 133 0.5 27 0.7
—
—
233
0.5
Customers in collections
30
0.2
115
0.4
1
—
—
—
146
0.3
Collective SICR and other reasons (2)
462 3.5 1,262 4.6 231 6.4
68
33.3
2,023
4.5
Days past due >30 51 0.4 73 0.3 109 3.0
—
—
233
0.5
13,021 100 27,716 100 3,624 100
204
100
44,565
100
(1)
The table is prepared on a
hierarchical basis from top to bottom, for example, accounts with PD deterioration may also trigger backstop(s) but are only
reported under PD
deterioration.
(2)
Includes customers where a PD assessment cannot be undertaken due to missing PDs.
 PD deterioration continued to be the primary trigger of
migration of exposures from Stage 1 into Stage 2. As the
economic outlook improved during 2021, there was a
reduction in cases triggered into Stage 2 exposure.
 Moving exposures on to the Risk of Credit Loss framework
remained an important backstop indicator of a SICR. The
exposures classified under the Stage 2 Risk of Credit Loss
framework trigger increased over the period as less
exposures were captured under the PD deterioration Stage
2 trigger.
 PD persistence related to the business banking portfolio
only.
Stage 3 vintage analysis
The table below shows estimated vintage analysis of the material Stage 3 portfolios.
2021
2020
Retail Banking
Ulster Bank RoI
Retail Banking
Ulster Bank RoI
mortgages
mortgages
Wholesale
mortgages
mortgages
Wholesale
Stage 3 loans (£bn)
1.2 0.6 2.1
1.3 1.1 2.9
Vintage (time in default):
<1 year
26% 11% 19%
25% 6% 46%
1
-
3 years
30% 15% 20%
32% 18% 16%
3-5 years 13% 8% 7%
11% 23% 7%
5-10 years 17% 40% 54%
22% 36% 31%
>10 years
14% 26%
10% 17% —
100% 100% 100%
100% 100% 100%
 Retail Banking and Ulster Bank RoI mortgages – The
proportion of the Stage 3 defaulted population which have
been in default for over five years reflected NatWest Group’s
support for customers in financial difficulty. When customers
continue to engage constructively with NatWest Group,
making regular payments, NatWest Group continues to
support them.
 Wholesale – The reduction in the proportion of loans in Stage
3 for less than one year was mainly due to lower flows into
default during 2021 with customers supported by
government support schemes and a positive economic
recovery trajectory. Exposures which were in Stage 3 for in
excess of five years, were mainly related to customers being
in a protracted formal insolvency process or subject to
litigation or a complaints process.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 242
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Credit risk – Banking activities continued
Asset quality (audited)
The table below shows asset quality bands of gross loans and ECL, by stage, for the Personal portfolio.
Gross loans ECL provisions ECL provisions coverage
Stage 1
Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
2021
£m
£m £m £m £m £m £m £m % % % %
UK mortgages
AQ1-AQ4
93,956
3,157
—
97,113 8 40
—
48 0.01 1.27
—
0.05
AQ5-AQ8
81,160
7,325
—
88,485 17 103
—
120 0.02 1.41
—
0.14
AQ9
290
508
—
798 — 14
—
14 — 2.76
—
1.75
AQ10
—
—
1,451 1,451 —
—
269 269 —
—
18.54 18.54
175,406
10,990 1,451 187,847 25 157 269 451 0.01 1.43 18.54 0.24
RoI mortgages
AQ1-AQ4
3,669
226
—
3,895 5 5
—
10 0.14 2.21
—
0.26
AQ5-AQ8
1,335
176
—
1,511 2 6
—
8 0.15 3.41
—
0.53
AQ9
8
151
—
159 — 6
—
6 — 3.97
—
3.77
AQ10
—
—
599 599 —
—
293 293 —
—
48.91 48.91
5,012
553 599 6,164 7 17 293 317 0.14 3.07 48.91 5.14
Credit cards
AQ1-AQ4
44
1
—
45 1
—
—
1 2.27
—
—
2.22
AQ5-AQ8
2,874
894
—
3,768 58 130
—
188 2.02 14.54
—
4.99
AQ9
6
38
—
44 — 11
—
11 — 28.95
—
25.00
AQ10
—
—
90 90 —
—
60 60 —
—
66.67 66.67
2,924
933 90 3,947 59 141 60 260 2.02 15.11 66.67 6.59
Other personal
AQ1-AQ4
831
88
—
919 6 19
—
25 0.72 21.59
—
2.72
AQ5
-
AQ8
5,950
1,723
—
7,673 51 243
—
294 0.86 14.10
—
3.83
AQ9
52
136
—
188 1 37
—
38 1.92 27.21
—
20.21
AQ10
—
—
642 642 —
—
557 557 —
—
86.76 86.76
6,833
1,947 642 9,422 58 299 557 914 0.85 15.36 86.76 9.70
Total personal
AQ1-AQ4
98,500
3,472
—
101,972 20 64
—
84 0.02 1.84
—
0.08
AQ5-AQ8
91,319
10,118
—
101,437 128 482
—
610 0.14 4.76
—
0.60
AQ9
356
833
—
1,189 1 68
—
69 0.28 8.16
—
5.80
AQ10
—
—
2,782 2,782 —
—
1,179 1,179 —
—
42.38 42.38
190,175
14,423 2,782 207,380 149 614 1,179 1,942 0.08 4.26 42.38 0.94

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 243
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Asset quality (audited)
Gross loans ECL provisions ECL provisions coverage
Stage 1 Stage 2 Stage 3
Total
Stage 1 Stage 2
Stage 3
Total Stage 1
Stage 2
Stage 3 Total
2020 £m £m £m
£m
£m £m
£m
£m %
%
% %
UK mortgages
AQ1-AQ4
108,869 6,634 —
115,503
10 33
—
43 0.01
0.50
— 0.04
AQ5-AQ8
38,347 20,254 —
58,601
14 146
—
160 0.04
0.72
— 0.27
AQ9
240 1,015 —
1,255
— 49
—
49 —
4.83
— 3.90
AQ10
— — 1,507
1,507
— —
254
254 —
—
16.85 16.85
147,456 27,903 1,507
176,866
24 228
254
506 0.02
0.82
16.85 0.29
RoI mortgages
AQ1-AQ4
8,247 777 —
9,024
20 38
—
58 0.24
4.89
— 0.64
AQ5-AQ8
2,677 560 —
3,237
7 34
—
41 0.26
6.07
— 1.27
AQ9
7 331 —
338
— 19
—
19 —
5.74
— 5.62
AQ10
— — 1,051
1,051
— —
381
381 —
—
36.25 36.25
10,931 1,668 1,051
13,650
27 91
381
499 0.25
5.46
36.25 3.66
Credit cards
AQ1-AQ4
23 4 —
27
1 2
—
3 4.35
50.00
— 11.11
AQ5-AQ8
2,384 1,329 —
3,713
52 208
—
260 2.18
15.65
— 7.00
AQ9
4 42 —
46
— 15
—
15 —
35.71
— 32.61
AQ10
— — 109
109
— —
76
76 —
—
69.72 69.72
2,411 1,375 109
3,895
53 225
76
354 2.20
16.36
69.72 9.09
Other personal
AQ1-AQ4
1,234 59 —
1,293
8 9
—
17 0.65
15.25
— 1.31
AQ5
-
AQ8
4,461 3,020 —
7,481
58 336
—
394 1.30
11.13
— 5.27
AQ9
55 327 —
382
1 107
—
108 1.82
32.72
— 28.27
AQ10
— — 621
621
— —
517
517 —
—
83.25 83.25
5,750 3,406 621
9,777
67 452
517
1,036 1.17
13.27
83.25 10.60
Total personal
AQ1-AQ4
118,373 7,474 —
125,847
39 82
—
121 0.03
1.10
— 0.10
AQ5-AQ8
47,869 25,163 —
73,032
131 724
—
855 0.27
2.88
— 1.17
AQ9
306 1,715 —
2,021
1 190
—
191 0.33
11.08
— 9.45
AQ10
— — 3,288
3,288
— —
1,228
1,228 —
—
37.35 37.35
166,548 34,352 3,288
204,188
171 996
1,228
2,395 0.10
2.90
37.35 1.17
 In the Personal portfolio, the majority of exposures were in
AQ4 and AQ5 within the mortgage portfolios. Overall,
personal asset quality improved slightly with migration in
assets from AQ4 to AQ5 in mortgages offset by migration
from AQ9 into better quality bands. As expected, mortgage
exposures had a higher proportion in AQ1-AQ4 than
unsecured borrowing.
 As noted previously, significant migration from Stage 2 into
Stage 1 across all AQ bands was observed, as IFRS PDs
reduced.
 In other personal, the relatively high level of exposures in
AQ10 reflected that impaired assets can be held on the
balance sheet, with commensurate ECL provision, for up to
six years after default.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 244
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Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Asset quality (audited)
The table below shows asset quality bands of gross loans and ECL, by stage, for the Wholesale portfolio.
Gross loans ECL provisions ECL provisions coverage
Stage 1 Stage 2 Stage 3
Total
Stage 1 Stage 2
Stage 3
Total
Stage 1 Stage 2
Stage 3
Total
2021 £m £m £m
£m
£m £m
£m
£m
% %
%
%
Property
AQ1-AQ4
13,529 223
—
13,752
3 7
—
10
0.02 3.14
—
0.07
AQ5
-
AQ8
15,126 2,742
—
17,868
21 94
—
115
0.14 3.43
—
0.64
AQ9 24 136
—
160
—
10
—
10
—
7.35
—
6.25
AQ10
—
—
742
742
—
—
239
239
—
—
32.21
32.21
28,679 3,101 742
32,522
24 111
239
374
0.08 3.58
32.21
1.15
Corporate
AQ1-AQ4
18,378 1,027
—
19,405
8 48
—
56
0.04 4.67
—
0.29
AQ5-AQ8
35,351 13,922
—
49,273
88 621
—
709
0.25 4.46
—
1.44
AQ9
74 655
—
729
—
44
—
44
—
6.72
—
6.04
AQ10
—
—
1,444
1,444
—
—
602
602
—
—
41.69
41.69
53,803 15,604 1,444
70,851
96 713
602
1,411
0.18 4.57
41.69
1.99
Financial institutions
AQ1-AQ4
50,121 63
—
50,184
7 1
—
8
0.01 1.59
—
0.02
AQ5-AQ8
2,138 667
—
2,805
7 38
—
45
0.33 5.70
—
1.60
AQ9 4 2
—
6
—
—
—
—
—
—
—
—
AQ10
—
—
46
46
—
—
4
4
—
—
8.70
8.70
52,263 732 46
53,041
14 39
4
57
0.03 5.33
8.70
0.11
Sovereign
AQ1-AQ4 5,787 35
—
5,822
19 1
—
20
0.33 2.86
—
0.34
AQ5-AQ8 117 86
—
203
—
—
—
—
—
—
—
—
AQ9
—
—
—
—
—
—
—
—
—
—
—
—
AQ10
—
—
8
8
—
—
2
2
—
—
25.00
25.00
5,904 121 8
6,033
19 1
2
22
0.32 0.83
25.00
0.36
Total
AQ1
-
AQ4
87,815 1,348
—
89,163
37 57
—
94
0.04 4.23
—
0.11
AQ5-AQ8 52,732 17,417
—
70,149
116 753
—
869
0.22 4.32
—
1.24
AQ9 102 793
—
895
—
54
—
54
—
6.81
—
6.03
AQ10
—
—
2,240
2,240
—
—
847
847
—
—
37.81
37.81
140,649 19,558 2,240
162,447
153 864
847
1,864
0.11 4.42
37.81
1.15
2020
Property
AQ1-AQ4
12,694 2,079 —
14,773
20 40
—
60 0.16
1.92
—
0.41
AQ5-AQ8
10,785 10,780 —
21,565
103 450
—
553 0.96
4.17
—
2.56
AQ9
254 162 —
416
— 17
—
17 —
10.49
—
4.09
AQ10
— — 1,322
1,322
— —
545
545 —
—
41.23
41.23
23,733 13,021 1,322
38,076
123 507
545
1,175 0.52
3.89
41.23
3.09
Corporate
AQ1-AQ4
17,757 2,726 —
20,483
20 51
—
71 0.11
1.87
—
0.35
AQ5-AQ8
29,405 24,430 —
53,835
167 1,374
—
1,541 0.57
5.62
—
2.86
AQ9
928 560 —
1,488
1 62
—
63 0.11
11.07
—
4.23
AQ10
— — 1,727
1,727
— —
803
803 —
—
46.50
46.50
48,090 27,716 1,727
77,533
188 1,487
803
2,478 0.39
5.37
46.50
3.20
Financial institutions
AQ1-AQ4
42,222 1,985 —
44,207
13 13
—
26 0.03
0.65
—
0.06
AQ5-AQ8
1,776 1,453 —
3,229
10 39
—
49 0.56
2.68
—
1.52
AQ9
4 186 —
190
— 38
—
38 —
20.43
—
20.00
AQ10
— — 17
17
— —
8
8 —
—
47.06
47.06
44,002 3,624 17
47,643
23 90
8
121 0.05
2.48
47.06
0.25
Sovereign
AQ1-AQ4
4,731 106 —
4,837
14 1
—
15 0.30
0.94
—
0.31
AQ5
-
AQ8
17 98 —
115
— —
—
— —
—
—
—
AQ9
3 — —
3
— —
—
— —
—
—
—
AQ10
— — 4
4
— —
2
2 —
—
50.00
50.00
4,751 204 4
4,959
14 1
2
17 0.29
0.49
50.00
0.34
Total
AQ1-AQ4
77,404 6,896 —
84,300
67 105
—
172 0.09
1.52
—
0.20
AQ5
-
AQ8
41,983 36,761 —
78,744
280 1,863
—
2,143 0.67
5.07
—
2.72
AQ9
1,189 908 —
2,097
1 117
—
118 0.08
12.89
—
5.63
AQ10
— — 3,070
3,070
— —
1,358
1,358 —
—
44.23
44.23
120,576 44,565 3,070
168,211
348 2,085
1,358
3,791 0.29
4.68
44.23
2.25

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 245
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Risk and capital management
Additional information
Financial review
Credit risk – Banking activities continued
Asset quality (audited)
 Across the Wholesale portfolio, the asset quality band
distribution differed, reflective of the underlying quality of
counterparties within each segment.
 Asset quality improvement was observed across most
segments as the economy recovered from the effects of
COVID-19.
 The reduction in AQ10 exposure in property was largely due
to a portfolio sale of commercial real estate.
 Within the Wholesale portfolio, customer credit grades were
reassessed as and when a request for financing was made,
a scheduled customer credit review was undertaken or a
material event specific to that customer occurred.
 ECL provisions coverage showed the expected trend with
increased coverage in the poorer asset quality bands, and
also by stage.
 The low provision coverage for Stage 3 loans in financial
institutions for 2021 reflected the secured nature of one
exposure classified AQ10.
Credit risk – Trading activities
This section details the credit risk profile of NatWest Group’s trading activities.
Securities financing transactions and collateral (audited)
The table below shows securities funding transactions in NatWest Markets and Treasury. Balance sheet captions include balances
held at all classifications under IFRS 9.
Reverse Repos Repos
Total
Of which
can be offset
Outside netting
arrangements Total
Of which can be
offset
Outside netting
arrangements
2021 £m £m £m £m £m £m
Gross
78,909 78,259 650 73,858 72,712 1,146
IFRS offset
(32,016) (32,016)
—
(32,016) (32,016)
—
Carrying value
46,893 46,243 650 41,842 40,696 1,146
Master netting arrangements
(900) (900)
—
(900) (900)
—
Securities collateral
(45,271) (45,271)
—
(39,794) (39,794)
—
Potential for offset not recognised under IFRS
(46,171) (46,171)
—
(40,694) (40,694)
—
Net
722 72 650 1,148 2 1,146
2020
Gross
80,388 80,025 363 66,493 64,793 1,700
IFRS offset
(35,820) (35,820) — (35,820) (35,820) —
Carrying value
44,568 44,205 363 30,673 28,973 1,700
Master netting arrangements
(929) (929) — (929) (929) —
Securities collateral
(43,204) (43,204) — (28,044) (28,044) —
Potential for offset not recognised under IFRS
(44,133) (44,133) — (28,973) (28,973) —
Net
435 72 363 1,700 — 1,700

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 246
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Risk and capital management
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Credit risk – Trading activities continued
Derivatives (audited)
The table below shows derivatives by type of contract. The master netting agreements and collateral shown do not result in a net
presentation on the balance sheet under IFRS. A significant proportion (more than 90%) of the derivatives relate to trading
activities in NatWest Markets. The table also includes hedging derivatives in Treasury.
2021
2020
Notional
GBP
USD Euro
Other
Total Assets Liabilities
Notional Assets Liabilities
£bn
£bn £bn
£bn
£bn £m £m
£bn £m £m
Gross exposure
114,100 109,403
177,330 172,245
IFRS offset
(7,961) (8,568)
(10,807) (11,540)
Carrying value
3,512
3,270 4,092
1,226
12,100 106,139 100,835
14,047 166,523 160,705
Of which:
Interest rate (1)
3,191
1,878 3,536
314
8,919 67,458 61,206
10,703 114,115 105,214
Exchange rate
319
1,388 548
912
3,167 38,517 39,286
3,328 52,239 55,107
Credit
2
4 8
—
14 154 343
15 161 376
Equity and commodity
—
—
—
—
— 10 —
1 8 8
Carrying value
12,100 106,139 100,835
14,047 166,523 160,705
Counterparty mark-to-market netting
(85,006) (85,006)
(137,086) (137,086)
Cash collateral
(15,035) (9,909)
(19,608) (15,034)
Securities collateral
(2,428) (2,913)
(5,053) (4,921)
Net exposure 3,670 3,007
4,776 3,664
Banks (2)
393 413
206 557
Other financial institutions
(3) 1,490 1,584
1,436 1,931
Corporate (4) 1,716 938
2,985 1,082
Government (5) 71 72
149 94
Net exposure
3,670 3,007
4,776 3,664
UK
1,990 1,122
2,914 1,627
Europe
714 1,028
1,091 1,118
US
645 653
470 644
RoW
321 204
301 275
Net exposure
3,670 3,007
4,776 3,664
Asset quality of uncollateralised
derivative assets
AQ1-AQ4
2,939
3,464
AQ5-AQ8
674
1,283
AQ9-AQ10
57
29
Net exposure
3,670
4,776
(1) The notional amount of interest rate derivatives includes £6,173 billion (2020 – £7,390 billion) in respect of contracts cleared through central clearing counterparties.
(2) Transactions with certain counterparties with whom NatWest Group has netting arrangements but collateral is not posted on a daily basis; certain transactions with specific terms that may
not fall within netting and collateral arrangements; derivative positions in certain jurisdictions for example China where the collateral agreements are not deemed to be legally enforceable.
(3) Includes transactions with securitisation vehicles and funds where collateral posting is contingent on NatWest Group’s external rating.
(4) Mainly large corporates with whom NatWest Group may have netting arrangements in place, but operational capability does not support collateral posting.
(5) Sovereigns and supranational entities with no collateral arrangements, collateral arrangements that are not considered enforceable, or one-way collateral agreements in their favour.

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 247
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review
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Risk and capital management
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Credit risk – Trading activities continued
Derivatives: settlement basis and central counterparties (audited)
The table below shows the third party derivative notional and fair value by trading and settlement method.
Notional
Traded over the counter Asset Liability
Traded on Settled Not settled Traded on Traded Traded on
Traded
recognised by central by central recognised over the recognised
over the
exchanges counterparties counterparties
Total
exchanges
counter
exchanges
counter
2021
£bn £bn £bn
£bn
£m £m £m
£m
Interest rate
723
6,173
2,023
8,919
—
67,458
—
61,206
Exchange rate
2
—
3,165
3,167
—
38,517
—
39,286
Credit
—
—
14
14
—
154
—
343
Equity and commodity
—
—
—
—
—
10
—
—
Total
725
6,173
5,202
12,100
—
106,139
—
100,835
2020
Interest rate
1,032 7,390 2,281
10,703
— 114,115 —
105,214
Exchange rate
2
—
3,326
3,328
—
52,239
—
55,107
Credit
— — 15
15
— 161 —
376
Equity and commodity
— — 1
1
— 8 —
8
Total
1,034 7,390 5,623
14,047
— 166,523 —
160,705
Debt securities (audited)
The table below shows debt securities held at mandatory fair value through profit or loss by issuer as well as ratings based on the
lowest of Standard & Poor’s, Moody’s and Fitch. A significant proportion (more than 95%) of these positions are trading securities in
NatWest Markets.
Central and local government
Financial
institutions
UK US
Other
Corporate Total
2021 £m £m £m £m £m £m
AAA
—
—
2,011 838 — 2,849
AA to AA+
—
3,329 3,145 1,401 62 7,937
A to AA-
6,919
—
1,950 308 57 9,234
BBB- to A-
—
—
3,792 346 517 4,655
Non-investment grade
—
—
31 163 82 276
Unrated
—
—
—
3 3 6
Total
6,919 3,329 10,929 3,059 721 24,957
Short positions
(9,790) (56) (12,907) (2,074) (137) (24,964)
2020
AAA
— — 3,114 1,113 — 4,227
AA to AA+
— 5,149 3,651 576 49 9,425
A to AA-
4,184 — 1,358 272 81 5,895
BBB- to A-
— — 8,277 444 656 9,377
Non-investment grade
— — 36 127 53 216
Unrated
— — — 150 5 155
Total
4,184 5,149 16,436 2,682 844 29,295
Short positions
(5,704) (1,123) (18,135) (1,761) (56) (26,779)

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 248
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Credit risk – Cross border exposure
Cross border exposures comprise both banking and trading activities, including reverse repurchase agreements. Exposures
comprise loans and advances, including finance leases and instalment credit receivables, and other monetary assets, such as debt
securities. The geographical breakdown is based on the country of domicile of the borrower or guarantor of ultimate risk. Cross
border exposures include non-local currency claims of overseas offices on local residents but exclude exposures to local residents
in local currencies. The table shows cross border exposures greater than 0.5% of NatWest Group’s total assets.
Short Net of short
Government
Banks
Other
Total positions positions
2021 £m £m £m £m £m £m
Western Europe
17,206 6,968 17,177 41,351 13,603 27,748
Of which: France
5,391
1,258
3,825
10,474
2,919
7,555
Germany
3,164
3,640
1,835
8,639
3,111
5,528
Italy
3,040
210
797
4,047
3,449
598
United States
10,345 3,548 8,539 22,432 1,862 20,570
2020
Western Europe
23,651 9,232 21,091 53,974 18,756 35,218
Of which: France
5,098 1,574 6,270 12,942 2,465 10,477
Germany
4,913 4,020 2,343 11,276 3,833 7,443
Italy
4,985 319 791 6,095 3,583 2,512
Spain
2,980 731 1,120 4,831 3,773 1,058
United States
12,430 4,316 7,186 23,932 1,239 22,693

Risk and capital management continued
NatWest Group Annual Report and Accounts 2021 249
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Risk and capital management
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Capital, liquidity and funding risk
NatWest Group continually ensures a comprehensive approach
is taken to the management of capital, liquidity and funding,
underpinned by frameworks, risk appetite and policies, to
manage and mitigate capital, liquidity and funding risks. The
framework ensures the tools and capability are in place to
facilitate the management and mitigation of risk ensuring
NatWest Group operates within its regulatory requirements and
risk appetite.
Definitions (audited)
Regulatory capital consists of reserves and instruments issued
that are available, have a degree of permanency and are
capable of absorbing losses. A number of strict conditions set
by regulators must be satisfied to be eligible as capital.
Capital adequacy risk is the risk that there is or will be
insufficient capital and other loss-absorbing debt instruments to
operate effectively including meeting minimum regulatory
requirements, operating within Board approved risk appetite
and supporting its strategic goals.
Liquidity consists of assets that can be readily converted to
cash within a short timeframe at a reliable value. Liquidity risk
is the risk of being unable to meet financial obligations as and
when they fall due.
Funding consists of on-balance sheet liabilities that are used to
provide cash to finance assets. Funding risk is the risk of not
maintaining a diversified, stable and cost-effective funding
base.
Liquidity and funding risks arise in a number of ways, including
through the maturity transformation role that banks perform.
The risks are dependent on factors such as:
 Maturity profile;
 Composition of sources and uses of funding;
 The quality and size of the liquidity portfolio;
 Wholesale market conditions; and
 Depositor and investor behaviour.
Sources of risk (audited)
Capital
The eligibility of instruments and financial resources as
regulatory capital is laid down by applicable regulation. Capital
is categorised under two tiers (Tier 1 and Tier 2) according to
the ability to absorb losses, degree of permanency and the
ranking of absorbing losses on either a going or gone concern
basis. There are three broad categories of capital across these
two tiers:
 CET1 capital - CET1 capital must be perpetual and capable
of unrestricted and immediate use to cover risks or losses
as soon as these occur. This includes ordinary shares issued
and retained earnings.
 Additional Tier 1 (AT1) capital - This is the second type of
loss absorbing capital and must be capable of absorbing
losses on a going concern basis. These instruments are
either written down or converted into CET1 capital when
the CET1 ratio falls below a pre-specified level.
 Tier 2 capital - Tier 2 capital is supplementary capital and
provides loss absorption on a gone concern basis. Tier 2
capital absorbs losses after Tier 1 capital. It typically
consists of subordinated debt securities with a minimum
maturity of five years at the point of issuance.
Minimum requirement for own funds and eligible
liabilities (MREL)
In addition to capital, other specific loss-absorbing instruments,
including senior notes issued by NatWest Group, may be used
to cover certain gone concern capital requirements, which is
referred to as MREL. Gone concern refers to the situation in
which resources must be available to enable an orderly
resolution, in the event that the Bank of England (BoE) deems
that NatWest Group has failed or is likely to fail.
Liquidity
NatWest Group maintains a prudent approach to the definition
of liquidity resources. NatWest Group manages its liquidity to
ensure it is always available when and where required, taking
into account regulatory, legal and other constraints. Following
ring-fencing legislation, liquidity is no longer considered
fungible across NatWest Group. Principal liquidity portfolios are
maintained in the UK Domestic Liquidity Sub-Group (UK
DoLSub) (primarily in NatWest Bank Plc), UBIDAC, NatWest
Markets Plc, RBS International Limited and NWM N.V.. Some
disclosures in this section where relevant are presented, on a
consolidated basis, for NatWest Group, the UK DoLSub and on
a solo basis for NatWest Markets Plc.
Liquidity resources are divided into primary and secondary
liquidity as follows:
 Primary liquid assets include cash and balances at central
banks, Treasury bills and other high quality government
and supranational securities.
 Secondary liquid assets are eligible as collateral for local
central bank liquidity facilities. These assets include own-
issued securitisations or whole loans that are retained on
balance sheet and pre-positioned with a central bank so
that they may be converted into additional sources of
liquidity at very short notice.
Funding
NatWest Group maintains a diversified set of funding sources,
including customer deposits, wholesale deposits and term debt
issuance. NatWest Group also retains access to central bank
funding facilities.
For further details on capital constituents and the regulatory
framework covering capital, liquidity and funding requirements,
please refer to the NatWest Group Pillar 3 Report 2021 Capital,
liquidity and funding section.

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Capital management
Capital management ensures that there is sufficient capital and
other loss-absorbing instruments to operate effectively
including meeting minimum regulatory requirements, operating
within Board-approved risk appetite, maintaining its credit
rating and supporting its strategic goals.
Capital management is critical in supporting the businesses and
is enacted through an end-to-end framework across businesses
and legal entities. Capital is managed within the organisation at
the following levels; NatWest Group consolidated, NWH Group
sub consolidated, NatWest Markets Plc, NatWest Markets N.V.
and RBS International Limited. The banking subsidiaries within
NWH Group are governed by the same principles, processes
and management as NatWest Group. Note that although the
aforementioned entities are regulated in line with Basel III
principles, local implementation of the framework differs across
geographies.
Capital planning is integrated into NatWest Group’s wider
annual budgeting process and is assessed and updated at least
monthly. Regular returns are submitted to the PRA which
include a two-year rolling forecast view. Other elements of
capital management, including risk appetite and stress testing,
are set out on pages 192 and 193.
Produce
capital
plans
Capital plans are produced for NatWest Group, its
key operating entities and its businesses over a
five year planning horizon under expected and
stress conditions. Stressed capital plans are
produced to support internal stress testing in the
ICAAP for regulatory purposes.
Shorter term forecasts are developed frequently
in response to actual performance, changes in
internal and external business environment and
to manage risks and opportunities.
Assess
capital
adequacy
Capital plans are developed to maintain capital of
sufficient quantity and quality to support NatWest
Group’s business, its subsidiaries and strategic
plans over the planning horizon within approved
risk appetite, as determined via stress testing, and
minimum regulatory requirements.
Capital resources and capital requirements are
assessed across a defined planning horizon.
Impact assessment captures input from across
NatWest Group including from businesses.
Inform
capital
actions
Capital planning informs potential capital actions
including buy backs, redemptions, dividends and
new issuance to external investors or via internal
transactions.
Decisions on capital actions will be influenced by
strategic and regulatory requirements, risk
appetite, costs and prevailing market conditions.
As part of capital planning, NatWest Group will
monitor its portfolio of external capital securities
and assess the optimal blend and most cost
effective means of financing.
Capital planning is one of the tools that NatWest Group uses to
monitor and manage capital risk on a going and gone concern
basis, including the risk of excessive leverage.
Liquidity risk management
NatWest Group manages its liquidity risk taking into account
regulatory, legal and other constraints to ensure sufficient
liquidity is available where required to cover liquidity stresses.
The principal levels at which liquidity risk is managed are:
 NatWest Group
 NatWest Holdings Group
 UK DoLSub
 UBIDAC
 NatWest Markets Plc
 NatWest Markets Securities Inc.
 RBS International Limited
 NWM N.V.
The UK DoLSub is PRA regulated and comprises NatWest
Group’s four licensed deposit-taking UK banks: National
Westminster Bank Plc (NWB Plc), The Royal Bank of Scotland
plc (RBS plc), Coutts & Company and Ulster Bank Limited. On 3
May 2021, the Ulster Bank Limited business transferred to
National Westminster Bank Plc. Ulster Bank Limited was
removed from the UK DoLSub effective 1 January 2022. The
planned removal of the Ulster Bank Limited license remains
subject to regulatory applications and approvals.
NatWest Group categorises its liquidity portfolio, including its
locally managed liquidity portfolios, into primary and secondary
liquid assets. The size of the liquidity portfolios are determined
by referencing NatWest Group’s liquidity risk appetite. NatWest
Group retains a prudent approach to setting the composition of
the liquidity portfolios, which is subject to internal policies
applicable to all entities and limits over quality of counterparty,
maturity mix and currency mix.
RBS International Limited, NWM N.V. and UBIDAC hold locally
managed portfolios that comply with local regulations that may
differ from PRA rules.
The liquidity value of the portfolio is determined by taking
current market prices and applying a discount or haircut, to
give a liquidity value that represents the amount of cash that
can be generated by the asset.
Funding risk management
NatWest Group manages funding risk through a comprehensive
framework which measures and monitors the funding risk on
the balance sheet including quantitative and qualitative analysis
of the behavioural aspects of its assets and liabilities as well as
the funding concentration.

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Key points
CET1 ratio (CRR end
-
point)
The CET1 ratio decreased 30 basis points over the period, due to a £2.9 billion
decrease in CET1 and a £13.3 billion decrease in RWAs.
The CET1 decrease of c.£2.9 billion is mainly driven by:
 the directed buy back and associated pension contribution of £1.2 billion;
 the on-market share buy back programmes of £1.5 billion (two £750 million
programmes);
 foreseeable dividends and associated pension contributions of £1.2 billion;
 a £1.1 billion decrease in the IFRS 9 transitional adjustment; and
 other reserve movements.
 These reductions were offset by the £3.0 billion attributable profit in the
period.
Loss
-
absorbing capital
Loss absorbing capital decreased by £1.5 billion to £62.4 billion primarily due to a £2.9
billion decrease in CET1 (explained above), new issuance of £3.2 billion Senior debt,
AT1 issuances of £0.9 billion, and Tier 2 issuances of £1.6 billion. These were offset by
the redemption of a $2.65 billion AT1 instrument and c.£2.0 billion redemption of Tier
2 instruments, foreign exchange movements and Tier 2 regulatory amortisation.
RWA
T
otal RWAs decreased by £13.3 billion or 7.8% to £157.0 billion mainly reflecting:
 a reduction in credit risk RWAs of £9.8 billion due to repayments and expired
facilities in Commercial Banking and additional decreases within Ulster Bank RoI
due to repayments and facility maturities.
 Market risk RWAs decreased by £1.4 billion driven by the transition from LIBOR to
alternative risk-free rates.
 Counterparty credit risk RWAs decreased by £1.2 billion as a result of lower
exposures in NatWest Markets and the strengthening of Sterling against the euro
over the period.
 Operational risk RWAs reduced by £0.9 billion following the annual recalculation in
Q1 2021.
UK leverage
The UK leverage ratio decreased by c.60 basis points driven by a £4.0 billion decrease
in Tier 1 capital.
Liquidity portfolio
The liquidity portfolio increased by £24.1 billion to £286.4 billion, with primary liquidity
increasing by £38.2 billion to £208.6 billion. The increase in primary liquidity is driven
by customer surplus and drawdown from the Term Funding Scheme with additional
incentives for SMEs (TFSME). The reduction in secondary liquidity is due to a
reduction in the pre-positioned collateral at the Bank of England.
Liquidity coverage ratio
The Liquidity Coverage Ratio (LCR)
increased to 172% during the year driven by an
increase in the liquidity portfolio offset by a lower level of increased net outflows. The
increased liquidity portfolio was primarily driven by significant growth in customer
deposits in NatWest Holdings which outstripped growth in customer lending during the
year.
NSFR
The net stable funding ratio (NSFR) was 157% compared to 151% in prior year. The
increase is mainly due to deposits growth.
2021
157%
2021 18.2%
2020 18.5%
2020 165%
2021 172%
2021
£157.0bn
2020 £170.3bn
2020 151%
2020 £63.9bn
2021 £62.4bn
2021 5.8%
2020 6.4%
2020 £262.3bn
2021 £286.4bn

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Minimum requirements
Maximum Distributable Amount (MDA) and Minimum Capital Requirements
NatWest Group is subject to minimum capital requirements relative to RWAs. The table below summarises the minimum capital
requirements (the sum of Pillar 1 and Pillar 2A), and the additional capital buffers which are held in excess of the regulatory
minimum requirements and are usable in stress.
Where the CET1 ratio falls below the sum of the minimum capital and the combined buffer requirement, there is a subsequent
automatic restriction on the amount available to service discretionary payments (including AT1 coupons), known as the MDA. Note
that different capital requirements apply to individual legal entities or sub-groups and the table shown does not reflect any
incremental PRA buffer requirements, which are not disclosable.
The current capital position provides significant headroom above both our minimum requirements and our MDA threshold
requirements.
Type
CET1 Total Tier 1 Total capital
Pillar 1 requirements 4.5% 6.0% 8.0%
Pillar 2A requirements
2.0% 2.7% 3.6%
Minimum Capital Requirements 6.5% 8.7% 11.6%
Capital conservation buffer
2.5% 2.5% 2.5%
Countercyclical capital buffer (1)
—
—
—
MDA threshold (2) 9.0% n/a n/a
Subtotal
9.0% 11.2% 14.1%
Capital ratios at 31 December 2021
18.2% 20.7% 24.1%
Headroom (3)
9.2% 9.5% 10.0%
(1)
In response to COVID
-19, many countries reduced their CCyB rates. In December 2021, the Financial Policy Committee announced an increase in the UK CCyB rate from 0% to 1%.
This rate will come into effect from December 2022 in line with the 12 month implementation period. The CBI continues to mai
ntain the rate at 0% with an announcement of a gradual
increase of the CCyB expected in 2022.
(2)
Pillar 2A requirements for NatWest Group are currently set on a nominal capital basis. From 2022, all firms will be set Pilla
r 2A as a variable amount with the exception of some fixed
add
-ons.
(3)
The headroom does not reflect excess distributable capital
and may vary over time.
Leverage ratios
The table below summarises the minimum ratios of capital to leverage exposure under the binding PRA UK leverage framework
applicable for NatWest Group.
Type
CET1 Total Tier 1
Minimum ratio
2.4375% 3.2500%
Countercyclical leverage ratio buffer
(1)
—
—
Total
2.4375% 3.2500%
(1)
The countercyclical leverage ratio buffer is set at 35% of NatWest Group’s CCyB. As noted above the UK CCyB will increase fro
m 0% to 1% effective from December 2022. Foreign
exposures may be subject to different CCyB rates depending on the rate set in thos
e jurisdictions.
(2)
Following the publication of the new UK leverage framework on 8 October 2021, certain NatWest Group legal entities that are n
ot currently in scope of the minimum leverage ratio
capital requirements will be expected to manage their lev
erage ratio at the same level as firms in scope from 1 January 2022 and will be subject to the minimum requirement from 1
January 2023.
Liquidity and funding ratios
The table below summarises the minimum requirements for key liquidity and funding metrics, under the relevant legislative
framework.
Type
Liquidity coverage ratio (LCR) 100%
Net stable funding ratio (NSFR) (1) —
(1) Net stable funding ratio (NSFR) reported in line with CRR2 regulations finalised in June 2019. Following the publication of PS 22/21 on 14 October 2021, a binding NSFR minimum
requirement of 100% will be effective from January 2022.

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Measurement
Capital, risk-weighted assets and leverage: Key metrics
The table below sets out the key capital and leverage ratios. Refer to Note 26 to the consolidated financial statements for a more
detailed breakdown of regulatory capital.
2021
2020
End-point
PRA transitional End-point
PRA transitional
CRR basis
(1)
basis
CRR basis (1) basis
£m £m
£m £m
CET1 28,596 28,596
31,447 31,447
Tier1 32,471 33,042
36,430 37,260
Total
37,873 38,748
41,685 43,733
RWAs
£m £m
£m £m
Credit risk
120,116 120,116
129,914 129,914
Counterparty credit risk 7,907 7,907
9,104 9,104
Market risk 7,917 7,917
9,362 9,362
Operational risk
21,031 21,031
21,930 21,930
Total RWAs 156,971 156,971
170,310 170,310
Capital adequacy ratios
% %
% %
CET1
18.2 18.2
18.5 18.5
Tier 1
20.7 21.0
21.4 21.9
Total
24.1 24.7
24.5 25.7
Leverage ratios
£m £m
£m £m
Tier 1 capital 32,471 33,042
36,430 37,260
UK Average Tier 1 capital (2) 33,233 33,804
36,397 37,231
UK Average leverage exposure (2) 568,802 568,802
576,906 576,906
UK Average leverage ratio (%)
(2) 5.8% 5.9%
6.3% 6.5%
UK leverage ratio (%) (3) 5.8% 5.9%
6.4% 6.5%
(1) CRR as implemented by the Prudential Regulation Authority in the UK. End-point CRR basis includes an IFRS 9 transitional uplift to capital of £0.6 billion (31 December 2020 - £1.7
billion). Excluding this adjustment, the CET1 ratio would be 17.8% (31 December 2020 – 17.5%). The amended article for the prudential treatment of software assets was
implemented in December 2020. Excluding this adjustment the CET1 ratio at 31 December 2021 would be 18.0% (31 December 2020 – 18.2%).
(2) Based on the daily average of on-balance sheet items and three month-end average of off-balance sheet items.
(3) Presented on CRR end-point Tier 1 capital (including IFRS 9 transitional adjustment). The UK leverage ratio excludes central bank claims from the leverage exposure where deposits
held are denominated in the same currency and of contractual maturity that is equal or longer than that of the central bank claims. Excluding an IFRS 9 transitional adjustment, the
UK leverage ratio would be 5.7% (31 December 2020 – 6.1%). The amended article for the prudential treatment of software assets was implemented in December 2020. Excluding
this adjustment, the UK leverage ratio at 31 December 2021 would be 5.7% (31 December 2020 – 6.3%).
On 1 January 2022 the CET1 ratio was 15.9% including the impact of RWA inflation, 200 basis points, the removal of the software
development cost capital benefit, 20 basis points, and the tapering of IFRS 9 transitional relief of 10 basis points. RWAs increased
by £18.8 billion, including £14.8 billion associated with mortgage risk weight changes.

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Capital flow statement
The table below analyses the movement in CRR CET1, AT1 and Tier 2 capital for the year.
CET1 AT1 Tier 2 Total
£m £m £m £m
At 1 January 2021
31,447 4,983 5,255 41,685
Attributable profit for the period
2,950 2,950
Ordinary interim dividend paid
(348) (348)
Directed buy back and associated dividend linked contribution (1,231) (1,231)
On-market ordinary share buy back programme
(1,500) (1,500)
Foreseeable ordinary dividends
(846) (846)
Foreseeable pension contributions
(365) (365)
Foreign exchange reserve
(403) (403)
FVOCI reserve (91) (91)
Own credit 22 22
Share capital and reserve movements in respect of employee share
schemes
87 87
Goodwill and intangibles deduction
(130) (130)
Deferred tax assets
(1) (1)
Prudential valuation adjustments
12 12
New issues of capital instruments
—
933 1,635 2,568
Redemption of capital instruments 150 (2,041) (1,580) (3,471)
Net dated subordinated debt instruments
—
20 20
Foreign exchange movements
—
15 15
Adjustment under IFRS 9 transitional arrangements
(1,126) (1,126)
Other movements
(31) 57 26
At 31 December 2021
28,596 3,875 5,402 37,873
 The CET1 decrease of c.£2.9 billion is mainly driven by the
directed buy back and associated dividend linked
contribution of £1.2 billion, the on-market share buy back
programmes of £1.5 billion, foreseeable dividends and
associated pension contributions of £1.2 billion, a £1.1 billion
decrease in the IFRS 9 transitional adjustment and other
reserve movements. These reductions were offset by the
£3.0 billion attributable profit in the period.
 At H1 2021, an on-market ordinary share buy back
programme of £750 million was announced resulting in a
foreseeable charge to capital, of which £675 million has
been executed by 31 December 2021. The outstanding £75
million remains as a foreseeable charge together with £750
million recognised in Q4 2021 for an additional on-market
ordinary share buy back programme.
 AT1 reflects the £400 million 4.5% Reset Perpetual
Subordinated Contingent Convertible Notes issued in March
2021 and $750 million 4.600% Reset Perpetual Subordinated
Contingent Convertible notes in June 2021. It also reflects a
$2.7 billion redemption of 8.625% Perpetual Subordinated
Contingent Convertible Additional notes in August 2021.
 The Tier 2 movement is primarily due to the redemption of
own debt of £1.5 billion in March 2021, a £1.0 billion
issuance of subordinated Tier 2 notes in May 2021 and a
€750 million issuance of subordinated Tier 2 notes in
September 2021.

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Risk-weighted assets
The table below analyses the movement in RWAs during the year, by key drivers.
Counterparty
Credit risk
credit risk
Market risk
Operational risk
Total
£bn
£bn
£bn
£bn
£bn
At 1 January 2021 129.9 9.1
9.4
21.9 170.3
Foreign exchange movement (1.1) (0.2)
—
—
(1.3)
Business movements
(4.9) (0.9)
1.5
(0.9) (5.2)
Risk parameter changes (1)
(2.2) (0.1)
—
—
(2.3)
Methodology changes 0.1
—
0.3
—
0.4
Model updates
(0.5)
—
(3.3)
—
(3.8)
Other movements (2) (0.9)
—
—
—
(0.9)
Acquisitions and disposals (3) (0.2)
—
—
—
(0.2)
At 31 December 2021
120.2 7.9
7.9
21.0 157.0
The table below analyses the movement in RWAs by segment during the year.
Go
-
forward group
Total
Central
excluding
Retail
Private
Commercial
RBS
NatWest
items
Ulster
Ulster
Banking
Banking
Banking
International
Markets
& other
Bank RoI
Bank RoI
Total
Total RWAs
£bn £bn £bn £bn £bn
£bn
£bn £bn £bn
At 1 January 2021 36.7 10.9 75.1 7.5 26.9
1.4
158.5 11.8 170.3
Foreign exchange movement
—
—
(0.3)
—
(0.4)
—
(0.7) (0.6) (1.3)
Business movements
0.4 0.4 (6.0) 0.1 0.8
0.4
(3.9) (1.3) (5.2)
Risk parameter changes (1) (0.4)
—
(1.2) (0.1) —
—
(1.7) (0.6) (2.3)
Methodology changes
—
—
0.1
—
0.3
—
0.4
—
0.4
Model updates
—
—
(0.5)
—
(3.3)
—
(3.8)
—
(3.8)
Other movements (2)
—
—
(0.8)
—
(0.1)
—
(0.9)
—
(0.9)
Acquisitions and disposals (3)
—
—
—
—
—
—
— (0.2) (0.2)
At 31 December 2021
36.7 11.3 66.4 7.5 24.2
1.8
147.9 9.1 157.0
Credit risk 29.4 9.9 58.0 6.5 6.4
1.8
112.0 8.2 120.2
Counterparty credit risk
0.2 0.1 0.3
—
7.3
—
7.9
—
7.9
Market risk 0.1
—
0.1
—
7.7
—
7.9
—
7.9
Operational risk
7.0 1.3 8.0 1.0 2.8
—
20.1 0.9 21.0
Total RWAs 36.7 11.3 66.4 7.5 24.2
1.8
147.9 9.1 157.0
(1) Risk parameter changes relate to changes in credit quality metrics of customers and counterparties (such as probability of default and loss given default) as well as internal ratings
based model changes relating to counterparty credit risk.
(2) The movements in other include the following:
(a) RWA benefit of £0.8 billion as a result of the CRR COVID-19 amendment for Infrastructure Supporting Factor.
(b) Asset transfers from NatWest Markets to Commercial.
(3) The movement in acquisitions & disposals reflected a portfolio sale of non-performing loans in Ulster Bank RoI.
Total RWAs decreased to £157.0 billion during the period due to
the following:
 Credit risk RWAs decreased by £9.8 billion due to
repayments and expired facilities in Commercial Banking
and additional decreases within Ulster Bank RoI due to
repayments and facility maturities. Operational risk RWAs
decreased by £0.9 billion following the annual recalculation
in Q1 2021.
 Counterparty credit risk RWAs reduced by £1.2 billion,
mainly reflecting reduced IMM exposures in NatWest
Markets.
 Market risk RWAs decreased by £1.4 billion primarily driven
by a decrease in modelled market risk reflecting a reduction
in tenor basis risk in sterling flow rates, related to the
transition from LIBOR to alternative risk-free rates.

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Leverage exposure
2021
2020
£m
£m
Cash and balances at central banks
177,757
124,489
Trading assets
59,158
68,990
Derivatives 106,139
166,523
Financial assets
412,817
422,647
Other assets
17,106
16,842
Assets of disposal groups
9,015
—
Total assets
781,992
799,491
Derivatives
- netting and variation margin
(110,204)
(172,658)
-
potential future exposures
35,035
38,171
Securities financing transactions gross up 1,397
1,179
Undrawn commitments (1) 44,240
45,853
Regulatory deductions and other adjustments
(8,980)
(8,943)
Claims on central banks (174,148)
(122,252)
Exclusion of bounce back loans
(7,474)
(8,283)
UK leverage exposure
(2) 561,858
572,558
(1) Leverage exposure includes a commitment treated as external for the purposes of the regulatory consolidation, which is treated as internal within the weighted undrawn
commitments table below.
(2) The UK leverage ratio excludes central bank claims from the leverage exposure where deposits held are denominated in the same currency and of contractual maturity that is equal
or longer than that of the central bank claims.
Liquidity key metrics
The table below sets out the key liquidity and related metrics monitored by NatWest Group.
2021
2020
NatWest Group
UK DoLSub
NatWest Group
UK DoLSub
Liquidity coverage ratio (1) 172% 169%
165% 152%
Stressed outflow coverage (2) 194% 195%
183% 168%
Net stable funding ratio (3) 157% 151%
151% 144%
(1) The published LCR excludes Pillar 2 add-ons. NatWest Group calculates the LCR using its own interpretations of the EU LCR Delegated Act, which may change over time and may
not be fully comparable with those of other financial institutions.
(2) NatWest Group’s stressed outflow coverage (SOC) is an internal measure calculated by reference to liquid assets as a percentage of net stressed contractual and behavioural
outflows over three months under the worst of three severe stress scenarios of a market-wide stress, an idiosyncratic stress and a combination of both as per ILAAP. This
assessment is performed in accordance with PRA guidance.
(3) Following the publication of PS 22/21 on 14 October 2021, a binding NSFR minimum requirement of 100% will be effective from January 2022.
Weighted undrawn commitments
The table below provides a breakdown of weighted undrawn commitments.
2021
2020
£bn
£bn
Unconditionally cancellable credit cards
1.8
1.8
Other unconditionally cancellable items
3.1
3.2
Unconditionally cancellable items (1) 4.9
5.0
Undrawn commitments <1 year which may not be cancelled 1.7
1.9
Other off-balance sheet items with 20% credit conversion factor (CCF) 0.3
0.4
Items with a 20% CCF 2.0
2.3
Revolving credit risk facilities
27.5
28.4
Term loans
3.3
3.6
Mortgages
—
—
Other undrawn commitments >1 year which may not be cancelled & off-balance sheet 1.1
1.2
Items with a 50% CCF
31.9
33.2
Items with a 100% CCF
5.3
5.4
Total
44.1
45.9
(1) Based on a 10% CCF.

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Loss-absorbing capital
The following table illustrates the components of estimated loss-absorbing capital (LAC) in NatWest Group plc and operating
subsidiaries and includes external issuances only. The table is prepared on a transitional basis, including the benefit of regulatory
capital instruments issued from operating companies, to the extent they meet MREL criteria.
The roll-off profile relating to senior debt and subordinated debt instruments is set out on page 259.
2021
2020
Balance
Balance
Par
sheet
Regulatory
LAC
Par sheet
Regulatory
LAC
value (1)
value
value (2)
value (3)
value
value
value
value
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
CET1 capital (4)
28.6
28.6 28.6 28.6
31.4 31.4
31.4
31.4
Tier 1 capital: end-point CRR compliant AT1
of which: NatWest Group plc (holdco)
3.9
3.9 3.9 3.9
5.0 5.0
5.0
5.0
of which: NatWest Group plc operating
operating subsidiaries (opcos)
—
— — — — —
—
—
3.9
3.9 3.9 3.9
5.0 5.0
5.0
5.0
Tier 1 capital: end-point CRR non compliant
of which: holdco
0.6
0.6 0.5 0.5
0.7 0.7
0.7
0.5
of which: opcos
0.1
0.1
—
—
0.1 0.1
0.1
0.1
0.7
0.7 0.5 0.5
0.8 0.8
0.8
0.6
Tier 2 capital: end-point CRR compliant
of which: holdco
7.1
7.1 4.9 6.0
6.9 7.2
4.8
5.7
of which: opcos
0.3
0.3
—
—
0.4 0.4
0.1
0.1
7.4
7.4 4.9 6.0
7.3 7.6
4.9
5.8
Tier 2 capital: end-point CRR non compliant
of which: holdco
—
—
—
—
0.1 0.1
0.1
0.1
of which: opcos
0.6
0.9 0.3 0.1
1.6 1.9
1.1
1.0
0.6
0.9 0.3 0.1
1.7 2.0
1.2
1.1
Senior unsecured debt securities
of which: holdco
22.8
23.4
—
22.8
19.6 20.9
—
19.6
of which: opcos
22.7
22.6
—
—
20.9 21.5
—
—
45.5
46.0
—
22.8
40.5 42.4
—
19.6
Tier 2 capital
Other regulatory adjustments
—
—
0.5 0.5
— —
0.4
0.4
—
—
0.5 0.5
— —
0.4
0.4
Total
86.7
87.5 38.7 62.4
86.7 89.2
43.7
63.9
RWAs
157.0
170.3
UK leverage exposure
561.9
572.6
LAC as a ratio of RWAs
39.8%
37.5%
LAC as a ratio of UK leverage exposure
11.1%
11.2%
(1) Par value reflects the nominal value of securities issued.
(2) Regulatory capital instruments issued from operating companies are included in the transitional LAC calculation; to the extent they meet the current MREL criteria.
(3) LAC value reflects NatWest Group’s interpretation of the Bank of England’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL), published in
June 2018. MREL policy and requirements remain subject to further potential development, as such NatWest Group’s estimated position remains subject to potential change.
Liabilities excluded from LAC include instruments with less than one year remaining to maturity, structured debt, operating company senior debt, and other instruments that do not
meet the MREL criteria. The LAC calculation includes Tier 1 and Tier 2 securities before the application of any regulatory caps or adjustments.
(4) Corresponding shareholders’ equity was £41.8 billion (2020 - £43.9 billion).
(5) Regulatory amounts reported for AT1, Tier 1 and Tier 2 instruments are before grandfathering restrictions imposed by CRR.

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Loss-absorbing capital
The following table illustrates the components of the stock of outstanding issuance in NatWest Group and its operating subsidiaries
including external and Internal issuances .
NatWest
NatWest
NWM
RBS
NatWest
Holdings Markets Securities
International
Group plc
Limited NWB Plc RBS plc UBIDAC NWM Plc N.V. Inc.
Limited
£bn £bn £bn £bn £bn £bn £bn £bn
£bn
Tier 1 (inclusive of AT1) Externally issued
4.5
—
0.1
—
—
—
—
—
—
Tier 1 (inclusive of AT1)
Internally issued
—
3.7 2.4 1.0
—
0.9 0.2
—
0.3
4.5
3.7
2.5
1.0
—
0.9
0.2
—
0.3
Tier 2 Externally issued
7.1
—
0.1
—
0.1 0.4 0.5
—
—
Tier 2
Internally issued
—
4.6 3.1 1.4 0.4 1.5 0.1 0.3
—
7.1
4.6
3.2
1.4
0.5
1.9
0.6
0.3
—
Senior unsecured
Externally issued
23.4
—
—
—
—
—
—
—
—
Senior unsecured Internally issued
—
11.3 5.7 0.4 0.5 3.9
—
—
—
23.4
11.3
5.7
0.4
0.5
3.9
—
—
—
Total outstanding issuance
35.0 19.6 11.4 2.8 1.0 6.7 0.8 0.3
0.3
(1) The balances are the IFRS balance sheet carrying amounts, which may differ from the amount which the instrument contributes to regulatory capital. Regulatory balances exclude,
for example, issuance costs and fair value movements, while dated capital is required to be amortised on a straight-line basis over the final five years of maturity.
(2) Balance sheet amounts reported for AT1, Tier 1 and Tier 2 instruments are before grandfathering restrictions imposed by CRR.
(3) Internal issuance for NWB Plc, RBS plc and UBIDAC represents AT1, Tier 2 or Senior unsecured issuance to NatWest Holdings Limited and for NWM N.V. and NWM SI to NWM Plc.
(4) Senior unsecured debt does not include CP, CD and short term/medium term notes issued from NatWest Group operating subsidiaries.
(5) Tier 1 (inclusive of AT1) does not include CET1 numbers.

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Roll-off profile
The following table illustrates the roll-off profile and weighted average spreads of NatWest Group’s major wholesale funding
programmes.
As at and
for year ended
Roll
-
off profile
Senior debt roll-off profile (1)
31 December 2021
H1 2022
H2 2022 2023
2024
2025 & 2026
2027 & later
NatWest Group plc
- amount (£m) 23,424
—
7 6,814
1,956
6,086 8,561
- weighted average rate spread (bps)
181
—
224 224
164
178 153
NWM Plc
- amount (£m) 17,360
3,978
2,959 2,359
2,909
4,469 686
- weighted average rate spread (bps)
77
38
58 107
88
92 133
NatWest Bank Plc
- amount (£m) 3,399
3,248
151
—
—
—
—
- weighted average rate spread (bps)
1
1
(2)
—
—
—
—
NWM N.V.
- amount (£m) 1,109
576
533
—
—
—
—
- weighted average rate spread (bps)
13
15
11
—
—
—
—
NWM S.I.
- amount (£m) 225
—
4
—
81
75 65
- weighted average rate spread (bps)
130
—
64
—
98
137 168
RBSI
- amount (£m) 460
383
77
—
—
—
—
- weighted average rate spread (bps)
89
84
103
—
—
—
—
Securitisation
- amount (£m) 867
—
—
—
—
289 578
- weighted average rate spread (bps)
5
—
—
—
—
10 3
Covered bonds
- amount (£m) 2,887
—
—
751
2,136
—
—
- weighted average rate spread (bps) 129
—
—
44
160
—
—
Total notes issued
-
amount (£m)
49,731
8,185
3,731 9,924
7,082
10,919 9,890
Weighted average rate spread (bps) 121
24
51 182
130
137 143
Subordinated debt instruments roll-off
profile (2)
NatWest Group plc (£m)
7,094
—
981 1,429
1,525
1,953 1,206
NWM Plc (£m)
417
275
—
119
—
21 2
NatWest Bank Plc (£m) 87
—
87
—
—
—
—
NWM N.V. (£m) 548
—
—
104
—
—
444
UBIDAC (£m)
73
—
—
—
—
—
73
Total (£m) 8,219
275
1,068 1,652
1,525
1,974 1,725
(1) Based on final contractual instrument maturity.
(2) Based on first call date of instrument, however this does not indicate NatWest Group’s strategy on capital and funding management. The table above does not include debt
accounted Tier 1 instruments although those instruments form part of the total subordinated debt balance.
(3) The weighted average spread reflects the average net funding cost to NatWest Group and is calculated on an indicative basis.
(4) The roll-off table is based on sterling-equivalent balance sheet values.

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Liquidity portfolio (audited)
The table below shows the liquidity portfolio by product, with primary liquidity aligned to internal stressed outflow coverage and
regulatory LCR categorisation. Secondary liquidity comprises assets eligible for discount at central banks, which do not form part
of the liquid asset portfolio for LCR or stressed outflow purposes.
Liquidity value
2021
2020
NatWest
Group
(1)
NWH
Group
(2)
UK DoL
Sub
(3)
NatWest
Group
NWH
Group
UK DoL
Sub
£m
£m
£m
£m
£m
£m
Cash and balances at central banks (4) 174,328
140,562
136,154
115,820
86,575
86,575
AAA to AA- rated governments 31,073
21,710
21,123
50,901
37,086
35,875
A+ and lower rated governments 25
—
—
79
—
—
Government guaranteed issuers, public sector entities and
government sponsored entities
307
295
174
272
272
141
International organisations and multilateral development
banks 2,720
1,807
1,466
3,140
2,579
2,154
LCR level 1 bonds 34,125
23,812
22,763
54,392
39,937
38,170
LCR level 1 assets 208,453
164,374
158,917
170,212
126,512
124,745
LCR level 2 assets 117
—
—
124
—
—
Non-LCR eligible assets
—
—
—
—
—
—
Primary liquidity
208,570
164,374
158,917
170,336
126,512
124,745
Secondary liquidity (5) 77,849
77,660
76,573
91,985
91,761
88,774
Total liquidity value
286,419
242,034
235,490
262,321
218,273
213,519
(1) NatWest Group includes the UK Domestic Liquidity Sub-Group (UK DoLSub), NatWest Markets Plc and other significant operating subsidiaries that hold liquidity portfolios. These
include The Royal Bank of Scotland International Limited, NWM N.V. and Ulster Bank Ireland DAC who hold managed portfolios that comply with local regulations that may differ
from PRA rules.
(2) NWH Group comprises UK DoLSub and Ulster Bank Ireland DAC who hold managed portfolios that comply with local regulations that may differ from PRA rules.
(3) UK DoLSub comprises NatWest Group’s four licensed deposit-taking UK banks within the ring-fenced bank: NWB Plc, RBS plc, Coutts & Company and Ulster Bank Limited. Ulster
Bank Limited was removed from the UK DoLSub effective 1 January 2022.
(4) Following a change in methodology in our internal stressed outflow coverage metric, cash placed at Central Bank of Ireland within UBIDAC is now reported in the liquidity portfolio.
(5) Comprises assets eligible for discounting at the Bank of England and other central banks.
(6) NatWest Markets Plc liquidity portfolio is reported in the NatWest Markets Plc Annual Report and Accounts.

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Funding sources (audited)
The table below shows the carrying values of the principal funding sources based on contractual maturity. Balance sheet captions
include balances held at all classifications under IFRS 9.
2021
2020
Short-term Long-term
Short-term Long-term
less than more than
less than more than
1 year
1 year
Total
1 year
1 year
Total
£m £m £m
£m £m £m
Bank Deposits
Repos
7,912
—
7,912
6,470 — 6,470
Other bank deposits (1) 5,803 12,564 18,367
5,845 8,291 14,136
13,715 12,564 26,279
12,315 8,291 20,606
Customer Deposits
Repos
14,541
—
14,541
5,167 — 5,167
Non-bank financial institutions
57,885 67 57,952
53,475 147 53,622
Personal
230,525 829 231,354
208,046 1,183 209,229
Corporate 175,850 113 175,963
163,595 126 163,721
478,801 1,009 479,810
430,283 1,456 431,739
Trading liabilities (2)
Repos (3) 19,389
—
19,389
19,036 — 19,036
Derivatives collateral
17,718
—
17,718
23,229 — 23,229
Other bank and customer deposits
849 704 1,553
819 985 1,804
Debt securities in issue
-
medium term notes
178 796 974
527 881 1,408
38,134
1,500
39,634
43,611
1,866
45,477
Other financial liabilities
Customer deposits
568
—
568
616 180 796
Debt securities in issue:
Commercial paper and certificates of deposit
9,038 115 9,153
7,086 168 7,254
Medium term notes
6,401 29,451 35,852
4,648 29,078 33,726
Covered bonds
53 2,833 2,886
53 2,967 3,020
Securitisation
—
867 867
— 1,015 1,015
16,060 33,266 49,326
12,403 33,408 45,811
Subordinated liabilities
1,375 7,054 8,429
365 9,597 9,962
Total funding
548,085 55,393 603,478
498,977 54,618 553,595
Of which: available in resolution (4)
29,624
28,823
(1) Includes £12.0 billion (2020 – £5.0 billion) relating to Term Funding Scheme with additional incentives for Small and Medium-sized Enterprises participation and nil (2020 – £2.8
billion) relating to NatWest Group’s participation in central bank financing operations under the European Central Bank’s targeted long-term financing operations.
(2) Excludes short positions of £25.0 billion (2020 – £26.8 billion).
(3) Comprises central & other bank repos of £0.8 billion (2020 – £1.0 billion), other financial institution repos of £17.0 billion (2020 – £16.0 billion) and other corporate repos of £1.6
billion (2020 – £2.0 billion).
(4) Eligible liabilities (as defined in the Banking Act 2009 as amended from time to time) that meet the eligibility criteria set out in the regulations, rules, policies, guidelines, or
statements of the Bank of England including the Statement of Policy published by the Bank of England in June 2018. The balance consists of £23.4 billion (2020 – £20.9 billion) under
debt securities in issue (senior MREL) and £6.2 billion (2020 – £7.9 billion) under subordinated liabilities.

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Contractual maturity (audited)
This table shows the residual maturity of financial instruments, based on contractual date of maturity of NatWest Group’s banking
activities, including hedging derivatives. Trading activities, comprising mandatory fair value through profit or loss (MFVTPL) assets
and held-for-trading (HFT) liabilities have been excluded from the maturity analysis due to their short-term nature and are shown
in total in the table below.
Banking activities
Less than 1 1-3 3-6 6 months 3-5 More than Trading
month months months -
1 year
Subtotal 1-3 years years 5 years Total activities Total
2021
£m £m £m £m £m £m £m £m £m £m £m
Cash and balances
177,757
— — —
177,757
— — —
177,757
—
177,757
at central banks
Trading assets
— — — — — — — — —
59,158 59,158
Derivatives
4 8 5 13 30 10 2 2 44
106,095
106,139
Settlement balances
2,141
— — —
2,141
— — —
2,141
—
2,141
Loans to banks -
amortised cost
5,584 220 1,615 6 7,425 20
—
237 7,682
—
7,682
Loans to customers
-
amortised cost (1)
45,553 23,071 16,517 22,238 107,379 53,767 36,481 165,053 362,680
—
362,680
Personal
4,565 2,416 3,386 6,443 16,810 23,446 21,437 145,453 207,146
—
207,146
Corporate
28,527 10,116 5,106 7,218 50,967 23,881 13,876 18,853 107,577
—
107,577
Non-bank financial
institutions
12,461 10,539 8,025 8,577 39,602 6,440 1,168 747 47,957
—
47,957
Other financial assets
2,502 1,705 1,573 5,439 11,219 9,251 7,558 17,800 45,828 317 46,145
Total financial assets
233,541 25,004 19,710 27,696 305,951 63,048 44,041 183,092 596,132 165,570 761,702
2020
Total financial assets
167,371 20,237 21,478 26,907 235,993 74,266 52,380 192,431 555,070 235,860 790,930
2021
Bank deposits
excluding repos
4,930 454 285 134 5,803 564 12,000
—
18,367
—
18,367
Bank repos
6,251 1,661
— —
7,912
— — —
7,912
—
7,912
Customer repos
3,532 11,009
— —
14,541
— — —
14,541
—
14,541
Customer deposits
excluding repos
445,811 12,944 3,200 2,305 464,260 918 69 22 465,269
—
465,269
Personal
225,623 1,664 1,822 1,416 230,525 829
— —
231,354
—
231,354
Corporate
168,090 5,908 1,160 692 175,850 36 55 22 175,963
—
175,963
Non
-
bank financial
institutions
52,098 5,372 218 197 57,885 53 14
—
57,952
—
57,952
Settlement balances
2,068
— — —
2,068
— — —
2,068
—
2,068
Trading liabilities
— — — — — — — — —
64,598 64,598
Derivatives
1 1 1 10 13 92 20 (5) 120
100,715
100,835
Other financial liabilities
1,602 5,547 5,020 3,891 16,060 15,840 9,533 7,893 49,326
—
49,326
CPs and CDs
1,523 2,864 2,266 2,385 9,038 105 10
—
9,153
—
9,153
Medium term notes
28 2,683 2,352 1,338 6,401 12,902 9,234 7,315 35,852
—
35,852
Covered bonds
50
—
3
—
53 2,833
— —
2,886
—
2,886
Securitisations
— — — — — —
289 578 867
—
867
Customer deposits DFV
1
—
399 168 568
— — —
568
—
568
Subordinated liabilities
—
37 272 1,066 1,375 3,165 1,959 1,930 8,429
—
8,429
Notes in circulation 3,047
— — —
3,047
— — —
3,047
—
3,047
Lease liabilities
26 49 72 91 238 220 165 640 1,263
—
1,263
Total financial liabilities
467,268 31,702 8,850 7,497 515,317 20,799 23,746 10,480 570,342 165,313 735,655
2020
Total financial liabilities
428,632 17,297 10,730 7,106 463,765 23,319 19,708 11,354 518,146 232,831 750,977
(1)
Loans to customers excludes £3.7 billion (2020
–
£6.0 billion) of impairment provisions.

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Senior notes and subordinated liabilities - residual maturity profile by instrument type (audited)
The table below shows NatWest Group’s debt securities in issue and subordinated liabilities by residual maturity.
Trading
liabilities
Other financial liabilities
Debt securities in issue
Debt securities
Commercial
in issue
paper
Covered
Subordinated
Total notes
MTNs
and CDs
MTNs
bonds
Securitisation
liabilities
Total
in issue
2021
£m £m £m £m £m £m £m £m
Less than 1 year 178 9,038
6,401
53
—
1,375
16,867
17,045
1-3 years
335 105
12,902
2,833 — 3,165
19,005
19,340
3-5 years
112 10
9,234
— 289 1,959
11,492
11,604
More than 5 years
349 —
7,315
— 578 1,930
9,823
10,172
Total
974 9,153
35,852
2,886 867 8,429
57,187
58,161
2020
Less than 1 year
527 7,086
4,648
53 — 365
12,152
12,679
1-3 years
169 165
13,349
749 — 3,854
18,117
18,286
3-5 years
240 3
8,538
2,218 296 3,349
14,404
14,644
More than 5 years
472
—
7,191
—
719 2,394
10,304
10,776
Total
1,408 7,254
33,726
3,020 1,015 9,962
54,977
56,385
The table below shows the currency breakdown.
GBP
USD
EUR
Other
Total
2021 £m £m £m £m £m
Commercial paper and CDs
2,692 2,743 3,718
—
9,153
MTNs 2,471 19,032 13,718
1,605
36,826
Covered bonds 1,820
—
1,066
—
2,886
Securitisation
867 — — —
867
Subordinated liabilities
2,234 4,825 1,370 —
8,429
Total
10,084 26,600 19,872
1,605
58,161
2020 total
8,933 25,051 19,917
2,484
56,385

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Capital, liquidity and funding risk continued
Funding gap: maturity and segment analysis
The contractual maturity of balance sheet assets and liabilities reflects the maturity transformation role banks perform, lending
long-term but mainly obtaining funding through short-term liabilities such as customer deposits. In practice, the behavioural profiles
of many liabilities show greater stability and longer maturity than the contractual maturity. This is particularly true of many types
of retail and corporate deposits which, despite being repayable on demand or at short notice, have demonstrated very stable
characteristics even in periods of acute stress.
In its analysis to assess and manage asset and liability maturity gaps, NatWest Group determines the expected customer behaviour
through qualitative and quantitative techniques. These incorporate observed customer behaviours over long periods of time. This
analysis is subject to governance through NatWest Group ALCo Technical committee down to a segment level. The net behavioural
funding surplus/(gap) and contractual maturity analysis is set out below.
Contractual maturity Behavioural maturity
Loans to customers Customer accounts Net surplus/(gap) Net surplus/(gap)
Less
than
1 year
1-
5
years
Greater
than 5
years Total
Less
than 1
year
1-
5
years
Greater
than 5
years Total
Less
than 1
year
1-5 years
Greater
than 5
years Total
Less
than 1
year
1-
5
years
Greater
than 5
years Total
2021
£bn
£bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn
Retail Banking
12
39 131 182
188
1
—
189
176
(38) (131) 7
(7) 18 (4) 7
Private Banking
3
6 9 18
39
—
—
39
36
(6) (9) 21
(1) 9 13 21
Commercial Banking
50
33 18 101
178
—
—
178
128
(33) (18) 77
4 79 (6) 77
RBS International
7
6 3 16
38
—
—
38
31
(6) (3) 22
5 6 11 22
NatWest Markets
12
4 1 17
13
1
—
14
1
(3) (1) (3)
1 (4)
—
(3)
Central items & other
2
—
—
2
1
—
—
1
(1)
—
—
(1)
(1)
—
—
(1)
Total excluding
Ulster Bank RoI
86
88 162 336
457
2
—
459
371
(86) (162) 123
1 108 14 123
Ulster Bank RoI
1
2 4 7
18
—
—
18
17
(2) (4) 11
10 1
—
11
Total
87
90 166 343
475
2
—
477
388
(88) (166) 134
11 109 14 134
2020
£bn
£bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn
Total
75
104 169 348
438
2 — 440
363
(102) (169) 92 22 58 12 92
(1) Loans to customers and customer accounts include trading assets and trading liabilities respectively and excludes reverse repos and repos.
 The net customer funding surplus has increased by £42
billion during 2021 to £134 billion driven by a £37 billion
growth in deposits and a £5 billion decline in loans to
customers.
 Customer deposits and loans to customers are broadly
matched from a behavioural perspective.
 The net funding surplus in 2021 is mainly concentrated in
the longer dated buckets, reflecting stable characteristics of
customer deposits.

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NatWest Group Annual Report and Accounts 2021 265
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Capital, liquidity and funding risk continued
Encumbrance (audited)
NatWest Group evaluates the extent to which assets can be
financed in a secured form (encumbrance), but certain asset
types lend themselves more readily to encumbrance. The typical
characteristics that support encumbrance are an ability to
pledge those assets to another counterparty or entity through
operation of law without necessarily requiring prior notification,
homogeneity, predictable and measurable cash flows, and a
consistent and uniform underwriting and collection process.
Retail assets including residential mortgages, credit card
receivables and personal loans display many of these features.
NatWest Group categorises its assets into four broad groups,
those that are:
 Already encumbered and used to support funding currently
in place through own-asset securitisations, covered bonds
and securities repurchase agreements.
 Pre-positioned with central banks as part of funding
schemes and those encumbered under such schemes.
 Ring-fenced to meet regulatory requirements, where
NatWest Group has in place an operational continuity in
resolution (OCIR) investment mandate wherein the PRA
requires critical service providers to hold segregated liquidity
buffers covering at least 50% of their annual fixed
overheads.
 Not currently encumbered. In this category, NatWest Group
has in place an enablement programme which seeks to
identify assets capable of being encumbered and to identify
the actions to facilitate such encumbrance whilst not
affecting customer relationships or servicing.
Programmes to manage the use of assets to actively support
funding are established within UK DoLSub, UBIDAC and
NatWest Markets Plc.
Balance sheet encumbrance
The table shows the retained encumbrance assets of NatWest Group.
Encumbered as a result of
transactions with Unencumbered assets not
counterparties Collateral pre-positioned
other than central banks Pre-positioned ring-fenced with central banks
Covered SFT, & encumbered to meet
debts &
derivatives assets held
regulatory
Readily
Other
Cannot
securitisa-
and similar
Total at central requirement available available be used
tions (1) (2,3) (4) banks (5) (6) (7) (8) (9)
Total
Total (10)
2021 £bn £bn £bn £bn £bn £bn £bn £bn
£bn
£bn
Cash and balances at central
banks
- 5.1 5.1 - - 172.7 - -
172.7
177.8
Trading assets
- 36.7 36.7 - - 0.8 0.9 20.8
22.5
59.2
Derivatives
- - - - - - - 106.1
106.1
106.1
Settlement balances
- - - - - - - 2.1
2.1
2.1
Loans to banks
-
amortised cost
- 0.1 0.1 - - 6.7 0.6 0.3
7.6
7.7
Loans to customers - amortised
cost
11.8 1.8 13.6 122.4 - 58.1 116.5 48.4
223.0
359.0
- residential mortagages
- UK
8.3 - 8.3 119.7 - 44.4 14.2 -
58.6
186.6
- Rol
1.2 - 1.2 2.7 - 2.0 - -
2.0
5.9
-
credit cards
- - - - - 3.5 0.4 -
3.9
3.9
- personal loans
- - - - - 5.1 2.4 1.4
8.9
8.9
- other
2.3 1.8 4.1 - - 3.1 99.5 47.0
149.6
153.7
Other financial assets
- 15.4 15.4 - 2.0 27.7 0.4 0.6
28.7
46.1
Intangible assets
- - - - - - - 6.7
6.7
6.7
Other assets
- - - - - - 1.9 6.4
8.3
8.3
Assets of disposal groups
0.1 - 0.1 3.8 - 1.9 3.2 -
5.1
9.0
Total assets
11.9 59.1 71.0 126.2 2.0 267.9 123.5 191.4
582.8
782.0
2020
Total assets
14.8 70.8 85.6 134.0 2.2 203.7 123.1 250.9
577.7
799.5
(1)
Covered debts and securitisations include securitisations, conduits, covered bonds and secured notes.
(2)
Repos and other secured deposits, cash, coin and nostro balance held with the Bank of England as collateral against deposits
and notes in circulation are included here rather than
within those positioned at the central bank as they are part of normal banki
ng operations. Securities financing transactions (SFT) include collateral given to secure derivative liabilities.
(3)
Derivative cash collateral of £12.0 billion (2020
-
£18.8 billion) has been included in the encumbered assets basis the regulatory requir
ement.
(4)
Total assets encumbered as a result of transactions with counterparties other than central banks are those that have been ple
dged to provide security and are therefore not available
to secure funding or to meet other collateral needs.
(5)
Assets pre
-
positioned at the central banks include loans provided as security as part of funding schemes and those encumbered under such
schemes.
(6)
Ring
-
fenced to meet regulatory requirement includes assets ring fenced to meet operational continuity in
resolution (OCIR) investment mandate.
(7)
Readily available for encumbrance: including assets that have been enabled for use with central banks but not pre
-
positioned; cash and high quality debt securities that form part of
NatWest Group’s liquidity por
tfolio and unencumbered debt securities.
(8)
Other assets that are capable of being encumbered are those assets on the balance sheet that are available for funding and co
llateral purposes but are not readily realisable in their
current form. These assets include loans that could be pre
-positioned with central banks but have not been subject to internal and external documentation review and diligence work.
(9)
Cannot be used includes:
(a)
Derivatives, reverse repurchase agreements and trading related settlement balances.
(b)
Non
-
financial assets such as intangibles, prepayments and deferred tax.
(c)
Loans that cannot be pre
-
positioned with central banks based on criteria set by the central banks, including those relating to date of origination and
level of documentation.
(d)
Non
-
recourse invoice financing balances and certain shipping loans
whose terms and structure prohibit their use as collateral.
(10)
In accordance with market practice, NatWest Group employs securities recognised on the balance sheet, and securities received
under reverse repo transactions as collateral for repos.

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Market risk (audited)
NatWest Group is exposed to non-traded market risk through
its banking activities and to traded market risk through its
trading activities. Non-traded and traded market risk exposures
are managed and discussed separately. The non-traded market
risk section begins below. The traded market risk section
begins on page 274. Pension-related activities also give rise to
market risk. Refer to page 278 for more information on risk
related to pensions.
Non-traded market risk
Definition (audited)
Non-traded market risk is the risk to the value of assets or
liabilities outside the trading book, or the risk to income, that
arises from changes in market prices such as interest rates,
foreign exchange rates and equity prices, or from changes in
managed rates.
Sources of risk (audited)
The key sources of non-traded market risk are interest rate
risk, credit spread risk, foreign exchange risk, equity risk and
accounting volatility risk.
For detailed qualitative and quantitative information on each of
these risk types, refer to the separate sub-sections following
the VaR table below.
Key developments in 2021
 As inflationary pressures increased in 2021, market
expectations regarding the future path of interest rates
changed. The five-year sterling overnight index interest rate
swap rate rose from -0.01% at 31 December 2020 to 1.05%
at 31 December 2021. The corresponding ten-year rate
rose from 0.16% to 0.95%. At 31 December 2021 market
rates implied several increases in the UK base rate from
0.25%; at 31 December 2020 they had implied potential cuts
to the rate from 0.1%.
 The sensitivity of net interest earnings to a 25 basis point
upward shift in the market-implied yield curve was a
cumulative £1,183 million over three years at 31 December
2021, down from £1,455 million at 31 December 2020. The
decrease partly reflected the higher impact of central bank
policy rates in the market-implied curve at 31 December
2021.
 NatWest Group’s structural hedge of equity and deposits
provides some protection against volatility in interest rates.
Notably, the product structural hedge notional, which
captures deposits in the Retail and Commercial Banking
franchises, increased from £169 billion at 31 December
2020 to £206 billion at 31 December 2021 as more balances
were included in the hedging programme. This increase
mainly reflected the significant growth in customer deposits
during the pandemic.
 Although swap rates began to rise in H2 2021, the yield on
the structural hedge fell from 1.06% to 0.75%. This mainly
resulted from maturing of swaps and increased hedging.
Increased volumes are initially hedged at shorter dates to
ensure an evenly amortising risk profile. The reduction in
fixed yield also, in part, reflects the transition from LIBOR to
the SONIA benchmark. New hedges are indexed against
SONIA, which is a risk-free benchmark and therefore has a
lower outright coupon.
 Sterling strengthened against the euro, to 1.19 at 31
December 2021 compared to 1.11 at 31 December 2020. It
weakened slightly against the US dollar, to 1.35 at 31
December 2021 compared to 1.37 at 31 December 2020.
Structural foreign currency exposures decreased, in sterling
equivalent terms, over the year, mainly driven by increased
hedging of NatWest Holdings’ investment in UBIDAC.
Governance (audited)
Responsibility for identifying, measuring, monitoring and
controlling market risk arising from non-trading activities lies
with the relevant business. Oversight is provided by the
independent Risk function.
Risk positions are reported regularly to the Executive Risk
Committee and the Board Risk Committee, as well as to the
Asset & Liability Management Committee. Non-traded market
risk policy sets out the governance and risk management
framework.
Risk appetite
NatWest Group’s qualitative appetite is set out in the non-
traded market risk appetite statement.
Its quantitative appetite is expressed in terms of value-at-risk
(VaR), stressed value-at-risk (SVaR), sensitivity and stress limits,
and earnings-at-risk limits.
The limits are reviewed to reflect changes in risk appetite,
business plans, portfolio composition and the market and
economic environments. To ensure approved limits are not
breached and that NatWest Group remains within its risk
appetite, triggers have been set and are actively managed. For
further information on risk appetite and risk controls, refer to
pages 192 and 193.

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Non-traded market risk continued
Risk measurement (audited)
Non-traded internal VaR (1-day 99%)
The following table shows one-day internal banking book value-at-risk (VaR) at a 99% confidence level, split by risk type. VaR
values for each year are calculated based on one-day values for each of the 12 month-end reporting dates.
NatWest Group’s VaR metrics are explained on page 269. Each of the key risk types are discussed in greater detail in their
individual sub-sections following this table.
2021
2020
Average Maximum Minimum
Period end
Average
Maximum
Minimum
Period end
£m £m £m £m
£m £m £m £m
Interest rate
10.2 13.7
6.4
8.6
14.1 17.7 8.0 12.3
Credit spread
102.9 113.5
92.4
100.9
103.2 121.1 63.7 111.5
Structural foreign exchange rate
11.4 13.2
9.2
12.0
10.8 14.7 9.1 8.9
Equity
12.4
14.6
11.1
14.3
28.5 35.4 24.9 11.6
Pipeline risk (1)
0.5 1.2
0.3
1.2
0.5 0.7 0.3 0.3
Diversification (2)
(12.9) (35.6)
(18.9) 4.2
Total
124.5 147.1
101.4
101.4
138.2 159.9 70.8 148.8
(1) Pipeline risk is the risk of loss arising from personal customers owning an option to draw down a loan – typically a mortgage – at a committed rate, where interest rate changes
may result in greater or fewer customers than anticipated taking up the committed offer.
(2) NatWest Group benefits from diversification across various financial instrument types, currencies and markets. The extent of the diversification benefit depends on the correlation
between the assets and risk factors in the portfolio at a particular time. The diversification factor is the sum of the VaR on individual risk types less the total portfolio VaR.
 On an average basis, non-traded VaR was broadly stable
over 2021. Period-end VaR reflects the completion of the
transition from LIBOR to risk-free benchmarks.
 The decrease in equity VaR, on an average basis, reflects the
disposal of SABB in 2020.

