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REG - Secure Trust BankPLC - Interim Results to 30 June 2025

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RNS Number : 2529V  Secure Trust Bank PLC  14 August 2025

 

PRESS RELEASE

14 August 2025

LEI: 213800CXIBLC2TMIGI76

 

 

SECURE TRUST BANK PLC

Interim Results for the six months to 30 June 2025

Significant increase in profits with tangible book value per share up to
£19.37

Secure Trust Bank PLC ('STB', 'Secure Trust Bank', or the 'Group'), a leading
specialist bank, announces its interim results to 30 June 2025, which reflects
strong double digit percentage increases in both reported and adjusted(1)
pre-tax profits, on the back of solid net revenue growth and material
improvement in cost income ratio.

David McCreadie, Chief Executive Officer, said:

"Secure Trust Bank has made continued progress towards delivering sustainable
higher returns. The business delivered a 36.3% increase in adjusted(1) profit
before tax to £23.3 million as a result of strong income growth and
effective cost management. We are on track to deliver £8 million(2) of
annualised cost savings by the end of 2025. We recently announced a strategic
pivot away from Vehicle Finance which will enable further allocation of
capital to our higher-performing specialist lending businesses. This decision,
alongside a strategic refresh which will be detailed at a capital markets
event in Q4 2025, will position the Group to deliver sustainable attractive
returns.

As previously announced, I will be retiring as the Group's CEO. During my
tenure, we have delivered a radical transformation of the Group to position it
for future growth. I wish my successor, Ian Corfield, every success in the
role."

Financial highlights
 •    Adjusted(1) profit before tax increased 36.3% to £23.3 million (30 June 2024:
      £17.1 million)
 •    Loan book growth of 6.1% to £3.8 billion (31 December 2024: £3.6 billion)
 •    Statutory profit before tax increased by 30.4% to £22.3 million (30 June
      2024: £17.1 million)
 •    Net Interest Margin ('NIM') improved by 0.1pp to 5.4% (30 June 2024: 5.3%)
 •    Adjusted(1) cost income ratio improved by 460 bps to 49.1% (30 June 2024:
      53.7%)
 •    Adjusted(1) return on average equity ('ROAE') increased to 9.6% (30 June 2024:
      7.3%)
 •    Tangible book value per share increased 3.9% to £19.37 per share (31 December
      2024: £18.64)
 •    Increased interim dividend of 11.8 pence per share (30 June 2024: 11.3 pence),
      in line with progressive dividend policy

The Group achieved 6.1% net lending growth in the six months to 30 June 2025,
to £3.8 billion, driven by growth in the Retail Finance and Business Finance
portfolios. Net Interest Margin ('NIM') improved to 5.4% (30 June 2024: 5.3%),
due to lower cost of funds in the first half of the year and improved margins
in Retail Finance. Project Fusion, the Group's cost optimisation programme,
and tight cost control, contributed to an improved adjusted(1) cost income
ratio of 49.1% (30 June 2024: 53.7%).

Cost of risk remained elevated but stable at 1.7% (30 June 2024: 1.7%). This
is driven by improving Vehicle Finance cost of risk, offset by a small number
of legacy cases impacting Business Finance, and a normalisation of impairment
charges in Retail Finance due to non-recurring model enhancement benefits in
2024 and an increase in IFRS 9 stage 1-2 rolls.

A combination of growth in net lending balances and disciplined cost
management under Project Fusion has led to an increase in adjusted(1) ROAE of
9.6% (30 June 2024: 7.3%) while maintaining strong capital ratios. Customer
deposits reached a record level of £3.5 billion (31 December 2024: £3.2
billion) in the first half of the year, supporting the early repayment of Term
Funding Scheme with additional incentives for SMEs ('TFSME') balances ahead of
maturity.

In July 2025, Secure Trust Bank announced a strategic pivot away from Vehicle
Finance, to further improve ROAE over time. This means the Group has stopped
new lending in Consumer Vehicle Finance and Stock Funding businesses and put
the existing portfolios into run-off.

Details of our refreshed Strategic Plan, and updated medium term ambitions,
including the opportunities identified to enhance the Group's ROAE further,
will be announced at a capital markets event to be held in Q4 2025.

 

 
Financial summary
                                                    Six months to  Six months to  Change

30 June
30 June

2025
2024
 Total statutory profit before tax                  £22.3m         £17.1m         30.4%
 Adjusted(1) profit before tax                      £23.3m         £17.1m         36.3%
 Adjusted(1) profit before tax and pre impairments  £54.2m         £45.2m         19.9%
 Basic earnings per share                           87.6 pence     67.2 pence     30.4%
 Interim dividend per share                         11.8 pence     11.3 pence     4.4%

 Adjusted(1) return on average equity               9.6%           7.3%           2.3pp
 Total return on average equity                     9.2%           7.3%           1.9pp
 Net interest margin                                5.4%           5.3%           0.1pp
 Cost of risk                                       1.7%           1.7%           -
 Adjusted(1) cost income ratio                      49.1%          53.7%          (4.6)pp
 Statutory cost income ratio                        50.0%          53.7%          (3.7)pp
                                                    30 June        31 December    Change(

2025
2024

                                                                                  )
 Net lending balances                               £3,828.8m      £3,608.5m      6.1%
 Customer deposits                                  £3,510.1m      £3,244.9m      8.2%
 Tangible book value per share                      £19.37          £18.64        3.9%
 Common Equity Tier 1 ('CET 1') ratio               12.6%          12.3%          0.3pp
 Total capital ratio                                14.8%          14.6%          0.2pp

Optimising for growth: Execution against strategic priorities

The Group underpins delivery against medium-term targets with the strategic
priorities of Simplify, Enhance Customer Experience and Leverage Networks. Key
points of focus throughout the year and looking forward include:

 •    Strategic decision to stop new lending in Vehicle Finance.
 •    On track to make annualised cost savings of £8 million(2) by the end of the
      year through our cost optimisation programme Project Fusion.
 •    Customers continue to increase use of digital platforms, with over 98% of
      Savings customers registered with online banking and our AppToPay
      registrations reaching 250,000 customers in just 6 months.
 •    Retail Finance works with over 1,000 partners and in the first half of the
      year supported a £1.4 billion net lending balance (30 June 2024: £1.3
      billion).
 •    For the second time in three years, our Commercial Finance team were the
      winners of the Asset-Based Lender of the Year at the Real Deals Private Equity
      Awards 2025.
 •    In Real Estate Finance, we have leveraged our existing client base showing the
      power of our robust relationship model, with new lending to existing clients
      in the first half of 2025 at 59% of new business.

Other highlights

 •    Awarded Exceptional Service badge by Feefo for excellence in key customer
      review areas; customer satisfaction maintains its high standard, as measured
      by Feefo, 4.6 stars (30 June 2024: 4.7 stars).
 •    Great Place to Work®, once again ranked us as one of the UK's Best
      Workplaces™, in the large organisations category. Further accolades have
      also included being ranked for Best Workplace for Development™ and Best
      Workplace for Women™.

Regulatory and legal developments

On 1 August 2025, the Supreme Court gave its judgment on the historical use of
commission arrangements in the motor finance industry. The Supreme Court ruled
that, in two cases, the relationship between motor dealer and the customer was
not of a fiduciary nature and the payment of a commission to a motor dealer
was not a bribe. However, the Supreme Court upheld that, in the case of
Johnson v FirstRand, the relationship was unfair to Mr. Johnson in the
specific circumstances of the case. Overall the judgment was positive for the
motor finance industry.

The FCA has announced it will consult with the industry on a compensation
scheme for motor finance customers who have been treated unfairly, with the
consultation to launch by early October 2025, and for it to be open for six
weeks. There remains continued uncertainty as to the eventual cost for
impacted firms. As a result, the Group has retained its remaining provision
for potential redress and operational costs.

Dividend

The Board has approved an increased interim dividend of 11.8 pence per share,
consistent with our progressive dividend policy. This will be paid on 25
September 2025 with an associated record date of 29 August 2025.

CEO Transition

On 17 June 2025 we announced the appointment of Ian Corfield as CEO Designate
effective 23 June 2025, and (subject to regulatory approvals) as CEO effective
16 August 2025. In that announcement we stated that, to achieve a smooth
transition of responsibilities, David McCreadie will remain available to
support the business until June 2026. The leadership transition has progressed
well, however the requisite regulatory approvals are pending.  David
McCreadie will continue to undertake the senior management responsibilities of
the role and remain on the Board until this regulatory approval process is
completed. We will provide a further update as and when required.

Outlook

Interest rates are not expected to fall further in 2025 with further cuts
expected in 2026. Despite anticipated tightening of fiscal policy and
political and economic global uncertainty, the Group remains confident in its
ability to deliver against its ROAE target in the near-term, continue to grow
income and deliver on cost efficiencies. The Group looks forward to updating
on its strategic plans in Q4 2025.

 

 Medium-term targets                   30 June 2025  Target

 Actual
 Net lending balance                   £3.8bn        £4bn
 Net interest margin                   5.4%          >5.5%
 Adjusted(1) cost income ratio         49.1%         44-46%
 Adjusted(1) return on average equity  9.6%          14% - 16%
 CET 1 ratio                           12.6%         >12.0%

Footnotes

 1  Adjusted metrics exclude exceptional items of £1.0 million (30 June 2024:
    £nil, 31 December 2024: £9.9 million). Details can be found in Note 5 to the
    Financial Statements
 2  £5.0 million cost savings relative to operating expenses for the 12 months
    ended December 2021. The additional £3.0 million savings (of the £8.0
    million) will be relative to annualised operating expenses for the six months
    ending 30 June 2024.

 

Results presentation

This announcement together with the associated investors' presentation are
available on:
www.securetrustbank.com/results-reports/results-reports-presentations
(http://www.securetrustbank.com/results-reports/results-reports-presentations)

Secure Trust Bank will host a webcast for analysts and investors today, 14
August 2025 at 10.00am, which can be accessed by registering at:
https://brrmedia.news/STB HY 25
(https://stream.brrmedia.co.uk/broadcast/68542f94a170c500134ab750)

For those wishing to ask a question, please dial into the event by conference
call:

 

Dial +44 (0)330 551 0200

UK Toll Free: 0808 109 0700

Confirmation code (if prompted): STB Half Year

Enquiries:
Secure Trust Bank PLC

David McCreadie, Chief Executive Officer

Rachel Lawrence, Chief Financial Officer

Phil Deakin, Strategy and Corporate Development Director

Tel: +44 (0) 7385 950427

Investec Bank plc (Joint Broker)

Christopher Baird, David Anderson, Maria Gomez de Olea

Tel: +44 (0) 20 7597 5970

Shore Capital Stockbrokers (Joint Broker)

Mark Percy / Sophie Collins (Corporate Advisory)

Guy Wiehahn (Corporate Broking)

Tel: +44 (0) 20 7408 4090

Camarco

Geoffrey Pelham-Lane, Amrith Uppuluri

securetrustbank@camarco.co.uk (mailto:securetrustbank@camarco.co.uk)

 Tel: +44 (0) 7733 124 226, +44 (0) 7763 083 058

Forward looking statements

This announcement contains forward looking statements about the business,
strategy and plans of STB and its current objectives, targets and expectations
relating to its future financial condition and performance. Statements that
are not historical facts, including statements about STB's or management's
beliefs and expectations, are forward looking statements. By their nature,
forward looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. STB's actual
future results may differ materially from the results expressed or implied in
these forward looking statements as a result of a variety of factors. These
include economic and business conditions, risks from failure of clients,
customers and counterparties, market related risks including interest rate
risk, risks regarding market conditions outside STB's control, expected credit
losses in certain scenarios involving forward looking data, operational
risks, legal, regulatory, or governmental developments, and other factors.
The forward looking statements contained in this announcement are made as of
the date of this announcement, and (except as required by law or regulation)
STB undertakes no obligation to update any of its forward looking statements.

About us
Our vision
To be the most trusted specialist lender in the UK
Purpose
To help more consumers and businesses fulfil their ambitions
Our strategic priorities
 Simplify                                                                    Enhance Customer Experience                                                    Leverage Networks

 Focus on core business units and use technology to deliver efficiency and   Improve the customer journey to increase retention and attract new customers   Take advantage of our strong partnerships with introducers to drive growth
 better operational processes                                                to gain market share
 Enabled by technology

 Take advantage of recent investments within our technology platforms to
 automate processes and streamline and enhance customer experience for our
 business partners via integration, and for our end customers, through
 self-service

 
Strengths
 Specialist  Expert  Diverse  Ambitious

Values
 Customer Focused  Risk Aware  Future Orientated  Teamwork  Ownership  Performance

Driven

 

Stakeholders
 Customers  Shareholders and Investors  Employees  Business Partners  Regulators  Community and Society

Chief Executive's statement

"On track to deliver enhanced returns"

I am delighted with the continued progress we have made towards delivering
sustainable, higher returns for the Group. We remain confident in achieving
our existing targets in the near term and recently announced a strategic pivot
away from Vehicle Finance which creates the foundations for delivering
enhanced returns in our Core businesses.

The team has continued to execute effectively and made further progress
towards delivering our £4 billion net lending ambition. As a result, we
achieved strong income growth of 10.6% and continued to manage costs
effectively through embedded cost discipline and through Project Fusion, our
cost optimisation programme. The changes from the strategic refresh we will be
implementing, will underpin the next wave of the Group's ambitions, and put us
in a strong position to continue delivering further progress in the second
half of the year and beyond.

Strategic pivot

In July 2025, we announced a strategic pivot away from Vehicle Finance, to
further improve return on average equity ('ROAE') over time. The decision
reflects the historical financial performance and medium-term outlook of the
Vehicle Finance business, both on an absolute basis and relative to other
parts of the Group, and its sub-scale nature. We have stopped new lending in
our Consumer Vehicle Finance and Stock Funding businesses and put the existing
portfolios into run-off.

As a result, 284 colleagues have been placed at risk of redundancy, and we are
consulting with those impacted. Thereafter, impacted headcount will reduce in
line with the run-off profile of the Vehicle Finance portfolios. This
difficult decision was not taken lightly but is an important step to promote
the success of the Group. It will enable us to increase capital allocation to
our three higher returning businesses of Retail Finance, Real Estate Finance
and Commercial Finance where we see further opportunities to develop and grow.

We will announce details of our refreshed strategic plan and new medium-term
ambitions, including the opportunities identified to enhance the Group's ROAE
further, at a capital markets event to be held in Q4 2025.

Financial results

We have delivered a statutory profit before tax of £22.3 million (30 June
2024: £17.1 million); on an adjusted(1) basis we delivered £23.3 million (30
June 2024: £17.1 million). This improvement was driven by growth in our net
interest income, in line with balance sheet growth, and maintaining broadly
flat operating costs, despite the increase in our lending balances. Cost of
risk on the lending book remained stable in the first half of the year and
impairment charges increased in line with lending growth, reaching £30.9
million (30 June 2024: £28.2 million). Excluding impairment charges,
adjusted(1) profit before tax pre impairments grew by 19.9% to £54.2 million
(30 June 2024: £45.2 million).

We have chosen to concentrate our investment in markets where we continue to
see excellent growth potential. This is demonstrated by gains in Retail
Finance's market share of new business, which grew to 17.3%(2). Consumer
Finance has seen net lending growth of £76.8 million since 31 December 2024.
Business Finance has seen net lending growth of £143.5 million over the same
period.

The Board has approved an increased interim dividend of 11.8 pence per share
(30 June 2024: 11.3 pence), in line with our progressive dividend policy.

Financial and non-financial Key Performance Indicators ('KPIs')

                                               Target            30 June           30 June           31 December

2025
2024
2024
 Medium-term targets
 Financial KPIs
 Loans and advances to customers (£ billion)   4.0               3.8               3.4               3.6
 Why we measure this: Shows the growth in the Group's lending balances, which
 generate income
 Net interest margin (%)                       >5.5              5.4               5.3               5.4
 Why we measure this: Shows the interest margin earned on the Group's lending
 balances, net of funding costs
 Adjusted(1) cost income ratio (%)             44-46             49.1              53.7              50.9
 Why we measure this: Measures how efficiently the Group utilises its cost
 base, excluding exceptional items1 to produce income
 Adjusted(1) return on average equity (%)      14-16             9.6               7.3               8.0
 Why we measure this: Measures the Group's ability to generate profit from the
 equity available to it, excluding exceptional items1
 Common Equity Tier 1 ('CET 1') ratio (%)      >12.0             12.6              12.7              12.3
 Why we measure this: The CET 1 ratio demonstrates the Group's capital strength
 Other KPIs
 Financial KPIs
 Statutory cost income ratio                                     50.0              53.7              55.8
 Why we measure this: Measures how efficiently the Group utilises its cost base
 Total return on average equity (%)                              9.2               7.3               5.5
 Why we measure this: Measures the Group's ability to generate profit from the
 equity available to it
 Cost of risk (%)                                                1.7               1.7               1.8
 Why we measure this: Measures how effectively the Group manages the credit
 risk of its lending portfolios
 Non-Financial KPIs
 Customer Feefo ratings (Stars)                                  4.6               4.7               4.7
 Why we measure this: Indicator of customer satisfaction with the Group's
 products and services

 (mark out of 5 based on star rating from 879 reviews, (30 June 2024: 1,073
 reviews, 31 December 2024: 1,661 reviews))
 Further explanation of the financial key performance indicators is discussed
 in the narrative within the Financial review on pages 8 to 13.

The first half of the year saw continued positive momentum towards achieving
our existing medium-term targets. The decision to stop lending in our Vehicle
Finance business will lower the level of loans and advances to customers and
net interest margin ('NIM') targets and will result in an improved cost income
ratio and ROAE. We will provide further information on our new ambitions and
targets at a capital markets event in Q4 2025.

We achieved strong net lending growth of 6.1% to £3.8 billion in the first
half of 2025 (31 December 2024: £3.6 billion), bringing us close to our £4
billion ambition. This was largely driven by growth in our Business Finance
and Retail Finance portfolios. Given the recent announcement on Vehicle
Finance, we now expect to reach net lending of £4.0 billion in our Core
businesses in 2026.

NIM improved to 5.4% (30 June 2024: 5.3%), following active management of
yields as cost of funds fell in the first half of the year. Retail Finance NIM
has increased to 7.0% (30 June 2024: 6.6%) due to the falling yield curve and
the contractual re-pricing lag. Our expectation is that NIM will remain around
this level in the second half of 2025 but will reduce as the higher margin
Vehicle Finance portfolio runs-down and returns improve. Risk adjusted margin
is expected to remain broadly stable, reflecting the higher cost of risk of
Vehicle Finance.

We have continued to make good progress with Project Fusion, with operational
changes having delivered £1.5 million additional cost savings in the year so
far. We are on track to deliver the full, previously announced, additional £3
million of cost savings by the end of 2025. This will bring our total
annualised savings from Project Fusion to £8 million(3). This has contributed
towards a lower adjusted(1) cost income ratio, which improved by 460bps to
49.1% (30 June 2024: 53.7%). We expect our Core cost income ratio to improve
as a result of the decision to stop lending in Vehicle Finance.

Our cost of risk has remained broadly stable year-on-year, at 1.7% (30 June
2024: 1.7%). We have seen normalisation of impairment charges in Retail
Finance which benefited from non-recurring model enhancement benefits in 2024
and increase in IFRS 9 stage 1-2 rolls, steady improvements in Vehicle
Finance, and increases in Business Finance as we continued to manage a small
number of legacy defaults cases. We expect an improvement in the cost of risk
as we run-off the Vehicle Finance portfolio.

