Bank of Scotland plc 2026 Half-Year Pillar 3 Disclosures 12 August 2026
TABLE OF CONTENTS Introduction and basis of preparationIntroduction and basis of preparation 3
KM1 Key metrics 4
OV1 Overview of risk weighted exposure amounts 5
CR8 RWA flow statements of credit risk exposures under the IRB approach 6
Own fundsCC1 Composition of regulatory own funds 7
CC2 Reconciliation of regulatory own funds to the balance sheet in the financial statements 8
CCyB1 Geographical distribution of credit exposures relevant for the calculation of the countercyclical buffer 9
CCyB2 Amount of institution-specific countercyclical capital buffer 10
LeverageLR2 Leverage ratio common disclosure 11
LR1 Summary reconciliation of accounting assets and leverage ratio exposures 12
LR3 Split-up of on balance sheet exposures (excluding derivatives, SFTs and exempted exposures) 12
Credit riskCR1 Performing and non-performing exposures and related provisions 13
CR1-A Maturity of exposures 15
CR2 Changes in the stock of non-performing loans and advances 15
CQ1 Credit quality of forborne exposures 16
CQ4 Quality of non-performing exposures by geography 17
CQ5 Credit quality of loans and advances to non-financial corporations by industry 18
CR3 CRM techniques overview: Disclosure of the use of credit risk mitigation techniques 19
CR4 Standardised approach - Credit risk exposure and CRM effects 19
CR7-A IRB approach - Disclosure of the extent of the use of CRM techniques 20
CR10 Specialised lending and equity exposures under the simple risk-weighted approach 22
Appendix 1: Excluded templates 24
Forward-looking statements 25
Contacts 26
INTRODUCTION AND BASIS OF PREPARATIONThis document presents the half-year Pillar 3 disclosures of Bank of Scotland plc ('the Bank') as at 30 June 2026 and should be read in conjunction with the Bank of Scotland plc 2026 Half-Year Results.
Basis of PreparationThe disclosures have been prepared in accordance with the requirements of the Disclosure (CRR) section of the PRA Rulebook. Where specific 'Articles' are referenced these refer to the applicable requirement within the PRA Rulebook or the UK Capital Requirements Regulation ('UK CRR').
The disclosures presented within this document are not required to be, and have not been, subjected to an external audit.
Article 432 on non-material, proprietary or confidential information permits institutions to omit one or more disclosures if the information provided by such a disclosure is not regarded as material. Appendix 1 includes a list of excluded templates and the reason for exclusion.
Where relevant, de minimis monetary amounts (<£0.5 million) are rounded down for reporting purposes and disclosed as a dash ('-') in the table.
Capital Instruments And Eligible Liabilities - Main Features Report (CRR Article 437(b))A description of the main features of common equity tier 1 (CET1), additional tier 1 (AT1) and tier 2 (T2) capital instruments issued by Lloyds Banking Group plc (the ultimate parent company) and its large subsidiaries (including Bank of Scotland plc) are included in a separate document on the Lloyds Banking Group plc website located at https://www.lloydsbankinggroup.com/investors/financial-downloads. In addition, the report identifies and provides a description of the main features of debt instruments that are recognised as eligible liabilities in accordance with the Bank of England's MREL framework. Template TLAC 2 is included within the Pillar 3 disclosures for Lloyds Banking Group plc and details the creditor hierarchy and nominal values of instruments issued by Bank of Scotland plc. The Lloyds Banking Group plc 2026 Half-Year Pillar 3 Disclosures can be found on the Lloyds Banking Group plc website.
IRB DisclosuresChanges to the regulations applicable to internal ratings based (IRB) models were implemented by the PRA on 1 January 2022. The Group's models to meet CRD IV requirements are subject to review and approval by the PRA. As directed by PRA Supervisory Statement SS 11/13, the Group has applied temporary post model adjustments to risk-weighted asset and expected loss amounts reflecting the new modelling requirements.
Under the revised IRB regulations, Residential Mortgage exposures are subject to a 90 day default backstop and a hybrid-philosophy Probability of Default (PD) model. The Bank's incumbent (pre CRD IV) UK Mortgage models at the reporting date use a 180 day default backstop and a less cyclical PD model. As a result, the reported risk-weighted assets and expected loss amounts include the impact of significant temporary post model adjustments which reflect 90 day default backstop and other new modelling requirements. Less material definitional differences also exist for other IRB asset classes where similar temporary post model adjustments have been applied.
Standardised approach exposures already use a 90 day default backstop and this is reflected in the CR4 tables. Tables CQ1, CQ4 and CQ5 are based on accounting definitions, and therefore also use the current 90 days past due definition.
KEY METRICS AND OVERVIEW OF RISK WEIGHTED EXPOSURE AMOUNTS KM1: Key metrics1KM1 | LR2 | 30 Jun 2026 | 31 Dec 2025 | 30 Jun 2025 | |
Ref | Ref | Available own funds (amounts) | |||
1 | Common Equity Tier 1 (CET1) capital (£m) | 11,750 | 11,083 | 10,855 | |
2 | Tier 1 capital (£m) | 14,600 | 13,683 | 13,455 | |
3 | Total capital (£m) | 15,100 | 15,183 | 15,121 | |
Risk-weighted exposure amounts | |||||
4 | Total risk-weighted exposure amount (£m) | 83,201 | 82,357 | 81,830 | |
Capital ratios (as a percentage of risk-weighted exposure amount) | |||||
5 | Common Equity Tier 1 ratio (%) | 14.1% | 13.5% | 13.3% | |
6 | Tier 1 ratio (%) | 17.5% | 16.6% | 16.4% | |
7 | Total capital ratio (%) | 18.1% | 18.4% | 18.5% | |
Additional own funds requirements based on SREP (as a percentage of risk-weighted exposure amount) | |||||
UK 7a | Additional CET1 SREP requirements (%) | 1.1% | 1.1% | 1.1% | |
UK 7b | Additional AT1 SREP requirements (%) | 0.3% | 0.3% | 0.4% | |
UK 7c | Additional T2 SREP requirements (%) | 0.5% | 0.5% | 0.5% | |
UK 7d | Total SREP own funds requirements (%) | 9.9% | 9.9% | 10.0% | |
Combined buffer requirement (as a percentage of risk-weighted exposure amount) | |||||
8 | Capital conservation buffer (%) | 2.5% | 2.5% | 2.5% | |
9 | Institution specific countercyclical capital buffer (%) | 2.0% | 2.0% | 2.0% | |
11 | Combined buffer requirement (%) | 4.5% | 4.5% | 4.5% | |
UK 11a | Overall capital requirements (%) | 14.4% | 14.4% | 14.5% | |
12 | CET1 available after meeting minimum SREP own funds requirements (%)2 | 8.5% | 7.9% | 7.6% | |
Leverage ratio | |||||
13 | UK-24b | Total exposure measure excluding claims on central banks (£m) | 323,091 | 320,952 | 315,906 |
14 | 25 | Leverage ratio excluding claims on central banks (%) | 4.5% | 4.3% | 4.3% |
Additional leverage ratio disclosure requirements | |||||
UK 14b | UK-25c | Leverage ratio including claims on central banks (%) | 4.5% | 4.2% | 4.2% |
UK 14c | UK-34 | Average leverage ratio excluding claims on central banks (%)3 | 4.5% | 4.3% | 4.4% |
UK 14d | UK-33 | Average leverage ratio including claims on central banks (%)3 | 4.5% | 4.3% | 4.3% |
UK-31 | Average total exposure measure including claims on central banks3 | 324,514 | 322,402 | 317,263 | |
UK-32 | Average total exposure measure excluding claims on central banks3 | 321,815 | 319,700 | 314,549 | |
27 | Leverage ratio buffer (%)4 | 0.7% | 0.7% | 0.7% | |
UK 14e | UK-27b | Of which: countercyclical leverage ratio buffer (%) | 0.7% | 0.7% | 0.7% |
1 Includes extracts of LR2 (Leverage ratio common disclosure) that are required to be disclosed quarterly.
2 Represents, as a percentage, the level of CET1 capital left available to meet buffer requirements after subtracting the minimum amount of CET1 capital required to meet total Pillar 1 plus Pillar 2A capital requirements, also referred to as total SREP own funds requirements. The minimum CET1 requirement is equivalent to 4.5% (Pillar 1) plus the additional CET1 SREP requirement (56.25% of Pillar 2A).
3 The average leverage ratio is based on the average of the month end tier 1 capital position and average exposure measure over the quarter.
