Interim results for six months to 30 June 2026

About this update from Vanquis Banking Group Plc

[{"type":"text","content":"\n \n \n Vanquis Banking Group interim results for the six months ended 30 June 2026 \n   \n This announcement contains inside information. \n   \n London - 30 July 2026 - Vanquis Banking Group plc ('the Group' or 'Vanquis') today published its interim results for the six months to 30 June 2026. \n   \n \"Profitable growth continued in the first half. Strong credit quality performance, and technology transformation on track, though macroeconomic uncertainty drives more cautious consumer behaviour\" \n   \n Ian McLaughlin, Chief Executive Officer, commented: \"Vanquis made further significant progress in the first half of 2026, delivering profitable balance growth of 8%, while maintaining credit quality through disciplined underwriting, reflecting the continued financial resilience of our customers. Profit before tax increased 44%, exceeding our profit for all of 2025, despite absorbing a significant increase in macroeconomic impairment provision. \n   \n Our transformation reached another important milestone. We successfully migrated all Credit Card customers to our new, award-winning, mobile app. This provides a stronger platform for customer engagement, improved operational efficiency and future scalability. The build of our technology transformation programme, Gateway, remains on track for completion in 2026. We continue to invest in a disciplined way, driving further automation and the expanded use of AI. We now expect to deliver approximately £30-35 million of transformation cost savings, ahead of our previous guidance of £23-28 million. \n   \n While new lending volumes remained resilient overall, with particularly strong growth in Second Charge Mortgages, an uncertain macroeconomic backdrop resulted in more cautious consumer behaviour leading to lower than expected spending and utilisation from existing Credit Card customers. This meant a greater proportion of our growth came from new customer acquisition than anticipated, which reduced asset yields in the near term. While uncertain, for now we are assuming this spending caution persists and we therefore intend to continue to drive greater volume of high quality balance growth through new customer acquisition. This will moderate returns in 2026 and 2027, but position the Group for stronger profitability beyond the near term impact. We now expect a low single digit return on tangible equity in 2026, a low double digit return in 2027 and a mid-teens return in 2028. \n   \n We remain focused on building scale and creating a higher quality, more profitable business that delivers sustainable long term value for shareholders, achieved while staying true to our purpose of delivering caring banking and serving the borrowing needs of the underserved UK adult population. The Group's capital position and the greater clarity we now have on our regulatory requirements support our growth plans. We remain on track to deliver gross customer interest-earning balances in line with expectations. \n   \n Given our confidence in the medium term outlook for the business, and assuming no significant deterioration in the UK economy, the Board intends to re-establish a modest dividend with full year 2026 results.\" \n   \n   \n Executive Summary \n   \n •     Improved profitability: The Group delivered a 44% increase in statutory profit before tax from continuing operations of £8.9m (1H25: £ 6.2 m). This exceeded the Group's full-year 2025 profit before tax from continuing operations of £8.3m, despite recognising an £(8.5)m increase in the IFRS9 macroeconomic impairment provision, reflecting a forecast that peak UK unemployment will increase to 5.7% (December 2025 forecast: 5.1%). \n •     Continued balance growth: Gross customer interest-earning balances increased 8 % to £ 3,054 m in the six months to June 2026. Growth was driven by Second Charge Mortgages and Credit Cards, while Vehicle Finance balances remained stable ahead of the launch of the new onboarding and servicing platform later this year. \n •     Increased net interest income: A 25% year-on-year increase in average gross customer interest-earning balances drove an 8% increase in net interest income to £218.1m . Net interest margin remained strong at 15.0% (1H25: 17.4% ). The reduction reflected the £429m year-on-year growth in lower-risk, lower-margin Second Charge Mortgages, together with lower Credit Card asset yield driven by growth in new customers, including through 0% balance transfers and promotional products, and lower than expected utilisation by existing customers. Excluding Second Charge Mortgages, net interest margin remained resilient at 18.9% (1H25: 19.5%), reflecting improved Vehicle Finance margins. \n •     Stable credit quality: Impairment charges increased 35% year-on-year to £(102.4)m , reflecting balance growth of 24%, but reduced (2) % compared with 2H25, despite the impact of the £(8.5)m IFRS9 macroeconomic impairment provision. Cost of risk remained well controlled at (7.0)% (1H25: (6.6) % and 2H25: (7.9) %). This reflects the stable portfolio quality, with each product performing at the lower end of its guided cost of risk range. \n •     Lower operating costs: Operating costs reduced (8)% to £(126.2)m , driven by £11.5m lower complaint costs, with £7.8m of transformation savings facilitating growth and offsetting inflation related cost increases. The cost: income ratio improved to 53.1% (1H25: 62.5%) . \n •     Significant operational delivery against priorities: Successfully migrated all Credit Card customers to the new award-winning mobile app, providing a stronger platform for customer engagement, operational efficiency and future growth.  Gateway build remains on track for completion in 2026. The Group is making targeted, disciplined investment to support successful delivery and position the platform for continuous improvement, including further automation and the expanded use of AI. This enhances the Group's future efficiency potential, with overall transformation cost savings now expected to be £30-35m over 2026 to 2028, ahead of previous guidance of £23-28m over 2026 to 2027. \n •     Robust liquidity and funding: Liquidity remained strong, with High Quality Liquid Assets (HQLA) increasing 22% to £1,215m. Retail deposits increased 6% over the six months to £3,176m and represented 84.2% of total funding (December 2025: 89.7%), underpinning a stable funding base that remains a core strength of the Group. \n •     Capital supporting growth: The Common Equity Tier 1 (CET1) ratio was 15.6% at 30 June 2026 (December 2025: 16.5%), providing capacity to support the Group's continued growth ambitions. \n o     Optimised capital structure: During the second quarter, the Group successfully tendered and refinanced £100m of Tier 2 capital, ensuring adequate surplus CET1, Tier 1 and Total Capital to support future growth. \n o     Increased capital capacity expected from 2027: Following implementation of Basel 3.1 and the Small Domestic Deposit Takers (SDDT) regime from 1 January 2027, the Group expects to have increased surplus capital, providing additional capacity to support future lending growth. \n •     Near term outlook moderated: Higher new customer growth in Credit Cards resulted in a greater proportion of growth coming from new customer acquisition than anticipated, which is lower yielding in its early years, as new credit card balances start to become profitable after two years. This was combined with lower than expected Credit Card spending and utilisation from existing customers due to a more uncertain macroeconomic backdrop. The Group are assuming this trend persists, and intend to continue to drive greater volumes of high quality balance growth from new customers. While this will moderate returns in 2026 and 2027, it positions the Group for stronger profitability beyond the near term impact. The Group now expects a return on tangible equity of low single digits in 2026, low double digits in 2027 and mid-teens in 2028. \n •     Dividend: Given confidence in the medium term outlook for the business, and assuming no significant deterioration in the UK economy, the Board intends to re-establish a modest dividend with FY26 results. \n   \n Group financial results \n \n \n \n \n Income Statement (£m) \n \n \n \n \n \n   \n 1H26 \n \n \n   \n 2H25 \n \n \n   \n 1H25 \n \n \n HoH \n Change % \n \n \n YoY \n Change % \n \n \n \n \n Interest income \n \n \n \n \n \n 297.5 \n \n \n 292.3 \n \n \n 274.9 \n \n \n     2          \n \n \n     8          \n \n \n \n \n Interest expense \n \n \n \n \n \n (79.4) \n \n \n (76.1) \n \n \n (72.7) \n \n \n     4          \n \n \n     9          \n \n \n \n \n Net interest income \n \n \n \n \n \n 218.1 \n \n \n 216.2 \n \n \n 202.2 \n \n \n     1          \n \n \n     8          \n \n \n \n \n Non-interest income \n \n \n \n \n \n 19.4 \n \n \n 19.0 \n \n \n 17.5 \n \n \n     2          \n \n \n       11     \n \n \n \n \n Total income \n \n \n \n \n \n 237.5 \n \n \n 235.2 \n \n \n 219.7 \n \n \n     1          \n \n \n     8          \n \n \n \n \n Impairment charges \n \n \n \n \n \n (102.4) \n \n \n (105.0) \n \n \n (76.1) \n \n \n                 (2) \n \n \n       35     \n \n \n \n \n Risk-adjusted income \n \n \n \n \n \n 135.1 \n \n \n 130.2 \n \n \n 143.6 \n \n \n     4          \n \n \n                 (6) \n \n \n \n \n Operating costs \n \n \n \n \n \n (126.2) \n \n \n (128.1) \n \n \n (137.4) \n \n \n                 (1) \n \n \n                 (8) \n \n \n \n \n Profit before tax from continuing operations \n \n \n \n \n \n 8.9 \n \n \n 2.1 \n \n \n 6.2 \n \n \n          324         \n \n \n       44     \n \n \n \n \n Tax (charge)/credit \n \n \n \n \n \n (1.2) \n \n \n 1.0 \n \n \n (1.3) \n \n \n                 (220) \n \n \n                 (8) \n \n \n \n \n Profit after tax from continuing operations \n \n \n \n \n \n 7.7 \n \n \n 3.1 \n \n \n 4.9 \n \n \n          148         \n \n \n       57     \n \n \n \n \n Profit after tax from discontinued operations \n \n \n \n \n \n - \n \n \n - \n \n \n 0.7 \n \n \n - \n \n \n                 (100) \n \n \n \n \n Statutory profit after tax \n \n \n \n \n \n 7.7 \n \n \n 3.1 \n \n \n 5.6 \n \n \n          148         \n \n \n       38     \n \n \n \n \n AT1 distributions (gross of tax) \n \n \n \n \n \n (3.3) \n \n \n (0.5) \n \n \n - \n \n \n          560         \n \n \n     -         \n \n \n \n \n Statutory profit attributable to shareholders \n \n \n \n \n \n 4.4 \n \n \n 2.6 \n \n \n 5.6 \n \n \n       69     \n \n \n                 (21) \n \n \n \n \n Balance Sheet (£m) \n \n \n \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n HoH \n Change % \n \n \n YoY \n Change % \n \n \n \n \n Gross customer interest-earning balances \n \n \n \n \n \n 3,054 \n \n \n 2,824 \n \n \n 2,459 \n \n \n 8 \n \n \n 24 \n \n \n \n \n Average gross customer interest-earning balances \n \n \n \n \n \n 2,933 \n \n \n 2,647 \n \n \n 2,339 \n \n \n 11 \n \n \n 25 \n \n \n \n \n Gross receivables \n \n \n \n \n \n 3,176 \n \n \n 2,935 \n \n \n 2,570 \n \n \n     8          \n \n \n       24     \n \n \n \n \n Net receivables \n \n \n \n \n \n 2,932 \n \n \n 2,691 \n \n \n 2,325 \n \n \n     9          \n \n \n       26     \n \n \n \n \n Average retail deposits \n \n \n \n \n \n 3,091 \n \n \n 2,781 \n \n \n 2,447 \n \n \n       11     \n \n \n       26     \n \n \n \n \n Closing tangible net asset value (TNAV) 9 \n \n \n \n \n \n 357 \n \n \n 358 \n \n \n 362 \n \n \n - \n \n \n (1) \n \n \n \n \n Average tangible equity 7 \n \n \n \n \n \n 356 \n \n \n 360 \n \n \n 361 \n \n \n (1) \n \n \n (1) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Selected key metrics (%) \n \n \n \n \n \n 1H26 \n \n \n 2H25 \n \n \n 1H25 \n \n \n HoH \n Change \n \n \n YoY \n Change \n \n \n \n \n Asset yield 1 \n \n \n \n \n \n 19.1 \n \n \n 20.3 \n \n \n 21.8 \n \n \n                 (1.2) \n \n \n                 (2.7) \n \n \n \n \n Net interest margin (NIM) 2 \n \n \n \n \n \n 15.0 \n \n \n 16.2 \n \n \n 17.4 \n \n \n                 (1.2) \n \n \n                 (2.4) \n \n \n \n \n Total income margin (TIM) 3 \n \n \n \n \n \n 16.3 \n \n \n 17.6 \n \n \n 18.9 \n \n \n                 (1.3) \n \n \n                 (2.6) \n \n \n \n \n Cost of risk 4 \n \n \n \n \n \n (7.0) \n \n \n (7.9) \n \n \n (6.6) \n \n \n         0.9  \n \n \n                 (0.4) \n \n \n \n \n Risk-adjusted margin (RAM) 5 \n \n \n \n \n \n 9.3 \n \n \n 9.8 \n \n \n 12.4 \n \n \n                 (0.5) \n \n \n                 (3.1) \n \n \n \n \n Cost: income ratio 6 \n \n \n \n \n \n 53.1 \n \n \n 54.5 \n \n \n 62.5 \n \n \n                 (1.4) \n \n \n                 (9.4) \n \n \n \n \n Statutory ROTE 7 \n \n \n \n \n \n 2.5 \n \n \n 1.7 \n \n \n 3.1 \n \n \n         0.8  \n \n \n                 (0.6) \n \n \n \n \n Selected per share metrics (p) \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n HoH \n Change % \n \n \n YoY \n Change % \n \n \n \n \n Basic earnings per share (EPS) 8 \n \n \n \n \n \n 1.8 \n \n \n 1.0 \n \n \n 2.2 \n \n \n 80 \n \n \n (18) \n \n \n \n \n Dividend per share \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n TNAV per share 9 \n \n \n \n \n \n 143 \n \n \n 143 \n \n \n 142 \n \n \n - \n \n \n 1 \n \n \n \n \n   \n \n \n \n \n Notable items (£m) \n \n \n Account line \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n \n \n Provision for motor finance provision \n \n \n Operating costs \n \n \n - \n \n \n (3.0) \n \n \n - \n \n \n \n \n Total notable items \n \n \n \n \n \n - \n \n \n (3.0) \n \n \n - \n \n \n \n \n   \n 1H26 Financial Highlights \n   \n Income Statement \n   \n All commentary relates to year-on-year performance unless otherwise stated. \n   \n Income \n •     Total income increased 8% to £237.5m and net interest income increased 8% to £218.1m , reflecting balance growth, although the mix of growth in Credit Cards and Second Charge Mortgages impacted asset yield and NIM. \n o     Interest income increased 8% to £297.5m , driven by a 25% increase in average gross customer interest-earning balances to £2,933m offset by the mix effect of growing lower-risk, lower-margin Second Charge Mortgages and lower asset yield in Credit Cards. \n ▪      Asset yield decreased (2.7) percentage points to 19.1% , reflecting the mix effect from the lower Second Charge Mortgage yield and lower Credit Cards yield. \n ◦     Credit Cards yield reduced (2.3) percentage points to 25.5%, reflecting new customer growth, including via 0% BTs and promotional products and a reduction in balances of existing customers, as they cautiously moderated spending in the second quarter in the face of increased macroeconomic uncertainty. \n ◦     Second Charge Mortgages asset yield decreased (0.8) percentage points to 6.8%, reflecting pricing pressure from increased competition. \n ◦     Vehicle Finance asset yield improved 0.5 percentage points to 17.4% due to repricing initiatives . \n •     Interest expense increased 9% to £(79.4)m , reflecting the increased funding requirement to support lending growth and a resulting increase in retail deposits. Average retail deposits increased 26% to £3,091m . Average deposit rates reduced year-on-year, driven by the lower Bank of England (BoE) base rate.  However, given the increase in swap rates in 2Q26, this is expected to increase going forward. \n •     NIM reduced to 15.0% (1H25: 17.4%). Excluding Second Charge Mortgages, NIM reduced marginally to 18.9% (1H25: 19.5%). \n •     Non-interest income increased 11% to £19.4m , reflecting higher fee and commission income on greater balances. \n   \n Impairment \n •     Impairment charges increased 35% to £(102.4)m , driven by the growth in gross customer interest earning balances and an £(8.5)m increase in the IFRS9 provision for macroeconomic uncertainty driven by the expectation peak UK unemployment increases to 5.7%. Credit quality of the portfolio remained stable, with the cost of risk across products at the lower end of guided ranges. \n o     Gross charge-offs increased 12% to £(137.3)m , in line with expectations, reflecting the maturity of balance growth in 2025. \n o     Net charge-offs post recoveries, increased 14% to £(106.7)m. \n o     IFRS9 modelled impairment 10 resulted in a net reduction in impairment of £4.3m (1H25: £17.4m), partially offsetting the increase in net charge-offs and included the £(8.5)m IFRS9 macroeconomic provision. \n o     Cost of risk increased (0.4) percentage points to (7.0)% reflecting the increased IFRS9 macroeconomic provision. \n ▪      Credit Cards cost of risk was (11.0)% (1H25: (10.0)% ), at the lower end of FY26 guidance of (10.0) to (13.0)%. \n ▪      Vehicle Finance cost of risk was (5.1)% (1H25: (3.4)% ), at the lower end of FY26 guidance of (5.0) to (7.0)%. \n ▪      Second Charge Mortgages cost of risk was (0.2)% (1H25: (0.1)% ), at the lower end of FY26 guidance of less than (1.0)%. \n •     Risk adjusted income reduced (6)% to £135.1m , with risk adjusted margin reducing (3.1) percentage points to 9.3%. \n   \n Operating costs \n •     Operating costs decreased (8)% to £(126.2)m , driven by £11.5m lower complaint costs, with continued transformation savings of £7.8m facilitating growth and offsetting inflation related cost increases. \n •     The cost: income ratio improved to 53.1% (1H25: 62.5%) . \n •     Continued investment linked to the completion of the Gateway program to ensure the platform supports the next phase of continuous IT improvement, including the expanded use of AI. This will result in increased savings in the coming years. \n •     Investment was also made to improve Credit Card and Credit Risk capabilities. \n   \n Profits \n •     Profit before tax from continuing operations increased 44% to £8.9m . \n •     The tax charge of £(1.2)m (1H25: £(1.3)m ) broadly reflected the mainstream UK corporation tax rate of 25.0% on the profit before tax from continuing operations, partially offset by the tax credit on AT1 distributions. \n •     Statutory profit after tax from continuing operations increased 57% to £7.7m . \n •     Statutory profit attributable to shareholders reduced (21) % to £ 4.4 m , reflecting Additional Tier 1 (AT1) distributions gross of tax of £ (3.3) m (1H25: nil) following the AT1 capital issuance in 2H25. \n •     ROTE reduced to 2.5% (1H25: 3.1%) . \n   \n   \n Balance Sheet \n   \n \n \n \n \n £m \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n HoH \n Change % \n \n \n YoY \n Change % \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 Cash and cash equivalents \n \n \n 859 \n \n \n 805 \n \n \n 805 \n \n \n     7          \n \n \n     7          \n \n \n \n \n Investment securities \n \n \n 404 \n \n \n 255 \n \n \n 117 \n \n \n       58     \n \n \n          245         \n \n \n \n \n Amounts receivable from customers (net receivables) 11 \n \n \n 2,932 \n \n \n 2,692 \n \n \n 2,325 \n \n \n     9          \n \n \n       26     \n \n \n \n \n Pension asset \n \n \n 10 \n \n \n 6 \n \n \n 13 \n \n \n       