Annual Financial Report

Annual Report 2026

Close Brothers Group plc

Our purpose is to help people and businesses thrive

Our attributes embody our distinctive culture and customer-centric approach

Deep

expertise

Our deep industry knowledge and specialist expertise help people

and businesses unlock their potential and plan for the future with confidence.

Consistent

service

We pride ourselves on delivering the highest levels of service in specialist sectors we know and understand.

Long-term

relationships

We take the time to understand and build strong long-term relationships with our customers and partners.

Our strategy focuses on ensuring our business model

continues to deliver in the long term

Simplify

Optimise

Grow

Underpinned by our responsibility

To help address the social, economic and environmental challenges facing our business, employees and customers, now and into the future.

Enabling us to create value and deliver positive

outcomes for our stakeholders

Customer and partners

Colleagues

Regulators and government

Communities and environment

Suppliers

Investors

Strategic report

‌Contents

Strategic report

At a glance 2

Chairman's statement 4

Chief Executive's statement 6

Our business model 8

Our strategy 10

Investment case 12

Key performance indicators 14

Our businesses 16

Stakeholder engagement 23

Section 172 statement 23

Sustainability report 28

Task Force on Climate-related Financial

Disclosures report 30

Non-financial and sustainability information statement 47

Financial overview 48

Risk report 60

Going concern 101

Viability statement 102

Governance report

Chairman's introduction to governance 104

Governance at a glance 106

Board of Directors 108

Executive Committee 111

Corporate governance report 112

Nomination and Governance Committee report 122

Audit Committee report 126

Risk Committee report 134

Directors' remuneration report 137

Directors' report 152

Financial statements

Independent auditors' report 156

Consolidated income statement 164

Consolidated statement of comprehensive income 165

Consolidated balance sheet 166

Consolidated statement of changes in equity 167

Consolidated cash flow statement 168

Company balance sheet 169

Company statement of changes in equity 170

The notes 171

Glossary and definition of key terms 214

Shareholder information 217

Company information 217

Cautionary statement 218

Delivering for our customers

Leading expertise across

specialist finance

Read more on p22

Consistent service supporting

lasting ambition

Read more on p27

Powering growth through

long-term relationships

Read more on p46

Financial statements

Governance report

1

‌At a glance

Close Brothers is a UK specialist banking group providing lending and deposit taking.

Commercial

Commercial offers specialist and predominantly secured lending principally to the SME market.

Find out more on page 16

Retail

Retail provides intermediated finance through motor dealers, motor finance brokers and insurance brokers, and savings products for individuals and corporates.

Find out more on page 18

Property

Property offers residential development finance to established UK property developers, funding for commercial properties, and bridging and refurbishment loans.

Find out more on page 20

Serving approximately

1.6 million

customers

26 offices

predominantly in the UK and Ireland

c.2,400

full time equivalent employees

Constituent of the

FTSE 250

Close Brothers Group plc Annual Report 2026

2

Return on average tangible equity2

5.5%

2025: 7.1%

Employee engagement

72%

2025: 78%

Adjusted1 operating profit

£120.3 million

2025: £144.3 million

Customer sentiment scores

Asset Finance CSAT3

96%

2025: 92%

Invoice Finance CSAT3

87%

2025: 87%

Motor Finance UK Dealer NPS4

+65

2025: +65

Savings online CSAT3

89%

2025: 82%

Operating loss before tax

£(60.3) million

2025: £(122.4) million

Basic earnings per share (continuing operations)

(58.5)p

2025: (99.8)p

Total Scope 1 and 2 emissions (market-based)

790 tCO2e

2025: 1,160 tCO2e5

Adjusted1 basic earnings per share (continuing operations)

47.5p

2025: 59.3p

Financial statements

Strategic report

Governance report

1. Adjusted measures are presented on a basis consistent with prior periods and exclude any exceptional and adjusting items which do not reflect underlying trading performance. Current adjusting items include: customer remediation provisions, unwind of time value discount, and operational or legal costs, incurred in relation to an event that is deemed to be adjusting, Close Brewery Rentals Limited ("CBRL") which was sold in the year, Close Brothers Vehicle Hire ("CBVH") which is in wind-down, restructuring costs and amortisation of intangible assets on acquisition. There are no exceptional items presented in these financial results. Please refer to the Basis of presentation and the tables on page 49 for details on the reconciliation between adjusted and statutory measures.

2. Adjusted operating profit less tax and AT1 coupons divided by average total shareholders' equity, excluding intangible assets and AT1, for continuing operations. See footnote 1 on page 15 for further details.

3. Customer satisfaction score ("CSAT").

4. Net Promoter Score ("NPS").

5. To support meaningful year-on-year comparisons following the disposal of Winterflood and Brewery Rentals, 2025 comparative emissions have been restated to exclude both businesses. Unless otherwise stated, all operational emissions disclosures presented in this report are reported on a continuing operations basis.

‌Chairman's statement

"I am proud of the resilience, integrity and commitment shown by colleagues across the group during another important year for Close Brothers.

With a more focused specialist banking model, continued progress against our strategic priorities, and a clear succession plan for the Board, the group is well placed for the next stage of its development."

Michael N. Biggs

Chairman

The 2026 financial year has been an important year for Close Brothers. The group has maintained a clear focus on the execution of its strategy, the strength of its franchise and the needs of customers, colleagues and shareholders while continuing to manage the external uncertainties facing the sector.

Close Brothers Group plc Annual Report 2026

The Board and management team have remained focused on those matters within our control: preserving capital strength, delivering operational efficiencies, simplifying the group, maintaining credit discipline and positioning Close Brothers to generate stronger returns over time. This disciplined approach has been particularly important during a period of continued regulatory developments, geopolitical and macro volatility and the continued uncertainty relating to motor finance commissions - all of which have continued to influence investor sentiment.

Throughout the year, the underlying strengths of the business have remained evident. Close Brothers continues to benefit from well-established positions in specialist markets, a relationship-led model, deep lending expertise and a culture of disciplined underwriting. These attributes have served the group well over many years and continue to underpin the Board's confidence in the long-term prospects of the business.

The Board is acutely aware of the importance of shareholder distributions. Decisions in relation to the reinstatement of distributions will continue to be taken carefully, reflecting the group's capital position, the evolving regulatory backdrop and the Board's responsibility to balance prudence with the creation of long-term shareholder value.

We remain committed to the resumption of shareholder distributions at an appropriate time and will reassess our options as greater certainty emerges regarding motor finance commissions, taking into account the group's future capital needs and shareholder feedback.

Board and management alignment

The Board has continued to work closely with management to oversee the delivery of the group's strategy, focused on simplification, optimisation and growth. This strategy has provided a clear framework for decision-making and has helped the group to respond decisively to the challenges of recent years.

During the year, management has continued to make significant progress on cost reduction, transformation initiatives and the strengthening of operational and control frameworks. These actions have led to delivery of annualised costs savings ahead of target, on an accelerated schedule, protecting both the company and the customer proposition, and creating the foundations for a more efficient and focused organisation capable of delivering improved returns.

Investor engagement during the year has reinforced the importance of maintaining this clarity of purpose. As part of our 2026 corporate governance roadshow, we were pleased to have strong bilateral engagement with shareholders, reflecting a shared interest in the long-term success of the company. Feedback was constructive and supportive, with investors recognising the group's capital strength, operational rigour and the progress made by management.

In particular, shareholders were supportive of the Board's approach to succession and oversight during this period of uncertainty. The clear message from those discussions was a preference for continuity, experience and stability as the group continues to execute its long-term strategy.

Our people and culture

Governance report

The Board recognises that the strength of our franchise is built on the expertise and judgement of colleagues across the group. Their specialist knowledge, customer focus and commitment are fundamental to our business model and to the trust that customers place in Close Brothers.

Financial statements

Our people have continued to demonstrate professionalism and commitment, supporting customers and maintaining high standards through a demanding external environment and a period of significant organisational change. The results of the 2026 employee opinion survey were an encouraging reflection of that commitment through this period of transformation, with engagement remaining strong at 72%, overall satisfaction at 80%, and over 90% of colleagues reporting a strong sense of fairness, inclusion and integrity.

We remain focused on maintaining an inclusive and supportive culture, where colleagues are engaged, able to speak up and committed to delivering good outcomes for customers. The Board will continue to monitor culture closely and ensure that the group's values remain in focus as we simplify and evolve the business.

Sustainability and responsible business

Close Brothers continues to have an important role to play in supporting customers, colleagues and communities. Our approach to sustainability remains grounded in our business model and the needs of the customers we serve.

We remain committed to supporting customers in their own sustainability journeys in a practical and commercially relevant way. This includes helping customers finance assets and investments that support their transition plans, while continuing to manage our own environmental impact and operate responsibly.

More broadly, the Board continues to view sustainability through the lens of responsible stewardship: maintaining strong governance, supporting customers fairly, investing in colleagues, contributing to communities and managing the group for long-term value creation.

Board and management changes

Board succession has been an important area of focus during the year. As announced on 31 July 2026, I will step down as Chairman of the Board and Chair of the Nomination and Governance Committee with effect from the conclusion of the Annual General Meeting in November.

It has been an immense privilege to serve as Chairman of Close Brothers over the past nine years. During that time, the group has faced periods of opportunity and challenge, and I have been consistently impressed by the resilience, integrity and commitment of colleagues across the organisation. I am grateful to my past and current Board members, management team and colleagues across the group for their support during my tenure.

"We were pleased to have strong bilateral engagement with shareholders, reflecting a shared interest in the long-term success of the company."

Strategic report

I am delighted that Mark Pain will succeed me as Chair of the Board of Close Brothers Group plc and Close Brothers Limited, and as Chair of the Nomination and Governance Committee. Mark has served as Senior Independent Director since 2021 and brings over 30 years' finance, risk management and commercial experience, as well as significant regulated financial services board experience. His deep knowledge of the group and the sector will provide valuable continuity as Close Brothers continues to execute the next phase of its strategy.

I would also like to congratulate Tracey Graham, who will succeed Mark as Senior Independent Director. Tracey has made a significant contribution to the Board since her appointment in 2022 and brings extensive experience as a Non-executive Director, Senior Independent Director and Remuneration Committee Chair across a range of sectors, including financial services.

The Board remains committed to ensuring that it has the right balance of skills, experience, independence and diversity to support the long-term success of the group. I am confident that, under Mark's chairmanship and with Tracey's support as Senior Independent Director, the Board will continue to provide effective oversight and constructive challenge to management.

Thanks

Finally, I would like to thank colleagues, management, fellow Board members and shareholders for their continued support during another important year for Close Brothers.

The group has taken decisive action in recent years to strengthen its position, simplify its business and focus on the opportunities where it can deliver the greatest value. While external uncertainty persists, Close Brothers remains a strong franchise with deep customer relationships, specialist expertise and a clear strategy.

As I step down as Chairman, I do so with confidence in the future of the group, in the leadership of the management team and in the Board that will support them. I wish Mark, Tracey, the Board and everyone at Close Brothers every success for the years ahead.

Michael N. Biggs

Chairman

29 September 2026

‌Chief Executive's statement

"In 2026 we have made significant progress

against our strategic priorities to simplify, optimise and grow the business. We have taken decisive action: exiting non-core activities and repositioning business lines; taking out costs; returning to growth, and sharpening our focus on our specialist lending markets in which we have expertise. In so doing we have established a stronger foundation for future growth, operating leverage and returns."

