REG - Distribution Finance - Final Results
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RNS Number : 5734X Distribution Finance Cap. Hldgs PLC 23 March 2026
This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation (EU no. 596/2014) as it forms part of
UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended from
time to time).
23 March 2026
Distribution Finance Capital Holdings plc
("DF Capital" or the "Company" together with its subsidiaries the "Group")
Full year audited results for the 12 months ended 31 December 2025
Another year of significant growth and strategic momentum
Full year results exceed market expectations
Distribution Finance Capital Holdings plc, a specialist bank providing
financial solutions that support manufacturers, dealers and distributors
across the UK, is pleased to announce its audited results for the 12 months
ended 31 December 2025.
Full-year financial performance
2025 2024 Change
Performance
Deposit book (£m) 841 650 29%
Loan book (£m) 846 666 27%
New loans advanced to customers (£m) 1,828 1,440 27%
Financial
Gross revenue (£m) 90.9 76.7 19%
Net income (£m) 56.0 45.5 23%
Net interest margin (%) 8.0 7.9 +10bps
Adjusted cost of risk(1) (bps) 59 75 -16bps
Cost to income ratio (%) 57 59 -2pts
Adjusted profit before tax(1) (£m) 18.1 14.4 26%
CET1 ratio (%) 18.0 21.6 -3.6pts
Adjusted earnings per share(1) (pence) 8.3 5.9 +2.4p
Adjusted return on tangible equity(1) (%) 11.9 9.9 20%
Tangible net asset value per share (pence) 75.9 63.8 +12.1p
§ New Loans Advanced to Customers up 27% to £1.83bn (FY24: £1.44bn) driving a
record closing loan book of £846m up 27%. This included first contribution
from our new asset finance product DFRNT of £15m. This new product addresses
a market several times larger than our core inventory finance product
§ Record number of borrowers, up c.14% to 1,522 (2024: 1,334), with 109
manufacturer partners (2024: 88).
§ Adjusted profit before tax(1) up 26% to £18.1m (December 2024: adjusted PBT
£14.4m) driven by increasing net income and strong cost control with cost to
income ratio falling to 57% (FY24: 59%).
§ Continued strength in arrears management resulted in a low cost of risk of
0.59% (December 2024 adjusted(1): 0.75%), demonstrated by arrears balances (1+
day past due and including legal recoveries) remaining low at 0.85% of total
loan book.
Operational highlights
§ Track record: The Group celebrated its fifth year as a bank in September 2025
and now has completed its fourth year of profitability, underpinned by
year-on-year scaling of its lending franchise.
§ Product & business development: Following receipt of consumer lending
approvals from the Financial Conduct Authority, the Group launched its "DFRNT"
asset finance product, a digital first proposition providing a uniquely DF
Capital customer experience. Initially built to support existing motorhome and
caravan dealers, the proposition was broadened to include other known assets
across industrial, marine and specialist automotive sectors. This is expected
to fuel the Group's growth and is an important step in delivery of its 2030
medium term targets.
§ Customer experience & satisfaction: Annual lending customer satisfaction
survey results showing a net promotor score of +59, up 21pts on prior year
(FY2024: +38), reflecting the Group's commitment to long-term customer
relationships and service quality.
§ The Group's retail savings proposition was awarded feefo's Platinum Trusted
Service award for the third consecutive year and averaging 4.8 stars from
direct customer reviews.
§ People & culture: Sunday Times 'Best Places to Work' engagement survey was
completed, receiving 'excellent' ratings, the highest available, across all of
the survey's employee satisfaction and engagement categories.
§ Infrastructure & growth: Relocated to new, expanded Manchester
headquarters, investing in capacity to support the next phase of the Group's
growth.
Medium-term Targets
The Group reaffirms its confidence in the previously announced medium-term
strategic outlook. Alongside its targets for financial year 2028, which
still stand and the Company remains on track to deliver, the Group recently
announced its targets for the financial year ended 31 December 2030:
§ Loan book in excess of £1.5bn
§ Cost to income ratio in the range of 45%-48%
§ Return on required equity(2) of c.20%
The Group expects to fund this growth target predominantly through organic
capital generation via retained earnings. Combined with continued utilisation
of the British Business Bank ENABLE guarantee scheme and further drawdown of
Tier 2 capital, the Group has sufficient capital headroom to support its
strategic ambitions without the need for a dilutive capital raise, expecting
to grow tangible net assets by 10-15% per annum.
This strong capital position also allows the Group to consider incremental
strategic opportunities as they arise as well as returns of capital to
shareholders by way of share buybacks or dividends. Subject to regulatory
approval at the appropriate time, the Board expects to initiate its first
dividend following the year ending 31 December 2028.
Carl D'Ammassa, Chief Executive Officer, commented: "I'm proud of these
outstanding results, undoubtedly our best year so far. We have delivered on
our financial targets, exceeding expectations in almost all areas, launched
new products and services, continued to invest in technology and delivered
record breaking results. We've launched our new asset finance product through
our "DFRNT" brand, built from the ground up to provide customers with a
first-class digital experience. Momentum will build in this new area through
2026 as we tap into annual sales of over £10bn across our existing
manufacturer and dealer base.
"The market opportunities ahead of us as a multi-product lender, whilst always
being committed to the niche segments in which we operate, are significant. We
have all the tools in our armoury to deliver on our ambitious medium-term
objectives through to 2030, building on these exceptional 2025 results. The
foundations are all in place and I'm excited for the Group's future
prospects."
((1)) Adjusted metrics reflect a one-off VAT recovery in FY25 relating to
prior periods and FY24 reallocates a one-off impairment recovery
((2)) Profit after tax divided by average equity requirement
An overview video of the results by CEO Carl D'Ammassa is available to watch
here: https://bit.ly/DFCH_FY2025_Overview
(https://bit.ly/DFCH_FY2025_Overview) and on the Company's
website: https://www.dfcapital-investors.com/
(https://url.uk.m.mimecastprotect.com/s/nfoaCjYlEsnokzKiRhZtm4Txo?domain=dfcapital-investors.com/)
Analyst presentation
The Company will host an analyst webinar relating to the results at 9am today.
Analysts wishing to join can register by
emailing dfcapital@almastrategic.com.
Investor presentation
The Company will also provide a presentation to existing and potential
shareholders via the Investor Meet Company platform at 2.30pm today. Investors
can register for the webinar
here: https://www.investormeetcompany.com/distribution-finance-capital-holdings-plc/register-investor
(https://www.investormeetcompany.com/distribution-finance-capital-holdings-plc/register-investor)
A recording of the presentation will be made available on the Company's
website following the conclusion of the investor presentation.
The person responsible for arranging the release of this announcement on
behalf of the Company is Karen D'Souza (Company Secretary).
For further information contact:
Distribution Finance Capital Holdings plc
Carl D'Ammassa - Chief Executive Officer +44 (0) 161 413 3391
Sameera Khaliq - Chief Financial Officer +44 (0) 161 413 3391
Kam Bansil - Head of Investor Relations +44 (0) 7779 229508
http://www.dfcapital-investors.com (http://www.dfcapital-investors.com/)
Panmure Liberum Limited (Nomad and Broker) +44 (0) 203 100 2000
Chris Clarke
William King
Gaya Bhatt
Alma Strategic Communications +44 (0) 203 405 0235
Josh Royston
Hilary Buchanan
Hannah Campbell
Sarah Peters
About DF Capital
DF Capital is a speciality lending bank providing award-winning commercial
finance solutions and savings products to consumers and small businesses.
Founded in 2016, the Group is headquartered in Manchester with over 150
employees. DF Capital's lending support the sales of manufacturers, dealers
and distributors across a diversified range of both commercial and leisure
sectors. In 2020, the Group became a fully authorised bank and started
offering a range of consumer savings products that underpin its lending
activities.
The Group is listed on AIM on the London Stock Exchange under the ticker DFCH.
For more information, please visit www.dfcapital.bank
(https://url.uk.m.mimecastprotect.com/s/mgSECpZ0NSnjqRWTDhPiGYrnj?domain=dfcapital.bank/)
Chair's Statement
2025 has been another exceptional year for the Group. We celebrate our fifth
year as a bank and our fourth year of profit. The Board and I are at one that
the firm's journey since authorisation has been characterised by outstanding
execution against our strategic objectives and flawless delivery of our
financial targets, surpassing market expectations again this year.
It is pleasing to report another year of significant year-on-year growth in
lending alongside the launch of new products and services that underpin the
Company's strategic ambitions, medium-term guidance and growth trajectory.
As a Board, we are very focused on the culture prevalent across the firm.
There is no doubt that what the management team is delivering is
extraordinary, but what is important to us is that these results are
underpinned by a positive cultural setting and a keen eye on risk management.
You will no doubt see across this year's report not only strong commercial and
financial delivery but also that the bank is well-run, manages its risks well
and creates an environment where employees can thrive. I truly feel that DF
Capital is amongst the best places to work in financial services.
Having established a comprehensive product suite to support our long-term
ambitions, alongside a scalable platform and great technology infrastructure,
our firm focus now turns to delivering against our lending objectives and
drive continued growth. We remain confident and excited about the
opportunities ahead as a multi product lender, entering markets much bigger
than our core inventory finance that has supported our profitable growth since
authorisation as a bank in 2020.
Last year we set out our ambitions through to 2028 and whilst these remain a
focal point for us, we've refreshed our targets to take a longer view to 2030
- bringing to life our plans for the next five years. What has been achieved
over the last five years is astonishing in comparison to many early-stage
banks, but we firmly believe the most exciting chapters of our story lie
ahead. Importantly, and in light of the healthy levels of profit the Group is
generating, our growth plan does not require an additional dilutive tier 1
capital raise; the Group can support its growth plan through retained
earnings. Additionally, we believe delivering our maiden dividend will be
possible, subject to regulatory approvals, following our 2028 full year
results.
As I said in my report last year, as a Board, we do not put the financial
successes of the Group down to good fortune, it is the careful orchestration
of a strong strategic focus, great culture, fabulous people, customer
centricity and exceptional leadership that brings these sorts of results to
life. The management team never tires in their endeavours and demonstrate each
and every day their passion for this business.
I would like to thank the Board of Directors for their enthusiastic support of
the management team and specifically express my gratitude to Tom (Thomas)
Grathwohl who steps down from the Board this year and will not seek
re-election at this year's Annual General Meeting. Tom joined the Company as a
founding non-executive and has proven a wise and committed guide through the
firm's growth journey. As Tom steps away, we welcomed Richard Green who brings
over 35 years financial services leadership experience, many of those working
in the lending markets in which DF Capital operates. During the year, we were
pleased to welcome Sameera Khaliq to the Board as Chief Financial Officer; her
strong financial stewardship, strategic insight and deep sector expertise
further strengthen the Group's leadership as we execute the next phase of our
growth strategy.
As shareholders, I hope you read this year's report with immense pride.
Without your support and encouragement, the Group would not be making the
strides forward that it is each and every year.
Mark Stephens
Independent Non-Executive Chair
Chief Executive Officer's Report
2025 has undoubtedly been our best year so far. We have delivered on our
financial targets, exceeding expectations in almost all areas; launched new
products and services; continued to invest in technology and delivered record
breaking results.
In September 2025, we celebrated our fifth year as a bank, and it's pleasing
to report that we have delivered four years of profit - standing-out relative
to most other early-stage banks. Throughout that period, we have stayed true
to our strategic objectives and purpose to support the growth ambitions of
manufacturers, dealers and distributors operating in our chosen markets. Our
commitment to these attractive niche areas of lending, supported by deep
specialist expertise and our award-winning deposit raising capability,
underpin our exceptional financial performance.
The Group has delivered statutory pre-tax profit of £19.6m (2024: £19.1m),
including a £1.5m VAT reclaim. Adjusted pre-tax profit for the period reached
£18.1m, up 26% on the prior year (2024: £14.4m). Tangible net asset value
per share increased significantly to 75.9p, up 19% on prior year (2024:
63.8p).
We have demonstrated substantial levels of growth and continued to scale the
bank; exhibited excellent pricing discipline; and managed credit risk and
operating costs well throughout the year.
Record breaking performance
The prevailing macro-economic uncertainties through the period have not
hampered our growth. New loan origination reached £1.8bn, up c27% on the
prior year (2024: £1.4bn), seeing growth across most products and sectors.
The Group's loan book closed the year at a record high of £846m, up c27% on
the prior year (2024: £666m). Throughout we have maintained a laser focus on
pricing discipline and credit quality. Gross yields have held strong at 12.0%
(2024: 12.2%) despite falling interest rates and cost of risk improved to
0.59% (2024 adjusted: 0.75%).
We are supporting more lending customers than ever before. Our manufacturer
partners reached 109 and our borrowers (predominantly dealers) has reached in
excess of 1,500.
Inventory Finance: Continuing to grow market share
We have demonstrated continued growth in our core inventory finance lending
product, working with manufacturers and distributors to provide working
capital solutions tailored to their stock and business needs. As a result, we
have successfully grown market share in most sectors, more than offsetting
softer conditions in a small number of areas, highlighting the resilience of
our well diversified sector exposure through economic cycles. Our growing
market share is a function of our commitment to the markets in which we
operate. We've leveraged our specialist underwriting, consistency in service
and track record at times when some competitors have made conscious decisions
to curtail their lending. We are recognised as easy to do business with and
have excellent levels of customer service.
Dealers across most sectors continued to navigate the macro-economic
uncertainty well, particularly those whose customers themselves are
financially more secure and have demonstrated resilience to the cost-of-living
pressures and elevated interest rates of recent years.
In the agricultural market, our smallest area of lending, low confidence
across the farming community and adverse weather conditions continued to weigh
on activity. The holiday home and lodge sector also remained cautious, with
operators holding lower stock levels, although confidence is gradually
rebuilding, as more parks change ownership and re-establish their
attractiveness to holidaymakers and retirees. We have continued to support
park rental fleets with our flexible lending products also. It is our
expectation that we will see growth in this market as we transition through
2026 and beyond. The motorcycle market remained challenging, with suppressed
end user demand and new bike registrations limiting growth in dealer inventory
levels.
Across our commercial sectors, specifically transport and industrial, we have
seen stronger levels of demand and greater confidence to hold stock on
forecourts, reflecting the critical nature of these assets, replacement-led
demand dynamics and the essential role these sectors play in supporting
broader economic activity. Fewer electric vehicles are in inventory, with the
resurgence of combustion engine variants following changes in government
policy on emissions. Business development activities have been strong in this
space and we see early fruits of that effort flowing through a growing
pipeline of lending and inventory to finance. Likewise, in the automotive and
specialist vehicle segments we have seen similar momentum building.
Our marine business scaled further during the year, through new relationships
and growing our market share with existing customers, particularly at the
larger vessel end of the market.
We are pleased that we have continued to grow our market share in the
motorhome and caravan sectors, extending what we believe to be our
long-standing leadership position as the largest inventory finance provider to
UK-based dealers. We've deepened our relationship with manufacturers further,
giving us greater access to their dealer network. We are consistently told
that our proposition is second to none and we are, in the main, the funder of
choice. We continue to selectively support existing caravan and motorhome
manufacturer and dealer relationships in the Eurozone, and whilst this is
relatively small lending in aggregate, it is providing important intelligence
and experience for us to consider other routes to European expansion should we
wish to pursue this in the future. We closed the year with loan balances of
c€31m (2024: c€5m) to this cohort of customers.
It is clear to us, given our lending growth and increasing new loan
origination, that our inventory finance proposition continues to resonate with
our manufacturer and dealer customers; our Net Promotor Score increased
materially to +59, up 21pts on 2024 (2024: +38) and well above our sector
baseline of +30. Customers regularly call out how easy it is to do business
with us, that we are accessible and that we have a friendly and responsive
team supported by great technology.
Structured Finance: virtuous relationships through our tailored financing
solutions
The Group's commitment to the markets and sectors in which we operate is
recognised by our customers and wider industry participants. We are creating a
virtuous environment where our tailored lending solutions are put to work,
bringing to life the ambitions of sector participants and improving the
vitality of the markets in which they operate. This creates a halo effect -
deepening relationships and reinforcing our commitment to the success and
growth of the markets in which we operate.
Our specialist relationship managers put their expertise to work providing
short-term working capital, business related bridging finance, development
finance, receivables financing and wholesale lending solutions to our
borrowers. These are all lending products in which we have deep expertise
across the organisation, made potent by our sector and market knowledge
developed over many years lending to our chosen sectors.
We enjoy strong risk adjusted returns across these bespoke areas of lending,
however given the nature of these opportunities with some being short-term in
nature, we expect loan balances to generally be in the range of 10-15% of the
Group's entire loan book. At the end of the year, the structured finance loans
reached c.£113m (2024: £75m).
Asset finance: beyond the forecourt lending, deepening our relationships with
our dealer and manufacturer network
Our asset finance product helps manufacturers and dealers sell more of their
products by providing finance to their customers. We believe this is a natural
extension to our existing manufacturer and dealer relationships, unlocking the
potential to finance assets "beyond the forecourt".
Having organically built our asset finance capability, made the required
investment in systems and technology and received the relevant consumer
lending permissions from the Financial Conduct Authority, we launched our
"DFRNT" asset finance product in Q3 2025. Initially built to support motorhome
and caravan dealers, the proposition has now been broadened ahead of the
anticipated peak sales period from March. Our offering now extends to include
specialist assets such as static caravans, marine vessels and equestrian
transport, as well as being able to provide finance for business-critical
assets sold by our commercial dealers. This expansion positions us to capture
a wider market opportunity and reinforces our commitment to delivering
scalable, high-quality asset finance solutions across the sectors we know and
understand.
Our proposition provides something different to existing funders - centred on
personalised rates and greater transparency in pricing. We have a broad
appetite for lending across prime and near-prime obligors, providing
repayments that are priced for the credit profile of the borrower, whilst
delivering target risk-adjusted returns. We have invested heavily in the
latest technology and automated solutions to ensure that the product is
scalable as we look to grow our lending. Our customer journey is easy to
navigate and intuitive for both dealers and their customers.
The markets available to us are significant in size and we estimate total
sales of our dealer network exceeds £10bn per annum. Whilst we won't convert
every sale to a purchase funded by our finance solution, the size of the
market opportunity materially outpaces the required growth to hit our 2028 and
2030 targets. Unlike our core inventory finance, lending is longer in tenor
and loan balances are much "stickier" (typically 4-5 years effective duration
vs 150 days), meaning that our annual new loan origination requirements are
relatively low whilst still fuelling an acceleration of our medium-term loan
book growth.
We have already started to work with existing manufacturer partners with
campaigns to support new products and expect momentum to build through 2026.
Our asset finance product will be distributed, in the main, through our
existing manufacturer, dealer and distributor relationships. Some dealers, who
do not finance their inventory with us, have expressed an interest in "DFRNT"
providing us with further areas for growth.
Risk adjusted returns are broadly commensurate with our other lending
activities, meaning where we put our capital to work is entirely fungible
across the Group's entire suite of lending products, allowing us to diligently
maximise returns on capital.
Making investments for the longer term
We are committed to providing our customers with great levels of service. We
consistently receive excellent client engagement scores from our borrowers and
depositors alike. We believe that leveraging the latest technology to drive
efficiency whilst offering customers high-quality human touchpoints with our
team delivers competitive advantage. We want our team members to enrich
customer experiences, providing guidance and support rather than navigating
poor technology, legacy systems and handling paper-based records or
applications.
We adopted optical character recognition and robotic process automation early
in our journey and are now enhancing this through the latest artificial
intelligence tools. Our technology infrastructure is modular in nature,
allowing us to swap out older capabilities for newer more efficient
developments and financial technology solutions.
The deployment of new technology is embedded in our DNA and we are well
resourced to support this. We continuously make enhancements and improvements
each year using a combination of our own internal talent and external third
parties.
In 2025, we made major investments in the organic build-out of the asset
finance product, following our digital first approach, leveraging best in
class technology partnerships to build a uniquely DF Capital customer
experience.
We believe leveraging technology and building scalable processing
capabilities, coupled with growth in our loan book, unlocks intrinsic
operational leverage and enables the achievement of our cost-to-income targets
over the medium-term.
This year we made the decision to move our headquarters and operating centre
into new offices remaining in Manchester. This investment, which saw us take
additional office space, provides a high-quality future-proof environment for
our team to work. Given the emerging trends in hybrid working, we have looked
to create an engaging and modern environment for all types of work,
collaboration and wider engagement, with employee wellbeing being an important
component to effective office life. I firmly believe that our team performs at
its best when co-located and operating face-to-face in the office.
Aiming to be amongst the Best Places to Work in the UK
We have a track record of delivering exceptional levels of employee
engagement. We believe our culture makes us a unique proposition for new
recruits but also ensuring we retain our existing colleagues.
I believe we have a team that is passionate about what we do, are highly
invested in our strategic ambitions, understand where we are heading and
consistently want to do the right thing for our customers, communities and
ultimately our shareholders. Our outstanding financial results are underpinned
by a positive culture across the firm, but also an eye to performance
management and doing what we say we are going to do.
We have a strong track record of external recognition for employee engagement
and workplace culture, having achieved a number of respected accreditations in
recent years. Having completed the Best Places to Work survey for the year in
review, our employee feedback has been rated "excellent" across all categories
of employee satisfaction and engagement, the highest available, with results
benchmarking well above both sector and global comparators.
Creating an environment where our employees feel recognised for their
contribution, that they can thrive, feel safe and can fulfil their career
ambitions, whilst seeking out opportunities to grow and develop is a
non-negotiable imperative for us and is firmly in our DNA right across the
organisation.
Outlook
We are now entering an exciting chapter of our story. The next five-years sees
us tooled up with all the products, services and technology we need to deliver
on our well-defined 2030 targets that we set out in January 2026; reaching a
loan book in excess of £1.5bn; cost to income ratio in the range of 45-48%; a
return on required equity of c.20%; and growing tangible net assets by 10-15%
per annum.
We have access to the markets which underpin our growth and have more
opportunities to support new loan origination than ever before. We are well
capitalised and are now in a virtuous cycle where continued healthy retained
earnings support organic capital generation. The Board believes the journey to
these targets supports its intention to introduce a maiden dividend following
the year ending 31 December 2028.
The entire DF Capital team is excited about our ambitious 2030 plan - the
opportunities ahead of us are immense. I'm proud of what we've achieved so far
in our journey but am looking forward to leading our talented team to achieve
bigger and better things. Whilst 2025 has been undoubtedly our best year so
far, I firmly believe that our best and most exciting days are ahead of us
Carl D'Ammassa
Chief Executive Officer
Chief Financial Officer's Report
Financial overview
I am delighted to present my first financial report since joining the Group in
May 2025. 2025 has been another year of strong and resilient financial
performance from the Group, underpinned by disciplined balance sheet
management and risk appetite, expansion of our products and services and
continued investment in core capabilities. Against a backdrop of economic
uncertainty and a changing interest rate environment, the Group maintained
strong capital and liquidity positions while continuing to support customers
and deliver sustainable returns.
Profitability continued on an upward trajectory for the fourth consecutive
year, out of our five years as a bank, with pre-tax profit reaching £19.6m
(December 2024: £19.1m). Exceptional growth in lending, delivered at strong
returns, has been a key driver of this performance. During the year, the Group
also successfully concluded a Partial Exemption Special Method ("PESM") VAT
reclaim with the HMRC, resulting in favourable recovery of £1.5m. Excluding
this recovery underlying profit before tax increased to £18.1m, up 26% on the
prior year (2024: £14.4m).
We achieved solid financial results across several of our key performance
measures, with adjusted return on tangible equity(1) climbing to 11.9%
(December 2024: 9.9%) and adjusted basic earnings per share(1) for the year of
8.3p (2024: 5.9p). TNAV per share, which provides an indication of the Group's
tangible capital base available to shareholders, calculated after deducting
intangible assets, was also up 19% to 75.9p (2024: 63.8p). This reflects the
strength and growing value in our business.
