REG - Vanquis Banking Grp - Interim Results for six months ended 30 June 2025
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RNS Number : 3155U Vanquis Banking Group PLC 07 August 2025
Vanquis Banking Group interim results for the six months ended 30 June 2025
Profitable and growing
London - 7 August 2025 - Vanquis Banking Group plc ('the Group' or 'Vanquis')
today published its interim results for the six months to 30 June 2025.
Ian McLaughlin, Chief Executive Officer, commented: "The turnaround of Vanquis
remains firmly on track and is gaining momentum. The Group delivered two
consecutive quarters of profitability in the first half and has grown gross
customer interest-earning balances over the last three quarters.
Credit quality remains robust, with customers continuing to demonstrate
financial resilience. Risk-adjusted income improved, supported by a lower cost
of risk.
Operating costs remained well controlled, with all necessary actions taken to
deliver the additional £15 million in transformation savings committed by
year-end 2025. Our technology transformation programme, Gateway, is
progressing as planned-enhancing efficiency, scalability, and unlocking
long-term cost benefits.
Complaint costs were meaningfully lower year-on-year, partly reflecting the
revised Financial Ombudsman Service (FOS) fee structure implemented on 1 April
2025. Since then, negligible Vanquis-related Claims Management Company (CMC)
complaints have been referred to the FOS.
The recent Supreme Court judgment provides much-needed clarity, and we
acknowledge the FCA's decision to consult on a motor finance compensation
scheme. Vanquis did not participate in discretionary commission arrangements.
Our position is clearly differentiated from the unfair relationship decision
in the Johnson case, supported by stronger disclosures, much lower average
commissions and clear customer consent.
Vanquis plays an important role in UK banking, and I am pleased with the
momentum we are building. We remain focused on supporting our customers while
delivering sustainable and profitable growth for all stakeholders."
Executive Summary
The Group returned to profit in 1H25, while delivering balance growth to drive
long-term sustainable profitability. Management remains focused on operational
efficiency and deploying capital in the most accretive opportunities to
generate higher returns.
· Profitability: The Group was profitable in both quarters of 1H25,
delivering a statutory profit before tax from continuing operations of £6.2m
(1H24: loss of £46.1m) and was capital accretive with a statutory return on
tangible equity (ROTE) of 3.1% (1H24: (18.9)%), in line with the guidance of
low single digit ROTE for 2025.
· Balance growth: Gross customer interest-earning balances grew 7% in
1H25 to £2,459m and the Group now expects to achieve greater than £2.6bn of
balances by the end of 2025 (c.£2.6bn previously).
· Increased risk adjusted income: Improved credit quality drove a
reduction in cost of risk to 6.6% (1H24: 8.5%), resulting in a 7% increase in
risk adjusted income to £143.6m.
· Cost discipline: Further transformation cost savings, lower complaint
costs and the non-repeat of notable items improved the statutory cost: income
ratio to 62.5% (1H24: 79.3%), and the Group remains on track to achieve a high
50s percent cost: income ratio for FY25.
· Complaints: Complaint costs reduced 36% year-on-year to £16.1m, with
FOS fees reducing £8.6m to £4.5m. 1Q25 complaint costs were in line with
expectations, with a lower run rate from 2Q25, as expected following the
implementation of the revised FOS fee structure. The Group expects 2H25
complaint costs to be lower than 1H25.
· Vehicle Finance commission disclosures: Vanquis did not participate
in discretionary commission arrangements (DCAs), so the Group would not be in
scope for this element of any Financial Conduct Authority (FCA) motor finance
compensation scheme. Whilst the FCA intends to consult on the inclusion of
certain non-discretionary commission arrangements following the unfair
relationship Supreme Court decision in the Johnson case, Vanquis believes its
position is clearly differentiated on a number of grounds. These include, but
are not limited to, the fact the Group provided significantly better
commission disclosures than those in Johnson, with substantially lower average
commissions relative to the charge for credit. Vehicle Finance customers also
signed pre-contractual documentation confirming that a commission would be
paid. As a result, and in accordance with IAS 37, the Group has not provided
for this matter but has disclosed a contingent liability.
· Robust liquidity, funding and capital: The Group remained highly
liquid, with a Liquidity Coverage Ratio (LCR) of 366% (December 2024: 359%),
was 84.6% (December 2024: 85.6%) retail funded, a core strength of the Group,
and had a Tier 1 capital ratio of 18.5% (December 2024: 18.8%), with
sufficient capital for future growth.
Group financial results
Income Statement (£m) 1H25 2H24 1H24 HoH YoY
(Re-presented(1)) (Re-presented(1)) Change % Change %
Interest income 274.9 273.9 276.0 - -
Interest expense (72.7) (73.3) (68.7) (1) 6
Net interest income 202.2 200.6 207.3 1 (2)
Non-interest income 17.5 19.0 19.5 (8) (10)
Total income 219.7 219.6 226.8 - (3)
Impairment charges (76.1) (92.3) (93.0) (18) (18)
Risk-adjusted income 143.6 127.3 133.8 13 7
Operating costs (137.4) (219.2) (179.9) (37) (24)
Profit/(loss) before tax from continuing operations 6.2 (91.9) (46.1)
Tax (charge)/credit (1.3) 6.8 10.6
Profit/(loss) after tax from continuing operations 4.9 (85.1) (35.5)
Profit/(loss) after tax from discontinued operations 0.7 1.6 (0.3)
Statutory profit/(loss) after tax 5.6 (83.5) (35.8)
Balance Sheet (£m) Jun-25 Dec-24 Jun-24 HoH YoY
Change % Change %
Gross customer interest-earning balances 2,459 2,308 2,252 7 9
Average gross customer interest-earning balances (excluding Personal Loans) 2,339 2,208 2,201 6 6
Gross receivables 2,570 2,416 2,361 6 9
Net receivables 2,325 2,155 2,010 8 16
Closing tangible net asset value (TNAV)(10) 362 358 371 1 (3)
Average tangible equity(8) 361 362 382 (-) (5)
Selected key metrics (%) 1H25 2H24 1H24 HoH YoY
(Re-presented(1)) (Re-presented(1)) Change Change
Asset yield(2) 21.8 22.4 23.2 (0.6) (1.4)
Net interest margin (NIM)(3) 17.4 18.1 18.9 (0.7) (1.5)
Total income margin (TIM)(4) 18.9 19.8 20.7 (0.9) (1.8)
Cost of risk(5) (6.6) (8.3) (8.5) 1.7 1.9
Risk-adjusted margin (RAM)(6) 12.4 11.5 12.2 0.9 0.2
Statutory cost: income ratio(7) 62.5 99.8 79.3 (37.3) (16.8)
Statutory ROTE(8) 3.1 (45.9) (18.9)
Selected per share metrics (p) HoH Change % YoY
Change %
Basic earnings per share (EPS)(9) 2.2 (32.6) (14.1)
Dividend per share - - - - -
TNAV per share(10) 142 140 146 1 (3)
Notable items (£m) Account line Jun-25 Dec-24 Jun-24
Goodwill write-off Operating costs - (71.2) -
Transformation and other exceptional costs Operating costs - (8.6) (15.5)
Amortisation of acquisition intangibles Operating costs - (2.0) (4.2)
Vehicle Finance receivables review Income - (1.4) (3.1)
Impairment - (5.4) (9.7)
Other one-off cost items Operating costs - - (10.2)
Total notable items - (88.6) (42.7)
1H25 Financial Highlights
Income Statement
All commentary relates to year-on-year performance unless otherwise stated.
Income
· Net interest income decreased 2% to £202.2m and total income
reduced 3% to £219.7m, driven largely by higher year-on-year cost of funds.
o Interest income was broadly flat at £274.9m, reflecting a 6% increase in
average gross customer interest-earning balances to £2,339m offset by the mix
effect of growing lower-risk and lower-margin Second Charge Mortgages.
§ Asset yield decreased 140bps to 21.8%, reflecting the lower yield on Second
Charge Mortgages. Credit Cards yield reduced marginally, reflecting growth in
0% balance transfer (BT) and promotional products, while Vehicle Finance yield
improved.
o Interest expense increased 6% year-on-year to £72.7m, but reduced 1%
half-on-half, reflecting a peak in cost of funds in 2H24 when maturing fixed
term deposits were refinanced at higher market rates.
o The combination of these factors drove a reduction in NIM to 17.4% (1H24:
18.9%).
o Non-interest income reduced 10% to £17.5m reflecting lower fee and
commission income.
Impairment
· Impairment charges reduced 18% to £76.1m driven by the
non-repeat of the £9.7m prior year impact of the Vehicle Finance receivables
review. Credit risk in the underlying book improved, with reduced adverse
stage migrations.
o Net charge-offs, calculated as gross charge-offs less recoveries,
increased 4% to £93.5m.
o Impairment charges driven by originations increased 21% to £25.7m,
reflecting growth in new gross customer interest-earning balances.
o Net risk movements from stage migrations and changes in post model
adjustments (PMAs) resulted in a lower net increase in impairment of £51.9m
(1H24: £82.4m). This was partially offset by lower releases from write-offs
and debt sales, reducing impairment by £89.4m (1H24: £97.3m).
o Cost of risk reduced 190bps to 6.6%.
· As a result, risk adjusted income improved 7% to £143.6m,
driving a 20bps improvement in risk adjusted margin to 12.4%.
Operating costs
· Operating costs decreased 24% to £137.4m.
o This reflected the non-repeat of £29.9m of prior year cost notable items,
including £15.5m of transformation and other exceptional costs and £10.2m of
other one-off costs largely relating to the write-off of a legacy mobile app.
o The remaining £12.6m reduction reflected £8.9m lower complaint costs,
and continued transformation savings of £7.9m, more than offsetting growth
and inflation driven cost increases and accruals for discretionary staff
costs.
o This delivered a statutory cost: income ratio of 62.5% (1H24: 79.3%).
Profits
· Profit before tax from continuing operations was £6.2m (1H24:
loss of £(46.1)m).
· The tax charge of £1.3m (1H24: credit of £10.6m) broadly
reflected the mainstream UK corporation tax rate of 25.0% on the profit before
tax from continuing operations.
· Profit after tax from continuing operations was £4.9m (1H24:
loss of £(35.5)m).
· Profit after tax from discontinued operations was £0.7m (1H24:
loss of £(0.3)m), related to the Personal Loans portfolio, the sale of which
completed at the end of 1Q25.
· Statutory profit after tax was £5.6m (1H24: loss of £(35.8)m)
and ROTE was 3.1% (1H24: (18.9)%).
Balance Sheet
£m Jun-25 Dec-24 Jun-24 HoH YoY
Change % Change %
Assets
Cash and balances at central banks 805 1,004 773 (20) 4
Amounts receivable from customers (net receivables) 2,325 2,154 2,009 8 16
Pension asset 13 28 34 (54) (62)
Goodwill and other intangibles 64 63 133 2 (52)
Other assets 240 126 136 90 76
Total assets 3,447 3,375 3,085 2 12
Liabilities
Retail deposits 2,464 2,428 1,938 1 27
Bank and other borrowings 448 410 504 9 (11)
Trade and other payables 56 46 50 22 12
Other liabilities 44 50 63 (12) (30)
Total liabilities 3,012 2,934 2,555 3 18
All commentary is relative to the December 2024 balance sheet, unless
otherwise stated.
· Gross customer interest-earning balances increased 7% to
£2,459m:
o Credit Card balances increased 6% to £1,355m, all in 2Q25 following
stable balances in 1Q25, reflecting both credit line increases of existing
customers, and new customer growth following the release of new product
variants.
o Vehicle Finance balances declined 4% to £733m, in line with expectations,
ahead of the launch of our new onboarding and servicing platform in mid-2026
as part of the Gateway technology transformation.
o Second Charge Mortgage balances grew to £371m (December 2024: £217m)
driven by long-term forward flow origination agreements with partners.
o Personal Loan balances reduced to nil (December 2024: £49m) following the
sale of the portfolio at the end of 1Q25.
· Net receivables increased 8% to £2,325m, driven by growth in
interest-earning balances and a 5% reduction in expected credit losses (ECL)
to £245m, reflecting a clearer understanding of the credit risk of the
portfolios.
· Total assets increased 2% to £3,447m, driven by the 8% increase
in net receivables.
· Cash and balances at central banks reduced 20% to £805m, driven
largely due to increased purchases of UK Government securities, as part of our
strategy to diversify the Liquid Asset Buffer beyond Bank of England (BoE)
deposits. This drove the 90% increase in other assets, which rose to £239m.
Most of the remaining cash continued to represent high quality liquid assets
(HQLA) placed with the BoE.
· The pension asset reduced to £13m (December 2024: £28m),
reflecting the preliminarily results from the most recent Scheme valuation and
updated market assumptions.
· Liabilities increased 3% to £3,012m, as retail deposits,
inclusive of accrued interest, increased 1% to £2,464m, driven by continued
optimisation of retail funding through a broader product range, including
Individual Savings Accounts (ISAs), and distribution reach through the Snoop
brand.
· Bank and other borrowings increased 9% to £447m driven by
increased utilisation of the Indexed Long-Term Repo (ILTR) facility as part of
the Sterling Monetary Framework.
Capital, Liquidity and Funding
Jun-25 Dec-24 Jun-24 HoH YoY
Change Change
Tier 1 ratio (%)(11) 18.5 18.8 19.8 (0.3) (1.3)
Risk weighted assets (RWAs) (£m) 1,883 1,835 1,813 3% 4%
High quality liquid assets (HQLA) (£m) 873 947 717 (8)% 22%
Liquidity coverage ratio (LCR) (%) 366 359 557 (7) (191)
Retail deposits (£m) 2,424 2,399 1,912 1% 27%
Retail funding (% of all funding)(12) 84.6 85.6 79.3 (1.0) 5.3
All commentary is relative to the December 2024 capital liquidity and funding
positions, unless otherwise stated.