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Non-traded market risk continued
Interest rate risk
Non-traded interest rate risk (NTIRR) arises from the provision
to customers of a range of banking products with differing
interest rate characteristics. When aggregated, these products
form portfolios of assets and liabilities with varying degrees of
sensitivity to changes in market interest rates. Mismatches can
give rise to volatility in net interest income as interest rates
vary.
NTIRR comprises the following three primary risk types:
 Gap risk: arises from the timing of rate changes in non-
trading book instruments. The extent of gap risk depends
on whether changes to the term structure of interest rates
occur consistently across the yield curve (parallel risk) or
differentially by period (non-parallel risk).
 Basis risk: captures the impact of relative changes in
interest rates for financial instruments that have similar
tenors but are priced using different interest rate indices, or
on the same interest rate indices but with different tenors.
 Option risk: arises from option derivative positions or from
optional elements embedded in assets, liabilities and/or off-
balance sheet items, where NatWest Group or its customer
can alter the level and timing of their cash flows. Option
risk also includes pipeline risk.
To manage exposures within its risk appetite, NatWest Group
aggregates interest rate positions and hedges its residual
exposure, primarily with interest rate swaps.
Structural hedging aims to reduce gap risk and the sensitivity
of earnings to interest rate shocks. It also provides some
protection against prolonged periods of falling rates. Structural
hedging is explained in greater detail below, followed by
information on how NatWest Group measures NTIRR from both
an economic value-based and an earnings-based perspective.
Structural hedging
NatWest Group has a significant pool of stable, non and low interest-bearing liabilities, principally comprising equity and money
transmission accounts. These balances are usually hedged, either by investing directly in longer-term fixed-rate assets (such as
fixed-rate mortgages or UK government gilts) or by using interest rate swaps, which are generally booked as cash flow hedges of
floating-rate assets, in order to provide a consistent and predictable revenue stream.
After hedging the net interest rate exposure externally, NatWest Group allocates income to equity or products in structural hedges
by reference to the relevant interest rate swap curve. Over time, this approach has provided a basis for stable income attribution
to products and interest rate returns. The programme aims to track a time series of medium-term swap rates, but the yield will be
affected by changes in product volumes and NatWest Group’s capital composition.
The table below shows the total income and total yield, incremental income relative to short-term cash rates, and the period-end
and average notional balances allocated to equity and products in respect of the structural hedges managed by NatWest Group.
2021
2020
Incremental Total
Period end
Average Total
Incremental Total Period end Average Total
income income
notional
notional yield
income income notional notional yield
£m £m
£bn
£bn %
£m £m £bn £bn %
Equity structural hedging
426 448
21
22 2.05
478 580 23 24 2.43
Product structural hedging
744 861
161
145 0.59
543 958 125 115 0.83
Other structural hedges
139 115
24
23 0.51
119 150 21 20 0.73
Total
1,309 1,424
206
190 0.75
1,140 1,688 169 159 1.06
Equity structural hedges refer to income allocated primarily to equity and reserves. At 31 December 2021, the equity structural
hedge notional was allocated between NWH Group and NWM Plc in a ratio of approximately 80/20 respectively.
Product structural hedges refer to income allocated to customer products by NWH Group Treasury, mainly current accounts and
customer deposits in Commercial Banking and UK Retail Banking. Other structural hedges refer to hedges managed by UBIDAC,
Private Banking, Ulster Bank Limited and RBS International. Hedges associated with Ulster Bank Limited were moved from other
structural hedges to product hedges in H1 2021 as Ulster Bank Limited products migrated to NatWest Bank Plc.
At 31 December 2021, approximately 93% by notional of total structural hedges were sterling-denominated.

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Non-traded market risk continued
The following table presents the incremental income associated with product structural hedges at segment level.
2021
2020
£m
£m
Retail Banking
346
251
Commercial Banking
398
292
Total
744
543
 The increase in hedge notional, on a period-end basis,
mainly resulted from increased hedging of Personal and
Commercial deposits. This reflected the increase in
underlying customer deposit balances.
 The five-year sterling swap rate rose to 1.05% at the end of
December 2021 from -0.01% at the end of December 2020.
The ten-year sterling swap rate also rose, from 0.16% to
0.95%. Despite the swap rate rises, the yield of the
structural hedge fell. This was partly due to the full-year
impact of hedges booked in 2020 and the impact of hedging
balance growth, where new hedges may be booked initially
at shorter maturities than five or ten years and therefore
attract a lower coupon than the five or ten-year swap rate.
 During 2021, sterling-denominated structural hedges were
migrated from LIBOR to a SONIA index. US dollar-
denominated structural hedges were migrated from LIBOR
to a SOFR index. Because SONIA and SOFR are risk-free
benchmarks, as maturing hedges are replaced the yield
going forward will increasingly reflect the lack of risk
premium. Euro-denominated hedges remain indexed
against EURIBOR.
NTIRR can be measured using value-based or earnings-based approaches. Value-based approaches measure the change in value
of the balance sheet assets and liabilities including all cash flows. Earnings-based approaches measure the potential impact on the
income statement of changes in interest rates over a defined horizon, generally one to three years.
NatWest Group uses VaR as its value-based approach and sensitivity of net interest earnings as its earnings-based approach.
These two approaches provide complementary views of the impact of interest rate risk on the balance sheet at a point in time. The
scenarios employed in the net interest earnings sensitivity approach may incorporate assumptions about how NatWest Group and
its customers will respond to a change in the level of interest rates. In contrast, the VaR approach measures the sensitivity of the
balance sheet at a point in time. Capturing all cash flows, VaR also highlights the impact of duration and repricing risks beyond the
one-to-three-year period shown in earnings sensitivity calculations.
Value-at-risk
VaR is a statistical estimate of the potential change in the market value of a portfolio (and, thus, the impact on the income
statement) over a specified time horizon at a given confidence level.
NatWest Group’s standard VaR metrics – which assume a time horizon of one trading day and a confidence level of 99% – are
based on interest rate repricing gaps at the reporting date. Daily rate moves are modelled using observations from the last 500
business days. These incorporate customer products plus associated funding and hedging transactions as well as non-financial
assets and liabilities. Behavioural assumptions are applied as appropriate.
The non-traded interest rate risk VaR metrics for NatWest Group’s retail and commercial banking activities are included in the
banking book VaR table presented earlier in this section. The VaR captures the risk resulting from mismatches in the repricing
dates of assets and liabilities.
It also includes any mismatch between the maturity profile of external hedges and NatWest Group’s target maturity profile for the
hedge.

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Non-traded market risk continued
Sensitivity of net interest earnings
Net interest earnings are sensitive to changes in the level of
interest rates, mainly because maturing structural hedges are
replaced at higher or lower rates and changes to coupons on
managed rate customer products do not always match changes
in market rates of interest or central bank policy rates.
Earnings sensitivity is derived from a market-implied forward
rate curve, which will incorporate expected changes in central
bank policy rates such as the Bank of England base rate. A
simple scenario is shown that projects forward earnings based
on the 31 December 2021 balance sheet, which is assumed to
remain constant. An earnings projection is derived from the
market-implied curve, which is then subject to interest rate
shocks. The difference between the market-implied projection
and the shock gives an indication of underlying sensitivity to
interest rate movements.
Reported sensitivities should not be considered a forecast of
future performance in these rate scenarios. Actions that could
reduce interest earnings sensitivity include changes in pricing
strategies on customer loans and deposits as well as hedging.
Management action may also be taken to stabilise total income
also taking into account non-interest income.
Three-year 25-basis-point sensitivity table
The table below shows the sensitivity of net interest earnings –
for both structural hedges and managed rate accounts – on a
one, two and three-year forward-looking basis to an upward or
downward interest rate shift of 25 basis points.
In the upward rate scenario, yield curves were assumed to
move in parallel, at both year-ends.
The downward rate scenario at both year-ends allows interest
rates to fall to negative rates.
+25 basis points upward shift -25 basis points downward shift
Year 1 Year 2 (1) Year 3 (1) Year 1 Year 2 (1) Year 3 (1)
2021
£m £m £m £m £m £m
Structural hedges
43
144
235
(43)
(144)
(235)
Managed margin
282 220 255 (255) (209) (187)
Other
4 (5)
Total
329 364 490 (303) (353) (422)
2020
Structural hedges
37 118 199 (37) (118) (199)
Managed margin
319 380 387 (258) (285) (292)
Other
15 (20)
Total
371 498 586 (315) (403) (491)
(1)
The projections for Year 2 and Year 3 consider only the main drivers of earnings sensitivity, namely structural hedging and m
argin management.
(2)
The assumption of a constant balance sheet means that UBIDAC balances are held constant. UBIDAC contributes
a relatively small proportion of NatWest Group’s overall
earnings sensitivity. For example, UBIDAC contributes approximately 6% to NatWest Group’s overall sensitivity to an upward 25-basis-point rate shift over three years.
 The increase in structural hedge sensitivity at 31 December
2021 reflects the increase in the hedge notional since 31
December 2020.
 The reduction in managed margin sensitivity in the upward
and downward 25-basis-point rate shifts as well as in the
upward 100-basis-point shift partly reflects the higher level
of interest rates at 31 December 2021 compared to 31
December 2020. In the market-implied projection, the UK
base rate is projected to rise several times from 0.25% over
the three years from 31 December 2021. The UK base rate
had been projected to fall below 0.1% over the three years
from 31 December 2020. When interest rates are higher,
the pricing response to further unexpected shifts in rates
differs from the response when rates are very low or
negative.
One-year 25 and 100-basis-point sensitivity table
The following table analyses the one-year scenarios by currency and, in addition, shows the impact over one year of a 100-basis-
point upward shift in all interest rates.
2021
2020
Shifts in yield curve
Shifts in yield curve
+25
-
25
+100
+25
-
25
+100
basis points
basis points
basis points
basis points
basis points
basis points
£m
£m
£m
£m
£m
£m
Euro
20 (3) 129
7 (6) 99
Sterling
267
(264)
969
336 (287) 1,109
US dollar
40 (33) 143
26 (22) 102
Other
2 (3) 10
2 — 7
Total
329 (303) 1,251
371 (315) 1,317

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Non-traded market risk continued
Sensitivity of fair value through other comprehensive income (FVOCI) and cash flow hedging reserves to interest rate
movements
NatWest Group holds most of the bonds in its liquidity portfolio at fair value. Valuation changes that are not hedged (or not in
effective hedge accounting relationships) are recognised in FVOCI reserves.
Interest rate swaps are used to implement the structural hedging programme and also hedging of some personal and commercial
lending portfolios, primarily fixed-rate mortgages. Generally, these swaps are booked in hedge accounting relationships. Changes
in the valuation of swaps that are in effective cash flow hedge accounting relationships are recognised in cash flow hedge
reserves.
The table below shows the sensitivity of FVOCI reserves and cash flow hedge reserves to a parallel shift in all rates. In this analysis,
interest rates have not been floored at zero. Cash flow hedges are assumed to be fully effective and interest rate hedges of bonds
in the liquidity portfolio are also assumed to be subject to fully effective hedge accounting. Hedge accounting ineffectiveness would
result in some deviation from the results below, with some gains or losses recognised in P&L instead of reserves. Hedge
ineffectiveness P&L is monitored, and the effectiveness of cash flow and fair value hedge relationships is regularly tested in
accordance with IFRS requirements. Note that a movement in the FVOCI reserve would have an impact on CET1 capital but a
movement in the cash flow hedge reserve would not be expected to do so. Volatility in both reserves affects tangible net asset
value.
2021
2020
+25 basis points
-
25 basis points
+100 basis points
-
100 basis points
+25 basis points
-
25 basis points
+100 basis points
-
100 basis points
£m
£m
£m
£m
£m
£m
£m
£m
FVOCI reserves
(46) 45 (187) 174
(50) 48 (207) 181
Cash flow hedge reserves
(210) 214 (820) 877
(108) 109 (421) 447
Total
(256) 259 (1,007) 1,051
(158) 157 (628) 628
 The main driver of the increase in NatWest Group’s cash flow hedge reserve sensitivity was the increase in interest rate swaps
that form part of the structural hedge. The increase in the hedge was driven by higher customer deposits during the COVID-19
pandemic.

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Non-traded market risk continued
Credit spread risk
Credit spread risk arises from the potential adverse economic
impact of a change in the spread between bond yields and
swap rates, where the bond portfolios are accounted at fair
value through equity.
NatWest Group’s bond portfolios primarily comprise high-quality
securities maintained as a liquidity buffer to ensure it can
continue to meet its obligations in the event that access to
wholesale funding markets is restricted. Additionally, other high-
quality bond portfolios are held for collateral purposes and to
support payment systems.
Credit spread risk is monitored daily through sensitivities and
VaR measures. The dealing authorities in place for the bond
portfolios further mitigate the risk by imposing constraints by
duration, asset class and credit rating. Exposures and limit
utilisations are reported to senior management on a daily basis.
Foreign exchange risk
Non-traded foreign exchange risk arises from three main
sources:
 Structural foreign exchange rate risk – arises from the
capital deployed in foreign subsidiaries, branches and joint
arrangements and related currency funding where it differs
from sterling.
 Non-trading book foreign exchange rate risk – arises from
customer transactions and profits and losses that are in a
currency other than the functional currency.
 Forecast earnings or costs in foreign currencies – NatWest
Group assesses its potential exposure to forecast foreign
currency income and expenses. NatWest Group hedges
forward some forecast expenses.
The most material non-traded open currency positions are the
structural foreign exchange exposures arising from investments
in foreign subsidiaries, branches and associates and their
related currency funding. These exposures are assessed and
managed to predefined risk appetite levels under delegated
authority agreed by the CFO with support from the Asset &
Liability Management Committee. NatWest Group seeks to limit
the potential volatility impact on its CET1 ratio from exchange
rate movements by maintaining a structural open currency
position. Gains or losses arising from the retranslation of net
investments in overseas operations are recognised in equity
reserves and reduce the sensitivity of capital ratios to foreign
exchange rate movements primarily arising from the
retranslation of non-sterling denominated RWAs. Sensitivity is
minimised where, for a given currency, the ratio of the
structural open position to RWAs equals the CET1 ratio.
The sensitivity of this ratio to exchange rates is monitored
monthly and reported to the Asset & Liability Management
Committee at least quarterly. Foreign exchange exposures
arising from customer transactions are sold down by businesses
on a regular basis in line with NatWest Group policy.
Foreign exchange risk (audited)
The table below shows structural foreign currency exposures.
Structural foreign Residual
currency
Structural
Net investments Net exposures foreign
in foreign
investment
pre-economic
Economic
currency
operations hedges hedges hedges (1) exposures
2021
£m
£m
£m
£m
£m
US dollar
1,275 (260) 1,015 (1,015)
—
Euro
6,222 (2,669) 3,553
—
3,553
Other non-sterling
990 (421) 569
—
569
Total
8,487 (3,350) 5,137 (1,015) 4,122
2020
US dollar
1,299 (3) 1,296 (1,296) —
Euro
6,485 (829) 5,656 — 5,656
Other non-sterling
1,077 (350) 727 — 727
Total
8,861 (1,182) 7,679 (1,296) 6,383
(1) Economic hedges of US dollar net investments in foreign operations represent US dollar equity securities that do not qualify as net investment hedges for accounting purposes. They
provide an offset to structural foreign exchange exposures to the extent that there are net assets in overseas operations available.
 The decrease in net investments in foreign operations was
partly driven by sterling strengthening against the euro.
 The increase in the sterling value of net investment hedges
was mainly driven by increased hedging of NatWest
Holdings’ investment in UBIDAC.
 During the year, NatWest Group also increased net
investment hedging in US dollar and other non-sterling
currencies to reduce the potential impact on RWAs of
changes to its regulatory foreign exchange hedging
permission.
 Changes in foreign currency exchange rates affect equity in
proportion to structural foreign currency exposure. For
example, a 5% strengthening or weakening in foreign
currencies against sterling would result in a gain or loss of
£0.3 billion in equity respectively.

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Non-traded market risk continued
Equity risk (audited)
Non-traded equity risk is the potential variation in income and reserves arising from changes in equity valuations. Equity exposures
may arise through strategic acquisitions, venture capital investments and restructuring arrangements.
Investments, acquisitions or disposals of a strategic nature are referred to the Acquisitions & Disposals Committee. Once approved
by the CFO with support from the Acquisitions & Disposals Committee for execution, such transactions are referred for approval to
the Board, the Executive Committee, the Chief Executive, the Chief Financial Officer or as otherwise required. Decisions to acquire
or hold equity positions in the non-trading book that are not of a strategic nature, such as customer restructurings, are taken by
authorised persons with delegated authority.
Equity positions are carried at fair value on the balance sheet based on market prices where available. If market prices are not
available, fair value is based on appropriate valuation techniques or management estimates.
The table below shows the balance sheet carrying value of equity positions in the banking book.
2021
2020
£m
£m
Exchange-traded equity
16
14
Private equity
160
160
Other
66
78
242
252
The exposures may take the form of (i) equity shares listed on a recognised exchange, (ii) private equity shares defined as unlisted
equity shares with no observable market parameters or (iii) other unlisted equity shares.
2021
2020
£m
£m
Net realised gains arising from disposals
8
(248)
Unrealised gains included in Tier 1 or Tier 2 capital
88
82
(1) Includes gains or losses on FVOCI instruments only.
 The losses on disposals in 2020 mainly reflected the disposal of SABB.
Accounting volatility risk
Accounting volatility risk arises when an exposure is accounted
for at amortised cost but economically hedged by a derivative
that is accounted for at fair value. Although this is not an
economic risk, the difference in accounting between the
exposure and the hedge creates volatility in the income
statement.
Accounting volatility can be mitigated through hedge
accounting. However, residual volatility will remain in cases
where accounting rules mean that hedge accounting is not an
option, or where there is some hedge ineffectiveness.
Accounting volatility risk is reported to the Asset & Liability
Management Committee monthly and capitalised as part of the
Internal Capital Adequacy Assessment Process (ICAAP).

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Traded market risk
Definition (audited)
Traded market risk is the risk arising from changes in fair value
on positions, assets, liabilities or commitments in trading
portfolios as a result of fluctuations in market prices.
Sources of risk (audited)
Traded market risk mainly arises from NatWest Group’s trading
activities. These activities provide a range of financing, risk
management and investment services to clients − including
corporations and financial institutions − around the world. From
a market risk perspective, activities are focused on rates;
currencies; and traded credit. NatWest Group undertakes
transactions in financial instruments including debt securities,
as well as securities financing and derivatives.
All material traded market risk resides in NatWest Markets. The
key categories are interest rate risk, credit spread risk and
foreign currency price risk.
Trading activities may also give rise to counterparty credit risk.
For further detail refer to the Credit risk section.
Key developments in 2021
 The UK, US and eurozone economies rebounded strongly in
2021 following the rollout of COVID-19 vaccines. However,
inflation rose in H2 2021, in part due to global supply
disruptions. This led to further market volatility, particularly
in Rates, due to significant shifts in inflation expectations.
 Traded VaR remained within appetite, with an average-
basis year-on-year reduction driven by de-risking activity in
line with the strategic focus on RWA reduction.
Governance (audited)
Market risk policy statements set out the governance and risk
management framework. Responsibility for identifying,
measuring, monitoring and controlling market risk arising from
trading activities lies with the relevant trading business. The
Market Risk function independently advises on, monitors and
challenges the risk-taking activities undertaken by the trading
business ensuring these are within the constraints of the
market risk framework, policies, and risk appetite statements
and measures.
Risk appetite
NatWest Group’s qualitative appetite for traded market risk is
set out in the traded market risk appetite statement.
Quantitative appetite is expressed in terms of exposure limits.
The limits at NatWest Group level comprise value-at-risk (VaR)
and stressed value-at-risk (SVaR). More details on these are
provided on the following pages.
For each trading business, a document known as a dealing
authority compiles details of all applicable limits and trading
restrictions. The desk-level mandates comprise qualitative limits
related to the product types within the scope of each desk, as
well as quantitative metrics specific to the desk’s market risk
exposures. These additional limits and metrics aim to control
various risk dimensions such as exposure size, aged inventory,
currency and tenor.
The limits are reviewed to reflect changes in risk appetite,
business plans, portfolio composition and the market and
economic environments and recalibrated to ensure that they
remain aligned to NatWest Group RWA targets. Limit reviews
focus on optimising the alignment between traded market risk
exposure and capital usage.
To ensure approved limits are not breached and that NatWest
Group remains within its risk appetite, triggers have been set
such that if exposures exceed a specified level, action plans are
developed by the relevant business and the Market Risk
function and implemented. For more detail on risk appetite and
risk controls, refer to pages 192 and 193.
Monitoring and mitigation
Traded market risk is identified and assessed by gathering,
analysing, monitoring and reporting market risk information at
desk, business, franchise and NatWest Group-wide levels.
Industry expertise, continued system developments and
techniques such as stress testing are also used to enhance the
effectiveness of the identification and assessment of all material
market risks.
Traded market risk exposures are monitored against limits and
analysed daily. A daily report summarising the position of
exposures against limits at desk, business, franchise and
NatWest Group levels is provided to senior management and
market risk managers across the function. Limit reporting is
supplemented with regulatory capital and stress testing
information as well as ad-hoc reporting.
A risk review of trading businesses is undertaken weekly with
senior risk and front office staff. This includes a review of profit
and loss drivers, notable position concentrations and other
positions of concern.
Business profit and loss performance is monitored
automatically through loss triggers which, if breached, require
a remedial action plan to be agreed between the Market Risk
function and the business. The loss triggers are set using both a
fall-from-peak approach and an absolute loss level. In addition,
regular updates on traded market risk positions are provided to
the Executive Risk Committee and Board Risk Committee.
Measurement
NatWest Group uses VaR, SVaR and the incremental risk
charge to measure traded market risk. Risks that are not
adequately captured by VaR or SVaR are captured by the Risks
Not In VaR (RNIV) framework to ensure that NatWest Group is
adequately capitalised for market risk. In addition, stress testing
is used to identify any vulnerabilities and potential losses.
The key inputs into these measurement methods are market
data and risk factor sensitivities. Sensitivities refer to the
changes in trade or portfolio value that result from small
changes in market parameters that are subject to the market
risk limit framework. Revaluation ladders are used in place of
sensitivities to capture the impact of large moves in risk factors
or the joint impact of two risk factors.
These methods have been designed to capture correlation
effects and allow NatWest Group to form an aggregated view
of its traded market risk across risk types, markets and
business lines while also taking into account the characteristics
of each risk type.
Value-at-risk
For internal risk management purposes, VaR assumes a time
horizon of one trading day and a confidence level of 99%.
The internal VaR model – which captures all trading book
positions including those products approved by the regulator –
is based on a historical simulation, utilising market data from
the previous 500 days on an equally-weighted basis.

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Traded market risk continued
The model also captures the potential impact of interest rate
risk; credit spread risk; foreign currency price risk; equity price
risk; and commodity price risk.
When simulating potential movements in such risk factors, a
combination of absolute, relative and rescaled returns is used.
The performance and adequacy of the VaR model are tested
regularly through the following processes:
 Back-testing: Internal and regulatory back-testing is
conducted on a daily basis. (Information on internal back-
testing is provided in this section. Information on regulatory
back-testing appears in the Pillar 3 Report).
 Ongoing model validation: VaR model performance is
assessed both regularly, and on an ad-hoc basis, if market
conditions or portfolio profile change significantly.
 Model Risk Management review: As part of the model
lifecycle, all risk models (including the VaR model) are
independently reviewed to ensure the model is still fit for
purpose given current market conditions and portfolio
profile. For further detail on the independent model
validation carried out by Model Risk Management refer to
page 284. More information relating to pricing and market
risk models is presented in the Pillar 3 Report.
One-day 99% traded internal VaR
Traded VaR (1-day 99%) (audited)
The table below shows one-day 99% internal VaR for NatWest Group’s trading portfolios, split by exposure type.
2021
2020
Average
Maximum
Minimum
Period end
Average
Maximum
Minimum
Period end
£m
£m
£m
£m
£m
£m
£m
£m
Interest rate
10.4 25.3
4.5
8.9
8.7
20.2 4.8 6.3
Credit spread 11.3 13.4
9.4
10.7
15.3
27.2 8.7 10.3
Currency 3.4 9.4
1.7
2.2
4.2
8.4 2.1 3.0
Equity
0.4 0.8
—
0.2
0.6
2.0 0.2 0.7
Commodity
0.1 0.5
—
—
0.1
0.6 — 0.2
Diversification (1) (12.3) (10.5)
(12.8)
(10.3)
Total
13.3 23.9
9.3
11.5
16.1
25.7 10.1 10.2
(1) NatWest Group benefits from diversification across various financial instrument types, currencies and markets. The extent of the diversification benefit depends on the correlation
between the assets and risk factors in the portfolio at a particular time. The diversification factor is the sum of the VaR on individual risk types less the total portfolio VaR.
 Traded VaR increased in the first half of 2021 reflecting a
rise in tenor basis risk in sterling flow trading. This related
to the transition from LIBOR to alternative risk-free rates.
 A regulator-approved update to the VaR model was applied
in the second half of the year, to address the impact of this
transition.
 On an average basis, traded VaR decreased in 2021
compared to 2020. This was driven by de-risking activity in
line with the strategic focus on RWA reduction.
0
5
10
15
20
25
30
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
£m
Total Trading VaR Interest Rate VaR Credit VaR FX VaR Equity VaR Commodity VaR

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Traded market risk
VaR back-testing
The main approach employed to assess the VaR model’s
ongoing performance is back-testing, which counts the number
of days when a loss exceeds the corresponding daily VaR
estimate, measured at a 99% confidence level.
Two types of profit and loss (P&L) are used in back-testing
comparisons: Actual P&L and Hypothetical P&L. For more
details on the back-testing approach, refer to the Pillar 3
Report.
The table below shows internal back-testing exceptions in the major NatWest Markets businesses for the 250-business-day period
to 31 December 2021. Internal back-testing compares one-day 99% traded internal VaR with Actual and Hypothetical (Hypo) P&L.
Back
-
testing exceptions
Actual
Hypo
Rates
1 2
Currencies
1 1
Credit
—
—
xVA
—
—
 The exceptions in the Rates business were mainly driven by
market moves in sterling, euro and US dollar rates.
 The exceptions in the Currencies business were mainly
driven by market moves related to the Turkish lira.
Stressed VaR (SVaR)
As with VaR, the SVaR methodology produces estimates of the potential change in the market value of a portfolio, over a specified
time horizon, at a given confidence level. SVaR is a VaR-based measure using historical data from a one-year period of stressed
market conditions.
A simulation of 99% VaR is run on the current portfolio for each 250-day period from 2005 to the current VaR date, moving
forward one day at a time. The SVaR is the worst VaR outcome of the simulated results.
This is in contrast with VaR, which is based on a rolling 500-day historical data set. A time horizon of ten trading days is assumed
with a confidence level of 99%.
The internal traded SVaR model captures all trading book positions.
2021
2020
Average
Maximum
Minimum
Period end
Average
Maximum
Minimum
Period end
£m
£m
£m
£m
£m
£m
£m
£m
Total internal traded SVaR 95 175 46 66
97
196
59 87
 Traded SVaR increased in the first half of 2021, reflecting a
rise in tenor basis risk in sterling flow trading. This related
to the transition from LIBOR to alternative risk-free rates.
 Traded SVaR subsequently decreased in the second half of
the year following changes to the treatment of tenor basis
risk in the VaR model.
Risks Not In VaR (RNIVs)
The RNIV framework is used to identify and quantify market
risks that are not fully captured by the internal VaR and SVaR
models.
RNIV calculations form an integral part of ongoing model and
data improvement efforts to capture all market risks in scope
for model approval in VaR and SVaR.
For further qualitative and quantitative disclosures on RNIVs,
refer to the Market risk section of the Pillar 3 Report.
Stress testing
For information on stress testing, refer to page 193.
Incremental risk charge (IRC)
The IRC model quantifies the impact of rating migration and
default events on the market value of instruments with
embedded credit risk (in particular, bonds and credit default
swaps) held in the trading book. It further captures basis risk
between different instruments, maturities and reference
entities. For further qualitative and quantitative disclosures on
the IRC, refer to the Market risk section of the Pillar 3 Report.

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Market risk – linkage to balance sheet
The table below analyses NatWest Group’s balance sheet by non-trading and trading business.
2021
2020
Non-trading Trading
Non-trading Trading
Total
business
business
Total
business
business
£bn £bn £bn
£bn £bn £bn Primary market risk factor
Assets
Cash and balances at central
banks
177.8
177.8
—
124.5
124.5
—
Interest rate
Trading assets
59.2 0.7 58.5
69.0 0.3 68.7
Reverse repos
20.7 — 20.7
19.4 — 19.4
Interest rate
Securities
25.0 — 25.0
29.2 — 29.2
interest rate, credit spreads, equity
Other
13.5 0.7 12.8
20.4 0.3 20.1
Interest rate
Derivatives
106.1 1.6 104.5
166.5 2.3 164.2
Interest rate, credit spreads, equity
Settlement balances
2.1 0.2 1.9
2.3 0.1 2.2
Settlement
Loans to banks
7.7 7.6 0.1
7.0 6.9 0.1
Interest rate
Loans to customers
359.0 358.9 0.1
360.5 360.4 0.1
Interest rate
Other financial assets
46.1 46.1
—
55.1 55.1
—
Interest rate,
credit spreads, equity
Intangible assets
6.7
6.7
—
6.7
6.7
—
Interest rate, credit spreads, equity
Other assets
8.3
8.3
—
7.9
7.9
—
Assets of disposal groups
9.0 9.0 —
— — —
Total assets
782.0 616.9 165.1
799.5 564.2 235.3
Liabilities
Bank deposits
26.3 26.3 —
20.6 20.6 —
Interest rate
Customer deposits
479.8 479.8 —
431.7 431.7 —
Interest rate
Settlement balances
2.1
—
2.1
5.5 3.3 2.2
Settlement
Trading liabilities
64.6
0.1
64.5
72.3
—
72.3
Repos
19.4
—
19.4
19.0
—
19.0
Interest rate
Short positions
25.0
—
25.0
26.8
—
26.8
Interest rate, credit spreads
Other
20.2 0.1 20.1
26.5 — 26.5
Interest rate
Derivatives
100.8 3.6 97.2
160.7 5.2 155.5
Interest rate, credit spreads
Other financial liabilities
49.3
48.9
0.4
45.8
45.1
0.7
Interest rate
Subordinated liabilities
8.4 8.4 —
10.0 10.0 —
Interest rate
Notes in circulation
3.0 3.0 —
2.7 2.7 —
Interest rate
Other liabilities
5.9 5.9 —
6.4 6.4 —
Total liabilities
740.2 576.0 164.2
755.7 525.0 230.7
(1) Non-trading businesses are entities that primarily have exposures that are not classified as trading book. For these exposures, with the exception of pension-related activities, the
main measurement methods are sensitivity analysis of net interest income, internal non-traded VaR and fair value calculations. For more information refer to the non-traded market
risk section.
(2) Trading businesses are entities that primarily have exposures that are classified as trading book under regulatory rules. For these exposures, the main methods used by NatWest
Group to measure market risk are detailed in the traded market risk section.
(3) Foreign exchange risk affects all non-sterling denominated exposures on the balance sheet across trading and non-trading businesses, and therefore has not been listed in the
above tables.

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Pension risk
Definition
Pension risk is the risk to NatWest Group caused by its
contractual or other liabilities to, or with respect to, a pension
scheme (whether established for its employees or those of a
related company or otherwise). It is also the risk that NatWest
Group will make payments or other contributions to, or with
respect to, a pension scheme because of a moral obligation or
because NatWest Group considers that it needs to do so for
some other reason.
Sources of risk
NatWest Group has exposure to pension risk through its
defined benefit schemes worldwide. The Main section of The
NatWest Group Pension Fund (the Main section) is the largest
source of pension risk with £52.0 billion of assets and £42.0
billion of liabilities at 31 December 2021 (2020 – £51.3 billion of
assets and £43.9 billion of liabilities). Refer to Note 5 to the
consolidated financial statements, for further details on
NatWest Group’s pension obligations, including sensitivities to
the main risk factors.
Pension scheme liabilities vary with changes in long-term
interest rates and inflation as well as with pensionable salaries,
the longevity of scheme members and legislation. Pension
scheme assets vary with changes in interest rates, inflation
expectations, credit spreads, exchange rates, and equity and
property prices. NatWest Group is exposed to the risk that the
schemes’ assets, together with future returns and additional
future contributions, are estimated to be insufficient to meet
liabilities as they fall due. In such circumstances, NatWest
Group could be obliged (or might choose) to make additional
contributions to the schemes or be required to hold additional
capital to mitigate this risk.
Key developments in 2021
 There were no material changes to NatWest Group’s
exposure to pension risk during the year, and the overall
position of the main defined benefit schemes that NatWest
Group sponsors has improved.
 The triennial actuarial valuation for the Main section, with
an effective date of 31 December 2020, was completed on
14 December 2021. As the Main section was in surplus at
this date, no deficit repair contributions were required,
although there was a small increase in the level of
contributions in relation to ongoing accrual of benefits.
 In line with the Memorandum of Understanding signed with
the Trustee of the Main section in April 2018, a £500 million
lump sum contribution was paid into the Main section,
following the share buyback in 2021.
 NatWest Group has exposure to a number of defined
benefit pension schemes in the Republic of Ireland.
Following the announcement to commence a phased
withdrawal from the Republic of Ireland, an agreement was
reached with each of the schemes’ Trustees, on a
timeframe for discussions on the future support
arrangements for the schemes on completion of the phased
withdrawal, with all parties sharing the objective of having
new support arrangements in place by the end of 2022.
 Following the changes to Ulster Bank Limited, it no longer
participates in any of NatWest Group’s defined benefit
pension schemes. In particular, NatWest Bank Plc assumed
responsibility as Principal Employer and the only
participating employer in The Ulster Bank Pension Scheme
in Northern Ireland. This will not affect NatWest Group’s
overall exposure to the Scheme.
 As part of the transition of framework components to align
to the requirements of the NatWest Group enterprise-wide
risk management framework, an updated pension risk
policy and risk appetite statement were developed in 2021.
Governance
Chaired by the Chief Financial Officer, the Group Asset &
Liability Management Committee is a key component of
NatWest Group’s approach to managing pension risk. It
considers the pension impact of the capital plan for NatWest
Group and reviews performance of NatWest Group’s material
pension funds and other issues material to NatWest Group’s
pension strategy. It also considers investment strategy
proposals from the Trustee of the Main section.
For further information on governance, refer to page 190.
Risk appetite
NatWest Group maintains an independent view of the risk
inherent in its pension funds. NatWest Group has an annually
reviewed pension risk appetite statement incorporating defined
metrics against which risk is measured.
Policies and standards are in place to provide formal controls
for pension risk reporting, modelling, governance and stress
testing. A pension risk policy, which sits within the NatWest
Group enterprise-wide risk management framework, is also in
place and is subject to associated framework controls.
Monitoring and measurement
Pension risk is monitored by the Executive Risk Committee and
the Board Risk Committee by way of the monthly Risk
Management Report.
NatWest Group also undertakes stress tests on its material
defined benefit pension schemes each year. These tests are
also used to satisfy the requests of regulatory bodies such as
the Bank of England.
The stress testing framework includes pension risk capital
calculations for the purposes of the Internal Capital Adequacy
Assessment Process as well as additional stress tests for a
number of internal management purposes. The results of the
stress tests and their consequential impact on NatWest Group’s
balance sheet, income statement and capital position are
incorporated into the overall NatWest Group stress test results.
NatWest Bank Plc (a subsidiary of NatWest Group) is the
principal employer of the Main section and could be required to
fund any deficit that arises.
Mitigation
Following risk mitigation measures taken by the Trustee in
recent years, the Main section is now well protected against
interest rate and inflation risks and is being run on a low
investment risk basis with relatively small equity risk
exposure. The Main section also uses derivatives to manage the
allocation of the portfolio to different asset classes and to
manage risk within asset classes.
The potential impact of climate change is one of the factors
considered in managing the assets of the Main section. The
Trustee monitors the risk to its investments from changes in the
global economy and invests, where return justifies the risk, in
sectors that reduce the world’s reliance on fossil fuels, or that
may otherwise promote environmental benefits. Further details
regarding the Main section Trustee’s approach to managing
climate change risk can be found in its Responsible Ownership
Policy and its net zero commitment. The Trustee has reported
in line with the Task Force on Climate-related Financial
Disclosures in its Annual Report and Accounts.

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Compliance & conduct risk
Definition
Compliance risk is the risk that the behaviour of NatWest Group
towards customers fails to comply with laws, regulations, rules,
standards and codes of conduct. Such a failure may lead to
breaches of regulatory requirements, organisational standards
or customer expectations and could result in legal or regulatory
sanctions, material financial loss or reputational damage.
Conduct risk is the risk that the conduct of NatWest Group and
its subsidiaries and its staff towards customers – or in the
markets in which it operates – leads to unfair or inappropriate
customer outcomes and results in reputational damage,
financial loss or both.
Sources of risk
Compliance and conduct risks exist across all stages of
NatWest Group’s relationships with its customers and arise
from a variety of activities including product design, marketing
and sales, complaint handling, staff training, and handling of
confidential inside information. As set out in Note 27 to the
consolidated financial statements, members of NatWest Group
are party to legal proceedings and are subject to investigation
and other regulatory action in the UK, the US and other
jurisdictions.
Key developments in 2021
 A new Ring-Fencing Hub was set up to provide an
aggregated view of ring-fencing compliance and risk
management. Oversight of the work to complete NatWest
Group’s attestation of compliance was also a key focus.
 Risk appetite statements and measures were updated with
an enhanced focus to provide better visibility of key risks
across NatWest Group.
 Delivered a digital platform to facilitate risk-based rules
mapping to regulatory obligations. This will enable more
efficient management of regulatory compliance matters and
support intelligent risk taking.
 Continued collaboration across NatWest Group to deliver
good customer outcomes with a focus on enhancing
forbearance strategies.
 There was ongoing monitoring and mitigation of elevated
conduct risks resulting from the phased withdrawal from
the Republic of Ireland including data-driven risk profile
reporting.
 Oversight and management of major compliance
programmes including work to upgrade NatWest Group’s
internal ratings based approach for credit risk in order to
build better outcomes for customers.
 Provided strategic oversight and advice to NatWest Group’s
LIBOR transition programme.
Governance
NatWest Group defines appropriate standards of compliance
and conduct and ensures adherence to those standards
through its risk management framework. Relevant compliance
and conduct matters are escalated through Executive Risk
Committee and Board Risk Committee.
Risk appetite
Risk appetite for compliance and conduct risks is set at Board
level. Risk appetite statements articulate the levels of risk that
legal entities, businesses and functions work within when
pursuing their strategic objectives and business plans. A range
of controls is operated to ensure the business delivers good
customer outcomes and is conducted in accordance with legal
and regulatory requirements. A suite of policies addressing
compliance and conduct risks set appropriate standards across
NatWest Group. Examples of these include the Complaints
Management Policy, Client Assets & Money Policy, and Product
Lifecycle Policy as well as policies relating to customers in
vulnerable situations, cross-border activities and market abuse.
Continuous monitoring and targeted assurance is carried out as
appropriate.
Monitoring and measurement
Compliance and conduct risks are measured and managed
through continuous assessment and reporting to NatWest
Group’s senior risk committees and at Board level. The
compliance and conduct risk framework facilitates the
consistent monitoring and measurement of compliance with
laws and regulations and the delivery of consistently good
customer outcomes. The first line of defence is responsible for
effective risk identification, reporting and monitoring, with
oversight, challenge and review by the second line. Compliance
and conduct risk management is also integrated into NatWest
Group’s strategic planning cycle.
Mitigation
Activity to mitigate the most-material compliance and conduct
risks is carried out across NatWest Group with specific areas of
focus in the customer-facing businesses and legal entities.
Examples of mitigation include consideration of customer needs
in business and product planning, targeted training, complaints
management, as well as independent monitoring activity.
Internal policies help support a strong customer focus across
NatWest Group. Independent assessments of compliance with
applicable regulations are also carried out at a legal entity
level.
Financial crime risk
Definition
Financial crime risk is presented by criminal activity in the form
of money laundering, terrorist financing, bribery and
corruption, sanctions and tax evasion, as well as fraud risk
management.
Sources of risk
Financial crime risk may be presented if NatWest Group’s
customers, employees or third parties undertake or facilitate
financial crime, or if NatWest Group’s products or services are
used to facilitate such crime. Financial crime risk is an inherent
risk across all lines of business.
Key developments in 2021
 While work continues to enhance the control environment
relating to financial crime risk, operational weaknesses
between 2012 and 2016 resulted in the inadequate
monitoring of a UK incorporated customer. NatWest Group
co-operated fully with the regulator’s investigation into this
case and, in October 2021, NWB Plc pleaded guilty to three
breaches of the Money Laundering Regulations 2007.
 Significant investment continued to be made to support
delivery of the multi-year transformation plan across
financial crime risk management.
 Enhancements were made to technology and data analytics
to improve the effectiveness of systems used to monitor
customers and transactions.
 A new financial crime and fraud goal was introduced for
NatWest Group’s most senior 150 employees to further
embed financial crime risk management culture,
behaviours, and accountabilities.

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Financial crime risk continued
Governance
The Financial Crime Executive Steering Group, which is jointly
chaired by the Chief Risk Officer and the Chief Administrative
Officer, is the core governance committee for financial crime
(excluding fraud). It oversees financial crime risk management,
operational performance, and transformation matters including
decision-making and escalations to Executive Risk Committee,
Board Risk Committee and NatWest Group Executive
Committee.
Risk appetite
There is no appetite to operate in an environment where
systems and controls do not enable the identification,
assessment, monitoring, management and mitigation of
financial crime risk. NatWest Group’s systems and controls
must be comprehensive and proportionate to the nature, scale
and complexity of its businesses. There is no tolerance to
systematically or repeatedly breach relevant financial crime
regulations and laws.
NatWest Group operates a framework of preventative and
detective controls designed to mitigate the risk that it could
facilitate financial crime. These controls are supported by a
suite of policies, procedures and guidance to ensure they
operate effectively.
Monitoring and measurement
Financial crime risks are identified and reported through
continuous risk management and regular reporting to NatWest
Group’s senior risk committees and the NatWest Group Board.
Quantitative and qualitative data is reviewed and assessed to
measure whether financial crime risk is within risk appetite.
Mitigation
Through the financial crime framework, relevant policies,
systems, processes and controls are used to mitigate and
manage financial crime risk. This includes the use of dedicated
screening and monitoring systems and controls to identify
people, organisations, transactions and behaviours that may
require further investigation or other actions. Centralised
expertise is available to detect and disrupt threats to NatWest
Group and its customers. Intelligence is shared with law
enforcement, regulators and government bodies to strengthen
national and international defences against those who would
misuse the financial system for criminal motives.
Climate risk
Definition
Climate risk is the threat of financial loss or adverse non-
financial impacts associated with climate change and the
political, economic and environmental responses to it.
Sources of risk
Physical risks may arise from climate and weather-related
events such as heatwaves, droughts, floods, storms and sea
level rises. They can potentially result in financial losses,
impairing asset values and the creditworthiness of borrowers.
NatWest Group could be exposed to physical risks directly by
the effects on its property portfolio and, indirectly, by the
impacts on the wider economy as well as on the property and
business interests of its customers.
Transition risks may arise from the process of adjustment
towards a low-carbon economy. Changes in policy, technology
and sentiment could prompt reassessment of customers’
financial risk and may lead to falls in the value of a large range
of assets. NatWest Group could be exposed to transition risks
directly through the costs of adaptation within economic
sectors and markets as well as supply chain disruption leading
to financial impacts on it and its customers. Potential indirect
effects include the erosion of NatWest Group’s competitiveness,
profitability, or reputation damage.
Key developments in 2021
 A principles-based climate risk policy was approved by the
Board Risk Committee and introduced in April 2021.
 In December 2021, the Board approved a number of first-
generation quantitative climate risk appetite measures.
These will enable reporting of climate risk appetite and link
business-as-usual risk management to NatWest Group’s
strategic goals and priorities.
 NatWest Group participated in the Bank of England’s
Climate Biennial Exploratory Scenario (CBES) exercise. In
doing so, NatWest Group’s capabilities regarding climate
scenario analysis were strengthened in 2021 with increased
coverage across the balance sheet.
 A new Climate Centre of Excellence was established to
provide strategic horizon scanning, guidance and specialist
climate expertise across NatWest Group.
 Wholesale credit risk: qualitative assessment of climate risk
was made mandatory for the majority of the Wholesale
portfolio. This was supported by enhancements to
Transaction Acceptance Standards (TAS) criteria, with the
inclusion of sector-specific climate considerations for the
heightened risk sectors and generic climate considerations
for all other TAS documents.
 Personal credit risk: operational measures were developed.
These will help to monitor the performance of the Personal
mortgage portfolio.
Governance
The Board is responsible for monitoring and overseeing
climate-related risk within NatWest Group’s overall business
strategy and risk appetite. The potential impact, likelihood and
preparedness of climate-related risk is reported regularly to the
Board Risk Committee and the Board.
The Chief Risk Officer shares accountability with the CEO
under the Senior Managers and Certification Regime for
identifying and managing the financial risks arising from
climate change. This includes ensuring that the financial risks
from climate change are adequately reflected in risk
management frameworks, and that NatWest Group can
identify, measure, monitor, manage, and report on its exposure
to these risks.
The Climate Change Executive Steering Group is responsible
for overseeing the direction of and progress against NatWest
Group’s climate-related commitments. During 2021, the
Executive Steering Group focused on overseeing the Group
Climate Change Programme (GCCP), which was tasked with
continuing to deliver both NatWest Group’s climate strategy
and the climate-related mandatory change agenda. The GCCP
will close and transition activity into business-as-usual
operations across NatWest Group’s franchises and functions.
The Executive Steering Group will continue to supervise
strategic implementation and delivery, supported by the
Climate Centre of Excellence.
Risk appetite
NatWest Group’s ambition is to be a leading bank in the UK in
helping to address climate change. The climate ambition is
underpinned by activity to reduce the climate impact of
financing activity by at least 50% by 2030 and to do what is
necessary to achieve alignment with the 2015 Paris Agreement.

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Climate risk continued
Work continued in 2021 to integrate climate-related risk into
the risk management framework, including the development of
appropriate risk appetite metrics. In December 2021, the
NatWest Group Board approved the adoption of three first-
generation climate risk appetite measures into the enterprise-
wide risk management framework, for integration into
business-as-usual risk management.
Combined with franchise specific operational limits, this suite of
metrics will enable reporting of climate risk appetite to senior
risk management forums and links risk management to
NatWest Group’s strategic goals and priorities.
Monitoring and measurement
NatWest Group has focused on developing the capabilities to
use scenario analysis to identify the most material climate risks
and opportunities for its customers, seeking to harness insights
to inform risk management practices and maximise the
opportunities arising from a transition to a low carbon
economy.
Scenario analysis allows NatWest Group to test a range of
possible future climate pathways and understand the nature
and magnitude of the risks they present. The purpose of
scenario analysis is not to forecast the future but to understand
and prepare to manage risks that could arise.
In 2021, activity was dominated by the Bank of England’s CBES
exercise. In accordance with Bank of England guidance,
NatWest Group used three scenarios as the foundation for its
analysis. These were broadly consistent with scenarios
published by the Network of Central Banks and Supervisors for
Greening the Financial System:
No Additional Action: no new policy action takes place to
reduce greenhouse gas emissions. This leads to more than 3°C
of warming and severe physical risks. The frequency and
severity of extreme weather events such as flooding and
tropical cyclones increases, and there are chronic changes in
labour and land productivity.
Early Action: global temperature increases are limited to 1.5°C
by 2100 as a result of stringent climate policies and innovation
starting in 2021. Carbon prices increase steadily between 2021-
2050, which drives significant decarbonisation. Coal use falls by
98% between 2021 and 2050, and the share of low-carbon
energy in the global energy mix increases from 17% to 73%
over the same period. Global CO2 emissions reach net zero
around 2050.
Late Action: strong climate policies successfully limit warming
to 1.8°C by 2100, but decisive policy action is delayed until
2031. Carbon prices increase rapidly between 2031-2050.
Global greenhouse gas emissions fall by 80% between 2030 and
2050 leading to a higher level of transition risk during the
period.
In 2021 for the CBES, NatWest Group applied these three
climate scenarios to quantify climate risk across its balance
sheet, including the full portfolio of wholesale customers and its
entire UK commercial real estate and residential (retail)
mortgage portfolio.
To ensure that climate risk is factored into the capital planning
and budgeting process, NatWest Group is leveraging the CBES
scenarios and analytics to support the business-as-usual
scenario analysis processes, for example the base case is
consistent with the Early Action CBES scenario. In addition,
climate risks consistent with the Late Action CBES scenario
have been integrated into one of the Internal Capital Adequacy
Assessment Process scenarios.
NatWest Group regularly considers existing and emerging
regulatory requirements related to climate change. It continues
to participate in several industry-wide initiatives to develop
consistent risk measurement methodologies. NatWest Group is
a founding signatory of the United Nations Environment
Programme Finance Initiative Principles for Responsible
Banking, which aims to promote sustainable finance around the
globe. In addition, NatWest Group is also represented on the
Climate Financial Risk Forum established by the PRA and FCA
to shape the financial service industry’s response to the
challenges posed by climate risk.
Operational risk
Definition
Operational risk is the risk of loss resulting from inadequate or
failed internal processes, people and systems, or external
events. It arises from day-to-day operations and is relevant to
every aspect of the business.
Sources of risk
Operational risk may arise from a failure to manage operations,
systems, transactions and assets appropriately. This can take
the form of human error, an inability to deliver change
adequately or on time, the non-availability of technology
services, or the loss of customer data. Systems failure, theft of
NatWest Group property, information loss and the impact of
natural, or man-made, disasters – as well as the threat of cyber
attacks – are sources of operational risk. Operational risk can
also arise from a failure to account for changes in law or
regulations or to take appropriate measures to protect assets.
Key developments in 2021
 Aligned to the implementation of the enterprise-wide risk
management framework, a new operational risk policy was
approved in April 2021. The new policy sets out the
qualitative expectations, guidance and standards that
stipulate the nature and extent of permissible risk-taking for
operational risk.
 Operational risk appetite was enhanced using a quantitative
modelling approach to determine a meaningful quantitative
expression of the maximum level of operational risk
NatWest Group is willing to accept.
 Oversight of NatWest Group’s transformation agenda –
particularly in relation to the second-order impacts of
COVID-19 – remained a significant area of focus with
activity being closely monitored and managed to protect
key regulatory deliveries.
 There was also a continued focus on operational resilience
to ensure planning, controls and operational activities
remained robust and appropriate, with continuing attention
on the potential operational risks arising from changes in
working practices.
 The security threat and the potential for cyber-attacks on
NatWest Group and its supply chain continue to be closely
monitored. During 2021, there was further investment in
NatWest Group’s defences in response to the evolving
threat. There was also continuing focus on assuring the
security of the supply chain.
 There was sustained focus on reducing the risks associated
with data use, particularly in terms of assuring data quality.
This was aligned to the NatWest Group data strategy,
designed to identify and implement enhancements to the
effective use of data across NatWest Group.

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Operational risk continued
Governance
The risk governance arrangements in place for operational risk
are aligned to the requirements set out in the Board approved
enterprise-wide risk management framework and are
consistent with achieving safety, soundness and sustainable
risk outcomes.
Aligned to this, a strong operational risk management oversight
function is vital to support NatWest Group’s ambitions to serve
its customers better. Improved management of operational risk
against defined appetite is vital for stability and reputational
integrity.
Risk appetite
Operational risk appetite supports effective management of all
operational risks. It expresses the level and types of operational
risk NatWest Group is willing to accept to achieve its strategic
objectives and business plans. NatWest Group’s operational risk
appetite statement encompasses the full range of operational
risks faced by its legal entities, businesses and functions.
Mitigation
The Control Environment Certification (CEC) process is a half-
yearly self-assessment by the CEOs of NatWest Group’s
principal businesses, functions and legal entities. It provides a
consistent and comparable view on the adequacy and
effectiveness of the internal control environment.
CEC covers material risks and the underlying key controls,
including financial, operational and compliance controls, as well
as supporting risk management frameworks. The CEC
outcomes, including forward-looking assessments for the next
two half-yearly cycles and progress on control environment
improvements, are reported to Group Audit Committee and
Board Risk Committee. They are also shared with external
auditors.
The CEC process helps to ensure compliance with the NatWest
Group Policy Framework, Sarbanes-Oxley 404 requirements
concerning internal control over financial reporting (as
referenced in the Compliance report on page 181), and certain
requirements of the UK Corporate Governance Code.
Risks are mitigated by applying key preventative and detective
controls, an integral step in the risk assessment methodology
which determines residual risk exposure. Control owners are
accountable for the design, execution, performance and
maintenance of key controls. Key controls are regularly
assessed for adequacy and tested for effectiveness. The results
are monitored and, where a material change in performance is
identified, the associated risk is re-evaluated.
Monitoring and measurement
Risk and control assessments are used across all business
areas and support functions to identify and assess material
operational and conduct risks and key controls. All risks and
controls are mapped to NatWest Group’s Risk Directory. Risk
assessments are refreshed at least annually to ensure they
remain relevant and capture any emerging risks and also
ensure risks are reassessed.
The process is designed to confirm that risks are effectively
managed in line with risk appetite. Controls are tested at the
appropriate frequency to verify that they remain fit-for-purpose
and operate effectively to reduce identified risks.
NatWest Group uses the standardised approach to calculate its
Pillar 1 operational risk capital requirement. This is based on
multiplying three years’ average historical gross income by
coefficients set by the regulator based on business line. As part
of the wider Internal Capital Adequacy Assessment Process an
operational risk economic capital model is used to assess Pillar
2A, which is a risk-sensitive add-on to Pillar 1. The model uses
historical loss data (internal and external) and forward-looking
scenario analysis to provide a risk-sensitive view of NatWest
Group’s Pillar 2A capital requirement.
Scenario analysis is used to assess how severe but plausible
operational risks will affect NatWest Group. It provides a
forward-looking basis for evaluating and managing operational
risk exposures.
Refer to the Capital, liquidity and funding risk section for
operational risk capital requirement figures.
Operational resilience
NatWest Group manages and monitors operational resilience
through its risk and control assessment methodology. This is
underpinned by setting and monitoring risk indicators and
performance metrics for key business services. Progress
continues on the response to regulator expectations on
operational resilience, with involvement in a number of
industry-wide operational resilience forums. This enables a
more holistic view of the operational resilience risk profile and
the pace of ongoing innovation and change, both internally and
externally.

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Event and loss data management
The operational risk event and loss data management process
ensures NatWest Group captures and records operational risk
financial and non-financial events that meet defined criteria.
Loss data is used for regulatory and industry reporting and is
included in capital modelling when calculating economic capital
for operational risk. The most serious events are escalated in a
simple, standardised process to all senior management, by way
of an Early Event Escalation Process.
All financial impacts and recoveries associated with an
operational risk event are reported against the date they were
recorded in NatWest Group’s financial accounts. A single event
can result in multiple losses (or recoveries) that may take time
to crystallise. Losses and recoveries with a financial accounting
date in 2021 may relate to events that occurred, or were
identified in, prior years. NatWest Group purchases insurance
against specific losses and to comply with statutory or
contractual requirements.
Percentage and value of events
At 31 December 2021, events aligned to the clients, products
and business practices event category accounted for 80% of
NatWest Group’s operational risk losses, which reflected a
significant increase on 2020. In 2020, several large provision
releases were recorded (that is, previously recorded provisions
were released back to cashflow as they were no longer
required). The value of these outweighed the provisions taken
for other conduct-related matters, hence a negative movement
was recorded in the clients, products and business practices
category.
Value of events
Volume of events (1)
£m
Proportion
Proportion
2021
2020
2021
2020
2021
2020
Fraud
74
85
17%
82%
87%
81%
Clients, products and business practices
341
(68)
80%
(66%)
3%
7%
Execution, delivery and process management
8
15
2%
15%
7%
8%
Employment practices and workplace safety
2
2
—
2%
2%
2%
Technology and infrastructure failures
3
70
1%
68%
1%
2%
Disasters and public safety
—
(1)
—
(1%)
—
—
428
103
100%
100%
100%
100%
(1) Based on the volume and value of events (the proportion and cost of operational risk events to NatWest Group) where the associated loss is more than or equal to £10,000.

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Model risk
Definition
Model risk is the potential for adverse consequences arising
from inaccurate financial assessments or decisions made as a
result of incorrect or misused model outputs and reports.
NatWest Group defines a model as a quantitative method,
system, or approach that applies statistical, economic, financial,
accounting, mathematical or data science theories, techniques
and assumptions to process input data into quantitative
estimates.
Sources of risk
NatWest Group uses a variety of models in the course of its
business activities. Examples include the use of model outputs
to support customer decisioning, measuring and assessing risk
exposures (including credit, market, and climate risk), as well
as calculating regulatory capital and liquidity requirements.
Model applications may give rise to different risks depending on
the franchise in which they are used. Model risk is therefore
assessed separately for each franchise in addition to the overall
assessment made for NatWest Group.
Key developments in 2021
 Improvements to models were made in 2021 resulting in a
significant reduction of out-of-appetite models across
NatWest Group. Enhancements to models will continue in
2022 to bring NatWest Group back within model risk
appetite.
 Embedding and enhancement of the Model Risk
frameworks.
Governance
A governance framework is in place to ensure policies and
processes relating to models are appropriate and effective.
Two roles are key to this – Model Risk Owners and Model Risk
Officers. Model Risk Owners are responsible for model approval
and ongoing performance monitoring. Model Risk Officers, in
the second line, are responsible for oversight, including
ensuring that models are independently validated prior to use
and on an ongoing basis aligned to the model’s risk rating.
Model risk matters are escalated to senior management in
several ways. These include model risk oversight committees,
as well as the relevant business and function model
management committees. The Group Model Risk Oversight
Committee provides a direct escalation route to the Group
Executive Risk Committee and, where applicable, onwards to
the Group Board Risk Committee.
Risk appetite
Model risk appetite is set in order to limit the level of model risk
that NatWest Group is willing to accept in the course of its
business activities. It is approved by relevant Executive Risk
Committees. Business areas are responsible for monitoring
performance against appetite and remediating models outside
appetite.
Risk controls
Policies and procedures related to the development, validation,
approval, implementation and use and ongoing monitoring of
models are in place to ensure adequate control across the
lifecycle of an individual model.
Validation of material models is conducted by an independent
risk function comprised of skilled, well-informed subject matter
experts. This is completed for new models or amendments to
existing models and as part of an ongoing periodic programme
to assess model performance. The frequency of periodic
validation is aligned to the risk rating of the model. The
independent validation focuses on a variety of model features,
including modelling approach, the nature of the assumptions
used, the model’s predictive ability and complexity, the data
used in the model, its implementation and its compliance with
regulation.
Risk monitoring and measurement
The level of risk relating to an individual model is assessed
through a model risk rating. A quantitative approach is used to
determine the risk rating of each model, based on the model’s
materiality and validation rating. This approach provides the
basis for model risk appetite measures and enables model risk
to be robustly monitored and managed across NatWest Group.
Ongoing performance monitoring is conducted by the first line
and overseen by the second line to ensure parameter estimates
and model constructs remain fit for purpose, model
assumptions remain valid and that models are being used
consistently with their intended purpose. This allows timely
action to be taken to remediate poor model performance
and/or any control gaps or weaknesses.
Risk mitigation
By their nature – as approximations of reality – model risk is
inherent in the use of models. It is managed by refining or
redeveloping models where appropriate – either due to
changes in market conditions, business assumptions or
processes – and by applying adjustments to model outputs
(either quantitative or based on expert opinion). Enhancements
may also be made to the process within which the model
output is used in order to further limit risk levels.
Reputational risk
Definition
Reputational Risk is defined as the risk of damage to
stakeholder trust due to negative consequences arising from
internal actions or external events.
Sources of risk
Reputational risks originate from internal actions and external
events. The three primary drivers of reputational risk have
been identified as: failure in internal execution; a conflict
between NatWest Group’s values and the public agenda; and
contagion (when NatWest Group’s reputation is damaged by
failures in the wider financial sector).
Key developments in 2021
 Reputation risk registers were introduced at NatWest Group
level in order to enhance monitoring of the most material
reputational risks.
 An updated reputational risk appetite statement was
introduced with a specific focus on public trust.
 The correlation between reputational risk and climate
change issues remained a significant area of focus during
2021. Enhancements were made to the Environmental,
Social & Ethical risk management framework to mitigate
reputational risk arising from exposure to carbon-intensive
sectors and to support the transition to a lower carbon
economy.

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Additional information
Financial review
Reputational risk continued
Governance
A reputational risk policy supports reputational risk
management across NatWest Group. Reputational risk
committees review relevant issues at an individual business or
entity level, while the Reputational Risk Committee – which has
delegated authority from the Executive Risk Committee –
opines on cases, issues, sectors and themes that represent a
material reputational risk. The Board Risk Committee oversees
the identification and reporting of reputational risk. The
Sustainable Banking Committee has a specific focus on
environmental, social and ethical issues.
Risk appetite
NatWest Group manages and articulates its appetite for
reputational risk through a qualitative reputational risk appetite
statement and quantitative measures. NatWest Group seeks to
identify, measure and manage risk exposures arising from
internal actions and external events. This is designed to ensure
that stakeholder trust is retained. However, reputational risk is
inherent in NatWest Group’s operating environment and public
trust is a specific factor in setting reputational risk appetite.
Monitoring and measurement
Relevant internal and external factors are monitored through
regular reporting to the reputational risk committees at
business or entity level and escalated, where appropriate, to
the Reputational Risk Committee, Board Risk Committee or the
Sustainable Banking Committee.
Mitigation
Standards of conduct are in place across NatWest Group
requiring strict adherence to policies, procedures and ways of
working to ensure business is transacted in a way that meets –
or exceeds – stakeholder expectations.
External events that could cause reputational damage are
identified and mitigated through NatWest Group’s top and
emerging risks process as well as through the NatWest Group
and franchise-level risk registers.
NatWest Group has in recent years been the subject of
investigations and reviews by a number of regulators and
governmental authorities, some of which have resulted in past
fines, settlements and public censure. Refer to the Litigation
and regulatory matters section of Note 27 to the consolidated
financial statements for details of material matters currently
affecting NatWest Group.

NatWest Group Annual Report and Accounts 2021 286
286 Financial statements
287 Independent auditor’s report
300 Consolidated income statement
301 Consolidated statement of comprehensive income
302 Consolidated balance sheet
303 Consolidated statement of changes in equity
305 Consolidated cash flow statement
307 Accounting policies
313 Notes on the consolidated accounts
313 Net interest income
314 Non-interest income
315 Operating expenses
318 Segmental analysis
322 Pensions
327 Auditor’s remuneration
327 Tax
331 Discontinued operations and assets and liabilities
of disposal groups
332 Earnings per share
332 Financial instruments - classification
337 Financial instruments - valuation
346 Financial instruments - maturity analysis
348 Trading assets and liabilities
349 Derivatives
355 Loan impairment provisions
356 Other financial assets
357 Intangible assets
358 Other assets
358 Other financial liabilities
359 Subordinated liabilities
360 Other liabilities
361 Share capital and other equity
363 Leases
365 Structured entities
366 Asset transfers
367 Capital resources
368 Memorandum items
374 Analysis of the net investment in business
interests and intangible assets
375 Analysis of changes in financing during the year
375 Analysis of cash and cash equivalents
376 Directors’ and key management remuneration
376 Transactions with directors and key management
377 Related parties
377 Post balance sheet events
378 NatWest Group plc financial statements and notes
Financial
statements

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NatWest Group plc
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Opinion
In our opinion:
 the financial statements of NatWest Group plc (the ‘Parent Company’) and its subsidiaries (together, the ‘Group’) give a true and
fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2021 and of the Group’s profit for
the year then ended;
 the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards, International Financial Reporting Standards (‘IFRS’) as adopted by the European Union and IFRS as issued by the
International Accounting Standards Board (‘IASB’);
 the Parent Company financial statements have been properly prepared in accordance with UK adopted international
accounting standards as applied in accordance with section 408 of the Companies Act 2006, IFRS as adopted by the EU and as
issued by the IASB; and
 the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements (see table below) of the Parent Company and the Group for the year ended 31 December
2021 which comprise:
Group Parent Company
 Consolidated balance sheet as at 31 December 2021;
 Consolidated income statement for the year then ended;
 Consolidated statement of comprehensive income for
the year then ended;
 Consolidated statement of changes in equity for the year
then ended;
 Consolidated cash flow statement for the year then
ended;
 Accounting policies;
 Related Notes 1 to 34 to the financial statements;
 Annual Remuneration Report identified as ‘audited’;
 Risk and capital management section identified as
‘audited’
 The Capital Requirements (Country-by-Country
Reporting) Regulations report identified as ‘audited’.
 Balance sheet as at 31 December 2021;
 Statement of changes in equity for the year then ended;
 Cash flow statement for the year then ended; and
 Related notes 1 to 12 to the financial statements including a
summary of critical accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international
accounting standards, IFRS as adopted by the European Union and as issued by the IASB, and as regards the Parent Company
financial statements, as applied in accordance with section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we
remain independent of the Group and the Parent Company in conducting the audit.

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Additional information
Financial review
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group and Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
 In conjunction with our walkthrough of the Group’s financial close process, we confirmed our understanding of management’s
Going Concern assessment process and also engaged with management early to ensure all key factors were considered in their
assessment;
 We evaluated management’s going concern assessment which included reviewing their evaluation of long-term business and
strategic plans, capital adequacy, liquidity and funding positions. It also assessed these positions considering internal stress tests
which included consideration of principal and emerging risks. The Group’s risk profile and risk management practices were
considered including credit risk, market risk, compliance and conduct risk, climate risk and operational risk;
 We evaluated management’s assessment by considering the Group’s ability to continue in operation and meets its liabilities under
different scenarios including the impact of the Group’s strategic plans and the continued economic impact of COVID-19. We used
economic specialists in assessing the macroeconomic assumptions in the forecast through benchmarking to institutional
forecasts, HMT consensus and peer comparative economic forecasts. We also considered other commitments of the Group
including those in respect of its subsidiaries;
 Considered the results of the Bank’s stress testing and Bank of England 2021 solvency stress test, as well as the Group’s results
in the Bank of England Climate Biennial Exploratory Scenario (CBES); and
 We reviewed the Group’s going concern disclosures included in the annual report in order to assess that the disclosures were
appropriate and in conformity with the reporting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern
over the twelve months from the date when the financial statements are authorised for issue.
In relation to the group and parent company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Group’s ability to continue as a going concern.
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope
for each company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements.
We take into account the size and risk profile of the component and its activities, the organisation of the Group and effectiveness of
group-wide controls, changes in the business environment and other factors such as recent internal audit results when assessing
the level of work to be performed at each component.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative
coverage of significant accounts in the financial statements, of the five reporting components of the Group, we selected four
components based on size and risk, which represent the principal reporting legal entities within the Group.
The scoping for the current year is as follows:
Component Scope Key locations
NatWest Holdings (NWH) Full United Kingdom
NatWest Markets (NWM) Full United Kingdom, United States, and
Netherlands
RBS International Specific Channel Islands
RBS AA Holdings Specific United Kingdom
The table below illustrates the coverage obtained from the work performed by our audit teams. We considered total assets, total
equity and total income to verify we had appropriate overall coverage.
Full scope (1) Specific scope (2) Other procedures (3) Total
Total assets 95% 5% - 100%
Total equity 89% 8% 3% 100%
Total income 92% 7% 1% 100%
(1) Full scope: audit procedures on all significant accounts.
(2) Specific scope: audit procedures on selected accounts.
(3) Other procedures: considered in analytical procedures.
The audit scope of the specific scope components may not have included testing of all significant accounts within the components.
However, the testing will have contributed to the total coverage of significant accounts tested for the overall Group.
As a result of the continued impact of the COVID-19 outbreak and resulting lockdown restrictions for part of the year in all of the
countries where full or specific scope audit procedures have been performed, we have modified our audit strategy to allow for the
audit to be performed remotely at both the Group and component locations. This approach was supported through remote user
access to the Group’s financial systems and the use of EY software collaboration platforms for the secure and timely delivery of
requested audit evidence.

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Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of
the components by us, as the primary audit engagement team, or by component auditors from other EY global network firms
operating under our instruction.
The primary audit engagement team interacted regularly with the component audit teams where appropriate throughout the
course of the audit, which included holding planning meetings, maintaining regular communications on the status of the audits,
reviewing key working papers and taking responsibility for the scope and direction of the audit process. The primary audit team
continued to follow a programme of oversight visits that has been designed to ensure that the Senior Statutory Auditor, or another
Group audit partner, visits all full scope and specific scope locations outside the United Kingdom. During the current year’s audit
cycle, due to continued COVID-19 restrictions, the visits undertaken by the primary audit team were necessarily virtual visits. These
visits involved video call meetings with local management, and discussions on the audit approach with the component team and
any issues arising from their work. The primary team interacted regularly with the component teams and maintained a continuous
and open dialogue with component teams, as well as holding formal closing meetings quarterly, to ensure that the primary team
were fully aware of their progress and results of their procedures. The primary team also reviewed key working papers and were
responsible for the scope and direction of the audit process. This, together with the additional procedures at Group level, gave us
appropriate evidence for our opinion on the Group financial statements
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies. The Group has determined
that the most significant future impacts from climate change on its operations will be from credit risk, operational risk, reputational
risk, conduct risk and regulatory compliance risk. These are explained in the required Task Force for Climate related Financial
Disclosures in the Strategic Report, and in the Climate Risk section within the Risk and capital management section, which form
part of the “Other information”. Our procedures on these disclosures consisted solely of considering whether they are materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be materially
misstated.
As explained in the Accounting Policy note, the Group makes use of reasonable and supportable information to make accounting
judgments and estimates, including the observable effect of the physical and transition risks of climate change on the current
creditworthiness of borrowers, asset values and market indicators, as well as their effect on the Group’s competitiveness and
profitability. Many of the impacts arising will be longer term in nature, with an inherent level of uncertainty, and have limited effect
on accounting judgments and estimates for the current period under the requirements of UK adopted international accounting
standards, IFRS as adopted by the European Union and as issued by the IASB. In the Accounting Policy note, explanation of the
impact of certain transition and physical risks were provided for the key assumptions and significant judgements and estimates.
Our audit effort in considering climate change was focused on ensuring that the effects of material climate risks as disclosed in the
Accounting Policy note have been appropriately reflected in the asset and liability valuations and the nature and timing of future
cash flows. Details of our procedures and results on expected credit loss provisions and impairment of goodwill are included in our
key audit matters below. We also challenged the Directors’ considerations of climate change in their assessment of going concern
and viability and associated disclosures.
Whilst the Group has stated its commitment to the aspirations of the Paris Agreement to achieve net zero emissions by 2050, as
stated above the impacts arising will be longer term in nature, and there is an inherent level of uncertainty in determining the full
future economic impact on their business model, operational plans and customers.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit
of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.

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Risk Our response to the risk
Expected Credit Loss Provisions
At 31 December 2021 the Group
reported total gross loans of £369.8
billion (2020: £372.4 billion) and £3.8
billion of expected credit losses (ECL)
(2020: £6.2 billion).
Management’s judgments and
estimates are especially subjective
due to significant uncertainty
associated with the assumptions used.
Uncertainty related with the path to
recovery from COVID-19 and the
impact of climate change was
considered in our risk assessment.
Aspects with increased complexity in
respect of the timing and
measurement of ECL include:
 Staging - Allocation of assets to
stage 1, 2, or 3 on a timely basis
using criteria in accordance with
IFRS 9;
 Model estimations - Accounting
interpretations, modelling
assumptions and data used to build
and run the Probability of Default
(‘PD’), Loss Given Default (‘LGD’)
and Exposure at Default (‘EAD’)
models that calculate the ECL;
 Economic scenarios - Inputs,
assumptions and weightings used
to estimate the impact of multiple
economic scenarios particularly
those influenced by COVID-19
including any changes to scenarios
required through 31 December
2021;
 Adjustments - Appropriateness,
completeness and valuation of
model adjustments which represent
approximately 26% of total ECL
including any COVID-19 specific
adjustments due to the ongoing
uncertainty which increases the
risk of management override; and
 Individual provisions -
Measurement of individual
provisions including the assessment
of multiple scenarios considering
the impact of COVID-19 on exit
strategies, collateral valuations and
time to collect.
Controls testing - We evaluated the design and operating effectiveness of controls
across the processes relevant to ECL, including the judgments and estimates noted.
These controls, among others, included those over:
 the allocation of assets into stages including management’s monitoring of stage
effectiveness;
 model governance including monitoring and model validation;
 data accuracy and completeness;
 credit monitoring;
 multiple economic scenarios;
 the governance and review of post-model adjustments;
 individual provisions; and
 production of journal entries and disclosures.
In evaluating the governance process, we observed the executive finance and risk
committee meetings where the inputs, assumptions and adjustments to the ECL were
discussed and approved, among other procedures.
Overall assessment - We performed an overall assessment of the ECL provision levels
by stage to determine if they were reasonable by considering the overall credit quality
of the Group’s portfolios, risk profile, impact of COVID-19, government support
measures and climate change on the Group’s customers. We also considered the
appropriateness of provisions applied to government supported lending such as bounce
back loans and CBILs which included assessing the compliance with the eligibility
criteria with the involvement of our EY legal specialists. We performed peer
benchmarking where available to assess overall staging and provision coverage levels.
For a higher risk industry, we also assessed the ECL against an independently
developed methodology estimating unsustainable debt levels.
Based on our assessment of the key judgments we used EY specialists to support the
audit team in the areas of economics, modelling and collateral and business valuations.
Staging - We evaluated the criteria used to allocate a financial asset to stage 1, 2 or 3
in accordance with IFRS 9; this included peer benchmarking to assess staging levels.
We recalculated the assets in stage 1, 2 and 3 to assess if they were allocated to the
appropriate stage and performed sensitivity analysis to assess the impact of different
criteria on the ECL and also considered the impact of performing collective staging
downgrades to industries and geographic regions particularly impacted by climate
change.
To test credit monitoring which drives the probability of default estimates used in the
staging calculation, we recalculated the risk ratings for a sample of performing loans
and focused our testing on high risk industries. We also assessed the timing of the
annual review performed by management on each wholesale loan exposure to evaluate
whether it appropriately considered risk factors by considering independent publicly
available information.
Model estimations - We performed a risk assessment on all models involved in the ECL
calculation to select a sample of models to test. We involved EY modelling specialists to
assist us to test this sample of ECL models by testing the assumptions, inputs and
formulae used. This included a combination of assessing model design and formulae,
alternative modelling techniques, recalculating the PD, LGD and EAD, and model
implementation. We also considered the results of the Group’s internal model validation
results.
To evaluate data quality, we agreed a sample of ECL calculation data points to source
systems, including balance sheet date data used to run the models and historic loss data
to monitor models. We also tested the ECL data points from the calculation engine
through to the general ledger and disclosures.

