Vanquis Banking : Publication of Offering Circular

About this update from Vanquis Banking Group Plc

IMPORTANT NOTICE THE OFFERING CIRCULAR IS AVAILABLE ONLY TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933 (AS AMENDED, THE " SECURITIES ACT ") (" REGULATION S ")) AND ARE OUTSIDE THE UNITED STATES. IMPORTANT : You must read the following disclaimer before continuing. The following applies to the offering circular following this page (the " Offering Circular "), whether received by e-mail, accessed from an internet page or received as a result of any other electronic transmission, and you are therefore advised to read this carefully before reading, accessing or making any other use of the Offering Circular. In accessing the Offering Circular, you agree to be bound by the following terms and conditions, including any modifications to them from time to time, each time you receive any information from: (i) Vanquis Banking Group plc (the " Issuer "); or (ii) Morgan Stanley & Co. International plc (the " Sole Bookrunner ") as a result of such access. The Offering Circular has been prepared solely in connection with the proposed offering of the securities described therein to certain institutional and professional investors. NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE OR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES DESCRIBED IN THE OFFERING CIRCULAR HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD DIRECTLY OR INDIRECTLY WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS DEFINED UNDER REGULATION S) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS. THE OFFERING CIRCULAR MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER. THE OFFERING CIRCULAR MAY ONLY BE DISTRIBUTED OUTSIDE THE UNITED STATES TO PERSONS THAT ARE NOT U.S. PERSONS, AS DEFINED IN REGULATION S. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. The Offering Circular is being distributed only to and directed only at: (i) persons who are outside the United Kingdom, (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the " Order "), as amended, or (iii) persons in the United Kingdom in circumstances where section 21(1) of the Financial Services and Markets Act 2000, as amended, does not apply (all such persons together being referred to as " relevant persons "). The Offering Circular is only directed at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which the Offering Circular relates is available only to, and will be engaged in only with, relevant persons (and subject to the other restrictions referred to therein). Prohibition of Sales to EEA Retail Investors - The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, " EU MiFID II ") or; (ii) a customer within the meaning of Directive 2016/97/EU, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of EU MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (the " EU PRIIPs Regulation ") for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation. Prohibition of Sales to UK Retail Investors - The Notes are not intended to be offered, sold, distributed or otherwise made available to and should not be offered, sold, distributed or otherwise made available to any retail investor in the United Kingdom (" UK "). For these purposes, a retail investor means a person who is not a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (" UK MiFIR "). Consequently no disclosure document required by the FCA Product Disclosure Sourcebook (" DISC ") for offering, selling or distributing the Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering, selling or distributing the Notes or otherwise making them available to any retail investor in the UK may be unlawful under the DISC and the Consumer Composite Investments (Designated Activities) Regulations 2024. UK MiFIR product governance / Professional investors and ECPs only target market - Manufacturer target market (UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). Confirmation of your Representation : In order to be eligible to view the Offering Circular or make an investment decision with respect to the securities described therein, you must be outside the United States and not be, or be acting on behalf of, a U.S. person (within the meaning of Regulation S). The Offering Circular is being sent at your request and by accessing, reading or making any other use of the Offering Circular, you shall be deemed to have represented and warranted to the Issuer and the Sole Bookrunner that (1) you understand and agree to the terms set out herein; (2) you are outside the United States and are not a U.S. person (within the meaning of Regulation S), or acting for the account or benefit of a U.S. person and to the extent you purchase any Notes, you will be doing so pursuant to Regulation S, and that any email address to which, pursuant to your request, the Offering Circular has been delivered by electronic transmission is not located in the United States for the purposes of Regulation S; (3) if you are a person in the UK, then (a) you are a professional client within the meaning of point (8) of Article 2(1) of UK MiFIR, and (b) you are a person (i) who has professional experience in matters relating to investments within the meaning of Article 19(5) of the Order, or (ii) to whom the Offering Circular may otherwise lawfully be communicated in accordance with the Order; (4) you are not a retail investor for the purposes of the EU PRIIPs Regulation; (5) you consent to delivery by electronic transmission of the Offering Circular; (6) you will not transmit the Offering Circular (or any copy of them or part thereof) or disclose, whether orally or in writing, any of its contents to any other person except with the consent of the Sole Bookrunner; and (7) you acknowledge that you will make your own assessment regarding any legal, taxation or other economic considerations with respect to your decision to subscribe for or purchase any of the securities. The Offering Circular has been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently none of the Issuer or the Sole Bookrunner or any of their respective subsidiaries, nor any person who controls any of them or any director, officer, employee or agent of any of them, or any affiliate of any such person, accepts any liability or responsibility whatsoever in respect of any difference between the Offering Circular distributed to you in electronic format and the hard copy version available to you on request from the Sole Bookrunner. If you receive this document by e-mail, you should not reply by e-mail to this communication. Any reply e-mail communications, including those you generate by using the "Reply" function on your e-mail software, will be ignored or rejected. If you receive this document by email, your use of this e-mail is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature. The distribution of the Offering Circular (or the final form) in certain jurisdictions may be restricted by law. Persons into whose possession the Offering Circular come are required by the Issuer and the Sole Bookrunner to inform themselves about, and to observe, any such restrictions. You are reminded that the Offering Circular has been delivered to you on the basis that you are a person into whose possession the Offering Circular may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not, nor are you authorised to, deliver the Offering Circular to any other person. You may not transmit the Offering Circular (or any copy of it or part thereof) or disclose, whether orally or in writing, any of its contents to any other person except with the consent of the Sole Bookrunner. The materials relating to the offering do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that the offering be made by a licensed broker or dealer and the Sole Bookrunner or any affiliate of the Sole Bookrunner is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be made by such Sole Bookrunner or such affiliate on behalf of the Issuer in such jurisdiction. No representation or warranty, expressed or implied, is made or given by or on behalf of the Sole Bookrunner, the Trustee, the Principal Paying Agent, the Agent Bank, the Registrar and Transfer Agent, or any person who controls any of them, or any director, officer, employee or agent of any of them, or any affiliate of any such person, as to the accuracy, completeness or fairness of the information or opinions contained in the Offering Circular and such persons do not accept responsibility or liability for any such information or opinions. VANQUIS BANKING GROUP PLC (incorporated with limited liability under the laws of England and Wales) £100,000,000 8.250 per cent. Fixed Rate Reset Subordinated Callable Notes due 2037 The issue price of the £100,000,000 8.250 per cent. Fixed Rate Reset Subordinated Callable Notes due 2037 (the " Notes ") of Vanquis Banking Group plc (the " Issuer " or the " Company ") is 100.000 per cent. of their principal amount. From (and including) 21 May 2026 (the " Issue Date ") to (but excluding) 21 November 2032 (the " Reset Date "), the Notes bear interest at the rate of 8.250 per cent. per annum. From (and including) the Reset Date to (but excluding) the Maturity Date (as defined below), the Notes will bear interest at a rate which is the aggregate of the margin of 3.649 per cent. per annum and the Reference Bond Rate, converted to a semi-annual rate in accordance with market convention as instructed by the Issuer (rounded to three decimal places, with 0.0005 rounded down), as provided in Condition 5(c) ( Interest - Reset Interest Rate ). The interest rate following the Reset Date may be less than the initial interest rate . Interest shall be payable semi-annually in arrear on 21 May and 21 November of each year (each an " Interest Payment Date "). Payments on the Notes shall be made in pounds sterling without deduction for or on account of taxes imposed or levied by the United Kingdom or any political subdivision or any authority thereof or therein having power to tax, except in the circumstances described under Condition 8 ( Taxation ). The rights and claims of the Holders in respect of or arising from the Notes will be subordinated to the claims of Senior Creditors. Unless previously redeemed, or purchased and cancelled, the Notes will be redeemed at their principal amount on 21 November 2037 (the " Maturity Date "). Subject to certain conditions set out in Condition 7 ( Redemption and Purchase; Substitution and Variation ), the Notes may be redeemed at the option of the Issuer in whole but not in part at their principal amount together with any Accrued Interest (as defined herein) on any date from (and including) 21 August 2032 to (and including) the Reset Date. In addition, and subject to certain conditions set out in Condition 7 ( Redemption and Purchase; Substitution and Variation ), the Notes may be redeemed, substituted or varied at any time upon the occurrence of certain tax events due to changes to law or if as a result of any amendment to, or change in, the regulatory classification of the Notes the whole or any part of the principal amount of the Notes are, or are likely to be at any time, excluded from, or cease to count towards, the Regulatory Group's Tier 2 Capital (as defined herein) or at any time if the outstanding aggregate principal amount of the Notes is equal to or less than the Clean-up Call Threshold, all as more particularly provided in Condition 7 ( Redemption and Purchase; Substitution and Variation ). Application has been made for the Notes to be admitted to trading on the International Securities Market (the " ISM ") of the London Stock