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NatWest Bank (daveh) wrote: By building deeper relationships with our customers at every stage of their lives, we will deliver sustainable growth and help them to thrive in a challenging environment."
Publication of Circular and Notice of General Meeting and Notice of Class Meeting relating to
a proposed Special Dividend and associated Share Consolidation
NatWest Group is pleased to announce that, following the announcement on 29 July 2022 in relation to the proposed Special Dividend and associated Share Consolidation, a circular setting out the full details of the proposed Special Dividend, Share Consolidation and related matters (the "Circular") has been published today.
The Circular confirms that, in line with previous announcements, NatWest Group intends to return approximately £1.75 billion to Ordinary Shareholders by way of a proposed Special Dividend of £0.168 per Existing Ordinary Share in the capital of NatWest Group. In addition, in order to maintain the comparability, so far as practicable, of NatWest Group's share price before and after the Special Dividend, it is proposed that the Special Dividend be accompanied by a Share Consolidation resulting in Ordinary Shareholders receiving 13 New Ordinary Shares with a nominal value of £1.0769 each for every 14 Existing Ordinary Shares that they hold*.
Further to the Company's announcement made on 25 August 2022 that resolutions proposed at the General Meeting seeking approval by its shareholders of the Special Dividend, Share Consolidation and related matters, as well as the resolution proposed at the Class Meeting seeking approval by the ordinary shareholders to sanction the Share Consolidation and the amendment to its Articles proposed at the General Meeting were duly passed, NatWest Group announces that the Share Consolidation has today become effective.
Admission of the Company's New Ordinary Shares to the premium listing segment of the Official List of the Financial Conduct Authority ("FCA") and to trading on the London Stock Exchange's Main Market for listed securities took place at 8.00 a.m. today.
The ISIN for the New Ordinary Shares is GB00BM8PJY71 .
As a result of the Share Consolidation and in accordance with the requirements of the FCA's Disclosure Guidance and Transparency Rules, the Company hereby notifies the following in respect of its issued share capital with voting rights as at 8.00 a.m. on 30 August 2022.
nmdhqbc wrote:just called iWeb and apparently in their terms and conditions it states that if a fractional share resulting from a consolidation is worth less than £5 they keep it. anyone know if other brokers do this? i've lost about £0.54!!! principle is what matters though. and if it was say £4.99 i'd be actually annoyed based on the lost cash. that's meaningful to me. i often take action to save such sums. parking on the outskirts of a town and walking in to avoid parking charges for example.
GoSeigen wrote:nmdhqbc wrote:just called iWeb and apparently in their terms and conditions it states that if a fractional share resulting from a consolidation is worth less than £5 they keep it. anyone know if other brokers do this? i've lost about £0.54!!! principle is what matters though. and if it was say £4.99 i'd be actually annoyed based on the lost cash. that's meaningful to me. i often take action to save such sums. parking on the outskirts of a town and walking in to avoid parking charges for example.
Better take action and move to another broker then...
Chief Executive, Alison Rose, commented:
"In a challenging environment, NatWest Group continues to deliver a strong financial performance; supporting our customers, responsibly growing our lending and making significant investments to transform the bank.
At a time of increased economic uncertainty, we are acutely aware of the challenges that people, families and businesses are facing up and down the country. Although we are not yet seeing signs of heightened financial distress, we are very conscious of the growing concerns of our customers and we are closely monitoring any changes to their finances or behaviours.
The bank's strong capital and liquidity mean we are able to help those who are likely to need it the most, through support for our community partners, proactive outreach to our customers or targeted lending packages for the most impacted sectors."
Strong Q3 2022 performance
- Q3 2022 attributable profit of £187 million and a return on tangible equity of 2.9% and 12.1% excluding Ulster Bank RoI.
- Excluding notable items, income in the Go-forward group increased by £923 million, or 36.8%, compared with Q3 2021 principally reflecting the impact of volume growth, increased transactional related fees and yield curve movements.