4 The additional leverage ratio buffer (ALRB) does not apply for the Bank.
Common Equity Tier 1The Bank's common equity tier 1 (CET1) capital ratio increased from 13.5% at 31 December 2025 to 14.1% at 30 June 2026. Profit for the first half of the year was partly offset by an increase in risk-weighted assets.
Total CapitalThe total capital ratio reduced to 18.1% (31 December 2025: 18.4%) reflecting the increase in risk-weighted assets and a reduction in total capital resources, with the increase in CET1 capital and AT1 instrument issuance more than offset by AT1 and Tier 2 instrument calls.
Risk-Weighted AssetsRisk-weighted assets increased by £844 million from £82,357 million at 31 December 2025 to £83,201 million at 30 June 2026, largely reflecting the impact of lending growth offset by optimisation activity, including a securitisation of primarily legacy mortgages.
LeverageThe Bank's UK leverage ratio of 4.5% at 30 June 2026 has increased from 4.3% at 31 December 2025, reflecting the increase in total tier 1 capital, partially offset by the increase in the leverage exposure measure following lending growth.
KEY METRICS AND OVERVIEW OF RISK WEIGHTED EXPOSURE AMOUNTS (Continued) OV1: Overview of risk weighted exposure amounts Total RWA Total own funds requirements30 Jun 2026 £m | 31 Dec 2025 £m | 30 Jun 2026 £m | ||
1 | Credit risk (excluding CCR) | 76,475 | 75,342 | 6,118 |
2 | Of which the standardised approach | 5,577 | 6,196 | 446 |
3 | Of which the foundation IRB (FIRB) approach | 1,170 | 1,400 | 94 |
4 | Of which slotting approach | 521 | 542 | 42 |
UK 4a | Of which equities under the simple risk weighted approach | 2,896 | 2,782 | 232 |
5 | Of which the advanced IRB (AIRB) approach | 65,376 | 63,418 | 5,230 |
Of which: non-credit obligation assets1 | 935 | 1,004 | 74 | |
6 | Counterparty credit risk (CCR) | 129 | 188 | 10 |
7 | Of which the standardised approach | 88 | 125 | 7 |
UK 8b | Of which credit valuation adjustment (CVA) | 41 | 63 | 3 |
16 | Securitisation exposures in the non-trading book (after the cap) | 530 | 722 | 43 |
17 | Of which SEC-IRBA approach | - | - | - |
18 | Of which SEC-ERBA approach (including IAA) | 529 | 705 | 43 |
19 | Of which SEC-SA approach | 1 | 17 | - |
20 | Position, foreign exchange and commodities risks (Market risk) | 16 | 54 | 1 |
21 | Of which the standardised approach | 16 | 54 | 1 |
23 | Operational risk | 6,051 | 6,051 | 484 |
UK 23b | Of which standardised approach | 6,051 | 6,051 | 484 |
24 | Memo: Amounts below the thresholds for deduction (subject to 250% risk weight) | 2,896 | 2,806 | 232 |
29 | Total | 83,201 | 82,357 | 6,656 |
Pillar 2A capital requirement2 | 1,582 | |||
Total capital requirement | 8,238 | |||
1 Non-credit obligation assets (IRB approach) predominantly relate to other balance sheet assets that have no associated credit risk.
2 As at 30 June 2026, the Bank's Pillar 2A capital requirement was c.1.9% of risk-weighted assets, of which c.1.1% is to be met with CET1 capital.
Risk-weighted assets increased by £844 million to £83,201 million at 31 December 2026 (31 December 2025: £82,357 million). This largely reflected:
Credit Risk: RWAs increased by £1,133 million to £76,475 million, principally due to Retail lending, partially offset by optimisation activity, including the securitisation of primarily legacy mortgages. KEY METRICS AND OVERVIEW OF RISK WEIGHTED EXPOSURE AMOUNTS (Continued) CR8: RWA flow statements of credit risk exposures under the IRB approachThe table below summarises the movements of risk-weighted assets for credit risk exposures under the Internal Ratings Based (IRB) Approach. The table excludes counterparty credit risk exposures, securitisation exposures, other non-credit obligation assets and equity exposures.
Total RWA quarter to 30 June 2026 £m | Total RWA YTD 30 June 2026 £m | ||
1 | Risk weighted exposure amount as at the end of previous reporting period | 65,958 | 65,360 |
2 | Asset size (+/-) | 1,638 | 2,168 |
3 | Asset quality (+/-) | (369) | (332) |
4 | Model updates (+/-) | (175) | (175) |
7 | Foreign exchange movements (+/-) | (1) | (1) |
8 | Other (+/-) | 16 | 47 |
9 | Risk weighted exposure amount at the end of the reporting period | 67,067 | 67,067 |
- Jun 2026
Dec
2025 CC2
Common Equity Tier 1 (CET1) capital: instruments and reserves £m £mreference
1 | Capital instruments and the related share premium accounts | 5,847 | 5,847 | |
of which: called up share capital | 5,847 | 5,847 | a | |
2 | Retained earnings | 4,831 | 5,290 | c |
3 | Accumulated other comprehensive income (and other reserves) | 3,244 | 3,226 | c |
UK-5a | Independently reviewed interim profits net of any foreseeable charge or dividend1 | 644 | (480) | |
of which: foreseeable dividend | - | (480) | ||
6 | Common Equity Tier 1 (CET1) capital before regulatory adjustments | 14,566 | 13,883 | |
Common Equity Tier 1 (CET1) capital: regulatory adjustments | ||||
7 | Additional value adjustments | (32) | (39) | |
8 | Intangible assets (net of related tax liability) | (765) | (746) | d |
10 | Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability where the conditions in Article 38 (3) CRR are met) | (1,677) | (1,736) | e |
11 | Fair value reserves related to gains or losses on cash flow hedges of financial instruments that are not valued at fair value | 76 | 90 | |
12 | Negative amounts resulting from the calculation of expected loss amounts | (385) | (295) | |
14 | Gains or losses on liabilities valued at fair value resulting from changes in own credit standing | (1) | (1) | |
15 | Defined-benefit pension fund assets | (32) | (28) | f |
19 | Direct, indirect and synthetic holdings by the institution of the CET1 instruments of financial sector entities where the institution has a significant investment in those entities (amount above 10% threshold and net of eligible short positions) | - | (45) | g |
28 | Total regulatory adjustments to Common Equity Tier 1 (CET1) | (2,816) | (2,800) | |
29 | Common Equity Tier 1 (CET1) capital | 11,750 | 11,083 | |
Additional Tier 1 (AT1) capital: instruments | ||||
30 | Capital instruments and the related share premium accounts | 2,850 | 2,600 | b |
31 | of which: classified as equity under applicable accounting standards | 2,850 | 2,600 | |
44 | Additional Tier 1 (AT1) capital | 2,850 | 2,600 | |
45 | Tier 1 capital (T1 = CET1 + AT1) | 14,600 | 13,683 | |
Tier 2 (T2) capital: instruments | ||||
46 | Capital instruments and the related share premium accounts | 500 | 1,500 | h |
50 | Credit risk adjustments | - | - | |
51 | Tier 2 (T2) capital before regulatory adjustments | 500 | 1,500 | |
Tier 2 (T2) capital: regulatory adjustments | ||||
58 Tier 2 (T2) capital | 500 | 1,500 | ||
59 Total capital (TC = T1 + T2) | 15,100 | 15,183 | ||
60 Total risk exposure amount | 83,201 | 82,357 | ||
Capital ratios and buffer | ||||
61 Common Equity Tier 1 (as a percentage of total risk exposure amount) | 14.1% | 13.5% | ||
62 Tier 1 (as a percentage of total risk exposure amount) | 17.5% | 16.6% | ||
63 Total capital (as a percentage of total risk exposure amount) | 18.1% | 18.4% | ||
Institution CET1 overall capital requirement (CET1 requirement in accordance with Article 92 (1) CRR, plus additional CET1 requirement which the institution is required to hold in accordance with point (a) of Article 104(1) CRD, plus combined buffer requirement in accordance with Article 128(6) CRD) 64 expressed as a percentage of risk exposure amount) | 10.1% | 10.1% | ||
65 of which: capital conservation buffer requirement | 2.5% | 2.5% | ||
66 of which: countercyclical buffer requirement | 2.0% | 2.0% | ||
68 Common Equity Tier 1 available to meet buffers (as a percentage of risk exposure amount) | 8.5% | 7.9% | ||
Amounts below the thresholds for deduction (before risk weighting) | ||||
Direct and indirect holdings by the institution of the CET1 instruments of financial sector entities where the institution has a significant investment in those entities (amount below 17.65% thresholds and net 73 of eligible short positions) | 1,158 | 1,113 | ||
Deferred tax assets arising from temporary differences (amount below 17.65% threshold, net of related 75 tax liability where the conditions in Article 38 (3) CRR are met) | - | 9 | ||
Credit risk adjustments included in T2 in respect of exposures subject to internal ratings-based
approach (prior to the application of the cap) - -
Cap for inclusion of credit risk adjustments in T2 under internal ratings-based approach 409 399
1 The reported amount for 30 June 2026 through row UK-5a reflects the independently reviewed interim profits of the Bank attributable to ordinary shareholders. The reported amount for 31 December 2025 reflects the year end foreseeable dividend accrual only as the externally audited profits for the year to 31 December 2025 are included in row 2 (Retained earnings).
