Accounts for the year ended 31 December 2025

About this update from Manx Financial Group Plc

[{"type":"text","content":"\n \n FOR IMMEDIATE RELEASE                                                                                                                                                   18 May 2026 \n   \n   \n Manx Financial Group PLC (the 'Group') \n Report and accounts for the year ended 31 December 2025 \n Manx Financial Group PLC (LSE: MFX), the financial services group which includes Conister Bank Limited, Conister Finance & Leasing Ltd, Payment Assist Limited, Blue Star Business Solutions Limited, Edgewater Associates Limited and MFX Limited presents its audited final results for the year ended 31 December 2025. \n Jim Mellon, Executive Chair, commented: \"Net interest income increased by 14.3% to £37.5 million (2024: £32.8 million), reflecting both balance sheet growth and an improved funding mix\". \n   \n Financial highlights \n ·      net assets increased by 16.7% to £43.6 million (2024: £37.3 million). These increases reflect the continuing strength of the Group's financial position. \n ·      reported profit before tax decreased to £7.3 million (2024: £9.9 million) reflecting a weaker contribution from The Business Lending Exchange Limited together with the impact of non-recurring provisions \n ·      normalised profit before tax increased to £8.6 million (2024: £8.3 million) \n ·      basic earnings per share was 5.33 pence (2024: 6.87 pence) and normalised basic earnings per share increased by 10% to 6.28 pence (2024: 5.70 pence) \n ·      net assets per share rose to 35.4p (2024:31.1p) and tangible net assets per share increased to 22.2p (2024: 17.9p) \n ·      return on equity was 15.8% (2024: 22.4%) and normalised return on equity was maintained at 18.6% (2024: 18.6%) \n ·      normalised return on tangible equity remained high at 30.9% (2024: 32.4%) \n ·      total capital ratio of 15.8% (2024: 17.0%), safely above its regulatory minimum, reflecting growth in risk weighted assets \n   \n Strategic highlights \n   \n ·      the Board remains focused on disciplined execution and remains well placed to capture attractive opportunities while continuing to manage the business prudently and efficiently \n ·      the Conister Overdraft remains in user acceptance testing ahead of an anticipated launch later in 2026 \n ·      the Group submitted an Irish consumer credit licence application. A decision from the Central Bank of Ireland is anticipated by late summer 2026 \n   \n The 2025 Audited Annual Report and Accounts will be posted to Shareholders and will be available from the Company's website  www.mfg.im  shortly. Details concerning the 2026 Annual General Meeting will be announced in due course. \n Douglas Grant, Group Chief Executive Officer, and James Smeed, Group Finance Director, will host a live presentation for retail investors relating to the FY25 Results via Investor Meet Company on Wednesday 20 May 2026 at 10.00 a.m. UK time. \n The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9.00 a.m. on Tuesday 19 May 2026 or at any time during the live presentation. \n Investors can sign up to Investor Meet Company for free and register to meet Manx Financial Group PLC via:  https://www.investormeetcompany.com/manx-financial-group-plc/register-investor \n Investors who already follow Manx Financial Group PLC on the Investor Meet Company platform will automatically be invited . \n THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU No. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. \n For further information, please contact: \n \n \n \n \n Manx Financial Group PLC \n \n \n Beaumont Cornish Limited \n \n \n Shore Capital \n   \n \n \n Tavistock Communications Limited \n \n \n \n \n Denham Eke \n \n \n Roland Cornish/ \n James Biddle \n \n \n Tony Gibbs/ \n Oliver Jackson \n \n \n   \n Simon Hudson/ \n Adam Baynes \n \n \n \n \n Tel: +44 (0) 1624 694694 \n \n \n Tel: +44 (0) 20 7628 3396 \n \n \n Tel: +44 (0) 20 7408 4090 \n \n \n   \n Tel: +44 (0) 20 7920 3150 \n [email protected] \n \n \n \n \n   \n About Manx Financial \n Manx Financial Group (AIM: MFX) is a diversified UK banking and financial services group with a proud Manx heritage. The Group holds Isle of Man and UK banking licences, allowing it to provide flexible funding solutions across both territories focused on SME lending. Knowledge of the SME sector has enabled MFX to build a portfolio of valuable subsidiaries, from start-ups to selective and accretive acquisitions, which are creating significant value for shareholders. These entrepreneurial subsidiaries are grouped under our entrepreneurial subsidiary Manx Ventures Limited. \n Nominated Adviser \n Beaumont Cornish Limited (\"Beaumont Cornish\") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it. \n   \n Chair's Statement \n Introduction \n 2025 was yet another year of steady strategic and operational progress for the Group, notwithstanding a still challenging external environment. Whilst our reported results in the current and prior year reflect the effect of certain non-recuring and accounting items, the Board remains encouraged by the Group's underlying performance and prospects. Our principal subsidiaries continued to perform well, our robust balance sheet strengthened still further, and we maintained positive momentum in the development of the business. \n   \n The Isle of Man and UK economies have remained more resilient than many anticipated, despite continued inflationary pressures and wider geopolitical and macroeconomic uncertainty. Against this backdrop, demand for short-term funding solutions from both consumers and SMEs, our core markets, has remained robust. We also continue to see evidence that these segments are underserved following the retreat of a number of UK banks from short-term lending, creating a meaningful opportunity for the Group which we are well placed to address. \n   \n Results \n Reported profit before tax for 2025 decreased to £7.3 million (2024: £9.9 million). This primarily reflected a weaker contribution from The Business Lending Exchange Limited (\"BLX\"), together with two non-recurring items: a £1.3 million provision in connection with the Financial Conduct Authority's Discretionary Commission Arrangement review concerning the sale of legacy UK car loans (bringing the total provision to £1.5 million), and a £1.8 million provision release in 2024 relating to Payment Assist Limited following an enhancement to expected credit loss modelling and arrears management actions, which benefited the prior year comparator. Excluding these two latter items, but including the weaker BLX performance, normalised profit before tax increased to £8.6 million (2024: £8.3 million), representing like-for-like growth of approximately 3.6% and demonstrating the Group's underlying resilience. \n   \n Total assets at the year-end increased by 12.8% to £561.3 million (2024: £497.8 million), while the Group's well-diversified, largely secured net loan book grew by 9.5% to £407.9 million (2024: £372.4 million). Net assets increased by 16.7% to £43.6 million (2024: £37.3 million). These increases reflect the continuing strength of the Group's financial position. Further detail on financial performance is set out in the CEO's Review below. \n   \n Dividend \n The Group's dividend policy is to pay an annual dividend equivalent to 10% of profit attributable to the shareholders of the Company and, in respect of 2025 (payable in 2026), the Board has maintained that policy. Accordingly, the Board is proposing a basic dividend for 2025 of £639,000 (2024: £810,000), representing 0.5197 pence per share. This reflects the Board's confidence in the Group's cash generation, capital position and long-term earnings outlook. Shareholders will again have the option to receive their entitlement in cash or in scrip. In addition, following consultation with shareholders, we are proposing an additional bonus distribution of 5% on the same qualifying basis, payable in shares only. Taken together, this represents a total dividend of 15% of profit attributable to shareholders at 0.7796 pence per share. The dividend will be payable on 20 August 2026 to shareholders on the register at the close of business on 10 July  2026. \n   \n Strategic objectives \n The Group's strategic objectives remain unchanged. In an environment shaped by continuing inflationary pressures, a more prolonged higher interest-rate backdrop and broader economic uncertainty, the Board remains focused on disciplined execution. We will continue to: \n   \n ·      provide the highest quality of service throughout our operations to all customers, ensuring that their treatment is both fair and appropriate; \n ·      adopt a pro-active strategy to managing risk, including credit and climate risk, within a structured and compliant manner; \n ·      concentrate on developing our core business by considered acquisitions, increasing prudential lending, and augmenting the range of financial services we offer; \n ·      prudently progress the implementation of our IT infrastructure to better service the operational requirements of a growing Group without the requirement for a disproportionate increase in headcount and other associated operational costs; \n ·      continue to develop our treasury management to improve the return on the liability side of our balance sheet; and \n ·      manage our balance sheet to exceed the regulatory requirements for capital adequacy. \n   \n The Board believes that delivery against these objectives will support further growth in shareholder value, strengthen cash generation for reinvestment in new products and services and underpin returns to shareholders. Further details are set out in the Corporate Governance Report, together with our approach to the Quoted Companies Alliance (\"QCA) Corporate Governance Code. \n   \n Environmental, Social and Governance \n The Board believes that ESG considerations are integral to the delivery of sustainable long-term value, effective risk management and the resilience of the Group. Our approach is proportionate to our scale as an AIM-listed financial services business and is focused on clear governance, responsible business practices and positive outcomes for customers, colleagues and the communities in which we operate. \n   \n The Board retains ultimate responsibility for ESG and climate-related matters, supported by the Group Audit, Risk and Compliance Committee within the Group's established risk management framework. This approach is aligned with the Quoted Companies Alliance (\"QCA\") Corporate Governance Code and applies across the Group's lending, wealth management and leasing operations. Further details are provided in the Environmental, Social and Governance Report. \n   \n Board changes \n In March this year, I was pleased to welcome Jennifer Quirke to the Group Board as a non-executive director. Jennifer is currently Chair of the Audit Committee of Vernon Building Society, a role from which she will retire later this year and also serves as Chair and non-executive director of the Mersey Gateway Crossings Board. She is a Fellow of the Chartered Institute of Management Accountants (\"CIMA\") and will chair the Group Audit, Risk and Compliance Committee. Jennifer succeeds Alan Clarke, who retired last year