Lloyds Banking Group plc (LLOY) Earnings Call Transcript & Summary

Hello. Good afternoon, and welcome to the Lloyds Banking Group Virtual Shareholder Event. I'm Andrew Walton, and I'm the Group Corporate Affairs Director. As you know, this year, shareholders are unable to attend our AGM. This decision is both in line with government guidelines and to ensure your safety and well-being. Although we are unable to address you in person, engaging with our shareholders is extremely important to us. This virtual event will allow us to update you on the Group's strategic progress and other important matters as we normally would at our AGM. It will also enable us to address the questions you have. Thank you to those of you who submitted questions and to those taking the time to watch this event. To start, we will hear from our Chairman, Lord Blackwell, who will be followed by our Group Chief Executive, António Horta-Osório. After their updates, we will then move on to presubmitted questions. Lord Blackwell and António will also be joined by Sara Weller, the Chair of the Board's Responsible Business Committee for this section. We hope to get through as many of your questions as possible in the time we have. Lord Blackwell, let me pass over to you.

Thank you, Andrew, and welcome to the Lloyds Banking Group Virtual Shareholder Event. It's highly unusual to be addressing you from my home instead of from my usual venue in Edinburgh. And I hope for those of you watching that you, your families and loved ones are staying safe and well. Our Annual General Meeting is an important event for the group, allowing us to engage directly with you, our shareholders, as well as for you to vote on our resolutions. But with the current restrictions on people's movements and ability to gather, like many other companies, we've been forced to hold a virtual shareholder event rather than our usual AGM. The results of the votes on resolutions proposed this morning's AGM will be announced on our website in the usual way shortly. However, we hope that this virtual meeting will help maintain our commitment to engaging with you as shareholders. We know how important it is to address your questions, and we value the opportunity to update you on the development of the group, particularly given the extraordinary times in which we find ourselves. I'm pleased that later on in this presentation, after you've heard from António and myself, we'll be joined by Sara Weller, our Chair of the Board's Responsible Business Committee, to spend some time addressing many of the questions you have submitted. And while we may not have time to address them all in this broadcast, we will ensure every question gets an individual reply. But let me start with COVID-19, which has changed and disruptive life for everyone in this country. Lloyds Banking Group's core purpose is to Help Britain Prosper, and this commitment is now more important than ever. While the outlook is challenging and uncertain, we're determined to play our part in helping Britain recover from this crisis and you'll hear more from António on this later. In our 250 years of serving the British economy, we've experienced many downturns and several crises. And on each occasion, we've worked hard to contribute to the recovery of the economy and be there by our customers' side. We expect to do exactly the same this time. At this stage, we can't be sure how the situation will evolve. But we do know that the impact of COVID-19 on our society, our economy and the way we go about our lives will be long lasting and profound. We recognize that our success is inextricably linked to the success and health of the U.K. economy. The funding support that we're providing to companies, supports businesses that employ millions of people, who, in turn, are repaying mortgages, loans and credit cards. Similarly, the direct relief that we are providing to households is crucial to help them cope with the pressure on their finances. In addition, our charitable foundations are continuing to play a vital role supporting the communities in which we operate as our many volunteers. As a group at the heart of the U.K. economy, we have a responsibility to take action. And it's in our interest to play our role in helping to get the country through the current crisis and return to prosperity. This support will, of course, have a cost, but we see this social contribution as a type of social dividend, recognizing both our obligations as a responsible business and the benefit we gained from operating in communities that we can help return to prosperity. It's the right thing to do and deploy it at the time when our customers and communities most need it. And of course, this support for our customers and communities is only possible because of our people. António will add his observations later about the remarkable work of so many of our employees, but let me say how deeply proud I am of how they've responded to this crisis. Many are going to exceptional lengths every day to serve our customers and their communities. Thank you to all of them. Let me now turn to the more usual business of the meeting, starting with the Board. Since our 2019 AGM, we've appointed Sarah Legg and Catherine Woods as Nonexecutive Directors. Sarah, who joined the Board on the 1st of December 2019, was previously Group Financial Controller of HSBC. Catherine joined the Board on the 1st of March this year after retiring as Deputy Chairman and Senior Independent Director of Allied Irish Bank last October. Both, I believe, are excellent appointments with strong relevant experience in the financial sector and bring different perspectives and insights as well as supporting the Board's commitment to diversity. I'd also like to take this opportunity to thank Anita Frew, who stepped down as Senior Independent Director in December and is retiring as Deputy Chairman and Non-executive Director at this AGM. Anita joined the Board in 2010 and her support and insights have been invaluable to me personally and to all the Board. Alan Dickinson succeeded Anita as Senior Independent Director, and he will also now take on the role of Deputy Chairman. And as part of this, Alan is stepping down as Chair of the Board Risk Committee and passing that well to Nick Prettejohn. I'd also like to thank our Chief Operating Officer and Director, Juan Colombás, who had planned to retire in July for agreeing to remain in post and on the Board until September. Juan is playing a key role in the group's response to the COVID-19 crisis, and his delayed departure will enable us to draw on his deep understanding of the business for a little while longer. Finally, on Board matters, since I'm now moving to my ninth year on the Group Board, I previously announced that I plan to retire as Group Chairman no later than the next AGM. A search process was started at the beginning of the year to enable an orderly handover once my successor is identified. And I'd like to thank all our Board members for their contribution and commitment over the past year. Let me now turn to business performance and strategy. The group delivered a resilient performance in 2019, maintaining our underlying profit with continued focus on our leading cost efficiency while increasing our strategic investment and strengthening our position as the U.K.'s largest digital bank. During 2019, we also continued to deliver on our purpose to Helping Britain Prosper, including lending to around 1 in 4 first-time buyers, lending some GBP 18 billion to businesses across the U.K. and supporting renewable energy projects, which will power 3.5 million homes by 2020. However, we were, of course, disappointed that our strategy performance impacted was by additional PPI charges in the year, reflecting the increased volume of claims in the run-up to the deadline last August. Although the world has changed significantly since the year-end, António will highlight the key points from our 2019 performance in a moment. However, I'd like to say a few words about our long-term strategic aims and progress. Following the group's return to profitability after the last financial crisis, our strategic aim has been to transform the business to succeed in the rapidly changing consumer, technology and competitive environment. And this means not only ensuring we have leading digital channels that allow customers to interface quickly and easily with our services on their phones and tablet, but also reengineering our internal processes and technology platforms to provide the speed and reliability that customers increasingly expect. That, in turn, means significant new demand on the skills and working patterns of our dedicated staff. It's a massive but essential program of change to ensure we have a business that can sustain service to customers and returns to shareholders in the years to come. Given the growth of new competition, both large and small, our strategy has also been to recognize and build on the group's