Our Annual General Meeting

[00:02] This has been an outstanding year for the Nationwide Group.

[00:05] We've delivered record growth and record member value and we've increased our lead for customer satisfaction.

[00:15] This year we also started to integrate Virgin Money into the Nationwide business, and I'm pleased to say that's going very well.

[00:22] Not only has it already contributed to the financial strength of Nationwide Group but soon we will start extending some Virgin Money products and services to our members.

[00:32] Over the next few minutes Debbie and I will cover some of the highlights from last year and how we have engaged with you and delivered value for our members. But first, let me start by talking about the economic conditions that we've been operating in and our financial performance.

[00:53] While the economic outlook remains uncertain, UK households and the businesses that Virgin Money support have tended to be reasonably well insulated from the global uncertainty.

[01:04] The underlying pace of UK economic activity is still subdued, and when it does improve it is only likely to be gradual. That means that labour market conditions should be quite solid.

[01:15] There will be some resilience in earnings and interest rates should continue to be relatively low to support both the housing markets and some growth in deposits.

[01:24] Even though the economic environment was relatively flat, your Society's financial performance has been outstanding.

[01:31] Our financial results this year included the first six months of our ownership of Virgin Money.

[01:37] We've achieved record growth in mortgages and deposits, we returned our highest ever member value, and we increased our lead on customer satisfaction to its highest point in eight years.

[01:49] Having a strong and stable financial foundation is more important to Nationwide than pure profits and last year we benefitted from the diversity of funding from our acquisition of Virgin Money, particularly business bank deposits.

[02:03] This allowed us to prioritise value for our members rather than higher profits.

[02:08] We chose to return £2.8 billion pounds in value to members.

[02:13] This included giving £1 billion pounds directly to you - our members through the Fairer Share Payment and The Big Nationwide Thank You, and £1.8 billion pounds through better rates and incentives.

[02:25] Deposit rates were 30% higher than the market average.

[02:29] I'm also pleased to report that we recorded a £2.3 billion pounds gain on our acquisition of Virgin Money because we bought the business at such a good price.

[02:39] Virgin Money has performed strongly since acquisition, with a return to growth in mortgage lending and an increase in business lending.

[02:46] The number of business current accounts has grown by 5% since acquisition, and we plan to pilot referrals for Nationwide customers to Virgin Money's digital business current account shortly.

[02:57] The acquisition of Virgin Money was a major milestone last year.

[03:02] We took this step after carefully considering the long-term interest of the Society and its members.

[03:07] We have canvassed your views on the Virgin Money acquisition for over a year now, and more than 200,000 of you have been surveyed.

[03:15] For those aware of the acquisition, sentiment in favour of the deal is now at its highest level at 97%.

[03:22] We assessed these views from our ongoing Customer Experience Tracker survey, which provides us with feedback from over half a million of our customers each year.

[03:31] That is just one of the ways that we consider, and act on, member views.

[03:35] At Board meetings we regularly review insights from complaints to consider what we can learn from them, and we listen directly to members in focus panels.

[03:45] Directors also spend time in our branches talking directly with our members and customers.

[03:50] Last year, we also refreshed our Member Voice panel.

[03:53] That is a panel of over 6,500 members who we consult to help shape the priorities of the Society and to make sure that we deliver for you.

[04:02] Here to tell you a bit more about that are some of our members and two of our non-executive Directors.

[04:10] It's nice to be able to feel appreciated.

[04:14] It's just being listened to.

[04:17] As a Board, we really want to put members at the heart of everything we do and that we're constantly listening to members and getting insights from members.

[04:24] They are the one building society who wants to know my opinion, and wants to know what is going on in my life.

[04:31] Hearing from all these different groups of customers does bring a really rounded perspective to how our customers feel about Nationwide and also what's really important to them.

[04:43] I think Member Voice makes you feel as if it's an organisation that really values its customers and values its customers views and comments.

[04:50] Member Voice is our research listening panel that we have for Nationwide members.

[04:55] We have over 6,500 members on Member Voice.

[04:57] We ran 59 activities on it last year.

