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Consolidated statement of changes in equity - GBP (£)
£ in Millions
Called-up share capital
Paid-in equity
Share premium account
Merger reserve
FVOCI reserve
Cash flow hedging reserve
Foreign exchange reserve
Capital redemption reserve
Retained earnings
Own shares held
Shareholders' equity
Non-controlling interests
Ordinary shareholders
Preference shareholders
Total
At 1 January at Dec. 31, 2019 £ 12,094 £ 4,058 £ 1,094   £ 138 £ 35 £ 1,343 £ 0 £ 13,946 £ (42)   £ 9      
Ordinary shares issued 35 2,218 17                        
Share cancellation [1],[2]               0              
Reclassified [3]   (1,277)                          
Unrealised (losses)/gains [4]         76                    
Realised losses/(gains) [5]         152                    
Tax         (6)                    
Amount recognized in equity [6]           321                  
Amount transferred from equity to earnings           (50)                  
Tax           (77)                  
Retranslation of net assets             297                
Foreign currency (losses)/gains on hedges of net assets             (55)                
Tax             6                
Recycled to profit or loss on disposal of businesses             17                
Profit/(loss) attributable to ordinary shareholders and other equity owners - continuing                 (565)            
Profit/(loss) attributable to ordinary shareholders and other equity owners - discontinued                 193            
Equity preference dividends paid                 (26)            
Paid-in equity dividends paid                 (355)            
Shares repurchased [1]                   (77)          
Unclaimed dividends                 2            
Redemption/reclassification of paid-in equity gross                 (358)            
Redemption/reclassification of paid-in equity tax                 3            
Realised gains/(losses) on FVOCI equity shares gross                 (248)            
Remeasurement of retirement benefit schemes - gross [7]                 4           £ 4
Remeasurement of retirement benefit schemes - tax [7]                 22            
Changes in fair value of credit in financial liabilities designated at FVTPL, gross                 (52)           (52)
Changes in fair value of credit in financial liabilities designated at FVTPL, tax                 8            
Employee share schemes                 (11) 95          
Share-based payments gross                 (5)            
Share-based payments tax                 (1)            
Currency translation adjustments and other movements                       17      
Profit/(loss) attributable to non-controlling interests                       (62)      
At 31 December at Dec. 31, 2020 12,129 4,999 1,111 £ 10,881 360 229 1,608 0 12,567 (24) £ 43,860 (36) £ 38,367 £ 494 43,824
Ordinary shares issued 37 937 50                        
Share cancellation [1],[2] 698             (698)              
Reclassified [3]   (2,046)                          
Unrealised (losses)/gains [4]         32                    
Realised losses/(gains) [5]         (122)                    
Tax         (1)                    
Amount recognized in equity           (687) [6]                 (687)
Amount transferred from equity to earnings           (161)                 (161)
Tax           224                  
Retranslation of net assets             (484)                
Foreign currency (losses)/gains on hedges of net assets             88               88
Tax             (17)                
Recycled to profit or loss on disposal of businesses             10                
Redemption of preference shares               24 (24) [8]            
Profit/(loss) attributable to ordinary shareholders and other equity owners - continuing                 2,804            
Profit/(loss) attributable to ordinary shareholders and other equity owners - discontinued                 464            
Equity preference dividends paid                 (19)            
Paid-in equity dividends paid                 (299)            
Ordinary dividends paid                 (693)            
Shares repurchased [1]                 (1,423) [2] (383)          
Redemption/reclassification of paid-in equity gross                 134            
Redemption/reclassification of paid-in equity tax                 16            
Realised gains/(losses) on FVOCI equity shares gross                 3            
Remeasurement of retirement benefit schemes - gross [7]                 (669)           (669)
Remeasurement of retirement benefit schemes - tax [7]                 168            
Changes in fair value of credit in financial liabilities designated at FVTPL, gross                 (29)           (29)
Changes in fair value of credit in financial liabilities designated at FVTPL, tax                 3            
Employee share schemes                 8 36          
Share-based payments gross                 55            