areas of distinctive strength. One of these is the unique position we have to serve customers savings and retirement needs by linking the strength of our Scottish Widows business to our wider bank franchise. Our unique Single Customer View, where customers can see details of their pension and insurance products alongside the bank accounts online, is now available to over 5 million banking and insurance customers. We expect this to rise to around 9 million by the end of 2020. During 2019, we took significant steps to add to our offering to strategic partnerships and acquisitions. We launched Schroders Personal Wealth to our customers in September, and we're now making good progress towards our ambition of becoming a top 3 financial planning business by the end of 2023. In other areas, we completed the integration of MBNA and announced the acquisition of Tesco Bank's GBP 3.7 billion prime residential mortgage portfolio, demonstrating our ability to grow in target areas where we see value for shareholders. And in line with our overall strategic transformation, we continue to respond to our customers' changing needs through our multichannel and multi-brand strategy. Alongside our commitment to maintain the U.K.'s largest branch network, we've invested in innovative new branch formats and also strengthened our position as the U.K.'s largest digital bank. This continues to grow, and we now have over 16.9 million digital users. For our commercial clients, we launched self-service business banking loans and rolled out a new digitized small business lending tool. We were also the first U.K. financial services provider to offer access to a digital app to allow commercial clients to identify and make energy-efficient investments in their buildings. So I'm pleased that we continue to make strong strategic progress in 2019 and are well placed with a strong balance sheet to continue to support U.K. through COVID-19 while maintaining our vital strategic development, which brings me to the dividend. These extraordinary times lead to difficult decisions. And Following a request from the Prudential Regulation Authority, the Board of Lloyds, alongside all other major U.K. banks, agreed to cancel the final dividend for 2019 in order to provide assurance that the banking industry had the capital it needed to support businesses and households through the current crisis. We also made a commitment that we would declare no ordinary dividends or share buybacks until the end of 2020. These were decisions we did not take lightly. The Board fully understands the decision on dividend will be disappointing to our shareholders, but we believe it was appropriate to agree to this in the current exceptional circumstances. However, while we have held back on the payment of dividends, I'm well aware that any surplus capital in the business still belongs to you as shareholders. And I'd like to reassure shareholders that the Board remains committed to returning surplus capital to shareholders in due course, both through future dividends and potential share buybacks as appropriate, and we will continue to keep this under review. Now let me turn to executive remuneration. And before I talk about the changes we are proposing to our remuneration policy, I'd like briefly to mention a decision that's been taken in the context of COVID-19. I can confirm that in response to the current situation, our Group Executive Committee have asked that they don't receive an annual bonus under the 2020 group performance share award. This decision was made in solidarity with the communities in which we operate and in recognition of the priorities of our stakeholders, and I believe it was the right thing for them to do. In setting our general remuneration principles, the group believes in pay for performance, ensuring our approach to remuneration is aligned to the interests of our shareholders. So variable remuneration is heavily weighted towards long-term performance, with the majority being share-based. Awards are also subject to deferral and holding periods. For 2019, the reduction in statutory profit meant that the group performance share pool was reduced 33% compared to 2018, reflecting the impact of PPI and other conduct-related costs. And the Group Chief Executive and the Chief Operating Officer also independently requested not to receive group performance share awards for 2019. As you will be aware, we proposed a new director's remuneration policy for approval at today's AGM, following extensive consultation with shareholders. You can read the detail of this plan in the annual report, but I'd like to draw your attention to some of the highlights. In November 2019, we announced that we would be reducing pension allowances for Executive Directors to 15% of salary, subject to shareholder approval of the new remuneration policy at today's AGM. And at the same time, we're making improvements to pensions for all other 50,000 colleagues who participate in defined contribution schemes to make them eligible for maximum employee contribution of 15% as well. We are also introducing a new long-term variable reward known as the long-term share plan to replace the current group ownership scheme. We believe this plan is more closely in line to creating shareholder value over the longer term, and we've aimed to reduce complexity in our award structure. But awards will be subject to pre-grant test as well as performance underpins to ensure they don't reward failure. And the maximum opportunities in this plan have also been significantly reduced. And as a result of all these changes, the maximum total compensation of the Group Chief Executive is reducing by almost 30%. While we've had broad support for new policy in our consultation with shareholders, I'm aware that a number have expressed continuing reservations about different aspects of the plan. And in the light of today's votes, we will continue to engage with them to discuss their concerns. There has, of course, been a great deal of public interest in matters of executive pay and fairness, and rightly so. We remain very focused on addressing the pay gap in our organization from the bottom up and not just from the top down. We hope you'll agree that we've made significant progress in this respect over the past year. Finally, I'd like to provide a brief update in relation to the historic HBOS Reading fraud and the progress made since last year's AGM. As outlined last year, we've been providing shareholders with a rolling update on the state of these matters on our website. As I've said before, the group has deeply apologized to those customers affected by these past crimes and following the conclusion of the trial, sought to provide them with compensation for their distress and losses. As detailed in our latest update, in December, we published the independent report by Sir Ross Cranston on our compensation review, which contained a number of recommendations, and António will update you further on this shortly. We also continued to cooperate fully with the ongoing Dame Linde Dobbs inquiry, which the Board set up to look at the handling of the investigations following the HBOS acquisition. And we're committed to providing her with all the resources she needs to conclude her review as rapidly as possible. Meanwhile, however, the group continues to develop our own learnings based on the insights from customers and stakeholders. And we summarized some of those in our shareholder update earlier this year. As set out in that note, one clear conclusion we have recognized is that the culture of the group has at times been too defensive, too bureaucratic and legalistic, failing to fully understand the concerns raised by customers and communicate sympathetically. That is something which, in recent years, we've been working hard to address. And I'm very conscious that the criminal activities that took place over a decade ago in this HBOS operation have cast a long shadow over the victims of the fraud as well as the reputation of our bank. But I can assure you that we will continue our efforts to do the right thing for all those whom it has impacted. And I'm proud of what I see now and the commitment to the many people who work for Lloyds, who work every day to serve our customers for the best of their ability and to earn their trust and loyalty. So to conclude, the longer-term impact of the coronavirus remains unclear, but the group will maintain its focus on supporting customers in the U.K. economy through the crisis while continuing to transform the business for future success. I'm confident in our ability to do this and want to again express my gratitude for our colleagues and customers at this difficult time. And I'd like to thank all our shareholders for their continued support, and hope that this time next year, we will be able to gather for our AGM in the usual way. Meanwhile, I hope all of you and your families stay safe and well. And now let me hand over to António.