Continued robust growth in net lending balances and the implementation of our
disciplined cost management approach under Project Fusion, has led to an
increase in adjusted(1) ROAE to 9.6% (30 June 2024: 7.3%). Total ROAE was 9.2%
(30 June 2024: 7.3%). This has been achieved with an improved CET 1 ratio of
12.6% (31 December 2024: 12.3%).

Capital and funding

We accelerated repayment of our Term Funding Scheme with additional incentives
for SMEs ('TFSME') funding and full repayment was achieved by the end of the
first half of the year. We have continued to utilise the Bank of England's
Indexed Long-Term Repo ('ILTR') facility during the period and have balances
outstanding of £250.0 million (31 December 2024: £125.0 million).

Current expectations are that the PRA will implement Basel 3.1 standards in
January 2027. The Strong and Simple capital regime for Small Domestic Deposit
Taker ('SDDT') firms is expected to be implemented at the same time and will
provide an alternative to smaller banks to the full Basel 3.1 standards. The
Group has been approved as an SDDT; the framework and 1 January 2027
effective date is subject to final policy announcements from the PRA. The
Group has factored the expected impacts from the Basel 3.1 and SDDT regimes
into its capital management processes.

Strategic priorities
Simplify

As part of our continued focus on simplifying the Group, we have decided to
prioritise our three higher returning businesses of Retail Finance, Real
Estate Finance and Commercial Finance. Reallocating capital to our three
specialist businesses will enable further simplification of our Group
structure and deliver a higher ROAE.

We continue to make significant progress with Project Fusion, which remains on
track to achieve our updated target of £8 million (from £5 million) in
annualised savings by the end of 2025(3). This includes a positive impact on
our operating expenses as the impact of our organisational redesign at the end
of last year took effect, driving £1.5 million of the additional £3 million
cost savings.

Enhance customer experience

Our customers continue to increase their use of our digital platforms for an
improved customer journey. Our Savings mobile app launched in September 2023,
and since then nearly 30% of our active users have registered to use the app,
with over 98% of customers registered with online banking.

Our Savings accounts offer competitive rates to depositors, and we attracted
significant levels of new funding of £1.1 billion (30 June 2024: £0.7
billion), as well as retaining matured funds of £0.5 billion (30 June 2024:
£0.4 billion). Our deposits are entirely from retail customers and 95.1% (31
December 2024: 95.1%) of deposits are fully covered by the Financial Services
Compensation Scheme.

We continue to prioritise improving customer satisfaction. In the first half
of the year, Secure Trust Bank was awarded the Feefo Exceptional Service
badge, which recognises just 32 businesses that have shown excellence in key
customer review areas. The Group has also won the Gold Trusted Service Award
for its Savings proposition and the Platinum Trusted Service Award for its
Moneyway and Retail Finance businesses. Our Feefo scoring remained high at 4.6
(31 December 2024: 4.7) for our Consumer Finance businesses.

Leverage networks

For the second time in three years, our Commercial Finance team were the
winners of the Asset-Based Lender of the Year at the Real Deals Private Equity
Awards 2025. This award demonstrates the commitment to supporting private
equity investors and providing exceptional service to the businesses we work
with.

Retail Finance works with over 1,000 partners and in the first half of the
year supported a £1.4 billion net lending balance (30 June 2024: £1.3
billion). Highlights included expanding the footprint in the home improvement
sector, strengthening key relationships in dental finance, and outperforming
broader market trends with several record lending days achieved. These
milestones reflect the strength of our partnerships and the resilience of our
model. We serve over 1.3 million customers in our Retail Finance business.

In Real Estate Finance, we have leveraged our existing client base showing the
power of our robust relationship model, with lending to existing clients in
the first half of 2025 at 59% of new business. We have increased the use of
broker channels this year highlighting our proactive shift to growing Real
Estate Finance via the opening of new business channels.

Enabled by technology

During the first half of the year, we continued our momentum in technology
developments. Over 89% of Retail Finance customers self-serve using the online
account management system, enabling a smoother journey for the customer and
creating a more efficient business model. We have seen increased adoption of
our mobile servicing AppToPay proposition by our Retail Finance customers,
which launched in December 2024. Already, AppToPay has 250,000 registrations
and more customer transactions are already being made on AppToPay than on our
online account management system. We are delighted to continue enhancing the
digital capability available to customers.

Regulatory and legal developments

On 1 August 2025, the Supreme Court gave its judgment on the historical use of
commission arrangements in the motor finance industry. The Supreme Court ruled
that, in two cases, the relationship between motor dealer and the customer was
not of a fiduciary nature and the payment of a commission to a motor dealer
was not a bribe. However, the Supreme Court upheld that in the case of Johnson
v FirstRand, the relationship was unfair to Mr. Johnson in the specific
circumstances of the case. Overall, the judgment was positive for the motor
finance industry. The FCA has announced it will consult with the industry on a
compensation scheme for motor finance customers who have been treated
unfairly, with the consultation to launch by early October 2025, and for it to
be open for 6 weeks.

Pending the FCA consultation, which, once finalised, will determine the scope
and design of any redress scheme, there remains continued uncertainty about
the eventual cost for impacted firms. As a result, the Group has retained its
remaining provision for potential redress and operational costs (further
information can be found in Note 13.1 to the Financial Statements).

As highlighted in 2024, following the FCA's review of Borrowers in Financial
Difficulty ('BiFD'), we identified that it was appropriate to pay £2.2
million to customers where we could have supported them better due to their
individual circumstances. A significant proportion of this has now been paid
to customers. We continue to work through more complex cases which has
extended the timeline to complete the programme of work. As a result, we
have recognised an additional £1.0 million as an exceptional item, primarily
in relation to costs to manage the programme.

As a result of the BiFD review, we had an elevated stock of defaulted Vehicle
Finance loans at the end of 2024. During the first half of the year, we made
progress in reducing this position through an initial debt sale of £25.8
million in April 2025, with a second sale completed early in August 2025 of
£14.5 million.

Environmental, Social and Governance ('ESG')

Volunteering remains an integral part of the Group's community work, and our
colleagues continue to support volunteering programmes in addition to
participating in charitable fundraising activities. In Cardiff, the
partnership with Tŷ Hafan has been extended for another three years, raising
over £100,000 since supporting the charity and contributing to the £250,000
target over the six-year partnership. In Solihull, we are delighted to partner
with Birmingham Children's Hospital and have already made good progress
towards our £100,000 3-year target following events such as the Annual Golf
Day and Summer Fete. Additional ongoing highlights include continuing to be a
proud supporter of Pride events in the locations of our largest offices and
supporting colleagues to become Mental Health First Aiders.

Great Place to Work®, the global authority on workplace culture, once again
ranked us as one of the UK's Best Workplaces™, within the large
organisations category. Further accolades have also included rankings for Best
Workplace for Development™ and Best Workplace for Women™. Our inclusion is
supported by employee engagement surveys, and I would like to extend my
personal thanks for the hard work and commitment of all our colleagues at
Secure Trust Bank, particularly as we manage through periods of significant
change. For those impacted by the difficult decision we have made to move away
from Vehicle Finance, we will continue to offer support and guidance moving
forward.

Following the achievement of our target to reduce Scope 1 and 2 emissions by
50% a full year ahead of schedule, the Group remains committed to our climate
strategy and action planning. Key achievements in the first half of 2025
include over half of our company vehicles now being electric and installation
of smart metering in multiple offices. We have sold our former head office in
Solihull completing the process of reducing the property footprint in this
area.

CEO succession

As previously announced, I will retire as the Group's CEO and a Director but
will remain available to support the business until June 2026. It has been a
privilege to lead Secure Trust Bank and to work with so many talented people.
We have navigated a number of challenges in recent years and so I am proud of
the transformation we have delivered to position the business for future
growth and enhanced shareholder returns. It is good to see this start to be
recognised by the market.

I have been working with my successor Ian Corfield, to ensure a smooth
transition in the Group's leadership and I wish him every success in role. It
is the right time to hand over to Ian to ensure consistent leadership
throughout the next stage of the Group's strategic development. Ian will share
details of the Group's new ambitions for 2026 and beyond at a capital markets
event later this year.

Other Executive Committee updates

At the end of July, Anne Mckenning, Chief People Officer, left the Group.
Having joined in 2007, Anne has been a highly valued member of our Executive
Committee and played a significant role in shaping our culture, people
strategy and supporting the growth and transformation of the Group. I would
like to extend my thanks to Anne for her significant contribution and wish her
all the best for the future.

Outlook

Interest rates are not expected to fall further in 2025 with the market now
expecting further rate cuts in 2026. The UK economy is expected to grow
modestly through 2025, although anticipated tightening of fiscal policy and
increased global uncertainty may impact the medium-term outlook. Unemployment
remains elevated and is anticipated by many economists to peak in 2026 as
employers adjust to higher national insurance contributions, before steadily
improving to around 4% by the end of 2030.

We have identified a number of exciting opportunities for further growth in
our Core businesses, the details of which will be outlined by Ian later this
year. I wish the team every success for the future and thank them for their
unwavering support during my tenure. The Board and I are confident that the
Group is well placed to deliver a sustainable improvement in returns.

 

David McCreadie

Chief Executive Officer

 

1. Adjusted metrics exclude exceptional items of £1.0 million (30 June 2024:
£nil, 31 December 2024: £9.9 million). Details can be found in Note 5 to the
Interim Financial Statements

2. Source: Finance & Leasing Association ('FLA'): New business values
within retail store and online credit 17.3%: 2025 based on January to June.
FLA total and Retail Finance new business of £4,083 million (1 January 2024
to 30 June 2024: £4,255 million) and £708.1 million (1 January 2024 to 30
June 2024: £645.1 million) respectively. As published at 8 August 2025.

3. £5.0 million cost savings relative to operating expenses for the 12 months
ended December 2021. The additional £3.0 million savings (of the £8.0
million) will be relative to annualised operating expenses for the six months
ending 30 June 2024.

Financial review

"Improved profit driven by operating income momentum and cost efficiencies"

Income statement
                                                           30 June     30 June     Change                     31 December

2025
2024
%
2024

£million
£million
£million
 Continuing operations
 Interest income and similar income                        187.8       178.6       5.2                        366.0
 Interest expense and similar charges                      (88.8)      (90.4)      (1.8)                      (181.1)
 Net interest income                                       99.0        88.2        12.2                       184.9
 Fee and commission income                                 7.4         8.0         (7.5)                      19.2
 Fee and commission expense                                (0.1)       (0.1)       -                          (0.2)
 Net fee and commission income                             7.3         7.9         (7.6)                      19.0
 Operating income                                          106.3       96.1        10.6                       203.9
 Net impairment charge on loans and advances to customers  (30.9)      (28.2)      9.6                        (61.9)
 Other gains/(losses)                                      -           0.1         (100.0)                    (0.3)
 Fair value and other gains on financial instruments       0.1         0.7         (85.7)                     1.2
 Operating expenses                                        (52.2)      (51.6)      1.2                        (103.8)
 Profit before income tax before exceptional items         23.3        17.1        36.3                       39.1
 Exceptional items                                         (1.0)       -           n/a                        (9.9)
 Profit before income tax                                  22.3        17.1        30.4                       29.2
 Income tax expense                                        (5.6)       (4.3)       30.2                       (9.5)
 Profit for the period                                     16.7        12.8        30.5                       19.7

 Basic earnings per share (pence) - Adjusted               91.8        67.2        36.6                       150.1
 Basic earnings per share (pence) - Total                  87.6        67.2        30.4                       103.4

                                                           %           %           Percentage point movement  %
 Net Interest Margin ('NIM')                               5.4         5.3         0.1                        5.4
 Net revenue margin                                        5.8         5.8         -                          6.0
 Cost of funds                                             4.8         5.4         (0.6)                      5.3
 Adjusted cost to income ratio                             49.1        53.7        (4.6)                      50.9
 Statutory cost to income ratio                            50.0        53.7        (3.7)                      55.8
 Cost of risk                                              1.7         1.7         -                          1.8
 Adjusted return on average equity                         9.6         7.3         2.3                        8.0
 Total return on average equity                            9.2         7.3         1.9                        5.5
 Common Equity Tier 1 ('CET 1') ratio                      12.6        12.7        (0.1)                      12.3
 Total capital ratio                                       14.8        15.0        (0.2)                      14.6

 

 

 Certain key performance indicators and performance metrics represent
 alternative performance measures that are not defined or specified under IFRS.
 Definitions of these alternative performance measures, their calculation and
 an explanation of the reasons for their use can be found in the Appendix to
 the Interim Report from page 50.

 Adjusted profit before tax and related metrics refers to profit before income
 tax before exceptional items. Further information on exceptional items are
 included in Note 5 of the Interim Financial Statements.

 

In the first half of 2025 adjusted profit before tax increased by 36.3% to
£23.3 million (30 June 2024: £17.1 million). Statutory profit before tax
increased by 30.4% from £17.1 million to £22.3 million. Average lending
balances grew by 8.6% since 31 December 2024, net interest margin improved by
0.1 percentage points to 5.4% (30 June 2024: 5.3%) and our cost of risk at
1.7% was stable with the previous half year. Furthermore, the adjusted cost to
income ratio fell below 50.0% to 49.1% (30 June 2024: 53.7%) and the CET 1
ratio improved to 12.6% (31 December 2024: 12.3%).

Earnings per share rose from 67.2 pence per share (30 June 2024) to 87.6 pence
per share. On an adjusted basis, EPS increased from 67.2 pence per share (30
June 2024) to 91.8 pence per share. Total return on average equity increased
from 7.3% (30 June 2024) to 9.2%.

Detailed disclosures of earnings per ordinary share are shown in Note 7 to the
Interim Financial Statements. The components of the Group's profit for the
period are analysed in more detail in the sections below.

Operating income

The Group's operating income increased by 10.6% to £106.3 million (30 June
2024: £96.1 million). Net interest income on the Group's lending assets
continues to be the largest component of operating income. This increased by
12.2% to £99.0 million (30 June 2024: £88.2 million), primarily due to the
growth in net lending balances, where average balances increased by 8.6% to
£3,707.9 million (31 December 2024: £3,413.9 million).

The Group's NIM increased to 5.4% (30 June 2024: 5.3%) reflecting active
management of yields as the cost of funds fell during the first half of 2025.
Cost of funds have fallen by 0.6 percentage points to 4.8% (30 June 2024:
5.4%) while gross yields reduced by 0.5 percentage points to 10.2% (30 June
2024: 10.7%).

The Group's other income, which relates to net fee and commission income,
decreased slightly by 7.6% to £7.3 million (30 June 2024: £7.9 million)
driven primarily by lower fees in the Vehicle Finance division.

Impairment charge

Impairment charges increased to £30.9 million (30 June 2024: £28.2 million)
and the cost of risk remained at 1.7% (30 June 2024: 1.7%). Of the £2.7
million increase, £2.4 million was due to higher impairments on a few
specific cases within Business Finance. The credit quality of new lending in
the Vehicle Finance business has continued to improve and arrears levels
reduced over the six months to 30 June 2025 leading to a lower cost of risk.
Retail Finance has continued to originate high quality loans, however,
impairment charges for the business have increased over the six months to 30
June 2025 compared to that of the prior period which included reduced one-off
provision releases of £2.6 million due to IFRS 9 model enhancements.
Excluding the one-off releases, the cost of risk would be 1.9% for 30 June
2024.

Overall impairment provisions were at £107.5 million (30 June 2024: £101.6
million) with an aggregate coverage level of 2.7% (30 June 2024: 2.9%).

During the second quarter of the financial year, the Group refreshed
macroeconomic inputs to its IFRS 9 Expected Credit Loss ('ECL') models,
incorporating its external economic advisers' latest UK economic outlook. The
forecast economic assumptions within each IFRS 9 scenario, and the weighting
applied, are set out in more detail in Note 10.1.1 to the Interim Financial
Statements.

The Group has applied Expert Credit Judgements ('ECJs') totalling £3.1
million (30 June 2024: £1.2 million) underlays where management believes the
IFRS 9 modelled output does not fully reflect current risks within the loan
portfolios. The majority of the ECJ underlays of £2.5 million (30 June 2024:
£3.2 million) relate to the Vehicle Finance lending portfolios Loss Given
Default stage 1 and 2 recovery assumptions being understated in the model;
which will be updated in the second half of 2025. Further details of these
ECJs are included in Note 10 to the Interim Financial Statements.

Fair value and other gains on financial instruments

The Group has highly effective hedge accounting relationships, and as a
result, recognised a small hedging ineffectiveness loss of £0.1 million (30
June 2024: £0.1 million gain) and £0.2 million loss (30 June 2024: £0.4
million gain) relating to hedge accounting inception and amortisation
adjustments (see Note 4 to the Interim Financial Statements). The Group also
recognised a gain of £0.4 million (30 June 2024: £0.2 million gain) relating
to interest rate swaps being entered into ahead of hedge accounting becoming
available, which will reverse to the income statement over the remaining life
of the swaps.

Operating expenses

The Group's cost base increased in the period by 1.2% to £52.2 million (30
June 2024: £51.6 million), with the adjusted cost income ratio improving to
49.1% (30 June 2024: 53.7%), despite the impact of inflation on operating
expenses. The ratio reflects both the increase in operating income and the
ongoing programme of initiatives that seek to achieve more efficient and
effective operational processes, including the digitalisation of processes,
supplier and procurement reviews, organisational design and property
management. The statutory cost income ratio inclusive of exceptional items was
50.0% (30 June 2024: 53.7%).

Taxation

The total effective tax rate of 25.1% remained in line with 2024 (30 June
2024: 25.1%).

Exceptional items

Exceptional items during the second half of 2024 were recognised in respect of
costs associated with the FCA's review of BiFD across the industry. At 30 June
2025, further costs of £1.0 million (31 December 2024: £1.5 million, 30 June
2024: £nil) were recorded relating to £0.7 million of costs, and £0.3
million potential redress/goodwill.

Further exceptional costs were recognised in the second half of 2024 in
respect of the FCA's ongoing review of historical discretionary commission
arrangements ('DCA') in the motor finance market and the Court of Appeal's
judgment which was under appeal at that time. In early August 2025, the
Supreme Court provided its judgment, where it rejected two cases and upheld
one case. Following on from the Supreme Court's judgment, the FCA announced it
will consult on the scope and design of a redress scheme covering how firms
should assess what comprised an unfair relationship, applying various factors
decided by the Supreme Court. The Group has undertaken a review of its
estimate of potential costs and redress, including a probability weighted
scenario analysis of outcomes. As a result, the Group has retained its
provision for potential redress and operational costs. As at 30 June 2025, a
provision of £5.5 million (31 December 2024: £6.4 million, 30 June 2024:
£nil) was held. Further detail is provided in Note 13.1 to the Interim
Financial Statements.

Distributions to shareholders

The Board has approved an interim dividend of 11.8 pence per share (30 June
2024: 11.3 pence per share).

