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Building a resilient,
sustainable business
Annual Report and Accounts 2021
OSB GROUP PLC Annual Report and Accounts 2021

Introduction
Who we are
Our Purpose
Our Values
OSB Group is a leading specialist
mortgage lender, primarily focused
oncon carefully selected sub-segments
oftf the mortgage market. Our continued
success is driven by strong relationships
with all our stakeholders.
To help our customers, colleagues
and communities prosper.
Our Values are what our employees
stand by, and support us in
achievingour Purpose.

1
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Find out more online
Our corporate website gives
direct access to a wide range
of information about the OSB Group:
www.osb.co.uk
Overview
02 Highlights
04 Why invest in OSB Group?
06 Chairman’s Statement
Strategic Report
10 Our business model
16 Relationships with our
key stakeholders
19 Section 172 Statement
20 Market review
24 Chief Executive Officer’s Statement
28 Strategic framework
30 Segments review
40 Wholesale funding review
42 Key performance indicators
44 Financial review
50 Risk review
58 Principal risks and uncertainties
74 Viability statement
76 ESG Framework
78 Environment
86 Task Force on Climate-Related
Financial Disclosures
94 Social responsibility
106 Non-financial information statement
Corporate Governance Report
Directors’ Report
116 Board of Directors
118 Group Executive team
121 Corporate Governance Statement
130 Group Nomination and
Governance Committee Report
134 Group Audit Committee Report
141 Group Risk Committee Report
143 Other Committees
144 Directors’ Remuneration Report
164 Directors’ Report: Other Information
167 Statement of Directors’
Responsibilities
Financial Statements and
Notes
170 Independent Auditor’s Report
180 Consolidated Statement of
Comprehensive Income
181 Consolidated Statement of Financial
Position
182 Consolidated Statement of Changes
in Equity
183 Consolidated Statement of Cash
Flows
184 Notes to the Consolidated Financial
Statements
Appendices
245 Independent assurance statement
246 Alternative performance measures
249 Glossary
250 Company information
251 Independent assurance report
onESEF

Fully loaded Common Equity
Tier 1 ratio
19.6%
18.3%
2021 2020
G
ross new lending
Δ
£4.5bn
£3.8bn
2021 2020
Net loan book
£21.1bn £20.9bn£19.2bn £19.0bn
2021 20212020 2020
Return on equity
Δ
20%
24%
13%
19%
2021 20212020 2020
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OSB GROUP PLC Annual Report and Accounts 2021
Delivering
exceptional returns
Financial KPIs
Throughout the Strategic report,
theKey performance indicators
(KPIs)are presented on a statutory
andan underlying basis.
Management believe that the underlying KPIs
provide a more consistent basis for comparing the
Group’s performance between financial periods.
Underlying KPIs exclude exceptional items,
integrationcosts and other acquisition-related
items.For a reconciliation of statutory to
underlyingKPIs, see the Appendix.
The Group’s external auditor performed an
independent reasonable assurance review of
certainKPIs as highlighted with the symbol  –
see the Appendix forthe auditor’s statement.
Highlights
Key:
Statutory 2021
Underlying 2021
Statutory 2020
Underlying 2020
+ 20%
+ 10% + 10%
+ 7ppts + 5ppts
+ 1.3ppt
Group 2021
Group 2020
For more information on the
Financial review, see page 44

Basic EPS
Δ
(pence per share)
76.0p
86.7p
42.8p
58.1p
2021 20212020 2020
Cost to income ratio
Δ
26%
24%
31%
27%
2021 20212020 2020
Full year dividend
Δ
(pence per share)
26.0p
14.5p
2021 2020
Loan loss ratio
Δ
-2bps -2bps
38bps 38bps
2021 20212020 2020
Net interest margin
Δ
253bps
282bps
216bps
247bps
2021 20212020 2020
Profit before tax
£464.6m
£522.2m
£260.4m
£346.2m
2021 20212020 2020
Women in senior management
1
32%
30%
2021 2020
Savings customer satisfaction
– Net Promoter Score
+70
+71
+67
+72
OSB CCFS
2021 20212020 2020
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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Non-financial KPIs
+ 37bps + 35bps - 5ppts - 3ppts + 2ppts
- 40bps - 40bps + 78% + 51%
10.2%
+ 78% + 49% + 79%
+ 3
- 1
1. Employees undertaking roles at Grades A to E.
2. Operational footprint is defined as Scope 1, Scope
2 and Scope 3 (paper, water, waste, business
travel, electricity transmission and distribution)
emissions and excludes upstream and downstream
emissions from the Group’s value chain.
Reduction in operational carbon
footprint
2
against 2019 baseline

4
OSB GROUP PLC Annual Report and Accounts 2021
OSB Group is a leading
specialist mortgage lender;
what makes us different is
ourunique business model
andour exceptional returns.
Why invest in OSB Group?
Leader in
growingmarket
sub-segments
OSB Group is a leading mortgage lender
in professional Buy-to-Let and specialist
Residential market sub-segments.
Our target market sub-segments are
supported by the fundamental lack of
affordable housing in the UK.
The owner-occupied and private rental
housing market segments have stood firm
throughout 2021 with customer demand
supported by additional government
stimulus, including the Stamp Duty Land
Tax holiday.
The Combination with CCFS in 2019
strengthened our position and allowed
us to provide our recognised high-quality
service to a wider reach of customers.
The Group’s share of new business in the
Buy-to-Let segment was c. 6% in 2021,
as we controlled lending with a tighter
risk appetite during the first half, and
delivered leading returns.
For more information on UK mortgage
market, see page 20.
Our competitive
advantage
The Group focuses on market sub-
segments where its specialist approach
to underwriting offers a key source of
differentiation.
Following the Combination with CCFS,
the Group offers a unique breadth of
complementary yet differentiated lending
propositions to our customers, ranging
from speedy decisions for ‘off the peg’
solutions from our Precise Mortgages
brand, through to structuring unique
‘bespoke’ solutions through InterBay
Commercial brand. Our greater scale
and increasing ability to generate cost
efficiencies from the Group’s fully owned
subsidiary, OSB India, have enabled
us to deliver a consistently strong cost
to income ratio, whilst still investing in
the business to support our strategic
priorities. OSB Group remains the most
cost-efficient bank in the sector.
Integrating the two Banks has also
led to a more sophisticated and
diversified funding model in both
retail savings and wholesale markets,
ensuring constant and efficient access
to funding and liquidity supporting
the optimisation of cost of funds.
Exceptional returns
driven byattractive
margins and growth
opportunities
Throughout its history, the Group
has consistently generated a market-
leading return on equity (RoE), driven by
attractive margins, significant growth in
its specialist market sub-segments and
sound risk management.
The Group’s business model is based on
a secured balance sheet, strong capital
and liquidity positions and prudent and
diligent risk management, which provide
a solid platform for growth at attractive
returns.
In 2021, the Group’s achievements
included:
} underlying RoE of 24% and statutory
RoE of 20%;
} 10% net loan book growth;
} strong cost discipline and efficiency
with an underlying cost to income ratio
of 24% and 26% on a statutory basis;
and
} discipline in lending decisions with a
progressive return to pre-pandemic
criteria.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Highly capital-
generative business
with strong potential
for capital distribution
The Group is strongly capitalised with
aproven track record of capital generation
through profitability. This allows it to
support significant growth as well as
distributions to shareholders.
The strong capital position and our
performance in 2021 enabled the Group
to announce additional returns for
shareholders through a £100m share
repurchase programme and a final
dividend for 2021 of 21.1 pence per share,
which together with the 2021 interim
dividend of 4.9 pence represents 30% of
underlying profit attributable to ordinary
shareholders (2020: 25%). At the end of
2021, the Group’s CET1 ratiowas 19.6% and
total capital ratio was21.2%.
For more information on the Board’s capital
management approach, see page 19.
Experienced
leadership team
The Group is managed by an experienced
and well-respected leadership team
and governed by a Board with a broad
range of skills and expertise. The
leadership team has a long track record in
operational management and delivering
sustainable returns for shareholders.
Post Combination, we have taken two
great cultures and combined them
as one under common Values and a
common Purpose, to help our customers,
colleagues and communities prosper. This
ensures we act positively with conscience
and have environmental, social and
governance (ESG) matters front of
mind when shaping and managing our
business.
Focus on
sustainability
In 2021, the Group formalised its
approach to environmental, social and
governance matters and consolidated
them into its ESG Framework. These
matters form part of the Group strategy
and risk management framework. In 2021,
we further embedded ESG throughout
the business and we are setting ambitious
targets for the future.
OSB Group recognises the importance of
operating sustainably as a business and
considers a wide range of matters from
climate change to diversity and inclusion.
For more information on the Group’s ESG
Framework, see page 76.

6
OSB GROUP PLC Annual Report and Accounts 2021
OSB GROUP PLC
Annual Report and Accounts 2021
Chairman’s Statement
In 2021 we successfully negotiated the continuing
challengespresented by the pandemic and the business
delivered exceptional results, whilst largely completing the
integration of CCFS. The increased scale of our tried and
tested business model is proving resilient and competitive
generating attractive returns for our owners across the
cycle.I am confident that notwithstanding the uncertainties
created by geopolitical events, the Group is well positioned
for the future.
In 2021, the Board was
particularly focused on
sustainability.
David Weymouth
Non-Executive Chairman

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Our colleagues have continued to provide
the high levels of service our customers
expect, whether from our support centres,
our branches, or our operations in India.
I would like to thank all of them for
their professionalism, commitment and
flexibility during another testing year.
The Group has a very strong capital
position and continues to generate
significant levels of capital through
profitability. The Board has reviewed our
existing and future capital requirements
and I am pleased to announce a £100m
share buyback programme. In addition
the Board is recommending a 26 pence
per share full year dividend for 2021,
equivalent to a payout ratio of 30%
(2020: 25%). We are committed to
returning any additional excess capital to
our shareholders and intend to update the
market once greater clarity is obtained
on the impact of BASEL 3.1 and its timing
versus our IRB accreditation.
1. Net zero is defined as a reduction in Scope 1, 2,
and 3 emissions to zero or to a residual level that
is consistent with reaching net zero emissions at
the global or sector level in eligible 1.5°C aligned
pathways.
The Board spent time in 2021 reflecting
on how we best align our business with
the critically important, but rapidly
evolving expectations of our stakeholders
represented by the ESG agenda. We have
designated one of our Non-Executive
Board members, Sarah Hedger, to help
shape and oversee our endeavours in
this area, led by an Executive Committee
supported by appropriate full time
resource. We developed a broad based
ESG Framework which is presented on
page 76. Our overall goal is to ensure that
by operating within that Framework our
business remains relevant and is governed
to the highest standards.
As a first concrete step, we have
committed the Group to be carbon
neutral (for direct emissions) in
2022 through reduction initiatives,
supplemented by emissions removals
credits where required. In addition, we are
targeting net zero greenhouse emissions
1
by 2050 and are developing plans to
achieve that.
I am very pleased to welcome our new
Board member Simon Walker, who joined
in January 2022. He joins after a long
career in professional practice focusing
on banking with particular expertise in
mortgages and risk management.
Future prospects
Predicting future geopolitical and
economic developments would
be foolhardy. On the other hand,
inflationary pressure on household
income is a certainty. Our commitment to
a resilient business model, underpinned
by deep expertise in understanding
the market sub-segments in which we
operate, is consistently delivering robust
outcomes. We remain confident in our
ability to generate attractive returns that
are genuinely sustainable throughout
thecycle.
David Weymouth
Chairman
17 March 2022

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OSB GROUP PLC Annual Report and Accounts 2021
Strategic report
10 Our business model
16 Relationships with our key stakeholders
19 Section 172 Statement
20 Market review
24 Chief Executive Officer’s Statement
28 Strategic framework
30 Segments review
40 Wholesale funding review
42 Key performance indicators
44 Financial review
50 Risk review
58 Principal risks and uncertainties
74 Viability statement
76 ESG Framework
78 Environment
86 Task Force on Climate-Related Disclosures
94 Social responsibility
106 Non-financial information statement

9
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Strong relationships,
built on regular engagement
and open dialogue with all our
stakeholders, are central to the
Group’s strategy and culture.

10
OSB GROUP PLC Annual Report and Accounts 2021
Our Purpose is to help our customers,
colleagues and communities prosper.
Our business model
Our key strengths:
} Strong levels of mortgage origination
} Excellent loan performance
} Award-winning product propositions
} Strong relationships with
intermediaries
Strategic priorities:
} Be a leading specialist lender in
ourchosen market sub-segments
} Retain focus on our complementary
underwriting platforms: OSB’s bespoke
and manual approach and CCFS’
automated risk assessment platforms
} Further deepen relationships and
distribution with intermediaries
} Provide thought leadership and
assist our borrowers in reducing their
greenhouse gas emissions
Our key strengths:
} Stable savings funding via
KentReliance and Charter
SavingsBank brands
} Capital markets expertise with
securitisation platforms allowing
for programmatic issuance of high-
quality residential mortgage-backed
securities (RMBS)
Strategic priorities:
} Provide cost-efficient funding through
resilient and diversified funding
platforms to support our future growth
} Deliver consistently good-value
savings products to our customers
} Pursue sophisticated wholesale
funding and efficient balance sheet
management
} Leverage investment grade corporate
rating for further diversification
Our key strengths:
} OSB India: Best-in-class
customerservice
} Deep credit expertise and data
analytics of CCFS
} Continued, disciplined cost
management
Strategic priorities:
} Continue to leverage our unique and
cost-efficient operating model
} Leverage deep credit expertise and
data analytics
} Maintain an efficient, scalable and
resilient infrastructure
} Reduce environmental impact of
ouroperations
Resources and relationships What we do
Our team of highly skilled employees possess
expertise and in-depth knowledge of the lending,
property, capital and savings markets, underwriting
and risk assessment and customer management.
We benefit from cost and efficiency advantages
provided by our wholly-owned subsidiary, OSB
India, as well as credit expertise and mortgage
administration services provided by CCFS.
Our strong and deep relationships with the
mortgage intermediaries that distribute our
products continue to win usindustry recognition.
We have a strong CET1 ratio and capability to
generate capital through profitability. The Board
is focused on capital strength and delivering
shareholder returns.
Brands and heritage
Employees
Infrastructure
Capital strength
Relationships with
intermediaries and customers
We have a family of specialist lending brands
targeting selected sub-segments of the mortgage
market which are underserved by large UK banking
institutions. We have well-established savings
franchises through Kent Reliance, with its 150-year
heritage and the Charter Savings Bank brands.
Specialist mortgage lending
Sophisticated funding platforms
Unique operating model

OSB segment
net loans
Buy-to-Let/SME 82%
Residential 18%
CCFS segment
underlying net loans
Buy-to-Let 70%
Residential 27%
Bridging 1%
Second charge 2%
Group’s funding
channels as at
31 December 2021
Retail 79%
Bank of England 19%
Wholesale 2%
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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
To achieve our Purpose, we operate in a sustainable way
with the relevant environmental, social and governance
matters at the heart of our business. We are aligned to
a strong governance framework and we recognise the
needs and differences of our stakeholders.
Statutory net loans
to customers
£21.1bn
2020: £19.2bn
Statutory
basicEPS
76.0p
Dividend
pershare
26.0p
OSB savings
customerNPS
1
+70
OSB customer
retention
2
90%
CCFS savings
customerNPS
1
+71
CCFS customer
retention
2
85%
OSB broker NPS
1
+55
CCFS broker NPS
1
+42
Women in senior
management
roles
3
32%
Number of
Groupemployees
promoted in 2021
176
Reduction in operational carbon
footprint
4
against 2019 baseline
10.2%
Group sponsorships and donations
nearly £395k
Statutory retail deposits
£17.5 bn
2020: £16.6bn
Statutory cost to
income ratio
26%
2020: 31%
571
colleagues employed
atOSB India as at
31 December2021
2020: 493
21
securitisations since
2013across OSB and
CCFSworthover
£9.8bn
2020: 19 securitisations
worth £7.9b n
Read more on pages 12 to 13
Read more on page 14
Read more on page 15
1. OSB customer NPS score relates to Kent Reliance savings customers; CCFS customer NPS relates to Charter Savings Bank
customers; OSB broker NPS relates to Kent Reliance brokers and CCFS broker NPS relates to Precise Mortgage brokers.
2. Retention is defined as average maturing fixed contractual retail deposits that remain with the Bank on their maturity date.
3. Employees undertaking roles at Grades A to E.
4. Operational footprint is defined as Scope 1, Scope 2 and Scope 3 (paper, water, waste, business travel, electricity transmission
and distribution) emissions and excludes upstream and downstream emissions from the Group’s value chain.
Outcomes and value creation
For savings customers
For shareholders
For intermediaries
For employees
For the environment
For our communities

12
OSB GROUP PLC Annual Report and Accounts 2021
Our business model explained
Specialist mortgage lending
The complementary strengths and enhanced customer propositions from
the Group’s diverse brands support our goal to become a leading specialist
lender in the UK. The Group reports its lending business under two segments.
Gross loan book
1
£12.1bn
2020: £11.1bn
Organic originations
£2.4bn
2020: £1.9bn
Net interest income
1
£414.8m
2020: £332.8m
Read more on pages 31 to 35
Through our brands we tailor our lending proposition to the specific needs of
our borrowers. Under our Kent Reliance and InterBay brands all of our loans are
underwritten by experienced and skilled underwriters, supported by technology to
reduce the administrative burden on underwriters and mortgage intermediaries.
We refer to scorecards and bureau data to support our skilled underwriter loan
assessments. We consider each loan on its own merits, responding quickly and flexibly
to offer the best solution for each of our customers. No case is too complex for us,
and for those borrowers with more tailored or larger borrowing requirements, our
Transactional Credit Committee meets three times each week, demonstrating our
responsiveness to broker needs.
Buy-to-Let
We provide loans to limited companies
and individuals, secured on residential
property held for investment purposes.
We target experienced and professional
landlords or high net worth individuals
with established and extensive property
portfolios.
Commercial mortgages
We provide loans to limited companies
and individuals, secured on commercial
and semi-commercial properties held
for investment purposes or for owner-
occupation.
Residential development
We provide development loans to
small and medium-sized developers of
residential property.
Funding lines
We provide loans to non-bank finance
companies secured against portfolios of
financial assets, principally mortgages.
Asset finance
We provide loans under hire purchase,
leasing and refinancing arrangements to
UK SMEs and small corporates to finance
business-critical assets.
First charge
We provide loans to individuals, secured
by a first charge against their residential
home.
Our target customers include those with
a high net worth and complex income
streams and near-prime borrowers.
We are also experts in shared ownership,
lending to first-time buyers and key
workers buying a property in conjunction
with a housing association.
Funding lines
We provide funding lines to non-bank
lenders who operate in high-yielding,
specialist sub-segments such as
residential bridge finance.
OneSavings Bank segment
Buy-to-Let/SME sub-segments
Residential sub-segments
1. Statutory.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Gross loan book
2
£9.0bn
2020: £8.0bn
Organic originations
£2.2bn
2020: £1.9bn
Net interest income
2
£235.7m
2020: £201.2m
Read more on pages 36 to 39
Buy-to-Let
We provide products to professional and
non-professional landlords with good
quality credit histories, through a wide
product offering, including personal and
limited company ownership.
Residential
We provide a range of competitive
products to prime borrowers, complex
prime borrowers (including self-
employed, Help to Buy and new build)
and near-prime borrowers.
Bridging
We focus on lending to customers who
need to fund short-term cash flow needs,
for example, to cover light refurbishments,
home improvements, auction purchases
and to ‘bridge’ delays in obtaining
mortgages and ‘chain breaks’.
Second charge
We offer loans to prime residential
customers with low loan to value ratios,
who require additional capital and who
wish to secure a loan with a charge
against a property which is already
charged to another lender.
Our Precise Mortgages brand uses an automated underwriting platform to manage
mortgage applications and to deliver a rapid decision in principle, based on rigorous
lending policy rules and credit scores. The platform is underpinned by extensive
underwriting expertise, enabling identification of new niches and determining
appropriate lending parameters. The platform enables Precise Mortgages to react
quickly to non-standard mortgage requests which are common in the Group’s target
market sub-segments, while ensuring consistent underwriting within the Group’s risk
appetite. Quick response times help the Group to compete for the ‘first look’ at credit
opportunities, while a robust manual verification process further strengthens the
disciplined approach to credit risk.
Charter Court Financial Services segment
2. Underlying.

14
OSB GROUP PLC Annual Report and Accounts 2021
Our business model explained (Continued)
Statutory retail deposits
£17.5 bn
2020: £16.6bn
Securitisations
21
securitisations since 2013,
across OSB and CCFS, worth over
£9.8bn
2020: 19 securitisations worth over
£7.9b n
Read more on page 40
The Group is predominantly funded by
retail savings deposits sourced through
two brands: Kent Reliance and Charter
Savings Bank (CSB).
Kent Reliance is an award-winning retail
savings franchise with over 150 years of
heritage and nine branches in the South
East of England. It also takes deposits via
post, telephone and online, while CSB, a
multi- award-winning retail savings bank,
offers its products online and via post.
Both Banks have a wide range of savings
products, including easy access, fixed
term bonds, cash ISAs and business
savings accounts. CSB and Kent
Reliance have diversified their retail
funding sources through pooled funding
platforms. The range of products sourced
via these platforms includes easy
access, longer term bonds and non-retail
deposits.
In 2021, CSB won many industry awards,
including the prestigious Moneyfacts
Consumer Awards for Online Savings
Provider of the Year and ISA Provider of
the Year.
Kent Reliance’s proposition for savers is
simple: to offer consistently good-value
savings products that meet customer
needs for cash savings and loyalty rates
for existing customers.
CSB’s philosophy is to maintain and
develop its award-winning business
offering competitively priced savings
products. Operating with an agile, nimble
approach, CSB can respond quickly to
the funding requirements of the business
at an advantageous cost of funds.
The Group has built attractive
diversification opportunities to supplement
its retail funding.
CCFS uses its securitisation platform as a
means of providing low-cost term funding.
Wholesale funding enables the business
to rebalance the weighted average life
of liabilities away from shorter duration
retail funding and thereby optimise the
funding mix. The Group recognises the
cyclical nature of capital markets funding
and therefore utilises it opportunistically,
taking advantage of favourable market
conditions.
CCFS is a programmatic issuer of high-
quality residential mortgage-backed
securities through the Precise Mortgage
Funding and Charter Mortgage Funding
franchises, completing 14 securitisations
worth more than £4.5bn to 31 December
2021.
In 2019, OSB established its Canterbury
Finance securitisation programme to
enable it to issue high-quality residential
mortgage-backed securities. It has since
Retail savings
Our securitisation platforms
Sophisticated funding platforms
The Group’s lending business is supported by diversified and stable funding
platforms. This enables cost of funds optimisation while prudently managing
funding and liquidity risks.
issued four securitisations of organically
originated mortgages totalling £4.3bn to
31 December 2021.
The Group also has the capability to engage
in transactions which could result in the full
derecognition of the underlying mortgage
assets, through the sale of residual positions
in its securitisation vehicles.
In 2021, CCFS also had access to a
warehouse funding facility from a Tier
1 investment bank. This facility was
available as a bridge to RMBS funding,
helping the Group to maximise the
efficiency of its liquidity position through
the transition from retail deposit to
securitisation funding. This warehouse
facility was closed in December 2021.
The Group also takes advantage of the
Bank of England’s funding schemes.
In 2021, the drawings under the Term
Funding Scheme were fully repaid and
drawings under the Term Funding Scheme
for SMEs increased to £4.2bn (2020:
£2.6bn and £1.0bn, respectively).

15
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Group’s employees
1,782
2020: 1,786
OSBI regretted attrition rate
17%
2020: 11%
Colleagues employed at OSB India
571
2020: 493
Women in senior management roles
1
32%
2020: 30%
Reduction in operational carbon
footprint
2
against 2019 baseline
10.2%
Our commitment to achieve net zero
greenhouse gas emissions by
2050
Read more on pages 78 to 105
The Group operates customer service
functions in multiple locations across the
UK including Chatham, Wolverhampton,
Fareham, London and Fleet. These,
together with our wholly owned subsidiary
OSB India, help us deliver on our aim of
putting customers first.
The Group has proven collections capabilities
and expertise in case management and
supporting customers in financial
difficulty, from initial arrears through
torepossession.
This offers valuable insights into, as well
as the opportunity to learn from, the
performance of mortgage loan products.
We have deep credit expertise through
proprietary data analytics.
We deliver cost efficiencies through
excellent process design and management.
We have an efficient, scalable and resilient
infrastructure supported by strong IT security.
OSB India (OSBI) is a wholly-owned
subsidiary based in Bangalore and
Hyderabad, India.
OSBI puts customer service at the heart
of everything it does and we reward our
employees based on the quality of service
they provide to customers, demonstrated by
our excellent customer Net Promoter Score.
At OSBI, we employ highly talented and
motivated employees at a competitive
cost. We benchmark our processes
against industry best practice,
challenging what we do and eliminating
customer pain points as they arise. We
continue to invest in developing skills
that enable highly efficient service
management, matching those to business
needs both in India and the UK.
Various functions are also supported
by OSBI, including Support Services,
Operations, IT, Finance and Human
Resources. We have a one team approach
between the UK and India and we are
proud of our low employee turnover in
India, with a regretted attrition rate of just
under 17%, comparing favourably to local
industry averages.
OSBI operates a fully paperless office –
all data and processing are in the UK.
Our Purpose is to help our customers,
colleagues and communities prosper.
To achieve our Purpose, we operate
in a sustainable way with relevant
environmental, social and governance
matters at the heart of the Group.
As a specialist lender, we have been long
aware of our responsibilities and the
positive impact we can make in society
through our activities.
We have always strived to have our
customers, colleagues and communities
in mind through our culture and robust
governance. As such, responding to the
challenges and opportunities that the
environmental, social and governance
matters present, has naturally become an
integral part of the Group’s strategy.
Customer service
OSB India
ESG
Unique operating model
The lending and savings businesses operate through the Group’s unique
and cost-efficient operating model and a robust, scalable and resilient
infrastructure.
1. Employees undertaking roles at Grades A to E.
2. Operational footprint is defined as Scope 1, Scope
2 and Scope 3 emissions; it excludes upstream and
downstream emissions from our value chain.

16
OSB GROUP PLC Annual Report and Accounts 2021
Relationship with stakeholders and section 172
Our Purpose is to help
our customers, colleagues
and communities prosper
Building strong relationships with all of our stakeholders
through regular engagement and open dialogue is
fundamental to achieving the Group’s Purpose to help
our customers, colleagues and communities prosper.
Our relationships with ourstakeholders are central to
the Group’s strategy and culture;and are embedded
inthe Board’s responsibilities.
We outline below how OSB Group
and its Directors engaged with
key stakeholders, and in doing so,
discharged their duties under section
172. For more information on activities
of the Board and its Committees, see
pages 116 to 163 in the Corporate
Governance Report.
Customers
We pride ourselves on building strong,
long-term relationships with our
customers. In 2021, we continued to
demonstrate our commitment to providing
excellent service by supporting our
borrowers and savers throughout the
uncertainties caused by the ebb and
flow of the pandemic. We continued to
help those looking for mortgages and
supported our savers safely, in branches
or by telephone, post and the internet.
We offer our savers an opportunity to
let us know how we are doing whenever
they call or interact with our Banks by
listening to their views and acting upon
what they tell us. Customer feedback
is collected throughout the year and
despite the continuing difficulties of the
pandemic, increased volume of calls and
savers’ activity, we are incredibly proud
of achieving strong satisfaction metrics
for both Kent Reliance and Charter
SavingsBank.
The needs of our customers are at the
heart of our business; and the Board
believes that the long-term success of the
Group is dependent on the strength of our
relationships with our customers.
The Board’s engagement with customers
is indirect and Directors are kept
informed of customer-related matters
through regular reports, feedback
and research. Satisfaction scores and
retention rates, together with the number
of complaints and resolution times, form
part of the management and Board
monthly reporting packs, ensuring the
visibility of our customers’ experience to
management and the Board. Customer
satisfaction scores are also used as part
of the Executive remuneration assessment
and form the basis of new initiatives
and actions which continually improve
customer experience.
When the business is considering the
launch of a new product, customers
and intermediaries may be consulted
to ensure it meets their needs and any
concerns raised are addressed.
In addition, management and the Board
engaged with customers through the Kent
Reliance Provident Society (KRPS) which
conducts customer engagement activity
studies for OSB. During 2021, KRPS
conducted two such studies.
Further information about our customers
can be found in the Customer section on
pages 94 to 95
Savings NPS for Kent Reliance
+70
2020: +67
Savings NPS for Charter Savings Bank
+71
2020: +72
The following matters, which
were identified as affecting our
stakeholders, were of particular
interest to the Board in 2021:
} the ongoing impact of COVID-19
on customers in terms of their
behaviours, financial health
andany forbearance needs;
} the impact of environmental, social
and governance (ESG) factors;
} industry-related conduct risk
issues and the potential impact
oncustomers; and
} management information in
relation to customer complaints
and complaints data from the
Financial Ombudsman Service,
engagement scores, satisfaction
scores and retention rates.

17
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Intermediaries
Our lending products, with the exception
of funding lines and residential
development loans, are distributed via
mortgage brokers. Mortgage brokers are
vital to our success; we have adapted the
way in which we assist them during 2021,
as the pandemic impacted their businesses
and how they serve their customers, to
provide an even better service.
We pride ourselves in providing unique
and consistent lending propositions
across all lending brands, which
fulfil our goal of making it easier for
intermediaries to serve their customers,
our borrowers. Regular engagement
with the broker community extends
beyond our propositions and enables us
to continuously enhance the service we
provide, with our business development
managers listening and working closely
with intermediaries to discuss cases
and helping to obtain swift and reliable
decisions.
Broker and borrower satisfaction scores
are tracked on a regular basis, along with
details of all complaints, and are reviewed
by the Board and management within
monthly reporting packs.
We held fewer intermediary events
during 2021, but the Group’s Sales
teams participated in 418 physical and
virtual intermediary events, interacting
with brokers and keeping abreast of
industry developments and intermediary
requirements.
Colleagues
Our colleagues are our key asset and our
success depends on the 1,782 talented
individuals we employ.
We have always favoured interactive
communication between management
and our employees through regular town
hall meetings, informal sessions with
management and opportunities to ask
questions anonymously directly to the
Chief Executive Officer (CEO) with the
questions and responses available on the
intranet. These methods of engagement
proved popular with employees and have
contributed to many initiatives that were
undertaken by the business during the year.
In line with the UK Corporate Governance
Code, the Group has adopted a
combination of methods for engaging
with its workforce including the
establishment of a formal workforce
advisory panel and a designated
Non-Executive Director (NED). Mary
McNamara is the NED appointed by the
Board with responsibility for employee
engagement and is a permanent member
of the Workforce Advisory Forum (known
internally as OneVoice). Mary has direct
engagement with the workforce by
attending OneVoice meetings and other
events organised by the Diversity and
Inclusion Working Group. This provides
her with an insight into the culture and
concerns of the workforce, which she is
able to bring to the attention of the Board.
OneVoice was set up to gather the views
of the workforce, so that the Board and
management can consider a broadly
representative range of stakeholder
perspectives to guide strategic decisions
for the future of the Group and oversee
the alignment of the Values. OneVoice
has its own Terms of Reference which
outlines the objectives and composition of
the Forum. Members of the workforce are
invited to apply to become an employee
representative (provided there are open
vacancies to be filled) by completing a
short application form.
Members of the Board and management
attended OneVoice meetings throughout
the year in order to understand and
discuss employee-related issues directly
with representatives across the business.
Employee representatives are encouraged
to be open and honest in their feedback
at each meeting. The themes from
OneVoice discussions are shared and
discussed with the Board and this informs
the approach towards new policies,
benefits and any other employee-related
projects.
Engagement also took place via Group-
wide surveys, including a ‘Culture Pulse
Survey’ which was conducted across all
employees and a dashboard compiled of
a series of measures and indicators was
provided to the Board to ensure visibility
of how the Group’s Values are embedded
into the culture. The Board reviewed the
results and discussed how to address any
themes emerging from them. OSB India
was officially certified as a ‘Great Place
to Work’ in 2021 for the fifth year in a
row. The Group also participated in the
Financial Services Culture Board Survey
in 2021.
For more detail on employee initiatives in
the year, see the Employees section on
pages 95 to 103
The interests of the Group’s employees
were also considered by the Board and its
Committees during the year via regular
updates provided by senior management,
the Group’s HR function and the feedback
from meetings of working groups. One
of the key topics at the forefront of the
Board’s mind in 2021 was the continued
impact of the pandemic on our employees’
lives, both professionally and personally,
their well-being and mental health.
Further information on OneVoice can be
found in the Directors’ Report on page 164
to 165
Members of the Board also have standing
invitations to attend meetings of the
Diversity and Inclusion Working Group,
with its members consisting of employee
representatives from across the business.
Updates are submitted to the Board or its
Committees on an annual basis. Members
of the Board oversee the Group’s talent
management initiatives and senior
management succession planning.
Finally, the Board has oversight of the
Group’s whistleblowing activity and
reviews and approves the Group’s gender
pay gap reporting and its commitment to
the Women in Finance Charter.
The Board monitors the effectiveness of
its methods of engaging with employees
and adapts them where necessary. Areas
of continued focus include formalising
a workforce engagement plan and
developing engagement improvement plans
in areas which have been identified as lower
scoring in the results of employee surveys.
Shareholders
Our approach to investor engagement
has remained straightforward as we
favour an open dialogue. Despite the
continued restrictions on physical
meetings, 2021 was a year of dynamic
and active engagement with our
shareholders and the Investor Relations
team met 131 individual investors via
virtual one-to-one meetings, industry
conferences and roadshows.
The Board ensures that all shareholders
have equal access to information through
regulatory announcements, general
meetings and publications on our website.
The Board’s primary engagement with
investors comes through the Group’s
CEO and Chief Financial Officer (CFO)
who meet with investors and sell-side

18
OSB GROUP PLC Annual Report and Accounts 2021
Relationship with stakeholders and section 172 (Continued)
analysts and present the Group’s results
to the market. The Board receives regular
updates from the Investor Relations
function, which includes investor
feedback, analysts’ recommendations
and market views. In a number of
meetings, investors raised queries around
capital returns which was also the subject
of commentary by sell-side analysts.
The issue of Additional Tier 1 (AT1)
securities was a frequent subject of
discussion with investors in terms of
optimising the capital stack. In 2021, the
Board focused on capital management,
including optimisation of the Group’s
capital structure. To that end, new AT1
securities were issued at the Group level
and the legacy AT1 securities as well as
Perpetual Subordinated Bonds issued by
OneSavings Bank plc were redeemed.
The CEO, CFO and Group Head of
Investor Relations kept the Board informed
of investors’ evolving expectations with
regards to climate-related matters which
helped guide the Group’s Task Force on
Climate-related Financial Disclosures and
commitment to net zero carbon emissions
as set out on page 86.
Suppliers
Our business is supported by a large
number of suppliers, which in turn allows
us, as a Group, to provide high standards
of service to our customers. The members
of the Board do not interact directly with
the Group’s suppliers; however, they
are involved in overseeing the Group’s
supplier relationships and are kept up
to date by management on supplier
considerations and developments.
Supplier payment practice reports are
published on a six-monthly basis following
approval by the CFO and signed by the
main operating entities. The Group enters
into standard terms with suppliers, which
include terms requiring payment within 30
days of the invoice date following receipt
of a valid invoice. Over 90% of all invoices
are paid within 30 days in line with the
standard payment period for qualifying
contracts, with the average time taken
to pay invoices ranging from five to 14
days across the Group. The maximum
contractual payment period agreed
varies between 30 days to 45 days. There
have been no changes to the standard
payment terms in the reporting period.
Any complaints received in respect of
invoice payments are considered as part
of the dispute resolution process. During
the year, the Group did not deduct any
sums from payments under qualifying
contracts as a charge for remaining on a
supplier list.
The Group’s Modern Slavery and Human
Trafficking Statement is reviewed and
approved on an annual basis by the
Board and can be found on our website at
www.osb.co.uk.
Regulators
The Board recognises the importance of
having an open and continuous dialogue
with all of our regulators, as well as other
government bodies, trade associations
and UK Finance.
The Group maintains a proactive dialogue
with the Prudential Regulation Authority
(PRA) and Financial Conduct Authority
(FCA). Engagement typically takes the
form of regular and ad hoc meetings
attended by both members of the Board
and Executives, as well as subject matter
experts. Meetings held with regulators
during the year covered, among other
topics, operational resilience, the
ability to respond to a financial stress,
business continuity review and incident
management. There was also significant
interaction with our regulators with
regard to capital management and the
optimisation of our capital structure.
Even though the Directors do not
participate in all meetings, Executives,
including the Group Chief Risk Officer
and Group Chief Credit and Compliance
Officer provide the Board and its
Committees with feedback and regular
updates in respect of the broader
regulatory developments and compliance
considerations.
The Group also regularly interacts and
has constructive relationships with the
Bank of England and HM Revenue &
Customs, among others, which helps to
ensure that the Group is aligned with
the relevant regulatory frameworks and
that the business is engaged with issues
impacting the financial services industry.
The PRA attended a Board meeting during
2021.
Communities
The Group partners with national and
local charities, which offer employees
the chance to make a difference both
nationwide and closer to home. Giving
something back to our community
is important to all of us, whether it is
through volunteering, fundraising or
efforts that help protect our environment
and aligns with the Group’s Values. Our
nominated charity partners are chosen
by employees who give up their time and
take part in a variety of events, with the
hope of making a meaningful impact to
these charities and to the lives of those
that the charities help.
The total amount donated to charity
partners and good causes by the Group
and employees in the year was nearly
£395k. To read more about how our
employees volunteered their time see the
Communities section on pages 104 and
105.
Engagement with our local communities is
actively encouraged and fully supported
by the Board and management who
believe that fostering such relationships
contributes to the communities in which
we operate to make a positive impact.
Environment
Sustainability is becoming increasingly
important to the Board and management.
The Group operates under the highest
governance and ethical standards and
is focused on reducing its impact on the
environment. The Board and management
are cognisant of the impact of social and
environmental change on our business
and stakeholders and regularly promote
awareness of environmental issues among
our employees, as well as adhering to our
plan to become a greener organisation
and comply with enhanced regulation
and disclosures.
The Board is responsible for encouraging
and overseeing an environmentally
friendly culture and ensuring that the
business is ready to respond to the
growing impact of climate change on
the Group’s activities in line with its
Stewardship value. Further details can
be found in the Environment section on
pages 78 to 85.
In 2021, the Board was also involved
with the following aspects of supplier
relationships:
} consideration of potential supplier
challenges as a result of the
integration and the ongoing
impact of COVID-19;
} consideration of the risks
associated with suppliers and the
framework for assurance;
} oversight of key supplier
relationships including the
engagement between the Group
Audit Committee and the external
auditor; and
} oversight of all levels of insurance
in place for the Group.

19
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Section 172 Statement
The stakeholders which the Directors
considered in this regard are customers,
intermediaries, colleagues, shareholders,
suppliers, regulators and the local
communities in which we are located.
These stakeholders are considered to
be those most likely to be impacted
by decisions taken by the Board. The
pages on 16 to 18 and those that follow,
set out how Directors complied with
the requirements of section 172 during
theyear.
Decision making
The Board recognises that considering our
stakeholders in key business decisions is
fundamental to our ability to deliver the
Group’s strategy in line with our long-term
values and operating the business in a
sustainable way. Balancing the needs and
expectations of our key stakeholders has
been at the forefront of the Board’s mind
and has been more important than ever
during 2021, as a result of the ongoing
global pandemic; whilst acknowledging
that some decisions will result in different
outcomes for each stakeholder.
Key strategic decisions
in the year
Capital management
During 2021, the Board made the decision
to redeem legacy AT1 securities and
Perpetual Subordinated Bonds issued by
OneSavings Bank plc as they no longer
qualified as capital at the Group level.
A new issue of AT1 securities from the
Company was executed in October 2021.
These steps were taken as the Group
seeks to optimise its capital structure
following the insertion of OSB GROUP
PLC as the holding company and listed
entity of the Group.
The Directors are bound by their duties under
section 172(1)(a) to (f) of the Companies Act
2006 and the manner in which these have been
discharged; in particular their duty to act in the
way they consider, in good faith, promotes the
success of the Company for the benefit of its
members as a whole.
The Group has a very strong capital
position and proven capital generation
capability through profitability. These
support continued strong growth
as well as additional distributions
to shareholders, despite ongoing
uncertainty over the timing and impact
of Basel 3.1 and IRB accreditation. The
Board considered the expectations
of shareholders in relation to capital
management referencing the number
of questions raised during roadshows
and other shareholder interactions and
approved the commencement of a £100m
share repurchase programme. The Board
is also recommending an increase in the
Group’s full year 2021 ordinary dividend
payout ratio to 30% of underlying
earnings attributable to ordinary
shareholders. The decision of the Board
in this regard fulfilled those expectations
and were also considered to be in the
long-term interests of the Company.
Commitment to net zero carbon
emissions by 2050
In response to feedback received
from shareholders, employees and
intermediaries, the Board felt that it
was important for the Group to commit
to achieving net zero carbon emissions
by 2050 in line with the 2015 Paris
Agreement. The Board has made the
decision to commit to reduce its financed
greenhouse gas emissions by 47% per
m2 by 2030 and by 91% per m2 by 2050,
from a base year of 2021 and to commit
to achieving net zero greenhouse gas
emissions in our own operations (Scope
1, 2 and material Scope 3) by 2030
or sooner. The Board acknowledges
that setting targets drives concerted
action and a roadmap to achieve these
targets is being drafted with the aim of
developing a robust plan over the next
12 to 18 months with the assistance of
the Net Zero Banking Alliance (NZBA)
and the Science Based Targets initiative
(SBTi), which will assess the Group’s
targets and approach to ensure that
the outcomes can be credibly achieved.
The Board recognised the importance of
having distinct science-based targets
and reducing the emissions of the Group
would have a positive impact on the
environment. The Board also considered
the impact on and expectations
of employees, intermediaries and
shareholders; which was a key factor in
the decision to proceed.
Risk appetite and lending criteria
Following indications of market recovery
from the pandemic in the summer of 2021,
the Board considered its risk appetite
in relation to lending criteria and the
appropriateness of increasing the loan
to value on some mortgages from 75 to
80%. In making its decision, the Board
took into consideration feedback from
some shareholders that the Group may
have been conservative in the recovering
market. A range of customer indicators
were also considered including the level
of payment deferrals, arrears data and
economic outlook; and also the impact on
the Group’s Underwriting team. The Board
deliberated whether changing the lending
criteria was within risk appetite and would
be in the long-term sustainable interest
of the Company and Group. The Board
concluded that changing the lending
criteria remained within the Group’s
risk appetite and was appropriate for
customers.

10.8
%
UK average house price inflation
2021
10.8%
8.5%
2.2%
2020 2019
£
46bn
UK Buy-t
o-Let gross advances
2021
£45.9bn
£38.3bn
£42.5bn
2020 2019
20
OSB GROUP PLC Annual Report and Accounts 2021
Despite ongoing disruption due to the
pandemic, residential property transaction
volumes rebounded in2021.
The UK housing and
mortgage market
Despite the ongoing disruption as a result
of the pandemic, residential property
transaction volumes rebounded in 2021,
reaching 1.5m according to HMRC,
representing a 43% increase compared
to 1.0m in 2020.
1
Similarly, UK gross
mortgage lending reached £313bn in
2021, representing an annual increase
of 27% from £246bn in the prior year.
2
In
both cases, the level of activity reported
in 2021 was higher than the level of
activity reported in 2019, prior to the
pandemic. This increase was driven by
several factors, including the release
of pent-up demand, changing buyer
preferences with a desire for space
suitable for home working, a Stamp
Duty Land Tax (SDLT) holiday as well
as mortgage interest rates dropping to
historic lows.
The year began with the third national
lockdown, however housing market
disruption was significantly less severe
than during the first lockdown in March
2020 as the industry swiftly adapted
their working practices and processes
to accommodate the need for social
distancing and other measures.
The removal of restrictions from July
enabled property transactions to
progress with fewer delays and this led
to rising demand. Lenders responded
by continuing to expand lending and
product criteria, with research published
by Twenty7Tec showing that the number
of available mortgage products rose
continually throughout the year, from
fewer than 10,000 in January 2021 to
more than 16,000 by the end of the year.
3
The SDLT holiday that was implemented
in July 2020, continued to generate
increased purchase activity into 2021
as buyers sought to benefit from the
temporary increase in the ‘nil-rate’
band. This measure was initially due to
end in March 2021, but was extended
to June 2021 with a further temporary
relief period in effect until September
2021. It resulted in purchase completions
increasing by 44% year on year to
represent 70% of new mortgage lending
by value (2020: 62%)
4
with notable spikes
in activity in March, June and September
aligned with the relief withdrawal periods.
The increase in borrowers’ demand,
combined with continued low mortgage
interest rates and a lack of supply, led
to upwards pressure on house prices
during the year. The ONS reported
that house prices rose by an average
of 10.8% in 2021 (2020: 8.5%)
5
and
growth was expected to continue into
2022. Equally, respondents to the RICS
Residential Market Survey in November
2021 expected prices to continue to
rise both in the near term and over a
12-monthhorizon.
Source: UK Finance, New and outstanding Buy-to-Let
mortgages, Feb 2022.
Source: ONS, December UK House Price Index,
Feb2022.
Market review

21
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The UK savings market
The historically low interest rates, that
were a dominant feature of the savings
market in 2021, did not prevent the trend
of increasing overall savings balances
in the UK, which rose from £1,953bn in
December 2020 to £2,120bn at the end of
2021, according to the Bank of England.
6
There were also more providers and more
savings accounts on offer in the market
in 2021, following the decline seen in
the previous year, as the total number
of savings products being promoted in
December 2021 was 1,646, compared to
1,514 in December 2020.
7
According to the ONS, the household
savings ratio that peaked at 22.5% in
2020, as a result of so-called accidental
savings, reduced to 18.0% by the third
quarter of the year and 11.3% by the
fourth quarter.
8
Overall, in 2021, according to the
Household Sector Deposits report,
easy access accounts held by financial
institutions continued to exceed fixed
term accounts. By the end of the year,
as consumer confidence around future
prospects improved, savers began to lock
their cash away for longer periods of time
in order to secure a higher return. Fixed
rate bonds accounted for over 50% of all
savings accounts in the fourth quarter of
2021, an increase from about a quarter
during much of 2020.
8
During the year, rates bounced back
from the reductions seen during 2020.
Fixed rate bonds increased by 70bps over
2021 with rates on variable rate products
being slower to rise and only increasing
by 25bps. 2021 ended with a much
anticipated base rate increase of 15bps in
December 2021.
The UK mortgage
market and climate
change
It has been estimated that privately
owned residential properties represent
15% of total carbon emissions in the UK
and it is acknowledged that there are
significant barriers to implementing
energy efficiency improvements.
9
The
UK Government’s focus on achieving its
net zero goals has highlighted the need
to improve the energy efficiency of UK
housing stock.
Two key consultations relating to
improving home energy performance
have been held by the Department for
Business, Energy and Industrial Strategy,
however the outcomes are yet to be
published:
} Improving the Energy Performance of
Privately Rented Homes in England
and Wales closed in January 2021.
The outcome is widely expected to
introduce a minimum requirement
to ensure that all rental properties
achieve an EPC (Energy Performance
Certificate) rating of C or higher from
2028. It is also expected to increase
the current required works cap (the
maximum amount that is expected to
be paid to improve the property’s EPC
rating) from £3,500 to £10,000, before
exemptions can be applied.
} Improving home energy performance
through lenders closed in February
2021. The outcome is expected to
impose a requirement on all lenders
to report on the EPC of their loan
portfolio, along with a commitment to
show annual improvements towards an
average rating of C or higher.
These changes could have a significant
impact on the private rented sector in
the UK. The industry eagerly anticipates
the publication of the final outcomes
from each of these consultations,
however discussion as well as action
from lenders have already taken place,
with the emergence of a green finance
sector. The Green Finance Institute
reported that nine Buy-to-Let lenders
had launched dedicated green finance
products by the end of December
2021
10
, however these products have
largely seen limited success in driving
a change in borrowers’ attitudes.

22
OSB GROUP PLC Annual Report and Accounts 2021
Market review (Continued)
The Group’s lending
sub-segments
Buy-to-Let
According to UK Finance, Buy-to-Let
gross advances reached £45.9bn in
2021
11
, a 15% increase from £38.3bn
in 2020, despite the lingering effects
of the pandemic. Research conducted
by BVA BDRC, in its Landlords Panel
survey in the third quarter, found that
half of landlords reported that their
lettings business had been negatively
affected by the pandemic. However,
this was fewer than the 81% that had
expected to suffer a negative impact at
the start of the pandemic, signalling that
performance may have been better than
initially feared for many landlords. The
increasing optimism was also reflected
in the landlord confidence indicators, all
of which reached a five-year high in the
third quarter of 2021.
12
Purchase activity was significantly
impacted in the early months of 2020,
however the SDLT holiday supported
a strong recovery in house purchase
activity, which continued throughout
2021. According to UK Finance, Buy-to-
Let purchases reached £17.5bn in 2021,
a 73% increase from £10.1bn in 2020.
11
Within this market, the professionalisation
of borrowers continued due to the
increased tax liability for private landlords
and sustained regulatory change that
has occurred over a number of years,
which might have deterred new amateur
entrants who would otherwise be tempted
by robust rental yields and strong capital
gains.
Research conducted by BVA BDRC
on behalf of the Group reported that
in the fourth quarter of 2021, 24% of
landlords with large portfolios of 20 or
more properties intended to acquire
new properties in the next 12 months
compared to just 8% of single-property
landlords. The research also found that of
those landlords that planned to purchase
new properties, more respondents
intended to buy within a limited company
structure than as an individual in their
personal name.
12
Residential purchase completions
£190bn
2020: £131bn
According to UK Finance, remortgage
activity in the Buy-to-Let sector reached
£27.0bn in 2021, a 1% decrease from
£27.4bn in 2020.
11
This decrease reflected
the market’s focus on purchases fuelled
by the temporary SDLT holiday.
In the Private Rented Sector (PRS), much
like the housing market as a whole,
supply constraints have continued
amidst increasing tenant demand
leading to upwards pressure on rents.
As a result, contributors to the RICS
Residential Market Survey in November
2021 reported a rental growth projection
of almost 4% over the next 12 months,
with rental growth expected to average
approximately 5% over the next five
years.
The fundamentals underpinning the PRS
remained strong throughout 2021, with
growth in house prices outpacing wage
growth to stretch affordability even
further and the reduced availability of
high loan to value mortgages generated
strong demand for rental properties,
particularly as individuals returned to
office-based working in central city
locations.
Residential
The UK residential mortgage market was
equally affected by the SDLT holiday as
buyers sought to complete purchases
while they could benefit from lower
transactional costs. This resulted in large
spikes in purchase completions in March,
June and September aligned with the
relief withdrawal periods.
According to UK Finance, purchase
completions reached £190.1bn
13
in 2021,
a 45% increase from £130.8bn in 2020
as home movers sought more space and
first-time buyers took their first step onto
the property ladder, as the availability of
high loan to value mortgages increased.
Buyers also had an additional deadline
to consider this year as changes to
the Government’s popular Help to Buy
scheme were introduced at the end of
March 2021; these changes restricted the
scheme to first-time buyers only while
also introducing new regional property
price caps. The Group offers products
under the scheme via the Precise
Mortgages brand and benefited from
increased activity in the first quarter,
with buyers seeking to complete their
purchases before the new rules came into
effect.
Commercial
Similar to the residential property market,
the start to 2021 was marked by a
national lockdown and meant that only
essential retailers were allowed to trade
from premises. May saw the reopening
of non-essential retail and outdoor social
and leisure venues. Most indoor social
and leisure venues opened in May, with
nightclubs being the final sector to reopen
in July. The pandemic support grants and
the furlough scheme offered assistance
to many businesses through these
challenging times.

23
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
As in 2020, and despite very strong
summer trading that resulted from
limited international travel opportunities,
the hospitality and leisure sectors were
severely impacted by coronavirus
restrictions. Retail shopping centres and
the High Street were already experiencing
a contraction in demand and values
before the pandemic as consumers moved
online. CBRE Group reported an annual
decline of 1.7% in rent for ‘all retail, a
further decline from the 8.3% reduction
recorded in 2020’.
14
However, convenience
retail and retail warehousing showed
growth in 2021 as shopping for essentials
remained local. Whilst the prime retail
settings struggled, the lower value,
tertiary and suburban retail segments
remained comparatively buoyant. In
addition, mixed use asset classes such as
semi-commercial property, which offers
a diverse income stream underpinned
by the residential lettings, continued to
be attractive to investors. Overall, CBRE
reported that capital values for ‘all retail’
increased 6.3% in 2021, with the growth
substantially achieved in the last two
quarters of the year.
In contrast, the industrial sector,
especially warehouse and distribution,
saw greater occupier and investor
demand, resulting in an increase in rents
and capital values, with CBRE reporting
annual rental value and capital value
growth of 9.0% and 35.6%, respectively,
for ‘all industrial’.
14
Finally, office space
was impacted by lower occupancy rates
as office workers were working from home
for the majority of 2021. The attitude of
businesses to retaining office premises
and presence has been mixed, however it
has been acknowledged by most that the
office remains an important tool to grow a
business, to ingrain a desired culture and
to develop junior employees. Where new
lettings and sales were made, a flight to
quality was apparent, with A-grade stock
seeing greater demand than B-grade
stock, despite it being of lower value.
CBRE reported annual rental value and
capital value growth of 0.7% and 3.4%,
respectively, for ‘all offices’.
14
1. UK Finance, Property sale transactions, PT2M, Feb
2022
2. UK Finance, New mortgage lending by purpose of
loan, MM23M, Feb 2022
3. Twenty7Tec Mortgage Market Research, Dec 2021
4. UK Finance, New mortgage lending by purpose of
loan, MM23, Feb 2022
5. ONS, UK House Price Index, Dec 2021
6. Bank of England, Money and Credit Report, Dec
2021
7. Moneyfacts, Monthly Treasury Report, Dec 2021
8. ONS, Household Sector Deposits, Dec 2021
9. LENDERS Project – Core Report July 2017
10. https://www.greenfinanceinstitute.co.uk/
programmes/ceeb/green-mortgages/
11. UK Finance, New and outstanding Buy-to-Let
mortgages, MM17M, Feb 2022
12. BVA BDRC, Landlords Panel survey, Q3 2021
13. UK Finance, RL1UK and RL2UK, Feb 2022
14. CBRE, UK Monthly Index, December 2021
15. https://www.carterjonas.co.uk/commercial-
market-outlook
16. FLA, February 2022
Overall, commercial property investment
volumes recovered in 2021, reaching more
than £55bn, up by nearly a quarter on the
2020 figure, and the highest level since
2018. The year ended on a high, with
£17.8bn transacted in the final quarter of
the year.
15
Residential development
The long period of house price growth
in the UK, as well as strong demand for
housing outstripping both the housing
supply and real wage growth, has led
to affordability issues and access to the
housing ladder being outside the reach
of many. In 2021, the pandemic support
schemes put in place by the government
appeared to have boosted demand,
which remained strong throughout the
year. It was the strongest for houses that
were affordable to local populations in
the regions, which the Heritable business
has concentrated on funding. It was
notable that sales rates for the few
apartment schemes funded in London
were also high, seemingly bucking the
trend of that particular market. These
have resulted in high levels of repayments
for the Heritable business through 2021.
It appears that some regions remain
structurally reliant on the government’s
Help to Buy scheme and therefore these
areas tend to be avoided by Heritable.
When government intervention into
the housing markets, both directly and
indirectly, is withdrawn there is a risk
that transaction volumes will fall. At that
point, the support required by small and
medium sized developers, which forms
Heritable’s core audience for development
finance, will increase.
Second charge lending
According to the Finance and Leasing
Association, second charge mortgage
lending reached £1.1bn
16
in 2021, an
increase of 47% compared to 2020. The
Group maintains a reduced presence in
this smaller market and continues to offer
lending to low-risk, prime borrowers.
Funding lines
There are a number of successful non-
bank or alternative providers of finance to
retail and SME customers in the UK. These
businesses are funded through a variety
of means, including wholesale finance
provided by banks, investment funds and
securitisation or bond markets, high net
worth investors and market-based peer-
to-peer platforms.
The Group was an active provider of
secured funding lines to these specialty
finance providers, primarily focusing
on short-term real estate finance and
development finance. Through these
activities, the Group achieved senior
secured exposure at attractive returns to
asset classes that it knows well, primarily
secured against property-related
mortgages. OSB Group sees a regular
flow of opportunities; however, given the
pandemic and economic uncertainty,
in 2021, the Group did not consider any
new client facilities, choosing to focus
on servicing the existing borrowers and
applying amended, restricted lending
criteria.

24
OSB GROUP PLC Annual Report and Accounts 2021
Underlying return on equity
24%
2020: 19%
Statutory return on equity
20%
2020: 13%
Chief Executive Officer’s Statement
Looking back on 2021, I am incredibly proud of
the operational and financial performance of
OSB Group, and our delivery of record profits,
whilst proving once again the resilience of
our strategy and business model against the
backdrop of the pandemic.

25
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
I am incredibly proud of the operational
and financial performance of OSB Group,
and our delivery of record profits, whilst
proving once again the resilience of our
strategy and business model against the
backdrop of the pandemic.
In 2021, we made significant progress
on important projects including our
approach to climate change and
sustainability. More importantly, the
Board has committed to be carbon
neutral for our direct emissions in
2021 through reduction initiatives and
emissions removal credits. In addition, we
have set a significant target of achieving
Net Zero greenhouse gas emissions by
2050 and we are developing detailed
plans to achieve this ambitious goal
for the Group and our stakeholders.
We fully recognise that no business
can achieve net zero on their own and
collaborative support from industry
and policy makers will be required.
We continued to build our business and
delivered underlying and statutory net
loan book growth of 10%, supported
by £4.5bn of new lending at attractive
margins. This was delivered as the
Group successfully met the challenges
from ongoing uncertainty caused by
the pandemic. Once again for 2021,
we achieved a class-leading return
on equity of 24% on an underlying
basis and 20% on a statutory basis
(2020: 19% and 13% respectively).
The Group has a very strong capital
position and proven capital generation
capability through profitability, with
the fully-loaded CET1 ratio improving
further to 19.6% as at 31 December
2021 (31 December 2020: 18.3%). This
has enabled the Board to support
strong growth and shareholder
returns, and announce a £100m share
buyback programme to commence
on 18 March 2022. Additionally, the
Board is recommending an increase
in the full year 2021 ordinary dividend
payout ratio to 30%. The Board remains
committed to returning any additional
excess capital to shareholders and
intends to update the market on its
capital management framework once
greater clarity is obtained on the impact
of Basel 3.1 and its timing versus the
Group attaining IRB accreditation.
Financial performance
I am delighted that the Group continued
to generate a high level of profitability
during 2021, with record underlying
pre-tax profit of £522.2m, up 51% on
the prior year, and underlying basic
earnings per share of 86.7 pence, up
49% (2020: £346.2m and 58.1 pence,
respectively). On a statutory basis,
profit before tax increased to £464.6m
(2020:£260.4m) and basic earnings per
share was 76.0 pence (2020: 42.8 pence).
The underlying net interest margin for the
year improved to 282bps (2020: 247bps)
due to a lower cost of retail funds and
one-off underlying net effective interest
rate gains of £18.6m which contributed
8bps to NIM in the year. The statutory
NIM was 253bps for 2021 (2020: 216bps).
The Group maintained its strong focus
on cost discipline and efficiency and
the underlying management expense
ratio remained broadly stable at 70bps
in 2021. The underlying cost to income
ratio which benefitted from stronger net
interest income, and fair value gains on
hedging activity, further improved to
24% from 27% in 2020. The statutory
management expense ratio and cost
to income ratio were 71bps and 26%,
respectively (2020: 70bps and 31%).
The management expense and cost to
income ratios in both 2021 and 2020
also benefitted from cost synergies and
lower spending as a result of lockdowns,
the working from home guidance and
some hiring delays in an increasingly
competitive labour market.
Andy Golding
Chief Executive Officer

26
OSB GROUP PLC Annual Report and Accounts 2021
Chief Executive Officer’s Statement (Continued)
Our strong lending franchise
Demand for mortgages remained strong
in 2021 and the Group remained a lender
of choice in our core Buy-to-Let and
Residential market sub-segments, with
total organic originations of £4.5bn,
up 20% from £3.8bn in 2020. This was
achieved with restricted lending across
the Group’s sub-segments during the
first half of the year. In July 2021, more
positive economic indicators enabled
us to introduce new products at pre-
pandemic criteria in our core Buy-
to-Let and Residential sub-segments
at attractive margins, however we
continued to control lending in our more
cyclical sub-segments; commercial,
bridging, development finance, funding
lines and second charge residential.
I am pleased that at the beginning
of 2022, we have also returned to
the market with products at pre-
pandemic criteria in our commercial,
semi-commercial and bridging sub-
segments and we entered 2022 with
a robust pipeline of new business.
The property purchase market was
particularly active for the Group during
2021, with strong demand stimulated
by the temporary reduction in stamp
duty, which also brought forward
completions to the first half as borrowers
rushed to complete mortgages prior
to the cut-off deadlines. The Group
saw especially strong demand for its
products from landlords buying via a
limited company structure and those
buying specialist property types such
as houses in multiple occupation and
multi-unit properties, areas where
we have long-standing expertise.
Landlords are demonstrating high levels
of confidence and we continue to support
them as they decide to add to their
portfolios, remortgage properties within
their existing portfolios or incorporate
their business, selecting to do so with
the Group given our expertise and
multi-brand mortgage propositions.
The Group continued to receive
recognition from mortgage customers
and intermediaries in the year and Precise
Mortgages was recognised by Mortgage
Introducer Awards 2021 as Specialist
Lender of the Year and by L&G Mortgage
Club Awards 2021 as Best Lender for
partnership with the club. Kent Reliance
received the Best Specialist Lender award
from the Mortgage Strategy Awards.
Proven strong credit and
riskmanagement
The high quality of the Group’s loan
book was reflected in the strong credit
performance during the year, with
balances over three months in arrears
remaining broadly stable at just 1.4%
and 0.7% of the loan book at the
end of December for OSB and CCFS
respectively (31 December 2020: 1.3%
and 0.5%). The weighted average LTV
of the Group’s loan book reduced to
62% as at 31 December 2021 from
65% in 2020 supported by house price
appreciation. The weighted average LTV
of new business written by the Group fell
to 69% from 70% during the year as the
Group controlled its lending criteria.
The concerns for the economy identified
at the beginning of the pandemic have
not generally materialised, and the
macroeconomic outlook improved over
the course of 2021, albeit with the more
recent concerns over rising cost of living
moderating the outlook somewhat. The
Group reflected this in its IFRS 9 models
and recorded an impairment credit of
£4.9m on an underlying basis for the year
(statutory impairment credit of £4.4m),
representing an underlying and statutory
loan loss ratios of -2bps, compared with
38bps for underlying and statutory loan
loss ratios in 2020.
The Group’s Internal Ratings-Based (IRB)
programme made tangible progress
against plan during the year. The IRB
capabilities developed by the Group
continue to be integrated into key risk
and capital management processes,
and are already informing strategic
decision making and business planning
activities. The anticipated delay in Basel
3.1 implementation and extension to the
Group’s MREL deadlines, provided the
Group with the opportunity to enhance
our level of end state compliance prior to
submitting our module 1 application. We
continue to engage with the PRA to agree
a submission date.
The integration of OSB and CCFS has
continued to progress well during the
year and it remains ahead of schedule.
By 31 December 2021, we had delivered
annualised run rate savings of c. £24m
and we expect to marginally exceed
our run-rate pledge by the end of the
third anniversary of the Combination.
Integration costs to date are also lower
than originally expected at £20m.
Offsetting our emissions
“We’re committed to offsetting
ouroperational emissions whilst we
determine and deploy our net zero
transition plan. We are offsetting
2021, and 2020’s operational footprint
using carefully selected, quality,
verified offsetting projects, focusing
on areas vital to the decarbonisation
of the housing sector. These include
a domestic solar energy project in
India, large scale renewable energy
infrastructure projects and a project
that demonstrates innovation in the
built environment to avoid embedded
emissions from construction. We see
these projects as aligning with our
ambitions, and that facilitate the
transition to a low carbon housing
economy.”

27
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Multi-channel funding model
Retail deposits remained the primary
source of funding for the Group in the
year, reaching £17.5bn as at 31 December
2021. Our competitive retail savings
propositions, through the Kent Reliance
and Charter Savings Bank brands,
allowed the Group to raise the funds
needed to support loan growth at
attractive rates as we opened over 44,000
new savings accounts in the year.
The retention rate for savers remained
high, achieving 90% for maturing fixed
rate bonds and ISAs at Kent Reliance and
85% for Charter Savings Bank. Our efforts
to provide excellent customer service and
transparent and fair savings products
were reflected in the strong Net Promoter
Scores of +70 for Kent Reliance and +71 for
Charter Savings Bank. I am delighted that
Charter Savings Bank won ISA Provider
of the Year and Online Savings Provider
of the Year from Moneyfacts Consumer
awards. These awards demonstrate
the dedication to delivering excellent
customer service across the Group both
in India and in the UK.
We continued to complement our
retail savings franchises by utilising
our capabilities in the wholesale
funding market. In 2021, we completed
securitisations with a value of £1.9bn which
were largely retained and significantly
increased the contingent wholesale
funding options available to the Group.
Securitisation also provided an
opportunity to increase efficiency in
our drawings from the Bank of England
funding schemes through the use of
retained AAA bonds. In 2021, the drawings
under the Term Funding Scheme were
fully repaid and drawings under the Term
Funding Scheme for SMEs increased to
£4.2bn (31 December 2020: £2.6bn and
£1bn, respectively).
ESG
Our Purpose is to help our customers,
colleagues and communities prosper. To
achieve it, we operate in a sustainable
way with relevant ESG matters at the
heart of our business.
Strong governance is fundamental to
delivering the Group’s strategy and we
have a long tradition of looking after
our stakeholders and involvement in
the communities in which we operate.
The environment is no less important
to us. As a specialist lender, we have
long been aware of our responsibilities
and the positive impact we can have on
society by responding to the challenges
and opportunities that ESG matters
present and which have become an
integral part of the Group’s strategy.
We have created a new ESG governance
structure and a dedicated team
responsible for managing the Group’s
ESG strategy and coordinating its
implementation and delivery. I am
delighted that following our decision to
become carbon neutral for our direct
emissions in 2021 and to demonstrate
our continued and long-term dedication
to climate change, we have joined the
Net Zero Banking Alliance. We have
also committed to assist with industry’s
efforts to achieve its decarbonisation
goals and to achieve net zero
greenhouse gas emissions by 2050.
Our people are our key asset and we
continued to work hard to keep them
safe and supported, in the UK and India
throughout 2021. I would like to take this
opportunity to thank all of our colleagues
for their continued dedication, flexibility,
strong team spirit and camaraderie
throughout 2021.
Our customers continued to receive
the support that they are accustomed
to, delivered by our resilient and
effective operations. We were also
active in supporting our communities
through a range of community and
fundraising initiatives, donating nearly
£395k to charitable causes in 2021.
Looking forward
The UK economy showed determined
strength during 2021, which included
strong employment growth and
house price inflation. However recent
geopolitical events driving further
inflationary pressure, do create additional
uncertainty over the macroeconomic
outlook. OSB Group has a proven track
record of delivering strong results as a
listed business and we have consistently
demonstrated our resilience. The solid
foundations of our business allow
us face the future with optimism.
The Group has a healthy pipeline of
new business and we are successfully
leveraging our unique multi-brand
structure to drive strong current
application volumes. We are seeing
strong demand for our products in our
core markets and landlord confidence in
BTL remains positive. Our own research
confirmed that tenant demand is good
and trending upward.
Based on current new business volumes
and our focus on retention, we expect
to deliver underlying net loan book
growth of c. 10% in 2022. The pricing
and funding costs we are currently
seeing are expected to deliver an
underlying NIM for 2022 broadly flat
to 2021. We expect the underlying cost
to income ratio to increase marginally,
with potential for additional inflationary
headwinds. The cost to income ratio in
2021 benefitted from fair value gains
from hedging activities and reduced
expenditure during the pandemic.
Andy Golding
Chief Executive Officer
17 March 2022

28
OSB GROUP PLC Annual Report and Accounts 2021
Strategic framework
Our Vision is to be
recognised as the
UK’s number one
choice for specialist
banking through
our commitment to
exceptional service,
strong relationships
and competitive
propositions.
Specialist mortgage lending Sophisticated
funding platforms
Unique
operating model
Priorities
Be a leading specialist lender
in our chosen market segments
Focus on automated and
bespoke manual underwriting
Further deepen relationships
and reputation for delivery
with intermediaries
Maintain stable, high-quality,
diversified funding platforms
Leverage our unique and cost-
efficient operating model
Our goals
Originate loans at attractive margins in
our chosen market sub-segments
• Target market sub-segments which
offer attractive returns on a risk-
adjusted basis
• Deliver incremental, non-organic
business
• Invest in a highly responsive, customer-
focused culture
• Innovate to secure sustainable long-
term market leadership
• Provide solutions to environmental,
legislative and social changes
impacting our borrowers and their
properties
High-quality decisions protecting the
business
• Use deep credit experience to deliver
high-quality lending decisions
• Provide a differentiated underwriting
approach dependent upon the needs and
characteristics of our customers; offering
both an automated approach and a skilled
manual underwriting capability and in-
house real estate expertise
• Deliver a quality, differentiated service
informed by comprehensive market
feedback and research
• Clear, accurate and efficient decisions
recognised by intermediaries for their
quality and fairness
Increase partner engagement in
response to demand
• Access to specialist products developed
by listening to intermediary partners
• Be accessible and available to
intermediaries
• Complementary propositions for OSB
and CCFS brands
• Gain intermediary recognition for
delivering sustainable propositions
• Deliver bespoke solutions to meet
intermediary and customer needs
Expertise in funding options
• Maintain resilient and diversified funding
platforms to support future growth and
ensure liquidity requirements are met
through the economic cycle and cost of
funds is optimised
• Be primarily funded through attracting
and retaining a loyal retail savings
customer base
• Deliver propositions offering
transparent, straightforward savings
products, providing long-term value
combined with excellent service levels
• Maintain a sophisticated securitisation
funding programme and balance sheet
management capability
Best-in-class customer service
• Have customer service at the heart of
everything that we do
• Maintain centres of excellence across
OSB’s and CCFS’ existing locations in
Chatham, Wolverhampton and in India
• Extend activity in OSB India (OSBI)
to develop high-quality areas of
excellence
• Deliver cost efficiencies through
excellent process design and
management
• Deliver flexible and resilient operating
processes
2021
• Organic originations were £4.5bn,
up 20% from £3.8bn in 2020 after
returning to pre-pandemic risk appetite
in core sub-segments
• Group originations and market share
fell in bridging and commercial
sub-segments due to maintaining
restrictions or redeploying lending
criteria cautiously whilst the
fundamentals of these markets were
assessed
• Progressive widening of some lending
criteria returning to pre-pandemic
risk appetite in core sub-segments as
macroeconomic indicators improved
• The OSB Transactional Credit Committee
met three times each week to assist with
more complex or larger new mortgage
applications
• Maintained high underwriting and
servicing standards notably in response
to housing market activity spurred by the
SDLT holiday
• Widened access to the Group’s
specialist products as we leveraged our
complementary brand propositions
• Continued to be accessible and
available to intermediaries by finding
new ways of working as the impact of
the pandemic changed
• Restructured Sales team to focus on
market sub-segments post-pandemic
• Enhanced telephone intermediary
resource to complement our face-to-
face service
• Opened over 44,000 new savings
accounts across both Banks in 2021
• Achieved 90% customer retention for Kent
Reliance and 85% for Charter Savings Bank
• Received multiple awards for savings
products, including Online Savings
Provider of the Year and ISA Provider of
the Year from Moneyfacts Consumer
Awards and Best Fixed Rate Savings
Provider in the Moneynet Awards
• Delivered securitisation transactions
with a combined value of £1.9bn in 2021
• Investments in training and process
development contributed to strong savings
customer NPS of +70 for Kent Reliance and
+71 for Charter Savings Bank
• Continued to develop deep credit know-
how through proprietary data analytics
• Opened new site in Hyderabad to
complement Bangalore
• 571 employees at OSB India at the end
of 2021
• Demonstrated outstanding operational
resilience and flexibility
Looking forward
• Maintain our strong credit and
return requirements and assess the
attractiveness of growth opportunities
in our current market sub-segments
• Deploy scale and resources on organic
lending opportunities
• Identify new market sub-segments with
high returns on a risk-adjusted basis
• Leverage our proven track record
for portfolio acquisitions to deliver
incremental non-organic growth
• Using OSB’s and CCFS’ credit experience
in a best-of-both approach
• Leverage differentiated but
complementary underwriting capabilities
to enhance customer propositions
• Increase underwriting efficiency to
better serve borrower needs across
complementary brands
• Use enhanced data insight and analysis
of the combined OSB and CCFS data sets
and analytic capabilities
• Continue to build direct relationships
with intermediaries
• Leverage best practices of CCFS and
OSB across the combined Group to
maintain and further enhance best-in-
class service performance to brokers
• Increase the breadth of sales support
to intermediaries during the application
process
• Investment in technology to enhance
the intermediary and borrower
customer journey
• Continue to invest in both Kent Reliance
and Charter Savings Bank retail deposit
franchises
• Benefit from the ability to execute
structured balance sheet management
transactions across the combined
Group’s balance sheet
• Utilise in-house expertise to enable
efficient access to capital markets
• Increase the Group’s encumbrance
efficiency: access to more wholesale
funding for each pound of assets
encumbered
• Use greater scale to deliver efficient,
scalable and resilient infrastructure
including IT security
• Deliver cost efficiencies and operational
enhancements by leveraging OSBI’s
lending, savings and support
operations and capabilities
• Deliver efficiencies and enhanced
capabilities in centres of excellence
• Use robotics technology and improve
workflows to further enhance primary
servicing
Key risks
1
• Political and economic uncertainty
affecting long-term demand for
specialist mortgages and appetite from
landlords to grow their portfolios
• Potential regulatory and tax changes
including legislative focus on Buy-to-
Let
• New specialist lenders entering the
market
• Changing regulation for underwriting
• More complex underwriting requirements
• Difficulty in recruiting experienced
employees
• Increasing intermediary demands
• Demands of the ever-changing
technology landscape
• Loss of key broker relationships
• More complex underwriting
requirements slowing the process
• Lack of investment in technology
solutions meaning the Group fails to
keep pace with market demands
• Increased competition for retail funds
• Increased customer expectation for
technology
• Volatility of capital markets on demand
and price
• Increased burden of regulatory compliance,
for example, Open Banking (which currently
does not apply to the Group)
• Competition in wholesale markets as
banks repay their TFSME drawings
• Harder to achieve continuous service
improvement as the Group grows
• Increasing costs in India
• Increasing complexity from compliance
with changing regulation
• Maintaining operational resilience as
the Group grows
KPIs
Organic originations
£4.5bn
2020: £3.8bn
Loan loss ratio
-2bps
2020: 38bps
OSB broker NPS
+55
2020: +49
CCFS broker NPS
+42
2020: +54
21
securitisations since 2013
across the Group worth over
£9.8bn
Underlying cost to income ratio
24%
2020: 27%
1. For more information on the Group’s risk
management and principal risks and
uncertainties see the Risk review on pages 50
to 73.

29
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Specialist mortgage lending Sophisticated
funding platforms
Unique
operating model
Priorities
Be a leading specialist lender
in our chosen market segments
Focus on automated and
bespoke manual underwriting
Further deepen relationships
and reputation for delivery
with intermediaries
Maintain stable, high-quality,
diversified funding platforms
Leverage our unique and cost-
efficient operating model
Our goals
Originate loans at attractive margins in
our chosen market sub-segments
• Target market sub-segments which
offer attractive returns on a risk-
adjusted basis
• Deliver incremental, non-organic
business
• Invest in a highly responsive, customer-
focused culture
• Innovate to secure sustainable long-
term market leadership
• Provide solutions to environmental,
legislative and social changes
impacting our borrowers and their
properties
High-quality decisions protecting the
business
• Use deep credit experience to deliver
high-quality lending decisions
• Provide a differentiated underwriting
approach dependent upon the needs and
characteristics of our customers; offering
both an automated approach and a skilled
manual underwriting capability and in-
house real estate expertise
• Deliver a quality, differentiated service
informed by comprehensive market
feedback and research
• Clear, accurate and efficient decisions
recognised by intermediaries for their
quality and fairness
Increase partner engagement in
response to demand
• Access to specialist products developed
by listening to intermediary partners
• Be accessible and available to
intermediaries
• Complementary propositions for OSB
and CCFS brands
• Gain intermediary recognition for
delivering sustainable propositions
• Deliver bespoke solutions to meet
intermediary and customer needs
Expertise in funding options
• Maintain resilient and diversified funding
platforms to support future growth and
ensure liquidity requirements are met
through the economic cycle and cost of
funds is optimised
• Be primarily funded through attracting
and retaining a loyal retail savings
customer base
• Deliver propositions offering
transparent, straightforward savings
products, providing long-term value
combined with excellent service levels
• Maintain a sophisticated securitisation
funding programme and balance sheet
management capability
Best-in-class customer service
• Have customer service at the heart of
everything that we do
• Maintain centres of excellence across
OSB’s and CCFS’ existing locations in
Chatham, Wolverhampton and in India
• Extend activity in OSB India (OSBI)
to develop high-quality areas of
excellence
• Deliver cost efficiencies through
excellent process design and
management
• Deliver flexible and resilient operating
processes
2021
• Organic originations were £4.5bn,
up 20% from £3.8bn in 2020 after
returning to pre-pandemic risk appetite
in core sub-segments
• Group originations and market share
fell in bridging and commercial
sub-segments due to maintaining
restrictions or redeploying lending
criteria cautiously whilst the
fundamentals of these markets were
assessed
• Progressive widening of some lending
criteria returning to pre-pandemic
risk appetite in core sub-segments as
macroeconomic indicators improved
• The OSB Transactional Credit Committee
met three times each week to assist with
more complex or larger new mortgage
applications
• Maintained high underwriting and
servicing standards notably in response
to housing market activity spurred by the
SDLT holiday
• Widened access to the Group’s
specialist products as we leveraged our
complementary brand propositions
• Continued to be accessible and
available to intermediaries by finding
new ways of working as the impact of
the pandemic changed
• Restructured Sales team to focus on
market sub-segments post-pandemic
• Enhanced telephone intermediary
resource to complement our face-to-
face service
• Opened over 44,000 new savings
accounts across both Banks in 2021
• Achieved 90% customer retention for Kent
Reliance and 85% for Charter Savings Bank
• Received multiple awards for savings
products, including Online Savings
Provider of the Year and ISA Provider of
the Year from Moneyfacts Consumer
Awards and Best Fixed Rate Savings
Provider in the Moneynet Awards
• Delivered securitisation transactions
with a combined value of £1.9bn in 2021
• Investments in training and process
development contributed to strong savings
customer NPS of +70 for Kent Reliance and
+71 for Charter Savings Bank
• Continued to develop deep credit know-
how through proprietary data analytics
• Opened new site in Hyderabad to
complement Bangalore
• 571 employees at OSB India at the end
of 2021
• Demonstrated outstanding operational
resilience and flexibility
Looking forward
• Maintain our strong credit and
return requirements and assess the
attractiveness of growth opportunities
in our current market sub-segments
• Deploy scale and resources on organic
lending opportunities
• Identify new market sub-segments with
high returns on a risk-adjusted basis
• Leverage our proven track record
for portfolio acquisitions to deliver
incremental non-organic growth
• Using OSB’s and CCFS’ credit experience
in a best-of-both approach
• Leverage differentiated but
complementary underwriting capabilities
to enhance customer propositions
• Increase underwriting efficiency to
better serve borrower needs across
complementary brands
• Use enhanced data insight and analysis
of the combined OSB and CCFS data sets
and analytic capabilities
• Continue to build direct relationships
with intermediaries
• Leverage best practices of CCFS and
OSB across the combined Group to
maintain and further enhance best-in-
class service performance to brokers
• Increase the breadth of sales support
to intermediaries during the application
process
• Investment in technology to enhance
the intermediary and borrower
customer journey
• Continue to invest in both Kent Reliance
and Charter Savings Bank retail deposit
franchises
• Benefit from the ability to execute
structured balance sheet management
transactions across the combined
Group’s balance sheet
• Utilise in-house expertise to enable
efficient access to capital markets
• Increase the Group’s encumbrance
efficiency: access to more wholesale
funding for each pound of assets
encumbered
• Use greater scale to deliver efficient,
scalable and resilient infrastructure
including IT security
• Deliver cost efficiencies and operational
enhancements by leveraging OSBI’s
lending, savings and support
operations and capabilities
• Deliver efficiencies and enhanced
capabilities in centres of excellence
• Use robotics technology and improve
workflows to further enhance primary
servicing
Key risks
1
• Political and economic uncertainty
affecting long-term demand for
specialist mortgages and appetite from
landlords to grow their portfolios
• Potential regulatory and tax changes
including legislative focus on Buy-to-
Let
• New specialist lenders entering the
market
• Changing regulation for underwriting
• More complex underwriting requirements
• Difficulty in recruiting experienced
employees
• Increasing intermediary demands
• Demands of the ever-changing
technology landscape
• Loss of key broker relationships
• More complex underwriting
requirements slowing the process
• Lack of investment in technology
solutions meaning the Group fails to
keep pace with market demands
• Increased competition for retail funds
• Increased customer expectation for
technology
• Volatility of capital markets on demand
and price
• Increased burden of regulatory compliance,
for example, Open Banking (which currently
does not apply to the Group)
• Competition in wholesale markets as
banks repay their TFSME drawings
• Harder to achieve continuous service
improvement as the Group grows
• Increasing costs in India
• Increasing complexity from compliance
with changing regulation
• Maintaining operational resilience as
the Group grows
KPIs
Organic originations
£4.5bn
2020: £3.8bn
Loan loss ratio
-2bps
2020: 38bps
OSB broker NPS
+55
2020: +49
CCFS broker NPS
+42
2020: +54
21
securitisations since 2013
across the Group worth over
£9.8bn
Underlying cost to income ratio
24%
2020: 27%

30
OSB GROUP PLC Annual Report and Accounts 2021
Segments review
Lending in 2021
Even though the third national lockdown
marked the first quarter of the year, it did
not bring severe disruption as the Group’s
lending brands demonstrated their
flexibility and resilience, and adapted
their processes and practices.
The Group saw strong levels of
applications and completions in
its Residential sub-segments, with
prospective borrowers seeking to
complete property purchases while the
stamp duty holiday was still in effect,
bringing some activity forward to the
first half of the year. The Group was also
active in the popular Help to Buy scheme
in the year. The new rules that came
into force in April 2021, restricted new
completions from the scheme to first-time
buyers only and introduced regional price
caps, which led to a spike in completions
at the end of March 2021. Through its Kent
Reliance brand, the Group also offers
mortgages under the shared ownership
scheme, which saw strong applications
and completions during the year.
In its Buy-to-Let sub-segments, the Group
also saw increased completion activity
as the stamp duty holiday was phased
out, despite the additional surcharge for
second homes continuing to apply. The
Group saw particularly strong demand
for its products from landlords buying via
a limited company structure and those
buying specialist property types, such
as houses in multiple occupation and
multi-unit properties. Throughout the
first half of 2021, the Group continued to
apply restricted lending criteria in terms
of maximum loan to value and loan sizes
in its core sub-segments, as well as higher
pricing initially introduced as a response
to the pandemic.
In July 2021, as the economy and the
outlook improved, new products were
introduced in both the Buy-to-Let and
Residential sub-segments at pre-pandemic
criteria, including maximum loan to values
of 85% and products for customers with
a less-than-perfect credit history. This
resulted in stronger new applications in the
second half of the year.
Throughout 2021, lending in the Group’s
more cyclical business lines, including
commercial, residential development
finance, funding lines and second charge
residential, remained constrained as
measures introduced in response to the
pandemic prevailed. This led to a lower
volume of business in these sub-segments
during the year. The restrictive measures
remained under constant review and were
gradually relaxed, as we saw evidence
of improving macroeconomic conditions,
for example, loan to value criteria in the
bridging sub-segment were returned to
pre-pandemic levels in October.
The Group’s arrears remained broadly
stable throughout the year and, as at
31 December 2021, the percentage of
loans and advances in three months plus
arrears was 1.4% for OSB (2020: 1.3%) and
0.7% for CCFS (2020: 0.5%).
The Group’s lending performance in 2021 reflected
not only the dynamics present in the wider
mortgage market, but also the Group’s discipline
in its lending decisions.

31
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The Group reports its lending business
under two segments: OneSavings Bank
andCharter Court Financial Services.
The following tables present OSB’s contribution to profit and loans and advances to customers on a statutory basis:
Contribution to profit
For year ended 31 December 2021
BTL/SME
£m
Residential
£m
Total
£m
Net interest income 340.5 74.3 414.8
Other income 7.2 1.5 8.7
Total income 347.7 75.8 423.5
Impairment of financial assets (6.2) 2.7 (3.5)
Contribution to profit 341.5 78.5 420.0
For year ended 31 December 2020
Net interest income 264.7 68.1 332.8
Gain on sale of loans 18.0 – 18.0
Other income 0.2 0.6 0.8
Total income 282.9 68.7 351.6
Impairment of financial assets (47.0) (3.7) (50.7)
Contribution to profit 235.9 65.0 300.9
Loans and advances to customers
As at 31 December 2021
BTL/SME
£m
Residential
£m
Total
£m
Gross loans and advances to customers 9,936.1 2,121.2 12,057.3
Expected credit losses (72.0) (10.2) (82.2)
Net loans and advances to customers 9,864.1 2,111.0 11,975.1
Risk-weighted assets 4,614.1 957.6 5,571.7
As at 31 December 2020
Gross loans and advances to customers 9,164.6 1,966.8 11,131.4
Expected credit losses (67.0) (16.6) (83.6)
Net loans and advances to customers 9,097.6 1,950.2 11,0 47.8
Risk-weighted assets 4,282.9 874.4 5,157.3
OneSavings Bank (OSB) segment

32
OSB GROUP PLC Annual Report and Accounts 2021
Segments review (Continued)
OneSavings Bank (OSB) segment (Continued)
Buy-to-Let/SME sub-segment
This sub-segment comprises Buy-to-
Let mortgages secured on residential
property held for investment purposes
by experienced and professional
landlords, commercial mortgages
secured on commercial and semi-
commercial properties held for
investment purposes or for owner-
occupation, residential development
finance to small and medium-sized
developers, secured funding lines to
other lenders and asset finance.
The Buy-to-Let/SME net loan book
increased by 8% to £9,864.1m in 2021,
supported by organic originations of
£1,804.7m, which were 17% higher than
£1,542.5m in 2020.
Buy-to-Let/SME net interest income
increased by 29% to £340.5m from
£264.7m in 2020, reflecting growth in the
loan book, a lower cost of retail funds
and an effective interest rate reset gain
of £24.9m, due to updated prepayment
assumptions based on observed customer
behaviour. This segment also benefitted
from £7.2m of other income relating to
gains on the Group’s hedging activities,
principally fair value gains on mortgage
pipeline swaps (2020: £0.2m), offset
by an impairment loss of £6.2m (2020:
£47.0m loss). The impairment loss was
largely due to individually assessed
provisions raised against two commercial
counterparties, individual assessment
methodology enhancements and changes
in the credit profile of the BTL/SME loan
book, including portfolio size and staging
mix, which more than offset provision
releases as the macroeconomic outlook
improved. In addition the positive impact
of house price appreciation in the year
was partially offset by falls in commercial
property values. Overall, the Buy-to-Let/
SME segment made a contribution to
profit of £341.5m, up 45% compared with
£235.9m in 2020.
The average book loan to value (LTV)
1
in
the Buy-to-Let/SME segment reduced to
65% as at 31 December 2021 benefitting
from house price appreciation in the year
(31 December 2020: 67%), with only 2.5%
of loans exceeding 90% LTV (31 December
2020: 2.9%). The average LTV for new
Buy-to-Let/SME origination
1
was 73%
(2020: 71%).
Buy-to-Let
Buy-to-Let gross loans increased by 10%
to £8,867.7m from £8,044.6m at the end
of 2020. The Group gradually relaxed its
underwriting criteria in this segment and
reintroduced products with pre-pandemic
criteria in July, stimulating demand, and
the organic originations increased by 33%
in the year to £1,477.7m (2020: £1,114.4m).
Professional and multi-property landlords
continued to represent the majority of
borrowers in this sub-segment reaching
82% of completions by value for the Kent
Reliance brand.
Many landlords continued the trend of
incorporating their businesses to optimise
their tax position and 73% of Buy-to-Let
mortgage applications in Kent Reliance
Gross loan book
£9,936.1m
2020: £9,164.6m
+8%
Net interest income
£340.5m
2020: £264.7m
+29%
Contribution to profit
£341.5m
2020: £235.9m
+45%
Loans and advances to customers
31-Dec-2021
£m
31-Dec-2020
£m
Buy-to-Let 8,8 67.7 8,044.6
Commercial 794.4 821.9
Residential development 120.7 133.1
Funding lines 153.3 165.0
Gross loans and advances to customers 9,936.1 9,164.6
Expected credit losses (72.0) (67.0)
Net loans and advances to customers 9,864.1 9,097.6

33
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
came from landlords borrowing via a
limited company (2020: 75%). Research
conducted on behalf of the Group by
BVA BDRC shows that this segment of
the market continues to expand, with
limited company ownership remaining the
most popular option amongst landlords
intending to purchase new properties in
the next 12 months.
As at 31 December 2021, the proportion
of Kent Reliance Buy-to-Let completions
represented by refinancing reduced
slightly to 54% (2020: 58%) as more
landlords took the opportunity to add to
their portfolios while the SDLT holiday
on purchases was in place. Landlords
continued to favour mortgages with
longer initial terms as mortgage rates
became more attractive during 2021,
and five-year fixed rate mortgages
represented 62% of Kent Reliance
completions (2020: 52%). In addition,
OSB’s retention programme, Choices, was
successful in retaining customers, with
71% of existing borrowers choosing a new
product with us within three months of
their original product ending (2020: 75%).
The weighted average LTV of the
Buy-to-Let book reduced to 64% as at
31 December 2021, benefiting from house
price appreciation and the average loan
size was £250k (31 December 2020:
67% and £260k). The weighted average
interest coverage ratio for Buy-to-Let
originations during 2021 was 199%
(2020:201%).
Commercial
Through its InterBay brand, the
Group lends to borrowers investing
in commercial and semi-commercial
property, reported in the Commercial
total, and more complex Buy-to-Let
properties, reported in the Buy-to-
Let total. The gross loan book in the
commercial business reduced 3% to
£794.4m (31 December 2020: £821.9m) as
the Group retained its prudent lending
criteria introduced as a response to the
pandemic throughout the year.
The Group launched a holiday let
proposition in 2021 under its InterBay
brand to assist landlords wishing to
diversify their portfolios.
The weighted average LTV of the
commercial book remained low at 69%
and the average loan size was £380k in
2021 (31 December 2020: 71% and £385k).
InterBay Asset Finance, which
predominantly targets UK SMEs and
small corporates financing business-
critical assets, had a successful year
achieving record volumes. Demand for
lending under the Coronavirus Business
Interruption Loan Scheme (CBILS)
continued to be strong, although it ended
for new applications in March, with all
deals required to be funded by the end
of November. InterBay Asset Finance was
also approved for the CBILS successor
scheme, the Recovery Loan Scheme,
which expires at the end of June 2022.
The gross carrying amount under finance
leases was £116.2m as at 31 December
2021 (31 December 2020: £65.5m).
Residential development
The Heritable residential development
finance business provides development
finance to small and medium-sized
residential developers. The preference
is to fund house builders which operate
outside central London and provide
relatively affordable family housing, as
opposed to complex city centre schemes
where affordability and construction
cost control can be more challenging.
New applications come primarily from
a mixture of repeat business from the
team’s extensive existing relationships
and referrals.
The residential development finance gross
loan book at the end of 2021 was £120.7m
(31 December 2020: £133.1m), with a
further £188.0m committed (31 December
2020: £145.6m). Total commitments were
£500.3m including all approved limits that
are subject to continued performance
(31 December 2020: £502.7m). The
increased rates of sale experienced
by Heritable’s developer customers
continued in 2021, leading to high levels
of loan repayments in the year.
Heritable has written £1,436m of loans
since inception through to the end of
2021, of which £792m have been repaid.
In addition, as at the end of 2021, the
business had commitments to finance the
development of 2,239 residential units,
the majority of which are houses located
outside central London. The business
continued to take an exacting approach
to approving funding for new customers
in 2021 given the macroeconomic
uncertainty.
Funding lines
The Group continued to provide secured
funding lines to non-bank lenders which
operate in certain high-yielding, specialist
sub-segments, primarily secured against
property-related mortgages. Total
credit approved limits as at 31 December
2021 were £450.0m, with total loans
outstanding of £153.3m (31 December
2020: £520.0m and £165.0m,
respectively). During the year, the Group
adopted a cautious risk approach and did
not consider any new secured funding line
facilities, choosing to focus on servicing
the existing borrowers and continuing to
apply restricted lending criteria.
1. Buy-to-Let/SME sub-segment average weighted
LTVs include KR and InterBay Buy-to-Let, semi-
commercial and commercial lending.