Thank you, Chairman. On behalf of the Board and the Group Executive Committee, thank you for your continued support and the leadership and guidance you provide to the group. I would like to echo your acknowledgment of the extraordinary times we are living in and take this opportunity to wish everyone watching and their families well and hope that they stay safe and healthy. Despite the unusual circumstances, I am pleased that we still have this opportunity to speak to you, our shareholders, and look forward to answering the questions you have submitted. Before I talk about our recent financial performance and progress in terms of responsible business and the environment, I would like to spend some time on our response to the COVID-19 crisis and the incredible work of our colleagues, who continue to go above and beyond in very unusual and challenging circumstances to support our customers. COVID-19 will have a deep and lasting impact on all of us. We are totally committed to helping households and businesses, in turn supporting the U.K. economy, to weather the impact of COVID-19. This has meant responding rapidly and at scale to lend to those who need it while offering support to those who are struggling. As the Chairman has said, this, of course, has come at a cost, and we will clearly see a financial impact from the steps we have taken to support customers in our future results. However, we believe it is the right thing to do for Lloyds Banking Group, our customers and the U.K. For our personal customers, we have offered a range of practical measures to help take the pressure off their finances in these difficult times. This has included agreeing almost 1 million repayment holidays for customers with mortgages, loans, motor finance and credit cards. In addition, we are offering interest and fee-free overdraft up to GBP 500. And for our most vulnerable customers, we have introduced a new dedicated line for customers aged over 70. In addition, we have put in place measures to give priority to customers who need extra support, such as NHS workers. I am also pleased to say that our operations have shown resilience, and we have adapted swiftly to challenges we face. Over 95% of our branch network remains open, and our call centers are well staffed to handle the significant increase in volume being seen from customers. Importantly, our digital banking apps have remained fully operational throughout the lockdown despite a significantly increased demand from existing and new customers through new registrations and daily logins. For the business community, we have fully embraced the decisive action of the governments to set up a number of emergency lending schemes as well as adopting our own measures to address company's cash flow pressures. Our commercial businesses have supported clients by agreeing over 45,000 fee-free overdrafts, capital repayment holidays and deferred payments. This is all backed by our GBP 2 billion COVID-19 funds for SMEs and mid-corporates. As I look at the challenges we have faced and the way we have had to rapidly adapt, I have been deeply impressed by the commitment of our relationship managers who have been working tirelessly, talking to tens of thousands of business customers to understand how the coronavirus crisis is impacting them and to provide support wherever they can. For smaller businesses, which are the lifeblood of the British economy, we have moved quickly. We are proud to be playing our part by delivering the government's flagship bounce back loan scheme, approving loans totaling over GBP 3.6 billion and over 115,000 applications, which supports our business customers needing to borrow less than GBP 50,000. Our teams worked through many nights to be successfully up and running on day 1 with over GBP 1 billion of loans paid within 24 hours to business customers who applied on the first day. The coronavirus business interruption loan scheme, or CBILS, is also a key part of our nation's response offering larger loans to SMEs. And we are approving the vast majority of eligible CBILS applications that we assess. We have adapted our product range rapidly, put in place new systems and significantly increased our resources to speed up loan requests and approvals. This means we have now been able to approve more than 6,700 CBILS loans to a value of GBP 1.1 billion. Finally, we have also enhanced our financial support for our charitable partners and the group's independent charitable foundations. In recent weeks, we have launched a partnership with We Are Digital, which has seen tablet devices delivered free of charge to over 70s isolated by COVID-19 to help keep them connected as well as providing a specialist phone line to help up to 20,000 customers access the internet. We have also supported The Silver Line, a partner to Age UK, to enable it to continue to offer a 24/7 helpline and friendship services to those aged 55 and over, who may be feeling lonely or isolated. More broadly, we are continuing to support our charitable foundations as they help tackle social issues in communities, from mental health to domestic abuse, homelessness and disability. Secondly, our people have been and will continue to be absolutely central to how we respond to the challenges of COVID-19. Our colleagues have adopted swiftly to ensure the resilience of our operations. I want to express my gratitude to all my colleagues across the group. They have shown exemplary dedication and professionalism. I know that many of them remain anxious about the health of loved ones and the impact of coronavirus on their communities, but they have continued to be focused on serving our customers every day. I am proud to say that our colleagues' support for customers has been flexible and sensitive, while operationally, we have shown resilience, strength and the ability to adapt and innovate at pace. In the first few weeks of the crisis, we rolled out the technology and training to allow around 45,000 of our colleagues to work from home, up from the previous level of around 15,000. Where working from home is not possible and our colleagues are providing a critical service, such as in our branch network, we have consistently and closely followed government guidance around social distancing. And we have regularly updated and supported colleagues on the precautions they should take. I want to commend the collaborative role our unions, Unite & Accord, have been playing in helping us address staff concerns. We have suspended all role reduction plans while committing to pay all of our staff in full, whatever the circumstances. This is important as it removes uncertainty for our colleagues and allows them to focus on supporting our customers and serving their communities. I am proud of the way Lloyds Banking Group is responding collectively and individually. On behalf of the Board and Executive Committee, thank you to all of our colleagues for the remarkable contributions they are making at work, at home and in their communities at this time. I would now like to spend a bit of time talking about our recent financial performance, the impact of COVID-19 and how our financial strength is critical to our response and support for customers; secondly, Sir Ross Cranston's independent assessment of the customer review implemented to compensate victims of the HBOS Reading fraud; and our approach to responsible business and the environment. Let me start with our recent financial performance and the financial strength of the group, which is fundamental in our ability to support our customers through COVID-19. Following a solid start to 2020, we are now seeing the emerging economic impact of the coronavirus crisis, and this will be, of course, reflected in our performance going forward. At our recent first quarter results, we announced statutory profit before tax of GBP 74 million. This was heavily impacted by the impairment charge of GBP 1.4 billion in the quarter primarily due to forward-looking charges relating to the economic impact of the COVID-19 crisis. Our revenues were down 11% year-on-year, impacted by the rate environment and the slowdown across all of our key markets, both of which we expect to continue into Q2. Importantly, the group is in a strong financial position, and our balance sheet remains well positioned for the current environment, given our prudent approach to lending and low-risk U.K.-focused strategy. Secured lending makes up over 80% of our balance sheet, including GBP 310 billion in retail and GBP 30 billion in SME and mid-corporate assets. The rest of our loan book comprises our prime U.K. consumer portfolio and our prudent exposure to U.K. large corporates. We have no net wholesale debt and meanwhile, our capital ratio of 14.2% is significantly above our requirements. This gives us substantial capacity to absorb risks while continuing to play our part through lending and repayment holidays and other financial measures to overall support households and businesses and ultimately, the U.K. economy. Although the U.K. faces an uncertain outlook, our financial strength will enable us to remain absolutely focused on supporting our customers and continue to support all of the government's schemes. As the Chairman mentioned earlier, I would now like to update you on the steps we have taken following publication of Sir Ross Cranston's independent report to assess the customer review, put in place to compensate victims of the HBOS Reading fraud. Sir Ross Cranston's review concluded that while compensation for distress and inconvenience was generally beyond what a customer could hope to have been awarded under that head of loss by a court, the way they review operated did not achieve its objective of giving all customers the confidence that they had received fair and reasonable outcomes in respect of the assessments of direct and consequential losses. The group deeply regrets that these customers' concerns were not adequately addressed by the operation of the customer review despite our best intentions. We have fully accepted Sir Ross' recommendations and are committed to implementing them in full in order to put this right for customers. I am personally overseeing this, working with the victims and other stakeholders to ensure those customers affected by the HBOS Reading fraud can now be confident. Their claims have been properly addressed in an open and transparent manner. The distress caused to those affected by the criminal misconduct at HBOS Reading over a decade ago remains a matter of deep regrets to me and my colleagues. We are determined to rebuild trust by implementing Sir Ross' recommendations as the group continues to develop lessons learned based on insight from customers and stakeholders. While COVID-19 presents an immediate challenge, climate change remains one of the biggest issues facing the U.K. and indeed, the world today. We have made it clear that we want to play our parts in finding solutions to create a greener future. I am pleased to be able to update you on the strong progress we have made on our sustainability strategy. This strategy, set out in 2018, recognizes that Lloyds Banking Group has a unique position within the U.K. economy. And this makes us well placed to support customers and clients to manage both the opportunities and risks posed by climate change. Our strategy supports the ambitions of the global Paris Agreement and the targets of the U.K. government's Clean Growth Strategy. Our goal is to be a leader in supporting the U.K. to successfully transition to a more sustainable, low-carbon economy. We have set ourselves 7 clear ambitions anchored to the objectives laid out in the U.K. government's Clean Growth Strategy, including, for example, supporting our clients to transition to sustainable business models and operations, financing the shift to low-emission vehicles and to be a leading U.K. provider of customer support on energy-efficient and sustainable homes. As a signal of our commitments, in January, we announced an ambitious goal to work with customers, government and the markets to help reduce the carbon emissions we finance by more than 50% by 2030, supporting the U.K.'s ambition to be net 0 on carbon emissions by 2050. In 2019, we made significant progress, reaching our 2020 targets to support 5 million homes that can be powered through U.K. renewable energy projects and use of green loans to fund commercial real estate space to become more energy efficient, both a year early. We have provided over GBP 4.9 billion in green finance since 2016, including raising over GBP 2.8 billion in green bonds for our U.K. corporate issuers, more than any other U.K. financial services company. Our sustainability strategy and our achievements continue to be well recognized. We were ranked as a leader and second in Europe by ShareAction's 2019 banking on a low-carbon future and are the only U.K. bank to be ranked in the CDP A List for 2018 and 2019, an independent analysis which names the world's most pioneering companies on environmental transparency and performance. Looking ahead, we are committed to announcing more products and services in 2020 that will help support a greener future for the U.K. We want to help our customers make lifestyle changes required in their homes, vehicles and investments by creating green products and services that make it easier for them to invest in tackling climate change. We will also support businesses by financing their investments in the green economy as well as helping to improve the energy efficiency of commercial buildings. Identifying and managing climate-related risks and disclosing these in line with the task force for climate-related financial disclosure, TCFD, framework is a key priority. We are making progress in this area and in our 2019 annual report disclosed our exposure to high carbon sectors, which is low, less than 0.5% of total loans and advances to customers. We have also updated our existing sector statements, tightening our coal sector appetite and have introduced new positions on 6 additional sectors. We are on track for full disclosure in line with TCFD by 2022. We recognize that improving our own environmental footprint is an important foundation for sustainability activity at Lloyds Banking Group. For example, we have reduced our operational carbon emissions by 63%, avoiding over 1.7 million tonnes of carbon entering the atmosphere. This is equivalent to taking 360,000 cars off the road. We know there is more to do, and we are continually improving, but our ambition to finance a greener future for the U.K. is clear. I would like to conclude where we started. COVID-19 represents an unprecedented challenge for the group and the whole of the U.K. We have faced many challenges, and we will all continue to be tested over the weeks and months ahead. However, I have great confidence in the resilience of our business model, the strength of our balance sheet and most importantly, the dedication of our colleagues. My thanks for your time, and I will now hand back to Andrew for questions from you, our shareholders.

