DJ NatWest Markets Plc Annual Report 2025
NatWest Markets Plc / Key word(s): Annual Results NatWest Markets Plc Annual Report 2025 2026-02-13 / 08:00 CET/CEST =———————————————————————————————————————- NatWest Markets Plc 13 February 2026 Annual Report and Accounts 2025 Pillar 3 Report 2025 A copy of the Annual Report and Accounts 2025 for NatWest Markets Plc will shortly be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The document will be available on NatWest Group plc’s website at https://investors.natwestgroup.com/reports-archive We have also published the 2025 Pillar 3 report, available on our website. For further information, please contact: Media Relations +44 (0) 131 523 4205 Investor relations Paul Pybus NatWest Markets Plc +44 (0) 207 085 6448 For the purpose of compliance with the Disclosure Guidance and Transparency Rules, this announcement also contains risk factors extracted from the Annual Report and Accounts 2025 in full unedited text. Page references in the text refer to page numbers in the Annual Report and Accounts 2025. Principal Risks and Uncertainties Set out below are certain risk factors that could have a material adverse effect on NWM Group’s future results, its financial condition, and/or prospects, and cause them to be materially different from what is forecast or expected, and directly or indirectly impact the value of its securities. These risk factors are broadly categorised and should be read in conjunction with other risk factors in this section and other parts 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 NWM Group. Economic and political risk NWM Group, its customers and its counterparties face continued economic and political risks and uncertainties in the UK and global markets, including as a result of inflation and interest rates, supply chain disruption, protectionist policies, and geopolitical developments. NWM Group is affected by global economic and market conditions and is particularly exposed to those conditions in the UK. Uncertain and volatile economic conditions in the UK or globally can create a challenging operating environment for financial services companies such as NWM Group. The outlook for the UK and the global economy is affected by many dynamic factors including: GDP, unemployment, inflation and interest rates, asset prices (including residential and commercial property), energy prices, monetary and fiscal policy (such as increases in bank taxes), supply chain disruption, protectionist policies or trade barriers (including tariffs). Economic and market conditions could be exacerbated by a number of factors including: instability in the UK and/or global financial systems, market volatility and change, fluctuations in the value of the pound sterling, new or extended economic sanctions, volatility in commodity prices, political uncertainty or instability, concerns regarding sovereign debt (including sovereign credit ratings), any lack or perceived lack of creditworthiness of a counterparty or borrower that may trigger market-wide liquidity problems, changing demographics in the markets that NWM Group and its customers serve, rapid changes to the economic environment due to the adoption of technology, digitisation, automation, artificial intelligence, or due to the consequences of climate change, biodiversity loss, environmental degradation, and widening social and economic inequalities. NWM Group is also exposed to risks arising out of geopolitical events or political developments that may hinder economic or financial activity levels and may, directly or indirectly, impact UK, regional or global trade and/or NWM Group’s customers and counterparties. NWM Group’s business and performance could be negatively affected by political, military or diplomatic events, geopolitical tensions, armed conflict (for example, the Russia-Ukraine conflict and Middle East conflicts), terrorist acts or threats (including to critical infrastructures), more severe and frequent extreme weather events, widespread public health crises, and the responses to any of the above scenarios by various governments and markets. NWM Group may face political uncertainty in Scotland if there is another Scottish independence referendum. Scottish independence may adversely affect NWM Group plc both in relation to its entities incorporated in Scotland and in other jurisdictions. Any changes to Scotland’s relationship with the UK or the EU may adversely affect the environment in which NatWest Group plc and its subsidiaries operate and may require further changes to NatWest Group (including NWM Group’s structure), independently or in conjunction with other mandatory or strategic structural and organisational changes, any of which could adversely affect NWM Group. The value of NWM Group’s own and other securities may be materially affected by market risk (including as a result of market fluctuations). Market volatility, illiquid market conditions and disruptions in the financial markets may make it very difficult to value certain of NWM Group’s own and other securities, particularly during periods of market displacement. This could cause a decline in the value of NWM Group’s own and other securities, or inaccurate carrying values for certain financial instruments. Similarly, NWM Group trades a considerable amount of financial instruments (including derivatives) and volatile market conditions could result in a significant decline in NWM Group’s net trading income or result in a trading loss. In addition, financial markets are susceptible to severe events evidenced by, or resulting in, 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 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 often automatically) and on a large scale, increasing NWM Group’s counterparty risk. NWM Group’s risk management and monitoring processes