34
OSB GROUP PLC Annual Report and Accounts 2021
OneSavings Bank (OSB) segment (Continued)
Residential sub-segment
This sub-segment comprises lending
to owner-occupiers, secured via first
charge against a residential home and
under the shared ownership scheme,
as well as funding lines to non-bank
lenders that operate in high-yielding,
specialist sub-segments, such as
residential bridge finance.
The Residential sub-segment net
loan book grew 8% to £2,111.0m as at
31 December 2021 (31 December 2020:
£1,950.2m) with organic originations of
£558.6m during the year (2020: £354.2m).
Net interest income in the Residential
sub-segment increased by 9% to £74.3m
(2020: £68.1m) due to the growth in the
loan book, the benefit of a lower cost of
retail funds and a £7.5m effective interest
rate gain due to cash outperformance
versus modelled assumptions on the
second charge acquired books. This
segment also benefitted from an
impairment credit of £2.7m (2020: £3.7m
loss), due to less severe forward-looking
macroeconomic scenarios adopted
by the Group and strong house price
performance, partially offset by post
model adjustments applied during the
year. Overall, contribution to profit from
this segment increased by 21% to £78.5m
compared with £65.0m in 2020.
Gross loan book
£2,121.2m
2020: £1,966.8m
+8%
Net interest income
£74.3m
2020: £68.1m
+9%
Contribution to profit
£78.5m
2020: £65.0m
+21%
Loans and advances to customers
31-Dec-2021
£m
31-Dec-2020
£m
First charge 1,895.9 1,660.7
Second charge 224.7 295.4
Funding lines 0.6 10.7
Gross loans and advances to customers 2,121.2 1,966.8
Expected credit losses (10.2) (16.6)
Net loans and advances to customers 2,111.0 1,950.2
Segments review (Continued)

35
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The average book LTV
1
reduced to 48%
(31 December 2020: 54%) with only 0.8%
of loans by value with LTVs exceeding 90%
(31 December 2020: 1.6%). The average
LTV of new residential origination
1
during
2021 reduced to 50% (2020: 61%) as a
result of growth in shared ownership
originations, which complete at much
lower LTVs.
First charge
First charge mortgages are provided
under the Kent Reliance brand,
which largely serves prime credit
quality borrowers with more complex
circumstances. This includes high net
worth borrowers with multiple income
sources and self-employed borrowers,
as well as those buying a property in
conjunction with a housing association
under a shared ownership scheme.
The first charge gross loan book
increased by 14% in the year to £1,895.9m
from £1,660.7m at the end of 2020, as
the Group retained its strong presence
in the shared ownership sub-segment,
achieving record levels of first charge
residential originations of £558.2m
(2020: £338.7m) in the year. The Group
expanded its residential product offering
from July, increasing the maximum LTV
to pre-pandemic levels and re-launching
products to assist customers with a less-
than-perfect credit history, contributing
to strong originations in this sub-segment.
Second charge
The OSB second charge mortgage brand,
Prestige Finance, no longer offers new
mortgages to borrowers, with its loan
book in run-off and managed by Precise
Mortgages. Second charge mortgages
are currently offered under the Precise
Mortgages brand as part of the CCFS
segment. The Prestige Finance second
charge residential loan book had a gross
value of £224.7m at the end of 2021
(31 December 2020: £295.4m).
Funding lines
The Group continued to provide secured
funding lines to non-bank lenders which
operate in certain high-yielding, specialist
sub-segments, such as residential first
and second charge finance. The Group
continued to adopt a cautious approach
to these more cyclical businesses given
macroeconomic uncertainty. Total
credit approved limits as at 31 December
2021 reduced to £20.0m with total
loans outstanding of £0.6m secured
against property-related mortgages
(31 December 2020: £29.2m and £10.7m,
respectively).
1. Residential sub-segment average weighted LTVs
include first and second charge lending.

36
OSB GROUP PLC Annual Report and Accounts 2021
Segments review (Continued)
The following tables present the CCFS’ contribution to profit and loans and advances to customers on an underlying basis, excluding
acquisition-related items and a reconciliation to the statutory results.
Contribution to profit
For year ended 31 December 2021
Buy-to-Let
£m
Residential
£m
Bridging
£m
Second
charge
£m
Other
1
£m
Total
underlying
£m
Acquisition-
related
items
2
£m
Total
statutory
£m
Net interest income 151.0 81.3 5.2 6.7 (8.5) 235.7 (62.9) 172.8
Other income – – – – 20.0 20.0 12.7 32.7
Total income 151.0 81.3 5.2 6.7 11.5 255.7 (50.2) 205.5
Impairment of financial assets 4.3 2.3 1.4 0.4 – 8.4 (0.5) 7.9
Contribution to profit 155.3 83.6 6.6 7.1 11.5 264.1 (50.7) 213.4
For year ended 31 December 2020
Buy-to-Let
£m
Residential
£m
Bridging
£m
Second
charge
£m
Other
1
£m
Total
underlying
£m
Acquisition-
related
items
2
£m
Total
statutory
£m
Net interest income 114.8 67.8 11.8 7.4 (0.6) 201.2 (61.8) 139.4
Gain on sale of loans – – – – 15.1 15.1 (13.1) 2.0
Other income 0.3 0.3 – – 1.7 2.3 13.3 15.6
Total income 115.1 68.1 11.8 7.4 16.2 218.6 (61.6) 157.0
Impairment of financial assets (14.9) (4.0) (1.3) (0.3) – (20.5) 0.2 (20.3)
Contribution to profit 100.2 64.1 10.5 7.1 16.2 198.1 (61.4) 136.7
1. Other relates to net interest income from acquired loan portfolios as well as gains on structured asset sales, fee income from third party mortgage servicing and gains or
losses on the Group’s hedging activities.
2. For more details on acquisition-related adjustments, see Reconciliation of statutory to underlying results in the Financial review.
Loans and advances to customers
As at 31 December 2021
Buy-to-Let
£m
Residential
£m
Bridging
£m
Second
charge
£m
Other
1
£m
Total
underlying
£m
Acquisition-
related
items
2
£m
Total
statutory
£m
Gross loans and advances to
customers 6,301.9 2,451.8 56.3 153.7 17.7 8,981.4 143.1 9,124.5
Expected credit losses (13.9) (5.1) (0.3) (0.3) – (19.6) 0.3 (19.3)
Net loans and advances to
customers 6,288.0 2,446.7 56.0 153.4 17.7 8,961.8 143.4 9,105.2
Risk-weighted assets 2,352.1 1,011.1 29.3 62.2 6.5 3,461.2 68.7 3,529.9
As at 31 December 2020
Buy-to-Let
£m
Residential
£m
Bridging
£m
Second
charge
£m
Other
1
£m
Total
underlying
£m
Acquisition-
related
items
2
£m
Total
statutory
£m
Gross loans and advances to
customers 5,292.0 2,386.1 106.1 197.9 19.1 8,001.2 209.1 8,210.3
Expected credit losses (18.1) ( 7.5) (1.9) (0.7) – (28.2) 0.8 (27.4)
Net loans and advances to
customers 5,273.9 2,378.6 104.2 197.2 19.1 7,973 .0 209.9 8,182.9
Risk-weighted assets 2,163.8 1,001.5 59.6 82.9 7.0 3,314.8 93.6 3,408.4
1. Other relates to acquired loan portfolios.
2. For more details on acquisition-related adjustments, see Reconciliation of statutory to underlying results in the Financial review.
Charter Court Financial Services (CCFS) segment

37
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
CCFS targets specialist mortgage
market sub-segments with a focus
on specialist Buy-to-Let mortgages
secured on residential property held
for investment purposes by both
non-professional and professional
landlords. It also provides specialist
residential mortgages to owner-
occupiers, secured via either first or
second charge against prime and
complex prime residential property
and under the Help to Buy scheme.
In addition, it provides short-term
bridging, secured against residential
property in both the regulated and
unregulated sectors of the market
and second charge lending.
The CCFS underlying net loan book grew
by 12% to £8,961.8m at the end of 2021
(31 December 2020: £7,973.0m) supported
by organic originations of £2,160.2m,
which increased by 16% from £1,870.2m of
new business written in 2020.
Underlying loans and advances to customers
31-Dec-2021
£m
31-Dec-2020
£m
Buy-to-Let 6,301.9 5,292.0
Residential 2,451.8 2,386.1
Bridging 56.3 106.1
Second charge 153.7 197.9
Other
1
17.7 19.1
Gross loans and advances to customers 8,981.4 8,001.2
Expected credit losses (19.6) (28.2)
Net loans and advances to customers 8,961.8 7,973.0
1. Other relates to acquired loan portfolios.
Gross loan book*
£8,981.4m
2020: £8,001.2m
+12%
Net interest income*
£235.7m
2020: £201.2m
+17%
Contribution to profit*
£264.1m
2020: £198.1m
+33%
* Underlying.

38
OSB GROUP PLC Annual Report and Accounts 2021
Segments review (Continued)
CCFS Buy-to-Let
sub-segment
During 2021, CCFS’ organic originations
in the Buy-to-Let sub-segment through
the Precise Mortgages brand increased
by 32% to £1,482.3m (2020: £1,122.6m)
as the Group benefitted from strong
demand for new purchases driven
by the stamp duty holiday and the
gradual return to pre-pandemic lending
criteria. The new business supported
a 19% increase in the underlying gross
Buy-to-Let loan book to £6,301.9m
from £5,292.0m at the end of2020.
The demand for CCFS’ Buy-to-Let
products was particularly strong
amongst landlords borrowing through
a limited company, which represented
69% of Buy-to-Let completions for the
Precise Mortgages brand in 2021 (2020:
56%) and loans for specialist property
types, including houses of multiple
occupation and multi-unit properties
represented 26% of completions in this
sub-segment (2020: 30%). Landlords
also took the opportunity to add to their
portfolios while the SDLT holiday was
available and purchases increased to
61% of completions for Precise Mortgages
(2020: 43%). Five-year fixed rate
mortgages were popular as well at 64%
of completions, up from 61% in 2020.
The weighted average LTV of the loan
book in this sub-segment was 68% at
the end of 2021 (31 December 2020:
69%). The new lending average LTV was
74% with an average loan size of £192k
(2020: 74% and £170k, respectively).
The weighted average interest coverage
ratio for Buy-to-Let origination was
188% during 2021 (2020: 193%).
Underlying net interest income in this
sub-segment increased by 32% to
£151.0m, compared with £114.8m in
2020, due primarily to growth in the
loan book and a lower cost of retail
funds, partially offset by an underlying
effective interest rate reset loss of £14.7m
to reflect customers choosing a new
product at the end of their fixed rate
period earlier, and spending less time on
the higher revert rate. This segment also
benefitted from an impairment credit
of £4.3m (2020: £14.9m loss) due to less
severe forward-looking macroeconomic
scenarios adopted by the Group and
strong house price performance, partially
offset by model enhancements applied
during the year. On an underlying basis,
Buy-to-Let made a contribution to profit
of £155.3m in 2021, up 55% compared
to the prior year (2020:£100.2m).
On a statutory basis, the Buy-to-Let sub-
segment made a contribution to profit of
£109.5m (2020: £71.5m).
CCFS Residential
sub-segment
The underlying gross loan book in
CCFS’ Residential sub-segment reached
£2,451.8m in 2021, an increase of 3%
from £2,386.1m as at 31 December
2020. Organic originations were
£558.0m in 2021 (2020: £573.9m)
with restricted criteria in place until
July 2021. As the macroeconomic
indicators improved, the Group made
a decision to relax some of the criteria
to pre-pandemic levels, in particular
the maximum loan to value limits.
The Group continued to benefit from
CCFS’ expertise, with a particularly
strong focus on first-time buyers and
those purchasing new build properties
under the popular Help to Buy scheme.
As new restrictions to the scheme
were introduced at the end of March
2021, there was a spike in completions
as borrowers sought to finalise their
purchases ahead of the new rules coming
into force. Strong activity under the Help
to Buy scheme was further boosted by
the stamp duty holiday with purchases
representing 86% of completions in this
sub-segment in the period (2020: 79%).
The average loan size in this sub-segment
was £136k (31 December 2020: £160k)
with an average LTV for new lending
of 66% (2020: 67%) and the book LTV
reduced to 59% as at 31 December 2021
benefiting from house price appreciation
in the year (31 December 2020: 62%).
Underlying net interest income grew to
£81.3m (2020: £67.8m) reflecting the
growth in the loan book and a lower cost
of retail funds. The Residential sub-
segment recorded an impairment credit
of £2.3m (2020: £4.0m loss) due to less
severe forward-looking macroeconomic
scenarios adopted by the Group and
strong house price performance, partially
offset by post model adjustments.
Overall, on an underlying basis, the
Residential sub-segment made a
contribution to profit of £83.6m, up by
30% compared with £64.1m in 2020.
On a statutory basis, the Residential
sub-segment made a contribution
to profit of £67.1m (2020: £45.4m).
Charter Court Financial Services (CCFS) segment
(Continued)

39
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
CCFS Bridging sub-segment
The Group continued to control volumes
in its high-quality regulated bridging
sub-segment, by continuing to limit
the number of products available and
applying restricted lending criteria for
much of the year. Some relaxation of
these restrictions commenced in October
2021, with the maximum loan to value
for standard and light refurbishment
products increasing to 75% in line with
pre-pandemic criteria. Short-term
bridging originations were lower at
£109.1m in 2021 compared with £141.8m in
2020, and as a result the gross underlying
loan book in this sub-segment reduced
to £56.3m as at 31 December 2021
(31 December 2020: £106.1m).
Underlying net interest income reduced
to £5.2m from £11.8m in 2020, primarily
reflecting the decrease in the loan
book. The bridging sub-segment made
a contribution to profit of £6.6m in 2021
on an underlying basis, compared with
£10.5m in 2020, reflecting the reduction
in the underlying net interest income,
partially offset by an impairment credit of
£1.4m (2020: £1.3m loss). The impairment
credit was due to less severe forward-
looking macroeconomic scenarios
adopted by the Group, strong house price
performance and the reduction in the
loan book in this sub-segment.
On a statutory basis, the bridging sub-
segment made a contribution to profit of
£6.4m (2020: £9.7m).
CCFS Second charge
sub-segment
The second charge gross underlying loan
book reduced to £153.7m compared with
£197.9m as at 31 December 2020, due to
lower organic originations of £10.8m in the
year (2020: £31.9m). Throughout 2021, the
Group applied significant lending policy
restrictions, with the controlled increase
in the maximum loan to value from 50%
to 65% in March being the only relaxation
of criteria. The Group also continued to
focus on prime borrowers.
Underlying net interest income in the
second charge sub-segment reduced
to £6.7m (2020: £7.4m) due to the lower
lending and the contribution to profit
remained flat for the year at £7.1m. An
impairment credit of £0.4m (2020: £0.3m
loss) was due to less severe forward-
looking macroeconomic scenarios
adopted by the Group and strong house
price performance, partially offset by
post model adjustments.
On a statutory basis, the contribution
to profit from the second charge sub-
segment was £5.7m (2020: £6.6m).

40
OSB GROUP PLC Annual Report and Accounts 2021
Wholesale funding review
In addition to providing cost efficient
funding, the Group uses securitisations
to provide efficient access to commercial
and central bank repo facilities.
The Group’s strategy is to be fleet-of-foot
and dynamic rather than deterministic
with its securitisation issuance plans,
enabling it to maximise the opportunity
of a strong market with repeat issuances
and use other options when the market
is poor.
2021 exemplified the strength of
this approach. The Group issued its
largest ever securitisation transaction,
Canterbury No. 4, in July 2021. This
transaction securitised c. £1.7bn of
mortgage loans and provided the
Group with c. £1.4bn of AAA rated senior
bonds which can be used as collateral
in commercial and central bank repo
facilities, or be sold into the market at
short notice for liquidity purposes. In
the year, the Group sold £200m of the
AAA- rated Canterbury No. 4 bonds post
completion to satisfy short-term funding
needs.
The Canterbury No. 4 transaction also
forms part of a broader strategy to
increase the Group’s wholesale funding
options and, in particular, to increase its
encumbrance efficiency. The Group can
access more wholesale funding for each
pound of assets encumbered and thus
use wholesale funding to a greater degree
than would otherwise be possible.
A combination of balance sheet growth
and the increased use of securitised
collateral enabled the Group to expand
its total borrowings from the Bank of
England in 2021. Before the closure of the
Term Funding Scheme in October 2021,
the Group repaid its drawings under this
scheme and replaced them with drawings
under the Term Funding for SMEs, which
at the end of 2021 totalled £4.2bn. These
borrowings provide four-year funding at a
cost of Bank Base Rate.
During 2021, the Group also arranged
Rochester Financing No.3, which involved
the re-financing of the Rochester
Financing No.2 transaction issued in 2016,
which securitised a portfolio of acquired
third party originated UK mortgages.
In 2021, CCFS also had access to a
warehouse funding facility from a Tier
1 investment bank. This facility was
available as a bridge to RMBS funding,
helping the Group to maximise the
efficiency of its liquidity position through
the transition from retail deposit to
securitisation funding. This warehouse
facility was closed in December 2021.
Securitisation is central to the Group’s liability
management strategy, as well as a key funding
source, with c. £10bn of issuance since December
2013 across CCFS and OSB.

Group’s active issuances to 31 December 2021 (£m)
2,000
1,000
1,500
500
0
PMF
2017-1B*
PMF
2018-2B*
CMF
2018-1*
PMF
2019-1B*
CANBY
No.1*
PMF
2020-1B
CMF
2020-1
CANBY
No.2
CANBY
No.3
ROCHFIN
No.3*
CANBY
No.4
Outstanding BTL
Original deal mortgage balanceOutstanding Residential
137.65
194.29
104.75
249.08
235.68
93.61
136.62
321.46
291.50
15.22
98.18
193.13
281.86
264.39
484.58
180.18168.34
715.14
757.64
164.96
34.24
1,608.73
180.78
41
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
PMF
2017-1B*
PMF
2018-2B*
CMF
2018-1*
PMF
2019-1B*
CANBY
No.1*
PMF
2020-1B
CMF
2020-1
CANBY
No.2
CANBY
No.3
ROCHFIN
No.3*
CANBY
No.4
Number of accounts
3+ months in arrears 1 0 22 2 20 0 6 32 15 129 9
Losses to date (£k) 9 0 0 8 0 0 0 0 0 131 0
Weighted average
mortgage interest rate 3.61% 3.78% 4.40% 3.81% 3.94% 3.80% 4.40% 4.08% 3.88% 2.90% 3.73%
Senior note spread
(over LIBOR) 0.75% 0.68% 0.47% n/a n/a n/a n/a n/a n/a n/a n/a
Senior note spread
(over SONIA) n/a n/a n/a 0.93% 1.17% 0.93% 0.60% 0.95% 1.00% 0.70% 0.65%
Weighted average margin
at closing 1.02% 0.77% 0.55% 1.27% 1.45% 1.13% 0.66% 1.14% 1.33% 0.86% 0.86%
* Group derecognition deal.
PMF – Precise Mortgage Funding plcROCHFIN – Rochester Finance plcCMF – Charter Mortgage Funding plcCANBY – Canterbury Finance plc

£4.5bn
£3.8bn
2021 2020
26%
24%
31%
27%
2021 20212020 2020
253bps
282bps
216bps
247bps
2021 20212020 2020
71bps
70bps
71bps
70bps
2021 20212020 2020
42
OSB GROUP PLC Annual Report and Accounts 2021
Key performance indicators
Throughout the
Strategic report the
results and the Key
performance indicators
(KPIs) are presented
on a statutory and
anunderlying basis.
Management believe that the underlying
results and the underlying KPIs provide
amore consistent basis for comparing
theGroup’s performance between
financialperiods.
Underlying results for 2021 and 2020
exclude exceptional items, integration
costs andother acquisition-related items.
For a reconciliation of statutory results
tounderlying results, see page 49.
The Group’s external auditor performed
an independent reasonable assurance
review of certain KPIs as highlighted with
the symbol  – see the Appendix for the
auditor’s statement.
Key:
Statutory 2021
Underlying 2021
Statutory 2020
Underlying 2020
1. Gross new lending
∆
£4.5bn (2020: £3.8bn)
Definition
Gross new lending is defined as gross new organic
lending before redemptions.
2021 performance
Gross new lending increased 20% in the yearand
reflected a gradual return to pre-pandemic
criteria in our core sub-segments.
Definition
Cost to income ratio is defined as administrative
expenses as a percentage of total income. It is a
measure of operational efficiency.
2021 performance
Statutory and underlying cost to income ratios
improved in 2021 as the Group benefitted from
higher income in the year and lower spending as a
result of pandemic-related restrictions.
Definition
NIM is defined as net interest income as
a percentage of a 13-point average of interest
earning assets (cash, investment securities,
loans and advances to customers and credit
institutions).
It represents the margin earned on loans and
advances and liquid assets after swap expense/
income and cost of funds.
2021 performance
Both statutory and underlying NIM improved in
2021, primarily due to a lower cost of retail funds
and one-off effective interest rate reset gain.
Definition
Management expense ratio is defined as
administrative expenses as a percentage of a
13-point average of total assets. It is a measure of
operational efficiency.
2021 performance
Statutory and underlying management expense
ratios remained stable in 2021 as the Group
continued to benefit from cost synergies and
lower spending as a result of pandemic-related
restrictions.
3. Cost to income ratio
∆
Statutory 26% (2020: 31%)
Underlying 24% (2020: 27%)
2. Net interest margin (NIM)
∆
Statutory 253bps (2020: 216bps)
Underlying 282bps (2020: 247bps)
4. Management expense ratio
∆
Statutory 71bps (2020: 71bps)
Underlying 70bps (2020: 70bps)

-2bps -2bps
38bps 38bps
2021 20212020 2020
20%
24%
13%
19%
2021 20212020 2020
26.0p
14.5p
2021 2020
19.6%
18.3%
2021 2020
76.0p
86.7p
42.8p
58.1p
2021 20212020 2020
+70
+71
+67
+72
OSB CCFS
2021 20212020 2020
43
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Definition
Loan loss ratio is defined as impairment losses
as a percentage of a 13-point average of gross
loans and advances. It is a measure ofthe credit
performance of the loan book.
2021 performance
Statutory and underlying loan loss ratios improved
in the year as the Group used less severe forward-
looking macroeconomic scenarios in its IFRS 9
models, albeit with additional 10% weighting to the
downside scenario to account for the cost of living
and affordability pressures, and benefitted from
strong house price performance.
Definition
Return on equity is defined as profit attributable
to ordinary shareholders, whichis profit after tax
and after deducting coupons on non-controlling
interest securities, gross of tax, as a percentage
of a 13-point average of shareholders’ equity
(excluding £150m of AT1 securities and £60m of
non-controlling interest securities).
2021 performance
Statutory and underlying return on equity
improved in 2021 due to strong profitability in the
year.
Definition
Dividend per share is defined as the sum of the
recommended final dividend and any interim
dividend for the year, divided by the number of
ordinary shares in issue at the year end.
2021 performance
The Board recommends a final dividend for 2021
of 21.1 pence per share, which together with the
2021 interim dividend of 4.9 pence represents
30% of underlying profit attributable to ordinary
shareholders.
For calculation of the final dividend, see the
Appendix.
Definition
This is defined as Common Equity Tier 1 (CET1)
capital as a percentage of risk-weighted assets
(calculated on a standardised basis) and is a
measure of the capital strength of theGroup.
2021 performance
The CET1 ratio strengthened in the year supported
by strong capital generation from profitability.
Definition
Basic EPS is defined as profit attributable to
ordinary shareholders, which is profit after tax
and after deducting coupons on non-controlling
interest securities, gross of tax, divided by the
weighted average number of ordinary shares in
issue.
2021 performance
Statutory basic EPS improved to 76.0 pence per
share and underlying basic EPS improved to 86.7
pence per share, both benefitting from higher
profitability in the year.
Definition
The NPS measures our customers’ satisfaction
with our service and products. It is based on
customer responses to the question of whether
they would recommend us to a friend. The
question scale is 0 for absolutely not to 10 for
definitely yes. Based on the score, a customer is
defined as a detractor between 0 and 6, a passive
between 7 and 8 and a promoter between 9 and
10. Subtracting the percentage of detractors
from the percentage of promoters gives an NPS of
between -100 and +100.
2021 performance
OSB’s savings customer NPS improved to +70 and
CCFS’ was an outstanding +71.
5. Loan loss ratio
∆
Statutory -2bps (2020: 38bps)
Underlying -2bps (2020: 38bps)
8. Return on equity
∆
Statutory 20% (2020: 13%)
Underlying 24% (2020: 19%)
6. Dividend per share
∆
Statutory 26.0 pence per share
(2020: 14.5 pence per share)
9. CRD IV fully-loaded Common Equity – Tier 1
capital ratio
Statutory 19.6% (2020: 18.3%)
7. Basic EPS, pence per share
∆
Statutory 76.0 (2020: 42.8)
Underlying 86.7 (2020: 58.1)
10. Savings customer satisfaction – Net Promoter
Score
OSB +70 (2020: +67), CCFS +71 (2020: +72)

44
OSB GROUP PLC Annual Report and Accounts 2021
Review of the Group’s performance presented
on a statutory basis for 2021 and 2020.
Statutory profit
The Group’s statutory profit before tax
increased by 78% to £464.6m (2020:
£260.4m) after exceptional items,
integration costs and other acquisition-
related items of £57.6m
1
(2020: £85.8m).
The increase was primarily due to growth
in the loan book, a lower cost of retail
funds and an impairment credit. The
Group adopted adverse Covid-19 related
forward-looking assumptions in its IFRS
9 models in 2020 which resulted in a
substantial impairment charge in the prior
year. The Group also benefitted from
fair value gains on the Group’s hedging
activities in 2021, which more than
offset lower gains on sale of financial
instruments.
Statutory profit after tax was £345.3m in
2021, an increase of 76% from £196.3m in
the prior year, due to the increase in profit
before tax partially offset by a higher
effective tax rate. It included after-tax
exceptional items, integration costs and
other acquisition-related items of £47.8m
1
(2020: £68.6m).
The Group’s effective tax rate increased
to 25.7% in 2021 (2020: 23.1%) primarily
due to a larger proportion of the profits
being subject to the Bank Corporation
TaxSurcharge.
Statutory return on equity for 2021
improved to 20% (2020: 13%) reflecting
the increase in profitability in the year.
Statutory basic earnings per share
increased to 76.0 pence (2020: 42.8
pence), in line with the increase in profit
after taxation.
Net interest income
Statutory net interest income increased
by 24% in 2021 to £587.6m (2020:
£472.2m), largely reflecting growth in the
loan book and a lower cost of retail funds.
It also included net effective interest
rate (EIR) reset gains of £11.5m to reflect
updated prepayment assumptions based
on customer behaviour.
Summary Profit or Loss
Group
31-Dec-2021
£m
Group
31-Dec 2020
£m
Net interest income 587.6 472.2
Net fair value gain on financial instruments 29.5 7.4
Gain on sale of financial instruments 4.0 20.0
Other operating income 7.9 9.0
Administrative expenses (166.5) (157.0)
Provisions (0.2) (0.1)
Impairment of financial assets 4.4 (71.0)
Impairment of intangible assets 3.1 ( 7.0)
Integration costs (5.0) (9.8)
Exceptional items (0.2) (3.3)
Profit before tax 464.6 260.4
Profit after tax 345.3 196.3
Key ratios 
Net interest margin 253bps 216bps
Cost to income ratio 26% 31%
Management expense ratio 71bps 71bps
Loan loss ratio -2bps 38bps
Return on equity 20% 13%
Basic earnings per share, pence 76.0 42.8
Dividend per share, pence 26.0 14.5
Extracts from the Statement of Financial Position
£m £m
Loans and advances to customers 21,080.3 19,230.7
Retail deposits 17,526.4 16,603.1
Total assets 24,531.9 22,654.5
Key ratios
Common equity tier 1 ratio 19.6% 18.3%
Total capital ratio 21.2% 18.3%
Leverage ratio 7.9% 6.9%
For definitions of key ratios, see Key performance indicators on pages 42 to 43,
formore detail on the calculation of key ratios, see the Appendix on pages 246
and248.
The Group’s external auditor performed an independent reasonable assurance
review of certain alternative performance measures as highlighted with the symbol
Δ – see the Appendix for the auditor’s statement.
Financial review

45
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Statutory net interest margin (NIM) was
253bps compared to 216bps in the prior
year, due primarily to a lower cost of
retail funds and the EIR reset gains, which
contributed 5bps. In 2020, statutory NIM
was impacted by a delay in passing on
the base rate cuts in full to retail savers.
Net fair value gain on financial
instruments
The statutory net fair value gain on
financial instruments of £29.5m in 2021
(2020: £7.4m) included a £10.3m net gain
on unmatched swaps (2020: £18.0m
net loss) and a net gain of £2.4m (2020:
£6.8m loss) in respect of the ineffective
portion of hedges.
The Group also recorded a £3.0m gain
(2020: £13.0m gain) from the amortisation
of hedge accounting inception
adjustments, a £13.4m gain from the
unwind of acquisition-related inception
adjustments (2020: £17.0m gain) and
a £0.2m gain (2020: £2.4m gain) from
amortisation of the fair value relating
to de-designated hedge relationships.
Other items amounted to a gain of £0.2m
(2020:£0.2m loss).
The net gain on unmatched swaps
primarily related to fair value movements
on mortgage pipeline swaps, prior to
them being matched against completed
mortgages and was caused by an
increase in the interest rate outlook on the
LIBOR and SONIA yield curves. The Group
economically hedges its committed
pipeline of mortgages and this unrealised
gain unwinds over the life of the swaps
through hedge accounting inception
adjustments.
The amortisation of fair value relating to
de-designated hedge relationships occurs
when hedge relationships are cancelled
due to ineffectiveness.
Gain on sale of financial instruments
The gain on sale of financial instruments
of £4.0m in 2021, related to the
disposal of A2 notes in the PMF 2019-1B
securitisation in February 2021.
In 2020, the Group made a gain of
£20.0m on a statutory basis, which
related to the disposal of the remaining
notes under the Canterbury No.1 and
PMF 2020-1B securitisations in January
2020 and a sale of AAA notes from the
Canterbury No. 3 securitisation.
Other operating income
Statutory other operating income of £7.9m
(2020: £9.0m) mainly comprised CCFS’
commissions and servicing fees, including
those relating to securitised loans which
have been derecognised from the Group’s
balance sheet.
Administrative expenses
Statutory administrative expenses
increased 6% to £166.5m in 2021 (2020:
£157.0m) largely due to higher employee
costs.
The Group’s statutory cost to income ratio
improved to 26% (2020: 31%) as a result
of the increase in total income, primarily
due to higher net interest income and
gains from the Group’s hedging activities,
which more than offset lower gains on
sale of financial instruments.
The statutory management expense ratio
remained at 71bps in 2021 (2020: 71bps)
as the Group maintained its strong focus
on cost discipline and efficiency.
The management expense and cost to
income ratios in 2021 and 2020 also
benefited from lower spending as a result
of lockdowns, the working from home
guidance and some hiring delays in an
increasingly competitive labour market.
The Group continued to make strong
progress towards achieving target
synergies from the Combination. As
at 31 December 2021, the Group had
delivered run rate savings of c. £24m
and we expect to marginally exceed
our run-rate pledge by the end of the
third anniversary of the Combination.
Integration costs to achieve these
synergies were c. £20m with final
integration costs expected to be below
the target of £39m.
Impairment of financial assets
The Group recorded an impairment credit
of £4.4m in 2021 (2020: £71.0m loss) and
the statutory loan loss ratio improved to
-2bps compared to 38bps in 2020.
As the outlook improved, the Group
used less severe forward-looking
macroeconomic scenarios in its IFRS 9
models, albeit with an additional 10%
weighting to the downside scenarios,
to reflect future risks from an increase
in the cost of living and affordability
pressures from further rises in interest
rates. This, together with the strong
house price performance, led to a release
of provisions of £24.9m. This release
was partially offset by IFRS 9 model
enhancements of £4.3m, post model
adjustments of £6.8m and other charges
of £9.4m. Further detail is provided in the
Risk review section.
In 2020, impairment losses were largely
due to adverse pandemic-related
forward-looking macroeconomic
scenarios adopted by the Group,
changes to staging criteria in line with
the PRA guidance, pandemic-related
enhancements to the Group’s models and
fraudulent activity by a third party on a
funding line provided by the Group.
Impairment of intangible assets
The impairment credit of intangible assets
of £3.1m related to a partial reversal of
the impairment of the broker relationships
intangible of £7.0m recorded in 2020, as
lending volumes in 2021 were higher than
previously anticipated.
Integration costs
The Group recorded £5.0m of integration
costs in 2021 (2020: £9.8m) which
largely related to redundancy costs and
professional fees for external advice on
the Group’s future operating structure.
Exceptional items
Exceptional costs of £0.2m in 2021 and
£3.3m in 2020 related to the insertion
of OSB GROUP PLC as the new holding
company and listed entity of the Group.
Dividend
The Board has recommended a final
dividend of 21.1 pence per share for
2021, which together with the 2021
interim dividend of 4.9 pence per share,
represents 30% of underlying profit
attributable to ordinary shareholders.
Seethe Appendix for the calculation of
the 2021 final dividend.
The recommended dividend will be paid
on 18 May 2022, subject to approval at
the AGM on 12 May 2022, with an ex-
dividend date of 24 March 2022 and a
record date of 25 March 2022.
Balance sheet growth
On a statutory basis, net loans and
advances to customers grew by 10% to
£21,080.3m in 2021 (31 December 2020:
£19,230.7m), reflecting originations of
£4.5bn in the year.
Total assets grew by 8% to £24,531.9m
(31 December 2020: £22,654.5m),
primarily reflecting the growth in loans
and advances, partially offset by
acquisition-related adjustments.

46
OSB GROUP PLC Annual Report and Accounts 2021
Financial review (Continued)
On a statutory basis, retail deposits
increased by 6% to £17,526.4m from
£16,603.1m as at 31 December 2020,
as the Group continued to attract new
savers. The Group complemented its retail
deposits funding with drawings under the
Bank of England’s schemes. In the year,
the drawings under the Term Funding
Scheme were fully repaid (31 December
2020: £2.6bn) and drawings under
the TFSME increased to £4.2bn as at
31 December 2021 from £1.0bn at the end
of the prior year.
The CCFS warehouse facility was closed
in December 2021.
Liquidity
Both OSB and CCFS operate under the
Prudential Regulation Authority’s liquidity
regime and are managed separately for
liquidity risk. Both Banks hold their own
significant liquidity buffer of liquidity
coverage ratio (LCR) eligible high-quality
liquid assets (HQLA).
Both Banks operate within a target
liquidity runway in excess of the minimum
LCR regulatory requirement, which is
based on internal stress testing. Both
Banks have a range of contingent liquidity
and funding options available for possible
stress periods.
As at 31 December 2021, OSB had
£1,322.8m and CCFS had £1,318.0m of
HQLA LCR eligible assets (31 December
2020: £1,366.7m and £1,069.1m,
respectively). OSB also held a significant
portfolio of unencumbered prepositioned
Bank of England level C eligible collateral
in the Bank of England Single Collateral
Pool. CCFS’s portfolio of level C eligible
collateral met the majority of Bank of
England drawings (with the remainder
collateralised by UK Government
debt) but at year end CCFS did not
have significant levels of available
prepositioned unencumbered collateral,
due to the 100% haircuts applied to LIBOR
based assets from 31 December 2021.
LIBOR transition plans for the Group have
been submitted to the Bank of England
for review, and when approved, the
100% haircuts will be removed releasing
significant level C eligible collateral for
future use in Bank of England facilities
and contingent liquidity.
As at 31 December 2021, OSB had a
liquidity coverage ratio of 240% and
CCFS 158% (31 December 2020: 254%
and 146%, respectively) and the Group
LCR was 196% (31 December 2020:
198%), all significantly in excess of the
2021 regulatory minimum of 100% plus
Individual Liquidity Guidance.
Capital
The Group’s capital position remained
exceptionally strong, with a fully-loaded
CET1 ratio of 19.6% and a total capital
ratio of 21.2% as at the end of 2021
(31 December 2020: 18.3% and 18.3%,
respectively), with the improvement
in both ratios largely due to capital
generation from profitability in the
year. In addition, the total capital ratio
benefitted from the issue of £150.0m
of Additional Tier 1 securities from the
Group’s holding company.
The Group had a leverage ratio of 7.9% as
at 31 December 2021 (31 December 2020:
6.9%).
The combined Group had a Pillar 2a
requirement of 1.27% (2020: 1.18%) of
risk-weighted assets (excluding a static
integration add-on of £19.5m) as at
31 December 2021.
Cash flow statement
The Group’s cash and cash equivalents
increased by £366.1m during the year to
£2,736.7m as at 31 December 2021.
Loans and advances to customers
increased by £1,844.0m during the year,
partially funded by £923.3m of deposits
from retail customers and a decrease in
loans and advances to credit institutions
(primarily the Bank of England call
account) of £167.4m. Additional funding
was provided by cash generated from
financing activities of £747.2m and
included £634.4m of net drawings under
the Bank of England’s TFS and TFSME
schemes and £36.1m of net proceeds
from securitisation of mortgages during
the year. Cash generated from investing
activities was £80.6m.
In 2020, loans and advances to customers
increased by £1,705.0m during the year,
partially funded by £348.1m of deposits
from retail customers offset by an
increase in loans and advances to credit
institutions (primarily the Bank of England
call account) of £154.0m. Additional
funding was provided by cash generated
from financing activities of £838.3m and
included £935.9m of net drawings under
the Bank of England’s TFS and TFSME
schemes and £381.6m of net proceeds
from securitisation of mortgages,
partially offset by the repayment of
warehouse funding, ILTR and commercial
repos during the year. Cash generated
from investing activities was £755.8m,
mainly from the sale of RMBS securities
and derecognition of securitisations.
Summary Consolidated Statement of Cash Flows
Group
31-Dec-2021
£m
Group
31-Dec-2020
£m
Profit before tax 464.6 260.4
Net cash generated/(used in):
Operating activities (461.7) (1,326.3)
Investing activities 80.6 755.8
Financing activities 7 47. 2 838.3
Net increase in cash and cash equivalents 366.1 267.8
Cash and cash equivalents at the beginning of
theperiod 2,370.6 2,102.8
Cash and cash equivalents at the end of the period 2,736.7 2,370.6
1. See the reconciliation of statutory to underlying
results on page 49.

47
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Summary Profit or Loss
Group
31-Dec-2021
£m
Group
31-Dec-2020
£m
Net interest income 650.5 534.0
Net fair value gain/(loss) on financial instruments 18.5 (5.9)
Gain on sale of financial instruments 2.3 33.1
Other operating income 7.9 9.0
Administrative expenses (161.7) (152.7)
Provisions (0.2) (0.1)
Impairment of financial assets 4.9 (71.2)
Profit before tax 522.2 346.2
Profit after tax 393.1 264.9
Key ratios 
Net interest margin 282bps 247bps
Cost to income ratio 24% 27%
Management expense ratio 70bps 70bps
Loan loss ratio -2bps 38bps
Return on equity 24% 19%
Basic earnings per share, pence 86.7 58.1
Extracts from the Statement of Financial Position £m £m
Loans and advances to customers 20,936.9 19,020.8
Retail deposits 17,52 4.8 16,600.0
Total assets 24,403.6 22,472.2
The Group’s external auditor performed an independent reasonable assurance
review of certain alternative performance measures as highlighted with the symbol
Δ – see the Appendix for the auditor’s statement.
Alternative performance measures
The Group presents alternative
performance measures (APMs) in
this Strategic report as Management
believe they provide a more
consistent basis for comparing
the Group’s performance between
financial periods.
Underlying results for 2021 and
2020 exclude exceptional items,
integration costs and other
acquisition-related items.
APMs reflect an important aspect of
the way in which operating targets
are defined and performance is
monitored by the Board. However,
any APMs in this document are not
a substitute for IFRS measures and
readers should consider the IFRS
measures as well.
For more information on APMs and
the reconciliation between APMs and
the statutory equivalents, see the
Appendix onpages 246 and 248.
The Group’s effective tax rate on an
underlying basis increased to 24.7%
for 2021 (2020: 23.5%), due to a larger
proportion of the profits being subject to
the Bank Corporation Tax Surcharge.
On an underlying basis, return on equity
for 2021 improved to 24% (2020: 19%)
reflecting higher profitability in the year,
and underlying basic earnings per share
increased to 86.7 pence (2020:58.1
pence), due to the increase in profit
aftertax.
Net interest income
Underlying net interest income increased
by 22% to £650.5m in 2021 (2020:
£534.0m) due primarily to growth in the
loan book and a lower cost of retail funds.
It also included net effective interest rate
reset gains of £18.6m to reflect updated
prepayment assumptions based on
customer behaviour.
The underlying net interest margin
increased to 282bps from 247bps in
2020 primarily reflecting a lower cost
of retail funds and EIR reset gains which
contributed 8bps. In 2020, underlying NIM
was impacted by a delay in passing on
the base rate cuts in full to retail savers.
Underlying profit
The Group’s underlying profit before tax
was £522.2m for the year, an increase
of 51% compared with £346.2m in 2020,
primarily due to growth in the loan
book, a lower cost of retail funds and an
impairment credit. The Group adopted
adverse Covid-19 related forward-
looking assumptions in its IFRS 9 models
in 2020 which resulted in a substantial
impairment charge in the prior year. The
Group also benefitted from fair value
gains on the Group’s hedging activities in
2021, which partially offset lower gains on
the sale of financial instruments.
Underlying profit after tax was £393.1m,
up 48% (2020: £264.9m) due to the
increase in profit before tax, partially
offset by an increase in the effective
taxrate.
Review of the Group’s performance presented on
anunderlying basis for 2021 and 2020.

48
OSB GROUP PLC Annual Report and Accounts 2021
Financial review (Continued)
Net fair value gain on financial
instruments
The underlying net fair value gain on
financial instruments was £18.5m in 2021
compared to a loss of £5.9m in 2020.
The gain for 2021 included a gain on
unmatched swaps of £10.3m (2020:
£18.0m loss), a gain of £2.4m (2020:
£6.8m loss) from hedge ineffectiveness
and a £5.4m gain from amortisation of
inception adjustments (2020: £16.7m
gain). Other hedging and fair value
movements amounted to a net gain of
£0.4m (2020: £2.2m gain).
The net gain on unmatched swaps
primarily relates to fair value movements
on mortgage pipeline swaps, prior to
them being matched against completed
mortgages and was due to an increase
in outlook on the LIBOR and SONIA yield
curves. The Group economically hedges
its committed pipeline of mortgages and
this unrealised gain unwinds over the life
of the swaps through hedge accounting
inception adjustments.
Gain on sale of financial instruments
The underlying gain of £2.3m in 2021
related to the disposal of A2 notes in the
PMF 2019-1B securitisation in February
2021.
In 2020, the underlying gain of £33.1m
related to the disposal of the remaining
notes under the Canterbury No.1 and PMF
2020-1B securitisations in January 2020
and a sale of notes from the Canterbury
No.3 securitisation.
Other operating income
On an underlying basis, other operating
income was £7.9m in 2021 (2020:
£9.0m) and mainly comprised CCFS’
commissions and servicing fees, including
those relating to securitised loans which
have been deconsolidated from the
Group’s balance sheet.
Administrative expenses
Underlying administrative expenses were
up 6% to £161.7m in 2021 (2020: £152.7m)
due primarily to increased employee
costs.
The underlying cost to income ratio
improved to 24% (2020: 27%) as a result
of higher total income, primarily due to
an increase in net interest income in the
year and gains from the Group’s hedging
activities, partially offset by lower gains
on sale of financial instruments.
The underlying management expense
ratio remained stable at 70bps for 2021
(2020: 70bps) as the Group maintained
its strong focus on cost discipline and
efficiency.
The management expense and cost to
income ratios in 2021 and 2020 also
benefitted from lower spending as a result
of lockdowns, the working from home
guidance and some hiring delays in an
increasingly competitive labour market.
Impairment of financial assets
The Group recorded an underlying
impairment credit of £4.9m in 2021 (2020:
£71.2m loss) representing an underlying
loan loss ratio of -2bps (2020: 38bps).
As the outlook improved, the Group
used less severe forward-looking
macroeconomic scenarios in its IFRS 9
models, albeit with an additional 10%
weighting to the downside scenarios,
to reflect future risks from an increase
in the cost of living and affordability
pressures from further rises in interest
rates. This, together with the strong
house price performance, led to a release
of provisions of £24.9m. This release
was partially offset by IFRS 9 model
enhancements of £4.3m, post model
adjustments of £6.8m and other charges
of £8.9m. Further detail is provided in the
Risk review section.
In 2020, impairment losses were largely
due to adverse pandemic-related
forward-looking macroeconomic
scenarios adopted by the Group,
changes to staging criteria in line with
the PRA guidance, pandemic-related
enhancements to the Group’s models and
fraudulent activity by a third party on a
funding line provided by the Group.
Balance sheet growth
On an underlying basis, net loans and
advances to customers were £20,936.9m
(31 December 2020: £19,020.8m)
an increase of 10%, reflecting gross
originations of £4.5bn in the year.
Total underlying assets grew by 9%
to £24,403.6m (31 December 2020:
£22,472.2m), primarily reflecting the
growth in loans and advances.
Retail deposits increased by 6%
to £17,524.8m (31 December 2020:
£16,600.0m) as both Banks continued
to attract new savers by offering
attractively priced savings products
and outstanding customer service.
The balance of the Group’s funding
requirement was provided by the Bank of
England’s TFSME drawings, which as at
31 December 2021 increased to £4.2bn
from £1.0bn at the end of 2020 as the TFS
drawings were fully repaid (31 December
2020: £2.6bn).

49
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
FY 2021 FY 2020
Statutory
results
£m
Reverse
acquisition-
related and
exceptional
items
£m
Underlying
results
£m
Statutory
results
£m
Reverse
acquisition-
related and
exceptional
items
£m
Underlying
results
£m
Net interest income 587.6 62.9
1
650.5 472.2 61.8 534.0
Net fair value gain/(loss) on financial instruments 29.5 (11.0)
2
18.5 7.4 (13.3) (5.9)
Gain on sale of financial instruments 4.0 (1.7)
3
2.3 20.0 13.1 33.1
Other operating income 7.9 – 7.9 9.0 – 9.0
Total income 629.0 50.2 679.2 508.6 61.6 570.2
Administrative expenses (166.5) 4.8
4
(161.7) (157.0) 4.3 (152.7)
Provisions (0.2) – (0.2) (0.1) – (0.1)
Impairment of financial assets 4.4 0.5
5
4.9 (71.0) (0.2) (71.2)
Impairment of intangible assets 3.1 (3.1) – ( 7.0) 7.0 –
Integration costs (5.0) 5.0
6
– (9.8) 9.8 –
Exceptional items (0.2) 0.2
7
– (3.3) 3.3 –
Profit before tax 464.6 57.6 522.2 260.4 85.8 346.2
Profit after tax 345.3 47.8 393.1 196.3 68.6 264.9
Summary Balance Sheet
Loans and advances to customers 21,080.3 (143.4)
8
20,936.9 19,230.7 (209.9) 19,020.8
Other financial assets
3,382.3 22.0
9
3,404.3 3,341.8 36.8 3,378.6
Other non-financial assets 69.3 (6.9)
10
62.4 82.0 (9.2) 72.8
Total assets 24,531.9 (128.3) 24,403.6 22,654.5 (182.3) 22,472.2
Amounts owed to retail depositors 17,526.4 (1.6)
11
17,52 4.8 16,603.1 (3.1) 16,600.0
Other financial liabilities 4,908.7 2.3
12
4,911.0 4,296.6 4.4 4,301.0
Other non-financial liabilities 72.4
(45.0)
13
27.4 7 7.9 (61.4) 16.5
Total liabilities 22,507.5 (44.3) 22,463.2 20,97 7.6 (60.1) 20,917.5
Net assets 2,024.4 (84.0) 1,940.4 1,676.9 (122.2) 1,554.7
1. Amortisation of the net fair value uplift to
CCFS’ mortgage loans and retail deposits on
Combination
2. Inception adjustment on CCFS’ derivative assets
and liabilities on Combination
3. Recognition of a loss on sale of securitisation notes
4. Amortisation of intangible assets recognised on
Combination
5. Adjustment to expected credit losses on CCFS
loans on Combination
6. Integration costs related to the Combination, see
note 13 to the accounts
7. Reversal of exceptional items, see note 14 to the
accounts
8. Recognition of a fair value uplift to CCFS’ loan
book less accumulated amortisation of the fair
value uplift and a movement on credit provisions
9. Fair value adjustment to hedged assets
10. Recognition of acquired intangibles on
Combination
11. Fair value adjustment to CCFS’ retail deposits less
accumulated amortisation
12. Fair value adjustment to hedged liabilities
13. Adjustment to deferred tax liability and other
acquisition-related adjustments
Notes to the reconciliation of statutory to underlying results table:
Reconciliation of statutory to underlying results

50
OSB GROUP PLC Annual Report and Accounts 2021
Continued progress was made in 2021 against the
Group’s strategic risk management objectives for
the year, including the priority areas set out in the
Annual Report and Accounts for the year ended
31 December 2020.
Executive summary
The Group delivered strong operating
and financial performance against the
backdrop of an improving economic
outlook. However, the Group remains
cognisant of the continued risks which
could emerge from pandemic related
disruption, future economic shocks and
a deteriorating geopolitical situation in
Europe. Prolonged inflationary pressure
coupled with monetary policy tightening
could feed through into consumer
affordability and confidence.
It is important to note that the strong
performance was delivered within the
confines of a prudent risk appetite. The
Group operated within the boundaries
of its risk appetite limits during 2021. The
Group’s overall asset quality remained
stable with respect to customer behaviour
and affordability levels, whilst collateral
values improved during the year. Arrears
levels remained broadly stable, although
certain portfolio segments experienced
increases as the impact of the pandemic
took effect, which were offset by
improvements in other segments.
Group risk appetite statements and limits
were designed and implemented, based
on aligned approaches calibrated for
anticipated financial forecasts and stress
test analysis. Risk appetite is monitored
and managed at the Group and at the
solo Bank level.
All risk management activities were
considered within the confines of the
Board approved risk appetite supported
by a set of comprehensive frameworks,
policies, systems and controls. Established
procedures ensured that all risks were
subject to the three lines of defence
governance and oversight principles.
The Group operated within defined roles
and responsibilities for risk management,
with oversight at the Board and executive
level with independent assurance
provided by the Group’s Internal Audit
function. The Group’s risk management
and governance arrangements were
leveraged effectively to guide and
support decision making during periods
of heightened uncertainty and change.
Active monitoring and assessment
of the Group’s credit risk portfolio
drivers is a critical risk management
discipline. This was achieved through
the active monitoring of credit portfolio
performance indicators, sensitivity and
stress test analysis and thematic deep
dives. Cross-functional expertise was
leveraged to review emerging trends and
take pre-emptive actions in accordance
with the defined risk appetite and
governance standards. The Group’s
investment in advanced credit analytics
greatly enhanced monitoring capabilities,
improved forward-looking assessments
and supported stress testing and
capacity planning analysis. This in turn
allowed the Board to make more informed
decisions in uncertain macroeconomic
and political environments.
Ensuring that the Group continued to
maintain expected credit loss provisions
based on its underlying prudent risk
appetite, was an important consideration
of the Board and senior management.
Expected credit loss (ECL) provisions were
assessed leveraging the Group’s IFRS 9
approved methodologies, individually
assessed provisioning approaches and
portfolio segment based stress and
sensitivity analysis. Benchmarking
analysis was provided to the Board and
senior management, enabling review and
challenge of provision coverage levels and
underlying macroeconomic scenarios.
The Group also maintained strong levels
of capital and funding throughout 2021,
being mindful of the heightened levels of
future uncertainty. Capital and funding
levels were assessed against the impacts
of extreme but plausible economic,
business and operational shocks and
reflected in the Group’s solvency and
liquidity risk appetite.
The Group’s Risk and Compliance
functions made good progress against
planned strategic risk and compliance
objectives including further embedding
of the Group Strategic Risk Management
Framework and enhancing underlying
systems and controls. The Group
continued to invest in people and
technology with key hires made to focus
on operational continuity in resolution,
model development and governance,
data governance and controls, solvency
and operational risk management. The
Group’s second line functions continued
to operate effectively using a shared
service operating model and delivered all
key objectives during the pandemic.
The Group’s capital management
framework was further enhanced during
the year, whilst considerable time was
spent on running a number of capital
planning scenarios and sensitivities
across a range of potential Basel 3.1
outcomes. The Group’s Internal Adequacy
Assessment Process (ICAAP) was further
enhanced during the year and subjected
to a supervisory review and evaluation
process (CSREP) by the Prudential
Regulation Authority (PRA). A number
of reverse stress tests were performed
to provide visibility to the Group and
entity Boards with respect to the
severity of the macroeconomic scenario
which could result in the Group and its
entities breaching minimum regulatory
requirements, which were utilised in the
going concern and viability assessments.
Risk review

51
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Both the regulated Bank entities
continued to retain prudent levels of
liquidity in the context of the uncertain
economic and business outlook.
Particular attention was directed to the
monitoring of the entity level liquidity
positions, focusing on retail savings
customer behaviour, competitor actions
and product changes within the wider
savings market. Given the increasing
prominence of securitisation as a
wholesale funding source, the Group
undertook a review to identify further
areas of enhancement with respect to
systems and controls. This review was
completed and the implementation of
identified enhancements is underway.
The Group engaged in a number of
Financial Conduct Authority (FCA)
thematic reviews and continued to invest
in the level of subject matter compliance
experts, to facilitate good customer
outcomes and treat customers fairly and
be well-positioned to respond to changes
in regulatory expectations and industry
best practices.
Progress was made in developing and
embedding policies, processes and
controls to ensure compliance with
the Bank of England’s Resolvability
Assessment Framework (RAF), including
meeting the requirements for operational
continuity in resolution. The Group also
made significant progress in establishing
the required infrastructure to meet its
future minimum requirements for own
funds and eligible liabilities (MREL).
The Group is committed to reviewing its
risk and controls framework considering
the operating environment, business
operating model and any learnings from
recent risk incidents. Future pandemic-
related disruptions, ongoing integration
activity and regulatory initiatives could
result in an increase in the number of
operational risk incidents observed.
The Group continuously leverages
its operational risk management and
governance frameworks to identify,
assess and appropriately manage
all operational incidents. Reflecting
on the risk events realised within the
year, resulted in additional focus and
resources being assigned to migrating
the Group onto a single operational
risk system, whilst increasing capacity
to continuously review, assess and
test all key risks and controls.
The Group leveraged its operational
resilience capabilities and framework
to effectively manage any disruption
caused by the pandemic. The Group
continued to review and enhance its
operational resilience capabilities and
framework in the context of emerging
best practice standards, regulatory
expectations and the changing
nature of its operating model.
The Group views fair customer outcomes
and provision of timely and effective
support to customers in distress as a
central pillar supporting its purpose,
vision and values. The Group has
customer centric policies and procedures
in place which are subject to ongoing
reviews and benchmarking. The Group
kept its customers front and centre during
all phases of the pandemic ensuring
customers continue to be treated fairly
and in line with regulatory guidelines. The
Group was also appropriately attuned
to the emerging industry and regulatory
focus on customer vulnerability
acknowledging planned changes in
consumer duty regulation.
The Group’s Internal Ratings Based (IRB)
Programme made tangible progress
against plan during the year. The Group’s
end state IRB models are passing through
the final stages of governance, whilst
an extensive self-assessment against
IRB requirements has been completed
and the required application documents
have been drafted and are going
through our governance process. The
IRB capabilities developed by the Group
continue to be integrated into key risk
and capital management processes,
and are already informing strategic
decision making and business planning
activities. The anticipated delay in
Basel 3.1 implementation and the one
year extension to the Group’s MREL
deadlines, provided the Group with the
opportunity to enhance our level of end
state compliance prior to submitting
our module 1 application. We continue
to engage with the PRA to agree a
submission date.
During the year, progress was made in
implementing further enhancements
across the Group’s strategy, governance,
risk management arrangements
and disclosures relating to climate
risk, to facilitate compliance with
recommendations set out in the
Prudential Regulation Authority
supervisory statement SS3/19. Climate
risk was captured within the Group’s
enterprise risk register and a specific
climate risk management framework was
developed which is a sub-framework of
the overarching Group Strategic Risk
Management Framework. A dedicated
Climate Risk Committee was established
to ensure enhancements continued to
be delivered as required. The Group
refreshed and enhanced analysis
identifying and quantifying the risks
relating to climate change in relation to
the Group’s loan portfolios. Impairment
and capital considerations were assessed
via the ICAAP. For further detail please
see the TCFD report.
The Group was subjected to a fraud
which it became aware of in early 2021,
in one of its third party funding lines
which upon detailed investigation was
deemed an isolated incident. A provision
was raised and reported in the 2020
annual accounts and adjusted during
2021 as required. The impact of this
incident was appropriately reflected in
the Groups risk appetite and was subject
to appropriate oversight and review by
the Board and senior management.
Priority areas for 2022
A significant level of uncertainty remains
around the UK economic outlook and
operating environment for 2022 and
beyond. Therefore, continued close
monitoring of the Group’s risk profile and
operating effectiveness remains a key
priority. Other priorities include:
} Continue to leverage the Group’s
Strategic Risk Management
Framework to actively identify, assess
and manage risks in line with approved
risk appetite.
} Fully integrate the Group’s Risk and
Control Self-Assessment (RCSA)
processes into a Group wide risk
system which will ensure more
dynamic and continuous assessment,
adherence to common standards, an
improved user interface and increased
review and challenge.
} Leverage enhancements made across
the Group’s portfolio analytical
capabilities to improve risk-based
pricing, balance sheet management,
capital planning and stress testing.
} Focus on the delivery of all required
capabilities to ensure compliance with
the Bank of England’s Resolvability
Assessment Framework (RAF) and
Operational Continuity in Resolution
(OCIR).
} Further enhance management
information to facilitate a more
informed oversight of the Group’s
riskprofile.
} Make continued progress in
obtaining IRB accreditation and
further leverage capabilities within
wider risk management disciplines
such as IFRS 9 ECL calculations,
underwriting, existing customer
management and collections to drive
portfolio performance benefits and
improvements in shareholder returns.

-2bps -2bps
38bps 38bps
Statutory Underlying
2021 20212020 2020
240%
158%
254%
146%
OSB CCFS
2021 20212020 2020
1.4%
0.7%
1.3%
0.5%
OSB CCFS
2021 20212020 2020
19.6%
21.2%
18.3% 18.3%
2021 20212020 2020
52
OSB GROUP PLC Annual Report and Accounts 2021
Risk review (Continued)
High-level key risk
indicators
Risk appetite is aligned to a select range
of key performance indicators which
are used to assess performance against
strategic, business, operational and
regulatory objectives.
Actual performance against these
indicators is continually assessed
and reported. Detailed to the right
is a summary of the Group’s key risk
indicators with high level commentary
on the performance in 2021.
Commentary
Improving forward-looking macroeconomic
scenarios and house price outperformance
resulted in a release of provision for 2021, which
was partially offset by the impact of model
enhancements, post model adjustments, business
as usual provision movements and write offs
observed. A further 10% weighting was assigned
to the Group’s downside scenarios to reflect
emerging risks in relation to the cost of living.
Commentary
Capital ratios strengthened during the year,
due to capital generation from profitability. The
total capital ratio benefited from the issuance of
£150.0m of additional Tier 1 securities from the
Group’s holding company.
Commentary
Liquidity ratios remained strong during 2021,
driven by strong retail deposit inflows and
refinancing of TFS into TFSME and extra
drawdowns made during the year.
Commentary
The Group’s ratio of balances which are greater
than three months in arrears remained broadly
stable at 1.1% (2020: 0.9%), which was well within
budgeted forecasts.
Across the OSB bank entity a marginal increase in
arrears was observed, driven by a small cohort of
customers who had fallen into arrears after taking
multiple or extended payment holidays. These
increases were partially offset by falling arrears
levels across other lending sub-segments.
CCFS arrears growth was also in part driven by
ongoing portfolio seasoning, and again a small
cohort of customers who have moved into arrears
post payment holidays expiring.
Loan loss ratio
∆
CET1 Total capital
Liquidity coverage ratio
3+ months’ arrears

53
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Strategic Risk
ManagementFramework
The Strategic Risk Management
Framework (SRMF) sets out the principles
and approach to the management
of the Group’s risk profile in order to
successfully fulfil its business strategy
and objectives, including compliance with
all conduct and prudential regulatory
objectives.
Post Combination, the Group
implemented a transitional Strategic
Risk Management Framework to drive a
consistent approach to risk identification
and assessment across both regulated
banking entities. During 2021 a Group
approach was implemented across all
key principal risks, which resulted in the
framework no longer being transitional in
nature. Over time further enhancements
will be made as required.
The SRMF is the overarching framework
which enables the Board and senior
management to actively manage and
optimise the risk profile within the
constraints of the risk appetite. The
SRMF also enables informed risk-based
decisions to be taken in a timely manner,
ensuring the interests and expectations of
key stakeholders can be met.
The SRMF also provides a structured
mechanism to align critical components
of an effective approach to risk
management. The SRMF links overarching
risk principles to day-to-day risk
monitoring and management activities.
The modular construct of the SRMF
provides an agile approach to keeping
pace with the evolving nature of the risk
profile and underlying drivers. The SRMF
and its core modular components are
subject to periodic review and approval
by the Board and its relevant Committees.
The key modules of the SRMF structure
are as follows:
1. Risk principles and culture – the
Group established a set of risk
management and oversight principles
which inform and guide all underlying
risk management and assessment
activities. These principles are
informed by the Group’s Purpose,
Vision and Values.
2. Risk strategy and appetite – the Group
has established a clear business vision
and strategy which is supported by an
articulated risk vision and underlying
principles. The Board is accountable
for ensuring that the Group’s SRMF is
structured against the strategic vision
and is delivered within agreed risk
appetite thresholds.
3. Risk assessment and control – the
Group is committed to building a safe
and secure banking operation via an
integrated and effective enterprise
strategic risk management framework.
4. Risk definitions and categorisation –
the Group sets out its principal risks
which represent the primary risks to
which the Group is exposed.
5. Risk analytics – the Group uses
quantitative analysis and statistical
modelling to help improve its business
decisions.
6. Stress testing and scenario
development – stress testing is an
important risk management tool
which is used to evaluate the potential
effects of a specific event and or
movement in a set of variables to
understand the impact on the Group’s
financial and operating performance.
The Group has a dedicated stress
testing framework which sets out the
Group’s approach to stress testing.
7. Securitisation framework – the Group
developed a securitisation framework
which articulates the key components
of a securitisation issuance that are
relevant to the Group. This sub-
framework is now reflected within the
wider SRMF. As enhancement areas
are identified and implemented the
framework will be updated as required.
8. Risk data and information technology
– the maintenance of high-quality risk
information, along with the Group’s
data enrichment and aggregation
capabilities, are central to the Risk
function’s objectives being achieved.
9. Risk Management Framework’s
policies and procedures – risk
frameworks, policies and supporting
documentation outline the process by
which risk is effectively managed and
governed within the Group.
10. Risk management information and
reporting – the Group established a
comprehensive suite of risk MI and
reports covering all principal risk
types.
11. Risk governance and function
organisation – risk governance refers
to the processes and structures
established by the Board to ensure
that risks are assumed and managed
within the Board-approved risk
appetite, with clear delineation
between risk taking, oversight and
assurance responsibilities. The
Group’s risk governance framework is
structured to adhere to the ‘three lines
of defence’ model.
Further detail on these modules is set out
in the Group’s Pillar 3 disclosures.
The following diagrams outline the
core components of the SRMF and the
organisational arrangements to ensure
that the Group operates in accordance
with the requirements of the SRMF.
Financial risks
Credit risk
Market risk
Liquidity and funding risk
Solvency risk
Strategic and business risk
Reputational risk
Compliance/regulatory risk
Operational risk
Conduct risk
Integration risk
ICAAP ILAAP
Recovery plan/
Z-templates
Risk framework
and policies
Risk data and IT Risk analytics
Risk management
information
Key elements
Principal risks
Risk regulatory
submissions
Capabilities
Non-financial risks
Strategic Risk Management Framework (SRMF)
Risk principles and culture
Risk strategy and appetite
Risk governance and function organisation
Risk definitions and categorisation

54
OSB GROUP PLC Annual Report and Accounts 2021
Risk review (Continued)
Group organisational
structure
The Board has ultimate responsibility for
the oversight of the Group’s risk profile
and risk management framework and
where it deems it appropriate, it delegates
its authority to relevant Committees. The
Board and its Committees are provided
with appropriate and timely information
relating to the nature and level of the
risks to which the Group is exposed and
the adequacy of the risk controls and
mitigants. The Internal Audit function
provides independent assurance to the
Board and its Committees as to the
effectiveness of the systems and controls
and the level of adherence with internal
policies and regulatory requirements.
The Board also commissions third party
subject matter expert reviews and reports
in relation to issues and areas requiring
deeper technical assessment and
guidance.
The schematic below provides a high
level overview of the Group’s governance
arrangements to ensure that robust
risk oversight is maintained across the
Group’s risk profile.
The Group aligns its strategic and
business objectives with its risk appetite
which defines the level of risk which the
Group is willing to accept, enabling the
Board and senior management to monitor
the risk profile relative to its strategic and
business performance objectives. Risk
appetite is a critical mechanism through
which the Board and senior management
are able to identify adverse trends and
respond to unexpected developments in a
timely and considered manner.
The risk appetite is calibrated to reflect
the Group’s strategic objectives, business
operating plans, as well as external
economic, business and regulatory
constraints. In particular, the risk appetite
is calibrated to ensure that the Group
continues to deliver against its strategic
objectives and operates with sufficient
financial buffers even when subjected to
plausible but extreme stress scenarios.
The objective of the Board risk appetite is
to ensure that the strategy and business
operating model is sufficiently resilient.
The Group’s risk appetite is calibrated
using statistical analysis and stress
testing to inform the process for setting
management triggers and limits against
key risk indicators. The calibration
process is designed to ensure that
timely and appropriate actions are
taken to maintain the risk profile within
approved thresholds. The Board and
senior management actively monitor
actual performance against approved
management triggers and limits.
Currently, there are two regulated
banking entities within the Group, risk
appetite metrics and thresholds are set at
both individual entity and Group levels.
The Group’s risk appetite is subject to a
full refresh annually across all principal
risk types and a mid-year review where
any metrics can be assessed and updated
as appropriate.

55
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Board of Directors
First Line of Defence
Chief Executive Officer
Group Executive Committee
Second Line of Defence Third Line of Defence
Ensures that risks are identified,
measured, monitored and reported in
line with policy in an effective manner.
Key Brands / Finance and HR /
Operations / IT and Change /
Commercial / Sales and Marketing /
Legal and Regulation
Provides an independent review and
challenge to the business and control
functions to ensure that all aspects of the
risk profile are managed in adherence to
risk appetite and risk policies.
Risk and Compliance
Provides independent assurance on the
effectiveness of the SRMF, compliance
with regulations, adherence to policies
and effectiveness of controls.
Internal Audit
Group Chief Financial Officer
Group Chief Operating Officer
Group Chief Information Officer
Group General Counsel &
Company Secretary
Group Commercial Director
Group Managing Director, Mortgages
Brand-Level Senior Management
Group Managing Director, Savings
Group Chief Risk Officer
Group Chief Credit &
Compliance Officer and CCFS Chief
Risk Officer
Group Chief Internal Auditor
Board Committees
Management Committees
Business and control functions
Executives
Group
Remuneration
Committee
Board Capital
& Funding Committee
Group Nomination
& Governance
Committee
Group Audit
Committee
Group Risk
Committee
Group Models &
Ratings Committee
Group Credit
Committee
Models & Ratings
Management Committee
Environmental, Social
& Governance (ESG)
Committee
Regulatory
Governance Committee
Group Executive
Disclosure Committee
Portfolio Management
Committee
Operations
Committee
Group Risk
Management
Committee
Group Assets & Liabilities
Committee
Transactional
Credit Committee
(TCC)
Heritable Transactional
Credit Committee
(HTCC)
Climate Risk
Committee
Structure of the Group

56
OSB GROUP PLC Annual Report and Accounts 2021
Risk review (Continued)
Management of climate
change risk
During 2021 further progress was made in
developing and embedding the Group’s
climate risk management approach within
the Group’s wider risk management
arrangements. This included the
development of a specific Climate Risk
Management Framework, implementation
of an ESG Committee and a dedicated
Climate Risk Committee and ESG steering
group.
The Group is exposed to the following
climate-related risks:
Physical risk – relates to climate
or weather-related events such as
heatwaves, droughts, floods, storms,
rising sea levels, coastal erosion and
subsidence. These risks could result
in financial losses with respect to the
Group’s own real estate and customer
loan portfolios.
Transition risk – arising from the effect
of adjusting to a low-carbon economy
and changes to appetite, strategy,
policy or technology. These changes
could result in a reassessment of asset
values and increased credit exposures
for banks and other lenders as the costs
and opportunities arising from climate
change become apparent. Reputational
risk arises from a failure to meet changing
and more demanding societal, investor
and regulatory expectations.
Approach to analysing climate risk
As part of the ICAAP, the Risk function
engaged with a third party to provide
detailed climate change assessments
at a collateral level for the Group’s loan
portfolios. The data was in turn utilised
to conduct profiling and financial risk
assessments.
a) Climate scenarios considered
The standard metric for assessing climate
change risk is the global greenhouse
gas concentration as measured by
Representative Concentration Pathway
(RCP) levels. The four levels adopted by
the Intergovernmental Panel for Climate
Change for its fifth assessment report
(AR5) in 2014 are:
Emissions scenario
Scenario
Change in temperature
(°c)by 2100
RCP 2.6 1.6 (0.9–2.3)
RCP 4.5 2.4 (1.7–3.2)
RCP 6.0 2.8 (2.0–3.7)
RCP 8.5 4.3 (3.2–5.4)
Note: figures within the brackets above
detail the range in temperatures. Single
figures outside the brackets indicate the
averages.
b) Climate risk perils considered
The following three physical perils of
climate change were assessed:
} Flood: wetter winters and more
concentrated rainfall events will
increase flooding.
} Subsidence: drier summers will
increase subsidence via the shrink or
swell of clay.
} Coastal erosion: increased storm surge
and rising sea levels will increase the
rate of erosion.
For each of the physical perils and climate
scenarios detailed above, a decade by
decade prediction, from the current year
to 2100 on the likelihood of each was
provided.
For flood and subsidence, the likelihood
took the form of a probability that a flood
or subsidence event would occur over the
next ten years. For coastal erosion the
distance of the property to the coastline is
provided by scenario and decade.
All peril impacts are calculated at the
property level to a one metre accuracy.
This resolution is essential because flood
and subsidence risk factors can vary
considerably between neighbouring
properties.
In addition to the physical perils, the
current Energy Performance Certificate
(EPC) of each property was considered
to allow for an assessment of transitional
risk due to policy change.
Both the OSB and CCFS portfolios were
profiled against each of the perils detailed
under the best (RCP 2.6) and worst (RCP
8.5) climate scenarios during the 2020’s.
The Risk function focused on performance
over the next ten years, considering the
average expected life of a mortgage.
} Flood risk
By the 2030s, at the Group level, the
percentage of properties predicted to
experience a flood is expected to increase
from 0.48% in the least severe scenario to
0.50% in the most severe scenario. Both
scenarios represent a low proportion of
the Group’s loan portfolios.
} Subsidence
In the 2030s, at the Group level the
percentage of properties predicted to
experience subsidence is expected to
increase from 0.41% in the least severe
scenario to 0.43% in the most severe
scenario. The outcome of both scenarios
represents a low proportion of the
Group’s loan portfolios.

57
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
} Coastal erosion
There are two elements to coastal erosion
risk. The first relates to the proximity of
the property to the coast. The second
depends on whether the area in which the
property is located is likely to experience
coastal erosion in the future.
Both Banks have over 93% of their
portfolios more than 1,000 metres from
the coastline, indicating a very low
coastal erosion risk across the Group.
The CCFS bank entity has only 12
properties within 100m of the coastline,
whilst the OSB bank entity has only 9.
The impact of the most severe climate
change scenario is expected to result in
an incremental 13 properties for OSB and
8 for CCFS to fall within 100 metres of the
coastline. Again, demonstrating there is a
low risk to the Group.
c) Energy Performance Certificate
profile
The EPC profile of both bank entities
follows a similar trend to the national
average. At the Group level 35% of
properties have an EPC of C or better,
48% have an EPC of D, with 15% in E and
negligible percentages in F or G. 90% of
the properties supporting the Group’s
loan portfolios have the potential to have
at least an EPC rating of C.
Value at Risk assessment
The Value at Risk to the bank, measured
through change to Expected Credit
Loss (ECL) and Standardised and
IRB Risk Weighted Assets (RWAs), is
assessed through the application of
stress to collateral valuations as per the
methodology outlined below. Impacts
are assessed against the latest year end
position.
Climate change scenarios
To get the full range of impacts, the most
and least severe climate change stress
scenarios were considered.
The most severe, RCP 8.5, assumes
there will be no concerted effort at a
global level to reduce greenhouse gas
emissions. Under this scenario, the
predicted increase in global temperature
is 3.2–5.4°C by 2100.
The least severe scenario, RCP 2.6,
assumes early action is taken to limit
future greenhouse gas emissions. Under
this scenario, the predicted increase in
global temperature is 0.9–2.3°C by 2100.
Methodology – physical risks
For the physical risks, updated valuations
are produced to reflect the impact of
flood, subsidence and coastal erosion
risk.
The ECL and RWAs are then recalculated
taking these reduced valuations as inputs.
These reduced valuations directly impact
the loan to values (LTVs), and hence loss
given default (LGD).
Methodology – transitional risks
OSB Group’s expectation is that, under
the early action scenario (RCP 2.6), the
government will require all properties to
achieve EPC A, B and C grades where
possible. We considered this risk for
Buy-to-Let accounts only.
If a property is already efficient (i.e. EPC
grade of C, B or A) then the potential
transitional risk is assumed to be zero as
they already meet the requirements.
If a property’s potential EPC grade is less
than C (which is the minimum government
target) then the property is given a target
energy efficiency equal to that of its
maximum potential energy efficiency. The
difference between the property’s target
and current energy efficiencies dictate
the costs of the renovations required to
meet the regulation.
Once the cost of renovation has been
estimated the LGD (to reflect valuation
impacts) and the probability of default
(PD) (to reflect affordability impacts)
are stressed to recalculate the ECL.
The valuation impacts are also used to
recalculate risk weighted asset values
(RWAs).
To apply the LGD stress, a relationship
between LGD and LTV was derived. The
LTV was stressed by subtracting the costs
of renovations from the property value.
This stressed LTV was then mapped back
to a stressed LGD.
The stressed PD or LGD is then used to
derive a stressed ECL.
When it comes to calculating RWAs, the
costs of meeting the EPC guidelines are
subtracted from the property valuations.
This causes a change in the loan to value
level which leads to an increase in RWAs.
d) Analysis outcome
The Group is exposed to a non-material
EPC or capital risk, based on the
collateral and EPC profile of the Group’s
loan portfolios.
e) Planned enhancements during 2022
In the future, the Group’s climate risk
data and scenario analysis capabilities
will be enhanced in line with industry best
practices.
During 2022 key areas of enhancement
include:
} Further embedding of the Climate Risk
Management Framework.
} Development of climate risk appetite
statements and limits.
} Further enhancements to the climate
risk scenario analysis.
} Embedding climate risk within the
risk and control assessment (RCSA)
process across the Group.

58
OSB GROUP PLC Annual Report and Accounts 2021
Principal risks and uncertainties
The Board carried out an assessment of the principal risks and
uncertainties which may threaten the Group’s operating model,
strategic objectives, financial performance and regulatory
compliance commitments.
The outcome of that assessment is summarised in the heat map
below, with further details provided in each principal risk section.
1
Strategic and business risk
Definition Risk appetite statement
The risk to the Group’s earnings and profitability arising from its strategic
decisions, change in business conditions, improper implementation of
decisions or lack of responsiveness to industry changes.
The Group’s strategic and business risk appetite states that the Group does
not intend to undertake any medium- to long-term strategic actions that
would put at risk its vision of being a leading specialist lender, backed by
strong and dependable savings franchises. The Group adopts a long-term
sustainable business model which, while focused on niche sub-sectors, is
capable of adapting to growth objectives and external developments.
Risk Mitigation Direction
Performance against targets
Performance against strategic and
business targets does not meet stakeholder
expectations. This has the potential to damage
the Group’s franchise value and reputation.
Regular monitoring by the Board and the
Group Executive Committee of business and
financial performance against the strategic
agenda and risk appetite. The financial plan is
subject to regular reforecasts. The balanced
business scorecard is the primary mechanism to
support how the Board assesses management
performance against key targets. Use of
stress testing to flex core business planning
assumptions to assess potential performance
under stressed operating conditions.
Increased
The Group delivered strong performance against
targets during 2021 despite the continued
impact of the pandemic. Future improvements
in unemployment levels and house prices, are
somewhat offset by the risks relating to rising
inflation and future interest rate rises.
Competition has increased across both the
lending and savings markets, however the Group
has strong operational capabilities and financial
resources to continue to compete effectively.
Likelihood
Impact
Strategic and business risk
1
Reputational risk
2
Credit risk
3
Market risk
4
Liquidity and funding risk
5
Solvency risk
6
Operational risk
7
Conduct risk
8
Compliance/regulatory risk
Integration risk
9
10
Low
Low
High
High
1
3
5
9
4
7
8
2
10
6
Current assessment of principal risks

59
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Risk Mitigation Direction
Economic environment
The economic environment in the UK is an
important factor impacting the strategic and
business risk profile.
A macroeconomic downturn may impact
the credit quality of the Group’s existing
loan portfolios and may influence future
business strategy as the Group’s new business
proposition becomes less attractive due to
lower returns.
The Group’s business model as a secured
lender helps limit potential credit risk losses
and supports performance through the
economic cycle. The Group continues to utilise
and enhance its stress testing capabilities
to assess and minimise potential areas of
macroeconomic vulnerability.
Unchanged
Economic risks during 2021 relating to pressure
on economic growth due to the impact of
pandemic restrictions, may have resulted in
future rises in unemployment and falling house
prices. During the year these risks shifted to
the risks related to rising inflation levels and
interest rates, which are in part mitigated by
low unemployment levels and stable house
prices.
Competition risk
The risk that new bank entrants and existing
peer banks shift focus to the Group’s market
sub-segments, increasing the level of
competition.
The Group continues to develop products and
services which meet the requirements of the
markets in which it operates. The Group has a
diversified suite of products and capabilities to
utilise, along with significant financial resources
to support a response to changes in competition.
Increased
Competition risk progressively intensified
across core lending sectors in 2021, as
competitors’ lending appetites increased with
the improvement in the economic outlook.
2
Reputational risk
Definition Risk appetite statement
The potential risk of adverse effects that can arise from the Group’s
reputation being affected due to factors such as unethical practices,
adverse regulatory actions, customer dissatisfaction and complaints or
negative/adverse publicity.
Reputational risk can arise from a variety of sources and is a second
order risk – the crystallisation of a credit risk or operational risk can lead
to a reputational risk impact.
The Group does not knowingly conduct business or organise its
operations to put its reputation and franchise value at risk,
Risk Mitigation Direction
Deterioration of reputation
Potential loss of trust and confidence that our
stakeholders place in us as a responsible and
fair provider of financial services.
Culture and commitment to treating customers
fairly and being open and transparent in
communication with key stakeholders.
Established processes in place to proactively
identify and manage potential sources of
reputational risk.
Decreased
The Group delivered strong performance
during 2021 across all core targets, despite the
disruptions caused by the pandemic.

60
OSB GROUP PLC Annual Report and Accounts 2021
Principal risks and uncertainties (Continued)
3
Credit risk
Definition Risk appetite statement
Potential for loss due to the failure of a counterparty to meet its
contractual obligation to repay a debt in accordance with the agreed
terms.
The Group seeks to maintain a high-quality lending portfolio that
generates adequate returns, under normal and stressed conditions. The
portfolio is actively managed to operate within set criteria and limits
based on profit volatility, focusing on key sectors, recoverable values and
affordability and exposure levels.
The Group aims to continue to generate sufficient income and control
credit losses to a level such that it remains profitable even when
subjected to a credit portfolio stress of a 1 in 20 intensity stress scenario.
Risk Mitigation Direction
Individual borrower defaults
Borrowers may encounter idiosyncratic
problems in repaying their loans, for example
loss of a job or execution problems with a
development project.
While in most cases of default the Group’s
lending is secured, some borrowers may fail to
maintain the value of the security, which may
result in a loss being incurred.
Across both OSB and CCFS, a robust
underwriting assessment is undertaken to
ensure that a customer has the ability and
propensity to repay and sufficient security is
available to support the new loan requested.
At CCFS, an automated scorecard approach
is taken, whilst OSB utilises a bespoke manual
underwriting approach, supplemented by
bespoke application scorecards to inform the
lending decision.
Should there be problems with a loan, the
Collections and Recoveries team works with
customers who are unable to meet their loan
service obligations to reach a satisfactory
conclusion while adhering to the principle of
treating customers fairly.
Our strategic focus on lending to professional
landlords means that properties are likely to be
well managed, with income from a diversified
portfolio mitigating the impact of rental voids
or maintenance costs. Lending to owner-
occupiers is subject to a detailed affordability
assessment, including the borrower’s ability to
continue payments if interest rates increase.
Lending on commercial property is based more
on security, and is scrutinised by the Group’s
independent Real Estate team as well as by
external valuers.
Development finance lending is extended only
after a deep investigation of the borrower’s
track record and stress testing the economics
of the specific project.
Unchanged
The drivers of borrower default risk
have shifted from the risk around rising
unemployment and declining house prices,
to rising inflation and consequent increases
in interest rates impacting affordability for
accounts which revert onto higher interest
rates and an increasing risk of borrower
default.

61
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Risk Mitigation Direction
Macroeconomic downturn
A broad deterioration in the UK economy would
adversely impact both the ability of borrowers
to repay loans and the value of the Group’s
security. Credit losses would impact the
Group’s lending portfolios, even if individual
impacts were to be small, the aggregate
impact on the Group could be significant.
The Group works within portfolio limits on LTV,
affordability, name, sector and geographic
concentration that are approved by the Group
Risk Committee and the Board. These are
reviewed on a semi-annual basis. In addition,
stress testing is performed to ensure that the
Group maintains sufficient capital to absorb
losses in an economic downturn and continues
to meet its regulatory requirements.
Unchanged
The economic outlook is uncertain although it
improved in 2021, future risks remain related
to further COVID-19 variants, rising inflation
and resultant increases in interest rates driving
higher levels of customer defaults, falling
collateral values and rising impairment levels.
Wholesale credit risk
The Group has wholesale exposures both
through call accounts used for transactional
and liquidity purposes and through derivative
exposures used for hedging.
The Group transacts only with high quality
wholesale counterparties. Derivative exposures
include collateral agreements to mitigate credit
exposures.
Unchanged
The Group’s wholesale credit risk exposure
remains limited to high-quality counterparties,
overnight exposures to clearing banks and
swap counterparties.
4
Market risk
Definition Risk appetite statement
Potential loss due to changes in market prices or values. The Group actively manages market risk arising from structural interest
rate positions.
The Group does not seek to take a significant interest rate position or a
directional view on interest rates and it limits its mismatched and basis
risk exposures.
Risk Mitigation Direction
Interest rate risk
The risk of loss from adverse movement in the
overall level of interest rates. It arises from
mismatches in the timing of repricing of assets
and liabilities, both on and off balance sheet.
It includes the risks arising from imperfect
hedging of exposures and the risk of customer
behaviour driven by interest rates, e.g. early
redemption.
The Group’s Treasury function actively hedges
to match the timing of cash flows from assets
and liabilities.
Unchanged
The Group’s simple asset and liability structure
and ongoing careful management resulted
in the level of interest rate risk remaining
unchanged in 2021.
Basis risk
The risk of loss from an adverse divergence
in interest rates. It arises where assets and
liabilities reprice from different variable
rate indices. These indices may be market,
administered, other discretionary variable
rates, or that received on call accounts with
otherbanks.
Due to the Group balance sheet structure, no
active management of basis risk was required
by OSB Group in 2021.
Unchanged
Product design and balance sheet structure
enabled the Group to maintain the overall level
of basis risk across both Banks throughout the
year.

62
OSB GROUP PLC Annual Report and Accounts 2021
Principal risks and uncertainties (Continued)
5
Liquidity and funding risk
Definition Risk appetite statement
The risk that the Group, although solvent, does not have sufficient
financial resources to enable it to meet its obligations as they fall due.
The Group will maintain sufficient liquidity to meet its liabilities as they
fall due under normal and stressed business conditions; this will be
achieved by maintaining strong retail savings franchises, supported
by high-quality liquid asset portfolios comprised of cash and readily-
monetisable assets, and through access to pre-arranged secured
funding facilities. The Board requirement to maintain balance sheet
resources sufficient to survive a range of severe but plausible stress
scenarios is interpreted in terms of the liquidity coverage ratio and the
ILAAP stress scenarios.
Risk Mitigation Direction
Retail funding stress
As the Group is primarily funded by retail
deposits, a retail run could put it in a
position where it could not meet its financial
obligations.
Increased competition for retail savings
driving up funding costs, adversely impacting
retention levels and profitability.
The Group’s funding strategy is focused on
a highly stable retail deposit franchise. The
Group’s large number of depositors provides
diversification, where a high proportion of
balances are covered by the FSCS protection
scheme, largely mitigating the risk of a retail
run.
In addition, the Group performs in-depth
liquidity stress testing and maintains a
liquid asset portfolio sufficient to meet
obligations under stress. The Group holds
prudential liquidity buffers to manage funding
requirements under normal and stressed
conditions.
The Group has further diversified its retail
channels by expanding the range of pooled
deposit providers used.
The Group proactively manages its savings
proposition through both the Liquidity
Working Group and the Group Assets and
Liabilities Committee. Finally, the Group
has prepositioned mortgage collateral and
securitised notes with the Bank of England
which allows it to consider alternative funding
sources to ensure it is not solely reliant on retail
savings. The Group also has a mature RMBS
programme.
Unchanged
The Group’s funding levels and mix remained
strong throughout the year.
During the year, OSB and CCFS were both able
to attract significant flows of new deposits and
depositors when required.
Wholesale funding stress
A market-wide stress could close securitisation
markets or make issuance costs unattractive
for the Group.
The Group continuously monitors wholesale
funding markets and is experienced in taking
proactive management actions where required.
The Group issued two securitisations in 2021
and the Group saw strong demand for secured
funding issuance.
Unchanged
The Group’s range of wholesale funding
options available, including repo or sale of
retained notes, collateral upgrade trades
remained broadly unchanged.

63
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Risk Mitigation Direction
Refinancing of TFSME
Funding risk relating to the refinancing of
Bank of England funding with retail deposits
or securitisation funding. In the year, the
Group repaid its TFS drawings in full and drew
a total of £4.2bn under the TFSME creating a
refinancing concentration around the maturity
of thescheme.
The Group has a TFSME allowance significantly
above its wholesale funding requirements
which allowed the TFS scheme to be fully
refinanced by TFSME.
Decreased
Drawings made across the TFSME scheme,
repaying TFS borrowings during the year,
extended the repayment profile of wholesale
funding. This coupled with the fact that the
Group has a well-established retail deposit
franchises and established securitisation
capability resulted in this risk decreasing in
the year.
6
Solvency risk
Definition Risk appetite statement
The potential inability of the Group to ensure that it maintains sufficient
capital levels for its business strategy and risk profile under both the base
and stress case financial forecasts.
The Group seeks to ensure that it is able to meet its Board-level capital
buffer requirements under a severe but plausible stress scenario.
The solvency risk appetite is informed by the Group’s prudential
requirements and strategic and financial objectives.
We manage our capital resources in a manner which avoids excessive
leverage and allows us flexibility in raising capital.
Risk Mitigation Direction
Deterioration of capital ratios
Key risks to solvency arise from balance sheet
growth and unexpected losses which can result
in the Group’s capital requirements increasing,
or capital resources being depleted, such
that it no longer meets the solvency ratios as
mandated by the PRA and Board risk appetite.
The regulatory capital regime is subject to
change and could lead to increases in the level
and quality of capital that the Group needs to
hold to meet regulatory requirements.
Currently the Group operates from a strong
capital position and has a consistent record of
strong profitability.
The Group actively monitors its capital
requirements and resources against financial
forecasts and plans and undertakes stress
testing analysis to subject its solvency ratios to
extreme but plausible scenarios.
The Group also holds prudent levels of capital
buffers based on CRD IV requirements and
expected balance sheet growth.
The Group engages actively with regulators,
industry bodies and advisers to keep abreast
of potential changes and provides feedback
through the consultation process.
Decreased
The Group’s stable credit profile and ongoing
profitability, coupled with capital structure
optimisation during 2021 via the issuance
of AT1 securities, means the Group’s capital
resources have improved.
The Group has been provided with an extra
year to meet its interim and end state MREL
requirements, which helps mitigate the risks
around markets not being supportive of issue
and the resulting cost.
Risks remain around adverse credit profile
performance, resulting from further COVID-19
variants, rising inflation and interest rates.
Uncertainty remains as to the impact of Basel
3.1, with the implementation date likely to be
beyond the initially planned 1 Jan 2023 date
potentially moving out to 2025.

64
OSB GROUP PLC Annual Report and Accounts 2021
7
Operational risk
Definition Risk appetite statement
The risk of loss or a negative impact on the reputation of the Group
resulting from inadequate or failed internal processes, people or
systems, or from external events.
The Group’s operational processes, systems and controls are designed
to minimise disruption to customers, damage to the Group’s reputation
and any detrimental impact on financial performance. The Group
actively promotes the continuous evolution of its operating environment
through the identification, evaluation and mitigation of risks, whilst
recognising that the complete elimination of operational risk isnot
possible.
Risk Mitigation Direction
IT security (including cyber risk)
The risks resulting from a failure to protect the
Group’s systems and the data within them. This
includes both internal and external threats.
The Group invested significantly in enhancing
its protection against IT security threats,
deploying a series of tools designed to identify
and prevent network/system intrusions. This is
further supported by documented and tested
procedures intended to ensure the effective
response to a security breach.
Unchanged
The Group has well-established processes to
allow it to operate effectively when employees
work from home and the cyber risks related to
working remotely.
Whilst IT security risks continue to evolve,
the level of maturity of the Group’s controls
and defences has significantly increased,
supported by dedicated IT security experts.
The Group’s ongoing penetration testing
continues to drive enhancements by
identifying potential areas of risk.
Data quality and completeness
The risks resulting from data being either
inaccurate or incomplete.
The Group established a dedicated Data
Strategy Programme, designed to ensure a
consistent approach to the maintenance and
use of data. This includes both documented
procedures and frameworks and also tools
intended to improve the consistency of data
use.
Unchanged
Progress was made in 2021 to embed Group-
wide governance frameworks in part driven
by the Group’s IRB project. Further work
is planned for 2022, to move closer to the
Group’s target end state.
Change management
The risks resulting from unsuccessful change
management implementations, including the
failure to respond effectively to release-related
incidents.
The Group recognises that implementing
change introduces significant operational risk
and has therefore implemented a series of
control gateways designed to ensure that each
stage of the change management process has
the necessary level of oversight.
Increased
The Group continued to adopt an ambitious
change agenda, although core planned
integration activity is largely complete. In 2021
this risk was monitored and managed well,
however further change is planned in 2022,
against the challenging operating environment
resulting from the risk of new COVID-19
variants and ongoing macroeconomic
uncertainty.
IT failure
The risks resulting from a major IT application
or infrastructure failure impacting access to
the Group’s IT systems.
The Group continues to invest in improving
the resilience of its core infrastructure. It has
identified its prioritised business services and
the infrastructure that is required to support
them. Tests are performed regularly to validate
its ability to recover from an incident.
Unchanged
Whilst progress was made in reducing both
the likelihood and impact of an IT failure, the
risks remain, in particular due to new hybrid
working arrangement. Further work is planned
during 2022.
Principal risks and uncertainties (Continued)

65
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Risk Mitigation Direction
Organisational change and integration
The risks resulting from the Group’s ongoing
integration activities, including systems,
people and infrastructure.
There is a low risk integration project plan
(e.g. no large-scale integration-related IT
project change planned). The Group has an
experienced and capable project management
office, with close oversight and direction
provided by the Group Executive.
Unchanged
To date, organisational change resulting from
the integration project has been managed
well and is largely complete. Further work
is required to reach the target end state
and carefully considered plans, strong risk
identification, monitoring and management
capabilities remain in place.
8
Conduct risk
Definition Risk appetite statement
The risk that the Group’s behaviours or actions result in customer
detriment or negatively impact the integrity of the markets in which it
operates.
The Group aims to operate and conduct its business to the highest
standards which ensure integrity and trust with respect to how the
Group operates and manages its relationships with key stakeholders. In
this regard, the Group has no appetite to knowingly assume risks which
may result in an unfair outcome for customers and/or cause disruptions
in the market sub-segments in which it operates. However, where the
Group identifies potential conduct risks it will proactively intervene by
managing, escalating and mitigating them promptly to ensure a fair
outcome is achieved.
Risk Mitigation Direction
Product suitability
Whilst the Group originates relatively simple
products, there remains a risk that products
(primarily legacy) may be deemed to be unfit
for their original purpose in line with current
regulatory definitions.
The Group has a strategic commitment to
provide simple, customer-focused products.
In addition, a Product Governance framework
is established to oversee both the origination
of new products and to revisit the ongoing
suitability of the existing product suite.
Unchanged
Whilst this risk remained low as a result of
increased awareness and dedicated oversight,
the Group remains aware of the changes to
the regulatory environment and their possible
impact on product suitability.
Data protection
The risk that customer data is accessed
inappropriately, either as a consequence
of network/system intrusion or through
operational errors in the management of the
data.
Non-compliance with GDPR regulations.
In addition to a series of network/system
controls, the Group performs extensive root
cause analysis of any data leaks in order to
ensure that the appropriate mitigating actions
are taken.
The Group has a dedicated project to drive
compliance with GDPR regulation.
Unchanged
Further controls were introduced during 2021,
although network/system threats continue to
evolve in both volume and sophistication.
Good progress was made across key GDPR
project work streams.
Integration risk
The risk that the integration programme
directly or indirectly causes poor outcomes for
customers and the market.
During the integration process, the Group is
committed to adopting a low-risk approach
with a view to taking reasonable steps to avoid
causing poor outcomes for its customers and
the market. The Group will conduct detailed
analysis of potential customer harm associated
with particular integration steps.
Decreased
Integration activity is largely complete with
no material issues being identified to date.
Controls are in place to ensure that the
integration programme does not result in poor
customer outcomes.