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Risk Our response to the risk
Expected Credit Loss Provisions continued
Economic scenarios - We involved EY economic specialists to assist us in evaluating the
base case and alternative economic scenarios, including evaluating probability weights
and considering contrary evidence by comparing these to other scenarios from a
variety of external sources. This assessment included the latest developments related to
COVID-19 at 31 December 2021. We assessed whether forecasted macroeconomic
variables were complete and appropriate, such as GDP, unemployment rate, interest
rates and the House Price Index. With the support of our modelling specialists we
evaluated the correlation and translation of the macroeconomic factors to the ECL.
Adjustments - We tested material post-model adjustments including those which
continued to be applied as a result of COVID-19 uncertainty. With our modelling
specialists, we assessed the risk of bias and the completeness of these adjustments by
considering the data, judgments, methodology, sensitivities, and governance of these
adjustments as well as considering model shortcomings.
Individual provisions - We recalculated and challenged the scenarios, assumptions and
cash flows for a sample of individual provisions including the alternative scenarios and
evaluating probability weights assigned, involving EY valuation specialists where
appropriate. The sample was based on a number of factors, including higher risk
sectors such as commercial real estate, agriculture, oil and gas, mining, retail, leisure
and aviation, and materiality. We considered the impact COVID-19 and climate change
had on collateral valuations and time to collect as well as whether planned exit
strategies remained viable.
Disclosure - We tested the data flows used to populate the disclosures and assessed the
adequacy of disclosures for compliance with the accounting standards and regulatory
considerations.
Key observations communicated to the Group Audit Committee
We are satisfied that provisions for the impairment of loans were reasonable and recognised in accordance with IFRS 9. We
highlighted the following matters to the Group Audit Committee:
 Overall provision levels were reasonable which also considered available peer information and our understanding of the credit
environment;
 Our testing of models and model assumptions identified some instances of over and under estimation. We aggregated these
differences and were satisfied that the overall estimate recorded was reasonable;
 The post-model adjustments recorded were within a reasonable range to reflect risk in the portfolios;
 We recalculated the staging of retail and wholesale exposures in material portfolios and noted no material differences. We also
performed sensitivity analysis on the staging criteria and noted that substantial changes would be needed to the criteria to
result in a material difference;
 For individually assessed impairments, in a few instances we reported judgmental differences in respect of the extent of the
impairment identified, however, none of these differences were considered material; and
 There is inherent uncertainty in predicting the longer-term impact of COVID-19, government support schemes and climate
change on the Group’s borrowers, their ability to make payments as they fall due and the recoverability of loans. The Group
should continue to make use of reasonable and supportable information to consider the long and short term impacts of these
matters on accounting judgments and estimates.
Relevant references in the Annual Report and Accounts
Report of the Group Audit Committee
Credit Risk section of the Risk and capital management section
Accounting policies
Note 15 to the financial statements

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Risk Our response to the risk
Impairment of goodwill and, in the Parent Company’s accounts, investments in group undertakings.
At 31 December 2021, the Group had
reported goodwill of £5.5 billion (2020: £5.6
billion) and parent company has reported
investments in group undertakings of £48.8
billion (2020: £46.2 billion).
The recognition and carrying value of
goodwill and, in the Parent Company’s
accounts, investments in group
undertakings are based on estimates of
future profitability, which require significant
management judgment and include the risk
of management bias.
Judgments and especially challenging,
complex and subjective assumptions that
are difficult to audit due to the forward-
looking nature and inherent uncertainties
associated with such assumptions include:
 Revenue forecasts including the impacts
of climate change which are impacted
by delivery of the Group’s Strategy;
 Cost forecasts given the intention to
significantly reduce costs over time;
 Macroeconomic and model assumptions
used in the recoverability and valuation
assessments (discount rates, growth
rates, macroeconomic assumptions)
including assumptions regarding the
economic consequences of COVID -19
and other political developments over an
extended period; and
 Disclosure adequacy including key
assumptions, the sensitivity of changes
to these assumptions as well as an
explanation of the impairment testing
performed.
Controls testing: We evaluated the design and operating effectiveness of controls
over the preparation and review of the forecasts, and the significant assumptions
(such as discount rate and long-term growth rate) inputs, calculations,
methodologies and judgments used in the value-in-use model. This included
testing controls over the selection of macroeconomic assumptions in addition to
controls over the preparation and review of the revenue and cost projections. In
evaluating the governance processes we reviewed the Board meeting materials
and minutes where forecasts were discussed and approved, and we observed the
committee meetings where the value-in-use model and outcomes were discussed
and approved.
Macroeconomic and model assumptions: With the support of our internal
economic specialists, we tested whether macroeconomic assumptions, including
the continued impact of COVID-19 as at 31 December 2021, used in the Group’s
forecasts were reasonable by comparing these to other scenarios from a variety
of external sources. We evaluated how the discount rates and long-term growth
rates used by management compared to our ranges which were developed using
peer practice, external market data and calculations performed by our valuation
specialists. We also assessed changes to valuation methodology and benchmarked
this against industry practice with the assistance of our valuation specialists.
Revenue forecasts: We evaluated the underlying business strategies, comparing to
expected market trends and considering anticipated balance sheet growth. We
obtained an understanding of the Group’s strategy including their consideration of
the impact of climate change, and considered its expected impact on the
forecasts and the extent to which decisions had been factored into the
forecasts, where appropriate, in accordance with the relevant accounting
standards. We also inspected the findings from the review performed by
management including their own sensitivity analysis of the forecasts.
Cost forecasts: We tested how previous management forecasts, including the
impact of cost reduction programmes, compared to actual results to evaluate the
accuracy of the forecasting process. We also tested the reasonableness of key
performance indicators against peers with the help of our valuation specialists to
assess the reasonableness of the Group’s cost forecast.
Sensitivity analysis: We evaluated how management considered alternative
assumptions and performed our own sensitivity and scenario analyses on certain
assumptions such as cost and revenue forecasts, discount rate, long-term growth
rate and other key performance indicators on both the detailed forecasts and on
an overall basis.
Disclosure: We evaluated the adequacy of disclosures in the financial statements
including the appropriateness of assumptions and sensitivities disclosed. We tested
the data and calculations included in the disclosures.
Key observations communicated to the Group Audit Committee
We are satisfied that management methodologies, judgments and assumptions supporting the carrying value of goodwill and, in
the Parent Company’s accounts, investments in group undertakings, were reasonable and in accordance with IFRS. We
highlighted the following matters to the Group Audit Committee:
 There is inherent uncertainty in predicting revenue and costs over the five-year forecast period, particularly with respect to the
impact of COVID-19, the achievement of new strategic objectives, execution risk in the planned cost reductions, the impact of
regulatory and climate change developments, and the impact of competition and disruption in banking business models over
an extended period.
 We are satisfied with management’s conclusion that the goodwill related to a legacy mortgage product reported under the
retail CGU is impaired due to the decision to wind down the book of business. The goodwill in the remaining retail and
commercial CGUs remains recoverable as at 31 December 2021 and management have adequately disclosed reasonably
possible alternative scenarios relating to the key assumptions that could result in an impairment.
 Management impaired NatWest Group’s investment in NWM, in addition they recognised a reversal in accumulated impairments
in NWH due to the significant headroom as a result of the improved economic outlook. The sensitivity analyses we reviewed,
and our independent procedures supported these assessments.
 We are satisfied that the disclosures appropriately reflect the sensitivity of the carrying value of investments in group
undertakings and goodwill to certain reasonable alternative outcomes. As there are a number of other possible outcomes and
it would be impracticable to estimate the effect of all of them, the directors have disclosed the uncertainty that other possible
outcomes within the next financial year could require an adjustment to the carrying amount of investments in group
undertakings and goodwill.
Relevant references in the Annual Report and Accounts
Accounting policies
Note 17 to the Group financial statements and Note 9 to the Parent Company financial statements

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Risk and capital management
Additional information
Financial review
Risk Our response to the risk
Provisions for customer redress, litigation and other regulatory matters
At 31 December 2021, the Group has
reported £1.3 billion (2020: £1.9 billion) of
provisions for liabilities and charges,
including £0.8 billion (2020: £1.1 billion) for
customer redress, litigation and other
regulatory matters as detailed in Note 21
of the financial statements.
Regulatory scrutiny and the continued
litigious environment give rise to a high
level of management judgment in
determining appropriate provisions and
disclosures for specific customer redress,
litigation and other regulatory matters.
Management judgment is needed to
determine whether a present obligation
exists and a provision should be recorded
at 31 December 2021 in accordance with
the accounting criteria set out under IAS
37.
The most significant areas of judgment are:
 Judgment and risk of management bias
- Auditing the adequacy of these
provisions is complex because judgment
is involved in the selection and use of
assumptions in the estimation of
material provisions and there is a risk of
management bias in the determination
of whether an outflow in respect of
identified material customer redress,
litigation and other regulatory matters
is probable and can be estimated
reliably; and
 Disclosure - Judgment is required to
assess the adequacy of disclosures of
provision for contingent liabilities given
the underlying estimation uncertainty in
the provisions, and other uncertainties
and assumptions.
Controls testing: We evaluated the design and operating effectiveness of controls
over the identification, estimation, monitoring and disclosure of provisions and
other uncertainties and assumptions related to customer redress, litigation and
other regulatory matters considering the potential for management override of
controls. The controls tested, among others, included those to identify and
monitor claims, determine when a provision is required and to ensure the
completeness and accuracy of data used to estimate provisions.
Examination of regulatory correspondence: We examined the relevant regulatory
and legal correspondence to assess developments in certain cases. We also
considered regulatory developments to identify actual or possible non-compliance
with laws and regulations that might have a material effect on the financial
statements. For cases which were settled during the period, we compared the
actual outflows with the provision that had been recorded, considered whether
further risk existed, and evaluated the level of disclosures provided.
Inquiry of legal counsel: For significant legal matters, we received confirmations
from the Group’s external legal counsel to evaluate the likelihood of the obligation
and management’s estimate of the outflow at year-end. We also conducted
inquiries with internal legal counsel over the existence of the legal obligations and
related provision. We performed a test for unrecorded provisions to assess if there
were cases not considered in the provision estimate by assessing against external
legal confirmations and discussing with internal counsel.
Testing of assumptions: Where appropriate, we involved our conduct risk and
forensics specialists to assist us in evaluating the provision for specific customer
redress, litigation and other regulatory matters. We tested the underlying data
and assumptions used in the determination of the provisions recorded, including
expected claim rates, legal costs, and the timing of settlement. We evaluated the
accuracy of management’s historical estimates by comparing the actual
settlement to the provision and considered peer bank settlement in similar cases.
We assessed the reasonableness of the assumptions used by management by
comparing to the results of our independently performed benchmarking and
sensitivity analysis. We also developed our own range of reasonable alternative
estimates and compared them to management’s provision. We tested utilisations
of remaining provisions during the year and assessed the sufficiency of the
remaining provisions yet to be paid for specific customer redress, litigation and
other regulatory matters.
Disclosure: We evaluated the disclosures provided on customer redress, litigation
and other regulatory matters to assess whether they complied with accounting
standards.
Key observations communicated to the Group Audit Committee
We are satisfied that provisions for customer redress, litigation and other regulatory matters are reasonable and recognised in
accordance with IFRS. We concurred with the recognition, measurement and level of disclosures of provisions relating to
customer redress, litigation and other regulatory matters. We did not identify any material unrecorded provisions. We highlighted
the following matters to the Group Audit Committee:
 The level of provisions by their nature incorporates significant judgments to be made and may change as a result of future
developments.
 Continued vigilance in assessing conduct risks from the impact of COVID-19, which may not manifest until well after the
pandemic has passed.
Relevant references in the Annual Report and Accounts
Report of the Group Audit Committee
Accounting policies
Note 21 and 27 to the financial statements

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Financial review
Risk Our response to the risk
Valuation of financial instruments with higher risk characteristics including related income from trading activities
As reported in note 11 to the financial
statements, as at 31 December 2021 the
company held financial instruments with
higher risk characteristics. This included (but
is not limited to) reported level 3 assets of
£2.0 billion (2020: £1.7 billion) and level 3
liabilities of £0.6 billion (2020: £0.9 billion)
whose value is dependent upon
unobservable inputs.
The valuation of those financial instruments
with higher risk characteristics can include
both significant judgment and the risk of
inappropriate revenue recognition through
incorrect pricing as outlined below. The fair
value of these instruments can involve
complex valuation models and significant
fair value adjustments, both of which may
be reliant on inputs where there is limited
market observability.
Management’s estimates which required
significant judgment include:
 Complex models - Complex model-
dependent valuations of financial
instruments, which include interest rate
swaps linked to pre-payment behaviour
and interest rate and foreign exchange
options with exotic features;
 Illiquid inputs - Pricing inputs and
calibrations for illiquid instruments,
including debt securities and loans.
Additionally, the valuation of derivative
instruments is dependent on discount
rates associated with complex collateral
arrangements;
 Fair value adjustments - The
appropriateness and completeness of fair
value adjustments made to derivatives
valuations including Funding Valuation
Adjustments (FVA), Credit Valuation
Adjustments (CVA), and material product
and deal specific adjustments on long
dated derivative portfolios; and
 The manipulation of revenue recognition
is most likely to arise through the
inappropriate valuation of these
instruments given the level of judgment
involved.
Controls testing: We evaluated the design and operating effectiveness of
controls relating to financial instrument valuation and related income statement
measurement including independent price verification, valuation models
governance, collateral management, income statement analysis, and the
associated controls over relevant information technology systems. We also
observed the Valuation Committees where valuation inputs, assumptions and
adjustments were discussed and approved.
We involved our financial instrument valuation and modelling specialists to
assist us in performing procedures including the following:
 Complex models: Testing complex model-dependent valuations by
performing independent revaluation to assess the appropriateness of models
and the adequacy of assumptions and inputs used by the Group;
 Illiquid inputs: Independently re-pricing instruments that had been valued
using illiquid pricing inputs, using alternative pricing sources where available,
to evaluate management’s valuation;
 Fair value adjustments: Comparing fair value adjustment methodologies to
current market practice and assessing the appropriateness and adequacy of
the valuation adjustment framework in light of emerging market practice and
changes in the risk profile of the underlying portfolio; and revaluing a sample
of counterparty level FVA and CVA, comparing funding spreads to third
party data, independently challenging illiquid CVA inputs, and testing
material product and deal specific adjustments on long-dated derivative
portfolio.
Throughout our audit procedures we considered the appropriateness of
modelling changes in relation to IBOR transition and impact of climate change
on the valuation of financial instruments, particularly in relation to long-dated
illiquid positions.
In addition, we assessed whether there were any indicators of aggregate bias in
financial instrument marking and methodology assumptions.
We performed back-testing analysis of recent trade activity and asset disposals
to evaluate the drivers of significant differences between book value and trade
value and to assess the impact on the fair value of similar instruments within
the portfolio. We performed an analysis of significant collateral discrepancies
with counterparties to assess the potential impact on the fair value of the
underlying (and similar) financial instruments.
Key observations communicated to the Group Audit Committee
We are satisfied that the assumptions used by management to reflect the fair value of financial instruments with higher risk
characteristics and the recognition of related income is reasonable and in accordance with IFRS. We highlighted the following
matters to the Group Audit Committee:
 Complex-model dependent valuations were appropriate based on the output of our independent revaluations, analysis of
trade activity, assessment of the output of the independent price verification process, inspection of collateral disagreements
and peer benchmarking;
 The fair value estimates of hard-to-price financial instruments appropriately reflected pricing information available at 31
December 2021; and
 Valuation adjustments applied to derivative portfolios for credit, funding and other risks were recorded in accordance with
the requirements of IFRS considering trade activity for positions with common risk characteristics, analysis of market data
and peer benchmarking.
Relevant references in the Annual Report and Accounts
Report of the Group Audit Committee
Accounting policies
Note 11 to the financial statements

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Additional information
Financial review
Risk Our response to the risk
Pension valuation and net pension asset
The Group operates a number of defined
benefit schemes which in aggregate are
significant in the context of the overall
balance sheet. At 31 December 2021, the
Group reported a net pension asset of £488
million (2020: £602 million) comprising £602
million of schemes in surplus and £114
million of schemes in deficit (2020: £723
million and £121 million respectively). The
net pension asset is sensitive to changes in
the key judgments and estimates, which
include:
 Assumptions - Actuarial assumptions and
inputs including discount rate, inflation,
pension payment and longevity to
determine the valuation of retirement
benefit liabilities;
 Valuations - Pricing inputs and
calibrations for illiquid or complex model-
dependent valuations of certain
investments held by the schemes; and
 Augmentation cap - Quantification of
trustee’s rights to unilaterally augment
benefits (Augmentation cap) to determine
the recognition of surplus.
Controls testing - We evaluated the design and operating effectiveness of
controls over the actuarial assumptions setting process, the data inputs used in
the actuarial calculation and the measurement of the fair value of the schemes’
assets.
Assumptions - We involved our actuarial specialists to evaluate the actuarial
assumptions by comparing them to independently obtained third party sources
and market practice. We assessed the impact on pension liabilities due to
changes in financial, demographic and longevity assumptions over the year,
including the continued effects of COVID-19, and whether these were supported
by objective external evidence and rationales.
Valuations - We involved our valuation specialists to assess the appropriateness
of management’s valuation methodology including the judgments made in
determining significant assumptions used in the valuation of complex and illiquid
pension assets. We tested the fair value of scheme assets by independently
calculating fair value for a sample of the assets held. Our sample included cash,
equity and debt instruments, derivative financial instruments and illiquid assets.
Augmentation cap and equalisation adjustments - We involved our actuarial
specialists to test the estimation of the augmentation cap including the inputs
used in the calculation. We also assessed the methodology and judgments made
in calculating these estimates and the associated accounting treatment in
accordance with IAS 19 and IFRIC 14.
Disclosure - We assessed the adequacy of the disclosures made in the financial
statements, including the appropriateness of the assumptions and sensitivities
disclosed.
Key observations communicated to the Group Audit Committee
We are satisfied that the valuation and disclosure of the net pension balance are reasonable and in accordance with IFRS. We
highlighted the following matters to the Group Audit Committee:
 Our benchmarking of key actuarial assumptions including the discount rate, inflation, longevity and pension payments
concluded that assumptions were within a reasonable range;
 No material differences were identified through our independent valuation testing for a sample of pension assets; and
 Management’s estimate of the impact of the augmentation cap was materially consistent with our independent estimate
using our own model.
Relevant references in the Annual Report and Accounts
Accounting policies
Note 5 to the financial statements

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Additional information
Financial review
Risk Our response to the risk
IT access management
The IT environment is complex and
pervasive to the operations of the Group
due to the large volume of transactions
processed in numerous locations on a daily
basis with extensive reliance on automated
controls. Appropriate IT controls are
required to ensure that applications process
data as expected and that changes are
made in an appropriate manner. This risk is
also impacted by the greater dependency
on third parties, increasing use of cloud
platforms, decommissioning of legacy
systems, and migration to new systems.
Such controls contribute to mitigating the
risk of potential fraud or errors as a result
of changes to applications and data.
The Group has implemented user access
management controls across IT applications,
databases and operating systems. We have
identified user access-related deficiencies in
the past and whilst the number of
deficiencies has reduced year over year, the
risk of inappropriate access remains.
We evaluated the design and operating effectiveness of IT general controls over
the applications, operating systems and databases that are relevant to financial
reporting. During our planning and test of design phases, we performed
procedures to determine whether changes in restrictions in different global
locations, as a result of the ongoing global COVID-19 pandemic had caused
material changes in IT processes or controls and observed no such changes
that would result in an increased IT risk.
Controls testing
We tested user access by assessing the controls in place for in-scope
applications, in particular testing the addition and periodic recertification of
users’ access. We continue to focus on key controls enforced by the Group’s
user access management tools, including the completeness of user data,
automated identification of movers and leavers and the adequacy of the overall
control environment. Our testing included the Group’s additional attestation and
leaver checks enhancing its identity and access control environment.
A number of systems are outsourced to third party service providers. For these
systems, we tested IT general controls through evaluating the relevant Service
Organisation Controls reports (where available). This included assessing the
timing of the reporting, the controls tested by the service auditor and whether
they address relevant IT risks. We also tested required complementary user
entity controls performed by management. Where a SOC report was not
available we identified and reviewed compensating business controls to address
this risk. Several systems have been migrated to a cloud-hosted infrastructure
model, access management processes and controls remain in-house which
formed part of our testing.
Where control deficiencies were identified, we tested remediation activities
performed by management and compensating controls in place and assessed
what additional testing procedures were necessary to mitigate any residual risk.
We also performed a further analysis of access management deficiencies
identified by EY, Management and Internal Audit to revalidate our overall
approach to access management testing.
Key observations communicated to the Group Audit Committee
We are satisfied that IT controls impacting financial reporting are designed and operating effectively. The following matters were
reported to the Group Audit Committee:
 We have seen an overall reduction in the number of discrete IT control deficiencies identified compared to prior year.
 Improvements were made to further standardise access management processes and controls across the Group, which was
one of the drivers for the reduced number of deficiencies.
 Particular attention should continue to be paid to controls over user access management including ensuring the
completeness and accuracy of the data used to perform access controls. Where issues were noted in relation to access
management, these were remediated by year end or mitigated by compensating controls. We performed additional testing in
response to deficiencies identified, where required.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the
audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Group to be £157 million (2020: £160 million), which is 5% (2020: 5%) of the profit before tax of
the Group of £4,032 million (2020: loss before tax of the Group including discontinued operations of £351 million) adjusted for loan
impairment releases arising from COVID-19 economic recovery, normalised loan impairment charges, loss on redemption of own
debt, non-recurring conduct and strategic costs and certain non-recurring transactions. We believe removing items that would
otherwise have a disproportionate impact on materiality reflects the most useful measure for users of the financial statements and
is consistent with the prior year. The 5% basis used for Group materiality is consistent with the wider industry, and is the standard
for listed and regulated entities.
We determined materiality for the Parent Company to be £157 million (2020: £160 million) which is 0.3% (2020: 0.4%) of equity of
the Parent Company and is consistent with the prior year. We believe this reflects the most useful measure for users of the financial
statements as the Parent Company’s primary purpose is to act as a holding company with investments in the Group’s subsidiaries,
not to generate operating profits and therefore a profit based measure is not relevant.

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Additional information
Financial review
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgment was
that performance materiality was 75% (2020: 50%) of our planning materiality, namely £118 million (2020: £80 million). We have
increased the percentage of performance materiality from the prior year considering that the number and amount of identified
misstatements has decreased and to reflect the continued improvements in the effectiveness of the control environment and other
factors affecting the entity and its financial reporting. Audit work at component teams for the purpose of obtaining audit coverage
over significant financial statement accounts is undertaken based on a percentage of total performance materiality. The
performance materiality set for each component is based on the relative scale and risk of the component to the Group as a whole
and our assessment of the risk of misstatement at that component. In the current year, the range of performance materiality
allocated to components was £35 million to £106 million (2020: £30 million to £72 million).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £8 million (2020:
£8 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of
other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the Annual Report and Accounts, including the Strategic Report,
Financial Review, Corporate Governance, Report of the Group Nominations and Governance Committee, Report of the Group Audit
Committee, Report of the Group Board Risk Committee, Report of the Group Sustainable Banking Committee, Report of the
Technology and Innovation Committee, Report of the directors, Risk and capital management, Non-IFRS financial measures, Risk
factors, Material contracts, and Additional information, other than the financial statements and our auditor’s report thereon. The
directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
 the information given in the Strategic report and the Report of the directors for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
 the Strategic report and the Report of the directors have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the Strategic report or the Report of the directors.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
 adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
 the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
 certain disclosures of directors’ remuneration specified by law are not made; or
 we have not received all the information and explanations we require for our audit.

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Additional information
Financial review
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the group and company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified;
 Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is
appropriate;
 Directors’ statement on fair, balanced and understandable;
 Director’s statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets its liabilities;
 Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks;
 The section of the annual report that describes the review of effectiveness of risk management and internal control systems;
and;
 The section describing the work of the audit committee.
Responsibilities of directors
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined below, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the
company and management.
 We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the
most significant are the regulations, licence conditions and supervisory requirements of the Prudential Regulation Authority
(PRA) and the Financial Conduct Authority (FCA); Companies Act 2006; and the Sarbanes Oxley Act (SOX).
 We understood how the Group is complying with those frameworks by making inquiries of management, internal audit and
those responsible for legal and compliance matters. We also reviewed correspondence between the Group and regulatory
bodies; reviewed minutes of the Board and Risk Committees; and gained an understanding of the Group’s governance
framework.
 We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur by
considering the controls established to address risks identified to prevent or detect fraud. We also identified the risks of fraud in
our key audit matters as described above and identified areas that we considered when performing our fraud procedures, such
as cybersecurity, the impact of remote working, implementation of new government supported lending products, and the
appropriateness of sources used when performing confirmation testing on accounts such as cash, loans and securities.
 Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our
procedures involved inquiries of legal counsel, executive management, and internal audit. We also tested controls and
performed procedures to respond to the fraud risks as identified in our key audit matters. These procedures were performed by
both the primary team and component teams with oversight from the primary team.
 The Group operates in the banking industry which is a highly regulated environment. As such, the Senior Statutory Auditor
considered the experience and expertise of the engagement team to ensure that the team had the appropriate competence and
capabilities, involving specialists where appropriate.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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Financial review
meeting on 4 May 2016 to audit the financial statements for the year ending 31 December 2016 and subsequent financial
periods.
 The audit opinion is consistent with the additional report to the Group Audit Committee.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
Other matters we are required to address
 Following the recommendation from the Group Audit Committee, we were appointed by the Group at its annual general
Use of our report
 The period of total uninterrupted engagement including previous renewals and reappointments is 6 years, covering periods from
our appointment through 31 December 2021.
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Micha Missakian (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London, United Kingdom
17 February 2022

Consolidated income statement for the year ended
31 December 2021
NatWest Group Annual Report and Accounts 2021 300
Financial statements
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Additional information
Financial review
Note
2021
2020
(1)
2019
(1)
£m
£m £m
Interest receivable
9,313
9,798 11,127
Interest payable
(1,699)
(2,322) (3,328)
Net interest income 1
7,614
7,476 7,799
Fees and commissions receivable
2,698
2,722
3,345
Fees and commissions payable
(574)
(722) (848)
Income from trading activities
323
1,125 932
Other operating income
451
(93) 2,759
Non-interest income 2
2,898
3,032 6,188
Total income
10,512
10,508 13,987
Staff costs
(3,676)
(3,878) (3,976)
Premises and equipment
(1,133)
(1,222)
(1,258)
Other administrative expenses
(2,026)
(1,845) (2,828)
Depreciation and amortisation
(923)
(913) (1,218)
Operating expenses 3
(7,758)
(7,858) (9,280)
Profit before impairment releases/(losses)
2,754
2,650 4,707
Impairment releases/(losses) 15
1,278
(3,131) (724)
Operating profit/(loss) before tax
4,032
(481) 3,983
Tax charge
7
(996)
(74)
(439)
Profit/(loss) from continuing operations
3,036
(555)
3,544
Profit from discontinued operations, net of tax
(2)
8
276
121 256
Profit/(loss) for the year
3,312
(434) 3,800
Attributable to:
Ordinary shareholders
2,950
(753) 3,133
Preference shareholders
19
26 39
Paid-in equity holders
299
355 367
Non
-
controlling interests
44
(62)
261
3,312
(434)
3,800
Earnings per ordinary share - continuing operations
9 23.0p
(7.2p) 23.9p
Earnings per ordinary share - discontinued operations
9 2.4p
1.0p 2.1p
Total earnings per share attributable to ordinary shareholders - basic
9 25.4p
(6.2p) 26.0p
Earnings per ordinary share - fully diluted continuing operations
9
22.9p
(7.2p) 23.8p
Earnings per ordinary share - fully diluted discontinued operations
9 2.4p
1.0p 2.1p
Total earnings per share attributable to ordinary shareholders - fully diluted
9 25.3p
(6.2p) 25.9p
(1) Comparative results have been re-presented from those previously published to reclassify certain items as discontinued operations as described in Note 8 to the consolidated
financial statements.
(2) The results of discontinued operations, comprising the post-tax profit is shown as a single amount on the face of the income statement. An analysis of this amount is presented in
Note 8 to the consolidated financial statements.
The accompanying notes on pages 313 to 377, the Accounting policies on pages 307 to 312 and the audited sections of the
Financial review and Risk and capital management sections on pages 84 to 95 and 188 to 285 form an integral part of these
financial statements.

Consolidated statement of comprehensive income for the
year ended 31 December 2021
NatWest Group Annual Report and Accounts 2021 301
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
2021
2020
2019
£m
£m £m
Profit/(loss) for the year 3,312
(434)
3,800
Items that do not qualify for reclassification
Remeasurement of retirement benefit schemes
- other movements (1) (669)
4
(142)
Loss on fair value of credit in financial liabilities
designated at FVTPL due to own credit risk
(29)
(52)
(189)
FVOCI financial assets 13
(64)
(71)
Tax 164
42
28
(521)
(70)
(374)
Items that do qualify for reclassification
FVOCI financial assets (100)
44
(14)
Cash flow hedges
(848)
271
294
Currency translation
(382)
276
(1,836)
Tax
213
(89)
(170)
(1,117)
502
(1,726)
Other comprehensive (loss)/income after tax
(1,638)
432
(2,100)
Total comprehensive income/(loss) for the year 1,674
(2)
1,700
Attributable to:
Ordinary shareholders
1,308
(338)
1,044
Preference shareholders
19
26
39
Paid
-
in
equity holders
299
355
367
Non-controlling interests 48
(45)
250
1,674
(2)
1,700
(1) Following the purchase of ordinary shares from UKGI in March 2021, NatWest Group contributed £500 million to its main pension scheme in line with the memorandum of
understanding announced on 17 April 2018. After tax relief, this contribution reduced total equity by £365 million. There was also a pre-tax loss of £192 million (€224 million) in
relation to the re-measurement of the Group’s Republic of Ireland pension schemes, primarily as a result of significant movements in underlying actuarial assumptions (2020: pre-tax
gain of £72 million (€81 million)). In line with our policy, the present value of defined benefit obligations and the fair value of plan assets at the end of the reporting period, are
assessed to identify significant market fluctuations and one-off events since the end of the prior financial year.
The accompanying notes on pages 313 to 377, the Accounting policies on pages 307 to 312 and the audited sections of the
Financial review and Risk and capital management sections on pages 84 to 95 and 188 to 285 form an integral part of these
financial statements.

Consolidated balance sheet as at 31 December 2021
NatWest Group Annual Report and Accounts 2021 302
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Note
2021
2020
£m
£m
Assets
Cash and balances at central banks 10
177,757
124,489
Trading assets 13
59,158
68,990
Derivatives
14
106,139
166,523
Settlement balances 2,141
2,297
Loans to banks - amortised cost 10
7,682
6,955
Loans to customers - amortised cost 10
358,990
360,544
Securities subject to repurchase agreements
11,746
11,542
Other financial assets excluding securities subject to repurchase agreements
34,399
43,606
Other financial assets 16
46,145
55,148
Intangible assets 17
6,723
6,655
Other assets 18
8,242
7,890
Assets of disposal groups
8
9,015
—
Total assets
781,992
799,491
Liabilities
Bank deposits
10
26,279
20,606
Customer deposits 10
479,810
431,739
Settlement balances
2,068
5,545
Trading liabilities 13
64,598
72,256
Derivatives
14
100,835
160,705
Other financial liabilities 19 49,326
45,811
Subordinated liabilities 20 8,429
9,962
Notes in circulation
3,047
2,655
Other liabilities 21
5,797
6,388
Total liabilities
740,189
755,667
Ordinary shareholders' interests
37,412
38,367
Other owners' interests
4,384
5,493
Owners’ equity 22
41,796
43,860
Non
-
controlling interests
7
(36)
Total equity
41,803
43,824
Total liabilities and equity 781,992
799,491
The accompanying notes on pages 313 to 377, the Accounting policies on pages 307 to 312 and the audited sections of the
Financial review and Risk and capital management sections on pages 84 to 95 and 188 to 285 form an integral part of these
financial statements.
The accounts were approved by the Board of directors on 17 February 2022 and signed on its behalf by:
Howard Davies Alison Rose-Slade Katie Murray NatWest Group plc
Chairman Group Chief Executive Officer Group Chief Financial Officer Registered No. SC45551

Consolidated statement of changes in equity for the year
ended 31 December 2021
NatWest Group Annual Report and Accounts 2021 303
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
2021
2020
2019
£m
£m
£m
Called
-
up share capital
-
at 1 January
12,129
12,094 12,049
Ordinary shares issued
37
35 45
Share cancellation (1,5)
(698)
— —
At 31 December
11,468
12,129 12,094
Paid-in equity - at 1 January
4,999
4,058 4,058
Redeemed
—
(1,277) —
Reclassified
(2)
(2,046)
— —
Securities issued during the period
937
2,218 —
At 31 December
3,890
4,999 4,058
Share premium - at 1 January
1,111
1,094 1,027
Ordinary
shares issued
50
17 67
At 31 December
1,161
1,111 1,094
Merger reserve - at 1 January and 31 December
10,881
10,881 10,881
FVOCI reserve - at 1 January
360
138 343
Unrealised gains/(losses)
32
76 (107)
Realised (gains)/losses (3)
(122)
152 (90)
Tax
(1)
(6) (8)
At 31 December
269
360 138
Cash flow hedging reserve - at 1 January
229
35 (191)
Amount recognised in equity
(687)
321 573
Amount transferred from equity to earnings
(161)
(50) (279)
Tax
224
(77) (68)
At 31 December
(395)
229 35
Foreign exchange reserve
-
at 1 January
1,608
1,343 3,278
Retranslation of net assets
(484)
297 (428)
Foreign currency gains/(losses) on hedges of net assets
88
(55) 83
Tax
(17)
6 (110)
Recycled to profit or loss on disposal of businesses
10
17 (1,480)
At 31 December
1,205
1,608 1,343
Capital redemption reserve - at 1 January
—
— —
Share cancellation (1)
698
— —
Redemption of preference shares
24
— —
At 31 December
722
— —
Retained earnings - at 1 January
12,567
13,946 14,312
Implementation of IFRS 16 on 1 January 2019
—
— (187)
Profit/(loss) attributable to ordinary shareholders and other equity owners
- continuing operations
2,992
(493) 3,283
-
discontinued operations
276
121 256
Equity preference dividends paid
(19)
(26) (39)
Paid-in equity dividends paid
(299)
(355) (367)
Ordinary dividends paid
(693)
— (3,018)
Shares repurchased during the year
(1,5)
(1,423)
— —
Unclaimed dividend
—
2 —
Redemption of preference shares
(24)
— —
Redemption/reclassification of paid-in equity (2,6)
150
(355) —
Realised gains/(losses) in period on FVOCI equity shares
-
gross
3
(248) 112
- tax
—
— —
Remeasurement of the retirement benefit schemes
- other movements (4)
(669)
4 (142)
- tax (4)
168
22 24
Changes in fair value of credit in financial liabilities designated at FVTPL
- gross
(29)
(52) (189)
- tax
3
8 20
Shares issued under employee share schemes
8
(11) (6)
Share-based payments (7)
(45)
4 (113)
At 31 December
12,966
12,567 13,946
For the notes to this table refer to the following page.

Consolidated statement of changes in equity for the year ended 31 December 2021 continued
NatWest Group Annual Report and Accounts 2021 304
Financial statements
Strategic report
Governance
Risk and capit
al management
Additional information
Financial review
2021
2020 2019
£m
£m £m
Own shares held - at 1 January
(24)
(42) (21)
Shares issued under employee share schemes
36
95 39
Own shares acquired (1) (383)
(77) (60)
At 31 December (371)
(24) (42)
Owners’ equity at 31 December
41,796
43,860 43,547
Non-controlling interests - at 1 January (36)
9 754
Currency translation adjustments and other movements
4
17 (11)
Profit/(loss) attributable to non-controlling interests
44
(62) 261
Dividends paid
(5)
— (5)
Equity raised
—
— 45
Equity withdrawn and disposals
—
— (1,035)
At 31 December
7
(36) 9
Total equity at 31 December 41,803
43,824 43,556
Attributable to:
Ordinary shareholders
37,412
38,367 38,993
Preference shareholders
494
494 496
Paid
-
in equity holders
3,890
4,999 4,058
Non-controlling interests 7
(36) 9
41,803
43,824 43,556
(1) In March 2021, there was an agreement with HM Treasury to buy 591 million ordinary shares in the Company from UK Government Investments Ltd (UKGI), at 190.5p per share for
the total consideration of £1.13 billion. NatWest Group cancelled 391 million of the purchased ordinary shares, amounting to £744 million excluding fees, and held the remaining 200
million in own shares held, amounting to £381 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve.
(2) In July 2021, paid-in equity reclassified to liabilities as the result of a call in August 2021 of US$2.65 billion AT1 capital notes.
(3) In 2020, the completion of the Alawwal bank merger resulted in the derecognition of the associate investment in Alawwal bank and recognition of a new investment in SABB held at
fair value through other comprehensive income (FVOCI).
(4) Following the purchase of ordinary shares from UKGI in March 2021, NatWest Group contributed £500 million to its main pension scheme in line with the memorandum of
understanding announced on 17 April 2018. After tax relief, this contribution reduced total equity by £365 million. There was also a pre-tax loss of £192 million (€224 million) in
relation to the re-measurement of the Group’s Republic of Ireland pension schemes, primarily as a result of significant movements in underlying actuarial assumptions (2020: pre-tax
gain of £72 million (€81 million)). In line with our policy, the present value of defined benefit obligations and the fair value of plan assets at the end of the reporting period, are
assessed to identify significant market fluctuations and one-off events since the end of the prior financial year.
(5) In line with the announcement in July 2021, NatWest Group plc repurchased and cancelled 310.8 million shares for total consideration of £676.2 million excluding fees. Of the 310.8
million shares bought back, 2.8 million shares were settled and cancelled in January 2022. The nominal value of the share cancellations has been transferred to the capital
redemption reserve with the share premium element to retained earnings.
(6) The redemption of paid-in equity includes a tax credit of £16 million.
(7) Share-based payments includes a tax credit of £10 million.
The accompanying notes on pages 313 to 377, the Accounting policies on pages 307 to 312 and the audited sections of the
Financial review and Risk and capital management sections on pages 84 to 95 and 188 to 285 form an integral part of these
financial statements.

Consolidated cash flow statement for the year ended 31
December 2021
NatWest Group Annual Report and Accounts 2021 305
Financial statements
Strategic report
Governance
Risk and
capital management
Additional information
Financial review
2021
2020 2019
Note
£m
£m £m
Cash flows from operating activities
Operating profit/(loss) before tax from continuing operations
(1) 4,032
(481) 3,983
Operating profit before tax from discontinued operations 279
130 249
Adjustments for:
Impairment (releases)/losses
(1,335)
3,242 696
Amortisation of discounts and premiums of other financial assets
203
267 255
Depreciation and amortisation
923
914 1,220
Change in fair value taken to profit or loss of other financial assets
1,771
(1,474) (280)
Change in fair value taken to profit or loss on other financial liabilities and subordinated
liabilities
(1,083)
962 856
Elimination of foreign exchange differences
2,446
(2,497) 949
Other non-cash items (164)
(2) (272)
Income receivable on other financial assets
(581)
(518) (854)
(Profit)/loss on sale of other financial assets
(118)
(96) 22
(Profit)/loss on sale of subsidiaries and associates (48)
16 (2,224)
Share of (profit)/loss of associates
(216)
30 14
Loss/(profit) on sale of other assets and net assets/liabiltiies
23
(16) (58)
Interest payable on MRELs and subordinated liabilities
964
1,182 1,151
Loss on sale of MRELs and subordinated liabilities
145
324 —
Charges and releases on provisions 478
296 1,243
Defined benefit pension schemes 215
215 188
Net cash flows from trading activities 7,934
2,494 7,138
Decrease/(increase) in trading assets 7,751
4,147 (659)
Decrease/(increase) in derivative assets 59,697
(16,173) (16,680)
Decrease/(increase) in settlement balance assets
156
2,090 (1,459)
(Increase)/decrease in loans to banks (252)
(554) 3,563
Decrease/(increase) in loans to customers
2,721
(33,748) (22,642)
(Increase)/decrease in other financial assets
(128)
221 924
(Increase)/decrease in other assets (57)
8 707
Increase in assets of disposal groups
(9,015)
— —
Increase/(decrease) in banks deposits
5,673
113 (2,804)
Increase in customer deposits
48,071
62,492 8,333
(Decrease)/increase in settlement balance liabilities
(350)
(1,652) 1,003
(Decrease)/increase in trading liabilities
(7,658)
(1,693) 1,599
(Decrease)/increase in derivative liabilities (59,870)
13,826 17,982
Increase/(decrease) in other financial liabilities 938
(1,085) 2,871
Increase/(decrease) in notes in circulation 392
546 (43)
Decrease in other liabilities
(1,463)
(1,723) (2,634)
Changes in operating assets and liabilities
46,606
26,815 (9,939)
Income taxes paid
(856)
(214) (278)
Net cash flows from operating activities (2)
53,684
29,095 (3,079)
For the notes to this table refer to the following page.

Consolidated cash flow statement for the year ended 31 December 2021 continued
NatWest Group Annual Report and Accounts 2021 306
Financial statements
Strategic report
Governance
Risk and capital management
Additional
information
Financial review
2021
2020 2019
Note
£m
£m £m
Cash flows from investing activities
Sale and maturity of other financial assets
16,859
25,952 19,990
Purchase of other financial assets
(10,150)
(18,825) (21,345)
Income received on other financial assets
581
518 854
Net movement in business interests and intangible assets
28
(3,489)
(70) (84)
Sale of property, plant and equipment
165
348 428
Purchase of property, plant and equipment
(901)
(376) (559)
Net cash flows from investing activities
3,065
7,547 (716)
Cash flows from financing activities
Movement in MRELs
2,736
636 1,927
Movement in subordinated liabilities
(3,452)
(2,381) (1,064)
Ordinary shares issued
— 17
Share cancellation
(1,806)
(2) (21)
Dividends paid
(1,016)
(381) (3,429)
Issue of paid-in equity
937
2,218 —
Net cash flows from financing activities
(2,601)
90 (2,570)
Effects of exchange rate changes on cash and cash equivalents
(2,641)
1,879 (1,983)
Net increase/(decrease) in cash and cash equivalents
51,507
38,611 (8,348)
Cash and cash equivalents at 1 January
139,199
100,588 108,936
Cash and cash
equivalents at 31 December
30
190,706
139,199 100,588
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(2) Includes interest received of £9,696 million (2020 - £10,007 million, 2019 - £11,245 million) and interest paid of £1,668 million (2020 - £2,414 million, 2019 - £3,318 million).
The accompanying notes on pages 313 to 377, the Accounting policies on pages 307 to 312 and the audited sections of the
Financial review and Risk and capital management sections on pages 84 to 95 and 188 to 285 form an integral part of these
financial statements.

Accounting policies
NatWest Group Annual Report and Accounts 2021 307
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
This section includes the basis of preparation of the financial statements and the significant accounting policies used to prepare the
financial statements.
Our accounting policies are the specific principles, bases, conventions, rules, and practices we apply in preparing and presenting
the financial statements. Further information is provided where judgment and estimation is applied to critical accounting policies
and key sources of estimation uncertainty.
Future accounting developments details new or amendments to existing accounting standards, when they are effective from and
where the NatWest Group is assessing their impact on future financial statements.
1. Presentation of financial statements
NatWest Group plc is incorporated in the UK and registered in
Scotland. The financial statements are presented in the
functional currency, pounds sterling.
NatWest Group plc’s consolidated financial statements
incorporate the results of NatWest Group plc and the entities it
controls. Control arises when NatWest Group plc has the
power to direct the activities of an entity so as to affect the
return from the entity. Control is assessed by reference to our
ability to enforce our will on the other entity, typically through
voting rights. The consolidated financial statements are
prepared under consistent accounting policies.
Transactions and balances between Group companies are
eliminated in the consolidated financial statements to show only
those transactions and balances external to the NatWest
Group.
The audited financial statements are set out on pages 300 to
394 and the audited sections of Risk and capital management
on pages 97 to 285. The directors have prepared the financial
statements on a going concern basis after assessing the
principal risks, forecasts, projections and other relevant
evidence over the twelve months from the date the financial
statements are approved (see the Report of the directors, page
183) and in accordance with UK adopted International
Accounting Standards (IAS), International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) and IFRS as adopted by the European
Union. The significant accounting policies and related
judgments are set out below.
Except for certain financial instruments as described in
Accounting policies 10 and 15 and investment property, the
financial statements are presented on a historical cost basis.
Accounting policy changes effective 1 January 2021.
The IASB amended IFRS 16 Leases with “COVID-19
amendments on lease modifications – Amendments to IFRS 16
– Leases (IFRS 16)”. The effect of the amendment on NatWest
Group’s financial statements is immaterial.
2. Revenue recognition
Interest income and expense are recognised in the income
statement using the effective interest rate method for: all
financial instruments measured at amortised cost, debt
instruments measured as fair value through other
comprehensive income and the effective part of any related
accounting hedging instruments. Finance lease income is
recognised at a constant periodic rate of return before tax on
the net investment on the lease. Negative interest on financial
assets is presented in interest payable and negative interest on
financial liabilities is presented in interest receivable.
Other interest relating to financial instruments measured at fair
value is recognised as part of the movement in fair value and is
reported in income from trading activities or other operating
income as relevant. Fees in respect of services are recognised
as the right to consideration accrues through the performance
of each distinct service obligation to the customer. The
arrangements are generally contractual and the cost of
providing the service is incurred as the service is rendered. The
price is usually fixed and always determinable.
3. Discontinued operations, Held for sale and Disposal
group
The results of discontinued operations (comprising the post-tax
profit or loss of discontinued operations and the post-tax results
of either the ongoing measurement at fair value less costs to
sell or disposal of the discontinued operation) are excluded
from the results of continuing operations and are presented as
a single amount as profit/(loss) from discontinued operations,
net of tax in the income statement. Comparatives are
represented for the income statement, cash flow statement,
statement of changes in equity and related notes.
An asset or disposal group (assets and liabilities) is classified as
held for sale if NatWest Group will recover its carrying amount
principally through a sale transaction rather than through
continuing use. These are measured at the lower of its
carrying amount or fair value less cost to sell unless scoped out
of IFRS 5 in which case the existing measurement provisions of
IFRS apply. These are presented as single amounts,
comparatives are not represented.
4. Staff costs
Employee costs, such as salaries, paid absences, and other
benefits are recognised over the period in which the employees
provide the related services to NatWest Group. Employees may
receive variable compensation in cash, in deferred cash or debt
instruments of NatWest Group or in ordinary shares of
NatWest Group plc. NatWest Group operates a number of
share-based compensation schemes under which it grants
awards of NatWest Group plc shares and share options to its
employees. Such awards are subject to vesting conditions.
Variable compensation that is settled in cash or debt
instruments is charged to the income statement on a straight-
line basis over the period during which services are provided,
taking account of forfeiture and clawback criteria. The value of
employee services received in exchange for NatWest Group plc
shares and share options is recognised as an expense over the
vesting period, subject to deferral. clawback and forfeiture
criteria with a corresponding increase in equity. The fair value
of the instruments granted is based on market prices at the
grant date.
Defined contribution pension scheme
A scheme where NatWest Group pays fixed contributions and
there is no legal or constructive obligation to pay further
contributions or benefits. Contributions are recognised in the
income statement as employee service costs accrue.
Defined benefit pension scheme
A scheme that defines the benefit an employee will receive on
retirement and is dependent on one or more factors such as
age, salary, and years of service. The net of the recognisable
scheme assets and obligations is reported on the balance sheet
in other assets or other liabilities. The defined benefit obligation
is measured on an actuarial basis. The charge to the income
statement for pension costs (mainly the service cost and the
net interest on the net defined benefit asset or liability) is
recognised in operating expenses.
Actuarial gains and losses (i.e. gains and/or losses on re-
measuring the net defined benefit asset or liability due to
changes in actuarial measurement assumptions) are recognised
in other comprehensive income in full in the period in which
they arise, and not subject to recycling to the income
statement.

Accounting policies continued
NatWest Group Annual Report and Accounts 2021 308
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
The difference between scheme assets and scheme liabilities,
the net defined benefit asset or liability, is recognised on the
balance sheet if the criteria of the asset ceiling test are met.
This requires the net defined benefit surplus to be limited to
the present value of any economic benefits available to
NatWest Group in the form of refunds from the plan or reduced
contributions to it.
NatWest Group will recognise a liability where a minimum
funding requirement exists for any of its defined benefit pension
schemes. This reflects agreed minimum funding and the
availability of a net surplus as determined as described above.
When estimating the liability for minimum funding requirements
NatWest Group plc only include contributions that are
substantively or contractually agreed and do not include
discretionary features, including dividend-linked contributions
5. Intangible assets and goodwill
Intangible assets are identifiable non-monetary assets without
physical substance acquired by NatWest Group are stated at
cost less accumulated amortisation and impairment losses.
Amortisation is a method to spread the cost of such assets over
time to the income statement. This is charged to the income
statement over the assets' estimated useful economic lives
using methods that best reflect the pattern of economic
benefits. The estimated useful economic lives are:
Computer software 3 to 12 years
Other acquired intangibles 5 to 10 years
Expenditure on internally generated goodwill and brands is
charged to the income statement as incurred.
Direct costs relating to the development of internal-use
computer software are reported on the balance sheet after
technical feasibility and economic viability have been
established. These direct costs include payroll, the costs of
materials and services, and directly attributable overheads.
Capitalisation of costs ceases when the software can operate
as intended.
During and after development, accumulated costs are reviewed
for impairment against the benefits that the software is
expected to generate.
Costs incurred prior to the establishment of technical feasibility
and economic viability are expensed to the income statement
as incurred, as are all training costs and general overheads.
The costs of licences to use computer software that are
expected to generate economic benefits beyond one year are
also reported on the balance sheet
Goodwill on the acquisition of a subsidiary is the excess of the
fair value of the consideration paid, the fair value of any
existing interest in the subsidiary and the amount of any non-
controlling interest measured either at fair value or at its share
of the subsidiary’s net assets over the net fair value of the
subsidiary’s identifiable assets, liabilities, and contingent
liabilities.
Goodwill is measured at initial cost less any subsequent
impairment losses. The gain or loss on the disposal of a
subsidiary includes the carrying value of any related goodwill
when such transactions occur.
6. Impairment of non-financial assets
At each balance sheet date, NatWest Group assesses whether
there is any indication that its intangible assets or property,
plant and equipment are impaired. If any such indication exists,
NatWest Group estimates the recoverable amount of the asset
and compares it to its balance sheet value to calculate if an
impairment loss should be charged to the income statement.
The balance sheet value of the asset is reduced by the amount
of the impairment loss. A reversal of an impairment loss on
intangible assets or property, plant and equipment is
recognised in the income statement provided the increased
carrying value is not greater than it would have been had no
impairment loss been recognised.
Goodwill is tested for impairment annually or more frequently if
events or changes in circumstances indicate that it might be
impaired. Impairment losses on goodwill are not reversed
The recoverable amount of an asset that does not generate
cash flows that are independent from those of other assets or
groups of assets, is determined as part of the cash-generating
unit to which the asset belongs. A cash-generating unit is the
smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other
assets or groups of assets. For the purposes of impairment
testing, goodwill acquired in a business combination is allocated
to NatWest Group’s cash-generating units or groups of cash-
generating units expected to benefit from the combination. The
recoverable amount of an asset or cash-generating unit is the
higher of its fair value less cost to sell or its value in use. Value
in use is the present value of future cash flows from the asset
or cash-generating unit discounted at a rate that reflects
market interest rates adjusted for risks specific to the asset or
cash-generating unit that have not been considered in
estimating future cash flows.
7. Foreign currencies
Foreign exchange differences arising on the settlement of
foreign currency transactions and from the translation of
monetary assets and liabilities are reported in income from
trading activities except for differences arising on cash flow
hedges and hedges of net investments in foreign operations.
Non-monetary items denominated in foreign currencies that
are stated at fair value are translated into the functional
currency at the foreign exchange rates ruling at the dates the
values are determined. Translation differences are recognised
in the income statement except for differences arising on non-
monetary financial assets classified as fair value through other
comprehensive income.
Income and expenses of foreign subsidiaries and branches are
translated into sterling at average exchange rates unless these
do not approximate the foreign exchange rates ruling at the
dates of the transactions. Foreign exchange differences arising
on the translation of a foreign operation are recognised in
other comprehensive income. The amount accumulated in
equity is reclassified from equity to the income statement on
disposal of a foreign operation.
8. Provisions and contingent liabilities
NatWest Group recognises a provision for a present obligation
resulting from a past event when it is more likely than not that
it will be required to pay to settle the obligation and the amount
of the obligation can be estimated reliably.
Provision is made for restructuring costs, including the costs of
redundancy, when NatWest Group has a constructive
obligation. An obligation exists when NatWest Group has a
detailed formal plan for the restructuring and has raised a valid
expectation in those affected either by starting to implement
the plan or by announcing its main features.
NatWest Group recognises any onerous cost of the present
obligation under a contract as a provision. An onerous cost is
the unavoidable cost of meeting its contractual obligations that
exceed the expected economic benefits. When NatWest Group
intends to vacate a leasehold property or right of use asset, the
asset would be tested for impairment and a provision may be
recognised for the ancillary contractual occupancy costs, such
as rates.

Accounting policies continued
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Contingent liabilities are possible obligations arising from past
events, whose existence will be confirmed only by uncertain
future events, or present obligations arising from past events
that are not recognised because either an outflow of economic
benefits is not probable, or the amount of the obligation cannot
be reliably measured. Contingent liabilities are not recognised
but information about them is disclosed unless the possibility of
any outflow of economic benefits in settlement is remote.
9. Tax
Tax encompassing current tax and deferred tax is recognised
in the income statement except when taxable items are
recognised in other comprehensive income or equity. Tax
consequences arising from servicing financial instruments
classified as equity are recognised in the income statement in
line with IAS 12.
Current tax is tax payable or recoverable in respect of the
taxable profit or loss for the year arising in the income
statement, other comprehensive income or equity. Provision is
made for current tax at rates enacted, or substantively
enacted, at the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable
in respect of temporary differences between the carrying
amount of an asset or liability for accounting purposes and the
carrying amount for tax purposes. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent their recovery
is probable.
Deferred tax is not recognised on temporary differences that
arise from initial recognition of an asset or a liability in a
transaction (other than a business combination) that at the time
of the transaction affects neither accounting nor taxable profit
or loss. Deferred tax is calculated using tax rates expected to
apply in the periods when the assets will be realised or the
liabilities settled, based on tax rates and laws enacted, or
substantively enacted, at the balance sheet date.
Deferred tax assets and liabilities are offset where NatWest
Group has a legally enforceable right to offset and where they
relate to income taxes levied by the same taxation authority
either on an individual NatWest Group company or on NatWest
Group companies in the same tax group that intend, in future
periods, to settle current tax liabilities and assets on a net basis
or on a gross basis simultaneously.
Accounting for taxes is judgmental and carries a degree of
uncertainty because tax law is subject to interpretation, which
might be questioned by the relevant tax authority. NatWest
Group recognises the most likely current and deferred tax
liability or asset, assessed for uncertainty using consistent
judgments and estimates. Current and deferred tax assets are
only recognised where their recovery is deemed probable, and
current and deferred tax liabilities are recognised at the
amount that represents the best estimate of the probable
outcome having regard to their acceptance by the tax
authorities.
10. Financial instruments
Financial instruments are measured at fair value on initial
recognition on the balance sheet.
Monetary financial assets are classified into one of the following
subsequent measurement categories (subject to business model
assessment and review of contractual cash flow for the
purposes of sole payments of principal and interest where
applicable):
 amortised cost measured at cost using the effective interest
rate method, less any impairment allowance;
 fair value through other comprehensive income (FVOCI)
measured at fair value, using the effective interest rate
method and changes in fair value through other
comprehensive income;
 mandatory fair value through profit or loss (MFVTPL)
measured at fair value and changes in fair value reported in
the income statement; or
 designated at fair value through profit or loss (DFV)
measured at fair value and changes in fair value reported in
the income statement .
Classification by business model reflects how NatWest Group
manages its financial assets to generate cash flows. A business
model assessment helps to ascertain the measurement
approach depending on whether cash flows result from holding
financial assets to collect the contractual cash flows, from
selling those financial assets, or both.
Business model assessment of assets is made at portfolio level,
being the level at which they are managed to achieve a
predefined business objective. This is expected to result in the
most consistent classification of assets because it aligns with
the stated objectives for the portfolio, its risk management,
manager’s remuneration and the ability to monitor sales of
assets from a portfolio.
The contractual terms of a financial asset; any leverage
features; prepayment and extension terms; and triggers that
might reset the effective rate of interest; are considered in
determining whether cash flows are solely payments of
principal and interest.
Certain financial assets may be designated at fair value
through profit or loss (DFV) upon initial recognition if such
designation eliminates, or significantly reduces, accounting
mismatch.
Equity shares are measured at fair value through profit or loss
unless specifically elected as at fair value through other
comprehensive income (FVOCI).
Upon disposal, the cumulative gains or losses in fair value
through other comprehensive income reserve are recycled to
the income statement for monetary assets and non-monetary
assets (equity shares) the cumulative gains or losses are
transferred directly to retained earnings.
Regular way purchases of financial assets classified as
amortised cost are recognised on the settlement date; all other
regular way transactions in financial assets are recognised on
the trade date.
Financial liabilities are classified into one of following
measurement categories:
 amortised cost measured at cost using the effective interest
rate method;
 held for trading measured at fair value and changes in fair
value reported in income statement; or
 designated at fair value through profit or loss measured at
fair value and changes in fair value reported in the income
statement except changes in fair value attributable to the
credit risk component recognised in other comprehensive
income when no accounting mismatch occurs.
11. Impairment: expected credit losses (ECL)
At each balance sheet date each financial asset or portfolio of
financial assets measured at amortised cost or at fair value
through other comprehensive income, issued financial
guarantee and loan commitment (other than those classified as
held for trading) is assessed for impairment. Any change in
impairment is reported in the income statement. Loss
allowances are forward-looking, based on 12-month ECL

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where there has not been a significant increase in credit risk
rating, otherwise allowances are based on lifetime expected
losses.
ECL are a probability-weighted estimate of credit losses. The
probability is determined by the risk of default which is applied
to the cash flow estimates. In the absence of a change in credit
rating, allowances are recognised when there is a reduction in
the net present value of expected cash flows. Following a
significant increase in credit risk, ECL are adjusted from 12
months to lifetime. This will lead to a higher impairment charge.
Judgment is exercised as follows:
 Models – in certain low default portfolios, Basel parameter
estimates are also applied for IFRS 9.
 Non-modelled portfolios , mainly in Private Banking, RBSI
and Lombard, use a standardised capital requirement under
Basel II. Under IFRS 9, they have bespoke treatments for
the identification of significant increase in credit risk.
Benchmark PDs, EADs and LGDs are reviewed annually for
appropriateness. The ECL calculation is based on expected
future cash flows, which is typically applied at a portfolio
level.
 Multiple economic scenarios (MES) – the central, or base,
scenario is most critical to the ECL calculation, independent
of the method used to generate a range of alternative
outcomes and their probabilities.
 Significant increase in credit risk - IFRS 9 requires that at
each reporting date, an entity shall assess whether the
credit risk on an account has increased significantly since
initial recognition. Part of this assessment requires a
comparison to be made between the current lifetime PD
(i.e. the current probability of default over the remaining
lifetime) with the equivalent lifetime PD as determined at
the date of initial recognition.
On restructuring where a financial asset is not derecognised,
the revised cash flows are used in re-estimating the credit loss.
Where restructuring causes derecognition of the original
financial asset, the fair value of the replacement asset is used
as the closing cash flow of the original asset.
Where in the course of the orderly realisation of a loan, it is
exchanged for equity shares or property, the exchange is
accounted for as the sale of the loan and the acquisition of
equity securities or investment property. Where NatWest
Group’s acquired interest is in equity shares, relevant policies
for control, associates and joint ventures apply.
Impaired financial assets are written off and therefore
derecognised from the balance sheet when NatWest Group
concludes that there is no longer any realistic prospect of
recovery of part, or all, of the loan. For financial assets that are
individually assessed for impairment, the timing of the write-off
is determined on a case-by-case basis. Such financial assets
are reviewed regularly and write-off will be prompted by
bankruptcy, insolvency, re-negotiation, and similar events.
The typical time frames from initial impairment to write-off for
NatWest Group’s collectively assessed portfolios are:
 Retail mortgages: write-off usually occurs within five years,
or earlier, when an account is closed, but can be longer
where the customer engages constructively;
 Credit cards: the irrecoverable amount is typically written
off after twelve arrears cycles or at four years post default
any remaining amounts outstanding are written off;
 Overdrafts and other unsecured loans: write-off occurs
within six years;
 Commercial loans: write-offs are determined in the light of
individual circumstances; and Business loans are generally
written off within five years.
12. Derecognition
A financial asset is derecognised (removed from the balance
sheet) when the contractual right to receive cash flows from
the asset has expired or when it has been transferred and the
transfer qualifies for derecognition. Conversely, an asset is not
derecognised in a contract under which NatWest Group retains
substantially all the risks and rewards of ownership.
A financial liability is removed from the balance sheet when the
obligation is paid, or is cancelled, or expires. Cancellation
includes the issuance of a substitute instrument on substantially
different terms.
13. Netting
Financial assets and financial liabilities are offset, and the net
amount presented on the balance sheet when, and only when,
NatWest Group currently has a legally enforceable right to set
off the recognised amounts and it intends either to settle on a
net basis or to realise the asset and settle the liability
simultaneously. NatWest Group is party to a number of
arrangements, including master netting agreements, that give it
the right to offset financial assets and financial liabilities, but
where it does not intend to settle the amounts net or
simultaneously, the assets and liabilities concerned are
presented separately on the balance sheet.
14. Capital instruments
NatWest Group classifies a financial instrument that it issues as
a liability if it is a contractual obligation to deliver cash or
another financial asset, or to exchange financial assets or
financial liabilities on potentially unfavourable terms and as
equity if it evidences a residual interest in the assets of NatWest
Group after the deduction of liabilities. Incremental costs and
related tax that are directly attributable to an equity
transaction are deducted from equity.
The consideration for any ordinary shares of NatWest Group
plc purchased by NatWest Group (known as treasury shares or
own shares held) is deducted from equity. On the cancellation
of treasury shares their nominal value is removed from equity
and any excess of consideration over nominal value is treated
in accordance with the capital maintenance provisions of the
Companies Act 2006.
On the sale or re-issue of treasury shares the consideration
received and related tax are credited to equity, net of any
directly attributable incremental costs.
15. Derivatives and hedging
Derivatives are reported on the balance sheet at fair value.
NatWest Group uses derivatives as part of its trading activities,
to manage its own risk such as interest rate, foreign exchange,
or credit risk or in certain customer transactions. Not all
derivatives used to manage risk are in hedge accounting
relationships (an IFRS method to reduce accounting mismatch
from changes in the fair value of the derivatives reported in the
income statement).
Gains and losses arising from changes in the fair value of
derivatives that are not in hedge relationships are recognised in
the income statement in Income from trading activities except
for gains and losses on those derivatives that are managed
together with financial instruments designated at fair value;
these gains and losses are included in Other operating income.
Hedge accounting
NatWest Group enters into three types of hedge accounting
relationships (see later)). Hedge accounting relationships are
designated and documented at inception in line with the
requirements of IAS 39 Financial instruments – Recognition and
Measurement. The documentation identifies the hedged item,
the hedging instrument and details of the risk that is being

Accounting policies continued
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hedged and the way in which effectiveness will be assessed at
inception and during the period of the hedge.
Fair value hedge - the gain or loss on the hedging instrument
and the hedged item attributable to the hedged risk is
recognised in the income statement. Where the hedged item is
measured at amortised cost, the balance sheet amount of the
hedged item is also adjusted.
Cash flow hedge - the effective portion of the designated hedge
relationship is recognised in other comprehensive income and
the ineffective portion in the income statement. When the
hedged item (forecasted cash flows) results in the recognition
of a financial asset or financial liability, the cumulative gain or
loss is reclassified from equity to the income statement in the
same periods in which the hedged forecasted cash flows affect
the income statement.
Hedge of net investment in a foreign operation - In the hedge
of a net investment in a foreign operation, the effective portion
of the designated hedge relationship is recognised in other
comprehensive income. Any ineffective portion is recognised in
profit or loss. Non-derivative financial liabilities as well as
derivatives may be designated as a hedging instrument in a net
investment hedge.
Discontinuation of hedge accounting
Hedge accounting is discontinued if the hedge no longer meets
the criteria for hedge accounting i.e. the hedge is not highly
effective in offsetting changes in fair value or cash flows
attributable to the hedged risk, consistent with the documented
risk management strategy; the hedging instrument expires or is
sold, terminated or exercised; or if hedge designation is
revoked.
For fair value hedging any cumulative adjustment is amortised
to the income statement over the life of the hedged item.
Where the hedge item is no longer on the balance sheet the
adjustment to the hedged item is reported in the income
statement.
For cash flow hedging the cumulative unrealised gain or loss is
reclassified from equity to the income statement when the
hedged cash flows occur or, if the forecast transaction results
in the recognition of a financial asset or financial liability, when
the hedged forecast cash flows affect the income statement.
Where a forecast transaction is no longer expected to occur,
the cumulative unrealised gain or loss is reclassified from equity
to the income statement immediately.
For net investment hedging on disposal or partial disposal of a
foreign operation, the amount accumulated in equity is
reclassified from equity to the income statement.
16. Investment in Group undertakings
NatWest Group plc’s investments in its Group undertakings
(subsidiaries) are stated at cost less any impairment.
Critical accounting policies and key sources of estimation
uncertainty
The reported results of NatWest Group are sensitive to the
accounting policies, assumptions and estimates that underlie
the preparation of the financial statements. The accounting
standards used in the preparation of the financial statements
(see presentation of financial statements above) require the
directors, in preparing NatWest Group's financial statements, to
select suitable accounting policies, apply them consistently and
make judgments and estimates that are reasonable and
prudent. In the absence of accounting guidance, standards
used in the preparation of the financial statements require the
directors to develop and apply an accounting policy that results
in relevant and reliable information in the light of the
requirements and guidance in IFRS dealing with similar and
related issues and the IASB's ’Conceptual Framework for
Financial Reporting’.
The judgments and assumptions involved in NatWest Group's
accounting policies that are considered by the Board to be the
most important to the portrayal of its financial condition are
noted below. The use of estimates, assumptions or models that
differ from those adopted by NatWest Group would affect its
reported results. Estimation uncertainty continues to be
affected by the COVID-19 pandemic. The COVID-19 pandemic
continued to cause significant economic and social disruption
during 2021. Key financial estimates are based on
management's latest five-year revenue and cost forecasts.
Measurement of goodwill, deferred tax and expected credit
losses are highly sensitive to reasonably possible changes in
those anticipated conditions. Other reasonably possible
assumptions about the future include a prolonged financial
effect of the COVID-19 pandemic on the economy of the UK
and other countries or greater economic effect as countries
and companies implement plans to counter climate risks.
How Climate risk affects our accounting judgments and
estimates
NatWest Group makes use of reasonable and supportable
information to make accounting judgments and estimates. This
includes information about the observable effects of the
physical and transition risks of climate change on the current
creditworthiness of borrowers, asset values and market
indicators. It also includes the effect on NatWest Group’s
competitiveness and profitability. Many of the effects arising
from climate change will be longer term in nature, with an
inherent level of uncertainty, and have limited effect on
accounting judgments and estimates for the current period.
Some physical and transition risks can manifest in the shorter
term. The following items represent the most significant effects:
 The classification of financial instruments linked to climate,
or other sustainability indicators: consideration is given to
whether the effect of climate related terms prevent the
instrument cashflows being solely payments of principal and
interest.
 The measurement of expected credit loss considers the
ability of borrowers to make payments as they fall due.
Future cashflows are discounted, so long dated cashflows
are less likely to affect current expectations on credit loss.
NatWest Group’s assessment of sector specific risks, and
whether additional adjustments are required, include
expectations on the ability of those sectors to meet their
financing needs in the market. Changes in credit
stewardship and credit risk appetite that stem from climate
considerations, such as oil and gas, will directly affect our
positions.
 The assessment of asset impairment and deferred tax are
based upon value in use. This represents the value of future
cashflows and uses the Group’s five-year forecast and the
expectation of long term economic growth beyond this
period. The five-year forecast takes account of
management’s current expectations on competitiveness
and profitability, including near term effects of climate
transition risk. The long term growth rate reflects external
indicators which will include market expectations on climate
risk. NatWest Group did not consider any additional
adjustments to this indicator.
 The use of market indicators as inputs to fair value is
assumed to include current information and knowledge
regarding the effect of climate risk.

Accounting policies continued
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Changes in judgments and assumptions could result in a
material adjustment to those estimates in the next reporting
periods. Consideration of this source of estimation uncertainty
has been set out in the notes below (as applicable).
Critical accounting policy
Note
Deferred tax
7
Fair value
-
financial instruments
11
Loan impairment provisions
15
Goodwill
17
Provisions for liabilities and charges
21
Future accounting developments
International Financial Reporting Standards
Effective 1 January 2022
 Onerous Contracts – Cost of Fulfilling a Contract
(Amendments to IAS 37);
 Property, Plant and Equipment: Proceeds before Intended
Use (Amendments to IAS 16);
 Reference to Conceptual Framework (Amendments to IFRS
3); and
 Fees in the “10 per cent” test for Derecognition of Financial
Liabilities (Amendments to IFRS 9).
Other new standards and amendments that are effective for
annual periods beginning after 1 January 2023, with earlier
application permitted, are set out below.
Effective 1 January 2023
 IFRS 17 Insurance Contracts (Amendments to IFRS 17
Insurance Contracts);
 Classification of Liabilities as Current or Non-current
(Amendments to IAS 1);
 Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12);
 Definition of Accounting Estimates (Amendments to IAS 8);
and
 Disclosure of Accounting Policies (Amendments to IAS 1
and IFRS Practice Statement 2).
NatWest Group is assessing the effect of adopting these
standards and amendments on its financial statements but does
not expect the effect to be material.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 313
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1 Net interest income
Net interest income is the difference between the interest NatWest Group earns from its interest-bearing assets, such as loans,
balances with central banks and other financial assets, and the interest paid on its interest-bearing liabilities, such as deposits and
subordinated liabilities.
Interest receivable on financial instruments classified as amortised cost, debt instruments classified as FVOCI and the interest
element of the effective portion of any designated hedging relationships are measured using the effective interest rate, which
allocates the interest receivable or interest payable over the expected life of the financial instrument at the rate that exactly
discounts all estimated future cash flows to equal the financial instrument's initial carrying amount. Calculation of the effective
interest rate takes into account fees payable or receivable that are an integral part of the financial instrument’s yield, premiums or
discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are
considered when estimating future cash flows. Negative interest on financial assets is presented in interest payable and negative
interest on financial liabilities is presented in interest receivable.
Included in interest receivable is finance lease income which is recognised at a constant periodic rate of return before tax on the
net investment.
For accounting policy information see Accounting policies note 2.
2021
2020 (1)
2019 (1)
Continuing operations
£m
£m
£m
Balances at central banks
99 90
321
Loans to banks - amortised cost
346 246
405
Loans to customers - amortised cost
8,615
8,979
9,547
Other financial assets
253
483
854
Interest receivable
9,313
9,798
11,127
Balances with banks 204
144
319
Customer deposits 556
911
1,256
Other financial liabilities
670
846
1,102
Subordinated liabilities
267
402
483
Internal funding of trading businesses
2
19
168
Interest payable
1,699
2,322
3,328
Net interest income
7,614
7,476
7,799
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 314
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2 Non-interest income
There are three main categories of non-interest income: net fees and commissions, income from trading activities, and other
operating income.
Net fees and commissions is the difference between fees received from customers for services provided by Natwest Group, such as
credit card annual fees, mortgage arrangement fees, underwriting fees, payment services, brokerage fees, trade finance,
investment management fees, trustee and fiduciary services, and fees incurred in the provision of those services, such as credit
card interchange fees, customer incentives, loan administration, foreign currency transaction charges, brokerage fees, and
mortgage valuation reports.
Income from trading activities is earned from short-term financial assets and financial liabilities to either make a spread between
purchase and sale price or held to take advantage of movements in prices and yields.
Other operating income includes revenue from other operating activities which are not related to the principal activities of the
company, such as share of profit or loss from associate, operating lease income, the profit or loss on the sale of a subsidiary or
property, plant and equipment, profit or loss on own debt, and changes in the fair value of financial assets and liabilities designated
at fair value through profit or loss.
For accounting policy information see Accounting policies note 2.
2021
2020 (1)
2019 (1)
Continuing operations
£m
£m
£m
Net fees and commissions (2)
2,124
2,000
2,497
Income from trading activities
Foreign exchange
364
569
448
Interest rate
(130)
541
532
Credit
83
3
32
Changes in fair value of own debt and derivative liabilities attributable to own credit risk
- debt securities in issue
6
(24)
(60)
-
derivative liabilities
—
—
(20)
Equities, commodities and other
—
36
—
323
1,125
932
Other operating income
Loss on redemption of own debt
(145)
(324)
—
Operating lease and other rental income
225
232
250
Changes in fair value of financial assets and liabilities designated at fair value
(8)
(54)
(17)
through profit or loss
(3)
Changes in fair value of other financial assets at fair value through profit or loss (4)
5
2
58
Hedge ineffectiveness
25
24
48
(Loss)/profit on disposal of amortised cost assets
(15)
(18)
42
Profit/(loss) on disposal of fair value through other comprehensive income assets
117
96
(22)
(Loss)/profit on sale of property, plant and equipment
(5)
(30)
13
58
Share of profits/(losses) of associated entities
216
(30)
(14)
Profit/(loss) on disposal of subsidiaries and associates (6)
48
(16)
2,224
Other income (7,8)
13
(18)
132
451
(93)
2,759
2,898
3,032
6,188
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
(2) Refer to Note 4 for further analysis.
(3) Including related derivatives.
(4) Includes instruments that have failed Solely payments of principal and interest testing under IFRS 9.
(5) Includes £44 million loss on the purchase of freeholds for properties where the Group was the primary leaseholder.
(6) 2019 includes a gain of £444 million (€523 million), a legacy liability release of £256 million and an FX recycling gain of £290 million on completion of the Alawwal bank merger in
June 2019; In 2019, £1,102 million of FX recycling gains arising on the liquidation of RFS Holdings BV and £67 million in relation to a capital repayment by UBIDAC. The recycling
gains and capital repayment have been calculated using the step-by-step method in IFRIC 16 and by reference to the proportion of equity applied to the FX translation reserve.
(7) Includes income from activities other than banking.
(8) 2020 includes £58 million loss on acquisition of a £3.0 billion prime UK mortgages portfolio from Metro Bank plc.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 315
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3 Operating expenses
Operating expenses are expenses NatWest Group incurs for operation of the business such as salaries, bonus awards, pension
costs, depreciation and other administrative expenses. Operating expenses are expenses NatWest Group incurs in the running of
the business such as all personnel expenditure (for example salaries, bonus awards, pension costs and social security costs),
premises and equipment costs (that arise from the occupation of premises and the use of equipment), depreciation and
amortisation and other administrative expenses.
For accounting policy information see Accounting policies note 4.
2021
2020 (1)
2019 (1)
Continuing operations
£m
£m
£m
Salaries 2,295
2,494
2,477
Bonus awards
267
232
299
Temporary and contract costs
240
258
401
Social security costs
300
316
296
Pension costs
354
340
301
-
defined benefit schemes (see Note 5)
215
215
188
- defined contribution schemes
139
125
113
Other
220
238
202
Staff costs
3,676
3,878
3,976
Premises and equipment
(2)
1,133
1,222
1,258
UK bank levy (3)
99
167
134
Depreciation and amortisation (4,5)
923
913
1,218
Other administrative expenses (6)
1,927
1,678
2,694
Administrative expenses
4,082
3,980
5,304
7,758
7,858
9,280
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
(2) 2021 includes cost of £33 million including accelerated depreciation of £41 million (2020 - £144 million including £71 million accelerated depreciation; 2019 - £161 million including
£40 million accelerated depreciation) in relation to the planned reduction of the property portfolio (2021 – freehold £3 million; leasehold £30 million; 2020 - freehold £1 million;
leasehold £143 million; 2019 – freehold £4 million; leasehold £157 million).
(3) 2019 includes a rebate of £31 million relating to prior periods.
(4) 2021 includes a £58 million charge relating to the reduction in property portfolio, leasehold £48 million and freehold £10 million (2020 - £107 million charge, leasehold £86 million and
freehold £21 million; 2019 - £287 million charge, leasehold £37 million and freehold £250 million).
(5) Includes impairment of goodwill of £85 million.
(6) Includes litigation and conduct costs, net of amounts recovered. Refer to Notes 21 and 27 for further details.
The average number of persons employed, rounded to the nearest hundred, during the year, excluding temporary staff, was
59,200 (2020 - 61,400; 2019 - 64,200). The average number of temporary employees during 2021 was 2,500 (2020 – 3,200; 2019 -
4,100).
The number of persons employed at 31 December, excluding temporary staff, by reportable segment, was as follows:
Continuing operations
2021
2020 2019
Retail Banking
15,800
17,200 19,600
Private Banking
1,900
1,900 1,700
Commercial Banking 8,400
9,700 9,700
RBS International 1,400
1,500 1,600
NatWest Markets
1,600
2,100 5,000
Central items & other
27,000
24,900 22,600
Ulster Bank RoI (1) 1,700
1,900 2,000
Total
57,800
59,200 62,200
UK
40,600
42,500 44,600
USA 300
300 400
India 13,500
13,200 13,500
Poland
1,400
1,200 1,300
Republic of Ireland
1,200
1,400 1,500
Rest of the World
800
600 900
Total
57,800
59,200 62,200
(1) Total number of persons employed in Ulster Bank RoI of 2,400 (2020 – 2,600; 2019 – 2,700) includes 700 people employed in
discontinued operations at 31 December 2021 (2020 – 700; 2019 – 700).

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 316
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
3 Operating expenses continued
Share-based payments
As described in the Remuneration report, NatWest Group grants share-based awards to employees principally on the following
bases:
Award plan Eligible employees Nature of award Vesting conditions (1) Settlement
Sharesave UK, Channel Islands,
Gibraltar, Isle of Man,
Poland and India.
Option to buy shares
under employee savings
plan
Continuing employment or
leavers in certain circumstances
2022 to 2026
Deferred performance
awards
All
Awards of ordinary shares
and conditional shares
Continuing employment or
leavers in certain circumstances
2022 to 2028
Long-term incentives (2) Senior employees Awards of ordinary shares
and conditional shares
Continuing employment or
leavers in certain circumstances
and/or satisfaction of the pre-
vest assessment and underpins
2022 to 2028
(1) All awards have vesting conditions which may not be met.
(2) Long-term incentives include buy-out awards offered to compensate certain new hires for the loss of forfeited awards from their previous employment. All awards are granted
under the Employee Share Plan.
The fair value of Sharesave options granted in 2021 was determined using a pricing model that included: expected volatility of
shares determined at the grant date based on historical volatility over a period of up to five years; expected option lives that equal
the vesting period; expected dividends on equity shares; and risk-free interest rates determined from UK gilts with terms matching
the expected lives of the options.
The exercise price of options and the fair value on granting awards of fully paid shares is the average market price over the five
trading days (three trading days for Sharesave) preceding grant date. When estimating the fair value of the award, the number of
shares granted, and the prevailing market price (as defined on pages 146-147) are used. The fair value of the award is recognised
as services are provided over the vesting period.
Sharesave
2021
2020 2019
Average
Shares
Average
Shares
Average
Shares
exercise price
under option
exercise price
under option
exercise price
under option
£
(million)
£
(million)
£
(million)
At 1 January
1.64
96
2.01 84 2.18 75
Granted
1.80
24
1.12 35 1.78 25
Exercised
1.76
(10)
1.83 — 2.83 (4)
Cancelled
2.02
(15)
2.20 (23) 2.25 (12)
At 31 December
1.61
95
1.64 96 2.01 84
Options are exercisable within six months of vesting; 6.0 million options were exercisable at 31 December 2021 (2020 – 6.3 million;
2019 – 3.2 million). The weighted average share price at the date of exercise of options was £2.19 (2020 - £1.57; 2019 - £2.49). At
31 December 2021, exercise prices ranged from £1.12 to £2.27 (2020 - £1.12 to £2.27; 2019 - £1.68 to £2.91) and the remaining
average contractual life was 2.1 years (2020 - 2.3 years; 2019 – 2.7 years). The fair value of options granted in 2021 was £17
million (2020 - £8 million; 2019 - £11 million).
Deferred performance awards
2021
2020 2019
Value at
Shares
Value at
Shares
Value at
Shares
grant
awarded
grant
awarded
grant
awarded
£m (million)
£m (million) £m
(million)
At 1
January
169 77
196 76 233
92
Granted 61 32
109 67 110
42
Forfeited (10) (5)
(5) (2) (10)
(4)
Vested
(88) (39)
(131) (64) (137)
(54)
At 31 December 132 65
169 77 196
76
The awards granted in 2021 vest in equal tranches on their anniversaries, predominantly over three years.
Long
-
term incentives
2021
2020 2019
Value at
Shares
Options
Value at
Shares
Options
Value at
Shares
Options
grant
awarded
over shares
grant
awarded
over shares
grant
awarded
over
shares
£m
(million)
(million)
£m
(million)
(million)
£m
(million)
(million)
At 1 January
50 24
—
63
25
—
85
32 2
Granted
6 3
—
14
10
—
15
6 —
Vested/exercised
(12) (6)
—
(17)
(7)
—
(12)
(4) —
Lapsed
—
—
—
(10)
(4)
—
(25)
(9) (2)
At 31 December 44 21
—
50
24
—
63
25 —
The market value of awards vested/exercised in 2021 was £13 million (2020 - £13 million; 2019 - £10 million). There are no vested
options of shares exercisable up to 2022 (2020 - nil; 2019 - nil).