During the period, the bank successfully executed a share buy-back programme
in line with our capital allocation framework, reflecting the Board's
confidence in the Group's financial strength, long-term strategy, and the
intrinsic value of its shares. A total of 12,966,866 of ordinary shares were
repurchased.
(1.)Adjusted metrics reflect a one-off VAT recovery in FY25 relating to prior
periods and FY24 reallocates a one-off impairment recovery.
Strong balance sheet growth and resilient net interest margin underpin income
growth
The Group has delivered positive loan book growth in the year, generating
gross revenues, which are predominantly comprised of interest and similar
income, of £90.9m (2024: £76.7m), up 19% on prior year.
Lending growth continues to be fully funded through the retail savings market,
with expansion in the loan book matched by growth in customer deposits.
Savings balances grew strongly over the year, closing at £841m (December
2024: £650m). Total interest expense reached £34.9m (December 2024:
£31.2m), largely reflecting retail balance growth and competitive pricing for
savers.
Net interest margin ("NIM"), which categorises the interaction between asset
yields and funding costs, has remained resilient at 8.0% (2024: 7.9%), despite
a declining bank base rate, falling by 1% to 3.75% over the period.
Overall asset yields moderated but remained robust at 12.0% for the period
(2024: 12.2%). The reduction reflects the lower interest rate environment, as
our asset pricing is structurally linked to bank base rate. Asset yields have
therefore repriced downward in line with the reduction in base rate. Given the
gradual repricing profile of the balance sheet, the full impact of this 1%
base rate cut is not expected to be realised until 2026. Our continued
discipline in pricing approach and balance sheet mix optimisation has further
supported overall returns.
On the liabilities side, retail savings rates have also repriced lower in
response to the downward shift in central bank rate. Customer pricing moved
broadly in line with market conditions, helping to offset the overall impact
on net interest income. The average customer rate for retail deposits
decreased to 4.42% at the period end (December 2024: 5.16%). Despite these
reductions, the Group's product offerings have remained competitive,
delivering on our commitment to offer market leading rates, consistently
featuring in independent "best buy" tables. It is important to mention that
our savings proposition continues to receive positive endorsement from our
depositors. We consistently achieve 4.8 feefo stars and have received feefo's
Platinum Trusted Service Award for a third time this year.
Overall net income, which is predominately interest income earned on assets
(principally loans and advances, and liquidity), less interest paid on
liabilities (principally retail savings and Tier 2 capital) reached £56.0m in
2025 (2024: £45.5m), an increase of 23%. A detailed composition is set out
below:
Summarised Statement of Comprehensive Income (£m)
2025 2024 %
Gross revenues 90.9 76.7 19%
Interest expense (34.9) (31.2) (12)%
Net income 56.0 45.5 23%
Operating expenses (32.2) (26.6) 21%
Impairment and provisions (4.2) 0.2 n/a
Profit before tax 19.6 19.1 3%
Impact of VAT recovery in 2025 (1.5) - n/a
Impact of RoyaleLife write back in 2024 - (4.7) n/a
Adjusted profit before tax 18.1 14.4 26%
Investing for growth while maintaining cost discipline
Cost discipline has been maintained throughout the period, notwithstanding
investment in the Group's strategic growth priorities. These investments were
targeted at enabling colleagues to operate more efficiently, strengthening
controls as the business grows, and supporting consistent service delivery to
customers. Operating expenses for the year totalled £32.2m (2024: £26.6m),
reflecting conscious investment in scalable platforms and capabilities, with
overall cost to income ratio for the period being 57.4% (December 2024:
58.5%).
Operationally, the Group remains focussed on growing into our cost base,
maximising the benefits of our scalable platforms. Average headcount increased
to 155 at the end of the period (31 December 2024: 137 employees), reflecting
investment in specialists to support the asset finance proposition, alongside
continued strengthening of the Group's Change and Risk capabilities. These
investments enhance the Group's ability to execute its strategic roadmap and
ensure that the risk and control framework remains aligned with regulatory
expectations as the business grows.
The Group continued to progress targeted technology initiatives to enhance
operational efficiency. This has included implementation of workflow
automation solutions to enhance our customer due diligence processes,
supporting more efficient customer onboarding and regulatory compliance.
The Group also invested in a new, significantly larger office during the year,
underpinning its long-term growth ambitions and operational capability.
Looking ahead, the Group expects to benefit from increasing operational
leverage as recent investments scale, supporting continued growth while
maintaining a disciplined approach to cost management, supporting a widening
of jaws between cost and income.
Disciplined approach to credit risk maintains strong credit performance
Despite the challenging macro-economic environment, the Group's lending
portfolios have continued to perform well, and asset quality remains within
the appetite set by the Board.
With a strong credit discipline embedded in our credit origination and ongoing
in life portfolio management, we continue to originate new lending in line
with credit policy and overdue accounts are tightly controlled and managed.
Customer accounts with payments one day or more past due, are classified as in
arrears. The total number of customers with arrears, including those in legal
recovery, at 31 December 2025 was 39 (31 December 2024: 33), representing only
2.7% of our total dealer base (31 December 2024: 2.3%). The corresponding
arrears value at the period end was £7.2m (31 December 2024: £4.8m), equal
to 0.85% (December 2024: 0.72%) of the Group's total lending book, which is
within appetite. Of this, 33 cases, with total exposure of £6.7m were in
legal recovery, where the Group works diligently to recover assets over the
necessary period. Appropriate loan provisions are individually assessed and in
place for all cases in recovery.
Arrears performance can be summarised as follows:
Arrears (£'000)
(Arrears - principal repayment, fees and interest) 31-Dec-25 31-Dec-24
< 30 days past due (early) 175 1,101
31-90 days past due (mid/late) 350 739
>90 days past due (in-default) 6,670 2,976
Total arrears 7,195 4,816
% of loan book 0.85% 0.72%
Provision adequacy is consistent with previous years, and Cost of Risk remains
within appetite at 0.59% for 2025 (2024 adjusted(2): 0.75%), reflecting
pro-active management of problem cases and our continuing ability to remediate
dealer defaults by product redistribution through the customer network or sale
of secured assets to other parties.(2.) Adjusted metric reflects a one-off
impairment recovery in FY24
We take security of our assets to strengthen our position
The Group's core Inventory Finance lending is secured by taking legal title
over individual assets, enabling the provision of working capital to fund
dealers' inventory. Credit risk remains well controlled, with lending
maintained at a Loan to Wholesale Value ("LTV") of approximately 87% (31
December 2024: 84%).
Advances are based on wholesale invoice values rather than retail prices,
which typically include a mark-up of around 20% above wholesale cost. As a
result, for the Group to experience a loss following a default, average retail
prices across relevant sectors would need to decline by approximately 30% at
the point of asset recovery.
Further credit mitigation is provided through manufacturer repurchase or
redistribution arrangements, which cover c.60% of the inventory finance loan
book (2024: c.60%). In addition, the Group also benefits from supplementary
security in the form of personal and/or cross company guarantees.
Portfolio ageing
Portfolio stock days in The Group's inventory finance lending book, which are
defined as the average age of loans outstanding, help the Group determine how
its portfolio is ageing compared to historical experience and sector tolerance
levels used for portfolio oversight. At the end of December 2025, this has
reduced to 129 days (December 2024: 140 days) and remains comfortably within
sector levels. As the lending book grows and diversifies, with more asset
finance lending expected over the medium term, stock days are expected to be
less significant in the Group's reporting KPI's.
Stock turn (average age of loan outstanding - days)
Recent trend vs expected norms Historical Tolerance 31-Dec 31-Dec
Annual Level 2025 2024
New Loans Repayments Average
Agriculture Lower Slower 119 240 176 153
Automotive Higher In line 73 200 71 80
Industrial In line Slower 120 250 177 179
Lodges Lower Slower 154 300 210 278
Marine Higher Slower 132 250 146 119
Motorcycle In line In Line 107 200 111 107
Motorhome & Caravan Higher In Line 105 200 132 125
Transport Higher In Line 86 200 89 93
Loan Book Average 128 240 129 140
Funding stability supports robust liquidity position
The Group maintained a strong and prudent liquidity position throughout the
period, supported by a stable funding base and disciplined liquidity
management. Liquidity resources remained comfortably in excess of internal
risk appetite and regulatory requirements, providing appropriate headroom to
support growth and withstand potential market shocks. Liquidity Coverage Ratio
was at 693% at the period end.
The Group's funding profile continues to benefit from a diversified retail
deposit base, enhancing overall funding stability. The savings proposition
remained attractive and competitive throughout the period, driving resilient
customer behaviour for both retention and new acquisition.
The Group actively manages its liquidity risk through regular stress testing,
scenario analysis and monitoring against Board approved limits, ensuring the
Group meets its obligations as they fall due. Extreme economic scenarios are
also run to ensure our contingency plans remain robust.
Our capital position unlocks our growth ambitions
The Group is required to manage its capital in accordance with regulatory
rules and guidance. Our capital position remained robust throughout the year,
supporting balance sheet growth. Total equity ended the period at £127.2m (31
December 2024: £115.4m). Regulatory capital, which is Common Equity Tier 1
(CET1) capital together with Tier 2 capital, increased to £127.7m (31
December 2024: 109.0m). This includes an additional £5m drawn in 2025 from
our Tier 2 capital facility with British Business Investments, taking overall
drawdown to £15m at the period end, from a total available facility of £20m.
The Group continues to leverage the benefit of the ENABLE Guarantee with the
British Business Bank, with a pool of up to £350m of lending. Across the
year, the Group secured agreement to include different product categories
within this lending pool, ensuring maximum efficiency and utilisation of the
scheme.
Combined with strong retained earnings, these capital levers have enabled an
increase in our lending book of 27%, whilst preserving CET1 ratio at 18.0% (31
December 2024: 21.6%), well above our regulatory minima.
With expectations of further retained earnings, negotiations for a renewed
agreement with British Business Bank expected to complete in the first half of
2026 and capacity for more Tier 2 capital, the Group remains confident in its
capital headroom, which supports our medium-term growth ambitions without the
need for a dilutive equity raise. This positive capital position unlocks our
strategic ambitions, with opportunity for accelerated growth, portfolio
acquisitions and/or returns of capital to shareholders by way of share buyback
or dividends.
Sameera Khaliq
Chief Financial Officer
Report of the Directors
The Directors present their Annual Report on the affairs of the Group,
together with the consolidated financial statements, company financial
statements and auditor's report, for the year ended 31 December 2025.
Details of significant subsequent events are contained in note 43 to these
consolidated financial statements. An indication of likely future developments
in the business of the Group are included in the Strategic Report section.
Information about the use of financial instruments by the Group is detailed
within note 37 to the consolidated financial statements.
Principal activity
The principal activity of the Group is as a specialist commercial lending and
savings bank group. The Group provides niche working capital funding solutions
to distributors and manufacturers across the UK, enabled by competitively
priced customer savings products.
Results and dividends
The total comprehensive profit for the year, after taxation, amounted to
£15,159,000 (2024: £14,096,000). The Directors do not recommend the payment
of a dividend (2024: £nil).
Directors
The Directors who held office during the year and up to the date of the
Directors' report were as follows:
Mark Stephens
Sheryl
Lawrence
Nicole
Coll
Thomas Grathwohl
Richard Green (appointed 17 September 2025)
Haakon Stenrød
Carl D'Ammassa
Gavin Morris (resigned 31 July 2025)
Sameera Khaliq (appointed 7 July 2025)
Directors' shareholdings
As at 31 December 2025, the Directors held the following ordinary shares in
the Company:
Director Position No. of ordinary shares Voting rights (%)
Mark Stephens Independent Board Chair 82,119 0.05%
Thomas Grathwohl Independent Non-Executive Director 533,312 0.32%
Carl D'Ammassa Chief Executive Officer 769,648 0.46%
Significant shareholders
As at 31 December 2025, the following parties held greater than 3% of issued
share capital in the Company in accordance with the requirements of Rule 5 of
the Disclosure Guidance and Transparency Rules:
No. of ordinary shares Voting rights (%)
Watrium AS 18.34%
30,577,593
Janus Henderson Investors 10.41%
17,353,430
River Global Investors 9.84%
16,400,000
Lombard Odier Investment Managers 15,909,961 9.54%
UBS Securities 8.90%
14,844,505
Crucible Clarity Fund 5.18%
8,628,633
Premier Milton Investors 4.90%
8,175,000
Hargreaves Lansdown Asset Management 5,121,344 3.07%
Political and charitable donations
The Group made charitable donations of £119,313 (2024: £23,355) and no
political donations during the year ended 31 December 2025 (2024: £nil).
Annual General Meeting
The Company anticipates holding its Annual General Meeting in May 2026. The
Notice of AGM and Form of Proxy will be posted to shareholders in due course
and a copy will be available at www.dfcapital-investors.com. The AGM will be
held at the Company's registered office in Manchester.
Directors' insurance and indemnities
The Group has maintained Directors and Officers liability insurance for the
benefit of the Group, the Directors, and its officers. The Directors consider
the level of cover appropriate for the business and will remain in place for
the foreseeable future.
Statement of Going Concern
The Directors have completed a formal assessment of the Group's financial
resources. In making this assessment the Directors have considered the Group's
current available capital and liquidity resources, the business financial
projections and the outcome of stress testing. Based on this review, the
Directors believe that the Group is well placed to manage its business risks
successfully within the expected economic outlook. See note 1.6 for further
details.
Accordingly, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for a period of at
least 12 months from the date of approval of the financial statements.
Accordingly, they continue to adopt the going concern basis in preparing the
Annual Report and Financial Statements.
Corporate Governance
The Corporate Governance Report on pages 61 to 95 contains information about
the Group's corporate governance arrangements.
Subsequent events
Details relating to significant events occurring between 31 December 2025 and
the date of approval of the financial statements are detailed further within
note 43 of the consolidated financial statements.
Disclosure of information to the auditor
Each of the persons who is a Director at the date of approval of this annual
report confirms that:
§ so far as the Director is aware, there is no relevant audit information of
which the Company's auditors are unaware; and
§ the Director has taken all the steps that they ought to have taken as a
Director in order to make themself aware of any relevant audit information and
to establish that the Company's auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the
provisions of s418 of the Companies Act 2006.
Reappointment of auditor
Deloitte LLP have expressed their willingness to continue in office as
auditors and a resolution to reappoint them will be proposed at the
forthcoming Annual General Meeting.
Approved by the Board on 20 March 2026 and signed on its behalf by:
………………………………………..
Carl D'Ammassa
Director
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the Group
and parent Company financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Group and parent Company
financial statements for each financial year. Under that law the Directors
have elected to prepare the financial statements in accordance with United
Kingdom adopted International Accounting Standards. The financial statements
also comply with International Financial Reporting Standards (IFRSs) as issued
by the International Accounting Standards Board (IASB). The Directors have
chosen to prepare the parent Company financial statements on the same basis.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and parent Company and of their profit or loss of the
Group for the year.
In preparing these consolidated financial statements and Company financial
statements, the Directors are required to:
§ properly select and apply accounting policies;
§ present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information;
§ provide additional disclosures when compliance with the specific requirements
of the financial reporting framework are insufficient to enable users to
understand the impact of particular transactions, other events and conditions
on the entity's financial position and financial performance; and
§ make an assessment of the company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable
them to ensure that the financial statements comply with the Companies Act
2006. They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the annual financial
report
Each of the persons who is a Director at the date of approval of this report
confirms, to the best of their knowledge, that:
§ the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
§ the Strategic Report/Directors' Report 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;
and
§ the annual report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
Consolidated Statement of Comprehensive Income
2025 2024
Note £'000 £'000
Interest and similar income 4 90,698 76,820
Interest and similar expenses 5 (34,897) (31,208)
Net interest income 55,801 45,612
Fee income 6 1,684 1,237
Fee expenses 7 (1,608) (1,626)
Net (losses)/gains from derivatives and other financial instruments at fair 21 (773) 372
value through profit or loss
Other income 8 28 2
Foreign currency gain/(loss) 907 (107)
Total operating income 56,039 45,490
Staff costs 9 (20,684) (16,044)
Other operating expenses 11 (11,497) (10,563)
Net impairment (loss)/gain on financial assets 13 (4,267) 241
Other provisions 12 50 (50)
Total operating profit 19,641 19,074
Profit before taxation 19,641 19,074
Taxation 15 (4,482) (5,053)
Profit after taxation 15,159 14,021
Other comprehensive income:
Items that may subsequently be transferred to the income statement:
FVOCI investment securities:
Amounts transferred to the income - 75
statement
Total other comprehensive income for the year, net of tax - 75
Total comprehensive income for the year 15,159 14,096
Earnings per share: Pence Pence
Basic EPS 38 8.9 7.8
Diluted EPS 38 8.4 7.4
The notes on pages 116 to 177 are an integral part of these financial
statements.
The financial results for all periods are derived entirely from continuing
operations.
Consolidated Statement of Financial Position
2025 2024
Note £'000 £'000
Assets
Cash and balances at central banks 131,676 110,030
Loans and advances to banks 27 5,894 3,771
Investment securities 20 5,722 769
Derivatives held for risk management (asset) 21 411 295
Loans and advances to customers 19 839,526 660,772
Trade and other receivables 23 7,734 4,678
Current taxation asset 24 40 -
Deferred taxation asset 26 1,912 3,980
Property, plant and equipment 16 3,797 1,093
Right-of-use assets 17 2,355 202
Intangible assets 18 745 950
Total assets 999,812 786,540
Liabilities
Customer deposits 34 840,565 649,665
Amounts due to banks 21 - 180
Derivatives held for risk management (liability) 21 819 6
Fair value adjustments on hedged liabilities 22 375 136
Financial liabilities 33 2,444 90
Trade and other payables 36 12,822 9,335
Provisions 12 255 285
Current taxation liability 25 - 1,259
Subordinated liabilities 35 15,302 10,230
Total liabilities 872,582 671,186
Equity
Issued share capital 30 1,793 1,793
Merger relief 30 94,911 94,911
Merger reserve 32 (20,609) (20,609)
Own shares 31 (548) (440)
Treasury shares 30 (4,755) -
Retained earnings 56,438 39,699
Total equity 127,230 115,354
Total equity and liabilities 999,812 786,540
The notes on pages 116 to 177 are an integral part of these consolidated
financial statements.
These financial statements were approved by the Board of Directors and
authorised for issue on 20 March 2026. They were signed on its behalf by:
……………………………
Carl D'Ammassa
Director
20 March 2026
Registered number: 11911574
Consolidated Statement of Changes in Equity
Issued share capital Merger relief Merger reserve Own shares(2) Treasury Shares(3) Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 1,793 94,911 (20,609) (401) - 24,720 100,414
Profit after taxation - - - - - 14,021 14,021
Other comprehensive income - - - - - 75 75
Total comprehensive income - - - - - 14,096 14,096
Share-based payments(1) - - - - - 985 985
Employee Benefit Trust(2) - - - (39) - (102) (141)
Balance at 31 December 2024 1,793 94,911 (20,609) (440) - 39,699 115,354
Profit after taxation - - - - - 15,159 15,159
Other comprehensive income - - - - - - -
Total comprehensive income - - - - - 15,159 15,159
Share-based payments(1) - - - - - 1,254 1,254
Employee Benefit Trust(2) - - - (108) - (84) (192)
Share Buyback - - - - (4,877) - (4,877)
Settlement of share options(4) - - - - 122 (6) 116
Deferred tax asset on share-based payments(5) - - - - - 416 416
Balance at 31 December 2025 1,793 94,911 (20,609) (548) (4,755) 56,438 127,230
(1) Refer to note 10 for details on share-based payments during the year.
(2) The Group has adopted look-through accounting (see note 1.3) and
recognised the Employee Benefit Trust as Own Shares. Refer to note 31 for
further details of the movements in the year.
(3)During the year, the Group repurchased 12,966,866 shares at a total cost of
£4,877,000 inclusive of commission. These treasury shares do not carry voting
rights or rights to dividends while held by the Company.
(4)During the year, the Group used treasury shares to settle the vesting of a
share option scheme.
(5)During the year, the Group recognised a deferred tax asset of £1,311,000
in respect of share-based payments, of which £895,000 has reduced the current
year tax charge and £416,000 has been recognised directly in retained
earnings.
The notes on pages 116 to 177 are an integral part of these consolidated
financial statements.
Consolidated Cash Flow Statement
2025 2024
Note £'000 £'000
Cash flows from operating activities:
Profit before taxation 19,641 19,074
Adjustments for non-cash items and other adjustments Included in the income 28 7,794 3,822
statement
Increase in operating assets 28 (186,354) (92,390)
Increase in operating liabilities 28 195,168 79,376
Taxation paid 24,25 (3,296) (681)
Net cash generated from operating activities 32,953 9,201
Cash flows from investing activities:
Purchase of investment securities (498) (9,918)
Proceeds from sale and maturity of investment securities 500 25,000
Dividends received on money market funds 57 25
Interest received on investment securities 2 75
Purchase of property, plant and equipment 16 (3,557) (397)
Cash received on disposal of property, plant and equipment 34 -
Purchase of right of use assets (81) -
Purchase of intangible assets 18 (80) (623)
Net cash (used in)/generated from investing activities (3,623) 14,162
Cash flows from financing activities:
Repayment of lease liabilities 33 (108) (252)
Issuance of subordinated liabilities 35 5,000 -
Coupon paid on subordinated liabilities 28 (1,269) (1,273)
Purchase of own shares 31 (192) (142)
Purchase of treasury shares 30 (4,877) -
Receipt of cash from settlement of share options 116 -
Net cash used in financing activities (1,330) (1,667)
Net increase in cash and cash equivalents 28,000 21,696
Cash and cash equivalents at start of the period 28 112,563 90,867
Cash and cash equivalents at end of the period 28 140,563 112,563
Notes to the Financial Statements
1. Basis of preparation
1.1 General information
The consolidated financial statements of Distribution Finance Capital Holdings
plc (the "Company" or "DFCH plc") include the assets, liabilities, and results
of its wholly owned subsidiaries, DF Capital Bank Limited (the "Bank"), DF
Capital Financial Solutions Limited and DF Capital Retail Finance Limited,
which together form the "Group".
DFCH plc is registered and incorporated in England and Wales whose company
registration number is 11911574. The registered office is Express Building, 9
Great Ancoats Street, Manchester, England, M4 5AD. The Company's ordinary
shares are listed on the Alternative Investment Market ("AIM") of the London
Stock Exchange.
The principal activity of the Company is that of an investment holding
company. The principal activity of the Group is as a specialist commercial
lending and savings banking group. The Group provides niche working capital
funding solutions to distributors and manufacturers, enabled by competitively
priced savings products.
These financial statements are presented in pounds sterling, which is the
currency of the primary economic environment in which the Group operates, and
are rounded to the nearest thousand pounds, unless stated otherwise.
1.2 Basis of preparation
The Group consolidated financial statements and the Company financial
statements have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by the United
Kingdom (UK) and interpretations issued by the IFRS Interpretations Committee
(IFRS IC).
The consolidated and Company financial statements are prepared on a going
concern basis and under the historical cost convention except for the
treatment of certain financial instruments, including the revaluation of
investment securities held at fair value through other comprehensive income
(FVTOCI), and derivative contracts and other financial assets or liabilities
held at fair value through profit or loss (FVTPL).
By including the Company financial statements, here together with the Group
consolidated financial statements, the Company is taking advantage of the
exemption in Section 408 of the Companies Act 2006 not to present its
individual income statement and related notes that form a part of these
approved financial statements.
For the year ended 31 December 2025, subsidiary undertakings DF Capital
Financial Solutions Limited (Company number: 14891201) and DF Capital Retail
Finance Limited (Company number: 15788832) were exempt from the requirements
of the Companies Act 2006 relating to the audit of individual accounts by
virtue of section 479A of the Companies Act 2006. The Company, as the ultimate
parent company, is providing a guarantee for DF Capital Financial Solutions
Limited and DF Capital Retail Finance Limited in accordance with section 479C
of the Companies Act 2006 as at 31 December 2025.