66
OSB GROUP PLC Annual Report and Accounts 2021
9
Compliance/regulatory risk
Definition Risk appetite statement
The risk that a change in legislation or regulation, or an interpretation
that differs from the Group’s, will adversely impact the Group.
The Group views ongoing conformity with regulatory rules and
standards across all the jurisdictions in which it operates as a critical
component of its risk culture. The Group does not knowingly accept
compliance risk which could result in regulatory sanctions, financial loss
or damage to its reputation. The Group will not tolerate any systemic
failure to comply with applicable laws, regulations or codes of conduct
relevant given its business operating model.
Risk Mitigation Direction
Prudential regulatory changes
The Group continues to see a high volume
of key compliance regulatory changes that
impact its business activities. These include the
implementation of Basel 3.1 capital rules and
increased Resolvability Assessment Framework
requirements, including updated minimum
requirements for own funds and eligible
liabilities (MREL).
The Group has an effective horizon scanning
process to identify regulatory change.
All significant regulatory initiatives are
managed by structured programmes overseen
by the Project Management team and
sponsored at Executive level.
The Group has proactively sought external
expert opinions to support interpretation of the
requirements and validation of its response,
where required.
Unchanged
The Group continues to have a high level of
interaction with UK regulators and continues
to identify and respond effectively to all
regulatory changes.
Conduct regulation
Regulatory changes focused on the conduct
of business could force changes in the way
the Group carries out business and impose
substantial compliance costs.
Product design, underwriting, arrears
and forbearance policies are misaligned
to regulatory expectations which result in
customers not being treated fairly, particularly
those experiencing financial hardship or
vulnerable customers, with the potential
for reputational damage, redress and other
regulatory actions.
The Group has a programme of regulatory
horizon scanning linking into a formal
regulatory change management programme.
In addition, the focus on simple products and
customer-oriented culture means that current
practice may not have to change significantly
to meet new conduct regulations.
All Group entities utilise underwriting,
arrears, repossession, forbearance and
vulnerable customer policies which are
designed to comply with regulatory rules
and expectations. These policies articulate
the Group’s commitment to ensuring that all
customers, including those who are vulnerable
or experiencing financial hardship, are treated
fairly, consistently and in a way that considers
their individual needs and circumstances.
The Group does not tolerate any systematic
failure to deliver fair customer outcomes.
On an isolated basis, incidents can result in
detriment due to human and/or operational
failures. Where such incidents occur, they are
thoroughly investigated, and the appropriate
remedial actions are taken to address any
customer detriment and prevent recurrence.
Increased
The level of regulatory change continues to be
high, but the Group has sufficient resources
and capabilities to respond to any changes in
an effective and efficient manner.
The Group continues to interact with
regulatory bodies to take part in thematic
reviews as required.
Identifying, monitoring and supporting
vulnerable customers continues to be a key
area of focus.
Ongoing reviews of long-term arrears and
forbearance customers, continues to ensure
that payment terms still remain appropriate.
New consumer duty regulation will require
dedicated resources to be deployed to ensure
the Group continues to comply with emerging
regulatory requirements.
Principal risks and uncertainties (Continued)

67
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
10
Integration risk
Definition Risk appetite statement
The risks resulting from the Group’s ongoing integration activities,
including business, operational and financial performance, systems,
people and infrastructure.
The Combination of OSB and CCFS is intended to enhance scale,
bringing together resources and capabilities, and to explore further
growth opportunities which deliver attractive long-term returns. The
delivery against the integration strategy is framed within the Group’s
Purpose, Vision and Values and the broader risk appetite. The integration
is deemed to be inherently low risk owing to the retention of core
operating brands, similarities of business models, no large-scale IT
integration or substantial migration of customer accounts.
Accordingly, the Board has a low risk appetite for adverse integration
activity outcomes, which put the strategic rationale of the merger,
the Group’s Purpose, Vision and Values or broader risk appetite at
risk. In the event that integration work streams are subject to delay or
reprioritisation, the Board expects the rationale to be clearly understood
and justified, with defined mitigating actions implemented, overseen by
robust levels of governance.
Risk Mitigation Direction
A reduction in the oversight of business as
usual operational performance, increased
risk to operational resilience via the change
process, unintended staff attrition or
infrastructure failure, which in turn adversely
impacts operating and financial performance.
Well-established change and project
management capabilities, coupled with
continued close oversight from the Executive
and Board Committees ensures risks continue
to be mitigated effectively.
Independent assessment, monitoring and
reporting is being undertaken by the Risk and
Internal Audit functions.
Decreased
This risk has decreased with key planned
integration activity largely complete. To
date the integration project has progressed
as planned, and the governance, project
management and control structures have
operated effectively, with no material risks
crystallising.

68
OSB GROUP PLC Annual Report and Accounts 2021
Principal risks and uncertainties (Continued)
Emerging risks
The Group proactively scans for emerging risks which may have an impact on its ongoing operations and strategy and considers its
top emerging risks to be:
Emerging risk Description Mitigating action
Political and
macroeconomic
uncertainty
The impact of new COVID-19 variants remains unknown.
The Group’s lending activity is predominantly focused in
the United Kingdom (with a legacy back book of mortgages
in the Channel Islands) and, as such, will be impacted by
any risks emerging from changes in the macroeconomic
environment. Rising inflation and interest rates pose risks to
the Group’s loan portfolio performance.
The Group has mature and robust monitoring processes and
via various stress testing activity (i.e. ad hoc, risk appetite and
ICAAP) understands how the Group performs over a variety
of macroeconomic stress scenarios and has developed a suite
of early warning indicators, which are closely monitored to
identify changes in the economic environment. The Board and
management review detailed portfolio reports to identify any
changes in the Group’s risk profile.
Climate change As the worldwide focus on climate change intensifies, both
the physical risks and the transitional risks associated with
climate change continue to grow. Climate change risks
include:
} Physical risks which relate to specific weather
events, such as storms and flooding, or to longer-
term shifts in the climate, such as rising sea levels.
These risks could include adverse movements in
the value of certain properties that are in coastal
and low lying areas, or located in areas prone to
increased subsidence and heave
} Transitional risks may arise from the adjustment
towards a low-carbon economy, such as tightening
energy efficiency standards for domestic and
commercial buildings. These risks could include
a potential adverse movement in the value of
properties requiring substantial updates to meet
future energy performance requirements
} Reputational risk arising from a failure to meet
changing societal, investor or regulatory demands
During 2021, further progress was made in developing
and embedding the Group’s climate risk management
approach within the Group’s wider risk management
arrangements. This included the development of
a specific Climate Risk Management Framework,
implementation of an ESG Committee and a dedicated
Climate Risk Committee and ESG steering group.
Updated financial impact analysis was conducted as
part of the ICAAP.
The Group invested a significant amount of time in
developing its ESG and climate risk strategy along with
its Task Force on Climate Related Financial Disclosures
(TCFD).
The Group’s Chief Risk Officers have designated senior
management responsibility for the management of climate
change risk.
Model risk The risk of financial loss, adverse regulatory outcomes,
reputational damage or customer detriment resulting from
deficiencies in the development, application or ongoing
operation of models and ratings systems.
The Group also notes changes in industry best practice with
respect to model risk management.
The Group has well-established model risk governance
arrangements in place, with Board and Executive Committees
in place to ensure robust oversight of the Group’s model risk
profile. Dedicated resources are in place to ensure model
governance arrangements continue to meet any changes in
industry and regulatory expectations.
Regulatory change The Group remains subject to high levels of regulatory
oversight and an extensive and broad-ranging regulatory
change agenda, including meeting the requirements of
the Resolvability Assessment Framework and Operational
Continuity in Resolution. The Group is therefore required to
respond to prudential and conduct related regulatory changes,
taking part in thematic reviews as required. There is also
uncertainty in relation to the regulatory landscape post the
United Kingdom’s exit from the European Union.
The Group has established horizon scanning capabilities,
coupled with dedicated prudential and conduct regulatory
experts in place to ensure the Group manages future
regulatory changes effectively.
The Group also has strong relationships with regulatory
bodies, and via membership of UK Finance inputs into
upcoming regulatory consultations.
Evolving working
practices
The COVID-19 pandemic has resulted in new ways of working
which are impacting employee collaboration, the embedding
of the Group’s Purpose, Vision and Values and labour market
dynamics, which are making it more challenging to recruit
and retain talent across certain positions.
The Group operated effectively during the COVID-19 lockdown
periods, with the majority of staff working from home. A hybrid
working model has been established which continues to work
well.

69
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Risk profile
performancereview
Credit risk
The Group’s loan portfolios performed
robustly during 2021. Prudent criteria
for new originations delivered strong
new business quality, whilst the back
book also outperformed forecasted
expectations. In particular, the Group
saw lower than forecasted arrears levels
and better than expected house price
inflation.
The Group’s prudent credit risk appetite
ensures that loan portfolios are positioned
to perform well in both benign and stress
macroeconomic environments. This
approach continued to serve the Group
well during the ongoing uncertainty
surrounding the potential impact that new
variants of the COVID-19 virus can have
on the UK’s macroeconomic outlook.
Net loan book growth of 10% was
delivered through controlled new lending
in the Group’s core Buy-to-Let and
residential owner-occupier sub-segments,
which more than offset reductions in
bridging and second charge loan books.
The Group also maintained tightened
criteria in its more cyclical product lines.
Mortgage lending balances against semi-
commercial and commercial lending also
reduced, as did the Group’s development
finance and funding lines sub-segments
due to the tighter criteria deployed and
strong repayment inflows.
Sensible new lending LTV criteria and
favourable property price indexing
resulted in the average weighted stock
LTV for OSB and CCFS reducing during
2021 to 60% and 65%, respectively as at
31 December 2021 (31 December 2020:
OSB 64% and CCFS 67%), which resulted
in a prudent average weighted LTV profile
of 62% for the Group.
A low level of arrears continued to be
observed during 2021, with just 1.1% of net
loan balances being greater than three
months in arrears, which was broadly in
line with 0.9% as at 31 December 2020.
Increasing arrears levels were observed
across a small number of portfolios as
payment holidays expired, however
these increases were partially offset by
improving performance across other loan
portfolios.
Group and solo bank interest coverage
ratios remained strong during 2021
at 199% for OSB and 188% for CCFS
(2020:201% OSB and 193% CCFS).
During 2021, forward-looking external
credit bureau probability of default and
customer indebtedness scores remained
strong, with some reversion back to pre-
pandemic levels as customers returned
to spending, once lockdown restrictions
were relaxed.
Expected credit losses (ECL)
Balance sheet expected credit losses
reduced from £111.0m to £101.5m
during the year, a reduction of £9.5m.
Model enhancements, post model
adjustments, underlying credit profile
charges and balances written off and
other non-material items partially
offset this movement, to result in a full
year statutory impairment credit of
£4.4m representing a loan loss ratio of
-2bps (2020: £71.0m charge, 38bps,
respectively). The provision release in
2021 was primarily driven by forecasted
improvements in the forward-looking
macroeconomic outlook, and positive
house price movements observed during
the year.
A summary of the key impairment drivers
during 2021 included:
a. Macroeconomic outlook –
improvements in the economic outlook
resulted in a £24.9m net release in
provision levels. This net release
resulted from a £12.3m provisions
release resulting from positive
residential house price growth, whilst
a further £22.2m of provision was
released through less severe forward-
looking macroeconomic scenarios
being implemented. These positive
movements were partially offset by a
further 10% weighting being applied
to the downside macroeconomic
scenarios in Q4 2021, to reflect
potential go forward risks surrounding
future increases in the cost of living
due to increasing inflation and interest
rate levels, which increased provision
levels by £9.6m.
b. Model enhancements – enhancements
were made to the Group’s underlying
models to ensure estimates continued
to reflect actual credit profile
performance. The cumulative impact
of these enhancements contributed
£4.3m to the total loan loss charge for
2021.
c. COVID-19 post model adjustments
– during the pandemic the Group
implemented a number of post
model adjustments to ensure that
idiosyncratic risks which were not
captured by the IFRS 9 suite of models,
were reflected in provision levels.
An example of this was adjustments
made to time to sale estimates to
reflect the elongated legal process
due to backlogs resulting from the
COVID-19 possession moratorium.
The cumulative impact of post model
adjustments made during the year
resulted in a provision charge of
£6.8m.
d. Credit profile provision charges –
impairment charges driven by changes
in the credit profile such as portfolio
size, portfolio mix and changes in
staging mix totalled £4.3m.
e. Other impairment charges – balance
sheet write offs and other non-
material impairment items resulted in
a cumulative total £5.1m charge for the
year.
The Group continued to closely monitor
impairment coverage levels in the year.
Impairment coverage levels remained
above pre-pandemic levels, reflecting
the continued uncertainty surrounding
the macroeconomic outlook. The Group’s
Risk function conducted top down
analysis, assessing portfolio specific risks
relating to rising cost of living and further
interest rate rises, which confirmed the
appropriateness of modelled provision
levels including any post model
adjustments.
Coverage levels are presented in the
tables on the next page.

70
OSB GROUP PLC Annual Report and Accounts 2021
As at 31 December 2021
Gross
carrying
amount
£m
Expected
credit losses
£m
Coverage
ratio
Stage 1 18,188.4 12.1 0.07%
Stage 2 2,413.6 25.0 1.04%
Stage 3 (+ POCI) 562.1 64.4 11.46%
Total 21,164.1 101.5 0.48%
As at 31 December 2020
Stage 1 16,116.3 21.2 0.13%
Stage 2 2,691.0 31.0 1.15%
Stage 3 (+ POCI) 515.3 58.8 11.41%
Total 19,322.6 111.0 0.57%
A base case forecast is provided, along
with a plausible upside scenario. Two
downside scenarios are also provided
(downside and a severe downside).
ii. How macroeconomic scenarios are
utilised within ECL calculations
Probability of default estimates are
either scaled up or down based on the
macroeconomic scenarios utilised.
Loss given default estimates are impacted
by property price forecasts which are
utilised within loss estimates should an
account be possessed and sold.
Exposure at default estimates are
not impacted by the macroeconomic
scenarios utilised.
Each of the above components are then
directly utilised within the ECL calculation
process.
iii. Macroeconomic scenario governance
The Group has a robust governance
process to oversee macroeconomic
scenarios and probability weightings
used within ECL calculations. Updated
scenarios are provided on a quarterly
basis where an assessment is carried out
by the Group’s Risk function to determine
whether an update is required.
On a periodic basis, the Group’s Risk
function and economic adviser provide
the Group Risk and Audit Committees
with an overview of recent economic
performance, along with updated base,
upside and two downside scenarios.
The Risk function conducts a review of
the scenarios comparing them to other
economic forecasts, which results in a
proposed course of action, which once
approved is implemented.
Risk review (Continued)
iv. Changes made during 2021
Throughout 2021, the scenario suite was
monitored and updated as government
measures were updated and the impact
of the pandemic evolved.
As the macroeconomic outlook improved
during 2021, the Group’s Risk and Audit
Committees focused on assessing
whether specific risks had been captured
within externally provided forward-
looking forecasts. Of particular focus
were the risks relating to rising costs
of living and subsequent rising interest
rates to control inflation levels. The Board
consequently decided to shift a 10%
weighting from the upside scenario, to the
downside and severe downside scenarios
(5% applied to each) to acknowledge the
increasing risks relating to the rising cost
of living and potential impacts of rising
interest rates not captured within the
scenarios at the year end.
Details relating to the scenarios utilised to
set the 31 December 2021 IFRS 9 provision
levels are provided in the table below.
Macroeconomic scenarios
The measurement of ECL under the IFRS 9
approach is complex and requires a high
level of judgement. The approach includes
the estimation of probability of default
(PD), loss given default (LGD) and likely
exposure at default (EAD). An assessment
of the maximum contractual period with
which the Group is exposed to the credit
risk of the asset is also undertaken.
IFRS 9 requires firms to calculate ECL
allowances simulating the effect of a
range of possible economic outcomes,
calculated on a probability weighted
basis. This requires firms to formulate
forward-looking macroeconomic
forecasts and incorporate them in ECL
calculations.
i. How macroeconomic variables and
scenarios are selected
During the IFRS 9 modelling process, the
relationship between macroeconomic
drivers and arrears, default rates and
collateral values is established. For
example, if unemployment levels increase,
the Group would observe an increasing
number of accounts moving into arrears.
If residential or commercial property
prices fall, the risk of losses being realised
on the sale of a property would increase.
The Group adopted an approach which
utilises four macroeconomic scenarios.
These scenarios are provided by an
industry leading economics advisory firm,
that provide management and the Board
with advice on which scenarios to utilise
and the probability weightings to attach
to each scenario.

71
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Forecast macroeconomic variables over a five-year period
(includes average over five years and the peak to trough projections)
As at 31 December 2021
Base case
%
Upside
scenario
%
Downside
scenario
%
Severe
downside
scenario
%
Weighting applied 40 20 28 12
Economic driver Measure
Gross Domestic Product (GDP) 5 year average (yearly GDP growth %) 3.3 4.0 2.3 1.7
Cumulative growth/(fall) to peak/(trough) (%) 14.5 18.5 1.2 -0.4
House Price Index (HPI) 5 year average (yearly HPI growth %) 1.9 4.5 -2.9 -5.8
Cumulative growth/(fall) to peak/(trough) (%) -3.5 -1.0 -22.2 -33.9
Bank Base Rate (BBR) 5 year average (%) 0.3 1.1 -0.1 -0.3
Cumulative growth/(fall) to peak/(trough) (%) 0.7 1.7 -0.4 -0.6
Unemployment Rate (UR) 5 year average (%) 4.2 3.7 6.1 6.5
Cumulative growth/(fall) to peak/(trough) (%) 0.1 -1.2 1.8 2.1
Commercial Real Estate Index (CRE) 5 year average (yearly HPI growth %) 1.9 4.5 -2.9 -5.8
Cumulative growth/(fall) to peak/(trough) (%) -3.5 -1.0 -22.2 -33.9
As at 31 December 2020
Base case
%
Upside
scenario
%
Downside
scenario
%
Severe
downside
scenario
%
Weighting applied 40 30 23 7
Economic driver Measure
Gross Domestic Product (GDP) 5 year average (yearly GDP growth %) 3.2 3.6 2.6 2.2
Cumulative growth/(fall) to peak/(trough) (%) -5.8 -5.6 -6.7 -8.0
House Price Index (HPI) 5 year average (yearly HPI growth %) 2.1 3.6 -0.4 -2.2
Cumulative growth/(fall) to peak/(trough) (%) -8.5 -6.3 -18.9 -26.4
Bank Base Rate (BBR) 5 year average (%) 0.5 0.8 0.1 0.1
Cumulative growth/(fall) to peak/(trough) (%) +1.4 +1.7 +0.0 +0.0
Unemployment Rate (UR) 5 year average (%) 6.9 6.1 8.8 9.6
Cumulative growth/(fall) to peak/(trough) (%) +3.7 +3.1 +5.8 +6.5
Commercial Real Estate Index (CRE) 5 year average (yearly HPI growth %) 2.1 3.6 -0.4 -5.5
Cumulative growth/(fall) to peak/(trough) (%) -8.5 -6.3 -18.9 -40.0
Forbearance
Where a borrower experiences financial
difficulty, which impacts their ability to
service their financial commitments under
the loan agreement, forbearance may
be used to achieve an outcome which is
mutually beneficial to both the borrower
and the Group.
By identifying borrowers who are
experiencing financial difficulties pre-
arrears or in arrears, a consultative
process is initiated to ascertain the
underlying reasons and to establish
the best course of action to enable the
borrower to develop credible repayment
plans to see them through the period of
financial stress.
The specific tools available to assist
customers vary by product and the
customers’ circumstances. The various
options considered for customers are as
follows:
} Temporary switch to interest only:
a temporary account change to
assist customers through periods of
financial difficulty where arrears do
not accrue at the original contractual
payment. Any arrears existing at the
commencement of the arrangement
are retained.
} Interest rate reduction: the Group
may, in certain circumstances, where
the borrower meets the required
eligibility criteria, transfer the
mortgage to a lower contractual rate.
Where this is a formal contractual
change, the borrower will be requested
to obtain independent financial advice
as part of the process.
} Loan term extension: a permanent
account change for customers in
financial distress where the overall
term of the mortgage is extended,
resulting in a lower contractual
monthly payment.
} Payment holiday: a temporary
account change to assist customers
through periods of financial difficulty
where arrears accrue at the original
contractual payment. Any arrears
existing at the commencement of the
arrangement are retained.
} Voluntary-assisted sale: a period of
time is given to allow borrowers to sell
the property and arrears accrue based
on the contractual payment.
} Reduced monthly payments: a
temporary arrangement for customers
in financial distress. For example, a
short-term arrangement to pay less
than the contractual payment. Arrears
continue to accrue based on the
contractual payment.

72
OSB GROUP PLC Annual Report and Accounts 2021
} Capitalisation of interest: arrears are
added to the loan balance and are
repaid over the remaining term of
the facility or at maturity for interest
only products. A new payment is
calculated, which will be higher than
the previous payment.
} Full or partial debt forgiveness: where
considered appropriate, the Group will
consider writing off part of the debt.
This may occur where the borrower
has an agreed sale and there will be
a shortfall in the amount required to
redeem the Group’s charge, in which
case repayment of the shortfall may
be agreed over a period of time,
subject to an affordability assessment
or where possession has been taken by
the Group, and on the subsequent sale
where there has been a shortfall loss.
} Arrangement to pay: where an
arrangement is made with the
borrower to repay an amount above
the contractual monthly instalment,
which will repay arrears over a period
of time.
} Promise to pay: where an arrangement
is made with the borrower to defer
payment or pay a lump sum at a later
date.
} Bridging loans which are more than
30 days past their maturity date.
Repayment is rescheduled to receive
a balloon or bullet payment at the
end of the term extension where the
institution can duly demonstrate future
cash flow availability.
The Group aims to proactively identify
and manage forborne accounts,
utilising external credit reference bureau
information to analyse probability of
default and customer indebtedness
trends over time, feeding pre-arrears
watch list reports. Watch list cases are in
turn carefully monitored and managed as
appropriate.
During 2021, the Group conducted a
review of long term arrears cases with
a particular focus on acquired second
charge portfolios. This review resulted
in the Group entering into forbearance
arrangements with customers to ensure
future repayment terms remained
sustainable. As a result, the Group saw
an increase in new forbearance measures
granted within the year.
Removing the impact of this review,
forbearance levels remained broadly
stable year on year.
Further information regarding forbearance
can be found in note 46 to the financial
statements.
Fair value of collateral methodology
The Group ensures that security
valuations are reviewed on an ongoing
basis for accuracy and appropriateness.
Commercial properties are subject to
quarterly indexing, whereas residential
properties are indexed against monthly
House Price Index data.
Solvency risk
The Group maintains an appropriate
level and quality of capital to support
its prudential requirements with
sufficient contingency to withstand a
severe but plausible stress scenario.
The solvency risk appetite is based
on a stacking approach, whereby the
various capital requirements (Pillar 1,
CRD IV buffers, Board and management
buffers) are incrementally aggregated
as a percentage of available capital
(CET1andtotal capital).
Solvency risk is a function of balance
sheet growth, profitability, access to
capital markets and regulatory changes.
The Group actively monitors all key
drivers of solvency risk and takes prompt
action to maintain its solvency ratios
at acceptable levels. The Board and
management also assess solvency when
reviewing the Group’s business plans and
inorganic growth opportunities.
During 2021, the Group proactively
managed the balance sheet, whilst the
PRA retained capital support measures
detailed within the CRR ‘Quick Fix’
package implemented in 2020 which
continued to support capital ratios.
The counter-cyclical buffer remained
at 0%, with the PRA signalling that it
would increase to 1% from 13 December
2022 in line with the usual 12-month
implementation period. If the UK
economic recovery proceeds broadly
in line with the PRA’s projections and a
material change in the macroeconomic
outlook does not occur, the PRA expects
to increase the rate to 2% in the second
quarter of 2022, which would also be
expected to take effect after the usual 12
month implementation period.
The Group’s fully-loaded CET1 and total
capital ratios under CRD IV increased
to 19.6% and 21.2%, respectively, as
at 31 December 2021 (31 December
2020: 18.3% and 18.3%, respectively)
demonstrating the strong organic capital
generation capability of the business,
the impact of the regulatory support
measures and prudent management of
the credit risk profile. Capital structure
optimisation including the issuance of
AT1 securities contributed to the Group’s
strong capital ratios. The Group’s
Risk review (Continued)
leverage ratio was 7.9% as at 31 December
2021 (31 December 2020: 6.9%).
Liquidity and funding risk
The Group has a prudent approach
to liquidity management through
maintaining sufficient liquidity resources
to cover cash flow imbalances and
fluctuations in funding under both normal
and stressed conditions, arising from
market-wide and Bank-specific events.
OSB’s and CCFS’ liquidity risk appetites
have been calibrated to ensure that both
Banks always operate above the minimum
prudential requirements with sufficient
contingency for unexpected stresses,
whilst actively minimising the risk of
holding excessive liquidity which would
adversely impact the financial efficiency
of the business model.
The Group continues to attract new
retail savers and has high retention levels
with existing customers. In addition, the
Combination allowed the Group a wider
range of wholesale funding options,
including securitisation issuances and use
of retained notes from both Banks.
In 2021, both Banks actively managed
their respective liquidity and funding
profiles within the confines of their risk
appetites as set out in each Bank’s ILAAP.
Funding and liquidity risk remained
broadly stable throughout the year. Retail
funding was generally raised at a low cost
of funds due to increased available funds
in the market. There was a short period in
the late third quarter where retail funding
was volatile as the Group funded the
additional lending brought about by the
stamp duty land tax changes. The Group
refinanced TFS funding into TFSME and
drew down further funds elongating the
funding profile by a further four years
ahead of the scheme’s closure in October
2021.
Each Bank’s risk appetite is based on
internal stress tests that cover a range of
scenarios and time periods and therefore
are a more severe measure of resilience
to a liquidity event than the standalone
liquidity coverage ratio (LCR). As at
31 December 2021, OSB had a liquidity
coverage ratio of 240% (2020: 254%) and
CCFS 158% (2020: 146%), and the Group
LCR was 198%, all significantly above
regulatory requirements.
Market risk
The Group proactively manages its risk
profile in respect of adverse movements in
interest rates, foreign exchange rates and
counterparty exposures.
The Group accepts interest rate risk and
basis risk as a consequence of structural

73
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
mismatches between fixed rate mortgage
lending, and fixed term savings and the
maintenance of a portfolio of high-quality
liquid assets. Interest rate exposure is
mitigated on a continuous basis through
portfolio diversification, reserve allocation
and the use of financial derivatives
within limits set by the Group ALCO and
approved by the Board.
The Group’s balance sheet is
predominantly GBP denominated. The
Group has some minor foreign exchange
risk from funding the OSBI business.
Wholesale counterparty risk is measured
on a daily basis and constrained by
counterparty risk limits.
The Group has a dedicated working group
to focus on the risk and transition away
from the LIBOR benchmark. Required
capabilities were implemented during
2021 and the Group is well positioned to
respond to any future changes.
Operational risk
The Group continues to adopt a
proactive approach to the management
of operational risks. The operational
risk management framework has been
designed to ensure a robust approach
to the identification, measurement and
mitigation of operational risks, utilising
a combination of both qualitative and
quantitative evaluations. The Group’s
operational processes, systems and
controls are designed to minimise
disruption to customers, damage to the
Group’s reputation and any detrimental
impact on financial performance. The
Group actively promotes the continual
evolution of its operating environment.
Where risks continue to exist, there are
established processes to provide the
appropriate levels of governance and
oversight, together with an alignment to
the level of risk appetite stated by the
Board.
A strong culture of transparency and
escalation has been cultivated throughout
the organisation, with the Operational
Risk function having a Group-wide remit,
ensuring a risk management model
that is well embedded and consistently
applied. In addition, a community of Risk
Champions representing each business
line and location has been identified.
Operational Risk Champions ensure that
the operational risk identification and
assessment processes are established
across the Group in a consistent manner.
Risk Champions are provided with
appropriate support and training by the
Operational Risk function.
Due to the COVID-19 pandemic and the
resulting high number of employees
working and accessing systems from
home, the risk of a cyber-attack has
heightened. Whilst IT security risks
continue to evolve, the level of maturity
of the Group’s controls and defences has
significantly increased, supported by
dedicated IT security experts. The Group’s
ongoing penetration testing continues
to drive enhancements by identifying
potential areas of risk.
Regulatory and compliance risk
The Group is committed to the highest
standards of regulatory conduct and
aims to minimise breaches, financial costs
and reputational damage associated with
non-compliance.
The Group has an established
Compliance function which actively
identifies, assesses and monitors
adherence with current regulation and the
impact of emerging regulation.
In order to minimise regulatory risk, the
Group maintains a proactive relationship
with key regulators, engages with
industry bodies such as UK Finance and
seeks external expert advice. The Group
also assesses the impact of incoming
regulation on itself and the wider market
in which it operates, and undertakes
robust assurance assessments from
within the Risk and Compliance functions.
Conduct risk
The Group considers its culture and
behaviour in ensuring the fair treatment
of customers and in maintaining the
integrity of the market segments in which
it operates to be a fundamental part of its
strategy and a key driver to sustainable
profitability and growth. The Group does
not tolerate any systemic failure to deliver
fair customer outcomes.
On an isolated basis, incidents can result
in detriment owing to human and/or
operational failures. Where such incidents
occur they are thoroughly investigated
and the appropriate remedial actions are
taken to address any customer detriment
and to prevent recurrence.
The Group considers effective conduct
risk management to be a product of
the positive behaviour of all employees,
influenced by the culture throughout the
organisation and therefore continues to
promote a strong sense of awareness and
accountability.
Strategic and business risk
The Board has clearly articulated the
Group’s strategic vision and business
objectives supported by performance
targets. The Group does not intend to
undertake any medium to long-term
strategic actions, which would put the
Group’s strategic or financial objectives
at risk.
To deliver against its strategic objectives
and business plan, the Group has
adopted a sustainable business model
based on a focused approach to core
niche market segments where its
experience and capabilities give it a clear
competitive advantage.
The Group remains highly focused on
delivering against its core strategic and
financial objectives, against a highly
competitive and uncertain backdrop.
Reputational risk
Reputational risk can arise from a variety
of sources and is a second order risk
– the crystallisation of a credit risk or
operational risk can lead to a reputational
risk impact.
The Group monitors reputational risk
through tracking media coverage,
customer satisfaction scores, the share
price and Net Promoter Scores provided
by brokers.
Integration risk
Integration risk was identified as a
principal risk for the duration of the
integration programme, though the
integration of the two entities was
deemed inherently low risk owing to the
similarity of the two business models,
with the programme involving no
material system or data migrations. The
Board took the view that it has limited
appetite for integration related risks
and deemed it appropriate to identify,
assess and manage integration risks
in full compliance with the wider risk
management framework and governance
disciplines of the Group.
Integration risk relates to any risk
which may result in the non-delivery
of planned integration objectives with
respect to desired strategic outcomes
and costs and synergy performance
targets. Additionally, integration risk is
also assessed with respect to the other
principal risks which may be adversely
impacted as a consequence of the
integration activities.
The integration programme and the
underlying risk profile continued to
perform in line with expectations with
no material risk incidents or trends
identified during the year. The integration
programme did experience some level of
disruption owing to the pandemic, but
overall the programme has continued to
progress as planned.

74
OSB GROUP PLC Annual Report and Accounts 2021
The viability statement is required
to include an explanation of how the
prospects of the Group have been
assessed, the time horizon over which
the assessment has been performed and
why the assessment period is deemed
appropriate. The viability statement
needs to be supported by an assessment
of the principal risks and uncertainties to
which the Group is exposed and based
on reasonable expectations to conclude
that the Group will be able to continue to
operate and meet its liabilities as they fall
due over that period.
The Group uses a five-year time frame
in its business and financial planning
and for internal stress test scenarios.
The long-term direction is informed
by business and strategic plans which
are set on an annual basis and are
reviewed and refreshed quarterly. The
operating and financial plans consider,
among other matters, the Board’s risk
appetite, macroeconomic outlook, market
opportunity, the competitive landscape,
and sensitivity of the financial plans
to volumes, margin pressures and any
changes in capital requirements.
In making the assessment the Board has
considered all principal and emerging
risks including climate risk, where the
risk is likely to emerge outside of the
viability assessment horizon. The impacts
of climate risk have been assessed as
part of the Internal Capital Adequacy
Assessment Process (ICAAP), which
concluded that at present the associated
financial risks are not material for the
Group.
While a five-year time frame is used
internally, levels of uncertainty increase
as the planning horizon extends and the
Group’s operating and financial plans
focus more closely on the next three
years. The Board therefore considers a
period of three years to be an appropriate
period for the viability assessment to be
made.
The Banks within the Group are
authorised by the PRA, and regulated
by the FCA and the PRA, and the Group
undertakes regular analysis of its risk
profile and assumptions. It has a robust
set of policies, procedures and systems to
undertake a comprehensive assessment
of all the principal risks and uncertainties
to which it is exposed on a current and
forward-looking basis (as described in the
Principal risks and uncertainties section).
The Group identifies, assesses, manages
and monitors its risk profile based
on the disciplines outlined within the
Strategic Risk Management Framework,
in particular through leveraging its
risk appetite framework (as described
in the Risk review). Potential changes
in the aggregated risk profile are
assessed across the business planning
horizon by subjecting the operating and
financial plans to severe but plausible
macroeconomic and idiosyncratic stress
scenarios.
The viability of the Group is assessed
at both the Group and the underlying
regulated Bank levels, through leveraging
the risk management frameworks
and stress testing capabilities of both
regulated banks. Post Combination,
the risk assessment and stress testing
capabilities of OSB and CCFS have
been progressively aligned; however,
the strength of the capital and funding
profiles of both Banks provides an
appropriate level of assurance that the
Group and its entities can withstand a
severe but plausible stress scenario.
Stress testing is an integral risk
management discipline, used to assess
the financial and operational resilience
of the Group. The Group has developed
bespoke stress testing capabilities
to assess the impact of extreme but
plausible scenarios in the context of its
principal risks impacting the primary
strategic, financial and regulatory
objectives. Stress test scenarios are
identified in the context of the Group’s
operating model, identified risks, business
and economic outlook. The Group actively
engages external experts to inform the
process by which it develops business and
economic stress scenarios.
In accordance with Provision 31 of the 2018
UK Corporate Governance Code, theBoard is
required toassess the viability of the Group over
a stated time horizon with a supporting statement
inthe Annual Report.
Viability statement

75
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
A broad range of stress scenarios are
analysed considering the potential
impacts to changes in HPI, unemployment
and interest rates over a range of severity
scenarios. The Group’s capabilities are
well established and continue to support
proactive management of the Group’s risk
profile, ongoing operational resilience and
liquidity and capital positions.
Stresses are applied to lending volumes,
capital requirements, liquidity and
funding mix, interest margins and credit
and operational losses. Stress testing also
supports key regulatory submissions such
as the ICAAP, ILAAP and the Recovery
Plan. ICAAP stress testing assesses
capital resources and requirements over a
five-year period.
The Group has identified a broad suite
of credible management actions which
can be implemented to manage and
mitigate the impact of stress scenarios.
These management actions are assessed
under a range of scenarios varying in
severity and duration. Management
actions are evaluated based on speed
of implementation, second order
consequences and dependency on
market conditions and counter parties.
Management actions are used to inform
capital, liquidity and recovery planning
under stress conditions.
In addition, the Group identifies a
range of catastrophic scenarios, which
could result in the failure of its current
business model. Business model failure
scenarios (Reverse Stress Tests or RSTs)
are primarily used to inform the Board of
the outer limits of the Group’s risk profile.
RSTs play an important role in helping
the Board and Executives to assess the
available recovery options to revive a
failing business model.
The Group has established a
comprehensive operational resilience
framework to actively assess the
vulnerabilities and recoverability of its
critical services. The Group also conducts
regular business continuity and disaster
recovery exercises.
The ongoing monitoring of all principal
risks and uncertainties that could impact
the operating and financial plan, together
with the use of stress testing to ensure
that the Group could survive a severe
but plausible stress, enables the Board
to reasonably assess the viability of the
business model over a three-year period.
The pandemic has had a disruptive
impact on the Group’s business
growth objectives and the changing
characteristics of the underlying risk
profiles, particularly in relation to credit
and operational risks. The Group has
enhanced its risk assessment, monitoring
and reporting procedures to ensure that
these risks are effectively managed and
has accordingly adjusted its risk appetite.
The Group has also maintained strong
capital and funding profiles with a
view to ensuring continued financial
resilience. However, the Group remains
fully cognisant of the evolving nature of
the pandemic crisis with respect to the
potential impact of new variants.
The Board has also considered the
potential implications of the pandemic
in its assessment of the financial and
operational viability of the Group and has
a reasonable belief that the Group retains
adequate levels of financial resources
(capital and liquidity) and operational
contingency. In assessing the viability
of the Group, the Board considered the
potential impact and risks facing the
Group with respect to the pandemic
as set out in the Risk review on pages
50 to 73 and the Principal risks and
uncertainties on page 58.
In line with prior years, in the viability
assessment process the Board
considered the latest macroeconomic
forward-looking scenarios utilised for
business planning and the Group’s
IFRS 9 calculations which consider the
ongoing risks relating to new COVID-19
variants and other macroeconomic
risks such as rising inflation and interest
rate rises. Utilising analysis which
identifies scenarios which would result
in the Group becoming unviable, the
Board considered the plausibility of
these scenarios materialising, whilst
considering the likely impact of new
COVID-19 variants. Forecasts and capital
stress tests considered the impact of the
countercyclical buffer being progressively
phased back in, IFRS9 transitional
arrangements unwinding, the Group’s go
forward minimum requirements for own
funds and liabilities (MREL) phasing in and
a range of Basel 3.1 outcomes.
The potential impact of the pandemic on
the economy and the Group’s operations
is subject to continuous monitoring
through the Group’s Management
Committees, capital and liquidity,
operational resilience and business
continuity planning working groups, with
appropriate escalation to the Board and
supervisory authorities.
The Group has progressively enhanced its
approach to assessing the viability of its
strategy and business operating model,
in particular the Group has enhanced its
capabilities by:
} Enhancing stress testing capabilities
through more focused assessment of
more vulnerable cohorts of its lending
portfolio supported by increased
granularity of monitoring and risk
reporting.
} Increasing the diversification of
its funding profile, supported by
enhanced assessment of funding and
liquidity risk profiles.
} Enhancing the assessment of
operational resilience through the
ongoing review of priority business
functions, including supporting
infrastructure and dependencies
through a simulated business
continuity exercise.
The current financial forecasts, risk
profile characteristics and stress test
analysis, the Group’s capital, funding
and operational capabilities support the
Directors’ assessment that they have a
reasonable expectation that the Group
will remain viable over the three-year
horizon.

76
OSB GROUP PLC Annual Report and Accounts 2021
ESG framework
Our Purpose is to help our customers, colleagues
and communities prosper. To achieve it, we operate
in a sustainable way with environmental, social and
governance matters relevant to the Group atheart.
As a specialist lender, we have long been aware
of our responsibilities and the positive impact we
can make to society through our activities and
responding to the challenges and opportunities that
environmental, social and governance (ESG) matters
present, has now become an integral part of the
Group’s strategy.
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Supply
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Our
customers
Our
employees
Ethical
behaviour
Reducing
impact of
our operations
Reducing
impact of
our mortgage
portfolio
Green products
and finance
Our culture
and values
Transparency
and
accountability
Independence
Our
communities
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7
8
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e
e
p
a
g
e
9
4
Helping
our customers,
colleagues and
communities
prosper
G
o
v
e
r
n
a
n
c
e
S
e
e
p
a
g
e
1
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0

77
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
ESG has been a key consideration for
the Board and the Group’s management.
During 2021, one of our Non-Executive
Directors, Sarah Hedger, was appointed
as the Group’s ESG Champion. We also
created a new ESG Governance structure
(see TCFD section) and a dedicated
ESG team who are responsible for the
preparation, management and monitoring
of the Group’s ESG strategy and
operating framework and in collaboration
with cross-functional departments, its
implementation and delivery.
We have embedded ESG and climate
risk into our Strategic Risk Management
Framework as an enterprise risk and in
2022, the Executive remuneration will be
linked directly to ESG performance. Our
aim is to build an agile and maturing ESG
response which is relevant to the Group’s
specialist lending activities and which
align to the Group’s Purpose, Vision and
Values, whilst supporting the Group’s
approach to long term sustainability,
value creation and resilience.
Environment
Climate change is the most pressing
challenge facing our planet and we
are acutely aware of the threat climate
change poses not just to our business, but
far more importantly, the way in which
we live our lives, be that our customers,
colleagues, suppliers, or communities.
Following the decision to be carbon
neutral
1
for our operational emissions
2
in
2021 and to demonstrate our continued
and long-term dedication to climate
change, we have joined the Net Zero
Banking Alliance and committed to
assist with industry efforts to achieve
decarbonisation goals and to achieve
net zero greenhouse gas emissions
3
by 2050. We fully recognise, however,
that no business can achieve net zero
on their own and collaborative support
from industry and policy makers will be
required to achieve this goal.
During 2021, we established a baseline
for the emissions associated with the
properties we finance, commonly referred
to as Scope 3 financed emissions, using
the Partnership for Carbon Accounting
Financials (PCAF) methodology. In 2022,
we will publish our science-based targets
for 2030, in order to reach net zero no
later than 2050, aligned with the goals
of the Paris Climate Accord. A robust
transition plan and roadmap will be
developed supported by qualitative and
quantitative targets.
We realise that the biggest potential
for positive impact regarding climate
change is influencing the quality of UK
housing stock. As such, opportunities
exist for the Group to build on its
experience and expertise in our chosen
markets sub-segments, to provide
supporting products, thought leadership,
and the education and awareness
our customers need in support of
their decarbonisation journey.
To read more about our performance and
ambitions, see the Environment section on
page 78.
Social responsibility
At OSB Group, we have a long tradition of
looking after our customers, employees
and the communities in which we operate
and this approach is firmly embedded in
our Purpose.
Our goal of helping our customers prosper
means not only providing excellent service
demonstrated in the high NPS scores we
receive but also working hard to make
transacting with us as easy as possible,
doing our best to offer transparent
products and providing assistance to
vulnerable borrowers. Our Sales teams
are focused on helping brokers and
borrowers in even the most complex of
cases. We pride ourselves in having high
standards and practices that govern how
we deal with our customers.
Our Vision to be recognised as the UK’s
number one choice specialist bank would
not be possible without the talented and
dedicated colleagues the Group employs.
Our ambition is to continue building a
diverse and inclusive culture that we are
proud of and one of our accomplishments
in 2021 was combining two great cultures
and establishing a set of common values
for OSB and CCFS colleagues.
We are immensely proud to retain,
recruit and train the best talent and we
will continue to provide a nurturing work
environment to our nearly 1,800 strong
workforce, and to encourage them to fulfil
their professional and personal goals.
We have also been helping our
communities in the UK and India
prosper through our volunteering and
philanthropy efforts. We have always
been active in the communities in which
we operate and have a strong ethos
of giving something back. As well as
supporting our national charity partner,
Campaign Against Living Miserably, we
also helped more local causes, donating
nearly £395k in the year.
To read more about our efforts for our
employees and our communities, see the
Social responsibility section on page 94.
Governance
Strong governance is fundamental to the
execution of the Group’s strategy and
promoting the success of the Group. It
forms a vital part of our ESG framework.
The Group’s Board recognises its
responsibility for providing oversight and
control, and for setting the tone on how
we conduct the business, deal with our
stakeholders and fulfil our regulatory
obligations.
Climate risk challenges and opportunities
were one of the key considerations for
the Board in the year and many initiatives
were undertaken to respond to them. In
2021, the Climate Risk Committee met
five times to progress the framework,
targets and measurement necessary
to achieve our climate-related goals. In
addition, to fully align the performance
of the Group, its ESG goals and Executive
remuneration, environmental targets
are embedded in the 2022 remuneration
scorecard for the Group’s CEO, CFO and
the Executive Committee members, see
the Remuneration report on page 144.
The Board was also actively engaged
in overseeing the launch of the Group’s
Purpose, Vision and Values, which
established one Group-wide approach
post the Combination with CCFS. The
Group’s diversity and inclusion efforts
were also guided by the Board and Board
members participated in the activities
of the Diversity and Inclusion Working
Group in the year. We are proud that the
efforts to promote diversity, inclusion and
equality at OSB Group were awarded a
Talent Inclusion and Diversity Evaluation
Award (TIDE) achieving the silver
standard.
To read more about our governance
structure, see the Governance section on
page 114.
We are proud of the progress we have
made on ESG but recognise that there
is more to do in the future. Our purpose
of helping our customers, colleagues
and communities prosper, backed by
the strong ESG foundations we have
laid in 2021 places us well to tackle
the important challenges we, and our
stakeholders, face.
In the pages that follow, we provide more
detail on our progress so far and how we
plan to continue to build on our success.
1. Carbon neutrality is defined as balancing
operational emissions so they are equal (or less
than) the emissions removed through carbon
offsetting.
2. Operational footprint is defined as the Group’s
Scope 1, Scope 2 and Scope 3 (paper, water,
waste, business travel, electricity transmission
and distribution) emissions. It therefore excludes
upstream and downstream emissions from our
value chain.
3. Net zero is defined as reducing scope 1, 2, and
3 emissions to zero or to a residual level that is
consistent with reaching net zero emissions at
the global or sector level in eligible 1.5°C aligned
pathways.

78
OSB GROUP PLC Annual Report and Accounts 2021
Environment
Reducing impact from
ouroperations
As a specialist lender, the impact of our
operations is relatively low compared to
the emissions associated with properties
we provide finance for. Our operational
emissions are driven predominantly by
the use of resources associated with
electricity and gas, the procurement
of goods and services and travel for
business purposes. These sources are
to be expected given the simple nature
of our operations. The Group has been
committed to reducing the footprint of
our operational emissions for a number
of years and progress has been made
against our 2019 baseline.
Management
Our Environmental Policy embodies
the Group’s commitment to meeting or
exceeding all relevant environmental
obligations under law and regulation,
reducing our impact and to continuously
improving performance. The policy is
endorsed by the Environmental, Social
and Governance (ESG) Committee and
approved by the Group Nomination and
Governance Committee.
Policy commitments:
} accepting responsibility for
contributing to the protection of the
environment and striving to ensure
that our actions will not detract
from the long-term sustainability of
environmental resources;
} striving to reduce the consumption
of materials and energy and use
renewable or recyclable materials
where possible;
} to be a ‘Zero to Landfill’ business,
meaning that all Group waste is either
reused, recycled or sent to a dedicated
Energy from Waste facility;
} to minimise harmful emissions and
prevent pollution;
} to promote advantageous
environmental practices by all
employees; and to consult with
suppliers to improve the environmental
impact of goods and services provided
to the Group.
100%
of electricity purchased by the Group
inthe UK was from renewable tariffs
Below are the objectives stated within the
policy:
Energy and water
} seek to reduce the amount of energy
used as much as possible;
} adjust heating with energy
consumption in mind; and
} the energy consumption and efficiency
of new products will be taken into
account when purchasing.
Paper
} minimise the use of paper in the office;
} reduce packaging as much as
possible;
} seek to buy recycled and recyclable
paper products; and
} reuse and recycle all paper where
possible.
Office supplies
} evaluate the environmental impact of
any new products the Group intends
to purchase;
} favour more environmentally-friendly
and efficient products wherever
possible; and
} reuse and recycle everything where
possible.
Transportation
} promote the use of travel alternatives
such as e-mail or video/telephone
conferencing;
} make additional efforts to
accommodate the needs of those
using public transport;
} encourage car sharing for journeys to
and from the workplace; and
} favour ‘green’ vehicles and encourage
use by providing electric vehicle
charge points.

79
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Reduction in operational carbon
footprint
1
against 2019 baseline
10.2%
Maintenance and cleaning
} cleaning materials used will be as
environmentally-friendly as possible;
} materials used in office refurbishment
will be as environmentally friendly as
possible; and
} only licensed and appropriate
organisations will be used to dispose
of waste.
All UK offices work under a management
system certified to the international
environmental management standard
ISO:14001 2015, supported by the
Environmental Working Group
whose efforts are focused on raising
awareness across the Group and driving
improvement.
Improvement has been driven by
programs including:
} further replacements of lighting with
energy efficient solutions;
} the effective management of energy
consumption through our Building
Management Systems;
} procuring paper for our offices that
comes from renewable sources and
recycling it when its disposed of;
} increasing awareness amongst
employees through training;
} OSBI offices becoming paperless;
} installation of Electric Vehicle charging
points in UK office locations; and
} implementation of the Group’s Electric
Vehicle Incentive scheme.
The ongoing pandemic and the impacts
of lockdowns, restrictions and our priority
to protect the health of employees
hampered our ability to further progress
delivery against objectives.
2021 was a milestone year for the Group,
committing to carbon neutrality in our
operational emissions for the first time
and to delivering net zero operational
emissions by 2030.
This further demonstrates the absolute
commitment of the Group to responsible
and sustainable business practices.
2021 was the first year that 100% of the
electricity the Group procured in the UK
came from renewable sources saving
around 342 tonnes of CO
2
emissions
(tCO
2
e). High quality carbon offsets
from Verra – Verified Carbon Standard,
Gold Standard or UN Clean Development
Mechanism certified programs have
been used to compensate for the residual
emissions of 908.8 tCO
2
e.
Greenhouse gas emissions
We utilise the Greenhouse Gas Protocol
to measure our carbon footprint across
Scopes 1, 2 and 3. Scope 3 has 15
categories, the most material of which
(Category 1 paper and water, Category 3
electricity transmission and distribution,
Category 5 waste and Category 6
business travel) are within our own
activities, other than financed emissions
(category 15).
We have reported on all of the emissions
sources required under The Companies
Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 and the
Companies (Directors’ Report) and
Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018
– commonly referred to as Streamlined
Energy and Carbon Reporting (SECR).
The emissions disclosure is verified by
Interface NRM, an independent UKAS
and ASI accredited Certification Body,
operating in accordance with ISO
17021 (2015) Conformity assessment:
Requirements for bodies providing
audit and certification of management
systems; and ISO 17065 (2012) Conformity
assessment – Requirements for bodies
certifying products, processes and
services.
OSB Group plc is a ‘quoted company’
under the SECR regulation and must
report annually on greenhouse gas
emissions from Scope 1 and 2 electricity,
gas and transport.
In 2021, we reduced our absolute
operational Scope 1, 2 and 3 (business
travel, paper, waste, water, electricity
transmission and distribution) emissions
by 10.2% against a 2019 baseline. This
remains primarily due to the impact of
the pandemic and through reduction and
efficiency activities.
Our 2021 total market-based
2
operational
footprint was 908.82 tCO
2
e, covering
Scopes 1, 2 and 3 (business travel,
paper, waste, water, transmission
and distribution). The market-based
methodology includes reductions from the
procurement of electricity from renewable
energy tariffs that covered 67% of
consumption.
Increased occupancy in 2021 drove
higher overall consumption of electricity,
natural gas and gas oil than in 2020,
(an additional 391,372 kWh) all sources
of fuel for heating, lighting, power and
ventilation.
In addition, we expanded our emissions
inventory in 2021 to include further Scope
3 categories including rail, taxi and
accommodation, which contributed an
additional 18tCO
2
e, and the emissions
form transmission and distribution losses
associated with the electricity we were
supplied with, contributed 31 tCO
2
e.
These improvements have built on the
energy efficiency activities of 2020,
where benefits were driven primarily
through investment in improved controls
of Building Management systems and
the majority of the estate changing to
LED lighting and PIR sensors, with LED
lighting fitted in all refurbishment works
undertaken.
2. The market-based method reflects emissions
from electricity that we have purposefully chosen
e.g. renewable energy tariffs. It derives emission
factors from contractual instruments.
1. Operational footprint is defined as Scope 1, Scope
2 and Scope 3 (paper, water, waste, business
travel, electricity transmission and distribution)
emissions and excludes upstream and downstream
emissions from the Group’s value chain.

80
OSB GROUP PLC Annual Report and Accounts 2021
Environment (Continued)
Greenhouse Gas (GHG) Emissions
Direct and indirect GHGemissions
(Scopes 1, 2 and 3) Description Specific fuels
Amounts in metric tonnes CO
2
equivalent 2019 2020 2021
Total direct (Scope 1) Combustion of fuel on site
and transportation
On site: natural gas, gas
oil transport: petrol, diesel,
unknown vehicle fuel 151.75 268.36 269.77
Total indirect (Scope 2) Purchased energy Electricity
Location-based 1,084.45 789.86 869.37
Market-based 1,034.05 386.00 527.14
Total indirect Scope 3
(exc. category 15)
GHG Protocol Scope 3 material
categories exc. category 15
Unknown vehicle fuel
156.81 71.26 111.91
Total operational emissions
(location-based)
For electricity, reflects the
average emissions intensity of
grids on which energy
consumption occurs 1,393.01 1,128.62 1,251.05
Total operational emissions
(market-based)
For electricity, reflects the
emissions from the electricity
that we are purchasing,
including renewable energy
tariffs 1,393.01 725.62 908.82
Total Indirect Scope 3 – financed
emissions (category 15)
Category 15 Investments
(financed emissions)
1
Scope 1 direct and 2
indirect emissions
(gas and electricity) N/M N/M 278,854
Total GHG emissions
All measured emissions for the
year 2021 1,393.01 1,128.62 280,105.05
GHG intensity
GHG intensity ratio Description
2019 2020 2021
Full Time Equivalent (FTE)
employees
The number of FTEs employed
1,789 1,740 1,744
Annual turnover £m 343 508 629
Scope 1, 2 and 3
(business travel only)
Metric tonnes of CO
2
equivalent
per employee 0.78 0.65 0.72
Scope 1, 2 and 3
(business travel only)
Metric tonnes of CO
2
equivalent
per £m turnover 4.06 2.22 1.99
Scope 3 financed emissions
– physical emissions intensity
Kgs of CO
2
equivalent per
square metre
2
N/M N/M 24.81

81
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Country breakdown – operational emissions
Direct and indirect GHG emissions
(Scopes 1, 2 and 3 non-category 15)
2019 2020 2021
UK
Tonnes of CO
2
equivalent 933.21 624.22 637.44
Percentage of overall operation
emissions 67% 55% 50%
India
Tonnes of CO
2
equivalent 459.8 504.71 631.61
Percentage of overall operation
emissions 33% 45% 50%
Energy consumption
Energy usage kWh Specific fuels
2019 2020 2021
Total kWh consumed Electricity, natural gas, gas
oil, petrol, diesel, unknown
vehicle fuel – 3,459,592 3,801,988
UK kWh consumed Electricity, natural gas, gas
oil, petrol, diesel, unknown
vehicle fuel – 2,818,406 2,952,631
India kWh consumed Electricity, natural gas, gas
oil, petrol, diesel, unknown
vehicle fuel – 641,186 849,358
N/M = Not measured
1. Calculated by multiplying an attribution factor (outstanding amount of loan divided by the property value at origination) by the emissions associated with the property taken
from EPC. Calculated for the mortgage portfolio as the largest asset class. It does not cover non-modelled book or securitised loans.
2. Total 2021 sq m coverage was 11,238,236.7. Absolute emissions 467,188.02 tCO
2
e, financed emissions 278,853,50 tCO
2
e (calculated as per PCAF methodology for Mortgages).
Scope 1 Scope 2
Location -
Based
Reduction from
renewable
energy tariffs
Scope 3
Water
Scope 3
Waste
Scope 3
T&D
Scope 3
Business
Travel
Total Market
Based
Emissions
869.37
-342.23
0.50
1.35
31.20
78.87
908.82
-908.82
Carbon
offsets
achieves
carbon
neutrality
269.77
2021 Operational Emissions Breakdown (tCO
2
e)

82
OSB GROUP PLC Annual Report and Accounts 2021
Environment (Continued)
Electricity and gas
The majority of our operational emissions
is generated through the use of electricity,
gas and diesel. These energy sources are
used in the most part to provide heat,
power, lighting and ventilation to our
office buildings.
In 2021, all electricity purchased in the
UK came from renewable energy tariffs,
reducing net emissions by 342 tCO
2
e,
when using the market-based method.
The market-based method reflects
specifically the emissions from the
electricity that a company is purchasing;
this may be different from the location
based method, which reflects electricity
that is generated locally.
In India, diesel is used to power back-up
generators that are frequently used as a
result of instability in the electricity grid.
Waste
Waste generated within our buildings is
segregated at the point of disposal, prior
to removal from site. Business process
waste is in the form of paper, waste
from electrical and electronic equipment
(WEEE), alongside general household
waste generated in employee welfare
areas. Where the Group is responsible
for final disposal of waste, it is recycled
or sent to an Energy from Waste facility.
63tonnes of waste paper were recycled
in2021 via a specialist contractor.
Achievements in 2021
Pillar Ambition Progress
Net Zero
emissions by
2050
Delivering the Group’s transition to
alowcarbon economy in line with
climate science
Reduced absolute Scope 1, 2 and 3 (business travel only) emissions by
10.2% from a 2019 baseline
Re-certification of our UK office buildings to ISO 14001:2015
Environmental Management Standard
All purchased electricity in the UK was from renewable energy tariffs
and represented 67% of electricity the Group procures annually.
Set a baseline for Scope 3 financed emissions using PCAF methodology
Committed to offset our 2021 Scope 1, 2 and 3 (business travel only)
emissions using verified and validated carbon offsets
Started work to determine our Net Zero targets using SBTi methodology
for Scope 1, 2 and 3 emissions
Launched the Electrical Vehicle incentive scheme giving employees
access to electric vehicles at competitive prices
OSBI now operates paperless offices saving c. 3,400 A4 sheets of paper
Integrated greenhouse gas emissions metrics and targets into Executive
remuneration
Mitigating and
adapting to
Climate Risk
(Further detail
can be found in
the TCFD report
on page 86)
Incorporating climate-related risks
andopportunities into risk management
and strategic planning
Formalised our approach to Climate Risk Management by incorporating
it into the Group Enterprise Risk Register with the requisite frameworks,
risk management tools and oversight mechanisms
Sustainable
products
Delivering options to our savings and
lending customers that support their
transition to low carbon
Initiated work to develop products that offer a meaningful opportunity
for the Group and customers to address financed emissions
Sustainable
supply chains
Supporting our suppliers and service
providers towards carbon literacy and
delivering decarbonisation across our
value chains
Updated our Vendor Code of Conduct and Ethics to include
expectations of vendors to integrate environmental considerations into
their operational processes and to monitor and improve environmental
performance
Collaborating to
succeed
Actively seeking out opportunities to go
further, faster in driving real change in
the financial services sector and real
economy
Joined the United Nations Net Zero Banking Alliance
Signed the commitment letter to the Science Based Targets initiative
Signed the commitment letter to the Partnership for Carbon Accounting
Financials
Water
Water use is driven directly by the
occupancy of our buildings in relation
to welfare facilities. The emissions
associated with water use are c.0.4% of
our overall operational footprint.

83
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
In 2022, we will set science-based
targets for 2030 in order to achieve net
zero no later than 2050, aligned with
the goals of the Paris Climate Accord.
Neil Richardson
ESG Sustainability Director

Financed emissions baseline
OSB’s GHG emissions (tCO
2
e)
Operational
(Scope 1
and 2)
emissions
1
1,057
71
247x
278,854
Operational
(Scope 3)
emissions
Financed
emissions
84
OSB GROUP PLC Annual Report and Accounts 2021
Environment (Continued)
Reducing impact
from our portfolio
Financed emissions
A significant step forward was made in
2021 with the establishment of a baseline
for our mortgage portfolios financed
emissions. Financed emissions, (classified
as Scope 3) are the greenhouse gas
emissions associated with our loans and
investments in a reporting year.
The Group has selected the Partnership
for Carbon Accounting Financials (PCAF)
methodology as the most robust and
suitable method to calculate financed
emissions. The PCAF method attributes
a proportion of the total emissions of a
property, taken from Energy Performance
Certificate (EPC), to the lender based on
the outstanding value of the loan versus
the value at origination. An inherent
limitation of this methodology is that it
relies on the availability of property EPC
certificates. In 2021, 76% of properties
had a valid EPC certificate. Where a
valid EPC certificate was not available,
properties were allocated a D rating. 2021
PCAF calculations included the mortgage
portfolio as the largest asset class. It
did not cover non-modelled book or
securitised loans.
We will look to improve EPC coverage to
improve the accuracy of our emissions
calculations over time.
The outcome of our initial baseline is that
financed emissions account for around 247
times that of our operational emissions;
see the graph to the right that shows
Pathway to Net Zero in 2050
OSB Group journey Initial action
Paris
Agreement
Emissions to
be halved
Emissions to
be Net Zero
2015 2020 2021 20302022 2050
Accelerating action
2019
Environmental
management
systems certified
toISO 14001
Local actions taken
to address impact
e.g. paper use,
recycling etc.
First OSB Group
carbon footprint
reported as
part of SECR
regulations
AMBITION:
Net Zero targets
and transition plan
disclosed
Absolute and
emissions intensity
targets set for interim
(2030) and longer
term (2050)
AMBITION:
Net Zero across Scope
1 and 2 emissions with
limitedoffsetting
On track to address
Scope 3 emissions
by2050 or sooner
AMBITION:
Net Zero across
operations and
value chain by
2050, cutting most
emissions and
balancing remaining
emissions with natural
or technical solutions
Exploring carbon
restorative, putting
back more than we
take out
Move to renewable energy
tariffs reduces UK footprint
byc. 740 tonnes of CO
2
e
Extending scope of reporting
to OSBI and other emissions
sources
Offsetting 2021 Scope 1, 2 and 3
(business travel only) emissions
achieving carbon neutrality
for 2021
Development of a plan
toachieve Net Zero by 2050
Selection of frameworks
to align our measurement,
target setting, reporting
anddisclosures
Net Zero
The financial sector, including specialist
lenders such as ourselves understand
local communities and stakeholders
and can shape the path to net zero
demanding a just and fair transition for
the UK’s communities. Through sector-
wide initiatives we can define the action
needed to ensure we deliver a net zero
future that supports our customers,
colleagues and communities to prosper.
The Group has made formal commitment
to:
} Science-Based Targets Initiative (SBTi)
} Partnership for Carbon Accounting
Financials (PCAF)
These initiatives will ensure our emissions
baselines and reduction targets are
aligned with the latest, sector specific
thinking on measurement, carbon
reduction pathways and target setting.
The Group is excited to have joined
the United Nations – Net Zero Banking
Alliance (NZBA) recognising that
collaborative working to solve the
challenges that lie ahead will be critical
in maintaining momentum and creating a
meaningful voice to represent the needs
of the sector and those of our customers.
Integral to our membership of NZBA and
beyond, we are committed to using the
deep understanding of the sub-sectors
we work in to provide thought leadership
reflective of the specialist nature of our
business and our position in the market.
We believe adopting a leadership position
in this evolving arena will ensure value
creation for our customers, colleagues
and communities.
the comparison between our operations
emissions and our financed emissions.

85
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Priorities
The Group is focused on driving down
our own direct impact on the climate
through proportionate and meaningful
action. Furthermore we are committed to
ensuring that we provide strong thought
leadership, education, awareness and
products that help customers achieve
climate-related improvements, thus
ensuring that we expand our scope of
focus to the emissions we enable through
our footprint.
The Group’s net zero strategy is based on
a responsible and transparent transition
for our operational emissions with the
following principles for action:
} eliminating emissions wherever
possible
} improving the efficiency of our
processes to reduce the associated
emissions or their impact
} offsetting the residual emissions
through the procurement of validated
and verified high quality carbon
offsets.
In 2022, we will work to define our wider
Scope 3 indirect emissions inventory. In
doing so, we will better understand the
overall emissions profile of upstream
and downstream activities associated
with our supply and value chains. With
this analysis we can identify significant
emissions sources and associated risks
and opportunities for improvement.
A forward looking decarbonisation plan
for our operations emissions towards
net zero by 2030 will be defined and
deployed during 2022.
Addressing the emissions associated
with the properties we finance will be
a strategic focus for 2022 but requires
careful consideration to make sure our
transition plans drive real emissions
reductions, are sustainable, fair and
offervalue to our customers.
In 2022, we will publish our Net Zero
targets for operational emissions
2
and
financed emissions
3
, defined using STBi
methodologies. This cements our ambition
to the delivery of the Paris Climate Accord
goals.
1. Operational emissions are based on 2020
2. Operational emissions target boundary will reflect
Greenhouse Gas Protocol standard inventory
boundary with all Scope 1 and Scope 2 categories
and material scope 3 categories in scope,
excluding Category 15 financed emissions which
will have a separate target.
3. A specific target for Scope 3 category 15 financed
emissions will be set following SBTi Guidance for
Financial Institutions.
Priorities table
Targets Set and disclose Science Based Targets for Scope 1, 2 and 3 emissions for 2030, in order to achieve net zero
nolater than 2050
Transition plan Define the near and medium term actions the Group will take to deliver the transition to Net Zero by 2050
Metrics Implement suitable metrics and improve data integrity and quality to measure and report progress towards targets
Engagement Engage key stakeholders in understanding our carbon ambitions and improving carbon literacy
Products Develop and release products that deliver a material difference to our net zero ambitions and those
ofourcustomers
Supply Chain Cascade our ambitions to strategic suppliers of goods and services in order to begin addressing our supply
chainemissions
Collaboration Identify key collaboration opportunities for both sharing and learning through initiatives, programs, charities
andnetworks
Risk assessment Further refine our approach to climate risk assessment in line with climate and ESG strategy. Further detail on
opportunities for 2022 can be found in the TCFD report on page 86

86
OSB GROUP PLC Annual Report and Accounts 2021
Our climate ambition and strategy
OSB Group acknowledges that we have
a responsibility to respond to the threat
of climate risk and have embarked upon
a programme of work to address this
evolving risk and ensure that we are able
to address associated challenges.
As a specialist secured lender, we believe
that our position enables us to contribute
towards assisting our customers and by
extension, wider society towards a low-
carbon economy.
The Board and management understand
and are committed to ensuring that the
Group takes appropriate and timely
actions to discharge its duties towards
the global sustainability agenda. To
that end, we are focused on driving
down the Group’s own direct impact
on the climate through proportionate
and meaningful action. Furthermore,
we are also committed to ensuring that
we provide strong thought leadership,
education, awareness, and products
that help customers achieve climate-
related improvements, thus ensuring
that we expand our scope of focus to
the emissions we enable through our
footprint.
The Board is conscious that the climate
agenda from regulatory bodies continues
to evolve and further work is required
to fully embed our climate operating
model across the Group. During 2021,
a new Environmental, Social and
Governance (ESG) Committee was
established to assist in driving forward
key ESG initiatives and actions. We
remain committed to embedding climate
considerations in the Group’s strategy,
governance, risk management and
financial and strategic planning.
The Group has aligned its disclosures to
be compliant with TCFD and to provide
transparent reporting to assist our
stakeholders in understanding the impact
of climate change on our business. The
assessment of which has resulted in a low
financial materiality to the business whilst
still taking a proportionate approach
should this change in the future.
This is our first iteration of climate-related
disclosures and as such, while a lot of
progress has been made, we recognise
that more work needs to be done and
have identified these specifically in the
table below, where relevant.
The 11 recommended disclosures required
within the context of TCFD compliance
are listed as:
1. Describe the board’s oversight of
climate-related risks and opportunities.
2. Describe management’s role in
assessing and managing climate-related
risks and opportunities.
3. Describe the climate-related risks
and opportunities the organization has
identified over the short, medium, and
long term.
4. Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
5. Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
6. Describe the organisation’s processes
for identifying and assessing climate-
related risks.
7. Describe the organisation’s processes
for managing climate-related risks.
8. Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organization’s
overall risk management.
9. Disclose the metrics used by the
organisation to assess climate related
risks and opportunities in line with its
strategy and risk management process.
10. Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
11. Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
The Group’s response to each is detailed
in the table below and numbered against
each, where we provide a summary of our
approach to these matters and indicate
where additional information can be
found.
Task Force on Climate-Related
Financial Disclosures (TCFD)
Listing Rule 9.8.6R(8) requires that, from this year, the
Group provides climate-related financial disclosures
that comply with the 11 TCFD recommendations
and recommended disclosures, or that it explains
why it is not compliant. The Board confirms that it
has disclosed sufficient information to comply with
the 11 TCFD recommendations and recommended
disclosures. We will continue to review the guidance
contained in the TCFD annex and will supplement our
future disclosures where appropriate.

87
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Achievements in 2021 Opportunities and developments for 2022 Further details
Governance
1. Board oversight of climate-related risks
andopportunities:
} The Board enhanced its oversight of climate-related
risks via quarterly updates related to climate risk and
the Group’s progress. All major Committee papers
incorporate environmental impact as a standalone
section, highlighting the emphasis the Board is placing
on the climate. Furthermore, climate risk and ESG
matters are a key consideration of the Group strategy,
for which the Board assumes responsibility and
maintains oversight. This illustrates the importance the
Board has given to climate risk, ensuring that the Board
considers climate-related issues when reviewing and
guiding strategy and that it can respond in an agile and
appropriate manner to a range of climate-related risks
and opportunities.
} In addition to its direct oversight, the Board delegated
responsibility for the Group’s climate related risk
appetite, risk monitoring, provisioning, and capital and
liquidity management through the ICAAP to the Group
Risk Committee.
} The Group Audit Committee reviewed the overarching
ESG strategy, which includes climate-related risks and
opportunities and will continue to do so as a routine
matter.
} The Group CRO has been delegated SMF (Senior
Management Function) responsibility for climate risk.
} A Non-Executive Director of the Board, Sarah Hedger,
was appointed to oversee ESG matters on behalf of the
Board.
} Continue to develop climate-related expertise
to ensure effective oversight of climate-related
risks, the Group is intent on working with external
advisers as appropriate to inform annual
budgets, business plans as well as setting the
Group’s performance objectives.
} Oversee the continued development of an agile
and versatile climate risk strategy and monitor
adherence to this by setting and monitoring
meaningful climate-related targets through risk
appetite monitoring.
} Climate and wider ESG training is to be provided
to the Board in the second quarter of 2022.
} It is envisioned that during 2022 the Group Risk
Committee will become formally responsible
for ensuring that the Group integrates climate-
related financial risk appropriately into its
risk appetite, once set (see Risk Management
opportunities below for risk appetite setting)
and thus will be able to oversee progress against
goals and targets for addressing climate-related
issues.
See the
Governance
report for
further
information on
governance
structure.
2. Management’s role in assessing and managing
climate-related risks and opportunities:
} The Climate Risk Committee which is a Management
Committee responsible for the effective identification
and management of climate-related risks, was
established in 2020. The Committee is guided by the
Climate Risk Management Framework (CRMF) which is
used to monitor the Group’s progress and adherence to
its climate-related goals. Its output is summarised and
shared with the ESG Committee which then is passed to
the Board for consideration.
} Climate risk was recognised as an enterprise risk and
SMF responsibilities were allocated to the Group’s CRO.
} Robust scenario analysis methodology is in place and
was independently verified by the Group Internal Audit
Function.
} An ESG Sustainability Director was appointed and
is responsible for ensuring the Group’s strategy is
aligned and consistent with the various climate-related
initiatives across the Group as well as ensuring the
Group is well positioned to meet its ESG reporting
objectives.
} The Internal Audit function also widened its remit in 2021
to include periodic reviews of climate risk activity as
evidenced by a climate scenario audit that took place in
August 2021.
} The Group will finalise its climate risk strategy,
which also incorporates the Group’s wider ESG
ambitions. The governance structures to support
our climate risk strategy will continue to be
embedded across the Group’s risk management
disciplines. It is envisioned that this strategy will
also provide a better understanding of the risks
and opportunities of climate risk.
} A Group-wide review of policies across all
principal risk areas will be conducted to ensure
that climate risk is appropriately embedded and
monitored.
} Longer term climate targets will be developed
during 2022 for inclusion in the Group’s long term
incentive plans.
} ESG metrics are incorporated in the CEO’s and
the CFO’s personal objectives and the Balanced
Business Scorecard. From 2022, the personal
objectives will include specific climate related
metrics such as GHG direct emissions intensity
ratio.
None

88
OSB GROUP PLC Annual Report and Accounts 2021
Task Force on Climate-Related Financial Disclosures (Continued)
Climate Risk Governance structure
We are aware that our climate ambitions
can only be achieved through the
successful integration of climate-
related matters into our governance and
management structure. To that end, we
have implemented a robust governance
model to reflect our ambitions and
strategy.
Roles and responsibilities have been
allocated across the various committees,
teams and working groups as appropriate
and work continues to further embed
climate-risk across the organisation.
The Chief Executive Officer (CEO) holds
overall accountability for the Group’s
climate-related risk and exposure and
is supported by the Group Chief Risk
1. Compliance’s role will evolve over time;
commencing with policy and advice and then
assurance once required.
Officer (CRO). The Group CRO holds a
joint SMF accountability for identifying
and managing climate-related risks
across their respective risk areas. This
responsibility is reflected in the fact
that the Group CEO and CRO have had
a variety of ESG metrics incorporated
into their Balanced Business Scorecard,
including climate specific metrics such as
GHG emissions.
OSB Group Board
Governance and Oversight
Execution
ESG Committee
Assurance
Second Line of Defence
1
ESG/Sustainability Team
Risk
Finance
Business Lines
Climate Risk
Committee
Culture
Working
Group
Diversity and
Inclusion
Working Group
Environmental
Working Group
ESG Steering
Group
Health and
Safety Working
Group
Workforce
Advisory
Forum
Charity
Working Group
Policy and Advice
Assurance
Third Line of Defence
Reporting, First Line Risk
Management, and Coordination
Execution
Group Audit Committee Group Risk Committee

89
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Achievements in 2021 Opportunities and developments for 2022 Further details
Strategy
3. Climate-related risks and opportunities identified
over the short, medium, and long term:
} The Group primarily lends on residential assets either
for owner occupation or for landlords to let. In this
context, the Group undertook scenario analysis
1
across
its portfolio using a best-case scenario of warming
limited to 0.9ºC to 2.3ºC by 2100 and a worst case
scenario of warming up between 3.2ºC to 5.4ºC by
2100 to determine the level of exposure to climate-
related risks. The key physical risks used for scenario
analysis are flooding, subsidence and coastal erosion
in the long term (10 years+) and energy performance
certificate (EPC) rating requirements which is used a
key transitional risk in the short term (3 years+). The
analysis showed that current exposure to these risks
as a proportion of our overall lending is relatively small
based on the makeup of our portfolio.
1. The Group defined its time periods as follows: short term: less than one
year; medium term: period to 2035; long term: period to 2050.
} The Group recognises the opportunity to expand
its scenario analysis to a wider range of transition
risks. Work will be undertaken in 2022 to expand
the scope of scenarios to areas such as consumer
behavioural patterns and wider market trends.
} The Group has undertaken and commissioned
research within the mortgage market to fully
understand broker and customer perceptions,
attitudes, and knowledge within this area, and
will regularly refresh this to identify solutions
that allow the market to meet the government’s
climate change commitments.
} Continue to identify climate-friendly products,
utilising the full range of the Group’s brands to
maximise positive impact on climate cognizant of
any conduct risk related matters that may arise
as a result of climate risk.
} Climate risk will be assessed for its materiality
as one of the drivers in the Group’s financial
planning processes.
} The Group understands that sustainable finance
is an important tool for facilitating the transition
to a low-carbon economy. Funding, thought
leadership, broker and borrower education and
awareness will be key enablers in this endeavour.
None
4. Impact of climate-related risks and opportunities on
Group’s businesses, strategy, and financial planning:
} The Group made sustainability a key priority for
the Board and committed to the development and
implementation of a robust Net Zero Plan in line with the
Paris Agreement’s central aim to strengthen the global
response to the threat of climate change. The Group
established emissions reduction targets grounded in
climate science through the Science Based Targets
initiative (SBTi) methodology which will be submitted
for SBTi validation in 2022. Firstly a target for Scope 3
Category 15 Financed emissions and secondly a target
for Operational emissions covering Scope 1, 2 and
other material scope 3 categories. These targets show
commitment to business ambition for 1.5°C. An interim
target for 2030 was set as well as a Net Zero target
for2050.
} For the first time, in 2021 the Group measured its Scope
3 financed emissions. The Partnership for Carbon
Accounting Financials methodology was used to ensure
this measurement is robust. As a material source of
emissions this is an important step forward and allows
subsequent analysis and modelling of actions to
address an area of significant risk and opportunity.
This ambitious strategy is wholly aligned with our
organizational values, in particular; Aim High and
Stewardship. The PCAF calculation covers the mortgage
portfolio as the largest asset class. It does not cover
non-modelled book or securitised loans.
} Historically, policy and subsequent improvement
programs focused on emissions associated with
buildings the Group operated from, and progress was
made from 2020 to 2021.
} Following the establishment of Science Based
Targets, and in line with SBTi and UN Finance
Initiatives guidance on target setting for banks,
the Group will now develop a clear and robust
transition and action plan to achieve the targets
set for Scope 1, 2 and 3 emissions to be verified by
SBTi which will result in greater understanding of
the effect on climate on the businesses financial
performance and financial position.
} The Group will consider opportunities such as
green funding, green savings, securitisation,
climate risk underwriting criteria and ESG
awareness campaigns to pursue the most
impactful opportunities and support customers in
their transition.
} The Group acknowledges that whilst there are
actions that can be taken directly to address
emissions, a more systemic shift is required
across the financial services sector and the
real economy to achieve the Net Zero target.
Therefore, the Group has committed to joining
sectoral initiatives such as the United Nations
Finance Initiative – Net Zero Banking Alliance to
go further, faster, through collaborative working.
None

90
OSB GROUP PLC Annual Report and Accounts 2021
Achievements in 2021 Opportunities and developments for 2022 Further details
Strategy
5. Resilience of Group’s strategy taking into
consideration climate-related scenario analysis:
} The Group’s ICAAP review in 2021 considered the
resilience of its strategy and loan book to climate
risks such as floods, coastal erosion, subsidence,
and minimum EPC ratings. The ICAAP saw minimal
impact from climate risk. Scenarios considered are:
RCP scenarios that consider an increase in global
temperatures by 2100, compared the least severe
scenario (RCP 2.6 – increase of 0.9°C to 2.3°C) to the
most severe (RCP 8.5 – increase of 3.2°C to 5.4°C.
} Despite the ICAAP noting limited impact on the
Group, there are plans to expand the number
of transitional climate risks considered in future
scenario analysis. The results of these may drive
changes to strategy which the Group will disclose
if material.
Task Force on Climate-Related Financial Disclosures (Continued)

EPC ratings of the Group's portfolio
C or better 35
%
D 48
%
E 15
%
F or G 2
%
91
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Insights from our scenario analysis:
key drivers
We are aware that our climate ambitions
can only be achieved through a thorough
understanding of our exposure to climate
risk. We focused out financial risk
assessments on our mortgage portfolio
in the UK as it comprises c. 94% of our
portfolio.
The key drivers that may affect the real
estate market are extreme weather events
such as floods, subsidence, and coastal
erosion – which may impact the value of
properties adversely as well the ability
of our clients to afford their mortgages.
From a regulatory policy perspective,
changes to minimum energy efficiency
performance standards could also have
a similar impact to physical risks in terms
of our customers’ ability to repay their
mortgages as well as the impact on their
properties. The short- and medium-term
risks faced by the Group are similar, in
that the physical risks are related to the
increased risk of flooding, subsidence and
coastal erosion, whereas the transitional
risk is associated with the ability of the
Group and our customers to adapt to a
changing regulatory environment.
In the long term, with climate change
continuing on an unchanged trajectory,
mortgages in vulnerable geographic
regions (i.e. those prone to flooding,
coastal erosion, subsidence and
other climate related issues) could be
impactedseverely.
Insights from our scenario analysis:
Impact on the Group
Physical risk
The physical impacts from climate risk to
our real estate portfolio across the UK are
expected to be limited.
Sensitivity analysis completed using
the RCP scenarios on increase in global
temperatures by 2100, compared the
least severe scenario (RCP 2.6 – increase
of 0.9ºC to 2.3ºC) to the most severe (RCP
8.5 – increase of 3.2ºC to 5.4ºC).
For the Group, the analysis shows that
the exposure to the probability of flood
over the next decade increases by 0.02%
from the best-case scenario to the worst
case scenario – this is reflected in the fact
that only 0.15% of the Group’s portfolio is
in an area with a flood risk greater than
20%. For subsidence, the increase from
best-case to worst-case increase is at a
similar level to flood risk of 0.02%, with
portfolio risk of subsidence being less
than 0.5%. For coastal erosion, over 93%
of the portfolio is more than 1000 metres
from the coastline. Of the properties
within 1000 metres of the coast line, 27
are located in areas likely to experience
coastal erosion.
Transitional risk
The EPC distribution of the Group’s
portfolio and potential change in
government policy have the potential to
result in larger impacts.
The Group has 35% of properties with an
EPC of C or better, 48% EPC of D, 15%
EPC of E and 2 % EPC of F or G. Of the
properties with an EPC of D or worse, 90%
have a potential of at least EPC C.

92
OSB GROUP PLC Annual Report and Accounts 2021
Achievements in 2021 Opportunities and developments for 2022 Further details
Risk Management
6. Processes for identifying and assessing climate-
related risks:
} Scenario analysis is used as an important tool to
understand and inform the potential impact of climate
change on the Group’s operations in the UK. It consisted
of climate change portfolio analysis (covering both
physical and transitional risk), which also considered an
assessment of EPC ratings in the UK.
} Climate-related horizon-scanning is in place to monitor
regulatory or legislative changes which could impact
the Group which feeds into the assessment of transition
risks.
} A climate risk MI dashboard was developed detailing
key physical and transitional risk exposures which
is presented on an annual basis. It is envisioned that
this dashboard will form the basis of the setting of a
strategy and risk appetite, more information can be
found in the Risk Management opportunities section.
} The Group uses its membership of UK Finance to assess
industry-related trends and developments that feed into
its risk management identification processes.
} The Group plans to enhance its engagement with
stakeholders to determine how customers are
being supported to reduce their carbon footprint.
} The climate risk MI dashboard will be enhanced
for 2022 based on trend analysis found from
scenario analysis and further consideration to the
frequency of data delivery to management. It will
also form the basis of how the Group embarks on
setting and monitoring its climate risk strategy
and appetite.
} The Group will also assess its position on the
classification of climate risk as a principal risk
into 2022.
} Climate risk will be embedded into the risk
control self-assessment (RCSA) process across
the Group which will enable the identification of
climate-related risk in a proactive manner as well
as embedding the right climate risk conscious-
behaviours across the Group.
} It also envisioned that Board training will assist
with the identification of climate related risks in
2022.
See the Risk
review for our
approach to
managing
climate change
risk.
7. Processes for managing climate-related risks:
} Business continuity and disaster recovery plans were
updated to reflect risks from extreme weather and have
appropriate plans to mitigate the associated risks in
place.
} On an annual basis, the Group conducts a complete
review of its loan book from a climate related
perspective. This enables the Group to determine the
materiality of any climate-related risks.
} See Strategy section for further detail on climate risk
and enterprise risk classification.
} A clear goal is to create a threat and peril
hierarchy matrix that articulates clear
management actions that address each risk in
a proportionate manner. The matrix will include
detailed escalation and decision pathways.
} Redefining the Environmental Working Group
terms of reference to reflect the broader remit of
the Net Zero Plan.
See the Risk
review.
8. Integrating climate-related risk processes into
overall risk management:
} Climate risk was integrated into the Group-wide
Strategic Risk Management Framework (SRMF) as well
as through the Climate Risk Management Framework,
a sub-framework of the SRMF specifically designed to
manage and monitor climate-related risk.
} The Group incorporated climate risk into its three
lines of defence risk management model, with the
recognition of climate risk as an enterprise risk.
} Plans are in place to conduct an on-boarding
review of all new business at origination from
a climate risk perspective. This enhanced due
diligence will take into consideration both
transitional and physical risk.
} A climate (and wider ESG) training plan will be
created to ensure that all relevant employees
receive appropriate training.
See the Risk
review.
Task Force on Climate-Related Financial Disclosures (Continued)

93
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Achievements in 2021 Opportunities and developments for 2022 Further details
Metrics and targets
9. Metrics used to assess climate-related risks and
opportunities:
} The Group looks at a variety of metrics to assess
climate-related risks and opportunities, these include
but are not limited to:
– Portfolio EPC distribution at level of F and G
– Properties within 100m of coastline should maximum
emission scenario be realised. I.e. no climate action
is taken and a worst case scenario prevails
– Properties not eligible for Flood Re insurance
– Properties exposed to flood alert zones
– Properties with a 1% exposure to subsidence risk in a
10-year term in the maximum emission scenario
– Scope 3 financed emissions tCO
2
e/m
2
using PACF
methodology
– Scope 1, 2 and 3 (business travel only) emissions
tCO
2
e/FTE using GHG Protocol Corporate Standard
} Please see the Governance section on our planned
approach to the usage of metrics for Executive
remuneration.
} Further metrics and targets to be defined as the
Group continues its ESG journey.
} Further Scope 3 emissions sources in line with the
GHG Protocol Corporate Standard.
} Trend analysis and metrics from opportunities are
to be presented in subsequent disclosures.
} EPC data will be a key to the understanding of
driver of business strategy and for part of our
approach to Net Zero risks and opportunities into
2022.
See the
Environment
section on
page 78
for more
information on
future metrics
and targets.
10. Scope 1, 2 and 3 Greenhouse Gas (GHG) emissions
and the related risks:
} Scopes 1, 2 and 3 emissions have been disclosed (where
available for Scope 3)
} Intensity ratios have been established and reported on
} Scope 1, 2 and scope 3 (business travel only) tonnes of
carbon equivalent (tCO
2
e) per full time equivalent
} Scope 3 – financed emissions only – tCO
2
e per m
2
} Comparative figures have been disclosed for 2019
onwards
} An assessment of the risks associated with
the Group’s Scope 1, 2 and 3 emissions will be
conducted and disclosed for 2022. Validation of
this is planned for 2022.
See page 80
for the GHG
emissions
intensity ratios.
11. Targets used to manage climate-related risks and
opportunities:
} The Group is actively working towards creating
qualitative and quantitative targets. The principles
guiding the targets to manage were presented and
approved by the relevant Management Committee.
} Utilise the UN – Finance Initiative “Guidelines for
target setting” to begin developing targets and
timeframes for delivery.
} Further targets are to be developed in 2022 to
manage the following three key ambitions:
– Becoming a Net Zero Bank
– Effectively managing our exposure to climate
risk
– Supporting our customers
These ambitions form part of the Group’s overall
approach to its Values and Purpose and the Group
is actively working on a transition plan towards
achieving Net Zero.
None

94
OSB GROUP PLC Annual Report and Accounts 2021
OSB GROUP PLC Annual Report and Accounts 2021
Customers
OSB Group encourages a culture that
aims to:
} Communicate and work with each
customer on an individual basis.
} Act with consistency across all
channels.
} Promote a confident, open and
trustworthy workforce.
} Offer simplicity and ease of business.
} Offer long-term value for money.
Offer transparent products without the
use of short-term bonus rates and to offer
existing customers the benefit of loyalty
rates.
Our customers are part of our success
and we aim to become a financial services
provider of choice. To support this, we use
an established governance framework
for consistent best practice across the
business and ensure that we have robust
policies and procedures to minimise the
risk of failure to deliver the service our
savers and our borrowers have come to
expect.
The main policies which govern how we
transact with customers are discussed
below and apply at a Group level.
} Lending Policy – ensures that the
Group lends money responsibly and
within the Group’s lending criteria
and risk appetite. The Lending Policy
is approved annually and rolled out
to all relevant operational employees
to use within their day-to-day roles.
The Lending Policy goes through
two quality assurance processes
with both the Operations and the
Credit team, with results presented
to the Group Risk Committee each
year. The performance of our lending
and potential risks and changes are
discussed, challenged and approved
at the Group Credit Committee and
Group Risk Committee.
} Customer Vulnerability Policy – sets
out the standards and approach for
the identification and treatment of
vulnerable customers and provides
guidance to all parts of the Group
to ensure vulnerable customers
consistently receive fair outcomes.
It ensures that employees are
appropriately trained to identify
vulnerability and potential suicide
risks in our customers and put in
place appropriate actions to deal
with such issues as effectively as
possible. The Vulnerable Customer
Review Committee seeks to continually
improve standards and ensures that
policy and outcomes are reported
to the Group Risk Committee
and ultimately the Board. The
Group is committed to delivering
fair and suitable outcomes to all
customers based on their individual
circumstances.
} Arrears Management and Forbearance
Policy – ensures that handling of
arrears and repossessions delivers
fair and suitable outcomes tailored
to the circumstances of the individual
customer. The policy is focused on
seeking to work proactively with
customers to prevent them falling into
arrears or to cure the arrears position
to deliver an appropriate outcome. The
Group Risk Committee is responsible
for reviewing risk issues and reporting
regularly to the Board, which retains
responsibility for understanding
and controlling the degree of risk
undertaken.
Social responsibility

95
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Employees are required to complete a
range of mandatory training modules
throughout the year. In 2021, such
modules were completed by 99.6% of all
employees within the Group.
There are also policies that apply to
the business as a whole and govern our
operations, including:
} Data Protection and Retention policies
to ensure that the Group protects
its customer data and manages and
retains it fairly and appropriately.
} Conduct Risk Framework, including
treating customers fairly toensure
that the Group conducts its business
fairly and without causing customer
detriment.
} Conflicts of Interest Policy to ensure
that the Group can identify and, if
possible, avoid conflicts, and where
this is not possible, to manage
conflicts fairly.
Customer engagement
We take a personal approach to our
customers, treating each customer as an
individual and listening to their needs.
Many of our customers are also members
of the Kent Reliance Provident Society
(KRPS or the Society), the Society formed
from the membership of the former Kent
Reliance Building Society. OSB and the
Society have benefitted from member
engagement through the online ‘portal’
launched late in 2015, enabling input
from a geographically broader range of
members. During 2021, two major studies
were undertaken, assisting the Bank to
understand opinions of savers.
Customer complaints
Whilst we concentrate on providing an
excellent service, when things go wrong,
we aim to put them right and learn from
any mistakes made.
} Complaints Handling Policy –
ensures that the Group responds
to complaints swiftly, fairly and
consistently and that customers’
concerns are taken seriously. We
investigate complaints competently,
diligently and impartially, supported
by appropriately trained employees.
Through the Operations Committee,
management information on
complaints is collected and reported
on a regular basis to the Board
and other relevant Committees (as
appropriate) for them to consider if
additional actions are required. Root
cause analysis is used to identify and
solve underlying issues rather than
apply quick fixes.
Employees
The skills, expertise and commitment
of our colleagues have always been
fundamental to the achievement of our
strategic goals.
Despite the pandemic-related challenges,
throughout 2021, we continued to invest
in training, development and employee
engagement activities in order to ensure
that the Group provides a compelling
and attractive employee proposition
both for our existing employees and for
candidates considering joining the Group.
Inevitably, a large proportion of employee
communications during 2021 continued
to relate to the pandemic, including
guidance to ensure the safety of those
employees who, due to the nature of
their roles, were required to work from
our office and branch locations. In
addition, regular guidance and support
was provided for employees who
were required to work from home for
considerable periods of the year.
When office working restrictions relaxed,
a significant project was progressed
developing and implementing the
Group’s approach to hybrid working. This
approach provides ongoing flexibility
for the vast majority of employees and
allows them to split their working week
between their office and home, reflecting
broader global trends. The ability to fully
embed our hybrid working approach was
somewhat curtailed by the government’s
work from home guidance being
reintroduced in late 2021; however, it will
remain a key area of focus in the future.
The pandemic-related office working
and travel restrictions inevitably caused
challenges for managers in developing
face to face relationships with new
employees. Whilst this was a challenge
that all employers faced, it was magnified
throughout the Group as a significant
number of managers have had teams
spread across different geographical
locations as a result of the Combination
with CCFS and the related restructuring
activities associated with the progression
of Target Operating Models.
Recruitment
The Group’s Talent Acquisition team
ensures that across all locations, an
internal recruitment specialist partners
with each hiring manager, in order to
provide them with bespoke support in
attracting high quality candidates for
vacant positions and, through robust
interview and selection processes, assist
them in making strong recruitment
decisions.

