![]() The first is to buy back shares as part of a wider placement by the Treasury, where the price paid would be the same as that achieved through the open-market bookbuilding process. Each would require the agreement of the Treasury, and any decision on which one to use would be based on a wide range of factors. The resolution outlines three ways in which a directed buy back could take place. We have consulted a range of large investors who are also highly supportive of this course of action. The Board strongly believes that buying back Government shares would be a positive use of this capital, bringing benefits to the bank and its shareholders by helping to facilitate its return to private ownership. It is important to note however that, at present, we believe it is prudent to maintain capital somewhat above our target as we manage our way through a number of issues, including Brexit and various regulatory changes to the way the bank must account for its capital.Ī directed buy back is one way in which we can return excess capital to shareholders. Those were important moments in the recovery of the bank and have allowed us to start thinking about how to distribute our excess capital. It also achieved a clear pass in the 2018 PRA stress test. Last year saw the bank report a bottom line profit and pay a dividend for the first time in 10 years. With those now largely resolved, it is our intention, over time, to return the excess capital to our shareholders. This is a result of building our capital reserves at a time when the bank was facing a number of highly uncertain legacy issues and restructuring costs. A buyback would also require regulatory approval from the PRA.Īt the end of the third quarter of 2018, the bank had a Common Equity Tier One capital ratio of 16.7%, above our medium term target of more than 13%. The resolution would provide the Board with the authority to use some of the bank’s excess capital to buy back a portion of shares held by the Government, at a time agreed with the Treasury. The bank will not be able to buy back shares without the express agreement of the Treasury in any event. The Government has confirmed that it will not be voting its shares, in order to allow the rest of our shareholders to decide whether the resolution succeeds or not. In order to succeed, the resolution requires 75% of votes cast to be in favour. You will have an opportunity at the AGM to raise questions on other subjects. I will now explain why the Board is unanimously recommending that our shareholders approve the resolution, before taking any questions that relate specifically to this order of business. From your left to right, we have Mark Seligman, Ross McEwan, Katie Murray, Aileen Taylor, Robert Gillespie and Patrick Flynn. If approved, it would provide the bank with the flexibility to buy shares during the intervening period, subject to the agreement of the Treasury.īefore coming to the proposal, I would like to take a moment to introduce my fellow Board members and our Company Secretary in attendance today. Moving to the business of the meeting, we consider it important to seek this authority now, rather than wait for our Annual General Meeting in April. ![]() ![]() That is the single order of business of the meeting. Today we are asking you to vote on a special resolution that would provide the bank’s directors with the authority to use some of its excess capital to buy back shares from the Government, at a time agreed with the Treasury. Thank you for joining us, and welcome to our General Meeting. ![]()
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