NatWest Group plc (NWG) Earnings Call Transcript & Summary

Good afternoon. Just, ladies and gentlemen. And welcome to the 2023 Annual General Meeting at our headquarters here at Gogarburn, thank you all for attending. Before we start, may I ask you to switch off all mobile phones. Please also note the use of photography or filming on personal devices is prohibited. Our auditorium has induction loops for the hard of hearing. This facility is available at the front of the room. But if anyone is experiencing any difficulty, please notify one of the stewards who will be happy to help. The proceedings are also being signed in the room and there will be subtitles for those viewing on the webcast. Should you wish to submit documents for the Board, pass them to an usher and please don't approach the stage with them. This year, we will continue to engage with our shareholders through a number of virtual events and indeed, we held one on the 18th of this month, which allowed shareholders who were unable to attend today's meeting to question Board members on the business of the AGM. And we've posted on our website the questions raised at the virtual event and the answers given. So let me now introduce the Board from your left, on my right, we have Stuart Lewis, Morten Friis, Yasmin Jetha, Patrick Flynn, Katie Murray, Alison Rose, Mark Seligman, Lena Wilson, Mike Rogers and Roisin Donnelly. To my left is Jan Cargile, Company Secretary. Frank Dangeard is also on the Board but unfortunately cannot be with us today due to illness. Also not on the stage are 3 directors of NatWest Holdings, the ring-fenced bank, who play a full part in the governance of the group, Graham Beale, Francesca Barnes and Ian Cormack who are over there. Before Alison provides an update on the bank's performance and progress against our purpose-led strategy, I'll say a few words on the Board's perspective on what was another eventful year. As countries finally opened up for business in 2022 after 2 years of pandemic lockdowns, the global economy faced further pressures resulting from the Russian invasion of Ukraine, which continues to have a devastating effect on the people who live there as well as adding to the rising cost of living and the cost of doing business all over the world. These factors, along with a rapidly changing political landscape, drove inflation in the U.K. to a 40-year high with consumers and businesses facing increased costs and considerable uncertainty. In response, the Bank of England raised interest rates from 0.5% in February of last year to 3.5% at the end of the year. And last month, they increased to 4.25%, the highest rate in 14 years. While there are now some grounds for cautious optimism with employment remaining high, the economic environment will remain challenging for some time to come with expected further tightening of consumer spending and real incomes, which will put pressure on household budgets. The U.K. may or may not experience a technical recession in 2023, economic forecasts differ on that point, but the economy is unlikely to grow significantly. In the first few months of the year, we've already seen the impact that uncertainty and rising interest rates can have on the banking sector with the collapse of Silicon Valley Bank in the United States and some other lenders there. We also saw the acquisition of Credit Suisse by UBS facilitated by the Swiss authorities. Ultimately, poor risk management and long-standing idiosyncratic challenges were largely to blame for those failures. The NatWest Group, by contrast, has built a robust and resilient balance sheet with strong capital and liquidity, a largely secured retail loan book and well-diversified commercial lending. Tight Risk management underpins our strategy and ensures we are well positioned for the future. We nonetheless continue to monitor customer activity and behaviors closely, the signs of stress taking action where appropriate. Against this difficult and uncertain economic backdrop, the group performed strongly in 2022 with continued responsible growth in our lending and progress against our strategy. The bank's share price increased by 17.5% in 2022, outperforming our major U.K. peers. We also continued to deliver sustainable returns to shareholders, announcing GBP 5.1 billion of dividends and buybacks for 2022 as well as the GBP 1 billion final dividend that you're voting on today, we paid an interim dividend of GBP 364 million and a special dividend of GBP 1.75 billion alongside a share consolidation. We also completed a GBP 750 million on market buyback and announced a further GBP 800 million share buyback at our full year results. And we were pleased to have the opportunity to buy back GBP 1.2 billion of shares directly from the government. The government also continued to sell shares into the market throughout the year through its trading plan, which the treasury recently announced it will maintain until August 2025. As a result of these disposals, the government shareholding is now below 42%, down from 52% at the start of last year. That is positive progress on the path to full privatization. Today, we are seeking to renew our shareholder authority to undertake further directed buybacks should the Treasury give us permission to do so. Since the last AGM, there have been a number of changes to the Board. Last October, we welcomed Roisin Donnelly as a Non-Executive Director. She recently became a member of our Group Sustainable Banking Committee and will assume the roles of Consumer Duty Board Champion and Chair of the Colleague Advisory Panel following today's meeting. In December, we said farewell to Robert Gillespie, who resigned after 9 years as a Non-Executive Director. Lena Wilson succeeded Robert as Chair of Performance and Remuneration Committee in September, allowing for an orderly handover. On the first of April this year, Stuart Lewis joined the Board as a Non-Executive Director and a member of the Risk Committee and the Audit Committee. And subject to regulatory approval, he will Chair the Risk Committee from the beginning of August replacing Morten Friis, who plans to step down at the end of July after 9 year's service. Mike Rogers will leave the Board at the conclusion of today's meeting, and Yasmin Jetha will succeed Mike as Chair of the Sustainable Banking Committee. The remit of that committee will expand to include matters currently within the remit of the Technology and Innovation Committee, which will be retired as a stand-alone body. On our ring-fenced bank board, Graham Beale, who's been Senior Independent Director there since 2018 has indicated his intention to step down as a director at the end of July. Subject to regulatory approval, another of our ring-fenced bank Board Directors, Ian Cormack, will succeed Graham as the Senior Independent Director of NatWest Holdings from the beginning of August, and we will recruit a third ring-fenced bank Board Director. I'd like to thank Robert, Martin -- Morten, sorry, Mike and Graham for their commitment, diligence and event contributions during their time with NatWest and we wish them all well in the future. Now it's also an opportune time to update you on my own position. I'm approaching the point where I will have served 8 years on the Board. So it's appropriate to initiate the search for my successor as Chairman in the coming months. This will allow time for a rigorous search process and an orderly handover, which I expect will take place at some point before I reach 9 years tenure in July of next year. That's the maximum recommended in the U.K. Corporate Governance Code. The search for my successor will be led jointly by the Senior Independent Directors of NatWest Group and NatWest Holdings who are Mark Seligman and Ian Cormack. Throughout the year, the strategy of the group and climate change remained high on the Board's agenda. Following strong shareholder support at last year's AGM for our say on climate resolution, the Board continued its close oversight of progress on our climate ambitions and we were pleased that we were able to publish the initial iteration of our climate transition plan in February. As they did during the COVID pandemic, Alison and her team have continued to use the bank's purpose to guide decision-making, supporting our customers and continuing to lend responsibly while growing the business. I'd also like to take this opportunity to thank our colleagues in the bank who have also been exposed to the increased cost of living while helping customers to manage their finances in a volatile period against the background, I've mentioned, of rapidly rising interest rates and inflation. Looking at the year ahead, as I've said, we expect the external environment to remain challenging, and we know that many people and businesses are worried about the future. But our group is well-positioned to stand alongside the customers, colleagues and communities we serve, and we're committed to providing support to all our stakeholders through the challenges and the opportunities in the years to come. The Board remains fully supportive of the bank's strategy, which is helping us to build long-term value and deliver long-term growth as well as sustainable returns for our shareholders. And with that, I will hand over to our Chief Executive, Alison Rose. Alison?