Mike Morgan

Chief Executive

I am encouraged by the progress we have made in delivering our strategy over the past 12 months. From the start of the financial year with the successful appeal of the "Hopcraft" case at the Supreme Court and the conclusions of the Financial Conduct Authority ("FCA") on their Market Study Review into Premium Finance, through to the sales of Winterflood Securities and Brewery Rentals, the 2026 financial year has been a year of progress and change, resulting in significant repositioning of the group as a focused specialist lender. Our transformation activities have gained real momentum, with cost savings delivered ahead of schedule. The underlying loan book returned to growth, with all divisions growing in the final quarter. We have laid the foundations for improved returns in the future.

Close Brothers Group plc Annual Report 2026

Nonetheless, our return on average tangible equity ("RoTE") of 5.5% for FY 2026 remains below both last year and where we expect Close Brothers to operate over the medium term. While the comparison to prior year is impacted by the repositioning, simplification and refocus we have undertaken, we recognise that improved returns must be demonstrated through performance. With growth building across our divisions, and the benefits of strategic actions increasingly coming through, we are well positioned to build on this progress through FY 2027, and remain confident in achieving our target of double-digit returns by FY 2028, rising thereafter.

Financial performance reflects delivery of FY 2026 targets

Overall, adjusted operating profit reduced 17% to £120.3 million (2025: £144.3 million) and return on average tangible equity reduced 160 basis points (bps) to 5.5% (2025: 7.1%), primarily driven by lower income reflecting both the repositioning of the business and prevailing market conditions.

The loan book was flat over the year, as a modest reduction in the first half was offset by growth in the second. On an underlying basis, the loan book increased 2% year on year, and 4% in the second half. All divisions grew in the fourth quarter.

The net interest margin was 6.9% (2025: 7.2%), in line with guidance, and credit performance remained resilient, with a bad debt ratio of 1.0% (2025: 1.0%), in line with prior year and guidance of below the long-term average of 1.2%.

Adjusted operating expenses of £430.9 million (2025: £445.1 million) were better than guidance, primarily driven by the acceleration of cost initiatives into the current year.

On a statutory basis, we reported a pre-tax loss of £60.3 million (2025: pre-tax loss of £122.4 million) reflecting a number of adjusting items, notably the increase in our motor finance provision to c.£320 million (31 July 2025: £165.0 million), as well as restructuring costs and other adjusting items outlined in further detail on page 50.

Our CET1 capital ratio remains strong at 14.1% (2025: 13.8%), comfortably ahead of both our medium-term target range of 12-13% and the applicable regulatory minimum.

We have maintained a strong funding position with a 12-month average liquidity coverage ratio ("LCR") of 1,113% (2025: 1,012%) as we continue to optimise the balance sheet, supported by a number of debt transactions in the second half of the financial year.

During the year, we increased our provision in respect of motor finance commissions by £164.7 million, and it now stands at c.£320 million. While we recognise the ongoing uncertainty posed by the legal challenges to the FCA's redress scheme, we continue to prepare for the delivery of

Strategic report

redress under the scheme as well as preparing for the possibility of alternative scenarios that could arise from the legal challenges. As we await clarity on the outcome, our focus remains on the execution of our strategy.

Delivering on our strategic priorities

In FY 2026 we have continued to deliver on our strategic priorities to simplify, optimise and grow the business, reinforcing our confidence in achieving our target of double-digit returns by the 2028 financial year, rising thereafter.

Governance report

We substantially concluded our simplification agenda with the sales of Winterflood Securities and Brewery Rentals both completing in the first half of the financial year. We are progressing with the run-off of the Vehicle Hire business, and the repositioning of our Premium Finance business towards commercial lines will be substantially complete in FY 2027.

Financial statements

At the start of the financial year, we initiated our transformation programme, which has now gained real momentum. In the first year we have delivered c.£36 million of annualised cost savings, substantially ahead of the c.£25 million target, and now expect to exceed £60 million of annualised cost savings by the end of the 2027 financial year primarily through streamlining of businesses and functions, increased use of outsourcing and offshoring, and reduction in our property footprint and third-party spend. In addition, we are now well into planning for the next stage of restructuring activity, with a focus on developing shared enterprise-wide services.

We are also continuing to develop our capabilities in AI and automation, where we see significant potential to improve efficiency, as well as develop proposition enhancements, growth enablers and solutions to improve the customer journey. To date, our AI and automation focus has been on developing and implementing practical solutions which deliver immediate benefits. Over time, we see scope for additional cost savings and loan book growth reflecting the deployment of AI, automation and digital solutions across the business.

Loan book growth has returned in the second half, and notwithstanding challenging market conditions, all our divisions delivered positive growth in the fourth quarter. Over the year, the loan book was up 2% on an underlying basis and flat overall, reflecting the planned run-off of certain Premium Finance personal lines brokers and our legacy Motor Finance business in Ireland. In addition to our core loan book performance, we are demonstrating our ability to convert targeted opportunities into scalable, high-quality growth across the divisions. This includes deals such as: Property Finance's £20 million Revolving Credit Facility with award-winning developer, gs8; innovative Asset Finance lending supporting SME growth in emerging clean-energy markets; and Premium Finance's strategic partnership with JMG, a top-30 UK insurance broker, covering approximately

£500 million of gross underwritten assets.

We continue to see significant growth opportunities through a combination of overall market growth, share gains and new business initiatives. We are already seeing positive momentum in a number of our businesses: the Invoice Finance book grew 8% overall; Motor Finance grew 9% supported by strong growth in Ireland; and we have seen good momentum in a number of Asset Finance markets including Ireland. While the Property development market remains challenging, we are seeing acceleration of growth in the Build-to-Rent and across some regional territories.

As part of this, we are seeing an ongoing shift to larger transactions which typically have a lower net interest margin, but deliver high credit quality and attractive returns.

Overall, we see growth now trending towards our target of 5-10% p.a. through the cycle.

We are also continuing to optimise our balance sheet position, while maintaining prudent capital, funding and liquidity. The diversity of our funding base has helped to mitigate cost pressure in the deposit market, benefiting both from the breadth of our deposit offering and a number of debt transactions issued during the year. We have also started building contingent collateral, allowing us to further optimise the level and maturity of funding, while remaining in line with both our internal risk appetite and regulatory requirements.

Given the continued uncertainty regarding the outcome of the legal challenges to the FCA's motor finance consumer redress scheme and any potential financial impact, the group will not pay a final dividend on its ordinary shares for the 2026 financial year. We remain committed to the resumption of shareholder distributions at an appropriate time and will reassess our options as greater certainty emerges regarding motor finance commissions, taking into account the group's future capital needs and shareholder feedback.

Crucially, notwithstanding a period of unprecedented change, our most recent employee opinion survey shows that colleague engagement remains strong, supported by an active programme of internal communication and a number of new internal engagement forums.

Looking ahead

We enter the new financial year with confidence and remain focused on delivering sustainable growth and long-term value for our stakeholders. Although the external environment remains uncertain, we believe the group is well positioned to benefit from the opportunities available in our chosen markets. Demand for specialist lending and trusted banking services remains resilient, and we continue to see attractive growth prospects across our divisions.

FY 2027 will be an important year in demonstrating the benefits of the strategic changes we have made, as growth continues to build across the portfolio, and the impact of our cost actions increasingly come through. With continued investment through FY 2027 to support demand and fuel growth, we expect this to result in a modest improvement in returns.

As cost savings are more fully realised, and growth continues to accumulate, we expect FY 2028 to reflect the benefits of our strategy with greater operational leverage, enhanced efficiency and the accumulation of growth supporting double-digit returns.

As we move into the next stage of delivery of the group's strategy, we are making a number of changes to roles and responsibilities within the Executive Committee. Effective 1 October 2026, Matt Roper has been appointed to the newly created role of Chief Banking Officer with responsibility for the group's lending activities across Commercial, Retail and Property. Phil Hooper remains Chief Executive of Property, and Ian Cowie moves into the newly created role of Chief Operating Officer. I am in no doubt that these changes will help create greater focus on driving growth across our lending activities and strengthening our enterprise operating model.

It is with this confidence, we are reiterating our medium-term guidance and I remain fully committed to the targets we have set. I am confident that we are in the right businesses, have the right team, and have the early momentum to continue delivering on our strategy and to achieve our target of

double-digit returns by 2028, rising thereafter.

Mike Morgan

Chief Executive

‌Our business model

How we do it

Disciplined pricing

and underwriting

We apply our lending criteria and pricing discipline consistently at all stages of the cycle, with the net interest margin we generate reflecting the specialist expertise of our teams. Our lending is predominantly secured or structurally protected, with conservative loan-to-value ratios, small loan sizes and short maturities.

Prudent management

of financial resources

A fundamental part of our model is having a strong capital position and taking a conservative approach to liquidity management and funding, as we focus on diversity of funding and a prudent maturity profile.

Customer-centric approach

We listen to our customers, putting their needs at the heart of our business. We are there for our customers across all market conditions and seek to build long-lasting relationships with them.

What we do

Close Brothers is a UK specialist banking group providing lending and deposit taking. We focus

on delivering excellent service in specialist sectors we know and understand.

Commercial

Commercial offers specialist and predominantly secured lending principally to the SME market.

Find out more on page 16

Retail

Retail provides intermediated finance through motor dealers, motor finance brokers and insurance brokers, and saving products for individuals and corporates.

Find out more on page 18

Property

Property offers residential development finance to established UK property developers, funding for commercial properties, and bridging and refurbishment loans.

Find out more on page 20

Close Brothers Group plc Annual Report 2026

Enabled by the distinctive strengths of our model

Deep expertise

Consistent service

Long-term relationships

Conservative

approach to risk

Our prudent and conservative appetite to risk remains unchanged throughout the cycle. We are committed to sustaining high standards of business conduct in line with regulatory, governmental and legal expectations and strive, at all times, to operate prudently within the laws and regulations that apply to us.

Diversified portfolio of

banking businesses

We lend in a variety of sectors and locations across a diverse range of assets including transport, industrial equipment, renewable energy, wholesale finance, broker finance, used cars, light commercial vehicles and residential property.

Our distinctive culture

We see our distinctive culture as our most valuable asset. Our culture, combined with our long-term approach, is embodied by our values of service, expertise and relationships. These values are embedded at all levels across the organisation.

Strategic report

The value we create

Customers and partners

We provide tailored financing and trusted partnerships, helping customers and partners achieve their ambitions, grow sustainably, and navigate changing market conditions.

Governance report

Regulators and government

We engage transparently and constructively with regulators and government, maintaining high standards of compliance, governance, and accountability across our operations.

Financial statements

Suppliers

We build long-term, responsible supplier relationships, promoting fairness, reliability, and shared standards to support operational resilience and mutual, sustainable value creation.

Colleagues

We support colleagues to develop their careers, build on their strengths, and contribute meaningfully to delivering longterm value for all stakeholders.

Communities and environment

We act responsibly to support local communities and manage environmental impacts, contributing positively and sustaining our social licence to operate.

Investors

We aim to deliver sustainable financial returns through disciplined strategy, strong governance, and transparent communication, maintaining confidence across market cycles.

‌Our strategy At Close Brothers, we strive to provide exceptional service to our customers across our banking activities. We are committed to building on our proven business model and strong customer relationships to deliver attractive returns over the long term.

We are focused on supporting our customers and delivering long-term value creation. Our strategy is centred on three clear priorities: Simplify, Optimise and Grow.

In line with these priorities, we have streamlined the portfolio of businesses, with our Simplify actions largely complete. We are focused on executing the next stage of our journey, driving efficiency and capturing growth in our chosen markets.

Decisive actions have been taken to reposition the business, implement significant cost reductions and identify future growth markets to deliver the strategy and rebuild returns.