67     \n \n \n                 (23) \n \n \n \n \n Goodwill and other intangibles \n \n \n 71 \n \n \n 66 \n \n \n 64 \n \n \n     8          \n \n \n       11     \n \n \n \n \n Other assets \n \n \n 121 \n \n \n 118 \n \n \n 123 \n \n \n     3          \n \n \n                 (2) \n \n \n \n \n Total assets \n \n \n 4,397 \n \n \n 3,942 \n \n \n 3,447 \n \n \n       12     \n \n \n       28     \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 Retail deposits \n \n \n 3,219 \n \n \n 3,020 \n \n \n 2,464 \n \n \n     7          \n \n \n       31     \n \n \n \n \n Bank and other borrowings 12 \n \n \n 595 \n \n \n 348 \n \n \n 448 \n \n \n       71     \n \n \n       33     \n \n \n \n \n Trade and other payables \n \n \n 51 \n \n \n 52 \n \n \n 56 \n \n \n                 (2) \n \n \n                 (9) \n \n \n \n \n Other liabilities \n \n \n 37 \n \n \n 34 \n \n \n 44 \n \n \n     9          \n \n \n                 (16) \n \n \n \n \n Total liabilities \n \n \n 3,902 \n \n \n 3,454 \n \n \n 3,012 \n \n \n       13     \n \n \n       30     \n \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 commentary is relative to the December 2025 balance sheet, unless otherwise stated. \n   \n •     Total assets increased 12% to £4,397m , driven by the 9% increase in net receivables and a 58% increase in investment securities. \n o     Cash and balances at central banks increased 7% to £859m , reflecting increased cash placed with the BoE and driven by the 22% increase in HQLA following the Credit Card securitisation completed in June 2026. \n o    Investment securities increased 58% to £404m , due to increased purchases of higher yielding securities, as part of the strategy to diversify the Group's HQLA beyond BoE deposits. \n o     Net receivables increased 9% to £2,932m , driven by growth in gross customer interest-earning balances. Despite the growth in balances, expected credit losses (ECL) remained stable at £(243)m (December 2025: £(244)m), reflecting the stable credit quality of the portfolio. \n o     Gross customer interest-earning balances increased 8% to £3,054m , comprising: \n ▪      Credit Cards : Balances increased 2% to £1,547m (December 2025: £1,518m) , driven by new customer growth, including via 0% BTs and promotional products. This growth was despite a more uncertain macroeconomic backdrop, which resulted in existing customers acting cautiously by moderating spending. \n ▪      Vehicle Finance : Balances were stable at £707m (December 2025: £706m ), in line with expectations, reflecting the proactive management of new business growth ahead of the launch of the new onboarding and servicing platform later this year as part of the conclusion of the Gateway programme build. \n ▪      Second Charge Mortgages : Balances grew to £800m (December 2025: £599m), driven by long term forward flow origination agreements with partners. \n •     Liabilities increased 13% to £3,902m , as retail deposits, inclusive of accrued interest, increased 7% to £3,219m, reflecting the increased funding requirement for higher balances. This increase included continued optimisation of the retail funding mix through a broader product range, including Individual Savings Accounts (ISAs). \n o     Bank and other borrowings increased 71% to £595m driven by the public issuance of £268m of Credit Card Asset Backed Securities (ABS), partially offset by the redemption of £40m of Vehicle Finance ABS. These securitisation programmes provide contingent liquidity and funding for the Group. \n   \n Capital, Liquidity and Funding \n   \n \n \n \n \n \n \n \n \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n HoH \n Change \n \n \n YoY \n Change \n \n \n \n \n CET1 ratio (%) 13 \n \n \n \n \n \n 15.6 \n \n \n 16.5 \n \n \n 18.5 \n \n \n (0.9) \n \n \n (2.9) \n \n \n \n \n Risk weighted assets (RWAs) (£m) \n \n \n \n \n \n 2,181 \n \n \n 2,073 \n \n \n 1,883 \n \n \n        5%   \n \n \n           16%          \n \n \n \n \n High quality liquid assets (HQLA) (£m) \n \n \n \n \n \n 1,215 \n \n \n 998 \n \n \n 873 \n \n \n           22%          \n \n \n           39%          \n \n \n \n \n Liquidity coverage ratio (LCR) (%) \n \n \n \n \n \n 221 \n \n \n 306 \n \n \n 366 \n \n \n (85) \n \n \n (145) \n \n \n \n \n Retail deposits (£m) \n \n \n \n \n \n 3,176 \n \n \n 2,984 \n \n \n 2,424 \n \n \n        6%   \n \n \n           31%          \n \n \n \n \n Retail funding (% of all funding) \n \n \n \n \n \n 84.2 \n \n \n 89.7 \n \n \n 84.6 \n \n \n (5.5) \n \n \n (0.4) \n \n \n \n \n   \n All commentary is relative to the December 2025 capital liquidity and funding positions, unless otherwise stated. \n   \n Capital \n •     The CET1 ratio reduced (0.9) percentage points to 15.6%. \n o     CET1 capital reduced slightly to £339m (December 2025: £341m), reflecting the statutory profit attributable to shareholders of £4.4m, resulting in 0.2 percentage points of CET1 ratio accretion and investment driving increased intangibles spend of £(7.0)m, reducing the ratio by (0.3) percentage points. \n o     Capital deployment for growth, driving a 5% increase in RWAs to £ 2,181 m, reduced the ratio by (0.8) percentage points. \n o     Surplus CET1 capital above the Group's disclosed CET1 capital requirement and regulatory combined buffers of 11.3% was £93m (December 2025: £107m). \n •     The Tier 1 ratio reduced (1.1) percentage points to 18.2% and the total capital ratio reduced (1.4) percentage points to 24.7% , reflecting the movement in the CET1 ratio. \n o     The Group successfully tendered and re-issued £100m of Tier 2 capital in 2Q26, which means Vanquis now has adequate surplus CET1, Tier 1 and total capital to deliver on its growth plans in the coming years. \n o     £41.5m of the original Tier 2 instrument remains outstanding, which is callable in October 2026. \n •     The leverage ratio was 10.7% (December 2025: 12.1%), remaining comfortably above the minimum requirement. \n Liquidity \n •     HQLA increased 22% to £1,215m, driven by the public issuance of £268m of Credit Card ABS in June 2026. £804m was held in the BoE reserve account, with the remaining £411m invested in higher returning assets, including UK gilts, Treasury bills and other Sovereigns, Supranationals and Agencies (SSAs). This resulted in excess liquidity over the LCR 100% minimum of £648m (December 2025: £653m), reflecting an LCR of 221% (December 2025: 306%). \n   \n Funding \n •     Retail deposits increased 6% to £ 3,176 m , delivering funding at an attractive cost of funds compared to wholesale alternatives. \n o     The Group remains primarily funded by retail deposits, representing 84.2% (December 2025: 89.7%) of total funding including Tier 2 capital. \n o     Within the retail deposit base, Individual Savings Accounts (ISAs) increased 87% to £1,018m, with a broadening of the product range. Fixed-term products reduced 8% to £1,386m, retail notice accounts reduced 30% to £304m, and Vanquis and Snoop branded easy access accounts decreased 6% to £468m. \n •     Funding diversification improved following the issuance of £268m of Credit Card ABS in June 2026, partially offset by the reduction of Vehicle Finance ABS by £40m to £160m. Additional funding is provided by Tier 2 capital and access to Central Bank facilities. \n   \n Outlook and Guidance \n   \n •     Based on current macroeconomic assumptions, the Group expects: \n o     Gross customer interest earning balances to exceed £3.3bn at the end of 2026 and £3.7bn by the end of 2027 . This assumes continued strong, but still disciplined, new business growth in Credit Cards and Second Charge Mortgages in the second half of 2026 and through 2027, and Vehicle Finance performance benefiting from the launch of the new onboarding and servicing platform from 2027. \n o     NIM to be approximately 14.5% in 2026 and exceed 13.0% in 2027, with RAM expected to exceed 8.5% in 2026 and 8.0% in 2027 . This reflects the revised mix of Credit Card growth resulting in lower asset yields in Credit Cards, lower yields on Second Charge Mortgages given competitive pressures and higher funding costs. \n o     A reducing trend in operating costs in both 2026 and 2027 , despite targeted additional investment in the Gateway programme, including to support the expanded use of AI. The Group now expects to deliver overall transformation cost savings of £30-35m over 2026 to 2028 , ahead of previous guidance of £23m to £28m over 2026 to 2027. \n o     Its cost:income ratio to reduce to the low 50% range in FY26 and the mid-to-high 40% range in 2027 . \n o     A low single digit RoTE in 2026, low double digit RoTE in 2027 and mid-teens RoTE in 2028. This reflects the revised mix of Credit Card balance growth into the second half of 2026 and through 2027, with the benefits of recent new customer growth expected to be more fully reflected from 2027. It also reflects a disciplined approach to growth and capital deployment, prioritising sustainable returns over the timing of delivery. \n o     Its CET1 ratio to remain above 14.5% in 2026 , providing capital capacity to support disciplined growth in the second half of the year. Following the implementation of Basel 3.1 and the SDDT regime from 1 January 2027, Group RWAs are expected to increase by approximately 15% on a June 2026 pro forma basis. However, given the expected change in capital requirements, the Group is now guiding to a CET1 ratio of greater than 12.0% in 2027. This should result in increased surplus capital, providing additional capacity to support future lending growth. \n   \n   \n   \n \n \n \n \n \n \n \n 2026 Statutory Guidance \n \n \n 2027 Statutory Guidance \n \n \n \n \n Gross customer interest-earning balances \n \n \n >£3.3bn \n (unchanged) \n   \n \n \n >£3.7bn (unchanged) \n \n \n \n \n NIM \n \n \n c.14.5% \n (c.15.5% previously) \n   \n \n \n >13.0% \n (c.14.5% previously) \n   \n \n \n \n \n RAM \n \n \n >8.5% \n (>9.5% previously) \n   \n \n \n >8.0% \n (>9.0% previously) \n   \n \n \n \n \n Cost: income ratio \n \n \n Low 50s \n (high 40s previously) \n   \n \n \n Mid to high 40s   (mid 40s previously) \n \n \n \n \n ROTE \n \n \n Low single digits \n (low double digits previously) \n   \n \n \n Low double digits (mid-teens now expected in 2028) \n \n \n \n \n CET1 ratio \n \n \n >14.5% \n (unchanged) \n \n \n >12% post Basel 3.1 and SDDT regime implementation from 1 January 2027 \n \n \n \n \n   \n •    Management and the Board remain confident in the medium term outlook for the business. This is underpinned by the growth opportunity within the large and underserved target addressable market. \n o     The profitability improvement from the recent growth in Credit Cards is expected to be realised more fully from 2027 and beyond. \n o     Vehicle Finance is expected to return to growth in 2027, following the completion of the new technology platform build via Gateway in 2026. \n o     The growth opportunity within the growing Second Charge Mortgage market remains attractive. \n o     The Group also expects to realise further operational efficiencies and cost savings beyond 2027 as the benefits of its transformation programme continue to be delivered. \n • The Group's outlook is supported by resilient credit performance, strong capital, liquidity and funding, continued technology transformation, and a clear focus on building a higher quality, more scalable and more profitable business. \n   \n Capital Management and Dividend \n   \n •     With the priority in 2026 remaining capital deployment to support balance growth, the Board has decided not to declare a dividend for 1H26 (1H25: no dividend), as previously guided. \n •     Given confidence in the medium term outlook for the business, and assuming no significant deterioration in the UK economy, the Board intends to re-establish a modest dividend with FY26 results. \n •     The Board intends to reset the capital allocation framework and distribution policy following full delivery of the strategy in 2026. \n   \n 1H26 Operational Highlights - Serve More, Serve Responsibly, Scale Profitably \n   \n The Group continued to make progress against its strategy to Serve More, Serve Responsibly and Scale Profitably, supported by balance growth, product development, digital transformation and continued investment in the customer proposition. This was recognised as part of the Euromoney Awards for Excellence where Vanquis won awards for both Europe's Best Bank Transformation and United Kingdom's Best for Consumer Lending. \n   \n Serve More \n •     Credit Cards: The business continued to strengthen the customer proposition through the new Vanquis app. This included: \n o     Behaviour linked prize draws, which over 700k customers engaged with. \n o     The launch of Vanquis Rewards, where over 250k customers have registered and over £100k cashback has been awarded. \n o     Developing instalment lending alternatives and a Prime Upgrade proposition to existing customers, to retain high quality customers as they build financial resilience. \n •     Vehicle Finance: Additional pricing points introduced, helping more customers receive a rate that accurately reflects their circumstances. Moneybarn also won the Company Award for Diversity & Inclusion at the Car Finance Awards 2026, recognising its inclusive products and accessible communications that support better outcomes for customers. \n •     Second Charge Mortgages: Customers increased 30% to 12.9k, reflecting strong growth via forward flow partners. \n •     Snoop: Active users increased by 7% to 335k year-on-year, including 44k Vanquis customers. \n •     Savings: Snoop launched a new Savings dashboard, helping customers track balances, activity and savings goals over time, supporting engagement and financial resilience. \n   \n Serve Responsibly \n •     Customer satisfaction: The Group's UK Customer Satisfaction Index score has increased to 83.2, relative to an industry benchmark of 82.0. The result shows strong performance across our products and customer satisfaction measures. \n •     Customer experience: The Group received ServiceMark accreditation from the Institute of Customer Service, reflecting progress in customer experience and service quality. The new customer service platform is enabling faster, more personalised support. \n •     Accessibility and inclusion: The new Vanquis app has been designed to improve customer experience, increase self-service adoption and reduce customer effort, while strengthening accessibility through improved navigation, clearer journeys and enhanced functionality. \n •     Customer support: Launched a new credit card repayment calculator, helping customers understand how changes to their monthly payments can help clear balances sooner. The tool also signposts financial support options, providing practical help for people who may need additional support. \n •     Fair Finance: The decline referral programme continued to support \"Not Yet\" customers. The partnership helps customers access affordable credit and has identified more than £57m in annualised unclaimed government benefits for over 35k customers since January 2025. \n   \n Scale Profitably \n •     New Vanquis app: Migrated all Credit Card customers to the new app, marking a major milestone in the Group's digital transformation. The app replaces legacy infrastructure with a modern, scalable platform designed to increase self-service, reduce servicing friction and support lower cost to serve over time. It is the primary digital channel for customer relationships, connecting servicing, rewards, fraud protection, in-app agentic chat and future money management capabilities. \n •     New onboarding journey: Launched a new credit card onboarding journey as part of the Gateway technology transformation, combining a simpler and more accessible customer experience with modern decisioning, enhanced fraud controls and improved data insight. The new journey enables instant spend, access to the Vanquis app and enables a scalable foundation for future product launches, including Vehicle Finance. \n •     AI and automation: AI is becoming an important enabler of the Group's strategy, with activity focused on colleague tools, AI supported customer service pilots, machine learning in analytics and decisioning, and customer facing capabilities through Snoop. An example is the recent launch of the Group's first customer facing Agentic AI tool to help manage customer queries through the new app. The Group's approach remains focused and responsible, with governance and human oversight central to delivery. \n   \n Update on External Factors \n   \n •     Vanquis did not participate in DCAs and did not operate tied selling arrangements. Therefore, the Group is not in scope for these elements of the possible FCA motor finance compensation schemes. \n •     The FCA has published two industry ‑ wide schemes. Vanquis is only exposed to potential redress under Scheme 2, which covers agreements entered into between 1 April 2014 and 1 November 2024. \n •     The Group has 4,338 credit agreements where commissions paid were above 39% of the total charge for credit and 10% of the total amount of credit. \n •     The Group recognised provision of £3.0m in respect of this matter in 3Q25, which has been reviewed and remains unchanged. \n •     While the implementation of the scheme is uncertain due to legal challenges from other interested parties, Vanquis remains committed to ensuring customers receive appropriate redress where detriment has occurred. In the meantime, the Group is working through the elements of the scheme not subject to the pause and will begin contacting customers who are not due redress shortly. \n •     Of the related complaints received to date, 97% have been from CMCs, and of the 4,338 credit agreements potentially in scope for the scheme, less than 30% of these customers have complained. \n   \n Results webcast \n   \n Ian McLaughlin, CEO, and Dave Watts, CFO, will host a results webcast at 08:30 today. To register your attendance, please use this link: https://webcast.openbriefing.com/vanquis-1h26/ \n   \n To register your attendance for the conference call, please use this link: https://www.netroadshow.com/events/login/1PeTHmoj9tWqK66dS8LzDs5LKPgi65hgA2O14 \n   \n Materials for the results presentation have been published at: Results, Reports and Presentations | Vanquis \n   \n Enquiries \n   \n Investors and analysts \n James Cranstoun, Head of Investor Relations \n [email protected] \n +44 (0) 7766 937 406 \n   \n Media \n Scott Mowbray, Head of External Communications \n [email protected] \n +44 (0) 7834 843 384 \n   \n Victoria Ainsworth, Senior Director (Hawthorn Advisors) \n [email protected] \n +44 (0) 7894 995 886 \n   \n Footnotes \n   \n 1.     Asset yield is calculated as interest income received from customers for the period as a percentage of average gross customer interest-earning balances for the 6 months ended 30 June and 31 December using a 7 point month end average. \n 2.     