- Bank net interest margin (NIM) of 2.99% was 27 basis points higher than Q2 2022 driven by the impact of base rate rises.
- Other operating expenses in the Go-forward group were £87 million, or 1.8%, higher for the year to date. We do, however, remain on track to achieve our 2022 cost reduction target of around 3%.
- A net impairment charge of £242 million in the Go-forward group in Q3 2022 principally reflects revision of scenario weightings, with more weight being placed on the downside scenario, and not due to underlying book performance where conditions continue to be benign.
- Total Ulster Bank RoI including discontinued operations reported a loss of €652 million in the quarter, which included a €419 million loss associated with the reclassification of UBIDAC mortgages to fair value.
Robust balance sheet with strong capital and liquidity levels
- Net lending balances for the Go-forward group increased by £9.9 billion during Q3 2022 to £371.5 billion, with growth balanced across the business.
- Go-forward group customer deposits decreased by £14.5 billion to £461.7 billion compared with Q2 2022, primarily driven by a reduction in Treasury repo activity of £7.6 billion and an £8.0 billion reduction in Commercial & Institutional reflecting reversal of short term inflows in Q2 2022 and general seasonal fluctuations in liquidity.
- The liquidity coverage ratio (LCR) of 156%, representing £67.8 billion headroom above 100% minimum requirement, decreased by 3 percentage points compared with Q2 2022, reflecting shareholder distributions, redemption of senior debt and maturing commercial papers and certificates of deposit.
- CET1 ratio of 14.3% was flat on Q2 2022 as the attributable profit and reduction in RWAs was offset by accruals for foreseeable dividends and pension contributions.
- RWAs reduced by £1.3 billion in the quarter to £178.5 billion.
2022 NatWest Group performance summary
Chief Executive, Alison Rose, commented:
"NatWest Group delivered a strong performance in 2022, with pre-tax profit up more than a third to £5.1 billion. We made considerable progress against our strategic goals, maintained a well-balanced loan book and distributed significant capital to our shareholders, including the UK Government.
Despite not yet seeing significant signs of financial distress among our customers, we are acutely aware that many people and businesses are struggling right now and that many more are worried about what the future holds. Our robust balance sheet, responsible lending and continued capital generation allow us to proactively support those who need it, whilst helping others to get ahead of the challenges to come.
As well as supporting our customers, this financial strength also allows us to continue investing in our business to meet the changing needs of our customers. By building long term relevance, trust and value through our purpose-led strategy, we will deliver sustainable returns and, ultimately, help to drive economic growth across the UK."
Strong financial performance and delivery against our targets
- Full year attributable profit of £3,340 million and a return on tangible equity of 12.3%.
- Excluding notable items, income increased by £2,877 million, or 28.3%, compared with 2021 principally reflecting volume growth, higher trading income and the improved rate environment.
- Bank NIM of 2.85% was 55 basis points higher than 2021. Q4 2022 Bank NIM increased by 21 basis points to 3.20% compared with Q3 2022.
- Total operating expenses were £71 million lower than 2021. Other operating expenses for the Go-forward group(1) were £201 million, or 2.9%, lower than 2021, in line with our cost reduction target of around 3%.
- A net impairment charge of £337 million, or 9 basis points of gross customer loans, principally reflects the latest macro-economics, including updated scenarios and their associated weighting, with more weight being placed on the downside scenario. Underlying book performance remains strong, with credit conditions remaining benign and levels of default remaining low.
- The tax charge for the year includes a £267 million credit in the carrying value of the deferred tax asset in respect of tax losses and a credit of £135 million in respect of an inflationary uplift in the value of UK Government Index Linked Gilt assets that is not subject to corporation tax.
- A final dividend of 10 pence per share is proposed, and we intend to commence an ordinary share buyback programme of up to £800 million in the first half of 2023, taking total distributions deducted from capital in the year to £5.1 billion, or 53 pence per share.