Capital
· Tier 1 capital ratio reduced 30bps to 18.5%. Capital accretion from
the statutory profit after tax and a 40bps improvement from the Personal Loans
portfolio sale was more than offset by growth driving a 3% increase in RWAs to
£1,883m.
o This represented a surplus of £96m of Tier 1 capital above the Group's
disclosed Tier 1 capital requirement and regulatory combined buffers of 13.4%.
o Tier 1 capital increased to £348m (December 2024: £344m).
o The reduction in the ratio included the deployment of £104m of Credit
Risk RWAs, including in Credit Cards and lower RWA density Second Charge
Mortgages, in addition to intangible spend of £7m. This capital investment
reduced the ratio by 150bps.
· The Group's leverage ratio of 12.5% (December 2024: 13.9%) remains
comfortably above the minimum requirement.
Liquidity
· The liquidity buffer of £873m (December 2024: £947m) included
c.£115m invested in UK gilts, with the remainder held in the BoE reserve
account. This resulted in excess liquidity over the LCR 100% minimum of
£619m (December 2024: £667m), reflecting an LCR of 366% (December 2024:
359%).
Funding
· Retail deposits increased 1% to £2,424m, delivering funding at an
attractive cost of funds compared to wholesale alternatives. Within the
retail deposit base, fixed-term products reduced 9% to £1,285m, retail notice
accounts reduced 10% to £544m and easy access accounts reduced 12% to
£329m. These reductions were replaced by £265m of Individual Savings
Accounts (ISAs) (December 2024: £6m), as the Group broadened its product
range to optimize the cost of funds.
· The Group remains primarily funded by retail deposits, at 84.6%
(December 2024: 85.6%) of total funding including Tier 2 capital.
· Ongoing funding diversification is provided by Tier 2 capital, modest
levels of private securitisation secured by Vehicle Finance assets, and access
to Central Bank facilities collateralised using Credit Card assets.
· The Group's cost of funds reduced to 5.3% (December 2024: 5.5%),
reflecting the reduced rate outlook and maturing fixed-term deposits being
refinanced with lower interest rate savings products.
Outlook and Guidance
The Group's financial guidance for 2025 and 2026 remains unchanged, except for
gross customer interest-earning balances in 2025. The Group now expects to
achieve greater than £2.6bn of balances by the end of 2025 (c.£2.6bn
previously).
2025 Statutory Guidance 2026 Statutory Guidance
Gross customer interest-earning balances >£2.6bn c.£3.0bn
ROTE Low single digits Low double digits
NIM >17% >16%
Cost: income ratio High 50s Low 50s
Tier 1 ratio >17.5%
In 2027, continue to guide to mid-teens ROTE and a cost: income ratio of 49%
or lower.
As announced with FY24 results, the Group has transitioned to reporting solely
on a statutory basis. Accordingly, the guidance outlined above is on a
statutory basis.
Capital Management and Dividend
· With the focus on deploying capital to support growth initiatives,
the Board of Directors has decided not to declare a dividend for 1H25 (1H24:
no dividend).
· The Board intends to revisit the capital allocation framework and
dividend policy following full delivery of the strategy in 2026.
1H25 Operational Highlights
Customer proposition and insightful risk management update
· Credit Cards: Launched new product variants, offering customers more
tailored options to meet diverse financial needs.
· Vehicle Finance: Enhanced credit decisioning, improving the speed and
accuracy of lending decisions.
· Second Charge Mortgages: Maintained strong growth, supporting more
customers through a forward flow agreement with Interbridge Mortgages and a
partnership with Selina Finance.
· Savings: Strengthened cost-effective funding capabilities with an
expanded product range, including ISAs and the Snoop-branded easy access
product.
· Snoop: Active users rose 7% to 313k, with Vanquis customers up 12% to
42k. Snoop remains a cost-effective acquisition channel, with origination
costs around 10% of other channels, while offering valuable money management
tools.
· Fair Finance: Delivered positive outcomes for 'Not Yet' customers
through the referral programme, helping them access affordable credit and
nearly £10 million in unclaimed government benefits.
· Customer experience: Introduced a new service platform, enabling
faster, more personalised support and improving overall customer satisfaction.
Technology transformation, operational efficiency and people update
· Gateway transformation on track: A major milestone saw 30 billion
rows of customer, product, and decisioning data loaded onto our new IT
platform, significantly enhancing insight generation and decision-making
capabilities.
· Upcoming launches: Preparing to launch a new mobile app and a
smarter credit card onboarding and decisioning platform within the next three
months.
· Operational efficiency: Delivered improvements across debt sales,
fraud controls, and complaints handling through expanded use of digital tools,
AI, and self-service, and rationalised property footprint.
· Colleague engagement: Mid-year engagement score rose by 5
percentage points to 65%.
Update on External Factors
Complaints update
· Complaint costs reduced 36% year-on-year to £16.1m, with FOS fees
reducing £8.6m to £4.5m. 1Q25 complaint costs were in line with
expectations, with a lower run rate from 2Q25, as expected following the
implementation of the revised FOS fee structure. The Group expects 2H25
complaint costs to be lower than 1H25.
· Since the revised FOS fee structure was implemented on 1 April 2025,
Vanquis related CMC complaints referred to the FOS have been negligible.
o CMCs are charged an upfront fee of £250 for each claim submitted,
reducing to £75 for upheld cases.
o Lender fees have reduced from £650 per case to £475 for each case not
upheld.
· Vanquis continues to engage with regulators to address complaints
issues on an industry-wide basis.
· The Group supports the Government's planned changes to reform the
FOS.
· Following the successful strike out hearing outcome in the court case
against The Money Solicitor (TMS Legal Ltd.), the CMC responsible for the most
unmerited claims in recent years, legal proceedings now progress to trial.
Motor finance commission disclosures update
· The Group welcomes the clarity provided by the recent Supreme Court
Judgment regarding motor finance commission disclosure practices. The Supreme
Court concluded that motor dealers, when acting as credit brokers, do not owe
fiduciary duties to their customers.
· In the Johnson case, the Supreme Court found that an unfair
relationship existed between the lender and the borrower under section 140A of
the Consumer Credit Act 1974. However, the Court emphasized that the test for
unfairness is highly fact-sensitive, requiring assessment across a broad range
of circumstances.
· The Group acknowledges the FCA's intention to consult on a motor
finance compensation scheme. The FCA propose the scheme covers discretionary
commission arrangements (DCAs). Vanquis did not participate in DCAs and
would therefore not be in scope for this element of any scheme.
· Whilst the FCA also intend to consult on the inclusion of certain
non-discretionary commission arrangements following the unfair relationship
Supreme Court decision in the Johnson case, Vanquis believes its position is
clearly differentiated on a number of grounds. These include, but are not
limited to, the fact the Group provided significantly better commission
disclosures than those in Johnson, with substantially lower average
commissions relative to the charge for credit. Vehicle Finance customers
also signed pre-contractual documentation confirming that a commission will be
paid.
· As a result, the Group believes that any liability is limited and, as
such, in accordance with IAS 37, has not made a provision for this matter,
but has disclosed a contingent liability.
· The FCA has extended the timeline on Vehicle Finance commission
complaints, currently running until 4 December 2025, which is subject to
further extension.
· As of 4 August 2025, the Group had received approximately 16,700
complaints alleging an unfair relationship related to the commission amount -
out of around 62,000 total complaints under the extension. This marks an
increase from around 4,500 at the end of 2024, driven by heightened public
awareness following recent legal and regulatory developments.
· Around 99% of these complaints have been submitted by CMCs.
· The Group has successfully defended 46 out of 49 Vehicle Finance
commission court cases. Additionally, over 400 decisions at the FOS
Adjudicator level have been in the Group's favour, with no adverse outcomes to
date.
· Vanquis remains confident in its position and continues to assess
each complaint on its individual merits.
Results webcast
Ian McLaughlin, CEO, and Dave Watts, CFO, will host a results webcast at 09:00
today. To register your attendance, please use this link:
https://webcast.openbriefing.com/vanquis-2025/
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwebcast.openbriefing.com%2Fvanquis-2025%2F&data=05%7C02%7CJames.Cranstoun%40vanquis.com%7C1d1f8a4786ef447e44d408dda9be0786%7C73984ebf3c4345de900f969cd50a6a65%7C0%7C0%7C638853356128785668%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=D0OQMEpSTrSlTHJ9%2Fzqd%2BWKcjanCr%2FYUEPbfRAihIEc%3D&reserved=0)
Materials for the results presentation have been published at: Results,
Reports and Presentations | Vanquis
(https://www.vanquis.com/investors/results-reports-presentations/)
(https://www.vanquisbankinggroup.com/shareholder-hub/results-reports-and-presentations/)
Enquiries
Investors and analysts
James Cranstoun, Head of Investor Relations
james.cranstoun@vanquis.com
+44 (0) 7766 937 406
Media
Scott Mowbray, Head of External Communications
scott.mowbray@vanquis.com
+44 (0) 7834 843 384
Victoria Ainsworth, Senior Director (Hawthorn Advisors)
vanquis@hawthornadvisors.com
+44 (0) 7894 995 886
Footnotes
1. The presentation of the income statement and selected key metrics
in this report is consistent with that in the Annual Report and Accounts for
31 December 2024, with the exception of the impact of the sale of the Personal
Loans portfolio, which is now recognised as a discontinued operation and the
re-segmentation of interest income, interest expense and operating costs by
product. Further details are included in the 2024 re-presentation document
at the following link: Vanquis-Banking-Group-2024-Re-presentation-Document.pdf
(https://www.vanquis.com/wp-content/uploads/2025/07/Vanquis-Banking-Group-2024-Re-presentation-Document.pdf)
.
2. Asset yield is calculated as interest income received from
customers for the period as a percentage of average gross customer
interest-earning balances for the 6 months ended 30 June and 31 December using
a 7 point month end average.
3. Net interest margin is calculated as interest income less interest
expense for the period as a percentage of average gross customer
interest-earning balances for the 6 months ended 30 June and 31 December using
a 7 point month end average.
4. Total income margin is calculated as total income for the period as
a percentage of average gross customer interest-earning balances for the 6
months ended 30 June and 31 December using a 7 point month end average.
5. Cost of risk is calculated as impairment charges for the period as
a percentage of average gross customer interest-earning balances for the 6
months ended 30 June and 31 December using a 7 point month end average.
6. Risk-adjusted margin is defined as risk-adjusted income for the
period as a percentage of average gross customer interest-earning balances for
the 6 months ended 30 June and 31 December using a 7 point month end average.
7. Cost: income ratio is calculated as operating costs as a percentage
of total income for the 6 months ended 30 June and 31 December.
8. ROTE is calculated as annualised statutory profit after tax for the
6 months ended 30 June and 31 December as a percentage of average tangible
equity for the 6 months ended 30 June and 31 December. Tangible equity is
stated as equity after deducting the Group's pension asset, net of deferred
tax, less intangible assets and goodwill.
9. Basic earnings per share is calculated as statutory profit after
tax for the 6 months ended 30 June and 31 December, divided by the weighted
average number of shares in issue.
10. TNAV per share is calculated as closing tangible net asset value,
divided by the period end number of shares in issue. Tangible net asset
value is stated as equity after deducting the Group's pension asset, net of
deferred tax, less intangible assets and goodwill.
11. The Tier 1 ratio is calculated as the ratio of the Group's Tier 1
capital as a percentage of the Group's risk-weighted assets measured in
accordance with the CRR.
12. Retail funding as a percentage of all funding has been restated to
include Tier 2 capital within the total on-balance sheet funding of the Group.
Forward looking statements
This report may contain certain "forward looking statements" regarding the
financial position, business strategy or plans for future operations of
Vanquis Banking Group. All statements other than statements of historical fact
included in this document may be forward looking statements. Forward looking
statements also often use words such as "believe", "expect", "estimate",
"intend", "anticipate" and words of a similar meaning. By their nature,
forward looking statements involve risk and uncertainty that could cause
actual results to differ from those suggested by them. Much of the risk and
uncertainty relates to factors that are beyond Vanquis Banking Group's ability
to control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should
not be placed on such statements which speak only as at the date of this
report. Vanquis Banking Group does not assume any obligation to, and does not
intend to, revise or update these forward-looking statements, except as
required pursuant to applicable law or regulation. No statement in this
announcement is intended as a profit forecast or estimate for any period. No
statement in this announcement should be interpreted to indicate a particular
level of profit and, as a consequence, it should not be possible to derive a
profit figure for any future period from this report.
Operating review
Segmental product performance
1H25 £m Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
Interest income 179.0 62.9 11.0 22.0 274.9
Interest expense (24.7) (14.3) (6.7) (27.0) (72.7)
Net interest income 154.3 48.6 4.3 (5.0) 202.2
Non-interest income 16.0 - 0.2 1.3 17.5
Total income 170.3 48.6 4.5 (3.7) 219.7
Impairment charges (64.0) (12.7) (0.2) 0.8 (76.1)
Risk-adjusted income 106.3 35.9 4.3 (2.9) 143.6
Operating costs (93.7) (34.5) (1.9) (7.3) (137.4)
Profit/(loss) before tax from continuing operations 12.6 1.4 2.4 (10.2) 6.2
2H24 (Re-presented) £m Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
Interest income 182.1 63.4 4.6 23.8 273.9
Interest expense (26.3) (15.7) (3.1) (28.2) (73.3)
Net interest income 155.8 47.7 1.5 (4.4) 200.6
Non-interest income 16.4 - - 2.6 19.0
Total income 172.2 47.7 1.5 (1.8) 219.6
Impairment charges (60.4) (30.9) (0.2) (0.8) (92.3)
Risk-adjusted income 111.8 16.8 1.3 (2.6) 127.3
Operating costs (93.0) (37.3) (0.4) (88.5) (219.2)
Profit/(loss) before tax from continuing operations 18.8 (20.5) 0.9 (91.1) (91.9)
1H24 (Re-presented) £m Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
Interest income 183.6 69.7 0.2 22.5 276.0
Interest expense (26.9) (15.7) (0.3) (25.8) (68.7)
Net interest income 156.7 54.0 (0.1) (3.3) 207.3
Non-interest income 18.6 - - 0.9 19.5
Total income 175.3 54.0 (0.1) (2.4) 226.8
Impairment charges (63.5) (29.5) - - (93.0)
Risk-adjusted income 111.8 24.5 (0.1) (2.4) 133.8
Operating costs (100.5) (42.8) (0.2) (36.4) (179.9)
Profit/(loss) before tax from continuing operations 11.3 (18.3) (0.3) (38.8) (46.1)
Credit Cards - Returned to balance growth in 2Q25, while adopting a risk-based
pricing approach
Six months ended (£m) Jun-25 Dec-24 Jun-24 HoH YoY
(Re-presented) (Re-presented) Change % Change %
Total customer numbers ('000) 1,290 1,267 1,321 2 (2)
Gross customer interest-earning balances 1,355 1,278 1,295 6 5
Average gross customer interest-earning balances(1) 1,296 1,284 1,339 1 (3)
Gross receivables 1,390 1,310 1,331 6 4
Net receivables 1,232 1,150 1,151 7 7
Interest income 179.0 182.1 183.6 (2) (3)
Interest expense (24.7) (26.3) (26.9) (6) (8)
Net interest income 154.3 155.8 156.7 (1) (2)
Non-interest income 16.0 16.4 18.6 (2) (14)
Total income 170.3 172.2 175.3 (1) (3)
Impairment charges (64.0) (60.4) (63.5) 6 1
Risk adjusted income 106.3 111.8 111.8 (5) (5)
Operating costs (93.7) (93.0) (100.5) 1 (7)
Profit before tax contribution 12.6 18.8 11.3 (33) 12
Asset yield (%)(2) 27.8 28.2 27.6 (0.4) 0.2
Net interest margin (%)(3) 24.0 24.1 23.5 (0.1) 0.5
Total income margin (%)(4) 26.5 26.7 26.3 (0.2) 0.2
Cost of risk (%)(5) (10.0) (9.4) (9.5) (0.6) (0.5)
Risk adjusted margin (%)(6) 16.5 17.3 16.8 (0.8) (0.3)
Cost: income ratio (%)(7) 55.0 54.0 57.3 1.0 (2.3)
(1) Average of gross customer interest-earning balances for the 6 months ended
30 June and 31 December using a 7 point month end average.
(2) Interest income from customer receivables for the 6 months ended 30 June
and 31 December as a percentage of average gross customer interest-earning
balances.