OWN FUNDS (Continued) CC2: Reconciliation of regulatory own funds to the balance sheet in the financial statementsThe following table presents the Bank's accounting balance sheet as at 30 June 2026 which forms the basis for the calculation of the Bank's regulatory own funds as presented in table CC1. There is no difference between the Bank's accounting and regulatory balance sheets.
Balance sheet at 30 Jun 26 £mReference1
Assets | |||
1 Cash and balances at central banks | 2,706 | ||
2 Financial assets at fair value through profit or loss | 122 | ||
3 Derivative financial instruments | 1,951 | ||
4 Loans and advances to banks | 117 | ||
5 Loans and advances to customers | 307,969 | ||
6 Debt securities | 680 | ||
7 Due from fellow Lloyds Bank Group undertakings | 32,241 | ||
8 Financial assets at amortised cost | 341,007 | ||
9 Investment in subsidiary undertakings | 1,284 | d, g | |
10 Goodwill and other intangible assets | 325 | d | |
11 Current tax recoverable | 416 | ||
12 Deferred tax assets2 | 1,689 | e | |
13 Retirement benefit assets | 45 | f | |
14 Other assets | 1,497 | ||
15 Total assets | 351,042 | ||
Liabilities | |||
1 | Deposits from banks | 109 | |
2 | Customer deposits | 164,617 | |
3 | Repurchase agreements at amortised cost | 12,969 | |
4 | Due to fellow Lloyds Bank Group undertakings | 140,476 | |
5 | Derivative financial instruments | 1,883 | |
6 | Notes in circulation | 2,177 | |
7 | Debt securities in issue | 9,399 | |
8 | Other liabilities | 1,145 | |
11 | Other provisions | 322 | |
12 | Subordinated liabilities | 529 | h |
13 | Total liabilities | 333,626 | |
Shareholders' equity | |||
1 Called up share capital | 5,847 | ||
2 of which: share capital | 5,847 | a | |
3 Other equity instruments | 2,850 | b | |
4 Retained earnings, accumulated other comprehensive income and other reserves | 8,719 | c | |
5 Total equity excluding non-controlling interests | 17,416 | ||
6 Non-controlling interests | - | ||
7 Total equity | 17,416 | ||
8 Total equity and liabilities | 351,042 | ||
1 The references (a) to (h) identify regulatory balance sheet components that link initially to items disclosed in table CC1, prior to the application of regulatory definitions and adjustments per the rules for calculating own funds.
2 Deferred tax assets that rely on future profitability may be reduced by associated deferred tax liabilities where the conditions specified in Article 38 of the CRR are met. The resultant net deferred tax asset positions are deducted from CET1 capital, except in the case of deferred tax assets that arise from temporary differences which may be risk weighted instead of deducted from capital for the portion of the balance that does not exceed a threshold limit.
OWN FUNDS (Continued) CCyB1: Geographical distribution of credit exposures relevant for the calculation of the countercyclical buffer 30 Jun 2026General credit exposures2,3
Relevant credit exposures - Market risk2
Securitisation exposures3
Own fund requirements - relevant credit exposures
Sum of long and | |||||||||||||
Exposure value | short positions | Value of trading | Securitisation | ||||||||||
under the | Exposure value | of trading book | book exposures | Exposure value | Total | positions in the | Risk-weighted | Own fund | |||||
standardised | under the IRB | exposures for | for internal | for non- | exposure | non-trading | exposure | requirements | Countercyclical | ||||
approach | approach | SA | models | trading book | value | Credit risk2,3 | Market risk2 | book3 | Total | amounts | weights | buffer rate | |
Breakdown by Country | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | % | % |
United Kingdom | 13,411 | 348,075 | - | - | 930 | 362,416 | 5,882 | - | 16 | 5,898 | 73,724 | 99.41 | 2.00 |
Denmark | - | 5 | - | - | - | 5 | - | - | - | - | 4 | 0.01 | 2.50 |
France | - | - | - | - | 71 | 71 | - | - | 3 | 3 | 38 | 0.05 | 1.00 |
Germany | - | 28 | - | - | 230 | 258 | 3 | 1 | 4 | 55 | 0.07 | 0.75 | |
Hong Kong | - | 3 | - | - | - | 3 | - | - | - | - | 2 | 0.00 | 0.50 |
Ireland | 1 | 5 | - | - | - | 6 | - | - | - | - | 4 | 0.01 | 1.50 |
Luxembourg | - | 40 | - | - | - | 40 | - | - | - | - | - | 0.00 | 0.50 |
Netherlands | - | - | - | - | 66 | 66 | - | - | 1 | 1 | 7 | 0.01 | 2.00 |
i) Total1 | 13,412 | 348,156 | - | - | 1,297 | 362,865 | 5,885 | - | 21 | 5,906 | 73,834 | 99.56 | |
ii) Total1 | - | - | - | - | - | - | - | - | - | - | - | 0.00 | |
iii) Rest of the World1 | 73 | 18 | - | - | 1,549 | 1,640 | 5 | - | 22 | 27 | 326 | 0.44 | |
Total | 13,485 | 348,174 | - | - | 2,846 | 364,505 | 5,890 | - | 43 | 5,933 | 74,160 | 100.00 | |
31 Dec 2025
General credit exposures2,3
Relevant credit exposures - Market risk2
Securitisation exposures3
Own fund requirements - relevant credit exposures
Exposure value | Sum of long and | Value of trading | Securitisation | ||||||||||
under the | Exposure value | short positions | book exposures | Exposure value | Total | positions in the | Risk-weighted | Own fund | |||||
standardised | under the IRB | of trading book | for internal | for non-trading | exposure | non-trading | exposure | requirements | Countercyclical | ||||
approach | approach | exposures for SA | models | book | value | Credit risk2,3 | Market risk2 | book3 | Total | amounts | weights | buffer rate | |
Breakdown by Country | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | % | % |
United Kingdom | 14,998 | 341,037 | - | - | 1,462 | 357,497 | 5,799 | - | 35 | 5,834 | 72,919 | 99.45 | 2.00 |
Denmark | - | 6 | - | - | - | 6 | - | - | - | - | 4 | 0.01 | 2.50 |
France | - | - | - | - | 62 | 62 | - | - | 3 | 3 | 34 | 0.05 | 1.00 |
Germany | - | 30 | - | - | 233 | 263 | 3 | - | 2 | 5 | 58 | 0.08 | 0.75 |
Hong Kong | - | 3 | - | - | - | 3 | - | - | - | - | 2 | 0.00 | 0.50 |
Ireland | - | 6 | - | - | - | 6 | - | - | - | - | 5 | 0.01 | 1.50 |
Luxembourg | - | 47 | - | - | - | 47 | - | - | - | - | - | 0.00 | 0.50 |
Netherlands | - | - | - | - | 67 | 67 | - | - | 1 | 1 | 7 | 0.01 | 2.00 |
i) Total1 | 14,998 | 341,129 | - | - | 1,824 | 357,951 | 5,802 | - | 41 | 5,843 | 73,029 | 99.61 | |
ii) Total1 | - | - | - | - | - | - | - | - | - | - | - | 0.00 | |
iii) Rest of the World1 | 73 | 37 | - | - | 1,282 | 1,392 | 6 | - | 17 | 23 | 292 | 0.39 | |
Total1 | 15,071 | 341,166 | - | - | 3,106 | 359,343 | 5,808 | - | 58 | 5,866 | 73,321 | 100.00 |
1 The breakdown by country is disclosed on the following basis:
i. those countries for which a countercyclical capital buffer rate has been set and the Bank holds applicable exposures.
ii. those countries for which a countercyclical capital buffer rate has not been set and have an own funds requirement weighting of greater than or equal to one per cent, the threshold having been determined by the Bank in accordance with guidelines on materiality for Pillar 3.
iii. the aggregate of all remaining countries for which a countercyclical buffer rate has not been set and individually have an own funds requirement weighting of less than one per cent.