Robust balance sheet with strong capital and liquidity levels
- Net lending increased by £7.3 billion to £366.3 billion during 2022 primarily reflecting £14.4 billion of growth in Retail Banking mortgages, with gross new mortgage lending of £41.4 billion, and a £5.7 billion increase in Commercial & Institutional, partially offset by a £14.6 billion reduction in Central items & other, which included a £6.4 billion decrease as we continued our exit from the Republic of Ireland.
- Customer deposits decreased by £29.5 billion during 2022 to £450.3 billion, principally reflecting a £14.2 billion reduction in Commercial & Institutional due to an overall market liquidity contraction in the second half of the year and reductions in Corporate and Institutions, particularly non-operational accounts in Financial Institutions and professional services with relatively low margin and funding value, and a £12.2 billion reduction associated with our withdrawal from the Republic of Ireland.
- The liquidity coverage ratio (LCR) of 145%, representing £52.0 billion headroom above 100% minimum requirement, decreased by 27 percentage points compared with 2021. Total wholesale funding decreased by £2.3 billion in the year to £74.4 billion.
- The CET1 ratio of 14.2% was 170 basis points lower than the position on 1 January 2022 principally reflecting distributions and linked pension accruals of c.310 basis points partially offset by the attributable profit, c.190 basis points.
- RWAs of £176.1 billion were £0.2 billion lower than 1 January 2022 as lending growth and model changes were offset by a £5.7 billion reduction in the Republic of Ireland .
(1)Go-forward group excludes Ulster Bank RoI and discontinued operations.
Outlook (1)
The economic outlook remains uncertain. We will monitor and react to market conditions and refine our internal forecasts as the economic position evolves. The following statements are based on our current expectations for interest rates and economic activity.
Outlook 2023
- We continue to expect to achieve a return on tangible equity for the Group of 14-16%.
- Income excluding notable items for the Group is expected to be around £14.8 billion and full year NIM around 3.20%, based on a Bank of England base rate of 4.00% through the remainder of 2023.
- We expect to deliver a Group cost:income ratio (excl. litigation and conduct) below 52% or around £7.6 billion of Group operating costs, excluding litigation and conduct costs.
- Impairment losses in 2023 are expected to be in line with our through the cycle guidance of 20-30 basis points.
Capital and Funding
- We expect to generate and return significant capital to shareholders through 2023.
- We expect to pay ordinary dividends of 40% of attributable profit, and maintain capacity to participate in directed buybacks from the UK Government, recognising that any exercise of this authority would be dependent upon HMT's intentions and limited to 4.99% of issued share capital in any 12-month period.
- We will also consider further on-market buybacks as part of our overall capital distribution approach as well as inorganic opportunities where the strategic case and returns are suitably compelling.
- As part of the Group's capital and funding plans we intend to issue between £3 billion to £5 billion of MREL-compliant senior instruments in 2023, with a continued focus on issuance under our Green, Social and Sustainability Bond Framework, and up to £1 billion of Tier 2 capital instruments. NatWest Markets plc's funding plan targets £3 billion to £5 billion of public benchmark issuance.
Medium term
- We continue to target a sustainable return on tangible equity for the group of 14-16% over the medium term.
- We expect to deliver a Group cost:income ratio (excl. litigation and conduct) of less than 50%, by 2025.
- We expect that RWAs could increase by a further 5-10% by the end of 2025, including the impact of Basel 3.1.
- We expect to continue to generate and return significant capital via ordinary dividends and buybacks to shareholders over the medium term and continue to expect that the CET1 ratio will be in the range of 13-14%.
7. Dividends
The company has announced that the directors have recommended a final dividend of £1.0 billion, or 10.0p per ordinary share (2021 - £844 million, or 7.5p per ordinary share) subject to shareholder approval at the Annual General Meeting on 25 April 2023. If approved, payment will be made on 2 May 2023 to shareholders on the register at the close of business on 17 March 2023. The ex-dividend date will be 16 March 2023.
NatWest Group plc (the "Company" or "NWG") announces the commencement of its programme to buyback ordinary shares in the Company with a nominal value of £1.076923076923077 each ("Ordinary Shares").