Thank you, Howard, for the update, and I'm looking forward to continuing to work together on delivering our purpose-led strategy. 2022 presented another year of acute macroeconomic challenges. And during this heightened uncertainty, it was as important as ever to be guided by our purpose to champion people, families and businesses to help them to thrive. We delivered a strong financial performance last year, reporting a pre-tax operating profit of GBP 5.1 billion and a return on tangible equity of 12.3%. Income was up around 30% and costs were down nearly 3%. Lending across our 3 franchises grew by 6.7% year-on-year as we continue to support our customers and the economy responsibly, including GBP 45 billion of [indiscernible] mortgage lending and GBP 24.5 billion of new climate and sustainable funding and financing. Crucially, our all-weather balance sheet with high levels of capital and liquidity and a diversified loan book means that we are well-positioned to navigate economic uncertainty, particularly in light of recent market volatility. I and my executive team continue to monitor market movements closely to ensure we are well placed to continue supporting our customers. Yet despite not seeing significant signs of financial distress or changes in behavior amongst our customers, we know that people, families and businesses across the country are struggling. We've responded quickly and meaningfully to support our customers and colleagues to navigate cost of living challenges. So far, we've carried out around 700,000 free financial health checks, launched a new cost of living hub and a benefits calculator. Frozen standard published tariffs on business current accounts for 12 months and provided GBP 10 million of hardship funding through our charity partners to help the most vulnerable in society. We also provided around 60,000 colleagues with a one-off GBP 1,000 cash payment to support with the rising cost of living. And I would like to thank our colleagues for their continued hard work in supporting our customers during such a volatile and uncertain period. Our customers are at the heart of everything we do, and we will continue to ensure our services meet their needs. As with many industries, customers are moving to mobile and online banking because it is faster and easier and 90% of our retail banking customer needs are now met digitally, and we have invested in our mobile and digital services to support them. But we also recognize our responsibility to provide services that work for all of our customers, including those with challenges moving online. As a result, there are today more ways than ever to bank with us. With over 16,000 points of presence for our customers. Bank branches are and will continue to be an important part of our services. We are continuing to invest with GBP 20 million invested in our existing branches, whilst providing continuous alternative services such as our ongoing collaboration with the post office, a dedicated support line for over 60s and support for our most vulnerable customers from customer care experts, such as our community bankers. Our values are at the heart of how we deliver our purpose-led strategy, and that strategy is working. We are continuing to make strong progress to deliver long-term sustainable value and deliver across core priorities of climate, learning and enterprise. On climate, addressing climate change is one of the biggest issues of our generation and supporting our customers in their transition to net-zero is a key strategic priority for the bank. In 2022, we became the first U.K. bank and one of the largest banks globally to date to have science-based targets validated by the science-based targets initiative. These underpin the initial iteration of our climate transition plan, which outlines the steps we aim to take to at least halve the climate impact of our financing activity by 2030 and achieve our net-zero climate ambition by 2050. We provided GBP 24.5 billion of climate and sustainable funding and financing last year against our target of GBP 100 billion by 2025. And are determined to ensure our capital is being used to support our customers' transition to net-zero whilst also reducing the financing of the most harmful activities. And to support our customers, we are offering financing options and practical tools to incentivize the transition to net-zero. Our green mortgages are providing cheaper finance. And through collaboration with Cogo and through our carbon planner, we are helping retail and business customers track and understand their carbon emissions. On enterprise, entrepreneurs are the lifeblood of the U.K. economy, and we are committed to supporting the next generation of founders to help them to thrive. Building on our position as the leading high street bank for businesses and through initiatives such as our 13 free accelerator hubs across the country, we now have the highest market share among businesses younger than 2 years old and continue to provide expert support for high-growth companies as well as those wishing to scale up. We know that GBP 250 billion could be added to the U.K. economy if women match men in starting and scaling business. And in March, we were the first European financial institution to issue a social bond specifically designed to lend to women-led businesses. which is a further demonstration of our unwavering commitment to increasing the number of female-led businesses in the country. We're also a learning organization and are actively committed to breaking down the barriers for people to succeed. Through schemes such as our MoneySense and Career Sense programs, we are championing, learning and ensuring young people develop financial literacy and employability skills. And our digital apprenticeships are supporting those age 16 to 24 to develop a career whilst continuing with their education. We've also been delighted to collaborate with footballer and campaign at Marcus Rashford and the National Youth Agency to provide NatWest Thrive. A unique and innovative program for young people to develop their self-belief as well as their money confidence. The growth of the economy is inseparable from the growth of our nation's children, and businesses play a vital role in driving the change needed to ensure that children, families and communities up and down the country are empowered and equipped to meet their potential. I'm very proud of our new market-leading partner leave policy, which supports all eligible colleagues with significantly more time away from work to help their partner look after their new child, whether the child has arrived through birth, adoption or surrogacy. And just last month, we had the pleasure of hosting the first meeting of the Princess of Wales business task force for early childhood at our London office. These actions, driven by our purpose are not just the right thing to do, but are also key to building a more profitable organization. Our fundamental strategy remains the same, and we are creating ever closer and deeper relationships with our customers at every stage of their lives, support that starts earlier, reflects their values and meets their changing needs. As we look to the future, our all-weather balance sheet and financial strength means that we are well-positioned to respond to new and emerging social, commercial and economic trends that are shaping the future of our customers' financial lives. This means seeking new opportunities to drive growth through 3 targeted areas in 2023 and beyond. First, we will increase our personalized engagement with customers as their lives and finances become increasingly complex. Secondly, our customers are spending more time on digital platforms, and so we need to ensure our services are embedded into our customers' daily lives. And third, we have a huge role to play in supporting our customers to transition to net-zero and providing them with tangible support to tackle the climate challenge head on and transition to a more sustainable low carbon economy. To close, this year has once again shown the importance of being a purpose-led bank, but it has also shown us what it takes to be purpose-led. We champion the potential of the people, families and businesses we serve when things are going well and when things are tough. As we look to the future, we do so with confidence against the volatile economic backdrop, we continue to demonstrate the strength and resilience of our business, delivering a strong financial performance whilst proactively supporting our customers, communities and shareholders and laying the foundations to grow. Thank you. And with that, I'll hand back to Howard.

