2025 Annual Results and Investor Update Event

About this update from Secure Trust Bank Plc

[{"type":"text","content":"\n \n Secure Trust Bank PLC \n 12 March 2026 \n For immediate release \n   \n SECURE TRUST BANK PLC \n 2025 Annual Results and Investor Update Event: updated strategic plans and medium-term targets \n Secure Trust Bank PLC ('STB', 'Secure Trust Bank', or the 'Group'), a leading specialist bank, will host its 2025 Annual Results and Investor Update event for analysts and institutional investors today, 12 March 2026. \n A live webcast of the presentation and slides will be available at the following link at 13.00: https://brrmedia.news/STB_FY25_Investor_Update . The Annual Results presentation will begin at 13.00, with the Investor Update presentation to begin at 14.15. \n The event will cover the Group's 2025 annual results and refreshed strategic plans, including product driven growth opportunities, and its capital allocation strategy. The event includes presentations from the CEO, CFO and management of the Retail Finance, Business Finance and Savings divisions. \n 2025 Financial highlights 1 : \n \n \n \n \n • \n \n \n Achieved return on average equity ('ROAE') of 14.3% (2024: 14.6%) \n \n \n \n \n • \n \n \n Delivered continuing profit before tax of £59.3 million (2024: £59.4 million) \n \n \n \n \n • \n \n \n Common Equity Tier 1 ('CET 1') ratio improved by 60 bps to 12.9% (2024: 12.3%) \n \n \n \n \n • \n \n \n Sale of Consumer Vehicle Finance business further increases CET 1 ratio to 14.7% 2 on a pro forma basis \n \n \n \n \n • \n \n \n Growth in lending balances of 8.1% to £3.3 billion (2024: £3.1 billion) \n \n \n \n \n • \n \n \n Cost income ratio improved by 220 bps to 45.2% (2024: 47.4%) \n \n \n \n \n • \n \n \n Tangible book value per share increased by 5.8% to £19.73 per share (2024: £18.64 per share) \n \n \n \n \n • \n \n \n Increased total dividend to 35.5 pence per share (2024: 33.8 pence per share), in line with progressive dividend policy \n \n \n \n \n • \n \n \n Committing £10 million of capital to initiate a share buyback programme to be delivered over 12 months, subject to regulatory approval \n \n \n \n \n Strategic update \n \n \n \n \n • \n \n \n Refreshed strategic priorities centred on product expansion, effective digital solutions and capital discipline will deliver targeted growth for higher returns \n \n \n \n \n • \n \n \n New medium-term targets of c.10% annual growth and ROAE above 16% \n \n \n \n \n • \n \n \n Simplified business on clear trajectory to grow in large scale markets at lower cost of risk \n \n \n \n \n • \n \n \n Investment in cost efficiency alongside operating leverage will drive strong cost income ratio \n \n \n \n \n 2025 Annual Results \n The Group achieved strong levels of new business lending, leading to an 8.1% increase in net lending balances to £3.3 billion (2024: £3.1 billion). Retail Finance grew 8.0%, as the business continued to leverage the strength of its retail distribution network. Business Finance grew by 8.1%, driven by Real Estate Finance which grew by 9.4% and continued momentum in Commercial Finance, delivering 3.2% growth in net lending balances. Strong pricing discipline across the Group in a falling rate environment contributed to stable net interest margin ('NIM') of 4.7% (2024: 4.7%). \n Customer deposits increased 8.2% year on year to £3.5 billion (2024: £3.2 billion), supporting growth in the lending book, and remaining stable relative to the half year. The rundown of the Vehicle Finance portfolio reduced the need for additional funding in the second half of the year. The Group fully repaid its Bank of England Term Funding Scheme with additional incentives for SMEs ('TFSME') balances in 2025 (2024: £230.0 million). The Group has £201.2 million (2024: £125.7 million) of funding through sale and repurchase arrangements. \n Cost income ratio improved to 45.2% (2024: 47.4%) reflecting strong income growth and effective cost management in an inflationary environment, and the delivery of operational efficiencies through our cost optimisation programme, Project Fusion 3 . In 2025, operating expenses included £2.5 million of non-recurring costs relating to changes in senior leadership; excluding these items, the cost income ratio would have been 43.7%. \n Cost of risk increased to 1.0% (2024: 0.8%). This reflects the impact of three specific cases in Business Finance and a normalisation of impairment charges in Retail Finance, following the impact of one-off model benefits. \n The Group was capital accretive in 2025 and strengthened its capital position in the year, improving the CET 1 ratio by 60 bps to 12.9% (2024: 12.3%). The sale of the Consumer Vehicle Finance business, which completed on 25 February 2026, further increases the CET 1 ratio on a pro forma basis to 14.7% 2 . \n Financial Summary 1 \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n Change \n \n \n \n \n Continuing profit before tax \n \n \n £59.3m \n \n \n £59.4m \n \n \n (0.2)% \n \n \n \n \n Total profit before tax \n \n \n £27.5m \n \n \n £29.2m \n \n \n (5.8)% \n \n \n \n \n Total adjusted 4 profit before tax \n \n \n £51.6m \n \n \n £39.1m \n \n \n 32.0% \n \n \n \n \n Basic earnings per share \n \n \n 238.8 pence \n \n \n 227.7 pence \n \n \n 4.9% \n \n \n \n \n Total basic earnings per share \n \n \n 94.2 pence \n \n \n 103.4 pence \n \n \n (8.9)% \n \n \n \n \n Ordinary dividend per share \n \n \n 35.5 pence \n \n \n 33.8 pence \n \n \n 5.0% \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Return on average equity \n \n \n 14.3% \n \n \n 14.6% \n \n \n (30) bps \n \n \n \n \n Net interest margin \n \n \n 4.7% \n \n \n 4.7% \n \n \n - \n \n \n \n \n Cost of risk \n \n \n 1.0% \n \n \n 0.8% \n \n \n 20 bps \n \n \n \n \n Cost income ratio \n \n \n 45.2% \n \n \n 47.4% \n \n \n (220) bps \n \n \n \n \n Net lending balances \n \n \n £3,295.8m \n \n \n £3,050.2m \n \n \n 8.1% \n \n \n \n \n Customer deposits \n \n \n £3,509.6m \n \n \n £3,244.9m \n \n \n 8.2% \n \n \n \n \n Tangible book value per share \n \n \n £19.73 \n \n \n £18.64 \n \n \n 5.8% \n \n \n \n \n CET 1 ratio \n \n \n 12.9% \n \n \n 12.3% \n \n \n 60 bps \n \n \n \n \n Total capital ratio \n \n \n 15.2% \n \n \n 14.6% \n \n \n 60 bps \n \n \n \n \n Execution against strategic priorities \n We continued to make strong progress against the four strategic priorities set out in 2023: simplify, leverage networks, enhance customer experience and enabled by technology. \n \n \n \n \n • \n \n \n Sale of Consumer Vehicle Finance business further simplifies Group structure \n \n \n \n \n • \n \n \n Completion of Project Fusion, which has delivered c.£8 million of annualised cost savings 3 \n \n \n \n \n • \n \n \n Strong levels of new lending across Business and Retail Finance, reflecting strength of deep customer and partner relationships \n \n \n \n \n • \n \n \n Surpassed 475,000 Retail Finance app registrations and re-launched an updated Savings app \n \n \n \n \n • \n \n \n Gains in Retail Finance new business market share to 15.5% 5 (2024: 13.6%) \n \n \n \n \n Regulatory and legal developments \n In October 2025, and in response to the proposed FCA approach, we increased our provision for motor finance consumer redress and related costs by £16.4 million. As at the 31 December 2025 the provision held was £21.5 million (2024: £6.4 million). \n Dividend \n The Board recommends the payment of a final dividend for 2025 of 23.7 pence per share, which together with the interim dividend of 11.8 pence per share, represents a total dividend for the year of 35.5 pence per share (2024: 33.8 pence per share). This will be payable on 21 May 2026 to shareholders on the register at the close of business on 24 April 2026 and is in line with the Group's progressive dividend policy. \n Updated strategic priorities and medium-term targets \n 2025 strategic pivot \n In the first half of 2025, the Group underwent a strategic review and identified opportunities to increase ROAE over time. As a result, the Group took decisive actions to streamline the business during 2025, including announcing its decision to stop new Vehicle Finance lending and subsequently agreeing the sale of the Consumer Vehicle Finance business. \n We have now simplified to two lending divisions, Retail Finance and Business Finance, supported by our Savings division. This new structure reflects the way that we manage and evaluate our businesses through a product lens. We have profitable growth opportunities across our divisions, all with an established track record of value creation. Our proven specialist market capabilities, combined with the operating leverage now embedded within our businesses, enable us to pursue growth opportunities at minimal incremental cost. \n Refreshed strategy - Targeted growth for higher returns \n Secure Trust Bank's refreshed strategy is \"targeted growth for higher returns\". This will be delivered though three strategic priorities: \n \n \n \n \n • \n \n \n Product expansion: The Group will build on its existing strengths while broadening its product portfolio, including expansion into complementary offerings that enhance overall returns. \n \n \n \n \n • \n \n \n Effective digital solutions: The Group will use scalable, flexible technology to enable further efficiencies, widen distribution and enhance the customer journey. \n \n \n \n \n • \n \n \n Capital discipline: Capital allocation decisions will be informed by business credit expertise and data insights. The deployment of capital will support growth and value creation. \n \n \n \n \n Medium-term targets \n Secure Trust Bank also announces new medium-term targets. \n \n \n \n \n Measure \n \n \n Medium-term target \n \n \n \n \n Annual growth in net lending \n \n \n c.10% \n \n \n \n \n ROAE \n \n \n >16% \n \n \n \n \n Our target ROAE of above 16% will be driven by a disciplined focus on key drivers and underpinned by our ambitions to: \n \n \n \n \n • \n \n \n target c.10% annual net lending growth in Retail Finance and Business Finance divisions, whilst maintaining risk adjusted margins through credit discipline and utilising data insights; \n \n \n \n \n • \n \n \n expand our products into areas that share similar characteristics to our current offering where we have proven capability; \n \n \n \n \n • \n \n \n deliver high operating leverage by maintaining a disciplined approach to cost management and delivery of efficiencies; \n \n \n \n \n • \n \n \n improve cost income ratio over time, with an ambition to be 35-40% in the medium-term; and \n \n \n \n \n • \n \n \n support predictable and stable returns through a balanced risk-weighted asset mix. \n \n \n \n \n Optimising capital management \n Maintaining a strong capital base is pivotal to the delivery of our medium-term targets. \n Our capital allocation framework is designed to optimise capital deployment for growth and value creation, whilst managing capital buffers. Our ambition is to maintain the CET 1 ratio at c.13.0%. We aim to deploy any surplus capital in the highest returning opportunities or return capital to shareholders, so as to enable us to deploy capital in organic product driven growth opportunities and enhance distributions to shareholders. Subject to regulatory approval and no material changes in prevailing market conditions, we will be committing surplus capital to initiate a share buyback programme with £10 million intended to be delivered in tranches over the next 12 months, as well as reaffirming our commitment to a progressive dividend policy. The Group is capital accretive and can support both further growth in net lending and dividends. \n These choices are possible due to the sale of the Consumer Vehicle Finance business which has released capital ahead of schedule. This also accelerates our removal of costs from the Group. In our 2025 Interim Results, we indicated that the exit from Vehicle Finance would release £25 million of costs by 2030, involving incurring costs of £5 million. We are reaffirming our target to remove £25 million of run-rate costs but will do so by 2028, incurring additional costs of £12 million. We intend to support our medium-term target of more than 16% ROAE in this way through material improvements in the cost income ratio. \n 2026 Guidance \n Having taken decisive strategic actions in 2025, 2026 will be a transitional year to launch new products and reduce cost. Accordingly, we provide the following guidance on 2026 expected performance. \n \n \n \n \n Net lending \n \n \n 8-10% growth \n \n \n \n \n Risk Adjusted Margin \n \n \n c.10 bps improvement \n \n \n \n \n Costs \n \n \n Cost income ratio c.47% \n \n \n \n \n Capital \n \n \n CET 1 ratio c. 13.5% \n \n \n \n \n Distributions \n \n \n Progressive dividend policy maintained \n Intention to launch £10 million buy-back programme, subject to regulatory approval \n \n \n \n \n Discontinued activities \n \n \n Break even profit before tax pre-exceptionals \n \n \n \n \n   \n CEO, Ian Corfield said: \n \"Our strategy is simple. We will grow in large investable scale markets, where there are product driven opportunities that leverage our proven capabilities, and we will do this with operating leverage that will deliver an improved cost income ratio in the medium-term. We have a clear trajectory to higher returns, delivered at a reduced cost of risk. We are well capitalised and intend to deliver value back to shareholders through a share buyback programme. In combination this will allow us to deliver targeted growth at higher returns.