Thank you, both, for your updates. As we outlined earlier, we will now move on to presubmitted questions. Thank you again to all those who submitted questions, we will endeavor to get through as many of these as possible. Our first question is about the cancellation of the dividend. We received a great many questions on this topic from our shareholders, too many to address given our limited time today. We will be responding to each of those questions individually, but we have chosen one question to put to our Board representatives today, which we think is representative of all those asked. That question comes from Mr. S. Dean. "I note that the dividend has been canceled. Given that many older shareholders rely on this source of income to top up their pensions and have already suffered a number of years without a dividend, will the Board be looking to reinstate the dividend relating to 2019 later in the year? Given the bank has stated, it is in a strong capital position, this would seem fair rather than shareholders losing 2 years of dividends with the quarterly dividends also being canceled." Chairman, if I may direct this one to you, please.

Thank you for the question, Mr. Dean. I fully understand your disappointment and recognize the importance of dividends to our many individual shareholders. So that this wasn't an easy decision for the Board. But this had to be balanced against the critical role of banks in supporting the economy and the individual businesses and the consumers to this exceptional COVID-19 crisis and ensuring that we and the other banks had a sufficient capital buffer to play that role. And I think it's important at this time, we're part of the solution, not the problem. So it's against that background and in response to a request from our regulator, the Prudential Regulation Authority that we, along with the other banks, agreed as a precautionary measure to cancel the 2019 dividend and make no further dividend payments until the end of 2020 so that we could hold that capital in the business. And I hope that you and other shareholders will understand that though difficult, this was the right thing to do in these exceptional circumstances. Now looking forward, at this stage, it's difficult to be clear how events will unfold. But the Board is very clear that any surplus capital that we have not needed still belongs to shareholders. It hasn't gone away, and we will take a decision on distributing any capital we no longer need at the year-end in a normal way.

Thank you, Lord Blackwell. Our next question comes from Graham Dale. "What are the Board's plans for branch closures and staff reductions throughout 2020 and 2021? " António, may I direct this one to you, please?