2 For the purposes of the calculation of the countercyclical capital buffer, general credit risk and trading book exposures exclude exposures to central governments, central banks, regional governments, local authorities, public sector entities, multilateral development banks, international organisations and institutions. In addition, trading book exposures are limited to those that are subject to the own funds requirement for specific risk or incremental default and migration risk (IRC).
3 General credit and securitisation exposures include counterparty credit risk and are stated on a post CRM basis.
CCyB2: Amount of institution-specific countercyclical capital buffer30 Jun 2026 | 31 Dec 2025 | |
1 Total risk exposure amount | £83,201m | £82,357m |
2 Institution specific countercyclical capital buffer rate | 1.99% | 1.99% |
3 Institution specific countercyclical capital buffer requirement | £1,655m | £1,639m |
LEVERAGE | |||
LR2: Leverage ratio common disclosure | |||
30 Jun 2026 | 31 Dec 2025 | ||
£m | £m | ||
On-balance sheet exposures (excluding derivatives and SFTs) | |||
1 On-balance sheet items (excluding derivatives, SFTs, but including collateral)1 | 348,996 | 333,752 | |
3 Deductions of receivables assets for cash variation margin provided in derivatives transactions | (71) | (72) | |
6 Asset amounts deducted in determining tier 1 capital (leverage) | (2,862) | (2,856) | |
7 Total on-balance sheet exposures (excluding derivatives and SFTs) | 346,063 | 330,824 | |
Derivative exposures | |||
8 Replacement cost associated with SA-CCR derivatives transactions (i.e. net of eligible cash variation margin) | 225 | 86 | |
9 Add-on amounts for potential future exposure associated with SA-CCR derivatives transactions | 400 | 475 | |
11 Adjusted effective notional amount of written credit derivatives | - | - | |
12 Adjusted effective notional offsets and add-on deductions for written credit derivatives | - | - | |
13 Total derivatives exposures | 625 | 561 | |
Securities financing transaction (SFT) exposures | |||
14 | Gross SFT assets (with no recognition of netting), after adjustment for sales accounting transactions | - | 5 |
18 | Total securities financing transaction exposures | - | 5 |
Other off-balance sheet exposures | |||
19 Off-balance sheet exposures at gross notional amount | 48,248 | 45,236 | |
20 Adjustments for conversion to credit equivalent amounts | (39,025) | (37,049) | |
General provisions deducted in determining tier 1 capital (leverage) and specific provisions associated with off- 21 balance sheet exposures | (59) | (63) | |
22 Off-balance sheet exposures | 9,164 | 8,124 | |
Excluded exposures | |||
UK-22a Exposures excluded from the total exposure measure in accordance with point (c) of Article 429a(1) of the CRR | (30,055) | (15,847) | |
UK-22k Total exempted exposures | (30,055) | (15,847) | |
Capital and total exposure measure | |||
23 Tier 1 capital (leverage) | 14,600 | 13,683 | |
24 Total exposure measure including claims on central banks | 325,797 | 323,667 | |
UK-24a (-) Claims on central banks excluded | (2,706) | (2,715) | |
UK-24b Total exposure measure excluding claims on central banks | 323,091 | 320,952 | |
Leverage ratio | |||
25 | Leverage ratio excluding claims on central banks (%) | 4.5% | 4.3% |
UK-25c | Leverage ratio including claims on central banks (%) | 4.5% | 4.2% |
26 | Regulatory minimum leverage ratio requirement (%) | 3.25% | 3.25% |
Additional leverage ratio disclosure requirements - leverage ratio buffers | |||
27 | Leverage ratio buffer (%) | 0.7% | 0.7% |
UK-27b Of which: countercyclical leverage ratio buffer (%) | 0.7% | 0.7% | |
Additional leverage ratio disclosure requirements - disclosure of mean values | |||
Mean of daily values of gross SFT assets (over the quarter), after adjustment for sale accounting transactions and 28 netted of amounts of associated cash payables and cash receivable2 | - | - | |
Quarter-end value of gross SFT assets, after adjustment for sale accounting transactions and netted of amounts 29 of associated cash payables and cash receivables2 | - | - | |
UK-31 Average total exposure measure including claims on central banks | 324,514 | 322,402 | |
UK-32 Average total exposure measure excluding claims on central banks | 321,815 | 319,700 | |
UK-33 Average leverage ratio including claims on central banks | 4.5% | 4.3% | |
UK-34 Average leverage ratio excluding claims on central banks | 4.5% | 4.3% | |
1 Includes an adjustment to exclude lending under the UK Government's Bounce Back Loan Scheme (BBLS).
2 Excludes intragroup SFT assets amounting to £5 million at 31 December 2025, exempted in accordance with point (c) of Article 429a(1) of the CRR.
LEVERAGE (Continued) LR1: Summary reconciliation of accounting assets and leverage ratio exposures30 Jun 2026 £m | 31 Dec 2025 £m | ||
1 | Total assets as per financial statements | 351,042 | 336,117 |
4 | Adjustment for exemption of exposures to central banks | (2,706) | (2,715) |
6 | Adjustment for regular-way purchases and sales of financial assets subject to trade date accounting | - | (1) |
8 | Adjustment for derivative financial instruments | 282 | 148 |
10 | Adjustment for off-balance sheet items (i.e. conversion to credit equivalent amounts of off-balance sheet exposures)1 | 9,223 | 8,187 |
11 | Adjustment for items and specific and general provisions which have reduced tier 1 capital (leverage) | (2,921) | (2,919) |
UK-11a | Adjustment for exposures excluded from the total exposure measure in accordance with point (c) of Article 429a(1) of the CRR | (31,735) | (17,719) |
12 | Other adjustments2 | (94) | (146) |
13 | Total exposure measure | 323,091 | 320,952 |
1 Gross of specific provisions. The amount net of specific provisions at 30 June 2026 is £9,164 million (31 December 2025: £8,124 million).
2 Includes an adjustment to exclude lending under the UK Government's Bounce Back Loan Scheme (BBLS).
LR3: Split-up of on balance sheet exposures (excluding derivatives, SFTs and exempted exposures)30 Jun 2026 £m | 31 Dec 2025 £m | ||
UK-1 | Total on-balance sheet exposures (excluding derivatives, SFTs, and exempted exposures), of which: | 319,398 | 318,258 |
UK-2 | Trading book exposures | - | - |
UK-3 | Banking book exposures, of which: | 319,398 | 318,258 |
UK-5 | Exposures treated as sovereigns | 2,230 | 2,244 |
UK-7 | Institutions | 38 | 29 |
UK-8 | Secured by mortgages of immovable properties | 291,089 | 288,402 |
UK-9 | Retail exposures | 11,366 | 11,226 |
UK-10 | Corporates | 3,687 | 3,417 |
UK-11 | Exposures in default | 2,546 | 2,892 |
UK-12 | Other exposures (e.g. equity, securitisations, and other non-credit obligation assets) | 8,442 | 10,048 |
The tables in this section reflect FINREP categories and definitions. The reported values for defaulted exposure reflect a definition of default backstop of 90 days.
