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

Good morning, everyone, and welcome to the Lloyds Banking Group 2025 Annual General Meeting on this beautiful day here in Edinburgh. I'm Robin Budenberg, and I have the privilege of being Chair of the group. It's a great pleasure to be here in Edinburgh, which recently marked its 900th anniversary. Edinburgh has long been a leading hub for financial and professional services, and our group is rooted in this city, where Bank of Scotland was founded in 1695, by the Scottish Parliament as the nation's first public bank. Welcome to all of you here in person, and welcome to those joining via the webcast. With over 2.2 million shareholders, we have more individual investors than almost any other U.K. business. Many of those shareholders are among our 28 million customers reflecting the significant role we play in U.K. financial services. In a short while, there will be an opportunity for you to ask questions. And after that, we will conduct the formal part of the meeting, including voting on the proposed resolutions. Before then, I'd like to share my thoughts on our performance last year. which will be followed by reflections from Charlie Nunn, our Group Chief Executive; and Amanda Mackenzie, Chair of our Responsible Business Committee. We've had one change to our Board over the past 12 months. Nathan Bostock joined the Board as a Nonexecutive Director in August 2024 and also became Chair of Lloyds Bank Corporate Markets. Nathan brings deep financial services and markets experience, and I am grateful to him as well as to all Board members for their invaluable contribution to the strong governance, foresight and stability of our organization. Moving then to the group's robust financial performance in 2024, a year in which we successfully completed the first phase of our 5-year strategy, returning our group to growth and improving cost and capital efficiency. Amidst a complex external environment, we've made significant progress in our ongoing transformation, improving customer experience and delivering strong returns for shareholders. Having met the guidance we had set for financial performance in 2024 and having reported a statutory profit after tax for the full year of GBP 4.5 billion, we were pleased to announce a total ordinary dividend of 3.17p per share for 2024, an increase of 15% on 2023, in line with our progressive and sustainable dividend policy. We've also announced our intention to implement a share buyback of GBP 1.7 billion during 2025, and this is in line with our target to pay down to a 13% core Tier 1 ratio by the end of 2026. I'm sure that shareholders will have been pleased to see some improvement in our share price, which I believe is starting to better reflect our consistent business performance and growing confidence in our medium-term outlook for higher, more sustainable returns. However, we recognize that the Court of Appeal ruling in relation to Motor Finance has created uncertainty, both for customers and for shareholders. The group continues to assess the potential impacts of this ruling and we hope to have greater clarity soon. We're pleased to maintain guidance on our strategic targets for 2026, reinforcing confidence in our transformation objectives and delivery. A strong economy requires strong banks with strong support from their shareholders. So we also value good engagement with key stakeholders in the public and private sectors. Such engagement should create the right operating environment for financial services to protect and grow the futures of those we serve. Our strategy is enabling us to deliver on our purpose of helping Britain prosper. We're transforming our business in order to build long-term resilience and prosperity for our customers, communities, colleagues and shareholders. Digital transformation is at the heart of our ambitions, uniting the best technology and talent to support customers in the way that they choose to bank. Our consumer teams are simplifying mortgage applications, increasing awareness and control over credit scores and redesigning our app to create a really clear, helpful experience. Our insurance, pension and investment team is enabling customers to take greater ownership of their financial futures. And our business and commercial banking unit is meeting customer needs faster and more effectively than ever before with significantly enhanced digital services for smaller businesses. And Corporate and Institutional Banking is making a critical contribution to the U.K.'s growth agenda through its support for our clients. I'm particularly proud of our partnership with higher education institutions across the U.K., which can be engines for regional growth and development. Their research increases private sector productivity by GBP 40 billion each year. So last year, we co-authored a report with PwC U.K. which set out how the catalytic power of universities can be deployed for the benefit of our communities and commerce. Also in 2024, we became the first major U.K. bank to lend to a community development financial institution, a not-for-profit lender that offers credit to customers who cannot access it elsewhere. We're proud to be helping small businesses, entrepreneurs and essential local employers to access the finance they need to get off the ground and to thrive. Our contribution is part of a larger fund, which is designed to support 800 businesses and over 10,000 jobs in the regions. Meanwhile, as the biggest commercial supporter of social housing, we're committed to working across the private, public and community sectors to help increase the provision of safe and secure homes in every part of the U.K. Last year, we extended our partnership with the charity crisis, and I know Amanda will also touch on this in a moment. I'd also mean like -- meanwhile, like to credit our group's own charitable foundations marking their 40th anniversary this year. In that time, supported by Lloyds Banking Group profits, they've contributed over GBP 800 million to small grassroot charities across the U.K. supporting some of the most urgent areas of community need. Of course, we could not deliver on our purpose and strategy without the sustained effort of colleagues across the whole group. And we, in turn, are committed to creating a fair, supportive and collegiate working environment where ideas and skills can flourish. And when it comes to flexible working, we're proud to have one of the best offers in the market for those with care and responsibilities or other needs. Our employee engagement score is now at 71%, that's 5% up on the previous year and also 5% above the industry average. We believe we're moving forward in the right direction for our colleagues. As part of this, we've launched our new people forums, enhancing the way we engage colleagues in our transformation journey and strategic priorities. We also value the annual MyVoice survey input from our colleague networks and valued partnership with our trade unions, Accord and Unite. Diversity of thought and representation is paramount to the success of our group, and its ability to innovate and deliver for our customers. We were the first FTSE 100 company to set targets for increasing both gender and ethnic diversity at senior levels, and we have also committed to double the representation of senior colleagues with any form of disability. In our view, inclusive business is strong business. To conclude, I'm proud of what Lloyds Banking Group is delivering for its customers, colleagues and shareholders. And I'm proud of the way we are doing this. We are making important long-term investments in the growth of our business and the health of our communities. Our financial results bear this out with strong capital generation and shareholder distributions. And I'm confident in our commitment to generating higher, more sustainable returns in the future, building on our strategic progress to date. So I'd like to end by thanking our colleagues for their efforts and their relentless focus on the evolving needs of our customers. Thank you. And I will now hand over to Charlie.

