NatWest Group plc
Annual General Meeting Statements
23 April 2024
NatWest Group plc will hold its
Annual General Meeting at 11:00am today. The meeting will deal with
the proposed resolutions as set out in the Notice of Meeting
previously issued to shareholders.
The following is an extract from the
remarks to be made by Chair, Rick Haythornthwaite and Chief
Executive Officer, Paul Thwaite at the meeting.
Rick
Haythornthwaite
As I said at the time of my
appointment in September, it is a great privilege to assume this
role. The NatWest bank that I inherit is consistently profitable,
significantly stronger, and undoubtedly more customer focused than
the one that my predecessor Sir Howard Davies took on in July 2015.
We should not underestimate how much this bank has transformed in
recent years. Where Howard was faced with fixing the issues of the
past, I take on the role of Chair with a mandate to help shape
NatWest's future.
Clearly 2023 was an exceptional
year, that brought challenges for our customers, our sector, and
the economy, as families and businesses faced into the fastest rate
rise cycle since the 1970s with persistently high levels of
inflation. The year brought unexpected challenges for the bank, but
our foundations and performance are strong, in fact profits for
2023 were at the highest level they have been
since before the 2008 financial crisis.
Since my appointment was announced,
the question I have been asked repeatedly is "why did you take on
this role?" For me, the answer was simple. I care about the UK. And
this bank plays a vital role in our economy, and the lives of its
19 million customers.
I firmly believe the role of a Board
is to champion a good growth agenda - not just for the bank - but
across all regions of the UK. Because a strong economy
matters to NatWest Group, and a strong NatWest Group matters to the
economy. To that end, I am here for one reason and that is to help
NatWest be the best bank it can be for its customers, for the UK
economy and for you, our shareholders.
When I joined the Board in January,
my first priority was to appoint a permanent Chief Executive
Officer. Following a rigorous and competitive search process, the
Board agreed that Paul Thwaite was the outstanding candidate for
the role. In Paul, I know we have a CEO who
brings unrivalled knowledge of our business, understands what
matters to our customers, and will shape the future of NatWest
Group. The banking sector is evolving
rapidly and as a Board, we believe he has the skills to succeed in
this changing landscape and, importantly, to make the most of the
opportunities it presents. Under Paul's
leadership, the bank is moving into a new era; and a return to
private ownership is now in sight. Paul and
I are ambitious for this bank and it's our shared view that in
delivering for our customers, we will deliver for you, our shareholders.
With that, I will now hand over to
Paul to provide an update on the business and our
priorities.
Paul
Thwaite
This is one of the most important
dates in the NatWest Group calendar. It's when you hear
directly from us. But more importantly, it's an opportunity for us
to hear directly from you and to answer your questions.
Firstly, it is an honour to lead
NatWest Group. And with it I feel a great sense of responsibility
to succeed for our customers, colleagues, and you, our
shareholders. As Rick has emphasised, NatWest Group plays a vital
role in the lives of our 19 million customers across the country
and an essential contribution to the UK economy.
We have a strong bank which is
performing well, underpinned by leading positions across our three
customer businesses from which to create further long-term value
for shareholders. This was demonstrated in our 2023 Full Year
financial results. During an uncertain economic environment, we
delivered for our customers, our shareholders, and the wider UK
economy, generating sustainable profits and
attractive returns - with our operating profit up 20% on
2022. Fundamentally this performance
was grounded in the support we provided to our
customers.
Last year we:
·
Lent an additional £9 billion into the UK economy -
supporting business owners and homeowners,
·
Opened over 100,000 new start-up accounts for
entrepreneurs and more than 1.5 million savings accounts for
individuals,
·
As well as helping 379,000 Retail banking customers
to buy or re-mortgage their home.
I strongly believe that by being
there throughout our customers' lives and meeting their changing
needs, we can build long-term value, allowing us to invest for
growth and drive attractive returns for shareholders. As we look to
2024 and beyond, I am optimistic about the opportunities ahead.
This is an exciting time for our sector and, importantly, for our
bank.
The needs and expectations of
customers are changing at pace, as they engage with emerging
technology, adapt to new social trends, and build ever more
resilience to a fast-evolving world. This
time of change presents an opportunity for us to grow with our
customers by becoming a trusted partner to them. By doing so,
I am confident we can shape the future of NatWest Group to deliver
its full potential.
Through the continued macro
uncertainty in the UK and geo-political uncertainty overseas, we
remain focused on the things we can control. This is reflected in
our priorities we have set for the year ahead. Our first and number
one priority is to serve our customers well to deliver disciplined
and profitable growth. I believe that there are significant
opportunities to drive further growth across our three customer
business; becoming a trusted partner to our
customers, with services that meet more of their needs today and,
in the future. In doing so, we will
help build a growing economy across all nations and regions of the
UK and make a valuable contribution to wider society.
As the UK's largest commercial bank,
with an unmatched network of relationship
managers with sector and regional
expertise, we are helping businesses of all
sizes, in all regions to grow. We are also
driving investment and innovation in the UK through our support of
start-ups, growth sectors, and as the biggest lender to
infrastructure. And our support to families and individuals is
integral to the economy, including as one of the country's biggest
mortgage lenders, helping people to buy and refinance their homes.
We have a proven ability of building market share in new business
areas, including at the start of customers' financial lives. For
example, in Youth, where we are helping future generations to
develop good money habits and now serve around one in five young
people.