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OSB GROUP PLC Annual Report and Accounts 2021
Social responsibility (Continued)
The Group’s recruitment demands
increased significantly during 2021 as a
result of; (i) significant numbers of newly-
created roles arising from departmental
Target Operating Model restructuring;
(ii) generic organisational growth; (iii)
activating historic vacancies which were
placed on hold in 2020 as a result of the
pandemic; and (iv) an increased level of
regretted attrition.
During the year, the Talent Acquisition
team filled 387 UK vacancies and 239
in OSB India, significantly exceeding
the number of vacancies filled in 2020
(approximately 170 in the UK and 110 in
OSB India).
A key focus for our Talent Acquisition
team was again placed on proactively
identifying potential candidates directly
and through improved use of our website
and external job boards. In 2021, they
filled almost 30% of UK vacancies on a
direct recruitment basis, resulting in a
saving in excess of £800,000 on agency
recruitment fees. Within OSB India,
around half of all the vacancies which
closed in 2021 were as a result of direct
recruitment activity.
Our recruitment procedures are fair and
inclusive, with shortlisting, interviewing
and selection always carried out without
regard to gender, gender reassignment,
sexual orientation, marital or civil
partnership status, colour, race, caste,
nationality, ethnic or national origin,
religion or belief, age, pregnancy
or maternity leave or trade union
membership. In addition, Executive sign
off is required for senior vacancies where
it has not been possible to identify or
progress a female candidate through to
the interview process. A similar process is
followed where there no male candidates
are identified for junior vacancies.
In 2021, The Group welcomed almost 200
new UK employees (compared with just
under 130 in 2020) with a similar number
joining OSB India (90 in 2020). Our
Group-wide employee base at the end of
2021 totalled 1,782, which is similar to the
1,786 reported as the end of 2020.
Training and Development
The People Development team, based
in both the UK and India, concentrate
on providing learning and development
opportunities for all employees, using a
mix of internal and externally-sourced
content, which are delivered through a
range of media, including workshop and
digital formats.
Despite the challenges associated with
restrictions requiring remote rather
than face to face activities, the People
Development team continued to provide
a wide range of workshops, with these
relating to a broad spectrum of skills and
behaviours; three separate management
development programmes to suit varying
levels of leadership experience; and
regulatory training along with business
change content to support operational
and other training needs.
Throughout 2021, around 950 separate
internal workshops were delivered by
the People Development team and the
recorded number of training hours for
delegates attending these workshops
averaged over 2,300 hours per month,
exceeding what was achieved prior
to the pandemic. In addition, People
Development facilitated the attendance
of over 100 employees at other learning
events, which were either delivered
externally or delivered internally by
external training providers.
Vacancies filled by the Talent
Acquisition team
387
Throughout 2021, a high level of focus
was applied to the Group’s Fit to
Practice Scheme, which requires Line
Managers to play a proactive role in
identifying development needs, providing
developmental feedback and establishing
appropriate activities to continually
progress the competence levels of their
direct reports. With Line Managers
being required to record three separate
activities within each three month rolling
period (a 1:1 discussion, a performance
observation and a quality assessment),
with the average activity completion
rate throughout 2021 for over 1,000
employees in-scope for the Fit to Practice
Scheme (UK and India) being just under
90%. Significant work was progressed
in expanding the scheme to CCFS
employees, with over 150 individuals
already included as part of a pilot.

97
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Group-wide, monthly mandatory
regulatory training requirements were
completed throughout 2021 and less than
0.5% of employees were more than one
month late in completing their training,
demonstrating the importance we place
on ensuring that our employees are
suitably aware of key requirements.
The Group is also committed to
supporting employees undertaking
professional development; in 2021, 118 UK
employees received financial support to
pursue their professional qualifications.
Retention and Progression
The Group has a genuine desire to retain,
support and develop its employees. During
2021, almost 140 UK employees were
formally promoted to a more senior grade
along with 36 employees at OSB India.
We advertise vacancies internally in
order to provide career development
opportunities for existing employees and
in 2021, around 35% of UK vacancies were
filled by way of internal appointments
with 10% of vacancies at OSB India filled
by existing employees.
As a result of the pandemic significantly
reducing external recruitment
opportunities, our Group-wide regretted
attrition figures for 2020 were artificially
low at just under 7% (UK) and just over 11%
(India). Retention has been a challenge
throughout the banking sector during
2021, as record numbers of vacancies
were advertised with an unprecedented
number of individuals resigning in order to
join new employers in the market.
The decision by certain employers to offer
full remote working created additional
external opportunity by removing the
requirement to live within commuting
distance to an office location. The
Group’s approach centred around a core
principle of being a primarily office-based
employer; however, our hybrid working
was implemented, providing the vast
majority of UK employees the flexibility
to split their working time between their
office location and home.
The Group’s 2021 UK regretted attrition
rates increased to almost 14%, with the
rate for OSB India increasing to just
under 17% (this compared favourably with
average rates within their local market).
In terms of non-regretted attrition,
the majority of planned restructuring
activities designed to achieve the Target
Operating Models established as a
result of the Combination with CCFS
were completed in 2020. With less
restructuring activities taking place in
2021, the UK non-regretted attrition rate
fell significantly from 11% in 2020 to just
over 7% in 2021. Within OSB India, the
non-regretted attrition rate was again
very low at 5% and similar to the rate seen
in 2020.
2021 saw a continued focus on
leadership development with our
People Development team delivering
three separate programmes, each of
which are bespoke to different levels of
existing leadership and management
experience. Throughout the year, we saw
31 employees join our Future Supervisors
and Managers Programme, 58 current
managers commence the Essential
Managers Programme; and among our
more senior managers, 16 individuals
joined our Stellar Leadership Programme.
A comprehensive approach to succession
planning was undertaken during 2021
to ensure that a proactive focus was
applied to identifying individuals who,
over a period of up to five years, had the
potential to step up into roles at Group
Executive Committee level or the senior
management positions which report
directly into an Executive role. In addition,
gaps were identified and mitigating
actions put in place, should the current
incumbent vacate their existing role.
The Group engaged with an external
specialist to provide our most senior
management beneath the Group
Executive Committee with the
opportunity to aid their ongoing career
progression. In late 2021, we saw 23
individuals embark on a robust process
of establishing their core development
needs by undertaking psychometric
and business reasoning assessments
and an intensive competency based
interview. These formed a bespoke and
independent report from the external
specialist specifying the individual’s key
developmental themes to be discussed
with their Executive Line Manager and
agree related development activities to be
progressed.
Remuneration and Benefits
The Group believes in rewarding our
employees fairly and transparently,
enabling them to share in the success
of the business. Details of the Group’s
remuneration policies can be found in the
Remuneration Report on pages 147 to 153.
One of our key area of focus during 2021
related to embedding the new Group
grading structure and a wide range of
newly-harmonised approaches in order to
ensure that, from a reward and employee
benefits perspective, all UK employees
had the same offerings.
All related activities were progressed as
scheduled, with single external benefit
providers established to replace the
multiple providers that were in place prior
to the Combination. Where non-core
benefits were previously only available
to one of the legacy entities, these were
expanded to all UK employees in 2021,
providing a robust and compelling
benefits proposition for all.
In addition to embedding harmonised
generic terms and conditions of
employment, the methodologies for
determining annual pay increases and
discretionary bonus awards were also
harmonised. In terms of new employee
benefits, we launched our Technology
Purchase Scheme and in late November
2021 our Electric Vehicle Lease Scheme,
which supports our ESG agenda and saw 10
orders placed for new vehicles by year end.
Employee promotions across UK and
India
176

98
OSB GROUP PLC Annual Report and Accounts 2021
Social responsibility (Continued)
Our culture
By that we mean more than just helping
them to be more financially well off. We
want them to flourish, thrive and succeed
in their personal and professional goals.
By working Stronger together, Taking
ownership, Aiming high and Respecting
others, we will more powerfully
achieve our own goals, as well as our
stakeholders’.
But we are not just focused on lending
and savings (though that is what we
do and what we are great at); we are
a business that cares about leaving
things better than we found them. We
are passionate about our final value,
Stewardship, which encourages
us to give back to our communities,
supporting those who are vulnerable
or less fortunate, embracing diversity
and finding new ways to protect our
environment.
Together we can all prosper
At OSB Group we are working hard to create
a positive, collaborative, safe and supportive
environment for our people to prosper in.
Our Purpose
To help our
customers,
colleagues and
communities to
prosper.
Our Vision
To be recognised as the UK’s number one
choice of specialist bank, through our
commitment to exceptional service, strong
relationships and competitive propositions.
It does not matter where we are working
from; a branch, on the road, in the office
or from home. It does not even matter that
we are not all in the same country, we are
clear about what we want to achieve. We
know how we want to achieve it and we
are absolutely determined to build upon
the foundations we have created so our
customers, shareholders, communities
and our people can all prosper.

99
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
By working Stronger together,
Taking ownership, Aiming high and
Respecting others, we will more
powerfully achieve our own goals.
Our values
Stronger together
We collaborate to create a culture in
which we all share goals and values. We
aim to build trust, respect and openness
across the Group.
Respect others
We treat all others fairly and
communicate in a way that respects an
inclusive and diverse culture, listening
to all voices and ensuring opinions are
offered and heard.
Take ownership
We take ownership of what needs to
be done as well as our personal and
professional development, helping
to achieve the collective goals of the
business.
Stewardship
We act with conscience and take social,
environmental and ethical factors into
consideration when making decisions.
Aim high
We set the bar high for ourselves and our
customers. They are the ones who know
when we are going above and beyond
and remember the promises we keep.

100
OSB GROUP PLC Annual Report and Accounts 2021
Social responsibility (Continued)
Our harmonised approach to benefits
also provided employees with an element
of choice, enabling them to determine
their preference for a higher employee
pension contribution and a slightly
lower discretionary bonus opportunity
or vice versa. In addition, employees
had an opportunity to select from two
separate health and insurance packages,
depending on desired level of cover for
life insurance, income protection, private
medical insurance and a medical cash
plan. Our second annual benefit choices
window opened in November 2021 and
saw 65 employees elect to change from
one or both of their existing packages,
with new selections becoming effective
from 1 January 2022.
We also encouraged our employees to
hold shares in the Group for the long
term, via our Sharesave Scheme, which is
offered annually to all UK employees. The
Sharesave Scheme allows employees to
save a fixed amount of between £5 and
£500 per month over a three year period
in order to use these savings at the end of
the qualifying period to buy shares at a
fixed option price. 300 employees joined
the 2021 Sharesave scheme and, taking
into account the schemes launched in
previous years, nearly 700 (around 58%)
UK employees were Sharesave Scheme
members as at the end of 2021.
Redundancy and Redeployment
Our Group Redundancy and
Redeployment Policy is designed to
ensure that, ahead of any potential
redundancy situation, we take all
reasonable steps to identify feasible
alternatives that meet the needs of the
business. Should redundancy situations
become unavoidable, the Group ensures
that employees are appropriately
informed and consulted, that internal
redeployment opportunities are explored
and that outplacement support is made
available to assist them in obtaining
employment externally.
The Board has further safeguarded the
existing contractual and statutory rights
of the Group’s employees for a period
following the Combination by way of
enhanced redundancy payments.
The Group concluded all significant
restructuring activities to achieve the
desired Target Operating Models in 2021.
Whilst these restructures led to around 40
UK employees leaving the Group by way
of redundancy, our proactive efforts in
identifying redeployment opportunities
saw around 20 other employees secure
internal redeployment into alternative
positions.
Employee Engagement and Culture
The 2022 Best Companies to Work For
survey was undertaken in December
2021 and saw an impressive 77% of UK
employees submit responses. Given the
challenges posed by the pandemic as well
as the restructuring and harmonisation
activities relating to the Combination,
the survey results were 1.4% lower than
in the previous year. The Group retained
an overall ‘One Star’ rating, with Best
Companies defining this as a very good
level of employee engagement.
The Group also participated in the 2021
Financial Service Culture Board (FSCB)
survey for the fifth time, with the aim of
influencing positive change throughout
the banking sector and providing
insight into employees’ perceptions of
the application of the Group’s values,
potential barriers to challenge and to
voice any observations of unethical or
inappropriate behaviour.
Aligned to the engagement challenges
detailed above, the Group’s baseline
FSCB survey score reduced by 2.75% in
comparison to the previous year.

101
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
When considering the results of both of
these surveys, it was recognised that the
degree of harmonisation and integration-
related change was more profound on our
Wolverhampton employees. There will be
enhanced engagement to address these
concerns.
OSB India participates in a separate
employee engagement survey, run by the
Great Place to Work Institute, and was
officially certified as a ‘Great Place to
Work’ for the fifth year, with strong results
in all five survey categories (credibility of
management, respect for people, fairness
at the workplace, pride and camaraderie
between people). The 2021 baseline
saw an increase of 4% on the previous
year, reflecting the strong brand and
culture that exists throughout the team in
Bangalore.
The new Group values (Stronger Together,
Take Ownership, Aim High, Respect and
Stewardship) were launched in early 2021
along with a new Purpose, Vision and
Values, with the intention that over time,
they will drive true cultural harmonisation
irrespective of workplace location.
Whilst four of the five new values linked
closely to those previously in place,
our new Stewardship value provides
an opportunity for additional focus on
behaviours that relate to the Group’s
responsibilities from an environmental,
social and governance perspective.
Throughout the Group, the values and the
related behavioural expectations provide
an opportunity for Line Managers to
assess and provide behavioural feedback
within appraisal processes and consider
related learning development activities.
The values are also aligned to established
award programmes and a range of
ongoing communications.
The Group’s Workforce Advisory Forum
(OneVoice) met regularly throughout
2021, including employee representatives
from all core geographical locations,
including OSB India. The aim of the
forum is to further enhance the level of
engagement that the Group Executive
Committee and the Board have with
the wider workforce. To achieve this, in
addition to employee representatives,
the forum is attended by rotating Non-
Executive Directors and Group Executive
Committee members to ensure that they
can hear directly from the employees and
share feedback (positive or negative) on
important matters.
The Group operates a Whistleblowing
Policy, championed by the Chair
of the Group Audit Committee. We
encourage employees to feel confident
in raising serious concerns at the
earliest opportunity and we provide
multiple channels to do so confidentially,
protected from possible reprisals. Regular
reports were provided to the Group Audit
Committee, including an annual report,
which was also presented to the Board.
Employee Recognition and Awards
In 2021, the Group recognised the
significant tenure of almost 150 UK
employees who reached a 5, 10, or 15
year milestone of employment via our
Long Service Award programme. There
were two employees who reached 20
years’ service and our longest-serving
employee has now been with the Group
for over 34 years.
In addition to harmonising Long Service
Awards, the Group expanded the
provision of a week of additional annual
leave for all employees reaching a 10 year
service milestone, a benefit previously
available only to Wolverhampton
employees.
Each quarter, all employees within the
Group, are invited to nominate their
colleagues as part of our Galaxy Award
Scheme. Nominations are sought for five
separate categories, linking directly to
each of our Values with individual winners
and runners-up for each category
determined by a detailed process.
Throughout 2021, nearly 500 nominations
were submitted and the details of all
nominees were published on the Group’s
intranet along with details of the quarterly
award winners and their nomination
rationale.
Additionally, the Group’s ‘Thank You’
facility provided an opportunity for
employees to publicly recognise the
contributions of their colleagues and
during 2021, there were over 1,500 thank
you messages posted on the intranet.
Diversity and Inclusion
We recognise the benefits that diversity
brings to the business and we actively
promote and encourage a culture and
environment that values and celebrates
our differences. In 2021, we continued
our journey to become a truly diverse and
inclusive organisation which is committed
to providing equal opportunities through
the recruitment, training and development
of our employees.
The commitment to actively promote an
environment where disabled candidates
and employees are welcomed remained
an area of focus. In line with our Disability
Confident Employer (Level Two) status,
we are proud that the Group offers
employment to employees who are
registered as disabled.
2021 saw a continued focus on supporting
mental health and well-being via the
provision of related workshops which were
delivered on a remote basis, including
specific guidance, support and training
relating to the pandemic.
The Group published its 2021 Gender Pay
Gap Report in line with legislation that
applies to all UK companies with more
than 250 employees. The full publication
is available on the Group’s website (www.
osb.co.uk) and shows that OSB’s median
gender pay gap as at the snapshot date
of 5 April 2021 was 32.0%, reducing from
the 2020 reported figure of 36.4%. The
CCFS median gender pay gap at the
same snapshot date was significantly
lower at 19.8%; however, it increased
from 14.4% reported in the previous year.
Across both OSB and CCFS, the bonus
pay gaps reduced significantly and the
percentage of females awarded a bonus
was slightly higher than male employees.
Whilst it is pleasing to see continued
progress across the Group, we are
committed to reducing these gaps
further. Fundamentally, for both OSB and
CCFS, the gaps relate to the structure
of our workforce and reflect the fact
that we have more men than women in
senior roles and more female employees
undertaking clerical roles. Progress has
been made to positively impact both
aspects of our workforce structure and
we remain confident that our gaps will
continue to close.
OSB median gender pay gap as at
5 April 2021
32.0%
5 April 2020: 36.4%
CCFS median gender pay gap as at
5 April 2021
19.8%
5 April 2020: 14.4%

102
OSB GROUP PLC Annual Report and Accounts 2021
Social responsibility (Continued)
We recognise that we need to focus on
improving our gender balance and we
made solid progress towards the most
recent commitment that the Group made
as a signatory of HM Treasury’s Women in
Finance Charter that by the end of 2023,
33% of senior management positions
within the UK would be undertaken by
female employees. Having ended 2020
at 29.8%, there was positive progress
in 2021, ending the year at 32% and
bringing us closer to our goal.
Our Group-wide Diversity and Inclusion
(D&I) Working Group ensures an
employee led focus on a wide range of
D&I matters, with their core purpose being
to raise awareness and tackle issues of
inclusion so that every single employee is
included and treated equally and fairly
and, that we celebrate our differences –
whatever they may be.
A range of activities were undertaken last
year which from a gender perspective
included celebrating International
Women’s Day, a facilitated Q&A with
female members of our Board and Group
Executive Committee, the launch of
menopause training and the sharing of
personal stories from colleagues which
addressed some difficult topics around
post-natal depression and being childfree
or childless.
In terms of broader diversity and inclusion
topics, the Group celebrated International
Men’s Day, Black History Month and
Disability Awareness Week which helped
our colleagues understand how to better
support colleagues and customers with
hearing impairments. Mental Health was
an ongoing subject of focus throughout
the year, with colleagues sharing
their personal experiences of related
challenges.
In July, the Group published its
Transgender Equality Commitment. As
a part of PRIDE month and National
Inclusion Week in September, there were a
range of activities including an employee
Forum with members of our Board and
Group Executive Committee sharing
experiences from their respective diverse
backgrounds.
The Group is also a member of the
Employers Network for Equality &
Inclusion (ENEI), the UK’s leading
employer network, covering all aspects
of equality and inclusion issues in the
workplace. We were delighted that ENEI
completed a Talent, Inclusion & Diversity
Evaluation (TIDE), measuring the Group
across eight different areas of diversity
and inclusion which resulted in a silver
standard TIDE mark award.
In the year, work was undertaken
to obtain a more comprehensive
overview of ethnicity throughout the
Group which will aid our efforts in
increasing the percentage of ethnically
diverse employees undertaking senior
management positions.
Over 10% of our UK employees work under
a formal flexible working arrangement
relating to part time hours and over 30
additional employees compress their full
time working hours into less than five
days a week.
At the end of 2021, around 57% of our UK
workforce was female and at OSB India,
females constituted 41% of all employees;
18% of our Group Executive Committee
were female as was 50% of the OSB
Group Board.
Male Female
Number of Board
Directors (OSB
Group) 4 4
Number of Directors
ofsubsidiaries 16 4
Number of senior
managers (not
Directors)
1
104 51
All other employees
1
737 876
1. Includes OSB, OSB India and CCFS. Senior
managers are employees within the Grade A to E
population.

103
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
OSB India
OSB India, a wholly-owned subsidiary of
the Group, is based in Bangalore and as
at the end of 2021 had 571 employees.
OSB India supports the Group across
various functions including Support
Services, Operations, IT, Finance and
Human Resources. OSB India is a
holder of ISO 27001: 2013 certification,
demonstrating high standards of
information security.
OSB India’s business continuity site
in Hyderabad was converted to a
fully-fledged operational site in late
2021 in order to accommodate both
organisational growth and further
enhance operational resilience. By the
end of the year, around 61 employees
from a range of functions were operating
permanently from the Hyderabad office,
with this number expected to increase
significantly during 2022.
In compliance with the Modern Slavery
Act, OSB India does not support excessive
overtime and all employees in India are
encouraged to work in accordance with
local legislation. Employees are based in
our modern Bangalore and Hyderabad
offices and are provided with a range of
benefits which include 22 days of annual
leave, 12 days’ sick leave and cafeteria
services.
Human rights
We want each employee and all
stakeholders to be treated with fairness,
dignity and respect.
The Group endorses the UN Declaration
of Human Rights and supports the UN
Guiding Principles of Business and
Human Rights. The Group adheres to
the International Labour Organisation
Fundamental Conventions and does not
tolerate child labour or forced labour.
The Group also respects freedom of
association and the rights of employees
to be represented by trade unions or
works councils. The Group does not
discriminate on the basis of any of the
protected characteristics within the
Equality Act 2010 and fosters a culture
of inclusiveness, demonstrated by the
internal publication of a Transgender
Commitment Statement, with a
Menopause Support Statement due to
be published shortly. Our Diversity and
Inclusion Policy applies throughout the
Group and an overview is communicated
to our employees during induction
training.
The Group’s fifth annual statement in
accordance with the Modern Slavery Act
2015 was published on our website in
June 2021. In the year, no instances of
modern slavery were reported and the
Group adopts a pervasive approach to its
internal policies which aim to ensure that
we establish good employment practices,
act ethically and with integrity, including
the provision of relevant mandatory
training. The Group continued to actively
engage with its existing and new suppliers
and enhanced the ability to classify third
party services based upon the level of
risk ensuring the inclusion of contractual
mechanisms, where appropriate, in
respect of modern slavery. The Group
updated and published its Vendor Code
of Conduct and Ethics to document its
expectation of suppliers in compliance
with modern slavery regulations and
other ethical considerations including
Diversity and Inclusion and environmental
concerns. We were also cognisant of
the risks of modern slavery due to the
pandemic.
The Group has an Anti-bribery and
Corruption Policy, which is reviewed
annually and approved by the Group
Audit Committee. The Group will not
accept or condone any behaviour
connected with accepting, requesting or
offering any bribe or inducement in return
for providing a favour.
The Group is not itself considered to
be at a high risk of bribery; all business
is conducted in the UK and the only
significant outsourcing arrangement
is with a wholly-owned subsidiary of a
UK building society in relation to CCFS’
deposit-taking business.
In relation to the procurement of
goods and services, the anti-bribery
and corruption policies operated in
conjunction with a number of other Group
policies which were incorporated into
the Conflicts of Interest Policy, Modern
Slavery Act Statement, and Vendor
Management and Outsourcing Policy.
If an employee suspects that any of these
policies are not being followed, they are
required to immediately report this in
accordance with the Group’s Internal
Fraud Policy and Response Plan or the
financial crime reporting procedure, as
appropriate. The Group’s Whistleblowing
Policy and process are also available as
an alternative reporting channel, if for
whatever reason, it was felt that the other
procedures described above were not
appropriate.

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OSB GROUP PLC Annual Report and Accounts 2021
Social responsibility (Continued)
Communities
We care strongly about giving something
back to our communities and helping
them prosper.
We are proud that to embrace our
Stewardship Value by actively supporting
our charity partners and local good
causes through fundraisers, fund-
matching and volunteering.
How we gave back to our communities
The total amount that the Group and our
colleagues donated to charity in 2021
was £394,848, through Group donations,
employee fundraising, fund-matching,
good causes fund applications and
Pennies from Heaven.
Once restrictions in the UK lifted,
teams were encouraged to use their
volunteering day to make a difference
and reconnect with their team and plan
a charity activities together. In 2021, 72
volunteering days were logged across
theGroup.
As well as monetary donations, teams
across the UK also organised gifts and
support packages to our charity partners
and other good causes, including bedding
to Haven Refuge, gifts to Demelza
Hospice (jointly with XL@Football), treats
and goodies for the animals at Happy
Pants Ranch, gifts for children at Medway
Hospital, support care packages to
homeless charities local to our branches –
and many more!
Our charity partners
UK charity partner – Campaign Against
Living Miserably (CALM)
CALM was chosen as our first Group
charity partner. CALM raise awareness
of mental health issues to create social
change, encouraging people to talk about
mental health and to seek help when they
need it. They are also a leading movement
against suicide.
Maria Kuzak, Senior Philanthropy
Manager, CALM, said:
“Following the generous support of OSB
Group in 2021, we’d like to thank each
of you for your continued support. Your
donations have enabled us to have extra
people on the phones and live chat.
Demand for our services have increased
46% since the pandemic. In 2021, we
had over 157,000 conversations with
people who were struggling – that’s over
one million minutes. As a result of our
conversations, we directly prevented 367
suicides last year, and we simply couldn’t
have done this without your help – you’ve
literally saved lives.”
Local UK charity partners
} The Haven, Wolverhampton
The Haven Wolverhampton supports
women and dependent children who
are vulnerable to domestic violence,
homelessness and abuse, providing them
with practical and emotional support.
Jade Secker, Fundraising Manager,
TheHaven, said:
“We’re completely overwhelmed by the
support and donations we’ve received
from OSB Group throughout 2021. You’ve
not only made a difference in 2021, your
donations will continue to make a life
changing difference into 2022, as it will
enable us to keep vital services such as
our helpline and court support services
going. This is so important and it’s only
possible thanks to people like you all at
OSB Group and your ongoing care for
those at The Haven; thank you so much.”
} Fareham/Fleet: The Shooting Star
Hospice
The hospice supports families living in
London and Surrey who are dealing with
life-limiting conditions, providing care
for the families and offering a bespoke
service to suit their needs.
Anne Carey, Head of Corporate
Engagement, Shooting Star Hospice, said:
“We’re absolutely delighted that OSB
Group will continue to support us in
2022 as we’re thrilled with the support,
donations and volunteering that we’ve
received in 2021. The financial donations
have meant we can pay for additional
pre-bereavement support for a family,
provide essential guidance on pain
management, family and sibling support,
and anticipatory grief.
The generosity of organisations like OSB
Group allows us to provide vital support
for families with children with life-limiting
conditions, when they need us the most.”
} Kent: Demelza Hospice Care for
Children (supported by Kent Reliance
through our Children’s Savings
Accounts)
Demelza provides clinical care, therapies,
specialised activities and practical
support across Kent, South East London
and East Sussex.
Lavinia Jarrett, Acting Chief Executive,
Demelza Hospice Care for Children, said:
“Kent Reliance has supported Demelza
since we opened in 1998 and we’ve
enjoyed working together on a number
of fundraising activities. We’re always so
grateful for financial donations, which
have helped us to provide hundreds of
additional care hours, but we love how
many of you choose to give up your time
to volunteer with us too. We also really
welcome the additional partnership with
XL@Football Academy that together
with Kent Reliance will help support our
fundraising goals in 2022. So we’d like to
thank everyone who has contributed in
some way as it makes such a difference
to us.”
} Kent: The Happy Pants Ranch
The ranch is a safe haven for over 100
unwanted and abandoned animals, but
the Ranch rescued and re-homed well
over 200 animals.
Amey ***, Owner
“I can’t tell you what a huge help and
support you’ve been throughout our
partnership so far. Your donations have

105
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
helped us put up critical perimeter
fencing to help keep our animals safe,
and provided much needed additional
hay and food to support us through the
winter months. We’ve also enjoyed having
people come volunteer with us as the
animals love to make new friends. I’m so
pleased that we’ll be your local charity
partner into next year too, I hope that
means we’ll get to meet more of you for
some volunteering, or just because you’d
like to pop down to see the animals –
you’re all welcome.”
Our community partnership in action:
UK
Coventry Rugby Club
} Rugby and Reading – a 2018 study by
the National Literacy Trust found that
one in eight disadvantaged children
do not own a book of their own. This
initiative inspires children to pick up a
book and stay healthy through one-to-
one reading sessions with players and
coaches, followed by a fun sporting
activity such as tag-rugby.
} Rugby in Schools – community
coaches visit schools and deliver
rugby sessions adapted for all ages
and abilities, with a particular focus
on children with learning and physical
disabilities.
} Matchday Experience – 40
disadvantaged children are invited to
a Championship rugby match where
they meet their elite sporting heroes,
receive a free rugby shirt and form the
Guard of Honour as the players enter
the pitch.
} Junior Club Night – first team players
and coaches visit grassroots rugby
clubs and provide their expertise by
coaching the youngest players and
delivering help and assistance to the
local grassroot coaches.
} Project:500 – community coaches
provide fun multi-sport training
camps during school holidays for
disadvantaged children, and provide
nutritional meals each day of the
camp.
Wolverhampton Rugby Club
The Group has a long-standing
relationship with Wolverhampton Rugby,
a community-based, grassroots club
serving both male and female teams from
the age of six upwards. Our partnership
has meant people of all ages are able to
come together, share talents, learn new
skills and in turn, strengthen community
bonds.
Our sponsorship pays for running of the
grassroots club, enabling it to be remain a
hub of the local community.
XL@Football Academy, Kent
Our newest partnership which was
established in 2021, is a female football
academy with the mission to develop
young female footballers and provide
a pathway into the professional game,
delivering the same level of training,
coaching and support as male teams
receive.
We are proud to be their official club
sponsor, sponsoring five teams in total.
We have gifted the logo placement to
Demelza Hospice Care for Children, our
local charity partner, to create a three-
way partnership to help raise awareness
and fundraising opportunities.
India
SOS Children’s Village, Bangalore
SOS Children’s Village provide support
for the holistic development of orphans,
women and children in vulnerable
families.
We provide funding to support education,
food, clothing and housing for 20 orphans
as well as funding for an additional 12
children in Hyderabad hospital, orphaned
due to COVID-19.
HBS Hospital, Bangalore
HBS Hospital is a non-profit hospital
which provides critical healthcare to
members of society who are not able to
afford the care they need.
The Group provides dialysis sessions
to 40 individuals who live below the
poverty line. We also donated two dialysis
machines which can provide over 11,000
dialysis sessions over a period of five
years.
Kolar Gold Field Hospital, Kolar
New for 2021, OSB India is now also
supporting the Kolar Gold Field Civil
Hospital. This hospital closed down two
decades ago following the closures of
mines in the area, but has now been
transformed into a COVID-19 care centre,
with four rooms being used for Intensive
Care Unit facilities.
The Group has been helping to set up a
high dependency paediatric ward with
equipment.
We’re completely
overwhelmed by the
support and donations
we’ve received from OSB
Group throughout 2021.
Jade Secker
Fundraising Manager, The Haven

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OSB GROUP PLC Annual Report and Accounts 2021
The requirements of sections 414CA and 414CB of the Companies Act 2006 relating to non-financial reporting are addressed
in this section.
We have a range of policies and guidance that support key outcomes for all our stakeholders. Performance against our strategic non-
financial performance measures is one indicator of the effectiveness and outcomes of policies and statements. The Group’s policies
and statements include, but are not limited to, those summarised in the table below. The table provides cross references to where
further information is included within the Annual Report.
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Environmental matters
Our Environmental Policy
embodies our Stewardship
value, outlining our commitment
to acting with conscience and
considering environmental factors
at all times. The policy commits to
reducing our environmental impact
and to continually improving our
environmental performance as
an integral part of our business
strategy. It seeks to ensure that we
meet or exceed all relevant legal
and regulatory environmental
obligations.
The Environmental Policy was
reviewed by the Environmental
Working Group which focuses on:
} assessing the impact of business
activities and driving initiatives
to minimise the consumption
of energy, water, paper, office
supplies, use of transportation
and impact of maintenance and
cleaning;
} aligning the environmental data
and actions for all entities within
the Group;
} developing a culture of
environmental conscience
across the Group; and
} encouraging environmental
responsibility with employees
and within supply chains.
The focus of actions in 2021 has
been on reducing the impact of
our directly controlled operations,
developing our environmental
management systems maturity and
sharing best practice across the
Group. Key highlights for the year
include:
} transitioning our UK offices and
branches where the Group had
operational control to renewable
electricity tariffs, reducing
emissions significantly;
} undertaken re-certification
audits to ISO 14001:2015
Environmental management
standard within our office
buildings;
} completed the rollout of video
conferencing facilities within
office buildings to reduce
unnecessary business travel;
} continued to introduce energy-
efficient solutions such as
LED lighting as part of office
refurbishments or reactive
maintenance;
} established the Environmental,
Social and Governance
Committee; and
} initiated the development of
a Net Zero plan. This plan will
determine the objectives and
targets over the near and
long-term to achieve Net Zero
emissions across Scope 1, Scope
2 and Scope 3 emissions.
See pages 78 to 85.
Non-financial
information statement

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Employee matters
Our Group Flexible Working
Policy sets out a range of flexible
working arrangements and the
approach that the Group will take
in reviewing formal Flexible Working
Requests from employees.
Our Group Homeworking Policy
is applicable to all UK employees
and provides clarity in respect of
the Group’s approach regarding
formal homeworking arrangements
(i.e. following a Flexible Working
Request being agreed), informal
arrangements and enforced
arrangements (e.g. COVID-19).
The Group Flexible Working Policy
was drafted by HR Management
and reviewed by the Group’s Legal
and Company Secretariat function.
The policy was then endorsed
by the Governance Forum and
approved by the Group Executive
Committee.
A similar process, as outlined
above, was followed for the Group
Homeworking Policy. In addition,
the policy was reviewed by the
Health and Safety, Data Protection
and Information Security teams.
An external review was undertaken
prior to the policy being approved.
We seek to accommodate, where
possible, all requests for flexible
working, with the majority of
requests being agreed.
The Group Homeworking Policy
introduced an attestation
for those working from home
(formally, informally and on an
enforced basis), with this requiring
employees who work from home
to confirm that they are aware of
and can appropriately mitigate
risks presented by working from
home in respect of data protection,
information security and health and
safety.
See page 95.
Our Group Diversity and
Inclusion Policy sets out the
Group’s commitment to promoting
equality of opportunity, providing
an inclusive workplace and
eliminating any unfair treatment or
unlawful discrimination.
In order to ensure appropriate
Board oversight of matters relating
to diversity and inclusion, updates
are regularly provided to the Group
Nomination and Governance
Committee.
In addition, the Group General
Counsel and Company Secretary,
who is the Executive responsible
for diversity and inclusion, issues
regular updates to all employees in
order to drive awareness of ongoing
internal initiatives and progress
relating to diversity and inclusion.
An external adviser, Legal and HR
were involved in drafting the new
policy, which has been through the
governance process and approved
by the Group Nomination and
Governance Committee.
Our Group-wide Diversity and
Inclusion Working Group has
progressed a number of initiatives
and activities, some of which
supported gender-related focus
areas, such as progressing
towards our published Women
in Finance Charter target and
reducing our gender pay gap. The
Diversity and Inclusion Working
Group has ensured a far broader
focus on other areas of diversity,
which contributed to the Group
achieving a silver award as a result
of a Talent, Inclusion and Diversity
Evaluation (TIDE) undertaken by
the Employers Network for Equality
and Inclusion (ENEI).
See pages 101 and
102.
Our Group Whistleblowing
Policy – Raising a Concern
aims to encourage all employees,
and others who have serious
concerns about wrongdoing in the
workplace, to raise their concerns
at the earliest opportunity.
The Group’s whistleblowing
arrangements endeavour to
manage whistleblowing cases
fairly, consistently and in a
way which protects individual
whistleblowers.
A Whistleblowing Report is
regularly presented to the Group
Audit Committee and an Annual
Whistleblowing Report is presented
to the Board.
The Chair of the Group Audit
Committee is the designated
Whistleblowers’ Champion.
The Group Audit Committee is
responsible for overseeing the
effective operation of the policy;
this aims to mitigate the risk of
undetected wrongdoing and
unwanted exposure for the Group.
Group Audit
Committee Report,
see page 139.

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OSB GROUP PLC Annual Report and Accounts 2021
Non-financial information statement (Continued)
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Our Group Health and Safety
Policy outlines our approach and
responsibilities under statutory
legislation. We recognise our
duty and responsibility and the
Health and Safety Policy ensures
that the Group complies with
legislation to protect its employees
and customers, and provides a
suitable and safe environment for
employees, customers and anyone
affected by the Group’s operations.
The management of COVID-19
and associated risk assessment
is now subject to regular review
with participation from Property
Services, Operational Resilience
and the appointed third party
Health and Safety specialists.
The Health and Safety Working
Group meets twice per annum to
review the objectives of the Health
and Safety Policy. Any relevant
matters arising from these meetings
are reported to Operational Risk.
An accountable Executive is
responsible for the Health and
Safety Policy and a third party
adviser reviews it annually prior to
it being approved by the Board.
A number of COVID-19 measures
remain in place in our offices and
branches, proportionate to the
level of risk determined through risk
assessment.
Health and safety statistics are
provided on a dashboard shared
monthly with the Board along
with an annual Health and Safety
Report.
Risk assessments are completed
across the Group annually.
Annual health and safety training is
completed by all employees.
Health and Safety awareness in
the workplace has increased with
updates provided on the Group
intranet to reduce the possibility of
injury to employees and customers.
Strategic Report,
seepage 17.
Social matters
Our Modern Slavery Statement
and Vendor Code of Conduct
and Ethics outlines the measures
we have taken to combat the risks
of modern slavery and human
trafficking in our businesses and
supply chains.
The Modern Slavery Statement
is updated in line with the
requirements. In addition, as part
of an annual review, the Modern
Slavery Working Group updated
its Vendor Code of Conduct and
Ethics. The Group’s Executive
Committee has approved the Code
which is currently being issued to
all third party service suppliers.
The Code includes provisions on
the Group’s Values, Diversity and
Inclusion and Human Rights. It also
provides details of breach reporting
procedures.
We perform relevant checks via
the Organisation for Economic Co-
operation and Development (OECD)
Watch at the onboarding stage
and, where required, as part of
our ongoing due diligence checks.
In addition, we continue to ensure
that our standard contractual
terms include references to modern
slavery where relevant.
All employees are required to
complete mandatory training to
raise awareness.
The largest risks to the Group
are its supply chain, its Indian
operations and employment
processes. To sufficiently mitigate
the risks, our Vendor Management
team includes specific testing of
key controls within the Vendor
Management Risk Assessment
Matrix in line with the Vendor
Management Framework. The
Group ensures that appropriate
contractual wording is included in
its recruitment-related contractual
documentation where appropriate.
There are breach reporting
procedures in place and there
were no reportable incidents in this
financial year.
See page 103.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Our Group Vendor Management
and Outsourcing Policy sets out
the core requirements which we
must meet and provides a structure
to efficiently manage potential and
contracted third party relationships
ensuring the right level of
engagement and due diligence,
in compliance with our regulatory
obligations.
All third parties are classified
according to the nature of
the services provided and the
associated risk. Due diligence
relating to issues such as data
security, financial stability, legal
and reputational risks is undertaken
when onboarding, monitoring and
exiting all third parties.
The monthly Vendor Management
Committee reviews compliance
with our Group Vendor
Management and Outsourcing
Policy and the performance of
our key third parties. There is
regular reporting to the Group
Risk Committee and an annual
assurance update is provided to
theBoard.
We recognise the importance of
building strong relationships and
governance with our third parties
and of the possible reputational
risk this can impose. We actively
monitor our third parties to ensure
that they are adhering to our
requirements and standards,
so that we can in turn meet our
obligations to stakeholders.
Strategic Report,
seepage 18.
Our Lending Policy sets out the
parameters within which we are
willing to lend money responsibly
within our set criteria and credit risk
appetite.
All changes to the Lending Policy
require approval from the Group
Credit Committee, with material
changes escalated to the Group
Risk Committee.
As a second line of defence, the
Credit Quality Assurance process
monitors adherence to the policy
through a risk-based sampling
approach.
System parameters and
underwriting processes act as an
additional control to ensure lending
parameters are not breached.
The Group Risk Committee
challenges how the Lending Policy
is applied to ensure that the right
outcomes are achieved.
The credit risk appetite of the
Group monitors the performance
and make-up of the portfolio
relative to pre-agreed trigger limits
and therefore is a measure of the
overall performance of the Lending
Policy.
Non-adherence to the credit risk
appetite could lead to business
being written outside the agreed
risk appetite.
See page 19.
Our Group Complaint Handling
Policy outlines, at a high level,
our regulatory expectations
for complaint handling from a
customer-centric perspective.
We investigate complaints
competently, diligently and
impartially, supported by
appropriately trained employees.
Our Complaints processes are
designed to be easily accessible
by all customers and ensure that
those in vulnerable circumstances
experience the same opportunities
to complain and a service that is
tailored to individual needs. Root
cause analysis is used to identify
and solve underlying issues rather
than apply quick fixes.
Complaint performance forms part
of the management information
provided to Management
Committees and to the Board.
Analysis of complaints outcomes
and potential business and
customer impact is an integral part
of the Group’s processes.
Complaints remained aligned to
the level of business activity.
Complaints are also a component
of Executive bonus scheme metrics
affecting remuneration outcomes.
Complaints may be an early
warning of not treating customers
fairly, which has regulatory
consequences for the Group.
See page 95.

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OSB GROUP PLC Annual Report and Accounts 2021
Non-financial information statement (Continued)
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Our Group Customer
Vulnerability Policy sets the
standards and approach for the
identification and treatment of
vulnerable customers and provides
guidance to all areas of the Group
to ensure vulnerable customers
consistently receive fair outcomes.
Regular case study reviews
through the Vulnerable Customer
Review Committee ensure that
best practice processes across
the different customer journeys
are monitored and shared with
representatives from differing
customer-facing and second line
functions.
In line with policy the Compliance
function conducts risk-based
second line assurance reviews
across both vulnerable customer
and other operational processes,
in accordance with its annual
Compliance Assurance Plan, should
the need arise.
An enhanced training programme
has been developed to focus on
more complex customer scenarios
including identifying vulnerable
customers and how best to serve
them and their changing needs.
There is a potential impact to our
reputation and regulatory risks for
not treating customers fairly.
Customer complaint data shows
that there were no systemic issues
in vulnerability processes and
outcomes for the year.
See page 94.
Our Group Data Protection Policy
ensures that there are adequate
policies and procedures in place
to enable compliance with the UK
General Data Protection Regulation
(GDPR) and the Data Protection Act
2018; and sets out the necessary
steps that should be taken when
processing personal data.
The Group Data Protection Officer
reports twice each year, to the
Group Executive Committee and
the Board, regarding compliance
with the Data Protection Policy and
reports on any data incidents and
data subject access requests.
The privacy and security of
personal information is respected
and protected. We regard sound
privacy practices as a key element
of corporate governance and
accountability. Non-compliance
would expose the Group to
the potential breach of GDPR
provisions and fines.
See page 95.
Our Group Arrears Management
and Forbearance Policy ensures
that we address the need for
internal systems and processes
to treat customers in financial
difficulties fairly, including being
proactive with customers who
display characteristics of being on
the cusp of financial difficulty.
As the second line of defence, the
Compliance function reviewed
customer journeys; these reviews
are risk-based and look at customer
outcomes across the collections
and litigation processes to ensure
customers are dealt with in an
effective and fair manner.
The Compliance function conducts
second line thematic reviews across
collection and litigation processes
in line with policy.
Our arrears rates are monitored
through the Group Credit
Committee on a monthly basis
to ensure senior management
oversight of arrears trends. There
is credit risk associated with credit
losses following the ineffective
management of customer
accounts.
This has been an area of focus
for the Board and Executives
and adjustments were made to
accommodate payment deferral
requests, as a result of COVID-19.
To ensure that those customers
who had been adversely impacted
by COVID-19 were supported with
regards to the management of their
mortgage payments, a clear set
of internal policies and procedures
were in place to effectively manage
all forbearance/payment deferral
requests. The changes were put
in place in line with the regulatory
timelines noted in the Financial
Conduct Authority (FCA) guidance
and in line with that guidance,
any customers requiring further
support outside the COVID-19
guidance period are supported
utilising the standard policy toolkit
which is applied in accordance
with all regulator/Mortgage
Conduct of Business (MCOB) rules
requirements.
See page 94.

111
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Our Anti-Bribery and Corruption
Policy outlines our stance to
conduct all of our business in an
honest and ethical manner. We
take a zero-tolerance approach
to bribery and corruption and are
committed to acting professionally,
fairly and with integrity in all
of our business dealings and
relationships.
The purpose of the policy is to
provide employees, contractors
and third party service providers
with clear guidelines to ensure
that we conduct our activity in an
ethical and appropriate manner
including complying with the laws
and regulations of each jurisdiction
in which we operate.
The policy forms an integral part
of the Group Financial Crime Risk
Management Framework.
The policy is subject to an annual
review process with approval
provided by the Group Audit
Committee.
Anti-Bribery and Corruption
training forms part of the wider
Financial Crime training package
that is mandatory for each
employee to complete on an
annualbasis.
In addition, the requirements
set out in the Anti-Bribery and
Corruption Policy are incorporated
into the Group’s Vendor
Management and Outsourcing
Policy.
Gifts, hospitality and donations
are closely monitored through a log
maintained by Group Compliance
in accordance with our associated
policy and procedures.
No material issues or breaches have
arisen from the Group’s adherence
to the existing Anti-Bribery and
Corruption Policy and processes.
We recognise that there may be
instances where an employee may
be exposed to the risk of bribery or
corruption and, as result, provide
numerous channels in which an
employee can report such an event,
including via the whistleblowing
process.
During the tender process for
a new supplier, all employees
involved in the process must
ensure compliance with the Anti-
Bribery and Corruption Policy and
requirements. This approach also
applies to the Conflicts of Interest
Policy.
See page 103.
Our Conflicts of Interest Policy
aims to identify, maintain and
operate effective organisational
and administrative arrangements
to identify and take all reasonable
steps in order to avoid conflicts
where possible.
The policy is subject to an annual
review process with approval
provided by the Group Executive
Committee. Conflicts of interest
training forms part of the wider
Financial Crime training package
that is mandatory for each
employee to complete on an
annualbasis.
Conflicts of interest disclosures
are typically made as part of the
recruitment process, as part of
the annual attestation process
and/or when there is a change
to circumstances, such as a
new potential conflict arising.
In addition, conflicts of interest
requirements are incorporated into
the Group’s Vendor Management
and Outsourcing Policy.
Group compliance maintains
the conflicts of interest register,
which is reviewed quarterly by the
Group Conduct Risk Management
Committee and escalated to
the Group Risk Management
Committee, as required. In
addition, the Group Nomination
and Governance Committee
reviews Executive and Director
conflicts.
No material issues or breaches have
arisen from the Group’s adherence
to the existing Conflicts of Interest
Policy and processes.
As a financial services provider, we
face the risk of actual and potential
conflicts of interest periodically.
We recognise that there may be
instances where conflicts of interest
are unavoidable and that a conflict
may exist even if no unethical or
improper act or outcome results
from it. Where it is not possible
to avoid a potential conflict of
interest, we are committed to
ensuring that any conflicts of
interest that arise are managed
fairly and in the best interests of
our customers.
Corporate
Governance Report,
see page 127.

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OSB GROUP PLC Annual Report and Accounts 2021
Non-financial information statement (Continued)
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Our Fraud Policy outlines our duty
to comply with prevailing legal
and regulatory requirements and
to have appropriate systems and
controls in place to mitigate the
risk of fraud. This includes ensuring
appropriate monitoring and
escalation procedures are in place
and are operating effectively.
Our strategy for managing fraud
risk is to adopt a zero-tolerance
approach towards any form of
fraud; however, we accept that
incidents of fraud will occur as a
result of doing business.
The purpose of the policy and
supporting procedures is to provide
a consistent approach throughout
the Group to the prevention,
detection and investigation of
fraud. The policy forms an integral
part of the Group Financial Crime
Framework.
The policy is subject to an annual
review with approval provided by
the Group Audit Committee.
Fraud awareness training forms
part of the wider Financial Crime
training package that is mandatory
for each employee to complete on
an annual basis.
External stakeholders, customers,
clients and relevant third parties
are made aware of our robust
stance towards fraud management
through literature or similar
communication channels.
All potential fraud incidents are
investigated by a dedicated Group
Financial Crime team that is
specifically trained in identifying
and reporting fraudulent behaviour.
The Group will seek to recover all
losses arising from fraud-related
activities and to take necessary
action, as appropriate.
The Group Conduct Risk
Management Committee, Group
Risk Management Committee
and the Group Risk Committee
regularly review and monitor
fraudreporting.
During the first half of 2021,
following the discovery of
fraudulent activity by a third
party on a funding line provided
by the Group and secured
against lease receivables and
the underlying hard assets, the
Group commissioned an external
review of processes and controls
in its funding lines business. The
review confirmed that it was an
isolated incident and the majority
of recommended enhancements
to processes and controls have
now been implemented and the
remainder will be made before
the end of the year. The £20.0m
impairment provision taken in 2020
against the potential fraud has
increased to £22.0m. The funding
lines business remains primarily
property related and the Group
does not intend to add any new
non-property-related funding lines
in the future.
As a financial services provider, we
recognise that we are inherently
exposed to the risk of fraud and
that losses may occur as a result
of doing business. In order to deter,
detect and disrupt those who would
seek to use the Group to facilitate
any form of financial crime we have
appropriate systems and controls
in place.
Key risk and performance
indicators are agreed by senior
management and reviewed on
a regular basis. Management
information on fraud-related
activity is presented on a regular
basis to senior management in
order to provide visibility of our
fraud exposure and any associated
loss.
Group Audit
Committee Report,
see page 139.

113
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Description of policies/statement Due diligence undertaken Outcomes/Impacts/Risks Further information
Our Anti-Money Laundering
and Counter Terrorist Financing
Policy seeks to explain the
responsibility of senior managers,
the Money Laundering and
Reporting Officer (MLRO) and all
employees. The policy requires that
the highest ethical standards are
met and requires all employees to
act with integrity at all times. We
have no appetite for breaching
legislation or regulation regarding
anti-money laundering or counter
terrorist financing.
The policy provides a consistent
approach to the deterrence and
detection of those suspected of
laundering the proceeds of crime
or those involved in the funding
of terrorism and the relevant
disclosure to the necessary
authorities. The policy forms
an integral part of the Group
Financial Crime Risk Management
Framework.
The policy is subject to an annual
review with approval provided by
the Group Audit Committee.
Anti-money laundering and counter
terrorist financing forms part of
the wider Financial Crime training
package that is mandatory for
each employee to complete on an
annual basis.
We have documented processes
and procedures in place to identify
the Group’s customers prior
to entering into a relationship.
Systems and controls have been
adopted to identify and report
activity deemed to be suspicious.
All suspicious activity is
investigated by a dedicated Group
Financial Crime team who are
specifically trained in identifying
and reporting suspicious behaviour.
No material issues or breaches have
arisen from the Group’s adherence
to the existing Anti-Money
Laundering and Counter Terrorist
Financing Policy and processes.
As a financial services provider,
the Group recognises that it is
inherently exposed to the risk of
financial crime.
Key risk and performance
indicators are agreed by senior
management and reviewed on
a regular basis. Management
information on financial crime-
related activity is presented to
senior management in order to
provide visibility of our exposure to
financial crime.
Group Audit
Committee Report,
see page 139.
Our Group Operational
Resilience Policy documents
the approach and expectations
of the Group in establishing and
enhancing its levels of resilience.
It also references how the Group
complies with the Financial
Conduct Authority and Prudential
Regulation Authority policies on
Operational Resilience which were
first published in March 2021. These
policies require all firms to adopt a
proactive approach to preventing
a disruption to its services, whilst
also ensuring that sufficient
planning and testing is established
in order to respond effectively to
a disruptive incident. Along with
the wider industry, the Group
has made excellent progress in
implementing the requirements of
the two regulatory policies.
The Group’s ongoing response to
COVID-19 demonstrates how it can
respond rapidly and effectively to a
severe threat to the services that it
provides to its customers, although
we recognise that a pandemic is
just one of a number of possible
threats to the disruption of service.
The Group is well placed to respond
to threats that occur suddenly and
which may last for an extended
period. An Operational Resilience
Simulation exercise was conducted
in January 2022.
The Group continues to invest
in improving its infrastructure
and expects to deliver a number
of enhancements in 2022 and
beyond. Whilst these changes are
designed to improve its services
and efficiency, we recognise the
implementation risks associated
with delivering significant change
programmes and are ensuring that
operational resilience remains a
key consideration when setting the
change management agenda.
See page 64.
Description of the business model
A description of the business model is set out on pages 10 to 15 and includes non-financial KPIs relating to broker and customer
satisfaction scores, customer retention, greenhouse gas emissions, sponsorship and donations, and women in senior management roles.
Principal risks and uncertainties
A description of the principal risks and uncertainties is set out on pages 58 to 68.
This Strategic report was approved by the Board and signed on its behalf by:
Jason Elphick
Group General Counsel and Company Secretary
17 March 2022

114
OSB GROUP PLC Annual Report and Accounts 2021
Corporate
GovernanceReport
Directors’ Report
116
Board of Directors
118 Group Executive team
121 Corporate Governance Statement
130 Group Nomination and Governance Committee Report
134 Group Audit Committee Report
141 Group Risk Committee Report
143 Other Committees
144 Directors’ Remuneration Report
164 Directors’ Report: Other Information
167 Statement of Directors’ Responsibilities

115
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The Board recognises that
goodcorporate governance is
fundamental to the sustainable
execution of the Company’s
strategy in line with evolving
stakeholder expectations.

116
OSB GROUP PLC Annual Report and Accounts 2021
Committee membership
Chair of the Board Capital and
Funding and Group Nomination
and Governance Committees;
a member of the Group
Remuneration Committee.
Experience and qualifications
David is also Chairman of
Mizuho International Plc and
his other current non-executive
directorships include Fidelity
International Holdings (UK)
Limited, The Royal London
Mutual Insurance Society. He
also served as a non-executive
director on the board of Bank
of Ireland (UK) plc. David was
previously Chief Information
Officer at Barclays Bank plc
and Chief Risk Officer at RSA
Insurance Group plc. He sat
on the Executive Committee of
both companies. His experience
as an executive includes a
wide range of senior roles in
operations, technology, risk and
leadership.
Key skills
David has over 40 years’
experience in the financial
services industry and has a
degree in Modern Languages
from University College London
and an MBA from the University
of Exeter.
Appointment
David was appointed to the OSB
Board in September 2017 and
held the position of Chairman
until October 2019. He was
reappointed as Chairman in
February 2020.
Committee membership
Member of the Board Capital
and Funding Committee.
Experience and qualifications
Prior to joining OSB, Andy
was CEO of Saffron Building
Society, where he had been
from 2004. Prior to that, he
held senior positions at National
Westminster Bank plc, John
Charcol Limited and Bradford
& Bingley plc. Andy served
as a non-executive director
for Kreditech Holding SSL
GmbH and Northamptonshire
Healthcare NHS Foundation
Trust. Andy is a director of the
Building Societies Trust Limited.
He served as a member of the
Building Societies Association’s
Council and the Financial
Conduct Authority’s Smaller
Business Practitioner Panel.
Key skills
Andy has over 30 years’
experience in financial services.
Appointment
Andy was appointed to the OSB
Board in December 2011.
Committee membership
Member of the Group
Audit, Group Nomination
and Governance, Group
Remuneration and Group Risk
Committees.
Experience and qualifications
Noël was appointed to the
Board of CCFS in June 2017
and was its Senior Independent
Director from August 2017. Noël
is a non-executive director of
Scotiabank Europe plc. She is
also a member of the UK Export
Finance Board. She is a former
non-executive director of Sirius
Minerals plc, Standard Life
Aberdeen plc and RSA Insurance
Group plc, prior to which she
held a variety of senior roles
with Citicorp for 15 years,
latterly serving as the Chief
Operating Officer of Citibank
International plc. Noël has held
non-executive roles with GE
Capital Bank Limited, Sumitomo
Mitsui Banking Corporation
Europe Limited, Avocet Mining
plc, Alent plc, Corus Group plc,
Logica plc, The London Metal
Exchange and Standard Life
Assurance Limited.
Key skills
Noël has extensive experience
in both the public sector with
government bodies and the
private sector with global
banking companies, which
brings valuable insight to the
boardroom debate.
Appointment
Noël was appointed to the OSB
Board and the position of Senior
Independent Director in October
2019.
Committee membership
Member of the Board Capital
and Funding and Group Models
and Ratings Committees.
Experience and qualifications
April was previously an
Executive Director in the
Rothesay Life pensions
insurance business of Goldman
Sachs Group and worked for
Goldman Sachs International
for over 16 years, including as
an Executive Director in the
Controllers Division in London
and New York. April began her
career at KPMG LLP in a general
audit department.
Key skills
April has broad financial
services experience and has
been a member of the Institute
of Chartered Accountants in
England and Wales since 1992.
Appointment
April joined OSB in May 2012
and was appointed to the OSB
Board in June 2012.
David Weymouth
Chairman
Andy Golding
Chief Executive Officer
Noël Harwerth
Senior Independent
Director
April Talintyre
Chief Financial Officer
Board of Directors
(biographies)
Experienced
leadership

117
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Committee membership
Chair of the Group Risk and
Group Models and Ratings
Committees; a member of
the Group Audit and the
Board Capital and Funding
Committees.
Experience and qualifications
Graham was previously Acting
Group Credit Director at Lloyds
TSB plc and Chief Credit
Officer at Abbey National
plc. Prior to this, he spent 18
years at National Westminster
Bank plc culminating in the
role of Managing Director,
Credit Risk at NatWest Markets
plc. A Fellow of the Institute
of Chartered Accountants;
Graham was involved with
housing associations for nearly
30 years as Treasurer and
Board member in the North of
England and in London.
Key skills
Graham has significant
banking, credit risk and
financial services experience.
Appointment
Graham was appointed to the
OSB Board in May 2014.
Committee membership
Member of the Group Audit
and Group Remuneration
Committees.
ESG Champion.
Experience and qualifications
Sarah previously held
leadership positions at General
Electric Company for 12 years
in its Corporate, Aviation and
Capital business development
teams, leaving General
Electric Company as Leader
of Business Development and
M&A for its global GE Capital
division. Prior to General Electric
Company, Sarah worked at
Lazard & Co. Limited for 11
years, leaving as Director,
Corporate Finance and also
spent five years as an auditor
at PricewaterhouseCoopers
LLP (PwC). She served as an
Independent non-executive
director of Balta Group NV,
a Belgian company listed on
Euronext, until 31 December
2021.
Key skills
Sarah has significant capital
management and mergers
and acquisitions experience
in financial services. She is a
qualified chartered accountant.
Appointment
Sarah was appointed to the
OSB Board in February 2019.
Committee membership
Chair of the Group Audit
Committee and member of the
Board Capital and Funding,
Group Remuneration, Group
Risk and Group Models and
Ratings Committees.
Experience and qualifications
Rajan was appointed to the
Board of CCFS in September
2016. He was Financial
Controller of the Royal Bank of
Scotland (RBS) Group plc and
held a number of senior finance
positions during a 28-year
career with RBS.
Key skills
Rajan has extensive experience
of financial and regulatory
reporting in the UK and US with
a strong background in internal
financial controls, governance
and compliance.
Rajan is a Fellow of the Institute
of Chartered Accountants and
of the Chartered Institute of
Bankers in Scotland.
Appointment
Rajan was appointed to the OSB
Board in October 2019.
Committee membership
Chair of the Group
Remuneration Committee
and member of the Group
Nomination and Governance
Committee.
Experience and qualifications
Mary is Chair of the
Remuneration Committee and
Senior Independent Director
at Motorpoint Group plc. She
served as a non-executive
director of Dignity plc and
Chair of its Remuneration
Committee. She was the CEO of
the Commercial Division and a
Director of the Banking Division
at Close Brothers Group PLC.
Prior to that, Mary was interim
Chief Operating Officer of
Skandia, the European arm of
Old Mutual Group, and prior
to that, spent 17 years at GE
Capital, running a number
of businesses including GE
Fleet Services Europe and GE
Equipment Finance.
Key skills
Mary has broad senior
management experience in the
banking and finance sectors.
Appointment
Mary was appointed to the OSB
Board in May 2014.
Committee membership
Member of the Board Capital
and Funding, Group Audit,
Group Risk and Group Models
and Ratings Committees.
Experience and qualifications
Simon has significant
experience in financial services.
He joined KPMG in 1980 and
was made a partner of the firm
in 1992, going on to lead the
firm’s National Building Societies
and Mortgage Practice and
subsequently became banking
partner in Financial Risk
Management. Simon graduated
in Law from University College
London and is a qualified
chartered accountant. Simon
is a non-executive director of
Leeds Theatre Trust Limited.
Key skills
Simon has significant
experience in mortgages, SME
lending, risk management and
regulation within the banking
sector.
Appointment
Simon was appointed to the
Board on 4 January 2022.
Graham Allatt
Independent Non-
Executive Director
Sarah Hedger
Independent Non-
Executive Director
Rajan Kapoor
Independent Non-
Executive Director
Mary McNamara
Independent Non-
Executive Director
Simon Walker
Independent Non-
Executive Director

118
OSB GROUP PLC Annual Report and Accounts 2021
Group Executive team
(biographies)
Experience and qualifications
Jens joined OSB as Chief Risk Officer in
2012, before becoming Group Commercial
Director in 2014.
Jens joined from the Asset Protection
Agency, an executive arm of HM Treasury,
where he held the position of Chief Risk
Officer. Prior to joining the Asset Protection
Agency, Jens spent nearly a decade at
management consultancy Oliver Wyman
Limited where he advised a global portfolio
of financial services firms and supervisors
on strategy and risk management. Jens led
Oliver Wyman Limited’s support of Iceland
during the financial crisis.
Experience and qualifications
Jon joined OSB in November 2021.
Jon has significant experience within the
financial services sector and joined the
Group from Aspinall Financial Services, a
pre-authorisation bank start-up, having
previously led Masthaven Bank from 2016 to
early 2021 as their Chief Commercial Officer
and Deputy Chief Executive Officer (CEO).
Jon started his career with PwC, before
joining Aviva plc and subsequently became
CEO of Saffron Building Society.
Jon is a Fellow of the Institute of Chartered
Accountants in England and Wales.
Experience and qualifications
Jason joined OSB in June 2016. He has over
25 years of legal private practice and in-
house financial services experience.
Jason’s private practice experience was
primarily in Australia with King & Wood
Mallesons and in New York with Sidley Austin
LLP. He has been admitted to practice in
Australia, New York and England and Wales.
Jason’s previous in-house financial services
experience was as Director and Head of
Bank Legal at Santander Group in London.
Prior to this, he held various roles at National
Australia Bank Limited, including General
Counsel Capital and Funding, Head of
Governance, Company Secretary and
General Counsel Product, Regulation and
Resolution.
Experience and qualifications
Hasan joined OSB in September 2015 as
Chief Risk Officer. He became Group Chief
Risk Officer in 2021.
Hasan has over 25 years of risk experience
having worked at several financial
institutions, including Barclays Capital,
Royal Bank of Canada and Standard
Chartered Bank. Prior to joining OSB,
he was a Senior Director at Deloitte LLP
within the Risk and Regulatory practice
with responsibility for leading the firm’s
enterprise risk, capital, liquidity, recovery
and resolution practice. Hasan graduated
from the London School of Economics with a
MSc in Systems Design and Analysis and a
BSc in Management.
Experience and qualifications
John joined OSB in October 2019, following
the Combination with CCFS.
John held the position of Director of IT
and Change Management at CCFS and
had responsibility for the operational and
tactical delivery of all business matters
relating to information technology,
information security and change
management.
With over 19 years’ experience in information
technology, information security and
change management within the financial
services sector, John has held a number of
senior IT roles within Nationwide Building
Society and Derbyshire Building Society.
Experience and qualifications
Clive joined OSB in 2013. Clive has over
25 years of financial services experience,
having worked at several financial
organisations including Yorkshire Building
Society, John Charcol Limited and Bradford
and Bingley plc.
Prior to joining OSB, Clive spent six
years at Santander Group where he
was the Chief Operating Officer for the
intermediary mortgage business. He has
also held positions at the European Financial
Management Association and has been the
Chair of the FS Forums Retail Banking Sub-
Committee.
Clive is a Fellow of the Chartered Institute of
Bankers.
Jens Bech
Group Commercial
Director
Clive Kornitzer
Group Chief
Operating Officer
John Gaunt
Group Chief
Information Officer
Jason Elphick
Group General Counsel
and Company Secretary
Jon Hall
Group Managing
Director, Mortgages
Hasan Kazmi
Group Chief
Risk Officer
A strong
core team

119
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Experience and qualifications
Richard joined OSB in 2013.
Prior to joining OSB, Richard was head
of the credit function for Morgan Stanley
Group’s UK origination business and
subsequently looked after the Credit and
Collections strategy within its UK, Russian
and Italian businesses. Between 1988 and
2006, Richard held various roles at Yorkshire
Building Society, including the position of
Mortgage Application Centre Manager.
Experience and qualifications
Lisa joined OSB in April 2016. Prior to
joining OSB, she worked for Grant Thornton
LLP where she was an Associate Director
responsible for leading several outsourced
audit functions within its Business Risk
Services division.
Lisa is a qualified Chartered Internal Auditor
and has over 25 years of internal audit and
operational experience gained in the UK,
UAE and Switzerland, having worked at
several financial institutions, including PwC,
Morgan Stanley Group, HSBC and Man
Group plc.
Experience and qualifications
Paul joined OSB in October 2019, following
the Combination with CCFS.
Paul was an Executive of Charter Savings
Bank. Paul brings specialist knowledge of
the savings market and is responsible for
all aspects of the Group’s savings strategy,
products, propositions, sales, distribution
and operations.
With over 20 years of UK and international
experience in the retail banking industry,
including senior positions at First Direct,
HSBC and Shawbrook Bank Limited, Paul
has extensive experience delivering banking
products to the consumer market.
Paul Whitlock
Group Managing
Director, Savings
Lisa Odendaal
Group Chief
Internal Auditor
Richard Wilson
Group Chief Credit and
Compliance Officer

120
OSB GROUP PLC Annual Report and Accounts 2021
Corporate Governance Report
Dear Shareholder,
The Company’s Corporate
Governance Report for 2021
is set out in the following
pages and demonstrate full
compliance with theCode
throughout the year.
The statement of corporate governance practices, including
the Reports of the Committees, set out on pages 120 to 165 and
information incorporated by reference, constitutes the Corporate
Governance Report of OSB GROUP PLC.
Building a culture of stewardship
The Board recognises that good corporate governance is
fundamental to the sustainable execution of the Group’s strategy
in line with evolving stakeholder expectations. This year, the
Board has accelerated its focus on environmental, social and
governance (ESG) matters to ensure that the Group remains
aligned with the expectations of its stakeholders.
The introduction of Stewardship as one of the Group’s core
values reflects the Board’s ambition to promote a culture which
positively impacts the Group’s stakeholders, the communities
in which we operate and the environment. This year, a
number of governance initiatives have been implemented
to ensure Stewardship is embedded into the Group’s culture
and remains a key consideration in Board decisions. This
includes the appointment of Sarah Hedger as ESG Champion,
the establishment of an ESG Committee and a Climate Risk
Committee. The Group’s Task Force on Climate-related Financial
Disclosures (TCFD) are also presented for the first time on pages
86 to 93. Further details on ESG matters can be found on pages
76 to 85.
Evaluating effectiveness
During the year, the Board and its Committees undertook an
externally facilitated evaluation conducted by Independent
Audit
1
, details of which are set out in the report on pages 128 and
129. I am pleased that the review concluded that the Board and
its Committees continue to operate effectively. The Board will
continue to address the recommended areas of focus over the
coming year.
Board appointment
During 2021, the Group Nomination and Governance Committee
oversaw the process for recruiting a new Non-Executive Director
and I am pleased that Simon Walker joined the Board at the start
of the year, bringing significant experience in mortgages and
risk management. He will be seeking election at the 2022 Annual
General Meeting (AGM). All other members of the Board will be
seeking re-election at the AGM.
Engaging with stakeholders
The Board is committed to maintaining effective engagement
and active dialogue with its stakeholders. Full details can be
found on page 124.
The Investor Relations function continues to assist the Board
in developing a programme of meetings and presentations to
both institutional and private shareholders, details of which are
also set out in the report that follows. Shareholders have an
opportunity to further engage with us at the AGM which will be
held at our offices at 90 Whitfield Street, Fitzrovia, London W1T
4EZ on 12 May 2022 at 11am.
Further details are set out in the Notice of AGM.
David Weymouth
Chairman
17 March 2022
1. Independent Audit has no other connection with the Company or individual
Directors.

121
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The Board recognises that good
corporate governance is fundamental
to the sustainable execution of the
Company’s strategy in line with
evolving stakeholder expectations.
David Weymouth
Chairman
17 March 2022
Corporate Governance Statement
UK Corporate Governance Code
2018 (the Code) Compliance
Statement
During 2021, the Company applied
all the principles and complied with
all the provisions of the Code. The
Corporate Governance Report and
the table on this page illustrates how
we have applied the Code principles
and complied with the provisions. The
Code is available at www.frc.org.uk.
Board Leadership and Company Purpose Page 122 to 124
A Board effectiveness and activities 123
B Purpose, culture and values 123
C Risk management and controls 123
D Stakeholder engagement 124
E Workforce policies and practices 124
Division of Responsibilities Page 125 to 126
F Board roles 125 and 126
G Independence 126
H Time commitment and conflicts of interest 126
I Board resources 127
Composition, Succession and Evaluation Page 128 to 133
J Appointments and succession plans 128
K Board composition 128
L Board performance review 128 and 129
Audit, Risk and Internal Control Page 134 to 143
M Auditor independence and effectiveness 139
N Review of Annual Report 136
O Risk management and internal control 138 to 139
Remuneration Page 144 to 163
P Annual Report on Remuneration 144 to 146
Q Determining the Remuneration Policy 147 to 153
R 2021 performance outcomes 154 to 163

122
OSB GROUP PLC Annual Report and Accounts 2021
The role and structure of the Board
The Board of Directors (the Board) is responsible for the
long-term sustainable success of the Company and provides
leadership to the Group. The Board focuses on generating value
for shareholders by setting strategy, monitoring performance
and ensuring that appropriate systems, controls and resources
are in place to enable the Company to meet its objectives whilst
safeguarding the interests of stakeholders and maintaining
effective corporate governance. The Board continued to focus
on integration matters for the first half of the year as well as
COVID-19, matters relating to ESG; and ensuring that the Group
contributes to wider society. The activities undertaken by the
Board during the year are set out on page 123. The Board has
established a number of Committees, as indicated in the chart
on page 54. Each have their own terms of reference, which
are reviewed at least annually. Details of each Committee’s
activities during 2021 are shown in the Group Nomination and
Governance, Group Audit, Group Risk, Group Models and
Ratings, Board Capital and Funding, Board Integration and
Directors’ Remuneration reports on pages 130 to 163.
The Board retains specific powers in relation to the approval of
the Group’s strategic aims, policies and other matters, which
must be approved by it under legislation or the Articles. These
powers are set out in the Board’s written terms of reference
and Matters Reserved to the Board, which are reviewed at
leastannually.
Directors
The Directors who served during the year are listed in the table
below. In addition, Simon Walker was appointed to the Board on
4 January 2022.
The Board currently consists of nine Directors; the Chairman,
two Executive Directors (being the Chief Executive Officer (CEO)
and Chief Financial Officer (CFO)) and six independent Non-
Executive Directors (NEDs). The biographies of the Directors can
be found on pages 116 and 117.
Board meetings and attendance
The Board met 15 times during the year, which was more than
usual; these related to a number of reasons including the potential
fraudulent activity by a third party on a funding line provided by
the Group. The Board has a formal meeting schedule with ad hoc
meetings called as and when circumstances require. There is an
annual calendar of agenda items to ensure that all matters are
given due consideration and are reviewed at the appropriate point
in the regulatory and financial cycle. The Board has established a
number of Committees as shown in the table below. The table also
shows each Director’s attendance at the Board and Committee
meetings they were eligible to attend in 2021.
Corporate Governance Report (Continued)
Board leadership andpurpose
Attendance at meetings of the Board Capital and Funding Committee are not included due to its transactional nature.
Director Board
Group Audit
Committee
1
Group
Remuneration
Committee
Group
Nomination
and
Governance
Committee
Group Risk
Committee
1
Board
Integration
Committee
David Weymouth (Chairman) 15/15 n/a 7/7 5/5 n/a 4/4
Graham Allatt 14/15 8/8 n/a n/a 7/7 n/a
Andy Golding 15/15 n/a n/a n/a n/a 3/4
Noël Harwerth 14/15 7/8 7/7 5/5 7/7 n/a
Sarah Hedger 15/15 8/8 7/7 n/a n/a 4/4
Rajan Kapoor 15/15 8/8 7/7 n/a 7/7 4/4
Mary McNamara 15/15 n/a 7/7 5/5 n/a n/a
April Talintyre 15/15 n/a n/a n/a n/a n/a
1. Two additional joint meetings of the Group Risk Committee and Group Audit Committee were held in January and July 2021.
Strategy and management
} Overall strategy of the Group.
} Approval of long-term objectives.
} Approval of annual operating and capital expenditure
budgets.
} Review of performance against strategy and objectives.
Structure and capital
} Changes to the Group’s capital or corporate structure.
} Changes to the Group’s management and control structure.
Risk management
} Overall risk appetite of the Group.
} Approval of the Strategic Risk Management Framework
(SRMF).
Financial reporting and controls
} Approval of financial statements.
} Approval of dividend policy.
} Approval of significant changes in accounting policies.
} Ensuring maintenance of a sound system of internal
control and risk management.
Remuneration
} Determining the Remuneration Policy for the Executive
Directors and senior management (including Material Risk
Takers).
} Overseeing the introduction of new share incentive plans
or major changes to existing plans.
Corporate governance
} Review of the Group’s overall governance structure.
} Determining the independence of Directors.
Board members
} Changes to the structure, size and composition of the Board.
} Appointment or removal of the Chairman, Chief Executive
Officer, Senior Independent Director and Company
Secretary.
Other
} The making of political donations.
} Reviewing the overall levels of insurance for the Group.
A summary of the matters reserved for decision by the board is
set out below.

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Overview Strategic Report Governance Financial Statements Appendices
All Directors are expected to attend all meetings of the Board,
any Committees of which they are members and to devote
sufficient time to the Group’s affairs to fulfil their duties as
Directors. Where Directors are unable to attend a meeting,
they are encouraged to submit any comments on the meeting
materials in advance to the Chair to ensure that their views are
recorded and taken into account during the meeting. Graham
Allatt provided comments for the meeting he was not able to
attend. An additional Board meeting was held in December 2021
at short notice.
As a result of the ongoing situation with COVID-19, the majority
of meetings were held virtually via video conference, with face-
to-face meetings gradually reintroduced across split sites in
Chatham, London and Wolverhampton following the easing of
social distancing measures imposed by the UK Government.
Key Board activities during the year included:
} Development of Strategy.
} Monitor and assess culture.
} Approve the new Purpose, Vision and Values and Group re-
branding.
} Regular updates relating to COVID-19 and return to office.
} Risk monitoring and review.
} Response to potential funding line fraud.
} Governance and compliance.
} External affairs and competitor analysis.
} Talent review/succession planning including the appointment
of a new NED.
} Annual, interim and quarterly reporting.
} Customer/brand/product review.
} Policy review and update.
} Investment proposals.
} Climate change developments.
} ESG strategy.
} Charitable and Community initiatives.
Purpose, Vision and Values
The Board oversaw the launch of the Group’s new Purpose, Vision
and Values. The Board sets the tone from the top in relation to
conduct and culture and acts with integrity.
The Board assesses and monitors culture to ensure that it is
aligned with the Group’s Purpose, Values and strategy through
regular updates from management, interactions with employees
(informally and through OneVoice), reviewing and discussing
the results of the Financial Services Culture Board (FSCB) and
Best Companies to Work For surveys. A representative from the
FSCB was invited to explain the results to the Directors, whether
they are in line with other firms of a similar size and provide
independent observations for potential areas of focus. As a
result, an employee engagement plan is being developed. The
Board also annually reviews regretted leaver analysis for signs of
poor culture. The Board is satisfied that the Purpose, Values and
strategy of the Group are aligned with culture but recognises
that this is a developing area. Further details are provided on
page 17.
The Culture Working Group was established during 2021, with
the main objective of reviewing culture action plans in order
to identify any key themes and systemic issues, as well as to
identify and support conduct training and other development
resources to enable employees to successfully meet the required
behaviours that support the Group’s Values. The Culture Working
Group is a sub-committee of the newly-formed ESG Committee.
During 2021, the Board also received regular updates from
management regarding the levels of engagement of employees,
particularly as a result of the ongoing situation with COVID-19
and the return to office approach following the easing of social
distancing measures imposed by the UK Government. The Board
oversees charitable and community activities undertaken by
employees. Further details of the Board’s engagement with its
stakeholders and the community is included on pages 16 to 18.
Risk management and internal control
The Board retains ultimate responsibility for setting the Group’s
risk appetite and ensuring that there is an effective SRMF
to maintain levels of risk within the risk appetite. The Board
regularly reviews its procedures for identifying, evaluating and
managing risk, acknowledging that a sound system of internal
control should be designed to manage rather than eliminate the
risk of failure to achieve business objectives.
The Board has carried out a robust assessment of the principal
risks facing the business including those that would threaten
its business model, future performance, solvency or liquidity.
Further details are contained in the Viability Statement on pages
74 and 75.
The Board has established a Group Risk Committee to which
it has delegated authority for oversight of the Group’s risk
appetite, risk monitoring and capital management. The Group
Risk Committee provides oversight and advice to the Board
on current risk exposures and our future risk strategy. The
Committee also assists the Board in fostering a culture within
the Group which emphasises and demonstrates the benefits of a
risk-based approach to internal control and management.
Further details of the Group’s risk management approach,
structure and principal risks are set out in the Group Risk
Committee Report on pages 141 to 143.
The Board has delegated authority to the Group Audit
Committee for reviewing the effectiveness of the Company’s
internal control systems including oversight of financial reporting
processes. The Group Audit Committee is supported by the
Internal Audit function in discharging this responsibility and
receives regular reports from the Group Chief Internal Auditor
regarding the overall effectiveness of the internal control system
within the Group. The Group Audit Committee also receives
reports from the external auditor on control matters. Details of
the review of the effectiveness of the Company’s internal control
systems are set out in the Group Audit Committee Report on
pages 138 to 139.
Control environment
The Group is organised along the ‘three lines of defence’ model
to ensure at least three stages of independent oversight to
protect the customer and the Group from undue influence,
conflict of interest and poor controls.
The first line of defence is provided by the operational business
lines which identify, measure, assess and control risks through
the day-to-day activities of the business within the frameworks
set by the second line of defence. The second line of defence
is provided by the Risk, Compliance and governance functions
which include the Board and Group Executive Committee. As
noted in this report, the Board sets the Company’s risk appetite
and is ultimately responsible for ensuring an effective SRMF is
in place. The Compliance function maintains the ‘key controls

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OSB GROUP PLC Annual Report and Accounts 2021
framework’ which tracks and reports on key controls within the
business to ensure compliance with the main provisions of the
Financial Conduct Authority (FCA) and the Prudential Regulation
Authority (PRA) handbooks. Policy documents also include key
controls that map back to the key controls framework. The third
line of defence is the Internal Audit function.
The Board is committed to the consistent application of
appropriate ethical standards and the Conduct Risk Framework
sets out the basic principles to be followed to ensure ethical
considerations are embedded in all business processes and
decision-making forums. The Group also maintains detailed
policies and procedures in relation to the prevention of bribery
and corruption, as well as a Whistleblowing Policy.
Stakeholder engagement
The Board is committed to maintaining effective engagement
and active dialogue with its stakeholders and ensuring that
stakeholder views and interests are a key consideration in the
Board’s decision making. This year, the Board continued to focus
on external and internal developments in relation to climate
change, including discussions around the Group’s climate
strategy and goals, as well as oversight of progress towards the
disclosure requirements of TCFD. The Board and its Committees
spent time on a broad range of sustainability considerations,
including as part of strategy discussions and regular ESG
updates recognising that this is a growing area of importance for
stakeholders. The Board and Group Nomination and Governance
Committee have continued to monitor diversity and inclusion,
both as part of ongoing board succession planning and in
relation to activities aimed at developing a diverse and inclusive
talent pipeline below Board level. Further information relating to
Diversity can be found on pages 131 and 132.
Full details of how the Board engages with the Group’s key
stakeholders are included on pages 16 to 19.
Relations with shareholders
Dialogue with shareholders
The Group has a dedicated Investor Relations function which
maintains regular, open and transparent dialogue with
institutional investors and sell-side analysts. The team has
access to the CEO and CFO who are available for meetings
with shareholders and frequently attend industry conferences.
Twice each year, post year-end and half-year results, the CEO
and the CFO participate in roadshows and meetings with larger
investors. However, due to the restrictions imposed by the UK
Government in response to COVID-19, such meetings have been
held via video conference. The Board is updated on shareholder
expectations following these meetings to ensure the strategy is
aligned with those expectations.
In 2021, the Investor Relations team responded to a range
of enquiries and points of feedback raised by shareholders,
including in relation to ESG matters and capital management.
The Board’s primary contact with institutional shareholders and
sell-side analysts is through the CEO and the CFO. The Board is
also regularly presented with shareholders’ feedback, analysts’
recommendations and market views via Investor Relations
updates, topics which are frequently on the Board agenda.
The Chairs of each Board Committee are available to engage
with shareholders on any significant matters that relate to their
areas of responsibility.
Further details can be found in the Section 172 Statement on
pages 17 and 18.
Annual General Meeting
Our AGM will be held at our offices at 90 Whitfield Street,
Fitzrovia, London W1T 4EZ on 12 May 2022 at 11am. Where
possible, the Chairs of each of the Committees of the Board will
be present to answer questions put to them by shareholders. The
Annual Report and Accounts and Notice of the AGM will be sent
to shareholders at least 20 working days prior to the date of the
meeting.
Shareholders are encouraged to participate in the AGM process
and all resolutions will be proposed and voted on at the meeting
on an individual basis by shareholders or their proxies. Voting
results will be announced and made available on the Company’s
website, www.osb.co.uk. At the 2021 AGM, all resolutions were
passed with more than 80% of votes in favour.
Shareholders may require the Directors to call a general meeting
other than an AGM as provided by the Companies Act 2006.
Requests to call a general meeting may be made by members
representing at least 5% of the paid-up capital of the Company
as carries the right of voting at general meetings of the Company
(excluding any paid-up capital held as treasury shares). A
request must state the general nature of the business to be dealt
with at the meeting and may include the text of a resolution
that may properly be moved and is intended to be moved at the
meeting. A request may be in hard copy form or in electronic
form and must be authenticated by the person or persons
making it. A request may be made in writing to the Company
Secretary to the registered office or by sending an email to
company.secretariat@osb.co.uk. At any general meeting
convened on such request, no business shall be transacted,
except that stated by the requisition or proposed by the Board.
Workforce policies and practices
The Board is supported by its Committees to ensure that
workforce policies and practices are consistent with the
Company’s core values and support its long-term sustainable
success. The Board monitors and assesses culture to ensure
it is aligned to the Group’s continued commitment to treating
customers fairly, carrying out business with integrity and
preventing bribery, corruption, fraud or the facilitation of tax
evasion and modern slavery. The Board, with the support of its
Committees, approves key policies and practices which impact
the workforce and drive their behaviours. Training is provided
to employees to ensure the policies are embedded within the
culture. Further details of workforce policies and practices are
included on pages 95 to 103.
Whistleblowing
The Group has established procedures by which employees may,
in confidence, raise concerns relating to possible improprieties
in matters of financial reporting, financial control or any
other matter. The Group Whistleblowing Policy applies to all
employees and is benchmarked against industry standards. The
Group Audit Committee is responsible for monitoring the Group’s
whistleblowing arrangements and the policy. The Group Audit
Committee regularly reports to the Board on its activities.
An internal assurance review of whistleblowing was undertaken
during 2021 and the Group is confident that the arrangements
are effective, facilitate the proportionate and independent
investigation of reported matters and allow appropriate follow-
up action to be taken. Further details are provided in the Group
Audit Committee Report on page 139.
Corporate Governance Report (Continued)

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Overview Strategic Report Governance Financial Statements Appendices
Roles of the Chairman and Chief Executive Officer
The roles of Chairman and CEO are distinct and held by different people. There is a clear division of responsibilities, which has been
agreed by the Board and is formalised in a schedule of responsibilities for each.
The Chairman, David Weymouth, was independent on appointment. He leads the Board and is responsible for its overall effectiveness
and directing the Group. He ensures that the Board has the right mix of skills, experience and development so that it can focus on
the key issues affecting the business and for leading the Board and ensuring it acts effectively. Andy Golding, as CEO, has overall
responsibility for managing the Group and implementing the strategies and policies agreed by the Board. A summary of the key areas
of responsibility of the Chairman and CEO and how these have been discharged during the year, are set out below.
Chairman’s responsibilities Activities carried out in 2021
Chairing the Board and general meetings
of the Company.
David Weymouth chaired the majority of Board meetings held during 2021,
including the AGM. He was not able to chair one meeting due to a voice-related
ailment.
Setting the Board agenda and ensuring
that adequate time is available for
discussion of all agenda items.
The Chairman liaised with the Company Secretary to set the annual calendar of
Board business and the agenda for each meeting. Time is allocated for each item of
business at meetings.
Promoting the highest standards
of integrity, probity and corporate
governance throughout the Company.
The Board received regular updates from its Committees on changes in corporate
governance and its application to the Company.
Ensuring that the Board receives
accurate, timely and clear information in
advance of meetings.
The Chairman, in liaison with the Company Secretary and the CEO, agreed the
information to be distributed to the Board in advance of each meeting.
Promoting a culture of openness and
debate by facilitating the effective
contribution of all NEDs. Ensuring
constructive relations between Executives
and NEDs and the CEO in particular.
The Chairman ran meetings in an open and constructive way, encouraging
contribution from all Directors and regularly met with NEDs without management
present so that any concerns could be expressed. The Chairman adapted his
approach to ensure that virtual meetings were conducted in a manner that allowed
all Directors to participate fully. An external evaluation of the Board concluded
that the Board was led by a well-respected and hard-working Chairman who was
insightful, strategic and fostered a positive and inclusive atmosphere within the
boardroom.
Regularly considering succession
planning and the composition of the
Board.
The Board received regular updates from the Group Nomination and Governance
Committee. Details of the Committee’s activities are explained in the Group
Nomination and Governance Committee Report on pages 130 to 133.
Ensuring training and development needs
of all Directors are met and that all new
Directors receive a full induction.
The Chairman, in liaison with the Company Secretary, has reviewed the Directors’
training requirements. Details of training held during the year are given on page 127.
Ensuring effective communication with
shareholders and stakeholders.
The Chairman, along with other members of the Board, are available should any
shareholders or other key stakeholders wish to speak to them. Our shareholders did
not requested any additional meetings during the year.
Chief Executive Officer’s responsibilities
Andy Golding’s responsibilities as CEO are to ensure that the Group operates effectively at strategic, operational and administrative
levels. He is responsible for all the Group’s activities; he provides leadership and direction to encourage others to effect strategies
agreed by the Board; channels expertise, energy and enthusiasm; builds individual capabilities within the team; develops and
encourages talent within the business; identifies commercial and business opportunities for the Group, building strengths in key areas;
and is responsible for all commercial activities of the Group, liaising with regulatory authorities where appropriate. He is responsible
for the quality and financial well-being of the Group, represents the Group to external organisations and builds awareness of the
Group externally.
In addition, Andy has a specific focus on the delivery of integration objectives, providing leadership and direction in response to
COVID-19 and its impact on the business and employees throughout 2021 and beyond, as well as all matters relating to ESG strategy.
An experienced Group Executive team, comprising specialists in finance, banking, risk, operations, internal audit, legal and IT matters,
assist the CEO in carrying out his responsibilities. The biographies for the Group Executive team are set out on pages 118 and 119.
Division of responsibilities

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OSB GROUP PLC Annual Report and Accounts 2021
Senior Independent Director
Noël Harwerth is the Senior Independent Director (SID). The
SID’s role is to act as a sounding board for the Chairman and
to support him in the delivery of his objectives. This includes
ensuring that the views of all other Directors are communicated
to, and given due consideration by, the Chairman. In addition,
the SID is responsible for leading the annual appraisal of the
Chairman’s performance.
The SID is also available to shareholders should they wish to
discuss concerns about the Company, other than through the
Chairman and CEO.
Group Executive Committee
The CEO chairs the Group Executive Committee, whose members
also include the CFO, Group Chief Operating Officer, Group
Chief Risk Officer (CRO), Group General Counsel and Company
Secretary, Group Commercial Director, Group Chief Information
Officer, Group Chief Credit and Compliance Officer, Group
Managing Director for Mortgages, Group Managing Director
for Savings and the Group Chief Internal Auditor. The Group
Executive Committee is supported by a number of Management
Committees. The purpose of the Group Executive Committee is
to assist the CEO in the performance of his duties, including:
} The development and implementation of the strategic plan as
approved by the Board.
} The development, implementation and oversight of a strong
operating model that supports the strategic plan.
} The development and implementation of systems and controls
to support the strategic plan.
} To review and oversee operational and financial performance.
} To prioritise and allocate the Group’s resources in accordance
with the strategic plan.
} To oversee the development of a high-performing senior
management team.
} To oversee the customer proposition and experience to ensure
consistency with the Group’s obligation to treat customers
fairly.
} To oversee the appropriate protection and control of private
and confidential data.
} To review and oversee the key and strategic business risks.
} To oversee how the Purpose, Vision and Values are being
embedded.
} To implement the integration of CCFS, including overseeing
the Risk and Compliance functions, with a view to ensuring
the effective management of risks across the individual
entities and on an aggregated basis.
The members of the Group Executive Committee are also
members of the ESG Committee, which was established to
provide oversight of the Group’s management of ESG matters
and compliance with relevant legal and regulatory requirements,
including applicable rules, principles of corporate governance
and industry standards.
The areas of focus for the Group Executive Committee during the
year included:
} COVID-19.
} Business review.
} Capital and funding.
} Human resources and succession planning.
} Governance, control and risk environment – current and
forward looking.
} Integration.
} Monitoring target operating model progress.
} Culture – Purpose, Vision and Values.
} ESG matters including climate change.
Company Secretary
The Company Secretary, Jason Elphick, plays a key role within
the Company, advising on good governance and assisting the
Board to discharge its responsibilities, acting with integrity
and independence to protect the interests of the Company,
its shareholders and employees of the Group. Jason advises
the Company to ensure that it complies with all statutory
and regulatory requirements and he works closely with the
Chairman, CEO and Chairs of the Committees of the Board so
that Board procedures (including setting agendas and the timely
distribution of papers) are complied with and that there is a good
communication flow between the Board, its Committees, senior
management and NEDs. Jason also provides the Directors with
advice and support, including facilitating induction programmes
and training, in conjunction with the Chairman.
Balance and independence
The Board comprises six NEDs, the Chairman and two Executive
Directors. All of the NEDs, including the Chairman, have been
determined by the Board to be independent in character and
judgement and free from relationships or circumstances which
may affect, or could appear to affect, the relevant individual’s
judgement. The independence of the NEDs is reviewed
continuously, including a formal annual review. Any NED who
does not meet the independence criteria will not stand for
election or re-election at the AGM.
Non-Executive Directors’ terms of appointment and
timecommitment
NEDs are appointed for terms of three years, subject to annual
re-election by shareholders. The initial term may be renewed
up to a maximum of three terms (a total of nine years). The
terms of appointment of NEDs specify the amount of time they
are expected to devote to the business, which is a minimum
of two and a half days per month, calculated based on the
time required to prepare for and attend Board and Committee
meetings, the AGM, meetings with shareholders and training.
NEDs are also committed to working additional hours as may be
required in exceptional circumstances, such as COVID-19.
NEDs are required to confirm annually that they continue to have
sufficient time to devote to the role.
Corporate Governance Report (Continued)

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Conflicts of interest
The Company’s Articles set out the policy for dealing with
Directors’ conflicts of interest and are in line with the Companies
Act 2006. The Articles permit the Board to authorise conflicts and
potential conflicts, as long as the potentially conflicted Director
is not counted in the quorum and does not vote on the resolution
to authorise the conflict.
Directors are required to complete an annual confirmation
including a fitness and propriety questionnaire, which requires
declarations of external interests and potential conflicts. In
addition, all Directors are required to declare their interests in
the business to be discussed at each Board and Committee
meeting. The interests of new Directors are reviewed during the
recruitment process and authorised, if appropriate, by the Board
at the time of their appointment. The Group Nomination and
Governance Committee reviews conflicts of interest relating to
Directors at least annually; periodic reviews are also undertaken
as required. The Group has adopted a Conflicts of Interest
Policy, which includes a procedure for identifying potential
conflicts of interest within the Group.
No Director had a material interest in any contract of
significance in relation to the Group’s business at any time
during the year or at the date of this report.
Board resources
Training and development
The Chairman ensures that all Directors receive a tailored
induction on joining the Board, with the aim of providing a
new Director with the information required to allow him or her
to contribute to the running of the Group as soon as possible.
The induction programme is facilitated and monitored by the
Company Secretary to ensure that all information provided is
fully understood by a new Director and that any queries are
dealt with. Typically, the induction programme will include
a combination of key documents and face-to-face sessions
covering the governance, regulatory and other arrangements of
the Group.
As senior managers, under the Senior Managers Regime
operated by the PRA and FCA, all Directors have had to maintain
the skills, knowledge and expertise required to meet the demands
of their positions of ‘significant influence’ within the Group. As
part of the annual fitness and propriety assessment, Directors
are required to complete a self-certification that they have
undertaken sufficient training during the year to maintain their
skills, knowledge and expertise and to make declarations as to
their fitness and propriety. The Company Secretary supports
the Directors to identify relevant internal and external courses
to ensure that Directors are kept up to date with key regulatory
changes, their responsibilities as senior managers and other
matters impacting the business.
Information and support
The Company Secretary and the Chairman agree an annual
calendar of matters to be discussed at each Board meeting to
ensure that all key Board responsibilities are discharged over the
year. Board agendas are then distributed with accompanying
detailed papers to Directors in advance of each Board and
Committee meeting. These include reports from Executive
Directors and other members of senior management. All Directors
have direct access to senior management should they require
additional information on any of the items to be discussed. The
Board and Group Audit Committee also receive regular and
specific reports to allow the monitoring of the adequacy of the
Group’s systems and controls.
The information supplied to the Board and its Committees is kept
under review and formally assessed on an annual basis as part
of the Board evaluation exercise to ensure it is fit for purpose and
that it enables sound decision-making.
There is a formal procedure through which Directors may obtain
independent professional advice at the Group’s expense. The
Directors also have access to the services of the Company
Secretary as described on page 126.
Directors’ indemnities
The Articles provide, subject to the provisions of UK legislation,
an indemnity for Directors and Officers of the Group in respect
of liabilities they may incur in the discharge of their duties or in
the exercise of their powers, including any liabilities relating to
the defence of any proceedings brought against them, which
relate to anything done or omitted, or alleged to have been done
or omitted, by them as Officers or employees of the Group.
Directors’ and Officers’ Liability Insurance cover is in place in
respect of all Directors.
Directors’ powers
As set out in the Articles, the business of the Company is
managed by the Board, which may exercise all the powers of the
Company. In particular, save as otherwise provided in company
law or in the Articles, the Directors may allot (with or without
conferring a right of renunciation), grant options over, offer,
or otherwise deal with or dispose of shares in the Company to
such persons at such times and generally on such terms and
conditions as they may determine. The Directors may at any time
after the allotment of any share but before any person has been
entered in the Register as the holder, recognise a renunciation
thereof by the allottee in favour of some other person and
may accord to any allottee of a share, a right to effect such
renunciation upon and subject to such terms and conditions as
the Directors may think fit to impose. Subject to the provisions of
company law, the Company may purchase any of its own shares
(including any redeemable shares).
Composition, succession and evaluation

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OSB GROUP PLC Annual Report and Accounts 2021
Board appointments and succession plans
The Board may appoint a Director, either to fill a vacancy
or as an addition to the existing Board. All appointments to
the Board are made on the recommendation of the Group
Nomination and Governance Committee and are subject to a
formal, rigorous and transparent procedure. Succession plans
are also considered by the Group Nomination and Governance
Committee. Appointments and succession plans are based on
merit and objective criteria and, within this context, promote
diversity of gender, social and ethnic backgrounds, cognitive
and personal strengths. The Group Nomination and Governance
Committee Report on pages 130 to 133 provides further details
on the process for appointing Board Directors, succession
planning and diversity.
Simon Walker was appointed as a NED on 4 January 2022 and
will stand for election at the AGM on 12 May 2022. All other
Directors will be put forward for re-election at the AGM. In
addition to any power of removal conferred by the Companies
Act, any Director may be removed by special resolution, before
the expiration of his or her period of office and, subject to the
Articles, another person who is willing to act as a Director may be
appointed by ordinary resolution in his or her place.
Board composition
The size and composition of the Board is kept under review
by the Group Nomination and Governance Committee and
the Board to ensure that an appropriate balance of skills and
experience are represented. Following an external skills review
undertaken in 2020 and subsequent appointment of Simon
Walker, the Board is satisfied that its current composition
allows it to operate effectively and that all Directors are able
to bring specific insights and make valuable contributions to
the Board, due to their varied commercial backgrounds. The
NEDs provide constructive challenge to the Executives and the
Chairman ensures that the views of all Directors are taken into
consideration in the Board’s deliberations.
The Directors’ biographies can be found on pages 116 and 117.
Board evaluation
The Board undertakes an evaluation of its performance and
that of its Committees and individual Directors annually. An
externally-facilitated evaluation of the Board was conducted
during 2021 by Independent Audit, which also carried out
the previous external evaluation in 2019; a different reviewer
conducted each of the Board evaluations.
Independent Audit’s review of the Board comprised reviewing
internal documents; conducting interviews with members of the
Board and Group Executive Committee; observing Board and
Committee meetings; and preparing a comprehensive report,
which was shared and discussed with the Board.
Independent Audit concluded that the Board appeared to be
working well together with a range of strengths; and is made up
of a diverse group of NEDs with a range of complementary and
relevant expertise. The NEDs are diligent and engaged and the
Executives value their insight and challenge. The report noted
that the Board was led by a well-respected and hard-working
Chairman who was insightful, strategic and fostered a positive
and inclusive atmosphere within the boardroom. The Chairman
has built a close working relationship with the CEO, which was
based on openness and trust. Relationships on the Board were
good with a strong sense of common purpose.
The report outlined that all Board members commended the CEO
for his strong leadership and the way in which he, along with the
Group Executive team, have successfully built the business over
the years. NEDs have good visibility of a range of Executives in
the boardroom and they appreciate the open and transparent
tone set by the Group Executive team.
The Board focuses well on its main areas of responsibility
with good time spent and attention paid to future strategy,
customers, investors, people and culture, risk management,
financial oversight and financial controls. The NEDs felt that the
Executives reacted well to the pandemic, working hard to steer
the business through the multiple challenges faced. The NEDs
also responded well, making themselves available and moving to
shorter, more frequent online meetings. The Committees function
well and all benefit from diligent and skilled Chairs.
As part of its evaluation, Independent Audit made some
suggestions, as outlined in the table on page 129. Independent
Audit was satisfied that no individual or group of Directors
dominated the discussions or had undue influence in the
decision-making process.
Corporate Governance Report (Continued)
Composition, succession and evaluation (Continued)

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Suggestion Action proposed
Once the strategy is agreed, develop a
clear set of Key Performance Indicators
(KPIs) to help the Board monitor progress
and ensure the agenda is focused on
strategic themes.
Group Strategy was approved by the Board. Following this, a set of relevant
monitoring KPIs was developed and regular updates are provided to the Board.
Develop a coherent ESG action plan as
part of the overall strategy.
An ESG action plan has been developed by the ESG Sustainability Director and his
team. The Group Audit Committee was presented with an outline of the Group’s
TCFD readiness and a similar update was provided to the Group Risk Committee on
climate risk. Sarah Hedger was appointed as the ESG Champion. A description of
the overall strategy for ESG is being refined for presentation to the Board.
Continue to work on a succession
and development plan for Executives
and invite all NEDs to sit on the Group
Nomination and Governance Committee.
All NEDs will be invited to attend a Group Nomination and Governance Committee
and a ‘People and Culture’ Board meeting in 2022. Succession planning will be
a regular Group Nomination and Governance Committee agenda item in 2022.
An external consultancy firm will be appointed in 2022 to assist with long-term
succession planning.
Organise occasional sessions with the
CEO to brief NEDs about capacity and
succession planning within the Group
Executive team.
All NEDs will be invited to a dedicated Group Nomination and Governance
Committee and the CEO will also provide regular updates to the Board.
Continue to focus on the IT strategy and
transformation plan to simplify processes
and enhance operational resilience.
Simplification and transformation of the Group (including IT) is part of the Board’s
approved strategy.
Continue strengthening the risk
management framework and three lines
of defence model, building on the work
already undertaken.
The Group Chief Risk Officer has set out plans to further enhance the Group’s
Strategic Risk Management Framework, which will be subject to an external review
during 2022.
Develop a plan for engaging with the
workforce.
This is already addressed, partly through regular OneVoice meetings (four
scheduled each year) which are attended by Mary McNamara and other NEDs on
a rotational basis. A draft plan for engagement will be considered by the Group
Nomination and Governance Committee during the year. Company Secretariat will
also arrange for structured formal site visits for Simon Walker, who joined the Board
on 4 January 2022, and all existing NEDs will be invited to join these visits. Some
NEDs also engage with the workforce through mentoring employees.