Thank you, Robin, and good morning to everyone here. We are proud to have successfully completed the first phase of our 5-year strategy, transforming our business to achieve deeper, better connected and more productive customer relationships and higher, more sustainable returns for our shareholders. As you've heard, we've delivered robust financial performance in 2024. Although overall income was down in 2024 relative to '23, income grew in the second half of the year, supported by lending growth and momentum in other income. In all, the group increased its underlying lending by GBP 9 billion to GBP 459 billion. We also saw over GBP 11 billion growth in deposits to over GBP 483 billion, and we've maintained discipline on costs despite the inflationary backdrop and areas of uncertainty. Importantly, our strategic initiatives generated GBP 800 million of additional revenues surpassing our initial target of around GBP 700 million, and we've exceeded our gross cost savings target of GBP 1.2 billion over 3 years. And growth in other operating income will continue to differentiate us from our peers. As Robin said, we recognize that the Court of Appeal ruling on Motor Finance has created uncertainty. We've responded by taking a key provision yet continue to have one of the strongest distributions to shareholders of any of the FTSE 100 companies, totaling GBP 3.6 billion for 2024. We will continue working closely and proactively with government and regulators and welcome their renewed commitment to create the right environment for competitiveness and economic growth. A healthy economy needs a healthy financial system, and the U.K. is a global leader. Turning to our results for the first quarter of this year released earlier this month. We demonstrated sustained strength with net income at GBP 4.4 billion, up 4% year-on-year. As I said, cost discipline remains a key focus for the group and total operating costs of GBP 2.6 billion, up 6% year-on-year are in line with planning assumptions. We remain on target to hit our full year cost guidance for 2025. Asset quality remains very resilient across the group, reflecting healthy customer behaviors and prudent lending. We continue to expect the asset quality ratio to be around 25 basis points for the full year. Statutory profit after tax was GBP 1.1 billion in Q1, and our robust financial performance has delivered capital generation of 27 basis points year-to-date and a strong CET1 capital ratio of 13.5%. Looking ahead, we continue to expect to generate around 175 basis points of capital for the full year. Our strategy is to grow, focus and change. This means building new capabilities, bringing in new technologies and then driving underlying business and market share growth, which we've done across every single part of the bank. Having reached over 22 million digitally active customers, an increase of 25% in 3 years and 7 billion log-ons in 2024, we've got the biggest digital service by far in the U.K. And we have a responsibility to support customers now and in the future in the way that they choose to bank. That is why our strategy is to create the most dynamic environment for the best digital talent, making major investments to overhaul legacy systems, hiring 4,000 tech and data experts and harnessing new technologies and better use of data to support colleagues and drive innovation. We know that AI will revolutionize financial services, and we're proud to have established an industry-leading AI and emergent tech team, helping us reimagine customer experience to be more personalized than ever whilst analyzing and applying enduring safeguards for customers. I'm proud of what we're delivering for our customers, going beyond support for financial resilience to strengthen financial empowerment. In our consumer business, we've launched Your Credit Score, a free digital tool with over 11 million registered users and over 780,000 customers actively improving their credit health in 2024 alone. And in collaboration across consumer as well as insurance, pensions and investments, our ready-made investments app is making investing inclusive and easily achievable for many more potential investors. Cross group collaboration is driving growth and competitive differentiation. For example, take-up of Scottish Widows protection by our mortgage customers has more than doubled since 2022. And our insurance customers are benefiting from new digital capabilities. After Storm Éowyn, 91% of claims were initiated online accelerating payments and peace of mind. We've also grown our digital service for business banking from 10% in 2021 to supporting over 50% of our SMEs today. providing faster automated lending decisions and immediate access to a wider range of products. While in Commercial Banking, our increasing depth of relationship has grown our other income in this part of the business by over 30% versus our original target of 20%. We have a strategic imperative to join up across our organization in support of our customers and new commercial growth opportunities. Once we lack dedicated propositions for key customer groups in just 3 years, we've built a growing base in high-value areas, such as mass affluent, gaining around GBP 25 billion in banking balances and increasing our market share of mortgages for this segment from 9% to 22%. And from this year, we'll welcome customers from across our brands to access their accounts, products and services at any of our Lloyds, Halifax and Bank of Scotland branches. Over the past 5 years, with partners across the private and public sectors, we've supported infrastructure projects worth over GBP 100 billion, fueling regional regeneration and sustainable growth from financing the U.K.'s largest operational battery storage system to enabling the Kyle wind farm to power 163,000 homes. But wherever I go in the U.K., there is one challenge, which is common to all the need for more good quality genuinely affordable housing, the foundation for strong communities, jobs and productivity. As the U.K.'s largest mortgage lender, we've provided around GBP 100 billion to first-time buyers since 2018, supporting 65,000 in 2024 and 20,000 in Q1 2025 alone. But we simply need more housing for buyers, renters and the growing waiting list of people in temporary accommodation. Since 2018, we've delivered GBP 20 billion of financing for social housing, including over GBP 2 billion in 2024, of which 50% was for sustainability linked builds and retrofit. Last year, we launched Lloyds Banking Group's pioneering MADE partnership with Homes England and Barratt Redrow, creating a master developer to deliver tens of thousands of new homes. This is cross-sector collaboration at its best, at significant ambition and scale. And we're also changing ourselves to do things differently, converting our former data center in Pudsey, Leeds into around 100 affordable homes. At Lloyds Banking Group, we're committed to helping Britain prosper, fueling inward investment and inclusive, sustainable growth. The U.K. is a market leader in innovation, future critical industries, including technology and clean energy. A strong economy needs strong banks, and we take seriously our role in powering innovation and enabling growth, the growth which creates jobs, raises living standards and funds, public services. In recent years, U.K. households and businesses have had to show considerable resilience. And U.K. Finance found that household savings and deposits have, in fact, increased over the past year. We want to continue building their strength and prosperity as we do for all customers, communities and shareholders we serve. And we're uniquely equipped to do just that. We have a relationship with around half of all adults in the U.K. and are transforming our organization with relentless customer focus, supporting today's needs and designing brilliant intuitive products and solutions to realize tomorrow's ambitions. Thank you to my colleagues who are keeping our customers at the heart of everything we do, and thank you to everyone joining us today. May I now hand over to Amanda Mackenzie, Chair of our Responsible Business Committee.

Thank you very much, Robin. Thank you, Charlie, and good morning, everyone. I hope you've seen today that we are building a resilient and profitable business with purpose to deliver higher, more sustainable returns. And our belief in purposeful growth holds firm even as we face a more turbulent geopolitical landscape. Our strategic choices deliver value for shareholders alongside positive outcomes for our customers, colleagues and communities, and I'm so pleased to be able to share more details of our progress. As Robin and Charlie have touched on, safe, good quality homes are essential to helping Britain prosper. We've continued to champion social housing. And last year, we announced the National Wealth Fund partnership, a GBP 500 million fund to boost the retrofitting of social homes in the U.K. a great demonstration of how we're delivering on our strategy by increasing the number of safe, sustainable and affordable homes. The chancellor calling it exactly the kind of investment we want to see to grow our economy. Aside from retrofitting, we're unlocking growth in the housing sector. And in July 2024, we announced a new GBP 200 million financing commitment to support local providers who offer housing to those most in need. We partnered with Homewards founded by the Prince of Wales and the Royal Foundation, which aims to make homelessness rare, brief and unrepeated. Bournemouth Churches Housing Association is a great example of a specialist provider that offers wraparound support for local communities. And through our partnership, we will deliver GBP 50 million of brand new lending for smaller specialist providers that have previously faced barriers to finance. Our scale connects us to almost every community in the U.K., so we recognize where disparity still exists across our nations and regions. And through our regional impact fund, we have committed to investing GBP 1 billion in opportunities that will have significant social, economic or environmental benefit at a regional level and growth will follow. Turning to charity support with our partner crisis, we have now raised over GBP 3 million. And as we've heard from Robin, this year also marks 4 decades of our charitable foundations. And in that time, they've left an indelible mark on the U.K.'s charity sector from the launch of Childline's first help line in 1986 with a GBP 65,000 grant to early support the homeless charity Centrepoint. And in 1992, we also launched Matched Giving and have raised an amazing GBP 58 million through our colleagues' fantastic efforts from running marathons, baking bread, quizzes, you name it. Our foundation's legacy is very impressive, and we are guaranteeing at least GBP 100 million of further funding by 2030. We've heard how our ready-made propositions are helping customers to start investing and grasp their retirement planning. Two other tools we have launched to support and empower our customers include a Benefit Calculator and a Bill Switcher. Since launching last autumn, over 1 million customers have engaged with our benefit calculator to understand what additional support they may be entitled to. And a further 300,000 customers have accessed Bill Switcher to check on potential savings, supporting customers with easy-to-use digital tools which grow their resilience. We've continued our leading support for businesses. They are the backbone of our economy. They drive innovation. They're a vital ingredient in our local communities. We've empowered underserved business owners, and alongside partners, we've invested over 32,000 hours of targeted support for more than 9,000 underrepresented entrepreneurs. And looking to our own business. We have continued to focus on ensuring our workforce reflects the customers and the communities we serve. We've evolved our approach to diversity and now aim for a gender balance of 45% to 55% in all executive roles by the end of 2030. We've updated our ethnic diversity targets, and we're aiming for 3.5% to 4% of Black Heritage and 19% to 22% of black, Asian and minority ethnic colleagues in executive roles by the end of 2030, increasing our ambition for senior colleagues. We believe that a diverse and inclusive workforce is key to attracting and retaining the best talent, which is vital to serve our customers and deliver our strategic transformation. And finally, to climate. At a time when the hard one consensus on climate is being challenged, climate and nature remain key to our strategy. We're in no doubt they provide significant growth opportunities and are fundamental to the long-term resilience of the U.K. economy. The debate around climate change and nature degradation may be intensifying, but undeniably, so are their physical real-world impacts. We'll continue to work with customers, government and the market to support the U.K.'s transition. Since 2022, we have provided over GBP 47 billion of sustainable finance. In Scottish Widows, we achieved our cumulative investment target of GBP 25 billion in decarbonization strategies 1 year early. We're driving meaningful growth opportunities for the U.K. In 2024, we supported more than 45 infrastructure initiatives across the U.K. with a cumulative value of over GBP 37 billion. One such project is the construction of Net Zero Teesside Power a major carbon capture and storage project, which once operational, will capture 2 million tonnes of CO2 a year, the equivalent of all the homes in Newcastle and Durham, a great example of local job creation, economic growth and decarbonization. We've also continued our extensive support for U.K. farmers. And alongside our partners at the Soil Association Exchange, we've launched Exchange Market, an innovative 1 million carbon insetting fund, which works across the food supply chain and rewards farmers for changing to more sustainable practices, so ensuring their profitability and productivity as they transition. As I close, this last year has been one of transformation and purposeful growth. I'd like to thank Robin and Charlie for their unswerving dedication and leadership and our wonderful tireless colleagues who support our customers and communities every day. We face the rest of 2025 with confidence in our strategy and resolute focus on delivering profit with purpose to help Britain prosper. Thank you very much.