seek to quantify and mitigate NWM Group’s exposure to extreme market moves. However, market events have historically been difficult to predict, and NWM Group, its customers and its counterparties could realise significant losses if severe market events were to occur. Any of the above may have a material adverse effect on NWM Group’s future results, financial condition, prospects, and/ or reputation. Fluctuations in currency exchange rates may adversely affect NWM Group’s results and financial condition. Decisions of central banks (including the Bank of England (‘BoE’), the European Central Bank (‘ECB’), and the US Federal Reserve) and political or market events which are outside NWM Group’s control, may lead to unexpected fluctuations in currency exchange rates. Although NWM Group is principally a UK-focused banking group, it is subject to structural foreign exchange risk from capital deployed in NWM Group and its foreign subsidiaries and branches. NWM Group also issues instruments in non-sterling currencies, such as USD, that assist in meeting NWM Group’s regulatory requirements. In addition, NWM Group conducts banking activity in non-sterling currencies (for example, loans, deposits and dealing activity) which affect its revenue. NWM Group also uses service providers based outside the UK for certain services and as a result certain operating expenses are subject to fluctuations in currency exchange rate. NWM Group maintains policies and procedures designed to manage the impact of its exposure to fluctuations in currency exchange rates. Nevertheless, changes in currency exchange rates, particularly in the sterling-US dollar and sterling-euro rates, may adversely affect various accounting and financial metrics including the value of assets, liabilities (including the total amount of instruments eligible to contribute towards the minimum requirement for own funds and eligible liabilities (‘MREL’)), income and expenses, RWAs and hence the reported earnings and financial condition of NWM Group. Any of the above may have a material adverse effect on NWM Group’s future results, financial condition, prospects, and/ or reputation. Changes in interest rates will continue to affect NWM Group’s business and results. NWM Group’s performance is affected by changes in interest rates. Benchmark overnight interest rates, such as the UK base rate, decreased in 2025. Forward rates imply UK short term interest rates, including the UK base rate, will continue to decline in 2026, while they anticipate longer term swap rates, such as the GBP 5 and 10-year swap rates, will rise slightly across 2026. Stable interest rates support more predictable income flow and less volatility in asset and liability valuations, although persistently low and negative interest rates may adversely affect NWM Group. Further, volatility in interest rates may result in unexpected outcomes both for interest income and asset and liability valuations which may adversely affect NWM Group. For example, decreases in key benchmark rates such as the UK base rate may adversely affect NWM Group’s net interest margin, and unexpected movements in spreads between key benchmark rates such as sovereign and swap rates may, in turn, affect liquidity portfolio valuations. In addition, unexpected sharp rises in rates may also have negative impacts on some asset and derivative valuations.
(MORE TO FOLLOW) Dow Jones Newswires
February 13, 2026 02:00 ET (07:00 GMT)
DJ NatWest Markets Plc Annual Report 2025 -2-
Moreover, customer and investor responses to rapid changes in interest rates can have an adverse effect on NWM Group. For example, customers may make deposit choices that provide them with higher returns than those being offered by NWM Group. Alternatively, NWM Group may not respond with competitive products as rapidly, for example following an interest rate change which may in turn decrease NWM Group’s net interest income. Movements in interest rates also influence and reflect the macroeconomic situation more broadly, affecting factors such as business and consumer confidence, property prices, default rates on loans, customer behaviour (which may adversely impact the effectiveness of NWM Group’s hedging strategy), and other indicators that may indirectly affect NWM Group. Any of the above may have a material adverse effect on NWM Group’s future results, financial condition, prospects, and/ or reputation. Business change and execution risk NWM Group has been in a period of, and may continue to be subject to, significant structural and other change. As part of NatWest Group’s strategy (including the strategic priorities of disciplined growth, leveraging simplification and active balance sheet and risk management), NWM Group’s own strategy has evolved to mostly focus on serving NatWest Group’s corporate and institutional customer base via the creation of NatWest Group’s C&I business segment. NatWest Group plc reports NWM Group’s results under the C&I operating segment structure, although NWM Plc continues to also report on a standalone legal entity basis. The C&I business segment was created to promote closer operational and strategic alignment to support NatWest Group growth, with more integrated services to customers across NatWest Group entities, within and outside the ring-fenced banks with the potential increased risk of breach of the UK ring-fencing regime requiring effective conflicts of interest policies. As a result of further focusing on NatWest Group’s core C&I customers, NWM Group’s prospects have become further dependent on the success and strategy of NatWest Group and its C&I business segment in particular. NWM Group’s ability to serve its customers may be adversely affected by the execution of NatWest Group’s strategy in respect of its C&I business segment and customer reactions to the changing