Simplify An in-depth review and repositioning of our portfolio of businesses has sharpened our focus on specialist banking.

Simplified group structure

• Over the last two years, we have sold Close Brothers Asset Management, Winterflood Securities and the Brewery Rentals business, and are winding down the Vehicle Hire business.

• We have simplified our federated structure to reduce the number of businesses.

• These actions have simplified our portfolio and allowed us to focus on the core lending businesses, where we can leverage our expertise and deliver growth and sustainable returns.

  Realignment of existing activities with core business model

• We repositioned our Premium Finance business to focus on commercial lines.

• We have exited sub-scale products that no longer meet our strategic objectives or returns thresholds.

• These actions have created a portfolio of businesses with a strong strategic fit. We are confident in the enduring growth opportunity across our core markets, focusing on areas that offer attractive risk-adjusted returns.

  Close Brothers Group plc Annual Report 2026

  3

  Simplified portfolio focused on three lending divisions

  Over £275m

  Cash consideration from the sale of our non-core businesses

  10

  
  
  

  Strategic report

  Governance report

  Optimise Implementing a step-change in operating profitability.

  Financial statements

  Group-wide cost reduction actions

  • We initiated a transformation programme focused on significant cost reduction and streamlining to create a more efficient organisation. In 2025, we delivered £25 million of annualised cost savings through streamlining our technology, suppliers, property and workforce.

  • Over the 2026 financial year, we have delivered a further c.£36 million of annualised cost savings.

  • We are now expecting to exceed £60 million of annualised cost savings by the end of the 2027 financial year, primarily through streamlining of businesses and functions, increased use of outsourcing and offshoring, and reductions in our property footprint and third-party spend.

  • We are advancing our planning for the next stage of restructuring activity, with a focus on developing shared enterprise-wide services.

    A leaner, more agile organisation well positioned for the future

  • We continue to build on the progress from our technology transformation, initiated in 2023, which has helped create a more digitally enabled and agile IT environment that is secure, resilient and sustainable. We are further embedding AI and automation across the business to remove manual processes, increase efficiency and support a more scalable operating model.

  • In parallel, we continue to evaluate opportunities to optimise capital, funding and liquidity.

Exceed

£60m

Annualised cost savings achieved by end of FY 2027

336k

Complaints cases processed by our AI tool

Grow Using our strong market positions, reputation and specialist expertise to target growth in the segments where we can truly differentiate.

Pursuing targeted growth opportunities in our chosen markets

• Commercial continues to expand lending. Through the year, we have sought opportunities across our businesses, where we have developed strong relationships including in specialist areas such as Energy, Aviation and Marine and Wholesale Fleet.

• In Retail, we are deepening our motor dealer relationships and expanding our reach through commercial partnerships, especially in Ireland, and we have a renewed focus on growing our commercial lines business in Premium Finance through leveraging new and existing broker relationships.

• In Property, we have expanded our regional presence and are focusing on adjacent markets of Build-to-Rent and Purpose-Built Student Accommodation.

  Expanding our product offering to target new areas of growth

• Commercial has repositioned its intermediated Asset Finance business.

• Through Retail, we are enhancing our product options, such as our dedicated Electric Vehicle proposition for Motor Finance, and supporting the international presence of our commercial brokers in Premium Finance, to write larger, high value and complex business through strengthened underwriting.

• Property has launched a new cash flow-led product, CA Revolve, in the bridging business, and now offers a Revolving Credit Facility to our larger customers.

5-10% p.a.

Loan book growth through the cycle target

+8%

Loan book CAGR since 20091

1. Excludes £130.0 million (31 July 2009: £8.6 million) of operating lease assets related to Close Brothers Vehicle Hire which is in wind-down, and £nil (31 July 2009: £4.9 million) of operating lease assets relating to Close Brewery Rentals Limited, sold on 31 August 2025.

   ‌Investment case

   Focused specialist

   bank

   Our specialist focus, long-term

   customer relationships, and trusted brand allow us to differentiate and win in markets we serve.

   Commercial

   Lending to SMEs for over 40 years

   c.60% of business sourced directly by our sales force

   90% lending secured

   Retail

   Support 100,000+ new motor customers annually

   c.1,100 UK and ROl premium brokers c.100,000 Savings customers

   Property

   Lending to SMEs for 50 years

   72% of loans are to repeat customers

   Attractive market

   opportunities

   We operate in markets with

   long-term demand, offering sustainable growth opportunities.

   £41.1bn

   new business

   4%

   • UK asset finance market

   • Our market share

   Source: Finance & Leasing Association ("FLA") Industry Statistics 12 months to June 2026.

   £17.7bn

   advances

   7%

   • UK invoice finance market

   • Our market share

   Source: UK Finance data for 12 months to July 2026.

   £22bn

   sales

   • UK used consumer car finance

   3%

   market

   • Our market share Source: FLA Statistics 12 months to June 2026.

   £80bn

   premiums

   3%

   • UK general insurance market

   • Our market share

   Source: GlobalData's UK Top 25 General Insurance Competitor Analytics.

   c.2,400

   SME

   housebuilders

   25%

   • Estimated number of UK SME housebuilders

   • Proportion of UK SME housebuilder market we provide finance to

   Source: Home Builders Federation January 2017.

   Close Brothers Group plc Annual Report 2026

   12

   A clear strategy

   to rebuild returns

   We are progressing well on our

   strategy, with simplification largely complete and optimisation evident, allowing for future growth.

   Our strategic priorities provide a clear

   path back to stronger returns.

   Simplify

   Exit or restructure underperforming, low-returning businesses

   Optimise

   Cost reduction and a step-change in profitability

   Grow

   Drive sustainable growth across our chosen markets

   
   
   

   The path to improved

   shareholder returns

   Our target

   Double-digit RoTE by the 2028 financial year, rising thereafter

   Capital allocation priorities

   Absorb regulatory impacts

   • Motor commissions redress, Basel 3.1

   Grow the loan book

   • Driving strong strategic growth across divisions

   Shareholder distributions

   • Resumption of shareholder distributions at an appropriate time

   Maintaining a CET1 capital ratio of

   12-13%

   over the medium term

   
   
   

   Strategic report

   Governance report

   Financial statements

   ‌Key performance indicators Financial key performance indicators ("KPIs")

   Return on average tangible equity1 (%)

   5.5

2026

2025

2024

Profit after tax divided by average tangible shareholders' equity, excluding intangible assets and goodwill.

Measures how effectively tangible capital generates profits and is a key indicator of shareholder value creation.

Loan book growth (%)

Percentage increase or decrease in the value of loans outstanding over a reporting period.

Indicates business momentum, market demand and future earnings potential, provided growth is achieved with prudent risk.

Group expense/income ratio2 (%)

Operating expenses divided by operating income, measuring how efficiently revenue is converted into operating profit.

Highlights cost discipline and operational efficiency; lower ratios generally indicate stronger profitability and better scalability.

Bad debt ratio2 (%)

Common Equity Tier 1 capital ratio (%)

Total funding as a percentage of loan book3 (%)

Annual impairment charges as a percentage of average loan book, measuring credit losses arising from customer defaults.

Indicates asset quality and credit risk management, helping assess sustainability of future earnings and capital strength.

Common shareholders' equity and retained earnings divided by risk weighted assets, measuring highest-quality capital available to absorb losses.

Indicates financial resilience, regulatory strength and capacity to withstand losses while supporting lending, growth and distributions.

Total customer deposits and wholesale funding divided by the loan book, measuring the extent loans are funded.

Demonstrates funding adequacy and balance sheet stability, reducing refinancing risk and supporting sustainable lending growth.

Close Brothers Group plc Annual Report 2026

Liquidity coverage ratio, 12-month average (%)

Net interest margin2 (%)

High-quality liquid assets divided by projected net cash outflows over 30 days under stress conditions.

Assesses ability to meet short-term obligations during market stress without requiring emergency funding or asset sales.

Net interest income divided by average net loans and advances to customers and operating lease assets, measuring profitability generated from lending and funding activities.

Shows effectiveness of generating earnings from balance sheet assets and liabilities, directly influencing profitability and returns.

Adjusted basic earnings

per share (continuing operations)2 (p)

2026

2025

2024

Basic earnings per

share (continuing operations)2 (p)

2026

2025

2024

Profit attributable to ordinary shareholders, on an adjusted, or basic (unadjusted), basis divided by the weighted average number of ordinary shares outstanding.

A measure of shareholder returns and profitability, adjusted EPS helps stakeholders assess the underlying performance of the business by excluding items that may distort year-on-year trends, while basic EPS provides the statutory result, ensuring transparency and comparability.

Dividend per share (p)

2026 0.0

2025 0.0

2024 0.0

Total dividends paid to ordinary shareholders divided by the number of ordinary shares in issue. Shows cash returned to shareholders. We remain committed to the resumption of shareholder distributions at an appropriate time and will reassess our options as greater certainty emerges regarding motor finance commissions, taking into account the group's future capital needs and shareholder feedback.

Non-financial KPIs

Employee engagement (%)

2026 72

2025

78

2024

83

We are committed to fostering a

culture that attracts and retains engaged and motivated employees.

Customer sentiment scores

Asset Finance CSAT

Motor Finance UK Dealer NPS

Savings online CSAT

Invoice Finance CSAT

Customers are at the heart of our

model, as we focus on delivering high levels of service and sharing our deep

Total Scope 1 and 2 industry expertise to meet their needs.

emissions (market-based) (tonnes CO2e)4

2026

2025

2024

We have made significant progress on climate actions and remain committed to achieving net zero across our operations, our supply chain and the activities we finance by 2050 or sooner.

Strategic report

Governance report

Financial statements

See pages 214 to 216 for the full definitions of these key performance indicators.

1. Return on average tangible equity uses adjusted operating profit after tax from continuing operations, less AT1 coupons (2026: £71.3 million, 2025: £88.7 million, 2024: £113.5 million). Average tangible equity excludes discontinued operations. Average tangible equity is calculated based on closing equity per the balance sheet (2026: £1,651.6 million, 2025: £1,735.5 million, 2024:

   £1,842.5 million), less AT1 (2026, 2025 and 2024: £197.6 million), less intangibles (2026: £155.0 million, 2025: £166.3 million, 2024: £266.0 million), less Close Brothers Asset Management ("CBAM") and Winterflood Securities ("Winterflood") tangible equity (2026: £nil, 2025: £90.6 million, 2024: £155.9 million).

2. Group expense/income ratio, bad debt ratio, net interest margin, adjusted basic earnings per share and basic earnings per share calculations re-presented to exclude Close Brewery Rentals Limited, which was sold in the year, and the Close Brothers Vehicle Hire business, which is in wind-down.

3. Total funding as a percentage of loan book includes £131.1 million (31 July 2025: £207.3 million, 31 July 2024: £267.9 million) of operating lease assets in the loan book figure.

4. The total Scope 1 and 2 emissions for 2024 and 2025 have been restated to exclude CBAM, Winterflood and Close Brewery Rentals Limited.

‌Commercial Specialist SME and corporate lending

Supporting over 28,000 SMEs through a

blended origination model comprising a direct sales force with asset and sector expertise and a range of intermediary partners.

"Our growth comes from supporting

ambitious businesses with practical funding solutions and responsive, relationship-based service."

Matt Roper

Chief Executive Officer Commercial

Commercial adjusted operating profit1 (£m)

2024

2025

2026

We have two businesses operating across the UK and Ireland with strong market positions that together deliver resilient, secured SME lending with strong recurring revenue and clear growth capacity.

