Oct 30, 2026 earnings call — Strong loan and deposit growth; stable margins
Customer assets and liabilities grew 14.2% this quarter, driven by GBP 8.1 billion loan growth and GBP 5.8 billion deposit growth.
Revenue $6.2B (est $6.2B) · EPS $0.52 (est $0.51)
Key quotes
"Customer assets and liabilities grew 14.2%, well above our target of more than 4%."
"We continue to expect income from the structural hedge to be more than GBP 1 billion higher in 2027 versus 2026."
"We can confirm today that our Pillar 2A requirements will be reduced by 76 basis points as of January 1, including Basel 3.1 offsets."
Analyst Q&A 12
funding and capital buffers
Q (Alvaro · Morgan Stanley): Analyst asked how loan growth will be funded, whether deposit competition will reduce NII upside, and whether changes to buffers give extra capital flexibility.
A: Management said they expect continued strong customer balance growth supporting NII and other income. They expect structural hedge income to be more than GBP 1 billion higher in 2027 versus 2026, and they currently expect margins to be broadly stable with bank rate at 4% for 2027. They noted the Pillar 2A reduction was taken into account when setting the around 13% CET1 target and will await the next Financial Stability Report.
"Secondly, we continue to expect income from the structural hedge to be more than GBP 1 billion higher in 2027 versus 2026." — Katie Murray (CFO)
NIM, one-off income, mortgages
Q (Benjamin Toms · RBC): Analyst asked whether NIM stability is versus Q4 exit, to quantify a one-off other income gain, and about mortgage growth and the impact of the Your First Home scheme.
A: Management said they expect NIM to be sequentially flat into 2027 and reiterated assumptions including 4% bank rate and swap averaging 4%. They quantified the one-off other income as the sale of their Mentor business and described it as in the tens of millions. On mortgages, they reported continued net growth, stable market share, healthy pipeline, and expect mortgage book margin to settle around 60 basis points for the year.
"In terms of the one-off in terms of income, it was the sale of our Mentor business." — Katie Murray (CFO)
capital buffers and rates sensitivity
Q (Chris Cant · Autonomous): Analyst asked how the firm thinks about management buffer given O-SII releasability and whether international regulatory changes matter, and whether their rate sensitivities remain reasonable given market moves.
A: Management said buffer usability is relevant only in systemic stress and they manage for both systemic and idiosyncratic stress, and that their supervisory minimum fell to 11.1%. They listed four areas to consider for competitiveness: countercyclical buffer, cumulative domestic capitalization, risk weights (example mortgages), and output floors. On rates, they said their point-in-time sensitivity is reasonable, highlighted reinvestment at 4.2% in 2026, and advised analysts can take their own view of market moves.
"The buffer usability is relevant in systemic stress rather than idiosyncratic stress, and we obviously manage for both." — Katie Murray (CFO)
asset quality and income pace
Q (Benjamin Caven-Roberts · Goldman Sachs International): Analyst asked about the expected pace of income growth in 2027 versus 2026 and for details on current asset quality and rate impacts.
A: Management said the loan book is diversified and prime, with no significant stress areas across businesses. They explained the quarter's impairment charge of GBP 277 million was up from GBP 140 million in Q2 due to non-repeating Q2 releases, making Q3 a more normalized charge and consistent with their 20-30 basis points through-the-cycle guidance. On income pacing, they reiterated that average interest-earning assets growth will align more closely with loan growth, supporting stable NIM.
"The impairment charge for the quarter, GBP 277 million, up from GBP 140 million in Q2." — Katie Murray (CFO)
liquidity floor and corporate lending
Q (Sheel Shah · JPMorgan): Analyst asked where LCR could bottom out, how they would defend it and whether defending it affects margins, and asked about sustainability and pricing pressure in corporate lending.
A: Management said reported LCR was 137% and they will keep a buffer above the 100% minimum, while having broad funding options and no constraint to loan growth. They said corporate lending momentum is broad-based across sectors and sustainable, driven by structural trends like digitization and decarbonization, and they are not seeing new material margin pressure in mid-market lending. They noted the ring-fenced bank holds most deposits and the non-ring-fenced banks are predominantly wholesale funded, giving flexibility.
"Whilst you would expect us to maintain a buffer over the minimum requirements of 100%, we do remain comfortably above that, and we have a broad range of funding options that are available to us." — Katie Murray (CFO)
Q4 NIM and loan growth outlook
Q (Aman Rakkar · Barclays): Analyst asked for tighter Q4 NIM expectations, the sequential drivers by lending, deposit and funding, and whether average interest-earning assets will track loan growth if loan growth stays high.