Thank you, Alison. And that concludes the formal presentations by the two of us. So we'll now move to the formal business of the meeting and to your questions. The resolutions to be put to shareholders are detailed in the notice of meeting, which formed part of the letter to shareholders, which was circulated before today's meeting. We'll be voting on all of the resolutions by way of a poll in line with best practice. First, I got to emphasize that if you have already submitted a proxy form and you don't wish to change the way you voted, then you don't need to take any action now as your votes will already have been recorded. If you have submitted a proxy form but wish to change the way you've voted on any resolution, then you should vote using the handset, and your new vote will be registered. Our registrars, our Computershare Investor Services, and they will act as scrutineers of the poll vote to ensure that the vote is carried out in a proper manner. Computershare will also be available at the end of the meeting in the foyer if you have any other questions. I'll now formally put to the meeting, all of the resolutions contained in the notice of meeting. The voting system will shortly become live. Please follow the on-screen instructions and press the button on your handset corresponding to the way in which you wish to vote. Select each resolution from the menu, press button 1 to vote in favor of the resolution, button 2 to vote against it and button 3 to withhold your vote. Withholding a vote or abstaining is not classed as a vote in law and will not be counted in the calculation of whether any resolution has been passed. Once you have pressed the button of your choice, you will see a message on your handset confirming that your vote for against what withheld have been received. If you think you pressed the wrong button or you wish to change your mind, simply press the correct button and your original vote will then be canceled and superseded by the new one. Once you're happy with your choice, move on to the next resolution as directed on the handset. I'll shortly take your questions, and the voting will remain open throughout the question period. And I'll warn you before I close the voting later in the meeting. If you'd like to vote with the Board's recommendations, select that from the keypad menu and confirm your selection. That will cast your vote in favor of all 26 resolutions. Following the AGM, an announcement will be made to the London Stock Exchange confirming the results of the voting on all of the resolutions. So the voting is now open.