nature of NWM Group’s business model may be more adverse than expected. Previously anticipated revenue and profitability levels may not be achieved (including in relation to: the ability to support customer transactions whilst meeting NWM Group capital targets, and changes to the availability of risk capital), in the timescales envisaged or at all. An adverse macroeconomic environment, political and regulatory uncertainty, market volatility and change, strong market competition, the emergence of digital assets and digital currencies operating alongside the traditional monetary system, and/or the complexity of deployment and integration of artificial intelligence in NWM Group’s processes, controls, and products may require NWM Group to make adjustments to its strategy or planned implementation timeline. NWM Group’s strategy requires it to focus on bank-wide simplification, a significant proportion of which is dependent on simplification of its IT systems and therefore may not be realised if IT capabilities are not delivered in line with assumptions. The scale of changes that have been concurrently implemented require the implementation and application of robust governance and controls frameworks and robust IT systems. There is a risk that NWM Group may not be successful in maintaining such governance and control frameworks and IT systems. The financial, operational and capital targets and expectations envisaged by NWM’s strategy may not be met or maintained in the timeframes expected or at all. In addition, targets and expectations for NWM Group are based on management plans, projections and models, and are subject to a number of key assumptions and judgements, any of which may prove to be inaccurate. NWM Group has implemented a shared services model and transfer pricing arrangements with some entities within NatWest Group’s ring-fenced sub-group (including NatWest Bank Plc and The Royal Bank of Scotland Plc). NWM Group therefore relies directly or indirectly on NatWest Group entities to provide services to itself and its customers. This reliance has increased as a result of NWM Group joining NatWest Group’s C&I business segment. A failure of NWM Group to receive these services may result in operational risk. See ‘Operational risks (including reliance on third party suppliers and outsourcing of certain activities) are inherent in NWM Group’s businesses.’ In addition, any change to the cost and/or scope of services provided by NatWest Group may impact NWM Group’s competitive position and its ability to meet its other targets. NWM’s strategy entails legal, execution, operational and regulatory (including compliance with the UK ring-fencing regime), conflicts, IT system, cybersecurity, culture, people, conduct, business and financial risks to NWM Group. As a result, NWM Group may not be able to successfully implement some or all aspects of its strategy or may not meet any or all of the related strategic targets or expectations. Additionally, certain aspects of the services provided by NWM Group require local licences or individual equivalence decisions (temporary or otherwise) by relevant regulators. In April 2024, the European Parliament approved the Banking Package (CRR III/CRD VI). From 11 January 2027, non-EU firms providing ‘banking services’ will be required to apply for and obtain authorisation to operate as third country branches in each relevant EU member state where they provide these services, unless an exemption applies. NatWest Group continues to evaluate its EU operating model, making adaptations as necessary. For instance, in December 2024, NWM N.V., a subsidiary of NWM Group, became the primary corporate and institutional customer-facing entity of the NatWest Group in Europe. Changes to, or uncertainty regarding NWM Group’s EU operating model have been, and may continue to be, costly and may: (i) adversely affect customers and counterparties who are dependent on trading with the EU or personnel from the EU; and/or (ii) result in regulatory sanction and/or further costs due to a failure to receive the required regulatory permissions and/or further changes to NWM Group’s business operations, product offering, customer engagement, and regulatory requirements (including as a result of CRD VI). These changes will also impact NWM Plc’s direct access to euro ECB liquidity facilities and euro central bank reserves. Furthermore, transferring business to an EEA based subsidiary, including in connection with NatWest Group’s EU corporate portfolio, is a complex exercise and involves legal, regulatory and execution risks, and could result in a loss of business and/or customers or higher than anticipated costs (refer to ‘The transfer of NatWest Group’s EU corporate portfolio involves certain risks.’). Any of the above could, in turn, adversely affect NWM Group. As a result of RBS Holdings N.V. and its subsidiary NWM N.V. (both subsidiaries of NWM Group) being classified as a “significant supervised group”, ECB direct supervision of both subsidiaries began on 1 January 2024, which could have an adverse effect on NWM Group’s business strategy, operating model and prudential requirements in the short and medium term. Each of these risks, and others identified in this section entitled ‘Principal Risks and Uncertainties’, could jeopardise the implementation and delivery of NWM Group’s strategy individually or collectively, and adversely affect NWM Group’s products and services offering or office locations, competitive position, ability to meet targets and commitments, reputation with customers or business model and may result in higher-than-expected costs. There is a risk that the intended benefits of NatWest Group’s and NWM Group’s strategies may not be realised in the timelines or in the manner contemplated, or at all. Various aspects of NWM Group’s