1.3 Basis of consolidation
The Group financial statements include the results of the Company and its
subsidiary undertakings. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group and are deconsolidated from the date
that control ceases. Accounting policies of the Company and its subsidiaries
are consistent. The Group 'controls' an entity if it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
Upon consolidation, all intra-group transactions, balances, income, and
expenses are eliminated within the consolidated financial statements within
this Annual Report and Financial Statements. The consolidated financial
statements contained in this Annual Report consolidate the statements of total
comprehensive income, statements of financial position, cash flow statements,
statements of changes in equity and related notes for Distribution Finance
Capital Holdings plc, DF Capital Bank Limited, DF Capital Financial Solutions
Limited and DF Capital Retail Finance Limited, which together form the
"Group", which have been prepared in accordance with applicable IFRS
accounting standards. Accounting policies have been applied consistently
throughout the Group and its subsidiaries.
The Group's Employee Benefit Trust (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.
1.4 Adoption of new and revised standards and interpretations
International financial reporting standards issued and adopted for the first
time in the year ended 31 December 2025
In the preparation of these financial statements no accounting standards are
being applied for the first time.
International financial reporting standards issued but not yet effective which
are applicable to the Group
In April 2024 the IASB issued IFRS 18 - "Presentation and Disclosure in
Financial Statements". This is expected to impact the way in which
information is disclosed in financial statements without impacting materially
on the underlying accounting.
IFRS 18 is expected to apply to the Group with effect from the financial year
ending 31 December 2027, if the standard is endorsed for use in the UK. A
detailed exercise to determine the impact of the new standard on the Group's
annual reporting will be carried out before the implementation date.
In May 2024, the IASB issued "Amendments to the Classification and Measurement
of Financial Instruments (Amendments to IFRS 9 and IFRS 7)".
These amendments are effective for annual reporting periods beginning on or
after 1 January 2026. An exercise has been performed which concluded that the
amendments to the standard will have no impact on the Group's annual
reporting.
Other than the above, there are no new reporting standards and interpretations
in issue but not effective which address matter relevant to the Group's
accounting and reporting.
1.5 Principal accounting policies
The principal accounting policies adopted in the preparation of this financial
information are set out below. These policies have been applied consistently
to all the financial periods presented.
1.6 Going concern
The financial statements are prepared on a going concern basis as the
Directors are satisfied that the Group has adequate resources to continue
operating for a period of at least 12 months from the date of approval of the
financial statements. In making this assessment the Directors have
considered:
§ The Group's financial projections and current trading performance together
with the Group's capital and liquidity resources and surpluses over regulatory
and risk appetite requirements;
§ Further consideration has been given to the external factors facing the
business including the macro-economic environment, geopolitical risks and the
regulatory environment, and whether there are any material uncertainties that
could impact the Group's ability to operate as a going concern;
§ The stress testing and capital and liquidity planning performed as a part
of the ICAAP and ILAAP demonstrate that the Group has
adequate capital and liquidity buffers and has the
ability to effectively manage stresses and resources;
§ A number of severe and plausible scenarios were considered as part
of the stress testing process with a combination of severe
idiosyncratic and macroeconomic scenarios. The scenarios included a demand
side shock driven by geopolitical tensions and rising overseas import tariffs
impacting economic growth;
§ Consideration was given to banking sector failures in recent years and whether
there are any implications for the Group. This included assessment of our
deposit base, which is made up predominantly of retail customers, of which
97.7% are fully covered by the Financial Services Compensation Scheme
('FSCS'). Further consideration was given to the liquid assets of the Group
which is predominantly cash held at the Bank of England, alongside the Group's
asset and liability maturity profile;
§ In respect of climate change, the Board recognises the long-term risks and
these are considered as part of the annual ICAAP.
Based on this review, the Directors believe that the Group is well placed to
manage its business risks successfully within the expected economic outlook.
Accordingly, the Directors have adopted the going concern basis in preparing
the financial statements.
Information on the Group's business strategy, performance and outlook are
detailed in the Chair's Statement, Chief Executive Officer's review and Chief
Financial Officer's review. The Risk Overview sections further detail the key
risks faced by the Group and mitigants and provides an overview of the Group's
Risk Management Framework.
1.7 Critical accounting estimates and judgements
In accordance with IFRS, the Directors of the Group are required to make
judgements, estimates and assumptions in certain subjective areas whilst
preparing these financial statements. The application of these accounting
policies may impact the reported amounts of assets, liabilities, income and
expenses and actual results may differ from these estimates.
Any estimates and underlying assumptions used within the statutory financial
statements are reviewed on an ongoing basis, with revisions recognised in the
period in which they are adjusted, and any future periods affected.
Further details can be found in note 3 on the critical accounting estimates
and judgements used within these financial statements.
1.8 Foreign currency translation
The financial statements are expressed in Pound Sterling, which is the
functional and presentational currency of the Group.
Transactions in foreign currencies are translated to the Group's functional
currency at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the
reporting date are retranslated to the functional currency at the foreign
exchange rate ruling at that date. Non-monetary assets and liabilities that
are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. Foreign exchange
differences arising on translation are recognised in the statement of income.
2. Summary of material accounting policies
2.1 Revenue recognition
Net interest income
Interest income and expense for all financial instruments except for those
classified as held for trading or measured or designated as at fair value
through profit and loss ("FVTPL") are recognised in "Net interest income" as
"Interest income" and "Interest expenses" in the income statement using the
effective interest method.
The effective interest rate ("EIR") is the rate that exactly discounts
estimated future cash flows of the financial instrument through the expected
life of the financial instrument or, where appropriate, a shorter period, to
the net carrying amount of the financial asset or financial liability. The
future cash flows are estimated taking into account all the contractual terms
of the instrument.
The calculation of the EIR includes all fees and points paid or received
between parties to the contract that are incremental and directly attributable
to the specific lending arrangement, transaction costs, and all other premiums
or discounts.
In calculating the EIR, management have taken into consideration the
behavioural characteristics of the underlying loans in the lending portfolio
which includes evaluating the expected duration of loans and any additional
behavioural fees.
The interest income/expense is calculated by applying the EIR to the gross
carrying amount of non-credit impaired financial assets (that is, to the
amortised cost of the financial asset before adjusting for any expected credit
loss allowance), or to the amortised cost of financial liabilities.
For credit-impaired financial assets, as defined in the financial instruments
accounting policy, the interest income is calculated by applying the EIR to
the amortised cost of the credit-impaired financial assets (that is, to the
gross carrying amount less the allowance for expected credit losses ("ECLs").
Interest income on investment securities is included in interest and similar
income. Interest on derivatives is included in interest and similar income or
interest and similar expenses charges following the underlying instrument it
is hedging.
Fee income
All fee income relates to fees charged directly to customers based on their
credit facility. These fees do not meet the criteria for inclusion within
interest income. The Group satisfies its performance obligations as the
services are rendered. These fees are billed in arrears of the period they
relate to.
Fee income is recognised in accordance with IFRS 15 which sets out the
principles to follow for revenue recognition which takes into consideration
the nature, amount, timing and uncertainty of revenue and cash flows resulting
from a contract with a customer. The accounting standard presents a five-step
approach to income recognition to enable the Group to recognise the correct
amount of income in the corresponding period(s):
§ the contract has been approved by the parties to the contract;
§ each party's rights in relation to the goods or services to be transferred can
be identified;
§ the payment terms for the goods or services to be transferred can be
identified;
§ the contract has commercial substance; and
§ it is probable that the consideration to which the entity is entitled to in
exchange for the goods or services will be collected.
§ the contract has been approved by the parties to the contract;
All other income is currently recognised under IFRS 9 under the effective
interest rate methodology, however, when new fees are implemented, they will
be assessed as to whether they fall under IFRS 9 (EIR) or IFRS 15. IFRS 9 and
IFRS 15 have been applied consistently to all the financial periods presented.
Fee expense
Fee and commission expense predominantly consists of non-incremental fees in
relation to financial guarantee schemes, undrawn facility commitment facility
fees, introducer commissions, and other non-incremental direct costs. Where
these fees and commissions are incremental costs that are directly
attributable to the issue of a financial instrument, they are included in
interest income as part of the EIR calculation. Where they are not incremental
costs that are directly attributable, they are recognised within fee and
commission expense as the services are received.
Net gains / (losses) from derivatives and other financial instruments at fair
value through profit or loss
Net gains/(losses) from derivatives and other financial instruments at fair
value through profit or loss relate to non-trading derivatives held for risk
management purposes and related fair value adjustments to hedged items. It
includes all realised and unrealised fair value movements, interest and
foreign exchange differences.
Other income from financial instruments
During the year ended 31 December 2025, the Group's investment securities
included debt securities which are measured at fair value through other
comprehensive income and investment in a money market fund which is measured
at amortised cost. The debt securities are measured at their closing bid
prices at the reporting date with any unrealised gain or loss recognised
through other comprehensive income. Once the assets have been disposed, the
corresponding realised gain or loss is transferred from other comprehensive
income into the income statement.
2.2 Property, plant and equipment
All property, plant and equipment is stated at historical cost (or deemed
historical cost) less accumulated depreciation, and less any identified
impairment. Cost includes the original purchase price of the asset and the
costs attributable to bringing the asset to its working condition for its
intended use.
Depreciation is provided on all property, plant and equipment at rates
calculated to write each asset down to its estimated residual value on a
straight-line basis at the following annual rates:
Fixtures & fittings
10 years
Computer
equipment
3-5 years
Telephony &
communications 3 years
Leasehold
improvements
1 - 10 years
Motor
vehicles
6 years
Right-of-use assets are depreciated over the shorter period of the lease term
and the useful life of the underlying asset. All current lease agreements have
a maximum lease term of 10 years. If a lease transfers ownership of the
underlying asset or the cost of the right-of-use asset reflects that the Group
expects to exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset.
Useful economic lives and estimated residual values are reviewed annually and
adjusted as appropriate.
The gain or loss arising on the disposal of an asset is determined as the
difference between the sales proceeds less any costs of disposal and the
carrying amount of the asset, which is recognised in the income statement.
2.3 Intangible assets
Computer software
Computer software which has been purchased by the Group from third party
vendors is measured at initial cost less accumulated amortisation and less any
accumulated impairments.
Computer software is estimated to have a useful life of 3 years with no
residual value after the period. These assets are amortised on a straight-line
basis with the useful economic lives and estimated residual values being
reviewed annually and adjusted as appropriate.
Internally generated intangible assets
Internally generated intangible assets are only recognised by the Group when
the recognition criteria have been met in accordance with IAS 38: Intangible
Assets as follows:
§ expenditure can be reliably measured;
§ the product or process is technically and commercially feasible;
§ future economic benefits are likely to be received;
§ intention and ability to complete the development; and
§ view to either use or sell the asset in the future.
The Group will only recognise an internally generated asset should it meet all
the above criteria. In the event of a development not meeting the criteria it
will be recognised within the consolidated income statement in the period
incurred.
Capitalised costs include all directly attributable costs to the development
of the asset. Internally generated assets are measured at capitalised cost
less accumulated amortisation less accumulated impairment losses.
The internally generated asset is amortised at the point the asset is
available for use or sale. The asset is amortised on a straight-line basis
over the useful economic life with the remaining useful economic life and
residual value being assessed annually. The estimated useful economic life of
internally generated assets is 3-5 years with no expected residual balance.
Any subsequent expenditure on the internally generated asset is only
capitalised if the cost increases the future economic benefits of the related
asset. Otherwise, all additional expenditure should be recognised through the
income statement in the period it occurs.
2.4 Financial instruments
Initial recognition
Financial assets and financial liabilities are recognised in the statement of
financial position when the 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 the financial assets and financial liabilities (other than
financial assets and financial liabilities at FVTPL) are respectively added to
or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs that
are not directly attributable to the acquisition of financial assets and
financial liabilities at FVTPL are recognised immediately in the consolidated
income statement.
Classification
The Group classifies financial instruments based on the business model and the
contractual cash flow characteristics of the financial instruments. Under IFRS
9, the Group classifies financial assets into one of three measurement
categories:
§ Amortised cost - assets in a business model whose objective is to hold
financial assets to collect contractual cash flows, where the contractual
terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest (SPPI) on the principal amount
outstanding. The Group classifies non-derivative financial liabilities as
measured at amortised cost.
§ Fair value through other comprehensive income (FVOCI) - assets held in a
business model whose objective is to collect contractual cash flows and sell
financial assets where the contractual terms of the financial assets give rise
on specified dates to cash flows that are SPPI on the principal amount
outstanding. The Group measures investment securities in the form of UK
Treasury Bills and UK Gilts under this category.
§ Fair value through profit or loss (FVTPL) - assets not measured at
amortised cost or FVOCI. The Group measures derivatives under this category.
The Group has no non-derivative financial assets or liabilities classified as
held for trading.
The Group classifies certain financial instruments as equity where they meet
the following conditions:
§ the financial instrument includes no contractual obligation to deliver cash or
another financial asset on potentially unfavourable conditions;
§ the financial instrument is a non-derivative that includes no contractual
obligation for the issuer to deliver a variable number of its own equity
instruments; or
§ the financial instrument is a derivative that will be settled only by the
issuer exchanging a fixed amount of cash or another financial asset for a
fixed number of its own equity instruments.
Financial assets - measurement
I. Financial assets measured at amortised cost
These are initially measured at fair value plus transaction costs that are
directly attributable to the financial asset. Subsequently, these are measured
at amortised cost using the EIR method. The amortised cost is the amount
advanced less principal repayments, plus or minus the cumulative amortisation
using the EIR method of any difference between the amount advanced and the
maturity amount, less impairment provisions for expected losses. The losses
arising from impairment are recognised in the income statement and disclosed
with any other similar losses within the line item "Net impairment loss on
financial assets".
Financial assets measured at amortised cost mainly comprise loans and advances
to customers, loans and advances to banks, investment securities in the form
of money market funds, and other receivables.
II. Fair value through other comprehensive income
(FVTOCI)
These are initially measured at fair value plus transaction costs that are
directly attributable to the financial asset. Subsequently, they are measured
at fair value based on current, quoted bid prices in active markets for
identical assets that the Group can access at the reporting date. Where there
is no active market, or the investment securities are unlisted, the fair
values are based on valuation techniques including discounted cash flow
analysis, with reference to relevant market rates and other commonly used
valuation techniques. Interest income is recognised in the income statement
using the EIR method. Impairment provisions for expected losses are recognised
in the income statement which does not reduce the carrying amount of the
investment security but is transferred from the FVOCI reserve in equity. Other
fair value movements are recognised in other comprehensive income and
presented in the FVOCI reserve in equity. On disposal, the gain or loss
accumulated in equity is reclassified to the income statement.
FVTOCI financial assets includes investment securities in the form of UK
Treasury Bills and UK Gilts. Regular purchases and sales of investment
securities are recognised on the trade date at which the Group commits to
purchase or sell the asset.
III. Financial assets at fair value through profit or loss
(FVTPL)
These are measured both initially and subsequently at fair value with
movements in fair value recorded in the income statement. Any costs that are
directly attributable to their acquisition are recognised in profit or loss
when incurred. The Group only measures derivative financial assets under this
classification.
Financial assets - impairment
The Group assess loss allowances for expected credit losses ("ECLs") on the
following financial instruments that are not measured at FVTPL:
§ Financial assets measured at amortised cost;
§ Investment securities measured at fair value through other comprehensive
income; and
§ Loan commitments
IFRS 9 permits entities to apply a 'simplified approach' for trade
receivables, contract assets and lease receivables. The simplified approach
permits entities to recognise lifetime expected losses on all these assets
without the need to identify significant increases in credit risk. The Group
has adopted this simplified approach for assessing trade receivables balances.
The Group confirms these trade receivable balances do not contain a
significant financing component.
With the exception of purchased or originated credit impaired ("POCI")
financial assets (which are considered separately below), ECLs are measured
through loss allowances calculated on the following bases.
ECLs are a probability-weighted estimate of the present value of credit
losses. The Group measures ECL on an individual basis, or on a collective
basis for portfolios of loans that share similar economic risk
characteristics. The loss allowance is measured as the difference between the
contractual cash flows and 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.
A financial asset that gives rise to credit risk, is referred to (and analysed
in the notes to this financial information) as being in "stage 1" provided
that since initial recognition there has not been a significant increase in
credit risk, nor has it has become credit impaired.
For a stage 1 asset, the loss allowance is the "12-month ECL", that is, the
lifetime loss weighted by the probability of default occurring within 12
months of the reporting date.
A financial asset that gives rise to credit risk is referred to (and analysed
in the notes to this financial information) as being in "stage 2" if since
initial recognition there has been a significant increase in credit risk
(SICR) but it is not credit impaired.
For a stage 2 asset, the loss allowance is the "lifetime ECL", that is, the
ECL that results from all possible default events over the life of the
financial instrument.
A financial asset that gives rise to credit risk is referred to (and analysed
in the notes to this financial information) as being in "stage 3" if since
initial recognition it has become credit impaired.
For a stage 3 asset, the loss allowance is the difference between the asset's
projected exposure at default (EAD) and the present value of estimated future
cash flows discounted at an applicable EIR. Further, the recognition of
interest income is constrained relative to the amounts that are recognised on
stage 1 and stage 2 assets, as described in the revenue recognition policy set
out above.
If circumstances change sufficiently at subsequent reporting dates, an asset
is referred to by its newly appropriate stage and is re-analysed in the notes
to the financial information.
Where an asset is expected to mature in 12 months or less, the "12-month ECL"
and the "lifetime ECL" have the same effective meaning and accordingly for
such assets the calculated loss allowance will be the same whether such an
asset is at stage 1 or stage 2. In order to determine the loss allowance for
assets with a maturity of 12 months or more, and disclose significant
increases in credit risk, the Group nonetheless determines which of its
financial assets are in stages 1 and 2 at each reporting date.
Significant increase in credit risk - policies and procedures for identifying
stage 2 assets
Whenever any contractual payment is past due, the Group compares the risk of a
default occurring on the financial instrument as at the reporting date with
the risk of a default occurring on the financial instrument as at the date of
initial recognition in order to determine whether credit risk has increased
significantly.
See note 37 for further details about how the Group assesses increases in
significant credit risk.
Definition of a default
Critical to the determination of significant increases in credit risk (and to
the determination of ECLs) is the definition of default. Default is a
component of the probability of default (PD), changes in which lead to the
identification of a significant increase in credit risk, and PD is then a
factor in the measurement of ECLs.
The Group's definition of default for this purpose is:
§ A counterparty defaults on a payment due under a loan agreement and that
payment is more than 90 days past due; or
§ A counterparty commits an event of default under the terms and conditions of
the loan agreement which leads the lending company to believe that the
borrower's ability to meet its credit obligations to the Group is in doubt.
The definition of default is similarly critical in the determination of
whether an asset is credit-impaired (as explained below).
Credit-impaired financial assets - policies and procedures for identifying
stage 3 assets
A financial asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of the financial asset
have occurred. IFRS 9 states that evidence of credit-impairment includes
observable data about the following events:
§ A counterparty is 90 days past due for one or more of its loan receivables;
§ Significant financial difficulty of the borrower or issuer;
§ A breach of contract such as a default (as defined above) or past due event,
or
§ The Group, for economic or contractual reasons relating to the borrower's
financial difficulty, having granted to the borrower a concession that the
Group would not otherwise consider.
The Group assesses whether debt instruments that are financial assets measured
at amortised cost or at FVTOCI are credit-impaired at each reporting date.
When assessing whether there is evidence of credit-impairment, the Group takes
into account both qualitative and quantitative indicators relating to both the
borrower and to the asset. The information assessed depends on the borrower
and the type of the asset. It may not be possible to identify a single
discrete event - instead, the combined effect of several events may have
caused financial assets to become credit-impaired.
See note 37 for further details about how the Group identifies credit impaired
assets.
Purchased or originated credit-impaired ("POCI") financial assets
POCI financial assets are treated differently because they are in stage 3 from
the point of original recognition. During the year ended 31 December 2025, the
Group has not purchased or originated any loans or advances to borrowers that
it would define as credit impaired.
Movements back to stages 1 and 2
Exposures will move out of stage 3 to stage 2 when they no longer meet the
criteria for inclusion and have completed a minimum 3-month probation period
as set according to the type of lending and default event circumstances.
Movement into stage 1 will only occur when the SICR criteria are no longer
met.
Presentation of allowance for ECL in the statement of financial position
Financial assets measured at amortised cost are presented in the statement of
financial position with the loss allowances for ECL deducted from the gross
carrying amount.
Revisions to estimated cash flows
Where cash flows are significantly different from the original expectations
used to determine EIR, but where this difference does not arise from a
modification of the terms of the financial instrument, the Group revises its
estimates of receipts and adjusts the gross carrying amount of the financial
asset to reflect actual and revised estimated contractual cash flows. The
Group recalculates the gross carrying amount of the financial asset as the
present value of the estimated future contractual cash flows discounted at the
financial instrument's original EIR.
The adjustment is recognised in the consolidated income statement as income or
expense.
Modification of financial assets
A modification of a financial asset occurs when the contractual terms
governing a financial asset are renegotiated without the original contract
being replaced and derecognised. A modification is accounted for in the same
way as a revision to estimated cash flows, and in addition;
§ Any fees charged are added to the asset and amortised over the new expected
life of the asset, and
§ The asset is individually assessed to determine whether there has been a
significant increase in credit risk.
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. If the Group neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and an
associated liability for amounts it may have to pay. If the Group retains
substantially all the risks and rewards of ownership of a transferred
financial asset, the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between
the asset's carrying amount and the sum of the consideration received and
receivable and the cumulative gain or loss that had been recognised in other
comprehensive income and accumulated in equity is recognised in the income
statement.
Write-offs
Loans and advances are written off when the Group has no reasonable
expectation of recovering the financial asset; either in its entirety or a
portion of it. This is the case when the Group determines that the borrower
does not have assets or sources of income that could generate sufficient cash
flows to repay the amounts subject to the write-off. A write-off constitutes a
derecognition event. The Group may apply enforcement activities to financial
assets written off. Recoveries resulting from enforcement activities will be
recognised as income and presented within line "net impairment gains/losses on
financial assets".
Financial guarantees, letters of credit and undrawn loan commitments
Undrawn loan commitments and letters of credit are commitments under which,
over the duration of the commitment, the Bank is required to provide a loan
with pre-specified terms to the customer. These contracts are in the scope of
the ECL requirements. The nominal contractual value of financial guarantees,
letters of credit and undrawn loan commitments, where the loan agreed to be
provided is on market terms, are not recorded in the statement of financial
position. The nominal values of these instruments together with the
corresponding ECLs are disclosed in note 37.
Forward-looking macroeconomic scenarios
ECLs and SICR take into account forecasts of future economic conditions in
addition to current conditions. The Group utilises a macroeconomic model which
adjusts the ECLs calculated by the credit models to provide probability
weighted numbers based on a number of forward-looking macroeconomic scenarios.
Due to the assumptions and estimates within these forward-looking
macroeconomic scenarios, refer to note 3 for further details of the Group's
approach.
Financial liabilities
A financial liability is a contractual obligation to deliver cash or another
financial asset or to exchange financial assets or financial liabilities with
another entity under conditions that are potentially unfavourable to the Group
or a contract that will or may be settled in the Group's own equity
instruments, or a derivative contract over own equity that will or may be
settled other than by the exchange of a fixed amount of cash (or another
financial asset) for a fixed number of the Group's own equity instruments.
Gains or losses on financial liabilities are recognised in the consolidated
statement of comprehensive income.