On 17 February 2023, NWG announced its full year results and a share buyback programme (the "Programme") of up to £800 million. The Programme will commence on 20 February 2023 and will end no later than 20 July 2023, provided that the term of the Programme may be extended to end no later than 28 July 2023 to account for certain disruption events during the initial term of the Programme.
The Programme, the purpose of which is to reduce the issued share capital of NWG, will be for an aggregate market value equivalent of up to £800 million and will take place within the limitations of the authority granted by shareholders to the Board of NWG at its Annual General Meeting, held on 28 April 2022 and amended at its General Meeting held on 25 August 2022 to preserve the position that would have applied had the Share Consolidation not taken place (the "2022 Authority"). The 2022 Authority is due to expire at the conclusion of the 2023 AGM, or 30 June 2023, whichever is earlier (the "Expiry Date"). However, as Ordinary Shares are being purchased under the Programme which will have commenced prior to the Expiry Date, the 2022 Authority allows purchases to continue after such date and, therefore, up to 28 July 2023.
The maximum number of Ordinary Shares that can be purchased by NWG under the Programme is 966,284,391 . This number reflects the impact on the 2022 Authority of the reduction in issued share capital following the off-market buyback announced on 28 March 2022.
NWG has entered into non-discretionary instructions with UBS AG, London Branch to conduct the Programme on its behalf and to make trading decisions under the Programme independently of NWG.
NWG intends to cancel the repurchased Ordinary Shares.
Virtual Shareholder Event Statements
18 April 2023
NatWest Group plc will hold its Virtual Shareholder Event ("Virtual Event") at 6.00 p.m. today. The Virtual Event is being held ahead of the Annual General Meeting ("AGM") which will be held at Gogarburn, Edinburgh EH12 1HQ at 11.00 a.m. on 25 April 2023. By holding the Virtual Event as well as the physical AGM, we are providing shareholders with the opportunity to engage with our Chairman, Howard Davis and our CEO, Alison Rose, DBE and ask questions prior to voting on the business of the AGM.
The following is an extract of the remarks to be made by Howard Davies and Alison Rose at the Virtual Event.
Chief Executive, Alison Rose, commented:
"NatWest Group's strong performance in Q1 2023 is underpinned by our robust balance sheet, our high levels of capital and liquidity and our well-diversified loan book. Through a period of significant macro disruption and uncertainty, we continue to stand alongside the people, families and businesses we serve, providing targeted support and growing our lending responsibly.
Our disciplined and consistent approach to risk management means that arrears and impairments remain low. By monitoring customer behaviour and looking closely for signs of financial distress, we are able to put in place proactive measures to help those who are struggling right now and those who are worried about the future.
As we continue to make progress against our strategic priorities, NatWest Group is well positioned to navigate this challenging operating environment and to deliver sustainable growth and returns by responding to new and emerging trends that are shaping the lives of our customers."
Strong Q1 2023 performance
- Q1 2023 attributable profit of £1,279 million and a return on tangible equity of 19.8%.
- Total income, excluding notable items, increased by £1,036 million, or 37.2%, compared with Q1 2022 principally reflecting the impact of volume growth and yield curve movements.
- Bank net interest margin ( NIM) of 3.27% was 7 basis points higher than Q4 2022.
- Other operating expenses were £214 million, or 12.5%, higher than Q1 2022 driven by increased staff costs due to a one-off cost of living payment of around £60 million, increased costs in areas of strategic investment and costs in relation to our withdrawal from the Republic of Ireland. The cost:income ratio (excl. litigation and conduct) was 49.8% at Q1 2023.
- A net impairment charge of £70 million, or 7 basis points of gross customer loans, principally reflected the continued strong performance of our lending book. Levels of default remain stable and at low levels across the portfolio.
Robust balance sheet with strong capital and liquidity levels
- Net loans to customers excluding central items increased by £5.7 billion to £352.4 billion, or 1.6%, primarily reflecting £3.9 billion of mortgage growth in Retail Banking and a £1.6 billion increase in Commercial & Institutional.