\" \n Footnotes \n 1. Performance metrics relate to continuing operations, unless otherwise stated. The term 'Total' refers to statutory continuing and discontinued operations. Further details of the metrics can be found in the Appendix to the 2025 Annual Report and Accounts. \n 2. The revised pro forma CET 1 ratio at 31 December 2025 reflects 1) the Consumer Vehicle Finance portfolio had credit risk weighted assets of £293.2 million at that time and 2) the Vehicle Finance business sale generated a one-off net gain on sale on completion which increased CET 1. \n 3. £5.0 million cost savings relative to operating expenses for the 12 months ended December 2021. The additional £3.0 million savings (of the £8.0 million) are relative to annualised operating expenses for the six months ended 30 June 2024. \n 4. Adjusted metrics exclude exceptional items of £24.1 million (2024: £9.9 million). Details can be found in Note 8 to the Financial Statements. \n 5. Source: Finance & Leasing Association: New business values within retail store and online credit: 2025: 15.5% (2024: 13.6%). FLA total and Retail Finance new business of £9,094.8 million (2024: £9,476.0 million) and £1,407.0 million (2024: £1,289.7 million). As published at 31 December 2025. \n   \n Enquiries: \n   \n Secure Trust Bank PLC \n Ian Corfield, Chief Executive Officer \n Rachel Lawrence, Chief Financial Officer \n Phil Deakin, Strategy and Corporate Development Director \n Tel: 0121 693 9100 \n   \n Investec Bank plc (Joint Broker) \n Christopher Baird \n David Anderson \n Maria Gomez de Olea \n Tel: +44 (0) 20 7597 5970 \n   \n Shore Capital Stockbrokers (Joint Broker) \n Mark Percy / Sophie Collins (Corporate Advisory) \n Oliver Jackson / Ansh Batura (Corporate Broking) \n Tel: +44 (0) 20 7408 4090 \n Camarco \n Geoffrey Pelham-Lane, Amrith Uppuluri \n [email protected] \n Tel: +44 (0) 7733 124 226, +44 (0) 7763 083 058 \n   \n Forward looking statements \n This announcement contains forward-looking statements about the business, strategy and plans of STB and its current objectives, targets and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about STB's or management's beliefs and expectations, are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. STB's actual future results may differ materially from the results expressed or implied in these forward-looking statements as a result of a variety of factors. These include economic and business conditions, risks from failure of clients, customers and counterparties, market related risks including interest rate risk, risks regarding market conditions outside STB's control, expected credit losses in certain scenarios involving forward looking data, operational risks, legal, regulatory, or governmental developments, and other factors. The forward-looking statements contained in this announcement are made as of the date of this announcement, and (except as required by law or regulation) STB undertakes no obligation to update any of its forward-looking statements. \n About STB \n STB is an established, well ‐ funded and capitalised UK retail bank with a 72 ‐ year trading track record. STB operates principally from its head office in Solihull, West Midlands. The Group's diversified lending portfolio currently focuses on two sectors: \n (i) Business Finance through its Real Estate Finance and Commercial Finance divisions; and \n (ii) Consumer Finance through its V12 Retail Finance division, \n supported by its Savings division. \n Secure Trust Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. \n Secure Trust Bank PLC, Yorke House, Arleston Way, Solihull, B90 4LH. \n Group at a glance \n Our strategic progress against 2025 priorities \n Simplify \n \n \n \n \n ·  \n \n \n Streamlined Group: Accelerated exit of Vehicle Finance business has focused capital deployment on higher returning businesses \n \n \n \n \n ·  \n \n \n Delivered cost efficiencies: Project Fusion, our cost optimisation programme has delivered c. £8 million 1 of annualised savings \n \n \n \n \n ·  \n \n \n Workplace optimisation: Consolidation of office spaces, driving operational efficiencies and contributing to our ESG strategy \n \n \n \n \n   \n Enhance customer experience \n \n \n \n \n ·  \n \n \n Improved speed of credit decisions: 90% of Retail Finance applications auto-decisioned in 6 seconds (2024: 6 seconds) \n \n \n \n \n ·  \n \n \n Upgraded user experience through digital applications: New Savings app launched in December streamlines the customer journey and enhances digital capabilities \n \n \n \n \n ·  \n \n \n Sustained client satisfaction: Internal surveys recorded strong scores across Business Finance, and Retail Finance and Savings Trustpilot score maintained at 4.8 stars 2 (2024: 4.8) \n \n \n \n \n   \n Leverage networks \n \n \n \n \n ·  \n \n \n Sustained strong growth in new business lending: Supported by high levels of client retention and repeat business in Business Finance, and depth of relationships in Retail Finance \n \n \n \n \n ·  \n \n \n Breadth of partnerships: Partnering with c.900 retailers across thousands of outlets to drive £1.5 billion of net lending in Retail Finance \n \n \n \n \n ·  \n \n \n Increased market reach: Strong network of partners and retailers achieved 8.1% growth in Business Finance and new business market share of 15.5% 3 in Retail Finance \n \n \n \n \n   \n Enabled by technology \n \n \n \n \n ·  \n \n \n Digital-first operating model: Over 99% customers registered for online banking in Savings and over 91% opting for online account management in Retail Finance \n \n \n \n \n ·  \n \n \n New platforms and partners in Retail Finance: Integration of additional platforms and partners has enhanced the Group's scalability and strengthened key controls \n \n \n \n \n ·  \n \n \n Seamless customer experience: Over 475,000 customers registered for the Retail Finance V12 app, where they are able to access the full product suite available \n \n \n \n \n   \n Updating our strategic priorities for 2026 and beyond \n Our refreshed strategic ambitions will position the Group for long ‑ term, sustainable growth \n Refer to Chief Executive statement for further information. \n Notes: \n 1. £5.0 million cost savings relative to operating expenses for the 12 months ended December 2021. The additional £3.0 million savings (of the total £8.0 million) are relative to annualised operating expenses for the six months ending 30 June 2024. \n 2. Mark out of 5 based on star rating from 11,220 reviews (2024: 15,527). \n 3. Source: Finance & Leasing Association: New business values within retail store and online credit: 2025 15.5% (2024: 13.6%). FLA total and Retail Finance new business of £9,094.8m (2024: £9,476.6m) and £1,407.0m (2024: £1,289.7m) respectively. As published at 31 December 2025. \n Chair's statement \n It has been a year of change at Secure Trust Bank, with the Board having taken decisive action to strengthen the business and to lay the foundations for enhanced shareholder returns.           \n In June, we appointed a new Chief Executive Officer ('CEO'), Ian Corfield, to lead the Group through the next phase of its growth strategy, to accelerate the pace of change across the Group and help drive improved performance. The Board is pleased with the progress he has made since his appointment. \n In July, we made the difficult decision to cease lending in our Vehicle Finance business, which had been loss making, and with additional recent operational challenges and increased loan impairments, was materially impacting our Group performance. In December, we announced the sale of the Consumer Vehicle Finance business, which completed in February 2026. This was an important strategic milestone and will help to accelerate further our strategic progress by releasing capital to invest in our higher returning business areas. \n I would like to take this opportunity to thank all of our Vehicle Finance colleagues, who helped grow the business despite the increasingly challenging operating environment, and to wish them all the very best for the future. \n We have refreshed our strategy and simplified our medium-term targets ensuring the business is focused on delivering growth and driving improved returns for our shareholders. Under our revised strategy we will deploy capital, with discipline, into our three higher returning business units; Retail Finance, Commercial Finance and Real Estate Finance, supported by funding through our Savings business. We are focused on developing adjacent products where we have expertise, can add value to our customers and business partners, and leverage technology to ensure our services can be delivered effectively and efficiently. We will continue to have a rigorous approach to cost management, as we right-size the business following the sale of Consumer Vehicle Finance, and further improve our cost income ratio. \n We are confident that the strategic decisions taken will support the sustainable growth of our business, deliver improved performance and increased return on equity. \n Business performance \n Adjusted 1 total profit before tax for the year ended 31 December 2025 increased by 32.0% to £51.6 million (2024: £39.1 million). This was strong year-on-year growth, however, it was below our expectations for the year with performance once again impacted by the volatility in impairments within our legacy Vehicle Finance business. \n Total statutory profit before tax decreased slightly to £27.5 million (2024: £29.2 million). Statutory profit was negatively impacted by exceptional costs incurred due to the decision to cease lending within our Vehicle Finance business and the additional provision booked following the publication of the FCA's consultation on the proposed redress scheme for motor finance commissions. \n Whilst we appreciate the additional certainty the FCA's redress scheme will bring, we believe the proposed scheme is not aligned with the Supreme Court judgment in Johnson v FirstRand.  