REG - CAB Payments Hldgs - FY 24 Results
13/03/2025 07:15
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RNS Number : 4827A CAB Payments Holdings PLC 13 March 2025
13 March 2025
CAB Payments Holdings plc and its subsidiaries
("CAB", "CAB Payments", the "Group" or the "Company")
Audited results for the twelve months ended 31 December 2024
Creating a reshaped business with strong foundations for growth
CAB Payments, a specialist in B2B FX and cross-border payments in
hard-to-reach markets, announces its audited results for the twelve months
ended 31 December 2024. The Group continues to execute on its four pillar
strategy with early evidence of delivery coming through.
Neeraj Kapur, Group CEO of CAB Payments, commented:
"We have made solid strategic progress in our transformation journey with
active client numbers growing 7%, volumes growing 7% while generating £16m in
adjusted profit after tax for the year, in line with market expectations.
"2024 was a "reset" year. Since then our new and highly experienced senior
leadership team is now in place and executing well against our plans driving
deeper, stronger and trusted relationships with our clients, central banks and
counterparties.
"Our vision is clear, we operate a leading Emerging Markets FX and Payments
business with well-established foundations of operating in hard-to-reach
markets. Our work throughout 2025 will look to enhance this position whilst
creating a more profitable, diversified and sustainable company.
"We are executing well against our 2025 plan on both revenues and costs and
the Group will continue on its transformation, generating income growth. The
changes that we are making will allow us to focus on delivering on our purpose
- supporting fast growing economies in challenging conditions helping to
improve prosperity for their people."
Financial highlights:
The Group remains profitable and cash generative, whilst navigating
macro-economic challenges. Operational KPIs indicate positive strategic
momentum, with elevated levels of investment in 2024 to build a more robust
and sustainable business model.
• Volumes grew 7% to £37.2 billion, with developed markets growing
13% and Emerging Markets falling 1%.
• As previously announced, Gross Income fell 23% to £105.5 million
(2023: £137.1m) predominantly impacted by exceptional Nigerian Naira, Central
African Franc and West African Franc (together "NXX") business in 2023.
• Wholesale FX & Payments FX Gross Income fell 39% to £53.8
million (2023: £88.4 million).
• NXX income reduced by £31.4m between 2023 and 2024.
• A stronger dollar lowered average transaction values combined with
reduced aid flows suppressed volume growth and take-rates in emerging markets.
In developed markets, a higher mix of G10 currency trading reduced the overall
blended take-rate.
• Banking and Other Income grew 8% to £37.0 million (2023: £34.3
million) reflecting higher trade finance lending to drive enhanced FX &
Payments growth and enhanced asset allocation to dampen the effects of a
falling rate environment.
• Operating costs (excluding D&A) increased by 6% to £76.2
million reflecting 15% growth in other operating expenses, largely due to
technology and office costs. Staff costs were broadly flat year-on-year .
◦ In-year costs were well controlled, with H2 2024 costs up 2% vs H1
2024.
◦ Previously announced cost action is underway to reshape the
organisation for greater efficiency and to reflect the new strategy. The Group
expects a c.20% reduction in FTE and approximately £12m cash staff cost
saving in 2025 across operating expenses and capital expenditure, before
upskilling and new hires. We therefore expect broadly flat staff P&L cost
in 2025.
◦ Adjusted EBITDA margin remains robust at 29% albeit down on the
prior year (2023: 47%) reflecting lower Gross Income performance combined with
a primarily fixed cost base.
• Depreciation and amortisation increased 47% to £8.5 million
(2023: £5.8 million) reflecting higher levels of capital expenditure to help
deliver on our four-pillar strategy.
◦ Capex stood at £15.0 million up from £7.4 million in 2023, a
result of underspend in prior year with focus being on operational resilience
and platform scalability.
◦ Capex expected to reduce in 2025, with increasing allocation
towards product and revenue generation related investment.
• Adjusted EPS of 6.3 pence (2023: 17.7 pence).
Operating and commercial highlights:
• Active (revenue generating) clients grew 7% to 546 (2023: 509),
reflecting strong sales progress and the growing strength of customer
relationships.
• Network counterparties grew 18% to 390 (2023: 331) evidencing our
competitive pricing, expansive geographic reach and efficiency in execution
for clients.
• New collaboration with Visa to integrate CAB's offering with Visa
Direct giving the capability to deliver higher volume, lower-value payments in
a cost-effective manner, providing reach to more than 8.5bn end-points across
more than 190 countries.
• Trade Finance activity grew by 2.1x to £180 million of balances
as at 31 December 2024 (2023: £59 million), while total gross trade lending
throughout the year was £535 million (2023: £243 million).
▪ In 2024 the Group started working to create capability to
distribute trade finance assets and In February 2025, the Group conducted its
first trade asset sale, demonstrating the ability to rapidly scale business in
a low capital usage manner
▪ Trade finance helps to drive client loyalty and is a strong
support for the core FX & Payments business - trade finance clients
generated £3.2 billion in FX volume.
• In 2024 the Group also started working with major global banks to
enable us to offer investment grade deposits, allowing for onboarding of
deposits from a wider set of blue-chip clients to further drive active client
growth in 2025.
Outlook
The business is structured to optimise earnings growth through a more
sustainable business model, driving lower income concentration and increased
diversification, with a clear focus on enhancing the strength of our customer
relationships. The strategic diversification of the income base driven by a
stronger in-geography sales focus, expansion of its network and having a more
integrated solutions based banking and customer proposition will go towards
mitigating evolving macro headwinds.
The Group will continue its transformation journey during 2025 and it is
expected to generate income growth versus 2024.
Senior leadership changes:
Strong senior leadership is now in place to execute the strategy and deliver
growth. New leadership hires include:
• James Hopkinson - Group CFO. James brings significant broad
based experience across Emerging Markets including FX, Payments and Banking.
James built his career at Standard Chartered, where he spent almost 20 years
across multiple geographies including Africa, Hong Kong, India, Singapore,
Qatar and the UK. Latterly, he held senior roles including Global CFO of
retail banking and Global CFO Regions and Clients. More recently James has
been CFO of both privately-owned and UK Listed banks.
• Clare Davies - Group CRO. Clare has extensive risk management
experience across large aspects of financial services, both regionally and
globally. Prior to joining CAB, Clare was EMEA Chief Risk Officer and Global
ESG Chief Risk & Compliance Officer at Bank of New York Mellon. Previous
roles also include senior risk management positions at Goldman Sachs, Deutsche
Bank, Deutsche Asset Management and GE Capital.
• Simon Ramage - General Counsel. Simon was previously Group Legal
Director at Prudential plc. Prior to that, he held general counsel positions
at GE Capital, having practised as a corporate lawyer at Freshfields.
Change in Auditor:
As previously announced, the Group conducted a competitive tender process for
the role of external auditor. The Board Audit Committee has recommended the
appointment of PwC as the Group's external auditor for the financial year
ended 31 December 2025.
Shareholder approval for PwC's appointment will be sought at the 2025 AGM and
Forvis Mazars will resign as auditor after four years in position.
Analyst and Institutional Investor Webcast:
A presentation webcast and live Q&A conference call for analysts and
institutional investors will take place on 13(th) March 2025 at 9.30 am UK
time. A copy of the presentation will be made available on the Company's
website at https://www.cabpayments.com/investors.
The presentation will be hosted by Neeraj Kapur, Group CEO.
To register for the webcast, please go to:
https://secure.emincote.com/client/cab/2024annualresults
To register for the conference call, please go to:
https://secure.emincote.com/client/cab/2024annualresults/vip_connect
Retail Investor Webcast:
CAB Payments will also host a presentation for retail shareholders and
prospective shareholders. This will take place at 10.00am UK Time on Friday
14th March. The presentation will be hosted by Neeraj Kapur, Group CEO and can
be accessed via the link below:
https://sparklive.lseg.com/CABPAYMENTSHOLDINGS/events/e07ad3c2-4155-402f-a2e4-e47e3b661f6e/cab-payments-2024-annual-results-presentation-to-retail-holders
Questions can be submitted via the platform any time during the live
presentation.
Selected Financial Information and KPIs for Continued Operations:
Total income by product Type (£m) Year ended 31 December YoY YoY excl. NGN, XOF, XAF
2024 2023 % %
Wholesale FX 41.2 68.5 (40)% (4)%
Payments 27.3 34.2 (20)% (6)%
of which
Payments FX 12.6 19.9 (37)% (17)%
Other Payments 14.7 14.3 3% 3%
Total transactional income 68.5 102.7 (33)% (5)%
Banking 37.0 34.3 8% 8%
of which
Net Interest Income 30.9 31.7 (3)% (3)%
Trade finance and other Income 6.1 2.6 135% 135%
Total Gross Income 105.5 137.1 (23)% (0.1)%
2024 2023
Memo:
Wholesale FX & Payments FX Income 53.8 88.4
of which: NGN, XAF, XOF Income 12.0 43.4
Selected Financial Information (£m) - Reported
Year ended 31 December YoY
2024 2023 %
EBITDA 27.0 43.5 (38)%
Profit before tax 17.6 37.6 (53)%
Profit after tax 14.2 23.9 (41)%
Earnings per share (pence) 6 10 (40)%
Selected Financial Information (£m) - Adjusted
Year ended 31 December YoY
2024 2023 %
Adjusted EBITDA 30.8 64.6 (52)%
Adjusted EBITDA Margin (%) 29% 47% (38)%
Depreciation & Amortisation 8.5 5.9 44%
Adjusted Profit Before Tax 21.3 58.7 (64)%
Adjusted Profit After Tax 16.0 44.9 (64)%
Adjusted Earnings per Share (pence) 6 18 (67)%
Volumes & Take Rates - Wholesale FX and Payment FX
Volume (£bn) Take Rate (%) Income (£m)
2024 2023 2024 2023 2024 2023
Developed Markets 23.7 21.0 0.06% 0.06% 15.3 13.0
Emerging Markets 13.5 13.6 0.29% 0.55% 38.5 75.4
Total 37.2 34.7 0.14% 0.25% 53.8 88.4
Memo:
Emerging Markets (excl NGN, XAF, XOF) 8.9 8.4 0.30% 0.38% 26.5 31.8
Other key KPIs
Year ended 31 December YoY
2024 2023 %
Capital & Investment
Operating Free Cash Flow (£m) 15.5 56.8 (73)%
Operating Free Cash Flow Conversion (%) 50% 88% (43)%
Total Capital (£m) 116.0 107.5 8%
CET1 Ratio (%) 19.2% 25.5% (25)%
Income
Wholesale FX & Payments FX 53.8 88.4 (39)%
Wholesale FX & Payments FX (excl. NGN, XAF, XOF) (£m) 41.8 45.0 (7)%
Income by client type
EMFI (£m) 59.4 59.6 -%
IDO (£m) 15.0 28.9 (48)%
Major Market Banks (£m) 2.4 5.8 (59)%
NBFI and Fintech (£m) 28.7 42.8 (33)%
CAB Payments Holdings plc is the holding company for Crown Agents Bank.
Regulated in the UK, Crown Agents Bank specialises in FX and cross-border
payments for hard-to-reach markets. Its strength of network and deep expertise
means it can move money into and out of the world's most complex financial
markets. Trusted by a global ecosystem of leading institutions across the
public, private and development sectors, Crown Agents Bank's strength lies in
its network which connects its clients to underserved geographies, giving them
access to 100+ currencies across 700+ currency pairs.
The delivery of fast, transparent and efficient transactions moves money where
it's needed. Crown Agents Bank's network offers multiple transaction
solutions, delivered via a single API, digital trading platforms, or through
bespoke approaches developed by its specialist teams.
Crown Agents Bank is one of the first banks to achieve B Corporation™
status. The bank was awarded the Gold Sustainability Rating by EcoVadis in
2022, 2023 and 2024, ranked within the top 5% of 100,000 companies assessed
across 160 countries and over 200+ industries.
For further information, please contact:
CAB Payments Holdings plc
Gaurav Patel, Head of Investor Relations
ir@cabpayments.com
www.cabpayments.com
FTI Consulting
(Public Relations Adviser to CAB Payments)
Edward Bridges
+44 (0) 7768 216 607
Katie
Bell
+44 (0) 7976 870 961
cabpayments@fticonsulting.com
In accordance with the Listing Rules of the UK Listing Authority, these
preliminary results have been agreed with the Company's auditors, Forvis
Mazars LLP.
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 31 December 2024 and 2023, but is
derived from those accounts. Statutory accounts for 2023 have been delivered
to the Registrar of Companies and those for 2024 will be delivered following
the Group's Annual General Meeting. The auditors have reported on those
accounts: their reports were: (i) unqualified, (ii) did not contain a
reference to a material uncertainty in respect of going concern, (iii) did not
contain a statement under Sections 498 (2) and 498 (3) of the Companies Act
2006.
Chief Executive Officer's Review
A mission to create long term shareholder value
In June 2024, I was delighted to be appointed as CEO of CAB Payments and Crown
Agents Bank (CAB) and this is my first set of annual results since being
appointed. The performance of the business in 2024 was below expectations, and
did not contain any of the specific currency tailwinds that existed in the
prior year. Despite this, we still have a business with fundamental strengths:
a highly differentiated offering for clients with great margins and
profitability, good cash generation and a strong balance sheet. This, combined
with our unique relationship with central banks and local banks, supports our
loyal client base and competitive moat.
I strongly believe that we have a distinct and powerful FX and cross-border
payment offering for the market. Our strength of network and deep expertise
means we can move money into and out of the world's most complex financial
markets. We are trusted by a global ecosystem of leading institutions across
the public, private and development sectors to support their desire to ensure
that the global south economies are better connected and served by the
international currency markets. All of this is underpinned by the fact that we
are a fully regulated banking institution in the UK, which is an important
unique selling point when establishing and building trust as well as client
loyalty.
With that said, strategic change was needed in order to create a more diverse
business that is capable of creating sustained growth in profitability, cash
flow and ultimately shareholder value. I announced this at our half year
results in September 2024 and it builds on our existing strengths and focuses
on the quality of execution across four pillars:
• Network
• Clients
• Platform
• Invest and Innovate
We are well into our journey of preparing the business for the future
The business has moved quickly to strengthen the quality and capabilities of
leadership within our business, bringing in diversified and relevant
experience to deliver on the next phase of growth. Key hires have been made in
significant areas such as operations, sales, payments and banking as well as a
new Group CFO. This is part of our updated, more execution focused, strategy
that was introduced in the latter half of 2024.
In September 2024, we hired a new Global Head of Sales, who brings significant
sales experience in emerging markets and in leading large teams. The sales
team has been reorganised to focus on specific segments and geographies to
deliver on go-to-market strategies in each of our target markets. As part of
the restructure, we are adding teams to focus specifically on Central Banks
and Corporates. We have also invested in our payment products and network
development teams with experienced leaders from those sectors.
We expanded our business into the EU with our office in Amsterdam now able to
service clients across 28 passported jurisdictions. We still await our licence
authorisation in the USA. We have also commenced our licence application in
Abu Dhabi as our Middle East & North Africa hub as we seek to leverage the
growth in capital flows between the Gulf and Sub-Saharan Africa. This is
driving new and improved relationships with Central Banks allowing us to gain
superior access to local liquidity. As an example, we recently received our
licence to act as an International Money Transfer Operator (IMTO) in Nigeria,
which unlocks significant potential as we are able to work with the Nigerian
Central Bank on large scale Naira transactions.
Our B Corp Certification has been a cornerstone of our sustainability journey,
establishing a strong foundation and driving meaningful value for our key
stakeholders, including clients, investors and regulators. Sustainability
remains at the heart of our strategy, and we are resolutely focused on the
future especially as we play a key part in opening up emerging markets to help
their economies grow and their people thrive.
Strategic vision - good early progress
We now have a business model which puts us firmly on a path to sustainable
growth. This results in our business being: 1) relationship led, 2) technology
driven and 3) having a wider geographic reach. This is a long-term vision,
designed to drive sustainable growth and mitigate concentration risk
underpinned by our four-pillar strategy.
Our moat is based on driving stronger relationships both across our clients
and network. Building relationships at the right level accompanied by offering
a wider product set that we can do as a bank, makes us a stand-out partner. We
have a right to win in our markets.
Technology is the engine of our growth. We understand that our clients need
the most seamless, secure and efficient services possible which is why our
ongoing capex plans drive this agenda. Automation and AI-driven compliance
solutions will enable us to scale while ensuring we meet the highest
regulatory standards across multiple jurisdictions. Real-time payment
solutions will enhance the speed and reliability of our transactions,
particularly in emerging markets where instant settlement is becoming the
norm. Data-driven insights will allow us to better understand our clients'
needs and tailor solutions that add real value.
Our operations will no longer be defined as a single-branch offering,
centrally controlled from London, but moving towards a global business with
strategic locations in London, Amsterdam, New York and Abu Dhabi. This drives
deeper relationships with our clients, partners, regulators and stakeholders.
London remains our core operations and innovation hub, continuing to drive our
technological edge. Amsterdam strengthens our European presence and gives us
better access to EU financial institutions and regulatory frameworks. New York
will connect us to the heart of global banking and expands our reach in the
Americas specifically LATAM. Abu Dhabi cements our role in the Middle East and
provides a strategic gateway to North Africa and South Asia.
Our strategic indicators show progress. We have increased our network
counterparties by 18% to 390. Active (revenue generating) clients numbers
are up 7% to 546. We have also been targeting flows in key regions outside
of Africa such as LATAM, MENA and Asia-Pacific which now account for 7% of
Group volumes, up 2% on 2023.
Under new leadership we continued to expand the network with 27 new Nostro
providers and 32 new liquidity providers onboarded. We will continuously
assess the quality of our network which is largely determined by loyalty and
the quality of FX pricing we are getting
We believe that our banking activities brings us a distinct tactical advantage
to our core FX and Payments business. Trade Finance, for example, is a
distinct service that many of our competitors cannot offer. Not only does it
drive client loyalty by offering an integrated service, it also facilitates
significant FX & Payment flows. In H2 2024, we increased limits on our
Trade Finance facilities, with our lending book standing at £180m at the end
of 2024 (2023: £59m), a 2.1x increase. Trade finance facilities are
principally used by banking and liquidity partners which helps facilitate
tighter relationships and thus better FX pricing and liquidity. This business
can be scaled up beyond our own balance sheet through asset sales,
syndications and third-party funding driving even more FX & Payment flow
onto our platform. In February 2025, we conducted our first asset sale.
To support this vision, in late 2024, the difficult decision was taken to
reshape the organisation to reflect better our renewed strategy and growth
ambitions. This is expected to result in a reduction in the workforce of
approximately 20% of full-time equivalents. However we will continue to hire
at the right levels throughout 2025 to get the right quality of talent,
especially in revenue generating functions. We will continue to monitor and
control costs carefully as part of our focus on improving the Group's adjusted
EBITDA margin.
Business Performance
2024 was a challenging year for CAB Payments. The impact on our performance
was two-fold; first, the removal of extraordinary revenue performance from
certain corridors, and secondly, macro-economic headwinds such as a stronger
US dollar and reduced commitments to aid from developed nations.
It is also important to contextualise our performance against some broader
market trends, principally that there was a drop of 4% in global market
payment volumes according to management analysis, and a 2% drop in flows into
our core Sub-Saharan Africa markets. We see this market contraction as
short-term and in spite of this, our overall volumes grew 7%. In Emerging
Markets our volumes fell 1%.
Excluding the effects of Nigerian Naira, Central African Franc and West
African Franc (NXX), our Wholesale FX and Payments FX revenue fell 7% to
£41.8m (2023: £45.0m), which is not an unexpected result given the
contracting market in 2024 and lack of currency-specific tailwinds. In
addition, our currency concentration reduced significantly with our Top 5
corridors accounting for 29% of Gross Income versus 45% for 2023, which is the
right direction as we create a more diversified business.
We had expected Wholesale FX and Payments FX revenues to demonstrate their
normal increase in the second half of the year. Disappointingly, this did not
transpire. This was for a number of reasons, not least that IDO volumes
continued to be suppressed from the first half owing to budget constraints
driven by political factors. IDO activity going into 2025 again remains
uncertain given the significant spending review being undertaken in the US.
The strong dollar also impacted revenue significantly having the effect of
lowering average transaction values. Moving forward, our approach of
integrating banking solutions with FX and Payments will help us drive more
predictable volume flow among our client base.
The Group positively managed its net interest income during the year which
stood at £30.9m (2023: £31.7m) a decrease of 3% as near-term market interest
rates peaked and then started to fall. In June we extended the limits of both
our Trade Finance and Working Capital facilities (previously known as
Liquidity as a Service ''LaaS'' facilities) to £200m and £75m respectively
and we saw a commensurate increase in utilisation of these facilities.
On the investment side we are seeking higher returns by investing our assets
into a wider pool of high quality securities that produce higher yield with
little to no extra incremental risk.
The Group operates a relatively fixed cost base which accommodates the
scalability of the business model and drives good operational leverage.
However, as we operated in a declining revenue environment, this has resulted
in significant compression in our Adjusted EBITDA margin to 29% from 47% in
2023. Whilst we remain significantly profitable, we consider this to be
disappointing and it will need to be improved from 2025.
Cash generation was lower than last year given the lower Adjusted EBITDA
margin. Our model in itself remains highly cash generative given the majority
of our revenues are capital light. Due to the relatively high level of capex
and lower level of profitability versus last year, cash conversion stood at
50% vs 88% in 2023.