Balance sheet
 Summarised balance sheet                         30 June     30 June     (

2025
2024       ) 31 December 2024

£million
£million
£million
 Assets
 Cash and balances at central banks               385.9       412.2       445.0
 Loans and advances to banks                      28.8        21.7        24.0
 Loans and advances to customers                  3,828.8     3,421.6     3,608.5
 Fair value adjustment for portfolio hedged risk  6.3         (10.7)      (6.8)
 Derivative financial instruments                 6.6         18.3        14.3
 Other assets                                     31.5        35.8        31.7
                                                  4,287.9     3,898.9     4,116.7
 Liabilities
 Due to banks                                     261.0       359.1       365.8
 Deposits from customers                          3,510.1     3,042.7     3,244.9
 Fair value adjustment for portfolio hedged risk  4.7         (7.4)       (3.4)
 Derivative financial instruments                 2.6         14.4        10.0
 Tier 2 subordinated liabilities                  93.3        93.1        93.3
 Other liabilities                                42.1        41.5        45.6
                                                  3,913.8     3,543.4     3,756.2

 
New business

Loan originations in the period, being the total of new loans and advances to
customers entered into during the period, increased by 30.7% to £1,388.3
million (30 June 2024: £1,061.8 million).

 New business volumes   30 June  30 June  Change

 2025
2024
%
 Consumer Finance
  Retail Finance        708.1    645.1    9.8
  Vehicle Finance       305.3    248.8    22.7
 Business Finance
  Real Estate Finance   190.4    135.5    40.5
  Commercial Finance    184.5    32.4     469.4
 Total                  1,388.3  1,061.8  30.7

Customer lending and deposits

Group lending assets increased by £220.3 million or 6.1% to £3,828.8 million
(31 December 2024: £3,608.5 million), driven by strong lending growth in
Retail Finance and both Business Finance businesses.

Consumer Finance balances grew by £76.8 million or 4.0%, driven by strong
demand from strategic partner retailers in the first half of 2025 and Business
Finance grew by £143.5 million or 8.5%.

Further analysis of loans and advances to customers, including a breakdown of
the arrears profile of the Group's loan books, is provided in Note 19 to the
Interim Financial Statements.

Customer deposits include Fixed-term bonds, ISAs, Notice and Access accounts.
Customer deposits increased by 8.2% to £3,510.1 million (31 December 2024:
£3,244.9 million) in order to fund the growth in the lending book and as part
of the strategy to replace drawings from the Bank of England Term Funding
Scheme with additional incentives for SMEs ('TFSME') funding.

Total funding ratio of 110.5% decreased slightly from 31 December 2024
(112.4%). The mix of the deposit book has continued to change as the Group has
adapted to the interest rate environment, with a focus on meeting customer
demand for Access products, and retaining stable funds, which is reflected in
the proportion of Fixed-term bonds and ISAs.

Investments and wholesale funding

Amounts due to banks of £261.0 million (31 December 2024: £365.8 million)
includes £250.0 million drawn from the Indexed Long-Term Repo ('ILTR')
facility (31 December 2024: £125.0 million), a routine sterling liquidity
management facility provided by the Bank of England. The TFSME facility was
fully repaid at the end of June 2025 (31 December 2024: £230.0 million).

Tier 2 subordinated liabilities

Tier 2 subordinated liabilities represent £90.0 million of 10.5-year 13.0%
Fixed Rate Callable Subordinated Notes, which qualify as Tier 2 capital.

Capital
Management of capital

Our capital management policy is focused on optimising shareholder value over
the long-term. Capital is allocated to achieve targeted risk adjusted returns
while ensuring appropriate surpluses are held above the minimum regulatory
requirements.

Key factors influencing the management of capital include:

 •    the level of buffers and the capital requirement set by the Prudential
      Regulation Authority ('PRA');
 •    estimated credit losses calculated using IFRS 9 methodology and the applicable
      transitional rules;
 •    new business volumes; and
 •    the product mix of new business.

Capital resources

Capital resources increased over the period from £415.7 million to £432.7
million. CET 1 capital increased by £15.7 million, primarily driven by a
total profit for the period of £16.7 million, offset by the 2025 interim
dividend of £2.2 million. The remainder of the increase was from Tier 2
capital (£1.3 million), as capital eligibility has increased as a consequence
of risk-weighted asset growth.

 Capital                                                         30 June     30 June     31 December

2025
2024
2024

£million
£million
£million
 CET 1 capital, excluding IFRS 9 transitional adjustment         367.1       348.2       351.3
 IFRS 9 transitional adjustment                                  -           -           0.1
 CET 1 capital                                                   367.1       348.2       351.4
 Tier 2 capital(1)                                               65.6        61.5        64.3
 Total capital                                                   432.7       409.7       415.7
 Total risk exposure                                             2,916.8     2,735.3     2,855.7
 Capital ratios
 CET 1 capital ratio                                             12.6        12.7        12.3
 Total capital ratio                                             14.8        15.0        14.6
 CET 1 capital ratio (excluding IFRS 9 transitional adjustment)  12.6        12.7        12.3
 Total capital ratio (excluding IFRS 9 transitional adjustment)  14.8        15.0        14.6
 Leverage ratio                                                  9.3         9.9         9.5

1. Tier 2 capital, which is solely subordinated debt net of unamortised issue
costs, is capped at 25% of total Pillar 1 and Pillar 2A requirements.

Capital requirements

The Total Capital Requirement, set by the PRA, includes both the calculated
requirement derived using the standardised approach and the additional capital
derived in conjunction with the Internal Capital Adequacy Assessment Process
('ICAAP'). In addition, capital is held to cover generic buffers set at a
macroeconomic level by the PRA.

                                     30 June     30 June     (

2025
2024       ) 31 December 2024

£million
£million
£million
 Total Capital Requirement           262.5       246.2       257.0
 Capital conservation buffer (2.5%)  72.9        68.4        71.4
 Countercyclical buffer (2.0%)       58.3        54.7        57.1
 Total                               393.7       369.3       385.5

The increase in lending balances through the first six months of the year
resulted in an increase in risk weighted assets over the period, bringing the
total risk exposure up from £2,855.7 million to £2,916.8 million.

Liquidity
Management of liquidity

The Group uses a number of measures to manage liquidity risk. These include:

 •    the Overall Liquidity Adequacy Requirement ('OLAR'), which is the Board's view
      of the Group's liquidity needs, as set out in the Board approved Internal
      Liquidity Adequacy Assessment Process ('ILAAP');
 •    the Liquidity Coverage Ratio ('LCR'), which is a regulatory measure that
      assesses net 30-day cash outflows as a proportion of High Quality Liquid
      Assets ('HQLA');
 •    total funding ratio, as defined in the Appendix to the Interim Report; and
 •    'HQLAs' are held in the Bank of England Reserve Account and UK Treasury Bills.
      For LCR purposes, the HQLA excludes UK Treasury Bills that are pledged as
      collateral against the Group's TFSME drawings with the Bank of England.

The Group met the LCR minimum threshold throughout the year, with the Group's
average LCR being 193.5% (30 June 2024: 216.3%), based on a rolling 12-month
end average.

Liquid assets

We continued to hold significant surplus liquidity over the minimum
requirements throughout the first six months of the year, managing liquidity
by holding HQLA and utilising predominantly retail funding to support lending.
Total liquid assets decreased to £412.8 million (31 December 2024: £469.0
million) which, amongst other things, reflects the levels of liquidity at the
end of the six months to June 2025 to support funding required to fund the
pipeline and fixed-term bond maturities.

The Group is a participant in the Bank of England's Sterling Money Market
Operations under the Sterling Monetary Framework and has drawn £250.0 million
under the ILTR scheme (31 December 2024: £125.0 million). The ILTR scheme has
used collateral already prepositioned with the Bank of England and was
initiated in 2024 as part of the strategy to repay TFSME before the end of its
contractual term. As at the end of June 2025 TFSME was fully repaid (31
December 2024: £230.0 million). The Group has no liquid asset exposures
outside of the United Kingdom and no amounts that are either past due or
impaired.

 Liquid assets  30 June     30 June     31 December 2024

2025
2024
£million

£million
£million
 Aaa - Aa3      385.9       412.2       445.0
 A1 - A2        26.9        21.7        24.0
 Total          412.8       433.9       469.0

We continue to attract customer deposits to support balance sheet growth. The
composition of customer deposits is shown in the table below:

 Customer deposits  30 June  30 June  31 December 2024

2025
2024
%

%
%
 Fixed-term bonds   44       50       47
 Notice accounts    2        3        2
 ISAs               32       23       26
 Access accounts    22       24       25
 Total              100      100      100

 

Business review
Consumer Finance
Retail Finance

We provide quick and easy finance options at point of sale.

                                                  30 June  30 June    31 December 2024

2025
2024
 New business (£million)                          708.1     645.1     1,289.7
 Loans and advances to customers (£million)       1,436.4   1,315.4   1,357.8
 Net interest margin (%)                          7.0       6.6        6.8
 Risk adjusted margin (%)                         5.8       6.1        6.0

What we do
 •    We provide a market-leading online e-commerce service to retailers, providing
      unsecured, interest-free and interest-bearing prime lending products to UK
      customers to facilitate the purchase of a wide range of consumer
      products, including furniture, jewellery, dental, leisure items and football
      season tickets. These retailers include a large number of household names.
 •    Products are available to purchase in store or online, using our
      market-leading origination platform, which provides fast decision making, with
      90% of applications agreed in an average of six seconds.
 •    The customer proposition and the integrated platform support the growth of UK
      retailers and the real economy.

H1 2025 performance
 •    We achieved record new lending in H1 2025 with £708.1 million, 9.8% higher
      than the same period in 2024 (30 June 2024: £645.1 million). As a result,
      lending balances have grown 5.8% since December 2024. Retail Finance now holds
      17.3%(1) market share of the retail store and online credit new business
      market (30 June 2024: 15.2%)(1).
 •    The new business growth has been led by the furniture and healthcare sectors
      from within existing retailers and signing up new retailers. We have further
      strengthened our position as one of the major lenders in the point of sale
      credit market, with over 1.3 million customers.
 •    NIM has increased by 0.4 percentage points to 7.0% compared to 30 June 2024 as
      a result of falling interest rates and customer re-pricing mechanisms. The
      cost of risk has returned to the 2023 level of 1.4%, as indicated within the
      2024 Annual Report (31 December 2024: 1.0%), after the one-off benefit of
      refinements to the IFRS 9 model during H1 2024. As a result, the risk
      adjustment margin decreased from 6.1% to 5.8% period on period. Net interest
      margin and cost of risk reflect the success of our strategy of focusing on
      prime sectors.
 •    At the end of June 2025, 87.0% (31 December 2024: 86.7%) of the lending book
      related to interest-free lending, and 89.2% (31 December 2024: 87.4%) of
      customers have signed up to online account management allowing self-service of
      their account.
 •    The Retail Finance account servicing app, AppToPay, has surpassed 250,000
      users, with payment activity now exceeding the online account management
      platform.

Outlook
 •    We anticipate continued lending growth from our current sectors, but we are
      also assessing opportunities in adjacent and complementary markets. Our
      operational plans remain focused on efficiency and continually improving our
      customer journeys and retail partners' experience.

 

1.     Source: Finance & Leasing Association ('FLA'): New business
values within retail store and online credit 17.3%: 2025 based on January to
June. FLA total and Retail Finance new business of £4,083 million (1 January
2024 to 30 June 2024: £4,255 million) and £708.1 million (1 January 2024 to
30 June 2024: £645.1 million) respectively. As published at 8 August 2025.

 

Vehicle Finance

We provide quick and easy used car finance options at the point of purchase.

                                                  30 June  30 June  31 December 2024

2025
2024
 New business (£million)                          305.3     248.8   552.9
 Loans and advances to customers (£million)       556.5     497.9   558.3
 Net interest margin (%)                          9.2       9.5      9.4
 Risk adjusted margin (%)                         3.7       1.1      1.9

What we do
 •    We provide consumer lending products that are secured against the second-hand
      vehicle being financed.
 •    We also provide a vehicle stock funding product, which is secured against
      dealer forecourt used car stock; sourced from auctions, part exchanges or
      trade sources.
 •    Finance is provided via technology platforms, allowing us to receive
      applications online from introducers; provide an automated decision;
      facilitate document production through to pay-out to dealer; and manage
      in-life loan accounts.

H1 2025 performance
 •    New business lending has grown by 22.7% in the six months to 30 June 2025
      against the same period last year, wholly through the growth of Stock Funding.
      In line with our previously announced strategy to focus on higher returning
      segments, we have seen a reduction in new consumer lending which is 18.9%
      lower in H1 2025 than in H1 2024. In this period, our market share of new
      business has been 1.0%(1) (30 June 2024: 1.2%).
 •    Overall net lending balances are 0.3% lower than the 31 December 2024. While
      Stock Funding has grown quickly, the short lending cycle means that overall
      lending balances have reduced marginally.
 •    Net interest margin is 30 bps lower compared to the same period last year due
      to an increase in mix from higher credit quality lending products. We have
      continued to recover from the impacts of the FCA's Borrowers in Financial
      Difficulty ('BiFD') review, which had an impact on collections processes,
      resulting in an improved cost of risk and risk adjusted margin.
 •    As highlighted previously, the business had high levels of historic defaulted
      balances due to the operational consequences of BiFD. To manage this balance
      down, we successfully sold a large tranche of these loans in April 2025, and a
      large proportion of the remaining stock was sold in August 2025. Furthermore,
      we have agreed a forward flow arrangement to sell eligible accounts new to
      default on a regular basis.

Outlook
 •    On 2 July 2025, we announced that we would cease new lending. We will continue
      to service existing consumers until the end of their agreement. In addition,
      we will support our stock funding customers to transition lending facilities
      to other providers.
 •    In relation to historic motor finance commissions, the Group has made an
      initial assessment of the outcome of the Supreme Court judgment issued on 1
      August 2025, and the subsequent statement from the FCA. The FCA has confirmed
      it will consult on the scope and design of a proposed redress scheme in early
      October 2025, which the Group will work through, linking in with industry
      bodies, once received. Further information can be found in Note 13.1 to the
      Interim Financial Statements.

 

1.     Source: FLA. Cars bought on finance by consumers through the point
of sale: New business values for used cars: 2025 based on January to June
2025, FLA total of £11,400 million (1 January 2024 to 30 June 2024: £11,076
million) and Vehicle Finance total £110.2 million (1 January 2024 to 30 June
2024: £135.9 million). As published at 8 August 2025.

Business Finance
Real Estate Finance

We lend money against residential properties to professional landlords and
property developers.

                                                  30 June  30 June    31 December 2024

2025
2024
 New business (£million)                          190.4     135.5     383.5
 Loans and advances to customers (£million)       1,447.5   1,271.5   1,341.4
 Net revenue margin (%)                           2.4       2.6        2.6
 Risk adjusted margin (%)                         1.7       2.2        2.3

What we do
 •    We provide non-regulated first charge secured lending to specialist real
      estate markets, lending to professional landlords to enable them to improve
      and grow their portfolio and provide development facilities to property
      developers and SME housebuilders to help build new homes for sale or letting.
 •    Due to our specialist relationship-led business model, we offer through the
      cycle tailored underwriting and cash flow led debt structuring.
 •    Finance opportunities are sourced and supported on a relationship basis
      directly and via introducers and brokers.

H1 2025 performance
 •    We have seen strong levels of new business, particularly in the
      Residential Investment sector, built on a strong origination team and the
      refinancing of existing loans through strong customer relationships.
 •    Lending balances grew by 7.9% to a record high of £1,447.5 million (31
      December 2024: £1,341.4 million) despite weak economic growth and a slow
      property market in the South East.
 •    The Residential Investment share of the portfolio increased further by the end
      of June 2025 to 90.7% (31 December 2024: 88.1%). This reflects both the
      repayment of development deals and 89% of new lending being within Residential
      Investment.
 •    The portfolio mix shift towards Residential Investments is reflected in the
      reduction in the net interest margin to 2.4% (30 June 2024: 2.6%).
 •    The cost of risk has increased reflecting provisions on two individual loans
      in default, which has reduced risk adjusted margin. The loan to value is 58.0%
      at 30 June 2025 and continues to remain very stable (31 December 2024: 56%, 30
      June 2024: 57%) and well within risk appetite. Overall, we are positive about
      the low underlying credit risk within the portfolio.

Outlook
 •    We expect to continue to grow profitably despite the economic headwinds and a
      slow residential market where borrowers are not finding it easy to sell
      properties.

Commercial Finance

We support the growth of UK businesses by enabling effective cash flow.

                                              30 June  30 June  31 December 2024

2025
2024
 New business (£million)                      184.5     32.4    105.8
 Loans and advances to customers (£million)   388.4     336.8   351.0
 Net revenue margin (%)                       6.3       6.3     7.6
 Risk adjusted margin (%)                     5.9       6.3     5.9

What we do
 •    We offer a full suite of Asset-Based Lending ('ABL') solutions to SMEs and
      some larger corporates who need bespoke working capital solutions for their
      business.
 •    We operate a high-touch relationship-led model throughout the life of a
      facility, where partners and clients have direct access to decision-makers.
 •    Our lending remains predominantly against receivables, releasing funds of up
      to 90% of qualifying invoices under invoice discounting facilities.
 •    Business is sourced and supported directly from clients via private equity
      houses and professional introducers but is not reliant on the broker market.

H1 2025 performance
 •    Lending balances have increased by 10.7% since December 2024 driven by strong
      new business in the period and low client attrition. Average lending balances
      are at the same level as throughout 2024.
 •    The new business success has come through working closely with private equity
      houses despite the ABL lending in our target markets being limited by lower
      M&A activity.
 •    The net revenue margin at 6.3% in H1 2025 is in line with H1 2024 whereas in
      the second half of 2024 we collected high levels of fees from early client
      terminations.
 •    The H1 2025 risk adjusted margin at 5.9% (30 June 2024: 6.3%) reflects a low
      cost of risk of 0.4% (30 June 2024: 0.0%) due to a few cases moving from IFRS
      9 Stage 1 to Stage 2. The low cost of risk has been achieved by addressing
      adverse client trading performance early and working with their private equity
      partners to mitigate against credit losses. We have had no client failures in
      the period.

Outlook
 •    We will continue to leverage our networks and support the growth of UK
      businesses. We see market opportunity and an ability to grow net lending
      beyond the £400 million level.

Savings

Customers trust us to look after their savings and provide a competitive
return.

                            30 June     30 June     31 December 2024

2025
2024
£million

£million
£million
 Total funds raised         1,093.6     741.9       1,604.2
 Product split
    Fixed-term bonds        1,543.3     1,518.1     1,510.0
    Notice accounts         54.3        104.7       72.4
    ISAs                    1,131.8     689.2       857.3
    Access accounts         780.7       730.7       805.2
                            3,510.1     3,042.7     3,244.9

What we do
 •    We offer a range of savings accounts that are purposely simple in design, with
      a choice of products from Access to 180-day notice, and six month to
      seven-year fixed terms across both Bonds and ISAs.
 •    Our range of Savings products enables us to access the majority of the UK
      personal savings markets and compete for significant liquidity pools,
      achieving a lower marginal cost with the volume, mix and the competitive rates
      offered; optimised to the demand of our funding needs.