Asset Finance

• Specialist financing for SMEs and individuals including hire purchase, lease, refinancing and loans.

• Distribution: direct (67%) and intermediated (33%).

• Market share: 4.2% (Source: FLA).

Invoice Finance

• Working capital solutions through invoice discounting, debt factoring and asset-based lending ("ABL").

• Distribution: direct (37%) and intermediated (63%).

• Market share: 6.3% (Source: UK Finance).

Commercial loan book split at 31 July 20262

£4.9bn

Asset Finance Invoice Finance

£3.6bn/75% £1.2bn/25%

NIM

Bad debt

6.4%

0.6%

Expense/income

ratio

62%

3

How we win

Excellent service makes us

the lender of choice in our chosen markets

We pride ourselves on supporting businesses through the credit cycle

Deep expertise in both Asset Finance and Invoice Finance is unique

Our dual channel strategy (direct and intermediated) is a key differentiator

Close Brothers Group plc Annual Report 2026

1. Excludes Close Brewery Rentals Limited, which was sold in the year, and the Close Brothers Vehicle Hire business, which is being wound down.

2. Numbers may not cast due to rounding.

3. All financial metrics for the 2026 financial year.

   Our operating environment

   
   
   External environment

   Governance report

   Financial statements

   What we are seeing How we are responding

   Strategic report

   Regulatory environment

   • Basel 3.1, to be implemented in January 2027, will result in an increase in risk weighted assets ("RWAs"); however, the impact on capital headroom will be limited due to the Pillar 2a SME Lending Adjustment.

     Competitive landscape

   • Some larger high street banks are retreating from specialist SME lending to focus on larger-scale corporates.

   • Smaller specialist lenders are partnering with larger high street banks, combining their local origination capabilities with access to funding.

   • Continued activity in the Irish M&A market.

     Economic environment

   • Consumer affordability has been challenged, testing resilience of SMEs.

   • Subdued UK macroeconomic environment and global geopolitical uncertainty have impacted SME demand and market growth.

   • According to Close Brothers' Business Sentiment Index, SME confidence has remained largely unchanged since mid-2023, reflecting business owners' continued cautious approach to investment as they wait for improvements in the macro economy.

   • Growth in both asset and invoice finance markets shows continued demand.

Regulatory environment

• Maintain open and cooperative relationship with regulators, including the FCA and PRA.

• Continually monitor the landscape to stay abreast of regulatory change.

  Competitive landscape

• Continue to see growth opportunities to strengthen current proposition, with option to extend capabilities into new areas that fit our model, either through partnerships or bringing in specialist teams to complement our expertise.

• Remain committed to our model of maintaining margin and underwriting discipline.

  Economic environment

• Continue to monitor the potential impact of ongoing uncertainty, prudently assessing affordability across lending proposals and offering additional support to customers where needed.

• Subdued economic activity may impact business confidence; however, bad debt levels have remained resilient, showing the strength of the business model.

• Strong signs of growth in SME asset finance market prior to the conflict in the Middle East. We continue to focus on the SME market, where we have specialist expertise, and where growth has exceeded the wider asset finance market.

  Customer behaviour

  What we are seeing How we are responding

  • Customer service, responsiveness, clarity of • Our direct sales force comprises more than 100 communication, value for money, as well as ease of doing colleagues across the UK and Ireland, who are sector business are key customer requirements. experts and provide specialist service to customers.

  • SME focus on green energy has slowed over last 12 • We have simplified and relaunched our broker months. proposition, which has reduced the burden on the

    customer and helped streamline the lending process.

    • We help SMEs adapt and respond to their changing requirements, providing specialist lending over the long term.

  
  
  

  Technology and digital

  What we are seeing How we are responding

  • Digital channels, new technology and AI are expected to • Through our transformation programme, we are provide a differentiated offering, an enhanced customer improving our customer and intermediary service by experience and focus on improving speed of service for embedding automation capability and AI; for example: lenders and customers. - AI credit proposal generation: improves cycle time

  from two days to two hours, reduces rework and enables more tailored customer solutions.

  - Automated credit decisioning: enables faster responses from hours to minutes, increases throughput and reduces friction.

  
  
  ‌Retail Three specialist retail-focused businesses

  Intermediated finance provided through

  motor dealers, motor finance brokers and insurance brokers across the UK and Ireland, and savings products for individuals and corporates.

  "Our continued growth reflects

  the strength of our partnerships, customer focus and ability to scale responsibly in evolving markets."

  Ian Cowie

  Chief Executive Officer Retail

  
  
  

  Retail adjusted operating profit (£m)

  Our three specialist businesses deliver through diversified intermediary partnerships, generating strong margins and supporting the group's stable retail deposit base.

  Motor Finance

  • Point-of-sale finance for predominantly used cars.

  • Distributed via dealers, brokers and commercial partners.

  • Helping customers finance vehicle purchases.

  Premium Finance

  • Instalment payments for insurance policies.

  • Delivered through broker partnerships.

  • Makes insurance payments more manageable.

  Savings

  • Retail and business deposits.

  • Sourced through digital channels, aggregators and relationship managers.

  • Support customers' long-term financial goals.

  2024		37.9
  2025	18.9
  2026	17.4

  Retail loan book at 31 July 20261

  £2.8bn

  Motor Finance Premium Finance

  £2.2bn/77% £0.7bn/23%

  23%

NIM

Bad debt Expense/

income ratio

7.9% 1.0% 79%

Customer

deposits

£7.9bn

2

How we win

Partnership approach to helping

our dealers and brokers grow

Established brand and strong market following

Consistency and dependability for lending through the cycle

Expertise and reliability of response

Adding value through human engagement

Close Brothers Group plc Annual Report 2026

18 1. Numbers may not cast due to rounding.

1. All financial metrics for the 2026 financial year and customer deposits at 31 July 2026.

   Our operating environment

   
   
   External environment

   Governance report

   Financial statements

   What we are seeing How we are responding

   Strategic report

   Regulatory environment

   • Ongoing legal challenges to the FCA's motor finance consumer redress scheme.

   • The FCA's final market study report on premium finance published, concluding no market-level intervention required and motor finance concerns not able to be mapped directly to this market.

   • Consumer Duty continues to shape savings pricing, product governance and customer treatment.

     Competitive landscape

   • Motor Finance: geopolitical and regulatory pressures, together with aggressive competitor pricing, have disrupted the UK market, although demand remains resilient.

   • Premium Finance: market remains competitive amongst third-party lenders, direct insurers and self-funded brokers.

   • Savings: competition remained strong for retail deposits as interest rates fell.

     Economic environment

   • Used car market activity has stabilised and is poised to grow, though affordability remains under pressure.

   • Electric vehicles now represent an increasing proportion of all markets.

   • Demand for premium finance remains robust within the UK general insurance market of c.£80 billion.

     Technology and digital

     What we are seeing How we are responding

     • Digital channels, new technology and AI are expected to • Significant investment in modernising origination and provide a differentiated offering, an improved customer collections and recoveries platforms to improve speed experience and focus on improving speed of service for of decisioning, underwriting consistency and operational lenders. efficiency.

       • Extending digital capabilities to support customer self-service and reduce cost-to-serve.

       • Simplified website navigation and improved accessibility of customer journeys via Savings platform.

       • Using data and feedback to identify online friction points and prioritise improvements in Savings.

     
     
     

   • Insurance premiums have softened, reflecting increased market competition and a stable reinsurance market.

Regulatory environment

• Maintain open and cooperative relationship with regulators, including the FCA and PRA.

• Continued preparations to support operational readiness for expected ISA reforms from April 2027.

• Enhanced oversight of customer communications, support for customers in vulnerable circumstances and Inclusive Design Framework introduced in Savings.

  Competitive landscape

• Selectively growing where competitor capacity and activity has reduced.

• Continued strong growth in the Irish motor business, while reviewing additional growth opportunities.

• Maintained product availability across key Savings markets, supported by agile pricing to reflect market conditions, customer demand and funding needs.

  Economic environment

• Maintaining a prudent approach to affordability.

• Adapting product offering in line with increased demand, including strengthening dealer funding support and broker facilities.

• Accelerating growth in Ireland through expansion into large manufacturer dealer networks.

• Worked closely with the regulator as part of the planned withdrawal from selected personal lines relationships in Premium Finance.

  Customer behaviour

  What we are seeing How we are responding

  • Customers are increasing digital engagement and expect • Actively positioning distribution where customers are straightforward digital services, while retaining access to choosing to finance, continued expansion and telephone support where needed. optimisation of our dealer and broker network, and

  • A growing proportion of UK customers starting their car- seamless integration into customer journeys.

    buying journeys online and c.66% using online tools and AI • Adapting product structures and enhancing customer life in the vehicle purchase journey. cycle propositions to meet evolving customer needs.

  • Customer affordability remains a key consideration, • Continuing to enhance our digital and telephone influencing product selection and loan structures. service in Savings, evidenced through improved

  customer satisfaction scores and call answer times.

  
  
  ‌Property Specialist development and bridging finance

  Providing personalised, flexible finance to property developers and investors.

  "Specialist expertise and trusted longterm relationships have enabled us to continue growing successfully.

  We have diversified our offering and make the process as simple as possible for our customers. We do what we say, and we deliver on time."

  Phil Hooper

  Chief Executive Officer Property

  
  
  

  Property adjusted operating profit (£m)

  2024

  2025

  2026

  49.0

We combine medium-term property development finance across all living sectors, commercial development and residential investment finance, in addition to short-term specialist lending across the UK.

Property Finance

• Secured residential development finance across living subsectors for experienced developers and operators.

• Market leader in UK residential development finance over many years.

• Customer base over 500 developers, providing lending solutions from £1m-£70m.

Commercial Acceptances

• Short to medium-term secured lending including refurbishment and bridging loans.

• Flexible structures to support transitional property assets.

• 400 customers with loans from £50k-£10m.

• Coverage focused on London and the South East.

NIM

Bad debt

6.5%

2.0%

Expense/

income ratio

28%

1

How we win

Fast, responsive credit

decisions and operations

Reputation for consistent

support through the economic cycles

Sector expertise in property asset classes and first-class customer service

Being a long-term partner who our customers can trust

Property loan book at 31 July 2026

£1.8bn

Property Finance Commercial Acceptances

£1.5bn/85% £0.3bn/15%

Close Brothers Group plc Annual Report 2026

20

• 1. All financial metrics for the 2026 financial year.

     Our operating environment

     
     
     External environment

     Governance report

     Financial statements

     What we are seeing How we are responding

     Strategic report

     Regulatory environment

     • Government initiatives to increase housing delivery through planning reform.

     • Evolving energy requirements.

       Competitive landscape

     • Larger high street banks remain active but typically focused on lower-risk "vanilla" schemes with limited flexibility and slower processes.

     • Challenger banks, non-bank and private credit lenders remain active but are increasingly selective.

     • This is creating a funding gap for SME housebuilders and further paving the way for experienced, relationship-led lenders.

       Economic environment

     • Higher interest rates continue to weigh on housing activity, customer confidence and sale prices, with SME developers operating in more challenging conditions.

     • Structural undersupply of UK housing persists, with annual completions remaining below government targets of c.300k homes per annum as the cost of building new homes continues to rise (up £76k per home since 2020).

     • Demand for living sectors, including PBSA and BTR, remains supported by structural demographic trends and strong institutional investor demand.

       Regulatory environment

• Acting as a voice for SME lenders through our "State of Play" report and the All-Party Parliamentary Group ("APPG") for SME Housebuilders, including sharing the sector's views on planning reform.

