Final Results

About this update from Manx Financial Group Plc

[{"type":"text","content":"\n \n   \n   \n   \n   \n F OR IMMEDIATE RELEASE                                                                                                                        26 March 2024 \n      \n   \n Manx Financial Group PLC (the 'Company' or the 'Group') \n   \n Report and accounts for the year ended 31 December 2023   \n   \n Manx Financial Group PLC (LSE: MFX), the financial services group which includes Conister Bank Limited, Conister Finance & Leasing Ltd, Payment Assist Limited, Blue Star Business Solutions Limited, Edgewater Associates Limited and MFX Limited presents its audited final results for the year ended 31 December 2023. \n   \n Jim Mellon, Executive Chairman, commented: \"I am pleased to report another set of record results with a 35% increase in Profit Before Tax to £7.0 million.\" \n                                  \n The 2023 Audited Annual Report and Accounts will be posted to Shareholders and will be available from the Company's website  www.mfg.im  shortly. Details concerning the 2023 Annual General Meeting will be announced in due course. \n   \n This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014 on market abuse. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. \n   \n For further information, please contact: \n   \n \n \n \n \n Manx Financial Group PLC \n Denham Eke, \n Executive Vice Chairman \n Tel +44 (0)1624 694694 \n \n \n Beaumont Cornish Limited \n Roland Cornish/James Biddle \n Tel +44 (0) 20 7628 3396 \n \n \n Greentarget Limited \n J amie Brownlee \n Tel +44 (0) 20 3307 5726 \n \n \n \n \n   \n   \n   \n Dear Shareholders \n   \n Introduction \n With the continuing conflicts in Ukraine and Palestine, together with rising energy costs and the disruption in the Red Sea to world supply chains, the global economy remained inflationary and fragile. Our home markets in the Isle of Man and UK were not immune to these factors. Indeed, the Bank of England continued to grapple with stubbornly high inflation throughout the year and, as a consequence, approved five interest rate increases as part of their strategy to bring inflation back into their target range of less than 2%. The higher than targeted inflation rate was not offset by a corresponding increase in wages which has put many families and businesses under a real cost of living crisis. \n   \n Despite this negative backdrop, thus far the Group has not experienced a corresponding increase in arrears. This reflects positively on the integrity of our underwriting, the products we offer, and the markets we continue to serve. \n   \n Our financial performance for the year also reflects this resilience and I am pleased to report another set of record results with a 35% increase in Profit Before Tax to £7.0 million (2022: £5.2 million), with our basic Earnings Per Share increasing to 4.59p (2022: 3.77p) - an improvement of 21.8%. At the Profit After Tax payable level of £6.1 million (2022: £4.7 million), £5.3 million (2022: £4.3 million) was due to the Group's shareholders, and £0.9 million (2022: £0.3 million) was due to minority interests. This improvement was due to a number of factors including operating income growth - augmented with a full year's impact from Payment Assist Limited, a gain in debt securities and a lower charge for provisioning and impairments. \n   \n Our financial performance also strengthened our balance sheet with total assets increasing by £101.4 million to £480.7 million (2022: £379.3 million), and our shareholder equity increased by £6.2 million to £36.0 million (2022: £29.8 million). This outcome allows the Board to recommend continuing our policy of returning 10% of the Group's profit available to shareholders in the form of cash and/or shares. This year the total dividend available for payment is £0.53 million (2022: £0.43 million). Thus, the amount recommended for shareholder approval at our Annual General Meeting will be 0.4551 pence per share (2022: 0.3764 pence per share) - a 20.9% uplift. \n   \n On a separate note, I appreciate there has been a lot of media comment surrounding the FCA announcement that they are reviewing whether customers have lost out as a result of variable commission arrangements on lending to the motor finance sector. The outcome and potential impact of the FCA's review will not be known until they report their findings, expected to be sometime later this year. Despite having some exposure in this area, our initial review suggests that any liability will be minimal with no present need for any provision. Notwithstanding, the Board recognises the requirement to plan for a range of possible outcomes but currently it does not expect the issue to materially impact the Group's results, if at all. \n   \n Financial Performance \n This year's financial performance is again a record despite the previously mentioned economic headwinds impacting on both of our trading locations. \n   \n For the third year running, Conister Bank Limited (\"Conister\") set a new lending record of £352.5 million (2022: £231.4 million), an increase of 52.3%. With increases in the cost of deposits reflecting the five increases in the UK interest rate, our cost of funds was negatively impacted with yield compression of 12.7% to 71.3% (2022: 84.0%) in the year. Nevertheless, our net interest income increased substantially by £8.0 million to £32.4 million (2022: £24.4 million). \n   \n With other operating subsidiaries again making a positive contribution, notably Conister Finance & Leasing Ltd, Payment Assist Limited and MFX Limited, this resulted in operating income increasing by £5.4 million to £31.5 million (2022: 26.1 million). Operating income has now increased by 57.0% over the last two years. \n   \n Operating expenses, excluding provisions, increased by £3.4 million to £20.3 million (2022: £16.9 million), reflecting the full cost of consolidating Payment Assist Limited into the Group along with an incremental increase in overheads relating to obtaining our UK Branch deposit taking licence. Provisions increased by £0.1 million to £4.1 million (2022: £4.0 million). \n   \n Turning to the Group's balance sheet, total assets increased by £101.1 million to £480.7 million (2022: £379.3 million). This was driven by a £71.2 million increase in the net loan book and a £35.5 million increase in Treasury Bills to support regulatory liquidity requirements. Isle of Man deposits grew by £86.2 million to £390.4 million (2022: £304.2 million). Total liabilities stood at £444.7 million (2022: 349.5 million), leading to an increase in equity of £6.2 million to £36.0 million (2022: £29.8 million). The debt to asset ratio, measured as being total debt as a percentage of total tangible assets, remains robust at 95.5% (2022: 95.5%) meaning liabilities are covered by assets 1.1 times (2022: 1.1 times). \n   \n Key Objectives \n After a period of economic uncertainty, I am cautiously optimistic that over the next 24 months we will move to a more normalised interest and inflation rate environment. Until we get to that position, our key objective will continue to be to increase shareholder value as prudently as possible. Thus, our strategic focus remains unchanged, namely to: \n   \n §  Provide the highest quality of service throughout our operations to all customers, ensuring that their treatment is both fair and appropriate \n §  Continue adopting a pro-active strategy to managing risk, including climate risk, within a structured and compliant manner \n §  Concentrate on developing our core business by considered acquisitions, increasing prudential lending, and augmenting the range of financial services we offer \n §  Prudently progress the implementation of an enhanced and scalable IT infrastructure to better service the operational requirements of a growing Group without the requirement for a disproportionate increase in headcount and other associated operational costs \n §  Continue to develop our Treasury management to improve the return on the liability side of our balance sheet; and \n §  Manage our balance sheet to exceed the regulatory requirements for capital adequacy \n   \n To continue to grow shareholder value, we will need to grow the balance sheet as our scale is still sub-optimal. With organic growth this year partially dependent upon an improved economic environment, we need to re-focus our non-dilutive acquisition strategy. Further details are included under \"Business Model and Strategy\" on page 8 of the Annual Report. \n   \n Environmental, Social and Corporate Governance \n The Group takes social responsibility seriously and remains committed to reducing its impact on the environment, and to making a positive contribution to the communities in which we live and work. \n   \n Our Environmental, Social, and Governance (\"ESG\") initiatives, are integral to our commitment to sustainable development and corporate responsibility. This year, more than ever, we have witnessed the importance of resilience and adaptability, and our ESG policy has been at the heart of our strategy to navigate these challenges. We have made significant strides in embedding our ESG principles across all levels of operations. Our commitment to a whole business approach, focusing on what matters, applying best practices, using our influence responsibly, and ensuring accountability, has driven meaningful progress towards our sustainability goals. \n   \n In particular, our efforts towards better understanding our carbon footprint, enhancing product development for sustainability, and embedding