Exchange plc (the " LSE ") on or about the Issue Date. The Notes are a new issue of securities and have no established trading market. There can be no assurance that an active trading market in the Notes will develop, and any trading market that does develop may not be liquid. The ISM is not a regulated market for the purposes of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the " EUWA ") (" UK MiFIR "). The ISM is a market designated for qualified investors (as prescribed in Regulation 16 of the Public Offers and Admissions to Trading Regulations 2024 (SI 2024/105) (the "POATRs")). The LSE, as a Recognised Investment Exchange does not make assessments of investor eligibility. Given that under Regulation 16 of the POATRs, only qualified investors are permitted to trade on the ISM and no qualified investor is permitted to trade on behalf of persons who are not themselves qualified investors, financial intermediaries acting for investors are responsible for ensuring that only investors who are qualified investors as prescribed by Regulation 16 of the POATRs are permitted to trade on the ISM. Securities admitted to trading on the ISM are not admitted to the Official List of the Financial Conduct Authority (the "FCA"). The LSE has not approved or verified the contents of this Offering Circular. This Offering Circular does not comprise a prospectus for the purposes of the POATRs. This Offering Circular comprises admission particulars in accordance with the ISM Rulebook. The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the " Securities Act "). The Notes may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Notes will be in registered form in denominations of £100,000 and integral multiples of £1,000 in excess thereof. The Notes will be represented by a global registered certificate (the " Global Certificate ") registered in the name of a nominee for, and deposited with, the common depositary for Euroclear Bank SA/NV (" Euroclear ") and Clearstream Banking, S.A. (" Clearstream, Luxembourg "). Certificates in definitive certificated form (" Individual Certificates ") evidencing holdings of Notes will only be available in certain limited circumstances. See " Summary of Provisions relating to the Notes in Global Form ". An investment in the Notes involves risk. Prospective investors in the Notes are recommended to read this Offering Circular, including the section entitled " Risk Factors " carefully. Investors should reach their own investment decision about the Notes only after consultation with their own financial and legal advisers about the risks associated with an investment in the Notes and the suitability of investing in the Notes in light of the particular characteristics and terms of the Notes, which are complex in structure and operation, and in light of each investor's particular financial circumstances. The Issuer has been assigned a long-term issuer default rating of "BB-" by Fitch Ratings Limited as of the date of this Offering Circular. The Notes are unrated as of the date of this Offering Circular. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. Sole Bookrunner Morgan Stanley Dated: 19 May 2026 CONTENTS Page IMPORTANT NOTICES 1 IMPORTANT INFORMATION - FORWARD-LOOKING STATEMENTS 5 INFORMATION INCORPORATED BY REFERENCE 6 OVERVIEW 7 RISK FACTORS 11 TERMS AND CONDITIONS OF THE NOTES 45 SUMMARY OF PROVISIONS RELATING TO THE NOTES IN GLOBAL FORM 68 USE OF PROCEEDS 71 BUSINESS DESCRIPTION 72 CAPITAL AND LIQUIDITY 85 TAXATION 88 SUBSCRIPTION AND SALE 90 GENERAL INFORMATION 93 IMPORTANT NOTICES The Issuer accepts responsibility for the information contained in this Offering Circular and declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Offering Circular to the best of its knowledge is in accordance with the facts and contains no omission likely to affect its import. This Offering Circular is to be read in conjunction with all information which is incorporated by reference herein. This Offering Circular shall be read and construed on the basis that such information is incorporated by reference in, and forms part of, this Offering Circular. The Sole Bookrunner and the Trustee have not independently verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Sole Bookrunner or the Trustee or any of their respective affiliates as to the accuracy or completeness of the information contained or incorporated in this Offering Circular or any other information provided by the Issuer in connection thereto. None of the Sole Bookrunner, the Trustee or any of their respective affiliates accepts any liability in relation to the information contained or incorporated by reference in this Offering Circular or any other information provided by the Issuer in connection thereto. The statements made in this paragraph are made without prejudice to the responsibility of the Issuer under this Offering Circular. To the fullest extent permitted by law, neither the Sole Bookrunner nor the Trustee nor any of their respective affiliates accepts any responsibility for the contents of this Offering Circular, or for any other statement made, or purported to be made, by the Sole Bookrunner or the Trustee or any of their respective affiliates or on their behalf in connection with the Issuer or the issue and offering of the Notes. The Sole Bookrunner, the Trustee and their respective affiliates disclaims all and any liability whether arising in tort or contract or otherwise which it might otherwise have in respect of this Offering Circular or any such statement. No person is or has been authorised by the Issuer, the Sole Bookrunner or the Trustee to give any information or make any representation regarding the Issuer or the Notes. Any such representation or information should not be relied upon as having been authorised by the Issuer. Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Note shall in any circumstances create any implication that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the Issuer since the date of this Offering Circular. Neither this Offering Circular nor any other information supplied in connection with this Offering Circular or the Notes (a) is intended to provide the basis of any credit or other evaluation and (b) should be considered as a recommendation (or a statement of opinion) by the Issuer or the Sole Bookrunner that any recipient of this Offering Circular or any other information supplied in connection with this Offering Circular or the Notes should purchase the Notes. Each investor contemplating purchasing the Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Sole Bookrunner to subscribe for or purchase, any Notes. The distribution of this Offering Circular and the offering, sale and delivery of Notes in certain jurisdictions may be restricted by law. None of the Issuer, the Sole Bookrunner, the Trustee nor any of their respective affiliates represent that this Offering Circular may be lawfully distributed, or that the Notes may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer, the Sole Bookrunner or the Trustee which is intended to permit a public offering of the Notes or distribution of this Offering Circular in any jurisdiction where action for that purpose is required. Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this Offering Circular nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Offering Circular or the Notes may come must inform themselves about, and observe, any such restrictions on the distribution of this Offering Circular and the offering and sale of the Notes. For a description of certain restrictions on offers and sales of the Notes and on distribution of this Offering Circular, see " Subscription and Sale ". The Notes have not been and will not be registered under the Securities Act. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to U.S. persons. The Financial Services Compensation Scheme (the " FSCS ") established under the Financial Services and Markets Act 2000 (as amended, the " FSMA ") is the statutory fund of last resort for customers of authorised financial services firms, paying compensation to customers if the firm is unable, or likely to be unable, to pay certain claims (including in respect of deposits and insurance policies) made against it (together, " Protected Liabilities "). The Notes will not, however, be Protected Liabilities under the FSCS and, moreover, are not guaranteed or insured by any government, government agency or compensation scheme of the United Kingdom or any other jurisdiction. The Notes form part of the regulatory capital of the Issuer. Banks and their holding companies are required to hold regulatory capital to absorb losses (before depositors and other senior creditors suffer losses), including during periods of financial stress. As a provider of capital to the Issuer, an investor in the Notes should be prepared to suffer losses on its investment if, in particular, the Issuer and/or the financial sector generally approaches or enters into a period of financial stress. Such losses could be manifested in a number of ways, including (without limitation) that the market price of the Notes may fall significantly, the United Kingdom authorities could take action under the Banking Act 2009 as amended from time to time (the " Banking Act ") (or similar future legislation), or the Issuer could enter into an insolvent winding-up, with the result that investors in the Notes could lose all or substantially all of their initial investment in the Notes. Since the Notes are not protected by the FSCS, the FSCS will not pay any compensation to an investor under these, or any other, circumstances. Accordingly, an investor in the Notes may lose some, or the entire amount of, its investment in the Notes. PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of EU MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97 (the " Insurance Distribution Directive "), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of EU MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (the " EU PRIIPs Regulation ") for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation. PROHIBITION OF SALES TO UK RETAIL INVESTORS - The Notes are not intended to be offered, sold, distributed or otherwise made available to and should not be offered, sold, distributed or otherwise made available to any retail investor in the United Kingdom (" UK "). For these purposes, a retail investor means a person who is not a professional client, as defined in point (8) of Article 2(1) of UK MiFIR. Consequently no disclosure document required by the FCA Product Disclosure Sourcebook (" DISC ") for offering, selling or distributing the Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering, selling or distributing the Notes or otherwise making them available to any retail investor in the UK may be unlawful under the DISC and the Consumer Composite Investments (Designated Activities) Regulations 2024. UK MiFIR product governance / Professional investors and ECPs only target market - Solely for the purposes of the manufacturer's product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in UK MiFIR; and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a " distributor ") should take into consideration the manufacturer's target assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the manufacturer's target market assessment) and determining appropriate distribution channels. Alternative Performance Measures In addition to the financial performance measures established by International Financial Reporting Standards (" IFRS "), this Offering Circular contains certain financial measures that are presented