So thank you, Amanda. And I'll now say a few words about the resolutions we'll be voting on today before giving the shareholders the opportunity to ask questions. Voting will open before shareholder questions and will remain open for the duration of shareholder questions. I'll give you a reminder to vote towards the end of shareholder questions and again, before voting closes. Unless there are any objections, I'll now take the notice of Annual General Meeting as read. Thank you. Resolutions 1 to 19 are ordinary resolutions requiring a simple majority of more than 50% of the total votes cast to be approved. And resolutions 20 to 25 are special resolutions, and to be approved require at least 3/4 of the votes cast to be in their favor. All the resolutions will be decided by a poll, which means that each shareholder present in person, by proxy or corporate representative, has 1 vote for every shareholder -- share held, sorry. Turning to the voting handsets. We've got one here. Could I first check that everyone would like a handset -- that everyone who wants a handset has got one. Please raise your hand if you need one. Many of you will have used the handset before, and the slide behind me explains how to use it for voting. Once I declare voting open, the list of resolutions will appear on your device. While you have the choice to withhold your vote, this is not a vote in law, and so it does not count either for or against a resolution. If you wish to vote on all resolutions in accordance with the Board's recommendations, there is an option to do this, which is shown at the top of the list of resolutions. To change your vote, choose the resolution and simply vote again, and your original instruction will be replaced. To cancel the vote, select the resolution and press the X button. The vote will be removed and not counted. If you require help, please raise your hand and one of our stewards will help you. So I now declare the voting open. I'll now move to the part of the meeting where shareholders or their appointed proxies can ask questions. Out of respect for all shareholders, I ask that you ensure your question relates to the items of business before the meeting. I'd also please encourage you to keep your questions short and avoid delivering long speeches. If you have more than 1 question, please ask all your questions at the same time. We take customer complaints very seriously, and it's important that they are dealt with properly. Customer complaints are not something we can resolve in this room at the AGM, and it would be inappropriate to do so. There is a customer service desk outside in the reception hall where some very experienced colleagues are available to help you with any specific queries on customer matters. So please raise any individual customer issues or inquiries with colleagues at that customer service desk in the reception hall. To help proceedings, shareholders who want to pose a question were asked to register at the question registration desk before coming into the auditorium, and I'm aware that many of you have already done so. Thank you for doing that. For those who haven't, please raise your hand now if you want to register a question and a steward will assist you. When it's your turn to ask a question, a steward will take you to 1 of the 2 question points. And if you're attending on behalf of someone else, please state your name as well as the name of the shareholder you represent. I'd like to take a moment to remind people to vote now if you wish to do so, as I will be closing the voting when the question-and-answer session ends. So I'm going to take a number of questions, as I say, that were registered in advance. First of all, I think we have our first question.

Good afternoon, Chairman and Board of Directors. My name is Sara, and I am here representing the Church of England Pensions Board. As a shareholder, we would like to acknowledge the leadership that Lloyds Bank has demonstrated in the banking sector over recent years. We were particularly encouraged by the bank's ambition to fully exit from all entities operating thermal coal facilities by 2030 and leadership as the first U.K. bank to make a commitment not to provide direct finance to new oil and gas projects. Indeed, analysis from the 2024 banking on climate chaos report shows an encouraging trajectory that Lloyds direct financing towards fossil fuel companies has decreased from 36 clients and just shy of $3.5 billion in financing in 2016 to 15 clients representing just under $1.9 billion in financing in 2023. This represents just 0.18% of fossil fuel financing as a percentage of your assets based on 2023 data. Leadership on net zero has never been more critical than it is today. the year 2024 marked the hottest year on record, significantly increasing the frequency and intensity of extreme weather events. And I think we can look to Valencia and Los Angeles as examples of this. Banks and bankers have an incredibly important role in catalyzing the transition to net zero through supporting the financing of industries that they want their future generations to inherit. We believe that Lloyds Bank has the desire to steer the economy in a positive direction at this critically important moment. Given your efforts to date, we ask if the Board will commit to fully exiting any financing to any entities that are pursuing oil and gas expansion with a clear deadline.

Thank you, Sara. As you say, we have been active in reducing our exposure to oil and gas. In fact, the most up-to-date numbers suggest that they are now 0.1%, which is down 70% over the last few years. But we also think it's really important to help our clients in their transition. And one of the things that we do is if we do have a client in the oil and gas sector, as in fact, in any significant emitting sector, we work with them on transition plans to talk about how they can go from where they are today to where they need to be to meet the commitments set out by law in the U.K. So that's a very important part of what we believe is our role in helping Britain towards a net zero future. Thank you. I think we have the next question from [ B ].

Hello, everyone. Thank you for that response. This question follows on really neatly. My name is [ Katherine Beckmann ]. And I'm asking this question on behalf of ShareAction. I'm asking Lloyds Banking Group to set a red line on oil and gas expansion when assessing clients client transition plans, so as to reflect leading practice in the banking sector. Lloyds Bank reviews the transition plans of its oil and gas clients, but it doesn't currently state what it considers to be red lines in relation to climate harm. This is very concerning given that the bank increased its financing of fossil fuels between '22 and '23. Further expansion of oil and gas fields does not fit into credible transition scenarios. So establishing a red line for this is a minimum for engaging properly on transition plans. The longer that Lloyds Bank finances oil and gas expansion, the further it falls behind leading practice. For example, Danske Bank which requires oil and gas clients to establish credible transition plans, explicitly specifies that this must include a commitment not to expand supply of oil and gas beyond that, which was approved for development by the end of 2021. When ShareAction raised the question of this at the AGM last year, the response was that the bank is talking to oil and gas clients about transition plans and that more detailed disclosure is being discussed. But the bank is balancing transparency and practicality. Lloyds has now had a whole year to speak to these clients but has not taken further action. During this time, major oil and gas companies, including Lloyds clients such as Shell and BP have unfortunately, rolled back on their climate commitments significantly. If Lloyds is really serious about engaging with its clients on the transition, it would set clear time-bound expectations to ensure that dialogue leads to actions that are aligned with the bank's own net zero ambitions. By continuing to finance companies, which is still expanding oil and gas, Lloyds faces growing reputational risk while increasing climate risks. These risks can materialize into financial risks for the bank's own shareholders and their beneficiaries. Lloyds has shown good leadership in the past, for example by committing to an ambitious amount of sustainable finance in comparison to its fossil fuel financing. Lloyds now has a great opportunity to move a step beyond other U.K. banks by ending support for companies expanding oil and gas. So my question is this. A year on from your 2024 AGM, when you said that Lloyds would be talking to oil and gas clients about transition plans, and discussing more detailed disclosure, how has the bank decided to proceed? Will Lloyds Bank show leadership and commit to set a red line on oil and gas expansion when assessing the transition plans of its clients?

Thank you. And as you and the previous questioner have kindly said, I do believe Lloyds is a leader in this field and at 0.1% of our lending commitments, that is a tiny figure. But it is something we, as you say, need to focus on. I think red lines are quite difficult. But what we do when we're talking through transition plans is we judge the customers' long-term commitments. And frankly, if we find those unacceptable -- at the end of the day, if we don't think we can persuade them of the direction that we think is appropriate, then we will have to exit those relationships. But that, for us, is very much a last resort. I will make sure that we take on board your comments as part of that -- those discussions that we have on the transition plans.

How are you enjoying living in my house?

I think I'm living in my own house actually.

No. You're not. That's fine. Anyway, on behalf of Nigel Harper, the highest qualified banker in Britain and the Head of the Institute of Chartered bankers, how many professionally qualified bankers are on what you call the Board?