Net interest margin is calculated as interest income less interest expense for the period as a percentage of average gross customer interest-earning balances for the 6 months ended 30 June and 31 December using a 7 point month end average. \n 3.     Total income margin is calculated as total income for the period as a percentage of average gross customer interest-earning balances for the 6 months ended 30 June and 31 December using a 7 point month end average. \n 4.     Cost of risk is calculated as impairment charges for the period as a percentage of average gross customer interest-earning balances for the 6 months ended 30 June and 31 December using a 7 point month end average. \n 5.     Risk-adjusted margin is defined as risk-adjusted income for the period as a percentage of average gross customer interest-earning balances for the 6 months ended 30 June and 31 December using a 7 point month end average. \n 6.     Cost: income ratio is calculated as operating costs as a percentage of total income for the 6 months ended 30 June and 31 December. \n 7.     ROTE is calculated as annualised statutory profit attributable to shareholders for the 6 months ended 30 June and 31 December as a percentage of average tangible equity for the 6 months ended 30 June and 31 December. Tangible equity is stated as equity after deducting average AT1 notes, the Group's pension asset, net of deferred tax, less intangible assets and goodwill. \n 8.     Basic earnings per share is calculated as statutory profit after tax for the 6 months ended 30 June and 31 December, divided by the weighted average number of shares outstanding less the weighted average number of shares held by the Employee Benefit Trust.  \n 9.     TNAV per share is calculated as closing tangible net asset value, divided by the period end number of shares in issue, less shares held by the Employee Benefit Trust. Tangible net asset value is stated as equity after deducting the Group's pension asset, net of deferred tax, intangible assets and goodwill and AT1 notes. \n 10.  IFRS9 modelled impairment represents net risk movements from stage migrations and changes in post model adjustments (PMAs). \n 11.  Amounts receivable from customers are presented net of £(1.0)m (December 2025: £0.2m) fair value adjustment for portfolio hedged risk. Underlying net receivables were £2,933m (December 2025: £2,691m). \n 12.  Bank and other borrowings are presented net of £1.2m (December 2025: £(0.2)m) fair value adjustment for hedged risk. Underlying bank and other borrowings were £594m (December 2025: £348m). \n 13.  The CET1 ratio is calculated as the ratio of the Group's CET1 capital as a percentage of the Group's risk-weighted assets measured in accordance with the CRR. \n   \n Forward looking statements \n This report may contain certain \"forward looking statements\" regarding the financial position, business strategy or plans for future operations of Vanquis Banking Group. All statements other than statements of historical fact included in this document may be forward looking statements. Forward looking statements also often use words such as \"believe\", \"expect\", \"estimate\", \"intend\", \"anticipate\" and words of a similar meaning. By their nature, forward looking statements involve risk and uncertainty that could cause actual results to differ from those suggested by them. Much of the risk and uncertainty relates to factors that are beyond Vanquis Banking Group's ability to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements which speak only as at the date of this report. Vanquis Banking Group does not assume any obligation to, and does not intend to, revise or update these forward-looking statements, except as required pursuant to applicable law or regulation. No statement in this announcement is intended as a profit forecast or estimate for any period. No statement in this announcement should be interpreted to indicate a particular level of profit and, as a consequence, it should not be possible to derive a profit figure for any future period from this report. \n   \n Operating review \n   \n Segmental product performance \n   \n \n \n \n \n 1H26 £m \n \n \n Credit Cards \n \n \n Vehicle Finance \n \n \n Second Charge Mortgages \n \n \n Corporate Centre \n \n \n Total \n \n \n \n \n Interest income \n \n \n 194.1 \n \n \n 61.3 \n \n \n 23.1 \n \n \n 19.0 \n \n \n 297.5 \n \n \n \n \n Interest expense \n \n \n (27.1) \n \n \n (13.1) \n \n \n (14.6) \n \n \n (24.6) \n \n \n (79.4) \n \n \n \n \n Net interest income \n \n \n 167.0 \n \n \n 48.2 \n \n \n 8.5 \n \n \n (5.6) \n \n \n 218.1 \n \n \n \n \n Non-interest income \n \n \n 17.4 \n \n \n - \n \n \n 1.2 \n \n \n 0.8 \n \n \n 19.4 \n \n \n \n \n Total income \n \n \n 184.4 \n \n \n 48.2 \n \n \n 9.7 \n \n \n (4.8) \n \n \n 237.5 \n \n \n \n \n Impairment charges \n \n \n (83.7) \n \n \n (18.1) \n \n \n (0.6) \n \n \n - \n \n \n (102.4) \n \n \n \n \n Risk-adjusted income \n \n \n 100.7 \n \n \n 30.1 \n \n \n 9.1 \n \n \n (4.8) \n \n \n 135.1 \n \n \n \n \n Operating costs \n \n \n (87.9) \n \n \n (28.4) \n \n \n (2.0) \n \n \n (7.9) \n \n \n (126.2) \n \n \n \n \n Profit/(loss) before tax from continuing operations \n \n \n 12.8 \n \n \n 1.7 \n \n \n 7.1 \n \n \n (12.7) \n \n \n 8.9 \n \n \n \n \n   \n   \n \n \n \n \n 2H25 £m \n \n \n Credit Cards \n \n \n Vehicle Finance \n \n \n Second Charge Mortgages \n \n \n Corporate Centre \n \n \n Total \n \n \n \n \n Interest income \n \n \n 191.8 \n \n \n 61.0 \n \n \n 17.4 \n \n \n 22.1 \n \n \n 292.3 \n \n \n \n \n Interest expense \n \n \n (26.9) \n \n \n (13.9) \n \n \n (11.1) \n \n \n (24.2) \n \n \n (76.1) \n \n \n \n \n Net interest income \n \n \n 164.9 \n \n \n 47.1 \n \n \n 6.3 \n \n \n (2.1) \n \n \n 216.2 \n \n \n \n \n Non-interest income \n \n \n 17.3 \n \n \n - \n \n \n 0.8 \n \n \n 0.9 \n \n \n 19.0 \n \n \n \n \n Total income \n \n \n 182.2 \n \n \n 47.1 \n \n \n 7.1 \n \n \n (1.2) \n \n \n 235.2 \n \n \n \n \n Impairment charges \n \n \n (75.6) \n \n \n (28.8) \n \n \n (0.5) \n \n \n (0.1) \n \n \n (105.0) \n \n \n \n \n Risk-adjusted income \n \n \n 106.6 \n \n \n 18.3 \n \n \n 6.6 \n \n \n (1.3) \n \n \n 130.2 \n \n \n \n \n Operating costs \n \n \n (81.0) \n \n \n (32.4) \n \n \n (3.6) \n \n \n (11.1) \n \n \n (128.1) \n \n \n \n \n Profit/(loss) before tax from continuing operations \n \n \n 25.6 \n \n \n (14.1) \n \n \n 3.0 \n \n \n (12.4) \n \n \n 2.1 \n \n \n \n \n   \n \n \n \n \n 1H25 £m \n \n \n Credit Cards \n \n \n Vehicle Finance \n \n \n Second Charge Mortgages \n \n \n Corporate Centre \n \n \n Total \n \n \n \n \n Interest income \n \n \n 179.0 \n \n \n 62.9 \n \n \n 11.0 \n \n \n 22.0 \n \n \n 274.9 \n \n \n \n \n Interest expense \n \n \n (24.7) \n \n \n (14.3) \n \n \n (6.7) \n \n \n (27.0) \n \n \n (72.7) \n \n \n \n \n Net interest income \n \n \n 154.3 \n \n \n 48.6 \n \n \n 4.3 \n \n \n (5.0) \n \n \n 202.2 \n \n \n \n \n Non-interest income \n \n \n 16.0 \n \n \n - \n \n \n 0.2 \n \n \n 1.3 \n \n \n 17.5 \n \n \n \n \n Total income \n \n \n 170.3 \n \n \n 48.6 \n \n \n 4.5 \n \n \n (3.7) \n \n \n 219.7 \n \n \n \n \n Impairment charges \n \n \n (64.0) \n \n \n (12.7) \n \n \n (0.2) \n \n \n 0.8 \n \n \n (76.1) \n \n \n \n \n Risk-adjusted income \n \n \n 106.3 \n \n \n 35.9 \n \n \n 4.3 \n \n \n (2.9) \n \n \n 143.6 \n \n \n \n \n Operating costs \n \n \n (93.7) \n \n \n (34.5) \n \n \n (1.9) \n \n \n (7.3) \n \n \n (137.4) \n \n \n \n \n Profit/(loss) before tax from continuing operations \n \n \n 12.6 \n \n \n 1.4 \n \n \n 2.4 \n \n \n (10.2) \n \n \n 6.2 \n \n \n \n \n   \n Credit Cards - Continued profitable growth; margins impacted by the macroeconomic environment \n   \n \n \n \n \n Six months ended (£m) \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n HoH \n Change % \n \n \n YoY \n Change % \n \n \n \n \n Total customer numbers ('000) \n \n \n          1,354 \n \n \n 1,339 \n \n \n 1,290 \n \n \n     1          \n \n \n     5          \n \n \n \n \n Gross customer interest-earning balances \n \n \n          1,547 \n \n \n 1,518 \n \n \n 1,355 \n \n \n     2          \n \n \n       14     \n \n \n \n \n Average gross customer interest-earning balances 1 \n \n \n          1,534 \n \n \n 1,437 \n \n \n 1,296 \n \n \n     7          \n \n \n       18     \n \n \n \n \n Gross receivables \n \n \n          1,587 \n \n \n 1,554 \n \n \n 1,390 \n \n \n     2          \n \n \n       14     \n \n \n \n \n Net receivables \n \n \n          1,414 \n \n \n 1,384 \n \n \n 1,232 \n \n \n     2          \n \n \n       15     \n \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 \n \n \n          194.1 \n \n \n 191.8 \n \n \n 179.0 \n \n \n     1          \n \n \n     8          \n \n \n \n \n Interest expense \n \n \n         (27.1) \n \n \n (26.9) \n \n \n (24.7) \n \n \n     1          \n \n \n       10     \n \n \n \n \n Net interest income \n \n \n          167.0 \n \n \n 164.9 \n \n \n 154.3 \n \n \n     1          \n \n \n     8          \n \n \n \n \n Non-interest income \n \n \n            17.4 \n \n \n 17.3 \n \n \n 16.0 \n \n \n     1          \n \n \n     9          \n \n \n \n \n Total income \n \n \n          184.4 \n \n \n 182.2 \n \n \n 170.3 \n \n \n     1          \n \n \n     8          \n \n \n \n \n Impairment charges \n \n \n         (83.7) \n \n \n (75.6) \n \n \n (64.0) \n \n \n       11     \n \n \n       31     \n \n \n \n \n Risk adjusted income \n \n \n          100.7 \n \n \n 106.6 \n \n \n 106.3 \n \n \n                 (6) \n \n \n                 (5) \n \n \n \n \n Operating costs \n \n \n         (87.9) \n \n \n (81.0) \n \n \n (93.7) \n \n \n     9          \n \n \n                 (6) \n \n \n \n \n Profit before tax contribution \n \n \n            12.8 \n \n \n 25.6 \n \n \n 12.6 \n \n \n                 (50) \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 Asset yield (%) 2 \n \n \n          25.5         \n \n \n          26.5         \n \n \n          27.8         \n \n \n                 (1.0) \n \n \n                 (2.3) \n \n \n \n \n Net interest margin (%) 3 \n \n \n          22.0         \n \n \n          22.8         \n \n \n          24.0         \n \n \n                 (0.8) \n \n \n                 (2.0) \n \n \n \n \n Total income margin (%) 4 \n \n \n          24.2         \n \n \n          25.2         \n \n \n          26.5         \n \n \n                 (1.0) \n \n \n                 (2.3) \n \n \n \n \n Cost of risk (%) 5 \n \n \n                 (11.0) \n \n \n                 (10.4) \n \n \n                 (10.0) \n \n \n                 (0.6) \n \n \n                 (1.0) \n \n \n \n \n Risk adjusted margin (%) 6 \n \n \n          13.2         \n \n \n          14.7         \n \n \n          16.5         \n \n \n                 (1.5) \n \n \n                 (3.3) \n \n \n \n \n Cost: income ratio (%) 7 \n \n \n          47.7         \n \n \n          44.4         \n \n \n          55.0         \n \n \n        3.3   \n \n \n                 (7.3) \n \n \n \n \n   \n 1 Average of gross customer interest-earning balances for the 6 months ended 30 June and 31 December using a 7 point month end average. \n 2 Interest income from customer receivables for the 6 months ended 30 June and 31 December as a percentage of average gross customer interest-earning balances. \n 3 Net interest income for the 6 months ended 30 June and 31 December as a percentage of average gross customer interest-earning balances. \n 4 Total income for the 6 months ended 30 June and 31 December as a percentage of average gross customer interest-earning balances. \n 5 Impairment charges for the 6 months ended 30 June and 31 December as a percentage of average gross customer interest-earning balances. \n 6 Total income less impairment charges for the 6 months ended 30 June and 31 December as a percentage of average gross customer interest-earning balances. \n 7 Operating costs as a percentage of total income for the 6 months ended 30 June and 31 December. \n   \n All commentary relates to year-on-year performance unless otherwise stated. \n   \n Total customer numbers increased 5 % year-on-year and 1 % half-on-half to 1,354 k, driven by new business growth, including via 0% BTs and promotional products. Balances of existing customers reduced, as customers acted cautiously, by moderating spending given increased macroeconomic uncertainty. \n   \n Gross customer interest-earning balances increased 14 % year-on-year and 2 % half-on-half to £ 1,547 m, reflecting the new customer growth. \n   \n Net receivables increased 15 % year-on-year and 2 % half-on-half to £ 1,414 m, driven by the growth in gross customer interest-earning balances. ECL increased to £(174)m (December 2025: £(170)m) including recognising an increase in the IFRS9 provision for macroeconomic uncertainty. This reflects the improving credit quality of the portfolio. \n   \n Interest income increased 8 % to £ 194.1 m, driven by an 18 % increase in average gross customer interest-earning balances to £ 1,534 m. This growth was offset by a (2.3) percentage point reduction in asset yield to 25.5 %, reflecting new customer growth, including via 0% BTs and promotional products, and a reduction in balances of existing customers, as they moderated spending in the second quarter in the face of increased macroeconomic uncertainty. \n   \n Interest expense increased 10 % to £ (27.1) m, reflecting the increased funding requirement for higher balances. \n   \n Net interest income and total income all increased 8 % to £ 167 m and £ 184.4 m respectively. Net interest margin reduced (2.0) percentage points to 22.0 % and total income margin reduced (2.3) percentage points to 24.2 %. \n   \n Impairment charges increased 31% to £(83.7)m and cost of risk increased (1.0) percentage points to (11.0)%, including an increase in the IFRS9 provision for macroeconomic uncertainty driven by the expectation peak UK unemployment increases to 5.7%. Excluding this impairment charges were broadly inline with 2H25, with the year-on-year increase driven by the growth in balances . The cost of risk remained at the lower end of the guided range of (10.0) to (13.0)%. \n   \n Risk adjusted income decreased (5) % to £ 100.7 m, driving a (3.3) percentage point reduction in risk adjusted margin to 13.2 %. \n   \n Operating costs decreased (6) % to £ (87.9) m, driven by lower complaint costs, with transformation cost savings facilitating growth and offsetting inflation related cost increases. The cost: income ratio improved (7.3) percentage points to 47.7 %. \n   \n Profit before tax contribution increased 2 % to £ 12.8 m. \n   \n Vehicle Finance - Continued moderation of new business growth, while product profitability improved \n   \n \n \n \n \n Six months ended (£m) \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n HoH \n Change % \n \n \n YoY \n Change % \n \n \n \n \n Total customer numbers ('000) \n \n \n              101 \n \n \n 103 \n \n \n 106 \n \n \n                 (2) \n \n \n                 (5) \n \n \n \n \n Gross customer interest-earning balances \n \n \n              707 \n \n \n 706 \n \n \n 733 \n \n \n     -          \n \n \n                 (4) \n \n \n \n \n Average gross customer interest-earning balances 1 \n \n \n              709 \n \n \n 724 \n \n \n 750 \n \n \n                 (2) \n \n \n                 (5) \n \n \n \n \n Gross receivables \n \n \n              765 \n \n \n 762 \n \n \n 795 \n \n \n     -          \n \n \n                 (4) \n \n \n \n \n Net receivables \n \n \n              697 \n \n \n 689 \n \n \n 709 \n \n \n     1          \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 Interest income \n \n \n             61.3 \n \n \n 61.0 \n \n \n 62.9 \n \n \n     -          \n \n \n                 (3) \n \n \n \n \n Interest expense \n \n \n         (13.1) \n \n \n (13.9) \n \n \n (14.3) \n \n \n                 (6) \n \n \n                 (8) \n \n \n \n \n Net interest income \n \n \n             48.2 \n \n \n 47.1 \n \n \n 48.6 \n \n \n     2          \n \n \n                 (1) \n \n \n \n \n Total income \n \n \n             48.2 \n \n \n 47.1 \n \n \n 48.6 \n \n \n     2          \n \n \n                 (1) \n \n \n \n \n Impairment charges \n \n \n         (18.1) \n \n \n (28.8) \n \n \n (12.7) \n \n \n                 (37) \n \n \n       43     \n \n \n \n \n Risk adjusted income \n \n \n             30.1 \n \n \n 18.3 \n \n \n 35.9 \n \n \n       64     \n \n \n                 (16) \n \n \n \n \n Operating costs \n \n \n         (28.4) \n \n \n (32.4) \n \n \n (34.5) \n \n \n                 (12) \n \n \n                 (18) \n \n \n \n \n Profit/(loss) before tax contribution \n \n \n               1.7 \n \n \n (14.1) \n \n \n 1.4 \n \n \n                 (112) \n \n \n       21     \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Asset yield (%) 2 \n \n \n             17.4 \n \n \n          16.7         \n \n \n          16.9         \n \n \n        0.7   \n \n \n        0.5   \n \n \n \n \n Net interest margin (%) 3 \n \n \n             13.7 \n \n \n          12.9         \n \n \n          13.1         \n \n \n        0.8   \n \n \n        0.6   \n \n \n \n \n Total income margin (%) 4 \n \n \n             13.7 \n \n \n          12.9         \n \n \n          13.1         \n \n \n        0.8   \n \n \n        0.6   \n \n \n \n \n Cost of risk (%) 5 \n \n \n            (5.1) \n \n \n                 (7.9) \n \n \n                 (3.4) \n \n \n        2.8   \n \n \n                 (1.7) \n \n \n \n \n Risk adjusted margin (%) 6 \n \n \n               8.6 \n \n \n        5.0   \n \n \n        9.7   \n \n \n        3.6   \n \n \n                 (1.1) \n \n \n \n \n Cost: income ratio (%) 7 \n \n \n             59.0 \n \n \n          68.6         \n \n \n          71.0         \n \n \n                 (9.6) \n \n \n                 (12.0) \n \n \n \n \n   \n Total customer numbers decreased (5) % year-on-year and (2) % half-on-half to 101 k, reflecting moderated new business growth in the near term in advance of the new onboarding and servicing platform build being delivered at the end of 2026 as part of the Gateway technology transformation. \n   \n Gross customer interest-earning balances decreased (4) % year-on-year and was stable half-on-half at £ 707 m, driven by the moderating of new business growth. \n   \n Net receivables decreased (2) % year-on-year, reflecting the reduction in gross customer interest-earning balances. ECL reduced to £(68)m (December 2025: £(73)m), reflecting the improving credit quality of the portfolio. \n   \n Interest income decreased (3) % to £ 61 m, driven by a (5) % reduction in average gross customer interest-earning balances to £ 709 m. This was partially offset by a 0.5 percentage point improvement in asset yield to 17.4 %, driven by repricing initiatives. A new lending decision engine was introduced in 2025 enabling a more granular level of portfolio segmentation and delivered a stronger platform to optimise higher margin customer segments in 1H26. \n   \n Interest expense decreased (8) % to £ (13) m, driven by the reduced funding requirement for lower balances and lower cost of funds. \n   \n Total income decreased (1) % to £ 48.2 m, which