after 18 years of service. I am also pleased to welcome Tanya Beckett and Bill Shimmins to the board of Conister Bank Limited. \n   \n Outlook \n The economic backdrop in the Isle of Man and the UK remains uncertain, with inflationary pressures and the prospect of interest rates remaining higher for longer continuing to affect household and business budgets. At the same time, these conditions are creating opportunities for the Group to support customers through both our existing and new short-term financing products. The wider business environment will also continue to be influenced by government policy and the pace at which announced measures are implemented. \n   \n Against this backdrop, the Group remains well placed to capture attractive opportunities while continuing to manage the business prudently and efficiently. My executive colleagues and I look forward to continued engagement with existing and prospective shareholders as we further raise the profile of the Group. \n   \n In closing, I would like to thank my colleagues on the Board and all our staff in the Isle of Man and the UK for their continued hard work and commitment. Their contribution has been central to the Group's progress during the year. \n   \n   \n   \n Jim Mellon \n Executive Chair \n 15 May 2026 \n   \n Chief Executive Officer's review \n As noted in the Chair's statement, cost of living pressures remained evident throughout 2025 and continued to influence demand across both retail and corporate markets. At the same time, the availability of short-term finance from traditional banking providers remained constrained. More recently, geopolitical developments in the Middle East have contributed to renewed inflationary pressure and increased the prospect of interest rates remaining elevated for longer. Despite this, our operating income continued to grow. \n   \n Against this backdrop, the Group continued to operate in a relatively challenging environment while benefiting from sustained demand for short-term credit solutions from individuals and small and medium-sized enterprises (\"SMEs\"). \n   \n The Group operates a diversified portfolio of subsidiaries across banking, asset finance, point-of-sale lending, wealth management, foreign exchange and leasing. This breadth of activity reduces concentration risk and provides multiple drivers of income and medium-term growth. \n   \n The following sections review the Group's performance in 2025, and the contribution made by its principal businesses in supporting SMEs and individual customers through the provision of finance for everyday purchases, insurance premiums and broader cash flow requirements. \n   \n Financial review \n   \n Key metrics \n   \n \n \n \n \n Metric \n \n \n 2025 Actual \n £'m \n \n \n 2024 Actual \n £'m \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net interest income \n \n \n    £37.5 \n \n \n   £32.8 \n \n \n \n \n Profit before tax payable \n \n \n      £7.3 \n \n \n      £9.9 \n \n \n \n \n Total comprehensive income attributable to owners \n \n \n      £6.6 \n \n \n      £7.8 \n \n \n \n \n Basic earnings per share \n \n \n        5.33 pence \n \n \n        6.87 pence \n \n \n \n \n Tangible net assets per share \n \n \n 22.2 pence \n \n \n 17.9 pence \n \n \n \n \n Return on equity \n \n \n      15.8% \n \n \n      22.4% \n \n \n \n \n Normalised return on tangible equity \n \n \n 30.9% \n \n \n 32.4% \n \n \n \n \n Net loan book \n \n \n £407.9 \n \n \n £372.4 \n \n \n \n \n Total capital ratio \n \n \n      15.8% \n \n \n      17.0% \n \n \n \n \n Liquidity ratio \n \n \n      27.0% \n \n \n      24.0% \n \n \n \n \n Dividend per share \n \n \n 0.7796 pence \n \n \n 0.6768 pence \n \n \n \n \n   \n In addition to reported results, management also reviews performance on a normalised trading basis. For 2025, this includes adjusting for the £1.3 million exceptional provision relating to certain UK vehicle commissions paid between 2007 and 2024, which is discussed further later in this report. In 2024, the Group benefited from a £1.8 million release of Payment Assist Limited provisions following an enhancement to expected credit loss modelling and arrears management actions. \n   \n On a reported basis, the Group delivered the largest balance sheet in its history, record net interest income, an improved funding cost profile and a strong liquidity position. As noted in the Chair's statement, the Board has proposed an increased dividend. The reduction in reported profit before tax principally reflected two non-recurring items. Excluding these items, underlying performance remained in line with the Group's strategic priorities. \n   \n In addition to reported results, management reviews performance on a normalised trading basis. For 2025, this includes adjusting for the £1.3 million (2024: £0.2 million) exceptional provision relating to certain UK vehicle commissions paid between 2007 and 2024, which is discussed further later in this report. In 2024, the Group benefited from a £1.8 million release of Payment Assist Limited provisions following an enhancement to expected credit loss modelling and arrears management actions. At present, we do not expect further UK Discretionary Commission Arrangement motor related provisioning. \n   \n Operating income increased by £2.9 million to £37.3 million (2024: £34.4 million). Profit before tax, excluding the impact of non-recurring provisions in 2024 and 2025, was £8.6 million (2024: £8.3 million). On the same basis, earnings per share increased by 10% to 6.28 pence and return on equity remained at 18.6%. The return on tangible equity on this basis was 30.9%. The Group's total capital ratio and liquidity ratio remained within management's risk appetite at 15.8% and 27.0% respectively. \n   \n Total assets increased by 12.8% to £561.3 million (2024: £497.8 million), reflecting disciplined growth across the Group's core lending categories. The net loan book increased by 9.5% to £407.9 million (2024: £372.4 million), driven principally by growth in unsecured personal lending and block discounting, while remaining well diversified and predominantly secured. Customer deposits increased by 11.7% to £452.5 million (2024: £405.2 million), reflecting the continued strength of the Group's retail funding franchise in both the Isle of Man and the UK. \n   \n Net interest income increased by 14.3% to £37.5 million (2024: £32.8 million), reflecting both balance sheet growth and an improved funding mix. Despite an increase of £47.3 million in customer deposits, total interest expense decreased by £1.7 million, from £23.1 million to £21.4 million, as the average cost of retail deposits reduced from 5.0% in 2024 to 4.1% in 2025. Asset yields were maintained and net interest margin increased to 9.6% (2024: 8.9%). \n   \n The cumulative UK Discretionary Commission Arrangements provision at the year-end was £1.5 million. Based on management's assessment, and having regard to the FCA's announced redress scheme, the provision is considered appropriate. The incremental charge recognised in 2025 was £1.3 million (2024: £0.2 million) and management currently expects 2025 to represent the peak year of provisioning. \n   \n Conister Bank Limited \n Gross loans, net of deferred income and before the provisions referred to above, increased by 11.7% to £420.3 million (2024: £376.4 million). Customer deposits increased by 11.7% to £452.5 million (2024: £405.2 million). These movements further strengthened liquidity and the loan-to-deposit ratio remained broadly stable at 90.1%. \n   \n As announced in February 2026, following the FCA's overdraft reforms introduced in 2020, an estimated 16.5 million individuals have lost access to unarranged overdrafts, with a further 6 to 8 million losing arranged facilities since 2022. These reforms, which introduced a single interest rate and prohibited fixed fees, have reduced overdraft availability across a number of banks for both consumers and SMEs. The Group continues to respond to this market need through a range of products, including the Conister Overdraft being developed in partnership with Fiinu plc. \n   \n The Conister Overdraft is intended to allow customers to access the facility without switching banks. Following regulatory approval in December 2025, the product remains in user acceptance testing ahead of an anticipated launch later in 2026. The initial launch is expected to target Payment Assist Limited's customer base of more than 1.3 million customers. \n   \n At 31 December 2025, the Bank's total capital ratio was 15.8% (2024: 17.0%), very safely above its regulatory minimum. The reduction reflected growth in risk-weighted assets arising from planned loan book expansion. The Tier 1 capital ratio was 11.7% against a minimum requirement of 8.5%. The Bank's liquidity ratio decreased to 21.1% (2024: 22.5%) and remained comfortably above the regulatory minimum of 10%. Total liquidity reserves were £95.5 million (2024: £91.1 million). \n   \n Payment Assist Limited \n Payment Assist Limited (\"PAL\"), the Group's buy-now-pay-later subsidiary, delivered growth in 2025, with annual advances increasing by £49.2 million to £219.7 million (2024: £170.5 million). As previously announced in February 2026, PAL invested in new collections software, which became fully operational in April 2026. The Group continues to support PAL in arranging additional liquidity facilities and implementing further automation to improve efficiency, support profitability and enable future scale. \n   \n PAL notes the planned introduction of FCA regulation for the buy-now-pay-later (\"BNPL\") sector, which is expected to commence in July 2026. The business has continued its readiness programme in anticipation of the enhanced regulatory framework. \n   \n The Group has submitted an Irish consumer credit licence application, initially focused on the automotive sector. A decision from the Central Bank of Ireland (\"CBI\") is anticipated by late summer 2026. Subject to the outcome of the application and any further regulatory approvals that may be required, this may provide the Group with a route into additional EU markets without significant upfront balance sheet deployment. \n   \n Edgewater Associates Limited \n The Group's Isle of Man-based wealth management business performed resiliently during the year, with assets under advisement increasing by 3% to £334 million (2024: £325 million). The business remains an important component of the Group's diversification strategy, complementing its deposit, lending, foreign exchange and general insurance activities on the Island. \n   \n The business remains sustainably profitable and continues to generate introductions across the wider Group. \n   \n Manx Ventures Limited \n The Group's other lending subsidiaries continued to deliver organic growth within their respective niche markets, with the exception of The Business Lending Exchange Limited, which reported a loss of £0.3 million compared with a profit of £0.6 million in 2024. This business operates in the non-standard SME credit market and, in response to performance, the Group has tightened credit criteria and strengthened collections processes. \n   \n The Group's foreign exchange businesses delivered results in line with expectations in 2025. Management notes that volatility in the current economic environment