Thank you, Mr. Brotherston. We think in making appointments to the board, the most important element is banking experience. And as you can see, from the CVs of the Board Directors you see in front of you, the vast majority have literally decades of experience in financial services and particularly in banks. And indeed, our new appointment this year, Nathan Bostock, was for many years Chief Executive of Santander Banking in the U.K. So we think that experience is the most important and that is very much how our regulator looks at it. Most of board or the key board appointments need to be approved by our regulator, and they will look very carefully to make sure they feel that the members of this Board have the appropriate banking experience.

Right. So what's happened to the Dobbs report into the HBOS Reading fraud as it's been 8 years since Lloyds commissioned it and it's cost shareholders around GBP 50 million to date and still not being published yet.

Thank you, Mr. Brotherston. To begin with, I would once again, as I do every year, apologize to those affected by that fraud situation. And I'm glad to say that the Foskett review is now virtually complete in terms of managing restitution to those clients. The Dame Linda Dobbs report you referred to is very much something that is an independent review and not under our control. We would like to see it published as soon as possible, but any questions as to when it will be published should be addressed to Dame Linda Dobbs and her team because they are very much independent from us. .

Lloyds and its lawyers intervene with the BBC to water down the Panorama program last month, did Lloyds failed my business?

I -- of course, we'll watch the Panorama program last year. And...

No, no, I'm talking about the one last month, Lloyds failed my business.

The first point I would say about this is we are very proud of our business support unit, which works -- we are very proud of our business support unit, which supports businesses going through difficulties. We are, of course, very sorry when those businesses ultimately do not come through that process. We don't believe that there was anything new disclosed in the Panorama program, all those elements have been properly reviewed both internally and externally, and there has been no significant finding of fault.

This was just the tip of the iceberg and it was sufficiently watered down. And from that point of view, it appears that you've lied twice today and you have a history of lying to shareholders. And it's even known in the group of us that Kate Cheetham is the Paula Vennells of this, and Kevin Hollinrake MP, the -- right Honorable Kevin Hollinrake describes the frauds that are going on within Lloyds Banking Group, yourself, Charlie Nunn, Kate Cheetham are all involved in as 1,000x worse than the post office fraud. This is rampant criminality. You've been caught and exposed for these crimes where shareholders have payed in bribes to police 4.6 million over the last 5 years, and you have caused these problems, and the whole situation is unacceptable. You are involved in serious, serious criminality when are you going to address the criminality. Are you prepared to resign over the criminality you're covering up?

Mr. Brotherston, we dispute virtually everything you've just said, as you would expect us to do. .

Of course, you do. You're lying.

Well, if you have any issues with the BBC progress...

We have evidence.

Please address those to the BBC. We are completely confident.

I propose a vote of no confidence in Budenberg, Cheetam, Nunn and the rest of the Board that are going along with this. So may I have this motion seconded, please? Well, it appears that most of the shareholders are quite happy with you throwing shareholders' monies at lawyers at the rate of GBP 1 billion to obstruct justice. Nobody? You're all quite happy with what this Board is doing criminally. Disgusted, quite frankly, disgusted.

Thank you, Mr. Brotherston. Next question, please.

Hello. My name is Robin Jason. And just as a background, my background has been in financing, insurance and banking. I've had a look at the 2024 accounts, and I just want to ask there seems to be some securitization on the book, but not much on the corporate book from what I can see. And I just want to know why there is no significant risk transfer on the corporate book. And as an example, GBP 25 billion risk transfer would release about GBP 1.7 billion for the bank.

Thank you, Mr. Justin. Yes, a really good question and balance sheet efficiency is a major priority for us as a Board and particularly from the finance perspective. So -- and William spends an awful lot of his time doing a wide range of different transactions to do exactly what you are suggesting. So it's a great question and to give William his credit I get to allow him to say what he does rather than try and say it myself because I wouldn't be able to do it nearly as well as he does.

Thank you, Robin. And thank you, Mr. Justin. It's a good question. As Robin says, we take the efficiency of the balance sheet very seriously. We're constantly looking at the returns earned by holding the assets on the balance sheet. And of course, that includes the capital that is required to hold them there versus some of the other alternatives that may be offered by the market. As a result, we do engage in risk transfers of the type you described in both the corporate book as well as, as you say, securitizations in the retail book as well, particularly mortgages. We do that where it makes sense for our shareholders and of course, you as one of them. We did both last year, that is to say, securitizations in the retail side and risk transfers in the corporate side across a variety of different corporate segments. And I expect us to continue to do so this year as part of our overall approach to ensuring efficiency on the balance sheet and capital optimization is part of that. So it's very much in the plans, and we'll continue to do so.

Good morning. My name is Paul Carlier, former Director of Foreign Exchange Trading at Lloyds Banking Group between 2012 and 2014 and whistleblower. I've got 4 questions. Unfortunately, there is a going to be a reasonably lengthy preamble before I get to the question for obvious reasons. In 2016 and 2018, Black Horse denied 2 complaints that I've made on behalf of 2 family members in respect to car finance. I had alleged that the APR on these car finance agreements had been unlawfully applied by the car dealer and not by Black Horse the lender under an incentivized commission arrangement, whereby Black Horse paid the dealer, a higher commission, the higher the APR, the dealer set on a whatever they could get away with basis, and where the dealer had no knowledge of the credit score or status of the customer. Black Horse denied the complaints, denying any incentivized commission arrangements existed and claimed the APR had been determined by the credit score obtained from Experian. Black Horse made the same representations to the Financial Ombudsman Service when I escalated both. The Financial Ombudsman denied both complaints on the basis of those Black Horse representations, albeit the new evidence now proves that the Ombudsman also acted unlawfully and dishonestly that will be addressed in due course. I'd also reported these unlawful practices to the FCA in 2016 and provided them with significant evidence proving that Black Horse was using these unlawful practices across its entire dealer broker network. The FCA eventually launched what would be a 2-year investigation, but in 2019, they produced what they and you, the bank knew to be a dishonestly limited final notice to protect you and other lenders and deprive millions of consumers have redress they wrote, dishonest and unlawful consumed by you and the regulator. So I took the various smoking gun evidence I've given to the FCA to a law firm to pursue this rightful justice and remedy for my family members and the millions of others all being dishonestly deprived of it. In July 2023, as the Board will know, the GBP 1 billion class action was filed by these lawyers against Black Horse Lloyds along with Santander and MotoNovo. A class action that would expose the FCA and Financial Ombudsman dishonesty and consumer in 2019 and subsequent to that. And therefore, forcing the FCA and the Ombudsman to conceive a plan whereby the Ombudsman would finally uphold 2 complaints Specific to incentivized commission arrangements having denied 7,000 between 2019 and January 2024. And the FCA would then use these upheld complaints, one of which was against Black Horse to dishonestly feign ignorance as to these unlawful practices prior to this and the other unlawful practices yet to be exposed, but that you are aware of. And they announced a new review that we'll now see redress for all victims and to kill the class actions that would expose the prior dishonesty by the FCA and Financial Ombudsman. As you all know, in defending a judicial review bought by Barclays noticeably that Black Horse did not choose to contest the decision against them. The FCA in August last year produced a detailed grounds document that they presented to the High Court supporting the Ombudsman decisions, and confirming that these practices had always been unlawful and certainly as far back as January 2007. And proving absolutely every litigation I've made to this effect to Black Horse and the Ombudsman and the FCA since 2012. As you know, as a result of this, I sent a new complaint to you and Mr. Nunn personally on 31st of December last year, citing the FCA document and various evidence I had proving the bank's dishonesty, when denying these complaints and the making of various false representations were in doing so. As you will know, on the 18th of March this year, your group executive complaints team sent 2 letters to me and confessed that both of these finance agreements had indeed been sold subject to an incentivized commission arrangement, entirely contrary to everything you had ever said in response to these complaints previously, literally a confession that these agreements have been unlawfully missold and importantly, a confession that you had lied to me and my family members repeatedly and repeatedly lied to the Ombudsman. However, in the same confession letter, you seek to limit the remedy from my 2 family members to whatever terms of redress the FCA eventually decides upon. And remember, this isn't the one that's subject to the Court of Appeal decision, this is the Ombudsman decision, and literally refused to investigate the various new allegations that I made specific to the multiple false representations made previously in respect to both of these complaints. You wrote that these matters had been investigated and decisions produced previously, and so we will not be reopening these cases. Prior decisions that you referred to that you have now confessed in the same letter were essentially a fraud, you are seeking to limit their address for multiple years of dishonesty, abuse and distress and inconvenience to the same as that, which others will get other victims who did not even know they were a victim would not be getting redress at all but for these 2 family members and the complaints I made on their behalf. And let's not forget that you've known all along that the first complainant was a cancer suffering pensioner. So my question to you, Mr. Budenberg is do you believe that it's fair and appropriate to treat these 2 complaints in that way? Or are you going to finally engage with me and see to it, the appropriate remedy for these 2 cases is provided? Or are you going to force this cancer suffering pensioner to instruct legal representation to secure the appropriate redress they're due as a result of these extraordinary recent concessions by Lloyds to multiple unlawful actions against them. Now this is specific to 2 individual complaints, but they go to the heart of the entire car finance standard. Without these complaints, Lloyds would not be facing billions in redress now. So your answer, please.