(3) Net interest income for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(4) Total income for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(5) Impairment charges for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(6) Total income less impairment charges for the 6 months ended 30 June and 31
December as a percentage of average gross customer interest-earning balances.
(7) Operating costs as a percentage of total income for the 6 months ended 30
June and 31 December.
All commentary relates to year-on-year performance unless otherwise stated.
Total customer numbers decreased 2% to 1,290k, but increased 2% from December
2024, reflecting a return to growth in 2Q25 following a comprehensive review
of customer cohorts by risk profile, vintage and acquisition channel to ensure
the future sustainable profitability of the portfolio.
Gross customer interest-earning balances increased 5% to £1,355m, all in 2Q25
following stable balances in 1Q25, reflecting both credit line increases of
existing customers, and new customer growth following the release of new
product variants.
Net receivables increased 7% to £1,232m, reflecting the growth in
interest-earning balances and a 12% reduction in ECL to £158m, driven by a
better quality portfolio, with increased balances in Stage 1 and 2 and a
reduction in Stage 3 balances.
Total income decreased 3% to £170.3m. Net interest income reduced 2% to
£154.3m, with non-interest income decreasing 14% to £16.0m. Net interest
margin increased 0.5% to 24.0% and total income margin increased 0.2% to
26.5%.
Interest income decreased 3% to £179.0m, consistent with a 3% reduction in
average gross customer interest-earning balances to £1,296m. Asset yield
increased 0.2% to 27.8%, driven by risk-based repricing initiatives and
despite growth in 0% balance transfers (BTs) and products.
Interest expense reduced 8% to £24.7m, driven by the lower funding need and
lower cost of funds, as the reduced rate outlook and maturing fixed-term
deposits were refinanced with lower interest rate savings products.
Impairment charges were broadly stable at £64.0m (1H24: £63.5m), reflecting
increased origination charges in line with growth in new gross customer
interest earning balances offset by an increased IFRS9 modelled impairment
benefit, as underlying credit quality improved. Cost of risk increased 0.5% to
10.0%.
Risk adjusted income decreased 5% to £106.3m, driving a 0.3% reduction in
risk adjusted margin to 16.5%.
Operating costs decreased 7% to £93.7m, driven by transformation cost savings
and lower complaint costs, more than offsetting growth and inflation driven
cost increases and an accrual for discretionary staff costs.
Profit before tax contribution increased 12% to £12.6m.
Vehicle Finance - Moderated new business growth, while product profitability
improved
Six months ended (£m) Jun-25 Dec-24 Jun-24 HoH YoY
(Re-presented) (Re-presented) Change % Change %
Total customer numbers ('000) 106 110 110 (4) (4)
Gross customer interest-earning balances 733 765 850 (4) (14)
Average gross customer interest-earning balances(1) 750 803 851 (7) (12)
Gross receivables 795 832 921 (4) (14)
Net receivables 709 735 760 (4) (7)
Interest income 62.9 63.4 69.7 (1) (10)
Interest expense (14.3) (15.7) (15.7) (9) (9)
Net interest income 48.6 47.7 54.0 2 (10)
Total income 48.6 47.7 54.0 2 (10)
Impairment charges (12.7) (30.9) (29.5) (59) (57)
Risk adjusted income 35.9 16.8 24.5 114 47
Operating costs (34.5) (37.3) (42.8) (8) (19)
Profit/(loss) before tax contribution 1.4 (20.5) (18.3)
Asset yield (%)(2) 16.9 15.7 16.5 1.2 0.4
Net interest margin (%)(3) 13.1 11.8 12.8 1.3 0.3
Total income margin (%)(4) 13.1 11.8 12.8 1.3 0.3
Cost of risk (%)(5) (3.4) (7.7) (7.0) 4.3 3.6
Risk adjusted margin (%)(6) 9.7 4.2 5.8 5.5 3.9
Cost: income ratio (%)(7) 71.0 78.2 79.3 (7.2) (8.3)
(1) Average of gross customer interest-earning balances for the 6 months ended
30 June and 31 December using a 7 point month end average.
(2) Interest income from customer receivables for the 6 months ended 30 June
and 31 December as a percentage of average gross customer interest-earning
balances.
(3) Net interest income for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(4) Total income for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(5) Impairment charges for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(6) Total income less impairment charges for the 6 months ended 30 June and 31
December as a percentage of average gross customer interest-earning balances.
(7) Operating costs as a percentage of total income for the 6 months ended 30
June and 31 December.
All commentary relates to year-on-year performance unless otherwise stated.
Total customer numbers decreased 4% to 106k, reflecting moderated new business
growth in the near-term in advance of the new onboarding and servicing
platform being delivered by mid-2026 as part of the Gateway technology
transformation. A new lending decision engine was introduced in 2024
enabling a more granular level of portfolio segmentation and delivered a
stronger platform to optimise higher-margin customer segments in 1H25.
Gross customer interest-earning balances decreased 14% to £733m, driven by
the combination of the prior year impact of the Vehicle Finance receivables
review resulting in an updated charge-off policy reclassifying Stage 3
impaired loans to post-charge-off assets, and the moderating of new business
growth.
Net receivables decreased 7% to £709m, reflecting the reduction in
interest-earning balances and a 46% reduction in ECL to £86m. ECL reduced
across stages given the reduction in balances, but particularly in Stage 3
driven by the reduction in impaired loans following the receivables review.
Total income decreased 10% to £48.6m, which represented all net interest
income. Net interest margin and total income margin increased 0.3%
respectively to 13.1%.
Interest income decreased 10% to £62.9m, consistent with a 12% reduction in
average gross customer interest-earning balances to £750m. The asset yield
increased 0.4% to 16.9%, driven by repricing initiatives.
Interest expense reduced 9% to £14.3m, driven by the lower funding need and
lower cost of funds, as the reduced rate outlook and maturing fixed-term
deposits were refinanced with lower interest rate savings products.
The prior year Vehicle Finance receivables review drove elevated impairment in
2024, resulting in a clearer cost of risk outlook for the portfolio.
Impairment charges decreased 57% to £12.7m, reflecting reduced origination
charges in line with the reduction in new gross customer interest-earning
balances and an increased IFRS9 modelled impairment benefit, as underlying
credit quality improved. Cost of risk reduced 3.6% to 3.4%.
Risk adjusted income increased 47% to £35.9m and risk adjusted margin
improved 3.9% to 9.7%.
Operating costs decreased 19% to £34.5m, driven by transformation cost
savings, more than offsetting growth and inflation driven cost increases and
an accrual for discretionary staff costs.
Profit before tax contribution was £1.4m (1H24: loss contribution of
£18.3m).
Second Charge Mortgages - Continued strong growth in a growing market
Six months ended (£m) Jun-25 Dec-24 Jun-24 HoH
(Re-presented) (Re-presented) Change %
Total customer numbers ('000) 6.3 3.7 0.6 70
Gross customer interest-earning balances 371 217 30 71
Average gross customer interest-earning balances(1) 293 121 11 142
Gross receivables 385 226 32 70
Net receivables 385 225 32 71
Interest income 11.0 4.6 0.2 139
Interest expense (6.7) (3.1) (0.3) 116
Net interest income 4.3 1.5 (0.1) 187
Non-interest income 0.2 - - 100
Total income 4.5 1.5 (0.1) 200
Impairment charges (0.2) (0.2) - -
Risk adjusted income 4.3 1.3 (0.1) 231
Operating costs (1.9) (0.4) (0.2) 375
Profit/(loss) before tax contribution 2.4 0.9 (0.3) 167
Asset yield (%)(2) 7.6 7.6 n/m -
Net interest margin (%)(3) 3.0 2.5 n/m 0.5
Total income margin (%)(4) 3.1 2.5 n/m 0.6
Cost of risk (%)(5) (0.1) (0.3) n/m 0.2
Risk adjusted margin (%)(6) 3.0 2.1 n/m 0.9
Cost: income ratio (%)(7) 42.2 26.7 n/m 15.5
(1) Average of gross customer interest-earning balances for the 6 months ended
30 June and 31 December using a 7 point month end average.
(2) Interest income from customer receivables for the 6 months ended 30 June
and 31 December as a percentage of average gross customer interest-earning
balances.
(3) Net interest income for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(4) Total income for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(5) Impairment charges for the 6 months ended 30 June and 31 December as a
percentage of average gross customer interest-earning balances.
(6) Total income less impairment charges for the 6 months ended 30 June and 31
December as a percentage of average gross customer interest-earning balances.
(7) Operating costs as a percentage of total income for the 6 months ended 30
June and 31 December.
All commentary relates to year-on-year performance unless otherwise stated.
Total customer numbers increased to 6.3k (June 2024: 0.6k) following the
successful growth of the forward flow agreement with Interbridge Mortgages and
expanded partnership with Selina Finance.
Gross customer interest-earning balances increased to £371m (June 2024:
£30m) and net receivables increased to £385m (June 2024: £32m), which
includes deferred acquisition costs.
Total income increased to £4.5m (1H24: £(0.1)m). Net interest margin was
3.0% and total income margin was 3.1%.
Interest income increased to £11.0m (1H24: £0.2m) with an asset yield of
7.6%. Interest expense was £6.7m (1H24: £0.3m).
Risk adjusted income increased to £4.3m (1H24: £(0.1)m), including
impairment charges of £0.2m (1H24: £0.0m). Cost of risk was 0.1% and risk
adjusted margin was 3.0%.
Operating costs were £1.9m (1H24: £0.2m), reflecting the limited fixed costs
associated with the business given the origination partnership arrangements in
place.
Profit before tax contribution was £2.4m (1H24: loss contribution of
£(0.3)m).
Corporate Centre
Six months ended (£m) Jun-25 Dec-24 Jun-24 (Re-presented) HoH YoY
(Re-presented) Change % Change %
Interest income 22.0 23.8 22.5 (8) (2)
Interest expense (27.0) (28.2) (25.8) (4) 5
Net interest income (5.0) (4.4) (3.3) 14 52
Non-interest income 1.3 2.6 0.9 (50) 44
Total income (3.7) (1.8) (2.4) 106 54
Impairment charges 0.8 (0.8) - 100
Risk adjusted income (2.9) (2.6) (2.4) 12 21
Operating costs (7.3) (88.5) (36.4) (92) (80)
Loss before tax contribution (10.2) (91.1) (38.8) (89) (74)
Corporate Centre includes the retail savings business, including related
costs, unallocated Treasury result after product allocations, Snoop income and
costs and other immaterial or central items.
All commentary relates to year-on-year performance unless otherwise stated.
Total income was a net expense of £(3.7)m (1H24: £(2.4)m), with net interest
income being a net expense of £(5.0)m (1H24: £(3.3)m) and non-interest
income increasing to £1.3m (1H24: £0.9m) driven by fees and commissions
income from Snoop.
Interest income of £22.0m (1H24: £22.5m) represented returns from the Liquid
Asset Buffer (LAB), including UK gilts and interest on cash reserves in the
BoE reserve account.
Interest expense of £27.0m (1H24: £25.8m) represented residual funding costs
not allocated to the respective businesses, including unallocated Tier 2
capital.
Operating costs reduced to £7.3m (1H24: £36.4m), reflecting the non-repeat
of £29.9m of prior year notable items.
Loss before tax contribution was £(10.2)m (1H24: £(38.8)m).
Notable items
Six months ended (£m) Account line Segment Jun-25 Dec-24 Jun-24
Goodwill write-off Operating costs Corporate Centre - (71.2) -
Transformation and other exceptional costs Operating costs Corporate Centre - (8.6) (15.5)
Amortisation of acquisition intangibles Operating costs Corporate Centre - (2.0) (4.2)
Vehicle Finance receivables review Income Vehicle Finance - (1.4) (3.1)
Impairment Vehicle Finance - (5.4) (9.7)
Other one-off cost items Operating costs Corporate Centre - - (10.2)
Total notable items - (88.6) (42.7)
Principal Risks and Uncertainties
The Group's principal risks are those most critical to the alignment and
delivery of its Strategy. Principal risk categories and associated risk
appetite statements, metrics and thresholds are reviewed and approved by the
Board on an annual basis, effectively defining the Group's overall risk
appetite.