If implemented in the form proposed, we believe the scheme will result in redress also being paid to customers who received competitive finance and were not harmed and will unfairly impact lenders, particularly those providing near prime financing through specialist brokers operating competitive panels of lenders. We provided a robust response (supported by analysis of our data) to the consultation, including setting out how customers who received competitive finance were not harmed. \n Capital and shareholder returns \n On a total basis, adjusted 1 return on average equity was 10.4% (2024: 8.0%); however, if the legacy Vehicle Finance business is excluded, the adjusted 1 return on average equity for the continuing business was 14.3% (2024: 15.0%). \n The returns generated by the continuing business, and the plans to increase these further, are positive indicators for the Group's ability to deliver a return on average equity of over 16% in line with our revised medium-term targets. \n We have a strong capital position, which has increased during 2025 and, as at 31 December 2025, the Group's Common Equity Tier 1 ratio was 12.9% (2024: 12.3%). This ratio includes the additional provision booked for the estimated redress and costs associated with the FCA's redress scheme for historic motor finance commissions. \n It is pleasing to see the progress being made across the business, starting to be reflected in the Company's share price, which increased by 244% over the course of 2025. However, the share price as at 31 December 2025 was £12.45, which is still materially below the Group's tangible book value of £19.73. \n In accordance with the Group's progressive dividend policy, the Board has proposed a final dividend payment of 23.7 pence per share (2024: 22.5 pence per share), which if approved by shareholders at the Company's 2026 Annual General Meeting, will be paid on 21 May 2026 to those shareholders on the register on 24 April 2026. \n Governance \n There have been several changes to the Board this year. David McCreadie, our former CEO, retired in August 2025 and I would like to thank David on behalf of the Board, employees and all stakeholders for the progress he drove during his tenure as CEO. He oversaw material increases in our lending balances and helped simplify and refocus the Group, providing us with a strong platform for growth. \n Our Senior Independent Director and Chair of the Audit Committee, Ann Berresford, who had served on the Board for nine years, stepped down as a Non-Executive Director on 30 December 2025. Ann was appointed to the Board in November 2016 and as Audit Committee Chair in September 2017, and has overseen significant change across the organisation and enhanced the operation of the Audit Committee. In her role as Senior Independent Director, she led the recruitment for the Chair role, which concluded in 2024. I would like to extend our thanks and best wishes to Ann. \n Steve Colsell was appointed to the Board on 12 June 2025 and was appointed Chair of the Audit Committee with effect from 30 December 2025. Steve brings extensive financial and accounting experience, particularly within financial services, and is already making a strong contribution to the Board. \n In August, Victoria Mitchell was appointed our designated Non-Executive Director for employee engagement, taking over from Paul Myers. We were also delighted to appoint Julie Hopes, who joined the Board in October 2024, as our new Senior Independent Director and Deputy Chair with effect from 30 December 2025. \n There have been some changes to our Executive Committee during the year (further information on which can be found in the Chief Executive's statement). I would like to thank all former colleagues for their contribution to Secure Trust Bank and wish all those commencing new roles every success. \n Outlook \n The macroeconomic outlook remains uncertain with muted growth across the UK and significant geopolitical uncertainty. We will need to remain agile to adapt to market conditions and continue to focus on delivering good outcomes for our customers, in the specialist areas we operate. \n The strategic changes we have implemented during the year position us well to drive improved performance and accelerate our growth and returns for the benefit of our shareholders and other stakeholders. Across the Group we look forward with optimism and renewed energy. \n I would like to thank our customers, business partners and shareholders for their continued support and all of our employees who have worked tirelessly to deliver for our customers and the business. \n Note: \n 1. Adjusted metrics exclude exceptional items of £24.1 million, all relating to Vehicle Finance (2024: £9.9 million, of which £8.4 million relating to Vehicle Finance). Details can be found in Note 8 to the Financial Statements. \n Chief Executive's statement \n Our 2025 results reflect a year of decisive strategic execution to improve financial performance. While there have been challenges, I believe the actions taken in 2025 to refresh the leadership team, streamline the Group to operate as one business and to deploy resources into higher returning business units will position us to deliver higher returns and enhanced long-term value creation. \n I was delighted to join Secure Trust Bank as Chief Executive Officer at the mid-year. During my first six months I have observed the many strengths of the Group: deep specialist credit and financial expertise, strong partner relationships and flexible platforms. Above all, I have been struck by the commitment of my new colleagues to do the right thing for the business and our customers. I am pleased with the way they have managed a period of significant change with resilience. With a renewed focus on in-office collaboration, I look forward to further progress in 2026 and beyond. \n We have grown our continuing businesses, with net lending growth of 8.1% to £3.3 billion (2024: £3.1 billion). Our capital position has strengthened with a significant improvement in the Common Equity Tier 1 ('CET 1') ratio of 60 bps in the year to 12.9% (2024: 12.3%). Customer deposits grew in line with the loan book during the year, supporting robust lending. \n These results signal that, despite the need to guide the market to a lower profit number during the year, the Group has solid foundations for the next phase of its development. \n Strategic pivot \n In July, we made the decision to stop new lending in our Vehicle Finance business. In December, we announced the sale of \nthe Consumer Vehicle Finance business, which completed as planned on 25 February 2026. The decision to stop new lending was made following a Groupwide strategic review in the first half of the year and reflects the historical financial performance, as well as the medium-term outlook, of the Vehicle Finance business. The sale means the Group can now accelerate its strategic plans. Exiting the Vehicle Finance business will unlock capital to reinvest into higher returning opportunities, supporting long-term growth ambitions and enable consideration of enhanced shareholder distributions. \n As a result of the first half strategic review, we identified an optimised model for the Group to significantly improve shareholder returns over the medium-term. We have profitable organic growth opportunities across our Retail Finance and Business Finance businesses which have an established track record of value creation. We are also well placed to leverage the operational improvements and will be disciplined in our approach to investment for growth. \n All key performance indicators are presented on a continuing basis, unless otherwise stated. \n   \n Financial results - continuing business \n The Group delivered a robust set of financial results in 2025. Notably, we delivered profit before tax of £59.3 million (2024: £59.4 million), with stable net interest margin ('NIM') of 4.7% (2024: 4.7%), reflecting strong pricing discipline in a falling rate environment. \n Our cost income ratio improved by 220 bps to 45.2% (2024: 47.4%) reflecting continued income growth and disciplined cost management following the success of our cost optimisation programme, Project Fusion. \n The Group's operating expenses included non-recurring costs relating to changes in senior leadership, with the underlying cost base stable year-on-year, despite inflationary pressures. We will maintain our focused approach to cost management, and optimise the cost base as we enter into the next phase of our strategic ambitions. \n Growth across our continuing businesses was driven by continued strong levels of new business written across all markets, whilst navigating a year of modest economic growth. \n Increased lending balances were supported by an 8.2% increase in customer deposits to £3.5 billion (2024: £3.2 billion), where our product mix remained focused on fixed-term offerings. We raised c. £1.8 billion of new deposits in the year, and over 97% of deposits (by value) are protected by the Financial Services Compensation Scheme. \n The Group was capital accretive in 2025, and at the end of the period the Group's CET 1 ratio increased to 12.9% (2024: 12.3%). This remains comfortably above the regulatory requirements and supports the Group's growth ambitions. The sale of the Consumer Vehicle Finance business further strengthens this position, and improves our CET 1 ratio on a proforma basis by 180 bps to 14.7%, enabling reinvestment into our continuing businesses. \n Cost of risk increased to 1.0% (2024: 0.8%). This was driven by impairment charges related to a few specific cases in Business Finance and a normalisation of impairment charges in Retail Finance, following one-off model benefits in 2024. \n Total profit before tax was £27.5 million (2024: £29.2 million), impacted by the additional £16.4 million provision relating to motor finance commissions redress provisions. The Group also recognised £5.0 million of exceptional costs relating to the decision to exit Vehicle Finance. \n Total adjusted¹ return on average equity ('ROAE') was 10.4% (2024: 8.0%). Excluding Vehicle Finance, adjusted¹ ROAE was 14.3% (2024: 15.0%). These measures indicate that the right decisions have been implemented to set the Group on a stronger trajectory for higher returns. \n Note: \n 1. Adjusted metrics exclude exceptional items of £24.1 million, all relating to Vehicle Finance (2024: £9.9 million, of which £8.4 million relating to Vehicle Finance). Details can be found in Note 8 to the Financial Statements. \n We made solid progress against the medium-term targets set in 2023, increasing net lending, improving cost income ratio, and maintaining stable NIM, while preserving robust capital ratios. However, market conditions have required a reset of strategic ambitions. Vehicle Finance continued to weigh on NIM and ROAE, and although our decision to exit this business will initially reduce lending balances and NIM, it will improve both the cost income ratio and ROAE over time. Given these changes, it is the right time to establish new medium-term targets focused on higher returning growth. Looking ahead, we are targeting c.10%  annual growth in our continuing businesses and an ROAE of more than 16% in the medium-term. Whilst we acknowledge risk adjusted margins, pricing for capital requirements, and effective cost management are important to delivering high returns we do not intend to set individual targets for these measures and will balance these drivers to deliver against the target ROAE. \n Capital and funding \n As previously announced, we repaid our Term Funding Scheme with additional incentives for SMEs ('TFSME') funding in the first half of 2025 ahead of contractual maturity. The Group continued to make use of sale and repurchase agreements as part of its funding strategy, ending the period with an outstanding balance of £200.0 million (2024: £125.0 million). \n The PRA is to introduce the Basel 3.1 standards in January 2027. At the same time, it will implement the Strong and Simple capital regime for Small Domestic Deposit Taker ('SDDT') firms, providing an alternative to smaller banks to the full Basel 3.1 standards. The Group has been approved as an SDDT, and is making good progress in its preparations for transfer to the new regime. The Group has factored the anticipated requirements from the Basel 3.1 and SDDT regimes into its capital management; these transitions are not expected to materially impact the Group. \n Strategic priorities \n In 2023 we established four strategic priorities to guide the Group: simplify, leverage networks, enhance customer experience and enabled by technology. These priorities underpinned the medium-term targets for the Group first established in 2021. During 2025, we continued to make good progress against these. \n Our commitment to simplification was most clearly demonstrated by the sale of our Consumer Vehicle Finance business, allowing capital deployment to be focused in higher performing businesses. Project Fusion, our cost optimisation programme, has concluded, delivering total annualised savings of c.