As I said at the beginning of the question session, issues about individual customer complaints are things that need to be dealt with outside this room. I can't engage in this level of detail. It would be inappropriate.

The letter was sent on your behalf on the 18th of March this year in response to the complaint I made specifically to you and Mr. Nunn. And under FCA SM&CR, you are personally therefore liable for any response to that complaint. So Lloyds has confessed to essentially fraud against those 2 customers over many years. And that was sent on your behalf, but you don't appear to have any understanding of this.

We believe that we complied with all legislation, regulation, regulatory requirements during that period. So I would be surprised if there were confessions of fraud coming from Lloyds. As I say, this is a customer matter now, which you need to deal with, with our customer complaints team.

The letters were sent on your behalf, the letter say, and I quote, that, yes, this agreement was sold -- both agreements were sold subject to incentivized commission arrangement that existed between Black Horse and that dealer. That's entirely contrary to everything that you've ever said. That's literally a confession to the misselling of these -- these agreements and the multiple false representations that the bank has made in response to the complaints I made alleging exactly this. Now this letter on the 18th of March was sent on your personal behalf. So you've confessed, but now you're not going to do anything about the unlawful egregious actions that you've confessed to.

Mr. Carlier, as I say, this is a customer issue.

No, it's not a customer -- you are bound under FCA SM&CR. These are the 2 complaints, without which Lloyds would not be facing billions in redress now okay, at the expense of every shareholder in this room. This goes to the heart of it.

If you want to talk about the broader issue of Motor Finance, I'm perfectly happy to engage on that. if you want to talk about individual customer issues, I cannot talk about that in this room.

This letter was sent on your behalf. I'm asking you your personal opinion, Robin, is that an appropriate way to treat these 2, having confessed to all of these offenses, is that an appropriate way then to refuse these victims the appropriate remedy for the distress that they've endured for the last 7 or 8 years.

It is quite clear that we are not going to resolve this in this room, and it would not be appropriate to do so, Mr. Carlier.

I'm asking your opinion. You've confessed...

I'm not going to profess opinion on customer issues inside a shareholder meeting. That would be inappropriate.

This is under your -- you are...

I can say it as many times as you like Mr. Carlier, but I am not going to engage in this meeting, as I said, right at the beginning of questions.

But this is a response you sent. This was sent on your personal behalf.

I can say it as many times as you like, but I've made it absolutely clear that an AGM for shareholders is not the appropriate time to talk about individual customer issues. I'm perfectly prepared to engage on Motor Finance as an overall issue but not on individual customers issues.

Right. Okay. Fine. I'll move on then. Follow-up question on this. I raised my allegations and evidence to Adrian White former CFO of the bank regarding these unlawful practices and warned him that the bank could face a class action if they did not put a stop to these practices and provide the remedy to my family members and others. He and the bank -- this was many years ago now. He and the bank did not, and the bank is now facing a total liability for redress legal and admin costs of at least GBP 2.5 billion, more likely much higher and much higher than it would have been, had you put a stop to these practices many years ago. Therefore, will you seek to call back any of the bonuses paid to Mr. White and other executives at Black Horse as well who are aware of these practices and failed to put an end to them and were paid a bonus as a result of the additional money that these unlawful practices we're making?

As I say, we believe that we complied with all appropriate regulation and law during this time. So in that circumstances, it would not be appropriate to claw back.

The FCA in their detailed grounds documents submitted to the high court said that these practices were unlawful and a breach of long-standing law dating back to at least January 2007. And had always been unlawful. I know Charlie mentioned something about, oh, there's a retrospective thing regarding the court of appeal. But these practices, the FCA determined last year were a breach of long-standing law and regulatory codes going back to at least January 2007. And hence, that's why every car finance agreement sold from January 2007 is going to get redressed. So these were not -- you did not act lawfully. Or are you saying the FCA has got it wrong?

I'm saying exactly what I've said, which is we believe that we complied with all the legislation and regulations in time, in place at the time of these issues.

Really. So even after November 2014, when the Plevin versus Paragon judgment was issued by the Supreme Court, which essentially established that setting the price on something on whatever you can get away with basis as the famous PPI case was unlawful. You're saying that the bank did not recognize the same practices going on in respect to car finance after that decision.

I can again repeat what I say as many times as you would like Mr. Carlier.

So what are you saying? You're saying -- you're admitting that the bank did not recognize that Plevin determined that these practices are unlawful.

I'm not going to get into litigation details. .

It's not a litigation detail. I'm not litigating with the bank. This is the FCA. The FCA has made these determinations. Perhaps Kate can speak on this.

I'm quite happy to take this. Thank you, Mr. Carlier.

Okay. So you're saying then that the bank did not recognize that Plevin -- these practices...

I'm saying exactly what I just said, which is -- and if you'd like me to talk about the provisions, generally, the things that impact on shareholders, I am, of course, very happy to do that, Mr. Carlier.

Right, but you're not going to claw back any of the bonuses paid to executives that knew these practices were going on and were paid a decent and probably a higher bonus as a result of the extra profits, these unlawful practices would made.

Not based on what we are aware of at the moment.

Right. Okay. Okay. So let's get on to the provision then. I alleged at last year's AGM that the bank was falsifying in their accounts and in public statements, what it knew to be the true liability it had to car finance. At the time, you'd said it was GBP 450 million. As you know, I challenged this and said that you knew as I did, that the true liability for the bank from redress, legal costs and admin costs would be a minimum of GBP 2.5 billion if consumer redress was limited to that decided upon by the Ombudsman in their upheld decisions. This being the difference between the APR, the customer got and the APR that was the lowest rate that Black Horse was prepared to lend at but for the incentivized arrangements or a minimum of GBP 4.5 billion if the bank was forced to repay all interest on these agreements. That is -- the additional interest is what's covered by the Court of Appeal decision. I alleged you were low-balling this, so as to deceive investors in the market to manipulate the share price higher. The share prices obviously dropped 15% to 20% after the Ombudsman announced those decisions. I alleged you were low-balling this so as to deceive these investors and would eventually and gradually drip feed further provisions over time. You were adamant last year at the AGM, I was wrong. You said that GBP 450 million was the bank's best estimate as to what his total liabilities would be. I asked if you would resign if I was proven right and you were proven wrong. You said that you would not and reaffirmed your assertion that GBP 450 million was the bank's best estimate at the time. In February this year, the bank increased its provision to GBP 1.2 billion, just as I said you would. Were you and the bank, therefore, lying to me last year? Or were your findings as to the GBP 450 million figure just catastrophic in competence? It is one or the other. Whatever the reason, that figure was so dramatically wrong. And therefore, will you or Mr. Nunn now resign, given that it was so misleading to the market and shareholders, and because the FCA are now investigating my reports of this market abuse and market manipulation by you and could well result in further in significant fines for the bank at the cost to shareholders.

So 2 points I'd make. First of all, last year, I was absolutely clear that the provision could be too low or it could be too high.

No, you said it was the best estimate. Your words, it was the bank's best estimate as the true...

It's an estimate, it could be too high or it could be too low. And I implicitly said that last year, but the more important point Mr. Carlier, if I may finish is, as you are fully aware, things dramatically changed last year with a Court of Appeal judgment. Last year's provision was all about discretionary commission arrangements. The Court of Appeal decision subject to the appeal that's going on with the Supreme Court at the moment, decided that actually that issue should apply to a much wider range of commission arrangements. And therefore, the population that we were talking about was much broader than the discretionary commission arrangements. That is the reason why the extra provision was taken.