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 317
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
3 Operating expenses continued
Bonus awards
The following tables analyse NatWest Group's bonus awards for 2021.
2021
2020 Change
£m
£m %
Non-deferred cash awards (1) 38
35 9%
Deferred cash awards 214
111 93%
Deferred share awards 49
60 (18%)
Total deferred bonus awards 263
171 54%
Total bonus awards
(2) 301
206 46%
Bonus awards as a % of operating profit before tax (3) 7%
(83%)
Proportion of bonus awards that are deferred
87%
83%
of which
- deferred cash awards
81%
65%
-
deferred share awards
19%
35%
Reconciliation of bonus awards to income statement charge
2021
2020 2019
£m
£m £m
Bonus awarded
301
206 307
Less: deferral of charge for amounts awarded for current year
(99)
(77) (110)
Income statement charge for amounts awarded in current year
202
129 197
Add: current year charge for amounts deferred from prior years 80
114 127
Less: forfeiture of amounts deferred from prior years (15)
(11) (25)
Income statement charge for amounts deferred from prior years 65
103 102
Income statement charge for bonus awards (2) 267
232 299
(1) Non-deferred cash awards are limited to £2,000 for all employees.
(2) Excludes other performance related compensation.
(3) Operating profit before tax and bonus expense.
Actual
Expected
Year in which income statement charge is expected to
be taken for deferred bonus awards
2023
2019
2020
2021
2022
and beyond
£m £m
£m
£m
£m
Bonus awards deferred from 2019 and earlier
127 114
28
11 6
Bonus awards deferred from 2020
— —
52
8 7
Less: forfeiture of amounts deferred from prior years
(25) (11)
(15)
— —
Bonus awards for 2021 deferred
— —
—
86 13
102 103
65
105 26

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 318
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
4 Segmental analysis
NatWest Group analyses its performance between the different operating segments of the Group. Ulster Bank RoI is presented
separately from the Go-forward group (refer to the split below) to reflect the strategic decision on the phased withdrawal from the
Republic of Ireland announced in February 2021. This is consistent with internal financial reporting and how senior management
assesses the performance of each operating segment.
The directors manage NatWest Group primarily by class of business and present the segmental analysis on that basis. This includes
the review of net interest income for each class of business. Interest receivable and payable for all reportable segments is therefore
presented net. Segments charge market prices for services rendered between each other; funding charges between segments are
determined by NatWest Group Treasury, having regard to commercial demands. The segment performance measure is operating
profit/(loss).
Reportable operating segments:
The reportable operating segments are as follows:
Retail Banking serves personal customers in the UK and includes Ulster Bank customers.
Private Banking serves UK-connected high net worth individuals and their business interests.
Commercial Banking serves start-up, SME, commercial, corporate and institutional customers in the UK.
RBS International (RBSI) serves retail, commercial, and corporate customers in the Channel Islands, Isle of Man and Gibraltar, and
financial institution clients in those same locations in addition to the UK and Luxembourg.
NatWest Markets (NWM) helps NatWest Group’s corporate and institutional customers manage their financial risks safely and
achieve their short-term and long-term sustainable financial goals.
Central items & other includes corporate functions, such as NatWest Group Treasury, finance, risk management, compliance,
legal, communications and human resources. Central functions manages NatWest Group capital resources and NatWest Group-
wide regulatory projects and provides services to the reportable segments. Balances in relation to litigation issues and the
international private banking business are included in Central items in the relevant periods.
Ulster Bank RoI serves individuals and businesses in the Republic of Ireland (RoI).
Allocation of central balance sheet items
NatWest Group allocates all central costs relating to Services and Functions to the business using appropriate drivers; these are
reported as indirect costs in the segmental income statements. Assets and risk-weighted assets held centrally, mainly relating to
NatWest Group Treasury, are allocated to the business using appropriate drivers .
Go-forward group
Total
Central excluding
Retail
Private
Commercial
RBS
NatWest
items
Ulster
Ulster
Banking Banking
Banking
International
Markets
& other
Bank RoI Bank RoI Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
Continuing operations
Net interest income 4,074 480
2,582
383
9
(14) 7,514 100 7,614
Net fees and commissions
377 258
1,158
124
158
(16) 2,059 65 2,124
Other non-interest income
(6) 78
135
41
248
215 711 63 774
Total income
4,445 816
3,875
548
415
185 10,284 228 10,512
Depreciation and amortisation
(85) —
(146)
(13)
(14)
(665) (923)
—
(923)
Other operating expenses
(2,428) (520)
(2,208)
(229)
(1,147)
179 (6,353) (482) (6,835)
Impairment releases
36 54
1,073
52
35
—
1,250 28 1,278
Operating profit/(loss)
1,968 350
2,594
358
(711)
(301) 4,258 (226) 4,032
2020 (2)
Continuing operations
Net interest income
3,868 489 2,740 371 (57) (57)
7,354
122 7,476
Net fees and commissions
379 257 1,110 94 99 (16)
1,923
77 2,000
Other non-interest income
(66) 17 108 32 1,081 (163)
1,009
23 1,032
Total income
4,181 763 3,958 497 1,123 (236)
10,286
222 10,508
Depreciation and amortisation
— (8) (149) (17) (16) (723)
(913)
— (913)
Other operating expenses
(2,540) (447) (2,281) (274) (1,294) 332
(6,504)
(441) (6,945)
Impairment losses
(792) (100) (1,927) (107) (40) (26)
(2,992)
(139) (3,131)
Operating profit/(loss)
849 208 (399) 99 (227) (653)
(123)
(358) (481)

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 319
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
4 Segmental analysis continued
Go
-
forward group
Total
Central
excluding
Retail
Private
Commercial
RBS
NatWest
items
Ulster
Ulster
Banking Banking Banking International Markets & other (1) Bank RoI
Bank RoI
Total
2019
(2)
£m
£m
£m
£m
£m
£m
£m
£m
£m
Continuing operations
Net interest income
4,130 521 2,842
478
(188) (136) 7,647
152
7,799
Net fees and commissions
696 226 1,312
106
85 (23) 2,402
95
2,497
Other non-interest income
40 30 164
26
1,445 1,932 3,637
54
3,691
Total income
4,866 777 4,318
610
1,342 1,773 13,686
301
13,987
Depreciation and amortisation
— (4) (142)
(10)
(12) (1,050) (1,218)
—
(1,218)
Operating expenses
(3,618) (482) (2,458)
(254)
(1,406) 666 (7,552)
(510)
(8,062)
Impairment losses
(393) 6 (391)
(2)
51 (1) (730)
6
(724)
Operating profit/(loss)
855 297 1,327
344
(25) 1,388 4,186
(203)
3,983
(1) 2019 predominantly related to strategic disposals in Functions.
(2) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
Total revenue
(2)
Go
-
forward group
Total
Central
excluding
Ulster
Retail
Private
Commercial
RBS
NatWest
items &
Ulster
Bank
Banking
Banking
Banking
International
Markets
Other
Bank RoI
RoI
Total
Year ended 31 December 2021
£m £m £m £m £m £m £m £m £m
Continuing operations
External
5,419 792 3,751 594 823 1,109 12,488 297 12,785
Inter-segmental
14 127 87 6 30 (265) (1) 1
—
Total
5,433 919 3,838 600 853 844 12,487 298 12,785
Year ended 31 December 2020 (1)
Continuing operations
External
5,386 702 3,734 505 1,984 961 13,272 280 13,552
Inter-segmental
39 163 64 3 13 (284) (2) 2 —
Total
5,425 865 3,798 508 1,997 677 13,270 282 13,552
Year ended 31 December 2019 (1)
Continuing operations
External
6,161 703 4,347 639 2,516 3,447 17,813 350 18,163
Inter-segmental
62 241 139 19 558 (1,025) (6) 6 —
Total
6,223 944 4,486 658 3,074 2,422 17,807 356 18,163
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
(2) Total revenue comprises interest receivable, fees and commissions receivable, income from trading activities and other operating income.
Total income
Go
-
forward group
Total
Central
excluding
Retail
Private
Commercial
RBS
NatWest
items &
Ulster
Ulster
Banking
Banking
Banking
International
Markets
Other
Bank RoI
Bank RoI
Total
Year ended 31 December 2021 £m £m £m £m £m £m £m £m £m
Continuing operations
External
4,433 801 3,939 548 554 —
10,275
237 10,512
Inter-segmental
12 15 (64)
—
(139) 185
9
(9)
—
Total
4,445 816 3,875 548 415 185
10,284
228 10,512
Year ended 31 December 2020 (1)
Continuing operations
External
4,157 700 4,065 500 1,395 (537)
10,280
228 10,508
Inter-segmental
24 63 (107) (3) (272) 301
6
(6) —
Total
4,181 763 3,958 497 1,123 (236)
10,286
222 10,508
Year ended 31 December 2019 (1)
Continuing operations
External
4,834 631 4,814 603 1,664 1,145
13,691
296 13,987
Inter-segmental
32 146 (496) 7 (322) 628
(5)
5 —
Total
4,866 777 4,318 610 1,342 1,773
13,686
301 13,987
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 320
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
4 Segmental analysis continued
Go-forward group
Total
Central
excluding
Retail
Private
Commercial
RBS
NatWest
items
Ulster
Ulster
Analysis of net fees and commissions
Banking Banking Banking International Markets
& other
Bank RoI Bank RoI Total
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
Continuing operations
Fees and commissions receivable
-
Payment services
306 35 538 19 20 — 918 53 971
- Credit and debit card fees
344 10 147 2
—
— 503 19 522
- Lending and financing
13 10 515 54 74 — 666 4 670
- Brokerage
48 6
—
1 41 — 96
—
96
- Investment management, trustee
and fiduciary services (1)
3 230
—
45
—
— 278 2 280
-
Underwriting fees
—
—
—
—
127 — 127
—
127
- Other
—
35 105 4
—
(112) 32
—
32
Total
714 326 1,305 125 262 (112) 2,620 78 2,698
Fees and commissions payable
(337) (68) (147) (1) (104) 96 (561) (13) (574)
Net fees and commissions
377 258 1,158 124 158 (16) 2,059 65 2,124
2020 (2)
Continuing operations
Fees and commissions receivable
- Payment services
264 28 507 18 18 — 835 57 892
- Credit and debit card fees
299 9 129 2 — — 439 21 460
- Lending and financing
42 7 505 34 86 — 674 4 678
- Brokerage
54 6 — 1 93 — 154 1 155
- Investment management, trustee
and fiduciary services
(1)
3 225 1 38 2 — 269 2 271
- Underwriting fees
— — — — 183 — 183 — 183
- Other
1 26 82 3 4 (33) 83 — 83
Total
663 301 1,224 96 386 (33) 2,637 85 2,722
Fees and commissions payable
(284) (44) (114) (2) (287) 17 (714) (8) (722)
Net fees and commissions
379 257 1,110 94 99 (16) 1,923 77 2,000
2019 (2)
Fees and commissions receivable
- Payment services
292 33 659 27 24 — 1,035 60 1,095
- Credit and debit card fees
427 12 154 2 — — 595 28 623
- Lending and financing
356 3 510 36 85 — 990 4 994
- Brokerage
55 5 — — 96 — 156 8 164
-
Investment management, trustee
and fiduciary services
44 186 3 41 1 — 275 3 278
- Underwriting fees
— — — — 170 — 170 — 170
- Other
2 27 90 2 69 (173) 17 4 21
Total
1,176 266 1,416 108 445 (173) 3,238 107 3,345
Fees and commissions payable
(480) (40) (104) (2) (360) 150 (836) (12) (848)
Net fees and commissions
696 226 1,312 106 85 (23) 2,402 95 2,497
(1) Comparisons with prior periods are impacted by the transfer of the Private Client Advice business to Private Banking from 1 January 2020.
(2) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
2021
2020
2019
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
£m
£m
£m
£m
£m
£m
Retail Banking 209,973 192,715
197,618 178,617 182,305 153,999
Private Banking 29,854 39,388
26,206 32,457 23,304 28,610
Commercial Banking
184,564 184,890
187,413 174,251 165,399 140,863
RBS International
40,578 38,436
33,984 31,989 31,738 30,330
NatWest Markets
200,576 188,431
270,147 254,098 263,885 246,907
Central items & other
93,614 77,308
57,503 61,262 31,023 57,762
Total excluding Ulster Bank RoI
759,159 721,168
772,871 732,674 697,654 658,471
Ulster Bank RoI
22,833 19,021
26,620 22,993 25,385 21,012
Total
781,992 740,189
799,491 755,667 723,039 679,483

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 321
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
4 Segmental analysis continued
Segmental analysis of goodwill
There was an £85 million impairment of goodwill in Retail banking during 2021. The total carrying value of goodwill at 31
December was £5,522 million, comprised of Retail Banking £2,607 million; Commercial Banking £2,606 million; Private Banking £9
million; and RBS International £300 million. (2020 – total carrying value was £5,607 million comprising of Retail Banking £2,692
million; Commercial Banking £2,606 million; Private Banking £9 million; and RBS International £300 million). See note 17 for further
details.
Geographical segments
The geographical analysis in the tables below has been compiled on the basis of location of office where the transactions are
recorded.
UK
USA
Europe
RoW
Total
2021
£m
£m £m
£m
£m
Continuing operations
Total revenue
12,100
87 565
33
12,785
Interest receivable
8,949
20 336
8
9,313
Interest payable
(1,483)
(2) (211)
(3)
(1,699)
Net fees and commissions
1,820
27 235
42
2,124
Income from trading activities
247
53 (1)
24
323
Other operating income
387
2 62
—
451
Total income
9,920
100 421
71
10,512
Operating profit/(loss) before tax
4,143
48
(199)
40
4,032
Total assets
693,221
21,776 64,415
2,580
781,992
Total liabilities
676,684
23,286 38,835
1,384
740,189
Contingent liabilities and commitments
117,225
1 8,114
27
125,367
2020 (1)
Continuing operations
Total revenue
12,511
211 656
174
13,552
Interest receivable
9,479
— 297
22
9,798
Interest payable
(2,163)
— (158)
(1)
(2,322)
Net fees and commissions
1,637
33 233
97
2,000
Income from trading activities
911
170 33
11
1,125
Other operating income
(117)
(22) 42
4
(93)
Total income
9,747
181 447
133
10,508
Operating profit/(loss) before tax
(193)
(85) (291)
88
(481)
Total assets
704,725
25,439 66,884
2,443
799,491
Total liabilities
686,500
26,932 41,018
1,217
755,667
Contingent liabilities and commitments
118,654
— 10,068
10
128,732
2019 (1)
Continuing operations
Total revenue
16,925
228 882
128
18,163
Interest receivable
10,923
— 169
35
11,127
Interest payable
(3,255)
— (70)
(3)
(3,328)
Net fees and commissions
2,191
37 197
72
2,497
Income from trading activities
727
148 49
8
932
Other operating income
2,305
13 432
9
2,759
Total income
12,891
198 777
121
13,987
Operating profit/(loss) before tax
3,543
186 172
82
3,983
Total assets
634,642
27,396 57,534
3,467
723,039
Total liabilities
613,151
31,715 33,539
1,078
679,483
Contingent liabilities and commitments
114,422
— 10,571
2
124,995
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 322
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
5 Pensions
NatWest Group operates two types of pension scheme: defined
benefit and defined contribution. The defined contribution
schemes invest contributions in a choice of funds and the
accumulated contributions and investment returns are used by
the employee to provide benefits on retirement, there is no
legal or constructive obligation for NatWest Group to pay any
further contributions or benefits. The defined benefit schemes
provide pensions in retirement based on employees’
pensionable salary and service.
NatWest Group’s balance sheet includes any defined benefit
pension scheme surplus or deficit as a retirement benefit asset
or liability reported in other assets and other liabilities. The
surplus or deficit is the difference between the liabilities to be
paid from the defined benefit scheme, and the assets held by
the scheme to meet these liabilities. The liabilities are calculated
by external actuaries using a number of financial and
demographic assumptions.
For some NatWest Group defined benefit schemes where there
is a net defined benefit surplus which means any surplus in
excess of present value of any economic benefits, the
application of accounting standards means we don’t recognise
that surplus on the balance sheet as the trustees may have
control over the use of the surplus.
For accounting policy information see Accounting policies note
4.
Defined contribution schemes
NatWest Group sponsors several defined contribution schemes
in different territories, which new employees are entitled to join.
NatWest Group pays specific contributions into individual
investment funds on employees’ behalf. Once those
contributions are paid, there is no further liability on the
NatWest Group balance sheet relating to the defined
contribution scheme.
Defined benefit schemes
NatWest Group sponsors a number of pension schemes in the
UK and overseas, including the Main section of the NatWest
Group Pension Fund (the “Main section”) which operates under
UK trust law and is managed and administered on behalf of its
members in accordance with the terms of the trust deed, the
scheme rules and UK legislation.
Pension fund trustees are appointed to operate each fund and
ensure benefits are paid in accordance with the scheme rules
and national law. The trustees are the legal owner of a
scheme’s assets, and have a duty to act in the best interests of
all scheme members.
The schemes generally provide a pension of one-sixtieth of final
pensionable salary for each year of service prior to retirement
up to a maximum of 40 years and are contributory for current
members. These have been closed to new entrants for over ten
years, although current members continue to build up
additional pension benefits, currently subject to 2% maximum
annual salary inflation, while they remain employed by NatWest
Group.
The Main section corporate trustee is NatWest Pension Trustee
Limited (the Trustee), a wholly owned subsidiary of NWB Plc,
Principal Employer of the Main section. The Board of the
Trustee comprises four member trustee directors selected from
eligible active staff, deferred and pensioner members who
apply and six appointed by NatWest Group. Under UK
legislation, a defined benefit pension scheme is required to
meet the statutory funding objective of having sufficient and
appropriate assets to cover its liabilities (the pensions that have
been promised to members).
Similar governance principles apply to NatWest Group’s other
defined benefit pension schemes.
Investment strategy
The assets of the Main section, which is typical of other group
schemes, represent 90% of all plan assets at 31 December 2021
(2020 - 90%) and are invested as shown below.
The Main section employs both physical and derivative
instruments to achieve a desired asset class exposure and to
reduce the section’s interest rate, inflation, and currency risk.
This means that the net funding position is considerably less
sensitive to changes in market conditions than the value of the
assets or liabilities in isolation. In particular, movements in
interest rate and inflation are substantially hedged by the
Trustee.
Major classes of plan assets as a percentage of
total plan assets of the Main section
2021
2020
Quoted
Unquoted
Total
Quoted
Unquoted
Total
%
%
%
%
%
%
Equities
3.7 4.7 8.4
3.9 4.6 8.5
Index linked bonds 46.7
—
46.7
49.4 — 49.4
Government bonds 9.8
—
9.8
6.2 — 6.2
Corporate and other bonds
10.7 4.4 15.1
11.8 5.0 16.8
Real estate
—
4.4 4.4
— 4.2 4.2
Derivatives
—
8.8 8.8
— 10.0 10.0
Cash and other assets
—
6.8 6.8
— 4.9 4.9
70.9 29.1 100.0
71.3 28.7 100.0

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 323
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
5 Pensions continued
The Main section’s holdings of derivative instruments are summarised in the table below:
2021
2020
Notional Fair value
Notional Fair value
amounts Assets Liabilities
amounts Assets Liabilities
£bn £m £m
£bn £m £m
Inflation rate swaps 20 1,408 796
18 1,390 1,716
Interest rate swaps
172 8,385 4,421
68 11,197 6,215
Currency forwards
12 61 98
11 334 38
Equity and bond call options
—
1
—
1 169 1
Equity and bond put options
—
1 3
3 1 19
Other 1 9 10
2 63 17
Swaps have been executed at prevailing market rates and within standard market bid/offer spreads with a number of
counterparties, including NWB Plc.
At 31 December 2021, the gross notional value of the swaps was £192 billion (2020 - £88 billion) and had a net positive fair value
of £4,573 million (2020 - £4,706 million) against which the counterparties had posted approximately 95% collateral.
The schemes do not invest directly in NatWest Group but can have exposure to NatWest Group. The trustees of the respective UK
schemes are responsible for ensuring that indirect investments in NatWest Group do not exceed the regulatory limit of 5% of plan
assets.
Main section All schemes
Present Present
value of
Asset Net
value of
Asset Net
Fair value defined ceiling/ pension Fair value defined ceiling/ pension
of plan benefit minimum
(assets)/
of plan benefit minimum
(assets)/
assets obligation funding liability assets obligation funding liability
Changes in value of net pension (assets)/liability
£m £m £m £m £m £m £m £m
At 1 January 2020
46,555 39,669 6,886 — 51,925 44,115 7,315 (495)
Currency translation and other adjustments
— 4 — 4 92 71 — (21)
Income statement
936 954 141 159 1,037 1,103 149 215
Statement of comprehensive income
5,486 5,130 426 70 6,027 5,704 319 (4)
Contributions by employer
233 — — (233) 296 — — (296)
Contributions by plan participants and other scheme
members
9 9 — — 14 14 — —
Assets/liabilities extinguished upon settlement
— — — — (2) (3) — (1)
Benefits paid
(1,896) (1,896) — — (2,140) (2,140) — —
At 1 January 2021 51,323 43,870 7,453
—
57,249 48,864 7,783 (602)
Currency translation and other adjustments
—
—
—
—
(129) (116) (3) 10
Income statement
Net interest expense
713 603 105 (5) 795 676 109 (10)
Current service cost
—
158
—
158
—
213
—
213
Past service cost
—
6
—
6
—
12
—
12
713 767 105 159 795 901 109 215
Statement of comprehensive income
Return on plan assets excluding
recognised interest income
841
—
—
(841) 872
—
—
(872)
Experience gains and losses
—
(241)
—
(241)
—
(236)
—
(236)
Effect of changes in actuarial financial assumptions
—
(1,165)
—
(1,165)
—
(1,204)
—
(1,204)
Effect of changes in actuarial demographic assumptions
—
350
—
350
—
379
—
379
Asset ceiling adjustments
—
—
2,443 2,443
—
—
2,602 2,602
841 (1,056) 2,443 546 872 (1,061) 2,602 669
Contributions by employer
705
—
—
(705) 780
—
—
(780)
Contributions by plan participants and other scheme
members
8 8
—
—
13 13
—
—
Assets/liabilities extinguished upon settlement
—
—
—
—
—
—
—
—
Benefits paid
(1,569) (1,569)
—
—
(1,793) (1,793)
—
—
At 31 December 2021 52,021 42,020 10,001
—
57,787 46,808 10,491 (488)
(1) Defined benefit obligations are subject to annual valuation by independent actuaries.
(2) NatWest Group recognises the net pension scheme surplus or deficit as a net asset or liability. In doing so, the funded status is adjusted to reflect any schemes with a surplus that
NatWest Group may not be able to access, as well as any minimum funding requirement to pay in additional contributions. This is most relevant to the Main section, where the
surplus is not recognised as the trustees may have control over the use of the surplus. Other NatWest Group schemes that this applies to include the Ulster Bank Pension Scheme
(NI) and the NatWest Markets section.
(3) NatWest Group expects to make contributions to the Main section of £714 million in 2022. Following the £500 million contribution in March 2021, additional contributions of up to
£500 million will be paid to the Main section in 2022, should NatWest Group make further distributions in 2022. This leaves one remaining payment of up to £500 million to be paid to
the Main Section after 2022, in line with the ring-fencing agreement with the Trustee. Such contributions do not constitute a minimum funding requirement as the obligation to pay
only arises on the payment of a distribution to shareholders.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 324
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
5 Pensions continued
All schemes
2021
2020
Amounts recognised on the balance sheet
£m
£m
Fund asset at fair value
57,787
57,249
Present value of fund liabilities
46,808
48,864
Funded status
10,979
8,385
Assets ceiling/minimun funding
10,491
7,783
488
602
2021
2020
Net pension assets/(liability) comprises
£m
£m
Net assets of schemes in surplus (included in Other assets, Note 18)
602
723
Net liabilities of schemes in deflicit (included in Other liabilities, Note 21)
(114)
(121)
488
602
The income statement charge comprises
(1)
:
2021
2020
£m
£m
Continuing operations 196
195
Discontinued operations
19
20
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
Funding and contributions by NatWest Group
In the UK, the trustees of defined benefit pension schemes are
required to perform funding valuations every three years. The
trustees and the sponsor, with the support of the Scheme
Actuary, agree the assumptions used to value the liabilities and
to determine future contribution requirements. The funding
assumptions incorporate a margin for prudence over and
above the expected cost of providing the benefits promised to
members, taking into account the sponsor’s covenant and the
investment strategy of the scheme. Similar arrangements apply
in the other territories where NatWest Group sponsors defined
benefit pension schemes.
A full triennial funding valuation of the Main section, effective
31 December 2020, was completed during the year.
This triennial funding valuation determined the funding level to
be 104%, pension liabilities to be £49 billion and the surplus to
be £2 billion, all assessed on the agreed funding basis. The
average cost of the future service of current members is 49% of
salary before contributions from those members. In addition,
the sponsor has agreed to meet administrative expenses.
Following the ring-fencing agreement with the Trustee reached
in 2018, additional contributions of up to £500 million p.a. are
payable to the Main section should the Group make
distributions to shareholders of an equal amount. These
contributions are capped at £1.5 billion in total; £500 million
was made in 2021 (2020 – Nil).
The key assumptions used to determine the funding liabilities
were the discount rate, which is determined based on fixed
interest swap and gilt yields plus 0.64% per annum, and
mortality assumptions, which result in life expectancies of
27.7/29.4 years for males/females who are currently age 60
and 28.9/30.7 years from age 60 for males/females who are
currently aged 40.
The 2020 triennial valuation of the Group Pension Fund
included an allowance for the estimated impact of guaranteed
minimum pension equalisation, which is reflected in the IAS 19
valuation at 31 December 2021. As such, no explicit allowance
is required in the IAS 19 figures (2020: £169 million).
Accounting Assumptions
Placing a value on NatWest Group’s defined benefit pension
schemes’ liabilities requires NatWest Group’s management to
make a number of assumptions, with the support of
independent actuaries. The ultimate cost of the defined benefit
obligations depends upon actual future events and the
assumptions made are unlikely to be exactly borne out in
practice, meaning the final cost may be higher or lower than
expected.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 325
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
5 Pensions continued
The most significant assumptions used for the Main section are shown below:
Principal IAS 19 actuarial assumptions
2021
2020
%
%
Discount rate 1.8
1.4
Inflation assumption (RPI)
3.3
2.9
Rate of increase in salaries
1.8
1.8
Rate of increase in deferred pensions
3.7
3.0
Rate of increase in pensions in payment
2.5
2.7
Lump sum conversion rate at retirement 18
20
Longevity at age 60:
years
years
Current pensioners
Males 27.3
27.1
Females
29.0
29.0
Future pensioners, currently aged 40
Males
28.2
28.3
Females
30.1
30.4
Discount rate
The IAS 19 valuation uses a single discount rate set by reference to the yield on a basket of ‘high quality’ sterling corporate bonds.
Significant judgment is required when setting the criteria for bonds to be included in the basket of bonds that is used to determine
the discount rate used in the IAS 19 valuations. The criteria include issue size, quality of pricing and the exclusion of outliers.
Judgment is also required in determining the shape of the yield curve at long durations; a constant credit spread relative to gilts is
assumed. Sensitivity to the main assumptions is presented below.
The weighted average duration of the Main section’s defined benefit obligation at 31 December 2021 is 20 years (2020 – 22 years).
The chart below shows the projected benefit payment pattern for the Main section in nominal terms. These cashflows are based on
the most recent formal actuarial valuation, effective 31 December 2020.
The larger outflow in the first three years represents the expected level of transfers out to 31 December 2023.
0
500
1000
1500
2000
2500
2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 2051 2053 2055 2057 2059 2061 2063 2065 2067 2069 2071 2073 2075 2077 2079 2081 2083 2085 2087 2089 2091 2093 2095
Expected Cashflows (£m)
Year
Non pensioner Pensioner

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 326
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
5 Pensions continued
The table below shows how the net pension asset of the Main section would change if the key assumptions used were changed
independently. In practice the variables have a degree of correlation and do not move completely in isolation.
(Decrease)/
(Decrease)/
Increase in
increase
increase
net pension
in value of in value of
(obligations)/
assets liabilities assets
2021
£m £m £m
0.25% increase in interest rates/discount rate
(2,917) (1,926) (991)
0.25% increase in inflation
1,883 1,329 554
0.25% increase in credit spreads
(3) (1,926) 1,923
Longevity increase of one year
— 1,790 (1,790)
0.25% additional rate of increase in pensions in payment
— 1,485 (1,485)
Increase in equity values of 10% (1)
442 — 442
2020
0.25% increase in interest rates/discount rate
(2,585) (2,384) (201)
0.25% increase in inflation
2,204 1,603 601
0.25% increase in credit spreads
(6) (2,384) 2,378
Longevity increase of one year
— 1,930 (1,930)
0.25% additional rate of increase in pensions in payment
— 1,608 (1,608)
Increase in equity values of 10% (1)
454 — 454
(1) Includes both quoted and private equity.
The funded status is most sensitive to movements in credit spreads and longevity. The table below shows the combined change in
the funded status of the Main section as a result of larger movements in these assumptions, assuming no changes in other
assumptions.
Change in life expectancies
-
2 years
-
1 years
No change
+ 1 year
+ 2 years
2021
£bn
£bn
£bn
£bn
£bn
Change in credit spreads
+50 bps
6.9 5.3 3.8 2.3 0.8
No change
3.6 1.8
—
(1.8) (3.6)
-50 bps
(0.3) (2.4) (4.5) (6.6) (8.7)
2020
Change in credit spreads +50 bps
7.8 6.1 4.5 2.9 1.3
No change
3.9 1.9 — (1.9) (3.9)
-50 bps
(0.6) (2.8) (5.1) (7.4) (9.7)
The defined benefit obligation of the Main section is attributable to the different classes of scheme members in the following
proportions:
2021
2020
Membership category
%
%
Active members 10.7
14.2
Deferred members 47.6
50.9
Pensioners and dependants
41.7
34.9
100.0
100.0
The experience history of NatWest Group schemes is shown below:
Main section All schemes
2021
2020 2019 2018 2017
2021
2020 2019 2018 2017
History of defined benefit schemes
£m
£m £m £m £m
£m
£m £m £m £m
Fair value of plan assets
52,021
51,323 46,555 43,806 44,652
57,787
57,249 51,925 48,752 49,746
Present value of plan obligations
42,020
43,870 39,669 35,466 37,937
46,808
48,864 44,115 39,607 42,378
Net surplus/(deficit)
10,001
7,453 6,886 8,340 6,715
10,979
8,385 7,810 9,145 7,368
Experience gains/(losses) on plan liabilities
241
427 275 (122) (107)
237
455 279 (81) (93)
Experience gains/(losses) on plan assets
841
5,486 3,021 (1,891)
1,580
872
6,027 3,556 (2,090)
1,728
Actual return on plan assets
1,554
6,422 4,266 (768)
2,735
1,667
7,064 4,930 (848)
3,013
Actual return on plan assets %
3.0%
13.8% 9.7% (1.7%) 6.2%
2.9%
13.6% 10.1% (1.7%) 6.1%

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 327
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
6 Auditor’s remuneration
Amounts payable to NatWest Group's auditors for statutory audit and other services are set out below.
All audit-related and other services are approved by the Group Audit Committee and are subject to strict controls to ensure the
external auditor’s independence is unaffected by the provision of other services. The Group Audit Committee recognises that for
certain assignments, the auditors are best placed to perform the work economically; for other work, NatWest Group selects the
supplier best placed to meet its requirements. NatWest Group’s auditors are permitted to tender for such work in competition with
other firms where the work is permissible under audit independence rules.
2021
2020
2019
£m
£m £m
Fees payable for:
- the audit of NatWest Group’s annual accounts (1) 4.4
4.7 3.8
-
the audit of NatWest Group plc’s subsidiaries
(1) 29.6
30.6 25.7
- audit-related assurance services (1,2) 5.3
4.7 3.2
Total audit and audit-related assurance services fees 39.3
40.0 32.7
Other assurance services
0.4
0.6 1.2
Corporate finance services (3) 0.5
0.4 0.6
Total other services
0.9
1.0 1.8
(1) The 2021 audit fee was approved by the Group Audit Committee. At 31 December 2021, £19.7 million has been billed and paid in respect of the 2021 NatWest Group audit fees.
(2) Comprises fees of £1.1 million (2020 - £1.1 million) in relation to reviews of interim financial information, £3.5 million (2020 - £3.2 million) in respect of reports to NatWest Group’s
regulators in the UK and overseas, and £0.7 million (2020 - £0.4 million) in relation to non-statutory audit opinions.
(3) Comprises fees of £0.5 million (2020 - £0.4 million) in respect of work performed by the auditors as reporting accountants on debt and equity issuances undertaken by NatWest
Group.
7 Tax
NatWest Group’s corporate income tax charge for the period is set out below, together with a reconciliation to the expected tax
charge calculated using the UK standard corporation tax rate and details of the NatWest Group’s deferred tax balances.
For accounting policy information see Accounting policies note 9.
Analysis of the tax charge for the year
The tax charge comprises current and deferred tax in respect of profits and losses recognised or originating in the income
statement. Tax on items originating outside the income statement is charged to other comprehensive income or direct to equity (as
appropriate) and is therefore not reflected in the table below.
Current tax is tax payable or recoverable in respect of the taxable profit or loss for the year and any adjustments to tax payable in
prior years. Deferred tax is explained on page 328.
2021
2020 (1)
2019 (1)
Continuing operations
£m
£m
£m
Current tax
Charge for the year (1,036)
(191)
(673)
Over provision in respect of prior years 31
86
122
(1,005)
(105)
(551)
Deferred tax
(Charge)/credit for the year
(185)
176
38
UK tax rate change impact (2)
165
75
—
Net increase/(decrease) in the carrying value of deferred tax assets in respect of UK,
Ireland and Netherlands losses 12
(130)
55
Over/(under) provision in respect of prior years (3) 17
(90)
19
Tax charge for the year (996)
(74)
(439)
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
(2) It was announced in the UK Government’s budget on 3 March 2021 that the main UK corporation tax rate will increase from 19% to 25% from 1 April 2023. This legislative change
was enacted on 10 June 2021.
(3) Prior year tax adjustments incorporate refinements to tax computations made on submission and agreement with the tax authorities and adjustments to provisions in respect of
uncertain tax positions.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 328
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
7 Tax continued
Factors affecting the tax charge for the year
Taxable profits differ from profits reported in the income statement as certain amounts of income and expense may not be taxable
or deductible. In addition, taxable profits may reflect items that have been included outside the income statement (for instance, in
other comprehensive income) or adjustments that are made for tax purposes only.
The expected tax charge for the year is calculated by applying the standard UK corporation tax rate of 19% (2020 and 2019 – 19%)
to the Operating profit or loss before tax in the income statement.
The actual tax charge differs from the expected tax charge as follows:
2021
2020 (1) 2019 (1)
Continuing operations
£m
£m £m
Expected tax (charge)/credit
(766)
92 (757)
Losses and temporary differences in year where no deferred tax asset recognised (51)
(43) (24)
Foreign profits taxed at other rates (11)
(29) 7
Non deductible goodwill impairment
(16)
— —
Items not allowed for tax:
- losses on disposals and write-downs (55)
(22) (71)
-
UK bank levy
(18)
(32) (26)
- regulatory and legal actions (74)
14 (165)
- other disallowable items (28)
(70) (62)
Non-taxable items:
-
Alawwal bank merger gain disposal
—
— 215
- FX recycling on the liquidation of RFS Holdings
—
— 279
- other non-taxable items 73
28 80
Taxable foreign exchange movements
8
(3) (1)
Unrecognised losses brought forward and utilised
10
16 16
(Decrease)/increase in the carrying value of deferred tax assets in respect of:
- UK losses (9)
7 129
- Ireland losses (27)
(137) (74)
- Netherlands losses 48
— —
Banking surcharge
(341)
(27) (199)
Tax on paid-in equity 48
61 73
UK tax rate change impact 165
75 —
Adjustments in respect of prior years
48
(4) 141
Actual tax charge
(996)
(74) (439)
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
Judgment: tax contingencies
NatWest Group’s corporate income tax charge and its provisions for corporate income taxes necessarily involve a degree of
estimation and judgment. The tax treatment of some transactions is uncertain and tax computations are yet to be agreed with the
tax authorities in a number of jurisdictions. NatWest Group recognises anticipated tax liabilities based on all available evidence and,
where appropriate, in the light of external advice. Any difference between the final outcome and the amounts provided will affect
current and deferred income tax charges in the period when the matter is resolved.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences where the carrying amount of
an asset or liability differs for accounting and tax purposes. Deferred tax liabilities reflect the expected amount of tax payable in
the future on these temporary differences. Deferred tax assets reflect the expected amount of tax recoverable in the future on
these differences.
The net deferred tax asset recognised by the NatWest Group is shown below, together with details of the accounting judgments
and tax rates that have been used to calculate the deferred tax. Details are also provided of any deferred tax assets or liabilities
that have not been recognised on the balance sheet.
Analysis of deferred tax
£m
£m
Deferred tax asset
(1,195)
(901)
Deferred tax liability
359
291
Net deferred tax asset
(836)
(610)

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 329
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
7 Tax continued
Accelerated Tax losses
capital Expense
Financial
carried
Pension allowances provisions
instruments
forward
Other
Total
£m
£m £m
£m
£m £m
£m
At 1 January 2020
(139) 172 (118)
315
(951) (24)
(745)
Charge/(credit) to income statement: (1)
- continuing operations
15 (234) 33
114
46 (5)
(31)
- discontinued operations
— — —
—
9 —
9
Charge/(credit) to other comprehensive income
119 — —
51
— (7)
163
Currency translation and other adjustments
1 (2) —
—
(9) 4
(6)
At 1 January 2021 (4) (64) (85)
480
(905) (32)
(610)
Charge/(credit) to income statement:
- continuing operations
19 21 (5)
(10)
(1) (33)
(9)
- discontinued operations
—
—
—
—
3
—
3
Charge/(credit) to other comprehensive income
10
—
(7)
(222)
—
(5)
(224)
Currency translation and other adjustments
(1) 1
—
—
4
—
4
At 31 December 2021
24 (42) (97)
248
(899) (70)
(836)
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
Deferred tax assets in respect of carried forward tax losses are recognised if the losses can be used to offset probable future
taxable profits after taking into account the expected reversal of other temporary differences. Recognised deferred tax assets in
respect of tax losses are analysed further below.
2021
2020
£m
£m
UK tax losses carried forward
- NWM Plc 56
62
- NWB Plc 608
592
-
RBS plc
176
200
- Ulster Bank Limited
—
8
Total 840
862
Overseas tax losses carried forward
- UBIDAC 11
43
- NWM N.V. 48
—
899
905
Critical accounting policy: Deferred tax
NatWest Group has recognised a deferred tax asset of £1,195
million (31 December 2020 - £901 million) and a deferred tax
liability of £359 million (31 December 2020 - £291 million). These
include amounts recognised in respect of UK and overseas tax
losses of £899 million (31 December 2020 - £905 million).
Deferred tax assets are recognised to the extent that it is
probable that there will be future taxable profits to recover
them.
Judgment - NatWest Group has considered the carrying value of
deferred tax assets and concluded that, based on
management’s estimates, sufficient taxable profits will be
generated in future years to recover recognised deferred tax
assets.
Estimate - These estimates are partly based on forecast
performance beyond the horizon for management’s detailed
plans. They have regard to inherent uncertainties, such as
climate change and the impact of COVID. The deferred tax
assets in NWM Plc and UBIDAC are supported by way of future
reversing taxable temporary differences on which deferred tax
liabilities are recognised at 31 December 2021 .
UK tax losses
Under UK tax rules, tax losses can be carried forward
indefinitely. As the recognised tax losses in NatWest Group
arose prior to 1 April 2015, credit in future periods is given
against 25% of profits at the main rate of UK corporation tax,
excluding the Banking Surcharge 8% rate introduced by The
Finance (No. 2) Act 2015.
It was announced in the UK Government’s budget on 3 March
2021 that the main UK corporation tax rate will increase from
19% to 25% from 1 April 2023. This legislative change was
enacted on 10 June 2021. NatWest Group’s closing deferred tax
assets and liabilities have therefore been recalculated taking
into account this change of rate and the applicable period the
deferred tax assets and liabilities are expected to crystallise. As
a result, the net deferred tax asset position in NatWest Group
has increased by £163 million, with a £165 million tax credit
included in the income statement (refer to reconciling item
above), and a £2 million tax charge included in other
comprehensive income.
It was subsequently announced in the UK Government’s budget
on 27 October 2021 that the UK banking surcharge will
decrease from 8% to 3% from 1 April 2023. This legislative
change was substantively enacted on 2 February 2022. Had this
rate reduction been substantively enacted as at the balance
sheet date, the estimated rate change impact would not have
been material.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 330
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
7 Tax continued
NWM Plc – NWM Plc expects that the balance of recognised
deferred tax asset at 31 December 2021 of £56 million (2020 -
£62 million) in respect of tax losses amounting to £254 million
will be recovered by the end of 2027. The movement in the
current financial year reflects a £13 million decrease in the
carrying value of the deferred tax asset, offset by a £7 million
increase due to the UK tax rate change impact.
NWB Plc – A deferred tax asset of £608 million (2020 - £592
million) has been recognised in respect of total losses of £2,610
million. The losses arose principally as a result of significant
impairment and conduct charges between 2009 and 2012
during challenging economic conditions in the UK banking
sector. NWB Plc expects the deferred tax asset to be utilised
against future taxable profits by the end of 2025.
RBS plc – A deferred tax asset of £176 million (2020 - £200
million) has been recognised in respect of losses of £722 million
of total losses of £3,979 million carried forward at 31 December
2021. The losses were transferred from NatWest Markets Plc as
a consequence of the ring fencing regulations. RBS plc expects
the deferred tax asset to be utilised against future taxable
profits by the end of 2027.
Overseas tax losses
UBIDAC – A deferred tax asset of £11 million (2020 - £43 million)
has been recognised in respect of losses of £88 million, and is
now entirely supported by way of future reversing taxable
temporary differences on which deferred tax liabilities are
recognised at 31 December 2021. The movement in the current
financial year reflects a £32 million reduction in the carrying
value of the deferred tax asset following the announcement of
the Group’s withdrawal from the Republic of Ireland.
NatWest Market N.V. (NWM N.V.) – A deferred tax asset of £48
million has been recognised in respect of previously
unrecognised tax losses and credits of £187 million of total tax
losses and credits of £2,785 million carried forward at 31
December 2021. NWM N.V. Group expects the deferred tax
asset to be utilised against future taxable profits by the end of
2026. NWM N.V. Group’s Dutch fiscal unit has reported taxable
profits in the period since the adoption of the new business
model and repurposing of NWM N.V.’s banking license in 2019.
In addition, NatWest Group strategic review of NWM Group has
been largely completed in 2021, which has removed material
uncertainties around the future business of NWM N.V.. As a
result, NWM N.V. Group now considers it to be probable, based
on its 5 year budget forecast, that future taxable profit will be
available against which the tax losses and tax credits can be
partially utilised.
Unrecognised deferred tax
Deferred tax assets of £5,437 million (2020 - £4,965 million;
2019 - £4,653 million) have not been recognised in respect of
tax losses and other deductible temporary differences carried
forward of £24,699 million (2020 - £25,091 million; 2019 -
£23,555 million) in jurisdictions where doubt exists over the
availability of future taxable profits. Of these losses and other
deductible temporary differences, £77 million expire within five
years and £4,288 million thereafter. The balance of tax losses
and other deductible temporary differences carried forward has
no expiry date.
Deferred tax liabilities of £302 million (2020 - £242 million; 2019
- £262 million) on aggregate underlying temporary differences
of £1,032 million (2020 - £1,021 million; 2019 £1,074 million)
have not been recognised in respect of retained earnings of
overseas subsidiaries and held-over gains on the incorporation
of certain overseas branches. Retained earnings of overseas
subsidiaries are expected to be reinvested indefinitely or
remitted to the UK free from further taxation. No taxation is
expected to arise in the foreseeable future in respect of held-
over gains on which deferred tax is not recognised. Changes to
UK tax legislation largely exempts from UK tax overseas
dividends received on or after 1 July 2009.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 331
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
8 Discontinued operations and assets and liabilities of disposal groups
Discontinued operations are reported separately on the income statement to allow users to distinguish the profits and cash flows
from continuing operations from those activities that are subject to disposal.
Assets and liabilities which we intend to dispose of in a single transaction are also presented separately on the balance sheet.
For accounting policy information see Accounting policies note 3.
This note sets out the profit/(loss) from the discontinued operations (represented for comparative periods), the assets and liabilities
of the disposal group and the operating cash flows attributable to the discontinued operations.
Two legally binding agreements for the sale of UBIDAC business were announced in 2021 as part of the phased withdrawal from
the Republic of Ireland:
On 28 June 2021 we announced it had agreed a binding sale agreement with Allied Irish Banks, p.l.c. for the transfer of c.€4.2
billion (plus up to €2.8 billion of undrawn exposures), of performing commercial loans as well as c.280 colleagues that are wholly or
mainly assigned to supporting that part of the business, with the final number of roles to be confirmed as the deal completes. The
sale, subject to Competition and Consumer Protection Commission (CCPC) approval, is expected to be completed in a series of
transactions during 2022 and Q1 2023.
On the 17 December 2021 we signed a legally binding agreement with Permanent TSB p.l.c. The proposed sale will include
performing non-tracker mortgages, the performing loans in the micro-SME business; the UBIDAC Asset Finance business, including
its Lombard digital platform, and a subset of Ulster Bank branch locations in the Republic of Ireland. The majority of loans are
expected to transfer by Q4 2022. As part of the transaction it is anticipated that c.450 colleagues will have the right to transfer
under the TUPE regulations with the final number of roles to be confirmed as the deal completes.
The business activities relating to these sales that meet the requirements of IFRS 5 are presented as a discontinued operation and
as a disposal group at 31 December 2021. The Ulster Bank RoI operating segment continues to be reported separately and reflects
the results and balance sheet position of its continuing operations.
(a) Profit from discontinued operations, net of tax
2021
2020
2019
£m
£m £m
Interest receivable
260
273
248
Net interest income
260
273
248
Non-interest income
9
15
18
Total income
269
288
266
Operating expenses
(47)
(47)
(45)
Profit before impairment losses
222
241
221
Impairment releases/(losses)
57
(111)
28
Operating profit before tax
279
130
249
Tax (charge)/credit
(3)
(9)
7
Profit from discontinued operations, net of tax
276
121
256
(b) Assets and liabilities of disposal groups
2021
£m
Assets of disposal groups
Loans to customers - amortised cost
9,002
Derivatives
5
Other assets
8
9,015
Liabilities of disposal groups
Other liabilities
5
5
Net assets of disposal groups
9,010
(c) Operating cash flows attributable to discontinued operations
2021
2020 2019
£m
£m £m
Net cash flows from operating activities
1,290
(895) (3,909)
Net increase/(decrease) in cash and cash equivalents
1,290
(895) (3,909)

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 332
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
9 Earnings per share
Earnings per share is a metric to measure how much profit NatWest Group makes for each share that is in issue during the
year. Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding. Diluted earnings per ordinary share is calculated by dividing the basic earnings by
the weighted average number of ordinary shares outstanding plus the weighted average number of ordinary shares that would be
issued on conversion of dilutive share options and convertible securities.
2021
2020
2019
£m
£m
£m
Earnings
Profit/(loss) from continuing operations attributable to ordinary shareholders
2,674
(874) 2,877
Profit from discontinued operations attributable to ordinary shareholders 276
121 256
Profit/(loss) attributable to ordinary shareholders 2,950
(753) 3,133
Weighted average number of shares (millions)
Weighted average number of ordinary shares outstanding during the year
11,622
12,095 12,067
Effect of dilutive share options and convertible securities (1) 45
— 35
Diluted weighted average number of ordinary shares outstanding during the year
11,667
12,095 12,102
(1) As there was a loss from continuing operations attributable to the parent company for the period to 31 December 2020, the effect of share options and convertible securities was
not dilutive.
10 Financial instruments – classification
Financial instruments are contracts that give rise to a financial asset of one entity and a corresponding financial liability or equity
instrument of a counterparty entity, such as: cash; derivatives; loans; deposits; and settlement balances. This note presents
financial instruments classified in accordance with IFRS 9 – Financial Instruments.
Judgment: classification of financial assets
Classification of financial assets between amortised cost and fair value through other comprehensive income requires a degree of
judgment in respect of business models and contractual cashflows.
 The business model criteria is assessed at a portfolio level to determine whether assets are classified as held to collect or held
to collect and sell. Information that is considered in determining the applicable business model includes the portfolio’s policies
and objectives, how the performance and risks of the portfolio are managed, evaluated and reported to management; and the
frequency, volume and timing of sales in prior periods, sales expectation for future periods, and the reasons for sales.
 The contractual cash flow characteristics of financial assets are assessed with reference to whether the cash flows represent
solely payments of principal and interest. A level of judgment is made in assessing terms that could change the contractual
cash flows so that it would not meet the condition for solely payments of principal and interest, including contingent and
leverage features, non-recourse arrangements and features that could modify the time value of money.
For accounting policy information see Accounting policies 10, 12, 13 and 15.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 333
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
10 Financial instruments - classification continued
Judgment: classification of financial assets
The following tables analyse financial assets and liabilities in accordance with the categories of financial instruments on an IFRS 9
basis.
Amortised
Other
MFVTPL
FVOCI
cost
assets Total
Assets
£m
£m
£m
£m £m
Cash and balances at central banks
177,757
177,757
Trading assets
59,158 59,158
Derivatives
(1) 106,139 106,139
Settlement balances
2,141
2,141
Loans to bank - amortised cost (2)
7,682
7,682
Loans to customers - amortised cost (3)
358,990
358,990
Other financial assets
317
37,266
8,562
46,145
Intangible assets 6,723 6,723
Other assets 8,242 8,242
Assets of disposal groups
9,015 9,015
31 December 2021
165,614
37,266
555,132
23,980 781,992
Cash and balances at central banks
124,489
124,489
Trading assets
68,990 68,990
Derivatives
(1)
166,523 166,523
Settlement balances
2,297
2,297
Loans to bank - amortised cost (2)
6,955
6,955
Loans to customers - amortised cost (3)
360,544
360,544
Other financial assets
440
44,902
9,806
55,148
Intangible assets
6,655 6,655
Other assets
7,890 7,890
31 December 2020
235,953
44,902
504,091
14,545 799,491
Held-for- Amortised
Other
trading
DFV
cost liabilities
Total
Liabilities
£m
£m
£m £m
£m
Bank deposits (4) 26,279
26,279
Customer deposits
479,810
479,810
Settlement balances
2,068
2,068
Trading liabilities
64,598
64,598
Derivatives (1) 100,835
100,835
Other financial liabilities (5)
1,671
47,655
49,326
Subordinated liabilities
703
7,726
8,429
Notes in circulation
3,047
3,047
Other liabilities
(6) 1,356 4,441
5,797
31 December 2021
165,433
2,374
567,941 4,441
740,189
Bank deposits (4)
20,606
20,606
Customer deposits
431,739
431,739
Settlement balances
5,545
5,545
Trading liabilities
72,256
72,256
Derivatives
(1)
160,705
160,705
Other financial liabilities (5)
2,403
43,408
45,811
Subordinated liabilities
793
9,169
9,962
Notes in circulation
2,655
2,655
Other liabilities (6)
1,882 4,506
6,388
31 December 2020
232,961
3,196
515,004 4,506
755,667
(1) Includes net hedging derivatives assets of £44 million (2020 - £93 million) and net hedging derivatives liabilities of £120 million (2020 - £130 million).
(2) Includes items in the course of collection from other banks of £67 million (2020 - £148 million).
(3) Includes finance lease receivables of £8,531 million (2020 - £9,061 million).
(4) Includes items in the course of transmission to other banks of £56 million (2020 - £12 million).
(5) The carrying amount of other customer accounts designated at fair value through profit or loss is the same as the principal amount for both periods. No amounts have been
recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively.
(6) Includes lease liabilities of £1,263 million (2020 - £1,698 million) held at amortised cost.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 334
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
10 Financial instruments - classification continued
Judgment: classification of financial assets
2021
2020
£m
£m
Reverse repos
Trading assets 20,742
19,404
Loans to banks - amortised cost
189
153
Loans to customers - amortised cost
25,962
25,011
Repos
Bank deposits
7,912
6,470
Customer deposits
14,541
5,167
Trading liabilities
19,389
19,036
The tables below present information on financial assets and financial liabilities that are offset on the balance sheet under IFRS or
subject to enforceable master netting agreements together with financial collateral received or given.
Instruments which can be offset Potential for offset not recognised by IFRS
Effect of
Net amount
master
after the effect
Instruments
netting
of netting
outside
IFRS
Balance
and similar
Cash Securities
agreements and
netting Balance
Gross
offset
sheet
agreements collateral collateral
related collateral
agreements sheet total
2021
£m £m £m £m £m £m
£m
£m £m
Derivative assets
113,220 (7,961) 105,259 (85,006) (15,035) (2,428)
2,790
880 106,139
Derivative liabilities
108,594 (8,568) 100,026 (85,006) (9,909) (2,913)
2,198
809 100,835
Net position (1) 4,626 607 5,233
—
(5,126) 485
592
71 5,304
Trading reverse repos 44,529 (24,422) 20,107 (900) — (19,136)
71
635 20,742
Trading repos 42,664 (24,422) 18,242 (900) — (17,341)
1
1,147 19,389
Net position 1,865
—
1,865
—
— (1,795)
70
(512) 1,353
Non trading reverse repos
33,729 (7,594) 26,135
—
— (26,135)
—
16 26,151
Non trading repos
30,047 (7,594) 22,453
—
— (22,453)
—
—
22,453
Net position
3,682
—
3,682
—
— (3,682)
—
16 3,698
2020
Derivative assets
176,425 (10,807) 165,618 (137,086) (19,608) (5,053)
3,871
905 166,523
Derivative liabilities
171,614 (11,540) 160,074 (137,086) (15,034) (4,921)
3,033
631 160,705
Net position (1)
4,811 733 5,544 — (4,574) (132)
838
274 5,818
Trading reverse repos
43,908 (24,867) 19,041 (929) — (18,040)
72
363 19,404
Trading repos
42,203 (24,867) 17,336 (929) — (16,407)
—
1,700 19,036
Net position
1,705 — 1,705 — — (1,633)
72
(1,337) 368
Non trading reverse repos
36,117 (10,953) 25,164 — — (25,164)
—
— 25,164
Non trading repos
22,590 (10,953) 11,637 — — (11,637)
—
— 11,637
Net position
13,527 — 13,527 — — (13,527)
—
— 13,527
(1) The net IFRS offset balance of £607 million (2020 - £733 million) relates to variation margin netting reflected on other balance sheet lines.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 335
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
10 Financial instruments - classification continued
Interest rate benchmark reform
The NatWest Group IBOR program successfully delivered the conversion of the vast majority of the IBOR exposures to risk free
rates (RFR) in advance of the cessation date. This encompasses loans, deposits, capital instruments and derivatives, which, have
been converted using fallback provisions, switch provisions or as part of market-wide conversion events in the case of derivatives
subject to clearing. These instruments will convert at the first repricing date post cessation.
The total amount of exposure for NatWest Group at 31 December 2021 subject to the above conversion provisions are £22,056
million of assets, £426 million of liabilities, £15,785 million of loan commitments and £557.7 billion of derivative notionals.
Despite the significant conversion levels achieved, certain instruments remain in discussion with customers and counterparties to
achieve consensual conversion. If consensual conversion is not achieved these instruments will default to synthetic LIBOR in line
with relevant legislation.
The level of exposures without explicit or agreed conversion provisions as of 31 December 2021 is as follows:
Rates subject to IBOR reform
GBP LIBOR USD IBOR (1) Other IBOR (2)
Total
2021 £m £m £m
£m
Trading assets
62 90 —
152
Loans to banks - amortised cost
—
11 —
11
Loans to customers - amortised cost
4,788 4,565 267
9,620
Other financial assets
864 768 —
1,632
Bank deposits
—
37 —
37
Customer deposits
—
—
—
—
Trading liabilities
31 166 —
197
Other financial liabilities
2,390 7,023 131
9,544
Subordinated liabilities
—
90 —
90
Loan commitments (3) 1,016 6,366 55
7,437
Derivatives notional (£bn)
3.6 1,152.0 —
1,155.6
At December 2021 NatWest Group held certain currency swaps with both legs subject to IBOR reform, for which only the GBP
LIBOR leg has an explicit or agreed conversion provisions as of 31 December 2021, but not the entire contract. These include
currency swaps of GBP LIBOR of £8.7 billion with USD IBOR £8.2 billion and Other IBOR £0.5 billion; currency swaps of USD IBOR
of £117 billion with GBP LIBOR £91.7 billion and Other IBOR £25.3 billion; currency swaps of EURIBOR of £0.1 billion with GBP
LIBOR £0.1 billion; currency swaps of Other IBOR of £0.4 billion with USD IBOR £0.4 billion.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 336
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
10 Financial instruments - classification continued
Interest rate benchmark reform
Rates subject to IBOR reform
GBP LIBOR
USD IBOR (1) EURIBOR (2) Other IBOR
Total
2020
£m
£m £m £m
£m
Trading assets
75
60 348 1
484
Loans to banks - amortised cost
23
82 101 —
206
Loans to customers - amortised cost
40,299
6,366 4,950 234
51,849
Other financial assets
2,918
303 370 —
3,591
Bank deposits
—
367 — 107
474
Customer deposits
—
— — 4
4
Trading liabilities
54
414 269 2
739
Other financial liabilities
2,492
9,806 5,902 196
18,396
Subordinated liabilities
8
850 438 —
1,296
Loan commitments (3)
25,616
9,228 7,176 682
42,702
Derivatives notional (£bn)
1,407.5
1,368.8 2,358.7 289.6
5,424.6
(1) In 2021 the FCA declared that USD IBOR will be non-representative post 30 June 2023; at the time of preparing the 31 December 2020 Annual Reports & Accounts this date was
expected to be 31 December 2021.
(2) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for
EURIBOR has ended. 31 December 2020 data includes EURIBOR exposure as subject to reform.
(3) Certain loan commitments are multi-currency facilities. Where these are fully undrawn, they are allocated to the principal currency of the facility. Where the facilities are partly
drawn, the remaining loan commitment is allocated to the currency with the largest drawn amount.
Included within the 31 December 2020 table above for derivatives were currency swaps with corresponding legs also subject to
IBOR reform of GBP LIBOR of £5.2 billion with USD IBOR £2.0 billion, EURIBOR £2.9 billion and Other IBOR £0.3 billion. Currency
swaps of USD IBOR of £231.7 billion with GBP LIBOR £98.5 billion, EURIBOR £85.8 billion and Other IBOR £47.4 billion. Currency
swaps of EURIBOR of £5.1 billion with GBP LIBOR £2.3 billion, USD IBOR £1.8 billion and Other IBOR £1.0 billion. Currency swaps
of Other IBOR of £2.2 billion with EURIBOR £0.7 billion, USD IBOR £1.2 billion and Other IBOR £0.3 billion.
Additionally, included above are basis swaps for GBP LIBOR of £97 billion, USD IBOR of £81 billion, EURIBOR of £49 billion and
Other IBOR of £10 billion.
AT1 issuances
NatWest Group has issued certain capital instruments, AT1, under which reset clauses are linked to IBOR rates subject to reform.
Where under the contractual terms of the instrument the coupon resets to a rate which has IBOR as a specified component of its
pricing structure, these are subject to IBOR reform and listed below:
31 December
31 December
2021
2020
£m
£m
US$1.15 billion 8% notes
734
734
US$2.65 billion 8.625% notes
—
2,046
NatWest Group‘s non-cumulative preference shares of USD$0.01 Series U (£494 million) are also subject to IBOR reform.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 337
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
11 Financial instruments - valuation
Financial instruments recognised at fair value are revalued using techniques that can include observable inputs (pricing information
that is readily available in the market, for example UK Government securities), and unobservable inputs (pricing information that is
not readily available, for example unlisted securities). Gains and losses are recognised in the income statement and statement of
comprehensive income as appropriate. This note presents information on the valuation of financial instruments.
The table below provides an overview of the various sections contained within the note.
Critical accounting policy: Fair value – financial instruments
Financial instruments classified as mandatory fair value through profit or loss; held-for-trading; designated fair value through profit
or loss and fair value through other comprehensive income are recognised in the financial statements at fair value. All derivatives
are measured at fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. A fair value measurement considers the characteristics of the asset or liability and the
assumptions that a market participant would consider when pricing the asset or liability.
NatWest Group manages some portfolios of financial assets and financial liabilities based on its net exposure to either market or
credit risk. In these cases, the fair value is derived from the net risk exposure of that portfolio with portfolio level adjustments
applied to incorporate bid-offer spreads, counterparty credit risk, and funding costs (see ‘Valuation Adjustments’).
Where the market for a financial instrument is not active, fair value is established using a valuation technique. These valuation
techniques involve a degree of estimation, the extent of which depends on the instrument’s complexity and the availability of
market-based data. The complexity and uncertainty in the financial instrument’s fair value is categorised using the fair value
hierarchy.
For accounting policy information see Accounting policies notes 10 and 15.
Valuation
Fair value hierarchy
Financial instruments carried at fair value have been classified
under the fair value hierarchy. The classification ranges from
level 1 to level 3, with more expert judgment and price
uncertainly for those classified at level 3.
The determination of an instrument’s level cannot be made at
a global product level as a single product type can be in more
than one level. For example, a single name corporate credit
default swap could be in level 2 or level 3 depending on the
level of market activity for the referenced entity .
Level 1 – instruments valued using unadjusted quoted prices in
active and liquid markets, for identical financial instruments.
Examples include government bonds, listed equity shares and
certain exchange-traded derivatives.
Level 2 - instruments valued using valuation techniques that
have observable inputs. Observable inputs are those that are
readily available with limited adjustments required. Examples
include most government agency securities, investment-grade
corporate bonds, certain mortgage products - including CLOs,
most bank loans, repos and reverse repos, state and municipal
obligations, most notes issued, certain money market
securities, loan commitments and most OTC derivatives.
Level 3 - instruments valued using a valuation technique where
at least one input which could have a significant effect on the
instruments valuation, is not based on observable market data.
Examples include non-derivative instruments which trade
infrequently, certain syndicated and commercial mortgage
loans, private equity, and derivatives with unobservable model
inputs.
Page
Financial instruments
Critical accounting policy: Fair value 337
Valuation
Fair value hierarchy (D) 337
Valuation techniques (D) 338
Inputs to valuation models (D) 338
Valuation control (D) 338
Key areas of judgment (D) 339
Table of assets and liabilities split by fair value
hierarchy level (T) 340
Valuation adjustments
Table of fair value adjustments made
(T)
341
Funding valuation adjustments (FVA) (D) 341
Credit valuation adjustments (CVA) (D) 341
Bid-offer (D) 341
Product and deal specific (D) 341
Own credit (D) 341
Level 3 additional information
Level 3 ranges of unobservable inputs (D) 342
Table of level 3 instruments, valuation
techniques and inputs (T) 342
Level 3 sensitivities (D) 343
Alternative assumptions (D) 343
Other considerations (D) 343
Table of high and low range of fair value of
level 3 assets and liabilities (T) 343
Movement in level 3 assets and liabilities
over the reporting period (D) 344
Table of the movement in level 3 assets and liabilities 344
Fair value of financial instruments measured
at amortised cost
Table showing the fair value of financial instruments
measured at amortised cost on the balance sheet (T) 345
(D) = Descriptive; (T) = Table

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 338
Financial statements
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Risk and capital management
Additional information
Financial review
11 Financial instruments – valuation
continued
Valuation techniques
NatWest Group derives the fair value of its instruments
differently depending on whether the instrument is a non-
modelled or a modelled product.
Non-modelled products are valued directly from a price input,
typically on a position-by-position basis. Examples include
equities and most debt securities.
Non-modelled products can fall into any fair value levelling
hierarchy depending on the observable market activity,
liquidity, and assessment of valuation uncertainty of the
instruments. The assessment of fair value and the classification
of the instrument to a fair value level is subject to the valuation
controls discussed in the Valuation control section.
Modelled products valued using a pricing model range in
complexity from comparatively vanilla products such as interest
rate swaps and options (e.g., interest rate caps and floors)
through to more complex derivatives (e.g., balance guarantee
swaps).
For modelled products the fair value is derived using the model
and the appropriate model inputs or parameters, as opposed to
a cash price equivalent. Model inputs are taken either directly
or indirectly from available data, where some inputs are also
modelled.
Fair value classification of modelled instruments is either level 2
or level 3, depending on the product/model combination, the
observability and quality of input parameters and other factors.
All these must be assessed to classify a position. The modelled
product is assigned to the lowest fair value hierarchy level of
any significant input used in that valuation.
Most derivative instruments, for example vanilla interest rate
swaps, foreign exchange swaps and liquid single name credit
derivatives, are classified as level 2. This is because they are
vanilla products valued using standard market models and with
observable inputs. Level 2 products range from vanilla to more
complex products, where more complex products remain
classified as Level 2 due to the materiality of any unobservable
inputs.
Inputs to valuation models
When using valuation techniques, the fair value can be
significantly affected by the choice of valuation model and
underlying assumptions. Factors considered include the
cashflow amounts and timing of those cash flows, and
application of appropriate discount rates, incorporating both
funding and credit risk. Values between and beyond available
data points are obtained by interpolation and extrapolation.
The principal inputs to these valuation techniques are as
follows:
Bond prices - quoted prices are generally available for
government bonds, certain corporate securities, and some
mortgage-related products.
Credit spreads - these express the return required over a
benchmark rate or index to compensate for the referenced
credit risk. Where available, these are derived from the price of
credit default swaps or other credit-based instruments, such as
debt securities. When direct prices are not available; credit
spreads are determined with reference to available prices of
entities with similar characteristics.
Interest rates - these are principally based on interest rate
swap prices referencing benchmark interest rates. Benchmark
rates include Interbank Offered Rates (IBOR) and the Overnight
Index Swap (OIS) rate, including SONIA (Sterling Overnight
Interbank Average Rate). Other quoted interest rates may also
be used from both the bond, and futures markets.
Foreign currency exchange rates - there are observable prices
both for spot and forward contracts and futures in the world's
major currencies.
Equity and equity index prices - quoted prices are generally
readily available for equity shares listed on the world's major
stock exchanges and for major indices on such shares.
Price volatilities and correlations - volatility is a measure of the
tendency of a price to change with time. Correlation measures
the degree which two or more prices or variables are observed
to move together. Variables that move in the same direction
show positive correlation; those that move in opposite
directions are negatively correlated.
Prepayment rates - rates used to reflect how fast a pool of
assets prepay. The fair value of a financial instrument that can
be prepaid by the issuer or borrower differs from that of an
instrument that cannot be prepaid. When valuing prepayable
instruments, the value of this prepayment option is considered.
Recovery rates/loss given default - these are used as an input
to valuation models and reserves for asset-backed securities
and other credit products as an indicator of severity of losses
on default. Recovery rates are primarily sourced from market
data providers, the value of the underlying collateral, or
inferred from observable credit spreads.
Valuation control
NatWest Group's control environment for the determination of
the fair value of financial instruments includes formalised
procedures for the review and validation of fair values. This
review is performed by an independent price verification (IPV)
team.
IPV is a key element of the control environment. Valuations are
first performed by the business which entered into the
transaction. These valuations are then reviewed by the IPV
team, independent of those trading the financial instruments, in
light of available pricing evidence.
Independent pricing data is collated from a range of sources.
Each source is reviewed for quality and the independent data
applied in the IPV processes using a formalised input quality
hierarchy. Consensus services are one source of independent
data and encompass interest rate, currency, credit, and bond
markets, providing comprehensive coverage of vanilla products
and a wide selection of exotic products.
Where measurement differences are identified through the IPV
process these are grouped by the quality hierarchy of the
independent data. If the size of the difference exceeds defined
thresholds, an adjustment is made to bring the valuation to
within the independently calculated fair value range.
IPV takes place at least monthly, for all fair value financial
instruments. The IPV control includes formalised reporting and
escalation of any valuation differences in breach of established
thresholds.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 339
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
11 Financial instruments – valuation
continued
The quality and completeness of the information gathered in
the IPV process gives an indication as to the liquidity and
valuation uncertainty of an instrument and forms part of the
information considered when determining fair value hierarchy
classifications.
Initial fair value level classification of a financial instrument is
carried out by the IPV team. These initial classifications are
subject to senior management review. Particular attention is
paid to instruments transferring from one level to another, new
instrument classes or products, instruments where the
transaction price is significantly different from the fair value
and instruments where valuation uncertainty is high.
Valuation Committees are made up of valuation specialists and
senior business representatives from various functions and
oversees pricing, reserving and valuations issues. These
committees meet monthly to review and ratify any
methodology changes. The Executive Valuation Committee
meets quarterly to address key material and subjective
valuation issues, to review items escalated by Valuation
Committees and to discuss other relevant industry matters.
The Group model risk policy sets the policy for model
documentation, testing and review. Governance of the model
risk policy is carried out by the Group model risk oversight
committee, which comprises model risk owners and
independent model experts. All models are required to be
independently validated in accordance with the Model Risk
Policy.
Key areas of judgment
Over the years the business has simplified, with most products
classified as level 1 or 2 of the fair value hierarchy. However,
the diverse range of products historically traded by NatWest
Group means some products remain classified as level 3. Level
3 indicates a significant level of pricing uncertainty, where
expert judgment is used. As such, extra disclosures are
required in respect of level 3 instruments .
Over the years the business has simplified, with most products
classified as level 1 or 2 of the fair value hierarchy. However,
the diverse range of products historically traded by NatWest
Group means some products remain classified as level 3. Level
3 indicates a significant level of pricing uncertainty, where
expert judgment is used. As such, extra disclosures are
required in respect of level 3 instruments .
In general, the degree of expert judgment used and hence
valuation uncertainty depends on the degree of liquidity of an
instrument or input.
Where markets are liquid, little judgment is required. However,
when the information regarding the liquidity in a particular
market is not clear, a judgment may need to be made. For
example, for an equity traded on an exchange, daily volumes of
trading can be seen, but for an over the counter (OTC)
derivative, assessing the liquidity of the market with no central
exchange is more challenging.
A key related matter is where a market moves from liquid to
illiquid or vice versa. Where this movement is considered
temporary, the fair value level is not changed. For example, if
there is little market trading in a product on a reporting date
but at the previous reporting date and during the intervening
period the market has been liquid. In this case, the instrument
will continue to be classified at the same level in the hierarchy.
This is to provide consistency so that transfers between levels
are driven by genuine changes in market liquidity and do not
reflect short term or seasonal effects. Material movements
between levels are reviewed quarterly by the Business and IPV.
The breadth and depth of the IPV data allows for a rules-based
quality assessment to be made of market activity, liquidity, and
pricing uncertainty, which assists with the process of allocation
to an appropriate level. Where suitable independent pricing
information is not readily available, the quality assessment will
result in the instrument being assessed as level 3.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 340
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
11 Financial instruments - valuation continued
The table below shows the assets and liabilities held by NatWest Group split by fair value hierarchy level. Level 1 are considered
the most liquid instruments, and level 3 the most illiquid, valued using expert judgment and hence carry the most significant price
uncertainty.
2021
2020
Level 1 Level 2 Level 3 Total
Level 1 Level 2 Level 3 Total
£m £m £m £m
£m £m £m £m
Assets
Trading assets
Loans
—
33,482 721 34,203
— 39,550 225 39,775
Securities 19,563 5,371 21 24,955
21,535 7,599 81 29,215
Derivatives
—
105,222 917 106,139
— 165,441 1,082 166,523
Other financial assets
Loans
—
359 207 566
— 185 168 353
Securities
28,880 7,951 186 37,017
35,972 8,850 167 44,989
Total financial assets held at fair
value
48,443 152,385 2,052 202,880
57,507 221,625 1,723 280,855
As % of total fair value assets
24% 75% 1%
20% 79% 1%
Liabilities
Trading liabilities
Deposits
—
38,658 2 38,660
— 44,062 7 44,069
Debt securities in issue
—
974
—
974
— 1,408 — 1,408
Short positions
20,507 4,456 1 24,964
19,045 7,734 — 26,779
Derivatives
—
100,229 606 100,835
— 159,818 887 160,705
Other financial liabilities
Debt securities in issue
—
1,103
—
1,103
— 1,607 — 1,607
Other deposits
—
568
—
568
— 796 — 796
Subordinated liabilities
—
703
—
703
— 793 — 793
Total financial liabilities held at fair
value
20,507 146,691 609 167,807
19,045 216,218 894 236,157
As % of total fair value liabilities 12% 88% 0%
8% 92% 0%
(1) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred.
(2) For an analysis of debt securities held at mandatory fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Risk and capital
management – Credit risk.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 341
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
11 Financial instruments – valuation
continued
Valuation adjustments
When valuing financial instruments in the trading book,
adjustments are made to mid-market valuations to cover bid-
offer spread, funding and credit risk. These adjustments are
presented in the table below:
Adjustment
2021
£m
2020
£m
Funding – FVA 90 140
Credit – CVA 390 390
Bid – Offer 113 148
Product and deal specific 119 172
712 850
There was a reallocation of FVA to CVA during the period
following an update to the risk management of certain
exposures. The net decrease across CVA and FVA was driven
by reduced exposures, due to increases in interest rates and
trade exit activity. The reduction in bid-offer and product and
deal specific reserves followed reduced risk due to trade exit
activity and LIBOR cessation.
Funding valuation adjustments (FVA)
FVA represents an estimate of the adjustment that a market
participant would make to incorporate funding costs and
benefits that arise in relation to derivative exposures. FVA is
calculated as a portfolio level adjustment and can result in
either a funding charge (positive) or funding benefit (negative).
Funding levels are applied to estimated potential future
exposures. For uncollateralised derivatives, the exposure
reflects the future valuation of the derivative. For collateralised
derivatives, the exposure reflects the difference between the
future valuation of the derivative and the level of collateral
posted.
Credit valuation adjustments (CVA)
CVA represents an estimate of the adjustment to fair value that
is made to incorporate the counterparty credit risk inherent in
derivative exposures. CVA is actively managed by a credit and
market risk hedging process, and therefore movements in CVA
are partially offset by trading revenue on the hedges.
The CVA is calculated on a portfolio basis reflecting an
estimate of the amount a third party would charge to assume
the credit risk.
Collateral held under a credit support agreement is factored
into the CVA calculation. In such cases where NatWest Group
holds collateral against counterparty exposures, CVA is held to
the extent that residual risk remains.
Bid-offer
Fair value positions are required to be marked to exit,
represented by bid (long positions) or offer (short positions)
levels. Non-derivative positions are typically marked directly to
bid or offer prices. However derivative exposures are adjusted
to exit levels by taking bid-offer reserves calculated on a
portfolio basis. The bid-offer approach is based on current
market spreads and standard market bucketing of risk.
Bid-offer spreads vary by maturity and risk type to reflect
different spreads in the market. For positions where there is no
observable quote, the bid-offer spreads are widened in
comparison to proxies to reflect reduced liquidity or
observability.
Netting is applied on a portfolio basis to reflect the value at
which NatWest Group believes it could exit the net risk of the
portfolio, rather than the sum of exit costs for each of the
portfolio’s individual trades. This is applied where the asset and
liability positions are managed as a portfolio for risk and
reporting purposes.
Product and deal specific
On initial recognition of financial assets and liabilities valued
using valuation techniques which have a significant
dependence on information other than observable market data,
any difference between the transaction price and that derived
from the valuation technique is deferred. Such amounts are
recognised in the income statement over the life of the
transaction; when market data becomes observable; or when
the transaction matures or is closed out as appropriate. On 31
December 2021, net gains of £71 million (2020 - £63 million)
were carried forward. During the year, net gains of £103 million
(2020 - £75 million) were deferred and £94 million (2020 - £100
million) were recognised in the income statement.
Where system generated valuations do not accurately recover
market prices, manual valuation adjustments are applied either
at a position or portfolio level. Manual adjustments are subject
to the scrutiny of independent control teams and are subject to
monthly review by senior management.
Own Credit
NatWest Group considers the effect of its own credit standing
when valuing financial liabilities recorded at fair value. Own
credit spread adjustments are made when valuing issued debt
held at fair value, including issued structured notes. An own
credit adjustment is applied to positions where it is believed
that counterparties would consider NatWest Group’s
creditworthiness when pricing trades.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 342
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Additional information
Financial review
11 Financial instruments - valuation continued
Level 3 additional information
For illiquid assets and liabilities, classified as level 3, additional information is provided on the valuation techniques used and price
sensitivity of the products to those inputs. This is to enable the reader to gauge the level of uncertainty that arises from positions
with significant unobservable inputs or modelling parameters.
Level 3 ranges of unobservable inputs
The table below provides additional information on level 3 instruments and inputs. This shows the valuation technique used for the
fair value calculation, the unobservable input or inputs and input range.
2021 2020
Financial instrument
Valuation technique
Unobservable inputs
Units
Low High Low High
Trading assets and Other financial assets
Loans Price-based Price % — 106 — 105
Discount cash flow Credit spreads bps 40 102 69 119
Discount cash flow Discount margin bps 46 55 51 226
Debt securities Price-based Price % — 240 — 232
Equity Shares Price-based Price GBP — 30,378 — 27,737
Price-based Price % — 7 — 80
Discount cash flow Discount margin % 6 8 7 9
Net asset valuation Net asset value % 80 120 80 120
Derivative assets and liabilities
Credit derivatives Credit derivative pricing Credit spreads bps 6 635 2 500
Correlation % (15) 95 (50) 95
Volatility % 30 108 27 80
Upfront points % — 100 — 100
Recovery rate % — 60 10 40
Interest rate & FX Option pricing Correlation % (50) 100 (50) 100
derivatives Volatility % 17 77 17 60
Constant Prepayment
Rate % 2 16 2 18
Mean Reversion % — 92 — 92
Basis volatility bps 8 18 15 21
Inflation volatility % 1 2 1 2
Inflation rate % 2 3 1 2
Equity derivatives Option pricing Correlation % (53) 87 (53) 87
(1) Valuation for private equity investments may be estimated by looking at past prices of similar stocks and from valuation statements where valuations are usually derived from
earnings measures such as EBITDA or net asset value (NAV). Similarly, for equity or bond fund investments, prices may be estimated from valuation or credit statements using NAV
or similar measures.
(2) NatWest Group does not have any material liabilities measured at fair value that are issued with an inseparable third-party credit enhancement.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 343
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Financial review
11 Financial instruments – valuation continued
Level 3 sensitivities
The level 3 sensitivities presented below are calculated at a
trade or low-level portfolio basis rather than an overall portfolio
basis. As individual sensitivities are aggregated with no
reflection of the correlated nature between instruments, the
overall portfolio sensitivity may not be accurately reflected. For
example, some portfolios may be negatively correlated to
others, where a downwards movement in one asset would
produce an upwards movement in another. However, due to
the additive presentation of the above figures this correlation
impact cannot be displayed. As such, the actual potential
downside sensitivity of the total portfolio may be less than the
non-correlated sum of the additive figures as shown in the
below table.
Alternative assumptions
Reasonably plausible alternative assumptions of unobservable
inputs are determined based on a specified target level of
certainty of 90%.
Alternative assumptions are determined with reference to all
available evidence including consideration of the following:
quality of independent pricing information considering
consistency between different sources, variation over time,
perceived tradability or otherwise of available quotes;
consensus service dispersion ranges; volume of trading activity
and market bias (e.g. one-way inventory); day 1 profit or loss
arising on new trades; number and nature of market
participants; market conditions; modelling consistency in the
market; size and nature of risk; length of holding of position;
and market intelligence.
Other considerations
Whilst certain inputs used to calculate CVA, FVA and own
credit adjustments are not based on observable market data,
the uncertainty of these inputs is not considered to have a
significant effect on the net valuation of the related derivative
portfolios and issued debt.
As such, the fair value levelling of the derivative portfolios and
issued debt is not determined by CVA, FVA or own credit
inputs. In addition, any fair value sensitivity driven by these
inputs is not included in the level 3 sensitivities presented.
The table below shows the high and low range of fair value of the level 3 assets and liabilities. This range incorporates the range of
fair value inputs as described in the previous table.
2021
2020
Level 3 Favourable Unfavourable
Level 3 Favourable Unfavourable
£m £m £m
£m £m £m
Assets
Trading assets
Loans
721 10 (10)
225 10 —
Securities
21
—
—
81 — —
Derivatives 917 60 (70)
1,082 80 (80)
Other financial assets
Loans
207 10 (10)
168 20 (10)
Securities
186 20 (20)
167 30 (20)
2,052 100 (110)
1,723 140 (110)
Liabilities
Trading liabilities
Deposits
2
—
—
7 — —
Debt securities in issue
—
—
—
— — —
Short positions
1
—
—
— - -
Derivatives
606 30 (30)
887 50 (40)
Other financial liabilities
—
—
—
— — —
609
30
(30)
894
50
(40)

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 344
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Financial review
11 Financial instruments – valuation continued
Movement in level 3 assets and liabilities
The following table shows the movement in level 3 assets and liabilities in the year.
2021
2020
Trading
Other
Trading
Other
assets financial Total Total
assets financial Total Total
(2) assets (3) assets liabilities
(2) assets (3) assets liabilities
£m £m £m £m
£m £m £m £m
At 1 January 1,388 335 1,723 894
2,233 321 2,554 1,317
Amounts recorded in the income statement (1)
(93) (29) (122) (90)
127 (21) 106 (67)
Amounts recorded in the statement of
comprehensive income
—
23 23
—
— 63 63 —
Level 3 transfers in 125 3 128 20
165 98 263 188
Level 3 transfers out
(104) (6) (109) (168)
(139) — (139) (368)
Purchases/originations (4) 965 452 1,416 305
441 327 768 127
Settlements/other decreases
(47) (364) (411) (28)
(293) (153) (446) (59)
Sales
(573) (17) (590) (321)
(1,148) (301) (1,449) (245)
Foreign exchange and other
(3) (3) (6) (3)
2 1 3 1
At 31 December
1,658 394 2,052 609
1,388 335 1,723 894
Amounts recorded in the income statement in respect
of balances held at year end - unrealised (93) (32) (126) (90)
129 (22) 107 (68)
(1) There were £3 million net losses on trading assets and liabilities (2020 – £194 million net gain) recorded in income from trading activities. Net losses on other instruments of £29
million (2020 – £21 million net losses) were recorded in other operating income and interest income as appropriate.
(2) Trading assets comprise assets held at fair value in trading portfolios.
(3) Other financial assets comprise fair value through other comprehensive income, designated as at fair value through profit or loss and other fair value through profit or loss.
(4) Movement in the period includes new loan originations classified as HTC&S under IFRS 9 and fair valued through other comprehensive income. 2021 purchases include a new
leveraged finance loan of £450 million. As a result of its composition and illiquid nature, pricing is based on unobservable inputs and the judgment of valuation experts.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 345
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11 Financial instruments - valuation continued
Fair value of financial instruments measured at amortised cost on the balance sheet
The following table shows the carrying value and fair value of financial instruments measured at amortised cost on the balance
sheet.
Fair value hierarchy level
Items where
fair value
approximates Carrying
Fair
carrying value value value Level 1 Level 2
Level 3
2021 £bn £bn £bn £bn £bn
£bn
Financial assets
Cash and balances at central banks
177.8
Settlement balances
2.1
Loans to banks
0.1 7.5 7.5
—
5.0
2.5
Loans to customers
359.0 354.1
—
28.0
326.1
Other financial assets - securities
8.6 8.6 4.4 0.7
3.5
2020
Financial assets
Cash and balances at central banks
124.5
Settlement balances
2.3
Loans to banks
0.1 6.9 6.9 — 3.8
3.1
Loans to customers
360.5 359.2 — 25.2
334.0
Other financial assets - securities
9.8 10.1 5.9 1.2
3.0
2021
Financial liabilities
Bank deposits
4.9 21.4 21.0
—
18.7
2.3
Customer deposits
442.4 37.4 37.6
—
18.1
19.5
Settlement balances
2.1
Other financial liabilities - debt securities in issue
47.7 48.6
—
41.4
7.2
Subordinated liabilities
7.7 8.3
—
8.2
0.1
Notes in circulation
3.0
2020
Financial liabilities
Bank deposits
4.4 16.2 16.2 — 11.3
4.9
Customer deposits
371.7 60.0 60.1 — 10.1
50.0
Settlement balances
5.5
Other financial liabilities - debt securities in issue
43.4 44.6 — 34.7
9.9
Subordinated liabilities
9.2 9.8 — 9.7
0.1
Notes in circulation
2.7
The assumptions and methodologies underlying the calculation
of fair values of financial instruments at the balance sheet date
are as follows:
Short-term financial instruments
For certain short-term financial instruments: cash and balances
at central banks, items in the course of collection from other
banks, settlement balances, items in the course of transmission
to other banks, customer demand deposits and notes in
circulation, carrying value is deemed a reasonable
approximation of fair value.
Loans to banks and customers
In estimating the fair value of net loans to customers and banks
measured at amortised cost, NatWest Group’s loans are
segregated into appropriate portfolios reflecting the
characteristics of the constituent loans. Two principal methods
are used to estimate fair value:
(a) Contractual cash flows are discounted using a market
discount rate that incorporates the current spread for the
borrower or where this is not observable, the spread for
borrowers of a similar credit standing. This method is used
for portfolios where counterparties have external ratings:
institutional and corporate lending.
(b) Expected cash flows (unadjusted for credit losses) are
discounted at the current offer rate for the same or similar
products. The current methodology caps all loan values at
par rather than modelling clients’ option to repay loans
early. This approach is adopted for lending portfolios in
Retail Banking, Ulster Bank RoI, Commercial Banking (SME
loans) and Private Banking in order to reflect the
homogeneous nature of these portfolios.
Debt securities and subordinated liabilities
Most debt securities are valued using quoted prices in active
markets or from quoted prices of similar financial instruments
in active markets. Fair values of the remaining population are
determined using market standard valuation techniques, such
as discounted cash flows, adjusting for own credit spreads
where appropriate.
Bank and customer deposits
Fair values of deposits are estimated using discounted cash
flow valuation techniques. Where required, methodologies
can be revised as additional information and valuation
inputs become available.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 346
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12 Financial instruments - maturity analysis
Remaining maturity
This note shows the maturity profile of NatWest Group’s financial assets and liabilities by contractual date of maturity and
contractual cash flows.
The following table shows the residual maturity of financial instruments, based on contractual date of maturity.
2021
2020
Less than
More than
Less than More than
12 months
12 months
Total
12 months 12 months Total
£m
£m
£m
£m £m £m
Assets
Cash and balances at central banks 177,757
—
177,757
124,489 — 124,489
Trading assets
40,263
18,895
59,158
42,037 26,953 68,990
Derivatives
34,538
71,601
106,139
46,244 120,279 166,523
Settlement balances
2,141
—
2,141
2,297 — 2,297
Loans to banks
-
amortised cost
7,425
257
7,682
6,835 120 6,955
Loans to customers - amortised cost 103,689
255,301
358,990
87,531 273,013 360,544
Other financial assets 11,151
34,994
46,145
8,901 46,247 55,148
Liabilities
Bank deposits
13,715
12,564
26,279
12,315 8,291 20,606
Customer deposits
478,801
1,009
479,810
430,283 1,456 431,739
Settlement balances
2,068
—
2,068
5,545 — 5,545
Trading liabilities
41,664
22,934
64,598
45,037 27,219 72,256
Derivatives
34,593
66,242
100,835
47,361 113,344 160,705
Other financilal liabilities 16,060
33,266
49,326
12,403 33,408 45,811
Subordinated liabilities 1,375
7,054
8,429
365 9,597 9,962
Notes in circulation
3,047
—
3,047
2,655 — 2,655
Lease liabilities
238
1,025
1,263
185 1,513 1,698
Assets and liabilities by contractual cash flows up to 20
years
The tables on the following page, show the contractual
undiscounted cash flows receivable and payable, up to a period
of 20 years, including future receipts and payments of interest
of financial assets and liabilities by contractual maturity. The
balances in the following tables do not agree directly with the
consolidated balance sheet, as the tables include all cash flows
relating to principal and future coupon payments, presented on
an undiscounted basis. The tables have been prepared on the
following basis:
Financial assets have been reflected in the time band of the
latest date on which they could be repaid, unless earlier
repayment can be demanded by NatWest Group. Financial
liabilities are included at the earliest date on which the
counterparty can require repayment, regardless of whether or
not such early repayment results in a penalty. If the repayment
of a financial instrument is triggered by, or is subject to, specific
criteria such as market price hurdles being reached, the asset
is included in the time band that contains the latest date on
which it can be repaid, regardless of early repayment.
The liability is included in the time band that contains the
earliest possible date on which the conditions could be fulfilled,
without considering the probability of the conditions being met.
For example, if a structured note is automatically prepaid when
an equity index exceeds a certain level, the cash outflow will be
included in the less than three months period, whatever the
level of the index at the year end. The settlement date of debt
securities in issue, issued by certain securitisation vehicles
consolidated by NatWest Group, depends on when cash flows
are received from the securitised assets. Where these assets
are prepayable, the timing of the cash outflow relating to
securities assumes that each asset will be prepaid at the
earliest possible date. As the repayments of assets and
liabilities are linked, the repayment of assets in securitisations is
shown on the earliest date that the asset can be prepaid, as
this is the basis used for liabilities.
The principal amounts of financial assets and liabilities that are
repayable after 20 years or where the counterparty has no
right to repayment of the principal are excluded from the table,
as are interest payments after 20 years.
The maturity of guarantees and commitments is based on the
earliest possible date they would be drawn in order to evaluate
NatWest Group’s liquidity position.
MFVTPL assets of £165.6 billion (2020 - £235.9 billion) and HFT
liabilities of £165.3 billion (2020 - £232.8 billion) have been
excluded from the following tables.

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 347
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Additional information
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12 Financial instruments – maturity analysis continued
0-3 months 3-12 months 1-3 years 3-5 years 5-
10 years
10-
20 years
2021 £m £m £m £m
£m
£m
Assets by contractual maturity up to 20 years
Cash and balances at central banks
177,757
—
—
—
—
—
Derivatives held for hedging
(23) (32) 72 15
10
17
Settlement balances
2,141
—
—
—
—
—
Loans to banks - amortised cost
5,735 1,689 21
—
—
—
Loans to customers - amortised cost
65,760 43,144 63,979 45,057
73,044
90,115
Other financial assets (1)
3,924 7,576 10,467 8,048
7,444
5,523
Finance lease
290 340 746 504
704
377
255,584 52,717 75,285 53,624
81,202
96,032
Liabilities by contractual maturity up to 20 years
Bank deposits
13,292 421 566 12,003
—
—
Customer deposits
473,123 5,440 1,155 73
4
19
Settlement balances
2,068
—
—
—
—
—
Derivatives held for hedging
(57) (31) 561 155
(152)
(198)
Other financial liabilities
6,967 9,293 16,953 10,062
7,905
292
Subordinated liabilities
66 1,604 3,481 2,170
1,496
563
Other liabilities- Notes in circulation
3,047
—
—
—
—
—
Lease liabilities
74 161 220 167
281
251
498,580
16,888
22,936
24,630
9,534
927
Guarantees and commitments - notional amount
Guarantees
(2)
2,055
—
—
—
—
—
Commitments (3)
118,536
—
—
—
—
—
120,591
—
—
—
—
—
2020
Assets by contractual maturity up to 20 years
Cash and balances at central banks
124,489 — — —
—
—
Derivatives held for hedging
14 18 96 —
12
6
Settlement balances
2,297 — — —
—
—
Loans to banks - amortised cost
5,600 1,245 — —
1
110
Loans to customers
-
amortised cost
47,507 46,718 65,138 58,680
81,544
88,155
Other financial assets (1)
4,019 5,919 12,592 10,791
11,855
5,774
Finance lease
48 366 840 671
895
545
183,974 54,266 78,666 70,142
94,307
94,590
Liabilities by contractual maturity up to 20 years
Bank deposits
11,217 1,078 3,241 5,038
—
—
Customer deposits
421,763 8,528 1,407 23
26
20
Settlement balances
5,545 — — —
—
—
Derivatives held for hedging
36 (17) 94 3
64
(2)
Other financial liabilities
4,716 8,144 15,558 11,470
7,358
254
Subordinated liabilities
73 685 4,387 3,444
923
562
Other liabilities- Notes in circulation
2,655 — — —
—
—
Lease liabilities
51 135 294 245
429
497
446,056 18,553 24,981 20,223
8,800
1,331
Guarantees and commitments - notional amount
Guarantees
(2)
2,244 — — —
—
—
Commitments (3)
121,922 — — —
—
—
124,166 — — —
—
—
(1) Other financial assets excludes equity shares.
(2) NatWest Group is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations. NatWest Group expects most guarantees it provides to expire
unused.
(3) NatWest Group has given commitments to provide funds to customers under undrawn formal facilities, credit lines and other commitments to lend subject to certain conditions being
met by the counterparty. NatWest Group does not expect all facilities to be drawn, and some may lapse before drawdown .