Above all, we remain well capitalised. At the end of 2024 we had total
capital of £116.0m (2023: £107.5m) of which £10m is considered excess over
our regulatory and internal capital requirements (2023: £34m). We are
committing this capital to return to growth as our renewed strategy demands.
Looking forward
We have taken meaningful action from H2 2024 to prepare the business for
future success. The Board and executive team are wholly aligned on the vision
and strategy for the business. There are exciting market opportunities
available that can drive significant growth.
There is still much work to be done in 2025, a year of transition for the
business where we expect to launch new revenue initiatives to clients, begin
to deliver from our international offices and, later in the year, begin to
reap the benefits of our strategic realignment. That said, I am confident that
we will begin to see the benefits of our actions. Whilst the macro-environment
in 2025 remains uncertain given the narrative coming out of developed markets
with respect to trade tariffs and significant cuts to development aid, the
year has started well and we are optimistic of driving growth in 2025 but with
more meaningful growth in 2026.
Financial Review
2024 was a year of challenges and recalibration for CAB Payments. As we exited
2023, the Group faced headwinds that would continue to shape our financial
performance in the current year. These included significant macro-economic
pressures and central bank interventions, which particularly impacted income
streams from key currency corridors. Despite these challenges, we continued to
demonstrate the resilience of our business model by remaining profitable and
cash generative, while maintaining confidence in our long-term strategy.
Macro-Economic and Market Conditions
The Central Bank interventions that defined 2023 continued to be of focus in
2024, directly affecting our key income streams in Nigeria (NGN), West Africa
(XOF) and Central Africa (XAF) in particular (collectively 'NXX').
Our business was also impacted by the strengthening of the US dollar against
emerging markets reducing average transaction values, and political
uncertainty in a number of jurisdictions in which we operate. This had a
telling effect particularly on the volume flow of our International
Development Organisation clients (IDOs).
In this inflationary environment pervading the global economy, the trust in
CAB as a PRA and FCA regulated bank and its ability to deploy its banking
licence came to the fore with our clients increasingly placing their funds
with us for both operational and investment purposes. As market interest rates
were projected to fall, we invested more of our surplus capital and liquidity
into higher yielding Trade Finance lending for increased net interest income.
This business is frequently accompanied by FX & Payments activity,
providing a healthy return on capital while further diversifying our income
streams.
Our international operations offer further cause for optimism in diversifying
our income streams. In Europe we have a developing pipeline of clients
offering opportunities for market expansion, and we are also awaiting
permissions to begin operating from offices in the US and Abu Dhabi, giving us
future access to significant new markets.
Performance Highlights and Operational Resilience
The Group's continued investments in its product capabilities, infrastructure
and resilience contributed to continued increased client activity and
profitability:
• Financial Strength: We maintained healthy capital surpluses with
CET1 ratio of 19.2% and £1.6bn client deposits.
• Client Growth: The Group successfully onboarded an additional 71
clients in 2024 (2023: 83), of which 53 monetised during 2024, taking the
total number of active clients to 546 (2023: 509).
• Network Size and Strength: We continue to develop our network,
which we see as a key differentiator, growing 18% year on year to 390
counterparties.
• Adjusted EBITDA and Margin: We remained profitable and cash
generative with an Adjusted EBITDA of £30.8m (2023: £64.6m ), and a margin
of 29.1% (2023: 47.2%). Our cost control and lower capital expenditure plans
will support both profitability and free cash flow through 2025.
Strategic Focus, Investment and 2025 Outlook
2024 marked the beginning of a strategic reset for the business through its
four pillar strategy to deliver shareholder value. As we enter 2025 the Group
is well-positioned to return to growth, supported by:
• Expanding Market Reach (Network): Continued efforts to deepen
penetration in our core markets, with increased local presence to build and
develop relationships with central banks and liquidity providers.
• Disciplined Capital Allocation (Invest and Innovate): Continuation
of strategic investment to ensure operational resilience and efficiency. We
are now in a position to enhance our product and technological capabilities
for greater innovation and enhanced revenue.
• Client-Centric Growth (Client): Onboarding of new clients in
existing jurisdictions while developing a pipeline of new business in Europe
alongside licensing applications in the US and UAE.
• Developing Infrastructure and offerings (Platform): By leveraging
our banking licence, the Group is increasing its focus on Central and Regional
Bank relationships to be a trusted banking partner, solidifying our FX and
Payment income streams.
Risks and Opportunities
The Central Bank interventions that defined performance year-on-year
highlighted both the challenges and opportunities inherent in our markets.
While interventions reduced income from key corridors, they also underscored
the need for geographic diversification. The Group remains focused on
expanding its footprint in LATAM, APAC, and MENA, which will help mitigate
concentration risks and create more stable revenue streams.
Our ongoing investments in technology and compliance further bolster our
ability to navigate regulatory complexities, ensuring long-term operational
resilience.
Gross income
Gross Income in 2024 was £105.5m (2023: £137.1m) reflecting (23)%
contraction year-on-year. This reduction was principally due to Wholesale FX
and Payment FX take rate declines which contributed to £34.6m lower income in
2024, particularly through the NGN, XOF and XAF currencies ('NXX'). Gross
Income excluding NXX was broadly in line with 2023 at £93.5m in 2024 (2023:
£93.7m).
A reallocation of liquidity resources from cash management to higher margin
Trade Finance and Working Capital facilities offset the impact of Bank of
England and US Federal interest rates peaking and subsequently falling towards
the end of 2024, with Banking Services and Other Income increasing to £37.0m
(2023: £34.3m).
Wholesale FX and Payment FX income
Income reduced year-on-year by £34.6m driven by NXX declines of £31.4m.
Volumes grew by 7.2% year on year, with a mix shift between lower take rate
developed markets and higher take rate emerging markets. Excluding NXX,
Emerging Market volumes grew by £0.5bn, contributing a net £1.4m income
versus 2023. This is despite the impact of the strengthening dollar against
emerging market currencies, which resulted in lower average transaction
values. Our developed markets volumes grew while take rates remained stable,
contributing an additional £2.1m income year-on-year.
Income (£m) Volume (£bn) Take rate (%)
2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024
Developed Markets 5.5 12.0 13.0 15.3 12.8 20.7 21.0 23.7 0.04 0.06 0.06 0.06
Emerging Markets 34.0 70.8 75.4 38.5 10.3 14.3 13.6 13.5 0.33 0.50 0.55 0.29
Total 39.5 82.8 88.4 53.8 23.1 35.0 34.7 37.2 0.17 0.24 0.25 0.14
Memo: Emerging Markets (excl. NXX) 12.0 27.8 31.8 26.5 5.4 8.3 8.4 8.9 0.22 0.34 0.38 0.30
One of our key focus areas has been to grow our client base in order to
diversify, and in 2024 we onboarded 71 new clients, of which 53 clients
generated income in the year, with the remaining 18 clients expected to trade
early in 2025. We also saw clients onboarded at the end of 2023 begin to
monetise.
We continue to progress with our geographical expansion, with the EU licence
confirmed earlier in 2024 and licences pending in the United States and
through our application in Abu Dhabi, as our Middle East hub.
Other payments Income
This represents income from providing access to USD, GBP and EUR payment and
clearing services, and Pension payments, and has grown 3% to £14.7m (2023:
£14.3m). This is the result of adding additional EMFIs to our clearing
facilities.
Banking services and Other income
Income grew to £37.0m, up from £34.3m in 2023 through the reallocation of
some of the Group's capital and liquidity resources towards higher-margin
Trade Finance and Working Capital facilities. These facilities are a key
enabler of our transactional products.
We have also begun further diversifying our liquidity portfolio by investing
some surplus liquidity in AAA-rated floating rate securities.
Client performance
£m Twelve Months Ended 31 December Year on Year
2024 2023 %
Emerging Markets Financial Institutions (EMFI) 59.4 59.6 -%
International Development Organisations (IDO) 15.0 28.9 (48)%
Major Market Banks (MMB) 2.4 5.8 (59)%
NBFI and Fintechs 28.7 42.8 (33)%
TOTAL 105.5 137.1 (23)%
• EMFIs: stable performance demonstrates the strength of our
relationships with local and central banks within emerging markets. Income
sustained by increasing Trade Finance facilities and deposit taking to offset
reducing income mainly from NXX.
• IDOs: reduction in income driven by NXX, with underlying
performance excluding NXX down 11% year on year reflecting the negative
business impact of the strong dollar and political uncertainty.
• MMBs: revenue broadly in line excluding the material impact of
NXX.
• NBFIs: year-on-year reduction driven by NXX. Excluding NXX, income
is down 16% reflective of broader take rate compression in a highly
competitive segment.
Cost base development
£m Twelve Months Ended 31 December Year on Year
2024 2023 %
Staff expenses 45.7 45.6 0.2%
Other operating expenses 30.5 26.5 15%
Total operating expenses (excluding depreciation and amortisation) 76.2 72.1 6%
Depreciation and amortisation 8.5 5.8 47%
Total operating expenses before adjusting items 84.7 77.9 9%
Adjusting items 3.7 21.1 (82%)
Total operating expenses after adjusting items 88.4 99.0 (11%)
Total operating expenses decreased by 11% to £88.4m, with:
• Staff expenses: broadly in line year-on-year (£45.7m vs £45.6m
in 2023) despite the Group's average headcount growing to 378 Full-Time
Equivalent (FTE) (2023: 310 FTE), which reflected investment, particularly in
IT, to support strategic initiatives reflective in higher capitalisation in
2024.
• Other operating expenses increased 15% to £30.5m vs £26.5m in
2023, due to higher recruitment fees, professional services and technology
investments linked to EU, US and Abu Dhabi licensing efforts.
• Depreciation and amortisation increased 47% year on year,
primarily due to the initial recognition in April and subsequent amortisation
of the right of use asset associated with 3 London Bridge, along with
increased depreciation of capital investment in 2024.
• Adjusting items (formerly referred to as non-recurring expenses):
£3.7m (2023: £21.1m) of one-off expenses were incurred, primarily related to
due diligence work associated with the third-party acquisition bid, costs of
transitioning senior management, professional costs in relation to review of
strategic options and bonuses paid to staff to settle loans re the 2017 LTIP
scheme
The organisation had positioned itself for increased revenue, which has not
materialised in the expected way. As a result, the business is currently in
the process of undertaking a c. 20% FTE redundancy programme, which is
anticipated to save c. £7m of operational costs during 2025 and a further c.
£5m of capitalised costs. This programme is to reshape the organisational
design for future strategic requirements.
Profitability and cash generation
As a result of contracting income and despite a good control over costs,
Adjusted EBITDA declined by £33.9m to £30.8m (2023: £64.6m) and Profit
After Tax by £9.7m to £14.2m (2023: £23.9m). The reduction year-on-year on
Profit After Tax was not as severe due to lower Adjusting items. EPS fell from
10p to 6p, a decline of 40%.
Operating free cash flow was impacted by the reduced Adjusted EBITDA and
higher capital investment in 2024 leading to a reduction to £15.5m in 2024
from £56.8m in 2023. Operating Free Cash Flow Conversion fell to 50% in 2024
from 88% in 2023.
Taxation
The effective tax rate for the year was 19%, reflecting adjustments for
disallowable costs associated with restructuring and compliance with the UK
banking surcharge. The Group incurred a total tax charge of £3.4m compared to
£13.7m in 2023, reflecting the decline in profitability.
Capital allocation
The Group deploys capital into two main categories - capital investment
expenditure with a view to driving long-term growth, and lending assets which
generate a strong return on capital and enhance the franchise by deepening
relationships with clients and liquidity providers. As the Group has been
investing surplus capital generated into the business, it will not be paying a
dividend.
Capital investment expenditure
Capital expenditure for the year ended 31 December 2024 was £15m (2023:
£7.4m), representing a 102% increase. This investment focused on:
• Technology Development: Enhancements to the core banking and FX
systems, including greater automation for scalability and risk control.
• Infrastructure Expansion: Building out offices and operational
capabilities in anticipation of EU and US licences.
• Product Development: Innovative solutions such as derivatives and
Trade Finance development
These investments align with our strategic objectives to expand market reach
and enhance client service capabilities. In 2025, it is anticipated that
capital expenditure will be lower reflecting the operational maturity of the
business and the redundancy programme. The emphasis of 2025 expenditure will
be on revenue-enhancing Product Development.
Balance sheet
As at 31 December 2024, customer deposits totalled c. £1.6bn of which c.
£0.9bn was on fixed term deposit (including overnight) with the remainder
being easy access in line with clients' operational requirements. The vast
majority of depositors transact other business with the Group demonstrating
the strength of the relationships that we have with clients.
As at 31 December 2024, our portfolio of High-Quality Liquid Assets (HQLA)
stood at £1.3bn(2023: £1.3bn) providing deep liquidity access to the
business to support our ongoing growth, comfortably exceeding our minimum
prudential requirements with Liquidity Coverage Ratio (LCR) standing at 138%
(2023: 152%). The reduction in our LCR has been driven by a decision the Group
has taken to better utilise its balance sheet to help increase yield by
deploying funds into franchise enhancing, short dated Trade Finance assets and
Working Capital (£212m at 31 December 2024 vs £67m at 31 December 2023)
and investing in floating rate notes as part of its HQLA buffer (£44m at 31
December 2024 vs £nil at 31 December 2023). The growth in the Trade Finance
book has been achieved whilst still maintaining healthy surpluses across all
prudential liquidity and capital metrics.
The Group's strong levels of liquidity will continue to allow us to deploy
funds to take advantage of further opportunities to invest in yield and
franchise enhancing assets, and to fully exploit the opportunities presented
to us by holding a banking licence. We have continued to reinvest our profits
into the long-term growth prospects of the Group whilst simultaneously growing
our capital base with CET1 now standing at £116.0m (2023: £107.5 m). The
Group's CET1 ratio has trended down across the course of the year (2024:19.2%
, 2023:25.5%) primarily as a result of the Group deploying its surplus capital
into Trade Finance assets and higher operational risk charges required, as a
result of higher average 3-year revenue. As the Group has been investing
surplus capital generated into the business, it will not be paying a dividend.
During the year we made a reversal of provision for credit losses of £0.5m
(2023: provision for credit losses £0.4 m) with impairment provisions held on
the balance sheet at 31 December 2024 of £0.4m (2023: £0.9m). The reversal
of provision for credit losses in the current year is attributable to a change
in our recognition of the behavioural life of Working Capital facilities.
Principal Risks and Uncertainties
Effective risk management is critical to realising our strategy. We have an
established risk management framework to manage and mitigate the various risks
that we face.
As at 31 December 2024 our principal risks consisted of:
Current context Mitigants and other considerations
Risk Description The Group is highly reliant on established relationships with a small number The Board and Management periodically:
of key banks for clearing USD, GBP and EUR.
The risks to the Group arising from:
review and update the strategic plan, budgets, targets, emerging
The Group provides access to emerging markets, with a level of concentration opportunities, and threats.
The business model or strategy proving inappropriate due to macroeconomics, to Sub-Saharan Africa. Significant changes to our partner network or key
geopolitical, industry, regulatory or other factors. markets (e.g. the risk of market dislocations, general access, regulatory, track and manage, through governance, a range of metrics and early warning
economic, or geopolitical conditions) would have a corresponding impact on the indicators to highlight emerging risks to performance; these continue to be
Adverse events and media coverage that could negatively impact the Group's Group's business, operations, financial performance and reputation. developed and enhanced.
name and reputation thereby impacting its ability to achieve its strategic
objectives. The Group's business model and operations rely on the continued relationships The Group has a dedicated Network and Partnerships Function, who develop and
with a diversified network of counterparties and partners including liquidity manage our key local relationships; actions continue to be taken to ensure
providers. these are adequately diversified including key currencies such as USD and GBP.
This function also tracks and reports regulatory changes and geo-political
Potential events may include: issues in these markets.
Adjustments in the nature of our partner networks impacting access to local The Group has a strategic risk register which tracks the top risks and the
liquidity or clearing services. Structural changes to markers that result in corresponding actions planned and underway to mitigate these. This is reported
the removal or narrowing of margins and/or access to preferential local market periodically to the Risk Committee and Executive Risk Committee.
currency rates.
The Group has a medium-term strategy in place to continue diversifying
Changes to local economies including market structure (e.g. regulatory/central revenues across geographies, clients and products whilst investing in its
bank monetary actions); sales team.
Economic or political events (e.g. changes in government)
Translation risk associated with significant strengthening in GBP relative to
USD.
Relevant KPIs
Financial:
• Gross Income
• Adjusted EBITDA & Margin
• Income per Client
• Number of Unique Active Clients
Risk Descriptions • FX is the leading product, used by over 90% of all • To mitigate risks effectively, the Group has
clients, however, one of the Group's core offerings is correspondent banking implemented strict onboarding and correspondent banking due diligence
The risk associated with criminal activity in the form of money laundering, and payments services. AML and Sanctions risk remains higher in Correspondent processes and procedures, as well as strong governance and client approval
terrorist financing, bribery and corruption, sanctions, tax evasion and fraud. Banking and Trade Finance with both accounting for most Suspicious Activity committees.
Reports to the NCA.
• A robust country risk framework mitigates the Group's
• The Group provides its services to clients based in exposure to high-risk countries. This framework includes complete prohibitions
global jurisdictions, including across Africa, the Americas and Caribbean, the of some countries and detailed restrictions on others.
Middle East, the USA, Canada and Europe. The Group's historic client
concentration was on customers in higher-risk countries, and recently a shift • Screening and monitoring controls enforce the
is seeing more payments from Low-Risk into Higher-Risk countries. Despite this framework, and the Group's employees have a strong awareness and understanding
general trend, new clients located in Higher-Risk countries, primarily in of the legal and regulatory environment in which they operate, including the
Africa have been onboarded in 2024, and the Group started expansion into the relevant financial crime prevention provisions.
Americas to lessen its reliance on African markets.
• Ongoing programme of investment in anti-financial
• In 2024 there was no significant change in the crime technology and optimisation of system rule-sets. A new transaction
distribution of Client types within CAB's portfolio and Financial Institutions monitoring system was implemented in 2024 along with an upgrade to the
remain the largest segment of CAB's Client portfolio. transactions screening system. The Group is focused on phase 2 of the
transaction monitoring system delivery.
• CAB specialises in segments including Non-Bank
Financial Institutions (NBFI), Money Service Businesses (MSB), and charities, • Regular training is delivered to ensure standards are
but also includes segments such as financial institutions, Central Banks and continuously maintained.
supranational organisations.
• A dedicated Risk and Compliance Function provides
• A Notable AML/CTF high-risk factor that has been oversight and undertakes thematic assurance activity to identify potential
considered is Organisation risk. The Group's Organisation risk is assessed as gaps and issues.
low due to no legacy financial crime issues, no major control failures and the
fact that the Group's subsidiaries operate in a simple, non-complex structure
and are physically located in low-risk jurisdictions with leading regulatory
standards.
• There is generally a lower level of regulatory
oversight and scrutiny of many NBFIs and MSBs. Trends of recent sanctions
relating to deficiencies in controls of MSBs have been indicative of problems
in mitigating financial crime risk in the sector, hence their assessment as
higher risk. Meanwhile financial institutions in higher risk jurisdictions
tend to be classified as higher risk due to their countries of operation.
r
Risk Description The Group relies extensively on the use of technology, including the The Group is Cyber Essentials accredited. ISO27001 accreditation remains a key
inter-relationship between multiple third-party services, which is central to priority. Additionally, the Group continues to enhance its operational
The risk of loss or other non-financial impact, resulting from inadequate or the processing and its operating environment. System resiliency coupled with resilience efforts with a key focus on critical third-party resilience
failed internal processes, people and systems, or from external events. the growing sophistication of cyber-attacks is consistently under review. testing.
Resource capacity and capability impact all risk types, these are monitored The Group deploys several attraction and retention strategies throughout the
frequently to ensure staffing levels reflect the size and complexity of the employee lifecycle, including hybrid-working and competitive employee
Group. benefits.
The Group relies on a combination of manual and automated processes. Specific Process and control automation is proactively considered across the Group,
clients have bespoke processes that are more prone to human errors. The Group acknowledging that not all processes can be automated but regular process
is acutely aware that a technology incident could result in manual review cycles support in ensuring processes and procedures are consistently
intervention as part of its recovery efforts. updated and maintained.
Risk Description Credit risk is inherently generated through the Group's banking and financing Credit Risk remains a key focus for the Group.
activities. For example, through trade finance products, working capital
The risk of financial loss arising from a borrower's or counterparty's failure overdrafts, Nostro balances etc. Risk appetite thresholds are constructed with regard to regulatory
or inability to meet their financial obligations in accordance with
requirements and internal assessments included within the ICAAP.
contractual terms. Counterparty credit risk arises due to FX/Payment-related trading and
derivatives activities where counterparties may be unable or unwilling to meet An established credit policy is in place with portfolio levels exposure limits
their financial obligations, including collateral obligations, as they fall and a maximum individual counterparty exposure limit framework. The Credit
due. Risk Committee provides individual counterparty approvals and portfolio level
oversight.
Treasury-related activities also generate an element of credit risk through
their day-to-day placement of funds i.e. money market funds, HQLA portfolio Robust individual credit assessment and monitoring frameworks ensure that
etc. credit risk is managed and mitigated in line with credit management objectives
and risk frameworks.
Counterparty FX and derivatives transaction risk is mitigated via ISDA master
agreements and credit support annexes, where suitable.