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OSB GROUP PLC Annual Report and Accounts 2021
Group Nomination and Governance Committee Report
Dear Shareholder,
This report is presented to
you in my capacity as Chair
of the Group Nomination and
Governance Committee.
The Committee is responsible for leading the process for
the appointment of new members of the Board and provides
oversight and guidance to the Board on all matters of Corporate
Governance relating to the Group. This includes ensuring that:
} the Board sets the tone from the top in relation to the values,
ethics and culture of the Group leading to a sustainable
business;
} the Board, its Committees and the boards of the subsidiary
companies operate effectively and have an appropriate
balance of diversity, skills, experience, availability,
independence and knowledge of the Group to enable them to
discharge their respective responsibilities effectively; and
} the Group adheres to best practice in relation to Corporate
Governance in a manner that is proportionate to the size
and complexity of the Group, in line with the Code and the
requirements of the PRA and FCA.
Following the Committee’s focus in 2020 on the Board
skills assessment and subsequent resizing of the Board, the
Committee commenced the process for the appointment of a
new NED with the right skills to bolster Board succession options
and appointed Per Ardua
1
to assist with the process. Per Ardua
was tasked with providing a diverse list of candidates with
relevant experience and skills, in line with the Group Diversity
and Inclusion Policy. Following an extensive search and interview
process, the Committee submitted a recommendation to the
Board that Simon Walker be appointed as a new member of the
Board and its Committees. Simon Walker joined the Board on
4 January 2022. Following Simon’s appointment, and as at the
date of this report, the Board is comprised of 44% females and
continues to meet the requirements of the Parker Review and
Hampton-Alexander guidelines.
The Group has subscribed to the Women in Finance Charter,
an initiative to drive the representation of female employees
at senior levels across the financial services industry. An initial
three-year target had been set by the Group committing to
ensuring that 30% of all senior roles would be filled by females
by the end of 2020. As reported in last year’s report, the
Group narrowly missed the target with 29.8% of senior roles
being occupied by women, although this clearly demonstrated
the significant progress made in obtaining its three-year
commitment. The target has since been re-set and the
Committee agreed a new three-year commitment to the end of
2023 to achieve 33%, which is an important step. I am pleased to
confirm that current levels indicate that the Group has already
achieved its increased target with 32.3% of all senior roles being
undertaken by female employees.
In addition to NED recruitment, a number of other items were
also considered by the Committee during 2021, including the
Financial Services Culture Board 2021 Survey Results, Board
effectiveness, Board and Executive succession planning,
compliance with the Corporate Governance Code annual
review, as well as ESG matters such as updates on charitable
and community activities across the Group, the Culture Project,
diversity and inclusion initiatives, employee engagement for 2021
and the Gender Pay Gap Report.
Further details on areas considered by the Committee are
provided on the following pages.
David Weymouth
Chair of the Group Nomination and Governance Committee and
Chairman ofthe Board
17 March 2022
1. Per Ardua has no other connection with the Company or individual Directors.
Committee member
Meetings
attended
David Weymouth (Chair) 5/5
Noël Harwerth 5/5
Mary McNamara 5/5

131
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The main focus of the Committee
thisyear has been on the Board
skillsassessment and subsequent
resizing of the Board.
David Weymouth
Chair of the Group Nomination
andGovernance Committee
Membership and meetings
The Committee met a total of five times during 2021. The
members of the Committee are Noël Harwerth, Mary McNamara
and David Weymouth (Chair).
Responsibilities
The specific responsibilities and duties of the Committee are set
out in its terms of reference which are available on our website,
www.osb.co.uk.
Composition of the Board and its Committees
The Committee conducted a review of the composition of the
Group Audit, Group Remuneration and Group Risk Committees
and its own composition during 2021, carefully considering the
skills of the existing members and looking at any skills gaps
applicable to each Committee.
Following a Board skills assessment and subsequent resizing
of the Board, the Committee commenced the process for the
appointment of a new NED with the right skills to bolster Board
succession options. Per Ardua was tasked with providing a
diverse list of candidates with relevant experience and skills, in
line with the Group Diversity and Inclusion Policy. From the list
presented to the Committee, three candidates were interviewed
and the preferred candidate was chosen and recommended to
the Board for appointment. Simon Walker joined the Board on
4 January 2022.
Succession planning
The Committee considered both Board and Executive level
succession planning during 2021, including ways in which
existing skills could be developed further and any recent
additional skills, which it was felt would complement the Board
and its Committees.
Diversity and inclusion
The Group recognises and embraces the benefits of having a
diverse Board and workforce; and sees diversity at Board level as
an essential element in maintaining a competitive advantage. We
believe that a truly diverse Board and workforce will include and
make good use of differences in the skills, regional and industry
experience, age, background, race, gender and other distinctions
between people. The Board recognises that diversity is the key to
better decision-making and avoiding ‘group think’.
These differences are considered in determining the optimum
composition of the Board and, where possible, will be balanced
appropriately. All Board appointments are made on merit, in the
context of the skills, experience, independence and knowledge
which the Board as a whole requires to be effective.
Group Nomination and Governance Committee –
key responsibilities
} Review and oversee the structure, size and composition
of the Board (including the balance of skills, knowledge,
experience and diversity, including gender).
} Review and oversee the composition (including the skills,
knowledge, experience and diversity, including gender)
of Committees of the Board and succession planning
for chairs of the various Committees and the Senior
Independent Director.
} Ensure plans are in place for orderly succession planning
for Directors and other senior management and oversee
the development of a diverse pipeline for succession.
} Keep under review the leadership needs of the Group,
both Executive and Non-Executive.
} Identify and recommend for the approval of the Board,
candidates to fill Board vacancies as and when they arise.
} Monitor, oversee and keep the Board aware of strategic
corporate governance issues and changes affecting the
Company and the market in which it operates.
} Review whether Directors continue to meet the
independence criteria at least annually.
} Review annually the time required from NEDs.
} Review and approve changes to the Board’s Corporate
Governance guidelines.
} Review and recommend to the Board for approval the
Corporate Governance Report, for inclusion in the Annual
Report.
} Monitor developing trends, initiatives or proposals in
relation to legal developments, Board governance issues
and best corporate governance practice.

132
OSB GROUP PLC Annual Report and Accounts 2021
The Committee regularly reviews diversity initiatives including
its annual review of the Diversity and Inclusion Policy which
sets out the Board’s commitments in relation to diversity and
inclusion. These commitments include addressing behavioural
gender and ethnic bias in the executive search for Directors
and basing appointments on merit and objective criteria and,
within this context, promoting diversity of gender, social and
ethnic backgrounds, cognitive and personal strengths. The
policy also sets out the Board’s commitment to the Women in
Finance Charter and has introduced measurable objectives with
the Group committing to increase the percentage of female
employees in senior management positions within the Group’s
UK population to 33% by the end of 2023. Currently, 18% of the
Group Executive Committee and 44% of our Board are female.
One of the nine Directors is from an ethnic minority. The Board
recognises and embraces the benefits that diversity can bring;
diversity and inclusion at Board level is an essential element in
maintaining a competitive advantage.
Jason Elphick is the appointed Diversity and Inclusion Champion.
His role is to promote diversity initiatives such as our commitment
to those with a disability, mental health in the workplace and
unconscious bias training. The Diversity and Inclusion Working
Group continued to develop and deliver the Group’s Diversity
and Inclusion agenda in order to promote, champion and
encourage diversity, inclusion and equality within the workplace
in line with the Respect Others value. The Diversity and Inclusion
Working Group consists of volunteer representatives from
across the Group. A number of activities were hosted during the
year with attendance from members of the Board and Group
Executive Committee. The Diversity and Inclusion Working Group
reports to the ESG Committee, which in turn provides updates to
the Committee and the Board on all matters relating to diversity,
inclusion and equality.
As a result of all of the work undertaken by the Diversity and
Inclusion Working Group, the Group has been awarded a Talent
Inclusion and Diversity Evaluation Award (TIDE) achieving the
silver standard. The TIDE compares us to other companies in
our approach to Diversity and Inclusion and recognises all
of the collaborative work undertaken across the Group. The
report scores the Group across eight categories: workforce,
strategy and plan, leadership and accountability, recruitment
and attraction, training and development, other employment
practices, communication and engagement and procurement.
Our overall score is benchmarked against all of the other
participating organisations.
Further details relating to diversity and inclusion are set out on
pages 101 and 102.
Environmental, Social and Governance
The Committee monitored sustainability and ESG developments
relevant to the Group including consideration of points arising
from engagement with shareholders and other stakeholders in
these areas. ESG continues to be a key area for the Board and
its Committees and is expected to remain a focus in the coming
years.
The Committee recommended Sarah Hedger’s appointment as
ESG Champion to facilitate Board engagement on ESG matters.
An ESG Sustainability Director was also appointed to lead
the ESG Management team. This role involves attending and
presenting to relevant Committees on ESG issues. Board and
Committee discussions around ESG are informed by engagement
with shareholders and other stakeholders, legislative and
regulatory initiatives and wider market developments. Areas
of focus include sustainability strategy and targets (including
progress in the year and future plans), the impact of COVID-19
on the sustainability agenda, wider market themes and trends
including issues connected to COP26 and TCFD disclosures, on
which we report for the first time this year. The Committee will
continue to consider ESG and broader sustainability matters
in the year ahead and make recommendations to the Board as
necessary. Further information on the Group’s ESG initiatives is
included on pages 76 to 105.
The Committee reviewed changes in the regulatory landscape,
particularly the remit and composition of the Committees
and the operation of two banking licences within the Group.
The Committee remained satisfied that there are effective
arrangements in place.
Group Nomination and Governance Committee Report (Continued)

133
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Activities during 2021
In last year’s report, the Committee identified six key priorities.
A summary of actions taken and outcomes are set out in the table below.
Objective Action taken
Monitoring the application and
embedding of corporate governance in
the new Group.
A review of the Group’s compliance with the Corporate Governance Code was
carried out by the Company Secretariat and presented to the Committee. A similar
review will be undertaken prior to the publication of the 2021 Annual Report.
Overseeing the roll-out of the revised
Purpose, Vision and Values.
The results of the Culture Pulse Survey were presented to the Committee and
the results indicated that the new Purpose, Vision and Values had been well
received and were being regularly demonstrated across the Group. Training has
been aligned to the new Values and they have been incorporated into induction
materials.
Continuing the work on Board succession
planning – the current NED recruitment
process.
The Committee endorsed the appointment of Simon Walker as a NED, which was
subsequently approved by the Board.
The Committee also reviewed the skills and experience matrix of the Board
(including consideration of Board diversity) to ensure that the Board’s composition
was fit for purpose and to maintain an effective succession plan. Discussions are
continuing in relation to succession.
Overseeing the effective roll-out of the
new Diversity and Inclusion Working
Group and continued oversight/
involvement with the Workforce Advisory
Forum (OneVoice).
The Committee approved the revised Group Diversity and Inclusion Policy in May
2021, which was updated to incorporate the Diversity and Inclusion Working Group.
During the year, the Diversity and Inclusion Working Group promoted a wide range
of initiatives and events, details of which were presented to the Committee. Some
of the topics covered include: inequality in recruitment, World Health Day, World
Menopause Day, mental health training, PRIDE awareness and the use of pronouns.
External benchmarking was also carried out to test the effectiveness of the Group’s
diversity and inclusion activities.
Four OneVoice meetings were held during the year, which were well attended
by permanent members of the Forum and appointed employee representatives.
At least one member of the Board and Group Executive Committee was also
in attendance at each meeting. Topics discussed include; culture, diversity
and inclusion, employee morale, ESG matters and other matters of interest to
employees.
Bring together environmental, social and
governance initiatives and develop a
robust oversight framework.
The ESG Committee was established during the year, reporting directly to the
Group Executive Committee. Reports from the ESG Committee are shared with the
Board and relevant Board Committees.
The purpose of the ESG Committee is to support the Board in its oversight of the
Group’s strategy relating to ESG matters, coordinate various ESG activities across
the Group, facilitate stakeholder debate, track progress and monitor performance
of the Group’s ESG commitments.
Overseeing the development and
implementation of Executive succession
plans.
A detailed review of potential successors for the members of the Group Executive
Committee was presented to the Committee.
Priorities for 2022
} Continue to work on developing the Board and Group Executive Committee succession plans and invite all NEDs to attend such
meetings of the Committee.
} Oversee the development of a structured workforce engagement plan to build upon the engagement provided by employee forums,
including face-to-face engagement and informal visits.
} Organise occasional sessions with the CEO to brief NEDs on capacity and succession planning within senior teams.
} Continue to oversee the development of the ESG strategy and how it is being embedded throughout the Group.

134
OSB GROUP PLC Annual Report and Accounts 2021
Group Audit Committee Report
Dear Shareholder,
The Group Audit Committee report
for 2021 sets out how the Committee
has discharged its responsibilities and
satisfied itself on the integrity of the
Group’s financial statements for the
year ended 31 December 2021.
The Committee’s primary objective is to assist the Board in
overseeing the systems of internal control and external financial
and narrative reporting across the Group. The Committee
performs this role by ensuring effective external and internal
audit arrangements are in place, reviewing and monitoring
compliance assurance processes, overseeing fraud prevention
and whistleblowing procedures and monitoring the integrity of
the Group’s financial and regulatory disclosures.
The Committee’s areas of focus during the year included:
challenging management on accounting judgements and
estimates, in particular the calculation of expected credit losses
(ECL) and effective interest rate (EIR) accounting in accordance
with IFRS 9; considering the findings of the external independent
review into the funding lines business and ensuring these were
addressed; overseeing the Group’s ESG strategy to ensure
that a strong governance framework is in place to meet the
new Taskforce on Climate-related Financial Disclosure (TCFD)
requirements and other non-financial reporting requirements.
The Committee also considered the potential impact of, and led
the Group’s response to, the Department for Business, Energy
and Industrial Strategy’s (BEIS) consultation on ‘Restoring
trust in audit and corporate governance’. We welcome many
of these proposals, but urged that the final requirements
are proportionate and allow companies adequate time for
compliance.
The Committee has continued to work closely with the Group’s
external auditors and has carried out an assessment of their
independence and effectiveness. Regular updates were received
from Internal Audit and an external quality assessment of the
Internal Audit function was also completed. As Chair, I am
committed to ensuring that the Committee’s performance is kept
under review and further details of the Committee’s performance
evaluation is included within this report. I also work with the
CFO and Committee Secretary to ensure that the agenda
remains appropriate in light of regulatory changes and relevant
developments within the Group.
In addition to my role as Chair of this Committee, I act as
the Group’s Whistleblowers’ Champion and have overall
responsibility for the integrity, effectiveness and independence
of the Group’s policies and procedures on whistleblowing. I am
also available to meet with the Company’s investors on request
in accordance with the FRC Stewardship Code.
I would like to thank all Committee members for their diligent
contribution during 2021.
Rajan Kapoor
Chair of the Group Audit Committee
17 March 2022
Committee member
Meetings
attended
Rajan Kapoor (Chair) 8/8
Graham Allatt 8/8
Noël Harwerth 7/8
Sarah Hedger 8/8

135
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The Committee’s primary objective
isto assist the Board in overseeing
thesystems of internal control and
external financial and narrative
reporting across the Group.
Rajan Kapoor
Chair of the Group Audit Committee
Membership andmeetings
The Committee met eight times during the year. Two additional
joint meetings of the Group Risk and Group Audit Committees
were held in January and July 2021. The current members of
the Committee are Rajan Kapoor (Chair), Graham Allatt, Noël
Harwerth, Sarah Hedger and Simon Walker. The members are
all independent NEDs and details of their qualifications and
experience can be found on pages 116 and 117. Rajan Kapoor
served as Chair of the Group Audit Committee throughout the
year and has wide-ranging financial experience in the banking
industry, including recent and relevant financial experience as
required by the UK Corporate Governance Code 2018. Simon
Walker became a member of the Committee following his
appointment to the Board on 4 January 2022.
As a whole, the Committee has an appropriate balance of skills
and standing invitations to Committee meetings are extended to
the Chairman of the Board, Executive Directors, the Group Chief
Risk Officer, the Group Chief Internal Auditor and the external
audit partner, all of whom attend meetings as a matter of
practice. Other non-members may be invited to attend all or part
of any meeting, as and when appropriate.
Activities during 2021
The principal activities undertaken by the Committee during the
year are described below.
Viability and going concern
The Committee reviewed the current position of the Group, along
with principal and emerging risks; and assessed the prospects of
the Group before recommending the Group’s long-term viability
statement for approval by the Board. The Committee also
undertook a review, before recommending to the Board, that the
going concern basis should be adopted in preparing the annual
and interim financial statements. Further details are set out on
pages 74 to 75 and 166.
Alternative performance measures
The Committee provided oversight and challenge in relation
to the use of alternative performance measures (APMs) in the
Annual Report to ensure that these were applied consistently and
remained relevant. The Group presents APMs on an underlying
basis, alongside the statutory basis, which helps demonstrate
the performance of the Group on a consistent basis and enables
meaningful comparisons to prior years. See pages 246 to 248
forfurther details.
Group Audit Committee – keyresponsibilities
Internal control and risk management
} Review systems of internal financial control over financial
reporting to identify, assess and monitor financial risks
and other internal control and risk management systems.
} Review and approve systems and controls for the
prevention of bribery and procedures for detecting fraud
including conduct risk and related activities.
} Review the adequacy and effectiveness of anti-money
laundering systems and controls.
} Review the adequacy of the Group’s whistleblowing
arrangements and procedures.
Financial and non-financial reporting
} Review and recommend to the Board, the long-term
viability statement and the adoption of the going concern
basis for the preparation of the year-end financial
statements.
} Monitor the integrity of the financial statements, including
annual and interim reports, trading updates, Pillar 3
disclosures and any other formal announcements relating
to financial performance.
} Provide challenge and oversight on the consistency,
quality and appropriateness of significant accounting
policies and judgements and on the methods used to
account for significant or unusual transactions.
} Ensure compliance with all appropriate accounting
standards.
} Consider and recommend changes to accounting policies
to the Board.
} Review and challenge, where appropriate, all material
information included in the Annual Report and the
financial statements, such as the business review and the
corporate governance statements relating to the audit
and to risk management.
Internal and External Audit
} Review and monitor the effectiveness of the Group’s
internal and external audit arrangements.

136
OSB GROUP PLC Annual Report and Accounts 2021
As APMs are important measures of how the Group performed,
the Committee asked the external auditor, Deloitte, to provide
assurance on their computation. Deloitte was selected as
the Committee considered that they could perform the work
efficiently and economically. The Committee was satisfied
that this assignment did not affect Deloitte’s independence as
external auditor. A copy of Deloitte’s independent assurance
statement can be found on page 247.
Financial reporting and regulatory disclosures
The Committee’s review of financial reporting during the year
included the approval of the Annual Report and Accounts,
the Interim Results, quarterly trading updates and analysts’
presentations. The Committee also approved the Group’s Pillar
3 regulatory disclosures for publication on the Group’s website,
following a review of the governance and control procedures
around their preparation.
As part of its review, the Committee assessed management’s
application of key accounting policies, significant accounting
judgements and compliance with disclosure requirements to
ensure that these were consistent and appropriate to satisfy
the relevant requirements. In particular, the Committee
carefully considered the presentation of results on a statutory
and underlying basis to ensure transparency and consistency
throughout.
In addition, the Committee reviewed and approved the
underlying assumptions which formed the basis of IFRS
9 impairment calculations to ensure that they remained
appropriate for the year-end financial statements. The
Committee reviewed management’s assessment of whether the
continuing impact of the COVID-19 pandemic on the UK economy
and the Group’s business plans was an impairment assessment
trigger for the Group’s intangible assets and significant
investments in subsidiaries at the Company level.
Fair, balanced and understandable
The Committee considered, on behalf of the Board, whether
the 2021 Annual Report and Accounts taken as a whole are fair,
balanced and understandable and whether the disclosures are
appropriate. The Committee also considered whether the non-
financial information within the Annual Report was consistent
with the financial statements, the use of alternative performance
measures and associated disclosures.
Following its review, the Committee advised the Board that it is
satisfied that the Annual Report and Accounts is fair, balanced
and understandable; and provides the information necessary
for shareholders and other stakeholders to assess the Group’s
position and performance, business model and strategy in line
with section 172 requirements as outlined on pages 16 to 19.
Significant areas of judgement and estimates considered by
the Committee
The Committee considered management’s significant accounting
judgements and use of accounting policies in relation to the
interim and full-year results of the Group. In its assessment, the
Committee received reports from management and provided
challenge in relation to each area of significant judgement
and management’s recommended approach. The Committee
also sought the views of the external auditor on the accounting
treatment and judgements underpinning the financial
statements.
Group Audit Committee Report (Continued)
Significant issues considered How these were addressed by the Committee
Loan book expected credit
losses
The Committee received reports from management and challenged the approach to provisioning for
loan book ECLs.
The Committee consulted the Group’s economic advisers who identified macroeconomic scenarios
and proposed probability weightings. The Committee considered management’s proposals on how
probabilities attached to the economic scenarios and approved the final weightings utilised within
the Group’s impairment calculations.
The Group continued to utilise four scenarios; an upside, base case and two further downside
scenarios. The Group undertakes regular industry benchmarking of the economic scenarios,
weightings and the resulting overall coverage. These benchmarks, in addition to insight from the
Group’s economic advisers, support management in the selection and weighting of economic
scenarios.
The Committee reviewed the key assumptions and judgements to ensure that these appropriately
reflect the economic and social environment. The Group has ensured that the identification of
Significant Increases in Credit Risk remains appropriate, in addition to making adjustments for
model limitations due to either the impacts of, or government policy responses to, COVID-19.
The Committee is monitoring the administration of a third party following the potentially fraudulent
activity at one of the Group’s secured funding lines which resulted in a £20.0m impairment charge in
2020. The remaining exposure is immaterial to the Group.

137
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Significant issues considered How these were addressed by the Committee
Loan book acquisition
accounting and income
recognition
The Group has a history of purchasing acquired books including the Combination with CCFS, where
acquisition accounting is applied.
Acquired loan books are initially recognised at fair value with interest recognised at the EIR.
Significant judgement is required in calculating the EIR, using cash flow models, which include
assumptions on the likely macroeconomic environment, including House Price Index (HPI),
unemployment levels and interest rates, as well as loan level and portfolio attributes and history
used to derive prepayment rates, the probability and timing of defaults and the amount of incurred
losses at the time of acquisition. The EIRs on the CCFS book, due to the size of the book, along with
loan books purchased at significant discounts, are particularly sensitive to the prepayment and
default rates assumed, with the market price adjustment recognised over the expected life of the
loan books through the EIR. New defaults are modelled at zero loss (as losses will be recognised in
profit and loss as impairment losses) and therefore have the same impact on EIR as prepayments.
Incurred losses at acquisition are calculated using the Group’s collective provision model. The
Committee reviewed and challenged reports from management, before each reporting date, on
the approach taken. Particular focus was given to loan books where performance varied from
expectation. The Committee reviewed a comparison of actual cash flows to those assumed in the
cash flow models by book, to challenge management’s assessment of the need to update cash flow
projections and adjust carrying values accordingly. The Committee also reviewed management’s
assumptions for improved cash performance and recovery of interest and principal through the
extension of forbearance, in accordance with the Group’s collections policies, for loans that are
currently non-performing on the Second Charge books.
The Committee considered the impact of COVID-19, and the associated government restrictions
and support measures, on observed customer prepayment behaviour; whether it was temporary
or permanent in nature and whether it was appropriate to reset future cash flow expectations. The
Committee reviewed sensitivities provided by management illustrating the impact of extending or
shortening the expected weighted average lives of acquired loan portfolios. Based on this work,
the Committee is satisfied that the approach taken and judgements and estimates made, were
reasonable.
Effective interest rate A number of assumptions are made when calculating the EIR for newly-originated loan assets.
These include their expected redemption profiles, product switching activity and the anticipated
level of any early redemption charges (ERCs). Certain mortgage products offered by the Group
include significant directly attributable fee income; in particular, certain Buy-to-Let products and/
or those that transfer to a higher revert rate after an initial discount or fixed period. Judgement is
used in assessing the expected rate of prepayment during the discounted or fixed period and during
the period post rate reversion. The Group uses historical experience of customer behaviour in its
assessment along with economic outlook and market conditions. The Group transitioned modelling
for OSB organic books from a book level to a loan by loan level approach in line with other modelling
in the Group.
OSB applies a period spent on the higher reversion rate in the EIR for two, three and five-year fixed
products. The assumed period spent on the revert rate is based on a careful consideration of past
behavioural data and the potential impact of the economic and regulatory outlook. The Committee
also reviewed and challenged other assumptions used in the EIR calculations; in particular,
prepayment curves applied in the redemption profile. Prepayment curves for fixed rate mortgages
were approved by the Group Assets and Liabilities Committee (ALCO) prior to implementation.
CCFS applies a period spent on the higher reversion rate for all products based on observed
historical behaviour of similar cohorts of products. Management closely monitors observed
behaviour and compares these to assumptions applied in financial and accounting models.
Proposals on changes to prepayment assumptions are considered and approved by ALCO on a
quarterly basis. The Committee received information on the prepayment curve change proposals
and supporting analysis to enable it to independently challenge the approach and conclusions.
The Committee considered the impact of COVID-19 and the associated government restrictions
and support measures on observed customer prepayment behaviour; whether it was temporary
in nature and whether forward-looking assumptions should be updated. The Committee received
and reviewed sensitivities illustrating the impact of extending or shortening the expected weighted
average lives of organically originated loan portfolios, which influence the expectation of income
at higher reversionary rates; the period over which fees are recognised; and the expectations of
early repayment income. Having considered all the evidence, the Committee is satisfied that the
approach taken and judgements made were reasonable.
Further details of the above significant areas of judgement and estimation can be found in note 3 to
the financial statements.

138
OSB GROUP PLC Annual Report and Accounts 2021
Significant issues considered How these were addressed by the Committee
Hedge accounting Hedge accounting has been an area of focus for the Committee during the year. The Committee
reviewed management’s activities to develop the basis of hedge effectiveness testing and the
introduction of new processes to support hedge accounting for Sterling Overnight Index Average
(SONIA)-linked derivatives. The Committee also received regular reports on the selection and
implementation of a new Group hedge accounting system solution.
Phase 2 Interbank Offered
Rate (IBOR) amendments
The Committee considered the implications of the Phase 2 IBOR amendments, which enabled
entities to reflect the effects of transitioning from London Interbank Offered Rate (LIBOR) to
alternative benchmark interest rates without giving rise to accounting impacts that would not
provide useful information to users of financial statements.
Intangibles and
investments in subsidiaries
The Committee reviewed management’s assessment of whether the ongoing impact of the COVID-19
pandemic on the UK economy and the Group’s business plans was an impairment assessment
trigger for the Group’s intangible assets and significant investments in subsidiaries at the Company
level. The Committee challenged and satisfied itself on the appropriateness of the key underlying
assumptions to the impairment assessments. This review resulted in a part reversal of impairment
of £2.7m in 2021 in respect of the intangible asset relating to broker relationships recognised on the
Combination. In 2020, an impairment of £7.0m of the intangible assets was recognised in light of
uncertainty on future short-term mortgage lending volumes given the COVID-19 pandemic. The part
reversal of impairment reflects the increase in new business volumes in 2021 and expectations in
subsequent years compared to prior years’ assessments. There was no impairment in investments in
subsidiaries at the company level.
Taxation
The Committee received an update on the Group’s tax position
and discussed matters such as the relationship with HMRC and
tax compliance status. The Committee endorsed the Group’s UK
tax strategy, which is available on our website, www.osb.co.uk.
Internal Audit
The Committee is responsible for approving the remit of Group
Internal Audit, together with the annual Internal Audit plan and
ensuring that it has adequate resources and appropriate access
to information to enable it to perform its function effectively
and in accordance with the relevant professional standards. The
Committee approved the Internal Audit Charter in October 2021,
which formally defines Internal Audit’s purpose, authority and
responsibility and can be found on our website, www.osb.co.uk.
The Internal Audit function is resourced with an in-house team
supported by a panel of third party accountancy firms that
provide expert resource (on a co-source basis) for specific
technical/specialist audits. In the last year, the Group Internal
Audit team has grown in size, developed its methodology and
matured its assurance to support the growth ambitions of the
Group.
The Committee holds private sessions with the Group Chief
Internal Auditor and ensures that the Internal Audit function
has adequate standing and is free from management, or other
restrictions, which may impair its independence and objectivity.
On an annual basis, the Committee assesses the effectiveness
of the Internal Audit function. In 2021, this was facilitated by
a survey completed by Committee members, the Executives
(excluding the Group Chief Internal Auditor) and the external
auditor, who maintains a close relationship with the Internal
Audit function. Additionally, this year, an external quality
assessment was carried out in line with the recommendations
of the Chartered Institute of Internal Auditors, which concluded
that a number of Group Internal Audit practices exceeded the
standard they typically see elsewhere. This was particularly
apparent around the quality of their work, relationships with
all stakeholders and the forward-looking focus on key business
developments and the broader environment. The assessment
also confirmed that the right reporting lines were in place and
the independence and objectivity of the team was evident.
The Committee considered the results of this assessment and
relevant recommendations from the review were added to
Internal Audit’s Continuous Improvement Plan. The Committee
confirms that it is satisfied that the Internal Audit function
operated effectively during the year.
The Committee received regular updates from the Group Chief
Internal Auditor on progress against the 2021 Internal Audit
Plan and noted the results of audit assignments, significant
findings and themes; and any outstanding audit action points.
Where relevant, this has also considered the ongoing impact
of COVID-19. This is a dynamic plan, which was actively
updated on a quarterly basis to capture any emerging risks that
required assurance. In addition, the Committee, together with
the Executives and external auditor, received written reports
following the conclusion of each Internal Audit engagement.
Management actions on all Internal Audit recommendations were
tracked and reported to the Committee.
As well as monitoring progress with the 2021 Internal Audit Plan,
the Committee also considered and approved the 2022 Plan
which is based on an assessment of the key risks faced by the
Group.
Systems of internal control and risk management
The Committee approved the annual review of the Compliance
Risk Assessment and Assurance Plan and received regular
reports from the Group’s Compliance function. The Committee
used the Internal Audit and Compliance Reports to support its
assessment of the effectiveness of the Group’s system of internal
controls and risk management. The Committee also received
a report on the effectiveness of the Group’s system of controls
from the CEO, which was based on a self-assessment process
completed by senior managers and Executives. The Committee
continues to review operational incidents and ensures that
appropriate follow up action is taken.
Group Audit Committee Report (Continued)

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The Committee received and reviewed reports from management
on key controls over the accuracy and completeness of the
financial statements, the status of the substantiation of
balance sheet general ledger accounts at the reporting date
and judgements made in the calculation of regulatory capital
disclosures and the supporting external professional advice. The
systems of internal control and risk management have been in
place throughout the year under review and up to the date of
approval of the Annual Report and Accounts.
The Committee reviewed and approved a number of policies
following their annual update, including; anti-bribery and
corruption, data protection, data retention and record
management, fraud, sanctions, loan impairment provisioning,
whistleblowing, anti-money laundering and prevention of
terrorist financing. The Committee received reports on fraud
prevention arrangements, fraud incidents, whistleblowing,
financial crime systems and controls and received an annual
report from the Money Laundering Reporting Officers for the two
Banks during the year.
Whistleblowing
The Committee is responsible for monitoring the Group’s
Whistleblowing Policy and arrangements. Where concerns have
been raised, a detailed report is provided on the investigation,
actions taken, lessons learnt and changes made as a result.
The Chair of the Committee has overall responsibility for
whistleblowing arrangements with oversight from the Board.
Training and periodic updates are provided to all employees who
are encouraged to use the multiple channels available to raise
any concerns they may have. Training is also provided to Line
Managers and those involved in any investigations to ensure that
they comply with relevant regulations. No concerns were raised
that required a report to be made to the regulators.
External auditor
The Committee is responsible for overseeing the Group’s
relationship with its external auditor, Deloitte. This includes the
ongoing assessment of the auditor’s independence and the
effectiveness of the external audit process, the results of which
inform the Committee’s recommendation to the Board relating to
the auditor’s appointment (subject to shareholder approval) or
otherwise. The Committee holds regular private sessions with the
external auditor.
External auditor effectiveness and independence
The Committee assesses the effectiveness of the external audit
function on an annual basis. In 2021, the review was facilitated
through a survey completed by members of the Committee,
the Executive Directors and other key employees who had
significant interaction with the external audit team during the
year. The survey assessed the effectiveness of the lead partner
and audit team, the audit approach and execution, the role of
management in the audit process, communication, reporting
and support to the Committee as well as the independence and
objectivity of the external auditor. The assessment concluded
that the external audit process was effective and objective, with
some minor areas for improvement suggested.
The Committee is satisfied that Deloitte is independent; in
making this assessment, it took into account the non-audit
services provided during the year and confirmations given by
Deloitte as to its continued independence at various stages in
theyear.
External auditor appointment and tenure
The Group’s external audit contract was put out for tender for
the 2019 financial year and the next external audit tender is
expected to be 2028 for the financial year 2029. Rob Topley has
been the lead audit partner since 2019.
The Committee confirms that the Group has complied with
the Statutory Audit Services for Large Companies Market
Investigation (mandatory use of competitive tender processes
and Audit Committee Responsibilities) Order 2014, which requires
FTSE 350 companies to put their statutory audit services out
to tender no less frequently than every 10 years. There are no
restrictive contractual provisions or third parties limiting the
Company’s choice of auditor and a resolution to re-appoint
Deloitte as external auditor will be presented at the AGM.
External audit reports
Rob Topley, the lead external audit partner, attended six out of
eight meetings of the Committee during 2021. He also attended
the two additional joint meetings of the Group Risk and Group
Audit Committees; another partner attended those meetings he
was unable to attend. Rob Topley reported to the Committee
at the half year and full year on the audit-related work and
conclusions. This included Deloitte’s view on accounting
judgements made by management, compliance with IFRSs and
observations on controls. The Committee also received helpful
benchmark data from Deloitte during the year.
Non-audit services
The Committee reviewed and approved the policy governing
the use of the external auditor for non-audit services which is
designed to ensure that any provision of non-audit services
to the Group by the external auditor does not impact its
independence and objectivity. The Committee closely monitors
and receives regular reports on non-audit services.
The Group maintains active relationships with several other large
firms and any decision to appoint the external auditor for non-
audit services is taken in the context of its understanding of the
Group, which can place it in a better position than other firms to
undertake the work, and includes an assessment of the cost-
effectiveness and practicality of using an alternative firm.
The EU statutory audit market reform legislation adopted in the
UK applies a cap on permissible non-audit services of 70% of the
preceding three-year average of audit fees for UK incorporated
Public Interest Entities (PIEs). The Revised Ethical Standard issued
by the FRC in December 2019 contained a ‘whitelist’ of permitted
non-audit services, distinguishing between those which fall
under the cap, including extended assurance work, and those
not subject to the cap, being services required by a competent
authority or regulator by law. The cap is applicable for financial
periods commencing on or after 17 June 2019. As a result of
the Combination with CCFS and the insertion of a new holding
company in 2020, the Group contains multiple PIEs and the
application of the rules needs to be considered carefully for each
PIE. The rules on capping non-audit services will be applicable
to the Company for the first time in 2023 (based on the average
audit fees for 2020, 2021 and 2022), to OSB for the first time in
2022 (based on the average audit fees for 2019, 2020 and 2021)
and applied to CCFS for the first time in 2020 (based on the
average audit fees for 2017, 2018 and 2019).

140
OSB GROUP PLC Annual Report and Accounts 2021
Notwithstanding the above effective dates, the Committee set
a cap for non-audit services in 2021 of 50% of audit services.
The Committee pre-approved a number of non-audit services in
2021, including interim profit verifications, the half-year review,
assurance review of certain key performance indicators in the
Annual Report and Accounts, TCFD, and reporting on the Inline
Extensible Business Reporting Language (iXBRL) tagging of
Financial Statements. The Committee also agreed mandates for
the CFO and the Chair of the Committee to approve additional
permitted engagements subject to agreed thresholds.
The fees paid to the external auditor in respect of non-audit
services during 2021 totalled £619,000, representing 26% of
2021 Group audit services of £2,398,000 (2020: £363,000
representing 16% of 2020 Group audit services of £2,263,000)
and are summarised in the table below. All non-audit services
provided by Deloitte were assurance related in nature and
consistent with the role of the external auditor. No advisory or
consulting services were provided.
Group
2021
£’000
Group
2020
£’000
Fees payable to the Company’s
auditor for the audit of the
Company’s annual accounts 68 65
Fees payable to the Company’s
auditor for the audit of the accounts
of subsidiaries 2,330 2,198
Total audit fees 2,398 2,263
Audit-related assurance services 258 217
Other assurance services 121 45
Other non-audit services 240 101
Total non-audit fees 619 363
Total fees payable to the Group’s
auditor 3,017 2,626
Audit-related assurance services include the interim review and
profit verifications for regulatory purposes. Other assurance
services in 2021 includes an assurance review of APMs, iXBRL
and opinion to the Committee on synergy savings presented
in the Annual Report (2020: assurance review of APMs). Other
non-audit services primarily comprise work related to reporting
accounting work and an opinion on Additional Tier 1 (AT1)
securities issuance and the comfort letter for the Euro Medium-
Term Note programme (2020: the insertion of the new holding
company).
Committee effectiveness
The Committee formally evaluates its performance on an
annual basis. In 2021, the assessment was facilitated using a
survey completed by members of the Committee and other
attendees, including the external auditor. The review concluded
that the Committee operated effectively throughout 2021 with
no significant improvements required. An externally facilitated
Board and Committee effectiveness review was also undertaken
which included the Committee and further details can be found
on pages 128 to 129.
The Committee undertook training during the year, including
making extensive use of training programmes run by the major
accountancy firms and other external advisers. In addition,
Committee members attended a number of in-house workshops
on specific areas and completed all mandatory training as
required. Some members of the Committee also interacted with
key employees during the year to increase their knowledge and
understanding of the business.
Common membership across the Group’s Committees facilitates
effective communication lines between the Committees
regarding finance, risk and remuneration matters; and ensures
that agendas are aligned and duplication of responsibilities is
avoided.
Group Audit Committee Report (Continued)

141
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Group Risk Committee Report
Dear Shareholder,
The Committee has continued to
discharge its risk oversight, review and
challenge responsibilities effectively
during a period of continuing
uncertainty and change.
The Committee remains focused on the risks to the Group’s
strategic, business and regulatory agenda based on the Board-
approved risk appetite. In particular, the Committee ensured that
appropriate and timely decisions were taken to manage the Group’s
risk profile during a period of heightened uncertainty and change.
The pandemic-related disruptions and their impact on the
UK economic and business outlooks has been an important
backdrop against which the Committee has discharged its
duties. The Committee has also been mindful of the increasing
regulator agenda and supervisory focus following the
Combination of OSB and CCFS.
As the Group has transitioned to an integrated approach to
risk management, the Committee has overseen and guided
the development of its risk frameworks, risk appetite and key
regulatory submissions (Internal Capital Adequacy Assessment
Process (ICAAPs), Internal Liquidity Adequacy Assessment
Process (ILAAPs) and Recovery Plan). The Committee has
also ensured that appropriate levels of risk governance and
oversight have been maintained over the individually regulated
entities. A number of key regulatory projects have also been
subject to review and discussion by the Committee. These have
included the Internal Ratings-Based Approach (IRB), Resolution
Assessment Framework (RAF) and Operational Resilience.
The Committee, jointly with the Group Audit Committee, has
also provided a significant level of review and challenge to IFRS
9 based methodologies, judgements and estimates, economic
scenario calibrations and weightings, including the adequacy
of individually assessed provisions. The Committee has also
ensured that the total level of credit provisions at the Group
and its regulated entities are commensurate with the wider
risks and uncertainties. Assessment of risk-based capital and
funding requirements, including supporting methodologies
and assumptions, were subject to Committee review and
recommendation for Board approval as part of the Group and
regulated entities’ ICAAP, ILAAP and Recovery Plan.
The Committee has closely scrutinised the Group and its
regulated entities’ risk profiles against the Board-approved
risk appetites, requesting focused reviews and deep dives to
understand better, emerging trends and incidents.
IRB represents an important strategic initiative intended to
enhance risk management capabilities. The Committee has been
provided with regular updates on progress against plan, use and
integration of IRB outputs within credit underwriting, credit risk
management, capital planning and stress testing processes. The
Committee has exercised oversight and approval of IRB and IFRS 9
based models and policies through the Group Models and Rating
Committee (a sub-committee of the Group Risk Committee).
Post the Combination of OSB and CCFS, the Group became
subject to a ‘bail-in’ resolution strategy, as set by the Bank of
England. The Committee has been kept updated on key elements
of the resolution strategy including minimum requirements for
own funds and eligible liabilities (MREL), Operational Continuity
in Resolution (OCIR) and other resolution barriers.
The Committee has exercised oversight of the Group’s efforts
to enhance its operational resilience capabilities in line with
industry good practice and emerging regulatory requirements.
Given the increased level of pandemic-related operational
disruptions and residual integration activities, the Committee
has overseen continued efforts to align and enhance the Group’s
approach to risk and controls assessment based on a single
system platform and common standards.
The Committee has also been mindful of the need to ensure that
the Group’s first and second line risk management and oversight
functions are appropriately resourced and structured to reflect
the size and growth objectives of the Group.
Upon his appointment, the Group CRO presented to the
Committee his strategic priorities and agenda. Following
Committee review and discussion, the strategic priorities and
agenda for the Group Risk and Compliance functions were
approved. Key initiatives outlined within the strategic priorities and
agenda will be subject to regular reporting to the Committee.
Graham Allatt
Chair of the Group Risk Committee
17 March 2022
Committee member
Meetings
attended
Graham Allatt (Chair) 7/7
Noël Harwerth 7/7
Rajan Kapoor 7/7

142
OSB GROUP PLC Annual Report and Accounts 2021
Group Risk Committee Report (Continued)
Membership and meetings
The Committee met seven times during the year. The current
members are Graham Allatt as Chair, Noël Harwerth, Rajan
Kapoor and Simon Walker. Graham Allatt served as Chair of
the Group Risk Committee throughout the year. Simon Walker
joined the Board and became a member of the Committee on
4 January2022.
In addition to the members of the Committee, the Chairman of
the Board has a standing invitation to the Committee, along with
the CEO, CFO, CRO and Group Chief Credit and Compliance
Officer, unless the Chairman of the Committee informs any
of them that they should not attend a particular meeting or
discussion.
Responsibilities
The primary objective of the Committee is to support the Board in
discharging its risk oversight and governance responsibilities. In
particular, the Committee enables the Board to:
} Set a clear tone from the top in relation to a risk-based culture
which fosters individual and collective accountability for risk
management.
} Continuously review, challenge and recommend
enhancements to the Group’s Strategic Risk Management
Framework (SRMF).
} Ensure the Group organises and resources its risk
management and oversight functions across the first and
second line effectively.
} Actively assess performance against risk appetite and
challenge management to ensure that the Board’s
strategic, business and regulatory objectives are not put at
unacceptable levels of risk.
} Provide oversight to key regulatory initiatives.
The Committee’s specific responsibilities are set out in its terms
of reference, which are available on the Company’s website at
www.osb.co.uk.
Activity during 2021
The key areas of the Committee’s focus during 2021 are outlined
in the following pages.
Risk appetite
The Committee played an active role in shaping and assessing
the design of the Group’s risk appetite in the context of
economic and business outlook and uncertainties, the strategic
growth agenda of the Group and regulatory developments.
The Committee also ensured that the proposed risk appetite
was subject to appropriate alignment to the Group’s strategic
agenda, business plans and stress testing capabilities. Risk
appetites were set at both Group and banking entity levels. The
Committee reviewed the Group’s position against risk appetite
across all principal risks and escalated issues to the Board, where
appropriate.
Internal Ratings-Based (IRB) Programme
The Committee reviewed regular updates from the harmonised
Group IRB programme, which incorporated progress made
against key milestones in model development, model governance
and technical enhancements. The Committee is well positioned
to provide oversight and approval of relevant supervisory
submissions relating to the IRB approval process.
Group Risk Committee – key responsibilities
Risk appetite and assessment
} Advise the Board on overall risk appetite, tolerance and
strategy.
} Review risk assessment processes that inform the Board’s
decision-making.
} Consider the Group’s capability to identify and manage
new risks.
} Advise the Board on proposed strategic transactions,
including acquisitions or disposals, ensuring risk aspects and
implications for risk appetite and tolerance are considered.
Risk monitoring and framework
} Review credit risk, interest rate risk, liquidity risk, market
risk, compliance and regulatory risks, solvency risk,
conduct risk, reputational risk and operational risk
exposures by reference to risk appetite.
} Challenge and endorse the SRMF.
} Provide challenge and oversight to the Internal Capital
Adequacy Assessment Process (ICAAP) framework.
} Monitor actual and forecast risk and regulatory capital
positions.
} Recommend changes to capital utilisation.
} Provide challenge and oversight to the Internal Liquidity
Adequacy Assessment Process (ILAAP) framework.
} Monitor the actual and forecast liquidity position.
} Review reports on risk appetite thresholds, identify where
a risk of a material breach of risk limits exists and ensure
proposed actions are adequate.
} Provide challenge and oversight to the Recovery Plan
framework.
} Monitor risks arising from Climate Change.
CRO and risk governance structure
} Consider and approve the remit of the Risk function.
} Recommend to the Board the appointment and removal
of the CRO.
} Review promptly, all reports from the CRO.
} Review and monitor management’s responsiveness to the
findings of the CRO.
} Receive summary reports from all senior risk management
committees.
Credit risk
The Committee has monitored the performance of the Group’s
loan book on both aggregated and asset class sub-segment
bases by assessing the key indicators of credit quality, security
coverage, affordability and borrower risk profile. The Committee
also assessed forward-looking credit risk indicators in the form
of bureau data on customer credit scores, mover alerts and
indebtedness, business and economic early warning indicators.

143
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
The Committee challenged and approved updates to policies
including the Group Lending Policy, the Arrears Management
and Forbearance Policy and the Loan Impairment Provisioning
Policy, as well as the credit risk appetite. The Committee also
exercised oversight over credit risk models and provided an
appropriate level of challenge in relation to model construction
and validation to ensure that the models are appropriate,
robust and fit for the purpose for which they are intended. The
Committee has also directed management on how to monitor
model performance.
During 2021, the Committee (jointly with the Group
Audit Committee) provided oversight of the Group’s IFRS
9 methodologies focusing on key assumptions and the
appropriateness of judgements made. The Committee also
assessed and approved the Group’s provision adequacy levels,
supported by analysis provided by the Risk function.
The Group recognised an impairment provision of £20.0m in
2020 in relation to potential fraudulent activity by a third party
on a funding line provided by the Group, secured against lease
receivables and the underlying hard assets. The Group’s funding
line business is primarily secured against property-related
mortgages and following a review, it was concluded that this
was an isolated incident. The Group Audit Committee and Group
Risk Committee continue to monitor the administration of the
potential fraudulent activity.
Market risk and liquidity risk
Market risk and liquidity risk are continually monitored by the
Group Assets and Liabilities Committee (ALCO), which provides
reports to the Committee. The Committee reviewed ALCO’s
regular assessments of the UK macroeconomic environment and
potential impacts on the Group’s assets and liquidity.
The Committee also reviewed and recommended the market and
liquidity risk appetite to the Board for approval. The Committee
oversaw the Group’s liquidity management plans during
COVID-19, ensuring that liquidity positions remained appropriate
against the uncertain economic backdrop arising from the
pandemic.
Solvency risk and ICAAP
The Committee reviewed the Group ICAAP which demonstrates
how the Group would manage its capital resources and
requirements during a plausible but severe period of stress.
The Committee also reviewed and challenged the Group Capital
Plan and monitored total capital and Common Equity Tier One
(CET1) forecasts throughout the year, ensuring that risks were
understood and managed appropriately. The Committee also
reviewed and recommended the solvency risk appetite to the
Board for approval.
Operational risk
The Committee received reports on operational risks at each of
its meetings. The reports covered risk incidents that had arisen
to allow the Committee to assess management’s response and
remedial action proposed. The reports also covered key risk
indicators (KRIs), which can be quantitative or qualitative and
provided insights regarding changes in the Group’s operational
risk profile. The Committee also reviewed and recommended the
operational risk appetite to the Board for approval.
The Committee requested a detailed analysis of operational
incidents that occurred during 2021 to further understand any
root causes and trends. The Committee was satisfied that
the actions taken were appropriate and that the control of
operational incidents continued to improve.
Conduct, regulatory and financial crime risks
The Committee received reports covering conduct, regulatory
and financial crime KRIs, which can be quantitative or qualitative
and provide insights regarding changes in the Group’s conduct,
regulatory and financial crime risk profiles. The Committee
also assessed and recommended enhancements to the
conduct, regulatory and financial crime risk appetites before
recommending them for approval by the Board.
Risk Management Framework integration
The Committee considered the Integration Plan and
harmonisation of the Risk Management Frameworks and
functions of OSB and CCFS. An external firm assisted the Group
with the creation of the Integration Plan which sets out the key
components of the respective Banks’ frameworks. The scope
of all components is broken down into three distinct groupings,
namely; ‘business as usual’, ‘regulatory requirements’ and ‘risk
projects’ and sets out a summary of workstreams and timelines
to achieve harmonisation.
Other risk types
The Committee reviewed the Group profiles of reputational risk,
climate change risk and business and strategic risk against their
respective risk appetites. Further details on climate-related risks
are set out in the TCFD report on pages 86 to 93.
Other Committees
Group Models and Ratings Committee
The Group Models and Ratings Committee is a sub-committee
of the Group Risk Committee and met seven times during the
year. The primary purpose of the Committee is to act as the
designated Committee for the purpose of material aspects of the
rating and estimation processes (as articulated in Article 189 of
the EU Capital Requirements Regulation) and provide assurance
of the Group’s models and ratings systems.
The Committee is chaired by the Chair of the Group Risk
Committee, Graham Allatt. Rajan Kapoor, April Talintyre and
Simon Walker are members of the Committee. Simon Walker
joined the Board and became a member of the Committee on
4 January 2022.
Board Capital and Funding Committee
The Board Capital and Funding Committee is a Committee of the
Board. Its primary objective is to approve capital, funding and
equity activities of the Group consistent with Board-approved
plans. The Committee met four times during the year. The current
members are David Weymouth as Chair, Graham Allatt, Andy
Golding, Rajan Kapoor and April Talintyre. Simon Walker joined
the Board and became a member of the Committee on 4 January
2022.
Board Integration Committee
During 2021, the Committee met four times prior to being
disbanded on 15 June 2021, when the remaining responsibilities
of the Board Integration Committee were transferred to the
Board.

144
OSB GROUP PLC Annual Report and Accounts 2021
Directors’ Remuneration Report
Annual Statement by the Chair of the Group Remuneration Committee
Dear Shareholder,
The 2021 Directors’ Remuneration Report sets out
details of the Directors’ remuneration in respect of
2021 and how we intend to operate the Directors’
Remuneration Policy (the Remuneration Policy) in
2022. Executive remuneration is in line with the
Remuneration Policy which was approved by
shareholders at the 2021 AGM with over 99%
support and is also included within this report for
reference.
Overview of 2021 performance and incentive outcomes
2021 was a strong year for the Group despite the uncertainty in
the operating environment. Financial highlights in 2021 included
record underlying pre-tax profits of £522.2m, net loan book
growth of 10% and delivering an improved underlying cost to
income ratio of 24%. There was also tangible progress in key
projects during the year with IRB projects and our ESG agenda
taking significant steps forward.
Our customers and employees are key stakeholders of the
business and the customer Net Promoter Score (NPS) and
employee engagement scores across the Group continue to
reflect our strong relationships in these areas.
The 2021 Executive Bonus Scheme was again based 90% on the
Balanced Business Scorecard (BBS), which measures corporate
performance against Financial, Customer, Quality and Staff
metrics, and 10% on personal objectives. Targets for each
measure were set at the start of the year and assessed by the
Committee following the end of the financial year, liaising as
necessary with the Group Risk and Group Audit Committees.
There has been strong performance against each of the
Financial, Customer, Quality and Staff BBS categories
during 2021. In particular, financial targets have significantly
outperformed expectations with 46% out of the 50% earned.
Whilst 2021 financial performance has benefitted from items
including the unwinding of impairment provisions taken in 2020
and fair value gains on the Group’s hedging activities, the
Committee is satisfied that the outturn is in line with underlying
performance (before the inclusion of these items) and that a
consistent approach is being applied whereby adverse impacts
would similarly not be excluded; as was the case in 2020 when
provisions reduced the financial performance assessment.
Under the Customer metric, the Group’s customer and broker
NPS scores were both outstanding with low levels of customer
complaints, meaning that 14.5% out of the 15% was earned.
The achievements against the Quality category were strong,
although a payout of 10.6% out of 15% reflects the high level of
expectations when setting the targets. Payouts against the Staff
metrics was mixed resulting in 5.7% out of the 10% earned with
employee engagement meeting the threshold performance level,
with outperformance of the gender diversity targets. As a result
of this performance, the Executive Directors earned 76.83% out
of the 90% of bonus assessed against the scorecard.
Performance against personal targets was also considered by
the Board and Committee to be strong, with key targets being
met in an uncertain year. This resulted in a payout of 10% out of a
maximum 10% of bonus for both the CEO and CFO.
As such, payouts under the 2021 Executive Bonus Scheme are
86.83% of maximum for the CEO and CFO. The bonus is paid
half in cash and half in shares which must be held for a minimum
of three years; and up to seven years for a portion, in line
with regulatory requirements. Full details of the performance
conditions and bonus payments are provided on page 156
of this report. The Committee believes that this payout was
appropriate, reflecting the underlying performance of the Group
and wider stakeholder experience and discretion was not used
to adjust the outturn from the performance metrics. This payout
is also consistent with the payouts under employee bonus plans
throughout the business.
Committee member
Meetings
attended
Mary McNamara (Chair) 7/7
Noël Harwerth 7/7
Sarah Hedger 7/7
Rajan Kapoor 7/7
David Weymouth 7/7

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
We will continue to apply the Remuneration
Policy robustly to ensure that there remains a
strong link between the remuneration received
by Executives and employees and the
performance of the business whilst taking into
account risk.
Mary McNamara
Chair of the Group Remuneration Committee
17 March 2022
The 2019 award under the Performance Share Plan (PSP) will vest
in March 2022 at 87.16% of maximum based on performance over
the three-year performance period which ended on 31 December
2021. Performance was based 40% on Earnings Per Share
(EPS) growth, 40% on Total Shareholder Return (TSR) versus
the companies in the FTSE 250 Index (excluding Investment
Trusts) and 20% on RoE. Given that the Combination with CCFS
completed in the first year of the three-year performance
period, the Committee determined immediately following the
Combination that the EPS and RoE targets should be assessed
on a combined basis against targets adjusted to ensure that they
were no tougher or easier to achieve based on the business plan
immediately before and after the Combination. Performance
against the EPS target range exceeded the maximum target and
so 100% of the EPS part of the award vested. The TSR of 53.8%
growth over the period, placed OSB between the median and
upper quartile of the FTSE 250 peer group and therefore 82.9%
of the TSR part of the award vested. The average RoE over the
performance period was 22.6% resulting in 70% of the RoE part
of the award vesting. In total, 87.16% of the award vested and
the Committee is comfortable that there has been a clear and
strong link between reward and performance and that discretion
was not required to adjust the incentive outcome. In line with the
Remuneration Policy at the time of grant, shares received by the
Executives on vesting (net of tax) will be held for a further two
years before they can be sold.
Overall, the Committee believes that the Remuneration Policy is
operating as intended and that the payouts under the incentive
plans are appropriate. As such, no change to the Remuneration
Policy is required at this time.
Implementation of the Remuneration Policy in 2022
The CEO and CFO will receive a salary increase of 4% in 2022.
This is lower than the average increase applicable to the
workforce where the inflationary increase will be 5%.
The pension contribution remains at 8% of salary, which is
aligned to the rate for the majority of the workforce.
The 2022 annual bonus will be subject to a maximum limit of
110% of salary and will continue to be based 90% on performance
against the BBS and 10% on personal objectives. Half of any
bonus will be in deferred shares, which may not be sold for at
least three years. The Committee has reviewed the metrics to
be used in the BBS and has agreed that the Staff quadrant will
be broadened into an Environmental, Social and Governance
(ESG) category reflecting the increased focus within the business
on the ESG strategy. The ESG category will include carbon
reduction and ethnic diversity metrics, in addition to the current
gender diversity and employee engagement metrics. The
personal objectives for the CEO and CFO in 2022 also include
a target to embed the ESG strategy within the business. The
increased focus on ESG is supported by employees who were
consulted as part of discussions on Executive pay during the year
and are in line with the majority of shareholder views. The metrics
and weightings within the ESG category will be kept under
review in future years to ensure that they continue to support
the business priorities in this area, and we will also look at the
possibility of whether the PSP should incorporate ESG metrics
which are longer term in nature, from 2023.
PSP awards of 110% of salary will be made to the Executive
Directors with performance being measured over the period to
31 December 2024. Performance will continue to be based on
TSR (35% weighting), EPS growth (35% weighting), RoE (15%
weighting) and risk (15% weighting).
The targets for each measure are set out in this report and
the Committee is satisfied that these provide the appropriate
stretch, taking into account the business plan, external operating
environment and market expectations. Furthermore, when
assessing the performance outcome, the Committee may adjust
the formulaic vesting outcome to ensure it is aligned with the
underlying performance, risk appetite and individual conduct
over the period.
In line with the changes implemented in 2020, the 2022 PSP
awards will vest 20% each year between three and seven years
after grant, with each tranche subject to a one-year holding
period.

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OSB GROUP PLC Annual Report and Accounts 2021
Review of Non-Executive Directors’ fees
During the year, the Committee reviewed the Chairman’s fee
and, recognising the increase in workload since the fee was last
reviewed in 2020 and a review of market rates, determined that
the fee should increase from £300,000 to £330,000.
Separately, the Board (minus the Non-Executive Directors
(NEDs)) reviewed NED fees and recognising the same factors,
determined that the base fee levels should be increased from
£70,000 to £80,000; and the fees for Committee membership
should be increased from £5,000 to £7,500. This takes into
account the level of contributions at Board and Committees and
the complexities of a dual banking licence. Sarah Hedger has
been appointed ESG Champion to provide independent oversight
of the ESG strategy for which she will receive a fee of £7,500.
Further details are contained within this report.
Consideration of shareholder views
Prior to the 2021 AGM, we engaged with investors to confirm that
they remained comfortable with the Remuneration Policy and
how it is being operated and were pleased to receive continuing
investor support both in relation to the Remuneration Policy and
its operation, with over 99% support. We have taken into account
shareholder views when determining the metrics and targets for
the 2022 annual bonus and PSP awards and increased the focus
on ESG matters within the annual bonus as a result.
Consideration of employee policies and views
As the NED responsible for representing the workforce on the
Board, I regularly meet with employees, individually and through
forums such as the Workforce Advisory Forum (OneVoice),
to understand their views, including those on remuneration,
and report these views to the Board. During 2021, the views of
OneVoice were sought with regards to the approach to senior
management remuneration and the Committee agreed that the
additional focus on ESG within the annual bonus was in line with
the views expressed. Further details on the activities of OneVoice
can be found on pages 164 and 165.
The Annual Report on Remuneration will be presented to
shareholders at the 2022 AGM as an advisory resolution and I
look forward to your support at such time.
Mary McNamara
Chair of the Group Remuneration Committee
17 March 2022
Directors’ Remuneration Report (Continued)
Annual Statement by the Chair of the Group Remuneration Committee (Continued)
1. Designated senior managers include all members of the Group Executive
Committee and any other senior employees in independent control functions.
Group Remuneration Committee – key responsibilities
} Review and recommend for Board approval the Group
Remuneration Policy.
} Review the ongoing appropriateness and alignment of
the Group Remuneration Policy to the Group strategy
(including ESG) and alignment with key stakeholder
expectations.
} Review workforce remuneration and related
implementation policies and note annually the
remuneration trends across the Group.
} Review and recommend for Board approval the
remuneration policy for the Executive Directors, including
pension rights and any compensation payments.
} Review and approve the remuneration policy for senior
management and the Company Secretary and all
employees that are identified as Material Risk Takers for
the purposes of the Prudential Regulation Authority’s
Remuneration Code (the Remuneration Code) including
pension rights and any compensation payments.
} Review and approve the total individual remuneration
package of the Chairman of the Board, each Executive
Director, the Company Secretary and other designated
senior managers
1
including bonuses, any other incentive
payments and share-based awards.
} Ensure workforce remuneration practices and culture
are taken into account when determining individual
remuneration packages.
} Approve the appointment of remuneration consultants.
} Approve the design of, and determine targets for, any
performance-related pay schemes operated by the
Group and approve the total annual payments made
under such schemes.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Remuneration Policy
This section describes our Directors’ Remuneration Policy (the
Remuneration Policy) for which shareholder approval was
sought at the AGM on 27 May 2021 and which formally came
into effect from that date. It is intended that this Policy will last
for three years from the 2021 AGM date. There are no changes
to the OSB Remuneration Policy that was approved at the 2020
AGM. Certain factual data has been updated where applicable
(e.g. page references and illustration of remuneration policy);
the original version approved by shareholders can be found on
pages 149 to 155 of the 2020 Annual Report.
Policy overview
This Remuneration Policy has been prepared in accordance with
the Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008, as subsequently amended. The
Remuneration Policy has been developed taking into account a
number of regulatory and governance principles, including:
} The 2018 UK Corporate Governance Code.
} The regulatory framework applying to the Financial Services
Sector (including the Dual-regulated firms Remuneration
Code and provisions of the EU Capital Requirements
Directive).
} The Executive remuneration guidelines of the main
institutional investors and their representative bodies.
Approach to designing the Remuneration Policy
The Committee is responsible for the development,
implementation and review of the Directors’ Remuneration
Policy. In addressing this responsibility, the Committee works
with management and external advisers to develop proposals
and recommendations. The Committee considers the source of
information presented to it, takes care to understand the detail
and ensures that independent judgement is exercised when
making decisions. The Group Risk Committee considers whether
the Remuneration Policy and practices are in line with the risk
appetite and the Group Audit Committee confirms incentive plan
performance results, where appropriate.
The Code sets out principles against which the Committee
should determine the Remuneration Policy for Executive
Directors. These are shown in the first column of the table below,
together with the Committee’s approach, in the second column:
Principle Committee approach
Clarity – remuneration arrangements
should be transparent and promote effective
engagement with shareholders and the
workforce.
} We aim to set out our approach to remuneration in this report as transparently as
possible.
} We will engage with our Workforce Advisory Forum (OneVoice) to explain the
alignment of the Executive Directors’ Remuneration Policy with that of the
workforce.
Simplicity – remuneration structures should
avoid complexity and their rationale and
operation should be easy to understand.
} Within the required regulatory framework and in line with investor guidance, we
have structured the Remuneration Policy to be as simple as possible.
} We have a simple policy offering pension at the same rate as employees, an
annual bonus plan which cascades to most employees and, for senior employees,
performance shares to provide alignment with longer-term performance.
} There is, however, a degree of complexity required for Executive Director packages
to ensure a robust link to performance, to avoid reward for failure and to comply
with investor and Code requirements.
Risk – remuneration arrangements should
ensure reputational and other risks arising
from excessive rewards and behavioural risks
that can arise from target-based incentive
plans are identified and mitigated.
} We have mitigated these risks through careful policy design, including long-term
performance measurement, the use of specific risk-based measures, deferral
and shareholding requirements (including post cessation of employment) and
discretion and clawback provisions if incentive payment levels are inappropriate.
Predictability – the range of possible values
of rewards to individual Directors and any
other limits or discretions should be identified
and explained at the time of approving the
Remuneration Policy.
} We look carefully each year at the range of likely performance outcomes for
incentive plans when setting performance target ranges for threshold, target and
maximum payouts and would use discretion where necessary where this leads to
an inappropriate pay outcome.
Proportionality – the link between individual
awards, the delivery of strategy and the long-
term performance of the Company should
be clear. Outcomes should not reward poor
performance.
} Incentive plans are determined based on a proportion of base salary so there is a
sensible balance between fixed pay and performance-linked elements.
} There are provisions to override the formula-driven outcome of incentive plan
deferrals and clawbacks to ensure that poor performance is not rewarded or if
incentive payments are too high for the performance delivered, in the view of the
Committee.
} As illustrated by the chart showing our TSR performance and historical CEO
remuneration on pages 158 and 159, we believe that there has been a strong link
between Executive Directors’ pay and performance.
Alignment to culture – incentive schemes
should drive behaviours consistent with
Company purpose, values and strategy.
} The Balanced Business Scorecard used for the annual bonus is based on a wide
range of measures linked to financial performance, customer, quality and staff, to
ensure that payments are aligned to Company culture and values.
} Bonus plans operate widely throughout the Company and are approved by the
Committee to ensure consistency with Company purpose, values and strategy.

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OSB GROUP PLC Annual Report and Accounts 2021
How the views of employees and shareholders are taken
intoaccount
The Chair is the designated Non-Executive Director in relation
to employee matters; she regularly meets with employees,
including through OneVoice. The Chair attends OneVoice to
provide an overview of Executive pay and governance within the
Group and to provide the opportunity to give feedback, which is
communicated to the Committee and the Board. The Committee
also receives updates in relation to the remuneration structure
throughout the Group, salary and bonus reviews each year. As
set out in the Remuneration Policy table, in setting remuneration
for the Executive Directors, the Committee takes note of the
overall approach to reward for employees in the Group and
salary increases will ordinarily be in line (in percentage of salary
terms) with those of the wider workforce. Thus, the Committee
is satisfied that the decisions made in relation to Executive
Directors’ Remuneration Report (Continued)
Remuneration Policy (Continued)
Directors’ pay are made with an appropriate understanding of
the wider workforce.
The Committee undertook extensive engagement with
shareholders during the review of the Remuneration Policy
in late 2019 and early 2020 and has again consulted with
shareholders prior to the Remuneration Policy being re-
presented to shareholders at the 2021 AGM to confirm that they
remain supportive. The Committee will seek to engage with
major shareholders and the main shareholder representative
bodies and proxy advisory firms when it is proposed that any
material changes are to be made to the Remuneration Policy or
its implementation. In addition, we will consider any shareholder
feedback received at the AGM.
The table below and the accompanying notes describe the
Remuneration Policy for Executive Directors.
Element Purpose and link to strategy Operation and performance conditions Maximum
Salary To reward Executive
Directors for the role
and duties required.
Recognises individual’s
experience,
responsibility and
performance.
Paid monthly.
Base salaries are usually reviewed annually, with any
changes usually effective from 1 January.
No performance conditions apply to the payment of
salary. However, when setting salaries, account is taken
of an individual’s specific role, duties, experience and
contribution to the Company.
As part of the salary review process, the Committee
takes account of individual and corporate performance,
increases provided to the wider workforce and the
external market for UK listed companies both in the
financial services sector and across all sectors.
Increases will generally
be broadly in line with the
average of the workforce.
Higher increases may be
awarded in exceptional
circumstances such as a
material increase in the
scope of the role, following
the appointment of a new
Executive Director (which
could also include internal
promotions) to bring an
initially below-market
package in line with the
market over time or in
response to market factors.
Benefits To provide market
competitive benefits to
ensure the well-being
of employees.
The Company currently provides:
} car allowance;
} life assurance;
} income protection;
} private medical insurance; and
} other benefits as appropriate for the role.
There is no maximum
cap on benefits, as the
cost of benefits may vary
according to the external
market.
Pension To provide a
contribution to
retirement planning.
Executive Directors may participate in a defined
contribution plan or, if they are in excess of the
HM Revenue & Customs (HMRC) annual or lifetime
allowances for contributions, may elect to receive cash
in lieu of all or some of such benefit.
In line with the rate
receivable by the majority
of the workforce, which is
currently 8% of salary.

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Overview Strategic Report Governance Financial Statements Appendices
Element Purpose and link to strategy Operation and performance conditions Maximum
Annual bonus To incentivise and
reward individuals
for the achievement
of pre-defined,
Committee-approved,
annual financial,
operational and
individual objectives
which are closely
linked to the corporate
strategy.
The annual bonus targets will have a 90% weighting
based on performance in line with an agreed balanced
scorecard which includes an element of risk appraisal.
Within the scorecard, at least 50% of the bonus will be
based on financial performance. 10% of the bonus will
be based on personal performance targets.
The objectives in the scorecard, and the weightings
on each element, will be set annually and may be
flexed according to role. Each element will be assessed
independently, but with Committee discretion to vary
the payout (including to zero) to ensure there is a strong
link between payout and performance.
On top of this, there is a general discretion to adjust
the outturn to reflect other exceptional factors at the
discretion of the Committee.
50% of any bonus earned will be delivered in shares,
subject to a three-year holding period.
In exceptional circumstances of high bonus payments,
there may be a requirement to defer a proportion of
bonus with vesting staggered over three to seven years,
in line with the deferral arrangements for the PSP
described below.
Updated clawback and malus provisions apply, as
described in note 1 overleaf.
The maximum bonus
opportunity is 110% of
salary per annum.
The threshold level
for payment is 25% of
maximum for any measure.
Performance
Share Plan
To incentivise and
recognise execution of
the business strategy
over the longer term.
Rewards strong
financial performance
over a sustained
period.
PSP awards will typically be made annually at the
discretion of the Committee, usually following the
announcement of full-year results.
Usually, awards will be based on a mixture of internal
financial performance targets, risk-based measures
and relative TSR. At least 50% of the PSP award will
ordinarily be based on financial and relative TSR
metrics.
The performance targets will usually be measured over
three years.
Any vesting will be subject to an underpin, whereby the
Committee must be satisfied:
(i) that the vesting reflects the underlying performance
of the Company;
(ii) that the business has operated within the Board’s
risk appetite framework; and
(iii) that individual conduct has been satisfactory.
On top of this, there is a general discretion to adjust
the outturn to reflect other exceptional factors at the
discretion of the Committee.
Awards granted after 1 January 2020 will vest in five
equal tranches of 20%, following the Committee’s
determination of performance. At the time each tranche
vests, a one-year holding period will apply. (Awards
granted before this date will vest in accordance with the
terms of the previous Policy.)
Clawback and malus provisions apply as described in
note 1 overleaf.
The maximum PSP grant
limit is 110% of salary in
respect of grants in any
financial year.
The threshold level
for payment is 25% of
maximum for any measure.

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OSB GROUP PLC Annual Report and Accounts 2021
Element Purpose and link to strategy Operation and performance conditions Maximum
All-employee
share plan
(Sharesave Plan)
All employees,
including Executive
Directors, are
encouraged to become
shareholders through
the operation of an all-
employee share plan.
Tax-favoured plan under which regular monthly savings
may be made over a three- or five-year period and can
be used to fund the exercise of an option, where the
exercise price is discounted by up to 20%.
Maximum permitted
savings based on HMRC
limits.
Share ownership
guidelines
To increase alignment
between Executive
Directors and
shareholders.
Executive Directors are expected to build and maintain
a minimum holding of shares.
Executive Directors must retain at least 50% of the
shares acquired on vesting of any share awards (net of
tax) until the required holding is attained.
On cessation of employment, Executive Directors
must retain the lower of the in-service shareholding
requirement, or the Executive Directors’ actual
shareholding, for two years.
At least 250% of salary
for the CEO and at least
200% of salary for the CFO
or such higher level as the
Committee may determine
from time to time.
The net of tax value of any
unvested deferred awards
(which are not subject to
any future performance
condition) may count
towards the definition of
a shareholding for this
purpose.
1. Clawback and malus provisions apply to both the annual bonus, including amounts deferred into shares and PSP awards. These provide for the recovery of incentive
payments within seven years in the event of: (i) a material misstatement of results; (ii) an error; (iii) a significant failure of risk management; (iv) regulatory censure; (v) in
instances of individual gross misconduct; (vi) corporate failure; (vii) reputational damage; or (viii) any other exceptional circumstance as determined by the Board. A further
three years may be applied following such a discovery, in order to allow for the investigation of any such event. In order to effect any such clawback, the Committee may
use a variety of methods: withhold deferred bonus shares, future PSP awards or cash bonuses, or seek to recoup cash or shares already paid.
Directors’ Remuneration Report (Continued)
Remuneration Policy (Continued)
Choice of performance measures for Executive Directors’
awards
The use of a Balanced Business Scorecard for the annual bonus
reflects the balance of financial and non-financial business
drivers across the Group. The combination of performance
measures ties the bonus plan to both the delivery of corporate
targets, risk measures and strategic/personal objectives. This
ensures there is an appropriate focus on the balance between
financial and non-financial targets and risk, with the scorecard
composition being set by the Committee from year to year
depending on the corporate plan.
The PSP is based on a mixture of financial and risk measures and
relative TSR, in line with our key objectives of sustained growth
in earnings leading to the creation of shareholder value over the
long term within an appropriate risk framework. TSR provides a
close alignment between the relative returns experienced by our
shareholders and the rewards to Executives.
There is an underpin in place on the PSP to ensure that the
payouts are aligned with underlying performance, financial and
non-financial risk and individual conduct.
Annual bonus and PSP targets are set taking into account the
business plans, shareholder expectations, the external market
and regulatory requirements.
In line with HMRC regulations for such schemes, the Sharesave
Plan does not operate performance conditions.
How the Group Remuneration Committee operates the
variable pay policy
The Committee operates the share plans in accordance with their
respective rules, the Listing Rules and HMRC requirements, where
relevant. The Committee, consistent with market practice, retains
discretion over a number of areas relating to the operation and
administration of certain plans, including:
} Who participates in the plans.
} The form of the award (for example, conditional share award
or nil cost option).
} When to make awards and payments; how to determine the
size of an award; a payment; and when and how much of an
award should vest.
} Whether share awards will be eligible to receive dividend
equivalents and the method of calculation.
} The testing of a performance condition over a shortened
performance period.
} How to deal with a change of control or restructuring of the
Group.
} Whether a participant is a good/bad leaver for incentive plan
purposes; what proportion of an award vests at the original
vesting date or whether and what proportion of an award
may vest at the time of leaving.
} How and whether an award may be adjusted in certain
circumstances (e.g. for a rights issue, a corporate
restructuring or for special dividends).
} What the weighting, measures and targets should be for the
annual bonus plan and PSP from year to year.
The Committee also retains the discretion within the
Remuneration Policy to adjust existing targets and/or set
different measures for the annual bonus. For the PSP, if events
happen that cause it to determine that the targets are no longer
appropriate, an amendment could be made so they can achieve
their original intended purpose and ensure the new targets are
not materially less difficult to satisfy.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Any use of the above discretions would, where relevant, be
explained in the Annual Report on Remuneration and may, as
appropriate, be the subject of consultation with the Company’s
major shareholders.
The Group operates in a heavily regulated sector, the rules of
which are subject to frequent evolution. The Committee therefore
also retains the discretion to make adjustments to payments
under this Policy as required by financial services regulations.
Conflicts of interest
The Committee ensures that no Director is present when their
remuneration is being discussed and considers any potential
conflicts prior to meeting materials being distributed and at the
beginning at each meeting.
Awards granted prior to the effective date
Any commitments entered into with Directors prior to the
effective date of this Policy will be honoured. Details of any such
payments will be set out in the Annual Report on Remuneration
as they arise.
Remuneration Policy for other employees
The Committee has regard to pay structures across the wider
Group when setting the Remuneration Policy for Executive
Directors and ensures that policies at and below the Executive
level are coherent. There are no significant differences in the
overall remuneration philosophy, although pay is generally more
variable and linked more to the long term for those at more senior
levels. The Committee’s primary reference point for the salary
reviews for the Executive Directors is the average salary increase
for the broader workforce.
A highly collegiate approach is followed in the assessment of the
annual bonus, with our Balanced Business Scorecard being used
to assess bonus outcomes throughout the Group, with measures
weighted according to role, where relevant.
Overall, the Remuneration Policy for the Executive Directors
is more heavily weighted towards performance-related pay
than for other employees. In particular, performance-related
long-term incentives are not provided outside the most senior
management population as they are reserved for those
considered to have the greatest potential to influence overall
levels of performance.
Although PSPs are awarded only to the most senior managers
in the Group, the Company is committed to widespread equity
ownership and a Sharesave Plan is available to all employees.
Executive Directors are eligible to participate in this plan on the
same basis as other employees.
Illustrations of application of Remuneration Policy
The chart below illustrates how the composition of the Executive
Directors’ remuneration packages would vary under various
performance scenarios. This chart has been updated from the
version in the Policy approved at the 2021 AGM to illustrate how it
is intended the Remuneration Policy will be implemented in 2022.
£3,500k
£2,500k
£2,000k
£1,500k
£3,000k
£1,000k
£500k
0
Minimum Target
CEO CFO
Maximum Share price
growth
Minimum Target Maximum Share price
growth
Fixed Pay
LTIPsAnnual Bonus
£937k
£1,637k
£2,802k
£3,268k
£589k
£1,026k
£1,756k
£2,047k
57.3%
28.5%
14.2%
33.5%
33.2%
33.3%
28.7%
28.5%
42.8%
100% 57.4%
28.4%
14.2%
33.5%
33.2%
33.3%
28.8%
28.5%
42.7%
100%
1. Minimum performance assumes no award is earned under the annual bonus plan and no vesting is achieved under the PSP – only fixed pay (salary, benefits and pension
arepayable).
2. At on-target, half of the annual bonus is earned (i.e. 55% of salary) and 25% of maximum is achieved under the PSP (i.e. 27.5% of salary).
3. At maximum, full vesting is achieved under both plans (i.e. 110% of salary under the bonus and PSP).
4. As at maximum, but illustrating the effect of a 50% increase in the share price on PSP awards.
Other than as noted in the chart above, share price growth and all-employee share plan participation are not considered in these
scenarios.

152
OSB GROUP PLC Annual Report and Accounts 2021
The terms and provisions that relate to remuneration in the Executive Directors’ service agreements are set out below. Service
contracts are available for inspection at the Company’s registered office.
Provision Policy
Notice period 12 months on either side.
Termination payments A payment in lieu of notice may be made on termination to the value of the Executive Director’s
basic salary at the time of termination. Such payments may be made in instalments and in such
circumstances can be reduced to the extent that the Executive Directors mitigate their loss. Rights
to DSBP and PSP awards on termination are shown below. The employment of each Executive
Director is terminable with immediate effect without notice in certain circumstances, including gross
misconduct, fraud or financial dishonesty, bankruptcy or material breach of obligations under their
service agreements.
Remuneration Salary, pension and core benefits are specified in the agreements. There is no contractual right to
participate in the annual bonus plan or to receive long-term incentive awards.
Post-termination These include six months’ post-termination restrictive covenants against competing with the
Company; nine months’ restrictive covenants against dealing with clients or suppliers of the
Company; and nine months’ restrictive covenants against soliciting clients, suppliers and key
employees.
Contract date Andy Golding, 12 February 2020; April Talintyre, 12 February 2020.
Unexpired term Rolling contracts.
Directors’ Remuneration Report (Continued)
Remuneration Policy (Continued)
Payments for loss of office
On termination, other than for gross misconduct, the Executive
Directors will be contractually entitled to salary, pension and
contractual benefits (car allowance, private medical cover, life
assurance and income protection) over their notice period. The
Company may make a payment in lieu of notice equivalent to
the salary for the remaining notice period. Payments in lieu of
notice would normally be phased and subject to mitigation, by
offsetting the payments against earnings elsewhere.
The Company may also pay reasonable legal costs in respect of
any compromise settlement.
Annual bonus on termination
There is no automatic/contractual right to bonus payments
and the default position is that the individual will not receive a
payment. The Committee may determine that an individual is
a ‘good leaver’ and may elect to pay a pro-rated bonus for the
period of employment at its discretion and based on full-year
performance.
Deferred bonus awards on termination
In respect of outstanding awards made under the previous
policy, deferred bonus awards normally lapse on termination of
employment. However, in certain good leaver situations, awards
may instead vest on the normal vesting date (or on cessation
of employment in exceptional circumstances). Good leaver
scenarios include: (i) death; (ii) injury, ill-health or disability; (iii)
retirement with the agreement of the Company; (iv) redundancy;
(v) the employing company ceasing to be a member of the
Group; or (vi) any other circumstance the Committee determines
good leaver treatment is appropriate. Shares which are subject
to a holding period will ordinarily be released at the normal time.
Where a portion of the annual bonus is required to be deferred
in line with FCA regulations, the treatment on cessation will be
in line with deferred awards made under the previous policy
(asabove).
Performance Share Plan awards on termination
Awards normally lapse on termination of employment. However,
in certain good leaver situations, awards may vest on the
normal vesting date and to the extent that the performance
conditions are met. The Committee is, however, permitted
under the PSP rules and FCA regulations to allow early vesting
of the award to the extent it considers appropriate, taking into
account performance to date. Unless the Committee determines
otherwise, awards vesting in good leaver situations will be pro-
rated for time employed during the performance period. Shares
which are subject to a post-vesting holding period will ordinarily
be released at the normal time.
Approach to recruitment and promotions
The ongoing remuneration package for a new Executive Director
would be set in accordance with the terms of the Company’s
approved Remuneration Policy.
On recruitment, the salary may (but need not necessarily) be
set at a lower rate, with phased increases (which may be above
the average for the wider employee population) as the Executive
Director gains experience. The salary would in all cases be set to
reflect the individual’s experience and skills and the scope of the
role. Annual bonus and PSP award levels would be in line with the
Remuneration Policy.
The Company may take into account and compensate for
remuneration foregone upon leaving a previous employer using
cash awards, the Company’s share plans or awards under Listing
Rule 9.4.2, as may be required. This would include: taking into
account the quantum foregone; the extent to which performance
conditions apply; the form of award; and the time left to
vesting. These would be structured in line with any regulatory
requirements (such as the PRA Rulebook).
For all appointments, the Committee may agree that the
Company will meet certain appropriate relocation costs.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
For an internal appointment, including the situation where an
Executive Director is appointed following corporate activity, any
variable pay element awarded in respect of their prior role would
be allowed to pay out broadly according to its terms.
Should an individual be appointed to a role (Executive or
Non-Executive) on an interim basis, the Company may provide
additional remuneration, in line with the Remuneration Policy for
the specific role, for the duration the individual holds the interim
role.
For the appointment of a new Chairman or NED, the fee
arrangement would be in accordance with the approved
Remuneration Policy in force at that time.
External appointments
Executive Directors may accept one directorship of another
company with the consent of the Board, which will consider
the time commitment required. The Executive Director would
normally be able to retain any fees from such an appointment.
The Remuneration Policy for the Chairman and Non-Executive Directors
Element Purpose and link to strategy Operation Maximum opportunity
Fees To attract and retain a
high-calibre Chairman and
NEDs by offering a market
competitive fee.
The Chairman and NEDs are
entitled to an annual fee, with
supplementary fees payable for
additional responsibilities including
the Chair of the Group Audit, Group
Nomination and Governance, Group
Remuneration and Group Risk
Committees and for acting as the
SID.
Fees are reviewed periodically.
The Chairman and NEDs are entitled
to reimbursement of travel and other
reasonable expenses incurred in the
performance of their duties.
There is no prescribed maximum
annual increase. The Committee is
guided by the general increase in the
non-executive market but on occasion
may need to recognise, for example,
change in responsibility and/or time
commitments.
Letters of appointment
The NEDs are appointed by letters of appointment that set out their duties and responsibilities. The key terms are:
Provision Policy
Period of appointment Initial three-year term, subject to annual re-election by shareholders. On expiry of the initial term and
subject to the needs of the Board, NEDs may be invited to serve a further three years. NEDs appointed
beyond nine years will be at the discretion of the Group Nomination and Governance Committee.
Notice periods Three months on either side. The appointments are also terminable with immediate effect and without
compensation or payment in lieu of notice if the Chairman or NEDs are not elected or re-elected to their
position as a Director of the Company by shareholders.
Payment in lieu of
notice
The Company is entitled to make a payment in lieu of notice on termination.
Letters of appointment are available for inspection at the Company’s registered office. The effective dates of the current NEDs’
appointments are shown in the table below.
Non-Executive Director Date of appointment
Graham Allatt 6 May 2014
1
Noël Harwerth 4 October 2019 (appointed to the CCFS Board in June 2017)
1
Sarah Hedger 1 February 2019
1
Rajan Kapoor 4 October 2019 (appointed to the CCFS Board in September 2016)
1
Mary McNamara 6 May 2014
1
Simon Walker 4 February 2022
David Weymouth 1 September 2017
1
1. These dates reflect the date that each NED joined OneSavings Bank plc (prior to the insertion of OSB GROUP PLC as the holding company and listed entity).