has supported performance in the first quarter of 2026. CAM Wealth became a wholly owned subsidiary in January 2025, strengthening the Group's wealth management proposition and enhancing cross-referral opportunities. During the year, CAM Wealth also extended its FCA permissions to offer general insurance products in the UK and has commenced offering these products to customers across the wider Group. \n   \n In addition to PAL, the Group holds a 30% shareholding in another Buy Now Pay Later business, PayitMonthly Limited. PayitMonthly provides a flexible finance platform to businesses ranging from independent operators to national brands, enabling them to offer customers the option to pay by instalments. The business has signed approximately 10,000 UK businesses to its platform. \n   \n The Board continues to evaluate strategic options in respect of the subsidiaries and investments held within Manx Ventures Limited, with the objective of realising value over time and enhancing shareholder returns. These options may include partial or full disposals, joint ventures and, for more mature businesses, potential initial public offerings, subject to market conditions. The Group will provide further updates as appropriate. \n   \n Investor relations \n During the year, the Group continued to develop its investor relations activity and engaged with shareholders through a number of investor events. In April 2026, the Group attended a ShareSoc event in Leeds and also made its annual appearance at the Master Investor Show. \n   \n The Group is hosting an Investor Meet Company presentation in connection with the publication of these results. It intends to continue broadening engagement with existing and prospective shareholders, together with relevant wealth management and small-cap institutional investor audiences. \n   \n Outlook \n The macroeconomic environment remains a little fragile, with inflationary pressures and interest rates expected to remain elevated for longer than previously anticipated as geopolitical developments continue to affect financial markets. Nonetheless, the Manx and UK economies seem pretty robust in the face of adverse international backdrops. Against this backdrop, the Group remains focused on providing flexible, short-term funding solutions in underserved markets across the UK and Isle of Man and on delivering those products efficiently in order to support margin progression. \n   \n The Group intends to broaden its portfolio of financing products through organic development and selective acquisitions. Management believes that current market conditions may present opportunities for value-accretive transactions. The Group also looks forward to entering the Irish consumer credit market subject to the outcome of its licence application. \n   \n MFG remains well positioned to deliver continued organic growth and to pursue further opportunities as they arise. I look forward to updating shareholders further on the Group's progress during 2026. \n   \n   \n Douglas Grant \n Group CEO \n 15 May 2026 \n Consolidated Statement of Profit or Loss and Other Comprehensive Income \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n Interest revenue calculated using the effective interest method \n \n \n \n \n \n 58,906 \n \n \n 55,930 \n \n \n \n \n Interest expense \n \n \n \n \n \n (21,411) \n \n \n (23,139) \n \n \n \n \n Net interest income \n \n \n 9 \n \n \n 37,495 \n \n \n 32,791 \n \n \n \n \n Fee and commission income \n \n \n 10 \n \n \n 4,002 \n \n \n 3,923 \n \n \n \n \n Fee and commission expense \n \n \n 10 \n \n \n (6,795) \n \n \n (7,181) \n \n \n \n \n Net trading income \n \n \n \n \n \n 34,702 \n \n \n 29,533 \n \n \n \n \n Other operating income \n \n \n \n \n \n 41 \n \n \n 585 \n \n \n \n \n Gain on financial instruments \n \n \n 19 \n \n \n 35 \n \n \n 18 \n \n \n \n \n Realised gain on debt securities \n \n \n 18 \n \n \n 2,561 \n \n \n 4,266 \n \n \n \n \n Operating income \n \n \n \n \n \n 37,339 \n \n \n 34,402 \n \n \n \n \n Personnel expenses \n \n \n 11 \n \n \n (13,373) \n \n \n (12,495) \n \n \n \n \n Other expenses \n \n \n 12 \n \n \n (11,856) \n \n \n (9,053) \n \n \n \n \n Provision for impairment on loans and advances to customers \n \n \n 13 \n \n \n (3,335) \n \n \n (1,752) \n \n \n \n \n Depreciation \n \n \n 22 \n \n \n (879) \n \n \n (949) \n \n \n \n \n Amortisation and impairment of intangibles \n \n \n 23 \n \n \n (647) \n \n \n (340) \n \n \n \n \n Share of profit of equity accounted investees, net of tax \n \n \n 30 \n \n \n 87 \n \n \n 119 \n \n \n \n \n Profit before tax payable \n \n \n 14 \n \n \n 7,336 \n \n \n 9,932 \n \n \n \n \n Income tax expense \n \n \n 15 \n \n \n (944) \n \n \n (1,384) \n \n \n \n \n Profit for the year \n \n \n \n \n \n 6,392 \n \n \n 8,548 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n Profit for the year \n \n \n \n \n \n 6,392 \n \n \n 8,548 \n \n \n \n \n Other comprehensive income: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Items that will be reclassified to profit or loss \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Unrealised gain/(loss) on debt securities \n \n \n 18 \n \n \n 171 \n \n \n (395) \n \n \n \n \n Related tax \n \n \n \n \n \n (17) \n \n \n 40 \n \n \n \n \n Items that will never be reclassified to profit or loss \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Actuarial gain on defined benefit pension scheme \n \n \n 28 \n \n \n 57 \n \n \n 67 \n \n \n \n \n Related tax \n \n \n \n \n \n (6) \n \n \n (7) \n \n \n \n \n Other comprehensive income/(loss), net of tax \n \n \n \n \n \n 205 \n \n \n (295) \n \n \n \n \n Total comprehensive income for the period attributable to owners \n \n \n \n \n \n 6,597 \n \n \n 8,253 \n \n \n \n \n Profit attributable to: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Owners of the Company \n \n \n \n \n \n 6,390 \n \n \n 8,102 \n \n \n \n \n Non-controlling interests \n \n \n 32 \n \n \n 2 \n \n \n 446 \n \n \n \n \n \n \n \n \n \n \n 6,392 \n \n \n 8,548 \n \n \n \n \n Total comprehensive income attributable to: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Owners of the Company \n \n \n \n \n \n 6,594 \n \n \n 7,807 \n \n \n \n \n Non-controlling interests \n \n \n 32 \n \n \n 3 \n \n \n 446 \n \n \n \n \n \n \n \n \n \n \n 6,597 \n \n \n 8,253 \n \n \n \n \n Earnings per share - Profit for the year \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Basic earnings per share (pence) \n \n \n 16 \n \n \n 5.33 \n \n \n 6.87 \n \n \n \n \n Diluted earnings per share (pence) \n \n \n 16 \n \n \n 4.25 \n \n \n 5.39 \n \n \n \n \n Earnings per share - Total comprehensive income for the year \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Basic earnings per share (pence) \n \n \n 16 \n \n \n 5.50 \n \n \n 6.62 \n \n \n \n \n Diluted earnings per share (pence) \n \n \n 16 \n \n \n 4.39 \n \n \n 5.20 \n \n \n \n \n The Directors believe that all results derive from continuing activities. \n Company Statement of Profit or Loss and Other Comprehensive Income \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n Interest income calculated using the effective interest method \n \n \n \n \n \n 1,067 \n \n \n 998 \n \n \n \n \n Interest expense \n \n \n \n \n \n (147) \n \n \n (89) \n \n \n \n \n Dividend income \n \n \n \n \n \n 125 \n \n \n 450 \n \n \n \n \n Other income \n \n \n \n \n \n 794 \n \n \n 700 \n \n \n \n \n Operating income \n \n \n \n \n \n 1,839 \n \n \n 2,059 \n \n \n \n \n Personnel expenses \n \n \n 11 \n \n \n (130) \n \n \n (40) \n \n \n \n \n Administration expenses \n \n \n \n \n \n (198) \n \n \n (74) \n \n \n \n \n Depreciation expense \n \n \n 22 \n \n \n (119) \n \n \n (128) \n \n \n \n \n Amortisation expense \n \n \n 23 \n \n \n (264) \n \n \n (2) \n \n \n \n \n Profit before tax payable \n \n \n \n \n \n 1,128 \n \n \n 1,815 \n \n \n \n \n Tax payable \n \n \n \n \n \n - \n \n \n - \n \n \n \n \n Profit for the year \n \n \n \n \n \n 1,128 \n \n \n 1,815 \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n 1,128 \n \n \n 1,815 \n \n \n \n \n The Directors believe that all results derive from continuing activities. \n Consolidated Statement of Financial Position \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n As at 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n 17 \n \n \n 24,310 \n \n \n 16,199 \n \n \n \n \n Debt securities \n \n \n 18 \n \n \n 84,912 \n \n \n 79,140 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 33 \n \n \n 188 \n \n \n 154 \n \n \n \n \n Loans and advances to customers \n \n \n 20 \n \n \n 407,872 \n \n \n 372,358 \n \n \n \n \n Trade and other receivables \n \n \n 21 \n \n \n 21,526 \n \n \n 7,312 \n \n \n \n \n Property, plant and equipment \n \n \n 22 \n \n \n 5,816 \n \n \n 6,433 \n \n \n \n \n Intangible assets \n \n \n 23 \n \n \n 5,049 \n \n \n 5,301 \n \n \n \n \n Investment in associates \n \n \n 30 \n \n \n 404 \n \n \n 317 \n \n \n \n \n Pension asset \n \n \n 28 \n \n \n 99 \n \n \n - \n \n \n \n \n Goodwill \n \n \n 34 \n \n \n 11,144 \n \n \n 10,576 \n \n \n \n \n Total assets \n \n \n \n \n \n 561,320 \n \n \n 497,790 \n \n \n \n \n Liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Deposits from customers \n \n \n 24 \n \n \n 452,461 \n \n \n 405,166 \n \n \n \n \n Creditors and accrued charges \n \n \n 25 \n \n \n 11,511 \n \n \n 9,679 \n \n \n \n \n Contingent consideration \n \n \n 26 \n \n \n 590 \n \n \n - \n \n \n \n \n Loan notes \n \n \n 27 \n \n \n 52,895 \n \n \n 45,292 \n \n \n \n \n Pension liability \n \n \n 28 \n \n \n - \n \n \n 46 \n \n \n \n \n Deferred tax liability \n \n \n 15 \n \n \n 308 \n \n \n 294 \n \n \n \n \n Total liabilities \n \n \n \n \n \n 517,765 \n \n \n 460,477 \n \n \n \n \n Equity \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Called up share capital \n \n \n 29 \n \n \n 19,932 \n \n \n 19,626 \n \n \n \n \n Profit and loss account \n \n \n \n \n \n 23,594 \n \n \n 17,632 \n \n \n \n \n Revaluation reserve \n \n \n 22 \n \n \n - \n \n \n - \n \n \n \n \n Non-controlling interest \n \n \n 32 \n \n \n 29 \n \n \n 55 \n \n \n \n \n Total equity \n \n \n \n \n \n 43,555 \n \n \n 37,313 \n \n \n \n \n Total liabilities and equity \n \n \n \n \n \n 561,320 \n \n \n 497,790 \n \n \n \n \n Company Statement of Financial Position \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n As at 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n 17 \n \n \n 7,774 \n \n \n 718 \n \n \n \n \n Trade and other receivables \n \n \n 21 \n \n \n 71 \n \n \n 130 \n \n \n \n \n Amounts due from Group undertakings \n \n \n 35 \n \n \n 15,088 \n \n \n 14,421 \n \n \n \n \n Property, plant and equipment \n \n \n 22 \n \n \n 665 \n \n \n 87 \n \n \n \n \n Intangible assets \n \n \n 23 \n \n \n 1,745 \n \n \n 1,983 \n \n \n \n \n Investment in subsidiaries \n \n \n 31 \n \n \n 31,097 \n \n \n 31,097 \n \n \n \n \n Subordinated loans \n \n \n 35 \n \n \n 14,228 \n \n \n 14,228 \n \n \n \n \n Total assets \n \n \n \n \n \n 70,668 \n \n \n 62,664 \n \n \n \n \n Liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Creditors and accrued charges \n \n \n 25 \n \n \n 1,007 \n \n \n 1,603 \n \n \n \n \n Loan notes \n \n \n 27 \n \n \n 52,895 \n \n \n 45,292 \n \n \n \n \n Total liabilities \n \n \n \n \n \n 53,902 \n \n \n 46,895 \n \n \n \n \n Equity \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Called