Relevant KPIs
Financial:
• Development Aid Flows
• Income per Client
Risk Description The Group's market risk exposure occurs primarily through FX volatility and An assessment of market risk drivers is conducted as part of the ICAAP, and to
IRRBB. assess BAU and stressed market risk.
The risk of losses occurring from adverse value movements of the Group's
assets and liabilities; principally relating to FX and interest rates. The economic and financial market uncertainties remain elevated. Disruptive Market Risk exposure limits are staggered, to constrain typical market risk
adjustment to interest rate levels, deteriorating trade or geopolitical exposure. The Group primarily trades in the FX spot market and risk appetite
tensions could have implications for FX rates and the value of the Group's limits are set and monitored at both an aggregate and currency level.
Nostro balances. Alternatively, a decline in interest rates may compress net
interest margin across the business. Defensive positions are typically taken to the extent that markets exhibit
increased market risk events, such as during national elections.
Adverse changes in FX rates can impact capital ratios given elements of the
risk-weighted assets exposures are denominated in foreign currencies. Interest rate risk in the banking book (IRRBB) is primarily driven by
mismatches between the profile of client deposits, capital, investments for
Failure to account for foreign currency movements could result in an adverse cash management purposes, and lending. The Group manages IRRBB through
impact on the Group's regulatory capital and leverage ratios. strategies employed to mitigate risks to net interest income and economic
value.
Relevant KPIs
Financial:
• Wholesale FX and Payments FX Income
• Wholesale FX and Payments FX Volumes
• Number of Currencies Offered
Risk Description • As the Group continues to grow in terms of increasing Horizon-scanning is conducted to monitor upcoming UK regulatory changes.
size and complexity it brings with it an increasingly diverse legislative and
The risk arising from non-compliance with laws and regulations governing regulatory landscape and potentially increasing the risks of legal or Responding to any regulatory request promptly.
financial services institutions in the markets in which we operate. regulatory sanctions, material financial loss and/or reputational damage in
the markets in which we operate. Ensuring that we have adequate permissions to operate in certain markets.
CAB Payments partners with local providers that are typically regulated
entities or locally licensed.
The Group consults third-party legal counsel for new territorial expansions to
ensure compliance with local regulations.
Risk Description The Group's capital ratios can be affected by various business activities and The Group has robustly defined capital adequacy thresholds, constructed in
the failure to meet prudential capital requirements, internal targets and/or reference to regulatory requirements and maintains capital ratios in excess of
The risk of the Group having insufficient quality or quantity of capital, to to support the Group's strategic plans. these.
meet its regulatory capital requirements and internal thresholds to cover risk
exposures and withstand a severe stress as identified as part of the ICAAP. The key risk drivers with capital implications are credit risk, market risk The Group produces an ICAAP at least once each calendar year. Challenge and
and operational risk, each of which is addressed within its relevant section. oversight of the ICAAP occurs at the Asset & Liability Risk Committee and
the Risk Committee before approval by the Board.
Day-to-day capital risk exposure is managed by the Treasury function with
oversight from the Asset & Liability Risk Committee and the Group Treasury
Committee, who monitor and manage capital risk in line with the Group's
capital management objectives, capital plan and risk frameworks.
If the Group were to encounter a significant stress on capital resources, a
Recovery Plan is maintained which includes options to ensure it can remain
sufficiently capitalised to remain viable. Recovery Plan metrics are regularly
monitored and reported against. The Group's Pillar 3 disclosures contain a
comprehensive assessment of its capital requirements and resources and are
published separately on the Group's website.
Relevant KPIs
Financial:
• Capital and Surplus
• Adjusted EBITDA & Margin
Risk Description The Group's liquidity ratios (i.e. LCR and Net Stable Funding Ratio (NSFR)) Funding and liquidity risks are managed within a comprehensive risk framework
can be affected by various business activities, either idiosyncratic or in reference to regulatory requirements and internal thresholds to ensure
The risk the Group cannot meet its contractual or contingent obligations in a market-wide, that could impact prudential liquidity requirements and there is no significant risk that liabilities cannot be met as they fall due.
timely manner as they fall due. Funding risk is the risk that the Group cannot corresponding business activities, and investor or depositor confidence.
maintain access to a sufficient stable funding base to maintain its liquidity.
The Group produces an ILAAP at least once per calendar year. Challenge and
The key liquidity risk drivers are depositor outflows, and intraday liquidity oversight of the ILAAP occurs at the Asset & Liability Risk Committee and
requirements. the Risk Committee before approval by the Board.
The primary metrics used to monitor and assess the adequacy of liquidity are
the Overall Liquidity Adequacy Rule (OLAR), the LCR and NSFR.
Day-to-day liquidity risk exposure is managed by the Treasury function with
oversight from the Asset & Liability Risk Committee and the Group Treasury
Committee.
Treasury conducts regular and comprehensive liquidity stress testing,
including reverse stress testing, to ensure that the liquidity position
remains within the Board's appetite.
Relevant KPIs
Financial:
• Wholesale FX and Payments FX Volumes
Risk Description Clients may suffer detriment due to actions, processes or products which Conduct risk is incorporated into the product approval process.
originate from within the Group.
The risk that the conduct of the Group and its staff, towards clients (or in
Complaints are formally registered, investigated and responses provided.
the markets in which it operates), leads to unfair or inappropriate client Conduct risk can arise through:
outcomes and results in reputational damage and/or financial loss.
The Group has a Gifts and Hospitality Policy with an approval and logging
the design of products that do not meet client needs; process.
mishandling complaints where the Group has behaved inappropriately towards its All staff receive annual online training on conduct, ethics and culture.
clients;
inappropriate sales processes; and
behaviour that does not meet market or regulatory standards.
Relevant KPIs
Financial:
• Gender Diversity in Management
Financial Statements
Consolidated statement of Profit or Loss
2024 2023
Note £'000 £'000
Continuing operations
Interest income 4 58,857 52,353
Interest expense 4 (39,300) (30,854)
Net interest income 19,557 21,499
Gain on money market funds 16,070 11,036
Net (loss)/gain on financial assets and financial liabilities mandatorily held (247) 1,232
at fair value through profit or loss
Fees and commission income 5 15,745 14,571
Net foreign exchange gain 6 53,803 88,417
Revenue, net of interest expense 104,928 136,755
Other operating income 616 313
Total income, net of interest expense 105,544 137,068
Operating expenses before adjusting items 7 (84,659) (77,946)
Adjusting items 7a (3,741) (21,101)
Operating expenses after adjusting items (88,400) (99,047)
Impairment reversal/(loss) on financial assets at amortised cost 450 (404)
Profit before tax 17,594 37,617
Tax expense 8 (3,382) (13,727)
Profit after tax for the year from continuing operations 14,212 23,890
Discontinued operations
Loss after tax for the year from discontinued operations - (153)
Profit for the year 14,212 23,737
Profit for the year attributable to:
- Owners of the parent 14,212 22,713
- Non-controlling interests - 1,024
14,212 23,737
2024 2023
pence pence
Basic and diluted earnings per share 23
Continuing operations 6 10
Discontinued operations - -
Total basic and diluted earnings per share 6 10
Consolidated Statement of Other Comprehensive Income
2024 2023
£'000 £'000
Profit for the year 14,212 23,737
Other comprehensive income for the year:
Items that may be reclassified subsequently to profit or loss:
Foreign exchange gains/(losses) on translation of foreign operations 4 (121)
Items that will not be reclassified subsequently to profit or loss:
Movement in investment revaluation reserve for equity instruments at fair 20 27
value through other comprehensive income
Income tax relating to these items (5) (12)
Other comprehensive income/(loss) net of tax 19 (106)
Total comprehensive income 14,231 23,631
Total comprehensive income attributable to:
- Owners of the parent 14,231 22,617
- Non-controlling interests - 1,014
14,231 23,631
Consolidated Statement of Financial Position
As at As at
December 31, 2024 December 31, 2023
Note £'000 £'000
Assets
Cash and balances at central banks¹ 9 584,679 529,835
Money market funds 488,197 518,764
Loans and advances on demand to banks 10 185,559 135,178
Investment in debt securities 246,021 353,028
Other loans and advances to banks¹ 10 180,084 136,131
Other loans and advances to non-banks 10 32,596 8,216
Unsettled transactions 10,866 8,417
Derivative financial assets 4,884 3,829
Investment in equity securities 553 495
Other assets 19,341 11,200
Accrued income 925 1,215
Property, plant and equipment 2,781 1,191
Right of use assets 17,754 689
Intangible assets 13 30,605 24,294
Total assets 1,804,845 1,732,482
Liabilities
Customer accounts 16 1,585,000 1,542,889
Derivative financial liabilities 539 9,679
Unsettled transactions 35,173 20,081
Other liabilities 5,967 8,121
Accruals 10,380 18,367
Lease liabilities 12 18,069 884
Deferred tax liability 15 1,217 695
Provisions 17 1,949 236
Total liabilities 1,658,294 1,600,952
Equity
Called up share capital 21 85 85
Treasury shares reserve 18 (244) -
Retained earnings 146,724 131,478
Investment revaluation reserve 126 111
Foreign currency translation reserve (140) (144)
Shareholders' funds 146,551 131,530
Total liabilities and equity 1,804,845 1,732,482
1 - A prior period adjustment has been made to record a reclassification of
£1.4m interest receivable from Cash and balances with central banks which was
incorrectly recognised in Other loans and advances to banks instead of Cash
and balances from central banks. There was no impact to profit or loss, equity
or earnings per share.
Company registration number - 09659405.
The notes on pages 29 to 85 form part of these financial statements. The Board
of Directors approved the financial statements on 12 March 2025.
N Kapur,
Group Chief Executive Officer
Consolidated Statement of Changes in Equity
Attributable to owners of the parent
Share capital Treasury shares reserve Retained earnings Investment revaluation reserve Foreign currency translation reserve Total Non- controlling interest (NCI) Total shareholders' funds
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 85 - 131,478 111 (144) 131,530 - 131,530
Profit for the year - - 14,212 - - 14,212 - 14,212
Other comprehensive income:
Foreign exchange gain on translation of foreign operations - - - - 4 4 - 4
Movement in investment revaluation reserve for equity instruments at fair - - - 20 - 20 - 20
value through other comprehensive income
Income tax relating to these items (Note 15) - - - (5) - (5) - (5)
Other comprehensive income net of tax - - - 15 4 19 - 19
Total comprehensive income - - 14,212 15 4 14,231 - 14,231
Transactions with owners in their capacity as owners:
Share-based payment expense - - 996 - - 996 - 996
Stamp duty refund - - 38 - - 38 - 38
Acquisition of treasury shares by EBT (Note 18) - (244) - - - (244) - (244)
Total - (244) 1,034 - - 790 - 790
Balance at 31 December 2024 85 (244) 146,724 126 (140) 146,551 - 146,551
Balance at 1 January 2023 68,010 - 40,179 96 (31) 108,254 7,704 115,958
Profit for the year - - 22,713 - - 22,713 1,024 23,737
Other comprehensive income:
Foreign exchange losses on translation of foreign operations - - - - (111) (111) (10) (121)
Movement in investment revaluation reserve for equity instruments at fair - - - 27 - 27 - 27
value through other comprehensive income
Income tax relating to these items (Note 15) - - - (12) - (12) - (12)
Other comprehensive income/(loss) net of tax - - - 15 (111) (96) (10) (106)
Total comprehensive income/(loss) - - 22,713 15 (111) 22,617 1,014 23,631
Transactions with owners in their capacity as owners:
Share-based payment expense - - 1,313 - - 1,313 46 1,359
Issuance of new shares (Note 21) 11 - (11) - - - - -
Capital injection in subsidiary (Note 21) - - 3,661 - - 3,661 296 3,957
Change in ownership interest in subsidiary - - (543) - - (543) - (543)
Share capital reduction (Note 21) (67,936) - 67,936 - - - - -
Dividends declared and paid - - (11,300) - - (11,300) (1,540) (12,840)
FX translations adjustment - - - - 8 8 - 8
Acquisition of NCI - - 7,530 - (10) 7,520 (7,520) -
Total (67,925) - 68,586 - (2) 659 (8,718) (8,059)
Balance at 31 December 2023 85 - 131,478 111 (144) 131,530 - 131,530
Consolidated Statement of Cash Flows
Restated
2024 2023
Note £'000 £'000
Cash inflow from operating activities¹ 19 96,774 322,915
Tax paid (11,766) (14,084)
Payments for interest on lease liabilities (33) (65)
Net cash generated from operating activities¹ 84,975 308,766
Cash flow used in investing activities
Purchase of property, plant and equipment 11 (2,428) (422)
Purchase of intangible assets 13 (12,524) (6,982)
Refund/(purchase) of investments in subsidiary undertakings 39 (543)
Purchase of equity investments (53) -
Proceeds from sale of investment in CAIM - 2,133
Net cash used in investing activities (14,966) (5,814)
Cash flow used in financing activities
Repayment of principal portion of the lease liability (295) (462)
Proceeds from shares issued to non-controlling interests - 973
Purchase of treasury shares 18 (244) -
Dividends paid - (12,840)
Net cash used in financing activities (539) (12,329)
Net increase in cash and cash equivalents¹ 69,470 290,623
Cash and cash equivalents at the beginning of the year¹ 1,183,777 907,053
Effect of exchange rate changes on cash and cash equivalents 5,188 (13,899)
Cash and cash equivalents at the end of the year¹ 1,258,435 1,183,777
Analysed as follows:
Cash and balances at central banks¹ 9 584,679 529,835
Money market funds 488,197 518,764
Loans and advances on demand to banks 10 185,559 135,178
1 - A prior period adjustment has been made to record a reclassification of
£1.4m interest receivable from Cash and balances with central banks which was
incorrectly recognised in Other loans and advances to banks instead of Cash
and balances from central banks. There was no impact to profit or loss, equity
or earnings per share.
Notes to the Financial Statements
1 - Statement of accounting policies
The following accounting policies relate to the financial statements of CAB
Payments Holdings plc ('the Company') and its subsidiaries (collectively
referred to as 'the Group').
a) General information
The Company is incorporated and domiciled in England. On 4 July 2023 the
Company was re-registered as a public limited company, CAB Payments Holdings
plc, in order to align with its strategic objectives. The address of its
registered office as at 31 December 2024 is 3 London Bridge St, London, SE1
9SG, England.
The Company's shares trade under the ticker code of CABP.L.
The Group is a market leader in business-to-business cross-border payments and
foreign exchange, specialising in hard-to-reach markets.
b) Basis of preparation
The consolidated and Company financial statements have been prepared under the
historical cost convention, except as disclosed in the accounting policies set
out within these financial statements, and in accordance with the UK adopted
International Accounting Standards (UK-adopted International Financial
Reporting Standards ('IFRSs')) in conformity with the applicable legal
requirements of the Companies Act 2006.
The principal accounting policies applied in the preparation of these
financial statements are set out in this Note. These accounting policies have
been consistently applied to all the years presented unless otherwise stated.
The balance sheet has been presented in order of liquidity.
Comparatives have been restated due to prior period errors as set out in Note
9 and Note 19. This restatement was not as a result of a change of accounting
policies and there is no impact to profit or loss and equity.
'Adjusting items' presented in the consolidated statement of profit or loss
and related notes has been referred to as 'non-recurring expenses' in the
prior year.
The preparation of consolidated and company financial statements in conformity
with IFRS as adopted by the UK requires the use of certain critical accounting
estimates which have been disclosed in Note 2.
The consolidated and Company financial statements are presented in British
Pound Sterling (£). All values are rounded to the nearest thousand (£'000),
except when otherwise indicated.
The Group and the Company have adopted the following new or amended IFRSs and
interpretations that are effective from 1 January 2024, none of which had any
material impact on the Company's or the Group's consolidated financial
statements and the Company's financial statements.
Accounting standard Amendment/interpretation
Amendments to IAS 1 Classification of Liabilities as Current or Non-current: clarify that the
classification of liabilities as current or non-current is based solely on a
company's right to defer settlement for at least 12 months at the reporting
date. The right needs to exist at the reporting date and must have substance.
Amendments to IFRS 16, Leases Lease Liability in a Sale-and-Leaseback requires a seller-lessee to account
for variable lease payments that arise in a sale-and-leaseback transaction as
follows:
• On initial recognition, include variable lease payments when
measuring a lease liability arising from a sale-and-leaseback transaction.
• After initial recognition, apply the general requirements for
subsequent accounting of the lease liability such that no gain or loss
relating to the retained right of use is recognised.
Amendments to IAS 7, Statement of Cash Flows and IFRS 7, Financial Supplier Finance Arrangements: requires an entity to disclose qualitative and
Instruments: Disclosures (Amendment) quantitative information about its supplier finance programmes, such as terms
and conditions - including, for example, extended payment terms and security
or guarantees provided.
c) Basis of consolidation
The consolidated financial statements include the financial statements of the
Company and all of the entities controlled by the Company made up to 31
December each year. Control is achieved when the Company:
• has the power over the investee;
• is exposed, or has rights, to variable return
from its involvement with the investee; and
• has the ability to use its power to affect its
returns.
The Company reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
A subsidiary is an entity controlled directly or indirectly by the Company.
The Company controls a subsidiary when it is exposed, or has rights, to
variable returns from its involvement with the subsidiary and has the ability
to affect those returns through its power over the investee.
Consolidation of a subsidiary begins when the Company obtains control over the
subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, the results of subsidiaries acquired or disposed of during the
year are included in the consolidated profit or loss account from the date the
Company gains control until the date when the Company ceases to control the
subsidiary.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with the Group's
accounting policies.
All intragroup assets and liabilities, equity, income, expenses, and cash
flows relating to transactions between the members of the Group are eliminated
on consolidation, with the exception of foreign currency gains and losses on
intragroup monetary items denominated in a foreign currency of at least one of
the parties.
The non-controlling interest (NCI) in subsidiaries is identified separately
from the Group's equity therein. Interests of non-controlling shareholders
represent ownership interests entitling them to a proportionate share of net
assets upon liquidation initially being measured at the non-controlling
interest's proportionate share of the acquiree's identifiable net assets.
Subsequent to acquisition, the carrying amount of the NCI is the amount of
those interests at initial recognition plus the NCI's share of subsequent
changes in equity. Total comprehensive income is attributed to NCIs even if it
results in the NCI having a deficit balance. Following the capital
reorganisation in July 2023, there was no NCI as at 31 December 2024 or
31 December 2023.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions. The carrying amount of
the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any
difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to the owners of the Company.
The Group has established employee benefit trusts (EBTs) to hold shares to
meet the Group's obligation to provide shares awarded to employees under the
share incentive plan. Shares held by the EBTs are deducted from equity and
presented as Treasury Shares until such time that the shares settle. The EBT
is controlled and recognised by the Company using the look-through approach,
i.e. as if the EBT is included within the accounts of the Company.
d) Going concern
The Directors have assessed the ability of the Company and of the Group to
continue as a going concern based on the net current asset position,
regulatory capital requirements and estimated future cash flows. The Directors
have formed the view that the Company and the Group have adequate resources to
continue in existence for a period of 12 months from when these financial
statements are authorised for issuance. Accordingly, the financial statements
of the Company and the Group have been prepared on a going concern basis.
Critical to reaching this view were:
• The output of internal stress assessments which
were conducted at a Company and a Group level and modelled the impact of
severe yet plausible stresses which underpinned the Going concern assessment.
• The output of the reverse stress testing
assessment which modelled the scenarios that would have to occur in order for
the Group to fall below its Total Capital Requirement (being the aggregate of
Pillar 1 and Pillar 2A capital requirements).
In reaching their conclusions, the Directors also considered the results of
the 2024 ILAAP, the 2024 Going concern assessment, and the 2024 Recovery Plan.
i. Internal stress assessments
In total, three stresses were considered:
• Market & Climate Change Stress which
modelled the impacts of a severe global recession which leads to increased
credit defaults and widespread credit rating downgrades, a low interest rate
environment detrimentally impacting Net Interest Income and GBP sharply
depreciating against USD which led to material increases in USD denominated
Credit Risk Weighted Assets (CRWA);
• Idiosyncratic Stress which modelled the impact
of a material reduction in revenue driven by idiosyncratic events; and
• A Combined Stress which modelled the impact of
the Market & Climate Stress occurring concurrently with the Idiosyncratic
Stress.
The Group's most recent ICAAP was approved by the Board in early 2024 and
thus its conclusions were based on a version of the corporate plan agreed by
the Board during December 2023. As part of this Going Concern assessment,
severe, but plausible Idiosyncratic, Market and Climate, and Combined stresses
similar to those applied in the ICAAP are applied to the Group Corporate Plan
which was Board approved during December 2024.
In all the stresses noted above the Group maintained sizeable surpluses to
Total Capital Requirement.
ii. Reverse stress tests
The reverse stress tests are used to assess vulnerabilities of the Group and
determine what extreme adverse events would cause the business to fail. Where
any of these events are deemed to be plausible, the Group will adopt measures
to mitigate the impact of such events where plausible.
The Group did not identify reasonably possible scenarios which could result in
failure to continue in operational existence for a period of 12 months from
when these financial statements are authorised for issuance.
iii. Conclusion
The Directors are of the view that:
• There are no material uncertainties relating to events or
conditions that cast significant doubt on the Company's and the Group's
ability to continue as a going concern; and
• The significant judgements and estimates made by management in
determining whether or not the adoption of the going concern is appropriate
are disclosed in Note 2.1. The forecasts and assumptions used for impairment
assessments were the same used for the going concern assessment.