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OSB GROUP PLC Annual Report and Accounts 2021
Directors’ Remuneration Report (Continued)
2021 Annual Report on Remuneration
Introduction
This section outlines details of the remuneration received by
Executive Directors and Non-Executive Directors in respect of
the financial year ended 31 December 2021. This Annual Report
on Remuneration will, in conjunction with the Annual Statement
of the Committee Chair on pages 144 to 146, be proposed for an
advisory vote by shareholders at the forthcoming AGM to be held
on 12 May 2022.
Some of the data provided has been audited by Deloitte, which is
indicated, where applicable.
Membership and meetings
The Committee met a total of seven times during 2021. The
members of the Committee are Mary McNamara (Chair), Noël
Harwerth, Sarah Hedger, Rajan Kapoor and David Weymouth.
The attendance of individual Committee members is set out in
the Corporate Governance Report.
The Board considers each of the members of the Committee
to be independent in accordance with the UK Corporate
Governance Code.
Responsibilities
The Committee’s responsibilities are set out in its terms of
reference, which are available on the Company’s website. In
summary, the responsibilities of the Committee include:
} Pay for employees under the Committee’s scope:
– Setting the Remuneration Policy.
– Determining total individual remuneration (including salary
increases, bonus opportunities and outcomes and long-
term incentive plan (LTIP) awards).
– Ensuring that contractual terms on termination, and
any payments made, are fair to the individual and the
Company, that failure is not rewarded and that the duty to
mitigate loss is fully recognised.
} Approving the design of, and determining targets for, any
performance-related pay schemes operated by the Company
and approving total payments made under such schemes.
Employees under the Committee’s scope include Executive
Directors, the Chairman of the Board, the Company Secretary
and all employees that are identified as Material Risk Takers
for the purposes of the PRA and FCA’s Dual-regulated firms
Remuneration Code (Code Staff).
Key matters considered by the Committee
Key issues reviewed and discussed by the Committee during the
year included:
} Review and approval of 2021 salary increases.
} Review and approval of 2020 bonus awards.
} Determining the 2021 grants under the PSP.
} Consideration of remuneration arrangements for the CEO
and CFO for 2022.
} Approval of the 2022 personal objectives for the CEO, CFO
and Group Executive team.
} Updates on the performance of in-flight PSP awards.
} Regular shareholder updates, as well as the approach and
strategy in respect of shareholder engagement.
} Review of pay arrangements across the Group.
} Leaving arrangements for senior employees.
} Considering and recommending the Directors’ Remuneration
Report to the Board for approval.
} Annual review of the costs and performance of the external
remuneration consultant.
} Other business as usual matters for employees under the
Committee’s scope.
Advisers to the Committee
Korn Ferry provided independent advice to the Committee during
2021, having been appointed following a competitive tender
process in 2017. The total fees paid to Korn Ferry in 2021 were
£111,840 and were charged on a time and materials basis.
Korn Ferry has no other connection with the Company or any
individual Director with the exception of Mary McNamara. Korn
Ferry acts as Remuneration Consultant to the Remuneration
Committee of Motorpoint Group Plc, of which Mary McNamara is
Chair. Korn Ferry is a member of the Remuneration Consultants
Group and abides by the voluntary code of conduct of that
body, which is designed to ensure objective and independent
advice is given to remuneration committees. The Committee is
satisfied that Korn Ferry provides objective and independent
advice.
The Committee consults with the CEO (as appropriate) and seeks
input from the Chair of the Group Risk Committee to ensure that
any remuneration or pay scheme reflects the Company’s risk
appetite and profile and considers current and potential future
risks.
The Committee also receives input on senior management
remuneration from the CFO and Group HR Director. The Group
General Counsel and Company Secretary acts as Secretary to
the Committee and advises on regulatory and technical matters,
ensuring that the Committee fulfils its duties under its terms of
reference.
No individual is present in discussions directly relating to their
own pay.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Directors’ pay outcomes for 2021
Remuneration and fees payable for 2021 – (audited)
The table below sets out a single figure for the total remuneration received by each Executive Director and NED for the years ending
31 December 2021 and 31 December 2020.
Executive Directors Year
Basic
salary
£’000
Taxable
benefits
1
£’000
Pension
2
£’000
Annual
bonus
paid
3
£’000
Amount
bonus
deferred
3
£’000
LTIP
4
£’000
Total
fixed pay
£’000
Total
variable
pay
£’000
Total
£’000
Andy Golding 2021 815 22 65 389 389 891 902 1,669 2,571
2020 735 22 59 – 167 527 816 697 1,510
April Talintyre 2021 508 16 41 244 244 600 565 1,088 1,653
2020 500 16 40 – 113 354 556 467 1,023
1. Taxable benefits received include car allowance (CEO: £20,000; CFO: £15,000) and private medical cover.
2. Executive Directors currently receive pension contributions (or cash in lieu thereof) of 8% of salary, which is in line with the majority of the workforce.
3. 50% of bonus is payable in cash and 50% in shares deferred for three years or longer, in line with regulatory requirements. The cash portion of the 2020 bonus was waived
prior to the Executive Directors becoming entitled to it.
4. The LTIP figure for the year ended 31 December 2020 has been restated based on the share price on vesting of £4.656580 for the 2018 PSP.
Total fees £’000 2021 2020
Chairman
David Weymouth 300 292
Non-Executive Directors
Graham Allatt 115 114
Noël Harwerth
1
110 109
Sarah Hedger 83 84
Rajan Kapoor 118 120
Mary McNamara 105 105
Former Non-Executive Directors
Eric Anstee
2
– 8
Tim Brooke Thom
3
– 50
Rod Duke
4
– 122
Margaret Hassall
3
– 45
Ian Ward
3
– 48
Sir Malcolm Williamson
2
– 27
Total 831 1,124
NEDs cannot participate in any of the Company’s share schemes and are not eligible to join the Company pension scheme.
1. Noël Harwerth received £631 for taxable travel expenses (total received £110,631).
2. Ceased to be a Director of OSB on 4 February 2020.
3. Ceased to be a Director of OSB on 7 May 2020.
4. Ceased to be a Director of OSB on 4 February 2020 and became Chairman of Charter Court Financial Services Limited (CCFSL) on the same date (paid a fee of £125,000 as
Chairman of CCFSL).
Executive bonus scheme
The performance against the measures for 2021 is set out below. There has been strong performance against the Balanced Business
Scorecard. Financial targets have largely been outperformed in an uncertain environment, which has resulted in 46% of the 50%
earned under this quadrant. Whilst 2021 financial performance has benefitted from items including the unwinding of impairment
provisions taken in 2020 and fair value gains on the Group’s hedging activities, the Committee is satisfied that the outturn is in line
with underlying performance and that a consistent approach is being applied whereby adverse impacts would similarly not be
excluded, as was the case in 2020 when provisions reduced the financial performance assessment.
Performance against the Customer quadrant was also positive with customer and broker NPS scores outperforming the stretch
targets, whilst maintaining low levels of complaints. There was good performance against Quality and Staff quadrants, although the
performance against the number of high-severity incidents and employee engagement metrics reduced the payouts.
The performance against the Balanced Business Scorecard provides a rounded assessment of corporate performance over the year,
which represent the building blocks for the sustainable success of the business.

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OSB GROUP PLC Annual Report and Accounts 2021
2021 performance against the Balanced Business Scorecard
Targets
1
Category Key performance indicator Weighting
Threshold
(25%)
Budget
(50%)
Max
(100%) Actual result
Outcome
CEO
Outcome
CFO
Financial (50%) Underlying PBT (£m) 25% 393m 413m 433m 522m 25% 25%
All-in RoE (%) 10% 17.4% 19.4% 21.4% 23.8% 10% 10%
Cost to income ratio (%) 7.5% 30.2% 28.2% 26.2% 23.8% 7.5% 7.5%
Net loan book growth (%) 7.5% 8.3% 10.3% 12.3% 10.1% 3.5% 3.5%
Customer (15%) Customer satisfaction 6% 60% 65% 70% 69.6% 5.8% 5.8%
Broker satisfaction 4% 22.5 27.5 32.5 47.7 4% 4%
Complaints (%) 5% 0.10% 0.09% 0.08% 0.08% 4.7% 4.7%
Quality (15%) Overdue actions (#) 5% 6 4 2 2.5 4.4% 4.4%
Arrears (%) 5% 2.8% 2.5% 2.2% 1.11% 5% 5%
High-severity incidents (#) 5% 3 2 1 3 1.3% 1.3%
Staff (10%) Diversity (%)
2
4% 29.5% 30.0% 30.5% 33.5% 4.0% 4.0%
Employee engagement
3
6% 690 700 710 691 1.7% 1.7%
Personal (10%) Vary by Executive 10% see section below 10% 10%
Total 86.83% 86.83%
1. Targets – based on a sliding scale between threshold, target and maximum.
2. Diversity – based on the Group’s commitment to the Women in Finance Charter and the gender diversity of employees in senior roles.
3. Employee engagement – Sunday Times Top 100 Best Companies to Work For survey score.
2021 personal performance
The Executive Directors were allocated up to a maximum of 10% of their bonus based on their personal performance against agreed
objectives.
The objectives for 2021 were built around strategic priorities (as identified in our 2020 Annual Report) and cultural indicators.
Performance against these objectives for both Executive Directors was considered to be strong, with the delivery of key objectives in a
challenging and uncertain year.
The objectives set at the start of the year and the Committee’s assessment of performance against them are set out below:
Objectives Key achievements
CEO Deliver the Purpose, Vision and Values across the Group
whilst demonstrating role model behaviours considering
the perspective of all stakeholders.
Lived the OSB Group Values, leading by example and
ensuring employees understood the behaviours expected of
them through the pandemic.
Oversee the progression of the 2021 strategic objectives
in line with the Board-approved operating plan and as
underpinned by a medium-term goal to maintain the
Group’s franchises and brands, maintain a strong capital
base and position the Group to maximise opportunities,
throughout a period of anticipated economic uncertainty.
2021 strategic objectives delivered through economic
uncertainty with strong financial performance achieved and
progress on operational activities as described in full in the
Strategic Report (from page 10).
Maintain strong relationships with key stakeholders
including regulators and investors.
Strong support from investors during 2021 with open and
transparent relationship with regulators.
Ensure cost synergies for the Combination with CCFS are
delivered in line with strategic plan.
Integration of CCFS with OSB continues to be delivered on
track, including with respect to cost synergies.
CFO Oversee the progression of the 2021 strategic objectives
in line with the Board-approved operating plan and as
underpinned by the medium-term goal to maintain the
Group’s franchises and brands, maintain a strong capital
position and position the Group to maximise opportunities
throughout a period of anticipated economic uncertainty.
2021 strategic objectives delivered through economic
uncertainty with strong financial performance achieved and
progress on operational activities as described in full in the
Strategic Report (from page 10).
Successfully deliver planned harmonisation and
integration activities across Finance, Human Resources
and Treasury.
Key harmonisation and integration projects across Finance,
HR and Treasury departments delivered efficiently during
2021.
Strengthen the Banks’ capital and funding management. Capital and funding management processes have been
reviewed and improved to strengthen the Banks for the
future.
Directors’ Remuneration Report (Continued)
2021 Annual Report on Remuneration (Continued)

157
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Objectives Key achievements
Maintain strong relationships with key stakeholders
including regulators and investors.
Strong support from investors during 2021 with open and
transparent relationship with regulators.
Ensure cost synergies for the Combination with CCFS are
delivered in line with strategic plan.
Integration of CCFS with OSB continues to be delivered on
track, including with respect to cost synergies.
Based on this performance, the Committee determined that 10% of a possible 10% for the individual element of the bonus should be
paid to each of the CEO and CFO.
2021 bonus scheme payout
Taking into account the performance against the Balanced Business Scorecard and individual objectives, the CEO and CFO therefore
each earned 86.83% of maximum (95.5% of salary). This assessment and payout is consistent with the payout under employee plans
throughout the business. In line with regulatory requirements, half of the bonus will be paid in cash with the remainder deferred into
shares with the majority released after three years and the remainder vesting in equal tranches over three to seven years.
Long-term incentive plan (audited)
The 2019 LTIP award was granted on 14 March 2019 and measured performance over the three financial years to 31 December 2021.
Awards will vest after publication of this report, based on the EPS, TSR and RoE performance, at 87.16% of maximum, as set out below.
Given that the Combination with CCFS completed early in the performance period (c. nine months into a 36-month performance
period), the Committee determined that the EPS and RoE targets should be assessed on a combined basis against targets that were no
tougher or easier to achieve based on the business plan immediately before and after the Combination (the adjustments were agreed
by the Committee and the Chair of the Group Audit Committee).
Performance level
Percentage
of that part
of the award
vesting
EPS element
1
(40% of total
award)
EPS
performance
Vesting
of EPS
part
(40%
of total
award)
Relative TSR
(40% of total
award)
Relative TSR
performance
versus
FTSE 250
constituents
Vesting of
TSR part
(40%
of total
award)
Average
RoE
2,3
(20%
of total
award)
Average RoE
performance
Vesting
of RoE
part
(20%
of total
award)
Below ‘threshold’ 0% Less than
64.7p
86.7p 100% Below
median
51 out of 161 82.9% 19.6% 22.6% 70.0%
(5% CAGR)
‘Threshold’ 25% 64.7p Median 19.6%
(5% CAGR)
‘Stretch’ 100% 74.9p
Upper
quartile
24.6%
(10% CAGR)
1. EPS targets were set in 2019 prior to the Combination with CCFS based on a ‘Threshold’ target of 5% CAGR and a ‘Stretch’ target of 10% CAGR measured from the 2018 base
year.
2. RoE targets were set in 2019 prior to the Combination with CCFS based on achieving average RoE over 2018, 2019 and 2020 of between 20% for ‘Threshold’ vesting and 25%
for ‘Stretch’ vesting.
3. The RoE performance condition is based on the average RoE over the three-year performance period and is subject to an underpin requiring that the CET1 ratio is not below
the Board-approved minimum requirement, which has been met.
The Committee is comfortable that the level of vesting is in line with underlying performance, risk appetite, individual conduct and
shareholder experience over the performance period. As such, the awards will vest in March 2022, with the shares subject to a two-
year holding period.
The 2019 PSP awards will therefore vest as follows:
Executive Directors
Number of
shares granted
Number of shares
due to vest
Number of
shares lapsed
Value from share
price increase/
(decrease)
1
Total value
vesting
2
Andy Golding 199,959 174,284 25,675 210,814 890,662
April Talintyre 134,703 117,407 17,296 142,016 599,997
1. Value of share price increased/(decreased) based on a £3.9008 share price at the time of grant of the award compared to the three-month average share price of £5.1104 to
31 December 2021. The Committee is comfortable that discretion is not required as a result of share price appreciation.
2. Value of shares based on a three-month average share price of £5.1104 to 31 December 2021. This value will be restated next year based on the actual share price on the date
of vesting. Dividend equivalents are not paid under the Performance Share Plan.

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OSB GROUP PLC Annual Report and Accounts 2021
Executive pay outcomes in context
Percentage change in the remuneration of the Directors (audited)
The table below sets out the percentage change in base salary, value of taxable benefits and bonus for all the Directors compared
with the average percentage change for employees. For these purposes, UK employees who have been employed for over a year (and
therefore eligible for a salary increase) have been used as a comparator group as they are the analogous population (based on service
and location). The percentage change for Executive and Non-Executive Directors is calculated based on the remuneration disclosed
in the single figure tables on page 155. The percentage is not included for Non-Executive Directors who joined the Board in the year as
the disclosure would not be meaningful. The changes to salary/fees between 2019 and 2020 are as a result of changes made to pay
arrangements following the Combination of OSB with CCFS, which also is the reason for the increase in salary for the CEO between
2020 and 2021 when the second stage of his phased increase was implemented. There have been no material changes to the benefits
between 2019 and 2020 or between 2020 and 2021. The reduction in bonus for Executive Directors and employees between 2019 and
2020 is as a result of the pandemic impacting the 2020 BBS performance and the Directors waiving the cash portion of their bonus.
The increase in annual bonus between 2020 and 2021 is as a result of strong performance in 2021 as the business performed strongly
across the BBS in 2021, whereas the payout in 2020 was lower due to the pandemic impacting performance.
Salary / NED fees Taxable benefits Annual bonus
2019/20 2020/21 2019/20 2020/21 2019/20 2020/21
UK employees 5.5% 5.1% 0% 21.87%
3
-27.5% 34%
CEO 42.4% 10.9% 0% 0.6% -71.9% 366.1%
CFO 44.1% 1.6% 0% 0% -71.5% 330.1%
Graham Allatt 25.3% 0.9% 0% 0% n/a n/a
Noël Harwerth
1
n/a 0.9% n/a 285%
4
n/a n/a
Sarah Hedger
2
n/a (1,2%) n/a n/a n/a n/a
Rajan Kapoor
1
n/a (1.7%) n/a n/a n/a n/a
Mary McNamara 16.2% 0% 0% n/a n/a n/a
David Weymouth 16.7% 2.7% 0% n/a n/a n/a
1. Noël Harwerth and Rajan Kapoor joined the Board in October 2019.
2. Sarah Hedger joined the Board in February 2019.
3. Relates to the broader provision of our medical cash plan and the revision of car allowances following the harmonisation of benefits post Combination.
4. This relates to taxable travel expenses of £631.
Comparison of Company performance and CEO remuneration (audited)
The following table summarises the CEO single figure for total remuneration, annual bonus and LTIP payout as a percentage of
maximum opportunity for the period between 2013 and 2021.
2013 2014 2015 2016 2017 2018 2019 2020 2021
Annual bonus
(% of maximum opportunity) 92.5% 92.63% 93.00% 88.75% 85.00% 91.75% 75.89% 20.60% 86.83%
LTIP vesting
(% of maximum opportunity) – – – – 100.00% 50.00% 75.1% 62.74% 87.16%
CEO single figure of remuneration
(£’000) 518 777 848 910 1,614 1,602 1,382 1,510 2,571
1. The cash portion of the 2020 bonus was waived by the Executive Directors before they became entitled to it. As such, only the share portion of the 2020 bonus was payable
(i.e. half of the bonus of 41.2% of maximum).
Total shareholder return
The chart opposite shows the TSR performance of the Company over the period from listing to 31 December 2021 compared
totheperformance of the FTSE All Share Index. This index is considered to be the most appropriate index against which to
measureperformance as the Company has been a member of this index since Admission of OneSavings Bank plc to the London
StockExchange.
Directors’ Remuneration Report (Continued)
2021 Annual Report on Remuneration (Continued)

159
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Total shareholder return
400
200
250
300
350
150
100
50
5 June 2014 31 December 2014
Value (£) (Rebased)
31 December 2015 31 December 2016 31 December 2017
31 December 2018 31 December 2019 31 December 2020
31 December 2021
OSB GROUP PLC
FTSE All Share Index
This graph shows the value, at 31 December 2021, of £100 invested in OneSavings Bank plc on Admission (5 June 2014) and following
the insertion of a new holding company in November 2020, the shares of OSB GROUP PLC, compared with the value of £100 invested
in the FTSE All Share Index on the same date. The other points plotted are the values at intervening financial year ends.
Source: Datastream (Refinitiv)
CEO pay ratios
The ratio of the CEO’s single figure of total pay to median employee pay is set out in the table below. The ratio has been calculated
in accordance with methodology B as it is the same pay data for employees as is used for the gender pay gap analysis and is based
on pay and benefits as at 5 April each year. Full-time equivalent pay for individuals that do not work full time has been calculated by
increasing their pay pro-rata to that of a full-time individual. No further estimates or adjustments have been made. The employees
identified are considered to be representative of the quartile positions as their total pay is in line with expected positioning and the
proportion of fixed pay to variable pay is also in line with other individuals at those levels.
The median ratio decreased in the period between 2017 and 2019 as a result of a combination of factors, which resulted in the total
pay for the median individual within the workforce increasing, including positive changes to the Group’s pay policy and changes in the
employee population between 2018 and 2019. The decrease in the ratio between 2018 and 2019 was also due to the decrease in total
pay for the CEO.
The median ratio increased between 2019 and 2020 largely as a result of the decrease in the total pay for the median employee. This
was primarily as a result of OSB’s Combination with CCFS, which resulted in the UK employee population, with whom the CEO is
compared, doubling in size. The increase in the ratio between 2020 and 2021 is primarily due to changes in the CEO pay, which has
increased as a result of the staged salary increase upon Combination with CCFS; and due to higher incentive payouts than 2020,
which were adversely impacted by COVID-19.
There has been no change to the Group’s employment models during this period and the median ratio is consistent with the pay,
reward and progression policies within the Company. The Directors’ pay is set by the Committee with reference to both the internal
relativities across the Group and taking into account external market benchmarks. As such, the pay ratio is considered appropriate
and is not considered excessive, particularly when compared to other listed financial services companies.
CEO pay ratio 2017 2018 2019 2020 2021
Method B B B B B
CEO single figure 1,614 1,602 1,382 1,510 2,571
Upper quartile 62.1 59.5 54.6 51.6 82.2
Median 46.1 40.1 32.0 42.1 56.1
Lower quartile 24.8 22.3 22.5 28.1 35.9
2021
Basic salary
(£’000)
Total pay
(£’000)
CEO 815 2,571
Lower quartile – Employee A 26 31
Median – Employee B 37 46
Upper quartile – Employee C 58 72

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OSB GROUP PLC Annual Report and Accounts 2021
Relative importance of the spend on employee pay (audited)
The table below shows the Company’s total employee remuneration (including the Directors) compared to distributions to shareholders
and operating profit before tax for the year under review and the prior year. In order to provide context for these figures, underlying
operating profit as a key financial metric used for remuneration purposes, is shown.
2021 2020
Total employee costs £92.5m £86.0m
Distributions to shareholders
1
£86.7m £64.9m
Underlying profit before tax (PBT) £522.2m £346.2m
Total employee costs vs PBT 17.7% 24.8%
Average headcount 1,755 1,816
Average PBT per employee £297,550 £190,639
1. See note 17 to the financial statements.
Other disclosures relating to 2021 executive remuneration
Scheme interests awarded during the financial year (audited)
The table below shows the conditional share awards made to Executive Directors in 2021 under the PSP and the performance
conditions attached to these awards. The Committee has discretion to adjust the vesting level to ensure that the reward level reflects
underlying performance, risk and individual conduct. There will be full disclosure of the Committee’s deliberations on these matters in
the 2023 Directors’ Remuneration Report. The Awards will vest 20% each year between three and seven years after grant, with each
vested tranche subject to a one-year holding period:
Executive
Face value
of award
(percentage
of salary)
Face
value of
award
Number of
shares
1
Percentage
of awards
released for
achieving
threshold
targets
End of
performance period
Performance conditions
2
(weighting)
Andy Golding 110% £896,499 181,404 25% 31 December 2023 EPS (35%)
TSR (35%)
April Talintyre 110% £561,001 113,517 RoE (15%)
Non-financial/Risk (15%)
1. The number of shares awarded was calculated using a share price of £4.9420 (the closing price on the dealing day before grant on 15 April 2021).
2. Performance conditions are: (i) 35% TSR versus the FTSE 250 (25% vesting for median performance increasing to maximum vesting for upper quartile performance); (ii)
35% EPS (25% vesting for growth in EPS of 7% per annum increasing to maximum vesting for 16% per annum); (iii) 15% RoE (25% vesting for average RoE of 17% increasing
to maximum vesting for an average of 23%); and (iv) 15% non-financial/risk scorecard, performance for which is commercially sensitive (full disclosure will be provided
retrospectively).
All-employee share plans (audited)
Executive Date of grant Exercise price
Market price
31 December 2021 Exercisable from Exercisable to
Number
of options
granted
Number of
options as at
31 December
2021
Andy Golding 28 October 2020 £2.29013 £5.5450 1 December 2023 1 June 2024 7,859 7,859
April Talintyre 28 October 2020 £2.29013 £5.5450 1 December 2023 1 June 2024 7,859 7,859
Directors’ Remuneration Report (Continued)
2021 Annual Report on Remuneration (Continued)

161
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Statement of Directors’ shareholdings and share interests (audited)
Total shares owned by Directors:
Interest in shares Interest in share awards
1
Shareholding requirements
Beneficially
owned at
1 January
2021
Beneficially
owned at
31 December
2021
Without
performance
conditions at
31 December
2021
2
Subject to
performance
conditions
as at
31 December
2021
Shareholding
requirement
(percentage
of basic
salary)
Current
shareholding
(percentage
of basic
salary)
3
Executive Directors
Andy Golding 595,895 505,787 237,298 694,298 250% 435% (Met)
April Talintyre 268,122 325,855 159,487 461,101 200% 455% (Met)
Non-Executive Directors
Rajan Kapoor 19,970 19,970 – – – –
Mary McNamara
4
66,850 66,850 – – – –
David Weymouth 18,678 18,678 – – – –
Graham Allatt – – – – – –
Noël Harwerth – – – – – –
Sarah Hedger – – – – – –
1. Vested shares are held in a corporate nominee account and are subject to the relevant retention periods. This account is also used to monitor current and post employment
shareholding guidelines. The details of share options relating to the Executive Directors are set out on page 160. None of the current Directors hold vested but unexercised
share options and no share options have been exercised during 2021.
2. Includes DSBP awards granted on 15 April 2021 at a price of £4.9420 (CEO: 33,709 shares and CFO: 22,932 shares).
3. Shareholding based on the closing share price on 31 December 2021 (£5.5450) and year-end salaries; it also includes interest in share awards without performance
conditions (net of tax).
4. Includes 27,500 shares that are owned by spouse.
The Company operates an anti-hedging policy under which individuals are not permitted to enter into any personal hedging strategies
in relation to shares subject to a vesting and/or retention period.
External appointments
Andy Golding is a Director/Trustee of the Building Societies Trust Limited. He receives no remuneration for this position.
Payments to departing Directors (audited)
There were no payments made to past Directors during 2021.
How we will implement the Remuneration Policy for Directors in 2022
The Committee consider the Policy to be operating effectively and as such there are no material changes proposed for the operation
of the Remuneration Policy in the full year for 2022, which will be as follows:
Salary
The salaries for the CEO and CFO will be increased in 2022 by 4% to £847,600 and £530,400 respectively, which is below the average
workforce percentage increase of at least 5% that is generally linked to inflation.
Annual bonus
The 2022 annual bonus will be subject to a maximum limit of 110% of salary. The performance measures have been set in line with the
Balanced Business Scorecard. The Staff quadrant has been re-categorised as an ESG quadrant, with the broader metrics included
with respect to reducing the Group’s carbon footprint and for the first time an ethnic diversity metric is also included. The Personal
objectives are in line with key areas of focus for the year ahead and include embedding an ESG strategy and framework within the
business.
The weightings are split between the four quadrants and individual objectives to provide a balanced assessment of performance for
the year over key drivers of the long-term sustainable success of the Group. Accordingly, the balance of the metrics is set out on the
following page 162.
Performance targets are considered to be commercially sensitive so will not be published in advance. However, there will be full
disclosure of the targets set and the extent of their achievement in the 2022 Annual Report on Remuneration. The Committee may
apply discretion to adjust the resultant bonus if the result fails to reflect broader performance and the wider shareholder experience.
Half of any bonus will be delivered in shares and cannot be sold for at least three years.

162
OSB GROUP PLC Annual Report and Accounts 2021
Financial Customer Quality ESG Individual objectives
Sustainable financial
growth of the business
through attractive
margins and exceptional
returns, measured
across a range of
financial indicators
Helping our customers
and communities to
prosper in line with our
purpose
Strong governance
and quality of the
business underpins
ouroperations
To support our purpose Tailored to behaviour
in line with our values
and strategic priorities
including ESG
50% of bonus opportunity 15% of bonus opportunity 15% of bonus opportunity 10% of bonus opportunity 10% of bonus opportunity
Underlying PBT
All-in RoE
1
Cost to income ratio
1
Net loan book growth
Customer satisfaction
1
Broker satisfaction
Complaints
Overdue management
actions
Arrears
High-severity incidents
Carbon emissions
Gender diversity
Ethnic diversity
Employee engagement
Vary by Executive
Details of objectives
(and performance
against these)
will be disclosed
retrospectively in next
year’s report
1. Key performance indicators (see pages 2 to 3).
Performance Share Plan
PSP awards of 110% of salary will be made to the Executive Directors with performance being measured over the three-year period to
31 December 2024. Performance will be assessed against the same performance metrics and weightings as 2021 awards being based
on relative TSR versus the FTSE 250 (35% weighting), adjusted EPS growth (35% weighting), Return on Equity (15% weighting) and
Non-financial/Risk (15% weighting). The metrics and weightings provide a balanced assessment of corporate performance over three-
year periods taking into account financial, share price and non-financial metrics. The discretionary assessment at the time of vesting
ensures that the level is in line with underlying performance, risk appetite and individual conduct over the period.
The adjusted EPS growth and average RoE target ranges for the period to 2024 have been set taking into account the business plan,
external operating environment and market expectations. The EPS target range has a threshold target of 3% CAGR with a stretch
target of 10% CAGR. Whilst this would represent a significant increase in the level of EPS performance (in pence per share), these
growth rates are lower than those used for previous awards because the 2021 results (which are used as the base year) benefitted from
a number of significant items, including the net release of provisions for expected credit losses and fair value gains. Excluding these
items, the EPS growth targets would be more aligned with the ranges used for historical awards (other than the range set for the 2021
awards which we already reported was significantly higher than normal as the 2020 base year was adversely impacted by COVID-19
and other factors). The Committee is comfortable that the 2022 targets provide an appropriate level of stretch taking into account all
relevant factors. Similarly, the average RoE target which determines the vesting of 15% of the award has been set with a 17% average
required for threshold vesting and a 23% average for stretch vesting. These remain market leading levels of return. Similarly, the
average RoE target which determines the vesting of 15% of the award has been set with a 17% average required for threshold vesting
and a 23% average for Stretch vesting. These remain market leading levels of return.
Overall, the Committee is comfortable that these targets provide the appropriate stretch and link between pay and performance
delivered; and are at least as stretching as target ranges in prior years.
Metrics Weighting
Threshold
(25% of maximum)
Stretch
(100% of maximum) Rationale
Adjusted EPS growth
1
35% 3% CAGR 10%
CAGR
Measures the sustainable financial growth
of the business
Relative TSR versus FTSE 250 35% Median Upper
quartile
Measures the success of the Company
versus other listed companies
Average RoE
1
15% 17% 23% Measures the sustainable financial growth
of the business
Non-financial/Risk 15% See below Strong governance and quality of the
business underpins our operations
1. Key performance indicators (see pages 2 to 3). No vesting below threshold and prorata vesting between threshold and stretch
For the risk-based measure, the Committee will assess the risk management performance with regard to all relevant risks including,
but not limited to, conduct, credit, funding, liquidity, market, operational and regulatory risk. There will be full retrospective disclosure
of the Committee’s assessment.
Awards will vest 20% each year between three and seven years after grant, with each vested tranche subject to a one-year holding
period.
Directors’ Remuneration Report (Continued)
2021 Annual Report on Remuneration (Continued)

163
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Share ownership guidelines
The CEO and the CFO are required to accumulate and maintain a holding in ordinary shares in the Company equivalent to no less
than 250% of salary and 200% of salary, respectively. This is calculated on the basis of the value of beneficially owned shares plus the
net of tax value of deferred bonus shares or any other unvested share awards which are not subject to performance conditions. Half
of any vested share awards must be retained until the guideline is achieved. Based on the current share price, the CEO and CFO hold
shares in excess of these levels. From 2020, the guidelines also apply for two years following cessation of employment.
Chairman and Non-Executive Director fees
The fees for the Chairman and NEDs were reviewed and the rates for 2022 are set out below. The fee payable to the Chairman was
reviewed by the Committee and it agreed that the fee for 2022 would be increased to £330,000 from £300,000. The fees payable
to the NEDs were also reviewed by the Board (minus the NEDs) during 2021 and for 2022 the base fee will be increased to £80,000
(from £70,000) and the fees for membership of the Group Audit, Remuneration and Risk Committees will be increased to £7,500 (from
£5,000). The increases were considered appropriate by the Board to reflect the time and responsibilities of the NED roles, taking
into account the increased size of the business since they were last reviewed, the greater fiduciary responsibilities and the degree
of regulatory responsibilities involved in discharging the duties at a proportionality level 2 bank. The fees were last reviewed in 2020
following the Combination of OSB with CCFS and no increases were provided in 2021. The fees remain in line with other listed banks
of a similar size to OSB Group. Sarah Hedger has been appointed as the ESG Champion to provide independent input into the Group’s
ESG strategy and will receive an additional fee of £7,500 for this role.
Base fees £’000
Chairman
1
330
Non-Executive Director 80
Senior Independent Director 20
Additional Board Committee fees Chair Member
Group Nomination and Governance Committee 20 5
Group Audit Committee 30 7.5
Group Remuneration Committee 30 7.5
Group Risk Committee 30 7.5
Group Models and Ratings Committee 10 5
1. The Chairman’s fee is inclusive of all duties; no additional Chair or Member fees are paid in relation to Board Committees.
Statement of voting at the Annual General Meeting
Shareholders were asked to approve the 2020 Annual Report on Remuneration and the Directors’ Remuneration Policy at the 2021
AGM. The votes received are set out below:
Resolution Votes for
% of votes
cast Votes against
% of votes
cast Total votes cast
Votes
withheld
To approve the 2020 Remuneration Report
(2021 AGM)
379,171,085 99.28% 2,750,405 0.72% 381,921,490 3,211
To approve the Remuneration Policy
(2021 AGM)
380,816,449 99.98% 65,570 0.02% 380,882,019 1,025,114
Major shareholders and shareholder advisory bodies were consulted in early 2021, to offer an opportunity for them to provide the
Committee with feedback on the proposed approach for 2021 and with respect to the fact that the same Remuneration Policy
was being re-submitted in line with legal requirements, following the insertion of a new legal entity as the listed entity and holding
company for the Group. There were no concerns raised.
Approval
This report was approved by the Board of Directors (on the recommendation of the Group Remuneration Committee) and signed on its
behalf by:
Mary McNamara
Chair of the Group Remuneration Committee
17 March 2022

164
OSB GROUP PLC Annual Report and Accounts 2021
Share capital and rights attaching to shares
The Company had 448,627,855 ordinary shares of £0.01 each in
issue as at 31 December 2021.
On 26 February 2021, the nominal value of the ordinary shares
was reduced from £3.04 each to £0.01 each.
Further details relating to share capital can be found in note 43.
Without prejudice to any special rights previously conferred
on the holders of any existing shares or class of shares,
any share in the Company may be issued with such rights
(including preferred, deferred or other special rights) or such
restrictions, whether in regard to dividend, voting, return of
capital or otherwise as the Company may from time to time by
ordinary resolution determine (or, in the absence of any such
determination, as the Directors may determine).
Authorities to allot and pre-emption rights
On 27 May 2021, shareholders re-established the general
authority for the Directors to allot up to £1,493,317.65 of the
nominal value of ordinary shares of £0.01 each. In addition,
shareholders gave authority for the Directors to grant rights to
subscribe for, or to convert any security into, regulatory capital
convertible instruments up to £537,594.06 of the nominal value of
ordinary shares equivalent to 12% of issued share capital.
Repurchase of shares
The Company has an unexpired authority to repurchase ordinary
shares up to a maximum of 44,799,505 ordinary shares. The
Company did not repurchase any of its ordinary shares during
2021 (2020: none). On 17 March 2022, the Company announced
that it will commence a £100m share repurchase programme
over 12 months.
Employee share schemes
The details of the Company’s employee share schemes are set
out on pages 149 and 150 in the Directors’ Remuneration Report
and in the Employee engagement section below.
Results, dividends and dividend waiver
The results for the year are set out in the Statement of
Comprehensive Income on page 180. Our dividend policy for
2022 remains a payout ratio of at least 25% of underlying
profit after taxation to ordinary shareholders. The Directors
recommend the payment of a final dividend of 21.1 pence per
share payable on 18 May 2022, subject to approval at the AGM
on 12 May 2022, with an ex-dividend date of 24 March 2022
and a record date of 25 March 2022 (2020: 14.5 pence total
dividend).
The OSB GROUP PLC Employee Benefit Trust, which holds
848,221 shares in the Company in connection with the operation
of the Group’s share plans, has lodged standing instructions to
waive dividends on shares held by it that have not been allocated
to employees. The total amount of dividends waived during 2021
was £185,476.
Directors and Directors’ interests
The names of the Directors who served during the year can be
found in the attendance chart on page 122.
Directors’ interests in the shares of the Company are set out
on page 161 in the Directors’ Remuneration Report. None of
the Directors had interests in shares of the Company greater
than 0.33% of the ordinary shares in issue. There have been no
changes to Directors’ interests in shares since 31 December 2021.
Equal opportunities
The Group is committed to applying its Diversity and Inclusion
Policy at all stages of recruitment and selection. Short-listing,
interviewing and selection will always be carried out without
regard to gender, gender reassignment, sexual orientation,
marital or civil partnership status, colour, race, nationality, ethnic
or national origins, religion or belief, age, pregnancy or maternity
leave or trade union membership. Any candidate with a disability
will not be excluded unless it is clear that the candidate is unable
to perform a duty that is intrinsic to the role, having taken into
account reasonable adjustments. Reasonable adjustments to
the recruitment process will be made to ensure that no applicant
is disadvantaged because of his/her disability. Line Managers
conducting recruitment interviews will ensure that the questions
they ask job applicants are not in any way discriminatory or
unnecessarily intrusive. This commitment also applies to existing
employees, with the necessary adjustments made, where there is
a change in circumstances.
Employee engagement
Employees are kept informed of developments within the
business and in respect of their employment through a variety of
means, such as employee meetings, briefings and the intranet.
Employee involvement is encouraged and views and suggestions
are taken into account when planning new products and
projects.
The Sharesave ‘save as you earn’ Scheme is an all-employee
share option scheme which is open to all UK-based employees.
The Sharesave Scheme allows employees to purchase options
by saving a fixed amount of between £10 and £500 per month
over a period of either three or five years, at the end of which
the options, subject to leaver provisions, are usually exercisable
(options granted prior to 2021 have a lower limit of £5 and only
a three-year scheme will be offered from 2021 onwards). The
Sharesave Scheme has been in operation since June 2014 and
options are granted annually, with the exercise price set at a 20%
discount of the share price on the date of grant.
A Workforce Advisory Forum (known as OneVoice) is in place
to gather the views of the workforce to enable the Board and
Group Executive Committee to consider a broadly representative
range of stakeholder perspectives to guide strategic decisions
for the future of the Group. OneVoice consists of volunteer
representatives (of which there are 30 in total) from each of
the various business areas and locations, as well as permanent
members including a designated NED, Mary McNamara; a
member of the Group Executive Committee, Jason Elphick; and a
representative from HR Management. Other NEDs and members
of the Group Executive Committee are invited to attend meetings
throughout the year.
Members of the Board are keen to engage with our employees
across all locations and find the experience of visiting our
branches and offices within the UK and India invaluable;
however, due to travel restrictions being in place throughout 2021
as a result of the ongoing impact of COVID-19, these visits have
not been physically possible for most of the year. It is hoped that
now restrictions have been lifted, visits to branches and offices
will resume.
Further information in relation to the Board’s engagement with
the Group’s stakeholders including customers, intermediaries,
shareholders, suppliers, regulators and communities, can be
found on pages 16 to 19.
Directors’ Report: Other Information

165
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
During 2021, four OneVoice meetings were held. In advance of
each meeting, employee representatives are encouraged to
engage with employees within their nominated business areas
and across all Group locations to identify topics impacting the
workforce, which it is felt should be brought to the attention of
the Board and Group Executive Committee. A number of items
were considered and discussed by OneVoice, including the 2021
Financial Services Culture Board survey results and COVID-19,
as well as topics relating to ESG matters such as culture,
diversity and inclusion, diversity and recruitment at senior
levels, general well-being and mental health first aiders within
the workplace, governance of pay within the Group and return
to office arrangements. The permanent members of OneVoice
were particularly interested in feedback from the workforce
on employee morale, employee engagement and the new
Stewardship value.
The Group is committed to diversity and to making sure everyone
in our business feels included. The Diversity and Inclusion
Working Group continued to develop the Group’s Diversity
and Inclusion Strategy in line with the Respect Others value
throughout 2021. The Diversity and Inclusion Working Group
brings together a broad mix of employees (26 members) from
across the UK business, as well as representation from OSB
India, to drive our diversity and inclusion agenda to appreciate
differences in age, gender, ethnicity, religion, disability, sexual
orientation, education, socio-economic background and
national origin and ensure that all employees are treated fairly,
with respect and given equal opportunities. Jason Elphick, our
Diversity Champion, along with the Diversity and Inclusion
Working Group, hosted a number of activities throughout the
year including International Women’s Day, attended by our
SID (Noël Harwerth) and Group Chief Internal Auditor (Lisa
Odendaal), menopause training, mental health first aid and a
Q&A session during National Inclusion Week with attendance
from the Chair of the Group Audit Committee, Rajan Kapoor and
Chair of the Group Remuneration Committee and designated
NED for employee matters, Mary McNamara. Members and
colleagues from the working group also shared their experiences
and reflected on what it meant to them to be #unitedforinclusion,
the theme for National Inclusion Week in 2021.
Further details can be found in the on pages 95 to 103.
Greenhouse gas emissions
Information relating to greenhouse gas emissions, energy
consumption and actions towards energy efficiency can be
found on pages 76 to 85.
Political donations
Shareholder authority to make aggregate political donations
not exceeding £50,000 was obtained at the AGM on 27 May
2021. Neither the Company nor any of its subsidiaries made any
political donations during the year.
Notifiable interests in share capital
At 31 December 2021, the Company had received the following
notifications of major holdings of voting rights pursuant to
the requirements of Rule 5 of the Disclosure Guidance and
Transparency Rules:
No. of
ordinary shares
% of issued
share capital
Jupiter Fund Management Plc
1
53,042,940 11.81
Standard Life Aberdeen 25,088,457 5.61
Elliot Investment Management, L.P. 22,197,844 4.95
Eleva Capital SAS
2
14,851,300 3.32
Norges Bank
3
13,383,341 2.99
GLG Partners LP gave notice that its shareholding fell below the
notifiable threshold.
Since 31 December 2021, the Company received the following
notifications:
- On 11 February 2022, Jupiter Fund Management Plc
1
notified
that it had reduced its shareholding to  ordinary
shares
 On 18 February 2022, Jupiter Fund Management Plc
1
further
notified that it had reduced its shareholding to 
ordinary shares
 On 11 March 2022, Jupiter Fund Management Plc
1
further
notified that it had reduced its shareholding to 
ordinary shares
1. Includes up to 0.03% of financial instruments.
2. Includes 1.0% of financial instruments.
3. Includes 0.01 % of financial instruments.
Annual General Meeting
Accompanying this report is the Notice of the AGM which sets out
the resolutions to be proposed to the meeting, together with an
explanation of each. This year’s AGM will be held at our offices
at 90 Whitfield Street, Fitzrovia, London W1T 4EZ on 12 May 2022
at 11am.
Other information
Likely future developments in the Group are contained in the
Strategic Report on pages 10 to 113.
Information on financial instruments including financial risk
management objectives and policies including the policy for
hedging the exposure of the Group to price risk, credit risk,
liquidity risk and cash flow risk can be found in the Risk review on
pages 69 to 73.
Details on how the Company has complied with section 172 can
be found throughout the Strategic and Directors’ Reports and on
page 16 to 19.
Details relating to post-balance sheet events are set out in
note52.

166
OSB GROUP PLC Annual Report and Accounts 2021
Directors’ Report: Other Information (Continued)
Going concern statement
The Board undertakes regular rigorous assessments, in
accordance with the ‘Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting’,
published by the Financial Reporting Council in September
2014, of whether the Group is a going concern in light of current
economic conditions and all available information about future
risks and uncertainties.
In assessing whether the going concern basis is appropriate,
projections for the Group have been prepared, covering its
future performance, capital and liquidity for a period in excess
of 12 months from the date of approval of these Financial
Statements. These forecasts have been subject to sensitivity
tests, including stress scenarios, which have been compared to
the latest economic scenarios provided by the Group’s external
economic advisors, as well as reverse stress tests. In making the
assessment the Board has considered all principal and emerging
risks including climate risk where the risk is likely to emerge
outside of the going concern assessment horizon.
The assessments include the following:
} Financial and capital forecasts were prepared under stress
scenarios, which were assessed against the latest economic
forecasts provided by the Group’s external economic
advisors. Reverse stress tests were also run, to assess what
combinations of House Price Index (HPI) and unemployment
variables would result in the Group utilising its regulatory
capital buffers in full and breaching the Group’s minimum
prudential requirements, along with analysis and insight from
the Group’s ICAAP. The Directors assessed the likelihood of
those reverse stress scenarios occurring within the next 12
months and concluded that the likelihood is remote.
} The latest liquidity and contingent liquidity positions and
forecasts were assessed against the ILAAP stress scenarios.
} The Group continues to assess the resilience of its business
operating model and supporting infrastructure in the
context of the emerging economic, business and regulatory
environment. The key areas of focus continue to be on the
provision of critical services to customers, employee health
and safety and evolving governmental policies and guidelines.
The Group continues to invest in its information technology
platforms to support its employees with flexible working
from office or homeworking across all locations within a
hybrid working model. The Group’s response to the COVID-19
pandemic demonstrated the inherent resilience of the Group’s
critical processes and infrastructure. It also highlighted the
necessary agility in responding to changing operational
demands. The operational dependencies on third party
vendors and outsourcing arrangements continue to be an
important area of focus.
The Group’s financial projections demonstrate that the Group
has sufficient capital and liquidity to continue to meet its
regulatory requirements as set out by the PRA.
The Board has therefore concluded that the Group has sufficient
resources to continue in operational existence for a period in
excess of 12 months and as a result, it is appropriate to prepare
these Financial Statements on a going concern basis.
Key information in respect of the Group’s SRMF and objectives
and processes for mitigating risks, including liquidity risk, are set
out in detail on pages 50 to 57.
Approved by the Board and signed on its behalf by:
Jason Elphick
Group General Counsel and Company Secretary
OSB GROUP PLC
Registered number: 11976839
17 March 2022

167
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Statement of Directors’ Responsibilities
in respect of the Annual Report and the financial statements
The Directors are responsible for preparing the Annual Report
and the Group and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial year.
Under that law they are required to prepare the Group financial
statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs as adopted
by the EU) and applicable law and have elected to prepare the
parent Company financial statements on the same basis.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent Company
and of their profit or loss for the year. In preparing each of the
Group and parent Company financial statements, the Directors
are required to:
} select suitable accounting policies and then apply them
consistently;
} make judgements and estimates that are reasonable, relevant
and reliable;
} state whether they have been prepared in accordance with
IFRSs as adopted by the EU;
} assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern; and
} use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the parent Company and
the Group enabling them to ensure that the financial statements
comply with the Companies Act 2006. They are responsible for
such internal control as they determine is necessary to enable
the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the
annual financial report
Each of the persons who is a Director at the date of approval of
this report confirms, to the best of their knowledge, that:
} the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
} the Strategic Report/Directors’ Report includes a fair review
of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
Each of the persons who is a Director at the date of approval of
this report confirms that:
} so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
} they have taken all the steps they ought to have taken as a
Director in order to make themselves aware of any relevant
audit information and to establish that the Company’s
auditors are aware of that information.
Approved by the Board and signed on its behalf by:
Jason Elphick
Group General Counsel and Company Secretary
17 March 2022

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OSB GROUP PLC Annual Report and Accounts 2021
Financial Statements
andNotes
170 Independent Auditor’s Report
180 Consolidated Statement of Comprehensive Income
181 Consolidated Statement of Financial Position
182 Consolidated Statement of Changes in Equity
183 Consolidated Statement of Cash Flows
184 Notes to the Consolidated Financial Statements

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Overview Strategic Report Governance Financial Statements Appendices
…the operational and financial
performance of OSB Group, and
delivery of record profits, prove
once again the resilience of our
strategy and business model…

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OSB GROUP PLC Annual Report and Accounts 2021
Independent Auditor’s Report
To the Members of OSB GROUP PLC
Report on the audit of the financial statements
1. Opinion
In our opinion:
} the financial statements of OSB GROUP PLC (the ‘parent company’) and its subsidiaries (the ‘Group’) give a true and fair view of the
state of the Group’s and of the parent company’s affairs as at 31 December 2021 and of the Group’s profit for the year then ended;
} the Group financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards;
} the parent company financial statements have been properly prepared in accordance with United Kingdom adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
} the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
} the consolidated statement of comprehensive income;
} the consolidated and parent company statements of financial position;
} the consolidated and parent company statements of changes in equity;
} the consolidated and parent company statements of cash flow;
} the related notes 1 to 55 of the consolidated financial statements; and
} the related notes 1 to 6 of the parent company financial statements.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted
international accounting standards and, as regards the parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements
section of our report.
We are independent of the Group and the parent company in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We confirm that
we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the parent company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters The key audit matters that we identified in the current year were:
} loan impairment provisions; and
} effective interest rate income recognition.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality The materiality that we used for the Group financial statements was £20m which was determined by
reference to profit before tax and net assets.
Scoping Our Group audit scope focused primarily on three subsidiaries subject to a full scope audit. The subsidiaries
selected for a full scope audit were OneSavings Bank plc, Charter Court Financial Services Limited and
Interbay ML Ltd. These three subsidiaries account for 97% of the Group’s total assets, 99% of the Group’s
total liabilities, 98% of the Group’s interest receivable and similar income and 96% of the Group’s profit
before tax.
Significant changes
in our approach
In the prior year, our key audit matter in respect of loan impairment provisions included the probability of
default (PD) related to borrowers who had taken advantage of payment holidays and the Group’s newly
implemented approach to indexing OneSavings Bank’s commercial properties. As the payment holiday
scheme has now ended and the Group’s approach to indexing OneSavings Bank’s commercial properties is
established, these areas no longer feature in our loan impairment provisions key audit matter.

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Overview Strategic Report Governance Financial Statements Appendices
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and parent company’s ability to continue to adopt the going concern basis
of accounting included:
} We obtained and read management’s going concern assessment, which included consideration of the Group’s operational
resilience, in order to understand, challenge and evidence the key judgements made by management;
} We obtained an understanding of relevant controls around management’s going concern assessment;
} We obtained management’s income statement, balance sheet and capital and liquidity forecasts and challenged key assumptions
and their projected impact on capital and liquidity ratios, particularly with respect to loan book growth and potential credit losses;
} Supported by our in-house prudential risk specialists, we read the most recent ICAAP and ILAAP submissions, assessed
management’s capital and liquidity projections, assessed the results of management’s capital reverse stress testing, challenged
key assumptions and methods used in the capital reverse stress testing model and tested the mechanical accuracy of the capital
reverse stress testing model;
} We read correspondence with regulators to understand the capital and liquidity requirements imposed by the Group’s regulators,
and evidence any changes to those requirements;
} We met with the Group’s lead regulators, the Prudential Regulation Authority and the Financial Conduct Authority, and discussed
their views on existing and emerging risks to the Group and we considered whether these were reflected appropriately in
management’s forecasts and stress tests;
} We assessed the historical accuracy of forecasts prepared by management; and
} We assessed the appropriateness of the disclosures made in the financial statements in view of the FRC guidance.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and parent company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.

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OSB GROUP PLC Annual Report and Accounts 2021
Independent Auditor’s Report (Continued)
To the Members of OSB GROUP PLC
5.1. Loan impairment provisions
Refer to the judgements in applying accounting policies and critical accounting estimates on page 194 and note 24 on page 207.
Key audit matter
description
IFRS 9 requires loan impairment provisions to be recognised on an expected credit loss (ECL) basis. The
estimation of ECL provisions in the Group’s loan portfolios is inherently uncertain and requires management
to make significant judgements and estimates. ECL provisions as at 31 December 2021 were £101.5m (2020:
£111.0m), which represented 0.48% (2020: 0.58%) of loans and advances to customers. ECLs are calculated
both for individually significant loans and collectively on a portfolio basis which require the use of statistical
models incorporating loss data and assumptions on the recoverability of customers’ outstanding balances.
The uncertain economic environment continues to increase the complexity in estimating ECLs, particularly
with regards to determining appropriate forward looking macroeconomic scenarios and appropriately
identifying significant increases in credit risk. The ECL provision requires management to make significant
judgements and estimates. We therefore consider this to be a key audit matter due to the risk of fraud or
error in respect of the Group’s ECL provision.
We identified three specific areas in relation to the ECL that require significant management judgement or
relate to assumptions to which the overall ECL provision is particularly sensitive.
} Significant increase in credit risk (SICR): The assessment of whether there has been a significant increase
in credit risk between the date of origination of the exposure and 31 December 2021. There is a risk that
management’s staging criteria does not capture SICR and/or are applied incorrectly.
} Macroeconomic scenarios: As set out on page 194, the Group sources economic forecasts from a third-
party economics expert and then applies judgement to determine which scenarios to select and the
probability weightings to assign. The Group considered four probability weighted scenarios, including
base, upside, downside and severe downside scenarios. The key economic variables were determined
to be the house price index (HPI) and unemployment. Due to the continuing uncertain economic
environment, including uncertainty in relation to future increases in borrowers’ and tenants’ costs of living
and rises in inflation, there have been changes to the economic assumptions in each of the scenarios, as
well as a change to the weightings applied to each scenario. There is significant judgement in determining
the probability weighting of each scenario and the assumptions and characteristics of each scenario
applied.
} Propensity to go into possession following default (PPD) and forced sale discount (FSD) assumptions: PPD
measures the likelihood that a defaulted loan will progress into repossession. FSD measures the difference
in sale proceeds between a sale under normal conditions and sale at auction. The loss given default (LGD)
by loan assumed in the ECL provision calculation is highly sensitive to the PPD and FSD assumptions.
How the scope of our
audit responded to
the key audit matter
We obtained an understanding of the relevant financial controls over the ECL provision with particular focus
on controls over significant management assumptions and judgements used in the ECL determination.
To challenge the Group’s SICR criteria, we:
} Evaluated the Group’s SICR policy and assessed whether it complies with IFRS 9;
} Assessed the quantitative and qualitative thresholds used in the SICR assessment by reference to
standard validation metrics including the proportion of transfers to stage two driven solely by being 30
days past due, the volatility of loans in stage two and the proportion of loans that spend little or no time in
stage two before moving to stage three;
} Tested the completeness and accuracy of data used in applying the quantitative and qualitative criteria in
the SICR assessment to assess whether loans were assigned to the correct stage;
} Supported by our credit risk specialists, identified and challenged all changes made to the computer code
used to perform the SICR assessment, having performed a full review of the computer code in previous
audits;
} As part of our testing of the application of the SICR criteria within the ECL model and with support from
our credit risk specialists, we independently reperformed management’s staging assessment across all
three stages using our in-house analytics tool; and
} Performed an independent assessment for a sample of loan accounts which exited forbearance, to
determine whether they had been appropriately allocated to the correct stage.

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Overview Strategic Report Governance Financial Statements Appendices
To challenge the Group’s macroeconomic scenarios and the probability weightings applied we:
} Agreed the macroeconomics scenarios used in the ECL model to reports prepared by management’s
third-party economics expert;
} Assessed the competence, capability and objectivity of the third-party economics expert, which
included making specific inquiries to understand their approach and modelling assumptions to derive the
scenarios;
} Supported by our economic specialists, assessed and challenged management’s assessment of scenarios
considered and the probability weightings assigned to them in light of the economic position as at
31 December 2021;
} Involved our economic specialists to challenge the Group’s economic outlook by reference to other
available economic outlook data;
} Compared the appropriateness of selected macroeconomic variables and weightings to those used by
peer lenders. The key economic variables were the house price index (HPI) and unemployment;
} Assessed management’s approach to the incorporation and quantification of emerging risks within
the ECL model, including forecast cost of living increases and climate change. We confirmed that the
emerging risks were not already captured within the existing ECL model, challenged key assumptions, and
tested the completeness and accuracy of data used within the assessment;
} Supported by our credit risk specialists, assessed and challenged the changes made to the model
methodology and computer code used in the macroeconomics model which applies the scenarios to the
relevant ECL components, having performed a full review of the computer code of the macroeconomics
model in previous audits;
} Supported by our credit risk specialists, assessed the performance of the macroeconomic model to
confirm whether the economic variables previously selected were still appropriate in light of the uncertain
economic environment through considering the modelled macroeconomic results relative to those
observed in historical recessions; and
} For a sample of loans, we independently recalculated the ECL using the macroeconomic variables to
check they were being applied appropriately.
To challenge the Group’s PPD and FSD assumptions we:
} Supported by our credit risk specialists, identified and challenged all changes made to computer code in
the LGD models, having performed a full review of the computer code in previous audits;
} Recalculated the PPD rates observed on defaulted cases and compared them with the rates used by the
Group in the ECL models;
} Recalculated the FSD observed on recent property sales on the defaulted accounts and compared them
with the rates used by the Group in the ECL models;
} Considered the findings raised in management’s independent model validation conducted in 2021 and
assessed the impact on the year-end provision; and
} As a stand back test to consider potential contradictory evidence, assessed the appropriateness of PPD
and FSD assumptions adopted by management through benchmarking to industry peers.
To address the risk of material misstatement in loan impairment due to fraud, our work included testing the
existence of a sample of collateral related to funding lines.
Key observations We determined that the methodology used, the SICR criteria and PPD and FSD assumptions management
has made in determining the ECL provision as at 31 December 2021 were reasonable.
Notwithstanding that estimating the probability and impact of future economic outcomes is inherently
judgemental and that there is continuing economic uncertainty, on balance, we consider that the
macroeconomic scenarios selected by the Directors and the probability weightings applied generate
an appropriate portfolio loss distribution. We therefore determined that loan impairment provisions are
appropriately stated.

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OSB GROUP PLC Annual Report and Accounts 2021
Independent Auditor’s Report (Continued)
To the Members of OSB GROUP PLC
5.2. Effective interest rate income recognition
Refer to the judgements in applying accounting policies and critical accounting estimates on page 195, the accounting policy on
pages 185 and 186 and notes 4 and 5 on page 196.
Key audit matter
description
In accordance with the requirements of IFRS 9, management is required to spread directly attributable
fees, discounts, incentives and commissions on a constant yield basis (effective interest rate, EIR) over the
expected life of the loan assets. EIR is complex and the Group’s approach to determining the EIR involves
the use of models and significant estimation in determining the behavioural life of loan assets. Given the
complexity and judgement involved in accounting for EIR and given that revenue recognition is an area
susceptible to fraud, there is an opportunity for management to manipulate the amount of interest income
reported in the financial statements.
The Group’s net interest income for the year ended 31 December 2021 was £587.6m (2020: £472.2m).
EIR adjustments arise from revisions to estimated cash receipts or payments for loan assets that occur for
reasons other than a movement in market interest rates or credit losses. They result in an adjustment to
the carrying amount of the loan asset, with the adjustment recognised in the income statement in interest
receivable and similar income. As the EIR adjustments reflect changes to the timing and volume of forecast
customer redemptions, they are inherently judgemental. The level of judgement exercised by management
is increased given the limited availability of historical repayment information. For two of the loan portfolios,
KRBS and Precise, the EIR adjustments are sensitive to changes in the behavioural life curves. As set out on
page 44, changes in the modelled behavioural life of these portfolios during the year resulted in an interest
income gain of £11.5m (2020: £nil), we therefore considered there to be an increased level of risk in respect of
this key audit matter in the current year.
The continuing uncertain economic environment brings additional uncertainty with regards to forecasting
expected behavioural lives and prepayment rates. We therefore identified the estimation of the behavioural
life for these portfolios as a focus area of our audit.
We also identified a key audit matter in relation to EIR adjustments on the Group’s legacy acquired portfolios.
EIR on acquired loan portfolios is inherently more judgemental than originated loan portfolios as it involves
modelling the expected cash flows on acquisition and comparing to actual and forecast cash flows at each
balance sheet date. These loan portfolios are also underwritten outside of the Group’s standard processes
and therefore may have different profiles than self-originated loans.
How the scope of our
audit responded to
the key audit matter
We obtained an understanding of the relevant controls over EIR, focusing on the calculation and review of EIR
adjustments and the determination of prepayment curves.
For the two portfolios where the EIR adjustments were most significant and sensitive to changes in
behavioural life, we involved our in-house analytics and modelling specialists to run the Group’s loan data for
all products through our own independent EIR model, using the behavioural life curves derived by the Group.
We compared our calculation of the EIR adjustment required to the amount recorded by management.
For the same portfolios, we involved our in-house modelling specialists to independently derive a behavioural
life curve using the Group’s loan data over recent years. We used these curves in our own independent EIR
model to derive an independent output showing the EIR adjustments that should have been recorded in 2021.
We compared this output to the amounts recorded by management.
We also tested the completeness and accuracy of a sample of inputs into the EIR model for originated loans.
For the legacy acquired portfolios, supported by our analytics and modelling specialists, we challenged the
assumptions and modelling approach taken to determine the EIR adjustments, tested the completeness and
accuracy of a sample of inputs to the modelling, re-performed the discounted cash flow calculations and
challenged whether forecasts were consistent with historical performance and our understanding of the
nature of the cash flows.
Key observations Notwithstanding that estimating the future behaviour of loan assets is inherently judgemental and that
there is continuing economic uncertainty, we determined that the EIR models and assumptions used were
appropriate and that net interest income for the period is appropriately stated.

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Overview Strategic Report Governance Financial Statements Appendices
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent company financial statements
Materiality £20.1m (2020: £14.0m) £15.8m (2020: £13.3m)
Basis for determining
materiality
We determined materiality for the Group by
reference to 1% of net assets of £2,024.4m
(£20.1m), and 5% of statutory profit before tax of
£464.6m (£23.2m).
We determined materiality for the parent company
by reference to 1% of net assets.
Rationale for the
benchmark applied
Consistent with the prior year, we considered
both net assets and a profit-based measure as
benchmarks for determining materiality.
We determined 1% of net assets to be the most
relevant and stable benchmark to determine
materiality.
In the prior year, we capped materiality at
the 2019 materiality level of £14m, based on
the significant economic uncertainty resulting
from the emergence of Covid-19. Whilst some
economic uncertainty remains, the impact of
Covid-19 was not as pervasive as 2020 and we
have therefore removed the prior year cap.
The parent company is principally a holding
company and we have therefore determined
net assets to be the most relevant benchmark to
determine materiality.
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements Parent company financial statements
Performance materiality 60% (2020: 60%) of Group materiality 60% (2020: 60%) of parent company materiality
Basis and rationale for
determining performance
materiality
Group performance materiality was set at 60% of Group materiality (2020: 60%). In determining
performance materiality, we considered a number of factors, including: our understanding of
the control environment; our understanding of the business; and the low number of uncorrected
misstatements identified in the prior year. In the prior year we reduced performance materiality in
response to the potentially pervasive impact of Covid-19 and remote working on the Group’s control
environment and financial reporting. In the current year, to reflect that remote and hybrid working
has continued to some extent, we retained performance materiality at the prior year level.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £1,005k (2020: £700k),
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit
Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

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OSB GROUP PLC Annual Report and Accounts 2021
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls and
assessing the risks of material misstatement at the Group level.
Our Group audit scope focused primarily on three subsidiaries: the two main banking entities OneSavings Bank plc and Charter Court
Financial Services Limited, as well as Interbay ML Ltd, another significant lending subsidiary. These three subsidiaries were significant
components and subject to a full scope audit (2020: three significant components subject to a full scope audit). They represent 98%
(2020: 96%) of the Group’s interest receivable and similar income, 96% (2020: 98%) of profit before tax, 97% (2020: 98%) of total assets
and 99% (2020: 98%) of total liabilities. The subsidiaries were selected to provide an appropriate basis of undertaking audit work to
address the risks of material misstatement including those identified as key audit matters above. Our audits of each of the subsidiaries
were performed using lower levels of materiality based on their size relative to the Group. The materiality for each subsidiary audit
ranged from £5.5m to £16.7m (2020: £5.3m to £11.1m).
We tested the Group’s consolidation process and carried out analytical procedures to confirm that there were no significant risks
of material misstatement in the aggregated financial information of the remaining subsidiaries not subject to a full scope audit or
specified audit procedures.
7.2. Our consideration of the control environment
We identified the key IT systems relevant to the audit to be those used in the financial reporting, lending and savings businesses. For
these controls we involved our IT specialists to perform testing over the general IT controls, including testing of user access and change
management systems.
In the current year we relied on controls for some of the lending business and related interest income and the Group’s in-house
serviced savings business. For the areas where we relied on controls, we performed walkthroughs with management to understand the
process and controls and identified and tested relevant controls that address risks of material misstatement in financial reporting.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the impact of climate change on the Group’s operations and impact on its financial
statements. The Group has set out its commitments, aligned with the goals of the Paris Climate Accord, to be a net zero bank by
2050. Further information is provided in the Group’s Environment, Social and Governance report on page 76. The Group sets out its
assessment of the potential impact of climate change on page 55 of the Risk review section of the Annual Report.
In conjunction with our climate risk specialists, we have held discussions with the Group to understand:
} the process for identifying affected operations, including the governance and controls over this process, and the subsequent effect
on the financial reporting for the Group; and
} the long-term strategy to respond to climate change risks as they evolve.
Our audit work has involved:
} challenging the completeness of the physical and transition risks identified and considered in the Group’s climate risk assessment
and the conclusion that there is no material impact of climate change risk on current year financial reporting;
} assessing management’s approach to the incorporation and quantification of climate change risks within the ECL model, (see the
loan impairment provision key audit matter above); and
} assessing disclosures in the Annual Report, and challenging the consistency between the financial statements and the remainder of
the Annual Report.
We have not been engaged to provide assurance over the accuracy of climate change disclosures. As part of our audit procedures we
are required to read these disclosures to consider whether they are materially inconsistent with the financial statements or knowledge
obtained in the audit and we did not identify any material inconsistencies as a result of these procedures.
Interest receivable
and
similar income
Full audit scope 98%
Review at group level 2%
Profit before tax
Full audit scope 96%
Review at group level 4%
Total assets
Full audit scope 97%
Review at group level 3%
Total liabilities
Full audit scope 99%
Review at group level 1%
Independent Auditor’s Report (Continued)
To the Members of OSB GROUP PLC

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Overview Strategic Report Governance Financial Statements Appendices
7.4. Oversight of the audit teams
All audit work for the purposes of the Group audit was performed by Deloitte LLP in the UK. The audit team for the Group and the
parent company were based in London. There was a component audit team for the component audit of Charter Court Financial
Services Limited which is based in Wolverhampton. The Senior Statutory Auditor has responsibility for directing and supervising all
aspects of the audit work of the component auditor. In discharging this responsibility, the Group audit team held regular meetings with
local management and had regular virtual meetings with the component audit team to oversee the component audit. The Group audit
team maintained dialogue with the component auditor throughout all phases of the audit and performed a remote file review of the
component audit team’s work.
8. Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to
a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the parent company’s ability
to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic
alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws
and regulations, we considered the following:
} the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
} the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error that was approved by the Board;
} results of our enquiries of management, internal audit and the Audit Committee about their own identification and assessment of
the risks of irregularities;
} any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud.
During the first half of 2021, the Directors identified fraudulent activity by a third party in respect of a secured funding line
provided by the Group, and recorded a loan impairment provision of £20m in 2020, which has increased to £22m in 2021;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

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} the matters discussed among the audit engagement team including the component audit team and involving relevant internal
specialists, including tax, valuations, real estate, IT, credit risk and analytics and modelling specialists regarding how and where
fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud
and identified the greatest potential for fraud in the following areas: loan impairment provisions and effective interest rate income
recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those
laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The
key laws and regulations we considered in this context included the relevant provisions of the UK Companies Act, Listing Rules and tax
legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included the
Group’s prudential regulatory requirements and capital, liquidity and conduct requirements.
11.2. Audit response to risks identified
As a result of performing the above, we identified loan impairment provisions and effective interest rate income recognition as key
audit matters related to the potential risk of fraud. The key audit matters section of our report explains the matters in more detail and
also describes the specific procedures we performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks identified included the following:
} reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on the financial statements;
} enquiring of management, the Audit Committee and in-house and external legal counsel concerning actual and potential litigation
and claims;
} performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
} reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence
with the Prudential Regulation Authority, the Financial Conduct Authority and HMRC; and
} in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists and the component audit team, and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
} the information given in the strategic report and the directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
} the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in the
course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report.
13. Opinion on other matter prescribed by the Capital Requirements (Country-by-Country Reporting) Regulations 2013
In our opinion the information given in note 50 to the financial statements for the financial year ended 31 December 2021 has been
properly prepared, in all material respects, in accordance with the Capital Requirements (Country-by Country Reporting) Regulations
2013.
14. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Independent Auditor’s Report (Continued)
To the Members of OSB GROUP PLC

179
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
} the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified as set out on page 166;
} the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is
appropriate as set out on pages 74 and 75;
} the directors’ statement on fair, balanced and understandable as set out on page 136;
} the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks as set out on page 123;
} the section of the annual report that describes the review of effectiveness of risk management and internal control systems as
set out on pages 123 and 138; and
} the section describing the work of the Audit Committee as set out on pages 134 to 140.
15. Matters on which we are required to report by exception
15.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
} we have not received all the information and explanations we require for our audit; or
} adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
} the parent company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not
been made or the part of the directors’ remuneration report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
16. Other matters which we are required to address
16.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the shareholders of the OSB GROUP plc on 17 November
2020 to audit the Group financial statements for the year ending 31 December 2020 and subsequent financial periods. The period of
total uninterrupted engagement including previous renewals and reappointments of the firm is two years, covering the years ending
31 December 2020 to 31 December 2021.
Prior to our appointment to the parent company, we were auditor of the Group headed by OneSavings Bank plc, since 9 May 2019.
The period of total uninterrupted engagement for OneSavings Bank plc, including previous renewals and reappointments of the firm, is
three years, covering the year ended 31 December 2019 to 31 December 2021.
16.2. Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with ISAs (UK).
17. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format (ESEF) prepared Annual Financial Report filed on the National Storage
Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides no
assurance over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS. We
have been engaged to provide assurance on whether the annual financial report has been prepared using the single electronic format
specified in the ESEF RTS and will report separately to the members on this.
Robert Topley FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
17 March 2022

180
OSB GROUP PLC Annual Report and Accounts 2021
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Note
2021
£m
2020
£m
Interest receivable and similar income 4 746.8 7 11 .9
Interest payable and similar charges 5 (1 59 . 2) (239 .7)
Net interest income 5 8 7. 6 47 2 . 2
Fair value gains on financial instruments 6 2 9. 5 7. 4
Gain on sale of financial instruments 7 4.0 20.0
Other operating income 8 7. 9 9. 0
Total income 6 2 9.0 50 8.6
Administrative expenses 9 (16 6.5) (157 .0)
Provisions 38 (0 .2) (0 .1)
Impairment of financial assets 25 4.4 (71.0)
Impairment of intangible assets 10 3 .1 ( 7. 0)
Integration costs 13 (5 .0) (9.8)
Exceptional items 14 (0. 2) (3. 3)
Profit before taxation 464.6 2 6 0.4
Taxation 15 (11 9. 3) (6 4.1)
Profit for the year 345 .3 196 .3
Other comprehensive (expense)/income
Items which may be reclassified to profit or loss:
Fair value changes on financial instruments measured as fair value through other
comprehensive income (FVOCI):
Arising in the year 20 1 .1 1.0
Amounts reclassified to profit or loss for investment
securities at FVOCI (2 .0) –
Tax on items in other comprehensive (expense)/income 0. 5 (0.5)
Revaluation of foreign operations (0 .1) –
Other comprehensive (expense)/income (0.5) 0.5
Total comprehensive income for the year 344. 8 196. 8
Attributable to:
Equity shareholders of the Company 3 4 0.1 191. 3
Non-controlling interest 4.7 5.5
344. 8 196.8
Dividend, pence per share 17 26.0 14. 5
Earnings per share, pence per share
Basic 16 76 . 0 42 .8
Diluted 16 75.2
42 .4
The above results are derived wholly from continuing operations.
The notes on pages 184 to 238 form part of these accounts.
The financial statements on pages 180 to 238 were approved by the Board of Directors on 17 March 2022.

181
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Consolidated Statement of Financial Position
As at 31 December 2021
Note
2021
£m
2020
£m
Assets
Cash in hand 0.5 0.5
Loans and advances to credit institutions 19 2 ,843.6 2,6 7 6.2
Investment securities 20 49 1.4 47 1 . 2
Loans and advances to customers 21 21,0 80.3 19,230.7
Fair value adjustments on hedged assets 27 (13 8 .9) 181.6
Derivative assets 26 185.7 12. 3
Other assets 28 10.2 9. 1
Current taxation asset – 8 .4
Deferred taxation asset 29 5.6 4.7
Property, plant and equipment 30 3 5 .1 3 9. 2
Intangible assets 31 18 .4 20.6
Total assets 24,531.9 22,654.5
Liabilities
Amounts owed to credit institutions 32 4 , 31 9. 6 3, 570. 2
Amounts owed to retail depositors 33 1 7, 5 2 6 . 4 16,603. 1
Fair value adjustments on hedged liabilities 27 (1 9. 7) 8. 2
Amounts owed to other customers 34 92 .6 72 .9
Debt securities in issue 35 460.3 4 21 .9
Derivative liabilities 26 1 9. 7 16 3.6
Lease liabilities 36 1 0.7 11. 7
Other liabilities 37 2 9. 6 2 7. 8
Provisions 38 2 .0 1.8
Current taxation liability 1.0 –
Deferred taxation liability 39 3 9. 8 48.3
Subordinated liabilities 40 10. 3 10.5
Perpetual Subordinated Bonds 41 15. 2 3 7. 6
22,507 .5 20,977.6
Equity
Share capital 43 4. 5 1,359 .8
Share premium 43 0.7 –
Retained earnings 3 , 2 15 .1 1,608.6
Other reserves 44 (1,1 9 5.9) (1, 351.5)
Shareholders’ funds
2 ,02 4.4 1 , 61 6.9
Non-controlling interest 44 – 60.0
Total equity and liabilities 24,531. 9 22,654.5
The notes on pages 184 to 238 form part of these accounts. The financial statements on pages 180 to 238 were approved by the Board
of Directors on 17 March 2022 and signed on its behalf by
Andy Golding April Talintyre
Chief Executive Officer Chief Financial Officer
Company number: 11976839

182
OSB GROUP PLC Annual Report and Accounts 2021
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Share
capital
1
£m
Share
premium
£m
Capital
contribution
£m
Transfer
reserve
£m
Own
shares
2
£m
Foreign
exchange
reserve
£m
FVOCI
reserve
£m
Share-
based
payment
reserve
£m
Retained
earnings
£m
Additional
Tier 1
securities
£m
Non-
controlling
interest
securities
£m
Total
£m
At 1 January 2020 4.5 8 64.2 6.5 (12.8) (3.7) (1.0) 0.5 5.6 553. 2 – 60.0 1 , 4 7 7. 0
Profit for the year – – – – – – – – 196.3 – – 196. 3
Other comprehensive
income – – – – – – 1.0 – – – – 1.0
Tax on items in other
comprehensive income – – – – – – (0.5) – – – – (0. 5)
Total comprehensive
income – – – – – – 0.5 – 196 .3 – – 196.8
Coupon paid on
non-controlling
interest securities – – – – – – – – (5.5) – – (5.5)
Share-based payments – 2.6 – –
– – – 2 .4 3.2 – – 8. 2
Tax recognised in equity – – – – – – – (0. 2) 0.5 – – 0.3
Transfer between reserves – – (6 .5) 12.8 – – – – (6 .3) – – –
Own shares
2
– – – – (0 .3) – – – 0 .4 – – 0 .1
Cancellation of
OneSavings Bank plc
share capital and share
premium (4.5) (866 .8) – – – – – – 866.8 – – (4.5)
Issuance of OSB GROUP
PLC share capital 1,359 .8 – – (1 ,355.3) – – – – – – – 4. 5
At 31 December 2020 1,359 .8 – – (1,355.3) (4.0) (1.0) 1.0 7. 8 1,608.6 – 60.0 1,6 7 6. 9
Profit for the year – – – – – – – – 345.3 – – 345. 3
Other comprehensive
expense – – – – – (0.1) (0.9) – – – – (1.0)
Tax on items in other
comprehensive expense – – – – – – 0.5 – – – – 0.5
Total comprehensive
income
– – – – – (0.1) (0 .4) – 345.3 – – 344.8
Coupon paid on
non-controlling
interest securities – – – – – – – – (4.7) – – (4.7)
Dividends paid – – – – – – – – (86.7) – – (86.7)
Share-based payments – 0.7 – – – – – 4.0 2 .9 – – 7. 6
Own shares

– – – – 0.5 – – – (0.5) – – –
Capital reduction of OSB
GROUP PLC share
capital
1
(1,3 55. 3) – – – – – – – 1,3 55.3 – – –
Redemption of non-
controlling interest
securities – – – – – – – – – – (60 .0) (60. 0)
Transactions costs on
redemption of
non-controlling
interest securities – – – – – – – – (3.5) – – (3 .5)
Issuance of Additional
Tier 1 securities – – – – – – – – – 15 0.0 – 150.0
Transactions costs on
issuance of Additional
Tier 1 securities
– – – – – – – – (1.6) – – (1 .6)
Tax recognised in equity – – – – – – – 1.6 – – – 1.6
At 31 December 2021 4.5 0.7 – (1 ,355 .3) (3 .5) (1 .1) 0.6 1 3.4 3,215. 1 150.0 – 2,024.4
1. On 26 February 2021, OSB GROUP PLC reduced the nominal value of 447,312,780 shares from three hundred and four (30 4) pence each to one (1) penny each, see note 1 for
further details.
2. The Group has adopted look-through accounting (see note 2 c) and recognised the Employee Benefit Trusts within OSB GROUP PLC.
Share capital and premium is disclosed in note 43 and the reserves are further disclosed in note 44.

183
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Note
2021
£m
2020
£m
Cash flows from operating activities
Profit before taxation 464.6 2 6 0.4
Adjustments for non-cash items 51 (10.0) 7 9. 2
Changes in operating assets and liabilities 51 (79 9.0) (1 , 5 3 7. 2)
Cash used in operating activities (3 4 4.4) (1 , 1 9 7. 6)
Provisions refunded 38 – 0 .1
Net tax paid (117 .3) (12 8.8)
Net cash used in operating activities (461 .7) (1,326 .3)
Cash flows from investing activities
Maturity and sales of investment securities 5 4 7. 7 4 0 7. 3
Purchases of investment securities (468. 2) (190.9)
Interest received on investment securities 1 .9 7. 0
Sales of financial instruments 7 4.0 5 3 9.9
Proceeds from sale of property, plant and equipment 30 2 .0 –
Purchases of property, plant and equipment and intangible assets 30,31 (6 .8) ( 7. 5)
Cash generated from investing activities 8 0.6 7 55.8
Cash flows from financing activities
Financing received 42 5,058.6 1,991.2
Financing repaid 42 (4,295.4) (1,1 0 3 .6)
Cash held in deconsolidated special purpose vehicles – (23 .0)
Interest paid on financing (8 .4) (2 1.4)
Coupon paid on non-controlling interest securities (4.7) (5.5)
Dividends paid 17 (86 .7) –
Redemption of non-controlling interest securities (6 3 .5) –
Issuance of Additional Tier 1 securities 148. 4 –
Proceeds from issuance of shares under employee SAYE schemes 0.8 2.6
Cash payments on lease liabilities 36 (1.9) (2 .0)
Cash generated from financing activities 7 4 7. 2 838.3
Net increase in cash and cash equivalents 3 6 6 .1 2 6 7. 8
Cash and cash equivalents at the beginning of the year 18 2, 370 .6 2, 102.8
Cash and cash equivalents at the end of the year 18 2, 736.7 2,370 .6
Movement in cash and cash equivalents 3 6 6 .1 2 6 7. 8

184
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
1. Capital reduction
On 11 January 2021, the parent company OSB GROUP PLC (the Company) published a Circular in relation to the Capital reduction,
which subject to shareholder approval as well as certain other conditions set out in the Circular, was undertaken to create the required
distributable reserves to enable the Company to pay dividends and other distributions to shareholders in the future. The Circular
stated that there would be no change to the total number of shares or the total capital in the Company, or in the Company and
its subsidiaries’ (the Group) capital ratios as a result of the Capital reduction. On 26 February 2021, the Capital reduction became
effective with the Company reducing the nominal value of 447,312,780 shares from three hundred and four (304) pence each to one
(1) penny each. This generated £1.4bn of distributable reserves following interim accounts as at 28 February 2021 being prepared and
delivered to Companies House, supporting the dividend distribution of £64.8m on 2 June 2021 by the Company.
2. Accounting policies
a) Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by
the United Kingdom (UK) and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC).
The financial statements have been prepared on a historical cost basis, as modified by the revaluation of investment securities held at
FVOCI and derivative contracts and other financial assets held at fair value through profit or loss (FVTPL) (see note 2 o) vi).
The financial statements are presented in Pounds Sterling. All amounts in the financial statements have been rounded to the nearest
£0.1m (£m). The functional currency of the Group is Pounds Sterling, which is the currency of the primary economic environment in
which the Group operates.
b) Going concern
The Board undertakes regular rigorous assessments of whether the Group is a going concern in light of current economic conditions
and all available information about future risks and uncertainties.
In assessing whether the going concern basis is appropriate, projections for the Group have been prepared, covering its future
performance, capital and liquidity for a period in excess of 12 months from the date of approval of these financial statements.
These forecasts have been subject to sensitivity tests, including stress scenarios, which have been compared to the latest economic
scenarios provided by the Group’s external economic advisors, as well as reverse stress tests. In making the assessment the Board
has considered all principal and emerging risks including climate risk where the risk is likely to emerge outside of the going concern
assessment horizon.
The assessments include the following:
} Financial and capital forecasts were prepared under stress scenarios which were assessed against the latest economic forecasts
provided by the Group’s external economic advisors. Reverse stress tests were also run, to assess what combinations of House Price
Index (HPI) and unemployment variables would result in the Group utilising its regulatory capital buffers in full and breaching the
Group’s minimum prudential requirements, along with analysis and insight from the Group’s Internal Capital Adequacy Assessment
Process (ICAAP). The Directors assessed the likelihood of those reverse stress scenarios occurring within the next 12 months and
concluded that the likelihood is remote.
} The latest liquidity and contingent liquidity positions and forecasts were assessed against the Internal Liquidity Adequacy
Assessment Process (ILAAP) stress scenarios.
} The Group continues to assess the resilience of its business operating model and supporting infrastructure in the context of the
emerging economic, business and regulatory environment. The key areas of focus continue to be on the provision of critical services
to customers, employee health and safety and evolving governmental policies and guidelines. The Group continues to invest in its
information technology platforms to support its employees with flexible working from office or homeworking across all locations
within a hybrid working model. The Group’s response to the COVID-19 pandemic demonstrated the inherent resilience of the
Group’s critical processes and infrastructure. It also demonstrated the necessary agility in responding to changing operational
demands. The operational dependencies on third party vendors and outsourcing arrangements continue to be an important area of
focus.
The Group’s financial projections demonstrate that the Group has sufficient capital and liquidity to continue to meet its regulatory
requirements as set out by the Prudential Regulation Authority (PRA).
The Board has therefore concluded that the Group has sufficient resources to continue in operational existence for a period in excess
of 12 months and as a result, it is appropriate to prepare these financial statements on a going concern basis.
c) Basis of consolidation
The Group accounts include the results of the Company and its subsidiary undertakings. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group and are deconsolidated from the date that control ceases. Upon consolidation,
intercompany transactions, balances and unrealised gains on transactions are eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency, so far as is possible, with the policies adopted by the Group.
Subsidiaries are those entities, including structured entities, over which the Group has control. The Group controls an entity when it
is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the investee. The Group has power over an entity when it has existing rights that give it the current ability to direct the
activities that most significantly affect the entity’s returns. Power may be determined on the basis of voting rights or, in the case of
structured entities, other contractual arrangements.

185
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
2. Accounting policies (Continued)
Where the Group does not retain a direct ownership interest in a securitisation entity, but the Directors have determined that the
Group controls those entities, they are treated as subsidiaries and are consolidated. Control is determined to exist if the Group has the
power to direct the activities of each entity (for example, managing the performance of the underlying mortgage assets and raising
debt on those mortgage assets which is used to fund the Group) and, in addition to this, control is exposed to a variable return (for
example, retaining the residual risk on the mortgage assets). Securitisation structures that do not meet these criteria are not treated as
subsidiaries and are excluded from the consolidated accounts. The Company applies the net approach in accounting for securitisation
structures where it retains an interest in the securitisation, netting the loan notes held against the deemed loan balance.
The Group’s Employee Benefit Trust (EBT) is controlled and recognised by the Company using the look-through approach, i.e. as if the
EBT is included within the accounts of the Company.
The Group is not deemed to control an entity when it exercises power over an entity in an agency capacity. In determining whether
the Group is acting as an agent, the Directors consider the overall relationship between the Group, the investee and other parties to
the arrangement with respect to the following factors: (i) the scope of the Group’s decision-making power; (ii) the rights held by other
parties; (iii) the remuneration to which the Group is entitled; and (iv) the Group’s exposure to variability of returns. The determination
of control is based on the current facts and circumstances and is continuously assessed. In some circumstances, different factors and
conditions may indicate that different parties control an entity depending on whether those factors and conditions are assessed in
isolation or in totality. Judgement is applied in assessing the relevant factors and conditions in totality when determining whether the
Group controls an entity. Specifically, judgement is applied in assessing whether the Group has substantive decision-making rights
over the relevant activities and whether it is exercising power as a principal or an agent.
d) Foreign currency translation
The consolidated financial statements are presented in Pounds Sterling which is the presentation currency of the Group. The financial
statements of each of the Company’s subsidiaries are measured using the currency of the primary economic environment in which the
subsidiary operates (the functional currency). Foreign currency transactions are translated into the functional currencies using the
exchange rates prevailing at the date of the transactions. Monetary items denominated in foreign currencies are retranslated at the
rate prevailing at the period end.
Foreign exchange (FX) gains and losses resulting from the retranslation and settlement of these items are recognised in profit or loss.
Non-monetary items measured at cost in the foreign currency are translated using the spot FX rate at the date of the transaction.
The assets and liabilities of foreign operations with functional currencies other than Pounds Sterling are translated into the
presentation currency at the exchange rate on the reporting date. The income and expenses of foreign operations are translated at the
rates on the dates of transactions. Exchange differences on foreign operations are recognised in other comprehensive income (OCI)
and accumulated in the foreign exchange reserve within equity.
e) Segmental reporting
IFRS 8 requires operating segments to be identified on the basis of internal reports and components of the Group which are regularly
reviewed by the chief operating decision maker to allocate resources to segments and to assess their performance. For this purpose,
the chief operating decision maker of the Group is the Board of Directors.
The Group provides loans and asset finance within the UK and the Channel Islands only.
The Group segments its lending business and operates under two segments:
} OneSavings Bank (OSB)
} Charter Court Financial Services (CCFS)
The Group has disclosed relevant risk management tables in note 46 at a sub-segment level to provide detailed analysis of the Group’s
core lending business.
f) Interest income and expense
Interest income and interest expense for all interest-bearing financial instruments measured at amortised cost and FVOCI are
recognised in profit or loss using the effective interest rate (EIR) method. The EIR is the rate which discounts the expected future cash
flows, over the expected life of the financial instrument, to the net carrying value of the financial asset or liability.
Interest income on financial assets categorised as stage 1 or 2 are recognised on a gross basis, with interest income on stage 3 assets
recognised net of expected credit losses (ECL). See note 2 o) for further information on IFRS 9 stage classifications.
When calculating the EIR, the Group estimates cash flows considering all contractual terms of the instrument and behavioural aspects
(for example, prepayment options) but not considering future credit losses. The calculation of the EIR includes transaction costs and
fees paid or received that are an integral part of the interest rate, together with the discounts or premiums arising on the acquisition
of loan portfolios. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial
instrument.
The Group monitors the actual cash flows for each book and resets cash flows on a monthly basis, discounted at the EIR to derive a
new carrying value, with changes taken to profit or loss as interest income.
The EIR is adjusted where there is a movement in the reference interest rate (LIBOR, SONIA or base rate) affecting portfolios with a
variable interest rate which will impact future cash flows. The revised EIR is the rate which exactly discounts the revised cash flows to
the net carrying value of the loan portfolio.

186
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
2. Accounting policies (Continued)
When the contractual terms of non-derivative financial instruments have been amended as a direct consequence of IBOR reform and
the new basis for determining the contractual cash flows is economically equivalent to the previous basis, the Group changes the basis
for determining the contractual cash flows prospectively by revising the EIR.
Interest income on investment securities is included in interest receivable and similar income. Interest on derivatives is included in
interest receivable and similar income or interest expense and similar charges following the underlying instrument it is hedging.
Coupons paid on non-controlling interest securities and Additional Tier 1 (AT1) securities are recognised directly in equity in the period
in which they are paid.
g) Fees and commissions
Fees and commissions which are an integral part of the EIR of a financial instrument are recognised as an adjustment to the EIR and
recorded in interest income. The Group includes early redemption charges within the EIR.
Fees received on mortgage administration services and mortgage origination activities, which are not an integral part of the EIR, are
recorded in other operating income and accounted for in accordance with IFRS 15 Revenue from Contracts with Customers, with
income recognised when the services are delivered and the benefits are transferred to clients and customers.
Other fees and commissions are recognised on the accruals basis as services are provided or on the performance of a significant act,
net of VAT and similar taxes.
h) Integration costs and exceptional items
Integration costs and exceptional items are those items of income or expense that do not relate to the Group’s core operating
activities, are not expected to recur and are material in the context of the Group’s performance. These items are disclosed separately
within the Consolidated Statement of Comprehensive Income and the Notes to the Consolidated Financial Statements.
i) Taxation
Income tax comprises current and deferred tax. It is recognised in profit or loss, other comprehensive income or directly in equity,
consistent with the recognition of items it relates to. The Group recognises tax on coupons paid on non-controlling interest securities
and AT1 securities directly in profit or loss.
Current tax is the expected tax charge on the taxable income for the year and any adjustments in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences between the carrying amounts of
assets or liabilities for accounting purposes and carrying amounts for tax purposes.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available to utilise the asset.
The recognition of deferred tax is mainly dependent on the projections of future taxable profits and future reversals of temporary
differences. The current projections of future taxable income indicate that the Group will be able to utilise its deferred tax asset within
the foreseeable future.
Deferred tax liabilities are recognised for all taxable temporary differences to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised.
The Company and its UK subsidiaries are in a group payment arrangement for corporation tax and show a net corporation tax liability
and deferred tax liability accordingly.
The Company and its UK subsidiaries are in the same VAT group.
j) Dividends
Dividends are recognised in equity in the period in which they are paid or, if earlier, approved by shareholders.
k) Cash and cash equivalents
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents comprise cash, non-restricted balances
with credit institutions and highly liquid financial assets with maturities of less than three months from date of acquisition and subject
to an insignificant risk of changes in their fair value.
l) Intangible assets
Purchased software and costs directly associated with the development of computer software are capitalised as intangible assets
where the software is a unique and identifiable asset controlled by the Group and will generate future economic benefits. Costs
to establish technological feasibility or to maintain existing levels of performance are recognised as an expense. The Group only
recognises internally generated intangible assets if all of the following conditions are met:
} an asset is being created that can be identified after establishing the technical and commercial feasibility of the resulting product;
} it is probable that the asset created will generate future economic benefits; and
} the development cost of the asset can be measured reliably.
Subsequent expenditure on an internally generated intangible asset, after its purchase or completion, is recognised as an expense
in the period in which it is incurred. Where no internally generated intangible asset can be recognised, development expenditure is
recognised as an expense in the period in which it is incurred.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
2. Accounting policies (Continued)
Software-as-a-service (SaaS), is an arrangement that provides the customer with the right to receive access to the supplier’s
application software in the future which is treated as a service contract, rather than a software lease or the acquisition of a software
intangible asset.
An intangible asset is only recognised if:
} The customer has the contractual right to take possession of the software during the hosting period without significant penalty.
} It is feasible for the customer to run the software on its own hardware or contract with a party unrelated to the supplier to host the
software.
The costs of configuring or customising supplier application software in a SaaS arrangement that is determined to be a service
contract is recognised as an expense or prepayment. Where the configuration and customisation services are not distinct from the
right to receive access to the software, then the costs are recognised as an expense over the term of the arrangement.
Intangible assets are reviewed for impairment semi-annually, and if they are considered to be impaired, are written down immediately
to their recoverable amounts. Impairment losses previously recognised for intangible assets, other than goodwill, are reversed when
there has been a change in the estimates used to determine the asset’s recoverable amount. An impairment loss reversal is recognised
in the Consolidated Statement of Comprehensive Income and the carrying amount of the asset is increased to its recoverable amount.
Intangible assets are amortised in profit or loss over their estimated useful lives as follows:
Software and internally generated assets 5 year straight line
Development costs, brand and technology 4 year straight line
Broker relationships 5 year profile
Bank licence 3 year straight line
For development costs that are under construction, no amortisation will be applied until the asset is available for use and is calculated
using a full month when available for use.
The Group reviews the amortisation period on an annual basis. If the expected useful life of assets is different from previous
assessments, the amortisation period is changed accordingly.
m) Property, plant and equipment
Property, plant and equipment comprise freehold land and buildings, major alterations to office premises, computer equipment
and fixtures measured at cost less accumulated depreciation. These assets are reviewed for impairment annually, and if they are
considered to be impaired, are written down immediately to their recoverable amounts.
Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful economic lives as follows:
Buildings 50 years
Leasehold improvements 10 years
Equipment and fixtures 5 years
Land, deemed to be 25% of purchase price of buildings, is not depreciated.
The cost of repairs and renewals is charged to profit or loss in the period in which the expenditure is incurred.
n) Investment in subsidiaries
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost less provision for any impairment.
A full list of the Company’s subsidiaries which are included in the Group’s consolidated financial statements can be found in note 2 to
the Company’s financial statements on page 242.
The Company performs an annual impairment assessment of its investment in subsidiary undertakings, assessing the carrying value
of the investment in each subsidiary against the subsidiary’s net asset values at the reporting date for indication of impairment. Where
there is indication of impairment, the Company estimates the subsidiary’s value in use by estimating future profitability and the impact
on the net assets of the subsidiary. The Company recognises an impairment directly in profit or loss when the recoverable amount,
which is the greater of the value in use or the fair value less costs to sell, is less than the carrying value of the investment. Impairments
are subsequently reversed if the recoverable amount exceeds the carrying value.
o) Financial instruments
i. Classification
The Group classifies financial instruments based on the business model and the contractual cash flow characteristics of the financial
instruments. Under IFRS 9, the Group classifies financial assets into one of three measurement categories:
} Amortised cost – assets in a business model to hold financial assets in order to collect contractual cash flows, where the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
(SPPI) on the principal amount outstanding.
} FVOCI – assets held in a business model which collects contractual cash flows and sells financial assets where the contractual
terms of the financial assets give rise on specified dates to cash flows that are SPPI on the principal amount outstanding.
} FVTPL – assets not measured at amortised cost or FVOCI. The Group measures derivatives, an acquired mortgage portfolio and an
investment security under this category.