I expect a number of shareholders will have questions to raise. I'd be grateful if your question could relate to the business of the AGM and be kept as succinct as possible. Please ask a question rather than read out a statement. But if you have a specific personal query about a service or product, you should raise it with the customer service desk in the foyer, which will remain open after the meeting. If you're a shareholder, proxy or corporate representative, you are eligible to ask questions. And so you will have received a voting handset when you came in, and that includes a built-in microphone. If you'd like to ask a question, please push the microphone button to the left-hand side of the screen, followed by the green square button on the keypad to confirm. This will put you into the question queue. And I will announce each shareholder's name in the queue one at a time, and you will then be invited to speak. When I call your name, it'll be helpful if you are able to stand so I can see you, but please remain in place. The microphone is at the top left corner of the handset and becomes live automatically. Please continue to hold the microphone close to you as you speak. So I will take the first question from Mr. Alan Cole. There you are. Good.

Can you hear me?

Yes, I can.

I am a shareholder and the next member of staff from 1996 [indiscernible]. So glad to be back in Gogarburn. I've got a question for you, Mr. Chairman and/or Mr. Seligman, Independent Director. As I'm sure you're aware, over a period of 20 years, the bank in its own name and as trustee administrators until 2017, made formal written promises indeed guarantees to its RBS staff and pensioners about the future pension benefits. This included guaranteeing annual increases of 5% on RPI. You will also be aware that we subsequently transpired that the bank and the trustees have apparently failed to check the accuracy of these documents issued to me in this name. The bank has admitted that has made what it calls regrettable errors. But incredibly, so far declined to honor its written guarantees. I understand that the bank and the trustees took action without advising the RBS Group Pension Association, which will be normal practice. Therefore, that action did not have any input from RBS pensioners or able to correct wrong assumptions made about NatWest integration objectives. Hence Mr. Chairman or Mr. Seligman agree with his executive that it is caught unsurprising that the bank failed to check these key financial information, even once over a period of 1 to 3 decades. And does he agree with his executive that is proper and fair to now fail to honor these 22 years of written guarantees. To me at the $10,000 RBS staff. And instead, the innocent RBS pensioners lose out potentially hundreds of thousands of pounds for what the bank has admitted where its and the trustees errors. And finally, with Mr. Davies or Mr. Seligman, accept my invitation to meet with me to hear the evidence on for you to review this incredible and I would assert unfair decision. Otherwise, how can anybody snap our customer in future, trust any written document or guarantee made by the group. And I have documents here in terms of which have been issued, not just by the trustees, but in the bank's name, banks letterhead, company registration number and signed by the Group HR Director at the time [indiscernible].

Thank you. I recognize this is an unhappy story, and I'm grateful for the way in which you have raised the point, I don't disagree with your characterization of what has happened in the past. And there does seem to have been a misunderstanding in the bank about the terms of the different pension schemes. But the fact is, and we have taken extended legal advice on this as indeed the trustees have and the trustees are responsible for these payments that they have a legal obligation to administer the group fund in line with its trusteed and rules, which provide for pension increases at a maximum of 3% for legacy RBS -- pensions for legacy NatWest members increased by RPI up to a maximum of 5% a year. In 2020, the trustee identified that past practice had been to increase parts of the pension for RBS members at RPI 5% of the NatWest scheme rather than RPI 3%, which wasn't in line with the rules of the fund. And so as I say, following legal advice and consultation the trustee had no choice but to administer the fund, in line with the rules going forward. The fund provides generous benefits and the trustees view is that they should not be increased further on a discretionary basis. So instead of the bank's focus is making sure that our former colleagues receive the pensions to -- entitled under the rules and we've committed many billions of shareholders' funds in recent years to ensuring that our pension plans are well funded. So in that respect, the bank has stood behind the pension trustees. When I arrived, there was a significant deficit in the fund. The fund is now -- well -- financially provided for to deliver its benefits. It's in fact now ahead of the funding plan that we set out in 2018. And so it has a surplus. So that is the position. And I'm afraid the legal position is sadly clear. We're happy to facilitate further discussions between you and the trustees and the bank, but I -- the position -- the legal position is, as I've set it out. Thank you. Could I now have the next question from Rosemary Hartill.