£8 million¹ through changes to our organisational design, streamlining legacy operational processes and simplifying the Group. These efficiencies support the next phase of our growth ambitions. Across the Group, we have streamlined operations, including the consolidation of our office footprint which has generated cost savings and contributed to our climate commitments. \n Our customers are at the core of what we do, and we continue to use our digital platforms to enhance customer experience. In December, we launched our upgraded Savings app, providing a more streamlined journey and additional capabilities for self-service. High ‑ quality client interactions remain core to our relationship ‑ led model in Business Finance, as evidenced by the consistently strong customer satisfaction scores in our internal surveys. \n Leveraging our networks remains central to our business model. The depth of relationships we hold with retailers and other business partners, and customers across our markets enable growth. Our relationships with approximately 900 retail partners supported £1.5 billion (2024: £1.4 billion) of net lending across a diverse range of retailers, both in sector and size. This supported an increase in Retail Finance's market share of new business to 15.5%² (2024: 13.6%). In Business Finance, high levels of repeat business and client retention reflect the strength of our regional footprint and the relationships we build with local advisory teams to deliver bespoke solutions. \n Technology has been a key enabler of our strategic objectives. The Retail Finance app has surpassed 475,000 registrations, offering a seamless customer experience and direct access to our full product suite. Integration of new platforms and partners has enhanced the Group's scalability and strengthened key controls. We have made continued progress in our digital-first approach, with over 99% of customers registered for online banking for Savings and over 91% opting for online account management in Retail Finance. This provides customers with greater control and a more efficient journey, enhancing their overall customer experience. \n Notes: \n 1. £5.0 million cost savings relative to operating expenses for the 12 months ended December 2021. The additional £3.0 million savings (of the £8.0 million) are relative to annualised operating expenses for the six months ending 30 June 2024. \n 2. Source: Finance & Leasing Association ('FLA'): New business values within retail store and online credit: 2025: 15.5% (2024: 13.6%). FLA total and Retail Finance new business of £9,094.8m (2024: £9,476.6m) and £1,407.0m (2024: £1,289.7m) respectively. As published at 31 December 2025. \n Regulatory and legal interventions \n In October 2025, the FCA released a consultation paper on an industry-wide compensation scheme relating to motor finance commissions. The FCA is now working through an extensive range of responses to the consultation and has indicated it will publish redress scheme rules by the end of March 2026. The current proposed redress scheme is towards the extreme end of outcomes previously expected, however, these proposals are subject to consultation and therefore remain uncertain. As a result of the FCA proposals, the Group increased its provision for motor finance consumer redress and related costs by £16.4 million. As at 31 December 2025 we held a provision of £21.5 million (2024: £6.4 million. See Note 31 to the Financial Statements for further information). \n To calculate the provision, we updated our range of probability-weighted scenarios, including a high probability of the FCA scheme being implemented as proposed. If the FCA scheme was implemented entirely in its current form, the Group would expect to increase the provision for redress by a further £6 million. \n Following the FCA's review of Borrowers in Financial Difficulty ('BiFD') in 2023, we identified that it was appropriate to pay £2.2 million to customers where we could have supported them better due to their individual circumstances. We have now completed this programme of work. During 2025 we have recognised an additional £2.1 million (2024: £1.5 million) charge, as an exceptional item, which largely relates to costs to manage and conclude the programme (See Note 8 to the Financial Statements). \n As a result of the BiFD review, we had an elevated stock of defaulted Vehicle Finance loans at the end of 2024. During the year, we agreed several debt sales, which reduced the level of defaulted balances, and entered into a forward flow arrangement for newly terminated accounts. \n Environmental, Social and Governance ('ESG') \n Following a period of organisational transformation, we are reviewing our ESG strategy to ensure it aligns fully with our renewed strategic ambitions. \n Our employees have worked hard to make 2025 an exceptional year for fundraising. The Group raised over £126,000 for important causes in the year (2024: £99,800) supporting our partners at Birmingham Children's Hospital, Tŷ Hafan, Mind, Go Beyond and Bone Cancer Research. \n Building on our 2024 achievement of reducing direct CO2 emissions by 50% ahead of schedule, we implemented further reductions in 2025, through energy efficiency initiatives, further reducing our office footprint, and accelerating our paper-to-digital transition via enhanced self-service journeys in Retail Finance and Savings. \n I am proud that we appear on the 2025 lists for Great Place to Work ® , including accolades for UK Best Workplaces™ and UK Best Workplaces for Women™. However, 2025 was also a year of significant transition. The strategic decision to exit Vehicle Finance and then sell the Consumer Vehicle Finance business resulted in many roles being made redundant. With increased clarity on the timing of the forthcoming changes, the Group is committed to supporting all those who have been impacted. As a result, our employee engagement Trust Index score fell to 64% (2024: 74%) and we are taking actions to rebuild trust and engagement in 2026. I acknowledge the significant impact strategic decisions have had on all colleagues as we have navigated this period and thank all employees for their hard work and resilience. \n Executive Committee and Senior Leadership \n During the second half of 2025, there were several changes to what had been a relatively long-standing Executive team. Katie Docherty, former Chief Operating Officer ('COO'), left the Group after four years. I was pleased to welcome Jim Appleby, who has extensive experience in UK and international financial service operations, as COO. \n Chris Harper, Chief Risk Officer ('CRO'), also left the Group after nearly five years of service. Uwe Seedorf has joined as Interim CRO, bringing a wealth of experience in risk leadership, including in his previous role as CRO at Allied Irish Bank UK. \n Following the departure of Anne Mckenning, Vicki Baker joined the Group as Chief People Officer in February 2026. With over 20 years' experience in HR, transformation and strategy, Vicki brings valuable commercial insight and a strong people-first approach. \n Finally, I was pleased that Rajat Mehta joined the Group as Savings Director, taking over from Julian Hartley, former Managing Director of Vehicle Finance and Savings, who left the Group in 2025. With over 20 years of leadership experience in retail banking, savings strategy and digital innovation, Rajat's expertise in delivering innovative solutions and driving growth will be invaluable. \n I would like to thank Anne, Katie, Chris and Julian for their contribution and dedication to the success of the Group over several years. I am confident that the new additions to the Executive Committee and senior leadership mean we have the right leadership team in place to support delivery of the next phase of the Group's growth. \n Outlook \n Despite signs of improving confidence across our markets, we recognise that recent developments in global conflict bring heightened uncertainty, particularly their potential effects on inflation and interest rates. However, with a clear strategy, strong foundations, and a long term outlook, we remain well positioned to navigate these challenges and deliver sustained value for customers and shareholders. The conclusion of regulatory interventions into the motor finance sector would also provide much needed certainty \nin 2026. \n I am confident that the strategic decisions we have taken should enable the Group to begin building a track record as a sustainable high returning business. The Board and I believe that Secure Trust Bank is positioned for value creation and enhanced shareholder returns. \n Key performance indicators \n The following key performance indicators are the primary measures used by management to assess the performance of the Group. \n Financial \n Loans and advances to customers (£bn) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 2.8 \n \n \n 3.1 \n \n \n 3.3 \n \n \n \n \n Why we measure this \n Shows the growth in the Group's lending balances, which generate income \n Common Equity Tier 1 ('CET 1') ratio (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 12.7 \n \n \n 12.3 \n \n \n 12.9 \n \n \n \n \n Why we measure this \n The CET 1 ratio demonstrates the Group's capital strength \n Return on average equity (%) \n \n \n \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n Statutory \n \n \n 10.0 \n \n \n 14.6 \n \n \n 14.3 \n \n \n \n \n Adjusted 1 \n \n \n 10.6 \n \n \n 15.0 \n \n \n 14.3 \n \n \n \n \n Why we measure this \n Measures the Group's ability to generate profit from the equity available to it \n Cost to income ratio (%) \n \n \n \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n Statutory \n \n \n 51.5 \n \n \n 46.4 \n \n \n 45.2 \n \n \n \n \n Adjusted 1 \n \n \n 52.8 \n \n \n 47.4 \n \n \n 45.2 \n \n \n \n \n Why we measure this \n Measures how efficiently the Group uses its cost base to produce income \n Net interest margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 4.6 \n \n \n 4.7 \n \n \n 4.7 \n \n \n \n \n Why we measure this \n Shows the interest margin earned on the Group's lending balances, net of funding costs \n Cost of risk (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 1.1 \n \n \n 0.8 \n \n \n 1.0 \n \n \n \n \n Why we measure this \n Measures how effectively the Group manages the credit risk of its lending portfolios \n Non-financial \n Customer Trustpilot ratings (Stars) 2 \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 4.8 \n \n \n 4.8 \n \n \n 4.8 \n \n \n \n \n Why we measure this \n Indicator of customer satisfaction with the Group's products and services \n Employee survey trust index score (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 83.0 \n \n \n 74.0 \n \n \n 64.0 \n \n \n \n \n Why we measure this \n Indicator of employee engagement and satisfaction \n Environmental intensity indicator 3 \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 2.0 \n \n \n 1.5 \n \n \n 1.2 \n \n \n \n \n Why we measure this \n Indicator of the Group's impact on the environment \n Note: \n 1. Adjusted figures exclude exceptional items. For further information see Note 8 to the Financial Statements. \n 2. Mark out of 5 based on star rating from 11,220 reviews (2024: 15,527, 2023: 4,776) \n 3. Total Scope 1, 2 and certain Scope 3 emissions per £million Group operating income. See page 60 of the 2025 Annual Report and Accounts for further details \n Certain key performance indicators represent alternative performance measures that are not defined or specified under International Financial Reporting Standards ('IFRS'). \n Definitions of the financial key performance indicators, their calculation and an explanation of the reasons for their use can be found in the Appendix to the 2025 Annual Report and Accounts. \n All key performance indicators are presented on a continuing basis, unless otherwise stated. \n Further information on discontinued operations are included in Note 10 to the Financial Statements. Further explanation of the financial key performance indicators is discussed in the narrative of the Financial review. Further explanation of the non-financial key performance indicators is provided in the Managing our business responsibly and Climate-related financial disclosures sections of the 2025 Annual Report and Accounts. \n The Directors' Remuneration