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OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
2. Accounting policies (Continued)
The Group classifies non-derivative financial liabilities as measured at amortised cost.
The Group has no financial assets and liabilities classified as held for trading.
The Group reassesses its business models each reporting period.
The Group classifies certain financial instruments as equity where they meet the following conditions:
} the financial instrument includes no contractual obligation to deliver cash or another financial asset on potentially unfavourable
conditions;
} the financial instrument is a non-derivative that includes no contractual obligation for the issuer to deliver a variable number of its
own equity instruments; or
} the financial instrument is a derivative that will be settled only by the issuer exchanging a fixed amount of cash or another financial
asset for a fixed number of its own equity instruments.
During the year equity financial instruments comprised own shares, non-controlling interest securities and AT1 securities. Accordingly,
the coupons paid on the non-controlling interest securities and AT1 securities are recognised directly in retained earnings when paid.
ii. Recognition
The Group initially recognises loans and advances, deposits, debt securities issued and subordinated liabilities on the date on which
they are originated or acquired. All other financial instruments are accounted for on the trade date which is when the Group becomes
a party to the contractual provisions of the instrument.
For financial instruments classified as amortised cost, the Group initially recognises financial assets and financial liabilities at fair
value plus transaction income or costs that are directly attributable to its origination, acquisition or issue. These financial instruments
are subsequently measured at amortised cost using the effective interest rate.
Transaction costs relating to the acquisition or issue of a financial instrument at FVOCI and FVTPL are recognised in the profit or loss
as incurred.
AT1 securities are designated as equity instruments and recognised at fair value on the date of issuance in equity along with
incremental costs directly attributable to the issuance of equity instruments.
iii. Derecognition
The Group derecognises financial assets when the contractual rights to the cash flows expire or the Group transfers substantially all
risks and rewards of ownership of the financial asset.
The Group offers refinancing options to customers which have been assessed within the principles of IFRS 9 and relevant guidance
including a read across in respect of debt issuance. The assessment concludes the original mortgage asset is derecognised at the
refinancing point with a new financial asset recognised.
The forbearance measures offered by the Group are considered a modification event as the contractual cash flows are renegotiated
or otherwise modified. The Group considers the renegotiated or modified cash flows are not a substantial modification from the
contractual cash flows and does not consider that forbearance measures give rise to a derecognition event.
Financial liabilities are derecognised only when the obligation is discharged, cancelled or has expired.
iv. Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the Consolidated Statement of Financial Position
when, and only when, the Group currently has a legally enforceable right to offset the amounts and it intends either to settle them on
a net basis or to realise the asset and settle the liability simultaneously.
The Group’s derivatives are covered by industry standard master netting agreements. Master netting agreements create a right of set-
off that becomes enforceable only following a specified event of default or in other circumstances not expected to arise in the normal
course of business. These arrangements do not qualify for offsetting and as such the Group reports derivatives on a gross basis.
Collateral in respect of derivatives is subject to the standard industry terms of International Swaps and Derivatives Association
(ISDA) Credit Support Annex. This means that the cash received or given as collateral can be pledged or used during the term of the
transaction but must be returned on maturity of the transaction. The terms also give each counterparty the right to terminate the
related transactions upon the counterparty’s failure to post collateral. Collateral paid or received does not qualify for offsetting and is
recognised in loans and advances to credit institutions and amounts owed to credit institutions, respectively.
v. Amortised cost measurement
The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured
at initial recognition, less principal payments or receipts, plus or minus the cumulative amortisation using the EIR method of any
difference between the initial amount recognised and the maturity amount, minus any reduction for impairment of assets.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
2. Accounting policies (Continued)
vi. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access
at that date.
When available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A
market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing
information on an ongoing basis. The Group measures its investment securities and Perpetual Subordinated Bonds (PSBs) at fair value
using quoted market prices where available.
If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable
inputs and minimise the use of unobservable inputs.
The Group uses SONIA curves to value its derivatives, previously a combination of LIBOR and SONIA curves (for further information on
Interbank Offered Rate (IBOR) transition, see note 46). The fair value of the Group’s derivative financial instruments incorporates credit
valuation adjustments (CVA) and debit valuation adjustments (DVA). The DVA and CVA take into account the respective credit ratings
of the Group’s two banking entities and counterparty and whether the derivative is collateralised or not. Derivatives are valued using
discounted cash flow models and observable market data and are sensitive to benchmark interest and basis rate curves.
The fair value of investment securities held at FVTPL is measured using a discounted cash flow model.
vii. Identification and measurement of impairment of financial assets
The Group assesses all financial assets for impairment.
Loans and advances to customers
The Group uses the IFRS 9 three-stage ECL approach for measuring impairment. The three impairment stages are as follows:
} Stage 1 – a 12 month ECL allowance is recognised where there is no significant increase in credit risk (SICR) since initial recognition.
} Stage 2 – a lifetime ECL allowance is held for assets where a SICR is identified since initial recognition. The assessment of whether
credit risk has increased significantly since initial recognition is performed for each reporting period for the life of the loan.
} Stage 3 – requires objective evidence that an asset is credit impaired, at which point a lifetime ECL allowance is recognised.
The Group measures impairment through the use of individual and modelled assessments.
Individual assessment
The Group’s provisioning process requires individual assessment for high exposure or higher risk loans, where Law of Property Act
(LPA) receivers have been appointed, the property is taken into possession or there are other events that suggest a high probability of
credit loss. Loans are considered at a connection level, i.e. including all loans connected to the customer.
The Group estimates cash flows from these loans, including expected interest and principal payments, rental or sale proceeds, selling
and other costs. The Group obtains up-to-date independent valuations for properties put up for sale.
For all individually assessed loans with a confirmed sale, should the present value of estimated future cash flows discounted at the
original EIR be less than the carrying value of the loan, a provision is recognised for the difference with such loans being classified as
impaired. However, should the present value of the estimated future cash flows exceed the carrying value, no provision is recognised.
For all remaining individually assessed loans, should a full loss be expected the provision is set to the carrying value, with all other
individually assessed loans applying the greater of either the modelled or individual assessment.
The Group applies a modelled assessment to all loans with no individually assessed provision.
IFRS 9 modelled impairment
Measurement of ECL
The assessment of credit risk and the estimation of ECL are unbiased and probability weighted. ECL is measured on either a 12-month
(stage 1) or lifetime basis depending on whether a SICR has occurred since initial recognition (stage 2) or where an account meets the
Group’s definition of default (stage 3).
The ECL calculation is a product of an individual loan’s probability of default (PD), exposure at default (EAD) and loss given default
(LGD) discounted at the EIR. The ECL drivers of PD, EAD and LGD are modelled at an account level. The assessment of whether a
significant increase in credit risk has occurred is based on quantitative relative PD thresholds and a suite of qualitative triggers.
In accordance with PRA COVID-19 guidance, the Group does not automatically consider the take-up of customer payment deferrals
during the pandemic to be an indication of a SICR and, in the absence of other indicators such as previous arrears, low credit score or
high other indebtedness, the staging of these loans remains unchanged in its ECL calculations.

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OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
2. Accounting policies (Continued)
Significant increase in credit risk (movement to stage 2)
The Group’s transfer criteria determine what constitutes a SICR, which results in an exposure being moved from stage 1 to stage 2.
At the point of initial recognition, a loan is assigned a PD estimate. For each monthly reporting date thereafter, an updated PD
estimate is computed. The Group’s transfer criteria analyses relative changes in PD versus the PD assigned at the point of origination,
together with qualitative triggers using both internal indicators, such as forbearance, and external information, such as changes in
income and adverse credit information to assess for SICR. In the event that given early warning triggers have not already identified
SICR, an account more than 30 days past due has experienced a SICR.
A borrower will move back into stage 1 only if the SICR definition is no longer triggered.
Definition of default (movement to stage 3)
The Group uses a number of quantitative and qualitative criteria to determine whether an account meets the definition of default and
therefore moves to stage 3. The criteria currently include:
} If an account is more than 90 days past due.
} Accounts that have moved into an unlikely to pay position, which includes forbearance, bankruptcy, repossession and interest-only
term expiry.
A borrower will move out of stage 3 when its credit risk improves such that it no longer meets the 90 days past due and unlikeliness to
pay criteria and following this has completed an internally-approved probation period. The borrower will move to stage 1 or stage 2
dependent on whether the SICR applies.
Forward-looking macroeconomic scenarios
The risk of default and expected credit loss assessments take into consideration expectations of economic changes that are deemed to
be reasonably possible.
The Group conducts analysis to determine the most significant factors which may influence the likelihood of an exposure defaulting
in the future. The macroeconomic factors relate to the HPI, unemployment rate (UR), Gross domestic product (GDP), Commercial Real
Estate Index (CRE) and the Bank of England Base Rate (BBR).
The Group has derived an approach for factoring probability-weighted macroeconomic forecasts into ECL calculations, adjusting
PD and LGD estimates. The macroeconomic scenarios feed directly into the ECL calculation, as the adjusted PD, lifetime PD and LGD
estimates are used within the individual account ECL allowance calculations.
The Group sources economic forecast information from an appropriately qualified third party when determining scenarios. The Group
considers four probability-weighted scenarios, base, upside, downside and severe downside scenarios.
The base case is also utilised within the Group’s impairment forecasting process which in turn feeds the wider business planning
processes. The ECL models are also used to set the Group’s credit risk appetite thresholds and limits.
Period over which ECL is measured
Expected credit loss is measured from the initial recognition of the asset which is the date at which the loan is originated or the date a
loan is purchased and at each balance sheet date thereafter. The maximum period considered when measuring ECL (either 12 months
or lifetime ECL) is the maximum contractual period over which the Group is exposed to the credit risk of the asset. For modelling
purposes, the Group considers the contractual maturity of the loan product and then considers the behavioural trends of the asset.
Purchased or originated credit impaired (POCI)
Acquired loans that meet the Group’s definition of default (90 days past due or an unlikeliness to pay position) at acquisition are
treated as POCI assets. These assets attract a lifetime ECL allowance over the full term of the loan, even when these loans no longer
meet the definition of default post acquisition. The Group does not originate credit-impaired loans.
Intercompany loans
Intercompany receivables in the Company financial statements are assessed for ECL based on an assessment of the PD and LGD,
discounted to a net present value.
Other financial assets
Other financial assets comprise cash balances with the Bank of England (BoE) and other credit institutions and high grade investment
securities. The Group deems the likelihood of default across these counterparties as low and does not recognise a provision against
the carrying balances.
p) Loans and receivables
Loans and receivables are predominantly mortgage loans and advances to customers with fixed or determinable payments that are
not quoted in an active market and that the Group does not intend to sell in the near term. They are initially recorded at fair value plus
any directly attributable transaction costs and are subsequently measured at amortised cost using the EIR method, less impairment
losses. Where exposures are hedged by derivatives, designated and qualifying as fair value hedges, the fair value adjustment for the
hedged risk to the carrying value of the hedged loans and advances is reported in fair value adjustments for hedged assets.
Loans and the related provision are written off when the underlying security is sold. Subsequent recoveries of amounts previously
written off are taken through profit or loss.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
2. Accounting policies (Continued)
Loans and advances over which the Group transfers its rights to the collateral thereon to the BoE under the Term Funding Scheme
(TFS) and Term Funding Scheme with additional incentives for SMEs (TFSME) are not derecognised from the Consolidated Statement
of Financial Position, as the Group retains substantially all the risks and rewards of ownership, including all cash flows arising from
the loans and advances and exposure to credit risk. The Group classifies TFS and TFSME as amortised cost under IFRS 9 Financial
Instruments.
Loans and advances include a small acquired mortgage portfolio where the contractual cash flows include payments that are not
solely payments of principal and interest and as such are measured at FVTPL. The Group initially recognises these loans at fair value,
with direct and incremental costs of acquisition recognised directly in profit or loss and, subsequently measures them at fair value.
Loans and receivables contain the Group’s asset finance lease lending. Finance leases are initially measured at an amount equal to
the net investment in the lease, using the interest rate implicit in the finance lease. Direct costs are included in the initial measurement
of the net investment in the lease and reduce the amount of income recognised over the lease term. Finance income is recognised over
the lease term, based on a pattern reflecting a constant periodic rate of return on the net investment in the lease.
q) Investment securities
Investment securities include securities held for liquidity purposes (UK treasury bills, UK Gilts and Residential Mortgage-Backed
Securities (RMBS)). These assets are non-derivatives that are designated as FVOCI or amortised cost.
Assets classified as amortised cost are originally recognised at fair value and subsequently measured at amortised cost using the EIR
method, less impairment losses.
Assets held at FVOCI are measured at fair value with movements taken to OCI and accumulated in the FVOCI reserve within equity,
except for impairment losses which are taken to profit or loss. Where the instrument is sold, the gain or loss accumulated in equity is
reclassified to profit or loss.
Assets held at FVTPL are measured at fair value with movements taken to the Consolidated Statement of Comprehensive Income.
r) Deposits, debt securities in issue and subordinated liabilities
Deposits, debt securities in issue and subordinated liabilities are the Group’s sources of debt funding. They comprise deposits from
retail customers and credit institutions, including collateralised loan advances from the BoE under the TFS and TFSME, asset-backed
loan notes issued through the Group’s securitisation programmes and subordinated liabilities. Subordinated liabilities include the
Sterling PSBs where the terms allow no absolute discretion over the payment of interest. These financial liabilities are initially measured
at fair value less direct transaction costs, and subsequently held at amortised cost using the EIR method.
Cash received under the TFS and TFSME is recorded in amounts owed to credit institutions. Interest is accrued over the life of the
agreements on an EIR basis.
s) Sale and repurchase agreements
Financial assets sold subject to repurchase agreements (repo) are retained in the financial statements if they fail derecognition criteria
of IFRS 9 described in paragraph p (iii) above. The financial assets that are retained in the financial statements are reflected as loans
and advances to customers or investment securities and the counterparty liability is included in amounts owed to credit institutions or
other customers. Financial assets purchased under agreements to resell at a predetermined price where the transaction is financing in
nature (reverse repo) are accounted for as loans and advances to credit institutions. The difference between the sale and repurchase
price is treated as interest and accrued over the life of the agreement using the EIR method.
t) Derivative financial instruments
The Group uses derivative financial instruments (interest rate swaps) to manage its exposure to interest rate risk. In accordance with
the Group Market and Liquidity Risk Policy, the Group does not hold or issue derivative financial instruments for proprietary trading.
Derivative financial instruments are recognised at their fair value with changes in their fair value taken to profit or loss. Fair values
are calculated by discounting cash flows at the prevailing interest rates. All derivatives are classified as assets when their fair value
is positive and as liabilities when their fair value is negative. If a derivative is cancelled, it is derecognised from the Consolidated
Statement of Financial Position.
The Group also uses derivatives to hedge the interest rate risk inherent in irrevocable offers to lend. This exposes the Group to
movements in the fair value of derivatives until the loan is drawn. The changes to fair value are recognised in profit or loss in the period.
The Group is party to a limited number of warrants. These are recognised as derivative financial instruments as applicable where a
trigger event takes place and the fair value of the option or warrant can be reliably measured.
u) Hedge accounting
The Group has chosen to continue to apply the hedge accounting requirements of IAS 39 instead of the requirements in Chapter 6 of
IFRS 9. The Group uses fair value hedge accounting for a portfolio hedge of interest rate risk.
Portfolio hedge accounting allows for hedge effectiveness testing and accounting over an entire portfolio of financial assets or
liabilities. To qualify for hedge accounting at inception, hedge relationships are clearly documented and derivatives must be expected
to be highly effective in offsetting the hedged risks. In addition, effectiveness must be tested throughout the life of the hedge
relationship. This applies to all derivatives including SONIA-linked derivatives entered into to replace LIBOR-linked derivatives, as a
result of IBOR reforms (see note 2 aa)).

192
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
2. Accounting policies (Continued)
The Group applies fair value portfolio hedge accounting to its fixed rate portfolio of mortgages and saving accounts. The hedged
portfolio is analysed into repricing time periods based on expected repricing dates, utilising the Group Assets and Liabilities
Committee (ALCO) approved prepayment curve. During 2021 all remaining LIBOR-linked derivatives with a maturity date post Q1 2022
were cancelled and new SONIA-linked derivatives entered into. Interest rate swaps are designated against the repricing time periods
to establish the hedge relationship. Hedge effectiveness is calculated as a percentage of the fair value movement of the interest rate
swap against the fair value movement of the hedged item over the period tested.
The Group considers the following as key sources of hedge ineffectiveness:
} the mismatch in maturity date of the swap and hedged item, as swaps with a given maturity date cover a portfolio of hedged items
which may mature throughout the month;
} the actual behaviour of the hedged item differing from expectations, such as early repayments or withdrawals and arrears;
} minimal movements in the yield curve leading to ineffectiveness where hedge relationships are sensitive to small value changes;
and
} the transition relating to LIBOR reforms whereby some hedged instruments and hedged items are based on different benchmark
rates.
Where there is an effective hedge relationship for fair value hedges, the Group recognises the change in fair value of each hedged
item in profit or loss with the cumulative movement in their value being shown separately in the Consolidated Statement of Financial
Position as fair value adjustments on hedged assets and liabilities. The fair value changes of both the derivative and the hedge
substantially offset each other to reduce profit volatility.
The Group discontinues hedge accounting when the derivative ceases through expiry, when the derivative is cancelled or the
underlying hedged item matures, is sold or is repaid.
If a derivative no longer meets the criteria for hedge accounting or is cancelled whilst still effective, including LIBOR-linked derivatives
cancelled as a result of IBOR reforms, the fair value adjustment relating to the hedged assets or liabilities within the hedge relationship
prior to the derivative becoming ineffective or being cancelled remains on the Consolidated Statement of Financial Position and is
amortised over the remaining life of the hedged assets or liabilities. The rate of amortisation over the remaining life is in line with
expected income or cost generated from the hedged assets or liabilities. Each reporting period, the expectation is compared to actual
with an accelerated run-off applied where the two diverge by more than set parameters.
v) Debit and credit valuation adjustments
The DVA and CVA are included in the fair value of derivative financial instruments. The DVA is based on the expected loss a
counterparty faces due to the risk of the Group’s two banking entities defaulting. The CVA reflects the Group’s risk of the
counterparty’s default.
The methodology is based on a standard calculation, taking into account:
} the one-year PD;
} the expected exposure at default;
} the expected LGD; and
} the average maturity of the swaps.
w) Provisions and contingent liabilities
A provision is recognised when there is a present obligation as a result of a past event, it is probable that the obligation will be settled
and the amount can be estimated reliably.
Provisions include ECLs on the Group’s undrawn loan commitments.
Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by uncertain future
events, or present obligations arising from past events which are either not probable or the amount of the obligation cannot be reliably
measured. Contingent liabilities are not recognised but disclosed unless they are not material or their probability is remote.
x) Employee benefits – defined contribution scheme
The Group contributes to defined contribution personal pension plans or defined contribution retirement benefit schemes for all
qualifying employees who subscribe to the terms and conditions of the schemes’ policies.
Obligations for contributions to defined contribution pension arrangements are recognised as an expense in profit or loss as incurred.
y) Share-based payments
Equity-settled share-based payments to employees providing services are measured at the fair value of the equity instruments at the
grant date in accordance with IFRS 2. The fair value excludes the effect of non-market-based vesting conditions.
The cost of the awards are charged on a straight-line basis to profit or loss (with a corresponding increase in the share-based payment
reserve within equity) over the vesting period in which the employees become unconditionally entitled to the awards. The increase
within the share-based payment reserve is reclassified to retained earnings upon exercise.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
2. Accounting policies (Continued)
The amount recognised as an expense for non-market conditions and related service conditions is adjusted each reporting period
to reflect the actual number of awards expected to be met. The amount recognised as an expense for awards subject to market
conditions is based on the proportion that is expected to meet the condition as assessed at the grant date. No adjustment is made to
the fair value of each award calculated at grant date.
Share-based payments that are not subject to further vesting conditions (i.e. the Deferred Share Bonus Plan (DSBP) for senior
managers) are expensed in the year services are received with a corresponding increase in equity. Awards granted to Executive
Directors in March 2020 are subject to service conditions through to vesting and are expensed over the vesting period. Awards granted
to Executive Directors from April 2021 are not subject to future service conditions and are expensed in the year where the service is
deemed to have been provided.
Where the allowable cost of share-based options or awards for tax purposes is greater than the cost determined in accordance with
IFRS 2, the tax effect of the excess is taken to the share-based payment reserve within equity. The tax effect is reclassified to retained
earnings upon vesting.
Employer’s national insurance is charged to profit or loss at the share price at the reporting date on the same service or vesting
schedules as the underlying options and awards.
Own shares are recorded at cost and deducted from equity and represent shares of OSBG that are held by the Employee Benefit Trust.
z) Leases
The Group’s leases are predominantly for offices and Kent Reliance branches. The Group recognises right-of-use assets and lease
liabilities for leases over 12 months long. Right-of-use assets and lease liabilities are initially recognised at the net present value of
future lease payments, discounted at the rate implicit in the lease or, where not available, the Group’s incremental borrowing cost.
Subsequent to initial recognition, the right-of-use asset is depreciated on a straight-line basis over the term of the lease. Future rental
payments are deducted from the lease liability, with interest charged on the lease liability using the incremental borrowing cost at
thetime of initial recognition. Lease liability payments are recognised within financing activities in the Consolidated Statement of
Cash Flows.
The Group assesses the likely impact of early terminations in recognising the right-of-use asset and lease liability where an option to
terminate early exists.
For modifications that increase the length of a lease; the modified lease term is determined and the lease liability remeasured by
discounting the revised lease payments using a revised discount rate, at the effective date of the lease modification; a corresponding
adjustment is made to the right-of-use asset. Where modifications decrease the length of a lease, the lease liability and right-of-use
asset are reduced in proportion to the reduction in the lease term, with any gain or loss recognised in the profit or loss.
Leases with low future payments or terms less than 12 months are recognised on an accruals basis directly in profit or loss.
aa) Adoption of new standards
International financial reporting standards issued and adopted for the first time in the year ended 31 December 2021
The following financial reporting standard amendments and interpretations were in issue and have been applied in the financial
statements from 1 January 2021.
} Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2
The Group has adopted ‘Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9 Financial Instruments, IAS 39 Financial
Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4 Insurance Contracts and IFRS 16
Leases’), which was issued in August 2020 and became mandatory for annual reporting periods beginning on or after 1 January 2021.
Adopting these amendments has enabled the Group to reflect the effects of transitioning from IBOR to alternative benchmark interest
rates (also referred to as ‘risk free rates’ or RFRs) without giving rise to accounting impacts that would not provide useful information to
users of financial statements. See the IBOR transition section in note 46 Risk Management for further details. The Group continues to
apply the Phase 1 amendments ‘Interest Rate Benchmark reform: Amendments to IFRS 9/IAS 39 and IFRS 7’ where relevant.
The IFRS Interpretations Committee published an agenda decision in April 2021 addressing how a customer should account for
the costs of configuring or customising a supplier’s application software in a SaaS arrangement that is determined to be a service
contract. This has accounting implications for any cloud-based applications that may be held as an intangible asset as the new
guidance requires the majority of these costs should not be recognised as an intangible asset except in a few limited circumstances.
See note 2 l) for further details.
There has been no material impact on the financial statements of the Group from the adoption of these financial reporting standard
amendments and interpretations.
International financial reporting standards issued but not yet effective which are applicable to the Group
There are a number of minor amendments to financial reporting standards that were in issue but have not been applied in the financial
statements, as they were not yet effective on 31 December 2021. The adoption of these amendments will not have a material impact on
the financial statements of the Group in future periods.

194
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
3. Judgements in applying accounting policies and critical accounting estimates
In preparing these financial statements, the Group has made judgements, estimates and assumptions which affect the reported
amounts within the current and future financial years. Actual results may differ from these estimates.
As set out in the Task Force on Climate-Related Financial Disclosures (TCFD) report on page 86, climate change is a global challenge
and an emerging risk to businesses, people and the environment. Therefore, in preparing the financial statements, the Group has
considered the impact of climate-related risks on its financial position and performance, including the impact on expected credit
losses and redemption profiles included in EIR. While the effects of climate change represent a source of uncertainty, the Group
doesnot consider there to be a material impact on its judgements and estimates from the physical or transition risks in the short
tomedium term.
Estimates and judgements are regularly reviewed based on past experience, expectations of future events and other factors.
Judgements
The Group has made the following key judgements in applying the accounting policies:
(i) Loan book impairments
Significant increase in credit risk for classification in stage 2
The Group’s SICR rules, prior to the COVID-19 pandemic, considered changes in default risk, internal impairment measures, changes
in customer credit bureau files, or whether forbearance measures had been applied. The Group took steps to adjust the SICR criteria
through the pandemic to account for the changes in risk profile and specifically for payment deferrals granted, noting that not all of
the instances of a payment deferral would be a significant increase in credit risk.
} As the COVID-19 payment deferrals initiative has ceased, newly granted payment holidays are considered a SICR event, aligned to
the pre-COVID-19 SICR approach. Other adjustments made during the pandemic to account for high risk accounts and those with
income stress are still considered in the SICR criteria.
(ii) IFRS 9 classification
Application of the ‘business model’ requirements under IFRS 9 requires the Group to conclude on the business models that it operates
and is a fundamental aspect in determining the classification of the Group’s financial assets.
Management concluded that the Group’s business model is a ‘held to collect’ business model with the majority of the Group’s assets
being loans and advances held at amortised cost. This conclusion was reached on the basis that the Group originates and purchases
loans and advances in order to collect contractual cash flows over the life of the originated or purchased financial instrument.
The Group has applied judgement in determining whether the contractual terms of a financial asset give rise on specified dates to cash
flows that are SPPI on the principal amount outstanding when applying the classification criteria of IFRS 9. The main area of judgement
is over the Group’s loans and advances to customers which have been accounted for under amortised cost with the exception of one
acquired mortgage book of £17.7m (2020: £19.1m) that is recognised at FVTPL.
Estimates
The Group has made the following estimates in the application of the accounting policies that have a significant risk of material
adjustment to the carrying amount of assets and liabilities within the next financial year:
(i) Loan book impairments
Set out below are details of the critical accounting estimates which underpin loan impairment calculations. Less significant estimates
are not discussed as they do not have a material effect. The Group has recognised total impairments of £101.5m (2020: £111.0m) at the
reporting date as disclosed in note 24.
Modelled impairment
Modelled provision assessments are also subject to estimation uncertainty, underpinned by a number of estimates being made by
management which are utilised within impairment calculations. Key areas of estimation within modelled provisioning calculations
include those regarding the LGD and forward-looking macroeconomic scenarios.
Loss given default model
The Group has a number of LGD models, which include a number of estimated inputs including propensity to go to possession given
default (PPD), forced sale discount, time to sale and sale cost estimates. The LGD is sensitive to the application of the HPI. For the
OSB segment at 31 December 2021 a 10% fall in house prices would result in an incremental £22.7m (2020: £25.6m) of provision being
required. For the CCFS segment at 31 December 2021 a 10% fall in house prices would result in an incremental £8.3m (2020: £13.9m) of
provision being required. The combined impact across both OSB and CCFS businesses of a 10% fall in house prices would result in an
increase in total provisions of £31.0m (2020: £39.5m) as at 31 December 2021.
The Group’s forecasts of HPI movements used in the impairment models are disclosed in the Risk profile performance review on
page69.
Forward-looking macroeconomic scenarios
The forward-looking macroeconomic scenarios affect LGD estimates. Therefore the ECL calculations are sensitive to both the
scenarios utilised and their associated probability weightings.
The Group sources economic forecasts from an appropriately qualified, independent third party. The Group considers four
probability-weighted scenarios: base, upside, downside and severe downside scenarios. There still remains some uncertainty around

195
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
3. Judgements in applying accounting policies and critical accounting estimates (Continued)
the pandemic, with the unknown economic impact of removing COVID-19 support measures in 2021 and the ongoing risk of further
COVID-19 variants. There is also emerging uncertainty over the cost of living, with high inflation and base rate increases forecast in the
near to medium term, therefore the management and Board deemed it prudent to adjust the probability weightings as at 31 December
2021 to increase the contribution from the downside scenarios and account for the increased economic uncertainty. The Group’s
macroeconomic scenarios can be found in the Credit Risk section of the Risk profile performance overview on page 69.
The following tables detail the ECL scenario sensitivity analysis with each scenario weighted at 100% probability. The purpose of
using multiple economic scenarios is to model the non-linear impact of assumptions surrounding macroeconomic factors and ECL
calculated:
As at 31-Dec-21
Weighted
(see note 24)
100%
Base case
scenario
100% Upside
scenario
100%
Downside
scenario
100% Severe
downside
scenario
Total loans before provisions, £m 21,164.1 21,164.1 21,164.1 21,164.1 21,164.1
Modelled ECL, £m 48.3 26.5 13.1 74.0 120.3
Non-modelled ECL, £m 53.2 53.2 53.2 53.2 53.2
Total ECL, £m 101.5 79.7 66.3 127. 2 173.5
ECL Coverage, % 0.48 0.38 0.31 0.60 0.82
As at 31-Dec-20
Total loans before provisions, £m 19,322.6 19,322.6 19,322.6 19,322.6 19,322.6
Modelled ECL, £m 71.6 54.6 40.1 113.5 166.7
Non-modelled ECL, £m 39.4 39.4 39.4 39.4 39.4
Total ECL, £m 111.0 94.0 79.5 152.9 206.1
ECL Coverage, % 0.57 0.49 0.41 0.79 1.07
(ii) Loan book acquisition accounting and income recognition
Acquired loan books are initially recognised at fair value. Significant estimation is required in calculating their EIR using cash flow
models which include assumptions on the likely macroeconomic environment, including HPI, unemployment levels and interest rates,
as well as loan level and portfolio attributes and history used to derive prepayment rates and the amount of incurred losses.
The EIR on loan books purchased at significant discounts or premiums is particularly sensitive to the weighted average life of the loan
book through the constant prepayment rate (CPR) and the constant default rate (CDR) estimates assumed, as the purchase discount
or premium is recognised over the expected life of the loan book through the EIR. New defaults are modelled at zero loss (as losses will
be recognised in profit or loss as impairment losses) and therefore have the same impact on the EIR as prepayments.
Incurred losses at acquisition are calculated using the Group’s modelled provision assessment (see (i) Loan book impairments above
for further details).
The EIR calculated at acquisition is not changed for subsequent variances in actual to expected cash flows, unless the variance is due
to changes in expectations of market rates of interest. The Group monitors the actual cash flows for each acquired book, and where
they diverge significantly from expectation, the revised future cash flows are discounted at the original EIR, with any resulting change
in carry value creating a corresponding gain or loss in the Consolidated Statement of Comprehensive Income as interest income. The
Group also considers the total variance across all acquired portfolios and the economic outlook.
The Group recognised a £7.5m loss in 2021 as a result of resetting cash flows on acquired books (2020: loss of £3.5m). The largest
acquired book is Precise with sensitivities completed on increasing/reducing the life of the book by six months which results in a reset
gain/loss of c. £27m/£31m (2020: c. £33m/£37m).
It is reasonably possible, on the basis of existing knowledge, that a change in estimated cash recoveries of principal and interest which
are past due at loan maturity could result in a material increase in the value of the acquired second charge loan portfolios with a
corresponding increase in net interest income. It is currently impracticable to estimate reliably the possible effects of a change in cash
flow recoveries as they are subject to application of the Group’s forbearance and collections policies, following further engagement
with borrowers and regulatory guidance.
(iii) Effective interest rate on organic lending
Estimates are made when calculating the EIR for newly-originated loan assets. These include the likely customer redemption profiles.
Mortgage products offered by the Group include directly attributable net fee income and a period on reversion rates after the fixed/
discount period. Products revert to the standard variable rate (SVR) or Base plus a margin for the Kent Reliance brand or a SONIA/Base
plus a margin for the Precise brand. The Group uses historical customer behaviours, expected take-up rate of retention products and
macroeconomic forecasts in its assessment of prepayment rates. Customer prepayments in a fixed rate or incentive period can give
rise to Early Repayment Charge (ERC) income.

196
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
3. Judgements in applying accounting policies and critical accounting estimates (Continued)
Estimation is used in assessing whether and for how long mortgages that reach the end of the initial product term stay on reversion
rates, and to the quantum and timing of prepayments that incur ERCs. The estimate of customer weighted average life will determine
the period over which net fee income and expected reversionary income is recognised. Estimates are reviewed regularly and, as
a consequence of the reviews, adjustments of £19.0m were made in 2021, increasing net interest income and customer loans and
receivables.
Sensitivities have been applied to the Precise and Kent Reliance loan books, to illustrate the impact on interest income of a change in
the expected weighted average lives of the loan books. An extension of the expected life will typically result in increased expectations
of post reversionary income, less ERCs and a recognition of net fee income over a longer period. A shortening of the expected life will
lead to reduced post reversionary income, more ERCs and a recognition of net fees over a shorter period.
The potential duration of a change in customer behaviour as a result of COVID-19, changes in lifestyle including working patterns,
higher cost of living and the macroeconomic outlook remains uncertain. A period of six months’ variance in the weighted average lives
of the loan books was selected to show this sensitivity.
Applying a six month extension in the expected weighted average life of the organic loan books would result in a gain of c. £22.7m
(2020: c. £22.6m) recognised in net interest income. Applying a six month reduction in the expected weighted average life of the loan
book would result in a reset loss of c. £14.9m (2020: c. £6.9m).
4. Interest receivable and similar income
2021
£m
2020
£m
At amortised cost:
On OSB mortgages 541.3 496.8
On CCFS mortgages 342.9 331.9
On finance leases 6.3 3.8
On investment securities 2.1 2.5
On other liquid assets 2.7 5.3
Amortisation of fair value adjustments on CCFS Combination
1
(66.1) (67.8)
Amortisation of fair value adjustments on hedged assets
2
(39.9) (17.9)
789.3 754.6
At FVTPL:
Net expense on derivative financial instruments – lending activities (42.9) ( 47.7 )
At FVOCI:
On investment securities 0.4 5.0
746.8 711.9
1. Amortisation of fair value adjustments on CCFS loan book at Combination.
2. The amortisation relates to hedged assets where the hedges were terminated before maturity and were effective at the point of termination.
5. Interest payable and similar charges
2021
£m
2020
£m
At amortised cost:
On retail deposits 156.7 245.5
On BoE borrowings 4.5 8.4
On PSBs 1.2 1.7
On subordinated liabilities 0.8 0.8
On wholesale borrowings 0.8 1.3
On debt securities in issue 3.9 3.4
On lease liabilities 0.3 0.3
Amortisation of fair value adjustments on CCFS Combination
1
(1.5) (3.3)
Amortisation of fair value adjustments on hedged liabilities
2
(1.1) –
165.6 258.1
At FVTPL:
Net income on derivative financial instruments – savings activities (6.4) (18.4)
159.2 239.7
1. Amortisation of fair value adjustments on CCFS customer deposits at Combination.
2. The amortisation relates to hedged liabilities where the hedges were terminated before maturity and were effective at the point of termination.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
6. Fair value gains on financial instruments
2021
£m
2020
£m
Fair value changes in hedged assets (297.8) 107.3
Hedging of assets 298.9 (116.8)
Fair value changes in hedged liabilities 27.4 (4.1)
Hedging of liabilities (26.1) 6.8
Ineffective portion of hedges 2.4 (6.8)
Net gains/(losses) on unmatched swaps 10.3 (18.0)
Amortisation of inception adjustments
1
3.0 13.0
Amortisation of acquisition-related inception adjustments
2
13.4 17.0
Amortisation of de-designated hedge relationships
3
0.2 2.4
Fair value movements on mortgages at FVTPL 1.2 (0.2)
Debit and credit valuation adjustment (1.0) –
29.5 7.4
1. The amortisation of inception adjustment relates to the amortisation of the hedging adjustments arising when hedge accounting commences, primarily on derivative
instruments previously taken out against the mortgage pipeline and also on derivative instruments previously taken out against new retail deposits.
2. Relates to hedge accounting assets and liabilities recognised on the Combination. The inception adjustments are being amortised over the life of the derivative instruments
acquired on Combination subsequently designated in hedging relationships.
3. Relates to the amortisation of hedged items where hedge accounting has been discontinued due to ineffectiveness.
7. Gain on sales of financial instruments
On 10 February 2021, the Group sold the Precise Mortgage Funding 2019-1B plc A2 notes for £287.0m, generating a gain on sale of
£4.0m. Excluding the impact of the fair value adjustment on Combination of £1.7m, the underlying gain on sale was £2.3m.
On 17 January 2020, the Group sold the Canterbury Finance No.1 plc (Canterbury 1) A2 note for proceeds of £225.4m. After incurring
costs of £0.2m, a gain on sale of £1.9m was recognised.
On 23 January 2020, the Group sold the F note and residual certificates of Canterbury 1 for proceeds of £23.6m. Following the sale
the Group had no remaining interest in the Canterbury securitisation. As a result, consolidation of Canterbury into the Group ceased
on disposal. The Group recognised a gain on sale of £16.0m upon deconsolidation.
On 23 January 2020, the Group securitised mortgage loans with a par value of £375.5m through Precise Mortgage Funding 2020-1B
plc (PMF 2020-1B), issuing £388.9m of Sterling floating rate notes. The Group retained the £100.7m class A2 notes, with all other note
classes and the residual certificates being sold to the external market. As such, the Group has not consolidated PMF 2020-1B as the
risks and rewards have been transferred. The Group recognised a gain on sale of £2.0m upon deconsolidation. Excluding the impact of
the fair value adjustment on the mortgages on Combination with OSB of £13.1m, the underlying gain on sale was £15.1m.
On 14 September 2020, the Group sold £150.0m of Canterbury Finance No. 3 plc A2 notes for £150.1m, resulting in a gain on sale of
£0.1m.
8. Other operating income
2021
£m
2020
£m
Interest received on mortgages held at FVTPL 0.5 0.6
Fees and commissions receivable 7.4 8.4
7.9 9.0
9. Administrative expenses
2021
£m
2020
£m
Staff costs 92.5 86.0
Facilities costs 6.0 5.7
Marketing costs 4.0 5.1
Support costs
1
25.3 18.4
Professional fees 16.9 22.3
Other costs 7.3 5.7
Depreciation (see note 30) 5.0 5.6
Amortisation (see note 31) 9.5 8.2
166.5 157.0
1. External servicing costs of £6.1m are now categorised as support costs in 2021 (2020: £6.0m categorised in professional fees).

198
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
9. Administrative expenses (Continued)
Included in professional fees are amounts paid to the Company’s auditor as follows:
2021
£’000
2020
£’000
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 68 65
Fees payable to the Company’s auditor for the audit of the accounts of subsidiaries 2,330 2,198
Total audit fees 2,398 2,263
Audit-related assurance services
1
258 217
Other assurance services
2
121 45
Other non-audit services
3
240 101
Total non-audit fees 619 363
Total fees payable to the Company’s auditor 3,017 2,626
1. Includes review of interim financial information and profit verifications.
2. 2021 costs comprise assurance reviews of Alternative performance measures (APMs), integration costs and European Single Electronic Format tagging. 2020 costs related to
assurance review of APMs and integration costs.
3. 2021 costs comprise work related to the AT 1 securities issuance, a gap analysis in relation to TCFD and the European Medium Term Note programme. 2020 primarily
comprises work related to the insertion of a new holding company.
Staff costs comprise the following:
2021
£m
2020
£m
Salaries, incentive pay and other benefits 72.9 68.5
Share-based payments 6.7 5.1
Social security costs 7.7 8.1
Other pension costs 5.2 4.3
92.5 86.0
The average number of people employed by the Group (including Executive Directors) during the year is analysed below.
2021 2020
UK 1,220 1,330
India 535 486
1,755 1,816
10. Impairment of intangible assets
Assets arising on the Combination with CCFS in 2019 included a broker relationships intangible asset with a fair value of £17.1m on
Combination. During 2020 an impairment of £7.0m was recognised arising from changes to CCFS anticipated lending volumes over
three years post combination, which are a key input to the calculation of the fair value, and which were revised due to COVID-19
impacts. During 2021 an impairment assessment was performed and as actual lending volumes were higher than anticipated the
Group has recognised an impairment reversal of £3.1m. The remaining carrying value of the broker relationships intangible asset at
31 December 2021 is £5.0m (2020: £5.8m).
11. Directors’ emoluments and transactions
2021
£’000
2020
£’000
Short-term employee benefits
1
2,825 2,675
Post-employment benefits 106 99
Share-based payments
2
1,267 425
4,198 3,199
1. Short-term employee benefits comprise Directors’ salary costs, Non-Executive Directors’ fees and other short-term incentive benefits, which are disclosed in the Annual
Report on Remuneration.
2. Share-based payments represent the amounts received by Directors for schemes that vested during the year.
In addition to the total Directors’ emoluments above, the Executive Directors were granted deferred bonuses of £633k (2020: £495k)
in the form of shares. Deferred Share Bonus Plan (DSBP) awards granted from April 2021 have a holding period of three years with no
further conditions attached other than standard clawback situations. In March 2020 and prior years, the DSBP awards were subject to
either a three or five year vesting period with conditions attached, notably if the Director leaves prior to vesting, the award is forfeited
unless a good leaver reason applies such as redundancy, retirement or ill-health.

199
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
11. Directors’ emoluments and transactions (Continued)
The Executive Directors received a further share award under the Performance Share Plan (PSP) with a grant date fair value of £1,458k
(2020: £1,359k) using a share price of £4.94 (2020: £2.58) (the mid-market quotation on the day preceding the date of grant). These
shares vest annually from year three in tranches of 20 per cent, subject to performance conditions discussed in note 12 and the Annual
Report on Remuneration.
The Directors of the Company are employed and compensated by OneSavings Bank plc.
No compensation was paid for loss of office during 2021. The compensation for loss of office during 2020 was £59k.
There were no outstanding loans granted in the ordinary course of business to Directors and their connected persons as at
31 December 2021 and 2020.
The Annual Report on Remuneration and note 12 Share-based payments provide further details on Directors’ emoluments.
12. Share-based payments
Following the insertion of OSB GROUP PLC as the holding company on 27 November 2020, the share awards and options over
OneSavings Bank plc shares were automatically transferred to OSB GROUP PLC shares.
The Group operates the following share-based schemes:
Sharesave Scheme
The Save As You Earn (SAYE) or Sharesave Scheme is a share option scheme which is available to all UK-based employees. The
Sharesave Scheme allows employees to purchase options by saving a fixed amount of between £5 and £500 per month over a period
of either three or five years at the end of which the options, subject to leaver provisions, are usually exercisable. If not exercised,
the amount saved is returned to the employee. The Sharesave Scheme has been in operation since 2014 and an invitation to join the
scheme is usually extended annually, with the option price calculated using the mid-market price of an OSB GROUP PLC ordinary
share over the three dealing days prior to the Invitation Date and applying a discount of 20%.
Deferred Share Bonus Plan
The DSBP applies to Executive Directors and certain senior managers with 50% of their performance bonuses to be deferred in
shares for three years for Executive Directors and one or five years for senior managers. There are no further performance or vesting
conditions attached to deferred awards for senior managers, which also applies to Executive Directors for awards granted from April
2021; the share awards are subject to clawback provisions. The DSBP awards are expensed in the year services are received with a
corresponding increase in equity. Awards granted to Executive Directors in March 2020 and prior, are subject to vesting conditions and
are expensed over the vesting period.
DSBP awards for senior managers carry entitlements to dividend equivalents, which are paid when the awards vest. DSBP awards
granted from April 2021 to Executive Directors are entitled to dividend equivalents; awards granted in prior years were not entitled to
dividend equivalents.
Performance Share Plan
Executive Directors and certain senior managers are also eligible for a PSP award based on performance conditions which vest in
tranches over three to seven years.
The performance conditions that apply to PSP awards from 2020 are based on a combination of earnings per share (EPS) weighting
of 35%, total shareholder return (TSR) 35%, risk-based 15% and return on equity (ROE) 15%. Prior to 2020, PSP awards were based on
a combination of EPS weighting of 40%, TSR 40% and ROE 20%. The PSP conditions are assessed independently. The EPS element
assesses the compound annual growth rate over the performance period, that is, the annualised growth from a base year 0 to final
year 3. For example, the 2022 Award will measure the EPS growth from 1 January 2021 to 31 December 2024. For the TSR element,
the Company’s ordinary shares relative performance is measured against the FTSE 250 (excluding investment trusts). The risk-based
measure is assessed against the risk management performance with regard to all relevant risks including, but not limited to, an
assessment of regulatory risk, operational risk, conduct risk, liquidity risk, funding risk, marketing risk and credit risk. For the ROE
element, growth rates are assessed against the Group’s underlying profit after taxation as a percentage of average shareholders’
equity.
As part of the Combination, mirror PSP awards were granted to replace the 2018 and 2019 CCFS schemes that terminated upon the
Combination. The mirror PSP schemes follow the same performance conditions as the Group’s 2018 and 2019 PSP awards.
The share-based expense for the year includes a charge in respect of the Sharesave Scheme, DSBP and PSP. All charges are included
in employee expenses within note 9 Administrative expenses.
The share-based payment expense during the year comprised the following:
2021
£m
2020
£m
Sharesave Scheme 0.7 0.5
Deferred Share Bonus Plan 3.8 3.9
Performance Share Plan 2.2 0.7
6.7 5.1

200
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
12. Share-based payments (Continued)
Movements in the number of share awards and their weighted average exercise prices are set out below:
Sharesave Scheme
Deferred Share
Bonus Plan
Performance
Share Plan
Number
Weighted
average
exercise
price, £ Number Number
At 1 January 2021 2,745,332 2.53 1,119,757 4,986,527
Granted 339,097 3.96 363,624 1,477,111
Exercised/Vested (270,709) 3.10 (683,456) (513,927)
Forfeited (392,460) 2.63 (2,809) (724,631)
At 31 December 2021 2,421,260 2.65 797,116 5,225,080
Exercisable at:
31 December 2021 8,480 3.37 – –
At 1 January 2020 2,869,146 2.63 738,473 3,096,371
Granted 1,483,202 2.29 839,735 2,756,176
Exercised/Vested (1,080,430) 2.32 (449,608) (383,205)
Forfeited (526,586) 2.79 (8,843) (482,815)
At 31 December 2020 2,745,332 2.53 1,119,757 4,986,527
Exercisable at:
31 December 2020 118,402 2.89 – –
For the share-based awards granted during the year, the weighted average grant date fair value was 286 pence (2020: 188 pence).
The range of exercise prices and weighted average remaining contractual life of outstanding awards are as follows:
2021 2020
Exercise price Number
Weighted
average
remaining
contractual
life (years) Number
Weighted
average
remaining
contractual
life (years)
Sharesave Scheme
227–335 pence (2020: 227–335 pence) 2,421,260 2.0 2,745,332 2.5
Deferred Share Bonus Plan
Nil 797,116 0.7 1,119,757 0.7
Performance Share Plan
Nil 5,225,080 2.4 4,986,527 2.5
8,443,456 2.1 8,851,616 2.3
Sharesave Scheme
2021 2020 2019 2018 2017
Contractual life, years 3 3 5 3 5 3 5 3 5
Share price at issue, £ 5.13 2.86 2.86 3.32 3.32 4.19 4.19 3.93 3.93
Exercise price, £ 3.96 2.29 2.29 2.65 2.65 3.35 3.35 3.15 3.15
Expected volatility, % 37.9 57.6 57.6 31.9 31.9 16.1 16.5 18.0 17. 3
Dividend yield, % 4.5 3.3 3.3 4.8 4.8 4.4 4.4 4.1 4.1
Grant date fair value, £ 1.46 1.22 1.34 0.90 0.91 0.40 0.43 0.75 0.70
The sharesave schemes are not entitled to dividends between the option and exercise date. A Black Scholes model is used to determine
the grant date fair value with two inputs:
} Expected volatility – from 2019, the expected volatility is based on the Company’s share price. Prior to this the Group used the FTSE
350 diversified financials volatility as insufficient history was available for the Company’s share price.
} Dividend – based on the average dividend yield across external analyst reports for the quarter prior to scheme grant date.

201
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
12. Share-based payments (Continued)
Deferred Share Bonus Plan
2020 2019 2018 2017
Contractual life, years 3 3 3 5
Mid-market share price, £ 2.58 3.96 3.80 4.04
Attrition rate, % – 8.4 9.7 11.8
Dividend yield, % 5.6 4.7 4.6 4.0
Grant date fair value, £ 2.21 3.47 3.34 3.37
For awards granted from April 2021 there are no further performance or vesting conditions attached to deferred awards, for further
details see DSBP above.
For DSBP awards where conditions exist, these schemes carry no rights to dividend equivalents and a Black Scholes model is used to
determine the grant date fair value with a dividend yield input applied – based on the average dividend yield across external analyst
reports for the quarter prior to scheme grant date.
Performance Share Plan
Performance awards are typically made annually at the discretion of the Group Remuneration Committee. Awards are based on a
mixture of internal financial performance targets, risk-based measures and relative TSR.
Non-market performance conditions exist for the scheme notably that you are employed by the Company at the vesting date with
good leaver exceptions, and an attrition rate is applied as an estimate of the actual number of awards that will meet the related
conditions at the vesting date.
The awards are not entitled to a dividend equivalent between grant date and vesting and a Black Scholes model is used to determine
the grant date fair value with a dividend yield input applied – based on the average dividend yield across external analyst reports for
the quarter prior to scheme grant date.
The fair value of an option that is subject to market conditions (the relative share price element of the Performance Share Plan) is
determined at grant date using a Monte Carlo model at the time of grant.
The inputs into the models are as follows:
2021 2020 2019 2018
Contractual life, years 3–7 3–7 3 3
Mid-market share price, £ 4.94 2.58 3.96 4.11
Attrition rate, % 12.8 7.3 8.4 9.7
Expected volatility, % 59.5 43.9 26.8 29.1
Dividend yield, % 3.8 5.6 4.7 4.6
Vesting rate – TSR % 40.8 27.8 44.9 54.0
Grant date fair value, £ 4.26 2.06 3.47 3.61
CCFS PSP Mirror Schemes
2019 2018
Contractual life, years 3 2
Mid-market share price, £ 3.54 3.54
Expected volatility, % 28.6 28.6
Attrition rate, % – –
Dividend yield, % 4.8 4.8
Vesting rate – TSR, % 37.4 37.4
Grant date fair value, £ 3.29 3.17
13. Integration costs
2021
£m
2020
£m
Consultant fees 2.2 1.7
Staff costs 2.2 8.1
Impairment 0.6 –
5.0 9.8
Consultant fees relate to advice on the Group’s future operating structure.
Staff costs relate to personnel who will leave or have left the Group through the transition of operations to the new operating model.
Impairment relates to a property sold during the year.

202
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
14. Exceptional items
2021
£m
2020
£m
Consultant fees – 2.0
Legal and professional fees 0.2 1.3
0.2 3.3
Exceptional items relate to the insertion of OSB GROUP PLC as the new holding company and listed entity of the Group.
15. Taxation
The Group publishes its tax strategy on its corporate website. The table below shows the components of the Group’s tax charge for the
year:
2021
£m
2020
£m
Corporation taxation 128.0 79.7
Deferred taxation (0.2) (0.8)
Release of deferred taxation on CCFS Combination
1
(8.5) (14.8)
Total taxation 119.3 64.1
1. Release of deferred taxation on CCFS Combination relates to the unwind of the deferred tax liabilities recognised on the fair value adjustments of the CCFS assets and
liabilities at the acquisition date (£14.1m) (2020: £19.6m) and the impact of the corporation tax rate increase on these deferred tax liabilities (£5.6m) (2020: £4.8m).
The charge for taxation on the Group’s profit before taxation differs from the charge based on the standard rate of UK Corporation
Tax of 19% (2020: 19%) as follows:
2021
£m
2020
£m
Profit before taxation 464.6 260.4
Profit multiplied by the standard rate of UK Corporation Tax (19%) 88.3 49.5
Bank surcharge
1
27.7 11.0
Taxation effects of:
Expenses not deductible for taxation purposes 0.7 1.6
Impact of deferred tax rate change
2
5.2 4.4
Adjustments in respect of earlier years – (0.4)
Tax adjustments in respect of share-based payments 1.2 0.8
Tax on coupon paid on non-controlling interest securities (2.5) (1.5)
Timing differences (1.3) (1.3)
Total taxation charge 119.3 64.1
1. Tax charge for the two banking entities of £31.9m (2020: £16.8m) offset by the tax impact of unwinding CCFS Combination items of £4.2m (2020: £5.8m).
2. Due to change in corporation tax rate from 19% to 25% on 1 April 2023 (2020: due to cancelled rate reductions from 19% to 17% on 1 April 2020).
Factors affecting tax charge for the year
On 24 May 2021, the Government substantively enacted legislation to increase the corporation tax rate from 19% to 25% from 1 April
2023. This has increased the deferred tax charge in the year by £5.2m.
The effective tax rate for the year ended 31 December 2021, excluding the impact of adjustments in respect of earlier years and the
deferred tax rate change, was 24.6% (2020: 23.1%).
The £5.2m (2020: £4.4m) impact of the deferred tax rate change relates predominantly to the deferred tax liability from the CCFS
combination (see note 29 and 39).
During the year a tax credit of £1.6m (2020: credit of £0.3m) of tax has been recognised directly within equity relating to the Group’s
share-based payment schemes.
During the year a tax credit of £0.5m (2020: charge of £0.5m) has been recognised within OCI relating to investment securities
classified as FVOCI.
Factors that may affect future tax charges
In November 2021, the government announced that the bank surcharge would reduce from 8% to 3% from 1 April 2023, together with
an increase in the surcharge annual allowance from £25m to £100m. These changes were not substantively enacted into legislation at
the balance sheet date and so have not been reflected in these financial statements. We have assessed the impact of these changes
and concluded that they will not have a material impact on the Group’s deferred tax balances.

203
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
16. Earnings per share
Earnings per share (EPS) is based on the profit for the year and the weighted average number of ordinary shares in issue. Basic EPS are
calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during
the year. Diluted EPS take into account share options and awards which can be converted to ordinary shares.
For the purpose of calculating EPS, profit attributable to ordinary shareholders is arrived at by adjusting profit for the year for the
coupon on non-controlling interest securities classified as equity:
2021
£m
2020
£m
Statutory profit after tax 345.3 196.3
Less: Coupon on non-controlling interest securities classified as equity (4.7) (5.5)
Statutory profit attributable to ordinary shareholders 340.6 190.8
2021 2020
Weighted average number of shares, millions
Basic 448.1 446.2
Dilutive impact of share-based payment schemes 4.6 4.0
Diluted 452.7 450.2
Earnings per share, pence per share
Basic 76.0 42.8
Diluted 75.2 42.4
17. Dividends
On 27 November 2020, OSB GROUP PLC became the ultimate parent company, and soon after the listed entity of Group, replacing
OneSavings Bank plc which is now a 100% subsidiary of OSB GROUP PLC.
2021 2020
£m
Pence per
share £m
Pence per
share
Final dividend for the prior year 64.8 14.5 – –
Interim dividend for the current year 21.9 4.9 – –
86.7 –
The Directors recommend a final dividend of £94.7m, 21.1 pence per share (2020: £64.8m, 14.5 pence per share) payable on 18 May
2022 with an ex-dividend date of 24 March 2022 and a record date of 25 March 2022. This dividend is not reflected in these financial
statements as it is subject to approval by shareholders at the AGM on 12 May 2022. This will make up the total dividend for 2021 of
£116.6m, 26 pence per share (2020: £64.8m, 14.5 pence per share).
A summary of the Company’s distributable reserves is shown below:
2021
£m
2020
£m
Retained earnings 1,358.4 –
Other distributable reserves
1
(3.5) –
Distributable reserves 1,354.9 –
1. Other distributable reserves comprises own shares held in the Group’s EBT of £3.5m which are recognised within OSBG under look-through accounting.
Further additional distributable reserves are expected to be realised over time from dividend receipts from profits generated from the
subsidiaries including two regulated banks within the Group.
As at 31 December 2020 OSB GROUP PLC had no distributable reserves. The Company reduced the nominal value of OSB GROUP PLC
shares from 304 pence each to 1 penny each on 26 February 2021 (see note 1). The dividend of £64.8m was paid on 2 June 2021 out of
the distributable reserves following this capital reduction exercise.

204
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
18. Cash and cash equivalents
The following table analyses the cash and cash equivalents disclosed in the Consolidated Statement of Cash Flows:
2021
£m
2020
£m
Cash in hand 0.5 0.5
Unencumbered loans and advances to credit institutions 2,636.2 2,370.1
Investment securities 100.0 –
2,736.7 2,370.6
19. Loans and advances to credit institutions
2021
£m
2020
£m
Unencumbered:
BoE call account 2,496.4 2,256.5
Call accounts 43.3 55.6
Cash held in special purpose vehicles
1
89.6 51.0
Term deposits 6.9 7.0
Encumbered:
BoE cash ratio deposit 59.5 52.3
Cash held in special purpose vehicles
1
48.0 42.7
Cash margin given 99.9 211.1
2,843.6 2,676.2
1. Cash held in special purpose vehicles (SPVs) is ring-fenced for use in managing the Group’s securitised debt facilities under the terms of securitisation agreements. Cash
held in internal SPVs is treated as unencumbered in proportion to the retained interest in the SPV based on the nominal value of the bonds held in the Group to total bonds in
the securitisation, and included in cash and cash equivalents. Cash retained in SPVs designated as cash reserve credit enhancement is treated as encumbered in proportion
to the external holdings in the SPV and excluded from cash and cash equivalents.
20. Investment securities
2021
£m
2020
£m
Held at FVTPL:
RMBS loan notes 0.7 –
0.7 –
Held at FVOCI:
UK Sovereign debt 152.1 –
RMBS loan notes 15.5 285.0
167.6 285.0
Held at amortised cost:
UK Sovereign debt 100.0 –
RMBS loan notes 223.1 186.2
323.1 186.2
Less: Expected credit losses – –
323.1 186.2
491.4 471.2
At 31 December 2021, the Group had no RMBS held at FVOCI (2020: £147.1m) and £119.5m of RMBS held at amortised cost (2020:
£13.7m) sold under repos.
The Directors consider that the primary purpose of holding investment securities is prudential. These securities are held as liquid assets
with the intention of use on a continuing basis in the Group’s activities and are classified as FVTPL, FVOCI and amortised cost in
accordance with the Group’s business model for each security.

205
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
20. Investment securities (Continued)
Movements during the year in investment securities held by the Group are analysed as follows:
2021
£m
2020
£m
At 1 January 471.2 635.3
Additions
1,2
568.2 291.6
Disposals and maturities
3
(549.7) (457.2)
Movement in accrued interest 0.6 0.5
Changes in fair value 1.1 1.0
At 31 December 491.4 471.2
1. Additions include £100.0m of UK Treasury bills which had a maturity of less than three months from date of acquisition (2020: nil).
2. The prior year additions included £100.7m of retained RMBS loan notes following the deconsolidation of PMF 2020-1B.
3. The prior year disposals and maturities included £49.9m of UK Sovereign debt which had a maturity of less than three months from date of acquisition.
At 31 December 2021, investment securities included investments in unconsolidated structured entities (note 46) of £100.7m notes
in PMF 2020-1B and £21.0m notes in PMF 2017-1B (2020: £100.7m notes in PMF 2020-1B and £285.0m notes in PMF 2019-1B). The
investments represent the maximum exposure to loss from unconsolidated structured entities.
21. Loans and advances to customers
2021
£m
2020
£m
Held at amortised cost:
Loans and advances (see note 22) 21,047.9 19, 257.1
Finance leases (see note 23) 116.2 65.5
21,164.1 19,322.6
Less: Expected credit losses (see note 24) (101.5) (111.0)
21,062.6 19,211.6
Residential mortgages held at FVTPL 17.7 19.1
21,080.3 19,230.7
22. Loans and advances
2021 2020
OSB
£m
CCFS
£m
Total
£m
OSB
£m
CCFS
Total
£m£m
Gross carrying amount
Stage 1 10,393.2 7,685.7 18,078.9 9,310.8 6,749.5 16,060.3
Stage 2 1,142.3 1,269.8 2,412.1 1,362.0 1, 327.6 2,689.6
Stage 3 360.4 99.1 459.5 344.5 48.1 392.6
Stage 3 (POCI) 45.2 52.2 97.4 48.6 66.0 114.6
11,941.1 9,106.8 21,047.9 11,065.9 8,191.2 19, 257.1
The mortgage loan balances pledged as collateral for liabilities are:
2021
£m
2020
£m
BoE under TFS and TFSME 5,887. 2 5,203.2
Securitisation 486.5 435.4
6,373.7 5,638.6

206
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
22. Loans and advances (Continued)
The Group’s securitisation programmes, use of TFS and TFSME result in certain assets being encumbered as collateral against such
funding. As at 31 December 2021, the percentage of the Group’s gross customer loans and receivables that are encumbered was 30%
(2020: 29%).
The tables below show the movement in loans and advances to customers by IFRS 9 stage during the year:
Stage 1
£m
Stage 2
£m
Stage 3
£m
Stage 3
(POCI)
£m
Total
£m
At 1 January 2020 17, 239.2 749.5 294.4 136.8 18,419.9
Originations
1
3,767.0 – – – 3,767.0
Acquisitions 60.8 – – 1.5 62.3
Disposals (787.3) (16.1) (1.0) – (804.4)
Repayments and write-offs
2
(2,119.1) (3.9) (41.0) (23.7) (2,187.7 )
Transfers:
– To Stage 1 324.8 (293.5) (31.3) – –
– To Stage 2 (2,300.3) 2,344.5 (44.2) – –
– To Stage 3 (124.8) (90.9) 215.7 – –
At 31 December 2020 16,060.3 2,689.6 392.6 114.6 19, 257.1
Originations
1
4,523.4 – – – 4,523.4
Acquisitions
3
277.7 – – 2.7 280.4
Disposals
3
(214.4) – – – (214.4)
Repayments and write-offs
2
(2,539.8) (160.3) (78.6) (19.9) (2,798.6)
Transfers:
– To Stage 1 1,401.0 (1,370.2) (30.8) – –
– To Stage 2 (1,339.7) 1,384.1 (44.4) – –
– To Stage 3 (89.6) (131.1) 220.7 – –
At 31 December 2021 18,078.9 2,412.1 459.5 97.4 21,0 47.9
1. Originations include further advances and drawdowns on existing commitments.
2. Repayments and write-offs include customer redemptions.
3. The Group acted as co-arranger in the re-securitisation of £229.6m of third party mortgages from the Rochester Financing No.2 PLC securitisation to the new Rochester
Financing No.3 PLC securitisation on 15 June 2021. Neither securitisation is a subsidiary of the Group. Under the terms of the mortgage sale agreements, the Group
recognised the mortgages as a purchase from Rochester Financing No.2 PLC and immediately derecognised them as a sale to Rochester Financing No.3 PLC. OneSavings
Bank plc is the master servicer of the mortgages, and has retained 5% of these mortgages, as required under the retention rules. In addition to the Group acting as co-
arranger for the re-securitisation of Rochester Financing No.2 PLC, the Group purchased an external mortgage book, a c. £55m portfolio of UK residential mortgages, at a
discount to current balances (prior year one external mortgage book purchased at par).
23. Finance leases
The Group provides asset finance lending through InterBay Asset Finance Limited.
2021
£m
2020
£m
Gross investment in finance leases, receivable
Less than one year 39.7 21.9
Between one and five years 87.0 50.4
More than five years 0.9 1.3
127.6 73.6
Unearned finance income (11.4) (8.1)
Net investment in finance leases 116.2 65.5
Net investment in finance leases, receivable
Less than one year 34.7 18.6
Between one and five years 80.6 45.7
More than five years 0.9 1.2
116.2 65.5
The Group has recognised £4.3m of ECLs on finance leases as at 31 December 2021 (2020: £2.6m).

207
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
24. Expected credit losses
The ECL has been calculated based on various scenarios as set out below:
2021 2020
ECL
provision
£m
Weighting
%
Weighted
ECL
provision
£m
ECL provision
£m
Weighting
%
Weighted ECL
provision
£m
Scenarios
Upside 13.1 20 2.6 40.1 30 12.0
Base case 26.5 40 10.6 54.6 40 21.8
Downside scenario 74.0 28 20.7 113.5 23 26.1
Severe downside scenario 120.3 12 14.4 166.7 7 11.7
Total weighted provisions 48.3 71.6
Non-modelled provisions:
Individually assessed provisions – – 40.4 – – 29.0
Post model adjustments
1
– – 12.8 – – 10.4
Total provision 101.5 111.0
1. To ensure that provision coverage levels remain appropriate, management and the Board hold a number of post model adjustments, to capture any specific risks not
captured within the models and economic forecasts as highlighted by the Group’s risk functions top-down lending segment analysis or adjustments that still remain relevant
from those introduced due to COVID-19 observations, restrictions and economic support measures. Additional information can be found in the Credit risk section of the Risk
profile performance review on pages 69 to 73.
The Group’s ECL by segment and IFRS 9 stage is shown below:
2021
2020
OSB
£m
CCFS
£m
Total
£m
OSB
£m
CCFS
£m
Total
£m
Stage 1 9.3 2.8 12.1 12.3 8.9 21.2
Stage 2 14.2 10.8 25.0 17.9 13.1 31.0
Stage 3 56.6 3.8 60.4 49.4 2.3 51.7
Stage 3 (POCI) 2.1 1.9 4.0 4.0 3.1 7.1
82.2 19.3 101.5 83.6 27.4 111.0
The tables below show the movement in the ECL by IFRS 9 stage during the year. ECLs on originations and acquisitions reflect the
IFRS 9 stage of loans originated or acquired during the year as at 31 December and not the date of origination. Re-measurement
of loss allowance relates to existing loans which did not redeem during the year and includes the impact of loans moving between
IFRS9stages.
Stage 1
£m
Stage 2
£m
Stage 3
£m
Stage 3
(POCI)
£m
Total
£m
At 1 January 2020 5.6 5.6 23.8 7.9 42.9
Originations 6.3 – – – 6.3
Acquisitions – – 0.1 – 0.1
Disposals (0.1) (0.2) (0.1) – (0.4)
Repayments and write-offs (0.7) (0.3) (4.1) (1.1) (6.2)
Re-measurement of loss allowance 6.3 7.7 29.0 (0.2) 42.8
Transfers:
– To Stage 1 2.0 (1.4) (0.6) – –
– To Stage 2 (1.0) 2.8 (1.8) – –
– To Stage 3 (0.1) (1.2) 1.3 – –
Changes in assumptions and model parameters 2.9 18.0 4.1 0.5 25.5
At 31 December 2020 21.2 31.0 51.7 7.1 111.0
Originations 5.7 – – – 5.7
Acquisitions 0.1 – – 0.1 0.2
Repayments and write-offs (2.8) (3.3) ( 7.4) (1.1) (14.6)
Re-measurement of loss allowance (21.8) (0.8) 12.8 (2.1) (11.9)
Transfers:
– To Stage 1 11.3 (10.5) (0.8) – –
– To Stage 2 (2.3) 5.1 (2.8) – –
– To Stage 3 (0.3) (3.1) 3.4 – –
Changes in assumptions and model parameters 1.0 6.6 3.5 – 11.1
At 31 December 2021 12.1 25.0 60.4 4.0
101.5

208
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
24. Expected credit losses (Continued)
The table below shows the stage 2 ECL balances by transfer criteria:
2021 2020
Carrying
value
£m
ECL
£m
Coverage
%
Carrying
value
£m
ECL
£m
Coverage
%
Criteria:
Relative PD movement 1,251.6 17.1 1.37 946.9 17.0 1.80
Qualitative measures 1,125.0 7.4 0.66 1,680.7 12.7 0.76
30 days past due backstop 37.0 0.5 1.35 63.4 1.3 2.05
Total 2,413.6 25.0 1.04 2,691.0 31.0 1.15
The Group has a number of qualitative measures to determine whether a SICR has taken place. These triggers utilise both internal
performance information, to analyse whether an account is in distress but not yet in arrears, and external credit bureau information,
to determine whether the customer is experiencing financial difficulty with an external credit obligation.
25. Impairment of financial assets
The (credit)/charge for impairment of financial assets in the Consolidated Statement of Comprehensive Income comprises:
2021
£m
2020
£m
Write-offs in year 6.7 1.9
Disposals – 0.4
(Decrease)/increase in ECL provision (11.1) 68.7
(4.4) 71.0
26. Derivatives
The table below reconciles the gross amount of derivative contracts to the carrying balance shown in the Consolidated Statement of
Financial Position:
Gross
amount of
recognised
financial
assets /
(liabilities)
£m
Net amount of
financial assets
/ (liabilities)
presented in the
Consolidated
Statement
of Financial
Position
£m
Contracts
subject to
master netting
agreements
not offset in the
Consolidated
Statement
of Financial
Position
£m
Cash collateral
paid / (received)
not offset in the
Consolidated
Statement
of Financial
Position
£m
Net amount
£m
At 31 December 2021
Derivative assets:
Interest rate risk hedging 185.7 185.7 (16.9) (115.3) 53.5
185.7 185.7 (16.9) (115.3) 53.5
Derivative liabilities:
Interest rate risk hedging (19.7) (19.7 ) 16.9 98.3 95.5
(19.7) (19.7) 16.9 98.3 95.5
At 31 December 2020
Derivative assets:
Interest rate risk hedging 12.3 12.3 (11.8) – 0.5
12.3 12.3 (11.8) – 0.5
Derivative liabilities:
Interest rate risk hedging (163.6) (163.6) 11.8 210.5 58.7
(163.6) (163.6) 11.8 210.5 58.7
Included within the Group’s derivative assets is £48.7m (2020: in derivative liabilities (11.7)m) relating to derivative contracts not
covered by master netting agreements on which no cash collateral has been paid.

209
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
26. Derivatives (Continued)
The table below profiles the timing of nominal amounts for interest rate risk hedging derivatives based on contractual maturity:
Total
nominal
£m
Less than
3 months
£m
3 – 12
months
£m
1 – 5
years
£m
More than
5 years
£m
At 31 December 2021
Derivative assets 12,968.3 245.2 2,345.4 10,235.7 142.0
Derivative liabilities 7,378.0 1,361.0 4, 747.0 1,150.0 120.0
20,346.3 1,606.2 7,092 .4 11,385.7 262.0
At 31 December 2020
Derivative assets 8,687.8 1,450.7 3,407.8 3,808.3 21.0
Derivative liabilities 10,392.4 148.0 1,868.0 8,065.9 310.5
19,080.2 1,598.7 5,275.8 11,874.2 331.5
The Group has 841 (2020: 925) derivative contracts with an average fixed rate of 0.34% (2020: 0.47%).
27. Hedge accounting
2021
£m
2020
£m
Hedged assets
Current hedge relationships (190.9) 197.5
Swap inception adjustment (26.2) (100.5)
Cancelled hedge relationships 78.2 84.6
Fair value adjustments on hedged assets (138.9) 181.6
Hedged liabilities
Current hedge relationships 19.6 (11.8)
Swap inception adjustment 3.3 6.2
Cancelled hedge relationships (1.4) –
De-designated hedge relationships (1.8) (2.6)
Fair value adjustments on hedged liabilities 19.7 (8.2)
The swap inception adjustment relates to hedge accounting adjustments arising when hedge accounting commences, primarily on
derivative instruments previously taken out against the mortgage pipeline and on derivative instruments previously taken out against
new retail deposits.
De-designated hedge relationships relates to hedge accounting adjustments on failed hedge accounting relationships. These
adjustments are amortised over the remaining lives of the original hedged items.
Cancelled hedge relationships predominantly represent the unamortised fair value adjustment for interest rate risk hedges that have
been cancelled and replaced due to IBOR transition, securitisation activities and legacy long-term fixed rate mortgages (c. 25 years at
origination).
The tables below analyse the Group’s portfolio hedge accounting for fixed rate loans and advances to customers:
2021 2020
Loans and advances to customers
Hedged item
£m
Hedging
instrument
£m
Hedged item
£m
Hedging
instrument
£m
Carrying amount of hedged item/nominal value of hedging instrument 12,364.3 12,550.2 11,282.4 11,159.7
Cumulative fair value adjustments (190.9) 187.4 197.5 (156.9)
Fair value adjustments for the period (297.8) 298.9 107.3 (117.4)
Cumulative fair value on cancelled hedge relationships 78.2 – 84.6 –
The cumulative fair value adjustments of the hedging instrument comprise £187.7m (2020: £0.7m) recognised within derivative assets
and £0.3m (2020: £157.6m) recognised within derivative liabilities.

210
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
27. Hedge accounting (Continued)
The movement in cancelled hedge relationships is as follows:
Hedged assets
2021
£m
2020
£m
At 1 January 84.6 20.4
New cancellations
1
33.5 86.1
Amortisation (39.9) (17.9)
Derecognition of hedged item – (4.0)
At 31 December 78.2 84.6
1. Following the securitisation of mortgages during the year and LIBOR swaps transferred to SONIA swaps through the IBOR transition, the Group cancelled swaps which were
effective prior to the event, with the designated hedge moved to cancelled hedge relationships to be amortised over the original life of the swap.
The tables below analyse the Group’s portfolio hedge accounting for fixed rate amounts owed to retail depositors:
2021 2020
Customer deposits
Hedged
item
£m
Hedging
instrument
£m
Hedged
item
£m
Hedging
instrument
£m
Carrying amount of hedged item/nominal value of hedging instrument 6,386.0 6,390.0 6,849.9 6,858.0
Cumulative fair value adjustments 19.6 (18.5) (11.8) 9.2
Fair value adjustments for the period 27.4 (26.1) (4.1) 6.8
The cumulative fair value adjustments of the hedging instrument comprise £0.3m (2020: £9.4m) recognised within derivative assets and
£18.8m (2020: £0.2m) recognised within derivative liabilities.
28. Other assets
2021
£m
2020
£m
Prepayments 9.3 7. 3
Other assets 0.9 1.8
10.2 9.1
29. Deferred taxation asset
Losses
carried
forward
£m
Accelerated
depreciation
£m
Share-based
payments
£m
IFRS 9
transitional
adjustments
£m
Others
1
£m
Total
£m
At 1 January 2020 0.9 0.1 2.6 0.7 0.5 4.8
Profit or loss credit/(charge) – 0.3 0.9 – (0.4) 0.8
Transferred to corporation tax liability – – (0.6) – – (0.6)
Tax taken directly to OCI – – – – (0.5) (0.5)
Tax taken directly to equity – – 0.2 – – 0.2
At 31 December 2020 0.9 0.4 3.1 0.7 (0.4) 4.7
Profit or loss (charge)/credit (0.4) 0.1 1.7 – (1.2) 0.2
Transferred to corporation tax liability – – (1.4) – – (1.4)
Tax taken directly to OCI – – – – 0.5 0.5
Tax taken directly to equity – – 1.6 – – 1.6
At 31 December 2021 0.5 0.5 5.0 0.7 (1.1) 5.6
1. Others includes deferred taxation assets recognised on financial assets classified as FVOCI, derivatives and short-term timing differences.
In 2021, the profit or loss (charge)/credit includes a credit of £0.4m from the deferred tax rate change (2020: charge of £0.3m).
As at 31 December 2021, the Group had £3.5m (2020: £3.5m) of losses for which a deferred tax asset has not been recognised as the
Group does not expect sufficient future profits to be available to utilise the losses.

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
30. Property, plant and equipment
Freehold
land and
buildings
£m
Leasehold
improvements
£m
Equipment
and fixtures
£m
Right of use assets
Total
£m
Property
leases
£m
Other
leases
£m
Cost
At 1 January 2020 19.3 2.7 14.4 12.7 1.3 50.4
Additions
1
– 0.3 2.5 0.6 – 3.4
Disposals and write-offs
2
– – (3.0) (0.2) – (3.2)
Foreign exchange difference (0.1) – (0.1) – – (0.2)
At 31 December 2020 19.2 3.0 13.8 13.1 1.3 50.4
Additions
1
– – 2.6 0.6 0.1 3.3
Disposals and write-offs
2
(2.8) (0.1) (1.3) (0.5) (0.2) (4.9)
Foreign exchange difference 0.1 – 0.1 – – 0.2
At 31 December 2021 16.5 2.9 15.2 13.2 1.2 49.0
Depreciation
At 1 January 2020 1.1 0.5 6.1 1.0 0.1 8.8
Charged in year 0.3 0.4 2.9 1.8 0.2 5.6
Disposals and write-offs
2
– – (3.0) (0.2) – (3.2)
At 31 December 2020 1.4 0.9 6.0 2.6 0.3 11.2
Charged in year
3
0.9 0.2 2.9 1.5 0.1 5.6
Disposals and write-offs
2
(0.8) (0.1) (1.3) (0.5) (0.2) (2.9)
At 31 December 2021 1.5 1.0 7. 6 3.6 0.2 13.9
Net book value
At 31 December 2021 15.0 1.9
7.6 9.6 1.0 35.1
At 31 December 2020 17.8 2.1 7.8 10.5 1.0 39.2
1. Additions include modifications of £0.4m (2020: nil) of right of use assets.
2. During 2021 the Group disposed of a property for proceeds of £2.0m and wrote off fully depreciated assets of £2.9m. In 2020, the Group wrote off fully depreciated assets of £3.2m.
3. Includes £0.6m of impairment on property sold during the year which is included in note 13 Integration costs (2020: nil).

212
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
31. Intangible assets
Development
costs
£m
Computer
software and
licences
£m
Assets
arising on
Combination
2
£m
Total
£m
Cost
At 1 January 2020 0.5 15.4 23.6 39.5
Additions 1.8 2.6 – 4.4
Disposals and write-offs
1
– (1.3) – (1.3)
At 31 December 2020 2.3 16.7 23.6 42.6
Additions 1.4 2.8 – 4.2
Disposals and write-offs
1
– (3.5) (0.2) (3.7)
At 31 December 2021 3.7 16.0 23.4 43.1
Amortisation
At 1 January 2020 – 6.8 1.3 8.1
Charged in year 0.1 3.6 4.5 8.2
Impairment in the year – – 7.0 7.0
Disposals and write-offs
1
– (1.3) – (1.3)
At 31 December 2020 0.1 9.1 12.8 22.0
Charged in year 0.5 3.2 5.8 9.5
Impairment reversal in the year – – (3.1) (3.1)
Disposals and write-offs
1
– (3.5) (0.2) (3.7)
At 31 December 2021 0.6 8.8 15.3 24.7
Net book value
At 31 December 2021 3.1 7. 2 8.1 18.4
At 31 December 2020 2.2 7. 6 10.8 20.6
1. During the year the Group wrote off fully amortised assets.
2. Assets arising on Combination comprise broker relationships of £5.0m (2020: £5.8m), technology of £1.9m (2020: £2.9m), brand name of £0.8m (2020: £1.2m) and banking
licence of £0.4m (2020: £0.9m). The carrying value of the intangible assets are reviewed each reporting period, a £3.1m impairment reversal (2020: £7.0m impairment charge)
was recognised in relation to broker relationships due to less severe impacts of the COVID-19 pandemic than originally estimated.
The Directors have considered the carrying value of intangible assets and determined that there are no indications of impairment at
the year end.
32. Amounts owed to credit institutions
2021
£m
2020
£m
BoE TFS – 2,568.6
BoE TFSME 4,203.1 1,000.1
Commercial repo 0.5 0.1
Loans from credit institutions 0.6 1.4
Cash collateral and margin received 115.4 –
4,319.6 3,570.2
33. Amounts owed to retail depositors
2021 2020
OSB
£m
CCFS
£m
Total
£m
OSB
£m
CCFS
£m
Total
£m
Fixed rate deposits 6,221.7 4,703.4 10,925.1 6,275.6 4,781.4 11,057.0
Variable rate deposits 3,517.7 3,083.6 6,601.3 3,429.7 2,116.4 5,546.1
9,739.4 7,787.0 17,526.4 9,705.3 6,897.8 16,603.1

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
34. Amounts owed to other customers
2021
£m
2020
£m
Fixed rate deposits 50.3 46.0
Variable rate deposits 42.3 26.9
92.6 72.9
35. Debt securities in issue
2021
£m
2020
£m
Asset-backed loan notes at amortised cost 460.3 421.9
Amount due for settlement after 12 months 460.3 421.9
460.3 421.9
The asset-backed loan notes are secured on fixed and variable rate mortgages and are redeemable in part from time to time, but such
redemptions are limited to the net principal received from borrowers in respect of underlying mortgage assets. The maturity date of
the funds matches the contractual maturity date of the underlying mortgage assets. The Group expects that a large proportion of the
underlying mortgage assets, and therefore these notes, will be repaid within five years.
Asset-backed loan notes may all be repurchased by the Group at any interest payment date on or after the call dates, or at any
interest payment date when the current balance of the mortgages outstanding is less than or equal to 10% of the principal amount
outstanding on the loan notes on the date they were issued.
Interest is payable at fixed margins above SONIA.
As at 31 December 2021, notes were issued through the following funding vehicles:
2021
£m
2020
£m
CMF 2020-1 plc 199.8 288.6
Canterbury Finance No.3 plc 76.9 133.3
Canterbury Finance No.4 plc 183.6 –
460.3 421.9
36. Lease liabilities
2021
£m
2020
£m
At 1 January 11.7 13.3
New leases 0.7 0.1
Lease terminated (0.1) –
Lease repayments (1.9) (2.0)
Interest accruals 0.3 0.3
At 31 December 10.7 11.7
During the year, the Group incurred expenses of £0.2m (2020: £0.7m) in relation to short-term leases and nil (2020: nil) in relation to
low-value assets.
37. Other liabilities
2021
£m
2020
£m
Falling due within one year:
Accruals 23.2 19.7
Deferred income 0.9 0.6
Other creditors 5.5 7.5
29.6 27.8

214
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
38. Provisions and contingent liabilities
The Financial Services Compensation Scheme (FSCS) provides protection of deposits for the customers of authorised financial services
firms, should a firm collapse. FSCS protects retail deposits of up to £85k for single account holders and £170k for joint holders. As OSB
and CCFS both hold banking licences, the full FSCS protection is available to customers of each Bank.
The compensation paid out to consumers is initially funded through loans from the BoE and HM Treasury. In order to repay the loans
and cover its costs, the FSCS charges levies on firms regulated by the PRA and the Financial Conduct Authority (FCA). The Group is
among those firms and pays the FSCS a levy based on its share of total UK deposits.
The Group has reviewed its current exposure to Payment Protection Insurance (PPI) claims, following the FCA deadline for PPI claims
on 29 August 2019 and has recognised a provision of £0.3m as at 31 December 2021 (2020: £0.3m). The Group has maintained its
provision for FCA conduct rules exposures of £1.2m (2020: £1.2m) to cover potential future claims.
An analysis of the Group’s FSCS and other provisions is presented below:
2021 2020
FSCS
£m
Other
regulatory
provisions
£m
ECL on
undrawn
loan
facilities
£m
Total
£m
FSCS
£m
Other
regulatory
provisions
£m
ECL on
undrawn loan
facilities
£m
Total
£m
At 1 January 0.1 1.5 0.2 1.8 (0.2) 1.6 0.2 1.6
Refund/(paid) during the year – – – – 0.3 (0.2) – 0.1
Charge – – 0.2 0.2 – 0.1 – 0.1
At 31 December 0.1 1.5 0.4 2.0 0.1 1.5 0.2 1.8
In January 2020, the Group was contacted by the FCA in connection with a multi-firm thematic review into forbearance measures
adopted by lenders in respect of a portion of the mortgage market. The Group has responded to information requests from the FCA. It
is not possible to reliably predict or estimate the outcome of the review and therefore its financial effect, if any, on the Group.
39. Deferred taxation liability
The deferred tax liability recognised on the Combination relates to the timing differences of the recognition of assets and liabilities at
fair value, where the fair values will unwind in future periods in line with the underlying asset or liability. The deferred tax liability has
been measured using the relevant rates for the expected periods of utilisation.
CCFS
Combination
£m
At 1 January 2020 63.1
Profit or loss credit (14.8)
At 31 December 2020 48.3
Profit or loss credit (8.5)
At 31 December 2021 39.8
In 2021, the profit or loss credit includes a debit of £5.6m impact of the deferred tax rate change (2020: a debit of £4.7m).
40. Subordinated liabilities
2021
£m
2020
£m
At 1 January 10.5 10.6
Repayment of debt at maturity (0.2) (0.1)
At 31 December 10.3 10.5

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
40. Subordinated liabilities (Continued)
The Group’s outstanding subordinated liabilities are summarised below:
2021
£m
2020
£m
Linked to LIBOR:
Floating rate subordinated loans 2022 (LIBOR +5%) – 0.1
Floating rate subordinated loans 2022 (LIBOR +2%) 0.1 0.2
Fixed rate:
Subordinated liabilities 2024 (7.45%) 10.2 10.2
10.3 10.5
The LIBOR-linked subordinated liabilities had a rate reset in September 2021 before the cessation of LIBOR, these subordinated
liabilities are due to mature in September 2022.
The fixed rate subordinated liabilities are repayable at the dates stated or earlier, in full, at the option of the Group with the prior
consent of the PRA. All subordinated liabilities are denominated in Pounds Sterling and are unlisted.
The rights of repayment of the holders of these subordinated liabilities are subordinated to the claims of all depositors and all other
creditors.
41. Perpetual Subordinated Bonds
2021
£m
2020
£m
Sterling PSBs (4.5991%) – 22.3
Sterling PSBs (4.6007%) 15.2 15.3
15.2 37.6
The bonds are listed on the London Stock Exchange.
The £22.0m PSBs were redeemed on 7 September 2021 following permission from the PRA and approval by the OneSavings Bank plc
Board.
The 4.6007% bonds were issued with no discretion over the payment of interest and may not be settled in the Group’s own equity. They
are therefore classified as financial liabilities. The coupon rate is 4.6007% until the next reset date on 27 August 2024.
42. Reconciliation of cash flows for financing activities
The tables below show a reconciliation of the Group’s liabilities classified as financing activities within the Consolidated Statement of
Cash Flows:
Amounts
owed to
credit
institutions
(see note 32)
£m
Debt
securities
in issue
(see note 35)
£m
Subordinated
liabilities
(see note 40)
£m
PSBs
(see note 41)
£m
Total
£m
At 1 January 2020 3,068.8 296.3 10.6 37. 6 3,413.3
Cash movements:
Principal drawdowns 1,505.0 486.2 – – 1,991.2
Principal repayments (998.9) (104.6) (0.1) – (1,103.6)
Deconsolidation of special purpose vehicles – (256.2) – – (256.2)
Non-cash movements:
Accrued interest movement (4.7) 0.2 – – (4.5)
At 31 December 2020 3,570.2 421.9 10.5 37.6 4,040.2
Cash movements:
Principal drawdowns 4,863.0 195.6 – – 5,058.6
Principal repayments (4,113.7) (159.5) (0.2) (22.0) (4,295.4)
Non-cash movements:
Accrued interest movement 0.1 2.3 – (0.4) 2.0
At 31 December 2021 4,319.6 460.3 10.3 15.2 4,805.4

216
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
43. Share capital
Ordinary shares
Number of shares
issued and fully
paid
Nominal value
£m
Premium
£m
At 1 January 2020 445,443,454 4.5 864.2
Shares issued under OSB employee share plans 1,860,744 – 2.6
Cancellation of OneSavings Bank plc £0.01 share capital and share premium (447, 3 04,198) (4.5) (866.8)
Issuance of OSB GROUP PLC £3.04 share capital 447,304,198 1,359.8 –
Shares issued under OSBG employee share plans 8,582 – –
At 31 December 2020 447,312,780 1,359.8 –
Capital reduction of £3.04 nominal value shares to £0.01 nominal value shares – (1,355.3) –
Shares issued under OSBG employee share plans 1,315,075 – 0.7
At 31 December 2021 448,627,855 4.5 0.7
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at
meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.
All ordinary shares issued in the current and prior year were fully paid.
44. Other reserves
The Group’s other reserves are as follows:
2021
£m
2020
£m
Share-based payment 13.4 7.8
Transfer (1,355.3) (1,355.3)
Own shares (3.5) (4.0)
FVOCI 0.6 1.0
Foreign exchange (1.1) (1.0)
Non-controlling interest securities – 60.0
AT1 securities 150.0 –
(1,195.9) (1,291.5)
Transfer reserve
On 27 November 2020, a new ultimate parent company was inserted into the Group, being OSBG. The share capital generated from
issuing 447,304,198 nominal shares at £3.04 per share, replacing the nominal shares of £0.01 in OSB previously recognised in share
capital at the consolidation level, created a transfer reserve of £1,355.3m.
Own shares
The Company has adopted the look-through approach for the EBT, including the EBT within the Company. As at 31 December 2021,
the EBT held 848,221 OSBG shares (2020: 1,001,238 OSBG shares). The Group and Company show these shares as a deduction from
equity, being the cost at which the shares were acquired of £3.5m (2020: £4.0m).
FVOCI reserve
The FVOCI reserve represents the cumulative net change in the fair value of investment securities measured at FVOCI.
Foreign exchange reserve
The foreign exchange reserve relates to the revaluation of the Group’s Indian subsidiary, OSB India Private Limited.
Non-controlling interest securities
Non-controlling interest securities comprised £60.0m of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible
Securities issued by OSB. The securities previously qualified as AT1 capital under the Capital Requirements Directive and Regulation
(CRD IV) for OSB; however, they do not qualify for OSBG under the CRD IV with the application of article 85–87 requirements where
there is an article 9 permission. The securities will be subject to full conversion into ordinary shares of OSB in the event that its Common
Equity Tier 1 (CET1) capital ratio falls below 7%. The securities will pay interest at a rate of 9.125% per annum until the first reset date of
25 May 2022, with the reset interest rate equal to 835.9 basis points over the five-year semi-annual mid-swap rate for such a period.
Interest is paid semi-annually on 25 May and 25 November. OSB may, at any time, cancel any interest payment at its full discretion
and must cancel interest payments in certain circumstances specified in the terms and conditions of the securities. The securities
are perpetual with no fixed redemption date. OSB may, in its discretion and subject to satisfying certain conditions, redeem all (but
not some) of the securities at the principal amount outstanding plus any accrued but unpaid interest from the first reset date and on
any interest payment date thereafter. These were redeemed on 7 October 2021 at a premium, with the premium of £3.5m recognised
directly in equity.

217
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
44. Other reserves (Continued)
AT1 Securities
On 5 October 2021, OSBG issued AT1 securities. AT1 securities comprise £150.0m of Fixed Rate Resetting Perpetual Subordinated
Contingent Convertible Securities that qualify as AT1 capital under CRD IV. The securities will be subject to full conversion into
ordinary shares of OSBG in the event that the Group’s CET1 capital ratio falls below 7%. The securities will pay interest at a rate of
6% per annum until the first reset date of 7 April 2027, with the reset interest rate equal to 539.3 basis points over the 5-year Gilt Rate
(benchmark gilt) for such a period. Interest is paid semi-annually in April and October. OSBG may, at any time, cancel any interest
payment at its full discretion and must cancel interest payments in certain circumstances specified in the terms and conditions of the
securities. The securities are perpetual with no fixed redemption date. OSBG may, in its discretion and subject to satisfying certain
conditions, redeem all (but not some) of the AT1 securities at the principal amount outstanding plus any accrued but unpaid interest
from the first reset date and on any interest payment date thereafter.
45. Financial commitments and guarantees
a) The Group did not have any contracted or anticipated capital expenditure commitments not provided for as at 31 December 2021
(2020: nil).
b) The Group’s minimum lease commitments under operating leases not subject to IFRS 16 are summarised in the table below:
2021
£m
2020
£m
Land and buildings: due within:
One year – 0.1
– 0.1
c) Undrawn loan facilities:
2021
£m
2020
£m
OSB mortgages 706.4 547.2
CCFS mortgages 434.5 420.8
Asset finance 14.4 11.5
1,155.3 979.5
Undrawn loan facilities are approved loan applications which have not yet been exercised. They are payable on demand and are
usually drawn down or expire within three months.
d) The Group did not have any issued financial guarantees as at 31 December 2021 (2020: nil).
46. Risk management
Overview
Financial instruments form the vast majority of the Group’s assets and liabilities. The Group manages risk on a consolidated basis and
risk disclosures that follow are provided on this basis.
Types of financial instrument
Financial instruments are a broad definition which includes financial assets, financial liabilities and equity instruments. The main
financial assets of the Group are loans to customers and liquid assets, which in turn consist of cash in the BoE call accounts, call
accounts with other credit institutions, RMBS and UK sovereign debt. These are funded by a combination of financial liabilities and
equity instruments. Financial liability funding comes predominantly from retail deposits and drawdowns under the BoE TFS and
TFSME, supported by debt securities, subordinated debt, wholesale and other funding. Equity instruments include own shares and
AT1 securities meeting the equity classification criteria. The Group’s main activity is mortgage lending; it raises funds or invests in
particular types of financial assets to meet customer demand and manage the risks arising from its operations. The Group does not
trade in financial instruments for speculative purposes.
The Group uses derivative instruments to manage its financial risks. Derivative financial instruments (derivatives) are financial
instruments whose value changes in response to changes in underlying variables such as interest rates. The most common derivatives
are futures, forwards and swaps. Of these, the Group only uses swaps.
Derivatives are used by the Group solely to reduce (hedge) the risk of loss arising from changes in market rates. Derivatives are not
used for speculative purposes.