H1 2025 performance
 •    In the first half of 2025, the Bank of England Monetary Policy Committee
      reduced the UK Bank Base Rate ('BBR') from 4.75% to 4.50% on 6 February 2025
      and from 4.50% to 4.25% on 8 May 2025.
 •    The offer of different products at different rates allows us to manage the
      overall cost of funds. During the period, we have raised £1.1 billion of new
      deposits and retained £0.5 billion on maturity (76% of maturing fixed-term
      deposits) in order to fund the growth in lending balances.
 •    Deposits balances have increased by 8.2% to £3,510.1 million (31 December
      2024: £3,244.9 million), primarily through the successful acquisition of cash
      ISA accounts, a trend is being seen across the market as a whole.
 •    The market for acquisition has remained very competitive, particularly for
      term deposits.
 •    Savings balances are made up of retail customers. Of total deposits, 95.1% are
      fully covered by the Financial Services Compensation Scheme (31 December 2024:
      95.1%) providing our customers with additional confidence about the security
      of their savings.
 •    We continue to invest in the digital journey of our customers.

Outlook
 •    UK BBR is unlikely to fall below 4% in the second half of the year, with
      additional cuts now expected in 2026. We expect the savings market to remain
      active and competitive.

Market review

The Group operates exclusively within the UK and its revenue is derived almost
entirely from customers operating in the UK. The Group is therefore
particularly exposed to the condition of the UK economy. Customers' borrowing
demands are variously influenced by, among other things, UK property markets,
employment levels, inflation, interest rates and customer confidence. The
economic environment and outlook affect demand for the Group's products,
margins that can be earned on lending assets and the levels of loan impairment
provisions.

As a financial services firm, the Group is subject to extensive and
comprehensive regulation by governmental and regulatory bodies in the UK. The
Group conducts its business subject to ongoing regulation by the Financial
Conduct Authority ('FCA') and the Prudential Regulation Authority ('PRA'). The
Group must comply with the regulatory regime across many aspects of its
activities, including: the training, authorisation and supervision of
personnel; systems; processes; product design; customer journey and
documentation.

Economic review

Economic growth, measured quarterly as UK Gross Domestic Product ('GDP'),
increased in the first quarter of 2025 by 0.7%(1) following an increase of
0.1%(1) in the final quarter of 2024. Following a stronger than anticipated
Q1, economists anticipate GDP growth will continue in 2025, with full year
growth in GDP expected to be 1.1%(2), albeit with trade friction and global
uncertainty weighing on medium-term outlook.

After an initial fall in CPI in the first quarter of the year, inflation has
risen in the second quarter of 2025, with the rate as of June 2025 at 3.6%(1),
the highest since January 2024. The Bank of England reduced the Base Rate
twice within the first six months of 2025, in February and May. A further cut
in August 2025 reduced the Base Rate to 4.0%. Economists now anticipate
additional interest rate cuts in 2026.

Employment levels in June 2025 were 75.2%(1), an increase of 0.3% from
December 2024. However, unemployment levels rose to 4.7%(1) as of June 2025,
from 4.4%(1) in December 2024, to its highest level since 2021. Vacancies were
around 0.7 million(1) for the period April - June 2025, with surveys
suggesting firms are not recruiting new workers and/or replacing those who
have left. The impact of increased national insurance contributions ('NICs')
for employers came into effect in April. Wage growth remained strong, with
growth in average earnings at 5.0%(1). Economists forecast the unemployment
rate to peak in 2026 as firms adjust to higher NICs.

The first half of 2025 saw increased lending and transactions in the housing
market as consumers moved to complete purchases ahead of the end of the
temporary stamp duty cut. Growth is expected to modestly slow in the second
half of the year due to higher stamp duty rates and the impact of refinancing
cheaper fixed-rate mortgage deals which were put in place before mid-2022.
With mortgage approvals up ~3%(3) year-on-year in May 2025, and the market
anticipating further rate cuts by the Bank of England in 2026, economists note
a balanced housing market through 2025.

The response to the change in UK Government has largely been mixed, with the
new government's impact on growth still to be determined. The market awaits
the Autumn Budget to assess impacts of any fiscal policy changes on UK growth,
which could see tax rises or greater spending restraint implemented by the
Labour Government. The Group will continue to monitor the situation closely
and assess the potential impact on its business plans. Elevated global
uncertainty around economic and political landscapes, including US tariffs and
international wars, weighs on the growth outlook for the UK. Despite a
challenging global landscape, UK banks have performed well, with positive
movements in lending data and savings balances, alongside broadly stable
pricing in the market.

Outlook

Interest rates are not expected to fall further in 2025 with the market now
expecting further rate cuts in 2026. The UK economy is expected to grow
modestly through 2025 by 1.1%(2), although tightening fiscal policy and
increased global uncertainty impact the medium-term outlook. The housing
market is expected to remain stable, with a more balanced number of
transactions and price growth than in previous years. Unemployment remains
elevated and is anticipated by economists to peak in 2026 as employers adjust
to higher NICs, before steadily recovering to around 4% by the end of 2030(2).

1. Source: Office for National Statistics, data as at 30 June 2025, unless
otherwise stated.

2. Source: Oxford Economics

3. UK Parliament House of Commons Library

Government and regulatory

There have been a number of announcements that impact the Group and/or the
markets in which it operates. The key announcements in the period to date are
set out below.

Prudential regulation

At the beginning of the year, the PRA announced delaying Basel 3.1
implementation by one year to 1 January 2027, shortening the transitional
period for full implementation which remains 31 January 2030. Recent
announcements have confirmed the implementation date for Small Domestic
Deposit Taker ('SDDT') firms will coincide with Basel 3.1, therefore removing
the requirements of the Interim Capital Regime.

At the start of Q2 2025, the PRA published its Business Plan for 2025. Some of
the key initiatives for the Group were: plans to publish the Basel 3.1 final
rules once parliament has revoked relevant parts of the CRR, intentions to
publish a policy statement in Q4 2025 finalising the Simplified Capital Regime
and additional liquidity simplifications and the amalgamation of the Banking
Data Review and Transforming Data Collection projects to deliver tangible cost
reductions in banking regulatory reporting. The Group continues to monitor
developments in this area. It also included the Solvent Exit Analysis which
comes into force on 1 October 2025. The Group prepared its Solvent Exit
Analysis during the period, which was approved by the Board in early August
2025.

In May 2025, the PRA published CP12/25 'Pillar 2A review - Phase 1' and PS7/25
'Update to PS9/24 on the SME and infrastructure lending adjustments'. This
Consultation Paper consults on proposed changes to credit risk, operational
risk, market and counterparty credit risk methodologies, as well as reducing
the regulatory burden around pension risk.

The Group is planning to perform an impact analysis during Q3 before the
consultation closes in September 2025. The near final policy statement
outlines how adjustments for SME and infrastructure lending will be applied
under Pillar 2A, with the intentions to mitigate the impact of removing the
SME and infrastructure support factor under Basel 3.1. As the Group is an SDDT
firm, the adjustments will be addressed separately under the Strong and Simple
Framework.

In July 2025, the Bank of England, jointly with the PRA, published several
updates and proposals. In particular, they announced in CP14/15, a proposed
reduction in the Recovery plan frequency, to every two years for SDDTs,
acknowledging firms of this size are less complex and tend to have less
material changes to address.

Conduct regulation

We continued to monitor regulatory developments closely, particularly in
relation to motor finance commission arrangements. The Supreme Court heard
arguments, which challenge the legality of historical commission arrangements
in motor finance. On 1 August the Supreme Court delivered its judgment and
ruled that, in two cases, the relationship between motor dealer and the
customer was not of a fiduciary nature and the payment of a commission to a
motor dealer was not a bribe. However, the Supreme Court upheld that in the
case of Johnson v FirstRand, the relationship with Mr. Johnson was unfair in
the specific circumstances of the case. The FCA subsequently confirmed that
beginning in early October 2025 it will consult about a compensation scheme
for motor finance customers who have been treated unfairly.

Separately, we have completed internal impact assessments in response to
several FCA initiatives focused on the Consumer Duty. These include:

·      the FCA's review of how firms treat customers in vulnerable
circumstances;

·      guidance on bereavement processes and the use of powers of
attorney; and

·      findings from the regulator's review of the Consumer Duty's
'consumer support' outcome.

The FCA has also outlined a broader action plan to evolve the Consumer Duty
framework. This includes proposals to simplify rules, reduce regulatory
burdens, and enhance consumer outcomes. Finalised details are expected in
September 2025, at which point we will reassess the impact on our operations
and compliance obligations.

We welcome the increase to the Financial Services Compensation Scheme ('FSCS')
deposit protection limit as positive for our customers. We see customers who
currently deposit funds to the current £85,000 limit and may want to deposit
further funds with the protections FSCS provide.

From initial review of the consultations on the Senior Managers and
Certification Regime and the reforms to the Financial Ombudsman Service and
redress frameworks, we believe the proposed changes to be positive.
Additionally, the sentiments in the Mansion House speech by the Chancellor are
welcomed regarding getting the risk balance right to encourage more retail
investment and growth.

In parallel, the UK Government has introduced new rules to address concerns
around "debanking". Under the new requirements, banks must provide customers
with a minimum of 90 days' notice before closing an account, unless there are
exceptional circumstances. This aims to improve transparency and protect
access to essential banking services.

The FCA has also published a new policy statement introducing a regulatory
return for credit broking firms. This will enhance the FCA's data collection
and supervisory oversight of the sector.

Finally, several consultations are currently in progress, including:

·      reform of the Consumer Credit Act, aimed at modernising and
simplifying the legislative framework;

·      streamlining of complaints data reporting requirements; and

·      proposed changes to the interest rates applied to compensation
awards issued by the Financial Ombudsman Service (FOS).

We are reviewing these consultations and will engage with relevant
stakeholders to prepare for any forthcoming changes.

Principal risks and uncertainties
Risk management

The effective management of risk is a key part of the Group's strategy and is
underpinned by its Risk Aware value. This helps to protect the Group's
customers and generate sustainable returns for shareholders. The Group is
focused on maintaining sufficient levels of capital, liquidity, operational
control, and acting in a responsible way.

The Group's Chief Risk Officer is responsible for leading the Group's Risk
function, which is independent from the Group's operational and commercial
teams. The Risk function is responsible for designing and overseeing the
embedding of appropriate risk management frameworks, processes and controls,
to enable key risks to be identified, assessed, monitored, and accepted or
mitigated in line with the Group's risk appetite. The Group's risk management
practices are regularly reviewed and enhanced to reflect changes in its
operating environment. The Chief Risk Officer is responsible for reporting to
the Board on the Group's principal risks and how they are being managed
against agreed risk appetite.

Further details of the Group's risk management frameworks, including risk
appetite statements and governance can be found on the Group's website:
www.securetrustbank.com/riskmanagement

Changes to the Group's risk profile

Changes in assessment of the Group's risk profile since the position reported
in the 2024 Annual Report and Accounts are set out below.

Credit risk: Stable

Description: The risk of loss to the Group from the failure of clients,
customers, or counterparties to honour fully their obligations to the firm,
including the whole and timely payment of principal, interest, collateral, or
other receivables.

Consumer Finance Credit risk

Retail Finance continues to perform strongly from a credit risk perspective,
demonstrating a stable customer risk profile and arrears materially below
historical levels. Vehicle Finance has seen improved new business quality and
early arrears rates due to targeted credit risk tightening and scorecard
enhancements. Default rates have also trended positively in the first half,
driven by ongoing enhancements in collections capabilities, although customer
cure rates remaining below historical levels creates further opportunity for
improvement. The agreement of a debt sale and forward flow arrangement in
Vehicle Finance has assisted operational capacity with the collections team,
supporting improved performance. Following Board approval, the Vehicle Finance
portfolio has been placed into an orderly run-off, with new business
originations to cease. Specific monitoring is being established to make sure
portfolio performance is within acceptable thresholds for its remaining life.

Business Finance Credit risk

While Business Finance customers have been impacted by the evolving economic
and geopolitical landscape, credit performance remains robust across both
Business Finance portfolios.

Real Estate Finance at a portfolio level is performing well. The market is
seeing a reduction in property sales activity however continued strong rental
demand is supporting valuations across the book. Only a small number of
clients are in an active workout situation and, where appropriate, individual
provisions have been taken to cover the risk of loss on these files.
Individual provisions are reviewed regularly and updated to reflect latest
information and expectation of outcome.

Commercial Finance is similarly performing well at a portfolio level and,
while it does have customers who have been impacted by rising employment costs
and export disruption, the secured and highly structured nature of facilities
means that in most cases these exposures can be managed down without loss to
the Group.

Liquidity and Funding risk: Stable

Description: Liquidity risk is the risk that the Group is unable to meet its
liquidity obligations as they fall due or can only do so at excessive cost.
Funding risk is the risk that the Group is unable to raise or maintain funds
to support asset growth, or the risk arising from an unstable funding profile
that could result in higher funding costs.

The Group has maintained its liquidity and funding ratios in excess of
regulatory and internal risk appetite requirements throughout the first half
of the year. A significant level of high-quality liquid assets, held as cash
at the Bank of England, continues to be maintained so that there is no
material risk that liabilities cannot be met as they fall due. The Group has
repaid all Term Funding Scheme with additional incentives for SMEs ('TFSME')
drawings in the first half of 2025 ahead of contractual maturities with a
combination of retail funding and utilisation of the Bank of England's Indexed
Long-Term Repo ('ILTR') facility.

Capital risk: Stable

Description: Capital risk is the risk that the Group will have insufficient
capital resources to meet minimum regulatory requirements and to support
levels of growth.

The Group's balance sheet and total risk exposure has increased since the
beginning of the year as the Group continues to grow its businesses
organically. Despite the growth in its balance sheet, the Group has continued
to maintain adequate capital and all capital ratio measures have been exceeded
throughout the period.

The Group has assessed the capital impact of severe but plausible outcomes in
relation to potential redress payments related to historical motor finance
commissions and is satisfied it could maintain capital adequacy in such
scenarios.

The Group has assessed the high-level impact of the proposed Basel 3.1 rules
and the PRA's Small Domestic Deposit Taker ('SDDT') Capital Regime and has
taken this into consideration as part of its capital planning.

Market risk: Stable

Description: Market risk is the risk to the Group's earnings and/or economic
value from unfavourable market movements such as interest rates and foreign
exchange rates.

The Group hedges any significant residual fixed rate positions, after internal
matching of assets and liability profiles using interest rate swaps. These are
hedge accounted for through fair value or cash flow hedges which are deemed
highly effective.

Interest Rate Risk in the Banking Book ('IRRBB') is monitored by a range of
Board risk appetite measures including Earnings at Risk ('EAR'), Market Value
Sensitivity ('MVS') and Economic Value of Equity ('EVE'). The Group has
remained within these risk appetite thresholds throughout the first half of
the year and continues to enhance its risk identification, measurement, and
mitigation for IRRBB.

The Group has a small exposure to foreign exchange risk through its Commercial
Finance clients, all exposures are appropriately hedged. The Group does not
operate a trading book.

Operational risk: Stable

Description: Operational risk is the risk that the Group may be exposed to
direct or indirect loss arising from inadequate or failed internal processes,
personnel and succession, technology/infrastructure, or from external factors.

The Group's operational risk processes and standards are defined in a formal
Operational Risk Management Framework, which is aligned to the Basel Committee
on Banking Supervision criteria for the sound management of operational risk.

The Group has met the regulatory expectations set out in PS21/3 Building
operational resilience and continues to enhance its operational resilience
with further embedding and testing.

Technological developments, including Artificial Intelligence ('AI'), continue
to accelerate and the Group has taken a holistic approach to managing AI Risk;
ensuring associated risks and opportunities are fully understood, with the
management of AI Risk being integrated into existing risk frameworks.

The Group has also reviewed its Information Security Strategy and has
implemented an updated suite of information security metrics to provide
improved visibility and assurance to the Executive and Board Risk Committees.

Model risk: Stable

Description: Model risk is the potential for adverse consequences from model
errors or the inappropriate use of modelled outputs to inform business
decisions.

The Group continues to embed stronger model governance and has implemented a
formalised approach to independent model validation.

In the period, there has been strong progress on producing independent
validation reporting for high and medium-high risk models. Clear
identification and recording of model owners and responsibilities in the model
inventory has created a much-improved framework to continue to develop ongoing
monitoring and governance.

Conduct and Compliance risk: Stable

Description: The risk that the Group's products and services, and the way they
are delivered, or the Group's failure to be compliant with all relevant
regulatory requirements, result in poor outcomes for customers or markets in
which we operate, or harm to the Group. This could be as a direct result of
poor or inappropriate execution of our business activities or behaviour from
our employees.

In the period, the Group has continued with the final stages of the Borrowers
in Financial Difficulty review and has progressed actions to enable good
outcomes in line with the Consumer Duty, for example introducing the facility
for those with power of attorney to apply for savings accounts on behalf of
the donor. The Group is making progress on regulatory changes, including
implementation of Solvent Exit Analysis and new Consumer Credit Product Sales
Data reporting.

In relation to historic motor finance commissions, the Group has made an
initial assessment of the outcome of the Supreme Court judgment issued on 1
August 2025, and the subsequent statement from the FCA. The FCA has confirmed
it will consult on a proposed redress scheme in October 2025, which the Group
will work through, linking in with industry bodies, once received. Further
information can be found in Note 13.1 to the Interim Financial Statements.

Financial Crime risk: Stable

Description: The risk that the Group's products and services will be used to
facilitate financial crime, resulting in harm to its customers, the Group or
third parties, and the Group fails to protect them by not having effective
systems and controls. Financial Crime risk includes money laundering,
terrorist financing, proliferation financing, sanctions, modern slavery, human
trafficking, fraud (internal and external), bribery, corruption, tax evasion,
failure to prevent fraud, failure to prevent bribery and the facilitation of
tax evasion. The Group may incur significant remediation costs to rectify
issues, reimburse losses incurred by customers and address regulatory censure
and penalties.

The Group meets its obligations to reduce financial crime risk by maintaining
a proportionate control environment, standards and procedures. There remains
significant focus on this area as we closely monitor changes to legal and
regulatory requirements and criminal methods and responding to them. These
external factors means that our financial crime risk management framework will
continue to evolve at a corresponding pace.

Climate Change risk: Stable

Description: Climate change, and society's response to it, present risks to
the UK financial services sector, with some of these only fully crystallising
over an extended period. The Group is exposed to physical and transition risks
arising from climate change.

The Group has established a climate change working group to support in the
management of climate change risk and continues to assess its risk exposure to
both the potential 'physical' effects of climate change and the 'transitional'
risks from the UK's target to bring all greenhouse gas ('GHG') emissions to
net zero by 2050.

The Group has complied with the requirements of Listing Rule 9.8.6(8) by
including climate-related financial disclosures consistent with the
recommendations and recommended disclosures of the Task Force for
Climate-related Financial Disclosures' ('TCFD') within its 2024 Annual Report
and Accounts.