CR1: Performing and non-performing exposures and related provisionsGross carrying amount/nominal amount1
30 Jun 2026Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions1
Non-performing exposures -accumulated impairment,
Collateral and financial guarantees received
Performing exposures Non-performing exposures
Performing exposures -accumulated impairment and
provisions
accumulated negative changes in fair value due to credit risk and
provisions On
On non-
£m | Of which stage 1 £m | Of which stage 2 £m | £m | Of which stage 2 £m | Of which stage 3 £m | £m | Of which stage 1 £m | Of which stage 2 £m | £m | Of which stage 2 £m | Of which stage 3 £m | Accumulated partial write-off £m | performing exposures £m | performing exposures £m | |
Cash balances at central banks and other 005 demand deposits | 4,506 | 4,506 | - | - | - | - | - | - | - | - | - | - | - | - | - |
010 Loans and advances | 332,961 | 305,123 | 27,720 | 5,161 | 312 | 4,849 | (530) | (156) | (374) | (595) | (19) | (576) | (147) | 290,352 | 4,273 |
020 Central banks | 1,780 | 1,780 | - | - | - | - | - | - | - | - | - | - | - | - | - |
030 General governments | 21 | 8 | - | - | - | - | - | - | - | - | - | - | - | 8 | - |
040 Credit institutions | 23,066 | 23,066 | - | - | - | - | - | - | - | - | - | - | - | - | - |
050 Other financial corporations | 4,109 | 4,108 | 1 | 2 | - | 2 | - | - | - | (2) | - | (2) | - | 16 | - |
060 Non-financial corporations | 4,803 | 4,043 | 682 | 232 | 11 | 221 | (39) | (9) | (30) | (58) | - | (58) | (147) | 1,398 | 58 |
070 Of which SMEs | 1,946 | 1,590 | 356 | 99 | 11 | 88 | (11) | (3) | (8) | (8) | - | (8) | - | 363 | 18 |
080 Households | 299,182 | 272,118 | 27,037 | 4,927 | 301 | 4,626 | (491) | (147) | (344) | (535) | (19) | (516) | - | 288,930 | 4,215 |
090 Debt securities | 1,406 | 1,403 | - | 1 | - | 1 | - | - | - | (1) | - | (1) | - | - | - |
120 Credit institutions | 151 | 151 | - | - | - | - | - | - | - | - | - | - | - | - | - |
130 Other financial corporations | 1,255 | 1,252 | - | - | - | - | - | - | - | - | - | - | - | - | - |
140 Non-financial corporations | - | - | - | 1 | - | 1 | - | - | - | (1) | - | (1) | - | - | - |
150 | Off-balance-sheet exposures | 47,450 | 46,348 | 1,102 | 135 | 110 | 25 | (59) | (32) | (27) | (3) | (2) | (1) | 383 | - | |
170 | General governments | 22 | 22 | - | - | - | - | - | - | - | - | - | - | - | - | |
190 | Other financial corporations | 2,538 | 2,537 | 1 | - | - | - | - | - | - | - | - | - | - | - | |
200 | Non-financial corporations | 2,005 | 1,913 | 92 | 62 | 60 | 2 | (4) | (2) | (2) | (1) | - | (1) | 383 | - | |
210 | Households | 42,885 | 41,876 | 1,009 | 73 | 50 | 23 | (55) | (30) | (25) | (2) | (2) | - | - | - |
Gross carrying amount/nominal amount1
31 Dec 2025
Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions1
Non-performing exposures -accumulated impairment,
Collateral and financial guarantees received
Performing exposures Non-performing exposures
Performing exposures -accumulated impairment and
provisions
accumulated negative changes in fair value due to credit risk and
provisions On
On non-
£m | Of which stage 1 £m | Of which stage 2 £m | £m | Of which stage 2 £m | Of which stage 3 £m | £m | Of which stage 1 £m | Of which stage 2 £m | £m | Of which stage 2 £m | Of which stage 3 £m | Accumulated partial write-off £m | performing exposures £m | performing exposures £m | |
Cash balances at central banks and other 005 demand deposits | 1,728 | 1,728 | - | - | - | - | - | - | - | - | - | - | - | - | - |
010 Loans and advances | 319,572 | 290,159 | 29,292 | 5,722 | 343 | 5,379 | (558) | (153) | (405) | (686) | (21) | (665) | (147) | 287,943 | 4,728 |
020 Central banks | 1,745 | 1,745 | - | - | - | - | - | - | - | - | - | - | - | - | - |
030 General governments | 23 | 10 | - | - | - | - | - | - | - | - | - | - | - | 10 | - |
040 Credit institutions | 11,779 | 11,779 | - | - | - | - | - | - | - | - | - | - | - | - | - |
050 Other financial corporations | 4,063 | 4,063 | - | 2 | - | 2 | - | - | - | (2) | - | (2) | - | 12 | - |
060 Non-financial corporations | 4,995 | 4,226 | 689 | 245 | 15 | 230 | (54) | (11) | (43) | (60) | - | (60) | (147) | 1,608 | 56 |
070 Of which SMEs | 1,950 | 1,590 | 360 | 106 | 15 | 91 | (14) | (4) | (10) | (9) | - | (9) | - | 418 | 13 |
080 Households | 296,967 | 268,336 | 28,603 | 5,475 | 328 | 5,147 | (504) | (142) | (362) | (624) | (21) | (603) | - | 286,313 | 4,672 |
090 Debt securities | 1,672 | 1,669 | - | 1 | - | 1 | - | - | - | (1) | - | (1) | - | - | - |
120 Credit institutions | 40 | 40 | - | - | - | - | - | - | - | - | - | - | - | - | - |
130 Other financial corporations | 1,632 | 1,629 | - | - | - | - | - | - | - | - | - | - | - | - | - |
140 Non-financial corporations | - | - | - | 1 | - | 1 | - | - | - | (1) | - | (1) | - | - | - |
150 | Off-balance-sheet exposures | 45,073 | 43,528 | 1,544 | 72 | 52 | 20 | (61) | (31) | (30) | (2) | (2) | - | 228 | - | |
170 | General governments | 5 | 5 | - | - | - | - | - | - | - | - | - | - | - | - | |
190 | Other financial corporations | 2,508 | 2,508 | - | - | - | - | - | - | - | - | - | - | 1 | - | |
200 | Non-financial corporations | 1,908 | 1,773 | 134 | 3 | 2 | 1 | (3) | (1) | (2) | - | - | - | 227 | - | |
210 | Households | 40,652 | 39,242 | 1,410 | 69 | 50 | 19 | (58) | (30) | (28) | (2) | (2) | - | - | - |
220 Total 368,045 337,084 30,836 5,795 395 5,400 (619) (184) (435) (689) (23) (666) (147) 288,171 4,728
1 Staging analysis will exclude those assets and provisions that can not be allocated to a stage such as those classified as 'purchased or originated credit impaired' (POCI) and those measured at fair value.
BANK OF SCOTLAND PLC 2026 HALF-YEAR PILLAR 3 DISCLOSURES
CREDIT RISK (Continued) CR1-A: Maturity of exposures 30 Jun 2026Net exposure value
On demand £m | <= 1 year £m | > 1 year <= 5 years £m | > 5 years £m | No stated maturity £m | Total £m | |
1 Loans and advances | 6,884 | 4,978 | 18,373 | 306,723 | 39 | 336,997 |
2 Debt securities | 151 | - | 883 | 372 | - | 1,406 |
3 Total | 7,035 | 4,978 | 19,256 | 307,095 | 39 | 338,403 |
31 Dec 2025 | ||||||
£m | £m | £m | £m | £m | £m | |
1 Loans and advances | 7,114 | 7,113 | 19,584 | 290,198 | 40 | 324,049 |
2 Debt securities | 40 | 967 | 270 | 395 | - | 1,672 |
3 Total | 7,154 | 8,080 | 19,854 | 290,593 | 40 | 325,721 |
Gross carrying amount £m | ||
010 | Initial stock of non-performing loans and advances at 31 December 2025 | 5,722 |
020 | Inflows to non-performing portfolios | 1,126 |
030 | Outflows from non-performing portfolios | (1,687) |
040 | Outflows due to write-offs | (232) |
050 | Outflow due to other situations | (1,455) |
060 | Final stock of non-performing loans and advances at 30 June 2026 | 5,161 |
Page 15 of 26
BANK OF SCOTLAND PLC 2026 HALF-YEAR PILLAR 3 DISCLOSURES
CREDIT RISK (Continued) CQ1: Credit quality of forborne exposures 30 Jun 2026Gross carrying amount/nominal amount of exposures with forbearance measures
Non-performing forborne
Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions
Collateral received and financial guarantees received on forborne exposures
Of which collateral and financial guarantees received on non-performing
Performing forborne £m | £m | Of which defaulted £m | Of which impaired £m | On performing forborne exposures £m | On non-performing forborne exposures £m | £m | exposures with forbearance measures £m | |||||
010 Loans and advances | 877 | 2,258 | 2,098 | 2,098 | (17) | (263) | 2,531 | 1,756 | ||||
050 Other financial corporations | 1 | 2 | 2 | 2 | - | (2) | - | - | ||||
060 Non-financial corporations | 34 | 232 | 221 | 221 | - | (58) | 59 | 58 | ||||
070 Households | 842 | 2,024 | 1,875 | 1,875 | (17) | (203) | 2,472 | 1,698 | ||||
090 Loan commitments given | 48 | 108 | 25 | 25 | (1) | (2) | - | - | ||||
100 Total | 925 | 2,366 | 2,123 | 2,123 | (18) | (265) | 2,531 | 1,756 | ||||
31 Dec 2025 | ||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | |||||
010 Loans and advances | 838 | 2,370 | 2,182 | 2,182 | (16) | (289) | 2,559 | 1,833 | ||||
050 Other financial corporations | 1 | 2 | 2 | 2 | - | (2) | - | - | ||||
060 Non-financial corporations | 46 | 232 | 195 | 195 | - | (58) | 50 | 48 | ||||
070 Households | 791 | 2,136 | 1,985 | 1,985 | (16) | (229) | 2,509 | 1,785 | ||||
090 Loan commitments given | 46 | 46 | 19 | 19 | (1) | (1) | - | - | ||||
100 Total | 884 | 2,416 | 2,201 | 2,201 | (17) | (290) | 2,559 | 1,833 | ||||
Page 16 of 26
CREDIT RISK (Continued) CQ4: Quality of non-performing exposures by geographyTotal performing and | Accumulated | Provisions on off- balance-sheet commitments and financial guarantees | negative changes in fair value due to credit risk on non- performing | ||||
non-performing | Of which defaulted | impairment | given | exposures | |||
£m | £m | £m | £m | £m | |||
010 | On-balance-sheet exposures | 339,529 | 4,849 | (1,126) | - | ||
040 | United Kingdom | 339,331 | 4,849 | (1,124) | - | ||
070 | Other countries | 198 | - | (2) | - | ||
080 | Off-balance-sheet exposures | 47,585 | 25 | (62) | |||
110 | United Kingdom | 47,575 | 25 | (62) | |||
140 | Other countries | 10 | - | - | |||
150 | Total | 387,114 | 4,874 | (1,126) | (62) | - | |
31 Dec 20251 | |||||||
£m | £m | £m | £m | £m | |||
010 | On-balance-sheet exposures | 326,967 | 5,378 | (1,245) | - | ||
040 | United Kingdom | 326,756 | 5,378 | (1,242) | - | ||
070 | Other countries | 211 | - | (3) | - | ||
080 | Off-balance-sheet exposures | 45,145 | 20 | (63) | |||
110 | United Kingdom | 45,111 | 20 | (63) | |||
140 | Other countries | 34 | - | - | |||
150 | Total | 372,112 | 5,398 | (1,245) | (63) | - | |
Gross carrying/nominal amount
30 Jun 20261Accumulated
1 Geographical exposures are presented individually by country where the total exposure to that country exceeds 1% of the Bank's total exposure. All other geographical exposures are presented in aggregate within other countries.