up share capital \n \n \n 29 \n \n \n 19,932 \n \n \n 19,626 \n \n \n \n \n Profit and loss account \n \n \n \n \n \n (3,166) \n \n \n (3,857) \n \n \n \n \n Total equity \n \n \n \n \n \n 16,766 \n \n \n 15,769 \n \n \n \n \n Total liabilities and equity \n \n \n \n \n \n 70,668 \n \n \n 62,664 \n \n \n \n \n Consolidated and Company Statements of Changes in Equity \n \n \n \n \n \n \n \n Attributable to owners of the Company \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit \n \n \n \n \n \n \n \n \n Non- \n \n \n \n \n \n \n \n \n \n \n Share \n \n \n and loss \n \n \n Revaluation \n \n \n \n \n \n controlling \n \n \n Total \n \n \n \n \n \n \n \n capital \n \n \n account \n \n \n reserve \n \n \n Total \n \n \n interests \n \n \n equity \n \n \n \n \n Group \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Balance as at 1 January 2024 \n \n \n 19,384 \n \n \n 15,544 \n \n \n 15 \n \n \n 34,943 \n \n \n 1,041 \n \n \n 35,984 \n \n \n \n \n Profit for the year \n \n \n - \n \n \n 8,102 \n \n \n - \n \n \n 8,102 \n \n \n 446 \n \n \n 8,548 \n \n \n \n \n Other comprehensive income \n \n \n - \n \n \n (295) \n \n \n - \n \n \n (295) \n \n \n - \n \n \n (295) \n \n \n \n \n Transactions with owners \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Dividends declared (see note 29) \n \n \n - \n \n \n (337) \n \n \n - \n \n \n (337) \n \n \n (1,817) \n \n \n (2,154) \n \n \n \n \n Scrip dividend shares (see note 29) \n \n \n 193 \n \n \n (193) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share options exercised (see note 29) \n \n \n 49 \n \n \n - \n \n \n - \n \n \n 49 \n \n \n - \n \n \n 49 \n \n \n \n \n Share-based payment expense (see notes 16 and 29) \n \n \n - \n \n \n 196 \n \n \n - \n \n \n 196 \n \n \n - \n \n \n 196 \n \n \n \n \n Revaluation loss \n \n \n - \n \n \n - \n \n \n (15) \n \n \n (15) \n \n \n - \n \n \n (15) \n \n \n \n \n Acquisition of NCI net without change of control \n \n \n - \n \n \n (5,385) \n \n \n - \n \n \n (5,385) \n \n \n 385 \n \n \n (5,000) \n \n \n \n \n Balance as at 31 December 2024 \n \n \n 19,626 \n \n \n 17,632 \n \n \n - \n \n \n 37,258 \n \n \n 55 \n \n \n 37,313 \n \n \n \n \n Profit for the year \n \n \n - \n \n \n 6,390 \n \n \n - \n \n \n 6,390 \n \n \n 2 \n \n \n 6,392 \n \n \n \n \n Other comprehensive income \n \n \n - \n \n \n 205 \n \n \n - \n \n \n 205 \n \n \n - \n \n \n 205 \n \n \n \n \n Transactions with owners \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Dividend declared (see note 29) \n \n \n - \n \n \n (504) \n \n \n - \n \n \n (504) \n \n \n - \n \n \n (504) \n \n \n \n \n Scrip dividend shares (see note 29) \n \n \n 306 \n \n \n (306) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share-based payment expense \n \n \n - \n \n \n 373 \n \n \n - \n \n \n 373 \n \n \n - \n \n \n 373 \n \n \n \n \n Acquisition of NCI net without change of control \n \n \n - \n \n \n (196) \n \n \n - \n \n \n (196) \n \n \n (28) \n \n \n (224) \n \n \n \n \n Balance as at 31 December 2025 \n \n \n 19,932 \n \n \n 23,594 \n \n \n - \n \n \n 43,526 \n \n \n 29 \n \n \n 43,555 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share \n \n \n and loss \n \n \n Total \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n capital \n \n \n account \n \n \n equity \n \n \n \n \n Company \n \n \n \n \n \n \n \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Balance as at 1 January 2024 \n \n \n \n \n \n \n \n \n \n \n \n 19,384 \n \n \n (5,338) \n \n \n 14,046 \n \n \n \n \n Profit for the year \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n 1,815 \n \n \n 1,815 \n \n \n \n \n Transactions with owners \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Dividends declared (see note 29) \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n (337) \n \n \n (337) \n \n \n \n \n Scrip dividend shares (see note 29) \n \n \n \n \n \n \n \n \n \n \n \n 193 \n \n \n (193) \n \n \n - \n \n \n \n \n Share options exercised (see note 29) \n \n \n \n \n \n \n \n \n \n \n \n 49 \n \n \n - \n \n \n 49 \n \n \n \n \n Share-based payment expense (see notes 16 and 29) \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n 196 \n \n \n 196 \n \n \n \n \n Balance as at 31 December 2024 \n \n \n \n \n \n \n \n \n \n \n \n 19,626 \n \n \n (3,857) \n \n \n 15,769 \n \n \n \n \n Profit for the year \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n 1,128 \n \n \n 1,128 \n \n \n \n \n Transaction with owners \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Dividend declared (see note 29) \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n (504) \n \n \n (504) \n \n \n \n \n Scrip dividend shares (see note 29) \n \n \n \n \n \n \n \n \n \n \n \n 306 \n \n \n (306) \n \n \n - \n \n \n \n \n Share options exercised (see note 29) \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share-based payment expense (see notes 16 and 29) \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n 373 \n \n \n 373 \n \n \n \n \n Balance as at 31 December 2025 \n \n \n \n \n \n \n \n \n \n \n \n 19,932 \n \n \n (3,166) \n \n \n 16,766 \n \n \n \n \n Consolidated Statement of Cash Flows \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n Reconciliation of profit before taxation to operating cash flows \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n 7,336 \n \n \n 9,932 \n \n \n \n \n Adjustments for: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Depreciation \n \n \n 22 \n \n \n 879 \n \n \n 949 \n \n \n \n \n Amortisation of intangibles \n \n \n 23 \n \n \n 647 \n \n \n 340 \n \n \n \n \n Impairment of loans and advances to customers \n \n \n 13 \n \n \n 3,335 \n \n \n 1,752 \n \n \n \n \n Net interest income \n \n \n \n \n \n (37,495) \n \n \n (35,614) \n \n \n \n \n Realised gains on debt securities \n \n \n \n \n \n (2,561) \n \n \n (4,266) \n \n \n \n \n RSU expense taken to reserves \n \n \n \n \n \n 373 \n \n \n 196 \n \n \n \n \n Share of profit of Equity Accounted Investees \n \n \n \n \n \n (87) \n \n \n (119) \n \n \n \n \n Lease interest \n \n \n \n \n \n 191 \n \n \n 132 \n \n \n \n \n Pension charge included in personnel expenses \n \n \n 28 \n \n \n 1 \n \n \n 8 \n \n \n \n \n Gain on financial instruments \n \n \n 19 \n \n \n (35) \n \n \n (18) \n \n \n \n \n \n \n \n \n \n \n (27,416) \n \n \n (26,708) \n \n \n \n \n Changes in: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other receivables \n \n \n 21 \n \n \n (14,217) \n \n \n 915 \n \n \n \n \n Creditors and accrued charges \n \n \n 25 \n \n \n 1,680 \n \n \n (5,628) \n \n \n \n \n Net cash flow from trading activities \n \n \n \n \n \n (39,953) \n \n \n (31,421) \n \n \n \n \n Changes in: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Loans and advances to customers \n \n \n 20 \n \n \n (42,856) \n \n \n (13,691) \n \n \n \n \n Deposits from customers \n \n \n 24 \n \n \n 45,855 \n \n \n 16,818 \n \n \n \n \n Pension contribution \n \n \n 28 \n \n \n (85) \n \n \n (57) \n \n \n \n \n Cash used in operating activities \n \n \n \n \n \n (37,039) \n \n \n (28,351) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n CASH FLOW STATEMENT \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash from operating activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash used in operating activities \n \n \n \n \n \n (37,039) \n \n \n (28,351) \n \n \n \n \n Interest received \n \n \n \n \n \n 62,915 \n \n \n 58,164 \n \n \n \n \n Interest paid \n \n \n \n \n \n (19,971) \n \n \n (22,389) \n \n \n \n \n Income taxes paid \n \n \n \n \n \n (582) \n \n \n (1,095) \n \n \n \n \n Net cash from operating activities \n \n \n \n \n \n 5,323 \n \n \n 6,329 \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Acquisition of property, plant and equipment \n \n \n 22 \n \n \n (844) \n \n \n (228) \n \n \n \n \n Sale proceeds from disposal of property, plant and equipment \n \n \n 22 \n \n \n 582 \n \n \n - \n \n \n \n \n Acquisition of intangible assets \n \n \n 23 \n \n \n (421) \n \n \n (1,373) \n \n \n \n \n Sale proceeds from disposal of intangible assets \n \n \n 23 \n \n \n 26 \n \n \n - \n \n \n \n \n Acquisition of a subsidiary net of cash acquired \n \n \n 26 \n \n \n (129) \n \n \n - \n \n \n \n \n Purchase of debt securities \n \n \n \n \n \n (3,040) \n \n \n (860) \n \n \n \n \n Settlement of contingent consideration on acquisition of subsidiary \n \n \n 6(ii),26 \n \n \n - \n \n \n (20) \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n (3,826) \n \n \n (2,481) \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Receipt of loan notes \n \n \n 27 \n \n \n 7,603 \n \n \n 5,975 \n \n \n \n \n Acquisition of non-controlling interest \n \n \n 32 \n \n \n (206) \n \n \n (5,000) \n \n \n \n \n Payment of lease liabilities \n \n \n 37 \n \n \n (279) \n \n \n (443) \n \n \n \n \n Dividend paid \n \n \n 29 \n \n \n (504) \n \n \n (337) \n \n \n \n \n Proceeds from issue of share \n \n \n 29 \n \n \n - \n \n \n 49 \n \n \n \n \n Net cash from financing activities \n \n \n \n \n \n 6,614 \n \n \n 244 \n \n \n \n \n Net increase / (decrease) in cash and cash equivalents \n \n \n \n \n \n 8,111 \n \n \n 4,092 \n \n \n \n \n Cash and cash equivalents at 1 January \n \n \n \n \n \n 16,199 \n \n \n 12,107 \n \n \n \n \n Cash and cash equivalents at 31 December \n \n \n \n \n \n 24,310 \n \n \n 16,199 \n \n \n \n \n Company Statement of Cash Flows \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n £000 \n \n \n £000 \n \n \n \n \n Reconciliation of profit before taxation to operating cash flows \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n 1,128 \n \n \n 1,815 \n \n \n \n \n Adjustments for: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Depreciation \n \n \n 22 \n \n \n 119 \n \n \n 128 \n \n \n \n \n Amortisation \n \n \n 23 \n \n \n 264 \n \n \n 2 \n \n \n \n \n Interest income \n \n \n \n \n \n (1,069) \n \n \n (998) \n \n \n \n \n RSU expense taken to reserves \n \n \n \n \n \n 373 \n \n \n 196 \n \n \n \n \n Dividend income \n \n \n \n \n \n (125) \n \n \n (450) \n \n \n \n \n \n \n \n \n \n \n 690 \n \n \n 693 \n \n \n \n \n Changes in: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Amounts due from group undertakings \n \n \n 35 \n \n \n (667) \n \n \n (3,727) \n \n \n \n \n Trade and other receivables \n \n \n 21 \n \n \n 59 \n \n \n (7) \n \n \n \n \n Creditors and accrued charges \n \n \n 25 \n \n \n (444) \n \n \n 1,206 \n \n \n \n \n Amounts due to Group undertakings \n \n \n \n \n \n - \n \n \n (608) \n \n \n \n \n Cash used in operating activities \n \n \n \n \n \n (362) \n \n \n (2,443) \n \n \n \n \n CASH FLOW STATEMENT \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash from operating activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash used in operating activities \n \n \n \n \n \n (362) \n \n \n (2,443) \n \n \n \n \n Interest received \n \n \n \n \n \n 1,069 \n \n \n 998 \n \n \n \n \n Dividends received \n \n \n \n \n \n 125 \n \n \n 450 \n \n \n \n \n Net cash from / (used in) operating activities \n \n \n \n \n \n 832 \n \n \n (995) \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Acquisition of property, plant and equipment \n \n \n 22 \n \n \n (697) \n \n \n (76) \n \n \n \n \n Acquisition of intangible assets \n \n \n 23 \n \n \n (26) \n \n \n (1,123) \n \n \n \n \n Investment in group undertakings \n \n \n \n \n \n - \n \n \n (3,000) \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n (723) \n \n \n (4,199) \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Proceeds from issue of loan notes \n \n \n 27 \n \n \n 7,603 \n \n \n 5,975 \n \n \n \n \n Payment of finance lease liabilities \n \n \n 37 \n \n \n (152) \n \n \n (148) \n \n \n \n \n Proceeds from issue of shares \n \n \n 29 \n \n \n - \n \n \n 49 \n \n \n \n \n Dividend paid \n \n \n 29 \n \n \n (504) \n \n \n (337) \n \n \n \n \n Net cash from financing activities \n \n \n \n \n \n 6,947 \n \n \n 5,539 \n \n \n \n \n Net increase in cash and cash equivalents \n \n \n \n \n \n 7,056 \n \n \n 345 \n \n \n \n \n Cash and cash equivalents at 1 January \n \n \n \n \n \n 718 \n \n \n 373 \n \n \n \n \n Cash and cash equivalents at 31 December \n \n \n \n \n \n 7,774 \n \n \n 718 \n \n \n \n \n Notes to the Consolidated and Company Financial Statements \n For the year ended 31 December 2025 \n 1. Reporting entity \n Manx Financial Group PLC (\"Company\") is a company incorporated in the Isle of Man. The Company's registered office is at Clarendon House, Victoria Street, Douglas, Isle of Man, IM1 2LN. The consolidated financial statements of the Company for the year ended 31 December 2025 comprise the Company and its subsidiaries (\"Group\") including Conister Bank Limited (the \"Bank\"). The Group is primarily involved in the provision of financial services. \n The Company's financial statements are the separate financial statements of the Company. \n 2. Basis of accounting \n The consolidated and the separate financial statements of the Company have been prepared in accordance with international accounting standards in accordance with UK-adopted international accounting standards (\"UK-adopted IFRS\" or \"IFRSs\"), on a going concern basis as disclosed in the Directors' Report. \n 3. Functional and presentation currency \n These financial statements are presented in pounds sterling, which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated. All subsidiaries of the Group have pounds sterling as their functional currency. \n 4. Use of judgements and estimates \n The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. \n Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. \n Assumptions and estimation uncertainties \n Information about assumptions and estimation uncertainties at year-end that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is included in the following notes: \n §  Note 45(G)(vi) and Note 7(A) - key assumptions of Expected Credit Loss (\"ECL\") allowance for loans and advances to customers and assessment of impairment allowances where loans are in default or arrears. \n 5. Financial instruments - Classification \n For description of how the Group classifies financial assets and liabilities, see note 45(G)(ii). \n The following table provides reconciliation between line items in the statement of financial position and categories of financial instruments. \n \n \n \n \n   \n \n \n   \n \n \n FVOCI - \n \n \n   \n \n \n Total \n \n \n \n \n   \n \n \n Measured \n \n \n debt \n \n \n Amortised \n \n \n carrying \n \n \n \n \n Group \n \n \n at FVTPL \n \n \n instruments \n \n \n cost \n \n \n amount \n \n \n \n \n 31 December 2025 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Cash and cash equivalents \n \n \n - \n \n \n - \n \n \n 24,310 \n \n \n 24,310 \n \n \n \n \n Debt securities \n \n \n - \n \n \n 84,912 \n \n \n - \n \n \n 84,912 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 188 \n \n \n - \n \n \n - \n \n \n 188 \n \n \n \n \n Loans and advances to customers \n \n \n - \n \n \n - \n \n \n 407,872 \n \n \n 407,872 \n \n \n \n \n Trade and other receivables \n \n \n - \n \n \n - \n \n \n 21,526 \n \n \n 21,526 \n \n \n \n \n Total financial assets \n \n \n 188 \n \n \n 84,912 \n \n \n 453,708 \n \n \n 538,808 \n \n \n \n \n Deposits from customers \n \n \n - \n \n \n - \n \n \n 452,461 \n \n \n 452,461 \n \n \n \n \n Creditor and accrued charges \n \n \n - \n \n \n - \n \n \n 11,511 \n \n \n 11,511 \n \n \n \n \n Contingent consideration \n \n \n 590 \n \n \n - \n \n \n - \n \n \n 590 \n \n \n \n \n Loan notes \n \n \n - \n \n \n - \n \n \n 52,895 \n \n \n 52,895 \n \n \n \n \n Total financial liabilities \n \n \n 590 \n \n \n - \n \n \n 516,867 \n \n \n 517,457 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n FVOCI - \n \n \n \n \n \n Total \n \n \n \n \n \n \n \n Designated \n \n \n debt \n \n \n Amortised \n \n \n carrying \n \n \n \n \n Group \n \n \n as at FVTPL \n \n \n instruments \n \n \n cost \n \n \n amount \n \n \n \n \n 31 December 2024 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Cash and cash equivalents \n \n \n - \n \n \n - \n \n \n 16,199 \n \n \n 16,199 \n \n \n \n \n Debt securities \n \n \n - \n \n \n 79,140 \n \n \n - \n \n \n 79,140 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 154 \n \n \n - \n \n \n - \n \n \n 154 \n \n \n \n \n Loans and advances to customers \n \n \n - \n \n \n - \n \n \n 372,358 \n \n \n 372,358 \n \n \n \n \n Trade and other receivables \n \n \n - \n \n \n - \n \n \n 7,312 \n \n \n 7,312 \n \n \n \n \n Total financial assets \n \n \n 154 \n \n \n 79,140 \n \n \n 395,869 \n \n \n 475,163 \n \n \n \n \n Deposits from customers \n \n \n - \n \n \n - \n \n \n 405,166 \n \n \n 405,166 \n \n \n \n \n Creditor and accrued charges \n \n \n - \n \n \n - \n \n \n 9,679 \n \n \n 9,679 \n \n \n \n \n Loan notes \n \n \n - \n \n \n - \n \n \n 45,292 \n \n \n 45,292 \n \n \n \n \n Total financial liabilities \n \n \n - \n \n \n - \n \n \n 460,137 \n \n \n 460,137 \n \n \n \n \n At 31 December 2025 and 31 December 2024, all financial instruments, being cash and cash equivalents, trade and other receivables, amounts due from Group undertakings, investment in subsidiaries and subordinated loans were carried at amortised cost in the separate financial statements. \n 6. Financial instruments - Fair values \n For description of the Group's fair value measurement accounting policy, see note 44(G)(v). \n The following table shows the carrying amounts and fair values of Group financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. \n \n \n \n \n   \n \n \n Carrying \n amount \n \n \n   \n \n \n Fair value \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n \n \n   \n \n \n Total \n \n \n Level 1 \n \n \n Level 2 \n \n \n Level 3 \n \n \n Total \n \n \n \n \n 31 December 2025 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Financial assets measured at fair value \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Debt securities \n \n \n 84,912 \n \n \n - \n \n \n 84,912 \n \n \n - \n \n \n 84,912 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 188 \n \n \n - \n \n \n - \n \n \n 188 \n \n \n 188 \n \n \n \n \n   \n \n \n 85,100 \n \n \n - \n \n \n 84,912 \n \n \n 188 \n \n \n 85,100 \n \n \n \n \n Financial liabilities measured at fair value \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Contingent consideration \n \n \n 590 \n \n \n - \n \n \n - \n \n \n 590 \n \n \n 590 \n \n \n \n \n   \n \n \n 590 \n \n \n - \n \n \n - \n \n \n 590 \n \n \n 590 \n \n \n \n \n   \n \n \n \n \n \n \n \n Carrying \n amount \n \n \n \n \n \n Fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total \n \n \n Level 1 \n \n \n Level 2 \n \n \n Level 3 \n \n \n Total \n \n \n \n \n 31 December 2024 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Financial assets measured at fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Debt securities \n \n \n 79,140 \n \n \n - \n \n \n 79,140 \n \n \n - \n \n \n 79,140 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 154 \n \n \n - \n \n \n - \n \n \n 154 \n \n \n 154 \n \n \n \n \n \n \n \n 79,294 \n \n \n - \n \n \n 79,140 \n \n \n 154 \n \n \n 79,294 \n \n \n \n \n Financial liabilities measured at fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Contingent consideration \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n All Company financial assets and liabilities carrying amounts are a reasonable approximation of their fair value. \n Measurement of fair values \n i. Valuation techniques and significant unobservable inputs \n \n \n \n \n Type \n \n \n Valuation technique \n \n \n Significant unobservable inputs \n \n \n Inter-relationship between significant unobservable inputs and fair value measurement \n \n \n \n \n Debt securities \n \n \n Market comparison / discounted cash flow: The fair value is estimated considering a net present value calculated using discount rates derived from quoted yields of securities with similar maturity and credit rating that are traded in active markets. \n \n \n Not applicable. \n \n \n Not applicable. \n \n \n \n \n Equities at Fair Value Through Profit or Loss \n \n \n Net asset value \n \n \n Expected net cash flows derived from the entity \n \n \n The estimated fair value would increase (decrease) if the expected cash flows were higher (lower). \n \n \n \n \n Contingent consideration \n \n \n Discounted cash flows \n \n \n Expected cash net flows derived from the entity, discount rates \n \n \n The estimated fair value would increase (decrease) if forecast earnings or revenue were higher (lower). \n \n \n \n \n ii. Level 3 recurring fair values \n Reconciliation of Level 3 fair values \n The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values. \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n \n \n \n £000 \n \n \n £000 \n \n \n \n \n Balance at 1 January \n \n \n 154 \n \n \n 158 \n \n \n \n \n Acquisition of a subsidiary \n \n \n 568 \n \n \n - \n \n \n \n \n Finance costs \n \n \n 22 \n \n \n - \n \n \n \n \n Net change in fair value (unrealised) \n \n \n 34 \n \n \n 16 \n \n \n \n \n \n \n \n 624 \n \n \n 174 \n \n \n \n \n Payment (note 26) \n \n \n - \n \n \n (20) \n \n \n \n \n Balance at 31 December \n \n \n 778 \n \n \n 154 \n \n \n \n \n Sensitivity analysis \n For the fair value of contingent consideration, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant would have the following effects. \n \n \n \n \n   \n \n \n Profit or loss \n \n \n \n \n   \n \n \n Increase \n \n \n Decrease \n \n \n \n \n 31 December 2025 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Expected cash flows (10.0% movement) \n \n \n 59 \n \n \n 59 \n \n \n \n \n Risk-adjusted discount rate (1.0% movement) \n \n \n 7 \n \n \n 7 \n \n \n \n \n   \n \n \n \n \n \n \n \n Profit or loss \n \n \n \n \n \n \n \n Increase \n \n \n Decrease \n \n \n \n \n 31 December 2024 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Expected cash flows (10.0% movement) \n \n \n - \n \n \n - \n \n \n \n \n Risk-adjusted discount rate (1.0% movement) \n \n \n - \n \n \n - \n \n \n \n \n 7. Financial risk review \n Risk management \n This note presents information about the Group's exposure to financial risks and the Group's management of capital. For information on the Group and Company's financial risk management framework, see note 43. \n A. Group Credit risk \n For definition of credit risk and information on how credit risk is mitigated by the Group, see note 43. \n i. Credit quality analysis \n Loans and advances to customers \n Explanation of the terms 'Stage 1', 'Stage 2' and 'Stage 3' is included in note 44(G)(vi). \n An analysis of the credit risk on loans and advances to customers is as follows: \n \n \n \n \n   \n \n \n   \n \n \n 2025 \n \n \n   \n \n \n   \n \n \n \n \n \n 