Condensed consolidated statement of comprehensive income
 For the period ended                                                          Note  Unaudited   Unaudited   Audited

30 June
30 June
31 December

2025
2024
2024

£million
£million
£million
 Income statement
 Interest income and similar income                                            3     187.8       178.6       366.0
 Interest expense and similar charges                                          3     (88.8)      (90.4)      (181.1)
 Net interest income                                                           3     99.0        88.2        184.9
 Fee and commission income                                                           7.4         8.0         19.2
 Fee and commission expense                                                          (0.1)       (0.1)       (0.2)
 Net fee and commission income                                                 3     7.3         7.9         19.0
 Operating income                                                              3     106.3       96.1        203.9
 Net impairment charge on loans and advances to customers                      10    (30.9)      (28.2)      (61.9)
 Other gains/(losses)                                                                -           0.1         (0.3)
 Fair value and other gains on financial instruments                           4     0.1         0.7         1.2
 Operating expenses                                                                  (52.2)      (51.6)      (103.8)
 Profit before income tax before exceptional items                                   23.3        17.1        39.1
 Exceptional items                                                             5     (1.0)       -           (9.9)
 Profit before income tax                                                            22.3        17.1        29.2
 Income tax expense                                                            6     (5.6)       (4.3)       (9.5)
 Profit for the period                                                               16.7        12.8        19.7

 Other comprehensive income
 Items that will be reclassified to the income statement
 Cash flow hedge reserve movements                                                   (1.3)       (0.8)       (0.8)
 Reclassification to the income statement                                            1.4         1.0         1.3
 Taxation                                                                            -           (0.1)       (0.2)
 Other comprehensive income for the period, net of income tax                        0.1         0.1         0.3
 Total comprehensive income for the period                                           16.8        12.9        20.0

 Profit attributable to the equity holders of the Company                            16.7        12.8        19.7
 Total comprehensive income attributable to the equity holders of the Company        16.8        12.9        20.0

 Earnings per share for profit attributable to the equity holders of the
 Company during the period (pence per share)
 Basic earnings per ordinary share                                             7     87.6        67.2        103.4
 Diluted earnings per ordinary share                                           7     84.3        65.1        101.4

Condensed consolidated statement of financial position
 As at the period ended                           Note  Unaudited   Unaudited   Audited

30 June
30 June
31 December

2025
2024
2024

£million
£million
£million
 ASSETS
 Cash and Bank of England reserve account               385.9       412.2       445.0
 Loans and advances to banks                            28.8        21.7        24.0
 Loans and advances to customers                  9     3,828.8     3,421.6     3,608.5
 Fair value adjustment for portfolio hedged risk        6.3         (10.7)      (6.8)
 Derivative financial instruments                       6.6         18.3        14.3
 Property, plant and equipment                          7.6         10.7        9.9
 Right-of-use assets                                    1.7         1.9         1.6
 Intangible assets                                      4.7         5.3         5.0
 Current tax assets                                     1.9         2.5         0.2
 Deferred tax assets                                    3.1         4.0         3.3
 Other assets                                           12.5        11.4        11.7
 Total assets                                           4,287.9     3,898.9     4,116.7
 LIABILITIES AND EQUITY
 Liabilities
 Due to banks                                     11    261.0       359.1       365.8
 Deposits from customers                          12    3,510.1     3,042.7     3,244.9
 Fair value adjustment for portfolio hedged risk        4.7         (7.4)       (3.4)
 Derivative financial instruments                       2.6         14.4        10.0
 Lease liabilities                                      1.8         2.2         1.8
 Other liabilities                                      31.7        34.9        32.5
 Provisions for liabilities and charges           13    8.6         4.4         11.3
 Subordinated liabilities                         14    93.3        93.1        93.3
 Total liabilities                                      3,913.8     3,543.4     3,756.2
 Equity attributable to owners of the parent
 Share capital                                          7.6         7.6         7.6
 Share premium                                          84.0        84.0        84.0
 Other reserves                                         (1.8)       (1.4)       (2.2)
 Retained earnings                                      284.3       265.3       271.1
 Total equity                                           374.1       355.5       360.5
 Total liabilities and equity                           4,287.9     3,898.9     4,116.7

Condensed consolidated statement of changes in equity
                                                                                       Other reserves
 Unaudited                                                     Share       Share       Cash flow hedge reserve  Own shares  Retained    Total

capital
premium
£million
£million
earnings
£million

£million
£million
£million
 Balance at 1 January 2025                                     7.6         84.0        -                        (2.2)       271.1       360.5
 Profit for the six months to 30 June 2025                     -           -           -                        -           16.7        16.7
 Other comprehensive income for the period, net of income tax  -           -           0.1                      -           -           0.1
 Total comprehensive income for the period                     -           -           0.1                      -           16.7        16.8
 Purchase of own shares                                        -           -           -                        (0.2)       -           (0.2)
 Sale of own shares                                            -           -           -                        0.5         -           0.5
 Loss on sale of own shares                                    -           -           -                        -           (0.5)       (0.5)
 Issue of shares                                               -           -           -                        -           -           -
 Dividends                                                     -           -           -                        -           (4.2)       (4.2)
 Share-based payments                                          -           -           -                        -           1.2         1.2
 Balance at 30 June 2025                                       7.6         84.0        0.1                      (1.9)       284.3       374.1

 

                                                                                          Other reserves
 Unaudited                                                     Share       Share premium  Cash flow hedge reserve  Own shares  Retained    Total

capital
£million
£million
£million
earnings
£million

£million
£million
 Balance at 1 January 2024                                     7.6         83.8           (0.3)                    (1.4)       254.8       344.5
 Profit for the six months to 30 June 2024                     -           -              -                        -           12.8        12.8
 Other comprehensive income for the period, net of income tax  -           -              0.1                      -           -           0.1
 Total comprehensive income for the period                     -           -              0.1                      -           12.8        12.9
 Purchase of own shares                                        -           -              -                        (0.4)       -           (0.4)
 Sale of own shares                                            -           -              -                        0.6         -           0.6
 Loss on sale of own shares                                    -           -              -                        -           (0.6)       (0.6)
 Issue of shares                                               -           0.2            -                        -           -           0.2
 Dividends                                                     -           -              -                        -           (3.1)       (3.1)
 Share-based payments                                          -           -              -                        -           1.4         1.4
 Balance at 30 June 2024                                       7.6         84.0           (0.2)                    (1.2)       265.3       355.5

 

                                                                                                   Other reserves
 Audited                                                     Share       Share       Cash flow hedge reserve     Own shares  Retained    Total

capital
premium
£million
£million
earnings
£million

£million
£million
£million
 Balance at 1 January 2024                                   7.6         83.8        (0.3)                       (1.4)       254.8       344.5
 Profit for the year to 31 December 2024                     -           -           -                           -           19.7        19.7
 Other comprehensive income for the year, net of income tax  -           -           0.3                         -           -           0.3
 Total comprehensive income for the year                     -           -           0.3                         -           19.7        20.0
 Purchase of own shares                                      -           -           -                           (1.4)       -           (1.4)
 Sale of own shares                                          -           -           -                           0.6         -           0.6
 Loss on sale of own shares                                  -           -           -                           -           (0.5)       (0.5)
 Issue of shares                                             -           0.2         -                           -           -           0.2
 Dividends paid                                              -           -           -                           -           (5.2)       (5.2)
 Share-based payments                                        -           -           -                           -           2.3         2.3
 Balance at 31 December 2024                                 7.6         84.0        -                           (2.2)       271.1       360.5

Condensed consolidated statement of cash flows
 For the period ended                                                  Note  Unaudited   Unaudited   Audited

30 June
30 June
31 December

2025
2024
2024

£million
£million
£million
 Cash flows from operating activities
 Profit for the year                                                         16.7        12.8        19.7
 Adjustments for:
 Income tax expense                                                    6     5.6         4.3         9.5
 Depreciation of property, plant and equipment                               0.4         0.5         1.0
 Depreciation of right-of-use assets                                         0.5         0.5         1.0
 Amortisation of intangible assets                                           0.6         0.7         1.4
 Impairment charge on loans and advances to customers                  10    30.9        28.2        61.9
 Share-based compensation                                                    1.2         1.4         2.3
 Provision for liabilities and charges                                 13    1.3         0.5         9.8
 Other non-cash items included in profit before tax                          0.1         (0.7)       (0.6)
 Cash flows from operating                                                   57.3        48.2        106.0

profits before changes in operating assets and liabilities
 Changes in operating assets and liabilities:
 - loans and advances to customers                                           (251.2)     (134.4)     (354.8)
 - loans and advances to banks and balances at central banks                 (1.9)       5.0         5.0
 - other assets                                                              (0.8)       1.4         1.4
 - deposits from customers                                                   265.2       170.9       373.1
 - provisions for liabilities and charges                                    (4.0)       (2.1)       (4.7)
 - other liabilities                                                         (7.5)       (1.7)       (5.5)
 Income tax paid                                                             (7.1)       (6.3)       (8.8)
 Net cash inflow from operating activities                                   50.0        81.0        111.7
 Cash flows from investing activities
 Purchase of property, plant and equipment and intangible assets             (0.4)       (0.5)       (1.0)
 Sale of property, plant and equipment and intangible assets                 1.9         -           -
 Net cash inflow/(outflow) from investing activities                         1.5         (0.5)       (1.0)
 Cash flows from financing activities
 Drawdown of amounts due to banks                                            2.3         2.1         0.8
 Drawdown of Index Long-Term Repos                                           250.0       5.0         125.0
 Repayment of Index Long-Term Repos                                          (125.0)     -           -
 Repayment of Term Funding Scheme with additional incentives for SMEs        (230.0)     (50.0)      (160.0)
 Purchase of own shares                                                      (0.2)       (0.4)       (1.4)
 Issue of shares                                                             -           0.2         0.2
 Dividends paid                                                              (4.2)       (3.1)       (5.2)
 Repayment of lease liabilities                                              (0.6)       (0.7)       (1.4)
 Net cash outflow from financing activities                                  (107.7)     (46.9)      (42.0)
 Net (decrease)/increase in cash and cash equivalents                        (56.2)      33.6        68.7
 Cash and cash equivalents at 1 January                                      469.0       400.3       400.3
 Cash and cash equivalents at end of period                            17    412.8       433.9       469.0

Notes to the interim financial statements

1.    Accounting policies

The principal accounting policies applied in the preparation of these Interim
Condensed Consolidated Financial Statements (the 'Interim Financial
Statements') are set out below. These policies have been consistently applied
to all of the years presented, unless otherwise stated.

1.1.   Reporting entity

Secure Trust Bank PLC is a public limited company incorporated in England and
Wales in the United Kingdom (referred to as the 'Company') and is limited by
shares. The Company is registered in England and Wales and has the registered
number 00541132. The registered address of the Company is Yorke House,
Arleston Way, Solihull, B90 4LH. The Interim Financial Statements, as at, and
for the period ended 30 June 2025, comprises Secure Trust Bank PLC and its
subsidiaries (together referred to as the 'Group' and individually as
'subsidiaries'). The Group is primarily involved in banking and financial
services.

1.2.   Basis of presentation

The Interim Financial Statements do not constitute statutory accounts, as
defined in section 434 of the Companies Act 2006, and have been prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006, United Kingdom-adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority. These Interim Financial
Statements should be read in conjunction with the annual statutory
consolidated financial statements (the 'Annual Report and Accounts') for the
year ended 31 December 2024.

A copy of the statutory accounts for the year ended 31 December 2024 has been
delivered to the Registrar of Companies. The auditor's report on those
accounts was not qualified and did not contain statements under section 498(2)
or (3) of the Companies Act 2006. The results for the periods ending 30 June
2025 and 30 June 2024 are unaudited.

The Interim Financial Statements have been prepared under the historical cost
convention, as modified by the valuation of derivative financial instruments.
The Interim Financial Statements are presented in pounds sterling, which is
the functional and presentational currency of the entities within the Group.
The Group has historically chosen to present additional comparatives for the
prior financial year on a voluntary basis.

The preparation of the Interim Financial Statements, in conformity with IFRS,
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
Interim Financial Statements, are disclosed in Note 2.

1.2.1. Going concern

The Interim Financial Statements are prepared on a going concern basis as the
Directors are satisfied that the Group has adequate resources to continue in
business for the foreseeable future. The Directors have assessed the Group's
ability to continue to adopt the going concern basis of accounting, as
required by accounting standards.

As disclosed in the 2024 Annual Report and Accounts (pages 40 and 41), the
Group considers a number of factors in making this assessment. This includes
reviewing current and past performance, changes in the economic and regulatory
environment, the risk profile of the business, operational resilience and
possible future events that will impact the business. The Group also
undertakes stress testing to ensure the adequacy of capital and liquidity
under severe, but plausible stresses. The Board sets risk appetites designed
to enable the Group to withstand stress and tail risk events.

The Group has additionally considered the impact on capital and liquidity of
severe but plausible and worst-case outcomes for potential redress claims and
associated costs related to historical motor finance commissions and is
satisfied it could maintain adequate capital and liquidity in such scenarios.

Since the year-end, the Group has reviewed its principal risks to ensure they
remain appropriate and relevant (for further details see Principal risks and
uncertainties on pages 22 to 24). There has been no significant deterioration
in the risk profile of the Group and no new principal risks have arisen in the
six-month period.

In addition, the Group has reviewed its five-year profit and loss, net assets
and capital forecasts to reflect actual performance in the year-to-date,
strategic changes in the business plan and the impact of changes in the
macroeconomic environment on its loan loss provisioning and business
activities (the 'Reforecast'). Macroeconomic inputs to the Reforecast reflect
increases in the forecast Base Rate of interest, which impact customer pricing
and funding costs, and revised forecast economic variables, which impact IFRS
9 loan loss provisioning. The Group has no material direct exposure to recent
changes in global geo-political risks, the indirect impact of which is taken
into account in the macroeconomic inputs referred to above. Under the
Reforecast, the Board is satisfied that the Group can continue to operate
within its capital and liquidity risk appetites for the next five years.

The 2025 Internal Capital Adequacy Assessment Process ('ICAAP') was approved
by the Board in August 2025. Details of the Group's 2024 ICAAP are included in
the 2024 Annual Report and Accounts. For the 2025 ICAAP, macroeconomic stress
testing scenarios were based on information published by the Prudential
Regulation Authority ('PRA') for small banks, and a combined idiosyncratic and
macroeconomic (whole of market) stress was enhanced and used as the basis for
assessing the Group's PRA buffer requirement.

The Board approved the Internal Liquidity Adequacy Assessment Process
('ILAAP') in June 2025. This provides assurance that the Group can maintain
liquidity resources that are adequate, both as to amount and quality, to
ensure there is no significant risk that its liabilities cannot be met as they
fall due. As part of the ILAAP, the Group reviews the liquidity risks to which
it is exposed and assesses the quantum of liquid resources required to
survive, and remain viable, under a severe, but plausible combined
idiosyncratic and whole of market 90-day stress. The Group maintained
liquidity levels in excess of its liquidity risk appetite and regulatory
requirements throughout the year, and is forecast to continue to do so over
the ILAAP planning horizon and going concern assessment period.

As the Group is a Small Domestic Deposit Taker ('SDDT'), it is expected that
the SDDT Capital rules will come into effect in conjunction with the Basel 3.1
rules on 1 January 2027, which disregards the interim capital regime.

Taking into account the updates noted above, the Directors confirm they are
satisfied that the Group has adequate resources to continue in business for
the foreseeable future. For this reason, they continue to adopt the 'going
concern' basis for preparing the accounts.

1.3.   Accounting policies

The accounting policies applied in preparing the unaudited Interim Financial
Statements are consistent with those used in preparing the audited statutory
financial statements for the year ended 31 December 2024.

1.3.1. Taxation

Taxes on profits in interim periods are accrued using the tax rate that will
be applicable to expected total annual profits.

1.3.2. Standards in issue but not yet effective

There are no new standards in issue that are not yet effective and have a
material effect on the Group.

2.    Critical accounting judgements and key sources of estimation
uncertainty

2.1. Judgements

No critical judgements were identified.

2.2. Key sources of estimation uncertainty

Key sources of estimations that could have a material impact on the Group's
financial results, and are therefore considered to be key sources of
estimation uncertainty can be found in:

 •    Note 10.1 Allowances for impairment of loans and advances to customers
 •    Note 13.1 Provisions for liabilities and charges

3.    Operating segments

The Group is organised into four lending segments split between Consumer and
Business Finance, which consists of the different products available, as
disclosed below.

Consumer Finance

 •    Retail Finance: a market-leading online e-commerce service to retailers,
      providing unsecured lending products to prime UK customers to facilitate the
      purchase of a wide range of consumer products, including bicycles, musical
      instruments and equipment, furniture, outdoor/leisure, electronics, dental,
      jewellery, home improvement products and football season tickets.
 •    Vehicle Finance: hire purchase lending for used cars to prime and near-prime
      customers and Personal Contract Purchase lending into the consumer prime
      credit market, both secured against the vehicle financed. In addition, a
      Stocking Funding product is also offered, whereby funds are advanced and
      secured against dealer forecourt used car stock; sourced from auctions, part
      exchanges or trade sources. On 2 July 2025, the Group announced that it would
      cease new lending in Vehicle Finance. For further information, see Note 22.

Business Finance

 •    Real Estate Finance: lending secured against property assets to a maximum 70%
      loan-to-value ratio on fixed or variable rates over a term of up to five
      years.
 •    Commercial Finance: our asset-based lending facilities are predominantly
      against trade receivables, releasing up to 90% of qualifying invoices under
      invoice discounting facilities. Facilities can also be secured against other
      assets, such as inventory, plant and machinery and property either short or
      long term and for a range of loan-to-value ratios alongside invoice
      discounting facilities.

Other

 •    This principally includes interest receivable from central banks, interest
      receivable and payable on derivatives and interest payable on deposits from
      customers, amounts due to banks and subordinated liabilities that are not
      recharged to the operating segments.

The Group's chief operating decision maker, the Executive Committee, regularly
reviews these segments by looking at the operating income, size of the loan
books and impairments. Interest expense is charged to the operating segments
in accordance with the Group's internal funds transfer pricing policy.
Operating expenses reflect costs incurred directly, and costs incurred
centrally that are reallocated to the operating segment to which they can be
directly attributed. Additionally, no balance sheet items are allocated to
segments other than loans and advances to customers. All of the Group's
operations are conducted wholly within the United Kingdom and geographical
information is, therefore, not presented.

 Unaudited                                                 Retail      Vehicle     Real Estate Finance  Commercial Finance  Other       Group

30 June 2025

                                                           Finance     Finance     £million             £million            £million    £million

                                                           £million    £million
 Interest income and similar income                        76.9        38.4        45.2                 13.5                13.8        187.8
 Interest expense and similar charges                      (29.3)      (12.4)      (28.8)               (7.8)               (10.5)      (88.8)
 Net interest income                                       47.6        26.0        16.4                 5.7                 3.3         99.0
 Fee and commission income                                 1.4         0.6         0.2                  5.2                 -           7.4
 Fee and commission expense                                -           -           -                    -                   (0.1)       (0.1)
 Net fee and commission income                             1.4         0.6         0.2                  5.2                 (0.1)       7.3
 Operating income                                          49.0        26.6        16.6                 10.9                3.2         106.3
 Net impairment charge on loans and advances to customers  (9.5)       (16.0)      (4.7)                (0.7)               -           (30.9)
 Fair value gains on financial instruments                 -           -           0.2                  -                   (0.1)       0.1
 Operating expenses                                        (12.7)      (15.1)      (5.3)                (4.1)               (15.0)      (52.2)
 Profit/(loss) before income tax                           26.8        (4.5)       6.8                  6.1                 (11.9)      23.3

before exceptional items
 Exceptional items                                         -           -           -                    -                   (1.0)       (1.0)
 Profit/(loss) before income tax                           26.8        (4.5)       6.8                  6.1                 (12.9)      22.3

 Loans and advances to customers                           1,436.3     556.6       1,447.5              388.4               -           3,828.8

A new presentation layout for operating segments was adopted in the 2024
Annual Report and Accounts to provide information in a format aligned to the
layout of the primary financial statements.