for the purpose of assisting securities analysts, investors and other interested parties in understanding the Group's (as defined herein) financial performance. The relevant metrics are identified as Alternative Performance Measures (" APMs ") for the purposes of the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority. Such measures should not be considered as a substitute for those required by IFRS. The definition of these non-statutory measures may not be comparable to similarly titled measures reported by other companies. Investors should refer to pages 196 to 198 of the 2025 Group Financial Statements for an explanation of the relevance of such APMs and their definitions. In this Offering Circular, the " Group " refers to the Issuer and its subsidiaries and its subsidiary undertakings from time to time. The Notes are complex financial instruments The Notes are complex financial instruments and such instruments may be purchased by investors as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. Each potential investor in the Notes should determine the suitability of such investment in light of its own circumstances. In particular, each potential investor should: have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained or incorporated by reference in this Offering Circular; have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact the Notes will have on its overall investment portfolio; have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including where the potential investor's currency is not pounds sterling; understand thoroughly the terms of the Notes, including the possibility that the Notes may become subject to write-down or conversion if the resolution powers are exercised; be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks; and understand the accounting, legal, regulatory and tax implications of a purchase, and the holding and disposal of an interest in the Notes. The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent: (i) the Notes are legal investments for it; (ii) the Notes can be used as collateral for various types of borrowing; and (iii) other restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of the Notes under any applicable risk-based capital or similar rules. Prior to making an investment decision, potential investors should consider carefully, in light of their own financial circumstances and investment objectives, all the information contained in this Offering Circular or incorporated by reference herein. Certain figures included in this Offering Circular have been subject to rounding adjustments; accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. Stabilisation In connection with the issue of the Notes, Morgan Stanley & Co. International plc (the " Stabilisation Manager ") (or persons acting on behalf of the Stabilisation Manager) may over allot Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, stabilisation may not necessarily occur. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may cease at any time, but it must end no later than the earlier of 30 days after the issue date of the Notes and 60 days after the date of the allotment of the Notes. Any stabilisation action or over-allotment must be conducted by the relevant Stabilisation Manager (or person(s) acting on behalf of any Stabilisation Manager) in accordance with all applicable laws and rules. IMPORTANT INFORMATION - FORWARD-LOOKING STATEMENTS Some of the statements in this Offering Circular include forward-looking statements which reflect the Issuer's current views with respect to financial performance, business strategy, plans and objectives of management for future operations (including development plans) relating to the business of the Issuer and the Group. These forward-looking statements relate to the Group and the sectors and industries in which the Group operate. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "estimates", "will", "targets", "aims", "may", "should", "would", "could", "continue", "budget", "schedule" and similar statements of a future or forward-looking nature identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Issuer, are inherently subject to significant business, economic and competitive uncertainties and contingencies. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the Group's actual results or industry results to differ materially from those indicated in these statements. These factors include, but are not limited to, those described in " Risk Factors ", which should be read in conjunction with the other cautionary statements that are included in this Offering Circular. Investors are cautioned that forward-looking statements are not guarantees of future performance. Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this Offering Circular speak only as of the date of this Offering Circular, reflect the Issuer's current belief with respect to future events and are subject to risk relating to future events and other risks, uncertainties and assumptions relating to the Group's, operations, results of operations, growth strategy, capital and leverage ratios and liquidity. Investors should specifically consider the factors identified in this Offering Circular which could cause actual results to differ before making an investment decision. All of the forward-looking statements made in this Offering Circular, including the documents incorporated by reference herein, are qualified by these cautionary statements. Specific reference is made to " Risk Factors " and " Business Description " below. Subject to any obligations under applicable law or regulation, the Issuer undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, events or circumstances or otherwise. All subsequent written and oral forward-looking statements attributable to the Group, or individuals acting on behalf of the Group are expressly qualified in their entirety by this section. INFORMATION INCORPORATED BY REFERENCE This section contains a description of the information that is incorporated by reference in this Offering Circular. This Offering Circular should be read and construed in conjunction with the following information: the auditor's reports and the audited consolidated annual financial statements of the Issuer for the financial year ended 31 December 2025 (the " 2025 Group Financial Statements ") appearing on pages 129 to 195 of the Issuer's Annual Report and Financial Statements 2025 available at https://www.vanquis.com/wp-content/uploads/2026/02/Vanquis-Banking-Group-plc-Annual-Report-and-Accounts-2025.pdf ; the sections entitled " Headlines " on page 1, " Key Performance Indicators " (excluding each section commencing with " Guidance ") on pages 18 to 20, " Financial review " (excluding the seventh paragraph in the second column of page 44) on pages 44 to 46, " Operating review " on pages 47 to 51 and " Alternative Performance Measures " on pages 196 to 198, in each case of the Issuer's Annual Report and Financial Statements 2025 available at https://www.vanquis.com/wp-content/uploads/2026/02/Vanquis-Banking-Group-plc-Annual-Report-and-Accounts-2025.pdf ; the announcement dated 11 July 2025 titled "Vanquis Banking Group Reporting Changes" available at https://www.vanquis.com/wp-content/uploads/2025/07/Vanquis-Banking-Group-2024-Re-presentation-Document.pdf ; the auditor's reports and the audited consolidated annual financial statements of the Issuer for the financial year ended 31 December 2024 (the "2024 Group Financial Statements") appearing on pages 122 to 196 of the Issuer's Annual Report and Financial Statements 2024 available at https://www.vanquis.com/wp-content/uploads/2025/05/14-Mar-2025-Annual-Report-and-Accounts-2024.pdf ; and the Pillar 3 Disclosures of the Issuer for the financial year ended 31 December 2025 (the " Pillar 3 Disclosures") available at https://www.vanquis.com/wp-content/uploads/2026/02/DEC25_VANQ_Pillar-3-Disclosure_Annual_FINAL.pdf . Such information shall be incorporated in, and form part of, this Offering Circular, save that any statement contained in the information which is incorporated by reference herein shall be modified or superseded for the purpose of this Offering Circular to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Offering Circular. Copies of the documents listed above may be obtained (without charge) during usual business hours at the registered office of the Issuer and will also be available to view (free of charge) on the website of the Issuer ( https://www.vanquis.com/investors/ ). Those parts of the documents specified above which are not specifically incorporated by reference in this Offering Circular should not form part of this Offering Circular and are either not relevant for prospective investors in the Notes or the relevant information is included elsewhere in this Offering Circular. OVERVIEW This overview must be read as an introduction to this Offering Circular and any decision to invest in the Notes should be based on a consideration of this Offering Circular as a whole, including the information incorporated by reference herein. This overview refers to certain provisions of the Terms and Conditions of the Notes (the " Conditions ") and is qualified by the more detailed information contained elsewhere in this Offering Circular. Words and expressions defined in the Conditions or elsewhere in this Offering Circular have the same meanings in this overview. Investing in the Notes involves significant risk. For a discussion of certain risks that should be considered in connection with an investment in the Notes, see "Risk Factors" beginning on page 11 of this Offering Circular. Issuer: Vanquis Banking Group plc Sole Bookrunner: Morgan Stanley & Co. International plc Trustee: M&G Trustee Company Limited Registrar and Transfer Agent: Principal Paying Agent and Agent Bank: The Bank of New York Mellon SA/NV, Dublin Branch The Bank of New York Mellon, London Branch Notes: £100,000,000 8.250 per cent. Fixed Rate Reset Subordinated Callable Notes due 2037 Issue Price: 100.000 per cent. of the principal amount of the Notes Issue Date: 21 May 2026 Use of Proceeds: The net proceeds of the issue of the Notes will be used for the general corporate purposes of the Group including the financing of the repurchase of certain of the Issuer's outstanding £200,000,000 Fixed Rate Reset Subordinated Tier 2 Notes due 2032 (ISIN: XS2397348801) (the " Existing Notes "). On 14 May 2026, the Issuer announced an invitation to holders of its Existing Notes to tender their Existing Notes (up to a maximum acceptance amount) for purchase by the Issuer for cash. The offering of the Notes is not conditional on any minimum amount of the Existing Notes being repurchased pursuant to such tender offer. Status of the Notes: The Notes will constitute direct, unsecured and subordinated obligations of the Issuer, ranking pari passu without any preference among themselves. In the event of a Winding Up or Qualifying Procedure, the rights and claims of the Holders in respect of or arising from the Notes (including any damages (if payable)) will be subordinated to the claims of Senior Creditors. Pursuant to the Insolvency Act, the Notes will constitute tertiary non-preferential debts of the Issuer and therefore both ordinary non-preferential debts and secondary non-preferential debts will rank in priority to the Notes. The terms "ordinary non-preferential debt", "secondary-non preferential debt" and "tertiary non-preferential debt" shall have the meanings given to each of them in the Insolvency Act. Subordination: In the event of the Winding Up or a Qualifying Procedure, the rights