report in the 2025 Annual Report and Accounts, sets out how executive pay is linked to the assessment of key financial and non-financial performance indicators. \n Financial review \n Income statement \n \n \n \n \n \n \n \n 2025 \n \n \n \n \n \n 2024 \n \n \n \n \n \n \n \n Continuing \n£million \n \n \n Discontinued \n£million \n \n \n Total \nGroup \n£million \n \n \n \n \n \n Continuing \n£million \n \n \n Discontinued \n£million \n \n \n Total \nGroup \n£million \n \n \n \n \n Interest income \n \n \n 301.8 \n \n \n 70.2 \n \n \n 372.0 \n \n \n \n \n \n 296.8 \n \n \n 69.2 \n \n \n 366.0 \n \n \n \n \n Interest expense \n \n \n (150.7) \n \n \n (22.7) \n \n \n (173.4) \n \n \n \n \n \n (159.5) \n \n \n (21.6) \n \n \n (181.1) \n \n \n \n \n Net interest income \n \n \n 151.1 \n \n \n 47.5 \n \n \n 198.6 \n \n \n \n \n \n 137.3 \n \n \n 47.6 \n \n \n 184.9 \n \n \n \n \n Net fee and commission income \n \n \n 14.1 \n \n \n 0.8 \n \n \n 14.9 \n \n \n \n \n \n 18.2 \n \n \n 0.8 \n \n \n 19.0 \n \n \n \n \n Operating income \n \n \n 165.2 \n \n \n 48.3 \n \n \n 213.5 \n \n \n \n \n \n 155.5 \n \n \n 48.4 \n \n \n 203.9 \n \n \n \n \n Impairment charge \n \n \n (31.4) \n \n \n (26.6) \n \n \n (58.0) \n \n \n \n \n \n (23.2) \n \n \n (38.7) \n \n \n (61.9) \n \n \n \n \n Other gains/(losses) \n \n \n 0.1 \n \n \n 0.1 \n \n \n 0.2 \n \n \n \n \n \n (0.4) \n \n \n 0.1 \n \n \n (0.3) \n \n \n \n \n Fair value gains on financial instruments \n \n \n 0.1 \n \n \n - \n \n \n 0.1 \n \n \n \n \n \n 1.2 \n \n \n - \n \n \n 1.2 \n \n \n \n \n Operating expenses \n \n \n (74.7) \n \n \n (29.5) \n \n \n (104.2) \n \n \n \n \n \n (72.2) \n \n \n (31.6) \n \n \n (103.8) \n \n \n \n \n Profit/(loss) before income tax before exceptional items \n \n \n 59.3 \n \n \n (7.7) \n \n \n 51.6 \n \n \n \n \n \n 60.9 \n \n \n (21.8) \n \n \n 39.1 \n \n \n \n \n Exceptional items \n \n \n - \n \n \n (24.1) \n \n \n (24.1) \n \n \n \n \n \n (1.5) \n \n \n (8.4) \n \n \n (9.9) \n \n \n \n \n Profit/(loss) before \nincome tax \n \n \n 59.3 \n \n \n (31.8) \n \n \n 27.5 \n \n \n \n \n \n 59.4 \n \n \n (30.2) \n \n \n 29.2 \n \n \n \n \n Income tax (expense)/credit \n \n \n (14.7) \n \n \n 4.8 \n \n \n (9.9) \n \n \n \n \n \n (16.0) \n \n \n 6.5 \n \n \n (9.5) \n \n \n \n \n Profit/(loss) for the year \n \n \n 44.6 \n \n \n (27.0) \n \n \n 17.6 \n \n \n   \n \n \n 43.4 \n \n \n (23.7) \n \n \n 19.7 \n \n \n \n \n Basic earnings per ordinary share \n \n \n 238.8 \n \n \n (144.5) \n \n \n 94.2 \n \n \n \n \n \n 227.7 \n \n \n (124.3) \n \n \n 103.4 \n \n \n \n \n Basic earnings per ordinary share - adjusted \n \n \n 238.8 \n \n \n (31.1) \n \n \n 207.7 \n \n \n \n \n \n 233.5 \n \n \n (83.4) \n \n \n 150.1 \n \n \n \n \n   \n \n \n \n \n Selected key performance indicators and performance metrics: (Continuing) \n \n \n \n2025 \n% \n \n \n 2024 \n% \n \n \n  Percentage \npoint \nmovement \n \n \n \n \n Net interest margin \n \n \n 4.7 \n \n \n 4.7 \n \n \n - \n \n \n \n \n Net revenue margin \n \n \n 5.2 \n \n \n 5.3 \n \n \n (0.1) \n \n \n \n \n Yield \n \n \n 9.5 \n \n \n 10.2 \n \n \n (0.7) \n \n \n \n \n Cost of funds \n \n \n 4.7 \n \n \n 5.5 \n \n \n (0.8) \n \n \n \n \n Adjusted cost to income ratio \n \n \n 45.2 \n \n \n 46.4 \n \n \n (1.2) \n \n \n \n \n Statutory cost to income ratio \n \n \n 45.2 \n \n \n 47.4 \n \n \n (2.2) \n \n \n \n \n Cost of risk \n \n \n 1.0 \n \n \n 0.8 \n \n \n 0.2 \n \n \n \n \n Adjusted return on average equity \n \n \n 14.3 \n \n \n 15.0 \n \n \n (0.7) \n \n \n \n \n Return on average equity \n \n \n 14.3 \n \n \n 14.6 \n \n \n (0.3) \n \n \n \n \n Common Equity Tier 1 ratio \n \n \n 12.9 \n \n \n 12.3 \n \n \n 0.6 \n \n \n \n \n Total capital ratio \n \n \n 15.2 \n \n \n 14.6 \n \n \n 0.6 \n \n \n \n \n Certain key performance indicators and performance metrics represent alternative performance measures that are not defined or specified under International Financial Reporting Standards ('IFRS'). Definitions of these alternative performance measures, their calculation and an explanation of the reasons for their use can be found in the Appendix to the 2025 Annual Report and Accounts. \n All key performance indicators are presented on a continuing basis, unless otherwise stated. Adjusted metrics exclude exceptional items. Further information on exceptional items are included in Note 8 of Financial Statements and discontinued operations are included in Note 10 to the Financial Statements. \n The Directors' Remuneration report the 2025 Annual Report and Accounts, sets out how executive pay is linked to the assessment of key financial and non-financial performance metrics. \n The Group achieved a continuing profit before tax of £59.3 million (2024: £59.4 million), maintaining a net interest margin ('NIM') of 4.7% (2024: 4.7%) with growth in lending balances of 8.1% to £3,295.8 million (2024: £3,050.2 million). 2025 saw a further improvement in effective cost management, achieving an adjusted cost income ratio of 45.2% (2024: 46.4%). Cost of risk increased to 1.0% (2024: 0.8%), with the Group being impacted by three specific cases within Business Finance. Common Equity Tier 1 ('CET 1') ratio at the end the year increased to 12.9% (2024: 12.3%). \n Adjusted return on average equity decreased from 15.0% in 2024 to 14.3% in the year. Return on average equity decreased from 14.6% in 2024 to 14.3% in the year. \n Adjusted earnings per share ('EPS') increased to 238.8 pence per share (2024: 233.5 pence per share). EPS increased to 238.8 pence per share (2024: 227.7 pence per share). Detailed disclosures of EPS are shown in Note 11 to the Financial Statements. The components of the Group's profit are analysed in more detail in the following sections. \n Total adjusted profit before tax increased by 32.0% to £51.6 million (2024: £39.1 million). Total profit before tax decreased by £1.7 million to £27.5 million (2024: £29.2 million), being most significantly impacted by an exceptional item relating to an additional charge for the motor finance compensation scheme of £16.4 million (2024: £6.9 million) (see Note 31 to the Financial Statements for further information). \n Continuing operations \n Operating income \n The Group's operating income increased by 6.2% to £165.2 million (2024: £155.5 million). Net interest income on the Group's lending assets continues to be the largest component of operating income. This increased by 10.1% to £151.1 million (2024: £137.3 million), driven by a growth in average lending balances of 9.5% to £3,184.3 million (2024: £2,908.4 million). \n The Group's net interest margin was maintained at 4.7% (2024: 4.7%) by actively managing the reduction in gross yields in light of the reductions in the Bank of England Base Rate and lower cost of funds. \n Other income, which relates to net fee and commission income, reduced by 22.5% to £14.1 million (2024: £18.2 million) due to lower one-off termination fees within Commercial Finance. \n Impairment charge \n Impairment charges increased by £8.2 million year on year resulting in the cost of risk for increasing to 1.0% (2024: 0.8%), which included the impact of higher impairments on a few specific cases within Business Finance. \n The impairment charge within Retail Finance of £19.2 million, was £5.9 million higher than the prior year (2024: £13.3 million), however, 2024 included the impact of IFRS 9 model enhancements. \n During the year, the Group refreshed macroeconomic inputs to its IFRS 9 Expected Credit Loss ('ECL') models, incorporating its external economic adviser's latest UK economic outlook. The forecast economic assumptions within each IFRS 9 scenario, and the weightings applied, are set out in more detail in Note 17 to the Financial Statements. The overall impact of the updates to macroeconomic inputs in 2025 was an additional impairment charge of £1.0 million (2024: £1.2 million release). \n The Group has applied Expert Credit Judgements ('ECJs') overlays totalling £1.6 million (2024: £5.7 million underlay), where management believes the IFRS 9 modelled output is not accurately reflecting current risks in the loan portfolios. The most significant underlay of £2.7 million relates primarily to specific Commercial Finance cases, where the model does not reflect the full value of the security held. During 2025, the 2024 ECJ underlay relating to the Vehicle Finance lending portfolios LGD stage 1 and 2 recovery assumptions were incorporated into the IFRS 9 model (2024: £4.5 million). \n Fair value gains on financial instruments \n The Group has highly effective hedge accounting relationships, and, as a result, did not recognise a hedging ineffectiveness gain or loss in 2025 (2024: £0.1 million gain) and £0.5 million loss (2024: £0.6 million gain) relating to hedge accounting inception and amortisation adjustments (see Note 5 to the Financial Statements). The Group recognised a gain of £0.6 million (2024: £0.5 million gain) relating to interest rate swaps being entered into ahead of hedge accounting becoming available, which will reverse to the income statement over the remaining life of the swaps. \n Operating expenses \n The cost base increased by £2.5 million to £74.7 million (2024: £72.2 million), having been impacted by the changes in senior leadership and increases in employers national insurance. \n The adjusted cost to income ratio improved by 120 basis points to 45.2% (2024: 46.4%). Statutory cost income ratio was 45.2% (2024: 47.4%). \n Exceptional items \n Following an organisational redesign in 2024, £1.5 million was incurred for restructuring costs. \n Discontinued operations \n At the year-end, the Vehicle Finance business was classified as discontinued. Further information on the performance of the business can be found in the Business Review. Details of exceptional items relating to this activity are described below. \n Exceptional items \n The Group recognised charges for exceptional items of £24.1 million during the year, which all related to the Vehicle Finance business (2024: £9.9 million, of which £8.4 million related to the Vehicle Finance business). \n In respect of the FCA's consultation on the motor finance redress scheme, a further charge of £16.4 million was recognised in the second half of the year as a consequence of the publication of the FCA's consultation paper. (2024: £6.9 million). Further information can be found in Note 31 to the Financial Statements. \n Following the decision to exit the Vehicle Finance market in July, an organisation and business restructure was undertaken incurring a charge of £5.0 million, which included redundancy costs and the write-down of associated assets. \n Further costs of £2.1 million, (2024: £1.5 million) were recognised in relation to the FCA's review of Borrower's in Financial Difficulty across the industry in 2023. These primarily related to costs to complete the programme of work. \n In respect of the sale of the Consumer Vehicle Finance book announced in December 2025, £0.6 million of transaction costs were recognised, with the remainder of costs to be recognised in 2026. \n Further details on all Exceptional items are included in Note 8 to the Financial Statements. \n Taxation \n The effective tax rate was 24.8% (2024: 26.9%), which was broadly in line with the statutory rate. \n Distributions to shareholders \n The Board recommended the payment of a final dividend for 2025 of 23.7 pence per share, which together with the interim dividend of 11.8 pence per share, represents a total dividend for the year of 35.5 pence per share (2024: 33.8 pence per share). This is in line with the Group's progressive dividend policy. \n Summarised balance sheet \n \n \n \n \n Assets \n \n \n 2025 \n £million \n \n \n  2024 \n £million \n \n \n \n \n Cash and Bank of England reserve account \n \n \n 528.1 \n \n \n 445.0 \n \n \n \n \n Loans and advances to banks and debt securities \n \n \n 37.8 \n \n \n 24.0 \n \n \n \n \n Loans and advances to customers \n \n \n 3,295.8 \n \n \n 3,050.2 \n \n \n \n \n Loans and advances to customers - Discontinued 1 \n \n \n 390.8 \n \n \n 558.3 \n \n \n \n \n Fair value adjustment for portfolio hedged risk \n \n \n 7.3 \n \n \n (6.8) \n \n \n \n \n Derivative financial instruments \n \n \n 0.2 \n \n \n 14.3 \n \n \n \n \n Other assets \n \n \n 56.0 \n \n \n 31.7 \n \n \n \n \n \n \n \n 4,316.0 \n \n \n 4,116.7 \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n \n \n \n Due to banks \n \n \n 205.9 \n \n \n 365.8 \n \n \n \n \n Deposits from customers \n \n \n 3,509.6 \n \n \n 3,244.9 \n \n \n \n \n Fair value adjustment for portfolio hedged risk \n \n \n 4.7 \n \n \n (3.4) \n \n \n \n \n Derivative financial instruments \n \n \n 0.1 \n \n \n 10.0 \n \n \n \n \n Tier 2 subordinated liabilities \n \n \n 93.5 \n \n \n 93.3 \n \n \n \n \n Other liabilities \n \n \n 127.9 \n \n \n 45.6 \n \n \n \n \n \n \n \n 3,941.7 \n \n \n 3,756.2 \n \n \n \n \n 1. Vehicle Finance portfolio classified as 'Held for Sale' in 2025, and 'Loans and Advances to Customers' in 2024. \n New business volumes \n £2,526.2m \n 2024: £2,331.9m \n \n \n \n \n Retail Finance \n \n \n Real Estate Finance \n \n \n Commercial Finance \n \n \n Continuing businesses \n \n \n Vehicle Finance \n \n \n Total \n \n \n \n \n £1,407.0m \n \n \n £451.0m \n \n \n £287.5m \n \n \n £2,145.5m \n \n \n £380.7m \n \n \n £2,526.2m \n \n \n \n \n Loans and advances to customers \n £3,686.6m \n 2024: £3,608.5m \n \n \n \n \n Retail Finance \n \n \n Real Estate Finance \n \n \n Commercial Finance \n \n \n Continuing businesses \n \n \n Vehicle Finance \n \n \n Total \n \n \n \n \n £1,466.5m \n \n \n £1,466.9m \n \n \n £362.4m \n \n \n £3,295.8m \n \n \n £390.8m \n \n \n £3,686.6m \n \n \n \n \n New business \n 2025 was another strong year for new business with new lending for continuing businesses of £2,145.5 million, up 20.6% year on year (2024: £1,779.0 million). \n Business Finance increased by 50.9% to £738.5 million (2024: £489.3 million) with strong growth in both divisions. Retail Finance was 9.1% higher at £1,407.0 million (2024: £1,289.7 million) as the business continued to grow its retail distribution network and develop its strategic relationships. \n Customer lending and deposits \n Net lending from continuing operations grew by 8.1% to £3,295.8 million (2024: £3,050.2 million) with Retail Finance up by 8.0%, Real Estate Finance by 9.4% and Commercial Finance by 3.2%. \n Further analysis of loans and advances to customers, including a breakdown of the arrears profile of the Group's loan books, is provided in Note 17 to the Financial Statements. \n Customer deposits include Fixed-term bonds, ISAs, Notice and Access accounts. Customer deposits increased by 8.2% to £3,509.6 million (2024: £3,244.9 million) in order to fund the growth in lending. This growth in deposits has come from ISAs. \n Investments and wholesale funding \n The Bank of England Term Funding Scheme with additional incentives for SMEs ('TFSME') facility was fully paid off during 2025 (2024: £230.0 million) and the Group increased its drawings under sale and repurchase agreements to £201.2 million at 31 December 2025 (2024: £125.7 million). \n Total funding ratio of 113.3% increased slightly from 31 December 2024 (112.4%). \n Tier 2 subordinated liabilities \n In the current and prior year Tier 2 subordinated liabilities comprise £90.0 million of 10.5-year 13.0% Fixed-Rate Callable Subordinated Notes, which qualify as Tier 2 capital. \n Capital \n Management of capital \n Our capital management policy is focused on optimising shareholder value over the long term. Capital is allocated to achieve targeted risk adjusted returns whilst ensuring appropriate surpluses are held above the minimum regulatory requirements. \n Key factors influencing the management of capital include: \n \n \n \n \n ·  \n \n \n The level of buffers and the capital requirement set by the Prudential Regulation Authority ('PRA'); \n \n \n \n \n ·  \n \n \n Estimated credit losses calculated using IFRS 9 methodology and the applicable transitional rules; \n \n \n \n \n ·  \n \n \n New business volumes; and \n \n \n \n \n ·  \n \n \n The product mix of new business. \n \n \n \n \n Capital resources \n Capital resources increased over the period from £415.7 million to £428.4 million. CET 1 capital increased by £13.4 million, primarily driven by a total profit for the period of £17.6 million, offset by the 2025 final dividend of £4.4 million. \n \n \n \n \n Capital \n \n \n 2025 \n £million \n \n \n 2024 \n £million \n \n \n \n \n CET 1 capital, excluding IFRS 9 transitional adjustment \n \n \n 364.8 \n \n \n 351.3 \n \n \n \n \n IFRS 9 transitional adjustment \n \n \n - \n \n \n 0.1 \n \n \n \n \n CET 1 capital \n \n \n 364.8 \n \n \n 351.4 \n \n \n \n \n Tier 2 capital 1 \n \n \n 63.6 \n \n \n 64.3 \n \n \n \n \n Total capital \n \n \n 428.4 \n \n \n 415.7 \n \n \n \n \n Total risk exposure \n \n \n 2,827.5 \n \n \n 2,855.7 \n \n \n \n \n 1. Tier 2 capital, which is solely subordinated debt net of unamortised issue costs, is capped at 25% of total Pillar 1 and Pillar 2A requirements. \n \n \n \n \n Capital ratios \n \n \n 2025 \n% \n \n \n 2024 \n% \n \n \n \n \n CET 1 capital ratio \n \n \n 12.9 \n \n \n 12.3 \n \n \n \n \n Total capital ratio \n \n \n 15.2 \n \n \n 14.6 \n \n \n \n \n CET 1 capital ratio (excluding IFRS 9 transitional adjustment) \n \n \n 12.9 \n \n \n 12.3 \n \n \n \n \n Total capital ratio (excluding IFRS 9 transitional adjustment) \n \n \n 15.2 \n \n \n 14.6 \n \n \n \n \n Leverage ratio \n \n \n 9.4 \n \n \n 9.5 \n \n \n \n \n Capital requirements \n The Total Capital Requirement, set by the PRA, includes both the calculated requirement derived using the standardised approach and the additional capital derived in conjunction with the Internal Capital Adequacy Assessment Process ('ICAAP'). In addition, capital is held to cover generic buffers set at a macroeconomic level by the PRA. \n \n \n \n \n \n \n \n 2025 \n £million \n \n \n 2024 \n £million \n \n \n \n \n Total Capital Requirement \n \n \n 254.5 \n \n \n  257.0 \n \n \n \n \n Capital conservation buffer \n \n \n 70.7 \n \n \n  71.4 \n \n \n \n \n Countercyclical buffer \n \n \n 56.6 \n \n \n 57.1 \n \n \n \n \n Total \n \n \n 381.8 \n \n \n  385.5 \n \n \n \n \n The total risk exposure decreased from £2,855.7 million to £2,827.5 million, as a consequence of a change in the balance sheet mix at the end of the year, which included the impact of the Vehicle Finance loan book being in run-off. \n Liquidity \n Management of liquidity \n The Group uses a number of measures to manage liquidity risk. These include: \n \n \n \n \n ·  \n \n \n The Overall Liquidity Adequacy Requirement ('OLAR'), which is the Board's view of the Group's liquidity needs, as set out in the Board-approved Internal Liquidity Adequacy Assessment Process ('ILAAP'); \n \n \n \n \n ·  \n \n \n The Liquidity Coverage Ratio ('LCR'), which is a regulatory measure that assesses net 30-day cash outflows as a proportion of High Quality Liquid Assets ('HQLA'); \n \n \n \n \n ·  \n \n \n Total funding ratio, as defined in the Appendix to the Annual Report; and \n \n \n \n \n ·  \n \n \n 'HQLA' are held in the Bank of England Reserve Account and gilts. For LCR purposes, the HQLA excludes gilts that are pledged as collateral. \n \n \n \n \n The Group was above the LCR minimum threshold (100%) throughout the year, with the Group's average LCR being 190.4% (2024: 219.6%) based on a rolling 12-month-end average. \n Liquid assets \n We continued to hold significant surplus liquidity over the minimum requirements throughout 2025, managing liquidity by holding HQLA and utilising funding (predominantly from retail funding) to support lending. Total liquid assets increased to £560.8 million (2024: £469.0 million). This includes the receipt of a deposit of £45.8 million as part of the sale of the Consumer Vehicle Finance business. \n The Group has drawn £201.2 million under sale and repurchase agreements (2024: £125.0 million). The Group maintains access to the Bank of England's Sterling Monetary Framework, including a reserves account. Amounts drawn under the TFSME scheme were repaid during the year. The Group has no liquid asset exposures outside the United Kingdom and no amounts that are either past due or impaired. \n \n \n \n \n Liquid assets \n \n \n 2025 \n £million \n \n \n 2024 \n £million \n \n \n \n \n Aaa-Aa3 \n \n \n 529.1 \n \n \n 445.0 \n \n \n \n \n A1-A2 \n \n \n 31.7 \n \n \n 24.0 \n \n \n \n \n Total \n \n \n 560.8 \n \n \n 469.0 \n \n \n \n \n   \n We continue to attract customer deposits to support balance sheet growth. The composition of customer deposits is shown in the table below: \n \n \n \n \n Customer deposits \n \n \n 2025 \n % \n \n \n 2024 \n % \n \n \n \n \n Fixed term bonds \n \n \n 43 \n \n \n 47 \n \n \n \n \n ISAs \n \n \n 34 \n \n \n 26 \n \n \n \n \n Access accounts \n \n \n 22 \n \n \n 25 \n \n \n \n \n Notice accounts \n \n \n 1 \n \n \n 2 \n \n \n \n \n Total \n \n \n 100 \n \n \n 100 \n \n \n \n \n Business review \n Consumer Finance \n Retail Finance \n We provide quick and easy finance options at the point of purchase. \n Performance history \n New business (£m ) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 1,185.4 \n \n \n 1,289.7 \n \n \n 1,407.0 \n \n \n \n \n Loans and advances to customers (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 1,223.2 \n \n \n 1,357.8 \n \n \n 1,466.5 \n \n \n \n \n Net interest margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 6.4 \n \n \n 6.8 \n \n \n 6.9 \n \n \n \n \n Risk adjusted margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 5.3 \n \n \n 6.0 \n \n \n 5.8 \n \n \n \n \n What we do \n \n \n \n \n ·  \n \n \n We provide a market-leading online e-commerce service to retailers, providing unsecured, interest-free and interest-bearing prime lending products to UK customers to facilitate the purchase of a wide range of consumer products, including furniture, jewellery, dental, leisure items and football season tickets. These retailers include a large number of household names. \n \n \n \n \n ·  \n \n \n Products are available to purchase in store or online, using our market-leading origination platform, which provides fast decision making, with 90% of applications agreed in an average of six seconds. \n \n \n \n \n ·  \n \n \n The customer proposition and the integrated platform support the growth of UK retailers and the real economy. \n \n \n \n \n 2025 performance \n \n \n \n \n ·  \n \n \n New business lending increased 9.1% (2024: 8.8%), contributing to record lending balances. Retail Finance continued to hold a strong market position, with market share of new business at 15.5% 1 (2024: 13.6%). \n \n \n \n \n ·  \n \n \n Growth was focused in high ‑ quality sectors such as furniture, and we continued to serve a diverse retailer mix across sectors and sizes. \n \n \n \n \n ·  \n \n \n Improved net interest margin to 6.9% (2024: 6.8%) reflects disciplined pricing in a competitive environment. Risk adjusted margin fell to 5.8% (2024: 6.0%) reflecting the benefit of model enhancements in 2024. \n \n \n \n \n ·  \n \n \n The portfolio remained focused on interest ‑ free lending, which accounted for 86.1% of balances (2024: 86.7%). \n \n \n \n \n ·  \n \n \n Over 475,000 mobile app registrations, enabling greater self-service and access to our full product and retailer offering. \n \n \n \n \n ·  \n \n \n We anticipate further growth with both new and existing retailers in 2026, with a focus on expansion within the Home improvement sector. \n \n \n \n \n Note: \n 1. Source: Finance & Leasing Association ('FLA'): New business values within retail store and online credit: 2025: 15.5% (2024: 13.6%). FLA total and Retail Finance new business of £9,094.8m (2024: £9,476.6m) and £1,407.0m (2024: £1,289.7m). As published at 31 December 2025. \n Business Finance \n Real Estate Finance \n We lend money against residential properties to professional landlords and property developers. \n Performance history \n New business (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 434.0 \n \n \n 383.5 \n \n \n 451.0 \n \n \n \n \n Loans and advances to customers (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 1,243.8 \n \n \n 1,341.4 \n \n \n 1,466.9 \n \n \n \n \n Net interest margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 2.6 \n \n \n 2.6 \n \n \n 2.4 \n \n \n \n \n Risk adjusted margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 2.2 \n \n \n 