218
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
46. Risk management (Continued)
Types of derivatives and uses
The derivative instruments used by the Group in managing its risk exposures are interest rate swaps. Interest rate swaps convert fixed
interest rates to floating or vice versa. As with other derivatives, the underlying product is not sold and payments are based on notional
principal amounts.
Unhedged fixed rate liabilities create the risk of paying above-the-market rate if interest rates subsequently decrease. Unhedged fixed
rate mortgages and liquid assets bear the opposite risk of income below-the-market rate when rates go up. While fixed rate assets
and liabilities naturally hedge each other to a certain extent, this hedge is usually never perfect because of maturity mismatches and
principal amounts.
The Group uses swaps to convert its instruments, such as mortgages, deposits and liquid assets, from fixed or base rate-linked rates
to reference linked variable rates. This ensures a guaranteed margin between the interest income and interest expense, regardless of
changes in the market rates.
IBOR transition
The PRA and FCA have continued to encourage banks to transition away from using LIBOR as a benchmark in all operations before the
end of 2021. During 2021 the FCA confirmed that LIBOR would be discontinued on 31 December 2021.
In 2018, the Group set up an internal working group, comprising all of the key business areas that are involved with this change,
including workstreams covering risk management, contracts, systems and conduct risk considerations, with strong oversight from
the Compliance and Risk functions. The programme is overseen by the LIBOR Transition Working Group which reports into the Group
Assets and Liabilities Committee. Risk assessments have been completed to ensure this process is managed in a measured and
controlled manner.
The Group has no exposure to existing IBORs, other than to GBP LIBOR. The Group no longer offers any LIBOR-linked loans and during
2021 all remaining LIBOR-linked derivatives with a maturity date post Q1 2022 were cancelled and new SONIA-linked derivatives
entered into.
The Group adopted the Phase 1 amendments ‘Interest Rate Benchmark reform: Amendments to IFRS 9/IAS 39 and IFRS 7’ in 2020.
These amendments modified specific hedge accounting requirements to allow hedge accounting to continue for affected hedges
during the period of uncertainty before the hedged items or hedging instruments are amended as a result of the interest rate
benchmark reform. The application of the Phase 1 amendments impacts the Group’s accounting in the following ways. Hedge
accounting relationships will continue even when, for IBOR fair value hedges, the benchmark interest rate component may not be
separately identifiable.
The Group will not discontinue portfolio hedge accounting should the retrospective assessment of hedge effectiveness for a hedging
relationship that is subject to the interest rate benchmark reform fall outside the 80–125 per cent range. For portfolio hedging
relationships that are not subject to the interest rate benchmark reform the entity continues to cease hedge accounting if retrospective
effectiveness is outside the 80–125 per cent range.
The Group has adopted ‘Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9 Financial Instruments, IAS 39 Financial
Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4 Insurance Contracts and IFRS 16 Leases’
which was issued in August 2020 and became mandatory for annual reporting periods beginning on or after 1 January 2021 (see note
2 aa)), enabling the Group to reflect the effects of transitioning from IBOR to alternative benchmark interest rates (also referred to
as ‘risk free rates’ or RFRs) without giving rise to accounting impacts that would not provide useful information to users of financial
statements. The Group, in regards to hedge accounting has cancelled the LIBOR hedges to initiate new SONIA hedges.
Mortgages
At 31 December 2021, the Group had £6,293.0m (31 December 2020: £8,001.7m) of LIBOR-linked lending, including floating-rate
mortgages on LIBOR-linked rates and fixed-rate mortgages that would have reverted to LIBOR-linked rates in the future, out of total
mortgages balances of £21,047.9m (31 December 2020: £19,257.1m).
The Group has worked through the back book transition for existing loans. Direct communication with impacted customers regarding
the cessation of LIBOR and its implications commenced during the first half of 2021 and is now complete. All necessary systemic
changes including IT system modifications are complete and the remaining LIBOR-linked mortgage balances will transition to a LIBOR
replacement rate, defined as the 3-month SONIA benchmark rate plus the ISDA fixed adjustment spread of 0.1193%, at their first rate
resets in or after Q1 2022.
Investment securities
At 31 December 2021, the Group had £34.8m (2020: £118.7m) of GBP LIBOR-linked investment securities, comprising RMBS loan notes,
which will either mature or transfer to SONIA coupons during Q1 2022.
Where LIBOR-linked investment securities do not transfer to adopting SONIA as a reference rate, a synthetic LIBOR rate is temporarily
available for issuers to adopt. There are no concerns on the performance of these investments. The Group will only purchase SONIA-
linked investment securities in future.
The FCA has confirmed it will allow the temporary use of a synthetic LIBOR rate in all legacy LIBOR contracts, other than cleared
derivatives, that have not been changed by 31 December 2021. Synthetic LIBOR will be calculated in a way that does not rely on
submissions from panel banks, and is instead based on RFRs. The availability of synthetic LIBOR is not guaranteed beyond the end of 2022.
Retail savings
None of the OSB or CCFS current or back book retail savings products have a GBP LIBOR component within the product.

219
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
46. Risk management (Continued)
Non-controlling interest securities
The £60.0m non-controlling interest securities, which were paying interest at a rate of 9.125% per annum until their first reset date on
25 May 2022 when they would have reverted to a LIBOR swap rate, were redeemed during October 2021.
Derivatives
As at 31 December 2021, the total nominal amount of the Group’s derivatives was £20,346.3m (31 December 2020: £19,080.2m), of
which the Group had LIBOR-linked swaps with a nominal value of £436.0m (31 December 2020: £8,020.0m) and a fair value of £(0.2)m
(31 December 2020: £89.1m) hedging assets and liabilities.
The remaining LIBOR-linked swaps at 31 December 2021 will mature during Q1 2022.
Types of risk
The principal financial risks to which the Group is exposed are credit, liquidity and market risks, the latter comprising interest and
exchange rate risk. In addition to financial risks, the Group is exposed to various other risks, most notably operational, conduct and
compliance/regulatory, which are covered in the Risk review on pages 50 to 73.
Credit risk
Credit risk is the risk that losses may arise as a result of the Group’s borrowers or market counterparties failing to meet their
obligations to repay.
The Group has adopted the Standardised Approach for assessment of credit risk regulatory capital requirements. This approach
considers risk weightings as defined under Basel II and Basel III principles.
The classes of financial instruments to which the Group is most exposed are loans and advances to customers, loans and advances to
credit institutions, cash in the BoE call account, call and current accounts with other credit institutions and investment securities. The
maximum credit risk exposure equals the total carrying amount of the above categories plus off-balance sheet undrawn committed
mortgage facilities.
Credit risk – loans and advances to customers
Credit risk associated with mortgage lending is largely driven by the housing market and level of unemployment. A recession and/or
high interest rates could cause pressure within the market, resulting in rising levels of arrears and repossessions.
All loan applications are assessed with reference to the Group’s Lending Policy. Changes to the policy are approved by the Group Risk
Committee, with mandates set for the approval of loan applications.
The Group Credit Committee and ALCO regularly monitor lending activity, taking appropriate actions to reprice products and adjust
lending criteria in order to control risk and manage exposure. Where necessary and appropriate, changes to the Lending Policy are
recommended to the Group Risk Committee.
The following tables show the Group’s maximum exposure to credit risk and the impact of collateral held as security, capped at the
gross exposure amount, by impairment stage. Capped collateral excludes the impact of forced sale discounts and costs to sell.
2021
OSB CCFS Total
Gross
carrying
amount
£m
Capped
collateral
held
£m
Gross
carrying
amount
£m
Capped
collateral
held
£m
Gross
carrying
amount
£m
Capped
collateral
held
£m
Stage 1 10,502.7 10,478.1 7,685.7 7,684.6 18,188.4 18,162.7
Stage 2 1,143.8 1,141.9 1,269.8 1,269.7 2,413.6 2,411.6
Stage 3 365.6 337.9 99.1 99.1 464.7 437.0
Stage 3 (POCI) 45.2 43.6 52.2 52.2 97.4 95.8
12,057.3 12,001.5 9,106.8 9,105.6 21,164.1 21,107.1
2020
OSB CCFS Total
Gross
carrying
amount
£m
Capped
collateral
held
£m
Gross
carrying
amount
£m
Capped
collateral
held
£m
Gross
carrying
amount
£m
Capped
collateral
held
£m
Stage 1 9,366.8 9,303.4 6,749.5 6,747.9 16,116.3 16,051.3
Stage 2 1,363.4 1,359.8 1,327.6 1,3 27.6 2,691.0 2,687.4
Stage 3 352.6 323.3 48.1 48.1 400.7 371.4
Stage 3 (POCI) 48.6 48.4 66.0 66.0 114.6 114.4
11,131.4 11,034.9 8,191.2 8,189.6 19,322.6 19,224.5
The Group’s main form of collateral held is property, based in the UK and the Channel Islands.

220
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
46. Risk management (Continued)
The Group uses indexed loan to value (LTV) ratios to assess the quality of the uncapped collateral held. Property values are updated to
reflect changes in the HPI. A breakdown of loans and advances to customers by indexed LTV is as follows:
2021 2020
OSB
£m
CCFS
£m
Total
£m %
OSB
£m
CCFS
£m
Total
£m %
Band
0% – 50% 2,293.3 428.2 2,721.5 13 1,740.3 419.3 2,159.6 11
50% – 60% 1,935.3 490.1 2,425.4 11 1,462.0 483.3 1,945.3 10
60% – 70% 4,179.0 1,241.9 5,420.9 26 2,813.4 1,109.3 3,922.7 20
70% – 80% 2,887.7 6,100.7 8,988.4 43 3,942.9 5,144.3 9,0 87.2 47
80% – 90% 513.2 844.4 1,3 57. 6 6 879.1 1,033.7 1,912.8 10
90% – 100% 77.8 1.5 79.3 – 105.8 1.3 107.1 1
>100% 171.0 – 171.0 1 187.9 – 187.9 1
Total loans before provisions 12,057.3 9,106.8 21,164.1 100 11,131.4 8,191.2 19,322.6 100
The table below shows the LTV banding for the OSB segments’ two major lending streams:
2021 2020
OSB
BTL/SME
£m
Residential
£m
Total
£m %
BTL/SME
£m
Residential
£m
Total
£m %
Band
0% – 50% 1,007.6 1,285.7 2,293.3 19 795.7 944.6 1,740.3 16
50% – 60% 1,693.7 241.6 1,935.3 16 1,228.1 233.9 1,462.0 13
60% – 70% 3,903.0 276.0 4,179.0 35 2,602.1 211.3 2,813.4 25
70% – 80% 2,647.7 240.0 2,887.7 24 3,693.4 249.5 3,942.9 35
80% – 90% 452.8 60.4 513.2 4 584.5 294.6 879.1 8
90% – 100% 66.2 11.6 7 7.8 1 89.4 16.4 105.8 1
>100% 165.1 5.9 171.0 1 171.4 16.5 187.9 2
Total loans before provisions 9,936.1 2,121.2 12,057.3 100 9,164.6 1,966.8 11,131.4 100
The tables below show the LTV analysis of the OSB BTL/SME sub-segment:
2021
OSB
Buy-to-Let
£m
Commercial
£m
Residential
development
£m
Funding lines
£m
Total
£m
Band
0% – 50% 804.0 118.9 19.0 65.7 1,0 07.6
50% – 60% 1,532.0 105.1 40.1 16.5 1,693.7
60% – 70% 3,708.1 130.1 61.6 3.2 3,903.0
70% – 80% 2,423.7 224.0 – – 2 ,647.7
80% – 90% 249.5 165.9 – 37.4 452.8
90% – 100% 46.4 19.8 – – 66.2
>100% 104.0 30.6 – 30.5 165.1
Total loans before provisions 8,867.7 794.4 120.7 153.3 9,936.1
2020
OSB
Buy-to-Let
£m
Commercial
£m
Residential
development
£m
Funding lines
£m
Total
£m
Band
0% – 50% 643.3 80.6 12.5 59.3 795.7
50% – 60% 1,040.1 84.3 64.2 39.5 1,228.1
60% – 70% 2,407.4 132.0 56.4 6.3 2,602.1
70% – 80% 3,411.7 251.3 – 30.4 3,693.4
80% – 90% 370.1 214.4 – – 584.5
90% – 100% 54.1 35.3 – – 89.4
>100% 117.9 24.0 – 29.5 171.4
Total loans before provisions 8,044.6 821.9 133.1 165.0 9,164.6

221
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
46. Risk management (Continued)
The table below shows the LTV analysis of the OSB Residential sub-segment:
2021 2020
OSB
First charge
£m
Second
charge
£m
Funding lines
£m
Total
£m
First charge
£m
Second
charge
£m
Funding lines
£m
Total
£m
Band
0% – 50% 1,173.3 111.8 0.6 1,285.7 835.8 105.1 3.7 944.6
50% – 60% 189.8 51.8 – 241.6 167.2 64.5 2.2 233.9
60% – 70% 240.2 35.8 – 276.0 151.7 58.1 1.5 211.3
70% – 80% 221.3 18.7 – 240.0 208.1 39.9 1.5 249.5
80% – 90% 56.5 3.9 – 60.4 274.8 19.3 0.5 294.6
90% – 100% 10.3 1.3 – 11.6 12.4 3.6 0.4 16.4
>100% 4.5 1.4 – 5.9 10.7 4.9 0.9 16.5
Total loans before provisions 1,895.9 224.7 0.6 2,121.2 1,660.7 295.4 10.7 1,966.8
The tables below show the LTV analysis of the four CCFS sub-segments:
2021
CCFS
Buy-to-Let
£m
Residential
£m
Bridging
£m
Second
charge
lending
£m
Total
£m %
Band
0% – 50% 104.8 261.0 30.2 32.2 428.2 5
50% – 60% 205.4 246.8 9.3 28.6 490.1 5
60% – 70% 702.4 480.1 14.9 44.5 1,241.9 14
70% – 80% 4,827.7 1,234.5 1.4 37.1 6,100.7 67
80% – 90% 560.5 268.9 0.5 14.5 844.4 9
90% – 100% 0.1 1.4 – – 1.5 –
Total loans before provisions 6,400.9 2,492.7 56.3 156.9 9,106.8 100
2020
CCFS
Buy-to-Let
£m
Residential
£m
Bridging
£m
Second
charge
lending
£m
Total
£m %
Band
0% – 50% 92.7 242.1 50.4 34.1 419.3 5
50% – 60% 196.0 233.9 17.9 35.5 483.3 6
60% – 70% 632.9 400.2 16.8 59.4 1,109.3 14
70% – 80% 3,916.2 1,155.7 21.1 51.3 5,144.3 62
80% – 90% 600.7 410.8 – 22.2 1,033.7 13
90% – 100% 0.5 0.8 – – 1.3 –
Total loans before provisions 5,439.0 2,443.5 106.2 202.5 8,191.2 100

222
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
46. Risk management (Continued)
Forbearance measures undertaken
The Group has a range of options available where borrowers experience financial difficulties that impact their ability to service their
financial commitments under the loan agreement. These options are explained on pages 71 and 72.
A summary of the forbearance measures undertaken (excluding COVID-19 related payment deferrals) during the year is shown below.
The balances disclosed reflect the year end balance of the accounts where a forbearance measure was undertaken during the year.
Forbearance type
Number of
accounts
2021
At
31 December
2021
£m
Number of
accounts
2020
At
31 December
2020
£m
Interest-only switch 159 18.6 108 14.5
Interest rate reduction 437 8.1 21 2.2
Term extension 271 16.6 431 27.1
Payment deferral 499 43.0 447 39.3
Voluntary-assisted sale 7 0.8 2 0.1
Payment concession (reduced monthly payments) 51 12.1 34 2.1
Capitalisation of interest 65 1.1 2 0.1
Full or partial debt forgiveness 1,078 22.6 11 0.2
Total 2,567 122.9 1,056 85.6
Loan type
First charge owner-occupier 424 34.8 176 27.1
Second charge owner-occupier
1
1,931 38.7 665 22.7
Buy-to-Let 160 34.6 49 8.9
Commercial 52 14.8 166 26.9
Total 2,567 122.9 1,056 85.6
The 2020 comparatives have been amended due to a revision to the calculation methodology.
1. Through 2021 the Group undertook an exercise and provided a series of forbearance solutions and options to long-term arrears customers on our Second charge portfolio to
support and remedy the accrued delinquency.
The COVID-19 payment deferrals scheme ended during 2021. At 31 December 2020 this represented only 1.3% of the Group’s loan book
by value. For further information on forbearance see the Risk review on page 71.
Geographical analysis by region
An analysis of loans, excluding asset finance leases, by region is provided below:
Group
2021
Group
2020
1
Region
OSB
£m
CCFS
£m
Total
£m %
OSB
£m
CCFS
£m
Total
£m %
East Anglia 361.8 967.1 1,328.9 6 406.1 866.2 1,272.3 7
East Midlands 543.8 555.8 1,099.6 5 452.6 463.4 916.0 5
Greater London 4,983.7 3,052.6 8,036.3 39 4,842.0 2,837.4 7,679.4 40
Guernsey 26.3 – 26.3 – 35.8 – 35.8 –
Jersey 99.3 – 99.3 – 122.9 – 122.9 1
North East 153.9 244.4 398.3 2 139.0 208.4 347.4 2
North West 762.3 755.0 1,517.3 7 623.7 674.8 1,298.5 7
Northern Ireland 10.9 – 10.9 – 12.9 – 12.9 –
Scotland 35.2 226.0 261.2 1 41.3 214.2 255.5 1
South East 2,792.6 1,452.4 4,245.0 20 2,401.2 1,316.7 3,717.9 19
South West 825.5 544.3 1,369.8 7 752.7 478.5 1,231.2 6
Wales 272.1 240.6 512.7 2 246.8 209.9 456.7 2
West Midlands 706.9 629.8 1,336.7 7 738.5
529.2 1,267.7 7
Yorks and Humberside 366.8 438.8 805.6 4 250.4 392.5 642.9 3
Total loans before provisions 11,941.1 9,106.8 2 1,047.9 100 11,065.9 8,191.2 19,257.1 100
1. The prior period comparative has been amended to exclude asset finance leases as geography is not a key risk for leased assets.

223
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
46. Risk management (Continued)
Approach to measurement of credit quality
The Group categorises the credit quality of loans and advances to customers into internal risk grades based on the 12 month PD
calculated at the reporting date. The PDs include a combination of internal behavioural and credit bureau characteristics. The risk
grades are further grouped into the following credit quality segments:
} Excellent quality – where there is a very high likelihood the asset will be recovered in full with a negligible or very low risk of default.
} Good quality – where there is a high likelihood the asset will be recovered in full with a low risk of default.
} Satisfactory quality – where the assets demonstrate a moderate default risk.
} Lower quality – where the assets require closer monitoring and the risk of default is of greater concern.
The credit grade for the Group’s investment securities and loans and advances to credit institutions is based on the external credit
rating of the counterparty.
The following tables disclose the credit risk quality ratings of loans and advances to customers by IFRS 9 stage:
2021
Stage 1
£m
Stage 2
£m
Stage 3
£m
Stage 3
(POCI)
£m
Total
£m
OSB
Excellent 5,305.7 148.4 – – 5,454.1
Good 5,079.2 687.1 – – 5,766.3
Satisfactory 113.5 232.4 – – 345.9
Lower 4.3 75.9 – – 80.2
Impaired – – 365.6 – 365.6
POCI – – – 45.2 45.2
CCFS
Excellent 5,126.6 319.1 – – 5,445.7
Good 2,519.6 693.9 – – 3,213.5
Satisfactory 35.0 147.7 – – 182.7
Lower 4.5 109.1 – – 113.6
Impaired – – 99.1 – 99.1
POCI – – – 52.2 52.2
18,188.4 2,413.6 464.7 97.4 21,164.1
2020
Stage 1
£m
Stage 2
£m
Stage 3
£m
Stage 3
(POCI)
£m
Total
£m
OSB
Excellent 4,689.6 295.4 – – 4,985.0
Good 4,564.9 756.4 – – 5,321.3
Satisfactory 106.7 242.8 – – 349.5
Lower 5.6 68.8 – – 74.4
Impaired – – 352.6 – 352.6
POCI – – – 48.6 48.6
CCFS
Excellent 4,352.8 398.8 – – 4,751.6
Good 2,338.8 667.2 – – 3,006.0
Satisfactory 55.3 140.2 – – 195.5
Lower 2.6 121.4 – – 124.0
Impaired – – 48.1 – 48.1
POCI – – – 66.0 66.0
16,116.3 2,691.0 400.7 114.6 19,322.6

224
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
46. Risk management (Continued)
The tables below show the Group’s other financial assets by credit risk rating grade:
Group 2021
Excellent
£m
Good
£m
Satisfactory
£m
Total
£m
Investment securities 491.4 – – 491.4
Loans and advances to credit institutions 2,688.9 151.8 2.9 2,843.6
Derivative assets 43.0 142.7 – 185.7
3,223.3 294.5 2.9 3,520.7
Group 2020
Excellent
£m
Good
£m
Satisfactory
£m
Total
£m
Investment securities 471.2 – – 471.2
Loans and advances to credit institutions 2,432.9 233.4 9.9 2,676.2
Derivative assets 6.5 5.8 – 12.3
2,910.6 239.2 9.9 3,159.7
Credit risk – loans and advances to credit institutions and investment securities
The Group holds treasury instruments in order to meet liquidity requirements and for general business purposes. The credit risk
arising from these investments is closely monitored and managed by the Group’s Treasury function. In managing these assets, Group
Treasury operates within guidelines laid down in the Group Market and Liquidity Risk Policy approved by ALCO and performance is
monitored and reported to ALCO monthly, including through the use of an internally developed rating model based on counterparty
credit default swap spreads.
The Group has limited exposure to emerging markets (Indian operations) and non-investment grade debt. ALCO is responsible for
approving treasury counterparties.
During the year, the average balance of cash in hand, loans and advances to credit institutions and investment securities on a monthly
basis was £2,926.0m (2020: £3,196.0m).
The tables below show the industry sector of the Group’s loans and advances to credit institutions and investment securities:
2021
2020
£m % £m %
BoE
1
2,555.9 76 2,308.8 73
Other banks 287.7 9 367.4 12
Central government 252.1 8 – –
Securitisation 239.3 7 471.2 15
Total 3,335.0 100 3,147.4 100
1. Balances with the BoE include £59.5m (2020: £52.3m) held in the cash ratio deposit.
The tables below show the geographical exposure of the Group’s loans and advances to credit institutions and investment securities:
2021 2020
£m % £m %
United Kingdom 3,328.0 100 3 ,137.5 100
India 7.0 – 9.9 –
Total 3,335.0 100 3,147.4 100
The Group monitors exposure concentrations against a variety of criteria, including asset class, sector and geography. To avoid
refinancing risks associated with any one counterparty, sector or geographical region, the Board has set appropriate limits.
Liquidity risk
Liquidity risk is the risk of having insufficient liquid assets to fulfil obligations as they become due or the cost of raising liquid funds
becoming too expensive.
The Group’s approach to managing liquidity risk is to maintain sufficient liquid resources to cover cash flow imbalances and
fluctuations in funding in order to retain full public confidence in the solvency of the Group and to enable the Group to meet its
financial obligations as they fall due. This is achieved through maintaining a prudent level of liquid assets and control of the growth of
the business. The Group has established a call account with the BoE and has access to its contingent liquidity facilities.

225
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
46. Risk management (Continued)
The Board has delegated the responsibility for liquidity management to the Chief Executive Officer, assisted by ALCO, with day-to-
day management delegated to Treasury as detailed in the Group Market and Liquidity Risk Policy. The Board is responsible for setting
risk appetite limits over the level and maturity profile of funding and for monitoring the composition of the Group financial position. For
each material class of financial liability a contractual maturity analysis is provided below.
The Group also monitors a range of triggers, defined in the recovery plan, which are designed to capture liquidity stresses in advance
in order to allow sufficient time for management action to take effect. These are monitored daily by the Risk team, with breaches
immediately reported to the Group Chief Risk Officer, Chief Executive Officer, Chief Financial Officer and the Group Treasurer.
The tables below provide a contractual maturity analysis of the Group’s financial assets and liabilities:
2021
Carrying
amount
£m
On demand
£m
Less than
3 months
£m
3 – 12
months
£m
1 – 5
years
£m
More than
5 years
£m
Financial liability by type
Amounts owed to retail depositors 17,526.4 5,004.6 2,350.3 7,45 8.5 2,713.0 –
Amounts owed to credit institutions 4,319.6 42.1 1.0 – 4,203.2 73.3
Amounts owed to other customers 92.6 14.8 8.1 45.0 24.7 –
Derivative liabilities 19.7 – 0.7 10.4 8.6 –
Debt securities in issue 460.3 – – – 460.3 –
Lease liabilities 10.7 – 0.3 0.6 3.7 6.1
Subordinated liabilities 10.3 – – 0.1 10.2 –
PSBs 15.2 – – – 15.2 –
Total liabilities 22,454.8 5,061.5 2,360.4 7,514.6 7,438.9 79.4
Financial asset by type
Cash in hand 0.5 0.5 – – – –
Loans and advances to credit institutions 2,843.6 2 ,667.8 52.0 10.1 – 113.7
Investment securities 491.4 – 172.7 6.1 312.6 –
Loans and advances to customers 21,080.3 3.3 163.8 383.5 1,327.4 19,202.3
Derivative assets 185.7 – 0.1 5.4 179.9 0.3
Total assets 24,601.5 2,671.6 388.6 405.1 1,819.9 19,316.3
Cumulative liquidity gap (2,389.9) (4,361.7) (11,471.2) (17,090.2)
2,146.7
2020
Carrying
amount
£m
On demand
£m
Less than
3 months
£m
3 – 12
months
£m
1 – 5
years
£m
More than
5 years
£m
Financial liability by type
Amounts owed to retail depositors 16,603.1 3,810.7 2,733.5 6,517.5 3,541.4 –
Amounts owed to credit institutions 3,570.2 0.4 85.0 1,035.3 2,449.5 –
Amounts owed to other customers 72.9 26.9 7.5 38.5 – –
Derivative liabilities 163.6 – 0.2 4.5 153.9 5.0
Debt securities in issue 421.9 – – – 421.9 –
Lease liabilities 11.7 – 0.2 0.7 3.6 7. 2
Subordinated liabilities 10.5 – 0.2 0.1 10.2 –
PSBs 37.6 – 0.6 – – 37.0
Total liabilities 20,891.5 3,838.0 2,827.2 7,596.6 6,580.5 49.2
Financial asset by type
Cash in hand 0.5 0.5 – – – –
Loans and advances to credit institutions 2,676.2 2,512.8 111.1 18.3 – 34.0
Investment securities 471.2 – 0.3 – 470.9 –
Loans and advances to customers 19,230.7 4.1 316.7 266.4 1,239.7 17,403 .8
Derivative assets 12.3 – 1.3 3.7 7.1 0.2
Total assets 22,390.9 2,517.4 429.4 288.4 1,717.7 17,4 3 8.0
Cumulative liquidity gap (1,320.6) (3,718.4) (11,026.6) (15,889.4)
1,499.4

226
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
46. Risk management (Continued)
Liquidity risk – contractual cash flows
The following tables provide an analysis of the Group’s gross contractual cash flows, derived using interest rates and contractual
maturities at the reporting date and excluding impacts of early payments or non-payments:
2021
Carrying
amount
£m
Gross inflow/
outflow
£m
Up to
3 months
£m
3 – 12
months
£m
1 – 5
years
£m
More than
5 years
£m
Financial liability by type
Amounts owed to retail depositors 17,526.4 17, 554.7 9,305.7 5,883.7 2,365.3 –
Amounts owed to credit institutions 4,319.6 4,359.8 45.2 5.2 4,236.1 73.3
Amounts owed to other customers 92.6 92.6 22.9 45.0 24.7 –
Derivative liabilities 19.7 6.0 (0.4) 5.1 1.2 0.1
Debt securities in issue 460.3 473.2 25.1 75.0 373.1 –
Lease liabilities 10.7 13.1 0.6 1.6 7.7 3.2
Subordinated liabilities 10.3 12.2 0.2 0.7 11.3 –
PSBs 15.2 16.8 0.2 0.5 16.1 –
Total liabilities 22,454.8 22,528.4 9,399.5 6,016.8 7,035.5 76.6
Off-balance sheet loan commitments 1,155.3 1,155.3 1,155.3 – – –
Financial asset by type
Cash in hand 0.5 0.5 0.5 – – –
Loans and advances to credit institutions 2,843.6 2,843.6 2,756.3 10.1 – 7 7. 2
Investment securities 491.4 497.0 172.6 108.8 215.6 –
Loans and advances to customers 21,080.3 41,290.2 374.4 1,331.0 5,711.9 33,872.9
Derivative assets 185.7 75.8 (1.4) 11.2 66.0 –
Total assets 24,601.5 44,707.1 3,302.4
1,461.1 5,993.5 33,950.1
2020
Carrying
amount
£m
Gross inflow/
outflow
£m
Up to
3 months
£m
3 – 12
months
£m
1 – 5
years
£m
More than
5 years
£m
Financial liability by type
Amounts owed to retail depositors
1
16,603.1 16,644.9 8,712.7 5,325.8 2,606.4 –
Amounts owed to credit institutions
1
3,570.2 3,585.8 86.0 1,0 37.7 2,462.1 –
Amounts owed to other customers
1
72.9 73.0 34.4 38.6 – –
Derivative liabilities 163.6 157.7 11.0 41.4 103.8 1.5
Debt securities in issue
1
421.9 426.4 17.8 53.1 355.5 –
Lease liabilities 11.7 13.2 0.5 1.2 6.4 5.1
Subordinated liabilities 10.5 13.1 0.4 0.5 12.2 –
PSBs 37.6 39.8 0.7 0.3 1.8 37.0
Total liabilities 20,891.5 20,953.9 8,863.5 6,498.6 5,548.2 43.6
Off-balance sheet loan commitments 979.5 979.5 979.5 – – –
Financial asset by type
Cash in hand 0.5 0.5 0.5 – – –
Loans and advances to credit institutions 2,676.2 2,676.2 2,623.9 18.3 – 34.0
Investment securities 471.2 494.9 1.2 4.0 483.8 5.9
Loans and advances to customers 19,230.7 36,156.7 373.4 1,132.4 4,960.5 29,690.4
Derivative assets 12.3 12.1 3.2 4.6 4.3 –
Total assets
22,390.9 39,340.4 3,002.2 1,159.3 5,448.6 29,730.3
1. The 2020 comparatives have been restated following a misallocation of cash flows between time buckets in the prior year.
The actual repayment profile of retail deposits may differ from the analysis above due to the option of early withdrawal with a penalty.
Cash flows on PSBs are disclosed up to the next interest rate reset date.
The actual repayment profile of loans and advances to customers may differ from the analysis above since many mortgage loans are
repaid prior to the contractual end date.

227
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
46. Risk management (Continued)
Liquidity risk – asset encumbrance
Asset encumbrance levels are monitored by ALCO. The following tables provide an analysis of the Group’s encumbered and
unencumbered assets:
2021
Encumbered Unencumbered
Pledged as
collateral
£m
Other
1
£m
Available as
collateral
£m
Other
2
£m
Total
£m
Cash in hand – – 0.5 – 0.5
Loans and advances to credit institutions 99.9 107.5 2,496.4 139.8 2,843.6
Investment securities 121.8 – 369.6 – 491.4
Loans and advances to customers 6,373.7 – 2,746.3 11,960.3 21,080.3
Derivative assets – – – 185.7 185.7
Non-financial assets – – – (69.6) (69.6)
6,595.4 107.5 5,612.8 12,216.2 24,531.9
2020
Encumbered Unencumbered
Pledged as
collateral
£m
Other
1
£m
Available as
collateral
£m
Other
2
£m
Total
£m
Cash in hand – – 0.5 – 0.5
Loans and advances to credit institutions 211.1 95.0 2,256.5 113.6 2,676.2
Investment securities 161.0 – 310.2 – 471.2
Loans and advances to customers 5,638.6 – 2,752.0 10,840.1 19,230.7
Derivative assets – – – 12.3 12.3
Non-financial assets – – – 263.6 263.6
6,010.7 95.0 5,319.2 11,229.6 22,654.5
1. Represents assets that are not pledged but that the Group believes it is restricted from using to secure funding for legal or other reasons.
2. Represents assets that are not restricted for use as collateral, but the Group treats as available as collateral once they are readily available to secure funding in the normal
course of business.
Liquidity risk – liquidity reserves
The tables below analyse the Group’s liquidity reserves, where carrying value is considered to be equal to fair value:
2021
£m
2020
£m
Unencumbered balances with central banks 2,496.4 2,256.5
Unencumbered cash and balances with other banks 139.8 113.6
Other cash and cash equivalents 0.5 0.5
Unencumbered investment securities 369.6 310.2
3,006.3 2,680.8
Market risk
Market risk is the risk of an adverse change in the Group’s income or the Group’s net worth arising from movement in interest rates,
exchange rates or other market prices. Market risk exists, to some extent, in all the Group’s businesses. The Group recognises that the
effective management of market risk is essential to the maintenance of stable earnings and preservation of shareholder value.
Interest rate risk
The primary market risk faced by the Group is interest rate risk. Interest rate risk is the risk of loss from adverse movement in the overall
level of interest rates. It arises from mismatches in the timing of repricing of assets and liabilities, both on and off-balance sheet. The
Group does not run a trading book or take speculative interest rate positions and therefore all interest rate risk resides in the banking
book (interest rate risk in the banking book (IRRBB)). IRRBB is most prevalent in mortgage lending where fixed rate mortgages are
not funded by fixed rate deposits of the same duration, or where the fixed rate risk is not hedged by a fully matching interest rate
derivative. Exposure is mitigated on a continuous basis through the use of derivatives and reserve allocations.
Currently interest rate risk is managed separately for OSB and CCFS due to the use of different treasury management and asset
and liability management (ALM) systems. However, the methodology applied to the setting of risk appetites was aligned across the
Group in 2020. Both Banks apply an economic value at risk approach as well as an earnings at risk approach for interest rate risk and
basis risk. The interest rate sensitivity is impacted by behavioural assumptions used by the Group; the most significant of which are
prepayments and reserve allocations. Expected prepayments are modelled based on historical analysis and current market rates. The
reserve allocation strategy is approved by ALCO and set to reflect the current balance sheet and future plans.

228
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
46. Risk management (Continued)
Economic value at risk is measured using the impact of six different internally derived interest rate scenarios. The internal scenarios
are defined by ALCO and are based on three ‘shapes’ of curve movement (shift, twist and flex). Historical data is used to calibrate the
severity of the scenarios to the Group’s risk appetite. The Board has set limits on interest rate risk exposure of 2.25% and 1% of CET1 for
OSB and CCFS, respectively. The table below shows the maximum decreases to net interest income under these scenarios after taking
into account the derivatives:
2021
£m
2020
£m
OSB 9.9 5.6
CCFS 1.1 0.7
11.0 6.3
Exposure for earnings at risk is measured by the impact of a +/-50bps parallel shift in interest rates on the expected profitability of
the Group in the next 12 months. The risk appetite limit is 2% of full year net interest income. The table below shows the maximum
decreases after taking into account the derivatives:
2021
£m
2020
£m
OSB
1
0.5 (0.1)
CCFS
1
(0.4) 2.2
0.1 2.1
1. Increases for OSB 2020 and CCFS 2021 due to product floors earnings increases in both the +50bps and -50bps scenarios.
The Group is also exposed to basis risk. Basis risk is the risk of loss from an adverse divergence in interest rates. It arises where assets
and liabilities reprice from different variable rate indices. These indices may be market rates (e.g. bank base rate, LIBOR or SONIA) or
administered (e.g. the Group’s SVR, other discretionary variable rates, or that received on call accounts with other banks).
The Group measures basis risk using the impact of five scenarios on net interest income over a one-year period including movements
such as diverging base, LIBOR and SONIA rates. Historical data is used to calibrate the severity of the scenarios to the Group’s risk
appetite. The Board has set a limit on basis risk exposure of 4% of full year net interest income. The table below shows the maximum
decreases to net interest income at 31 December 2021 and 2020:
2021
£m
2020
£m
OSB 3.2 5.4
CCFS 3.8 8.0
7.0 13.4
Foreign exchange rate risk
The Group has limited exposure to foreign exchange risk in respect of its Indian operations. A 5% increase in exchange rates would
result in a £0.4m (2020: £0.4m) effect in profit or loss and £0.5m (2020: £0.5m) in equity.
Structured entities
The structured entities consolidated within the Group at 31 December 2021 were Canterbury Finance No.2 plc, Canterbury Finance
No.3 plc, Canterbury Finance No.4 plc and CMF 2020-1 plc. These entities hold legal title to a pool of mortgages which are used as a
security for issued debt. The transfer of mortgages fails derecognition criteria because the Group retained the subordinated notes and
residual certificates issued and as such did not transfer substantially the risks and rewards of ownership of the securitised mortgages.
Therefore, the Group is exposed to credit, interest rate and other risks on the securitised mortgages.
Cash flows generated from the structured entities are ring-fenced and are used to pay interest and principal of the issued debt
securities in a waterfall order according to the seniority of the bonds. The structured entities are self-funded and the Group is not
contractually or constructively obliged to provide further liquidity or financial support.
The structured entities consolidated within the Group at 31 December 2020 were Canterbury Finance No.2 plc, Canterbury Finance
No.3 plc and CMF 2020-1 plc.

229
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
46. Risk management (Continued)
Unconsolidated structured entities
Structured entities, which were sponsored by the Group include Precise Mortgage Funding 2017-1B plc, Charter Mortgage Funding
2017-1 plc, Precise Mortgage Funding 2018-1B plc, Charter Mortgage Funding 2018-1 plc, Precise Mortgage Funding 2019-1B plc,
Canterbury Finance No.1 plc and Precise Mortgage Funding 2020-1B plc.
These structured entities are not consolidated by the Group, as the Group does not control the entities and is not exposed to the risks
and rewards of ownership from the securitised mortgages. The Group has no contractual arrangements with the unconsolidated
structured entities other than the investments disclosed in note 20 and servicing the structured entities’ mortgage portfolios.
The Group has not provided any support to the unconsolidated structured entities listed and has no obligation or intention to do so.
During 2021 the Group received £1.8m interest income (2020: £5.0m) and £4.4m servicing income (2020: £4.6m) from unconsolidated
structured entities.
47. Financial instruments and fair values
i. Financial assets and financial liabilities
The following tables summarise the classification and carrying value of the Group’s financial assets and financial liabilities:
2021
Note
Designated
FVTPL
£m
Mandatorily
FVTPL
£m
FVOCI
£m
Amortised
cost
£m
Total
carrying
amount
£m
Assets
Cash in hand – – – 0.5 0.5
Loans and advances to credit institutions 19 – – – 2,843.6 2,843.6
Investment securities 20 0.7 – 167.6 323.1 491.4
Loans and advances to customers 21 17.7 – – 21,062.6 21,080.3
Derivative assets 26 – 185.7 – – 185.7
18.4 185.7 167.6 24,229.8 24,601.5
Liabilities
Amounts owed to retail depositors 33 – – – 17,526.4 17,526.4
Amounts owed to credit institutions 32 – – – 4,319.6 4,319.6
Amounts owed to other customers 34 – – – 92.6 92.6
Debt securities in issue 35 – – – 460.3 460.3
Derivative liabilities 26 – 19.7 – – 19.7
Subordinated liabilities 40 – – – 10.3 10.3
PSBs 41 – – – 15.2 15.2
– 19.7 – 22,424.4 22,444.1
2020
Note
Designated
FVTPL
£m
Mandatorily
FVTPL
£m
FVOCI
£m
Amortised
cost
£m
Total
carrying
amount
£m
Assets
Cash in hand – – – 0.5 0.5
Loans and advances to credit institutions 19 – – – 2,676.2 2,676.2
Investment securities 20 – – 285.0 186.2 471.2
Loans and advances to customers 21 19.1 – – 19,211.6 19,230.7
Derivative assets 26 – 12.3 – – 12.3
19.1 12.3 285.0 22,074.5 22,390.9
Liabilities
Amounts owed to retail depositors 33 – – – 16,603.1 16,603.1
Amounts owed to credit institutions 32 – – – 3,570.2 3,570.2
Amounts owed to other customers 34 – – – 72.9 72.9
Debt securities in issue 35 – – – 421.9 421.9
Derivative liabilities 26 – 163.6 – – 163.6
Subordinated liabilities 40 – – – 10.5 10.5
PSBs 41 – – – 37.6 37.6
– 163.6 – 20,716.2 20,879.8
The Group has no financial assets or financial liabilities classified as held for trading.

230
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
47. Financial instruments and fair values (Continued)
ii. Fair values
The following tables summarise the carrying value and estimated fair value of financial instruments not measured at fair value in the
Consolidated Statement of Financial Position:
2021 2020
Carrying
value
£m
Estimated
fair value
£m
Carrying
value
£m
Estimated fair
value
£m
Assets
Cash in hand 0.5 0.5 0.5 0.5
Loans and advances to credit institutions 2,843.6 2,843.6 2,676.2 2,676.2
Investment securities 323.1 323.8 186.2 186.6
Loans and advances to customers 21,062.6 21,079.5 19,211.6 19,352.0
24,229.8 24,247.4 22,074.5 22,215.3
Liabilities
Amounts owed to retail depositors 17,526.4 17,524.9 16,603.1 16,666.1
Amounts owed to credit institutions 4,319.6 4,319.6 3,570.2 3,570.2
Amounts owed to other customers 92.6 92.6 72.9 72.9
Debt securities in issue 460.3 460.3 421.9 421.9
Subordinated liabilities 10.3 10.6 10.5 10.7
PSBs 15.2 14.7 37.6 32.3
22,424.4 22,422.7 20,716.2 20,774.1
The fair values in these tables are estimated using the valuation techniques below. The estimated fair value is stated as at 31 December
and may be significantly different from the amounts which will actually be paid on the maturity or settlement dates of each financial
instrument.
Cash in hand
This represents physical cash across the Group’s branch network where fair value is considered to be equal to carrying value.
Loans and advances to credit institutions
This mainly represents the Group’s working capital current accounts and call accounts with central governments and other banks with
an original maturity of less than three months. Fair value is not considered to be materially different to carrying value.
Investment securities
Investment securities’ fair values are provided by a third party and are based on the market values of similar financial instruments. The
fair value of investment securities held at FVTPL is measured using a discounted cash flow model.
Loans and advances to customers
This mainly represents secured mortgage lending to customers. The fair value of fixed rate mortgages has been estimated by
discounting future cash flows at current market rates of interest. Future cash flows include the impact of expected credit losses. The
interest rate on variable rate mortgages is considered to be equal to current market product rates and as such fair value is estimated
to be equal to carrying value.
Amounts owed to retail depositors
The fair value of fixed rate retail deposits has been estimated by discounting future cash flows at current market rates of interest.
Retail deposits at variable rates and deposits payable on demand are considered to be at current market rates and as such fair value
is estimated to be equal to carrying value.
Amounts owed to credit institutions
This mainly represents amounts drawn down under the BoE TFS and TFSME and commercial repos. Fair value is considered to be equal
to carrying value.
Amounts owed to other customers
This represents saving products to corporations and local authorities. The fair value of fixed rate deposits is estimated by discounting
future cash flows at current market rates of interest. Deposits at variable rates are considered to be at current market rates and the
fair value is estimated to be equal to carrying value.
Debt securities in issue
While the Group’s debt securities in issue are listed, the quoted prices for an individual note may not be indicative of the fair value of
the issue as a whole, due to the specialised nature of the market in such instruments and the limited number of investors participating
in it. Fair value is not considered to be materially different to carrying value.
Subordinated liabilities and PSBs
The fair value of subordinated liabilities is estimated by using quoted market prices of similar instruments at the reporting date. The
PSBs are listed on the London Stock Exchange with fair value being the quoted market price at the reporting date.

231
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
47. Financial instruments and fair values (Continued)
iii. Fair value classification
The following tables provide an analysis of financial assets and financial liabilities measured at fair value in the Consolidated
Statement of Financial Position grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
2021
Carrying
amount
£m
Principal
amount
£m
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets
Investment securities 168.3 166.2 152.1 15.5 0.7 168.3
Loans and advances to customers 17.7 19.7 – – 17.7 17.7
Derivative assets 185.7 12,968.3 – 185.7 – 185.7
371.7 13,154.2 152.1 201.2 18.4 371.7
Financial liabilities
Derivative liabilities 19.7 7, 378.0 – 19.7 – 19.7
2020
Carrying
amount
£m
Principal
amount
£m
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets
Investment securities 285.0 284.7 – 285.0 – 285.0
Loans and advances to customers 19.1 21.8 – – 19.1 19.1
Derivative assets 12.3 8,687.8 – 12.3 – 12.3
316.4 8,994.3 – 297.3 19.1 316.4
Financial liabilities
Derivative liabilities 163.6 10,392.4 – 163.6 – 163.6
Level 1: Fair values that are based entirely on quoted market prices (unadjusted) in an actively traded market for identical assets and
liabilities that the Group has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments.
Since valuations are based on readily available observable market prices, this makes them most reliable, reduces the need for
management judgement and estimation and also reduces the uncertainty associated with determining fair values.
Level 2: Fair values that are based on one or more quoted prices in markets that are not active or for which all significant inputs
are taken from directly or indirectly observable market data. These include valuation models used to calculate the present value of
expected future cash flows and may be employed either when no active market exists or when there are no quoted prices available for
similar instruments in active markets.
Level 3: Fair values for which any one or more significant input is not based on observable market data and the unobservable inputs
have a significant effect on the instrument’s fair value. Valuation models that employ significant unobservable inputs require a higher
degree of management judgement and estimation in determining the fair value. Management judgement and estimation are usually
required for the selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial
instruments being valued, determination of the probability of counterparty default and prepayments, determination of expected
volatilities and correlations and the selection of appropriate discount rates.

232
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
47. Financial instruments and fair values (Continued)
The following table provides an analysis of financial assets and financial liabilities not measured at fair value in the Consolidated
Statement of Financial Position grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
2021
Carrying
amount
£m
Principal
amount
£m
Estimated fair value
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets
Cash in hand 0.5 0.5 – 0.5 – 0.5
Loans and advances to credit institutions 2,843.6 2,843.6 – 2,843.6 – 2,843.6
Investment securities 323.1 322.9 – 323.8 – 323.8
Loans and advances to customers 21,062.6 21,076.7 – 3,323.0 17,756.5 21,079.5
24,229.8 24,243.7 – 6,490.9 17,756.5 24,247.4
Financial liabilities
Amounts owed to retail depositors 17,526.4 17,469.0 – 6,601.3 10,923.6 17,524.9
Amounts owed to credit institutions 4,319.6 4,318.5 – 4,319.6 – 4,319.6
Amounts owed to other customers 92.6 92.5 – – 92.6 92.6
Debt securities in issue 460.3 460.2 – 460.3 – 460.3
Subordinated liabilities 10.3 10.1 – – 10.6 10.6
PSBs 15.2 15.0 14.7 – – 14.7
22,424.4 22,365.3 14.7 11,381.2 11,026.8 22,422.7
2020
Carrying
amount
£m
Principal
amount
£m
Estimated fair value
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets
Cash in hand 0.5 0.5 – 0.5 – 0.5
Loans and advances to credit institutions 2,676.2 2,676.1 – 2,676.2 – 2,676.2
Investment securities 186.2 186.2 – 186.6 – 186.6
Loans and advances to customers 19,211.6 19,200.1 – 3,314.5 16,037. 5 19,352.0
22,074.5 22,062.9 – 6,17 7.8 16,037.5 22,215.3
Financial liabilities
Amounts owed to retail depositors 16,603.1 16,5 07.3 – 5,546.1 11,120.0 16,666.1
Amounts owed to credit institutions 3,570.2 3,569.3 – 3,570.2 – 3,570.2
Amounts owed to other customers 72.9 72.7 – – 72.9 72.9
Debt securities in issue 421.9 421.8 – 421.9 – 421.9
Subordinated liabilities 10.5 10.3 – – 10.7 10.7
PSBs 37.6 37.0 32.3 – – 32.3
20,716.2 20,618.4 32.3 9,538.2 11,203.6 20,774.1
48. Pension scheme
Defined contribution scheme
The amount charged to profit or loss in respect of contributions to the Group’s defined contribution and stakeholder pension
arrangements is the contribution payable in the period. The total pension cost in the year amounted to £5.2m (2020: £4.3m).

233
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
49. Operating segments
The Group segments its lending business and operates under two segments in line with internal reporting to the Board:
} OSB
} CCFS
The Group separately discloses the impact of Combination accounting but does not consider this a business segment.
The financial position and results of operations of the above segments are summarised below:
2021
OSB
£m
CCFS
£m
Combination
£m
Total
£m
Balances at the reporting date
Gross loans and advances to customers 12,057.3 8,981.4 143.1 21,181.8
Expected credit losses (82.2) (19.6) 0.3 (101.5)
Loans and advances to customers 11,975.1 8,961.8 143.4 21,080.3
Capital expenditure 5.0 1.8 – 6.8
Depreciation and amortisation 6.5 3.2 4.8 14.5
Profit or loss for the year
Net interest income/(expense) 414.8 235.7 (62.9) 5 87.6
Other income 8.7 20.0 12.7 41.4
Total income/(expense) 423.5 255.7 (50.2) 629.0
Administrative expenses (97.9) (63.8) (4.8) (166.5)
Provisions (0.3) 0.1 – (0.2)
Impairment of financial assets (3.5) 8.4 (0.5) 4.4
Impairment of intangible assets – – 3.1 3.1
Integration costs (4.0) (1.0) – (5.0)
Exceptional items (0.2) – – (0.2)
Profit/(loss) before taxation 317.6 199.4 (52.4) 464.6
Taxation
1
(76.0) (51.8) 8.5 (119.3)
Profit/(loss) for the year 241.6 147.6 (43.9) 345.3
1. The taxation on Combination credit includes a credit of £14.1m relating to the unwind of the deferred tax liabilities recognised on the fair value adjustments of the CCFS
assets and liabilities at the acquisition date, offset by a £5.6m deferred tax charge due to the 6% increase in the main rate of the corporation tax liability from 1 April 2023.
2020
OSB
£m
CCFS
£m
Combination
£m
Total
£m
Balances at the reporting date
Gross loans and advances to customers 11,131.4 8,001.2 209.1 19,341.7
Expected credit losses (83.6) (28.2) 0.8 (111.0)
Loans and advances to customers 11,047.8 7,973.0 209.9 19,230.7
Capital expenditure 5.3 2.4 – 7.7
Depreciation and amortisation 7.1 2.4 4.3 13.8
Profit or loss for the year
Net interest income/(expense) 332.8 201.2 (61.8) 472.2
Other income 18.8 17.4 0.2 36.4
Total income/(expense) 351.6 218.6 (61.6) 508.6
Administrative expenses (95.2) (57.5) (4.3) (157.0)
Provisions – (0.1) – (0.1)
Impairment of financial assets (50.7) (20.5) 0.2 (71.0)
Impairment of intangible assets – – ( 7.0) ( 7.0)
Integration costs ( 7.5) (2.3) – (9.8)
Exceptional items (3.3) – – (3.3)
Profit/(loss) before taxation 194.9 138.2 (72.7) 260.4
Taxation
1
(46.9) (32.0) 14.8 (64.1)
Profit/(loss) for the year 148.0 106.2 (57.9) 196.3
1. The taxation on Combination credit of £14.8m includes a £4.8m charge due to a 2% increase in the rate for the deferred tax liability following the Government cancellation of
the corporation tax rate reduction on 19 March 2020.

234
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
50. Country by country reporting
Country by country reporting (CBCR) was introduced through Article 89 of CRD IV, aimed at the banking and capital markets industry.
The name, nature of activities and geographic location of the Group’s companies are presented below:
Jurisdiction Country Name Activities
UK
1
England OSB GROUP PLC Commercial banking
OneSavings Bank plc
5D Finance Limited
Broadlands Finance Limited
Charter Court Financial Services Group Plc
Charter Court Financial Services Limited
Charter Mortgages Limited
Easioption Limited
Exact Mortgage Experts Limited
Guernsey Home Loans Limited
Heritable Development Finance Limited
Inter Bay Financial I Limited
Inter Bay Financial II Limited
InterBay Asset Finance Limited
Interbay Funding, Ltd
Interbay Group Holdings Limited
Interbay Holdings Ltd
Interbay ML, Ltd
Jersey Home Loans Limited
Prestige Finance Limited
Reliance Property Loans Limited
Rochester Mortgages Limited
Guernsey Guernsey Home Loans Limited
Jersey Jersey Home Loans Limited
UK England Canterbury Finance No. 2 plc Special purpose vehicle
Canterbury Finance No. 3 plc
Canterbury Finance No. 4 plc
CMF 2020-1 plc
CML Warehouse Number 2 Limited
India India OSB India Private Limited Back office processing
1. Guernsey Home Loans Limited (Guernsey) and Jersey Home Loans Limited (Jersey) are incorporated in Guernsey and Jersey respectively, but are considered to be located
in the UK as they are managed and controlled in the UK with no permanent establishments in Guernsey or Jersey.

235
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
50. Country by country reporting (Continued)
Other disclosures required by the CBCR directive are provided below:
2021 UK India Consolidation
2
Total
Average number of employees 1,220 535 – 1,755
Turnover
1
, £m 628.9 9.6 (9.5) 629.0
Profit/(loss) before tax, £m 464.4 1.2 (1.0) 464.6
Corporation tax paid, £m 117.0 0.3 – 117.3
2020 UK India Consolidation
2
Total
Average number of employees 1,330 486 – 1,816
Turnover
1
, £m 508.3 9.4 (9.1) 508.6
Profit/(loss) before tax, £m 260.1 1.3 (1.0) 260.4
Corporation tax paid, £m 128.6 0.2 – 128.8
1. Turnover represents total income before impairment of financial and intangible assets, regulatory provisions and operating costs, but after net interest income, gains and
losses on financial instruments and other operating income.
2. Relates to a management fee from Indian subsidiaries to OneSavings Bank plc for providing back office processing.
The tables below reconcile tax charged and tax paid during the year.
2021
UK
£m
India
£m
Total
£m
Tax charge 118.9 0.4 119.3
Effects of:
Other timing differences 9.6 (0.1) 9.5
Tax outside of profit or loss (1.3) – (1.3)
Current period tax paid in prior years (9.1) – (9.1)
Tax in relation to future periods prepaid (1.1) – (1.1)
Tax paid 117.0 0.3 117.3
2020
UK
£m
India
£m
Total
£m
Tax charge 63.8 0.3 64.1
Effects of:
Other timing differences 15.7 (0.1) 15.6
Tax outside of profit or loss 0.2 – 0.2
Prior year tax paid during the year 41.8 – 41.8
Tax in relation to future periods prepaid 7.1 – 7.1
Tax paid 128.6 0.2 128.8

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OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
51. Adjustments for non-cash items and changes in operating assets and liabilities
2021
£m
2020
£m
Adjustments for non-cash items:
Depreciation and amortisation 14.5 13.8
Interest on investment securities (2.5) ( 7.5)
Integration cost 0.6 –
Interest on subordinated liabilities 0.8 0.8
Interest on PSBs 1.2 1.7
Interest on securitised debt 3.9 3.4
Interest on financing debt 5.3 10.9
Impairment (credit)/charge on loans (4.4) 71.0
Impairment (credit)/charge on intangible assets acquired on Combination (3.1) 7.0
Gains on sale of financial instruments (4.0) (20.0)
Provisions 0.2 0.1
Interest on lease liabilities 0.3 0.3
Fair value gains on financial instruments (29.5) (7.4)
Share-based payments 6.7 5.1
Total adjustments for non-cash items (10.0) 79.2
Changes in operating assets and liabilities:
Decrease/(increase) in loans and advances to credit institutions 98.7 (154.0)
Increase in loans and advances to customers (1,844.0) (1,705.0)
Increase in amounts owed to retail depositors 923.3 348.1
Net (increase)/decrease in other assets (1.1) 1.3
Net increase/(decrease) in derivatives and hedged items 3.6 (64.3)
Net increase in amounts owed to other customers 18.9 43.2
Net increase/(decrease) in other liabilities 1.7 (6.5)
Exchange differences on working capital (0.1) –
Total changes in operating assets and liabilities (799.0) (1,5 37.2)
52. Events after the reporting date
On 17 January 2022, the Group announced that the FCA had approved the base prospectus (dated 14 January 2022) in relation
to the establishment of the Group’s £3.0bn Euro Medium Term Note Programme. Under the programme, (the Company), subject to
compliance with all relevant laws, regulations and directives, may from time to time issue notes. The aggregate principal amount of
notes issued by the Company outstanding under the programme will not at any time exceed £3.0bn. Additional information can be
found on the Group’s website.
The Board has authorised a share repurchase of up to £100m of shares in the market from 18 March 2022. The Company has authority
to make such purchases under a resolution approved by shareholders at the AGM on 27 May 2021. Any purchases made under this
programme will be announced to the market each day in line with regulatory requirements.
53. Controlling party
As at 31 December 2021 there was no controlling party of the ultimate parent company of the Group, OSB GROUP PLC.
54. Transactions with key management personnel
All related party transactions were made on terms equivalent to those that prevail in arm’s length transactions. During the year there
were no related party transactions between the key management personnel and the Group other than as described below.
Directors’ remuneration is disclosed in note 11 and in the Directors’ Remuneration Report on page 144. The Executive team are all
employees of OSB, the table below shows their aggregate remuneration:
2021
£’000
2020
£’000
Short-term employee benefits 5,144 3,743
Post-employment benefits 44 49
Share-based payments 2,414 501
7,602 4,293
Key management personnel and connected persons held deposits with the Group of £0.9m (2020: £1.4m).

237
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
55. Capital management
The Group’s capital management approach is to provide a sufficient capital base to cover business risks and support future business
development. The Group remained, throughout the year, compliant with its capital requirements as set out by the PRA, the Group’s
primary prudential supervisor.
The Group manages and reports its capital at a number of levels including Group level and for the two regulated banking entities
within the Group, on an individual consolidation and on an individual basis. The capital position of the two regulated banking entities
are not separately disclosed.
The Group’s capital management is based on the three ‘pillars’ of Basel II.
Under Pillar 1, the Group calculates its minimum capital requirements based on 8% of risk-weighted assets.
Under Pillar 2, the Group, and its regulated entities, complete an annual self-assessment of risks known as the ICAAP. The PRA applies
additional requirements to this assessment amount to cover risks under Pillar 2 to generate a Total Capital Requirement. Further, the
PRA sets capital buffers and the Group applies for imposition of the requirements and modification of rules incorporating the capital
buffers and Pillar 2 pursuant to the Financial Services and Markets Act 2000.
Pillar 3 requires firms to publish a set of disclosures which allow market participants to assess information on the Group’s capital, risk
exposures and risk assessment process. The Group’s Pillar 3 disclosures can be found on the Group’s website.
Basel III came into force through CRD IV. Basel III complements and enhances Basel I and II with additional safety measures. Basel
III changed definitions of regulatory capital, introduced new capital buffers, a non-risk adjusted leverage ratio, liquidity ratios and
modified the way regulatory capital is calculated.
The ultimate responsibility for capital adequacy rests with the Board of Directors. The Group’s ALCO is responsible for the
management of the capital process within the risk appetite defined by the Board, including approving policy, overseeing internal
controls and setting internal limits over capital ratios.
The Group actively manages its capital position and reports this on a regular basis to the Board and senior management via the ALCO
and other governance committees. Capital requirements are included within budgets, forecasts and strategic plans with initiatives
being executed against this plan.
The Group’s Pillar 1 capital information is presented below:
(Unaudited)
2021
£m
(Unaudited)
2020
£m
CET1 capital
Called up share capital 4.5 1,359.8
Share premium, capital contribution and share-based payment reserve 14.1 7.8
Retained earnings 3,215.1 1,608.6
Transfer reserve (1,355.3) (1,355.3)
Other reserves (4.0) (4.0)
Total equity attributable to ordinary shareholders 1,874.4 1,616.9
Foreseeable dividends (94.7) (64.9)
IFRS 9 transitional adjustment
1
2.9 4.9
COVID-19 ECL transitional adjustment
2
19.0 31.0
Deductions from CET1 capital
Prudent valuation adjustment
3
(1.0) (0.4)
Intangible assets
4
(18.4) (20.6)
Deferred tax asset (0.5) (0.9)
CET1 capital 1,781.7 1,566.0
AT1 capital
AT1 securities 150.0 –
Total Tier 1 capital 1,931.7 1,566.0
Total regulatory capital 1,931.7 1,566.0
Risk-weighted assets (unaudited) 9,101.6 8,565.7
1. The regulatory capital includes a £2.9m add-back under IFRS 9 transitional arrangements. This represents 50.0% of the IFRS 9 transitional adjustment booked directly to
retained earnings of £5.9m.
2. The COVID-19 ECL transitional adjustment relates to the Group’s increase in stage 1 and stage 2 ECL following the impacts of COVID-19 and for which transitional rules are
being adopted for regulatory capital purposes.
3. The Group has adopted the simplified approach under the Prudent Valuation rules, recognising a deduction equal to 0.1% of fair value assets and liabilities after adjusting for
hedge accounting.
4. All software assets continue to be fully deducted from capital in light of the pending intention of the PRA to consult on the CRR ‘Quick Fix’ package in this area.

238
OSB GROUP PLC Annual Report and Accounts 2021
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 December 2021
55. Capital management (Continued)
The movement in CET1 during the year was as follows:
(Unaudited)
2021
£m
(Unaudited)
2020
£m
At 1 January 1,566.0 1,339.6
Movement in retained earnings 1,606.5 1,055.4
Share premium from Sharesave Scheme vesting 0.7 2.6
Movement in other reserves (1,349.7) (858.1)
Movement in foreseeable dividends (29.8) (15.0)
IFRS 9 transitional adjustment (2.0) (0.4)
COVID-19 ECL transitional adjustment (12.0) 31.0
Movement in prudent valuation adjustment (0.6) 0.1
Net decrease in intangible assets 2.2 10.8
Movement in deferred tax asset for carried forward losses 0.4 –
At 31 December 1,781.7 1,566.0

239
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Note
2021
£m
2020
£m
Assets
Investments in subsidiaries and intercompany loans 2 1,582.6 1,425.9
Current taxation asset 0.3 –
Total assets 1,582.9 1,425.9
Liabilities
Intercompany loans 2 0.6 –
Other liabilities 0.2 –
0.8 –
Equity
Share capital 3 4.5 1,359.8
Share premium 3 0.7 –
Retained earnings 1,358.4 4.0
Other reserves 4 218.5 62.1
1,582.1 1,425.9
Total equity and liabilities 1,582.9 1,425.9
The profit after tax for the year ended 31 December 2021 of OSB GROUP PLC was £87.0m (2020: £0.1m). As permitted by section 408
of the Companies Act 2006, no separate Statement of Comprehensive Income is presented in respect of the Company.
The notes on pages 242 to 244 form an integral part of the Company financial statements.
The financial statements were approved by the Board of Directors on 17 March 2022 and were signed on its behalf by:
Andy Golding April Talintyre
Chief Executive Officer Chief Financial Officer
Company number: 11976839
Company Statement of Financial Position
As at 31 December 2021

240
OSB GROUP PLC Annual Report and Accounts 2021
Share capital
£m
Share
premium
£m
Transfer
reserve
£m
Own shares
1
£m
Share-based
payment
reserve
£m
Additional
Tier 1
securities
£m
Retained
earnings
£m
Total
£m
At 1 January 2020 – – – – – – – –
Profit for the year – – – – – – 0.1 0.1
Share-based payments – – – – 0.4 – – 0.4
Own shares
1
– – – (4.0) – – 3.9 (0.1)
Shares issued on
27 November 2020 1,359.8 – 65.7 – – – – 1,425.5
At 31 December 2020 1,359.8 – 65.7 (4.0) 0.4 – 4.0 1,425.9
Profit for the year – – – – – – 87.0 87.0
Dividend paid – – – – – – (86.7) (86.7)
Share-based payments – 0.7 – – 5.9 – 0.9 7.5
Issuance of Additional
Tier 1 securities – – – – – 150.0 – 150.0
Transactions costs on issuance
of Additional Tier 1 securities – – – – – – (1.6) (1.6)
Own shares
1
– – – 0.5 – – (0.5) –
Capital reduction (1,355.3) – – – – – 1,355.3 –
At 31 December 2021 4.5 0.7 65.7 (3.5) 6.3 150.0 1,358.4 1,582.1
1. The Company has adopted look-through accounting and consolidated the EBT effective from 27 November 2020. The Company initially recognised £6.1m of own shares,
with £3.9m recognised in retained earnings relating to gifts made to the EBT, and £2.2m in intercompany loans, relating to a loan from OSB to the EBT which funded the
acquisition of shares prior to 27 November 2020. As at 31 December 2021, the EBT had no outstanding intercompany borrowing (2020: £0.1m).
Company Statement of Changes in Equity
For the year ended 31 December 2021

241
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
2021
£m
2020
£m
Cash flows from operating activities
Profit before taxation 86.7 0.1
Changes in operating assets and liabilities:
Net increase in other liabilities 0.2 –
Change in intercompany loans 0.6 (2.2)
Cash generated/(used) in operating activities 87. 5 (2.1)
Cash flows from investing activities
Change in investments in subsidiaries (150.0) –
Cash used in investing activities (150.0) –
Cash flows from financing activities
Dividend paid (86.7) –
Issuance of Additional Tier 1 securities 148.4 –
Proceeds from issuance of shares under employee SAYE scheme 0.8 2.1
Cash generated from financing activities 62.5 2.1
Net increase in cash and cash equivalents – –
Cash and cash equivalents at the beginning of the year – –
Cash and cash equivalents at the end of the year – –
Movement in cash and cash equivalents – –
Company Statement of Cash Flows
For the year ended 31 December 2021

242
OSB GROUP PLC Annual Report and Accounts 2021
1. Basis of preparation
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by that Act,
the separate financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by
the United Kingdom (UK), and are presented in Pounds Sterling.
The financial statements have been prepared on the historical cost basis. The financial statements are presented in Pounds Sterling. All
amounts in the financial statements have been rounded to the nearest £0.1m (£m). The functional currency of the Company is Pounds
Sterling, which is the currency of the primary economic environment in which the Company operates.
The principal accounting policies adopted are the same as those set out in note 2 to the Group’s consolidated financial statements,
aside from accounting policy 2 y), Share-based payments. For the Company, the cost of the awards are charged on a straight-line
basis to investment in subsidiaries (with a corresponding increase in the share-based payment reserve within equity) over the vesting
period in which the employees become unconditionally entitled to the awards.
The Company has adopted the predecessor value method with an investment in subsidiary of OSBG being the book value of the
balance sheet in OSB at the date of insertion.
There are no critical judgements and estimates that apply to the Company.
2. Investments in subsidiaries and intercompany loans
The Company holds an investment in ordinary shares of £1,432.6m (2020: £1,425.9m) and in AT1 securities of £90.0m (2020: nil) in
its direct subsidiary, OneSavings Bank plc (OSB). The Company also holds an investment in AT1 securities of £60.0m (2020: nil) in an
indirect subsidiary, Charter Court Financial Services Limited.
Investment in
subsidiaries
£m
Intercompany
loans payable
£m
At 1 January 2020 – –
Net book value of OSB on 27 November 2020 1,425.5 –
Additions 0.4 (2.2)
Repayments – 2.2
At 31 December 2020 1,425.9 –
Additions
1
156.7 (1.4)
Repayments – 0.8
At 31 December 2021 1,582.6 (0.6)
1. Additions include purchase of AT1 securities of £90.0m issued by OSB and £60.0m issued by Charter Court Financial Services Limited and £6.7m relating to share-based
payments.
The transactions with OSB during the year comprise £1.4m transaction costs for the issuance of AT1 securities funded by OSB partially
offset by £0.8m cash received in OSB on the Company’s share issues.
Investments in subsidiaries are financial assets and intercompany loans are financial liabilities, all carried at amortised cost.
Intercompany loans are payable on demand and no interest is charged on these loans.
A list of the Company’s direct and indirect subsidiaries as at 31 December 2021 is shown below:
Direct investments Activity Registered office Ownership
OneSavings Bank plc Mortgage lending and deposit taking Reliance House 100%
Indirect investments Activity Registered office Ownership
5D Finance Limited Mortgage servicer Reliance House 100%
Broadlands Finance Limited Mortgage administration services Charter Court 100%
Canterbury Finance No.2 plc Special purpose vehicle Churchill Place –
Canterbury Finance No.3 plc Special purpose vehicle Churchill Place –
Canterbury Finance No.4 plc Special purpose vehicle Churchill Place –
Charter Court Financial Services Group Plc Holding company Charter Court 100%
Charter Court Financial Services Limited Mortgage lending and deposit taking Charter Court 100%
Charter Mortgages Limited Mortgage administration and analytical services Charter Court 100%
CMF 2020-1 plc Special purpose vehicle Churchill Place –
CML Warehouse Number 2 Limited Special purpose vehicle Churchill Place –
Easioption Limited Holding company Reliance House 100%
Exact Mortgage Experts Limited Group service company Charter Court 100%
Guernsey Home Loans Limited Mortgage provider Reliance House 100%
Guernsey Home Loans Limited (Guernsey) Mortgage provider Guernsey 100%
Heritable Development Finance Limited Mortgage originator and servicer Reliance House 100%
Notes to the Company Financial Statements
For the year ended 31 December 2021

243
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Indirect investments Activity Registered office Ownership
Inter Bay Financial I Limited Holding company Reliance House 100%
Inter Bay Financial II Limited Holding company Reliance House 100%
InterBay Asset Finance Limited Asset finance and mortgage provider Reliance House 100%
Interbay Funding, Ltd Mortgage servicer Reliance House 100%
Interbay Group Holdings Limited Holding company Reliance House 100%
Interbay Holdings Ltd Holding company Reliance House 100%
Interbay ML, Ltd Mortgage provider Reliance House 100%
Jersey Home Loans Limited Mortgage provider Reliance House 100%
Jersey Home Loans Limited (Jersey) Mortgage provider Jersey 100%
OSB India Private Limited Back office processing India 100%
Prestige Finance Limited Mortgage originator and servicer Reliance House 100%
Reliance Property Loans Limited Mortgage provider Reliance House 100%
Rochester Mortgages Limited Mortgage provider Reliance House 100%
A list of the Company’s direct and indirect subsidiaries as at 31 December 2020 is shown below:
Direct investments Activity Registered office Ownership
OneSavings Bank plc Mortgage lending and deposit taking Reliance House 100%
Indirect investments Activity Registered office Ownership
5D Finance Limited Mortgage servicer Reliance House 100%
Broadlands Finance Limited Mortgage administration services Charter Court 100%
Canterbury Finance No.2 plc Special purpose vehicle Churchill Place –
Canterbury Finance No.3 plc Special purpose vehicle Churchill Place –
Charter Court Financial Services Group Plc Holding company Charter Court 100%
Charter Court Financial Services Limited Mortgage lending and deposit taking Charter Court 100%
Charter Mortgages Limited Mortgage administration and analytical services Charter Court 100%
CMF 2020-1 plc Special purpose vehicle Churchill Place –
CML Warehouse Number 1 Limited Special purpose vehicle Bartholomew –
CML Warehouse Number 2 Limited Special purpose vehicle Churchill Place –
Easioption Limited Holding company Reliance House 100%
Exact Mortgage Experts Limited Group service company Charter Court 100%
Guernsey Home Loans Limited Mortgage provider Reliance House 100%
Guernsey Home Loans Limited (Guernsey) Mortgage provider Guernsey 100%
Heritable Development Finance Limited Mortgage originator and servicer Reliance House 100%
Inter Bay Financial I Limited Holding company Reliance House 100%
Inter Bay Financial II Limited Holding company Reliance House 100%
InterBay Asset Finance Limited Asset finance and mortgage provider Reliance House 100%
Interbay Funding, Ltd Mortgage servicer Reliance House 100%
Interbay Group Holdings Limited Holding company Reliance House 100%
Interbay Holdings Ltd Holding company Reliance House 100%
Interbay ML, Ltd Mortgage provider Reliance House 100%
Jersey Home Loans Limited Mortgage provider Reliance House 100%
Jersey Home Loans Limited (Jersey) Mortgage provider Jersey 100%
OSB India Private Limited Back office processing India 100%
Precise Mortgage Funding 2014-1 plc Special purpose vehicle Great St. Helen’s –
Precise Mortgage Funding 2014-2 plc Special purpose vehicle Great St. Helen’s –
Precise Mortgage Funding 2015-1 plc Special purpose vehicle Great St. Helen’s –
Precise Mortgage Funding 2015-3R plc Special purpose vehicle Great St. Helen’s –
Prestige Finance Limited Mortgage originator and servicer Reliance House 100%
Reliance Property Loans Limited Mortgage provider Reliance House 100%
Rochester Mortgages Limited Mortgage provider Reliance House 100%
All investments are in the ordinary share capital of each subsidiary.
OSB India Private Limited is owned 70.28% by OneSavings Bank plc, 29.72% by Easioption Limited and 0.001% by Reliance Property
Loans Limited.
Special purpose vehicles which the Group controls are treated as subsidiaries for accounting purposes.
2. Investments in subsidiaries and intercompany loans (Continued)

244
OSB GROUP PLC Annual Report and Accounts 2021
2. Investments in subsidiaries and intercompany loans (Continued)
All of the entities listed above have been consolidated into the Group’s consolidated financial statements. The location of the entities
listed above are disclosed in note 50 to the Group’s consolidated financial statements.
The investment is reviewed annually for indicators of impairment. If impairment indicators are identified an impairment review of the
investment is conducted which will quantify if the carry value is in excess of the recoverable amount or an impairment has occurred.
In determining recoverable amount the fair value less costs to sell and the value in use are assessed, with the value in use being an
estimate of the present value of future cash flows generated by the investment.
The following are the registered offices of the subsidiaries:
Bartholomew – 1 Bartholomew Lane, London, England, EC2N 2AX
Charter Court – 2 Charter Court, Broadlands, Wolverhampton, WV10 6TD
Churchill Place – 5 Churchill Place, 10th Floor, London, E14 5HU
Great St. Helen’s – 35 Great St. Helen’s, London, EC3A 6AP
Guernsey – 1st Floor, Tudor House, Le Bordage, St Peter Port, Guernsey, GY1 1DB
India – Salarpuria Magnificia No. 78, 9th & 10th floor, Old Madras Road, Bangalore, India, 560016
Jersey – 26 New Street, St Helier, Jersey, JE2 3RA
Reliance House – Reliance House, Sun Pier, Chatham, Kent, ME4 4ET
The Company received no gifts during the year (2020: £0.1m from OSB).
3. Share capital
Number of
shares issued
and fully paid
Nominal
value
£m
Premium
£m
At 1 January 2020 2 – –
Conversion of £1 ordinary shares to £0.01 ordinary shares 198 – –
Issuance of 408 £0.01 ordinary shares 408 – –
Conversion of £0.01 ordinary shares to £3.04 ordinary shares (606) – –
Issuance of new £3.04 ordinary share on Insertion 447,3 0 4,196 1,359.8 –
Shares issued under employee share plans 8,582 – –
At 31 December 2020 447,312,780 1,359.8 –
Capital reduction of £3.04 nominal value shares to £0.01 nominal value shares – (1,355.3) –
Shares issued under employee share plans 1,315,075 – 0.7
At 31 December 2021 448,627,855 4.5 0.7
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at
meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.
All ordinary shares issued in the current and prior year were fully paid.
4. Other reserves
The Company’s other reserves are as follows:
2021
£m
2020
£m
Share-based payment 6.3 0.4
Transfer 65.7 65.7
Own shares (3.5) (4.0)
AT1 securities 150.0 –
218.5 62.1
Transfer reserve
The transfer reserve represents the difference between the net assets of the Group at the point of insertion of OSBG as the listed
holding company and the fair value of the newly issued share capital of OSBG.
For own shares and AT1 securities see note 44 of the Group’s consolidated financial statements.
5. Directors and employees
The Company has no employees. OneSavings Bank plc provides the Company with employee services and bears the costs associated
with the Directors of the Company. These costs are not recharged to the Company.
6. Controlling party
As at 31 December 2021 there was no controlling party of OSB GROUP PLC.
Notes to the Company Financial Statements (Continued)
For the year ended 31 December 2021

245
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Opinion
We have performed an independent reasonable assurance
engagement on the Alternative Performance Measures
(collectively, the APMs) set out below for the financial year ended
31 December 2021. The assured APMs are highlighted with the
symbol  throughout the OSB GROUP PLC (OSB Group) 2021
Annual Report and Accounts (ARA). The definition and the basis
of preparation for each of the assured APMs is described in the
Appendix to the 2021 ARA on pages 246 to 248 (OSB Group’s
APM Definitions and Basis of Preparation).
Statutory basis
} Gross new lending
} Net interest margin
} Cost to income
} Management expense ratio
} Loan loss ratio
} Dividend per share
} Basic earnings per share
} Return on equity
Underlying basis
} Net interest margin
} Cost to income
} Management expense ratio
} Loan loss ratio
} Basic earnings per share
} Return on equity
In our opinion the assured APMs for the financial year ended
31 December 2021, have been prepared, in all material respects,
in accordance with OSB Group’s APM Definitions and Basis of
Preparation.
Directors’ responsibilities
The directors of OSB Group are responsible for:
} selecting APMs with which to describe the entity’s
performance and appropriate criteria (as set out in the
Group’s APM Definitions and Basis of Preparation) to measure
them;
} designing, implementing and maintaining internal controls
relevant to the preparation and presentation of the assured
APMs that are free from material misstatement, whether due
to fraud or error; and
} preparing and presenting the APMs.
Our responsibilities
Our responsibility is to express an opinion on the assured APMs,
based on our assurance work. We performed a reasonable
assurance engagement in accordance with International
Standard on Assurance Engagements (ISAE) 3000 (Revised),
Assurance Engagements other than Audits or Reviews of
Historical Financial Information.
We are required to plan and perform our procedures in
order to obtain reasonable assurance as to whether the
assured APMs have been prepared, in all material respects,
in accordance with OSB Group’s APM Definitions and Basis of
Preparation.
Appendices
1. Independent assurance statement by Deloitte LLP to OSB GROUP PLC on selected Alternative
Performance Measures
The nature, timing and extent of the assurance procedures
selected depended on our judgment, including the assessment
of the risks of material misstatement, whether due to fraud or
error, of the assured APMs. In making those risk assessments, we
considered internal controls relevant to the preparation of the
assured APMs.
Based on that assessment we carried out testing which included:
} Agreeing amounts used in the calculation of APMs which are
derived or extracted from the audited financial statements
of OSB Group for the year ended 31 December 2021 to the
financial statements.
} For amounts used in the calculation of APMs which were not
derived or extracted from the financial statements of OSB
Group for the year ended 31 December 2021 testing, on a
sample basis, the underlying data used in determining the
assured APMs.
} Checking the mathematical accuracy of the calculations used
to prepare the assured APMs and testing whether they were
prepared in accordance with OSB Group’s APM Definitions
and Basis of Preparation;
} Reading the 2021 ARA and assessing whether the assured
APMs were presented and described consistently.
We were not asked to give, and therefore have not given any
assurance over (i) any APMs other than the assured APMs or (ii)
other data in the ARA as part of this engagement.
We believe that the evidence obtained is sufficient and
appropriate to provide a basis for our opinion.
Our independence and quality control
We have complied with the independence and other ethical
requirements of the FRC Ethical Standard and the Code of
Ethics for Professional Accountants issued by the International
Ethics Standards Board for Accountants, which is founded on
fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional
behaviour.
We apply International Standard on Quality Control 1.
Accordingly, we maintain a comprehensive system of quality
control including documented policies and procedures regarding
compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
Use of our report
This assurance report is made solely to OSB GROUP PLC in
accordance with the terms of the engagement letter between
us. Our work has been undertaken so that we might state to OSB
GROUP PLC those matters we are required to state to them in
an independent reasonable assurance report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than OSB GROUP
PLC for our assurance work, for this assurance report or for the
opinions we have formed.
Deloitte LLP, London
17 March 2022

246
OSB GROUP PLC Annual Report and Accounts 2021
Appendices (Continued)
2. Alternative performance measures
In this Annual report, the Group used alternative performance measures (APMs) when presenting underlying results in 2021 and 2020
as Management believe they provide a more consistent basis for comparing the Group’s performance between financial periods.
Underlying results exclude exceptional items, integration costs and other acquisition-related items.
APMs reflect an important aspect of the way in which operating targets are defined and performance is monitored by the Board.
However, APMs in this Annual report are not a substitute for IFRS measures and readers should consider the IFRS measures as well.
Below we provide definitions and the calculation of APMs used throughout this Annual report both on a statutory basis and underlying
basis for 2021 and 2020.
Net interest margin (NIM)
NIM is defined as net interest income as a percentage of a 13-point average
1
of interest earning assets (cash, investment securities,
loans and advances to customers and credit institutions). It represents the margin earned on loans and advances and liquid assets
after swap expense/income and cost of funds.
2021
£m
2020
£m
Net interest income – statutory A 5 87.6 472.2
Add back: acquisition-related items
2
62.9 61.8
Net interest income – underlying B 650.5 534.0
13 point average of interest earning assets – statutory C 23,207.7 21,883.4
13 point average of interest earning assets – underlying D 23,033.7 21,663.2
NIM statutory equals A/C 2.53% 2.16%
NIM underlying equals B/D 2.82% 2.47%
Cost to income ratio
The cost to income ratio is defined as administrative expenses as a percentage of total income. It is a measure of operational
efficiency.
2021
£m
2020
£m
Administrative expenses – statutory A 166.5 157.0
Add back: acquisition-related items
2
(4.8) (4.3)
Administrative expenses – underlying B 161.7 152.7
Total income – statutory C 629.0 508.6
Add back: acquisition-related items
2
50.2 61.6
Total income – underlying D 679.2 570.2
Cost to income statutory equals A/C 26% 31%
Cost to income underlying equals B/D 24% 27%
Management expense ratio
The management expense ratio is defined as administrative expenses as a percentage of a 13-point average
1
of total assets.
2021
£m
2020
£m
Administrative expenses – statutory (as in cost to income ratio above) A 166.5 157.0
Administrative expenses – underlying (as in cost to income ratio above) B 161.7 152.7
13 point average of total assets – statutory C 23,382.6 22,140.1
13 point average of total assets – underlying D 23,231.5 21,931.8
Management expense ratio statutory equals A/C 0.71% 0.71%
Management expense ratio underlying equals B/D 0.70% 0.70%

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OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Loan loss ratio
The loan loss ratio is defined as impairment of financial assets as a percentage of a 13-point average
1
of gross loans and advances. It is
a measure of the credit performance of the loan book.
2021
£m
2020
£m
Impairment of financial assets – statutory A (4.4) 71.0
Add back: acquisition-related items
2
(0.5) 0.2
Impairment of financial assets – underlying B (4.9) 71.2
13 point average of gross loans – statutory C 20,327.5 18,739.0
13 point average of gross loans – underlying D 20,164.3 18,508.5
Loan loss ratio statutory equals A/C (0.02)% 0.38%
Loan loss ratio underlying equals B/D (0.02)% 0.38%
Return on equity (RoE)
RoE is defined as profit attributable to ordinary shareholders, which is profit after tax and after deducting coupons on non-controlling
interest securities, as a percentage of a 13-point average
1
of shareholders’ equity (excluding £60m of non-controlling interest securities
up to September 2021 and £150m of AT1 securities from October 2021).
2021
£m
2020
£m
Profit after tax – statutory 345.3 196.3
Coupons on AT1 securities (4.7) (5.5)
Profit attributable to ordinary shareholders – statutory A 340.6 190.8
Add back: acquisition-related items
2
47.8 68.6
Profit attributable to ordinary shareholders – underlying B 388.4 259.4
13 point average of shareholders’ equity (excluding AT1 securities) – statutory C 1,741.1 1,514.2
13 point average of shareholders’ equity (excluding AT1 securities) – underlying D 1,632.4 1,363.8
Return on equity statutory equals A/C 20% 13%
Return on equity underlying equals B/D 24% 19%
Basic earnings per share
Basic earnings per share is defined as profit attributable to ordinary shareholders, which is profit after tax and after deducting
coupons on non-controlling interest securities, gross of tax, divided by the weighted average number of ordinary shares in issue.
2021
£m
2020
£m
Profit attributable to ordinary shareholders – statutory (as in RoE ratio above) A 340.6 190.8
Profit attributable to ordinary shareholders – underlying (as in RoE ratio above) B 388.4 259.4
Weighted average number of ordinary shares in issue – statutory C 448.1 446.2
Weighted average number of ordinary shares in issue – underlying D 448.1 446.2
Basic earnings per share statutory equals A/C 76.0 42.8
Basic earnings per share underlying equals B/D 86.7 58.1
1. 13-point average is calculated as an average of opening balance and closing balances for 12 months of the financial year.
2. The acquisition-related items are detailed in the reconciliation of statutory to underlying results in the Financial review.

248
OSB GROUP PLC Annual Report and Accounts 2021
Calculation of 2021 final dividend
The table below shows the basis of calculation of the Company’s recommended final dividend for 2021:
2021
£m
2020
£m
Statutory profit after tax 345.3 196.3
Less: coupons on non-controlling interest securities classified as equity (4.7) (5.5)
Statutory profit attributable to ordinary shareholders 340.6 190.8
Add back: Group’s integration costs 5.0 9.8
Tax on Group’s integration costs (1.3) (2.4)
Add back: Group’s exceptional items 0.2 3.3
Add back: amortisation of fair value adjustment 64.5 64.5
Add back: amortisation of inception adjustment (11.0) (13.3)
Add back: amortisation of cancelled swaps (1.6) (2.7)
Add back: amortisation of intangible assets acquired 4.8 11.3
Less: impairment reversal of intangible assets recognised on Combination (3.1) –
Release of deferred taxation on the above amortisation adjustments (8.5) (14.8)
Gain on sale of financial assets (1.7) 13.1
Add back: ECL on Combination 0.5 (0.2)
Underlying profit attributable to ordinary shareholders 388.4 259.4
Total dividend: 30% (2020: 25%) of underlying profit attributable to ordinary shareholders 116.6 64.9
Less: interim dividends paid (21.9) –
Recommended final dividend 94.7 64.9
Number of ordinary shares in issue 448,627,855 447,312,780
Recommended final dividend per share (pence) 21.1 14.5
Appendices (Continued)

249
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
AGM Annual General Meeting
ALCO Group Assets and Liabilities Committee
BoE Bank of England
CCFS Charter Court Financial Services
CEO Chief Executive Officer
CET1 Common Equity Tier 1
CFO Chief Financial Officer
CRD IV Capital Requirements Directive and Regulation
CRO Chief Risk Officer
DSBP Deferred Share Bonus Plan
EAD Exposure at Default
ECL Expected Credit Loss
EIR Effective Interest Rate
EPS Earnings Per Share
EU European Union
FCA Financial Conduct Authority
FRC Financial Reporting Council
FSCS Financial Services Compensation Scheme
FSD Forced Sale Discount
FTSE Financial Times Stock Exchange
HMRC Her Majesty’s Revenue and Customs
HPI House Price Index
IAS International Accounting Standards
IBOR Interbank Offered Rate
ICAAP Internal Capital Adequacy Assessment Process
ICR Interest Coverage Ratio
IFRS International Financial Reporting Standards
ILAAP Internal Liquidity Adequacy Assessment Process
ILTR Indexed Long-Term Repo
IPO Initial Public Offering
Glossary
IRB Internal Ratings-Based approach to credit risk
ISA Individual Savings Account
KRFI Kent Reliance for Intermediaries
KRPS Kent Reliance Provident Society Limited
LCR Liquidity Coverage Ratio
LGD Loss Given Default
LIBOR London Interbank Offered Rate
LTIP Long-Term Incentive Plan
LTV Loan to value
NIM Net Interest Margin
NPS Net Promoter Score
OSB OneSavings Bank plc
OSBG OSB GROUP PLC
PD Probability of Default
PPD Propensity to go to Possession Given Default
PRA Prudential Regulation Authority
PSBs Perpetual Subordinated Bonds
PSP Performance Share Plan
RMBS Residential Mortgage-Backed Securities
RoE Return on equity
RWA Risk weighted assets
SAYE Save As You Earn or Sharesave
SDLT Stamp Duty Land Tax
SICR Significant Increase in Credit Risk
SID Senior Independent Director
SME Small and Medium Enterprises
SONIA Sterling Overnight Index Average
SRMF Strategic Risk Management Framework
TFS Term Funding Scheme
TFSME Term Funding Scheme with additional incentives for
SMEs

250
OSB GROUP PLC Annual Report and Accounts 2021
Registered office and head office
OSB House
Quayside
Chatham Maritime
Chatham
Kent, ME4 4QZ
United Kingdom
Registered in England no: 11976839
www.osb.co.uk
Registrars
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 8LU
United Kingdom
Telephone: 0371 384 2030
International: +44 121 415 7047
Investor relations
Email: osbrelations@osb.co.uk
Telephone: 01634 838973
Private shareholders are welcome to contact the Company
Secretary if they have any questions or concerns they wish to be
raised with the Board.
Company information

251
OSB GROUP PLC Annual Report and Accounts 2021
Overview Strategic Report Governance Financial Statements Appendices
Independent auditor’s reasonable assurance report on the compliance of OSB GROUP PLC’s
European Single Electronic Format (ESEF) prepared Annual Financial Report with the European
Single Electronic Format Regulatory Technical Standard (‘ESEF RTS’) as required by the Financial
Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R
To the Members of OSB GROUP PLC
Report on compliance with the requirements for iXBRL mark up (‘tagging’) of consolidated financial statements included in
the ESEF-prepared Annual Financial Report
We have undertaken a reasonable assurance engagement on the iXBRL mark up of consolidated financial statements for the year
ended 31 December 2021 of OSB GROUP PLC (the “company”) included in the ESEF-prepared Annual Financial Report prepared by
thecompany.
Opinion
In our opinion, the consolidated financial statements for the year ended 31 December 2021 of the company included in the ESEF-
prepared Annual Financial Report, are marked up, in all material respects, in compliance with the ESEF RTS.
The directors’ responsibility for the ESEF-prepared Annual Financial Report prepared in compliance with the ESEF RTS
The directors are responsible for preparing the ESEF-prepared Annual Financial Report. This responsibility includes:
} the selection and application of appropriate iXBRL tags using judgement where necessary;
} ensuring consistency between digitised information and the consolidated financial statements presented in human-readable
format; and
} the design, implementation and maintenance of internal control relevant to the application of the ESEF RTS.
Our independence and quality control
We have complied with the independence and other ethical requirements of Financial Reporting Council’s (the ‘FRC’s’) Ethical
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with
theserequirements.
We apply International Standard on Quality Control 1 and, accordingly, maintain a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Our responsibility
Our responsibility is to express an opinion on whether the electronic mark up of consolidated financial statements complies in all
material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in
accordance with International Standard on Assurance Engagements (UK) 3000, Assurance Engagements Other than Audits or Reviews
of Historical Financial Information (‘ISAE (UK) 3000’) issued by the FRC.
A reasonable assurance engagement in accordance with ISAE (UK) 3000 involves performing procedures to obtain reasonable
assurance about the compliance of the mark up of the consolidated financial statements with the ESEF RTS. The nature, timing and
extent of procedures selected depend on the practitioner’s judgement, including the assessment of the risks of material departures
from the requirements set out in the ESEF RTS, whether due to fraud or error. Our reasonable assurance engagement consisted
primarily of:
} obtaining an understanding of the ESEF RTS mark up process, including internal control over the mark up process relevant to the
engagement;
} reconciling the marked up data with the audited consolidated financial statements of the company dated 31 December 2021;
} evaluating the appropriateness of the company’s mark up of the consolidated financial statements;
} evaluating the appropriateness of the company’s use of iXBRL elements selected from a permitted taxonomy and the creation of
extension elements where no suitable element in the permitted taxonomy has been identified; and
} evaluating the use of anchoring in relation to the extension elements.
In this report we do not express an audit opinion, review conclusion or any other assurance conclusion on the consolidated financial
statements. Our audit opinion relating to the consolidated financial statements of the company for the year ended 31 December 2021
is set out in our Independent Auditor’s Report dated 17 March 2022.
Use of our report
Our report is made solely to the company’s members, as a body, in accordance with ISAE (UK) 3000. Our work has been undertaken
so that we might state to the company those matters we are required to state to them in this report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body for our work, this report, or for the conclusions we have formed.
Robert Topley FCA
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
31 March 2022

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OSB GROUP PLC Annual Report and Accounts 2021
Notes

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OSB GROUP PLC Annual Report and Accounts 2021
www.osb.co.uk
OSB House, Quayside, Chatham, Kent, ME4 4QZ
T +44 (0) 1634 848944