My name is Rosemary Hartill. I'm retired, BBC news correspondents and a former member of several public boards. And I'm asking this question on behalf of ShareAction. It's about targets to reduce or to further reduce NatWest's contribution to the damaging impact of climate change on our planet. I'm asking whether NatWest will build on its recent disclosures and include in its climate targets, capital markets activities using 100% weighting. In Capital Markets facilitation, of course, NatWest does not provide capital itself, but funds activities, which play a critical role in facilitating access to capital. The capital markets are such a vital source of funding, they will be key in delivering the low-carbon transition. In 2021 alone, the issuing of global bonds and equities stood at USD 26.8 trillion. Using 100% weighting means that NatWest would include in its own climate targets, 100% of the part of the transaction it is responsible for. Banks already do this when they report on their green financing. So we are arguing they should also do this to the fossil fuel financing. Now we recognize and appreciate that NatWest demonstrates leading practice across many aspects of its climate-related disclosures and targets and welcome what Alison said about that earlier. This year, for instance, it has disclosed the emissions associated with its capital markets business for the first time. However, this activity is not yet included in the bank's targets, which, therefore, continue to exclude a significant portion of NatWest impact on our climate and the risk during transition. Capital Markets activities are significant for the bank's climate impact since our data shows that on average, 67% of NatWest's financial support to major oil and gas companies is in the form of capital markets underwriting as opposed to lending. NatWest has chosen to take full responsibility for its capital markets activity by using a 100% weighting to calculate associated emissions. And this is the most robust and transparent option for investors to understand the risks to and impact of capital markets business. And this rating is higher than the 33% weighting used by Barclays. That's great. And the 17% weighting being discussed by the standard setting body the Partnership for Carbon Accounting Financials, we agree with NatWest public comments in Reuters that a weighting of 17% is problematic and risks an accounting mismatch and this is his quote "happy with 100% of facilitated emissions being attributed to the banks behind capital markets deals". So will NatWest commit to include capital markets activities in its targets using 100% weighting in line with its latest disclosures. And will the bank do this, even if the Partnership for Carbon Accounting Financials formerly recommends a lower waiting. Thank you.

Thank you very much, Rosemary for that question. As a loyal radio for listener, your voice is very familiar. But I've always been listening rather than responding to questions from you in the past, I think. Now we have discussed this issue with ShareAction, as you know. And as you say and your characterization of where we are and where other banks are is, I believe, quite accurate. There is work underway within the Partnership for Carbon Accounting Financials to try to create a standard for reporting facilitated emissions. And we are involved in that. And as you know, in our own climate reporting, we've made a start in that area. We have been, as you say, happy with the idea of 100%. There are some complications related to potential double counting, but let's not get into that at the moment. We are engaged in an active industry dialogue. I would prefer to see how that comes out before committing to what we will precisely report on. So I feel I'm not going to answer your hypothetical question at the end. But I should note that whatever percentage is chosen. It will be possible to deduce 100% of the impact if you choose a percentage. I mean that follows. And as with all our carbon reporting, we will be transparent. Our climate team is here, and I'd be happy to talk to you after the meeting about how the negotiations or discussions are going within PCAF and our detailed attitude to it. So I hope you take up that invitation over a cup of coffee afterwards. Thank you. Mark Turnbull, I think, is next.

That's exactly right. Years ago, I asked Rose [indiscernible] for an AGM about the perspective of building society was bought for GBP 720 million and was that money down the toilet was my -- we have put in and he said, no, I didn't think so, anyhow. Today, what I want to talk about is Ulster Bank has shut down all Southern Irish branches very suddenly, my question may be, did it have to be so fast or shut down first of April, could it not milk or owned a closed couple of branches and stayed out of in Southern Ireland. What was the reason for leaving as well, leaving Southern Ireland?