Accordingly, the financial statements have been prepared on a going concern
basis.
e) Interest income and interest expense
i) Net interest income
Interest income and interest expense for all interest-bearing financial
instruments, including interest accruals on related FX contracts, are
recognised within Net interest income in the consolidated statement of profit
or loss and other comprehensive income. The interest expense on financial
liabilities and interest income on assets that are held for collection of
contractual cash flows, where those cash flows represent solely payments of
principal and interest, is recognised using the effective interest method.
The effective interest method is a method of calculating the amortised cost of
a financial asset or financial liability and of allocating the interest income
or expense over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments or receipts (including
all fees and points paid or received that form an integral part of the
effective interest rate, transaction costs and other premiums or discounts)
through the life of the financial instrument or, when appropriate, a shorter
period, to the net carrying amount of the financial asset or financial
liability.
ii) Net (loss)/gain on financial instruments measured at fair value through
profit or loss
This balance comprises the interest income or interest expense on FX
derivatives. It is measured at the contractual interest rate.
f) Fees and commission income
Fees and commission receivable which are not an integral part of the effective
interest rate are recognised as income as the Group fulfils its performance
obligations. Fees and commission income includes the following key revenue
streams:
• Account management and payment services: the Group's performance
obligation in relation to account management services is to provide management
or maintenance services to its current account holders. The revenue for these
services is recognised over the life of the contract on a monthly basis as
fees are received. Crown Agents Bank Ltd (CAB) provides the service. Payment
services fees relate to services offered by the Group to its clients by
executing payment transactions. Revenue from providing services is recognised
at a point in time when the services are rendered i.e. when the payments are
executed.
• Pension payment fees: pension payment fees are charged to pension
companies for making payment to pension beneficiaries on their behalf. The
Group acts as a principal in rendering these services to its clients. Revenue
from providing services is recognised at a point in time when the services are
rendered i.e., when the payments are executed.
• Trade finance income
◦ Financial guarantee income: includes fixed fees earned for issuing
financial guarantee contracts. The performance obligation of the Group is to
provide financial assurance to the recipient of the guarantee in case of
payment default. Revenue is recognised over the period of the contract term.
The fees for providing financial guarantee services are charged and collected
upfront.
◦ Income from letters of credit: the Group also receives fees in
respect of the issue of letters of credit where the performance obligations
are typically fulfilled towards the end of the client contract. Where it is
unlikely that the letter of credit will be drawn down, it is recognised in fee
and commission income over the life of the facility, rather than as an
adjustment to the effective interest rate for loans expected to be drawn as
they are short-term facilities. The fees for acceptance of letters of credits
include fees and are charged and collected upfront. Other charges include
advising fees, confirming bank fees, and bank charges, all of which are
collected on the completion of the term of the letter of credit.
• Electronic platform fees: fees for the services provided by the
Group using its electronic platform to facilitate bulk payments to its
clients. Revenue is recognised at a point in time when the services are
rendered i.e., when the payments are executed.
• Risk assessment fees: fees for enhanced due diligence services
provided by the Group under fixed price contracts. Revenue is recognised over
the period the service is provided. As the contracts are time-based contracts,
revenue is determined on the time elapsed relative to the total period of the
contract period. Fees are invoiced on the completion of services or on a
quarterly basis. No significant element of financing is deemed present as the
contract allows a credit term of 30 days.
• FX Payment fees: commission earned for introducing a new client to
a third party to facilitate cash payment transactions. Revenue is recognised
at a point in time when the services are rendered by the third party.
g) Net foreign exchange gain
Net FX gain comprises the following:
• Profit on settlement of FX contracts: these profits arise on FX
Settlements involving the instruction of client payments to specific
recipients. Under the Group's FX and payment services, clients agree to terms
and conditions for all transactions at the time of signing a contract with the
Group. On trade date the Group measures these cash flows at fair value, with
further changes in fair value being recognised in profit or loss until the
settlement of the contract. This balance includes both realised and unrealised
FX income at year-end.
• Remeasurement of non-sterling balances: Foreign currency
transactions are translated into the functional currency using the spot
exchange rates at the dates of the transactions. At each period end foreign
currency monetary items are translated to the functional currency using the
closing rate. Non-monetary items measured at historical cost are translated
using the exchange rate at the date of the transaction and non-monetary items
measured at fair value are measured using the exchange rate when fair value
was determined. FX gains and losses resulting from the settlement of
transactions and from the translation at period-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the
consolidated statement of profit or loss except for FX gains and losses in
relation to instruments measured at fair value through other comprehensive
income (FVTOCI) which are recognised in other comprehensive income (OCI).
• Fair value gains or losses on derivatives: this comprises the
profits and losses on remeasurement of forward FX derivatives carried at fair
value through profit and loss (FVTPL).
• FX gain on payment transaction revenue: an FX gain or loss on
payment transactions is the difference between the spot exchange rate between
the functional currency and the foreign currency at the date of the payment
transaction.
h) Foreign currency
(i) Functional and presentational currency
The Company's and the Group's functional and presentational currency is
British Pound Sterling (£).
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated to the
functional currency using the closing rate. Non‑monetary items measured at
historical cost are translated using the exchange rate at the date of the
transaction and non-monetary items measured at fair value are measured using
the exchange rate when fair value was determined.
FX gains and losses resulting from the settlement of transactions and from the
translation at period-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the consolidated statement
of profit or loss except for FX gains and losses in relation to instruments
measured at fair value through other comprehensive income (FVTOCI) which are
recognised in other comprehensive income (OCI).
(iii) Group companies
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations are translated to the
Group's presentational currency at exchange rates prevailing at the close of
business on the balance sheet date. Income and expense items are translated at
the exchange rates on the day of the transaction.
FX differences arising on the translation of a foreign operation are
recognised in other comprehensive income and accumulated in the Foreign
Currency Translation Reserve (FCTR).
(iv) Lack of exchangeability on currencies
If a currency becomes unexchangeable either for purposes of translating
foreign currency transactions during the year or foreign operations and FX
balance sheet balances to GBP at reporting date, management estimates the spot
exchange rates for such currencies in line with IAS 21 requirements by using
either:
• an observable exchange rate without adjustment (e.g. exchange rates from
the market sources or independent providers like Reuters); and
• an estimation technique e.g. first subsequent available exchange rate from
official independent sources.
The impact of this amendment has been assessed as not material to the Group at
year-end.
i) Taxation
The tax expense for the period comprises current and deferred tax recognised
in the reporting period. Current and deferred tax are recognised in profit or
loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognised in other comprehensive income or directly in
equity respectively. If current tax or deferred tax arises from the initial
accounting for a business combination, the tax effect is included in the
accounting for the business combination.
Current or deferred tax assets or liabilities are not discounted.
Current tax
Current tax is the tax expected to be payable on the taxable profit for the
year and on any adjustment to tax payable in respect of previous years.
Taxable profit differs from net profit as reported in profit or loss because
it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting period.
A provision is recognised for those matters for which the tax determination is
uncertain but it is considered probable that there will be a future outflow of
funds to a tax authority. The provisions are measured at the best estimate of
the amount expected to become payable.
If a company within the Group incurs losses within the period, that company
may surrender trading losses and other amounts eligible for relief from
corporation tax to another Group company (the 'claimant company') for the
claimant company to set off against its own profits for corporation tax
purposes as permitted by HMRC.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit. In addition, a
deferred tax liability is not recognised if the temporary difference arises
from the initial recognition of goodwill.
j) Intangible assets (excluding Goodwill)
Intangible assets (except for Goodwill) are stated at cost less accumulated
amortisation and accumulated impairment losses. The residual value of such
intangible assets is amortised, using the straight-line method, over their
estimated useful lives, as follows:
• Core accounting software - 12.5 years;
• Other software - 5 years (subject to regular management assessment
of the economic benefit of the asset); and
• Brand/name - 50 years (acquired).
Costs associated with maintaining computer software are recognised as an
expense as incurred. Development costs that are directly attributable to the
design and testing of identifiable and unique software products controlled by
the Group are recognised as intangible assets when the following criteria are
met:
• it is technically feasible to complete the software so that it
will be available for use;
• management intends to complete the software and use or sell it;
• there is an ability to use or sell the software;
• it can be demonstrated how the software will generate probable
future economic benefits;
• adequate technical, financial and other resources to complete the
development and to use or sell the software are available; and
• the expenditure attributable to the software during its
development can be reliably measured.
Other development expenditure that does not meet these criteria is recognised
as an expense as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period. Long-term
software-as-a-service (SaaS) type contracts that do not meet the definition of
an asset (rental of software) are expensed to profit and loss over the period
of the contract in line with the benefits received.
k) Property, plant and equipment, and depreciation
Property, plant and equipment are stated in the statement of financial
position at historic cost less accumulated depreciation. Cost includes the
original purchase price of the asset and the costs attributable to bring the
asset to its working condition for its intended use. Depreciation commences
when an asset becomes available for use and is calculated to write down assets
to their residual value in equal instalments, on a straight-line basis over
their estimated useful lives, as follows:
Leasehold improvements Life of lease
Computer equipment 5 years
Fixtures and fittings 5 years
Artwork 20 years
l) Impairment of non-financial assets
At each statement of financial position date, non-financial assets not carried
at fair value are assessed to determine whether there is an indication that
the asset may be impaired, such as a decline in operational performance,
geopolitical uncertainty, economic uncertainty i.e. rising interest rates and
inflation, or changes in the outlook of future profitability among other
potential indicators. If there is such an indication the recoverable amount of
the asset is compared to the carrying amount of the asset.
Individual assets are grouped for impairment assessment purposes at the lowest
level at which there are identifiable cash inflows that are largely
independent of the cash flows of other groups of assets. This should be at a
level not higher than an operating segment. The recoverable amount of the
asset is the higher of the fair value less costs to sell and value in use.
Value in use is defined as the present value of the future cash flows before
interest and tax obtainable as a result of the asset's continued use. These
cash flows are discounted using a pre-tax discount rate that represents the
current market risk-free rate and the risks inherent in the asset. In
determining fair value less costs to sell, recent market transactions are
taken into account. If no such transactions can be identified, an appropriate
valuation model is used. If the recoverable amount of the asset is estimated
to be lower than the carrying amount, the carrying amount is reduced to its
recoverable amount. An impairment loss is recognised in the statement of
profit or loss unless the asset has been revalued then the amount is
recognised in other comprehensive income to the extent of any previously
recognised revaluation. An impairment loss recognised on goodwill is not
reversed in a subsequent period.
If an impairment loss is subsequently reversed, the carrying amount of the
asset is increased to the revised estimate of its recoverable amount, but only
to the extent that the revised carrying amount does not exceed the carrying
amount that would have been determined (net of depreciation or amortisation)
had no impairment loss been recognised in prior periods. A reversal of an
impairment loss is recognised in the statement of profit or loss and other
comprehensive income.
Goodwill is allocated on acquisition to the cash-generating unit expected to
benefit from the synergies of the combination. Goodwill is included in the
carrying value of cash-generating units for impairment testing.
Disposal groups held for sale are measured at the lower of their carrying
amount and fair value less costs to sell. At initial classification of the
disposal group as held for sale, the carrying amounts of all the individual
assets and liabilities in the disposal group are measured in accordance with
the Group's accounting policies. If fair value less costs to sell for the
disposal group is below the aggregate carrying amount of all of the assets and
liabilities included in the disposal group, the disposal group is written
down. The impairment loss is recognised in profit or loss for the period.
m) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with
commercial or central banks and exposures to money market funds (transacted
via open-ended investment companies). Cash equivalents are short-term highly
liquid investments that are readily convertible to a known amount of cash and
which are subject to an insignificant risk of changes in value. Cash
equivalents are held for the purpose of meeting short-term cash commitments
rather than for investment or other purposes.
n) Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess
of the consideration transferred over the Group's interest in the net fair
value of the net identifiable assets, liabilities and contingent liabilities
of the acquiree and the fair value of any non-controlling interest in the
acquiree.
Goodwill is tested for impairment at the end of each accounting period.
On disposal of a cash-generating unit, the attributable amount of goodwill is
included in the determination of the profit or loss on disposal. Goodwill is
accounted for at cost less accumulated impairment losses.
o) Financial instruments
Financial assets and financial liabilities are recognised in the Company and
Group statements of financial position when the Company or Group becomes a
party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair
value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in
profit or loss.
(i) Financial assets
All regular way purchases or sales of financial assets are recognised and
derecognised using trade date accounting. The trade date is the date of the
commitment to buy or sell the financial asset.
All recognised financial assets are measured subsequently in their entirety at
either amortised cost or fair value, depending on the classification of the
financial assets.
Classification of financial assets
Financial assets that meet the following conditions are measured subsequently
at amortised cost:
• the financial asset is held within a business model whose objective is
to hold financial assets in order to collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets that meet the following conditions are measured subsequently
at FVTOCI:
• the financial asset is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling the financial
assets; and
• the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Despite the foregoing, the Group and the Company may irrevocably elect to
present subsequent changes in fair value of an equity investment in other
comprehensive income if equity instruments are held as a strategic investment
and not held with the intention to realise a profit.
By default, all other financial assets are measured subsequently at fair value
through profit or loss.
The Group's financial assets measured at amortised cost consist of:
• Cash and balances at central banks;
• Loans and advances on demand to banks;
• Other loans and advances to banks;
• Other loans and advances to non-banks;
• Investment in debt securities;
• Other assets;
• Accrued income; and
• Unsettled transactions.
The nature of all financial items included in a given balance sheet line item
is as shown in the respective note breakdown.
The Group's financial assets measured at FVTPL consist of money market funds
and derivative financial instruments.
Financial assets at FVTPL are measured at fair value at the end of each
reporting period, with any fair value gains or losses recognised in profit or
loss.The Group's financial assets designated at FVTOCI comprise primarily its
investment in equity securities, which are not held for trading. The equity
instruments are held as a strategic investment and not held with the intention
to realise a profit.
Investments in equity instruments at FVTOCI are initially measured at fair
value plus transaction costs. Subsequently, they are measured at fair value
with gains and losses arising from changes in fair value recognised in other
comprehensive income and accumulated in the Investment revaluation reserve.
The cumulative gain or loss is not reclassified to profit or loss on disposal
of the equity investments, instead, it is transferred to retained earnings.
Dividends on these investments in equity instruments are recognised in profit
or loss in accordance with IFRS 9 unless the dividends clearly represent a
recovery of part of the cost of the investment. Dividends are included in the
'Other operating income' line item in the statement of profit or loss and
other comprehensive income.
Interest income is recognised using the effective interest method for debt
instruments measured subsequently at amortised cost (Note 1 (e)) above.
Interest income is recognised in the statement of profit or loss and other
comprehensive income in the 'Net interest income' line item (Note 4).
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset
and substantially all the risks and rewards of ownership of the asset to
another entity.
On derecognition of a financial asset the difference between the asset's
carrying amount and the sum of the consideration received and receivable is
recognised in profit or loss.
(ii) Financial liabilities
Debt and equity instruments are classified as either financial liabilities or
as equity in accordance with the contractual substance of the contractual
arrangements and the definitions of a financial liability and an equity
instrument.
Classification of financial liabilities
All financial liabilities are measured subsequently at amortised cost using
the effective interest method or at fair value through profit and loss.
Financial liabilities at fair value through profit and loss
The Group's financial liabilities at fair value through profit and loss
consist of derivative liabilities (see below for policy on derivative
financial instruments).
Financial liabilities at fair value through profit and loss are measured at
fair value, with any gains or losses arising on changes in fair value
recognised in profit or loss.
Financial liabilities at amortised cost
The Group's financial liabilities at amortised cost consist of client
accounts, unsettled transactions and other liabilities such as trade
creditors, funds received in advance, transactions credited by third-party
nostro providers and other creditors.
Financial liabilities at amortised cost are measured subsequently at amortised
cost using the effective interest method (see Note 1(e) above).
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group's
obligations are discharged, cancelled or have expired. The difference between
the carrying amount of the financial liability derecognised and the
consideration paid and payable is recognised in profit or loss.
(iii) Derivative financial instruments
The Group's derivatives policy only permits dealing in forward FX contracts to
hedge, to provide services to clients or to facilitate cash management.
Derivative financial instruments are initially recognised at fair value on the
date a derivative contract is entered into and are subsequently remeasured at
their fair value at the reporting date.
A derivative with a positive fair value is recognised as a financial asset
whereas a derivative with a negative fair value is recognised as a financial
liability.
Hedge accounting is not applied.
(iv) Offsetting
Financial assets and liabilities are offset and the net amounts presented in
the financial statements only when there is a legally enforceable right to set
off the recognised amounts and there is an intention to settle on a net basis
or to realise the asset and settle the liability simultaneously.
(v) Equity
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities.
Repurchase of the Company's own equity instruments is recognised and deducted
directly from equity. No gain or loss is recognised in profit or loss on the
purchase, sale, issue or cancellation of the Company's own equity instruments.
(vi) Financial guarantee contracts and letter of credit confirmations/bill
acceptances - provisions
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make
specified payments to reimburse the holder for a loss it incurs because a
specified debtor fails to make payments when due in accordance with the terms
of a debt instrument.
Letters of credit confirmations/bill acceptances
A letter of credit confirmation/acceptance is a letter from an issuing bank
guaranteeing that a buyer's payment to a seller will be received on time and
for the correct amount. The Group confirms/accepts the letters of credit
issued by an issuing bank and charges fixed fees which are received either in
advance or at a later date.
Fees relating to financial guarantee contracts and letter of credit
confirmations / bill acceptances issued by the Group can be received upfront
and these fees are amortised on a straight-line basis to income over the year.
The receivable increases over the life of the contract as service is performed
with the corresponding recognition of income in the statement of profit or
loss. All financial guarantee contracts issued by the Group are subsequently
measured at the higher of:
• the amount of the loss allowance determined in accordance with
IFRS 9; and
• the amount initially recognised less, where appropriate, the
cumulative amount of income recognised in accordance with the Group's revenue
recognition policies.
Such amounts are presented as provisions on the statement of financial
position and the remeasurement is included within the reversal of
impairment/(impairment loss) on financial assets at amortised cost.
(vii) Impairment of financial assets
The Group recognises loss allowances for Expected Credit Loss (ECL) in
accordance with IFRS 9 on financial assets.
Equity investments are not subject to impairment, consistent with IFRS 9.
ECLs are required to be measured through a loss allowance at an amount equal
to:
• 12-month ECL (referred to as Stage 1); or
• full lifetime ECL (referred to as Stage 2 and
Stage 3).
For Stages 1 and 2, interest revenue is calculated on the gross carrying
amount. Under Stage 3, interest revenue is calculated based on the net
carrying amount (gross amount less ECL).
The amount of ECL is updated at each reporting date to reflect changes in
credit risk since initial recognition of the respective financial instrument.
For these financial assets, the Group recognises lifetime ECL when there has
been a significant increase in credit risk since initial recognition. However,
if the credit risk on the financial instrument has not increased significantly
since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all
possible default events over the expected life of a financial instrument. In
contrast, 12-month ECL represents the portion of lifetime ECL that is expected
to result from default events on a financial instrument that are possible
within 12 months after the reporting date.
Significant increase in credit risk
The Group monitors all financial assets, financial guarantee contracts and
letter of credit confirmations/bill acceptances that are subject to the
impairment requirements to assess whether there has been a significant
increase in credit risk since initial recognition. If there has been a
significant increase in credit risk the Group will measure the loss allowance
based on lifetime rather than 12-month ECL.
In assessing whether the credit risk on a financial instrument has increased
significantly since initial recognition, the Group compares the risk of a
default occurring on the financial instrument at the reporting date with the
risk of a default occurring on the financial instrument at the date of initial
recognition. In making this assessment, the Group considers both quantitative
and qualitative information that is reasonable and supportable, including
historical experience and forward-looking information that is available
without undue cost or effort. Forward-looking information considered includes
the future prospects of the industries in which the Group's debtors operate,
obtained from economic expert reports, financial analysts, governmental
bodies, relevant think-tanks and other similar organisations, as well as
consideration of various external sources of actual and forecast economic
information that relate to the Group's core operations.
In particular, the following information is taken into account when assessing
whether credit risk has increased significantly since initial recognition:
• an actual or expected significant deterioration in the financial
instrument's external (if available) or internal credit rating;
• significant deterioration in external market indicators of credit
risk for a particular financial instrument, e.g., a significant increase in
the credit spread, the credit default swap prices for the debtor, or the
length of time or the extent to which the fair value of a financial asset has
been less than its amortised cost;
• existing or forecast adverse changes in business, financial or
economic conditions that are expected to cause a significant decrease in the
debtor's ability to meet its debt obligations;
• an actual or expected significant deterioration in the
operating results of the debtor;
• economic uncertainty i.e., inflation and rising interest
rates;
• geopolitical uncertainty;
• significant increases in credit risk on other financial
instruments of the same debtor; and
• an actual or expected significant adverse change in the
regulatory, economic, or technological environment of the debtor that results
in a significant decrease in the debtor's ability to meet its debt
obligations.
Irrespective of the outcome of the above assessment, the Group assumes that
the credit risk on a financial asset has increased significantly since initial
recognition when contractual payments are more than 30 days past due, unless
the Group has reasonable and supportable information that demonstrates
otherwise. Despite the foregoing, the Group assumes that the credit risk on a
financial instrument has not increased significantly since initial recognition
if the financial instrument is determined to have low credit risk at the
reporting date. A financial instrument is determined to have low credit risk
if:
• the financial instrument has a low risk of default;
• the debtor has a strong capacity to meet its contractual cash flow
obligations in the near term; and
• adverse changes in economic and business conditions in the longer
term may, but will not necessarily, reduce the ability of the borrower to
fulfil its contractual cash flow obligations.