[05:00] And we've had over 27,000 responses from members so it's a great way of members being able to tell us what is working well for them, and for us to be able to adapt and shape propositions off the back of their feedback.

[05:10] The panel was a classic example of how diverse Nationwide's member base is.

[05:14] There were so many different perspectives, inputs and so on.

[05:18] That huge spectrum of opinions and insights, very valuable.

[05:22] You're not alone and you can see commonality between you and your views are listened to.

[05:26] It's definitely worth it.

[05:27] And that can help us shape not only our products, but also our priorities overall, making sure that we're achieving our objective of extending the benefits of mutuality to as many members and bringing them what matters to them in their lives.

[05:40] App usage has been going up, and we knew that we wanted that to be as good as possible.

[05:45] It wasn't as good as we wanted it to be, so we were constantly getting feedback art of the Member Voice focus groups

[05:52] somebody mentioned the fact that they'd like it to be more compact, and it looks much better now.

[05:57] I'm so glad it's happened.

[05:58] We've moved away from the card reader machine because it's a faff having to carry it around all of the time.

[06:04] It was really cumbersome.

[06:06] You had to put your card in, generate a code and, we continually fed back on that and I think, you know, obviously there were changes that were made.

[06:13] So now when members join, provided they complete the biometric process, they don't have to use a card reader.

[06:18] They can use it.

[06:19] We are all about choice and giving members choice, but they don't have to use a card reader and that's really reduced some friction in the customer journey as well.

[06:26] I now can use biometric data, either face on my phone or a thumb on my iPad, and that’s so much better.

[06:35] The beauty of Nationwide is focusing on delivering really well for customers and members today but also thinking about what they need in the future as well.

[06:43] Product development, the technology that's coming through, the way that service needs to evolve.

[06:48] All of those are areas where the member voice is crucial.

[06:51] I think it's really important that in the year ahead, we keep up, with the huge amount of input that we've had from members and that as a Board, we will continue being as close to our customers as we can.

[07:02] The purpose of Nationwide is Banking - but fairer, more rewarding and for the good of society.

[07:07] And we have to stay true to that.

[07:20] That was just a short summary of the excellent work the Member Voice panel does …

[07:24] … and the ways that the Board gets a good representation of the views of all members.

[07:29] We're very grateful to the many thousands of members …

[07:32] … who contribute their time and insights to the Panel.

[07:35] We will show a bit more of that film towards the end of the meeting, …

[07:38] … along with details of how you can get involved to help shape your Society.

[07:49] As Kevin said, this has been an outstanding year for Nationwide.

[07:53] We were first for customer satisfaction among our peer group …

[07:57] … for the 13th year running and increased our lead.

[08:01] More people chose to switch their current account to Nationwide …

[08:05] … than to any other brand and we are now attracting more young people, …

[08:06] … than to any other brand and we are now attracting more young people, …

[08:09] … which is very important for the long-term success and strength of the Society.

[08:14] Last year, one in four new student accounts were opened with Nationwide, …

[08:19] … which was a record for us.

[08:21] We also reached an all-time high for mortgage lending …

[08:25] … and retained eight out of ten of our customers …

[08:28] … when it was time for them to renew their mortgage - that is the …

[08:32] … highest retention rate across all of the UK banking sector.

[08:36] Our service for mortgage customers is now market leading.

[08:41] For many we have reduced the length of time taken to apply for a mortgage …

[08:47] … down to just 20 minutes and increased the ways that people can manage their mortgage online.

[08:54] Last year we also became first choice for first-time buyers.

[09:00] We helped 120,000 people into a home of their own.

[09:04] That's almost double the year before and more than any other lender in the UK.

[09:11] At Nationwide we stand apart from other High Street lenders and online-only banks …

[09:16] … because we offer our customers real choice in the way they engage with us.

[09:20] The number of people using our mobile banking app is up more than 10% to 7 million people …

[09:28] … and we've introduced 30 new digital features and improvements …

[09:32] … to both the Virgin Money and Nationwide banking apps.

[09:35] A big improvement for Nationwide customers was the introduction of biometric authentication …

[09:42] … so that people no longer need to use the card reader for many tasks if they don't want to.