• Monitoring developments in energy efficiency requirements.

  Competitive landscape

• Continuing to support SME housebuilders, particularly where mainstream capacity has reduced.

• Leveraging our experience to provide certainty of execution in a more selective market.

• Maintaining disciplined underwriting and pricing.

  Economic environment

• Continuing to support established SME housebuilders through a more challenging market environment.

• Leveraging the opportunity in new growth sectors.

• Accelerating regional penetration and presence.

• Innovative product development, such as our new offerings: Revolving Credit Facility and CA Revolve.

• Engaging with government initiatives to support SME housebuilding and housing delivery, for example through delivering the ENABLE build programme with the British Business Bank and actively supporting the APPG for SME Housebuilders.

Customer behaviour

What we are seeing How we are responding

• Developers are taking a more cautious and selective • Maintaining our approach of supporting clients through approach to new project origination, with increased focus the cycle, combining strong underwriting discipline with on scheme viability and delivery risk. a focus on structuring and executing viable

• Developers are prioritising schemes with stronger visibility transactions. on costs, funding and exit strategies in an uncertain

demand environment.

Technology and digital

What we are seeing How we are responding

• Improvements in process efficiency to improve speed of • Continuing to enhance internal processes and systems service to customers. to improve speed, consistency and execution for

customers, while maintaining a relationship-led approach that supports customers through complex and evolving market conditions.

‌Leading expertise

across specialist finance

Preformed Windings is a highly specialised UK firm operating in advanced manufacturing, producing high-voltage bars and coils used in critical generators and motors.

As demand grew, the business needed to bring its production, testing and development capability together in a larger facility, while maintaining the working capital required to keep operations moving.

Working collaboratively across our Invoice Finance and Asset Finance teams, Close Brothers delivered a funding package tailored to Preformed Windings. Invoice Finance, supported by the Growth Guarantee Scheme, provided additional cash flow funding, while Asset Finance refinanced existing specialist machinery through a sale and hire purchase back arrangement.

This demonstrates the strength of our expertise-led approach. Drawing on specialist knowledge from across our businesses, the teams were able to structure a complete funding solution that supported both immediate investment and long-term growth.

"Close Brothers understood the commercial opportunity and operational complexity, structuring their support accordingly."

James Stevens

Chief Executive Officer, Preformed Windings

Close Brothers Group plc Annual Report 2026

.

22

Governance report

Financial statements

‌Stakeholder engagement

Strategic report

Delivering for our stakeholders

At Close Brothers, we have a long-term track record of creating value and delivering positive outcomes for all of our stakeholders.

We work hard to understand and meet the needs of our different stakeholder groups, engaging with them and adapting our service and offering to create value for them. We undertake a comprehensive programme of stakeholder engagement and consider the feedback provided, embedding this in the decision-making process throughout the group.

‌Section 172 Statement and Statement of Engagement with Employees and Other Stakeholders

Section 172(1) of the Companies Act 2006 requires the directors of a company to act in a way that they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other factors) to various other considerations and stakeholder interests:

• the likely consequences of any decision in the long term;

• the interests of the company's employees;

• the need to foster the company's business relationships with suppliers, customers and others;

• the impact of the company's operations on the community and the environment;

• the desirability of the company maintaining a reputation for high standards of business conduct; and

• the need to act fairly as between members of the company.

  The Board is responsible for establishing and overseeing the company's values, strategy and purpose, all of which centre around the interests of key stakeholders and other factors set out in section 172(1).

  The Directors are conscious that their decisions and actions have an impact on stakeholders, including employees, customers, suppliers, communities and investors, and they have had regard to stakeholder considerations and other factors in section 172(1) during the year.

  Regular engagement with stakeholders, both directly and indirectly via management, has continued to be an important focus for the Board and has ensured that the Directors are aware of and have effective regard to the matters set out in section 172(1). Throughout the year, the Board received and discussed stakeholder insight and feedback and it ensured that stakeholder considerations were taken into account in the Board's deliberations and decision-making.

  Whilst the Board acknowledges that, sometimes, it may have to take decisions that affect one or more stakeholder groups differently, it seeks to treat impacted groups fairly and with regard to its duty to act in a way that it considers will be most likely to promote the success of the company for the benefit of its members as a whole, having regard to the balance of factors set out in section 172(1).

  Considerations relating to the factors in section 172(1) are an important part of governance processes and decision-making at both Board and executive level, and more widely throughout the group. For example, the schedule of matters reserved to the Board and the terms of reference for each of the Board's committees emphasise the importance of decision-making with regard to relevant factors under section 172(1) and broader stakeholder considerations.

  Necessarily in a large and regulated group, some decisions are taken by management or the directors of subsidiary companies. These decisions are taken within parameters set by the Board and there is a robust framework that ensures ongoing oversight, monitoring and challenge by the Board and its committees (including certain decisions and activities that are always reserved to the Board or its committees). The Board has regard to relevant factors set out in section 172(1) in its activities in these areas, including considerations relating to the potential impact of delegated decisions on the long-term success of the group as a whole, the group's reputation for high standards of business conduct and the consequences of local decisions on the group's stakeholders.

  Detail on the Board's engagement with, and consideration of, the company's stakeholders can be found on pages 119 to 121 of the Corporate Governance Report.

  Stakeholder engagement continued

  Customers and partners

  Customers and partners are central to our purpose. We aim to help them access financial solutions that meet their needs, supported by specialist expertise, responsive service and trusted relationships.

  Key priorities of our customers and partners

  • They value consistent service, products that deliver value, strong personal relationships, fair conduct and support that adapts to changing economic, technological and regulatory conditions.

  • Our approach is to be flexible, clear and responsive, making decisions informed by expertise and executing with pace. We want customers, partners and colleagues to feel valued and confident, and to find it easy to do business with us.

  • Listening, learning and acting is central to this. We gather feedback, monitor sentiment and use long-running customer forums to bring the voice of the customer into decision-making. Feedback from forums, customer metrics and operational insight helps us improve processes, collaborate across teams and enhance the customer experience.

    Our engagement during the year

  • During the year, we delivered customer-focused training to support continuous improvement, streamline processes and enhance the customer experience.

  • We also strengthened digital capabilities, making it easier for customers and partners to access our products and services and improving responsiveness across several businesses.

  • The feedback process has led to practical improvements, including extending our "language line" to support Motor Finance customers where English is not their first language, building on functionality already available in Premium Finance. We have also improved support for vulnerable customers through automated processes, colleague training and, in Savings, a dedicated Extra Support Group and forum.

    Close Brothers Group plc Annual Report 2026

  • Looking ahead, we will continue to capture, consolidate and act on customer and partner sentiment across end-to-end journeys, helping us deliver a differentiated experience and earn customer loyalty.

Regulators and government

We are committed to sustaining high standards of business conduct in line with regulatory, governmental and legal expectations and operating prudently within the laws and regulations that apply to us.

We foster an open, transparent and cooperative relationship with regulators, government authorities and trade associations in the jurisdictions in which we operate. Active engagement helps to ensure we are aware of and adapting to the evolving regulatory framework.

Key priorities of our regulators and government

• Achieving good customer outcomes.

• Operational and financial resilience.

• Strategic risk management.

• Data security.

• Financial crime prevention.

• Corporate social responsibility.

• Digitisation, use of artificial intelligence and enhanced data analytics.

• Supporting growth and innovation.

  Our engagement during the year

• We have engaged constructively with our regulators during this period, engaging in key areas of regulatory interest including the Premium Finance Market Study as well as the FCA's review of historical motor finance commission arrangements and proposed redress scheme.

• We have also engaged with the government, the FOS, and our regulators in respect of the proposals to modernise the UK redress system.

• We continued to enhance our approach and ensure this aligns with regulatory expectations. We actively monitored the FCA's formal and informal guidance on Consumer Duty as well as the results of the annual Financial Lives survey and the Consumer Protection Code within our Irish business.

• We continued to engage actively with the PRA on our IRB application and Basel 3.1 implementation.

• We undertook reporting and analysis as requested, and held regular meetings with our regulators, enabling them to better understand our business activities, strategic plans and how we are operating in a controlled and prudent manner.

  Strategic report

  Suppliers

  Governance report

  Our business continues to be supported by a diverse and reliable network of suppliers, which plays an important role in enabling us to deliver consistently high standards of service to our customers and partners. We are committed to maintaining transparent, sustainable and mutually beneficial supplier relationships, underpinned by fair commercial practices, clear expectations and effective oversight.

  Financial statements

  Our approach to supplier engagement is based on openness, accountability and collaboration. We work with suppliers to support delivery against our business objectives, while identifying opportunities to improve service, strengthen controls and achieve better long-term outcomes for Close Brothers and its stakeholders.

  Key priorities for our suppliers

  • Building strong, sustainable relationships.

  • Fair, ethical and equitable business conduct.

  • Supporting clear, timely and efficient processes.

  • Understanding and aligning with the group's purpose, strategy and priorities.

  • Maintaining robust and proactive risk management.

  • Delivering good service outcomes and operational resilience.

  • Achieving appropriate commercial value.

    Our engagement during the year

  • We continued to engage with suppliers through established relationship management, oversight and governance processes, including regular engagement with key strategic suppliers to review service performance, discuss emerging risks, monitor delivery against expectations and identify opportunities for improvement.

  • We also continued to develop our approach to supplier oversight, with a focus on ensuring that supplier relationships remain aligned to business needs, regulatory expectations and our risk management framework. This supports greater transparency across our supplier population and helps ensure that appropriate attention is given to suppliers that are material to our operations, customers or resilience.

  • In July, we held our annual technology strategic partner event, with 35 suppliers in attendance. This proved a great opportunity to share our strategic challenges, hear about innovative ideas developed by our partners, and encourage valuable intra-supplier discussions.

  • We remain committed to building strong, collaborative supplier relationships that support mutual success, effective risk management and the continued delivery of good outcomes for our customers, clients, partners and the wider business.

    Colleagues

    With approximately 2,400 FTE around the UK, Ireland, the Channel Islands and Germany, we have a diverse and motivated workforce which delivers the highest levels of service to our customers and partners. We are committed to the development of our colleagues, ensuring they are supported and engaged.

    Listening to our colleagues enables us to build an engaged workforce, allowing us to develop and retain high levels of expertise. We are able to ensure we are considering the views of all colleagues and making sure everyone feels included.

    Key priorities of our colleagues

• A safe working environment.

• A fair and inclusive culture where employee feedback is valued.

• Being appropriately rewarded for their contributions.

• Opportunities for training and development.

  Our engagement during the year

• We created our Employee Engagement Forum where members serve as catalysts for change, acting as a trusted channel for feedback, supporting colleague outreach and contributing to our organisational change efforts both across the group and within local business areas. The forum plays an important role in building support for change initiatives, being a vital link between the Executive Committee, senior leadership and the wider organisation. Further detail on the Employee Engagement Forum and how employee engagement has been considered through the transformation programme can be found on page 121.

• We conducted our latest employee opinion survey, which closed in May 2026, to gather feedback from our colleagues, anonymously. The results of this survey gave us insight into key topics including our customers and clients, leadership, culture, a sense of belonging, and colleague wellbeing. Managers were assigned access to the survey results for their teams to understand more around colleague sentiment and determine localised action plans. This ensures we are focusing on the areas that matter most to our colleagues, as well as ensuring we are meeting the needs of other stakeholders.

• We held regular town halls, providing employees with updates from across the business and the opportunity to ask questions directly to senior management.