Customer Risk
This is defined as the risk that failing to understand or address customer
needs could lead to dissatisfaction, poor customer outcomes, reduced loyalty
and reputational damage, impacting revenue and long-term business
sustainability. The Group closely monitors customer outcomes to ensure the
fair treatment of customers, particularly for customers requiring early
intervention strategies or those with vulnerable characteristics, and address
customer detriment. Complaints related to responsible lending have declined
since the implementation of the FOS fee-charging structure. However, following
the recent Supreme Court ruling, the Group continues to await the outcome of
the FCA's consultation on a proposed compensation scheme for motor finance
customers.
Regulatory Risk
This is defined as the risk that non-compliance with all regulatory and legal
requirements and expectations could lead to financial penalties, legal action,
operational disruptions and long-term damage to reputation. The Group aims to
avoid material regulatory breaches and, in the event that they do occur, they
are promptly corrected and lessons learned from mistakes made. Strong and
proactive regulatory relationships are in place with the FCA and PRA, who
remain up to date with the Group's strategic initiatives, key risk management
activities and responses to regulatory developments.
Financial Crime Risk
This is defined as the risk that failure to detect and prevent financial crime
and fraud could result in customer detriment, regulatory fines, reputational
damage and financial loss. The Group has dedicated fraud and financial crime
strategic and operational teams, which monitor, investigate and report
suspicious activity to meet regulatory obligations, remain vigilant of
evolving external emerging threats and protect the Group and our customers
from financial crime and fraud. The Group continues to strengthen its
financial and fraud control environment through Gateway development.
Capital Risk
This is defined as the risk that inadequate capital resources or poor capital
planning could result in an inability to meet financial obligations,
regulatory breaches and financial instability, potentially threatening the
long-term viability of the Group. The Group and Bank operate within a defined
capital risk appetite, with performance and capital position reported to and
closely monitored by the Risk Committee and Board. Sufficient capital
resources, both in terms of amount and quality, are maintained to support the
business strategy and meet the stressed scenarios identified in the Internal
Capital Adequacy Assessment Process (ICAAP). The Group and Bank have
remained above regulatory buffer requirements throughout 2025.
Funding and Liquidity Risk
This is defined as the risk that the Group has insufficient financial
resources to meet its obligations (cash or collateral requirements) as they
fall due, resulting in the failure to meet regulatory liquidity requirements,
or is only able to secure such resources at excessive cost. Funding and
liquidity metrics are monitored through daily liquidity reporting and reported
to the Risk Committee and Board. The Group's current funding strategy seeks
to maintain a secure and diverse funding structure by maintaining access to
the liquid retail deposits market and committed facilities to meet the Group's
liquidity and funding requirements. Throughout 2025, the Group and Bank have
maintained funding and liquidity ratios in excess of regulatory requirements.
Market Risk
This is defined as the risk that fluctuations in market prices, such as
interest rates, could negatively impact the Group's financial performance,
resulting in losses or disruptions. The Group and Bank are primarily exposed
to Interest Rate Risk in the Banking Book (IRRBB) and do not take significant
unmatched positions or operate trading books. The Group and Bank have remained
within risk appetite throughout 2025. Market risk appetite metrics include the
risk under different interest rate risk scenarios, as prescribed by
regulation, which are reported to the Risk Committee and Board.
Credit Risk
This is defined as the risk that customers may default on their obligations,
leading to financial losses, impaired asset quality and reputational damage.
The credit risk programme, initiated during 2024 to optimise the Group's
credit decisioning capability and enhance its credit and affordability
strategies, is progressing to plan, ensuring credit risk is at the forefront
of business decisioning and keeps pace with changing market and economic
conditions. The Credit Risk Committee meets monthly to oversee the programme
and monitor portfolio performance against key credit risk metrics.
People Risk
This is defined as the risk that poor recruitment practices, insufficient
employee training or low engagement levels caused by poor culture and
compliance could lead to operational inefficiencies and reputational damage.
To effectively manage people risk, adequate controls exist across the
colleague lifecycle covering onboarding, development and management of our
colleagues. The Group's operating model is reviewed to ensure it has
sufficient operational capacity and colleagues with the right skills to meet
the Group's financial, customer and regulatory responsibilities. The Pulse
Survey completed in June saw the engagement score rise to 65% since the
Colleague Survey conducted in December 2024, providing further insight to
advocate the Group as a great place to work.
Technology and Information Security Risk
This is defined as the risk that inadequate technological, security and data
infrastructure and failure to upgrade systems could lead to operational
inefficiencies, data breaches, service disruptions, a lack of scalability and
reputational damage. Additional focus has been placed on technological
advancements, such as artificial intelligence and machine learning, of which
supporting governance structures are maturing. The Group's technology and
information security risk is being significantly strengthened through the
delivery of the Gateway technology and Data & Analytics transformation
programmes, which are progressing to plan
Operational Risk
This is defined as the risk that failures in processes, systems or human error
could result in business disruptions, financial loss, regulatory action, poor
customer outcomes and reputational damage. Operational risk is inherent to
our Group's activities and heightened as we deliver our activities, utilising
in-house capability and third-party and outsourced business support, and
deliver transformation programmes. The application of the integrated
assurance framework, inclusive of the Group's material controls, seeks to
complement the assurance activities of each the three lines of defence.
Model Risk
This is defined as the risk that incorrect assumptions, poor design or
outdated data within models used for decision making could lead to unintended
outcomes, financial loss or operational inefficiencies. All models and
covered tools are required to be added and managed through the model
inventory, which is reviewed monthly for completeness and accuracy. The
model risk classification is in place reflecting the PRA's Model Risk
Management Principles with clear delineation of responsibilities across the
three lines of defence and oversight from the Model Risk Committee and
supported by formals sub-working groups.
Business Performance Risk
This is defined as the risk that poor performance of key business processes,
such as financial management, operations or customer service, could lead to
financial losses, reduced market share, threat to the Group's long-term
viability and reputational damage. The Group continues to deliver against
its strategic priorities, grow the business and maintain its existing
commitments in a safe and controlled way, adopting an effective risk
management, strong risk culture and remaining aware of emerging external
threats.
Consolidated financial statements
Consolidated income statement for the six months ended 30 June
Note 2025 2024(1)
unaudited unaudited
£m £m
Interest income 3 274.9 276.0
Interest expense (72.7) (68.7)
Net interest income 202.2 207.3
Fee and commission income 18.4 20.1
Fee and commission expense (1.5) (0.8)
Net fee and commission income 16.9 19.3
Other income and net fair value gains 0.6 0.2
Total income 219.7 226.8
Impairment charges 9 (76.1) (93.0)
Risk-adjusted income 143.6 133.8
Operating costs (137.4) (179.9)
Profit/(loss) before taxation from continuing operations 4 6.2 (46.1)
Tax (charge)/credit 6 (1.3) 10.6
Profit/(loss) for the period from continuing operations 4.9 (35.5)
Profit/(loss) after tax for the period from discontinued operations 5 0.7 (0.3)
Statutory profit/(loss) for the period attributable to equity shareholders 5.6 (35.8)
Consolidated statement of comprehensive income for the six months ended 30
June
Note 2025 2024
unaudited unaudited
£m £m
Statutory profit/(loss) for the period attributable to equity shareholders 5.6 (35.8)
Items that will not be reclassified subsequently to the income statement:
- actuarial movements on retirement benefit asset 12 (15.4) (4.5)
- tax on items taken directly to other comprehensive income 3.9 1.1
Other comprehensive expense for the period (11.5) (3.4)
Total comprehensive expense for the period attributable to equity shareholders (5.9) (39.2)
Earnings/(loss) per share
Note 2025 2024
unaudited unaudited
pence pence
Basic - continuing operations 7 1.9 (13.9)
Diluted - continuing 7 1.9 (13.9)
operations
Basic - Group 7 2.2 (14.1)
Diluted - Group 7 2.1 (14.1)
Dividends per share
Note 2025 2024
unaudited unaudited
pence pence
Interim 8 - -
dividend
Paid in the period - 2023 final 8 - 1.0
The total amount of dividends paid in the period was £nil (1H24: £2.5m).
(1) Refer to accounting policies for details of representation
Consolidated balance sheets
Note 30 June 31 December 2024 30 June
2025 audited 2024
unaudited unaudited
£m £m £m
ASSETS
Cash and cash equivalents 805.3 1,003.9 772.8
Investments held at amortised cost 116.5 - -
Amounts receivable from customers 9 2,325.1 2,153.7 2,008.5
Trade and other receivables 67.0 72.5 82.7
Investments held at fair value through profit and loss 2.3 2.3 5.1
Current tax asset 3.7 3.9 -
Property, plant and equipment 6.7 7.1 7.4
Right of use assets 14.2 16.4 18.9
Goodwill 10 1.2 1.2 72.4
Other intangible assets 11 62.5 61.5 60.2
Retirement benefit asset 12 12.7 27.8 34.4
Derivative financial instruments 2.0 - 1.1
Deferred tax assets 27.5 25.0 21.6
TOTAL ASSETS 4 3,446.7 3,375.3 3,085.1
LIABILITIES AND EQUITY
Liabilities
Trade and other payables 56.0 46.1 49.6
Provisions 14 9.2 15.5 16.3
Lease liabilities 28.3 32.5 37.1
Current tax liability - - 1.2
Retail deposits 2,463.8 2,428.2 1,937.5
Bank and other borrowings 447.7 410.0 504.1
Derivative financial instruments 7.0 1.8 9.6
Total liabilities 3,012.0 2,934.1 2,555.4
Equity attributable to owners of the parent
Share capital 53.2 53.2 53.2
Share premium 276.3 276.3 276.3
Merger reserve 278.2 278.2 278.2
Other reserves 8.6 10.8 14.5
Retained earnings (181.6) (177.3) (92.5)
Total equity 4 434.7 441.2 529.7
TOTAL LIABILITIES AND EQUITY 3,446.7 3,375.3 3,085.1
Consolidated statement of changes in shareholders' equity
Share Share Merger reserve Other Retained
capital premium £m £m reserves Earnings Total £m
£m £m £m
At 1 January 2024 (audited) 53.2 276.3 278.2 12.1 (50.7) 569.1
Loss for the period - - - - (35.8) (35.8)
Other comprehensive (expense)/income:
- actuarial movements on retirement benefit asset (note 12) - - - (4.5) (4.5)
-
- tax on items taken directly to OCI - - - - 1.1 1.1
Other comprehensive expense for the period - - - - (3.4) (3.4)
Total comprehensive expense for the period - - - - (39.2) (39.2)
Share-based payment charge - - - 2.4 - 2.4
Purchase of shares for share awards - (0.1) (0.1)
Dividends - - - - (2.5) (2.5)
At 30 June 2024 and 1 July 2024 (unaudited) 53.2 276.3 278.2 14.5 (92.5) 529.7
Loss for the period (83.5) (83.5)
Other comprehensive (expense)/income:
- actuarial movements on retirement benefit asset (note 12) - - - - (7.1) (7.1)
- tax on items taken directly to OCI - - - - 1.8 1.8
Other comprehensive expense for the period - - - - (5.3) (5.3)
Total comprehensive expense for the period - - - - (88.8) (88.8)
Share-based payment charge - - - 0.3 - 0.3
Transfer of share-based payment reserve on vesting of share awards - - - (4.0) 4.0 -
At 31 December 2024 (audited) 53.2 276.3 278.2 10.8 (177.3) 441.2
At 1 January 2025 (audited) 53.2 276.3 278.2 10.8 (177.3) 441.2
Profit for the period - - - - 5.6 5.6
Other comprehensive (expense)/income:
- actuarial movements on retirement benefit asset (note 12) - - - - (15.4) (15.4)
- tax on items taken directly to OCI - - - - 3.9 3.9
Other comprehensive expense for the period - - - - (11.5) (11.5)
Total comprehensive expense for the period - - - - (5.9) (5.9)
Share-based payment charge - - - 0.7 - 0.7
Transfer of share-based payment reserve on vesting of share awards - - - (2.9) 2.9 -
Purchase of shares for share awards - - - - (1.3) (1.3)
At 30 June 2025 (unaudited) 53.2 276.3 278.2 8.6 (181.6) 434.7
The full merger reserve is considered distributable.
Consolidated statement of cash flows for the period ended 30 June
Six months ended 30 June
Note 2025 2024
unaudited unaudited
£m £m
Cash flows from operating activities
Cash (used in)/generated from operations 15 (81.0) 142.4
Finance costs paid (46.8) (46.5)
Finance income received 22.8 21.1
Tax received 0.1 8.1
Net cash (used in)/generated from operating activities (104.9) 125.1
Cash flows from investing activities
Purchase of intangible assets 11 (7.3) (5.7)
Purchase of property, plant and equipment (0.9) (4.5)
Purchase of financial investments (114.8) -
Net cash used in investing activities (123.0) (10.2)
Cash flows from financing activities
Proceeds from bank and other borrowings 35.0 -
Repayment of bank and other borrowings - (75.0)
Payment of lease liabilities (4.2) (7.0)
Dividends paid to Company shareholders - (2.5)
Purchase of own shares for share awards (1.3) (0.1)
Net cash generated from/(used in) financing activities 29.5 (84.6)
Net (decrease)/increase in cash, cash equivalents and overdrafts (198.4) 30.3
Cash, cash equivalents and overdrafts at beginning of period 1,002.8 741.8
Cash, cash equivalents and overdrafts at end of year 804.4 772.1
Cash, cash equivalents and overdrafts at end of period comprise:
Cash at bank and in hand 805.3 772.8
Overdrafts (held in bank and other borrowings) (0.9) (0.7)
Total cash, cash equivalents and overdrafts 804.4 772.1
( )
In line with FY24 reporting, cash generated from operations in 1H24 has been
represented to include movement in retail deposits which is no longer
considered a financing cash flow.
Cash at bank and in hand includes £758.4m (1H24: £716.6m) in respect of the
liquidity buffer, including other liquidity resources, held by Vanquis Bank
Limited in accordance with the PRA's liquidity regime.
Notes to the financial information
1. Basis of preparation
The company is a public limited company, incorporated and domiciled in the UK.
The address of its registered office is No. 1 Godwin Street, Bradford, BD1
2SU. The company is listed on the London Stock Exchange.