Subordinated liabilities
Subordinated notes issued by the Group are assessed as to whether they should
be treated as equity or financial liabilities. Where there is a contractual
obligation to deliver cash or other financial assets, they are treated as a
financial liability and measured at amortised cost using the EIR method after
taking account of any discount or premium on the issue and directly
attributable costs that are an integral part of the EIR. The amount of any
discount or premium is amortised over the period to the expected call date of
the instrument.
All subordinated notes issued by the Group are classified as financial
liabilities.
Financial liabilities and equity
Debt and equity instruments that are issued are classified as either financial
liabilities or as equity in accordance with the substance of the contractual
arrangement.
Equity instruments
The Group classifies capital instruments as financial liabilities or equity
instruments in accordance with the substance of the contractual terms of the
instruments. Where an instrument contains no obligation on the Group to
deliver cash or other financial assets, or to exchange financial assets or
financial liabilities with another party under conditions that are potentially
unfavourable to the Group, or where the instrument will or may be settled in
the Group's own equity instruments but includes no obligation to deliver a
variable number of the Group's own equity instruments, then it is treated as
an equity instrument. Accordingly, the Group's share capital are presented as
components of equity and any dividends, interest or other distributions on
capital instruments are also recognised in equity. Any related tax is
accounted for in accordance with IAS 12.
Financial liabilities - measurement
Financial liabilities are classified as either financial liabilities measured
at amortised cost or financial liabilities at FVTPL.
I. Financial liabilities measured at amortised cost
Financial liabilities at amortised cost are recognised initially at fair value
net of transaction costs incurred. They are subsequently measured at amortised
cost. Any difference between the fair value and the redemption value is
recognised in the income statement over the period of the borrowings using the
EIR method.
Interest bearing loans and borrowings are measured at amortised cost using the
effective interest rate method. Gains and losses are recognised in the income
statement when the liabilities are derecognised as well as through the
effective interest rate method (EIR) amortisation process. Amortised cost is
calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is
included in "Interest and similar expenses" in the income statement.
II. Financial liabilities at fair value through profit
or loss
Financial liabilities at fair value through profit or loss may include
financial liabilities held for trading. Financial liabilities are classified
as held for trading if they are acquired for the purpose of selling in the
near term.
During the periods presented the Group has held no financial liabilities for
trading, nor designated any financial liabilities upon initial recognition as
at fair value through profit or loss.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's
obligations are discharged, cancelled or they expire.
When a financial liability is modified, the Group will assess whether the
terms of the modified liability are substantially different from those of the
original, which is evaluated by considering both qualitative and quantitative
factors. This includes whether the present value of the revised cash flows
discounted at the original effective interest rate differ by at least 10% from
the remaining cash flows of the original liability. When a modification is
substantial, the original liability is derecognised and a new liability is
recognised, with any difference between the carrying amount of the
extinguished liability and the fair value of the new liability recognised in
profit or loss.
Impairment of non-financial assets
The carrying amounts of the Group's non-financial assets, other than deferred
tax assets, are reviewed at each reporting date to determine whether there is
any indication of impairment. If any such indication exists, then the asset's
recoverable amount is estimated. The recoverable amount of an asset or
cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the asset. For the purposes of impairment testing, assets that
cannot be tested individually are grouped together into the smallest group of
assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets ('the
cash-generating unit').
An impairment loss is recognised if the carrying amount of an asset or its
cash-generating unit ("CGU") exceeds its estimated recoverable amount.
Impairment losses are recognised in the income statement. Impairment losses
recognised in respect of CGUs are allocated to reduce the carrying amounts of
assets in the unit (or group of units) on a pro rata basis.
An impairment loss is reversed if and only if the reasons for the impairment
have ceased to apply.
Impairment losses recognised in prior periods are assessed at each reporting
date for any indication that the loss has decreased or no longer exists. An
impairment loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been
recognised.
2.5 Derivative financial instruments
The Group uses derivative financial instruments (interest rate swaps) to
manage its exposure to interest rate risk. In accordance with the Group
Treasury Policy, the Group does not hold or issue derivative financial
instruments for proprietary trading.
Derivative financial instruments are recognised at their fair value with
changes in their fair value taken to profit or loss. Fair values are
calculated by discounting cash flows at the prevailing interest rates. All
derivatives are classified as assets when their fair value is positive and as
liabilities when their fair value is negative. If a derivative is cancelled,
it is derecognised from the Consolidated Statement of Financial Position. A
derivative is presented as a non-current asset or a non-current liability if
the remaining maturity of the instrument is more than 12 months and it is not
due to be realised or settled within 12 months. Other derivatives are
presented as current assets or current liabilities.
2.6 Hedge accounting
Due to the simplistic nature of the Group's hedging activities, the Group has
adopted to apply IFRS 9 for portfolio assets and liabilities being hedged by
applying fair value hedge accounting.
The Group designates certain derivatives held for risk management as hedging
instruments in qualifying hedging relationships. On initial designation of the
hedge, the Group formally documents the relationship between the hedging
instruments and hedged items, including the risk management objective, the
strategy in undertaking the hedge and the method that will be used to assess
the effectiveness of the hedging relationship.
The Group makes an assessment, both at the inception of the hedge
relationship, as well as on an ongoing basis, as to whether the hedging
instruments are expected to be highly effective in offsetting the movements in
the fair value of the respective hedged items during the period for which the
hedge is designated.
The Group considers the following as key sources of hedge ineffectiveness:
§ the mismatch in maturity date of the swap and hedged item, as swaps with a
given maturity date cover a portfolio of hedged items which may not have
maturity dates identical to that of the swap; and
§ the actual behaviour of the hedged item differing from expectations, such as
early repayments or withdrawals and arrears; and
§ minimal movements in the yield curve leading to ineffectiveness where hedge
relationships are sensitive to small value changes.
Where there is an effective hedge relationship for fair value hedges, the
Group recognises the change in fair value of each hedged item in profit or
loss with the cumulative movement in their value being shown separately in the
Consolidated Statement of Financial Position as fair value adjustments on
hedged assets and liabilities. The fair value changes of both the derivative
and the hedge substantially offset each other to reduce profit volatility.
The Group discontinues hedge accounting when the derivative ceases through
expiry, when the derivative is cancelled or the underlying hedged item
matures, is sold or is repaid.
If a derivative no longer meets the criteria for hedge accounting or is
cancelled whilst still effective, the fair value adjustment relating to the
hedged assets or liabilities within the hedge relationship prior to the
derivative becoming ineffective or being cancelled remains on the Consolidated
Statement of Financial Position and is amortised over the remaining life of
the hedged assets or liabilities. The rate of amortisation over the remaining
life is in line with expected income or cost generated from the hedged assets
or liabilities. Each reporting period, the expectation is compared to actual
with an accelerated run-off applied where the two diverge by more than set
parameters.
Fair value hedge accounting for portfolio hedges of interest rate risk
The Group applies fair value hedge accounting for portfolio hedges of interest
rate risk. As part of its risk management process, the Group identifies
portfolios whose interest rate risk it wishes to hedge. The portfolios entered
into hedge accounting comprise of only liabilities at the year end. The Group
analyses each portfolio into repricing time periods based on expected
repricing dates, by scheduling cash flows into the periods in which they are
expected to occur. Using this analysis, the Group designates as the hedged
item an amount of the liabilities from each portfolio that it wishes to hedge.
The amount to hedge is determined based on a movement in the present value of
the Group's balance sheet under a 200-basis point shift in the yield curve
being used to value the instruments to ensure the mismatches in expected
repricing buckets are within the limits set by the Board on the sensitivity
analysis approach using a hypothetical shift in interest rates.
The Group measures monthly the movements in fair value of the portfolio
relating to the interest rate risk that is being hedged. Provided that the
hedge has been highly effective, the Group recognises the change in fair value
of each hedged item in the income statement with the cumulative movement in
their value being shown on the statement of financial position as a separate
item, 'Fair value adjustment for portfolio hedged risk', either within assets
or liabilities as appropriate.
The Group measures the fair value of each hedging instrument monthly. The
value is included in derivatives held for risk management in either assets or
liabilities as appropriate, with the change in value recorded in net gains
from derivatives and other financial instruments at fair value through profit
or loss in the income statement. Any hedge ineffectiveness is recognised in
net gains/(losses) from derivatives and other financial instruments at fair
value through profit or loss in the income statement as the difference between
the change in fair value of the hedged item and the change in fair value of
the hedging instrument.
2.7 Current and deferred income tax
Income tax on the result for the period comprises current and deferred income
tax. Income tax is recognised in the statement of comprehensive income except
to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income
for the period, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous
periods.
Deferred tax is provided using the balance sheet liability method, providing
for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation
purposes. The amount of deferred tax provided is based on the expected manner
of realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets are recognised to the extent it is probable that taxable
profits will be available against which the deductible temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
Deferred tax liabilities are recognised for all taxable temporary differences.
The Company and its UK subsidiaries are in the same VAT group.
2.8 Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents
comprise cash and non-mandatory deposits held with central banks, mandatory
deposits held with central banks in demand accounts and amounts due from banks
with an original maturity of less than three months that are available to
finance the Group's day-to-day operations.
2.9 Employee benefits - pension costs
A defined contribution plan is a post-employment benefit plan under which the
Group pays fixed contributions into a separate entity and will have a legal or
constructive obligation to pay further amounts. Contributions to defined
contribution schemes are charged to the statement of comprehensive income as
they become payable in accordance with the rules of the scheme. Differences
between contributions payable in the year and contributions actually paid are
shown as either accruals or prepayments in the statement of financial
position.
2.10 Share-based payments
The Group has a number of long-term incentive share schemes for all employees,
including some Directors, whereby they have been granted equity-settled
share-based payments in the Group. The share schemes all have vesting
conditions with some schemes for senior management being subject to specific
performance conditions. All share schemes are equity settled share-based
payments.
The fair value of equity settled share-based payment awards are calculated at
grant date and recognised over the period in which the employees become
unconditionally entitled to the awards (the vesting period). Fair value is
measured by use of the Black-Scholes option pricing model. The variables used
in the model are adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions and behavioural
considerations.
The share-based payments are recognised as staff costs in the income statement
and expensed on a straight-line basis over the vesting period, based on
estimates of the number of shares which may eventually vest. The amount
recognised as an expense is adjusted to reflect differences between expected
and actual outcomes, such that the amount ultimately recognised as an expense
is based on the number of awards that meet the related service and specific
performance conditions at the vesting date. The change in estimations, if any,
is recognised in the income statement at the time of the change with a
corresponding adjustment in equity through the retained earnings account.
It is assumed where the Company grants awards to employees of the Company and
its subsidiaries, the employee offers services to the respective employing
entity only. Where the Company satisfies awards granted to an employee of its
subsidiary, there is no obligation for the subsidiary to reimburse the
Company. Consequently, all share-based payments are considered equity-settled
with any awards to an employee of its subsidiary being deemed a capital
contribution with a corresponding debit to investment in subsidiaries. As the
Company is settling these awards through its own equity instruments, there is
a corresponding credit to the retained earnings account. The Company
recognises the expense of share-based payments in the respective entity of the
employee.
See note 10 for further details on the share schemes.
2.11 Leasing
The Group presently is only a lessee with lease agreements with third-party
suppliers. It does not hold any lessor contracts with customers.
IFRS 16 distinguishes leases and service contracts on the basis of whether an
identified asset is controlled by a customer for which these are deemed as
right-of-use assets. The lessee is required to recognise a right-of-use asset
representing the Group right of use and control over the leased asset.
Furthermore, the Group is required to recognise a lease liability representing
its obligation to make lease payments over the relevant term of the lease. The
Group will recognise both interest expense and depreciation charges, which
equate to the finance costs of the leases.
Lease liability
The lease liability is initially measured at the present value of the lease
payments that are not paid at that date. On a lease-by-lease basis, the Group
assess the contractual terms of the lease and likelihood of the Group enacting
on available extension and break clauses within the lease in order to
determine the expected applicable term of the lease. Once determined, the
Group analyses the expected future payments of the lease over this applicable
term, which are discounted. The interest rate used to discount the cashflows
is the interest rate implicit to the lease agreement. Where this is not
available, the Group has applied their incremental borrowing rate. The
incremental borrowing rate is the rate of interest that the Group would have
to pay to borrow, over a similar term and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use asset in a
similar economic environment.
Subsequently, the lease liability is adjusted for interest and lease payments,
as well as the impact of lease modifications, amongst other variables. The
interest expense of the lease liability is calculated under the effective
interest rate where the interest expense equates to the lease payments over
the remaining term.
Right-of-use asset
The right-of-use asset is initially measured at cost and subsequently measured
at cost (subject to certain exceptions) less accumulated depreciation and
impairment losses, adjusted for any remeasurement of the lease liability.
The cost at initial recognition is calculated as the initial lease liability
plus initial direct costs, expected restoration costs and remaining prepayment
balances at the commencement date.
The right-of-use asset is subsequently measured at cost, less accumulated
depreciation, and any accumulated impairment losses. Any remeasurement of the
lease liability results in a corresponding adjustment to the right-of-use
asset.
The Company calculates depreciation of the right-of-use asset in accordance
with IAS 16 'Property, Plant and Equipment' and is consistent with the
depreciation methodology applied to other similar assets. All leases are
depreciated on a straight-line basis over the shorter of the lease term and
the useful life of the right-of-use asset.
Restoration costs will be estimated at initial application and added to the
right-of-use asset and a corresponding provision raised in accordance with IAS
37 'Provisions, contingent liabilities, and contingent assets. Any subsequent
change in the measurement of the restoration provision, due to a revised
estimation of expected restoration costs, is accounted for as an adjustment of
the right-of-use asset.
Short-term leases and leases of low value assets
The Group leases some smaller asset classes, such as computer hardware, which
either has a value under £5,000 per annum or has a lease period of 12 months
or shorter. For such leases, the Group has elected under IFRS 16 rules to
treat these as operating leases and hold off-balance sheet. These leases are
charged to the income statement on a straight-line basis over the lease term.
Lease Modification
When a lease modification occurs, the Group evaluates whether it should be
accounted for as a separate lease. This assessment considers whether the
modification grants the right to use additional underlying assets and whether
the related consideration reflects the standalone price of those additional
rights.
If the modification is not accounted for as a separate lease, the lease
liability is remeasured at the modification date using a revised discount
rate, reflecting the updated lease payments and any changes to the lease term.
A corresponding adjustment is made to the carrying amount of the right of use
asset to reflect the change in scope or term. Any difference between the
adjustment to the lease liability and the adjustment to the asset is
recognised in profit or loss as a gain or loss on lease modification.
2.12 Provisions for commitments and other liabilities
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle that obligation and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking into
account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows
(discounted at the Company's weighted average cost of capital when the effect
of the time value of money is material).
When some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, a receivable is recognised as an
asset only if it is virtually certain that reimbursement will be received, and
the amount of the receivable can be measured reliably.
2.13 Operating segments
IFRS 8 Operating segments requires particular classes of entities (essentially
those with publicly traded securities) to disclose information about their
operating segments, products and services, the geographical areas in which
they operate, and their major customers. Information is based on the Group's
internal management reports, both in the identification of operating segments
and measurement of disclosed segment information.
The Group's products and the markets to which they are offered are so similar
in nature that they are reported as one class of business. As a result, the
chief operating decision maker uses only one segment to control resources and
assess the performance of the entity, while deciding the strategic direction
of the Group.
2.14 Earnings per share
In accordance with IAS 33, the Group will present on the face of the statement
of comprehensive income basic and diluted EPS for:
- Profit or loss from continuing operations attributable to the ordinary equity
holders of the Company; and
- Profit or loss attributable to the ordinary equity holders of the Company for
the period for each class of ordinary shares that has a different right to
share in profit for the period.
Basic EPS is calculated by dividing profit or loss attributable to ordinary
equity holders of the Company by the weighted average number of ordinary
shares outstanding during the period less treasury shares held.
Diluted EPS is calculated by adjusting the earnings and number of shares for
the effects of dilutive options and other dilutive potential ordinary shares.
2.15 Merger relief
Merger relief is relief granted under the Companies Act 2006 section 612 which
removes the requirement for the Company to recognise the premium on issued
shares to acquire another company within the share premium account. Merger
relief is recognised where all the following criteria are satisfied:
§ The Company secures at least a 90% equity holding of all share classes in
another company as part of the arrangement; and
§ The Company provides either of the following as consideration for the
allotment of shares in the acquired company:
o Issue or transfer of equity shares in the Company in exchange for equity
shares in the acquired company; or
o The cancellation of any such shares in the acquired company that the
Company does not already hold.
2.16 Merger accounting
Business combination and merger accounting
IFRS 3 Business Combinations prescribes the accounting treatment for business
combinations, however, the change in control and ownership of a company under
common control is outside the scope of IFRS 3 Business Combinations. In the
absence of appropriate IFRS, the Directors sought other applicable accounting
standards, and elected to apply FRS 102 in the form of Merger Accounting which
provides accounting guidance for transactions of this nature.
The principles of merger accounting are as follows:
§ Assets and liabilities of the acquired entity are stated at predecessor
carrying values. Fair value measurement is not required;
§ No new goodwill arises in merger accounting; and
§ Any difference between the consideration given and the aggregate book value of
the assets and liabilities of the acquired entity at the date of transaction
is included in equity in retained earnings or in a separate "Merger Reserve"
account.
By way of using the merger accounting methodology for preparing these
consolidated financial statements, comparative information will be prepared as
if the Group had existed and been formed in prior periods. The Directors agree
this will enable informative comparatives to users given the underlying
activities and management structure of the Group remain largely unchanged
following the formation of the Group.
Merger reserve
Where merger accounting has been applied this prescribes that any difference
between the consideration given and the aggregate book value of the assets and
liabilities of the acquired entity at the date of transaction is included in
equity in retained earnings or in a separate reserve account. Therefore, on
consolidation of the Group financial statements, the difference between the
consideration paid and the book value of the acquired entity is recognised as
a Merger Reserve, in accordance with relevant accounting standards relating to
businesses under common control.
2.17 Own Shares
Own equity instruments of the Group which are acquired by it or by any of its
subsidiaries (treasury shares) are deducted from equity. Consideration paid or
received on the purchase, sale, issue, or cancellation of the Group's own
equity instruments is recognised directly in equity. No gain or loss is
recognised in profit or loss on the purchase, sale, issue, or cancellation of
own equity instruments.
Own shares represents shares of the Company that are held by the Employee
Benefit Trust.
3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial information in accordance with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets and
liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The Group does not consider share-based payments to be a critical judgement
area.
Judgements
The Group has made the following key judgements in applying the accounting
policies:
3.1. Expected credit losses loan impairment
Significant increase in credit risk for classification in stage 2
Counterparties are classified into stage 2 where the risk profile of the
borrower profile has significantly increased from inception of the exposure.
This increase in credit risk is signified by either increases in internal or
external credit ratings, the counterparty becoming over 30 days past due, or
forbearance measures being applied.
The Group has aligned its assessment of significant increases in credit risk
to its internal threshold criteria for prompting customer pricing reviews for
consistency.
Due to the short-term behavioural term of the majority of the current lending
portfolio, the Group has not applied a probationary ("cooling off") period to
exposures which are no longer triggering the stage 2 threshold criteria so
these will move back to stage 1 once the classification criteria is no longer
met.
Definition of default
The Group aligns its definition of default to the regulatory definition for
default in all periods presented. The Group applies the regulatory guideline
of 90+ days in arrears and also uses internal and external information, along
with financial and non-financial information, available to the Group to
determine whether a default event has either occurred or is perceived to have
occurred.
Should a default event occur the Group applies a probationary ("cooling off")
period to stage 3 counterparties before being transferred back to either stage
1 or 2. The probationary period is typically 3 months but is extended up to 12
months for more severe scenarios. During the probationary period the
counterparty must no longer meet the criteria for stage 3 inclusion for the
entire applicable period.
Estimates
The Group has made the following estimates in the application of the
accounting policies that have a significant risk of material adjustment to the
carrying amount of assets and liabilities within the next financial year:
3.2. Expected credit losses loan impairment
Probability of default ("PD")
In the absence of sufficient internal historical default data, the Group uses
an external credit rating agency to provide credit ratings and corresponding
probability of defaults ("PDs") for the vast majority of the Group's
counterparties. These are "Through-the-Cycle" PDs which represents a long-run
average probability of default, opposed to Point-in-Time PDs which are shorter
term and partially reflect the current economic outlook. Further, the primary
data points which impact credit ratings and PDs are derived from past events,
therefore, PDs are inherently a lagging indicator of expected default activity
over the following 12 month period and longer. The Group have therefore
implemented a management overlay, increasing PDs by 101%, to address the
difference between modelled and observed default rates. This scalar resulted
in an additional baseline impairment charge of £1,819,000.
The Group also utilises external macro-economic forecast data sourced from an
external economics research company and to account for estimated movements in
the macro-economic environment over the next 12 months and their impact on
PDs. Following this exercise, as at 31 December 2025 the Group has applied an
8% economic scalar reflecting an improvement in the macro-economic environment
which reduces PDs. The net impact of the management overlay and economic
scalar is an overall PD increase of 86% (31 December 2024: 34%).
A 100% deterioration in PDs from average PD of 5.6% to 11.2% (excluding stage
3 exposures, which are already in default), would result in an additional
baseline impairment charge of £3,449,000 at 31 December 2025 (31 December
2024: £2,900,000).
Loss given default ("LGD")
The Group analyses historical default events by different sectors, products,
and counterparty activity and "sold-out-trust" (SOTs) probabilities to
validate whether its current LGD methodology is reasonable. The Group may
apply managerial overlays to its LGD assumptions to accommodate for deviations
in expected LGD rates over the following 12 month period and longer from
historical observed LGD rates.
A 10% reduction in the expected discounted cashflows from the collateral held
by the Group would result in an additional baseline impairment charge of
£2,268,000 at 31 December 2025 (31 December 2024: £1,274,000).
Forward looking macroeconomic scenarios
The Group considers four economic stress scenarios within its impairment
modelling whereby the Group stresses PD and LGD inputs in accordance with
expected macro-economic outlooks. This provides an ECL impairment allowance
for each scenario which is multiplied by the likelihood of occurrence over the
next 12-month period from the balance sheet date to give a probability
weighted ECL.
The following forward-looking macroeconomic scenarios, together with their
probability weighting and key economic variables, were used in calculating the
ECLs used for determining impairment provisions:
Scenario Probability Weighting ECL Impairment ECL Coverage(1)
(%)
(£'000)
(%)
31 December 2025
Upside 20% 6,988 0.81%
Base 50% 7,654 0.89%
Downside 20% 9,308 1.08%
Severe downside 10% 14,146 1.64%
Weighted Total 100% 8,501 0.98%
31 December 2024
Upside 20% 4,618 0.68%
Base 50% 5,621 0.83%
Downside 20% 7,384 1.08%
Severe downside 10% 13,656 2.01%
Weighted Total 100% 6,577 0.97%
(1) ECL Coverage is calculated by dividing the ECL impairment by the Exposure
at Default (EAD). EAD is typically higher than the gross loan receivable
balance.
The following table details the additional impairment allowance
charge/(credit) should one of the macroeconomic scenarios be assigned a 100%
probability weighting:
2025 2024
Scenario £'000 £'000
Upside (1,513) (1,959)
Base (847) (956)
Downside 807 807
Severe downside 5,645 7,079
4. Interest and similar income
2025 2024
£'000 £'000
At amortised cost (using effective interest rate method):
On loans and advances to customers 84,951 71,619
On loans and advances to banks 5,403 4,930
On investment securities 60 28
90,414 76,577
At FVOCI:
On investment securities 2 243
At FVTPL:
Interest income on derivatives 282 -
Total interest and similar income 90,698 76,820
5. Interest and similar expenses
The Group is predominantly funded by customer deposits and Group reserves. See
note 34 and 35 for further detail of the movements in customer deposits and
subordinated liabilities during the year.