Well, we have publicly stated that we will pause any restructuring leading to job losses until the end of May, and we'll continue to review it on a monthly basis as we are in these difficult circumstances. This means that all colleagues continue being able to be completely focused on helping our customers under these difficult circumstances. And by the way, they will continue to be paid in full, irrespective of whether they can continue to do their job in full working from home. And we are also keeping as many branches open as possible, and we currently have more than 95% of our branches opened. In terms of the future, we have a multichannel, multi-brand strategy, which basically means that it is the customer's choice which channel to interact with us. It is their choice to decide through which channel to interact with us. And customers have been exponentially contacting us more through the digital channel and even more so under the current circumstances, but it is absolutely up to the customer to decide how and when to do it. Our commitment is to keep, as we have said publicly, the largest branch network in the country, keeping our present market share of 21% of the branches, which basically means we will keep 1 out of 5 of all the branches in the country going forward.

Thank you, António. This next question also deals with branches, so I'll direct it to you, too, please. Michael Baird from Bonar Bridge writes: "Over the last 5 years, I have seen a downturn in banking going from banks providing a service 5 days a week to areas giving no service at all due to bank closures. Bank of Scotland and Royal Bank of Scotland have been running mobile bank units, which have been coming to some villages up to 2 times a week. Now however, we are in the COVID-19 coronavirus lockdown, and the mobile units for safety reasons have not been running for 6 weeks to date. We still have a problem in the counties of Caithness, Sutherland and Easter Ross because some 22% of the population have a poor or negligible internet and cannot use digital banking. Post offices where available, will be able to do some banking. One banking competitor, Clydesdale, has reversed its closure program. Can Lloyds Banking Group also withdraw their further closure program in this COVID-19 pandemic period?" António?

Yes. I appreciate Mr. Baird's question. And I agree it's quite unfortunate that given the crisis, we had to stop our mobile fleet from operating. We have and -- we had and we still have the largest mobile fleet in the country. We were covering more than 200 locations, and we plan to resume that as soon as possible. In the meantime, we have also been helping our customers through, for example, increasing the limits on contactless cards in order to facilitate their payments. And we are absolutely committed as soon as it's possible to go back, as I said, with the mobile fleet operating as normally. And we have no plans under the current circumstances and crisis, we have no plans while we are under this lockdown to have any branch closures.

Thank you, António. Our next question comes from Ms. K Dobbs, who asks: "Could you please tell me what you're doing to support charities, which have been hit so hard during this crisis?" Sara, this question is for you, I think.

Thanks, Andrew. Yes. These are indeed very difficult times for charities, which face an increased demand for their services just as fundraising activity is having to be cut. So we continue to prioritize and protect funding to our 4 charitable foundations across the U.K. who support the vital work of hundreds of small and local charities, working with those experiencing a whole range of challenges, including homelessness, domestic violence or mental health conditions. Lloyds is also directly supporting specific needs. We're helping The Silver Line, part of Age UK, to continue to offer 24/7 helpline and friendship services to those aged 55 plus, who may be feeling lonely or isolated. And we're helping to support Mental Health U.K.'s money and mental health advice line. An initiative with We Are Digital is providing vulnerable customers with access to free and practical support to help them stay connected and safe online. It will also deliver up to 2,000 tablets to over 70s, who don't have a suitable device to access the Internet. And thousands of our colleagues are volunteering their time and skills to support their local charities, and we support them with time off, and we match their fundraising.

Thank you, Sara. The next question is also for you. Mr. J Green writes: "The bank has a responsibility to protect vulnerable customers and those in financial difficulty. What are you doing to support people in these situations?" Sara, if I may ask you to respond to that one as well, please.

Yes, of course, Andrew. So you're right, many more people will be struggling with their money or feeling vulnerable or isolated during this extended period of lockdown. It's a high priority for us to help people manage their money and to bridge the gaps in their finances. So we've provided about 1 million payment holidays on mortgages, credit cards and loans. And our customers can access a GBP 500 fee-free overdraft to give them a little breathing space. We're also helping people to keep access to our services. We've kept more than 95% of our branches open, albeit for shorter hours, but for some customers, the phone still remains the best option, which is why we've introduced a dedicated line for those over 70 years of age. And we have put in place measures to prioritize calls for vulnerable customers. We've also arranged for those who are not online to name a trusted person who can access their account on their behalf. So far, we've written to over 3 million elderly and vulnerable customers to explain the help available. And our colleagues in branches have reached out personally, calling many of these customers to check on them, making sure they're okay. Often these customers have had very little contact with anyone since lockdown started. So these calls can really mean a great deal.

Thank you, Sara. The next question comes from Will Attenborough on behalf of ShareAction. Mr. Attenborough writes: "Firstly, I'd like to congratulate Lloyds on its achievement of moving from last place in ShareAction's 2017 survey banking on a low-carbon future to second place in this year's iteration. This marks a step change in the bank's approach to climate change. We would also like to acknowledge the bank's January announcement and its latest commitment to reduce carbon emissions associated with its lending portfolio by more than 50% by 2030. This reduction is equivalent to removing emissions produced by 1/4 of all U.K. homes, demonstrates the need for the financial sector to align its practices with a 1.5-degree scenario. We would like to ask a point of clarification from the Board today. Would you be able to confirm whether the 50% reduction covers lending to the corporate sector?" Sara, if I may direct this to you again, please.

Yes, indeed, thank you for that. And yes, the 50% reduction definitely includes lending to the corporate sector. But we'll need to work with our customers, with government and with the market to meet that goal. Businesses currently account for about half of the U.K.'s emissions. So we'll be working very closely with them as they seek to cut their own emissions and transition to a new lower-carbon business model. And we've already made a good start. So we've already raised over GBP 2.8 billion of green bond finance for our U.K. corporate customers, more than any other bank. Our GBP 2 billion Clean Growth Finance initiative is already supporting projects such as metro lines, low-emission bus fleet for London. And over GBP 1 billion green lending fund for commercial real estate helped the University of West Scotland to create the U.K.'s first carbon-neutral office development at its eco campus in Lanexa. But the transition to a lower-carbon economy isn't just about businesses. So we'll also be looking for ways to support customers, for example, with more energy-efficient housing or to transfer to more sustainable electric vehicles. This is going to be a change involving all of us. So the more ways we can find to help, the better.

Thank you, Sara. Our next question comes from Marianne Murray and concerns the format of today's AGM. Again, this is a question that a number of shareholders have asked, and we've chosen Ms. Murray's question as representative of those we received. But all of the questions sent through will receive individual responses. Ms. Murry asks: "Why are Lloyds Banking Group unable to organize an AGM so that the shareholders can feel they have been able to engage? I have attended an AGM organized by Brewdog via Zoom, where over 5,000 shareholders watched and participated. It does mean that you have to be able to look at matters from a different angle and to move away from the old way of doing things. You are now able to sidestep matters of real concern to shareholders without any real redress. I feel that this is another blow in the confidence that I had about the decision I made to become a shareholder in Lloyds." Lord Blackwell, I think this is one for you.