2.3 \n \n \n 1.8 \n \n \n \n \n What we do \n \n \n \n \n ·  \n \n \n We provide non-regulated first charge secured lending to specialist real estate markets, lending to professional landlords \nto enable them to improve and grow their portfolio and provide development facilities to property developers and SME housebuilders to help build new homes for sale or letting. \n \n \n \n \n ·  \n \n \n Due to our specialist relationship-led business model, we offer through the cycle tailored underwriting and cash flow led debt structuring. \n \n \n \n \n ·  \n \n \n Finance opportunities are sourced and supported on a relationship basis directly and via introducers and brokers. \n \n \n \n \n 2025 performance \n \n \n \n \n ·  \n \n \n Record levels of new lending, with £451.0 million of new business written throughout the year, despite a subdued market. \n \n \n \n \n ·  \n \n \n The slight reduction in net revenue margin reflects increased lending in lower ‑ risk residential investment, which represents 92.4% of the book (2024: 88.1%). The remainder comprises development, commercial investment and bridging exposures. \n \n \n \n \n ·  \n \n \n Impairment charges of £8.8 million (2024: £4.0 million) due to the impact of two cases. This largely relates to one legacy development case which is now materially resolved. \n \n \n \n \n ·  \n \n \n The average loan-to-value remains low at 57.3% (2024: 56.0%), below our maximum 70% offering. \n \n \n \n \n ·  \n \n \n We enter 2026 with strong positive momentum, with growth supported by expansion into our new Bridging product, which enables us to offer full lifecycle funding. \n \n \n \n \n Business Finance \n Commercial Finance \n Supporting the growth of UK businesses by providing flexible, asset-based financing solutions \n Performance history \n New business (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 214.8 \n \n \n 105.8 \n \n \n 287.5 \n \n \n \n \n   \n Loans and advances to customers (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 381.1 \n \n \n 351.0 \n \n \n 362.4 \n \n \n \n \n   \n Net revenue margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 7.0 \n \n \n 7.6 \n \n \n 6.1 \n \n \n \n \n                 \n Risk adjusted margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 4.7 \n \n \n 5.9 \n \n \n 5.2 \n \n \n \n \n What we do \n \n \n \n \n ·  \n \n \n We offer a full suite of asset-based lending solutions to SMEs and some larger corporates who need bespoke working capital solutions for their business. \n \n \n \n \n ·  \n \n \n We operate a high-touch relationship-led model throughout the life of a facility, where partners and clients have direct access to decision-makers. \n \n \n \n \n ·  \n \n \n Our lending remains predominantly against receivables, releasing funds of up to 90% of qualifying invoices under invoice discounting facilities. \n \n \n \n \n ·  \n \n \n Business is sourced and supported directly from clients via private equity houses and professional introducers but is not reliant on the broker market. \n \n \n \n \n 2025 performance \n \n \n \n \n ·  \n \n \n New business more than doubled year-on-year, and low client attrition saw net lending balances rise to £362.4 million. \n \n \n \n \n ·  \n \n \n Growth in spot lending balances in line with average lending balances, reflecting controlled and stable growth. \n \n \n \n \n ·  \n \n \n Income from one ‑ off termination fees was lower than in 2024, reducing net revenue margin and risk adjusted margin, but contributes to a more stable and higher ‑ quality earnings profile over time. \n \n \n \n \n ·  \n \n \n Cost of risk of 0.9% (2024: 1.7%), whilst improved, reflects the impact of one specific case within the business. \n \n \n \n \n ·  \n \n \n In 2026, we look forward to supporting businesses across our core product suite, whilst also expanding our offering to include selective Speciality Finance (lending to non ‑ bank lenders). This represents a natural extension of our current proposition. \n \n \n \n \n Consumer Finance \n Vehicle Finance \n We provided quick and easy used car finance options at the point of purchase. \n We ceased lending in the Vehicle Finance portfolio in July 2025 to improve returns at Group level. \n In February 2026 we completed the sale of the Consumer Vehicle Finance business, reflecting an acceleration of our strategic plans. \n Performance history \n New business (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 471.2 \n \n \n 552.9 \n \n \n 380.7 \n \n \n \n \n   \n Loans and advances to customers (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 467.2 \n \n \n 558.3 \n \n \n 390.8 \n \n \n \n \n   \n Net interest margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 10.3 \n \n \n 9.4 \n \n \n 9.1 \n \n \n \n \n   \n Risk adjusted margin (%) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 7.3 \n \n \n 1.9 \n \n \n 4.2 \n \n \n \n \n What we do \n \n \n \n \n ·  \n \n \n We provided consumer lending products, secured against the second hand vehicle being financed. \n \n \n \n \n ·  \n \n \n We provided a vehicle stock funding product, which was secured against dealer forecourt used car stock; sourced from auctions, \npart exchanges or trade sources. \n \n \n \n \n ·  \n \n \n Finance was provided via technology platforms, allowing us to receive applications online from introducers; provide an automated decision; facilitate document production through to pay-out to dealer; and manage in-life loan accounts. \n \n \n \n \n 2025 performance \n \n \n \n \n ·  \n \n \n As a result of the decision to exit Vehicle Finance, the portfolio has run-down in the second half of the year, with lending balances reducing to £390.8 million by the end of 2025. \n \n \n \n \n ·  \n \n \n The sale was made at a premium to book value and was completed in February 2026. Further information will be included in the Group's Interim Report for the six months ended 30 June 2026. \n \n \n \n \n ·  \n \n \n The book saw an improved risk adjusted margin to 4.2% (2024: 1.9%), with 2025 benefitting from a more consistent collections delivery without the adverse impact of the Borrowers in Financial Difficulty review that occurred in 2024. Further details can be found in Note 8 to the Financial Statements. \n \n \n \n \n ·  \n \n \n In October, the FCA published a consultation paper on its proposed redress scheme. As a result, the Group increased its provision. Further details can be found in Note 31 to the Financial Statements. \n \n \n \n \n Savings \n We look after our customers' savings and provide a competitive return. \n Performance history \n Total deposits (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 2,871.8 \n \n \n 3,244.9 \n \n \n 3,509.6 \n \n \n \n \n Total funds raised (£m) \n \n \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n \n \n 1,719.1 \n \n \n 1,604.2 \n \n \n 1,797.9 \n \n \n \n \n   \n 2024 Total deposits (£m) \n £3,244.9m \n \n \n \n \n Term \n \n \n ISA \n \n \n Access \n \n \n Notice \n \n \n Total \n \n \n \n \n £1,510.0m \n \n \n £857.3m \n \n \n £805.2m \n \n \n £72.4m \n \n \n £3,244.9m \n \n \n \n \n   \n 2025 Term deposits (£m) \n £3,509.6m \n \n \n \n \n Term \n \n \n ISA \n \n \n Access \n \n \n Notice \n \n \n Total \n \n \n \n \n £1,518.9m \n \n \n £1,181.2m \n \n \n £770.2m \n \n \n £39.3m \n \n \n £3,509.6m \n \n \n \n \n What we do \n \n \n \n \n ·  \n \n \n We offer a range of savings accounts that are purposely simple in design, with a choice of products from Access to 180-day notice, and six month to seven-year fixed terms across both Bonds and ISAs. \n \n \n \n \n ·  \n \n \n Our range of savings products enables us to access the majority of the UK personal savings markets and compete for significant liquidity pools, achieving a lower marginal cost with the volume, mix and the competitive rates offered; optimised to the demand of our funding needs. \n \n \n \n \n 2025 performance \n \n \n \n \n ·  \n \n \n In 2025 we delivered strong deposit growth increasing total balances by 8.2% to £3.5 billion (2024: £3.2 billion). This expansion has provided a stable source of funding to support lending book growth. \n \n \n \n \n ·  \n \n \n The Bank of England lowered the Base Rate four times during the year to 3.75% by year-end. \n \n \n \n \n ·  \n \n \n The Financial Services Compensation Scheme increased to cover 97.6% (2024: 95.1%) of total deposits, providing additional security and confidence for our customers. \n \n \n \n \n ·  \n \n \n We re-launched our Savings app at the end of 2025 improving customer experience and strengthening our digital service offering. \n \n \n \n \n ·  \n \n \n In 2026 we will continue with our focus of building a strong savings franchise with differentiated products and diversified distribution. \n \n \n \n \n Market review \n The Group operates exclusively within the UK, and its revenue is derived almost entirely from customers operating in the UK. The Group is therefore particularly exposed to the condition of the UK economy. Customers' borrowing demands are variously influenced by, among other things, UK property markets, employment levels, inflation, interest rates and customer confidence. The economic environment and outlook affect demand for the Group's products, margins that can be earned on lending assets and the levels of loan impairment provisions. \n As a financial services firm, the Group is subject to extensive and comprehensive regulation by governmental and regulatory bodies in the UK. The Group conducts its business subject to ongoing regulation by the Financial Conduct Authority ('FCA') and the Prudential Regulation Authority ('PRA'). The Group must comply with the regulatory regime across many aspects of its activities, including: the training, authorisation and supervision of personnel; systems; processes; product design; customer journey and documentation. \n Economic review \n Growth in the UK economy, measured by real annual Gross Domestic Product ('GDP') was estimated at 1.3% 1 in 2025 (2024: 1.1%). Following the Autumn Budget, and marginally more favourable economic forecasts than anticipated, analysts have adjusted UK growth estimates to 1.0% 2 GDP growth in 2026 and 1.4% 2 in 2027. This reflects an outlook that remains challenged, and slow underlying momentum. Global growth in 2026 is projected at 2.7% 2 , bolstered by China's strengthening fiscal outlook. However, global stability faces escalating geopolitical risks, from conflict in Iran and the wider Middle East, heightened international interventions and ongoing tariff ‑ related pressures by the US. Broader global conflicts further add to the overall uncertainty. The technology sector, led by AI, continues to serve as the fundamental engine for global investment and expansion. However, concerns in overvaluation of technology leaders and the complex relationships that exist in the supply chain could create waves in global markets, should a correction occur. \n Inflation was higher than anticipated in 2025, ending the year at 3.4% 1 (2024: 2.5%). Consequently, the Bank of England took a more measured approach to rate reductions than expected, reducing the Base Rate four times in 2025 to 3.75% by December. Inflation had been expected to gradually decline towards the Bank of England's 2% target, driven by anticipated falls in the prices of energy and food. However, the extent to which recent developments in the conflict in Iran and the wider Middle East may increase energy prices, and in turn add to inflationary pressures, remains uncertain. The timing and quantum of future interest rate cuts is currently hard to predict. \n The rate of employment stood at 75.0% 1 in December 2025 (2024: 74.9%), with unemployment rising to 5.2% 1 (2024: 4.4%), its highest level since 2021. Vacancies continued to decline, ending the year at 0.7 million 1 (2024: 0.8 million). Economists anticipate unemployment levels to rise further in 2026 due to higher employment cost pressures. Unemployment is expected to gradually ease towards 4% 2 by 2032, more slowly than previously forecast. \n Despite higher borrowing costs and subdued buyer confidence, the housing market remained resilient during 2025. House prices grew by 2.4% 3 , with modest growth improving buyer affordability. Lower