diversity, equity, and inclusion into our corporate culture have been noteworthy. We are also proud of the progress made in upskilling our workforce on ESG matters and integrating these principles. The financial results for this period reflect not only our economic resilience but also our commitment to social and environmental responsibility. Our financial performance, while robust, is just one aspect of our success. The true measure of our achievements lies in our positive impact on society and the environment, as guided by our comprehensive ESG policy. \n   \n Looking ahead, we remain dedicated to advancing our ESG commitments, aware that our journey towards sustainability is continuous. We will keep pushing the boundaries of what is possible and fostering a culture of responsibility and inclusiveness. \n   \n Our ESG progress is available on page 11 of the Annual Report and our Corporate Governance Report outlining our adherence to the Quoted Companies Alliance Code is detailed on page 23 of the Annual Report. \n   \n Operating Unit Review \n Our principal operating subsidiaries continued with their strategy of growth through gaining market share in recession-proof markets as demand for our products remained buoyant which resulted in record advances in the year. \n   \n Conister Bank Limited and Conister Finance & Leasing Ltd \n Conister, together with its wholly owned subsidiary, Conister Finance & Leasing Ltd, remained the driver of the Group's financial performance recording a Profit After Tax of £2.2 million (2022: £1.8 million). \n   \n In its home market, Conister continues to grow its loan book, lending £56.3 million (2022: £50.5 million) during the year. The net loan book stands at £78.1 million (2022: £68.4 million). This book continues to have exceptionally low arrears, 1.89% (2022: 1.95%). \n   \n In the UK, growth has been driven by our Structured Finance products with lending increasing by £93.1 million to £246.2 million (2022: £153.1 million). The structuring of these facilities continues to minimise the risk of default and is proving a successful mechanism for growth in this difficult environment. \n   \n The Isle of Man deposit base has again proved very loyal with an 77% retention rate (2022: 78%). This, along with new deposits of £156.0 million (2022: £106.3 million), provided ample liquidity to allow Conister to achieve its record growth and to provide support for the future. \n   \n In October 2023, Conister obtained its UK Branch Deposit Taking permissions which, as well as providing an alternative source of liquidity, will allow the Bank to access new lending and liquidity opportunities. We anticipate taking UK deposits in the second half of 2024, principally via a user-friendly online process. \n   \n Overheads, excluding provisions, increased by £1.5 million to £11.9 million (2022: £10.4 million) as the business geared up to become operationally ready to take deposits in the UK. Prudently, it has bolstered its Credit and Collections teams to continue to protect Conister during these challenging times. \n   \n Provisions reduced by £0.3 million to £9.3 million (2022: £9.6 million) and now represent 2.6% of the net loan book (2022: 3.3%). This reduction provides a positive reflection on the quality of the loan book. \n   \n The Bank's total assets have increased by £97.8 million to £451.8 million (2022: £354.0 million), driven by loan book growth of £68.0 million. Liabilities have increased by £90.8 million, with deposits increasing by £86.2 million to £390.4 million. As a result, Conister's equity has increased by £7.0 million to £41.5 million (2022: £34.5 million). \n   \n Following the award of the UK Banking Licence, Conister Finance & Leasing Ltd will be restructured during 2024, with the regulated activities merged into Conister. The Basingstoke office will continue as the Conister's UK branch for deposit taking and regulated lending. \n   \n MFX Limited \n Our foreign exchange brokerage continued with an impressive performance considering these turbulent times and earned a profit of £0.7 million (2022: £1.4 million). Dividends paid to the Group in the year were £0.8 million (2022: £1.8 million). \n   \n Payment Assist Limited \n This is the first full financial year that this business's result has been consolidated into the Group's annual accounts. The business operates mostly in the short-term lending market and exceeded our financial expectations in the year by delivering £4.0 million to the Group in terms of interest income to Conister and recharges for Group services. \n   \n Turnover was £10.8 million (2022: £10.1 million), Operating Profit was £2.7 million (£2022: £1.8 million) leading to a Profit After Tax of £2.1 million (2022: £0.8 million). As previously reported, the Group owns 50.1% of Payment Assist Limited, with the opportunity to acquire the remaining percentage from the beginning of 2027. \n   \n Edgewater Associates Limited \n We restructured the company at the end of 2023 and, as a result, there are signs of a more sustained profitability for the future. Edgewater Associates Limited contributed £0.4 million (2022: £nil) in dividends to the Group. \n   \n Other operating subsidiaries \n All other operating subsidiaries contributed positively to the Group's results. \n   \n Outlook \n I believe that the high interest rate environment will persist during 2024 and this will continue to dampen our net interest margin, but it should not reduce the demand for our products. Shorter term lending in particular - loans less than 12 months - will continue to be much in demand for small businesses and consumers alike. Whilst I remain cautious about overall organic growth this year, accretive acquisition opportunities are available. We will remain prudent in our approach to these opportunities, and we will only progress such acquisitions if they can be delivered without any shareholder dilution. \n   \n Looking further ahead, the unwinding of the pressure on our net interest margin will naturally drive organic growth. This, along with any accretive acquisitions we make in the meantime, will create an even more robust, diversified financial services Group which will support our ongoing objective of continuously enhancing shareholder value. \n   \n Conclusion \n I would like to take this opportunity to thank our staff and Board of Directors for their support in making this result possible and for setting the Group on the right footing for the opportunities and challenges that lie ahead. I would also like to thank the Executives for gaining the new UK Branch deposit taking licence in less than 12 months - a magnificent achievement and well done to all involved. Finally, I would like to thank my fellow shareholders for their continued support.   \n   \n   \n   \n Jim Mellon \n Executive Chair \n 25 March 2024 \n   \n   \n CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME \n   \n \n \n \n \n  For the year ended 31 December \n \n \n Notes \n \n \n \n \n \n 2023 \n £000 \n \n \n \n \n \n 2022 \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Interest revenue calculated using the effective interest method \n \n \n \n \n \n \n \n \n 45,356 \n \n \n \n \n \n 28,978 \n \n \n \n \n Other interest income \n \n \n \n \n \n \n \n \n 1,535 \n \n \n \n \n \n 1,765 \n \n \n \n \n Interest expense \n \n \n \n \n \n \n \n \n (14,530) \n \n \n \n \n \n (6,391) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net interest income \n \n \n 9 \n \n \n \n \n \n 32,361 \n \n \n \n \n \n 24,352 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Fee and commission income \n \n \n 10 \n \n \n \n \n \n 3,997 \n \n \n \n \n \n 4,719 \n \n \n \n \n Fee and commission expense \n \n \n 10 \n \n \n \n \n \n (7,327) \n \n \n \n \n \n (3,569) \n \n \n \n \n Depreciation on leasing assets \n \n \n 22 \n \n \n \n \n \n - \n \n \n \n \n \n (16) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net trading income \n \n \n \n \n \n \n \n \n 29,031 \n \n \n \n \n \n 25,486 \n \n \n \n \n Other operating income \n \n \n \n \n \n \n \n \n 364 \n \n \n   \n \n \n 314 \n \n \n \n \n Gain / (loss) on financial instruments \n \n \n 19 \n \n \n \n \n \n 195 \n \n \n \n \n \n (19) \n \n \n \n \n Realised gain on debt securities \n \n \n 18 \n \n \n \n \n \n 1,893 \n \n \n \n \n \n 292 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Operating income \n \n \n \n \n \n \n \n \n 31,483 \n \n \n \n \n \n 26,073 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Personnel expenses \n \n \n 11 \n \n \n \n \n \n (12,170) \n \n \n \n \n \n (9,764) \n \n \n \n \n Other expenses \n \n \n 12 \n \n \n \n \n \n (6,627) \n \n \n \n \n \n (5,806) \n \n \n \n \n Provision for impairment on loans and advances to customers \n \n \n 13 \n \n \n \n \n \n (4,135) \n \n \n \n \n \n (3,990) \n \n \n \n \n Depreciation \n \n \n 22 \n \n \n \n \n \n (825) \n \n \n \n \n \n (738) \n \n \n \n \n Amortisation and impairment of intangibles \n \n \n 23 \n \n \n \n \n \n (683) \n \n \n \n \n \n (582) \n \n \n \n \n Share of profit of equity accounted investees, net of tax \n \n \n 30 \n \n \n \n \n \n - \n \n \n \n \n \n 18 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Profit before tax payable \n \n \n 14 \n \n \n \n \n \n 7,043 \n \n \n \n \n \n 5,211 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Income tax expense \n \n \n 15 \n \n \n \n \n \n (903) \n \n \n \n \n \n (537) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Profit for the year \n \n \n \n \n \n \n \n \n 6,140 \n \n \n   \n \n \n 4,674 \n \n \n \n \n   \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n \n \n \n 2023 \n £000 \n \n \n \n \n \n 2022 \n £000 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Profit for the year \n \n \n \n \n \n \n \n \n 6,140 \n \n \n \n \n \n 4,674 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Other comprehensive income: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Items that will be reclassified to profit or loss \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Unrealised gain on debt securities \n \n \n 18 \n \n \n \n \n \n 324 \n \n \n \n \n \n 131 \n \n \n   \n \n \n \n \n Related tax \n \n \n \n \n \n \n \n \n (32) \n \n \n \n \n \n - \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Items that will never be reclassified to profit or loss \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Actuarial gain on defined benefit pension scheme taken to equity \n \n \n 28 \n \n \n \n \n \n 29 \n \n \n \n \n \n 407 \n \n \n   \n \n \n \n \n Related tax \n \n \n \n \n \n \n \n \n (3) \n \n \n \n \n \n - \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Other comprehensive income, net of tax \n \n \n   \n \n \n   \n \n \n 318 \n \n \n \n \n \n 538 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Total comprehensive income for the period attributable to owners \n \n \n \n \n \n \n \n \n 6,458 \n \n \n   \n \n \n 5,212 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Profit attributable to: \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Owners of the Company \n \n \n \n \n \n \n \n \n 5,288 \n \n \n   \n \n \n 4,331 \n \n \n   \n \n \n \n \n Non-controlling interests \n \n \n 32 \n \n \n \n \n \n 852 \n \n \n   \n \n \n 343 \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n 6,140 \n \n \n   \n \n \n 4,674 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Total comprehensive income attributable to: \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Owners of the Company \n \n \n \n \n \n \n \n \n 5,606 \n \n \n   \n \n \n 4,869 \n \n \n   \n \n \n \n \n Non-controlling interests \n \n \n 32 \n \n \n \n \n \n 852 \n \n \n   \n \n \n 343 \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n 6,458 \n \n \n   \n \n \n 5,212 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Earnings per share - Profit for the year \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Basic earnings per share (pence) \n \n \n 16 \n \n \n \n \n \n 4.59 \n \n \n   \n \n \n 3.77 \n \n \n   \n \n \n \n \n Diluted earnings per share (pence) \n \n \n 16 \n \n \n \n \n \n 3.51 \n \n \n   \n \n \n 2.93 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Earnings per share - Total comprehensive income for the year \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Basic earnings per share (pence) \n \n \n 16 \n \n \n \n \n \n 4.86 \n \n \n   \n \n \n 4.24 \n \n \n   \n \n \n \n \n Diluted earnings per share (pence) \n \n \n 16 \n \n \n \n \n \n 3.71 \n \n \n   \n \n \n 3.28 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n The Directors believe that all results derive from continuing activities. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME \n   \n \n \n \n \n For the year ended 31 December \n \n \n Notes \n \n \n   \n \n \n 2023 \n £000 \n \n \n   \n \n \n 2022 \n £000 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Interest income calculated using the effective interest method \n \n \n \n \n \n \n \n \n 862 \n \n \n \n \n \n 522 \n \n \n   \n \n \n \n \n Dividend income \n \n \n \n \n \n \n \n \n 1,200 \n \n \n \n \n \n 1,575 \n \n \n   \n \n \n \n \n Other income \n \n \n \n \n \n \n \n \n 584 \n \n \n \n \n \n 69 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Operating income \n \n \n \n \n \n \n \n \n 2,646 \n \n \n \n \n \n 2,166 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Personnel expenses \n \n \n 11 \n \n \n \n \n \n (62) \n \n \n \n \n \n (127) \n \n \n   \n \n \n \n \n Administration expenses \n \n \n \n \n \n \n \n \n (61) \n \n \n \n \n \n - \n \n \n   \n \n \n \n \n Depreciation expense \n \n \n 22 \n \n \n \n \n \n (63) \n \n \n \n \n \n (65) \n \n \n   \n \n \n \n \n Amortisation expense \n \n \n 23 \n \n \n \n \n \n (57) \n \n \n \n \n \n (2) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Profit before tax payable \n \n \n \n \n \n \n \n \n 2,403 \n \n \n \n \n \n 1,972 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Tax payable \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Profit for the year \n \n \n \n \n \n \n \n \n 2,403 \n \n \n   \n \n \n 1,972 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n \n \n \n 2,403 \n \n \n   \n \n \n 1,972 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n The Directors believe that all results derive from continuing activities. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n CONSOLIDATED STATEMENT OF FINANCIAL POSITION \n   \n \n \n \n \n   \n As at 31 December \n \n \n \n \n \n \n \n \n   \n Notes \n \n \n \n \n \n 2023 \n £000 \n \n \n \n \n \n 2022 \n £000 \n \n \n \n \n   \n Assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n \n \n 17 \n \n \n \n \n \n 12,107 \n \n \n \n \n \n 22,630 \n \n \n \n \n Debt securities \n \n \n \n \n \n \n \n \n 18 \n \n \n \n \n \n 76,129 \n \n \n \n \n \n 40,675 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n \n \n \n \n \n \n 33 \n \n \n \n \n \n 138 \n \n \n \n \n \n 122 \n \n \n \n \n Loans and advances to customers \n \n \n \n \n \n \n \n \n 20 \n \n \n \n \n \n 362,653 \n \n \n \n \n \n 291,475 \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n \n \n \n 21 \n \n \n \n \n \n 8,227 \n \n \n \n \n \n 4,211 \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n \n \n \n 22 \n \n \n \n \n \n 6,410 \n \n \n \n \n \n 6,714 \n \n \n \n \n Intangible assets \n \n \n \n \n \n \n \n \n 23 \n \n \n \n \n \n 4,268 \n \n \n \n \n \n 2,703 \n \n \n \n \n Investment in associates \n \n \n \n \n \n \n \n \n 30 \n \n \n \n \n \n 197 \n \n \n \n \n \n 155 \n \n \n \n \n Goodwill \n \n \n \n \n \n \n \n \n 34 \n \n \n \n \n \n 10,576 \n \n \n \n \n \n 10,576 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 480,705 \n \n \n \n \n \n 379,261 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Deposits from customers \n \n \n \n \n \n \n \n \n 24 \n \n \n \n \n \n 390,421 \n \n \n \n \n \n 304,199 \n \n \n \n \n Creditors and accrued charges \n \n \n \n \n \n \n \n \n 25 \n \n \n \n \n \n 14,409 \n \n \n \n \n \n 13,108 \n \n \n \n \n Deferred consideration \n \n \n \n \n \n \n \n \n 26 \n \n \n \n \n \n 20 \n \n \n \n \n \n 262 \n \n \n \n \n Loan notes \n \n \n \n \n \n \n \n \n 27 \n \n \n \n \n \n 39,317 \n \n \n \n \n \n 31,332 \n \n \n \n \n Pension liability \n \n \n \n \n \n \n \n \n 28 \n \n \n \n \n \n 162 \n \n \n \n \n \n 237 \n \n \n \n \n Deferred tax liability \n \n \n \n \n \n \n \n \n 15 \n \n \n \n \n \n 392 \n \n \n \n \n \n 353 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 444,721 \n \n \n \n \n \n 349,491 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Called up share capital \n \n \n \n \n \n \n \n \n 29 \n \n \n \n \n \n 19,384 \n \n \n \n \n \n 19,195 \n \n \n \n \n Profit and loss account \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 15,544 \n \n \n \n \n \n 10,371 \n \n \n \n \n Revaluation reserve \n \n \n \n \n \n \n \n \n 22 \n \n \n \n \n \n 15 \n \n \n \n \n \n 15 \n \n \n \n \n Non-controlling interest \n \n \n \n \n \n \n \n \n 32 \n \n \n \n \n \n 1,041 \n \n \n \n \n \n 189 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 35,984 \n \n \n \n \n \n 29,770 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total liabilities and equity \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 480,705 \n \n \n \n \n \n 379,261 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n COMPANY STATEMENT OF FINANCIAL POSITION \n   \n \n \n \n \n   \n As at 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n Notes \n \n \n \n \n \n 2023 \n £000 \n \n \n \n \n \n 2022 \n £000 \n \n \n \n \n   \n Assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 17 \n \n \n \n \n \n 373 \n \n \n \n \n \n 1,761 \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 21 \n \n \n \n \n \n 123 \n \n \n \n \n \n 562 \n \n \n \n \n Amounts due from Group undertakings \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 35 \n \n \n \n \n \n 10,694 \n \n \n \n \n \n 9,907 \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 22 \n \n \n \n \n \n 139 \n \n \n \n \n \n 201 \n \n \n \n \n Intangible assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 23 \n \n \n \n \n \n 861 \n \n \n \n \n \n 25 \n \n \n \n \n Investment in subsidiaries \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 31 \n \n \n \n \n \n 28,097 \n \n \n \n \n \n 23,597 \n \n \n \n \n Subordinated loans \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 35 \n \n \n \n \n \n 14,228 \n \n \n \n \n \n 7,728 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 54,515 \n \n \n \n \n \n 43,781 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Creditors and accrued charges \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 25 \n \n \n \n \n \n 544 \n \n \n \n \n \n 440 \n \n \n \n \n Amounts due to Group undertakings \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 35 \n \n \n \n \n \n 608 \n \n \n \n \n \n 122 \n \n \n \n \n Loan notes \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 27 \n \n \n \n \n \n 39,317 \n \n \n \n \n \n 31,332 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 40,469 \n \n \n \n \n \n 31,894 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Called up share capital \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n 29 \n \n \n \n \n \n 19,384 \n \n \n \n \n \n 19,195 \n \n \n \n \n Profit and loss account \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n (5,338) \n \n \n \n \n \n (7,308) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 14,046 \n \n \n \n \n \n 11,887 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total liabilities and equity \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 54,515 \n \n \n \n \n \n 43,781 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n   \n CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES OF EQUITY \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n Attributable to owners of the Company \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n   \n   \n Group \n \n \n   \n \n \n   \n Share capital \n £000 \n \n \n   \n \n \n Profit and loss account \n £000 \n \n \n \n \n \n   \n Revaluation reserve \n £000 \n \n \n   \n   \n \n \n   \n   \n Total \n £000 \n \n \n   \n \n \n Non-controlling interests \n £000 \n \n \n   \n \n \n   \n Total \n equity \n £000 \n \n \n \n \n   \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance as at 1 January 2022 \n \n \n \n \n \n 19,133 \n \n \n \n \n \n 5,781 \n \n \n \n \n \n 15 \n \n \n \n \n \n 24,929 \n \n \n \n \n \n 56 \n \n \n \n \n \n 24,985 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the year \n \n \n \n \n \n - \n \n \n \n \n \n 4,331 \n \n \n \n \n \n - \n \n \n \n \n \n 4,331 \n \n \n \n \n \n 343 \n \n \n \n \n \n 4,674 \n \n \n \n \n Other comprehensive income \n \n \n \n \n \n - \n \n \n \n \n \n 538 \n \n \n \n \n \n - \n \n \n \n \n \n 538 \n \n \n \n \n \n - \n \n \n \n \n \n 538 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Transactions with owners \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Dividends declared \n \n \n \n \n \n 62 \n \n \n \n \n \n (279) \n \n \n \n \n \n - \n \n \n \n \n \n (217) \n \n \n \n \n \n - \n \n \n \n \n \n (217) \n \n \n \n \n Acquisition of subsidiary with non-controlling interest \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n (210) \n \n \n \n \n \n (210) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance as at 31 December 2022 \n \n \n   \n \n \n 19,195 \n \n \n \n \n \n 10,371 \n \n \n \n \n \n 15 \n \n \n \n \n \n 29,581 \n \n \n \n \n \n 189 \n \n \n \n \n \n 29,770 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the year \n \n \n   \n \n \n - \n \n \n   \n \n \n 5,288 \n \n \n   \n \n \n - \n \n \n   \n \n \n 5,288 \n \n \n   \n \n \n 852 \n \n \n   \n \n \n 6,140 \n \n \n \n \n Other comprehensive income \n \n \n   \n \n \n - \n \n \n   \n \n \n 318 \n \n \n   \n \n \n - \n \n \n   \n \n \n 318 \n \n \n   \n \n \n - \n \n \n   \n \n \n 318 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Transactions with owners \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Dividend declared (see note 29) \n \n \n   \n \n \n 91 \n \n \n   \n \n \n (433) \n \n \n   \n \n \n - \n \n \n   \n \n \n (342) \n \n \n   \n \n \n - \n \n \n   \n \n \n (342) \n \n \n \n \n Share issue (see note 29) \n \n \n   \n \n \n 98 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 98 \n \n \n   \n \n \n - \n \n \n   \n \n \n 98 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Balance as at 31 December 2023 \n \n \n   \n \n \n 19,384 \n \n \n   \n \n \n 15,544 \n \n \n   \n \n \n 15 \n \n \n   \n \n \n 34,943 \n \n \n   \n \n \n 1,041 \n \n \n   \n \n \n 35,984 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n   \n   \n Company \n \n \n   \n \n \n   \n \n \n   \n Share capital \n £000 \n \n \n   \n \n \n Profit and loss account \n £000 \n \n \n \n \n \n   \n Total \n equity \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Balance as at 1 January 2022 \n \n \n \n \n \n \n \n \n 19,133 \n \n \n \n \n \n (9,001) \n \n \n \n \n \n 10,132 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the year \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n 1,972 \n \n \n \n \n \n 1,972 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Transactions with owners \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Dividends declared (see note 29) \n \n \n \n \n \n \n \n \n 62 \n \n \n \n \n \n (279) \n \n \n \n \n \n (217) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance as at 31 December 2022 \n \n \n \n \n \n \n \n \n 19,195 \n \n \n \n \n \n (7,308) \n \n \n \n \n \n 11,887 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the year \n \n \n   \n \n \n   \n \n \n - \n \n \n   \n \n \n 2,403 \n \n \n   \n \n \n 2,403 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Transactions with owners \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Dividend declared (see note 29) \n \n \n   \n \n \n   \n \n \n 91 \n \n \n   \n \n \n (433) \n \n \n   \n \n \n (342) \n \n \n \n \n Share issue (see note 29) \n \n \n   \n \n \n   \n \n \n 98 \n \n \n   \n \n \n - \n \n \n   \n \n \n 98 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Balance as at 31 December 2023 \n \n \n   \n \n \n   \n \n \n 19,384 \n \n \n   \n \n \n (5,338) \n \n \n   \n \n \n 14,046 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n CONSOLIDATED STATEMENT OF CASH FLOWS \n   \n \n \n \n \n For the year ended 31 December \n \n \n   \n Notes \n \n \n \n \n \n 2023 \n £000 \n \n \n \n \n \n 2022 \n £000 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n RECONCILIATION OF PROFIT BEFORE TAXATION TO OPERATING CASH FLOWS \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n \n \n 7,043 \n \n \n \n \n \n 5,211 \n \n \n \n \n   \n Adjustments for: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Depreciation \n \n \n 22 \n \n \n \n \n \n 825 \n \n \n \n \n \n 754 \n \n \n \n \n Amortisation of intangibles \n \n \n 23 \n \n \n \n \n \n 683 \n \n \n \n \n \n 582 \n \n \n \n \n Impairment of loans and advances to customers \n \n \n \n \n \n \n \n \n 4,135 \n \n \n \n \n \n 3,990 \n \n \n \n \n Net interest income \n \n \n \n \n \n \n \n \n (34,726) \n \n \n \n \n \n (26,064) \n \n \n \n \n Realised gains on debt securities \n \n \n \n \n \n \n \n \n (1,893) \n \n \n \n \n \n (292) \n \n \n \n \n Share of profit of equity accounted investees \n \n \n 30 \n \n \n \n \n \n - \n \n \n \n \n \n (18) \n \n \n \n \n Contingent consideration interest expense \n \n \n 6(ii) \n \n \n \n \n \n 4 \n \n \n \n \n \n 102 \n \n \n \n \n Pension charge included in personnel expenses \n \n \n 28 \n \n \n \n \n \n 11 \n \n \n \n \n \n 14 \n \n \n \n \n (Loss) / gain on financial instruments \n \n \n 19 \n \n \n \n \n \n (195) \n \n \n \n \n \n 19 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (24,113) \n \n \n \n \n \n (15,702) \n \n \n \n \n Changes in: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n \n \n \n (4,016) \n \n \n \n \n \n (2,228) \n \n \n \n \n Creditors and accrued charges \n \n \n \n \n \n \n \n \n 1,953 \n \n \n \n \n \n 1,436 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash flow from trading activities \n \n \n \n \n \n \n \n \n (26,176) \n \n \n \n \n \n (16,494) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Changes in: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Loans and advances to customers \n \n \n \n \n \n \n \n \n (75,590) \n \n \n \n \n \n (56,313) \n \n \n \n \n Deposits from customers \n \n \n \n \n \n \n \n \n 88,116 \n \n \n \n \n \n 46,061 \n \n \n \n \n Pension contribution \n \n \n 28 \n \n \n \n \n \n (57) \n \n \n \n \n \n (57) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash used in operating activities \n \n \n \n \n \n \n \n \n (13,707) \n \n \n \n \n \n (26,803) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n CASH FLOW STATEMENT \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash from operating activities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash used in operating activities \n \n \n \n \n \n \n \n \n (13,707) \n \n \n \n \n \n (26,803) \n \n \n \n \n Interest received \n \n \n \n \n \n \n \n \n 47,168 \n \n \n \n \n \n 30,136 \n \n \n \n \n Interest paid \n \n \n \n \n \n \n \n \n (14,059) \n \n \n \n \n \n (6,184) \n \n \n \n \n Income taxes paid \n \n \n \n \n \n \n \n \n (1,337) \n \n \n \n \n \n (157) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash from / (used in) operating activities \n \n \n \n \n \n \n \n \n 18,065 \n \n \n \n \n \n (3,008) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Acquisition of property, plant and equipment, excluding right-of-use assets \n \n \n 22 \n \n \n \n \n \n (1,280) \n \n \n \n \n \n (1,473) \n \n \n \n \n Acquisition of intangible assets \n \n \n 23 \n \n \n \n \n \n (2,248) \n \n \n \n \n \n (504) \n \n \n \n \n Proceeds from sale of property, plant and equipment \n \n \n 22 \n \n \n \n \n \n 759 \n \n \n \n \n \n 2,083 \n \n \n \n \n Acquisition of subsidiary or associate, net of cash acquired \n \n \n 34 \n \n \n \n \n \n - \n \n \n \n \n \n (1,785) \n \n \n \n \n (Purchase) / Sale of debt securities \n \n \n \n \n \n \n \n \n (33,237) \n \n \n \n \n \n 734 \n \n \n \n \n Deferred consideration on acquisition of subsidiary \n \n \n 6(ii),26 \n \n \n \n \n \n (67) \n \n \n \n \n \n (937) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n \n \n \n (36,073) \n \n \n \n \n \n (1,882) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Receipt of loan notes \n \n \n 27 \n \n \n \n \n \n 7,985 \n \n \n \n \n \n 7,660 \n \n \n \n \n Payment of lease liabilities (capital) \n \n \n 37 \n \n \n \n \n \n (256) \n \n \n \n \n \n (202) \n \n \n \n \n Dividend paid \n \n \n 29 \n \n \n \n \n \n (342) \n \n \n \n \n \n (217) \n \n \n \n \n Share issue \n \n \n 29 \n \n \n \n \n \n 98 \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash from financing activities \n \n \n \n \n \n \n \n \n 7,485 \n \n \n \n \n \n 7,241 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net (decrease) / increase in cash and cash equivalents \n \n \n   \n \n \n   \n \n \n (10,523) \n \n \n   \n \n \n 2,351 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents at 1 January \n \n \n \n \n \n \n \n \n 22,630 \n \n \n \n \n \n 20,279 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Cash and cash equivalents at 31 December \n \n \n   \n \n \n   \n \n \n 12,107 \n \n \n   \n \n \n 22,630 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n There are £42,000 of non-cash investing activities with respect to the Group's acquisition of 10.0% shareholding in Lesley Stephen & Co Limited. (see note 30). \n   \n COMPANY STATEMENT OF CASH FLOWS \n   \n \n \n \n \n   \n For the year ended 31 December \n \n \n   \n Notes \n \n \n \n \n \n 2023 \n £000 \n \n \n \n \n \n 2022 \n £000 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n RECONCILIATION OF PROFIT BEFORE TAXATION TO OPERATING CASH FLOWS \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n \n \n 2,403 \n \n \n \n \n \n 1,972 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Adjustments for: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Depreciation \n \n \n 22 \n \n \n \n \n \n 63 \n \n \n \n \n \n 63 \n \n \n \n \n Amortisation \n \n \n 23 \n \n \n \n \n \n 57 \n \n \n \n \n \n 2 \n \n \n \n \n Interest income \n \n \n \n \n \n \n \n \n (862) \n \n \n \n \n \n (522) \n \n \n \n \n Dividend income \n \n \n \n \n \n \n \n \n (1,200) \n \n \n \n \n \n (1,575) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 461 \n \n \n \n \n \n (60) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Changes in: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Amounts due from group undertakings \n \n \n \n \n \n \n \n \n (787) \n \n \n \n \n \n (3,803) \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n \n \n \n 439 \n \n \n \n \n \n (90) \n \n \n \n \n Creditors and accrued charges \n \n \n \n \n \n \n \n \n 312 \n \n \n \n \n \n 100 \n \n \n \n \n Amounts due to Group undertakings \n \n \n \n \n \n \n \n \n 486 \n \n \n \n \n \n (4,187) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash from / (used in) operating activities \n \n \n \n \n \n \n \n \n 911 \n \n \n \n \n \n (8,040) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n CASH FLOW STATEMENT \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash from operating activities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash from / (used) in operating activities \n \n \n \n \n \n \n \n \n 911 \n \n \n \n \n \n (8,040) \n \n \n \n \n Interest received \n \n \n \n \n \n \n \n \n 1,200 \n \n \n \n \n \n 522 \n \n \n \n \n Dividends received \n \n \n \n \n \n \n \n \n 862 \n \n \n \n \n \n 1,575 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash from / (used in) operating activities \n \n \n \n \n \n \n \n \n 2,973 \n \n \n \n \n \n (5,943) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Acquisition of property, plant and equipment \n \n \n \n \n \n \n \n \n (1) \n \n \n \n \n \n - \n \n \n \n \n Acquisition of intangible assets \n \n \n \n \n \n \n \n \n (893) \n \n \n \n \n \n (8) \n \n \n \n \n Issue of subordinated loans \n \n \n \n \n \n \n \n \n (6,500) \n \n \n \n \n \n - \n \n \n \n \n Increase in investment in group undertakings \n \n \n \n \n \n \n \n \n (4,500) \n \n \n \n \n \n - \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n \n \n \n (11,894) \n \n \n \n \n \n (8) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Proceeds from issue of loan notes \n \n \n 27 \n \n \n \n \n \n 7,985 \n \n \n \n \n \n 7,660 \n \n \n \n \n Payment of finance lease liabilities \n \n \n \n \n \n \n \n \n (117) \n \n \n \n \n \n (99) \n \n \n \n \n Proceeds from issue of shares \n \n \n \n \n \n \n \n \n 98 \n \n \n \n \n \n - \n \n \n \n \n Dividend paid \n \n \n \n \n \n \n \n \n (433) \n \n \n \n \n \n (279) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash from financing activities \n \n \n \n \n \n \n \n \n 7,533 \n \n \n \n \n \n 7,282 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net (decrease) / increase in cash and cash equivalents \n \n \n \n \n \n \n \n \n (1,388) \n \n \n \n \n \n 1,331 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents at 1 January \n \n \n \n \n \n \n \n \n 1,761 \n \n \n \n \n \n 430 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents at 31 December \n \n \n   \n \n \n   \n \n \n 373 \n \n \n   \n \n \n 1,761 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n The notes form part of these financial statements. \n   \n  NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS \n   \n 1.   Reporting entity \n Manx Financial Group PLC (\"Company\") is a company incorporated in the Isle of Man. The Company's registered office is at Clarendon House, Victoria Street, Douglas, Isle of Man, IM1 2LN. The consolidated financial statements of the Company for the year ended 31 December 2023 comprise the Company and its subsidiaries (\"Group\") including Conister Bank Limited (the \"Bank\"). The Group is primarily involved in the provision of financial services. \n   \n The Company's financial statements are the separate financial statements of the Company. \n   \n 2.   Basis of accounting \n The consolidated and the separate financial statements of the Company have been prepared in accordance with international accounting standards in accordance with UK-adopted international accounting standards (\"UK-adopted IFRS\" or \"IFRSs\"), on a going concern basis as disclosed in the Directors ' Report. \n   \n 3.   Functional and presentation currency \n These financial statements are presented in pounds sterling, which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated. All subsidiaries of the Group have pounds sterling as their functional currency. \n   \n 4.   Use of judgements and estimates \n The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. \n   \n Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. \n   \n Assumptions and estimation uncertainties \n Information about assumptions and estimation uncertainties at year-end that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is included in the following notes: \n §  Note 23 and 34 - impairment test of intangible assets and goodwill: key assumptions underlying recoverable amounts; and \n §  Note 44(G)(vi) and Note 7(A) - key assumptions of Expected Credit Loss (\"ECL\") allowance for loans and advances to customers and assessment of impairment allowances where loans are in default or arrears. \n   \n 5.   Financial instruments - Classification \n For description of how the Group classifies financial assets and liabilities, see note 44(G)(ii). \n   \n The following table provides reconciliation between line items in the statement of financial position and categories of financial instruments. \n \n \n \n \n Group \n   \n   \n \n \n   \n \n \n   \n Mandatorily at FVTPL \n \n \n   \n Designated as at FVTPL \n \n \n FVOCI - debt instruments \n \n \n FVOCI - equity instruments \n \n \n   \n Amortised cost \n \n \n Total carrying amount \n \n \n \n \n 31 December 2023 \n \n \n   \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash and cash equivalents \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 12,107 \n \n \n 12,107 \n \n \n \n \n Debt securities \n \n \n   \n \n \n - \n \n \n - \n \n \n 76,129 \n \n \n - \n \n \n - \n \n \n 76,129 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n   \n \n \n   \n - \n \n \n   \n 138 \n \n \n   \n - \n \n \n   \n - \n \n \n   \n - \n \n \n   \n 138 \n \n \n \n \n Loans and advances to customers \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 362,653 \n \n \n 362,653 \n \n \n \n \n Trade and other receivables \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 8,227 \n \n \n 8,227 \n \n \n \n \n Total financial assets \n \n \n   \n \n \n - \n \n \n 138 \n \n \n 76,129 \n \n \n - \n \n \n 382,987 \n \n \n 459,254 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Deposits from customers \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 390,421 \n \n \n 390,421 \n \n \n \n \n Creditor and accrued charges \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 14,409 \n \n \n 14,409 \n \n \n \n \n Deferred consideration \n \n \n   \n \n \n - \n \n \n 20 \n \n \n - \n \n \n - \n \n \n - \n \n \n 20 \n \n \n \n \n Loan notes \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 39,317 \n \n \n 39,317 \n \n \n \n \n Total financial liabilities \n \n \n   \n \n \n - \n \n \n 20 \n \n \n - \n \n \n - \n \n \n 444,147 \n \n \n 444,167 \n \n \n \n \n   \n   \n \n \n \n \n Group \n   \n   \n \n \n \n \n \n   \n Mandatorily at FVTPL \n \n \n   \n Designated as at FVTPL \n \n \n FVOCI - debt instruments \n \n \n FVOCI - equity instruments \n \n \n   \n Amortised cost \n \n \n Total carrying amount \n \n \n \n \n 31 December 2022 \n \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 22,630 \n \n \n 22,630 \n \n \n \n \n Debt securities \n \n \n \n \n \n - \n \n \n - \n \n \n 40,675 \n \n \n - \n \n \n - \n \n \n 40,675 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n \n \n \n   \n - \n \n \n   \n 122 \n \n \n   \n - \n \n \n   \n - \n \n \n   \n - \n \n \n   \n 122 \n \n \n \n \n Loans and advances to customers \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 291,475 \n \n \n 291,475 \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 4,211 \n \n \n 4,211 \n \n \n \n \n Total financial assets \n \n \n \n \n \n - \n \n \n 122 \n \n \n 40,675 \n \n \n - \n \n \n 318,316 \n \n \n 359,113 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deposits from customers \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 304,199 \n \n \n 304,199 \n \n \n \n \n Creditor