The Group considers a financial asset to have low credit risk when the asset
with a credit rating of 'investment grade' in accordance with the globally
understood definition, and a high credit risk when the asset has a credit
rating of 'sub-investment grade'. Throughout the lifetime of the account, the
Group monitors the behaviour of the asset based on its financial position and
assesses whether the asset has any amounts past due. The Group assigns a
'performing' status when the counterparty has a strong financial position and
there is no past due amounts, and a 'non-performing' status when there is a
degradation in the financial position and subsequent arrears.
For financial guarantee contracts and letter of credit confirmations/bill
acceptances, the date that the Group becomes a party to the irrevocable
commitment is considered to be the date of initial recognition for the
purposes of assessing the financial instrument for impairment. In assessing
whether there has been a significant increase in the credit risk since initial
recognition of a financial guarantee contract, the Group considers the changes
in the risk that the specified debtor will default on the contract.
The Group regularly monitors the effectiveness of the criteria used to
identify whether there has been a significant increase in credit risk and
revises them as appropriate to ensure that the criteria are capable of
identifying significant increase in credit risk before the amount becomes past
due.
Definition of default
The Group considers the following as constituting an event of default for
internal credit risk management purposes as historical experience indicates
that financial assets that meet the earlier of either of the following
criteria are generally not recoverable:
• when there is a breach of financial covenants by the debtor; or
• information developed internally or obtained from external
sources indicates that the debtor is unlikely to pay its creditors,
including the Group, in full.
Irrespective of the above analysis, the Group considers that default has
occurred when a financial asset is more than 90 days past due unless the Group
has reasonable and supportable information to demonstrate that a more lagging
default criterion is more appropriate.
Write-off policy
The Group writes off a financial asset when there is information indicating
that the debtor is in severe financial difficulty and there is no realistic
prospect of recovery, e.g. when the debtor has been placed under liquidation
or has entered into bankruptcy proceedings. Financial assets written off may
still be subject to enforcement activities under the Group's recovery
procedures, taking into account legal advice where appropriate. Any recoveries
made are recognised in profit or loss.
Measurement and recognition of ECLs
ECLs are a probability-weighted estimate of the present value of credit
losses. These are measured as the present value of the difference between the
cash flows due to the Group under the contract and the cash flows that the
Group expects to receive arising from the weighting of multiple future
economic scenarios, discounted at the asset's Effective Interest Rate (EIR).
The measurement of expected credit losses is a function of the probability of
default, loss given default (i.e. the magnitude of the loss if there is a
default) and the exposure at default. The assessment of the probability of
default and loss given default is based on historical data adjusted by
forward-looking information. As for the exposure at default, for financial
assets, this is represented by the assets' gross carrying amount at the
reporting date; for financial guarantee contracts and letter of credit
confirmations/bill acceptances, the exposure includes the amount of guaranteed
debt that has been drawn down as at the reporting date, together with any
additional guaranteed amounts expected to be drawn down by the borrower in the
future by default date determined based on historical trend, the Group's
understanding of the specific future financing needs of the debtors, and other
relevant forward-looking information.
For financial assets, the expected credit loss is estimated as the difference
between all contractual cash flows that are due to the Group in accordance
with the contract and all the cash flows that the Group expects to receive,
discounted at the original effective interest rate.
For a financial guarantee contract and letter of credit confirmations/bill
acceptances, as the Group is required to make payments only in the event of a
default by the debtor in accordance with the terms of the instrument that is
guaranteed, the expected loss allowance is the expected payments to reimburse
the holder for a credit loss that it incurs less any amounts that the Group
expects to receive from the holder, the debtor, or any other party.
If the Group has measured the loss allowance for a financial instrument at an
amount equal to lifetime ECL in the previous reporting period but determines
at the current reporting date that the conditions for lifetime ECL are no
longer met, the Group measures the loss allowance at an amount equal to
12-month ECL at the current reporting date.
The Group measures ECL on an individual basis, or on a collective basis for
portfolios of loans that share similar economic risk characteristics. The
measurement of the loss allowance is based on the present value of the asset's
expected cash flows using the asset's original EIR, regardless of whether it
is measured on an individual basis or a collective basis.
Presentation of ECL
Loss allowances for ECL are presented in the statement of financial position
as follows:
• for financial assets measured at amortised cost: as a deduction
from the gross carrying amount of the assets;
• financial guarantee contracts: as a provision.
The Group recognises an increase or decrease in impairment in profit or loss
for all financial instruments with a corresponding adjustment to their
carrying amount through a loss allowance account.
p) Employee benefits
The Group provides a range of benefits to employees, including annual bonus
arrangements, paid holiday arrangements, medical insurance and defined
contribution pension plans. The Group has implemented a one-off Free Share
Scheme following the 2023 listing and a Matching/Partnership Share Scheme,
both schemes for all employees. The Group also provides share incentive
schemes to Executive Directors and certain other key employees or senior
management as follows:
• Long-Term Incentive Plans;
• a Matching/Partnership Share Incentive Plan (all employees);
• a Free Shares Plan (all employees);
• the rights to invest in restricted shares of Group companies*; and
• the rights to restricted share units of Group companies*.
* Applicable to 2023 only.
Short-term benefits
Short-term benefits, including holiday pay and other similar non-monetary
benefits, are recognised as an expense in the period in which the service is
received.
Pension contributions
All pension contributions are accounted for as defined contributions and paid
over on a monthly basis. No liability for pension entitlement accrues to the
Group.
Share-based payment arrangements
The Group provides share-based payment arrangements to certain employees (as
noted above).
The awards are equity-settled arrangements and are measured at fair value of
the equity instruments at the grant date. The fair value is expensed on a
straight-line basis over the vesting period. The fair value of the employee
services received in exchange for the grant of the awards is recognised in
employee benefit expenses together with a corresponding increase in equity
(retained earnings), over the period in which the service and the performance
conditions are fulfilled (the vesting period). The grant date fair value is
not adjusted for subsequent changes in the fair value of the equity
instruments.
Long-term incentive plan (LTIP) awards are subject to performance conditions.
LTIP awards granted in 2023 and 2024 are subject to both market performance
conditions (relating to Total Shareholder Returns) and non-market performance
conditions (relating to Earnings Per Share).
Service conditions are not taken into account when determining the grant date
and for fair value of awards, but the likelihood of the conditions being met
is assessed as part of the Group's best estimate of the number of equity
instruments that will ultimately vest. Any other conditions attached to an
award, but without an associated service requirement, are non-vesting
conditions. Non-vesting conditions are reflected in the fair value of an
award. Share awards vest when service conditions are met.
Where the equity-settled arrangements are modified before the vesting date,
and are of benefit to the employee, the incremental fair value is recognised
over the period from the date of modification to the date of vesting. If
modified after vesting, it is recognised immediately. Where a modification is
not beneficial to the employee there is no change to the charge for the
share-based payment. Settlement and cancellations are treated as an
acceleration of vesting and the unvested amount is recognised immediately in
the statements of profit or loss and other comprehensive income.
The Group has no cash-settled arrangements.
q) Investments in subsidiaries
Investments in subsidiaries are non-monetary assets measured at cost less
impairment. Refer to Note 2 for the judgements and estimates involved in the
impairment assessment.
r) Discontinued operations and disposal group held for sale
Discontinued operations and disposal group held for sale is a component of the
Group's business, the operations and cash flows of which can be clearly
distinguished from the rest of the Group and which:
• represents a separate major line of business or
geographical area of operation;
• is part of a single coordinated plan to dispose of a
separate major line of business or geographical area of operation; or
• is a subsidiary acquired exclusively with a view to
resale.
Classification as a discontinued operation occurs upon disposal, abandonment
or when the operations meet the criteria to be classified as held for sale.
This condition is regarded as satisfied only when the sale is highly probable
and the asset or disposal group is available for immediate sale in its present
condition. Management must be committed to the sale, which should be expected
to qualify for recognition as a completed sale within one year of the date of
classification. Property, plant and equipment, and intangible assets, once
classified as held for sale, are not depreciated or amortised.
Disposal groups classified as held for sale are measured at the lower of the
carrying value and the fair value less costs to sell. Non-current assets and
disposal groups are classified as held for sale if their carrying amounts will
be recovered through a sale transaction rather than continued use. When an
operation is classified as a discontinued operation, the comparative statement
of profit or loss and other comprehensive income is re-presented as if the
operation had been discontinued from the start of the comparative year.
When the Group ceases to have control of an undertaking (disposal group), it
is at this point that the Group ceases to consolidate the operations and any
gain or loss on disposal is recognised in the Group consolidated statement of
profit or loss. In addition, any movements previously recognised in other
comprehensive income in respect of that entity are accounted for as if the
Group had directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive income are
reclassified to profit or loss.
s) Provisions and contingent liabilities
Provisions are recognised in respect of present obligations arising from past
events where it is probable that outflows of resources will be required to
settle the obligations and they can be reliably estimated. Provisions also
comprises dilapidation provision on the leased office space and an ECL
provision in relation to off balance sheet assets (i.e financial guarantees,
Working Capital commitments and letters of credit confirmations / bill
acceptances).
Contingent liabilities are possible obligations whose existence depends on the
outcome of uncertain future events or those present obligations where the
outflows of resources are uncertain or cannot be measured reliably. Contingent
liabilities are not recognised in the consolidated and Company financial
statements but are disclosed unless they are remote.
t) Share capital
On issue of ordinary shares, any consideration received is included in equity
net of any directly attributable transaction costs.
u) Earnings per share
i. Basic earnings per share
Basic earnings per share is calculated on the Group's profit or loss after
taxation attributable to the owners of the parent and based on the weighted
average of ordinary shares at the end of the year.
ii. Diluted earnings per share
Diluted earnings per share is calculated on the Group's profit or loss after
taxation attributable to owners of the parent and based on the weighted
average of ordinary shares at the end of the year and the weighted average
number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares. Performance-based
employee share options are treated as contingently issuable shares because
their issue is contingent upon satisfying specified conditions in addition to
the passage of time.
v) Dividends
Dividends are recognised in the financial statements in the period they are
paid.
w) Leases (Group as lessee)
The Group assesses whether a contract is, or contains, a lease, at inception
of the contract. The Group recognises a right-of-use asset and corresponding
lease liabilities with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low-value assets (such as small items of
fixtures and equipment and value of less than £10,000). For these leases, the
Group recognises the lease payments as an Operating Expense on a straight-line
basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the leased
assets are consumed.
The lease liabilities are initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
Group uses its incremental borrowing rate.
The incremental borrowing rate depends on the term, currency and start date of
the lease and is determined based on a series of inputs including: the
risk-free rate based on government bond rates; a country-specific risk
adjustment; a credit risk adjustment based on bond yields; and an
entity-specific adjustment when the risk profile of the entity that enters
into the lease is different to that of the Group.
Lease payments included in the measurement of the Group's lease liabilities
are fixed lease payments less any lease incentives receivable.
The lease liabilities are presented as a separate line in the consolidated
statement of financial position.
The lease liabilities are subsequently measured by increasing the carrying
amount to reflect interest on the lease liabilities (using the effective
interest method) and by reducing the carrying amount to reflect the lease
payments made.
The right-of-use assets comprise the initial measurement of the corresponding
lease liabilities, lease payments made at or before the commencement day, less
any lease incentives received and any initial direct costs and estimations of
any dilapidation obligations. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and
useful life of the right-of-use asset. The depreciation starts at the
commencement date of the lease. The right-of-use assets are presented as a
separate line in the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired
and accounts for any identified impairment loss as described in the
'impairment of non-financial assets' policy.
In line with IFRS 9, a liability is derecognised when the obligation in the
contract is extinguished or cancelled, which in the context of the lease
liabilities, they are derecognised when the Group and its subsidiaries have
been legally released from the obligations by the creditors.
The dilapidation provision is recognised in accordance with IAS 37 when a
present obligation exists due to a lease agreement requiring restoration of
premises. It is initially measured at the best estimate of the expected costs
to settle the obligation, discounted to present value if the time value of
money is material. Subsequently, the provision is reviewed at each reporting
date and adjusted for changes in estimates, such as cost revisions or discount
rate changes. If initially discounted, the unwinding of the discount is
recognised as an interest expense in profit or loss.
x) New and revised IFRS accounting standards in issue but not yet effective
At the date of authorisation of these consolidated financial statements, the
Group has not applied the following new and revised IFRS Accounting Standards
that have been issued but are not yet effective.
Accounting standard* Details of amendment
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Issued August 2023). The standard is effective 1
January 2025.
Amendments to the Classification and Measurement of Financial Instruments - The amendments provide guidance related to:
Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:
Disclosures effective 1 January 2026 • Financial assets with ESG-linked features;
• Settlement of financial liabilities by electronic payments.
New sustainability standards issued by the International Sustainability The ISSB issued its first two sustainability reporting standards on 26 June
Standards Board (ISSB) effective 1 January 2026 in the UK 2023. This included:
• General Requirements for Disclosure of Sustainability-related
Financial Information (IFRS S1), the core framework for the disclosure of
material information about sustainability-related risks and opportunities
across an entity's value chain.
• Climate-related Disclosures (IFRS S2), the first thematic standard
issued that sets out requirements for entities to disclose information about
climate-related risks and opportunities.
IFRS 18 Presentation and Disclosure in Financial Statements effective 1 IFRS 18 affects all companies, bringing significant changes to how companies
January 2027 present their income and what information companies need to disclose, and
making certain 'non-GAAP' measures part of audited financial statements for
the first time. There will be three new categories of income and expenses, two
defined income statement subtotals and one single note on management-defined
performance measures.
IFRS 19 Reduced Disclosures for Subsidiaries To simplify and reduce the cost of financial reporting by subsidiaries while
maintaining the usefulness of their financial statements. This standard is not
applicable to the Group consolidated financial statements.
* Anything not mentioned in the above table is not
relevant.
The Group does not expect that the adoption of the Standards listed above will
have a material impact on the consolidated and Company Financial Statements of
the Group and the Company in future periods, with the exception of IFRS 18
where the impact has yet to be determined.
2 - Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In applying the Group's accounting policies, which are described in Note 1,
the Directors are required to make judgements (other than those involving
estimations) that have a significant impact on the amounts recognised and to
make estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The critical judgements, apart from those involving estimation, made by
management in applying the Group's accounting policies in these consolidated
financial statements and the key sources of estimation uncertainty that may
have a significant risk of causing a material adjustment to the carrying
amount of assets and liabilities within the next financial year, which
together are considered critical to the Group's results and financial
position, are as follows:
2.1 Key judgements and estimates in impairment and going concern assessment
The assessment of goodwill and intangible assets (Note 13), investments in
subsidiary undertakings (Note 14) for impairment and appropriateness of going
concern reflects management's best estimate of the future cash flows of the
Cash-Generating Units (CGUs) and the rates used to discount these cash flows,
both of which are subject to uncertain factors as follows:
Judgements Estimates
The accuracy of forecast cash flows is subject to a high degree of uncertainty Cash flow forecasts
in volatile market conditions.
The future cash flows of the CGUs are the cash flows projected for a
Where such circumstances are determined to exist, management re-tests three-year period for which detailed forecasts are available and utilise
goodwill, intangible assets and investments in subsidiaries for impairment assumptions regarding the long-term pattern of sustainable cash flows
more frequently than once a year when indicators of impairment exist. thereafter. Forecasts are compared with actual performance and verifiable
Judgement was involved in calculating the cash flow forecasts and it involved economic data, but they reflect management's view of future business prospects
consideration of past business performance, current market conditions and our at the time of the assessment.
macroeconomic outlook to estimate future earnings.
Key assumptions underlying cash flow projections reflect management's outlook
on interest rates and inflation, as well as business strategy, including the Discount rates (Weighted Average Cost of Capital (WACC))
scale of investment in technology and automation.
The rates used to discount future expected cash flows can have a significant
effect on their valuation, and are based on the costs of equity and debt
assigned to individual CGUs. The cost of equity percentage is generally
derived from a capital asset pricing model and market implied cost of equity,
which incorporates inputs reflecting a number of financial and economic
variables, including the risk-free interest rate in the country concerned and
a premium for the risk of the business being evaluated. These variables are
subject to fluctuations in external market rates and economic conditions
beyond management's control.
Terminal growth rates
The terminal growth rate is used to extrapolate the cash flows in perpetuity
because of the long-term perspective within the Group of business units making
up the CGUs.
Refer to sensitivity analysis in Note 20.
2.2 Key judgements and estimates in impairment of financial assets and of
certain off balance sheet items
The calculation of the Group's ECL under IFRS 9 requires the Group to make a
number of judgements, assumptions and estimates. The most significant are set
out below:
Judgements Estimates
Defining what is considered to be a significant increase in credit risk Credit Risk sets out the assumptions used in determining ECL, and provides an
indication of the sensitivity of the result to the application of different
Selecting and calibrating the Probability of Default (PD), Loss Given Default weightings being applied to different economic assumptions.
(LGD) and Exposure At Default (EAD) models, which support the calculations,
including making reasonable and supportable judgements about how models react
to current and future economic conditions.
Selecting model inputs and economic forecasts, including determining whether
sufficient and appropriately weighted economic forecasts are incorporated to
calculate unbiased expected loss.
Making management adjustments to account for late-breaking events, model and
data limitations and deficiencies, and expert credit judgements (none
were noted).
2.3 Key judgements on classification of adjusting items
Some of the expenses accounted for by the Group have been separately
identified as Adjusting items in the Consolidated Statement of Profit or Loss
and Other comprehensive income on the basis that such presentation enhances
the transparency and understanding of the Group's financial performance.
Judgement has been applied in determining whether an item of expense is
Adjusting in accordance with the Group's accounting policy. Based on an
assessment of the nature, timing, and frequency of the events giving rise to
certain expenses, the following items have been presented as Adjusting items:
• Professional costs incurred in connection with review and
implementation of strategic options;
• Staff bonuses related to listing and to take on commitments
(applicable to 2023 only); and
• Senior management transitioning costs.
2.4 Key judgements on Incremental Borrowing Rate (IBR)
The Group signed two (2023: none) lease agreements and the office space became
available for use during the year resulting in recognition of right of use
assets (ROU) and lease liabilities. There was no interest rate implicit in the
lease agreements, therefore, management considered the guidance within IFRS
16, and calculated an IBR by determining:
• an appropriate corporate bond yield being the average of specific
corporate bonds which (i) had a tenor similar to the weighted tenor of the
leases and (ii) had a credit rating similar to CAB (BB)'s credit rating and
with a maturity date close to that of the weighted tenor of the lease
agreements;
• an asset-specific adjustment (for lease term above five years)
which relates particularly to the asset being leased and is based on prime vs
secondary office properties margins data published by the CASS Business School
UK Commercial Property Lending Report.
The key judgement is not considered to have a significant source of estimation
uncertainty.
2.5 Key judgement on estimation of Research and Development Expenditure Costs
The Group recognises the research and development tax rebate (an HMRC tax
claim) as income in the accounts as it is highly probable that the claim will
result in a future economic benefit and can be reliably measured. The amount
of the research and development tax rebate recognised in the financial
statements is based on the management's best estimate of the probable amount
that will be received.
3 - Segment Reporting
Operating segments are determined by the Group's internal reporting to the
Chief Operating Decision Maker (CODM). The CODM has been determined to be the
Group's Executive Committee. The information regularly reported to the
Executive Committee for the purposes of resource allocation and the assessment
of performance, is based wholly on the overall activities of the Group. Based
on the Group's business model, the Group has determined that it has only one
reportable segment of continuing operations.
The CODM assesses the profitability of the segment based on a measure of
EBITDA and Adjusted EBITDA and is defined as follows:
• EBITDA - Calculated as Profit before Tax and IFRS 16 lease
liability interest, depreciation and amortisation. Although it is typical to
calculate EBITDA before interest, our net interest income is generated from
operational client deposits and subsequent re-investment to generate returns
for the shareholder and therefore remains included within EBITDA.
• Adjusted EBITDA - EBITDA before Adjusting items (Adjusting items
were referred to as Non-recurring items in the prior year)
All revenue from external clients is generated through its operations located
in the UK and on that basis is wholly attributable to the UK and all
non-current assets, other than financial instruments and deferred tax assets,
are located in the UK.
a) Income
The Group derives its income from continuing and discontinued operations as
follows:
Year ended 31 December 2024 Continuing operations Discontinued operations Total
Income by business line £'000 £'000 £'000
FX 41,215 - 41,215
Payments 27,292 - 27,292
Banking services and other income 37,037 - 37,037
Total income - net of interest expense 105,544 - 105,544
Year ended 31 December 2023 Continuing operations Discontinued operations Total
Income by business line £'000 £'000 £'000
FX 68,518 4 68,522
Payments 34,229 855 35,084
Banking services and other income 34,321 - 34,321
Total income - net of interest expense 137,068 859 137,927
FX: Revenue categorised as FX is from clients with a need to exchange a bulk
amount from one currency for another without onward payment to another party.
The Group's FX revenue is derived from profit on settlement of FX contracts,
remeasurement of sterling balances, fair value losses on derivatives and FX
gain on payment transaction revenue. The accounting policy for the Group's Net
FX gain revenue and its components is disclosed in Note 1 (g).
Payments: The Group's payments revenue include payments FX, same currency
payments (corresponding activity income, and account management fees), pension
payments and platform revenue. Payments FX comprises of the margin derived
from bid-ask spreads on foreign currency conversion and fees paid by clients
to transfer money from or to a third party, cross borders.