Well, yes, indeed, we have decided to close the Southern Irish Ulster Bank. That has no implication, by the way, for the Ulster bank that operates in Northern Ireland. Our conclusion after many years of losses in Southern Ireland was that in the particular circumstances of the Irish market, given the nature of competition, the regulation in Ireland, et cetera, that we could not see our way to making that bank a profitable bank. And therefore, that it was going to use up shareholder resources indefinitely. We did not feel as a Board that, that was a comfortable position to be in. And so in discussions with the Irish government and the Irish Central Bank we agreed to close the bank. And with them in close discussion with the regulators and the government, we agreed a program of transferring both assets and liabilities to other banks in Ireland. Some to Allied Irish, some to PTSB because we believed that, that was the right way to approach the closure and was indeed in line with our purpose. We thought about this through a purpose lens, what was the best for customers. And our conclusion was that the best thing for our customers, both corporate and personal was to engineer transfers -- block transfers of assets with a number of our colleagues went with them. And then to manage down the liabilities and to ensure that people had options to go to in other banks in the Republic of Ireland. That was done in cooperation with Bank of Ireland and Allied Irish and PTSB who agreed to receive our customers. And our view was that, that was the best outcome for our customers. And that should be done relatively quickly. We thought it was not good for our customers to have a sort of ramp, which wasn't actually providing good services to them and could no longer. So if you just had a small number of branches left, you could not provide full range of banking services to customers, and they would be much better off if they were transferred to a bank willing to receive them as the others were. So we do think that the closure, which was regrettable in many ways, we've been in Ireland for a long period of time. Ulster Bank had a good name in the Republic but unfortunately, it simply wasn't possible given the scale of that bank and the nature of the competition, et cetera, to establish a profitable venture. And we believe that the way the closure has been affected has been the right thing to do for our customers. And indeed, it is moving ahead quite satisfactorily with most of our customers now have been transferred to good banking services operated by our former competitors. The next question, I think, is from the Reverend Mary Cranfield.

First, some context which is necessary. Following our mother's death, my sister and I had a pitifully bad time with the NatWest Bereavement department, which lasted over 6 months as we sought the closure of our mother's accounts. We were harmed and experienced significant stress and even inappropriate comments. So many staff were courteous and tried to help. The systems often seemed incapable of making progress. And we regularly despaired of achieving resolution. For me, other circumstances meant that the delays led to financial losses and struggles. Our legal costs will have increased as our lawyers had to do extra work. Hopes were frequently raised, but promises were broken over and over again. We are relatively resilient and has amazing support and help from friends. We were also not in tragic circumstances since our mother was 97 when she died. But what about other vulnerable people struggling in isolation, what about situations when delays in transferring money following a bereavement put people into desperate or catastrophic financial positions in the midst of a cost of living crisis. Both my sister and I are Church of Scotland, Parish ministers with significant experience of caring for bereaved families. We know just how fragile people can be at such times. I am very pleased that a few days ago, NatWest put me in touch with DMOS scores. From the Chief Operators office on the retail side of the bank, someone who has been tasked with improving people's journeys with the Bereavement department. We have already spoken, and I hope that I may in some way be [indiscernible] forward. However, I am disappointed that my much earlier offers of help and suggestions were completely ignored until I received my invitation to this meeting, courtesy of a rather stray share or 2, which I inherited a long time ago. You need to try harder to listen to customers as well as shareholders. My question, will NatWest Bank take its responsibilities towards bereaved families with the utmost seriousness and give the most and his team all the resources they need as they review processes and make essential improvements in the bereavement department to ensure the best possible support for those who need your services. The loss of a loved one and financial struggles is a dangerous combination. This really, really matters.

Well, thank you very much, Reverend Cranfield I recognize what you say about the process indeed went through it myself not that long ago with my own very elderly mother, not with this bank, I should say. The points that you make about the way this case were handled and not ones I'm going to contest at all. I think it could have been done much better. I recognize that we've offered compensation, but that I know is a token and not the -- not what you're really concerned about particularly. But what we have done and the person you referred to is our customer journey manager, and we would like to take the opportunity of a further dialogue with you to try to help us get this process better. I think there are some training implications for our staff in the bereavement team, but also the people working around the bereavement team. And the experience of looking at this case -- this unhappy case, for which I apologize, straightforwardly. Well, I hope, be of some benefit to other people in your situation because I believe that we can improve and we'd like to continue through our customer journey manager to discuss how we can do that. So the answer to your specific question is, yes.

Can I just say this? Thank you for the apology and so on. But just to say that, I mean, there is another angle. I mean the my experience of the complaints and department was even more pitiful. And I really -- although I only wanted to improve things for people going forward and wasn't really interested in the compensation. Just looking at it, it doesn't even make up for the losses we experienced. So I do think there's a lack of realism in that department. So just I'm doing that on behalf of myself, I couldn't care less about commodity compensation, but it's to do with other people. And I do think that -- and forgive me for butting in again, but I do think that is important and that needs looking at too in terms of other people. And thank you very much.

Well, we will certainly do that. Mr. Neil Mitchell.