represented total income and net interest income. Net interest margin and total income margin increased 0.6 percentage points to 13.7 %. \n   \n Impairment charges increased 43% year-on-year, but reduced (37)% half-on-half to £(18.1)m, reflecting the non-repeat of the prior year IFRS9 modelled impairment benefit. Cost of risk was (5.1)% (1H25: (3.4)%), at the lower end of the guided range of (5.0) to (7.0)%. \n   \n Risk adjusted income decreased (16) % to £ 30.1 m and risk adjusted margin reduced (1.1) to 8.6 %. \n   \n Operating costs decreased (18) % to £ (28.4) m, driven by transformation cost savings, more than offsetting growth and inflation driven cost increases. The cost: income ratio improved (12.0) percentage points to 59.0 %. \n   \n Profit before tax contribution improved to £ 1.7 m (1H25: £ 1.4 m). \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n Second Charge Mortgages - Continued strong growth in a growing market \n \n \n \n \n Six months ended (£m) \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n HoH \n Change % \n \n \n YoY \n Change % \n \n \n \n \n Total customer numbers ('000) \n \n \n           12.9 \n \n \n                  9.9 \n \n \n                  6.3 \n \n \n       30     \n \n \n         105 \n \n \n \n \n Gross customer interest-earning balances \n \n \n            800 \n \n \n                 599 \n \n \n                 371 \n \n \n       34     \n \n \n         116 \n \n \n \n \n Average gross customer interest-earning balances 1 \n \n \n            690 \n \n \n                 486 \n \n \n                 293 \n \n \n       42     \n \n \n         135 \n \n \n \n \n Gross receivables \n \n \n            824 \n \n \n                 619 \n \n \n                 385 \n \n \n       33     \n \n \n         114 \n \n \n \n \n Net receivables \n \n \n            823 \n \n \n                 618 \n \n \n                 384 \n \n \n       33     \n \n \n         114 \n \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 \n \n \n           23.1 \n \n \n 17.4 \n \n \n 11.0 \n \n \n       33     \n \n \n         110 \n \n \n \n \n Interest expense \n \n \n        (14.6) \n \n \n (11.1) \n \n \n (6.7) \n \n \n       32     \n \n \n         118 \n \n \n \n \n Net interest income \n \n \n             8.5 \n \n \n 6.3 \n \n \n 4.3 \n \n \n       35     \n \n \n       98     \n \n \n \n \n Non-interest income \n \n \n             1.2 \n \n \n 0.8 \n \n \n 0.2 \n \n \n       50     \n \n \n         500 \n \n \n \n \n Total income \n \n \n             9.7 \n \n \n 7.1 \n \n \n 4.5 \n \n \n       37     \n \n \n         116 \n \n \n \n \n Impairment charges \n \n \n          (0.6) \n \n \n (0.5) \n \n \n (0.2) \n \n \n       20     \n \n \n         200 \n \n \n \n \n Risk adjusted income \n \n \n             9.1 \n \n \n 6.6 \n \n \n 4.3 \n \n \n       38     \n \n \n         112 \n \n \n \n \n Operating costs \n \n \n          (2.0) \n \n \n (3.6) \n \n \n (1.9) \n \n \n                 (44) \n \n \n     5          \n \n \n \n \n Profit before tax contribution \n \n \n             7.1 \n \n \n 3.0 \n \n \n 2.4 \n \n \n         137 \n \n \n         196 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Asset yield (%) 2 \n \n \n             6.8 \n \n \n        7.1   \n \n \n        7.6   \n \n \n                 (0.3) \n \n \n                 (0.8) \n \n \n \n \n Net interest margin (%) 3 \n \n \n             2.5 \n \n \n        2.6   \n \n \n        3.0   \n \n \n                 (0.1) \n \n \n                 (0.5) \n \n \n \n \n Total income margin (%) 4 \n \n \n             2.8 \n \n \n        2.9   \n \n \n        3.1   \n \n \n                 (0.1) \n \n \n                 (0.3) \n \n \n \n \n Cost of risk (%) 5 \n \n \n          (0.2) \n \n \n                 (0.2) \n \n \n                 (0.1) \n \n \n     -          \n \n \n                 (0.1) \n \n \n \n \n Risk adjusted margin (%) 6 \n \n \n             2.7 \n \n \n        2.7   \n \n \n        3.0   \n \n \n     -          \n \n \n                 (0.3) \n \n \n \n \n Cost: income ratio (%) 7 \n \n \n           20.8 \n \n \n          49.6         \n \n \n          42.2         \n \n \n                 (28.8) \n \n \n                 (21.4) \n \n \n \n \n   \n Total customer numbers increased to 12.9 k (1H25: 6.3 k) following the successful growth of the forward flow agreements with Interbridge Mortgages and Selina Finance. \n   \n Gross customer interest-earning balances increased to £ 800 m (1H25: £ 371 m) and net receivables increased to £ 823 m (June 2025: £ 384 m), which includes deferred acquisition costs. \n   \n Interest income increased to £ 23.1 (1H25: £ 11.0 m), with an asset yield of 6.8 % (1H25: 7.6%). The reduced asset yield reflected pricing pressure from increased competition. \n   \n Interest expense increased to £ (14.6) m (1H25: £ (6.7) m), reflecting the increased funding requirement for higher balances. \n   \n Net interest income increased to £8.5m (1H25: £4.3m), non-interest income increased to £1.2m (1H25: £0.2m) and total income increased to £ 9.7 m (1H25: £ 4.5 m). Net interest margin reduced (0.5) percentage points to 2.5 % and total income margin reduced (0.3) percentage points to 2.8 %. \n   \n Risk adjusted income increased to £ 9.1 m (1H25: £ 4.3 m), including impairment charges of £ (0.6) m (1H25: £ (0.2) m). Cost of risk was (0.2) % (1H25: (0.1)% and risk adjusted margin reduced (0.3) percentage points to 2.7 %. \n   \n Operating costs were £ (2.0) m (1H25: £ (1.9) m), reflecting the limited fixed costs associated with the business given the origination partnership arrangements in place. The cost: income ratio improved 21.4 percentage points to 20.8%. \n   \n Profit before tax contribution increased to £ 7.1 m (1H25: £ 2.4 m). \n   \n Corporate Centre \n   \n \n \n \n \n Six months ended (£m) \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n HoH \n Change % \n \n \n YoY \n Change % \n \n \n \n \n Interest income \n \n \n 19.0 \n \n \n 22.1 \n \n \n 22.0 \n \n \n                 (14) \n \n \n                 (14) \n \n \n \n \n Interest expense \n \n \n (24.6) \n \n \n (24.2) \n \n \n (27.0) \n \n \n     2          \n \n \n                 (9) \n \n \n \n \n Net interest income \n \n \n (5.6) \n \n \n (2.1) \n \n \n (5.0) \n \n \n         167 \n \n \n       12     \n \n \n \n \n Non-interest income \n \n \n 0.8 \n \n \n 0.9 \n \n \n 1.3 \n \n \n                 (11) \n \n \n                 (38) \n \n \n \n \n Total income \n \n \n (4.8) \n \n \n (1.2) \n \n \n (3.7) \n \n \n         300 \n \n \n       30     \n \n \n \n \n Impairment charges \n \n \n - \n \n \n (0.1) \n \n \n 0.8 \n \n \n                 (100) \n \n \n                 (100) \n \n \n \n \n Risk adjusted income \n \n \n (4.8) \n \n \n (1.3) \n \n \n (2.9) \n \n \n         269 \n \n \n       66     \n \n \n \n \n Operating costs \n \n \n (7.9) \n \n \n (11.1) \n \n \n (7.3) \n \n \n                 (29) \n \n \n     8          \n \n \n \n \n Loss before tax contribution \n \n \n (12.7) \n \n \n (12.4) \n \n \n (10.2) \n \n \n     2          \n \n \n       25     \n \n \n \n \n   \n Corporate Centre includes retail savings business costs, unallocated Treasury result after product allocations, Snoop income and costs and other immaterial or central items. \n   \n Interest income of £ 19.0 m (1H25: £ 22.0 m) represented returns from the HQLA portfolio, including investment securities and interest on cash reserves in the BoE reserve account. \n   \n Interest expense of £ (24.6) m (1H25: £ (27.0) m) represented residual funding costs not allocated to the respective businesses, including unallocated Tier 2 capital. \n   \n Total income was a net expense of £ (4.8) m (1H25: £ (3.7) m), with net interest income being a net expense of £ (5.6) m (1H25: £(5.0)m) and non-interest income decreasing to £ 0.8 m (1H25: £ 1.3 m), reflecting fees and commissions income from Snoop. \n   \n Operating costs were £ (7.9) m (1H25: £ (7.3) m). \n   \n Loss before tax contribution was £ (12.7) m (1H25: £ (10.2) m). \n   \n Notable items \n   \n \n \n \n \n Six months ended (£m) \n \n \n Account line \n \n \n Segment \n \n \n Jun-26 \n \n \n Dec-25 \n \n \n Jun-25 \n \n \n \n \n Provision for motor finance compensation \n \n \n Operating costs \n \n \n Corporate Centre \n \n \n               - \n \n \n         (3.0) \n \n \n               - \n \n \n \n \n Total notable items \n \n \n \n \n \n \n \n \n               - \n \n \n         (3.0) \n \n \n               - \n \n \n \n \n   \n   \n Principal Risks and Uncertainties \n   \n The Group's principal risks are those considered most significant to the delivery of its strategic objectives and long term sustainable growth. Principal risk categories and associated risk appetite statements, metrics and thresholds are reviewed and approved by the Board on an annual basis, effectively defining the Group's overall risk appetite. During the six months to 30 June 2026, the Board saw no significant change in the principal risks and uncertainties as disclosed on pages 54 to 61 of the 2025 Annual Report and Accounts. \n   \n Customer Risk \n   \n This is defined as the risk that failing to understand or address customer needs could lead to dissatisfaction, poor customer outcomes, reduced loyalty and reputational damage, impacting revenue and long term business sustainability. The Group continues to embed Consumer Duty requirements across the business and maintains a strong focus on delivering good customer outcomes consistently across the customer lifecycle. The 2026 Consumer Duty Board Report highlights