- Customer deposits excluding central items reduced by £11.1 billion, or 2.6%, in the quarter reflecting around £8 billion higher customer tax payments, competition for deposits and an overall market liquidity contraction.
Further to the announcement on 1 June 2023, NatWest Group plc ("NatWest") announces the successful completion of the disposal of part of its shareholding, held through the wholly owned subsidiary RBS AA Holdings (UK) Limited, in Permanent TSB Group Holdings PLC ("PTSB").
The overall size of the disposal by the Minister for Finance of Ireland and NatWest (the "Selling Shareholders") was 54.6 million ordinary shares in PTSB representing 10.0% of the ordinary share capital of PTSB, with NatWest disposing of 27.3 million ordinary shares in PTSB representing 5.0% of the ordinary share capital of PTSB. The disposal was effected by way of a placing (the "Placing") of shares (the "Placing Shares") in an accelerated book building process.
NatWest Group ("the Group") notes the announcement made today by the Bank of England ("BoE") regarding the results of its 2022 stress test. The test explores whether the Group has sufficient capital to withstand a severe but plausible outcome starting with the Group's balance sheet as at 30 June 2022, and compares the theoretical Common Equity Tier 1 ("CET1") ratio and Tier 1 leverage ratio positions of the Group before and after the impact of strategic management actions.
The 2022/23 stress test also assesses NatWest Holdings Group ("NWH Group") against the same scenarios.
NatWest Group plc
Interim results for the period ended 30 June 2023
Chief Financial Officer, Katie Murray, commented
"NatWest Group's strong performance for the first half of the year is underpinned by our robust balance sheet, with a high-quality deposit base, high levels of liquidity and a well-diversified loan book. As a result, we are able to continue lending to our customers and delivering sustainable returns and distributions to our shareholders, even in the current uncertain economic environment.
Although arrears remain low, we know that people, families and businesses are anxious about their finances and many are really struggling. We are being proactive in our support for those who are hardest hit, helping to build the financial resilience of the customers and communities we serve."
Group Chief Executive Officer
On 25 July 2023, Alison Rose stepped down as Chief Executive Officer and as a Director of NatWest Group plc. Paul Thwaite was appointed as Chief Executive Officer and as a Director of NatWest Group plc for an initial period of 12 months, subject to regulatory approval.
Strong H1 2023 performance
- H1 2023 attributable profit of £2,299 million and a return on tangible equity of 18.2%.
- Total income, excluding notable items(1), increased by £1,485 million, or 25.2%, compared with H1 2022 principally reflecting the impact of lending growth and yield curve movements.
- Bank net interest margin (NIM) of 3.20% in H1 2023 compared with 2.58% in H1 2022 with the increase reflecting favourable yield curve movements. Q2 2023 Bank NIM of 3.13% was 14 basis points lower than Q1 2023 principally reflecting asset margin pressure and changes in deposit mix from non-interest bearing to interest bearing balances.
- Other operating expenses were £323 million, or 9.3%, higher than H1 2022. The cost:income ratio (excl. litigation and conduct) was 49.3% for the first half of the year compared with 56.0% in H1 2022.
- A net impairment charge of £223 million in H1 2023, or 12 basis points of gross customer loans, principally reflects an increase in post model adjustments driven by increased economic uncertainty notwithstanding a £98 million modelled release. Defaults remain stable and at low levels across the portfolio.
Robust balance sheet underpinning growth
- Net loans to customers excluding central items increased by £6.0 billion to £352.7 billion during H1 2023 primarily reflecting £5.9 billion of mortgage growth in Retail Banking.
- Up to 30 June 2023 we have provided £48.6 billion against our target to provide £100 billion climate and sustainable funding and financing between 1 July 2021 and the end of 2025.
- Customer deposit balances were stable in the second quarter following the outflows in the first quarter. Customer deposits excluding central items decreased by £11.8 billion to £421.1 billion during H1 2023.