The unaudited condensed interim financial statements do not constitute the
statutory financial statements of the Group within the meaning of section 434
of the Companies Act 2006. The statutory financial statements for the year
ended 31 December 2024 were approved by the board of directors on 13 March
2025 and have been delivered to the Registrar of Companies. The report of the
auditor on those financial statements was unqualified, did not draw attention
to any matters by way of emphasis and did not contain any statement under
section 498(2) or (3) of the Companies Act 2006.
The unaudited condensed interim financial statements for the six months ended
30 June 2025 have been reviewed, not audited, and were approved by the board
of directors on 6 August 2025.
The unaudited condensed interim financial statements for the six months ended
30 June 2025 have been prepared in accordance with IAS 34 'Interim Financial
Reporting' as adopted by the UK. The unaudited condensed interim financial
statements should be read in conjunction with the statutory financial
statements for the year ended 31 December 2024.
The interim financial statements have been prepared on a going concern basis
under the historical cost convention, as modified by the revaluation of
derivative financial instruments and investments held at fair value through
profit and loss.
In assessing whether the Group is a going concern, the directors' review has
been made on the basis that the Group continues to operate for the twelve
months from the date of the approval of the financial statements. The
directors considered the appropriateness of the going concern basis, the
period of assessment, any reporting requirements, and solvency and liquidity
risks, and included a variety of factors - forecasts and budgets, timing of
cashflows and funding, the Group's primary market and any contingent
liabilities. When considering the appropriateness of going concern the
directors have also considered the Group's ability to meets its regulatory
requirements (both capital and liquidity) at all times and not just a positive
net asset measure.
The assessment of going concern for the Group considered the following
factors:
· The Group's corporate plan as approved in December 2024, and the
latest 18 months forecast approved in July 25 which sets out financial,
capital, liquidity and funding projections, together with an overview of
relevant risks;
· The principal and emerging risks which could impact the
performance of the Group, with a focus on capital and liquidity;
· The severe but plausible downside scenario, which is designed to
assess the potential impact of certain underlying risks on the Group's capital
and funding resources, together with the availability and effectiveness of
mitigating actions;
· An idiosyncratic downside scenario assessing Vehicle Finance
Commission outcomes; and
· Reverse stress testing analysis, which is designed to assess the
point at which the Group is no longer a going concern;
Having considered the Group's forecasts, the regulatory capital and liquidity
of the Group, the regulatory outlook and the impact of the Supreme Court
judgment and FCA's intention to consult on Vehicle Finance commission, the
directors have a reasonable expectation that the Group will continue as a
going concern for a period of at least 12 months from the date of approving
these financial statements. Accordingly, the financial statements of the Group
have been prepared on the going concern basis.
2. Accounting policies
Group principal accounting policies under IFRS have been consistently applied
to all the years presented, except where set out below.
Change in accounting policies
Exceptional items
The Group has transitioned to reporting solely on a statutory basis, removing
adjustments for goodwill write-offs, transformation and other exceptional
costs, and amortisation of acquisition intangibles.
This follows actions taken in 2024 that resulted in a cleaner, lower-risk
balance sheet and improved transparency at both Group and product levels.
Adjusted performance is now expected to closely align with statutory results.
The accounting policy for exceptional items is therefore no longer in place.
As this is a change in accounting policy the comparatives have been
represented however there is no impact on recognition, measurement or total
profit and loss in any period presented in this report. The change reflects a
change in presentation of the income statement and associated metrics.
Representation of items
Discontinued operations
The Group sold its Loan portfolio in MAR25. In accordance with IFRS 5
'Non-current Assets Held for Sale and Discontinued Operations' this business
segment is now presented as discontinued operations. See note 5.
Segmental reporting
During 1H25, following the sale of the Personal Loans business, the Group now
comprises four segments: the three core lending products - Credit Cards,
Vehicle Finance, and Second Charge Mortgages - and the Corporate Centre. The
Corporate Centre includes the residual performance of the Retail Savings
business, Treasury results after product allocations, Snoop, and other
immaterial or central items. As a result, all previous periods have been
represented onto a consistent basis. These changes do not constitute a change
in accounting policy and there is no impact on recognition, measurement or
profit and loss in any period presented in this report. See note 4.
Fraud costs reclassification
In FY24 fraud costs were represented from impairment to within operating costs
and the comparative numbers for 2023 restated. As part of this change, the
reduction in customer receivables for Cards for fraud accounts was represented
from allowance account to gross receivables.
The 1H24 comparatives presented in this report have been retrospectively
re-presented. This change does not constitute a change in accounting policy
and there is no impact on recognition, measurement or profit and loss in any
period presented in this report. The impact of this change in 1H24 was a
£3.5m reduction in the total impairment charge and a corresponding increase
in costs.
There was no impact on net receivables as a result of this change. These
changes do not constitute a change in accounting policy and there is no impact
on recognition, measurement or profit and loss in any period presented in this
report.
Critical accounting judgements and key sources of estimation uncertainty
The significant accounting judgements exercised by management and key sources
of estimation uncertainty in the
interim financial statements are consistent with those adopted in the
statutory financial statements for the year ended 31 December 2024 with the
exception of Goodwill. Due to the impact of any judgement in relation to
goodwill no longer being considered material, it is no longer included as a
critical accounting judgement.
Amounts receivable from customers (note 9)
Critical accounting judgements
The Group reviews amounts receivable from customers for impairment at each
balance sheet date. For the purposes of assessing the impairment, customers
are categorised into IFRS 9 stages and cohorts which are considered to be the
most reliable indication of future payment performance.
The determination of expected credit losses involves complex modelling
techniques and requires management to apply significant judgements to
calculate expected credit losses. The most critical judgements are outlined
below.
The determination of the Significant Increase in Credit Risk (SICR) thresholds
to be used in the models for Credit Cards and Vehicle Finance requires
management judgement to optimise the performance and therefore effectiveness
of the staging methodology. Assessments are made to determine whether there is
objective evidence of an SICR which indicates whether there has been an
adverse effect on Probability of Default (PD). An SICR for customers is when
there has been a significant increase in behavioural score or when one
contractual monthly payment has been missed.
For the purpose of IFRS 9, default is assumed when three contractual
repayments have been missed.
The Group's impairment models are subject to periodic monitoring, independent
validation and back testing performed on model components (where appropriate),
including PD, EAD, and LGD to ensure management judgements remain appropriate.
Limitations in the Group's impairment models or data inputs may be identified
through the ongoing assessment and validation of the output of the models. In
these circumstances, management makes appropriate adjustments to the Group's
allowance for impairment losses to ensure that the overall provision
adequately reflects all material credit risks. These adjustments are
determined by considering the particular attributes of exposures which have
not been adequately captured by the impairment models and range from changes
to model inputs and parameters, at account level, through to more qualitative
post-model overlays. Those changes applied to model inputs and parameters are
deemed to be in-model overlays; more qualitative changes that have a higher
degree of management judgement are deemed to be post-model overlays. All
adjustments are reviewed quarterly and are subject to internal review and
challenge to ensure that amounts are appropriately calculated. A breakdown of
the in-model and post-model overlays is included within note 9.
Credit performance across the Group remains stable and internal analysis shows
no obvious signs of credit quality deterioration.
Macroeconomic impairment provision adjustments are recognised in the core
model to reflect an increased PD, based on future macroeconomic scenarios.
Management judgement was required to determine the appropriate macroeconomic
indicators to be used in the model by assessing their correlation with credit
losses incurred by the business.
In FY24 a model overlay of £5.4m was recognised which looked at Credit Card
write-off rates, utilising data from a third party. This third party model
predicts industry level write-off rates using a combination of interest rates
on Credit Cards, unemployment rate, debt to income ratio and a measure of
macroeconomic volatility. The outputs from this model are calibrated to the
VBG entry to default rate which is in turn used to derive the scalars applied
to the lifetime probability of default model.
During 1H25 the third party model was incorporated in the core model and an
overlay is no longer held. The redeveloped internal model is expected to be
implemented in 2H25.
Key sources of estimation uncertainty
The level of impairment recognised is calculated using models which utilise
historical payment performance to generate the estimated amount and timing of
future cash flows from each cohort of customers in each arrears stage.
The models are regularly monitored to ensure they retain sufficient accuracy.
Sensitivity analysis has been performed in note 9 which shows the impact of a
1% movement of gross exposure into Stage 2 from Stage 1 on the allowance
accounts.
Macroeconomic assumptions
The following table shows the scenario five-year peak and average third party
model Credit Card write off rates. These estimates are used to derive base
case, upside, downside and severe scenarios.
30 June 2025 31 December 2024
Base Upside Downside Severe Base Upside Downside Severe
Weighting 60% 15% 20% 5% 60% 15% 20% 5%
2025 0.46% 0.40% 0.51% 0.52% 0.46% 0.44% 0.47% 0.47%
2026 0.48% 0.28% 0.64% 0.69% 0.50% 0.36% 0.61% 0.64%
2027 0.47% 0.22% 0.74% 0.80% 0.52% 0.27% 0.71% 0.78%
2028 0.45% 0.20% 0.76% 0.82% 0.49% 0.22% 0.75% 0.83%
2029 0.44% 0.20% 0.74% 0.80% 0.45% 0.20% 0.73% 0.81%
Five year peak 0.48% 0.45% 0.77% 0.83% 0.52% 0.46% 0.76% 0.84%
The unemployment data used in the macroeconomic provisions held at 1H24 were
compiled from a consensus of sources
including the Bank of England, HM Treasury, the Office for Budget
Responsibility (OBR), Bloomberg and a number of prime banks. These estimates
are used to derive base case, upside, downside and severe scenarios.
The table below shows the scenario five-year peak and average unemployment
assumptions adopted and the weightings applied to each
30 June 2024
Base Upside Downside Severe
Weighting 60% 15% 20% 5%
2024 4.4% 4.3% 4.5% 4.8%
2025 4.5% 3.9% 5.8% 7.2%
2026 4.5% 4.1% 6.3% 8.0%
2027 4.5% 4.1% 5.5% 6.4%
2028 4.5% 4.3% 5.0% 5.6%
Five year peak 4.5% 4.4% 6.5% 8.3%
There has been no change in the weightings from 2024.
Contingent liability: Vehicle Finance Commission (note 16)
Critical accounting judgement
Management has considered the requirements of IAS 37 to determine if a
provision or contingent liability is required in relation to the outcome of
the Supreme Court judgment regarding motor finance commission disclosure
practices. It has also considered the FCA's intention to consult on a motor
finance compensation scheme. The Group believes its position is differentiated
on a number of grounds and in accordance with IAS 37, the Group has not
provided for this matter but has disclosed a contingent liability (see note
16).
Other accounting judgements:
Intangibles (note 11)
All intangible assets have been reviewed for impairment under IAS 36.
Following the sale of the Personal Loans business in 1H25, the assets
associated with that product were reviewed for impairment and subsequently
written off. A charge of £1.2m has therefore been recognised within
discontinued operations.
In 1H24 the Credit Cards mobile app was written off in full following a
decision to rebuild this functionality using a more efficient design and build
approach leading to an overall better customer experience. The resulted in a
cost of £8.5m being recognised in 1H24 results.
In addition, assets expected to be replaced by the Gateway platform in 2026
were reviewed: a small number
of these assets were written off, and the useful economic lives of other
assets were reassessed in light of their expected retirement by the Gateway
platform. The impact of these in FY24 results was not material.
Provisions: Customer remediation complaints (note 14)
Over the past two years Group has experienced elevated levels of customer
compensation claims from claims management companies. The majority of these
claims were speculative in nature, primarily driven by unmerited CMC activity,
and related to a wide range of different matters, primarily in respect of the
lending process but with no common theme or systemic issue. During 2024, the
increase in costs and provision resulted from higher than expected FOS fees
for cases not upheld by us which were expected to subsequently be submitted to
FOS for adjudication.
Since the change in the FOS fee charging structure from 1 April 2025, the
Group has seen negligible CMC referrals to the FOS. This element of the
provision has therefore been reduced, resulting in a £2.9m release in the
period.
The total cost to the Group of customer remediation costs, including resource,
which relate to a wide range of different matters, amounts to £16.1m in 1H25
(FY24:£47.4m, 1H24 £25.0m), with FOS fees reducing £8.6m to £4.5m
(FY24:£24.8m, 1H24 £13.1m).
A provision of £2.5m (FY24:£7.4m, 1H24 :£8.2m) is held at the balance sheet
date for: (i) customer compensation claims received where compensation may be
paid but which have not yet been assessed, upheld or compensation amounts
agreed (£2.0m) (FY24: £5.1m, 1H24 £5.2m) ; and (ii) expected FOS fees for
future claims which may be referred (£0.5m) (FY24: £2.3m, 1H24: £3.0m).
The provision is determined based on the complaints volume pipeline at the
period end, estimated uphold complaint rates, and average compensation amounts
for each complaint type based on historical data.
3. Interest income
Six months ended 30 June
Interest receivable from: 2025 2024(1)
unaudited unaudited
£m £m
Customer receivables 252.9 254.3
Cash balances held on deposit and other interest 22.3 20.3
Net fair value gains on derivative financial instruments (0.3) 1.4
Total income - continuing operations 274.9 276.0
Discontinued operations 1.4 9.2
Total income - Group 276.3 285.2
(1) Refer to accounting policies for details of representation
4. Segment reporting
During 1H25 the Group reviewed and reallocated interest income, interest
expense and costs to different product segments as reported under IFRS 8. As a
result, all previous periods have been represented onto a consistent basis.
These changes do not constitute a change in accounting policy and there is no
impact on recognition, measurement or profit and loss in any period presented
in this report. This re-presentation is a further step in Vanquis' on-going
commitment to enhance disclosures and to provide a more transparent reporting
of the Group's continuing operations by product.
Following the sale of the Personal Loans business, the Group now comprises
four segments: the three core lending products - Credit Cards, Vehicle
Finance, and Second Charge Mortgages - and the Corporate Centre. The Corporate
Centre includes the residual performance of the Retail Savings business,
Treasury results after product allocations, Snoop, and other immaterial or
central items.
To more accurately reflect the interest income and funding costs of each
lending product, the Group has reallocated:
· Interest income from non-product Treasury items has been moved
from Credit Cards to the Corporate Centre.