and claims of the Holders and the Trustee (on behalf of the Holders but not the rights and claims of the Trustee in its personal capacity under the Trust Deed) against the Issuer in respect of or arising under the Notes and the Trust Deed (including any amounts attributable to the Notes and the Trust Deed and any damages awarded for breach of any obligations (if payable)) will (i) be subordinated in the manner provided in the Conditions and the Trust Deed to the claims of all Senior Creditors; (ii) rank at least pari passu with the claims of Parity Creditors; and (iii) rank in priority to the claims of Junior Creditors and, accordingly, no amount shall be payable to the Holders in respect of the Notes until the claims of all Senior Creditors admitted in the Winding Up or Qualifying Procedure have been satisfied. " Senior Creditors " means creditors of the Issuer whose claims are admitted to proof in a Winding Up or Qualifying Procedure and (i) who are unsubordinated creditors of the Issuer; (ii) who are creditors in respect of any secondary non-preferential debts; or (iii) who are subordinated creditors of the Issuer (whether in the event of a Winding Up or Qualifying Procedure or otherwise) other than (x) those whose claims by law rank, or by their terms are expressed to rank, pari passu with or junior to the claims of the Holders or (y) those who are Parity Creditors or Junior Creditors. No set-off: Subject to applicable law, no Holder may exercise or claim or plead any right of set-off, compensation, retention or netting in respect of any amount owed to it by the Issuer in respect of, or arising under or in connection with, the Notes or the Trust Deed and each Holder will, by virtue of their holding of any Note, be deemed, to the fullest extent permitted by applicable law, to have waived all such rights of set-off, compensation, retention or netting. Interest: The Notes shall bear interest on their outstanding principal amount from (and including) the Issue Date to (but excluding) the Reset Date at a rate of 8.250 per cent. per annum. From (and including) the Reset Date to (but excluding) the Maturity Date, the Notes will bear interest at a rate which is the aggregate of the margin of 3.649 per cent. and the Reference Bond Rate, converted to a semi-annual rate in accordance with market convention as instructed by the Issuer (rounded to three decimal places, with 0.0005 rounded down), as determined by the Agent Bank on the date falling two Business Days prior to the Reset Date. Interest shall be payable semi-annually in arrear on 21 May and 21 November of each year. Maturity Date: Unless previously redeemed, or purchased and cancelled, the Notes will be redeemed at their principal amount on 21 November 2037. The Holders will have no right to require the Issuer to redeem or purchase the Notes at any time. Optional Redemption: Subject to the Issuer obtaining PRA Permission (and such PRA Permission not having been revoked by the relevant date of such redemption) and compliance with the Regulatory Preconditions, the Notes may be redeemed at the option of the Issuer on any date from (and including) 21 August 2032 to (and including) the Reset Date, in whole but not in part, at their principal amount together with any Accrued Interest. Tax Redemption: Subject to the Issuer obtaining PRA Permission (and such PRA Permission not having been revoked by the relevant date of such redemption) and compliance with the Regulatory Preconditions, if at any time a Tax Event occurs, the Issuer may redeem the Notes in whole, but not in part, at any time at their principal amount, together with any Capital Disqualification Event Redemption: Accrued Interest, as more fully provided in Condition 7 ( Redemption and Purchase; Substitution and Variation ). Subject to the Issuer obtaining PRA Permission (and such PRA Permission not having been revoked by the relevant date of such redemption) and compliance with the Regulatory Preconditions, if at any time a Capital Disqualification Event occurs, the Issuer may redeem the Notes in whole, but not in part, at their principal amount together with any Accrued Interest, as more fully provided in Condition 7 ( Redemption and Purchase; Substitution and Variation ). Clean-up Call: Subject to the Issuer obtaining PRA Permission (and such PRA Permission not having been revoked by the relevant date of such redemption) and compliance with the Regulatory Preconditions, if at any time the outstanding aggregate principal amount of the Notes is equal to or less than the Clean-up Call Threshold, the Issuer may redeem the Notes in whole, but not in part, at their principal amount together with any Accrued Interest, as more fully provided in Condition 7 ( Redemption and Purchase; Substitution and Variation ). Purchases: The Issuer or any of its Subsidiaries may, at its option but subject to PRA Permission (and such PRA Permission not having been revoked by the relevant date of such purchase) and compliance with the Regulatory Preconditions, purchase or otherwise acquire any of the outstanding Notes at any price in the open market or otherwise at any time in accordance with the then prevailing Capital Regulations. Substitution and Variation: If at any time a Capital Disqualification Event or a Tax Event occurs, the Issuer may, subject to Condition 7(h) ( Redemption and Purchase; Substitution and Variation - Conditions to redemption, purchase, substitution and variation ) and having given not less than 15 nor more than 30 days' notice to the Trustee, the Agents and the Holders, but without any requirement for the consent or approval of the Holders, at any time either substitute all (but not some only) of the Notes for, or vary the terms of the Notes and/or the terms of the Trust Deed so that they remain or, as appropriate, become, Qualifying Tier 2 Notes, as more fully provided in Condition 7 ( Redemption and Purchase; Substitution and Variation ). Defaults and Enforcement: The remedies under the Notes will be more limited than those typically available to unsubordinated creditors. The sole remedy against the Issuer available for recovery of amounts owing in respect of any non-payment of any amount that has become due and payable under the Notes will be, subject to certain conditions, for the Trustee to institute proceedings for the winding-up of the Issuer in England (or such other jurisdiction in which the Issuer may be organised) (but not elsewhere) and/or to prove in any Winding Up or Qualifying Procedure, but may take no other action in respect of such default. The Notes will only be capable of being accelerated if a Winding Up Event occurs. The exercise of the UK Bail-in Power with respect to the Issuer and/or the Notes shall not give rise to any acceleration rights under the Notes. Taxation: All payments in respect of the Notes by or on behalf of the Issuer shall be made free and clear of, and without withholding or deduction for or on account of, any Taxes imposed, levied, collected, withheld or assessed by or on behalf of the Relevant Jurisdiction, unless the withholding or deduction of such Taxes is required by law. In that event the Issuer shall pay such additional amounts in respect of any interest on the Notes but not, for the avoidance of doubt, in respect of the payment of any principal in respect of the Notes, as will result in receipt by the Holders after such withholding or deduction of such amounts as would have been received by them had no such withholding or deduction been required, subject to certain exceptions as described in Condition 8 ( Taxation ). Substitution of the Issuer: The Trustee may, without the consent of the Holders but subject to PRA Permission (and such PRA Permission not having been revoked by the relevant date of such substitution) and other conditions set out in Condition 13 ( Meetings of Holders, Modification, Waivers and Substitution - Substitution of the Issuer ), agree with the Issuer the substitution in place of the Issuer (or of any previous substitute) as principal debtor under the Notes of any Subsidiary of the Issuer. Governing Law: The Notes, the Trust Deed and the Agency Agreement, and any non- contractual obligations arising out of or in connection with them will be governed by English law. Agreement with respect to the exercise of the UK Bailin Power: Applicable. See Condition 18 ( Recognition of UK Bail-in Power ) for further detail. Form and Denomination: The Notes will be issued in registered form in denominations of £100,000 and integral multiples of £1,000 in excess thereof. The Notes will be represented by a Global Certificate registered in the name of a nominee for, and deposited with, the common depositary for Euroclear and Clearstream, Luxembourg (together, the " Clearing Systems "). Individual Certificates in definitive form evidencing holdings of Notes will only be available in certain limited circumstances - see " Summary of Provisions relating to the Notes in Global Form ". Clearing Systems: Euroclear and Clearstream, Luxembourg ISIN: XS3331518715 Common Code: 333151871 Admission to Trading: Application has been made for the Notes to be admitted to trading on the ISM. Issuer Legal Entity Identifier (LEI): 213800U93SZC44VXN635 Rating: The Notes are unrated as of the date of this Offering Circular. Selling Restrictions: There are restrictions on the offer, sale and transfer of the Notes in the EEA, Switzerland, Singapore, Japan, the Republic of Italy, the United Kingdom and the United States. In addition, the Notes are not intended to be offered or sold and should not be offered or sold to any investor in the Republic of Italy . See the section herein entitled " Subscription and Sale ". RISK FACTORS Any investment in the Notes is subject to a number of risks. Prior to investing in the Notes, prospective investors should consider carefully risk factors associated with any investment in the Notes, the business of the Group and the industry(ies) in which it operates together with all other information contained in this Offering Circular, including, in particular the risk factors described below. Words and expressions defined in the "Terms and Conditions of the Notes" below or elsewhere in this Offering Circular have the same meanings in this section. Prospective investors should note that the risks relating to the Group, the macro-economic environment in which it operates and the Notes are the risks that the Issuer believes to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Notes. However, as the risks which the Group faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider among other things, the additional risks and uncertainties described below. The following is not an exhaustive list or explanation of all risks which investors may face when making an investment in the Notes and should be used as guidance only. Additional risks and uncertainties relating to the Group that are not currently known to the Issuer or that it currently deems immaterial, may individually or cumulatively also have a material adverse effect on the business, prospects, results of operations and/or financial position of the Group and, if any such risk should occur, the price of the Notes may decline and investors could lose all or part of their investment. Investors should consider carefully whether an investment in the Notes is suitable for them in light of the information in this Offering Circular and their personal circumstances. RISKS RELATING TO THE GROUP AND ITS BUSINESS Risks related to Macro-economic Conditions Negative economic developments and conditions in the markets in which the Group