2025 2024
£'000 £'000
At amortised cost (using effective interest rate method):
On customer deposits 33,330 29,482
On subordinated liabilities 1,331 1,272
34,661 30,754
At FVTPL:
Interest expense on derivatives 236 454
Total interest and similar expense 34,897 31,208
6. Fee income
2025 2024
£'000 £'000
Facility-related fees 1,684 1,237
Total fee income 1,684 1,237
7. Fee Expense
2025 2024
£'000 £'000
Enable guarantee charges 866 988
Financial guarantee charges 708 576
Undrawn commitment facility fees 19 20
Non-incremental direct costs 15 23
Broker Fees - 19
Total fee expense 1,608 1,626
8. Other income
2025 2024
£'000 £'000
HMRC grants and relief income 14 2
Insurance claim income 14 -
Total other income 28 2
9. Staff costs
Analysis of staff costs:
2025 2024
£'000 £'000
Wages and salaries 15,381 12,367
Share-based payments 1,254 985
Contractor costs 400 59
Social security costs 2,601 1,784
Pension costs arising on defined contribution schemes 1,048 849
Total staff costs 20,684 16,044
Contractor costs are recognised within personnel costs where the work
performed would otherwise have been performed by employees. Contractor costs
arising from the performance of other services is included within other
operating expenses.
Average number of persons employed by the Group (including Directors):
2025 2024
No. No.
Management 13 13
Finance 11 10
Credit & Risk 36 30
Sales & Marketing 35 36
Operations 41 31
Technology 19 16
Total average headcount 155 136
Directors' emoluments:
Fees/basic salary Bonuses Employer pension contributions Benefits in kind 2025 total 2024 total
£'000 £'000 £'000 £'000 £'000 £'000
Executive Directors:
Carl D'Ammassa(1) 600 600 60 8 1,268 1,068
Gavin Morris(2) 176 112 18 6 312 459
Sameera Khaliq(3) 183 137 18 3 341 -
959 849 96 17 1,921 1,527
Non-executive Directors:
Mark Stephens 188 - - - 188 150
Thomas Grathwohl 75 - - - 75 75
Nicole Coll 85 - - - 85 85
Sheryl Lawrence 95 - - - 95 95
Richard Green(4) 22 - - - 22 -
Haakon Stenrød(5) - - - - - -
465 - - - 465 405
Total Director remuneration 1,424 849 96 17 2,386 1,932
( )
(1) A retention award of £425,000 was made on 1 February 2025, with payment
deferred until 1 February 2028, subject to ongoing employment at the deferral
date, which is recognised over the term of the award. The disclosed
compensation does not include this deferred amount.
(2)Gavin Morris resigned as a director on 31 July 2025. The disclosed
compensation relates to his time in office as a Director.
(3)Sameera Khaliq was appointed as a director on 7 July 2025. The disclosed
compensation is from employment commencement date of 1 May 2025.
(4) Rich Green joined the Board as Non-Executive Director 17 September 2025.
(5) Haakon Stenrød holds his position as Non-Executive Director by virtue of
major shareholding by Watrium AS exercising their right to appoint a Director
under their Relationship Agreement. He is compensated by Watrium AS.
The pension for the year ended 31 December 2025 to Carl D'Ammassa of £60,000
(2024: £53,000) and Gavin Morris of £18,000 (2024: £30,000) is the sum of
payments made to these individuals in lieu of Group pension contributions.
Sameera Khaliq received share options as part of a long-term incentive scheme
- further details of these share option schemes can be found in note 10.
Carl D'Ammassa is the highest paid Director with total remuneration of
£1,268,000 (2024: £1,068,000) in the year ended 31 December 2025.
10. Share-based payments
The share-based payment expense during the year comprised the following:
2025 2024
£'000 £'000
Performance Share Plan (PSP) 1,156 958
Sharesave Scheme (SAYE) 98 27
Total share-based payments expense 1,254 985
The Group has the following share options scheme for employees which have been
granted and remain outstanding at 31 December 2025:
Plan No. of options outstanding Options outstanding value Grant dates Vesting dates Exercise price Performance conditions attached Settlement method Charge for year ended 31 December 2025
31 December 2025
31 December 2025
£'000
£'000
General Award 2020 95,000 36 Jun-20 Jun-23 Nil No Equity -
General Award 2021 79,903 49 Jun-21 Jun-24 Nil No Equity -
General Award 2022 196,948 73 May-22 May-25 Nil No Equity 16
General Award 2023 270,041 91 Apr-23 Apr-26 Nil No Equity 36
General Award 2024 777,251 92 Apr-24 Apr-27 Nil No Equity 55
Manager CSOP Award 339,794 27 Aug-20 Jun-21 40.5p No Equity -
Aug-20
Jun-22
Aug-20
Jun-23
Manager PSP Award 301,904 122 Aug-20 Aug-20 Nil No Equity -
Aug-20
Jun-21
Aug-20
Jun-22
CEO Recruitment Award 900,000 338 Jun-20 Jun-23 Nil Yes Equity -
Senior Manager Award 2020 430,720 156 Jun-20 Jun-23 Nil Yes Equity -
Senior Manager Award 2021 45,000 26 Jun-21 Sep-22 Nil No Equity -
Jun-21
Jun-24
Nov-21
Nov-24
Senior Manager Award 2022 1,175,000 412 May-22 May-25 Nil Yes Equity 57
Sep-22
Sep-25
Senior Manager Award 2023 4,689,317 1,540 Apr-23 Apr-26 Nil Yes Equity 621
Aug-23
Aug-26
Oct-23
Aug-26
Senior Manager Award 2024 2,100,000 329 Jan-24 Jan-27 Nil No Equity 223
Apr-24
Apr-27
Jul-24
Jul-27
Nov-24
Nov-27
Senior Manager Award 2025 900,000 80 Mar-25 Mar-28 Nil No Equity 80
May-25
May-28
Leader & High Performer Award 2022 109,279 41 May-22 May-25 Nil No Equity 9
Feb-23
May-25
Leader & High Performer Award 2023 479,644 162 Apr-23 Apr-26 Nil No Equity 59
Sharesave Scheme 2,636,696 140 Nov-21 Jan-25 46.3p No Equity 98
Jun-22
Aug-25
30p
May-23
Aug-26
30.72p
May-24
May-27
18p
TOTAL 15,526,497 3,714 1,254
All awards are equity-settled, and the shares awarded for all schemes are
Distribution Finance Capital Holdings plc ordinary shares of £0.01 each of
the current share capital of the Company which are listed on the Alternative
Investment Market (AIM). The awards were granted to employees and Directors
within the Group with the majority of the employees being employed by DF
Capital Bank Limited.
During the year ended 31 December 2025, the movements in share options
granted, forfeited, and exercised were as follows:
Plan CEO Recruitment Award CSOP/PSP General/High Performer Senior Manager Award SAYE Total
No. No. No. No. No. No.
Year ended 31 December 2025
Outstanding at start of year 900,000 686,202 2,347,383 8,797,601 2,312,987 15,044,173
Granted during the year - - - 900,000 798,084 1,698,084
Forfeited during the year - - (125,328) (150,000) (150,375) (425,703)
Exercised during the year - (44,504) (213,989) (207,564) (324,000) (790,057)
Outstanding at end of the year 900,000 641,698 2,008,066 9,340,037 2,636,696 15,526,497
Exercisable at end of the year 900,000 641,698 481,130 1,670,037 - 3,692,865
Year ended 31 December 2024
Outstanding at start of year 900,000 1,205,966 1,728,337 7,601,253 1,418,952 12,854,508
Granted during the year - - 920,000 2,350,000 1,977,620 5,247,620
Forfeited during the year - - (236,528) (1,003,292) (1,083,585) (2,323,405)
Exercised during the year - (519,764) (64,426) (150,360) - (734,550)
Outstanding at end of the year 900,000 686,202 2,347,383 8,797,601 2,312,987 15,044,173
Exercisable at end of the year 900,000 686,202 211,150 544,114 - 2,341,466
The fair value at grant date is calculated by taking into consideration any
restrictive vesting criteria, including any market and/or non-market
performance conditions. The below table summarises the share schemes including
the weighted average remaining contractual years and the weighted average fair
value at grant date:
2025 2024
Plan Options outstanding at end of the year Weighted average remaining contractual life (years) Weighted average fair value at grant date Options outstanding at end of the year Weighted average remaining contractual life (years) Weighted average fair value at grant date
(No.)
(pence)
(No.)
(pence)
CEO Recruitment Award 900,000 - 37.50 900,000 - 37.50
CSOP/PSP 641,698 - 23.29 686,202 - 22.30
General/High Performer 2,008,066 0.8 33.32 2,347,383 1.5 33.79
Senior Manager Award 9,340,037 0.9 35.58 8,797,601 1.5 35.52
SAYE 2,636,696 1.7 14.09 2,312,987 2.1 13.96
15,526,497 15,044,173
Where a share award scheme has an exercise price that is equal to £nil,
valuation models such as the Black Scholes valuation model cannot be used to
determine the fair value of the award at the grant date, therefore, it is
assumed the market price of the share is assumed to be the fair value. For
schemes which have an exercise price greater than £nil, the Group has used
the following variables for the respective schemes:
Manager CSOP Award Sharesave Scheme Sharesave Scheme Sharesave Scheme Sharesave Scheme
Grant date Aug-20 Jun-22 May-23 May-24 May-25
Contractual life (years) 3 3 3 3 3
Share price at issue (pence) 40.50 37.50 38.40 29.00 36.50
Exercise price (pence) 40.50 30.00 30.72 18.00 26.08
Expected volatility (%) 30.00% 30.00% 30.00% 30.00% 30.00%
Risk-free rate (%) 0.20% 2.08% 3.91% 4.30% 3.83%
Dividend yield (%) 0.00% 0.00% 0.00% 0.00% 0.00%
The terms of the individual schemes are as follows:
General Award
Nil cost options over ordinary shares of £0.01 each of the current share
capital of the Company granted to all employees (excluding Directors). These
options vest over a 3-year period and are not subject to specific performance
conditions. In the year ended 31 December 2025 there were no further awards
under this scheme.
Manager PSP and CSOP Award
As part of a Group reorganisation of its existing share capital and employee
loan agreements in the year ended 31 December 2020, managers and former
managers were awarded share options so that they were not disadvantaged by
this exercise. PSP scheme nil cost options and Company Share Option Scheme
shares ("CSOP") were issued over ordinary shares of £0.01 each of the share
capital of the Company. The CSOP Options have an exercise price per share of
40.5p equal to the market value of Ordinary Shares as at the time of grant and
the PSP Options are nil cost options. The PSP and CSOP Options became
exercisable on the same timeline, and in the same proportions, that the
corresponding original Ordinary Shares would have become freely transferable
on the terms on which they were held. The Options are not subject to the
satisfaction of performance conditions.
The fair value of the CSOP was measured at the grant date using the
Black-Scholes model - see table above for further details of the inputs into
this valuation model.
No further awards under this scheme were granted in the years ended 31
December 2025 and 31 December 2024.
Senior Manager Award
Nil cost options over ordinary shares of £0.01 each of the current share
capital of the Company were granted to certain senior managers. All of these
share awards have been granted in line with our PSP rules and have performance
conditions aligned to financial performance, risk management and cultural
objectives.
In the year ended 31 December 2025, Senior Managers were granted additional
awards as recruitment incentives. No performance conditions are included for
all of the 900,000 awards granted in the year ended 31 December 2025, and all
awards vest over a 3-year period subject to service conditions being met.
Sharesave Scheme
The Group has operated a 'Save As You Earn' scheme ('SAYE' or 'Sharesave
Scheme') for several years which is available to all UK-based employees. This
is a HMRC-approved share scheme, whereby the scheme allows employees to
purchase options by saving a fixed amount of between £10 and £500 per month
over a period of three years at the end of which the options, subject to
leaver provisions, are usually exercisable. If not exercised, the amount saved
is returned to the employee. During the year ended 31 December 2025, the Group
offered a scheme with a grant date of May 2025 and a vesting date of July
2028. The option price is calculated using the closing bid-market price of a
Distribution Finance Capital Holdings plc ordinary share over the five dealing
days prior to the Invitation Date and applying a discount of 20%.
The fair value at grant date for the schemes is calculated by using the
Black-Scholes Model - see table above for further details of the inputs into
this valuation model.
Director share awards:
The below table summarises share options which have been awarded to Directors
as part of long-term incentive schemes:
Options outstanding at start of year Options granted during the year Options forfeited during the year Options exercised during the year Options outstanding at end of the year Options exercisable at end of the year
Plan No. No. No. No. No. No.
Year ended 31 December 2025
Carl D'Ammassa:
General Award 2020 5,000 - - - 5,000 5,000
CEO Recruitment Award 900,000 - - - 900,000 900,000
Senior Manager Award 2022 400,000 - - - 400,000 400,000
Senior Manager Award 2023 1,168,000 - - - 1,168,000 -
Senior Manager Award 2024 1,000,000 - - - 1,000,000 -
Sharesave Scheme - 70,552 - - 70,552 -
3,473,000 70,552 - - 3,543,552 1,305,000
Gavin Morris(1):
General Award 2020 5,000 - - - 5,000 5,000
Manager CSOP Award 74,074 - - - 74,074 74,074
Manager PSP Award 19,733 - - - 19,733 19,733
Senior Manager Award 2020 130,720 - - - 130,720 130,720
Senior Manager Award 2022 200,000 - - - 200,000 200,000
Senior Manager Award 2023 753,000 - - - 753,000 -
Senior Manager Award 2024 200,000 - - - 200,000 -
Sharesave Scheme 60,000 - - - 60,000 -
1,442,527 - - - 1,442,527 429,527
Sameera Khaliq(2):
Senior Manager Award 2025 - 600,000 - - 600,000 -
Total Director Awards 4,915,527 670,552 - - 5,586,079 1,734,527
Year ended 31 December 2024
Carl D'Ammassa:
General Award 2020 5,000 - - - 5,000 5,000
CEO Recruitment Award 900,000 - - - 900,000 900,000
Senior Manager Award 2022 400,000 - - - 400,000 -
Senior Manager Award 2023 1,168,000 - - - 1,168,000 -
Senior Manager Award 2024 - 1,000,000 - - 1,000,000 -
Sharesave Scheme 60,000 - (60,000) - - -
2,533,000 1,000,000 (60,000) - 3,473,000 905,000
Gavin Morris
General Award 2020 5,000 - - - 5,000 5,000
Manager CSOP Award 74,074 - - - 74,074 74,074
Manager PSP Award 19,733 - - - 19,733 19,733
Senior Manager Award 2020 130,720 - - - 130,720 130,720
Senior Manager Award 2022 200,000 - - - 200,000 -
Senior Manager Award 2023 753,000 - - - 753,000 -
Senior Manager Award 2024 - 200,000 - - 200,000 -
Sharesave Scheme 60,000 - - - 60,000 -
1,242,527 200,000 - - 1,442,527 229,527
Total Director Awards 3,775,527 1,200,000 (60,000) - 4,915,527 1,134,527
(1)Gavin Morris resigned as a director on 31 July 2025.
(2)Sameera Khaliq was appointed as a director on 7 July 2025.
See above section within this note for further details of the schemes,
including the fair value (market price) at grant date. No performance
conditions are attached to the Senior Manager Award 2025 for Sameera Khaliq.
All awards are subject to service conditions being met over the vesting
period.
11. Other operating expenses
2025 2024
Note £'000 £'000
Finance costs 263 103
Depreciation 16,17 945 641
Amortisation of intangible assets 18 279 285
(Gain)/Loss on disposal of fixed assets (3) 5
Loss on disposal of intangible assets 18 6 6
Professional services expenses 3,450 2,998
Audit and accountancy fees 14 602 480
IT-related expenses 3,740 3,502
Premises Costs 814 439
Other staff costs 830 595
Bank Charges/Fees 207 165
Charitable Donations 119 23
Release Dilapidation Provision 12 (167) -
Impairment of fixed assets 16 275 -
Irrecoverable VAT (227) 1,041
Other operating expenses 288 280
Corporation tax interest 76 -
Total other operating expenses 11,497 10,563
During the year ended 31 December 2025, the Group received a VAT recovery of
£1,463,314 from HMRC in respect of an updated Partial Exemption Special
Method.
12. Provisions
Analysis for movements in provisions:
Leasehold dilapidations Other provisions Total
£'000 £'000 £'000
Year ended 31 December 2025
At start of period 235 50 285
Additions 234 - 234
Utilisation of provision (84) - (84)
Unused amounts reversed (167) (50) (217)
Unwinding of discount 37 - 37
Lease modification - - -
At end of year 255 - 255
Year ended 31 December 2024
At start of period 67 - 67
Additions - 50 50
Utilisation of provision - - -
Unused amounts reversed - - -
Unwinding of discount 6 - 6
Lease modification 162 - 162
At end of year 235 50 285
As detailed in note 17, the Group currently leases office premises at its
Manchester headquarters. At the end of the contractual lease term in March
2035, the Group is required to return the leased premises in their original
state. The Group has recognised total restoration costs of £717,000 based on
an assessment provided by an independent third-party specialist. These amounts
have been discounted to present value by using an applicable discount factor.
In the year ended 31 December 2024, the Group recognised a £50,000 provision
in relation to a customer dispute. During 2025, the Group performed a
reassessment and concluded that it was no longer probable that an outflow of
economic resources would be required. Accordingly, the provision was released
in full.
13. Net impairment loss/(gain) on financial assets
2025 2024
£'000 £'000
Movement in impairment allowance in the year 2,264 (8,062)
Write-offs 1,826 7,509
Recovery transaction costs 207 351
Bad debt VAT relief (30) (39)
Total net impairment losses on financial assets 4,267 (241)
See notes 19 and 23 for further analysis of the movement in impairment
allowances on loans and advances to customers and trade receivables
respectively.
Analysis of write-offs:
2025 2024
Note £'000 £'000
Realised losses on loan receivables 19 1,710 7,286
Realised losses on trade receivables 23 116 223
Total write-offs 1,826 7,509
14. Auditor's remuneration
Analysis of auditor's remuneration:
2025 2024
£'000 £'000
Audit services:
Fees payable to the Company's auditor for the audit of the Company's annual 88 85
accounts
Fees payable to the Company's auditor for the audit of its subsidiaries 350 255
Fees paid to the Company's auditors relating to prior periods 62 40
Total audit services fees 500 380
Assurance services:
Interim review 81 78
Profit verification 21 22
Total assurance services fees 102 100
Total auditor's remuneration 602 480
15. Taxation
Analysis of tax charge recognised in the period:
2025 2024
£'000 £'000
Current taxation charge:
UK corporation tax on profit for the current period 1,998 1,925
Adjustments in respect of prior years 1 (3)
Total taxation charge 1,999 1,922
Deferred taxation charge:
Current period 3,078 3,135
Adjustments in respect of prior years (595) (4)
Total deferred taxation charge 2,483 3,131
Total taxation charge 4,482 5,053
Reconciliation of profit before taxation to total tax charge recognised:
2025 2024
£'000 £'000
Profit on ordinary activities before taxation 19,641 19,074
Taxation on Profit on ordinary activities at standard corporation tax rate of 4,910 4,769
25% (2024: 25%)
Effects of:
Fixed asset differences 36 14
Disallowable expenses 158 322
Other permanent differences (28) (45)
Other short-term timing differences for which no deferred tax asset has been - -
recognised
Current year losses for which no deferred tax asset has been recognised - -
Adjustments in respect of prior years 1 (3)
Remeasurement of deferred tax for changes in tax rates (595) (4)
Total tax charge 4,482 5,053
Current tax on profits reflects UK corporation tax levied at a rate of 25% for
the year ended 31 December 2025 (31 December 2024: 25%). The Company is not
subject to the banking surcharge levied at a rate of 3% (31 December 2024: 3%)
on the profits of banking companies chargeable to corporation tax after an
allowance of £100m (31 December 2024: £100m) per annum.
Expenses that are not deductible in determining taxable profits/losses include
impairment losses, amortisation of intangible assets, depreciation of fixed
assets, client and staff entertainment costs, and professional fees which are
capital in nature.
A deferred tax asset is only recognised to the extent the Group finds it
probable that the prior taxable losses can be utilised against future taxable
profits. As at 31 December 2025, the Group has an estimated unrecognised
deferred tax asset of £nil (31 December 2024: £nil) from prior taxable
losses.
In the year ended 31 December 2025, the Group has recognised a deferred tax
asset in respect of future taxable profits, and a deferred tax asset in
respect of share-based payments. Further detail on the deferred taxation asset
is provided in note 26.
16. Property, plant and equipment
2025 2024
£'000 £'000
Leasehold improvements 1,905 133
Furniture, fixtures & fittings 649 67
Computer hardware 646 147
Telephony & communications 23 2
Motor vehicles 574 744
Total property, plant and equipment 3,797 1,093
Leasehold Improvements Furniture, Fixtures & Fittings Computer Hardware Telephony & Communications Motor Vehicles Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost:
As at 1 January 2024 23 152 264 - 1,109 1,548
Additions 166 13 111 4 103 397
Disposals and write offs - - (8) - - (8)
As at 31 December 2024 189 165 367 4 1,212 1,937
Additions 1,939 660 648 30 280 3,557
Disposals and write offs (188) (165) (149) (9) (82) (593)
Impairment - - - - (275) (275)
As at 31 December 2025 1,940 660 866 25 1,135 4,626
Accumulated depreciation:
As at 1 January 2024 9 43 118 - 233 403
Charge for the year 47 55 105 2 235 444
Disposals and write offs - - (3) - - (3)
As at 31 December 2024 56 98 220 2 468 844
Charge for the year 167 78 149 5 148 547
Disposals and write offs (188) (165) (149) (5) (55) (562)
As at 31 December 2025 35 11 220 2 561 829
Carrying amount:
At 31 December 2024 133 67 147 2 744 1,093
At 31 December 2025 1,905 649 646 23 574 3,797
In the year ended 31 December 2025, the Group performed an impairment
assessment of property, plant and equipment which resulted in the recognition
of an impairment charge of £275,000 in relation to motor vehicles.
During the year, the Group disposed of assets with an initial cost of
£593,000, of which £502,000 were fully depreciated (2024: £nil). The
remaining disposed assets had an initial cost of £91,000 with a net book
value of £31,000. These assets were sold for £34,000, therefore an
associated net gain on disposal of £3,000 was recognised. See note 11 for
further details.
17. Right-of-use assets
Buildings
£'000
Cost:
As at 1 January 2024 2,127
Additions 8
Disposals and write offs -
Lease modifications (836)
As at 31 December 2024 1,299
Additions 2,551
Disposals and write offs (1,299)
Lease modifications -
As at 31 December 2025 2,551
Accumulated depreciation:
As at 1 January 2024 900
Charge for the year 197
Disposals and write offs -
As at 31 December 2024 1,097
Charge for the year 398
Disposals and write offs (1,299)
As at 31 December 2025 196
Carrying amount:
At 31 December 2024 202
At 31 December 2025 2,355
During the year, the Group entered into a lease agreement for a new office
space. This lease agreement commenced in March 2025 and therefore in
accordance with IFRS16, a right of use asset and lease liability were
recognised from that point within the consolidated financial statements.
The maturity analysis of lease liabilities is presented in note 33.