2024 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Stage 1 \n \n \n Stage 2 \n \n \n Stage 3 \n \n \n Total \n \n \n Stage 1 \n \n \n Stage 2 \n \n \n Stage 3 \n \n \n Total \n \n \n \n \n Group \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Grade A \n \n \n 366,957 \n \n \n - \n \n \n - \n \n \n 366,957 \n \n \n 327,561 \n \n \n 3,968 \n \n \n - \n \n \n 331,529 \n \n \n \n \n Grade B \n \n \n - \n \n \n 9,094 \n \n \n - \n \n \n 9,094 \n \n \n - \n \n \n 19,836 \n \n \n 5,932 \n \n \n 25,768 \n \n \n \n \n Grade C \n \n \n - \n \n \n - \n \n \n 54,713 \n \n \n 54,713 \n \n \n - \n \n \n 5 \n \n \n 35,268 \n \n \n 35,273 \n \n \n \n \n Gross value \n \n \n 366,957 \n \n \n 9,094 \n \n \n 54,713 \n \n \n 430,764 \n \n \n 327,561 \n \n \n 23,809 \n \n \n 41,200 \n \n \n 392,570 \n \n \n \n \n Allowance for impairment \n \n \n (2,216) \n \n \n (213) \n \n \n (20,463) \n \n \n (22,892) \n \n \n (688) \n \n \n (36) \n \n \n (19,488) \n \n \n (20,212) \n \n \n \n \n Carrying value \n \n \n 364,741 \n \n \n 8,881 \n \n \n 34,250 \n \n \n 407,872 \n \n \n 326,873 \n \n \n 23,773 \n \n \n 21,712 \n \n \n 372,358 \n \n \n \n \n Loans are graded A to C depending on the level of risk. Grade A relates to agreements with the lowest risk, Grade B with medium risk and Grade C relates to agreements with the highest of risk. \n The following table sets out information about the overdue status of loans and advances to customers in Stage 1, 2 and 3: \n \n \n \n \n \n \n \n   \n \n \n 2025 \n \n \n   \n \n \n   \n \n \n \n \n \n 2024 \n \n \n \n \n \n \n \n \n \n \n Group \n \n \n Stage 1 \n \n \n Stage 2 \n \n \n Stage 3 \n \n \n Total \n \n \n Stage 1 \n \n \n Stage 2 \n \n \n Stage 3 \n \n \n Total \n \n \n \n \n 31 December \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Current \n \n \n 348,383 \n \n \n - \n \n \n - \n \n \n 348,383 \n \n \n 314,542 \n \n \n - \n \n \n - \n \n \n 314,542 \n \n \n \n \n Overdue < 30 days \n \n \n 18,574 \n \n \n - \n \n \n - \n \n \n 18,574 \n \n \n 13,019 \n \n \n - \n \n \n - \n \n \n 13,019 \n \n \n \n \n Overdue > 30 days \n \n \n - \n \n \n 9,094 \n \n \n 54,713 \n \n \n 63,807 \n \n \n - \n \n \n 23,809 \n \n \n 41,200 \n \n \n 65,009 \n \n \n \n \n Gross value \n \n \n 366,957 \n \n \n 9,094 \n \n \n 54,713 \n \n \n 430,764 \n \n \n 327,561 \n \n \n 23,809 \n \n \n 41,200 \n \n \n 392,570 \n \n \n \n \n For Stage 3 loans and advances that are overdue for more than 90 days, the Group holds collateral value of £9,470,000 (2024: £11,982,000) representing security cover of 60% (2024: 66%). \n The contractual amount outstanding on financial assets that were written off during the reporting period and are still subject to enforcement activity are £nil (2024: £nil). \n Debt securities, cash and cash equivalents \n The following table sets out the credit quality of liquid assets: \n \n \n \n \n Group \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n £000 \n \n \n £000 \n \n \n \n \n Government bonds and treasury bills \n \n \n   \n \n \n \n \n \n \n \n Rated A to A+ \n \n \n 84,912 \n \n \n 79,140 \n \n \n \n \n Cash and cash equivalents \n \n \n   \n \n \n \n \n \n \n \n Rated A to A+ \n \n \n 24,310 \n \n \n 16,199 \n \n \n \n \n Trade and other receivables \n \n \n   \n \n \n \n \n \n \n \n Unrated \n \n \n 21,526 \n \n \n 7,312 \n \n \n \n \n \n \n \n 130,748 \n \n \n 102,651 \n \n \n \n \n The analysis has been based on Standard & Poor's ratings. The above debt securities, cash and cash equivalents and trade and other receivables are considered to be Stage 1 as there is no evidence of significant deterioration in credit quality and hence no material expected credit loss allowance is observed. \n ii. Collateral and other credit enhancements \n The Group holds collateral in the form of the underlying assets (typically private and commercial vehicles, plant and machinery) to loan arrangements as security for HP, finances leases, vehicle stocking plans, block discounting, wholesale funding arrangements, integrated wholesale funding arrangements and secured commercial loan balances, which are sub-categories of loans and advances to customers. In addition, the Group will take debentures, mortgages, personal and corporate guarantees, fixed and floating charges on specific assets such as cash and shares. \n The terms of enforcing such security can only occur on default, and when realised can only be used to settle the amount of debt and related collection fees. On occasion the Bank may realise a surplus if the defaulting party loses title to the underlying security as part of enforcement. In addition, the commission share schemes have an element of capital indemnified. \n As at 31 December 2025, 32.5% of loans and advances had an element of capital indemnification (2024: 28.7%). At the time of granting credit within the sub-categories listed above, the loan balances due are secured over the underlying assets held as collateral. \n At the time of granting credit within the sub-categories listed above, the loan balances due are secured over the underlying assets held as collateral (see note 20 for further details). Collateral is valued at the time of borrowing, and is not individually valued at each reporting date but fair value groups of similar collateral are considered as part of the impairment testing model. \n For portfolios where the Group has never had a default in its history or has robust credit enhancements such as credit insurance or default indemnities for the entire portfolio, then no IFRS 9 provision is made. At 2025 year-end, 32.8% had such credit enhancements (2024: 31.0%). \n The following table sets out the principal types of collateral held against different types of financial assets. \n \n \n \n \n Group \n \n \n 2025 \n \n \n 2024 \n \n \n   \n \n \n \n \n % \n \n \n % \n \n \n Principal type of collateral held \n \n \n \n \n HP balances \n \n \n 100 \n \n \n 100 \n \n \n Property and equipment \n \n \n \n \n Finance lease balances \n \n \n 100 \n \n \n 100 \n \n \n Property and equipment \n \n \n \n \n Unsecured personal loans \n \n \n - \n \n \n - \n \n \n None \n \n \n \n \n Vehicle stocking plans \n \n \n 100 \n \n \n 100 \n \n \n Motor vehicles \n \n \n \n \n Wholesale funding arrangements \n \n \n 100 \n \n \n 100 \n \n \n Floating charges over corporate assets \n \n \n \n \n Block discounting \n \n \n 100 \n \n \n 100 \n \n \n Floating charges over corporate assets \n \n \n \n \n Secured commercial loans \n \n \n 100 \n \n \n 100 \n \n \n Floating charges over corporate assets \n \n \n \n \n Secured personal loans \n \n \n 100 \n \n \n 100 \n \n \n Property \n \n \n \n \n Government backed loans \n \n \n 70 - 100 \n \n \n 70 - 100 \n \n \n Government guarantee \n \n \n \n \n Property secured \n \n \n 100 \n \n \n 100 \n \n \n Property \n \n \n \n \n There have been no significant changes in the quality of collateral as a result of a deterioration or changes to the Group's collateral policies during the reporting period. \n iii. Amounts arising from ECL \n Inputs, assumptions and techniques used for estimating impairment \n See accounting policy in note 45(G)(vi). \n Significant increase in credit risk \n When determining whether the risk of default on a financial instrument has increased significantly since initial recognition, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical experience and expert credit assessment and including forward looking information. \n ▪        A Significant Increase in Credit Risk (\"SICR\") is always deemed to occur when the borrower is 30 days past due on its contractual payments. If the Group becomes aware ahead of this time of non-compliance or financial difficulties of the borrower, such as loss of employment, avoiding contact with the Group then a SICR has also deemed to occur. \n ▪        A receivable is always deemed to be in default and credit-impaired when the borrower is 90 days past due on its contractual payments or earlier if the Group becomes aware of severe financial difficulties such as bankruptcy, individual voluntary arrangements, abscond or disappearance, fraudulent activity or other similar events. \n Credit risk grades \n The Group allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of default and applying experienced credit judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of risk of default. These factors vary depending on the nature of the exposure and the type of borrower. \n Credit risk grades are defined and calibrated such that the risk of default occurring increases exponentially as the credit risk grade deteriorates. Loans are graded A to C depending on the level of risk. Grade A relates to agreements with the lowest risk, Grade B with medium risk and Grade C relates to agreements with the highest risk. \n Each exposure is allocated to a credit risk grade on initial recognition based on available information about the borrower. Exposures are subject to ongoing monitoring, which may result in an exposure being moved to a different credit risk grade. The monitoring typically involves the use of the following data: \n \n \n \n \n Corporate exposures \n \n \n Retail exposures \n \n \n All exposures \n \n \n \n \n Information obtained during periodic review of customer files - e.g. audited financial statements, management accounts, budgets and projections. Examples of areas of particular focus are: gross profit margins, financial leverage ratios, debt service coverage, compliance with covenants \n \n \n Internally collected data on customer behaviour - e.g. repayment behaviour \n \n \n Payment record - this includes overdue status as well as a range of variables about payment ratios \n \n \n \n \n Data from credit reference agencies \n \n \n Affordability matrix \n \n \n Requests for and granting of forbearance \n \n \n \n \n \n \n \n External data from credit reference agencies, including industry-standard credit scores \n \n \n Existing forecast changes in business, financial and economic conditions \n \n \n \n \n Definition of default \n The Group considers a financial asset to be in default when: \n ▪        the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); \n ▪        the borrower is more than 90 days past due on any material credit obligation to the Group; or \n ▪        it is becoming probable that the borrower will restructure the asset as a result of bankruptcy due to the borrower's inability to pay its credit obligations. \n In assessing whether a borrower is in default, the Group considers indicators that are: \n ▪        qualitative: e.g. breaches of covenant; \n ▪        quantitative: e.g. overdue status and non-payment by another obligation of the same Borrower to the Group; and \n ▪        based on data developed internally and obtained from external sources. \n Inputs into the assessment of whether a financial instrument is in default and their significance may vary over time to reflect changes in circumstances. The definition of default largely aligns with that applied by the Group for regulatory capital purposes. \n Incorporation of forward-looking information \n The Group incorporates forward looking information into the measurement of ECL. \n The Group has identified and documented key drivers of credit risk and credit losses within its financial instruments and using an analysis of historical data, has estimated the