operates may adversely affect its business and results of operations As the Group derives all of its revenues from customers based or resident in the UK, it is directly and indirectly subject to the inherent risks arising from the general economic conditions of the UK economy, as well as other major economies that impact it. Due to numerous macro-economic factors (including the war in Ukraine, the war in the Middle East and the recovery from the Covid-19 pandemic), the cost of living in the UK has increased materially in recent years. Thus, disposable income among the UK population has been, on the whole, falling. Furthermore, the impact of inflation is typically higher amongst less affluent adults in the UK as a greater proportion of their spending is required for essentials (for example, food and energy), the prices of which have recently been rising faster than the general inflation rate. Thus, these adults typically do not have the capacity to reduce their expenses due to the vast proportion of their expenditure being on essentials. The Bank of England responded to inflation levels by increasing the base rate multiple times since December 2021, which impacted consumers on mortgages and also impacted those renting (due to landlords typically passing on rate increases). Although the headline rate of inflation has fallen in recent months and the Bank of England in August 2024 began cutting the base rate, the path of the Bank of England's base rate is uncertain, as is the impact that changes to date (or any future increases) could have on economic conditions. The impact on consumers of materially higher nominal prices will undoubtedly take time to unwind. The Group is exposed to the effects of prevailing levels of unemployment, inflation, consumers' disposable incomes and interest rates. Although the UK economy began returning to growth in 2024, the measures taken by the current and previous governments have not yet resulted in consistent economic growth. The condition of the UK economy could impact the Group's operations in a number of ways: (i) volatility in the markets in which it operates causing potential reduction in new business lending volumes and balances growth; (ii) the financial health of consumers, and the operations of the Group's counterparties, could be affected and as a result they may default on their obligations due to the Group (such as repayments); (iii) the Group's operations and ability to conduct its business could be affected or may not operate in the ways the Group anticipates; (iv) there may be a reduction in the Group's capital due to impaired business performance and absorption of losses; (v) there may be increased use of available headroom by credit card users; (vi) there may be increased forbearance and payment holidays supported by regulatory guidance for vulnerable customers or those in financial difficulty where necessary; (vii) there may be increased impairments due to customer defaults and associated IFRS 9 provisions; and (viii) the Group's access to funding and liquidity may be affected, which will have a negative impact on the Group's liquidity and cashflow. In the event of a material macro-economic downturn, the Group may also not be able to continue to provide its products to customers in the near-prime and mid-cost finance sector, or expand its second charge mortgage portfolio via its forward flow agreements, in line with its agreed business strategy and budgeted business plans. Such events could lead to increasing loan delinquencies, customer bankruptcies, charge-offs, and provisions for losses as well as reductions in the level of security on the second charge mortgage book. If inflation and/or interest rates in the UK were to rise further, the amount of disposable income available for customers to repay their overall borrowing obligations could decrease. Total collections may be reduced or the timing of receipt of payments may be extended as a result of these measures, any of which could materially and adversely affect the Group's business and financial condition, including its regulatory capital, liquidity, results of operations, cash flows and prospects. Risks associated with climate change have the potential to impact the Group The Group's climate strategy continues to relate to ensuring that climate-related risks are integrated into its business strategy and decision making in areas such as operational resilience, customer service, supply chain management and, where appropriate, capital allocation. Climate-related risks are identified, assessed, managed, and monitored in line with the company-wide risk management and internal control framework. When assessing climate-related risks and opportunities, the Group uses the time horizons set out below, which were updated last year to better align with its budgeting and planning cycles: Short term: Zero to one year - This aligns with the Group's annual reporting cycle and associated operational activities. Medium term: One to five years - This aligns with the financial and operational planning used and provides insight into developing risks and opportunities. Long term: Five or more years - This enables the Group to consider the impact of changing climate-related transition and physical risks on its business over the long term. In doing this, it enables the Group to continue to consider the material climate-related risks and opportunities that relate to the current and future products and services that it provides to its customers, as well as those that relate to its operations and infrastructure (including in the supply chain). The climate-related physical and transition risks and opportunities that have been factored into the Group's strategy are set out in the table below. The risks are categorised as physical risks (which include acute, extreme weather events, and chronic, long-term climate shifts in the UK) and transition risks (which relate to regulatory changes, technological innovations and customer demand changes), and the opportunities relate to meeting the needs of the Group's customers as climate-related policies are implemented, and continuing to improve the energy efficiency of its operations and infrastructure. Further details on the descriptions and the business impacts of these risks over the short, medium and long term are set out below: Physical (acute) - There is a risk of increased severity of extreme weather events such as heatwaves, hurricanes and flooding which disrupts the Group's own operations and supply chains, and those of its customers, colleagues and communities. These events could have an impact on infrastructure, causing damage to buildings and other assets, leading to wide-scale disruption to service delivery. They could also impact the secured properties of the Group's second charge mortgage customers, which could have credit risk implications. Physical (chronic) - There is a risk that events, such as rising sea levels, coastal changes and higher average temperatures and rainfall, could impact regions and infrastructure that are material to the Group's facilities/business premises, as well as the operations of the organisations in its direct and indirect supply chains. Such physical risks could lead to indirect economic and social impacts through supply chain disruptions, subsequent impacts from infrastructure damage (e.g. in relation to transport, communication and manufacturing processes) or market shifts (such as increases in insurance premiums). They could also have credit risk implications for the Group's second charge mortgage customers. Transition (policy/legal) - There is a risk that new or additional climate-related laws, regulations or contractual commitments (e.g. in relation to energy usage or the manufacture of internal combustion energy vehicles) may result in increased compliance costs, taxes on emissions, penalties or restrictions that relate to the Group's business models and its stakeholders. Such transition risks could impact both the Group's operating costs and ability to meet the demands of its current and future customers. The introduction of taxes designed to improve energy efficiency could also have cost-of-living implications for its customers, which has potential to expose the business to credit risks. These could have implications for the Group's revenue growth opportunities. Transition (reputation) - By failing to deliver on the Group's public net zero commitments there is a risk that it could be exposed to reputational damage (e.g. that arise from greenwashing allegations) and increased scrutiny from its customers, regulators, investors and colleagues. Damage to the Group's reputation because of poor environmental performance, including the failure to meet any climate related commitments or regulatory expectations, could result in negative media attention and may impact customer or investor demand or result in a loss of existing talent or the inability to attract new talent. This could lead to financial impacts on revenues and/or financial penalties, legal challenges or fraud investigations. To identify the actual and potential impacts of climate-related risks and opportunities on its business, strategy and financial planning the Group undertook a scenario analysis during 2025. This analysis made use of the Group's financial forecasts, operational footprint, customer data, supply chain information and environmental data, to create a representation of the Group. To support this, the Group continued to use the three climate scenarios developed by the Network for Greening the Financial System (NGFS): Orderly, Disorderly, and Hot House World. Any or all of the above may have an adverse effect on the business of the Group and may impact the ability of the Issuer to make payments in respect of the Notes. Disruptions and volatility in the global financial markets may adversely impact the Group's access to funding The Group is affected by global economic and macro-economic conditions. Challenging market conditions, particularly escalating geopolitical tensions and the outbreak of war in Iran, have resulted not just in greater volatility in financial markets but also the ongoing uncertainty poses risks to market liquidity, widening credit spreads and reduced transparency in credit markets, which creates a challenging operating environment for financial institutions, including the Group. Global markets and economic conditions have been negatively impacted for several years by various factors, including persistent inflation across economies and other volatility in financial markets due to geopolitical tensions. Numerous macro-economic factors (including the wars in Ukraine and the Middle East) have historically had a significant impact on the cost of living in the UK, particularly increased commodities and energy prices, inflation and economic volatility (as further described in the risk factor titled "Negative economic developments and conditions in the markets in which the Group operates may adversely affect its business and results of operations" above). In 2024, the UK economy began returning to growth with inflation falling to below the government target of 2 per cent., resulting in the Bank of England reducing interest rates. Despite recent progress, inflation remains above the 2 per cent. target with moderate growth in gross domestic product and signs of softening in the UK labour market. Prior to geopolitical developments, market expectations were for the Bank of England to reduce interest rates further in cutting rates in early 2026. However, new reporting indicates cuts once expected in early 