Chairman, I ask for updated from last year, the financial provisions from all places placed in the annual report and accounts, i.e., the total for legacy litigation issues and the updated amount allocated for legal costs. Please can I have your CFO confirm these 2 total amounts for me again, as she did last year by the end of this year's AGM.

Sure. I will ask Alison to find these figures, which I know are at our fingertips.

Question -- fortunately, unfortunately, this year, I have some new questions. Furthermore, I stand here today as all of our NatWest shareholder and RBS customer. And as Chairman and CEO of Bank Claims Group Limited, and representative of our strategic legal funding, insurance interested parties. On behalf of the many RBS customers who have given the authority to now speak on their behalf. The reason I asked the question about accounting provisions for legacy litigation is that as a businessman, I completely understand and support your purpose-led strategy today and for the future. The problem is that you still have so many historical issues, situations, cases and claims to clean up in this bank before you can truly put your hand in heart and say it's a clean bank. As I indicated to you when we spoke informally, I now have access to and registered 629 cases from NatWest entrepreneur as Alison call them and customers of NatWest of civil and criminal misconduct against the NatWest Group. You invited me to bring them to you when we last spoke. I now formally request and my question is to ensure that I formally request for the meetings with your CEO and then yourself concerning the first 6 RBS claims, the Ulster Bank situation and take [indiscernible] legal regulatory -- SEC regulatory and banking controller-related issues in the United States of America against NatWest Group where you trade your shares. Please confirm that your CEO and then yourself on behalf of the Board will meet with me formally in line with your corporate governance, legal fiduciary and regulatory responsibilities in due course as this should be a matter of great concern to shareholders. I'm simply asking for a formal meeting.

And to do that because we would like to see first what the cases are, I think it would be quite unreasonable to expect, Alison and me to meet you in a sort of black box basis. So if there are specific cases that we need to look at, we will look at them carefully and then consider what the right course of action is.

We're happy to provide you prior to any meeting with a summary and outline details. Concerning the Ulster Bank situation that's already been referred to in an earlier question, as I just referred to it, I introduced an associate of mind Steve Middleton well over 4 years ago to now literally hundreds of Ulster Bank business customers, campaigners, litigants and their lawyers in Belfast and Dublin. Years on, the financial investigator and analytical work done with the input of many people and many specialists and experts, including the [John Listen Fraser], who I first met after my first RBS AGM in 2012, who literally wrote the book on RBS. It will initially all be presented publicly on Thursday online. It will outline the extent of serious frauds found at Ulster Bank in Northern Ireland and Republic. And thereby, you may recall that in writing in detail, I warned you, Mr. Chairman. Just before Ross McEwan resigned as CEO unexpectedly about the future magnitude of this serious fraud situation and years on here we are. You see it involves financial statutory accounting and regulatory accounting frauds found inside not just Ulster Bank, but the NatWest Group on an industrial scale. A scale I can assure you will be material to the bank as it affects thousands of customers who were fraudulently mis-sold swaps and fixed rate loans, and when -- then unknowingly, and this is the interesting bit, subjected to hidden credit risks. So it's about margin credit and the fraudulent use of such. That also involves examples of bank secretary fraud. The FCA have been made aware of this matter, but as per for the course, have not responded yet. The legal definition of this is that it amounts to institutional criminality and conspiracy to defraud by the bank and named individuals and agents of the bank. And to do that to the U.K. financial institutions, the state, bondholders and individual investors. So my question is, quite simply, Mr. Middleton tells me that he informed us and rose about these findings. So can you please confirm that the bank, the Board and in particular, the CEO are aware of this situation. And finally, the initial public presentation is being hosted by the transparency task force and will take place online on first of the 27th of April, between 6 and 8 p.m. I just need confirmation that the bank and the Board are aware of what I've just said.

Aware of what you have said, you are right that the point has gone to the FCA. We await their response, but I take this opportunity of completely rejecting any notion, this was a conspiracy and I don't believe there's any evidence to support that. But we are aware, and of course, we will listen with interest to what he said on Thursday.