 

Prior year data is also presented using the same format to aid comparability.
This is intended to provide more clear analysis of how each segment
contributes to the Group's performance.

 

 Unaudited                                                 Retail      Vehicle     Real Estate Finance  Commercial Finance  Other       Group

30 June 2024

                                                           Finance     Finance     £million             £million            £million    £million

                                                           £million    £million
 Interest income and similar income                        66.5        32.4        42.9                 15.6                21.2        178.6
 Interest expense and similar charges                      (25.3)      (9.9)       (26.7)               (9.4)               (19.1)      (90.4)
 Net interest income                                       41.2        22.5        16.2                 6.2                 2.1         88.2
 Fee and commission income                                 1.5         1.0         0.3                  5.2                 -           8.0
 Fee and commission expense                                -           (0.1)       -                    -                   -           (0.1)
 Net fee and commission income                             1.5         0.9         0.3                  5.2                 -           7.9
 Operating income                                          42.7        23.4        16.5                 11.4                2.1         96.1
 Net impairment charge on loans and advances to customers  (4.4)       (20.9)      (2.9)                -                   -           (28.2)
 Other gains/(losses)                                      -           0.1         -                    -                   -           0.1
 Fair value gains on financial instruments                 -           -           0.3                  -                   0.4         0.7
 Operating expenses                                        (13.2)      (15.1)      (5.1)                (3.9)               (14.3)      (51.6)
 Profit/(loss) before income tax                           25.1        (12.5)      8.8                  7.5                 (11.8)      17.1

before exceptional items
 Exceptional items                                         -           -           -                    -                   -           -
 Profit/(loss) before income tax                           25.1        (12.5)      8.8                  7.5                 (11.8)      17.1

 Loans and advances to customers                           1,315.4     497.9       1,271.5              336.8               -           3,421.6

 

 

 Audited                                                   Retail      Vehicle     Real Estate Finance  Commercial Finance  Other       Group

31 December 2024

                                                           Finance     Finance     £million             £million            £million    £million

                                                           £million    £million
 Interest income and similar income                        140.7       69.2        87.1                 29.8                39.2        366.0
 Interest expense and similar charges                      (53.9)      (21.6)      (54.5)               (17.6)              (33.5)      (181.1)
 Net interest income                                       86.8        47.6        32.6                 12.2                5.7         184.9
 Fee and commission income                                 3.2         0.9         0.4                  14.6                0.1         19.2
 Fee and commission expense                                -           (0.1)       -                    (0.1)               -           (0.2)
 Net fee and commission income                             3.2         0.8         0.4                  14.5                0.1         19.0
 Operating income                                          90.0        48.4        33.0                 26.7                5.8         203.9
 Net impairment charge on loans and advances to customers  (13.3)      (38.7)      (4.0)                (5.9)               -           (61.9)
 Other gains/(losses)                                      -           0.1         -                    -                   (0.4)       (0.3)
 Fair value gains on financial instruments                 -           -           -                    -                   1.2         1.2
 Operating expenses                                        (26.1)      (31.6)      (10.0)               (8.1)               (28.0)      (103.8)
 Profit/(loss) before income tax                           50.6        (21.8)      19.0                 12.7                (21.4)      39.1

before exceptional items
 Exceptional items                                         -           -           -                    -                   (9.9)       (9.9)
 Profit/(loss) before income tax                           50.6        (21.8)      19.0                 12.7                (31.3)      29.2

 Loans and advances to customers                           1,357.8     558.3       1,341.4              351.0               -           3,608.5

 

4.    Fair value and other gains on financial instruments

                                                                      Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024

           £million
                                                                      £million    £million
 Fair value movement during the period - interest rate derivatives    (5.3)       1.3         1.6
 Fair value movement during the period - hedged items                 5.2         (1.2)       (1.5)
 Hedge ineffectiveness recognised in the income statement             (0.1)       0.1         0.1
 Inception and amortisation adjustment¹                               (0.2)       0.4         0.6
 Gains recognised on derivatives not in hedge relationships           0.4         0.2         0.5
                                                                      0.1         0.7         1.2

1. The inception and amortisation adjustment relates to amortisation of macro
fair value hedge accounting relationships derecognised and the amortisation of
the fair value adjustment of underlying hedged items at the time hedge
accounting relationships commenced or were redesignated. Over the life of the
hedged items these adjustments are expected to off-set gains/losses on
derivatives taken for hedging purposes before and after they are designated in
hedge relationships.

5.    Exceptional items

                                          Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Motor Finance commissions
     Redress                              -           -           5.2
     Costs                                -           -           1.7
                                          -           -           6.9
 BiFD Vehicle Finance collections review
     Redress                              0.3         -           0.2
     Costs                                0.7         -           1.3
                                          1.0         -           1.5
 Organisational redesign                  -           -           1.5
 Total exceptional items                  1.0         -           9.9

Costs associated with these activities are outside the normal course of
business and are treated as exceptional.

Motor Finance commissions

During 2024, the Group recognised costs of £6.9 million, of which £6.4
million was recognised as a provision. Further details can be found in Note
13.1.

Borrowers in financial difficulty ('BiFD') Vehicle Finance collections review

Following the Financial Conduct Authority's review of BiFD across the
industry, and in response to the specific feedback we received on our own
collection activities, in 2023, we engaged external support to assist us and,
where necessary, enhanced our approach, which included offering a wider range
of forbearance options to our customers. In 2024, we incurred or provided for
costs of £1.5 million relating to processes, procedures and policies in our
Vehicle Finance collections operations. In 2025, a further £1.0 million was
incurred or provided relating to £0.7 million of costs, and £0.3 million
potential redress.

Organisational redesign

During 2024, the Group undertook an organisational redesign where
product-specific teams were amalgamated under a single management structure.
In addition, there were changes within Finance and the Risk functions to
ensure they were configured to support the business in the most effective way.
As a consequence, the Group incurred redundancy costs of £1.5 million.

Income tax on exceptional items

Income tax on exceptional items amount to £0.2 million credit (30 June 2024:
£nil, 31 December 2024: £1.0 million credit).

 

6.    Income tax expense

                                                                 Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Current taxation
 Corporation tax charge - current year                           5.3         3.9         8.4
 Corporation tax charge - adjustments in respect of prior years  -           0.2         0.3
                                                                 5.3         4.1         8.7
 Deferred taxation
 Deferred tax charge - current year                              0.4         0.4         1.2
 Deferred tax credit - adjustments in respect of prior years     (0.1)       (0.2)       (0.4)
                                                                 0.3         0.2         0.8
 Income tax expense                                              5.6         4.3         9.5

The tax for all of the periods above has been calculated at the current
statutory rate, which is 25.0% for the six months ended 30 June 2025, the six
months ended 30 June 2024, and year ended 31 December 2024.

7.    Earnings per ordinary share

7.1. Basic

Basic earnings per ordinary share are calculated by dividing the profit
attributable to equity holders of the parent by the weighted average number of
ordinary shares as follows:

                                                                    Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
 Profit attributable to equity holders of the parent (£million)     16.7        12.8        19.7
 Weighted average number of ordinary shares (number)                19,071,558  19,043,402  19,057,161
 Earnings per share (pence)                                         87.6        67.2        103.4

7.2. Diluted

Diluted earnings per ordinary share are calculated by dividing the profit
attributable to equity holders of the parent by the weighted average number of
ordinary shares in issue during the year, as noted above, as well as the
number of dilutive share options in issue during the period, as follows:

                                                             Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
 Weighted average number of ordinary shares                  19,071,558  19,043,402  19,057,161
 Number of dilutive shares in issue at the period-end        734,552     632,062     363,751
 Fully diluted weighted average number of ordinary shares    19,806,110  19,675,464  19,420,912
 Dilutive shares being based on:
 Number of options outstanding at the period-end             1,722,763   1,346,654   1,395,045
 Weighted average exercise price (pence)                     142         179         215
 Average share price during the period (pence)               588         740         525
 Diluted earnings per share (pence)                          84.3        65.1        101.4

8.    Dividends

                                                                       Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 2024 final dividend - 22.5 pence per share (paid May 2025)            4.2         -           -
 2024 interim dividend - 11.3 pence per share (paid September 2024)    -           -           2.1
 2023 final dividend - 16.2 pence per share (paid May 2024)            -           3.1         3.1
                                                                       4.2         3.1         5.2

The Directors have approved an interim dividend of 11.8 pence per share (30
June 2024: 11.3 pence per share). This will be paid on 25 September 2025 with
an associated record date of 29 August 2025.

9.    Loans and advances to customers

                                                          Unaudited  Unaudited  Audited

30 June
30 June
31 December 2024

2025
2024
 Gross loans and advances                                 3,936.3    3,523.2    3,720.3
 Less: allowances for impairment of loans and advances    (107.5)    (101.6)    (111.8)
                                                          3,828.8    3,421.6    3,608.5

10.  Allowances for impairment of loans and advances

Expected Credit Losses ('ECL') by stage and by business are disclosed below:

 

                                         Not credit-impaired                            Credit-impaired
 Unaudited                               Stage 1:       Stage 2:                        Stage 3:                  Total provision  Gross loans and advances to customers  Provision cover

30 June 2025
Subject to
Subject to lifetime ECL
Subject to lifetime ECL
£million
£million
%

12-month ECL
£million
£million

£million
 Consumer Finance:
   Retail Finance                         12.9                          8.5              9.1                       30.5             1,466.8                               2.1
   Vehicle Finance:
     Voluntary termination provision      5.5                           1.8              -                         7.3
     Other impairment                     10.4                          7.6              32.4                      50.4
                                          15.9                          9.4              32.4                      57.7             614.3                                 9.4
 Business Finance:
   Real Estate Finance                    0.6                           0.4              16.8                      17.8             1,465.3                               1.2
   Commercial Finance                     0.6                           0.4              0.5                       1.5              389.9                                 0.4
                                          30.0                          18.7             58.8                      107.5            3,936.3                               2.7

 

 

                                         Not credit-impaired                        Credit-impaired
 Unaudited                               Stage 1:       Stage 2:                    Stage 3:                  Total provision  Gross loans and advances to customers  Provision cover

30 June 2024
Subject to
Subject to lifetime ECL
Subject to lifetime ECL
£million
£million
%

12-month ECL
£million
£million

£million
 Consumer Finance:
   Retail Finance                         13.6           6.9                         9.8                       30.3             1,345.7                               2.3
   Vehicle Finance:
     Voluntary termination provision      5.9           0.9                         -                          6.8
     Other impairment                     9.6            6.3                         36.7                      52.6
                                          15.5           7.2                         36.7                      59.4             557.3                                 10.7
 Business Finance:
   Real Estate Finance                    0.5            0.4                         10.4                      11.3             1,282.8                               0.9
   Commercial Finance                     0.6           -                           -                          0.6              337.4                                 0.2
                                          30.2           14.5                        56.9                      101.6            3,523.2                               2.9

 

 

                                         Not credit-impaired                        Credit-impaired
 Audited                                 Stage 1:       Stage 2:                    Stage 3:                  Total provision  Gross loans and advances to customers  Provision cover

31 December 2024
Subject to
Subject to lifetime ECL
Subject to lifetime ECL
£million
£million
%

12-month ECL
£million
£million

£million
 Consumer Finance:
   Retail Finance                         13.5           6.5                         10.1                      30.1             1,387.9                               2.2
   Vehicle Finance:
     Voluntary termination provision      5.4            1.5                         -                         6.9
     Other impairment                     9.8            7.4                         44.3                      61.5
                                          15.2           8.9                         44.3                      68.4             626.7                                 10.9
 Business Finance:
   Real Estate Finance                    0.4            0.3                         11.8                      12.5             1,353.9                               0.9
   Commercial Finance                     0.5            0.2                         0.1                       0.8              351.8                                 0.2
                                          29.6           15.9                        66.3                      111.8            3,720.3                               3.0

 

The impairment charge disclosed in the income statement can be analysed as
follows:

                                                            Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Expected credit losses: impairment charge                  31.2        28.2        61.9
 Credit in respect of off-balance sheet loan commitments    -           -           0.1
 Loans written off directly to the income statement         0.3         -           0.7
 Unwind of discount                                         (0.6)       -           (0.8)
                                                            30.9        28.2        61.9

 

Total allowance for impairment above includes expert credit judgements
(post-model adjustments) as follows:

                                                                 Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Specific underlays held against credit-impaired                 (0.5)       (0.6)       (0.7)

secured assets held within the Business Finance portfolio
 Management judgement in respect of:
   Vehicle Finance LGD                                           (2.5)       (3.2)       (4.5)
   Vehicle Finance PD                                            -           5.8         -
 Other                                                           (0.1)       (0.8)       (0.5)
 Expert credit judgements applied to the IFRS 9 model results    (3.1)       1.2         (5.7)

 

Reconciliations of the opening to closing allowance for impairment of loans
and advances are presented below:

                                                   Not credit-impaired                        Credit-impaired
 Unaudited                                         Stage 1:       Stage 2:                    Stage 3:                  Total

Subject to
Subject to lifetime ECL
Subject to lifetime ECL
£million

12-month ECL
£million
£million

£million
 At 1 January 2025                                 29.6           15.9                        66.3                      111.8
 (Decrease)/increase due to change in credit risk
 - Transfer to stage 2                             (6.4)          19.5                        (1.1)                     12.0
 - Transfer to stage 3                             (0.1)          (11.6)                      24.0                      12.3
 - Transfer to stage 1                             2.7            (6.9)                       -                         (4.2)
 Passage of time                                   (3.5)          2.0                         3.8                       2.3
 New loans originated                              8.2            -                           -                         8.2
 Matured and derecognised loans                    (1.7)          (0.8)                       (3.5)                     (6.0)
 Changes to credit risk parameters                 1.1            0.3                         2.0                       3.4
 Other adjustments                                 2.9            0.3                         -                         3.2
 Charge to income statement                        3.2            2.8                         25.2                      31.2
 Allowance utilised in respect of write-offs       (2.8)          -                           (32.7)                    (35.5)
 30 June 2025                                      30.0           18.7                        58.8                      107.5

 

                                                   Not credit-impaired                        Credit-impaired
 Unaudited                                         Stage 1:       Stage 2:                    Stage 3:                  Total

Subject to
Subject to lifetime ECL
Subject to lifetime ECL
£million

12-month ECL
£million
£million

£million
 At 1 January 2024                                 29.5           18.2                        40.4                      88.1
 (Decrease)/increase due to change in credit risk
 - Transfer to stage 2                             (6.0)          20.3                        -                         14.3
 - Transfer to stage 3                             (0.1)          (12.7)                      25.5                      12.7
 - Transfer to stage 1                             4.2            (12.9)                      -                         (8.7)
 Passage of time                                   (1.8)          0.4                         2.9                       1.5
 New loans originated                              7.3            -                           -                         7.3
 Matured and derecognised loans                    (1.3)          (1.0)                       (0.9)                     (3.2)
 Changes to credit risk parameters                 (0.8)          1.3                         1.2                       1.7
 Other adjustments                                 1.7            0.9                         -                         2.6
 Charge/(credit) to income statement               3.2            (3.7)                       28.7                      28.2
 Allowance utilised in respect of write-offs       (2.5)          -                           (12.2)                    (14.7)
 30 June 2024                                      30.2           14.5                        56.9                      101.6

 

                                                   Not credit-impaired                        Credit-impaired
 Audited                                           Stage 1:       Stage 2:                    Stage 3:                  Total

Subject to
Subject to lifetime ECL
Subject to lifetime ECL
£million

12-month ECL
£million
£million

£million
 At 1 January 2024                                 29.5           18.2                        40.4                      88.1
 (Decrease)/increase due to change in credit risk
 - Transfer to stage 2                             (11.7)         38.6                        (1.4)                     25.5
 - Transfer to stage 3                             (0.2)          (24.1)                      48.8                      24.5
 - Transfer to stage 1                             7.8            (20.8)                      -                         (13.0)
 Passage of time                                   (6.3)          4.6                         14.8                      13.1
 New loans originated                              16.2           -                           -                         16.2
 Matured and derecognised loans                    (2.1)          (1.6)                       (0.5)                     (4.2)
 Changes to credit risk parameters                 (2.3)          (0.5)                       (2.9)                     (5.7)
 Other adjustments                                 4.0            1.5                         -                         5.5
 Charge/(credit) to income statement               5.4            (2.3)                       58.8                      61.9
 Allowance utilised in respect of write-offs       (5.3)          -                           (32.9)                    (38.2)
 31 December 2024                                  29.6           15.9                        66.3                      111.8

The tables above have been prepared based on monthly movements in the ECL.

Transfers between stages 1 to 2 or 1 to 3 relate to changes from 12-month PD
to lifetime PD, and vice versa.

Passage of time represents the impact of accounts maturing through their
contractual life, the associated reduction in PDs and the unwind of the
discount applied in calculating the ECL.

Changes to credit risk parameters represent movements that have occurred due
to the Group updating model inputs. This would include the impact of, for
example, updating the macroeconomic scenarios applied to the models.

Other adjustments represent the movement in the Vehicle Finance voluntary
termination provision.

Stage 1 'Allowance utilised in respect of write-offs' arise on Vehicle Finance
accounts where borrowers have exercised their right to voluntarily terminate
their agreements.

10.1. Key sources of estimation uncertainty

Estimations that could have a material impact on the Group's financial results
and are therefore considered to be key sources of estimation uncertainty are
set out below.

The potential impact of the current macroeconomic environment has been
considered in determining reasonably possible changes in key sources of
estimation uncertainty, which may occur in the next 12 months.

The determination of both the PD and Loss Given Default ('LGD') require
estimation, which is discussed further as follows.

10.1.1. Incorporation of forward-looking data

The Group incorporates forward-looking information into both its assessment of
whether the credit risk of a financial asset has increased significantly since
initial recognition and its measurement of expected credit loss by developing
a number of potential economic scenarios and modelling expected credit losses
for each scenario.