Amounts recognised in the income statement:
2025 2024
£'000 £'000
Depreciation expense on right-of-use assets 398 197
Interest expense on lease liabilities 224 103
Expense relating to short-term leases - -
Expense relating to leases of low value assets 12 13
Expenses relating to non-lease components 241 126
Total amounts recognised in the income statement 875 439
18. Intangible assets
2025 2024
£'000 £'000
Computer software 745 950
Total intangible assets 745 950
Computer software
£'000
Cost
At 1 January 2024 1,520
Additions from internal development 623
Additions from separate acquisitions -
Disposals and write offs (53)
At 31 December 2024 2,090
Additions from internal development 80
Additions from separate acquisitions -
Disposals and write offs (230)
As at 31 December 2025 1,940
Accumulated amortisation
At 1 January 2024 902
Charge for the year 285
Disposals and write offs (47)
At 31 December 2024 1,140
Charge for the year 279
Disposals and write offs (224)
As at 31 December 2025 1,195
Carrying amount
At 31 December 2024 950
At 31 December 2025 745
In the year ended 31 December 2025, the Group capitalised £80,000 (2024:
£623,000) of consultancy costs in relation to the development of software
platforms to provide an asset finance capability, improving the commercial
lending processes, enhancing the customer journey for commercial clients and
development of the customer deposits platform. The amortisation period for
these software costs is within a range of 3-5 years following an individual
assessment of the asset's expected life. The Group performed an impairment
review at 31 December 2025 and concluded an impairment of £nil (2024: £nil).
In the year ended 31 December 2025, the Group wrote off fully depreciated
intangible assets of £224,000 (2024: £nil).
19. Loans and advances to customers
2025 2024
£'000 £'000
Loan book principal 845,966 665,709
Accrued interest and fees 4,141 4,067
Gross carrying amount 850,107 669,776
less: impairment allowance (8,501) (6,577)
less: effective interest rate adjustment (2,080) (2,427)
Total loans and advances to customers 839,526 660,772
Refer to note 37 for details on the expected maturity analysis of the gross
loans receivable balance.
Refer to note 13 and 37 for further details on the impairment losses
recognised in the periods.
Ageing analysis of gross loan receivables:
2025 2024
£'000 £'000
Not yet past due 842,912 664,960
Past due: 1 - 30 days (Early arrears) 175 1,101
Past due: 31 - 90 days (Mid/Late arrears) 350 739
Past due: 90+ days (Default) 6,670 2,976
Total gross carrying amount 850,107 669,776
Analysis of gross loans and advances to customers:
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2025 643,513 18,484 7,779 669,776
Transfer to stage 1 16,598 (13,352) (3,246) -
Transfer to stage 2 (101,638) 102,896 (1,258) -
Transfer to stage 3 (16,207) (15,798) 32,005 -
Net lending/(repayment) 243,479 (37,489) (23,949) 182,041
Write-offs (16) - (1,694) (1,710)
Total movement in gross loan receivables 142,216 36,257 1,858 180,331
As at 31 December 2025 785,729 54,741 9,637 850,107
Loss allowance coverage at 31 December 2025 0.56% 1.30% 35.51% 1.00%
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
545,952 21,052 17,123 584,127
As at 1 January 2024
Transfer to stage 1 38,281 (38,204) (77) -
Transfer to stage 2 (82,317) 82,416 (99) -
Transfer to stage 3 (10,714) (7,327) 18,041 -
Net lending/(repayment) 152,311 (39,433) (19,943) 92,935
Write-offs - (20) (7,266) (7,286)
Total movement in gross loan receivables 97,561 (2,568) (9,344) 85,649
As at 31 December 2024 643,513 18,484 7,779 669,776
Loss allowance coverage at 31 December 2024 0.57% 0.90% 34.95% 0.98%
Analysis of impairment losses on loans and advances to customers:
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2025 3,692 166 2,719 6,577
Transfer to stage 1 214 (161) (53) -
Transfer to stage 2 (690) 712 (22) -
Transfer to stage 3 (68) (139) 207 -
Remeasurement of impairment allowance (2,189) 384 4,616 2,811
Net lending/(repayment) 3,409 (251) (2,351) 807
Write-offs - - (1,694) (1,694)
Total movement in loss allowance 676 545 703 1,924
As at 31 December 2025 4,368 711 3,422 8,501
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2024 2,522 160 11,914 14,596
Transfer to stage 1 277 (275) (2) -
Transfer to stage 2 (425) 479 (54) -
Transfer to stage 3 (69) (173) 242 -
Remeasurement of impairment allowance (1,274) 560 3,191 2,477
Net lending/(repayment) 2,661 (582) (3,837) (1,758)
Write-offs - (3) (8,735) (8,738)
Total movement in loss allowance 1,170 6 (9,195) (8,019)
As at 31 December 2024 3,692 166 2,719 6,577
20. Investment Securities
2025 2024
£'000 £'000
Investments not measured at fair value:
Money market fund 5,722 769
5,722 769
Analysis of movements during the period:
At 1 January 2025 769 14,839
Purchased investment securities 21,080 10,659
Proceeds from sold or maturing securities (16,267) (25,000)
Coupons received - (75)
Interest income 62 271
Unrealised losses 78 -
Amounts transferred to the income statement - 75
At 31 December 2025 5,722 769
Maturity profile of investment securities:
Within 12 months 5,722 769
Over 12 months - -
As at the year ended 31 December 2025, the Group's only active investment
security was a Euro liquidity short term low volatility money market fund
which the Group use to invest surplus funds from cross currency swaps which
are not yet used to fund customers. The fund invests in a range of cash
holding and short dated securities held to maturity, this materially removes
exposure to market movements, meaning the fund consistently trades at par
value. The Group have therefore treated the investment as a cash and cash
equivalent with related purchases and sales not recognised in the cash flow
statement. The Group receives dividends on the outstanding balance in the
money market fund, however, this is accounted for as interest income due to
the nature of the fund trading at par, which generates an agreed yield not
driven by market conditions.
In the year ended 31 December 2025, the Group held other investment securities
such as Government gilts and UK treasury bills which were not treated as cash
and cash equivalents and as such were included in the cash flow statement.
In accordance with IFRS 9, all investment securities were assessed for
impairment and treated as stage 1 assets in both reporting periods.
21. Derivatives
The table below reconciles the gains/(losses) on derivatives at fair value
through profit or loss:
2025 2024
£'000 £'000
Fair value changes in hedged item (248) 251
Fair value movement on derivatives:
Entered into hedging relationships 261 (56)
Not entered into hedging relationships (699) 141
Fair value movement before designation (96) -
Amortisation of inception adjustments 9 48
Other adjustments - (12)
(773) 372
The table below reconciles the gross amount of derivative contracts to the
carrying balance shown in the consolidated statement of financial position:
Gross amount of recognised financial assets/(liabilities) Net amount of financial assets/(liabilities) presented in the Statement of Cash collateral (payable)/receivable not offset in the Statement of Financial Net amount
Financial Position Position
£'000 £'000 £'000 £'000
31 December 2025
Derivative assets:
Interest rate risk hedging 350 350 (491) (141)
Foreign currency risk hedging 61 61 (87) (26)
Derivative liabilities:
Interest rate risk hedging (174) (174) 244 70
Foreign currency risk hedging (645) (645) 904 259
31 December 2024
Derivative assets:
Interest rate risk hedging 154 154 (180) (26)
Foreign currency risk hedging 141 141 - 141
Derivative liabilities:
Interest rate risk hedging (6) (6) - (6)
As at the year ended 31 December 2025, the Group hedges the foreign currency
risk of its outstanding euro receivable balances and the interest rate risk of
liabilities in the form of customer deposits and subordinated liabilities. The
majority of loans and advances to customers are expected to reprice within a
short time frame and are subsequently not hedged. The Group hedge a small
amount of longer-term loans and advances to customers accounting for £78,000
of the fair value movement on interest rate derivative liabilities.
All interest rate derivative instruments which have been entered into are
transacted against SONIA. All foreign currency risk derivative instruments
which have been entered into are transacted against the Euro.
Margin call collateral is either paid or received with the swap counterparties
on all active swap contracts - this has been included in the above table. As
at 31 December 2025, the Group has a variation margin receivable of £570,000
(2024: £180,000 payable) with swap counterparties. Further, the Group holds
£2,150,000 (2024: £2,000,000) of independent collateral with banks for swap
facilities, which is not included within the above table. See note 27 for the
balance of cash collateral held with banks.
The table below profiles the maturity of nominal amounts for interest rate
risk hedging derivatives based on contractual maturity:
Total nominal amount Less than 3 months 3 - 12 months 1 - 5 years More than 5 years
£'000 £'000 £'000 £'000 £'000
31 December 2025
Derivative assets
Interest rate risk hedging 75,000 15,000 25,000 35,000 -
Foreign currency risk hedging 8,776 - 8,776 - -
Derivative liabilities
Interest rate risk hedging 91,600 - 45,000 40,000 6,600
Foreign currency risk hedging 27,844 6,251 21,593 - -
203,220 21,251 100,369 75,000 6,600
31 December 2024
Derivative assets
Interest rate risk hedging 10,000 - - 10,000 -
Foreign currency risk hedging 4,283 - 4,283 - -
Derivative liabilities
Interest rate risk hedging 5,000 - 5,000 - -
19,283 - 9,283 10,000 -
The Group has 12 (2024: 3) interest rate swap contracts with an average fixed
rate of 3.89% (2024: 4.73%).
The Group has 11 (2024: 1) cross currency swap contracts which make up the
foreign currency risk hedging balance.
22. Hedge Accounting
2025 2024
£'000 £'000
Hedged liabilities:
Current hedge relationships 484 167
Swap inception adjustment (109) (31)
Fair value adjustments on hedged liabilities 375 136
The Group presently only enters into hedging relationships for retail deposits
and subordinated liabilities. This means that the fair value movement on
foreign currency derivatives and interest rate derivatives relating to loans
and advances to customers is taken directly to the statement of profit or
loss.
At present, the Group expects its hedging relationships to be highly effective
as the Group hedges liabilities for which the fair value movements between the
hedged item and hedging instrument are expected to be highly correlated.
Further, the Group does not anticipate having to rebalance the hedging
relationship once entered into due to the contractual terms of the hedged
liabilities meaning that the contractual cash flows are highly predictable,
with any deviation likely to be negligible.
The tables below analyse the Group's portfolio hedge accounting for interest
rate risk:
2025 2024
Hedged item Hedging instrument Hedged item Hedging instrument
£'000 £'000 £'000 £'000
Carrying amount of hedged item/nominal value of hedging instrument 160,472 160,000 15,167 15,000
Cumulative fair value adjustments of hedged item/fair value of hedging (375) 254 (136) 148
instrument
Changes in the fair value adjustment of hedged item/hedging instrument used (248) 166 251 (56)
for recognising the hedge ineffectiveness for the period
In the Consolidated Statement of Financial Position, £350,000 (2024:
£154,000) of hedging instruments were recognised within derivative assets;
and £96,000 (2024: £6,000) within derivative liabilities.
As at 31 December 2025, the net fair value of hedging instruments entered into
hedging relationships is £254,000. This excludes the fair value movement on
derivatives relating to foreign currency risk and interest rate risk not
entered into hedge accounting which is in a liability position of £78,000 at
the year end.
23. Trade and other receivables
2025 2024
£'000 £'000
Trade receivables 6,425 3,316
Impairment allowance (556) (216)
5,869 3,100
Other debtors 470 528
Prepayments 1,395 1,050
1,865 1,578
Total trade and other receivables 7,734 4,678
All trade receivables are due within one year, refer to note 37 for the
expected maturity profile.
The trade receivable balances are assessed for expected credit losses (ECL)
under the 'simplified approach', which requires the Group to assess all
balances for lifetime ECLs and is not required to assess significant increases
in credit risk.
Ageing analysis of trade receivables:
2025 2024
£'000 £'000
Not yet past due 5,792 3,149
Past due: 1 - 30 days (Early arrears) 357 54
Past due: 31 - 90 days (Mid/Late arrears) 41 15
Past due: 90+ days (Default) 235 98
Total trade receivables 6,425 3,316
Analysis of movement of impairment losses on trade receivables:
2025 2024
£'000 £'000
At 1 January 216 259
Amounts written off (116) (223)
Amounts recovered - -
Change in loss allowance due to new trade and other receivables originated net 456 180
of those derecognised due to settlement
At 31 December 556 216
24. Current taxation asset
2025 2024
£'000 £'000
At 1 January - 55
Payments/(Repayments) 40 (55)
At 31 December 40 -
25. Current taxation liability
2025 2024
£'000 £'000
At 1 January (1,259) (73)
Charge to profit and loss account (1,996) (1,925)
Payments 3,256 736
Adjustments in respect of prior years (1) 3
At 31 December - (1,259)
During the year ended 31 December 2025, the Group made quarterly corporation
tax instalment payments which have exceeded the estimated corporation tax
liability for the period. As a result, the Group is in a current tax asset
position at the reporting date.
Refer to note 26 for further details of the deferred taxation asset.
26. Deferred taxation asset
Deferred tax assets and liabilities are recognised on temporary differences
between the carrying amounts of assets and liabilities in the balance sheet
and the amounts attributed to such assets and liabilities for tax purposes.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent it is
probable that future taxable profits will be available against which
deductible temporary differences can be utilised. Deferred tax is determined
using tax rates and legislation in force at the balance sheet date and is
expected to apply when the deferred tax asset is realised, or the deferred tax
liability is settled.
The table below shows the movement in net deferred tax assets:
2025 2024
£'000 £'000
At 1 January 3,980 7,111
Charge to profit and loss account (3,078) (3,135)
Deferred tax directly included in equity 416 -
Adjustments in respect of prior years 594 4
At 31 December 1,912 3,980
See below for an analysis of the deferred taxation asset balance:
2025 2024
£'000 £'000
Losses 984 4,232
Short term timing differences 1,311 8
Fixed assets (383) (260)
Deferred taxation asset 1,912 3,980
The Group has recognised a deferred tax asset in 2025 of £1.3m in respect of
share-based payments, in addition to the existing deferred tax asset relating
to tax losses carried forward of £3.9m, short term timing difference of
£5.2m, and a deferred tax liability in relation to tangible fixed assets
differences of £1.5m. The Group expect to fully utilise the deferred tax
asset relating to historic tax losses during the year ended 31 December 2026.
The Group has an unrecognised deferred tax asset value of £0.7m (2024:
£0.7m).
27. Loans and advances to banks
2025 2024
£'000 £'000
Unencumbered:
Included in cash and cash equivalents: balances with less than three months to 3,165 1,764
maturity at inception
Encumbered:
Cash collateral on derivatives placed with banks:
Independent margin 2,150 2,000
Variation margin 570 -
Accrued interest on margins 9 7
Total loans and advances to banks 5,894 3,771
28. Notes to the cash flow statement
See below for reconciliation of balances classified as cash and cash
equivalents, which are recognised within the consolidated cash flow statement:
2025 2024
£'000 £'000
Cash and balances at central banks 131,676 110,030
Loans and advances to banks 3,165 1,764
Euro liquidity fund 5,722 769
Total cash and cash equivalents 140,563 112,563
Adjustments for non-cash items and other adjustments included in the income
statement:
2025 2024
Note £'000 £'000
Depreciation of property, plant and equipment 16 547 444
Depreciation of right-of-use assets 17 398 197
Impairment of property, plant and equipment 16 275 -
(Gain)/Loss on disposal of property, plant and equipment 11 (3) 5
Amortisation of intangible assets 18 279 285
Loss on disposal of intangible assets 11 6 6
Loss on lease modification - 30
Share-based payments 10 1,254 985
Impairment allowances on receivables 4,060 (241)
Movement in other provisions 12 (217) 50
Dividend income on money market funds 20 (60) (28)
Interest income on debt securities 20 (2) (243)
Finance costs 226 103
Unwind of discount 12 37 6
Interest on subordinated liabilities 5 1,331 1,272
Amortisation of subordinated liabilities acquisition costs 28 10 10
Movement in effective interest rate adjustment (347) 941
Total non-cash items and other adjustments 7,794 3,822
Net change in operating assets:
2025 2024
£'000 £'000
Increase in loans and advances to customers (181,714) (93,048)
Derivative financial instruments (asset) (123) 241
(Increase)/Decrease in other assets (4,517) 417
Increase in operating assets (186,354) (92,390)
Net change in operating liabilities:
2025 2024
£'000 £'000
Increase in customer deposits 190,900 75,043
Derivative financial instruments (liability) 812 (559)
Fair value adjustments for portfolio hedged risk 247 (288)
Increase in other liabilities 3,209 5,180
Increase in operating liabilities 195,168 79,376
Changes in liabilities arising from financing activities:
The table below details changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes. Liabilities
arising from financing activities are those for which cash flows were, or
future cash flows will be, classified in the Group's consolidated cash flow
statement as cash flows from financing activities.
2025 2024
Lease liabilities Subordinated Liabilities Own Shares Treasury Shares Lease liabilities Subordinated Liabilities Own Shares
(see note 33) (see note 35) (See note 31) Total (see note 33) (see note 35) (See note 31) Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 90 10,230 (440) - 9,880 1,205 10,221 (401) 11,025
Financing cash flows:
Recognition of subordinated liabilities - 5,000 - - 5,000 - - - -
Repayment of lease liabilities (108) - - - (108) (252) - - (252)
Coupon paid on subordinated liabilities (1,269) (1,269) - (1,273) - (1,273)
Purchase of own shares - - (192) - (192) - - (142) (142)
Purchase of treasury shares - - - (4,877) (4,877) - - - -
Receipt of cash from settlement of share options - - - 116 116 - - - -
Non-cash movements:
Interest expense on subordinated liabilities - 1,331 - - 1,331 - 1,272 - 1,272
Amortisation of subordinated liabilities acquisition costs - 10 - - 10 - 10 - 10
Recognition of lease liabilities 2,238 - - - 2,238 - - - -
Interest expense on lease liabilities 224 - - - 224 103 - - 103
Lease modification - - - - - (966) - - (966)
Settlement of employee share awards - - 84 6 90 - - 103 103
At 31 December 2,444 15,302 (548) (4,755) 12,443 90 10,230 (440) 9,880
29. Investment in subsidiaries
Subsidiary Principal activity Shareholding % Class of shareholding Country of incorporation Registered address
DF Capital Bank Limited Financial Services 100% Ordinary UK Express Building, 9 Great Ancoats Street, Manchester, England, M4 5AD
DF Capital Financial Solutions Limited Financial Services 100% Ordinary UK Express Building, 9 Great Ancoats Street, Manchester, England, M4 5AD
DF Capital Retail Finance Limited Financial Services 100% Ordinary UK Express Building, 9 Great Ancoats Street, Manchester, England, M4 5AD
30. Equity
2025 2024 2025 2024
No. No. £'000 £'000
Authorised:
Ordinary shares of 1p each 179,369,199 179,369,199 1,793 1,793
Allotted, issued and fully paid: Ordinary shares of 1p each 179,369,199 179,369,199 1,793 1,793
Included in the ordinary shares above are a total of 12,642,866 treasury
shares. In the year ended 31 December 2025, the Company repurchased 12,966,866
ordinary shares at a total cost of £4,876,862 inclusive of commission, these
were held in treasury shares. 324,000 of these shares were used to settle the
vesting of share option schemes during the year. This reduced the carrying
value of treasury shares by £121,857 to £4,755,005 as at 31 December 2025.
These treasury shares do not carry voting rights or rights to dividends while
held by the Company.
Analysis of the movements in equity:
The below table details equity movements within the share capital, share
premium and merger relief accounts during the years ended 31 December 2025 and
31 December 2024:
No. of shares Share Capital Merger Relief Total
# £'000 £'000 £'000
Balance at 1 January 2024 179,369,199 1,793 94,911 96,704
No movements in the year - - - -
Balance at 31 December 2024 179,369,199 1,793 94,911 96,704
No movements in the year - - - -
Balance at 31 December 2025 179,369,199 1,793 94,911 96,704
31. Own shares
At 31 December 2025 the Group's Employee Benefit Trust held 2,635,660 (2024:
2,677,998) ordinary shares in Distribution Finance Capital Holdings plc to
meet obligations under the Company's share and share option plans. The shares
are stated at cost and their market value at 31 December 2025 was £1,344,187
(2024: £990,859).
2025 2024
£'000 £'000
At 1 January (440) (401)
Acquisition of shares (192) (142)
Settlement of employee share awards 84 103
At 31 December (548) (440)
32. Merger reserve
There were no movements relating to the merger reserve account during years
ended 31 December 2025 and 31 December 2024.
33. Lease liabilities
2025 2024
£'000 £'000
At 1 January 90 1,205
Initial recognition 2,238 -
Interest expense 224 103
Lease payments (108) (252)
Lease modification - (966)
At 31 December 2,444 90
During the year ended 31 December 2025, the Group entered into a lease
agreement for a new office space. This lease agreement commenced in March 2025
and therefore in accordance with IFRS16, a right of use asset and lease
liability were recognised from that point within the consolidated financial
statements.
The lease agreement includes a rent-free period in the first 12 months from
inception. As a result, the expected lease repayments in the 12 months from
the reporting date are lower than the associated finance cost, resulting in a
negative current lease liability and the non-current element being higher than
the amount presented on the balance sheet.
The Group does not face a significant liquidity risk with regard to its lease
liabilities. Lease liabilities are monitored within the Group's treasury
function.
All lease obligations are denominated in currency units.
The maturity analysis of lease liabilities is as follows:
2025 2024
£'000 £'000
Analysed as:
Current (7) 90
Non-Current 2,451 -
Total lease liabilities 2,444 90
Maturity analysis of expected lease payments:
Year 1 275 109
Year 2 275 -
Year 3 408 -
Year 4 544 -
Year 5 544 -
Onwards 2,174 -
Total expected lease payments 4,220 109
Less: unearned interest (1,776) (19)
Total lease liabilities 2,444 90
34. Customer deposits
2025 2024
£'000 £'000
Customer deposits 840,565 649,665
Total customer deposits 840,565 649,665
Amounts repayable within one year 638,211 513,226
Amounts repayable after one year 202,354 136,439
840,565 649,665
Refer to note 37 for the maturity profile of the customer deposit balances.
35. Subordinated liabilities
2025 2024
£'000 £'000
Tier 2 notes 15,000 10,000
Accrued interest 330 268
Deferred acquisition costs (28) (38)
Total subordinated liabilities 15,302 10,230
Refer to note 37 for the maturity profile of the subordinated liabilities.
36. Trade and other payables
2025 2024
£'000 £'000
Current liabilities
Trade payables 311 524
Social security and other taxes 564 62
Corporation tax interest 76 -
Other creditors 5,662 4,165
Pension contributions 99 77
Accruals 5,988 4,427
Total current liabilities 12,700 9,255
Non-current liabilities
Social security and other taxes 122 80
Total non-current liabilities 122 80
Total trade and other payables 12,822 9,335
Refer to note 37 for the maturity profile of the trade payables.
37. Financial instruments
The Directors have performed an assessment of the risks affecting the Group
through its use of financial instruments and believe the principal risks to
be: Treasury (covering capital management, liquidity and interest rate risk);
and Credit risk.
This note describes the Group's objectives, policies and processes for
managing the material risks and the methods used to measure them. The
significant accounting policies regarding financial instruments are disclosed
in note 2.
Capital management
The Group manages its capital to ensure that it will be able to continue as a
going concern while providing an adequate return to shareholders.
The capital structure of the Group consists of equity (comprising issued
capital, merger relief, merger reserve, own shares, treasury shares and
retained earnings - see notes 30 to 32) and subordinated liabilities (see note
35).
As a regulated banking Group, the Group is required by the Prudential
Regulation Authority (PRA) to hold sufficient regulatory capital. The Group is
required by the PRA to conduct an Internal Capital Adequacy Assessment Process
("ICAAP") to assess the appropriate amount of regulatory capital to be held by
the Group as a measure of its risk weighted assets ("RWAs"), in accordance
with the Group's risk management framework. The ICAAP identifies all key risks
to the Bank and how the Group manages these risks. The document outlines the
capital resources of the Group, its perceived capital requirements, and
capital adequacy over a 3-year period. Within this process the Group conducts
a stress testing process to identify key risks, the potential capital
requirements and whether the Group has sufficient capital buffers to withstand
such events. The Group uses the Standardised Approach (SA) for calculating the
capital requirements for credit risk, and Counterparty Credit Risk (SA-CCR)
and the Basic Indicator Approach (BIA) for operational risk. The ICAAP is
currently approved by the Group Board at least annually. This will be reviewed
in conjunction with the new SDDT Capital Regime, which the Group will move to
from 1(st) January 2027.