Same currency relates to payment services provided for payments transacted
without an exchange of foreign currency largely relating to major market
currency clearing and includes fees for account management activities and
payments execution. Pension payments fees relate to amounts earned on
processing of pension scheme foreign currency payments. Platform revenue
relates to recurring fixed fees rather than fees earned on transaction
volumes.
Banking services and other income: The Group also generates income from trade
finance (including trade finance and letters of credit), working capital
services and risk management consulting fees, interest earned from other
placements with banks, interest earned from advances to non-banks outside the
Working Capital facility, interest from staff loans, and net gains from
financial assets/liabilities measured at fair value. The Group takes client
funds earmarked for other needs as client deposits and makes short-term
investment in the money market to generate gain on money market funds.
b) Profitability
The Group measures profitability for the reporting segment on an EBITDA and
Adjusted EBITDA basis. EBITDA is useful as a measure of comparative operating
performance between both previous periods and other companies as it removes
the effect of taxation, depreciation and amortisation as well as items
relating to capital structure, while adjusted EBITDA also removes the effect
of adjusted items.
Reconciliation of profit before tax to EBITDA Continuing operations Discontinued operations Total
and Adjusted EBITDA
Year ended 31 December 2024 £'000 £'000 £'000
Profit before taxation 17,594 - 17,594
Adjusted for:
Interest expenses on lease liabilities (Note 4) 897 - 897
Amortisation 6,213 - 6,213
Depreciation ¹ 2,320 - 2,320
EBITDA 27,024 - 27,024
Adjusting items 3,741 - 3,741
Adjusted EBITDA 30,765 - 30,765
Reconciliation of profit before tax to EBITDA Continuing operations Discontinued operations Total
and Adjusted EBITDA
Year ended 31 December 2023 £'000 £'000 £'000
Profit/(loss) before taxation 37,617 (287) 37,330
Adjusted for:
Interest expense on lease liability 65 - 65
Amortisation 4,607 13 4,620
Depreciation ¹ 1,243 - 1,243
EBITDA 43,532 (274) 43,258
Adjusting items 21,101 - 21,101
Adjusted EBITDA 64,633 (274) 64,359
1 Balance includes depreciation on property, plant
and equipment, and depreciation on right of use of asset.
4 - Net Interest Income
Consolidated
2024 2023
Interest income: £'000 £'000
Interest on cash and balances at central banks 29,894 28,147
Interest on loans and advances 12,993 7,676
Interest on letters of credit 1,347 599
Interest on investment in debt securities 14,428 15,802
Other interest income and similar income ¹ 194 129
Interest income 58,857 52,353
Interest expense:
Interest on financial liabilities at amortised cost (38,232) (30,685)
Interest expense on lease liabilities (897) (65)
Other interest expense ¹ (171) (104)
Interest expense (39,300) (30,854)
Total net interest income 19,557 21,499
1 Other interest income and similar income and other
interest expense are interest received, interest accrued, or interest paid on
the collateral balances paid to or received from our FX Swap Counterparties.
5 - Fees and Commissions Income
Consolidated
2024 2023
£'000 £'000
Fees and commissions income:
Account management and payments 12,868 11,750
Pension payment fees 1,556 1,467
Trade finance 972 725
Electronic platform fees 164 610
FX Payment Fees 185 19
Total fees and commission income 15,745 14,571
At 31 December 2024, the Group held on its consolidated statement of
financial position £567k (2023: £531k) of accrued income in respect of
services provided to clients and £17k (2023: £75k) of deferred income
(entirely recognised within one year) in respect of amounts received from
clients for services to be provided after the year end.
6 - Net Foreign Exchange Gain
Consolidated
2024 2023
£'000 £'000
Profit on settlement of FX contracts and remeasurement of non-sterling 31,010 76,402
balances
Fair value gains/(losses) on derivatives¹ 10,205 (7,884)
FX gain on payment transaction revenue 12,588 19,899
Total 53,803 88,417
1 Foreign exchange derivative financial instruments
are mandatorily held at fair value through profit or loss and this balance
relates to unrealised gain/(loss) during the period. The derivatives have been
transacted to i) economically hedge assets and liabilities in foreign
currencies and ii) trade on behalf of clients.
7 - Operating Expenses
Consolidated
2024 2023
£'000 £'000
Staff costs and Directors' emoluments
Salaries and bonuses 37,155 37,646
Share-based payments 996 1,359
Social security costs 4,753 4,401
Pension costs 2,701 2,180
Fees payable to the auditor
Audit
- the Company 711 724
- Group companies ¹ 731 1,090
Audit related services 319 477
Depreciation and amortisation
Amortisation of intangible assets (Note 13) 6,213 4,607
Depreciation of property, plant, and equipment (Note 11) 767 798
Depreciation of right-of-use assets (Note 12) 1,553 445
Other expenses
Low-value lease expenses 59 47
Clearing costs 2,441 2,314
Other bank charges 3,103 2,861
Software support/licences 7,599 5,903
Process automation costs 2,115 2,000
Professional fees 2,529 2,573
Irrecoverable VAT 1,344 1,090
Other operating expenses 9,570 7,431
Operating expenses before adjusting items 84,659 77,946
Adjusting items ² 3,741 21,101
Total operating expenses after adjusting items 88,400 99,047
1 Audit fees includes £nil (2023: £379k) of prior
year audit fees. Additional services provided by the auditor are noted in (a)
below.
2 Adjusting items consist of material adjusting items that are considered
exceptional in nature by virtue of their size and/or incidence and as a result
of arising outside of the normal trading of the Group. In determining whether
a cost is adjusting, the Group considers the nature and frequency of similar
events or transactions that have occurred in the past, as well as the
likelihood of similar events or transactions in the future. Adjusting items
were referred to as non-recurring items in the prior year.
a) Adjusting items can be analysed as follows:
Consolidated
2024 2023
£'000 £'000
Professional costs incurred in connection with review of strategic options: 1,687 16,559
Fees related to services provided by the auditor - 1,250
Issuer's counsel - 4,356
Mergers and Acquisition, Tax and Structuring advice - 3,198
Capital Markets advisory - 2,391
Public Offering of Securities Insurance and Directors' and Officers' Insurance - 334
Joint Global Co-ordinator - 1,553
Admission fee - 411
Project consultancy services - 400
Refresh report on the business - 367
Stamp duty and professional fees - 408
Strategic consultants 698 -
Due diligence triggered by investor bid 677 -
Other¹ 312 1,891
Transition costs relating to the new Executive Committee 2,054 -
Redundancies 202 -
Dual running, recruitment and settlement agreements 1,852 -
Bonus related to: - 4,542
Listing - 2,288
Take-on commitments - 2,254
Total adjusting items 3,741 21,101
1 Other comprises various balances which relate to
the pursuance of the strategic options and other one-off costs e.g trustee
services, remuneration advisors' fees, transcription and printing services.
b) Number of employees
The monthly average number of full-time equivalent staff employed within the
Group, including Executive Directors, was 378 (2023: 310) and the number of
employees at year end was 421 (2023: 389).
Average number of persons employed during the year by legal entity 2024 2023
Crown Agents Bank Limited 364 303
CAB US Inc (formerly Segovia Technology Company) 6 6
CAB Europe BV 8 1
Total 378 310
8 - Tax Expense
a) Analysis of tax expense for the year
i. Tax expense
Consolidated
2024 2023
£'000 £'000
Continuing and discontinued operations
Current tax
Corporation tax based on the taxable profit for the year 3,726 13,079
Adjustment in respect of prior years (861) 316
2,865 13,395
Deferred tax
Origination and reversal of temporary differences 517 332
517 332
Total tax expense in statement of profit or loss 3,382 13,727
Analysed as follows:
Continuing operations 3,382 13,727
Discontinued operations - (66)
Total tax expense for the year 3,382 13,661
Effective tax rate 19% 36%
ii. Amounts recognised directly in other comprehensive income
Consolidated
2024 2023
£'000 £'000
Aggregate deferred tax arising in the year and not recognised in net profit or
loss and recognised in other comprehensive income:
Current year 5 6
Adjustment in respect of prior years - 6
Deferred tax charge (Note 15) 5 12
b) Factors affecting tax expense for the year
The tax assessed for the year is lower (2023: higher) than the standard rate
of Corporation Tax in the UK.
Consolidated
2024 2023
£'000 £'000
Profit before taxation 17,594 37,617
Standard rate corporation tax of 25% on profit before taxation (2023: 25%/19%) 4,399 8,840
19% - 1,787
25% 4,399 7,053
Effect of:
Expenses not deductible for tax 124 4,514
Fixed asset differences (342) (19)
Losses not available for group relief - 20
Impact of overseas tax rates 62 67
Permanent difference due to banking surcharge levy - 642
Prior year adjustments (861) (337)
Total tax expense for continuing operations for the year 3,382 13,727
The Company's tax loss of £1,071k (2023: £391k) was surrendered to other
Group companies (corporation tax group relief) as permitted by HMRC. No tax
has been paid by the Company in the current year (2023: nil).
As laid out in the Finance Act 2021, from 1 April 2023, the main corporation
tax rate increased to 25% (19% previously). In addition, there is a permanent
difference due to a banking surcharge levy of 3% (8% previously) in relation
to taxable profits of banks in excess of £100m (£25m previously) from 1
April 2023. The effects of this increase are reflected in the consolidated
financial statements. The figures above incorporate the increased tax rate in
respect of timing differences expected to reverse after that date.
9 - Cash and Balances at Central Banks
Consolidated
2024 Restated
2023
£'000 £'000
Cash and balances at central banks¹ 584,679 529,835
Less: Impairment loss allowance - -
584,679 529,835
Component of cash and balances included in cash flow under:
Cash and balances at central banks¹ 584,679 529,835
Cash and balances at central banks include no encumbered assets (2023: £nil).
There are no restricted amounts within cash and balances at central banks. The
cash and bank balance at central banks is measured at amortised cost as they
meet the Solely Payment of Principal and Interest (SPPI) criterion and are
held to collect the contractual cash flows.
The carrying amount of these assets is approximately equal to their fair
value.
¹ Prior period restatement
A prior period adjustment has been made to record a reclassification of
interest receivable from Cash and balances with central banks which was
incorrectly recognised in Other loans and advances to banks instead of Cash
and balances from central banks. There was no impact to profit or loss, equity
or earnings per share. The Consolidated Statement of Financial Position as at
31 December 2023 has been restated as follows:
Other loans and advances to banks Cash and balances at central banks
Consolidated financial statements as at 31 December 2023 £'000 £'000
Year ended 31 December 2023 (as previously reported) 137,570 528,396
Prior period adjustment (1,439) 1,439
Year ended 31 December 2023 (as restated) 136,131 529,835
The Cash and balances at central banks and Other loans and advances to banks
balances have been impacted by the same prior period adjustment amount and
have been restated accordingly.
The Company had no cash and balances at central banks (2023: nil).
10 - Loans and Advances
Loans and advances are measured at amortised cost as they meet the SPPI
criterion and are held to collect the contractual cash flows.
Consolidated
Restated
2024 2023
£'000 £'000
Loans and advances (gross)
Loans and advances on demand to banks 185,563 135,203
Other loans and advances to banks¹ 180,148 136,158
Other loans and advances to non-banks 32,835 8,712
Total 398,546 280,073
Less: Impairment loss allowance
Loans and advances on demand to banks (4) (25)
Other loans and advances to banks (64) (27)
Other loans and advances to non-banks (239) (496)
Total (307) (548)
Net Loans and advances on demand to banks 185,559 135,178
Net Other loans and advances to banks 180,084 136,131
Net Other loans and advances to non-banks 32,596 8,216
Net loans and advances 398,239 279,525
Component of loans and advances included in the consolidated statement of cash
flows under:
Cash and cash equivalents 185,559 135,178
Total 185,559 135,178
The Group's other loans and advances to banks include £410k of encumbered
assets (2023: £8,264k) in relation to derivative contracts with other
financial institutions and the balances are not overdue.
The Company's loans and advances with subsidiary undertaking is receivable
from CAB and amounts to £108k (2023: £658k).
11 - Property, Plant and Equipment
Consolidated
Leasehold improvements ¹ Computer equipment Fixtures & fittings ² Total
2024 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 122 2,789 2,275 5,186
Additions 970 1,424 34 2,428
Disposals (131) (146) (13) (290)
At 31 December 2024 961 4,067 2,296 7,324
Accumulated depreciation and impairment
At 1 January 2024 111 1,907 1,977 3,995
Charge to profit or loss 248 499 20 767
Disposals (125) (89) (5) (219)
At 31 December 2024 234 2,317 1,992 4,543
Net book value
At 1 January 2024 11 882 298 1,191
At 31 December 2024 727 1,750 304 2,781
1 Includes Office fit out costs reclassified from
Fixtures and fittings.
2 Includes artwork.
Consolidated
Leasehold improvements Computer equipment Fixtures & fittings ¹ Total
2023 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 122 2,516 2,209 4,847
Additions - 348 74 422
Disposals - (75) (8) (83)
At 31 December 2023 122 2,789 2,275 5,186
Accumulated depreciation
At 1 January 2023 89 1,605 1,574 3,268
Charge to profit or loss 22 371 405 798
Disposals - (69) (2) (71)
At 31 December 2023 111 1,907 1,977 3,995
Net book value
At 1 January 2023 33 911 635 1,579
At 31 December 2023 11 882 298 1,191
1 Includes artwork.
The Directors consider property and plant for indicators of impairment at
least annually, or when there is an indicator of impairment. There are no
physically visible impairment indicators at year-end. Management have
considered the decline in the market capitalisation and the 2024 financial
performance as impairment indicators and have therefore performed an
impairment assessment of the value of the business which included property,
plant and equipment (PPE). Refer to Note 13 for the comparison between
recoverable amount (value in use of CAB) and the carrying amount of the net
assets and assessment of other impairment indicators.
No impairment charge was taken in the period (2023: £nil).
The Company had no property, plant and equipment (2023: £nil).
12 - Leases (Group as a Lessee)
The Group has recognised right-of-use (ROU) assets and lease liabilities for
its property leases which have been accounted for as individual assets and
liabilities. The discount rates used are the incremental borrowing rates in
the range of 5.33% - 7.06% (2023: (2.14%-8.99%).
The Group makes monthly/quarterly fixed payments in advance, to the lessors
for the use of the properties, and there are no variable payments. The
property leases have lease incentives, with the lease incentive receivable
being deducted from the future lease payments.
The services provided by the lessors, such as cleaning, security, maintenance,
and utilities, as part of the contract, are components which are not included
in the ROU calculation and have been expensed in the 'Other operating
expenses' line item in Note 7. These expenses amount to £861k (2023: £397k).
Dilapidation costs (restoration cost) of £1,800k (2023: nil) were added to
the ROU at initial recognition and the dilapidation provision as at 31
December 2024 amounted to £1,884k (2023: nil) with £84k interest recognised
in the statement of profit or loss and other comprehensive income.
The Group's leases of low-value fixtures and equipment are expensed in the
'Other operating expenses' line item in Note 7 on a straight-line basis (see
accounting policy in Note 1 for leases). These amounted to £59k (2023:
£47k).
There were no short-term leases during the year (2023: nil).
The lease terms covers only the non-cancellable lease term. There are no
purchase, extension, or termination options and residual guarantees in the
leases.
There are also no restrictions or covenants imposed by the leases.
The lease interest payments charged as an expense for the year totalled £897k
(2023: £65k).
The Company does not have any leases and had no lease payments under
non-cancellable operating leases during 2024 (2023: nil).
a) Right-of-use assets
All the Group's right-of-use assets are non-current assets. A reconciliation
of the Group's right-of-use assets as at 31 December 2024 and 31 December
2023 are shown below:
Consolidated
Leasehold property ¹
£'000
Cost
At 1 January 2024 1,760
Additions ² 19,061
Lease assignment3 (695)
At 31 December 2024 20,126
Accumulated depreciation
At 1 January 2024 1,071
Charge to profit or loss ¹ 1,553
Lease assignment 3 (252)
At 31 December 2024 2,372
Net book value
At 31 December 2024 17,754
Cost
At 1 January 2023 1,760
Additions -
At 31 December 2023 1,760
Accumulated depreciation
At 1 January 2023 626
Charge to profit or loss ¹ 445
At 31 December 2023 1,071
Net book value
At 31 December 2023 689
1 There is only one class of right-of-use assets
which are the property leases.
2 This relates to the lease of office space at 3
London Bridge, SE1 9SG, London and office space at 1 Rockefeller Plaza in New
York which both commenced during the year (2023: there were no new leases).
3 The lease agreement for office space at Tower 42
Building was assigned to a third party with the Landlord's consent and in line
with IFRS 9:3.3.1 the lease liability and related right-of-use asset were
derecognised at the date of assignment as CAB's obligations under the lease
are considered to have fully transferred. CAB paid £67k for the assignment of
the lease and advanced £72k to the third party to pay the deposit to the
Landlord.
Please note: the lease agreement for Quadrant House office space expired 25
June 2024. The right-of-use asset was fully depreciated and the lease
liability fully paid up.
The Directors consider ROU assets for indicators of impairment at least
annually, or when there is an indicator of impairment. There are no physically
visible impairment indicators on the leased properties at year-end. Management
view the decline in market capitalisation as an impairment indicator and
therefore performed an impairment assessment of the value of the business
which included the ROU assets. Refer to Note 13 for the comparison between the
recoverable amount (the value in use of CAB) and the carrying amount of the
net assets and assessment of other impairment indicators.
No impairment charge was taken in the period (2023: nil).
b) Lease liabilities
A reconciliation of the Group's remaining operating lease payments as at
31 December 2024 and 31 December 2023 are shown below:
Consolidated
Leasehold property
£'000
Lease liabilities as at 1 January 2024 884
Additions during the year 17,264
Payments during the year ¹ (328)
Lease assignment (Note 12a) (628)
Foreign exchange revaluation 63
Add: interest on lease liabilities 814
At 31 December 2024 18,069
Lease liabilities as at 1 January 2023 1,281
Additions during the year -
Payments during the year (462)
Add: interest on lease liabilities 65
At 31 December 2023 884
1 Payments during the year include payments for
interest on lease liabilities and the repayment of the principal portion of
the lease liability.
There were no variable lease payments expenses in the reporting period (2023:
nil).
The Group's lease liabilities as at 31 December 2024 and 31 December 2023 is
split into current and non-current portions as follows:
Consolidated
2024 2023
£'000 £'000
Non-current 16,681 512
Current 1,388 372
Lease liabilities 18,069 884
c) Impact on the profit and loss
The following are the amounts recognised in profit or loss:
Consolidated
2024 2023
£'000 £'000
Depreciation expense of right-of-use assets (Note 7) 1,553 445
Interest expense on lease liabilities (Note 4) 897 65
Impact of lease assignment (21) -
Expense relating to leases of low-value assets (Note 7) 59 47
Total amount recognised in profit or loss 2,488 557
The Group had total cash outflows for all leases of £328k (2023: £462k).
d) IBR Sensitivity (consolidated)
The lease liability and right of use assets carrying values at year-end would
be as follows if the IBR was sensitised by increasing or decreasing it by 100
basis points.
Right-of-use assets Lease liability
2024 2023 2024 2023
Percentage £'000 £'000 £'000 £'000
+1% 17,055 698 17,322 753
-1% 18,627 723 18,866 774
13 - Intangible Assets
Consolidated
Goodwill Core accounting Other software Brand/name Total
software
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 5,919 5,872 31,653 1,483 44,927
Additions - 855 11,669 - 12,524
Reclassification of software from core to non-core - (805) 805 - -
Exchange rate loss - - 23 - 23
At 31 December 2024 5,919 5,922 44,150 1,483 57,474
Accumulated amortisation and impairment
At 1 January 2024 - 4,428 16,038 167 20,633
Charged for the year - 437 5,724 52 6,213
Reclassification of software from core to non-core - (308) 308 - -
Exchange rate loss - - 23 - 23
At 31 December 2024 - 4,557 22,093 219 26,869
Net book value
At 1 January 2024 5,919 1,444 15,615 1,316 24,294
At 31 December 2024 5,919 1,365 22,057 1,264 30,605
Consolidated
Goodwill Core accounting Other software Brand/name Total
software
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 5,919 5,817 24,809 1,427 37,972
Additions - 82 6,844 56 6,982
Exchange rate loss - (27) - - (27)
At 31 December 2023 5,919 5,872 31,653 1,483 44,927
Accumulated amortisation
At 1 January 2023 - 4,146 11,785 122 16,053
Charged for the year - 309 4,253 45 4,607
Exchange rate loss - (27) - - (27)
At 31 December 2023 - 4,428 16,038 167 20,633
Net book value
At 1 January 2023 5,919 1,671 13,024 1,305 21,919
At 31 December 2023 5,919 1,444 15,615 1,316 24,294
Software that does not result in an intangible asset (right to receive access
to the supplier's application software in the future is a service contract) of
the Group are expensed. Software expensed in the period amounts to £3,790k
(2023: £2,926k).
Internally generated assets include payment-related software that is created
and utilised in the Group's operation. All intangible assets (except Goodwill)
have finite lives - see Note 1 for accounting policies on the amortisation
method and useful lives.
Other software held by the Group includes software relating to the payments,
process/platform, compliance, and banking.
The Company had intangible assets amounting to £120k in 2024 (2023: nil).