The macroeconomic scenarios used were provided by external economic advisers.
The scenarios and weightings applied are summarised below:

 Unaudited                  UK Unemployment Rate - annual average                 UK HPI - movement from H1 2025

30 June 2025
 Scenario       Weightings  Year 1      Year 2      Year 3      5-Year Average    Year 1    Year 2    Year 3    5-Year Average

%
%
%
%
%
%
%
%
 Upside         20%         4.4         3.9         3.7         3.9               3.7       8.4       14.8      5.1
 Base           50%         4.8         4.9         4.7         4.6               1.6       3.9       7.8       3.9
 Downside       25%         5.6         6.5         6.8         6.4               (6.6)     (9.2)     (10.4)    0.3
 Severe         5%          5.9         7.3         7.5         7.1               (12.3)    (18.5)    (23.2)    (2.6)

 

 Unaudited                  UK CPI - movement from H1 2025

30 June 2025
 Scenario       Weightings  Year 1    Year 2    Year 3    5-Year Average

%
%
%
%
 Upside         20%         3.4       6.6       9.3       13.3
 Base           50%         2.2       4.7       6.9       11.0
 Downside       25%         0.6       2.0       3.9       7.7
 Severe         5%          (0.6)     0.0       1.4       5.2

 

 Unaudited                  UK Base Rate - annual average                   UK debt service ratio - annual average

30 June 2025
 Scenario       Weightings  Year 1    Year 2    Year 3    5-Year Average    Year 1      Year 2      Year 3      5-Year Average

%
%
%
%
%
%
%
%
 Upside         20%         5.0       4.1       3.1       3.7               5.5         5.2         4.6         4.8
 Base           50%         3.3       2.8       2.5       2.7               4.7         4.5         4.3         4.4
 Downside       25%         2.6       1.8       1.8       1.9               4.5         4.3         4.3         4.2
 Severe         5%          1.8       0.8       0.8       1.0               4.3         3.7         3.7         3.7

 

 

 Unaudited                  UK Unemployment Rate - annual average                 UK HPI - movement from H1 2024

30 June 2024
 Scenario       Weightings  Year 1      Year 2      Year 3      5-Year Average    Year 1    Year 2    Year 3    5-Year Average

%
%
%
%
%
%
%
%
 Upside         20%         4.0         3.7         3.6         3.7               3.4       8.7       16.6      4.6
 Base           50%         4.3         3.9         3.8         3.9               1.7       4.8       9.9       3.4
 Downside       25%         5.2         6.2         6.8         6.3               (7.0)     (9.0)     (9.3)     (0.3)
 Severe         5%          5.5         6.7         7.4         6.8               (12.7)    (18.5)    (23.1)    (3.2)

 

 Unaudited                  UK CPI - movement from H1 2024

30 June 2024
 Scenario       Weightings  Year 1    Year 2    Year 3    5-Year Average

%
%
%
%
 Upside         20%         3.6       6.8       9.4       13.3
 Base           50%         2.3       4.7       7.0       11.0
 Downside       25%         0.6       1.8       3.7       7.5
 Severe         5%          (0.6)     (0.2)     1.9       5.2

 

 

 Audited                        UK Unemployment Rate - annual average                 UK HPI - movement from December 2024

31 December 2024
 Scenario           Weightings  2025        2026        2027        5-Year Average    2025        2026        2027        5-Year Average

%
%
%
%
%
%
%
%
 Upside             20%         4.0         3.6         3.6         3.7               3.7         7.8         13.4        4.2
 Base               50%         4.4         4.3         4.2         4.2               1.7         3.4         6.2         2.9
 Downside           25%         5.1         6.0         6.7         6.2               (6.6)       (9.6)       (11.7)      (0.5)
 Severe             5%          5.5         6.7         7.4         6.8               (12.3)      (18.9)      (24.7)      (3.4)

 

 Audited                        UK CPI - movement from December 2024

31 December 2024
 Scenario           Weightings  2025        2026        2027        5-Year Average

%
%
%
%
 Upside             20%         3.8         7.3         10.1        2.8
 Base               50%         3.0         5.4         7.6         2.3
 Downside           25%         1.9         2.9         4.6         1.7
 Severe             5%          1.0         1.1         2.6         1.2

 

 Audited                        UK Base Rate - annual average                   UK debt service ratio - annual average

31 December 2024
 Scenario           Weightings  2025      2026      2027      5-Year Average    2025        2026        2027        5-Year Average

%
%
%
%
%
%
%
%
 Upside             20%         5.4       4.4       3.4       3.8               5.6         5.3         4.8         4.9
 Base               50%         3.8       3.1       2.6       2.9               4.9         4.6         4.5         4.5
 Downside           25%         3.0       1.8       1.8       2.0               4.6         4.3         4.5         4.3
 Severe             5%          2.0       0.8       0.8       1.0               4.6         3.6         3.8         3.8

UK Bank of England Base Rate and debt service ratio were implemented into the
ECL allowance modelling during the second half of the year ended 31 December
2024 and, therefore, do not have comparatives for the period ended 30 June
2024.

The sensitivity of the ECL allowance to reasonably possible changes in
scenario weighting (an increase in downside case weighting from the upside
case and an increase in severe stress case weighting from the base case) has
been assessed by the Group and determined as not material.

The Group recognised an impairment charge of £30.9 million (30 June 2024:
£28.2 million, 31 December 2024: £61.9 million). Were each of the
macroeconomic scenarios to be applied 100%, rather than using the weightings
set out above, the increase/(decrease) on ECL provisions would be as follows:

 Unaudited      Vehicle Finance  Retail Finance  Business Finance  Total

30 June 2025
£million
£million
£million
Group

Scenario
£million
 Upside         (0.4)            (0.2)           (1.4)             (2.0)
 Base           (0.2)            (0.1)           (0.8)             (1.1)
 Downside       0.5              0.4             1.8               2.7
 Severe         0.8              0.5             4.4               5.7

 

 

 Unaudited      Vehicle Finance  Retail      Business Finance  Total

30 June 2024
£million
Finance
£million
Group

Scenario
£million
£million
 Upside         (0.3)            (0.2)       (0.6)             (1.1)
 Base           (0.2)            (0.1)       (0.4)             (0.7)
 Downside        0.5              0.4         1.1               2.0
 Severe          0.6              0.5         2.7               3.8

 
 Audited            Vehicle Finance  Retail Finance  Business Finance  Total

31 December 2024
£million
£million
£million
Group

Scenario
£million
 Upside             (0.6)            (0.3)           (1.3)             (2.2)
 Base               (0.2)            (0.1)           (0.8)             (1.1)
 Downside            0.6              0.4             1.8               2.8
 Severe              1.2              0.8             4.1               6.1

10.1.2. ECL-modelled output: Estimation of PDs

Sensitivity to reasonably possible changes in PD could potentially result in
material changes in the ECL allowance for Vehicle Finance and Retail Finance.

A 15.0% (30 June 2024: 15.0%, 31 December 2024: 15.0%) change in the PD for
Vehicle Finance would immediately impact the ECL allowance by £4.5 million
(30 June 2024: £2.5 million, 31 December 2024: £4.0 million).

A 15.0% (30 June 2024: 15.0%, 31 December 2024: 15.0%) change in the PD for
Retail Finance would immediately impact the ECL allowance by £3.9 million (30
June 2024: £3.3 million, 31 December 2024: £3.4 million).

These sensitivities reflect the levels of defaults observed with
business-as-usual collection activities operating.

Due to the relatively low levels of provisions in the Business Finance books,
sensitivity to reasonably possible changes in PD are not considered material.

10.1.3. ECL-modelled output: Vehicle Finance recovery rates

With the exception of the Vehicle Finance portfolio, the sensitivity of the
ECL allowance to reasonably possible changes in the LGD is not considered
material. The Vehicle Finance portfolio is particularly sensitive to changes
in LGD due to the range of outcomes that could crystallise, depending on
whether the Group is able to recover the vehicle as security. For the Vehicle
Finance portfolio, a 20.0% (30 June 2024: 20.0%, 31 December 2024: 20.0%)
change in the recovery rate assumption in the LGD is considered reasonably
possible due to delays in the vehicle collection process. A 20.0% (30 June
2024: 20.0%, 31 December 2024: 20.0%) reduction in the vehicle recovery rate
assumption element of the LGD for Vehicle Finance would increase the ECL by
£1.8 million (30 June 2024: £0.8 million, 31 December 2024 £1.7 million).
There has been no change in the vehicle recovery rate assumption in the ECL
model, in either the current or prior periods.

10.1.4. Climate risk impact

The Group considers the impact of climate-related risks on the financial
statements on a quarterly basis, in particular, climate change negatively
impacting the value of the Group's Real Estate Finance business' security due
to the increased risk of flooding associated with climate change.

While the effects of climate change represent a source of uncertainty (in
respect of potential transitional risks, such as those that may arise from
changes in future government policy), the impact of all of the climate change
risks is considered to be low. Accordingly, the Group does not consider there
to be a material impact on its judgements and estimates from the physical,
transitional and other climate-related risks in the short term.

11.  Due to banks

                                                                         Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Amounts due under the Bank of England's liquidity support operations
  Term Funding Scheme with additional incentives for SMEs ('TFSME')      -           340.0       230.0
  Index Long-Term Repos ('ILTR')                                         250.0       5.0         125.0
 Amounts due to other credit institutions                                9.2         8.9         6.9
 TFSME accrued interest                                                  -           5.1         3.2
 ILTR accrued interest                                                   1.8         0.1         0.7
                                                                         261.0       359.1       365.8

Amounts due under TFSME were repaid during the period ended 30 June 2025.

12.  Deposits from customers

                     Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Fixed term bonds    1,543.3     1,518.1     1,510.0
 Notice accounts     54.3        104.7       72.4
 ISAs                1,131.8     689.2       857.3
 Access accounts     780.7       730.7       805.2
                     3,510.1     3,042.7     3,244.9

13.  Provisions for liabilities and charges

                                          ECL allowance on off-balance sheet loan commitments  Other       Total

£million
£million
£million
 Balance at 1 January 2024                0.8                                                  5.2         6.0
 Charge to income statement               -                                                    0.5         0.5
 Utilised                                 -                                                    (2.1)       (2.1)
 Balance at 30 June 2024 (Unaudited)      0.8                                                  3.6         4.4
 Charge to income statement               0.1                                                  9.3         9.4
 Utilised                                 -                                                    (2.5)       (2.5)
 Balance at 31 December 2024 (Audited)    0.9                                                  10.4        11.3
 Charge to income statement               -                                                    1.3         1.3
 Utilised                                 -                                                    (4.0)       (4.0)
 Balance at 30 June 2025 (Unaudited)      0.9                                                  7.7         8.6

ECL allowance on loan commitments

In accordance with the requirements of IFRS 9, the Group holds an ECL
allowance against loans it has committed to lend, but have not yet been drawn.
For the Real Estate Finance and Commercial Finance portfolios, where a loan
facility is agreed that includes both drawn and undrawn elements, and the
Group cannot identify the ECL on the loan commitment separately, a combined
loss allowance for both drawn and undrawn components of the loan is presented
as a deduction from the gross carrying amount of the drawn component, with any
excess of the loss allowance over the gross drawn amount presented as a
provision. At 30 June 2025, 30 June 2024 and 31 December 2024, no provision
was held for losses in excess of drawn amounts.

Other

Other includes:

 •    provision for fraud, which relates to cases where the Group has reasonable
      evidence of suspected fraud, but further investigation is required before the
      cases can be dealt with appropriately;
 •    s75 Consumer Credit Act 1974 provision;
 •    provision for redundancy;
 •    costs and redress relating to the BiFD Vehicle Finance collections review (see
      Note 5 for further details) and historical motor commissions (see below for
      further details); and
 •    costs and redress relating to further customer redress initiatives.

The Directors expect all provisions to be fully utilised within the next one
to two years.

13.1. Key sources of estimation uncertainty

In January 2024, the FCA launched a review of the historical use of
discretionary commission arrangements ('DCAs') in the motor finance industry.
The Vehicle Finance business sometimes operated these arrangements until June
2017, but stopped doing so well ahead of the FCA banning their use in January
2021.

In October 2024, the Court of Appeal gave judgment in the cases of Hopcraft,
Wrench and Johnson which had wider implications for the legality of both fixed
and DCA historical motor commissions.

These cases were then appealed to the Supreme Court where, in August 2025, the
Hopcraft and Wrench cases were overturned, however the Johnson case was
upheld.

As disclosed in the 2024 Annual Report and Accounts, we undertook scenario
analysis using different assumptions, for a range of Supreme Court outcomes,
which were probability weighted to estimate a potential exposure. Although the
Supreme Court judgment provided some additional clarity, the scope and design
of potential redress and associated costs are yet to be fully provided by the
FCA, which will consult on the redress scheme beginning in early October 2025,
and which it plans to finalise by the end of the year. The Group has continued
to use probability weighted scenario analysis using new information from the
Supreme Court judgment and the FCA's statement to estimate a potential
exposure.

As a result, the Group has decided that any changes to the provision are
unlikely to be material. As at 30 June 2025, a provision of £5.5 million (31
December 2024: £6.4 million, 30 June 2024: £nil) was held. As and when new
information becomes available, our scenarios and assumptions will be revised
and so the provision could be materially higher or lower.

14.  Subordinated liabilities

                            Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Notes at face value        90.0        90.0        90.0
 Unamortised issue costs    (0.6)       (0.8)       (0.7)
 Accrued interest           3.9         3.9         4.0
                            93.3        93.1        93.3

The Fixed Rate Reset Callable Subordinated Notes due August 2033 are listed on
the International Securities Market of the London Stock Exchange. This
issuance is in line with the Group's funding strategy and supports the Group's
stated medium-term growth ambitions.

 •    The notes are redeemable for cash at their principal amount on fixed dates.
 •    The Company has a call option to redeem the notes early in the event of a 'tax
      event' or a 'capital disqualification event', which is at the full discretion
      of the Company.
 •    Interest payments are paid at six-monthly intervals and are mandatory.
 •    The notes give the holders rights to the principal amount on the notes, plus
      any unpaid interest, on liquidation. Any such claims are subordinated to
      senior creditors, but rank pari passu, with holders of other subordinated
      obligations and in priority to holders of share capital.

The above features provide the issuer with a contractual obligation to deliver
cash or another financial asset to the holders and, therefore, the notes are
classified as financial liabilities.

Transaction costs that are directly attributable to the issue of the notes and
are deducted from the financial liability and expensed to the income statement
on an effective interest rate basis over the expected life of the notes.

The notes are treated as Tier 2 regulatory capital, which is used to support
the continuing growth of the business, taking into account increases in
regulatory capital buffers. The issue of the notes is consistent with the
Group's capital management policy.

The Group paid interest of £5.9 million on subordinated liabilities during
the period (June 2024: £5.9 million, December 2024: £11.7 million), which is
included in Net cash inflow from operating activities in the Condensed
consolidated statement of cash flows.

15.  Contingent liabilities and commitments

15.1. Contingent liabilities
15.1.1. Laws and regulations

As a financial services business, the Group must comply with numerous laws and
regulations that significantly affect the way it does business. While the
Group believes there are no material unidentified continuing areas of failure
to comply with these laws and regulations, other than noted below, there can
be no guarantee that all issues have been identified.

15.2. Credit commitments

Commitments to extend credit to customers were as follows:

                           Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Consumer Finance
   Retail Finance          108.1       88.4        112.2
   Vehicle Finance         2.2         3.2         1.2
 Business Finance
   Real Estate Finance     35.3        41.5        39.5
   Commercial Finance      166.9       148.3       110.3
                           312.5       281.4       263.2

16.  Share-based payments

Movements in the share options outstanding during the period are set out
below:

                           Outstanding at 1 January 2025  Granted Number  Forfeited, lapsed and cancelled Number  Exercised Number  Outstanding at 30 June 2025

Number
Number
 Long term incentive plan  892,621                        614,467         (144,670)                               (55,971)          1,306,447
 Deferred bonus plan       85,924                         24,714          -                                       (43,644)          66,994
 Sharesave plan            416,500                        -               (64,857)                                (2,321)           349,322
                           1,395,045                      639,181         (209,527)                               (101,936)         1,722,763

 

                           Outstanding at   Granted Number  Forfeited, lapsed and cancelled Number  Exercised Number  Outstanding at 30 June 2024

1 January 2024
Number

Number
 Long term incentive plan  718,098          422,799         (157,026)                               (57,855)          926,016
 Deferred bonus plan       88,533           43,162          -                                       (45,771)          85,924
 Sharesave plan            403,913          -               (28,242)                                (40,957)          334,714
                           1,210,544        465,961         (185,268)                               (144,583)         1,346,654

 

                           Outstanding at   Granted Number  Forfeited, lapsed and cancelled Number  Exercised Number  Outstanding at

1 January 2024
31 December 2024
                           Number
Number
 Long term incentive plan  718,098          423,111         (189,815)                               (58,773)          892,621
 Deferred bonus plan       88,533           43,162          -                                       (45,771)          85,924
 Sharesave plan            403,913          143,596         (87,559)                                (43,450)          416,500
                           1,210,544        609,869         (277,374)                               (147,994)         1,395,045

17.  Cash flow statement

17.1. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents
comprise the following balances with less than three months maturity from the
date of acquisition.

                                             Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Cash and Bank of England reserve account    385.9       412.2       445.0
 Loans and advances to banks                 28.8        21.7        24.0
 Less:
     Initial margin account                  (1.9)       -           -
                                             412.8       433.9       469.0

The Group has no access to the initial margin account, so this amount does not
meet the definition of cash and cash equivalents, and accordingly, they are
excluded from the cash and cash equivalents.

17.2. Changes in liabilities arising from financing activities

All changes in liabilities arising from financing activities arise from
changes in cash flows, apart from £nil (June 2024: £nil, December 2024:
£0.1 million) of lease liabilities interest expense.

18.  Related party transactions

There were no changes to the nature of the related party transactions during
the period to June 2025 that would materially affect the position or
performance of the Group. The nature and relative quantum of related party
transactions has not changed in the six months ended 30 June 2025 in
comparison to the year ended 31 December 2024. Details of the transactions for
the year ended December 2024 can be found in the 2024 Annual Report and
Accounts.

19.  Management of credit risk

The Group takes on exposure to credit risk, which is the risk that a
counterparty will be unable to pay amounts in full when due. Details of the
management of credit risk can be found in the 2024 Annual Report and Accounts.

 

                                     Stage 1                                   Stage 2       Stage 3       Total
 Unaudited                           £million     <= 30 days     > 30 days     Total         Total         £million

30 June 2025
past due
past due
£million
£million

£million
£million
 Consumer Finance
     Retail Finance                  1,360.0      91.8           4.7           96.5          10.3          1,466.8
     Vehicle Finance                 500.9        47.7           19.2          66.9          46.5          614.3
 Business Finance
     Real Estate Finance             1,171.1      175.4          -             175.4         118.8         1,465.3
     Commercial Finance              365.0        22.9           -             22.9          2.0           389.9
 Total drawn exposure                3,397.0      337.8          23.9          361.7         177.6         3,936.3
 Off-balance sheet
      Loan commitments               304.7        7.8            -             7.8           -             312.5
 Total gross exposure                3,701.7      345.6          23.9          369.5         177.6         4,248.8
 Less:
 Impairment allowance                (30.0)       (11.3)         (7.4)         (18.7)        (58.8)        (107.5)
 Provision for loan commitments      (0.9)        -              -             -             -             (0.9)
 Total net exposure                  3,670.8      334.3          16.5          350.8         118.8         4,140.4

 

                                     Stage 1      Stage 2                                    Stage 3       Total
 Unaudited                           £million     <= 30 days     > 30 days     Total         Total         £million

30 June 2024
past due
past due
£million
£million

£million
£million
 Consumer Finance
     Retail Finance                  1,294.2      35.5           4.8           40.3          11.2          1,345.7
     Vehicle Finance                 449.5        29.5           21.3          50.8          57.0          557.3
 Business Finance
     Real Estate Finance             1,040.7      151.3          13.1          164.4         77.7          1,282.8
     Commercial Finance              324.2        -              -             -             13.2          337.4
 Total drawn exposure                3,108.6      216.3          39.2          255.5         159.1         3,523.2
 Off-balance sheet
      Loan commitments               280.8        0.6            -             0.6           -             281.4
 Total gross exposure                3,389.4      216.9          39.2          256.1         159.1         3,804.6
 Less:
 Impairment allowance                (30.2)       (7.6)          (6.9)         (14.5)        (56.9)        (101.6)
 Provision for loan commitments      (0.8)        -              -             -             -             (0.8)
 Total net exposure                  3,358.4      209.3          32.3          241.6         102.2         3,702.2

 

 

                                     Stage 1      Stage 2                                    Stage 3       Total
 Audited                             £million     <= 30 days     > 30 days     Total         Total         £million

31 December 2024
past due
past due
£million
£million

£million
£million
 Consumer Finance
     Retail Finance                  1,324.1      48.1           4.1           52.2          11.6          1,387.9
     Vehicle Finance                 500.7        40.0           21.0          61.0          65.0          626.7
 Business Finance
     Real Estate Finance             1,046.9      209.0          0.1           209.1         97.9          1,353.9
     Commercial Finance              332.9        6.7            -             6.7           12.2          351.8
 Total drawn exposure                3,204.6      303.8          25.2          329.0         186.7         3,720.3
 Off-balance sheet
      Loan commitments               262.4        0.8            -             0.8           -             263.2
 Total gross exposure                3,467.0      304.6          25.2          329.8         186.7         3,983.5
 Less:
 Impairment allowance                (29.6)       (8.6)          (7.3)         (15.9)        (66.3)        (111.8)
 Provision for loan commitments      (0.9)        -              -             -             -             (0.9)
 Total net exposure                  3,436.5      296.0          17.9          313.9         120.4         3,870.8

19.1 Concentration risk

Management assesses the potential concentration risk from geographic, product
and individual loan concentration. Due to the nature of the Group's lending
operations, the Directors consider the lending operations of the Group as a
whole to be well diversified. Details of the Group's loans and advances to
customers and loan commitments by product is provided in Notes 3 and 15.2
respectively.