Notes to the consolidated financial statements
NatWest Group Annual Report and Accounts 2021 348
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13 Trading assets and liabilities
Trading assets and liabilities comprise assets and liabilities held at fair value and classified as held-for-trading. Financial
instruments are classified as held for trading if they are held for the purpose of selling or repurchasing them in the short term , to
make a spread between purchase and sale price or held to take advantage of movements in prices and yields.
For accounting policy information see Accounting policies note 10.
2021
2020
Assets
£m
£m
Loans
Reverse repos
20,742
19,404
Collateral given
12,047
18,760
Other loans
1,414
1,611
Total loans
34,203
39,775
Securities
Central and local government
- UK
6,919
4,184
-
US
3,329
5,149
- other 10,929
16,436
Financial institutions and corporate 3,778
3,446
Total securities 24,955
29,215
Total 59,158
68,990
Liabilities
Deposits
Repos
19,389
19,036
Collateral received
17,718
23,229
Other deposits
1,553
1,804
Total deposits
38,660
44,069
Debt securities in issue
974
1,408
Short positions
24,964
26,779
Total
64,598
72,256

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 349
Financial statements
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Additional information
Financial review
14 Derivatives
Derivative is a term covering a wide range of financial instruments that derive their fair value from an underlying rate or price, for
example interest rates or exchange rates (the underlying). NatWest Group uses derivatives as a part of its trading activities, to
manage its own risks such as interest rate, foreign exchange, or credit risk and in certain customer transactions. This note shows
contracted volumes of derivatives, how they are used for hedging purposes and more specifically the effects of the application of
hedge accounting.
For accounting policy information see Accounting policies note 10 and 15.
2021
2020
Notional Assets Liabilities
Notional Assets Liabilities
£bn £m £m
£bn £m £m
Exchange rate contracts
3,167 38,517 39,286
3,328 52,239 55,107
Interest rate contracts
8,919 67,458 61,206
10,703 114,115 105,214
Credit derivatives
14 154 343
15 161 376
Equity and commodity contracts
— 10
—
1 8 8
106,139 100,835
166,523 160,705
NatWest Group applies hedge accounting to reduce the
accounting mismatch caused in the income statement by using
derivatives to hedge the following risks: interest rate, foreign
exchange and net investment in foreign operations.
NatWest Group’s interest rate hedging relates to the
management of NatWest Group’s non-trading structural
interest rate risk, caused by the mismatch between fixed
interest rates and floating interest rates on its financial
instruments. NatWest Group manages this risk within approved
limits. Residual risk positions are hedged with derivatives,
principally interest rate swaps.
Suitable larger fixed rate financial instruments are subject to
fair value hedging; the remaining exposure, where possible, is
hedged by derivatives designated as cash flow hedges.
Cash flow hedges of interest rate risk relate to exposures to the
variability in future interest payments and receipts due to the
movement of benchmark interest rates on forecast transactions
and on financial assets and financial liabilities. This variability in
cash flows is hedged by interest rate swaps, which convert
variable cash flows into fixed. For these cash flow hedge
relationships, the hedged items are actual and forecast variable
interest rate cash flows arising from financial assets and
financial liabilities with interest rates linked to the relevant
benchmark rates, most notably LIBOR, EURIBOR, SONIA and
the Bank of England Official Bank Rate. The variability in cash
flows due to movements in the relevant benchmark rate is
hedged; this risk component is identified using the risk
management systems of NatWest Group and encompasses the
majority of cash flow variability risk.
Fair value hedges of interest rate risk involve interest rate
swaps transforming the fixed interest rate risk in financial
assets and financial liabilities to floating. The hedged risk is the
risk of changes in the hedged item’s fair value attributable to
changes in the benchmark interest rate risk component of the
hedged item. The significant benchmarks identified as risk
components are LIBOR, EURIBOR and SONIA. These risk
components are identified using the risk management systems
of NatWest Group and encompass the majority of the hedged
item’s fair value risk.
NatWest Group hedges the exchange rate risk of its net
investment in foreign currency denominated operations with
currency borrowings and forward foreign exchange contracts.
NatWest Group reviews the value of the investments’ net
assets, executing hedges where appropriate to reduce the
sensitivity of capital ratios to foreign exchange rate movement.
Hedge accounting relationships will be designated where
required.
Exchange rate risk also arises in NatWest Group where
payments are denominated in currencies other than the
functional currency. Residual risk positions are hedged with
forward foreign exchange contracts, fixing the exchange rate
the payments will be settled in. The derivatives are documented
as cash flow hedges.
For all cash flow hedging and fair value hedge relationships,
and net investment hedging, NatWest Group determines that
there is an adequate level of offsetting between the hedged
item and hedging instrument at inception and on an ongoing
basis. This is achieved by comparing movements in the fair
value of the expected highly probable forecast interest cash
flows/fair value of the hedged item attributable to the hedged
risk with movements in the fair value of the expected changes
in cash flows from the hedging interest rate swap. Hedge
effectiveness is assessed on a cumulative basis over a time
period management determines to be appropriate. NatWest
Group uses either the actual ratio between the hedged item
and hedging instrument(s) or one that minimises hedge
ineffectiveness to establish the hedge ratio for hedge
accounting. Hedge ineffectiveness is measured and recognised
in the income statement as it arises.
IBOR reform - NatWest Group in the year continued to apply,
for relationships directly affected by interest rate benchmark
reform, Interest Rate Benchmark Reform Amendments to IAS
39 and IFRS 7 issued September 2019 (“Phase 1 relief”) and
Interest Rate Benchmark Reform – Phase 2 Amendments to IAS
39 and IFRS 7 issued August 2020 (“Phase 2 relief”).
Significant transitions in the year were the GBP, JPY and CHF
derivatives subject to cash flow and fair value hedging
transitioned as part of the LCH ‘big bang’ conversion in
December 2021. The swaps were restructured to reprice off
the appropriate risk free rate from the next repricing date post
31 December 2021 plus a spread adjustment. All impacted
hedge accounting relationships had their designations updated
to reflect this transition.
USD cash flow and fair value hedges of interest rate risk that
mature post 30 June 2023 continue to be directly affected by
interest rate benchmark reform.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 350
Financial statements
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management
Additional information
Financial review
14 Derivatives continued
Included in the table below are derivatives held for hedging purposes as follows:
2021
2020
Changes in
Changes in fair
fair value used
value used for
for hedge hedge
Notional
Assets Liabilities ineffectiveness (1)
Notional
Assets Liabilities
ineffectiveness (1)
£bn £m
£m
£m
£bn
£m
£m £m
Fair value hedging
Interest rate contracts
65.6 1,176
2,057
897
65.5
1,878
3,844 (875)
Cash flow hedging
Interest rate contracts
133.1 952
1,149
(931)
128.8
2,035
1,210 217
Exchange rate contracts
7.3 30
109
27
10.8
37
116 (55)
Net investment hedging
Exchange rate contracts
0.5 11
1
7
0.2
—
9 11
206.5 2,169
3,316
—
205.3
3,950
5,179 (702)
IFRS netting/Clearing
house settlements
(2,125)
(3,196)
(3,857)
(5,049)
44
120
93
130
(1) The change in fair value used for hedge ineffectiveness includes instruments that were decrecognised in the year.
The notional of hedging instruments affected by interest rate benchmark reform is as follows:
2021
2020
£bn
£bn
Fair value hedging
EURIBOR
(1)
—
13.6
GBP LIBOR
—
11.2
USD LIBOR (2) 20.2
26.6
Other currency LIBOR
—
1.1
Cash flow hedging
EURIBOR (1)
—
5.2
GBP LIBOR
—
51.7
SOFR (3) 0.2
—
USD LIBOR (2) 3.1
2.7
(1) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for
EURIBOR has ended.
(2) In 2021 the FCA declared that USD LIBOR will be non-representative post 30 June 2023; at the time of preparing the 2020 disclosures this date was expected to be 31 December
2021.
(3) Hedge relationships subject to reform are those where either the hedged item or the hedging instrument is subject to the IBOR reform.
(4) Notional of £1 billion cross currency derivative contracts in cash flow hedge relationships will convert to repricing off the relevant risk-free rate at the first repricing date post
cessation.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 351
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14 Derivatives continued
The following table shows the period in which the notional of hedging contract ends:
0-3 3-12 1-3 3-5 5-10 10-20 20+
months months years years years years years Total
2021 £bn £bn £bn £bn £bn £bn £bn £bn
Fair value hedging
Hedging assets - interest rate risk
0.9 2.5 5.5 5.7 6.2 4.9 4.5 30.2
Hedging liabilities - interest rate risk 1.1 4.2 11.8 9.3 8.4 0.6 0.0 35.4
Cash flow hedging
Hedging assets
Interest rate risk
5.4 8.1 14.3 24.5 11.4
—
—
63.7
Average fixed interest rate (%)
1.40
1.19
1.35
0.65
0.82
—
—
0.97
Hedging liabilities
Interest rate risk 8.8 21.1 33.0 3.3 2.5 0.7
—
69.4
Average fixed interest rate (%)
0.50
0.24
0.41
0.47
1.01
4.55
0.44
Hedging assets
Exchange rate risk
—
—
—
—
—
—
—
—
Hedging liabilities
Exchange rate risk
0.1 2.4 3.5 1.3
—
—
—
7.3
Net investment hedging
Exchange rate risk
0.5
—
—
—
—
—
—
0.5
2020
Fair value hedging
Hedging assets - interest rate risk
1.2 2.3 6.3 7.4 8.9 5.1 4.2 35.4
Hedging liabilities - interest rate risk
— 0.6 10.1 11.6 7.1 0.5 0.2 30.1
Cash flow hedging
Hedging assets
Interest rate risk
0.7 10.5 19.3 13.9 10.5 0.1 — 55.0
Average fixed interest rate (%)
1.28
1.22
1.51
1.06
0.92
3.12
—
1.23
Hedging liabilities
Interest rate risk
1.6 28.9 36.8 3.4 2.4 0.7 — 73.8
Average fixed interest rate (%)
1.14
0.78
0.37
1.25
0.65
4.55
—
0.64
Hedging assets
Exchange rate risk
— — 0.1 — — — — 0.1
Hedging liabilities
Exchange rate risk
— 3.3 5.3 1.0 1.1 — — 10.7
Net investment hedging
Exchange rate risk
0.1 0.1 — — — — — 0.2
For cash flow hedging of exchange rate risk, the average foreign exchange rates applicable across the relationships were as below
for the main currencies hedged.
2021
2020
INR/GBP
106.58
95.29
USD/GBP
1.38
1.36
CHF/GBP
1.25 n/a
JPY/GBP
132.93
132.93
JPY/EUR
n/a
120.21
CNH/GBP
8.74
n/a
For net investment hedging of exchange rate risk, the average foreign exchange rates applicable were as below for the main
currencies hedged.
2021
2020
SEK/GBP
11.74
11.15
DKK/GBP
8.85
8.28
NOK/GBP
12.12
12.73
AED/USD
3.67
n/a
USD/GBP
1.32 n/a

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 352
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14 Derivatives continued
The table below analyses assets and liabilities subject to hedging derivatives.
Impact on
Changes in fair
hedged items
Carrying value
Impact on
value used as
ceased to be
of hedged
hedged items
a
basis to
adjusted for
assets and
included in
determine
hedging
liabilities carrying value ineffectiveness (1)
gains or losses
2021
£m
£m
£m
£m
Fair value hedging
-
interest rate
Loans to banks and customers - amortised cost 6,603 701 (478)
69
Other financial assets - securities 30,882 518 (1,576)
—
Total 37,485 1,219 (2,054)
69
Other financial liabilities - debt securities in issue
34,371 454 953
—
Subordinated liabilities
6,235 (9) 255
—
Total 40,606 445 1,208
—
Cash flow hedging - interest rate
Loans to banks and customers
-
amortised cost
63,025 1,984
Other financial assets - securities 714 26
Total 63,739 2,010
Cash flow hedging - interest rate
Bank and customer deposits
68,383 (1,084)
Other financial liabilities - debt securities in issue
1,006 (21)
Total
69,389 (1,105)
Cash flow hedging - exchange rate
Loans to banks and customer - amortised cost
21
—
Other financial assets
-
securities
2
—
Total
23
—
Other financial liabilities - debt securities in issue
6,337 (5)
Subordinated liabilities
742 (12)
Other
200 (10)
Total
7,279 (27)
2020
Fair value hedging - interest rate
Loans to banks and customers - amortised cost
6,858 1,228 323
77
Other financial assets - securities
35,754 2,268 1,568
—
Total
42,612 3,496 1,891
77
Other financial liabilities - debt securities in issue
29,317 1,336 (746)
—
Subordinated liabilities
6,441 293 (268)
10
Total
35,758 1,629 (1,014)
10
Cash flow hedging - interest rate
Loans to banks and customers - amortised cost
53,335 (601)
Other financial assets - securities
1,550 (16)
Total
54,885 (617)
Cash flow hedging - interest rate
Bank and customer deposits
72,880 409
Other financial liabilities
-
debt securities in issue
1,014 13
Total
73,894 422
Cash flow hedging - exchange rate
Loans to banks and customer
-
amortised cost
112 1
Other financial assets - securities
30 —
Total
142 1
Cash flow hedging - exchange rate
Other financial liabilities - debt securities in issue
6,272 20
Subordinated liabilities
4,194 36
Other
152 (2)
Total
10,618 54
(1) The change in fair value used for hedge ineffectiveness includes instruments that were derecognised in the year .

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 353
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14 Derivatives continued
The following risk exposures will be affected by interest rate benchmark reform (notional, hedged adjustment):
2021
2020
Hedged
Hedged
Notional
adjustment
Notional adjustment
£bn
£m
£bn
£m
Fair value hedging
EURIBOR (1)
—
—
15.1
27
GBP LIBOR
—
—
11.4
1,178
USD LIBOR (2) 21.8 7
28.1 (427)
Other currency LIBOR
—
—
1.1 1
Cash flow hedging
EURIBOR (1)
—
—
4.1
(76)
GBP LIBOR
—
—
10.5
(473)
USD LIBOR
(2) 3.3 21
2.7 (61)
BOE Base rate (3)
—
—
40.7
(156)
ECB REFI rate (3)
—
—
1.2
—
SONIA (3)
—
—
0.6
4
(1) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for
EURIBOR has ended.
(2) In 2021 the FCA declared that USD LIBOR will be non-representative post 30 June 2023; at the time of preparing the 2020 disclosures this date was expected to be 31 December
2021.
(3) Hedge relationships subject to reform are those where either the hedged item or the hedging instrument is subject to the IBOR reform.
(4) Notional of £6.5 billion GBP LIBOR hedged items in cash flow hedge relationships will convert to repricing off SONIA at the first repricing date post cessation.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 354
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Risk and capital management
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14 Derivatives continued
The following table shows an analysis of the pre-tax cash flow hedge reserve and foreign exchange hedge reserve.
2021
2020
Foreign
Foreign
Cash flow
exchange
Cash flow
exchange
hedge reserve
hedge reserve
hedge reserve
hedge reserve
£m
£m
£m
£m
Continuing
Interest rate risk (295)
—
695
—
Foreign exchange risk
23
53
22
(13)
De-designated
Interest rate risk (297)
—
(424)
—
Foreign exchange risk
10
(759)
(1)
(775)
Total
(559)
(706)
292
(788)
2021
2020
Foreign
Foreign
Cash flow
exchange
Cash flow
exchange
hedge reserve
hedge reserve
hedge reserve
hedge reserve
£m
£m
£m
£m
Amount recognised in equity
Interest rate risk
(700)
318
—
Foreign exchange risk
13
88
3
(57)
Total (687)
88
321
(57)
Amount transferred from equity to earnings
Interest rate risk to net interest income
(181)
—
(19)
—
Interest rate risk to non-interest income (1)
20
—
—
—
Foreign exchange risk to net interest income (4)
2
(35)
—
Foreign exchange risk to non-interest income
1
(2)
—
2
Foreign exchange risk to operating expenses 3
—
4
—
Total
(161)
—
(50)
2
(1) There was £20 million reclassified from the cash flow reserve to earnings due to forecasted cash flows that are no longer expected to occur.
Hedge ineffectiveness recognised in other operating income comprises:
2021
2020
2019
£m
£m
£m
Fair value hedging
(Losses)/gains on hedged items attributable to the hedged risk
(846)
877
610
Gains/(losses) on the hedging instruments
897
(875)
(585)
Fair value hedging ineffectiveness
51
2
25
Cash flow hedging
Interest rate risk
(26)
22
23
Cash flow hedging ineffectiveness
(26)
22
23
Total
25
24
48
The main sources of ineffectiveness for interest rate risk hedge accounting relationships are:
 The effect of the counterparty credit risk on the fair value of the interest rate swap which is not reflected in the fair value of the
hedged item attributable to the change in interest rate (fair value hedge).
 Differences in the repricing basis between the hedging instrument and hedged cash flows (cash flow hedge); and
 Upfront present values on the hedging derivatives where hedge accounting relationships have been designated after the trade
date (cash flow hedge and fair value hedge).

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 355
Financial statements
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Risk and capital management
Additional information
Financial review
15 Loan impairment provisions
Loan exposure and impairment metrics
There is a risk that customers and counterparties fail to meet their contractual obligation to settle outstanding amounts, known as
expected credit losses (ECL). The calculation of ECL considers historic, current and forward-looking information to determine the
amount we do not expect to recover. ECL is recognised on current and potential exposures, and contingent liabilities.
For accounting policy information see Accounting policies note 11. Further disclosures on credit risk and information on ECL
methodology are shown from page 197.
The table below summarises loans and credit impairment measures within the scope of IFRS 9 Expected credit losses framework.
2021
2020
£m
£m
Loans - amortised cost
Stage 1
330,824
287,124
Stage 2
33,981
78,917
Stage 3
5,022
6,358
Of which: individual
1,215
2,292
Of which: collective
3,807
4,066
369,827
372,399
ECL provisions (1)
- Stage 1
302
519
- Stage 2
1,478
3,081
-
Stage 3
2,026
2,586
Of which: individual
363
831
Of which: collective
1,663
1,755
3,806
6,186
ECL provision coverage (2,3)
- Stage 1 (%)
0.09
0.18
- Stage 2 (%)
4.35
3.90
-
Stage 3 (%)
40.34
40.67
1.03
1.66
Continuing operations
Impairment (releases)/losses
ECL (release)/charge (3,4)
(1,278)
3,131
Stage 1
(1,377)
(89)
Stage 2
(187)
2,601
Stage 3
286
619
Of which: individual
20
194
Of which: collective
266
425
Amounts written off
876
937
Of which: individual
455
191
Of which: collective
421
746
(1) Includes £5 million (2020 - £6 million) related to assets classified as FVOCI.
(2) ECL provisions coverage is calculated as total ECL provisions divided by third party loans – amortised cost and FVOCI.
(3) Includes a £3 million charge (2020 - £12 million charge) related to other financial assets, of which £2 million release (2020 - £2 million charge) related to assets classified as
FVOCI; and £34 million release (2020 - £28 million charge) related to contingent liabilities.
(4) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
(5) The table shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to Financial instruments within the scope of the IFRS 9 ECL
framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £176.3 billion (2020 –
£122.8 billion) and debt securities of £44.9 billion (2020 – £53.8 billion).

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 356
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
15 Loan impairment provisions continued
Credit risk enhancement and mitigation
For information on Credit risk enhancement and mitigation held
as security, refer to Risk and capital management – Credit risk
enhancement and mitigation section.
Critical accounting policy: Loan impairment provisions
Accounting policies note 11 sets out how the expected loss
approach is applied. At 31 December 2021, customer loan
impairment provisions amounted to £3,806 million (2020 -
£6,186 million). A loan is impaired when there is objective
evidence that the cash flows will not occur in the manner
expected when the loan was advanced. Such evidence
includes, changes in the credit rating of a borrower, the failure
to make payments in accordance with the loan agreement,
significant reduction in the value of any security, breach of
limits or covenants, and observable data about relevant
macroeconomic measures.
The impairment loss is the difference between the carrying
value of the loan and the present value of estimated future
cash flows at the loan's original effective interest rate.
The measurement of credit impairment under the IFRS
expected loss model depends on management’s assessment of
any potential deterioration in the creditworthiness of the
borrower, its modelling of expected performance and the
application of economic forecasts. All three elements require
judgments that are potentially significant to the estimate of
impairment losses. For further information and sensitivity
analysis, refer to Risk and capital management – Measurement
uncertainty and ECL sensitivity analysis section.
IFRS 9 ECL model design principles
Refer to Credit risk – IFRS 9 ECL model design principles
section for further details.
Approach for multiple economic scenarios (MES)
The base scenario plays a greater part in the calculation of
ECL than the approach to MES. Refer to Credit risk – Economic
loss drivers - Probability weightings of scenarios section for
further details.
16 Other financial assets
Other financial assets consist of debt securities, equity shares and loans that are not held for trading. Balances consist of local and
central government securities, a component part of NatWest Group’s liquidity portfolio.
For accounting policy information see Accounting policy 10.
Debt securities
Central and local government
Other
Equity
Other
UK US
Other
debt
Total shares loans Total
2021
£m £m £m £m £m £m £m £m
Mandatory fair value through profit or loss
—
—
—
6 6 13 298 317
Fair value through other comprehensive
income (1)
11,938 10,086 5,604 9,058 36,686 312 268 37,266
Amortised cost
3,821 156 81 4,504 8,562
—
—
8,562
Total
15,759 10,242 5,685 13,568 45,254 325 566 46,145
2020
Mandatory fair value through profit or loss
— — — 88 88 14 338 440
Fair value through other comprehensive
income
(1)
17,458 11,742 6,802 8,591 44,593 294 15 44,902
Amortised cost
4,997 235 116 4,458 9,806 — — 9,806
Total
22,455 11,977 6,918 13,137 54,487 308 353 55,148
(1) Upon initial recognition, the Group occasionally irrevocably designates some of its equity investments as equity instruments at FVOCI when they meet the definition of equity under
IAS 32 Financial instruments: presentation, are not held for trading or they are held for strategic purposes. Such classification is determined on an instrument by instrument basis.
Gains and losses on these equity instruments are not recycled to the income statement and dividends are recognised in profit or loss except when they represent a recovery of part
of the cost of the instrument, in which case such gains are recorded in OCI. Equity instruments at FVOCI are not subject to an impairment assessment.
Equity shares disposed during 2020 included SABB (£383 million), VISA Inc. (£186 million), and Vocalink (£16 million).
Dividends on FVOCI equity shares include £4 million (2020: £5 million) in relation to the equity holding in OTC Derivative Limited
and £1 million (2020: £2 million) for VISA Inc. Dividends received in relation to equity shares disposed during the year were nil
(2020: £15 million for NWG’s equity holding in SABB).

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 357
Financial statements
Strategic report
Governance
Risk and capital
management
Additional information
Financial review
17 Intangible assets
Intangible assets, such as internally generated software and goodwill generated on business combinations are not physical in
nature. This note presents the cost of the assets, which is the amount NatWest Group initially paid or incurred, additions and
disposals during the year, and any amortisation or impairment. Amortisation is a charge that reflects the usage of the asset and
impairment is a reduction in value arising from specific events identified during the year.
For accounting policy information see Accounting policies notes 5 and 6.
2021
2020
Goodwill Other (1)
Total
Goodwill Other (1) Total
Cost
£m £m
£m
£m £m £m
At 1 January
9,939 2,592
12,531
9,980 2,293 12,273
Currency translation and other adjustments
—
29
29
— (1) (1)
Additions
—
479
479
— 348 348
Disposals and write
-
off of fully amortised assets
—
(50)
(50)
(41) (48) (89)
At 31 December
9,939 3,050
12,989
9,939 2,592 12,531
Accumulated amortisation and impairment
At 1 January
4,332 1,544
5,876
4,373 1,278 5,651
Currency translation and other adjustments
—
31
31
— 1 1
Disposals and write-off of fully amortised assets
—
(28)
(28)
(41) (26) (67)
Impairment of intangible assets
85
2
87
— 9 9
Amortisation charge for the year
—
300
300
— 282 282
At 31 December
4,417 1,849
6,266
4,332 1,544 5,876
Net book value at 31 December
5,522 1,201
6,723
5,607 1,048 6,655
(1) Principally internally generated software.
Intangible assets and goodwill are reviewed for indicators of
impairment. In 2021 £85 million of goodwill was impaired due to
a reduction in the recoverable value.
NatWest Group’s goodwill acquired in business combinations
analysed by reportable segment is in Note 4 Segmental analysis.
It is reviewed annually at 31 December for impairment. In 2021
goodwill in the Retail segment was impaired by £85 million. No
other impairment was indicated at 31 December 2021 or 2020.
Impairment testing involves the comparison of the carrying
value of each cash-generating unit (CGU) with its recoverable
amount. The carrying values of the segments reflect the equity
allocations made by management, which are consistent with
NatWest Group’s capital targets.
Recoverable amount is the higher of fair value less costs of
disposal and value in use. Fair value is the price that would be
received to sell an asset in an orderly transaction between
market participants. Value in use is the present value of
expected future cash flows from the CGU.
The recoverable amounts for all CGUs at 31 December 2021
were based on value in use, using management's latest five-
year revenue and cost forecasts. These are discounted cash
flow projections over five years. The forecast is then
extrapolated in perpetuity using a long-term growth rate to
compute a terminal value, which comprises the majority of the
value in use. The long-term growth rates have been based on
expected growth of the CGUs. The pre-tax risk discount rates
are based on those observed to be applied to businesses
regarded as peers of the CGUs.
Critical accounting policy: Goodwill
Critical estimates
Impairment testing involves a number of judgments. The key
judgments are the five-year cash flow forecast, the long-term
growth rate used to derive the terminal value, and the discount
rate. Future value in use is primarily affected by changes in
profitability and changes in discount rate. Adverse changes
could lead to value in use falling below carrying value. The most
likely cause for this would be a failure to meet budgets,
including cost targets, or external downgrades in the UK
economy.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 358
Financial statements
Strategic report
Governance
Risk and capital
management
Additional information
Financial review
17 Intangible assets continued
The impact of reasonably possible changes to the more significant variables in the value in use calculations is presented below.
This reflects the sensitivity of the VIU to each key assumption on its own. It is possible that more than one change may occur at the
same time.
Consequential impact of
1% adverse
Consequential impact of
5% adverse
Recoverable
Assumptions
amount
movement
movement
Terminal
Pre
-
tax
Cost:
exceeded
Terminal
growth
discount
income carrying
Discount
growth Forecast
Forecast
Goodwill
rate
rate
ratio (1)
value
rate
rate
Income
cost
31 December 2021
£bn % % % £bn
£bn
£bn £bn
£bn
Retail Banking
2.6 1.6 13.9 51.6 6.8
(1.8)
(0.8) (2.1)
(1.0)
Commercial Banking
2.6 1.6 13.9 52.3 6.3
(1.9)
(0.8) (2.0)
(1.0)
RBS International
0.3 1.6 12.1 37.0 2.6
(0.6)
(0.3) (0.4)
(0.1)
31 December 2020
Retail Banking
2.7 1.6 13.7 48.3 5.9
(1.8)
(0.8) (2.0)
(0.9)
Commercial Banking
2.6 1.6 13.7 53.7 1.5
(1.5)
(0.5) (1.8)
(0.9)
RBS International
0.3 1.6 12.1 42.7 1.1
(0.4)
(0.2) (0.3)
(0.1)
(1) Average Cost:income ratio % over the 5-year forecast period
The following table gives the percentage change in key assumptions that would reduce the headroom of CGUs to nil.
2021
2020
Terminal Pre-
tax
Pre-
tax
growth
discount
Forecast
Forecast
Terminal
discount
Forecast Forecast
Change in key assumptions to reduce
rate rate income
cost
growth rate
rate
income cost
headroom to nil (%)
% % %
%
%
%
% %
Retail Banking
(139.2) 8.1 (16.1)
32.7
(25.4)
6.2
(14.6) 33.9
Commercial Banking
(47.0) 6.6 (15.7)
32.8
(4.0)
1.3
(4.1) 8.2
RBS International
(85.2) 10.3 (30.3)
87.2
(10.8)
4.4
(18.6) 52.8
18 Other assets
Other assets are not financial assets and reflect a grouping of assets that are not large enough to present separately on the
balance sheet.
2021
2020
£m
£m
Interests in associates (1)
716
449
Property, plant and equipment (2)
4,230
4,418
Pension schemes in net surplus (Note 5)
602
723
Prepayments
360 328
Accrued income
248
216
Tax recoverable
190 192
Deferred tax (Note 7)
1,195
901
Acceptances
225 272
Other
476
391
Other assets
8,242
7,890
(1) Includes interest in Business Growth Fund £700 million (2020 - £442 million).
(2) The estimated useful lives of NatWest Group’s property, plant and equipment are: freehold buildings and long leasehold 50 years, short leaseholds for unexpired period of lease,
property adaptation costs 10 to 15 years, computer equipment up to 5 years and other equipment 4 to 15 years.
19 Other financial liabilities
Other financial liabilities consist of customer deposits designated at fair value and debt securities in issue classified as designated at
fair value and amortised cost.
For accounting policy information see Accounting policies notes 10 and 14.
2021
2020
£m
£m
Customer deposits - designated as at fair value through profit or loss
568
796
Debt securities in issue
-
designated as at fair value through profit or loss
1,103
1,607
- amortised cost 47,655
43,408
Total
49,326
45,811

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 359
Financial statements
Strategic report
Governance
Risk and capital
management
Additional information
Financial review
20 Subordinated liabilities
Subordinated liabilities are debt securities that, in the event of winding up or bankruptcy, rank below other liabilities for interest
payments and repayment. The subordinated liabilities presented in the note are classified as designated at fair value and amortised
cost.
For accounting policy information see Accounting policies notes 10 and 14.
2021
2020
£m
£m
Dated loan capital
8,051
8,530
Undated loan capital
259
1,287
Preference shares
119
145
8,429
9,962
Certain preference shares issued by the company are classified as liabilities; these securities remain subject to the capital
maintenance rules of the Companies Act 2006.
Capital
2021
2020
New issue
treatment
£m
£m
NatWest Group plc
£1,000 million 3.622% dated notes 2030 (callable between May 2025 to August 2025) Tier 2
—
996
US$850 million 3.032% dated notes 2035 (callable November 2030) Tier 2
—
634
£1000 million 2.105% dated notes 2031 (callable between August 2026 to November 2026) Tier 2
996
—
€750 million 1.043% dated notes 2032 (callable between June 2027 to
September 2027)
Tier 2
638
—
1,634
1,630
Redemptions
NatWest Group plc
US$2,250 million 6.13% dated notes 2022 (partial redemption) Tier 2
226
499
US$1,000 million 6.10% dated notes 2023 (partial redemption) Tier 2
57
358
US$2,000
million 7.5% dated notes 2020
Tier 2
—
1,528
US$762 million 7.648% undated notes (partial redemption) Ineligible 45
497
US$106 million floating rate undated notes (callable on any interest payment date) Ineligible 77
—
US$2,650 million 8.625% dated notes 2021 (callable August 2021)
(1)
Tier 2 1,914
—
US$2,250 million 5.125% dated notes 2024 (partial redemption) Tier 2
729
—
US$2,000 million 6% dated notes 2023 (partial redemption)
Tier 2
436
—
3,484
2,882
NatWest Markets Plc
US$125.6 million floating rate notes 2020 Tier 2
—
97
€145.6 million floating rate dated notes 2023 (partial redemption) Tier 2
20
—
£31 million 7.38% notes (partial redemption) Tier 2
29
—
£19 million 5.63% notes (partial redemption)
Tier 2
20
—
69
97
National Westminister Bank Plc
£300 million 6.5% subordinated notes 2021 (not callable) Tier 2
300
—
€10 million floating rate notes (callable quarterly) Upper Tier 2
9
—
€178 million floating rate notes (callable quarterly)
Upper Tier 2
152
—
US$193 million floating rate notes (callable semi-annually) Upper Tier 2 138
—
US$229 million floating rate notes (callable semi-annually) Upper Tier 2 167
—
US$285 million floating rate notes (callable semi-annually) Upper Tier 2
201
—
£35 million 11.5% notes (callable December 2022) (partial redemption) Upper Tier 2
3
—
£140 million 9% cumulative preference shares of £1 (not callable) Tier 1
24
—
994
NWM N.V. and subsidiaries
US$650 million 6.425% dated notes 2043 (partial redemption) Ineligible
73
187
€15 million 6.00% notes 2020
Tier 2
—
11
73
198
(1) In July 2021, paid in equity reclassified to liabilities as the result of a call in August 2021 of US$2.65 billion AT1 capital notes which were subsequently redeemed in August 2021.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 360
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
21 Other liabilities
Other liabilities are amounts due to third parties that are not financial liabilities including lease liabilities, amounts due for goods
and services that have been received but not invoiced, tax due to HMRC, and retirement benefit liabilities. Liabilities which have a
level of uncertainty regarding their timing or the future cost to settle them are included in other liabilities as provisions for liabilities
and charges.
2021
2020
Other liabilities
£m
£m
Lease liabilities (Note 23) 1,263
1,698
Provisions for liabilities and charges
1,268
1,852
Retirement benefit liabilities (Note 5)
114
121
Accruals
1,508
990
Deferred income
319
361
Current tax
12
63
Deferred tax (Note 7)
359
291
Acceptances
225
272
Other liabilities (1)
729
740
5,797
6,388
(1) Other liabilities include liabilities of disposal groups of £5 million (2020: nil). See Note 8 for further information.
Financial
Litigation commitments
Customer
and other
and
redress (1) regulatory (4) Property (3) guarantees
Other (2)
Total
Provisions for liabilities and charges
£m £m £m £m
£m
£m
At 1 January 2021 749 365 271 178
289
1,852
Expected credit loss impairment release
—
—
—
(83)
—
(83)
Currency translation and other movements
(5)
—
2 (2)
(7)
(12)
Charge to income statements
173 307 113
—
196
789
Release to income statement
(25) (86) (118)
—
(82)
(311)
Provisions utilised
(418) (309) (37)
—
(203)
(967)
At 31 December 2021
474 277 231 93
193
1,268
(1) Includes payment protection insurance provision which reflects the estimated cost of PPI redress attributable to claims prior to the Financial Conduct Authority (FCA) complaint
deadline of 29 August 2019. All pre-deadline complaints have been processed which removes complaint volume estimation uncertainty from the provision estimate. NatWest Group
continues to conclude remaining bank-identified closure work and conclude cases with the Financial Ombudsmen Service.
(2) Other materially comprises provisions relating to restructuring costs.
(3) Property provision materially includes dilapidation provisions. Release in property provision includes the effect of purchase of freeholds for properties where the group was the
primary leaseholder.
(4) Majority of charge in the year and utilisation of litigation provisions relates to FCA investigation into money laundering.
Provisions are liabilities of uncertain timing or amount and are
recognised when there is a present obligation as a result of a
past event, the outflow of economic benefit is probable and the
outflow can be estimated reliably. Any difference between the
final outcome and the amounts provided will affect the reported
results in the period when the matter is resolved.
For accounting policy information see Accounting policies note
8.
Critical accounting policy: Provisions for liabilities
The key judgment is involved in determining whether a present
obligation exists. There is often a high degree of uncertainty
and judgment is based on the specific facts and circumstances
relating to individual events in determining whether there is a
present obligation. Judgment is also involved in estimation of
the probability, timing and amount of any outflows. Where
NatWest Group can look to another party such as an insurer to
pay some or all of the expenditure required to settle a
provision, any reimbursement is recognised when, and only
when, it is virtually certain that it will be received.
Estimates - Provisions are liabilities of uncertain timing or
amount and are recognised when there is a present obligation
as a result of a past event, the outflow of economic benefit is
probable and the outflow can be estimated reliably.
Any difference between the final outcome and the amounts
provided will affect the reported results in the period when the
matter is resolved.
 Customer redress: Provisions reflect the estimated cost of
redress attributable to claims where it is determined that a
present obligation exists.
 Litigation and other regulatory: NatWest Group is engaged
in various legal proceedings, both in the UK and in overseas
jurisdictions, including the US. For further information in
relation to legal proceedings and discussion of the
associated uncertainties, refer to Note 27.
 Property: This includes provision for contractual costs such
as rates associated with vacant properties.
 Other provisions: These materially comprise provisions for
onerous contracts and restructuring costs. Onerous
contract provisions comprise an estimate of the costs
involved in fulfilling the terms and conditions of contracts
net of any expected benefits to be received. This includes
provision for contractual costs such as rates associated
with vacant properties. Redundancy and restructuring
provisions comprise the estimated cost of restructuring,
including redundancy costs where an obligation exists.
Background information for all material provisions is given in
Note 27
.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 361
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
22 Share capital and other equity
Share capital consists of ordinary shares and preference shares and is measured as the number of shares allotted and fully paid
multiplied by the nominal value of a share. Other equity includes paid-in equity, merger reserves, capital redemption reserve and
own shares held.
For accounting policy information see Accounting policies note 14.
Number of shares
2021
2020
2021
2020
Allotted, called up and fully paid
£m
£m
000s
000s
Ordinary shares of £1
11,468
12,129
11,467,982
12,129,165
Cumulative preference shares of £1
1
1
483
900
Non
-
cumulative preference shares of US$0.01
(1)
—
—
10
10
(1) No shares were redeemed in 2021 or 2020. The company announced on 1 February 2022 that it had given notice to holders of the redemption on 31 March 2022 of the Series U
Non-cumulative dollar preference shares.
Movement in allotted, called up and fully paid ordinary shares
£m Number of shares 000s
At 1 January 2020
12,094 12,093,909
Shares issued
35 35,256
At 1 January 2021
12,129 12,129,165
Shares issued
38 37,584
Shares redeemed
(699) (698,767)
At 31 December 2021
11,468 11,467,982
Ordinary shares
There is no authorised share capital under the company’s
constitution. At 31 December 2021, the directors had authority
granted at the 2021 Annual General Meeting to issue up to
£608,328,288 nominal of ordinary shares other than by pre-
emption to existing shareholders. This figure was reduced to
£578,791,771 to reflect the reduction in issued share capital
resulting from the off-market buyback announced on 19 March
2021.
On 6 February 2019 the company held a General Meeting and
shareholders approved a special resolution to give the
company authority to make off-market purchases of its
ordinary shares from HM Treasury (or its nominee) at such
times as the directors may determine is appropriate. Full details
of the proposal are set out in the Circular and Notice of
General Meeting. This authority was renewed at the Annual
General Meeting in 2021 and shareholders will be asked to
renew the authority at the Annual General Meeting in 2022.
The company utilised the authority it obtained at the 2020 AGM
to make an off-market purchase of 590,730,325 ordinary
shares (nominal value £590,730,325) in the company from HMT
on 19 March 2021, at a price of 190.50p per ordinary share for
the total consideration of £1,125,341,269, representing 4.86% of
the company's issued ordinary share capital. The company
cancelled 390,730,325 of the purchased ordinary shares and
held the remaining 200,000,000 ordinary shares in treasury.
The company has used a total of 19,062,290 treasury shares to
satisfy the exercise of options and the vesting of share awards
under the employee share plans.
At the Annual General Meeting in 2021 shareholders authorised
the company to make market purchases of up to 1,216,656,575
ordinary shares in the company. The directors utilised the
authority obtained at the 2021 AGM to conduct a share
buyback programme (the Programme) of up to £750 million, as
announced to the market on 30 July 2021. The Programme’s
purpose is to reduce the ordinary share capital of NatWest
Group. Taking into account the reduction in issued ordinary
share capital which occurred as a result of the off-market
buyback announced on 19 March 2021, the maximum number
of ordinary shares that could be purchased by the company
under the Programme was 1,157,583,542. The Programme
commenced on 2 August 2021 and, as at 31 December 2021,
310,802,416 ordinary shares (nominal value £310,802,416) had
been purchased by the company at an average purchase price
of 217.5796p per ordinary share for the total consideration of
£676,242,656.
A further 29,735,044 ordinary shares (nominal value
£29,735,044) were purchased by the company from 1 January
to 18 January 2022 at an average purchase price of 245.5264p
per ordinary share for the total consideration of £73,007,375.
All of the purchased ordinary shares were cancelled,
representing 2.93% of the company's issued ordinary share
capital. Shareholders will be asked to renew the authorisation
at the Annual General Meeting in 2022.
In 2021, the company issued 38 million ordinary shares of £1
each in connection with employee share plans.
In 2021 NatWest Group paid an interim dividend of £347 million,
or 3.0p per ordinary share (2020 - nil).
The company has announced that the directors have
recommended a final dividend of £844.3 million, or 7.5p per
ordinary share (2020 – £364 million, or 3p) subject to
shareholder approval at the Annual General Meeting on 28
April 2022.
If approved, payment will be made on 4 May 2022 to
shareholders on the register at the close of business on 18
March 2022. The ex-dividend date will be 17 March 2022.
Cumulative preference shares
At the 2021 Annual General Meeting, shareholders authorised
the company to make an off-market purchase of preference
shares in the company. The company announced on 15
December 2021 that it had utilised this authority to purchase
157,546 5.5% cumulative preference shares (nominal value
£157,546), representing 39.39% of the share class, at a
purchase price of 102% for the total consideration of £160,697
and 259,314 11.00% cumulative preference shares (nominal
value £259,314), representing 51.86% of the share class, at a
purchase price of 155% for the total consideration of £401,937.
The company cancelled all of the purchased preference shares.
Non-cumulative preference shares
Non-cumulative preference shares entitle their holders to
periodic non-cumulative cash dividends at specified fixed rates
for each series payable out of distributable profits of the
company.
The company may redeem some or all of the non-cumulative
preference shares from time to time at the rates detailed in the
table on the next page plus dividends otherwise payable for the
then current dividend period to the date of redemption.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 362
Financial statements
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Risk and capital management
Additional information
Financial review
22 Share capital and other equity continued
Number of shares Redemption Redemption
Non-cumulative preference shares classified as equity
in issue Interest rate date on or after price per share
Shares of US$0.01 - Series U
10,130
Floating 29 September 2017
US$100,000
(1) Preference shares where distributions are discretionary are classified as equity.
On a winding-up or liquidation of the company, the holders of
the non-cumulative preference shares are entitled to receive,
out of any surplus assets available for distribution to the
company's shareholders (after payment of arrears of dividends
on the cumulative preference shares up to the date of
repayment) pari passu with the cumulative preference shares
and all other shares of the company ranking pari passu with
the non-cumulative preference shares as regards participation
in the surplus assets of the company, a liquidation distribution
per share equal to the applicable redemption price detailed in
the table above, together with an amount equal to dividends for
the then current dividend period accrued to the date of
payment, before any distribution or payment may be made to
holders of the ordinary shares as regards participation in the
surplus assets of the company.
Except as described above, the holders of the non-cumulative
preference shares have no right to participate in the surplus
assets of the company.
Holders of the non-cumulative preference shares are not
entitled to receive notice of or attend general meetings of the
company except if any resolution is proposed for adoption by
the shareholders of the company to vary or abrogate any of
the rights attaching to the non-cumulative preference shares or
proposing the winding-up or liquidation of the company. In any
such case, they are entitled to receive notice of and to attend
the general meeting of shareholders at which such resolution is
to be proposed and are entitled to speak and vote on such
resolution (but not on any other resolution). In addition, in the
event that, prior to any general meeting of shareholders, the
company has failed to pay in full the most recent dividend
payment due on the series U non-cumulative dollar preference
shares, the holders shall be entitled to receive notice of, attend,
speak and vote at such meeting on all matters together with
the holders of the ordinary shares. In these circumstances only,
the rights of the holders of the non-cumulative preference
shares so to vote shall continue until the company shall have
resumed the payment in full of the dividends in arrears.
Paid-in equity - comprises equity instruments issued by the
company other than those legally constituted as shares.
Additional Tier 1 instruments issued by NatWest Group plc
having the legal form of debt are classified as equity under
IFRS. The coupons on these instruments are non-cumulative
and payable at the company’s discretion. In the event NatWest
Group’s CET1 ratio falls below 7% any outstanding instruments
will be converted into ordinary shares at a fixed price
Capital recognised for regulatory purposes cannot be
redeemed without Prudential Regulation Authority consent. This
includes ordinary shares, preference shares and additional Tier
1 instruments.
2021
2020 2019
£m
£m £m
Additional Tier 1 notes
US$2.0 billion 7.5% notes callable August 2020 (1)
—
—
1,277
US$1.15 billion 8% notes callable August 2025 (1) 735
735 735
US$2.65 billion 8.625% notes callable August 2021
(2) —
2,046 2,046
US$1.5 billion 6.000% notes callable
December 2025 - June 2026 (3) 1,220
1,220
—
GBP£1.0 billion 5.125% notes callable
May
-
November 2027
(4) 998
998
—
GBP£0.4 billion – March 2021 issuance (5) 399
—
—
US$0.75 billion – June 2021 issuance (6) 538
—
—
3,890
4,999 4,058
(1) Issued in August 2015. In the event of conversion, converted into ordinary shares at a price of $3.606 nominal per £1 share.
(2) Issued in August 2016. In the event of conversion, converted into ordinary shares at a price of $2.284 nominal per £1 share. In July 2021, paid-in equity reclassified to liabilities as
the result of a call in August 2021 of US$2.65 billion AT1 Capital notes.
(3) Issued in June 2020. In the event of conversion, converted into ordinary shares at a price of £1.754 (translated at applicable exchange rate) per £1 share.
(4) Issued in November 2020. In the event of conversion, converted into ordinary shares at a price of £1.754 nominal per £1 share.
(5) Issued in March 2021. In the event of conversion, converted into ordinary shares at a price of £1.754 nominal per £1 share.
(6) Issued in June 2021. In the event of conversion, converted into ordinary shares at a price of £1.754 (translated at applicable exchange rate) per £1 share.
Merger reserve - the merger reserve comprises the premium on
shares issued to acquire NatWest Bank Plc less goodwill
amortisation charged under previous GAAP.
Capital redemption reserve - under UK companies legislation,
when shares are redeemed or purchased wholly or partly out
of the company's profits, the amount by which the company's
issued share capital is diminished must be transferred to the
capital redemption reserve. The capital maintenance provisions
of UK companies legislation apply to the capital redemption
reserve as if it were part of the company’s paid up share
capital. On 15 June 2017, the Court of Session approved a
reduction of NatWest plc capital so that the amounts which
stood to the credit of the capital redemption reserve were
transferred to retained earnings. The nominal value of the
shares bought back from HM Treasury in March 2021 and via
the Programme during 2021 have been transferred to the
Capital redemption reserve.
Own shares held - at 31 December 2021, 15 million ordinary
shares of £1 each of the company (2020 - 16 million) were held
by employee share trusts in respect of share awards and
options granted to employees. During the year, the employee
share trusts purchased no ordinary shares and delivered 1
million ordinary shares in satisfaction of the exercise of options
and the vesting of share awards under the employee share
plans. The company retains the flexibility to use newly issued
shares, shares purchased by the NatWest Group Employee
Share Ownership Trust and any available treasury shares to
satisfy obligations under its employee share plans. The
company does not use performance conditions or targets
based on earnings per share (EPS), total shareholder return
(TSR), and net asset value (NAV) in connection with its
employee share plans.
As part of the shares bought back from HM Treasury in March
2021, the company transferred 200 million ordinary shares to
treasury. The company has used a total of 19,062,290 treasury
shares to satisfy the exercise of options and the vesting of
share awards under the employee share plans. The balance of
ordinary shares held in treasury as at 31 December 2021 was
180,937,710.
NatWest Group plc optimises capital efficiency by maintaining
reserves in subsidiaries, including regulated entities. Certain
preference shares and subordinated debt are also included
within regulatory capital. The remittance of reserves to the
company or the redemption of shares or subordinated capital
by regulated entities may be subject to maintaining the capital
resources required by the relevant regulator.
UK law prescribes that only the reserves of the company are
taken into account for the purpose of making distributions and
in determining permissible applications of the share premium
account.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 363
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
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

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 364
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Additional information
Financial review
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
£m
£m
Nature of operating lease assets on the balance sheet
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

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 365
Financial statements
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Risk and capital management
Additional information
Financial review
24 Structured entities
A structured entity (SE) is an entity that has been designed such that voting or similar rights are not the dominant factor in
deciding who controls the entity, for example when any voting rights relate to administrative tasks only and the relevant activities
are directed by means of contractual arrangements. SEs are usually established for a specific, limited purpose. They do not carry
out a business or trade and typically have no employees. They take a variety of legal forms - trusts, partnerships and companies -
and fulfil many different functions where these can be a medium for a single transaction or portfolio of similar transactions. SEs
are established as investment or funding vehicles, within the NatWest Group and for client transactions.
Consolidated structured entities
Securitisations
In a securitisation, assets, or interests in a pool of assets, are
transferred generally to an SE which then issues liabilities to
third party investors. The majority of securitisations are
supported through liquidity facilities or other credit
enhancements. NatWest Group arranges securitisations to
facilitate client transactions and undertakes own-asset
securitisations to sell or to fund portfolios of financial assets.
NatWest Group also acts as an underwriter and depositor in
securitisation transactions in both client and proprietary
transactions.
NatWest Group involvement in client securitisations takes a
number of forms. It may: sponsor or administer a securitisation
programme; provide liquidity facilities or programme-wide
credit enhancement; and purchase securities issued by the
vehicle.
Other credit risk transfer securitisations
NatWest Group also transfers credit risk on originated loans
and mortgages without the transfer of assets to a SE. As part
of this, NatWest Group enters into credit derivative and
financial guarantee contracts with consolidated SEs. At 31
December 2021, debt securities in issue by such SEs (and held
by third parties) were £867 million (2020 - £772 million). The
associated loans and mortgages at 31 December 2021 were
£7,137 million (2020 - £10,027 million). At 31 December, ECL in
relation to non-defaulted assets was reduced by £28 million
(2020 - £183 million) as a result of financial guarantee
contracts with consolidated SEs.
Covered debt programme
Group companies have assigned loans to customers and debt
investments to bankruptcy remote limited liability partnerships
to provide security for issues of debt securities. NatWest Group
retains all of the risks and rewards of these assets and
continues to recognise them. The partnerships are consolidated
by NatWest Group and the related covered bonds included
within other financial liabilities. At 31 December 2021, £8,965
million (2020 - £10,758 million) of loans to customers and nil
(2020 - £318 million) of debt investments provided security for
debt securities in issue and other borrowing of £3,512 million
(2020 - £4,105 million).
Lending of own issued securities
NatWest Group has issued, retained, and lent debt securities
under securities lending arrangements. Under standard terms
in the UK and US markets, the recipient has an unrestricted
right to sell or repledge collateral, subject to returning
equivalent securities on maturity of the transaction. NatWest
Group retains all of the risks and rewards of own issued
liabilities lent under such arrangements and does not recognise
them. At 31 December 2021, £1,494 million (2020 - £1,893
million) of secured own issued liabilities have been retained and
lent under securities lending arrangements. At 31 December
2021, £1,564 million (2020 - £2,029 million) of loans and other
debt instruments provided security for secured own issued
liabilities that have been retained and lent under securities
lending arrangements .
Unconsolidated structured entities
NatWest Group’s interest in unconsolidated structured entities is analysed below.
2021
2020
Asset
Asset
backed Investment
backed
Investment
securitisation funds and
securitisation
funds and
vehicles others
Total
vehicles
others
Total
£m £m
£m
£m
£m
£m
Trading assets and derivatives
Trading assets
490 117
607
319
46
365
Derivative assets 251 18
269
441
16
457
Derivative liabilities
(170) (1)
(171)
(319)
(21)
(340)
Total 571 134
705
441
41
482
Non trading assets
Loans to customers 1,692 361
2,053
1,400
497
1,897
Other financial assets 3,645 379
4,024
3,892
170
4,062
Total 5,337 740
6,077
5,292
667
5,959
Liquidity facilities/loan commitments
1,403 135
1,538
1,482
204
1,686
Maximum exposure
7,311 1,009
8,320
7,215
912
8,127

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 366
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Risk and capital management
Additional
information
Financial review
25 Asset transfers
This note provides an overview of asset transfers which do not qualify for derecognition and therefore continue to be recognised in
NatWest Group’s balance sheet.
For accounting policy information see Accounting policies note 4.
Transfers that do not qualify for derecognition
NatWest Group enters into securities repurchase, lending and
total return transactions in accordance with normal market
practice which includes the provision of additional collateral if
necessary. Under standard terms in the UK and US markets,
the recipient has an unrestricted right to sell or repledge
collateral, subject to returning equivalent securities on
settlement of the transaction.
Securities sold under repurchase transactions and transactions
with the substance of securities repurchase agreements are not
derecognised if NatWest Group retains substantially all the risks
and rewards of ownership. The fair value (and carrying value)
of securities transferred under such transactions included on
the balance sheet, are set out below. All of these securities
could be sold or repledged by the holder.
2021
2020
The following assets have failed derecognition (1)
£m
£m
Trading assets
13,084
20,526
Loans to bank - amortised cost
38
5
Loans to customers - amortised cost
1,837
39
Other financial assets
11,746
11,542
Total
26,705
32,112
(1) Associated liabilities were £24,747 million (2020 – £31,932 million).
Assets pledged as collateral
NatWest Group pledges collateral with its counterparties in respect of derivative liabilities and bank and stock borrowings.
2021
2020
Assets pledged against liabilities
£m
£m
Trading assets
23,601
28,728
Loans to banks - amortised cost
62
49
Loans to customers
-
amortised cost
20,108
15,939
Other financial assets (1) 3,624
4,966
Total 47,395
49,682
(1) Includes assets pledged for pension derivatives and stock borrowings.
As part of the covered debt programme £8,965 million of loans to customers and other debt instruments (2020 – £11,076 million)
have been transferred to bankruptcy remote limited liability partnerships within the NatWest Group to provide collateral for issues
of debt securities and other borrowing by the NatWest Group of £3,512 million (2020 – £4,105 million). See Structured Entities Note.
Own asset securitisations
In own-asset securitisations, the pool of assets held by the SE is either originated by NatWest Group or, in the case of whole loan
programmes, purchased from third parties.
The table below analyses the asset categories for those own-asset securitisations where the transferred assets continue to be
recorded on NatWest Group’s balance sheet.
2021
2020
Debt Securities in issue
Debt Securities in issue
Held by
Held by
Held by
Held by
third
NatWest
third NatWrst
Assets parties Group (1) Total
Assets parties Group (1) Total
Asset Type
£m £m £m £m
£m £m £m £m
Mortgages
-
Rol
1,244
—
1,314 1,314
1,921 243 1,848 2,091
Cash deposits 42
146
1,286
2,067
(1) Debt securities retained by NatWest Group may be pledged with central banks.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 367
Financial statements
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Risk and capital management
Additional information
Financial review
26 Capital resources
NatWest Group’s regulatory capital is assessed against minimum requirements that are set out under the Capital Requirements
Regulation to determine the strength of its capital base.
This note shows a reconciliation of shareholders’ equity to regulatory capital.
PRA transitional basis
2021
2020
£m
£m
Shareholders’ equity (excluding non-controlling interests)
Shareholders’ equity 41,796
43,860
Preference shares - equity (494)
(494)
Other equity instruments
(3,890)
(4,999)
37,412
38,367
Regulatory adjustments and deductions
Own credit 21
(1)
Defined benefit pension fund adjustment (465)
(579)
Cash flow hedging reserve
395
(229)
Deferred tax assets (761)
(760)
Prudential valuation adjustments (274)
(286)
Goodwill and other intangible assets
(6,312)
(6,182)
Foreseeable ordinary dividends (846)
(364)
Foreseeable charges (825)
—
Foreseeable pension contributions (365)
(266)
Adjustment under IFRS 9 transitional arrangements
621
1,747
Other regulatory adjustments (5)
—
(8,816)
(6,920)
CET1 capital
28,596
31,447
Additional Tier 1 (AT1) capital
Qualifying instruments and related share premium 3,875
4,983
Qualifying instruments and related share premium subject to phase out
571
690
Qualifying instruments issued by subsidiaries and held by third parties subject to phase out
—
140
AT1 capital 4,446
5,813
Tier 1 capital
33,042
37,260
Qualifying Tier 2 capital
Qualifying instruments and related share premium 4,935
4,882
Qualifying instruments issued by subsidiaries and held by third parties 314
1,191
Other regulatory adjustments 457
400
Tier 2 capital
5,706
6,473
Total regulatory capital
38,748
43,733
It is NatWest Group policy to maintain a strong capital base, to
expand it as appropriate and to utilise it efficiently throughout
its activities to optimise the return to shareholders while
maintaining a prudent relationship between the capital base
and the underlying risks of the business. In carrying out this
policy, NatWest Group has regard to the supervisory
requirements of the PRA. The PRA uses capital ratios as a
measure of capital adequacy in the UK banking sector,
comparing a bank's capital resources with its risk-weighted
assets (the assets and off-balance sheet exposures are
weighted to reflect the inherent credit and other risks); by
international agreement, the Pillar 1 capital ratios should be not
less than 8% with a Common Equity Tier 1 component of not
less than 4.5%. NatWest Group has complied with the PRA’s
capital requirements throughout the year.
A number of subsidiaries and sub-groups within NatWest
Group, principally banking entities, are subject to various
individual regulatory capital requirements in the UK and
overseas. Furthermore, the payment of dividends by
subsidiaries and the ability of members of NatWest Group to
lend money to other members of NatWest Group may be
subject to restrictions such as local regulatory or legal
requirements, the availability of reserves and financial and
operating performance.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 368
Financial statements
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Risk and capital management
Additional information
Financial review
27 Memorandum items
Contingent liabilities and commitments
NatWest Group provides its customers with a variety of services to support their businesses, such as guarantees. These are
reported as commitments. Contingent liabilities are possible obligations dependent on a future event or present obligations which
are either not probable or cannot be measured reliably.
For accounting policy information see Accounting policies note 8.
The amounts shown in the table below are intended only to provide an indication of the volume of business outstanding at 31
December 2021. Although NatWest Group is exposed to credit risk in the event of a customer’s failure to meet its obligations, the
amounts shown do not, and are not intended to, provide any indication of NatWest Group's expectation of future losses.
More than More than
2021
2020
1 year but 3 years but
Less than less than less than Over
1 year
3 years
5 years
5 years
£m £m £m £m £m
£m
Guarantees
993 321 195
546
2,055
2,244
Other contingent liabilities 1,005 435 43
521
2,004
2,321
Standby facilities, credit lines and other commitments 60,029 26,775 27,136
7,368
121,308
124,167
Contingent liabilities and commitments 62,027 27,531 27,374
8,435
125,367
128,732
(1) The maturity of contingent liabilities and commitment is based on the expiry of the agreement between NatWest Group and the customer.
Banking commitments and contingent obligations, which have
been entered into on behalf of customers and for which there
are corresponding obligations from customers, are not included
in assets and liabilities. NatWest Group's maximum exposure to
credit loss, in the event of its obligation crystallising and all
counterclaims, collateral or security proving valueless, is
represented by the contractual nominal amount of these
instruments included in the table above. These commitments
and contingent obligations are subject to NatWest Group's
normal credit approval processes.
Guarantees – NatWest Group gives guarantees on behalf of
customers. A financial guarantee represents an irrevocable
undertaking that NatWest Group will meet a customer's
specified obligations to third party if the customer fails to do so.
The maximum amount that NatWest Group could be required
to pay under a guarantee is its principal amount as disclosed in
the table above. NatWest Group expects most guarantees it
provides to expire unused.
Other contingent liabilities - these include standby letters of
credit, supporting customer debt issues and contingent
liabilities relating to customer trading activities such as those
arising from performance and customs bonds, warranties and
indemnities.
Standby facilities and credit lines - under a loan commitment,
NatWest Group agrees to make funds available to a customer
in the future. Loan commitments, which are usually for a
specified term, may be unconditionally cancellable or may
persist, provided all conditions in the loan facility are satisfied
or waived. Commitments to lend include commercial standby
facilities and credit lines, liquidity facilities to commercial paper
conduits and unutilised overdraft facilities.
Other commitments - these include documentary credits, which
are commercial letters of credit providing for payment by
NatWest Group to a named beneficiary against presentation of
specified documents, forward asset purchases, forward
deposits placed and undrawn note issuance and revolving
underwriting facilities, and other short-term trade related
transactions.
Contractual obligations for future expenditure not provided for in the accounts
The following table shows contractual obligations for future expenditure not provided for in the accounts at the year end.
2021
2020
£m
£m
Capital expenditure on property, plant and equipment 16
15
Contracts to purchase goods or services (1) 682
729
698
744
(1) Of which due within 1 year: £301 million (2020 – £267 million).

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 369
Financial statements
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Risk and capital management
Additional information
Financial review
27 Memorandum items continued
Trustee and other fiduciary activities
In its capacity as trustee or other fiduciary role, NatWest Group
may hold or place assets on behalf of individuals, trusts,
companies, pension schemes and others. The assets and their
income are not included in NatWest Group's financial
statements. NatWest Group earned fee income of £280 million
(2020 - £245 million; 2019 - £250 million) from these activities.
The Financial Services Compensation Scheme
The Financial Services Compensation Scheme (FSCS), the UK's
statutory fund of last resort for customers of authorised
financial services firms, pays compensation if a firm is unable to
meet its obligations. The FSCS funds compensation for
customers by raising management expenses levies and
compensation levies on the industry. In relation to protected
deposits, each deposit-taking institution contributes towards
these levies in proportion to their share of total protected
deposits on 31 December of the year preceding the scheme
year (which runs from 1 April to 31 March), subject to annual
maxima set by the Prudential Regulation Authority. In addition,
the FSCS has the power to raise levies on a firm that has
ceased to participate in the scheme and is in the process of
ceasing to be authorised for the costs that it would have been
liable to pay had the FSCS made a levy in the financial year it
ceased to be a participant in the scheme.
Litigation and regulatory matters
NatWest Group plc and certain members of NatWest Group are
party to legal proceedings and involved in regulatory matters,
including as the subject of investigations and other regulatory
and governmental action (Matters) in the United Kingdom (UK),
the United States (US), the European Union (EU) and other
jurisdictions.
NatWest Group recognises a provision for a liability in relation
to these Matters when it is probable that an outflow of
economic benefits will be required to settle an obligation
resulting from past events, and a reliable estimate can be made
of the amount of the obligation.
In many of these Matters, it is not possible to determine
whether any loss is probable, or to estimate reliably the amount
of any loss, either as a direct consequence of the relevant
proceedings and regulatory matters or as a result of adverse
impacts or restrictions on NatWest Group’s reputation,
businesses and operations. Numerous legal and factual issues
may need to be resolved, including through potentially lengthy
discovery and document production exercises and
determination of important factual matters, and by addressing
novel or unsettled legal questions relevant to the proceedings in
question, before a liability can reasonably be estimated for any
claim. NatWest Group cannot predict if, how, or when such
claims will be resolved or what the eventual settlement,
damages, fine, penalty or other relief, if any, may be,
particularly for claims that are at an early stage in their
development or where claimants seek substantial or
indeterminate damages.
There are situations where NatWest Group may pursue an
approach that in some instances leads to a settlement
agreement. This may occur in order to avoid the expense,
management distraction or reputational implications of
continuing to contest liability, or in order to take account of the
risks inherent in defending claims or regulatory matters, even
for those Matters for which NatWest Group believes it has
credible defences and should prevail on the merits. The
uncertainties inherent in all such Matters affect the amount and
timing of any potential outflows for both Matters with respect
to which provisions have been established and other contingent
liabilities.
It is not practicable to provide an aggregate estimate of
potential liability for our legal proceedings and regulatory
matters as a class of contingent liabilities.
The future outflow of resources in respect of any Matter may
ultimately prove to be substantially greater than or less than
the aggregate provision that NatWest Group has recognised.
Where (and as far as) liability cannot be reasonably estimated,
no provision has been recognised. NatWest Group expects that
in future periods, additional provisions, settlement amounts and
customer redress payments will be necessary, in amounts that
are expected to be substantial in some instances. Please refer
to Note 21 for information on material provisions.
Material Matters in which NatWest Group is currently involved
are set out below. We have provided information on the
procedural history of certain Matters, where we believe
appropriate, to aid the understanding of the Matter.
For a discussion of certain risks associated with NatWest
Group’s litigation and regulatory matters, see the Risk factor
relating to legal, regulatory and governmental actions and
investigations set out on page 425.
Litigation
Residential mortgage-backed securities (RMBS) litigation in
the US
NatWest Group companies continue to defend RMBS-related
claims in the US in which the plaintiff, the Federal Deposit
Insurance Corporation (FDIC), alleges that certain disclosures
made in connection with the relevant offerings of RMBS
contained materially false or misleading statements and/or
omissions regarding the underwriting standards pursuant to
which the mortgage loans underlying the RMBS were issued. In
Q4 2021, NWMSI settled RMBS claims by the State of New
Mexico for an amount that was covered by an existing
provision. In addition, NWMSI previously agreed to settle a
purported RMBS class action entitled New Jersey Carpenters
Health Fund v. Novastar Mortgage Inc. et al. for US$55.3
million. This was paid into escrow pending court approval of
the settlement, which was granted in March 2019, but which
remains the subject of an appeal by a class member who does
not want to participate in the settlement.
London Interbank Offered Rate (LIBOR) and other rates
litigation
NWM Plc and certain other members of NatWest Group,
including NatWest Group plc, are defendants in a number of
class actions and individual claims pending in the United States
District Court for the Southern District of New York (SDNY)
with respect to the setting of LIBOR and certain other
benchmark interest rates. The complaints allege that certain
members of NatWest Group and other panel banks violated
various federal laws, including the US commodities and
antitrust laws, and state statutory and common law, as well as
contracts, by manipulating LIBOR and prices of LIBOR-based
derivatives in various markets through various means.
Several class actions relating to USD LIBOR, as well as more
than two dozen non-class actions concerning USD LIBOR, are
part of a co-ordinated proceeding in the SDNY. In December
2021, the United States Court of Appeals for the Second Circuit
(US Court of Appeals), reversing a December 2016 decision of
the SDNY, held that plaintiffs in these cases have adequately
asserted the court’s personal jurisdiction over NWM Plc and
other non-US banks, including with respect to antitrust class
action claims on behalf of over-the-counter plaintiffs and
exchange-based purchaser plaintiffs.

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Litigation and regulatory matters
In the same decision, the appellate court affirmed the SDNY’s
prior decision that plaintiffs who purchased LIBOR-based
instruments from third parties (as opposed to the defendants)
lack antitrust standing to pursue such claims. The appellate
court remanded these matters to the SDNY for further
proceedings in light of its rulings. A separate appeal concerning
the SDNY’s dismissal of a fraud class action on behalf of lender
plaintiffs remains pending in the US Court of Appeals. In March
2020, NatWest Group companies finalised a settlement
resolving the class action on behalf of bondholder plaintiffs
(those who held bonds issued by non-defendants on which
interest was paid from 2007 to 2010 at a rate expressly tied to
USD LIBOR). The amount of the settlement (which was covered
by an existing provision) has been paid into escrow pending
court approval of the settlement.
The non-class claims filed in the SDNY include claims that the
FDIC is asserting on behalf of certain failed US banks. In July
2017, the FDIC, on behalf of 39 of those failed US banks,
commenced substantially similar claims against NatWest Group
companies and others in the High Court of Justice of England
and Wales. The action alleges collusion with regard to the
setting of USD LIBOR and that the defendants breached UK
and European competition law, as well as asserting common
law claims of fraud under US law. The defendant banks
consented to a request by the FDIC for discontinuance of the
claim in respect of 20 failed US banks, leaving 19 failed US
banks as claimants. The UK proceedings are at the disclosure
stage.
In addition, there are two class actions relating to JPY LIBOR
and Euroyen TIBOR. The first class action, which relates to
Euroyen TIBOR futures contracts, was dismissed by the SDNY
in September 2020 on jurisdictional and other grounds, and the
plaintiffs have commenced an appeal to the US Court of
Appeals. The second class action, which relates to other
derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR,
was dismissed by the SDNY in relation to NWM Plc and other
NatWest Group companies in September 2021. That dismissal
may be the subject of a future appeal .
In addition to the above, five other class action complaints were
filed against NatWest Group companies in the SDNY, each
relating to a different reference rate. In February 2017, the
SDNY dismissed the case relating to Euribor for lack of
personal jurisdiction and in August 2019, the SDNY dismissed
the case relating to Pound Sterling for various reasons.
Plaintiffs’ appeals in both cases remain pending. In July 2019,
the SDNY dismissed the case relating to the Singapore
Interbank Offered Rate and Singapore Swap Offer Rate (‘SIBOR
/ SOR’) but in March 2021, the US Court of Appeals reversed
the SDNY’s decision, such that the case has returned to the
SDNY, where it is the subject of a further motion to dismiss. In
the class action relating to the Australian Bank Bill Swap
Reference Rate, the SDNY in February 2020 declined to dismiss
the amended complaint as against NWM Plc and certain other
defendants, but dismissed it as to other members of NatWest
Group (including NatWest Group plc). The claims against non-
dismissed defendants (including NWM Plc) are now proceeding
in discovery. In June 2021, NWM Plc and the plaintiffs in the
Swiss Franc LIBOR class action finalised a settlement resolving
that case. The amount of the settlement (which was covered
by an existing provision) has been paid into escrow pending
court approval of the settlement.
NWM Plc is also named as a defendant in a motion to certify a
class action relating to LIBOR in the Tel Aviv District Court in
Israel. NWM Plc filed a motion for cancellation of service
outside the jurisdiction, which was granted in July 2020.
The claimants appealed that decision and in November 2020
the appeal was refused and the claim dismissed by the
Appellate Court. The claim could in future be recommenced
depending on the outcome of an appeal to Israel’s Supreme
Court in respect of dismissal of the substantive case against
banks that had a presence in Israel.
In January 2019, a class action antitrust complaint was filed in
the SDNY alleging that the defendants (USD ICE LIBOR panel
banks and affiliates) have conspired to suppress USD ICE
LIBOR from 2014 to the present by submitting incorrect
information to ICE about their borrowing costs. The NatWest
Group defendants are NatWest Group plc, NWM Plc, NWMSI
and NWB Plc. The defendants made a motion to dismiss this
case, which was granted by the court in March 2020. One
plaintiff sought to appeal the dismissal, but on 14 February
2022, the US Court of Appeals dismissed the appeal because
that plaintiff lacks standing to maintain the appeal.
In August 2020, a complaint was filed in the United States
District Court for the Northern District of California by several
United States consumer borrowers against the USD ICE LIBOR
panel banks and their affiliates, alleging that the normal
process of setting USD ICE LIBOR amounts to illegal price-
fixing, and also that banks in the United States have illegally
agreed to use LIBOR as a component of price in variable
consumer loans. The NatWest Group defendants are NatWest
Group plc, NWM Plc, NWMSI and NWB Plc. The plaintiffs seek
damages and to prevent the enforcement of LIBOR-based
instruments through injunction. Defendants have filed a motion
to dismiss, which remains pending.
FX litigation
NWM Plc, NWMSI and/or NatWest Group plc are defendants in
several cases relating to NWM Plc’s foreign exchange (FX)
business. In 2015, NWM Plc paid US$255 million to settle the
consolidated antitrust class action filed in the SDNY on behalf
of persons who entered into over-the-counter FX transactions
with defendants or who traded FX instruments on exchanges.
In 2018, some members of the settlement class who opted out
of that class action settlement filed their own non-class
complaint in the SDNY asserting antitrust claims against NWM
Plc, NWMSI and other banks. Those opt-out claims are
proceeding in discovery.
In April 2019, some of the same claimants in the opt-out case
described above, as well as others, served proceedings (which
are ongoing) in the High Court of Justice of England and Wales,
asserting competition claims against NWM Plc and several
other banks. The claim was transferred from the High Court of
Justice of England and Wales in December 2021 and registered
in the Competition Appeal Tribunal in January 2022.
An FX-related class action, on behalf of ‘consumers and end-
user businesses’, is proceeding in the SDNY against NWM Plc
and others. Plaintiffs have filed a motion for class certification,
which defendants are opposing.
In May 2019, a cartel class action was filed in the Federal Court
of Australia against NWM Plc and four other banks on behalf of
persons who bought or sold currency through FX spots or
forwards between 1 January 2008 and 15 October 2013 with a
total transaction value exceeding AUD $0.5 million. The
claimant has alleged that the banks, including NWM Plc,
contravened Australian competition law by sharing information,
coordinating conduct, widening spreads and manipulating FX
rates for certain currency pairs during this period. NatWest
Group plc and NWMSI have been named in the action as ‘other
cartel participants’, but are not respondents. The claim was
served in June 2019 and, after a number of interlocutory

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Litigation and regulatory matters
pleading disputes, NWM Plc is preparing its defence.
In July and December 2019, two separate applications seeking
opt-out collective proceedings orders were filed in the UK
Competition Appeal Tribunal against NatWest Group plc, NWM
Plc and other banks. Both applications have been brought on
behalf of persons who, between 18 December 2007 and 31
January 2013, entered into a relevant FX spot or outright
forward transaction in the EEA with a relevant financial
institution or on an electronic communications network. A
hearing to determine class certification and which of the
applications should be permitted to represent the class took
place in July 2021 and judgment is awaited.
In November 2020, proceedings were issued in the High Court
of Justice of England and Wales against NWM Plc by a claimant
who sought an account of profits and/or damages in respect of
alleged historical FX trading misconduct. The claim was served
on NWM Plc in March 2021 and discontinued in December
2021.
Two motions to certify FX-related class actions were filed in the
Tel Aviv District Court in Israel in September and October 2018,
and were subsequently consolidated into one motion. The
consolidated motion to certify, which names The Royal Bank of
Scotland plc (now NWM Plc) and several other banks as
defendants, was served on NWM Plc in May 2020. NWM Plc has
filed a motion challenging the permission to serve the
consolidated motion outside the Israeli jurisdiction, which
remains pending.
In December 2021, a claim was issued in the Netherlands
against NatWest Group plc, NWM Plc and NWM N.V. by
Stichting FX Claims, seeking a declaration from the court that
anti-competitive FX market conduct described in decisions of
the European Commission of 16 May 2019 is unlawful, along
with unspecified damages. The claimant has indicated that it
may seek to amend its claim to also refer to the December
2021 decision by the EC (described below under “Foreign
exchange related investigations”). A hearing is scheduled for
June 2022.
Certain other foreign exchange transaction related claims have
been or may be threatened. NatWest Group cannot predict
whether all or any of these claims will be pursued.
Government securities antitrust litigation
NWMSI and certain other US broker-dealers are defendants in
a consolidated antitrust class action pending in the SDNY on
behalf of persons who transacted in US Treasury securities or
derivatives based on such instruments, including futures and
options. The plaintiffs allege that defendants rigged the US
Treasury securities auction bidding process to deflate prices at
which they bought such securities and colluded to increase the
prices at which they sold such securities to plaintiffs. The
complaint was dismissed in March 2021. Plaintiffs have filed an
amended complaint, which defendants are again seeking to
have dismissed .
Class action antitrust claims commenced in March 2019 are
pending in the SDNY against NWM Plc, NWMSI and other banks
in respect of Euro-denominated bonds issued by European
central banks (EGBs). The complaint alleges a conspiracy
among dealers of EGBs to widen the bid-ask spreads they
quoted to customers, thereby increasing the prices customers
paid for the EGBs or decreasing the prices at which customers
sold the bonds. The class consists of those who purchased or
sold EGBs in the US between 2007 and 2012. The defendants
filed a motion to dismiss this matter, which was granted by the
court in respect of NWM Plc and NWMSI in July 2020. Plaintiffs
have filed an amended complaint which defendants are seeking
to have dismissed.
Swaps antitrust litigation
NWM Plc and other members of NatWest Group, including
NatWest Group plc, as well as a number of other interest rate
swap dealers, are defendants in several cases pending in the
SDNY alleging violations of the US antitrust laws in the market
for interest rate swaps. There is a consolidated class action
complaint on behalf of persons who entered into interest rate
swaps with the defendants, as well as non-class action claims
by three swap execution facilities (TeraExchange, Javelin, and
trueEx). The plaintiffs allege that the swap execution facilities
would have successfully established exchange-like trading of
interest rate swaps if the defendants had not unlawfully
conspired to prevent that from happening through boycotts
and other means. Discovery in these cases is complete, and the
plaintiffs’ motion for class certification remains pending.
In June 2021, a class action antitrust complaint was filed
against a number of credit default swap dealers in New Mexico
federal court on behalf of persons who, from 2005 onwards,
settled credit default swaps in the United States by reference to
the ISDA credit default swap auction protocol. The complaint
alleges that the defendants conspired to manipulate that
benchmark through various means in violation of the antitrust
laws and the Commodity Exchange Act. The defendants
include several NatWest Group companies, including NatWest
Group plc. Defendants are seeking dismissal.
Odd lot corporate bond trading antitrust litigation
In October 2021, the SDNY granted defendants’ motion to
dismiss the class action antitrust complaint alleging that from
August 2006 onwards various securities dealers, including
NWMSI, conspired artificially to widen spreads for odd lots of
corporate bonds bought or sold in the United States secondary
market and to boycott electronic trading platforms that would
have allegedly promoted pricing competition in the market for
such bonds. Plaintiffs have commenced an appeal of the
dismissal.
Spoofing litigation
In December 2021, three substantially similar class actions
complaints were filed in federal court in the United States
against NWM Plc and NWMSI alleging Commodity Exchange
Act and common law unjust enrichment claims arising from
manipulative trading known as spoofing. The complaints refer
to NWM Plc’s December 2021 spoofing-related guilty plea
(described below under “US investigations relating to fixed-
income securities”) and purport to assert claims on behalf of
those who transacted in US Treasury securities and futures and
options on US Treasury securities between 2008 and 2018.
The three complaints are pending in the United States District
Court for the Northern District of Illinois.
Madoff
NWM N.V. is a defendant in two actions filed by the trustee for
the bankruptcy estates of Bernard L. Madoff and Bernard L.
Madoff Investment Securities LLC, in bankruptcy court in New
York, which together seek to clawback more than US$298
million that NWM N.V. allegedly received from certain Madoff
feeder funds and certain swap counterparties. The claims were
previously dismissed, but as a result of an August 2021 decision
by the US Court of Appeals, they will now proceed in the
bankruptcy court subject to NWM N.V.’s legal and factual
defences.

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Litigation and regulatory matters
EUA trading litigation
NWM Plc was a named defendant in civil proceedings before
the High Court of Justice of England and Wales brought in 2015
by ten companies (all in liquidation) (the ‘Liquidated
Companies’) and their respective liquidators (together, ‘the
Claimants’). The Liquidated Companies previously traded in
European Union Allowances (EUAs) in 2009 and were alleged
to be VAT defaulting traders within (or otherwise connected to)
EUA supply chains of which NWM Plc was a party. In March
2020, the court held that NWM Plc and Mercuria Energy
Europe Trading Limited (‘Mercuria’) were liable for dishonestly
assisting and knowingly being a party to fraudulent trading
during a seven business day period in 2009.
In October 2020, the High Court quantified total damages
against NWM Plc and Mercuria at £45 million plus interest and
costs, and permitted the defendants to appeal to the Court of
Appeal. In May 2021 the Court of Appeal set aside the High
Court’s judgment and ordered that a retrial take place before a
different High Court judge. The claimants have sought
permission from the Supreme Court to appeal. The Court of
Appeal also dismissed an appeal by Mercuria against the
finding by the High Court that NWM Plc and Mercuria were
both vicariously liable. Mercuria has sought permission from the
Supreme Court to appeal that decision.
Offshoring VAT assessments
HMRC issued protective tax assessments in 2018 against
NatWest Group plc totalling £143 million relating to unpaid VAT
in respect of the UK branches of two NatWest Group
companies registered in India. NatWest Group formally
requested reconsideration by HMRC of their assessments, and
this process was completed in November 2020. HMRC upheld
their original decision and, as a result, NatWest Group plc
lodged an appeal with the Tax Tribunal and an application for
judicial review with the High Court of Justice of England and
Wales, both in December 2020. In order to lodge the appeal
with the Tax Tribunal, NatWest Group plc was required to pay
the £143 million to HMRC, and payment was made in
December 2020. The appeal and the application for judicial
review have both been stayed pending resolution of a separate
case involving another bank.
US Anti-Terrorism Act litigation
NWB Plc is a defendant in lawsuits filed in the United States
District Court for the Eastern District of New York by a number
of US nationals (or their estates, survivors, or heirs) who were
victims of terrorist attacks in Israel. The plaintiffs allege that
NWB Plc is liable for damages arising from those attacks
pursuant to the US Anti-Terrorism Act because NWB Plc
previously maintained bank accounts and transferred funds for
the Palestine Relief & Development Fund, an organisation which
plaintiffs allege solicited funds for Hamas, the alleged
perpetrator of the attacks.
In March 2019, the trial court granted summary judgment in
favour of NWB Plc. In April 2021, the US Court of Appeals
affirmed the trial court’s judgment in favour of NWB Plc. In
September 2021, the plaintiffs filed a petition seeking
discretionary review by the United States Supreme Court, and
that petition remains pending.
NWM N.V. and certain other financial institutions are
defendants in several actions filed by a number of US nationals
(or their estates, survivors, or heirs), most of whom are or were
US military personnel, who were killed or injured in attacks in
Iraq between 2003 and 2011. NWM Plc is also a defendant in
some of these cases.
According to the plaintiffs’ allegations, the defendants are liable
for damages arising from the attacks because they allegedly
conspired with Iran and certain Iranian banks to assist Iran in
transferring money to Hezbollah and the Iraqi terror cells that
committed the attacks, in violation of the US Anti-Terrorism
Act, by agreeing to engage in ‘stripping’ of transactions
initiated by the Iranian banks so that the Iranian nexus to the
transactions would not be detected.
The first of these actions was filed in the United States District
Court for the Eastern District of New York in November 2014.
In September 2019, the district court dismissed the case,
finding that the claims were deficient for several reasons,
including lack of sufficient allegations as to the alleged
conspiracy and causation. The plaintiffs are appealing the
decision to the US Court of Appeals. Another action, filed in the
SDNY in 2017, was dismissed in March 2019 on similar
grounds, but remains subject to appeal to the US Court of
Appeals. Other follow-on actions that are substantially similar
to the two that have now been dismissed are pending in the
same courts.
Securities underwriting litigation
NWMSI is an underwriter defendant in securities class actions
in the US in which plaintiffs generally allege that an issuer of
public securities, as well as the underwriters of the securities
(including NWMSI), are liable to purchasers for
misrepresentations and omissions made in connection with the
offering of such securities.
1MDB litigation
A claim for a material sum has been issued, but not served,
recently in Malaysia by 1MDB against Coutts & Co Ltd for
alleged losses in connection with the 1MDB fund. Coutts & Co
Ltd is a company registered in Switzerland and is in wind-down
following the announced sale of its business assets in 2015.
Regulatory matters (including investigations and
customer redress programmes)
NatWest Group’s businesses and financial condition can be
affected by the actions of various governmental and regulatory
authorities in the UK, the US, the EU and elsewhere. NatWest
Group has engaged, and will continue to engage, in discussions
with relevant governmental and regulatory authorities,
including in the UK, the US, the EU and elsewhere, on an
ongoing and regular basis, and in response to informal and
formal inquiries or investigations, regarding operational,
systems and control evaluations and issues including those
related to compliance with applicable laws and regulations,
including consumer protection, investment advice, business
conduct, competition/anti-trust, VAT recovery, anti-bribery,
anti-money laundering and sanctions regimes.
NWM Group in particular has been providing information
regarding a variety of matters, including, for example, offering
of securities, the setting of benchmark rates and related
derivatives trading, conduct in the foreign exchange market,
product mis-selling and various issues relating to the issuance,
underwriting, and sales and trading of fixed-income securities,
including structured products and government securities, some
of which have resulted, and others of which may result, in
investigations or proceedings.