relationship between macroeconomic variables and credit risk and credit losses. The key drivers for credit risk for corporate, retail and wholesale portfolios include gross domestic product (GDP) growth, unemployment rates and interest rates. The Group estimates each key driver for credit risk over the active forecast period of three years. The table below lists the UK macroeconomic assumption used in the base scenarios over the three-year forecast period: \n \n \n \n \n 31 December 2025 \n \n \n 2026 \n \n \n 2027 \n \n \n 2028 \n \n \n \n \n GDP growth rate \n \n \n 1.4 \n \n \n 1.3 \n \n \n 1.1 \n \n \n \n \n Interest rates \n \n \n 3.7 \n \n \n 3.5 \n \n \n 3.5 \n \n \n \n \n Unemployment rate \n \n \n 5.4 \n \n \n 5.3 \n \n \n 5.1 \n \n \n \n \n   \n \n \n \n \n 31 December 2024 \n \n \n 2025 \n \n \n 2026 \n \n \n 2027 \n \n \n \n \n GDP growth rate \n \n \n 2.0 \n \n \n 1.0 \n \n \n 1.3 \n \n \n \n \n CPI inflation \n \n \n 4.2 \n \n \n 2.4 \n \n \n 1.8 \n \n \n \n \n Unemployment rate \n \n \n 4.8 \n \n \n 4.9 \n \n \n 4.9 \n \n \n \n \n Predicted relationships between the key indicators and default and loss rates on various portfolios of financial assets have been developed based on analysing historical data over the past 3 years. \n Changes to ECL assumptions from the prior year \n As of 31 December 2025, the Group has updated its economic projections utilised in the expected credit loss calculation, shifting from the 2024 figures. A key indicator - interest rates, has been added and was ultimately selected as a macroeconomic forward-looking adjustment instead of GDP which was used in prior year. This adjustment is prompted by a higher correlation between default rates and interest rates. These changes did not result in a material impact to the expected credit losses. \n iv. Concentration of credit risk \n Geographical \n Lending is restricted to individuals and entities with Isle of Man and UK addresses. \n Segmental \n The Bank is exposed to credit risk with regard to customer loan accounts, comprising HP and finance lease balances, unsecured personal loans, secured commercial loans, block discounting, vehicle stocking plan loans and wholesale funding agreements. In addition, the Bank lends via significant introducers into the UK. There was one introducer that accounted for more than 5% of the Bank's total lending portfolio at the end of 31 December 2025 (2024: one). Advances to a single distribution partner under IWFA, WFA and block discounting is restricted to 25% of the Bank's Large Exposure Capital Buffer (LECB) in line with FSA direction. \n B. Group Liquidity risk \n For the definition of liquidity risk and information on how liquidity risk is managed by the Group, see note 43. \n i. Exposure to liquidity risk \n The key measure used by the Bank for managing liquidity risk is the ratio of net liquid assets to deposits from customers and short-term funding. The Group aims to maintain the ratio at no less than 13.7% compared to FSA requirement of not less than 10%. For this purpose, net liquid assets includes cash and cash equivalents and investment-grade debt securities for which there is an active and liquid market. \n Details of the reported Group ratio of net liquid assets to deposits from customers at the reporting date and during the reporting year were as follows: \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n At 31 December \n \n \n 27.0% \n \n \n 24.0% \n \n \n \n \n Average for the year \n \n \n 22.0% \n \n \n 23.0% \n \n \n \n \n Maximum for the year \n \n \n 27.0% \n \n \n 27.0% \n \n \n \n \n Minimum for the year \n \n \n 19.0% \n \n \n 20.0% \n \n \n \n \n ii. Maturity analysis for financial liabilities and financial assets \n The table below shows the Group's financial liabilities classified by their earliest possible contractual maturity, on an undiscounted basis including interest due at the end of the deposit term. Based on historical data, the Group's expected actual cash flow from these items varies from this analysis due to the expected re-investment of maturing customer deposits. \n Residual contractual maturities of financial liabilities as at the reporting date (undiscounted): \n \n \n \n \n   \n \n \n Sight- \n \n \n >8 days \n \n \n >1 month \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n   \n \n \n   \n \n \n \n \n 31 December 2025 \n \n \n 8 days \n \n \n - 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n >5 years \n \n \n Total \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Deposits \n \n \n 19,438 \n \n \n 10,251 \n \n \n 40,163 \n \n \n 113,147 \n \n \n 219,970 \n \n \n 62,810 \n \n \n - \n \n \n - \n \n \n 465,779 \n \n \n \n \n Other liabilities \n \n \n 5,127 \n \n \n 715 \n \n \n 2,920 \n \n \n 8,443 \n \n \n 24,736 \n \n \n 21,079 \n \n \n 7,455 \n \n \n 308 \n \n \n 70,783 \n \n \n \n \n Total liabilities \n \n \n 24,565 \n \n \n 10,966 \n \n \n 43,083 \n \n \n 121,590 \n \n \n 244,706 \n \n \n 83,889 \n \n \n 7,455 \n \n \n 308 \n \n \n 536,562 \n \n \n \n \n   \n \n \n \n \n \n \n \n Sight- \n \n \n >8 days \n \n \n >1 month \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n \n \n \n \n \n \n \n \n 31 December 2024 \n \n \n 8 days \n \n \n - 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n >5 years \n \n \n Total \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Deposits \n \n \n 9,016 \n \n \n 13,010 \n \n \n 44,111 \n \n \n 97,353 \n \n \n 166,118 \n \n \n 79,123 \n \n \n 16,561 \n \n \n - \n \n \n 425,292 \n \n \n \n \n Other liabilities \n \n \n 71 \n \n \n 204 \n \n \n 8,073 \n \n \n 4,246 \n \n \n 13,657 \n \n \n 24,402 \n \n \n 9,719 \n \n \n 340 \n \n \n 60,712 \n \n \n \n \n Total liabilities \n \n \n 9,087 \n \n \n 13,214 \n \n \n 52,184 \n \n \n 101,599 \n \n \n 179,775 \n \n \n 103,525 \n \n \n 26,280 \n \n \n 340 \n \n \n 486,004 \n \n \n \n \n The table below shows the carrying amount of the Group's assets and liabilities by their expected maturities. \n Expected maturity of assets and liabilities at the reporting date (discounted): \n \n \n \n \n   \n \n \n Sight- \n \n \n >8 days \n \n \n >1 month \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n   \n \n \n   \n \n \n \n \n 31 December 2025 \n \n \n 8 days \n \n \n - 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n >5 years \n \n \n Total \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash \n \n \n 24,310 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 24,310 \n \n \n \n \n Debt securities \n \n \n 2,000 \n \n \n 7,984 \n \n \n 24,835 \n \n \n 41,384 \n \n \n - \n \n \n 1,532 \n \n \n 6,165 \n \n \n 1,012 \n \n \n 84,912 \n \n \n \n \n Loans and advances \n \n \n 28,783 \n \n \n 29,017 \n \n \n 42,519 \n \n \n 56,655 \n \n \n 78,664 \n \n \n 135,357 \n \n \n 34,939 \n \n \n 1,938 \n \n \n 407,872 \n \n \n \n \n Other assets \n \n \n 188 \n \n \n - \n \n \n - \n \n \n - \n \n \n 23,612 \n \n \n - \n \n \n 3,730 \n \n \n 16,696 \n \n \n 44,226 \n \n \n \n \n Total assets \n \n \n 55,281 \n \n \n 37,001 \n \n \n 67,354 \n \n \n 98,039 \n \n \n 102,276 \n \n \n 136,889 \n \n \n 44,834 \n \n \n 19,646 \n \n \n 561,320 \n \n \n \n \n Liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Deposits \n \n \n 19,040 \n \n \n 9,173 \n \n \n 37,366 \n \n \n 109,664 \n \n \n 216,426 \n \n \n 60,792 \n \n \n - \n \n \n - \n \n \n 452,461 \n \n \n \n \n Other liabilities \n \n \n 5,090 \n \n \n 490 \n \n \n 2,350 \n \n \n 7,700 \n \n \n 23,608 \n \n \n 18,668 \n \n \n 7,090 \n \n \n 308 \n \n \n 65,304 \n \n \n \n \n Total liabilities \n \n \n 24,130 \n \n \n 9,663 \n \n \n 39,716 \n \n \n 117,364 \n \n \n 240,034 \n \n \n 79,460 \n \n \n 7,090 \n \n \n 308 \n \n \n 517,765 \n \n \n \n \n   \n \n \n \n \n \n \n \n Sight- \n \n \n >8 days \n \n \n >1 month \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n \n \n \n \n \n \n \n \n 31 December 2024 \n \n \n 8 days \n \n \n - 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n >5 years \n \n \n Total \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash \n \n \n 16,199 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 16,199 \n \n \n \n \n Debt securities \n \n \n 4,997 \n \n \n 16,461 \n \n \n 47,624 \n \n \n - \n \n \n 4,993 \n \n \n - \n \n \n 5,065 \n \n \n - \n \n \n 79,140 \n \n \n \n \n Loans and advances \n \n \n 21,559 \n \n \n 35,642 \n \n \n 45,541 \n \n \n 48,415 \n \n \n 57,042 \n \n \n 125,667 \n \n \n 37,316 \n \n \n 1,176 \n \n \n 372,358 \n \n \n \n \n Other assets \n \n \n 154 \n \n \n - \n \n \n - \n \n \n - \n \n \n 9,063 \n \n \n - \n \n \n 4,682 \n \n \n 16,194 \n \n \n 30,093 \n \n \n \n \n Total assets \n \n \n 42,909 \n \n \n 52,103 \n \n \n 93,165 \n \n \n 48,415 \n \n \n 71,098 \n \n \n 125,667 \n \n \n 47,063 \n \n \n 17,370 \n \n \n 497,790 \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deposits \n \n \n 8,639 \n \n \n 11,993 \n \n \n 41,477 \n \n \n 93,949 \n \n \n 161,428 \n \n \n 72,352 \n \n \n 15,328 \n \n \n - \n \n \n 405,166 \n \n \n \n \n Other liabilities \n \n \n - \n \n \n - \n \n \n 7,600 \n \n \n 3,597 \n \n \n 12,427 \n \n \n 22,002 \n \n \n 9,345 \n \n \n 340 \n \n \n 55,311 \n \n \n \n \n Total liabilities \n \n \n 8,639 \n \n \n 11,993 \n \n \n 49,077 \n \n \n 97,546 \n \n \n 173,855 \n \n \n 94,354 \n \n \n 24,673 \n \n \n 340 \n \n \n 460,477 \n \n \n \n \n Company \n All the Company's assets (excluding Investment in subsidiaries, Property, plant and equipment, Intangible assets, Investment in subsidiaries and Subordinated loans) are due within one year. The Subordinated loans are due in more than five years. \n All the Company's creditors (excluding Loan notes) are due within one year. The maturity profile indicates that £29 million of loan notes are due within one year, £17 million within 3 years, £2 million within 4 years and £5 million within five years. \n iii. Liquidity reserves \n The following table sets out the components of the Group's liquidity reserves: \n \n \n \n \n \n \n \n 2025 \n \n \n 2025 \n \n \n 2024 \n \n \n 2024 \n \n \n \n \n \n \n \n Carrying \n \n \n Fair \n \n \n Carrying \n \n \n Fair \n \n \n \n \n \n \n \n amount \n \n \n value \n \n \n amount \n \n \n value \n \n \n \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Balances with other banks \n \n \n 24,310 \n \n \n 24,310 \n \n \n 16,199 \n \n \n 16,199 \n \n \n \n \n Unencumbered debt securities \n \n \n 84,912 \n \n \n 84,912 \n \n \n 79,140 \n \n \n 79,140 \n \n \n \n \n Total liquidity reserves \n \n \n 109,222 \n \n \n 109,222 \n \n \n 95,339 \n \n \n 95,339 \n \n \n \n \n C. Group Market risk \n For the definition of market risk and information on how the Group manages the market risks of trading and non ‑ trading portfolios, see note 43. \n The following table sets out the allocation of assets and liabilities subject to market risk between trading and non- trading portfolios: \n \n \n \n \n   \n \n \n   \n \n \n Market risk measure \n \n \n   \n \n \n \n \n   \n \n \n Carrying \n \n \n Trading \n \n \n Non-trading \n \n \n \n \n 31 December 2025 \n \n \n amount \n \n \n portfolios \n \n \n portfolios \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets subject to market risk \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Debt securities \n \n \n 84,912 \n \n \n - \n \n \n 84,912 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 188 \n \n \n - \n \n \n 188 \n \n \n \n \n Total \n \n \n 85,100 \n \n \n - \n \n \n 85,100 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Market risk measure \n \n \n \n \n \n \n \n \n \n \n Carrying \n \n \n Trading \n \n \n Non-trading \n \n \n \n \n 31 December 2024 \n \n \n amount \n \n \n portfolios \n \n \n portfolios \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets subject to market risk \n \n \n \n \n \n \n \n \n \n \n \n \n \n Debt securities \n \n \n 79,140 \n \n \n - \n \n \n 79,140 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 154 \n \n \n - \n \n \n 154 \n \n \n \n \n Total \n \n \n 79,294 \n \n \n - \n \n \n 79,294 \n \n \n \n \n i. Exposure to interest rate risk \n The following tables present the interest rate mismatch position between assets and liabilities over the respective maturity dates. The maturity dates are presented on a worst-case basis, with assets being recorded at their latest maturity and deposits from customers at their earliest. \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n >5 years \n £000 \n \n \n Non- \n Interest \n Bearing \n £000 \n \n \n Total \n £000 \n \n \n \n \n   \n \n \n Sight- \n \n \n >1 month \n \n \n \n \n   \n \n \n 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n \n \n 31 December 2025 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash & cash equivalents \n \n \n 24,310 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 24,310 \n \n \n \n \n Debt securities \n \n \n 9,984 \n \n \n 24,835 \n \n \n 41,384 \n \n \n - \n \n \n 1,532 \n \n \n 6,165 \n \n \n 1,012 \n \n \n - \n \n \n 84,912 \n \n \n \n \n Loans and advances to customers \n \n \n 57,800 \n \n \n 42,519 \n \n \n 56,655 \n \n \n 78,664 \n \n \n 135,357 \n \n \n 34,939 \n \n \n 1,938 \n \n \n - \n \n \n 407,872 \n \n \n \n \n Other assets \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 44,226 \n \n \n 44,226 \n \n \n \n \n Total assets \n \n \n 92,094 \n \n \n 67,354 \n \n \n 98,039 \n \n \n 78,664 \n \n \n 136,889 \n \n \n 41,104 \n \n \n 2,950 \n \n \n 44,226 \n \n \n 561,320 \n \n \n \n \n Liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Deposits from customers \n \n \n 28,213 \n \n \n 37,366 \n \n \n 109,664 \n \n \n 216,426 \n \n \n 60,792 \n \n \n - \n \n \n - \n \n \n - \n \n \n 452,461 \n \n \n \n \n Other liabilities \n \n \n 5,580 \n \n \n 2,350 \n \n \n 7,700 \n \n \n 14,300 \n \n \n 18,668 \n \n \n 7,090 \n \n \n 308 \n \n \n 9,308 \n \n \n 65,304 \n \n \n \n \n Total liabilities \n \n \n 33,793 \n \n \n 39,716 \n \n \n 117,364 \n \n \n 230,726 \n \n \n 79,460 \n \n \n 7,090 \n \n \n 308 \n \n \n 9,308 \n \n \n 517,765 \n \n \n \n \n Interest rate sensitivity gap \n \n \n 58,301 \n \n \n 27,638 \n \n \n (19,325) \n \n \n (152,062) \n \n \n 57,429 \n \n \n 34,014 \n \n \n 2,642 \n \n \n 34,918 \n \n \n 43,555 \n \n \n \n \n Cumulative \n \n \n 58,301 \n \n \n 85,939 \n \n \n 66,614 \n \n \n (85,448) \n \n \n (28,019) \n \n \n 5,995 \n \n \n 8,637 \n \n \n 43,555 \n \n \n 43,555 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non- \n \n \n \n \n \n \n \n \n \n \n Sight- \n \n \n >1 month \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n 31 December 2024 \n \n \n 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n >5 years \n \n \n Bearing \n \n \n Total \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash & cash equivalents \n \n \n 16,199 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 16,199 \n \n \n \n \n Debt securities \n \n \n 21,458 \n \n \n 47,624 \n \n \n - \n \n \n 4,993 \n \n \n - \n \n \n 5,065 \n \n \n - \n \n \n - \n \n \n 79,140 \n \n \n \n \n Loans and advances to customers \n \n \n 57,201 \n \n \n 45,541 \n \n \n 48,415 \n \n \n 57,042 \n \n \n 125,667 \n \n \n 37,316 \n \n \n 1,176 \n \n \n - \n \n \n 372,358 \n \n \n \n \n Other assets \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 30,093 \n \n \n 30,093 \n \n \n \n \n Total assets \n \n \n 94,858 \n \n \n 93,165 \n \n \n 48,415 \n \n \n 62,035 \n \n \n 125,667 \n \n \n 42,381 \n \n \n 1,176 \n \n \n 30,093 \n \n \n 497,790 \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deposits from customers \n \n \n 20,632 \n \n \n 41,477 \n \n \n 93,949 \n \n \n 161,428 \n \n \n 72,352 \n \n \n 15,328 \n \n \n - \n \n \n - \n \n \n 405,166 \n \n \n \n \n Other liabilities \n \n \n - \n \n \n 7,600 \n \n \n 3,597 \n \n \n 4,540 \n \n \n 22,002 \n \n \n 9,345 \n \n \n 46 \n \n \n 8,181 \n \n \n 55,311 \n \n \n \n \n Total liabilities \n \n \n 20,632 \n \n \n 49,077 \n \n \n 97,546 \n \n \n 165,968 \n \n \n 94,354 \n \n \n 24,673 \n \n \n 46 \n \n \n 8,181 \n \n \n 460,477 \n \n \n \n \n Interest rate sensitivity gap \n \n \n 74,226 \n \n \n 44,088 \n \n \n (49,131) \n \n \n (103,933) \n \n \n 31,313 \n \n \n 17,708 \n \n \n 1,130 \n \n \n 21,912 \n \n \n 37,313 \n \n \n \n \n Cumulative \n \n \n 74,226 \n \n \n 118,314 \n \n \n 69,183 \n \n \n (34,750) \n \n \n (3,437) \n \n \n 14,271 \n \n \n 15,401 \n \n \n 37,313 \n \n \n 37,313 \n \n \n \n \n The Bank monitors the impact of changes in interest rates on interest rate mismatch positions using a method consistent with the FSA required reporting standard. The methodology applies weightings to the net interest rate sensitivity gap in order to quantify the impact of an adverse change in interest rates of 2% per annum (2024: 2.0%). The following tables set out the estimated total impact of such a change based on the mismatch at the reporting date: \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n Non- \n \n \n   \n \n \n \n \n   \n \n \n Sight- \n \n \n >1 month \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n   \n \n \n Interest \n \n \n   \n \n \n \n \n   \n \n \n 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n >5 years \n \n \n Bearing \n \n \n Total \n \n \n \n \n 31 December 2025 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Interest rate sensitivity gap \n \n \n 58,301 \n \n \n 27,638 \n \n \n (19,325) \n \n \n (152,062) \n \n \n 57,429 \n \n \n 34,014 \n \n \n 2,642 \n \n \n 34,918 \n \n \n 43,555 \n \n \n \n \n Weighting \n \n \n - \n \n \n 0.003 \n \n \n 0.007 \n \n \n 0.014 \n \n \n 0.027 \n \n \n 0.054 \n \n \n 0.115 \n \n \n - \n \n \n - \n \n \n \n \n \n \n \n - \n \n \n 83 \n \n \n (135) \n \n \n (2,129) \n \n \n 1,551 \n \n \n 1,837 \n \n \n 304 \n \n \n - \n \n \n 1,511 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non- \n \n \n \n \n \n \n \n \n \n \n Sight- \n \n \n >1 month \n \n \n >3 months \n \n \n >6 months \n \n \n >1 year \n \n \n >3 years \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n 31 December 2024 \n \n \n 1 month \n \n \n - 3 months \n \n \n - 6 months \n \n \n - 1 year \n \n \n - 3 years \n \n \n - 5 years \n \n \n >5 years \n \n \n Bearing \n \n \n Total \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n Interest rate sensitivity gap \n \n \n 74,226 \n \n \n 44,088 \n \n \n (49,131) \n \n \n (103,933) \n \n \n 31,313 \n \n \n 17,708 \n \n \n 1,130 \n \n \n 21,912 \n \n \n 37,313 \n \n \n \n \n Weighting \n \n \n - \n \n \n 0.003 \n \n \n 0.007 \n \n \n 0.014 \n \n \n 0.027 \n \n \n 0.054 \n \n \n 0.115 \n \n \n - \n \n \n - \n \n \n \n \n \n \n \n - \n \n \n 132 \n \n \n (344) \n \n \n (1,455) \n \n \n 845 \n \n \n 956 \n \n \n 130 \n \n \n - \n \n \n 264 \n \n \n \n \n The interest rate profile of the Group's interest-bearing financial instruments as reported to the management of the Group is as follows; \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n £000 \n \n \n £000 \n \n \n \n \n Fixed-rate instruments \n \n \n   \n \n \n \n \n \n \n \n Financial assets \n \n \n 517,094 \n \n \n 467,697 \n \n \n \n \n Financial liabilities \n \n \n 508,457 \n \n \n 452,296 \n \n \n \n \n \n \n \n 8,637 \n \n \n 15,401 \n \n \n \n \n The Group does not account for any fixed-rate financial assets or liabilities at FVTPL. A change of 1% in interest rates would have increased or decreased equity by £441,000 (2024: £306,000). This analysis assumes that all other variables remain constant. \n D. Group Capital Management \n i. Regulatory capital \n MFG and its subsidiaries maintain sufficient capital stock to cover risks inherent in their principal operating activities. The lead regulator of the Group's wholly owned subsidiary, the Bank, is the FSA. The FSA sets and monitors capital requirements for the Bank. The Bank maintains a capital base to meet the capital adequacy requirements of the FSA. There have been no changes to its approach to capital management from the prior year. \n The Bank's regulatory capital consists of the following elements. \n ▪        Common Equity Tier 1 (\"CET1\") capital, which includes ordinary share capital, retained earnings and reserves after adjustment for deductions for goodwill, intangible assets and intercompany receivable. \n ▪        Tier 2 capital, which includes collective impairment allowances up to the level set by the FSA, subordinated loan liabilities and gains on financial instruments carried at fair value. \n The Bank's Tier 1 and Total Capital regulatory ratios stood at 11.7% (2024: 12.50%) and 15.80% (2024: 17.00%) respectively as at 31 December 2025. The Bank complied with all capital requirements externally imposed on it in the year with minimum Tier 1 and Overall Capital ratio of 8.52% (2024: 8.73%) and 15.10% (2024: 15.29%) respectively. \n The FSA's approach to the measurement of capital adequacy is primarily based on monitoring the relationship of the capital resources requirement to available capital resources. The FSA sets individual capital guidance (\"ICG\") for the Bank in excess of the minimum capital resources requirement. A key input to the ICG setting process is the Bank's internal capital adequacy assessment process (\"ICAAP\"). \n The Bank is also regulated by the FCA in the UK for credit and brokerage related activities. \n Further details of the Bank's management of capital are described in the Risk Management Report on page 15. \n ii. Capital allocation \n Management uses regulatory capital ratios to monitor its capital base. The allocation of capital between specific operations and activities is, to a large extent, driven by optimisation of the return achieved on the capital allocated. The amount of capital allocated to each operation or activity is based primarily on regulatory capital requirements. \n E. Company Financial Risk Review \n i. Credit risk \n The Company is exposed to credit risk primarily from deposits with banks and from its financing activities of Group entities. These balances include Trade and other receivables, Amounts due from Group undertakings, Investment in subsidiaries and Subordinated loans. Cash balances are held with institutions with a credit rating of A to A+. The Group's primary credit exposure is to the Bank and Payment Assist Ltd. The Investment in subsidiary and subordinated loan balance counterparties are disclosed in Notes 31 and 35 respectively. Amounts due from Group undertakings relate to balances advanced to the Group's subsidiary (MVL) for the acquisition of other subsidiaries including PAL, BBSL, BLX and NRF. The Group manages its credit risk by ensuring that sufficient resources are allocated to credit management and capital allocation and using reputable financial institutions to hold its cash balances. \n ii. Liquidity risk \n The value and term of short-term assets are monitored against those of...

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