The regulatory capital resources of the Group were as follows (unaudited):
2025 2024
£'000 £'000
CET1 capital: instruments and reserves
Called up share capital 1,793 1,793
Retained earnings account 56,438 39,624
Accumulated other comprehensive income & other reserves 68,999 73,937
CET1 capital before regulatory adjustments 127,230 115,354
CET1 capital: regulatory adjustments
Intangible assets (745) (950)
Investment in own shares (1,187) (1,549)
Prudent valuation adjustment (1) -
Deferred tax asset (1,912) (3,980)
Exposure amount qualifying for a RW of 1250% (10,942) (10,095)
CET1 capital 112,443 98,780
Tier 1 capital 112,443 98,780
Tier 2 capital 15,302 10,230
Total regulatory capital 127,745 109,010
This table is not subject to audit.
The return on assets of the Group (calculated as profit after taxation divided
by average total assets) was 1.73% (2024: 1.96%).
Information disclosure under Pillar 3 of the Capital Requirements Directive is
published on the Group's website at www.dfcapital-investors.com
(http://www.dfcapital-investors.com)
Principal financial instruments
The principal financial instruments to which the Group is party, and from
which financial instrument risk arises, are as follows:
§ Cash and balances at central banks, which are considered risk free;
§ Loans and advances to banks, which can be a source of credit risk but are
primarily liquid assets available to further business objectives or to settle
liabilities as necessary;
§ Loans and advances to customers, primarily credit risk, interest rate risk,
and liquidity risk;
§ Investment securities, source of interest rate risk;
§ Derivative instruments, credit and liquidity risk;
§ Customer deposits, primarily interest rate risk and liquidity risk;
§ Subordinated liabilities, primarily interest rate risk and liquidity risk;
§ Trade receivables, primarily credit risk and liquidity risk;
§ Trade and other payables, primarily credit risk and liquidity risk.
Summary of financial assets and liabilities:
Below is a summary of the financial assets and liabilities held on the Group's
statement of financial position at the reporting dates. These values are
reflected at their carrying amounts at the respective reporting date:
Amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
31 December 2025 £'000 £'000 £'000 £'000
Financial assets:
Cash and balances at central banks 131,676 - - 131,676
Loans and advances to banks 5,894 - - 5,894
Investment securities 5,722 - - 5,722
Derivative assets - - 411 411
Loans and advances to customers 839,526 - - 839,526
Trade receivables 5,869 - - 5,869
Other receivables 470 - - 470
Total financial assets 989,157 - 411 989,568
31 December 2025
Financial liabilities:
Customer deposits 840,565 - - 840,565
Derivative liabilities - - 819 819
Other financial liabilities 2,444 - - 2,444
Subordinated liabilities 15,302 - - 15,302
Trade payables 311 - - 311
Other payables 6,523 - - 6,523
Total financial liabilities 865,145 - 819 865,964
Amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
31 December 2024 £'000 £'000 £'000 £'000
Financial assets:
Cash and balances at central banks 110,030 - - 110,030
Loans and advances to banks 3,771 - - 3,771
Investment securities 769 - - 769
Derivative assets - - 295 295
Loans and advances to customers 660,772 - - 660,772
Trade receivables 3,100 - - 3,100
Other receivables 528 - - 528
Total financial assets 778,970 - 295 779,265
31 December 2024
Financial liabilities:
Customer deposits 649,665 - - 649,665
Derivative liabilities - - 6 6
Other financial liabilities 90 - - 90
Subordinated liabilities 10,230 - - 10,230
Trade payables 524 - - 524
Other payables 4,384 - - 4,384
Preference shares - - - -
Total financial liabilities 664,893 - 6 664,899
Analysis of financial instruments by valuation model
The Group measures fair values using the following hierarchy of methods:
§ Level 1 - Quoted market price in an active market for an identical instrument
§ Level 2 - Valuation techniques based on observable inputs. This category
includes instruments valued using quoted market prices in active markets for
similar instruments, quoted prices for similar instruments that are considered
less than active, or other valuation techniques where all significant inputs
are directly or indirectly observable from market data
§ Level 3 - Inputs for the assets or liabilities that are not based on
observable market data (unobservable inputs)
Financial assets and liabilities that are not measured at fair value:
Carrying amount Fair value Level 1 Level 2 Level 3
31 December 2025 £'000 £'000 £'000 £'000 £'000
Financial assets not measured at fair value:
Cash and balances at central banks 131,676 131,676 131,676 - -
Loans and advances to banks 5,894 5,894 5,894 - -
Investment securities 5,722 5,722 5,722 - -
Loans and advances to customers 839,526 839,526 - - 839,526
Trade receivables 5,869 5,869 - - 5,869
Other receivables 470 470 - - 470
989,157 989,157 143,292 - 845,865
Financial liabilities not measured at fair value:
Customer deposits 840,565 838,673 - - 838,673
Other financial liabilities 2,444 2,444 - - 2,444
Subordinated liabilities 15,302 15,727 - 15,727 -
Trade payables 311 311 - - 311
Other payables 6,523 6,523 - - 6,523
865,145 863,678 - 15,727 847,951
Carrying amount Fair value Level 1 Level 2 Level 3
31 December 2024 £'000 £'000 £'000 £'000 £'000
Financial assets not
measured at fair value:
Cash and balances at central banks 110,030 110,030 110,030 - -
Loans and advances to banks 3,771 3,771 3,771 - -
Investment securities 769 769 769 - -
Loans and advances to customers 660,772 660,772 - - 660,772
Trade receivables 3,100 3,100 - - 3,100
Other receivables 528 528 - - 528
778,970 778,970 114,570 - 664,400
Financial liabilities not
measured at fair value:
Customer deposits 649,665 650,736 - - 650,736
Other financial liabilities 90 90 - - 90
Subordinated liabilities 10,230 10,567 - 10,567 -
Trade payables 524 524 - - 524
Other payables 4,384 4,384 - - 4,384
664,893 666,301 - 10,567 655,734
Where assets and liabilities are not measured at fair value, the Group has
calculated their fair values at the reporting date as follows:
Cash and balances at central banks
This represents cash held at central banks where fair value is considered to
be equal to carrying value.
Loans and advances to banks
This mainly represents the Group's working capital current accounts with other
banks with an original maturity of less than one month. Fair value is not
considered to be materially different to carrying value.
Investment securities
The investment securities carried at amortised cost represent the Group's
investment in a money market fund. Due to the short-term nature of the
underlying investments which are held to maturity, the fund has never deviated
from par value. The carrying value is therefore considered to be approximately
equal to the fair value.
Loans and advances to customers
The group has performed an assessment to determine the fair value of loans and
advances to customers, and it was determined that due to the majority being
short-term in nature, their carrying value is materially equal to their fair
value.
Customer deposits
The fair value of fixed rate customer deposits has been estimated by
discounting future cash flows at current market rates of interest which are
currently higher than current customer rates offered and as such the
discounting is higher and the fair value is estimated to be less than carrying
value.
Subordinated liabilities
The fair value of the subordinated liabilities is estimated by discounting the
expected cashflows using an interest rate for similar liabilities with the
same remaining maturity rate and credit profile.
Trade and other receivables, other borrowings and other liabilities
These represent short-term receivables and payables and as such their carrying
value is considered to be equal to their fair value.
Financial assets and liabilities included in the statement of financial
position that are measured at fair value:
Carrying amount Principal amount Level 1 Level 2 Level 3
31 December 2025 £'000 £'000 £'000 £'000 £'000
Financial assets measured at fair value:
Derivative assets 411 83,776 - 411 -
411 83,776 - 411 -
Financial liabilities measured at fair value:
Derivative liabilities 819 119,444 - 819 -
819 119,444 - 819 -
Carrying amount Principal amount Level 1 Level 2 Level 3
31 December 2024 £'000 £'000 £'000 £'000 £'000
Financial assets
measured at fair value:
Derivative assets 295 10,000 - 295 -
295 10,000 - 295 -
Financial liabilities
measured at fair value:
Derivative liabilities 6 5,000 - 6 -
6 5,000 - 6 -
Derivatives
Derivative instruments fair values are provided by a third party and are based
on the market values of similar financial instruments.
Financial risk management
The Group's activities and the existence of the above financial instruments
expose it to a variety of financial risks.
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies. The overall objective of the Board is to
set policies that seek to reduce ongoing risk as far as possible without
unduly affecting the Group's competitiveness and flexibility.
The Group is exposed to the following financial risks:
§ Credit risk
§ Liquidity risk
§ Interest rate risk
Further details regarding these policies are set out below.
Credit risk
Credit risk is the risk of financial loss arising from a client, customer or
counterparty failing to meet their financial obligations to the Group or repay
in accordance with agreed terms. Credit risk is considered the most
significant risk faced by the Group.
Credit risk management
The Group has a dedicated credit risk function, which is responsible for
implementing a credit framework and complying with lending policy and
standards. The overriding objective of the framework is to ensure that the
Group operates within its agreed credit appetite, as set by the Board. The
main categories of credit risk are
· Client default risk - risks arising from the failure of a
borrower.
· Credit concentration risk - risk of loss from concentration of
credit risk to a specific individual (or aggregated group), counterparty,
asset class or industry sector.
· Repurchase risk - risk of loss arising from the failure of a
manufacturer to meet a claim under a re-purchase agreement.
· Security risk - losses from the realisation of assets charged or
pledged to the Bank. This includes a sale out of trust.
· Counterparty risk - the failure of a bank counterparty or
derivative provider.
The credit risk function ensure that credit risk exposures are compliant with
regulatory and legal requirements and protect customers from harm. Policies
are continually developed to reflect changes to regulation, economic
conditions and lessons learned. Policies, standards and procedures are
designed to ensure that Board approved appetite is not exceeded, transactions
are consistently documented, and vulnerable customers are identified and
treated appropriately.
Credit risk and credit applications are sanctioned by appropriately skilled
bankers within the discretion matrix.
Emphasis is placed on maintaining a diverse and balanced portfolio, within
clearly defined industry sectors and security requirements. Credit risk is
monitored throughout the lifecycle of each facility and we use rating-based
models to assess the quality of the portfolio.
Significant increase in credit risk
The Group continuously monitors all assets subject to Expected Credit Loss as
to whether there has been a significant increase in credit risk since initial
recognition, either through a significant increase in Probability of Default
("PD") or in Loss Given Default ("LGD").
The short tenor of inventory finance loan facilities, which continue to
represent the vast majority of loans and advances to customers, reduce the
possible adverse effect of changes in economic conditions and/or the credit
risk profile of the counterparty.
The Group nonetheless measures a change in a counterparty's credit risk mainly
on payment performance and end of contract repayment behaviour. The regular
collateral audit process and interim reviews may highlight other changes in a
counterparty's risk profile, such as the security asset no longer being under
the control of the borrower.
Identifying loans and advances in default and credit impaired
The Group's definition of default for this purpose is:
§ A counterparty defaults on a payment due under a loan agreement and that
payment is more than 90 days overdue;
§ A counterparty commits an event of default under the terms and conditions of
the loan agreement which leads the lending company to believe that the
borrower's ability to meet its credit obligations to the lending company is in
doubt; or
§ The Group is made aware of a severe deterioration of the credit profile of the
customer which is likely to impede the customers' ability to satisfy future
payment obligations.
Maximum exposure to credit risk:
2025 2024
£'000 £'000
Loans and advances to banks 5,894 3,771
Derivative assets 411 295
Loans and advances to customers 839,526 660,772
Trade and other receivables 6,339 3,627
852,170 668,465
Collateral held as security:
2025 2024
£'000 £'000
Collateralised lending:
Loan-to-value* ratio:
Less than 50% 21,117 15,539
51% to 70% 82,754 78,738
71% to 80% 159,959 122,425
81% to 90% 123,373 122,672
91% to 100% 445,367 319,082
Hire purchase 15,232 4,539
Total collateralised lending 847,802 662,995
Unsecured lending 2,305 6,781
* Calculated using wholesale collateral values. Wholesale collateral values
represent the invoice total (including applicable VAT) from the invoice
received from the supplier of the product. The wholesale amount is less than
the recommended retail price (RRP) of the product.
The Group's lending activities are asset based so it expects that the majority
of its exposure is secured by the collateral value of the asset that has been
funded under the loan agreement. The Group has title to the collateral which
is funded under loan agreements. The collateral includes boats, motorcycles,
recreational vehicles, caravans, light commercial vehicles, industrial and
agricultural equipment. The collateral has low depreciation and is not subject
to rapid technological changes or redundancy. There has been no change in the
Group's assessment of collateral and its underlying value in the reporting
period.
The assets are generally in the counterparty's possession, but this is
controlled and managed by the asset audit process. The audit process checks
on a periodic basis that the asset is in the counterparty's possession and has
not been sold out of trust or is otherwise not in the counterparty's
control. The frequency of the audits is initially determined by the risk
rating assessed at the time that the borrowing facility is first approved and
is assessed on an ongoing basis.
Additional security may also be taken to further secure the counterparty's
obligations and further mitigate risk. Further to this, in many cases, the
Group is often granted, by the counterparty, an option to sell-back the
underlying collateral or re-distribute the asset within their underlying
network to prevent losses resulting from defaults.
Based on the Group's current principal products, the counterparty repays its
obligation under a loan agreement with the Group at or before the point that
it sells the asset. If the asset is not sold and the loan agreement reaches
maturity, the counterparty is required to pay the amount due under the loan
agreement plus any other amounts due. In the event that the counterparty does
not pay on the due date, the Group's customer management process will maintain
frequent contact with the counterparty to establish the reason for the delay
and agree a timescale for payment. Senior Management will review actions on a
regular basis to ensure that the Group's position is not being prejudiced by
delays.
In the event the Group determines that payment will not be made voluntarily,
it will enforce the terms of its loan agreement and recover the asset,
initiating legal proceedings for delivery, if necessary. If there is a
shortfall between the net sales proceeds from the sale of the asset and the
counterparty's obligations under the loan agreement, the shortfall is payable
by the counterparty on demand.
As at 31 December 2025, 99.7% of the loan portfolio was fully collateralised
(2024: 99.0%).
Concentration of credit risk
The Group maintains policies and procedures to manage concentrations of credit
at the counterparty level and industry level to achieve a diversified loan
portfolio.
The below table analyses gross carrying amount and impairment allowance by
counterparty industry sector:
31 December 2025 31 December 2024
£'000 Portfolio % £'000 Portfolio %
Inventory finance
Motorhome & Caravan 236,893 27.9% 207,948 31.0%
Transport 159,835 18.8% 93,314 13.9%
Marine 96,812 11.4% 72,120 10.8%
Automotive 50,750 6.0% 31,562 4.7%
Motorcycle 33,167 3.9% 35,264 5.3%
Lodges 75,228 8.8% 91,473 13.7%
Industrial 48,273 5.7% 33,128 4.9%
Agricultural 17,514 2.1% 24,720 3.7%
Other Serialised Assets 3,649 0.4% 3,764 0.6%
722,121 84.9% 593,293 88.6%
Structured Finance
Invoice Finance 11,133 1.3% 5,148 0.8%
Secured Business Loan 34,375 4.0% 13,531 2.0%
Wholesale Finance 67,246 7.9% 53,181 7.9%
112,754 13.3% 71,860 10.7%
Asset Finance 15,232 1.8% 4,623 0.7%
Total Gross Carrying Amount 850,107 100.0% 669,776 100.0%
£'000 ECL coverage % £'000 ECL coverage %
Inventory finance
Motorhome & Caravan (1,488) 0.6% (1,439) 0.7%
Transport (759) 0.5% (330) 0.4%
Marine (643) 0.7% (342) 0.5%
Automotive (1,289) 2.5% (912) 2.9%
Motorcycle (894) 2.7% (387) 1.1%
Lodges (1,732) 2.3% (944) 1.0%
Industrial (270) 0.6% (126) 0.4%
Agricultural (155) 0.9% (830) 3.4%
Other Serialised Assets (34) 0.9% (9) 0.2%
(7,264) 1.0% (5,319) 0.9%
Structured Finance
Invoice Finance (111) 1.0% (135) 2.6%
Secured Business Loan (258) 0.8% (131) 1.0%
Wholesale Finance (603) 0.9% (919) 1.7%
(972) 0.9% (1,185) 1.6%
Asset Finance (265) 1.7% (73) 1.6%
Total impairment allowance (8,501) 1.0% (6,577) 1.0%
Credit quality
The Risk Rating is an internal rating system of counterparty credit risk
whereby the Group will allocate a rating from 1 to 9, 1 being the highest
level of credit quality and 9 being the lowest level of credit quality. The
Group uses Experian Delphi scores to set Risk Ratings which in turn determine
the probability of default for each counterparty. In the majority of cases,
the Experian Delphi score will be used without management override
adjustments. However, where the Delphi score differs from the Group's
assessment of credit risk and/or where a Delphi score cannot be derived such
as in the case of sole traders or unincorporated partnerships, either a Delphi
score uplift or a Delphi score equivalent is utilised to calculate an internal
risk rating. The Risk Rating for each counterparty is reviewed on an ongoing
basis and recorded as at the reporting date.
An analysis of the Group's credit risk exposure for loan and advances to
customers, internal risk rating and "stage" is provided in the following
tables. A description of the meanings of stages 1, 2 and 3 was given in the
accounting policies set out above. See below table of gross loan receivables
by Risk Rating and IFRS 9 stage allocation:
Stage 1 Stage 2 Stage 3 Total
31 December 2025
£'000 Portfolio % £'000 Portfolio % £'000 Portfolio % £'000 Portfolio %
Gross carrying amount:
Above average (Risk rating 1-2) 514,559 60.5% - 0.0% - 0.0% 514,559 60.5%
Average (Risk rating 3-5) 244,556 28.8% 27,623 3.2% 737 0.1% 272,916 32.1%
Below average (Risk rating 6+) 26,614 3.1% 27,118 3.2% 8,900 1.0% 62,632 7.4%
Total gross carrying amount 785,729 92.4% 54,741 6.4% 9,637 1.1% 850,107 100.0%
£'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage %
Impairment allowance:
Above average (Risk rating 1-2) (1,768) 0.3% - 0.0% - 0.0% (1,768) 0.3%
Average (Risk rating 3-5) (2,034) 0.8% (175) 0.6% - 0.0% (2,209) 0.8%
Below average (Risk rating 6+) (566) 2.1% (536) 2.0% (3,422) 38.4% (4,524) 7.2%
Total impairment allowance (4,368) 0.6% (711) 1.3% (3,422) 35.5% (8,501) 1.0%
Stage 1 Stage 2 Stage 3 Total
31 December 2024
£'000 Portfolio % £'000 Portfolio % £'000 Portfolio % £'000 Portfolio %
Gross carrying amount:
Above average (Risk rating 1-2) 459,277 68.6% 13,996 2.1% 4,075 0.6% 477,348 71.3%
Average (Risk rating 3-5) 173,037 25.8% 2,092 0.3% 1,157 0.2% 176,286 26.3%
Below average (Risk rating 6+) 11,199 1.7% 2,396 0.4% 2,547 0.4% 16,142 2.4%
Total gross carrying amount 643,513 96.1% 18,484 2.8% 7,779 1.2% 669,776 100.0%
£'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage %
Impairment allowance:
Above average (Risk rating 1-2) (1,686) 0.4% (89) 0.6% (1,700) 41.7% (3,475) 0.7%
Average (Risk rating 3-5) (1,839) 1.1% (11) 0.5% (430) 37.1% (2,280) 1.3%
Below average (Risk rating 6+) (167) 1.5% (66) 2.8% (589) 23.1% (822) 5.1%
Total impairment allowance (3,692) 0.6% (166) 0.9% (2,719) 35.0% (6,577) 1.0%
See note 19 for analysis of the movements in gross loan receivables and
impairment allowances in terms of IFRS 9 staging.
Analysis of credit quality of trade receivables:
2025 2024
£'000 £'000
Status at balance sheet date:
Not past due, nor defaulted 5,780 3,125
Past due but not in default 390 58
Defaulted 255 133
Total gross carrying amount 6,425 3,316
Impairment allowance (556) (216)
Carrying amount 5,869 3,100
Financial guarantee schemes
As at 31 December 2025, the Group continues to utilise financial guarantee
schemes which allow the Group to reduce its regulatory capital requirements,
which includes an ENABLE guarantee scheme with the British Business Bank for a
maximum facility limit of £350m. The Group also holds a trade credit
insurance policy covering a portion of the Group's loan book exposure in the
case of default. The Group has considered the impact of the these financial
guarantee schemes on its expected credit losses which has been deemed to have
an immaterial net impact given the recourse criteria thresholds on the scheme.
Amounts written off
The contractual amount outstanding on financial assets that were written off
during the reporting period and are still subject to enforcement activity is
£nil at 31 December 2025 (31 December 2024: £nil).
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial
resources to meet its obligations as they fall due or will have to do so at an
excessive cost. This risk arises from mismatches in the timing of cash flows
which is inherent in all finance operations and can be affected by a range of
Group-specific and market-wide events.
Liquidity risk management
The Group has in place a policy and control framework for managing liquidity
risk. The Group's Asset and Liability Management Committee (ALCO) is
responsible for managing the liquidity risk via a combination of policy
formation, review and governance, analysis, stress testing, limit setting and
monitoring. The ALCO meets on a monthly basis to review the liquidity position
and risks.
The Bank has a comprehensive suite of liquidity management processes in place,
which allow the Bank to monitor liquidity risk on a daily basis. Daily
liquidity reporting is supplemented by Early Warning Indicators and a
Liquidity Contingency Plan.
Liquidity stress testing
Stress Testing is a key risk management tool for the Bank and is used to
inform the setting of risk appetite limits and required buffers.
A range of liquidity stress scenarios has been conducted (as detailed in the
Internal Liquidity Adequacy Assessment Process "ILAAP" document), which
demonstrates that the Group's liquidity profile is sufficient to withstand a
severe stress.
Maturity analysis for financial assets:
The following maturity analysis is based on expected gross cash flows:
Carrying amount Gross nominal inflow Less than 1 month 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2025 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cash and balances at central banks 131,676 131,676 131,676 - - - -
Loans and advances to banks 5,894 5,894 3,174 - - 150 2,570
Investment securities 5,722 5,722 5,722 - - - -
Derivative assets 411 411 - 1 80 330 -
Loans and advances to customers 839,526 847,546 186,728 202,406 335,156 120,559 2,697
Trade receivables 5,869 6,425 6,193 75 157 - -
Other receivables 470 470 426 27 17 - -
989,568 998,144 333,919 202,509 335,410 121,039 5,267
Carrying amount Gross nominal inflow Less than 1 month 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cash and balances at central banks 110,030 110,030 110,030 - - - -
Loans and advances to banks 3,771 3,771 1,951 - - 1,820
Investment securities 769 769 769 - - - -
Derivative assets 295 295 - - 141 154 -
Loans and advances to customers 660,772 666,484 120,052 169,333 293,082 83,417 600
Trade receivables 3,100 3,316 3,251 26 39 - -
Other receivables 528 528 188 22 217 1 100
779,265 785,193 236,241 169,381 293,479 85,392 700
Maturity analysis for financial liabilities:
The following maturity analysis is based on contractual gross cash flows:
Carrying amount Gross nominal outflow Less than 1 month 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2025 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Customer deposits 840,565 872,190 122,979 79,394 445,285 224,532 -
Derivative liabilities 819 819 71 117 504 49 78
Other financial liabilities 2,444 4,220 - 69 206 1,770 2,175
Subordinated liabilities 15,302 21,985 - 318 1,588 20,079 -
Trade payables 311 311 311 - - - -
Other payables 6,523 6,728 6,183 102 166 277 -
865,964 906,253 129,544 80,000 447,749 246,707 2,253
Loan commitments - 15,109 15,109 - - - -
Carrying amount Gross nominal outflow Less than 1 month 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Customer deposits 649,665 667,834 115,854 52,120 352,490 147,370 -
Derivative liabilities 6 6 - - 6 - -
Other financial liabilities 90 109 - 63 46 -
Subordinated liabilities 10,230 15,080 - 318 953 13,809 -
Trade payables 524 524 524 - - - -
Other payables 4,384 4,702 4,197 (72) 101 476 -
Preference shares - - - - - - -
664,899 688,255 120,575 52,429 353,596 161,655 -
Loan commitments - 5,972 5,972 - - - -
Market risk
Market risk is the risk that movements in market factors, such as foreign
exchange rates, interest rates, credit spreads, equity prices and commodity
prices will reduce the Group's income or the value of its assets.
