Minutes of 2008 AGM
MINUTES OF THE ANNUAL GENERAL MEETING
HELD AT THE INTERNATIONAL CONVENTION CENTRE
BIRMINGHAM ON THURSDAY 17 JULY 2008 AT 11.00 A.M.
| ON THE PLATFORM | G M T Howe (Chairman) R P Walther (Deputy Chairman and Senior Independent Director) G J Beale (Chief Executive) Mrs S David (Chairman of Remuneration Committee) M M Rennison (Group Finance Director) D A Ross (Chairman of Audit Committee) R Johnston (Secretary) |
| PRESENT | All directors with the exception of Mr Tudor John who had given his apologies |
| IN THE HALL | 225 Members of the Society and 10 guests |
1. CHAIRMAN'S INTRODUCTION
The Chairman opened the meeting, explained that this was his first AGM as Chairman and welcomed the members present.
The Chairman invited Mr Beale, Chief Executive, to make a presentation on the Society's achievements and challenges faced during the year.
2. CHIEF EXECUTIVE'S REVIEW
Mr Beale's presentation covered the following issues:
Market conditions and Nationwide's position
- Market conditions in the second half of the year had been extremely difficult. In August 2007 the wholesale market had effectively closed. A number of large institutions, both within the UK, Europe and the United States, made large loss provisions for their investments.
- Against this background, Nationwide had one of the strongest balance sheets in the United Kingdom.
- 70% of Nationwide funding was from members and customers.
- Nationwide enjoyed an excellent credit reputation and had very strong credit ratings.
- Nationwide held substantially more capital than UK banks relative to the assets on our balance sheet.
- There was no direct exposure to United States sub-prime mortgage assets.
- Nationwide's lending was conducted in a prudent and conservative manner.
- Nationwide's arrears experience was less than one-third of the average UK firms' arrears, demonstrating a good quality of assets.
- Customers recognised Nationwide's strength. We experienced record inflows of retail savings/deposits.
- Nationwide was not immune to the impact of the credit crunch. We suffered a loss of £102 million against some Structured Investment Vehicles. However, because Nationwide will hold the assets for the next three to four years and we had stopped any further deterioration in the exposure, the assets were not impaired and Nationwide expected to get a substantial recovery against the £102 million.
Nationwide's results
- Nationwide's underlying profit increased 17% to £781 million.
- The number of products sold increased by 20%.
- Total income increased by 15% to £2.2 billion.
- The cost income ratio reduced by 1%.
- Capital went up 19% to £9.5 billion.
Merger with the Portman
- The merger with the Portman took place on the 28th August 2007.
- We re-branded and re-equipped 90 branches.
- We transferred 1.2 million customer records.
- The merger is on target to deliver £90 million of savings.
- This year all of the Portman savings accounts will be migrated to Nationwide.
- Not all aspects of the merger went as smoothly as Nationwide would have liked. We did not estimate correctly the number of ex-Portman members who, immediately after the merger, wanted to change their passbooks. This caused delays, for which Mr Beale apologised.
- A tremendous amount of work has taken place to reduce delays and this effort will continue.
- Many of Nationwide's products and services had received awards.
- Nationwide came top of the J.D. Power survey of the twelve leading current account providers.
- Our credit card and current account had been given five star ratings by Defaqto.
- For our support of first time buyers and our activity in the re-mortgage sector, Nationwide had won best lender in both categories from Your Mortgage.
The Future
- Nationwide will remain safe and strong.
- We will continue to operate our business in a prudent and conservative way.
- We will continue to focus on good quality lending.
- Nationwide remained committed to mutuality.
3. RESOLUTIONS
- an ordinary resolution to receive the Directors' Report, the Annual Accounts, the Annual Business Statement and the Auditors' Report for the year ended 4 April 2008
- an ordinary resolution to approve the Directors' Remuneration Report for the year ended 4 April 2008
- an ordinary resolution to approve the reappointment of PricewaterhouseCoopers LLP as Auditors to hold office until the conclusion of the next Annual General Meeting
- a special resolution that the amendment to the Rules of the Society as set out on page 14 of the Voting Guide be approved.
- delays experienced relating to ISA administration
- the FSCS limits
- level of staffing
- ethnic diversity in branches
- CO2 emissions
- security of deposits
- the redundancies associated with the Portman merger
- the feasibility of a webcast for the AGM
- Directors' bonuses
- the use of Fairtrade products at the AGM
- Tier 1 Capital and Basel
3.1 The Chairman proposed:
3.2 Mr Walther proposed that each of those Directors offering themselves for election or re-election, namely Sue Ellen, Geoffrey Howe, Derek Ross and John Sutherland, be elected or re-elected as a Director of the Society.
The Chairman then invited questions from members.
Matters raised by members covered a wide range of issues, including:
4. RESOLUTION TO RECEIVE THE ANNUAL REPORT AND ACOUNTS
The resolution to receive the Directors' Report, the Annual Accounts, the Annual Business Statement and the Auditor's Report for the year ended 4 April 2008 was put to a poll as required by the Chairman. The result of the poll subsequently declared by the Chairman was:
Votes in favour: 1,558,939
Votes against: 13,990
Abstentions: 4,710
Resolution carried: Majority in favour 99.11%
5. RESOLUTION TO APPROVE THE DIRECTORS' REMUNERATION REPORT
The resolution to approve the Directors' Remuneration Report for the year ended 4 April 2008 was put to a poll as required by the Chairman. The result of the poll subsequently declared by the Chairman was:
Votes in favour: 1,513,287
Votes against: 52,548
Abstentions: 11,800
Resolution carried: Majority in favour 96.64%
6. RESOLUTION TO REAPPOINT THE AUDITORS
The resolution to approve the reappointment of PricewaterhouseCoopers LLP as auditors to hold office until the conclusion of the next Annual General Meeting was put to a poll as required by the Chairman. The result of the poll subsequently declared by the Chairman was:
Votes in favour: 1,549,086
Votes against: 21,996
Abstentions: 6,553
Resolution carried: Majority in favour 98.60%
7. SPECIAL RESOLUTION TO AMEND THE RULES OF THE SOCIETY AS SET OUT ON PAGE 14 OF THE VOTING GUIDE
The special resolution that the amendment to the Rules of the Society as set out on page 14 of the Voting Guide be approved was put to a poll as required by the Chairman. The result of the poll subsequently declared by the Chairman was:
Votes in favour: 1,543,484
Votes against: 21,856
Abstentions: 12,311
Resolution carried: Majority in favour 98.58%
8. ELECTION OF DIRECTORS
The proposal that each of those Directors offering themselves for election or re-election, namely Sue Ellen, Geoffrey Howe, Derek Ross and John Sutherland, be elected or re-elected as a Director of the Society was put to a poll as required by the Chairman. The result of the poll subsequently declared by the Chairman was:
| FOR | AGAINST | MAJORITY | IN FAVOUR | |
|---|---|---|---|---|
| Sue Ellen | 1,544,939 | 25,545 | 98.37% | Resolution carried |
| Geoffrey Howe | 1,528,656 | 40,041 | 97.45% | Resolution carried |
| Derek Ross | 1,541,580 | 27,998 | 98.22% | Resolution carried |
| John Sutherland | 1,542,977 | 25,786 | 98.36% | Resolution carried |
9. CLOSE OF MEETING
The Chairman thanked the members present for their attendance and declared the meeting closed at 1.13 p.m.