[09:48] We know many of you enjoy the convenience of our online chat facilities, …

[09:52] … and also enjoy talking to our colleagues on the telephone.

[09:56] However, the biggest difference between us…

[09:59] … and the rest of the high street banks is our Branch Promise.

[10:03] Not only are we committed to keeping branches open, …

[10:07] … but we are investing to make them even better.

[10:10] Last year we refurbished over 100 of our branches, from as far north as Cupar in Scotland, …

[10:17] … to Shanklin on the Isle of Wight, and Omagh in Northern Ireland.

[10:21] We also turned our branches in Liverpool, Chester and Exeter into flagship branches.

10:27] With over 600 branches across our network, …

[10:30] … we understand the important role face-to-face banking plays in local communities.

[10:35] Hundreds of colleagues support residents and neighbours in their everyday lives …

[10:40] … and when we acquired Virgin Money last October, …

[10:43] … we immediately extended our Branch Promise to its branches.

[10:47] Our branches are great for our customers and for communities, …

[10:52] … but they also make commercial sense.

[10:54] Almost 6 million of you visited a Nationwide branch last year, that's an increase of 4%.

[11:01] And more than 30% of new current accounts, …

[11:04] … and over 40% of ISAs, were opened in a branch.

[11:09] Our branches are helping local town centres to stay strong,

[11:13] … and a focal point for many communities.

[11:16] Last year we launched our partnership with Dementia UK as part of Nationwide Fairer Futures.

[11:23] Since then, dementia specialist Admiral Nurses have held 1,400 clinics in 120 of our branches.

[11:32] Here's Kevin with some more information on ways that Nationwide …

[11:36] … uses the power of its mutual model to benefit society.

[11:41] Nationwide is the largest building society in the world, …

[11:44] … and we are one of the most important mutuals in the UK.

[11:47] In line with our commitment to give 1% of pre-tax profits to good causes, …

[11:52] … last year that amounted to £20 million pounds.

[11:55] We refreshed and relaunched Money Lessons in February …

[11:59] … and since then over 100,000 children have taken part, to the delight of both pupils and teachers.

[12:06] Last year, we launched our Fairer Futures strategy …

[12:09] … in partnership with Centrepoint, Action for Children and Dementia UK.

[12:14] Since then, we have helped more than 1,600 homeless young people …

[12:17] … into a safe space to rebuild their lives.

[12:20] With Action For Children, nearly 37,000 children and families …

[12:24] … living in poverty or financial hardship have received vital funding.

[12:29] … And over 29,000 people living with dementia …

[12:32] … and their carers were supported by specialist Admiral Nurses.

[12:36] I am delighted to say that we added a new partner, …

p12:38] The Royal Marsden Cancer Charity to our Fairer Futures strategy …

[12:42] … and your Society is now funding world leading research …

[12:46] … to help improve the lives of cancer patients in the UK, and around the world.

[12:51] We've also continued the rollout of the National Databank programme, …

[12:55] … to provide free data loaded mobile SIM cards to those impacted by data poverty.

[13:00] Later in the Annual General Meeting we'll hear more about the difference …

[13:03] … that your support has made to our charity partners …

[13:06] … and the contribution that you will be making today just by voting.

[13:14] Debbie and I are proud to lead Nationwide …

[13:17] … and to work with its members for the good of society.

[13:20] We are now the second largest provider of mortgages and savings in the UK …

[13:24] … and have a relationship with one in three UK households.

[13:28] That is an immense responsibility and one that we don't take lightly.

[13:33] All of the directors and senior managers …

[13:35] … have to demonstrate their in-depth knowledge of banking and our business …

[13:39] … so as to ensure that we run the building society safely for the benefit of members.

[13:44] It is also an incredible opportunity to make banking …

[13:48] … fairer, more rewarding, and for the good of society.

[13:52] In this introduction we can only capture some of Nationwide's many highlights this year.

[13:57] We look forward to discussing many more with you during the Annual General Meeting.

[14:02] Nationwide - Banking, but fairer, more rewarding, and for the good of society.