Thank you. Well, unfortunately, as we've explained, given the current health crisis, we haven't been able to hold our AGM in a normal fashion, but we do have to hold an AGM for legal purposes. And our articles of Association require that we hold our physical AGM in order to pass the resolutions needed to continue the business of the company. But in order to keep people safe and to make sure we're following the government's guidelines, we've had to restrict the AGM to the legal minimum number of shareholder attendees that are needed to form a quorum. It's an unfortunate situation as I and my fellow Board members do value the opportunity to engage with you, our shareholders, and look forward to the AGM each year to do that. However, we did want to find a way of responding to shareholder questions. And taking account to the fact that we have millions of individual shareholders and the different access some shareholders have to technology, we concluded that this broadcast format to respond to questions was the best and fairest way of proceeding. But in addition to this broadcast, we will also provide written answers to the more common questions on our website so that all shareholders can see them. And as Andrew has explained, we will provide written individual responses to every question we received. So please do continue to submit your questions to the shareholder e-mail address on our website. Thank you.

Thank you, Lord Blackwell. Our next question, or rather questions, come from Richard Tapp and are directed at the Chairman. Mr. Tapp asks about a number of different topics. So I'm going to break this into sections and take the liberty of paraphrasing somewhat. The first set of questions pertains to the format of the AGM. Mr. Tapp asks: "How can an AGM, from which shareholders are excluded, constitute a meeting within the terms of Part 13 of the Companies Act of 2006? If the Board is not attending the AGM, who is and on what basis? Why have no arrangements been proposed to permit the proceedings of the AGM to be broadcast to shareholders? How can it be good corporate governance if the chairs of committees are not available to respond to shareholders' questions? Lord Blackwell?

As I said in answering the previous question, our AGM is an important event for the group. But with the current restrictions on people's ability to gather and travel, we've been forced to restrict attendance in order to comply with those restrictions and do everything we can to keep people safe and prevent the spread of COVID-19. So this year's AGM is taking place with a minimum number of shareholders necessarily to form a quorum under the company's articles of association and in accordance with the Companies Act of 2006. These shareholders, who are also employees of the group, have conducted the formal business in the meeting leading to the AGM resolutions, while ensuring that they adhere to social distancing measures to protect their health and the health of others. And although no Board members have been in attendance, the AGM has been held in a legally compliant manner. And because we are unable to permit shareholders to attend the AGM this year, we're holding this virtual shareholder of event to address shareholder questions. And as I've said before, every question will receive an individual answer. And shareholders are also welcome to submit questions to the Bank at any time throughout the year. You can send your questions by e-mail to the address on the website.

Thank you, Chairman. The second part of Mr. Tapp's question relates to dividends. He asks: "What were the circumstances surrounding the decision to suspend dividends? Why have no details of the so-called request by the PRA being circulated to shareholders or made available? Was this request really a request or an instruction? Does acting in accordance with a request from the CEO of the PRA render that person a shadow director in law? Lord Blackwell?

Well, I've already talked about the exceptional economic circumstances, which led the Board to agree to the PRA's request. So I won't repeat that. The PRA published the letter it wrote to the Lloyds Banking Group on its website. So this is a publicly available document, and we've also put a link to it on our shareholder website. And I'm happy to send you a personal copy. The important factor for us was that the PRA reached agreement for all banks to act together as part of their contingency plans to support the economy. And in answer to your question, the PRA's letter made clear that if we had not agreed, they stood ready to consider the use of their supervisory powers, which you all know are extensive and include the powers to set individual capital requirements for banks. As I've said, I recognize the cancellation of these dividends was disappointing to shareholders but in these circumstances, the Board agreed it was the right thing to do to support our customers and the economy.

Thank you, Lord Blackwell. The final part of Mr. Tapp's question related to executive remuneration. He asks: "Has the company taken a decision not to pay bonuses to the Board and management in accordance with the recommendations of the PRA? What reductions in pay of the Board and executive team taken in order to share in the pain imposed on shareholders? Again, Chairman, may I please ask you to respond?

As I mentioned in my address, in responding to the COVID-19 crisis, the Group Executive Directors and the Group Executive Committee have asked not to be considered for their Group Performance Share for 2020. And that means they will give up all of their performance bonus entitlement for 2020. And as we said at the time, that decision was made in solidarity with the communities in which we operate and in recognition of the priorities of our stakeholders. And I hope you agree it was the right thing for them to do. I can also assure you that no cash bonuses are payable to senior staff in the rest of 2020, which complies in full with the PRA recommendation on variable remuneration. And you should also note that the Group Chief Executive and the Chief Operating Officer asked not to be considered for any bonus for 2019, and that's detailed in our 2019 Annual Report and Accounts. So Mr. Tapp, I think you can see that we've been responsive to the need to align executive remuneration with the experience of shareholders, and don't forget that they are all required to have significant shareholdings, too.

Thank you, Chairman. Stuart Hicks has also asked a number of questions. So again, I'm going to break this down into sections. Firstly, in a similar vein to Mr. Tapp, Mr. Hicks writes: "I understand why the May final dividend in respect to 2019 is not being paid next month because of the capital position and the PRA letter arising from the virus pandemic. But why please, has it been canceled instead of simply deferred until better times return? And have the equivalent bonuses to the Group Chief Executive Directors and other senior management in respect to 2019 also being canceled or reclaimed? Again, Chairman, I'll ask you to respond, please.

I've already talked about the PRA's request us and indeed, other banks to cancel the payment of the outstanding 2019 dividend. So I won't repeat that. And as I have explained, the capital we have not distributed still belongs to shareholders. So we'll take a decision on distributing any surplus capital no longer required at the year-end in a normal way. I've also talked about the fact that every member of the Group Executive Committee voluntarily asked not to be considered for an annual bonus this year in solidarity with the communities in which we operate. So I believe I have already addressed all of these points from Mr. Hicks.

Thank you, Lord Blackwell. Next, Mr. Hicks refers to the Directors' Remuneration Report on Page 105. He notes that the performance assessment for the 2 CFOs for the different parts of the year both arrived at the same figure. He quotes 12 out of 5 in his correspondence. He asks for a comment on that. Furthermore, he notes that one of the key tests in the variable reward structure is that ordinary dividends do not fall below the stated progressive policy. But it states that he believes they have now done so. His question is: "Have all pre-vest tests for past awards for current and retired directors now failed?" And lastly, he asks: "Is there a target shareholding requirement for the Chairman and other non-executive directors as some other organizations have?" Again, Lord Blackwell, if I may address this to you, please?