· Interest expense reallocation to better represent the cost of
funding across products using funds transfer pricing, allowing for duration
matching of assets and natural hedging across exposures. Interest expense
related to Tier 2 capital, previously reported entirely in Corporate Centre,
has been partially reallocated to individual products and the cost of the
Vehicle Finance securitisation, previously allocated solely to Vehicle
Finance, has been spread across all products, reflecting shared benefit from
the funding structure.
· Operating costs that were not directly attributable to a product
and previously held in the Corporate Centre have been reallocated, based on
either business size using a blended average of Credit risk-weighted assets
(RWAs), to reflect capital consumption or Total income, to reflect revenue
contribution, or service usage.
The Group has transitioned to reporting solely on a statutory basis. This
follows actions taken in 2024 that resulted in a cleaner, lower-risk balance
sheet and improved transparency at both Group and product levels. Adjusted
performance is now expected to closely align with statutory results.
Accordingly, the 2024 income statement and key metrics have been re-presented
on a statutory basis, removing adjustments for goodwill write-offs,
transformation and other exceptional costs, and amortisation of acquisition
intangibles. The 2024 adjusting items comprising the goodwill write-off,
transformation and other exceptional costs, and amortisation of acquisition
intangibles, in addition to other-one off cost items, have remained within the
Corporate Centre.
The impact of the 2024 Vehicle Finance receivables review, affecting both
income and impairment, has remained within the Vehicle Finance segment.
Six months ended 30 June 2025 unaudited
Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
£m £m £m £m £m
Interest income 179.0 62.9 11.0 22.0 274.9
Interest expense (24.7) (14.3) (6.7) (27.0) (72.7)
Net interest income 154.3 48.6 4.3 (5.0) 202.2
Fee and commission income 17.4 - 0.2 0.8 18.4
Fee and commission expense (1.4) - - (0.1) (1.5)
Net fee and commission income 16.0 - 0.2 0.7 16.9
Other income - - - 0.6 0.6
Total income 170.3 48.6 4.5 (3.7) 219.7
Impairment charges (64.0) (12.7) (0.2) 0.8 (76.1)
Risk-adjusted income 106.3 35.9 4.3 (2.9) 143.6
Operating costs (93.7) (34.5) (1.9) (7.3) (137.4)
PBT/(LBT) from continuing operations 12.6 1.4 2.4 (10.2) 6.2
Six months ended 30 June 2024(1) unaudited
Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
£m £m £m £m £m
Interest income 183.6 69.7 0.2 22.5 276.0
Interest expense (26.9) (15.7) (0.3) (25.8) (68.7)
Net interest income 156.7 54.0 (0.1) (3.3) 207.3
Fee and commission income 19.3 - - 0.8 20.1
Fee and commission expense (0.7) - - (0.1) (0.8)
Net fee and commission income 18.6 - - 0.7 19.3
Other income - - - 0.2 0.2
Total income 175.3 54.0 (0.1) (2.4) 226.8
Impairment charges (63.5) (29.5) - - (93.0)
Risk-adjusted income 111.8 24.5 (0.1) (2.4) 133.8
Operating costs (100.5) (42.8) (0.2) (36.4) (179.9)
PBT/(LBT) from continuing operations 11.3 (18.3) (0.3) (38.8) (46.1)
(1) Refer to accounting policies for details of representation
Revenue between business segments is not material.
Net
Segment assets assets/(liabilities)
30 June 2025 31 December 2024 30 June 2024 30 June 2025 31 December 2024 30 June 2024
unaudited audited unaudited unaudited audited unaudited
£m £m £m £m £m £m
Credit cards, personal loans and second charge mortgages 2,628.2 2,514.8 2,101.6 358.6 360.6
353.0
Vehicle finance 749.3 775.5 875.3 128.0 129.1 189.3
Central (54.2) (2.6) 47.6 (51.9) (40.9) (20.2)
Intra-group elimination 123.4 87.6 60.6 - - -
Total Group 3,446.7 3,375.3 3,085.1 434.7 441.2 529.7
The presentation of segment net assets reflects the statutory assets,
liabilities and net assets of each of the Group's divisions. This results in
an intra-group elimination reflecting the difference between the central
intercompany funding provided to the divisions and the external funding raised
centrally. Credit cards, personal loans and second charge mortgages are
recognised within Vanquis Bank Limited and are therefore combined for balance
sheet reporting purposes.
5. Discontinued operations
The Group sold its Loan portfolio in March 2025, in accordance with IFRS 5
'Non-current Assets Held for Sale and Discontinued Operations' this business
segment is now presented as discontinued operations.
The 1H24 results have been re-presented to reflect this change:
· The operating costs included in the profit or loss after tax from
discontinued operations reflect only those costs directly attributable to the
Personal Loans business.
· The business continued to be reported as discontinued in 1Q25
until the sale completed.
· The 1H25 results includes a gain on sale of £0.5m.
The results from discontinued operations, which are included in the Group
income statement, are set out below.
Six months ended 30 June
2025 2024
unaudited unaudited
£m £m
Interest income 1.4 9.1
Interest expense (0.3) (1.9)
Net interest income 1.1 7.2
Total income 1.1 7.2
Impairment 3.1 (4.8)
Risk-adjusted income 4.2 2.4
Operating costs (3.3) (2.8)
Profit/(loss) before taxation 0.9 (0.4)
Tax (charge)/credit (0.2) 0.1
Profit/(loss) from discontinued operations 0.7 (0.3)
Basic earnings/(loss) per share (p) 0.3 (0.1)
Diluted earnings/(loss) per share (p) 0.3 (0.1)
6. Tax (charge)/credit
The tax (charge)/credit in the income statement is as follows:
Six months ended 30 June
2025 2024
unaudited unaudited
£m £m
Tax (charge)/credit on profit/(loss) from continuing operations (1.3) 10.6
Tax (charge)/credit on profit/(loss) from discontinued operations (0.2) 0.1
Total tax (charge)/credit (1.5) 10.7
The tax (charge)/credit on profit/(loss) before tax has been calculated by:
· calculating the best estimate of the effective tax rate for each
business for the financial year, excluding revaluations of deferred tax
assets;
· applying this to the profit/(loss) before tax for the relevant
business for the period and aggregating the resultant amount; and
· adding to this the revaluations of deferred tax assets in respect
of share scheme awards where tax deductions are expected to be higher than
(1H24: lower than) previously expected.
The tax (charge)/credit reflects:
· the beneficial (1H24: adverse) impact of revaluing deferred tax
assets in respect of share scheme awards where tax deductions are expected to
be higher than (1H24: lower than) previously expected; and
· the recognition of deferred tax assets in respect of carried
forward tax losses, apart from pre-acquisition losses in Snoop, and other
temporary differences on the basis the Group expects to have sufficient
taxable profits in the future to enable such deferred tax assets to be
recovered.
7. Earnings/(Loss) per share
Basic earnings/(loss) per share EPS/(LPS) is calculated by dividing the
profit/(loss) for the year attributable to equity shareholders by the weighted
average number of ordinary shares outstanding during the year less the number
of shares held by the Employee Benefit Trust which are used to satisfy the
Groups share awards.
Diluted EPS/(LPS) calculates the effect on EPS/(LPS) assuming conversion of
all dilutive potential ordinary shares. Dilutive potential ordinary shares are
calculated as follows:
(i) For share awards outstanding under performance-related share incentive
schemes such as the Deferred Bonus Plan (DBP), the Long Term Incentive Scheme
(LTIS), the Restricted Share Plan (RSP) and the Company Share Option Plan
(CSOP), the number of dilutive potential ordinary shares is calculated based
on the number of shares which would be issuable if: (i) the end of the
reporting period is assumed to be the end of the schemes' performance period;
and (ii) the performance targets have been met as at that date.
(ii) For share options outstanding under non-performance-related schemes such
as the Save As You Earn scheme (SAYE), a calculation is performed to determine
the number of shares that could have been acquired at fair value (determined
as the average annual market share price of the Company's shares) based on the
monetary value of the subscription rights attached to outstanding share
options. The number of shares calculated is compared with the number of share
options outstanding, with the difference being the dilutive potential ordinary
shares.
Potential ordinary shares are treated as dilutive when, and only when, their
conversion to ordinary shares would decrease earnings per share or increase
loss per share.
Reconciliations of basic and diluted EPS/(LPS) for the continuing operations
and the Group are set out below:
Six months ended 30 June unaudited
2025 2024
Weighted average Weighted average
number Per number Per
of shares share of shares share
Earnings amount Loss amount
Continuing operations £m m pence £m m pence
Basic earnings/(loss) per share 4.9 254.5 1.9 (35.5) 254.7 (13.9)
Dilutive effect of share options and awards - 7.7 - - - -
Diluted earnings/(loss) per share 4.9 262.2 1.9 (35.5) 254.7 (13.9)
Six months ended 30 June unaudited
2025 2024
Weighted average Weighted average
number Per number Per
of shares share of shares share
Earnings amount Loss amount
Group £m m pence £m m pence
Basic earnings/(loss) per share 5.6 254.5 2.2 (35.8) 254.7 (14.1)
Dilutive effect of share options and awards - 7.7 (0.1) - - -
Diluted earnings/(loss) per share 5.6 262.2 2.1 (35.8) 254.7 (14.1)
8. Dividends
Six months ending
2025 2024
unaudited unaudited
£m £m
2023 final - 1.0p per share - 2.5
Total dividends paid - 2.5
The directors are not recommending an interim dividend in respect of the
period ended 30 June 2025 (1H24: nil).
9. Amounts receivable from customers
30 June 2025 31 December 2024 30 June 2024(1)
unaudited audited unaudited
£m £m £m
Credit cards 1,231.9 1,149.9 1,150.6
Vehicle finance 709.0 735.4 760.5
Second charge mortgages 384.5 225.3 31.5
Total - continuing operations 2,325.4 2,110.6 1,942.6
Discontinued operations - 44.0 67.8
Fair value adjustment for portfolio hedged risk (0.3) (0.9) (1.9)
Total group 2,325.1 2,153.7 2,008.5
(1) Refer to accounting policies for details of representation
The fair value adjustment for the portfolio hedge risk relates to the
unamortised hedge accounting adjustment in relation to the balance guaranteed
swap, where hedge accounting has been discontinued and in 1H25, the hedge
accounting adjustment in relation to second charge mortgages.
An analysis of continuing operations receivables by IFRS 9 stages is set out
below:
30 June 2025 unaudited
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Gross receivables
Credit cards 1,219.2 109.5 61.6 1,390.3
Vehicle finance 579.0 117.1 98.8 794.9
Second charge mortgages 381.5 2.9 0.5 384.9
Total 2,179.7 229.5 160.9 2,570.1
Allowance account
Credit cards (81.9) (41.8) (34.7) (158.4)
Vehicle finance (14.3) (18.7) (52.9) (85.9)
Second charge mortgages (0.2) (0.2) - (0.4)
Total (96.4) (60.7) (87.6) (244.7)
Net receivables
Credit cards 1,137.3 67.7 26.9 1,231.9
Vehicle finance 564.7 98.4 45.9 709.0
Second charge mortgages 381.3 2.7 0.5 384.5
Total 2,083.3 168.8 73.3 2,325.4
31 December 2024 audited
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Gross receivables
Credit cards 1,136.6 99.8 73.5 1,309.9
Vehicle finance 606.3 120.1 105.5 831.9
Second charge mortgages 224.2 1.2 0.1 225.5
Personal loans (discontinued operation) 44.2 2.4 2.5 49.1
Total 2,011.3 223.5 181.6 2,416.4
Allowance account
Credit cards (73.3) (44.7) (42.0) (160.0)
Vehicle finance (18.2) (21.5) (56.8) (96.5)
Second charge mortgages (0.1) (0.1) - (0.2)
Personal loans (discontinued operation) (2.8) (0.9) (1.4) (5.1)
Total (94.4) (67.2) (100.2) (261.8)
Net receivables
Credit cards 1,063.3 55.1 31.5 1,149.9
Vehicle finance 588.1 98.6 48.7 735.4
Second charge mortgages 224.1 1.1 0.1 225.3
Personal loans (discontinued operation) 41.4 1.5 1.1 44.0
Total 1,916.9 156.3 81.4 2,154.6
30 June 2024 unaudited
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Gross receivables
Credit cards(1) 1,115.8 122.0 93.5 1,331.3
Vehicle finance 608.6 122.8 189.5 920.9
Second charge mortgages 31.5 - - 31.5
Personal loans (discontinued operation) 68.8 4.0 4.9 77.7
Total 1,824.7 248.8 287.9 2,361.4
Allowance account
Credit cards(1) (76.0) (49.9) (54.8) (180.7)
Vehicle finance (19.7) (21.4) (119.3) (160.4)
Second charge mortgages - - - -
Personal loans (discontinued operation) (5.1) (1.7) (3.1) (9.9)
Total (100.8) (73.0) (177.2) (351.0)
Net receivables
Credit cards 1,039.8 72.1 38.7 1,150.6
Vehicle finance 588.9 101.4 70.2 760.5
Second charge mortgages 31.5 - - 31.5
Personal loans (discontinued operation) 63.7 2.3 1.8 67.8
Total 1,723.9 175.8 110.7 2,010.4
(1) Refer to accounting policies for details of representation of fraud costs.
An increase of 1% of the gross exposure into stage 2 from stage 1 would result
in an increase in the allowance account of £4.8m (FY24: £5.1m; 1H24: £4.3m)
based on applying the difference between the coverage ratios from stage 1 to
stage 2 to the movement in gross exposure.