strategy may not be successful, may not be completed as planned, or at all, or could be phased or could progress in a manner other than as expected. This could lead to additional management actions by NatWest Group (or NWM Group), regulatory action or reduced liquidity and/or funding opportunities. Any of the above may lead to NWM Group not being viable, competitive, or profitable, and may have a material adverse effect on NWM Group’s future results, financial condition, prospects, and/or reputation. NWM Group operates in markets that are highly competitive, with competitive pressures and technology disruption. NatWest Group (including NWM Group) faces increasing competitive pressures and technology disruption from incumbent traditional UK banks, challenger banks and building societies (including those formed through mergers), fintech companies (including companies offering buy-now-pay-later and payment platforms), large technology conglomerates and new market entrants leveraging technology and/or other advantages to compete for customer engagement. “BigTech” companies pose a threat to incumbent banking providers because of their customer innovation and global reach. In addition, digital-first banks (often referred to as “neobanks”) and fintechs are aiming to compete to serve customers that increasingly use a constellation of providers to support their complex and evolving needs (e.g., personal financial management, buy now and pay later, and paying for goods and services in foreign currency). Competition is expected to continue and intensify due to: evolving customer behaviour, technological changes (including digital currencies, stablecoins and the growth of digital banking), competitor behaviour, new market entrants,
(MORE TO FOLLOW) Dow Jones Newswires
February 13, 2026 02:00 ET (07:00 GMT)
DJ NatWest Markets Plc Annual Report 2025 -3-
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, among others. In particular, NWM Group may be unable to grow or retain market share due to new (or more competitive) banking, lending and payment offerings by rapidly evolving incumbents and challengers (including private credit, shadow banks, alternative or direct lenders and new entrants). These competitive pressures may result in a shift in customer behaviour and impact NWM Group’s revenues and profitability. Moreover, innovations in biometrics, artificial intelligence, automation, cloud services, blockchain, cryptocurrencies and quantum computing may rapidly facilitate industry transformation. Increasingly, many of NWM Group’s products and services are, and will become, more technology intensive, including through digitalisation, automation and the use of artificial intelligence while needing to continue complying with applicable and evolving regulations. NWM Group’s ability to develop or acquire digital solutions and their integration into NWM Group’s structures, systems and controls has become increasingly important for retaining and growing NWM Group’s market share and customer-facing businesses. NWM Group’s innovation strategy (which includes investments in its IT capability intended to improve its core infrastructure and customer interface capabilities as well as investments and strategic partnerships with third party technology providers) may not be successful or may not result in NWM Group offering innovative products and services in the future. Furthermore, competitors may outperform NWM Group in deploying technologies to deliver products or services to customers, which may adversely affect NWM Group’s competitive position. In addition, continued industry consolidation and/or technological developments could result in the emergence of new competitors or strengthening NWM Group’s current competitors, including in their ability to offer a broader and more attractive or better value range of products and services and geographic diversity. For example, new market entrants, including non-traditional financial services providers, such as technology conglomerates, may benefit from scale, technology and customer engagement advantages and may be able to deliver financial services at a lower cost base. Failure to offer competitive, attractive, innovative, and profitable products that are also released in a timely manner, may result in lost market share, losses on some or all of NWM Group’s initiatives and missed growth opportunities. For example, NWM Group is investing in the automation of certain solutions and interactions within its customer-facing businesses, including through artificial intelligence. There can be no certainty that such initiatives will allow NWM Group to compete effectively or will deliver the expected cost savings for NWM Group. In addition, the implementation of NatWest Group’s strategy, delivery on its climate ambition and cost-controlling measures, may also have an adverse effect on competitiveness and returns. Moreover, activist investor engagement and increased intervention may challenge NatWest Group’s (and NWM Group’s) strategic initiatives. NWM Group may also fail to identify opportunities or derive benefits from technological innovation, shifting customer behaviour or regulatory changes. Competitors may better attract and retain customers and key employees, operate more effective IT systems, and have access to lower cost funding and/or be able to attract deposits or provide investment-banking services on more favourable terms than NWM Group. Although NWM Group invests in new technologies and participates in industry and research-led technology development initiatives, such investments may be insufficient or ineffective, especially given NWM Group’s focus on business simplification and cost efficiencies. This could affect NWM Group’s ability to offer innovative products or technologies to customers. Any of the above may have a