Well, there's a number of questions there. Performance for both CFOs is based on the same finance division bounce gold card to be viewed as a whole. And their individual performance was then assessed based on each director's time in role, and the Committee agreed the same overall score should be given to both William and George. You asked about the dividend underpin. The ordinary dividend underpin relates to the new long-term share plan, which is set to replace the Group Ownership Share. So this specific underpin will not impact any existing awards. The first of the new long-term share plan awards will be granted in March 2021, and those will be subject to 3 financial underpins. And each of those underpins will be assessed over a 3- year cycle, so 2021 to the end of 2023 for the first award. And the Committee will then decide at the end of that, how much the award will vest if the underpin thresholds have not been maintained. Clearly, the circumstances of this year have shown that underpins cannot be taken for granted and would have impacted planned vesting this year have they been in place. However, the Remuneration Committee will, nevertheless, maintain a watching throughout this year on how the financial impact of COVID-19 should be reflected in remuneration. Finally, with regards to the shareholding requirement for non-executive directors, we do not have a specific shareholding requirement for non-executive directors. That's only for executive directors.

Thank you, Lord Blackwell. The next question is one for António, I believe. Norman Stanley Smith asks: "I see there is a provision of GBP 2.45 billion for Payments Protection Claims. How many claims are outstanding as at December 31, 2019? What is the estimate of these outstanding claims at this date? There's also a loss of GBP 1.29 billion in the accounts, up 39% on the last year. This is a substantial loss, and I think the shareholders are entitled to have some further information. What urgent action is being taken to reduce these losses?" António?

Yes. So in answering, Mr. Smith, I would like to say that we have processed around 80% of the remaining PPI claims. We have around GBP 1 billion of unused provision in the balance sheets as of March 2020. And the conversion rate has been around 10%, consistently around 10%. In terms of impairments, on the second part of the question, and within the context that we have and have been building over the years a low-risk business model, our core loan book as an evidence of that, and has been kept more or less the same over the last 9 years, which is a first clear evidence of prudency. We have a provision, GBP 1.3 billion during 2019. That is around 29 basis points in terms of credit cost, which we had -- is in line with the guidance we had given. We had said it should be below 30 basis points. So that was within guidance. And the fact that it increased 8 basis points during the year were mostly due to 2 corporate cases, 2 one-offs, 2 corporate cases that represented 8 basis points, which was exactly the increase on the previous year. Relating to Q1 of 2020, we have done for the quarter alone, GBP 1.4 billion of provisions. So very similar to the amount we did in the whole of last year because we wanted to take a view of the different scenarios that are possible going forward in the coronavirus crisis context. And within those scenarios and also taking into consideration the mitigating actions, both from the government and the Bank of England, we thought that as a result of that, it was the right thing to do an initial provision of GBP 1.4 billion. Most of it is an expectation of what will happen in the future according to the new accounting rules and according to those scenarios and mitigating actions that I just described as we have to make a trade-off between the scenarios and its impact on the economy, and there's a very significant mitigating actions of the furlough scheme from the government, for example, the guaranteed loan programs and the significant actions also taken by the Bank of England. And we will be reviewing this going forward, and we will give more information at Q2.

Thank you, António. The next question comes from Colin Harker. "Is the bank committed to making good on its pension funds deficit of some GBP 3 billion by 31st of December 2024 as previously indicated? If not, what is the plan?" Lord Blackwell, I'll pass this one to you, please.

Thank you, and I'm happy to address this. The pension fund has regular valuations, and we work closely with the Trustees of all our schemes at each valuation to agree packaging measures to address any deficit, enhance the member benefits and reduce the risks within the scheme over time. So as Mr. Harker noted, at the time of the last triennial funding valuation at December 2016, we agreed schedule payments up to 2024 to repair the deficit identified at that time through the valuation. And of course, we've been meeting those payments. As defined pension benefit schemes are revalued every 3 years, we're now entering a new band of discussion with Trustees based on the valuation date of 31st of December 2019. These discussions with the Trustees will be taking place throughout this year to confirm the updated funding position of the scheme and agree a revised funding plan to address the updated deficit. And that's required to be completed by March 2021, and the Trustees will communicate the outcome to members in due course. And I do, of course, recognize how important this is to both current and retired members in the schemes. So thank you for the question.

Thank you, Lord Blackwell. Our next question comes from Andrew Peel. "I would like the Chairman and Group Chief Executive to outline what they are doing in order to help serve the needs of shareholders and savers who have seen: A, substantial decreases in the share price during 2020; B, cancellation of dividends; and C, substantial decreases in savings rates?" Chairman, could you please address this one?

Well, I understand the frustration, but I'm afraid we can't control the share price. It's set by the market and reflects the general uncertainty about the economy and the impact that may have on banks and our customers. I've already addressed the issue of the cancellation of dividends, but I'd reiterate that the Board will decide on any dividend policy and amounts at the year-end 2020. And on the savings rates, as you all know, all interest rates are at historic lows, and they've been pushed lower because of the action of central banks in response to this unprecedented health crisis. And I'm going to say this does mean that saving rates are also low. And that's, unfortunately, the environment in which we are currently operating. However, as I said out in my early remarks, I can assure you that the Board and executive team are very focused on building a business that are able to sustain long-term profitability in a rapidly changing world. And we believe that's the best and only sustainable way to build real shareholder value.

Thank you. Our next question is from Rodney Clark. "As a shareholder, I'm interested to discover how you manage to meet diversity targets without creating an offense against the Equal Opportunities Act 2010? I understand the discrimination may be possible on the following basis taking positive action is legal if people with a protective characteristic are at a disadvantage, have particular needs or are underrepresented in an activity or type of work. However, I fail to understand how you can manage positive discrimination without creating negative discrimination against another group of people. I would be grateful if you could reassure me." António, if I may ask you to address this question, please?

Yes, of course. This question is very dear to me because we were the first FTSE 100 company to put out a target in terms of gender diversity several years ago now. And the point is, these are not to quotas. These are targets, and this is the really important thing. And we have also, apart from gender diversity, focused more recently and came out with targets externally for BAME colleagues as well. And the thought behind it is the diversity is good for companies. It improves the decision-making process. We have 0 tolerance for discrimination. We do this based on merit, and what we have been doing through the years, especially to remove the blockages, for example, in relation to diversity, to gender diversity, remove the blockages that were stopping women to asking to progress throughout the company. When at the lower levels of the organization, we have around 50%-50% between women and male in the organization. We found out at this time evolved and people progressed, more women dropped out. And we try to remove the reasons for that drop out by allowing, for example, co-working, working from home in terms to improve work-life balance. And all those points have, through the years, enabled us to improve significantly. We had gender diversity on the top 5,000 leaders of Lloyds, we had 28% of senior women 6 years ago. We have improved around 1% a year. And by now, we have around 36%. So we still are underrepresented, but we have made significant progress. And the main point is, it is based on merit, and these are not quotas. These are targets, and this will improve the decision-making progress -- decision-making process, and therefore, the quality of decision-making in the organization.