Right. But that is still misleading because as I said to you last year, the minimum cost and liability for the bank based without -- forget the court of appeal and the disclosure and nondisclosure of commissions, the minimum liability for the bank in terms of redress, costs, admin, legal fees, et cetera, just to deal with the compensation that would be due to customers under the FOS decisions, forget the court of appeal would be a minimum of GBP 2.5 billion. It would rise to minimum GBP 4.5 billion if the bank was forced to repay every penny in interest, which is what the court of appeal decision may now hinge upon. So I put those 2 figures to you last year. I covered the court of appeal decision and the potential for it, and you maintained that the total revision was for -- and the best estimate was GBP 450 million. Now forget the court of appeal decision for a minute, but you are going to be faced with GBP 2.5 billion minimum, and you were -- you knew that last year regardless of the court of appeal decision.

Let me be absolutely clear. Obviously, this is not an outcome that we wanted to find ourselves in. So I'm not making light of this issue. This is a major issue for us as a Board and for our shareholders. But the point you make is the fundamental point about the level of this year's provision is that we were moving from one set of arrangements to a much wider range of arrangements, and that was not foreseeable at the time of the previous provision.

It was foreseeable. I pointed out to you at the AGM last year.

I don't think you mentioned anything about it.

I said if you were forced to repay every penny in interest as opposed to just a portion of interest over and above the lowest rate at which Black Horse would lend to customers at, but for the incentivized agreements, which is the first decision. I said if you were, however, forced to repay every penny in interest, that would be a minimum cost of GBP 4.5 billion. It was a possibility that was going to happen. You're saying now then you didn't conceive that, that was a possibility. You got it wrong.

It was in relation to a completely different set of cases.

Something that was in my question last year.

Well, I'm not sure that's what you just said, actually. But anyway, this is the reality. This is the reason why we've made the extra provision this year. It's because the court of appeal made a decision, which is subject to appeal to the Supreme Court, which fundamentally changes the population on which the provision was based.

Right. So okay, if the Supreme Court finds in the lenders favor and overturns the court of appeal decision, you, therefore, the bank are going to lower that provision down?

We may do it.

No, no, no. You just said you are going to increase it.

We will wait and see what the outcome of the Supreme Court is, what the FCA response to that is, you cannot expect us to suddenly make a new provision based on different facts when we have no idea what those factors are going to be. it would be irresponsible of me to do that.

No, you've just said to this room that the increase in provision was entirely the result of the Court of Appeal decision. If the Supreme Court makes that go away, then by automatic therefore, if what you're saying is true, the bank will lower its provision back to the GBP 450 million.

Mr. Carlier, it all depends on what the basis of the Supreme Court decision is it also depends, as I said last year, that our original provision could be too low it could be too high.

You said best estimate.

I said it's the best estimate. By definition, a best estimate means that it could be too low or it could be too high. It's just that the basis of an estimate.

You got the desired effect. The share price increase because everyone is going to accept that as face value as the best estimate, which they did. So -- and then you'll gradually drip it. But you've said here today that the increase in provision from GBP 450 million to GBP 1.2 billion is entirely because of the Court of Appeal decision, a Court of Appeal decision that will go away if the Supreme Court rules that it goes away. And I'm saying to you, therefore, then the bank will obviously lower the provision back down to the original GBP 450 million, if the very reason that you raised it goes away.

If at that stage, our best estimate is that it is that previous number then that's what we will do because under accounting regulations, we have to give our best estimate. And we shared all the information with the Audit Committee, with our auditors and everyone was comfortable with the outcome that we came to. So I think we've done that to death from the point of view of shareholders. Thank you. Can we move to your any more questions Mr. Carlier.

Yes. So I was forced to attend last year's AGM to obtain the response by the bank to knew the disclosures I've made to you in 2021 and 2022. A response have been repeatedly promised, but the bank had failed to provide. You personally assured me that I would get that response. In July last year, that response arrived and was sent on the personal behalf of you and Mr. Nunn, to who might address my disclosures and concerns and that you had personal responsibility for under SM&CR. Around the same time I receive that letter, I received on the record testimony and evidence from a former FCA senior manager who was a significant party in the FCA's FX actions, and was I quote intimately connected to my personal whistleblower case against Lloyds and the disclosure I've made whilst at Lloyds and that had escalated to the FCA in 2015. In your July 2024 letter, you claimed the FCA FX investigation project overall found no evidence of any FX wrongdoing by the bank or its traders and that Lloyds internal FX investigation, Project Oban, also found no evidence of any wrongdoing by the bank or its traders. Wrongdoing for which 6 banks were fined by the FCA in enforcement action and multiple of the traders sacked at those banks for the misconduct and unlawful conduct that this represented. Whereas the testing and evidence from the former FCA senior manager and separately from a Lloyd's whistleblower proves that various representations made in that July 2024 letter sent on yours and Mr. Nunn's behalf are false. The former FCA senior manager confirms that the FCA did find Lloyds and their traders guilty of all of the same wrongdoing but decided to let Lloyds and other banks off any enforcement action. I know the reasons why and none of the reasons are innocence, far from it. The former FCA Senior Manager also confirms that in order for Lloyds and its traders to escape enforcement action for these egregious unlawful offenses for which other banks and their traders are punished, Lloyds had to formally attest to the FCA that they and their traders were indeed guilty of the same wrongdoing and that they would comply with the FCA's FX remediation program and ensure no repeat of those offenses. And that Lloyds did just that, which is entirely contrary to the contents of your letter. So who is lying to me? You and Mr. Nunn or the former FCA senior manager who was heavily involved in the FCA's FX investigation?

Once again, we gave you a very clear response.

And I was saying...

After last year's meeting.

You did. But I've just alluded to you that the former FCA senior manager has given us on the record testimony and evidence that that's what you said in response was actually false.

Once again, Mr. Carlier, I'm sorry, but shareholders have come here to talk about the business of the meeting. This is an individual matter. If you can take it up with customer complaints and I could carry on repeating this, but please either move on or we'll move to our next questioner.

Customers of the 6 banks that the FCA took in full...

Can we please move on Mr. Carlier. I think you are stretching other shareholders' patience.

Well, that's as may be. This is in their interest as well, right? Customers of the 6 banks that FCA in full...

I'm sorry Mr. Carlier. I said it's about you, this is not about shareholders.

Customers of Lloyds who are victims of the same practices are in deprived of redress. So it's not about an individual case. It's about multiple. You said it yourself, there's 1 million business customers of Lloyds, all of which were harmed by the various effects from doing for which Lloyds did commit but has concealed and were let off by the FCA depriving those customers and victims of the redress they deserve.

If you want to take this up with the FCA, please go ahead and do so. .

I will do. A quick question. I'm not going to go into the details of the Peter King and Lisa King case to a significant extent. But Peter King...

You really have taken a lot of shareholders' time. You could be very quick.

I will be very quick. In 2017, Lloyds announced a GBP 300 million mortgage redress scheme to 500,000 victims who were mortgage customers who were badly treated who were in payment difficulties, right? The bank was given full license to determine what redress each customer would have. And the scheme was set up and established that it would be entitled to all their costs back and any consequential damages. The bank determined that Peter King was entitled to only GBP 400...

Mr. Carlier, if you're talking about another individual, please take it up outside of this room. I'm very conscious that shareholders are getting frustrated.

The bank determined that he was entitled to GBP 400, but then eventually settled with him for GBP 180,000, which reflected to the true costs and damages. So my question to you, to what extent are you, the Chairman or Mr. Cheetam and Nunn satisfied that the other 500,000 victims of these practices were not similarly and significantly short changed by this redress scheme?

This all depends upon your interpretation of an individual customer issue, which is not appropriate to go into in this meeting. So if we could move to the next question, please. Thank you, Mr. Carlier.

Good afternoon. I hope you can bear with me because I'm not accustomed to public speaking. James Robertson, I'm a shareholder and former retired Bank of Scotland employee.

Very nice to see you.