Secondly, we are prioritising
bank-wide simplification to become more efficient and effective,
making it easier for our customers to do business with us and
improving engagement and productivity for our colleagues. We are
re-focussing our investment spend into activity that will help us
achieve this. The programmes and pilots we ran in 2023 have shown
us the potential. For example, working with our technology partners
we have consolidated five legacy systems into one single customer
platform in our retail business. This has enabled us to spend more
time with customers and improve the quality of our interactions.
And with the use of artificial intelligence, there are material
opportunities to pursue further customer benefits and increase
efficiency. A bank wide exercise in 2023 identified over 100
priority use cases for AI to address manual operations processes
and wider controls. Ultimately, we want to build a NatWest Group
that is simpler and more productive to better serve our
customers.
And thirdly, we are committed to
managing our investment, capital, and costs effectively.
We have a strong track record of controlling costs and, alongside
efficient capital allocation, we will continue to generate the
capital to invest in NatWest's future, whilst delivering attractive
distributions to shareholders. I am
confident that these actions will deliver long-term sustainable
value for our customers, shareholders, and the wider UK
economy.
To conclude, we delivered a strong
performance in 2023, we have clear priorities for the years ahead
and we are ambitious and optimistic for NatWest.
Fundamentally, I want us to be the very best bank
we can be for our customers and for our shareholders. Our
achievements would not be possible without the continued efforts
and dedication of our colleagues, so I would like to finish by
thanking every one of them for making a contribution to serving our
customers day in day out.
Rick
Haythornthwaite
As Paul outlined, delivering
sustainable returns to our shareholders is a key focus for the
bank's management team and for the Board. As a Board, we serve this
bank at the behest of you, our shareholders. This remains
front of mind in each and every decision we make.
We have a strong track record of
distributing surplus capital to shareholders and this intention has
not changed; we remain committed to a 40% pay-out ratio on
distributions. We were pleased to announce £3.6 billion of capital
returned to our shareholders for 2023. This was achieved through
the payment of an interim dividend of £500 million and a proposed
final dividend of £1 billion, which we have asked you to vote in
favour of today. We completed a further £500 million on-market
buyback in Q1'24 and announced a new on-market buyback of £300
million in February, which we expect to be completed by the end of
July. And we were also pleased to have the opportunity to buy back
£1.3 billion of shares directly from His Majesty's
Treasury.
In 2008, the government stepped in
to save the financial system from collapse. Today we have strong,
well performing banks, which are supporting customers and
contributing positively to the British economy. Government
ownership of NatWest now stands below 29%, having started the year
at almost 38%. And we are pleased that the government remains
committed to fully exiting its NatWest shareholding by 2025 to
2026. This is a shared ambition which we believe is in the best
interests of the bank and our shareholders. Good progress has been
made in recent months and I am confident that this leadership team
will see the return to full private ownership.
The Chancellor used his Spring
Budget last month to confirm the government's intention to sell
part of its shareholding to retail investors. He said the sale
would take place this summer at the earliest, subject to supportive
market conditions. And we will work closely with UKGI and His
Majesty's Treasury if the government does decide to launch a retail
campaign.
To conclude: we are ambitious,
optimistic, and focussed on delivering for our customers, and in
turn our shareholders and the UK economy.
Forward-looking statements
This announcement may include
forward-looking statements within the meaning of the United States
Private Securities Litigation Reform Act of 1995, such as
statements that include, without limitation, the words 'expect',
'estimate', 'project', 'anticipate', 'commit', 'believe', 'should',
'intend', 'will', 'plan', 'could', 'probability', 'risk',
'Value-at-Risk (VaR)', 'target', 'goal', 'objective', 'may',
'endeavour', 'outlook', 'optimistic', 'prospects' and similar
expressions or variations on these expressions. These statements
concern or may affect future matters, such as NatWest Group's
future economic results, business plans and
strategies. In
particular, this announcement may include forward-looking
statements relating to NatWest Group plc in respect of, but not
limited to: its economic and political risks, its financial
position, profitability and financial performance (including
financial, capital, cost savings and operational targets), the
implementation of its strategy, its climate and
sustainability-related targets, increasing competition from
incumbents, challengers and new entrants and disruptive
technologies, its access to adequate sources of liquidity and
funding, its regulatory capital position and related requirements,
its exposure to third party risks, its ongoing compliance with the
UK ring-fencing regime and ensuring operational continuity in
resolution, its impairment losses and credit exposures under
certain specified scenarios, substantial regulation and oversight,
ongoing legal, regulatory and governmental actions and
investigations, and NatWest Group's exposure to operational risk,
conduct risk, cyber, data and IT risk, financial crime risk, key
person risk and credit rating risk. Forward-looking statements are
subject to a number of risks and uncertainties that might cause
actual results and performance to differ materially from any
expected future results or performance expressed or implied by the
forward-looking statements. Factors that could cause or contribute
to differences in current expectations include, but are not limited
to, future growth initiatives (including acquisitions, joint
ventures and strategic partnerships), the outcome of legal,
regulatory and governmental actions and investigations, the level
and extent of future impairments and write-downs, legislative,
political, fiscal and regulatory developments, accounting
standards, competitive conditions, technological developments,
interest and exchange rate fluctuations, general economic and
political conditions and the impact of climate-related risks and
the transitioning to a net zero economy. These and other factors,
risks and uncertainties that may impact any forward-looking
statement or NatWest Group plc's actual results are discussed in
NatWest Group plc's 2023 Annual Report on Form 20-F,
and its other public filings. The forward-looking
statements contained in this announcement speak only as of the date
of this announcement and NatWest Group plc does not assume or
undertake any obligation or responsibility to update any of the
forward-looking statements contained in this announcement, whether
as a result of new information, future events or otherwise, except
to the extent legally required.
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