A breakdown of the post-model (under)/overlays for Credit Cards is shown
below:
Credit Cards 30 June 2025 31 December 30 June 2024(1)
unaudited 2024 unaudited
audited
£m £m £m
Core model 158.5 155.6 180.4
Post Model (under)/overlays (0.1) 4.4 0.3
Total allowance account 158.4 160.0 180.7
( )
30 June 2025 31 December 2024 30 June 2024(1)
unaudited audited unaudited
£m £m £m
Post model (under)/overlays:
Scorecard (note (a)) (0.8) - -
Macroeconomic model (note (b)) - 4.0 -
Other 0.7 0.4 0.3
Total post model (under)/overlays (0.1) 4.4 0.3
(1) Refer to accounting polices for details of representation of fraud costs.
a) Scorecard
A new acquisition scorecard used to determine a customer's credit risk has
been implemented in 1H25. The new scorecard required a calibration to the IFRS
9 Definition of Default. A model underlay has been recognised until the model
can be updated in 2H25.
b) Macroeconomic model
The macroeconomic model was redeveloped in 2024 using an external third party
macroeconomic data provider. As it was not fully embedded at FY24, a PMA was
recognised reflecting the difference between the incumbent macroeconomic model
and the new output. During 1H25 the third party model was incorporated in the
core model and an overlay is no longer held. An internally redeveloped model
is expected to be implemented in 2H25.
A breakdown of the post-model (under)/overlays for vehicle finance is shown
below:
Vehicle Finance 30 June 2025 31 December 30 June 2024(1)
unaudited 2024 unaudited
audited
£m £m £m
Core model 87.6 93.3 160.4
Post Model (under)/overlays (1.7) 3.2 -
Total allowance account 85.9 96.5 160.4
30 June 2025 31 December 2024 30 June 2024
unaudited audited unaudited
£m £m £m
Post model (under)/overlays:
Origination PD (note (a)) (3.0) - -
Unsecured recoveries (note (b)) 1.0 2.5 -
12-month PD (note (c)) - 2.8 -
Macroeconomic model (note (d)) - 1.4 -
Macro LGD(note (e)) - (0.9) -
LGD recalibration (note (f)) - (3.1) -
Other 0.3 0.5 -
Total post model (under)/overlays (1.7) 3.2 -
(1) Refer to accounting polices for details of representation of fraud costs
(a) Origination PD recalibration
Monitoring of the origination 12-month Probability of Default indicated a
recalibration was required. A model underlay has been recognised until the
model can be updated in 2H25.
(b) Unsecured recoveries
The LGD model requires updating to reflect the charge-off policy
implemented in 2024. A model overlay has been recognised to until the model
can be updated in 2H25.
(c) 12-month PD recalibration
Monitoring of the 12-month PD model indicated a recalibration was required for
the 'up to date' segment. A model overlay was recognised in 2H24 and updated
in the core model in 2025.
(d) Macroeconomic model redevelopment
Refer to Cards section for details.
(e) Macroeconomic LGD implementation
Refinements have been made to the macroeconomic LGD model implementation to:
(i) reflect an upside scenario;
(ii) refine the shape of the scenarios; and (iii) enhance how the scenarios
were being applied. A model underlay was recognised in 2H24 and updated in the
core model in 2025.
(f) LGD recalibration
Following the introduction of the charge-off process and the revised
definition of default during 2024, calibrations were
required to components of the LGD model. A model underlay was recognised in
2H24 and updated in the core model in 2025.
The impairment charge/(credit) in respect of amounts receivable from customers
can be analysed as follows:
Six months ended
2025 2024(1)
unaudited unaudited
£m £m
Credit cards 64.0 63.5
Vehicle finance 12.7 29.5
Second Charge Mortgages 0.2 -
Total impairment charge - continuing operations 76.9 93.0
Discontinued operations (3.1) 4.8
Total impairment charge 73.8 97.8
(1) Refer to accounting policies for details of representation
The impairment charge in the income statement of £76.1m includes a credit of
£0.8m (FY24: charge of £1.2m; 1H24: £nil) in relation to loans held within
trade and other receivables. One of the loans was repaid in 1H25 and the
impairment provision released.
The movement in directly attributable acquisition costs included within
continuing operations amounts receivable from customers can be analysed as
follows:
Credit Cards Vehicle Finance Second Charge Mortgages Total
£m £m £m £m
Brought forward 1 January 2024 (audited) 32.3 56.0 0.1 88.4
Capitalised 3.2 15.8 1.2 20.2
Amortised (6.8) (15.8) (0.1) (22.7)
Written off - (3.1) - (3.1)
Carried forward 30 June 2024 (unaudited) 28.7 52.9 1.2 82.8
Brought forward 1 July 2024 28.7 52.9 1.2 82.8
Capitalised 2.6 15.8 8.0 26.4
Amortised (5.8) (15.6) (0.8) (22.2)
Written off - (3.4) - (3.4)
Carried forward 31 December 2024 (audited) 25.5 49.7 8.4 83.6
Brought forward 1 January 2025 (audited) 25.5 49.7 8.4 83.6
Capitalised 5.5 13.4 7.1 26.0
Amortised (4.1) (14.4) (1.7) (20.2)
Written off - (1.9) - (1.9)
Carried forward 30 June 2025 (unaudited) 26.9 46.8 13.8 87.5
10. Goodwill
30 June 2025 31 December 30 June
unaudited 2024 2024
audited unaudited
£m £m £m
Cost
At 1 January 3.3 74.5 74.5
Additions - - -
Write off - (71.2) -
At 30 June/31 December 3.3 3.3 74.5
Accumulated impairment
At 1 January and 31 December 2.1 2.1 2.1
Net book value at 30 June/31 December 1.2 1.2 72.4
Net book value at 1 January 1.2 72.4 72.4
Goodwill with a net book value of £71.2m was written off in 2H24 in relation
to the acquisition of Moneybarn in August 2014. The goodwill was written off
in full due to lower cash flows in the latest budget as the Group prioritises
capital deployment for growth into Second Charge Mortgages and Credit Cards in
the near-term.
The remaining £1.2m goodwill relates to the acquisition of Snoop in 2023.
Goodwill is tested annually for impairment, or more frequently if there are
any indications that goodwill might be impaired. The recoverable amount is
determined from a value in use calculation. The key assumptions used in the
value in use calculation relate to the cash flows of the cash generating unit,
discount rates and growth rates adopted.
Management adopts pre-tax discount rates which reflect the time value of money
and the risks specific to the business.
There were no indications of impairment in relation to the Snoop goodwill in
1H25.
11. Other intangible assets
30 June 2025 unaudited 31December 2024 audited
Acquisition intangibles Computer Software Total Acquisition intangibles Computer Software Total
£m £m £m £m £m £m
Cost
At 1 January 86.1 82.1 168.2 86.1 85.1 171.2
Additions - 7.3 7.3 - 12.5 12.5
Disposals - (5.7) (5.7) - (15.5) (15.5)
At 30 June/31 December 86.1 83.7 169.8 86.1 82.1 168.2
Accumulated amortisation and impairment
At 1 January 76.6 30.1 106.7 70.4 26.4 96.8
Charged to the income statement 0.6 4.5 5.1 6.2 10.7 16.9
Impairment - - - - 8.5 8.5
Disposals - (4.5) (4.5) - (15.5) (15.5)
At 30 June/31 December 77.2 30.1 107.3 76.6 30.1 106.7
Net book value
At 30 June/31 December 8.9 53.6 62.5 9.5 52.0 61.5
At 1 January 9.5 52.0 61.5 15.7 58.7 74.4
30 June 2024 unaudited
Acquisition intangibles Computer software Total
£m £m £m
Cost
At 1 January 86.1 85.1 171.2
Additions - 4.5 4.5
Disposals - (14.2) (14.2)
At 30 June 86.1 75.4 161.5
Accumulated amortisation and impairment
At 1 January 70.4 26.4 96.8
Charged to the income statement 4.2 6.0 10.2
Impairment - 8.5 8.5
Disposals - (14.2) (14.2)
At 30 June 74.6 26.7 101.3
Net book value
At 30 June 11.5 48.7 60.2
At 1 January 15.7 58.7 74.4
Acquisition intangibles represent the fair value of the broker relationships
arising on the acquisition of Moneybarn in August 2014 and the platform,
technology and brand name in relation to Snoop in 2023.
The Moneybarn intangible asset was being amortised over an estimated useful
life of 10 years, the asset was fully amortised in 2024. The Snoop intangible
asset comprised £10.1m of internally generated core platform and technology,
and £1.0m in relation to the 'Snoop' brand name arising on the acquisition of
Snoop in 2023. These are being amortised over 9 and 5 years respectively.
Additions to computer software of £7.3m (FY24: £12.5m; 1H24: £4.5m)
comprise costs associated with the Gateway platform development.
Included with discontinued operations is amortisation of £0.2m (FY24: £1.4m;
1H24: £0.7m) and the loss on disposal of £1.2m (FY24: £nil; 1H24: £nil).
The disposal relates to the write down of redundant IT systems used to support
the loans business.
In 1H24 and FY24 £8.5m of impairment relates to the write down of development
costs for a mobile app which was considered redundant.
12. Retirement benefit asset
The Group operates a defined benefit scheme: the Provident Financial Staff
Pension Scheme. The scheme is of the funded, defined benefit type. It is now
also closed to future accrual.
The scheme provides pension benefits which were accrued on a final salary and,
more recently, on a cash balance basis. With effect from 1 August 2021, it was
fully closed to future accrual and benefits are no longer linked to final
salary, although accrued benefits are subject to statutory inflationary
increases.
The scheme is a UK registered pension scheme under UK legislation. The scheme
is governed by a Trust Deed and Rules, with trustees responsible for the
operation and governance of the scheme. The trustees work closely with the
Group on
funding and investment strategy decisions. The most recent completed actuarial
valuation of the scheme was carried out as at 1 June 2021 by a qualified
independent actuary. The 1 June 2024 actuarial valuation is ongoing and
expected to be completed in 2H25.
The valuation used for the purposes of IAS 19 'Employee Benefits' has been
based on the preliminary results of the 2024 valuation to take account of the
requirements of IAS 19 in order to assess the liabilities of the scheme at the
balance sheet date. Scheme assets are stated at fair value as at the balance
sheet.
The Group is entitled to a refund of any surplus, subject to tax, if the
scheme winds up after all benefits have been paid. As a result, the Group
recognises surplus assets under IAS 19.
The Group is exposed to a number of risks, the most significant of which are
as follows:
- Investment risk - the liabilities for IAS 19 purposes are
calculated using a discount rate set with reference to corporate bond yields.
If the assets underperform this yield a deficit will arise. The scheme has a
long-term objective to reduce the level of investment risk by investing in
assets that better match liabilities.
- Change in bond yields - a decrease in corporate bond yields will
increase the liabilities, although this will be partly offset by an increase
in matching assets.
- Inflation risk - some of the liabilities are linked to inflation.
If inflation increases then liabilities will increase, although this will be
partly offset by an increase in assets. As part of a long-term de-risking
strategy, the scheme has increased its portfolio in inflation matched assets.
- Life expectancies - the scheme's final salary benefits provide
pensions for the rest of members' lives (and for their spouses' lives). If
members live longer than assumed, then the liabilities in respect of final
salary benefits increase.
The net retirement benefit asset recognised in the balance sheet of the Group
is as follows:
30 June 31 December 30 June
2025 2024 2024
unaudited audited unaudited
£m £m £m
Fair value of scheme assets 447.5 453.7 481.0
Present value of defined benefit obligation (434.8) (425.9) (446.6)
Net retirement benefit asset recognised in the balance sheet 12.7 27.8 34.4
The amounts recognised in the income statement were as follows:
2025 2024
unaudited unaudited
£m £m
Administration costs and taxes (0.9) (0.5)
Interest on scheme liabilities (11.5) (10.9)
Interest on scheme assets 12.3 11.7
Net (charge)/credit recognised in the income statement (0.1) 0.3
The net (charge)/credit recognised in the income statement has been included
within operating costs.
Movements in the fair value of scheme assets were as follows:
30 June 31 December 30 June
2025 2024 2024
unaudited audited unaudited
£m £m £m
Fair value of scheme assets at 1 January 453.7 512.9 512.9
Interest on scheme assets 12.3 23.4 11.7
Actuarial movements on scheme assets (6.8) (54.6) (31.4)
Contributions by the Group 0.4 0.8 0.4
Net benefits paid out (12.1) (28.8) (12.6)
Fair value of scheme assets at period end 447.5 453.7 481.0
Movements in the present value of the defined benefit obligation were as
follows:
30 June 31 December 30 June
2025 2024 2024
unaudited audited unaudited
£m £m £m
Present value of defined benefit obligation at 1 January (425.9) (474.7) (474.7)
Current service cost (0.9) (1.3) (0.5)
Interest on scheme liabilities (11.5) (21.7) (10.9)
Actuarial movement - experience (11.1) 0.2 26.9
Actuarial movement - demographic assumptions (5.1) (0.9) -
Actuarial movement - financial assumptions 7.6 43.7 -
Net benefits paid out 12.1 28.8 12.6
Present value of defined benefit obligation at period end (434.8) (425.9) (446.6)
The principal actuarial assumptions used at the balance sheet date were as
follows:
30 June 31 December 2024 30 June 2024
2025 audited unaudited
unaudited
% % %
Price inflation - RPI 2.95 3.20 3.25
Price inflation - CPI 2.45 2.75 2.75
Rate of increase to pensions in payment 2.90 3.00 3.00
Inflationary increases to pensions in deferment 2.45 2.75 2.75
Discount rate 5.65 5.55 5.25
The pension increase assumption shown above applies to pensions increasing in
payment each year in line with RPI up to 5%. Pensions accrued prior to 2000
are substantially subject to fixed 5% increases each year. In deferment
increases prior to retirement are linked to CPI.
The mortality assumptions are based on the self-administered pension scheme
(SAPS) series 4 tables (FY24 and 1H24: SAPS series 3 tables):
- female non-pensioners: 110% of the 'All' table (FY24 and 1H24:
105% of the 'Middle' table);
- male non-pensioners: 113% of the 'All' table (FY24 and 1H24: 105%
of the 'Middle' table);
- female pensioners: 110% of the 'All' table (FY24 and 1H24: 102% of
the 'Middle' table); and
- male pensioners: 99% of the 'All' table (FY24 and 1H24: 99% of the
'All' table).
The above multipliers and table types were chosen following a study of the
scheme's membership. Where the multiplier is greater than 100%, this reflects
a shorter life expectancy within the scheme compared to average pension
schemes, with the opposite being true where the multiplier is less than 100%.