• We continued to engage with colleagues at the point of joining, when returning from parental leave and celebrating work anniversaries, through completing surveys to share their personal experiences of working at Close Brothers.

• We have eight employee-led inclusion networks which act as a voice for our colleagues.

  
  
  

  Stakeholder engagement continued

  Communities and environment

  Close Brothers is committed to contributing longterm value and making a positive impact on the communities in which we operate and the environment more broadly. This underpins the growing range of programmes and initiatives we support that benefit society and the environment.

  Engaging with local communities helps the Board and our employees develop their understanding of our customers and partners so that we can support them and help them to achieve their ambitions, whilst also building employee engagement. We firmly believe that environmental considerations should form an integral part of our business decisions, and employees across the group are actively engaged on responsible behaviours and environmental issues.

  Key priorities of our communities and the environment

  • A suitable strategy for approaching sustainability issues.

  • Support for community initiatives.

  • Take active steps to ensure equity of opportunity, regardless of background or experience.

  • A long-term focus on addressing the impacts of climate change.

    Our engagement during the year

  • Colleagues completed numerous volunteering activities to positively impact local communities, including volunteering at food banks, soup kitchens and local hospices and supporting youth groups such as Guides, Scouts and children's sports teams.

  • Several colleagues, including members of our Group Executive Committee, continue to fulfil trustee roles for various charities to support local communities.

    Close Brothers Group plc Annual Report 2026

  • Supported social mobility and disability awareness programmes, hosting 14 interns across the group in partnership with upReach and Variety, the Children's Charity.

    Investors

    Close Brothers has a proven and resilient business model and is focused on generating long-term, sustainable value for its investors, while also maintaining a strong balance sheet.

    Our investors are the providers of capital to our business, so it is important that we engage actively with them and listen and respond to their feedback through an established and comprehensive programme throughout the year.

    Key priorities of our investors

• Strong returns and financial resilience through the cycle.

• Managing the impact on the group following the FCA's review of historical motor finance commission arrangements and any subsequent consumer redress scheme.

• Capital generation and distributions.

• Sustainable business model.

• Appropriate governance practices and regard for environmental and social responsibility.

  Our engagement during the year

• Continued our comprehensive programme of communication, providing regular market updates and, in total, hosting over 200 meetings in the year with current and prospective equity and debt investors.

• Held analyst presentations for the Half Year 2026 and 2025 Preliminary results and attended multiple sales desk briefings and conferences, enabling market participants to further understand the performance.

• In March, alongside our Half Year results, we also hosted a deep dive business update, outlining the business and market opportunity for each of our businesses and providing further detail on the group's strategy and investment case.

• Undertook investor roadshows covering the UK, Europe and North America, meeting more than 70 existing and prospective equity and debt holders.

• Held our annual corporate governance roadshow, with our Chairman meeting with 12 of our largest shareholders.

• Welcomed retail investors at our AGM, where they had the opportunity to engage with Board members.

• Regularly engaged with all of our sell-side analyst followers, as well as our credit rating agencies.

‌Consistent service supporting

Governance report

Financial statements

lasting ambition

Strategic report

Close Brothers Motor Finance has supported Car Brothers Northern Ireland since the business was established in 2020, initially supplying funding to help build its stock while preserving capital to invest in infrastructure.

As the company has grown, Close Brothers has remained a consistent partner. Through a dedicated account manager who provides practical guidance and responsive support, the dealership has access to a familiar team that understands its business and ambitions.

This continuity is increasingly valuable as changing regulation, customer expectations and the transition to electric vehicles reshape the motor industry.

The relationship demonstrates that consistent service does not mean standing still. By combining dependable personal contact with products, tools and expertise that evolve with the market, we can continue to support the dealership through its next stage of development.

"We want to have a successful dealership and have no doubt that Close Brothers are going to be beside us, supporting us all the way."

Colin McNab Director, Car Brothers Northern Ireland

27

‌Sustainability report

Our sustainability objectives

Supporting our customers and partners in the transition towards more sustainable practices.

Promoting an inclusive culture in everything we do.

Reducing our impact on the environment and responding to the threats and opportunities of climate change.

Promoting financial inclusion, helping borrowers that might be overlooked by larger finance providers and enabling savers to access financial markets.

In our Sustainability Report, we set out how we are embedding our responsibility across the group, grounded in our distinctive model: deep expertise, strong customer relationships, disciplined risk management and a focus on delivering long-term value for all our stakeholders.

Our approach is both business-led and customer-led, recognising that customers are progressing through their sustainability journeys at different paces, not only across sectors but also within them. Rather than applying a single group-level pathway or interim targets that would not reflect this diversity, we focus on supporting customers in practical, commercially viable ways that align with their individual transition needs towards more sustainable practices.

We remain committed to our ambition of achieving net zero across our operations, supply chain and the activities we finance by 2050 or sooner, structured around three areas of focus:

1. Achieving net zero operational emissions

   We remain focused on reducing our own environmental impact across the areas we can directly control. Through 2026, we have further reduced our Scope 1 and 2 emissions against our 2019 baseline by 82%, while continuing to work with our supply chain to strengthen the measurement and management of relevant Scope 3 operational emissions.

2. Monitoring and managing financed emissions

   By providing finance, expertise and tailored support, we aim to help customers decarbonise in ways that are achievable, proportionate and consistent with their business priorities. To track our progress effectively, we continue to develop our understanding of the emissions linked to the assets and businesses we finance, giving us a clearer basis for managing climate-related impacts and delivering against our climate ambitions.

3. Financing the transition

Close Brothers Group plc Annual Report 2026

Sustainability-related financing is complementary to our existing portfolio and relationship-led model. By helping customers invest in assets, properties and technologies that improve efficiency, reduce reliance on fossil fuels or respond to changing end-market demand, we can deepen customer relationships, support attractive risk-adjusted returns and position the group to adapt quickly and capture future growth opportunities. We are building deeper capability in areas where sustainability, efficiency and commercial performance increasingly intersect.

Our divisions understand customers' day-to-day financing requirements, the constraints they face and the opportunities that arise as technology, regulation and customer demand evolve. This enables us to support sustainability-related investment alongside normal business-as-usual financing needs, rather than treating it as a separate or standalone activity.

This approach is already embedded across the group. In Commercial, we continue to support long-term UK infrastructure, including financing a 40MW solar project in Shropshire for Rock Farm. In Motor Finance, we continue to support EV adoption through our partners, capturing customer demand. In Property, sustainability is increasingly embedded within lending and customer relationships, including supporting customers developing eco-homes, Passivhaus schemes and Modern Methods of Construction. These examples demonstrate how we can help customers access lower-carbon, more efficient options while continuing to apply the same disciplined approach to underwriting, pricing and returns.

Our progress has also been recognised by the Financial Times Europe's Climate Leaders ranking, where we placed 34th in Europe among financial services, near the top of our peer group, for our progress in reducing greenhouse gas emissions and disclosing climate-related financial metrics.

Our wider sustainability agenda is underpinned by our culture and focus on customers, colleagues and the communities.

Financial inclusion remains a key part of how we create longterm value, supporting SMEs, borrowers and savers across the UK with access to specialist finance and savings products. Our relationship-based model enables us to help customers who may be under-served by larger financial institutions, supporting economic activity, job creation and prosperity in communities across the UK. In providing access to finance and savings products throughout economic cycles, we play an important role in supporting the real economy and the effective functioning of the UK financial system.

A strong, aligned culture is essential to delivering this agenda. When our colleagues understand our priorities and work together in an inclusive environment, we can bring the full strength of the group to bear for our customers.

By maintaining a clear connection between sustainability, culture, customer outcomes and long-term value creation, we continue to support stakeholders and build a stronger, more resilient business.

What sustainability means at Close Brothers

"Our responsibility is to help address the social, economic and environmental challenges facing our business, employees and customers. By understanding our customers' individual needs and providing disciplined, specialist finance, we can help them invest in more efficient, sustainable solutions in a way that supports their ambitions and strengthens our business."

Mike Morgan, Chief Executive

Our inclusivity

92%

of our colleagues feel included (2025: 91%).

Our charitable giving

£75,000

donated to charities aligned with our ESG goals (2025: £100,000).

Our communities

1,288

reading sessions have been delivered by 74 colleagues since the start of our partnership with Bookmark Reading Charity in 2020.

Strategic report

Governance report

Financial statements

At Close Brothers, we are here to help people and businesses thrive. This means supporting our colleagues and customers, as well as the communities and environment in which we operate.

Our green lending

£1 billion+

has been financed by our energy team across multiple energy projects over the last 12 years.

£226 million

lending for zero emissions battery electric vehicles achieved in this financial year (2025: £154 million).

Our emissions

82%

Scope 1 and 2 emissions (market-based)

reduction since 2019 (2025: 53%).

32%

Scope 1 and 2 emissions (market-based)

reduction in 2026.

Our social mobility

14 students

completed our six-week internship programme in partnership with upReach and Variety, the Children's Charity.

Our culture

90%

of employees believe they are treated with respect (2025: 90%).

Our car fleet

Our car fleet is now

72%

battery electric with average stated emissions now down to 8.5 gCO2/km (2025: 14.7 gCO2/km).

2026

2025

2024

2023

2022

2021

Environmental Social Governance

29

Sustainability report continued | Task Force on Climate-related Financial Disclosures report

‌Task Force on Climate-related Financial Disclosures Report We are pleased to present our fifth Task Force on Climate-related Financial Disclosures ("TCFD") report. Our disclosures comply with FCA UK Listing Rule (UKLR) 6.6.6R(8) and are consistent with the TCFD's 2017 Recommendations.

Where practicable, we have also incorporated the 2021 Annex to the Implementing Guidance.

Climate progress

During the financial year, Close Brothers delivered against its climate strategy through our three pillars: achieving net zero operations, monitoring and managing financed emissions, and financing the transition. The group reduced operational emissions, strengthened the quality and coverage of financed emissions reporting, and delivered measurable progress in transition-related financing. This progress reflects Close Brothers' business-led approach to climate management, balancing climate-related risks and opportunities while maintaining a resilient business model.

Highlights include:

Climate risk and resilience

• We completed a comprehensive review of climate risk management against the Prudential Regulation Authority's ("PRA") Supervisory Statement SS5/25 expectations, including climate scenario analysis.

• This assessment supported the group's view that its business model remains resilient to climate-related risks across all time horizons, driven primarily by its short average lending tenor and predominantly UK-based customer and asset base.

• We improved our climate risk monitoring through expanded physical risk indicators and continued to embed climate factors further within governance and risk management processes.

  Operational emissions

• Scope 1 and 2 market-based emissions from continuing operations reduced by 32%, from 1,160 tCO₂e in 2025 to 790 tCO₂e in 2026.

• Total emissions have decreased by 82% compared with the 2019 baseline (noting the baseline has not been restated to account for business disposals and therefore the reduction reflects changes in the group's structure rather than emissions reductions alone).

• Progress was supported by estate optimisation, fleet electrification, renewable electricity procurement and targeted energy-efficiency initiatives across the property portfolio, including occupancy-based building controls and heating system optimisation.

  Financed emissions

• Financed emissions reporting was enhanced through more granular PCAF-aligned methodologies, improved data quality, and increased transparency across our lending portfolio.

• Assessed approximately £9.3 billion of lending exposure, covering 96% of the loan book, with financed emissions intensity remaining broadly stable year on year.

  Supporting customer transition

• We supported customers through financing activities across renewable energy, electric vehicles, sustainable property and wider transition opportunities, including continued lending with a bespoke Green Asset Fund building expertise within emerging technologies, and £226 million of financing for zero-emission battery electric vehicles during the year.