The principal market risk to which the Group is exposed is interest rate risk.
Interest rate risk management
The Group is exposed to the risk of loss from fluctuations in the future cash
flows or fair values of financial instruments because of the change in market
interest rates.
The Group's borrowings are either fixed rate, or administered, (being products
where the rate is set at DFC's discretion). These borrowings fund loans and
advances to customers predominantly at fixed rate, with a small number linked
to base rate.
The shorter average duration of the loan and deposit book provide a natural
mitigant against interest rate risk. The Bank aims to naturally hedge interest
rate risk through raising funding of a similar profile of the loans being
funded. Where this is not possible, interest rate swaps are used to manage
repricing mismatches.
The Bank evaluates changes in the economic value of equity calculated under
the following six supervisory shock scenarios referred to in Rule 9.7 of the
ICAA Part of the PRA Rulebook as issued by the Prudential Regulation Authority
(PRA).
The impact of changes in interest rates has been assessed in terms of economic
value of equity (EVE) and profit or loss. Economic value of equity (EVE) is
a cash flow calculation that takes the present value of all asset cash flows
and subtracts the present value of all liability cash flows. This is a
long-term economic measure used to assess the degree of interest rate risk
exposure.
The estimate that a 200bps upward and downward movement in interest rates
would have impacted the economic value of equity (EVE) is as follows:
2025 2024
£'000 £'000
Change in interest rate (basis points):
Sensitivity of EVE +200bps 361 (186)
Sensitivity of EVE -200bps (485) 156
The estimate of the effect on the next 12 months net interest income using a
200bps upward and 200bps downward movement in interest rates is as follows:
2025 2024
£'000 £'000
Change in interest rate (basis points):
Sensitivity of profit +200bps 1,470 1,040
Sensitivity of profit -200bps (2,198) (2,233)
In preparing the sensitivity analyses above, the Group makes certain
assumptions consistent with the expected and contractual re-pricing behaviour
as well as behavioural repayment profiles under the two interest rate
scenarios.
38. Earnings per share
2025 2024
Earnings attributable to ordinary shareholders £'000 £'000
Profit after tax attributable to the shareholders 15,159 14,021
Weighted average number of shares, thousands(1)
Basic 169,876 179,369
Dilutive impact of share-based payment schemes 9,914 9,669
Diluted 179,790 189,038
Earnings per share, pence per share
Basic 8.9 7.8
Diluted 8.4 7.4
(1)Excluding average number of treasury shares held during the year (2024:
Nil)
39. Controlling party
As at 31 December 2025 there was no controlling party of the ultimate parent
company of the Group, Distribution Finance Capital Holdings plc.
40. Country by country reporting (CBCR)
CBCR was introduced through Article 89 of CRD IV, aimed at the banking and
capital markets industry. The name, nature of activities and geographic
location of the Group's companies are presented below:
Jurisdiction Country Name Activities
UK England Distribution Finance Capital Holdings plc Holding company
DF Capital Bank Limited Commercial lending and specialist personal savings
DF Capital Financial Solutions Limited Commercial lending
DF Capital Retail Finance Limited Retail lending
Other disclosures required by the CBCR directive are provided below:
UK totals 2025 2024
Average number of employees 155 136
Turnover, £'000 56,039 45,490
Profit before taxation, £'000 19,641 19,074
Taxation charge/(credit), £'000 4,482 5,053
The table below reconciles tax charged and tax paid during the year.
2025 2024
UK totals £'000 £'000
Taxation charge/(credit) 4,482 5,053
Effects of:
Deferred taxation asset recognition 895 -
Deferred taxation asset utilisation (3,380) (3,178)
Movement in current tax liability 1,299 (1,192)
Other timing differences - -
Taxation paid 3,296 683
All activities relating to the Group are conducted within the United Kingdom
and the Group is not subject to non-domestic taxation.
41. Related party disclosures
In the year ended 31 December 2025, Directors were awarded share-based
payments, refer to note 10 for further details.
Directors' emoluments are disclosed in note 9 of these consolidated financial
statements.
In the year ended 31 December 2025, there were no other related party
transactions.
42. Transactions with key management personnel
All related party transactions were made on terms equivalent to those that
prevail in arm's length transactions. During the year, there were no related
party transactions between the key management personnel and the Group other
than as described below.
The Directors and Senior Leadership team are considered to be key management
personnel. Directors' remuneration is disclosed in note 9 and in the
Directors' Remuneration Report on pages 82 to 87. The Senior Leadership team
are all employees of the Group. The aggregate remuneration of the key
management personnel (including Directors) is shown in the table below:
2025 2024
£'000 £'000
Short-term employment benefits 5,665 5,072
Share-based payments - -
Total key management personnel remuneration 5,665 5,072
Key management personnel held deposits with the Group of £154,000 (2024:
£256,000).
43. Subsequent events
There have been no subsequent events between 31 December 2025 and the date of
this report which would have a material impact on the financial position of
the Group.
The Company Statement of Financial Position
2025 2024
Note £'000 £'000
Assets
Loans and advances to banks 5 215 132
Trade and other receivables 7 61 106
Deferred tax asset 14 532 -
Amounts receivable from Group Undertakings 872 443
Investment in subsidiaries 8 137,005 136,225
Total assets 138,685 136,906
Liabilities
Trade and other payables 10 1,561 1,027
Amounts payable to Group Undertakings 9 14,518 8,270
Total liabilities 16,079 9,297
Equity
Issued share capital 11 1,793 1,793
Merger relief 11 94,911 94,911
Retained earnings 31,205 31,345
Treasury shares (4,755) -
Own shares 12 (548) (440)
Total equity 122,606 127,609
Total equity and liabilities 138,685 136,906
The notes on pages 181 to 187 are an integral part of these financial
statements.
Distribution Finance Capital Holdings plc recorded loss after taxation for the
year ended 31 December 2025 of £1,450,000 (2024: loss of £1,535,000). These
financial results are derived entirely from continuing operations.
These financial statements were approved by the Board of Directors and
authorised for issue on 20 March 2026. They were signed on its behalf by:
……………………………
Carl D'Ammassa
Director
20 March 2026
Registered number: 11911574
The Company Cash Flow Statement
2025 2024
Note £'000 £'000
Cash flows from operating activities:
Loss before taxation (2,266) (1,892)
Adjustments for non-cash items and other adjustments included in the income 6 (1,697) (1,175)
statement
Decrease in operating assets 46 1
Increase in operating liabilities 534 192
Taxation paid - -
Net cash used in operating activities (3,383) (2,874)
Cash flows from investing activities:
Net cash used in investing activities - -
Cash flows from financing activities:
Proceeds from intercompany loan 8,419 3,067
Purchase of own shares 12 (192) (142)
Purchase of treasury shares 11 (4,877) -
Receipt of cash from settlement of share options 116 -
Net cash generated from financing activities 3,466 2,925
Net decrease in cash and cash equivalents 83 51
Cash and cash equivalents at start of the year 6 132 81
Cash and cash equivalents at end of the year 6 215 132
The Company Statement of Changes in Equity
Issued share capital Merger relief Own shares(2) Treasury shares(3) Retained earnings/(loss) Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 1,793 94,911 (401) - 31,997 128,300
(Loss) after taxation - - - - (1,535) (1,535)
Share-based payments(1) - - - - 985 985
Employee Benefit Trust(2) - - (39) - (102) (141)
Balance at 31 December 2024 1,793 94,911 (440) - 31,345 127,609
(Loss) after taxation - - - - (1,450) (1,450)
Share-based payments(1) - - - - 1,254 1,254
Employee Benefit Trust(2) - - (108) - (84) (192)
Share buy back - - - (4,877) - (4,877)
Settlement of share options(4) - - - 122 (6) 116
Deferred tax on share-based payments(5) - - - - 146 146
Balance at 31 December 2025 1,793 94,911 (548) (4,755) 31,205 122,606
(1)Refer to note 10 of the consolidated financial statements for further
details of movements in the year.
(2)The Company has adopted look-through accounting (see note 1.3 to the
Group's consolidated financial statements) and recognised the Employee Benefit
Trusts within the Company. Refer to note 11 for further details on movements
in the year.
(3)During the year, the Company repurchased 12,966,866 shares at a total cost
of £4,876,862 inclusive of commission. These treasury shares do not carry
voting rights or rights to dividends while held by the Company.
(4) During the year, the Company used treasury shares to settle the vesting of
a share option scheme.
( 5)During the year, the Company recognised a deferred tax asset of £532,000
in respect of share-based payments, of which £146,000 has been recognised
directly in retained earnings.
Notes to the Company Financial Statements
1. Basis of preparation
1.1 Accounting basis
These standalone financial statements for Distribution Finance Capital
Holdings plc (the "Company") have been prepared and approved by the Directors
in accordance with International Financial Reporting Standards ("IFRSs") as
adopted by the United Kingdom (UK) and interpretations issued by the IFRS
Interpretations Committee (IFRS IC).
1.2 Going concern
As detailed in note 1 to the consolidated financial statements, the Directors
have performed an assessment of the appropriateness of the going concern
basis. The Directors consider that it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
1.3 Income statement
Under Section 408 of the Companies Act 2006 the Company is exempt from the
requirement to present its own income statement.
2. Summary of material accounting policies
These financial statements have been prepared using the material accounting
policies as set out in note 2 to the consolidated financial statements. Any
further accounting policies provided below are solely applicable to the
Company financial statements.
2.1 Investment in subsidiaries
In accordance with IAS 27 Separate Financial Statements the Company has
elected to account for an investment in subsidiary at cost. The Company
performs an impairment assessment on the investment in subsidiary at each
reporting date to assess whether the cost basis reflects an accurate value of
the investment at the reporting date.
3. Critical accounting judgements and key sources of estimation uncertainty
In the financial statements for the year ended 31 December 2025, the Company
has not made any critical accounting judgements and key sources of estimation
which are considered to be material in value or significance to the
performance of the Company.
4. Net loss attributable to equity shareholders of the Company
2025 2024
£'000 £'000
Net loss attributable to equity shareholder of the Company (1,450) (1,535)
5. Loans and advances to banks
2025 2024
£'000 £'000
Included in cash and cash equivalents: balances with 215 132
less than three months to maturity at inception
Total loans and advances to banks 215 132
6. Notes to the cash flow statement
See below for reconciliation of balances classified as cash and cash
equivalents, which are recognised within the cash flow statement:
2025 2024
£'000 £'000
Loans and advances to banks 215 132
Total cash and cash equivalents 215 132
Adjustments for non-cash items and other adjustments included in the income
statement:
2025 2024
£'000 £'000
Management fee recharge (2,171) (1,540)
Movement in other provisions - -
Share-based payments 474 365
Total non-cash items and other adjustments (1,697) (1,175)
There is a management service agreement ("MSA") between the Company and DF
Capital Bank Limited ("the Bank") whereby the Company recognise an
intercompany loan receivable from the Bank for a proportion of Director costs.
In addition, the Company recognises an intercompany loan payable to the Bank
in respect of cash transferred given the Company does not generate external
income. These balances are offset on the face of the balance sheet, however
from a cash flow perspective, the MSA is not settled. This drives a difference
between proceeds from intercompany loan in the cash flow statement and the
movement in the intercompany loan payable in the balance sheet.
Changes in liabilities arising from financing activities:
Please see note 9 for changes in the Company's liabilities arising from
financing activities, including both cash and non-cash changes, for the years
ended 31 December 2025 and 31 December 2024.
7. Trade and other receivables
2025 2024
£'000 £'000
Indirect taxes 27 55
Prepayments 34 51
Total trade and other receivables 61 106
8. Investment in subsidiaries
£'000
Balance at 1 January 2024 135,604
Capital contribution - parent equity-settled share-based payments 621
Balance at 31 December 2024 136,225
Capital contribution - parent equity-settled share-based payments 780
Balance at 31 December 2025 137,005
For the year ended 31 December 2025, the Company conducted an impairment
assessment of the investment in ubsidiaries and concluded that there is no
impairment required (2024: £nil).
9. Amounts payable to Group undertakings
2025 2024
£'000 £'000
Amounts payable to DF Capital Bank Limited 14,518 8,270
Total amounts payable to Group undertakings 14,518 8,270
All amounts drawn and outstanding under the intercompany loan facility,
including all accrued interest and costs, are payable on demand by the lender
DF Capital Bank Limited. Interest on the loan shall accrue daily and is
charged at 1.5% over the Sterling Overnight Indexed Average (SONIA) rate at
the end of each calendar month. This contractual agreement has an expiry date
of 31 December 2027.
10. Trade and other payables
2025 2024
£'000 £'000
Trade payables - 194
Accruals 1,249 678
Social security taxes 312 155
Total trade and other payables 1,561 1,027
11. Share capital
2025 2024 2025 2024
No. No. £'000 £'000
Authorised:
Ordinary shares of 1p each 179,369,199 179,369,199 1,793 1,793
Allotted, issued and fully paid: Ordinary shares of 1p each 179,369,199 179,369,199 1,793 1,793
Included in the ordinary shares above are 12,642,866 shares repurchased by the Company. In the year ended 31 December 2025, the Company repurchased 12,966,866 ordinary shares at a total cost of £4,876,862 inclusive of commission. 324,000 of these treasury shares were used to settle the vesting of share option schemes during the year. These treasury shares do not carry voting rights or rights to dividends while held by the Company.
No. of shares Share Capital Merger Relief Total
# £'000 £'000 £'000
At 1 January 2024 179,369,199 1,793 94,911 96,704
No transactions in the year - - - -
At 31 December 2024 179,369,199 1,793 94,911 96,704
No transactions in the year - - - -
At 31 December 2025 179,369,199 1,793 94,911 96,704
12. Own shares
£'000
Balance at 1 January 2024 (401)
Acquisition of shares (142)
Settlement of employee share awards 103
Balance at 31 December 2024 (440)
Acquisition of shares (192)
Settlement of employee share awards 84
Balance at 31 December 2025 (548)
13. Financial instruments
The Group monitors and manages risk management at a group-level and,
therefore, the Risk Management Framework stipulated in note 37 of the
consolidated financial statements encompasses the Company risk management
environment.
The Company and Directors believe the principal risks of the Company to be
credit risk, liquidity risk and capital risk. The Directors have evaluated the
following risks to either not be relevant to the Company or of immaterial
significance: market risk, interest rate risk and exchange rate risk.
The regulatory capital requirements in respect of capital risk are assessed at
both a consolidated group level and for DF Capital Bank Limited at an entity
level.
See note 37 of the consolidated financial statements for further details on
how the Company defines and manages credit risk, liquidity risk and capital
risk.
Financial assets and financial liabilities included in the statement of
financial position that are not measured at fair value:
Fair value Level 1 Level 2 Level 3
Carrying amount
31 December 2025 £'000 £'000 £'000 £'000 £'000
Financial assets not
measured at fair value:
Loans and advances to banks 215 215 215 - -
Other receivables 27 27 - - 27
Amounts receivable from Group Undertakings 872 872 - - 872
1,114 1,114 215 - 899
31 December 2025
Financial liabilities not
measured at fair value:
Trade payables - - - - -
Other payables 312 312 - - 312
Amounts payable to Group Undertakings 14,518 14,518 - - 14,518
14,830 14,830 - - 14,830
Fair value Level 1 Level 2 Level 3
Carrying amount
31 December 2024 £'000 £'000 £'000 £'000 £'000
Financial assets not
measured at fair value:
Loans and advances to banks 132 132 132 - -
Other receivables 55 55 - - 55
Amounts receivable from Group Undertakings 443 443 - - 443
630 630 132 - 498
31 December 2024
Financial liabilities not
measured at fair value:
Trade payables 194 194 - - 194
Other payables 155 155 - - 155
Preference shares - - - - -
Amounts payable to Group Undertakings 8,270 8,270 - - 8,270
8,619 8,619 - - 8,619
Maximum exposure to credit risk:
2025 2024
£'000 £'000
Loans and advances to banks 215 132
Trade and other receivables 27 55
Amounts receivable from Group Undertakings 872 443
1,114 630
Maturity analysis for financial assets
The following maturity analysis is based on expected gross cash flows:
Carrying amount Gross nominal inflow Less than 1 months 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2025 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loans and advances to banks 215 215 215 - - - -
Other receivables 27 27 27 - - - -
Amounts receivable from Group Undertakings 872 872 - - 872 - -
1,114 1,114 242 - 872 - -
Carrying amount Gross nominal inflow Less than 1 months 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loans and advances to banks 132 132 132 - - - -
Other receivables 55 55 55 - - - -
Amounts receivable from Group Undertakings 443 443 - - 443 - -
630 630 187 - 443 - -
Maturity analysis for financial liabilities
The following maturity analysis is based on contractual gross cash flows:
Carrying amount Gross nominal outflow Less than 1 months 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2025 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Trade payables - - - - - - -
Other payables 312 401 128 - 147 126 -
Amounts payable to Group Undertakings 14,518 14,518 - - - 14,518 -
14,830 14,919 128 - 147 14,644 -
Carrying amount Gross nominal outflow Less than 1 months 1 - 3 months 3 months to 1 year 1 - 5 years >5 years
31 December 2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Trade payables 194 194 194 - - - -
Other payables 155 265 59 - 33 173 -
Preference shares - - - - - - -
Amounts payable to Group Undertakings 8,270 8,270 - - 8,270 - -
8,619 8,729 253 - 8,303 173 -
14. Deferred taxation asset
Deferred tax assets and liabilities are recognised on temporary differences
between the carrying amounts of assets and liabilities in the balance sheet
and the amounts attributed to such assets and liabilities for tax purposes.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent it is
probable that future taxable profits will be available against which
deductible temporary differences can be utilised. Deferred tax is determined
using tax rates and legislation in force at the balance sheet date and is
expected to apply when the deferred tax asset is realised, or the deferred tax
liability is settled.
The table below shows the movement in net deferred tax assets:
2025 2024
£'000 £'000
At 1 January - -
Charge to profit and loss account 132 -
Deferred tax directly included in equity 145 -
Adjustments in respect of prior years 255 -
At 31 December 532 -
The Group has recognised a deferred tax asset in 2025 of £0.5m in respect of
share-based payments
15. Subsequent events
There have been no subsequent events between 31 December 2025 and the date of
this report which would have a material impact on the financial position of
the Group.
Appendix - Alternative Performance Measures
Certain financial measures disclosed in this Annual Report do not have a
standardised meaning prescribed by International Financial Reporting Standards
(IFRS) and may therefore not be comparable to similar measures presented by
other issuers. These measures (defined below) are deemed to be alternative
performance measures ("APMs").
APMs may be considered in addition to, but not as a substitute for, the
reported IFRS results. The Group believes that these APMs, when considered
together with reported IFRS results, provide stakeholders with additional
information to better understand the Group's financial performance. In current
period, the Group has included TNAV per share and Adjusted return on tangible
equity as additional APMs to provide more relevant and reliable information to
stakeholders. These APMs are summarised below, all other APMs are presented
consistently with prior years.
Adjusted profit before tax (£m)
2025 2024
Profit before tax 19.6 19.1
Less: impact of VAT recovery in 2025 (1.5) -
Less: impact of RoyaleLife write back in 2024 - (4.7)
Adjusted profit before tax 18.1 14.4
This adjusted profit before tax figure deducts a one-off VAT recovery in 2025
relating to prior periods and reallocates the 2024 write back on RoyaleLife.
Adjusted cost of risk (%)
2025 2024
Impairment charges (£m) (4.3) 0.2
Less: impact of Royalelife write back in 2024 (£m) - (4.7)
Adjusted impairment charge (£m) (4.3) (4.5)
Average gross receivables (£m) 720.0 595.0
Adjusted cost of risk (%) 0.59% 0.75%
Impairments charges in the year as a % of average gross receivables
reallocating the 2024 write back on RoyaleLife.
Adjusted based earnings per share (pence)
2025 2024
Profit after tax (£m) 15.2 14.0
Less: impact of VAT recovery in 2025 (£m) (1.1) -
Less: impact of RoyaleLife write back in 2024 (£m) - (3.5)
Adjusted profit after tax (£m) 14.1 10.5
Weighted average number of ordinary shares outstanding ('000) 169,876 179,369
Adjusted basic earnings per share (pence) 8.3 5.9
Profit after tax adjusted for a one-off VAT recovery in 2025 relating to prior
periods and reallocates the 2024 write back on RoyaleLife divided by the
weighted average number of shares in issue during the year.
Adjusted return on tangible equity (%)
2025 2024
Profit after tax (£m) 15.2 14.0
Less: impact of VAT recovery in 2025 (£m) (1.1) -
Less: impact of RoyaleLife write back in 2024 (£m) - (3.5)
Adjusted profit after tax (£m) 14.1 10.5
Average tangible equity (£m) 118.6 106.7
Adjusted return on tangible equity (%) 11.9% 9.9%
Profit after tax adjusted for a one-off VAT recovery in 2025 relating to prior
periods and reallocates the 2024 write back on RoyaleLife divided by average
tangible equity.
Gross revenues (£m)
2025 2024
Interest and similar income 90.7 76.8
Fee income 1.6 1.2
Fee expenses (1.6) (1.6)
Net (losses)/gains from derivatives and other financial instruments at fair (0.8) 0.4
value through profit or loss
Other income 0.0 0.0
Foreign currency gain/(loss) 0.9 (0.1)
Total gross revenues 90.9 76.7
Sum of interest and similar income, fee income and expenses, other operating
income and net gains/ (losses) from derivatives and foreign currency
movements.
Net interest margin (%)
2025 2024
Total operating income (£m) 56.0 45.5
Add back: Fee expenses (£m) 1.6 1.6
Adjusted total operating income (£m) 57.6 47.1
Average gross receivables (£m) 720.0 595.0
Net interest margin (%) 8.0% 7.9%
Total operating income adding back fee expense, as a % of gross receivables at
the year end.
Tangible net asset value per share
2025 2024
Total assets (£m) 999.8 786.5
Total liabilities (£m) (872.5) (671.2)
Net assets (£m) 127.2 115.4
Less: Intangible assets (0.7) (1.0)
Net assets less intangible assets (£m) 126.5 114.4
Period end number of shares in issue 179,369 179,369
Less: treasury shares ('000) (12,643) -
Adjusted period number of ordinary shares outstanding excluding treasury 166,726 179,369
shares ('000)
Adjusted tangible net asset value per share 75.9 63.8
Net assets less intangible assets divided by the number of shares in issue at
the period end.
Impairment loss coverage on loans to customers (%)
2025 2024
Impairment allowance on loans and advances to customers (£m) 8.5 6.6
Gross carrying amount of loans and advances to customers (£m) 850.1 669.8
Impairment coverage on loans to customers (%) 1.00% 0.98%
Impairment allowance as a % of gross carrying amount of loans and advances to
customers at the year end.
Regulatory capital (£m)
2025 2024
Common Equity Tier 1 capital 112.4 98.8
Tier 2 capital 15.3 10.2
Regulatory capital 127.7 109.0
Regulatory capital is the Common Equity Tier 1 capital together with Tier 2
capital.
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