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Litigation and regulatory matters
Any matters discussed or identified during such discussions and
inquiries may result in, among other things, further inquiry or
investigation, other action being taken by governmental and
regulatory authorities, increased costs being incurred by
NatWest Group, remediation of systems and controls, public or
private censure, restriction of NatWest Group’s business
activities and/or fines. Any of the events or circumstances
mentioned in this paragraph or below could have a material
adverse effect on NatWest Group, its business, authorisations
and licences, reputation, results of operations or the price of
securities issued by it, or lead to material additional provisions
being taken.
NatWest Group is co-operating fully with the matters described
below.
Investigations
US investigations relating to fixed-income securities
In December 2021, NWM Plc pled guilty in the United States
District Court for the District of Connecticut to one count of
wire fraud and one count of securities fraud in connection with
historical spoofing conduct by former employees in US
Treasuries markets between January 2008 and May 2014 and,
separately, during approximately three months in 2018.
The 2018 trading occurred during the term of a non-
prosecution agreement (NPA) between NWMSI and the United
States Attorney's Office for the District of Connecticut (USAO
CT), under which non-prosecution was conditioned on NWMSI
and affiliated companies not engaging in criminal conduct
during the term of the NPA. The relevant trading in 2018 was
conducted by two NWM traders in Singapore and breached
that NPA.
The plea agreement reached with the US Department of
Justice and the USAO CT resolves both the spoofing conduct
and the breach of the NPA.
As required by the resolution and sentence imposed by the
court, NWM Plc is subject to a three-year period of probation
and has paid a US$25.2 million criminal fine, approximately
US$2.8 million in criminal forfeiture and approximately US$6.8
million in restitution out of existing provisions. The plea
agreement also imposes an independent corporate monitor. In
addition, NWM Plc has committed to compliance programme
reviews and improvements and agreed to reporting and co-
operation obligations.
Other material adverse collateral consequences may occur as
a result of this matter, as further described in the Risk factor
relating to legal, regulatory and governmental actions and
investigations set out on page 425.
Foreign exchange related investigations
In recent years, NWM Plc paid significant penalties to resolve
investigations into its FX business by the FCA, the Commodity
Futures Trading Commission, the US Department of Justice, the
Board of Governors of the Federal Reserve System, the
European Commission (EC) and others. In December 2021, the
EC announced that a settlement had been reached with
NatWest Group plc, NWM Plc and other banks in relation to its
investigation into past breaches of competition law regarding
spot foreign exchange trading. NatWest Group plc and NWM
Plc were fined EUR 32.5 million in total relating to conduct that
took place between 2011 and 2012. The fine was covered by
existing provisions. This concludes the EC’s investigations into
NatWest Group’s past spot foreign exchange trading activity.
FCA investigation into NatWest Group’s compliance with the
Money Laundering Regulations 2007
Following an FCA investigation, commenced in 2017, into
potential breaches of the UK Money Laundering Regulations
2007 (‘MLR 2007’), NWB Plc pled guilty in October 2021 to
three offences under regulation 45(1) of the MLR 2007 for
failure to comply with regulation 8(1) between 7 November
2013 and 23 June 2016, and regulations 8(3) and 14(1) between
8 November 2012 and 23 June 2016. These regulations
required the firm to determine, conduct and demonstrate risk
sensitive due diligence and ongoing monitoring of its
relationships with its customers for the purposes of preventing
money laundering. The offences relate to operational
weaknesses between 2012 and 2016, during which period NWB
Plc did not adequately monitor the accounts of a UK
incorporated customer. In December 2021, NWB Plc was fined
£264.8 million, incurred a confiscation order and was ordered
to pay costs. This was met by NWB Plc from existing provisions,
with a small additional provision taken in Q4 2021.
Other material adverse collateral consequences may occur as
a result of this matter, as further described in the Risk factor
relating to legal, regulatory and governmental actions and
investigations set out on page 425.
Systematic Anti-Money Laundering Programme assessment
In December 2018, the FCA commenced a Systematic Anti-
Money Laundering Programme assessment of NatWest Group.
In August 2019, the FCA instructed NatWest Group to appoint a
Skilled Person under section 166 of the Financial Services and
Markets Act 2000 to provide assurance on financial crime
governance arrangements in relation to two financial crime
change programmes. The Skilled Person’s final report was
received in January 2022.
Customer redress programmes
FCA review of NatWest Group’s treatment of SMEs
In 2014, the FCA appointed an independent Skilled Person
under section 166 of the Financial Services and Markets Act
2000 to review NatWest Group’s treatment of SME customers
whose relationship was managed by NatWest Group’s Global
Restructuring Group (GRG) in the period 1 January 2008 to 31
December 2013. In response to the Skilled Person’s final report
and update in 2016, NatWest Group announced redress steps
for SME customers in the UK and the Republic of Ireland that
were in GRG between 2008 and 2013. These steps were (i) an
automatic refund of certain complex fees; and (ii) a new
complaints process, overseen by an independent third party.
Both processes have now been completed. Accordingly,
NatWest Group retains only a small residual provision at
December 2021.
Investment advice review
In October 2019, the FCA notified NatWest Group of its
intention to appoint a Skilled Person under section 166 of the
Financial Services and Markets Act 2000 to conduct a review of
whether NatWest Group’s past business review of investment
advice provided during 2010 to 2015 was subject to
appropriate governance and accountability and led to
appropriate customer outcomes. The Skilled Person’s review
has concluded and, after discussion with the FCA, NatWest
Group is now conducting additional review / remediation work.

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Litigation and regulatory matters
Review and investigation of treatment of tracker mortgage
customers in Ulster Bank Ireland DAC
In December 2015, correspondence was received from the CBI
setting out an industry examination framework in respect of the
sale of tracker mortgages from approximately 2001 until the
end of 2015. The redress and compensation phase has
concluded, although an appeals process is currently anticipated
to run until the end of 2022. NatWest Group has made
provisions totalling €358 million (£300 million), of which €335
million (£281 million) had been utilised by 31 December 2021.
UBIDAC customers have lodged tracker mortgage complaints
with the Financial Services and Pensions Ombudsman (FSPO).
UBIDAC is challenging three FSPO adjudications in the Irish
High Court. The outcome and impact of that challenge on those
and related complaints is uncertain but may be material.
UBIDAC has identified further legacy business issues and these
remediation programmes are ongoing. NatWest Group has
made provisions of €188 million (£158 million), of which €156
million (£131 million) had been utilised by 31 December 2021
for these programmes.
28 Analysis of the net investment in business interests and intangible assets
This note shows cash flows relating to obtaining or losing control of associates or subsidiaries and net assets and liabilities
purchased and sold. These cash flows are presented as investing activities on the cash flow statement.
2021
2020 2019
£m
£m £m
Fair value given for businesses acquired (1)
—
— (55)
Additional investment in associates
(51)
(40) —
Net assets/liabilities purchased
(3,128)
— —
Net outflow of cash in respect of acquisitions
(3,179)
(40) (55)
Sale of interests in associates
—
27 —
Net assets/liabilities disposed
114
288 351
Profit on disposal 55
3 —
Net inflow of cash in respect of disposals
169
318 351
Cash expenditure on intangible assets
(479)
(348) (380)
Net outflow of cash
(3,489)
(70) (84)
(1) 2019 includes the purchase of Free agent.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 375
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
29 Analysis of changes in financing during the year
This note shows cash flows and non-cash movements relating to the financing activities of the Group. These activities reflect
movements in share capital, share premium, paid-in equity, subordinated liabilities and MRELs.
Share capital, share premium,
and paid
-
in equity
Subordinated liabilities
MRELs
2021
2020 2019
2021
2020 2019
2021
2020 2019
£m
£m £m
£m
£m £m
£m
£m £m
At 1 January
18,239
17,246 17,134
9,962
9,979 10,535
20,873
19,249 16,821
Ordinary shares issued
—
— 17
Issue of paid-in equity
937
2,218 —
Issue of subordinated liabilities
1,634
1,631 577
Redemption of subordinated liabilities
(4,765)
(3,502) (1,108)
Interest on subordinated liabilities (321)
(510) (533)
Issue of MRELs 3,383
1,309 3,640
Maturity/redemption of MRELs
—
(2) (1,285)
Interest on MRELs
(647)
(671) (428)
Net cash inflow/(outflow) from financing
937
2,218 17
(3,452)
(2,381) (1,064)
2,736
636 1,927
Ordinary shares issued
87
52 95
—
— —
—
— —
Share cancellation
(698)
— —
—
— —
—
— —
Effects of foreign exchange
—
—
—
(18)
(234) (315)
(190)
(514) (683)
Changes in fair value of subordinated
liabilities and MRELs
(434)
133 317
(649)
829 539
Paid in equity reclassified to subordinated
liabilities
(2,046)
(1,277) —
1,915
1,632 —
Loss on sale of subordinated liabilities
and MRELs
145
324 —
—
— —
Interest on subordinated liabilities
and MRELs 311
509 506
653
673 645
At 31 December 16,519
18,239 17,246
8,429
9,962 9,979
23,423
20,873 19,249
30 Analysis of cash and cash equivalents
In the cash flow statement, cash and cash equivalents comprises cash, loans to banks and treasury bills with an original maturity
of less than three months that are readily convertible to known amounts of cash and subject to insignificant risk of change in value.
2021
2020
2019
£m
£m £m
At 1 January
- cash 124,489
80,993 91,368
-
cash equivalents
14,710
19,595 17,568
139,199
100,588 108,936
Net increase/(decrease) in cash and cash equivalents
51,507
38,611 (8,348)
At 31 December 190,706
139,199 100,588
Comprising:
Cash and balances at central banks
177,757
124,489 80,993
Trading assets
7,137
9,220 12,578
Other financial
assets
16
173 459
Loans to banks - amortised cost (1) 5,796
5,317 6,558
Cash and cash equivalents 190,706
139,199 100,588
(1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £4,293 million (2020 - £7,592 million; 2019 - £7,570 million).
Certain members of NatWest Group are required by law or regulation to maintain balances with the central banks in the
jurisdictions in which they operate. Natwest Markets N.V. had mandatory reserve deposits with De Nederlandsche Bank N.V. of
€60 million (2020 - €81 million, 2019 €47 million). The Royal Bank of Scotland International (Holdings) Limited had balances with
Central Bank of Luxembourg of €123 million (2020 - €59 million, 2019 €58 million)

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 376
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
31 Directors' and key management remuneration
Directors and key management are remunerated for services rendered in the period. The executive directors may participate in
the company's long-term incentive plans, executive share option and sharesave schemes and details of their interests in the
company's shares arising from their participation are given in the directors' remuneration report. Details of the remuneration
received by each director are also given in the directors' remuneration report .
Key management comprises members of the NatWest Group plc and NWH Ltd Boards, members of the NatWest Group plc and
NWH Ltd Executive Committees, and the Chief Executives of NatWest Markets Plc and RBS International (Holdings) Limited. This is
on the basis that these individuals have been identified as Persons Discharging Managerial Responsibilities of NatWest Group plc
under the new governance structure.
2021
2020
Directors' remuneration
£000
£000
Non-executive directors emoluments 1,641
1,708
Chairman and executive directors emoluments 4,688
4,349
6,329
6,057
Amounts receivable under long-term incentive plans and share option plans
549
609
Total
6,878
6,666
No directors accrued benefits under defined benefit schemes or defined contribution schemes during 2021 and 2020.
Compensation of key management
The aggregate remuneration of directors and other members of key management during the year was as follows:
2021
2020
£000
£000
Short-term benefits
18,124
18,718
Post-employment benefits
380
474
Share
-
based payments
2,491
3,249
20,995
22,441
32 Transactions with directors and key management
This note presents information relating to any transactions with directors and key management. Key management comprises
directors of the company and Persons Discharging Managerial Responsibilities (PDMRs) of NatWest Group plc.
For the purposes of IAS 24 Related party disclosures, key management comprise directors of the company and PDMRs of NatWest
Group plc. Key management have banking relationships with NatWest Group entities which are entered into in the normal course
of business and on substantially the same terms, including interest rates and security, as for comparable transactions with other
persons of a similar standing or, where applicable, with other employees. These transactions did not involve more than the normal
risk of repayment or present other unfavourable features.
Amounts in the table below are attributed to each person at their highest level of NatWest Group key management.
2021
2020
£000
£000
Loans to customers - amortised cost
9,128
5,165
Customer deposits
51,018
45,747
At 31 December 2021, amounts outstanding in relation to transactions, arrangements and agreements entered into by authorised
institutions in NatWest Group, as defined in UK legislation, were £7,023,190 in respect of loans to seven persons who were
directors of the company at any time during the financial period.

Notes to the consolidated financial statements continued
NatWest Group Annual Report and Accounts 2021 377
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
33 Related parties
A related party is a person or entity that is related to the entity that is preparing its financial statements. Transactions between an
entity and any related party are disclosed in the financial statements to ensure readers are aware of how financial statements may
be affected by these transactions .
UK Government
The UK Government through HM Treasury is the ultimate
controlling party of The NatWest Group plc. The UK
Government’s shareholding is managed by UK Government
Investments Limited, a company wholly owned by the UK
Government. As a result the UK Government and UK
Government controlled bodies are related parties of the Group.
At 31 December 2021, HM Treasury’s holding in the company’s
ordinary shares was 52.96%.
NatWest Group enters into transactions with many of these
bodies. Transactions include the payment of: taxes – principally
UK corporation tax (Note 7) and value added tax; national
insurance contributions; local authority rates; and regulatory
fees and levies (including the bank levy (Note 3) and FSCS levy
(Note 27) - together with banking transactions such as loans
and deposits undertaken in the normal course of banker-
customer relationships.
Bank of England facilities
NatWest Group may participate in a number of schemes
operated by the Bank of England in the normal course of
business.
Members of NatWest Group that are UK authorised institutions
are required to maintain non-interest bearing (cash ratio)
deposits with the Bank of England amounting to 0.406% of their
average eligible liabilities in excess of £600 million. They also
have access to Bank of England reserve accounts: sterling
current accounts that earn interest at the Bank of England Base
rate.
NatWest Group provides guarantees for certain subsidiaries
liabilities to the Bank of England.
Other related parties
 In their roles as providers of finance, NatWest Group
companies provide development and other types of capital
support to businesses. These investments are made in the
normal course of business. In some instances, the
investment may extend to ownership or control over 20% or
more of the voting rights of the investee company.
 NatWest Group recharges NatWest Group Pension Fund with
the cost of administration services incurred by it. The
amounts involved are not material to NatWest Group.
 In accordance with IAS 24, transactions or balances
between NatWest Group entities that have been eliminated
on consolidation are not reported.
 The captions in the primary financial statements of the
parent company include amounts attributable to
subsidiaries. These amounts have been disclosed in
aggregate in the relevant notes to the financial statements.
Other net income/(expenses) represents the share of post-
tax results of associates and joint ventures, profit (or loss) on
disposal of subsidiaries, associates and joint ventures, and
gains on acquisitions.
34 Post balance sheet events
A post balance sheet event is an event that takes place between 31 December 2021 (reporting date) and 17 February 2022 (date
of approval of these financial statements). Significant events are included in the financial statements either to provide new
information about conditions that existed at 31 December 2021, including estimates used to prepare the financial statements
(known as an adjusting event) or to provide new information about conditions that did not exist at 31 December 2021 (non-
adjusting events). This note provides information relating to material non-adjusting events.
On 27 January 2022, NatWest Group announced that we will create a new franchise, Commercial and Institutional, bringing
together our Commercial, NatWest Markets and RBS International businesses to form a single franchise, with common objectives,
to best support our customers across the full non-personal customer lifecycle. Our reporting will follow this new structure from Q1
2022.
Regulatory calls were announced as a result of the PRA determination that certain instruments can no longer be included as part
of Tier 1 capital on a solo and/or consolidated basis after 31 December 2021:
On 11 February 2022, NatWest Group plc gave notice to noteholders of the redemption of its €1.5 billion Fixed to Floating Rate
notes due 8 March 2023. The notes will be redeemed on the optional redemption date of 8 March 2022. Payment of principal and
accrued interest will be settled upon redemption at par. The call is because the note will cease to be MREL eligible from 8 March
2022.
Other than as disclosed in the accounts, there have been no other significant events between 31 December 2021 and the date of
approval of these accounts which would require a change or additional disclosure.
 On 1 February 2022, NatWest Group plc gave notice of redemption to holders of the USD Series U Non-Cumulative Dollar
Preference Shares (ISIN US39057AA62). The notional outstanding of $1,013 million plus dividends for the current period to,
but excluding the redemption date of 31 March 2022 will be paid to noteholders at par.
 On 1 February 2022, NatWest Group plc gave notice of redemption to holders of the $1,200 million 7.648% dollar Perpetual
Regulatory Tier One Security (ISIN US780097AH44). The notional outstanding of $67.5 million plus interest for the current
period will be paid to noteholders at a make whole price calculated at least one business day prior to the redemption date of 3
March 2022.

Parent company financial statements and notes
NatWest Group Annual Report and Accounts 2021 378
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Balance sheet as at 31 December 2021
Note
2021
2020
£m
£m
Assets
Derivatives with subsidiaries
974
1,580
Amounts due from subsidiaries
4
29,962
26,910
Other financial assets
668
579
Investments in Group undertakings
9
48,835
46,229
Other assets
38
117
Total assets
80,477
75,415
Liabilities
Amounts due to subsidiaries
4
378
723
Derivatives 704
1,102
Other financial liabilities
23,600
21,056
Subordinated liabilities
8
7,740
7,944
Other liabilities
150
151
Total liabilities
32,572
30,976
Owners’ equity
47,905
44,439
Total liabilities and equity
80,477
75,415
Owners’ equity includes a total comprehensive profit for the year, dealt with in the accounts of the parent company, of £7,141
million (2020 - £9,598 million loss). This is primarily due to a VIU write back on subsidiaries and intercompany dividends that
eliminate on consolidation.
As permitted by section 408(3) of the Companies Act 2006, the primary financial statements of the company do not include an
income statement or a statement of comprehensive income.
The accompanying notes on pages 381 to 394 form an integral part of these financial statements.
The accounts were approved by the Board of directors on 17 February 2022 and signed on its behalf by:
Howard Davies Alison Rose-Slade Katie Murray NatWest Group plc
Chairman Group Chief Executive Officer Group Chief Financial Officer Registered No. SC45551

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 379
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Statement of changes in equity for the year ended 31 December 2021
2021
2020 2019
£m
£m £m
Called-up share capital - at 1 January 12,129
12,094 12,049
Ordinary shares issued
37
35 45
Share cancellation (1,3) (698)
— —
At 31 December
11,468
12,129 12,094
Paid
-
in equity
-
at 1 January
4,979
4,047 4,047
Redeemed
—
(1,277) —
Reclassified (2) (2,037)
Securities issued during the period
933
2,209 —
At 31 December
3,875
4,979 4,047
Share
premium
-
at 1 January
1,111
1,094 1,027
Ordinary shares issued 50
17 67
At 31 December 1,161
1,111 1,094
Cash flow hedging reserve - at 1 January
42
67 83
Amount recognised in equity 8
4 18
Amount transferred from equity to earnings
(12)
(33) (39)
Tax (2)
4 5
At 31 December 36
42 67
Capital Redemption reserve - at 1 January
—
— —
Share cancellation
698
— —
At 31 December 698
— —
Own Shares held - at 1 January
—
— —
Shares issued under employee share schemes
37
— —
Own shares acquired
(385)
— —
At 31 December (348)
— —
Retained earnings - at 1 January
26,178
36,485 37,181
Profit/(Loss) attributable to ordinary shareholders and other equity owners
7,147
(9,573) 2,728
Equity preference dividends paid
(19)
(26) (39)
Ordinary dividend paid
(693)
— (3,018)
Paid-in equity dividends paid (299)
(355) (367)
Unclaimed dividend
—
2 —
Shares issued under employee share schemes
(1)
— —
Shares repurchased during the year
(1,423)
— —
Redemption/reclassification of paid-in equity
125
(355) —
At 31 December
31,015
26,178 36,485
Owners’ equity at 31 December 47,905
44,439 53,787
(1) In March 2021, there was an agreement with HM Treasury to buy 591 million ordinary shares in the Company from UK Government Investments Ltd (UKGI), at 190.5p per share for
the total consideration of £1.13 billion. NatWest Group cancelled 391 million of the purchased ordinary shares, amounting to £744 million excluding fees, and held the remaining 200
million in own shares held, amounting to £381 million excluding fees. The nominal value of the share cancellation has been transferred to the capital redemption reserve.
(2) In July 2021, paid-in equity reclassified to liabilities as the result of a call in August 2021 of US$2.65 billion AT1 Capital notes.
(3) In line with the announcement in July 2021, NatWest Group plc repurchased and cancelled 310.8 million shares for total consideration of £676.2 million excluding fees. Of the 310.8
million shares bought back, 2.8 million shares were settled and cancelled in January 2022. The nominal value of the share cancellations has been transferred to the capital
redemption reserve with the share premium element to retained earnings.
(4) The total distributable reserves for the Bank is £31,015 million (2020 – 26,178 million).
The accompanying notes on pages 381 to 394 form an integral part of these financial statements .

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 380
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Cash flow statement for the year ended 31 December 2021
2021
2020 2019
£m
£m £m
Operating profit/(loss) before tax from continuing operations
7,133
(9,698) 2,799
Adjustments for:
Impairment releases on intercompany loans to bank (6)
— —
Net impairment (reversals)/charges of investments in Group undertakings
(2,600)
9,606 1,489
Change in fair value taken to profit or loss on other financial liabilities and
subordinated liabilities
(440)
672 221
Elimination of foreign exchange differences
(14)
(540) (526)
Other non
-
cash items
(12)
(31) (23)
Dividends receivable from subsidiaries (4,872)
(485) (5,596)
Loss on sale of investments in Group undertakings
22
— 1,739
Interest payable on MRELs and subordinated liabilities
447
537 513
Loss on sale of MRELs and subordinated liabilities
113
324 —
Charges and releases on provisions
(3)
(8) (25)
Net cash flows from trading activities
(232)
377 591
Decrease/(increase) in derivative assets with subsidiaries
614
(598) (436)
(Increase)/decrease in amounts due from subsidiaries
(1,825)
(792) 863
Increase in other financial assets
(89)
(302) (36)
Decrease/(increase) in other assets 2
(2) 113
(Decrease)/increase in amounts due to subsidiaries
(347)
289 (193)
(Decrease)/increase in derivative liabilities with subsidiaries
(398)
391 266
Increase/(decrease) in other financial liabilities
—
2 (1)
Decrease in other liabilities
(2)
(33) —
Change in operating assets and liabilities (2,045)
(1,045) 576
Income taxes received
97
40 15
Net cash flows from operating activities (1)
(2,180)
(628) 1,182
Net movement in business interests (29)
(27) (442)
Dividends received from subsidiaries 4,872
485 3,751
Net cash flows from investing activities 4,843
458 3,309
Movement in MRELs 1,531
(147) (142)
Movement in subordinated liabilities (2,256)
(1,972) (709)
Ordinary shares issued
87
109 17
Share cancellations
(1,808)
— —
Dividends paid
(1,011)
(381) (3,424)
Issue of paid
-
in equity
933
2,209 —
Net cash flows from financing activities
(2,524)
(182) (4,258)
Effects of exchange rate changes on cash and cash equivalents 4
1 (1)
Net increase/(decrease) in cash and cash equivalents
143
(351) 232
Cash and cash equivalents at 1 January
188
539 307
Cash and cash equivalents at 31 December (2)
331
188 539
(1) Includes interest received of £183 million (2020 - £344 million, 2019 - £371 million) and interest paid of £551 million (2020 - £816 million, 2019 - £988 million).
(2) Cash and cash equivalents comprise intragroup loans and advances with a maturity of less than 3 months for 2021, 2020 and 2019.

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 381
Financial
statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
1. Presentation of financial statements
The financial statements are prepared on a going concern basis based on the directors’ assessment that the parent company will
continue in operational existence for a period of twelve months from the date the financial statements are approved (refer to the
Report of the directors page 184). The accounting policies applied to the parent company financial statements are the same as
those applied in the consolidated financial statements on pages 300 to 377.
The parent company is incorporated in the UK and registered in Scotland. The financial statements are prepared on the historical
cost basis except for derivatives and certain financial instruments which are stated at fair value. Recognised financial assets and
financial liabilities of fair value hedges are adjusted for changes in fair value in respect of the risk that is hedged.
The accounting policies that are applicable to the parent company are included in NatWest Group plc’s accounting policies which
are set out on pages 307 to 312 of the consolidated financial statements, except that it has no policy regarding consolidation.
2. Critical accounting policies and sources of estimation uncertainty
The reported results of the parent company are sensitive to the accounting policies, assumptions and estimates that underlie the
preparation of its financial statements. The judgments and assumptions involved in the parent company’s accounting policies that
are considered by the Board to be the most important to the portrayal of its financial condition are those involved in assessing the
impairment, if any, in its investments in group undertakings, refer to Note 9.
Future accounting developments
International Financial Reporting Standards
A number of IFRSs and amendments to IFRS were in issue at 31 December 2021. The parent company is assessing the effect of
adopting these standards and amendments on its financial statements but does not expect the effect to be material.
3 Derivatives with subsidiaries – designated hedges
Fair value hedging is used to hedge loans and other financial liabilities, and cash flow hedging is used to hedge other financial
liabilities and subordinated liabilities.
For accounting policy information see accounting policies notes 10 and 15.
Derivatives held for hedging purposes are as follows:
2021
2020
Notional
Assets Liabilities
Notional
Assets Liabilities
£bn
£m £m
£bn
£m £m
Fair value hedging - interest rate contracts
22.2 825 167
25.0 1,537 359
Cash flow
hedging
-
exchange rate contracts
4.9 8
—
5.8 7 3
Total
833 167
1,544 362

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 382
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
4 Financial instruments – classification
The following tables analyse NWG plc’s financial assets and liabilities in accordance with the categories of financial instruments on
an IFRS 9 basis.
For accounting policy information see accounting policies 10, 12, 13 and 14.
Amortised
Other
MFVTPL
FVOCI
cost
assets
Total
Assets
£m £m £m £m £m
Derivatives with subsidiaries
974
974
Amounts due from subsidiaries
16,189
—
13,773
—
29,962
Other financial assets
665 3
—
668
Investment in Group undertakings
48,835
48,835
Other assets
38
38
31 December 2021
17,828 3
13,773
48,873
80,477
Derivatives with subsidiaries
1,580
1,580
Amounts due from subsidiaries
15,506 —
11,404
—
26,910
Other financial assets
576 3
—
579
Investment in Group undertakings
46,229
46,229
Other assets
117
117
31 December 2020
17,662 3
11,404
46,346
75,415
Held
-
for
-
Amortised
Other
trading
DFV
cost
liabilities
Total
Liabilities
£m
£m
£m £m £m
Amounts due to subsidiaries
252
—
113 13 378
Derivatives with subsidiaries
704 704
Other financial liabilities
—
6,624
16,976 23,600
Subordinated liabilities
—
7,740 7,740
Other liabilities
150 150
31 December 2021
956
6,624
24,829 163 32,572
Amounts due to subsidiaries
542
—
111 70 723
Derivatives with subsidiaries
1,102 1,102
Other financial liabilities
—
3,987
17,069 21,056
Subordinated liabilities
—
7,944 7,944
Other liabilities
151 151
31 December 2020
1,644
3,987
25,124 221 30,976
Amounts due from/to subsidiaries
2021
2020
£m
£m
Assets
Loans to banks and customers
-
amortised cost
13,773
11,404
Other financial assets
16,189
15,506
Amounts due from subsidiaries
29,962
26,910
Derivatives (1)
974
1,580
Liabilities
Bank and customer deposits
252
542
Other liabilities
13
70
Subordinated liabilities
113
111
Amounts due to subsidiaries
378
723
Derivatives (1)
704
1,102
(1) Intercompany derivatives are included within derivative classification on the balance sheet.

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 383
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
5 Financial instruments
Interest rate benchmark reform
The total amount of exposure for NatWest Group plc at 31 December 2021 subject to conversion provisions is £1.6 billion derivative
notionals.
Rates subject to IBOR reform
GBP LIBOR USD IBOR (1) Other IBOR (2) Total
2021 £m £m £m £m
Amounts due from subsidiaries
—
9,338 — 9,338
Other financial assets
—
665 — 665
Amounts due to subsidiaries
—
—
—
—
Other financial liabilities
1,320 7,055 97 8,472
Subordinated liabilities
—
604 — 604
Derivatives notional - with subsidiaries (£bn)
—
20.4 — 20.4
Rates subject to IBOR reform
GBP LIBOR USD IBOR (1) EURIBOR (2) Other IBOR
Total
2020 £m £m £m £m
£m
Amounts due from subsidiaries
1,422 15,444 4,557 38 21,461
Other financial assets
— 577 — — 577
Other financial liabilities
1,376 9,540 4,187 108 15,211
Subordinated liabilities
— 767 — — 767
Derivatives notional - with subsidiaries (£bn)
4.1 23.7 9.8 0.1 37.7
(1) In 2021 the FCA declared that USD IBOR will be non-representative post 30 June 2023; at the time of preparing the 2020 Annual Report and Accounts this date was expected to be
31 December 2021.
(2) In 2021 management concluded that EURIBOR is not expected to be significantly reformed further and therefore any uncertainty due to interest benchmark rate reform for
EURIBOR has ended. December 2020 data includes EURIBOR exposure as subject to reform
AT1 issuances
As part of its capital management activities NatWest Group has acquired certain equity instruments issued by its subsidiaries which
contain reset clauses linked to IBOR rates subject to reform reported in investment in group undertakings.
These are outlined below:
31 December 2021
31 December 2020
£m
£m
USD$2 billion 8.0169%
1,581
1,581
£300 million 6.597%
300
300
USD$2.65 billion 7.9916%
1,161
2,095
USD$950 million 7.9604%
749
749
USD$200 million 5.540%
155
155
6 Financial instruments - fair value of financial instruments not carried at fair value
The following table shows the carrying value and fair value of financial instruments carried at amortised cost on the balance sheet.
2021
2020
Carrying
Carrying
value
Fair value
value
Fair value
£bn £bn
£bn £bn
Financial assets
Amounts due from subsidiaries
(1) 13.8 13.9
11.4 11.7
Financial liabilities
Amounts due to subsidiaries
(2) 0.1 0.2
0.1 0.1
Other financial liabilities - debt securities in issue (3) 17.0 17.5
17.1 17.7
Subordinated liabilities (3) 7.7 8.2
7.9 8.6
(1) Fair value hierarchy level 2 - £5.9 billion (2020 - £6.4 billion) and level 3 - £8.1 billion (2020 - £5.3 billion).
(2) Fair value hierarchy level 2 (2020 – level 3).
(3) Fair value hierarchy level 2.

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 384
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
7 Financial instruments - maturity analysis
Remaining maturity
The following table shows the residual maturity of financial instruments based on contractual date of maturity.
2021
2020
Less than More than
Less than More than
12 months 12 months Total
12 months 12 months Total
£m £m £m
£m £m £m
Assets
Derivatives with subsidiaries
49 925
974
3 1,577 1,580
Amounts due from subsidiaries
8,276 21,686
29,962
5,591 21,319 26,910
Other financial assets
— 668
668
— 579 579
Liabilities
Amounts due to subsidiaries (1) 254 111
365
543 110 653
Derivatives with subsidiaries
1 703
704
38 1,064 1,102
Other financial liabilities 3,709 19,891
23,600
203 20,853 21,056
Subordinated liabilities 1,018 6,722
7,740
36 7,908 7,944
(1) Amounts due to subsidiaries relating to non-financial instruments of £13 million (2020 - £70 million) have been excluded from the table.
Financial liabilities: contractual maturity
The following table shows undiscounted cash flows payable up to 20 years from the balance sheet date, including future interest
payments.
Held-for-trading liabilities amounting to £0.8 billion (2020 - £1.3 billion) have been excluded from the tables.
2021
0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years
£m £m £m £m £m £m
Liabilities by contractual maturity
Amounts due to subsidiaries
(1) — 9 18 18 44 89
Derivatives held for hedging 28 22 73 17 31
—
Other financial liabilities 1,484 2,662 8,866 5,406 7,060
—
Subordinated liabilities
20 1,274 3,277 2,199 1,567 544
1,532 3,967 12,234 7,640 8,702 633
2020
Liabilities by contractual maturity
Amounts due to subsidiaries (1)
— 7 18 18 44 88
Derivatives held for hedging
47 73 187 46 30 —
Other financial liabilities
222 420 9,884 5,623 6,522 —
Subordinated liabilities
22 361 3,728 3,444 907 674
291 861 13,817 9,131 7,503 762
(1) Amounts due to subsidiaries relating to non-financial instruments have been excluded from the tables.

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 385
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
8 Subordinated liabilities
2021
2020
£m
£m
Dated loan capital
7,689
7,768
Undated loan capital
51
175
Preference shares
—
1
7,740
7,944
(1) Excludes amounts due to NatWest Group subsidiaries of £113 million (2020 - £111 million).
Redemptions in the period are disclosed in Note 20 to the consolidated accounts.
For accounting policy information see Accounting policies notes 10 and 14.
Certain preference shares issued by the company are classified as liabilities; these securities remain subject to the capital
maintenance rules of the Companies Act 2006.
Capital
2021
2020
Dated loan capital
treatment £m
£m
US$2,250 million 6.13% dated notes 2022 Tier 2 986
1,234
US$650 million 6.425% dated notes 2043 (callable January 2034) (1)
Ineligible
554
593
US$2,000 million 6.00% dated notes 2023 Tier 2
1,073
1,574
US$1,000 million 6.10% dated notes 2023 Tier 2
354
419
US$2,250 million 5.13% dated notes 2024 Tier 2
956
1,778
US$750 million 3.754% dated notes 2029
Tier 2
558
551
US$850 million 3.032% dated notes 2035 (callable November 2030) Tier 2 584
606
£1,000 million 3.622% dated notes 2030 (callable between May 2025 to August 2025) Tier 2 995
1,013
£1000 million 2.105% dated notes 2031 (callable between August 2026 to November 2026) Tier 2
999
—
€750 million 1.043% dated notes 2032 (callable between June 2027 to September 2027) Tier 2
630
—
7,689
7,768
(1) The call is on the underlying security in the partnership, rather than the internal issued debt .
Undated loan capital
Capital
2021
2020
treatment
£m
£m
US$106 million floating rate notes (callable semi-annually)
Ineligible
—
78
US$762 million 7.648% notes (callable September 2031) (1)
Ineligible
51
97
51
175
(1) The company can satisfy interest payment obligations by issuing sufficient ordinary shares to appointed trustees to enable them, on selling these shares, to settle the interest
payment .
Capital 2021
2020
Preference shares
(1)
treatment £m
£m
£0.5 million 11% and £0.4 million 5.5% cumulative preference shares of £1 (not callable) Ineligible
—
1
(1) Further details of the contractual terms of the preference shares are given in Note 22 to the consolidated accounts.
The following table analyses intercompany subordinated liabilities:
Capital 2021
2020
Undated loan capital
treatment £m
£m
US$150 million 8.00% undated notes 2012
Tier 2
113
112

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 386
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
9 Investments in Group undertakings
Critical accounting policy: Investments in Group undertakings
At each reporting date, the company assesses whether there is any indication that its investment in its Group undertakings is
impaired. If any such indication exists, the company undertakes an impairment test by comparing the carrying value of the
investment in its Group undertakings with its estimated recoverable amount. The key judgment is in determining the recoverable
amount. The recoverable amount of an investment in its Group undertakings is the higher of its fair value less cost to sell and its
value in use, being an assessment of the discounted future cash flows of the entity. Impairment testing inherently involves a
number of judgments: the five-year cash flow forecast, the choice of appropriate discount and growth rates, and the estimation of
fair value.
For accounting policy information see Accouting policies note 16.
Investments in Group undertakings are carried at cost less impairment losses. Movements during the year were as follows:
2021
2020
£m £m
At 1 January
46,229
55,808
Additional investments in Group undertakings
940
27
Disposals of investments in Group undertakings
(934)
—
Impairment of investments (1)
2,600
(9,606)
At 31 December
48,835
46,229
(1) Net of impairment reversals.
The recoverable amount of investments in Group undertakings is the higher of net asset value as a proxy for fair value less cost to
sell or value in use. Where recoverable value is based on net asset value, the fair value measurement is categorised as Level 3 of
the fair value hierarchy. The carrying value of Investments in Group undertakings at 31 December 2021 is supported by the
respective recoverable values of the entities.
In August 2021 the company issued £941 million of contingent convertible AT1 notes to NWH Ltd and redeemed £934 million of
contingent convertible AT1 notes issued to NWH Ltd. In 2020 the company invested additional capital of £27 million in its
subsidiaries, NWM Plc and RBS AA Holdings.
In 2021, Impairment of investments includes a £5,250 million reversal of an earlier impairment of the company's investment in
NatWest Holdings Limited as improved five-year cash flow forecasts increased the value in use and a £2,650 million impairment of
the company's investment in NatWest Markets Plc due to a decline in its net asset value mainly driven by dividends paid during the
year and losses incurred by the business. The impairment in 2020 was mainly related to NatWest Holdings Limited.
The impact of reasonably possible changes to the more significant variables in the value in use calculations for Natwest Holdings
Limited are presented below. This reflects the sensitivity of the value in use to each variable on its own. It is possible that more
than one change may occur at the same time. The value in use calculations use 10% as a discount rate and 1.6% as a long term
growth rate.
The value in use model shows the following sensitivities:
Potential VIU movement
2021
2020
£bn
£bn
1% adverse movement in discount rate
(4.4)
(4.0)
1% adverse movement in terminal growth rate
(2.0)
(1.5)
£250 million adverse movement in operating profit before tax
(2.1)
(2.2)
The principal subsidiary undertakings of the company are shown below. Their capital consists of ordinary shares, preference
shares and additional Tier 1 notes which are unlisted with the exception of certain preference shares listed by NWB Plc. All of these
subsidiaries are included in NatWest Group’s consolidated financial statements and have an accounting reference date of 31
December.
Nature of business
Country of incorporation and
principal area of operation Group interest
National Westminster Bank Plc (1,3) Banking Great Britain 100%
The Royal Bank of Scotland plc (3) Banking Great Britain 100%
Coutts & Company (2, 3) Banking Great Britain 100%
Ulster Bank Ireland Designated Activity Company (3) Banking Republic of Ireland 100%
NatWest Markets Plc Banking Great Britain 100%
NatWest Markets N.V. (4) Banking Netherlands 100%
The Royal Bank of Scotland International Limited (5) Financial Institution
Jersey
100%
(1) The company does not hold any of the preference shares in issue.
(2) Coutts & Company is incorporated with unlimited liability.
(3) Owned via NatWest Holdings Limited.
(4) Owned via NatWest Markets Plc.
(5) Owned via The Royal Bank of Scotland International (Holdings) Limited.
For full information on all related undertakings, refer to Note 12.

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 387
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
10 Analysis of changes in financing during the year
Share capital, share premium,
and paid-in equity Subordinated liabilities MRELs
2021
2020
2019
2021
2020
2019
2021
2020
2019
£m
£m £m
£m
£m £m
£m
£m £m
At 1 January
18,219
17,235 17,123
8,055
7,763 8,059
6,655
6,440 6,785
Ordinary shares issued 87
52 17
Issue of paid-in equity 933
2,209 —
Issue of subordinated liabilities
1,634
1,631 577
Redemption of subordinated liabilities (3,598)
(3,207) (855)
Interest on subordinated liabilities (292)
(396) (431)
Issue of MRELs 598
(3) 1,178
Maturity/redemption of MRELs
1,082
(2) (1,285)
Interest on MRELs (149)
(142) (35)
Net cash inflow/(outflow) from financing 1,020
2,261 17
(2,256)
(1,972) (709)
1,531
(147) (142)
Issue of ordinary shares
—
— 95
Effects of foreign exchange 44
(264) (264)
(54)
(275) (261)
Changes in fair value of subordinated
liabilities and MRELs
(309)
173 268
(131)
499 (46)
Paid in equity reclassified to subordinated liabilities
(2,037)
(1,277) —
1,915
1,632 —
Loss on sale of subordinated liabilities and MRELs
114
324 —
Interest on subordinated liabilities and MRELs 290
399 409
157
138 104
Other (698)
— —
—
— —
—
— —
At 31 December 16,504
18,219 17,235
7,853
8,055 7,763
8,158
6,655 6,440
11 Directors’ and key management remuneration
Directors’ remuneration is disclosed in Note 31 to the consolidated accounts. The directors had no other reportable related party
transactions or balances with the company.

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 388
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
12 Related undertakings
Legal entities and activities at 31 December 2021
In accordance with the Companies Act 2006, the company’s related undertakings and the accounting treatment for each are listed
below. All undertakings are wholly-owned by the company or subsidiaries of the company and are consolidated by reason of
contractual control (Section 1162(2) CA 2006), unless otherwise indicated. NatWest Group interest refers to ordinary shares of
equal values and voting rights unless further analysis is provided in the notes. Activities are classified in accordance with Annex I to
the Capital Requirements Directive (CRD IV) and the definitions in Article 4 of the Capital Requirements Regulation.
The following table details active related undertakings incorporated in the UK which are 100% owned by NatWest Group
and fully consolidated for accounting purposes
Regulatory
Entity name Activity treatment Notes
280 Bishopsgate Finance Ltd
INV FC (1)
Caledonian Sleepers Rail Leasing Ltd
BF FC (1)
Care Homes 1 Ltd
BF FC (1)
Care Homes 2 Ltd
BF FC (1)
Care Homes 3 Ltd
BF FC (1)
Care Homes Holdings Ltd
BF FC (1)
Churchill Management Ltd
BF FC (1)
Coutts & Company
CI FC (17)
Coutts Finance Company
BF FC (17)
Desertlands Entertainment Ltd
BF FC (1)
Distant Planet Productions Ltd
BF FC (1)
Esme Loans Ltd
BF FC (1)
FreeAgent Central Ltd
SC FC (33)
FreeAgent Holdings Ltd
SC FC (33)
G L Trains Ltd
BF FC (21)
Gatehouse Way Developments Ltd
INV DE (1)
ITB2 Ltd
BF FC (3)
KUC Properties Ltd
BF DE (3)
Land Options (West) Ltd
INV DE (3)
Lombard & Ulster Ltd
BF FC (16)
Lombard Business Finance Ltd
BF FC (1)
Lombard Business Leasing Ltd
BF FC (1)
Lombard Corporate Finance (6) Ltd
BF FC (1)
Lombard Corporate Finance (7) Ltd
BF FC (1)
Lombard Corporate Finance (11) Ltd
BF FC (1)
Lombard Corporate Finance (15) Ltd
BF FC (1)
Lombard Corporate Finance (December 1) Ltd
BF FC (1)
Lombard Corporate Finance (December 3) Ltd
BF FC (1)
Lombard Corporate Finance (June 2) Ltd
BF FC (1)
Lombard Discount Ltd
BF FC (1)
Lombard Finance Ltd
BF FC (1)
Lombard Industrial Leasing Ltd
BF FC (1)
Lombard Lease Finance Ltd
BF FC (1)
Lombard Leasing Company Ltd
BF FC (1)
Lombard Leasing Contracts Ltd
BF FC (1)
Lombard Lessors Ltd
BF FC (1)
Lombard Maritime Ltd
BF FC (1)
Lombard North Central Leasing Ltd
BF FC (1)
Lombard North Central PLC
BF FC (1)
Lombard Property Facilities Ltd
BF FC (1)
Lombard Technology Services Ltd
BF FC (1)
Mettle Ventures Ltd
OTH FC (1)
Nanny McPhee Productions Ltd
BF FC (1)
National Westminster Bank Plc
CI FC (1)
National Westminster Home Loans Ltd
BF FC (1)
NatWest Corporate Investments
BF FC (1)
NatWest Holdings Ltd
INV FC (1)
NatWest Invoice Finance Ltd
OTH FC (1)
NatWest Markets Plc
CI FC (28)
NatWest Markets Secretarial Services Ltd
SC FC (1)
NatWest Markets Secured Funding LLP
BF FC (20)
NatWest Property Investments Ltd
INV DE (1)
Entity name Activity
Regulatory
Notes treatment
NatWest Trustee and Depositary
Services Ltd
INV FC (1)
NatWest Ventures Investments Ltd
BF FC (1)
P of A Productions Ltd
BF FC (1)
Patalex Productions Ltd
BF FC (1)
Patalex V Productions Ltd
BF FC (1)
Pittville Leasing Ltd
BF FC (1)
Premier Audit Company Ltd
BF FC (1)
Price Productions Ltd
BF FC (1)
Priority Sites Investments Ltd
BF DE (1)
Priority Sites Ltd
INV DE (1)
Property Venture Partners Ltd
INV FC (3)
R.B. Capital Leasing Ltd
BF FC (1)
R.B. Equipment Leasing Ltd
BF FC (1)
R.B. Leasing (April) Ltd
BF FC (1)
R.B. Leasing (September) Ltd
BF FC (1)
R.B. Leasing Company Ltd
BF FC (3)
R.B. Quadrangle Leasing Ltd
BF FC (1)
R.B.S. Special Investments Ltd
BF FC (1)
RB Investments 3 Ltd
OTH FC (1)
RBOS (UK) Ltd
BF FC (1)
RBS AA Holdings (UK) Ltd
BF FC (1)
RBS Asset Management Holdings
BF FC (17)
RBS Collective Investment Funds Ltd
BF FC (11)
RBS HG (UK) Ltd
BF FC (1)
RBS Invoice Finance Ltd
BF FC (1)
RBS Management Services (UK) Ltd
SC FC (1)
RBS Mezzanine Ltd
BF FC (3)
RBS Property Developments Ltd
INV FC (3)
RBS Property Ventures Investments Ltd
BF FC (3)
RBS SME Investments Ltd
BF FC (1)
RBSG Collective Investments Holdings Ltd
BF FC (11)
RBSG International Holdings Ltd
BF FC (3)
RBSM Capital Ltd
BF FC (3)
RBSSAF (2) Ltd
BF FC (1)
RBSSAF (8) Ltd
BF FC (1)
RBSSAF (12) Ltd
BF FC (1)
RBSSAF (25) Ltd
BF FC (1)
RoboScot Equity Ltd
BF FC (3)
Royal Bank Investments Ltd
BF FC (3)
Royal Bank Leasing Ltd
BF FC (3)
Royal Bank of Scotland (Industrial Leasing) Ltd
BF FC (3)
Royal Bank Ventures Investments Ltd
BF FC (3)
Royal Scot Leasing Ltd
BF FC (3)
RoyScot Trust Plc
BF FC (1)
SIG 1 Holdings Ltd
BF FC (3)
SIG Number 2 Ltd
BF FC (3)
The One Account Ltd
BF FC (1)
The Royal Bank of Scotland Group
Independent Financial Services Ltd
BF FC (3)
The Royal Bank of Scotland plc
CI FC (28)
Ulster Bank Ltd
CI FC (16)

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 389
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
12 Related undertakings continued
Regulatory
Entity name Activity treatment Notes
Ulster Bank Pension Trustees Ltd
TR DE (16)
Voyager Leasing Ltd
BF FC (1)
Walton Lake Developments Ltd
INV DE (1)
West Register (Hotels Number 3) Ltd
INV DE (3)
Regulatory
Entity name
Activity
treatment
Notes
West Register (Property Investments) Ltd
BF DE (3)
West Register (Realisations) Ltd
INV DE (3)
Winchcombe Finance Ltd BF FC (1)
World Learning Limited BF FC (29)
The following table details active related undertakings incorporated outside the UK which are 100% owned by NatWest
Group and fully consolidated for accounting purposes
Regulatory
Entity name
Activity
treatment
Notes
AA Merchant Services B.V.
BF FC (13)
Airside Properties AB
BF FC (2)
Airside Properties ASP Denmark AS
BF FC (12)
Airside Properties Denmark AS
BF FC (12)
Alcover A.G.
BF DE (72)
Alternative Investment Fund B.V.
BF FC (13)
Arkivborgen KB
BF FC (2)
Artul Koy
BF FC (4)
Backsmedjan KB
BF FC (2)
BD Lagerhus AS
BF FC (5)
Bilfastighet i Akalla AB
BF FC (2)
Bioenergie Wiesenburg GmbH & Co. KG
INV DE (62)
Brödmagasinet KB
BF FC (2)
C.J. Fiduciaries Ltd
BF FC (15)
Candlelight Acquisition LLC
BF FC (6)
Coutts & Co (Cayman) Ltd
BF FC (19)
Coutts & Co Ltd
CI FC (70)
Coutts General Partner (Cayman) V Ltd
BF FC (64)
Eiendomsselskapet Apteno La AS
BF FC (5)
Espeland Naering AS
BF FC (5)
Eurohill 4 KB
BF FC (2)
Fab Ekenäs Formanshagen 4
BF FC (4)
Fastighets AB Flöjten I Norrköping
BF FC (10)
Fastighets AB Stockmakaren
BF FC (18)
Fastighets Aktiebolaget Sambiblioteket
BF FC (2)
Fastighetsbolaget Holma I Höör AB
BF FC (10)
Financial Asset Securities Corp.
BF FC (6)
First Active Ltd
BF FC (7)
Forskningshöjden KB
BF FC (2)
Förvaltningsbolaget Dalkyrkan KB
BF FC (10)
Förvaltningsbolaget Klöverbacken Skola KB
BF FC (10)
Fyrsate Fastighets AB
BF FC (10)
Gredelinen KB
BF FC (2)
Grinnhagen KB
BF FC (2)
Hatros 1 AS
BF FC (5)
Horrsta 4:38 KB
BF FC (2)
IR Fastighets AB
BF FC (2)
IR IndustriRenting AB
BF FC (2)
Kallebäck Institutfastigheter AB
BF FC (10)
Kastrup Commuter K/S
BF FC (12)
Kastrup Hangar 5 K/S
BF FC (12)
Kastrup V & L Building K/S
BF FC (12)
KB Eurohill
BF FC (2)
KB Lagermannen
BF FC (2)
KB Likriktaren
BF FC (2)
KEB Investors, L.P.
BF FC (54)
Koy Espoon Entresse II
BF FC (4)
Koy Helsingin Mechelininkatu 1
BF FC (4)
Koy Helsingin Osmontie 34
BF FC (4)
Koy Helsingin Panuntie 6
BF FC (4)
Koy Helsingin Panuntie 11
BF FC (4)
Koy Iisalmen Kihlavirta
BF FC (4)
Regulatory
Entity name
Activity
treatment
Notes
Koy Jämsän Keskushovi
BF
FC
(4)
Koy Jasperintie 6
BF
FC
(24)
Koy Kokkolan Kaarlenportti Fab
BF
FC
(4)
Koy Kouvolan Oikeus ja Poliisitalo
BF
FC
(4)
Koy Lohjan Ojamonharjuntie 61
BF
FC
(4)
Koy Millennium
BF
FC
(4)
Koy Nummelan Portti
BF
FC
(4)
Koy Nuolialan päiväkoti
BF
FC
(4)
Koy Pennalan Johtotie 2
BF
FC
(4)
Koy Peltolantie 27
BF
FC
(24)
Koy Porkkanakatu 2
BF
FC
(24)
Koy Puotikuja 2 Vaasa
BF
FC
(4)
Koy Raision Kihlakulma
BF
FC
(4)
Koy Ravattulan Kauppakeskus
BF
FC
(4)
Koy Tapiolan Louhi
BF
FC
(4)
Koy Vantaan Rasti IV
BF
FC
(4)
Koy Vapaalan Service-Center
BF
FC
(4)
Kvam Eiendom AS
BF
FC
(5)
Läkten 1 KB
BF
FC
(2)
Leiv Sand Eiendom AS
BF
FC
(5)
LerumsKrysset KB
BF
FC
(2)
Limstagården KB
BF
FC
(2)
Lombard Finance (CI) Ltd
BF
FC
(15)
Lothbury Insurance Company Ltd
BF
DE
(67)
Lundbyfilen 5 AB
BF
FC
(18)
Maja Finance S.R.L.
BF
FC
(50)
Narmovegen 455 AS
BF
FC
(5)
National Westminster International Holdings B.V.
BF
FC
(77)
NatWest Germany GmbH
OTH
FC
(34)
NatWest Innovation Services Inc.
OTH
FC
(6)
NatWest Markets Group Holdings Corporation
BF
FC
(6)
NatWest Markets N.V.
CI
FC
(23)
NatWest Markets Securities Inc.
INV
FC
(6)
NatWest Markets Securities Japan Ltd
INV
FC
(14)
NatWest Services (Switzerland) Ltd
SC
FC
(61)
Nordisk Renting AB
BF
FC
(2)
Nordisk Renting AS
BF
FC
(58)
Nordisk Renting OY
BF
FC
(4)
Nordisk Renting Facilities Management AB
BF
FC
(18)
Nordisk Specialinvest AB
BF
FC
(2)
Nordiska Strategifastigheter Holding AB
BF
FC
(2)
NWM Services India Private Ltd
SC
FC
(39)
Nybergflata 5 AS
BF
FC
(5)
Optimus KB
BF
FC
(2)
R.B. Leasing BDA One Ltd
BF
FC
(74)
Random Properties Acquisition Corp. III
INV
FC
(6)
RBS (Gibraltar) Ltd
BF
FC
(63)
RBS AA Holdings (Netherlands) B.V.
BF
FC
(13)
RBS Acceptance Inc.
BF
FC
(6)
RBS Americas Property Corp.
SC
FC
(6)
RBS Asia Financial Services Ltd
BF
FC
(14)
RBS Asia Futures Ltd
BF
FC
(14)

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 390
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
12 Related undertakings continued
Regulatory
Entity name
Activity
treatment
Notes
RBS Assessoria Ltd
SC FC (43)
RBS Asset Management (Dublin) Ltd
BF FC (66)
RBS Commercial Funding Inc.
BF FC (6)
RBS Deutschland Holdings GmbH
BF FC (34)
RBS Employment (Guernsey) Ltd
SC FC (69)
RBS Financial Products Inc.
BF FC (6)
RBS Group (Australia) Pty Ltd
BF FC (30)
RBS Holdings III (Australia) Pty Ltd
BF FC (30)
RBS Holdings N.V.
BF FC (23)
RBS Holdings USA Inc.
BF FC (6)
RBS Hollandsche N.V.
BF FC (23)
RBS International Depositary Services S.A.
CI FC (46)
RBS Investments (Ireland) Ltd
BF FC (7)
RBS Netherlands Holdings B.V.
BF FC (13)
RBS Nominees (Hong Kong) Ltd
BF FC (14)
RBS Nominees (Ireland) Ltd
BF FC (7)
RBS Nominees (Netherlands) B.V.
BF FC (13)
RBS Polish Financial Advisory Services
Sp. Z o.o.
BF FC (59)
RBS Prime Services (India) Private Ltd
OTH FC (37)
RBS Services India Private Ltd
SC FC (48)
Rigedalen 44 Eiendom AS
BF FC (5)
Ringdalveien 20 AS
BF FC (5)
Sandmoen Naeringsbygg AS
BF FC (5)
Regulatory
Entity name
Activity
treatment
Notes
SFK Kommunfastigheter AB
BF FC (2)
Sjöklockan KB
BF FC (2)
Skinnarängen KB
BF FC (2)
Sletta Eiendom II AS
BF FC (5)
Snipetjernveien 1 AS
BF FC (5)
Solbänken KB
BF FC (2)
Solnorvika AS
BF FC (5)
Strand European Holdings AB
BF FC (18)
Svenskt Fastighetskapital AB
BF FC (2)
Svenskt Energikapital AB
BF FC (2)
Svenskt Fastighetskapital Holding AB
BF FC (2)
The RBS Group Ireland Retirement Savings
Trustee Ltd TR FC (7)
The Royal Bank of Scotland International
(Holdings) Ltd BF FC (15)
The Royal Bank of Scotland International Ltd
CI FC (15)
Tygverkstaden 1 KB
BF FC (2)
Ulster Bank (Ireland) Holdings Unlimited Company
INV FC (7)
Ulster Bank Dublin Trust Company
Unlimited Company TR FC (7)
Ulster Bank Holdings (ROI) Ltd
BF FC (7)
Ulster Bank Ireland Designated Activity Company
CI FC (7)
Ulster Bank Pension Trustees (RI) Ltd TR FC (7)
The following table details related undertakings which are 100% owned by NatWest Group ownership but are not
consolidated for accounting purposes
Regulatory
Entity name
Activity
treatment
Notes
RBS Capital LP II BF DE (76)
RBS Capital Trust II BF DE (44)
RBS International Employees' Pension
BF DE (15)Trustees Ltd
Regulatory
Entity name
Activity
treatment
Notes
RBSG Capital Corp. BF DE (6)
West Granite Homes Inc. INV DE (41)
The following table details active related undertakings incorporated in the UK where NatWest Group ownership is less than
100%
Activity
Accounting Regulatory Group
Notes
Entity name
treatment
treatment
%
BGF Group Plc BF AHC PC 25 (21)
Falcon Wharf Ltd OTH EAJV PC 50 (32)
GWNW City Developments Ltd BF EAJV DE 50 (32)
Higher Broughton (GP) Ltd BF AHC PC 41 (60)
Higher Broughton Partnership LP BF AHC DE 41 (55)
Jaguar Cars Finance Ltd BF FC FC 50 (1)
JCB Finance (Leasing) Ltd BF FC FC 75 (26)
JCB Finance Ltd BF FC FC 75 (26)
Landpower Leasing Ltd BF FC FC 75 (26)
London Rail Leasing Ltd BF EAJV PC 50 (49)
Accounting
Regulatory
Group
Entity name Activity treatment treatment %Notes
Natwest Covered Bonds (LM) Ltd BF IA PC 20 (20)
Natwest Covered Bonds LLP BF FC FC 73 (21)
Natwest Markets Secured
Funding (LM) Ltd BF FC PC 20 (20)
Oaxaca Ltd OTH IA IA 24 (80)
Pollinate International Ltd OTH AHC DE 30 (79)
RBS Sempra Commodities LLP BF FC FC 51 (3)
Silvermere Holdings Ltd BF FC FC 95 (11)
Vizolution Ltd OTH AHC PC 5 (65)

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 391
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
12 Related undertakings continued
T he following table details related undertakings incorporated outside the UK where NatWest Group ownership is less than
100%.
Accounting
Regulatory
Group
Entity name
Activity
treatment
treatment
%
Notes
Ardmore Securities No.1 DAC
BF FC DE
0
(22)
Ardmore Securities No.2 DAC
BF FC DE
0
(22)
CITIC Capital China
BF IA PC
33
(51)
Mezzanine Ltd
Dunmore Securities No.1 DAC
BF FC DE
0
(22)
Eris Finance S.R.L.
BF IA PC
45
(50)
German Public Sector Finance
B.V. BF EAJV PC
50
(56)
Herge Holding B.V.
BF IA PC
63
(73)
Lunar Funding VIII Ltd
BF FC FC
0
(8)
Lunar Luxembourg SA
BF FC DE
0
(78)
Lunar Luxembourg Series
BF FC DE
0
(78)2019- 04
Lunar Luxembourg Series
BF FC DE
0
(78)2019- 05
Lunar Luxembourg Series
BF FC DE
0
(78)2019- 06
Lunar Luxembourg Series
BF FC DE
0
(78)2020- 01
Accounting
Regulatory Group
Entity name
Activity
treatment
treatment
%
Notes
Lunar Luxembourg Series
BF
FC
DE 0
(78)
2020- 02
Natwest Secured Funding DAC
BF
FC
FC 0
(47)
Nightingale CRE 2018-1 Ltd
BF
FC
DE 0
(9)
Nightingale LF 2021-1 Ltd
BF
FC
DE 0
(9)
Nightingale Project Finance
BF
FC
DE 0
(9)
2019 1 Ltd
Nightingale Securities 2017-1 Ltd
BF
FC
DE 0
(9)
Nightingale UK Corp
BF
FC
DE 0
(9)
2020 2 Ltd
Pharos Estates Ltd
OTH
AHC
DE 49.49
(42)
Sempra Energy Trading LLC
BF
FC
FC 51
(6)
Spring Allies Jersey Ltd
BF
IA
DE 49
(9)
Thames Asset Global
BF
FC
FC 0
(36)
Securitization No.1 Inc.
The Drive4Growth Company Ltd
OTH
IA
DE 20
(52)
Wiöniowy Management sp. Z.o.o.
SC
AHC
DE 25
(59)
The following table details related undertakings that are not active (actively being dissolved).
Accounting
Regulatory
Group
Entity name
treatment
treatment
%
Notes
Belfast Bankers' Clearing
Company Ltd AHC DE 25 (53)
Celtic Residential Irish Mortgage
Securitisation No 10 Plc FC DE 0 (25)
Celtic Residential Irish Mortgage
Securitisation No 11 Plc FC DE 0 (25)
Celtic Residential Irish Mortgage
Securitisation No 14 DAC FC DE 0 (31)
Celtic Residential Irish Mortgage
Securitisation No 15 DAC FC DE 0
(31)
Lombard Corporate Finance (13) Ltd FC FC 100 (1)
Lombard Ireland Group
Holdings Unlimited FC FC 100 (81)
Lombard Ireland Ltd
FC FC 100
(81)
Lombard Manx Leasing Ltd
FC FC 100
(27)
Accounting
Regulatory
Group
Entity name
treatment
treatment
%
Notes
Lombard Manx Ltd FC FC 100 (27)
Morar ICC Insurance Ltd FC DE 100 (68)
NatWest Nominees Ltd FC FC 100 (1)
NatWest Capital Finance Ltd FC FC 100 (1)
Northern Isles Ferries Ltd FC FC 100 (1)
RBSSAF (6) Ltd FC FC 100 (1)
RBS Asset Finance Europe Ltd FC FC 100 (1)
Redlion Investments Ltd FC FC 100 (19)
Redshield Holdings Ltd FC FC 100 (19)
Royhaven Secretaries Ltd FC FC 100 (19)
RoyScot Financial Services Ltd FC FC 100 (1)
Style Financial Services Ltd FC FC 100 (3)
UB SIG (ROI) Ltd FC FC 100 (25)
West Register Hotels (Holdings) Ltd FC FC 100 (3)

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 392
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
12 Related undertakings continued
The following table details related undertakings that are dormant
Accounting
Regulatory
Group
Entity name
treatment
treatment
%
Notes
Adam & Company (Nominees) Ltd
FC FC 100 (11)
Atlas Nominees Ltd
FC FC 100 (14)
British Overseas Bank Nominees Ltd
FC FC 100 (1)
Buchanan Holdings Ltd
FC FC 100 (1)
Custom House Docks Basement
Management No. 2 Ltd IA DE 25 (57)
Dixon Vehicle Sales Ltd FC FC 100 (1)
Dunfly Trustee Ltd
FC FC 100 (1)
FIT Nominee 2 Ltd
FC FC 100 (1)
FIT Nominee Ltd
FC FC 100 (1)
Freehold Managers (Nominees) Ltd
FC FC 100 (1)
HPUT A Ltd
NC DE 100 (1)
HPUT B Ltd
NC DE 100 (1)
ITB1 Ltd
FC FC 100 (3)
JCB Finance Pension Ltd
FC DE 88 (16)
Marigold Nominees Ltd
FC FC 100 (1)
Mulcaster Street Nominees Ltd
FC FC 100 (15)
N.C. Head Office Nominees Ltd
FC FC 100 (3)
National Westminster Bank Nominees
(Jersey) Ltd
FC FC 100 (38)
NatWest FIS Nominees Ltd
FC FC 100 (1)
NatWest Group Secretarial
FC FC 100 (3)Services Ltd
Accounting
Regulatory
Group
Entity name
treatment
treatment
%
Notes
NatWest Pension Trustee Ltd
NC DE 100 (1)
NatWest PEP Nominees Ltd
FC FC 100 (1)
Nextlinks Ltd
FC FC 100 (1)
Nordisk Renting A/S
FC FC 100 (75)
Nordisk Renting HB
FC FC 100 (2)
Project & Export Finance (Nominees) Ltd
FC FC 100 (1)
R.B. Leasing (March) Ltd
FC FC 100 (1)
RBOS Nominees Ltd
FC FC 100 (1)
RBS Investment Executive Ltd
NC DE 100 (3)
RBS Retirement Savings Trustee Ltd
FC FC 100 (1)
RBSG Collective Investments
Nominees Ltd FC FC 100 (11)
RoosterMoney UK Limited FC FC 100 29
Sixty Seven Nominees Ltd
FC FC 100 (1)
Strand Nominees Ltd
FC FC 100 (17)
Syndicate Nominees Ltd
FC FC 100 (1)
TDS Nominee Company Ltd
FC FC 100 (3)
Tilba Ltd BF FC 100 (40)
The Royal Bank of Scotland (1727) Ltd
FC FC 100 (3)
The Royal Bank of Scotland Group Ltd
FC FC 100 (1)
W G T C Nominees Ltd
FC FC 100 (1)
The following table details overseas branches of NatWest Group
Subsidiary Geographic location
Coutts & Co Ltd Switzerland
National Westminster Bank Plc Germany
Germany, Hong Kong, Japan,
Singapore
NatWest Markets Plc Turkey, United Arab Emirates
Subsidiary Geographic location
France, Germany, Italy
Republic of
Ireland, Spain,
Sweden
NatWest Markets N.V. United Kingdom
The Royal Bank of
Gibraltar,
Guernsey, Isle of
Man
Scotland International Ltd
Luxembourg,
United Kingdom

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 393
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
12 Related undertakings continued
Key:
BF Banking and financial institution
CI Credit institution
INV
Investment (shares or property) holding company
SC Service company
TR Trustee
OTH
Other
DE Deconsolidated
FC Full consolidation
PC Pro-rata consolidation
AHC Associate held at cost
EAJV Equity accounting – Joint venture
IA
Investment accounting
NC Not consolidated
Notes
Registered addresses
Country of incorporation
(1) 250 Bishopsgate, London, EC2M 4AA UK
(2) Care of Nordisk Renting AB, Jakobsbergsgatan 13, 8th Floor, Box 14044, Stockholm, SE-111 44 Sweden
(3) RBS Gogarburn, 175 Glasgow Road, Edinburgh, EH12 1HQ UK
(4) c/o Epicenter, Mikonkatu 9, 6th Floor, Helsinki, 00100 Finland
(5) c/o Advokatfirmaet Wiersholm AS, Postboks 1400, 0115 Oslo Norway
(6) 251, Little Falls Drive, Wilmington, DE, 19808 USA
(7) Ulster Bank Head Office, Block B Central Park, Leopardstown, Dublin 18, D18 N153 RoI
(8) Grand Pavilion Commercial Centre, 802 West Bay Road, P.O. Box 31119 Cayman Islands
(9) 44 Esplanade, St Helier, JE4 9WG Jersey
(10) c/o Nordisk Renting AB, Jakobsbergsgatan 13, 8 storey, Box 14044, SE-111 44, Stockholm Sweden
(11) 6-8 George Street, Edinburgh, EH2 2PF UK
(12) C/O Visma Services Danmark A/S, Lyskaer 3C-3D, 2730 Herlev Denmark
(13) Claude Debussylaan 94, Amsterdam, 1082 MD Netherlands
(14) Level 54, Hopewell Centre, 183 Queen's Road East Hong Kong
(15) Royal Bank House, 71 Bath Street, St Helier, JE4 8PJ Jersey
(16) 11-16 Donegall Square East, Belfast, Co Antrim, BT1 5UB UK
(17) 440, Strand, London, WC2R OQS UK
(18) C/O Nordisk Renting AB, Box 14044, SE-104 40 Stockholm Sweden
(19) Estera Trust (Cayman) Limited,Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108 Cayman Islands
(20) 1 Bartholomew Lane London EC2N 2AX UK
(21) 1 Princes Street, London, EC2R 8BP UK
(22) 3rd Floor, Fleming Court, Fleming's Place, Dublin 4, D04 N4X9 RoI
(23) 94, Claude Debussylaan, Amsterdam, 1082 MD Netherlands
(24) c/o Nordisk Renting Oy, Mikonkatu 9, 00100, Helsinki Finland
(25) One Spencer Dock, Dublin, D01 X9R7 RoI
(26) The Mill, High Street, Rocester, Staffordshire, ST14 5JW UK
(27) 2 Athol Street, Douglas, IM1 1JA Isle Of Man
(28) 36 St Andrew Square, Edinburgh, EH2 2YB UK
(29) 64 New Cavendish Street, London, W1G 8TB UK
(30)
Ashurst Australia, South Tower, 80 Collins Street, Melbourne
Australia
(31) Block A Georges Quay Plaza, Georges Quay, Dublin 2 RoI
(32) Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR UK
(33) One Edinburgh Quay, 133 Fountainbridge, Edinburgh, EH3 9QG UK
(34) Roßmarkt 10, Frankfurt am Main, 60311 Germany
(35) Ulster Bank Group Centre, George's Quay, Dublin 2 RoI
(36) 114 West 47th Street, New York, 10036 USA
(37) 12/14 Veer Nariman Road, Brady House 4th floor, Fort, Mumbai, 400001 India
(38) 16 Library Place, St. Helier Jersey
(39) 1st floor, Tower A, Building No. 1, Candor Techspace, IT/ITES SEZ, Sector 21, Gurugram, Haryana, 122016 India
(40) 2 Athol Street, Douglas, IM99 1AN Isle Of Man
(41) 200, Bellevue Parkway, Suite 210, Wilmington, DE 19809 USA
(42) 24 Demostheni Severi, 1st Floor, Nicosia, 1080 Cyprus
(43) 254, 13 Floor, Rua Boa Vista, Sao Paulo, 01014-907 Brazil
(44) 301, Bellevue Parkway, 3rd Floor, Wilmington, DE, 19809 USA
(45) 4 Atlantic Quay, 70 York Street, Glasgow, G2 8JX UK
(46) 40, Avenue J.F Kennedy, Kirchberg, L1855 Luxembourg
(47) 5 Harbourmaster Place, Dublin 1, D01 E7E8 RoI
(48) 6th Floor, Building 2, Tower A, GIL IT/ITES SEZ, Candor TechSpace, Sector 21, Gurugram, Haryana, 122016 India
(49) 99 Queen Victoria Street, London, EC4V 4EH UK
(50) Via Vittorio Alfieri 1, Conegliano TV, IT-TN 31015 Italy
(51) Boundary Hall, Cricket Square, 171 Elgin Avenue, Grand Cayman, KY1-1104 Cayman Islands
(52) c/o Denis Crowley & Co Chartered Accountants, Unit 6 Riverside Grove, Riverstick, P43 W221 RoI
(53) C/o Pinsent Masons Llp, The Soloist, 1 Lanyon Place, Belfast, Co. Antrim, BT1 3LP UK
(54) Clarendon House, Two Church Street, Suite 104, Reid Street, Hamilton, HM 11 Bermuda
(55) Cornwall Buildings, 45-51 Newhall Street, Birmingham, West Midlands, B3 3QR UK
(56) De entree 99 -197, 1101HE Amsterdam Zuidoost Netherlands

Parent company financial statements and notes continued
NatWest Group Annual Report and Accounts 2021 394
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
12 Related undertakings continued
Notes Registered addresses Country of incorporation
(57) First Floor, 1 Exchange Place, Dublin 1, D01 R8W8 RoI
(58) H. Heyerdahlsgate 1, Postboks 2020 Vika, Oslo, 0125 Norway
(59) ul. Ilzecka 26, building E, 02-135, Warsaw Poland
(60)
Inpartnership Ltd, 35 St Paul's Square, Birmingham, West Midlands, B3 1QX
UK
(61) Lerchenstrasse 18, Zurich, CH 8022 Switzerland
(62) Liszt Straße 10, Regensburg, D-93053 Germany
(63) Madison Building, Midtown, Queensway Gibraltar
(64) Maples Corporate Services Limited, P.O. Box 309, 121 South Church Street, George Town,
Grand Cayman, KY1-1104 Cayman Islands
(65) Office Block A, Bay Studios Business Park, Fabian Way, Swansea, SA1 8QB UK
(66) One Dockland Central, Guild Street, IFSC, Dublin 1 RoI
(67) PO Box 230, Heritage Hall, Le Marchant Street, St Peter Port, GY1 4JH Guernsey
(68) PO Box 384, The Albany, South Esplanade, St Peter Port, Guernsey, GY1 4NF Guernsey
(69) Regency Court, Glategny Esplanade, St Peter Port, GY1 3AP Guernsey
(70) Schuetzengassse 4, CH-8001 Zurich Switzerland
(71) The Chestnuts Brewers End, Takeley, Bishop's Stortford, CM22 6QJ UK
(72) Tirolerweg 8, Zug, CH- 6300 Switzerland
(73) Verlengde Poolseweg 16, Breda, 4818CL Netherlands
(74) Victoria Place, 5th Floor, 31 Victoria Street, Hamilton, HM 10 Bermuda
(75) c/o Adv Jan-Erik Svensson, HC Andersens Boulevard 12, Kopenhaum V, 1553 Denmark
(76) 1209, Orange Street, Wilmington, New Castle County, DE, 19801 USA
(77) Kokermolen 16, Houten, 3994 DH Netherlands
(78) 46A, Avenue J.F Kennedy,L 1855 Luxembourg
(79) 2nd Floor 120 Old Broad Street, London, EC2N 1AR UK
(80) 5 Little Portland Street, London W1W 7JD UK
(81) 13 - 18 City Quay, Dublin Dockland, Dublin 2, D02 ED70 RoI

Non-IFRS financial measures
NatWest Group Annual Report and Accounts 2021 395
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
NatWest Group prepares its financial statements in accordance with generally accepted accounting principles (GAAP). This
document contains a number of adjusted or alternative performance measures, also known as non-GAAP or non-IFRS
performance measures. These measures are adjusted for notable and other defined items which management believe are not
representative of the underlying performance of the business and which distort period-on-period comparison. The non-IFRS
measures provide users of the financial statements with a consistent basis for comparing business performance between financial
periods and information on elements of performance that are one-off in nature. The non-IFRS measures also include the
calculation of metrics that are used throughout the banking industry. These non-IFRS measures are not measures within the scope
of IFRS and are not a substitute for IFRS measures.
Non-IFRS financial measures
1. Adjustment for notable items
Go-forward group income excluding notable items is calculated as total income excluding Ulster Bank RoI total income and
excluding notable items. UK and RBSI retail and commercial businesses total income excluding notable items comprises income in
the Retail Banking, Commercial Banking, Private Banking and RBS International operating segments excluding notable items.
The exclusion of notable items aims to remove the impact of one-offs which may distort period-on-period comparisons.
Refer to page 83 for further details.
2021
2020
2019
Continuing operations
Total income (1)
10,512
10,508
13,987
Less Ulster Bank RoI total income
(228)
(222)
(301)
Go-forward group income
10,284
10,286
13,686
Less notable items
(210)
384
(2,115)
Go-forward group total income excluding notable items
10,074
10,670
11,571
Total income
Retail Banking
4,445
4,181
4,866
Private Banking
816
763
777
Commercial Banking
3,875
3,958
4,318
RBS International 548
497
610
UK and RBSI retail and commercial businesses income
9,684
9,399
10,571
Less notable items (2) (64)
87
(33)
UK and RBSI retail and commercial businesses income excluding notable items 9,620
9,486
10,538
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(2) For details of UK and RBSI retail and commercial businesses notable items refer to page 84.
2. Adjustment for asset disposals/strategic risk reductions and own credit adjustments
NWM total income excluding asset disposals/strategic risk reductions and own credit adjustments (OCA) is calculated as total
income of the NWM business less asset disposals/strategic risk reductions and OCA.
This aims to show underlying income generation in NWM excluding the impact of disposal losses and OCA.
Refer to pages 83 and 92 for further details.
2021
2020
2019
NWM total income 415
1,123
1,342
Less asset disposals/strategic risk reduction
64
83
—
Less OCA
(6)
24
80
NWM total income excluding asset disposals/ strategic risk reductions and OCA
473
1,230
1,422

Non-IFRS financial measures continued
NatWest Group Annual Report and Accounts 2021 396
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
3. Operating expenses - management view
The management analysis of operating expenses shows strategic costs and litigation and conduct costs in separate lines.
Depreciation and amortisation, and other administrative expenses attributable to these costs are included in strategic costs and
litigation and conduct costs lines for management analysis. These amounts are included in staff, premises and equipment and
other administrative expenses in the statutory analysis.
Other expenses excludes strategic costs and litigation and conduct costs, which are more volatile and may distort comparisons
with prior periods.
Refer to page 300 for further details.
Non-statutory analysis
Year ended
31 December 2021
Litigation
Statutory
Strategic
and conduct
Other operating
Operating expenses
costs costs expenses expenses
Continuing operations
Staff expenses
411
—
3,265 3,676
Premises and equipment
103
—
1,030 1,133
Other administrative expenses 133 466 1,427 2,026
Depreciation and amortisation 140
—
783 923
Total 787 466 6,505 7,758
31 December 2020 (1)
Litigation
Statutory
Strategic and conduct Other operating
Operating expenses
costs costs expenses expenses
Continuing operations
Staff expenses
462 — 3,416 3,878
Premises and equipment
233 — 989 1,222
Other administrative expenses
197 113 1,535 1,845
Depreciation and amortisation
121 — 792 913
Total
1,013 113 6,732 7,858
31 December 2019 (1)
Litigation
Statutory
Strategic
and conduct
Other
operating
Operating expenses
costs
costs
expenses
expenses
Continuing operations
Staff expenses
451
—
3,525
3,976
Premises and equipment
239
—
1,019
1,258
Other administrative expenses
295
895
1,638
2,828
Depreciation and amortisation
396
—
822
1,218
Total
1,381
895
7,004
9,280
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8.
4. Other expenses excluding operating lease depreciation (OLD) and Ulster Bank RoI direct costs
Our cost target for 2021 is based on this measure and we track progress against this.
Refer to page 83 for further details.
2021
2020 (1)
2019 (1)
Continuing operations
Total operating expenses
7,758
7,858
9,280
Less strategic costs
(787)
(1,013)
(1,381)
Less litigation and conduct costs
(466)
(113)
(895)
Other expenses
6,505
6,732
7,004
Less OLD (140)
(145)
(138)
Other expenses excluding OLD
6,365
6,587
6,866
Less Ulster Bank RoI direct costs
(273)
(239)
(247)
Other expenses excluding OLD and Ulster Bank RoI direct costs
6,092
6,348
6,619
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.

Non-IFRS financial measures continued
NatWest Group Annual Report and Accounts 2021 397
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
5. Cost:income ratio
The cost:income ratio is calculated as total operating expenses less OLD divided by total income less OLD.
This is a common metric used to compare profitability across the banking industry.
Refer to pages 87 to 92 for further details.
Go
-
forward group
Total
Central
excluding
Retail Private
Commercial
RBS NatWest
items
Ulster Ulster
NatWest
Banking
Banking
Banking
International
Markets
& other
Bank RoI
Bank RoI
Group
Year ended 31 December 2021
£m £m £m £m £m
£m £m
£m
£m
Continuing operations
Operating expenses
(2,513) (520)
(2,354)
(242) (1,161) (486) (7,276) (482) (7,758)
Operating lease depreciation
—
—
140
—
—
—
140
—
140
Adjusted operating expenses (2,513) (520)
(2,214)
(242) (1,161) (486) (7,136) (482) (7,618)
Total income 4,445 816
3,875
548 415 185 10,284 228 10,512
Operating lease depreciation
—
—
(140)
—
—
—
(140)
—
(140)
Adjusted total income
4,445 816
3,735
548 415 185 10,144 228 10,372
Cost:income ratio
56.5% 63.7%
59.3%
44.2% 279.8% nm 70.3% nm 73.4%
Year ended 31 December 2020
(1)
Continuing operations
Operating expenses
(2,540) (455)
(2,430)
(291) (1,310) (391) (7,417) (441) (7,858)
Operating lease depreciation
— —
145
— — — 145 — 145
Adjusted operating expenses
(2,540) (455)
(2,285)
(291) (1,310) (391) (7,272) (441) (7,713)
Total income
4,181 763
3,958
497 1,123 (236) 10,286 222 10,508
Operating lease depreciation
— —
(145)
— — — (145) — (145)
Adjusted total income
4,181 763
3,813
497 1,123 (236) 10,141 222 10,363
Cost:income ratio
60.8% 59.6%
59.9%
58.6% 116.7% nm 71.7% nm 74.4%
Year ended 31 December 2019 (1)
Continuing operations
Operating expenses
(3,618) (486)
(2,600)
(264) (1,418) (384) (8,770) (510) (9,280)
Operating lease depreciation
— —
138
— — — 138 — 138
Adjusted operating expenses
(3,618) (486)
(2,462)
(264) (1,418) (384) (8,632) (510) (9,142)
Total income
4,866 777
4,318
610 1,342 1,773 13,686 301 13,987
Operating lease depreciation
— —
(138)
— — — (138) — (138)
Adjusted total income
4,866 777
4,180
610 1,342 1,773 13,548 301 13,849
Cost:income ratio
74.4% 62.5%
58.9%
43.3% 105.7% nm 63.7% nm 66.0%
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.