Future improvements in mortality are based on the Continuous Mortality
Investigation (CMI) 2023 model with a long‑term trend of 1.00% pa, the core
parameters for the initial addition and smoothing parameter but with a
weighting of 0%, 0%, 25% and 25% on 2020, 2021, 2022 and 2023 experiences
respectively. All other available parameters for the mortality improvements
model were adopted at the default (core) level. Under these mortality
assumptions, the life expectancies of members are as follows:
If the discount rate decreased by 0.5% (FY24: 0.5%, 1H24: 0.5%), the defined
benefit obligation (not including any impact on assets) would have been
increased by approximately £24m (FY24: £24m, 1H24: £27m).
Male Female
30 June 2025 31 December 30 June 2024 30 June 2025 31 December 30 June 2024
unaudited 2024 unaudited unaudited 2024 unaudited
audited audited
Years Years Years Years Years years
Current pensioner aged 65 21.1 21.2 21.2 22.9 23.0 23.0
Current member aged 45 from age 65 21.1 21.2 21.1 24.0 24.0 23.9
An analysis of amounts recognised in the statement of comprehensive income is
set out below:
30 June 31 December 2024 30 June 2024
2025 audited unaudited
unaudited
£m £m £m
Actuarial movements on scheme assets (6.8) (54.6) (31.4)
Actuarial movements on scheme liabilities (8.6) 43.0 26.9
Total movement recognised in other comprehensive income in the year (15.4) (11.6) (4.5)
Cumulative movement recognised in other comprehensive income (175.3) (159.9) (152.8)
13. Fair value disclosures
The Group holds the following financial instruments at fair value:
30 June 31 December 2024 30 June 2024
2025 audited unaudited
unaudited
£m £m £m
Financial assets 2.0 - 1.1
Derivatives
Visa Inc. shares 2.3 2.3 5.1
4.3 2.3 6.2
Financial liabilities
Derivatives (7.0) (1.8) (9.6)
The Group is counterparty to ten (FY24: three, 1H24: three) derivative
financial instruments.
The securitisation balance guarantee swap (front BGS) of £2.5m liability
(FY24: £0.3m liability, 1H24: £1.1m asset) manages the market risk
associated with movements in interest rates in the accounts of the
securitisation. The front BGS is a bespoke over-the-counter interest rate swap
that resizes in line with changes to the size and expected maturity profile of
the loans in the securitisation. Only the interest rate risk on the portfolio
is hedged; other risks such as credit risk are managed but not hedged.
The Group balance guarantee swap (back BGS) of £2.0m asset (FY24: £0.2m
liability, 1H24: £1.6m liability) eliminates the front BGS on consolidation
in the Group accounts. The front BGS manages a risk that exists in the SPV
accounts, but does not exist upon consolidation. The back BGS was transacted
at historical rates and in compensation the Group received cash consideration
for taking on a liability.
The front and back BGS naturally hedge and no hedge accounting is applied.
Hedge accounting was discontinued on the front BGS in September 2022 with the
hedging adjustment amortising over the remaining life of the receivables.
Until termination, the hedging arrangement was accounted for under IAS 39
under the portfolio hedging rules.
The Tier 2 swap of £3.7m liability (FY24: £1.3m, 1H24: £8.0m) is a vanilla
unamortising swap that manages the Group's sensitivity to changes in interest
rates arising from long-dated fixed-rate Tier 2 capital and short-dated Bank
of England reserves. The Tier 2 swap pays annually a floating rate of daily
compounded SONIA and receives a fixed annual rate of 3.521% bi-annually. The
swap matures in October 2026.
During 1H24 the Group entered into 7 additional swaps for hedging interest
rate risk in the Second Charge Mortgages portfolio and the Financial
Investments (UK Gilts) purchased during the period.
The 3 interest rate swaps for hedging the Second Charge Mortgages portfolio
are collectively valued at £0.1m liability (FY24: none) with maturities in
May 2028, May 2029 and May 2030. The swaps pay a fixed rate and receive a
floating daily compounded SONIA.
The 4 interest rate swaps for hedging the Financial Investments (UK Gilts) are
collectively valued at £0.7m liability (FY24: none) with maturities in March
2027, March 2028, June 2028, July 2029. The swaps pay a fixed rate and receive
a floating daily compounded SONIA.
Except as detailed in the following table, the directors consider that the
carrying value of financial assets and financial liabilities recorded at
amortised cost in the financial statements are approximately equal to their
fair values:
Carrying value Fair value
30 June 31 December 30 June 30 June 31 December 30 June
2025 2024 2024 2025 2024 2024
unaudited audited unaudited unaudited audited unaudited
£m £m £m £m £m £m
Financial assets
Amounts receivable from customers 2,325.1 2,153.7 2,008.5 2,738.4 2,488.5 2,332.5
Financial liabilities
Retail deposits (2,463.8) (2,428.2) (1,937.5) 2,424.6 (2,400.4) (1,908.7)
Bank and other borrowings (447.7) (410.0) (504.1) 431.1 (373.2) (483.0)
Total (2,911.5) (2,838.2) (2,441.6) 2,855.7 (2,773.6) (2,391.7)
14. Provisions
Customer compliance
£m Dilapidations Redundancy Settlement Scheme Others Total
£m £m £m £m £m £m
At 1 January 2024 3.5 0.3 - - 1.0 1.0 5.8
Created in the period 9.6 4.9 2.5 - - 0.1 17.1
Utilised in the period (4.9) - - - - (0.5) (5.4)
Released in the period - - - - (1.0) (0.2) (1.2)
At 30 June 2024 (unaudited) 8.2 5.2 2.5 - - 0.4 16.3
At 1 July 2024 8.2 5.2 2.5 - - 0.4 16.3
Created in the period 6.4 1.2 3.7 1.5 - - 12.8
Reclassified in the period - - - (1.4) - - (1.4)
Utilised in the period (7.2) - (4.9) - - - (12.1)
Released in the period - - - (0.1) - - (0.1)
At 31 December 2024 (audited) 7.4 6.4 1.3 - - 0.4 15.5
At 1 January 2025 7.4 6.4 1.3 - - 0.4 15.5
Created in the period 4.7 - - - - 4.7
Reclassified in the period - (0.3) - - (0.2) (0.5)
Utilised in the period (6.7) - (0.9) - - - (7.6)
Released in the period (2.9) - - - (2.9)
At 30 June 2025 (unaudited) 2.5 6.4 0.1 - - 0.2 9.2
Customer compliance: £2.5m (FY24: £7.4m: 1H24; £8.2m)
The customer remediation provision relates to general customer compliance
matters. This included the costs of processing a temporary uplift in unmerited
customer claims from CMCs up until the revised FOS fee structure was
implemented in2Q25. An amount for expected FOS fees is also included in the
provision.
Dilapidations: £6.4m (FY24: £6.4m; 1H24: £5.2m)
Additional dilapidations costs recognised in 2024 and provisions now being
held for all properties.
Redundancy £0.1m (FY24: £1.3m; 1H24: £2.5)
Costs expected to be paid out as part of redundancy programmes during the
year.
Legal Settlement £nil (FY24: £nil: 1H24: £nil)
Amounts were recognised in the year for an expected settlement with a third
party. The amount was agreed and the provision transferred to accruals in
advance of being settled in early 2025.
The Scheme of Arrangement (the Scheme): £nil (FY24: £nil: 1H24: £nil)
The Scheme of Arrangement was sanctioned on 30 July 2021 with the objective to
ensure all CCD customers with redress claims were treated fairly and
outstanding claims are treated consistently for all customers who submit a
claim under the Scheme. The remaining Scheme provision was fully released in
1H24.
Other: £0.2m (FY24: £0.4m; 1H24: £0.4m)
This predominantly relates to smaller provisions held.
15. Reconciliation of profit/loss after tax to cash (used in)/generated from
operations
Six months ended 30 June
2025 2024(1)
unaudited unaudited
Note £m £m
Profit/(loss) after taxation 5.6 (35.8)
Adjusted for:
- tax charge/(credit) 6 1.5 (10.7)
- finance costs 73.0 70.7
- finance income (21.7) (21.7)
- share-based payment charge 0.7 2.4
- retirement benefit charge/(credit) 12 0.1 (0.3)
- impairment of ROU asset - 2.4
- additions of ROU assets - 1.2
- provisions created in the year 14 4.7 17.1
- provisions released in the year 14 (2.9) (1.2)
- provisions utilised in the year 14 (7.6) (5.4)
- depreciation of property, plant and equipment and right of use assets 3.3 8.2
- loss on disposal of property, plant and equipment 0.2 0.1
- amortisation of intangible assets 11 5.1 10.2
-loss on disposal of intangible assets 11 1.2 8.5
- net fair value movement on derivative financial instruments 2.2 8.8
- fair value movements on Visa shares - 0.3
- contributions into the retirement benefit scheme 12 (0.4) (0.4)
Changes in operating assets and liabilities:
- amounts receivable from customers 9 (171.1) 148.6
- trade and other receivables 5.5 (27.5)
- trade and other payables 9.4 5.5
- retail deposits(1) 10.2 (38.6)
Cash (used in)/generated from operations (81.0) 142.4
(1) In line with FY24 reporting, the classification of certain cash flows has
been represented in 1H24, impacting £264.8m in proceeds and £303.4m in
repayments related to bank and other borrowings. These amounts, which are no
longer considered to be financing cashflows, are now reported within cash
generated from operations as a £38.6m movement in retail deposits.
16. Contingent liabilities
During the ordinary course of business the Group is subject to other
complaints and threatened or actual legal proceedings (including class or
group action claims) brought by or on behalf of current or former employees,
customers, investors or third parties. This extends to legal and regulatory
reviews, challenges, investigations and enforcement actions combined with tax
authorities taking a view that is different to the view the Group has taken on
the tax treatment in its tax returns. It also extends to tax authorities
taking the view that VAT exempt supplies received by the Group from UK-based
suppliers should be subject to VAT.
Vehicle Finance Commissions
On 25 October 2024, the Court of Appeal ruled against two other lenders in
three cases involving commission disclosures related to payments to motor
finance dealers. The judgment redefined the legal duties of dealers acting as
credit brokers, requiring clear disclosure of, and consent to, the existence,
nature and amount of any commission paid. The lenders successfully applied for
permission to appeal to the Supreme Court, which was heard in early April
2025, with the outcome on 1 August 2025.
The Supreme Court rejected the Court of Appeal's finding that car dealers were
fiduciaries. Dealers arranging finance as part of a car sale were acting in
their own commercial interest, not in single minded loyalty to the customer.
Without a fiduciary duty, commission payments could not amount to secret
bribes, and claims based on both fiduciary duty and bribery were rejected.
In one case (Johnson), the relationship was deemed unfair due to a range of
factors, including a disproportionately large commission (55% of finance
charge) which was not brought to his attention and a "first refusal"
arrangement despite messaging to the customer that a panel was being used to
find the best deal for them.
On 3 August 2025 the Financial Conduct Authority (FCA) announced its intention
to consult on a compensation scheme. The FCA will publish its full
consultation by early October 2025, and the consultation will be open for six
weeks. The scope is proposed to cover unfair relationships based on the
Supreme Court judgment. Any scheme will cover discretionary commission
arrangements (DCAs) and may extend to non-DCAs. The FCA will consider what
size of commission may point to unfairness if not disclosed. The methodology
for calculating redress will be informed by the degree of harm suffered by the
customer. The scheme is proposed to cover agreements going back to 2007.
As previously stated, the Group has never entered into any discretionary
commission arrangements on our Vehicle Finance products.
The Group's position is differentiated from the Johnson case on a number of
grounds, including, but not limited to:
1. The average commission of £695 paid as a
percentage of the credit charge, at c.13% for the period 26 October 2013 to 25
October 2024 was much lower than the 55% in the Johnson case.
2. All historical commissions were aligned with
regulatory requirements with them being a flat fee or fixed percentage of the
loan.
3. Vanquis did not operate "right of first refusal"
arrangements based on a review of introducer agreements.
4. Customers were provided with signed pre-contractual
documents, written in clear language, confirming a commission would be paid.
5. Disclosures were better than regulatory
requirements, including customers providing express consent to most credit
agreements.
For the period 26 October 2013 to 25 October 2024, the Group had an immaterial
number of cases where the commission paid as a percentage of the total credit
exceeded 50%. Taking all factors into consideration, any payout on these
contracts is still not considered probable.
The Group has assessed the requirement for a provision and as at 30 June 2025
no amounts have been recognised. This is due primarily to the conclusion of
the review undertaken at 31 December 2024 for which the Supreme Court rulings
on fiduciary duty and bribery have clarified the legal position on these
matters. It also reflects the parameters referenced by the FCA in their
consultation on a compensation scheme relating to unfair relationships.
Vanquis consider its circumstances to be materially different and that any
outflow is not considered probable.
17. Post Balance Sheet events
The outcome from the Supreme Court judgment regarding motor finance commission
disclosure practices on 1 August 2025 and the FCA's intention to consult on a
motor finance compensation scheme announced on the 3 August 2025 have been
considered in note 16.
Directors' responsibility statement
The directors confirm that, to the best of their knowledge, the unaudited
condensed interim financial statements have been prepared in accordance with
IAS 34 as contained in UK adopted IFRS, and that the interim report includes a
fair review of the information required by DTR 4.2.4R, DTR 4.2.7R and DTR
4.2.8R, namely:
· An indication of important events that have occurred during the
first six months of the financial year and their impact on the unaudited
condensed interim financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the financial year;
and
· Material related party transactions that have occurred in the
first six months of the financial year and any material changes in the related
party transactions described in the last annual report and financial
statements.
A list of current directors is maintained on the Vanquis Banking Group plc
website: www.vanquis.com (http://www.vanquis.com) . All directors were present
throughout the six months ended 30 June 2025.
The maintenance and integrity of the Vanquis Banking Group website is the
responsibility of the directors. The work carried out by the auditor does not
involve consideration of these matters and, accordingly, the auditor accept no
responsibility for any changes that may have occurred to the unaudited
condensed interim financial statements since they were initially presented on
the website.
Legislation in the United Kingdom governing the preparation and dissemination
of unaudited condensed interim financial statements may differ from
legislation in other jurisdictions.
By order of the board
Ian McLaughlin - Chief Executive Officer Dave Watts - Chief
Financial Officer
6 August 2025
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