The goodwill relates to the acquisitions:
• by the Company, on 31 March 2016, of the entire share capital of
both CAB, a regulated bank, and
• by the Group, on 1 July 2019, of the entire share capital of CAB
US Inc. (formerly Segovia Technology Company), a US- based fintech company.
CGU: goodwill relating to the acquisitions of both CAB and CAB US Inc. is
allocated to CAB being the Group's only cash- generating unit. The carrying
amount of goodwill has been allocated to the operating segment for all
periods. The CGUs are determined at company level because specific revenue
streams can not be attributed to individual assets.
The goodwill is tested for impairment at the CGU level. Impairment reviews
were performed on the carrying values of all goodwill and intangible assets as
follows:
1. Goodwill and other intangible assets: reviewed against a value in use
calculation of CAB, the cash-generating unit.
The Group tests goodwill and intangible assets annually for impairment, or
more frequently if there are indications that the assets might be impaired.
The value in use that has been used for the impairment assessment of Goodwill
and Intangible Assets also applies to PPE (Note 11), ROU Assets (Note 12), and
the parent's Investments in Subsidiary Undertakings (Note 14).
Value in use
The recoverable amounts of the cash-generating units are based on value in use
calculations which use cash flow projections based on financial budgets
approved by the Board of Directors covering a three-year period ending 31
December 2027, with the terminal growth rate applied from the start of 2028.
Key inputs used by the Group were as follows:
2024 2023
Discount rate pre tax 11% 20%
Discount rate post tax 9% 15%
Terminal value growth rate 2% 2%
i. Discount rate
The Group uses a post-tax (2023: pre-tax) discount rate based on the WACC in
line with requirements of IAS 36. The post-tax WACC of 9% used in 2024
equates to a pre-tax WACC of 11%. The discount rate has fallen significantly,
following a change in the approach to the debt / equity funding mix of
comparator companies.
ii. Cash flows
The future cash flows of the CGUs are the cash flows projected for a
three-year period for which detailed forecasts are available and utilise
assumptions regarding the long-term pattern of sustainable cash flows
thereafter. The forecasts have been adjusted to strip out the effect of new
business lines. Forecasts are compared with actual performance and verifiable
economic data, but they reflect management's view of future business prospects
at the time of the assessment.
iii. Terminal growth rate
The terminal growth rate remains unchanged at 2% being an industry realistic
benchmark based on the UK long-term inflation rate.
iv. Sensitivity analysis of key assumptions in calculating value in use
The Group has conducted an analysis of the sensitivity of the impairment test
to changes in the key assumptions (i.e cash flows, growth rate and the WACC)
used to determine the recoverable amount for the CGU to which goodwill and
intangible assets are allocated. The Group believes that any reasonably
possible change in the key assumptions on which the recoverable amount of the
CGU is based would not cause the aggregate carrying amount of goodwill and
intangible assets to exceed the aggregate recoverable amount of the related
CGUs. The changes (in isolation) required to these three inputs before the
headrooms are breached are as follows:
Key Input Required before headroom is breached
CAB Group
Fall in forecast profit after tax for all three years of forecast (65)% (75)%
Terminal growth rate (10)% (11)%
WACC (post tax) 18% 19%
v. Other impairment indicators
The fall in the market capitalisation of the Company and the Group's financial
performance in 2024 were assessed as potential impairment indicators. However,
the resulting impairment review (discussed above) concluded that no impairment
was required for Intangible assets, Goodwill, PPE, Investments in subsidiary
undertakings, and ROU assets (2023: nil).
14 - Investments in Subsidiary Undertakings
Investments in subsidiary undertakings were as follows:
Company
2024 2023
Reconciliation £'000 £'000
At 1 January 164,380 63,384
Additions - 100,996
Impairments - -
Stamp duty refund (39) -
At 31 December 164,341 164,380
Company
2024 2023
£'000 £'000
Analysed as:
CAB Tech Holdco Limited (CTH) 164,341 164,380
164,341 164,380
Impairment reviews were performed in 2023 and 2024 on the carrying values of
CTH, the Company's only investment.
CTH's key asset is its investment in CAB. The value in use of CAB calculation
and the assessment of key assumptions and related sensitivity analysis
provided in Note 13 are therefore relevant when considering the impairment
review of the investment in subsidiary undertakings. The value in use exceeds
the carrying amount of the investment in subsidiary undertakings, therefore no
impairment has been recognised at year-end (2023: nil).
The Company intends to liquidate CTH during 2025. The investments currently
owned by CTH will be transferred up to its parent, CAB Payments. The impact of
the planned liquidation on the statement of profit or loss at year end is
£nil at year-end.
15 - Deferred Tax
a) Deferred tax liability
The deferred tax liability recognised in the consolidated financial statements
is as follows:
Consolidated
Property, plant and equipment Investment in equity Intangible assets ECL Provision Total
Deferred tax liability (2024) £'000 £'000 £'000 £'000 £'000
At 1 January 2024 115 36 544 - 695
Charge/(Credit) to profit and loss 2024 3 - 514 - 517
Charge to other comprehensive income 2024 - 5 - - 5
At 31 December 2024 118 41 1,058 - 1,217
Analysed as follows:
Continued operations 118 41 1,058 - 1,217
Discontinued operations - - - - -
118 41 1,058 - 1,217
Deferred tax liability (2023)
At 1 January 2023 3 24 263 44 334
Charge/(Credit) to profit and loss 2023 112 - 281 (44) 349
Charge to other comprehensive income 2023 - 12 - - 12
At 31 December 2023 115 36 544 - 695
Analysed as follows:
Continued operations 115 36 544 - 695
Discontinued operations - - - - -
115 36 544 - 695
The deferred tax liability can be further analysed as follows:
Consolidated
2024 2023
£'000 £'000
Liability reversing at 25% 1,217 695
At 31 December 2024 at 25% (2023: 25%) 1,217 695
b) Deferred tax recognised in the year
Consolidated
2024 2023
£'000 £'000
Accelerated tax depreciation on property, plant and equipment 3 112
Intangible assets 514 300
Expected credit loss provision - (80)
Total tax expense to profit or loss ¹ 517 332
Charged to other comprehensive income:
Deferred tax expense on investment on equity securities 5 12
Total deferred tax expense in other comprehensive income 5 12
Total deferred tax charge for the year 522 344
1 Includes a deferred tax asset credit of £nil
(2023: £18k).
c) Unrecognised deferred tax assets and deferred tax liability
At the reporting date, the Group had £nil (2023: £nil) unused tax losses
available for offset against future profits.
Company
The Company had no recognised deferred tax assets or liabilities at
31 December 2024 and 31 December 2023.
16 - Customer Accounts
Consolidated
2024 2023
£'000 £'000
Repayable on demand 676,720 785,316
Other customers' accounts with agreed maturity dates or periods of notice by
residual maturity repayable:
3 months or less 845,081 670,901
1 year or less but over 3 months 63,199 81,020
2 years or less but over 1 year - 5,652
1,585,000 1,542,889
Customer accounts are accounts that customers hold with the Group. A
substantial proportion of customer accounts are easy access accounts that,
although repayable on demand, have historically formed a stable deposit base.
Customer accounts also include cash collateral amounting to £17,806k (2023:
£44,588k) held by the Group in respect of the assets' underlying financial
guarantees and letters of credit noted on Note 17. These are not restricted
cash and are available for use by the Group.
The Company had no customer accounts throughout 2024 (2023: £nil).
17 - Provisions
Consolidated
2024 2023
£'000 £'000
Expected credit loss for off balance sheet balances:
Financial guarantee liability 1 2
Liability for letter of credit confirmations/bill acceptances 2 6
Working capital facilities - undrawn commitments 62 228
ECL for off balance sheet balances 65 236
Dilapidation provision for the London Bridge Lease (Note 12) 1,884 -
Additions 1,800 -
Interest on dilapidation provision 84 -
Provisions 1,949 236
i. Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make
specified payments to reimburse the holder for a loss it incurs because a
specified debtor fails to make payments when due in accordance with the terms
of a debt instrument. The Group provides financial guarantees to multiple
counterparties. The Group received premiums of £5k (2023: £73k).
ii. Letter of credit confirmations/bill acceptances
A letter of credit confirmation/bill acceptance is a letter from an issuing
bank guaranteeing that a buyer's payment to a seller will be received on time
and for the correct amount. The Group confirmed the letters of credit issued
by an issuing bank and charged fixed fees which are received either in advance
or at a later date. The Group provides these acceptances to multiple
counterparties. The Group received premiums of £967k (2023: £754k).
The uncertainties relating to the amount or timing of any outflow are those
inherent within the products concerned, notably that the relevant counterparty
will not carry out its obligations. Cash collateral of £17,806k (2023:
£44,588k) was held by the Group in respect of the assets' underlying
financial guarantees and letters of credit noted above. These are not
restricted cash and are available for use by the Group.
iii. Working Capital facilities - undrawn commitments
Working Capital is a credit facility offered by the Group to its clients which
allows clients to draw down on the facility on satisfaction of the terms of
this facility. The Group charges a facility fee for provision of each
facility. The Group provides this facility to multiple counterparties. The
Group received facility fees of £40k (2023: £47k).
18 - Treasury Shares Reserve
In January 2024, via the EBTs, the Group acquired a total of 280,090 shares
(2023: nil) from the market at an average cost of £0.864 per share as part of
its employee share incentive scheme. As at 31 December 2024 a total of £244k
(2023: nil) has been recognised against equity as Treasury Shares. The market
value of these shares as at 31 December 2024 is £190k. Directly attributable
costs of £nil (2023: nil) have been expensed to equity.
19 - Notes to the Statement of Cash Flows
i. Reconciliation of profit before taxation to net cash outflow from operating
activities
Consolidated Company
2024 2023 2024 2023
Restated
£'000 £'000 £'000 £'000
Profit/(loss) before taxation
Continuing operations 17,594 37,617 (3,159) (4,964)
Discontinued operations - (220) - -
Adjusted for non-cash items:
Effect of currency exchange rate change (1,219) (14,988) - -
Effect of other mark to market revaluations (20) (83) - -
Amortisation 6,213 4,607 11 -
Depreciation
- Right of use of assets 1,553 445 - -
- Property, plant and equipment 767 798 - -
Share-based payment charge 996 1,359 - -
Effective interest rates (89) - - -
(Profit)/loss on write-off of:
- Property, plant and equipment 71 12 - -
- Right of use assets (184) - - -
- Intangible assets - 284 - -
Profit on disposal of discontinued operations - (67) - -
Interest accrued on lease liabilities 814 65 - -
Other non-cash expenses - 1,045 - -
Dividend received from subsidiary - - - (15,560)
26,496 30,874 (3,148) (20,524)
Changes in working capital:
Net increase in loans and advances to banks other than on demand (44,349) (52,937) - -
Net increase in customer accounts 27,634 294,336 - -
Net decrease in investment in debt securities 107,553 41,410 - -
Net (increase)/decrease in other loans and advances to non-banks (24,031) 4,226 - -
Net decrease in unsettled transactions 12,643 1,952 - -
Net decrease in other assets 243 4,756 3,654 11,181
Net increase/(decrease) in other liabilities (1,718) (237) (432) 19,009
Decrease in accrued income 290 470 - -
Increase in accruals (7,987) (1,935) (288) 702
Net cash generated/(outflow) from operating activities ¹ 96,774 322,915 (214) 10,368
1 Cash flows from operating activities include
interest received of £59,582k (restated 2023: £50,897k - previously
£53,606k) and interest paid of £47,167k (restated 2023: £23,826k -
previously £21,869k)).
ii. Non-cash transactions - Consolidated
Non-cash transactions from investing activities for the Group during the year
include acquisition of right-of-use assets amounting to £19,061k (2023: £nil
).
Non-cash transactions from investing activities for the Company during 2023
included the acquisition of CTH shares held by external shareholders as at 5
July 2023.
iii. Changes in liabilities arising from financing activities
The Group's changes in lease liabilities are detailed in Note 12. There are no
other changes in liabilities from financing activities.
There are no changes in liabilities arising from financing activities for the
Company.
iv. Restatement of prior year balances
Certain 2023 cash flow balances have been restated as follows:
Consolidated 2023
Previously reported Adjustment ¹ Restated
Notes to the statement of cash flows £'000 £'000 £'000
Changes in working capital
Net increase in advances to banks other than on demand (54,376) 1,439 (52,937)
Net cash generated from operating activities 321,476 1,439 322,915
Consolidated statement of cash flows for the year ended 31 December 2023
Net cash generated from operating activities 321,476 1,439 322,915
Net cash used in operating activities 307,327 1,439 308,766
Net decrease in cash and cash equivalents 289,184 1,439 290,623
Cash and cash equivalents at the end of the year 1,182,338 1,439 1,183,777
Cash and balances at central banks 528,396 1,439 529,835
¹ Refer to Note 9 for details about this
adjustment.
20 - Related Party Transactions
The immediate parent undertaking of the Company which had control in 2023 and
up to 6 July 2023 was Merlin Midco Limited. As at the year end Merlin Midco
Limited's ownership was 45.1% (2023: 45.1%), which is held by a nominee
company Diagonal Nominees Limited. No company is required to consolidate these
financial statements this year (2023: no company consolidated the entity).
The related party transactions (which were all at arm's length and were
transacted at market prices) are as follows:
a. As at 31 December 2024 the Group had related party balances with
companies outside the Group (2023: two) as follows: £49k (2023: £129k),
payable to Helios Investors Genpar III LP. The amount relates to the
outstanding balance of the director's fees payable by CAB to Helios until
September 2024 when Simon Poole was still a director at Helios. He has been
paid directors' fees via the payroll from October 2024. No interest accrues on
the outstanding amount; and
b. The Group provided £nil (2023: £1k of Net foreign exchange gain)
banking services to connected parties.
c. Directors and key management loans
The Group's loans to Directors and key management are summarised below.
2024 2023
No. £'000 No. £'000
Directors
As at 1 January 1 335 3 159
As at period end - - 1 335
Key Management
As at 1 January - - 8 252
As at year end - - - -
The loans outstanding at the beginning of 2023 were all repaid during the
year. The loans accrued interest at the HMRC stipulated interest rate but only
on balances in excess of £10,000. The Directors loan advanced in 2023 was to
the former CEO of the Group at the time, Bhairav Trivedi, and accrued interest
at the HMRC stipulated rate on the entirety of the loan. Bhairav Trivedi
resigned as a director in 2024 and the loan is therefore no longer classified
as a related party transaction. However it remains a staff loan.
All loans were repayable on the occurrence of the earliest of a number of
events. There was no impairment on loans in respect of the amounts owed by
related parties (2023: nil). The ECL for staff loans was assessed as
immaterial as at 31 December 2024 and 31 December 2023.
d) Remuneration of key management personnel (including Executive Directors)
The remuneration of the Group's key management personnel is set out below in
aggregate for each of the categories specified in IAS 24 Related Party
Disclosures.
Consolidated
2024 2023
£'000 £'000
Short-term employee benefits (including bonuses and Employer's NICs) 4,393 12,427
Post-employment benefits 141 241
Share-based payments 457 639
Total remuneration 4,991 13,307
Included in the table above are contributions of £45k (2023: £84k) made by
the Group on behalf of two Directors (2023: two) to a defined contribution
pension scheme. No retirement benefits accrued for any Director (2023: £nil)
under a defined benefit pension scheme.
The aggregate emoluments (including pension contributions and exit
compensation) of the Group's key management (excluding Directors) were
£2,908k (2023: £8,583k).
The aggregate emoluments (including share-based payment charge) and accrued
pension contributions of the highest paid Director in the Group were £578k
(2023: £3,163k) and £nil (2023: £58k) per annum respectively.
Termination benefits provided to Richard Hallett as reported in the Directors'
Remuneration Report are not included in the above table since they do not
relate to 2024.
e) Company related party balances
In addition to the above related party transactions and balances of the Group,
the Company had outstanding balances with the following intercompany entities
within the Group as at 31 December 2024:
1. £18,262k (2023: £19,406k) payable to CAB. The amount
relates to the payments made by CAB on behalf of, or recharged to the Company.
The Company also has £273k (2023: nil) receivable from CAB for various other
immaterial transactions.
1. £nil (2023: £4,239k) receivable from its subsidiary, CTH.
The prior year amount related to a dividend payment and other intragroup
receivables. The Company has a payable with CTH amounting to £20k (2023:
£0).
1. £20k (2023: £nil) payable to CAB Europe for various
immaterial transactions between the entities.
1. The Company holds a bank account with CAB with a year-end
balance of £108k (2023: £658k).
21 - Called Up Share Capital
2024 2023
Number of ordinary shares £'000 £'000
Authorised, allotted, issued, and fully paid (ordinary shares - Class A)
As at beginning of year - 68,000
Redesignation of Class A Shares to new ordinary shares - (68,000)
As at period end (ordinary shares - Class A) - -
Authorised, allotted, issued, and fully paid (ordinary shares - Class B)
As at beginning of the year - 10
Share split of Class B shares resulting in reduction of nominal value per - 5,913
share from £0.5913044 to £0.001
Redesignation of Class B shares to new ordinary shares - (5,913)
As of end of the year (ordinary shares - Class B) - -
Authorised, allotted, issued, and fully paid (number of ordinary shares)
As of beginning of the year (£0.000333 nominal value per ordinary share) 254,143 -
Redesignation of Class A and Class B shares to new ordinary shares - 73,913
Share split - 147,826
Issuance of ordinary shares to former external shareholders of CTH - 32,404
As of end of the year (£0.000333 nominal value per ordinary share) 254,143 254,143
2024 2023
Ordinary share balance £'000 £'000
As at beginning of the year 85 68,010
Share capital reduction of Class A shares and Class B shares before - (67,936)
redesignation
Issuance of ordinary shares to former external shareholders of CTH (32,404 at - 11
£0.000333 per share)
Total share capital - at year-end 85 85
A. Group reorganisation and listing in 2023
The ordinary shares of the Company were admitted to the premium listing
segment of the Official List of the FCA and to trading on the Main Market of
the London Stock Exchange on 11 July 2023 ('Admission'). Immediately prior to
Admission, the Group undertook certain steps as part of a reorganisation of
its corporate structure, which resulted in all shareholders of CTH (other than
the Company) exchanging shares in CTH for Ordinary Shares in the Company (the
'Reorganisation').
On 4 July 2023, the Company was re-registered as a public company limited by
shares.
In relation to the existing share plans within the Group structure prior to
the share capital reorganisation and the Share Exchange described below, and
prior to Admission, any unvested conditional awards and options vested in
full. Participants who held conditional awards received the CTH shares subject
to their awards, and participants who held options were given the opportunity
to exercise their options and acquire CTH shares in order to participate in
the Share Exchange.
The following steps relating to the Reorganisation took place during the year
ended 2023:
21a) On 19 June 2023, in connection with the Pre-Admission Reorganisation, the
Company reduced the nominal value of the A shares in the Company from £1 to
£0.001 and the B shares in the Company from £1 to £0.5913044. The effect of
the share capital reduction has been to reduce the share capital of the
Company from £68,010k to £74k and to increase retained earnings accordingly
by £67,936k.
21b) The Company split the B ordinary shares into 5,913,044 ordinary shares
with a nominal value of £0.001 each.
21c) The Company re-designated its existing A ordinary shares and B ordinary
shares into a single class of ordinary shares with a nominal value of £0.001
each.
21d) The Company subdivided each ordinary share with a nominal value of
£0.001 each into three ordinary shares with a nominal value of 0.0333 pence
each.
Following steps 21a) to 21d) the Company's share capital comprised 221,739,135
ordinary shares.
21e) In accordance with the terms of the Implementation Agreement, the Company
acquired the shares held by the other shareholders in CTH from each of CAB
Tech Holdco Limited's other shareholders in exchange for 32,404,083 newly
issued ordinary shares (the 'Share Exchange').
Accordingly, 254,143,218 ordinary shares are in issue at year end (2023:
254,143,218).
There are no restrictions on the distribution of dividends and the repayment
of capital.
There were no changes to the ordinary share capital and the number of shares
in issue during the year ended 31 December 2024.
B. Merger relief reserve
The Company's merger relief reserve amounts to £100,442k as at 31 December
2024 (2023: £100,442k) relating to the transaction described in Note 21e.
22 - Contingent Liabilities, Commitments and Guarantees
a) Contingent liabilities
The Group and the Company do not have contingent liabilities at the balance
sheet date other than those disclosed in Note 17.
b) Commitments
i. Capital commitments
The Group and Company do not have any capital commitments at the balance sheet
date (2023: nil) nor any which have been approved but not contracted (2023:
nil).
ii. Other commitments
1. In 2020, the Group entered into a five-year contract to
assist with the ongoing automation of manual processes. The following payments
are due under the contract:
2024 2023
Payment Due £'000 £'000
Not later than one year 1,883 2,260
Later than one year and not later than five years - 1,883
1,883 4,143
The total of the amounts due under the contract are expensed to the
consolidated statement of profit or loss over the life of the contract in line
with the benefits received.