and accrued charges \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 13,108 \n \n \n 13,108 \n \n \n \n \n Deferred consideration \n \n \n \n \n \n - \n \n \n 262 \n \n \n - \n \n \n - \n \n \n - \n \n \n 262 \n \n \n \n \n Loan notes \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 31,332 \n \n \n 31,332 \n \n \n \n \n Total financial liabilities \n \n \n \n \n \n - \n \n \n 262 \n \n \n - \n \n \n - \n \n \n 348,639 \n \n \n 348,901 \n \n \n \n \n   \n \n \n \n \n Company \n   \n   \n \n \n   \n \n \n   \n Mandatorily at FVTPL \n \n \n   \n Designated as at FVTPL \n \n \n FVOCI - debt instruments \n \n \n FVOCI - equity instruments \n \n \n   \n Amortised cost \n \n \n Total carrying amount \n \n \n \n \n 31 December 2023 \n \n \n   \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash and cash equivalents \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 373 \n \n \n 373 \n \n \n \n \n Trade and other receivables \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 123 \n \n \n 123 \n \n \n \n \n Amounts due from Group undertakings \n \n \n   \n \n \n   \n - \n \n \n   \n - \n \n \n   \n - \n \n \n   \n - \n \n \n   \n 9,613 \n \n \n   \n 9,613 \n \n \n \n \n Subordinated loans \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 14,228 \n \n \n 14,228 \n \n \n \n \n Total financial assets \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 24,337 \n \n \n 24,337 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Creditor and accrued charges \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 453 \n \n \n 453 \n \n \n \n \n Amounts due to Group undertakings \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 608 \n \n \n 608 \n \n \n \n \n Loan notes \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 39,317 \n \n \n 39,317 \n \n \n \n \n Total financial liabilities \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 40,378 \n \n \n 40,378 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n \n \n Company \n   \n   \n \n \n \n \n \n   \n Mandatorily at FVTPL \n \n \n   \n Designated as at FVTPL \n \n \n FVOCI - debt instruments \n \n \n FVOCI - equity instruments \n \n \n   \n Amortised cost \n \n \n Total carrying amount \n \n \n \n \n 31 December 2022 \n \n \n \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,761 \n \n \n 1,761 \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 562 \n \n \n 562 \n \n \n \n \n Amounts due from Group undertakings \n \n \n \n \n \n   \n - \n \n \n   \n - \n \n \n   \n - \n \n \n   \n - \n \n \n   \n 9,907 \n \n \n   \n 9,907 \n \n \n \n \n Subordinated loans \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 7,728 \n \n \n 7,728 \n \n \n \n \n Total financial assets \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 19,958 \n \n \n 19,958 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Creditor and accrued charges \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 440 \n \n \n 440 \n \n \n \n \n Amounts due to Group undertakings \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 122 \n \n \n 122 \n \n \n \n \n Loan notes \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 31,332 \n \n \n 31,332 \n \n \n \n \n Total financial liabilities \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 31,894 \n \n \n 31,894 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n 6.   Financial instruments - Fair values \n For description of the Group's fair value measurement accounting policy, see note 44(G)(vi). \n   \n The following table shows the carrying amounts and fair values of Group financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. \n   \n \n \n \n \n   \n \n \n Carrying amount \n \n \n   \n \n \n Fair value \n \n \n \n \n   \n 31 December 2023 \n \n \n Total \n £000 \n \n \n   \n \n \n Level 1 \n £000 \n \n \n   \n \n \n Level 2 \n £000 \n \n \n   \n \n \n Level 3 \n £000 \n \n \n   \n \n \n Total \n £000 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Financial assets measured at fair value \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Debt securities \n \n \n 76,129 \n \n \n   \n \n \n - \n \n \n   \n \n \n 76,129 \n \n \n   \n \n \n - \n \n \n   \n \n \n 76,129 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 138 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 138 \n \n \n   \n \n \n 138 \n \n \n \n \n \n \n \n 76,267 \n \n \n   \n \n \n - \n \n \n   \n \n \n 76,129 \n \n \n   \n \n \n 138 \n \n \n   \n \n \n 76,267 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Financial assets not measured at fair value \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash and cash equivalents \n \n \n 12,107 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n Loans and advances to customers \n \n \n 362,653 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n Trade and other receivables \n \n \n 8,227 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n \n \n \n 382,987 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Financial liabilities measured at fair value \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Deferred consideration \n \n \n 20 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 20 \n \n \n   \n \n \n 20 \n \n \n \n \n \n \n \n 20 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 20 \n \n \n   \n \n \n 20 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Financial liabilities not measured at fair value \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Deposits from customers \n \n \n 390,421 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n Creditors and accrued charges \n \n \n 14,409 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n Loan notes \n \n \n 39,317 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n \n \n \n 444,147 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n   \n \n \n \n \n \n \n \n Carrying amount \n \n \n \n \n \n Fair value \n \n \n \n \n   \n 31 December 2022 \n \n \n Total \n £000 \n \n \n \n \n \n Level 1 \n £000 \n \n \n \n \n \n Level 2 \n £000 \n \n \n \n \n \n Level 3 \n £000 \n \n \n \n \n \n Total \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Financial assets measured at fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Debt securities \n \n \n 40,675 \n \n \n \n \n \n - \n \n \n \n \n \n 40,675 \n \n \n \n \n \n - \n \n \n \n \n \n 40,675 \n \n \n \n \n Equity held at Fair Value Through Profit or Loss \n \n \n 122 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n 122 \n \n \n \n \n \n 122 \n \n \n \n \n \n \n \n 40,797 \n \n \n \n \n \n - \n \n \n \n \n \n 40,675 \n \n \n \n \n \n 122 \n \n \n \n \n \n 40,797 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Financial assets not measured at fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n 22,630 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n Loans and advances to customers \n \n \n 291,475 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n Trade and other receivables \n \n \n 4,211 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n \n \n 318,316 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Financial liabilities measured at fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deferred consideration \n \n \n 262 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n 262 \n \n \n \n \n \n 262 \n \n \n \n \n \n \n \n 262 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n 262 \n \n \n \n \n \n 262 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Financial liabilities not measured at fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deposits from customers \n \n \n 304,199 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n Creditors and accrued charges \n \n \n 13,108 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n Loan notes \n \n \n 31,332 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n \n \n 348,639 \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n   \n All Company financial assets and liabilities carrying amounts are deemed to be reasonable approximation of fair value. \n Measurement of fair values \n i. Valuation techniques and significant unobservable inputs \n \n \n \n \n Type \n \n \n Valuation technique \n \n \n Significant unobservable inputs \n \n \n Inter-relationship between significant unobservable inputs and fair value measurement \n \n \n \n \n Debt securities \n \n \n Market comparison / discounted cash flow: The fair value is estimated considering a net present value calculated using discount rates derived from quoted yields of securities with similar maturity and credit rating that are traded in active markets. \n \n \n Not applicable. \n \n \n Not applicable. \n \n \n \n \n Equities at Fair Value Through Profit or Loss \n \n \n Net asset value \n \n \n Expected net cash flows derived from the entity \n \n \n The estimated fair value would increase (decrease) if the expected cash flows were higher (lower). \n \n \n \n \n Deferred consideration \n \n \n Discounted cash flows: The valuation model considers the present value of the expected future payments, discounted using a risk-adjusted discount rate. \n \n \n Expected cash flows £20,000 (2022: £291,340). \n   \n Risk-adjusted discount rate 14.0% (2022: 14.0%). \n \n \n The estimated fair value would increase (decrease) if: \n -the expected cash flows were higher (lower); or \n -the risk-adjusted discount rate was lower (higher). \n \n \n \n \n   \n ii. Level 3 recurring fair values \n Reconciliation of Level 3 fair values \n The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values. \n   \n \n \n \n \n   \n   \n \n \n   \n \n \n   \n \n \n 2023 \n £000 \n \n \n   \n \n \n 2022 \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Balance