2026 are now unlikely, given rising energy prices and higher inflation expectations stemming from the conflict in the Middle East. The precise nature of all the risks and uncertainties that the Group faces as a result of the global economic outlook cannot be identified and many of these risks are outside of the Group's control. No assurance can be given as to future economic conditions in any market or as to the sustainability of the improvement in any market. Internal controls are in place to monitor the external macro-economic factors on a regular basis including potential impact to the Group's overall funding and liquidity position. Any unforeseen turbulence in credit or other markets could have a material adverse effect on the Group's access to the capital markets and may increase the Group's funding costs. Despite interest rates trending downwards in 2025, any rise in interest rates in the UK due to a change in the economic environment or other factors beyond the Group's control may also increase the Group's financing costs. The exact nature of these risks faced by the Group are difficult to predict and guard against. Taken in isolation or together, the above changes in the macro-economic conditions may have a material adverse effect on the Group's operating results, liquidity, financial condition and prospects and may impact the ability of the Issuer to make payments in respect of the Notes. Risks relating to the Business of the Group As a lending business, the Group is exposed to credit risk, which is the risk that the Group will suffer unexpected losses in the event of customer defaults. Customer defaults in the non-standard credit market are typically higher than in more mainstream markets. Vanquis Bank Customers of Vanquis Bank (as defined in the section " Business Description - Introduction " below) are typically in full-time employment on low to moderate incomes with a limited credit history or lower than average credit scores. Rising unemployment, an increase in interest rates, inflationary pressures on household bills or a deterioration in the UK economy could adversely affect customers' ability to repay amounts due and lead to higher-than-expected default rates and hence impairment charges. Despite the credit risk management measures taken by Vanquis Bank (see " Business Description - Vanquis Bank -Risk management "), other factors including impairments stemming from customers in persistent debt (additionally, see the risks set out in " The Group is subject to significant and many forms of legal and regulatory risks in conducting its business in the UK " below) could give rise to increased customer defaults which may have a material adverse impact on Vanquis Bank's operating results, financial condition and prospects. Given Vanquis Bank is a wholly owned subsidiary within the Group, customer defaults in Vanquis Bank could impact the ability of the Issuer to receive dividends from Vanquis Bank, or negatively impact any other exposures the Issuer may have to Vanquis Bank from time to time, which in turn may impact the ability of the Issuer to make payments in respect of the Notes. Moneybarn Customers of Moneybarn (as defined in the section " Business Description - Introduction " below) are typically either in full-time employment or self-employed, with incomes around the national average (the national average as of the date of this Offering Circular being around £25,000 to £35,000 per annum). They typically rent and have a limited credit history or lower than average credit scores. For a Moneybarn customer, the monthly repayment is one of their largest monthly expenses and therefore rising unemployment, inflationary pressures on household bills or a deterioration in the UK economy could adversely affect their ability to repay, leading to higher-than-expected default rates and hence impairment charges. Despite the credit risk management measures taken by Moneybarn (see " Business Description - Moneybarn - Risk management "), customer defaults and the amounts recovered from the sale of any recovered vehicles may have a material adverse impact on Moneybarn's operating results, financial condition and prospects and may impact the ability of the Issuer to make payments in respect of the Notes. Counterparty credit risk For the Group, counterparty credit risk arises as a result of cash deposits and collateral placed with banks, reserves held with the Bank of England, exposures to UK government bonds (gilts), sovereign, supranational and agency bonds issued by various institutions that support social initiatives and development projects, the use of derivative financial instruments with banks and other financial institutions which are used to hedge interest rate risk and foreign exchange rate risk, reliance upon service providers to the Group and, in relation to second charge mortgages, risks in respect of the origination and servicing of mortgages by the Group's forward flow partners (see further " - Second charge mortgage risks "). In addition, the Prudential Regulation Authority (the " PRA ") has provided Vanquis Bank with a "Core UK Group waiver" (" CUG "), effectively removing the large exposure constraint on intra-group lending by Vanquis Bank to Moneybarn (see " Capital and Liquidity Risk relating to the Group - The risk that the Group has insufficient liquidity to meet its obligations as they fall due, and/or is unable to maintain sufficient funding for its future needs "). In support of the waiver, and to support intercompany lending, a Capital Support Agreement (" CSA ") has been granted by Moneybarn in favour of Vanquis Bank. The CSA would, in circumstances where Vanquis Bank is failing to meet its solo capital requirements, require Moneybarn to contribute any excess capital, or liquidity, it holds to Vanquis Bank. In relation to such transactions there is a risk that such counterparties could fail and default on their obligations under these transactions to the detriment of the Group. Counterparty credit risk is managed by the Group's Treasury function and is governed by a counterparty credit-risk policy approved by the Assets and Liabilities Committee (" ALCo ") of the Issuer which ensures that the Group's cash deposits and derivative financial instruments are only made with high quality counterparties with the level of permitted exposure to a counterparty firmly linked to the strength of its credit rating. In addition, there is a maximum exposure limit for all institutions, regardless of their respective credit ratings. This is linked to the Group's regulatory capital base and is in line with the Group's regulatory reporting requirements on large exposures to the PRA. Despite the Group's credit risk management procedures, there can be no assurance that the Group's financial performance and liquidity would not be adversely affected should any bank counterparty fail in the future and this may impact the ability of the Issuer to make payments in respect of the Notes. Vanquis Bank, as a PRA regulated entity on an individual basis, is subject to the regulatory large exposures limit under Article 395 in the Large Exposures (CRR) Part of the PRA Rulebook such that it cannot have exposure to a single counterparty or a group of connected counterparties in excess of 25 per cent. of its eligible capital. Intercompany lending is managed by the Intra Group Funding and Lending Framework which is approved by the Group's ALCo. Lending by Vanquis Bank to Moneybarn is subject to an annual credit risk assessment which assesses the financial health of Moneybarn and its ability to generate cash flows, to ensure they are sufficient to service the loan(s) according to the loan terms. The annual credit risk assessment is a detailed point in time assessment, utilising information from Moneybarn's reports and accounts and annual budget. Regular reassessment of the financial health of Moneybarn is performed through monitoring key performance indicators. The key performance indicators allow Vanquis Bank to identify if lending continues to be within risk appetite, before committing to additional lending. The inability for Moneybarn to service the loans may in turn impact the ability of the Issuer to make payments in respect of the Notes. Second charge mortgage risks The second charge mortgage business that the Group operates involves the Group entering into forward flow contracts with partners who originate and service second charge mortgages (see further " Business Description - Business Overview - Vanquis Bank - Second charge mortgages "). In addition to the counterparty risks mentioned in " - Counterparty credit risk " above, the Group has a credit risk exposure to the second charge mortgage originators (i) due to the wet funding it provides to the originators; to manage this risk the Group limits the amount of wet funding that is made available, and (ii) as a result of the reliance on the origination and servicing services provided by those forward flow partners. There is also a risk of fraud from third parties, which could cause significant financial and/or reputational harm to the Group. Please refer to " Business Description - Business Overview - Vanquis Bank - Second charge mortgages " for details of actions that Vanquis Bank is taking to seek to mitigate fraud risks. The second charge mortgage business is also exposed to the credit risk of the underlying second charge mortgage borrowers, given the nature of such mortgages. While these loans are secured against property, higher loan-to-value (" LTV ") ratios increase the potential for impairments, especially in adverse macroeconomic conditions such as falling property values or rising unemployment. Vanquis Bank has implemented mitigating controls, including strict loan eligibility criteria, provisions for reviewing performance, and holding a credit loss provision of 0.2 per cent. as at 31 December 2025. Prepayment risk is also present, as early repayments may reduce cash flows; however, early repayment charges (" ERCs ") help mitigate this impact. Conduct risk in the second charge mortgage business remains with originators under FCA regulation, but Vanquis Bank faces indirect exposure to potential breaches, which could affect financial returns and impact the reputation of Vanquis Bank. Lastly, property valuation risk could lead to higher losses if property prices decline or the valuations are not accurate, especially since second charge mortgages are subordinate to first-charge loans. To manage this, Vanquis Bank reflects stressed property prices in the setting of its capital requirements, monitors economic indicators, ensures more robust valuations are required for higher LTV mortgages, and conducts stress tests. Despite the measures taken by Vanquis Bank to mitigate these risks, the realisation of any of these risks may have a material adverse impact on Vanquis Bank's operating results, financial condition and prospects and may impact the ability of the Issuer to make payments in respect of the Notes. The Group could be subject to reputational harm that could damage its brands or have a broader negative impact on the consumer credit market The Group's brands and legal entities, including Vanquis Bank and Moneybarn, could be susceptible to significant reputational damage, which could arise from failing to address, or appearing to fail to address, a variety of issues, such as but not limited to: poor customer service or conduct outcomes; technology failures; breaches of data security; breaches of, or allegations of having breached, legal and regulatory requirements; committing, or allegations of