  External ratings

• External recognition remained strong, with a 2025 CDP Climate Change score of B, and a current MSCI environmental, social and governance ("ESG") rating of AA and a Sustainalytics ESG Risk Rating of 23.8.

• Recognition by the Financial Times as one of Europe's climate leaders.

Sustainability and climate governance

Close Brothers Group plc Annual Report 2026

Climate-related risks and opportunities are integrated into Close Brothers' existing governance framework and subject to oversight through established Board, executive and risk management structures. The Board is responsible for the long-term success of the group and oversees the delivery of the group's sustainability and climate strategy, including the management of climate-related risks and opportunities. This oversight is supported by defined roles and responsibilities across the Board and its committees, ensuring climate considerations are appropriately reflected in strategic decision-making, risk management, and business planning.

Board oversight

The Board retains overall responsibility for oversight of climate-related risks and opportunities and for considering the resilience of the group's strategy under a range of future climate outcomes. They receive regular updates on sustainability and climate-related matters and approve the group's overall approach to risk management, including how climate factors are incorporated.

The Board Risk Committee ("BRC") supports the Board by overseeing the identification, assessment, and management of climate-related risks across the group. During the financial year, the Committee reviewed the outcomes of the group's climate-related risk assessment and oversaw the action plan arising from the group's SS5/25 self-assessment, including improvements to climate risk management, monitoring and reporting.

Management responsibility

The Chief Executive is accountable for the group's sustainability and climate strategy and is supported by the Executive Committee in determining how climate-related risks and opportunities are considered within business strategy and operations. At group level, the Executive Committee oversees implementation of the sustainability and climate strategy, reviews progress against key objectives and priorities, and monitors delivery of climate-related actions arising from risk assessments, scenario analysis and regulatory developments.

The Group Chief Risk Officer ("GCRO") has responsibility for the management of climate-related financial risks. Climate risk is managed through the group's existing risk management framework and governance processes, with oversight provided through the Group Risk and Compliance Committee ("GRCC"), Credit Risk Management Committee ("CRMC") and other established risk forums. Climate-related matters are reported through regular risk reporting channels, ensuring climate risks are assessed, monitored, and managed alongside the group's principal risks and other emerging risks. During the financial year, climate risk monitoring was further enhanced through additional physical risk monitoring and continued development of climate-related management information.

Climate capability and continuous improvement

Responsibility for climate-related reporting, risk management and oversight is embedded across relevant functions, including Risk, Investor Relations, and Procurement. During the year, Close Brothers continued to strengthen climate-related capabilities through targeted professional development and ongoing engagement with evolving industry standards and regulatory expectations. This included relevant professional development undertaken by members of the risk team to maintain and build climate expertise, including programmes such as the Partnership for Carbon Accounting Financials ("PCAF") Academy and the Global Association of Risk Professionals ("GARP") Sustainability and Climate Risk Certificate.

The group is strengthening its approach to climate governance through planned improvements to climate risk monitoring, embedding climate factors within risk management frameworks, and periodic review of climate risk materiality and scenario analysis.

The Group is also supported by edenseven, an independent sustainability consultancy, which provides technical support on climate-related reporting, operational greenhouse gas emissions accounting, and evolving regulatory and disclosure requirements.

Climate strategy

Close Brothers' climate strategy is delivered through three interconnected pillars: achieving net zero operations, monitoring and managing financed emissions, and financing the transition. Together, these pillars support the group's ambition to reduce its operational climate impact, strengthen understanding of emissions associated with lending activities, and support customers as they adapt to a lower-carbon economy.

As a specialist lender with a predominantly UK-focused portfolio, Close Brothers aligns its climate ambitions with its wider business strategy, recognising that progress towards a lower-carbon economy will be shaped by evolving customer needs, technological developments, regulatory change and market opportunities.

Climate-related risks and opportunities

Strategic report

Governance report

Financial statements

Close Brothers identifies climate-related risks and opportunities through monitoring of lending exposures and climate scenario analysis. Climate-related risks are considered across the group's defined time horizons of short term (0-1 year), medium term (1-3 years) and long term (greater than 3 years to 2050). The most relevant risks arise through both transition and physical channels, while opportunities are linked to the group's specialist lending model and its ability to respond to customer investment needs as the economy decarbonises.

Sustainability report continued | Task Force on Climate-related Financial Disclosures report

Time horizon Climate-related risks identified Climate-related opportunities identified

Implications for strategy and business planning

During the year, the group monitored these risks and opportunities through its climate risk management framework. The outputs informed the group's assessment of strategy resilience, as set out below.

Impact on strategy and business planning

The group's climate strategy informs business planning by linking identified climate-related risks and opportunities to monitoring of lending exposures, risk management, customer financing priorities and operational decision-making. This ensures climate considerations are addressed through existing strategic and risk processes, rather than managed separately from the group's wider business model.

During the year, this approach supported continued action across operational emissions reduction, financed emissions methodology improvements and transition-related customer financing.

Close Brothers' business-led approach provides flexibility to respond to evolving market, technological and regulatory developments while maintaining disciplined risk management across its lending activities.

Strategy resilience

Close Brothers Group plc Annual Report 2026

During the financial year, Close Brothers completed climate scenario analysis using the Network for Greening the Financial System ("NGFS") Delayed Transition and Current Policies scenarios to assess the implications of physical and transition risks across multiple time horizons to 2050. This analysis informed the group's assessment of climate-related risks and opportunities and the resilience of its business model. The group intends to refresh this analysis periodically as part of its ongoing approach to climate risk management.

These scenarios provide contrasting views of potential climate futures and their implications for the group. The Delayed Transition scenario reflects a disorderly transition in which global emissions do not begin to decline until 2030, requiring rapid and stringent policy intervention thereafter to limit warming to approximately 1.7°C. In contrast, the Current Policies scenario assumes no additional climate policies beyond those already implemented, resulting in continued emissions growth, significantly higher physical climate risks and approximately 3°C of warming by 2100.

Together, these scenarios enabled Close Brothers to assess climate-related risks from both a high transition risk perspective and a high physical risk perspective, providing insight into the potential impacts of differing policy responses and levels of climate change. Considering both scenarios therefore provides a balanced and comprehensive view of the group's climate-related risks and opportunities.

The assessment reaffirmed the resilience of the group's business model and did not identify any material idiosyncratic climate-related risks. A key factor supporting this conclusion is the group's relatively short average lending tenor of approximately 16 months, which enables lending portfolios to adapt over time in response to evolving customer preferences, technological developments, regulation and market conditions. This flexibility helps mitigate the potential impact of both transition and physical climate risks over the longer term.

O O'O

O

'O'

Risk management

Governance report

Climate-related risks are managed through Close Brothers' existing Enterprise Risk Management Framework ("ERMF") and are assessed alongside principal and other emerging risks. The group recognises that climate-related risks may affect existing risk categories, including credit, operational, reputational, funding and liquidity, and third-party risks. Climate factors are therefore embedded within existing governance, risk management and decision-making processes rather than managed as a standalone risk category.

Strategic report

Financial statements

Climate risk is a cross-cutting risk managed through the group's existing framework

Assessed as an emerging risk

Climate risk

May affect principal and other emerging risks

Credit risk

Counterparty, collateral and financed assets

Conduct risk

Customer outcomes and fair treatment

Third-party risk

Suppliers, outsourced services and dependencies

Reputational risk

Stakeholder confidence and credibility

Operational risk

Premises, people and operational resilience

Regulatory risk

Evolving supervisory and disclosure expectations

Business/strategic risk

Market change, technology and customer needs

Funding & liquidity risk

Investor behaviour and capital market implications

Identification and assessment of climate-related risks

Close Brothers identifies and assesses climate-related risks through a combination of established risk management processes, sector and asset-class analysis and climate scenario analysis. Climate-related risks are considered across both transition and physical risk channels and are assessed over short, medium and long-term time horizons to reflect the potential timing and nature of climate-related impacts.

Climate scenario analysis is a key tool used to support the identification and assessment of climate-related risks. During the financial year, the group used scenario analysis to assess potential implications for its business activities, lending portfolios and customers across multiple time horizons.

Outputs from the assessment will be reviewed annually through the Internal Capital Adequacy Assessment Process ("ICAAP"), with climate scenario analysis refreshed at least every five years.

In addition to scenario analysis, climate-related risks are identified through ongoing monitoring of lending exposures, counterparties and emerging risk trends. The group's climate risk methodology is applied across the majority of the Banking loan book and is used to identify exposures that may be more sensitive to climate-related developments, including energy-consuming assets such as motor vehicles and lending to higher-impact sectors. Emerging regulatory, market and sector-specific risks are also monitored to

assess potential impacts on customers and financed assets over time.

Climate-related risk assessments are supported by management information and risk reporting processes. During the year, the group enhanced its approach to physical risk assessment through the introduction of additional monitoring, including flood-risk indicators within relevant Property and Commercial portfolios. The outputs of climate risk assessments are reviewed through established governance processes and are used to inform risk management activities, strategic planning and the ongoing development of the group's climate risk framework.

The group is advancing its approach to climate risk identification and assessment, including further development of climate-related metrics and reporting capabilities.

Monitoring and management of climate-related risks

Climate-related risks are monitored through established governance, reporting, and risk management processes. Risk committees, including the Group Risk and Compliance Committee ("GRCC") and Board Risk Committee ("BRC"), receive regular reporting on climate-related matters, supported by management information, oversight of financed assets, and climate risk assessments.

Monitoring activities focus on sectors, portfolios, and asset classes that may be more sensitive to climate-related

Sustainability report continued | Task Force on Climate-related Financial Disclosures report

developments, together with emerging regulatory, market, and physical risk trends. During the financial year, Close Brothers expanded its climate risk monitoring capabilities, including the introduction of additional physical risk indicators and flood-risk monitoring within relevant lending portfolios.

Where climate-related risks are identified, these are managed through existing risk management tools and processes, including credit risk management, risk appetite frameworks, policy development and operational resilience

arrangements. Climate considerations are incorporated into relevant lending, supplier and third-party oversight processes, helping to ensure that potential climate-related impacts are considered alongside broader commercial and risk factors.

During the year, Close Brothers continued to enhance its climate risk management capabilities, with a focus on improving the monitoring, oversight and reporting of climate-related risks and opportunities and embedding climate considerations within existing risk management processes.

Metrics and targets

Close Brothers uses a range of operational, financed emissions and climate risk metrics to monitor climate-related risks and opportunities and to assess progress against its climate objectives. Metrics are reviewed through established governance and risk management processes.

Metrics used to assess climate-related risks and opportunities

The group uses both climate performance metrics and climate risk metrics to support the assessment of climate-related risks and opportunities. Operational emissions, financed emissions and transition finance activity provide insight into the group's climate impacts and transition-related opportunities. Climate risk metrics are used to assess lending exposures that may be sensitive to physical or transition risks and support reporting through governance and risk management forums.

Targets and performance monitoring

Achieving net zero operations

Close Brothers remains committed to its ambition of achieving net zero operations by 2050 and monitors progress through operational emissions and energy-related performance metrics. Since 2019, Scope 1 and 2 emissions have reduced by approximately 82% (noting the baseline has not been restated to account for business disposals and therefore the reduction reflects both changes in the group's structure as well as emissions reductions). The reductions reflect the impact of estate optimisation, renewable electricity procurement, fleet electrification and energy efficiency initiatives implemented across the group.

Monitoring and managing financed emissions

Close Brothers Group plc Annual Report 2026

The group does not currently use financed emissions reduction targets as a primary strategic measure, reflecting its business-led approach and focus on supporting customers' individual transition pathways.