CREDIT RISK (Continued) CQ5: Credit quality of loans and advances to non-financial corporations by industry 30 Jun 2026Gross carrying amount
Accumulated negative changes in fair value due to credit risk on non-
£m | Of which defaulted £m | Accumulated impairment £m | performing exposures £m | ||
010 | Agriculture, forestry and fishing | 508 | 15 | (8) | - |
020 | Mining and quarrying | 4 | - | - | - |
030 | Manufacturing | 155 | 2 | (1) | - |
040 | Electricity, gas, steam and air conditioning supply | 9 | - | - | - |
050 | Water supply | 6 | - | - | - |
060 | Construction | 453 | 67 | (23) | - |
070 | Wholesale and retail trade | 425 | 9 | (4) | - |
080 | Transport and storage | 110 | 1 | (6) | - |
090 | Accommodation and food service activities | 294 | 6 | (3) | - |
100 | Information and communication | 31 | 11 | (1) | - |
110 | Financial and insurance activities | ||||
120 | Real estate activities | 2,544 | 85 | (37) | - |
130 | Professional, scientific and technical activities | 103 | 4 | (5) | - |
140 | Administrative and support service activities | 73 | 1 | (1) | - |
160 | Education | 53 | 8 | (1) | - |
170 | Human health services and social work activities | 170 | 4 | (1) | - |
180 | Arts, entertainment and recreation | 35 | 6 | (5) | - |
190 | Other services | 62 | 2 | (1) | - |
200 | Total | 5,035 | 221 | (97) | - |
31 Dec 2025 | |||||
£m | £m | £m | £m | ||
010 | Agriculture, forestry and fishing | 499 | 21 | (10) | - |
020 | Mining and quarrying | 4 | - | - | - |
030 | Manufacturing | 150 | 38 | (1) | - |
040 | Electricity, gas, steam and air conditioning supply | 11 | - | - | - |
050 | Water supply | 7 | - | - | - |
060 | Construction | 469 | 36 | (25) | - |
070 | Wholesale and retail trade | 359 | 6 | (4) | - |
080 | Transport and storage | 390 | 2 | (8) | - |
090 | Accommodation and food service activities | 304 | 10 | (4) | - |
100 | Information and communication | 30 | 3 | (1) | - |
110 | Financial and insurance activities | ||||
120 | Real estate activities | 2,526 | 92 | (44) | - |
130 | Professional, scientific and technical activities | 135 | 4 | (8) | - |
140 | Administrative and support service activities | 59 | 6 | (1) | - |
160 | Education | 37 | - | (1) | - |
170 | Human health services and social work activities | 166 | 5 | (1) | - |
180 | Arts, entertainment and recreation | 33 | 6 | (5) | - |
190 | Other services | 61 | 1 | (1) | - |
200 | Total | 5,240 | 230 | (114) | - |
30 Jun 2026 | ||||||||
Unsecured | Secured | Of which | Of which secured by | Of which secured by | ||||
carrying amount | carrying amount | secured by collateral | financial guarantees | credit derivatives | ||||
£m | £m | £m | £m | £m | ||||
Loans and advances | 42,372 | 294,625 | 294,453 | 172 | - | |||
Debt securities | 1,406 | - | - | - | ||||
Total | 43,778 | 294,625 | 294,453 | 172 | - | |||
Of which non-performing exposures | 293 | 4,273 | 4,260 | 13 | - | |||
Of which defaulted | 190 | 4,063 | ||||
31 Dec 2025 | ||||||
£m | £m | £m | £m | £m | ||
Loans and advances | 31,378 | 292,672 | 292,432 | 239 | - | |
Debt securities | 1,672 | - | - | - | ||
Total | 33,050 | 292,672 | 292,432 | 239 | - | |
Of which non-performing exposures | 307 | 4,728 | 4,717 | 11 | - | |
Of which defaulted | 189 | 4,503 | ||||
Exposures before CCF and before CRM
30 Jun 2026Exposures post
CCF and post CRM RWAs and RWAs density1
On-balance | Off-balance | On-balance | Off-balance | |||||||
sheet | sheet | sheet | sheet | RWAs | ||||||
exposures | exposures | exposures | exposures | RWAs | density | |||||
Exposure classes | £m | £m | £m | £m | £m | % | ||||
1 | Central governments or central banks | 2,196 | - | 2,326 | 46 | - | - | |||
6 | Institutions | 28,600 | 41 | 28,600 | 8 | 11 | - | |||
7 | Corporates | 3,366 | 628 | 3,363 | 147 | 1,108 | 32 | |||
8 | Retail | 1,344 | 308 | 1,263 | 13 | 864 | 68 | |||
9 | Secured by mortgages on immovable property | 7,317 | 712 | 7,317 | 509 | 2,756 | 35 | |||
10 | Exposures in default | 722 | 3 | 700 | - | 716 | 102 | |||
16 | Other items | 163 | - | 163 | - | 122 | 75 | |||
17 | Total | 43,708 | 1,692 | 43,732 | 723 | 5,577 | 13 | |||
31 Dec 2025 | ||||||||||
Exposure classes | £m | £m | £m | £m | £m | % | ||||
1 | Central governments or central banks | 2,204 | - | 2,388 | 36 | 23 | 1 | |||
6 | Institutions | 13,856 | 40 | 13,856 | 8 | 11 | - | |||
7 | Corporates | 2,915 | 955 | 2,909 | 209 | 810 | 26 | |||
8 | Retail | 1,375 | 327 | 1,242 | 8 | 845 | 68 | |||
9 | Secured by mortgages on immovable property | 9,039 | 761 | 9,039 | 501 | 3,357 | 35 | |||