at 1 January \n \n \n   \n \n \n   \n \n \n 262 \n \n \n   \n \n \n 1,023 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Finance costs \n \n \n   \n \n \n   \n \n \n 4 \n \n \n   \n \n \n 102 \n \n \n \n \n Net change in fair value (unrealised) \n \n \n   \n \n \n   \n \n \n (179) \n \n \n   \n \n \n 74 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n (175) \n \n \n   \n \n \n 176 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Payment (note 26) \n \n \n   \n \n \n   \n \n \n (67) \n \n \n   \n \n \n (937) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Balance at 31 December \n \n \n   \n \n \n   \n \n \n 20 \n \n \n   \n \n \n 262 \n \n \n \n \n   \n Sensitivity analysis \n For the fair value of contingent consideration, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant would have the following effects. \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n Profit or loss \n \n \n \n \n   \n 31 December 2023 \n \n \n   \n \n \n   \n \n \n Increase \n £000 \n \n \n   \n \n \n Decrease \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n Expected cash flows (10.0% movement) \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n (2) \n \n \n \n \n Risk-adjusted discount rate (1.0% movement) \n \n \n   \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit or loss \n \n \n \n \n   \n 31 December 2022 \n \n \n \n \n \n \n \n \n Increase \n £000 \n \n \n \n \n \n Decrease \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Expected cash flows (10.0% movement) \n \n \n \n \n \n \n \n \n 29 \n \n \n \n \n \n (29) \n \n \n \n \n Risk-adjusted discount rate (1.0% movement) \n \n \n \n \n \n \n \n \n 5 \n \n \n \n \n \n (3) \n \n \n \n \n   \n 7.   Financial risk review \n Risk management \n This note presents information about the Group's exposure to financial risks and the Group's management of capital. For information on the Group and Company's financial risk management framework, see note 42. \n   \n A. Group Credit risk \n For definition of credit risk and information on how credit risk is mitigated by the Group, see note 42. \n   \n i. Credit quality analysis \n Loans and advances to customers \n Explanation of the terms 'Stage 1', 'Stage 2' and 'Stage 3' is included in note 44(G)(vii). \n   \n An analysis of the credit risk on loans and advances to customers is as follow s: \n \n \n \n \n Group \n \n \n 2023 \n \n \n \n \n \n 2022* \n \n \n \n \n   \n   \n \n \n Stage 1 \n £000 \n \n \n Stage 2 \n £000 \n \n \n Stage 3 \n £000 \n \n \n Total \n £000 \n \n \n \n \n \n Stage 1 \n £000 \n \n \n Stage 2 \n £000 \n \n \n Stage 3 \n £000 \n \n \n Total \n £000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Grade A \n \n \n 341,953 \n \n \n - \n \n \n - \n \n \n 341,953 \n \n \n \n \n \n 273,332 \n \n \n - \n \n \n - \n \n \n 273,332 \n \n \n \n \n Grade B \n \n \n - \n \n \n 7,822 \n \n \n 3,700 \n \n \n 11,522 \n \n \n \n \n \n - \n \n \n 5,006 \n \n \n 9,347 \n \n \n 14,353 \n \n \n \n \n Grade C \n \n \n - \n \n \n 2 \n \n \n 28,791 \n \n \n 28,793 \n \n \n \n \n \n 391 \n \n \n - \n \n \n 19,576 \n \n \n 19,967 \n \n \n \n \n Gross value \n \n \n 341,953 \n \n \n 7,824 \n \n \n 32,491 \n \n \n 382,268 \n \n \n \n \n \n 273,723 \n \n \n 5,006 \n \n \n 28,923 \n \n \n 307,652 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Allowance for impairment \n \n \n (184) \n \n \n (6) \n \n \n (19,425) \n \n \n (19,615) \n \n \n \n \n \n (303) \n \n \n (3) \n \n \n (15,871) \n \n \n (16,177) \n \n \n \n \n Carrying value \n \n \n 341,769 \n \n \n 7,818 \n \n \n 13,066 \n \n \n 362,653 \n \n \n \n \n \n 273,420 \n \n \n 5,003 \n \n \n 13,052 \n \n \n 291,475 \n \n \n \n \n Loans are graded A to C depending on the level of risk. Grade A relates to agreements with the lowest risk, Grade B with medium risk and Grade C relates to agreements with the highest of risk. \n   \n The following table sets out information about the overdue status of loans and advances to customers in Stage 1, 2 and 3: \n \n \n \n \n Group \n \n \n 2023 \n \n \n \n \n \n 2022* \n \n \n   \n \n \n \n \n   \n 31 December \n \n \n Stage 1 \n £000 \n \n \n Stage 2 \n £000 \n \n \n Stage 3 \n £000 \n \n \n Total \n £000 \n \n \n \n \n \n Stage 1 \n £000 \n \n \n Stage 2 \n £000 \n \n \n Stage 3 \n £000 \n \n \n Total \n £000 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Current \n \n \n 333,740 \n \n \n - \n \n \n - \n \n \n 333,740 \n \n \n \n \n \n 269,130 \n \n \n - \n \n \n - \n \n \n 269,130 \n \n \n \n \n Overdue < 30 days \n \n \n 8,213 \n \n \n - \n \n \n - \n \n \n 8,213 \n \n \n \n \n \n 4,593 \n \n \n 604 \n \n \n - \n \n \n 5,197 \n \n \n \n \n Overdue > 30 days \n \n \n - \n \n \n 7,825 \n \n \n 32,490 \n \n \n 40,315 \n \n \n \n \n \n - \n \n \n 4,402 \n \n \n 28,923 \n \n \n 33,325 \n \n \n \n \n \n \n \n 341,953 \n \n \n 7,825 \n \n \n 32,490 \n \n \n 382,268 \n \n \n \n \n \n 273,723 \n \n \n 5,006 \n \n \n 28,923 \n \n \n 307,652 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n For Stage 3 loans and advances, the Bank holds collateral with a value of £13,410,000 (2022: £12,927,000) representing security cover of 35.0% (2022: 48.0%). \n   \n * Please refer to Note 20. \n   \n Debt securities, cash and cash equivalents \n The following table sets out the credit quality of liquid assets: \n \n \n \n \n Group \n \n \n \n \n \n 2023 \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n £000 \n \n \n £000 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Government bonds and treasury bills \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Rated A to A+ \n \n \n                           \n \n \n 76,129 \n \n \n 40,675 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Rated A to A+ \n \n \n \n \n \n 12,107 \n \n \n 22,630 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Unrated \n \n \n \n \n \n 8,227 \n \n \n 4,211 \n \n \n \n \n   \n   \n \n \n \n \n \n   \n 96,463 \n \n \n   \n 67,516 \n \n \n \n \n The analysis has been based on Standard & Poor's ratings. The above debt securities, cash and cash equivalents are considered to be Stage 1 as there is no evidence of significant deterioration in credit quality and hence no material expected credit loss allowance is observed.              \n   \n ii. Collateral and other credit enhancements \n The Group holds collateral in the form of the underlying assets (typically private and commercial vehicles, plant and machinery) to loan arrangements as security for HP, finances leases, vehicle stocking plans, block discounting, wholesale funding arrangements, integrated wholesale funding arrangements and secured commercial loan balances, which are sub-categories of loans and advances to customers. In addition, the Group will take debentures, mortgages, personal and corporate guarantees, fixed and floating charges on specific assets such as cash and shares. \n   \n The terms of enforcing such security can only occur on default, and when realised can only be used to settle the amount of debt and related collection fees.  On occasion the Bank may realise a surplus if the defaulting party loses title to the underlying security as part of enforcement. In addition, the commission share schemes have an element of capital indemnified.  \n   \n As at 31 December 2023, 13.0% of loans and advances had an element of capital indemnification (2022: 4.0%).  At the time of granting credit within the sub-categories listed above, the loan balances due are secured over the underlying assets held as collateral. \n   \n At the time of granting credit within the sub-categories listed above, the loan balances due are secured over the underlying assets held as collateral (see note 12 for further details). Collateral is valued at the time of borrowing, and generally are not updated except when a loan is individually assessed as impaired. \n   \n For portfolios where the Group has never had a default in its history or has robust credit enhancements such as credit insurance or default indemnities for the entire portfolio, then no IFRS 9 provision is made.  At 2023 year-end, 28.0% had such credit enhancements (2022: 29.0%). \n   \n The following table sets out the principal types of collateral held against different types of financial assets. \n   \n \n \n \n \n   \n Group \n \n \n   \n \n \n   \n \n \n 2023 \n % \n \n \n   \n \n \n 2022 \n% \n \n \n   \n Principal type of collateral held \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n HP balances \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Property and equipment \n \n \n \n \n Finance lease balances \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Property and equipment \n \n \n \n \n Unsecured personal loans \n \n \n   \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n None \n \n \n \n \n Vehicle stocking plans \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Motor vehicles \n \n \n \n \n Wholesale funding arrangements \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Floating charges over corporate assets \n \n \n \n \n Block discounting \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Floating charges over corporate assets \n \n \n \n \n Secured commercial loans \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Floating charges over corporate assets \n \n \n \n \n Secured personal loans \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Property \n \n \n \n \n Government backed loans \n \n \n   \n \n \n   \n \n \n 70 - 100 \n \n \n   \n \n \n 70 - 100 \n \n \n Government guarantee \n \n \n \n \n Property secured \n \n \n   \n \n \n   \n \n \n 100 \n \n \n   \n \n \n 100 \n \n \n Property \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n There have been no significant changes in the quality of collateral as a result of a deterioration or changes to the Group's collateral policies during the reporting period. \n   \n iii. Amounts arising from ECL \n Inputs, assumptions and techniques used for estimating impairment \n See accounting policy in note 44(G)(vii). \n Significant increase in credit risk \n When determining whether the risk of default on a financial instrument has increased significantly since initial recognition, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical experience and expert credit assessment and including forward looking information. \n § A Significant Increase in Credit Risk (\"SICR\") is always deemed to occur when the borrower is 30 days past due on its contractual payments.  