Further commitments are discussed in Note 12 and Note 17
23 - Earnings Per Share
The calculation of the basic and diluted earnings per share at the reporting
date is based on the following data:
Consolidated
2024 2023
Earnings/(losses) attributable to owners of the Group: £'000 £'000
Continuing operations 14,212 22,866
Discontinued operations - (153)
14,212 22,713
Year ended 31 December
2024 2023
Weighted average number of ordinary shares £'000 £'000
Class A ordinary shares - 68,000
Class B ordinary shares - 5,913
- Class B ordinary shares at beginning of reporting date - 10
- Class B share split ¹ (Note 21) - 5,903
Weighted average number of Class A and Class B ordinary shares - 73,913
Add effect of redesignation of shares, share split and issuance of shares
during the period
Redesignation of Class A and Class B ordinary shares during the period - (73,913)
New class of ordinary shares issued during the period - 237,186
Redesignation of Class A and Class B shares into new class of shares - 73,913
New ordinary shares from share split - 147,826
Issuance of additional new ordinary shares to former shareholders of CTH - 15,447
Weighted average number of ordinary shares for basic earnings per share ¹ 253,863 237,186
Potential dilutive shares from the 2024 Free share scheme(1) 280 -
Potential dilutive ordinary shares from the 2023 LTIP Scheme ² - -
Potential dilutive ordinary shares from the 2024 LTIP Scheme ² - -
Weighted average number of ordinary shares for diluted earnings per share ³ 254,143 237,186
1 The Company's total issued shares is 254,143,218
at year-end (see Note 21). In January 2024 the Company acquired 280,090
ordinary shares from the market, through an EBT, to fulfil its obligations in
relation to the free share scheme and these shares have been accounted for as
treasury shares (see Note 18). In line with IAS 33, these shares are not
considered to be outstanding and therefore are excluded from the weighted
average number of shares for basic earnings per share [(254,143,218*12/12) -
(280,090*12/12) = 253,863,128]. Treasury shares in an EBT have a dilutive
effect and therefore included in the weighted average number of shares for
diluted earnings per share.
2 Current forecasts indicate that there will be no
dilution effective from the 2024 and 2023 LTIP Scheme in both 2023 and 2024
and therefore, these potential shares have not been included in the
calculation of the number of ordinary shares for the diluted earnings per
share.
3 The ordinary shares related to the 2017 LTIP and
the Restricted Shares and Restricted Share Units vested in 2023 therefore, do
not have any impact to both the basic EPS and diluted EPS in the current year.
The number of potential dilutive ordinary shares arising from the free share
scheme is small relative to the total number of ordinary shares in issue at
the end of the period, therefore, the basic and diluted earnings per share
amounts are similar. The basic and diluted earnings per share are as follows:
31 December
2024 2023
pence pence
Basic and diluted earnings per share
Continuing operations 6 10
Discontinued operations - -
Total basic and diluted earnings per share attributable to owners of the 6 10
Company
24 - Events after the Reporting Period
Restructuring costs
As announced during Q1 2025, in line with the refreshed strategy, the Group
has commenced a programme to reduce its head count by approximately 20%.
Furthermore, the Group will continue to reinvest in front-line sales teams on
a global scale to drive revenue growth. The redundancy program will cost
c.£2.0 million.
There were no other events after the reporting period requiring disclosure or
further adjustments to the financial information.
Directors responsibility statement
Each of the Directors Ann Cairns, Neeraj Kapur, Noel Harwerth, Simon Poole, Dr
Caroline Brown, Jennifer Johnson-Calari, Karen Jordan, Susanne Chisti, confirm
that to the best of their knowledge:
a. the consolidated financial statements, prepared in accordance with
UK-adopted international accounting standards give a true and fair view of the
assets, liabilities, financial position, and profit and loss of the Company
and the undertakings included in the consolidation taken as a whole; and
b. the Annual Report (including the Strategic Report encompassed within
the 'Overview', 'Strategic Report', and 'Governance' sections) includes a fair
review of the development and performance of the business, and the position of
the Company and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties
that they face.
Alternative Performance Measures
CAB Payments uses alternative performance measures ('APM') when presenting its
financial results. Management believe these provide stakeholders with
additional useful information to interpret the underlying performance of the
business. They are used by the Directors and management to monitor
performance.
APMs used within this Annual Report are supplemental to, but not a substitute
for, IFRS measures presented within the Financial Statements. They may not be
comparable with the APMs of other companies. The APMs are calculated on the
same basis as the prior year.
Gross Income
The Group's focus is on controlled investment, whether as capital expenditure
or through operating costs, to drive income growth. Gross Income is the same
as 'Total income, net of interest expense' as reported in the Consolidated
Statement of Profit and Loss.
EBITDA
The key measure of profitability used internally at Executive Committees and
Board, and externally with investors.
It is calculated as Profit before Tax and IFRS 16 lease liability interest
expense, depreciation and amortisation. Although it is typical to calculate
EBITDA before interest, our net interest income is generated from client
deposits and subsequent reinvestment to generate returns for shareholders and
therefore remains included within EBITDA.
The calculation for EBITDA can be seen in Note 3: segmental reporting.
Adjusted EBITDA and adjusted EBITDA margin
The Group believes that Adjusted EBITDA is a useful measure for investors
because it is closely tracked by management to evaluate the Group's
performance for making financial, strategic, and operating decisions, as well
as aiding investors to understand and evaluate the underlying trends in the
Group's performance period on period, in a comparable manner.
Adjusted EBITDA margin is another measure of profitability, by understanding
how much of the Revenue is converted to profit, by calculating Adjusted EBITDA
as a percentage of Gross Income.
Adjusted EBITDA Reference Twelve Months Ended 31 December:
2024 2023
£'000 £'000
EBITDA from continuing operations Note 3 A 27,024 43,532
Add back: Adjusting items Note 7 B 3,741 21,101
Adjusted EBITDA A+B 30,765 64,633
Twelve Months Ended 31 December:
2024 2023
Adjusted EBITDA margin Reference £'000 £'000
Adjusted EBITDA Table above A 30,765 64,633
Gross income (defined as total income, net of interest expense) Consolidated Statement of Profit or Loss B 105,544 137,068
Adjusted EBITDA margin A / B 29% 47%
Adjusted profit and earnings per share
A measure of profitability based on adjusting the statutory profit after tax
by removing identified items that do not form part of the ongoing running
costs of the business..
Adjusted Profit After Tax Reference Twelve Months Ended 31 December:
2024 2023
£'000 £'000
Profit Before Tax Consolidated Statement of Profit or Loss A 17,594 37,617
Add back: Adjusting items Consolidated Statement of Profit or Loss B 3,741 21,101
Adjusted Profit Before Tax C = A+B 21,335 58,718
Adjusted Tax (at standard rates: 2024: 25%; 2023: average 23.5%) D (5,334) (13,799)
Adjusted Profit After Tax E = C-D 16,001 44,919
Number of Shares Note 21 F 254,143,218 254,143,218
Adjusted Earnings Per Share E / F 0.06 0.18
Operating free cash flow and free cash flow conversion
A measure of cash flow generated by the business. It is a non-statutory
measure used by the Board and the senior management team to measure the
ability of the Group to support future business expansion, distributions, or
financing. It is calculated as Adjusted EBITDA before the cost of purchasing
property, plant and equipment, the cost of intangible asset additions, and the
cost of lease payments. The Group also measures free cash flow conversion,
being operating free cash flow as a percentage of Adjusted EBITDA.
Twelve Months Ended 31 December:
2024 2023
Operating free cash flow: Reference £'000 £'000
Adjusted EBITDA Note 3 A 30,765 64,633
Less: additions of tangible fixed assets Note 11 (2,428) (422)
Less: additions of intangible fixed assets Note 13 (12,524) (6,982)
Less: cash payments made on property leases Note 12 (328) (462)
Operating free cash flow B 15,485 56,767
Operating free cash flow conversion B / A 50% 88%
Capital and capital surplus
Capital's principal purpose is to support the future growth of the
organisation using capital not required to fulfil its regulatory requirements
to absorb any potential losses. This is referred to as 'surplus capital' and
has its allocation prioritised for growth concentrated on technology via
capital expenditure and balance sheet deployment to accelerate transactional
volume. In particular, the Group has been targetting growth in franchise
enhancing trade finance assets with a view to enhance relationships with
clients and liquidity providers.
As a regulated bank, the Group's definition of capital is that under the UK
Capital Requirements Regulation. Capital surplus refers to the surplus
capital the Group holds above the regulatory minima inclusive of the Capital
Conservation Buffer, the Countercyclical Buffer and the PRA Buffer. Capital
and Capital Surplus has been included as a new KPI in the current year.
Wholesale FX and payment FX
The FX business is reported across a number of products: Wholesale FX, Payment
FX, and Pension FX. This income is measured collectively by the Group as the
underlying economic drivers are broadly the same. The income, volume, and
margins are all measured and monitored, along with the underlying currencies,
to help the Group understand broader income performance.
The reported figures represent the accumulated income from all trades
undertaken during the year, where the income of a single transaction has been
generated from the bid/ask spread and any associated fees if the converted
funds are then paid to a third-party beneficiary.
Wholesale FX and Payment FX income is the same as the Net Foreign Exchange
gain reflected in the Consolidated Statement of Profit or Loss.
Developed and emerging markets
The Wholesale and Payments FX revenue is internally considered split between
Developed and Emerging markets, given there is a different set of economics
that prevail in each market. The reported 'Developed' market closely aligns to
the G10 economies, with the inclusion of the Danish Krone. 'Emerging' is
defined as non-OECD Asia Pacific, the Middle East, the Caribbean, Latin
America, Africa and BRICS.
Alternative Interest income
The Group measures and monitors net interest income by its underlying
commercial driver, which enables evaluation of performance in consideration of
return on capital deployed and product profitability. This is done by
capturing interest income by source and spreading the interest expense through
an internal transfer pricing mechanism.
Twelve Months Ended 31 December:
2024 2023
Alternative Interest Income: Reference £'000 £'000
Net interest income Consolidated Statement of Profit or Loss 19,557 21,499
Gains on money market funds Consolidated Statement of Profit or Loss 16,070 11,036
Net (loss)/gain on financial assets and financial liabilities mandatorily held Consolidated Statement of Profit or Loss (247) 1,232
at fair value through profit or loss
Total 35,380 33,767
Net interest income from cash management 30,876 31,711
Trade finance net interest income 3,640 1,571
Working capital facilities net interest income 865 485
Total 35,380 33,767
Number of unique active clients and income per client
The Group measures the number of unique clients and their associated value to
the organisation, in order to understand the impact through the organisational
operations. A key element of success for the Group is to continue to bring on
board new clients to help grow the top line Gross Income. The number of unique
clients is derived at a Group entity level, that contributed revenue in the
preceding 12 months across any of the CAB Payments product offering. The Group
is focused on a higher quality of earnings from its client base, ensuring that
it maximises share of wallet and ensuring a cost-effective client
relationship, with a particular focus on ensuring all clients generate more
than £100k per annum.
Income per client has been added as a new KPI in the current year and is
calculated as Gross Income divided by number of unique clients.
Number of currencies offered
The Group measures the number of currencies where it is able to undertake an
FX/payment transaction, with the strategy to continue to increase the number
of currencies available to clients.
Number of banking partners
The Group counts and measures its number of Banking Partners to understand the
fortification of our global payment capability and the support there is for
the FX specialism. The strategic aim is to continue to grow Banking Partners,
either in the markets we currently serve, to provide competitive pricing, or
to bring online new markets.
Development aid flows
This is the subsection of the Wholesale and Payment FX volumes from
International Developed Organisations into Emerging Markets.
Gender diversity in management
The Board and Senior Management are committed to driving diversity and
equality in the workforce, and do this through measurement of gender diversity
at management level, which is defined as: number of female Vice President
(VP), Senior Vice President (SVP), Directors (D), Managing Directors (MD), and
Executive Vice President (EVP) (excludes Board) as a percentage of the overall
FTE within those same corporate grades.
Financial Performance Metrics excl. NGN, XOF and XAF
Due to external factors which have caused material changes in the income
generated from Naira (NGN), West African Franc (XOF) and Central African Franc
(XAF) management have provided statistics excluding these currencies within
the CEO and Financial Review. The following table provides a reconciliation
between the financial metric, whether a key performance indicator, alternative
performance measure, or statutory figure and the same but excluding the income
from those three currencies.
2024 2023 Year on Year
Reported NGN, XAF and XOF Excl. NGN, XAF and XOF Reported NGN, XAF and XOF Excl. NGN, XAF and XOF YoY inc. NGN, XOF and XAF YoY excl. NGN, XOF and XAF
Wholesale FX 41.2 9.0 32.2 68.5 35.1 33.4 (40)% (4)%
Payments FX 12.6 3.0 9.6 19.9 8.3 11.6 (37)% (17)%
Payments 27.3 3.0 24.3 34.2 8.3 25.9 (20)% (6)%
Wholesale and Payment FX 53.8 12.0 41.8 88.4 43.4 45.0 (39)% (7)%
Gross Income 105.5 12.0 93.5 137.1 43.4 93.7 (23)% -%
Profit After Tax 14.2 9.0 5.2 23.9 35.1 (11.2) (41)% (146)%
Adjusted Profit After Tax 16.0 9.0 7.0 44.9 35.1 9.8 (64)% (29)%
Adjusted EBITDA 30.8 12.0 18.8 64.6 43.4 21.2 (52)% (11)%
Adjusted EBITDA margin 29% n/a 20% 47% n/a 23% (38)% (13)%
Operating free cash flow 15.5 12.0 3.5 56.8 43.4 13.4 (73)% (74)%
Operating free cash flow conversion 50% n/a 19% 88% n/a 63% (43)% (70)%
Earnings Per Share (pence) 0.06 n/a 0.02 0.10 n/a (0.04) (40)% (150)%
Adjusted Earnings Per Share (pence) 0.06 n/a 0.03 0.18 n/a 0.04 (67)% (25)%
Glossary
In the Annual Report and Accounts, 'the Group' or 'CAB Payments' refers to CAB
Payments Holdings plc and its subsidiaries, 'the Company' or 'CPH' refers to
CAB Payments Holdings plc, 'CAB' refers to Crown Agents Bank Limited, and
'CTH' refers to CAB Tech HoldCo Limited, a 100% subsidiary of the Company.
The following definitions apply throughout this document unless the context
requires otherwise:
Active Client A client that has generated income within the last 12 months
Addressable Market The market addressable by the Group, comprising primarily developed to
emerging markets flows, excluding non-LCU flows and non-focus geographies
Admission The ordinary shares of the Company were admitted to the premium listing
segment of the Official List of the FCA and to trading on the Main Market of
the London Stock Exchange on 11 July 2023
ALCO Assets and Liabilities Committee
AML/CTF laws Laws and regulations relating to corrupt and illegal payments,
counter-terrorism financing, anti-bribery and corruption and adherence to
anti-money laundering obligations, as well as laws, sanctions and economic
trade restrictions relating to doing business with certain individuals, groups
and countries
APAC Asia Pacific Region
API The Group's EMpower FX application programming interface
APM Alternative Performance Measures as defined on pages to
B2B Business to Business
Banking Services One of the Group's three business lines
BEIS Department for Business, Energy & Industrial Strategy
BN Billion, i.e. 1,000 million
BRICS BRICS is an intergovernmental organisation comprising Brazil, Russia, India,
China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates.
CAB Crown Agents Bank Limited, a regulated subsidiary of the Group
CABE CAB Europe BV, a regulated Group subsidiary based in the Netherlands
CAGR Compound Annual Growth Rate
CAIM Crown Agents Investment Management Limited, a wholly owned subsidiary of the
Company until it was sold on 31 March 2023
CAPEX Expenditures made for goods or services that are recorded on a company's
balance sheet
CBS Core Banking System, the Group's banking software
CCY Currency
CD Certificate of deposits
CEO Chief Executive Officer
CET1 Common Equity Tier 1
CFO Chief Financial Officer
CGU Cash generating unit
CHIPS Clearing House Interbank Payments System
CRD IV Capital Requirements Directive IV
CRR the Capital Requirements Regulation (Regulation (EU) 575/2013)
CRWA Credit risk weighted assets
CSA Credit support annex
CSR Corporate Social Responsibility
CTO Chief Technology Officer
CTM Collateralised mark to market
Currency corridor Specific combinations of sending currency and receiving currency pairs, or, in
some cases, country combinations
D Corporate title: Director
DEFRA Department for Environment, Food & Rural Affairs
EAD Exposure at default
EBT Employee benefit trust
ECL Expected Credit Loss
EIR Effective interest rate
Emerging markets Markets other than developed markets
EMFI Emerging Market Financial Institutions
ERMF Enterprise Risk Management Framework
ESG Environmental, Social and Governance
EU European Union
EVP Corporate title: Executive Vice President
FCA Financial Conduct Authority
FDI Foreign Direct Investment
FinTech Financial Technology
FIT Forward-in-time
FTEs Full Time Employees, including temporary contractors and consultants filling
in for permanent roles
FVTOCI Fair value through other comprehensive income
FVTPL Fair value through profit and loss
FX Foreign Exchange. When referring to the Group's services, it refers to one of
the Group's business lines, including the Group's spot foreign exchange
trading services
G10 Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom,
the United States, Switzerland and the central banks of Germany and Sweden
GDP Gross Domestic Product
GHG Greenhouse Gas
GUI the Group's EMpower FX graphical user interface
Helios Helios Investment Partners
HQLA High Quality Liquid Assets
IAS International Accounting Standard
ICAAP Internal Capital Adequacy Assessment Process
IDO International Development Organisation
IFRS UK-adopted international accounting standards
ILAAP Internal Liquidity Adequacy Assessment Process
IMTO International Money Transfer Operator, a licence provided by the Central Bank
Of Nigeria
Indirect Nostro A bank account held by CAB with another bank who then relies on a domestic
bank denominated in a foreign currency
IPO Initial Public Offering
IRRBB Interest rate risk in the banking book
JCF JCF Nominees Limited, a wholly owned subsidiary of the Company until it was
sold on 31 March 2023
KPI Key Performance Indicator
KYC Know Your Customer
LATAM Latin America region
LCR Liquidity Coverage Ratio
LGD Loss given default
Local Bank Account Network Demand accounts in the Group's name held with various local banks across the
globe which provide the Group with direct access to local currency where it
has such deposits
LTIP Long term incentive plan
LSE London Stock Exchange
MENA Middle East and North Africa
MMB Major Market Banks
M Million
MD Corporate title: Managing Director
MNO Mobile network operator
MTM Mark to market
NBFI Non-Bank Financial Institution
NCI Non-controlling interest
Netting The practice of using funds received from one customer to fulfil an order in
that same currency from another customer in order to capture both bid and ask
spreads on the transaction
NGO Non-Governmental Organisation
Non-LCU Non-local currency, cross-border payments that take place with no FX
transaction
Nostro A bank account held by CAB in another country, denominated in a foreign
currency
NRR Net revenue retention
NSFR Net Stable Funding Ratio
NXX Nigerian Naira (NGN), Central African Franc (XAF) and West African Franc (XOF)
OCI Other comprehensive income
OECD countries The 38 member countries of the Organisation for Economic Co-operation and
Development
OLAR Overall Liquidity Adequacy rule
Payments One of the Group's three business lines
PD Probability of default
PLC Public Limited Company
PPE Property, plant and equipment
PRA Prudential Regulation Authority
RAS Risk Appetite Statement
Registrar Equiniti Limited
Reorganisation Certain steps taken by the Group prior to Admission as part of a
reorganisation of its corporate structure, which resulted in all non-Group
shareholders of CTH exchanging shares in CTH for Ordinary Shares in CAB
Payments.
Revenue When referring to the Group's financial results means 'total income, net of
interest expense'
ROU Right-of-use asset
SBTi Science Based Targets initiative
SDG Sustainable Development Goals
SEC US Securities and Exchange Commission
SECR Streamlined Energy and Carbon Reporting
SPPI Solely Payment of Principal and Interest principle under IFRS 9
Supranational An international organisation with powers or influence that transcend national
boundaries or governments
Senior Management Employees with corporate titles of Vice President, Senior Vice President,
Director or Managing Director
SVP Corporate Title: Senior Vice President
SWIFT Society for Worldwide Interbank Financial Telecommunication
Take rate A combination of the dealing profit (i.e. the spread between any buy / sell of
two FX trades undertaken), the margin added to the transaction (i.e. the fee
element agreed with the customer for the transaction), and any additional fees
charged; and the take rate is calculated as FX and cross-currency payments
income divided by FX and cross currency payments volumes
TAM Target Addressable Market
Target Market The Group's core market today, which excludes large transactions (over $50m
transaction size) as well as China, India and the above-mentioned free format
flows (including sanctioned markets)
Target Market Assessment The approval process, which has determined that the Ordinary Shares are: (i)
compatible with an end target market of retail investors and investors who
meet the criteria of professional clients and eligible counterparties, each as
defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and
(ii) eligible for distribution through all permitted distribution channels
TCFD Task Force on Climate-related Financial Disclosures
TL Tolerance Limits
Total income When referring to the Group's financial results means 'total income, net of
interest expense'
TN Trillion
TPP Third Party Currency Provider
TSR Total Shareholder Return
UKLA United Kingdom Listing Authority
WACC Weighted average cost of capital
Working Capital A working capital facility provided by the Group previously known as Liquidity
as a Service.
VP Corporate Title: Vice President
WTT Well to tank factors reported under scope 3 emissions representing those that
are produced indirectly by the Group
Currency abbreviations
BDT Bangladeshi Taka
DKK Danish Krone
EUR Euro
GBP British Pound Sterling
GHS Ghanaian cedi
KES Kenyan Shilling
MWK Malawian Kwacha
NGN Nigerian Naira
SDG Sudanese Pound
UGX Ugandan Shilling
XAF Central African Franc: Currency of six independent states in Central Africa:
Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial
Guinea, and Gabon
XOF West African Franc: Currency used by eight independent states in West Africa:
Benin, Burkino Faso, Cote d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and
Togo
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