Instead, the group monitors financed emissions data alongside relevant climate risk indicators and measures of sustainable finance lending. These measures support the assessment of climate-related risks and opportunities and help inform the ongoing development of the group's climate strategy and risk management approach.

Financing the transition

Close Brothers supports customers through financing solutions that enable the transition to a lower-carbon economy. During the financial year, the group provided continued support of renewable energy financing and £226 million of financing for zero-emission battery electric vehicles. The group also continued to develop specialist capabilities through its Green Asset Fund, supporting investment in emerging technologies and sectors expected to play an important role in the transition. In sustainable property lending, 79% of the relevant portfolio is Energy Performance Certificate ("EPC") rated A or B, and the group will respond to customer demand and evolving regulatory frameworks in relation to energy-efficient homes and sustainable developments.

Future focus

During the upcoming financial year, Close Brothers will focus on implementing actions arising from its SS5/25 review, including improving climate risk reporting, strengthening physical risk assessment capability and building climate insights into governance and risk management processes. The group will continue to review opportunities to reduce operational emissions, improve financed emissions data quality and methodologies, and support transition-related financing activities in response to customer demand, regulatory developments and market opportunities.

Scope 1 and 2 operational emissions (market-based) tCO2e

32%

Governance report

operational emissions reduction in the year

Total energy use (GWh)

26%

reduction in energy consumption

2026

790

2025

2026

1,160

7.14

5.29

2025

Strategic report

Our operational impacts

Market-based Location-based

Financial statements

Greenhouse gas emissions1,2,4,5 Emissions source

2026

tCO2e

2025

tCO2e

2026

tCO2e

2025

tCO2e

Energy use

2026

GWh

2025

GWh

Market-based tCO2e per employee

Location-based tCO2e per employee

Emissions intensity 2026 2025 2026 2025

Notes on methodology

1. We have reported on all emission sources required under the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.

2. Emissions have been calculated in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and are reported as tonnes of carbon dioxide equivalent (tCO₂e). Emissions factors published by the UK government have been applied throughout the assessment. Operational emissions have been calculated using activity-based data wherever available, including utility consumption, vehicle fuel use, travel records, and supplier information.

3. To support meaningful year-on-year comparisons following the disposal of Winterflood and Brewery Rentals, 2025 comparative emissions have been restated to exclude both businesses. Unless otherwise stated, all operational emissions disclosures presented in this report are reported on a continuing operations basis.

4. During the year, methodological enhancements were implemented across several Scope 3 categories to improve the accuracy and completeness of reported emissions. These included increased use of supplier-specific emissions factors, enhanced employee commuting calculations, and broader use of activity-based data sources, contributing to lower, more precise emissions totals. Prior-year figures have been recalculated and restated on a consistent basis to support comparability across reporting periods.

5. Vehicles are leased rather than owned; however, as Close Brothers has operational control over their use, the associated emissions are accounted for as Scope 1 emissions.

6. Where primary data was unavailable, reasonable estimates and assumptions have been applied in accordance with the group's reporting methodology. Scope 3 emissions will continue to be refined as data and reporting practices improve.

7. These reported emissions have not been subject to external assurance.

Sustainability report continued | Task Force on Climate-related Financial Disclosures report

Our financed impacts: Banking2,4

2026 2025

Economic emissions

Economic emissions

Financed emissions in

loan book - Bank PCAF methodology

PCAF

score3

Proportion

of loan book

Financed emissions1,2

tCO2e

intensity ktCO2e/

£ million

PCAF

score3

Proportion of loan book

Financed emissions1,2

tCO2e

intensity ktCO2e/

£ million

Business

PCAF

score3

Financed emissions1,2

tCO2e

PCAF

score3 Financed emissions1,2 tCO2e

Notes on methodology

1. All financed impact figures reflect the current group structure and the latest available calculation methodologies. Where relevant, prior-year figures have been recalculated and restated on a consistent basis to support comparability across reporting periods.

2. Financed emissions have been calculated in accordance with the Partnership for Carbon Accounting Financials ("PCAF") Global GHG Accounting and Reporting Standard. Current calculations primarily include Scope 1 and Scope 2 emissions associated with financed assets and businesses. Close Brothers continues to engage with PCAF and industry peers to support the ongoing development of methodologies, data quality and financed emissions reporting practices.

3. PCAF data quality scores range from 1 (highest quality) to 5 (lowest quality). Changes in data quality scores between reporting periods may reflect enhancements to underlying data or methodological refinements. In-year, changes in the vehicle hire data quality score reflect updates to the calculation approach and reducing size and strategic significance. Data quality remains dependent on the availability of external information across some asset classes.

4. A small proportion of the group's lending portfolio remains unassessed or out of scope due to the absence of established carbon accounting methodologies or limitations in available data. Close Brothers continues to support the development of industry approaches in these areas through engagement with PCAF and other financial institutions.

   Close Brothers Group plc Annual Report 2026

5. These reported financed emissions have not been subject to external assurance.

Sustainability across our businesses

The distinctive strengths of our business model are enabled by the deep expertise we have in specialist markets, the consistent and personalised service we provide to customers, and the long-term relationships we build across markets. These same strengths drive our approach to financing the climate transition, through our deep market knowledge, expertise in green asset classes and strong customer relationships. Our flexible and prudent approach is focused on striking the right balance between risk and commercial viability.

Governance report

Sustainability in action

Strategic report

Commercial

The energy team recently provided funding for the construction and operation of Unibal's latest battery energy storage system ("BESS") in Kilwinning, Scotland.

Financial statements

The 27-megawatt project can store up to 108MWh of excess electricity, roughly enough to power 10,000 average homes for an hour, supplying it back to the grid when required. Battery storage systems are playing an increasingly important role in the UK's energy transition by replacing fossil fuels and helping to balance renewable generation, improving grid stability and strengthening resilience.

Kilwinning represents the third BESS project in Unibal's growing portfolio and builds on a long-standing relationship with Close Brothers. As Unibal continues to expand its battery storage capability, the project reflects the growing contribution of firms like theirs in supporting a more flexible, resilient and sustainable energy system across the UK.

Retail

Close Brothers Motor Finance is supporting the transition to electric vehicles through partnerships such as Pod Point. Through these partnerships, we provide electric vehicle training for colleagues and dealer partners, while also offering access to discounted home chargers through our dealer network, helping to make the switch to electric more affordable for drivers across the UK.

Property

Close Brothers Property Finance has agreed a £20 million Revolving Credit Facility with award-winning housebuilder gs8 to support the development of Medburn Yard, a 52-home residential scheme in Radlett, Hertfordshire. The site will be transformed into a distinctive new residential community that combines heritage, sustainability and modern living.

Designed with sustainability and community at its core, the development will feature a zero energy bills guarantee for at least 10 years through a partnership with Octopus Energy, alongside shared amenities including an electric car and bike club, a DIY and reuse centre, and landscaped communal spaces. The development incorporates 14 affordable homes.

By supporting Medburn Yard, Close Brothers is helping deliver energy-efficient homes and demonstrating how sustainable design, heritage assets and high-quality placemaking can work together to create thriving communities.

Sustainability report continued

Our policies

We are committed to acting responsibly through all our ways of working, and have a number of group-wide policies and procedures in place to ensure we continue to operate in a socially responsible and compliant manner. Below is a list of group policies which are relevant to the Sustainability Report.

Dignity at Work Policy

Our Dignity at Work Policy outlines the type of behaviour that the company considers to be unacceptable and explains what solutions there are if any employee has experienced or believes someone else has experienced any discrimination, harassment or bullying at work.

We ensure equal opportunities for all, including having a commitment as part of our Dignity at Work Policy to ensure no employee is subject to discrimination. This applies to all work contexts, as well as all employee life cycle events, for example in recruitment, training, promotion and flexible working requests.

We strive to create an environment where employees feel safe and supported to self-identify whether they consider that they have a disability, to have open conversations with their managers, raise issues and discuss their specific workplace adjustment needs, and for the company to provide the appropriate support to assess and implement any reasonable adjustments. We also partner with Inclusive Employers to support our inclusive approach to hiring, retention, training, career development and promotion of employees with disabilities.

Whistleblowing Policy

We provide a simple, transparent and secure environment for our employees, shareholders and other stakeholders to raise concerns about any potential wrongdoing within the company.

We encourage our employees to report any activity that may constitute a violation of laws, regulations or internal policy, and reporting channels are provided to staff for this purpose within the framework of a Whistleblowing Policy.

Employee Health and Safety Policy

Close Brothers Group plc Annual Report 2026

Our Health and Safety Policy demonstrates our commitment to ensuring our employees and visitors are safe and sets the framework for our safety culture. We continue to provide a safe and healthy working environment for our employees and visitors in accordance with the Health and Safety at Work etc. Act 1974 and the Management of Health and Safety at Work Regulations 1999.

The Health and Safety Committee continues to meet on a quarterly basis, and we are proud of the ongoing progress in successfully raising the profile of health and safety across the business. This year we recorded 25 incidents across all our sites. We continue to use an online risk assessment tool to manage site-specific risks as appropriate and our Display Screen Equipment risk assessment programme. We also carry out annual audits of all premises and monitor findings through a live dashboard.

Data Protection Policy

Our Data Protection Policy codifies our approach to protecting personal data, in line with all relevant data protection legislation where we operate. It sets out our core principles on how personal data can be processed, and is supported by a number of standards which detail controls to ensure compliant processing of personal data through its life cycle.

We have a nominated Data Protection Officer who is accountable for the firm's approach to data protection management, a Chief Information Security Officer accountable for our approach to cyber security, and a broader operating model in which the data protection and security requirements are embedded in operations throughout the organisation.

Financial Crime Policy

Our policies and standards are intended to prevent the group, employees, customers and any other associations or representatives from being used for the purposes of financial crime, including, but not limited to, money laundering, terrorist financing, facilitation of tax evasion and circumvention of financial sanctions.

We are committed to carrying out business fairly, honestly and openly, operating a zero-tolerance approach to bribery and corruption. We are dedicated to ensuring full compliance with all applicable anti-bribery and corruption laws and regulations, including the UK Bribery Act 2010.

Board Diversity and Inclusion Policy

The Board is committed to ensuring it collectively possesses the right balance of skills and diversity to ensure the success of the group. Our Board Diversity and Inclusion Policy, which applies to both the Board and its committees, sets out specific objectives with regard to diversity and inclusion in the boardroom, the recruitment of new directors, and longer-term targets, as well as corresponding governance responsibilities.

The Board fosters an inclusive culture which allows views from all perspectives to be given due consideration and enables the Board to consider the needs and expectations of all its stakeholders.

Human Rights and Modern Slavery Act

The Board gives due regard to human rights considerations, as defined under the European Convention on Human Rights and the UK Human Rights Act 1998. We are aware of our responsibilities and obligations under the Modern Slavery Act, with the appropriate policies and training in place to enable compliance across the organisation.

The Banking division has also committed to the CIPS Ethical Code of Conduct, which supports our commitment to preventing modern slavery from existing within our supply chain. Further details of our compliance with the Modern Slavery Act can be found on our website.

Tax Strategy

We are committed to complying with our tax obligations and doing so in a manner consistent with the spirit as well as the letter of tax laws. This includes a transparent and cooperative relationship with the tax authorities. Our tax obligations arise mainly in the UK, where our operations and customers are predominantly based. Our straightforward business model reduces the complexity of our tax affairs and helps us maintain a lower risk tax profile. Further details of our approach to tax can be found on our website.