I never once use the word conspiracy. Everything I do is fact-based and evidence led. And as you'll see from my associates on Thursday and many others who will go online with examples that there is plenty of credible evidence of what I've just said. Anyway, it gets worse. Furthermore, I wish to inform the Board of NatWest -- don't worry, this is -- there is another final question coming. That I supported and thereby provided NatWest customer claims data statistics and analysis to the petition submitted as legally required to his majesty the King and it's now being assessed by his courtiers, advisers and lawyers even the Lord Spiritual have given written opinion in the House of Lords and advised in writing a letter I have with me today, but you're not -- I'll happily provide another time that it should be a matter for the ICC in The Hague to consider. This has been done legally and had to be done legally before submitting it to The Hague and it concerns 77 pages of evidenced systemic abuses of the human rights of customers of NatWest, Lloyds and Clydesdale U.K. banks, 900 case examples merely as samples were appended to this document. Beyond the bereavement services mentioned earlier, it also includes references to medical records, doctors reports and reports of suicide and those rescued from suicide and I quote from various medical records where it is because of the pressures brought upon them by the bank having effects on their mental and physical health as well as the financial wellbeing. This document is now going to The Hague as part of U.K. law. So my question is quite simply this, are you aware of this petition? And if -- this legal petition and if not, would you like a copy sent to you by Mr. Milan, my lead signatory as a courtesy for you to consider. I have -- I am, as I've said, already happy to meet, happy to discuss all of the above in private in far more detail. When we next meet. I said to you the last time we spoke that I would come back to you when I was ready. I'm now ready -- thank you, Mr. Chairman. Good day to you, sir.

Thank you. The answer to your specific question in there is no, I was not aware of that petition. And yes, we would appreciate seeing a copy of it. I'll now turn to Katie Murray to confirm the figures on legal provisions.

Thanks very much, Howard. So the easy way obviously is to find it in the accounts, Page 361, if you wanted to look at it in terms of the litigation and other regulatory provisions, GBP 240 million is reduced from GBP 277 million at the beginning of the year. And then in Note 26, it details the specific, cases that we're still working on, which regular readers of this part of the accounts use a much shorter note than it has been historically as we've continued to clean up these historic issues.

I don't believe we have been notified of any other questions. So I think we will now move, sorry. Sorry, I haven't got any other questions notified to me, but if you have one. Not terribly well at the moment. I don't think that's working. No, it doesn't look like it.

[indiscernible] So my question is relation to voluntary [indiscernible] share actually. This measures the average pay of ethnicity, ethnic minority work in our company compared to the average pay of white workers, which is similar to general pay gap reporting, which is mandatory. NatWest has continued to report on their ethnicity pay gap since 2020 using the same calculation methodology as the gender pay gap report. I was delighted to see that NatWest disaggregated its workforce data according to the five earners categories for the first time this year after making a commitment to do so last year. NatWest has shown leadership in measuring and reporting their ethnicity pay gap data. As noted in your 2022 annual report, the company has a mean ethnicity pay gap of 7.3% and a mean bonus gap of 21.8%, it is encouraging that this represents a decrease since last year. In line with CIPD recommendations, the next step is called the company to put in place a targeted action plan to close gaps, which examines the location and causation of gap, this would go beyond the current commitments on banking of racial quality. ShareAction's good work program coordinates institutional investors with GBP 3.7 trillion in assets under management, its members are moving to support voluntary ethnicity pay gap reporting as a marker of responsible business practice. I would like to thank NatWest for leading the way, both in terms of measuring and addressing their ethnicity pay gap. It is important that other companies follow your example. We are particularly grateful that NatWest agreed to work with ShareAction to develop a case study on your approach in this area. Such a case study will provide an example of good practice that will encourage other companies in the financial services sector to be ambitious in tackling the ethnicity pay gap. So I would like to ask the Board's position on reporting and developing a race action plan. Additionally, would the board be willing to meet with ShareAction and the good work Investor Coalition to discuss this issue further. ShareAction highly valued the dialogue with staff of NatWest last year and look forward to further positive interactions in the year ahead.

Thank you, Judith. Well, thank you for your positive words about what we have done. It is an issue we address carefully in the bank and which we take very seriously. And indeed, in addition to publishing the data that you described, we have disaggregated that by different groups, including particularly black colleagues. That followed some work that we did following the Black Lives Matter demonstrations where we actually set up an internal group involving a lot of the colleagues at all levels of the organization, which made a series of recommendations about how we could be a better bank for people from, I think, minority and particularly for black colleagues. So we are interested in this area, and we are certainly prepared to discuss work further with ShareAction, what would be involved in a case study and how we could help to spread the word on this. And I believe, in fact, a meeting has been arranged for the next week which we'll discuss this further. So it is an area we are keen to be involved in and if we can be helpful in using our experience to be an encouragement for others than something that the Board would support. Thank you. I think I don't see anyone else and we don't have any other questions registered. So I will close the voting in just a moment. So if you could now conclude your voting. And thank you. I will now declare the voting closed, and the results are displayed behind me or should be momentarily, Yes. That's for Resolutions 1 to 14 and then for Resolutions 15 to 26 and also those which require approval from the independent shareholders. And I declare all these resolutions carried. Thank you, ladies and gentlemen. That concludes the business of the 2023 Annual General Meeting. I apologize for wishing you good afternoon earlier because we normally have our meetings in the afternoon and the sort of template from my speech, I didn't register that we were holding it in the morning. But thank you for reminding me that it was still the morning. But we're almost in the afternoon. Thank you all for coming, and have a safe journey home.