having committed, or being associated with those who have or are accused of committing, unethical practices, including with regard to sales, trading practices or conflicts of interest; the failure of intermediaries, brokers and other third parties on whom the Group relies, such as clearing banks, third-party service providers or partners, to provide necessary services; and poor business performance. The inability to manage reputational risks relating to the Group's brands or legal entities for any reason could have a material adverse effect on the Group's business, financial condition, results of operations or prospects, which may impact the ability of the Issuer to make payments in respect of the Notes. The markets in which the Group operate are highly competitive and subject to rapid change The markets for the Group's products and services are highly specialised, competitive and in a state of ongoing change in response to consumer demand, technological innovations, changing legislation, regulation and other factors. Some of the Group's principal competitors have substantial financial resources, established brands, technological expertise and market experience that may better position them to anticipate and respond to competitive changes. Competitor activity could lead to pressure on certain Group products and services, potentially reducing profit margins and cash flows. Competition has increased in non-standard credit cards with several new entrants and an increased range of product propositions from established providers. Similarly, in respect of Moneybarn, competition has increased in recent years with some competitors offering increased commissions to introducers, and some introducers expanding into lending. Although the used car finance market has shown strong growth over recent years following dramatic falls in supply after the 2008 financial crisis, there is a risk of new specialist entrants and re-entry by mainstream car finance companies. Moneybarn is reliant on a network of specialist intermediaries including motor dealers, traditional motor finance brokers and internet introducers to distribute its products. These intermediaries are authorised and regulated by the FCA as credit brokers. Moneybarn has limited direct oversight of intermediaries' interactions with prospective customers, with the direct customer relationship being established at the point of lending. Should intermediaries violate applicable regulations or standards when selling Moneybarn's products, the Group's reputation could be harmed, and potential remediation requirements could arise. In addition, development of new products and delivery of good service levels to intermediaries are essential to attract and maintain long-term relationships. The loss or deterioration of Moneybarn's relationships with its intermediaries could have a material adverse effect on the Group's business, financial condition, results of operations or prospects. The Group cannot predict with certainty the changes that may occur and the effect of those changes on the competitiveness of its business activities. The competitive environment in which the Group operates will require the Group to continually invest, enhance and adapt its products and services including new technology to better serve the needs of its existing customers and to attract new customers. If the Group is unable to successfully adapt and/or develop its products in a timely fashion or to successfully respond to competitor offerings, it could have a material adverse effect on the business, results of operations, financial condition and prospects of the Group. The Group may not be able to successfully implement a new product strategy or model and may be adversely affected by the failure to manage change The Group may seek to introduce new product groups, pricing and credit assessment analysis methods and uses of data in order to: (i) retain existing customers whose needs have evolved; (ii) attract new customers for whom the existing product offering or methods of acquisition are unattractive or ineffective; and/or (iii) develop more competitive pricing and sophisticated underwriting processes. The new businesses and products may not be able to attain the forecast returns and the Group may make errors of judgement in the conception, planning and/or implementation of these strategies and methods which may materially and adversely affect its results of operations and financial condition. In order to successfully implement its strategy, the Group has established certain procedures in order to manage changes that may be required to the Group's existing business and operations. These include new product governance, system pilots, change risk management frameworks, monitoring programmes, prioritisation methodologies, audits, contingency and business continuity plans and regular progress reporting. Despite these controls, however, a new project, system, product or model may fail to deliver the business benefits required to implement the Group's business model and/or growth strategy. This could include (but is not limited to) insufficient market research, non-compliance with policies, technology failure, unexpected changes in external conditions including the regulatory environment and/or resource constraints. Failure to deliver on the Group's change programme could have a material adverse effect on its business, results of operations and financial condition. The Group's business is subject to concentration risk There is a concentration risk arising from the lack of diversification in the Group's business either geographically, demographically or by product. As a result of its clear non-standard specialist lending strategy, the Group's operations are concentrated solely in the UK and in the non-standard consumer credit market. The Group's product offering primarily consists of Vanquis Bank credit cards and unsecured personal loans, and secured car loans through Moneybarn. However, the Group's customer base is well diversified throughout the UK and is not concentrated in a particular region. There can be no assurance that the Group's financial performance will not be adversely affected should unforeseen events, relating to concentration risk from operating solely in the UK and within one customer segment (being the non-standard consumer credit market), arise in the future which would impact the ability of the Issuer to make payments in respect of the Notes. There are risks related to the Group's reliance on third-party suppliers and partners The Group depends on a number of third-party service providers for a variety of functions whose failure to perform could have a material effect on the Group's business, financial condition, results of operations and prospects. The Group relies on the continued availability and reliability of these service providers. If the Group's contractual arrangements with any of these providers are terminated for any reason, or a third-party service provider becomes otherwise unavailable or unreliable in providing the service to the required standard, the Group may need to identify and implement alternative arrangements. Although the Group would likely be able to find an alternative third-party provider or supplier for the services on equivalent terms, it may not be able to do so on a timely basis and in doing so may incur additional costs which could cause operational disruption and/or have a material financial or reputational impact on the Group. In addition, the Group relies on certain suppliers to provide important technology and operational services including new customer acquisition and collections, and this includes outsourcing to countries outside the UK. For example, the Group has outsourced a significant proportion of its collections, customer servicing, financial crime case work and onboarding work to three UK suppliers operating across South Africa and India. More complex servicing work has remained in-house, such as escalation calls for severely vulnerable customers, but all the standard collections, servicing and onboarding work is carried out by these three providers. The ability of these suppliers to carry out the work may be impacted by regional events in South Africa, such as electricity shortages or strikes by taxi providers in Cape Town or flooding in Chennai. Any issues with suppliers or the country they operate in could have a significant impact on the quality of the service provided by them leading to reputational damage, regulatory breaches and/or poor outcomes for the Group's customers. Furthermore, the Group sources some of its new customers from third-party introducer and aggregator channels including brokers, distribution partners and forward flow partners. Several of these third parties provide a significant amount of new customers to the divisions on a monthly/annual basis. The loss of one or more such third-party channels, including in each case as a result of increased regulation, any adverse changes in relations with third parties, or the financial credit-worthiness of such third parties, could severely impact the financial revenue of the Group, resulting in loss of operations, cash flows and projected financial prospects of the Group, which may not be easily substituted in the short-medium term through an alternative channel. The Group's reliance on third-party providers exposes it to the risk of deterioration of the commercial, financial and/or operational soundness of those organisations. The Group is also exposed to the risk that its relationships with one or more third-party service providers may deteriorate for a variety of reasons, including competitive factors. Reputational damage to the Group's brands caused by the failure of a third-party supplier may also adversely impact the Group's ability to attract and retain customers or employees in the short and long-term and the ability to pursue new business opportunities. Risks relating to entry to new markets and acquisitions The Group may not be successful upon entry into a new market or upon an acquisition despite completing market research and /or due diligence beforehand. The Group may not be able to (i) successfully support its growth strategy in a newly entered market; (ii) realise the expected accretive value of any acquired business or portfolio; (iii) take advantage of market opportunities; and/or (iv) dispose of or close existing businesses where these are not financially viable, for a number of reasons including: the inability to recruit and retain well-qualified staff for those businesses; the failure to meet customer demand if its operations or the market do not perform as expected; the inability to find a suitable buyer or wind-down existing businesses due to operational complexity, regulatory concerns and/or impact on customers; the failure to respond effectively to local economic conditions or regulatory pressures; and/or the inability to successfully integrate the acquisition or new business into the Group. If the Group subsequently disposes of or closes the acquired business or other business entity, or withdraws from a market, the Group will incur the additional costs of disposal including any write down in value. There is also the opportunity cost of potentially losing out where a more appropriate geographical market or business acquisition would have been beneficial. The losses will be of greater magnitude if the Group makes such an error in relation to a number of strategic markets or acquisitions and this could materially and adversely affect the Group's business, results of operations and financial