interest rates and steady levels of mortgage approval levels through 2025, leads to optimism in the housing market for 2026. \n The Autumn Budget delivered historic tax increases (albeit coming into effect from 2028 and beyond) to fund public spending and strengthen fiscal headroom. UK productivity is expected to remain subdued due to structural challenges. However, rising investment in AI, technology infrastructure and supply ‑ chain capabilities are expected to generate new opportunities for growth. \n 2025 was marked by uncertainty, and yet UK banks performed strongly, with robust earnings and share price gains across the sector. This resilience was further underlined by the reduction of required Tier 1 Capital by the Bank of England, from 14% to 13%. UK banks have continued to see net interest income trending upwards, although competition in the savings market has put pressure on banks to increase savings rates following reductions in the Base Rate. Large banks are also enjoying a tailwind from structural hedges than will unwind over coming years. \n Consumer Finance \n 2025 was a year of adjustment for UK retail. With businesses navigating inflation, shifting customer expectations and tighter operating conditions, many found new ways to adapt. Retailers leaned into AI opportunities, sustainability initiatives, and more connected omnichannel journeys to maintain demand. Physical stores continued to evolve, focusing on immersive experiences that complement the growing popularity of online shopping. \n Amidst this change, demand remained resilient. New business volumes rose 6% 4 in the year to November, with several months delivering mid ‑ to high ‑ single ‑ digit growth. \n Business Finance \n In 2025, UK businesses proved remarkably resilient in times of economic uncertainty. In Real Estate, rising construction and operational costs weighed on the sector and commercial businesses were sensitive to inflationary pressures and shifting fiscal policies. \n Reflecting this resilience, new Buy ‑ to ‑ Let lending increased by 11% 5 compared with 2024. Gross SME lending also maintained its upward trajectory through 2025, with higher lending in Q3 marking the seventh consecutive quarterly increase since early 2024 5 . These trends indicate positive momentum across Business Finance heading into 2026. \n Looking ahead to 2026, pressures will remain from rising labour costs and stretched household budgets. While confidence across Consumer and Business Finance markets had been strengthening, the evolving Middle East conflict creates uncertainty regarding upward inflationary pressure and subsequent interest rate movements. Technology and innovation will remain vital in helping retailers and businesses deliver smoother, more personalised experiences. \n Notes: \n 1.     Source: Office for National Statistics, data as at 31 December 2025, unless otherwise stated. \n 2.     Source: Oxford Economics. \n 3.     Source: UK Parliament House of Commons Library. \n 4.     Source: FLA. \n 5.     Source: UK Finance. \n Government and regulatory \n This has been another eventful year for Government and regulatory announcements that impact the Group and/or the markets in which it operates. The key announcements in the year are set out below. \n Prudential regulation \n At the beginning of the year, the PRA announced delaying Basel 3.1 implementation by one year to 1 January 2027, shortening the transitional period for full implementation which remains 31 January 2030. It was later confirmed in October 2025 that the Interim Capital Regime was being revoked as the Small Domestic Deposit Takers ('SDDTs') implementation date would align to the Basel 3.1 effective date. \n During the second half of 2025, the PRA issued a number of publications, providing clarity to the simplified capital regime and the near final proposals for SDDT firms. PS20/25 'The strong and simple framework: The simplified capital regime for Small Domestic Deposit Takers SDDTs near-final', confirmed no significant changes to the Pillar 1 capital treatment to the consultation proposals. The Policy Statement changed areas of the Pillar 2A capital and included details on the Pillar 2A lending adjustment. It also confirmed the single capital buffer under Pillar 2B and announced a reduction in frequency of Pillar 2A and Pillar 2B updates to every two years in line with the ICAAP and ILAAP document production for SDDTs. The final rules were published in January 2026, with limited further changes. The Group has assessed the changes announced and expect the impact to be \nfairly neutral. \n As part of the wider Basel 3.1 regulatory change and implementation of the SDDT regime, the Group has established a project with involvement from across the firm to ensure the Group is prepared for implementation on 1 January 2027. \n On 1 October 2025, the requirements for Solvent Exit analysis came into force and the required analysis was approved by the Board in August 2025. \n In November 2025 the PRA announced an increase to the FSCS protection limit from £85,000 to £120,000, effective from 1 December 2025, providing increased protection to our savers. \n Conduct regulation \n The FCA's consultation on motor finance commission redress was issued in October 2025. It is towards the extreme end of outcomes previously expected from the Supreme Court judgment. On 20 October, the Group updated the market that it had increased its motor finance redress commission provision as a result. The Group responded to the consultation on 5 December 2025 and also contributed to the FLA's response. \n Operational readiness arrangements are being progressed in line with the FCA's expectations set out in their Dear CEO letter. The FCA issued its policy statement in December on changes to handling rules for motor finance complaints which fall outside the scope of the proposed redress scheme. \n During the year, new rules were introduced by the UK Government to address concerns around \"debanking\" and policy statements were issued for a new FCA regulatory return for credit broking firms, the Appointed Representatives regime; changes to complaints data reporting requirements; changes to the interest rates applied to compensation awards issued by FOS; remuneration reform; and non-financial misconduct guidance. The FCA published outputs from initiatives focused on the Consumer Duty, and findings from their sustainable lending project. \n There were consultations on reform of the Consumer Credit Act, Senior Managers and Certification Regime review, redress reform and the Financial Ombudsman Service case fees, and deferred payment credit regulation. The Data (Use and Access) Act 2025 came into force with the Information Commissioner's Office committing to publish guidance over the next year. \n Outlook \n The near-term environment remains challenged by global geopolitical tensions and macro uncertainty. Although the outlook had been improving for lower interest rates and household incomes, recent developments create uncertainty around how the economy will be impacted. UK growth is expected to be modest; however, we remain well positioned to deliver value for consumers through our product proposition and to navigate the evolving environment. \n Principal risks and uncertainties \n Risk management \n The effective management of risk is a key part of the Group's strategy and is underpinned by its Risk Aware value. This helps to protect the Group's customers and generate sustainable returns for shareholders. The Group is focused on maintaining sufficient levels of capital, liquidity, operational control, and acting in a responsible way. \n The Group's Chief Risk Officer is responsible for leading the Group's Risk function, which is independent from the Group's operational and commercial teams. The Risk function is responsible for designing and overseeing the embedding of appropriate risk management frameworks, processes and controls, to enable key risks to be identified, assessed, monitored, and accepted or mitigated in line with the Group's risk appetite. The Group's risk management practices are regularly reviewed and enhanced to reflect changes in its operating environment. The Chief Risk Officer is responsible for reporting to the Board on the Group's principal risks and how they are being managed against agreed risk appetite. \n Risk appetite \n The Group has identified the risk drivers and major risk categories relevant to the business, which has enabled it to agree a suite of risk appetite statements and metrics to underpin the strategy of the Group. The Board approves the Group's risk appetite statements annually and these define the level and type of risk that the Group is prepared to accept in the pursuit of its strategic objectives. \n Risk culture \n A strong risk-aware culture is integral to the successful delivery of the Group's strategy and the effective management of risk. \n The Group's risk culture is shaped by a range of factors including risk appetite, risk frameworks and policies, values and behaviours, as well as a clear tone from the top. \n The Group looks to enhance continually its risk culture, and performs an annual assessment against standards based on industry best practice and guidance from the Institute of Risk Management. \n Risk governance \n The Group's approach to managing risk is defined within its Enterprise-Wide Risk Management Framework. This provides a clear risk taxonomy and an overarching framework for risk management supported by frameworks and policies for individual risk disciplines. These frameworks set the standards for risk identification, assessment, mitigation, monitoring and reporting. \n The Group's risk management frameworks, policies and procedures are regularly reviewed and updated to reflect the evolving risks that the Group faces in its business activities. They support decision making across the Group and are designed to ensure that risks are appropriately managed and reported on via appropriate committees. \n An Executive Risk Committee, chaired by the Chief Risk Officer, reviews key risk management information from across all risk disciplines, with material issues escalated to the Executive Committee and/or the Risk Committee of the Board, as required. \n The Group operates a 'Three Lines of Defence' model for the management of its risks. The Three Lines of Defence, when taken together, control and manage risks in line with the Group's risk appetite. The three lines are: \n \n \n \n \n ·  \n \n \n First line: all employees within the business units and associated support functions, including Operations, Finance, Treasury, Human Resources and Legal. The first line has ownership of, and primary responsibility, for their risks. \n \n \n \n \n ·  \n \n \n Second line: specialist risk management and compliance teams reporting directly into the Chief Risk Officer, covering Credit risk, Operational risk, Information Security, Prudential risk, Compliance and Conduct risk, and Financial Crime risk. The second line are responsible for developing frameworks to assist the first line in the management of their risks and providing oversight and challenge designed to ensure they are managed within appetite. \n \n \n \n \n ·  \n \n \n Third line: is the Internal Audit function that provides independent assurance on the effectiveness of risk management across the Group. \n \n \n \n \n Board and Board Committees \n See Corporate Governance section of the 2025 Annual Report and Accounts. \n Group Executive Committee \n Chair: Chief Executive Officer \n Provides executive oversight of the ongoing safe and profitable operation of the Group. It reports to the Board through the \nChief Executive Officer. Responsible for the execution of the strategy of the Group at the direction of the Chief Executive Officer. \n Executive Risk Committee \n Chair: Chief Risk Officer \n Responsible for overseeing the Group's risk profile, its adherence to regulatory compliance and monitoring these against the risk appetite set by the Board. Monitors the effective implementation of the risk management framework across the Group. \n Assets and Liabilities Committee ('ALCO') \n Chair: Chief Financi...

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