Non-IFRS financial measures continued
NatWest Group Annual Report and Accounts 2021 398
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
6. NatWest Group return on tangible equity
Return on tangible equity comprises annualised profit or loss for the period attributable to ordinary shareholders divided by
average tangible equity. Average tangible equity is average total equity excluding non-controlling interests (NCI) less average
intangible assets and average other owners’ equity.
Go-forward group return on tangible equity is calculated as annualised profit or loss for the period less Ulster Bank RoI loss from
continuing operations and less profit from discontinued operations divided by go-forward group total tangible equity.
This measure shows the return NatWest Group generates on tangible equity deployed. It is used to determine relative performance
of banks and used widely across the sector.
Refer to pages 83 and 87 for further details.
Year ended or as at
31 December
31 December
NatWest Group return on tangible equity
2021
2020
Profit/(loss) attributable to ordinary shareholders (£m)
2,950
(753)
Average total equity (£m) 42,727
43,774
Adjustment for other owners equity and intangibles (£m) (11,395)
(11,872)
Adjusted total tangible equity (£m) 31,332
31,902
Return on tangible equity (%) 9.4%
(2.4%)
Go-forward group return on tangible equity
Profit/(loss) attributable to ordinary shareholders (£m)
2,950
(753)
Less Ulster Bank RoI loss from continuing operations (£m)
255
495
Less profit from discontinued operations (£m) (276)
(121)
Go
-
forward group profit/(loss) attributable to
ordinary shareholders (£m)
2,929
(379)
Average total equity (£m)
42,727
43,774
Adjustment for other owners equity and intangibles (£m)
(11,395)
(11,872)
Adjusted total tangible equity (£m)
31,332
31,902
Go-forward group RWAe applying factor (%)
93%
93%
Go-forward group total tangible equity (£m)
29,139
29,669
Return on tangible equity (%)
10.0%
(1.3%)

Non-IFRS financial measures continued
NatWest Group Annual Report and Accounts 2021 399
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Risk and capital management
Additional information
Financial review
7. Segmental return on equity
Segmental return on equity comprises segmental operating profit or loss, adjusted for preference share dividends and tax, divided
by average notional tangible equity, allocated at an operating segment specific rate of the period average segmental risk-
weighted assets, incorporating the effect of capital deductions (RWAes).
This measure shows the return generated by operating segments on equity deployed.
Refer to pages 87 to 92 for further details.
Retail Private Commercial RBS
NatWest
Year ended 31 December 2021
Banking Banking Banking International Markets
Operating profit/(loss) (£m)
1,968 350 2,594 358 (711)
Preference share cost allocation (£m)
(79) (21) (154) (20) (63)
Adjustment for tax (£m)
(529) (92) (683) (59) 217
Adjusted attributable profit/(loss) (£m)
1,360 237 1,757 279 (557)
Average RWAe (£bn)
36.0 11.2 69.5 7.8 28.4
Equity factor 14.5% 12.5% 11.5% 16.0% 15.0%
RWAe applying equity factor (£bn)
5.2 1.4 8.0 1.2 4.3
Return on equity 26.1% 17.0% 22.0% 22.5% (13.1%)
Year ended 31 December 2020
Operating profit/(loss) (£m)
849 208 (399) 99 (227)
Preference share cost allocation (£m)
(88) (22) (153) (20) (68)
Adjustment for tax (£m)
(213) (52) 155 (11) 83
Adjusted attributable profit/(loss) (£m)
548 134 (397) 68 (212)
Average RWAe (£bn)
37.2 10.4 76.4 7.0 37.3
Equity factor
14.5% 12.5% 11.5% 16.0% 15.0%
RWAe applying equity factor (£bn)
5.4 1.3 8.8 1.1 5.6
Return on equity
10.2% 10.3% (4.5%) 6.1% (3.8%)
Year ended 31 December 2019
Operating profit/(loss) (£m)
855 297 1,327 344 (25)
Adjustment for tax (£m)
(236) (83) (372) (48) 7
Preference share cost allocation (£m)
(74) (18) (163) (11) (64)
Adjustment for Alawaal bank merger gain (£m)
— — — — (150)
Adjusted attributable profit/(loss) (£m)
545 196 792 285 (232)
Average RWAe (£bn)
37.7 9.8 78.2 6.9 48.0
Equity factor
15.0% 13.0% 12.0% 16.0% 15.0%
RWAe applying equity factor (£bn)
5.7 1.3 9.4 1.1 7.2
Return on equity
9.6% 15.4% 8.4% 25.7% (3.2%)
8. Tangible equity
Tangible equity is ordinary shareholders’ interest less intangible assets. TNAV per ordinary share is calculated as tangible equity
divided by the number of ordinary shares in issue.
This is a measure used by external analysts in valuing the bank and the starting point for calculating regulatory capital.
Refer to page 83 for further details.
Year ended
31 December
31 December
2021
2020
Ordinary shareholders’ interests (£m)
37,412
38,367
Less intangible assets (£m)
(6,723)
(6,655)
Tangible equity (£m)
30,689
31,712
Ordinary shares in issue (millions)
11,272
12,129
TNAV per ordinary share (pence)
272p
261p

Non-IFRS financial measures continued
NatWest Group Annual Report and Accounts 2021 400
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Additional information
Financial review
9. Net interest margin
Bank net interest margin is defined as net interest income of the banking business of the Go-forward group less NatWest Markets
(NWM) element and excluding liquid asset buffer, as a percentage of bank average interest-earning assets. Bank average interest
earning assets are the average interest earning assets of the banking business of the Go-forward group less NWM element and
excluding liquid asset buffer.
The exclusion of the NWM element aims to eliminate the impact of distorting volatility in NWM. The exclusion of the Ulster Bank RoI
from the aims to align the basis of calculation with prior periods.
Liquid asset buffer consists of assets held by NatWest Group, such as cash and balances at central banks and debt securities in
issue, that can be used to ensure repayment of financial obligations as they fall due.
The exclusion of liquid asset buffer has been introduced as a way to present net interest margin on a basis more comparable with
UK peers and exclude the impact of regulatory driven factors.
Refer to pages 83 and 88 to 91 for further details.
Year ended
31 December
31 December 31 December
2021
2020 2019
£m
£m £m
Continuing operations
NatWest Group net interest income
(1) 7,614
7,476 7,799
Less NWM net interest income (9)
57 188
Less Ulster Bank RoI net interest income
(100)
(122) (152)
Bank net interest income 7,505
7,411 7,835
Average interest earning assets (IEA)
524,886
483,719 439,994
Less NWM average IEA (32,730)
(37,929) (35,444)
Less Ulster Bank RoI average IEA (15,854)
(16,600) (16,538)
Less liquid asset buffer average IEA (1) (162,195)
(127,945) (106,925)
Bank average IEA
314,107
301,245 281,087
Bank net interest margin 2.39%
2.46% 2.79%
(1) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.

Non-IFRS financial measures continued
NatWest Group Annual Report and Accounts 2021 401
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Risk and capital management
Additional information
Financial review
10. Net lending
NatWest Group net lending is calculated as total loans to customers less loan impairment provisions.
Go-forward group net lending is calculated as net loans to customers less Ulster Bank RoI net loans to customers.
UK and RBSI retail and commercial businesses net lending excluding UK Government support schemes comprises customer loans
in the Retail Banking, Commercial Banking, Private Banking and RBS International operating segments, excluding UK Government
support schemes.
This is the basis of our lending target for our key retail and commercial businesses.
Refer to pages 83 for further details.
As at
31 December
31 December
2021
2020
£bn
£bn
Total loans to customers (amortised cost)
362.8
366.5
Less loan impairment provisions
(3.8)
(6.0)
Net loans to customers (amortised cost)
359.0
360.5
Less Ulster Bank RoI net loans to customers (amortised cost)
(6.7)
(18.0)
Go
-
forward group net lending
352.3
342.5
Net loans to customers (amortised cost)
Retail Banking
182.2
172.3
Private Banking
18.4
17.0
Commercial Banking
101.2
108.2
RBS International
15.5
13.3
UK and RBSI retail and commercial businesses net loans to customers (amortised cost)
317.3
310.8
Less UK Government support schemes
(11.6)
(12.9)
Total UK and RBSI retail and commercial businessesnet lending excluding UK Government support
schemes
305.7
297.9
11. Customer deposits
Go-forward group customer deposits is calculated as total customer deposits less Ulster Bank RoI customer deposits.
UK and RBSI retail and commercial businesses customer deposits comprises customer deposits in the Retail Banking, Commercial
Banking, Private Banking and RBS International operating segments.
This metric is used to show underlying deposit movements across our key retail and commercial businesses.
Refer to pages 83 for further details.
As at
31 December
31 December
2021
2020
£bn
£bn
Total customer deposits
479.8
431.7
Less Ulster Bank RoI customer deposits
(18.4)
(19.6)
Go-forward group customer deposits
461.4
412.1
Retail Banking
188.9
171.8
Private Banking
39.3
32.4
Commercial Banking
177.7
167.7
RBS International
37.5
31.3
Total UK and RBSI retail and commercial businesses customer deposits
443.4
403.2
12. Total operating profit before tax including discontinued operations
Given the current progress of the phased withdrawal from the Republic of Ireland, Ulster Bank RoI results are currently presented
in both continuing and discontinued operations. Including operating profit before tax from discontinued operations provides a
complete view of the NatWest Group operating profit in 2021.
Refer to page 82 for further details.
2021
2020
2019
Operating profit/(loss) before tax
4,032
(481)
3,983
Operating profit before tax from discontinued operations 279
130
249
Total operating profit including discontinued operations
4,311
(351)
4,232

Non-IFRS financial measures continued
NatWest Group Annual Report and Accounts 2021 402
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Risk and capital management
Additional information
Financial review
Performance metrics not defined under IFRS
Metrics based on GAAP measures, included as not defined under IFRS and reported for compliance with ESMA adjusted
performance measure rules.
1. Loan:deposit ratio
Loan:deposit ratio is calculated as net customer loans held at amortised cost divided by total customer deposits.
This is a common metric used among peers to assess liquidity.
Refer to page 89 to 90 for further details.
As at
31 December
31 December 31 December
2021
2020 2019
£m
£m £m
Loans to customers - amortised cost 358,990
360,544 326,947
Customer deposits 479,810
431,739 369,247
Loan:deposit ratio (%)
75%
84% 89%
2. Loan impairment rate
Loan impairment rate is the annualised loan impairment charge divided by gross customer loans.
Refer to pages 83 and 88 to 91 for further details.
3. Funded assets
Funded assets is calculated as total assets less derivative assets.
This measure allows review of balance sheet trends exclusive of the volatility associated with derivative fair values.
Refer to pages 92 and 93 for further details.
4. AUMAs
AUMA comprises both assets under management (AUMs) and assets under administration (AUAs) serviced through the Private
Banking franchise. AUMs comprise assets where the investment management is undertaken by Private Banking on behalf of
Private Banking, Retail Banking and RBSI customers. AUAs comprise third party assets held on an execution-only basis in custody
by Private Banking, Retail Banking and RBSI for their customers accordingly, for which the execution services are supported by
Private Banking. Private Banking receives a fee for providing investment management and execution services to Retail Banking
and RBSI franchises.
Private Banking is the Centre of Expertise for asset management across NatWest Group, servicing all client segments across Retail,
Premier and Private Banking.
Refer to page 89 for further details.
5. Depositary assets
Assets held by RBSI as an independent trustee and in a depositary service capacity.
Depositary assets are a closely monitored KPI for the RBS International business and its inclusion in commentary highlights the
services that RBS International provides.
Refer to page 91 for further details.
6. Wholesale funding
Wholesale funding comprises deposits by banks, debt securities in issue and subordinated liabilities.
This is a closely monitored metric used across the banking industry to ensure capital requirements are being met.
Refer to page 83 for further details.

The Capital Requirements (Country-by-Country
Reporting) Regulations (Audited)
NatWest Group Annual Report and Accounts 2021 403
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
This report has been prepared for NatWest Group to comply with the Capital Requirements (Country-by-Country Reporting)
Regulations 2013 which implement Article 89 of the Capital Requirements Directive IV.
This report shows the income, profit/(loss) before tax, tax paid/(received), average and spot employee numbers on a full-time
equivalent basis for the entities located in the countries in which we operate.
Country
Each subsidiary or branch is allocated to the country in which it is resident for tax purposes. The data is consolidated for all the
subsidiaries and branches allocated to each country.
Income and profit/(loss) before tax
Income and profit/(loss) totals are reported in Note 4 within the Geographical segments table.
Tax paid/(received)
Tax paid/(received) disclosed under CRD IV relates to corporation tax.
Corporation tax paid represents net cash taxes paid to/(received) from the tax authorities in each jurisdiction.
Corporation tax paid is reported on a cash basis as opposed to an accounting basis and therefore does not necessarily have a
direct correlation to the reported profits or losses arising in the year. For example, in certain jurisdictions taxable profits may be
reduced as a result of the offset of tax losses brought forward from prior years; or tax payments may be calculated with reference
to prior year profits.
Full time equivalent employees (FTEs)
FTEs are allocated to the country in which they are primarily based for the performance of their employment duties. The figures
disclosed represent the average number of FTEs, including temporary staff, in each country during the period. The FTEs, including
temporary staff, at 31 December 2021, have been added for completeness.
Public subsidies received
No public subsidies were received during the period .

The Capital Requirements (Country-by-Country Reporting) Regulations (Audited) continued
NatWest Group Annual Report and Accounts 2021 404
Financial statements
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Additional information
Financial review
NatWest Group Country-by-Country tax breakdown 2021
Headcount
Income (1,7)
Profit/(loss) before
tax (1,7) Tax paid/ (received)
Average FTE including
temporary staff
FTE including temporary staff as at
the year end 31 December 2021
Country
£m £m £m
UK
9,600 3,948 787 40,426
39,692
Guernsey 99 83 8 85
83
Isle of Man 55 22
—
348
337
Jersey 166 90 1 702
676
UK region
9,920 4,143 796 41,561
40,788
Finland
—
—
2 3
3
France 23 (9) 1 40
49
Germany 14 (2) 2 61
70
Gibraltar
29 17 1 58
55
Greece
—
(1)
—
1
1
Republic of Ireland
453 (1) 2 2,000
1,935
Italy
7 (2) 1 14
12
Luxembourg 28 14 2 59
59
Netherlands 86 30
—
106
112
Norway
—
—
1
—
—
Poland (2)
5 2
—
1,280
1,369
Spain
6 (2) 1 13
5
Sweden
37 28 9 35
34
Switzerland (2) 1 5 6 273
274
Turkey 2 1 1 2
2
Europe region 691 80 28 3,945
3,980
USA
100 48 2 291
270
US region
100 48 2 291
270
Hong Kong
9 (2)
—
14
9
India (2) 13 37 12 13,164
13,541
Japan
18 2
—
37
37
Singapore
31 3
—
110
110
Asia Pacific region
71 40 12 13,325
13,697
Saudia Arabia (3)
—
—
18
—
—
Middle East region
—
—
18
—
—
UK region 9,920 4,143 796 41,561
40,788
US region 100 48 2 291
270
Europe region
691 80 28 3,945
3,980
Rest of World region
71 40 30 13,325
13,697
Global total
10,782 4,311 856 59,122
58,735
For the notes to this table refer to the following page.

The Capital Requirements (Country-by-Country Reporting) Regulations (Audited) continued
NatWest Group Annual Report and Accounts 2021 405
Financial statements
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Additional information
Financial review
NatWest Group Country-by-Country tax breakdown 2020
Headcount
(Loss)/profit
Tax paid/
Average FTE FTE including temporary
Income (1,4) before tax (1,4)
(received) (4)
including staff as at the year end
£m £m
£m
temporary staff
31 December 2020
Country
UK
9,431 (223)
113
42,748 41,185
Guernsey
92 42
12
100 92
Isle of Man
59 4
3
405 382
Jersey
165 (16)
15
624 616
UK region
9,747 (193)
143
43,877 42,275
Finland
6 6
2
3 2
France
20 2
—
31 32
Germany
13 1
(1)
39 43
Gibraltar
28 9
4
67 60
Greece
— —
1
1 1
Republic of Ireland
512 (235)
1
2,223 2,153
Italy
9 2
1
16 16
Luxembourg
16 1
1
57 62
Netherlands
77 7
—
99 96
Norway
3 2
2
— —
Poland (2)
1 5
—
1,216 1,184
Spain
9 —
1
18 18
Sweden
36 21
(2)
36 36
Switzerland
(2)
3 18
11
273 270
Turkey
2 —
3
2 2
Europe region
735 (161)
24
4,081 3,975
USA
181 (85)
(1)
378 326
US region
181 (85)
(1)
378 326
Hong Kong
13 —
—
27 24
India (2)
28 52
24
13,321 13,164
Japan
23 5
1
41 39
Singapore
68 30
—
135 112
Taiwan
1 2
(1)
— —
Asia Pacific region
133 89
24
13,524 13,339
Saudi Arabia (3)
— —
24
— —
United Arab Emirates
— (1)
—
— —
Middle East region
— (1)
24
— —
UK region
9,747 (193)
143
43,877 42,275
Europe region
735 (161)
24
4,081 3,975
US region
181 (85)
(1)
378 326
Rest of World region
133 88
48
13,524 13,339
Global total
10,796 (351)
214
61,860 59,915
(1) A full list of NatWest Group subsidiaries' names, nature of activities and geographical locations is available at Note 12 of the parent company accounts.
(2) Income excludes internal service fee income which has been calculated on a cost plus mark-up basis.
(3) Tax paid of £18 million in Saudi Arabia is due to capital gains tax arising on the merger of Alawwal bank with SABB during 2019.
(4) Comparative results have been re-presented from those previously published to reclassify certain operations as discontinued operations as described in Note 8 to the consolidated
financial statements.
(5) A list of the principal subsidiaries in each jurisdiction and the nature of their activities is available at Note 9 of the parent company accounts.
(6) The amounts shown above are presented to the nearest million and as a result any amounts less than £0.5 million have been rounded to zero.
(7) The information above is presented on a gross reporting basis and includes results from discontinued operations. The results from discontinued operations are included in the Ireland
totals, contributing to Income: £269 million; Profit before tax: £279 million; Tax paid: nil; Subsidies received: nil; Headcount: 715.

Risk factors
NatWest Group Annual Report and Accounts 2021 406
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Principal Risks and
Uncertainties
Set out below are certain risk factors
that could adversely affect NatWest
Group’s future results, its financial
condition and prospects and cause them
to be materially different from what is
forecast or expected, and directly or
indirectly impact the value of its
securities in issue. These risk factors are
broadly categorised and should be read
in conjunction with other sections of this
annual report, including the forward-
looking statements section, the strategic
report and the risk and capital
management section. They should not be
regarded as a complete and
comprehensive statement of all potential
risks and uncertainties facing NatWest
Group. The COVID-19 pandemic may
exacerbate any of the risks described
below.
Economic and political risk
The impact of the COVID-19 pandemic
and related uncertainties continue to
affect the UK, global economies and
financial markets and NatWest Group’s
customers, as well as its competitive
environment, which may continue to
have an adverse effect on NatWest
Group.
In many countries, including the UK
(NatWest Group’s most significant
market), the COVID-19 pandemic has, at
times, resulted in the imposition of strict
social distancing measures, restrictions
on non-essential activities and travel
quarantines, in an attempt to slow the
spread and reduce the impact of the
COVID-19 pandemic. The COVID-19
pandemic has also, at times, caused
significant reductions in levels of
consumer and commercial activity,
reductions in consumer spending,
increased levels of corporate debt and,
for some customers, personal debt,
increased unemployment and significant
market volatility in asset prices, interest
rates and foreign exchange rates. It has
also, at times, caused physical disruption
to global supply chains and working
practices, all of which have affected
NatWest Group’s customers. NatWest
Group has significant exposures to many
of the commercial sectors economically
impacted by the COVID-19 pandemic,
including property, retail, leisure and
travel.
Despite widespread COVID-19
vaccination within the geographical
regions in which NatWest Group
operates, the proliferation of COVID-19
variants continues to affect the UK and
global economies. Further waves of
infection or the spread of new strains
may result in renewed restrictions in
affected countries and regions. As a
result, significant uncertainties remain as
to how long the impact of the COVID-19
pandemic will last, and how it will
continue to affect the global economy.
In response to the COVID-19 pandemic,
central banks, governments, regulators
and legislatures in the UK and elsewhere
have offered unprecedented levels of
support and various schemes to assist
impacted businesses and individuals. This
has included forms of financial
assistance and legal and regulatory
initiatives. Many of these support
schemes have now been curtailed.
However, uncertainty remains as to the
impact of the ending or tapering of these
schemes and the repayment of the loans
involved on customers, the economic
environment and NatWest Group.
Moreover, it is unclear as to how any
further measures, such as rising interest
rates and inflation, may affect NatWest
Group’s business and performance.
The COVID-19 pandemic has prompted
many changes that may prove to be
permanent shifts in customer behaviour
and economic activity, such as changes
in spending patterns and significantly
more people working from home. These
changes may have long lasting impacts
on asset prices, the economic
environment and its customers financial
needs.
Uncertainties relating to the COVID-19
pandemic has made reliance on
analytical models and planning and
forecasting for NatWest Group more
complex, and may result in uncertainty
impacting the risk profile of NatWest
Group and/or that of the wider banking
industry. The medium and long-term
implications of the COVID-19 pandemic
for NatWest Group customers, the UK
housing market, and the UK and global
economies and financial markets remain
uncertain.
Any of the above may have a negative
impact on NatWest Group.
NatWest Group faces continued
economic and political risks and
uncertainty in the UK and global
markets.
The outlook for the global economy over
the medium-term remains uncertain due
to a number of factors including: the
COVID-19 pandemic, societal inequalities
and changes, trade barriers and the
increased possibility of and/or
continuation of trade wars, widespread
political instability (including as a result
of populism and nationalism, which may
lead to protectionist policies, state and
privately sponsored cyber and terrorist
acts or threats, efforts to destabilise
regimes or armed conflict), changes in
inflation and interest rates (including
negative interest rates), supply chain
disruption, climate, environmental, social
and other sustainability-related risks and
global regional variations in the impact
and responses to these factors.
These conditions could be worsened by a
number of factors including macro-
economic deterioration, increased
instability in the global financial system
and concerns relating to further financial
shocks or contagion (for example, due to
economic concerns in emerging
markets), market volatility or fluctuations
in the value of the pound sterling, new or
extended economic sanctions, volatility
in commodity prices or concerns
regarding sovereign debt. This may be
compounded by the changing
demographics of the populations in the
markets that NatWest Group serves,
increasing social and other inequalities,
or rapid change to the economic
environment due to the adoption of
technology and artificial intelligence. Any
of the above developments could
adversely impact NatWest Group directly
(for example, as a result of credit losses)
or indirectly (for example, by impacting
global economic growth and financial
markets and NatWest Group’s customers
and their banking needs).
In addition, NatWest Group is exposed to
risks arising out of geopolitical events or
political developments, such as exchange
controls and other measures taken by
sovereign governments that may hinder
economic or financial activity levels.
Furthermore, unfavourable political,
military or diplomatic events, including
secession movements or the exit of other
member states from the EU, armed
conflict, pandemics and widespread
public health crises (including the current
COVID-19 pandemic and any future
epidemics or pandemics), state and
privately sponsored cyber and terrorist
acts or threats, and the responses to
them by governments and markets,
could negatively affect the business and
performance of NatWest Group,
including as a result of the indirect effect
on regional or global trade and/or
NatWest Group’s customers.
NatWest Group faces political
uncertainty in Scotland, as a result of a
possible second Scottish independence
referendum. Independence may
adversely impact NatWest Group since
NatWest Group plc and other NatWest
Group entities (including NWM Plc) are
incorporated in Scotland. Any changes
to Scotland’s relationship with the UK or
the EU would impact the environment in
which NatWest Group and its
subsidiaries operate, and may require
further changes to NatWest Group’s
structure, independently or in
conjunction with other mandatory or
strategic structural and organisational
changes which, any of which could
adversely impact NatWest Group.

Risk factors continued
NatWest Group Annual Report and Accounts 2021 407
Financial statements
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Governance
Risk and capital management
Additional information
Financial review
The value of NatWest Group’s financial
instruments may be materially affected
by market risk, including as a result of
market fluctuations. Market volatility,
illiquid market conditions and disruptions
in the credit markets may make it
extremely difficult to value certain of
NatWest Group’s financial instruments,
particularly during periods of market
displacement. This could cause a decline
in the value of NatWest Group’s financial
instruments, which may have an adverse
effect on NatWest Group’s results of
operations in future periods, or
inaccurate carrying values for certain
financial instruments.
In addition, financial markets are
susceptible to severe events evidenced
by rapid depreciation in asset values,
which may be accompanied by a
reduction in asset liquidity. Under these
conditions, hedging and other risk
management strategies may not be as
effective at mitigating trading losses as
they would be under more normal
market conditions. Moreover, under
these conditions, market participants are
particularly exposed to trading strategies
employed by many market participants
simultaneously and on a large scale,
increasing NatWest Group’s counterparty
risk. NatWest Group’s risk management
and monitoring processes seek to
quantify and mitigate NatWest Group’s
exposure to more extreme market
moves. However, severe market events
have historically been difficult to predict
and NatWest Group could realise
significant losses if extreme market
events were to occur.
Any of the above may have a negative
effect on NatWest Group.
Continuing uncertainty regarding the
effects and extent of the UK’s post Brexit
divergence from EU laws and regulation,
and NatWest Group’s post Brexit EU
operating model may continue to
adversely affect NatWest Group and its
operating environment.
The UK ceased to be a member of the
EU and the European Economic Area
(‘EEA’) on 31 January 2020 (‘Brexit’) and
the 2020 EU-UK Trade and Cooperation
Agreement (‘TCA’) ended the transition
period on 31 December 2020. The TCA
provides for free trade between the UK
and EU with zero tariffs and quotas on
all goods that comply with the
appropriate rules of origin, with minimal
coverage. However, for financial
services, UK-incorporated financial
services providers no longer have EU
passporting rights and there is no mutual
recognition regime. Financial services
may largely be subject to individual
equivalence decisions by relevant
regulators. A number of temporary
equivalence decisions have been made
that cover certain services offered by
NatWest Group. The EU’s equivalence
regime does not cover most lending and
deposit taking, and determinations in
respect of third countries have not, to
date, covered the provision of most
investment services. In addition,
equivalence determinations do not
guarantee permanent access rights and
can be withdrawn with short notice. The
TCA is accompanied by a Joint
Declaration on financial services which
sets out an intention for the EU and UK
to cooperate on matters of financial
regulation and to agree a Memorandum
of Understanding, which has yet to be
signed. In late 2021 the European
Commission proposed legislation that
would require non-EU firms to establish
a branch or subsidiary in the EU before
providing “banking services” in the EU. If
these proposals become law all “banking
services” will be licensable activities in
each EU member state and member
states will not be permitted to offer
bilateral permissions to financial
institutions outside the EU allowing them
to provide “banking services” in the EU.
Uncertainty remains as to whether
“banking services” will also include
investment products.
NatWest Group continues to evaluate its
post Brexit EU operating model, making
adaptations as necessary. NatWest
Group also continues to assess where
NatWest Group companies can obtain
bilateral regulatory permissions to
facilitate intragroup transactions and/or
to permit business to continue from its
UK entities, transferring what cannot be
continued to be rendered from the UK to
an EEA subsidiary or branch where
permitted. Where these regulatory
permissions are temporary or are
withdrawn, a different approach may
need to be taken or may result in a
change in operating model or some
business being ceased. Not all NatWest
Group entities have applied for bilateral
regulatory permissions and instead
intend to move EEA business to an EEA
licensed subsidiary or branch. There is a
risk that these EEA licenses may not be
granted, or may be withdrawn, and
where these permissions are not
obtained, further changes to NatWest
Group’s operating model may be
required or some business may need to
be ceased. In addition, failure to obtain
required regulatory permissions or
licences in one part of NatWest Group
may impact other parts of NatWest
Group adversely. Certain permissions
are required in order to maintain the
ability to clear euro payments. Other
permissions, including the ability to have
two intermediate EU parent
undertakings, would allow NatWest
Group to continue to serve EEA
customers from both the ring-fenced and
non-ring-fenced banking entities.
Furthermore, transferring business to an
EEA based subsidiary is a complex
exercise and involves legal, regulatory
and execution risks, and could result in a
loss of business and/or customers or
greater than expected costs. The
changes to NatWest Group’s operating
model have been costly and further
changes to its business operations,
product offering and customer
engagement could result in further costs.
The long-term effects of Brexit and the
uncertainty regarding NatWest Group’s
EU operating model may have a
negative impact on NatWest Group’s
business. These may be exacerbated by
wider global macro-economic trends and
events, particularly COVID-19 pandemic
related uncertainties, which may
significantly impact NatWest Group and
its customers and counterparties who
are themselves dependent on trading
with the EU or personnel from the EU.
They may exacerbate the economic
impacts of the COVID-19 pandemic on
the UK, the Republic of Ireland (‘ROI’)
and the rest of the EU/EEA.
Significant uncertainties remain as to the
extent to which EU/EEA laws will diverge
from UK law (including bank regulation),
whether and what equivalence
determinations will be made by the
various regulators, whether the proposed
EEA licensed subsidiary is granted a
banking licence, whether banking
services will be harmonised across the
EEA and, therefore, what the respective
legal and regulatory arrangements will
be, under which NatWest Group and its
subsidiaries will operate. This divergence
could lead to further market
fragmentation. These risks and
uncertainties may require costly changes
to NatWest Group’s EU operating model.
The legal and political uncertainty, and
any actions taken as a result of this
uncertainty, as well as the approach
taken by regulators and new or
amended rules, could have a significant
adverse impact on NatWest Group’s
businesses, non-UK operations and/or
legal entity structure, including attendant
operating, compliance and restructuring
costs, level of impairments, capital
requirements, changes to intragroup
arrangements, increased complexity,
regulatory environment and tax
implications and as a result may
adversely impact NatWest Group’s
profitability, competitive position,
business model and product offering.
Changes in interest rates have
significantly affected and will continue to
affect NatWest Group’s business and
results.
Interest rate risk is significant for
NatWest Group. Monetary policy has
been accommodative in recent years
including initiatives implemented by the

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Bank of England and HM Treasury, such
as the Term Funding Scheme with
additional incentives for SMEs (‘TFSME’),
which have helped to support demand at
a time of pronounced fiscal tightening
and balance sheet repair. However,
market expectations are currently that
benchmark interest rates such as UK
base rate, could begin to rise further and
faster than had been anticipated
previously and that this could be
accompanied by other measures to
reverse accommodative policy, such as
quantitative tightening.
While increases in interest rates may
support NatWest Group’s interest
income, sharp rises could have
macroeconomic effects that lead to
adverse outcomes for the business. For
example, they could lead to generally
weaker than expected growth, or even
contracting GDP, reduced business
confidence, higher default rates on
customer loans, higher levels of
unemployment or underemployment, and
falling property prices in the markets in
which NatWest Group operates, all of
which could adversely affect the
business and performance of NatWest
Group. Conversely, decreases in interest
rates and/or continued sustained low or
negative interest rates would be
expected to continue to put further
pressure on NatWest Group’s interest
income and profitability.
Unexpected moves in interest rates will
also affect valuations of assets and
liabilities that are recognised at fair value
on the balance sheet. Changes in these
valuations may be adverse. Unexpected
movements in spreads between key
benchmark rates could have adverse
impacts and also adversely affect
NatWest Group’s financial position.
Changes in foreign currency exchange
rates may affect NatWest Group’s results
and financial position.
Decisions of major central banks
(including the Bank of England, the
European Central Bank and the US
Federal Reserve) and political or market
events, which are outside NatWest
Group’s control, may lead to sharp and
sudden variations in foreign exchange
rates.
Although NatWest Group is principally a
UK focused banking group, it is subject
to foreign exchange risk from capital
deployed in NatWest Group’s foreign
subsidiaries, branches and joint
arrangements and customer transactions
denominated in a currency other than
the functional currency of NatWest
Group. NatWest Group also relies on
issuing securities in foreign currencies
that assist in meeting NatWest Group’s
minimum requirements for own funds
and eligible liabilities (‘MREL’) and NWM
Plc deals foreign exchange instruments.
NatWest Group maintains policies and
procedures designed to manage the
impact of exposures to fluctuations in
currency rates. Nevertheless, changes in
currency rates, particularly in the
sterling-US dollar and euro-sterling
rates, can adversely affect the value of
assets, liabilities (including the total
amount MREL-eligible instruments),
foreign exchange dealing activity,
income and expenses, RWAs and hence
the reported earnings and financial
condition of NatWest Group.
HM Treasury (or UKGI on its behalf)
could exercise a significant degree of
influence over NatWest Group and
further offers or sales of NatWest
Group’s shares held by HM Treasury
may affect the price of NatWest Group
securities.
In its March 2021 Budget, the UK
Government announced its intention to
continue the process of privatisation of
NatWest Group plc and to carry out a
programme of sales of NatWest Group
plc ordinary shares with the objective of
selling all of its remaining shares in
NatWest Group plc by 2025-2026. As a
result of a directed buyback of NatWest
Group plc shares by NatWest Group plc
from UK Government Investments
Limited (‘UKGI’) in March 2021, sales of
NatWest Group plc shares by UKGI by
accelerated bookbuild in May 2021 and
purchases made under NatWest Group
plc’s on-market buyback programme
announced in July 2021, as at 11
February 2022, the UK Government held
50.94% of the issued share capital with
voting rights of NatWest Group plc. In
addition to the £750 million on-market
buyback announced on 18 February
2022, NatWest Group may participate in
further directed or on-market buybacks
in the future. The timing, extent and
continuation of UKGI’s sell-downs is
uncertain, which could result in a
prolonged period of increased price
volatility on NatWest Group plc’s
ordinary shares.
Any offers or sales of a substantial
number of ordinary shares by UKGI,
market expectations about these sales
and any associated directed, on or off
market buyback activity by NatWest
Group, could affect the prevailing market
price for the outstanding ordinary shares
of NatWest Group plc.
HM Treasury has indicated that it intends
to respect the commercial decisions of
NatWest Group and that NatWest Group
will continue to have its own
independent board of directors and
management team determining its own
strategy. However, for as long as HM
Treasury remains the NatWest Group
plc’s largest single shareholder, HM
Treasury and UKGI (as manager of HM
Treasury’s shareholding) could exercise
a significant degree of influence over the
election of directors and appointment of
senior management, NatWest Group’s
capital strategy, dividend policy,
remuneration policy or the conduct of
NatWest Group’s operations, amongst
others. HM Treasury or UKGI’s approach
depends on government policy, which
could change. The manner in which HM
Treasury or UKGI exercises HM
Treasury’s rights as the largest single
shareholder could give rise to conflicts
between the interests of HM Treasury
and the interests of other shareholders,
including as a result of a change in
government policy.
Strategic risk
NatWest Group continues to implement
its purpose-led strategy, which carries
significant execution and operational
risks and may not achieve its stated aims
and targeted outcomes.
In February 2020, NatWest Group
announced a new strategy, focused on
becoming a purpose-led business,
designed to champion potential and to
help individuals, families and businesses
to thrive. This strategy is intended to
reflect the rapidly shifting environment
and backdrop of unprecedented
disruption in society driven by
technology and changing customer
expectations, as accelerated by the
COVID-19 pandemic. The purpose-led
strategy has required an internal cultural
shift across NatWest Group as to how
performance is perceived and how
NatWest Group conducts its business.
These changes are substantial and will
take many years to fully embed. These
changes may not result in the expected
outcome within the timeline and in the
manner currently contemplated.
As part of its purpose-led strategy,
NatWest Group has set a number of
financial, capital and operational targets
and expectations, both for the short term
and throughout the implementation
period. Meeting these targets and
expectations requires further significant
reductions to NatWest Group’s cost base.
Realising these cost reductions may
result in material strategic costs, which
may be more than currently expected.
The continued focus on meeting cost
reduction targets may also mean limited
investment in other areas, which could
affect NatWest Group’s long-term
prospects, product offering or
competitive position, its ability to meet its
other targets and commitments
(including those related to customer
satisfaction) and its capacity to respond
to climate-related risks.

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NatWest Group’s ability to meet its
planned reductions in its annual
underlying costs may vary considerably
from year to year. Any of the factors
above could jeopardise NatWest Group’s
ability to achieve its associated financial
targets and generate sustainable returns.
The financial services industry is
currently experiencing a trend towards
consolidation and technological
advancement and disruption. In pursuing
its purpose-led strategy, NatWest Group
may decide to undertake divestments,
restructurings or reorganisations of
certain of its customer segments.
Conversely, it may decide to grow its
business through acquisitions, joint
ventures, investments and/or strategic
partnerships as well as other
transactions and initiatives, in certain
customer segments and including to: (i)
enhance capabilities that may lead to
better productivity or cost efficiencies; (ii)
acquire talent; (iii) pursue new products
or expand existing products; or (iv) enter
new markets or enhance its presence in
existing markets. There are risks that
NatWest Group may not fully realise the
expected benefits and value from these
transactions and initiatives. In particular,
NatWest Group may: (i) fail to realise the
business rationale for the transaction or
initiative, or assumptions underlying the
business plans supporting the valuation
of a target business may prove
inaccurate, for example, synergies and
expected commercial demand; (ii) fail to
successfully integrate any acquired
businesses (including in respect of
technologies, existing strategies,
products and human capital); (iii) fail to
retain key employees, customers and
suppliers of any acquired business; (iv)
be required or wish to terminate pre-
existing contractual relationships, which
could prove costly and/or be executed at
unfavourable terms and conditions; (v)
fail to discover certain contingent or
undisclosed liabilities in businesses that it
acquires, or its due diligence to discover
any such liabilities may be inadequate;
and (vi) not obtain necessary regulatory
and other approvals or onerous
conditions may be attached to such
approvals. Accordingly, NatWest Group
may not be successful in growing its
business through these types of
transactions and initiatives and any
particular transaction may not succeed,
may be limited in scope or scale
(including due to NatWest Group’s
current ownership structure) and may
not conclude on the terms contemplated,
or at all. Any of the above may
materially and adversely affect NatWest
Group’s results of operations, financial
condition or prospects.
NatWest Group’s phased withdrawal
from ROI continues to present significant
commercial, operational, legal and
execution risks. In particular, the phased
withdrawal from ROI involves transfers
of business, assets and liabilities to third
parties, and entails many risks, the most
significant of which include: (i)
anticipated reductions in net income,
total lending and RWAs; (ii) potential
trapped or stranded capital; (iii) the
diversion of management resources and
attention away from day-to-day
management; (iv) the recognition of
disposal losses as part of the orderly run-
down of certain loan portfolios which
may be higher than anticipated; (v)
execution risks arising from the
significant uncertainties of a phased
withdrawal, including the additional IT
and operational expense and resource
required to mitigate manual and limited
customer switching and handling
processes of Ulster Bank Ireland DAC,
potential counterparties and other banks;
(vi) customer action or inaction, or the
inability to obtain necessary approvals
and/or support from governmental
authorities, regulators, trade unions
and/or other stakeholders resulting in
additional cost, resource and delays; (vii)
potential loss of customers, resulting in
retail and commercial deposit outflows
(or a failure to attract deposit inflows)
and reduced revenues and liquidity; (viii)
increased people risk through the
potential loss of key colleagues and
institutional knowledge and increased
challenges of attracting and retaining
colleagues; (ix) regulatory risk, including
in relation to prudential, conduct and
other regulatory requirements; (x) no or
limited access to Euro system funding
arrangements; and (xi) brand and
reputational risks due to press
speculation and stakeholder scrutiny
about the phased withdrawal from ROI.
Any of these risks and uncertainties may
cost more, be more complex or harder
to mitigate than currently estimated and
may adversely affect NatWest Group’s
ability to execute a phased withdrawal
from ROI, or may affect the financial
performance of NatWest Group.
On 27 January 2022, NatWest Group
announced that, in order to further
support its customers’ growth ambitions
and deliver on the next phase of its
strategy, it is evolving its Commercial,
NatWest Markets and RBS International
businesses to form a single franchise to
best support its customers across the full
non-personal customer lifecycle. The
transition is expected to begin over the
coming months and be effective from
July 2022.
In pursuing its strategy, NatWest Group
may not be able to successfully: (i)
implement all aspects of its strategy; (ii)
reach any or all of the related targets or
expectations of its strategy; or (iii) realise
the intended strategic objectives of any
other future strategic or growth initiative.
The scale and scope of its strategy and
the intended changes continue to
present material business, operational
(including compliance with the UK ring-
fencing regime), legal, execution, IT
system, internal culture, conduct and
people risks to NatWest Group.
Implementing many changes and
strategic actions concurrently, including
in respect of any growth initiatives, will
require application of robust governance
and controls frameworks and robust IT
systems; there is a risk that NatWest
Group may not be successful in these
respects. The implementation of the
purpose-led strategy and any other
strategic initiatives could result in
materially higher costs than initially
contemplated (including due to material
uncertainties and factors outside of
NatWest Group’s control) and may not
be completed as planned, or at all, or
could be phased or could progress in a
manner other than currently expected.
This could lead to additional
management actions by NatWest Group.
Changes in the economic, political and
regulatory environment in which
NatWest Group operates, or regulatory
uncertainty and changes, strong market
competition and industry disruption or
economic volatility may require NatWest
Group to adjust aspects of its strategy or
the timeframe for its implementation
including in relation to its financial,
capital and operational targets and
expectations. As certain initiatives
depend on achieving growth in new
ventures and opportunities for NatWest
Group, its strategy is vulnerable to an
economic downturn. NatWest Group’s
strategy also requires ongoing
confidence from customers and the
wider market, without which customer
activity and related income levels may
fall or NatWest Group’s reputation may
be adversely affected.
Each of these risks, and others identified
in these Risk Factors, individually or
collectively could jeopardise the
implementation and delivery of the
purpose-led strategy and other strategic
initiatives, result in higher than expected
costs, impact NatWest Group’s products
and services offering, its reputation with
customers or business model and
adversely impact NatWest Group’s ability
to deliver its strategy and meet its
targets and guidance, each of which
could have a negative impact on
NatWest Group.
Additional information

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NatWest Group continues to refocus its
NWM franchise, which entails material
execution, commercial and operational
risks and the intended benefits for
NatWest Group may not be realised
within the timeline and in the manner
currently contemplated.
Over the past few years, as part of its
purpose-led strategy, NatWest Group
has sought to implement a more
strategically congruent and economically
sustainable model for its NWM franchise.
As part of this, NatWest Group has been
refocusing the NWM franchise to
principally serve NatWest Group’s
corporate and institutional customer
base. This requires NWM Group to
simplify its operating model and
technology platform, as well as reduce
its cost base and capital requirements.
NWM Group has also directed resources
to emphasising and growing product
capability in the areas of importance to
NatWest Group’s corporate and
institutional customers, including the
Fixed Income and Capital Markets
businesses, and has refocused its Rates
business to best serve its core
customers.
In addition, to improve efficiencies and
best serve customers following Brexit,
NatWest Group expects that certain
assets, liabilities, transactions and
activities of its Western European
corporate portfolio (principally including
term funding and revolving credit
facilities), will be transferred from the
ring-fenced subgroup of NatWest Group
to NWM Group on a rolling basis, subject
to certain regulatory and customer
requirements. The timing and quantum
of these transfers remain uncertain as is
the impact of these transactions on its
go-forward results of operations. As a
result, NatWest Group’s business, results
of operations, financial position and
prospects could be adversely affected.
NatWest Group’s ability to serve its
customers may be diminished by the
changed business strategy, as a result of
the NWM Refocusing. In addition,
customer reactions to the changed
nature of NWM Group’s business model
may be more adverse than expected and
previously anticipated revenue and
profitability levels may not be achieved in
the timescale envisaged or at all. An
adverse macroeconomic environment
(including due to the COVID-19
pandemic, heightened inflation and rising
interest rates), continued political and
regulatory uncertainty, market volatility
and/or strong market competition may
also pose significant challenges to the
achievement of the anticipated targets
and goals of the NWM Refocusing.
The implementation of the NWM
Refocusing has been a complex process
and although substantial progress has
been made, the risk remains that this
strategy may not result in the
contemplated business outcome and
there continue to be material execution,
commercial and operational risks in
connection with the NWM Refocusing.
There may continue to be material
execution, commercial and operational
risks for NWM Group and NWM Group
may continue to be subject to significant
structural and other change. There can
be no certainty that the NWM Refocusing
will be successful or that NWM Group
will be a viable, competitive or profitable
business. The intended benefits for
NatWest Group may not be realised
within the timeline and in the manner
currently contemplated.
Trends relating to the COVID-19
pandemic may adversely affect NatWest
Group’s strategy and impair its ability to
meet its targets and strategic objectives.
The trajectory of the COVID-19
pandemic’s impact on the UK and global
economy and NatWest Group remains
uncertain. If trends relating to the
COVID-19 pandemic negatively impact
the UK and global economy, NatWest
Group’s may be unable to meet its
financial, capital and operational targets
and expectations. In addition, the
COVID-19 pandemic has, at times,
caused significant market volatility,
which could cause RWA inflation for
NatWest Group. This could impair
NatWest Group’s ability to timely deliver
on certain aspects of its purpose-led
strategy, which may have an adverse
effect on NatWest Group’s business,
results of operations and outlook. See
also, ‘NatWest Group continues to
implement its purpose-led strategy, which
carries significant execution and
operational risks and may not achieve its
stated aims and targeted outcomes’.
It is uncertain as to how the broader
macroeconomic business environment
and societal norms may be impacted by
the COVID-19 pandemic, causing
significant wider societal changes. For
example, one of the most notable effects
of the COVID-19 pandemic has been its
disproportionate impact on the most
vulnerable groups of society and
concerns about systemic racial biases
and social inequalities.
In addition, the COVID-19 pandemic has
accelerated existing economic trends
that may radically change the way
businesses are run and people live their
lives. These trends include digitalisation,
decarbonisation, automation, e-
commerce and agile working, each of
which has resulted in significant market
volatility in asset prices. There is also
increased investor, regulatory and
customer scrutiny regarding how
businesses address these changes and
related climate, environmental, social,
governance and other sustainability
issues, including tackling inequality,
working conditions, workplace health,
safety and wellbeing, diversity and
inclusion, data protection and
management, workforce management,
human rights and supply chain
management. Any failure or delay by
NatWest Group to successfully adapt its
business strategy and to establish and
maintain effective governance,
procedures, systems and controls in
response to these changes, and to
manage emerging climate,
environmental, social, governance and
other sustainability-related risks and
opportunities, may have a material
adverse impact on NatWest Group’s
reputation, business, results of
operations, outlook and the value of
NatWest Group’s securities. See also,
‘Any failure by NatWest Group to
implement effective and compliant
climate change resilient systems, controls
and procedures could adversely affect
NatWest Group’s ability to manage
climate-related risks’ and ‘A failure to
adapt NatWest Group’s business
strategy, governance, procedures,
systems and controls to manage
emerging sustainability-related risks and
opportunities may have a material
adverse effect on NatWest Group, its
reputation, business, results of operations
and outlook’.
The COVID-19 pandemic may also result
in unexpected developments or changes
in financial markets, the fiscal, tax and
regulatory frameworks and consumer
customer and corporate client behaviour,
which could intensify competition in the
financial services industry. This could
negatively impact NatWest Group if it is
not able to adapt or compete effectively.
Financial resilience risk
NatWest Group may not meet the targets
it communicates or be in a position to
continue to make discretionary capital
distributions (including dividends to
shareholders).
As part of NatWest Group’s strategy,
NatWest Group has set a number of
financial, capital and operational targets
for NatWest Group including in respect
of: CET1 ratio targets, MREL targets,
return on tangible equity (‘ROTE’),
funding plans and requirements,
employee engagement, diversity and
inclusion as well as ESG (including
climate and sustainable funding and
financing targets) and customer
satisfaction targets and discretionary
capital distributions (including dividends
to shareholders).
See also, ‘NatWest Group continues to
implement its purpose-led strategy, which
carries significant execution and

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operational risks and may not achieve its
stated aims and targeted outcomes’.
NatWest Group’s ability to meet its
targets and to successfully meet its
strategy is subject to various internal and
external factors and risks. These include
but are not limited to: the impact of the
COVID-19 pandemic, market, regulatory,
macroeconomic and political
uncertainties, operational risks and risks
relating to NatWest Group’s business
model and strategy (including risks
associated with climate, environmental,
social, governance and other
sustainability-related issues) and
litigation, governmental actions,
investigations and regulatory matters.
A number of factors, including the
economic and other effects of the
COVID-19 pandemic, may impact
NatWest Group’s ability to maintain its
CET1 ratio target and make
discretionary capital distributions. See
also, ‘NatWest Group may not meet the
prudential regulatory requirements for
capital and MREL, or manage its capital
effectively, which could trigger the
execution of certain management actions
or recovery options’.
There is a risk that NatWest Group may
not meet its targets and expectations or
be in a position to continue to distribute
capital, or that NatWest Group will be a
viable, competitive or profitable banking
business.
NatWest Group operates in markets that
are highly competitive, with increasing
competitive pressures and technology
disruption.
The markets within which NatWest
Group operates are highly competitive.
NatWest Group expects such competition
to continue and intensify in response to
various changes. These include: evolving
customer behaviour, technological
changes (including digital currencies,
stablecoins and the growth of digital
banking, such as from fintech entrants),
competitor behaviour, new entrants to
the market (including non-traditional
financial services providers such as large
retail or technology conglomerates, who
may have competitive advantages in
scale, technology and customer
engagement), competitive foreign-
exchange offerings, industry trends
resulting in increased disaggregation or
unbundling of financial services or
conversely the re-intermediation of
traditional banking services, and the
impact of regulatory actions and other
factors. In particular, developments in
the financial sector resulting from new
banking, lending and payment solutions
offered by rapidly evolving incumbents,
challengers and new entrants, notably
with respect to payment services and
products, and the introduction of
disruptive technology may impede
NatWest Group’s ability to grow or retain
its share and impact its revenues and
profitability, particularly in its key UK
retail and commercial banking segments.
Moreover, innovations such as
biometrics, artificial intelligence, the
cloud, blockchain, cryptocurrencies and
quantum computing may rapidly
facilitate industry transformation.
These trends have accelerated during
the COVID-19 pandemic and may be
catalysed by various regulatory and
competition policy interventions,
including the UK initiative on Open
Banking (PSD2), Open Finance and other
remedies imposed by the Competition
and Markets Authority (CMA) which are
designed to further promote competition
within retail banking. The competition
enhancing measures under NatWest
Group’s independently administered
Alternative Remedies Package (‘ARP’)
benefits grant recipients and eligible
competitors. The ARP may be more
costly than anticipated and may
adversely impact customer service for
NatWest Group’s own customers, its
competitive position and reputation.
Failure to comply with the terms of the
scheme could result in the imposition of
additional measures or limitations on
NatWest Group’s operations, additional
supervision by NatWest Group’s
regulators, and loss of investor
confidence.
Increasingly many of the products and
services offered by NatWest Group are,
and will become, more technology
intensive. For example, NatWest Group
recently invested in a number of fintech
ventures, including Mettle, FreeAgent,
Tyl, Rapid Cash and Rooster Money. See
also, ‘NatWest Group continues to
implement its purpose-led strategy, which
carries significant execution and
operational risks and may not achieve its
stated aims and targeted outcomes’.
NatWest Group’s ability to develop such
digital solutions (which also need to
comply with applicable and evolving
regulations) has become increasingly
important to retaining and growing
NatWest Group’s customer business in
the UK. There can be no certainty that
NatWest Group’s innovation strategy
(which includes investment in its IT
capability intended to address the
material increase in customer use of
online and mobile technology for banking
as well as selective acquisitions, which
carry associated risks) will be successful
or that it will allow NatWest Group to
continue to grow such services in the
future. Certain of NatWest Group’s
current or future competitors may be
more successful in implementing
innovative technologies for delivering
products or services to their customers.
NatWest Group may also fail to identify
future opportunities or derive benefits
from disruptive technologies in the
context of rapid technological innovation,
changing customer behaviour and
growing regulatory demands, resulting in
increased competition from traditional
banking businesses as well as new
providers of financial services, including
technology companies with strong brand
recognition, that may be able to develop
financial services at a lower cost base.
NatWest Group’s competitors may also
be better able to attract and retain
customers and key employees, may have
better IT systems, and may have access
to lower cost funding and/or be able to
attract deposits on more favourable
terms than NatWest Group. Although
NatWest Group invests in new
technologies and participates in industry
and research led initiatives aimed at
developing new technologies, such
investments may be insufficient or
ineffective, especially given NatWest
Group’s focus on its cost savings targets.
This may limit additional investment in
areas such as financial innovation and
could therefore affect NatWest Group’s
offering of innovative products or
technologies for delivering products or
services to customers and its competitive
position. Furthermore, the development
of innovative products depends on
NatWest Group’s ability to produce
underlying high-quality data, failing
which its ability to offer innovative
products may be compromised.
If NatWest Group is unable to offer
competitive, attractive and innovative
products that are also profitable and
timely, it will lose share, incur losses on
some or all of its activities and lose
opportunities for growth. In this context,
NatWest Group is investing in the
automation of certain solutions and
interactions within its customer-facing
businesses, including through artificial
intelligence. Such initiatives may result in
operational, reputational and conduct
risks if the technology used is defective,
inadequate or is not fully integrated into
NatWest Group’s current solutions. There
can be no certainty that such initiatives
will deliver the expected cost savings
and investment in automated processes
will likely also result in increased short-
term costs for NatWest Group.
In addition, the implementation of its
purpose-led strategy (including in
relation to acquisitions, reorganisations
and/or partnerships), delivery on its
climate ambition, cost-reduction
measures, as well as employee
remuneration constraints, may also have
an impact on its ability to compete
effectively and intensified competition
from incumbents, challengers and new
entrants could affect NatWest Group’s

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ability to maintain satisfactory returns.
Moreover, activist investors have
increasingly become engaged and
interventionist in recent years, which
may pose a threat to NatWest Group’s
strategic initiatives. Furthermore,
continued consolidation or technological
or other developments in certain sectors
of the financial services industry could
result in NatWest Group’s remaining
competitors gaining greater capital and
other resources, including the ability to
offer a broader range of products and
services and geographic diversity, or the
emergence of new competitors.
The impact of the COVID-19 pandemic
on the credit quality of NatWest Group’s
counterparties may negatively impact
NatWest Group.
The effects of the COVID-19 pandemic
have adversely affected the credit quality
of some of NatWest Group’s borrowers
and other counterparties, and
government support schemes may delay
the effects of defaults by such
counterparties. As government support
schemes reduce, defaults are expected
to rise with more customers moving from
IFRS 9 Stage 2 to Stage 3. As a result,
NatWest Group continues to experience
elevated exposure to credit risk and
demands on its funding, and the long-
term effects remain uncertain. If
borrowers or other counterparties face
increasing levels of debt and default or
suffer deterioration in credit, this would
increase impairment charges, write-
downs, regulatory expected loss and
impact credit reserves. See also,
‘NatWest Group has significant exposure
to counterparty and borrower risk’ and
‘NatWest Group’s financial statements
are sensitive to the underlying accounting
policies, judgments, estimates and
assumptions’.
In line with certain mandated COVID-19
pandemic support schemes, NatWest
Group has sought to assist affected
customers with a number of initiatives
including NatWest Group’s participation
in BBLS, CBILS and CLBILS products.
NatWest Group has sought to manage
the risks of fraud and money laundering
against the need for the fast and efficient
release of funds to customers and
businesses. NatWest Group may be
exposed to fraud, conduct and litigation
risks arising from inappropriate approval
(or denial) of BBLS or CBILS or the
enforcing or pursuing repayment of
BBLS and CBILS (or a failure to exercise
forbearance), which may have an
adverse effect on NatWest Group’s
reputation and results of operations. The
implementation of the initiatives and
efforts mentioned above may result in
litigation, regulatory and government
actions and proceedings. These actions
may result in judgments, settlements,
penalties or fines.
Any of the above may have a negative
impact on NatWest Group.
NatWest Group has significant exposure
to counterparty and borrower risk.
NatWest Group has exposure to many
different industries, customers and
counterparties, and risks arising from
actual or perceived changes in credit
quality and the recoverability of monies
due from borrowers and other
counterparties are inherent in a wide
range of NatWest Group’s businesses.
NatWest Group’s lending strategy and
associated processes may fail to identify
or anticipate weaknesses or risks in a
particular sector, market or borrower, or
fail to adequately value physical or
financial collateral. This may result in
increased default rates or a higher loss
given default for loans, which may, in
turn, impact NatWest Group’s
profitability. See also, ‘Risk and capital
management — Credit Risk’.
The credit quality of NatWest Group’s
borrowers and other counterparties may
be affected by a deterioration in
prevailing economic and market
conditions (including those caused by the
COVID-19 pandemic) and by the legal
and regulatory landscape in the UK and
countries where NatWest Group is
exposed to credit risk and any
deterioration in such conditions or
changes to legal or regulatory
landscapes (including the extent of the
UK’s post-Brexit divergence from EU
laws and regulation). These could
worsen borrower and counterparty
credit quality or impact the enforcement
of contractual rights over security,
increasing credit risk.
An increase in drawings upon committed
credit facilities may also increase
NatWest Group’s RWAs. In addition, the
level of household indebtedness in the
UK remains high. The ability of
households to service their debts could
be worsened by a period of high
unemployment (including as a result of
the COVID-19 pandemic), increasing
interest rates and higher inflation,
particularly if prolonged. NatWest Group
may be affected by volatility in property
prices (including as a result of the
general UK political or economic climate
or the COVID-19 pandemic) given that
NatWest Group’s mortgage loan and
wholesale property loan portfolios as at
31 December 2021, amounted to £226.5
billion, representing 61% of NatWest
Group’s total customer loan exposure. If
property prices were to weaken this
could lead to higher impairment charges,
particularly if default rates also increase.
In addition, NatWest Group’s credit risk
may be exacerbated if the collateral that
it holds cannot be realised as a result of
market conditions or regulatory
intervention or if it is liquidated at prices
not sufficient to recover the net amount
after accounting for any IFRS 9
provisions already made. This is most
likely to occur during periods of illiquidity
or depressed asset valuations.
Concerns about, or a default by, a
financial institution could lead to
significant liquidity problems and losses
or defaults by other financial institutions,
since the commercial and financial
soundness of many financial institutions
is closely related and interdependent as
a result of credit, trading, clearing and
other relationships. Any perceived lack
of creditworthiness of a counterparty
may lead to market-wide liquidity
problems and losses for NatWest Group.
This systemic risk may also adversely
affect financial intermediaries, such as
clearing agencies, clearing houses,
banks, securities firms and exchanges
with which NatWest Group interacts on a
daily basis. See also, ‘NatWest Group
may not be able to adequately access
sources of liquidity and funding’.
As a result, adverse changes in borrower
and counterparty credit risk may cause
accelerated impairment charges under
IFRS 9, increased repurchase demands,
higher costs, additional write-downs and
losses for NatWest Group and an inability
to engage in routine funding
transactions.
NatWest Group has applied an internal
analysis of multiple economic scenarios
(MES) together with the determination of
specific overlay adjustments to inform its
IFRS 9 ECL (Expected Credit Loss). The
recognition and measurement of ECL is
complex and involves the use of
significant judgment and estimation. This
includes the formulation and
incorporation of multiple forward-looking
economic scenarios into ECL to meet the
measurement objective of IFRS 9. The
ECL provision is sensitive to the model
inputs and economic assumptions
underlying the estimate. Going forward,
NatWest Group anticipates observable
credit deterioration of a proportion of
assets resulting in a systematic uplift in
defaults, which is mitigated by those
economic assumption scenarios being
reflected in the Stage 2 ECL across
portfolios, along with a combination of
post model overlays in both wholesale
and retail portfolios reflecting the
uncertainty of credit outcomes. See also,
‘Risk and capital management’. A credit
deterioration would also lead to RWA
increases. Furthermore, the assumptions
and judgments used in the MES and ECL
assessment at 31 December 2021 may
not prove to be adequate resulting in
incremental ECL provisions for NatWest
Group. As government support schemes

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reduce, defaults are expected to rise
with more ECLs cases moving from
Stage 2 to Stage 3.
NatWest Group is exposed to the
financial industry, including sovereign
debt securities, banks, financial
intermediation providers (including
providing facilities to financial sponsors
and funds, backed by assets or investor
commitments) and securitised products
(typically senior lending to special
purpose vehicles backed by pools of
financial assets). Due to NatWest Group’s
exposure to the financial industry, it also
has exposure to shadow banking entities
(i.e., entities which carry out banking
activities outside a regulated
framework). NatWest Group is required
to identify and monitor its exposure to
shadow banking entities, implement and
maintain an internal framework for the
identification, management, control and
mitigation of the risks associated with
exposure to shadow banking entities,
and ensure effective reporting and
governance in respect of such exposure.
If NatWest Group is unable to properly
identify and monitor its shadow banking
exposure, maintain an adequate
framework, or ensure effective reporting
and governance in respect of shadow
banking exposure, this may adversely
affect the business, results of operations
and outlook of NatWest Group.
If NatWest Group experiences losses and
a reduction in future profitability, this is
likely to affect the recoverable value of
fixed assets, including goodwill and
deferred taxes, which may lead to
further write-downs.
NatWest Group may not meet the
prudential regulatory requirements for
capital and MREL, or manage its capital
effectively, which could trigger the
execution of certain management
actions or recovery options.
NatWest Group is required by regulators
in the UK, the EU and other jurisdictions
in which it undertakes regulated
activities to maintain adequate financial
resources. Adequate capital provides
NatWest Group with financial flexibility in
the face of turbulence and uncertainty in
the global economy and specifically in its
core UK operations. It also permits
NatWest Group plc to make discretionary
capital distributions (including dividends
to shareholders).
As at 31 December 2021, NatWest Group
plc’s CET1 ratio was 18.2% and NatWest
Group plc currently targets a CET1 ratio
of 13-14% by the end of 2023. NatWest
Group plc’s target capital ratio is based
on a combination of its expected
regulatory requirements and internal
modelling, including stress scenarios and
management’s and/or the Prudential
Regulatory Authority’s (‘PRA’) views on
appropriate buffers above minimum
operating levels.
NatWest Group plc’s current capital
strategy is based on the expected
accumulation of additional capital
through the accrual of profits over time,
planned capital actions (including
issuances, redemptions, and
discretionary capital distributions), RWA
growth in the form of regulatory uplifts
and lending growth and other capital
management initiatives which focus on
improving capital efficiency and ensuring
NatWest Group meets its medium to long
term targets.
A number of factors may impact
NatWest Group plc’s ability to maintain
its current CET1 ratio target and achieve
its capital strategy. These include,
amongst other things:
 a depletion of its capital resources
through increased costs or liabilities
or reduced profits;
 an increase in the quantum of RWAs
in excess of that expected, including
due to regulatory changes, or a
failure in internal controls or
procedures to accurately measure
and report RWAs;
 changes in prudential regulatory
requirements including NatWest
Group plc’s Total Capital
Requirement set by the PRA,
including Pillar 2 requirements and
regulatory buffers as well as any
applicable scalars;
 reduced dividends from NatWest
Group’s subsidiaries because of
changes in their financial
performance and/or the extent to
which local capital requirements
exceed NatWest Group plc’s target
ratio; and limitations on the use of
double leverage, i.e. NatWest Group
plc’s use of debt to invest in the
equity of its subsidiaries, as a result
of the Bank of England’s and/or
NatWest Group’s evolving views on
distribution of capital within groups.
A shortage of capital could in turn affect
NatWest Group plc’s capital ratio, and/or
its ability to make capital distributions.
A minimum level of capital adequacy is
required to be met by NatWest Group plc
for it to be entitled to make certain
discretionary payments, and institutions
which fail to meet the combined buffer
requirement are subject to restricted
discretionary payments. The resulting
restrictions are scaled according to the
extent of the breach of the combined
buffer requirement and calculated as a
percentage of the profits of the
institution since the last distribution of
profits or discretionary payment which
gives rise to a maximum distributable
amount (MDA) (if any) that the financial
institution can distribute through
discretionary payments. Any breach of
the combined buffer requirement, may
necessitate for NatWest Group plc
reducing or ceasing discretionary
payments (including payments of
dividends to shareholders) to the extent
of the breach.
NatWest Group is required to maintain a
set quantum of MREL set as the higher
of its RWAs or leverage requirement. The
Bank of England has identified single
point-of-entry as the preferred resolution
strategy for NatWest Group. As a result,
NatWest Group plc is the only entity that
can externally issue securities that count
towards its MREL requirements, the
proceeds of which can then be
downstreamed to meet the internal
MREL issuance requirements of its
operating entities and intermediate
holding companies.
If NatWest Group plc is unable to raise
the requisite amount of regulatory
capital or MREL, downstream the
proceeds of MREL to subsidiaries as
required, or to otherwise meet its
regulatory capital, MREL and leverage
requirements, it may be exposed to
increased regulatory supervision or
sanctions, loss of investor confidence,
constrained or more expensive funding
and be unable to make dividend
payments on its ordinary shares or
maintain discretionary payments on
capital instruments.
If, under a stress scenario, the level of
capital or MREL falls outside of risk
appetite, there are a range of recovery
management actions (focused on risk
reduction and mitigation) that NatWest
Group could take to manage its capital
levels, but any such actions may not be
sufficient to restore adequate capital
levels. Under the EU Bank Recovery and
Resolution Directives I and II (‘BRRD’), as
implemented in the UK, NatWest Group
must maintain a recovery plan
acceptable to its regulator, such that a
breach of NatWest Group’s applicable
capital or leverage requirements may
trigger the application of NatWest
Group’s recovery plan to remediate a
deficient capital position. NatWest
Group’s regulator may request that
NatWest Group carry out certain capital
management actions or, if NatWest
Group plc’s CET1 ratio falls below 7%,
certain regulatory capital instruments
issued by NatWest Group will be written-
down or converted into equity and there
may be an issue of additional equity by
NatWest Group plc, which could result in
the dilution of the holdings of NatWest
Group plc’s existing shareholders. The
success of such issuances will also be
dependent on favourable market
conditions and NatWest Group may not
be able to raise the amount of capital
required on acceptable terms or at all.

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Separately, NatWest Group may address
a shortage of capital by taking action to
reduce leverage exposure and/or RWAs
via asset or business disposals. These
actions may, in turn, affect, among other
things, NatWest Group’s product
offering, credit ratings, ability to operate
its businesses, pursue its current
strategies and pursue strategic
opportunities, any of which may affect
the underlying profitability of NatWest
Group and future growth potential. See
also, ‘NatWest Group may become
subject to the application of UK statutory
stabilisation or resolution powers which
may result in, among other actions, the
cancellation, transfer or dilution of
ordinary shares, or the write-down or
conversion of certain other of NatWest
Group’s securities’.
NatWest Group is subject to Bank of
England and PRA oversight in respect of
resolution, and NatWest Group could be
adversely affected should the Bank of
England deem NatWest Group’s
preparations to be inadequate.
NatWest Group is subject to regulatory
oversight by the Bank of England and
the PRA, and is required (under the PRA
rulebook) to carry out an assessment of
its preparations for resolution, submit a
report of the assessment to the PRA, and
disclose a summary of this report. The
initial report was submitted to the PRA
on 30 September 2021 and the Bank of
England’s assessment of NatWest
Group’s preparations is scheduled to be
released on 10 June 2022 although the
Bank of England may provide feedback
before then.
NatWest Group has dedicated significant
resources towards the preparation of
NatWest Group for a potential resolution
scenario. However, if the Bank of
England assessment identifies a
significant gap in NatWest Group’s ability
to achieve the resolvability outcomes, or
reveals that NatWest Group is not
adequately prepared to be resolved, or
did not have adequate plans in place to
meet resolvability requirements which
came into effect on 1 January 2022,
NatWest Group may be required to take
action to enhance its preparations to be
resolvable, resulting in additional costs
and the dedication of additional
resources. Such a scenario may have an
impact on NatWest Group as, depending
on the Bank of England’s assessment,
potential action may include, but is not
limited to, restrictions on NatWest
Group’s maximum individual and
aggregate exposures, a requirement to
dispose of specified assets, a
requirement to change legal or
operational structure, a requirement to
cease carrying out certain activities
and/or maintaining a specified amount of
MREL, consequently impacting NatWest
Group’s strategic plans and having an
adverse effect on the financial position
and/or reputation of NatWest Group or a
loss of investor confidence.
NatWest Group may not be able to
adequately access sources of liquidity
and funding.
NatWest Group is required to access
sources of liquidity and funding through
retail and wholesale deposits, as well as
through the debt capital markets. As at
31 December 2021, NatWest Group plc
held £506.1 billion in deposits. The level
of deposits may fluctuate due to factors
outside NatWest Group’s control, such as
a loss of investor confidence (including in
individual NatWest Group entities),
sustained low or negative interest rates,
government support, increasing
competitive pressures for retail and
corporate customer deposits or the
reduction or cessation of deposits by
wholesale depositors, which could result
in a significant outflow of deposits within
a short period of time. An inability to
grow or any material decrease in
NatWest Group’s deposits could,
particularly if accompanied by one of the
other factors described above, materially
affect NatWest Group’s ability to satisfy
its liquidity or funding needs. In turn, this
could require NatWest Group to adapt its
funding plans.
The effects of the COVID-19 pandemic,
current economic uncertainties and any
significant market volatility could affect
NatWest Group’s ability to access
sources of liquidity and funding, which
may result in higher funding costs and
failure to comply with regulatory capital,
funding and leverage requirements. As a
result, NatWest Group and its
subsidiaries could be required to adapt
their funding plans. This could
exacerbate funding and liquidity risk,
which could have a negative effect on
NatWest Group.
As at 31 December 2021, NatWest Group
plc’s liquidity coverage ratio was 172%. If
its liquidity position were to come under
stress, and if NatWest Group plc were
unable to raise funds through deposits or
in the debt capital markets on
acceptable terms or at all, its liquidity
position could be adversely affected and
it might be unable to meet deposit
withdrawals on demand or at their
contractual maturity, to repay
borrowings as they mature, to meet its
obligations under committed financing
facilities, to comply with regulatory
funding requirements, to undertake
certain capital and/or debt management
activities, or to fund new loans,
investments and businesses. NatWest
Group may need to liquidate
unencumbered assets to meet its
liabilities, including disposals of assets
not previously identified for disposal to
reduce its funding commitments or
trigger the execution of certain
management actions or recovery
options. In a time of reduced liquidity,
NatWest Group may be unable to sell
some of its assets, or may need to sell
assets at depressed prices, which in
either case could negatively affect
NatWest Group’s results.
Any reduction in the credit rating and/or
outlooks assigned to NatWest Group plc,
any of its subsidiaries or any of their
respective debt securities could
adversely affect the availability of
funding for NatWest Group, reduce
NatWest Group’s liquidity position and
increase the cost of funding.
Rating agencies regularly review
NatWest Group plc and other NatWest
Group entity credit ratings and outlooks,
which could be negatively affected by a
number of factors that can change over
time, including: the credit rating agency’s
assessment of NatWest Group’s strategy
and management’s capability; its
financial condition including in respect of
profitability, asset quality, capital,
funding and liquidity; the level of political
support for the industries in which
NatWest Group operates; the
implementation of structural reform; the
legal and regulatory frameworks
applicable to NatWest Group’s legal
structure; business activities and the
rights of its creditors; changes in rating
methodologies; changes in the relative
size of the loss-absorbing buffers
protecting bondholders and depositors;
the competitive environment, political
and economic conditions in NatWest
Group’s key markets (including the
impact of the COVID-19 pandemic and
any further Scottish independence
referendum); any reduction of the UK’s
sovereign credit rating and market
uncertainty.
In addition, credit ratings agencies are
increasingly taking into account
sustainability-related factors, including
climate, environmental, social and
governance related risk, as part of the
credit ratings analysis, as are investors in
their investment decisions.
Any reductions in the credit ratings of
NatWest Group plc or of certain other
NatWest Group entities, including, in
particular, downgrades below investment
grade, or a deterioration in the capital
markets’ perception of NatWest Group’s
financial resilience could significantly
affect NatWest Group’s access to money
markets, reduce the size of its deposit
base and trigger additional collateral or
other requirements in derivatives
contracts and other secured funding
arrangements or the need to amend
such arrangements, which could
adversely affect NatWest Group’s (and,
in particular, NatWest Group plc’s) cost

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of funding and its access to capital
markets and could limit the range of
counterparties willing to enter into
transactions with NatWest Group (and, in
particular, with NatWest Group plc). This
could in turn adversely impact NatWest
Group’s competitive position and
threaten its prospects in the short to
medium-term.
NatWest Group may be adversely
affected if it fails to meet the
requirements of regulatory stress tests.
NatWest Group is subject to annual
stress tests by its regulator in the UK and
is also subject to stress tests by
European regulators with respect to
NWM N.V. and Ulster Bank Ireland DAC.
Stress tests are designed to assess the
resilience of banks to potential adverse
economic or financial developments and
ensure that they have robust, forward-
looking capital planning processes that
account for the risks associated with
their business profile. If the stress tests
reveal that a bank’s existing regulatory
capital buffers are not sufficient to
absorb the impact of the stress, then it is
possible that the bank will need to take
action to strengthen its capital position.
Failure by NatWest Group to meet the
quantitative and qualitative requirements
of the stress tests as set forth by its UK
regulator or those elsewhere may result
in: NatWest Group’s regulators requiring
NatWest Group to generate additional
capital, reputational damage, increased
supervision and/or regulatory sanctions,
restrictions on capital distributions and
loss of investor confidence.
NatWest Group’s results could be
adversely affected if an event triggers
the recognition of a goodwill impairment.
NatWest Group capitalises goodwill,
which is calculated as the excess of the
cost of an acquisition over the net fair
value of the identifiable assets, liabilities
and contingent liabilities acquired.
Acquired goodwill is recognised at cost
less any accumulated impairment losses.
As required by IFRS, NatWest Group
tests goodwill for impairment at least
annually, or more frequently when
events or circumstances indicate that it
might be impaired.
An impairment test compares the
recoverable amount (the higher of the
value in use and fair value less cost to
sell) of an individual cash generating unit
with its carrying value. At 31 December
2021, NatWest Group plc carried
goodwill of £5.5 billion on its balance
sheet. The value in use and fair value of
NatWest Group’s cash-generating units
are affected by market conditions, the
economies in which NatWest Group
operates and may also be affected by
the COVID-19 pandemic.
The goodwill held by NatWest Group plc
relies on management’s assumptions on
future profitability. Goodwill is
particularly sensitive to changes in
assumed future profitability. If actual
performance were to fall below
management’s forecasts, then there is a
risk that an impairment of goodwill
would become necessary.
Where NatWest Group is required to
recognise a goodwill impairment, it is
recorded in NatWest Group’s income
statement, but it has no effect on
NatWest Group’s regulatory capital
position. Changes in such assumptions
may result in the carrying balance being
impaired, which could have a negative
impact on NatWest Group.
NatWest Group could incur losses or be
required to maintain higher levels of
capital as a result of limitations or failure
of various models.
Given the complexity of NatWest Group’s
business, strategy and capital
requirements, NatWest Group relies on
analytical and other models for a wide
range of purposes, including to manage
its business, assess the value of its assets
and its risk exposure, as well as to
anticipate capital and funding
requirements (including to facilitate
NatWest Group’s mandated stress
testing). In addition, NatWest Group
utilises models for valuations, credit
approvals, calculation of loan impairment
charges on an IFRS 9 basis, financial
reporting and for financial crime
(criminal activities in the form of money
laundering, terrorist financing, bribery
and corruption, tax evasion and
sanctions as well as fraud risk
management (collectively, ‘financial
crime’)). NatWest Group’s models, and
the parameters and assumptions on
which they are based, are periodically
reviewed and updated to maximise their
accuracy.
As models analyse scenarios based on
assumed inputs and a conceptual
approach, model outputs therefore
remain uncertain. Failure of models
(including due to errors in model design)
or new data inputs (including non-
representative data sets), for example, to
accurately reflect changes in the micro
and macroeconomic environment in
which NatWest Group operates (for
example to account for the impact of the
COVID-19 pandemic), to capture risks
and exposures at the subsidiary level
and to update for changes to NatWest
Group’s current business model or
operations, or for findings of deficiencies
by NatWest Group’s regulators (including
as part of NatWest Group’s mandated
stress testing), may render some
business lines uneconomic, result in
increased capital requirements, may
require management action or may
subject NatWest Group to regulatory
sanction. NatWest Group may also face
adverse consequences as a result of
actions based on models that are poorly
developed, implemented or used, models
that are based on inaccurate or
compromised data or as a result of the
modelled outcome being misunderstood,
or by such information being used for
purposes for which it was not designed.
NatWest Group’s financial statements
are sensitive to the underlying
accounting policies, judgments, estimates
and assumptions.
The preparation of financial statements
requires management to make
judgments, estimates and assumptions
that affect the reported amounts of
assets, liabilities, income, expenses,
exposures and RWAs. While estimates,
judgments and assumptions take into
account historical experience and other
factors, (including market practice and
expectations of future events that are
believed to be reasonable under the
circumstances), actual results may differ
due to the inherent uncertainty in
making estimates, judgments and
assumptions (particularly those involving
the use of complex models).
The accounting policies deemed critical
to NatWest Group’s results and financial
position, based upon materiality and
significant judgments and estimates,
which include loan impairment
provisions, are set out in ‘Critical
accounting policies and key sources of
estimation uncertainty’. New accounting
standards and interpretations that have
been issued by the International
Accounting Standards Board but which
have not yet been adopted by NatWest
Group are discussed in ‘Future
accounting developments’.
Changes in accounting standards may
materially impact NatWest Group’s
financial results.
Changes in accounting standards or
guidance by accounting bodies or in the
timing of their implementation, whether
immediate or foreseeable, could result in
NatWest Group having to recognise
additional liabilities on its balance sheet,
or in further write-downs or impairments
to its assets and could also significantly
impact the financial results, condition
and prospects of NatWest Group.
The valuation of financial instruments,
including derivatives, measured at fair
value can be subjective, in particular
where models are used which include
unobservable inputs. Generally, to
establish the fair value of these
instruments, NatWest Group relies on
quoted market prices or, where the
market for a financial instrument is not
sufficiently credible, internal valuation

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models that utilise observable market
data. In certain circumstances, the data
for individual financial instruments or
classes of financial instruments utilised
by such valuation models may not be
available or may become unavailable
due to prevailing market conditions. In
these circumstances, NatWest Group’s
internal valuation models require
NatWest Group to make assumptions,
judgments and estimates to establish fair
value, which are complex and often
relate to matters that are inherently
uncertain.
The value or effectiveness of any credit
protection that NatWest Group has
purchased depends on the value of the
underlying assets and the financial
condition of the insurers and
counterparties.
NatWest Group has some remaining
credit exposure arising from over-the-
counter derivative contracts, mainly
credit default swaps (CDSs), and other
credit derivatives, each of which are
carried at fair value. The fair value of
these CDSs, as well as NatWest Group’s
exposure to the risk of default by the
underlying counterparties, depends on
the valuation and the perceived credit
risk of the instrument against which
protection has been bought. Many
market counterparties have been
adversely affected by their exposure to
residential mortgage-linked and
corporate credit products, whether
synthetic or otherwise, and their actual
and perceived creditworthiness may
deteriorate rapidly. If the financial
condition of these counterparties or their
actual or perceived creditworthiness
deteriorates, NatWest Group may record
further credit valuation adjustments on
the credit protection bought from these
counterparties under the CDSs. NatWest
Group also recognises any fluctuations in
the fair value of other credit derivatives.
Any such adjustments or fair value
changes may have a negative impact on
NatWest Group’s results.
NatWest Group may become subject to
the application of UK statutory
stabilisation or resolution powers which
may result in, among other actions, the
cancellation, transfer or dilution of
ordinary shares, or the write-down or
conversion of certain other of NatWest
Group’s securities.
HM Treasury, the Bank of England and
the PRA and FCA (together, the
‘Authorities’) are granted substantial
powers to resolve and stabilise UK-
incorporated financial institutions. Five
stabilisation options exist: (i) transfer of
all of the business of a relevant entity or
the shares of the relevant entity to a
private sector purchaser; (ii) transfer of
all or part of the business of the relevant
entity to a ‘bridge bank’ wholly-owned
by the Bank of England; (iii) transfer of
part of the assets, rights or liabilities of
the relevant entity to one or more asset
management vehicles for management
of the transferor’s assets, rights or
liabilities; (iv) the write-down, conversion,
transfer, modification, or suspension of
the relevant entity’s equity, capital
instruments and liabilities; and (v)
temporary public ownership of the
relevant entity. These tools may be
applied to NatWest Group plc as the
parent company or an affiliate where
certain conditions are met (such as,
whether the firm is failing or likely to fail,
or whether it is reasonably likely that
action will be taken (outside of
resolution) that will result in the firm no
longer failing or being likely to fail).
Moreover, there are modified insolvency
and administration procedures for
relevant entities, and the Authorities
have the power to modify or override
certain contractual arrangements in
certain circumstances and amend the
law for the purpose of enabling their
powers to be used effectively and may
promulgate provisions with retrospective
applicability.
Under the UK Banking Act, the
Authorities are generally required to
have regard to specified objectives in
exercising the powers provided for by
the Banking Act. One of the objectives
(which is required to be balanced as
appropriate with the other specified
objectives) refers to the protection and
enhancement of the stability of the
financial system of the UK. Moreover, the
‘no creditor worse off’ safeguard
contained in the Banking Act may not
apply in relation to an application of the
separate write-down and conversion
power relating to capital instruments
under the Banking Act, in circumstances
where a stabilisation power is not also
used. Holders of debt instruments which
are subject to the power may, however,
have ordinary shares transferred to or
issued to them by way of compensation.
Uncertainty exists as to how the
Authorities may exercise their powers
including the determination of actions
undertaken in relation to the ordinary
shares and other securities of NatWest
Group, which may depend on factors
outside of NatWest Group’s control.
Moreover, the Banking Act provisions
remain untested in practice.
If NatWest Group is at or is approaching
the point of non-viability such that
regulatory intervention is required, any
exercise of the resolution regime powers
by the Authorities may adversely affect
holders of NatWest Group plc’s ordinary
shares or other NatWest Group
securities. This may result in various
actions being undertaken in relation to
NatWest Group and any securities of
NatWest Group, including cancellation,
transfer, dilution, write-down or
conversion (as applicable). There may
also be a corresponding adverse effect
on the market price of such securities.
Climate and sustainability-related risks
NatWest Group and its customers face
significant climate-related risks, including
in transitioning to a net zero economy,
which may adversely impact NatWest
Group.
Climate-related risks and uncertainties
are continuing to receive increasing
regulatory, judicial, political and societal
scrutiny.
Financial and non-financial risks from
climate change arise through physical
and transition risks. Furthermore,
NatWest Group may also face a variety
of climate-related legal risks, both
physical and transition, from potential
litigation and conduct liability. See also,
‘NatWest Group may be subject to
potential climate, environmental and
other sustainability-related litigation,
enforcement proceedings, investigations
and conduct risk’.
There are significant uncertainties as to
the extent and timing of the
manifestation of the physical risks of
climate change, such as more severe
and frequent extreme weather events
(flooding, subsidence, heat waves and
long-lasting wildfires), rising sea levels,
biodiversity loss and resource scarcity.
Damage to NatWest Group customers’
properties and operations could disrupt
business, impair asset values and
negatively impact the creditworthiness of
customers leading to increased default
rates, delinquencies, write-offs and
impairment charges in NatWest Group’s
portfolios. In addition, NatWest Group
premises and operations, or those of its
critical outsourced functions may
experience damage or disruption leading
to increased costs and negatively
affecting NatWest Group’s business
continuity and reputation.
In October 2021, the UK Government
published its Net Zero Strategy which
sets out how the UK will deliver on its
commitment to reach net zero emissions
by 2050. The timing, content and
implementation of the specific policies
and proposals remain uncertain.
Widespread transition to a net zero
economy across all sectors of the
economy and markets in which NatWest
Group operates will be required to meet
the goals of the 2015 Paris Agreement,
the UK’s Net Zero Strategy and the
Glasgow Climate Pact of 2021. The
impact of the extensive commercial,
technological, policy and regulatory
changes required to achieve transition
remains uncertain, but it is expected to
be significant and may be disruptive