material adverse effect on NWM Group’s future results, financial condition, prospects, and/ or reputation. The transfer of NatWest Group’s EU corporate portfolio involves certain risks. To improve efficiencies and best serve customers, certain assets, liabilities, transactions and activities of NatWest Group (including its Western European corporate portfolio principally consisting of term funding and revolving credit facilities) (the ‘Transfer Business’), have been or may be: (i) transferred from the ring-fenced subgroup of NatWest Group to NWM Group, and/or (ii) transferred to the ring-fenced subgroup of NatWest Group from NWM Group, subject to customer and regulatory requirements, such as CRD VI. The timing, success and quantum of any of these transfers remain uncertain as is the impact of these transactions on its results of operations. As a result, this may have a material adverse effect on NWM Group’s future results, financial condition, prospects, and /or reputation. Financial resilience risk NWM Group may not achieve its ambitions or targets, meet its guidance, generate returns, or implement its strategy effectively. NWM Group has set a number of financial, capital and operational targets and provided guidance including in respect of: CET1, MREL and leverage ratio targets, targets in relation to local regulation, funding plans and requirements, employee engagement, diversity and inclusion as well as it contributes to NatWest Group’s climate and sustainability-related ambitions, targets and commitment and the implementation of NatWest Group’s climate transition plan. NWM Group’s ability to meet its ambitions, targets, guidance, and make discretionary capital distributions is subject to various internal and external factors, risks and uncertainties. These include but are not limited to: UK and global macroeconomic, political, market and regulatory uncertainties, customer behaviour, operational risks and risks relating to NWM Group’s business model and strategy (including risks associated with climate and other sustainability-related issues). Refer to ‘NWM Group, its customers and its counterparties face continued economic and political risks and uncertainties in the UK and global markets, including as a result of inflation and interest rates, supply chain disruption, protectionist policies, and geopolitical developments.’ A number of factors may impact NWM Plc and NWM N.V.’s abilities to meet and maintain their respective CET1 ratio targets, including the macroeconomic environment, impairments, the extent of organic capital generation and the receipt and payment of dividends. Refer to ‘NWM Plc and/or its regulated subsidiaries may not meet the prudential regulatory requirements for regulatory capital.’ Furthermore, the focus on maintaining a disciplined cost base may result in limited investment in other areas which could affect NWM Group’s long-term product offering or competitive position and its ability to meet its other targets, including those related to customer satisfaction. In addition, challenging trading conditions may adversely affect NWM Group’s business and its ability to achieve its targets, meet its guidance, and execute its strategy. Furthermore, NWM Group’s strategy may not be successfully executed or it may not meet its ambitions, targets, guidance and expectations. Any of the above may lead to NWM Group not being a viable, competitive or profitable banking business and may have a material adverse effect on NWM Group’s future results, financial condition, prospects, and/or reputation. NWM Plc and/or its regulated subsidiaries may not meet the prudential regulatory requirements for regulatory capital. NWM 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 NWM Group with financial flexibility in the face of turbulence and uncertainty in the global economy and specifically in its core UK operations. NWM Plc’s and NWM N.V.’s target CET1 ratios are based on regulatory requirements and management actions (see the targets set forth in each respective entity’s Outlook section) that rely on internal modelling and risk appetite (including under stress). As at 31 December 2025, NWM Plc’s solo CET1 ratio was 18.4 % and its CET1 target ratio for the medium term is around 14%. NWM Plc’s current capital strategy is based on the management of RWAs and other capital management initiatives (including the optimisation of RWAs and the periodic payment of dividends to NatWest Group plc, NWM Plc’s parent company). A number of factors may impact NWM Plc and NWM N.V.’s ability to maintain their CET1 ratio target and achieve their capital strategy. These include: . a depletion of NWM Plc or NWM N.V.’s capital resources through reduced profits (which would in turn impact retained earnings) and may result from revenue attrition or increased liabilities, sustained periods of low interest rates, reduced asset values resulting in write-downs or reserve adjustments, impairments, changes in accounting policy, accounting charges or foreign exchange movements; . an increase in the quantum of NWM Plc’s or NWM N.V.’s RWAs, stemming from exceeding target RWA levels, regulatory changes (including their interpretation or application), foreign exchange movements or a failure in internal controls or procedures to accurately measure and report RWAs/leverage exposure.; . changes in prudential regulatory requirements including the Total Capital Requirement for NWM Plc (as regulated by the PRA) or NWM N.V. (as regulated by the ECB), including Pillar 2 requirements and regulatory buffers as well as any applicable scalars; . further losses (including as a result of extreme one-off incidents such as cyberattack, fraud or conduct issues)
(MORE TO FOLLOW) Dow Jones Newswires
February 13, 2026 02:00 ET (07:00 GMT)
© 2026 Dow Jones News
Read more on FinanzNachrichten.de