The Group's Real Estate Finance loan book is secured against UK property only.
The geographical concentration of these business loans and advances to
customers, by location of the security, is as follows:

                                              Unaudited   Unaudited   Audited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Central England                              153.2       102.0       99.5
 Greater London                               747.0       722.8       709.5
 Northern England                             125.1       98.1        89.2
 South East England (excl. Greater London)    241.5       240.5       233.3
 South West England                           97.7        39.8        40.7
 Scotland, Wales and Northern Ireland         100.8       79.6        79.6
 Gross loans and advances to customers        1,465.3     1,282.8     1,251.8
 Allowance for impairment                     (17.8)      (11.3)      (8.0)
 Total                                        1,447.5     1,271.5     1,243.8
 Loan-to-value                                58%         57%         56%

Under its credit policy, the Real Estate Finance business lends to a maximum
loan-to-value of:

 •    70% for investment loans;
 •    60% for residential development loans(1);
 •    65% for certain residential higher leveraged development loans(1), which is
      subject to an overall cap on such lending agreed by management according to
      risk appetite; and
 •    65% for commercial development loans(1).

This remains unchanged from prior periods.

1. Based on gross development value.

20.  Capital risk (unaudited)

Capital risk is the risk that the Group will have insufficient capital
resources to meet minimum regulatory requirements and to support the business.
The Group adopts a conservative approach to managing its capital and at least
annually assesses the robustness of the capital requirements as part of the
Group's Internal Capital Adequacy Assessment Process ('ICAAP'). The Group has
Tier 1 and Tier 2 capital resources, noting the regulatory adjustments
required in the table below.

The following table shows the regulatory capital resources for the Group:

                                                                          Unaudited   Unaudited   Unaudited

30 June
30 June
31 December 2024

2025
2024
£million

£million
£million
 Tier 1
 Share capital                                                            7.6         7.6         7.6
 Share premium                                                            84.0        84.0        84.0
 Retained earnings                                                        284.3       265.3       271.1
 Own shares                                                               (1.9)       (1.2)       (2.2)
 IFRS 9 transition adjustment (See below for further details)             -           -           0.1
 Goodwill                                                                 (1.0)       (1.0)       (1.0)
 Intangible assets net of attributable deferred tax                       (3.7)       (4.3)       (4.0)
 Common Equity Tier 1 ('CET 1') capital before foreseeable dividend       369.3       350.4       355.6
 Foreseeable dividend                                                     (2.2)       (2.2)       (4.2)
 CET 1 capital                                                            367.1       348.2       351.4

 Tier 2
 Subordinated liabilities                                                 89.4        89.2        89.3
 Less ineligible portion                                                  (23.8)      (27.7)      (25.0)
 Total Tier 2 capital¹                                                    65.6        61.5        64.3
 Own funds                                                                432.7       409.7       415.7

 Reconciliation to total equity:
 IFRS 9 transition adjustment                                             -           -           (0.1)
 Eligible subordinated liabilities                                        (65.6)      (61.5)      (64.3)
 Cash flow hedge reserve                                                  0.1         (0.2)       -
 Goodwill and other intangible assets net of attributable deferred tax    4.7         5.3         5.0
 Foreseeable dividend                                                     2.2         2.2         4.2
 Total equity                                                             374.1       355.5       360.5

1. Tier 2 capital comprises solely subordinated debt, excluding accrued
interest, capped at 25% of the Pillar 1 and 2A requirements as set by the PRA.

The Group elected to adopt the IFRS 9 transitional rules. The initial IFRS 9
transitional adjustment ended in 2022. The 'quick fix' part of the relief, for
increases in provisions since 1 January 2020, except where these provisions
relate to defaulted accounts, were added back to eligible capital (net of
attributable deferred tax) at 25% in 2024. This relief ended on 1 January
2025.

The Group's regulatory capital is divided into:

 •    CET 1 capital, which comprises shareholders' funds, after adding back the IFRS
      9 transition adjustment (where applicable) and deducting qualifying intangible
      assets, both of which are net of attributable deferred tax.
 •    Tier 2 capital, which is solely subordinated debt net of unamortised issue
      costs, capped at 25% of the capital requirement.

The Group operates the standardised approach to credit risk, whereby risk
weightings are applied to the Group's on and off-balance sheet exposures. The
weightings applied are those stipulated in the Capital Requirements
Regulation.

The Group is subject to capital requirements imposed by the PRA on all
financial services firms. During the periods, the Group complied with these
requirements.

21.  Fair value of loans and advances to customers and deposits from
customers

The fair value of loans and advances to customers and deposits from customers
is set out below.

 

                                  Unaudited         Unaudited   Unaudited         Unaudited Fair  Audited Carrying amount  Audited

Carrying amount
Fair
Carrying amount
value
31 December
Fair

30 June
value
30 June
30 June
2024
value

2025
30 June
2024
2024
£million
31 December

£million
2025
£million
£million
2024

£million
£million
 Loans and advances to customers  3,828.8            3,836.4    3,421.6           3,385.3         3,608.5                  3,612.3
 Deposits from customers          3,510.1            3,510.7    3,042.7           3,033.6         3,244.9                  3,254.0

Derivatives are carried at fair value. All other assets and liabilities are
carried at amortised cost.

22.  Events after the end of the reporting period

On 2 July 2025, the Group announced that it would cease new lending in Vehicle
Finance and continue to service existing consumers until the end of their
agreement, or in the case of Stock Funding customers, transition lending
facilities to other providers. As a result of this decision, some roles within
the business are expected to be at risk. At this point in time, the
consultation process with impacted employees is at an early stage.

On 1 August 2025, the Supreme Court gave its judgment on the historical use of
commission arrangements in the motor finance industry. Following this the FCA
announced it would consult with the industry on a compensation scheme for
motor finance customers who have been treated unfairly. Note 13.1 provides
further detail on the impact to the Group.

There have been no other material events after the end of the reporting period
that require disclosure.

Appendix to the Interim Report (unaudited)
Key performance indicators and other alternative performance measures

All key performance indicators are based on continuing operations, unless
otherwise stated.

(i) Net interest margin, net revenue and risk adjusted margin ratios

Net interest margin is calculated as net interest income for the financial
period as a percentage of the average loan book. Risk adjusted margin is
calculated as risk adjusted income for the financial period as a percentage of
the average loan book. Net revenue margin is calculated as operating income
for the financial period as a percentage of the average loan book. The
calculation of the average loan book is the average of the monthly balance of
loans and advances to customers, net of provisions, over seven or 13 months.
The resulting ratios for June 2025 are multiplied by 365/181, and June 2024
are multiplied by 366/182 to give an annual equivalent comparable to the
annual results:

 Group                          June        June        December

2025
2024
2024

£million
£million
£million
 Net interest income            99.0        88.2         184.9
 Net fee and commission income  7.3         7.9         19.0
 Operating income               106.3       96.1        203.9
 Opening loan book              3,608.5     3,315.3      3,315.3
 Closing loan book              3,828.8     3,421.6      3,608.5
 Average loan book              3,707.9     3,360.7      3,413.9
 Net revenue margin             5.8%        5.8%        6.0%
 Net interest margin            5.4%        5.3%        5.4%

 

 Retail Finance                                            June        June        December

2025
2024
2024

£million
£million
£million
 Net interest income                                       47.6        41.2        86.8
 Average loan book                                         1,377.8     1,255.1      1,285.9
 Net interest margin                                       7.0%        6.6%        6.8%
 Net interest income                                       47.6        41.2        86.8
 Net fee and commission income                             1.4         1.5         3.2
 Net impairment charge on loans and advances to customers  (9.5)       (4.4)       (13.3)
 Risk adjusted income                                      39.5        38.3        76.7
 Risk adjusted margin                                      5.8%        6.1%        6.0%

 

 Vehicle Finance                                                  June        June        December

2025
2024
2024

£million
£million
£million
 Net interest income                                              26.0        22.5        47.6
 Average loan book                                                572.7       478.0       505.4
 Net interest margin                                              9.2%        9.5%        9.4%
 Net interest income                                              26.0        22.5        47.6
 Net fee and commission income                                    0.6         0.9         0.8
 Net impairment charge on loans and advances to customers         (16.0)      (20.9)      (38.7)
 Other gains/(losses): gains on modification of financial assets  -           0.1         0.1
 Risk adjusted income                                             10.6        2.6         9.8
 Risk adjusted margin                                             3.7%        1.1%        1.9%

 

 Real Estate Finance                                       June        June        December

2025
2024
2024

£million
£million
£million
 Net interest income                                       16.4        16.2        32.6
 Net fee and commission income                             0.2         0.3         0.4
 Operating income                                          16.6        16.5        33.0
 Net impairment charge on loans and advances to customers  (4.7)       (2.9)       (4.0)
 Risk adjusted income                                      11.9        13.6        29.0
 Average loan book                                         1,405.8     1,263.7      1,269.5
 Net revenue margin                                        2.4%        2.6%        2.6%
 Risk adjusted margin                                      1.7%        2.2%        2.3%

 

 Commercial Finance                                        June        June        December

2025
2024
2024

£million
£million
£million
 Net interest income                                       5.7         6.2         12.2
 Net fee and commission income                             5.2         5.2         14.5
 Operating income                                          10.9        11.4        26.7
 Net impairment charge on loans and advances to customers  (0.7)       -           (5.9)
 Risk adjusted income                                      10.2        11.4        20.8
 Average loan book                                         351.6       364.1       353.0
 Net revenue margin                                        6.3%        6.3%        7.6%
 Risk adjusted margin                                      5.9%        6.3%        5.9%

These ratios show the net return on our lending assets, with and without,
adjusting for cost of risk.

(ii) Return on average equity

Total return on average equity is calculated as the total profit after tax for
the financial period as a percentage of average equity. Adjusted return on
average equity is calculated as the adjusted profit after tax for the
financial period as a percentage of average equity. Average equity is
calculated as the average of the monthly equity balances. The resulting ratios
for June 2025 are multiplied by 365/181, and June 2024 are multiplied by
366/182 to give an annual equivalent comparable to the annual results:

                                    June        June        December

2025
2024
2024

£million
£million
£million
 Total profit after tax             16.7        12.8        19.7
 Less:
 Exceptional items after tax        0.8         -           8.9
 Adjusted profit after tax          17.5        12.8        28.6
 Opening equity                     360.5       344.5       344.5
 Closing equity                     374.1       355.5       360.5
 Average equity                     368.0       350.9       355.3
 Total return on average equity     9.2%        7.3%        5.5%
 Adjusted return on average equity  9.6%        7.3%        8.0%

Return on average equity is a measure of the Group's ability to generate
profit from the equity available to it.

(iii) Cost to income ratio

Statutory cost to income ratio is calculated as total operating expenses for
the financial period as a percentage of operating income for the financial
period. Adjusted cost to income ratio is calculated as adjusted operating
expenses for the financial period as a percentage of operating income for the
financial period.

                                 June        June        December

2025
2024
2024

£million
£million
£million
 Total operating expenses        53.2        51.6        113.7
 Less: Exceptional items         (1.0)       -           (9.9)
 Adjusted operating expenses     52.2        51.6        103.8
 Operating income                106.3       96.1        203.9
 Statutory cost to income ratio  50.0%       53.7%       55.8%
 Adjusted cost to income ratio   49.1%       53.7%       50.9%

The cost to income ratio measures how efficiently the Group is utilising its
cost base to produce income.

(iv) Cost of risk

Cost of risk is calculated as the net impairment charge on loans and advances
to customers and gains and losses on modification of financial assets for the
financial period as a percentage of the average loan book. The resulting
ratios for June 2025 are multiplied by 365/181, and June 2024 are multiplied
by 366/182 to give an annual equivalent comparable to the annual results:

                                                                  June        June        December

2025
2024
2024

£million
£million
£million
 Net impairment charge on loans and advances to customers         30.9        28.2        61.9
 Other gains/(losses): gains on modification of financial assets  -           (0.1)       (0.1)
 Total                                                            30.9        28.1        61.8
 Average loan book                                                3,707.9     3,360.7      3,413.9
 Cost of risk                                                     1.7%        1.7%        1.8%

The cost of risk measures how effective the Group has been in managing the
credit risk of its lending portfolios.

(v) Cost of funds

Cost of funds is calculated as the interest expense for the financial period
expressed as a percentage of average loan book. The resulting ratios for June
2025 are multiplied by 365/181, and June 2024 are multiplied by 366/182 to
give an annual equivalent comparable to the annual results:

                                       June        June        December

2025
2024
2024

£million
£million
£million
 Interest expense and similar charges  88.8        90.4        181.1
 Average loan book                     3,707.9     3,360.7      3,413.9
 Cost of funds                         4.8%        5.4%        5.3%

The cost of funds measures the cost of money being lent to customers.

(vi) Funding ratio and loan to deposit ratio

The funding ratio is calculated as the total funding at the end of the period,
divided by the loan book at the end of the period. The loans to deposit ratio
is calculated as loans and advances to customers at the end of the period
divided by deposits from customers at the end of the period:

                                                                                 June        June        December

2025
2024
2024

£million
£million
£million
 Deposits from customers                                                         3,510.1     3,042.7     3,244.9
 Borrowings under the Bank of England's liquidity support operations (including  251.8       350.2       358.9
 accrued interest)
 Tier 2 capital (including accrued interest)                                     93.3        93.1        93.3
 Equity                                                                          374.1       355.5       360.5
 Total funding                                                                   4,229.3     3,841.5      4,057.6
 Loans and advances to customers                                                 3,828.8     3,421.6      3,608.5
 Funding ratio                                                                   110.5%      112.3%      112.4%
 Loan to deposit ratio                                                           109.1%      112.5%      111.2%

The funding ratio and loan to deposit ratio measures the Group's excess of
funding that provides liquidity.

(vii) Profit before tax pre impairments

Profit before tax pre impairments is profit before tax, excluding impairment
charges and gains on modification of financial assets.

                                                                             June        June        December

2025
2024
2024

£million
£million
£million
 Profit before income tax                                                    22.3        17.1        29.2
 Excluding: net impairment charge on loans and advances to customers         30.9        28.2        61.9
 Excluding: Other gains/(losses): gains on modification of financial assets  -           (0.1)       (0.1)
 Profit before tax pre impairments                                           53.2        45.2        91.0
 Exceptional items                                                           1.0         -           9.9
 Adjusted profit before tax pre impairments                                  54.2        45.2        100.9

Profit before tax pre impairments measures the operational performance of the
business.

(viii) Tangible book value per share

Tangible book value per share is calculated as the total equity less
intangible assets divided by the number of shares in issue at the end of the
period:

                                                     June        June        December

2025
2024
2024

£million
£million
£million
 Total equity                                        374.1       355.5       360.5
 Less: Intangible assets                             (4.7)       (5.3)       (5.0)
 Tangible book value                                 369.4       350.2       355.5
 Number of shares in issue at the end of the period  19,073,729  19,068,915   19,071,408
 Tangible book value per share                       £19.37      £18.36      £18.64

Tangible book value is a measure of the Group's value per share.

Directors' responsibility statement

The Directors confirm that, to the best of their knowledge:

 ●    the Interim Financial Statements have been prepared in accordance with United
      Kingdom-adopted International Accounting Standard 34 - 'Interim Financial
      Reporting', issued by the IASB and give a true and fair view of the assets,
      liabilities, financial position and profit of the undertakings included in the
      consolidation as a whole;
 ●    the Interim Business Report includes a fair review of the information required
      by Section 4.2.7R of the Disclosure Guidance and Transparency Rules, issued by
      the Financial Conduct Authority (that being an indication of important events
      that have occurred during the first six months of the current financial year
      and their impact on the condensed financial statements and a description of
      the principal risks and uncertainties for the remaining six months of the
      financial year); and
 ●    the Interim Business Report includes a fair review of the information required
      by Section 4.2.8R of the Disclosure Guidance and Transparency Rules, issued by
      the Financial Conduct Authority (that being disclosure of related party
      transactions that have taken place in the first six months of the current
      financial year and that have materially affected the financial position or the
      performance of the enterprise during that period; and any changes in the
      related party transactions described in the last annual report which could do
      so).

Approved by the Board of Directors and signed on behalf of the Board.

 Jim Brown  David McCreadie

 Chair      Chief Executive Officer

Independent review report to Secure Trust Bank PLC
Conclusion

We have been engaged by the Company to review the condensed set of financial
statements in the Interim Financial Statements for the six months ended 30
June 2025, which comprises the: Condensed consolidated statement of
comprehensive income; Condensed consolidated statement of financial position;
Condensed consolidated statement of changes in equity; Condensed consolidated
statement of cash flows; and related Notes 1 to 22.

Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the Interim
Financial Statements for the six months ended 30 June 2025 is not prepared, in
all material respects, in accordance with United Kingdom-adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ('ISRE (UK) 2410'). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.

As disclosed in Note 1.2, the annual financial statements of the Group are
prepared in accordance with United Kingdom- adopted international accounting
standards. The condensed set of financial statements included within this
Interim Financial Statements has been prepared in accordance with United
Kingdom-adopted International Accounting Standard 34, 'Interim Financial
Reporting'.

Conclusion relating to going concern

Based on our review procedures, which are less extensive than those performed
in an audit, as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the Directors have
inappropriately adopted the going concern basis of accounting or that the
Directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however, future events or conditions may cause the entity to
cease to continue as a going concern.

Responsibilities of the Directors

The Directors are responsible for preparing the Interim Financial Statements
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.

In preparing the Interim Financial Statements, the Directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting, unless the Directors either intend to liquidate the
Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the review of the financial information

In reviewing the Interim Financial Statements, we are responsible for
expressing to the Group a conclusion on the condensed set of financial
statements in the Interim Financial Statements. Our conclusion, including our
conclusion relating to going concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for conclusion
paragraph of this report.

Use of our report

This report is made solely to the Company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the Company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company, for our review work,
for this report, or for the conclusions we have formed.

Deloitte LLP

Statutory Auditor

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