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across the global economy and markets,
especially if these changes do not occur
in an orderly or timely manner or are not
effective in reducing emissions
sufficiently. Some sectors such as
property, energy (including oil and gas),
mining, infrastructure, transport
(including automotive and aviation) and
agriculture are expected to be
particularly impacted. The timing and
pace of the transition to a net zero
economy is also uncertain and may be
near term, gradual and orderly or
delayed, rapid and disorderly, or the
combination of these.
Climate-related risks may be drivers of
several different risk categories
simultaneously and may exacerbate
existing risks, including credit risk,
operational risk (business continuity),
market risk (both traded and non-
traded), liquidity and funding risk (for
example, net cash outflows or depletion
of liquidity buffers).
If NatWest Group fails to adapt its
business and operating model in a timely
manner to the climate-related risks and
opportunities and changing regulatory
and market expectations, or to
appropriately identify, measure, manage
and mitigate climate change related
physical, transition and legal risks and
opportunities that NatWest Group, its
customers and value chain face,
NatWest Group’s reputation, business,
operations or value chain and results of
operations and outlook may be impacted
adversely.
NatWest Group’s purpose-led strategy
includes climate change as one of its
three areas of focus. This is likely to
require material changes to the business
and operating model of NatWest Group
which entails significant execution risk.
In February 2020, NatWest Group
announced its ambition to become a
leading bank on climate in the UK,
helping to address the climate challenge
by setting itself the challenge to at least
halve the climate impact of its financing
activity by 2030 and intending to do
what is necessary to achieve alignment
with the 2015 Paris Agreement. In
addition, in April 2021, NatWest Group
by joining the Net Zero Banking Alliance
'Business Ambition to 1.5C', stated its
ambition to reach net zero by
2050. Furthermore, as part of its efforts
to support the transition to a net zero
economy, NatWest Group has also
announced its ambitions to phase out of
coal for UK and non UK customers who
have UK coal production, coal fired
generation and coal related
infrastructure by 1 October 2024, with a
full global phase out by 1 January 2030;
to plan to stop financing new customer
relationships with corporate customers
who explore for, extract or produce coal
or operate unabated coal powered
plants; and that it would not provide
services to existing customers who are
increasing coal mining activity by
exploring for new coal, developing new
coal mines or increasing thermal coal
production.
To achieve its 2030 and 2050 ambitions,
NatWest Group has also announced
other climate ambitions, targets and
commitments, and going-forward it may
also announce other climate ambitions,
targets and commitments, including
science-based targets to be validated by
the Science Based Target Initiative.
Making the changes necessary to
achieving these ambitions may materially
affect NatWest Group’s business and
operations and will require significant
reductions to its financed emissions and
to its exposure to customers that do not
align with a transition to a net zero
economy or do not have a credible
transition plan. Increases in lending and
financing activities may wholly or
partially offset some or all of these
reductions, which may increase the
extent of changes and reductions
necessary. It is anticipated that achieving
these reductions, together with the
active management of climate-related
risks and other regulatory, policy and
market changes, are likely to necessitate
material and accelerated changes to
NatWest Group’s business, operating
model and existing exposures (potentially
on accelerated timescales and outside of
risk appetite) which may have a material
adverse effect on NatWest Group’s
ability to achieve its financial targets and
generate sustainable returns.
NatWest Group’s ability to achieve
theses ambitions, targets and
commitments will depend to a large
extent on many factors and uncertainties
beyond NatWest Group’s control. These
include the macroeconomic environment,
the extent and pace of climate change,
including the timing and manifestation of
physical and transition risks, the
effectiveness of actions of governments,
legislators, regulators, businesses,
investors, customers and other
stakeholders to adapt and/or mitigate
the impact of climate-related risks,
changes in customer behaviour and
demand, the challenges related with the
implementation and integration of
adoption policy tools, changes in the
available technology for mitigation and
adaptation, the availability of accurate,
verifiable, reliable, consistent and
comparable data. See also, ‘NatWest
Group continues to implement its
purpose-led strategy, which carries
significant execution and operational
risks and may not achieve its stated aims
and targeted outcomes’ and ‘There are
significant challenges in relation to
climate-related data due to quality and
other limitations, lack of standardisation,
consistency and incompleteness which
amongst other factors contribute to the
significant uncertainties inherent in
accurately modelling the impact of
climate-related risks’.
These internal and external factors and
uncertainties will make it challenging for
NatWest Group to meet its climate
ambitions, targets and commitments and
there is a significant risk that all or some
of them will not be achieved.
Any delay or failure in setting, making
progress against or meeting NatWest
Group’s climate-related ambitions,
targets and commitments may have a
material adverse impact on NatWest
Group, its reputation, business, results of
operations, outlook, market and
competitive position and may increase
the climate-related risks NatWest Group
faces.
Any failure by NatWest Group to
implement effective and compliant
climate change resilient systems,
controls and procedures could adversely
affect NatWest Group’s ability to manage
climate-related risks.
The prudential regulation of climate-
related risks is an important driver in
how NatWest Group develops its risk
appetite for financing activities or
engaging with counterparties that do not
align with a transition to a net zero
economy or do not have a credible
transition plan.
Legislative and regulatory authorities are
publishing expectations as to how banks
should prudently manage and
transparently disclose climate-related
and environmental risks under prudential
rules.
In April 2019, the PRA published a
supervisory statement (the ‘SS 3/19’)
with particular focus on the management
of financial risks from climate change
with respect to governance, risk
management, scenario analysis and
disclosures.
Following the submission of initial plans
by UK banks in October 2019, in July
2020 the PRA issued a ‘Dear CEO’ letter
requiring firms to embed fully their
approaches to managing climate-related
financial risks by the end of 2021. In
response, on 8 October 2020, NatWest
Group provided the PRA with an update
to its original plan noting that the
COVID-19 pandemic had disrupted some
elements of NatWest Group’s original
plan and, as a result, the updated plan
would require additional operating cycles
reaching into 2022 and beyond to prove
embedding. Subsequently the PRA issued
its ‘Climate Change Adaptation Report’
in October 2021 advising firms of the

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need to continue to refine and innovate
ways to further integrate the financial
risks from climate change within risk
management practices and it restated
that by the end of 2021, firms should be
able to demonstrate that the
expectations set out in SS3/19 have been
implemented and embedded throughout
the firms’ organisation as fully as
possible. In January 2022, NatWest
Group provided the PRA with an update
on how it has addressed the
commitments made in its October 2020
plan, noting the delivery of a 1st
generation, largely qualitative in nature,
approach to supervisory requirements.
In June 2021, the Bank of England
launched its 2021 Biennial Exploratory
Scenario (‘CBES’) to stress test the
resilience of the current business models
of the largest banks, insurers and the
financial system to the physical and
transition risks from climate change
under three climate scenarios. NatWest
Group delivered its CBES submission to
the PRA in October 2021. The Bank of
England has since announced that the
CBES is likely to include a second round
over February and March 2022, which is
likely to be largely qualitative in nature.
The Bank of England guidance for the
CBES confirmed that it is exploratory in
nature and not intended to be used to
set capital requirements. In the
aforementioned ‘Climate Change
Adaptation Report 2021’, the Bank of
England confirmed that over the coming
year it will undertake further analysis to
explore enhancements to the regulatory
capital frameworks as they relate to
climate related financial risk. To support
this work, the Bank of England will put
out a ‘Call for Papers’ and host a
Research Conference on the interaction
between climate change and capital in
Q4 2022. Informed by these steps and
internal analysis, the Bank of England is
expected to publish a follow-up report on
the use of capital including on the role of
any future scenario exercises by the end
of 2022. It is therefore likely that in the
coming years financial institutions,
including NatWest Group, may be
required to hold additional capital to
enhance their resilience against systemic
and/or institution specific vulnerabilities
to climate-related financial risks, which
could, in turn, negatively impact NatWest
Group.
Any failure of NatWest Group to fully and
timely embed climate-related risks into
its risk management practices and
framework to appropriately identify,
measure, manage and mitigate the
various climate-related physical and
transition risks and apply the appropriate
product governance in line with
applicable legal and regulatory
requirements and expectations, may
have a material and adverse impact on
NatWest Group’s regulatory compliance,
prudential capital requirements, liquidity
position, reputation, business, results of
operations and outlook.
There are significant challenges in
relation to climate-related data due to
quality and other limitations, lack of
standardisation, consistency and
incompleteness which amongst other
factors contribute to the significant
uncertainties inherent in accurately
modelling the impact of climate-related
risks.
Meaningful reporting of climate-related
risks and opportunities and their
potential impacts and related metrics
depend on access to accurate, reliable,
consistent and comparable climate-
related data from counterparties or
customers. These may not be generally
available or, if available, may not be
accurate, verifiable, reliable, consistent,
or comparable. Any failure of NatWest
Group to incorporate climate-related
factors into its counterparty and
customer data sourcing and
accompanying analytics, or to develop
accurate, reliable, consistent and
comparable counterparty and customer
data, may have a material adverse
impact on NatWest Group’s ability to
prepare meaningful reporting of climate-
related risks and opportunities, its
regulatory compliance, reputation,
business and its competitive position.
In the absence of other sources,
reporting of financed emissions by
financial institutions, including NatWest
Group, is necessarily based therefore on
aggregated information developed by
third parties that may be prepared in an
inconsistent way using different
methodologies, interpretations, or
assumptions. Accordingly, our climate-
related disclosures use a greater number
and level of assumptions and estimates
than many of our financial disclosures.
These assumptions and estimates are
highly likely to change over time, and,
when coupled with the longer time
frames used in these climate related
disclosures, make any assessment of
materiality inherently uncertain. In
particular, in the absence of actual
emissions monitoring and measurement,
emissions estimates are based on
industry and other assumptions that may
not be accurate for a given counterparty
or customer. There may also be data
gaps, particularly for private companies,
that are filled using proxy data, such as
sectoral averages, again developed in
different ways. As a result, our climate
related disclosures may be amended,
updated or restated in the future as the
quality and completeness of our data
and methodologies continue to improve.
These data quality challenges, gaps and
limitations could have a material impact
on NatWest Group’s ability to make
effective business decisions about
climate risks and opportunities, including
risk management decisions, comply with
disclosure requirements and our ability
to monitor and report our progress in
meeting our ambitions, targets and
commitments.
Significant risks, uncertainties and
variables are inherent in the assessment,
measurement and mitigation of climate-
related risks. These include data quality
gaps and limitations mentioned above,
the pace at which climate science,
greenhouse gas accounting standards
and various emissions reduction solutions
develop. In addition, there is a significant
uncertainty about how climate change
and the transition to a net zero economy
will unfold over the coming decades and
affect how and when climate-related
risks will manifest. These timeframes are
considerably longer than NatWest
Group’s historical strategic, financial,
resilience and investment planning
horizons.
As a result, it is very difficult to predict
and model the impact of climate-related
risks into precise financial and economic
outcomes and impacts. Climate-related
risks present significant methodological
challenges due to their forward-looking
nature, the lack and/or quality of
historical testing capabilities, lack of
standardisation and incompleteness of
emissions and other climate and sub-
sector related data and the immature
nature of risk measurement and
modelling methodologies. The evaluation
of climate-related risk exposure and the
development of associated potential risk
mitigation techniques largely depend on
the choice of climate scenario modelling
methodology and the assumptions made
which involves a number of risks and
uncertainties, for example
 climate scenarios are not predictions
of what is likely to happen or what
NatWest Group would like to happen,
they rather explore the possible
implications of different judgments
and assumptions by considering a
series of scenarios;
 climate scenarios do not provide a
comprehensive description of all
possible future outcomes;
 it requires a special skill set that
banks traditionally do not have and
therefore NatWest Group needs to
rely on third party advice, modelling,
and data which is also subject to
many limitations and uncertainties;
 modelling approaches and data on
climate-related risks on financial
assets is immature in nature and it is
expected that techniques and
understanding will evolve rapidly in
the coming years;
Additional information

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 it is challenging to benchmark or
back test the climate scenarios given
their forward-looking nature and the
multiple possible outcomes;
 there is a significant uncertainty as to
how the climate will evolve over time,
how and when governments,
regulators, businesses, investors and
customers respond and how those
responses impact the economy, asset
valuations, land systems, energy
systems, technology, policy and
wider society;
 the assumptions will be continually
evolving with more data/information
which may affect the baselines for
comparability across reporting
periods and impact internal and
external verification processes; and
 the pace of the development of the
methodologies across different
sectors may be different and
therefore it may be challenging to
report on the whole balance sheet
with regard to emissions.
Accordingly, these risks and
uncertainties coupled with significantly
longer timeframes make the outputs of
climate-related risk modelling, including
emissions reductions targets and
pathways, inherently more uncertain
than outputs modelled for traditional
financial planning cycles based on
historical financial information.
Capabilities within NatWest Group to
appropriately assess, model and manage
climate-related risks and the suitability of
the assumptions required to model and
manage climate-related risks
appropriately are developing. Even when
those capabilities are developed, the high
level of uncertainty regarding any
assumptions modelled, the highly
subjective nature of risk measurement
and mitigation techniques, incorrect or
inadequate assumptions and judgments
and data quality gaps and limitations
may lead to inadequate risk
management information and
frameworks, or ineffective business
adaptation or mitigation strategies,
which may have a material adverse
impact on NatWest Group’s regulatory
compliance, reputation, business, results
of operations and outlook.
A failure to adapt NatWest Group’s
business strategy, governance,
procedures, systems and controls to
manage emerging sustainability-related
risks and opportunities may have a
material adverse effect on NatWest
Group, its reputation, business, results of
operations and outlook.
Investors, customers, international
organisations, regulators and other
stakeholders are increasingly focusing on
identification, measurement,
management and mitigation of
‘sustainability-related’ risks and
opportunities such as environmental
(including biodiversity and loss of natural
capital); social (including diversity and
inclusion, the living wage, fair taxation
and value chains); and governance
(including board diversity, ethics,
executive compensation and
management structure) related risks and
opportunities and on long term
sustainable value creation.
Financial institutions, including NatWest
Group, are directly and indirectly
exposed to multiple types of
environmental and biodiversity-related
risk through their activities, including risk
of default by clients. Additionally, there is
a growing need to move from
safeguards and interventions that focus
on reducing negative impacts on
environment and biodiversity towards
those that focus on increasing positive
impact on environment and biodiversity
and nature-based solutions. In 2021,
NatWest Group accordingly classified
‘Biodiversity and Nature Loss’ as an
emerging risk for NatWest Group within
its Risk Management Framework. This is
an evolving and complex area which
requires collaborative approaches with
partners, stakeholders and peers to help
measure and mitigate negative impacts
of financing activities on the
environment, biodiversity and nature as
well as supporting the growing sector of
nature-based solutions, habitat
restoration and biodiversity markets.
NatWest Group is in the early stages of
developing its approach and NatWest
Group recognises the need for more
progress.
There is also increased investor,
regulatory and customer scrutiny
regarding how businesses address social
issues, including tackling inequality,
working conditions, workplace health,
safety and wellbeing, diversity and
inclusion, data protection and
management, workforce management,
human rights and supply chain
management which may impact NatWest
Group’s employees, customers, and their
business activities or the communities in
which they operate. There is also
growing attention on the need for a 'just
transition' and “energy justice” – in
recognition that the transition to a net
zero economy should not
disproportionally affect the most
disadvantaged members of society. The
increased focus on these issues may
create reputational and other risks for
financial institutions, including NatWest
Group.
In addition to climate-related risks,
sustainability-related risks (i) may also
adversely affect economic activity, asset
pricing and valuations of issuers’
securities and, in turn, the wider financial
system; (ii) may impact economic
activities directly (for example through
lower corporate profitability or the
devaluation of assets) or indirectly (for
example through macro-financial
changes); (iii) may also affect the viability
or resilience of business models over the
medium to longer term, particularly
those business models most vulnerable
to sustainability-related risks; (iv) can
trigger further losses stemming directly
or indirectly from legal claims (liability
risks) and reputational damage as a
result of the public, customers,
counterparties and/or investors
associating NatWest Group or its
customers with adverse sustainability-
related issues; and (v) intersect with and
further complexity and challenge to
achieving our purpose-led strategy
including climate ambitions, targets and
commitments.
Together with climate-related risks,
these risks may combine to generate
even greater adverse effects on our
business.
Furthermore, sustainability-related risks
may be drivers of several different risk
categories simultaneously and may
exacerbate the risks described herein,
including credit risk, operational risk
(business continuity), market risk (both
traded and non-traded), liquidity and
funding risk (for example, net cash
outflows or depletion of liquidity buffers).
Accordingly, any failure or delay by
NatWest Group to successfully adapt its
business strategy and to establish and
maintain effective governance,
procedures, systems and controls in
response to these issues, and to manage
these emerging sustainability-related
risks and opportunities may have a
material adverse impact NatWest
Group’s reputation, liquidity position,
business, results of operations, outlook
and the value of NatWest Group’s
securities.
Any reduction in the ESG ratings of
NatWest Group could have a negative
impact on NatWest Group’s reputation
and on investors’ risk appetite and
customers’ willingness to deal with
NatWest Group.
ESG ratings from agencies and data
providers which rate how NatWest
Group manages environmental, social
and governance risks are increasingly
influencing investment decisions or being
used as a basis to label financial
products and services as green or
sustainable. ESG ratings are (i)
unsolicited; (ii) subject to the assessment
and interpretation by the ESG rating
agencies; (iii) provided without warranty;
(iv) not a sponsorship, endorsement, or
promotion of NatWest Group by the
relevant rating agency; and (v) may
depend on many factors some of which

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are beyond NatWest Group’s control
(e.g. any change in rating methodology).
Any reduction in the ESG ratings of
NatWest Group could have a negative
impact on NatWest Group’s reputation
and could influence investors’ risk
appetite for NatWest Group’s and/or its
subsidiaries’ securities, particularly ESG
securities and could affect a customer’s
willingness to deal with NatWest Group.
Increasing levels of climate,
environmental and sustainability-related
laws, regulation and oversight may
adversely affect NatWest Group’s
business and expose NatWest Group to
increased costs of compliance,
regulatory sanction and reputational
damage.
There are an increasing number of EU,
UK and other regulatory and legislative
initiatives to address issues around
climate, environmental and sustainability
risks and opportunities and to promote
the transition to a net zero economy. As
a result, an increasing number of laws,
regulations, legislative actions are likely
to affect the financial sector and the real
economy, including proposals, guidance,
policy and regulatory initiatives many of
which have been introduced or amended
recently and are subject to further
changes.
Many of these initiatives are focused on
developing standardized definitions for
green and sustainable criteria of assets
and liabilities, integrating climate change
and sustainability into decision-making
and customers access to green and
sustainable financial products and
services which may have a significant
impact on the services provided by
NatWest Group and its subsidiaries,
especially mortgage lending, and its
associated credit, market and financial
risk profile. They could also impact
NatWest Group’s recognition of its
climate and sustainable funding and
financing activity and may adversely
affect NatWest Group’s ability to achieve
its climate strategy and climate and
sustainable funding and financing
ambitions.
In addition, NatWest Group and its
subsidiaries are and will be subject to
increasing entity wide climate-related
and other non-financial disclosure
requirements pursuant to the
recommendations of the Task Force on
Climate-related Financial Disclosure
(‘TCFD’) and under other regimes. From
February 2022, NatWest Group will be
required to provide enhanced climate-
related disclosures consistent with the
TCFD recommendations to comply with
the FCA Policy Statement on the new
Listing Rules (PS 20/17) that require
commercial companies with a UK
premium listing – such as NatWest Group
- to make climate related disclosures,
consistent with TCFD, on a ‘comply or
explain’ basis. The FCA is proposing to
expand this requirement to a wider
scope of listed issuers which would
include NatWest Group’ subsidiaries as it
moves towards mandatory TCFD
reporting across the UK economy by
2025. See also, ‘There are significant
challenges in relation to climate-related
data due to quality and other limitations,
lack of standardisation, consistency and
incompleteness which amongst other
factors contribute to the significant
uncertainties inherent in accurately
modelling the impact of climate-related
risks’.
In addition, NatWest Group’s EU
subsidiaries and branches are and will
continue to be subject to an increasing
array of the EU/EEA climate and
sustainability-related legal and
regulatory requirements. These
requirements may be used as the basis
for UK laws and regulations (such as the
UK Green Taxonomy) or regarded by
investors and regulators as best practice
standards whether or not they apply to
UK businesses. Any divergence between
UK, EU/EEA and US climate and
sustainability-related legal and
regulatory requirements may result in
NatWest Group not meeting investors’
expectations, may increase the cost of
doing business and may restrict access
of NatWest Group’s UK business to the
EU/EEA market.
NatWest Group is also participating in
various voluntary carbon reporting and
other standard setting initiatives for
disclosing climate and sustainability-
related information, many of which have
differing objectives and methodologies
and are at different stages of
development in terms of how they apply
to financial institutions.
Compliance with these developing and
evolving climate and sustainability-
related requirements is likely to require
NatWest Group to implement significant
changes to its business models, product
and other governance, internal controls
over financial reporting, disclosure
controls and procedures, modelling
capability and risk management systems,
which may increase the cost of doing
business, entail additional change risk
and compliance costs.
Failure to implement and comply with
these legal and regulatory requirements
or emerging best practice expectations
may have a material adverse effect on
NatWest Group’s regulatory compliance
and may result in regulatory sanction,
reputational damage and investor
disapproval each of which could have an
adverse effect on NatWest Group’s
business, results of operations and
outlook.
NatWest Group may be subject to
potential climate, environmental and
other sustainability-related litigation,
enforcement proceedings, investigations
and conduct risk.
Due to increasing new climate and
sustainability-related jurisprudence, laws
and regulations in the UK and other
jurisdictions, growing demand from
investors and customers for
environmentally sustainable products
and services, and regulatory scrutiny,
financial institutions, including NatWest
Group, may through their business
activities face increasing litigation,
conduct, enforcement and contract
liability risks related to climate change,
environmental degradation and other
social, governance and sustainability-
related issues.
These risks may arise, for example, from
claims pertaining to : (i) failures to meet
obligations, targets or commitments
relating to, or to disclose accurately, or
provide updates on material climate
and/or sustainability related risks, or
otherwise provide appropriate disclosure
to investors, customers, counterparties
and other stakeholders; (ii) conduct, mis-
selling and other customer protection
type claims; (iii) marketing that portrays
products, securities, activities or policies
as producing positive climate,
environmental or sustainable outcomes
to an extent that may not the case; (iv)
damages claims under various tort
theories, including common law public
nuisance claims, or negligent
mismanagement of physical and/or
transition risks; (v) alleged violations of
officers’, directors’ and other fiduciaries’
fiduciary duties, for example by financing
various carbon-intensive,
environmentally harmful or otherwise
highly exposed assets, companies, and
industries; (vi) changes in understanding
of what constitutes positive climate,
environmental or sustainable outcomes
as a result of developing climate science,
leading to discrepancy between current
product offerings and investor and/or
market and/or broader stakeholder
expectations; (vi) any weaknesses or
failures in specific systems or processes
associated particularly with climate,
environmental or sustainability linked
products, including any failure in timely
implementation, onboarding and/or
updating of such systems or processes;
or (vii) counterparties, collaborators and
third parties in NatWest Group’s value
chain action who act, or fail to act, or
undertake due diligence, or apply
appropriate risk management and
product governance in a manner that
impacts Natwest Group’s reputation or
sustainability credentials.
Furthermore, there is a risk that
shareholders, campaign groups,

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customers and special interest groups
could seek to take legal action against
NatWest Group for financing or
contributing to climate change and
environmental degradation and for not
supporting the principles of “just
transition” (i.e. maximising the social
benefits of the transition, mitigating the
social risks of the transition, empowering
those affected by the change,
anticipating future shifts to address
issues up front and mobilising
investments from the public and private
sectors).
There is a risk that as climate science
develops and societal understanding of
climate science increases and deepens,
courts, regulators and enforcement
authorities may apply the then current
understandings of climate related
matters retrospectively when assessing
claims about historic conduct or dealings
of financial institutions, including
NatWest Group.
These potential litigation, conduct,
enforcement and contract liability risks
may have a material adverse effect on
NatWest Group’s ability to achieve its
strategy, including its climate ambition,
and they could have an adverse effect
on NatWest Group’s reputation, business,
financial results, position and prospects,
results of operations and outlook.
Operational and IT resilience risk
Operational risks (including reliance on
third party suppliers and outsourcing of
certain activities) are inherent in NatWest
Group’s businesses.
Operational risk is the risk of loss
resulting from inadequate or failed
internal processes, procedures, people or
systems, or from external events,
including legal risks. NatWest Group
operates in a number of countries,
offering a diverse range of products and
services supported directly or indirectly
by third party suppliers. As a result,
operational risks or losses can arise from
a number of internal or external factors
(including financial crime and fraud), for
which there may now be a risk of
greater scrutiny by third parties on
NatWest Group’s compliance with
financial crime requirements; see
‘NatWest Group is exposed to the risks of
various litigation matters, regulatory and
governmental actions and investigations
as well as remedial undertakings,
including conduct-related reviews, anti-
money laundering and redress projects,
the outcomes of which are inherently
difficult to predict, and which could have
an adverse effect on NatWest Group’).
These risks are also present when
NatWest Group relies on third-party
suppliers or vendors to provide services
to it or its customers, as is increasingly
the case as NatWest Group outsources
certain activities, including with respect
to the implementation of new
technologies, innovation and responding
to regulatory and market changes.
Operational risks continue to be
heightened as a result of the
implementation of NatWest Group’s
purpose-led strategy, including NatWest
Group’s phased withdrawal from ROI,
NatWest Group’s current cost-reduction
measures and conditions affecting the
financial services industry generally
(including the COVID-19 pandemic and
other geo-political developments) as well
as the legal and regulatory uncertainty
resulting therefrom. It is unclear as to
how the future ways of working may
evolve, including in respect of how
working practices may develop, or how
NatWest Group will evolve to best serve
its customers. Any of the above may
place significant pressure on NatWest
Group’s ability to maintain effective
internal controls and governance
frameworks.
The effective management of operational
risks is critical to meeting customer
service expectations and retaining and
attracting customer business. Although
NatWest Group has implemented risk
controls and mitigation actions, with
resources and planning having been
devoted to mitigate operational risk, such
measures may not be effective in
controlling each of the operational risks
faced by NatWest Group. Ineffective
management of such risks could
adversely affect NatWest Group.
NatWest Group is subject to increasingly
sophisticated and frequent cyberattacks.
NatWest Group experiences a constant
threat from cyberattacks across the
entire NatWest Group and against
NatWest Group’s supply chain,
reinforcing the importance of due
diligence of and close working
relationship with the third parties on
which NatWest Group relies. NatWest
Group is reliant on technology, against
which there is a constantly evolving
series of attacks that are increasing in
terms of frequency, sophistication,
impact and severity. As cyberattacks
evolve and become more sophisticated,
NatWest Group is required to continue to
invest in additional capability designed to
defend against the emerging threats. In
2021, NatWest Group and its supply
chain were subjected to a small number
of Distributed Denial of Service (‘DDOS’)
and ransomware attacks, which are a
pervasive and significant threat to the
global financial services industry. The
focus is to manage the impact of the
attacks and sustain availability of
services for NatWest Group’s customers.
NatWest Group continues to invest
significant resources in the development
and evolution of cyber security controls
that are designed to minimise the
potential effect of such attacks.
Hostile attempts are made by third
parties to gain access to, introduce
malware (including ransomware) into
and exploit vulnerabilities of, NatWest
Group’s IT systems. NatWest Group has
information and cyber security controls
in place to minimise the impact of any
attack, which are subject to review on a
continuing basis but given the nature of
the threat, there can be no assurance
that such measures will prevent all
attacks in the future. See also, ‘NatWest
Group’s operations are highly dependent
on its complex IT systems (including those
that enable remote working) and any IT
failure could adversely affect NatWest
Group’.
Any failure in NatWest Group’s
cybersecurity policies, procedures or
controls, may result in significant
financial losses, major business
disruption, inability to deliver customer
services, or loss of data or other
sensitive information (including as a
result of an outage) and may cause
associated reputational damage. Any of
these factors could increase costs
(including costs relating to notification of,
or compensation for customers, credit
monitoring or card reissuance), result in
regulatory investigations or sanctions
being imposed or may affect NatWest
Group’s ability to retain and attract
customers. Regulators in the UK, US,
Europe and Asia continue to recognise
cybersecurity as an important systemic
risk to the financial sector and have
highlighted the need for financial
institutions to improve their monitoring
and control of, and resilience
(particularly of critical services) to
cyberattacks, and to provide timely
notification of them, as appropriate.
Additionally, third parties may also
fraudulently attempt to induce
employees, customers, third-party
providers or other users who have
access to NatWest Group’s systems to
disclose sensitive information in order to
gain access to NatWest Group’s data or
that of NatWest Group’s customers or
employees. Cybersecurity and
information security events can derive
from groups or factors such as: internal
or external threat actors, human error,
fraud or malice on the part of NatWest
Group’s employees or third parties,
including third party providers, or may
result from accidental technological
failure.
NatWest Group expects greater
regulatory engagement, supervision and
enforcement to continue at a high level
in relation to its overall resilience to
withstand IT and related disruption,
either through a cyberattack or some
Additional information

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other disruptive event. Such increased
regulatory engagement, supervision and
enforcement is uncertain in relation to
the scope, cost, consequence and the
pace of change, which could negatively
impact NatWest Group. Due to NatWest
Group’s reliance on technology and the
increasing sophistication, frequency and
impact of cyberattacks, such attacks
may have a material adverse impact on
NatWest Group.
In accordance with the Data Protection
Act 2018 and the European Union
Withdrawal Act 2018, the Data
Protection, Privacy and Electronic
Communications (Amendments Etc.) (EU
Exit) Regulations 2019, as amended by
the Data Protection, Privacy and
Electronic Communications
(Amendments Etc.) (EU Exit) Regulations
2020 (‘UK Data Protection Framework’)
and European Banking Authority (‘EBA’)
Guidelines on ICT and Security Risk
Management, NatWest Group is required
to ensure it implements timely,
appropriate and effective organisational
and technological safeguards against
unauthorised or unlawful access to the
data of NatWest Group, its customers
and its employees. In order to meet this
requirement, NatWest Group relies on
the effectiveness of its internal policies,
controls and procedures to protect the
confidentiality, integrity and availability
of information held on its IT systems,
networks and devices as well as with
third parties with whom NatWest Group
interacts. A failure to monitor and
manage data in accordance with the UK
Data Protection Framework and EBA
requirements of the applicable legislation
may result in financial losses, regulatory
fines and investigations and associated
reputational damage.
NatWest Group operations and strategy
are highly dependent on the accuracy
and effective use of data.
NatWest Group relies on the effective
use of accurate data to support, monitor,
evaluate, manage and enhance its
operations and deliver its strategy. The
availability of current, complete, detailed,
accurate and, wherever possible,
machine-readable customer segment
and sub-sector data, together with
appropriate governance and
accountability for data, is fast becoming
a critical strategic asset, which is subject
to increased regulatory focus. Failure to
have that data or the ineffective use or
governance of that data could result in a
failure to manage and report important
risks and opportunities or satisfy
customers’ expectations including the
inability to deliver innovative products
and services. This could also result in a
failure to deliver NatWest Group’s
strategy and could place NatWest Group
at a competitive disadvantage by
increasing its costs, inhibiting its efforts
to reduce costs or its ability to improve
its systems, controls and processes,
which could result in a failure to deliver
NatWest Group’s strategy. These data
limitations, or the unethical or
inappropriate use of data, and/or non-
compliance with customer data
protection laws could give rise to
conduct and litigation risks and may
increase the risk of operational events,
losses or other adverse consequences
due to inappropriate models, systems,
processes, decisions or other actions.
NatWest Group’s operations are highly
dependent on its complex IT systems
(including those that enable remote
working) and any IT failure could
adversely affect NatWest Group.
NatWest Group’s operations are highly
dependent on the ability to process a
very large number of transactions
efficiently and accurately while
complying with applicable laws and
regulations. The proper functioning of
NatWest Group’s payment systems,
financial crime, fraud systems and
controls, risk management, credit
analysis and reporting, accounting,
customer service and other IT systems,
as well as the communication networks
between its branches and main data
processing centres, is critical to NatWest
Group’s operations.
Individually or collectively, any critical
system failure, material loss of service
availability or material breach of data
security could cause serious damage to
NatWest Group’s ability to provide
services to its customers, which could
result in reputational damage, significant
compensation costs or regulatory
sanctions (including fines resulting from
regulatory investigations) or a breach of
applicable regulations and could affect
its regulatory approvals, competitive
position, business and brands, which
could undermine its ability to attract and
retain customers. This risk is heightened
as most of NatWest Group’s employees
continue to work remotely, as it
outsources certain functions and as it
continues to innovate and offer new
digital solutions to its customers as a
result of the trend towards online and
mobile banking.
In 2021, NatWest Group continued to
make considerable investments to
further simplify, upgrade and improve its
IT and technology capabilities (including
migration of certain services to cloud
platforms). NatWest Group also
continues to develop and enhance digital
services for its customers and seeks to
improve its competitive position through
enhancing controls and procedures and
strengthening the resilience of services
including cyber security. Any failure of
these investment and rationalisation
initiatives to achieve the expected
results, due to cost challenges or
otherwise, could negatively affect
NatWest Group’s operations, its
reputation and ability to retain or grow
its customer business or adversely
impact its competitive position, thereby
negatively impacting NatWest Group.
Remote working may adversely affect
NatWest Group’s ability to maintain
effective internal controls.
From March 2020 to September 2021,
many of NatWest Group’s employees
worked exclusively on a remote basis.
Following the lifting of government
restrictions, NatWest Group will
implement a new hybrid working policy
whereby many employees may work
remotely the majority of the time in the
ordinary course of their roles.
Remote working arrangements for
NatWest Group employees continues to
place heavy reliance on the IT systems
that enable remote working and
increased exposure to fraud, conduct,
operational and other risks and may
place additional pressure on NatWest
Group’s ability to maintain effective
internal controls and governance
frameworks. Remote working
arrangements are also subject to
regulatory scrutiny to ensure adequate
recording, surveillance and supervision
of regulated activities, and compliance
with regulatory requirements and
expectations, including requirements to:
meet threshold conditions for regulated
activities; ensure the ability to oversee
functions (including any outsourced
functions); ensure no detriment is caused
to customers; and ensure no increased
risk of financial crime. See also, ‘A failure
in NatWest Group’s risk management
framework could adversely affect
NatWest Group, including its ability to
achieve its strategic objectives.’
Moreover, the IT systems that enable
remote working interface with third-
party systems, and NatWest Group could
experience service denials or disruptions
if such systems exceed capacity or if a
third-party system fails or experiences
any interruptions, all of which could
result in business and customer
interruption and related reputational
damage, significant compensation costs,
regulatory sanctions and/or a breach of
applicable regulations. See also,
‘NatWest Group’s operations are highly
dependent on its complex IT systems
(including those that enable remote
working) and any IT failure could
adversely affect NatWest Group’.
Sustained periods of remote working
may negatively affect workforce morale.
Whilst NatWest Group has taken
measures seeking to maintain the health,
wellbeing and safety of its employees,
these measures may be ineffective. Any

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of the above could impair NatWest
Group’s ability to hire, retain and engage
well-qualified employees, especially at a
senior level, which in turn may adversely
impact NatWest Group’s ability to serve
its customers efficiently and impact
productivity across NatWest Group. This
could also adversely affect NatWest
Group’s reputation and competitive
position and its ability to grow its
business.
NatWest Group relies on attracting,
retaining and developing diverse senior
management and skilled personnel, and
is required to maintain good employee
relations.
NatWest Group’s success depends on its
ability to attract, retain through creating
an inclusive environment, and develop
highly skilled and qualified diverse
personnel, including senior management,
directors and key employees especially
for technology and data focused roles, in
a highly competitive market and under
internal cost reduction pressures.
NatWest Group’s ability to do this may
be more difficult due to the cost
reduction pressures, heightened
regulatory oversight of banks and the
increasing scrutiny of, and (in some
cases) restrictions placed upon,
employee compensation arrangements
(in particular those of banks in receipt of
government support such as NatWest
Group). This increases the cost of hiring,
training and retaining diverse skilled
personnel. In addition, certain economic,
market and regulatory conditions and
political developments may reduce the
pool of diverse candidates for key
management and non-executive roles,
including non-executive directors with
the right skills, knowledge and
experience, or increase the number of
departures of existing employees.
Moreover, a failure to foster a diverse
and inclusive workforce may have an
adverse impact on NatWest Group’s
employee engagement and the
formulation and execution of its strategy,
and could also have a negative effect on
its reputation with customers, investors
and regulators.
The inability to compensate employees
competitively and/or any reduction of
compensation, as a result of negative
economic developments or otherwise,
could have an adverse effect on NatWest
Group’s ability to hire, retain and engage
well qualified employees, especially at a
senior level, which may have a negative
impact on the financial position and
prospects of NatWest Group.
Many of NatWest Group’s employees in
the UK, the ROI and continental Europe
are represented by employee
representative bodies, including trade
unions and works councils. Engagement
with its employees and such bodies is
important to NatWest Group in
maintaining good employee relations.
Any failure to do so could impact
NatWest Group’s ability to operate its
business effectively.
A failure in NatWest Group’s risk
management framework could adversely
affect NatWest Group, including its ability
to achieve its strategic objectives.
Risk management is an integral part of
all of NatWest Group’s activities and
includes the definition and monitoring of
NatWest Group’s risk appetite and
reporting on NatWest Group’s risk
exposure and the potential impact
thereof on NatWest Group’s financial
condition. Financial risk management is
highly dependent on the use and
effectiveness of internal stress tests and
models.
In addition, financial crime risk
management is dependent on the use
and effectiveness of financial crime
assessment, systems and controls. Weak
or ineffective financial crime processes
and controls may risk NatWest Group
inadvertently facilitating financial crime
which may result in regulatory
investigation, sanction, litigation and
reputational damage. Financial crime
continues to evolve, whether through
fraud, scams, cyber-attacks or other
criminal activity. NatWest Group has
made and continues to make significant,
multi-year investments to strengthen and
improve its overall financial crime control
framework with prevention systems and
capabilities. As part of its ongoing
programme of investment, there is
current and future investment planned to
further strengthen financial crime
controls over the coming years, including
investment in new technologies and
capabilities to further enhance customer
due diligence, transaction monitoring,
sanctions and anti-bribery and
corruption systems.
Ineffective risk management may arise
from a wide variety of factors, including
lack of transparency or incomplete risk
reporting, unidentified conflicts or
misaligned incentives, lack of
accountability control and governance,
incomplete risk monitoring and
management or insufficient challenges or
assurance processes. Failure to manage
risks effectively could adversely impact
NatWest Group’s reputation or its
relationship with its regulators,
customers, shareholders or other
stakeholders.
NatWest Group’s operations are
inherently exposed to conduct risks,
which include business decisions, actions
or reward mechanisms that are not
responsive to or aligned with NatWest
Group’s regulatory obligations,
customers’ needs or do not reflect
NatWest Group’s customer-focused
strategy, ineffective product
management, unethical or inappropriate
use of data, information asymmetry,
implementation and utilisation of new
technologies, outsourcing of customer
service and product delivery, the
possibility of mis-selling of financial
products and mishandling of customer
complaints. Some of these risks have
materialised in the past and ineffective
management and oversight of conduct
risks may lead to further remediation
and regulatory intervention or
enforcement.
NatWest Group’s businesses are also
exposed to risks from employee
misconduct including non-compliance
with policies and regulations, negligence
or fraud (including financial crimes and
fraud), any of which could result in
regulatory fines or sanctions and serious
reputational or financial harm to
NatWest Group. These risks may be
exacerbated as most of NatWest Group’s
employees continue to work remotely,
which places additional pressure on
NatWest Group’s ability to maintain
effective internal controls and
governance frameworks.
NatWest Group has been seeking to
embed a strong risk culture across the
organisation and has implemented
policies and allocated new resources
across all levels of the organisation to
manage and mitigate conduct risk and
expects to continue to invest in its risk
management framework. However, such
efforts may not insulate NatWest Group
from future instances of misconduct and
no assurance can be given that NatWest
Group’s strategy and control framework
will be effective. Any failure in NatWest
Group’s risk management framework
could negatively affect NatWest Group
and its financial condition through
reputational and financial harm and may
result in the inability to achieve its
strategic objectives for its customers,
employees and wider stakeholders.
NatWest Group’s operations are subject
to inherent reputational risk.
Reputational risk relates to stakeholder
and public perceptions of NatWest Group
arising from an actual or perceived
failure to meet stakeholder expectations,
including with respect to NatWest
Group’s purpose-led strategy and related
targets, due to any events, behaviour,
action or inaction by NatWest Group, its
employees or those with whom NatWest
Group is associated. See also ‘NatWest
Group’s businesses are subject to
substantial regulation and oversight,
which are constantly evolving and may
adversely affect NatWest Group’. This
includes brand damage, which may be
detrimental to NatWest Group’s business,

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including its ability to build or sustain
business relationships with customers,
and may cause low employee morale,
regulatory censure or reduced access to,
or an increase in the cost of, funding.
Reputational risk may arise whenever
there is a material lapse in standards of
integrity, compliance, customer or
operating efficiency and may adversely
affect NatWest Group’s ability to attract
and retain customers. In particular,
NatWest Group’s ability to attract and
retain customers (particularly, corporate
and retail depositors) may be adversely
affected by, amongst others: negative
public opinion resulting from the actual
or perceived manner in which NatWest
Group conducts or modifies its business
activities and operations, media
coverage (whether accurate or
otherwise), employee misconduct,
NatWest Group’s financial performance,
IT systems failures or cyberattacks, data
breaches, financial crime and fraud, the
level of direct and indirect government
support, or the actual or perceived
practices in the banking and financial
industry in general, or a wide variety of
other factors.
Modern technologies, in particular online
social networks and other broadcast
tools that facilitate communication with
large audiences in short timeframes and
with minimal costs, may also significantly
increase and accelerate the impact of
damaging information and allegations.
Although NatWest Group has
implemented a Reputational Risk Policy
to improve the identification, assessment
and management of customers,
transactions, products and issues, which
represent a reputational risk, NatWest
Group cannot be certain that it will be
successful in avoiding damage to its
business from reputational risk.
Legal, regulatory and conduct risk
NatWest Group’s businesses are subject
to substantial regulation and oversight,
which are constantly evolving and may
adversely affect NatWest Group.
NatWest Group is subject to extensive
laws, regulations, corporate governance
practice and disclosure requirements,
administrative actions and policies in
each jurisdiction in which it operates.
Many of these have been introduced or
amended recently and are subject to
further material changes, which may
increase compliance and conduct risks,
particularly if EU/EEA and UK laws
diverge as a result of Brexit. NatWest
Group expects government and
regulatory intervention in the financial
services industry to remain high for the
foreseeable future.
In recent years, regulators and
governments have focused on reforming
the prudential regulation of the financial
services industry and the manner in
which the business of financial services is
conducted. Amongst others, measures
have included: enhanced capital, liquidity
and funding requirements,
implementation of the UK ring-fencing
regime, implementation and
strengthening of the recovery and
resolution framework applicable to
financial institutions in the UK, the EU
and the US, financial industry reforms
(including in respect of MiFID II),
corporate governance requirements,
restrictions on the compensation of
senior management and other
employees, enhanced data protection
and IT resilience requirements, financial
market infrastructure reforms (including
enhanced data protection and IT
resilience requirements, enhanced
regulations in respect of the provision of
‘investment services and activities’), and
increased regulatory focus in certain
areas, including conduct, consumer
protection, competition, disputes
regimes, payment systems, financial
crime and fraud laws and regulations.
Other areas in which, and examples of
where, governmental policies, regulatory
and accounting changes, and increased
public and regulatory scrutiny could
have an adverse impact (some of which
could be material) on NatWest Group
include, but are not limited to, the
following:
 general changes in government,
central bank, regulatory or
competition policy, or changes in
regulatory regimes that may
influence investor decisions in the
jurisdictions in which NatWest Group
operates;
 rules relating to foreign ownership,
expropriation, nationalisation and
confiscation of assets;
 increased scrutiny from the CMA,
FCA and Payment Systems Regulator
(‘PSR’) for the protection and
resilience of, and competition and
innovation in, UK payment systems
and retail banking developments
relating to the UK initiative on Open
Banking, Open Finance and the
European directive on payment
services;
 the ongoing compliance by NatWest
Group with CMA’s Retail Banking
Market Order 2017 (the ‘Order’) as
well as the ongoing consultation by
the UK Government to introduce
penalties for breaches of the Order
(in addition to the current customer
remediation requirements);
 ongoing competition litigation in the
English courts around payment card
interchange fees, combined with
increased regulatory scrutiny (from
the PSR) of the Visa and Mastercard
card schemes;
 new or increased regulations relating
to customer data protection as well
as IT controls and resilience,
including the UK Data Protection
Framework and the impact of the
Court of Justice of the EU (CJEU)
decision (known as Schrems II), in
which the CJEU ruled that the
Privacy Shield (an EU/US data
transfer mechanism) is now invalid,
leading to more onerous due
diligence requirements for the Group
prior to sending personal data of its
EU customers and employees to non-
EEA countries, including the UK and
the US;
 the introduction of, and changes to,
taxes, levies or fees applicable to
NatWest Group’s operations, such as
the imposition of a financial
transaction tax, introduction of global
minimum tax rules, changes in tax
rates, changes in the scope and
administration of the Bank Levy,
increases in the bank corporation tax
surcharge in the UK, restrictions on
the tax deductibility of interest
payments or further restrictions
imposed on the treatment of carry-
forward tax losses that reduce the
value of deferred tax assets and
require increased payments of tax;
 increased regulatory focus on
customer protection (such as the
FCA’s consumer duty consultation
paper (CP21/13)) in retail or other
financial markets;
 the potential introduction by the
Bank of England of a Central Bank
Digital Currency which could result in
deposit outflows, higher funding
costs, and/or other implications for
UK banks including NatWest Group;
and
 regulatory enforcement in the form
of PRA imposed financial penalties
for failings in banks’ regulatory
reporting governance and controls,
and regulatory scrutiny following the
2019 PRA “Dear CEO letter” letter
regarding PRA’s ongoing focus on:
the integrity of regulatory reporting,
which the PRA considers has equal
standing with financial reporting; the
PRA’s thematic reviews of the
governance, controls and processes
for preparing regulatory returns of
selected UK banks, including NatWest
Group; the publication of the PRA’s
common findings from those reviews
in September 2021; and NatWest
Group’s programme of improvements
to meet PRA expectations.
These and other recent regulatory
changes, proposed or future
developments and heightened levels of
public and regulatory scrutiny in the UK,
the EU and the US have resulted in
increased capital, funding and liquidity
requirements, changes in the competitive

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landscape, changes in other regulatory
requirements and increased operating
costs, and have impacted, and will
continue to impact, competitive position,
product offerings and business models.
Future competition investigations, market
reviews, or the regulation of mergers
may lead to the imposition of financial
penalties or market remedies that may
adversely impact NatWest Group’s
competitive or financial position. Any of
these developments (including any failure
to comply with new rules and
regulations) could also have a significant
impact on NatWest Group’s
authorisations and licences, the products
and services that NatWest Group may
offer, its reputation and the value of its
assets, NatWest Group’s operations or
legal entity structure, and the manner in
which NatWest Group conducts its
business. Material consequences could
arise should NatWest Group be found to
be non-compliant with these regulatory
requirements. Regulatory developments
may also result in an increased number
of regulatory investigations and
proceedings and have increased the
risks relating to NatWest Group’s ability
to comply with the applicable body of
rules and regulations in the manner and
within the time frames required.
Changes in laws, rules or regulations, or
in their interpretation or enforcement, or
the implementation of new laws, rules or
regulations, including contradictory or
conflicting laws, rules or regulations by
key regulators or policymakers in
different jurisdictions, or failure by
NatWest Group to comply with such
laws, rules and regulations, may
adversely affect NatWest Group’s
business, results of operations and
outlook. In addition, uncertainty and
insufficient international regulatory
coordination as enhanced supervisory
standards are developed and
implemented may adversely affect
NatWest Group’s ability to engage in
effective business, risk and capital
management planning.
NatWest Group is exposed to the risks of
various litigation matters, regulatory and
governmental actions and investigations
as well as remedial undertakings,
including conduct-related reviews, anti-
money laundering and redress projects,
the outcomes of which are inherently
difficult to predict, and which could have
an adverse effect on NatWest Group.
NatWest Group’s operations are diverse
and complex and it operates in legal and
regulatory environments that expose it to
potentially significant legal proceedings,
and civil and criminal regulatory and
governmental actions. NatWest Group
has resolved a number of legal and
regulatory actions over the past several
years but continues to be, and may in
the future be, involved in such actions in
the US, the UK, Europe and other
jurisdictions.
NatWest Group is currently, has recently
been and will likely be involved in a
number of significant legal and
regulatory actions, including
investigations, proceedings and ongoing
reviews (both formal and informal) by
governmental law enforcement and
other agencies and litigation
proceedings, relating to, among other
matters, the offering of securities,
conduct in the foreign exchange market,
the setting of benchmark rates such as
LIBOR and related derivatives trading,
the issuance, underwriting, and sales
and trading of fixed-income securities
(including government securities),
product mis-selling, customer
mistreatment, anti-money laundering,
antitrust, VAT recovery and various
other compliance issues. Legal and
regulatory actions are subject to many
uncertainties, and their outcomes,
including the timing, amount of fines,
damages or settlements or the form of
any settlements, which may be material
and in excess of any related provisions,
are often difficult to predict, particularly
in the early stages of a case or
investigation. NatWest Group’s
expectation for resolution may change
and substantial additional provisions and
costs may be recognised in respect of
any matter.
The resolution of significant
investigations include: (a) NWM Plc’s
December 2021 spoofing-related guilty
plea in the United States, which involves
a three-year period of probation, an
independent corporate monitor, and
commitments to compliance programme
reviews and improvements and reporting
obligations, as well as approximately
US$35 million in fines and restitution,
and (b) National Westminster Bank Plc’s
October 2021 guilty plea for breaches of
the UK Money Laundering Regulations
2007, which resulted in a fine of
approximately £265 million. For
additional information relating to these
and other legal and regulatory
proceedings and matters to which
NatWest Group is currently exposed, see
‘Litigation and regulatory matters’ at
Note 27 to the consolidated accounts.
The recent guilty pleas, other recently
resolved matters or adverse outcomes or
resolution of current or future legal or
regulatory actions could increase the risk
of greater regulatory and third party
scrutiny and could have material
collateral consequences for NatWest
Group’s business and result in
restrictions or limitations on NatWest
Group’s operations.
These may include the effective or actual
disqualification from carrying on certain
regulated activities and consequences
resulting from the need to reapply for
various important licences or obtain
waivers to conduct certain existing
activities of NatWest Group, particularly
but not solely in the US, which may take
a significant period of time and the
results of which are uncertain.
Disqualification from carrying on any
activities, whether automatically as a
result of the resolution of a particular
matter or as a result of the failure to
obtain such licences or waivers could
adversely impact NatWest Group’s
business, in particular in the US. This in
turn and/or any fines, settlement
payments or penalties could adversely
impact NatWest Group’s reported
financial results and condition, capital
position or reputation.
Failure to comply with undertakings
made by NatWest Group to its
regulators, or the conditions of probation
resulting from the spoofing-related guilty
plea, may result in additional measures
or penalties being taken against NatWest
Group. In addition, any failure to
administer conduct redress processes
adequately, or to handle individual
complaints fairly or appropriately, could
result in further claims as well as the
imposition of additional measures or
limitations on NatWest Group’s
operations, additional supervision by
NatWest Group’s regulators, and loss of
investor confidence.
NatWest Group may not effectively
manage the transition of LIBOR and
other IBOR rates to alternative risk-free
rates.
UK and international regulators are
driving the transition from the use of
interbank offer rates (‘IBORs’), including
LIBOR, to alternative rates, primarily risk
free rates (‘RFRs’). As of 31 December
2021, LIBOR, as currently determined,
has ceased for all tenors of GBP, JPY,
CHF, EUR, and for the 1 week and 2
month tenors for USD. The remaining
USD LIBOR tenors, as currently
determined, are due to cease after 30
June 2023. The FCA has used its powers
under the UK Benchmarks Regulation
(‘UK BMR’) to require, for a limited
period of time after 31 December 2021,
the ongoing publication of the 1, 3, and 6
month GBP and JPY LIBOR tenors using
a changed methodology (i.e., ‘Art23A
LIBOR’ on a synthetic basis). The UK has
passed the Critical Benchmarks
(References and Administrators’ Liability)
Act 2021 (‘Critical Benchmarks Act’)
which establishes a framework that
allows the ongoing use of Art23A LIBOR
under certain circumstances where
contracts have pro-actively transitioned
onto alternative rates. However, the FCA

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has been clear that the solutions
provided under UK BMR and the Critical
Benchmarks Act are not permanent and
cannot be guaranteed after the end of
2022 (and for JPY the FCA has
confirmed that Art23A LIBOR will no
longer be available after the end of
2022). This framework and its lack of
permanence may expose NatWest
Group, its customers and the financial
services industry more widely to various
risks, including: (i) the FCA further
restricting use of Art23A LIBOR resulting
in proactive transition of contracts; and
(ii) mis-matches between positions in
cleared derivatives and the exposures
they are hedging where those exposures
are permitted to make use of Art23A
LIBOR, as the FCA has chosen not to
permit the use of Art23A LIBOR for
cleared derivatives. Although the formal
cessation date for the remaining USD
LIBOR tenors (as currently determined) is
not until the end of June 2023, US and
UK regulators have been clear that this
is only to support the rundown of back
book USD LIBOR exposures, and that no
new contracts should reference these
USD LIBOR tenors after 31 December
2021, other than in a very limited range
of circumstances. Natwest Group will
continue to have ongoing exposure to
the remaining USD LIBOR tenors until
they cease at the end of June 2023.
Natwest Group had significant exposures
to IBORs and has actively sought to
transition away from these during 2021
in accordance with regulatory
expectations and milestones. Transition
measures have included the pro-active
development of new products on using
alternative rates, primarily but not
exclusively RFRs rather than LIBOR, pro-
actively restructuring existing LIBOR
exposures so that they cease to
reference LIBOR and instead reference
alternative rates, and embedding
language into contracts that allows for
the automatic conversion to alternative
rates when LIBOR ceases to be available.
The main Central Counterparty Clearing
houses (CCPs) conducted mass
conversion exercises in December 2021
covering GBP, JPY, CHF and EUR LIBOR
cleared derivatives to fully transition all
outstanding LIBOR exposure to the
relevant RFR. Natwest Group entities,
along with many of their major
counterparties, have already adhered to
the ISDA IBOR fall-backs supplement and
protocol which establishes a clear,
industry accepted, contractual process
to manage the transition from IBORs to
RFRs for non-cleared derivative
products.
These transition efforts have involved
extensive engagement with customers,
industry working groups and regulators
to seek to deliver transition in a
transparent and economically
appropriate manner. Any economic
impacts will be dependent on, amongst
other things, the establishment of deep
and liquid RFR markets, the
establishment of clear and consistent
market conventions for all replacement
products, as well as counterparties’
willingness to accept, and transition to,
these conventions. Furthermore, certain
IBOR obligations may not be able to be
pro-actively changed which could,
depending on any over-arching
legislative transition frameworks,
potentially result in fundamentally
different economic outcomes than
originally intended. The uncertainties
around the manner of transition to RFRs,
and the ongoing broader acceptance
and use of RFRs across the market,
expose NatWest Group, its clients and
the financial services industry more
widely to risks.
Examples of these risks may include (i)
legal (including litigation) risks relating to
documentation for new and the majority
of existing transactions (including, but
not limited to, changes, lack of changes,
unclear contractual provisions, and
disputes in respect of these); (ii) financial
risks from any changes in valuation of
financial instruments linked to impacted
IBORs that may impact NatWest Group’s
performance, including its cost of funds,
and its risk management related
financial models; (iii) pricing, interest rate
or settlement risks such as changes to
benchmark rates that could impact
pricing, interest rate or settlement
mechanisms in or on certain instruments;
(iv) operational risks due to the
requirement to adapt IT systems, trade
reporting infrastructure and operational
processes, as well as ensuring
compliance with restrictions on new USD
LIBOR usage after December 2021; (v)
conduct and litigation risks arising from
communication regarding the potential
impact on customers, and engagement
with customers during and after the
transition period, or non-acceptance by
customers of replacement rates; and (vi)
different legislative provisions in different
jurisdictions, for example, unlike certain
US states and the EU, the UK has not
provided a clear and robust safe harbour
to protect against litigation and potential
liability arising out of the switch to
‘synthetic LIBOR’.
Notwithstanding all efforts to date, until
the transition away from LIBOR onto
alternative rates has been fully
completed and there is greater
experience of how RFRs are adopted
across different products and customer
groups, it remains difficult to determine
to what extent the changes will affect
NatWest Group, or the costs of
implementing any relevant remedial
action. Uncertainty as to the nature and
extent of such potential changes, the
take up of alternative reference rates, or
other reforms may adversely affect
financial instruments originally
referencing LIBOR as the benchmark.
The implementation of any alternative
RFRs may be impossible or impracticable
under the existing terms of certain
financial instruments and could have an
adverse effect on the value of, return on,
and trading market for, certain financial
instruments and on NatWest Group’s
profitability.
Changes in tax legislation or failure to
generate future taxable profits may
impact the recoverability of certain
deferred tax assets recognised by
NatWest Group.
In accordance with the accounting
policies set out in ‘Critical accounting
policies and key sources of estimation
uncertainty’, NatWest Group has
recognised deferred tax assets on losses
available to relieve future profits from
tax only to the extent it is probable that
they will be recovered. The deferred tax
assets are quantified on the basis of
current tax legislation and accounting
standards and are subject to change in
respect of the future rates of tax or the
rules for computing taxable profits and
offsetting allowable losses.
Failure to generate sufficient future
taxable profits or further changes in tax
legislation (including with respect to
rates of tax) or accounting standards
may reduce the recoverable amount of
the recognised tax loss deferred tax
assets, amounting to £899 million as at
31 December 2021. Changes to the
treatment of certain deferred tax assets
may impact NatWest Group’s capital
position. In addition, NatWest Group’s
interpretation or application of relevant
tax laws may differ from those of the
relevant tax authorities and provisions
are made for potential tax liabilities that
may arise on the basis of the amounts
expected to be paid to tax authorities.
The amounts ultimately paid may differ
materially from the amounts provided
depending on the ultimate resolution of
such matters.

Material contracts
NatWest Group Annual Report and Accounts 2021 427
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The company and its subsidiaries are
party to various contracts in the ordinary
course of business. Material contracts
include the following:
B Share Acquisition and Contingent
Capital Agreement
On 26 November 2009, the company
and HM Treasury entered into the
Acquisition and Contingent Capital
Agreement pursuant to which HM
Treasury subscribed for the initial B
shares and the Dividend Access Share
(the Acquisitions) and agreed the terms
of HM Treasury's contingent subscription
(the Contingent Subscription) for an
additional £8 billion in aggregate in the
form of further B shares (the Contingent
B shares), to be issued on the same
terms as the initial B shares. The
Acquisitions were subject to the
satisfaction of various conditions,
including the company having obtained
the approval of its shareholders in
relation to the Acquisitions.
On 16 December 2013, the company
announced that, having received
approval from the PRA, it had terminated
the £8 billion Contingent Subscription.
The company was able to cancel the
Contingent Subscription as a result of
the actions announced in the second half
of 2013 to further strengthen its capital
position.
On 9 October 2015, the company
announced that on 8 October 2015, it
had received a valid conversion notice
from HM Treasury in respect of all
outstanding B shares held by HM
Treasury. The new ordinary shares
issued on conversion of the B shares
were admitted to the official list of the
UK Listing Authority (UKLA), and to
trading on the London Stock Exchange
plc, on 14 October 2015. Following such
conversion, HM Treasury no longer holds
any B shares.
The company gave certain
representations and warranties to HM
Treasury on the date of the Acquisition
and Contingent Capital Agreement, on
the date the circular was posted to
shareholders, on the first date on which
all of the conditions precedent were
satisfied, or waived, and on the date of
the Acquisitions. The company also
agreed to a number of undertakings.
The company agreed to reimburse HM
Treasury for its expenses incurred in
connection with the Acquisitions.
For as long as it is a substantial
shareholder of the company (within the
meaning of the UKLA’s Listing Rules),
HM Treasury has undertaken not to vote
on related party transaction resolutions
at general meetings and to direct that its
affiliates do not so vote.
Directed Buyback Contract
On 7 February 2019, the company and
HM Treasury entered into the Directed
Buyback Contract to help facilitate the
return of the company to full private
ownership through the use of any excess
capital to buy back the company’s
ordinary shares held by HM Treasury.
Under the terms of the Directed Buyback
Contract, the company may agree with
HM Treasury to make off-market
purchases from time to time of its
ordinary shares held by HM Treasury,
including by way of one or more
standalone purchases, through a non-
discretionary, broker-managed directed
trading programme, or in conjunction
with any offer or sale by HM Treasury by
way of an institutional placing. Neither
the company nor HM Treasury would be
under an obligation to agree to make
such off-market purchases and would
only do so subject to regulatory approval
at the time.
The aggregate number of ordinary
shares which the company may
purchase from HM Treasury under the
Directed Buyback Contract will not
exceed 4.99%. of the company’s issued
share capital and the aggregate
consideration to be paid will not exceed
4.99%. of the company’s market
capitalisation. The price to be paid for
each ordinary share will be the market
price at the time of purchase or, if the
directed buyback is in conjunction with
an institutional placing, the placing price.
Framework and State Aid Deed
As a result of the State Aid granted to
the company, it was required to work
with HM Treasury to submit a State Aid
restructuring plan to the European
Commission (EC), which was then
approved by the EC under the State Aid
rules on 14 December 2009. The
company agreed a series of measures
which supplemented the measures in the
company’s strategic plan.
The company entered into a State Aid
Commitment Deed with HM Treasury at
the time of the initial EC decision and,
following the EC’s approval of
amendments to the restructuring plan in
April 2014, the company entered into a
revised State Aid Commitment Deed with
HM Treasury. In September 2017, the
revised State Aid Commitment Deed was
amended by a Deed of Variation (as so
amended, the “Revised State Aid
Commitment Deed”) following the EC’s
approval of an alternative remedies
package (the “Alternative Remedies
Package”) to replace the company’s final
outstanding commitment under its State
Aid obligations (to divest the business
previously known as Williams & Glyn).
On 25 April 2018, the Revised State Aid
Commitment Deed was replaced by the
Framework and State Aid Deed between
the company, HM Treasury and an
independent body established to
facilitate and oversee the delivery of the
Alternative Remedies Package (the
“Independent Body”). Under the
Framework and State Aid Deed, the
company agrees to do all acts and things
necessary to ensure that HM Treasury is
able to comply with its obligations under
any EC decision approving State Aid to
the company, including under the
Alternative Remedies Package.
Pursuant to the Framework and State
Aid Deed, the company has committed:
(i) £425 million into a fund for eligible
bodies in the UK banking and financial
technology sectors to develop and
improve their capability to compete with
the company in the provision of banking
services to small and medium-sized
enterprises (“SMEs”) and develop and
improve the financial products and
services available to SMEs (the
“Capability and Innovation Fund”); and
(ii) £275 million to eligible bodies to help
them incentivise SME banking customers
within the division of the company
previously known as Williams & Glyn to
switch their business current accounts
and loans to the eligible bodies (the
“Incentivised Switching Scheme”). The
company has also agreed to set aside up
to a further £75 million in funding to
cover certain costs customers may incur
as a result of switching under the
Incentivised Switching Scheme. In
addition, under the terms of the
Alternative Remedies Package, should
the uptake within the Incentivised
Switching Scheme not be sufficient, the
company may be required to make a
further contribution, capped at £50
million. The Independent Body will
distribute funds from the Capability and
Innovation Fund and implement the
Incentivised Switching Scheme.
Under the Framework and State Aid
Deed, the company also agreed to
indemnify the Independent Body and HM
Treasury, up to an amount of £320
million collectively to cover liabilities that
may be incurred in implementing the
Alternative Remedies Package. The
provisions of the indemnity to the
Independent Body are set out in the
Framework and State Aid Deed and the
provisions of the indemnity to HM
Treasury are set out in a separate
agreement between the company and
HM Treasury, described under “Deed of
Indemnity” below.

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The Framework and State Aid Deed also
provides that if the EC adopts a decision
that the UK Government must recover
any State Aid (a "Repayment Decision")
and the recovery order of the
Repayment Decision has not been
annulled or suspended by the General
Court or the European Court of Justice,
then the company must repay HM
Treasury any aid ordered to be
recovered under the Repayment
Decision.
Deed of Indemnity
In the context of the Framework and
State Aid Deed, the company entered
into a Deed of Indemnity with HM
Treasury on 25 April 2018, pursuant to
which the company agreed to indemnify
HM Treasury to cover liabilities that may
be incurred in implementing the
Alternative Remedies Package, as
described under “Framework and State
Aid Deed” above .
Trust Deed
In the context of the Framework and
State Aid Deed, the company entered
into a Trust Deed with the Independent
Body on 25 April 2018, to set up a trust
to administer the funds committed by the
company under the Framework and
State Aid Deed for the Alternative
Remedies Package.
State Aid Costs Reimbursement Deed
Under the 2009 State Aid Costs
Reimbursement Deed, the company has
agreed to reimburse HM Treasury for
fees, costs and expenses associated with
the State Aid and State Aid approval.
HMT and UKFI Relationship Deed
On 7 November 2014, in order to comply
with an amendment to the UK Listing
Rules, the company entered into a
Relationship Deed with HM Treasury and
UK Financial Investments Limited in
relation to the company’s obligations
under the UK Listing Rules to put in place
an agreement with any controlling
shareholder (as defined for these
purposes in the Listing Rules). The
Relationship Deed covers the three
independence provisions mandated by
the Listing Rules: (i) that contracts
between the company and HM Treasury
(or any of its subsidiaries) will be arm's
length and normal commercial
arrangements, (ii) that neither HM
Treasury nor any of its associates will
take any action that would have the
effect of preventing the company from
complying with its obligations under the
Listing Rules; and (iii) neither HM
Treasury nor any of its associates will
propose or procure the proposal of a
shareholder resolution which is intended
or appears to be intended to circumvent
the proper application of the Listing
Rules.
Memorandum of Understanding
Relating to The Royal Bank of Scotland
Group Pension Fund
On 16 April 2018 the company entered
into a Memorandum of Understanding
(the ”MoU”) with the trustee of The
Royal Bank of Scotland Group Pension
Fund (the ”Group Fund”), which aimed to
facilitate both the necessary changes to
the Main Section of the Group Fund to
align the employing entity structure with
the requirements of the UK ring-fencing
legislation and acceleration of the
settlement framework for the 31
December 2017 triennial valuation of the
Main Section of the Group Fund (brought
forward from 31 December 2018).
In addition, the MoU also provided clarity
on the additional related funding
contributions required to be made by the
company to the Main Section of the
Group Fund as follows: (i) a pre-tax
payment of £2 billion that was made in
the second half of 2018 and (ii) from 1
January 2020, further pre-tax
contributions of up to £1.5 billion in
aggregate linked to the making of future
distributions to RBS shareholders
including ordinary and special dividends
and/or share buy backs (subject to an
annual cap on contributions of £500
million before tax).
On 28 September 2018, the
implementation of the MoU was
documented through a Framework
Agreement entered into between the
company and the trustee of the Group
Fund .

NatWest Group Annual Report and Accounts 2021 429
Additional
information
429 Additional information
430 Financial calendar
430 Shareholder enquiries
431 Analysis of ordinary shareholders
431 Important addresses
432 Principal offices
433 Forward-looking statements
434 Presentation of information

Shareholder information
NatWest Group Annual Report and Accounts 2021 430
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financ
ial review
Financial calendar
Dividends
Payment dates
Cumulative preference
shares
31 May and 30 December 2022
Non-cumulative preference
shares
31 March, 30 June, 30
September and 30 December
2022
Ordinary shares (2021 final) 4 May 2022
Ex
-
dividend date
Cumulative preference
shares
5 May and 1 December 2022
Ordinary shares (2021 final) 17 March 2022
Record date
Cumulative preference
shares
6 May and 2 December 2022
Ordinary shares (2021 final) 18 March 2022
Annual General Meeting
28 April 2022
Interim results
29 July 2022
Shareholder enquiries
You can check your shareholdings in the company by visiting
the Shareholder Hub section of our website at
natwestgroup.com and clicking the ‘Access your shareholding
online’ tab. You will need the shareholder reference number
printed on your share certificate or dividend confirmation
statement to access this information. You can also view any
outstanding payments, update bank account and address
details and download various forms.
NatWest Group is committed to reducing its impact on the
environment. You can choose to receive your shareholder
communications electronically via the ‘Sign up for e-comms’
tab and you will receive an email notification when documents
become available to view on our website.
You can also check your shareholding by contacting our
Registrar:
Braille and audio Strategic report with additional
information
Shareholders requiring a Braille or audio version of the
Strategic report with additional information should contact the
Registrar on +44 (0)370 702 0135.
ShareGift
The company is aware that shareholders who hold a small
number of shares may be retaining these shares because
dealing costs make it uneconomical to dispose of them.
ShareGift is a free charity share donation service operated by
The Orr Mackintosh Foundation (registered charity 1052686) to
enable shareholders to donate shares to charity.
If you are a UK taxpayer, donating your shares in this way will
not give rise to either a gain or a loss for UK capital gains tax
purposes. You may be able to claim UK income tax relief on
gifted shares and can do so in various ways. Further
information can be obtained from HM Revenue & Customs.
Should you wish to donate your shares to charity please
contact ShareGift for further information:
Share and bond scams
Scammers will request money upfront, as a bond or other form
of security, but victims are often left out of pocket, sometimes
losing their savings or even their family home. Even seasoned
investors have been caught out by scams.
Clone firms
A ‘clone firm’ uses the name, firm registration number (FRN)
and address of a firm or individual who is FCA authorised. The
scammer may claim that the genuine firm's contact details on
the FCA Register (Register) are out of date and then use their
own details, or copy the website of an authorised firm, making
subtle changes such as the phone number. They may claim to
be an overseas firm, which won’t always have full contact and
website details listed on the Register.
Share and bond scams are often run from ‘boiler rooms’ where
fraudsters cold-call investors, offering them worthless,
overpriced or even non-existent shares or bonds. They use
increasingly sophisticated tactics to approach investors,
offering to buy or sell shares, often pressuring investors to
make a quick decision or miss out on the deal. Contact can also
be in the form of email, post or word of mouth. Scams are
sometimes advertised in newspapers, magazines or online as
genuine investment opportunities and may offer free gifts or
discounts on dealing charges.
ShareGift, The Orr Mackintosh Foundation, 4th Floor Rear,
67/68 Jermyn Street, London SW1Y 6NY, Telephone: +44 (0)20
7930 3737, Website: sharegift.org
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: +44 (0)370 702 0135
Fax: +44 (0)370 703 6009
Website: www-uk.computershare.com/investor/contactus

Shareholder information continued
NatWest Group Annual Report and Accounts 2021 431
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
How to protect yourself
Always be wary if you’re contacted out of the blue, pressured
to invest quickly, or promised returns that sound too good to be
true. FCA authorised firms are unlikely to contact you
unexpectedly with an offer to buy or sell shares or bonds.
It is strongly advised that you seek independent professional
advice before making any investment.
Report a scam
If you suspect that you have been approached by fraudsters, or
have any concerns about a potential scam, report this to the
FCA by contacting their Consumer Helpline on 0800 111 6768
or by using their reporting form which can be found on their
website.
If you have already invested in a scam, fraudsters are likely to
target you again or sell your details to other criminals. The
follow-up scam may be completely separate, or may be related
to the previous scam in the form of an offer to get your money
back or buy back the investment on payment of a fee.
Analysis of ordinary shareholders
At 31 December 2021 Shareholdings
Number
%
of shares
- millions
Individuals
172,365 96,720,657 0.84
Banks and nominee companies 3,749 5,347,209,748 46.63
Investment trusts 40 335,083 —
Insurance companies
3 487,631 —
Other companies
433 26,797,269 0.24
Pension trusts
20 33,956 —
Other corporate bodies
68 5,996,398,291 52.29
176,678 11,467,982,635 100.00
Range of shareholdings:
1 - 1,000
152,553 36,685,708 0.32
1,001 - 10,000
22,253 51,255,478 0.45
10,001 - 100,000
993 30,052,411 0.26
100,001
-
1,000,000
520 185,638,204 1.62
1,000,001 - 10,000,000 272 923,070,585 8.05
10,000,001 and over
87 10,241,280,249 89.30
176,678 11,467,982,635 100.00
Important addresses
Shareholder enquiries
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: +44 (0)370 702 0135
Facsimile: +44 (0)370 703 6009
Website: www-uk.computershare.com/investor/contactus
ADR Depositary Bank
BNY Mellon Shareowner Services
PO Box 505000
Louisville, KY 40233-5000
Direct Mailing for overnight packages:
BNY Mellon Shareowner Services
462 South 4th Street
Suite 1600
Louisville KY 40202
Corporate, Governance
NatWest Group plc
PO Box 1000, Gogarburn
Edinburgh, EH12 1HQ
Telephone: 0131 556 8555
Investor Relations
250 Bishopsgate, London
EC2M 4AA, England
Registered office
36 St Andrew Square
Edinburgh, EH2 2YB
Telephone: 0131 556 8555
Registered in Scotland No. SC45551
Website
natwestgroup.com
Telephone: +44 (0)131 556 8555
Email: investor.relations@ natwest.com
Telephone: 1-888-269-2377 (US callers – toll free)
Telephone: +1 201 680 6825 (International)
Email: shrrelations@ cpushareownerservices.com
Website: mybnymdr.com
Ask for their (FRN) and contact details and then contact them
using the telephone number on the Register. Never use a link in
an email or website from the firm offering you an investment.
Please do not give any personal details to any caller unless you
are certain that they are genuine. Check the Register to ensure
the firm contacting you is authorised and also check the FCA’s
Warning List of firms to avoid at fca.org.uk/scamsmart.
Find out more at fca.org.uk/consumers

Shareholder information continued
NatWest Group Annual Report and Accounts 2021 432
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Principal offices
NatWest Group plc
PO Box 1000, Gogarburn
Edinburgh, EH12 1HQ
NatWest Markets Plc
250 Bishopsgate, London
EC2M 4AA, England
The Royal Bank of Scotland plc
PO Box 1000, Gogarburn
Edinburgh, EH12 1HQ
250 Bishopsgate, London
EC2M 4AA, England
National Westminster Bank Plc
250 Bishopsgate, London
EC2M 4AA, England
Ulster Bank Limited
11-16 Donegall Square East, Belfast, Co Antrim, BT1 5UB,
Northern Ireland
Ulster Bank Ireland DAC
Ulster Bank Head Office, Block B, Central Park, Leopardstown,
Dublin 18, D18 N153
NatWest Markets Group Holdings Corp.
251, Little Falls Drive, Wilmington
Delaware, 19808
Coutts & Company
440 Strand, London
WC2R 0QS, England
The Royal Bank of Scotland International Limited
Royal Bank House, 71 Bath Street
St Helier, JE4 8PJ

Presentation of information
NatWest Group Annual Report and Accounts 2021 433
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
In the Annual Report and Accounts, unless specified otherwise, ‘parent company’ refers to NatWest Group plc, and ‘NatWest
Group’, ‘Group’ or ‘we’ refers to NatWest Group plc and its subsidiaries. The term ‘NWH Group’ refers to NatWest Holdings Limited
(‘NWH’) and its subsidiary and associated undertakings. The term ‘NWM Group’ refers to NatWest Markets Plc (‘NWM Plc’) and its
subsidiary and associated undertakings. The term ‘NWM N.V.’ refers to NatWest Markets N.V. The term ‘NWMSI’ refers to NatWest
Markets Securities, Inc. The term ‘RBS plc’ refers to The Royal Bank of Scotland plc. The term ‘NWB Plc’ refers to National
Westminster Bank Plc. The term ‘UBIDAC’ refers to Ulster Bank Ireland DAC. The term ‘RBSI Limited’ refers to The Royal Bank of
Scotland International Limited. ‘Go-forward group’ excludes Ulster Bank RoI and discontinued operations.
NatWest Group publishes its financial statements in pounds sterling (‘£’ or ‘sterling’). The abbreviations ‘£m’ and ‘£bn’ represent
millions and thousands of millions of pounds sterling (‘GBP’), respectively, and references to ‘pence’ represent pence where
amounts are denominated in pounds sterling. Reference to ‘dollars’ or ‘$’ are to United States of America (‘US’) dollars. The
abbreviations ‘$m’ and ‘$bn’ represent millions and thousands of millions of dollars, respectively. The abbreviation ‘€’ represents
the ‘euro’, and the abbreviations ‘€m’ and ‘€bn’ represent millions and thousands of millions of euros, respectively.

Forward looking statements
NatWest Group Annual Report and Accounts 2021 434
Financial statements
Strategic report
Governance
Risk and capital management
Additional information
Financial review
Cautionary statement regarding forward-looking statements
Certain sections in this document contain ‘forward-looking statements’ as that term is defined in the United States Private Securities
Litigation Reform Act of 1995, such as statements that include the words ‘expect’, ‘estimate’, ‘project’, ‘anticipate’, ‘commit’, ‘believe’,
‘should’, ‘intend’, ‘will’, ‘plan’, ‘could’, ‘probability’, ‘risk’, ‘Value-at-Risk (VaR)’, ‘target’, ‘goal’, ‘objective’, ‘may’, ‘endeavour’, ‘outlook’,
‘optimistic’, ‘prospects’ and similar expressions or variations on these expressions. In particular, this document includes forward-looking
targets and guidance relating to financial performance measures, such as income growth, operating expense, cost reductions, RoTE, ROE,
discretionary capital distribution targets, impairment loss rates, balance sheet reduction, including the reduction of RWAs, CET1 ratio (and
key drivers of the CET1 ratio including timing, impact and details), Pillar 2 and other regulatory buffer requirements and MREL and non-
financial performance measures, such as climate and ESG-related performance ambitions, targets and metrics, including in relation to
initiatives to transition to a net zero economy, Climate and Sustainable Funding and Financing (CSFF) and financed emissions. In addition,
this document includes forward-looking statements relating, but not limited to: the COVID-19 pandemic and its impact on NatWest Group;
planned cost reductions, disposal losses and strategic costs; implementation of NatWest Group’s purpose-led strategy and other strategic
priorities (including in relation to: its phased withdrawal from ROI, the NWM Refocusing and investment programmes relating to digital
transformation of its operations and services and inorganic opportunities); the timing and outcome of litigation and government and
regulatory investigations; direct and on-market buy-backs; funding plans and credit risk profile; managing its capital position; liquidity ratio;
portfolios; net interest margin and drivers related thereto; lending and income growth, product share and growth in target segments;
impairments and write-downs, including with respect to goodwill; restructuring and remediation costs and charges; NatWest Group’s
exposure to political risk, economic assumptions and risk, climate, environmental and sustainability risk, operational risk, conduct risk,
financial crime risk, cyber, data and IT risk and credit rating risk and to various types of market risk, including interest rate risk, foreign
exchange rate risk and commodity and equity price risk; customer experience, including our Net Promotor Score (NPS); employee
engagement and gender balance in leadership positions.
Limitations inherent to forward-looking statements
These statements are based on current plans, expectations, estimates, targets and projections, and are subject to significant inherent risks,
uncertainties and other factors, both external and relating to NatWest Group’s strategy or operations, which may result in NatWest Group
being unable to achieve the current plans, expectations, estimates, targets, projections and other anticipated outcomes expressed or
implied by such forward-looking statements. In addition, certain of these disclosures are dependent on choices relying on key model
characteristics and assumptions and are subject to various limitations, including assumptions and estimates made by management. By their
nature, certain of these disclosures are only estimates and, as a result, actual future results, gains or losses could differ materially from
those that have been estimated. Accordingly, undue reliance should not be placed on these statements. The forward-looking statements
contained in this document speak only as of the date we make them and we expressly disclaim any obligation or undertaking to update or
revise any forward-looking statements contained herein, whether to reflect any change in our expectations with regard thereto, any
change in events, conditions or circumstances on which any such statement is based, or otherwise, except to the extent legally required.
Important factors that could affect the actual outcome of the forward-looking statements
We caution you that a large number of important factors could adversely affect our results or our ability to implement our strategy, cause
us to fail to meet our targets, predictions, expectations and other anticipated outcomes or affect the accuracy of forward-looking
statements described in this document. These factors include, but are not limited to, those set forth in the risk factors and the other
uncertainties described in NatWest Group plc’s Annual Report on Form 20-F and its other filings with the US Securities and Exchange
Commission. The principal risks and uncertainties that could adversely NatWest Group’s future results, its financial condition and prospects
and cause them to be materially different from what is forecast or expected, include, but are not limited to: economic and political risk
(including in respect of: the impact of the COVID-19 pandemic on NatWest Group and its customers; political and economic risks and
uncertainty in the UK and global markets; uncertainty regarding the effects of Brexit; changes in interest rates and foreign currency
exchange rates; and HM Treasury’s ownership of NatWest Group plc); strategic risk (including in respect of the implementation of NatWest
Group’s purpose-led Strategy; refocusing of its NWM franchise; and the effect of the COVID-19 pandemic on NatWest Group’s strategic
objectives and targets); financial resilience risk (including in respect of: NatWest Group’s ability to meet targets and to make discretionary
capital distributions; the competitive environment; impact of the COVID-19 pandemic on the credit quality of NatWest Group’s
counterparties; counterparty and borrower risk; prudential regulatory requirements for capital and MREL; the adequacy of NatWest
Group’s resolution plans; liquidity and funding risks; changes in the credit ratings; the requirements of regulatory stress tests; goodwill
impairment; model risk; sensitivity to accounting policies, judgments, assumptions and estimates; changes in applicable accounting
standards; the value or effectiveness of credit protection; and the application of UK statutory stabilisation or resolution powers); climate
and sustainability risk (including in respect of: risks relating to climate change and the transitioning to a net zero economy; the
implementation of NatWest Group’s climate change strategy and climate change resilient systems, controls and procedures; climate-related
data and model risk; the failure to adapt to emerging climate, environmental and sustainability risks and opportunities; changes in ESG
ratings; increasing levels of climate, environmental and sustainability related regulation and oversight; and climate, environmental and
sustainability-related litigation, enforcement proceedings and investigations); operational and IT resilience risk (including in respect of:
operational risks (including reliance on third party suppliers); cyberattacks; the accuracy and effective use of data; complex IT systems
(including those that enable remote working); attracting, retaining and developing senior management and skilled personnel; NatWest
Group’s risk management framework; and reputational risk); and legal, regulatory and conduct risk (including in respect of: the impact of
substantial regulation and oversight; compliance with regulatory requirements; the outcome of legal, regulatory and governmental actions
and investigations; the transition of LIBOR other IBOR rates to alternative risk-free rates; and changes in tax legislation or failure to
generate future taxable profits).
Caution about climate and sustainable funding and financing (CSFF) information.
Climate and ESG disclosures in this report use a greater number and level of judgments, assumptions and estimates, including with respect
to the classification of climate and sustainable funding and financing activities, than our reporting of historical financial information. These
judgments, assumptions and estimates are highly likely to change over time, and, when coupled with the longer time frames used in these
disclosures, make any assessment of materiality inherently uncertain. In addition, our climate risk analysis and net zero strategy remain
under development, and the data underlying our analysis and strategy remain subject to evolution over time. As a result, we expect that
certain climate and ESG disclosures made in this report are likely to be amended, updated, recalculated or restated in the future. This
forward-looking statement should be read together with the ‘Climate-related and other forward-looking statements and metrics’ of the
NatWest Group 2021 Climate-related Disclosures Report.
The information, statements and opinions contained in this document do not constitute a public offer under any applicable legislation or an
offer to sell or a solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such
securities or other financial instruments.

NatWest Group plc
36 St Andrew Square
Edinburgh, EH2 2YB
www.natwestgroup.com
NatWest Group plc
2021 Annual Report and Accounts
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