I'm Secretary of a small golf club, which plays over the shortfall golf course, not a mile from here on Bruntsfield Links. For the last 30-plus years, we've had a treasurer's account with the Bank of Scotland. Our annual turnover is only GBP 2,500 or thereabouts. But this year, we're now faced with a 4.25 charge per month. It appears that treasurers accounts have been canceled. And we're now on -- been moved to our community account, which covers nonprofit -- not-for-profit business, clubs, associations, and societies under GBP 250,000 turnover. We are only GBP 2,500 yet. We are being asked for 4.25 per month where banking was free for the last 30-plus years on our treasurer account, not only the monthly charge, but there is also transaction charges, which could take us up from GBP 50 to over GBP 100 a month for a small club. There must be hundreds, thousands of us throughout the country who are suffering from this really ill-conceived charge, small clubs, associations, societies are the lifeblood of communities. And perhaps whoever came up with the word community account, it sounds as if they didn't have much community spirit when they came up with that. Instead of charging small clubs, GBP 50 perhaps a contribution of GBP 50 would have been more appropriate in support of the local communities. So I'm really asking if consideration can be given to a review of these small clubs throughout the country, not just Scotland, but the whole of the U.K. that this can be reviewed and reconsidered. I see that the Royal Bank and NatWest, they still give a community account. But one of the operators would have to be a Royal Bank, NatWest customer. perhaps something like this would be appropriate for Bank of Scotland and Lloyds to introduce. Otherwise, you're behind these 2 competitors in the market.

Thank you, Mr. Robertson, and you made your point very well. So thank you very much for coming this morning rather than being on the golf course, which is where I'm sure you would prefer to be. This was a difficult decision, and it's a policy decision rather than an individual customer decision, and not charging for accounts is something that didn't seem fair to us to other customers. And our understanding is that we were moving in line with the competition. And we will review your particular issue about the NatWest position just to see whether we are genuinely competitive because we do want to be competitive for clubs and society like clubs and societies like yours.

Yes. As a nonprofit organization, it just seems we're now regarded as water down businesses. We don't operate as businesses. We basically try to balance the books each year. And I'm sure that's the case for thousands of small clubs, similar clubs throughout the country.

I understand Mr. Roberson. Thank you. Next question. .

My name is Sanjay Kakar. I just want to, first of all, thank the Board for being here. I understand from some of my shareholders at some companies, not all of the Board turn up, so I do appreciate you all being here. So last year, I think it was last year, I asked a question, didn't really get an answer. Someone came to me, gave me their business card. And then when I was at the train station because our shareholders, we don't know each other, sometimes we talk to each other, and we are walking towards the train station. And one of them said to me, they didn't really answer your question, did they? And I said, no, they didn't, but it wasn't -- it was -- so where I'm a bit confused is the procedures that we stand here and ask questions, but sometimes you don't answer them. So my understanding, my little bit of research is that Charles Nunn likes rowing or used to be involved in rowing. And you sir, Robin, like golf. So what I would like to say is I feel like I'm in a canoe, where there's -- I'm going against the tide and I felt like I'm going to cap size using a rowing analogy. And what I'd like to do is I can't play golf, but I'd like to turn it to a hole in one, so that I actually make some progress, if that makes sense. So the questions that I'd asked before were about equality and diversity. I think when Antonio was here, the question I'd ask then was that the only black face I could see on stage at that time was the Horse. Jobs have been advertised, which sometimes create barriers to opportunity. I'll be very quick about this. So 2 examples. There was a job that when you apply for a job at Lloyds, this particular job was a researcher and writer job. It ask you what your current salary was. And what I would say is that there's an article in the BBC on the 11th of November 2020, and it's a black workers at Lloyds Bank and a fifth less than their colleagues. We know there's a gender pay gap. We know that -- so I don't understand why the question of your current salary is relevant with the -- the people that make Bates against the post office, the ITV, they all took a salary cut to get that program made. It should be -- what about the people of volunteers? I don't understand how that question is relevant. Another job that was advertised. It said, we want you to be a death communicator who can burnish our reputation. I'll be honest with you. I don't know if this is a language that's unique to Edinburgh or Scotland, but I don't know anyone that says, "I'm a death communicator. And can you -- I've never really heard the word burnish before. It's almost like you're using a different language. Now I'm going to leave it because usually, what happens is someone from group affairs, gives me a card, I never hear from anyone. They never answer my questions. Next year, because I'm expecting no one's going to answer my questions again. I'll come with the kilt. I've never worn a kilt. I was going to wear it for [indiscernible], but I was too scared, so it's about -- I just think these are important questions. I'd also say that The Times described you Sir Robin, as a quietly spoken and diplomatic and you demonstrated those today.

Thank you, Mr. Kakar. And I'm sorry if we've disappointed you in the past. I will make sure personally that somebody does come back to you on those 2 specific points because I think it's important that we keep it to specific. So we will do that. If you could give your card again just in case we've misplaced it. Thank you.

I'm Tense Lockhart. I used to be a colleague at Lloyds Banking Group for 14 years, longer than primary school and secondary school. And I'm a fan club. I'm one of the colleagues that used to raise money under matched giving by painting pictures of people's dogs. And my conclusion is a fur face is a hard face. I'm here now as a semi pensioner because I was made -- part of the crew in risk made redundant back in July last year. And we still are very loyal to Lloyds Banking Group. I mean how wonderful to have shares, how wonderful to be able to come to the meeting. And boy, the resilience you guys have in order to deal with shareholder questions, something as a colleague, I hadn't a clue. And I'd rather sort of cringes a semi pensioner because to think I could do this or 20 years. I'll be a board member. You can take me on board, and I'll be on the right side of the ball. But in the meanwhile, the reason I'm here to ask a question is as a semi pension, and I hear a lot of affirmative action, ESG and requirements for Lloyds Banking Group to be ethical in their investments. And I'm aware we've had really turbulent markets, and I'm aware we've had very creepy international events, and I'm aware that we almost lost our last steel refinery, and it would be nice to be able to have some coal to power it. And I live in Scotland. So I've seen Grangemouth close down with the job losses and it's across the water from a very interesting place called Curis, they used to mine coal, but doesn't do that anymore. I want to thank you all for continuing to keep within the confines of what is legal within U.K. shares. I appreciate that ESG is a very important thing, and I have to send it's regard that will live in the world as the years go by. But I still need a return on my pension part. I still need to be able to withstand this market turbulence. I lost 10% of my part in the last couple of months, and I think a lot of other people did too. I've heard from former colleagues that some people have lost 20% to stick with it and keep it safe and keep us being able to live as a semi or retired person. Does the Board have any comments on how they look to the future, where the profits and the sustainability, I don't mean necessarily environmental, but just old people being able to pay their bills as the years go by. Do you have any comments on that?

Thank you, Ms. Lockhart, and thank you for your support. I would say that the trustees of the pension fund have a fiduciary duty to create long-term value for you, the pensioners. And it may be that -- and I'm not one of those trustees, but it may be that their view, as is our view, is that actually, the net zero industry in the U.K. is a growth industry. And therefore, investing in that type of industry is something that will create long-term returns. So I don't think ESG is just a cleansing factor. For us, certainly, as an organization, it's a very important part of what we see as the future growth of this business. But the main point I can assure you is that the trustees have a fiduciary duty to create long-term value for you, the pensioner.

Good morning, ladies and gentlemen. My name is Ian Rice. I am here today as a customer and as a long-term shareholder. From what I can hear today, you don't have much respect for customers and their complaints. Now without customers, you wouldn't all be sitting there today as customers are at the core of your business you wouldn't all be enjoying expensive lunches if you don't have customers. Now this time last year, I raised a point with you and you told me to put my letter into the reception desk and it were dealt with. A year later, I'm still here, nothing has been done. I have copies of the letters here today. If I give them to one of your representative of your stewards, will you undertake to answer them? Yes or no.

Yes.

That's good. Now this time last year, I asked you about direct debit mandates and you said that you didn't know the answer. Do you know it this year?

I might ask Charlie because he's the more experienced.

You were asked last year not Charlie and I asked you how long, a direct debit mandate lasted for, and you told me it was a technical question.

Yes. My understanding from my own account is that it lasts for as long as either you say it should last to when you put in the direct debit mandate or until you take it off yourself.

Well, when you deal with Halifax Share Dealing services, they deal with direct debit mandates from your debit card, and that's got an expected life of 3 years, then you cut off the customer's account trading to sell their shares. That's simply not right.

It certainly doesn't sound right.

So I would like you to answer my questions. And I hope that will not be here this time next year.

Thank you, Mr. Rice. Next question.