Share-based payments tax                 10            
Currency translation adjustments and other movements                       4      
Profit/(loss) attributable to non-controlling interests                       44      
Dividends paid                       (5)      
At 31 December at Dec. 31, 2021 11,468 3,890 1,161 10,881 269 (395) 1,205 722 12,966 (371) 41,796 7 37,412 £ 494 41,803
Share cancellation [1],[2] 929             (929)              
Unrealised (losses)/gains [4]         (570)                    
Realised losses/(gains) [5]         59                    
Tax         140                    
Amount recognized in equity           (2,973) [6]                 (2,973)
Amount transferred from equity to earnings           (304)                 (304)
Tax           901                  
Retranslation of net assets             512                
Foreign currency (losses)/gains on hedges of net assets             (266)               (266)
Tax             32                
Recycled to profit or loss on disposal of businesses             (5)                
Redemption of preference shares [8]                 (750)            
Profit/(loss) attributable to ordinary shareholders and other equity owners - continuing                 3,851            
Profit/(loss) attributable to ordinary shareholders and other equity owners - discontinued                 (262)            
Paid-in equity dividends paid                 (249)            
Ordinary dividends paid                 (1,205)            
Special dividends paid                 (1,746)            
Shares repurchased [1],[2]                 (2,054)            
Redemption/reclassification of paid-in equity tax                 (36)            
Realised gains/(losses) on FVOCI equity shares gross                 113            
Realised gains/(losses) on FVOCI equity shares tax                 (9)            
Remeasurement of retirement benefit schemes - gross [7]                 (840)           (840)
Remeasurement of retirement benefit schemes - tax [7]                 192            
Changes in fair value of credit in financial liabilities designated at FVTPL, gross                 50           50
Changes in fair value of credit in financial liabilities designated at FVTPL, tax                 (2)            
Employee share schemes                 6 113          
Share-based payments gross                 7            
Share-based payments tax                 1            
Profit/(loss) attributable to non-controlling interests                       6      
Dividends paid                       (5)      
At 31 December at Dec. 31, 2022 £ 10,539 £ 3,890 £ 1,161 £ 10,881 £ (102) £ (2,771) £ 1,478 £ 1,651 £ 10,019 £ (258) £ 36,488 £ 8 £ 32,598   £ 36,496
[1] In March 2022, there was an agreement with HM Treasury to buy 549.9 million (March 2021 - 591 million) ordinary shares in NatWest Group plc from UK Government Investments Ltd, at 220.5 pence per share (March 2021 - 190.5 pence per share) for the total consideration of £1.22 billion (March 2021 - £1.13 billion). NatWest Group cancelled all 549.9 million of the purchased ordinary shares (March 2021 - NatWest Group cancelled 391 million of the purchased ordinary shares and held the remaining 200 million in own shares held). The nominal value of the share cancellation has been transferred to the capital redemption reserve.
[2] NatWest Group plc repurchased and cancelled 379.3 million (2021 - 310.8 million) shares for total consideration of £829.3 million (2022 £676.2 million) excluding fees as part of the On Market Share Buyback Programme which has now concluded. The nominal value of the share cancellations has been transferred to the capital redemption reserve.
[3] In July 2021, paid-in equity was reclassified to liabilities as the result of a call in August 2021 of US$2.65 billion AT1 capital notes.
[4] Certain assets within this category have been hedged with derivatives which are not in an accounting hedge relationship. The effect of this creates a temporary difference between other comprehensive income and the income statement due to the difference in recognition criteria. This temporary difference is expected to reverse through the income statement over the duration of the hedge.
[5] 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).
[6] The unrealised losses on cash flow hedge reserves is mainly driven by deferment of losses on GBP net received fixed swaps as interest rates have increased.
[7] Following the purchase of ordinary shares from UKGI in Q1 2022, 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. Other material movements came from asset underperformance relative to movements in the schemes’ liabilities over the year. 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.
[8] Following an announcement of a Regulatory Call in February 2022, the Series U preference shares were reclassified to liabilities. A £254 million loss was recognised in retained earnings as a result of FX unlocking.