A: Management said they had previously guided NIM would be flatter in H2 and would not give more precision, focusing on returns rather than a NIM point. They confirmed average interest-earning assets growth should be very much in line with loan growth going forward. Management expressed confidence in the sustainability of lending growth, citing track record and strong pipelines in corporate and mortgage businesses.
"Growth in average interest-earning assets should now be kind of very much in line with our loan growth." — Katie Murray (CFO)
lending margin and costs
Q (Guy Stebbings · BNP Paribas): Analyst asked whether lending margin compression should step down after Q3 and how to think about the Q4 cost step-up and whether investment was pulled forward into 2026.
A: Management said the EIR headwind in lending is not repeating and that mortgage repricing ends in Q4, so further margin moves depend on mix, with mortgages dilutive and CMM helpful. On costs they confirmed guidance of GBP 8.5 billion for the year and that a natural step-up in Q4 occurs due to items like bank levies. They said they continue to see efficiency gains and remain confident in meeting 2028 cost targets.
"There is a natural step-up that happens in Q4, with bank levies." — Katie Murray (CFO)
capital generation and returns
Q (Ed Firth · KBW): Analyst asked how to think about profitability and growth going forward given flat margins, higher capital and normalized impairments, and whether capital reductions would just benefit customers.
A: Management said NatWest can be a structural winner by taking share across businesses, driving cost efficiency, and maintaining resilience under stress, which together support superior returns. They highlighted strong capital generation this year: 280 basis points generated from profit so far, with some reinvested and some supporting organic growth, and they will await the FSR before taking stock on further capital policy. They framed capital strength as enabling distributions and continued investment to grow the franchises.
"If we look at what we've done this year, so far, 280 basis points of capital generated from profit." — Katie Murray (CFO)
pass-through and hedge outlook
Q (Amit Goel · Mediobanca): Analyst asked what pass-through is assumed for new easy access products relative to the 60% sensitivity and whether NIM should widen in 2028 as mix settles.
A: Management told the analyst to use the 60% pass-through sensitivity they provide as the working assumption. They said mortgage repricing will correct this year and book margins will settle around 60 basis points, and that the structural hedge will continue to add income at growing levels into 2027 and 2028, with an expected increment of over GBP 1 billion in 2027. They declined to give more precise NIM guidance, saying they do not manage to a NIM point.
"The sensitivity we give you on 60 is a 60% pass-through." — Katie Murray (CFO)
AIEA growth vs margin offset
Q (Perlie Mong · BofA): Analyst asked whether Q4 AIEA growth plus loan growth in 2027 offsets margin reductions so NII need not change much, whether hedge benefit goes to customers, and impact if deposit competition rises.
A: Management reiterated they will not be more precise now and that the key message is growth will drive income, supported by returns and the structural hedge embedded in that outlook. They said they see the hedge continuing to be a positive as they move forward and will discuss 2027 in more detail in February. They remain confident in ability to grow income through balance sheet growth while being thoughtful about competing on deposit pricing.
"We see it continuing to be a positive as we move forward from here, and I guess we look forward to talking more about 2027 when we meet again in February." — Katie Murray (CFO)
why AIEA to match loan growth
Q (Rob Noble · Deutsche Bank): Analyst asked why liquid assets will grow at the same rate as loans instead of running down surplus cash and whether they will need to issue wholesale funding to support growth.
A: Management said they have used surplus deposits and will start to issue more wholesale funding to support loan growth, so both sides of the balance sheet will grow. They noted they have low wholesale issuance to date and significant capacity, and emphasized the need to ensure wholesale issuance is reflected in appropriate lending returns. They expect average interest-earning assets to grow as funding is issued to support lending growth.
"We have used the surplus of the surplus deposits, and what you will see happening is that we will start to issue more wholesale funding to support loan growth." — Katie Murray (CFO)
asset and deposit mix impact on NIM
Q (Andrew Coombs · Citi): Analyst asked how growing C&I (CIB) affects mix and margins and whether that changes through-the-cycle cost of risk, and whether recent deposit growth in term balances is a trend or a behavioral one.
A: Management pointed to slide 30 showing average yield rose 11 basis points and average cost up 10 basis points in the quarter, driven by higher rates and the structural hedge, with retail deposit rates rising modestly. They said deposit growth in the quarter was split roughly 50/50 between retail and C&I, including non-interest-bearing balances and term across businesses, and that mix has not materially changed. They reiterated they will be thoughtful about where to compete on deposit pricing and that higher swap rates also increase structural hedge income as a natural offset.
"If you look there, your average yield increased 11 basis points in the quarter, while the average cost was up 10 basis points." — Katie Murray (CFO)