condition. Capital and Liquidity Risks relating to the Group The risk that the Group has insufficient liquidity to meet its obligations as they fall due, and/or is unable to maintain sufficient funding for its future needs Liquidity risk is the risk that the Group will have insufficient liquid resources available to fulfil its operational plans and/or to meet its financial obligations as they fall due. Liquidity risk is managed by the Group's centralised treasury department through daily monitoring of expected cash flows and liquidity requirements in accordance with a Board-approved Internal Liquidity Adequacy Assessment Process (" ILAAP ") and Group Funding and Liquidity Policy. This process is monitored regularly by the Group (and Vanquis Bank) ALCo. The Group aims to take a prudent approach to funding and liquidity risk, with a Risk Appetite and Funding and Liquidity Policy designed to ensure that the Group is able to continue to fund the growth of the business. The Group maintains liquidity to fund growth and meet contractual maturities in its retail deposit, securitisation and bond funding. See Note 28(c) ( Borrowings - Maturity profile ) to the 2025 Group Financial Statements for further information. Vanquis Bank is a PRA regulated institution. It is primarily funded via retail deposits and also maintains access to the Bank of England's Sterling Monetary Framework, including a reserves account. The retail deposits consist of a range of products including (i) fixed term deposits of 1 to 5 years; (ii) notice savings accounts; (iii) 'easy access' savings accounts; (iv) cash individual savings accounts ( "ISAs" ); and fixed individual savings accounts of 1 to 2 years, all subject to cover by the FSCS. Vanquis Bank does not take corporate deposits, other than from its ultimate parent company, the Issuer. It is required to maintain a liquid assets buffer, and other liquid resources, based upon daily stress tests detailed in the Group and Bank ILAAP, in order to ensure that it has sufficient liquid resources to fulfil its operational plans and meet its financial obligations as they fall due. It also maintains an operational buffer over such requirements in line with its risk appetite. As at 31 December 2025, the high-quality liquid assets (" HQLA ") held by Vanquis Bank amounted to £998 million (2024: £947 million (not including non-Bank cash deposits)), held in a combination of a Bank of England Reserve Account and gilts. The Group and Vanquis Bank are required to meet the liquidity coverage ratio (" LCR "). The LCR requires institutions to match net liquidity outflows during a 30-day period with a buffer of 'high-quality' liquid assets. The Group and Vanquis Bank have developed systems and controls to monitor and forecast the LCR and have been submitting regulatory reports on the ratio since 1 January 2014. As at 31 December 2025, the Group's LCR amounted to 306 per cent. (2024: 359 per cent.) and Vanquis Bank's LCR was 271 per cent. (2023: 338 per cent.). On 1 November 2022, the Group received notice from the PRA that it had approved the Group's application for a CUG large exposure waiver which enables Moneybarn to access funding from Vanquis Bank with immediate effect. This enabled the Group's transition to a traditional bank funding model in which the Group's funding consists of: (i) retail deposits; (ii) securitisation of the credit cards and vehicle finance books; and (iii) access to facilities via the Bank of England's Sterling Monetary Framework. The CUG waiver was extended in July 2025 for a further three years. Since 2023 Vanquis Bank has diversified its retail deposit funding mix through more behaviour driven deposits and ISAs. Whilst this retail deposit funding mix does provide Vanquis Bank with access to more liquidity, it also changes its liquidity risk profile, as customers have immediate access to their deposits. Despite the above measures, there can be no assurance that the Group's financial performance will not be adversely affected should events relating to liquidity risks arise in the future including those described in the risk factors entitled "Negative economic developments and conditions in the markets in which the Group operates may adversely affect its business and results of operations" and "Disruptions and volatility in the global financial markets may adversely impact the Group's access to funding", which could impact the ability of the Issuer to make payments in respect of the Notes. The Group is subject to prudential regulatory capital and liquidity requirements and may incur costs in monitoring and complying with these requirements The Group is subject to prudential regulatory capital and liquidity requirements on a consolidated basis imposed by the PRA as a result of Vanquis Bank being regulated by the PRA and accepting UK retail deposits. Vanquis Bank is also subject to prudential regulatory capital and liquidity requirements imposed by the PRA on a solo entity basis. The requirements applicable are primarily set out in the PRA Rulebook. Together these requirements set out the capital, leverage, liquidity and funding ratios that are applicable to the Group and Vanquis Bank. Further information on the capital and funding of the Group is set out in the section titled " Capital and Liquidity ". The Group's ability to do business could be constrained if it fails to maintain sufficient levels of capital. Furthermore, if the Group fails to meet its minimum regulatory capital requirements, this could result in administrative actions or sanctions against it. Effective management of the Group's capital is critical to its ability to operate and grow its business and to pursue its strategy. Any change that limits the Group's ability to manage its balance sheet and capital resources effectively (including, for example, reductions in profits and retained earnings as a result of credit losses, write downs or otherwise, increases in risk weighted assets, delays in the disposal of certain assets or the inability to raise finance through wholesale markets as a result of market conditions or otherwise) or any increase in the prudential regulatory capital and liquidity requirements could have a material adverse effect on its business, financial condition, results of operations and/or prospects. See " The value of the Notes could be adversely affected by a change in English law or administrative practice " , "The Group is subject to significant and many forms of legal and regulatory risks in conducting its business in the UK" and "Potential effects of any additional regulatory changes" below. There remains a risk that any changes to the Capital Regulations (as defined in the Conditions), in addition to PRA rules, standards or guidance, may lead to further unexpected enhanced prudential requirements for the Group. This could affect the profitability of the Group and/or lead to regulatory action if new requirements are not adhered to, which could impact the Issuer's ability to make payments of interest and/or principal on the Notes. Moneybarn may be required to contribute its Tier 1 capital to Vanquis Bank On 1 November 2022, Vanquis Bank was granted a CUG waiver application by the PRA, which was extended in July 2025 for a further three years. This waiver allows Vanquis Bank to disapply the large exposures limit imposed by Article 395 in the Large Exposures (CRR) part of the PRA Rulebook when lending to Moneybarn. The PRA requested that, in support of the CUG waiver application, Vanquis Bank and Moneybarn enter into the CSA in order to comply with the provisions of section 2.8 of the PRA's Supervisory Statement SS16/13, which states that, in the case of a counterparty which is not a PRA-authorised firm, the application should include a legally binding agreement between the firm and the counterparty to promptly, on demand by the firm, increase the firm's Tier 1 capital by an amount required to ensure that the firm complies with the provisions contained in the Own Funds (CRR) Part of the PRA Rulebook and any other requirements relating to Tier 1 capital or concentration risk imposed on a firm by or under the regulatory system. In accordance with PRA guidance, the CSA requires Moneybarn to contribute only the Tier 1 capital available to Moneybarn, although it does not require Moneybarn to render itself balance sheet insolvent as a result. Any such contribution may have an impact on the Group and, as a result, the Issuer's ability to make payments of interest and/or principal in respect of the Notes. Conduct, Legal and Regulatory Risks The Group's business practices could result in systemic conduct failings requiring significant redress programmes for customers The non-standard credit market in which the Group operates exposes the Group to conduct risk. The FCA, as part of its statutory objectives, is clear that consumer protection is critical in ensuring markets work well and any failures by the Group in support of this objective could have a material adverse effect on the Group's business, financial condition, results of operations, cash flows and prospects. Through the many touch points with the Group's customers, the Group is exposed to conduct risk. This could manifest through: poor product design which fails to meet the needs of customers through unsuitable product features including levels of interest, inappropriate fees and/or charges or basic ease of use; lending irresponsibly by failing to undertake appropriate credit or affordability checks for existing or new customers, or through patterns of lending which make repayments unsustainable over time; failing to identify or treat customers fairly, particularly those who are vulnerable, have special needs or are in financial difficulty. This includes not offering adequate forbearance or 'breathing space' to customers where they are struggling to meet agreed payments or where they are in persistent debt. In the context of the cost of living crisis, this risk is heightened and also includes offering suitable payment holidays to customers who are experiencing financial difficulty directly as a result of the cost of living crisis; failure to deliver good outcomes for customers across the principles introduced through the Consumer Duty (as defined below); not dealing with complaints fairly through inadequate recognition of a complaint, fact-finding, decision as to whether the complaint is upheld, redress and communication of complaint outcomes to customers, as well as failing to address the root causes of complaints; and failures by third parties, with whom the Group engages, to comply with law and regulation which may result in the Group being liable for, for example, inadequate disclosure by brokers to customers of commission paid to them. Any 'event' or failure of the type described above could trigger a major systems and controls and/or conduct breach, most likely arising through irresponsible lending or unsuitable product design feature. This could result in an FCA enforcement action, Financial Ombudsman Service ("FOS") 'precedent case', increased claims from Claims Management Companies ("CMCs") and/or mandated or voluntary redress programmes and potential court action. Were this risk to crystallise, it could be substantial and have a material adverse effect on the Group's business, financial condition, reputation, results of operations, cash flows and prospects. On 1 August 2025, the Supreme Court issued a judgment in the three conjoined cases of Hopcraft v Close Brothers Ltd ; Johnson v FirstRand Bank Ltd ; Wrench v FirstRand B...

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