10 | Exposures in default | 1,002 | 4 | 974 | - | 999 | 103 | |||
16 | Other items | 180 | - | 180 | - | 151 | 84 | |||
17 | Total | 30,571 | 2,087 | 30,588 | 762 | 6,196 | 20 | |||
1 Risk-weighted assets and density reported in this table are disclosed after application of supporting factors.
CREDIT RISK (Continued) CR7-A IRB approach - Disclosure of the extent of the use of CRM techniques 30 Jun 2026Part of | |||||||||||||||
Part of | Part of | Part of | exposures | Part of | Part of | RWA with | |||||||||
Part of | exposures | exposures | exposures | covered by | Part of | exposures | exposures | Part of | substitution | ||||||
exposures | covered by | covered by | Part of | covered by | other | exposures | covered by | covered by | Part of | exposures | effects (both | ||||
Total | covered by | other | immovable | exposures | other | funded | covered by | life | instruments | exposures | covered by | reduction and | |||
exposure | financial | eligible | property | covered by | physical | credit | cash on | insurance | held by a | covered by | credit | substitution | |||
at default | collaterals | collaterals1 | collaterals1 | receivables | collateral | protection | deposit | policies | third party | guarantees | derivatives | effects) | |||
A-IRB | £m | % | % | % | % | % | % | % | % | % | % | % | £m | ||
4 Retail | 343,147 | - | 92.4 | 92.4 | - | - | - | - | - | - | - | - | 65,376 | ||
4.1 Of which Retail - Immovable property SMEs | - | - | - | - | - | - | - | - | - | - | - | - | - | ||
4.2 Of which Retail - Immovable property non-SMEs | 317,330 | - | 99.9 | 99.9 | - | - | - | - | - | - | - | - | 54,708 | ||
4.3 Of which Retail - Qualifying revolving | 21,113 | - | - | - | - | - | - | - | - | - | - | - | 5,757 | ||
4.4 Of which Retail - Other SMEs | - | - | - | - | - | - | - | - | - | - | - | - | - | ||
4.5 Of which Retail - Other non-SMEs | 4,704 | - | - | - | - | - | - | - | - | - | - | - | 4,911 | ||
5 Total | 343,147 | - | 92.4 | 92.4 | - | - | - | - | - | - | - | - | 65,376 | ||
1 | Central governments and central banks | - | - | - | - | - | - | - | - | - | - | |
2 | Institutions | 33 | 45.0 | - | - | - | - | - | - | - | 5 | |
3 | Corporates | 2,264 | 15.9 | 52.4 | 52.1 | 0.3 | - | - | 6.0 | - | 1,166 | |
3.1 Of which Corporates - SMEs | 538 | 2.1 | 46.6 | 46.5 | 0.1 | - | - | 0.6 | - | 337 | ||
3.3 Of which Corporates - Other | 1,726 | 20.2 | 54.2 | 53.9 | 0.3 | - | - | 7.6 | - | 829 | ||
4 | Total | 2,297 | 16.3 | 51.7 | 51.4 | 0.3 | - | - | 5.9 | - | 1,171 | |
Specialised lending under the slotting approach3 818 | 521 | |
Total 818 | 521 |
31 Dec 2025
Credit risk mitigation techniques Credit risk
mitigation
methods in
Funded Credit Protection (FCP)
Unfunded Credit Protection (UFCP)2
the calculation
of RWAs
Part of | Part of | Part of | Part of exposures | Part of | Part of | RWA with | |||||||||
Part of | exposures | exposures | exposures | covered by | Part of | exposures | exposures | Part of | substitution | ||||||
exposures | covered by | covered by | Part of | covered by | other | exposures | covered by | covered by | Part of | exposures | effects (both | ||||
Total | covered by | other | immovable | exposures | other | funded | covered by | life | instruments | exposures | covered by | reduction and | |||
exposure | financial | eligible | property | covered by | physical | credit | cash on | insurance | held by a | covered by | credit | substitution | |||
at default | collaterals | collaterals1 | collaterals1 | receivables | collateral | protection | deposit | policies | third party | guarantees | derivatives | effects) | |||
A-IRB | £m | % | % | % | % | % | % | % | % | % | % | % | £m | ||
4 Retail | 335,772 | - | 92.2 | 92.2 | - | - | - | - | - | - | - | - | 63,418 | ||
4.1 Of which Retail - Immovable property SMEs | - | - | - | - | - | - | - | - | - | - | - | - | - | ||
4.2 Of which Retail - Immovable property non-SMEs | 310,007 | - | 99.9 | 99.9 | - | - | - | - | - | - | - | - | 52,991 | ||
4.3 Of which Retail - Qualifying revolving | 21,294 | - | - | - | - | - | - | - | - | - | - | - | 5,769 | ||
4.4 Of which Retail - Other SMEs | - | - | - | - | - | - | - | - | - | - | - | - | - | ||
4.5 Of which Retail - Other non-SMEs | 4,471 | - | - | - | - | - | - | - | - | - | - | - | 4,658 | ||
5 Total | 335,772 | - | 92.2 | 92.2 | - | - | - | - | - | - | - | - | 63,418 | ||
F-IRB | |||||||||||||||
1 Central governments and central banks | - | ||||||||||||||
- | - | - | - | - | - | - | - | - | |||
2 Institutions | 51 | 14.0 | - | - | - | - | - | - | - | 19 | |
3 Corporates | 2,372 | 20.6 | 27.3 | 27.3 | - | - | - | 5.5 | - | 1,381 | |
3.1 Of which Corporates - SMEs | 505 | 1.5 | 23.1 | 22.9 | 0.1 | - | - | 1.5 | - | 366 | |
3.3 Of which Corporates - Other | 1,867 | 25.8 | 28.4 | 28.4 | - | - | - | 6.5 | - | 1,015 | |
4 Total | 2,423 | 20.5 | 26.7 | 26.7 | - | - | - | 5.3 | - | 1,400 | |
Other IRB
Specialised lending under the slotting approach3 820 | 542 | |
Total 820 | 542 |
1 For AIRB the value of eligible collateral has been capped at the individual exposure amount. For FIRB the amount is capped at the value used in determining the LGD.
2 For AIRB the unfunded credit protection includes only cases where unfunded credit protection is taken into account in own estimates of LGD. For FIRB it relates to unfunded credit protection which has substitution effect.
3 The exposures disclosed in the 'Specialised lending under the slotting approach' row are fully secured, however the collateral is not used directly in the calculation of RWA.
CREDIT RISK (Continued) CR10.1: IRB - Specialised lending - Project Finance (Slotting approach)On-balance
Off-balance
30 Jun 2026Risk
Risk weighted
Expected
Regulatory categories Remaining maturity | sheet exposure £m | sheet exposure £m | weight % | Exposure value £m | exposure amount £m | loss amount £m |
Less than 2.5 years | - | 5 | 50 | 1 | 1 | - |
1) Strong | ||||||
Equal to or more than 2.5 years | 94 | 37 | 70 | 123 | 78 | - |
Less than 2.5 years | 2 | 3 | 70 | 5 | 3 | - |
2) Good | ||||||
Equal to or more than 2.5 years | 2 | 3 | 90 | 4 | 3 | - |
Less than 2.5 years | - | - | 115 | - | - | - |
3) Satisfactory | ||||||
Equal to or more than 2.5 years | 18 | 4 | 115 | 21 | 24 | 1 |
Less than 2.5 years | - | - | 250 | - | - | - |
4) Weak | ||||||
Equal to or more than 2.5 years | - | - | 250 | - | - | - |
5) Default | Less than 2.5 years Equal to or more than 2.5 years | 31 - | 4 7 | 34 5 | - - | 17 3 | |
Total | Less than 2.5 years Equal to or more than 2.5 years | 33 114 | 12 51 | 40 153 | 4 105 | 17 4 |
31 Dec 2025
Regulatory categories Remaining maturity | £m | £m | % | £m | £m | £m |
Less than 2.5 years | - | 5 | 50 | 1 | - | - |
1) Strong | ||||||
Equal to or more than 2.5 years | 96 | 37 | 70 | 125 | 80 | 1 |
Less than 2.5 years | - | 4 | 70 | 4 | 3 | - |
2) Good | ||||||
Equal to or more than 2.5 years | 4 | 2 | 90 | 6 | 5 | - |
Less than 2.5 years | - | - | 115 | - | - | - |
3) Satisfactory | ||||||
Equal to or more than 2.5 years | 19 | 4 | 115 | 22 | 25 | 1 |
Less than 2.5 years | - | - | 250 | - | - | - |
4) Weak | ||||||
Equal to or more than 2.5 years | - | 7 | 250 | 5 | 13 | - |
5) Default | Less than 2.5 years Equal to or more than 2.5 years | 30 - | 3 1 | 32 - | - - | 16 - | |
Total | Less than 2.5 years Equal to or more than 2.5 years | 30 119 | 12 51 | 37 158 | 3 123 | 16 2 |
Regulatory categories Remaining maturity | On-balance sheet exposure £m | Off-balance sheet exposure £m | Risk weight % | Exposure value £m | Risk weighted exposure amount £m | Expected loss amount £m |
Less than 2.5 years | 64 | 12 | 50 | 69 | 32 | - |
1) Strong | ||||||
Equal to or more than 2.5 years | 105 | 1 | 70 | 105 | 66 | - |
Less than 2.5 years | 123 | 20 | 70 | 135 | 88 | 1 |
2) Good | ||||||
Equal to or more than 2.5 years | 165 | 46 | 90 | 198 | 158 | 2 |
Less than 2.5 years | 6 | - | 115 | 6 | 7 | - |
3) Satisfactory | ||||||
Equal to or more than 2.5 years | 53 | 1 | 115 | 53 | 61 | 2 |
5) Default | Less than 2.5 years Equal to or more than 2.5 years | 56 3 | 1 - | 56 3 | - - | 28 1 | |
Total | Less than 2.5 years Equal to or more than 2.5 years | 249 326 | 33 48 | 266 359 | 127 285 | 29 5 |
31 Dec 2025
Regulatory categories Remaining maturity | On-balance sheet exposure £m | Off-balance sheet exposure £m | Risk weight % | Exposure value £m | Risk weighted exposure amount £m | Expected loss amount £m |
Less than 2.5 years | 76 | 2 | 50 | 76 | 35 | - |
1) Strong | ||||||
Equal to or more than 2.5 years | 117 | 1 | 70 | 117 | 75 | - |
Less than 2.5 years | 108 | 10 | 70 | 112 | 76 | 1 |
2) Good | ||||||
Equal to or more than 2.5 years | 167 | 23 | 90 | 182 | 150 | 1 |
Less than 2.5 years | 11 | 1 | 115 | 12 | 13 | - |
3) Satisfactory | ||||||
Equal to or more than 2.5 years | 58 | 1 | 115 | 59 | 67 | 2 |
5) Default | Less than 2.5 years Equal to or more than 2.5 years | 62 2 | 4 - | 64 2 | - - | 32 1 | |
Total | Less than 2.5 years Equal to or more than 2.5 years | 257 344 | 17 25 | 264 360 | 124 292 | 33 4 |
Pillar 3 templates that are required to be disclosed semi-annually but have not been included in this document are listed in the table below along with the reason for exclusion.