- The loan:deposit ratio (LDR) (excl. repos and reverse repos) was 83%, with customer deposits exceeding net loans to customers by around £71 billion.
- The liquidity coverage ratio (LCR) of 141%, representing £45.3 billion headroom above 100% minimum requirement, increased by 2 percentage points compared with Q1 2023 primarily due to increased wholesale funding and UBIDAC asset sale offset by capital distributions.
Shareholder return supported by strong capital generation
- We are pleased to announce an interim dividend of 5.5 pence per share and intend to commence an on-market buyback programme of up to £500 million in the second half of 2023 in addition to the £1.3 billion directed buyback completed in Q2 2023 bringing total distributions deducted from capital to £2.5 billion for H1 2023.
- Common Equity Tier (CET1) ratio of 13.5% was 70 basis points lower than at 31 December 2022 principally reflecting distributions deducted from capital of c.140 basis points and an increase in RWAs, partially offset by the attributable profit.
- RWAs increased by £1.4 billion during the first half of the year to £177.5 billion.
Outlook(2)
We retain the guidance provided in the 2022 Annual Report and Accounts with the exception of full year 2023 Bank NIM which is now expected to be less than 3.20%, with a current view of around 3.15%. This remains subject to market conditions including the assumption of a Bank of England base rate of 5.50% from Q3 2023 through to the end of the year.
12. Dividends
The 2022 final dividend was approved by shareholders at the Annual General Meeting on 25 April 2023 and the payment made on 2 May 2023 to shareholders on the register at the close of business on 17 March 2023.
NatWest Group plc announces an interim dividend for 2023 of £492 million, or 5.5 pence per ordinary share. The interim dividend will be paid on 15 September 2023 to shareholders on the register at close of business on 11 August 2023. The ex-dividend date will be 10 August 2023.
NatWest Group plc (the "Company") announces the commencement of its programme to buy back ordinary shares in the Company with a nominal value of £1.0769* each ("Ordinary Shares").
On 28 July 2023, the Company announced its full year results and a share buyback programme (the "Programme") of up to £500 million. The Programme will commence on 31 July 2023 and will end no later than 14 March 2024, provided that the term of the Programme may be extended to end no later than 22 March 2024 to account for certain disruption events during the initial term of the Programme.
The Programme, the purpose of which is to reduce the Company's issued share capital, will take place within the limitations of the authority granted by shareholders to the Board of the Company at its Annual General Meeting, held on 25 April 2023 (the "2023 Authority"). The 2023 Authority is due to expire at the conclusion of the 2024 AGM, or 30 June 2024, whichever is earlier.
The maximum number of Ordinary Shares that can be purchased by NWG under the Programme is 919,858,922. This number reflects the impact on the 2023 Authority of the reduction in issued share capital following the off-market buyback announced on 22 May 2023.
The Company has entered into non-discretionary instructions with UBS AG, London Branch to conduct the Programme on its behalf and to make trading decisions under the Programme independently of the Company.
The Company intends to cancel the repurchased Ordinary Shares.
Chief Executive, Paul Thwaite, commented:
"Today's Q3 2023 results show that NatWest is a strong bank which is performing well, generating sustainable profits and returns. This performance is built on the foundations of strong customer franchises and a robust balance sheet with high levels of liquidity and a well-diversified loan book. As a result, credit losses and impairments remain low and we are ready and able to stand by our customers and businesses through the current economic uncertainty.
Our leadership team has come together to ensure we all keep our eyes on the things that matter most - the 19 million people, families, and businesses we serve. Across the bank, we are resolutely focused on meeting their needs today, whilst getting ahead of what they will need from us tomorrow. This is at the core of what we do. It is how we will build long-term value in our bank and deliver sustainable growth."
Strong Q3 2023 performance
- Q3 2023 attributable profit of £866 million and a return on tangible equity (RoTE) of 14.7%. Attributable profit of £3,165 million for the year to date and a RoTE of 17.1%.