continued progress in product governance, customer support strategies and customer communication design. \n   \n Regulatory Risk \n   \n This is defined as the risk that non-compliance with all regulatory and legal requirements and expectations could lead to financial penalties, legal action, operational disruptions and long term damage to reputation. Open and constructive regulatory relationships are in place with the FCA and PRA, who remain informed of strategic initiatives, key risk management activities and regulatory developments. The Group continues to monitor regulatory developments closely, including the FCA's motor finance commission scheme, and assesses the potential impact of emerging regulatory requirements on its operations and customers. \n   \n Financial Crime Risk \n   \n This is defined as the risk that failure to detect and prevent financial crime and fraud could result in customer detriment, regulatory fines, reputational damage and financial loss. The Group has dedicated fraud and financial crime strategic and operational teams, which monitor, investigate and report suspicious activity to meet regulatory obligations, remain vigilant of evolving external emerging threats and protect the Group and our customers from financial crime and fraud. Progress continues on the implementation of the Group's new financial crime risk management platform as part of the Gateway transformation programme. \n   \n Capital Risk \n   \n This is defined as the risk that inadequate capital resources or poor capital planning could result in an inability to meet financial obligations, regulatory breaches and financial instability, potentially threatening the long term viability of the Group. The Group and Bank maintain sufficient capital resources, both in terms of amount and quality, to support the business strategy and meet the stressed scenarios identified in the Internal Capital Adequacy Assessment Process. The Group and Bank operate within a defined capital risk appetite, with performance and capital position reported to and closely monitored by the Risk Committee and Board. The Group and Bank have remained above regulatory buffer requirements throughout 2026. \n   \n Funding and Liquidity Risk \n   \n This is defined as the risk that the Group has insufficient financial resources to meet its obligations (cash or collateral requirements) as they fall due, resulting in the failure to meet regulatory liquidity requirements, or is only able to secure such resources at excessive cost. The Group and the Bank maintain sufficient liquid assets, both in terms of amount and quality, to meet daily cash flow needs and stressed scenarios driven by the Group's own risk assessment and regulatory requirements. Funding and liquidity metrics are monitored through daily liquidity reporting and reported to the Risk Committee and Board. The Group's current funding strategy seeks to maintain a secure and diverse funding structure by maintaining access to the liquid retail deposit markets and committed facilities to meet the Group's liquidity and funding requirements. Throughout 2026, the Group and Bank have maintained funding and liquidity ratios in excess of regulatory requirements. \n   \n Market Risk \n   \n This is defined as the risk that fluctuations in market prices, such as interest rates, could negatively impact the Group's financial performance, resulting in losses or disruptions. The Group and Bank are primarily exposed to Interest Rate Risk in the Banking Book (IRRBB) and do not take significant unmatched positions or operate trading books. The Group and Bank have remained within risk appetite throughout 2026. \n   \n Credit Risk \n   \n This is defined as the risk that customers may default on their obligations, leading to financial losses, impaired asset quality and reputational damage. The credit risk programme continues to progress in line with expectations to optimise lending and support responsible growth across the portfolio. During the period, the programme was expanded to include additional collections and recoveries initiatives, further enhancing the Group's ability to manage changing economic and customer conditions. Performance and programme delivery continue to be overseen by the Risk Committee. \n   \n People Risk \n   \n This is defined as the risk that poor recruitment practices, insufficient employee training or low engagement levels caused by poor culture and compliance could lead to operational inefficiencies and reputational damage. The Group remains focused on attracting, developing and retaining talented colleagues while maintaining a strong risk aware culture. Results from the June 2026 Pulse Survey were consistent with the positive engagement outcome reported in the October 2025 Colleague Survey. The Group's recognition as one of the UK's Best Workplaces for Wellbeing™ by Great Place to Work® reflects ongoing investment in colleague wellbeing, engagement and organisational culture. \n   \n Technology and Information Security Risk \n   \n This is defined as the risk that inadequate technological, security and data infrastructure and failure to upgrade systems could lead to operational inefficiencies, data breaches, service disruptions, a lack of scalability and reputational damage. The Group continues to invest in technology resilience, cyber security and data capabilities. Particular focus has been placed on the responsible adoption of emerging technologies, including artificial intelligence, ensuring appropriate governance and controls are maintained. The Gateway technology and data transformation programme continue to progress, supporting strategic delivery, improving operational efficiency and enhancing the Group's data architecture. \n   \n Operational Risk \n   \n This is defined as the risk that failures in processes, systems or human error could result in business disruptions, financial loss, regulatory action, poor customer outcomes and reputational damage. Operational resilience remains a key area of focus as the Group executes its strategic and transformation plans. The Group maintains a robust third party risk management framework and continues to oversee key outsourcing arrangements and third-party relationships through established governance, performance monitoring and resilience testing processes. Particular attention is given to suppliers supporting Important Business Services to ensure continuity of service and compliance with regulatory expectations. \n   \n Model Risk \n   \n This is defined as the risk that incorrect assumptions, poor design or outdated data within models used for decision making could lead to unintended outcomes, financial loss or operational inefficiencies. The Group has an established model risk management framework, which is in line with the PRA's model risk management principles. Models are classified according to their quantitative and qualitative impact to inform governance, with Tier 1 models prioritised for independent validation given their significant business impact. Governance arrangements remain supported by the Model Risk Committee and supporting sub-working groups, with clear accountability across the three lines of defence. \n   \n Business Performance Risk \n   \n This is defined as the risk that poor performance of key business processes, such as financial management, operations or customer service, could lead to financial losses, reduced market share, threat to the Group's long term viability and reputational damage. The Group continues to make progress against its strategic priorities while maintaining a disciplined approach to growth and risk management. Management remains focused on balancing business performance with prudent risk taking, maintaining a strong control environment and monitoring emerging external risks that could impact the delivery of the Group's objectives. \n Consolidated financial statements \n   \n Consolidated income statement for the six months ended 30 June \n   \n \n \n \n \n \n \n \n Note \n \n \n 2026 \n unaudited \n \n \n 2025 \n unaudited \n \n \n \n \n \n \n \n \n \n \n £m  \n \n \n £m  \n \n \n \n \n Interest income \n \n \n 3 \n \n \n 297.5 \n \n \n 274.9 \n \n \n \n \n Interest expense \n \n \n 4 \n \n \n (79.4) \n \n \n (72.7) \n \n \n \n \n Net interest income \n \n \n \n \n \n 218.1 \n \n \n 202.2 \n \n \n \n \n Fee and commission income \n \n \n \n \n \n 21.2 \n \n \n 18.4 \n \n \n \n \n Fee and commission expense \n \n \n \n \n \n (1.9) \n \n \n (1.5) \n \n \n \n \n Net fee and commission income \n \n \n \n \n \n 19.3 \n \n \n 16.9 \n \n \n \n \n Other income and net fair value gains \n \n \n \n \n \n 0.1 \n \n \n 0.6 \n \n \n \n \n Total income \n \n \n \n \n \n 237.5 \n \n \n 219.7 \n \n \n \n \n Impairment charges \n \n \n        10 \n \n \n (102.4) \n \n \n (76.1) \n \n \n \n \n Risk-adjusted income \n \n \n \n \n \n 135.1 \n \n \n 143.6 \n \n \n \n \n Operating costs \n \n \n \n \n \n (126.2) \n \n \n (137.4) \n \n \n \n \n Profit before taxation from continuing operations \n \n \n          5 \n \n \n 8.9 \n \n \n 6.2 \n \n \n \n \n Tax charge \n \n \n          7 \n \n \n (1.2) \n \n \n (1.3) \n \n \n \n \n Profit for the period from continuing operations \n \n \n \n \n \n 7.7 \n \n \n 4.9 \n \n \n \n \n Profit after tax for the period from discontinued operations \n \n \n          6 \n \n \n - \n \n \n 0.7 \n \n \n \n \n Statutory profit for the period attributable to ordinary shareholders \n \n \n \n \n \n 4.4 \n \n \n 5.6 \n \n \n \n ...

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