PRA reference | Template name | Reason for exclusion |
CR2a | Changes in the stock of non-performing loans and advances and related net accumulated recoveries | Threshold for disclosure not met |
CQ2 | Quality of forbearance | Threshold for disclosure not met |
CQ6 | Collateral valuation - loans and advances | Threshold for disclosure not met |
CQ7 | Collateral obtained by taking possession and execution processes | No collateral taken into possession is recognised on the balance sheet |
CQ8 | Collateral obtained by taking possession and execution processes - vintage breakdown | No collateral taken into possession is recognised on the balance sheet and threshold for disclosure is not met |
CR7 | IRB - Effect on the RWAs of credit derivatives used as CRM techniques | Excluded on materiality basis |
CR10.3 | Specialised lending: Object finance (Slotting approach) | Not applicable to the Bank |
CR10.4 | Specialised lending: Commodities finance (Slotting approach) | Not applicable to the Bank |
CR10.5 | Equity exposures subject to the simple risk weight method | Not applicable to the Bank |
CCR7 | RWA flow statements of CCR exposures under the IMM | Not applicable to the Bank |
MR2-B | RWA flow statements of market risk exposures under the Internal Model Approach | Not applicable to the Bank |
LIQ1 | Liquidity coverage ratio (LCR) | Liquidity is managed at a Lloyds Bank |
LIQ2 Net stable funding ratio
LIQB Qualitative information on LCR
Liquidity Sub-Group level. Refer to the
Lloyds Bank plc 2026 Half-Year Pillar 3 Disclosures for further information.
FORWARD-LOOKING STATEMENTSThis document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and section 27A of the US Securities Act of 1933, as amended, with respect to the business, strategy, plans and/or results of Bank of Scotland plc together with its subsidiaries (the Group) and its current goals and expectations. Statements that are not historical or current facts, including statements about the Group's or its directors' and/or management's beliefs and expectations, are forward-looking statements. Words such as, without limitation, 'believes', 'achieves', 'anticipates', 'estimates', 'expects', 'targets', 'should', 'intends', 'aims', 'projects', 'plans', 'potential', 'will', 'would', 'could', 'considered', 'likely', 'may', 'seek', 'estimate', 'probability', 'goal', 'objective', 'deliver', 'endeavour', 'prospects', 'optimistic' and similar expressions or variations on these expressions are intended to identify forward-looking statements. These statements concern or may affect future matters, including but not limited to: projections or expectations of the Group's future financial position, including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, portfolios, net interest margin, capital ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other financial items or ratios; litigation, regulatory and governmental investigations; the Group's future financial performance; the level and extent of future impairments and write-downs; the Group's ESG targets and/or commitments; statements of plans, objectives or goals of the Group or its management and other statements that are not historical fact and statements of assumptions underlying such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. Factors that could cause actual business, strategy, targets, plans and/or results (including but not limited to the payment of dividends) to differ materially from forward-looking statements include, but are not limited to: general economic and business conditions in the UK and internationally (including in relation to tariffs); imposed and threatened tariffs and changes to global trade policies; acts of hostility or terrorism and responses to those acts, or other such events; geopolitical unpredictability; the war between Russia and Ukraine; the escalation of conflicts in the Middle East; the tensions between China and Taiwan; political instability including as a result of any UK general election; market related risks, trends and developments; changes in client and consumer behaviour and demand; exposure to counterparty risk; the ability to access sufficient sources of capital, liquidity and funding when required; changes to the Group's credit ratings; fluctuations in interest rates, inflation, exchange rates, stock markets and currencies; volatility in credit markets; volatility in the price of the Group's securities; natural pandemic and other disasters; risks concerning borrower and counterparty credit quality; risks affecting defined benefit pension schemes; changes in laws, regulations, practices and accounting standards or taxation; changes to regulatory capital or liquidity requirements and similar contingencies; the policies and actions of governmental or regulatory authorities or courts together with any resulting impact on the future structure of the Group; risks associated with the Group's compliance with a wide range of laws and regulations; assessment related to resolution planning requirements; risks related to regulatory actions which may be taken in the event of a bank or Group failure; exposure to legal, regulatory or competition proceedings, investigations or complaints; failure to comply with anti-money laundering, counter terrorist financing, anti-bribery and sanctions regulations; failure to prevent or detect any illegal or improper activities; operational risks including risks as a result of the failure of third party suppliers; conduct risk; risks related to new and emerging technologies, including artificial intelligence; technological changes and risks to the security of IT and operational infrastructure, systems, data and information resulting from increased threat of cyber and other attacks; technological failure; inadequate or failed internal or external processes or systems; risks relating to ESG matters, such as climate change (and achieving climate change ambitions) and decarbonisation, including the Group's ability along with the government and other stakeholders to measure, manage and mitigate the impacts of climate change effectively, and human rights issues; the impact of competitive conditions; failure to attract, retain and develop high calibre talent; the ability to achieve strategic objectives; the ability to derive cost savings and other benefits including, but without limitation, as a result of any acquisitions, disposals and other strategic transactions; inability to capture accurately the expected value from acquisitions; and assumptions and estimates that form the basis of the Group's financial statements. A number of these influences and factors are beyond the Group's control. Please refer to the latest Annual Report on Form 20-F filed by Lloyds Banking Group plc with the US Securities and Exchange Commission (the SEC), which is available on the SEC's website at https://www.sec.gov, for a discussion of certain factors and risks. Lloyds Banking Group plc may also make or disclose written and/or oral forward-looking statements in other written materials and in oral statements made by the directors, officers or employees of Lloyds Banking Group plc to third parties, including financial analysts. Except as required by any applicable law or regulation, the forward-looking statements contained in this document are made as of today's date, and the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document whether as a result of new information, future events or otherwise. The information, statements and opinions contained in this document do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.
CONTACTSFor further information please contact:
INVESTORS AND ANALYSTS
Douglas Radcliffe
Group Investor Relations Director douglas.radcliffe@lloydsbanking.com
Rohith Chandra-Rajan Director of Investor Relations
rohith.chandra-rajan@lloydsbanking.com
Nora Thoden
Director of Investor Relations - ESG nora.thoden@lloydsbanking.com
Tom Grantham
Investor Relations Senior Manager thomas.grantham@lloydsbanking.com
Stefan Tutino
Investor Relations Senior Manager stefan.tutino@lloydsbanking.com
CORPORATE AFFAIRS
Matt Smith
Head of Media Relations matt.smith@lloydsbanking.com
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