- Total income excluding notable items(1), increased by £117 million, or 3.4%, compared with Q3 2022 principally reflecting the impact of volume growth and favourable yield curve movements. For the nine months ended 30 September 2023, total income excluding notable items, was £10,897 million, £1,602 million higher than prior year.
- Bank net interest margin (NIM) of 2.94% was 19 basis points lower than Q2 2023 with the reduction largely due to changes in deposit mix as customers shifted balances from non-interest bearing current accounts to interest bearing savings accounts, particularly term, as well as the continued impact on mortgage margins as the higher margin Covid-era book rolls off and is replaced at lower margins. Bank NIM was 3.11% for the year to date.
- Other operating expenses increased by £22 million, or 1.2%, compared with Q3 2022. For the nine months ended 30 September 2023, other operating expenses of £5.6 billion were £345 million, or 6.6%, higher than prior year. The cost:income ratio (excl. litigation and conduct) was 49.9% for the nine months ended 30 September 2023 compared with 55.6% for the same period in 2022.
- The net impairment charge was £229 million in Q3 2023, or 24 basis points of gross customer loans, which reflects continued low and stable levels of stage 3 defaults across the portfolio and good book charges related to unsecured lending.
NatWest Group has today published the key findings and recommendations from Phase I of the Travers Smith independent review - commissioned by the Board in July - covering the decision to close the Coutts accounts of Mr Farage (Review 1) and the circumstances surrounding a potential breach of confidentiality relating to his customer information (Review 2).
The key findings and recommendations report ("the report") published today was compiled by Travers Smith. It is compliant with NatWest Group's legal obligations, including customer confidentiality and data protection laws. The report confirms that the exit decision was lawful and was made in accordance with the relevant bank policies and processes, but also identifies a number of shortcomings in how the decision was reached, how the bank communicated with Mr Farage and how it treated his confidential information.
NatWest Group has accepted - and will implement - all of the recommendations made by Travers Smith. Alongside the report, the bank will make a number of other changes to its policies and procedures designed to deliver better outcomes for its customers and to ensure that the lawfully protected beliefs or opinions of customers do not play any role in exit, retention or onboarding decisions.
The Board is considering these findings and deciding on appropriate outcomes. As we would with any other employee, we have a duty of confidentiality to Dame Alison Rose. However, given her role as the former CEO of NatWest Group, there is a disclosure obligation in relation to her remuneration. The bank will disclose the relevant outcomes, as soon as possible.
Separately, the Financial Conduct Authority has confirmed that it is conducting supervisory work, covering both NatWest Group and Coutts, into how the firms' governance, systems and controls are working, to identify and address any significant shortcomings.
Following the Group's disclosure on 23 August 2023 regarding remuneration arrangements for the former Group Chief Executive, Alison Rose, this announcement provides an update to those remuneration arrangements.
The Board has confirmed that, in line with Ms Rose's service agreement, payment of her fixed pay elements will be made for the remainder of her contractual notice period, which will end on 26 July 2024. These contractual elements comprise salary, fixed share allowance and a pension allowance of 10% of salary and contractually agreed benefits in line with the terms of our approved Directors' Remuneration Policy (DRP). The total value over the remainder of the notice period is £1,748,142.
Following the announcement that Ms Rose stepped down from her role by mutual agreement, it has been confirmed that good leaver status is not applicable under the relevant share plan rules. There is no change to the vesting schedule of her awards; any awards due to vest after her cessation of employment on 26 July 2024 will lapse. The current value of the unvested share awards that will lapse is £4,711,491.* No finding of misconduct has been made against Ms Rose by NatWest Group.
In addition, no bonus or variable remuneration will be paid to Ms Rose in respect of service during 2023. Had Ms Rose remained in role as Group Chief Executive for all of 2023 then under the approved DRP her maximum variable pay opportunity would have been £2,868,113, subject to satisfaction of relevant performance conditions.
Cumulatively, the value of lapsed unvested share awards and the bonus or variable remuneration for 2023 that Ms Rose will forego totals £7,579,604.*
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