If the Group becomes aware ahead of this time of non-compliance or financial difficulties of the borrower, such as loss of employment, avoiding contact with the Group then a SICR has also deemed to occur. \n § A receivable is always deemed to be in default and credit-impaired when the borrower is 90 days past due on its contractual payments or earlier if the Group becomes aware of severe financial difficulties such as bankruptcy, individual voluntary arrangements, abscond or disappearance, fraudulent activity or other similar events. \n   \n Credit risk grades \n The Group allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of default and applying experienced credit judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of risk of default. These factors vary depending on the nature of the exposure and the type of borrower. \n   \n Credit risk grades are defined and calibrated such that the risk of default occurring increases exponentially as the credit risk grade deteriorates. Loans are graded A to C depending on the level of risk. Grade A relates to agreements with the lowest risk, Grade B with medium risk and Grade C relates to agreements with the highest of risk. \n   \n Each exposure is allocated to a credit risk grade on initial recognition based on available information about the borrower. Exposures are subject to ongoing monitoring, which may result in an exposure being moved to a different credit risk grade. The monitoring typically involves the use of the following data: \n   \n \n \n \n \n Corporate exposures \n \n \n Retail exposures \n \n \n All exposures \n \n \n \n \n Information obtained during periodic review of customer files - e.g. audited financial statements, management accounts, budgets and projections. Examples of areas of particular focus are: gross profit margins, financial leverage ratios, debt service coverage, compliance with covenants \n \n \n Internally collected data on customer behaviour - e.g. repayment behaviour \n \n \n Payment record - this includes overdue status as well as a range of variables about payment ratios \n \n \n \n \n Data from credit reference agencies \n \n \n Affordability matrix \n \n \n Requests for and granting of forbearance \n \n \n \n \n \n \n \n External data from credit reference agencies, including industry-standard credit scores \n \n \n Existing forecast changes in business, financial and economic conditions \n \n \n \n \n   \n Definition of default \n The Group considers a financial asset to be in default when: \n §  the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); \n §  the borrower is more than 90 days past due on any material credit obligation to the Group; or \n §  it is becoming probable that the borrower will restructure the asset as a result of bankruptcy due to the borrower's inability to pay its credit obligations. \n In assessing whether a borrower is in default, the Group considers indicators that are: \n §  qualitative: e.g. breaches of covenant; \n §  quantitative: e.g. overdue status and non-payment on another obligation of the same issuer to the Group; and \n §  based on data developed internally and obtained from external sources. \n Inputs into the assessment of whether a financial instrument is in default and their significant may vary over time to reflect changes in circumstances. The definition of default largely aligns with that applied by the Group for regulatory capital purposes. \n Incorporation of forward-looking information \n The Group incorporates forward looking information into the measurement of ECL. \n The Group has identified and documented key drivers of credit risk and credit losses its financial instruments and using an analysis of historical data, has estimated the relationship between macroeconomic variables and credit risk and credit losses. The key drivers for credit risk for corporate, retail and wholesale portfolios include gross domestic product (GDP) growth, unemployment rates and consumer price index (CPI) inflation. The Group estimates each key driver for credit risk over the active forecast period of three years. The table below lists the UK macroeconomic assumption used in the base scenarios over the five year forecast period: \n \n \n \n \n 31 December 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n 2026 \n \n \n 2027 \n \n \n 2028 \n \n \n \n \n GDP growth rate \n \n \n 0.5 \n \n \n 1.0 \n \n \n 1.3 \n \n \n 1.5 \n \n \n 1.7 \n \n \n \n \n CPI inflation \n \n \n 4.2 \n \n \n 2.4 \n \n \n 1.8 \n \n \n 2.0 \n \n \n 2.0 \n \n \n \n \n Unemployment rate \n \n \n 4.8 \n \n \n 4.9 \n \n \n 4.9 \n \n \n 4.9 \n \n \n 5.0 \n \n \n \n \n   \n \n \n \n \n 31 December 2022 \n \n \n 2023 \n \n \n 2024 \n \n \n 2025 \n \n \n 2026 \n \n \n 2027 \n \n \n \n \n GDP growth rate \n \n \n 0.0 \n \n \n 0.4 \n \n \n n/a \n \n \n n/a \n \n \n n/a \n \n \n \n \n CPI inflation \n \n \n 1.8 \n \n \n 0.8 \n \n \n n/a \n \n \n n/a \n \n \n n/a \n \n \n \n \n Unemployment rate \n \n \n n/a \n \n \n n/a \n \n \n n/a \n \n \n n/a \n \n \n n/a \n \n \n \n \n   \n Predicted relationships between the key indicators and default and loss rates on various portfolios of financial assets have been developed based on analysing historical data over the past 8 years. \n   \n Changes to ECL assumptions from the prior year \n As of 31 December 2023, the Group has updated its economic projections utilised in the expected credit loss calculation, shifting from the 2022 figures. This adjustment is prompted by a higher than anticipated inflation and GDP growth rate. Additionally, the forecast duration has been prolonged from two to five years, and an additional key indicator, unemployment rate, has been incorporated. \n iv. Concentration of credit risk \n   \n Geographical \n Lending is restricted to individuals and entities with Isle of Man, UK or Channel Islands addresses. \n   \n Segmental \n The Bank is exposed to credit risk with regard to customer loan accounts, comprising HP and finance lease balances, unsecured personal loans, secured commercial loans, block discounting, vehicle stocking plan loans and wholesale funding agreements.  In addition, the Bank lends via significant introducers into the UK. There was one introducer that accounted for more than 20.0% of the Bank's total lending portfolio at the end of 31 December 2023 (2022: none). \n   \n B. Group Liquidity risk \n For the definition of liquidity risk and information on how liquidity risk is managed by the Group, see note 42. \n   \n i. Exposure to liquidity risk \n The key measure used by the Group for managing liquidity risk is the ratio of net liquid assets to deposits from customers and short-term funding. For this purpose, net liquid assets includes cash and cash equivalents and investment-grade debt securities for which there is an active and liquid market. \n   \n Details of the reported Group ratio of net liquid assets to deposits from customers at the reporting date and during the reporting year were as follows: \n   \n \n \n \n \n   \n \n \n 2023 \n \n \n \n \n \n 2022 \n \n \n \n \n At 31 December \n \n \n 23.0% \n \n \n \n \n \n 20.0% \n \n \n \n \n Average for the year \n \n \n 19.0% \n \n \n \n \n \n 22.0% \n \n \n \n \n Maximum for the year \n \n \n 23.0% \n \n \n \n \n \n 25.0% \n \n \n \n \n Minimum for the year \n \n \n 15.0% \n \n \n \n \n \n 19.0% \n \n \n \n \n   \n ii. Maturity analysis for financial liabilities and financial assets \n The table below shows the Group's financial liabilities classified by their earliest possible contractual maturity, on an undiscounted basis including interest due at the end of the deposit term. Based on historical data, the Group's expected actual cash flow from these items vary from this analysis due to the expected re-investment of maturing customer deposits. \n   \n Residual contractual maturities of financial liabilities as at the reporting date (undiscounted): \n \n \n \n \n   \n   \n 31 December 2023 \n \n \n Sight- \n 8 days \n £000 \n \n \n   \n \n \n >8 days \n - 1 month \n £000 \n \n \n   \n \n \n >1 month \n - 3 months \n £000 \n \n \n   \n \n \n >3 months \n - 6 months \n £000 \n \n \n   \n \n \n >6 months \n - 1 year \n £000 \n \n \n   \n \n \n >1 year \n - 3 years \n £000 \n \n \n   \n \n \n >3 years \n - 5 years \n £000 \n \n \n   \n \n \n >5 \n years \n £000 \n \n \n   \n \n \n Total \n £000 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Deposits \n \n \n 17,261 \n \n \n   \n \n \n 13,767 \n \n \n   \n \n \n 29,718 \n \n \n   \n \n \n 77,801 \n \n \n   \n \n \n 122,719 \n \n \n   \n \n \n 125,205 \n \n \n   \n \n \n 24,076 \n \n \n   \n \n \n - \n \n \n   \n \n \n 410,547 \n \n \n \n \n Other liabilities \n \n \n 55 \n \n \n   \n \n \n 257 \n \n \n   \n \n \n 1,407 \n \n \n   \n \n \n 6,395 \n \n \n   \n \n \n...

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