Good morning, Tom Travel, private shareholder. My question relates to HSDL, Halifax Share Dealing Limited, the main stock working subsidiary at Lloyds Bank Group. I note that your strategy #2 in your report is to create a mass affluent offering as part of your growth strategy of the Lloyds Bank group. A major part of this, I would assume, is the provision of a first-class stockbroking and pension provision service. In that context, I think you'll probably be disappointed in Halifax Share Dealing Limited. There are 3 aspects in which I would consider you ought to be disappointed. The first one is the customer consumer service of Halifax has to be considered very poor. I refer you to Trustpilot, which is an independent consumer body, probably the best available measure, which gives Halifax share dealing Limited, a bad rating and a score of 1.5 out of 5. That compares with the other 3 leading stock brokers in the country, which Hargreaves Lansdown , AJ Bell and Interactive Investor who get ratings of between 4.3 and 4.7, and they get an overall rating of excellent. So I repeat, HSDL gets bad, they get excellent, HSDL gets 1.5. They get ratings between 4.3 and 4.7. There's clearly a problem there. Secondly, recently, HSDL has effectively abandoned virtually all its SIPP customers, pushing them to move to AJ Bell encouraging them by all intents and purposes in the communications to move to AJ Bell. I, as a long-term HSDL customer do not understand it at all. If you're trying to build up that part of the thing why give your customers up, why let your all your customers move to AJ Bell? Third thing is our personal case, which is, to me, is evidence. I'm citing as evidence of the problems HSDL. I had a block and a fairly large shareholder with a broad portfolio an international portfolio as well. I had a block of Swiss shares, 5 major Swiss shares and companies, including Nestle, including Roche, Novartis. And I acquired these shares in 2019, 5 years ago, and I've been trying to dispose off them ever since, so spending 5 years trying to dispose. Halifax had the ability to do it but didn't have the will to do it. And therefore, I've recently managed to sell 4 of them, but I've still got Roche Holdings, and Halifax Share Dealing will not give me assistance in getting those shares sold. And that does cause me exasperation, but I do put in the context of the other issues I raised on the customer service and of their not supporting pension customers. So my question really -- I have to come back to the recent question. Are you aware of these issues of Halifax Share Dealing Limited? And are you going to look into some ways of trying to improve the service and measure it up, so it's to drive the growth in what I think you described in your report, it's a mass affluent category?

Thank you, Ms. Travel and all very cogent points and, in fact, subject to quite a long discussion at our Board meeting yesterday. And perhaps I might ask Charlie to talk a little bit about our plans around mass affluent and HSDL in particular. .

Yes. Well, first of all, thank you, Mr. Travel. We aren't going to talk about individual customer feedback, but actually, it's incredibly helpful for me and my position to hear those points of feedback. We are proud of the business today. You pointed out some issues. It's the fifth largest business in the U.K. It has a very strong proposition from an efficiency cost for our investors, and we have strong loyal customers. So -- and it's great to hear you've been with us for a while. And we do have plans, as you say, to invest in the business, continue to improve the service in line with customer feedback. So this is very helpful. And we absolutely see it as a core way of helping more customers in the U.K. have an appropriate level of investment, we think customers need more access to those kinds of investments. So we see it as very strategic. We are intending to invest in that platform. And as I say, the feedback is very helpful, although customer specific. And if you're comfortable sharing the details of your feedback, I would really appreciate it. Thank you.

Thank you, Mr. Travel. I think we've got a couple of questions from the floor, but we are getting to the end of questions. So I would just like to remind everyone that hasn't voted to vote because I will be closing the vote after the questions are finished. Sir?

Good afternoon. I'm Michael Baird, and I'm here once again to inquire as to what provisions of bank services, hubs or other you intend to provide for Sutherland the last bank standing Bank of Scotland closed its doors in Golspie on the 4th of February 2025. The mobile service covering Lerwick, Bonar Bridge, Dornoch and Helmsdale provided when the bank closed in 2017 from the above branches ceased after COVID when operating every 2 weeks instead of weekly. The post office network is not a reliable either. Take Bonar Bridge, for example, closed on Monday's open mornings Tuesdays to Friday.

Thank you, Mr. Baird. And I think it's worth talking a little bit about our branches in general because I know it's a point of concern for our customers, which we do focus on very hard. The reality is that fewer and fewer people are using our branches. We need to make sure that we keep branches open where the usage justifies that. We have the highest branch network in terms of numbers of any other high street bank. And I would say that we are trying now very much to create alternative methods for people to engage with us. And obviously, we focus hard on cash, and I'm sorry to hear about the opening hours of your local post office, but generally, we don't close branches unless there is access to cash nearby, and that's something we discuss with an organization called Link, which is there to ensure access to cash.

If I could just come in there on the Link question. Here's an example about a fortnight ago, we have this food stop in Bonar Bridge every Monday, and it runs on donations. So not having any cash in my pocket, I went down to the local spar with an all-singing dance Link facility, temporary out of use. Why? Because everybody else had been in before me to take what available money was in that Link machine. So here's the alternative to get money to go to that food stop. One, to either spend more than GBP 5 within the shop and ask for cash back or to get in my car and travel 15 miles to 10, go to an ATM, withdraw the money and drive all the way back again, 30 miles to do that.

I'm sorry that your Link machine wasn't working. And obviously, the post office wasn't open that morning. But I think more generally, beyond the access to cash, we're very focused on making sure that our customers, particularly those who have complex needs have access to people not just during opening hours, but during their home time as well. And Charlie has set up a team of about 4,000 people that is there to answer telephone, they are experts in a wide range of things that, frankly, it's impossible for a branch representative to be expert in, and that's very much one of the ways in which we are trying to set up alternatives as we make our delivery system more efficient, which we have to do because, ultimately, we are competing with people who don't have any branches.

My name is Robin Notes, and I would like to ask 2 questions, which I hope will be brief. The first one is, we heard a lot about a number of figures put around about the way you've invested in various activities. The question is, what is the return, the average return you get on all those investments? The second question is a bit more speculative, and it is what effect does the -- if I can abbreviate it Trump economics going to have upon your future policies?

Thank you. I will take the second and I might ask our Finance Director, William to take the first in terms of returns. Trump economics, it is clear that for a U.K. -- for a British-focused bank like Lloyds', we are less exposed to the impact that tariffs have on international trade than other banks. But equally, those tariffs are going to have an impact on the U.K. economy despite the extremely good GDP outcome that we had for the first quarter. But we remain -- so it is going to dampen growth in the U.K, but we continue to be optimistic about the U.K. We do a monthly review of small businesses. And whilst the confidence of those small businesses has been impacted by the last month. The underlying sense is still not out of line with what the confidence levels have been historically. So whilst there will be a dampening impact, I think we, as an organization, feel confident about the future of the U.K. William?

Thank you, Robin, and thank you for the question. The reality is that we invest in a variety of areas across the business. Some of our investments are customer facing. Some of our investments are about regulatory compliance. And some of our investments are about operational resilience, for example, and so there is a wide spread of returns across those investments. The way in which we look at it is to more or less average across those investments through the business. And we measure it via performance indicator called return on equity. Our return on equity was 12.6% for the first quarter of this year, and we expect it to be around 13.5% for 2025 as a whole. And as I say, that's the aggregated measure that we use to assess the returns on the investments that we're making right the way across the business.

And William gave a much better response to that than I would have been capable of doing, as you would expect from our CFO. So I think thank you, shareholders, for the questions. And I believe we've come now to the end of the question-and-answer session. So as I said earlier, I'm about to close the voting. Please register any final votes now. I now declare the vote closed, and that concludes the voting at the meeting. Thank you. The provisional voting results in respect of each resolution are now showing on the screen behind me, and the provisional result is that all the resolutions have been carried. I'd like to thank shareholders for their continued support. The poll count will be conducted by our registrars, Equiniti, who will also act as poll scrutineers. And the final results of the poll will be announced to the London Stock Exchange as soon as reasonably practical following the conclusion of this meeting, and will also appear on our website. So that concludes the business of the Annual General Meeting. Please return your voting handset to one of the collection points outside this room. And I'd really like to thank you on this most beautiful day for attending the meeting today and for your support, which we greatly value. I hope you are able to enjoy the lovely weather either on your travels home or when you get home. And please also be aware that a pack lunch is available in the lobby. And as I say, we wish you all a very safe journey home. Thank you very much, indeed.