Minutes of 2011 AGM

ON THE PLATFORM

G M T Howe (Chairman)
R P Walther (Deputy Chairman, Senior Independent Director and Chairman of the Remuneration Committee)
G J Beale (Chief Executive)
M M Rennison (Group Finance Director)
R P Perkin (Chairman of Audit Committee)
S N Waite (Group Secretary)

PRESENT

All Directors

IN THE HALL

769 Members of the Society and 14 guests

1. CHAIRMAN'S INTRODUCTION

The Chairman opened the meeting, welcomed all those present and introduced those on the platform. He invited Mr Beale, Chief Executive, to make a presentation on the Society's progress during the year.

2. CHIEF EXECUTIVE'S REVIEW

Mr Beale's presentation covered the following issues:

Financial Results

• Underlying profit had increased by 30% at £276m.
• Non interest income growth up 17% at £445m.
• Underlying costs reduction of £5m.
• Impairment charge reduced by 35%.
• Core Tier 1 capital ratio of 12.5%. Total regulatory capital of £9.2bn.
• Core liquidity at 13.8%. Long term wholesale funding ratio at 25.9%.
• Robust asset quality – 1.3m residential mortgages.

Products

• 2010/11 had seen a growth of £1.6bn in retail savings balances, backed by new savings promises. Highly successful ISA season with 20% Cash ISA market growth.
• Increased mortgage lending to £12.8bn giving a market share of 9.5%. 17,200 first time buyers representing 23% of new borrowers. The BMR pledge had been maintained, which had provided £600m of member benefit.
• 353,000 FlexAccounts had been opened, an increase of 118%. 1.3 million customers provided with free European travel insurance. Highly competitive new credit card with 298,000 sales, an increase of 173,000 on the previous year.
• Over £5bn invested and under administration. Strong growth in Protection and Investment business, with over 313,000 products sold.

Customer Service

• Nationwide's aim is to be the number 1 for customer service and 15,000 customers are asked to rate our service every month. Nationwide has less than 3% of all financial sector complaints and the Financial Ombudsman agrees with 3 out of 4 decisions made by Nationwide.
• Member contact is maintained through Regional and Online TalkBacks. The new 'Your Nationwide' website is now active.

Supporting Communities

• The Society continues to work with Macmillan Cancer Support and over £6 million has been raised since the two organisations started to work together.
• The Nationwide Foundation supports 10 larger charities and also makes grants to small charities with a grants budget of £1m.
• Supporting talented individuals for the London 2012 Paralympics. £1m invested over 7 years.
• £3m Money Active partnership in conjunction with Citizens Advice Bureau. Providing financial capability skills, training and advice on money matters.

Regulation

• FSCS - £191m costs so far, £331m costs for the next 3 years and £647m estimated lifetime cost.
• Bank Levy - £20m estimated annual charge.
• Independent Banking Commission – Nationwide the 'only Challenger Brand'.

3. RESOLUTIONS

3.1 The Chairman proposed:

• 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 2011;
• an ordinary resolution to approve the Directors' Remuneration Report for the year ended 4 April 2011;
• an ordinary resolution to approve the reappointment of PricewaterhouseCoopers LLP as Auditors to hold office until the conclusion of the next Annual General Meeting; and

3.2 The Chairman proposed that each of those Directors offering themselves for election or re-election, namely: Alan Dickinson, Roger Perkin, Graham Beale, Geoffrey Howe, Michael Jary, Tony Prestedge, Mark Rennison, Chris Rhodes, Suzanna Taverne, Robert Walther and Matthew Wyles be elected or re-elected as a Director of the Society.

Prior to inviting questions from Members, the Chairman asked Robert Walther, Chairman of the Remuneration Committee, to take the meeting through the principles that had been adopted in determining executive remuneration.

The Chairman then invited questions from Members.

Matters raised by Members covered a wide range of issues, including:

• increased footfall in branches and ticket queuing system
• branch closures, refurbishment and customer facilities
• customer service in branches
• Executive Director's base pay, remuneration packages and comparisons with peers
• pension policy
• the role of the auditors and the trades union in setting pay
• number of member signatures required to stand as a Board candidate or propose a resolution
• commission free travel money, debit card charges abroad and use of credit/debit cards abroad
• diversity at Board level
• exposure to overseas debt in both Europe and the US
• competitiveness of savings rates
• savings accounts
• investment in derivatives
• account management/processing
• free travel insurance
• Regional Brands product offerings
• mortgage lending criteria
• equity loans and lifetime mortgages
• community donations and financial support to charities
• customer satisfaction levels and comparisons with the industry
• political donations
• AGM literature and organisation
• mutuality

4. RESOLUTION TO RECEIVE THE ANNUAL REPORT AND ACCOUNTS

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 2011 was put to a poll as required by the Chairman. The result of the poll subsequently declared by the Chairman was:

Votes in favour: 1,000,847
Votes against: 9,678
Votes withheld: 5,572

Resolution carried: Majority in favour 99.04%

5. RESOLUTION TO APPROVE THE DIRECTORS' REMUNERATION REPORT

The resolution to approve the Directors' Remuneration Report for the year ended 4 April 2011 was put to a poll as required by the Chairman. The result of the poll subsequently declared by the Chairman was:

Votes in favour: 938,082
Votes against: 65,910
Votes withheld: 12,099

Resolution carried: Majority in favour 93.44%

6. RESOLUTION TO RE-APPOINT THE AUDITORS

The resolution to approve the re-appointment 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: 984,782
Votes against: 23,133
Votes withheld: 8,221

Resolution carried: Majority in favour 97.70%

7. ELECTION OF DIRECTORS

The proposal that each of those Directors offering themselves for election or re-election, namely, Alan Dickinson, Roger Perkin, Graham Beale, Geoffrey Howe, Michael Jary, Tony Prestedge, Mark Rennison, Chris Rhodes, Suzanna Taverne, Robert Walther and Matthew Wyles 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:

9. CLOSE OF MEETING

The Chairman thanked the members for attending and declared the meeting closed at 2.35 pm.