Thank you, António. Our next question is from Robert Tucker, who asks: "If Resolution 28, the authority to purchase preference shares is approved, will the shares be canceled or held in treasury? Any move by the bank to influence the future status of preferred shares by utilizing the voting rights of shares held in treasury will be tantamount to deceit." Lord Blackwell, I'll pass this one for you to answer, please.

Well, I can give you a very quick answer to this one, and I can confirm that all shares be purchased by the group, including preference shares, are canceled.

Thank you, Lord Blackwell. The next question comes from A.K. Beniston, who writes: "I note that despite changes, the remuneration policy for the senior post holders is still very complex, and that there is still a very high level of total compensation ratio between the highest and lowest paid. When will significant action be taken to simplify the total remuneration package for senior post holders and ensure that the earnings ratio between the highest paid and the lower quartile is reduced to a more acceptable value?" Chairman, may I ask you to address this, please?

Thank you. I recognize that our remuneration policy can seem complex as trying to certify a number of objectives to ensure awards are matched in performance. But we've listened to feedback from shareholders, and we've made a number of changes to simplify our reward structure. And that includes reducing the number of measures in our Group Balanced Scorecard from 20 to 15 and using a fixed 5% of underlying profit as the starting position for our Group Performance Share pool, subject to threshold conditions. So it relates directly to shareholder returns. And the new long-term share plan also provides a simplified reward structure that more accurately reflects the group's purpose and drives the right behaviors. Along with this, we've also significantly reduced pension contributions for all our executives to 15% as part of the proposed policy changes. For the Group Chief Executive, the policy changes represent a decrease in his total maximum remuneration opportunity of 29%. And to your point, we are committed to reducing the pay gap between executives and wider colleagues, and we continue to remain focused on addressing the gap from the bottom-up and not just from the top-down. So for example, we are making improvements to the pensions for all 50,000 colleagues who participate in defined contribution arrangements to make all members eligible for maximum employee contribution of 15% and to increase the employee contribution for our lower paid colleagues by 1%. And the group also for several years has been awarding higher pay increases to colleagues who are lower paid or paid lower within their pay rates than to senior managers. So in 2020, for example, the budget was set at 2.4%, with over 63% of colleagues at lower grades receiving a pay award 2.5% or over, while the pay budget from the senior colleagues was set lower at just 2%. And against that, the lowest paid colleagues have had awards of up to 3.5%. We're also proud to have been an accredited Living Wage employer since 2015. And from April 2020, we've raised a minimum salary for all full-time colleagues to GBP 18,200, reflecting a rate of GBP 10 per hour. So while we have further to go, I hope you can see that we are responding to these concerns, and we'll continue to focus on this over the coming year.

Thank you, Lord Blackwell. Our next 2 questions come from John Watkin. I'll ask you to address the first one, António. Mr. Watkin writes: "I thought I read the CEO was leaving very soon. Is that right? Can it be delayed for 12 months? As his skill and ability will be highly important to Lloyds Bank as we recover from this virus. António, what are your plans for the next 12 months?"

Thank you for the question. As I have said before, I enjoy the job. I like the people at Lloyds, and there is still a lot to do. And I am fully committed to executing and seeing through our current strategy. Therefore, nothing has changed from my previous comments on this matter.

Thank you, António. The next question from Mr. Watkin is also for you: "In terms of capital buffer and liquidity issues, at what stage does the bank feel it will have to ask the government for additional funds to survive? António, how would you respond?

Well, thank you for that question. I would like to start by saying that Lloyds Banking Group is in a very strong capital funding and liquidity position. Our purpose over the last few years and through the several strategic plans we did was to build a low-risk, simple, U.K.-focused bank, focused on the real economy, on the retail sector, on the SME sector and on Insurance, and that's what we have been doing. So to give you an idea, we now have a CET1 ratio so the core capital of the bank at 14.2%, one of the highest in the system. We have no net wholesale debt, which means that the funding we have from capital markets is lower than the amount of liquid securities we have in our account at the Bank of England. Our loan-to-deposit ratio is 103%, which means that we fund the loans we give to customers from deposits we take from other customers and also from the equity in the bank. And therefore, I strongly feel that the bank could not be better prepared to withstand the current crisis. And together with the fantastic work that all of our colleagues have been doing, we are absolutely focused on supporting our customers through these difficult times.

Thank you, António. Our final question comes from a shareholder who has withheld their name. They write: "I'm very disappointed with Lloyds and the banking system. People supported the banks during the 2010 crash, and now due to COVID-19, it appears that small business have a great deal of difficulty accessing loans, which are government-backed and which are needed to keep people hopeful that when things return to normal, their jobs and businesses will be there. There appears to be little or no compassion." António, how would you respond to that comment?

Our purpose, as we have been doing the several strategic plans over the last few years, our purpose has remained the same, which is to Help Britain Prosper. And you are absolutely right. These are unprecedented circumstances, very difficult circumstances, and that's one of the most important moments where we can leave to our purpose and help our customers and help Britain to recover from this crisis. And that's exactly what we are doing. I mean we have lent more than GBP 4.5 billion to small and medium-sized businesses since the start of the lockdown through the government programs or through our own programs, where we also have extended capital repayment holidays or additional overdrafts to provide flexibility to our customers. And on the recent Bounce Back Loan Scheme, Lloyds has been at the forefront of the scheme. On the first day the Chancellor mentioned that GBP 2 billion had been given to -- approved to customers on the first day, where Lloyds did close to GBP 1 billion of those GBP 2 billion with the money credited in the customers' accounts in the following days within 24 hours. So those are great examples of how we are supporting customers. And just to give you an additional example, I was recently focused on Yorkshire bakery Cooplands, a customer where we gave loans to go through the crisis and given those loans and support, they were able to distribute food products, some of them that they didn't even stock before the crisis to communities that were around the 3 factories they have in that location in Yorkshire. So that's another great example of our support. And we have been also supporting our retail customers as well part from businesses. I mean we are also a very strong bank on the retail side. We have done now more than 800,000 capital repayments, holidays to customers that have temporary difficulties. And therefore, we have provided them with a mortgage payment holiday or the same thing relating to their car finance agreements or other products to support our customers through temporary difficulties. Those are clear examples of our full support on customers, and this is one of the critical moments, as I said, where we can absolutely show our customers that we are living to our purpose of Helping Britain Prosper, in this case, recover from this crisis.

Thank you very much, António, Lord Blackwell and Sara. That concludes our Q&A session, but we will be posting answers to questions on other key topics on our website, and you can submit follow-up questions by e-mailing shareholder questions at lloydsbanking.com. Thank you for joining us today, and we wish you all the very best in these unusual and difficult times.